[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                 TREASURY, POSTAL SERVICE, AND GENERAL
                     GOVERNMENT APPROPRIATIONS FOR
                            FISCAL YEAR 1998

=========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

  SUBCOMMITTEE ON THE TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT 
                             APPROPRIATIONS

                      JIM KOLBE, Arizona, Chairman

FRANK R. WOLF, Virginia          STENY H. HOYER, Maryland
ERNEST J. ISTOOK, Jr., Oklahoma  CARRIE P. MEEK, Florida
MICHAEL P. FORBES, New York      DAVID E. PRICE, North Carolina
ANNE M. NORTHUP, Kentucky        
ROBERT B. ADERHOLT, Alabama      

 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

Michelle Mrdeza, Elizabeth A. Phillips, Jeff Ashford, and Melanie Marshall,
                            Staff Assistants
                                ________

                                 PART 4

                          INDEPENDENT AGENCIES
                                                                   Page
Federal Election Commission.......................................    1
General Services Administration...................................  139
National Archives and Records Administration......................  423
Committee for Purchase From People Who Are Blind or Severely 
 Disabled.........................................................  535
Federal Labor Relations Authority.................................  551
John F. Kennedy Assassination Record Review Board.................  623
Merit Systems Protection Board....................................  629
Office of Government Ethics.......................................  659
Office of Personnel Management....................................  699
Office of Inspector General, OPM..................................  707
Office of Special Counsel.........................................  839
United States Tax Court...........................................  857
                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
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                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        THOMAS M. FOGLIETTA, Pennsylvania   
HENRY BONILLA, Texas                   ESTEBAN EDWARD TORRES, California   
JOE KNOLLENBERG, Michigan              NITA M. LOWEY, New York             
DAN MILLER, Florida                    JOSE E. SERRANO, New York           
JAY DICKEY, Arkansas                   ROSA L. DeLAURO, Connecticut        
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia            
MIKE PARKER, Mississippi               JOHN W. OLVER, Massachusetts        
RODNEY P. FRELINGHUYSEN, New Jersey    ED PASTOR, Arizona                  
ROGER F. WICKER, Mississippi           CARRIE P. MEEK, Florida             
MICHAEL P. FORBES, New York            DAVID E. PRICE, North Carolina      
GEORGE R. NETHERCUTT, Jr., Washington  CHET EDWARDS, Texas                 
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director











               TREASURY, POSTAL SERVICE, AND GENERAL
                GOVERNMENT APPROPRIATIONS FOR 1998

                              ----------                              

                                          Thursday, March 13, 1997.

                      FEDERAL ELECTION COMMISSION

                               WITNESSES

JOHN WARREN McGARRY, CHAIRMAN
JOAN D. AIKENS, VICE CHAIRMAN
SCOTT E. THOMAS, COMMISSIONER

                     Summary Statement of Mr. Kolbe

    Mr. Kolbe. The meeting of the subcommittee on Treasury, 
Postal Service, and General Government will come to order, and 
I am pleased especially to welcome the chairman of the full 
committee. Mr. Chairman, you should move down here.
    Mr. Livingston. Here is my sign. Just go where I am 
designated? Thank you, Mr. Chairman.
    Mr. Kolbe. As well as Mr. Hoyer, who is suffering a little 
from the flu, I understand.
    Mr. Hoyer. No, just a cold. The bad news is, I have a cold; 
the good news is I think it is on the way out, not on the way 
in.
    Mr. Kolbe. And we are also pleased to welcome the Federal 
Election Commission here this afternoon. As my colleagues know, 
the FEC has both a fiscal year 1997 submitted supplemental 
appropriations as well as their fiscal year 1998 budget 
amendment--budget and budget amendment. So we have a lot of 
stuff to talk about here: Budget, budget amendment, and 
supplemental.
    As I have reviewed the FEC requests that are pending before 
us, I do have a number of concerns. First, the FEC's budget has 
grown by an astounding 100 percent since fiscal year 1991, 
staffing has grown by 43 percent.
    Second, the FEC work loads have also had phenomenal 
increases. The number of transactions entered into the FEC 
disclosure database has more than doubled the 1988 to 1992 
Presidential cycles--Presidential and congressional cycles, and 
FEC is estimating 2 million transactions for the 1996 cycle.
    Third, FEC continues to come before Congress requesting 
additional staff to address their work load increases.
    Fourth, it seems FEC continues to resist efforts to 
modernize its operations. I know this committee has had several 
serious concerns with FEC over the years, including efforts to 
achieve full modernization. I have reviewed the plan for 
modernization, and I must say I am pleased to see there is not 
only a strategic plan but also some milestones and schedules 
for implementation, and I commend the Commissioners here today 
for their attention to this crucial project.
    What concerns me is, the FEC's 1998 budget proposes to slip 
automation, and in fact the question is a full $1.9 million 
below the original plan. Certain projects, some of them crucial 
to helping FEC respond in a timely fashion to complaints and 
potential violations, are being slipped by several years, and 
this doesn't strike me as a very prudent course of action.
    So I look forward to hearing the testimony of FEC today. 
Perhaps we can clear up some of these issues. Perhaps you can 
sort out exactly what resources are needed and in what form for 
FEC to fulfill their statutory obligations.
    I now call on both of my colleagues for opening statements.
    Mr. Hoyer.
    Mr. Hoyer. I will yield to the chairman.

                  Summary Statement of Mr. Livingston

    Mr. Livingston. Thank you for yielding. I have a few 
comments, but if you would like--thank you.
    Thank you, Mr. Chairman, and I would like to thank the 
representatives of the Federal Election Commission for coming. 
And let me say at the outset, I have made my views about the 
FEC known over the years, and likewise the Commission makes its 
views known either through the hearing process or publicly 
through the press, and I think maybe there is room for 
conciliation if we just don't banter about it too much in the 
press.
    Let me say that I want to applaud your comments. The fact 
is that the Commission has grown by 100 percent since 1991, and 
the requests that are before us are for substantial increases, 
7.8 FTEs and $1.78 million as a supplemental request for 1997, 
a reduced performance level request of $34.3 million and 313 
FTEs for 1998. That is a $6.1 million increase, or a standard 
performance level request of $37.5 million and 331 FTEs at a 
$9.4 million increase.
    You know, FEC has grown and it has acquired additional 
responsibilities as time has gone on, there is no doubt about 
that. But when we read in the paper that the Federal Election 
Commission members have gone to a political convention or 
another, I would like to know whether or not the taxpayer has 
been sent the bill for that.
    When we hear that there are cash awards for incentives, I 
would like to know if the taxpayer is held accountable.
    When we see that there is a request for tuition assistance 
for employees of the Federal Election Commission, I would like 
to know if the taxpayer is held accountable for that.
    When we understand that there is progressing a very fine 
plan for modernization but that it has not been fully 
implemented and that there seems to be a general reluctance to 
implement it, I guess we have to ask, well, why? As has been 
suggested by some of us in Congress, it might be wise to put 
term limits on Commission members. At least that ought to be an 
issue that we ought to elevate for discussion, perhaps within 
the appropriations process.
    Salaries and benefits up 57 percent, cash awards up 191 
percent, travel up 75 percent, Audit Division up 100 percent, 
and you have the general feeling among candidates for office, 
whether they are incumbents or not, that the FEC is a 
burdensome bureaucracy that makes running for office 
andparticipating in the electoral process both complex and dangerous, 
that the FEC has spun out so many regulations and conducted so many 
enforcement cases that are not necessarily followed through, that drag 
on for several years, that honest people become criminals and serious 
offenders are not adequately dealt with, that perhaps the FEC ought to 
do a better job of prioritization of the cases and dwell less on 
increased numbers of people but better utilization of those people and 
of the technology available to it.
    I have to recall that there have been numerous suggestions 
for improvement, and one was, years ago, that the ex officio 
members be booted out of the Commission deliberations or that 
the ex officio members' vote not be voted on.
    The Court of Appeals ended up handing down a decision 
directly confirming that issue, that belief, and yet it was a 
year afterwards, a year after that decision, that the FEC 
finally moved to move the ex officio member out.
    I remember when one former Member of the House, later 
former Member of the Senate, lost his race for reelection to 
the Senate and was involved in a contest before the Commission, 
only to find that he was appointed by the then Majority Leader 
of the Senate to sit on the Commission as an ex officio member 
in some capacity while the Commission was entrusted with the 
deliberation of his case.
    It is issues of that nature that have not added to the 
confidence that the FEC truly is motivated to deal with harsh 
offenders and not just to complicate the lives of the average 
Member of Congress, be it House or Senate.
    There is currently ongoing a House investigation in 
California. I have heard of no FEC presence there. It is a very 
significant race. There is a race involving the Senate in 
Louisiana. I have heard of no significant presence by the FEC 
there. And I guess I am asking in general whether or not the 
FEC is prepared to prioritize its efforts and to go after those 
cases that really deserve inspection and stop picayunish 
efforts to micromanage the lives of every candidate and/or 
incumbent. That concerns me.
    That is an adequate opening statement, Mr. Chairman, but I 
do have other concerns which I am sure I will have a chance to 
express.
    Mr. Kolbe. Absolutely.
    Mr. Hoyer.

                     Summary Statement of Mr. Hoyer

    Mr. Hoyer. Thank you very much, Mr. Chairman.
    I want to welcome Ms. Aikens and Chairman McGarry and Mr. 
Scott, to the hearing.
    Mr. Chairman, the chairman of the committee, Chairman 
Livingston, has started on a very positive note. I don't mean 
the litany of concerns he had, but at the outset I think he 
expressed the fact that we need to work together on this to 
make sure that the expectations of the Congress of the United 
States as expressed in statute, and the expectations of the 
American public that they will have elections that are fair are 
met. We need to ensure that the campaign finance laws as they 
exist are carried out appropriately, and money is neither 
misused or misappropriated, and that the public has an 
opportunity to know who, in fact, contributes to candidates or 
parties so that they can make a determination as to the 
relationship between those contributions and the proposing and 
implementation and adoption of policy.
    We have had this discussion, Mr. Chairman, through the 
years. Mr. Livingston and I have served on the House Oversight 
Committee together and on the Appropriations Committee 
together, so we have had a lot of opportunity to discuss this 
matter.
    But I want to say, that it is important that we all work 
together. Currently, there is very great public concern about 
campaign financing, and although the present focus is on the 
White House, it is clear from the actions yesterday in the 
United States, what I predict will be the inevitable result 
here in the House of Representatives, that the focus on 
campaign financing will be very broad indeed, certainly 
incorporate Members of Congress, as it should, and may go 
broader than that.
    The bottom line is, it is critically important, Mr. 
Chairman, that we come to grips with the fact that if this 
agency is to perform its duties properly, it needs to have the 
resources to do so. If it is not utilizing those resources 
properly, then it is this committee's duty and responsibility 
to address that, and that is what I think Chairman Livingston 
is talking about, and he is right to do that.
    We can differ on whether they are doing that, but you 
observe, Mr. Chairman, that while the budget has doubled, the 
work load has more than doubled in that same time frame. As a 
matter of fact, I think you indicated from 1992 to 1997 it had 
doubled, but from 1988 to 1992 the work load had doubled.
    So I presume, without having analyzed the figures myself, 
the work load clearly has escalated beyond the rise in the 
budget. We would expect that. We would expect to have the 
computer and staff capacity to deal with an increase in work 
load without having a concurrent equal increase in resources, 
in the words of the Vice President, doing more with less. We 
need to do that because we can't simply escalate.
    The modernization process is critical. I think Chairman 
Livingston's focus on that is correct. He and I have differed 
somewhat on the success with which the FEC was pursuing that. 
We will talk about that today.
    But suffice it to say that in the present day, with 
campaign finance being on the front page of every newspaper in 
the United States, it is very important in a bipartisan sense, 
from the perspective of having the public have faith in its 
democracy and in the fairness of its elections, that this 
Commission be able to operate effectively so that the public 
can be confident that its information is accurate and timely. 
And to the extent that we do deal from time to time with little 
issues, they do waste our time.
    Now, my own experience with the Commission, I will tell the 
big chairman, as we call him, is that I haven't always been 
happy with the FEC's determinations. However, I think they have 
been right, even dealing with my own campaign, and for the most 
part I think my campaign since 1981 has been treated fairly. 
And we have messed up a couple of times, but that was our own 
fault. We corrected it and paid the price for that and went on.
    But the bigger picture is, even though it may annoy us from 
time to time, that if the public doesn't have the faith that 
they are getting correct information and we are playing by the 
rules, we are all going to suffer. I think that is in the 
interest of us all to make the case.
    Mr. Kolbe. Thank you.
    With those openings statement, I will turn to the 
Commission.

                    Summary Statement of Mr. McGarry

    Mr. McGarry. I will make the introductions for thebenefit 
of the official record, Mr. Chairman.
    Mr. Kolbe. And we note that the full testimony will be 
placed in the record. If you would summarize it, we would 
appreciate it, so we can get to the questions.
    Mr. McGarry. Good afternoon, Chairman Kolbe, Mr. Hoyer, and 
Chairman Livingston. For the benefit of the official record and 
the audience, let me state that I am John Warren McGarry, 
current Chairman of the Federal Election Commission.
    I want to thank you and the other members of this committee 
for the opportunity to present testimony on behalf of the 
Federal Election Commission fiscal year 1998 budget request.
    Today I am joined here at the witness table by Vice 
Chairman Joan Aikens and Commissioner Scott Thomas. In her 
capacity as chairman of the Commission's Finance Committee, 
Vice Chairman Aikens will present our testimony this afternoon. 
As always, we will all be available for questions after that 
presentation.
    I would only make one 30-second comment, and that is that 
as of January 31, this year, the Federal Election Commission 
had 366 cases. Between May 1 and November 30 in this election, 
214 external complaints were filed with the Commission. These 
have to be in writing and under oath and state a prima facie 
violation. This 214 number does not include referrals from 
other agencies or referrals from our Reports Analysis Division 
from the desk audits they do on the reports they file. These 
are external complaints.
    So I only point that out to begin, and I know that Vice 
Chairman Aikens is going to give the testimony, but I think it 
is critically important to put that on the table right off, and 
I thank you very much.
    Vice Chairman Aikens.
    Ms. Aikens. Mr. Chairman.
    Mr. Kolbe. Would you put the microphone over there.

                    Summary Statement of Ms. Aikens

    Ms. Aikens. Thank you. Mr. Chairman, Mr. Big Chairman, Mr. 
Hoyer, Mr. Aderholt, as chairman of the Finance Committee, I am 
here today to speak in support of the Federal Election 
Commission's fiscal year 1998 budget request.
    Before I begin, I would like to say that some of the 
figures I will give to you have been updated since our full 
testimony was submitted. I don't need to tell anyone in this 
room, the 1996 election period saw unprecedented amounts of 
financial activity, and in our submitted testimony we have a 
chart on page 16 that shows from 1976 to 1996 the increase in 
the total disbursements in Federal elections.
    The sheer volume of activity in violation of the FECA has 
forced us to reevaluate our fiscal year 1998 budget request. 
Therefore, I will present today a two-part request; first 
justifying and explaining our original 1998 request which has 
been approved by OMB. I will then speak to the need to augment 
this request with a special multiyear discrete project budget 
which we believe is necessary to address the extraordinary 
issues raised in this election cycle.
    Our fiscal year 1998 budget request is for $29.3 million 
and 313.5 full-time equivalents. In agreeing to that figure, we 
took into account the 1995 rescission, the two successive years 
of cutbacks imposed by OMB and the Congress; we also considered 
the request for a balanced budget by both the President and the 
Congress. We do, however, believe that this $29.3 million 
figure is a floor level below which we cannot responsibly go 
and maintain our current level of activity.
    I would point out that this budget was formulated before we 
became aware of the controversies that arose in the 1996 
elections and are still apparently arising. This floor level of 
funding, we believe, will cover projected increases in staff 
salaries, rent, and other overhead expenses, and an increase of 
six staff positions, which we believe are necessary to sustain 
our performance.
    In our core disclosure programs, our performance is 
exceeding our projections. We expect to meet the statutory 
deadlines on indexing and making available to the public nearly 
85,000 reports. Updated figures show that to date we have 
captured 1.9 million transactions within 30 days of receipt, 47 
percent faster than our last cycle. And I have a chart on page 
15 in our testimony that does show the transactions.
    I would also like to submit for the record a page from the 
March 1997 internal newsletter that the Commission puts out, 
The Slate, and we have copies for the record, if you do not 
have them yet. But this is a description of what Data Systems 
goes through to make sure that all of the information is 
correctly placed on the public record within the allotted time 
frame.
    We have improved our technology by employing digital 
imaging rather than microfilm. We have on-line computer access 
to our database now available over the Internet, and our Web 
site, www.fec.gov, began February 14 last year and, as of our 
first anniversary date, has been accessed over 2 million times.
    We are moving forward on our computer systems development, 
though not as rapidly as in the original 5-year plan. Under 
Public Law 104-79, the voluntary electronic filing program is 
operational.
    The audit field work of the Presidential public financing 
programs is on track. About $235 million was dispersed to the 2 
nominating conventions, the 11 primary candidates, and the 3 
general election candidates. Our auditors are confident they 
will meet the 2-year filing deadline for releasing final audit 
reports for these candidates.
    Disclosure reports for all other candidates and committees 
are given desk audits by our analysts. These desk audits 
provide for voluntary compliance to those committees that 
respond to the analyst's questions in a timely fashion.
    There are over 8,000 reporting committees now. Large 
committees, in the category of Senate committees at $500,000 
and other committees over $250,000, have more than doubled 
since 1982, from 568 to 1,319 to date. Because of this 
increase, we have been forced to raise the tolerance thresholds 
in our review procedures.
    Our enforcement and litigation staff continue to be 
strained, despite the implementation of a similar threshold 
process, the enforcement priority system. At the end of last 
month, we had 365 matters in our docket. Because of reductions 
in our general counsel's enforcement staff, we currently have 
only 104 cases activated, whereas in 1995 we had over 160. This 
lower level of funding will add only 2.7 FTE to the General 
Counsel's Office, but at a time when the case load is growing 
and many of the investigations currently underway are too 
important to dismiss yet too complex for one or two staff to 
handle.
    For example, in calendar year 1996 there were 312complaints 
on the docket, 240 related in part or entirely to 1996 election cycle 
activity. However, we are still requesting this floor budget for your 
consideration and urge that, given our current normal work load, this 
not be reduced.
    Now let me address the proposal we are requesting for 
funding for the extraordinary problems that arose in the 1996 
elections. For this discrete project, we are requesting a 1997 
supplemental of $1.7 million and 7.8 full time equivalents, and 
a fiscal year 1998 amendment of $4.9 million and 47 full-time 
equivalents.
    As has been reported in the media, the cases that arose 
during the 1996 elections present serious potential violations, 
complex factual matters, and contentious legal and 
constitutional issues that involve millions of dollars and 
thousands of financial transactions requiring detailed review.
    The alleged abuses involved fundraising from nonresident 
foreign nationals, as well as foreign governments, the use of 
soft money possibly circumventing the current spending limits 
on behalf of a publicly funded Presidential candidate, 
coordination in assertedly independent expenditures, and 
massive, but undisclosed, expenditures on issue advertisements 
by labor and business interests that may have had an 
electioneering message. Investigations of just these potential 
abuses will take staff and resources well above our floor level 
budget request.
    The figures we are proposing in the supplemental request 
and the amendment are based on a projected worst case scenario, 
and the table on page 13 in the testimony details by object 
class the expenditures that are involved.
    As everyone has read about the potential abuses, we have 
also all been made aware of the discussions and disagreements 
concerning jurisdiction. The Commission recognizes that there 
is substantial jurisdictional overlap by the various entities 
which are proposing or have already initiated investigations.
    The Justice Department has clear jurisdiction over the 
potential criminal violations, and we already have an ongoing 
relationship with the Department in a long-standing memo of 
understanding concerning a unified and coordinated approach to 
criminal matters that involve election law violations. So the 
stage has been set for cooperation, and we have already met 
with Justice to brief them on the Federal Election Campaign 
Act.
    But, Mr. Chairman and members of the committee, the 
Commission was created 22 years ago to be the single 
independent agency to administer and enforce the campaign laws. 
We are the only entity with civil jurisdiction to enforce the 
FECA. We admit to having administrative problems in the past 
with timely enforcement. However, we feel our effectiveness has 
been seriously hampered over the past several years by 
inadequate resources. We are asking now for sufficient funds to 
investigate these potential violations to determine just how 
extensive they are.
    We firmly believe that with adequate funding provided 
relatively quickly, we can begin to hire additional staff of 
both auditors and attorneys and we can then prove to the 
Congress and the public that we are able to do the job for 
which we were created.
    I would stress to this committee that this is not intended 
to be a permanent increase in our budget or staffing levels. It 
will, rather, be applied to a discrete unit that will instead 
be able to move the investigations on a fast track.
    The General Counsel has already planned a structure that 
will allow us to discover the extent of the violations, if any, 
in the shortest possible time and to reach settlement on the 
issues involved. We realize the seriousness of the allegations 
and want to address them as expeditiously as possible. However, 
we are reluctant to begin major investigations of these issues 
if we are not going to have the resources to complete them in a 
timely matter, as should be expected.
    I would ask your indulgence for one more minute in order to 
say a word in praise of the Commission's dedicated and loyal 
staff. They are totally committed to administering and 
enforcing the FECA in a fair and impartial manner to ensure 
that accurate and complete information is available to the 
public. Budget cuts every year, the need to cut or not hire 
personnel, and the ever-increasing amount of data being 
reported can be really devastating to morale. However, our 
staff is constantly looking for ways to increase productivity 
to get the job done. I just want to be sure that the staff gets 
credit where credit is due.
    In conclusion, our original budget request will, we 
believe, allow us to perform our responsibilities at our 
current level. The amendment will give us the necessary 
resources to undertake only those major issues that arose in 
1996. Those resources that are not required will be lapsed or 
reprogrammed.
    We thank you, Mr. Chairman. We appreciate the forbearance 
of the committee in listening to a necessarily complex 
authorization request. This concludes our prepared testimony, 
but we would be happy to answer any of the questions you may 
have at this time.
    [Prepared statement of Joan D. Aikens follows:]

[Pages 9 - 26--The official Committee record contains additional material here.]


                        budget submission level

    Mr. Kolbe. Thank you very much, Madam Vice Chairman.
    Let me begin, if I might, with just a couple of questions 
on the budget submission. Now, we have in front of us 
documents, all kinds of documents here. We have the original 
request, the concurrent request that was submitted through OMB, 
we have the revised request.
    First of all, can you just for the record tell me which 
budget you want us to be considering here today, the original 
request or the revised request? Can we dismiss, set aside, the 
original request and look at the revised budget request?
    Ms. Aikens. Well, the amendment to the original request is 
just for the funds, the resources to look into the potential 
1996 election violations. So we are asking for your 
consideration of our original request of $29.3 million, plus an 
amendment that asks for $4.9 million.
    [Clerk's note.--The witness later clarified this to read: 
``The amended budget request dated February 13, 1997, is what 
we are seeking; it includes the resources to look into the 1996 
potential election violations. We are asking for your 
consideration of $29.3 million, which is our original request 
plus an added $4.9 million for potential 1996 violations.'']
    Mr. Kolbe. Based on the testimony you just gave, you said 
that--so, just to clarify that, what we are really looking at 
is the original request plus the supplemental--not the 
supplemental, plus the amendment.
    Ms. Aikens. That is right.
    [Clerk's note.--The witness later clarified this to read: 
``No. The amended budget request for 1998 represents our 
original request for $29.3 million plus $4.9 million for 
potential 1996 violations.'']
    Mr. Kolbe. So that is now your base budget request; the two 
of them placed together is your budget request.
    Ms. Aikens. Yes.
    Mr. Kolbe. You just said this was not a permanent increase, 
that you have these on a fast track for asettlement and 
resolution. Does that mean we can expect to see a reduction in the 
request for next year?
    Ms. Aikens. Probably not next year. It is probably a 2-
year.
    Mr. Kolbe. Why do you say 2-year?
    Ms. Aikens. Well, some of these matters are----
    Mr. Kolbe. Is that because of the length of time it takes 
to resolve the case?
    Ms. Aikens. It involves a lot of investigation, 
depositions; there may be delays in the enforcement process 
through subpoena requests; and I am not sure that we could 
finish them in fiscal year 1998.
    Mr. Kolbe. On your budgets----
    Ms. Aikens. We would try, however.
    Mr. Kolbe. Well, I appreciate that. I think that is 
realistic. I don't think we should assume that you would finish 
them if we give them to you in a 1-year time frame. I just 
wanted to be clear, because you did say this was not a 
permanent increase and you would not be asking us for this in 
the future, so I wanted to be clear we are looking at least 2 
years of this additional funding, if not longer.
    You consistently give us budget requests that compare the 
actual budget to what was requested, not what was provided. In 
other words, your request for this year is a comparison to what 
you requested last year, not what the Congress gave you.
    And I don't know of any other agency that does it that way, 
where they, instead of saying here is our budget request, this 
is what we had last year, this is our budget request for this 
year, you are comparing it to something that was a dream in the 
sense of, this was our ideal of what we wanted. You compare it 
to that rather than compare it to the actual.
    Could we just get you to give us a budget request that 
compared, like every other agency, your budget request with 
what you actually had appropriated last year?
    Ms. Aikens. I think that is what we did.
    [Clerk's note.--The witness later clarified this to read: 
``Our request is based on actual numbers.'']
    Mr. Kolbe. I don't think so. I think it is done on the 
basis of what you had. You go back to compare it to your 
request for last year. I think we can show you that, because 
you refer to the request of last year.
    Ms. Aikens. Mr. Kolbe, because----
    Mr. Kolbe. Yes. Your comment in your opening statement is a 
request--was determined, in other words, by the Rescission Act 
of fiscal year 1995 and 2 successive years in which our 
requests were rolled back by the Office of Management and 
Budget. That is not what we are looking at. We are not--we are 
looking at what you actually ended up getting and comparing it 
now to what you are asking for this time.
    Ms. Aikens. That is more of an explanation of why we are 
asking for the resources, because we have not in the past been 
able to hire up to the full level of every--of the resources 
that we had requested. We have submitted three different 
levels. Because the Congress has been asking us, why do you 
submit all these levels of budget? The Congress often asks, if 
you receive this amount of money, what can you do with it?
    So we have been trying to make those comparisons. If we 
receive the standard level, this is what we could accomplish. 
Those have been the questions that have come in the past, and 
we would be happy to change our budget submission not to have 
to do that.

                        budget submission level

    Mr. Kolbe. Well, I would just ask that you work with the 
staff in this coming year to make sure that we have a--since it 
is a concurrent budget submission, that we have a budget 
request that gives us the documentation that we need in an 
immediately useful fashion. I think maybe these are differences 
that can be worked out if you work with the staff during this 
coming year.
    Ms. Aikens. I think our fiscal year 1998 budget was 
compared to the actual budget appropriation we received in 
1997.
    Mr. Kolbe. Well, maybe I was putting too much reliance on 
the statement you made in your opening statement, but I would 
still ask if you would please just work with our staff to get 
the documentation in a form, because it seems like it comes to 
us in a very confusing manner with the supplemental request, 
the amendment and so forth, and I think we can work out some of 
this thing.
    Ms. Aikens. We understand this year, because of the 
supplemental request, it was confusing. It was very confusing 
to me, too.
    [Clerk's note.--The witness later added: ``We will work 
with your staff.'']

                           fy 1995 rescission

    Mr. Kolbe. I would also just note I really think three 
budget cycles later is a little long to be complaining about a 
rescission in 1995. A lot of other agencies have dealt with 
rescission, and life goes on, and we have moved on from there. 
And I think to keep going back and complaining about a 
rescission in 1995 seems a little far back to me.
    Ms. Aikens. We will remove the word from our vocabulary.
    Mr. McGarry. Mr. Kolbe, I wonder if a brief explanation--
$29.3 million is the floor, and incidentally that is pretty 
much in line with what it was last year. Below that, we just 
cannot function and do the things we are virtually mandated, 
and required to do under the law. The added $1.7 million in the 
supplement and the $4.9 million with the increases of the FTE, 
is a very discrete package which deals with the problems that 
arose out of the 1996 election.
    The issues--the categories we can't discuss with you 
because of the confidentiality clause and the names and people 
involved: But the issues are very clear, and they are in the 
media day in and day out. Issue advocacy, expressed advocacy, 
coordination, independent expenditures, soft money. Soft money 
increased in this election 171 percent over the last 
presidential election, and that is the--these are the all 
discrete matters that this added money is being sought for. If 
we don't get that, we can't deal with these matters that are 
very active in our lives.

                       earmark of amended request

    Mr. Kolbe. Mr. Chairman, would you have any objection, 
since you say this amendment is for the 1996 budget cycle, if 
it was mentioned or stated that it is to be used solely for 
that purpose?
    Mr. McGarry. Yes. [Clerk's note.-- The witness later 
changed this to ``no''.] I think it is very clear that added 
money of $1.7 million for the supplement, is a supplement to 
the current fiscal year. These things are active right now, and 
these arise out of the 1996 election.
    As I indicated in the brief comment I made, we had 214 
external complaints filed from May 1 to November 30th. We have 
exclusive civil jurisdiction, and 95 percent of these matters 
are under the civil law. Even the criminal law, where the 
Justice Department and other agencies, Justice in particular, 
will be prosecuting criminally, they will be sending the case 
back for the civil disposition, because we are the only agency 
that has the jurisdiction civilly.
    So we will be virtually--I believe most people would agree 
that just about all of what you are reading about in the paper 
in dealing with these issues are FECA-related and under our 
exclusive jurisdiction, but it is a very discrete package, the 
add-on money. If we don't get that money, we cannot deal with 
these cases.
    Mr. Kolbe. Okay. I would like to try--I have gone past 5 
minutes. I would like to stick to the time as closely as 
possible, because we are going to have two votes here shortly. 
Mr. Hoyer.

                          floor funding level

    Mr. Hoyer. Thank you very much, Mr. Chairman.
    When you say the floor budget, if we go below the floor, 
which is the 29.3, what will you not do?
    Ms. Aikens. Well, we probably will not get to as many of 
the enforcement matters arising out of the 1996 elections as we 
would like to.
    Mr. Hoyer. Can you quantify that? For instance, in million-
dollar or half-million-dollar increments, how many cases are 
you unable to handle at that point in time?
    Ms. Aikens. That is very difficult to say specifically how 
many cases we could handle, because we don't know how 
complicated they are, we don't know how extensive the 
investigation would have to be, and there are other areas of 
the Commission where we would suffer as well as the General 
Counsel's Office.
    The Reports Analysis Division, if we are cut back, may get 
behind in some of their reviews, and desk audits. We would hope 
that the modernization would not suffer any more than it has. 
But I don't think we could say specifically exactly where we 
would cut until we had an idea how much we had to cut.
    Mr. Thomas. If I could add, Mr. Hoyer, any time we face a 
cut from what we have requested, we do have to try to decide 
which part of our operations will suffer.
    I just would note with regard to the enforcement program, 
we are already at a point where we have reduced the capability 
to handle and have active cases on the docket to the point 
where only about 30 percent of our pending cases can be 
activated. It used to be well above half of our pending docket 
we could maintain in terms of active cases. So we are 
experiencing already a fairly dramatic reduction in the 
enforcement capability as a result of our having reduced just 
the enforcement resources.
    But I would say we are strained in other divisions. Our 
Reports Analysis Division right now is struggling to keep up 
with the review of the reports. We have a backlog of 24,000 
unreviewed reports. Our people are working as quickly as can be 
expected, but we are falling behind.
    So if you reduce us below the $29.3 million, you are going 
to see more backlogs. You are going to see even fewer of our 
enforcement cases put on the backlog docket, [Clerk's note.--
The witness later changed this to read ``active docket''.] and 
that means more are dismissed without any Commission action. So 
we would urge you to take that into account and recognize that 
we have to have at least a $29.3 million to have even minimally 
credible enforcement and disclosure programs.
    Thank you.
    Mr. Hoyer. Thank you.
    Now, as I understand it, $34.2 million is the figure that 
you determine is necessary to do the job that you think 
confronts you, is that correct?
    Ms. Aikens. Yes.
    Mr. Hoyer. That is a $5 million or $4.8 million difference.

                           amendment request

    Ms. Aikens. That $4.9 million is for the discrete units, 
for the problems in the 1996 elections.
    Mr. McGarry. If I might just--on those issues, the 1996 
election problems, alleged violations which seem very real, the 
blockbuster issue of all is foreign nationals and money in the 
name of another is in those categories, in that discrete 
package. That if we don't get the money, we really can't get 
into them. Many of those are active right now.
    Mr. Hoyer. And under the statute, you perceive that to be 
your responsibility.
    Mr. McGarry. Absolutely. We have exclusive jurisdiction 
civilly. And even if there is a criminal prosecution, it has to 
be referred to the Federal Election Commission for the 
disposition, which is done routinely by the Justice Department. 
They have sent ones, they will do a criminal investigation, 
find the evidence, get indictments and a conviction; and then 
they will send it along for the civil disposition.
    We will be dealing with all of them, and those criminals 
are a very small part of it, ninety-five percent or more you 
are talking about.
    And the soft money, people say, well, soft money is beyond 
the Federal Election Campaign Act. Not necessarily. If 
solicitation of the soft money is done by a Federal candidate 
on behalf of a Federal race, then that is a violation of our 
law. You cannot solicit money that will not be--unless it is 
for the Federal election, and the soft money would be a 
violation of that.
    That is what is happening in many cases, we all know. The 
money is solicited by Federal candidates; but the people are 
asked to make the check out, for example, to a State party 
committee; and it goes into a nonFederal account. And the 
belief is that it is massively beneficial to the Federal 
candidates that are soliciting this money.
    These are the allegations, and they are very real.
    Mr. Hoyer. Given those allegations, you say you have 
exclusive jurisdiction.
    Mr. McGarry. Yes, civilly.
    Mr. Hoyer. Exclusive civil jurisdiction, but not the 
criminal.
    Mr. McGarry. If it gets to the point of criminality, we 
refer it to the Justice Department.
    Mr. Hoyer. We have a vote on, so let me yield to the 
Chairman.
    Mr. Kolbe. Thank you. Mr. Chairman.
    Mr. Livingston. I thank my friend from Maryland, and I will 
be very brief.
    I dare say, if soft money has gone up by 171 percent, if 
the FEC stationed a person in the Lincoln Bedroom, it mighttake 
care of that.
    Mr. Hoyer. I want to reclaim my time.

                              ogc staffing

    Mr. Livingston. I hear your plea for more resources and 
certainly you make a case in this last series of questions from 
Mr. Hoyer, but Congress provided the FEC enough funds to 
support 93 FTEs in the Office of General Counsel some time ago 
and yet, to date, they have only--according to my figures, they 
have only 86 FTEs. So you haven't utilized the capacity that we 
granted you, if that is correct.
    Let me just run through these items, and then I will ask 
you to respond for the record, because it looks like we are 
running short of time.

                                workload

    Secondly, the 1995 rescission that we hear about 
periodically is--had an impact, as Chairman Kolbe pointed out, 
had an impact on a lot of agencies and departments, but they 
have gotten over it. But yet, since then, the FEC has processed 
94 percent of all the documents and transactions submitted 
during the 1996 election cycle, as compared to only 87 percent 
during the 1994 election cycle, and also the Office of General 
Counsel actually has gone up by 13 percent. So, again, it is 
hard to really appreciate that there has been so much 
devastation by these cuts.
    Thirdly, I am not sure that the backlog is entirely due to 
a lack of resources but rather the lack of utility of existing 
resources and the failure to modernize. I am recalled that the 
Bush administration investigation by the Federal Election 
Commission took 8 years, yet the Bush administration only took 
4 years. And that leads me to the conclusion that General 
Motors is audited in 6 months. Why is it that presidential 
campaigns take so much time?
    Now, I will answer my own question, to some degree, on 
that. Because they encompass 50 separate States and 50 separate 
rules. And I would cosponsor immediately a statute or a bill to 
provide uniformity throughout the country so that you can 
eliminate a lot of the money or attorneys and accountants which 
complicate the process, and I grant that that is probably one 
of the principal reasons for your difficulty.
    But, finally, I would make the point that last year was a 
presidential and a congressional election year. Filings were up 
astronomically, as your chart showed, Ms. Aikens. This year, it 
is not; and filings are down precipitously from last year.
    So it would seem that if you managed to increase your 
handle of last year's caseload that you be all the more 
prepared to handle within existing resources this year, since 
there are fewer filings.
    It is a lot of subjects to cover, but I will throw it to 
you.
    Ms. Aikens. Well, Mr. Chairman, on your last point, there 
is quite a difference between the divisions in the Commission.
    When you are talking about the chart showing the increased 
transactions that are entered, those are our Disclosure 
Divisions and our Data Systems Division. They are almost up to 
speed, and they have been helped considerably by the 
computerization modernization. They have been helped by the 
digital imaging. And all of our disclosure divisions are 
basically--have increased productivity over the years, in spite 
of the fact that some of them have been cut by staff.
    It is in the enforcement area in the General Counsel's 
Office that we are having the most difficulty keeping things 
timely.
    You talked about the Bush audit. The Bush audit itself was 
finished within 3 years of the election, but some of the 
matters in the audit were referred to the Office of General 
Counsel, and that is what has been taking so long.
    So it is--our enforcement, our disclosure divisions are on 
target for the internal deadlines that we have set, and they 
have stayed basically up to speed, in spite of the decreases in 
the resources. And we are trying, through the enforcement 
priority system and other improvements in the operation of the 
General Counsel's Office, to increase their productivity there.
    One of the items in the supplemental and in the $4.9 
million amendment will be for a case management system which we 
have this year implemented in the Office of General Counsel in 
litigation for one case. We have contracted with the Department 
of Justice for a management system, including services, 
hardware and software, to manage one massive case; and it is 
mainly document handling. But we are hoping to get experience 
from that. And if we get the supplemental, we will begin a case 
management system for just this discrete unit, the $5 million, 
$4.9 million personnel and resources that we are going to use 
to undertake the investigation into these allegations.

                     cash awards/tuition assistance

    Mr. Livingston. Okay. I would raise a few other issues; and 
the last issue I would raise, I don't know how much money is 
involved, but in terms of cash awards, tuition assistance and 
press office, those are expenditures that we might trim down 
on.
    Ms. Aikens. Well, I could tell you that this year, fiscal 
year 1997 through January, we have spent $617 on tuition, 
training expenses.
    Mr. Kolbe. My other questions, would you submit those for 
the record?
    Mr. Livingston. I would.
    Mr. Livingston [presiding]. We have a vote, two votes. We 
would ask your indulgence because we have more questions. I 
have questions when we return from the votes.
    [Recess.]
    Mr. Kolbe [presiding]. The subcommittee will resume its 
deliberations here.
    Mr. Livingston had finished asking some questions, and I 
have a few others that I would like to ask. We will submit some 
for the record.

                         enforcement statistics

    Mr. Kolbe. Let me--I want to ask a few questions about the 
Office of General Counsel and the number of enforcement cases 
that we have.
    Your year end--1996 end of year management reports shows 
you closed out 249 cases during the fiscal year. Relate that 
number to me against the total number of enforcement cases that 
were under review during the year. Or can you do that?
    Ms. Aikens. Well, we have on the docket about 361 
currently. In a year, in this past year, we picked up 312 and 
closed 100--we had, as of January 1st, 1996, we had 251 cases 
pending. During 1996, we opened 314 and closed 204, so as of 
12/31/96, we had 361 pending. 104 of those are active.
    Mr. Kolbe. Okay. 104 active right now.
    Ms. Aikens. Currently, yes, today.
    Mr. Kolbe. Because your report says 112 as of December 
31st. So you have closed a few.
    Ms. Aikens. Yes, we have closed a few since that time.
    Mr. Kolbe. Eight in 2 months. Is that normal?
    Ms. Aikens. Well, we have closed a few more than that.
    Mr. Kolbe. Well, you had 112 on December 31st; and you have 
104 now, active.
    Ms. Aikens. Yes.
    Mr. Kolbe. The testimony you submitted for your 1997 
supplemental says you activated 160 in 1995, and that reduced 
resources has kept the number of activated cases down. But, to 
understand that, we need to know, as a percent of total 
enforcement cases, how many cases were activated. Of all the 
cases referred in 1995, did you activate a third, 25 percent, 
50 percent? And how does that compare to what you did before 
that?
    Because it really isn't the number of cases that are 
submitted that makes a difference. It is the number of 
occasions you are able to activate and close that makes the 
difference.
    Ms. Aikens. Correct. Go ahead.
    Mr. Thomas. If I could, Mr. Chairman, it is touching on the 
response I was giving to Mr. Hoyer.
    We can certainly give you the precise numbers; but since 
fiscal 1995, when we had more resources available for our 
Office of General Counsel, the percentage of cases that we have 
been able to put on our active docket has decreased 
significantly.
    As I mentioned, at one point in the 1995 era, we were able 
to have more than half of our docket in the active stage. Now, 
because we have reduced staffing in the Counsel's office, to be 
blunt, it has caused us to reduce the percentage down to about 
30 percent active.
    But we can give you the precise figures. There has been a 
difference from the 1995 era to where we are now.
    Ms. Aikens. It is really difficult, Mr. Kolbe, to just look 
at the figures. Because a lot of it depends on the complexity 
of the matters that we are looking at, the number of 
respondents in the complaint and the length of time it takes to 
do the investigation, the complexity of the real issues 
involved, so that the mere numbers of cases activated and cases 
closed don't tell the whole story. So some matters can be 
closed very quickly because there are no complex legal issues 
in them, and that brings the record--puts the record in better 
perspective, but then some cases are very difficult to bring to 
a conclusion.
    Mr. Kolbe. You actually showed a reduction from 1995 to 
1996 in the General Counsel's Office from 104 to 95, yet the 
rescission didn't tell you where to take the money from, which 
office.
    Ms. Aikens. We didn't take it all from the General 
Counsel's Office.
    Mr. Kolbe. Well, apparently, you took a good chunk of it 
out of there.
    Ms. Aikens. Part of that was because there was a freeze on 
hiring, and some of those people left, and we weren't able to 
replace them.
    Mr. Kolbe. Is that true today?
    Ms. Aikens. We have 90 on staff today.
    Mr. Kolbe. Ninety.
    Ms. Aikens. In the Counsel's office.

                         enforcement statistics

    Mr. Kolbe. And in your budget you have resources for 93.
    Ms. Aikens. Yes.
    Mr. Kolbe. Is that part of the general attrition rate, 
vacancies and it takes time to replace people?
    Ms. Aikens. It takes time to replace people.
    Mr. Kolbe. So with the resources for 93, you are not going 
to have more than 90. Is that what you are saying?
    Ms. Aikens. No.
    Mr. Kolbe. In other words, it is not reasonable to expect 
you will ever have more than 90.
    Ms. Aikens. No, by the end of fiscal year 1997 we will 
probably be over 93, because we have been without several 
months now, so we can add extra staff.
    Mr. Kolbe. So you can add extra--that was going to be my 
next question. If you can't--for attrition purposes you can't 
get up to 93, why not take the money you have there and put 
some of that in the--what you are asking for the supplemental 
and put that into the modernization? Can you tell me--and then 
I want to go to Mr. Aderholt--what are your estimates for the 
total number of activated cases you are going to have in this 
year, fiscal 1997? Do you have a number for the actual cases 
you will be able to have?
    Mr. Thomas. I am not sure we have a specific estimate. As 
we noted, we are right now at only 104 active out of the 360 or 
so.
    Mr. Kolbe. Well that is 104. That is a snapshot of today. 
That doesn't mean that over the course of a year you are going 
to have activated only 104 cases.
    Mr. Thomas. Oh, yes. In terms of the number of cases we can 
bring into active status, we can give you a precise number.
    Mr. Kolbe. Well, you can't give a precise number, because I 
am asking for an estimate.
    Mr. Thomas. Right. But we can show you what happened last 
fiscal year and what happened so far this year and give you an 
estimate.
    Mr. Kolbe. Well, how many more cases do you believe you 
would be able to activate if you had the supplemental? That is 
what I am driving at.
    Mr. Thomas. Right. We can estimate that for you.
    As you know, with this supplemental, what we are trying to 
concentrate on is some of the big, complicated cases. It may be 
slightly difficult to estimate, because some of the cases we 
are asking for in the supplemental are going to be so big and 
complex they may not equate with the smaller cases.
    Mr. Kolbe. And we understand that. Without the 
supplemental, those big cases do not get activated at all. You 
will continue to activate the small ones and leave the big ones 
in an unactivated status.
    Mr. Thomas. The chances are we would. If we don't get the 
supplemental, we would do the best we could to activate some of 
those big cases, to prioritize, do exactly what Chairman 
Livingston was asking us to do. But the reality is some of 
those are big, complicated cases; and we might have to drop 
cases that particular Members of Congress might find to be 
significant.
    We still have lots of cases that deal with such issues as 
laundering contributions from sources, and failure to disclose 
huge amounts of funding. We were dealing with some cases the 
other day which totaled up to millions of dollars of 
undisclosed debt. So there are lots of cases like that that 
seem relatively small, but they are still important, and we 
would hate to see them dropped.
    Mr. Kolbe. Well, if big case translates to important case, 
your priorities would say some of the smaller cases aren't 
going to get heard, but we are going to put our resources on 
the big cases.
    Ms. Aikens. The cases from the 1996 elections, there are 
already complaints filed on about 30 cases. The rest of the 
cases that are on the docket are what the base level budget 
resources are going to be put to. Those 30 cases are what the 
discrete unit resources are going to be put to with the 
supplemental.
    Mr. Kolbe. Have any of those 30 cases been activated so 
far, of the 1996?
    Ms. Aikens. Yes, some of them have.
    Mr. Kolbe. Some. Can you tell me how many pending from 1996 
have been placed in the active status?
    Ms. Aikens. About 10, I think.
    Mr. Kolbe. If you might provide for the record, rather than 
say about, provide what the number would be.
    Ms. Aikens. Sure.
    [Clerk's note.--The witness later clarified this to read: 
``As of today, March 13, there are 16 active `task force' 
cases.'']

                           litigation status

    Mr. Aderholt. Good afternoon, Ms. Aikens and Mr. McGarry 
and Mr. Thomas.
    I am familiar with your request for funding and 
understanding you are not only seeking substantial increase for 
fiscal year 1998 but also an additional amount as a supplement 
for fiscal year 1997. Of course, this is a large increase in 
funding; and you certainly have laid out your case for why this 
increase is necessary. Of course, this subcommittee does have 
oversight responsibility for that FEC; and before we 
appropriate an increase in funds I think we should examine how 
the funds appropriated in the past were utilized.
    On July the 30th of this past year, of course, which was an 
election year, the FEC filed a lawsuit in the U.S. District 
Court in the District of Columbia against the Christian 
Coalition. The charges were that the Christian Coalition 
engaged in expressed advocacy through their voter guides.
    At the same time, the FEC did not target other groups that 
tended to support Democrat candidates and which have had 
similar voter guides and engaged in identical activities. If 
anything, there were some other groups that could be argued 
went further than the Christian Coalition.
    I think the effect of singling out one group that happened 
to be socially conservative in a sea of more socially liberal 
groups engaged in the same activity had a very chilling effect. 
Of course, I not suggesting that that was the FEC's intent, 
although conclusions by some people could be drawn in that 
circumstance.
    I understand there were pastors of churches who were 
threatened with lawsuits as a result of the FEC lawsuit. The 
actions of the FEC had the appearance of using taxpayers' funds 
to influence the outcome of an election; and, if anything, that 
undermines my faith in the Nation's political process.
    Could you talk about that and what the current status 
involving the Christian Coalition is at this time?
    Ms. Aikens. Yes, Mr. Aderholt. The Christian Coalition case 
was originally brought in 1992; it is a 1992 complaint. So it 
has been 4 years to bring it to litigation.
    The other groups you are talking about, to the best of my 
knowledge, were 1994 and 1996 activity, and we are hopeful--we 
are asking for this supplemental and the amendment so that, 
hopefully, it will not take us 4 years to bring some of these 
cases to fruition. We are currently in court with the Christian 
Coalition. The case has not been resolved yet.
    Mr. Thomas. Mr. Aderholt, also I would just hope that you 
would go away with this feeling that we are balanced in our 
approach. Over the years, we have brought lawsuits against 
organizations that, I guess you could say, are on the other 
side of the political spectrum. We were in litigation with an 
organization called the Survival Education Fund on this precise 
issue. We were in a lawsuit with the National Organization for 
Women over this precise issue, we were in a lawsuit with the 
American--AFSCME union over this issue years ago.
    So if you look at the issue, we hope you will go back and 
look at the history of the Commission. We have, on this precise 
legal issue, express advocacy, pressed other groups in courts 
as well.

                         express advocacy issue

    Mr. Aderholt. Are there any current cases that are in the 
pipeline right now that involve this whole issue of expressed 
advocacy?
    Ms. Aikens. Many. And it is very difficult. It is a very 
difficult issue for the Commission to clearly define. Express 
advocacy has taken us to court many times.
    Mr. McGarry. The main thing, Mr. Aderholt, is that issue 
advocacy, there has been a lot of talk in the media from time 
to time that the Federal Election Commission is blocking 
something and they are involved in issue advocacy, blocking 
literature, dealing with nothing but issues going into 
churches, so on and so forth. The courts and the Federal 
Election Commission unanimously and solidly uphold and defend 
pure issue advocacy. That is protected under the First 
Amendment to the Constitution. And the problems arise out of 
that issue where they are either disguised as issue advocacy 
and it is really candidate advocacy, and the complaints are 
filed and the charges are that they are not pure issue 
advocacy, which is totally and completely protected under the 
First Amendment as a free flow of issues and ideas and that is 
what issue advocacy is about, by and between candidates and 
campaigns and the public.
    But the problem is that the allegations are made and the 
complaints are filed that although it appears to be issue 
advocacy, it is really candidate advocacy; and the Supreme 
Court has found that we have a mix. There is a landmark case, 
the Massachusetts Citizens for Life case was decided in 1985 
[Clerk's note.--Witness later changed this to read ``1986.''] 
that--it had both issue advocacy and expressed advocacy, 
candidate advocacy, and the Court found there was a belief that 
if it had issue advocacy that negated any finding of expressed 
advocacy, and the Supreme Court says, no, issue advocacy has a 
lesser protection as an encroachment on fundamental First 
Amendment rights.
    But the Court said, because of a compelling government 
purpose to not only eliminate corruption but the appearance of 
corruption, that that will be given lesser protection under the 
Constitution. But the point is, there was a lot of press that 
the Federal Election Commission was obstructing people engaged 
in nothing but issue advocacy, and I think they were losing 
sight of what the real issues in that case were. Issue advocacy 
is absolutely--we unanimously, we solidly uphold and defend 
people's rights to engage in that activity without any 
restriction. Take soft money, they are beyond our law, outside 
the Federal Election if it is pure issue advocacy, but there is 
a lot of confusion from time to time in the mind of the 
American public with reference to that issue.
    Mr. Aderholt. Mr. Chairman, that is all I have right now.
    Mr. Kolbe. Mr. Hoyer.
    Mr. Hoyer. I am sorry I was late getting back. Obviously 
you have been speaking to this independent expenditure issue, 
which in my opinion is one of the biggest issues that confronts 
us as we deal with trying to get a handle on money and politics 
and the influence that money makes in politics. Because the 
independent expenditures now, occur on both sides, this is not 
a partisan issue in the sense that both sides suffer from or 
are advantaged by very substantial amounts of so-called 
``independent expenditures.''
    My question, there are a number of cases in which you have 
been involved in this, and litigated. The Supreme Court has 
held not favorably to you in many instances, and then the 
Commission has either decided not to go further on the case--if 
you lost the district court, you decided not to appeal for 
whatever reason.
    What is--and you may have answered this and if you did, 
just tell me and don't repeat it and I will just look at the 
record. In terms of the six commissioners, what are your 
discussions with reference to what you think is necessary if we 
are going to get a handle on and give you the ability to look 
at independent expenditures? From your experience--and you may 
not be able to do this because you may feel this is not in your 
role--what additional authorities need to try to get a handle 
on independent expenditures?

                         express advocacy issue

    Ms. Aikens. Well, Mr. Hoyer, the independent expenditures 
are clearly--if they are truly independent, uncoordinated with 
a candidate, in cooperation with a candidate or an agent of the 
candidate's committee, they are truly independent, the Supreme 
Court has said they can, they should be reportable, but they 
are not--they do not have any limits. The money can be spent 
without limits. If it is expresse advocacy.
    Mr. Thomas. If it is not express advocacy. [Clerk's note.--
Witness later added: ``by a prohibited source.'']
    Mr. Hoyer. If it is not expressed advocacy of a candidacy 
of a Federal official?
    Ms. Aikens. Yes. And it is reportable if it is express 
advocacy. So the Commission has for the most part just been 
investigating whether the matter was coordinated with a 
candidate.
    Mr. Hoyer. And what has been your finding?
    Mr. Thomas. Well, we have, I guess you could say, mixed 
results. These allegations that some of these so-called issue 
ads were in fact coordinated with a candidate are very tough to 
prove out. You have to depose all the people in the production 
of the ad and find out if they coordinated with any of the 
candidates' agents, and a lot of the time people have trouble 
remembering. It is hard to prove these. But there have been 
some cases where we have proven what we think is coordination.
    The question of whether there is any consensus among the 
commissioners about something that Congress might do through 
legislation, to be honest, the legislative recommendations 
where we can reach a four vote consensus don't have anything in 
there on that other than we think Congress ought to try to 
address the issue in a general way.
    But obviously one thing that might be helpful is if 
Congress wanted to try to delineate where coordination should 
be found to exist. We have some regulations we think are 
helpful, but Congress might be able to clarify even further the 
situation where under the law it should be deemed to be 
coordinated.
    Apart from that, you might, if it is an issue ad, something 
that doesn't contain express advocacy or defeat of a candidate, 
I think given the current court rulings, you will have a very 
difficult time bringing it in under campaign finance laws.
    It is conceivable that under the communication laws you 
might have a little bit more authority. The limited airwaves 
concept, you might be able to require broadcasting stations, 
even if it is an issue ad only, to provide some disclosure or 
provide some equal opportunity, something like that. You might 
have some flexibility there. But we, as a commission, have not 
specifically put forward any particular proposal about trying 
to get further disclosure about issue ads in that sense.
    Mr. McGarry. I think it is probably more vivified what this 
unsettled state of the law currently is with reference to 
express advocacy. What is express advocacy? The First Circuit 
Court of Appeals in effect has come down that if it doesn't 
have the magic words ``Vote for, vote against, Hoyer for 
Congress,'' very specific, it is called the magic word rule.
    The Ninth Circuit disagrees with that and says it is--the 
magic word goes back to the Buckley case, the landmark case, 
which in effect had that as a footnote in the case that these--
and they spelled out these were the magic words. The Ninth 
Circuit said this, you know, the magic words, it wouldn't take 
any Rhodes scholar to fashion a political ad that would clearly 
urge one to vote for or against a particular candidate and just 
eliminate the magic word. And many--and the unsettled state of 
that law with two circuits in sharp, very defined disagreement, 
that division is reflected in the--across the board.
    I mean, the unsettled state of the campaign law, generally, 
you just have to look at the most recent case, the Colorado 
Republican case dealing with independent expenditures by 
parties, you have Justice Thomas on one end of the spectrum, 
who makes it very clear in a sole dissenting opinion that he 
would not enforce the Buckley case with reference to the 
constitutional limits on contributions, for example. And he 
feels and has expressed very clearly that he thinks the limits 
and restrictions are all unconstitutional and compelling 
government, he says there are bribery laws on the books and 
that will take care of everything. You have on the other end of 
the spectrum Stevens and Ginsburg, who solidly uphold Buckley 
and all it stands for with the limits and restrictions and 
prohibitions, and you have then the elements who are in 
between, the other Justices on the Supreme Court, but that 
division with reference to that and other issues.
    Now, bear in mind, the whole issue of express advocacy, if 
it is not express advocacy where it gets lesser protection 
under the Supreme Court's outstanding cases, under the 
Constitution, because of a compelling government purpose to 
eliminate corruption, not only the reality but the appearance 
of corruption. But that division, I suggest to you, is 
reflected in the United States Senate, the United States 
Congress, the White House, the American public, and the Federal 
Election Commission. And many of these very difficult issues, 
they are in a very unsettled state at the present time, and 
that is the difficulty. And if they are not within the law, 
that means that unlimited amounts of money can be spent, soft 
money or whatever; they are totally beyond the law, and can be 
without limit or restriction or prohibition of any description.
    So it is a very unsettled--when people say the law is out 
of whack, that is really what they have reference to, these 
divisions on these critically important issues which really 
trigger tremendous amounts of political activity for or against 
candidates.

                         express advocacy issue

    Mr. Hoyer. I think you mentioned, from the Congress' 
standpoint, the real problem dealing with this is obviously the 
state of the law and what we can and cannot do in terms of our 
authority, which may be good from Thomas' standpoint or may be 
bad from the standpoint of trying to reach fair limits and give 
equal footing to incumbents and nonincumbents and the wealthy 
and nonwealthy. This is very tough to do.

                           tuition assistance

    The Chairman mentioned a number of specifics. You referred 
to tuition assistance, which I think you came up with a figure 
of $614 dollars or something.
    Ms. Aikens. For fiscal 1997.
    Mr. Hoyer. Did you reference any of the other items he 
mentioned? I don't know if we are going to hear about it again.
    Ms. Aikens. He discussed travel.
    Mr. Hoyer. Convention attendance, cash awards, 
modernization, travel up 73 percent, he pointed out, 
prioritization of cases. Now, you have referenced that to some 
degree----
    Ms. Aikens. Yes, we have an enforcement priority system.
    Mr. Hoyer [continuing]. And I think we would all agree, 
from a management standpoint--you obviously said you agreed as 
well, if you have X number of resources, you spend them on the 
most compelling cases, cases that are most susceptible to being 
resolved.
    Ms. Aikens. And we are constantly discussing with the 
General Counsel's office upgrading the priority system, making 
changes in it to better address the needs.

                           convention travel

    Mr. Hoyer. Do you want to address the other items? 
Convention attendance is one of them. I presume one or more of 
you attended one of the national conventions.
    Ms. Aikens. I will let my colleagues answer that. I did not 
attend.
    Mr. Thomas. Yes, the tradition has been that Commissioners 
attend conventions and in prior years commissioners from each 
party have gone to one or the other convention. In 1996, as it 
turned out, only three members went to the Democratic 
Convention, no Republican members went, but--and we did get a 
letter from Mr. Thomas, Congressman Thomas, Chairman Thomas, 
about this. And we wrote back and said, yes, it followed the 
tradition that if invited, Commissioners occasionally will go.
    It turned out we spent about $3,500 on Commissionertravel 
to the conventions, out of $8,500 spent on Commissioner travel spent 
throughout the year, and that was well short of the $20,000 that had 
been allocated for travel that year. So we think we were being quite 
responsible in attending the conventions.
    In terms of whether it was beneficial to the public, we 
think as commissioners we need to get out. Part of the 
criticism we receive is that sometimes we don't understand the 
real word and how politics work, and the conventions are a 
great way to meet people, ask them what they think about the 
campaign finance laws, what they think about how the Commission 
is doing its business. We think it is very helpful, at least I 
do, and I think in that case it was beneficial.
    We also had the opportunity to meet with some of the 
officials handling the host committee. We have done that in the 
past. If they can find time, we sit down with them and talk 
about our process and ask them if they have any suggestions. So 
we think it did serve the public, at least I do.

                              cash awards

    Mr. Hoyer. Mr. Chairman, I know my time is up, but cash 
awards, did you reference that earlier?
    Ms. Aikens. Cash awards are less than 1 percent of salaries 
is the answer I got from the staff. We do not give many cash 
awards, but in relation to the salaries, they are very 
valuable. I mean, it is a very valuable tool, we feel, to 
reward the staff, and we give them very carefully.
    Mr. Hoyer. Okay.
    Mr. Thomas. And Mr. Hoyer, just one tiny point on that. We 
work from a standard government formula and keep it within the 
bounds of the standard government practice.
    Mr. Hoyer. Okay.

                                 travel

    Now, travel up 73 percent, did you comment on that beyond 
just the specific convention?
    Ms. Aikens. Most of that is not commissioner travel. Most 
is auditor travel or general counsel travel.
    Mr. Hoyer. In relation to the increase in the work load?
    Ms. Aikens. Yes. This was the year we had the presidential 
audits and there were several not on site. There were audits, 
there was one in Minnesota and there is one in Texas. So that 
is what the majority of the funds have gone for.

                        dornan/sanchez election

    Mr. Hoyer. My last question, Mr. Chairman, would be, I was 
somewhat concerned that Chairman Livingston raised the 
California race, I presume he is referring to the 46th 
District. I happen to serve on the task force of the House 
Oversight Committee dealing with the Dornan/Sanchez contest. To 
my knowledge, the issues there do not relate to the FEC, 
although I may be incorrect.
    Has anybody requested you to involve yourself in the 46th 
District?
    Ms. Aikens. No. No, they have not. Our Clearinghouse does 
supply vote recount manuals, and I don't know whether they have 
supplied it to the two districts who are having vote recounts 
or not. But in the past, they have provided manuals which they 
constantly update to facilitate the vote count, recount.
    Mr. Hoyer. Your Clearinghouse?
    Ms. Aikens. Yes.
    Mr. Hoyer. Why do you get into vote recounts?
    Ms. Aikens. Well, the Clearinghouse on Election 
Administration is the office that deals only with State elected 
officials and not federally elected officials, and they are a 
research arm of the Commission.
    Mr. Hoyer. All right. Thank you.
    Mr. Kolbe. Thank you, Mr. Hoyer.

                       automated data processing

    I have just one other area of questioning, and that has to 
do with automated data processing. You, in your 1998 budget 
request, you had called for an investment, your original plan--
I am sorry, not your 1998 budget request, but your original 
plan from prior years--called for an investment of $1,986,000 
in automated data processing, ADP. You have scaled that back to 
$1.17 million, a reduction of $814,000 which I calculate to be 
41 percent reduction. Now you are asking for a supplemental of 
$1.7 million and a revised budget request of 3.2, an increase 
of 4.9 million from your original request.
    Certainly with these kinds of increases that you would at 
least like to have, the scaled-back automated data processing 
plan can't be based on a lack of resources or a concern that 
Congress won't provide the resources needed to meet FEC's 
statutory responsibilities.
    Let me ask why you have scaled back the modernization plan 
for 1998.
    Ms. Aikens. Well, I am going to let Commissioner Thomas 
answer some of this, because I did not study the whole ADP 
contract. But in 1996, for FY 1997, in the original budget, we 
asked for $3.2 million for upgrading, for the modernization of 
the ADP. We received $2.5 million that year, and some of that, 
I think about $700,000, was diverted to point of entry and to 
the electronic filing.
    Mr. Kolbe. Diverted by whom?
    Ms. Aikens. By us. When the law was passed, we had to get 
point of entry in place for the 1996 election, and we had to 
get the electronic filing in place by January 1st, 1997. We 
diverted some of those funds so that we could do those two 
things mandated by the laws, and that pushed some of the 
modernization back a year or two.
    Now, Commissioner Thomas is our expert on ADP.
    Mr. Thomas. I would like to start first by saying we 
appreciate any concern you have about whether we are moving 
fast enough with ADP. We would like to try to reassure you, we 
are not trying to hold back on these ADP modernizations. We 
think they are great and we are pushing for them.
    To be honest, part of what we encounter as we plan this 
according to the 5-year or 6-year plans, is that you have to 
work with this building block concept, and our contractor 
advised us of that. So as we keep looking at it, taking a fresh 
look at it, we find sometimes that some aspects ought better be 
done maybe in a different time frame than in others. So aside 
from some of the initial budget squeeze problems that we have 
run into up to this point, there is also, I think, to be fair 
about it, some reconsideration of at what stage particular 
things can be put in place because we have to get the other 
building blocks in place.
    What you are specifically referring to, just quickly, is 
the fact that we are going to have to delay one aspect of our 
modernization, and that is ultimately to be able to use what is 
called digitized imaging for documents that we have. It is a 
way to have documents on a computer that you can pull up on the 
computer screen instead of having to work with paper copies.
    It is true, we are telling you, and we wanted to be just 
up-front, that now we are probably going to delay 
finalcompletion until fiscal 2002 rather than 2001, but that is really 
only one aspect of that. And it is not, on the other hand, we think, 
going to affect what has otherwise been noted as a very crucial 
concern, and that is for our enforcement program.
    We [Clerk's note.--Witness later clarified by adding 
``will.''] put in place a case docket management system, and we 
think we can explain to you how, in fact, we are moving quickly 
on that; and we will have that in place in time to have it 
serve as much benefit as the original plan would have 
conceived.
    Mr. Kolbe. Well, I will come back to that in a minute.
    In your 1997 supplemental, how much of it is for ADP 
enhancements?
    Ms. Aikens. In 1997----
    Mr. Kolbe. No, the 1997 supplemental.
    Ms. Aikens. Supplemental, $287,000 of it is going to case 
management for the one litigation case.
    [Clerk's note.--Witness later clarified this to read: 
``$269,000 of it is going to case document management support 
for the major 1996 election cases.'']
    Mr. Kolbe. That is not for the case, for the lawyers.
    Ms. Aikens. It is for case management; it is a document 
management program, a case management program.
    Mr. Kolbe. That is for ADP?
    Ms. Aikens. Yes, yes.
    Mr. Kolbe. Okay. What was the amount?
    Ms. Aikens. $287,000 [Clerk's note.--Witness later changed 
this to read. ``269,000''] in fiscal year 1997, in the 
supplemental.

                       automated data processing

    Mr. Kolbe. Okay.
    Ms. Aikens. And that is a system----
    Mr. Kolbe. And that would be for the case management?
    Ms. Aikens. That is a system that we are contracting with 
the Justice Department, that will provide the hardware, the 
software and the services. And we are doing it more or less on 
a test basis so that we can really find out exactly what we 
need, if this is adequate, if we need something else, before we 
go Commission-wide on it.
    Mr. Kolbe. Your supplemental has 219,000 for litigation 
document equipment, 50,000 for litigation document equipment. 
Is that considered part of your ADP plan?
    Ms. Aikens. Yes. [Clerk's note.--Witness later changed this 
to read: ``No.'']
    Mr. Thomas. When you say part of our plan, if you are 
referring to the 5-year strategic plan and performance plan, 
the answer is no.
    Mr. Kolbe. No?
    Mr. Thomas. No, because that 5-year plan was crafted with 
our base level request in mind.
    When we talk about the changed circumstances and our need 
to ask for what we are calling the fiscal 1997 supplemental and 
the fiscal 1998 amendment, it is going to allow us, if we get 
that funding, to do some additional ADP programs; and in that 
sense, those numbers you were just citing referring to our 
ability to get document management computerization in place to 
handle these new big cases that we are asking for additional 
money for out of the 1996 cycle. So if we can get that, we will 
be able to use this modernization, this computerization, to 
help us along dramatically in dealing with those 1996 cycle 
cases. But that funding is discrete, it is separate, we have 
tried to set it aside so you can see how it would add up to 
help us with these 1996 matters.
    Mr. Kolbe. Before--you spoke earlier of your case 
management system. Before you could deploy that, there is a 
couple of systems you have to have up and running, group 
strategy and the imaging system, but those are both being 
delayed.
    Mr. Thomas. The underlying imaging system----
    Mr. Kolbe. That is the one you said was going to be delayed 
until 2002.
    Mr. Thomas. [Clerk's note.--Witness later clarified by 
adding: ``Yes, it . . .'']--is going to be delayed until 2002, 
and to be honest, the part that is going to be delayed is the 
part that allows us to take old, existing FEC documents and 
scan them in so that they too will be accessible with imaging 
technology. The last part of the imaging will not affect our 
ability to have up and running a system for enforcement 
litigation, to take in new documents, briefs and so on, and get 
them on the system and use that to help them with the case 
management.
    So I am trying basically to say, it is not, I don't think, 
as bad as it might otherwise sound, and the part that is 
getting delayed is perhaps one of the less significant aspects 
of our computer modernization.
    Mr. Kolbe. My last question is, if Congress wanted to 
accelerate this case management system so it could be deployed 
in 1999 instead of 2000, as now planned, what specific efforts 
that are not included in your 1998 budget request, revised 
budget request, would we need to fund in order to accelerate it 
by a year? Can you tell us that for the record, or if not, 
could you tell us what you would need?
    Ms. Aikens. We could supply it for the record, Mr. 
Chairman, because it would have to be--we would have to work 
out the numbers. But we will discuss it with our Assistant 
Staff Director, who is in charge of all this, and we will 
provide you with some figures.
    [The information follows:]

[Page 46--The official Committee record contains additional material here.]


    Mr. Kolbe. Also, with that, if there is anything that would 
be needed, if the acceleration of a year would require you to 
get moving in 1997, if some of that would have to come in the 
1997, in the supplemental, please let us know.
    Ms. Aikens. We will do that.
    Mr. Kolbe. Either the 1998 dollars or the 1997 
supplemental.
    Mr. McGarry. Mr. Chairman it is important to point out, 
there are three computer initiatives. You are talking about 
point of entry for House reports, electronic filing and 
automatic data processing. With the consent of the committee, 
this committee, we did a 5-year plan. That 5-year plan, 
involving these three computer initiatives, spells out the 
amount of money we need to implement that. This committee, the 
Congress, through its committees has not given us the money 
that the plan calls for that we got with the committee's 
sanction and approval.
    Now, the point of entry that was a one-shot deal that cost 
a half a million dollars, and it was a big success. It saves 
the House a lot of resources and money, and it saves the 
Federal Election Commission; and we have digital imaging and we 
are able to eliminate the burdensome and expensive microfilm 
process.
    But one of the problems is that the 5-year plan, as a 
result of not getting the money that is called for in 
theconsultant's plan, is now a 7-year plan. So there is going to be 
backup money, which we spell out in all the materials which we 
submitted to you, but it is important to point that out for the record.
    Mr. Kolbe. Thank you very much, Commissioner--Mr. Chairman.
    Mr. Hoyer. I have no further questions.
    Mr. Kolbe. We will have some other questions for the 
record.
    Ms. Aikens. We will be glad to respond to those.
    [Questions for the Record and Selected budget justification 
materials follows:]

[Pages 48 - 137--The official Committee record contains additional material here.]


    Mr. Kolbe. We appreciate your coming very much.
    Ms. Aikens. I would just like to point out that we do 
intend to keep this--if we get the supplemental and the 
amendment, we intend to keep that a discrete unit with its own 
case management system, so that we can better measure how well 
we are doing.
    Mr. Kolbe. Thank you very much. We appreciate you all being 
here.
    The subcommittee stands adjourned.

                                          Thursday, March 20, 1997.

                    GENERAL SERVICES ADMINISTRATION

                               WITNESSES

DAVID J. BARRAM, ACTING ADMINISTRATOR
THURMAN M. DAVIS, DEPUTY ADMINISTRATOR
MARTHA N. JOHNSON, CHIEF OF STAFF, ASSOCIATE ADMINISTRATOR FOR 
    MANAGEMENT SERVICES AND HUMAN RESOURCES
DENNIS J. FISCHER, CHIEF FINANCIAL OFFICER
WILLIAM B. EARLY, JR., DIRECTOR OF BUDGET
ROBERT R. PECK, COMMISSIONER, PUBLIC BUILDINGS SERVICE
FRANK P. PUGLIESE, JR., COMMISSIONER, FEDERAL SUPPLY SERVICE
ROBERT J. WOODS, COMMISSIONER, FEDERAL TELECOMMUNICATIONS SERVICE
JOE M. THOMPSON, CHIEF INFORMATION OFFICER
G. MARTIN WAGNER, ASSOCIATE ADMINISTRATOR FOR GOVERNMENTWIDE POLICY
WILLIAM R. BARTON, INSPECTOR GENERAL

                              Introduction

    Mr. Kolbe. The meeting of the Subcommittee will come to 
order.
    My apologies. I was assured there was going to be a vote 
right at 10:00, so I was waiting for that and it did not take 
place. But I expect we are going to have continuous votes all 
day here, which will make the hearing very difficult, so we 
will try to expedite it as rapidly as possible.
    Let me just say we welcome Mr. Barram here; Mr. Barram, the 
Acting Administrator of the General Services Administration; 
and with him Bob Peck and Mr. Woods. Bob Peck, is the 
Commissioner of the Public Buildings Service, and Mr. Woods, is 
the Commissioner of the Federal Telecommunications Service.
    In this coming fiscal year, GSA is requesting an 
appropriation of $142.8 million. Of course, the bigger part of 
the story is the $4.8 billion obligational authority request 
for the Federal Buildings Fund. And today I expect some of our 
questions are going to focus on the Federal Buildings Fund. 
There is an estimated shortfall of $680.5 million.
    The administration's proposal is to replenish the shortfall 
to the fund by not building new buildings or conducting major 
repairs, and that should be a concern, I think, to all of us in 
terms of the quality and condition of our physical 
infrastructure. And I hope we can have some discussion about 
its impact and possible alternatives.
    Another area I think we want to address is GSA's role in 
Federal downsizing efforts. GSA has helped agencies going 
through downsizing efforts by properly addressing changing 
space requirements and paying for the move of the affected 
staff. Such efforts will help the Government more quickly 
realize cost savings by reducing overhead costs.
    And of course there is the issue of the FTS 2000, which 
this committee does not intend to address. It is an 
authorization issue. It is under the just jurisdiction of the 
Government Reform and Oversight Committee. It is not on our 
bill. Nonetheless, I think it is important that we at least 
understand the current situation and the plans that are going 
to be followed for the awarding of a contract in this area.
    Before I call on Mr. Barram, let me see if Mr. Hoyer has 
any opening remarks that he would like to make.
    Mr. Hoyer. No, but I just want to welcome Mr. Barram, and 
we will get to the hearing and see how far we get. Glad to have 
you here.
    Mr. Kolbe. Mr. Barram, your full statement of course will 
be placed in the record. I urge you to summarize it as briefly 
as possible so we can get as far as we can here before we start 
getting interrupted.

                    Summary Statement of Mr. Barram

    Mr. Barram. Thank you very much. It is good to be here with 
you.
    You have my statement, and I am not going to read it; that 
is for sure. I want to say three things about GSA today, 
though, and then I will mention, as have you, two of the 
biggest issues that are on our plate.
    I have said many times, ``This is not your father's GSA'', 
and I also said last year in this Committee that we would be 
very bold, and we have been, and we are changing the culture of 
GSA dramatically.
    The three things I want to mention are that our focus is on 
thrilling customers, on managing smartly, and on being 
committed to great work environments.
    When we say thrilling customers, it is because we have no 
choice. No organization that wants to be successful can succeed 
inside or outside government without focusing on the customer 
to the extent of thrilling that customer. The idea that we are 
in many parts of our organization today, and will be in all 
parts of our organization, providers of choice is essential. We 
need to be so good that our customers will choose us. When we 
think that way, it helps us to be good.
    But we need to have, while we are doing that, a very 
professional approach where we provide great service and great 
value. We are not talking about giving our customers 
everything, we are talking about providing best value and best 
services. We are partners with our customers, not just gofers. 
We get great prices on air fares, and on a lot of supplies and 
services we provide. We are very responsive to FEMA, and others 
when it is necessary. We have made dramatic strides in the way 
we lease and do space alterations that are very good for our 
customers, very professional.
    The second thing: If we are managing smartly, we need to 
have a clear vision, and we need to strategically improvise, 
and we need to manage our business processes, change them. Too 
many people, I think, today in lots of organizations focus on 
doing a lot of planning and focus on getting organizations to 
change. I think you have to have a totally different look at 
that, which is you focus on issuing a part of the strategic 
planning process in small and big ways. We are trying to do 
that. It also means that we are focused on responsibility.
    The President has been very articulate in the last year or 
two on the subject of opportunity and responsibility going 
together, and we are trying to help people to take 
responsibility to manage decisions at their own level and then 
be responsible for results. That is how you manage smartly.
    And being committed to great work environments is the third 
point. All workplaces are changing dramatically. The 
technology, the availability of technology, the mobility that 
we are going to have, the way workplaces look in the future are 
going to be incredibly different than today. We are going to be 
about model work environments, both our own and our customers', 
and we will try to help spread that across the Government.
    Another aspect of that is that the skills of the workforce 
are changing and have to change. Almost all of us--I would not 
wish it on the two of you, but the rest of us will be doing 
something different in 3 years, and we need to understand that, 
and we need to have the skills to be able to function that way, 
so we are very focused on helping our people develop the skills 
to flourish in the environment ahead.
    Mr. Hoyer. Let me interject, I would wish for me to be 
doing something different in 3 years, personally.
    Mr. Barram. What I would wish for you is that you get to do 
whatever you want.
    Mr. Kolbe. Spoken like a true politician.
    I was going to ask you, Mr. Hoyer, what you are wishing?
    Mr. Hoyer. A perpetual minority is not it.
    Mr. Barram. We are not going to talk about that today, are 
we?
    Mr. Kolbe. Please go ahead.
    Mr. Barram. From our budget perspective--you already 
mentioned it, Mr. Chairman--there are really three levels we 
look at. We have a direct appropriation of a little over $200 
million; we have about $13.3 billion in obligations that has 
resulted from other agencies putting money into GSA, for which 
we then provide services and then we have an effect on about 
$43 billion of Government financial transactions that we 
influence by a lot of things that we do. So we have a lot of 
leverage--we get an awful lot of leverage from the direct 
appropriation that you provide.
    Our budgeted FTE is at 14,400 for Fiscal Year 1998, down 29 
percent since 1993, and, as I said earlier, this provider of 
choice idea is important to us. It makes us get better or we 
lose our business, but it also helps our customers get sharper 
because they now have to make some choices where maybe they 
just automatically used us in the past.
    The two hot items that you mentioned will take a good part 
of our time together. One is the rent shortfall, and you 
already know quite a bit about that. I don't know as much as 
Bob Peck knows, so he is going to answer all the tough 
questions on rent shortfall.
    We made a mistake estimating rents for 1996 and 1997. It 
was a budget error, which did not lose any money, we just erred 
in estimating the amount of rent we would get. The error, as 
you said, was about $680 million out of a flow-through of $10.5 
billion, so that is about 6 or 7 percent, to get a perspective 
on it. We want to fix it in fiscal year 1998, so we need to use 
fiscal year 1998 revenue to cover newconstruction and major 
maintenance that Congress had already approved, and we will talk about 
that today.
    We also have fixed and have continued to fix our rent 
estimating ability. We are embarrassed and uncomfortable at 
this. It is not good management, and we want to not let it ever 
happen again.
    The second issue is the telecommunications FTS 2001, and, 
however much or little you know about that, you don't know 
anywhere as much as Bob Woods knows and you don't ever want to. 
It is the most complex subject, in my opinion, in American 
commerce and probably in world commerce today.
    Technology is changing fast. We have a new telecom reform 
law after 60 years which we are trying to follow. We have in 
the private sector a huge installed base, installed by 
companies who were regulated, have been regulated, and who are 
now in a more competitive environment, and this is a big 
change.
    In the middle of all that, we are trying to get and have 
gotten the best very, very low, great prices and great services 
for our Federal customers, and that is our goal in FTS 2001. We 
are going to plan well and communicate extensively with all the 
players in this subject.
    That is all I will say to open up. I certainly would be 
happy to answer any questions.
    [The prepared statement of Mr. Barram follows:]

[Pages 143 - 153--The official Committee record contains additional material here.]


                            Opening Comments

    Mr. Kolbe. Well, we can take a couple of minutes before--
Mr. Hoyer, you said you could not come back. Why don't you go 
ahead and ask a couple of questions.
    Mr. Hoyer. Unfortunately, I have to go right now because we 
care a lot about this motion on the floor and I am supposed to 
work it into my other responsibilities.
    But, Mr. Chairman, I have asked Mr. Barram and perhaps 
others in the GSA leadership to come by my office on Thursday 
the 27th, so we could go through this because I knew I wouldn't 
be able to come back here. And I thank you for your 
consideration, but I need to go right now.
    Thank you, and I look forward to following up.
    Mr. Kolbe. All right.
    Well, I will be coming back, and I am not sure whether you 
will be able to, if you want to go with your questions, I will 
go ahead and ask mine.
    Mrs. Northup. No. I will come back.

                             rent shortfall

    Mr. Kolbe. We are going to go for another 5 or 6 minutes 
here before we have to go to catch this vote.
    You show that you have a $680 million deficit in the 
Federal Buildings Fund, but it is really $847 million, is it 
not, and you have offsets of $167 million, which have nothing 
to do with the building fund, but the real building fund 
deficit is $847 million. Is that not correct?
    Mr. Peck. Well, Mr. Chairman, I guess we have to start with 
the fact, as you know, we operate like a business. This is 
unusual for Federal agencies. We do not just get appropriations 
and spend everything. We get most----
    Mr. Kolbe. It is not quite like a business in the way rents 
get charged and who pays rents or doesn't pay rents.
    Mr. Peck. That is something which we really want to talk to 
you about because we say we are running like a business and 
then we are asked to do all kinds of unbusinesslike things by 
the Government or Congress, and sometimes that makes it hard to 
balance the books or make any kind of profit.
    Here is what has happened, to answer your question, it is 
true that if you add up all of the revenue that came in against 
what we projected, the total shortfall becomes $847 million. 
However, like a business, not getting the revenue meant that in 
the years in which this has happened--this is one we are in 
right now--there were certain costs which we were able to 
avoid. If an agency says, we are downsizing, we don't need 
space, we don't go out and obligate ourselves to pay rent. In 
some cases they vacate space and we stop cleaning it to the 
extent that we did before. The $167 million that we netted out 
are cost that we did not immediately have to incur. So what we 
have said is, we have had a net shortfall in the fund of $680 
million.
    So I am saying you are right, the reason we reported this 
as $680 million is because that is the amount of money that we 
need to make up, that is the amount of money which we could not 
immediately recapture in the fiscal years in which we saw 
revenues going down. We took what immediate steps we could to 
make up for it.
    My basic point here is, like any business, I looked at the 
Wall Street Journal yesterday morning. On page 2 there were 
reports of three major American corporations that reported 
reduced earnings in the last quarter. It happens they are not 
happy about it. I can tell you that we are not happy about our 
reduced revenues. What they immediately did was cut expenses, I 
am sure, to try to get their net where they wanted it to be. 
That is what we have done.

                      confidence in rent estimate

    Mr. Kolbe. Excuse me for trying to move along here with the 
time constraint problem we have.
    How confident are you of the $680 million estimate? It 
looks like we are badly off here with this estimation. How 
confident are you that that is going to be an accurate one? 
Maybe it will be less, maybe more.
    Mr. Peck. Well, you are right. One thing we know for 
sure.Part of the year--fiscal year 1996, the books are closed; we know 
that number. For fiscal year 1997, we are tracking very carefully where 
we are. The total may not be $680 million, but we may be off by a very 
small margin.
    Mr. Kolbe. See if I understand this. This is a shortfall in 
the building fund. Does that mean then that you are $680 
million short of what you need to make payments for current 
construction or for operating costs, or what?
    Mr. Peck. No, sir, this gets complicated, but in any given 
year, we are spending money that was appropriated 2 or 3 years 
ago. That is why we say we will have a $1.2 billion 
construction program next year on previously appropriated 
funds.
    What we cannot do is get new obligational authority in 
fiscal year 1998 that would make up for the obligational 
authority which we didn't get revenues to cover in previous 
years.
    So, you know, I am trying to say that is how we have to 
balance our books. We have--and this is another way in which we 
differ from a business--to follow Government accounting 
principles. That is what we are going to do to make up this 
gap.

               strategy to compensate for rent shortfall

    Mr. Kolbe. Your solution is to replenish the Fund by 
charging rents to the Federal agencies, or some of them at 
least, but not use the Fund for construction or major repairs. 
Is that a correct assessment?
    Mr. Peck. Yes, sir. And actually what is happening is we 
know there are some funds previously appropriated that we 
thought we would spend in fiscal year 1997 which we are not 
going to spend in 1997. That is an immediate savings. However, 
at some point this all catches up with you, and it catches up 
in fiscal year 1998, such that, if we are going to continue to 
spend that money that we have anticipated, we cannot obligate 
new things in 1998. We can roll over certain things from this 
year to next year, but then we cannot start new things next 
year.
    Mr. Kolbe. Did you consider other alternatives such as 
raising rent to agencies?
    Mr. Peck. Well, let me suggest one other option first, if I 
may. One is that we could decide to make up for this deficit 
over a series of years rather than all in one year. And we have 
considered that but decided that, like a lot of businesses, it 
is better to take the charge against losses in one year.
    Raising rents poses a problem. We are required by law when 
we set our rents to charge commercially equivalent rates, so we 
cannot arbitrarily set the rent rates wherever we want just to 
cover expenses. And just like a business, the rent rates are 
pretty much given to us by the market.
    Mr. Kolbe. Do you reduce rates arbitrarily across the 
board, kind of reduce rates?
    Mr. Peck. Yes, sir.
    Mr. Kolbe. You could do that, but----
    Mr. Peck. Well, we think we are right on the mark, a 
previous Administrator took a look at our rent rates and 
decided that our rent rates were above the market in 18 major 
markets, and so he reduced our rents to what he said at the 
time he thought equated to commercial markets.
    That was outside of a process we have in which we actually 
hire certified appraisers to figure out what the rents are in 
markets, and we think our rents are what they are supposed to 
be. So, you know, it is hard for us to justify raising the 
rents unless an appraiser has told us we are below the market.
    Mr. Barram. As you know, in a business you like to raise 
your prices sometimes to cover an expense problem like this, 
but you cannot or you lose market share. And now that we are in 
this mode of being providers of choice, we have even more 
pressure, I think, and appropriately so, to have sensible 
rents.

                        basis for rent shortfall

    Mr. Kolbe. Is it safe to say that your errors in your 
estimates here were because of inaccurate, incomplete estimates 
on the rental from GSA, and that it was not due to any 
extraordinary event that occurred?
    Mr. Peck. You know, in several years past we have gotten 
more revenues than we anticipated. We have to estimate 18 
months in advance, of course, of the fiscal year, to get 
through OMB and the appropriations process.
    One-fourth--one-third actually, of the $680 million is 
because the Government has downsized and agencies are actually 
telling us they don't need as much space as they needed before. 
I think that our forecasters back then didn't think that 
government downsizing was going to hit, at least in space, as 
much as it has; that was one part of the problem.
    Another part, quite honestly, was that our forecasting 
methodology was just too gross, it was not bottom up; and, 
finally, we made one error in carrying over the rent reduction 
which we referred to into future years.
    Mr. Kolbe. We will come back to this. We are going to have 
to stand in recess so we can go vote, and we will come back as 
quickly as we can.
    [Recess.]
    Mr. Kolbe. We will resume here.
    Let me go from the shortfall, the specifications of how the 
shortfall developed, although let me ask one other question on 
the shortfall. What steps are you taking to try to ensure that 
you have more accurate estimates in the future? Or is there 
anything you can do? Is there anything you can do to make a 
more accurate assessment?
    Mr. Peck. Yes, sir.
    Mr. Kolbe. Because when I look at the list of the things 
which caused the shortfall, it is not just not anticipating the 
size of the Federal downsizing; it is effective Government-
owned space increases, and the rent reductions. There is a 
variety of different things in here. Adjustment was made to 
revenue estimates based on the belief that assumptions being 
used were too conservative, actual experience indicates 
conservative assumptions were more accurate, and so on.
    How are you going to try to avoid this in the future?
    Mr. Peck. Well, the last one is the most obvious. We are 
taking the most conservative assumptions we can now; I can 
assure you of that. We are not taking the rosy scenario on our 
revenue estimates.
    Mr. Kolbe. Let me interrupt you right there. Do you have 
the final say over the assumptions that you make, or does OMB 
tell you what you are going to put in there?
    Mr. Peck. Hold on a second. Those are our assumptions. OMB 
approves the rent rates which we can charge.We do consult with 
OMB, but it is finally our estimate on how much we think agencies are 
going to need.
    Mr. Kolbe. So those less conservative assumptions were your 
assumptions?
    Mr. Peck. Yes, sir, in those cases.
    And the other thing I will tell you we have done--I want to 
be clear--when we discovered this, we realized we had a problem 
in our forecasting system. We have changed the assumptions. We 
have changed the way we do estimates. We found out that 
particularly in the downsizing climate, the forecasting formula 
which we had used was not working anymore, and so we have 
changed that. We are now doing a bottom-up forecast.
    We were doing sort of national rules of thumb: take our 
whole inventory, apply rule of thumb, and decide how much our 
rents are going to change. We are now going down to the basic 
market level in various cities in the country and saying: 
``What do you see about Federal space? What do you anticipate 
the rent increases or decreases to be?'' So we are building it 
up from there.
    We asked Ernst & Young to come in and take a look at our 
forecasting methodologies, because although I don't like to 
spend a lot of money on contractors, in this case we felt we 
had to get an outside party to look at what we are doing. So we 
are changing that.
    We are also putting in place this year a new inventory 
control system which we are licensing from AT&T. It is the way 
they manage their real estate operations. It turns out that our 
25-year-old computer has bad data. It takes a long time to get 
data out of it. So we are taking a number of actions that we 
think will produce more accurate estimates.
    Mr. Kolbe. All right. I have a series of other questions. 
We have other members here. I don't know how long it will be 
before we have a vote. Mr. Price and Mrs. Northup came in at 
the same time. I will go with Mr. Price and then Mrs. Northup.

          parking at raleigh, north carolina federal building

    Mr. Price. Thank you, Mr. Chairman.
    I have one brief question having to do with something in my 
district, a project of considerable importance; and then I want 
to raise some more extensive questions about the post-FTS 2000 
contracting procedure.
    But first, I'd like to ask about parking at the Raleigh 
Federal Building, the major federal facility in the Fourth 
Congressional District, and there, how the planning process 
works and is working for construction or expansion of Federal 
facilities with respect to parking.
    In the last few years, the Federal Building in Raleigh, 
North Carolina, I am sure you realize, has undergone some major 
changes. The main post office, which used to be on the first 
floor, has moved. The vacated floor is now being converted to 
additional courtrooms. Since there is no parking for the 
building, there has always been a significant parking problem, 
and it has been exacerbated by the new demand for parking 
around the Federal Building.
    I am concerned about the additional strain these new 
courtrooms are going to pose for the building. I understand you 
own land in the vicinity of the building, and I wonder if you 
could tell me how the planning is coming for parking for this 
facility and what kind of plans you have or would like to put 
into effect for parking facilities for those visiting the 
Federal Building for whatever purposes.
    Mr. Peck. Congressman Price, the regional office that is in 
charge of this, headquartered in Atlanta, is conducting a 
survey in Raleigh. You are right about the land, and we are 
conducting a survey to determine what the parking needs are and 
how we could satisfy them.
    What I would like to do is have an opportunity to consult 
further with the region, on where they are on that, and come up 
and brief you or your staff next week if that is acceptable.
    Mr. Price. That would be good. It is important for this 
process to move forward. I am eager to consult with you about 
it. I just wanted, for the record, to indicate that the need is 
great and that we need to give priority to this particular 
situation.
    Mr. Peck. Yes, sir. We are aware that there is a need, and 
we are trying to figure out how to satisfy it.

                             post-fts 2000

    Mr. Price. Good.
    Let me ask you now about the status of these contracts 
providing telecommunications services to the Federal 
Government. As I understand it, the current contract which 
provides long-distance voice and data communications services 
to the Federal Government, FTS 2000, was awarded to AT&T and 
Sprint in 1988. This contract is set to expire on December 6 of 
next year.
    In preparing for the expiration of FTS 2000, your agency 
began the process of developing a subsequent procurement 
strategy in 1993. That process culminated with the release of 
what was reportedly the final draft of the post-FTS 2000 RFP 
last fall. Your proposed RFP called for separate procurements 
for long-distance, metropolitan-area, local service, and 
combined local and long-distance service in areas where 
traditional local and long-distance providers have infiltrated 
each other's markets.
    Now, as I understand it, like many other things that are 
subjected to discussion and cross pressures in our democratic 
system of government, no one potential provider was completely 
satisfied with that strategy, but it was an approach at the 
time we thought everyone could live with. That probably meant 
you had done a good job in balancing the interests involved, 
and I think you shared that sentiment.
    In fact, in your letter to Senator Ted Stevens of November 
26, you stated--I am quoting --``The strategy we have developed 
is the optimal approach to address a climate of profound change 
in competitive telecommunications markets.''
    You also indicated some urgency in getting approval of the 
proposed RFP: Again quoting, ``It is of the utmost importance 
that the Government proceed with the near-term acquisition and 
subsequent transition to the FTS 2001 contracts immediately. 
Further delay will certainly increase costs regardless of the 
strategy chosen.''
    Subsequently, however, you announced a change in strategy--
at least as I understand it--which basically permits long-
distance providers who are awarded portions of the contract to 
have the option of also providing local service in those areas 
in lieu of the earlier plan for seeking separate, competitive 
bids on local service. You then announced a 30-day delay before 
the final strategy would be put out for bids in order to 
accommodate additional comments on the proposed revisions.
    First of all, in light of thebroad support for the November 
strategy and the urgency in getting this procurement process underway, 
why did you make changes in what you at that time said was the optimal 
approach?
    Mr. Woods. I think that is really mine to answer, 
Congressman Price. What we had done last year was go forward 
with the idea that we want to bring maximum competition to our 
next generation services. The current program, FTS 2000, really 
only provides long-distance service. It does it very 
effectively.
    While you are paying 17 to 20 cents a minute at home, in 
spite of what you may see in advertisements, we are paying for 
the Government right now about 5 to 5 and a half cents a 
minute. So this current system works. Competition has worked. 
We believe in it, and we are dedicated to it.
    The question that arose after last fall's work was whether 
or not the Telecommunications Act itself really bought into the 
idea that each segment of the market would simultaneously enter 
the other's market. That is basically the underpinning of last 
fall's compromise and work that was done by the industry. And, 
by the way, they worked hard at that compromise, and I 
personally put a lot of my time into it.
    When the policy was raised by a colleague of yours in the 
other chamber, the issue was about the law itself, basically 
saying that long-distance providers could go ahead with 
providing local service and that local providers could provide 
long-distance only when they had met certain checklists 
outlined under the law. The policy issue is, why are you, in 
essence, doing it differently, in other words, simultaneously 
looking at this issue?
    In addition to that, our real push from agencies and 
customers was that they want end-to-end service as soon as they 
can get it. The reality of the world is that the 
telecommunications market is moving forward unevenly. We are 
going to have long-distance providers that can provide service 
in 12 cities but not the entire U.S. from end to end, and the 
question is, why can't you let them go ahead and go into this 
now and provide end-to-end services if the industry is ready? 
And that question is a policy question about which OMB said, we 
think it makes sense to go ahead and provide the end-to-end 
service.
    So that was why we made the change, to allow providers in 
each segment to go ahead and provide service end-to-end as soon 
as they could do it.

                      fairness of revised strategy

    Mr. Price. Well, you are clearly correct that this is a 
dynamic time for this industry, and the changes hold all kinds 
of possibilities not only for Federal procurement but I think 
for telecommunication services generally. But the development 
of these capacities, has proceeded unevenly, and it is going to 
take some time for the local service market to be fully 
competitive. And these changes are very rarely, if ever, 
neutral with respect to the various competitors.
    Can you tell me if this revised strategy is going to favor 
one provider or one kind of provider over another?
    Mr. Woods. I think, Congressman, within the context of the 
law, it does not. It follows the law very strictly. I would be 
naive if I thought that some segments of the industry don't 
feel like their position is not maximized in terms of 
competition. But I believe it is in the Government's best 
interest, and I also believe the Government is at this stage 
putting itself in jeopardy by not moving ahead.
    We have been living off the price decreases. We have been 
driving prices down in the long-distance market roughly 20 to 
25 percent a year. Agencies have been growing at that rate and 
more.
    If we go straight line, level prices for a couple of years, 
some substantial budget increases are going to show up, because 
things like the social security hotline, you don't just control 
those as a flat item, they will grow because they are public 
oriented. They reach out to the public, I think wonderfully.
    But the down side of that is, we have got to keep driving 
prices down, we have got to move on to the next generation to 
keep those prices headed downward, and we believe there is 
tremendous potential in the local market for those price 
decreases.
    Mr. Kolbe. Mr. Price, we will come back, if I may, with 
some more questions and get another round here since we have 
everybody here. Mrs. Northup.

                            excess computers

    Mrs. Northup. Yes. I would like to ask, I notice that in 
your presentation you said that computers are discarded as 
obsolete equipment, whatever was available was donated to 
schools.
    You know, we have in our local office next to us a room 
that is a pile of discarded, maybe out-of-date computers, and 
have been trying to find a way--the department for the blind--
actually, the American Printing House for the Blind and the 
Kentucky Industry for the Blind have a project where they take 
discarded computers and upgrade them for the blind and disabled 
community and make them available at just the cost of upgrading 
them.
    We have not been able to find a way to release these 
computers or to--and actually, you know, the question in our 
mind is, if we have a room next to us that has these computers, 
how many other rooms like that are around the country and how 
do we corral those? And they become increasingly more obsolete 
every single day.
    Mr. Barram. Let me ask you a question or two. The room next 
to you, is that your office or a Federal Government agency 
office?
    Mrs. Northup. It is in a Federal Government office 
building, and formerly, another Member of Congress had 
extended--more extensive offices than we have rented, and that 
was part of his office.
    Mr. Barram. I could talk a lot about this. Let me say a 
couple of things. One, the President's Executive order says, to 
all Federal agencies, when there is excess, give them away, 
particularly to schools, particularly in inner-city areas, 
disadvantaged areas. We have been talking with lots of Federal 
agencies to try to get them to do that, and many are responding 
very well. We are coordinating it.
    We have given away at GSA a thousand computers this year 
already, and we will keep pushing for it. Other agencies are 
doing this as well. If it were a Federal agency and you tell me 
who it was, I would call them tomorrow and say, let's get 
moving on this.
    The second thought I have on this, I know this business of 
the computer business fairly well, and schools need to have 
technology. They need two kinds of technology. They need entry-
level technology to help people just get familiar and do things 
like typing very simple stuff, for which you can use obsolete 
equipment, and I will get back to that in a second, and the 
other is that you need really good equipmentto train kids for 
the future.
    But on obsolete stuff, if there is an agency with computers 
like you are talking about, that somebody says does not work 
anymore, they are not going to fix them up and then give them 
to a school, someone has to be an intermediary. So we have been 
working to try to find these intermediaries, and there are a 
number of them.
    Mrs. Northup. Do you consider 386s obsolete?
    Mr. Barram. Sure. You are talking to a guy that thinks 486 
might be close to obsolete. You can cannibalize it sometimes; 
you can use it for a lot of stuff.
    Mrs. Northup. So, actually, if my office contacts you, you 
would be interested in not only helping us clean out this room 
next to us, but maybe if you have other opportunities, you 
would help direct them to this institution?
    Mr. Barram. Sure, absolutely.
    By the way, when you contact us, if you would tell us--is 
it the Kentucky what for the blind?
    Mrs. Northup. Well, the meeting was with the partnership, 
Kentucky Printing House for the Blind. It is where the United 
States prints all the Braille printing for all the schools 
across the country, and Kentucky Industries for the Blind, they 
are associated.
    Mr. Barram. Okay. Do they refurbish computers?
    Mrs. Northup. Yes, they do. And it is actually the blind 
community that does a lot of the refurbishing, and they upgrade 
it so that it is able to be used by the blind community.
    Mr. Barram. Great. Sure.

                         good neighbor program

    Mrs. Northup. Okay. Let me also ask you about the Good 
Neighbor Program. Can you tell me a little more about that, 
what that does, and what it costs us and----
    Mr. Barram. Sure. We created it last summer after working 
on it for a while--here is what used to happen. In lots of 
cities, cities would have business improvement districts, and 
they would be private-sector people who would come together 
under the auspices of the city often to keep their downtown 
clean, safe, and vital. Our buildings and our agencies are 
often downtown, and we would participate--we would be 
cooperative, but we could never participate financially. We did 
our own stuff on the side.
    And it was always a bit of a bone of contention that we are 
a pretty big landlord in lots of cities--that we felt we were 
not as good a neighbor as we could be. So we researched it and 
found a way that we could participate with these business 
improvement districts through this Good Neighbor Program so 
that things that we would do otherwise, we would do in 
conjunction with the way they were doing it, and it has been 
incredibly well-received.
    We signed some memorandums of understanding with a number 
of cities saying we are committed to do this. We would 
participate on boards and commissions that they have set up to 
work on this. So it has really worked very well so far, and we 
are not spending any money that we would not otherwise spend.
    Mrs. Northup. Well, where in the budget--what money would 
you have spent? Is it from the rents?
    Mr. Barram. It is money that we use to operate our 
building's security----
    Mrs. Northup. So in fact, I mean, could that help explain 
the overrun?
    Mr. Barram. No, unrelated. We would do this, and we will do 
this same work. We are just doing it in a little different 
context that works better with the downtown communities.
    Mr. Kolbe. We will come back to you, Mrs. Northup.
    Mrs. Meek.

                             post-fts 2000

    Mrs. Meek. Thank you, Mr. Chairman. I welcome the agency 
here this morning, particularly Mr. Barram.
    I have questions and concerns very similar to my colleague 
from North Carolina, Mr. Price. I have received information 
from the people I serve in 10 communications areas that they 
are very upset with your new policy and they feel there is 
going to be quite a bit of confusion, Mr. Woods. And of course 
my colleague has spoken about that, and I won't take up a lot 
of time, but I do want you to know that I, too, am concerned. 
And I notice from my readings that the Federal agencies have 
the same concern.
    So I am sure you are going to in some way deal with that, 
help me to come to some closure in my mind as to how that is 
going to be resolved. But I did hear you say that it is going 
to be the best benefit of the Federal Government to go to your 
new policy. Am I correct?
    Mr. Woods. I believe that is correct. I might add that we 
are in a 30-day review period in which Chairman Burton has 
asked us to sit with the industry and with staff in his 
committee and talk about this issue. We believe there are some 
areas where the industry can still get together.
    In all fairness, this will not make everybody, I think--as 
Congressman Price puts it, will not make everybody happy or 
elated over there, but the Government's best interest is, to 
move ahead.
    We are paying, I believe, prices in the local market that 
are way too high, and it is time to get on with that. Agencies 
are really unhappy about the issue of the delay. And, by the 
way, they have spent these last 3 years working with us to 
develop these policies, so they have a lot of ownership, but 
they are anxious to move on.

                              fast program

    Mrs. Meek. My next question has to do with the FAST 
program, and it seems to be unique and you have had a new 
program in this area.
    Mr. Woods. Yes.
    Mrs. Meek. And it seems to be working well.
    I am concerned about the fact that this particular program 
doesn't seem to have a lot of support from GSA, from the people 
who work with you, and I need to know your feelings about that 
because I represent a minority area, and they feel this program 
has been very helpful. It was not designed for them, but it has 
been helpful to them in doing business with the government.
    Do you support it, or is that a stress question?
    Mr. Woods. No, it is a good question. I do support it. We 
have enthusiastically supported this program.
    It basically has three elements. The small business portion 
tends to be the one that sounds like it is the whole program. 
[Clerk's note.--The agency later modified the statement to 
read: The program uses multiple sources of supply: First, 
Federal supply schedules; second, Governmentwide agency 
contracts; and third, small business. It is the small business 
source that tends to generate the most business.] One piece, we 
tend to go to government sources of supply, such as the Federal 
supply schedule, where we go to other government contracts; and 
then a third version which goes to small business.
    The small business area has been wonderfully active and has 
done a lot of good. We are enthusiastic about it. I think at 
somestage of the process, the rumor got started that somehow 
the FAST program was going to get absorbed into another area. It has 
not. I have just named a new director of that program, and we would be 
very happy to come and talk with you about it. I think you will find 
that in spite of that misconception there, we are enthusiastically for 
it and enthusiastically backing it.
    It has been a success story. It started in one of our 
regions, and we have enthusiastically endorsed it at a national 
level. So I think your constituents can rest easy. We have been 
pushing it and pushing it hard.
    Mr. Barram. Let me add one thing. I am interested in this 
as well. As Bob mentioned, it started in one of our regions. It 
got very big very fast, and we had to make sure that that 
program fit within the law and all the regulations, and we also 
wanted to make sure that a lot of small businesses and a lot of 
minority- and women-owned businesses could be involved, not 
just a few. So it was a combination of things that made us 
change the FAST program.
    I made a decision to move it into Bob's organization 
because I believed he would be committed to carrying it 
forward; and you have my assurance that this is something we 
need to do. It is good for America and good for small 
businesses.
    Mrs. Meek. Thank you very much, and thank you, Mr. 
Chairman.
    Mr. Kolbe. Thank you, Mrs. Meek. Let me go back to the rent 
issue and the current projects----

            immigration and naturalization service in miami

    Mrs. Meek. Pardon me, Mr. Chairman, I forgot to ask a 
parochial question. The big immigration building on Biscayne 
Boulevard in Miami is in my district, and of course you know I 
fought very hard, Mr. Chairman, to keep it there. But because 
it is in sort of a, I wouldn't say inner city area, but it 
isn't at the Doral Country Club, and the INS people complained 
and they talked a lot to GSA and GSA decided that they would 
move and would try to get some property further west, nearer 
Doral Country Club. But now that they are out there, the people 
out there don't want them.
    So can you give me an update on what is going on with the 
Miami INS office? It is a very popular office and I think GSA 
has awarded a contract, or is in the process of awarding. If 
you don't know, you can let me know.
    Mr. Barram. I will have to get back with you. But I know 
that a lot of INS buildings have detention facilities in them 
and that makes them less than popular projects.
    Mrs. Meek. This one doesn't.
    Mr. Barram. I will have to get back to you.
    Mrs. Meek. Thank you.
    [The information follows:]

[Page 165--The official Committee record contains additional material here.]


                   value of federally-owned buildings

    Mr. Kolbe. You have roughly 150 million square feet, I 
think, of office and courtroom space that GSA owns. I think 
that is the approximate figure. Do you have a dollar value for 
this office space? What value do you carry on your books?
    Mr. Barram. Part of that is the Commerce building where I 
spent 2 years, and how much is that worth?
    Mr. Kolbe. Do you have a way to carry it on your books, 
market value, replacement value?
    Mr. Peck. That is a good question. We do have an estimate 
that our inventories historical value is somewhere between $10 
and $13 billion. I have to tell you, I am not confident at all 
that we have a good estimate. I have got some people looking at 
how we might come up with an estimate, because, as Dave notes, 
there are----
    Mr. Kolbe. Is that replacement value?
    Mr. Peck. That is a historical value.
    Mr. Kolbe. Okay, historical value. Replacement value would 
be a lot higher than that.
    Mr. Peck. Yes, sir.
    And it tells you something about the way we run this 
program, unfortunately. When you said before, we don't really 
run like a business, you just put your finger on one of the 
signs that we don't run like a business. Any business in this 
business should be able to tell you what the market value is.
    I have asked questions like, what is the return on 
investment we expect to get on renovating a building? It is 
very hard to get a rate of return if you don't know the value 
of the building in the first place.
    Unfortunately, I have to say this--it will only take a 
second--there are a lot of incentives in our system. Our people 
have a very good system. However, there are very few incentives 
in the way OMB does budgets and the way the government scores 
and the way Congress appropriates, quite honestly, that 
encourage our people to manage by fair market value. We sort of 
work things out.

              funds to maintain federally-owned buildings

    Mr. Kolbe. Well, part of my reason for asking the question 
is because of the rent shortfalls, to ask whether or not you 
are going to have sufficient funds to maintain the value of 
this $15 billion, whatever it might be, value of assets, that 
you have. I am looking at your list of major repairs and 
alterations for fiscal year 1998 that you have submitted to 
OMB, roughly amounting to $933 million, which you are going to 
be postponing.
    Mr. Barram. Yes, sir.
    Mr. Kolbe. What kind of impact is this going to have on the 
value of these assets?
    Mr. Peck. I think of the $933 million as about half new 
construction. But let's take the rest----
    Mr. Kolbe. New construction meaning alteration new 
construction?
    Mr. Peck. No.
    Mr. Kolbe. Because I am looking at the list of repairs and 
alterations.
    Mr. Peck. Okay. That is both minor and major. The short 
answer is, it does not have a good effect. Over a number of 
years, as far back as I can remember--I can remember this 
program for more than 20 years--we have had a structural 
problem, that tempts for us to move funds from renovation and 
repairs into other portions of the budget. We often see the 
funds that we estimate are necessary for repairs and 
alterations moved into construction, or just cut because people 
want to cut the budgets.
    That does have an effect, and we don't think we are 
accounting for it very well. Because, to go back to your 
previous question, in a business, you would say, I am wasting 
my assets, and that makes no sense. We have a rule of thumb 
which we are asking some people to look at that says that we 
should basically be modernizing about 5 percent of our 
inventory each year. That would equate to about a $500 million 
renovation program every year.
    We don't really make that mark; I am not even sure that is 
the number, given how old our inventory is. But every year that 
we don't get money to renovate, we are losing ground because, 
as you know, that means the renovation costs are more expensive 
or you end up with a building that is irreparable.
    Mr. Barram. The Federal Building Fund doesn't have enough 
money in it, and hasn't for a long time, to do the kind of 
repairs you would do if you were a private sector investor. I 
don't sense in my short time in the GSA that there is much hope 
for us to be able to change that, to get the Federal Building 
Fund to be self-sustaining and to do all the repairs you are 
talking about.
    We should do it that way. Which means that Congress has to 
appropriate to us enough money to do the repairs that you just 
described. And that is a lot of money, and I don't know how--I 
don't personally know how we get leverage to do that, because 
who is going to be interested in the repairs on the Commerce 
building or the State Department building? You know, it is just 
hard to get people's attention.

                       health and safety upgrades

    Mr. Kolbe. Well, are you going to be able to do health and 
safety upgrades?
    Mr. Peck. Yes, sir. What we do have said is we have a 
couple of priorities. What is not going to get cut is upgrades 
for security, and upgrades for health and immediate safety.
    Mr. Kolbe. What about the Americans with Disabilities Act 
(ADA) compliance?
    Mr. Peck. ADA compliance in our existing inventory probably 
has a lower priority, quite honestly, but I can't answer you 
today and say that any ADA upgrades are going to have to be cut 
because in lots of buildings, they tend to be not very 
expensive.

                     major repairs and alterations

    Mr. Kolbe. Give me some idea what projects these are--on 
this list of major repairs and alterations--that are going to 
be postponed that are not health and safety, perhaps not the 
ADA kinds. What are we postponing?
    Mr. Peck. In most of the projects we are talking about, 
major building upgrades, which means lighting, heating, 
ventilation, air conditioning systems--that is, the basic, huge 
costs you go through when you upgrade a building; changing the 
basic building systems--you know, utility systems. That is most 
of what we are talking about doing here.
    Mr. Kolbe. What you showed us the other day at Commerce, 
the new EPA wing that had been renovated; it is that kind of 
thing? I guess you have already got the money for the other 
wing that we walked through. But it is that kind of thing?
    Mr. Peck. Yes, sir. And I guess one other important point 
that I touched on, we had taken space that at one time was 
built in the 1930s for the Post Office Department, and we 
renovated it for EPA. We have more people in that space now 
than Post Office ever did because part of the renovation was 
taking out interior walls, reorganizing the space, and we have 
a more efficient building. That costs you money. And as we 
downsize, we have an opportunity to save money in this program 
by giving up leases, for example, and putting people in vacant 
space in Federal buildings; but it costs money to move them and 
costs money to renovate the buildings.
    Mr. Kolbe. Thank you.
    Mr. Price.

                             post-FTS 2000

    Mr. Price. Thank you, Mr. Chairman. I appreciate the 
opportunity to continue questioning here on this post-FTS 2000 
contract.
    The earlier discussion we had I think makes less clear than 
it should what the reasons for this change are on the merits. I 
understand the political pressure from a prominent member of 
the other body; that has been dealt with in the press. Your 
answer, to my mind, does not fully explain on the merits why 
the change in this contracting procedure is justified, and I 
wouldn't say I got a direct answer about which class of 
carriers it might benefit.
    But let me get at this maybe another way. What kind of 
process are you going to set up for providers who might be 
prevented from bidding on portions of this contract at the 
outset, but who are expected to interview markets before it 
expires? My layman's understanding is that under the former 
procedures, they would have had opportunities they may not have 
under this procedure.
    I also understand there may be problems with Federal 
procurement law in this regard, because the providers who bid 
on these long distance contracts and then have the local 
service options that you are planning to create, might be 
awarded the local service business without the agencies, 
conducting competitive evaluations for that local service at a 
particular and later date. Can you help me get some 
clarification on that?
    Mr. Woods. Yes, I can, and I also might extend an offer. 
This is an awfully complex subject that has evolved over the 
last 3 years, and if at any point you would like us to come and 
sit down and go through that in detail, we would be happy to do 
that.
    Mr. Price. I understand it is complex and it has evolved 
over the years, and that is why I ask the question, because 
apparently there was an end result to that process and it was 
turned around on a dime.
    Mr. Woods. Let me go back to the fall and explain 
thechange. I think explaining the change out of context is very 
difficult.
    Last fall, the approach had three elements to it. It had 
what was called 2001, which was in essence the walled-off part 
of long distance that will be bid, looking very much like 
today's contracts. 2001 would run 4 years, with four 1-year 
options.
    There was a second phase which you referred to earlier in 
your questions about the metropolitan area acquisition. We are 
paying in today's market about $17 per line for local service, 
and we think that--is at least twice what it will be once 
competition hits that market.
    So we have got a tremendous potential in that area for 
price reduction. So we wanted to go ahead and hit those major 
metropolitan areas and get the savings, 80 percent of the 
savings that the government should reap right away.
    That was also to be about a 5- to 8-year contract period. 
We would do those competitions over about a 1\1/2\ to 2 years 
in the MAAs; and then about 2001, we would start a three-prong 
approach which went with this end to end service we are talking 
about, allowing any carrier that was ready to do it at that 
time.
    That third prong was meant to deal with this issue of we 
get great prices or great services and if new things show up in 
the market or new players, we would be able to take care of 
that competition.
    The debate is around whether you should allow 2001 and MAA 
providers to provide services in the other arena at an earlier 
date. In other words, in 2001, let's say one of those winners, 
vendor X, is a long distance carrier. And in 2 years they can 
provide local service in 20 major markets at a very competitive 
price. The question that was raised is, why won't you let 
providers at least propose that when they are ready?
    Mr. Price. Well, the answer might be that it might preclude 
other vendors from bidding in a competitive way when those 
contracts are actually at issue.
    Mr. Woods. Right. Well, let me take it to the local side as 
well. In the metropolitan area, the same question, in reverse, 
shows up.
    If local providers are providing you service, and they now 
can start providing you effective long distance service, but 
not nationwide, not to every site, not to every Federal 
location, why not allow them to offer you end to end services 
when the industry is ready?
    We still hold out the idea that if you did those, if you 
allowed those options in each arena to happen, we would still 
at some point, 2001, 3 to 4 years out, still want to go to the 
end to end because ultimately that is what the customer wants 
and ultimately that is where the industry is headed. It is a 
question of when they are going to be there. So the issue was, 
do you open up the scope of each of those, of 2001 and the MAA 
area and go from there? So that was really what the debate was 
about.
    In the discussion with OMB, with staff from up here who 
raised the issue--FCC, the Department of Justice--the policy 
conclusion was, yeah, it is in the government's best interest 
to let other players play as soon as they can play, because 
that will help drive prices down, bring competitors sooner. So 
that was the reasoning behind this.
    So it is our belief you are bringing more competitors 
sooner to the market in the latest policy refinement to the 
strategy.

               encouraging telecommunications competition

    Mr. Price. Okay, but, in effect, are you also eliminating 
providers who maybe aren't prepared at this moment but are 
expected in later years to enter these new markets and offer a 
greater range of services? In effect, are you doing that?
    Mr. Woods. I don't believe we are, Congressman Price.
    First of all, the change between last fall's strategy and 
the current policy change does not change the bidders in either 
arena. The same players can play now as could play then. The 
question becomes when can they offer these other services that 
both segments of our business say are ready and are over the 
horizon.
    Now, I have to admit to you, I don't know how far over the 
horizon it is. I don't know whether this is a clear vision or 
this is a mirage; and I think, from the government's 
perspective, you have to stay flexible. You have got to allow 
for the fact that the industry is going to invest as the 
economics dictate.
    So the idea here was to allow them the option. Three or 
four years into this next generation, we are still going to go 
on the end to end contracts. At that point, I hope that the 
industry has opened itself up and is fully competitive and has 
met the law. At that time, we will have full-fledged, 
everybody-plays kind of competition. That is ultimately where 
we want to go.
    My worry is that this price profile that we have been on 
gets to level out and increases, and the government is going to 
have a big bill show up on its door, and our customers are 
nervous about that.
    Mr. Price. Mr. Chairman, I know my time is up. I would ask 
for the record that you clarify the procurement implications 
that I inquired about.
    I would also like to stress, in closing, that there is also 
the issue here of timing and urgency, and this previous FTS 
2000 process took years to get fully in place. We have now a 
prohibition in law, as I understand it, from extending the 
current contract beyond 6 months. So I also would appreciate 
your clarifying for the record what you propose that we do 
between the time of the expiration of the contract and the 
point at which the new contract is fully implemented.
    Mr. Kolbe. Mrs. Northup.
    Mrs. Northup. I am finished.
    Mr. Kolbe. Ms. Meek.
    Mrs. Meek. I pass, Mr. Chairman.

                   changes in post-fts 2000 strategy

    Mr. Kolbe. Well, I am going to talk to some of the things 
you talked about in this telecommunications contract, a 
slightly different approach to some of the questions you asked 
here. I just want to get a few things clear here in my own 
mind.
    You had an original proposal. Based on the concerns that 
were expressed by Congress, you came back with some changes, 
which most of the Committees approved in the Fall, last 
September. And now you have come back with yet another revision 
to it based, apparently, on one Committee and Committee 
Chairman's concerns. I just want to know what market 
conditions, or changes or strategies, occurred between the 
strategies which you presented to us in September of 1996 and 
February of 1997, why that got changed to FTS 2001.
    Mr. Woods. I don't think it is so much market conditions, 
Mr. Chairman. I think what we are dealing with here is Congress 
passed the Telecommunications Act last spring, a very complex 
law. The industry is still reacting to it. Each of us who buys 
from that industry is trying to figure out where the industry 
is going, how we might take advantage of it.
    I have got to tell you the advances we have made in the 
last 8 years in this industry are tremendous. It has been a 
wonder to watch. But I don't think we have seen anything like 
we are going to see in the next 3 or 4 years.
    The law is not set up for a balanced approach between two 
parts of the industry. It is not an issue of what is fair; it 
is an issue of what the law is.
    The law says that local exchange carriers must open up 
their market to free competition before they can offer long 
distance in their own territory. It also says, basically, that 
the long distance carriers can go ahead and start offering 
service. Now, whether you think that is a fair deal or not gets 
back to the Act itself, and I believe it is crafted in the only 
way it can work.
    Mr. Kolbe. So was your change based on analysis of the law 
that should, well, we--GSA--didn't really get it quite right?
    Mr. Woods. I think that is fair. It was not market 
conditions. It had to do with somebody coming back and saying, 
hey, look, you are taking the opinion that this has to be a 
level playing field. The Act does not say that. The Act says 
this is the way it will progress.
    We work closely with the industry. We believe everybody was 
trying to make that agreement work last fall, and there was a 
lot of compromise done there. But the issue of law raises an 
issue that, in effect, becomes something we have to respond to; 
and we didn't respond to it.

                     expiration of current contract

    Mr. Kolbe. The current contract expires on December 31st of 
this year, is that correct, or next year?
    Mr. Woods. It is December 8th, 1998.
    Mr. Kolbe. Thank you. One option would be just to let it 
expire and let agencies go out and get their own contracts, is 
that correct?
    Mr. Woods. That is an option. That was, in fact----
    Mr. Kolbe. Was that reviewed? Considered?
    Mr. Woods. Yes, it was. It was one of the basic strategies 
looked at by the agencies when they did their feasibility 
study.
    Mr. Kolbe. And what? It was decided it was not cost-
effective or you would not get the best value for the Federal 
dollars?
    Mr. Woods. For instance, the State of Maryland pays about 
12 cents a minute for long distance. We pay 5. And the reason 
we pay 5 is because we bring 6 billion minutes of switched 
voice to the market a year, and that incentivizes the people in 
this industry to bid it.
    Further this industry is extremely capital intensive. Once 
you get the customer, once you set up the billing, once you set 
up the process, the marginal costs are extremely low; and, as a 
result, volume buying counts, and it counts in a big way.
    The other example I would give you is local service--so you 
don't think this is just a long distance phenomenon, the local 
service we bought competitively back in 1989 here in the 
Washington, D.C., area we buy at $8 a month. We average over 
twice that in the rest of the country, and that was a direct 
result of competition. It works, and we are getting ready to 
let that set of contracts again here in another 2 years. That 
is going to be a very competitive procurement, and we think we 
will bring some good prices.
    Mr. Barram. Let me add two things.
    One, in 3 years, I think we are going to look back and 
wonder what happened to the companies that we saw in 1997, 
because there are going to be so many different alignments of 
people. I wouldn't be surprised if Disney owned a long distance 
company and that is where I got my long distance from. I can 
see a lot of things changing like that.
    Second thing, because we have these two kinds of 
procurements, the MAA, metropolitan acquisitions and long 
distance, each of those has required services and optional 
services. Everybody can participate in this contract one of 
those two ways with the ability to go on the optional services 
when they are ready and when they are legally allowed to.
    So it is going to be complicated, and incumbents are going 
to figure out how to do it, how to make money with it, but they 
are going to have to figure that out with 98 percent of 
business they have outside of the government.

                         extension of FTS 2000

    Mr. Kolbe. If you don't get this resolved by December of 
next year, you have the authority to extend the current 
contract, can you not?
    Mr. Woods. Actually, there is some point of law there that 
says we are capable up to about 6 months afterwards. And I 
don't know if this is a practice or a hard fact of law, but the 
Senate side believes that their delegations of the agencies 
extend to 10 years for telecommunications with something like a 
6-month option. I don't know if that is going to be a problem 
or not; but it is clear that, whether the law is a problem or 
not, we will not be in the greatest of negotiating positions in 
a sole source extension. So we do not want to get caught in 
that for any extended period of
    time.
    Mr. Kolbe. If you did, what is the monthly value of the 
contract?
    Mr. Woods. These things are running about $50 million a 
month. That is the long distance side, and that includes 
everything from----
    Mr. Kolbe. Yes, the current one, the local service does 
not.
    Mr. Woods. Right. The local service is bought locally.

                            RFP for fts 2000

    Mr. Kolbe. Are you going to have an RFP for this new 2001 
after, what, April 2d or something like this?
    Mr. Woods. We are prepared to go April 2d. Chairman 
Burton's request would run that to about the 1st of May, and we 
are prepared either way.
    Now let me caveat that by saying I have looked at what are 
the most likely scenarios of what we may end up withafter that 
working session with them, and my sense is we can be ready by the 1st 
of May to release our RFP.
    Mr. Kolbe. How long are you going to give industry to 
respond?
    Mr. Woods. It is typically 120 days.
    Mr. Kolbe. Something as complicated as that, is that 
adequate?
    Mr. Woods. We will see. They can come back with questions. 
When you put the RFP out, you think when you put the draft out 
you have received all the questions. When the real ones come 
in, it takes some time to deal with those.
    Mr. Kolbe. But you are confident you are on a time frame 
that is going to allow you to get the RFP out, analyze all the 
responses, do the necessary work, award a contract and have it 
in place prior to the expiration of the current contract.
    Mr. Woods. Yes. We are shooting for this time in 1998. 
Remember the other contracts won't expire until the end of 
1998. So we will have about 6 months to plan a transition and 
have about 6 months to 12 months to do it. So we will have 
about 6 months ahead of the expiration to start our transition, 
and it will take 12 to 18 months.
    We have 1.7 million customers. It is not a trivial 
operation. It is complex. It is expensive. But what makes it 
worth it is the competition keeps those prices coming down.

                    courthouse construction program

    Mr. Kolbe. Thank you very much, Mr. Woods.
    Back to construction of courthouses. Let me just ask, on 
courthouse construction, the 1997 appropriations bill required 
that any courthouse project submitted for 1998 has to conform 
to revised design guide and be accompanied by a courtroom 
utilization study. Did the projects--I know we are not 
proposing new construction now, but did the projects GSA 
submitted meet those requirements? It is a relevant question 
because we are going to face this in the future, possibly this 
year.
    Mr. Peck. Actually, the projects got stopped before we 
prepared the space utilization study. In other words, when we 
went to OMB early in the year, we knew we weren't going to do 
the construction projects, so we do not have those.
    Mr. Kolbe. So you do not have any utilization studies. If 
Congress decided in its infinite wisdom, we do not have----
    Mr. Peck. We can do those. They do not take that long to 
do. But we don't have them ready to go now.
    I would also note that a further complicating factor here 
is that the court just released its revised----
    Mr. Kolbe. The Judicial Conference.
    Mr. Peck. Yes, sir, I'm sorry--revised 5-year plan and 
revised design guide just last week. March 16th was the date of 
the design guide release.
    Mr. Kolbe. So did you get input into that?
    Mr. Peck. The courts solicited comments from us and we gave 
them comments, and then there were discussions back and forth. 
We did not see any drafts of the revised design guide, and we 
only saw the final version last week. I got a briefing last 
week of what they had done.
    Mr. Kolbe. Doesn't sound that they were too solicitous of 
the solicited comments.
    Mr. Peck. I would say that a lot of our comments did not 
make it into the design guide.
    Mr. Kolbe. Tell me about this design guide.
    Mr. Peck. The design guide is basically a programming guide 
and tells you how a courthouse is supposed to work. It starts 
with general issues. You have to provide a place for the 
marshals. You have to provide a holding cell. You have to 
provide secure circulation for the judges: that is, separate 
from secure circulation for prisoners and separate for the 
circulation of the public. That is basic, and you can design in 
various different ways.
    It also gives dimensions, gets very specific on dimensions 
of a courtroom itself; and it has a square footage for a 
courtroom and tells you the difference between a district 
judge's courtroom and a magistrate's courtroom.
    Mr. Kolbe. Judges and managers of courthouses are making 
those decisions, not someone with the expertise in construction 
and building?
    Mr. Peck. I will tell you my personal opinion.
    Mr. Kolbe. Careful, there may be Judges listening.
    Mr. Peck. Well, this can cut both ways on the design guide; 
and I have talked to architects about it and people who build 
these things, too. I don't know how many Judges would agree 
with this.
    One, everyone agrees that a courtroom should provide a 
dignified setting for the administration of Justice, that in 
our system we don't intimidate defendants or plaintiffs but we 
want to provide----
    Mr. Kolbe. This is slightly more specific than that, 
though.
    Mr. Peck. That is right. Starting from that premise, it 
seems to me not the best way to design a space, to say the 
ceiling height has to be this height rather than that height, 
or that 2,400 square feet is always the right size.
    I will tell you, in all honesty, I think that sometimes the 
ceiling height should be higher than the design guide for two 
reasons. One is, if you have a very long, narrow space you may 
need a higher ceiling than if you have a square space. That is 
what the architects say, design proportion.
    The other is we regard the minimum ceiling height as a 
maximum, and it makes for an inefficient building in this 
sense. There is generally 12 feet between the bottom of one 
slab and the bottom of the next slab. Once you design a 
courtroom that is more than 18 feet high, you have left 
yourself with space that you can't use.
    What we had hoped to do is have a courtroom that is maybe, 
with equipment and everything, two stories in height. We would 
like to put two levels of offices around each of those 
courtrooms, because you can work with the 12-foot height. We 
have done that in some cases. In some places, the courtroom 
heights make our buildings inefficient.
    The bottom line is, I think it is a mistake in any design 
guideline document or zoning requirement to have firm square-
foot requirements.
    Mr. Kolbe. I think I agree with that. The report last year 
required that you and the Judicial Conference and OMB work 
together on this design guide, but it sounds like you were only 
peripherally involved, or provisionally.
    Mr. Peck. Well, they solicited our comments; and we 
provided them.
    Mr. Kolbe. I think I understand what you are trying to say.
    You know, when you took me out and we looked at the 
Alexandria Courthouse, you spoke with some pride about the 
process you used in the construction--I forget what you called 
that--where everybody works as a team.
    Mr. Peck. Partnering.
    Mr. Kolbe. Shouldn't we step back one step from that and do 
partnering in the design of these things?
    Mr. Peck. Well, on each individual project we do partner. 
If you are asking should we partner more on the basic design 
documents, I think the answer is yes.
    And I have to say the courts would say there is another 
design document out here which we call PQ 100, our basic 
standard for building Federal offices, which has a lot of 
detailed systems things. I think the courts would probably say 
they would like to partner more on that. We have talked to them 
at some point about combining both guides into one document, so 
architects and contractors don't have to keep going back and 
forth.
    Mr. Kolbe. Do you have the authority to enforce the design 
guide once it is adopted by requiring waivers from it?
    Mr. Peck. Well, the short answer is----
    Mr. Kolbe. I mean, if you have the Chief Judge who comes 
along and says, no, we are going to double the size of all 
these courtrooms here. Can you enforce, say no, that exceeds 
the design guidelines, we are not going to do that?
    Mr. Peck. The way that works, we take that back to the 
Judicial Conference, and the Judicial Conference then enforces 
its own design guide. In that sense, the 2,400 square foot 
guide sometimes works to keep our courtrooms smaller.
    But this is true when we deal with Federal agencies, too. 
Formal authority is one thing, and actual authority is 
something else, and not only because we want to partner with 
Federal agencies and with the court, but there is always a 
process in which you negotiate these things out.
    I don't think we would have a very happy situation if we 
said we in GSA know how to design a courtroom and then imposed 
that on the Judges. They do know how courthouses work, better 
than we do, so there should be a dialogue back and forth. I do 
say, however, we are the holders of the construction budget; 
and, you know, our emphasis is on architectural quality and 
holding to budget.
    May I make one or point about budgets?
    Mr. Kolbe. Sure.
    Mr. Peck. One more thing we need to do, to go back to our 
original talk about how we operate this fund, is that all of us 
will be able to focus on project budgets--and we are going to 
begin providing you with information on this.
    We have focused a lot in this program on initial 
construction costs. But we run a dynamic program, and in the 
long run sometimes we build a building which meets our time 
schedule and construction schedule only to find that the rents 
we can charge will never, in a business sense, cover the cost 
of the building.
    So we are in some cases building structural deficits into 
the Federal Buildings Fund, and that is not something a 
business would ever do, and it is not something we should do. I 
hope we can work together this year with you and the Committee 
staff to find a way we can put that issue on the table when we 
come up with budgets on construction projects.
    Mr. Kolbe. Well, I would say that is a rather important 
issue that we should be dealing with. It goes back to my 
original comment about how we are making these decisions, 
whether we are making them on sound business principles. What 
you are saying is we are not.
    Mr. Peck. Right. What we focused on this year is the 
budget, so we meet our budget on the construction. Just 10 
years out we are all going to be wondering why we are losing 
money on a building we built within budget.

                               conclusion

    Mr. Kolbe. The Judicial Conference sent us a letter on 
March 13th, addressing the decision of the GSA to request no 
funds for construction. We will place that letter in the record 
at the appropriate place.
    I thank you all for coming today and for the testimony that 
you have given, and this subcommittee will stand adjourned.
    [The March 31, 1997 letter from the Judicial Conference, 
questions submitted for the record, and selected budget 
justification materials follow:]

[Pages 177 - 422--The official Committee record contains additional material here.]


                                           Tuesday, March 18, 1997.

              NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

                               WITNESSES

JOHN W. CARLIN, ARCHIVIST OF THE UNITED STATES
LEW BELLARDO, DEPUTY ARCHIVIST
ADRIENNE THOMAS, ASSISTANT ARCHIVIST FOR ADMINISTRATIVE SERVICES

                              Introduction

    Mr. Kolbe. This meeting of the Subcommittee will come to 
order.
    We are very pleased this morning to welcome Governor 
Carlin, the Archivist of the United States at the National 
Archives and Records Administration. Welcome, Governor. We 
appreciate your being here this morning to testify before the 
Subcommittee. Some of the issues that I hope we will be able to 
touch on today and that you will discuss and we will discuss 
include your need for new storage space, your policy of making 
national historical publications and record grants, the dispute 
with the IRS over the preservation of records and the storage, 
and something else that has received a great deal of interest 
and coverage recently and that, of course, is the search for 
records that deal with Jewish assets in Swiss banks.
    When I spoke with you in my office a few weeks ago, you 
mentioned that the Archives was commissioning a study of 
renovating Archives I and expanding Archives II. That report 
was just delivered to us last night and I know we would like to 
hear from you about the results of that study and what type of 
request you may be making as a result.
    At the same time, what has been done in regard to weeding 
out non-essential documents and putting them into non-paper 
form. I know that initially, it may be more costly to put these 
documents in the computer disk or the like, but I find it hard 
to believe that it would not be less costly than perpetually 
storing all documents in paper form. There are so many new 
advances in technology today that would allow Archives to store 
materials in a less-costly form and at the same time make 
resources available for distribution over the Internet and CD-
ROM, et cetera.
    Let me turn to Mr. Hoyer to see if he has any opening 
remarks and then, Governor Carlin, we will let you make your 
opening statement.
    Mr. Hoyer. Thank you, Mr. Chairman, and Governor, we want 
to welcome you to the hearing. I am pleased that this year we 
are having a hearing with reference to your agency, which is a 
critically important one, for our country and, frankly, for the 
world, which is vitally interested in the historical 
development if the United States. They use the United States 
and its principles and its documents and its philosophy and its 
history as a model as new democracies around the world are 
developing.
    The Chairman has, I think, referenced most, of not all, of 
the issues that we are going to be discussing in this hearing 
and we are pleased to hear from you on those issues. Obviously, 
they are very critically important. In particular, of course, I 
know that we are going to talk about the need to renovate and 
to ensure to technical state-of-the-art ability to maintain 
records which are beyond imagination in terms of their value 
not only to this country, but as I said, to the world.
    Recently, Mr. Statler of my office had the opportunity of 
going down to Archives I, Main Archives, and has reported to 
me--and I look forward to doing that myself. Mr. Chairman, I do 
not know whether you have had the opportunity to visit the 
physical facility here in town----
    Mr. Kolbe. Not for many years.
    Mr. Hoyer [continuing]. But we know that we have to give 
that attention and we know that it is going to be expensive and 
we know that there has got to be a lot of planning that goes 
into it. This Committee needs to work with you and with the 
administration in planning for that in the short term, getting 
that facility renovated and up to speed, and, as well, for 
anticipating the needs as we contemplate the filling up of the 
facility in College Park in the relatively near future, within 
the next decade. So we will want to discuss that, as well.
    Governor, again, I welcome you. Mrs. Meek and I were 
walking over together, as you saw, and Mrs. Meek was, if I can 
speak for her, saying that you had visited her office. She said 
to me, you know, that man is really enthusiastic about what he 
is doing. I agreed with her and I think that that is to the 
benefit of the Archives and to the country. Welcome.
    Thank you, Mr. Chairman.
    Mr. Kolbe. Governor Carlin, please go ahead. As you know, 
of course, your full statement can be placed in the record, so 
you may summarize, if you would like, and then we can go 
directly into questions.

                  Summary Statement of Governor Carlin

    Mr. Carlin. Mr. Chairman and Congressman Hoyer, 
Congresswoman Meek, I am obviously pleased to have this 
opportunity this morning on behalf of the National Archives and 
Records Administration to discuss our 1998 appropriations 
request and the issues which you have addressed in your opening 
comments.
    I have with me today Lew Bellardo, who is my Deputy 
Archivist, and Adrienne Thomas, who is Assistant Archivist for 
Administrative Services.
    Thank you for taking the full statement. I will summarize 
in a brief statement at this point.
    I do want to offer, first of all, Mr. Chairman, 
congratulations officially from the Archives to you for your 
new Chairmanship. We have certainly had a good working 
relationship in the past with Mr. Hoyer and Mr. Lightfoot and 
look forward to an equally enjoyable experience in a joint 
venture to do what needs to be done for the records of this 
country.
    As we discussed with you several weeks ago, Mr. Chairman, 
the National Archives and Records Administration is very small 
in the context of the Federal budget but we are a public trust 
on which our democracy depends. We enable citizens to inspect 
for themselves the record of what government has done and 
enable officials and agencies to review their actions and help 
citizens hold us all accountable for our actions.
    As we say in our mission statement, NARA ensures ready 
access to the essential evidence that documents the rights of 
American citizens, the actions of Federal officials, and the 
national experience. We need look no further than the ``Nazi 
gold'' issue to see the importance of preserving records and 
making them accessible for public examination. The entire world 
is focused on the impact that open, accessible Federal records 
are having on writing this latest chapter of the Holocaust 
tragedy.
    But it is the records that do not get the headlines that we 
also need to protect--the military service records from which 
we answer two million reference requests a year from veterans, 
the census and ship passenger records that hundreds of 
thousands of citizens pour over each year to trace their family 
histories, and the sampling of digitized records that we now 
make available on the Internet that are being accessed by 
thousands of students, teachers, and citizens every month. The 
American people rely on our records, have a right to our 
records, and we must be vigilant in preserving and 
providingaccess to those records.
    While unquestionably important, the mission of the National 
Archives and Records Administration is increasingly difficult 
to carry out. Every day, more records are created and new 
history is being made. While the era of big government may be 
over, there is no corresponding decrease in the number of 
records. When Federal programs shut down and military bases 
close, it means we receive records immediately that we would 
not have normally received until 25 or 30 years down the road. 
When government grows, archives grow, and when the government 
shrinks, archives grow.
    This relentless growth has forced us to devote nearly half 
of our total budget for space just to store records. We are at 
the point where building rents and mortgages are eating up 45 
percent of our budget, and when combined with personnel costs, 
the total is 90 percent of our operating expenses. That leaves 
us just ten percent for everything else, from communication and 
information resources management costs to training. That is why 
our base is so important and why I discussed it with all three 
of you when we met privately.
    The President's 1998 budget protects our base by funding 
four unavoidable budget mandates, facility rate changes, which 
include utility and contract cost increases; operation and 
maintenance costs for the new Bush Presidential Library; the 
conversion of many of NARA's intermittent employees to regular 
full- and part-time employment; and the 1998 pay raise.
    The President's budget also includes funding for priority 
initiatives to more appropriately protect, preserve, and 
provide access to the valuable holdings entrusted to us. First, 
through the repairs and restoration account which the Congress 
established in fiscal year 1996, NARA can undertake ongoing 
repairs, alterations, and improvements to Archives facilities 
and Presidential libraries. Properly maintained buildings are 
our first line of defense to preserve our records and our 
history. Additional funds will be used to vacate the New York 
Federal Records Center, which was located at the Army's 
Military Ocean Terminal in Bayonne, New Jersey, scheduled for 
closure under the base realignment closure process.
    Second, our technology infrastructure, critical for 
carrying out our several initiatives in our new strategic plan, 
needs upgrading.
    Third, we need to take steps now to preserve the audio-
visual heritage of the United States. Much of it is in danger 
of being lost because many of the film images are on an 
unstable base and many of the video and audio recordings were 
made on formats that are now obsolete, and we do have some 
examples we brought with us. In the discussion, if there is 
interest, we can certainly share those examples with you.
    Finally, the President's budget includes funds for grants 
that I award on the basis of recommendations from the National 
Historical Publications and Records Commission. NHPRC grants 
finance research and development projects and foster 
partnership programs with State and local governments which are 
trying to carry for the many records generated by Federal 
programs that are administered by State and local units of 
government.
    With our 1998 budget request, we can begin to address our 
strategic priorities and continue to provide the government and 
its citizens ready access to essential evidence.
    I would be happy at this time to explore, Mr. Chairman and 
members of the Committee, the issues you have raised as well as 
any others that you would like to raise.
    [The statement of Mr. Carlin follows:]

[Pages 427 - 432--The official Committee record contains additional material here.]


                             outyear funds

    Mr. Kolbe. Thank you very much, Governor.
    Let me just start by asking you this question, just for the 
record, on the budget itself. Your fiscal year 1998 analytical 
tables do not show additional funds in the out years for 
Archives. Has that been discussed with OMB and what was the 
reaction?
    Mr. Carlin. The out years for what particular----
    Mr. Kolbe. The analytical tables, the OMB, it does not show 
anything in out years for Archives.
    Mr. Carlin. We just do not show it.
    Ms. Thomas. And it has not been discussed with OMB.
    Mr. Kolbe. Is that the practice, you never have done that, 
shown out years?
    Ms. Thomas. It varied from year to year, depending on what 
the instruction from OMB was.
    Mr. Kolbe. That is, I think, unusual, is it not? Again, you 
have not had discussions with OMB?
    Mr. Carlin. No, we have not.

                     archives buildings renovations

    Mr. Kolbe. All right. Let me turn to the issue of the 
renovations here, because we just got this--actually, when I 
said yesterday evening, this came Friday evening. What we did 
get yesterday was your report, your IRS and NARA report on the 
differences between you both and we will come to that later.
    But on this, would you care to discuss the different 
options that you have for renovations and what discussions you 
might have had with the OMB about this and where you think we 
are going to go with this, what you are going to recommend to 
us.
    Mr. Carlin. This is a project that is driven by the 
difficulties we have with the Charters of Freedom in preserving 
them, the encasement issues that have been public.
    Mr. Kolbe. That go beyond that.
    Mr. Carlin. Oh, yes. But it goes beyond that to include 
access for the handicapped to the Main Building, and then, 
obviously, an endless list of improvements to a facility now 
60-plus years old. A lot of what is in that building is 
original.
    The Congress received a set of recommendations, I believe, 
two years ago and felt that it was too comprehensive, too 
expensive, and directed us to look from last year's hearings at 
other options, and that is the report----
    Mr. Kolbe. May I interrupt you?
    Mr. Carlin. Yes.
    Mr. Kolbe. Since I was not here, what you had, was that two 
years ago, did you say, was just the option that now is your C-
2, your most expensive option?
    Mr. Carlin. No.
    Mr. Kolbe. No?
    Mr. Carlin. It is less than. None of the three options that 
are presented are as massive as that one.
    [Clerk's note.--It went beyond any of the three options 
that are presented, by including what amounts to a total 
gutting of the records storage areas to enable us to achieve 
the same quality of storage as we have at Archives II.]
    Mr. Kolbe. As that one was.
    Mr. Carlin. The problem with that one, and it is a very 
good point that was shared with us, was that in the end, we 
lost too much space to records. We would have, yes, a totally 
remodeled building, it would have been accessible, and the 
encasement issue would have been addressed. But we would have 
lost a very significant amount of space for the storage of 
records. It was concluded that that was not acceptable.
    So the three choices brought back for further dialogue and 
then action in fiscal year 1999 range from the more modest 
approach, where we address encasement, the issue of access, and 
part of that will include a significant renovation of the 
rotunda area and some very modest improvements, highest 
priority in other parts of the building. Then the two other 
options simply take it closer to the original report but 
protects, as much as possible, the space for storage of 
records.
    [Clerk's note.--The two other options address in a 
significant way improvements in public use space, replacement 
of aging building systems, and elimination of all existing fire 
code problems.]
    The report also lays out how we would get from this project 
and actually through to completion, which is why it links with 
Archives II and the storage that would have to take place 
during renovation. In essence, what we say is the most cost-
effective direction is to address two problems, one, the 
renovation of Archives I, and two, the long-term space needs of 
the Archives. Expanding at Archives II is cheaper, and in the 
end, when it is all done, we will not only have Archives I 
renovated but we will have a significant space issue addressed, 
as well.
    Mr. Kolbe. Let me just see if I understand here. The 
proposal about the renovation and actually losing, it does seem 
odd. You spend all of this money, at the end of which you have 
less space, less storage space than you have, and the reason 
for that is more space turned over to public use, to public 
needs, to public displays?
    Mr. Carlin. Well, it starts with the original building. If 
you look at the history of the building, its first remodeling 
took place very shortly after the structure was initially 
started because it was obvious that the center courtyard in the 
original architectural drawings, because there was much just 
open space, there was not room for records, that they had not 
really accomplished the purpose of the building itself.
    So almost at the beginning of the history of this building, 
they went in and redesigned and put in floors for storage. When 
you go down there, there is no courtyard, but as you get back 
in the stacks, you will find very low ceilings and not the way 
it would have been done if it had been originally done as a 
facility designed with archivists having input.
    So some of the problem in this renovation and losing space 
is a product of that. It is a product of the rotunda's original 
design, where the public use space is not very efficient. We 
have exhibits, for example, that have to be built for a 
circular gallery. That does not in any way coordinate with our 
other facilities.
    One of the savings we want to get in that area is to have 
exhibits that will travel. If we can reconfigure the rotunda 
area as part of the renovation, we will be much more efficient 
in the way we use exhibit space, as well, and in this process, 
we lose a modest amount of records storage space.
    [Clerk's note.--We will also consolidate other public 
activities, including research rooms, student tour orientation 
areas, classrooms, and a theater into the area surrounding the 
rotunda, thereby improving public accessibility and overall 
security.]
    Mr. Kolbe. The option that you think is best is C-1, is 
that right?
    Mr. Carlin. Yes, because it looks at the bigger picture in 
long term.
    [Clerk's note.--It is the only option that eliminates all 
the fire code problems in the building.]
    Mr. Kolbe. How much additional space do you end up with in 
that? It is not clear to me, in looking at this, whether you 
actually end up with additional space or not.
    Mr. Carlin. If you look at the total C-1, absolutely yes, 
because the expansion of Archives II----
    Mr. Kolbe. How much additional space would you end up with?
    Mr. Carlin. Net additional space would be----
    Ms. Thomas. Approximately 466,000 square feet.
    [Clerk's note.--The renovation of Archives I would result 
in shifting 210,000 cubic feet of records to Archives II into 
the existing building at College Park. The proposed expansion 
would add about 1,000,000 cubic feet of records storage space.]
    Mr. Kolbe. In your view, that would be enough to carry the 
Archives to what, in terms of storage space, to what year, 
approximately, would you estimate?
    Ms. Thomas. At least to 2026.
    Mr. Kolbe. To 2026? That would be sufficient until 2026. 
That option is $317 million. You said you have not shared these 
renovation plans yet with OMB. When do you plan to----
    Mr. Carlin. No. This was a request that you made and so we 
brought the report to you----
    Mr. Kolbe. Right.
    Mr. Carlin [continuing]. And obviously, discussions will 
now have to take place.
    Mr. Kolbe. Yes. You intend to have those discussions with 
OMB?
    Mr. Carlin. Absolutely. I think we are not talking about a 
project that can be shouldered on just one entity's 
responsibilities. The administration is going to have to be a 
player here for this proposal to be taken seriously and we know 
that. So our first task is to bring the administration on board 
in recognizing the problem and being supportive of working with 
us and with you on addressing it.
    Mr. Kolbe. One last question in this area before I go to 
other members here. In the event that this looks too much for 
Congress to bite off, what other plans have you developed for 
storing documents and what alternatives do you have for dealing 
with these documents?
    Mr. Carlin. Well, we can take a more short-sighted approach 
and save some money, but then the space problem comes right 
back shortly after the completion of this, almost immediately. 
But that is one option. We can always store records in an 
appropriate space. We would not recommend that. Records----
    Mr. Kolbe. You mean a leased space?
    Mr. Carlin. Pardon?
    Mr. Kolbe. A leased space?
    Mr. Carlin. Well, it could be leased space, but as the 
report will show you, that is a more expensive direction than 
actually expanding Archives II because Archives II, to the 
credit of good planning and implementation, was built for 
expansion, so the mechanical, or a larger entity is already 
there. If we go off-site, regardless of how cheap--we got the 
land free here, so we did not have that expenditure--but if we 
went off-site in low-cost areas but built it to a level of 
satisfaction that we feel confident that we can assure you the 
records can be preserved, it would cost more.
    [Clerk's note.--Leased space would be our alternative if 
new construction were not authorized.]
    There are no spaces in the area sitting and waiting to take 
in archival records. If we worked with somebody to build space 
on a 20-year lease, the space would have to be built. It is 
very unlikely that anyone would build a building to our 
standards for a seven-, eight-year lease. That is not 
realistic.
    So that is why--I will be honest with you, and Adrienne 
will back this up. When I came on board and first learned about 
this problem, I said, we are not expanding Archives II. It has 
got to be cheaper to go elsewhere and build a less-expensive 
building. I have been forced to conclude that that is not the 
cheapest route. The best route is to build off of the 
investment that we have already made at Archives II.
    Mr. Kolbe. Thank you.
    Mr. Hoyer.
    Mr. Hoyer. Governor, in point of fact, of course, that was 
anticipated, was it not, so that----
    Mr. Carlin. Yes.
    Mr. Hoyer [continuing]. In fact, it is a modular 
construction with the mechanics, as you point out, being in 
place to interface with the expansion?
    Mr. Carlin. That is true, plus administrative staff. We 
would just simply be building on additional stack space.
    Mr. Hoyer. In addition, downtown, Archives I, in terms of 
why we do not get a lot of additional space, as you point out, 
the Archivist was not on board when the building was built----
    Mr. Carlin. That is correct.
    Mr. Hoyer [continuing]. So there was not an archivist to 
oversee that.
    Secondly, as I understand it, the atmospherics, which is 
not the correct word, but the environment, the air, the 
humidity is not being handled properly to protect the kind of 
valuable documents that we have there at this point in time.
    Mr. Carlin. That is correct.
    Mr. Hoyer. These low ceilings bring a lot of humidity into 
this building at this point in time. So one of the problems is 
the mechanics of Archives I, not Archives II, which obviously 
is the state of the art, the best in the world. The mechanics 
of Archives I do not work particularly well. So not only do 
they have to renovate in terms of space, they have to install 
additional air handling and other capabilities to make sure 
that that building works as an archives.
    Mr. Carlin. That is correct.
    Mr. Hoyer. That is one of the problems.
    On C-1, I want you to pursue that a little bit, $317 
million. What are the components of that? I do not have it 
right in front of me. How much of that is Archives I and how 
much is Archives II?
    Ms. Thomas. The cost of building Archives II, theexpansion 
of Archives II, is $116 million.
    [Clerk's note.--The C-1 renovation option of Archives I is 
about $196 million. Additionally the renovation requires a 
short-term lease of space for a genealogical research center 
until the Archives I renovation of the public space is 
completed. That cost is estimated at $4,800,000.]
    Mr. Hoyer. A hundred and sixteen? So the balance is 
downtown?
    Mr. Carlin. Correct.
    Ms. Thomas. Yes.
    Mr. Hoyer. So that is about $196 million downtown, or 
thereabouts.
    Now, in terms of timing, Mr. Chairman, I really think this 
is something that we need to get on with right away and talk to 
our Senate counterparts as well as OMB and the administration 
with reference to how we can program this as quickly as 
possible. We also need to talk to Frank Raines about it, as 
well, in terms of how we are going to fund it. We had some 
interesting funding alternatives for Archives II. We have used 
all the ones that John Berry came up with, but they were 
interesting and----
    Mr. Carlin. I think that is a very fair statement.
    Mr. Hoyer. Yes. We got this done through some pretty 
creative financing alternatives available in dealing with OMB 
on Archives II.
    Mr. Kolbe. Would the gentleman yield?
    Mr. Hoyer. Sure.
    Mr. Kolbe. I assume Mr. Shuster is going to want to take a 
look at his from an authorizing sense.
    Mr. Hoyer. I am sure that is the case, as well.
    Mr. Kolbe. Have you had any discussions with authorizing 
committees yet about this? Has this report been delivered to 
them?
    Mr. Carlin. Yes. The report----
    Ms. Thomas. No, it has not, only to your Committee.
    Mr. Kolbe. Because we requested it?
    Ms. Thomas. Exactly.
    Mr. Carlin. You requested it. It was an Appropriations 
Subcommittee request.
    Mr. Kolbe. The process now would be for you to go to the 
authorizing committee, is that right?
    Ms. Thomas. Yes.
    [Clerk's note.--I think at this point we must discuss the 
proposal with OMB before we go to the authorizing committee.]
    Mr. Kolbe. Thank you.
    Mr. Hoyer. You are absolutely correct, Mr. Chairman. On 
Archives II, we did not have some of the constraints that we 
now have in place.

                        intermittent conversion

    Let me ask you some specific questions and then in the 
second round some more which I will try to do quickly. I am 
interested in your converting the intermittent employees to 
regular full-time employees. Would you speak a little bit about 
that? You have $1.319 million in your budget. I presume that 
all the employees will be whole as a result of this effort.
    Mr. Carlin. First of all, a little quick background. The 
bulk of our intermittent employment has been in our records 
center operation across the country dealing with the records 
that are still in custody of the agencies, but we provide 
retrieval service for the agencies on those records.
    Intermittents, as you are well aware, are appropriate if 
the work is truly intermittent work. What I found was that we 
had developed a pattern where we were using intermittents in 
too many areas where it was really permanent full-time or part-
time-type work. So we are in the process of shifting what has 
been intermittent work over to permanent full-time and 
permanent part-time. We will still have some intermittent work. 
The figure you have in there will fund the conversion of those 
employees that truly meet the standard of permanent employment.
    Mr. Hoyer. Governor, I want to congratulate you on this 
initiative. I really think that this is going to be fairer to 
the employees, more accurately reflect, as you point out, what 
is in place and will be a better alternative for you.

                              bush library

    The $1.3 million for operation of the Bush Library, how 
does that compare with other Presidential libraries?
    Mr. Carlin. Relative to a new library versus older 
libraries when they were new, it is pretty much on par, 
certainly not exaggerated. In terms of staffing, it is the best 
we can do right now. In an ideal situation, we would staff it 
higher.

                         base funding reduction

    Mr. Hoyer. Now, you indicated on your base funding, 90 
percent is personnel and/or leased capital expenses. What would 
happen if your base were cut?
    Mr. Carlin. If our base were cut, we would be forced very 
likely to let employees go simply because in that ten percent, 
you do not quit putting postage on letters, you do not quit 
paying the telephone bill, the electricity, and so forth. So it 
would immediately eat into program areas.
    Historically, the agency has been able to, from time to 
time, eat additional responsibilities, but we really are at a 
point now where that is not an option without direct pain to 
the mission of the agency and the programs we are, by law, 
required to carry out.
    Mr. Hoyer. But there would be, I take it, some programmatic 
impact in terms of exhibits, i.e., the Presidential gifts 
exhibit, other exhibits of that nature?
    Mr. Carlin. Yes. In some cases, with the Presidential 
libraries, a lot of that is funded by private money, so that 
would not necessarily be of much assistance to us. What we 
could do in terms of OE operation is that we could delay or 
shut down some outreach programs.
    We would probably first have to go to the modest part of 
our budget where we add to the value of the records, the 
services we provide to assist, for an example, genealogists to 
get records. The last thing we would give up is preservation of 
the records. I mean, we would not allow that. We would have to 
first narrow what access we provide to the record because we 
can recover from that.
    Mr. Hoyer. Right.
    Mr. Carlin. If we lose a record or we do not have the 
record made in the first place, then we have a permanent loss.

                    repairs and restoration request

    Mr. Hoyer. Okay. My last question on this round, your 
renovation and repair request actually goes down a little bit, 
I notice. Now, I am concerned about that because that is where 
we always save money, because it is easy to save money in the 
short term on that, but in the longer term, it costs you a lot 
more. Is that in anticipation of doing the more major 
renovation, or is there some other reason?
    Mr. Carlin. Not really. The base R&R money you established, 
as I pointed out in my opening comment this concept, and the 
base we have had is $2,750,000. That is there. What is also 
there are some additional major dollars that we need to 
continue to finish the move from Bayonne and to deal with one 
other project that we have where we are in a space that is too 
expensive and it is economical for us to move to cheaper space, 
and I am talking about records center storage.
    What is not in there and why there is the drop from last 
year is the money to finish what you initiated last year atthe 
Truman Library and at the Roosevelt Library. The remaining money to 
finish those projects are not in there. That is the explanation for 
that.
    Mr. Hoyer. And how much would that be?
    Mr. Carlin. A specific number, we could not give you right 
now. We will be coming to you with a detailed report on what 
has happened since you took action last year on the first phase 
and that will include specific numbers it would take to finish.
    Mr. Hoyer. Thank you.
    Mr. Carlin. But we are talking approximately $9 million.
    Mr. Hoyer. Thank you. Thank you, Mr. Chairman.
    Mr. Kolbe. Mrs. Meek?
    Mrs. Meek. Thank you, Mr. Chairman.

        national historical publications and records commission

    Welcome, Governor, and members of your staff. In reading 
your testimony, you mentioned that the President's budget 
proposes cutting funding for the National Historical 
Publications and Records Commission and he proposes to cut it 
from $5 million to $4 million. That is a cut of 20 percent. You 
mentioned that.
    Could you give us some illustrations of the type of State 
and local projects that this program has funded in the past, 
and doing that, do you believe that the need for this type of 
grant will fall by 20 percent next year?
    Mr. Carlin. The $4 million that is in the President's 
recommendation will fund significant projects on a partnership 
basis with State and local units, State and local entities. 
Certainly, $1 million less will provide us with an appropriate 
decline in terms of projects we can support.
    Our enthusiasm and support and thrust for working with 
State and locals goes back to the statement I made in my 
opening comment, that being about half of the Federal record is 
out there in the States and local governments because they 
carry out the programs. They are the ones who actually 
implement what you set up. So if you want to look at the 
records of what has actually happened with a program without 
archival programs and good ones and record keeping, as well, at 
the State and local, you do not have the total Federal record.
    That is why the projects that we work with through NHPRC 
with State and local governments, where they put up money, as 
well, so the dollars are leveraged to get more done, why it is 
so important for us to continue that effort. And yes, it is 
true there will be less, although it will not all come out of 
State and local projects because State and local projects are 
just a part of what we fund from the NHPRC.
    Mrs. Meek. Thank you.
    Mr. Kolbe. Let me follow up on that, this question of the 
State grants. There has been a lot of controversy about this 
new policy that you have, this relatively new policy, shifting 
from what is called the Founding Fathers grants to block 
grants. I believe this is the thrust of what you are trying to 
do.
    Before you made that change, did you seek guidance from 
State historical societies? Did you have conversations with 
them?
    Mr. Carlin. State historical societies, the answer in 
general is yes, in a variety of ways, because, I am sure by 
coincidence, but your home State Archivist was on a committee 
and on the NHPRC that studied all of this. We do a lot of 
sharing with State archives, not just in terms of some of the 
difficulties we referred to here but in terms of learning from 
each other. There was a lot of input from the State archives on 
this, as well as other entities, but certainly, yes.
    Mr. Kolbe. You received lots of articles and editorials, I 
assume, from people who have been involved in these Founding 
Father projects that have generated these----
    Mr. Carlin. Yes.
    Mr. Kolbe [continuing]. But is it causing you to reconsider 
your policy, and why do you think it is no longer important to 
do these kinds of projects?
    Mr. Carlin. First of all, it is important on the record to 
get this clear. We are not saying and do not intend to ever say 
that these projects, the Founding Era documentary editing 
projects, are not important.
    What we said and are carrying out in the plan that is still 
being reviewed is that if you were to ask us, what is your 
highest priority in NHPRC, we would say our highest priority 
is, first of all, to save history that could be lost if we do 
not take action, and a second priority and very valuable would 
be to add further value to history that has already been 
captured and is being preserved.
    That is why we are saying as a higher priority that we need 
to look at some of the challenges we face, for example, in 
electronic record keeping, challenges that are faced all across 
the country at all levels of government, both public and 
private, for that matter, in terms of archival challenges for 
the future, that if we do not address those, history could be 
literally lost and that the documentary editors of the next 
century could be looking back and saying, these are huge gaps 
because somebody was not responsible at the time.
    What we have with the Founding Era Father project is adding 
value to records that exist, are preserved in good facilities, 
and are accessible. Now, it is valuable for us to further 
annotate and publish these papers. We are just simply saying, 
if you were to ask me, what is my highest priority, if I only 
could do one project, would I preserve some valuable history 
that could be lost if we do not do it or would it be to further 
annotate existing history? I would have to tell you, and that 
is what this plan says, is our first priority is to preserve 
what could be lost that is valuable for the future of this 
country.
    Mr. Kolbe. And in many cases, that is the decision, you are 
saying, that State archivists can make about local or State 
kinds of history that may be lost, that they can make those 
decisions?
    Mr. Carlin. We have a very sophisticated system that is 
relatively inexpensive because we use a lot of volunteers at 
the State level to screen prospective projects to bring to us, 
the NHPRC staff, to look at and carefully check out as to 
whether it is a project worthy of us investing and whether or 
not they are willing to put money on the table, as well. So we 
leverage the Federal dollars----
    Mr. Kolbe. But are you not going to do these in block 
grants to the States, so they are going to----
    Mr. Carlin. It is both. We do what is called a regrant 
program where we literally, upon approving their overall 
program, provide the State a ``regrant'' grant from which they 
carry out and fund and support specific local projects.
    Mr. Kolbe. You are not planning to change the policy, then? 
You are satisfied the policy is working?
    Mr. Carlin. We are always willing to take input and to 
listen to people who have legitimate concerns and ways to 
dothings better, but we feel our first and highest priority is to 
protect and preserve history that could be lost or history that would 
never even be recorded if we do not address certain challenges we have 
today, and that, yes, we hope very much to finish these projects.
    I would remind the Committee, these are projects that have 
been in existence for 40 to 50 years, many of them. Some will 
not be completed until the year 2060.
    Mr. Kolbe. It is a long project.
    Mr. Carlin. It is a long project, and what I am saying, if 
2060 turns out to be 2068 because I chose to save valuable 
history that would have been lost, I will take the price of 
that decision.
    Mr. Kolbe. Give me a specific example of something where 
you think you have been able to save history, through a 
project, save something that might otherwise have been lost.
    Mr. Carlin. There are endless examples across the country 
where you have local units of government that do not have any 
idea what record keeping is all about----
    Mr. Kolbe. I am not trying to catch you. I am just 
wondering if you can give me an example of something like that, 
of one where it actually happened.
    Mr. Carlin. Go ahead. A former State archivist here can 
give you a specific.
    Mr. Bellardo. We had a situation where local records were--
--
    Mr. Kolbe. Where was this?
    Mr. Bellardo. In Kentucky.
    Mr. Kolbe. In Kentucky.
    Mr. Bellardo [continuing]. Were in deplorable condition 
across the State. I mean, some of them were literally fading 
away because of the fact that they were recorded on 
thermographic processes. Others were damaged in one way or 
another. In other cases, there were just no resources locally 
to properly care for them.
    We believed that if we could do a demonstration project, 
that we could engender enough interest across the State that we 
could obtain legislative support for a permanent program. So we 
went to the NHPRC and requested $198,000 to do a regrant 
demonstration program. Within nine months of receiving that 
grant, the legislature passed a $1 million program that is 
continuing today, and the local government records are being 
conserved. They are being microfilmed, where necessary. These 
old thermographic processes, that has been corrected. They are 
even now, much later, working on computerized indexing to many 
of the local materials and so forth. That is just one that hit 
me directly.
    Mr. Kolbe. It is odd, it seems to me--I guess my time is 
up, but it is odd, it seems to me, that so much of the 
criticism of this is coming from the States who, it would seem, 
ought to be enthusiastic about getting this money for these 
projects to them. But in many cases, they are the ones 
complaining about abandoning these Founding Father projects.
    Mr. Carlin. That is not what we have received. I think we 
have tremendous support for what we are doing from the Society 
of American Archivists, and from the National Association of 
Government Archives and Records Administrators. The primary 
opposition that has been brought to our attention is from 
historians that either work directly on the project or 
historians associated with other documentary projects. I think 
it is really important to understand, we are not saying those 
projects are not important. In fact, the bulk of them will 
probably continue to get funding. We are not cutting off 
funding.
    Now, if in the process of this whole dialogue, we get their 
attention to look at more creative ways to get it done faster 
than 2060, that will also be a benefit. We know from our own 
experience through the NHPRC, where we have done some 
documentary editing ourselves, that there are creative ways to 
make more efficient use of those dollars, and that is another 
end product I would like to have as a result of all of this 
discussion.
    Mr. Kolbe. Thank you.
    Mr. Hoyer.
    Mr. Hoyer. Well, Mr. Chairman, this issue obviously 
deserves more consideration, I think, than we are going to give 
it right now.
    Let me yield, though. I do not know whether Dr. Price----
    Mr. Kolbe. Mr. Price came in after we got our first round, 
so let me go to him.
    Mr. Hoyer. Dr. Price is a distinguished academician in his 
own right and we are very lucky to have him in Congress, but 
this is a particular area where I think his expertise will be 
helpful to the Committee and I would be glad to yield to him.
    Mr. Kolbe. Mr. Price.
    Mr. Price. Thank you. I do not want too high a billing 
here. I would not want to raise expectations, but I do 
apologize for my late arrival and want to add my welcome and 
thanks to Mr. Carlin and his associates.

           reduced archives request under increasing demands

    I note, Mr. Carlin, that the National Archives and Records 
Administration is one of the very few agencies under the 
purview of this Subcommittee that is actually requesting a 
reduction in funding for the coming fiscal year, and yet in 
your own statement you document the increasing demands that are 
being placed on your agency. You make the point, and I would 
like to ask you to elaborate on it, that when other Federal 
departments are downsizing, that actually increases your 
workload. Why is that?
    Mr. Carlin. That is true because in terms of an agency that 
is ongoing and, for the moment, we will say permanent, every 
year, we get approximately a year's set of records that are 25, 
30 years old that has gone through the process and we are now 
winnowing down to what is going to be saved and actually 
accessioned into the Archives, two and three percent of the 
original total.
    When you close a program, an agency, an entity, or a 
special prosecutor, for an example, finishes his or her work, 
all of those records come at one time. So the closure of an 
agency, for example, we would not get in one year only one 
year's records. We could get 25 or 30 years' all at one time.
    In the case of, for example, a special prosecutor, it is 
obviously a smaller volume of records relative to an agency 
that would be closed, or a base is the most common entity that 
closes now, where we suddenly get all the records at one time. 
But there is a tremendous amount of immediate demand for the 
records of Special Prosecutors so that we must process these 
records quickly and make them accessible and that also puts 
pressure on us in terms of getting our work done.
    So you are correct in raising the point, and it is true, 
regardless which direction you go, records increase in terms of 
our operation and our responsibility.
    Mr. Price. How is that responsibility, triggered inpart by 
what is going on elsewhere in government, how is that reflected in 
these budget figures, or is it reflected in these budget figures 
adequately?
    Mr. Carlin. Your statement is correct, but let me share 
with you, and you may not have been here, but we talked earlier 
about the initiative of this Subcommittee on the House side a 
year ago in some real needs at the Roosevelt Library and the 
Truman Library. Those dollars are in the 1997 appropriation. 
The President's recommendation does not include the 1998 part 
of those dollars. OMB did not choose to recommend.
    So although your statement is correct, we have our base 
plus the request for additional preservation dollars, 
electronic infrastructural issues that we need to address and 
still be under the total last year. But it is because of that 
unique set of circumstances, not because we are saying on the 
one hand we have all this pressure to do more but we are asking 
you for less.
    Mr. Bellardo. If I could add, under the preservation 
request there was one example that feeds directly into that, 
and that is the closing of the Norton Air Force Base DoD 
facility for motion picture films for all of DoD. When that 
happened a couple of years ago, that resulted in an increase in 
our motion picture holdings almost--well, within about a six-
month period, of about 25 percent to our total holdings and 
that feeds into the preservation request that we have. It is 
not all of it, but that is a clear example where downsizing in 
a particular area had a major impact on us immediately.
    Mr. Hoyer. Would you yield for one second?
    Mr. Price. Certainly.
    Mr. Hoyer. I just wanted to clarify, when you say 25 
percent addition to your existing holdings, you mean of film?
    Mr. Carlin. Of film.
    Mr. Bellardo. Of motion picture film.
    Mr. Carlin. To put it in a little different perspective, it 
was 20 semi-truckloads of film that was moved from Norton to 
the Archives, 20 semi loads of film.
    Mr. Price. That is quite impressive.
    Mr. Hoyer. That is a lot of documentaries. [Laughter.]
    Mr. Bellardo. That is also after we weeded approximately 40 
percent of the entire holdings out to be destroyed, so it gives 
you an idea of what the total holdings were.

        national historical publications and records commission

    Mr. Price. I understand you have already had some 
discussion of this small but significant program in the 
Archives, the National Historical Publications and Records 
Commission. That funding is especially critical to the 
university community, as you know, because it helps leverage 
matching funds. In fact, the average non-Federal match, I 
understand, is 50 percent.
    Now, last year's funding level was $5 million. This year, 
the administration has requested $4 million. Do you have 
anything to add about the general impact of that reduction and 
how you would absorb it?
    Mr. Carlin. Well, first of all, I would point out to you, 
all of that money goes to grants. The administration of that 
program comes out of our regular budget, so there is no 
administrative issue here.
    As we stated earlier, $1 million is significant, 
particularly when you are talking about some of that going for 
programs that can leverage other dollars. So it is not just a 
$1 million loss. It could be looked at more likely as a $2 or 
$3 million loss in terms of total impact on what we can do or 
not do, and we will just simply do less. We will be able to 
joint venture, partner, with fewer State and local entities. We 
will have fewer dollars from which to fund the ongoing 
documentary editing projects. So every aspect of the NHPRC 
program is going to be impacted by that $1 million difference.
    Mr. Price. In the early stages of putting this budget 
together, did you, in fact, request the full amount?
    Mr. Carlin. We are authorized $10 million. We requested $6 
million to OMB, trying to be realistic in our approach.
    Mr. Price. So your best estimate, taking into account the 
budget realities and the demands, what you could usefully 
utilize, was $6 million?
    Mr. Carlin. That is correct.
    Mr. Price. Thank you.
    Thank you, Mr. Chairman.
    Mr. Kolbe. Mr. Hoyer, may I ask Mrs. Northup if she has any 
questions?
    Mr. Hoyer. Absolutely.
    Mr. Kolbe. Welcome, Mrs. Northup, to the hearing. Do you 
have any questions of the Archivist?

                               user fees

    Mrs. Northup. When individuals research records, are they 
charged a fee?
    Mr. Carlin. No. Now, if they request reproductions there is 
a fee charged, but in terms of services we provide to them, no.
    Mrs. Northup. And those duplicating fees, do not help 
offset any of the administrative expense?
    Mr. Carlin. Oh, it certainly does. Our trust fund, as you 
look at the budget, the trust fund is in existence because we 
do charge for some of the things that we do.
    Mrs. Northup. Thank you.
    Mr. Kolbe. Mr. Hoyer?

        national historical publications and records commission

    Mr. Hoyer. If you got the $6 million, what would be the 
impact on the Founding Fathers project?
    Mr. Carlin. It would certainly be funded.
    Mr. Hoyer. At $4 million, we are not sure?
    Mr. Carlin. Well, it is going to be tighter. The bulk of 
the work would continue even under $4 million, but we are going 
to have to squeeze down in every area. One of the things I want 
to do whether the number is four, five, or six, is to continue 
to encourage and motivate for different approaches to more 
efficiently use these dollars.
    For an example, in our own efforts, we used volunteers. 
Now, I am not talking about volunteers walking off the street. 
I am talking about retired Ph.D.s in history, excited about 
working with primary documents in a documentary editing 
project. I think there would be a lot of potential.
    In fact, when I was in New York City recently and visited 
with a number of historians, including Arthur Schlessinger, 
Jr., there was a positive reaction to the possibility of 
considering that kind of approach to accelerate and get a 
better return on our investment in documentary editing.
    Mr. Hoyer. Governor, because I do not understand this as 
well I would like to, and obviously, the Founding Fathers 
projects being put at some risk has raised some interest from 
the Los Angeles Times and other groups, op-ed writers. I am 
sure you are hearing from a lot of people yourself.
    Mr. Carlin. Oh, yes.
    Mr. Hoyer. If you did nothing other than Founding Fathers 
and fully funded it, how much would that be?
    Mr. Carlin. They are about 25 percent of the total budget.
    Mr. Hoyer. So that is $1.25 million?
    Mr. Carlin. On a $5 million budget.
    Mr. Hoyer. One-point-two-five million?
    Mr. Carlin. Yes.
    Mr. Hoyer. Okay. So that's what we could do, if we were 
interested in making sure that the Founding Fathers program 
stayed in place as is. However, I agree with you about 
acceleration, and I noticed some of the editorial writers 
saying, yes, it has taken a long time. We ought to continue to 
do it, but if we could accelerate it, that would be fine. You 
are saying the same thing?
    Mr. Carlin. Absolutely.
    Mr. Hoyer. I think that makes some sense, but if we said, 
for instance, and if we only had $4 million, of that, $1.25 
million will be for the Founding Fathers program, that leaves 
$2.75 million. What does that do? What impact would that have?
    Mr. Carlin. The impact would be fewer projects. I mean, we 
could not----
    Mr. Hoyer. Fewer State grants?
    Mr. Carlin. Yes.
    Mr. Bellardo. In addition, there are a number of other 
documentary editing projects that are not the Founding Fathers. 
Those would also be adversely affected.
    Mr. Hoyer. Give me a feel for how much they would be 
impacted.
    Mr. Bellardo. For example, the Gompers papers and----
    Mr. Hoyer. The Commerce papers?
    Mr. Bellardo. Gompers, Samuel Gompers.
    Mr. Hoyer. Oh, Gompers, Samuel Gompers. Okay.
    Mr. Bellardo. I am not naming them----
    Mr. Hoyer. I do not want to adversely affect those. All my 
friends and neighbors will give me a hard time.
    Mr. Bellardo. Yes. I do not want to single out any 
particular----
    Mr. Hoyer. What I am trying to get at is the components 
that you have either conceptually or actually allocated to 
these, so that if we came in and said $1.25 million is spent 
for the Founding Fathers, you have a balance of $2.75. X is for 
grants, Y is for other programs, such as Founding Fathers, 
Samuel Gompers, or whatever. Can you give me an idea of that, 
if not now, for the record?
    Mr. Carlin. We can certainly get back with you, any details 
that you request.
    [The information follows:]

                      Components for Grants Budget

    All $4 million in the President's budget request for NHPRC 
is for grants, which we award competitively, without dollar or 
percentage allocations to particular kinds of projects. If we 
are compelled to spend $1.25 million on the annotation and 
publication of current ``founding-era'' documentary editions, 
of which there are eight, all of the following kinds of 
projects will have to compete for the remaining $2.75 million:
    29 other on-going document editions that we have been 
funding, including the Samuel Gompers Papers and the 
Documentary History of Emancipation, both at the University of 
Maryland; the Documentary Relations of the Southwest, at the 
University of Arizona; and publishing projects in 13 other 
states, including Virginia, New York, and North Carolina.
    State partnership grants to help state historical records 
advisory boards across the country survey documentary needs, 
make plans to meet those needs, and implement those plans 
through ``regrant'' programs, which the state boards fund 
jointly with the NHPRC. So far we have jointly funded 21 
``regrant'' programs in 17 states, which have helped 483 
documentary projects, 42 documentary training programs reaching 
1,516 individuals, and 74 archival and records management 
programs.
    Grants to advance documentary fields as a whole through 
projects that help archivists and documentary editors 
nationwide do a better job. Particularly important are our 
grants for research and development on electronic records 
problems with which archivists are struggling at the federal, 
state, and local levels. As a new report on electronic-records 
progress says, NHPRC ``has been the principal player in this 
endeavor,'' which must be continued or the nation will lose 
much of the contemporary history documented in electronic 
records.
    Grants for helping preserve and provide access to 
particular collections of historical documents in individual 
institutions, including all kinds of archives, libraries, 
historical societies, and colleges and universities. 
Institutions in every state have received such grants, 
including, in Arizona, the Arizona State Archives, the Arizona 
Historical Society in Tucson, and the City of Tucson, and, in 
Maryland, the Arizona State Archives, Historic St. Mary's City, 
and the American Institute of Physics in College Park.

    Mr. Hoyer. Okay.
    Mr. Carlin. One thing I would say, in addition, I 
wouldencourage whatever the ultimate project is that we maintain as 
much flexibility as possible so that we can really review the quality 
of the submissions and not be in a situation where it is totally 
controlled as to who gets an exact amount of dollars.
    Mr. Hoyer. Governor, I am not suggesting the fencing of 
that. What I am trying to do is just understand, in terms of 
the controversy, where $4 or $5 or $6 million, where that would 
go, how much would go to State grants conceptually, how much 
would go to non-Founding Fathers like Samuel Gompers and 
whatever other related programs like Samuel Gompers.
    Mr. Carlin. One thing we would probably do if we did get a 
little more money is accelerate some of the documentary editing 
projects that are not that far from completion, just get them 
done so that they can be used, so we can start getting the 
return on the investment.
    Mr. Bellardo. Could I add one other point?
    Mr. Carlin. Sure.
    Mr. Bellardo. The other thing that may be useful or helpful 
for you to know is that as it is, the requests that we receive 
are in excess of twice what the funds are available.
    Mr. Hoyer. From States and other----
    Mr. Bellardo. Other documentary projects, and so forth, 
even given the $5 million, for example, that we had last year. 
So that gives you some idea of how the requests are running.

                           records retention

    Mr. Hoyer. Now, let me go back to an issue that the 
Chairman raised which I think is a critically important issue 
and I do not know how we resolve it. I like to throw things 
away, but there are a lot of people who do not like to throw 
anything away. Frankly, I am going through some papers that my 
mother had that my wife had kept. I just happened to be going 
through some boxes and found some fascinating documents that 
were kept by my great-grandmother. Now, at the time they were 
kept, I do not think they were probably so fascinating, but as 
time has gone by, literally over 100 years, they are very 
interesting documents. These were made in, I guess, the 1880s, 
these documents about children in the family and other family 
information.
    But the Chairman asked, I think, a critically important 
question. If we assume that at some point in time we have a 
finite ability to digest material, how do we make a judgment? I 
was interested in your comment. You said that 40 percent of the 
film library of--the Army?
    Mr. Bellardo. Well, it was DoD.
    Mr. Hoyer. DoD.
    Mr. Carlin. Yes. Norton Air Force Base in California was 
the location for it.
    Mr. Hoyer. You made a determination that 40 percent of that 
film library was not necessary to be kept, which is a big 
quantity--I mean, 60 percent was 20 truckloads?
    Mr. Carlin. Twenty semi loads.
    Mr. Hoyer. [continuing]. 20 semi loads, you could have had 
another 15 semi loads. How did you make that judgment and how 
does it relate to the Chairman's question of can we get rid of 
some of this or put it on much smaller non-paper or non-hard 
copy retention facilities?
    Mr. Carlin. Well, you cover in your statement and question 
a series of problems that we try to address on a daily basis. 
The appraisers that work for NARA deal with that question every 
day they are working with an agency, setting up a schedule. The 
bulk of the records they will set up a schedule for are going 
to be disposed of, some of those records in days, weeks, some 
of them in two years, five years, across the board. Yes, a 
small portion, the two to three percent, will end up being 
accessioned into the Archives.
    Reappraisal, particularly of non-textual records, is much 
more common and routine at NARA because we are talking about a 
volume we can get our hands on and it is a little easier to do 
and it is an ongoing process, so that the 40 percent we cut out 
initially in going to Norton does not mean that the 60 percent 
left will never be looked at again for further review. There 
will be a further check to see, with the passage of time, as to 
whether or not there can be a further winnowing of those 
records because of space and because we learn more in terms of 
use and demand as time goes on.
    But you also mention a very important fact in that 
sometimes it is 40, 50 years later that you finally recognize 
those records are valuable. The Nazi gold set of records, the 
records that we now have people from all over the world coming 
to College Park to look at, were rarely not looked at at all a 
short time ago, but a series of events triggered, obviously, a 
significant difference, and it was, obviously, very important 
for us, that we were able to say, yes, those records were 
declared permanent. Yes, we have them. Yes, we can make them 
accessible.
    We look every day for ways to do it better, ways in which 
we can explore so that we can preserve, we can make records 
accessible, but also to do it more efficiently.
    We discussed when I had a meeting with the Chairman, 
microfilming more. We are going to look, relook--it has been 
looked at in the past and dismissed. We are going to relook 
again at microfilming as a possibility to, in some cases, 
address preservation and access as well as space on records. In 
particular the originals do not necessarily have intrinsic 
value and so a microfilm copy could serve the purpose.
    Mr. Hoyer. Let me ask you----
    Mr. Carlin. But the electronic--let me just finish one 
thing, and that is on the electronic side. We are talking about 
the possibility of scanning and digitizing and so forth. The 
more we learn there, the less enthused we are because of the 
incredible costs, and the incredible costs come from a variety 
of perspectives, not just initially but the necessity then to 
migrate that technology from one generation to the next so you 
can have access.
    I mean, the scanning, the technology we would use today 
would not provide access unless we keep every generation of 
access--we are going to have to migrate those kinds of records 
and that will be extraordinarily expensive, based on what we 
have learned to this point. We are not dismissing it but we are 
not as encouraged or as enthused as we might have been two or 
three years ago.
    Mr. Hoyer. One of the things you mentioned, Mr. Chairman, 
on these veterans' records----
    Mr. Carlin. Yes.
    Mr. Hoyer [continuing]. Obviously, critically important----
    Mr. Carlin. Absolutely.
    Mr. Hoyer [continuing]. But not intrinsically important on 
the paper that they are written on. They are, for the most 
part, prepared on hand typewriters by sergeants who were not 
particularly good typists. I have seen my father's records. 
They are interesting, just in terms of the records themselves, 
but obviously, while it is nice for the family tohave a hard 
copy and keep a hard copy, the government does not need a hard copy, 
does it? Can that not be on microfilm or some other----
    Mr. Carlin. In theory, yes, but the problem we would have 
in terms of just immediately addressing it is we are talking 
about records that are not in very good condition so they are 
not real easy to just transfer to another medium and the 
initial up-front cost. Yes?
    Mr. Bellardo. Just to add a point, if I may. In the case of 
veterans' records in particular--military personnel records 
that have been transferred to us in relatively recent years and 
increasingly so--we are receiving those largely in microfilm, 
so that will dramatically cut the volume.
    Mr. Hoyer. So they are already in that form.
    Mr. Bellardo. Not the entire record, but the vast majority 
of the files are increasingly in microfilm and then there are a 
few selected pages that are still in paper. Also the military 
is now digitizing records. Rather than us digitizing paper, 
they are creating optical disks and the trick for us in working 
with DoD is to come up with the standards to permit the 
migration of the information over time that the Archivist 
talked about, because like it or not, that is how those records 
are being created in DoD. So we are either going to have to 
take microfilm or work with them and develop the standards to 
maintain the digital image.
    Mr. Hoyer. Thank you. I will submit whatever other 
questions I have.
    Mr. Chairman, I do not know whether you have visited 
Archives II, but I would like to get you out there and maybe we 
will do something else at the same time. I am having you visit 
all over. You do not have time to visit everything.
    Mr. Kolbe. Mr. Hoyer, I would be happy to. It is fortunate 
that everything that comes under this Subcommittee just happens 
to be in Maryland. I am not sure I understand why it is all 
located in Maryland, but it is close enough that we can go 
out----
    Mr. Hoyer. You can check the archival material. [Laughter.]
    Mr. Kolbe. And we certainly will make a point to visit 
Archives II.
    Mr. Hoyer. The state of the art of that building helps in 
dealing with all of the issues they are talking about. We have 
people all over the world trying to figure out these technical 
problems and coming to the Archives to find out how we are 
doing it in terms of the migration from one generation to the 
other of retaining and then, just, as importantly, because if 
you retain it, you have to recover it and have the ability to 
use it.
    Excuse me, Mrs. Meek.

              OTHER FEDERAL GOVERNMENT ARCHIVAL FUNCTIONS

    Mrs. Meek. My question has been answered to some extent. I 
am interested in knowing, does any other branch of the Federal 
Government have archival functions?
    Mr. Carlin. Yes, in the sense that all the agencies keep 
their immediate records. Some of them hold onto those records 
for long periods of time. A lot of Federal records that under 
normal circumstances you would think would be at the Archives, 
are not there. They are still held in an agency.
    Mr. Kolbe. If I might, if the gentlelady would yield----
    Mrs. Meek. Yes.
    Mr. Kolbe [continuing]. Things of national security, the 
DoD and the CIA would hold theirs for security reasons, is that 
not true?
    Mr. Carlin. Yes, but they also transfer records that are 
still classified to us. We have a large holding of classified 
records that we work with. For example, through the executive 
order on declassification we are involved on a daily basis 
working with agencies, trying to work out the declassification 
of old classified records that no longer need to be classified.
    Mrs. Meek. I asked that question for more than one reason. 
I wanted to know if the impact of the records coming from those 
other agencies, in the long run, do they in any way submit 
requests for monies? Could there be a transfer of monies from 
DoD to your agency, which is so really limited in terms of its 
budgetary acquisitions? Could they take over some of the cost 
of the record keeping for your agency?
    Mr. Carlin. We are always willing to receive. What I would 
like to share with you that is taking place now is that we try 
to partner with larger agencies any time we can. For an 
example, in some of our technology problems, we are working 
with the CIA on a project now on declassification and trying to 
get it more efficient in our Presidential libraries. The CIA is 
funding that project because it is a technology that they are 
using for other purposes, that they can share and cooperate 
with us. We try to make sure that anytime there is a technology 
that exists or a resource, that we do not try to duplicate. We 
try to partner with them to take advantage of the fact that 
they are much larger and can assist us.
    Mrs. Meek. If all the archival functions were under your 
area, would it be done better?
    Mr. Carlin. We would certainly like to think so. One of the 
reasons, obviously, is to get archival records, those that you 
are preserving on a permanent basis, in one location. It is 
more efficient and it certainly leads to more access from those 
trying to access the records if they have one location to go 
to. If you have agencies that are holding onto pieces, 
regardless if they are Freedom of Information Act records or 
not, you are talking about more access problems for the 
American citizens.
    Mrs. Meek. I have listened, Mr. Chairman, very intently to 
this testimony. I think it is very important, much more 
important than I anticipated the National Archives would be, in 
that sometimes justice comes from your good record keeping 
which is done over the years. The Nazi gold is one of them, and 
some of the military people, for years, could not receive their 
military honors because of the types of records that you kept. 
It caused that to come to the surface and I appreciate this a 
lot more. I had been thinking of it more from an academic 
standpoint, but its military and other records are extremely 
important. Thank you.
    Mr. Kolbe. Mrs. Northup?

                               USER FEES

    Mrs. Northup. Mr. Carlin, let me follow up on my first 
question about charging the public for services. People write 
for their military records and they get them.
    Mr. Carlin. Right.
    Mrs. Northup. But are there people who come to your 
agencies to do vast amounts of research or, say, they are going 
to write a book or sell another kind of service, provide a 
service at a price where they use your agency?
    Mr. Carlin. We have folks that come to our agency, and our 
agency consists of many facilities all across thecountry, every 
day. Some of them show up one time because they are looking for a 
particular record. Some come back many times. One of our largest group 
of customers are genealogists. And then, yes, we have people who come 
who are intent upon writing a book, or as in the case of the Nazi gold, 
intent on finding out what really did happen, and when you talk about a 
significant quantity of records, we are talking about a significant 
amount of time it takes to go through all those records to secure the 
documentation from primary records.
    Mrs. Northup. I thought that I understood that there were 
some people that came and spent quite a bit of time and 
actually they worked very closely with your staff. Is that 
right?
    Mr. Carlin. Yes, although that is changing considerably 
because we no longer in many cases have the resources to have 
what we would call subject area specialists or specialists on a 
particular set of records. Our FTEs stay the same, so as 
history grows and a new series of records comes on or there is 
interest, we have to have more generalists.
    With modern technology and our goal through the support of 
this Committee and Congress on access, we hope to have, for an 
example, within two or three years our catalog of all our 
holdings up on the Internet and that will lead to a practical 
way for not just hundreds and thousands but millions of people 
to access the documentation that we hold.
    Mrs. Northup. I am really focusing more on some people that 
come in repeatedly, maybe that actually make money on what they 
do, either through writing a book or providing a service. I am 
interested in knowing whether there have been any conversations 
about charging them for the staff work that they absorb.
    Mr. Carlin. There have been conversations, I think it is 
fair to say, over the years about the possibility of doing 
something like that. It breaks down usually when you try to 
decide how you are going to implement it. Where do you draw the 
line? Where do you say we are going to charge taxpayers for 
access to records?
    Traditionally, we have come down on the side of, in terms 
of access to the records, we do not charge. We charge in terms 
of, for an example, in the Presidential libraries for admission 
to the museums. We obviously charge for duplicating records. 
Those kinds of direct services, we charge for. But we have not 
gone beyond that at this point.
    Mrs. Northup. Well, when somebody uses a substantial amount 
of time, and when they come in and they need staff assistance, 
I think it is really admirable and it is something we would 
want to continue to be able to provide somebody with a staff 
member that can help a person that is going to use this 
assistance, like I said, to write a book, to provide a service, 
be able to locate the right place and work very closely with 
them. However, it does not seem to me impossible to set 
standards so that if I want to look something up about my 
father's military history, that is entirely different than if I 
am going to write a best-seller and be in there every day for 
months.
    I realize it requires making judgments, it seems to me like 
you all could make those judgments maybe better than the 
Congress could because you have an intimate understanding of 
what goes on.
    Mr. Carlin. We can certainly explore that and we welcome 
your interest in looking at creative ways to address our 
funding problems.
    I would share with you, though, so that we do not get an 
idea that here is a source we can suddenly turn to, when you 
look at our customer base, the huge numbers--our biggest 
customer is the Federal Government, and then you go to 
genealogists and you go to people who are more one-time or in 
the category that you made reference to that we would not want 
to charge. The number of customers that would fit the category 
would be a relatively small number, and so although I think on 
a fairness basis you certainly could make a very good case to 
explore this, it would not be a significant revenue base.
    Mrs. Northup. I think rather than how many people there are 
in terms of one percent, the question would be what percentage 
of the staff time do they absorb. If one percent absorbs even 
ten percent of the staff time or larger, then I think you are 
talking about something that we ought to look at.
    Mr. Carlin. Without research, I can assure you that, yes, 
there are certain numbers of projects that come into the 
Archives that devote a significant amount of time.
    Mr. Bellardo. One thing I might add. I agree that is 
something we really need to look at, but one of the upsides for 
us in terms of repeat users is that they tend to be much more 
knowledgeable about the finding aids and do a great deal of 
self-service work, whereas with the vast number of one-time or 
two-time researchers, we do an awful lot more hand-holding, 
this is how you do this and this is how you do that and so on. 
I mean, we want to do that kind of service because these folks 
are taxpayers, but it is not a one-for-one, each time you come 
in, it is the same amount of work. Does that----
    Mrs. Northup. Sure. I mean, I understand that. I am just 
saying, there are those people that absorb a great deal of 
staff time and sell their services and I think that it makes 
sense to at least suggest whether or not they should pay for 
that.
    Ms. Thomas. I can give you one example of where we tried to 
get pretty creative with some of these people who do come in 
and require more of our assistance. Some years ago when 
companies would come in and want to microfilm records because 
they were selling then microfilm publications, we worked out a 
deal with each one of the companies that allowed, when they 
microfilmed the records, they had to microfilm to our 
standards.
    We made sure that they provided us with copies, for free, 
of the microfilm publications which we could then make 
available in all of our facilities nationwide, and that helped 
us a lot because, then, those records--it helped preserve the 
records because we could tell the customers that they needed to 
use the microfilm that was available.
    [Clerk's note.--This was in place of using the originals. 
It also allowed us to make copies of the records available in 
12 locations rather than only in Washington.]
    We also entered into a contract with them that said, after 
seven years of their having sold the publications, at that 
point, we could then take the publications and sell them 
ourselves. So we have tried to look at some creative ways for 
the people who require a little more assistance of getting 
something back that would help our clients, as well.
    Mrs. Northup. Thank you.
    Mr. Kolbe. Thank you.
    As always happens at a hearing like this, what seems very 
easy when we start off, develops into more lines of 
questioning. Ms. Northup, I think, has hit on something that I 
think is a very interesting. You said, after all,these 
documents belong to the American taxpayers. Well, so, too, do our 
national assets like the parks, and yet we are now charging people for 
the use of national parks, understanding that there is a cost to that 
and that somebody needs to pay and users, it is legitimate to assume 
that users should pay for that.
    Let me just follow up on her line of questioning with this 
one, in terms of asking a specific example. Ken Burns and his 
project on the Civil War and his project on baseball, he 
acknowledges at the end of his thing that the Archives, it must 
have been a tremendous project--obviously, hundreds of 
thousands of photographs and documents had to be sorted in 
order to finish the project. And although that was produced for 
National Public Television, there has been sale of the films 
and so forth. It has made a good deal of money for whoever it 
was that funded the project there. What were the resources that 
were required from the Archives in order to assist that 
project?
    Mr. Carlin. Simply to make sure that the records he 
required or requested were accessible. I think he did most of 
the sorting and work himself, as far as I know. I do not know 
whether we had staff.
    Mr. Kolbe. Reproducing all those old photographs and 
everything?
    Ms. Thomas. Which we do charge a fee for.
    Mr. Carlin. Right. We charge for that.
    Mr. Bellardo. Yes. That is fully recovered. The main issue 
would be not sorting through with him but as his staff would 
look at the finding aids and say, bring me boxes ten through 
35, someone has to go and retrieve those boxes and bring them 
to the researcher so that the researcher can then go through 
them. I do not know if that is helpful or not.

                         archives customer base

    Mr. Kolbe. How many people, individuals, actually--you talk 
about your customer base--how many people actually access the 
Archives during the course of a year? I do not mean viewing 
downtown here but actually going into the documentation.
    Mr. Carlin. How many researchers do we have a year?
    Mr. Kolbe. Yes, either individuals just going in, Sally 
Jones coming in to check her genealogical records, that sort of 
thing.
    Mr. Carlin. We will provide that for you. I do not know the 
exact total.
    [The information follows:]

[Page 455--The official Committee record contains additional material here.]


    Mr. Bellardo. One of the interesting things, though, I can 
tell you is that the total number of researchers in our 
regional facilities around the country roughly equals that 
which we do here in Washington, so that gives you an idea of 
the large volume of reference also going on out there. But the 
actual numbers, we can get you.

                   storing military personnel records

    Mr. Kolbe. Mrs. Meek mentioned something that also raised 
another question on military records. You are not responsible 
for the storing of military personnel records. That is the 
services. They continue that, am I not correct? I mean, for 
example, the St. Louis depository of Army records, that is not 
under your----
    Mr. Carlin. Oh, yes, it is.
    Mr. Kolbe. That is?
    Mr. Carlin. Yes.
    Mr. Kolbe. You run that?
    Mr. Carlin. Yes.
    Mr. Kolbe. That is not the U.S. Army that runs that?
    Mr. Carlin. That is correct.
    Mr. Kolbe. I mean, not DoD that runs that?
    Mr. Carlin. That is correct.
    Mr. Kolbe. Has it always been that way? Has it been yours, 
the Archives?
    Mr. Bellardo. Since the 1960s.
    Mr. Kolbe. Since before the great fire?
    Ms. Thomas. Yes.
    Mr. Kolbe. All right. That is extraordinary to me, I mean, 
the impact of that still is there. There are people----
    Mr. Carlin. Absolutely.
    Mr. Kolbe. We deal with it every day in our office, on 
constituent relations of people whose records were lost in that 
fire, people trying to recover that.

                            declassification

    Refresh me on the law with regard to declassification. I 
mean, in one minute or less here, what is the law? What is our 
law with regard to that? What prompts my question here, I was 
in Australia for the Christmas holidays and they have a 30-year 
law there, and on January 1, the documents of 30 years before, 
in this case, 1966, are released. So New Year's Day is quite a 
day. The papers are just filled with page after page after page 
of analysis of all these documents that come out, that are 
released the night before, of various cabinet records and of 
Prime Minister Holt's dealings with President Johnson and so 
forth, but it is just automatic. Everything is just on the 30th 
year, it is just open to the public here.
    How does our law in this regard work and what role do you 
play in this?
    Mr. Carlin. We clearly do not have that law on the books or 
we would not have the large volume of aging classified 
documents, many of which we hold, a lot of them are still in 
the agency.
    We have dealt with this issue through a series of executive 
orders that have tried from time to time to address this issue 
of a backlog of classified documentation. We are currently 
heavily involved in working with agencies to try to support and 
carry out the executive order that was issued by the current 
administration. We made a lot of progress thefirst year, but it 
is on a cooperative, almost voluntary basis that it happens.
    The law does not provide us a hammer with which we can 
declassify records. Agencies can give us guidance and we can 
use that guidance to review and declassify documents. But if 
that is not provided, then we are left with coaxing and 
encouraging and trying to assist agencies to make the decision 
themselves.
    Further complicating this is that a lot of classified 
records are classified by more than one entity, sometimes many, 
many entities. We call them equities. There are a number of 
equities on a given record. All of them have to sign off.
    Now, we also have tried to encourage the executive branch 
to look at more efficient ways to carry that out, that within 
DoD, for an example, that the Army would let the Navy, with 
guidance, do some things on their own and vice-versa to 
simplify this. But it is very difficult to get an agency that 
has classified records to give up that classified record or to 
declassify it.
    Mr. Kolbe. But in the end, you cannot force them to do it, 
is that right?
    Mr. Carlin. That is correct. We cannot force them. If they 
have given us guidance, yes, we can implement.
    Mr. Kolbe. If it is clear that an agency, because of some 
embarrassment that it might cause them, is over-classifying 
something, there is nothing you can do about that?
    Mr. Carlin. That is correct. Now, we have access to 
classified records as far as appraising them. What we cannot do 
is declassify them and make them available. In other words, we 
can schedule them so that they cannot destroy them.
    Mr. Kolbe. I have one other line of questioning along those 
areas, but let me turn to Mrs. Northup.

                       court requests for records

    Mrs. Northup. Let me just follow up. Do you ever get any 
court requests for evaluating and sustaining an argument being 
made before the courts or under----
    Mr. Carlin. First of all, the courts are one of our biggest 
customers in terms of our records centers and the active 
records that we have. All across the country every day, we are 
retrieving records for the Federal Court system.
    Mr. Bellardo. May I comment?
    Mr. Carlin. Yes.
    Mr. Bellardo. In any major litigation area, we are apt to 
have a great deal of research, not necessarily directly from 
the court but from either the plaintiffs or defendants, and so, 
for example, the whole issue of asbestos litigation, we were 
into that for years and received just numerous requests in that 
area.
    Mrs. Northup. Do you ever have a case--let us just follow 
up on that--where, for example, EPA is making the claim that 
they had scientific information that showed that it was 
important to remove asbestos and you ever look at that and say 
they did not, where you know from the evidence you have, even 
though it is classified, that they did not?
    Mr. Bellardo. Generally, what we do is supply a certified 
copy of what the record is to those who request it. We do not 
interpret----
    Mrs. Northup. But what if it is classified?
    Mr. Bellardo. If it is classified, then the courts make a 
decision, I believe, in those cases who can view and not view, 
but then it also has to be brought to the agencies that have 
the equities and so on. We do not interpret what are in the 
records. The records have to speak for themselves.
    Mrs. Northup. Do your employees have access to read 
classified documents?
    Mr. Bellardo. Yes. We have staff who have clearances at the 
highest levels for compartmented information and use those 
clearances both in the appraisal process as well as to be sure 
that records have the necessary preservation conditions and are 
treated as they should be.
    Mrs. Northup. And you never have the case where you know of 
a case that is ongoing and is classified information that is 
contrary to what is being sworn in court?
    Mr. Bellardo. I think one of the ways to answer that 
question is that the enormity of the amount of materials in our 
holdings and the huge number of cases around the country--that 
would be an overwhelming thing for us to be responsible for, 
even if we could do that. But again, if you are talking about 
the classified materials, we have access to it, but we are not 
third parties in litigation. We have to supply the record and 
we have to stand on the record that this is what the record is 
and it is, in fact, certified that it is a true and legal copy 
of what was in our holdings. That, we do.
    Mr. Carlin. We do not interpret. That is not our role.
    Mrs. Northup. It is hard for me to give you an example that 
would not be political.
    Mr. Bellardo. Let me give one example. This did not happen 
here, but it happened at the State level, to one of our State 
archivists in Kentucky. We had a case where a surgeon literally 
had a patient ready to go on the table for surgery and said, I 
need that medical file and I need it now, and we rushed and we 
went through and we were able to obtain the medical file. We 
were not able to interpret the medical file for that person but 
we could read under those cases, this is what it says, and on 
the basis of that, we were at least able to supply some 
information.
    Mr. Kolbe. How in the world would the archivist have an 
individual's medical file?
    Mr. Bellardo. Well, at the State level, there are State 
hospitals.
    Mr. Kolbe. Oh, State hospitals.
    Mr. Bellardo. Yes.

                    internal revenue service records

    Mr. Kolbe. I have one other line of questioning that goes 
along with that on the IRS records, but let me turn to Mr. 
Hoyer.
    Mr. Hoyer. Go ahead, Mr. Chairman. I was going to ask about 
the IRS records. Right now, I am reading the report.
    Mr. Kolbe. You are ahead of me, then. You can read it while 
I ask a couple of questions about it here.
    We just got the report last night, the Archives and the IRS 
report. I think it is safe to say--would it be correct to 
summarize this as saying you agree to disagree?
    Mr. Carlin. I think that would be a fair way to say it, 
yes, because the bottom-line point is we cannot appraise 
records that we do not get access to.
    Mr. Kolbe. Well, you talked about having people at the 
highest level of classification, but that does not include IRS.
    Mr. Carlin. That is correct.
    Mr. Kolbe. You can get to ultra-top secret, beyond 
topsecret at the Department of Defense, but you cannot get to the IRS 
records?
    Mr. Carlin. That is correct.
    Mr. Hoyer. Because one is statutory, Mr. Chairman, and, 
with the other documents are essentially classified pursuant to 
law but classified by individuals within a department.
    Mr. Kolbe. You mean the security classification?
    Mr. Hoyer. Yes, DoD or CIA. They classify documents 
internally pursuant to law, but here, the law specifically says 
these are classified and confidential.
    Mr. Kolbe. No access.
    Mr. Hoyer. But this is a real problem that we have to try 
to resolve.
    Mr. Kolbe. It is a huge problem. What actions have you 
taken to try to force IRS to comply with the Federal Records 
Act, other than going through this report and agreeing that you 
do not agree on it here?
    Mr. Carlin. Well, of course, the history with the IRS would 
go back many, many years, but in more recent times, we have 
tried to aggressively pursue a variety of creative ways to 
certainly protect the privacy, and this is what we are talking 
about, of taxpayer information. There is no difference on that.
    What we are saying is, we cannot appraise their operation 
records. We deal with the 1040s all the time. This is one of 
the more interesting things for us, because in our records 
centers, the IRS is one of our biggest customers and we have 
lower-grade employees on a routine basis retrieving 1040s for 
the IRS. What we are talking about is the records at 
headquarters, within management, that yes, in cases, include--
--
    Mr. Kolbe. That do not relate to an individual's----
    Mr. Carlin. They can relate because it could have been an 
investigation, a criminal investigation, for an example, and we 
are just simply saying, we have to have access to appraise 
those records--whether they should be disposed of at a certain 
time or which ones are permanent and should be kept for 
government use, at the very least.
    Mr. Kolbe. You have a lawsuit that has been recently filed 
by some taxpayer associations and research groups----
    Mr. Carlin. That is correct, focused on this very issue.
    Mr. Kolbe [continuing]. Focused on this issue. I assume 
this will be taking a long time to resolve the lawsuit. Do you 
expect to become involved and filing briefs in that?
    Mr. Carlin. Oh, we are involved. We were a codefendant with 
the IRS.
    Mr. Kolbe. You are a codefendant?
    Mr. Carlin. Yes.
    Mr. Kolbe. Not a plaintiff but a codefendant.
    Mr. Carlin. And it is--I am not a lawyer, but it is an 
administrative-type situation, where it may or may not get at 
the real issue.
    Mr. Bellardo. I might want to add, it is our understanding 
that the administration is looking at this issue and looking at 
it from both sides and is trying to get additional information 
from both parties and that, at some point, the administration 
will be taking a position, we believe.
    Mr. Kolbe. On the lawsuit.
    Mr. Bellardo. No. No. I mean on this issue of access. I am 
sorry. I changed the subject on you.
    Mr. Kolbe. Okay. Well, when you say ``take a position'', 
does that mean making recommendations, perhaps, for----
    Mr. Carlin. Resolving it within the administration. That is 
the goal.
    Mr. Kolbe. But can it be resolved without legislation?
    Mr. Carlin. We personally think it is possible, yes.
    Mr. Hoyer. When you say the administration, who?
    Mr. Carlin. Justice, Treasury, OMB.
    Mr. Hoyer. Is there some sort of tasked group to do this?
    Mr. Carlin. Internally within the administration, yes.
    Mr. Hoyer. Who has the lead?
    Mr. Carlin. It is led by Justice, I think it is fair to 
say.
    Mr. Hoyer. So there would be somebody in Justice to ask in 
terms of the policy?
    Mr. Bellardo. I am not sure of all of the dynamics but I 
know that OMB will be playing the major role from a policy 
standpoint and Justice will be playing a major role in terms of 
the legal interpretations, I think.
    Mr. Hoyer. Let me pursue the Chairman's question just a 
little bit, because I may have been wrong in terms of these are 
not--obviously, there are some Commissioner findings, reports 
that you referred to in this report, but these are essentially, 
the bulk of them, not personal return related or corporate or 
personal return related?
    Mr. Carlin. Not in the sense that the body of records is 
simply personal or corporate returns. There could be----
    Mr. Hoyer. Can you appraise now personal returns for 
disposal?
    Mr. Carlin. Oh, yes. We have a schedule for that, yes.
    Mr. Bellardo. It is very easy by looking at all the blank 
forms and attachments and so on and so forth to see what sort 
of documentation is there and there is no dispute relating to 
the 1040s and so forth.
    Mr. Hoyer. Do we do that by year, when you say six years, 
ten years----
    Mr. Carlin. Six years and ten months, they are gone. We 
dispose of the forms--we are a major partner with roofing 
companies around the country, buying up 1040s to make new 
products.
    Mr. Hoyer. To make roofing materials?
    Mr. Carlin. Yes.
    Mr. Hoyer. What action, if any, do you think this Committee 
ought to take with reference to this issue, none at this time?
    Mr. Carlin. Well, as has been the case, we certainly 
appreciate your continued interest in the subject. I think 
resolution is important for everyone in a way that protects 
privacy but allows government to operate in a way that we can 
assure the American people that things are being done properly 
and that what, at the very least, government access that is 
needed is accessible.
    Mr. Bellardo. Yes. Can I add----
    Mr. Hoyer. As I understand it, one of the issues here is 
whether an Archives employee can be, in effect, deputized as 
well as an IRS employee can be deputized to carry out this 
function.
    Mr. Carlin. I want to let Lew expand on that, but we work 
with the Census folks, for an example, now, on a situation 
where they deputize one of our employees because we have the 
same privacy issue involved there.
    Mr. Bellardo. In the case of Census, there is also astatute 
separate from, for example, you mentioned the intelligence community 
does not have independent statutes. The Census does and that is the 
deputizing of a member of our staff or members of our staff by the 
Census, is how we deal with it with them.
    But one thing I do want to stress in this whole issue, we 
are absolutely determined to protect personal privacy of 
taxpayers and this is not at all about public access at all but 
rather just access for appraisal purposes and access to be sure 
that records are being cared for. That is all it is about.
    Mr. Hoyer. Well, there is not any doubt that your employees 
would be constrained by the statutory protections that are in 
place.
    Mr. Carlin. Absolutely, and we deal with privacy issues all 
the time.
    Mr. Bellardo. Including the 1040s.
    Mr. Carlin. Right.
    Mr. Bellardo. We handle them every day.
    Mr. Hoyer. Mr. Chairman, I think this has been a very 
interesting hearing, as Mrs. Meek and you both pointed out, and 
I think Mrs. Northup also brought up some interesting issues. 
While this agency is small in Federal Government standards--it 
is certainly not a small agency when you are talking $200 
million-plus, but relatively speaking to what we deal with in 
terms of a $7 billion Treasury Department or something of that 
nature, it is an agency which has a very great impact on the 
present and on the future.
    Mr. Kolbe. Thank you.
    I have just one last question, on this destruction of IRS 
documents, records. So at six years and ten months, they are 
gone. That means that, for example, President Kennedy's or 
President Johnson's tax returns were destroyed and you never 
reviewed them for historical significance?
    Mr. Carlin. No. No. That is not the case. There are 
exceptions, and certainly you have hit on one of the 
exceptions.
    Mr. Kolbe. But you do not review those. The law does not 
allow you to review those.
    Mr. Carlin. That is correct----
    Mr. Kolbe. But they are retained.
    Mr. Carlin. They are retained.
    Mr. Kolbe. They are retained.
    Mr. Carlin. The IRS has all of those records.
    Mr. Kolbe. You retain them just as off-limits as they would 
be at one year. I mean, so nobody has ever gotten in to review 
those?
    Mr. Carlin. As you are well aware, candidates have 
voluntarily shared their tax returns in recent years----
    Mr. Kolbe. Oh, yes.
    Mr. Carlin [continuing]. But you are absolutely correct. 
There is no----
    Mr. Bellardo. That is also true of those from the 1920s and 
the teens, I presume, President Wilson's, as well.
    Mr. Carlin. Yes.
    Mr. Kolbe. So they are retained, but still as off-limits? 
President Wilson's are as off-limits as mine would be from last 
year?
    Mr. Carlin. That is correct. And the same way with any 
cases that, again, are involved in any investigation, criminal 
or otherwise. Those are files that are kept.
    Mr. Kolbe. I will have a couple of other questions for the 
record.
    [The questions of Mr. Kolbe follow:]

[Pages 463 - 530--The official Committee record contains additional material here.]


    Mr. Kolbe. Thank you very, very much. This has been a very 
valuable hearing.
    Mr. Carlin. Thank you. We appreciate very much the 
opportunity.
    Mr. Kolbe. The Subcommittee is adjourned.

[Pages  533- 878--The official Committee record contains additional material here.]








                           W I T N E S S E S

                              ----------                              
                                                                   Page
Aikens, J.D......................................................     1
Barram, D.J......................................................   139
Barton, W.R......................................................   139
Bellardo, Lew....................................................   423
Carlin, J.W......................................................   423
Davis, T.M.......................................................   139
Early, W.B., Jr..................................................   139
Fischer, D.J.....................................................   139
Johnson, M.N.....................................................   139
McGarry, J.W.....................................................     1
Peck, R.R........................................................   139
Pugliese, F.P., Jr...............................................   139
Thomas, Adrienne.................................................   423
Thomas, S.E......................................................     1
Thompson, J.M....................................................   139
Wagner, G.M......................................................   139
Woods, R.J.......................................................   139









                                 INDEX

                              ----------                              
                                                                   Page
Federal Election Commission
    Amendment Request............................................    31
    Automated Data Processing....................................42, 44
    Budget Submission Level.......................................27-28
    Cash Awards..................................................    41
    Cash Awards/Tuition Assistance...............................    33
    Convention Travel............................................    41
    Dornan/Sanchez Election......................................    42
    Earmark of Amended Request...................................    29
    Enforcement Statistics.......................................33, 35
    Express Advocacy Issue........................................37-40
    Federal Election Commission Budget Justification.............    99
    Floor Funding Level..........................................    30
    FY 1995 Rescission...........................................    29
    Litigation Status............................................    36
    OGC Staffing.................................................    31
    Prepared Statement of the Vice-Chairman of the Federal 
      Election Commission........................................     9
    Questions for the Record Submitted by Congressman Forbes.....    64
    Questions for the Record Submitted by Congresswoman Northup..    67
    Questions for the Record Submitted by the Committee..........    48
    Summary Statement of Mr. Hoyer...............................     3
    Summary Statement of Mr. Kolbe...............................     1
    Summary Statement of Mr. Livingston..........................     2
    Summary Statement of Mr. McGarry.............................     5
    Summary Statement of Ms. Aikens..............................     5
    Travel.......................................................    42
    Tuition Assistance...........................................    40
    Workload.....................................................    32

General Services Administration
    Basis for Rent Shortfall.....................................   156
    Changes in Post-FTS 2000 Strategy............................   170
    Conclusion...................................................   176
    Confidence in Rent Estimate..................................   155
    Courthouse Construction Program..............................   173
    Encouraging Telecommunications Competition...................   170
    Excess Computers.............................................   161
    Expiration of Current Contract...............................   171
    Extension of FTS 2000........................................   172
    Fairness of Revised Strategy.................................   160
    Fast Program.................................................   163
    Funds to Maintain Federally-Owned Buildings..................   166
    General Services Administration Budget Justifications........   272
    Good Neighbor Program........................................   162
    Health and Safety Upgrades...................................   167
    Immigration and Naturalization Service in Miami..............   164
    Major Repairs and Alterations................................   167
    Opening Comments.............................................   154
    Opening Statement by Mr. Kolbe...............................   139
    Parking at Raleigh, North Carolina Federal Building..........   158
    Post-FTS 2000.........................................158, 162, 169
    Prepared Statement of the Acting Administrator, General 
      Services Administration....................................   143
    Questions for the Record Submitted by Congressman Forbes.....   249
    Questions for the Record Submitted by Congressman Hoyer......   243
    Questions for the Record Submitted by Congresswoman Northup..   251
    Questions for the Record Submitted by the Committee........209, 268
    Rent Shortfall...............................................   154
    RFP for FTS 2000.............................................   172
    Strategy to Compensate for Rent Shortfall....................   155
    Summary Statement of Mr. Barram..............................   140
    Value of Federally-Owned Buildings...........................   166

National Archives and Records Administration
    Archives Buildings Renovations...............................   433
    Archives Customer Base.......................................   454
    Base Funding Reduction.......................................   438
    Bush Library.................................................   438
    Court Requests for Records...................................   457
    Declassifiction..............................................   456
    Intermittent Conversion......................................   438
    Internal Revenue Service Records.............................   458
    National Archives and Records Administration Budget 
      Justifications.............................................   473
    National Historical Publications and Records Commission...439, 444, 
                                                                    445
    Opening Statement by Mr. Kolbe...............................   423
    Other Federal Government Archival Functions..................   450
    Outyear Funds................................................   433
    Prepared Statement of the Archivist of the United States.....   427
    Questions for the Record Submitted by the Committee..........   463
    Questions Submitted for the Record by Congresswoman Northup..   472
    Records Retention............................................   448
    Reduced Archives Request Under Increasing Demands............   443
    Repairs and Restoration Request..............................   439
    Storing Military Personnel Records...........................   456
    Summary Statement of Governor Carlin.........................   424
    User Fees..................................................445, 451

Committee for the Purchase from People Who Are Blind or Severely 
  Disabled
    Budget Justifications........................................   535

Federal Labor Relations Authority
    Federal Labor Relations Authority Budget Justifications......   568
    Prepared Statement of the Chair, Federal Service Impasses 
      Panel......................................................   551
    Prepared Statement of the General Counsel....................   557
    Questions for the Record Submitted by the Committee..........   502

JFK Assassination Records Review Board
    Budget Justifications........................................   623

U.S. Merit Systems Protection Board
    Merit Systems Protection Board Budget Justifications.........   642
    Prepared Statement of the Chairman, Merit Systems Protection 
      Board......................................................   629
    Questions for the Record Submitted by the Committee..........   637

Office of Government Ethics
    Office of Government Ethics Budget Justifications............   666
    Prepared Statement of the Director, Office of Government 
      Ethics.....................................................   659

Office of Personnel Management
    Office of Personnel Management Budget Justifications.........   727
    Prepared Statement of the Director, Office of Personnel 
      Management.................................................   699
    Prepared Statement of the Inspector General, Office of 
      Personnel Management.......................................   707
    Questions for the Record Submitted by the Committee..........   712

U.S. Office of the Special Counsel
    Budget Justifications........................................   839

U.S. Tax Court
    Prepared Statement by Chief Judge Mary Ann Cohen.............   857
    Questions for the Record Submitted by the Committee..........   859
    U.S. Tax Court Budget Justifications.........................   865