[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
                 RESTRUCTURING THE DEPARTMENT OF ENERGY

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

                             JOINT HEARING

                               before the

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 of the

                         COMMITTEE ON COMMERCE

                                and the

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                                 of the

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 13, 1999

                               __________

                Committee on Commerce Serial No. 106-40
                 Committee on Science Serial No. 106-33

                               __________

            Printed for the use of the Committee on Commerce


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 58-508CC                    WASHINGTON : 1999



                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    THOMAS C. SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
                                     BILL LUTHER, Minnesota
                                     LOIS CAPPS, California

                   James E. Derderian, Chief of Staff
                   James D. Barnette, General Counsel
      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                    Subcommittee on Energy and Power

                      JOE BARTON, Texas, Chairman

MICHAEL BILIRAKIS, Florida           RALPH M. HALL, Texas
CLIFF STEARNS, Florida               KAREN McCARTHY, Missouri
  Vice Chairman                      THOMAS C. SAWYER, Ohio
STEVE LARGENT, Oklahoma              EDWARD J. MARKEY, Massachusetts
RICHARD BURR, North Carolina         RICK BOUCHER, Virginia
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
CHARLIE NORWOOD, Georgia             SHERROD BROWN, Ohio
TOM A. COBURN, Oklahoma              BART GORDON, Tennessee
JAMES E. ROGAN, California           BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ALBERT R. WYNN, Maryland
HEATHER WILSON, New Mexico           TED STRICKLAND, Ohio
JOHN B. SHADEGG, Arizona             PETER DEUTSCH, Florida
CHARLES W. ``CHIP'' PICKERING,       RON KLINK, Pennsylvania
Mississippi                          JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York                (Ex Officio)
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)



                          COMMITTEE ON SCIENCE

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman

SHERWOOD L. BOEHLERT, New York       GEORGE E. BROWN, Jr., California
LAMAR SMITH, Texas                   RALPH M. HALL, Texas
CONSTANCE A. MORELLA, Maryland       BART GORDON, Tennessee
CURT WELDON, Pennsylvania            JERRY F. COSTELLO, Illinois
DANA ROHRABACHER, California         JAMES A. BARCIA, Michigan
JOE BARTON, Texas                    EDDIE BERNICE JOHNSON, Texas
KEN CALVERT, California              LYNN C. WOOLSEY, California
NICK SMITH, Michigan                 LYNN N. RIVERS, Michigan
ROSCOE G. BARTLETT, Maryland         ZOE LOFGREN, California
VERNON J. EHLERS, Michigan           MICHAEL F. DOYLE, Pennsylvania
DAVE WELDON, Florida                 SHEILA JACKSON-LEE, Texas
GIL GUTKNECHT, Minnesota             DEBBIE STABENOW, Michigan
THOMAS W. EWING, Illinois            BOB ETHERIDGE, North Carolina
CHRIS CANNON, Utah                   NICK LAMPSON, Texas
KEVIN BRADY, Texas                   JOHN B. LARSON, Connecticut
MERRILL COOK, Utah                   MARK UDALL, Colorado
GEORGE R. NETHERCUTT, Jr.,           DAVID WU, Oregon
Washington                           ANTHONY D. WEINER, New York
FRANK D. LUCAS, Oklahoma             MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin                BRIAN BAIRD, Washington
STEVEN T. KUYKENDALL, California     JOSEPH M. HOEFFEL, Pennsylvania
GARY G. MILLER, California           DENNIS MOORE, Kansas
JUDY BIGGERT, Illinois
MARSHALL ``MARK'' SANFORD,
  South Carolina

                                 ______

                 Subcommittee on Energy and Environment

                   KEN CALVERT, California, Chairman

CURT WELDON, Pennsylvania            JERRY F. COSTELLO, Illinois
JOE BARTON, Texas                    MICHAEL F. DOYLE, Pennsylvania
DANA ROHRABACHER, California         RALPH M. HALL, Texas
VERNON J. EHLERS, Michigan           JAMES A. BARCIA, Michigan
DAVE WELDON, Florida                 EDDIE BERNICE JOHNSON, Texas
GARY MILLER, California              ZOE LOFGREN, California
JUDY BIGGERT, Illinois               JOSEPH M. HOEFFEL, Pennsylvania
JACK METCALF, Washington             GEORGE E. BROWN, Jr., California,
F. JAMES SENSENBRENNER, Jr.,           (Ex Officio)
Wisconsin, (Ex Officio)

                                 (iii)



                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Eldredge, Maureen, Program Director, Alliance for Nuclear 
      Accountability.............................................    38
    Happer, William, Professor of Physics, Princeton University..    28
    Kettl, Donald F., Professor of Public Affairs and Political 
      Science, University of Wisconsin-Madison...................    31
    McFadden, George L., former Director of Security, Department 
      of Energy..................................................    25
    Rezendes, Victor S., Director, Energy, Resources, and Science 
      Issues, Resources, Community, and Economic Development 
      Division, General Accounting Office........................    17

                                  (v)



                 RESTRUCTURING THE DEPARTMENT OF ENERGY

                              ----------                              


                         TUESDAY, JULY 13, 1999

          House of Representatives,        
                     Committee on Commerce,        
                  Subcommittee on Energy and Power,        
                       Joint with Committee on Science,    
                    Subcommittee on Energy and Environment,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 10:05 a.m., 
in room 2123, Rayburn House Office Building, Hon. Joe Barton 
(chairman of the Subcommittee on Energy and Power) presiding.
    Members present Subcommittee on Energy and Power: 
Representatives Barton, Stearns, Largent, Burr, Shimkus, 
Wilson, Shadegg, Bryant, Bliley (ex officio), Hall, Sawyer, 
Gordon, Wynn, Klink, and Dingell (ex officio).
    Members present Subcommittee on Science: Representatives 
Calvert, Ehlers, Miller, Metcalf, Johnson, and Costello.
    Staff present: Kevin Cook, majority counsel; Harlan Watson, 
majority counsel; Sue Sheridan, minority counsel; and Michael 
Freedhoff, minority counsel.
    Mr. Barton. The joint hearing on restructuring the 
Department of Energy before the Commerce Committee and the 
Science Committee will come to order. I want to welcome my 
colleagues from the Science Committee. I also serve on the 
Science Committee, as well as on the Commerce Committee. I look 
forward to a very good hearing this morning.
    As a member of both committees, I know how much attention 
each has focused on the Department of Energy in recent years. 
It seems that every time we turn over a rock in the Department 
of Energy, a new problem scurries out. Every time we try to 
change the bureaucracy in that department, obviously, the 
bureaucracy fights back.
    With the latest revelations of Communist Chinese espionage 
at our nuclear weapons laboratories, everybody is now jumping 
on the Department of Energy reform bandwagon. Unfortunately, 
yet again, the bureaucracy in the Department seems to turn 
these reforms around to their own ends.
    Think about this for a minute. The security at Los Alamos 
and other Department of Energy laboratories is so poor that the 
Communist Chinese were able to steal the designs for all of our 
nuclear weapons and the solution that is being considered by 
some is to give these labs even more autonomy, shielding them 
even further from outside scrutiny. It is a mystery to me why 
anyone in the Congress imagines that that will result in 
enhanced security.
    People must understand that we are up against a unique and 
firmly entrenched culture in the weapons laboratories. It is a 
culture that has yielded some outstanding scientific 
achievements, to be sure, but at a price of security leaks, 
environmental contamination, and blatant disregard for health 
and safety risks.
    A Congressional Research Service study from several years 
ago reports that a University of California advisory committee 
on Lawrence Livermore and Los Alamos laboratories found, ``. . 
. you see, management created a buffer between the government 
and the laboratories, shielding the latter from undue political 
pressures and emphasizing the importance of research 
excellence, intellectual freedom, and openness.''
    These are all noble goals, but nowhere is national security 
mentioned in that quote. That system is due to experience some 
political pressure, but it is of the overdue rather than the 
undue variety.
    I believe the existing contract with the University of 
California should be terminated. I want to repeat that. I 
believe that the existing contract with the University of 
California should be terminated. I believe that academic 
institutions, in general, should be precluded from managing 
weapons research. Academic institutions simply do not place a 
priority on security or, for that matter, on cost control.
    I remember how well a university consortium managed the 
Superconducting Super Collider project. I also remember how a 
university consortium managed the Brookhaven National 
Laboratory in such a way that it did not pay attention to the 
radioactive materials contaminating the groundwater around the 
laboratory.
    Academia is very good at many things, but managing national 
weapons laboratories is not one of those things. We should let 
the academic institutions do what they do best, but not expect 
them to be good managers of the issues such as security, 
counterintelligence, or environment, safety, and health. If we 
are going to insist on allowing academic institutions to 
continue managing the weapons laboratories, and I hope that we 
do not, it should be on the same terms as private for-profit 
companies and subject to the same penalties if they violate 
their contract terms.
    I even question whether the laboratories should continue to 
be run by contractors. Senator Rudman told us several weeks ago 
that his panel found four models of Federal agencies that 
accomplish their scientific and technical mission without 
sacrificing accountability: the National Security Agency, the 
Defense Advanced Projects Research Agency, the National Oceanic 
and Atmospheric Administration, and the National Reconnaissance 
Office. I do not know all the details about how these agencies 
operate, but there is one very obvious difference between these 
agencies and the Department of Energy weapons laboratories. The 
research activities of these four model agencies are managed by 
government personnel, not by contractors.
    As we consider Department of Energy reform, it is essential 
that we address the role of contractors in DOE facilities and 
operations. Drawing a new organization chart does not alter the 
real source of power in the Department of Energy, which resides 
with the contractors instead of with the government managers.
    I believe the time has come to dismantle the Department of 
Energy, and I want to repeat that. I believe the time has come 
to dismantle the Department of Energy. The rationale for 
bringing a number of disparate functions together as a single 
cabinet-level agency was the energy crisis of the late 1970's. 
That rationale no longer exists. The emergence of competition 
in the energy markets mitigates against the need for a strong 
Federal hand in this area. Of the functions that still need to 
be performed at the Federal level, such as basic scientific 
research, stockpile stewardship, weapons research, and 
environmental cleanup, we can find the right home for those 
functions in other agencies.
    Today, we are going to begin the difficult process of 
formulating legislation that will effect a comprehensive and 
lasting solution to the many problems plaguing the Department 
of Energy. This is not going to be a simple job, nor is it 
going to be one that we can accomplish in one hearing. We will 
undoubtedly need additional hearing days on this topic.
    But I want to set a goal for the Energy and Commerce 
Committee members, and I certainly hope that my colleagues on 
the Science Committee agree to the same goal, of having a draft 
of a comprehensive Department of Energy restructuring bill 
ready for consideration before we leave for the August recess. 
Admittedly, that is a very challenging goal. We cannot 
criticize the partial solutions of other committees unless we 
are prepared on our two committees to offer a better 
alternative, and I am committed to trying to provide that.
    That concludes my opening statement. I now recognize the 
distinguished chairman of the Science Subcommittee, Mr. 
Calvert, for an opening statement.
    Mr. Calvert. I would like to thank the gentleman from 
Texas, Mr. Barton. Obviously, I will not bring up the 
University of California right now, but I thank you for your 
willingness to host this hearing between our two subcommittees. 
I would like to thank our witnesses for their participation in 
this hearing. Mr. Chairman, with so many opening statements and 
a limited amount of time for the witnesses today, I will keep 
my remarks brief.
    Like so many of my colleagues here today, I am very 
concerned about the ongoing problems that plague the Department 
of Energy's ability to carry out its core mission. It appears 
to me that this is an agency that has truly lost its way over 
the last two decades.
    I look forward to hearing from our witnesses today 
regarding several legislative proposals to restructure the 
DOE's national security functions in response to the security 
lapses identified in the Cox and Rudman reports. I am 
especially interested in learning more about the effect of such 
proposals on non-defense research and development on 
environment, safety, and health protection.
    Media reports earlier this year of possible security 
breaches within the U.S. DOE national laboratories gave the 
Nation a rude awakening. Furthermore, many of those media 
reports were confirmed by two major governmental reports, the 
House Select Committee on U.S. National Security, and the 
``Military Commercial Concerns with the People's Republic of 
China,'' the Cox report, and the President's Foreign 
Intelligence Advisory Board, the Rudman report. Both of these 
reports have raised numerous concerns regarding the DOE's 
ability to manage our Nation's most vital national security 
secrets.
    These serious security breaches at DOE have led to a number 
of restructuring initiatives, indicated by Mr. Barton, 
including several that were incorporated in both the House-
passed and Senate-passed versions of S. 1059, the National 
Defense Authorization Act for Fiscal Year 2000. The Cox report 
recommends that, ``the appropriate Congressional committee 
consider whether the current arrangements for controlling U.S. 
nuclear weapons development, testing, and maintenance within 
the Department of Energy are adequate to protect such weapons 
and related research and technology from theft and 
exploitation.''
    Even more specific are recommendations made by the Rudman 
report. This report suggests that DOE's weapons programs be 
placed within a new structure, called the Agency for Nuclear 
Stewardship, that would be responsible for all nuclear weapons 
activities, including safeguards and security. The report also 
recommends that the ANS weapons labs' management structure be 
streamlined by ``abolishing ties between the weapons labs and 
all DOE regional and site offices and all contractor 
intermediaries.''
    It is my understanding that there are currently five 
separate bills before the House that would either restructure 
or would lead to restructuring of DOE. In addition, I am told 
that several Senators are expected to offer an amendment to S. 
1009, the Intelligence Authorization Act for Fiscal Year 2000, 
that would establish the ANS that I had mentioned earlier to be 
headed by an Under Secretary for Nuclear Stewardship, who would 
also serve as the ANS Director.
    I am looking forward to today's testimony and gaining a 
better understanding of this important matter facing Congress, 
and with that, Mr. Chairman, thank you and I yield back the 
balance of my time.
    Mr. Barton. Thank you. I might say, you are my subcommittee 
chairman, since I serve on your subcommittee on the Science 
Committee, so that is kind of interesting.
    I would now like to recognize the ranking member of the 
full Committee on Commerce, Congressman John Dingell of 
Michigan, for an opening statement.
    Mr. Dingell. Mr. Chairman, I thank you. I will try and be 
as brief as I can.
    I want to first commend the two chairmen for having this 
hearing today. I would observe that the subject we are 
inquiring into is one with which we are all very familiar. The 
problems we are discussing today are the same ones this 
committee has been trying to correct for well over a decade, 
the lack of security at weapons facilities, problems in 
security clearances, the handling of classified information, 
the foreign visitors program, and an abundance of things that 
raise real questions about security.
    The recent report by our good friend, Senator Rudman, and 
the President's Foreign Intelligence Advisory Board 
unfortunately confirms that the Department of Energy as 
currently organized cannot adequately protect our Nation's most 
prized nuclear secrets. It documents security lapses over the 
past several decades in a clear and comprehensive fashion.
    No one familiar with DOE disagrees that the current 
management structure needs to be vastly reformed. For precisely 
these reasons, I am concerned, however, about recent proposals 
to elevate the Department's dysfunctional weapons bureaucracy 
to the status of an almost completely autonomous agency.
    Chairman Bliley and many of my Republican colleagues and 
Democratic colleagues share the concern about current 
legislative efforts to establish an agency in charge of nuclear 
weapons for the reasons described in the Rudman report. We are 
concerned that the same bureaucrats who have refused to 
implement President Clinton's recent security order and who 
have resisted reform efforts by both the Clinton and Bush 
Administrations would be running the agency with the same 
incompetence and disregard to the public interest as they have 
for so long, but they would be doing it with greater latitude 
and far less oversight than is currently the condition.
    I want to make it very clear, I have been down this route, 
I have seen this thing, and I know. I remember the AEC, which 
was one of the most arrogant and incompetent agencies in terms 
of its administration that I have ever seen. I remember that 
they have a long history of disregard of the interests and the 
will of the Congress and a long history of disregard of good 
environmental and health practices, something which I will 
discuss briefly.
    Allowing these proposals to become law would be simply 
tantamount to using gasoline to extinguish a fire. In every 
investigation concerning problems at the DOE weapons facilities 
and laboratories, the individuals responsible for the defense 
program have consistently and repeatedly denied the problems. 
They have punished whistleblowers. They have covered up their 
problems to their superiors in Congress. In a word, they have 
lied.
    Proposals to set up a fully or semi-autonomous agency would 
only reinforce this pattern of behavior. It would insulate 
these programs from outside scrutiny and accountability. It 
would disregard the responsibility to the Congress, and it 
would encourage the same arrogance that we saw during the days 
of the Atomic Energy Commission.
    The only beneficiaries of such a program would be the 
weapons bureaucracy at DOE. This would, indeed, be a remarkable 
act of political jujitsu, where the very institutions 
responsible for the security problems at DOE would emerge from 
scandal not merely intact, but even more powerful, more 
autonomous, and less subject to control than ever before.
    These proposals also solve far more than the security 
problems raised by the Rudman report. They become magnets for 
all manner of unrelated concerns. If we want to solve security 
problems, then that is what we should do. A separate security 
agency within DOE may make sense, but a separate weapons 
bureaucracy will simply make new problems and compound old 
ones.
    One particularly dangerous extraneous idea is to give the 
new agency the power to implement and oversee regulations 
relating to health, safety, and environmental protection. This 
is utterly foolish and it threatens the well-being of those 
communities that host these facilities, because in the absence 
of oversight, history has shown us that the predecessor agency 
having all of these powers, like the AEC, will flout 
environment, health, and safety regulations and then diligently 
cover up their misdeeds.
    In a 10-year period, the Department of Energy disposed of 
some of its radioactive and contaminated waste by spreading it 
on the ground at its Piketon, Ohio, facility and then 
rototilling it into the soil.
    The Governor of Washington State was taken on a visit of 
the Hanford facility. Because there was a spill on his route, 
the signs were an embarrassment, so the signs were taken down. 
The Governor was driven through the area, and believe it or 
not, he was thoroughly radiated.
    Now, these are some of the examples. Visit an atomic energy 
facility and you will find that it drips contamination, 
Superfund sites, hazardous waste, and nuclear contamination, 
brought about by a long period of diligent disregard of good 
safety practices and failure to properly supervise its 
contractors in a way which has put at risk the health and the 
safety not just of the communities but also of the people who 
work there.
    In 1984, when a malfunction at another DOE facility caused 
radioactive dust to be released into the air, the response of 
the facility was to recalibrate the warning system so that the 
releases would no longer trigger an alarm. Is that not a 
wonderful way of addressing the problem? The public safety was 
protected by recalibrating the alarm so that no one would have 
a warning when these kinds of events occurred.
    Mr. Barton. I would like to remind my good friend that the 
normal opening statement is supposed to be no longer than 5 
minutes.
    Mr. Dingell. Mr. Chairman, this is a subject which needs 
broad exploration. I ask unanimous consent to put my entire 
statement in the record where all may read it because it will 
benefit them greatly.
    Mr. Barton. We want to thank the former chairman for that 
statement and our friends from the Science Committee. That is 
one of the milder opening statements that Chairman Dingell has 
ever made.
    Mr. Dingell. I only do these things when I am outraged, Mr. 
Chairman.
    Mr. Barton. I can understand that. I share your concern.
    [The prepared statement of Hon. John D. Dingell follows:]
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan
    I want to thank the Chairmen for holding this hearing today. The 
gravity of this issue is underscored by our Committees joining together 
on a bipartisan basis to try to address the very serious security and 
management problems at the Department of Energy. This is a subject with 
which I am all too familiar. The problems we are discussing today are 
the very same ones that this Committee has been trying to correct for 
well over a decade: the lack of security at our weapons facilities, 
problems in security clearances, the handling of classified 
information, and the foreign visitors program.
    The recent report by Senator Warren Rudman and the President's 
Foreign Intelligence Advisory Board unfortunately confirms that the 
Department of Energy, as currently organized, cannot adequately protect 
our nation's most prized nuclear secrets. It documents security lapses 
over the past several decades in a clear and comprehensive fashion. No 
one familiar with DOE disagrees that the current management structure 
needs to be vastly reformed to ensure it meets the highest standards of 
accountability.
    For precisely these reasons, I am gravely concerned about recent 
proposals to elevate the Department's dysfunctional weapons bureaucracy 
to the status of an almost completely autonomous agency. Chairman 
Bliley, many of my Democratic and Republican colleagues, and I share 
concerns about current legislative efforts to establish such an agency 
in charge of nuclear weapons, for the reasons described in the Rudman 
Report. We are concerned that the same bureaucrats, who have refused to 
implement President Clinton's recent security order and who resisted 
reform efforts by both the Bush and Clinton Administrations, would be 
running this agency, with even greater latitude and far less oversight 
than is currently in place.
    Allowing these proposals to become law would be tantamount to using 
gasoline to extinguish a fire. In every investigation concerning 
problems at the DOE weapons facilities and laboratories, the 
individuals responsible for the operation of defense programs 
consistently and repeatedly denied the problems, punished the whistle 
blowers, and covered up the problems to their superiors and Congress. 
Proposals to set up a fully or semi-autonomous agency would only 
reinforce this pattern of behavior by insulating these programs from 
outside scrutiny and accountability. The only beneficiaries of such a 
proposal would be the weapons bureaucracy at DOE. This would indeed be 
a remarkable act of political jujitsu where the very institutions 
responsible for the security problems at DOE would emerge from scandal 
not merely intact, but even more powerful And autonomous than before.
    These proposals also ``solve'' far more than the security problems 
raised by the Rudman report. They have become magnets for all manner of 
unrelated concerns. If we want to solve security problems, then that's 
what we should do. A separate security agency within DOE may make 
sense, but a separate weapons bureaucracy will make new problems and 
compound old ones.
    One particularly dangerous, extraneous idea is to give the new 
agency the power to implement and oversee regulations relating to 
health, safety, and environmental protection. This is utter foolishness 
and it threatens the well being of communities that host these 
facilities, because in the absence of oversight, history has showed us 
that these weapons facilities will flout environment, health and safety 
regulations and then cover up their misdeeds.
    For example, in a 10 year period, beginning in 1974, the Department 
of Energy disposed of some of its radioactive and chemically 
contaminated waste by spreading it on the ground at its Piketon, Ohio 
facility and then rototilling it into the soil.
    In 1984, when a malfunction at another DOE facility caused 
radioactive dust to be released into the air, the response at the 
facility was to recalibrate the warning system so that the releases 
would no longer trigger an alarm.
    These are only two examples, but they are part of a pattern well 
known by those who have lived near DOE's Hanford, Rocky Flats, Savannah 
River or other sites in the days when these programs were shielded from 
oversight by the Department's environment, health and safety officials.
    This danger is also recognized by Senator Rudman who appeared 
before the full Commerce Committee just a few weeks ago and said in no 
uncertain terms that he opposed giving this new agency the environment, 
health and safety functions currently vested in other parts of the 
Department.
    I very much want to work with my colleagues on both sides of the 
aisle, on these committees and others, to truly address the problems at 
the Department of Energy. But these are longstanding problems that 
cannot be addressed with simple solutions. The addition of a new agency 
or undersecretary may be a fine place to begin, if it is done 
correctly, but we can never hope to solve these problems without 
addressing fundamental problems in the DOE culture and the Department's 
relationships with its contractors. Unfortunately, the proposals to 
date are not even inept simple solutions. They are dangerous proposals 
that threaten to undue all the good work done by our Committees and the 
Bush and Clinton Administrations to make DOE a safer place for its 
workers and those who host its facilities.

    Mr. Barton. I would now like to recognize the distinguished 
ranking member of the Energy and Environment Subcommittee of 
the Science Committee, Congressman Costello, for an opening 
statement.
    Mr. Costello. Mr. Chairman, I thank you and Chairman 
Calvert for calling this hearing today.
    Mr. Chairman, while this committee and others in Congress 
have had many hearings on the security problems at the DOE 
labs, I believe this may actually be the first hearing to 
address consequences to the scientific missions of the 
Department that could arise as a result of the Senate 
reorganization proposals.
    I believe that as Congress moves forward toward any 
reorganization proposal, we need to address three important 
considerations, and speaking of considerations, out of 
consideration to our witnesses today, I will make my statement 
very brief and enter the rest of the statement in the record.
    But the three issues that I believe should be addressed, 
No. 1 is we need to fix the security problem with a security 
solution. Two is we need to ensure that environmental health 
and safety are protected. Finally, I have concerns about the 
impact that the Senate proposals could have on the science. The 
weapons labs each currently do almost $100 million worth of 
non-weapons R&D each year. We must be able to continue to 
attract top-notch scientists to these labs.
    I would like to enter the balance of my statement in the 
record and I look forward to hearing from our witnesses today.
    Mr. Barton. Without objection.
    [The prepared statement of Hon. Jerry F. Costello follows:]
   Prepared Statement of Hon. Jerry F. Costello, a Representative in 
                  Congress from the State of Illinois
    While this Committee and others in Congress have had a multitude of 
hearings on the security problems at the DOE labs, I believe this may 
actually be the FIRST hearing to address consequences to the scientific 
missions of the Department that could arise as a result of the Senate 
reorganization proposals. I believe that as Congress moves towards ANY 
reorganization proposal, we need to address three important 
considerations.
    First, we need to fix a security problem with a security solution. 
The Senate proposal to put the same individual in charge of both 
security AND nuclear weapons development is reminiscent of the way 
things were before President Bush's Energy Secretary, Admiral Watkins, 
put his own ``Security Czar'' in place to separate authority for 
security from that of weapons research and development. I look forward 
to hearing from General McFadden, who was appointed to that position.
    Second, we need to ensure that environmental health and safety are 
protected. The Senate proposal places the responsibility for 
environmental health and safety under the same roof as nuclear 
materials production--much like the Atomic Energy Commission of old. 
When we were still conducting above-ground nuclear explosions in 
Nevada, Congress held a series of hearings on the possible adverse 
health effects of those tests. The Atomic Energy Commission, anxious to 
continue their testing unimpeded, testified that there were no adverse 
health consequences of repeatedly releasing more radiation than was 
released in the Chernobyl accident--false statements that may have led 
to an increase in thyroid and other cancers for thousands of Americans.
    Finally, I have concerns about the impact the Senate proposal could 
have on science. The weapons labs each currently do almost $100 million 
worth of non-weapons R&D each year. We must be able to continue to 
attract top-notch scientists to these labs.
    I look forward to hearing from our witnesses today, and am anxious 
to hear their thoughts on ways to reform DOE in a constructive way 
WITHOUT any unintended consequences.

    Mr. Calvert. Mr. Chairman, I would ask unanimous consent to 
insert Chairman Sensenbrenner's opening statement into the 
record.
    Mr. Barton. Without objection, so ordered.
    We will also put Chairman Bliley's opening statement in the 
record in its entirety at this time, and all other members not 
present who are not given an opportunity to give an opening 
statement in person will have their statement put into the 
record at this same point in the record.
    [The prepared statements follow:]
 Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
    Thank you, Chairman Barton, and welcome to our witnesses and our 
fellow Members from the Science Committee. Our two Committees have 
abundant evidence before us about the problems in the Department of 
Energy. The recent reports by the Cox Committee and the Rudman panel 
confirmed that the DOE laboratories allowed the Chinese to steal our 
Nation's most valuable nuclear secrets.
    These security breaches have prompted some in Congress to attempt 
to legislate a partial solution by reorganizing the defense portion of 
the Department of Energy. These efforts are well-intentioned, but they 
miss the mark--they don't reach broadly enough into the non-defense 
side of DOE, and they don't reach down into the culture of the 
organization. The problems in DOE are both widespread and deep-rooted, 
and the solution must be truly comprehensive to be effective.
    Senator Rudman stated in our hearing last month: ``This is not 
about security . . . This is about accountability. This is about a 
chain of command that works. And counterintelligence [and] security are 
merely symptoms of problem of accountability.'' As the Members of the 
Commerce Committee know all too well from our years of oversight 
activities, the Department's approach to environment, safety, and 
health also reflects that same underlying lack of accountability.
    Unfortunately, just moving around the boxes on the Department's 
organization chart does not solve the accountability problem, as it 
really doesn't change much of anything outside of Washington. This is a 
agency that is enormously resistant to change. In the words of Senator 
Rudman's panel, ``the Department of Energy is a dysfunctional 
bureaucracy that has proven it is incapable of reforming itself.''
    Secretary Richardson and his predecessors have made valiant 
attempts to change DOE, but with only limited success. I believe the 
time has come for Congress to mandate comprehensive reform of that 
agency. But that reform cannot be partial, and it cannot be 
accomplished outside of the normal legislative process. Earlier this 
week, I and my colleagues from both committees, majority and minority 
alike, wrote to the Speaker expressing our concern about attempting 
``quick fixes'' on the defense and intelligence authorization bills.
    I would like to read one excerpt from that letter to Speaker 
Hastert. ``We believe that we share with you many common principles for 
moving forward to address the serious problems at the Department. We 
all support the need to streamline the organizational structure and 
enhance the accountability of both agency officials and DOE 
contractors. We all agree that independent oversight of sensitive 
areas, such as security, counterintelligence, health, safety, and the 
environment is required. We all agree on the need to maintain a strong 
linkage between defense-related and non-defense science in DOE. We all 
agree that legislation to reform the Department of Energy must serve 
the long-term needs of the nation, not the immediate demands of any 
particular constituency.'' I ask unanimous consent that this entire 
bipartisan letter, sent to the Speaker by the Commerce and Science 
Committees, be placed in the record of this hearing.
    Today marks the beginning of our joint effort to develop a truly 
comprehensive and effective legislative solution for the Department of 
Energy. I come at this problem preferring evolution over revolution, 
but it may be that incremental improvements within the existing 
Department won't go far enough, and more drastic measures may be 
necessary. The testimony of our witnesses today will be especially 
valuable in helping us understand how we can go about reorganizing the 
Department of Energy in a way that makes sense, that accomplishes 
meaningful and lasting reform, and that protects everything that is 
important to this Nation.
                                 ______
                                 
   Prepared Statement of Hon. F. James Sensenbrenner, Jr., Chairman, 
                          Committee on Science
    The revelations of Chinese espionage at DOE, which first surfaced 
in the mainstream press and which were elaborated in the Cox and Rudman 
Reports, fundamentally call into question the ability of DOE to handle 
sensitive information. If our nuclear secrets are not safe, how can any 
DOE information be deemed secure?
    I believe that the vast majority of Americans agree that an 
overhaul of the Department of Energy is long overdue. The issue is 
whether any of the current proposals on the table go far enough. The 
Rudman Report's finding of ``[o]rganizational disarray, managerial 
neglect, and a culture of arrogance-both at DOE headquarters and the 
labs themselves'' largely echoes that of the 1995 Galvin report on the 
DOE labs. If the DOE and defense lab bureaucracies are ``saturated with 
cynicism,'' have an ``arrogant disregard for authority,'' and have ``a 
staggering pattern of denial'' to the point that our national security 
has been extensively and repeatedly compromised, I am afraid to even 
consider the state of the civilian labs that also work on classified 
scientific research and can harm as well as assist our national 
security. Thus, I believe the solution is not to concentrate on only 
the weapons labs, but to look at the entire complex. If the bath water 
is dirty, throwing out half the water will not clean the tub. In short, 
whatever the solution entails, I believe that it should address all the 
labs.
    We also need to keep in mind the tension between science and 
security, and of the incredible scientific benefits attributable to the 
work at the DOE labs. We must ensure that while we safeguard the 
security of our Nation, we protect the scientific endeavors conducted 
at our DOE civilian laboratories.
    And finally, we must ensure that there is adequate oversight of 
environment, safety and health matters at the DOE facilities. The 
Science Committee-on a bipartisan basis-has strongly supported the 
movement to external regulation of the civilian DOE labs, particularly 
in light of the safety fiasco at Brookhaven National Laboratory, which 
has cost the scientific community a world-class neutron research 
facility, the High Flux Beam Reactor. Consequently, I strongly believe 
that external regulation of DOE civilian labs must be part of any 
reorganization legislation.
    The importance of these issues and the bipartisan concerns of both 
the Science and Commerce Committees are demonstrated here today by this 
joint hearing of both House Energy Subcommittees. I look forward to 
working with all Members on a bipartisan basis to craft legislation 
that best addresses the real problems of DOE.

    Mr. Barton. I would recognize the gentleman from Tennessee, 
Mr. Bryant, for a brief opening statement.
    Mr. Bryant. Thank you, Mr. Chairman. I thank you for 
hosting this hearing, and out of respect for the panel and the 
time that we have available, I would yield back my time.
    Mr. Barton. Then we would recognize the distinguished 
gentleman from Pennsylvania, Mr. Klink, for an opening 
statement.
    Mr. Klink. Thank you, Mr. Chairman. I am pleased you are 
holding this hearing today to begin a thorough and 
comprehensive review of what changes should be made to the 
total organizational structure of the Department of Energy.
    This committee has a long and distinguished history of 
legislative and oversight activities regarding the DOE. For 
example, the independent Office of Security Evaluation was 
created back in 1989 because of this committee's work on 
security issues. The Federal Facilities Compliance Act, which 
forced DOE to begin cleaning up its environmental mess, came 
out of our committee. A separate environment and health and 
safety office resulted from our work.
    Several of our witnesses today will identify the key 
accountability problems at DOE. After decades of letting the 
contractors do what they want, DOE is still not able to assert 
control. The DOE culture everyone talks about is actually the 
contractor culture, but no proposal is on the table today to 
deal with the contractors' resistance to change.
    The Rudman panel made sweeping recommendations of 
structural change because of safeguards and security problems 
at the weapons complex but had no real understanding of either 
the contractor culture or how its recommendations would impact 
on the environmental, safety, and health responsibilities that 
the labs have resisted for many years.
    According to a recent article in the National Journal, 
Senator Rudman even believes that the contractors who run the 
facilities are not responsible for security, although the 
contract gives them that job, and they were the parties that 
ignored Presidential security directives. It is hard to believe 
that giving them more independence is going to solve that 
problem.
    At our last hearing, neither Senator Rudman nor Secretary 
Richardson supported placing environmental, health, and safety 
activities in this new agency, but neither has proposed a 
viable alternative for these functions. They just have not 
looked at it, and Congress has not, either.
    Certainly, we do not want to go back to the past where the 
General Accounting Office found that DOE facilities like 
Fernald and Oak Ridge, ``overemphasized production, making 
environment and workers' safety and health secondary 
concerns.''
    Mr. Chairman, I have to ask and will ask our witnesses 
today why Congress cannot view the DOE as we do corporate 
manufacturers. Companies who manufacture widgets or computers 
do not tell us that they are too busy to fulfill their 
environmental, safety, and health requirements, and as Dr. 
Kettl states in his prepared statement in a slightly different 
context, these all impact the way a company does business, but 
it is not the way they do business itself. The structure is not 
the issue. The commitment and the ability of top management to 
enforce its commitment to carry out its primary mission safely, 
legally, and to hold people throughout the chain of command 
accountable is.
    We see none of this in the current proposals before our 
Congress. Those proposals give more authority and less 
oversight to defense programs and its field organizations, 
apparently as a reward for having made such a mess of the 
security and of the environment.
    I look forward to hearing from our witnesses because I am 
bewildered by all of these recommendations. Senator Rudman 
could not explain them to us when he was here. We on this 
committee have the scope of experience and the responsibility 
to look at all of the Department's roles, and, hopefully, to 
craft a solution that provides a structure so that the 
Department meets all of its responsibilities.
    Mr. Chairman, with that, I yield back my time.
    Mr. Barton. I thank the gentleman from Pennsylvania.
    I recognize the gentlewoman from New Mexico, whose district 
includes some of the weapons laboratories, for an opening 
statement, Congresswoman Wilson.
    Mrs. Wilson. Thank you, Mr. Chairman. I appreciate the 
opportunity to comment today on the reorganization of the 
Department of Energy in order to more adequately ensure that 
our nuclear weapons programs are protected from espionage.
    I am very pleased that within the last week, the Secretary 
of Energy has abandoned his strong opposition to any 
organizational change that would clarify lines of authority and 
accountability within the nuclear weapons complex through the 
formation of an independent agency within the Department of 
Energy. I believe that this will make it easier to craft 
constructive legislation on this subject.
    I have not spoken on this issue before, but because I have 
worked with the nuclear weapons complex in the past and I am 
the only member of the Commerce Committee that represents one 
of these laboratories, I thank the chairman for allowing me to 
take some time today.
    While the Cox and Rudman reports have brought renewed 
awareness of the management and organizational problems within 
the nuclear weapons complex, these concerns are not new. I will 
save the details for my written statement, but the Chiles 
report earlier this year, the Drell report in 1990, the 
Institute for Defense Analysis 3 years ago, and the Galvin 
report are only some of the distinguished and thoughtful groups 
that have recommended significant organizational change within 
the Department of Energy.
    Today, a New Mexican and former member of the Commerce 
Committee, Secretary Richardson, is implementing a new round of 
reforms at DOE. Mr. Chairman, you should know that while some 
past Secretaries have been criticized for failing to give 
significant attention to these matters, Secretary Richardson is 
clearly indicating a willingness to tackle these issues. The 
fact is that every new Secretary and Assistant Secretary, 
recognizing that there are some serious problems, tries to 
implement reforms. The result has been an ever-increasing 
number of management overlays.
    Beginning with Secretary Harrington, who created a separate 
Assistant Secretary for Environment, Safety and Health, the 
Department has increasingly relied on structures to oversee 
other structures. We now literally have overseers overseeing 
the overseers.
    As an example, the Institute for Defense Analysis found 
that many DOE and contractor officials describe defense 
programs oversight as creating an inverted management pyramid, 
because the number of reviewers exceeds the number of hands-on 
workers. Contractors have cited examples where the work done by 
two or three people becomes the subject of review meetings 
involving 40 or more defense programs officials.
    That example cites only the problem internal to defense 
programs. The problem expands exponentially when reviewers from 
other oversight functions are included. I can tell you it is 
sometimes hard to figure out just who is responsible. We have 
programs within one office complying with policies set by a 
second office in accordance with procedures set by a third 
office, verified by a fourth office. When you look at something 
like that, you have to wonder who is in charge.
    The myriad of oversight and review does not improve 
performance. To the contrary, in some cases, it diminishes 
performance. It is my view that it is frequently easier to be 
an overseer than to be the responsible party.
    As overseers have multiplied, the line between oversight 
and responsibility has been blurred and sometimes disappears. 
The frequent result is that when mistakes are made, everyone 
thinks they were the overseer and nobody takes responsibility.
    I might also add, Mr. Chairman, that this duplication of 
oversight is tremendously expensive, both in its direct costs 
and because of the delays and inefficiencies it engenders.
    I have come to the conclusion over the last several months 
and as a result of input and conversations with many 
constituents and others who understand these things much better 
than I that now is the time to make some serious management 
change. We should also be fully mindful of the potential 
consequences of that change. Reorganizations are disruptive to 
people. They require lots of time and attention by managers and 
create anxiety among employees. Having overseen a major 
reorganization in State Government, I know that that is true, 
but I have been convinced that straightening lines of authority 
is important enough to warrant this potential disruption.
    So what will we do to improve this situation? Our approach 
should be guided by three principles. First, any legislation 
must strengthen management lines of authority and 
accountability, not just move boxes around on an organizational 
chart. This must be about changing the way that our nuclear 
programs are managed and strengthening the authority of those 
in a clearly defined chain of command.
    Second, our multi-program laboratories must continue to be 
able to do work on a wide range of subjects for many customers. 
Fully one-third of the work conducted at our national 
laboratories is not for the nuclear weapons program. There are 
tremendous advances in knowledge developed in the defense of 
this country that have applications in other areas. Great 
progress has been made in migrating that knowledge to other 
areas. Whether it is research in engine efficiency, 
supercomputing, micromachines, semiconductors, or 
nonproliferation, the labs must continue to be able to do work 
for others. Indeed, if we implement this correctly, we should 
enhance their ability to do so.
    Third, the independent agency within the Department of 
Energy must have necessary support staff and functions within 
it to operate independently. The whole point is for the head of 
this new agency to be accountable and not subject to other 
directorates within the DOE.
    Let me say a final word, Mr. Chairman, about the 
alternatives in front of us. Some have proposed that this 
complex be turned over to the Department of Defense. I believe 
that is wrong for the same reasons it was wrong when the Atomic 
Energy Commission was created. Those responsible for deciding 
how to use nuclear weapons in war should not have the authority 
for designing and building them. The reasoning was sound then 
and it is sound now.
    There are others who would turn our national laboratories 
into civil service institutions as government-run labs. If 
there is one thing that has protected the laboratories from 
being completely choked by DOE management, it is that they are 
operated by contractors who bring some non-government 
management experience to the laboratories. Sandia's 
relationship with AT&T and then Lockheed Martin Corporation has 
been a relationship that has benefited the lab and the country. 
We want to make sure that we do not damage that which we are 
trying to protect.
    Mr. Chairman, the national laboratories, especially the 
ones in my State, literally saved millions of lives through 
their work in World War II and during the Cold War. They abound 
with dedicated, patriotic, and truly gifted men and women 
working for this Nation's security as their top priority. We 
should not scapegoat the labs or the people that work there. We 
need a fundamental reemphasis on the nuclear weapons work at 
the Department of Energy, recognizing that the rules and 
regimes that govern the rest of DOE cannot be entirely used in 
the nuclear weapons complex.
    I believe that the best approach now on the table comes 
from the Senate, the Kyl-Domenici-Murkowski amendment, because 
it is a true chain of command approach with all the discipline 
that entails. I truly believe that this approach, if it had 
been used in the past, may well have avoided some of the 
security problems we have now discovered and that this approach 
will help us avoid them in the future.
    I hope that the committee will find my comments useful as 
it continues its work. Thank you, sir.
    Mr. Barton. Thank you.
    I recognize the distinguished full committee chairman, Mr. 
Bliley, and understand that you just want to put your opening 
statement in the record, is that correct?
    Chairman Bliley. That is correct, Mr. Chairman.
    Mr. Barton. We appreciate your attendance at the hearing.
    The gentleman from Maryland, Mr. Wynn, is recognized for an 
opening statement.
    Mr. Wynn. Thank you, Mr. Chairman. I genuinely appreciate 
your calling this hearing this morning to deal with what I 
consider to be a very serious problem, the consequential loss 
of classified materials and weapons design information, as well 
as giving us an opportunity to explore the protection of the 
public's health and safety in this important area. Needless to 
say, both the Cox report and the Rudman report have clearly 
outlined serious breaches in our national security, 
specifically China's acquisition of U.S. technology.
    Without belaboring the point, Mr. Chairman, I would just 
say quite briefly that we need changes not only in Washington, 
but equally important, we need them at the field level. If we 
do not make significant reforms at the contractor-run labs and 
facilities, our efforts at preventing further breaches will not 
be effective, and I hope in the course of this testimony, 
significant emphasis will be given not to, as my colleague 
said, moving boxes around here in Washington, but what we do in 
a very practical way with the people who are on the front lines 
because that is where the problem actually occurred and we need 
to have some reforms there as well as here in Washington.
    I relinquish the balance of my time.
    Mr. Barton. I thank the gentleman from Maryland.
    I would recognize the gentleman from Michigan, Congressman 
Ehlers, for an opening statement.
    Mr. Ehlers. Thank you, Mr. Chairman. In the interest of 
time, I will be very brief.
    I would simply point out, DOE has a problem. In fact, we 
could say DOE is the problem. But I think we also have to 
recognize, as Mrs. Wilson has pointed out, that we have some 
outstanding scientific work done by some outstanding scientists 
at these laboratories. In fact, it is the leading research in 
the world. The problem we face here is not simply how do we 
correct the administrative problems, the management problems, 
but also how do we do that while continuing to maintain this 
outstanding research and continuing to support the research 
scientists and keep them out of the fray so that the work that 
they are doing will continue unhindered. I hope that we are 
able to do that. Thank you.
    Mr. Barton. I thank the gentleman.
    I would recognize the gentleman from Ohio, Congressman 
Sawyer, for an opening statement.
    Mr. Sawyer. Thank you very much, Mr. Chairman. I will not 
read my entire statement, but I would like to associate myself 
with most of the remarks of the previous three speakers, 
particularly the gentleman from Michigan, Mr. Ehlers. He has 
put his finger on the heart of what I believe to be what is 
most at risk in a too rapid approach to reorganization, and 
that is not the culture that has preoccupied so many of us with 
regard to security but rather the culture of science that is at 
the heart of the research that has gone on at our national 
laboratories. Each of the three speakers previous to me have 
touched on that in one or another way and I would like to 
reiterate that.
    Working from the ground up is really at the heart of 
finding that solution and understanding that the civilian 
science and the weapons work that has gone on at our 
laboratories throughout their existence has never been easy, 
but the interrelationship has always been important. Preserving 
that is at the heart of what we need to do, while enhancing the 
security that is a necessary concomitant of that work.
    With that, Mr. Chairman, I would like to submit the rest of 
my statement for the record and surrender the balance of my 
time.
    Mr. Barton. We thank the gentleman.
    [The prepared statement of Hon. Thomas C. Sawyer follows:]
 Prepared Statement of Thomas C. Sawyer, a Representative in Congress 
                         from the State of Ohio
    The semi-autonomous agency that Secretary Richardson agreed to last 
week will be the first major reorganization of the nuclear weapons 
complex in more than two decades. The ramifications of this new agency 
should be fully considered by Congress. I am concerned that the current 
legislative proposals to create this new agency have been hastily put 
forth without proper Committee examination.
    The Rudman Report rightfully concludes that the Department of 
Energy ``has a deeply rooted culture of low regard for and, at times, 
hostility to security issues.'' However, it is not clear to me how the 
proposed semi-autonomous organization would address this underlying 
culture. Current proposals offer a quick fix--streamlining the chain of 
command from the Secretary of Energy to the head of the new semi-
autonomous agency, and from that agency to Congress. Yet, how can this 
top-down approach be enforced in the field? In order for DOE 
reorganization to be effective, accountability must run out to the 
field level. Current legislative proposals simply do not reach far 
enough. The problems in our Nation's labs are profound and deserve a 
more comprehensive solution.
    Furthermore, I am concerned that these legislative proposals will 
weaken environmental, health and safety oversight. A new semi-
autonomous organization focused on weapons development is likely to pay 
less rather than more attention to these issues. While it is important 
to shore up security in our nation's labs, we cannot throw out the baby 
with the bath water--we cannot destroy hard won environmental, safety 
and health standards while trying to restructure DOE's security 
structure.
    Senator Rudman testified before this Committee that it was not his 
intention to move environmental, health and safety oversight over to 
the proposed semi-autonomous organization. Yet, both the Kyle amendment 
and the House DOD authorization bill--the two main legislative vehicles 
addressing DOE reform--would create a semi-autonomous organization with 
little environmental, safety or health accountability.
    I am also concerned that current legislative proposals draw a 
division at the facility level; causing tensions between science and 
weapons technology in the same lab. For example, the labs at Los 
Alamos, Sandia, Livermore have both nuclear weapons work and life 
sciences. It appears that the new security organization would separate 
civilian science and weapons work, compromising important scientific 
interaction.
    While well intentioned, I am not convinced that current proposals 
have properly addressed the security concerns at Department of Energy. 
In fact, I would venture to say that the solutions offered thus far 
would do more harm than good. I hope that the witnesses today will 
address the pros and cons of the proposed reorganization, and also 
address other solutions that the Commerce Committee should consider.

    Mr. Barton. I would recognize the gentleman from Washington 
State, Congressman Metcalf, for an opening statement.
    Mr. Metcalf. It has been pretty well been said, and in the 
interest of time, at this time, I will pass.
    Mr. Barton. I would recognize the gentleman from Oklahoma, 
Mr. Largent, for an opening statement.
    Mr. Largent. No statement.
    Mr. Barton. Mr. Miller, we recognize you for an opening 
statement.
    Mr. Miller. It is good to be here. For the sake of time, I 
will submit my statement for the record.
    [Additional statement submitted for the record follows:]
Prepared Statement of Hon. Ted Strickland, a Representative in Congress 
                         from the State of Ohio
    Thank you, Mr. Chairman. As you know, one of the U.S. Enrichment 
Corporation's (USEC) uranium enrichment plants is located in my 
district in Piketon, Ohio. My colleague from Kentucky, Mr. Whitfield 
represents a similar facility in Paducah, Kentucky. Both of these 
plants were privatized last year and are operated by USEC, Inc. 
However, the DOE is responsible for the environmental work being 
conducted at the site.
    Since privatization, the workers at Pikerton find themselves 
answering to more than one landlord. And, to make matters even more 
complicated, the DOE contractor responsible for the environmental 
cleanup is in the process of subcontracting a majority of their work. 
Furthermore, the Office of Nuclear Energy, Science and Technology is 
the agency primarily responsible for the Department's program designed 
to stabilize the potentially hazardous material resulting from the 
enrichment process. While I recognize that the uranium enrichment 
plants may represent a unique situation, the lack of overall 
coordination at the sites raises some serious concerns. Mr. Whitfield 
and I have been working with the Department to ensure that both of the 
enrichment facilities have greater oversight at headquarters. While I 
am encouraged by the Department's responsiveness and hope that we will 
continue to make progress on these issues, I remain concerned that the 
existing structure is too convoluted for effective management.
    Today, we are here to discuss proposals to restructure the DOE to 
respond to serious national security problems associated with work at 
DOE Laboratories. I shared with you the circumstances faced by Piketon 
and Paducah because they provide an example of what happens when in a 
complex organizational structure, ultimate authority over decision-
making becomes fractured and unclear--decisions made by one entity may 
directly conflict with decisions made by another. Without a well-
defined decision-making process with a direct and consistent link to 
headquarters, the mission of the organization suffers. I have seen 
evidence that this is happening at Piketon and I fear that the 
establishment of a semi-autonomous Agency for Nuclear Stewardship 
within DOE will further complicate the department's ability to 
accomplish its mission.
    Given the seriousness of the national security problems facing DOE, 
I question the wisdom of restructuring the decision-making process in a 
manner that effectively eliminates the Secretary's ability to respond 
to security needs, programmatic priorities and budget conflicts in a 
comprehensive manner and therefore potentially fails to solve the real 
problems we are addressing today.

    Mr. Barton. All members present, having had the opportunity 
to give an opening statement, either giving one or yielding 
that time, we will now welcome our first panel, and our only 
panel, to this joint hearing. Each of you gentleman and lady, 
your statement will be in the record in its entirety.
    We will start with Mr. Rezendes of the GAO and we will go 
right down the line. We are told that Dr. Happer is in traffic, 
but, hopefully, he will be here by the time we get through the 
first four and then we will give him an opportunity.
    We welcome someone who is no stranger to the Energy and 
Commerce Committee, Mr. Victor Rezendes, who has told me that 
this will be his last appearance before this committee or 
subcommittee in his current capacity. We welcome you today and 
we thank you for your past testimony and your good work on 
behalf of the taxpayers. You are recognized for 7 minutes.

 STATEMENT OF VICTOR S. REZENDES, DIRECTOR, ENERGY, RESOURCES, 
    AND SCIENCE ISSUES, RESOURCES, COMMUNITY, AND ECONOMIC 
        DEVELOPMENT DIVISION, GENERAL ACCOUNTING OFFICE

    Mr. Rezendes. Thank you, Mr. Chairman. It is a pleasure to 
be here today to testify on reorganizing DOE. We recently 
testified before this committee that security problems at DOE's 
national laboratories reflect a lack of accountability. 
Security problems have languished for years without resolution 
or repercussion to those responsible. Achieving accountability 
in DOE is made difficult by its complex and ever-changing 
organizational structure. Past advisory groups and internal DOE 
studies have often reported on the Department's dysfunctional 
structure, with unclear chains of command among headquarters, 
field offices, and contractors.
    While the current security lapses raise serious concerns, 
they are just the management problem du jour. Problems in 
environmental cleanup, health and safety, and science could 
easily have triggered today's debate.
    Events in 1997 at Brookhaven National Laboratory in New 
York illustrate the consequences of organizational confusion 
and accountability lapses. The Secretary of Energy at the time, 
Frederico Pena, fired the contractor operating the laboratory 
when he learned that the contractor had breached the 
community's trust by failing to ensure it could operate safely. 
DOE's own oversight report on Brookhaven concluded that the 
Department did not have a clear chain of command over 
environmental, safety, and health matters, and as a result, the 
performance suffered in the absence of DOE's accountability.
    To correct meandering lines of authority, operations 
officers now report directly to program officers, but this 
approach to reporting was tried under former Secretary Watkins 
and was eventually abandoned when the field and laboratory 
staff became frustrated of having to report to both program and 
staff offices on similar issues. Furthermore, DOE's reluctance 
to allow external oversight for nuclear safety and worker 
health and safety at its facilities perpetuates the 
Department's lack of accountability.
    To solve recent national security problems, several 
organizational reorganization options have been proposed. While 
each proposal clarifies some lines of authority in the national 
security area, they are a piecemeal approach and ignore the 
broader organizational issues. Historically, DOE has made 
piecemeal changes in response to contemporary problems without 
undertaking a more fundamental assessment of its missions. None 
of these efforts have had long-term success. Reorganization 
efforts that ignore the broader picture could create new, 
unintended consequences.
    To gain insight into DOE's structural issues, experts we 
consulted in 1994 supported the view that, as a minimum, a 
serious reevaluation of DOE is called for. Our respondents 
included a former President, four former Secretaries, Deputies, 
and Under Secretaries and Assistant Secretaries of the 
Department of Energy. Overwhelmingly, the respondents 
emphasized that DOE should focus on its core missions. A 
majority favored moving many of the remaining missions from DOE 
to other entities.
    DOE is taking some steps to improve management. Although 
these changes are important, they assume that the existing 
missions are still valid in their present forms and that DOE is 
still the best place to manage them. We believe a more 
fundamental rethinking of the missions is in order.
    Two fundamental questions might be helpful here. First is 
which missions should be eliminated because they are no longer 
valid government functions. Second, for those missions that are 
governmental, what is the best organizational placement 
responsibilities? Once agreement is reached on the appropriate 
governmental missions, a practical set of criteria can be used 
to evaluate the organizational structures for each mission.
    Finally, another set of criteria developed by the National 
Academy of Public Administration in another context could be 
useful in determining whether DOE should remain a cabinet-level 
department. Although DOE has a strategic plan, it assumes the 
validity of its existing missions and their placement in the 
Department. But DOE alone cannot make these determinations. Our 
work has shown, to be effective, decisions about structure and 
functions of the Federal Government should be made in a 
thorough manner with careful attention to the effects of change 
in one organization on the working of other organizations.
    Thank you, Mr. Chairman.
    [The prepared statement of Victor S. Rezendes follows:]
Prepared Statement of Victor S. Rezendes, Director, Energy, Resources, 
  and Science Issues, Resources, Community, and Economic Development 
           Division, United States General Accounting Office
    Messrs. Chairmen and Members of the Subcommittees: We are here 
today to testify on proposals for reorganizing the Department of Energy 
(DOE). As you know, there is renewed concern about DOE's management of 
its missions after recent revelations that foreign countries have 
obtained nuclear weapons designs and other classified information. Our 
testimony today discusses (1) long-standing weaknesses in DOE's 
management that we have identified over the past several years, (2) the 
effect that current proposals to deal with national security weaknesses 
would have on addressing these weaknesses, and (3) a framework for 
evaluating DOE's missions and possible reorganization. Our testimony is 
based on our management reviews of DOE and our past and ongoing work on 
a wide variety of DOE programs and activities.1
---------------------------------------------------------------------------
    \1\ A list of related products appears at the end of this 
statement.
---------------------------------------------------------------------------
    In summary, the current security problems facing DOE underscore 
long-standing weaknesses in the Department's management structure and 
processes. While the current security lapses raise serious concerns, 
any number of past DOE management problems could have easily triggered 
today's debate. For example, DOE's long-standing failures in managing 
major environmental cleanup projects also illustrate the need to 
fundamentally change how DOE operates. At the core of DOE's weaknesses 
is its inability to manage its disparate missions within a highly 
complex organizational structure. In particular, unclear lines of 
authority throughout DOE have long resulted in weak oversight of 
contractors and poor accountability for program management, leading us 
to identify contracting as a ``high risk'' activity. For decades, DOE 
has failed to respond to reports by us, external experts, and its own 
consultants that highlight these weaknesses. Additionally, DOE has 
resisted independent regulatory oversight over nuclear and worker 
safety, perpetuating a perception that it lacks accountability. DOE has 
also been reluctant to open up key laboratory contracts to new bidders, 
reducing confidence that it has hired the most capable and responsive 
contractor.
    While the recent proposals for reorganizing DOE's national security 
mission will clarify some lines of authority, a more complete solution 
is needed. Current proposals assume that existing missions are still 
valid in their present forms and that DOE is still the best place to 
manage them. Along with many of the experts we surveyed, we think a 
more fundamental rethinking of missions is in order. A framework exists 
for evaluating DOE's missions by asking basic questions about both the 
validity of missions and their organizational placement. Indeed, now is 
an ideal time for reconstructing DOE into a more manageable agency.
Background
    Created predominantly to deal with the energy crisis of the 1970s, 
DOE's mission and budget priorities have changed dramatically over 
time. By the early 1980s, its nuclear weapons production had grown 
substantially; and following revelations about environmental 
mismanagement in the mid-to-late-1980s, DOE's cleanup budget began to 
expand--and now overshadows other activities. With the Cold War's end, 
DOE found new or expanded missions in industrial competitiveness and 
science. Responding to changing missions and priorities with 
organizational structures, processes, and practices that had been 
established largely to build nuclear weapons has been a daunting task 
for DOE. For example, DOE's approach to contract management, first 
created during the World War II Manhattan Project, allowed private 
contractors to manage and operate billion-dollar facilities with 
minimal direct federal oversight, yet reimbursed them for all their 
costs regardless of their actual achievements. After a number of 
reports by us and other oversight groups, DOE is now attempting to 
impose modern standards for accountability and performance.
DOE Has Long-Standing Management Weaknesses
    We recently testified that security problems at DOE's laboratories 
reflect a lack of accountability.2 The well-documented 
history of security lapses in the nuclear weapons complex shows that 
DOE fails to hold its contractors accountable for meeting essential 
responsibilities. Achieving accountability in DOE is made difficult by 
its complex and ever-changing organizational structure. Past advisory 
groups and internal DOE studies have often reported on the Department's 
dysfunctional structure, with unclear chains of command among 
headquarters, field offices, and contractors. For example:

    \2\ Department of Energy: Key Factors Underlying Security Problems 
at DOE Facilities (GAO/T-RCED-99-159, April 20, 1999).
---------------------------------------------------------------------------
 The FBI, which examined DOE's counterintelligence activities 
        in 1997, noted a gap between authority and responsibility, 
        particularly when national interests compete with the 
        specialized interests of the academic or corporate managements 
        that operate the laboratories. The FBI found that the autonomy 
        that DOE grants has made national guidance, oversight, and 
        accountability of counterintelligence programs arduous and 
        inefficient.
 A 1997 report by the Institute for Defense Analyses (IDA) 
        cited serious flaws in DOE's organizational structure. IDA 
        noted long-standing concerns in DOE about how best to define 
        the relationships between field offices and the headquarters 
        program offices that sponsor work. IDA concluded that ``the 
        overall picture that emerges is one of considerable confusion 
        over vertical relationships and the roles of line and staff 
        officials.'' As a consequence of DOE's complex structure, the 
        Institute reported, unclear chains of command led to the weak 
        integration of programs and functions across the Department and 
        confusion over the difference between line and staff 
        roles.3
---------------------------------------------------------------------------
    \3\ The Organization and Management of the Nuclear Weapons Program, 
Institute for Defense Analyses (March 1997).
---------------------------------------------------------------------------
 A 1997 DOE internal report stated that ``lack of clarity, 
        inconsistency, and variability in the relationship between 
        headquarters management and field organizations has been a 
        longstanding criticism of DOE operations . . . This is 
        particularly true in situations when several headquarters 
        programs fund activities at laboratories.'' 4
---------------------------------------------------------------------------
    \4\ DOE Action Plan for Improved Management of Brookhaven National 
Laboratory, DOE (July 1997).
---------------------------------------------------------------------------
 DOE's Laboratory Operations Board also reported in 1997 that 
        there were inefficiencies due to DOE's complicated management 
        structure. The Board recommended that DOE undertake a major 
        effort to rationalize and simplify its headquarters and field 
        management structure to clarify roles and 
        responsibilities.5
---------------------------------------------------------------------------
    \5\ Department of Energy: Uncertain Progress in Implementing 
National Laboratory Reforms, (GAO/RCED-98-197, Sept. 10, 1998)
---------------------------------------------------------------------------
 As far back as 1982, an advisory group recognized the need for 
        organizational change in DOE. In its 1982 report, DOE's Energy 
        Research Advisory Board noted the ``layering and fractionation 
        of managerial and research and development responsibilities in 
        DOE on an excessive number of horizontal and vertical levels.'' 
        6
---------------------------------------------------------------------------
    \6\ The Department of Energy Multiprogram Laboratories: A Report of 
the Energy Research Advisory Board to the United States Department of 
Energy (Sept. 1982).
---------------------------------------------------------------------------
    Our own work has shown that DOE's success with managing big 
projects is not outstanding. From 1980 through 1996, we found that DOE 
conducted 80 projects that it designated as ``major system 
acquisitions''--its largest and most critical projects--ranging in cost 
from $100 million to billions of dollars.7 As of June 1996, 
31 of the projects had been terminated before completion after total 
expenditures of over $10 billion. Only 15 of the projects were 
completed, and most of them were finished behind schedule and with cost 
overruns. Furthermore, 3 of the 15 completed projects had yet to be 
used for their intended purposes. The remaining 34 projects continue, 
many with substantial overruns and ``schedule slippage.'' For example, 
we found that DOE has spent almost one-half billion dollars building 
the in-tank precipitation facility at its Savannah River location. The 
project was originally expected to cost $103 million and is still not 
completed.8 A National Research Council committee that 
examined DOE's project management skills recently concluded, ``The 
fundamental deficiency is DOE's organization and culture.'' 
9
---------------------------------------------------------------------------
    \7\ Department of Energy: Opportunity to Improve Management of 
Major System Acquisitions, (GAO/RCED-97-17, Nov. 26 1996).
    \8\ Nuclear Waste: Process to Remove Radioactive Waste From 
Savannah River Tanks Fails to Work (GAO/RCED-99-69, Apr. 30, 1999).
    \9\ Improving Project Management In The Department of Energy, 
National Research Council, 1999.
---------------------------------------------------------------------------
    DOE's fundamental organizational problem is that laboratory 
contractors and their field offices receive funding, program direction 
and oversight from several different headquarters offices, which 
sometimes have overlapping responsibilities. Creating a ``clean'' line 
of accountability within DOE's complex structure has not yet been 
achieved.
    The events in 1997 at the Brookhaven National Laboratory in New 
York illustrate the consequences of organizational confusion and 
accountability lapses. The Secretary of Energy at that time--Frederico 
Pena--fired the contractor operating the laboratory when he learned 
that the contractor had breached the community's trust by failing to 
ensure it could operate safely. DOE's own oversight report on 
Brookhaven concluded that the Department did not have a clear chain of 
command over environment, safety, and health matters and, as a result, 
laboratory performance suffered in the absence of DOE accountability. 
In another example, DOE gave the University of California an 
``excellent'' score for managing safeguards and security at the Los 
Alamos National Laboratory for 1998, even though the number of security 
breaches had risen dramatically. Another DOE evaluation, for 1998, 
criticized the University for its handling of safeguards and security 
matters. DOE's complex organization stems from the multiple levels of 
reporting that exist among contractors, field offices, and headquarters 
program offices. To improve accountability, DOE has tried several 
different reporting schemes over the past several years. For example, 
until recently DOE's field units--operations offices--reported directly 
to a central office, under a structure that had been in place for 
several years. Thus, while the Los Alamos National Laboratory is 
primarily funded by Defense Programs, it reported to a field manager 
who, in turn, reported to a central field management office that then 
reported to an Under Secretary. To correct this meandering line of 
authority, operations offices now report directly to program offices. 
But this approach to reporting was tried under former Secretary Watkins 
and was eventually abandoned when field and laboratory staff became 
frustrated by having to report to both program and staff offices on the 
same issues. The former Secretary wanted more direct lines of reporting 
to allow focused attention on environment, safety and health matters.
    Furthermore, DOE's reluctance to allow external oversight for 
nuclear safety and worker health and safety at its facilities 
perpetuates the Department's chronic lack of accountability. Virtually 
all other federal agencies are externally regulated for nuclear and 
worker safety. Similarly, despite a 5-year-old competition policy, DOE 
has never opened up for bidding its multi-billion dollar laboratory 
contracts with the University of California. As a result, DOE cannot 
know whether other contractors could perform better at lower cost than 
the University of California. By contrast, DOE has competed many other 
laboratory contracts.
Current Proposals for Change Are Incomplete and Will Not Address DOE's 
        Major Problems
    We believe that DOE's organizational weaknesses are a major reason 
for the Department's failure to develop long-term solutions to its 
recurring problems. To solve the national security problems revealed in 
recent allegations, several reorganization options have been proposed. 
One approach would create a separate agency within DOE, to be managed 
by a new Under Secretary for National Security. Another would create a 
semiautonomous agency whose director would report directly to the 
Secretary. Another would transfer DOE's nuclear weapons activities to 
the Department of Defense.
    While each of these proposals clarifies some lines of authority in 
the national security area, they are a piecemeal approach to DOE's 
structural problems and ignore the broader organizational issues. 
Historically, DOE has made piecemeal changes in response to 
contemporary problems without undertaking a more fundamental assessment 
of its missions. For example, former Secretary Watkins redirected lines 
of reporting to correct environment, safety, and health deficiencies, 
and former Secretary O'Leary made changes to reflect DOE's expanding 
role in science and technology competitiveness issues. None of these 
efforts had long-term success. Reorganization efforts that ignore the 
broader picture could create new, unintended consequences.
    To gain insight into DOE's structural issues, experts we consulted 
in a 1994 survey supported the view that, at a minimum, a serious 
reevaluation of DOE's basic missions is needed. We surveyed nearly 40 
former DOE executives and experts on energy policy about how the 
Department's missions relate to current and future national priorities. 
Our respondents included a former President, four former Secretaries of 
Energy, former Deputy and Assistant Secretaries of Energy, and 
individuals with distinguished involvement in issues of national energy 
policy.
    Overwhelmingly, those respondents emphasized that DOE should focus 
on its core missions. Many believed that DOE must re-focus its 
attention to such energy-related missions as energy policy, energy 
information, and research and development on energy supply. A majority 
favored removing many of the remaining missions from DOE to other 
agencies or entities. For example, many respondents suggested moving

 basic research to the National Science Foundation, the 
        Commerce or Interior departments, other federal agencies, or a 
        new public-private entity;
 some multiprogram national laboratories to other federal 
        agencies (or sharing their missions with other agencies);
 the management and disposal of civilian nuclear waste to a new 
        public-private organization, a new government agency, or the 
        Environmental Protection Agency (EPA);
 nuclear weapons production and waste cleanup to the Department 
        of Defense (DOD) or a new government agency and waste cleanup 
        to the Environmental Protection Agency;
 environment, safety, and health activities to the 
        Environmental Protection Agency or other federal entities;
 arms control and verification to DOD, the State Department, or 
        a new government nuclear agency;
 activities furthering industrial competitiveness to the 
        Commerce Department or a public-private organization; and
 science education to the National Science Foundation or 
        another federal agency.
    DOE is taking some steps to improve its management of both national 
security activities and its other missions. For example, DOE recently 
realigned several of its national security functions into new offices 
to eliminate overlap and to sharpen focus. To improve its laboratory 
management, a Laboratory Operations Board was created to provide policy 
direction on laboratory mission and management issues. DOE also 
identified four ``business lines'' for making strategic decisions, 
developed ``roadmaps'' for managing its major science and technology 
activities, and began a long-range program to make its contracting 
practices more business-like and results-oriented. Although these 
changes are important, they all assume that existing missions are still 
valid in their present forms and that DOE is still the best place to 
manage them. Along with many of the experts we surveyed, we concluded 
that a more fundamental rethinking of missions is in order.
A Framework Exists for Evaluating DOE's Missions
    Two fundamental questions are a good starting point for developing 
a framework to evaluate the future of DOE and its missions:

 Which missions should be eliminated because they are no longer 
        valid governmental functions?
 For those missions that are governmental, what is the best 
        organizational placement of the responsibilities?
    Once agreement is reached on the appropriate governmental missions, 
a practical set of criteria could be used to evaluate the best 
organizational structure for each mission. These criteria--originally 
used by an advisory panel for evaluating alternative approaches to 
managing DOE's civilian nuclear waste program 10--allow for 
rating each alternative structure on the basis of its ability to 
promote cost-effective practices, attract talented technical 
specialists, be flexible in responding to changing conditions, and be 
accountable to stakeholders. Using these criteria could help identify 
more effective ways to implement missions, particularly those that 
could be privatized or reconfigured under alternative governmental 
forms. Appendix I summarizes these criteria.
---------------------------------------------------------------------------
    \10\ Managing Nuclear Waste--A Better Idea, Advisory Panel on 
Alternative Means of Financing and Managing Radioactive Waste 
Facilities (Dec. 1984).
---------------------------------------------------------------------------
    Our work and others' has revealed the complex balancing of 
considerations in reevaluating missions. In general, deciding the best 
place to manage a specific mission involves assessing the advantages 
and disadvantages of each alternative institution for its potential to 
achieve that mission, produce integrated policy decisions, and improve 
efficiency. Potential efficiency gains (or losses) that might result 
from moving parts of DOE to other agencies need to be balanced against 
the policy reasons that first led to placing that mission in the 
Department.
    For example, transferring the nuclear weapons complex to DOD, as is 
proposed by some, would require carefully considering many policy and 
management issues. Because of the declining strategic role of nuclear 
weapons, some experts argue that DOD might be better able to balance 
resource allocations among nuclear and other types of weapons if the 
weapons complex were completely under its control. Others argue, 
however, that the need to maintain civilian control over nuclear 
weapons outweighs any other advantages and that few gains in efficiency 
would be achieved by employing DOD rather than DOE supervisors. Some 
experts we consulted advocated creating a new federal agency for 
weapons production.
    Similarly, moving the responsibility for cleaning up DOE's defense 
facilities to another agency or to a new institution, as proposed by 
some, requires close scrutiny. For example, a new agency concentrating 
its focus on cleanup exclusively would not have to allocate its 
resources among competing programs and could maximize research and 
development investments by achieving economies of scale in applying 
cleanup technology more broadly. On the other hand, separating cleanup 
responsibility from the agency that created the waste may limit 
incentives to reduce waste and to promote other environmentally 
sensitive approaches. In addition, considerable startup time and costs 
would accompany a new agency, at a time when the Congress is interested 
in limiting the size of government and controlling its costs.
    DOE's task force on the future of the national laboratories (the 
Galvin Task Force) has suggested creating private or federal-private 
corporations to manage most or all of the laboratories.11 
Under this arrangement, nonprofit corporations would operate the 
laboratories under the direction of a board of trustees that would 
channel funding to various laboratories to meet the needs of both 
government and nongovernment entities. DOE would be a customer, rather 
than the direct manager, of the labs. The Galvin proposal raises 
important issues for the Congress to consider, such as how to (1) 
monitor and oversee the expenditure of public funds by privately 
managed and operated entities; (2) continue the laboratories' 
significant responsibilities for addressing environment, safety, and 
health problems at their facilities, some of which are governed by 
legal agreements between DOE, EPA, and the states; and (3) safeguard 
federal access to facilities so that national priorities, including 
national security missions, are met. Other alternatives for managing 
the national labs exist: Each has advantages and disadvantages, and 
each needs to be evaluated in light of the laboratories' capabilities 
for designing nuclear weapons and pursuing other missions of national 
and strategic importance. Furthermore, the government may still need 
facilities dedicated to national and defense missions, a possibility 
that would heavily influence any future organizational decisions.
---------------------------------------------------------------------------
    \11\ The Secretary of Energy asked Robert Galvin, Chairman of 
Motorola Corporation, to chair a task force to analyze the national 
laboratories. Its report was titled Alternative Futures for the 
Department of Energy National Laboratories, Secretary of Energy 
Advisory Board, Task Force on Alternative Futures for the Department of 
Energy National Laboratories (Feb. 1995).
---------------------------------------------------------------------------
    Finally, another set of criteria, developed by the National Academy 
of Public Administration in another context, could be useful for 
determining whether DOE should remain a cabinet-level 
department.12 These criteria, which are summarized in 
appendix II, pose such questions as the following: ``Is there a 
sufficiently broad national purpose for the Department? Are cabinet-
level planning, executive attention, and strategic focus necessary to 
achieve the Department's mission goals? Is cabinet-level status needed 
to address significant issues that otherwise would not be given proper 
attention?''
---------------------------------------------------------------------------
    \12\ Evaluation of Proposals to Establish a Department of Veterans 
Affairs (Mar. 1988).
---------------------------------------------------------------------------
    Although DOE has a strategic plan, it assumes the validity of the 
existing missions and their placement in the Department. But DOE alone 
cannot make these determinations. They require a cooperative effort 
among all stakeholders, with the Congress and the administration 
responsible for deciding which missions are needed and how best to 
implement them. The requirements of the Government Performance and 
Results Act reinforce this concept by providing a legislative vehicle 
for the Congress and agencies to use to improve the way government 
works. The act requires, among other things, strategic plans based on 
consultation with the Congress and other stakeholders. These 
discussions are an important opportunity for the Congress and the 
executive branch to jointly reassess and clarify the agencies' missions 
and desired outcomes.13
---------------------------------------------------------------------------
    \13\ Managing for Results: Key Steps and Challenges in Implementing 
GPRA in Science Agencies (GAO/T-GGD/RCED-96-214, July 10, 1996).
---------------------------------------------------------------------------
    Our work has shown that to be effective, decisions about the 
structure and functions of the federal government should be made in a 
thorough manner, with careful attention to the effects of changes in 
one agency on the workings of other agencies.14 
Specifically, reorganization demands a coordinated approach, within and 
across agency lines, supported by a solid consensus for change; it 
should seek to achieve specific, identifiable goals; attention must be 
paid to how the federal government exercises its role; and sustained 
oversight by the Congress is needed to ensure effective implementation.
---------------------------------------------------------------------------
    \14\ Government Reorganization: Issues and Principles (GAO/T-GGD/
AIMD-95-166, May 17, 1995).
---------------------------------------------------------------------------
    Messrs. Chairmen, this concludes our statement. We would be happy 
to respond to any questions you or Members of the Subcommittees may 
have.
Contacts and Acknowledgements
    For future contacts regarding this testimony, please call Victor 
Rezendes at (202) 512-3841. Individuals making key contributions to 
this testimony included Gary R. Boss, William Lanouette, and Melissa 
Francis.
                               Appendix I
                 criteria for evaluating doe's missions
    The following criteria, adapted from a former DOE advisory panel 
that examined the Department's civilian nuclear waste program, offers a 
useful framework for evaluating alternative ways to manage missions. 
These criteria were created to judge the potential value of several 
different organizational arrangements that included an independent 
federal commission, a mixed government-private corporation, and a 
private corporation.
    Mission orientation and focus: Will the institution be able to 
focus on its mission(s) or will it be encumbered by other priorities? 
Which organizational structure will provide the greatest focus on its 
mission(s)?
    Credibility: Will the organizational structure be credible, thus 
gaining public support for its action?
    Stability and continuity: Will the institution be able to plan for 
its own future without undue concern for its survival?
    Programmatic authority: Will the institution be free to exercise 
needed authority to accomplish its mission(s) without excessive 
oversight and control from external sources?
    Accessibility: Will stakeholders (both federal and state overseers 
as well as the public) have easy access to senior management?
    Responsiveness: Will the institution be structured to be responsive 
to all its stakeholders?
    Internal flexibility: Will the institution be able to change its 
internal systems, organization, and style to adapt to changing 
conditions?
    Political accountability: How accountable will the institution be 
to political sources, principally the Congress and the President?
    Immunity from political interference: Will the institution be 
sufficiently free from excessive and destructive political forces?
    Ability to stimulate cost-effectiveness: How well will the 
institution be able to encourage cost-effective solutions?
    Technical excellence: Will the institution attract and retain 
highly competent people with the requisite skills needed to accomplish 
its mission?
    Ease of transition: What will be the costs (both financial and 
psychological) of changing to a different institution?
                              Appendix II
              criteria for evaluating cabinet-level status
    The following criteria were developed by the National Academy of 
Public Administration as an aid to deciding whether a government 
organization should be elevated to be a cabinet department. However, 
they raise issues that are relevant in judging cabinet-level status in 
general.
    1. Does the agency or set of programs serve a broad national goal 
or purpose not exclusively identified with a single class, occupation, 
discipline, region, or sector of society?
    2. Are there significant issues in the subject area that (1) would 
be better assessed or met by elevating the agency to a department, and 
(2) are not now adequately recognized or addressed by the existing 
organization, the President, or the Congress?
    3. Is there evidence of impending changes in the type and number of 
pressures on the institution that would be better addressed if it were 
made a department? Are such changes expected to continue into the 
future?
    4. Would a department increase the visibility of, and thereby 
substantially strengthen the active political and public support for, 
actions and programs to enhance the existing agency's goals?
    5. Is there evidence that becoming a department would provide 
better analysis, expression, and advocacy of the needs and programs 
that constitute the agency's responsibilities?
    6. Is there evidence that elevation to a cabinet department would 
improve the accomplishment of the existing agency's goals?
    7. Is a department required to better coordinate or consolidate 
programs and functions that are now scattered throughout other agencies 
in the executive branch of government?
    8. Is there evidence that a department--with increased centralized 
political authority--would result in a more effective balance within 
the agency between integrated central strategic planning and resource 
allocation and the direct participation in management decisions by the 
line officers who are responsible for directing and managing the 
agency's programs?
    9. Is there evidence of significant structural, management, or 
operational weaknesses in the existing organization that could be 
better corrected by elevation to a department?
    10. Is there evidence that there are external barriers and 
impediments to timely decision-making and executive action that could 
be detrimental to improving the efficiency of the existing agency's 
programs? Would elevation to a department remove or mitigate these 
impediments?
    11. Would elevation to a department help recruit and retain better 
qualified leadership within the existing agency?
    12. Would elevation to a department promote more uniform 
achievement of broad, cross-cutting national policy goals?
    13. Would elevation to a department strengthen the Cabinet and the 
Executive Office of the President as policy and management aids for the 
President?
    14. Would elevation to a department have a beneficial or 
detrimental effect upon the oversight and accountability of the agency 
to the President and the Congress.

                          RELATED GAO PRODUCTS

    Department of Energy: Key Factors Underlying Security Problems at 
DOE Facilities (GAO/T-RCED-99-159, Apr. 20, 1999)
    Department of Energy: Uncertain Progress in Implementing National 
Laboratory Reforms (GAO/RCED-98-197, Sept. 10, 1998).
    Department of Energy: Contract Reform Is Progressing but Full 
Implementation Will Take Years (GAO/RCED-97-18, Dec. 10, 1996).
    Department of Energy: Opportunity to Improve Management of Major 
System Acquisitions (GAO/RCED-97-17, Nov. 26, 1996).
    Department of Energy: A Framework For Restructuring DOE and Its 
Missions (GAO/RCED-95-197, Aug. 21, 1995).
    Department of Energy: National Laboratories Need Clearer Missions 
and Better Management (GAO/RCED-95-10, Jan. 27, 1995).
    Department of Energy: Challenges to Implementing Contract Reform 
(GAO/RCED-94-150, Mar. 24, 1994).

    Mr. Barton. You surprised me. I thought you were just 
getting warmed up.
    We want to recognize now Major General George McFadden, 
United States Army, Retired, the former Director of Security 
for the Department of Energy. Your statement is in the record 
and we will give you 7 minutes to elaborate on it, sir.

 STATEMENT OF GEORGE L. McFADDEN, FORMER DIRECTOR OF SECURITY, 
                      DEPARTMENT OF ENERGY

    Mr. McFadden. Mr. Chairman, I thank you very much for the 
opportunity to speak to the committee today. I certainly will 
hold my remarks as they concern security because that is my 
area of expertise.
    The Office of Security Affairs was designed to solve some 
of the problems of the security within DOE during the 1980's. 
There was a Freeze Commission of experts on security that 
looked at all of those problems and came up with a large number 
of recommendations. Among them was to remove security from 
defense programs and to place it in an organization that 
reported directly to the Under Secretary.
    This group that studied this, they studied for 18 months 
and their basis for making this type of an organizational 
change was the fact that they had determined that with this 
security organization within defense programs, the security was 
not receiving the priority that was required and was unable to 
compete for adequate resources. They also moved it because 
working in the defense programs, the security organization was 
not providing the other elements, the other assistant 
secretaries' departments, the security support that was 
required.
    For a short time, about 1 year, security did, in fact, 
report to the Under Secretary of Energy. In 1993, Secretary 
O'Leary reorganized and she organized at that time the Office 
of Nonproliferation and National Security. She moved the 
security organization into that organization. Now, the Director 
of Security reported through the Director of Nonproliferation 
and National Security.
    Unfortunately, the Directors of Nonproliferation and 
National Security were nonproliferation experts who knew little 
and cared little about security. The big interest at that time 
was the nonproliferation aspects of supporting the Russians and 
in getting them a security system, and it was a very laudable 
reason and it should have been. The problem was, it was now 
competing for resources with our domestic security, and as a 
result, shortfalls began to come about because of lack of 
necessary resources.
    We have to make some changes and those changes that must be 
made will have to be changes in budget, organization, and 
attitude, and attitude is a big one and a difficult one to care 
for.
    I know there are a lot of changes that have been both in 
Congress, in the Department itself, and the PFIAB on how to 
solve these problems. I would boil them down simply just so 
that I can speak to each area quickly. The first I looked at 
was the autonomous organization of DOE, the one of moving all 
nuclear things to the Defense Department, and then high-level 
reorganization within DOE.
    The movement of making an autonomous organization within 
DOE, to me, reverts to the system that was used in the 1980's 
and in the past and that was in deep trouble and had been 
changed. So, to me, I look at that as a step backwards. Part of 
the problem is that many scientists see that security prevents 
them from the exchanges that they would like to freely make 
without any restrictions in the international scientific 
community and they also see security as a competitor for 
resources. So when security is in an organization similar to 
defense programs or an autonomous organization, they would then 
be actually competing with the labs and that is not fair 
competition.
    I would say that the type of change that they are talking 
about here would not be a change that would help solve the 
security problem within DOE, and in the long term, I would see 
that it would make that problem worse.
    The movement to defense is a complex, costly, and really 
above my pay grade to talk about, but what I see that that 
proposal would do, it would transfer a problem. Defense has a 
lot of security problems in their own operations and I am not 
sure that they would be very interested in taking it on. But, 
to me, I see it as a shuffle of responsibility, not a solution 
to the problem.
    Now, the third, and that is to develop an organization 
within DOE. I think that Secretary Richardson has established 
the Office of Security Emergency Operations that reports 
directly to him. Now, that is a great first step in the 
organization and one that will certainly take care of many of 
the shortfalls. However, there are certain important aspects of 
organization that are not included in the Secretary's plan at 
the present time.
    One of them that I think is very important is that 
intelligence and counterintelligence are not a part under 
security. Intelligence and counterintelligence are the most 
important aspect of security and they must be coordinated and 
should be basically in the same organization.
    Also, the problem that they have with the budget. When the 
Freeze Commission made their report, they recommended that the 
cross-cut budget be eliminated and that a budget line be put 
in. This was never implemented and this has been and still is a 
part of the problem. My understanding is that the new 
organization in DOE will still work from a cross-cut-like 
budget and that there will not be major budget changes.
    The other aspect that is not included in the new 
organization is part of the real serious problem that they have 
and that is in the field, in the sites, where security has 
been, due to the fact that they were limiting as much as 
possible the number of managers, in many cases, security was 
moved under people like the Manager for Administration. They 
had no way whatsoever of being able to speak to the 
decisionmaker within their organization and to convince them 
that there were, in fact, very serious problems.
    I support change. I think that every professional in 
security in the Department of Energy, and I would like to say, 
Mr. Chairman, that that workforce, and I have been working in 
government for 40-some years, and I would tell you that that 
workforce is a professional organization, probably one of the 
best security organizations in government today, and they will 
be very happy if what comes out of all this consideration is an 
improvement in the organization that will allow them to get 
their job done and provide the security that should be provided 
within the Department of Energy.
    Thank you very much, Mr. Chairman.
    [The prepared statement of George L. McFadden follows:]
                Prepared Statement of George L. McFadden
    Mr. Chairman, thank you for this opportunity to speak with the 
committees this morning about the proposed changes to the Department of 
Energy and especially the status of security in the Department. My 
relationship with the Department of Energy began in November of 1991 
when Under Secretary Tuck hired me as Director of Security Affairs, and 
ended in February 1997 after five frustrating years. The Office of 
Security Affairs had been created as a result of a recommendation by 
the Freeze study, an eighteen month study of DOE Security by an 
independent group of security experts .The study recommended that 
security be removed from Defense Programs and established as a separate 
Office reporting directly to the Under Secretary. The rationale for 
this change was based on the fact that other Assistant Secretaries were 
concerned that their departments were not being adequately supported by 
the Security Office in Defense Programs, but more importantly was the 
concern that security had a low priority with the Defense Program Labs 
and therefore received minimal financial support. The Freeze Study also 
recommended that a security line be established in the budget to 
replace the crosscut budget, but this recommendation was never 
implemented and is a significant part of the current security problems.
    In 1993 Secretary O'Leary created the Office of Nonproliferation 
and National Security and placed the Office of Security Affairs under 
that organization. This action removed the access security then enjoyed 
with senior management. All Directors of the Office of Nonproliferation 
and National Security were specialists in nonproliferation and had 
little knowledge or interest in security. We had created a situation 
where domestic security competed for resources with the US effort to 
improve Russian nuclear security, adding to the lack of concern or 
interest in maintaining our security infrastructure. Support to improve 
Russian nuclear security deserved high priority, but it should not have 
resulted in reduction of our domestic capabilities, especially when 
terrorist activities and threats had increased.
    During this same period security staffs were reduced significantly 
in the headquarters and the Field and Area offices.The effort to reduce 
the number of managers resulted in field security offices reporting to 
other low level managers with little or no access to decision makers. 
The long term impact was a continued deterioration of security at the 
sites.The frustrated professional security managers had no voice and no 
ability to convince the senior managers that the threat was real.
    The results of the actions listed briefly in opening paragraphs 
have led to serious security shortfalls that require immediate and 
significant changes. The changes must include budget, organization and 
attitude.
    The following paragraphs will speak to three recommendations:

1. Establish a semi-autonomous Nuclear organization within DOE.
2. Move all things nuclear to Defense Department.
3. Establish a high level security department in DOE.
    1. The first recommendation would reestablish the situation that 
caused the security problems of the 1980s.The Labs would prefer to 
spend resources on research and many scientists consider security 
requirements as preventing full International exchange of ideas. It 
would also require the establishment of a separate security 
organization for the rest of DOE. However, the most important 
deficiency is that security would be a low priority competitor for 
scarce resources.This proposal would not improve the security of our 
nuclear material.
    2. The second recommendation is a very complex and the most 
expensive solution. Why would the DOD want to be saddled with this 
problem? This makes more sense than recommendation 1, but not a 
solution to the security problems, only a shuffle of responsibilities.
    3. The third recommendation should have happened long ago. 
Secretary Richardson seems to have taken the first step by establishing 
the Office of Security and Emergency Operations reporting directly to 
the Secretary.The key element that is not included in this plan is the 
inclusion in this security organization of Intelligence and Counter-
Intelligence.The new organization should include these very important 
security elements despite predictable resistance from the Intelligence 
community. Hopefully the responsible committees of Congress will 
cooperate in allowing the budget changes that will be required, even 
though their staffs have not supported the proposal for a separate 
budget in the past.
Summary:
    Any change in the Department of Energy structure that will correct 
the problems of the past will be received positively by the very 
professional but frustrated security workforce that often receives the 
blame for problems they recognized and reported but did not have the 
ear of the decision maker, or their pleas were ignored for political or 
budget reasons. The most viable of the three recommendations is number 
3 or a variation that provides high level access to management, and 
budget authority that does not compete with more popular programs. 
Similar organizational changes are required at Field and Area Offices.

    Mr. Barton. Thank you, General.
    I would now like to welcome Dr. William Happer, who is a 
professor of physics at Princeton University. He is former 
Director of the Office of Energy Research at the Department of 
Energy. It is good to have you before us again. We are glad 
that you made it. Your statement is in the record in its 
entirety and we recognize you for 7 minutes.

  STATEMENT OF WILLIAM HAPPER, PROFESSOR OF PHYSICS, PRINCETON 
                           UNIVERSITY

    Mr. Happer. Thank you very much, Mr. Chairman and members 
of the committee. I appreciate this opportunity to share my 
thoughts with you.
    I have been in DOE from the inside, so I know what it is 
like. I agree with the General that security is very important 
and has not been done very well.
    I think it is very clear from what all of us have seen, and 
what I have seen personally, is that the current structure of 
DOE is not working very well. Nobody thinks they have enough 
funds to do their job. Security does not think they have enough 
funds. Personnel does not think they have enough funds. 
Everyone is looking to buildup their staff, their FTEs, their 
SESs. So that is natural in a bureaucracy.
    Someone has to take the responsibility of doing the 
balancing that is required to make that organization run, and 
we know it is not running very well now, so I think that it is 
worth trying the semi-autonomous organization within DOE that 
has been proposed by the Rudman Commission, some variant of 
that. I think keeping it within DOE is very important because 
there are strong synergisms with other things that DOE does, 
the science mission, for example, and weapons are something 
that involves very, very detailed science, and especially with 
no testing involved, that will become even more important. They 
have to be able to reach out to the other parts of DOE and, in 
fact, to the rest of the world to get the sort of information 
that is required.
    I listened very carefully to what General McFadden had to 
say about security and I certainly agree that the programs are 
reluctant to surrender any money for anything that is not 
advancing science or advancing whatever the weapons stewardship 
issue of the day happens to be. However, I think that you have 
to be careful about any organization within DOE letting it set 
its own agenda, its own staffing, its own budget.
    We have securities within our own bodies. We have a nice 
system of white blood cells and antibodies, and if that is 
working right, we do okay. If it stops working, we die of 
disease. And if it starts working too well, we die of 
autoimmune diseases. We get Lou Gehrig's disease or something 
like that and our own immune system kills us. So there is 
always an optimum of every function in our own bodies and also 
in a bureaucracy, and so someone has to be charged with looking 
at the interactions of these different functions, of security, 
of mission, personnel, and making sure that that balance is 
properly distributed.
    I think that an Under Secretary who is directly charged 
with that, who is the owner of that and who is accountable for 
that and has nothing else to worry about except for the defense 
programs, which is a very important part of DOE, would help to 
solve this. The issue is the sort of person that you put in, 
the scrutiny that he or she gets, and if they do not do it 
right, they should be replaced.
    I would like to add one more thing, since I have had a 
chance to look at the science mission very carefully in DOE. I 
do not think that this organization would have any bad effect 
on science. The actual workers within defense programs and 
within the science labs know each other very well. They have 
always managed to work out ways to get work done that is 
essential either in the defense labs or in the science labs. I 
do not think that would change. I think that might even improve 
if there were cleaner lines of command in the defense programs 
area of DOE.
    In summary, I do not think that we can go on the way that 
we have been going. I think that some kind of reorganization is 
required and I would be willing to try some version of the 
Rudman proposal. Thank you, Mr. Chairman.
    [The prepared statement of William Happer follows:]
 Prepared Statement of William Happer, Professor of Physics, Princeton 
                               University
    Thank you for this opportunity to testify on current proposals to 
restructure the DOE. I am a Professor of Physics at Princeton 
University and Chair of the University Research Board. I am also the 
Chairman of the Board and one of the founders of a high-tech startup 
company, Magnetic Imaging Technologies, Inc., which makes images of 
human lungs with laser-polarized gases. So I have experience with the 
business world outside of academia. I have had a long familiarity with 
the activities of DOE, as a practicing scientist, as a member of 
advisory committees for DOE Weapons Laboratories and Science 
Laboratories, and as the Director of the Office of Energy Research 
under Secretary of Energy James Watkins during the Bush administration.
    The DOE has many missions, but none more important than nuclear 
stewardship, that is, ensuring the safety, security and reliability of 
the US nuclear stockpile. Connected with this mission are--or at least 
used to be--many others, the construction and operation of nuclear 
reactors for the production of special nuclear materials, the 
enrichment of stable isotopes, the construction of scientific 
facilities to learn more about the fundamental scientific issues 
connected with nuclear weapons, and how to ensure the safety of those 
working with dangerous materials--radioactive, toxic or both. I could 
go on, but my point is that the DOE weapons program is so challenging 
that it needs the most capable technical, scientific and managerial 
talents available. As long as the United States maintains its own 
nuclear weapons and feels it necessary to cope with those of others, we 
must ensure that the part of DOE responsible for nuclear weapons 
functions as well as possible.
    Regretfully, I must agree with various assessments, stretching back 
many years, that DOE's missions--including the nuclear weapons 
mission--are often poorly managed. The recent Rudman and IDA reports, 
the Galvin report of a few years ago, and many others have clearly 
spelled out what is wrong. The DOE has become a bureaucratic morass, 
with many paper-pushing, regulatory offices competing to build up their 
staffs of FTE's and SES billets, to take credit for successes of 
increasingly-harried, front-line scientists, engineers and technicians, 
and to avoid responsibility for anything that may go wrong. The recent 
revelations of Chinese espionage and the DOE reaction to it are but one 
example of how difficult it is for the DOE to cope with serious real 
and potential problems in the weapons program, and other DOE programs 
as well. So I support a reorganization of DOE along the lines suggested 
in the Rudman report. If a reorganized DOE with a more efficiently 
operating Nuclear Stewardship Agency (NSA) is a result of the Chinese 
espionage, at least we will have some benefit from the regrettable 
affair.
    I have no illusions that a semiautonomous Nuclear Stewardship 
Agency within DOE will correct all of the problems we are struggling 
with, but I am sure that the current DOE structure will not work. I say 
this as a pragmatist and an experimental scientist. We have tried to 
make the current structure work for many years and it always fails. 
When one of my experiments does that again and again, I try something 
else. We have several reasons to be hopeful that a semiautonomous 
agency could work. The example of NSA within the Department of Defense 
(DoD) has often been cited as a successful, semiautonomous agency, and 
there are other precedents like DARPA in DoD or the Naval Reactor 
Program within DOE. I like the word ``Agency,'' which comes from the 
Latin root ``to do.'' An agent does something for you. Some in the 
current structure of DOE and its supervisors seem not to care if 
anything ever gets done. This is not acceptable for any worthwhile 
mission, but it is simply not tolerable for Nuclear Stewardship. 
Nuclear weapons, ours and those of our potential adversaries are real 
and very dangerous. They are too important not to take very seriously.
    There is a wise old saying, sometimes ascribed to the Chinese, that 
``The best fertilizer for a farm is the feet of the owner.'' Someone 
has to own the mission of nuclear stewardship, or at the very least 
someone must be a dedicated Steward. To succeed, the Steward must have 
the means to manage. As best I understand the proposed the Agency for 
Nuclear Stewardship, it will give the Steward both ownership and the 
means to do the job.
    You cannot be a good Steward of the Nuclear Weapons mission of DOE 
unless you control all of the key functions, manufacturing, security, 
research, safety, etc. There is never enough money or enough personnel 
to do everything that is needed, so the Steward will have to balance 
many competing needs: the security of plutonium facilities; human 
resources; environmental, safety and health requirements; research 
needed to ensure that aging nuclear weapons remain safe and effective; 
counterintelligence precautions--the list is extremely long and every 
issue is important. However, someone must make the decision on how to 
distribute finite resources to do the best possible job. With the 
current DOE structure, various offices can demand that this action or 
that be taken with no concern for the broader problem of how to 
optimize finite resources of funds and people. One unfunded mandate 
after another comes down from headquarters or the field office. It is 
not possible to fully respond to all of the mandates. So the poor 
front-line troops do the best they can, and a year later another GAO 
report comes out saying that this or that requirement was not met. 
There is substantial duplication, triplication or even quadruplication 
of roles in DOE, with the front-line DOE contractor, the DOE site 
office, the DOE field office and headquarters all contributing to some 
issues.
    I have testified before that part of DOE's problem is that it has 
too many people at headquarters and in the field offices. I would hope 
that the ANS Steward would not be saddled with making work for every 
DOE employee currently on a payroll related to the ANS mission. But I 
am a realist, and if every employee remains, the system could probably 
still be made to work better with the sort of crisp management 
structure envisaged for the ANS. Almost all of the DOE civil servants I 
met during my time there were good and talented people, determined to 
do something to earn their keep. It is a shame that so many of them are 
used for counterproductive activities.
    Some would say letting the ANS Steward control most of the 
important oversight now assigned to various independent DOE offices 
would be letting the fox watch the hen house. I do not think this needs 
be the case, and in any event the current structure is not working. The 
proposed ANS Steward will have a clear list of responsibilities, and 
will have to report annually to the Secretary of Energy--and through 
the Secretary to the Congress and to the President--on how well these 
responsibilities have been fulfilled, and why the allocation of funds 
and people for safety, security, research programs, etc. is optimum. 
One could also enlist the aid of other federal agencies for periodic 
tests of how well the ANS is fulfilling its mandate. For example, 
another competent federal agency could be tasked to try to penetrate 
the computer security of the ANS.
    Concerns have been raised about possible bad effects of ANS on DOE 
science. Indeed, one of the strengths of the DOE weapons laboratories 
has been the strong basic science done there and the close ties their 
scientists maintain to other DOE laboratories and to the rest of the 
scientific world. This has paid important dividends to our country and 
we do not want to lose these benefits in a restructuring of DOE. One of 
the benchmarks on which the Nuclear Steward will be judged should be 
the health of science in the Weapons Laboratories.
    To help maintain ties of the laboratories to the entire scientific 
world, visits by foreign scientists to the weapons laboratories should 
continue, but we should redouble our efforts to be sure such visits do 
not result in the loss of classified information. Those of you who have 
visited weapons laboratories realize that non-classified scientific 
work is often done ``outside the fence'' where security issues are less 
urgent. The Steward should ensure that there is a graded system of 
visitor controls. It would be silly to follow the same procedures for a 
scientist coming to talk to colleagues about human genome sequencing as 
for one who may be interested in weapons-related topics. Visitor 
controls should be very stringent in the latter case, but relatively 
light in the former.
    I do not think that the ANS need hinder the support by other parts 
of DOE, or by outside agencies, of science at the Weapons Laboratories. 
As a former Director of Office of Energy Research, I saw, at very close 
quarters, how work was funded by my office at the Weapons Laboratories, 
and how other federal agencies--for example, the National Institutes of 
Health, or DARPA-arranged to have work done. The creation of an ANS 
within DOE might actually help the interactions between the Science 
Laboratories and the Weapons Laboratories if it leads to better 
management within the ANS.

    Mr. Barton. Thank you, Dr. Happer.
    We would now like to hear from Dr. Donald Kettl, who is 
professor of public affairs and political science at the 
University of Wisconsin-Madison. Your statement is in the 
record and you are recognized for 7 minutes.

 STATEMENT OF DONALD F. KETTL, PROFESSOR OF PUBLIC AFFAIRS AND 
       POLITICAL SCIENCE, UNIVERSITY OF WISCONSIN-MADISON

    Mr. Kettl. Mr. Chairman, thank you very much. I appreciate 
the opportunity to appear here this morning and to share some 
of the work at the Brookings Institution, where I am a non-
resident senior fellow, and at the University of Wisconsin, 
where we have been doing work on public management. I appear 
before you to try to talk about the question of how to make the 
Department of Energy into a high-performing organization for 
the 21st century, which is really the central issue that we 
face here today.
    I want to try to take out of my testimony three basic 
points that I would like to emphasize. The first is the 
importance of making sure that as we try to fix the problem, we 
fix the right problem. With all of the turmoil and with all of 
the problems that are surrounding the Department of Energy 
right now, it is very easy to go after the wrong kinds of 
things. We have a serious national security problem, a security 
problem that is rooted in 50 years of Department of Energy 
culture, and what has happened is the Department of Energy's 
new missions are transforming in ways that conflict with this 
culture that have grown up over that last 50 years.
    If you look to the future and ask what it is that the 
Department of Energy in the future is going to have to do, it 
will have to try to find ways of managing effectively the 
nuclear stockpile, of ensuring environmental cleanup, safe 
storage of nuclear materials, of engaging in scientific 
research, in short, in doing things that are in some ways 
substantially different from the things that originally caused 
the creation of the Department of Energy back 20 years ago and 
the Department of Energy's previous functions 50 years ago 
before that.
    We have to understand that any kind of restructuring will 
take, at a minimum, 5 years or so to get itself established. If 
we look at what the Internal Revenue Service is now doing in 
the process of trying to reinvent itself, we see that now, 2 
years in, we see just the beginnings of some of what it is that 
the IRS is seeking to do. We need to ask ourselves where we 
want the Department of Energy to be in 5 years and in 10 years, 
what we can do now to ensure that where it is is where it needs 
to be.
    National security is an important part of that, but 
national security is not what DOE does. It must be how it does 
it, and it is very easy to confuse the two and in the process 
undercut the Department's ability to engage in important 
missions like scientific research and environmental cleanup.
    If you look at the way the Nordstrom's Department Store 
operates, it drives home that point. Nordstrom's has the 
reputation of having the premier customer service in the 
department store industry, but Nordstrom's does not do customer 
service. Instead, it makes sure that customer service is how 
its employees do what they do. That is exactly the lesson that 
national security needs to play within a restructured 
Department of Energy. We need to make sure, in short, that we 
fix the right problem.
    Second, we need to fix it so that it stays fixed. The sad 
state of previous reengineerings and restructurings in both the 
public and the private sector, based on pretty clear evidence, 
is that two-thirds of fundamental restructurings and 
reengineerings fail. Two-thirds of reengineerings fail. My 
assessment of the Department of Energy's situation, given some 
of the radical proposals that are being discussed and debated 
in the Congress right now, is that its odds are not even that 
good, that, in fact, unless we are extremely careful, that 
fundamental restructuring could very well succeed in taking a 
bad situation and making it worse.
    If you look, in fact, at what is going on within NASA, 
which, if you remember the Challenger disaster, had a similar 
crisis that forced a similar rethinking of its role and 
mission, the IRS, which also faced a major crisis, the lessons 
that come very clearly from NASA and the IRS are that you 
restructure after you have changed the mindsets and the 
cultures of the employees, not before, and that restructuring 
done in advance, especially in a way that does not ensure 
promotion of the mission, often undercuts what it is that has 
to be done. If you look at the lessons from Chrysler and Wal-
Mart, which engaged in similar kinds of restructurings, the 
lessons again are the same.
    At best, looking first toward restructuring ensures that 
what has to be done takes longer. At worst, the lessons, 
unfortunately, are that restructuring seen only as 
restructuring strengthens the hands of those who seek to block 
change.
    If we are interested in fundamental reform in the 
Department of Energy, we need to reform the culture of the 
Department and especially the culture of the contractors. We 
need to do what we do in Washington to ensure that those 
changes actually take place, and the missing link in many of 
the restructuring proposals now circulating around Congress is 
understanding how the shuffling of the boxes at headquarters 
will, in fact, produce the changes in culture that in the end 
are required to produce the changes that we need. That link is 
missing, and, in fact, to restructure without paying careful 
attention to that runs the risk of making a bad situation much 
worse.
    The third thing is that if we are interested in trying to 
create a high-performing organization for the future, we need 
to make sure we do so with clear accountability for 
performance. The one principle that we have in this country is 
that in the executive branch of government, the Secretary must 
be clearly in charge. Many of the restructuring proposals 
either weaken the role of the Secretary or take the Secretary 
out of the loop. Doing so runs the risk of further causing 
those forces that have blocked change to burrow more deeply 
into the DOE bureaucracy and, therefore, make it more difficult 
to try to engage in the kind of change we are talking about.
    So the first thing that we must do is to make sure the 
Secretary is, in fact, clearly in charge. The Secretary has, in 
fact, already launched a series of reforms and to undercut 
those at this point would be dangerous.
    The second thing we need to do here is to make sure that we 
are sure what it is that we want the Department of Energy to 
do. We need to have a clear mission and focus the Department of 
Energy's resources and structures on getting that mission 
accomplished. That mission is not only ensuring national 
security and not only maintaining the nuclear stockpile, but 
also, in fact, pursuing environmental cleanup and safe storage 
of materials.
    There are those who have, from time to time, sought to try 
to abolish the Department of Energy, but, in fact, if you look 
at what it is the Department of Energy is responsible for 
doing, it is much easier to make a case for the Department of 
Energy's continued existence 50 to 75 years in the future than 
many other things that the government actually does.
    And finally, if we are interested in trying to ensure that 
we have a high-performing organization, we must have a system 
that holds those accountable for results.
    Those, I think, are the three principles. First, make sure 
we fix the right problem. Second, fix it so it stays fixed. And 
third, make sure that as we fix it, we hold people clearly 
accountable for results. Those are the steps, I think, most 
likely to make the Department of Energy into the high-
performing organization of the future that, in fact, the 
country needs.
    [The prepared statement of Donald F. Kettl follows:]
Prepared Statement of Donald F. Kettl, Professor of Public Affairs and 
           Political Science, University of Wisconsin-Madison
Introduction
    As Senator Warren Rudman's report, Science at Its Best, Security at 
Its Worst elegantly makes clear, the Department of Energy's vast 
laboratory and weapons-production complex suffers from serious 
problems. These problems threaten national security. As we reform the 
department, however, we ought to ensure that we actually solve the 
problem--and we must not cripple DOE's capacity to achieve its mission.
    We are now debating the creation of a semi-autonomous Agency for 
Nuclear Stewardship. The Agency would be located inside the Department 
of Energy and under the direction of a new Under Secretary. There are 
also proposals to take DOE's nuclear functions completely out of the 
Department and put them into a new, independent agency or to transfer 
the functions to the Department of Defense.
    How should we think through these options? DOE's problems clearly 
result in part from a dysfunctional organizational structure that is 
the legacy of previous reorganizations dating from the Manhattan 
Project. The Department would benefit from an organizational 
housecleaning. But any restructuring needs to meet six criteria:

 The restructuring must enhance DOE's capacity to perform its 
        mission. DOE has a complex job to do. The structure must 
        support the job to be done.
 The restructuring must improve coordination within DOE--both 
        between headquarters and the field, and among the diverse 
        elements of DOE's mission. We can design failure into the 
        restructuring from the beginning: If we focus single-mindedly 
        on restructuring headquarters without improving links with the 
        field; or if we look only at DOE's nuclear weapons programs 
        without coordinating them with the Department's other 
        activities. The structure must support the much-needed 
        coordination.
 The restructuring must create clear lines of accountability 
        for this mission. DOE now has too many organizational layers 
        between top officials and its field operations. The structure 
        must be clear on who is in charge.
 The restructuring must promote national security. But national 
        security is not what DOE does; it is how it does it. Real 
        reform requires weaving a clear concern for national security 
        into the very fabric of DOE's operations, not trying to make 
        national security itself the mission.
 The restructuring must help redefine DOE's culture. The 
        national security problem flows from a culture rooted deeply in 
        the Department's structure. The new structure must help define 
        and support a new culture that pursues effective results and 
        ensures national security.
 The restructuring must create a high-performing organization. 
        The structure must require DOE to set clear, high standards for 
        performance. It should reward the Department's managers for a 
        good job and impose tough penalties for failure.
    The instinct to reorganize the Department of Energy to attack the 
national-security problem is surely understandable. DOE, in fact, needs 
restructuring. There is grave risk, however, that a restructuring that 
simply re-shuffles boxes at headquarters will fail to solve the real 
problems in the field. In the process we could well stir up so much 
dust that we would lose valuable time in pursuing more fundamental, 
more effective reforms.
We Ought to Make Sure We Solve the Right Problem
    The national-security problems within the DOE complex have their 
roots in the Department's field operations. For decades, the national 
laboratories have produced cutting-edge research. The production 
facilities produced ever-more-effective weapons. Over time, however, 
these operations have bred an organizational culture that, in turn, has 
fed the national security problems we now seek to cure. Indeed, Senator 
Rudman's panel identified culture as ``a factor that complicates, 
perhaps even undermines, the ability of the Department to consistently 
implement its security procedures'' (p. 11).
    DOE has a long history of reorganizing to improve its operations. 
Unless we aggressively reshape the underlying organizational culture, 
the reorganization proposal would simply fall into the same old trap. 
This is precisely the lesson of reengineering and reinvention in the 
nation's most successful public organizations and private corporations.
    The existing culture within DOE's field operations grows from fifty 
years of experience rooted in the Manhattan Project. To protect the 
nation's first nuclear bombs from enemy attack, strategists scattered 
research and production facilities throughout the nation. To ensure 
that no one had critical information about the overall plan, the 
Project's managers focused workers independently on narrow projects. 
And to gear up the process quickly, the Project relied almost 
exclusively on government-owned, contractor-operated (GOCO) facilities.
    With the end of the Cold War came two dramatic changes in DOE's 
operations: a desire for more-open scientific exchange in the national 
labs; and the need to clean up the by-products of a half-century's 
nuclear weapons production. DOE found itself with these new missions 
but also with an old, even dysfunctional structure. The result was 
double trouble: organizational structures that did not support new 
missions, and disparate organizations cobbled together from existing 
components. The result? Precisely the patterns we have already 
observed:

 National security problems born out of the self-governing 
        autonomy of field (usually non-governmental) employees;
 Management problems in the waste storage and environmental 
        remediation programs;
 Difficulty of top managers in gaining control of field 
        operations.
The cause: Headquarters officials had great difficulty in transforming 
the half-century-old culture that once made the American nuclear-
weapons program the keystone of the nation's defense but which now fits 
new missions poorly. The current spy scandal is the product of 50 years 
of decisions about DOE's structure and operations. Separating nuclear-
related activities into a quasi-independent agency would further worsen 
the fit between the department's missions, its culture, and its 
structure.
    This is the key problem. We ought to focus our efforts on solving 
it. The experience of the best public and private organizations teaches 
an important lesson: Reorganization, in itself, never does the job. 
Reengineering large organizations begins with top officials who 
redefine what they want the organization to look like; who then walk 
the talk; and who use the tools at their disposal to transform the 
organization. Restructuring can sometimes be an important tool. But it 
can never be the only--or even the principal--tool. To focus on 
reorganization as the first step is to court failure.
        The core DOE problem is changing the culture of field 
        operations. If we seek to solve problems simply by 
        restructuring headquarters, we will fail to solve the problem 
        and will only encourage the dysfunctional culture to continue.
We Need to Understand that DOE Does Have a Coordination Problem--But 
        It's Vertical, Not Horizontal
    The proposal for an agency for nuclear stewardship operates under 
an implicit assumption: There are problems with the nuclear weapons/
national laboratories programs that can best be solved through 
horizontal coordination--pulling all related national-security 
functions together into one headquarters office and giving a single 
person responsibility for managing them.
    DOE's fundamental problems, however, are vertical: ensuring that 
the department's vast network of private contractors and relatively 
autonomous research laboratories (acting from below) consistently 
follow national policy (set from above). In fact, according to GAO 
estimates, contractors are responsible for about 90 percent of DOE's 
work. The evidence suggests that the national-security problems grew 
out of the locally defined, professionally dominated culture of the 
research labs. This culture put emphasis on research-driven free 
exchange of information, at the cost of national security.
    Concentrating all DOE activities in a new semi-autonomous agency 
has a double risk. It risks recreating DOE's problems and burying them 
at a lower level of the bureaucracy. And it risks focusing attention on 
national security to the exclusion of the Department's mission. DOE 
must guarantee the nation's nuclear secrets. But to do so effectively, 
top officials must weave high concern for national security into 
everything that DOE does, not simply restructure headquarters to make 
national security a higher priority.
    Indeed, this is precisely the lesson that the Challenger disaster 
teaches. Following that tragedy, NASA did not make safety the central 
organizational scheme at headquarters. Rather, NASA officials made 
safety the #1 priority for everything that NASA did. It became the way 
that NASA conducted its business; it was not the business NASA was in.
    DOE needs to solve the right problem. It needs to make national 
security the #1 priority for everything it does. The recent problems 
with the national laboratories reflect broad, recurring, and deeply 
rooted problems in the department's operations. DOE officials have 
struggled for years to encourage the contractors and the labs to act 
consistently with national policy, as reports over the years by the 
General Accounting Office have shown.
    Restructuring national security operations at headquarters can be 
an important first step in making national security the Department's 
top priority. However, the missing link in the restructuring proposals 
is connection link between headquarters and the Department's field 
operations, and especially the link between DOE and its contractor 
network. The national security problem simply cannot be solved without 
building that link.
        The protection of national security needs to be job #1 at DOE. 
        But the only way to make that happen is to work at headquarters 
        to change behavior in the field. The restructuring will fail if 
        this does not happen--and none of the restructuring proposals 
        have yet tackled that problem.
We Need to Understand that a Single-Minded Focus on National Security 
        Could Weaken the Department's Environmental, Safety, and Health 
        Protection Missions
    Fifty years of nuclear weapons production has left behind an 
environmental legacy that will take decades to clean up. DOE has 
already had difficulty coordinating its environmental, safety, and 
health protection units with its production and research operations. 
National security is of unquestioned importance. But it is not the only 
goal that DOE must seek. That is especially true for those who live 
near contaminated and dangerous facilities in the DOE weapons complex.
    Restructuring the DOE nuclear weapons complex at headquarters not 
only raises problems of linkage with the field. It also raises 
questions about how DOE will link the national-security-oriented 
missions with the environment, safety, and health protection missions. 
The restructuring proposals would create high walls--figuratively and 
symbolically--around the nuclear operations; the latter requires 
substantial communication among the components. That is especially true 
if DOE is to build the requisite trust and confidence in citizens and 
its partners in state and local governments.
    DOE's most difficult problem is tackling new missions with old 
systems. Its new missions are fundamentally different from the old: 
conducting nuclear research in the post-cold-war world, at a time when 
exchange of scientific ideas has become much more important; and the 
shift from nuclear weapons production.
    National security is absolutely central to DOE's mission. However, 
national security is not what DOE does--it is how it must do it.
    For any organization, public or private, to be successful, its 
structure needs to support its mission. DOE's structure needs to be 
constructed to promote its core missions. The proposed restructuring 
does not define sharply or reckon with DOE's reinvented missions. It 
does not enhance DOE's capacity to achieve these missions. In fact, it 
simply recreates much of DOE's existing operations in a subunit, buries 
the units responsible for the success of the new missions, and fails to 
connect headquarters more effectively with the field. The proposals 
lower, not raise, the role of the units responsible for the 
department's 21st-century mission.
    In fact, DOE's emerging role is the integration of national 
security with its enduring missions:

 environmental cleanup
 safe storage of nuclear materials
 maintenance of the nuclear arsenal
 scientific research
DOE needs to do so in a way that enhances the trust and confidence of 
citizens and its partners in state and local governments.
    DOE's success requires breaking down the vertical silos built over 
50 years of history. It requires replacing them with new, horizontal 
coordination. And it requires action in Washington to ensure that this 
coordination happens. The proposed independent agency, by reinventing 
vertical silos in Washington, would make it harder to ensure 
coordination between Washington and the field. Restructuring 
headquarters in the pursuit of one aim--no matter how important, like 
national security--would make it far more difficult to ensure that 
other mission-critical goals were accomplished as well.
    Citizen groups around the country have already voiced grave concern 
about vesting the agency that created the radioactive waste with the 
responsibility for cleaning it up. For more than a decade, these groups 
have complained bitterly that the department has not treated the 
remediation issues seriously. The department faces daunting challenges 
for cleaning up the nuclear legacy--and for devising a plan for the 
safe long-term storage of radioactive wastes. DOE has already been 
criticized for paying insufficient attention to these critical cross-
cutting issues.
    These problems would be significant in a new quasi-independent 
agency within DOE. The problems would be greatly magnified if an agency 
were created outside DOE, for that would vastly multiply the problems 
of coordinating the nuclear functions with the closely related 
research, environment, health, and safety missions.
        The various restructuring plans could bury responsibility for 
        solving them even more deeply in the DOE bureaucracy--or push 
        responsibility outside DOE and far away from closely related 
        missions. This could weaken the coordination among the various 
        components and make it far more difficult for DOE to manage its 
        core functions--especially environmental, safety, and health 
        protection, which require strong partnerships with communities 
        around the nation.
We Need to Ensure that Restructuring Increases Accountability
    The most fundamental principle of management is to define an 
organization's job clearly and then hold the organization's manager 
accountable for getting the job done. The restructuring plans are 
unclear about who will be responsible for what, and that could 
seriously confuse accountability for results.
    The plan to create a new Under Secretary within DOE to manage 
nuclear operations is unclear about the division of responsibility for 
basic policy, security, counterintelligence, and other key functions. 
Some restructuring plans would place virtually all responsibility in 
the hands of the Under Secretary, without clear accountability to the 
Secretary.
    The firmly established tradition in American public management, 
supported by a score of blue-ribbon commissions throughout the 20th 
century, vests clear responsibility in the cabinet Secretary. Putting 
an Under Secretary in a position of side-stepping the Secretary could 
only create uncertainty about accountability. Framing responsibilities 
in a way that makes it hard to tell who is responsible for what would 
surely make things even worse. Paul Light's thorough research shows 
quite clearly that increasing the layers within the bureaucracy 
multiplies the problems of management and accountability. The goal of 
any restructuring ought to be to streamline the DOE bureaucracy and 
dramatically reduce the number of layers from top to bottom.
    GAO has found that DOE already suffers from serious accountability 
problems. As its January 1999 report on the department's performance 
and accountability concludes, ``DOE's ineffective organizational 
structure blurs accountability, allowing problems to go undetected and 
remain uncorrected'' (p. 7). The last thing DOE needs is a ``reform'' 
that makes this problem worse.
    The proposal to create a separate, independent Agency would solve 
the accountability problem: the Agency's administrator would have clear 
responsibility for the nuclear complex. It would, however, vastly 
increase the problems of coordinating the nuclear operations with the 
research, health, safety, and environmental missions. It would thus 
gain added accountability at an unacceptable cost in effectiveness.
        The proposals for a separate office are unclear about who is 
        responsible for what. That risks muddying accountability for 
        the very problems they seek to solve.
We Need to Find the Right Model to Guide DOE's Restructuring
    Reformers have pointed to other federal agencies as models for 
DOE's restructuring. The models have ranged from the Bureau of Land 
Management and the National Weather Service. The idea is to create a 
quasi-independent unit with clear responsibilities yet with operating 
independence from their home departments.
    These are poor models, however, for several reasons. First, their 
missions are fundamentally different. DOE deals with nuclear materials, 
which inherently carry higher risk than either land management or 
weather forecasting. Second, DOE relies almost completely on 
contractors to perform its work. The lessons of BLM or NWS do not apply 
to DOE.
    A far better model is NASA. Its high-risk, technology-intensive, 
contractor-dependent operations are similar to DOE. To attack these 
problems, its managers have led one of the most aggressive reinventions 
throughout the federal government. In the wake of the Challenger 
disaster, NASA officials put safety at the core of everything that NASA 
does--it was not what NASA did; it was how NASA did it.
    NASA, for example, now requires its field offices ensure that 
contractors meet ISO 9000 quality standards. NASA headquarters assesses 
the management processes of its field offices through ISO 9000-drive 
internal audits. It is now developing financial management and 
performance assessment systems to ensure accountability. Although the 
new systems are not yet all in place, they provide a guide about how a 
contractor-dependent, high-tech government agency can transform its 
operations.
    In short, top NASA officials redefined the agency's culture and 
insisted that its workers--both government employees and contractors--
make safety the watchword. In the process, NASA fundamentally redefined 
the relationship between its headquarters and its field operations, 
including the Jet Propulsion Laboratory (a government-owned/contractor-
operated facility, like many of DOE's facilities).
        NASA has shown that a performance-driven system can transform 
        the culture of a contractor-dependent agency. Reformers should 
        look there for counsel in restructuring DOE. They should be 
        very careful about choosing the wrong models, which could lead 
        to dangerous prescriptions.
Conclusion
    The proposal for a quasi-independent Agency for nuclear stewardship 
focuses on precisely the right issue: improving national security in 
the nation's nuclear complex. However, it misdiagnoses the problem. It 
could well well make the real problem worse. It fails to strengthen 
DOE's links to its field operations and misses the critical imperative 
to redefine DOE's culture. It fails to focus on improving DOE's 
capacity to pursue its 21st century missions.
    DOE needs to work aggressively to improve its operations. DOE's 
restructuring ought to be comprehensive, but it ought to focus on 
improving the Department's capacity to accomplish its mission and to 
streamline its accountability.
        We need to begin by ensuring that we identify the right 
        problem--and devising a workable strategy to solve it.

    Mr. Barton. Thank you, Doctor.
    We would now like to hear, last but not least, from Ms. 
Maureen Eldredge. She is the Program Director for the Alliance 
for Nuclear Accountability. Your statement is in the record in 
its entirety and we recognize you for 7 minutes.

 STATEMENT OF MAUREEN ELDREDGE, PROGRAM DIRECTOR, ALLIANCE FOR 
                     NUCLEAR ACCOUNTABILITY

    Ms. Eldredge. Thank you, Mr. Chairman, members of the 
committee. I appreciate this opportunity.
    The Alliance for Nuclear Accountability is a coalition of 
29 national, regional, and local organizations around the 
country working on nuclear weapons issues. Many of our member 
groups are local and community-based organizations living next 
door to DOE facilities. We have a long history of monitoring 
the Department's activities and what we have seen over the 
decades is a continuing pattern of disregard for public and 
worker safety and environmental law, combined with the use of 
national security as a shield to prevent public access to 
health, environmental, and safety information.
    The current wave of espionage scandals confirms what many 
believe, that the weapons program is adept at keeping secrets 
from the American people, if not from foreign espionage.
    In the last 50 years, the U.S. nuclear weapons program has 
exposed workers to fatal doses of radiation, given others 
cancer, and used entire populations of the U.S. as human guinea 
pigs. It has compiled a staggering record of environmental 
abuses, some of which Mr. Dingell mentioned earlier.
    The Federal Facilities Compliance Act authored by this 
committee was a watershed moment in which many of the 
activities of DOE were required to comply with Federal 
environmental law and given a timeframe to achieve compliance. 
The Department has, in part, become more accountable to the 
public and runs its operations in a somewhat more 
environmentally responsible manner precisely because of 
external oversight and public scrutiny.
    We see this attempt to create a new semi-autonomous weapons 
program as a chilling return to the darker days of the past, 
when weapons work was done unchecked by environmental 
consequences, regulation, and public scrutiny. We have concerns 
about several key areas, including public and worker safety, 
environmental protection, nonproliferation, and secrecy and 
public accountability.
    We agree with much of what was in the Rudman report about 
mismanagement and the culture of arrogance at headquarters and 
the laboratories. This mismanagement is by no means limited to 
defense programs. That being said, we feel the current reform 
proposals are a case of the cure being worse than the disease. 
We are at a loss as to why the punishment for insubordination, 
arrogance, and an unwillingness to take direction from above is 
to make the weapons program its own semi-autonomous agency. It 
is akin to parents faced with a recalcitrant teenager 
renovating the basement, setting him up with a phone, TV, and a 
very large allowance. What is the message we are sending?
    We are particularly concerned that the current proposals do 
not fully appreciate the highly hazardous nature of the work 
being done at many of these facilities. Just 2 weeks ago, there 
was another accident at the chemistry and metallurgical 
research building at the Los Alamos National Lab in New Mexico. 
This building is plagued by accidents, and just this past May 
was cited for continued safety violations. There have been 
accidents across the lab system, but the labs continue to 
resist effective oversight and enforcement of safety procedures 
and environmental compliance. In all of these repeated actions, 
there are consistent themes--failure to follow procedures and 
failure to comply with safety requirements.
    DOE is mostly self-regulated. The Office of Environment, 
Safety, and Health, which reports directly to the Secretary of 
Energy, has oversight and enforcement authority. Both the House 
and Senate proposals would change that and subsume such 
functions under the new line or agency.
    One of the worst things about the proposals for reform of 
DOE's defense programs is the inclusion of environment, safety, 
and health operations within the program line. This places the 
very people who do not like environment or safety regulations 
and who consider these activities of lowest priority in charge 
of running these same functions. The fox should not be given 
the key to the chicken coop.
    We are particularly concerned about the impact on 
environmental protection and cleanup activities of various 
legislative proposals and the relationship between the new 
agency and the current environmental management program.
    Currently, plutonium-contaminated waste generated by the 
labs is expected to go to the waste isolation pilot plant in 
New Mexico. That facility is run and paid for by the Office of 
Waste Management within environmental management. It is unclear 
under the new proposed structure is whose responsibility the 
management of plutonium waste would be and who would pay for 
it. Will the weapons programs be allowed to continue generating 
waste and contaminate facilities without budgeting for those 
costs in their mission budgets, or will entirely new waste 
management offices and mini-environmental management programs 
be developed within the new agency? The current proposals do 
not address these crucial issues.
    In addition, there is the problem of excess fissile 
materials which is located at several environmental management 
sites. This raises both management concerns and security 
problems. Current proposals put security under the weapons 
program alone, leaving fissile material at EM sites in a 
security vacuum. There are also questions of jurisdiction over 
the fissile material that have been declared excess to the 
stockpile. They are not considered waste. Are they part of EM? 
Are they part of defense programs?
    The weapons program has an equally bad record of compliance 
with environmental laws as it does with worker safety 
requirements. Environmental compliance should not be relegated 
to a low-level office within weapons production missions.
    Recent reports of espionage, leaks of material, and poor 
security at the labs has brought national focus on the problem 
of proliferation and expanding nuclear programs of other 
countries, but while the attention of Congress and the 
administration have been on improving security and 
counterintelligence, two things are happening to undermine 
these efforts. One is the ongoing nuclear weapons research and 
design program called Stockpile Stewardship, and the second is 
continued efforts to advance reprocessing technologies which 
contribute to worldwide nuclear risk.
    Stockpile Stewardship, with its emphasis on joint research 
projects with other nations and collaborative unclassified 
research that walks right up to the classified boundary, 
fosters a wider dissemination of nuclear weapons information 
and knowledge.
    Reprocessing and other dual-use technologies continue to be 
developed unchecked, often supported by the very same people 
who are pushing for DOE reform and security. Recently, the 
Office of Fissile Materials used money to fund joint work with 
Russia in the field of high-temperature gas reactors, yet the 
Cox Committee report raised concerns about this very technology 
as being a dual-use technology and benefiting the Russian 
nuclear weapons program. The reality of proliferation problems 
in many areas of DOE, not just the weapons program, as well as 
the inability of the weapons program to be an unbiased critic 
of its own activities requires maintaining a separate, 
independent nonproliferation office.
    It is difficult in the current climate to talk about the 
need for openness. The tendency is to lock the door as tight as 
possible. However, we urge you to tread carefully in this area. 
Ironically, the weapons production program has been very good 
at keeping secrets, particularly secrets about health and 
environmental-related information, from the public. Often, 
local watchdog groups, public officials, and local reporters 
are the first line of defense in exposing problems at DOE 
sites. Public accountability is the best insurer of proper 
behavior. Closing the doors and retreating into a swatch of 
darkness will only make the labs more insular, less caring, and 
less responsible.
    In conclusion, we urge the committee and Congress to take a 
closer look at the complications that may be created by a hasty 
move to change. Change without due consideration of the many 
ripple effects could do more harm than good. Thank you.
    [The prepared statement of Maureen Eldredge follows:]
 Prepared Statement of Maureen Eldredge, Program Director Alliance for 
                         Nuclear Accountability
    Chairman Barton, Chairman Calvert, and Members of the Committees, I 
appreciate this opportunity to appear before you today to discuss 
efforts to reorganize the Department of Energy's nuclear weapons work.
    The Alliance for Nuclear Accountability is a coalition of 29 
national, regional, and local organizations around the country, working 
on nuclear weapons issues. Many of our member groups are local, 
community-based organizations living next door to the Department of 
Energy's (DOE) nuclear weapons facilities. We have a long history of 
monitoring the Department's activities. While as a network we have been 
in existence for 12 years,some of our member groups have been at this 
business even longer. What brought all of our groups together was a 
shared realization that activities at the nuclear weapons facilities 
were harming our people, our environment, and contributing to the 
spread of nuclear weapons information and technology around the world.
    What we've seen over the decades is a continuing pattern of 
disregard for public and worker safety and environmental law, combined 
with the use of ``national security'' as a shield to prevent public 
access to health, environmental, and safety information. The current 
wave of espionage scandals confirms what many believed--that the 
weapons program is adept at keeping secrets--from the American people.
    In the past 50 years the US nuclear weapons program exposed workers 
to fatal doses of radiation, gave others cancer, used entire 
populations of the US as human guinea pigs, dumped radioactive waste 
into unlined trenches, poisoned streams and ground water, created miles 
of contaminated soil, and compiled a staggering record of environmental 
abuses. Thanks to work by citizen groups and by the Congress, often 
hand in hand with local media and local officials, the weapons program 
has slowly become more accountable to environmental regulation and 
health implications of weapons work are coming to light.
    The Federal Facilities Compliance Act authored by the Commerce 
Committee was a watershed moment in which many of the activities of DOE 
were required to comply with Federal environmental law and given a time 
frame to achieve compliance. Various oversight hearings and actions 
have highlighted safety concerns throughout the complex, and there has 
been a continual stream of governmental and non-governmental reports on 
issues ranging from cleanup needs to nonproliferation and weapons 
development.
    The Department has, in part, become more accountable to the public 
and runs its operations in a more environmentally responsible manner 
because of external oversight and public scrutiny. It is not perfect, 
it has a long way to go, and some sites are better than others. But it 
does, finally, have forces both within and outside of the Department 
working to make it adhere to worker safety requirements and 
environmental concerns.
    We see this attempt to create a new, semi-autonomous weapons 
program, as a chilling return to the darker days of the past, when 
weapons work was done unchecked by environmental consequences, 
regulation, and public scrutiny. We have concerns about several key 
areas including public and worker safety, environmental protection, 
non-proliferation, and secrecy and public accountability, which I will 
go into detail below. We also have specific problems with both the 
House and Senate proposed reform efforts.
    First, a general statement about the concept. No one would accuse 
us of being soft on DOE. In fact, we have been its most fervent critic, 
and we have often irked, annoyed, and infuriated the top management of 
the agency. We agree with much of what was in the President's Foreign 
Intelligence Advisory Board (PFIAB) report about the mismanagement and 
the culture of arrogance at headquarters and the laboratories. This 
mismanagement is by no means limited to the Defense Programs line 
within DOE. It is rampant throughout the Department. Indeed, one of the 
major problems at DOE is an entrenched bureaucracy with little 
incentive to change, and the ability to wait out any major reform 
efforts.
    However, with that being said, we feel that the current reform 
proposals are a case of the cure being worse than the disease. We are 
at a loss as to why the punishment for insubordination, arrogance, and 
an unwillingness to take direction from above is to make the weapons 
program its own, semi-autonomous, agency. It is akin to parents, faced 
with a recalcitrant teenager, responding by renovating the basement and 
setting him up with a phone, TV, separate entrance and large allowance. 
What is the message here?
    In reading the PFIAB report, references are made to examples of 
other agencies, such as the National Security Agency, the National 
Reconnaissance Office, and the National Oceanographic and Atmospheric 
Administration, that the PFIAB believes operate better and more 
effectively by being semi-autonomous. We note, however, that none of 
these examples run high hazard facilities that generate radioactive 
waste and routinely deal with plutonium, the most lethal material in 
the world. DOE and the weapons program are unique in that regard and as 
such need a unique, well-crafted, and measured response.
                        public and worker safety
    We are particularly concerned that current proposals do not fully 
appreciate the highly hazardous nature of the work being done at many 
of these facilities. In fact, some have been quoted as believing that 
compliance with worker and public safety requirements is a hindrance to 
effective weapons work. This attitude, which is prevalent at the 
national weapons labs, is precisely the reason there have been such 
widespread and continuing problems with worker safety. Just last week 
there was another accident at the Chemistry and Metallurgy Research 
Building (CMR) at the Los Alamos National Lab (LANL), releasing 
radioactive fumes and contaminating a room. This echoes an accident at 
the same building in November of 1996, in which an oven exploded, 
sending a potentially lethal spray of shrapnel around the room. There 
have been many accidents, accidental releases of radiation, and 
exposures of workers that plague the work at the labs. Yet the labs 
continue to resist effective oversight and enforcement of safety 
procedures and environmental compliance.
    To fully appreciate the complexities of worker and pubic safety at 
the weapons facilities,it must be understood that for most activities 
and materials, DOE is self-regulated. The full implications of this 
self-regulation are sometimes hard to perceive. All non-DOE nuclear 
facilities are regulated either by the Nuclear Regulatory Commission 
(NRC) or Occupational Safety and Health Administration, (OSHA ) or 
both. But at DOE facilities, OSHA does not have jurisdiction or 
authority. The Environmental Protection Agency (EPA) has no authority 
over fissile materials and only regulates the DOE superfund sites that 
have other contamination. States have little, if any, jurisdiction. One 
DOE self-audit revealed 40,000 OSHA violations at the Los Alamos 
National Lab (LANL) alone.
    The litany of accidents at the labs is endless. A few examples at 
Lawrence Livermore National Lab (LLNL) in California: March '99--a 
mislabeled container of waste was sent to a landfill without pre-
treatment; April '98--a chemist receives burns to his head when an 
improperly stored acid mixture exploded; May-Dec. '97 over 25 plutonium 
criticality violations in Building 332, with reports detailing chronic 
violations of safety limits.At the Los Alamos lab in New Mexico: May 
'99--lab cited for continued safety problems in the Chemistry and 
Metallurgy Research (CMR) building (and in June of this year, had 
another accident in the building); June '98--illegal storage of gaseous 
chemicals; November '96--explosion in the CMR building. At the Sandia 
lab, also in New Mexico, operator failure caused an unplanned power 
surge and subsequent automatic shutdown of the lab's Annular Core 
Research reactor. The operators then compounded the error by 
immediately restarting the reactor and then destroying a portion of the 
log in an attempt to cover up the event.
    In all of these repeated accidents there are consistent themes--
failure to follow procedures and failure to comply with safety 
requirements. In one instance, the report of the criticality violations 
at LLNL includes the possibility that some of the violations were 
intentionally done to get the job completed faster.
Office of Environment, Safety, and Health
    How does worker and public safety, as well as environmental 
compliance, get reported, evaluated, and enforced, within the DOE 
structure? The Office of Environment, Safety, and Health, (E,S&H) which 
reports directly to the Secretary of Energy, has oversight and 
enforcement authority. Both the House and Senate proposals would change 
that, and subsume such functions under the new line or agency. As it 
is, enforcement is often weak and the Office of E,S&H does not have 
enough teeth to be effective. However, it is at least independent and 
not intimately linked to the mission of Defense Programs. Moving 
environment, safety, and health oversight and enforcement functions 
into the line program, whose chief goal is to research and produce 
nuclear weapons, would result in a complete loss of protection for 
workers from any independent oversight. Management in the new 
organization would have, as its goal, completion of its primary mission 
at the lowest possible cost--worker and public safety, as well as 
environmental regulation, would be the bottom of the pecking order.
    Should reform happen in this area? Indeed, the Office of 
Environment, Safety, and Health needs to be made stronger, have more 
enforcement authority, and a bigger budget. It needs to be a separate, 
independent office that has enforcement over all other parts of DOE. 
Contractor accountability must be strengthened and enforcement against 
contractors whose actions are irresponsible, negligent, and 
occasionally unlawful, must be swift and effective. Congress should 
revisit the issue of whether any contractor, even a non-profit 
contractor, should be exempt from paying fines resulting from 
enforcement actions.
    One of the worse things about the proposal for reform of DOE's 
Defense Programs operations is the inclusion of E,S&H operations within 
the program line. This places the very people who do not like 
environmental or safety regulations, who chaff against following safety 
procedures, and who consider these activities of the lowest priority, 
in charge of running these same environment, safety, and health 
operations. 50 years of experience has taught us that weapons 
production is incompatible with self-monitoring of environmental and 
safety practices. The fox should not be given the keys to the chicken 
coop.
                        environmental protection
    We are particularly concerned about the impact on environmental 
protection and cleanup activities of the various legislative proposals. 
Most of the facilities in the DOE complex are in the cleanup program, 
on a track, albeit a lengthy one, for closure, cleanup, and return to 
full or partial civilian use. The labs and production sites, however, 
are going to continue to generate waste, risk contaminating the 
environment, and put workers and the public at risk for the foreseeable 
future. Structurally,there are several problems and many large question 
marks about the proposals for reforming the weapons program and its 
relationship to fissile material disposition, waste management, and 
restoration activities.
    Senator Rudman stated that his committee did not look at the 
environmental management program in their review. The Environmental 
Management (EM) program is indeed complex and covers a wide variety of 
functions that one would not readily attribute to a cleanup program. 
The Senate proposal put forth by Senators Domenici, Kyl, and others, 
would put the new Agency for Nuclear Stewardship in charge of all 
programs and activities related to, among other things, non-
proliferation and fissile materials disposition. It allows the 
Secretary of Energy to exempt certain environmental restoration and 
waste management responsibilities best carried about by other program 
lines from the new agency. The House versions, section 3165 of H.R. 
1401, and H.R. 2032, give the newly elevated weapons program authority 
over environment, safety, and health functions. Both of these proposals 
raise questions about who is responsible for management and storage of 
fissile material currently under control of the EM program, and who 
will manage and pay for the costs of future generated waste.
Waste Management
    Currently, plutonium-contaminated waste (transuranic, or TRU waste) 
generated by LANL is expected to go to the Waste Isolation Pilot Plant 
in New Mexico, a facility that is run and paid for by the Office of 
Waste Management within the EM program. A pilot charge-back program has 
begun within DOE, but under the new structures proposed, it is unclear 
how Defense Programs (or a renamed Agency for Nuclear Stewardship, ANS) 
would either manage its TRU waste, arrange for transport to WIPP, 
determine whose order, requirements or regulations it was obliged to 
follow, or budget for payment. Will the weapons program be allowed to 
continue to generate waste and contaminate facilities without budgeting 
for the waste management or cleanup in mission budgets? No private 
corporation allows a waste-generating portion of its company to pass 
these expenses on to the general accounts. In addition to the question 
of funding and budget is a question of operations. Will ongoing waste 
management responsibility continue to lie with the EM program, or will 
entire new waste management offices and mini-EM programs be developed 
within the new agency? The current proposals do not address these 
crucial issues, and the Senate proposal, which specifies that no other 
part of DOE shall have any authority over the new agency, sets up a 
situation where the ANS could generate waste with impunity. Even those 
of us with garbage service have to package our garbage appropriately.
Fissile Materials
    The issue of excess fissile material, located at several EM sites, 
raises both management concerns and security problems. The current 
proposals have an independent security function within the weapons 
program that has security jurisdiction only over weapons program 
activities. This leaves fissile material at EM sites in a security 
vacuum. Such a structure would necessitate recreating a security 
structure under EM, to protect EM security risks. This proliferation of 
offices and management responsibilities is precisely the problem these 
reform efforts were trying to avoid. Security is a DOE-wide issue, not 
just a weapons program issue.
    Additionally, there are questions of jurisdiction over fissile 
materials that have been declared excess to the stockpile. Currently 
these are managed and stored by the Environmental Management program, 
while the Office of Fissile Materials Disposition does the planning for 
the eventual disposition of the material. Under the Senate proposal, 
the Fissile Materials Disposition program would be included in the new 
Agency for Nuclear Stewardship, yet this program does not own any 
facilities, storage sites, or treatment capacity. The proposal to move 
fissile materials work into the new agency may well leave orphan 
plutonium around the sites, as EM no longer has jurisdiction and the 
new agency has no place to put the material.
Environmental Compliance
    The weapons program has an equally bad record of compliance with 
environmental laws as it does with worker safety requirements. Often 
the attitude is that environmental protection doesn't matter or is not 
a high priority. Again, the Office of Environment, Safety, and Health 
is tasked with enforcement and oversight, as much of DOE's work does 
not fall under outside agency jurisdiction. The result of self-
regulation is evident in the massive contamination throughout the 
complex. Weapons production and research work, which is not on a track 
to cleanup and closure, but will continue being a waste generator and a 
risk to the public, needs strong, clear, and forceful independent 
oversight. Environmental compliance should not be relegated to a low-
level office with a weapons production mission.
                     nonproliferation and security
    Recent reports of espionage, leaked material, and poor security at 
the labs has brought national focus on the problem of nuclear 
proliferation and the expanding nuclear programs of other countries. 
The attention of Congress and the Administration has been on improving 
security and counterintelligence at the labs and ensuring US nuclear 
weapons secrets are safe. At the same time, two things are happening 
that undermine these efforts and make the barrier to nuclear weapons 
technology less like a wall and more like cheesecloth.
Research Programs
    The ongoing nuclear weapons research and design program and 
continued efforts to advance reprocessing technologies both contribute 
to worldwide nuclear risks. The science-based stockpile stewardship 
program emphasizes research, particularly joint research with other 
nations, and presentations at public conferences, as a way of proving 
our continued scientific edge in the nuclear arena. From a human nature 
point of view this is completely understandable. Now that weapons tests 
are no longer the ultimate arbiter of success, weapons scientists, who 
have long labored in the dark of classified research and away from the 
praise and acknowledgement of their efforts by the rest of the research 
community, wish to be brought more into the public light. But this 
approach increases the availability of nuclear weapons information and 
dances on the edge of the classified boundary.
    Joint research projects, particularly on the National Ignition 
Facility (NIF), a laser facility being built at LLNL, emphasize 
cooperative, open research with a variety of countries, and Britain 
recently announced it would be ``investing'' in the NIF. The National 
Ignition Facility bills itself as intended to further understanding of 
the inner complexities of a nuclear weapon explosion.
    Joint research projects and a growing international community of 
weapons scientists is not a recent phenomenon. Collaboration between 
the U.S. and Soviet weapons labs pre-dates the end of the Cold War. 
More recently, in 1995, joint controlled-fusion experiments have been 
conducted at both the US. and Russian laboratories. A 1994 Washington 
Post article reported that in order to persuade Chinese military 
leaders to halt underground testing, the US offered to provide China 
with computers that could aid in nuclear explosion simulations.
    It is also not a new phenomenon that the lab scientists dislike 
restrictions on their work and that the arrogance referred to by the 
PFIAB expresses itself as a belief that the labs are above the law. In 
a 1996 Bulletin of Atomic Scientist article, Kathleen Bailey, a senior 
fellow at the Center for Security and Technology Studies at the 
Lawrence Livermore National Laboratory wrote: ``[W]hile it is often 
useful for laws to try to shape the behavior of mankind, there are some 
realms in which laws are destined to fail. That is why those 
responsible for the security of the United States, regardless of the 
political perspective of the administration in power, have repeatedly 
determined that the possession of nuclear weapons and a commitment to 
their potential use--as implied by deterrence--is in the best interests 
of Americans. International law or advisory opinions by the World Court 
are unlikely to change that. (emphasis added).
    These types of attitudes emphasize that in order to ensure 
nonproliferation efforts have the authority they need, nonproliferation 
work cannot be part and parcel of a weapons agency, but needs an 
independent voice.
Dual-Use Technologies
    It is ironic that while Congress is trying to seal the ark of 
nuclear weapons against theft, it is at the same time handing out the 
technological tools to weapons programs under the guise of waste 
management. The greatest stumbling block to would-be proliferants is 
access to fissile materials. Reprocessing, the procedure of separating 
plutonium or uranium from spent nuclear fuel, is undergoing a 
resurgence in this country, despite our purported policy against 
reprocessing, and our efforts to convince other nations to forgo it. We 
have pyroprocessing (electrometallurgical processing) at Argonne West 
in Idaho, and a new push for accelerator transmutation of waste (ATW) 
that uses pyroprocessing technology in part. Both of these processes 
have the advantage, to proliferators, of being smaller and harder to 
detect than traditional PUREX processes used at the Savannah River Site 
and Hanford. According to the National Academy of Sciences, while not 
intended for the production of fissile materials, both processes could 
be easily modified, to produce weapons grade material. Interestingly, 
the ATW system is being pushed by Senator Domenici, the same architect 
of DOE reform, who is concerned about making DOE more secure but seems 
to have little qualms about the impacts of dual-use technology.
    There are other areas of concern as well. For example, the Office 
of Fissile Materials recently began using money to fund joint work with 
Russiain the field of High Temperature Gas Reactors. Yet the Cox 
Committee report raised concerns about that very technology as being 
dual-use and benefiting Russian nuclear weapons programs.
    The reality of proliferation problems in many areas of DOE, as well 
as the inability of the weapons program to be unbiased critics of its 
own programs, requires maintaining a separate, independent, 
nonproliferation office. Folding nonproliferation into the new weapons 
agency, while it may appear to be a streamlining of programs, would 
result in an office that can't effectively report, critique, or analyze 
proliferation risks without biting the hand that feeds it. 
Additionally, nonproliferation is a Department-wide concern, 
particularly in the area of multi-use technologies that may be of use 
to aspiring nuclear-capable states. If it is buried in a weapons 
agency, nonproliferation analysis will not have the capacity to address 
all of the concerns in existence, nor will it get adequate attention.
                   secrecy and public accountability
    It is difficult, in the current climate, to talk about the need for 
openness. The tendency is to lock the door as tightly as possible, in 
the light of what may have been lost. However, we urge you to tread 
carefully in this area. Ironically, the weapons production program has 
been successful in some areas of secrecy--keeping crucial health and 
environment-related information from the public. In the pursuit of 
national security goals, environmental and safety standards were often 
left by the wayside, and secrecy was not always used for noble 
purposes.
    As an example, let me tell you about how one of our member groups, 
the Fernald Residents for Environment, Safety, and Health got its 
start. The President, Lisa Crawford, lives near the Fernald site, known 
then as the Feed Materials Production Center, which processed uranium.
    The local community didn't know exactly what went on there, and it 
was assumed to be a pet food producer--the site even painted its water 
tower in a fashion very similar to Purina's trademark checkerboard. 
Lisa only discovered the true function of the plant when she came home 
from work to find men in radiation protection suits climbing out of her 
well. The plant had contaminated all of the drinking water supply in 
the surrounding area with uranium. This galvanized the community, but 
only through protracted lawsuits and endless Freedom of Information Act 
requests, where they able to know the truth.
    The Department has changed since then, but it still remains 
difficult if not impossible to get data from certain sectors, 
specifically Defense Programs. We are not asking for the secrets to 
nuclear weapons design, we are asking for the truth about health and 
environmental impacts. Often local watchdog groups, public officials, 
and local reporters are the first line of defense in exposing problems 
at DOE sites. Public accountability is the best ensurer of proper 
behavior. Closing the doors and retreating into a swath of darkness 
will only make the labs more insular, less caring, and less 
responsible.
    In conclusion we urge the Committees and Congress to take a closer 
look at the complications that may be created by a hasty move to 
change. Change without due consideration of the many ripple effects 
could do more harm than good. In particular we urge the Committees to 
carefully considered key areas of worker and public safety, 
environmental protection, non-proliferation, and secrecy and public 
accountability.

    Mr. Barton. Thank you for that statement.
    We will now start the questions. We will recognize the 
gentleman from California, the subcommittee chairman of the 
Energy and Environment Subcommittee of the Science Committee, 
Mr. Calvert, for 5 minutes.
    Mr. Calvert. Thank you, Mr. Chairman. This is for the 
entire panel. Listening to your testimony, it becomes clear 
that DOE is pretty dysfunctional and, apparently, very 
resistant to change. Why does it make sense to attempt to 
maintain any security and environment, safety, and health 
functions within the Department? Some have proposed the 
possibility of putting another agency, such as the FBI, in 
charge of DOE's security, nuclear regulation under the NRC, 
environment under the EPA, and worker safety under OSHA. What 
are your thoughts on that?
    Mr. Rezendes. I can start. We have testified before this 
committee about the need for external regulation of DOE for 
many years. Still to today, DOE self-regulates for worker 
safety and there is no external regulation in terms of its 
nuclear piece. They have had three pilot projects a while back. 
In fact, I testified before the House Science Committee just 
last fall that we were detecting a change in direction in the 
Department of Energy as to where they were going with external 
regulation. But the then-acting Secretary said they were on the 
proper glide path and they were making good progress. We have 
seen a major change there.
    I think my message at that time was that it is very 
difficult for any department, including the Department of 
Energy or anybody else, to give up authority and responsibility 
for their own operations, that it really has to be something 
external. It has to be something coming from Congress to impose 
on them. It is not something they are going to voluntarily 
agree to.
    Mr. Calvert. General?
    Mr. McFadden. I would like to speak to the security end of 
that, and I would say that, in the first place, that nuclear 
security and the type of security that is required in DOE with 
over 4,000 guards at the facilities, et cetera, is something 
that the FBI would have little or no expertise in running. The 
FBI would be great in improving the counterintelligence aspect 
of the DOE operation, but I do not see any role for an 
organization like that in taking over the physical security 
aspects.
    Mr. Calvert. Doctor?
    Mr. Happer. I think that OSHA might be a good idea. From 
what I have seen of OSHA, they do a pretty good job. We have 
OSHA at our Princeton Plasma Physics lab, and as far as I can 
tell, everyone is satisfied with that, as far as you can be 
satisfied when you are criticized.
    I think I agree with the General about the security, that 
there are unusual burdens for security at a nuclear facility. 
There is all this special nuclear material and the threats of 
terrorism, and so it is not the usual thing that the FBI faces.
    As for the Nuclear Regulatory Commission, I think that that 
also could be looked at. It is not clear that they are just the 
right people, but they do have the background and there is a 
lot of duplication of regulations in DOE.
    The fundamental problem, though, is it is jobs. If you do 
that, there are a lot of people suddenly who do not have 
anything to do who are accustomed to oversee and to regulate.
    Mr. Calvert. Apparently, a lot of them do not have a lot to 
do right now. Doctor?
    Mr. Kettl. I think the answer, in part, depends on whether 
or not you want to try to do just one thing or try to take 
account of things like the environmental issues and other 
things in the Department that cross-cut. The fact that the 
Department is involved in so many cross-cutting issues makes it 
hard to make any one thing the central organizational 
framework.
    If you do that, you run the risk of undermining the 
partnerships, for example, with State and local governments and 
with citizen groups, that are required to make the entire work 
of the Department hang together. So the risk of slicing and 
dicing and reorganizing runs the risk of replicating the 
problems elsewhere and not really solving some of the enduring 
issues within the Department.
    Mr. Calvert. Ms. Eldredge?
    Ms. Eldredge. We have worked for a number of years on 
external regulation. It was a big issue probably 5 or 6 years 
ago and has faded away, unfortunately. The concept of 
externally regulating DOE is a very good one. There is always 
some question of who should do it. I think everyone supported 
OSHA regulation. OSHA said they wanted money in order to do it 
effectively, which is understandable.
    But one of the DOE self-audits at the Los Alamos lab 
revealed 40,000 OSHA violations just at that one lab, and that 
is sort of ridiculous levels of safety problems and we would 
definitely support bringing in more external regulations. I 
think it would solve some of these problems.
    The particular problem right now is that Environment, 
Safety and Health, although they are the oversight and 
enforcement body within DOE, they have very little power. They 
really have very little enforcement ability and they have very 
little ability to really make the labs or anyone else within 
DOE toe the line, and perhaps giving the power to someone 
outside of DOE would improve the situation.
    Mr. Calvert. Thank you, Mr. Chairman. My time has expired.
    Mr. Barton. We will almost certainly have another round of 
questions for those of us who stay through the second round.
    I would recognized the distinguished ranking member of the 
Science and Environment Subcommittee of the Science Committee, 
Mr. Costello.
    Mr. Costello. Mr. Chairman, Congressman Klink must leave in 
a few minutes, so I would ask that he be recognized at this 
time.
    Mr. Barton. And what if we say no?
    Mr. Costello. Mr. Chairman, I would probably ask for a roll 
call vote.
    Mr. Barton. We will recognize Congressman Klink for 5 
minutes, then.
    Mr. Klink. I thank the gentleman for his courtesy. I think 
it would probably go unanimously because people are glad to 
know that I would be leaving.
    Mr. Rezendes, it is nice to have you here. I am sorry that 
you are not going to be appearing before us, and maybe you will 
be appearing before us in another life of some sort, but it has 
been a pleasure to have your insight on these matters.
    Mr. Rezendes. Thank you.
    Mr. Klink. Let me start off by asking, in your testimony, 
you identified the problems, really, of decades of the DOE--I 
think I alluded to it in my opening statement--not holding the 
contractors accountable to what they wanted them to do. In your 
opinion, will any of the legislative suggestions that have been 
laid on the table so far give DOE more control and change the 
culture at the labs in regard to the contractors' 
accountability?
    Mr. Rezendes. No. We do not see that. I think, in fact, 
this is really an excellent point. I think some organizational 
alignment and reporting facilitate holding people accountable. 
Obviously, the flatter, the fewer conflicting goals and 
objectives that people have, the better the organization is 
going to be.
    But one of the fundamental problems we have seen over the 
decade is that even when problems arise, it is very difficult 
for DOE to hold people accountable and actually do something. 
Even in the security area today, we have not seen a lot of 
aggressive action against those being held responsible for what 
has occurred in the security issues.
    Mr. Klink. General McFadden, do you have a comment on that?
    Mr. McFadden. I think what you are saying is absolutely 
correct. There is nobody in charge of security at DOE and never 
has been because of the contractor system and the separate 
field operations. There is policy created at the headquarters. 
The carrying out of that policy, there are a lot of responsible 
people and the security people are able to go and measure and 
report when that policy is not carried out and when 
deficiencies are beginning, such as maintaining physical fences 
around sensitive facilities or updating the electric alarm 
systems that are required for physical security. Those things 
are of great concern ongoing and with the present organization, 
you are not going to solve it, but I believe it can be solved 
within DOE by giving this new ``czar'' the responsibility, 
power, and budget to accomplish that.
    Mr. Klink. Dr. Happer, what is your opinion?
    Mr. Happer. Well, I think responsibility does have to come 
back to DOE and I believe that an Under Secretary responsible 
for all of the weapons work would be able to give the resources 
to security, the right resources.
    Mr. Klink. Let me just back up. In any of the legislative 
proposals you have seen, is there anything that gives DOE the 
kind of control that they need, of the proposals that you have 
seen on the table?
    Mr. Happer. Yes. I think if you look at the Rudman proposal 
for a semi-autonomous agency, there is an Under Secretary, in 
one version, the original version, whose sole responsibility is 
to make sure that defense programs work and that all of the 
requirements are balanced. He is responsible for that. That is 
his job. He does not have to worry about windmills. He does not 
have to worry about insulated buildings or automobile fuel 
efficiency. His only job is to make sure this very important 
mission is taken care of.
    Mr. Klink. Doctor, how do we change the culture at the 
labs, where they are focused also on security and safety and 
environment, along with creating the product that they are? How 
do we do that?
    Mr. Happer. I think that education can be done in the labs. 
For example, in the last few months, there have been lab-wide 
meetings. There have been stand-downs, where people were 
educated on what is required in security, computer security. 
Many of them were very grateful for that. That was the first 
time they knew some of the issues. So that could be done, and 
that is done because, at least for the present, people are 
paying attention to that who have the muscle to make it happen. 
Of course, in 6 months, who knows what will be the crisis of 
the day. That will tend to dissipate unless you have someone 
whose responsibility it is to make sure that that is an ongoing 
priority of the contractors.
    Mr. Klink. Mr. Rezendes, we seem to be headed with both the 
Rudman proposal and the Senate proposal with recreating the old 
independent Atomic Energy Commission again. Is that your 
opinion?
    Mr. Rezendes. Well, it has some similarities. I think we 
raised concerns going back to 1978 in terms of how the 
reporting of oversight and counterintelligence are within the 
Department of Energy. We have seen that that structure has 
created problems in the past.
    But I want to comment on one other piece of this, which is 
resources and holding people accountable. I would not fall too 
much in the trap of resources. They get close to $18 billion a 
year. This is a matter of priorities, not a matter of whether 
they have the money.
    It seems two basic elements should exist in any 
organization. One is that you do not injure or kill your 
workers, and two, that you do not release secrets in terms of 
what you are doing. Then the rest becomes what you can gain 
from the R&D and various other kinds of activities.
    But it is not a matter of resources but holding people 
accountable, and if you look at the current tracking system, 
the University of California at Los Alamos is exempted from 
Price Anderson, so they do not pay any fines and penalties, and 
the Department of Energy basically says, well, we do not need 
to. We are going to hold them accountable through the contract. 
And if you look at how the contract provisions are, security 
and various other health and safety pieces are really a small 
portion of the award fee that the University of California 
gets. So, again, you failed on two aspects, the contracting 
aspect and fines and penalties, so there is very little 
leverage the Department can actually utilize to hold these 
folks accountable.
    Mr. Klink. I was interested, Dr. Kettl, in your response, 
if I can go back to my previous question. How do you think----
    Mr. Barton. That will have to be the last question.
    Mr. Klink. It will be, and I thank you for your courtesy, 
Mr. Chairman.
    What do you think in regard to what Dr. Happer said about 
changing the culture about the laboratories to make them focus 
more on security? Do you agree with what Dr. Happer said or do 
you think something more needs to be done?
    Mr. Kettl. I think, certainly, something more needs to be 
done. Let me make two points on the structure. The first is 
that I see nothing in most of the reorganization proposals that 
would in any way necessarily lead to a change in culture among 
the contractors, and second, those things that need to be done 
to change the contractors' culture can be done in the absence 
of a major restructuring, and, in fact, a major restructuring 
may get in the way by scrambling the boxes, preoccupying 
everybody with changing the names.
    NASA has got a very interesting history on this. They faced 
a similar kind of problem in their Jet Propulsion Laboratory 
and engaged in a major culture change among that government 
contractor through a system of substantial training and 
reemphasis on leadership orientations and more emphasis on 
performance, and then built from the bottom up to ensure that 
what they needed to get done got done. That provides, I think, 
a much better model. The important thing about that is that 
they did not do it by trying to scramble the boxes at 
headquarters to get the job done. They started where the 
problem was, solved the problem there, and built from that 
point on.
    Mr. Barton. I thank the gentleman for the questions. The 
Chair would recognize himself for 5 minutes.
    Dr. Rezendes, how many investigations do you think you have 
participated in that have looked at things in the Department of 
Energy?
    Mr. Rezendes. A year? I would say, probably in any given 
year, we probably have maybe 20, 30 different reports on the 
Department of Energy.
    Mr. Barton. I mean, in your career at GAO, how many----
    Mr. Rezendes. It would be hundreds.
    Mr. Barton. Several hundred?
    Mr. Rezendes. Hundreds. Hundreds.
    Mr. Barton. Have you ever participated in an investigation 
where you were pleasantly surprised at what you found at DOE?
    Mr. Rezendes. Once.
    Mr. Barton. One time?
    Mr. Rezendes. The Naval Reactor Program.
    Mr. Barton. So there is one shining star at DOE in terms of 
their management that you would give them, and the rest of it 
has been black marks. Do you think that there is any way that 
we can, however you sugar coat this, change things in DOE to 
effectively manage the weapons laboratories?
    Mr. Rezendes. I think we are talking about culture change. 
I think we are talking about more fundamental changes rather 
than just organizational changes and reporting 
responsibilities. I think that can be an integral piece to it, 
but it is really holding the contractors accountable. I cannot 
tell you the number of times we have testified before this 
committee on the lack of oversight and accountability of DOE 
and its contractors. Ninety percent of its appropriation goes 
to the contractors the first day of the fiscal year.
    Mr. Barton. Let us talk about contractors. The M&O 
contractor at the weapons laboratory, the University of 
California, how long have they had that contract?
    Mr. Rezendes. For over 50 consecutive years.
    Mr. Barton. Over 50 consecutive years?
    Mr. Rezendes. Yes, sir.
    Mr. Barton. Has that contract ever been competitively bid?
    Mr. Rezendes. No, sir, it has not.
    Mr. Barton. It never has been competitively bid, has it?
    Mr. Rezendes. Contrary to DOE's own internal policies to 
compete every 5 years, and every 5 years when this contract 
comes up, there is a movement to say that they are going to 
recompete, but at the end, they never do and they just 
renegotiate.
    Mr. Barton. Would you say 50 years is enough time to get 
your management team in place?
    Mr. Rezendes. I would say, having this contract competed 
once every 50 years would probably be a good thing. I want to 
emphasize here, we are not talking about replacing the 
University of California there. We are not saying, fire them.
    Mr. Barton. Well, I am.
    Mr. Rezendes. I know.
    Mr. Barton. I am.
    Mr. Rezendes. What I am saying is, at least once every half 
a century, bringing other competitors to the table to talk 
about what they could do to manage those facilities would be a 
good thing. I find it very difficult to believe that 54 years 
ago when we selected the University of California, that the 
government had such foresight that they would know that this 
would be the best contractor for life. It is hard to imagine.
    Mr. Barton. It is hard to imagine. I can see a Congressman 
staying in office for 54 years--but in that case, every 2 
years, the voters have a right to make a change.
    Mr. Rezendes. Correct.
    Mr. Barton. Every 2 years.
    Mr. Rezendes. And the University of California could manage 
this for another 100 years, but having competition would be a 
good thing.
    Mr. Barton. Dr. Kettl, what are your comments about the way 
the University of California has managed their 54-year 
contract?
    Mr. Kettl. I have to say, Mr. Chairman, I have not looked 
carefully at the way in which that contract itself has been 
operated, but I want to associate myself with Mr. Rezendes' 
comments. If there is anything that we know, it is that 
competition enhances the ability of people to perform. Having 
clear standards for performance, having some penalties for 
nonperformance, having careful oversight of the contract is the 
one thing that we know that makes these things work.
    Mr. Barton. General McFadden, you said you have served in 
various capacities for the government. Most of that time would 
be in the military, for over 40 years, is that correct?
    Mr. McFadden. That is correct, yes, sir.
    Mr. Barton. Does the name Alger Hiss ring a bell with you?
    Mr. McFadden. It does.
    Mr. Barton. What happened to Alger Hiss and why did it 
happen?
    Mr. McFadden. Well, it happened because it is my belief 
that we had a man who, in fact, had been compromised because of 
beliefs that he had that Communism was the wave of the future.
    Mr. Barton. But he sold weapons secrets to the Russians, I 
believe.
    Mr. McFadden. That is correct.
    Mr. Barton. And he was convicted, and it was a 
controversial trial, but he ultimately was executed, is that 
not correct?
    Mr. McFadden. No. No.
    Mr. Barton. That is not correct? It was the Rosenbergs. I 
am sorry.
    Mr. McFadden. Yes.
    Mr. Barton. Mr. Sawyer is an expert on this.
    Mr. Calvert. Careful, Mr. Chairman.
    Mr. Barton. The reason I bring that up is that I am not 
aware that--there may be, but I am not aware that in this 
latest episode where the Communist Chinese, according to the 
Cox report, have gotten over 50 years of advances in our 
weapons technology, that there is any type of an investigation 
that is going to lead to that type of a conviction. Are you 
aware of any investigations going on, or are we all just kind 
of saying, well, it was a bad thing, but that is the way it is?
    Mr. McFadden. Mr. Chairman, I am retired at the present 
time and all I know is what I read in the newspaper.
    Mr. Barton. That is a very diplomatic answer. General, what 
about the lab director? Now, we have an M&O contractor, but 
there is actually a lab director at these laboratories. Would 
they not be overall responsible for the security? I mean, 
should they not be held accountable, in spite of all the 
overlays, and Congresswoman Wilson has got an excellent point 
about there are so many overseers overseeing the work. But each 
laboratory has one director. Should that person not be 
responsible?
    Mr. McFadden. It would seem to me that that person 
definitely should be responsible for that lab security and for 
the actions of the scientists in that lab and how they carry 
out security, and especially when they are allowed to go to 
international symposiums, the restrictions that may be placed 
on them and what kind of information they can provide.
    You are always going to have problems in that area because, 
as you well know, when you are well versed in a subject and you 
are talking to someone else who is very curious about it, that 
you are going to inadvertently expose information. That in 
itself is serious, but when it is done purposely, then there 
should be a chain that would determine that and where there 
would be punishment that would be eventually dealt out.
    Mr. Barton. My time is expired, so I will save some of my 
questions for the second round. The chair would recognize the 
gentleman from Texas, Mr. Hall, for 5 minutes.
    Before I recognize Mr. Hall, my daughter and wife have just 
come into the hearing room, so we would welcome Janet and 
Kristen Barton. They are visiting from Texas and I am glad to 
have them here. My daughter has a boyfriend, so I just want 
everybody to know that.
    Mr. Hall. I certainly want to welcome the first lady.
    I have listened to the testimony as much as I could and 
have read all of the testimony you submitted earlier, and thank 
you for doing that. There is an old pun about rearranging the 
chairs on the Titanic. It probably would have had the loss of 
lives anyway, and that is about all I hear when they talk about 
closing down the Department of Energy or transferring it to the 
Department of Commerce or whatever. I do not know that you save 
any money or that you get any more efficiency. I think it costs 
a lot of money to do that and I think you are going to have the 
same expenses after you have done it.
    We are in a time when, I guess, we have curtailed. There is 
talk about the FBI taking over. Their powers have been reduced 
so much because the accused have so many rights today. We could 
not even mine Antigua's harbors. We did not know the Wall was 
going to come down. Recently, the generals were firing $1.240 
million missiles at a $12,000 warehouse and giving them 3 days 
to get everything out of it. I just do not see that these 
changes, just for the sake of change or to do away with the 
Department of Energy, is going to solve anything.
    Talking about creating an Agency for Nuclear Stewardship, 
what would that do to security? What have any of you identified 
that that would help?
    Mr. McFadden. If I could speak to that, I would say that my 
feeling is that it would probably do very little and could, in 
fact, hurt security, depending on how it was carried out and 
what responsibilities were given to the new organization.
    Mr. Hall. Mr. Kettl, you talked about accountability and 
the Secretary being authoritative. We have a pretty 
authoritative Secretary now. I do not always agree with him, 
but he is pretty well authoritative and you know pretty much 
where he is. I am going to be with him this afternoon. What do 
I tell him that he has done wrong and what can he do right to 
correct it? How can he be more accountable?
    Mr. Kettl. The basic issue, I think, here is understanding 
what the problem is, and the problem is trying to find a way to 
change 50 years' worth of culture that is rooted in 50 years of 
the relationships of the sorts that we have talked about this 
morning. His basic job is to try to make sure that those 
researchers, the scientists, the managers out there in the 
field do what it is they are supposed to do in the way they are 
supposed to do it, and what he would most have to do is make 
sure that gets done. That is a hard job----
    Mr. Hall. That is easy to say, but how do you do it?
    Mr. Kettl. The how, I think, has to do with a couple of 
things. First of all, the Secretary has at his disposal the 
Government Performance and Results Act, which sets out clear 
strategic plans in a way to try to hold people accountable. It 
has a way of linking that to the Departmental budget to make 
sure that what it is that has to happen gets happening.
    Third is, I think, a clear focus and an articulation of the 
nature of the Department's mission, not so much now but where 
the Department wants to be in 5 years, making sure that is 
clear, making sure that everybody knows the nature of the 
culture that people are expected to follow, having clear 
performance goals, performance expectations, and, ultimately, 
some form of penalty for people who do not behave. I think that 
collection of activities articulated clearly by the Secretary 
would go a long way toward, in fact, trying to move in the 
right direction.
    Mr. Hall. I am not just only asking about protection 
security-wise but environmental health, safety, cleanup at the 
weapons sites, and things like that. How can he be more 
accountable? Do they not have to have more authority if they 
are going to be authoritarian than we have given them?
    Mr. Kettl. The dilemma is, in a nutshell, this, that 
everything that is necessary to make environmental cleanup work 
effectively requires close working relationships with State and 
local governments and with citizen groups who live around the 
areas that are affected. One could easily imagine a decision-
forcing event that would have us here today talking about 
reforming the Department of Energy that would be focusing in 
precisely the opposite direction, some kind of accident in one 
of the facilities that would talk about the need for more 
openness.
    We are here now talking about national security, and the 
Department's, indeed, the Nation's fundamental problem is 
finding a way of balancing those two, to ensure adequate 
stewardship of the nuclear stockpile while at the same time 
cleaning up the nuclear mortgage for the last 50 years in ways 
that inspire trust and confidence in citizens. It is finding a 
way to get the balance right that lies fundamentally at the 
core of the Department's issue, and that is why cutting the two 
apart, separating them, is so dangerous, because it allows us 
to engage in what in many ways is a fallacy of thinking that we 
can have it both ways simultaneously without building serious 
problems into the system, and that is precisely, I think, the 
thrust of Ms. Eldredge's testimony.
    Ms. Eldredge. If I could speak to that, I think one of the 
problems is actually that the Secretary does not have a whole 
lot of power when it comes to the weapons program. The weapons 
program is extremely insular and has a lot of political power 
and the Secretary's ability to control its activities has been 
limited, particularly because Secretaries are in office for 
such a short period of time. The office that is in charge of 
doing enforcement on environment and safety regulations has 
very little clout within the Department. They do not have very 
many tools in their enforcement tool box, they have very 
limited budgets, and they are often ignored and have to plead 
their case at the secretarial level if they can get that 
opportunity.
    Mr. Hall. Their hands are tied, in other words?
    Ms. Eldredge. Correct.
    Mr. Hall. How do we untie them? I think my time is up. It 
will take another hour----
    Mr. Kettl. Mr. Hall, let me just answer that with one 
sentence. After the Challenger disaster, NASA had a very 
similar kind of problem and it was a problem of trying to find 
ways of ensuring that safety lay at the corner of everything 
that they did. What they did was they focused very clearly on 
making sure that they did what they did in a safer way, working 
with their contractors to get it done. If we are looking for a 
model for reform, I think NASA, in many ways, is the place to 
go.
    Mr. Hall. Their answer was to do nothing for 2\1/2\ years.
    Mr. Kettl. But what they did is----
    Mr. Hall. For fear of doing something wrong.
    Mr. Kettl. What they did is they stopped very carefully and 
they asked, what is it that they want to do, how is it that 
they wanted to get it done, and how could they ensure that 
their relationship with the contractors would get them there, 
and that has been what they proceeded and their track record 
since has been stellar.
    Mr. Calvert [presiding]. Thank you. The gentlelady from New 
Mexico.
    Mrs. Wilson. Thank you, Mr. Chairman. Dr. Kettl, you talk a 
lot about culture and about implementing basically what are 
quality management approaches in public institutions, at least 
the elements that you describe, the strategic planning time, 
the strategic planning of the budget, mission clarity, 
performance goals, and so on and so forth. What actions should 
Congress take in order to make sure that the Department of 
Energy implements that kind of a program?
    Mr. Kettl. The single best thing that Congress can do is to 
ask the hard questions that ensure that the Secretary has no 
alternative but to ask those questions of the people who work 
for him. The Department is a very complicated operation in that 
90 percent of what it does, it does through contractors, and 
the difficulty is ensuring from the top that the Secretary can 
find some source of leverage over those contractors. Those 
sources of leverage are complex and the difficulties of getting 
organizational change at the bottom in the end in organizations 
that are not part of the Federal Government, that do not 
involve Federal employees, are extraordinary.
    NASA, as I suggested, had similar kinds of problems and the 
key is, and the most important thing that Congress do, is to 
focus on asking those hard questions so the Secretary, in turn, 
has to ensure that those contractors have to ask the questions 
of themselves.
    The performance management system is the way to go, which 
clear leadership at the top setting clear and unmistakable 
goals about what it is that ought to be done, how it ought to 
get done, and ensuring that there are clear performance goals 
and consequences for poor performance. That, if the Secretary 
did it and it were enforced through the contracting system and 
insisted upon with strict oversight by Congress, is the most 
effective thing Congress can do to get this job done.
    Mrs. Wilson. Thank you. I do not mean to be critical of any 
one individual, but one of the things that I talked about in my 
opening statement was the difference between managing and 
overseeing and that it is a lot easier to be an overseer than 
it is to be a manager and get things done. In light of that and 
in light of some of the strong positions taken today, I would 
like--and I did not find in the material given to us a complete 
resume on each of you, and so I would ask each of you to let me 
know and let the committee and everyone in the audience know 
how many years of experience each of you has had in a 
management position, let us define this broadly, as the 
institutions including Los Alamos, Sandia, Livermore, Pantex, 
Oak Ridge, Y12, Savannah's tritium plant, Kansas City, 
Pinellas, which was probably open at a time when many of you 
were serving in government or whatever positions, or even the 
assistant directorate for defense programs at the Department of 
Energy.
    Ms. Eldredge, how long have you spent at any of those 
institutions in a management position?
    Ms. Eldredge. I have not worked at any of those 
institutions.
    Mrs. Wilson. Dr. Kettl?
    Mr. Kettl. I spent 2 years on a task force to advise the 
Secretary of Energy on issues of trust and confidence in the 
Department and have been working on management issues in 
government for 20 years. I have not worked at----
    Mrs. Wilson. Have you ever managed at any of those 
institutions, Doctor?
    Mr. Kettl. No, I have not.
    Mrs. Wilson. Dr. Happer?
    Mr. Happer. I was the Director of Energy Research under 
President Bush.
    Mrs. Wilson. Have you managed in any of those institutions?
    Mr. Happer. I certainly put contracts at those institutions 
and I tried to manage them.
    Mrs. Wilson. General McFadden?
    Mr. McFadden. Five years as the Director of Security 
Affairs, but I have worked in that security field for many, 
many years, to include the National Security Agency, Defense 
Intelligence Agency, Army Security Agency during my tours as a 
combat arms officer in the United States Army.
    Mrs. Wilson. Without diminishing anything you have done, 
sir, I will take that as a no. Mr. Rezendes?
    Mr. Rezendes. I have not worked in any of those facilities.
    Mrs. Wilson. Thank you, Mr. Chairman. No further questions.
    Mr. Calvert. I thank the gentlelady. The gentleman from 
Illinois.
    Mr. Costello. Mr. Chairman, thank you. Mr. Rezendes, let me 
ask you, in your testimony, you describe some very confusing 
reporting between the relationship from headquarters to the 
field offices to the operation offices and the labs, and I am 
wondering if Secretary Richardson has attempted to correct that 
problem, No. 1. No. 2, have you seen an improvement under 
Secretary Richardson attempting to resolve the problem? And No. 
3 is, does the proposal to create an Agency for a Nuclear 
Stewardship, how do you see that addressing the relationship 
between headquarters, the field offices, and the operation 
offices in the lab?
    Mr. Rezendes. Yes. The organizational structure has been 
confusing for many years. DOE has--I will give you a quick 
overview--has four business lines. They have program offices, 
which are the first crosswalk in terms of how they work in each 
of those business lines. They are carried out through field 
organizations, locations. The field organizations reported to 
contractors, which reported to operations offices, which 
reported to different levels in the organization other than the 
programming groups.
    He has cleaned that up a bit. He has the operations 
officers, which have oversight responsibility for the 
facilities, reporting directly to the program office, which is 
the chief funder of that facility. So they cleaned some of that 
up.
    We have seen that before, though. Secretary Watkins 
introduced a similar organizational structure during his tenure 
and his objective at that time was to address environmental 
health and safety issues, which were the major management 
problem of the day. Unfortunately, what happened was there was 
some confusion between the program offices, which had 
responsibilities for the facilities, and the staff offices, 
which had the environmental, health and safety oversight. So 
the facility was reporting, really, to two different places at 
the same time, even though they were reporting to their primary 
funder, which was the programming group, I will say defense 
programs or energy research, but the health and safety had 
conflicting and sometimes different priorities in terms of how 
their funds should be spent within the facility. So it was 
confusing there, also.
    Mr. Costello. But there has been significant progress?
    Mr. Rezendes. Cleaning that up, correct.
    Mr. Costello. Let me also ask you, in your testimony, you 
talk about removing the cleanup responsibility from DOE could 
result in a decrease in the incentives to reduce waste and 
promote other environmental-friendly approaches. What do you 
think the consequences would be for cleanup if the 
responsibility for conducting them at the weapons facilities 
was shifted to an Agency for Nuclear Stewardship?
    Mr. Rezendes. Whenever you shift responsibilities, you 
change not only the responsibility but you are also changing 
the management priorities and attention. If you want this new 
agency to be focused strictly on stockpile stewardship and 
weapons and research, by adding a cleanup piece to it, you will 
divert the management attention and its attention will be 
diffused and its prioritization and budget will also be 
diffused, as well. The clearer the goals, the clearer the 
objectives, the clearer the lines of responsibility and 
accountability, the easier it is to manage.
    Mr. Calvert. The gentleman's time has expired.
    Mr. Costello. Thank you, Mr. Chairman.
    Mr. Calvert. We will have a second round. The gentleman 
from Michigan.
    Mr. Ehlers. Thank you, Mr. Chairman. In the interest of 
full disclosure that my colleague from New Mexico asked for, I 
should reveal that I am a graduate of the University of 
California and also confess that I have been a part-time 
manager of a number of different scientific and academic 
enterprises.
    I would like to make a few comments and get some reactions. 
Dr. Kettl, I noticed your comment about the Secretary being in 
charge. That is very true, but that also illustrates the need 
for good Secretaries, and unfortunately, I do not think the 
Department has always had good Secretaries. Similar to the 
Commerce Department, it has often been a political buddy of the 
President because it has been regarded as a non-essential 
function, and I think both departments have suffered over their 
history by not having top-level individuals.
    It is particularly important for the Department of Energy, 
because scientists and scientific research are very difficult 
to manage. It has often been compared to herding cats, but I 
think that makes it sound too easy. It is a very tricky 
business. But, at the same time, if it is done by the 
appropriate person, the rewards are boundless. Most scientists 
are willing to work 80 hours a week on their research if they 
have the proper motivation.
    I worked at one time or another, at three of the national 
labs, one of which was a weapons lab, and this was in the late 
1950's or early 1960's. The taxpayers really got their dollars' 
worth at that point. There was very little administration, 
either in the labs or in the DOE--at that time, it was the 
Atomic Energy Commission.
    What I see now, especially looking at it from this 
perspective, is an incredible amount of administration. I find 
the same thing in the National Institute of Science and 
Technology. It used to be NBS, National Bureau of Standards. I 
have served on review panels there in my earlier life. A 
tremendous amount of time of the scientists was occupied with 
administrative work or trying to respond to administrative 
inquiries.
    I think it is very important that as we worry about the 
security problem and we talk about reorganization, we recognize 
what the primary purpose of the laboratories is, and get an 
administrative system that works for that and get top 
administrators who can work effectively in that atmosphere and 
motivate the scientists.
    I am appalled at suggestions of some of my colleagues that 
we have to put more money into security. I think that is a 
typical governmental response. If something is being done 
badly, give it more money so they can do more things badly. I 
think the problem is cultural and structural and we have to 
address it from that standpoint. The problem is not financial. 
The research effort tends to be shortchanged on money these 
days, but not the administrative end.
    I think, in Dr. Happer's analogy, comparing it to the human 
body, we have to optimize the output for the amount of 
resources that we direct to it. We have to have a good self-
functioning management system. We do not have it.
    I would be interested in your comments, particularly Dr. 
Happer and Dr. Kettl, your comments to my observations. Am I on 
track or not on track, and if I am on track, how can we 
implement that?
    Mr. Kettl. Mr. Ehlers, I think you are on track. I think 
you have made precisely the right point, which is, at the core, 
this is a cultural problem and it requires a cultural solution 
and the cultural solution comes and has to come first from 
leadership and structural efforts to support what it is that 
the mission is. These restructurings that get in the way of the 
mission could be clearly detrimental, and I think what we have 
to do is think carefully about what we want the Department to 
look like and be doing, say, 5 years from now, and make sure we 
make those actions now. I worry that what we are talking about 
doing in some of these proposals would, in fact, undermine our 
ability to do it.
    One of the things we have done in the Federal Government in 
a very quiet but very effective way in the last 5 years or so 
is to put more responsibility for management in the Secretary, 
but especially in the Deputy Secretary. One of the very serious 
flaws in some of these proposals is cutting the Deputy 
Secretary out of the management chain within the Department, of 
creating bypasses in this new separate unit out of the standard 
management practices within the Department, which would then 
make it harder to hold anybody accountable and to ensure the 
cross-fertilization of all of these efforts.
    So I think that what we have to do is make sure we have 
clear accountability for this, and what Congress can do best is 
to ensure, first, that bad things do not happen, that we do not 
create new barriers to get in the way of what it is that we 
want to have accomplished, to ensure that this is not just a 6-
month phenomenon, that our concern for national security as 
well as safety, environmental health, and the variety of other 
Department of Energy missions remain foremost and that we, in a 
sense, keep the heat on to ensure that what we want to have 
happen happens, because that is the easiest way, then, for the 
Secretary to transmit that mission and that message throughout 
the rest of the Department.
    Mr. Calvert. The gentleman's time has expired. Mr. Sawyer?
    Mr. Sawyer. Thank you, Mr. Chairman. I would have enjoyed 
hearing that line of questioning go on further, not that I am 
going to yield the balance of my time back to Mr. Ehlers. I 
have to comment. I am just fascinated to hear the use of the 
human immune system and defending against common maladies and 
consumer services policies of Nordstrom's Department Stores and 
the discipline of recalcitrant teenagers. It sounds like we 
need a mommy at the Department of Energy.
    General McFadden, you talked about a separate security 
agency within DOE. In fact, you said that it should have 
happened a long time ago. Would an agency of that sort or a 
structure of that sort contain all the safeguards and security 
and counterintelligence functions that are currently diffused 
throughout the Department in its many locations?
    Mr. McFadden. I think the one that was going to really 
solve the security problem throughout the Department would, 
yes. I think that the way that is proceeding now, Secretary 
Richardson has not included intelligence or counterintelligence 
and I believe that the reason that they were excluded may be 
that the PDD-61 that governs the reorganization earlier last 
year of those elements, he believed precluded making changes 
that would put them in that new organization. But one that had 
those would give someone the authority and responsibility for 
carrying it out throughout the Department.
    Mr. Sawyer. Who should control the budget for such an 
operation? Should it be the Under Secretary?
    Mr. McFadden. The budget should be controlled by the 
individual that has that responsibility. That has never been. 
As you may be well aware, we have what is called a cross-cut 
budget, which is not a budget at the present time for security, 
to identify those expenditures.
    Mr. Sawyer. And who should control security policy at each 
of the separate sites?
    Mr. McFadden. Security policies for the entire Department 
should be controlled by Safeguards and Security.
    Mr. Sawyer. Let me get a reaction from others with regard 
to those inquiries. Does anybody else want to comment?
    Mr. Happer. Let me comment, because if you go to Livermore, 
for example, or Los Alamos, you see all levels of security. You 
see heavily guarded, fenced plutonium facilities and you see 
other things like the Human Genome Project, which are 
completely open. For example, if you have a visitor coming to 
these labs, it does not make any sense that you apply the same 
rigorous background checks on someone coming to visit the human 
genome operations as someone who might be interested in things 
very classified.
    So what worries me and what I have seen in the DOE is sort 
of a uniform policy on whatever the crisis of the day is, where 
common sense tells you that you should not be uniform, you 
should have some judgments. So the further removed the managers 
are from the actual front lines, the harder it is to make those 
judgments. So I think there have to be good people that you 
trust at each of the labs to do common sense security and do it 
religiously, but you should not second-guess them. They should 
report.
    Mr. Sawyer. Not to a common policy, but perhaps to a common 
standard?
    Mr. Happer. Yes, something like that.
    Mr. Sawyer. Mr. Rezendes?
    Mr. Rezendes. Yes. I think holding them accountable is 
really one of the key pieces here. For example, we saw a few 
years ago when counterintelligence was another issue and the 
Congress provided, I believe, an additional $5 million to the 
Department to go to the facilities to improve 
counterintelligence. What we saw was down at the field level, 
basically, some of these facilities just substituted the money 
that they were previously spending and used the additional 
funding for counterintelligence.
    It gets back to the Secretary having clear accountability, 
holding people responsible. I mean, here Congress was sending a 
clear message of what they wanted. They accepted the money, but 
it never got to what Congress directed it to.
    Mr. Sawyer. Can those goals be accomplished when contract 
employees are responsible for those kinds of functions?
    Mr. Rezendes. If you hold the contractor employees 
responsible. I think there are two levels of responsibility 
here. One is holding the contractor accountable for what they 
are supposed to do under the contract, and two----
    Mr. Sawyer. I am not talking about just the contract. I am 
talking about the security function.
    Mr. Rezendes. Right. I am talking about holding the Federal 
employees responsible that are overseeing the contract 
employees, making sure that they do what they do.
    Mr. Sawyer. Are you all of one mind with regard to that 
question?
    Mr. Happer. I think there is too much Federal oversight. 
Every time you turn around, there is some other Federal group 
coming at you for a review or an audit. If you did everything 
that every Federal employee told you to do as a contractor, you 
would have to shut down because it just does not add up. You do 
not have enough people and you do not have enough money to 
respond to all of these things.
    Mr. Sawyer. General McFadden?
    Mr. McFadden. I believe that I agree with Dr. Happer, what 
he said a little earlier on the fact that you have to have a 
balance out there, but you do have to have a means for control 
of basic policy.
    Now, it was mentioned earlier, the fact that we could not 
have a fixed cut for security everywhere and that this could be 
a problem, and that really is a misinterpretation of the system 
that is used with the design-basis threat, which says if you 
have nuclear weapons, this is the minimum that you must have. 
Then everything else has to be a balance of that. Some need 
more and some need less. If you have a completely unclassified 
operation, you may not even have a policeman at the gate.
    Mr. Sawyer. Could you talk directly to the question of the 
role of contract employees in that kind of function?
    Mr. McFadden. Contractor employees are always going to be a 
part of the system, I think, regardless of how we do it, as 
long as 90 percent of the work of the Department is carried out 
by contractors.
    Mr. Sawyer. Let me hear from the other end of the table on 
that series of questions.
    Ms. Eldredge. I think one of the problems is the line 
between contract employees and Federal employees is very 
indistinct. It is hard to say who is the Federal employee and 
who is the contract employee at the lab sites. The labs, in 
some ways, have been running as a semi-autonomous agency all by 
themselves, without this legislation, and there is lots of talk 
of problems of too much Federal oversight, but I think one of 
the problems is perhaps not efficient Federal oversight and the 
wrong kind of overseers, because they have not really been able 
to keep the contractors in line and make them accountable, and 
part of that problem is the overly close relationship between 
the Federal employees and the contract employees.
    Mr. Sawyer. Dr. Kettl, is this the way Nordstrom's would do 
it?
    Mr. Kettl. You know, the Nordstrom case is interesting on 
this because what they do is they make sure that customer 
service is firmly implanted in the brain of every employee.
    Mr. Sawyer. I understood your point. I did not mean to 
diminish it.
    Mr. Calvert. The gentleman's time is expired.
    Mr. Kettl. And the important piece here in terms of 
national security is to make sure that that is imprinted in the 
minds of the employees, contractor or government official. It 
is government's responsibility to make sure that the 
contractors behave that way, and that, in many ways, is the nub 
of the problem.
    Mr. Barton. The gentleman's time is expired.
    Mr. Sawyer. Mr. Chairman, thank you for your flexibility.
    Mr. Sawyer. We will have a second round. The gentleman from 
Arizona.
    Mr. Shadegg. Mr. Chairman, let me begin by saying at least 
there is one element of consistency I do not believe any of you 
in your prepared remarks or in your remarks here today have 
applauded the Department of Energy's structural organization or 
their current efforts at security or compliance with safety or 
environmental fiscal years. So we at least seem to have come to 
agreement on that issue.
    But I am intrigued with your comments on the conflicting 
proposals to correct the problem. Mr. Kettl, I kind of want to 
begin with you. You have cited the reform of the culture within 
DOE and DOE's contractors, and on that point, I agree with you.
    But I want to explore with you the models you have cited 
and raise the question of whether or not those models are 
appropriate. I wrote down your comment. You said, Nordstrom 
does not do customer service, it trains its employees to make 
customer service a part of their job, and I think that is 
correct and I think that is a great model.
    I guess my question, though, and I think this also goes to 
the NASA model--you cited the NASA model as another one where 
NASA had the Challenger catastrophe. I would argue to you and 
ask you to respond to this point. In Nordstrom's, every 
employee of Nordstrom's that I have ever met took pride in 
customer service. They understood that Nordstrom's was better 
at that and they understood that it was important for them to 
make customer service a priority and it was almost a badge of 
honor for them. So when they were told by management, ``Make 
customer service priority,'' they understood that was a goal of 
the enterprise and they understood it was important for them to 
keep their job to achieve their goal.
    At NASA, following the catastrophe, I doubt if you could 
have found a single employee of NASA or a contractor at NASA 
who would not have agreed that safety had to be No. 1. 
Certainly, NASA had to accomplish its mission, but it could not 
accomplish that mission if safety was not No. 1.
    My argument to you, or the question I want to put to you 
is, I doubt if you can find agreement within either DOE's 
employees or agreement within DOE's contractors that nuclear 
security ought to be No. 1, and I guarantee you cannot find 
agreement within DOE's employees or its contractors that either 
safety or environmental compliance ought to be No. 1. If I am 
right about that and if you agree, does not that suggest either 
that there has to be an independent agency which can impose 
that mindset with some level or authority, or does it suggest 
that we have to move in the direction of what Mr. Rezendes 
suggests, which is a complete restructuring?
    Mr. Kettl. If you look at the behavior inside DOE, I would 
wager you probably could not find anybody who would agree it is 
a good thing for nuclear secrets to leak to a foreign nation. I 
think on that point, you can find a similar kind of agreement 
that has occurred within NASA.
    Mr. Shadegg. Well, let me interrupt you right there. I 
guess maybe I do not understand the labs as well as you do, but 
I have talked to some scientists from the labs, and for each of 
them, their program is the most important. Many of them, I 
think, they would not want to transfer nuclear technology to a 
foreign nation that was an enemy, the Communist Chinese, but 
they think their program, whatever it is, is the single most 
important function, and if as a result of achieving their goal 
some secrets leak out, I, quite frankly, think they have some 
belief that, look, that information is going to get found out 
by the other side already. They are developing the same stuff. 
This whole deal about security is overblown. Am I wrong about 
that?
    Mr. Kettl. I have never seen a group of scientists who did 
not believe that what they were doing was the most important 
project in the world that they were working on. It is the kind 
of isolation, the kind of stovepipe within the Department of 
Energy that in many ways is its most serious problem. I think, 
in a nutshell, DOE's most serious problem is a series of semi-
autonomous operations out there completely disconnected from 
headquarters and a headquarters that is encrusted with too many 
layers to make it difficult for the message to get through. So 
you have lots of debris at the top and isolated stovepipes at 
the bottom and the two never connect.
    NASA, in fact, has gone out exactly this problem. The Jet 
Propulsion Laboratory had the same kind of problem. NASA 
scientists behaved in much the same way, where they believed 
their project was the single most important thing in the entire 
history of the universe. But what they succeeded in doing was 
talking to each other and understanding that there could be 
common ground between them, that achieving the organizational 
mission had some priority over their own individual project and 
that their project fit into the organizational mission and that 
they used that as a way to try to break down the stovepipes in 
between.
    The difficulty with DOE is that if you visit the Nevada 
test site, which is clearly one of the, in terms of security, 
an important issue, in terms of long-term nuclear storage, an 
important issue, but in terms of partnerships with citizens, 
State, and local governments, an important issue, as well, if 
you try to separate out only security issues there, you run the 
risk of undermining what the Nevada test site as a mission has 
to accomplish.
    Mr. Shadegg. Is it not, then, Congress' job to decide with 
all these different missions, diffuse missions, that priority 
has to be placed on security, and is it not then Congress' job 
to figure out a structure which makes that the priority in the 
way that the management of Nordstrom's made customer service 
the priority?
    Mr. Kettl. Absolutely. It is Congress' job to decide what 
the mission ought to be. What I worry about is in a previous 
life, I served on a task force for the Secretary of Energy, and 
I remember wandering through Rocky Flats where people were 
talking about hot dogs, prairie dogs that were wandering 
through plutonium waste and the fear was that they were 
radioactive in the process. The concern there was how you could 
clean up the site there and try to avoid in the process 
endangering people with contamination. That was the last crisis 
the Department had to solve, and as we discussed this morning, 
that became the No. 1 priority. I do not think that is going to 
go away, and we know, if nothing else, that is going to be with 
us for 75 years, trying to clean that up.
    So we have the national security issue, which is not going 
to go away. We know that the nuclear cleanup is not going to go 
away. We know that long-term nuclear storage is a 10,000-year 
mission. What we have to do is find some way to balance all of 
these things out, and I do not think we have the luxury of 
picking just one.
    Mr. Calvert. The gentleman's time has expired.
    Mr. Shadegg. If I could just comment quickly, Mr. Happer, I 
certainly agree with you that someone has to own the issue of 
nuclear stewardship and I think you are right on that point. 
Mr. Rezendes, if I get a second round, I would like to ask you 
about larger structural reform.
    Mr. Calvert. I thank the gentleman. The gentleman from 
Michigan.
    Mr. Dingell. Thank you, Mr. Chairman. Mr. Rezendes, in the 
light of your testimony and the examples that you have given, 
would insulating within a semi-autonomous agency answerable 
solely to the Secretary of Energy improve accountability, yes 
or no?
    Mr. Rezendes. Within that, it would improve accountability.
    Mr. Dingell. It would? Now, would such a semi-autonomous 
agency make it easier or harder for States and citizens' groups 
to improve DOE's public health, worker safety, and 
environmental practices?
    Mr. Rezendes. If the health and safety is within, it is 
probably going to make it harder.
    Mr. Dingell. It would be harder? Now, Mr. Rezendes, some in 
Congress and on today's panel believe that an independent 
weapons bureaucracy could be counted on to manage its own 
environmental health, safety, and compliance in a manner that 
protects workers and communities. Has GAO encountered any 
evidence over the past 30 years to indicate that this belief 
has any basis in fact?
    Mr. Rezendes. Run that by me one more time.
    Mr. Dingell. Well, I have investigated them a bunch of 
times and I have never found a shred of evidence to support 
that view. I just mentioned, has GAO encountered any evidence 
over the past 30 years to indicate that an independent weapons 
bureaucracy could be counted on to manage its own environmental 
health, safety, and compliance in a manner that protects 
workers, communities, and the environment?
    Mr. Rezendes. Again, not if they have the environmental, 
health, and safety aspects within the group. If there is 
external oversight, it could.
    Mr. Dingell. I remember the AEC well. There are not too 
many in this room who do. But it is my recollection that they 
had a very strong ``public be damned'' attitude. They would 
tell you nothing. They would do nothing except what they damned 
pleased. They have created a nuclear peril point at every one 
of their facilities and entrenched it with hazardous waste, and 
we have a prodigious mess to clean that up. It is going to cost 
us billions.
    Now, is it not a fact, then, that the record is quite 
opposed to the view that we can count on them to protect 
communities, the environment, citizens, and to be responsive to 
their superiors?
    Mr. Rezendes. We have been a long advocate, as you know, 
for external oversight and external regulation of the 
Department of Energy, and to the extent that that was in place, 
you could clean up some of these and have independent 
departments and have both.
    Mr. Dingell. Professor Kettl, does the proposal to create a 
semi-autonomous agency for nuclear security tasked with 
managing weapons plants and labs, overseeing its own 
environmental, health, and safety compliance, and equipped with 
its own general counsel, budget office, and intergovernmental 
liaison staff solve the security problems at DOE, yes or no?
    Mr. Kettl. I have concern that it would do so and it runs 
the risk of replicating all the current problems inside a semi-
department within the DOE.
    Mr. Dingell. And to suppress all information so that it 
would not escape from that black hole, is that not right?
    Mr. Kettl. The goal is to try to ensure that other 
officials in the Department cannot stop it. I worry that your 
concerns are, in fact, valid.
    Mr. Dingell. All right. Now, does the proposal increase 
accountability at DOE, yes or no?
    Mr. Kettl. No. I fear that what would happen is that 
information would be buried further inside the DOE bureaucracy.
    Mr. Dingell. Is it not a fact that the proposal does 
nothing to address the dysfunctional culture that now exists at 
DOE that both you and Senator Rudman have highlighted as a root 
cause of the security and management problems at DOE?
    Mr. Kettl. That is correct. The missing link in these 
proposals is that there is no connection between the 
restructuring and a culture change that is retired.
    Mr. Dingell. I think you just made a very important point. 
A cultural change is needed, in good part because of the 
miseries that have been left behind by the incompetence and the 
arrogance of the AEC, is that not so?
    Mr. Kettl. I believe that is correct. You can look over 50 
years of history that lie at the root of the culture problems.
    Mr. Dingell. So we can then assume that this proposal would 
exacerbate rather than benefit DOE's management problems?
    Mr. Kettl. I fear that is the case.
    Mr. Dingell. And it would perpetuate a ``public be damned'' 
attitude there, too, would it not?
    Mr. Kettl. It runs the risk of undermining the efforts that 
are underway to try to improve the Department's culture.
    Mr. Dingell. Would it not be fair to say that DOE needs a 
comprehensive reform in order that the problems can be solved 
and that they will not be solved by simply converting defense 
programs into a semi-autonomous agency?
    Mr. Kettl. That is correct, and any restructuring ought to 
be mission-driven.
    Mr. Dingell. Now, to the members of the panel, and you will 
have to understand I am under constraints of 5 minutes, let us 
address these questions. Could requiring DOE to compete its 
contracts for the Livermore and Los Alamos laboratories help 
improve accountability at those labs, yes or no? Mr. Rezendes?
    Mr. Rezendes. I would say yes.
    Mr. Dingell. General?
    Mr. McFadden. Yes.
    Mr. Dingell. Sir?
    Mr. Happer. No.
    Mr. Dingell. No? You do not think we ought to compete those 
contracts?
    Mr. Happer. I think if you compete them, the first thing 
that will happen is UCal will drop out and you will lose a good 
fraction of the people that you need for your mission.
    Mr. Dingell. I have dealt with UCal before and I have found 
that they have cut a fat hog out there at those agencies and 
have raided the treasury, perhaps while you were at the 
Department, to have us fund their retirement program. Professor 
Kettl?
    Mr. Kettl. You are speaking to a professor from the Big 
Ten, so I have certain views about that, but I think you are 
exactly right.
    Mr. Dingell. And, ma'am, what would you say?
    Ms. Eldredge. Yes, recompete it.
    Mr. Dingell. Now, next question. Should DOE be required to 
compete its contracts at the weapons labs? Mr. Rezendes?
    Mr. Rezendes. Absolutely.
    Mr. Dingell. General?
    Mr. McFadden. Yes.
    Mr. Dingell. Mr. Happer?
    Mr. Happer. No.
    Mr. Dingell. Doctor?
    Mr. Kettl. Yes.
    Mr. Dingell. Ma'am?
    Ms. Eldredge. Yes.
    Mr. Barton. You are saying compete, right, compete?
    Mr. Dingell. That is right, compete.
    Mr. Barton. C-o-m-p-e-t-e, not complete.
    Mr. Dingell. That is correct. I may have misspoken.
    Mr. Barton. All right, compete.
    Mr. Dingell. Compete. Let us start again.
    Mr. Rezendes. That is what I was responding to.
    Mr. McFadden. I heard compete, yes.
    Mr. Happer. Yes.
    Mr. Dingell. You agree? My word. Professor?
    Mr. Kettl. Yes.
    Ms. Eldredge. Competition is good.
    Mr. Dingell. Okay.
    Mr. Calvert. The gentleman's time has expired.
    Mr. Dingell. Could I just ask one more question? Should DOE 
be required to compete its contracts for all the laboratories?
    Mr. Rezendes. Yes.
    Mr. McFadden. Yes.
    Mr. Happer. No.
    Mr. Kettl. Yes.
    Ms. Eldredge. All the laboratories and all the facilities.
    Mr. Dingell. Thank you. Mr. Chairman, you are most 
gracious. I thank you for your courtesy.
    Mr. Calvert. I thank the gentleman.
    I recognize myself for 5 minutes. Dr. Kettl, you mentioned 
Nordstrom's, and also Wal-Mart was brought up, Chrysler, I 
think, was brought up and the reengineering of that company, 
certainly NASA was brought up. In all of these examples, there 
was something in common, and that was a very strong personality 
in charge of the companies, a strong CEO. Dan Goldin certainly 
has been instrumental in restructuring NASA.
    Mr. Rezendes, you brought up the one occurrence over the 
years that you had a happy experience with the----
    Mr. Rezendes. Naval Reactors.
    Mr. Calvert. [continuing] And I would say that Admiral 
Rickover probably had a lot to do with that. I would suspect 
that Admiral Rickover's management chart was pretty simple. It 
started with him and probably ended with him. General Grove, I 
understand, had the same type of mentality with the Manhattan 
Project and managing the development of the atomic bomb.
    I wanted to agree with my friend from Michigan's comments 
earlier that, really, the problem, I think, starts at the top. 
We have not really focused on putting a Secretary of Energy in 
and give them the responsibility to make the changes that are 
necessary, not only in the operation of the Department of 
Energy but every aspect of that Department.
    With that, my question, Mr. Rezendes, you state that the 
DOE's fundamental organizational problem is the laboratory 
contractors and their field offices receive funding, program 
direction, oversight from several different headquarters 
offices, which sometimes have overlapping responsibilities. 
Creating a clean line of accountability with DOE's complex 
structure has not yet been achieved. Is there a legislative fix 
to creating such a clean line of accountability or would you 
think a better way to do this would be to get a Secretary in 
there that truly knows what they are doing as far as management 
and taking over an operation of that size?
    Mr. Rezendes. I am even going to make a third option here. 
I really think you need to reassess the Department and its 
missions to reassess the Department and its missions. I mean, 
it basically evolved from the Manhattan Project and created in 
1977 to address the energy crisis. Then in the 1980's, the 
majority of its budget went into production of nuclear weapons. 
Now, the majority of its budget is into environmental cleanup.
    I testified with Secretary O'Leary when she was in office 
and she said that she introduced herself not as Secretary of 
the Department of Energy but as the Secretary of the Department 
of Science. My question is, they are reinventing themselves 
without Congressional approval or authorization, and if this is 
really now the Department of Science, what other pieces in the 
Federal Government ought to be brought in to make it an 
effective organization?
    The other side of the coin is, what happened to all the 
missions Congress gave them when they were not the Department 
of Science, and I think that is part of the problem today. It 
has four broad missions and the question is, if the Department 
of Energy did not exist today, are these the four broad 
missions that need to be brought together to achieve some kind 
of national purpose, and I think Congress needs to sort that 
out in relation with the administration in terms of what are 
the real missions we want them to do? Are these governmental 
functions? If they are governmental functions, is this the 
right structure and the right location to carry these out?
    Mr. Calvert. Any comment from the other panelists?
    Ms. Eldredge. I think it would be a big job to ask one 
person to come in and, on the force of their personality, get a 
grip on this agency. Not only does it do a lot of different 
things, but as the Rudman Commission report pointed out, it is 
under the jurisdiction of something like 18 Congressional 
committees, all who have certain funding priorities that they 
want to see continue. I think that the fact that the 
bureaucracy at DOE has a great deal of entrenched power and a 
great deal of political power and that anyone coming in at the 
headquarters level has a very difficult time trying to enforce 
any kind of new structure or any kind of reforms on that 
bureaucracy.
    So I do think it is going to be up to the Congress to think 
about a better way of doing business there. Unfortunately, I do 
not think it is a quick fix. I think it is a case of 
legislation that needs to be very carefully crafted.
    Mr. Calvert. Yielding back the balance of my time, I 
recognize the gentleman from Illinois.
    Mr. Costello. Dr. Happer, one of the first things that 
then-Energy Secretary Watkins did when he came into office was 
to establish independence, oversight, and he gave priority, in 
fact, to environmental, health, and safety performances. I am 
just wondering, why do you think that reverting back to an 
organizational structure that does not explicitly give priority 
to environmental, health and safety matters and instead gives 
free reign to nuclear weapons production personnel make sense?
    Mr. Happer. I do not believe that. I believe that you need 
an organization in which environmental safety and health is one 
of many missions that have to be balanced, and when Admiral 
Watkins, who was my boss, was running the Department, he paid 
close personal attention to all of these issues and he 
addressed them day by day. That is almost super-human. There 
are very few Secretaries who could do that. So I think it is 
asking too much for a Secretary of Energy to do all of the 
obligations that Congress has put on him or her and at the same 
time do this extremely important mission of nuclear weapons, 
safeguarding our nuclear security.
    Mr. Costello. But if, in fact, we had an Agency for Nuclear 
Stewardship to oversee its own environmental health and safety 
performance, would that not basically amount to letting the fox 
watch the hen house?
    Mr. Happer. I was interested in Mr. Rezendes saying that 
the one pleasant surprise he had was the Naval Reactors. That 
is the only organization in the Department of Energy now that 
is anything like what is being proposed. I never signed a 
single document that did not say, ``This does not apply to 
Naval Reactors.''
    Mr. Costello. I am not quite clear on your answer.
    Mr. Happer. The answer is that Naval Reactors runs its own 
show and it actually runs quite well.
    Mr. Costello. General McFadden, you have mentioned that 
whatever reorganization the Department goes through, that we 
need to concentrate on organization, budget, and attitude. You 
commented on the organizational structure. We have heard a lot 
about attitude. What did you have in mind when you talked about 
budget?
    Mr. McFadden. What I had in mind when I talked about budget 
is to take the moneys that are being spent on security, and I 
am not saying that the problem is total amounts. The problem is 
that it is diffused, that sometimes you get a new parking lot 
when you should have had maintenance on a security fence using 
the same dollars. That is because that money is given out to 
the various organizations, then executed by the contractors, 
and until you get your report at the end of the year and can go 
down these many lines to determine, was it spent or was it not, 
then you are a year behind and you try to get the fence fixed 
the next year, or whatever.
    So I say that the solution that I believe is the only 
solution that is going to make this work in the long run is to 
take the $850 million a year that is being spent on security in 
the Department of Energy and put that in a line item and have 
that line item the responsibility of the man that is in charge 
of security for the Department.
    Mr. Costello. Mr. Chairman, thank you.
    Mr. Barton [presiding]. We are not used to people yielding 
back time. Does Mr. Shadegg wish to go first? I am going to be 
here a while. If you have a luncheon engagement, I can 
recognize you now.
    Mr. Shadegg. That is fine with me, Mr. Chairman. You can go 
or I will go. If you are ready for me to go, I will go.
    Mr. Barton. Let me go. I thought you had a lunch 
engagement.
    Mr. Shadegg. No, I rearranged my lunch.
    Mr. Barton. Okay. The Chair would recognize himself, then, 
for 5 minutes. I want to just recapitulate Congressman 
Dingell's statement. With the exception of Dr. Happer, all four 
of you stated that you thought these contracts should be either 
competed or recompeted, is that true?
    [All nodded yes.]
    Mr. Barton. A follow-up to that. I am of the opinion that 
an academic institution whose very interest is openness and 
collegial exchange is probably not the best type of contractor 
to manage a weapons laboratory. When we recompete these 
contracts, are you all willing to allow academic institutions 
to compete for the contract, or would you restrict them to non-
academic institutions in terms of competition? Let me start 
right down the line.
    Mr. Rezendes. I have no preference. Basically, we have 
looked. I think there are some benefits to having a non-profit 
in association with the university, but I think there are ample 
universities out there who would come forward and compete on 
these contracts.
    Mr. Barton. Okay. General?
    Mr. McFadden. I guess that I would have to come down on the 
side of having professional management companies or 
corporations taking over and then subcontracting the specific 
scientific work to the universities.
    Mr. Barton. I know, Dr. Happer, you said that you do not 
think they should be recompeted, but if we are going to 
recompete them, do you have any restrictions on who competes 
for the contracts?
    Mr. Happer. No. I think you should let academic 
institutions be part of the competition.
    Mr. Barton. Dr. Kettl?
    Mr. Kettl. I would agree.
    Mr. Barton. And Ms. Eldredge?
    Ms. Eldredge. We do not really have a position one way or 
another, but we do think that, regardless of who the manager 
is, nonprofit or not, they should be subject to the same fines 
and penalties for violations as a for-profit company.
    Mr. Barton. That brings my next question, because if you 
are going to recompete and you are going to allow academic 
institutions to compete, then should you hold them subject to 
the same set of conditions as the for-profits? I know, Mr. 
Rezendes, you said yes.
    Mr. Rezendes. Yes, absolutely, and I think there is a way 
to do that. The University of California, while they are a 
nonprofit, we do pay them a management fee for running these 
facilities. For example, they get $7 million a year for Los 
Alamos. I think, all together, there is something like close to 
$14, $20 million. I do not know what the exact number is here. 
They use that money, depending on how their performance is, to 
plow it back into research that they think is of priority. That 
is an important element in any research organization. If you 
deprive them of those research funds, you are creating a 
penalty. We can create fines and penalties to the extent of up 
to what the award fee or the management fee would be for those 
institutions.
    Mr. Barton. Does anybody want to comment? General?
    Mr. McFadden. I would only like to make one statement, and 
that is when we talk about the measure of performance 
determining what goes into that final payment, I think you are 
hard-pressed in most cases to find any meaningful references in 
those performance ratings to security performance. That has 
been a long-term problem.
    Mr. Barton. So we need to highlight the security aspect of 
it?
    Mr. McFadden. Yes.
    Mr. Barton. Does anyone else wish to comment on that?
    Ms. Eldredge. I think it is ridiculous that they can get an 
award benefit and not have to pay fines for failures. I think 
the University of California got 95 percent of their award in 
previous contracts and cycles, yet they had half-a-million or 
more in fines that they did not have to pay. That sort of 
structure just seems destined for failure.
    Mr. Barton. This question is an open-ended question, but it 
is in some ways the heart of what this hearing is all about. 
Let us assume for a second that we are not going to maintain 
the weapons laboratories within the DOE, that we are not going 
to do this. It is not going to be semi-autonomous. It is not 
going to report directly. We are going to take them out of the 
Department of Energy.
    I want each of you to tell me where you would put the 
weapons laboratory, if it is not going to be within DOE, and 
more broadly, to go to what Mr. Rezendes has talked about and 
which I support, if we were to dismantle the Department of 
Energy, where would you put the various components of the 
Department of Energy? We will start with you, Mr. Rezendes, and 
go on down the line.
    Mr. Rezendes. Sure. I think Bob Galvin, who headed 
Motorola, chaired a task force the Secretary looking at exactly 
what to do with the laboratories and I think he had a very good 
suggestion, which was have them as stand-alone, sort of like a 
Mitre Corporation, where they would do Department of Energy 
work but the Department of Energy would be a client just as 
other people and would compete for some of the resources that 
were there. I think that is a good model to take a serious look 
at.
    I think in terms of some of the other places how the 
Department could be moved, this was one of the subjects of what 
we asked this expert panel that we brought together. Just about 
everything that the Department of Energy does today could fit 
someplace else, without question. The real issue is, what does 
that do to the gaining agencies' management attention and 
budget priorities? I think you have to take a close look at 
that.
    For example, if you move the cleanup program to EPA, the 
cleanup program at DOE is $230 billion over the next 30 years. 
That will dwarf the Superfund program and the management 
attention there totally different than what they have today. 
Similarly, moving the cleanup to, let us say, or some of these 
facilities to DOD, you are going to change the management 
attention and priorities. If you want the Department of Defense 
to be a clean military operation, giving them a factory 
operation is going to also change their priorities, and that 
may not be something--well, let me put it this way. It is 
something you want to take a heavy look at and get both sides 
before you make that move.
    Mr. Barton. I want to understand. On the weapons 
laboratories, you are advocating making them independent, 
stand-alone entities, I assume that would report directly to 
the President, is that what you are advocating?
    Mr. Rezendes. They would be, under the Galvin 
recommendation, they would be sort of a government entity, a 
government corporation, sort of.
    Mr. Barton. But they would be independent and report 
directly to the President?
    Mr. Rezendes. I think the way he had it, he had a board of 
directors appointed by the President that would run the 
facilities.
    Mr. Barton. Okay. General McFadden? As soon as they answer, 
then I will yield to Mr. Sawyer.
    Mr. McFadden. Just very quickly, I guess I would object to 
the basis of the question in that I have never felt that it 
made much sense to remove those labs from the control of the 
Department, because from a security point of view, then you 
just create various other places where you are going to have 
security problems and you are not going to have the expertise 
that will be available to go to those diffused and work in 
those diffused areas, that will have the knowledge of the type 
of security that is required for nuclear materials.
    Mr. Barton. You can object to the question, but I still 
want you to answer it. So assume it is not going to be within 
the Department of Energy. Where would you put them?
    Mr. McFadden. I guess I would go for Defense.
    Mr. Barton. Put them in the Department of Defense?
    Mr. McFadden. Yes.
    Mr. Barton. Okay. Dr. Happer?
    Mr. Happer. Well, certainly, when you speak of the labs, I 
take it you mean the whole complex, the labs----
    Mr. Barton. I am specifically on the weapons laboratories, 
but, obviously, they do some non-military research.
    Mr. Happer. Right. Right. I agree that the only other 
logical place to put them, and I think there would be big 
problems, would be the Department of Defense.
    Mr. Barton. You would not be willing to create an 
independent agency that reports directly to the President?
    Mr. Happer. Well, I am not sure the President has time to 
look at all of these little independent agencies, even when it 
is as important as this.
    Mr. Barton. We have the United States Trade Representative 
who reports directly to the President. They are not cabinet 
agencies, but they are independent and they may have a board, 
but they are their own entity, and if we had the proper 
oversight, which I think Mr. Rezendes has spoken of very 
eloquently, then you would get that.
    See, I just do not believe DOE can manage anything, and 
that may be just my opinion, but every time I have done an 
investigation of the Department of Energy, it comes out looking 
worse than before we started the investigation, in spite of 
your efforts when you were head of the office----
    Mr. Happer. We tried hard.
    Mr. Barton. I know you did, sir. It is just a job that good 
people cannot get a grasp on sometimes.
    Mr. Happer. Yes.
    Mr. Barton. Dr. Kettl?
    Mr. Kettl. I guess I can imagine other places to put it, 
including an independent agency in the Department of Defense. I 
guess what I am concerned about is how you would do that 
without replicating the virus that you are trying to kill, that 
some of this is hard-wired into the nature of the missions and 
the conflicting expectations in the Department and the risk is 
that if you take it and move it someplace else, you carry with 
it all the problems you are trying to root out. You make it 
more difficult to deal, as the General pointed out, with things 
like national security, and compound that with the fact that 
you may increase the problem of oversight and make more 
difficult all the partnerships that you need to build.
    Mr. Barton. Give me an answer. We have lots of people who 
can give us the problem, and you have done a very good job of 
that. Do you have an opinion? If we let you pick where to put 
it, where would you put it?
    Mr. Kettl. If I were to put it someplace, I would probably 
create it as an independent agency, but I would resist doing 
that to begin with.
    Mr. Barton. So your preference, then, would be to keep it 
within DOE?
    Mr. Kettl. Yes.
    Mr. Barton. Okay. Ms. Eldredge?
    Ms. Eldredge. It is a very difficult question and one we 
have been wrestling with as an organization for a number of 
years. The primary issue of concern to us is, regardless of 
where any of the pieces of DOE went, that there is oversight by 
external agencies. If you can set up a structure where the 
relevant regulatory bodies actually have some authority and 
control over activities, then I think the question of where 
becomes slightly less important, at least on some of the 
environment and safety issues.
    Regarding structure, some people have talked about the 
Department of Defense and there have been pros and cons on 
that. Other people have talked about recreating an entire new 
agency that pulls some of the pieces from the current DOE, not 
just the weapons laboratories but some of the other functions, 
as well, because trying to move basically production facilities 
and operations, such as currently in DOE, into some of the 
existing agencies does not seem to fit that well.
    Mr. Barton. I know none of you want to answer this 
question, and it is not a good answer, but you have not 
answered it, either. Everyone has tried to dodge the question. 
Would you keep it within DOE, and if you cannot keep it within 
DOE, where would you put it?
    Ms. Eldredge. I would change DOE.
    Mr. Barton. You would change DOE? That is impossible. So do 
you want an independent agency, do you want to put it in the 
Department of Defense, or do you want to put it in the National 
Security Agency? There are a number out there.
    Ms. Eldredge. None of the above.
    Mr. Barton. None of the above? Okay. My time is expired. I 
recognize the gentleman from Ohio, Mr. Sawyer.
    Mr. Sawyer. Thank you, Mr. Chairman. Let me return to Mr. 
Rezendes' answer. Am I correct that I heard you say you thought 
that it ought to be an independent entity, perhaps governed by 
an independent board of directors?
    Mr. Rezendes. That was the Galvin Commission.
    Mr. Sawyer. Yes. You advocated it, though.
    Mr. Rezendes. I do not have a position, but I think it is--
--
    Mr. Sawyer. I guess that is true. You do not have a 
position, but I am just fascinated by that model. It sounds so 
much like the Postal Service. I do not have anything against 
the Postal Service--in fact, I admire the Postal Service, but I 
am just not sure that that is the model that----
    Mr. Barton. Really, the truth is, Congressman, nobody knows 
exactly what to do, and that is----
    Mr. Sawyer. Yes. I think that is absolutely true, and one 
of the great difficulties that we face is that as we face an 
agency as it exists, simply breaking it up and moving it about 
to different places creates its own universe of problems. 
Trying to come to grips with those, I think, is particularly 
difficult.
    I look at the way that a new agency would have its own set 
of security and environmental and safety operations, to say 
nothing of its logistical operations, its own legal structure, 
its own communications structure, its structure to deal with 
State and Federal Governments, local governments. The rest of 
DOE has these functions. If we just talk about setting up an 
entity within the DOE to have handle all of those functions, I 
am assuming that that is both duplicative and potentially 
conflict-laden and also multiplies costs, at least on the 
logistical side. Would you all agree with that?
    Mr. Rezendes. Well, I mean, even if it were effective, it 
is only dealing with 35 percent of DOE's budget. Defense 
programs is only about a little over a third of their $18 
billion a year. So you have still left two-thirds of the 
Department----
    Mr. Sawyer. I can barely hear you.
    Mr. Rezendes. I am saying, defense programs is a little 
over a third of the Department's budget, so even if it were a 
great idea and were very effective, you are still not dealing 
with two-thirds of the operation of the Department of Energy.
    Mr. Sawyer. That is exactly my point, and it would cause 
substantial difficulty in that regard. Would it not also be 
difficult to have consistent policies across the agency? If we 
had a cleanup situation at one of the sites, who would speak 
for the agency in the circumstances that you envision? It would 
probably go to the President. It usually does in the end. If it 
is enough of a catastrophe, it would. Ms. Eldredge, do you have 
any thoughts about that?
    Ms. Eldredge. If it was a new agency with just the 
laboratories? I am not sure I understood your question.
    Mr. Sawyer. It involves several different models, the one 
where we function within the agency, whether there is a new 
agency. It is a set of problems to create a universe of their 
own. It is the problem that someone said, I guess it was Dr. 
Kettl, stealing from Dr. Happer's analogy where he said that we 
would be replicating the virus that we are trying to kill. I 
thought that that had substantial wisdom to it.
    Ms. Eldredge. I think one of the problems when people are 
talking, with any new agency whose primary mission is weapons 
production and weapons research, it is not going to want to 
spend its resources on cleanup activities or safety and health 
or perhaps even security functions. I mean, that is the problem 
we had in the past. Admiral Watkins stated in his testimony in 
1989, I believe, that the weapons production people thought 
weapons production was incompatible with environment and safety 
compliance and he aimed to change that, and his change was to 
pull those functions out of the weapons production line.
    Now we are looking 10 years later at reversing that and 
expecting somehow that that makes a more accountable system. It 
did not make an accountable system 10 years ago. The culture 
has not changed appreciably in that time. I do not think it 
will make a more accountable system now.
    Mr. Sawyer. Let me follow up on that. I was particularly 
interested in your observation that the proposed legislation 
for a new agency would leave nobody in charge of all of the 
plutonium sitting around the nonproductionsites and does not 
give the productionsites any place to dispose of theirs. Do you 
have any sense of how any of these models might deal with that 
specific problem?
    Ms. Eldredge. The Senate model is particularly problematic 
in terms of their restructuring proposal, which pulls the 
Office of Fissile Materials into this new Agency for Nuclear 
Stewardship, in that that office, while it makes the planning 
and analysis for what to do with our excess fissile materials, 
does not actually own any facilities or storage places for that 
material. Those facilities and production activities are all 
owned, so to speak, by the environmental management line.
    So the Senate proposal essentially pulled the paper pushers 
over into their new agency but left all the material in with 
environmental management and the relationship between those two 
functions is not defined in any way and who has regulatory 
authority and who has ultimate responsibility for that storage.
    Mr. Sawyer. Should I take it that you do not think the 
multi-State consortia would be able to solve this problem?
    Ms. Eldredge. Not exactly.
    Mr. Sawyer. Do others want to comment?
    Mr. Kettl. I just want to agree with what Ms. Eldredge 
said, that the difficulty is that not only would the 
responsibility for, in a sense, the stewardship and the storage 
be separated, the safety and health responsibilities are 
unclear, but worse, are submerged even more deeply down with a 
firewall created between that and the rest of the Department, 
which, going back to your original question in ensuring 
coordination of Departmental policies, would surely make that 
situation much worse.
    Mr. Sawyer. Others?
    Mr. Happer. I would just like to comment that things have 
changed. We are not making nuclear weapons. We are gradually 
dismantling nuclear weapons, so it is not like it was in the 
1970's and the 1980's where we were making them as fast as we 
could.
    Mr. Sawyer. No, but it sets up a whole different series of 
weapons-grade materials problems that have to be dealt with.
    Mr. Happer. That is correct, but they are of a different 
nature so that we are not producing huge amounts of solvents 
and wastes and the sort of things that were associated with 
weapons production. So there are problems, but they are 
different problems.
    Mr. Sawyer. Thank you. Thank you, Mr. Chairman.
    Mr. Barton. The last questions are of the gentleman from 
Arizona, Mr. Shadegg.
    Mr. Shadegg. Thank you, Mr. Chairman. As I review your 
testimony, it appears to me that three of you are largely 
convinced that the creation of a semi-autonomous agency to look 
at security would not solve the problem. Mr. McFadden testified 
to that point, Dr. Kettl has so testified, and Ms. Eldredge 
says we should not reward them by granting them semi-autonomous 
status.
    But you can see clearly that the frustration on our part 
is, what is it, then, that Congress can do? The creation of a 
semi-autonomous agency to focus on this at least lets us feel 
we have done something, and I think the chairman indicated our 
frustration with the Department and with the complete lack in 
Congress of any confidence that DOE can handle this problem 
well internally.
    I would like to ask the three of you what specific 
recommendations you would then make. If the creation of a semi-
autonomous agency focused on security and health and 
environmental compliance is not the right way to go, what 
specific things can Congress do, No. 1, and as a part of your 
answer to that question, do you agree with Mr. Rezendes' 
proposal that anything should consider a reassessment of all of 
the Department's missions? General McFadden, let us begin with 
you.
    Mr. McFadden. I guess I am restating the fact on the 
budget, and one of the reasons that the changes from a cross-
cut to a line-item budget was never made was that many of the 
staff on several committees up here resisted such a change 
being made in the Department. I believe that now is the time 
for Congress to look seriously at having that kind of a change 
made within the Department of Energy so that not only can 
Congress get a better look before the money is spent as to 
what, in fact, is in the security and what are the shortfalls 
that are known for security are not being given priority to be 
taken care of, and I would say that, as far as I am concerned, 
that is the key thing that Congress could do.
    Mr. Shadegg. Dr. Kettl?
    Mr. Kettl. Let me, just by way of prelude, just for a 
second, quickly go over some of the restructurings that have 
happened in the Department over time. First, organized 
according to weapons production. Second, organized, then, 
according to energy 20 years ago, then reorganized to try to 
promote environment. Now, a discussion to try to reorganize for 
national security. There is a risk that the more layers we 
build on top of all this, the worse it all gets, and at some 
point, the structure simply gets in the way.
    Mr. Shadegg. I think that is Mr. Rezendes' point.
    Mr. Kettl. I think what we need to do, if the question is 
what can Congress most effectively do, let me suggest three 
things. The first is, as I suggested earlier, the Government 
Performance and Results Act provides an opportunity for 
rethinking the nature of the Department's mission. If we are 
having a conversation with the Department about what it is that 
it thinks it is doing, to make sure that what the Department 
thinks it is doing is what you think the Department ought to be 
doing.
    Coupled with that is the performance-driven piece of it, as 
well, of ensuring that what it is the Department thinks it is 
doing, it is held strictly accountable in oversight, so that 
there are performance measures that link directly to the 
strategic plans and overall to the mission. We have got to go 
back and rethink what it is that we want so that we make sure 
that as we are doing what we are doing now, we do not undercut 
the Department's ability to do what 5 and 10 years from now it 
needs to do.
    The second thing, as the General has pointed out, is 
linking this notion of mission and performance directly to the 
budget and making sure that there is a clear linkage between 
the resources, the mission, and the performance.
    Finally, as we have discussed today, focusing on 
leadership. Despite the discussions about structure, this is in 
the end a people problem. It has to do with the culture and the 
labs. It has to do with the leadership at the top. Chrysler got 
turned around, in part, because of the personal force of Lee 
Iacocca and his ability to be able to reach down to the 
operations on the floor and the contractors that Chrysler 
depended on to get the job done.
    It is at its core leadership and a people problem, and if 
Congress focused on those three things, it could go a long way 
toward trying to solve this problem.
    Mr. Shadegg. Ms. Eldredge, you said it would be tough to 
rely on an individual to achieve that goal. You must, 
nonetheless, believe that we have to try.
    Ms. Eldredge. Oh, certainly, and it would be great to have 
someone like that in charge and given the ability to actually 
do the job. I think two things Congress needs to look at. One 
is that these issues cut across the complex. They are not just 
at the weapons program or in the laboratories. Issues of 
security exist in several different aspects of DOE. They exist 
at the defense programs. They exist in environmental management 
with the fissile materials. They also exist in nuclear energy 
with some of their reprocessing proposals and some of the 
proliferation risks from those proposals.
    One of the problems with a semi-autonomous agency as being 
proposed now is it attempts to take just one piece, assume all 
the problems are in that piece, and set it aside without 
looking at the cross-cutting problems throughout the 
Department.
    I guess, second, in regards to environment, safety, and 
health, I would ask Congress to revisit the question of 
external regulation. It came up in this committee 5 years ago. 
There was an external advisory board that made recommendations 
to the Secretary of Energy. Just recently, Secretary Richardson 
has said that they do not want to do external regulation and we 
think that was a mistake and we would like Congress to go back 
and look at that again.
    Mr. Shadegg. With the Chair's indulgence, I would like to 
ask one additional question.
    Mr. Barton. So ordered.
    Mr. Shadegg. Dr. Happer, you seem to be the one individual 
who believes that the semi-autonomous agency could be the 
correct structure to solve this problem, which would give at 
least us in the Congress the ability to say, see there, we did 
something. Now, it may not accomplish anything, as Dr. Kettl 
points out. I guess I would like to give you a chance to 
explain why you think that proposal is a workable one and could 
achieve the goal without causing a problem within the agency.
    Mr. Happer. I already mentioned that the Naval Reactors 
Program runs very well and it is organized in that way. The 
other point is that it is very difficult for a single man or 
woman to manage the Department of Energy. It is so diverse and 
there are so many conflicting things you are trying to do. So 
having someone appointed at a somewhat lower level but still 
reporting to the Secretary would free them to focus on this 
very difficult problem of nuclear stewardship.
    Also, I think it would lower the sort of political 
visibility of the person so that you could get someone who 
would more likely be technically competent, managerially 
competent, and without the political requirements to be a 
Secretary of Energy. Those are important, too.
    So these are some of the reasons that convince me that we 
have to try something. I do not think it is possible--I agree 
with the people who said I do not think it is possible to 
reform DOE. It is too hard. People have tried and failed.
    Mr. Shadegg. I thank the Chair for its indulgence.
    Mr. Barton. Thank you. We recognize Congressman Calvert for 
a closing statement.
    Mr. Calvert. I want to thank the chairman. This has been a 
very interesting hearing and I would hope that we could have 
other joint hearings in the future.
    Just to kind of wrap this up, wherever we go with this, 
whether we dismantle DOE or create a separate independent 
department or restructure the existing Department, I guess we 
all agree we do not want unintended consequences to take place 
and that the science that these national treasures produce is 
not damaged.
    I have to put in a plug for the University of California. 
Certainly, there have been some management problems, but I 
would say that the University of California has been an 
integral part of the introduction of the atomic bomb and 
certainly the hydrogen bomb, whether you like that or not. It 
has certainly been involved very much in the history of the 
nuclear program.
    We need to look at these management problems and, at the 
same time, recognize that I think that some of the finest 
physicists in the world come out of the UC system and both are 
still there and are exported throughout the world, certainly 
one member from this committee, Mr. Ehlers.
    With that, I thank the panel and look forward to, 
hopefully, fixing the problems at DOE, whatever solution we may 
take. Thank you.
    Mr. Barton. I want to thank you, Chairman Calvert.
    We announced this as the first of a possible or potential 
series of hearings on this issue. I have signed a letter, and I 
think perhaps Congressman Calvert and Mr. Sensenbrenner, Mr. 
Bliley, Mr. Dingell, and several others, asking the Speaker not 
to move a reform package in the DOD authorization conference 
that is underway with the Senate so we can have the time to 
look at this in a little more detail.
    I said at the opening that I am going to try to get the 
Energy and Commerce Committee to have a reorganization bill for 
the Department of Energy by the August recess. That is a very 
energetic time table. I am not sure we are going to meet it, 
but we are going to begin to think about it and put some 
language together. I would encourage our panel, if you have got 
suggestions, to put those in writing and get them to us because 
I think this is the time and I think these two committees are 
the two relevant committees to really comprehensively look at 
restructuring the entire Department, and within that, the 
weapons laboratories.
    Dr. Kettl, in your analogy to Nordstrom's that seems to 
have resonated with many of the members, what is the goal of 
our weapons laboratory? I think their mission is to make sure 
the United States of America has the very best weapons in the 
world that maintain the security of the United States of 
America. With all due respect, many of these other missions 
that the weapons laboratories have been given, whether they are 
environmental or private sector research, they may help, but 
that is not their main mission. So we need to refocus on that.
    I want to thank this panel for your willingness to come 
voluntarily, your willingness to speak openly in somewhat 
contrary to some of your past positions, at least when you were 
within the administration. It helps us a great deal to 
determine what to do.
    I will be working with Congressman Calvert and Mr. Bliley 
and Mr. Sensenbrenner. It is very possible, and I would say 
perhaps even probable, that we may have another hearing before 
we break on a joint basis.
    Again, thank you, and this hearing is adjourned.
    [Whereupon, at 12:58 p.m., the subcommittees were 
adjourned.]
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