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



   FEDERAL WETLANDS POLICY: PROTECTING THE ENVIRONMENT OR BREACHING 
                         CONSTITUTIONAL RIGHTS?

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

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                            OCTOBER 6, 2000

                               __________

                           Serial No. 106-233

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                               __________

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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 6, 2000..................................     1
Statement of:
    Davis, Michael, Deputy Assistant Secretary for Policy and 
      Legislation, Office of Civil Works, Department of the Army; 
      and Robert Wayland III, Director, Office of the Wetlands, 
      Oceans, and Watersheds, Environmental Protection Agency....   164
    Kamenar, Paul, Washington Legal Foundation; Susan Dudley, 
      Mercatus Center; Gloria Pozsgai-Heater, daughter of John 
      Pozsgai; Victoria Pozsgai-Khoury, daughter of John Pozsgai; 
      and Kathleen Andria, director, American Bottom Conservancy, 
      and chairman, Environment Committee for East St. Louis, 
      Community Action Network...................................    24
Letters, statements, etc., submitted for the record by:
    Andria, Kathleen, director, American Bottom Conservancy, and 
      chairman, Environment Committee for East St. Louis, 
      Community Action Network, prepared statement of............    69
    Biggert, Hon. Judy, a Representative in Congress from the 
      State of Illinois, exhibit 20..............................   129
    Chenoweth-Hage, Hon. Helen, a Representative in Congress from 
      the State of Idaho:
        Exhibit 1................................................    96
        Exhibit 40...............................................    89
        Exhibit 49...............................................   110
        Exhibits 28 and 29.......................................   119
        Exhibit 64...............................................   122
        Exhibit 65...............................................   124
        Information concerning fines.............................   211
        Prepared statement of....................................     9
    Davis, Michael, Deputy Assistant Secretary for Policy and 
      Legislation, Office of Civil Works, Department of the Army:
        Information concerning costs.............................   209
        Prepared statement of....................................   168
    Dudley, Susan, Mercatus Center, prepared statement of........    45
    Gilman, Hon. Benjamin A., a Representative in Congress from 
      the State of New York:
        Letter dated September 15, 2000..........................    17
        Prepared statement of....................................    19
    Kamenar, Paul, Washington Legal Foundation, prepared 
      statement of...............................................    27
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, letter to Colonel Morrow................    80
    Pozsgai-Heater, Gloria, daughter of John Pozsgai, prepared 
      statement of...............................................    64
    Pozsgai-Khoury, Victoria, daughter of John Pozsgai, prepared 
      statement of...............................................    56
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................    13
    Wayland, Robert, III, Director, Office of the Wetlands, 
      Oceans, and Watersheds, Environmental Protection Agency, 
      prepared statement of......................................   183

 
   FEDERAL WETLANDS POLICY: PROTECTING THE ENVIRONMENT OR BREACHING 
                         CONSTITUTIONAL RIGHTS?

                              ----------                              


                        FRIDAY, OCTOBER 6, 2000

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2157, Rayburn House Office Building, Hon. Dan Burton (chairman 
of the committee) presiding.
    Present: Representatives Burton, Gilman, McHugh, Sanford, 
Biggert, Chenoweth-Hage, Maloney, Cummings, Kucinich, and 
Allen.
    Staff present: Kevin Binger, staff director; Daniel R. 
Moll, deputy staff director; David A. Kass, deputy counsel and 
parliamentarian; Sean Spicer, director of communications; 
Nicole Petrosino and Nat Wienecke, professional staff members; 
Robert A. Briggs, clerk; John Sare, staff assistant; Robin 
Butler, office manager; Michael Canty, legislative assistant; 
Josie Duckett, deputy communications director; Leneal Scott, 
computer systems manager; Corinne Zaccagnini, systems 
administrator; Michelle Ash and Elizabeth Mundinger, minority 
counsels; Ellen Rayner, minority chief clerk; and Jean Gosa, 
minority assistant clerk.
    Mr. Burton. Good morning. A quorum being present, the 
Committee on Government Reform will come to order.
    I ask unanimous consent that all Members' and witnesses' 
written opening statements be included in the record and, 
without objection, so ordered.
    I ask unanimous consent that all articles, exhibits, and 
extraneous or tabular material referred to be included in the 
record and, without objection, so ordered.
    Today, the Committee on Government Reform will focus on 
issues surrounding wetlands and the implementation of wetlands 
regulatory programs under Section 404 of the Clean Water Act. 
As with any other environmental issue, there are those who seek 
more protections and those who feel the existing protection is 
inherently unfair and administered inconsistently. I think this 
hearing will provide us with a truly comprehensive range of 
geographic, social, economic and environmental interests that 
will highlight the public's frustration over problems with 
Section 404.
    On panel one, we will hear from Paul Kamenar from the 
Washington Legal Foundation; Susan Dudley from the Mercatus 
Center; and Kathleen Andria, Director of American Bottom 
Conservancy.
    We will also hear from Gloria Pozsgai-Heater, is that 
correct, and Victoria Pozsgai-Khoury--is that correct? Pretty 
close? Good--property rights advocates and the daughters of 
John Poszgai.
    Panel two will consist of Michael Davis, Deputy Assistant 
Secretary of the Army, Office of Civil Works; and Robert 
Wayland, Director of Wetlands, Oceans and Watersheds at the 
Environmental Protection Agency.
    I would like to thank all of you for being here today, and 
I look forward to hearing everyone's testimony.
    I think many would agree that the current program is in 
need of repair. Today, this impressive array of witnesses will 
provide the committee with further guidance on and reaction to 
the issues surrounding wetlands policy.
    The issue of wetlands revolves around different scientific 
and Federal program questions. Scientific questions include how 
to define wetlands and the current rate and pattern of wetlands 
losses, as well as the importance of those losses. Federal 
program questions include the operation of the Federal 
Regulatory Program and other programs to protect, restore and 
mitigate wetlands resources.
    As one who loves the outdoors--I play a lot of golf. I love 
the outdoors. I truly believe that wetlands are an important 
natural resource to our society. Wetlands can be valuable for 
water quality improvement, erosion prevention, flood storage 
and recreation. They also provide fish and wildlife habitat, 
food chain support and contribute to our general quality of 
life.
    However, the protection of wetlands has long been a 
contentious issue. The confusing and onerous nature of existing 
wetlands policy continues to result in a major controversy. Few 
would argue with the statement that there are a number of 
fundamental flaws with our current Federal wetlands policy. The 
inflexible and wide-ranging definition of what constitutes a 
wetland has led to Federal protection of prairie potholes and 
other lands that have been farmed by families for generations.
    Many argue that the definition of wetlands has been 
unreasonably expanded to include properties which are not, in 
fact, wetlands. Because the current definition of wetlands is 
imprecise, many plots of essentially dry land are now being 
classified as wet. Therefore, I believe there needs to be a 
more clear, concise and accurate definition of what truly 
constitutes a wetland.
    As many of you know, three factors are considered when 
distinguishing a wetland: first, the number of days land is 
inundated or saturated with water; second, whether the Earth is 
hydric soil; and, third, whether the area has one of 
approximately 7,000 indicator species of plants growing on it. 
Most of the problems associated with defining wetlands have 
arisen not from disagreements over the appropriate factors but 
over how many factors must exist and to what degree.
    Some experts have suggested taking a three-tiered approach 
to regulating wetlands, from highly valuable to the least 
valuable.
    Another factor to consider is the burden of proof in 
wetlands cases when a property owner is charged with polluting 
a wetland. When a government entity accuses a property owner of 
violating the Clean Water Act, the courts have tended to accept 
the government's determinations that an area is a wetland, 
notwithstanding the fact that the burden of proof is supposed 
to be on the Federal Government.
    As a practical matter, the property owner must prove that 
his or her land is not, in fact, a wetland. I believe, however, 
that the burden of proof in wetlands cases, as in all others, 
should always rest upon the government.
    This leads us to the story of Mr. John Pozsgai. We have all 
heard horror stories about small landowners who are needlessly 
victimized by complex Federal policies. Well, today we will 
hear the personal story of one of these small landowners 
directly from his two daughters, Gloria and Victoria.
    Mr. Pozsgai is a former Hungarian freedom fighter who 
arrived in this country in search of the American dream and 
freedom. And I remember back in 1954, I believe it was 1954, 
when we received some cries for help from the Hungarian freedom 
fighters. President Eisenhower was in the White House, and they 
were ground under the tanks of the Soviets. There wasn't much 
that could be done, and those people were heroic, in my 
opinion, fighting for what we all believe in, that being 
freedom.
    Mr. Pozsgai eventually settled in Morrisville, PA, and 
eventually bought a small piece of land. After the factory he 
was working at shut down, he opened a small truck repair shop 
on that land. This truck repair business allowed him to make a 
modest living for himself and send his two lovely daughters to 
college.
    After many years of hard work and perseverance, he decided 
to purchase a small 14-acre tract of land directly across the 
street which would allow him to expand his business and 
hopefully retire a few years later. After cleaning up more than 
7,000 old tires and rusted car parts and putting some clean 
fill on the land in order to build on it, he received notices 
from the Army Corps of Engineers stating that he needed to 
cease and desist. He eventually also received a notice from the 
Environmental Protection Agency stating that he had to do the 
same.
    After being spied upon by neighbors and local town 
officials both day and night, Mr. Pozsgai was eventually 
arrested in his place of business. He went through both civil 
and criminal proceedings consecutively, allowing no time for 
the punishment from the civil trial to take effect. He was 
fined $200,000--cleaned up 7,000 old tires and car parts and 
cleaned up this land which was an eyesore, he was fined 
$200,000 in the civil trial. A criminal trial ended in a 3-year 
prison sentence and an additional fine of $202,000.
    I fully understand the controversy surrounding Mr. 
Pozsgai's case. He did receive notices from the Federal 
Government, as well as the local government, asking him to stop 
filling his property. I guess they wanted the old tires back on 
there and the rusty old car parts.
    On the other hand, I strongly believe that Mr. Pozsgai's 
punishment did not fit the crime. I mean, cleaning up a 
junkyard and putting fill dirt in there and they put him in 
jail for 3 years and $402,000 in fines? It seems to me that the 
EPA and the Corps made an example out of Mr. Pozsgai.
    I would like to show you a brief video clip to give you a 
better idea of the Pozsgai story. So would you put that on, 
please?
    [Videotape played.]
    Mr. Burton. Let me just say that I have been in Congress 18 
years, and I believe that polluters should be punished. I 
believe that the environmental protection laws should be 
enforced. I think they should be revisited, especially in the 
area of the wetlands policy; but this is a travesty.
    I have never heard of anything like a man--1956, I stand 
corrected--a man who fought for his freedom against the 
Communists in Hungary, laid his life on the line because he 
didn't want to be controlled by a totalitarian Communist 
dictatorship, risked his life and everything he owned, which 
was taken away from him by the Communists, comes to the United 
States of America, the land of freedom and hope, and they put 
him in jail for cleaning up a dump and putting clean fill dirt 
in there. It is the most onerous penalty ever imposed for this 
kind of a crime by the Environmental Protection Agency and the 
Army Corps of Engineers and the Justice Department, and I think 
it is tragic, and whoever instigated this they ought to be 
punished for this overstepping what should be done.
    Obviously, if he broke the law and he didn't pay attention 
to the notifications, there should have been some kind of 
punishment, but, my God, 3 years in jail and $200,000 in civil 
damages and $202,000 in criminal damages, and 18 months in 
jail, that's ridiculous.
    What I find most striking is that no one, and I mean no 
one, truly cared about the condition of that piece of land, 
nobody--it was a dump--until Mr. Pozsgai took it upon himself 
to clean it up. He gathered up garbage that people had been 
dumping for decades and placed some clean fill on the property 
so he could build on it. Maybe he shouldn't have. I don't know. 
But this is just way out of line.
    Clean fill is generally defined as Earth, dirt, soil and 
bricks, but in the case of Mr. Pozsgai, the EPA and the Corps 
of Engineers defined this clean fill as a pollutant--I mean, 
what were those tires? What were all those rotten old car 
parts? And I used to live in a place where we saw that kind of 
stuff--as a pollutant that was contaminating a wetland.
    Unfortunately, there are countless other incidents similar 
to John Pozsgai's. All of these cases have two things in 
common: First, the land involved is basically dry or only 
marginally wet at most, making its characterization as a water 
of the United States highly suspect. Second, the pollutants 
allegedly being discharged into these waters of the United 
States and the activities for which a permit is normally 
required almost always do not pose even the remotest threats to 
water quality.
    Property rights advocates argue that cases like Mr. 
Pozsgai's come about as a result of Federal agencies seeking to 
protect wetlands which are of marginal ecological value. Many 
claim that this type of behavior is having a negative impact 
upon housing affordability and will eventually have a negative 
impact on our Nation's economy.
    It seems to me that we need to develop a wetlands policy 
that also takes into account the need for reasonable 
residential and commercial development.
    Another major problem with the Federal Government's current 
wetlands policy, which also touches upon a fundamental 
constitutional principle, is individual property rights. The 
fifth amendment to the Constitution clearly states that 
Americans shall not be deprived of life, liberty or property 
without due process of law. Nor shall private property be taken 
for public use without just compensation.
    I certainly agree that true wetlands should be protected 
from harm by the Federal Government, but the citizens who own 
that land ought to be compensated for their loss. I truly 
believe that the original intent of the Clean Water Act was to 
prevent real pollutants from flowing from one body to another.
    Over the years, however, Federal regulators have expanded 
and reinterpreted the act's open-ended terms to protect 
wetlands, a purpose for which the act was never intended. I 
believe that many reasonable people feel on both sides of the 
aisle that new thinking regarding our current wetlands policy 
must be considered. That's the purpose of today's hearing, and 
I look forward to hearing everyone's testimony.
    With that, I yield to my good friend, Mr. Kucinich.
    Mr. Kucinich. Thank you very much, Mr. Chairman, and thank 
you for holding this hearing on the important issue of wetlands 
protection.
    I want to welcome our witnesses and welcome the Pozsgai 
family to Washington, DC. I know that in watching this brief 
news clip and reading a little bit about your case, it is very 
depressing, and it is heartbreaking. I know that your 
appearance here today is a very emotional one for you, and I 
can assure you that this committee will deal with this very 
sensitively.
    If the issue is simply your experience, I suppose that the 
chairman certainly is capable of making a case that what 
happened to you is totally unjust, and I am sure that a review 
of that would convince many people of that.
    But what we are talking about here today, of course, as you 
understand, goes beyond your case and it involves policy toward 
all wetlands in the whole United States, not the fact that 
perhaps there was an abuse of power here. See, we don't know 
that but, when you watch, it is possible that could have 
happened. We don't know. But wetlands play an important role in 
purifying our water, in controlling floods and droughts, in 
providing habitat for migratory birds and threatened plants and 
animals; and, unfortunately, we have lost almost half of our 
wetlands and continue to lose them at an alarming rate. So 
that's why I can have compassion for what you have experienced 
and at the same time say that today we have to look at a 
broader policy, and I do have compassion for what your 
experience has been.
    Now, in my own State in Ohio, 88 to 90 percent of the 
wetlands that existed prior to settlement have been destroyed. 
The Great Black Swamp of northwestern Ohio, which once covered 
an area the size of the State of Connecticut, is virtually 
gone; and the inland and coastal marshes of Lake Erie have been 
reduced to less than 5 percent of their original expanse. Once, 
20 percent of the Ohio landscape was wetlands. Now, they 
comprise only 1.8 percent of it. Studies have ranked Ohio as 
having experienced the second greatest percent loss of wetlands 
of any State in the country.
    Now, the Corps of Engineers and the Ohio EPA have addressed 
this problem with a permitting policy that required no net loss 
of wetlands. However, the National Audubon Society Great Lakes 
Regional Office found that between 1990 and 1995 the Corps 
granted individual permits which resulted in an 18 percent 
loss. In fact, 44 percent of the permits that were granted were 
expected to result in a net loss.
    The study found that the no net loss policy was failing 
because, first of all, the Corps was not demanding adequate 
mitigation to conditions in the permits; second, the Corps did 
not require ``in-kind'' mitigation; and, third, the Corps and 
the EPA were apparently biased toward enhancing deep water 
wetlands that housed game species like fish and duck at the 
expense of shallow water wetlands that enhance water quality 
and provide habitat for reptiles, amphibians and food sources 
for birds; fourth, the Corps granted a large number of ``after-
the-fact'' permits; and, fifth, the Corps and the EPA were 
keeping poor records.
    Even if the Corps had demanded that developers replace each 
acre of wetlands they destroyed, a 1997 study by the Ohio EPA 
found that, ``from a functional perspective, mitigation 
projects are not yet measuring up to natural sites with respect 
to flood water retention, water quality improvement and habitat 
provision.''
    So I am looking forward to hearing from the Corps and the 
EPA about what has been done to address these problems.
    Now, Mr. Chairman, we will hear a lot of complaints about 
wetlands protections and their impact on private property 
rights. Some might argue that the government should reimburse 
landowners for the loss in property value caused by wetlands 
regulations, but also I think we have to ask what about the 
landowners that brought their land for a song because the buyer 
and the seller knew about the wetlands restrictions? Should the 
government reimburse these landowners?
    And we are not--and if we are going to look at private 
property rights, I don't think that we should ignore the 
private property acts of landowners who are negatively impacted 
by the loss of the wetlands. If the government allows the 
developer to fill in wetlands, removing an important natural 
flood control device, who will reimburse the neighboring 
landowners when their homes are flooded? What about the 
landowners that live, work and play near streams and lakes that 
become more polluted because the water no longer filters 
through the wetlands; and what about the public which is 
interested in protecting the environment, saving endangered 
species and protecting habitat for migratory birds? How do we 
reimburse them?
    Mr. Chairman, these are all important issues; and I look 
forward to hearing from the witness.
    I ask unanimous consent to hold the record open so members 
may submit speeches and additional materials.
    Again, I want to thank the Chair for holding this hearing. 
I know the Chair has concern about how Federal rules and 
regulations impact people. So do I. And I also know that the 
witnesses here today are reflecting on their own pain. We need 
to find out how that relates to the wetland policies of the 
United States of America. Thank you.
    Mr. Burton. Thank you, Mr. Kucinich.
    Ms. Chenoweth, who requested this hearing some time ago; 
and I want to apologize to her publicly for not moving on this 
more quickly, but we finally got around to it.
    Ms. Chenoweth-Hage.
    Mrs. Chenoweth-Hage. Chairman Burton, I am just so deeply 
grateful to you for holding this hearing today on fundamental 
issues that impact the very freedoms and rights of American 
citizens.
    You know, I have been acquainted with the Pozsgai family 
for a number of years. In fact, that is literally one of the 
major reasons why I ran for Congress. Because here was a case 
where a family cried out, with the press, the national press, 
all the way from the New York Times and the Washington Post and 
the San Francisco Examiner and major television networks, 
crying out for redress, for a redress of grievance for this 
heroic immigrant family, a family who didn't make much money 
but worked from the labor of their own hands, couldn't speak 
very good English but it was incumbent upon them to understand 
the plethora of rules and regulations that one could only 
acquire from studying the Code of Federal Regulations to 
understand them.
    Now, I agree that there is a need for wetlands, but 
wetlands that grow as a result of the lack of maintenance on 
the part of the city of Morrisville from cleaning up a drainage 
ditch? That's carrying the definition of wetlands too far.
    An immigrant family who, when told that they could, 
``mitigate the damage,'' it wasn't given to them in writing 
about what the terms might be or why and explained to them. 
They just said, ``well, if you give us several thousand dollars 
maybe we can mitigate this.'' Well, what did the government do 
in Hungary, in Communist Hungary? This was the very same kind 
of thing that John Pozsgai fled a Communist regime from. He 
didn't understand what mitigation was, and so he reported it.
    A lot of American citizens don't understand what mitigating 
terms is, especially when the government asks for several 
thousand dollars. So after reporting it, the full force of the 
Federal Government came down on John Pozsgai one horrible day 
when he was led away under arrest and his family didn't know 
where he was taken.
    Interestingly enough, they finally found a lawyer, they 
finally located their father, and they called the Marshals and 
said, can we get our dad out of jail? Vicky and Gloria. And 
they said, yes, that would be fine. You will have to post bond. 
Well, fine, we will get our attorney, and we will come down. 
They said, don't worry about your attorney. Just bring your 
checkbook. And so they did.
    At that point in time, after they wrote the check, they 
were informed, oh, by the way, we can't let your father go 
because we need to search your home for guns and weapons.
    Now, I ask you, Mr. Chairman, when in the course of 
liberty, when in the course of justice, can any force in the 
Federal Government ask for a search of a man's home without a 
search warrant, a warrant that ties guns to the crime in the 
home? It couldn't have happened, but they didn't understand the 
process, and so John Pozsgai sat in jail while the Federal 
agents came in and tore up the humble little Hungarian home 
looking for guns. Of course, they didn't find any guns. John 
Pozsgai had told them, I don't need a gun. I can go to the 
sheriff. He is just a few blocks away if I need help. But they 
didn't believe him. No, they had to prove who was boss in this 
case. After all, John Pozsgai reported that he thought the 
Federal Government was trying to bribe him when they said they 
were simply trying to mitigate the situation.
    Well, we understand mitigation, Mr. Chairman. We work in 
this business, but can a Hungarian man who barely speaks 
English and is functionally illiterate in terms of being able 
to read, comprehend and understand English at that time, clear 
back in the 1980's, understand what was going on? This is one 
of the most egregious cases that I have ever heard of in the 
course of my work in public policy and in the course of my work 
here in the Congress.
    Mr. Chairman, I brought this case to your attention not 
because my heart bleeds for this family and for what happened 
to them. They don't come from my district. They come from clear 
across the country from the district that I represent, but this 
is such an egregious case it had to reach the highest levels of 
Congress or else I just wasn't going to go home.
    So, Mr. Chairman, you have very well in your statement 
covered the circumstances involved, but the fact is that the 
harassment goes on and on and on. After Mr. Pozsgai has served 
his term, after he was on probation--and the last call I got 
from John Pozsgai before I came to Congress was this: He had 
just received a notice from the Department of Immigration and 
Naturalization, this freedom fighter, that he received notice 
that he was going to have to go back to Hungary, being deported 
to Hungary, because he was a convicted felon.
    Now, is that how America welcomes their immigrants? Is this 
what this Nation stands for, this Nation that was birthed in 
freedom and liberty? We welcome freedom fighters. We welcome 
good American citizens, but because of the full force of the 
Federal Government they put up a psychological sign that said, 
Hungarian immigrants aren't welcome unless they kowtow.
    Thank you, Mr. Chairman, for holding this hearing. I do 
want to say that I think that wetlands are important, but this 
was a drainage ditch that was constructed in 1934 by the city 
of Morrisville, whose water was blocked by 7,000 tires that had 
been illegally disposed in this dump.
    So we have a lot of work to do in terms of the whole 
wetland regulating authority, but, Mr. Chairman, never can this 
body turn a deaf ear to the tragedies like John Pozsgai.
    Again, I want to thank you for holding this hearing. I want 
to thank Nicole Petrosino and Chris Caron for their very good 
work and preparation.
    Mr. Burton. I want to thank you for bringing this to the 
attention of the committee.
    [The prepared statement of Hon. Helen Chenoweth-Hage 
follows:]

[GRAPHIC] [TIFF OMITTED] T2734.001

[GRAPHIC] [TIFF OMITTED] T2734.002

[GRAPHIC] [TIFF OMITTED] T2734.003

    Mr. Burton. With that, Mr. Allen, you are recognized.
    Mr. Allen. Thank you, Mr. Chairman.
    First, I would ask leave to submit a statement on behalf of 
Henry Waxman, the ranking member.
    Mr. Burton. Without objection.
    Mr. Allen. Mr. Chairman, thank you.
    [The prepared statement of Hon. Henry A. Waxman follows:]

    [GRAPHIC] [TIFF OMITTED] T2734.004
    
    [GRAPHIC] [TIFF OMITTED] T2734.005
    
    Mr. Allen. According to the New England Interstate Water 
Pollution Control Commission, the United States losses 100,000 
acres of wetlands every year; and I believe we need to act to 
reverse this alarming trend.
    I want to second the comments of Mr. Kucinich. I realize 
how difficult a situation this has been for the Pozsgai family 
and certainly for thousands and thousands of people all across 
this country who come in contact with this particular set of 
regulations. Some of those cases are more difficult than 
others, and some are worked out, and some are not.
    Wetlands collect and filter our drinking water. Our sources 
of clean drinking water are already imperiled by a number of 
different pollutants, including mercury. We need to be working 
together to protect sources of drinking water from a variety of 
pollutants, including mercury.
    Wetlands collect water that would otherwise flood nearby 
basements, and that's an issue in the Pozsgai case. Wetlands 
also protect our coastlines from flooding and storm damage. 
This is especially important in Coastal Maine, which I 
represent. Even more important to Maine is the economic value 
of wetlands. The fishing industry, which has been the backbone 
of the Maine economy for centuries, is dependent on coastal 
wetlands and estuaries for spawning grounds. Threats to coastal 
wetlands are a threat to the way of life of many of my 
constituents.
    Beyond the economic, health and environmental benefits that 
wetlands provide for us, freshwater and coastal wetlands also 
provide a vital habitat for a diverse group of species, some of 
which are endangered. I believe we have a responsibility to 
protect these species and our environment in a balanced and 
reasonable manner.
    Now, I realize that examples can be found of 
disproportionate responses to legitimate concerns on the part 
of the Federal Government. I am not here to excuse any 
wrongdoing on the part of the government in the course of 
executing the law, although I do question whether this is the 
appropriate forum to retry individual cases that have already 
been exhaustively adjudicated, and it is my understanding that 
this question involves more than simply filling in an area 
designated as a wetland but also involves an issue simply 
related to contempt of court.
    However egregious the circumstances of an individual case 
may have been, I cannot believe that one case study can be the 
rationale for overturning a largely successful environmental 
policy. Our responsibility to the environment is simply too 
great.
    I am proud of the work that the Bipartisan Oceans Caucus, 
which I co-chair, has been doing and will continue to do to 
focus attention on environmental issues related to the oceans. 
I look forward to working with colleagues on both sides of the 
aisle through the Oceans Caucus to study and hopefully resolve 
some of the problems that have contributed to the frightening 
decline of wetlands in this country.
    In closing, I just want to say that, as I look at the 
panels, as I listen to opening statements, I am disappointed 
that this hearing is the way that this committee will do 
environmental policy this year. Though there may indeed be some 
problems with Federal wetlands policy that need to be examined, 
I am not persuaded that the approach that is reflected in the 
choice of panelists is the way to go.
    I hope I am wrong about this. I hope I am wrong, but, given 
the nature of this hearing, I doubt that it is likely to 
improve our wetlands policies over the coming years.
    Thank you, Mr. Chairman.
    Mr. Burton. Mr. Gilman.
    Mr. Gilman. Thank you, Mr. Chairman.
    First, I would like to take this opportunity to thank 
Chairman Burton for bringing this important issue before the 
committee that's been a problem for so many of us throughout 
the Nation, and I would like to thank our panelists for 
providing our committee with their views on how Federal 
wetlands policy has impacted their lives and communities.
    We all know that wetlands are a vital link between water 
and land; and wetlands is a collective term for marshes, for 
swamps, bogs and similar areas found in generally flat, 
vegetated areas and depressions in our landscape and between 
dry land and water along the edges of streams, rivers, lakes 
and coastline; and wetlands can be found in nearly every county 
and climactic zone in the United States.
    Regrettably, there has been too much of an error in the 
mapping of wetlands and sometimes wetlands come in--maps of 
wetlands come in after the fact when someone has been building 
on that area.
    Wetlands do act as a buffer against flooding and a filter 
to purify streams and rivers throughout our Nation and serve as 
a breeding habitat to thousands of migratory birds and assist 
in providing clean drinking water to millions of Americans. 
However, protection of wetlands and the EPA's and Army Corps of 
Engineer's policies concerning the wetlands have been extremely 
controversial; and the bureaucratic morass is impacted by an 
imprecise definition of just what a wetland is.
    Mr. Chairman, I would like to enter into the record a copy 
of correspondence I have received from Mr. David Hawkins, a 
realtor from my district. He is concerned that the new 
permitting regulations are adversely affecting our region's 
economy, and he states that the most recent reduction and 
disturbance from one-third of an acre to one-tenth of an acre 
for a national permit has created a greater workload on the 
Army Corps of Engineers and applications for permits and 
wetland delineations have been seriously delayed because of the 
volume of the number of applications. The usual turnaround, he 
says, of some 30 to 60 days has become 90 to 120 days, causing 
an unnecessary added time period to such permit approvals.
    The economics of our area depend on a reasonable schedule 
for such permits, and he is asking us to seek to increase the 
staff available to handle the additional applications.
    [The information referred to follows:]

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    Mr. Gilman. But I am also disturbed about the gentlelady's 
case that she has recited for us, and to have the Pozsgai 
family here to indicate to us how there has been an abuse of 
the wetland regulations. I think that this is abominable, and I 
hope we can prevent this from happening in the future.
    We recite our concern for the Pozsgai--I hope I am 
pronouncing that right--the Pozsgai problems that he is 
involved with; and we want to apologize to him and his family 
for what he had to go through because of the bureaucratic abuse 
of wetland legislation.
    Accordingly, I am pleased that our committee will have this 
opportunity today to hear testimony from those whose lives have 
been drastically affected by wetland regulation. Their input 
can play an important role in any decisions that we may make 
with regard to wetland protection policy.
    So, Mr. Chairman, I again thank you for affording us this 
opportunity of expressing concerns about an important piece of 
legislation.
    [The prepared statement of Hon. Benjamin A. Gilman 
follows:]

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    Mr. Burton. Thank you, Chairman Gilman.
    Let me just say, before we go to Mr. Sanford, that this 
committee has oversight over the entire Federal Government, and 
wherever there is a waste or abuse of government powers, then 
we do have the responsibility, and this committee is the right 
vehicle to look into that.
    Mr. Sanford.
    Mr. Sanford. Thank you, Mr. Chairman.
    I would, first of all, thank you for raising this issue and 
holding this hearing.
    I would as well say to Ms. Chenoweth-Hage that, of sorts, 
she, too, has been a freedom fighter. She has consistently 
fought on this issue, and the Congress will be a poorer place 
in her absence because this is an issue that desperately needs 
to be addressed, and it is part of what makes me a 
conservative. I mean, I hear stories like the Pozsgai's story 
and you think about that, the strength of the Federal 
Government against a family like this, and it gives me real 
reservation about giving the Federal Government any additional 
power.
    In fact, I think there is a special irony to what is going 
on here in that, you know, the Federal Government is--has 
historically, in terms of a single entity, it is the largest 
entity in terms of draining of wetlands in this country, if you 
look back on a historical basis. So I think there is a real 
irony here.
    I would say that I have to respectfully disagree with my 
colleague from Maine on the need to hold this hearing and the 
need to hold it in this format. This issue has got to be 
addressed, and I say that as one who has a very strong 
environmental voting record. My colleagues on the Republican 
side basically call me a ``greeny,'' but I have come to a 
conclusion that when it relates to wetland policy we have got a 
real, real problem. Our policy in its present form is 
nonsensical; it is ridiculous. It is a bureaucratic morass, as 
Chairman Gilman just stated.
    Let me give you an example, just to get this idea across.
    In my home district, in South Carolina, unfortunately 200 
years ago there were slaves digging what they called dikes in 
areas of the coast of South Carolina. Those dikes are still 
there. They are old rice fields. And a constituent of mine was 
out there repairing one of these dikes, which is done on a 
fairly regular basis. They get checked afterward by the Corps; 
and the Corps person was there afterward checking the dike and 
looked at an area there along the edge of one of these dikes 
and said, you will have to fill this area in.
    He says, I don't understand. This is inside the dike. We 
just skinned it off by 6 inches, and we put this dirt on high 
land.
    And the Corps person said, yes, I acknowledge that. That 
dirt was put on high land, but this was a wetland area, and you 
disturbed the wetland area.
    The conversation ensued and permits ensued, but the bottom 
line was this: This person said, wait a minute, this doesn't 
make any sense to me. You are saying I have got to refill this 
wetland area in, but this is not really a wetland. We control 
the water level with dikes. We can set a one-way flap on this 
diked area such that we could grow pine trees in here if we 
wanted.
    He said, it doesn't matter. You have impacted it.
    So what they had to do was--they had filled it with 
freshwater. They let the freshwater out, which was all 
perfectly allowable. They refilled it with saltwater, which was 
all perfectly allowable. That killed off the freshwater 
vegetation. Then they were able to drain the pond back down 
again and refill it. The regulator said, that's perfectly fine. 
My constituent said, tell me how that makes any common sense at 
all. He says, it doesn't, but we are just going with the rules 
as they are now in place.
    That is nonsensical law, if you can see that kind of 360 on 
a patch of land basically drawn down by 6 inches. And I would 
say that if we are ever going to get common sense on 
environmental law--environmental law is there to protect 
ecosystems, and I think what we would all recognize is 
ecosystems are diverse by their very nature. So a wetland in 
the uplands of the West is very different than a wetland along 
the coastal plane of South Carolina.
    So I think this one-size-fits all has led to a lot of 
misinterpretation. Innocent people like my constituent in South 
Carolina or like the Pozsgai family are being caught as victims 
as a result of this morass, and I think it desperately needs to 
be addressed.
    Again, I would reinforce the idea that addressing it won't 
come as quickly as it would have with Ms. Chenoweth-Hage 
leaving the Congress, but it is something that I would beg of 
my colleague from Maine and from other colleagues here on the 
Hill to address because it needs to be changed.
    Mrs. Chenoweth-Hage [presiding]. Mrs. Biggert.
    Mrs. Biggert. Thank you, Madam Chairman. I would like to 
commend you for pursuing this type of hearing, and I would like 
to commend Chairman Burton for holding the hearing.
    I certainly understand the ecological significance of 
wetlands and their need for protection, but I also understand 
the rights of property owners. I would like to also disagree 
with my colleague from Maine. I don't believe that the 
testimony we are to hear today is an isolated incident, and 
this is an issue that very much needs to be addressed.
    During my first term in Congress, I have heard from a 
number of property owners in my district who feel that their 
rights have been violated because of our wetlands policy and 
the way that it has been implemented.
    In one instance, a small businessman was told he needed a 
permit to discharge anything into a nearby isolated pond. He 
didn't run a chemical company or anything like that. He ran a 
sportsmen's club and there was a remote chance that some shot 
from a shotgun might land in the water. And why did he need a 
permit in this isolated pond on his property? Because at one 
end of the pond there was a culvert that ran under a road to 
simply prevent it from flooding in high rains.
    Because of this culvert, the EPA and the Corps of Engineers 
in their wisdom declared the pond a United States waterway. 
Furthermore, it took EPA over 2 years to get him his permit.
    Another constituent was told he violated the Clean Water 
Act because he cleared brush from a ditch to ensure proper 
drainage of his farmland, and the EPA slapped him with a huge 
fine, and he no longer can farm the land.
    I understand the need for balance between protecting 
wetlands and property rights, but these stories and their 
frequency would seem to indicate that the scales are tipped in 
favor of the wetlands. I hope that those testifying today for 
the Army Corps and the EPA take these stories to heart. These 
are true stories about real people trying to live real lives, 
and I wish they were just stories somebody made up because that 
would mean that Federal and State agencies were appropriately 
balancing wetland protection with private property rights.
    It appears that that isn't the case yet, but I am hopeful 
those testifying today can help us move in the right direction. 
Thank you.
    Mrs. Chenoweth-Hage. Thank you very much.
    I do want to state very clearly that this committee has not 
been called to examine this case to retry it. The trial already 
occurred. What the committee is investigating is the ongoing 
harassment after Mr. Pozsgai has paid a tremendous price, and 
it is the ongoing harassment that this committee is looking 
into.
    So, with that, we will now welcome our first panel to the 
witness table. I am very pleased to welcome Paul Kamenar, Susan 
Dudley, Victoria Pozsgai-Khoury, Gloria Pozsgai-Heater and 
Kathleen Andria.
    I wonder if you would please stand and raise your arm to 
swear.
    [Witnesses sworn.]
    Mrs. Chenoweth-Hage. Mr. Kamenar, would you like to make an 
opening statement?

STATEMENTS OF PAUL KAMENAR, WASHINGTON LEGAL FOUNDATION; SUSAN 
  DUDLEY, MERCATUS CENTER; GLORIA POZSGAI-HEATER, DAUGHTER OF 
    JOHN POZSGAI; VICTORIA POZSGAI-KHOURY, DAUGHTER OF JOHN 
    POZSGAI; AND KATHLEEN ANDRIA, DIRECTOR, AMERICAN BOTTOM 
 CONSERVANCY, AND CHAIRMAN, ENVIRONMENT COMMITTEE FOR EAST ST. 
                LOUIS, COMMUNITY ACTION NETWORK

    Mr. Kamenar. Good morning, Madam Chairman and members of 
the committee. My name is Paul Kamenar. I am the senior 
executive counsel of the Washington Legal Foundation. Thank you 
for inviting us to testify here on the regulation of wetlands 
by the Corps of Engineers and the EPA and the application of 
the takings clause of the fifth amendment and the commerce 
clause to wetland regulation and the real world impact of 
wetland regulation on private property owners.
    Our foundation is a nonprofit public interest policy center 
here in Washington, DC, but we have members Nationwide who 
experience problems with the Corps of Engineers and the wetland 
regulation. We promote the free enterprise system, protect 
private property rights and oppose excessive government 
regulation. We also sponsor an economic freedom law clinic at 
George Mason University Law School where I also serve as 
clinical professor of law.
    Over the last 20 years, our foundation has litigated 
numerous wetlands and environmental cases; and we have 
represented property rights groups as well as individual 
owners, such as the Pozsgais in their appeal. Most recently, we 
filed a brief in the Supreme Court which will determine whether 
or not the Corps of Engineers has commerce clause jurisdiction 
over isolated wetlands.
    We are also representing another small business owner whose 
business was raided by 21 armed EPA agents. He was indicted on 
two felony counts. It was later discovered that the EPA had 
altered the logbooks to make it appear the water quality was a 
violation. The court threw out the charges, decried the EPA 
swat team tactics and said it was vexatious. That may be worth 
another hearing, by the way.
    Where does the Corps get authority to regulate wetlands? 
Congress under Section 404 gave the Corps authority to regulate 
the discharge of dredged or fill material into navigable 
waters. Nowhere did Congress give authority to the Corps to 
regulate wetlands as the Corps would have the public believe.
    In fact, we have a chart here. The Corps has a brochure 
called ``Recognizing Wetlands, An Informational Pamphlet,'' 
which states: ``Section 404 of the Clean Water Act requires 
that anyone interested in depositing dredged or fill material 
into waters of the United States, including wetlands,'' must 
receive authorization for such activities.
    Note how they have the phrase, ``including wetlands,'' to 
give the impression that Congress had that language in Section 
404. They try to emphasize that by even bolding that language 
and italicizing it. The fact of the matter is, that does not 
appear in the statute. This is all part of a regulatory action 
by the Corps defining what is and what is not a water of the 
United States.
    The Corps will try to claim they have jurisdiction here 
under United States v. Riverside Bayview Homes, but there the 
court only allowed them to regulate wetlands that are adjacent 
to open bodies of water.
    There is a serious commerce clause problem with the Corps 
regulating wetlands in people's backyards. There are court 
cases that have struck down such authority on the grounds that 
there was no connection to interstate commerce. You also have 
the regulatory takings implication of wetland regulations. In 
short, when the Corps tells you to leave your property in its 
natural state, they are essentially saying to you, we are 
depriving you of all economically viable use of your property. 
The Supreme Court has said that that constitutes a regulatory 
taking and just compensation is owed to the property owner.
    What the Corps does is turn the just compensation clause on 
its head. By requiring mitigation, they are telling the 
property owner you owe us, the government, money for you to 
reasonably use your property.
    It should be the other way around.
    Finally, this hearing deals with cases such as the 
Pozsgais. As I said, we represented them on appeal. One thing 
that's interesting about that case is that at the time, this 
essentially isolated wetland was subject to what was called 
Nationwide Permit 26, which means he was entitled to fill up to 
10 acres of the wetlands on this property. At this point, they 
claim he has filled 4 acres. He went to jail for 3 years for 
that. The way I read the law, he is entitled to fill up another 
6 acres of his land.
    In pure catch-22 fashion, the Corps was demanding that Mr. 
Pozsgai fill out a permit application, when the Corps's own 
regulations state that if you have a Nationwide Permit 26, you 
don't have to fill out the permit.
    This is not an isolated case. Ocie Mills and his son were 
sentenced to the Federal penitentiary for 21 months for putting 
19 loads of clean building sand on their property.
    Members of the committee, these are outrageous examples. I 
could go on and on. They are in my testimony. For these 
reasons, though, I think it is important that Congress and this 
committee continue to exercise its diligent oversight over the 
Corps and EPA to ensure that these public servants of the Corps 
and EPA are carrying out their duties in a responsible manner. 
Thank you.
    Mrs. Chenoweth-Hage. Thank you, Mr. Kamenar.
    [The prepared statement of Mr. Kamenar follows:]

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    Mrs. Chenoweth-Hage. The Chair now recognizes Ms. Susan 
Dudley from the Mercatus Center.
    Ms. Dudley. Well, we pronounce it Mercatus, even though I 
think the proper Latin pronunciation is Mercatus.
    Thank you for inviting me. I am Susan Dudley, and I am a 
senior research fellow and deputy director of the Regulatory 
Studies Program at the Mercatus Center. It is a research, 
education and outreach organization at George Mason University. 
My remarks today are my own.
    They are based on an analysis we submitted as part of our 
public interest comment project in 1998 to the Army Corps of 
Engineers on the Nationwide permit regulations.
    As Mr. Kamenar mentioned, Section 404 of the Clean Water 
Act prohibits the dredging or filling of navigable waters 
without an Army Corps of Engineers permit. However, over the 
last 25 years, the interpretation of navigable waters has 
evolved first to include wetlands adjacent to navigable waters 
and subsequently to include all wetlands. Under the current 
Federal Government definition, there are over 100 million acres 
of protected wetlands in the United States. Over 80 percent of 
these wetlands are on private property.
    The Corps has developed a system of Nationwide permits that 
allow certain activities in certain environments without time 
consuming case-by-case reviews. However, this last March, the 
Corps markedly reduced the availability of this streamlined 
program in favor of case-by-case approval of individual 
activities that affect more than one-half acre.
    Since approximately 90 percent of activities permitted 
under the Corps' Section 404 program have been authorized 
through the Nationwide permits, the shift toward more case-by-
case review poses not only serious challenges to small property 
owners but also to the Corps' ability to function efficiently.
    The Corps estimates that under its new regulations it will 
receive over 2,800 additional permit applications that will 
require case-by-case review each year.
    It predicts the new regulation will impose direct costs on 
the public of $34 million a year. The National Association of 
Counties predicts much higher public costs, on the order of 
$300 million per year. These estimates of direct costs do not 
include the costs of increasing the already long delays 
Americans face when applying for permits, nor the possibility 
that taxpayers will be asked to pay for larger staff to manage 
the increased workload.
    What environmental gain can Americans expect to get from 
these more burdensome procedures? The Corps has not quantified 
that, but according to researchers, voluntary, incentive-based 
programs, including those of the Fish and Wildlife Service, and 
the Department of Agriculture, as well as States and 
conservation groups, have been far more effective than the 
Corps' regulatory program at stemming the loss of wetlands 
since the mid-1980's. Indeed, reviews of Federal data suggest 
that not only has the U.S. achieved the goal of no net loss of 
wetlands, but it would be achieving that goal even without the 
Section 404 program. In other words, if funds used to run the 
Corps of Engineers regulatory program were diverted to 
voluntary incentive programs, the rate of wetland gains would 
likely be even greater.
    The ineffectiveness of the Corps' program compared to 
incentive-based programs is due to simple economics. Land use 
restrictions reduce private incentives to protect wetlands. 
Filled land may sometimes be more valuable to the owners than 
wetland, even if the social value of the wetland is 
significant. The current program aggravates this underlying 
problem by reducing the private value of wetlands to 
landowners. Land use restrictions provide no incentives to 
property owners to devise creative solutions to manage and 
protect wetland resources. Instead private owners are pitted 
against Corps' permit writers because the nature of land use 
restrictions creates an inherent conflict. In contrast, 
incentive-based programs foster cooperation by allowing a 
property owner to reap the benefits of wetlands preservation.
    Chairman Burton and Mr. Kamenar mentioned the takings 
clause of the Constitution. This requirement recognizes not 
only that a tradeoff sometimes exists between social values and 
private values as in the case of wetlands, but also the 
importance of the compensation mechanism in aligning private 
and public incentives. The Corps of Engineers has an important 
mission, but it would do well to learn from the insights of our 
forefathers and the success of existing incentive-based 
programs.
    The Section 404 program is characterized by burdensome 
review processes, lengthy delays, and enforcement actions that 
often appear incommensurate with the violation. Private 
landowners are denied the use of their land without 
compensation and without fair consideration of the net social 
effects, both costs and benefits of use restrictions. Rather 
than centralizing control over privately owned, local 
resources, the Corps should endeavor to enhance private 
incentives to manage wetlands and leave the resolution of 
specific intrastate issues to State and local authorities. 
Thank you.
    Mrs. Chenoweth-Hage [presiding]. Thank you, Ms. Dudley.
    [The prepared statement of Ms. Dudley follows:]

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    Mrs. Chenoweth-Hage. The Chair recognizes Ms. Pozsgai-
Khoury.
    Ms. Pozsgai-Khoury. Madam Chairman, members of the 
committee, I am honored and appreciate this opportunity to 
appear before this committee today. My name is Victoria 
Pozsgai-Khoury. I am the daughter of John Pozsgai of 
Morrisville, PA. I will speak briefly on his background and the 
history of his case. Additionally, I will explain the 
absolutely devastating effects that impersonal and bureaucratic 
agencies like the Army Corps of Engineers and the Environmental 
Protection Agency have had upon families and communities.
    First, you should understand why I am speaking to the 
committee today instead of my father. My father is a first-
generation immigrant to this country. He can communicate 
adequately in English, but it is sometimes broken and sometimes 
results in a misunderstanding in both meaning and intent.
    Members of the committee, my father was born in prewar 
Hungary. As a small child, he witnessed horrendous actions of a 
truly tyrannical government. Each day he witnessed the Nazis 
corralling the Jews and other dissidents into gated cattle cars 
across the street from his home. These were his formative 
memories. Later in his life he was forcibly conscripted to 
serve the Soviet Army as a mechanic. All he ever wished to do 
was to raise his family and live a humble life; however, this 
was not to be because of the Hungarian Revolution. At the time 
my father was told he would be forcibly reintegrated into the 
Soviet Army. He could not morally consent to fighting his 
fellow countrymen, so he fled to freedom in America.
    My father raised our family with the belief that America 
was not just a good country, but a great Nation. Members of the 
committee, Mr. Chairman, this country was good to my father. 
Nowhere else in the world would he have been able to arrive 
with nothing, buy a piece of property, and build a truck repair 
business. For this, both he and my family are incredibly 
thankful.
    However, this was not to be accomplished without literal 
sweat and blood. He took no vacations or breaks over the course 
of 40 years, none. He had no relatives to help him build his 
business, and his immediate family lived in a town where the 
word ``immigrant'' was literally an epithet.
    On January 15, 1964, my father would realize the proudest 
day of his life when he became a naturalized American citizen. 
My parents continued to struggle for over 40 years, but they 
were ultimately successful in building a solid truck repair 
business. This is John Pozsgai, my father.
    Both my sister and myself have vivid memories of playing in 
the illegal dump located across the street when we were 
children. It is a 14-acre plot of land that has been filled 
with assorted junk such as cars, steel remnants, fill, and 
tires, thousands of tires. Not surprisingly, a tire store was 
located next to our dump. The dump contained a stormwater 
drainage ditch system. This ditch was filled with old tires. 
Our road and basement were flooded every single year for 
approximately 20 years because of these old tires, and since we 
removed them, it has never been flooded for the past decade.
    In 1986, my father signed an agreement of sale. He wanted 
to build a 12,500-square-foot building that would expand his 
truck repair business and enhance the community. He removed 
well over 5,000 tires from our dump, approximately 1,000 tires 
of which were in the drainage ditch. Then, within months of 
acquiring the property, notices were sent to my father from the 
Army Corps of Engineers informing him of the presence of 
wetland. These supposed wetlands stem from a stream that was 
connected to navigable waters of the United States.
    Mr. Chairman, members of the committee, a stream never, 
never ran through our property. From the beginning, it was a 
stormwater drainage ditch that was installed by the township of 
Morrisville in 1936. We repeatedly told this to the Army Corps 
of Engineers, yet they never believed us. Just this past year, 
the township of Morrisville has finally recognized the 
responsibility for the upkeep of this stormwater drainage 
ditch.
    Mr. Chairman, members of the committee, my father is the 
type of man who will tell you straight to your face whether he 
likes you or not. When people came to our property to trespass 
on it, he told them in no uncertain terms to leave. He believed 
that America was still a country where a man's property was his 
own, and that the government needed a warrant before attempting 
to collect evidence to use against any citizen.
    Please remember his background. He came to this country to 
escape governmental tyranny over his family's life. When my 
father started receiving notices, he did not fully understand 
some of them. Some of the notices were forwarded to our prior 
lawyer who never told us about them, many of them actually 
referred to a completely different piece of property with 
another tax parcel number, and a few my father flat out ignored 
because he was totally convinced that there was a mix-up 
between the properties being cited.
    Remember, this was an illegal dump for approximately 30 
years. People had deposited fill, cars and tires all over it. 
He had never in his wildest imagination thought he would ever 
be thrown into jail for adding clean fill to this dump.
    In 1987, my father was informed by the Army Corps of 
Engineers that he was being sued to restore the property to its 
previous condition. It is important that you understand that 
the Army Corps wanted him to reestablish the damming effect 
that approximately 1,000 tires in a stormwater drainage ditch 
had. In effect, they were telling him to redam his property 
that had been an illegal dump for over 30 years.
    When he was told by the Army Corps that he needed a permit 
to build his truck repair shop, he obtained a water quality 
permit from the Pennsylvania Department of Environmental 
Resources. He thought, we thought, that he had gotten the right 
permit. He thought everything was OK, because he was told by 
the Department of Environmental Resources that this dump was 
not on the national wetlands inventory.
    Mr. Chairman, members of the committee, at every point 
along the way, my father kept asking, how can we make this 
work? When he was told by the Army Corps of Engineers he must 
do mitigation to build on his property, he thought he was being 
asked for a bribe. He went to the FBI to report it. He never 
fully understood what he was accused of doing wrong, yet the 
Army Corps sued him. Concurrently, the Army Corps referred his 
case to the Environmental Protection Agency, who then referred 
it to the Department of Justice for criminal prosecution. At 
the same time he was being sued by the Army Corps, he was 
continually being asked to add more information to process his 
permit. This was our catch-22.
    The effect this had upon my family is absolutely 
devastating. In the end, my father was imprisoned for a year 
and a half. He lived in a halfway house for a year and a half 
and was given 5 years supervised probation. At the time we lost 
my father, he was the sole support of my family for over 30 
years. My family was forced to declare bankruptcy because our 
family was unable to pay the property tax on our dump. 
Subsequently, the judge lowered his fine to $5,000. I lost my 
job as a journalist after my editor explained to me that my 
father's name was too visible for the news. But then the thing 
that hurt the most was scheduling my own wedding between trials 
and appeals.
    I sincerely wonder if the EPA has ever considered 
investigating the Army Corps for the countless acres of 
wetlands they regularly destroy in their projects. Now, that 
would be an interesting exercise, to say the least.
    While my father was still in prison, the Army Corps ordered 
a restoration of our newly acquired property. They wanted to 
restore it to wetlands.
    Now, in the process of restoring our property, they 
excavated 10 acres, moving 400 truckloads of fill from one side 
of the property to other. They dug a hole and said it would 
turn into a wetlands pond. Ten years later the hole is a hole, 
it is not a pond.
    Mr. Chairman, members of the committee, this harassment has 
simply gone too far. Our family has been bankrupted. My father 
lost the use of his property without ever being compensated. 
Worst of all, my father literally lost 3 years of his life, and 
we lost our father. This occurred even though the Solicitor 
General of the United States admitted that the evidence the 
government had jurisdiction on the Pozsgai property was 
admittedly thin.
    So Mr. Chairman, members of the committee, many of you may 
be wondering what can be done. In my written testimony, I 
propose a five-tiered solution that I would ask you to study 
carefully. I promise you, it makes much more sense than the 
rules that we are living under now.
    In conclusion, I still believe America is a great Nation. I 
am firmly convinced that in no other Nation would two simple 
daughters of a Hungarian immigrant be allowed to honor this 
full committee of its governing body. However, I am not sure my 
father feels the same way. He is a man who believed enough in 
this country to seek citizenship. Now he is a convicted felon, 
and he still does not understand why he was ever charged.
    Mr. Chairman, members of the committee, I thank you so very 
much.
    Mr. Burton [presiding]. Thank you very much. That is a 
heart-rending story. I would like to have those five 
recommendations that you make, and we will take a close look at 
all of those.
    [The prepared statement of Ms. Pozsgai-Khoury follows:]

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    Mr. Burton. Gloria Pozsgai-Heater.
    Ms. Pozsgai-Heater. I come before you today to testify on 
behalf of my father, John Pozsgai. My sister testified on my 
father's background and the effect his case had upon our 
family. Today I would like to speak to you about the ongoing 
problems that we are still experiencing with respect to the 
U.S. Army Corps of Engineers.
    Mr. Chairman, members of the committee, my father has 
suffered. He is now an old man, a Hungarian immigrant who fled 
his country to find freedom. And what has he found? Persecution 
by any other name, bureaucracy.
    Mr. Chairman, you would think that after sending my father 
to jail, fining him, bankrupting our family and devastating our 
lives, that the government had gotten all that they wanted. 
However, after the restoration of my father's property, both my 
father and his lawyers had believed he had fully complied with 
the requirements of the law with respect to the court order. 
Then my father received a letter from the Army Corps dated 
November 24, 1999, 8 years after the restoration had been 
completed and his jail termed had finished. The Army Corps' 
letter accused him of new violations of Section 301 of the 
Clean Water Act.
    In my father's response to this letter, he requested to 
know the origin of the new complaint. The Army Corps never 
responded to this letter. Instead they demanded that they come 
back to inspect my father's property on January 3, 2000. The 
representative of the Army Corps maintained that the inspection 
resulted merely from a routine overflight of my father's 
property. Furthermore, during that inspection, the 
representative of the Army Corps was unable to fully match his 
maps to my father's property. And at the cessation of the 
inspection, the Army Corps representative stated that he could 
see no new violation.
    Contrary to what we had been told, this was not the case. 
Four months later, my father received a letter from the Army 
Corps dated May 5, 2000. The letter then accused my father of 
not complying with the Federal court order from the civil trial 
in 1988. It further accused him of new violations of a cease 
and desist letter the Army Corps had issued previously.
    Mr. Chairman, members of the committee, my father and our 
family have been put through the ringer over this dump. The 
only thing we ever wanted to do was improve and clean up this 
30-year-old dump. We simply cannot understand why the Army 
Corps is so stubborn in continuing to prevent us from building 
on our land. My father has done absolutely nothing, nothing to 
this land, since the court order. Now we have heard that the 
Army Corps has again referred material to the Department of 
Justice. When will this end?
    Mr. Chairman and members of the committee, I am incredibly 
grateful to be able to testify in front of you today. My father 
and my family have suffered through this bureaucratic nightmare 
long enough. We need your help. The property owners of America 
need your help. All I ask is that you listen impartially to the 
testimony today. I am convinced that you will see the truth. 
Thank you, Mr. Chairman.
    Mr. Burton. Thank you.
    [The prepared statement of Ms. Pozsgai-Heater follows:]

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    Mr. Burton. Ms. Andria.
    Ms. Andria. Mr. Chairman and members of the committee, 
through some incredible fluke, we are on the same panel. My 
grandfather is also from Hungary, and my grandfather, the other 
grandfather, was a Macedonian freedom fighter.
    My name is Kathy Andria. I am a director of the American 
Bottom Conservancy, which is a not-for-profit conservation 
group in East Saint Louis, IL, the area across the river from 
St. Louis. I am also a board member and chair of the 
Environment Committee of the East Saint Louis Community Action 
Network, a coalition of 26 neighborhood organizations and 
community groups working for the betterment of the city of East 
Saint Louis. I thank you for your invitation to testify here 
today on the Corps' wetland policy.
    The American Bottom is the southwestern Illinois floodplain 
of the Mississippi River. It is called Bottom because it was 
the bottom of the river. Levees and floodwalls allowed the 
development of cities and towns, which share the Bottom with 
farmland, but it remains a floodplain, and as such we flood.
    There are 150,000 to 200,000 people living in the American 
Bottom. It is mostly an inconvenience to farmers when their 
land floods, but not so for communities. When the river is 
high, our groundwater is high. The river's tributaries, our 
streams, creeks and ditches, they are high and overflow their 
banks.
    The American Bottom is a wonderfully diverse area. It is 
home to the United Nations World Heritage Cahokia Mounds. It is 
also the horseradish capital of the world. There are soybean 
and cornfields adjacent to steel mills, oil refineries and 
smelters. It is home to Site No. 1 of the Lewis and Clark 
Trail. It has a marvelous view of the confluence of the 
Mississippi and Missouri Rivers. We have the world's longest 
pedestrian bridge, which crosses the Mississippi River. 
Unfortunately, the Illinois entrance to that bridge is from a 
landfill which was allowed to develop and expand in the 
floodplain, in islands on a wetland in the middle of the 
Mississippi River.
    The American Bottom was declared a Presidential disaster 
area for flooding in 1993, 1994, 1995, and 1996, 4 straight 
years. Some eight communities in the Bottom have already been 
bought out by FEMA, and there are a number of others which 
should be bought out, including neighborhoods in the city of 
East Saint Louis, much of which, like the rest of the cities in 
the Bottom, were built in and around wetlands.
    I have a map over here that shows. This is the city of East 
Saint Louis. The blue on the left is the Mississippi River. 
Everything in blue that you see is the wetlands and flood 
hazard areas. Everything in red there are areas that reported 
that flood.
    After all of the flooding, development in our area 
continues in the Bottom and on the bluffs. The bluffs send 
their stormwater pouring down into the Bottom. The American 
Bottom has recently been discovered by developers who have run 
out of areas within reasonable commuting distance west of St. 
Louis and have turned their attention to the Illinois side of 
the river. They have targeted prime farmland; wetlands, which 
are considered cheap swamp land; and anything and everything in 
sight. Our cities, towns and villages are eager to grow, but 
most have no comprehensive plans as to how to grow, and no real 
understanding of where not to grow. Developers look for the 
cheapest land available to them. Unfortunately, it is often the 
swampland, valued wetlands that help keep us from flooding.
    In your memorandum to this hearing, you say that wetlands 
act as a buffer against flooding. Actually they are like 
sponges, holding the water and then releasing it. They get the 
stormwater, and then they slowly release it, and this can help 
keep the adjacent areas from flooding. One acre of wetlands can 
hold up to half a million gallons of water. If you take that 
wetland away, you lose that flood control function. If you fill 
it in and then pave it over, which is what the developers 
usually do, you have created millions more gallons of water 
that will run to the adjacent community or to neighboring 
homes. If you put that sponge elsewhere, which is what the 
Corps calls mitigation, when the stormwater pours onto the 
original site, the sponge is no longer there to absorb that 
water. Then you have flooding. Added to that problem is the 
extra stormwater runoff from development on the bluffs that 
comes running down into the Bottom.
    Our cities and villages are old. Our sewers are combined--
many of them--that combine sanitary/storm sewers. When the 
river and groundwater levels fall and rise, our sewers 
frequently break, and when stormwater and floodwaters inundate 
the combined sewers, our families and their children are 
subjected to raw sewage. Yet the State and the Federal 
Government give tax incentives and economic assistance to 
developers to develop in the floodplain, and the Corps of 
Engineers issues permits for them to develop in wetlands.
    I used to think of wetlands as just marvelous places where 
one could see egrets and herons. Being on the Mississippi 
River, we are on the flyway, and we frequently see great 
numbers of herons and egrets, the migratory waterfowl. But in 
1993, and I am sure you all remember that was the year of our 
big flood, I learned the role that wetlands play in flood 
control, and I have since been active as a wetland watchdog.
    I understand many of you think that the Corps is too 
restrictive in its issuance of wetland development permits. 
Perhaps that is so in other parts of the country. I can only 
speak about the St. Louis district. In the last 10 years, the 
Corps has issued tens of thousands of permits to develop 
wetlands. It has denied fewer than five. A 102-acre landfill 
was allowed to expand on the island in the Mississippi River 
after it had been flooded and the residents were forced to 
leave through a FEMA buyout. Another 176-acre landfill was 
permitted to expand in the bed of a creek just outside of East 
Saint Louis. I also have a picture of that. A giant warehouse 
complex was permitted to be developed in 2,500 acres of 
wetlands. This shows the landfill, and it shows the creek, and 
this is--they are even applying for another expansion now. A 
giant warehouse was permitted to be developed in 2,500----
    Mr. Burton. Excuse me just 1 minute. We have a vote on the 
floor, and we have about 7 minutes until the vote. Could you 
summarize in the next 2 minutes so we can make the vote?
    Ms. Andria. I sure will. Thank you.
    Just last year, an automobile racetrack was originally 
built in wetlands nicknamed the Swamp. It has since expanded; 
applied to the Corps to build parking lots for 20,000 cars in 
the wetlands. It is right next to other communities that flood. 
This was the third permit application to the Corps, and this is 
what we call piecemealing. As we sit here today, they are 
getting another permit to expand for an access road.
    The map--I did the map--the children walking home from 
schools are subjected to raw sewage. Two schools that were 
built in East Saint Louis in wetlands are now closed.
    You asked, should the Corps be less restrictive and allow 
more development in the wetlands? The answer is a resounding 
no. In your efforts to cut Federal Government, many badly 
needed programs that need funding don't have the money to 
operate. Enforcement of violations of the Clean Water Act is 
one, and in St. Louis the enforcement section has been combined 
with the permit reviewer section, and the permit reviewers are 
told to work on permits, and they have no time for enforcement. 
But this is a false savings, because the resulting flooding is 
going to cause millions of more dollars of disaster relief.
    Dobrey Slough is another one, and I would ask you to read 
what I write about Dobrey Slough. These are residents who have 
been permitted to--have to live in this floodplain, and the 
developers are allowed to come back over and over and over 
again and develop. It is a slough, it is a wetlands. It should 
never have been developed. These people have lost their homes; 
their foundations are cracking. There are many people who are 
having nervous breakdowns over it.
    Will the Corps allow more development? History tells us 
they will. I urge you, for all of the people who are being 
subjected to this, if you do anything, tighten the rules; make 
sure that the laws protecting our wetlands, our sponges are 
enforced; and please, help to close the Tulloch loophole that 
allows wetlands to be developed.
    There are other ideas that I am sure you have. The Wetlands 
Reserve Program needs to be expanded and fully funded. 
Enforcing and tightening the current laws could save billions 
of dollars in the long run. The cost to taxpayers and our 
psyche as a Nation is too high to allow homeowners to lose 
their homes and to allow children to be exposed to raw sewage. 
Yes, there is a need for government reform with the Corps' 
wetlands policy, but it should be more restrictive, not less, 
and it should be enforced for everyone.
    Thank you for the opportunity to speak with you today.
    Mr. Burton. Thank you, Ms. Andria.
    [The prepared statement of Ms. Andria follows:]

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    Mr. Burton. We will recess for the vote. We should be back 
here in about 10 or 12 minutes.
    [Recess.]
    Mr. Burton. The committee will come to order.
    Let me start, and I will try to restrict my questions to 5 
minutes, and then I will yield to the gentlewoman from Idaho.
    Mr. Kamenar.
    Mr. Kamenar. By the way, I am also Hungarian. Both sides of 
my grandparents came from Hungary, so we have a whole Hungarian 
panel.
    Mr. Burton. I am Heinz. I come in 57 varieties, and I am 
from all over the place.
    Which Federal Government agency is the final authority on 
wetlands policy; do you know?
    Mr. Kamenar. Well, I think that may be the Environmental 
Protection Agency in the sense that under Section 1344, they 
have--Section 404 is 33 U.S.C. 1344--they have veto authority 
over permits that are granted by the Corps of Engineers. It is 
a very rarely used veto authority. They have a memorandum of 
understanding in terms of sort of cojurisdiction, their 
definitions of wetlands are essentially the same, and so forth. 
They have just recently changed the definition of pollutants, 
because the EPA had this definition dealing with discharging 
out of a pipe into the water under Section 402, and the Corps 
has a definition of pollutants where you need a permit under 
Section 404.
    The irony is--and I am glad you asked this question--that 
in the Pozsgai case, the U.S. attorney first charged Mr. 
Pozsgai for not having a Section 402 permit, which is what 
factories have when they put their pipes directly into the 
water.
    Mr. Burton. If you could just get back a little bit further 
from the mic. You sound a little like Elmer Gantry.
    Mr. Kamenar. Sorry about that.
    I am just saying that EPA has the authority over--veto 
authority, but it is basically administered by the Corps of 
Engineers, and I am sure the Corps can speak to that.
    Mr. Burton. Why does there seem to be such a lack of 
consultation between government agencies over how to define a 
wetland and how to pursue a consistent and sensible wetlands 
policy?
    Mr. Kamenar. Well, you do have a number of government 
agencies that do have overlapping jurisdiction. They do not 
seem to be reading from the same sheet of music in terms of 
what is a wetland. There is this 1987 Wetland Delineation 
Manual that presumably is the one that everyone is supposedly 
following. By the way, it is very hard to find that manual on 
the Corps of Engineers' Web site. They supposedly want to be 
user-friendly and let the regulated community know what is 
going on. I have searched in vain for several hours trying to 
find that, and it is actually on the Web site, I believe, down 
at the Corps in Vicksburg, MS. So there is this problem of 
trying to get together.
    Mr. Burton. Let me just ask you about the Pozsgai case. 
Have you looked into that in any detail?
    Mr. Kamenar. Well, we represented Mr. Pozsgai on the appeal 
in that case. I was not the trial attorney, but I did----
    Mr. Burton. But you are very familiar with all of the 
aspects of it?
    Mr. Kamenar. It has been a few years, but I am fairly 
familiar with it.
    Mr. Burton. Well, I would just like to have from your legal 
perspective your view on how he was treated. It appears to me, 
and I think most members of the committee, even though we are 
very concerned about ecological problems and wetlands, that the 
agencies involved, including the Justice Department, went clear 
overboard in meting out punishment to this family and to this 
gentleman. Can you give us your legal opinion on that?
    Mr. Kamenar. Yes. It was clearly a case of overkill. It was 
using a sledgehammer to kill a gnat. The Corps, I think, felt 
that they had an easy target, that the EPA felt that they had 
an easy target, that here is what they claim to be a wetland. 
They sent out a cease and desist letter. I use that word 
``letter,'' I underline that, because they are supposed to send 
out cease and desist orders, formal orders, which they never 
did in this case.
    It was always kind of weird how this case was handled. He 
was eligible for a Nationwide Permit No. 26, because this so-
called wetland was above the headwaters, which is a technical 
term meaning that the flow of the drainage ditch was less than 
5 cubic feet per second, which means that he could fill 1 acre 
right off the bat without even submitting any prenotification. 
So it just seemed that they felt that he was defiant, and they 
were going to make an example out of him, and they certainly 
did.
    Again, this is not an isolated case. I mentioned the Ocie 
Mills case.
    Mr. Burton. I understand.
    Let me just say, it seems to me that the government went 
overboard as well. Even though we are concerned about 
preserving wetland, and we understand from the gentlewoman from 
East Saint Louis the problems that can occur, there is no 
question, no question, that we should not be building those 
areas, and we should make sure that wetlands are protected.
    Mr. Kamenar. Absolutely, right.
    Mr. Burton. But in this particular case where it was a 
drainage ditch that was plugged up by spare tires, and he was 
penalized so severely, is there any case for restitution from 
the agencies involved or for some recourse for this family?
    Mr. Kamenar. No, there isn't in that regard. There still is 
the possibility that he can seek compensation under the takings 
clause, if, in fact, as it appears to be, he is denied all 
economically viable use of his property, or a good chunk of it.
    Part of the problem is when you go back to the Corps for 
what they call after-the-fact permits, they do allow that in 
some cases, but in other cases they won't allow you to do it 
unless you restore the property. So you have this anomaly of 
saying, OK, you restore the property, then we will look at your 
permit, and then you can put the fill back in again. I mean, it 
seems like it doesn't make much sense in that regard.
    So there doesn't seem to be much recourse unless the Corps 
is willing to sit down now and take a hard look at this and 
say, here is what you can do with your property. You can build 
your garage here, you can do something over here, but it looks 
like from--and, again, I haven't been the recent counsel; the 
local counsel is here who has been handling some of the recent 
correspondence. I don't know exactly where legally it stands.
    Mr. Burton. OK. My time has expired.
    I would just like to know one last thing. Are there a lot 
of cases like this where the agencies involved have gone too 
far?
    Mr. Kamenar. Oh, it is absolutely clear that the agencies 
have gone too far. I mentioned a couple in my testimony.
    Mr. Burton. You don't need to get into details.
    What I would like to have as chairman of the committee, I 
would like to have as many examples as you can give, not where 
there are legitimate problems like the gentlewoman from East 
Saint Louis talked about, but where there has been overstepping 
of the bounds of reasonableness by the EPA and the Corps of 
Engineers. If we have those, maybe we will have a series of 
hearings and bring them in and just go through these one by 
one, so that maybe we can come up with some more sensible 
approaches of dealing with the problems of preserving our 
wetlands, but at the same time not going overboard and beating 
people to death when it is not necessary.
    Mr. Kamenar. Sure, absolutely.
    Mr. Burton. Mr. Kucinich.
    Mr. Kucinich. Thank you, Mr. Chairman.
    Again, thanks to the witnesses.
    Ms. Andria, I left to vote before I heard all of your 
testimony, but I did have the chance to read it prior to you 
delivering it.
    Now, in your testimony about your concern about developers, 
you testified that developers can avoid the intent of wetlands 
protection by applying for permits in a piecemeal fashion. What 
do you mean?
    Ms. Andria. The one instance that--I mean, there are many 
instances, but for time's sake, I will cite one, the Gateway 
Raceway. It was a little racetrack, drag strip, called the 
Swamp. A developer came in from California, wanted to expand 
it, asked for one-third of an acre. This was, I think, in 1997. 
He came back the following year and asked for 40 acres. He came 
the next year, and this was the one asking for the emergency 
access permit, which didn't go to public inspection, and so I 
am not sure what--how many acres was asked for then, and then 
he asked for 11.5 to put the 20,000 cars in for parking lots. 
This last one, he has asked to widen the road that goes through 
the wetland into a four-lane superhighway. So that is one 
example of piecemealing.
    Mr. Kucinich. So you are talking about the Gateway 
Racetrack expansion?
    Ms. Andria. That is the Gateway Racetrack expansion.
    Mr. Kucinich. Is it your sense, after looking at that case, 
that the person who was the applicant may have misled the 
government?
    Ms. Andria. Absolutely, because the man was an experienced 
racetrack developer in California at Long Beach, and, I mean, 
surely when he bought the land, he knew he wanted to expand it 
to 150,000 seats, he surely knew that he was going to need a 
parking lot. He bought the land because it was cheap. He could 
have gone and should have gone up into the highlands and not 
developed right there. He knew there was flooding.
    Mr. Kucinich. Thank you.
    Mr. Chairman, I actually have a letter here from the EPA to 
the Corps in this Gateway case, which, in part, states, ``We 
feel that Gateway may have deliberately misled your district on 
its intent for this road, and we do not look favorably upon 
this duplicity. However, if there is an absolute need for this 
roadway expansion, it would result in only 0.51 acres of 
wetland impact.''
    I would like to submit this, if I may.
    Mr. Burton. Without objection.
    [The information referred to follows:]

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    Mr. Kucinich. Also, to Ms. Andria--thank you, Mr. Chairman.
    Do you believe that wetlands policy is not just about the 
property rights of the landowner once they develop the land, 
but it is also about the property rights of landowners that 
would be harmed by a loss of wetlands?
    Ms. Andria. Chairman Burton said something about marginal 
wetlands, and that is one thing that I don't think that is ever 
properly addressed. I mean, there is little pockets of wetlands 
that sometimes might seem marginal, but if you live in an area 
like East Saint Louis and the area there that is full of steel 
mills, full of abandoned territory, if you can drive by and see 
egrets, that is really wonderful. But the whole issue of the 
impact on neighbors is so important. It has to be respected, 
what you do to your neighbors, and what your impact is on your 
land. I understand people who want to do that, but when it 
affects the surrounding territory, that absolutely should not 
be permitted.
    Mr. Kucinich. In a number of instances, the Corps and the 
EPA allowed developers to fill a wetland if they create or 
enhance a wetland elsewhere. In fact, mitigation banking, where 
developers buy part of a site that will become wetlands in 
order to qualify for a permit, is becoming increasingly 
popular.
    I am concerned that the policy could create problems 
because the newly created wetlands may not provide the flood 
and water quality protections to the same people that are 
impacted by the proposed development.
    Do you share concerns like that?
    Ms. Andria. The thing about--I mean, you lose the water 
quality. Some of the areas in the Bottom get their water from 
the Mississippi. There are others on the bluffs that use the 
aquifer, and that is contaminating. There are different areas 
that need concern, and it is hard to address them in just these 
few minutes.
    Mr. Kucinich. Well, I think you have probably covered that.
    Thank you, Mr. Chairman.
    Mr. Burton. Thank you, Mr. Kucinich.
    Mrs. Chenoweth.
    Mrs. Chenoweth-Hage. Mr. Kamenar, I want to, in my 
questions with you--and I can cite numerous cases, as can you, 
where large corporations and individuals have gotten away with 
fines, simply fines for much, much larger damage. I think of 
the Exxon Valdez case that was featured in the CNN clip, etc., 
just to begin with. But I also notice that EPA cited the 
Pennsylvania Department of Transportation for wetlands 
violations in Bucks County in March 1999. This was well after 
the Pozsgai case. At the time, EPA was seeking a fine from the 
Pennsylvania Department of Transportation for $10,000.
    Do you know if EPA ever cited PENDOT for illegally filling 
the part of Mr. Pozsgai's property condemned in the taking of 
August 24, 1973?
    Mr. Kamenar. I am afraid I don't have the answer to that 
question, since it deals with a local issue way after the case 
when I was involved. The Pozsgai daughters or maybe their 
counsel might have some information on that.
    Ms. Pozsgai-Khoury. As far as we know, the answer to that 
question is no, they have never.
    Mrs. Chenoweth-Hage. The Pennsylvania Department of 
Transportation was never fined or cited?
    Ms. Pozsgai-Khoury. Never fined or cited or anything done 
on that property.
    Mrs. Chenoweth-Hage. Amazing.
    Maybe it is because they weren't Hungarian and didn't speak 
with an accent, I don't know.
    But, Mr. Kamenar, can you explain why the Army Corps and 
the EPA used different methods of evaluation in determining 
wetlands, and do you have any idea as to why they apply 
separate and sometimes conflicting standards in making their 
determinations?
    Mr. Kamenar. Well, I think I responded to that in some 
regard to the chairman's question about the various agencies 
have concurrent jurisdiction, whether it is the Department of 
Agriculture and their swampbuster program, the Forest Service, 
the Corps or the EPA. Again, it seems that there is some 
conflict there, but the manual that they are supposed to be 
using and reading from the same sheet of music is the 1987 
Wetland Delineation Manual. I would think that the next panel 
would have both of those witnesses from those agencies there, 
and maybe they can explain that better. But there is sometimes 
a conflicting definition, as well as conflicting definitions 
with State authorities.
    Keep in mind that Pennsylvania State authorities also have 
wetland protection laws, as do many other States. So even if 
the Corps were to go out of business tomorrow, that does not 
mean our wetlands are going to be lost, because we do have 
local land use activities. They are of keen interest to State 
and local communities as well.
    Mrs. Chenoweth-Hage. Mr. Kamenar, you indicated that 
recourse or restitution for this family is very, very limited, 
unless they file a takings case in the U.S. Court of Claims, 
and those cases, I know, cost millions of dollars. My husband 
is involved in one of them. But wouldn't you say that the city 
of Morrisville is somewhat liable for not maintaining their 
ditch when--isn't there an agreement here? I think it is in an 
exhibit, exhibit No. 40? I think there is an agreement that 
says----
    [Exhibit 40 follows:]

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    Mr. Kamenar. Again, there may be some avenue for some kind 
of contributory negligence, what have you. There is a general 
principle of nuisance law that if you cause a nuisance to 
somebody else's property, causing it to be flooded or what have 
you, you can sue them for the damage to your property. When 
that nuisance is being done by the governmental entity that 
floods your property, if there is a road next to your property 
that the Department of Transportation has built up and, because 
of that, water runs off on your property and floods your 
basement, you may have a takings case against that, because the 
water has occupied your land.
    So I am not sure exactly----
    Ms. Pozsgai-Heater. We do have a 1962 right-of-way 
agreement from Morrisville, the township, which gave the prior 
owners $345 for the promise forever to keep a storm drainage 
ditch and to construct the pipe to maintain it, and it was 
never maintained.
    Mrs. Chenoweth-Hage. Well, that is very interesting.
    I see my time is up, but, Mr. Chairman, if I might just ask 
one more question?
    Mr. Burton. Go ahead.
    Mrs. Chenoweth-Hage. I would like to ask Victoria to just 
sort of recount for the committee, because we are not trying to 
retry the case, but why did you come to my office one more 
time? Would you explain the ongoing harassment that has been 
occurring?
    Ms. Pozsgai-Khoury. Madam Chairman, we needed an answer. We 
tried and tried for over a decade to work with the Army Corps 
and the EPA to ask for information. They refused to even allow 
us the application. They blocked us in every way. They had 
lawyers and engineers available to them on their payroll. We 
were a simple family, a small business. We couldn't financially 
compete in the courtroom. We showed them the truth; we walked, 
touring several site visits. This is a stormwater drainage 
ditch. We scratched the insignia off of the wall. We crawled 
through the pipes. We did everything to show them what was our 
situation, but they refused to listen to us, and we had nowhere 
else to turn. I went to every U.S. Senator's office in the 
early 1990's, and I asked for help, and I went to every 
Congressman's office that I could bear. It took about 11 
consecutive days. I tried to do a commutation plea to President 
Bush. We collected 15,000 petitions. People continually call us 
and ask us what do they do in their situation, and I have 
nowhere to turn but here and to plead with you to help us and 
to make some kind of comprehensive private property relief for 
our family and for the many families who do not have a sponge 
and who do not have a wetland that is truly, truly valuable, 
but something that has been misdesignated and delineated in the 
property owner's own blood. This has to be addressed somewhere. 
We thank you.
    Mrs. Chenoweth-Hage. Mr. Chairman, I would like to just 
call your attention to exhibit No. 1. It is a letter to you in 
response to the questions that you asked the Army Corps of 
Engineers about the contacts that they have had with the 
Pozsgai family since Mr. Pozsgai was released from prison. And 
the Corps did indicate here on page 2 that over the last 6 
years, they have had 38 contacts with the Pozsgais. So it just 
goes on and on and on. And that is the reason why I asked you 
to hold this hearing.
    [Exhibit 1 follows:]

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    Mr. Burton. We will talk to the Corps of Engineers and the 
EPA in just a few minutes about that.
    Mr. Sanford.
    Mr. Sanford. Thank you, Mr. Chairman.
    I guess my first question would be to Ms. Andria. If I 
heard your testimony right, fundamentally what I heard was, 
when we looked at that map that showed the blue and the red 
lines, was it fundamentally what you are arguing in the 
bottomland issue is that there are basically pieces of land 
that should not be basically developed, for lack of a--if I was 
to catch it all, that would be basically what you are saying, 
right?
    Ms. Andria. That is correct.
    Mr. Sanford. My question is this, though: The nature of 
this debate is how do we do something about it? One way is 
regulatory; in other words, let's regulate wetlands so that we 
prevent that from happening, and there is a question about the 
degree to which that is appropriate. The other is to look at 
market-based incentives. What I find interesting is when you 
look at that gridwork that you were showing, which I think was 
east of St. Louis, what is interesting to me is are there water 
or sewer lines that are laid in that territory that frankly 
help a developer to go out and develop the land?
    Ms. Andria. The sewer lines, we have applied--asked for 
WRDA to try to assess, have the Corps assess the sewer lines 
and all of the problems.
    Mr. Sanford. My question is surely for houses to go in, 
water and sewer is laid in, because you don't turn on the 
ground to get water. Do every one of these houses have an 
individual well?
    Ms. Andria. I wish I could say, Congressman, that, yes, 
indeed, the houses do not go in until there is adequate sewers 
to take them. That is not the case.
    Mr. Sanford. I am not saying adequate. I am saying are 
there water and sewer lines out there in any of these 
neighborhoods?
    Ms. Andria. Are there water and sewer lines? Yes.
    Mr. Sanford. If you look at one of the appropriations bills 
that we are going through right now, what you would see are 
special earmarks, projects within the Federal budget that, 
frankly, work toward developing those areas that you don't 
think should be developed. In other words, I just use that as 
an example. If we eliminate some of the earmarks, probably you 
wouldn't see that land being developed. That would be one way 
of getting at the problem.
    All of these houses have Federal flood insurance, correct? 
You are in a Federal floodplain; you have flood insurance?
    Ms. Andria. I don't believe everybody has flood insurance.
    Mr. Sanford. You are right, not everyone. But in most of 
these areas there is a Federal subsidy that helps to create 
the--in other words, the risk--in other words, lowers the risk 
so that one can build a house in these neighborhoods. So I just 
find it fascinating that if the Federal Government is against 
development in these wetland areas or these bottoms which you 
are legitimately arguing, we have Federal policy that works in 
the opposite direction, either through appropriation bills that 
would provide water and sewer grants for these neighborhoods, 
or with Federal flood insurance so that you subsidize the risk 
of developing in these areas.
    So we have a convoluted, confused policy not only from the 
standpoint of wetland policy itself, but, frankly, from the 
standpoint of one hand doing one thing with the Federal 
Government and another hand doing another. So I wanted to make 
that one point.
    Two, I wanted to refer to, I guess, Mr. Kamenar or Ms. 
Dudley, in that as I understand it, this problem is about to 
grow worse, because as I understand it, the EPA--historically, 
point source pollution has been handled basically through EPA, 
and nonpoint source pollution has been handled at the State 
government level. As I understand it, EPA is contemplating a 
decision or maybe unilaterally acted on a decision wherein 
forestry or agricultural practices for the first time would be 
caught up in this whole tragic level of confusion that the 
Pozsgai family was in; you would now see that with farmers. Is 
that true, or could you elaborate, either one of you?
    Mr. Kamenar. I would like to take a stab at that. I think 
what you are referring to are the recent efforts by the EPA to 
regulate nonpoint sources of pollution through their----
    Mr. Sanford. Mind you I had an EPA person come in my 
office. I said, would you define ``pollutant,'' and it was 
dirt. In other words, it was simply runoff by the side of--
let's say, of a mountain out West. It was dirt, and they were 
going to exempt all Federal policies--all Federal lands, even 
though the government owned about 80 percent of the land in the 
West, and the largest pollutant was dirt.
    Mr. Kamenar. The sediment that comes down. There is a court 
case pending right now in the Ninth Circuit called Pronslino v. 
Marcus. It is a challenge to the EPA's authority to regulate 
basically nonpoint source on the Garcia River where there is 
only nonpoint sources of pollution, namely agriculture, 
silviculture and so forth.
    There is another court case in the D.C. circuit here that 
is pending, challenging that whole TMDL program that the EPA is 
trying to come up with.
    But you are right, there is this problem of the various 
kinds of ways that the agencies are trying to control the 
pollution through the point source and nonpoint source, and you 
are quite right that it is a mixed policy.
    Mr. Sanford. Do you have anything to add? In particular, I 
would as well ask if you could elaborate a little bit more on 
some of our market-based ideas in solving the dilemma that this 
family is in.
    Ms. Dudley. Yes, you are right. TMDL is the total maximum 
daily load rule that the EPA just issued, I think, in May, or 
maybe later. It does the same thing that the Corps has done in 
March with the nationwide permits, where it takes what are very 
local decisions, local issues, and requires reporting to a 
Federal bureaucracy, so that all of these decisions have to be 
made at the Federal level. I think that not only are market 
incentives going to be more effective, as we have seen with 
wetlands, but also State and local controls are going to be 
more effective due to the very nature of local decisions.
    Mr. Sanford. Could you elaborate just a little bit further, 
though? In your testimony you referred to some market-based 
ideas. Give me an example of those.
    Ms. Dudley. The Department of Agriculture and the Fish and 
Wildlife Service both offer incentive payments to landowners 
who protect their wetlands. I mentioned briefly that there may 
be an imbalance between the social value of the wetland and the 
private value. So when a landowner examines his own tradeoffs, 
it may make sense to fill a wetland that actually has social 
values, like Ms. Andria talked about. But the solution to that 
does not seem to be regulating at the Federal level, because we 
have seen, both from what Ms. Andria has talked about and what 
the Pozsgais are talking about, it is just not working. So you 
have a situation where large developers, who have big resources 
and can offer mitigation or do other things, are able to 
develop wetlands, whereas people like the Pozsgais can't.
    Mr. Sanford. Speaking of which, could somebody elaborate on 
the difference between what Ms. Andria, I think, is very 
legitimately raising, which is do you want to build a house in 
an entire floodplain, versus the isolated wetlands perhaps that 
you will see in coastal South Carolina wherein literally every 
50 feet there will be a different little inundation, and it is 
defined as a wetland in the same way the Congaree River Basin 
is defined as a wetland. I think the two are very, very 
different. Could either of you comment on that?
    Ms. Dudley. I will be very brief. I think it goes back to 
what you said in your opening statement, that one size does not 
fit all, and wetlands really range from what our vision of a 
wetland is to something like the Pozsgais' tire pile. That is 
why I think that the one-size standard isn't working.
    Mr. Kamenar. Just to reiterate that point, the definition 
of ``wetland'' that the Corps has, it doesn't matter what the 
functions or values are of that wetland in order for it to be 
categorized as such. That kind of a wetland is regulated the 
same way, with the same kind of muscle from the Corps, 
regardless of the value. Now, it may come into play when they 
are trying to do mitigation, etc., but clearly this piece of 
property that the Pozsgais had had very low ecological value; 
there is no wildlife habitat and things of that nature. They 
claim there was some stormwater damage, as if it were some kind 
of a sponge; but you can always mitigate that by putting a 
retention pond on your property, which I think is something 
that the Corps did not let Mr. Pozsgai consider.
    Mr. Sanford. I see my time is up, Mr. Chairman.
    Mr. Burton. If Members would like to ask further questions 
of this panel, we have extended the time for the hearing, so we 
will be glad to do that.
    If you want to go ahead right now, or we can come back to 
you after we recognize Mrs. Biggert.
    Mrs. Biggert, you are recognized.
    Mrs. Biggert. Thank you, Mr. Chairman.
    Ms. Dudley, does current law--you were talking about the 
incentives--does current law prevent or prohibit a landowner 
from going into or enrolling his or her land in an incentive 
program if he or she have been previously said to have violated 
the wetland laws and regulations?
    Ms. Dudley. I don't know the answer to that. Do you?
    Mr. Kamenar. No, I don't.
    Ms. Dudley. I am sorry.
    Mrs. Biggert. OK. Then to Mr. Kamenar, are either of you--
do you know how many land--property owners have been affected 
each year by the Federal wetlands policy regulations? We keep 
talking about all of these stories and things, but----
    Mr. Kamenar. I don't have the figures here, but I do know 
that the Corps, I think--in their testimony I thought I saw 
this morning they have a list of the number of thousands of 
permits that have been applied for and granted, and there are 
both general permits and individual permits, and this is all 
being changed with these new nationwide permits and so forth. 
So there are quite a few, and it is just going to get worse, 
because the Nationwide Permit 26 that Mr. Pozsgai had on his 
property, which allowed him to fill up to 10 acres, has now 
been abolished. Now it is really down to a half acre of land, 
and if you are going to impact one-tenth of an acre of your 
property, like putting in a swingset or something in your 
backyard, you have to give prenotification to the Corps of 
Engineers.
    So I can only see this problem getting worse and a lot more 
costly and a lot more Pozsgai cases coming down the pike.
    Mrs. Biggert. Do you think that the Corps of Engineers 
should perform a cost assessment evaluation to determine how 
proposed regulation, wetland regulation, would affect private 
owners?
    Mr. Kamenar. That has got to be the best suggestion that I 
have ever heard. That is absolutely crucial because what the 
Corps does now, this is a freebie, off-the-books regulation of 
private property. I would think that one thing that would be 
very beneficial is that the Corps would have to estimate what 
is the value of the property, the market value, that we are 
taking from this property owner, where we say you can't develop 
your property; because that in itself will reveal who is 
bearing the cost for this sponge. Why should the private 
property owner bear the cost of this sponge that's supposedly 
benefiting the whole community? For the Corps and the EPA, 
there is not a penny out of their budget.
    Although the Congress has appropriated money to the 
government agencies to purchase wetlands, they are doing it 
through the back door, on the cheap, by not having any cost 
factor apply to them. To them, it doesn't matter whether this 
is a low-value wetland or a high-value rare calcareous fen or 
bog. To them, they are equivalent because there is no cost. If 
you make them start paying out of their budgets and itemizing 
it, then you will start seeing priorities being established 
here.
    Ms. Dudley. Very briefly, the Corps did do an analysis of 
the cost of their nationwide permit provisions, and I think 
that that was a very useful thing to do, and it actually led 
them to reduce the burdens of that rule. They did not look at 
the benefits, which I think is the one missing piece. They need 
to look at the benefits as well as the costs.
    Mr. Kamenar. The administrative costs or the cost of the 
property?
    Ms. Dudley. Not the cost of the property.
    Mrs. Biggert. Do you have a further comment?
    Mr. Kamenar. I would say that those costs are the 
administrative costs, both direct and indirect cost. What is 
not really being factored in here is the loss to the value of 
the person's property, the market value of their property by 
all of this.
    Mrs. Biggert. So that would actually specify what that 
market value was before?
    Mr. Kamenar. That's correct. I believe there was some 
legislation a few Congresses back where there was going to be 
at least a requirement that the Corps come up with a number, 
and that if it came to more than 50 percent of the value of the 
property, just compensation would be due, rather than having to 
spend 8 to 10 years in the court of claims trying to figure 
out, you know, how much of your property has been taken. It is 
too costly to litigate so it is never done. There needs to be 
something that is done in a more fair manner to the property 
owner.
    Mrs. Biggert. One last question. You had also talked about 
some of the unwarranted criminal enforcement actions taken in 
the wetland cases. Do you think that the government has too 
much discretion in this area?
    Mr. Kamenar. I think they certainly do. Keep in mind that 
under the Clean Water Act, the government can use three kinds 
of enforcement powers. They can use administrative penalties 
before an administrative law judge and get class 1, class 2 
penalties. They can file a civil lawsuit in Federal court; and 
finally, for the worst-case scenario, they would have the 
option to use criminal penalties.
    I have seen in my practice that it is totally arbitrary 
which one of those three the Corps, the EPA and the Department 
of Justice will use. You can see cases where there is an 
administrative penalty, a $10,000 fine, where valuable wetlands 
were intentionally filled, and you see cases like Mr. Pozsgai 
and Ocie Mills, where they--especially in Ocie Mills' case 
where they went straight to criminal penalties. They didn't 
even begin civil penalties, at least as they tried to start in 
Mr. Pozsgai's case.
    So there is entirely too much discretion there. There needs 
to be some uniform policy on how the Justice Department and EPA 
and the Corps use those various three levels of options.
    Mrs. Biggert. Then the appeals process, too?
    Mr. Kamenar. The appeals process, that is just a recently 
enacted provision that allows the property owner to challenge 
administratively the delineation of your property.
    Heretofore, the court would not allow you to take the Corps 
of Engineers to court to challenge their delineation. You had 
to actually violate the law, risk the government picking one of 
those three choices against you, and then defending yourself in 
court, saying this is not a wetland, or the Corps doesn't have 
commerce jurisdiction--commerce clause jurisdiction on my 
property. So it was only until a few months ago that that 
procedure has been put in place. It is too early to tell 
whether that's been effective yet.
    Mrs. Biggert. Thank you.
    Thank you, Mr. Chairman.
    Mr. Burton. Let me just ask a question regarding the legal 
expenses that the Pozsgais had to go through. Do you think if 
there had been some kind of an ombudsman at the EPA and the 
Corps of Engineers, where people like them that have legitimate 
complaints and legitimate questions, if they could go to an 
ombudsman rather than have to go out and hire a lawyer on their 
own, do you think that might be one possible solution to 
streamlining this procedure and maybe eliminating these kinds 
of problems?
    Mr. Kamenar. I think that's a very good suggestion. Our 
foundation, of course, offered our services pro bono to the 
Pozsgais at the appellate level.
    Mr. Burton. I know, but they went to the primary with an 
attorney.
    Mr. Kamenar. That's right. They had to hire local 
attorneys, local engineers and so forth. That's a very 
expensive process for property owners that own just a small 
parcel of land, and I think that the Corps could have some kind 
of an ombudsman or some kind of a mediator that should be able 
to deal with these small property owners who just have one 
parcel. They don't have the funds to hire high-priced 
attorneys, like developers do, and consultants, who can pass 
that cost on into the development itself. Here they have to eat 
whatever costs that they incur.
    Mr. Burton. I understand. If there was an ombudsman, they 
could explain the legal ramifications of the problem as they 
came up, rather than----
    Mr. Kamenar. Sure.
    Mr. Burton [continuing]. End up with a tragedy like Mr. 
Pozsgai's family went into.
    I am going to yield the rest of my time to Mrs. Chenoweth.
    Mrs. Chenoweth-Hage. Thank you, Mr. Chairman.
    Victoria, I wanted to ask you about your father's arrest. I 
know that's a very difficult time to recall, but in my opening 
statement I got sort of carried away and talked about the fact 
that I do remember, I believe, your telling me that the family 
didn't have any weapons in their home, but that's sort of like 
hearsay.
    So I wonder if you could attest to that?
    Mr. Burton. Would the gentlelady yield real quickly?
    Mrs. Chenoweth-Hage. Yes.
    Mr. Burton. Did the law enforcement agencies that came into 
your house have a search warrant?
    Ms. Pozsgai-Khoury. No, they did not.
    Mr. Burton. Was your father--on what basis did they come in 
and search your house?
    Ms. Pozsgai-Khoury. During the arraignment, they specified 
as part of his release that I had to give them a $1,000 check 
for bail and to allow my father's property, our home and our 
vehicles, to be searched for unspecified firearms.
    Mr. Burton. OK. Well, I would like to have more information 
on that because if there was unlawful entry into your home 
without a proper search warrant, you may have recourse through 
the courts for restitution for invasion of your privacy. Even 
if you--I don't know what State--what State?
    Ms. Pozsgai-Khoury. Pennsylvania.
    Mr. Burton. I think in Pennsylvania you have the right to 
have a firearm in your home, and unless there is some reason to 
believe that a felony has been committed, and they don't have a 
search warrant, they cannot enter your premises without a 
search warrant. So you might talk to your legal representatives 
to find out if they entered illegally, that you may have some 
recourse in the courts for--in some kind of civil action.
    Ms. Pozsgai-Khoury. Thank you.
    Mr. Burton. I thank the gentlelady.
    Mrs. Chenoweth-Hage. Victoria, I would like for you to look 
at exhibit No. 49. I wonder if we can pull it up. On page 5, I 
think that--Chris, if you could point to the section in the 
guidelines that clearly state that any searches that occur 
should happen at the time of arrest--did this search occur at 
the time of arrest or did they make a search?
    [Exhibit 49 follows:]

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    Ms. Pozsgai-Khoury. They came after they arrested my 
father. We didn't even know who had arrested my father. A group 
of agents had come into our place of business and basically 
shanghaied him and took him off to the Philadelphia courthouse. 
He was never permitted to wash his hands, tell his wife, call 
us or make any type of call.
    Basically, my mother had an employee come running in the 
house and said someone had grabbed your father. I called the 
local police, the State police. I asked them if they had known. 
No one knew. But we had this civil court case pending in 
Philadelphia, so I had called them and they had basically told 
me that the Army Corps had turned over our case to the EPA and 
that now my father was being criminally sued.
    So I managed to get there during the arraignment, in which 
they informed me my--I informed them I had yet to find a civil 
attorney, and they basically informed me that I didn't need 
one, just bring a blank check.
    I did that. We went to the arraignment. They insisted that 
we allow them to search our home. We testified under oath--
again we told them anyway, we knew that we did not own 
firearms, or that we would turn them over as they requested. 
They basically forced us to agree to the search.
    I had brought my dad home, and the EPA agents subsequently 
searched our home. They went through everything, all of our 
paperwork, our drawers, in search of weapons, and left when 
they didn't find any.
    Mrs. Chenoweth-Hage. I would like to also call the 
committee's attention to exhibit No. 28 and then exhibit No. 
29.
    [Exhibits 28 and 29 follow:]

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    Mr. Burton. I will now yield to the gentlelady for her 
time.
    Mrs. Chenoweth-Hage. Thank you. This is what they call a 
bail status sheet dated September 12, 1988. Is this the day 
that--can you remember, is this the day that you went to the 
Eastern District Court of Pennsylvania to try to get your 
father released on bail? Is this the date, September 12, 1988, 
do you remember?
    Ms. Pozsgai-Khoury. As far as I know, yes.
    Mrs. Chenoweth-Hage. Would you look at the last two lines 
of the handprinted document? It looks there to me like the bail 
is contingent upon surrender of firearms, and allows U.S. 
Marshals or EPA to search the defendant's residence and garage 
for weapons.
    Now, on September 13, there is a signed consent to search 
which says at the end of the first paragraph, I allow them to 
search for any and all weapons in compliance with bail 
requirements set by Judge William Hall on September 12, 1988.
    Had you been advised ahead of time that anyone, the judge--
was this an administrative judge?
    Ms. Pozsgai-Khoury. I am not sure, but the key is that this 
was not voluntary. They said if I--the release was contingent 
upon us agreeing to them--allowing to this search; I wouldn't 
be able to take my father home, and that was about 5 p.m. on a 
Friday. They would have held him all weekend until I agreed to 
allow them to search.
    Mrs. Chenoweth-Hage. Mr. Chairman, this seems 
extraordinarily out of order with regards to the agency's own 
guidelines that the committee was presented with. Without 
objection, I would like to enter these exhibits into the 
record.
    I would like to ask Gloria--I would like to have us turn to 
exhibit No. 64, the picture. It is a picture of a hole with 
some type of tube in it.
    [Exhibit 64 follows:]

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    Ms. Pozsgai-Heater. Exhibit No. 64 is the drainage--the 
sewer sanitary line that was placed in there back in 1934 by 
Morrisville Burrough. It is over 40 years old, and as a result 
of the excavation and the restoration of the Army Corps, we had 
mentioned the possibility of this old pipe caving in on another 
property across the street, and it eventually caved in.
    Mrs. Chenoweth-Hage. Let me interrupt you, and let's also 
go to exhibit No. 65. I think it shows the tube in a little 
more detail.
    [Exhibit 65 follows:]

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    Ms. Pozsgai-Heater. This is the storm sewer line, and that 
directly empties into the ditch on the property that they 
claimed was wetland.
    Mrs. Chenoweth-Hage. So this is how the EPA and the Army 
Corps bootstrapped their jurisdiction into your property?
    Ms. Pozsgai-Heater. Right.
    Mrs. Chenoweth-Hage. The dump that you acquired?
    Ms. Pozsgai-Heater. Yes.
    Mrs. Chenoweth-Hage. They claimed this was a navigable 
stream?
    Ms. Pozsgai-Heater. Yes.
    Mrs. Chenoweth-Hage. Was your father ever held in 
contempt----
    Ms. Pozsgai-Heater. Yes.
    Mrs. Chenoweth-Hage [continuing]. In the court during the 
hearing?
    Ms. Pozsgai-Heater. Yes, at one point.
    Mrs. Chenoweth-Hage. I wonder if we can show these 
pictures, and I will pass the other pictures around.
    Now, I do want to say, wasn't your attorney disbarred?
    Ms. Pozsgai-Heater. He was not disbarred. He was 
reprimanded, and he was almost disbarred for drunken and 
disorderly conduct within a court presentation; not my present 
lawyer.
    Mr. Kamenar. Thank you.
    Mrs. Chenoweth-Hage. Sorry about that.
    Now, I understand that the judge said, in trying to prove 
that that was John Pozsgai on his property in that piece of 
equipment, that the judge said, ``We know that's you in the 
video; we have the technology to blow it up and identify you.''
    Mr. Chairman, I would like to pass to you copies of these 
pictures of the video.
    Now, since then, the video has been destroyed by the 
Department of Justice?
    Ms. Pozsgai-Heater. I defer that to my sister.
    Mrs. Chenoweth-Hage. But to that allegation, isn't it true 
that when the judge said, ``We know that's you in the video, we 
have the technology to blow it up and identify you,'' then your 
father responded, ``I would like to see you do that''; isn't 
that correct?
    Ms. Pozsgai-Khoury. Yes, he did.
    Mrs. Chenoweth-Hage. I would have said the same thing. And 
that, at that point, the judge held your father in contempt?
    Ms. Pozsgai-Khoury. Yes, he did.
    Mrs. Chenoweth-Hage. Unfortunately, as I said earlier, the 
Department of Justice has somehow lost or displaced or 
destroyed the video. That's just another chapter in this dark 
book involving John Pozsgai.
    I yield back the balance of my time.
    Mr. Burton. Mr. Sanford.
    Mr. Sanford. Yes, sir. Are any of you all familiar with a 
land planner by the name of, Andres Duany? It is currently 
talked about. It is called ``smart growth.'' In fact, it is one 
of the things that Vice President Gore is talking about in his 
Presidential race and that is the issue of, ``smart growth.'' 
It is really premised on what Andres Duany talked about, and 
that is the idea, if you look at the old cities of the East 
Coast, if you look at Charleston, SC, if you look at Savannah, 
GA, if you look at Philadelphia or Boston, what you see there 
is a very tight grid of town streets very close to each other; 
not what you would see as the modern, ``sprawl model,'' where 
you see roads and sewer lines laid out across the countryside 
and a house here and a house there.
    Now, what Andres Duany talks about is if you build that 
way, you really destroy a lot less in the way of the 
environment because you are not building across a wide 
geographic area. And what I would like to suggest is, our 
current wetlands policy prevents that very kind of growth 
because rather than being able to build on a tight--in other 
words, the towns of Charleston, or Savannah, GA, could never be 
built today because you would have to skip a spot, go across, 
lay sewer line, lay water line, lay more pavement, all of which 
causes more environmental degradation, to be able--in other 
words, to build now versus the filling of different small 
wetlands and building a compact city.
    So I would like to, one, lay out the premise--for those of 
you not familiar with it, it is worth looking at--Andres 
Duany's work. It is fascinating work. It is called 
Neotraditional Town Planning. It is based on the idea of 
building on old, and it causes a lot less in the way of use of 
resources and use of land; but our current environmental 
policy, our current wetland policy, prevents that kind of 
development.
    Two, I would like to--I guess, Mr. Kamenar, you talked 
about the commerce clause--well, before I get to that, let me 
lay out another important thing, though. When you talk about 
wetlands, I am not talking about Charleston destroying the 
Congeree River Basin. What I am talking about is a very--in 
other words, when we say wetland, I think we get confused about 
what wetland is.
    I want to ask you, Mr. Kamenar, if you can look out and see 
no water on a piece of land, could it still be a wetland?
    Mr. Kamenar. Absolutely. In fact----
    Mr. Sanford. OK. Let me carry it a little further. If you 
can ride a bicycle across a piece of land, could it still be a 
wetland?
    Mr. Kamenar. Yes.
    Mr. Sanders. If you could get out--would you have to wear 
boots or waders if you were going to cross a, ``wetland,'' or 
tennis shoes or go barefoot for that matter?
    Mr. Kamenar. Go barefoot, right.
    Mr. Sanford. OK. Could you run like a 35-ton tractor across 
the top of a wetland?
    Mr. Kamenar. Sure.
    Mr. Sanford. Could you run a 50-ton caterpillar D-8 across 
the top of a wetland?
    Mr. Kamenar. Absolutely.
    Mr. Sanders. I mean, if it was a wetland, I would think 
that a 50-ton machine would sink.
    Mr. Kamenar. You would think so.
    Mr. Sanford. In other words, that is precisely the problem 
we have in current environmental law. There is a--I mean, 
people think wetland and they think about Congeree River Basin; 
and yet the way that Charleston developed or Savannah developed 
200 and 150 years ago, with little pockets, are very, very 
different than what I think a lot of people think in their 
minds as a wetland.
    Toward that end, I think in your testimony you talked about 
the commerce clause. I had seen some strange interpretation of 
the commerce clause, such that the only way in which the EPA or 
other organizations use the commerce clause is by suggesting 
that ducks fly across State lines and therefore it makes it 
jurisdictional to the commerce clause. Could you elaborate on 
that just a little?
    Mr. Kamenar. Yes. That is exactly the case that is before 
the Supreme Court that is going to be argued on October 31st. 
The case is the Solid Waste Agency of Northern Cook County 
versus the Corps of Engineers, and the only assertion of 
jurisdiction over that wetland is that a migratory bird flies 
and lands on your property. We call it the ``glancing duck'' 
theory of interstate commerce.
    Mr. Sanders. Although in many of the wetlands I am 
describing, no duck could land; is that not correct?
    Mr. Kamenar. That's true. So, you know, the question is 
whether that is sufficient power for the Federal Government to 
regulate it, and the Supreme Court will finally get involved in 
that and it will have a big impact on not only wetland 
jurisdiction but also Endangered Species Act jurisdiction and 
so forth and so on. So it is a very important case.
    The other part of the argument in the case is whether or 
not, even under the definition, the Corps' definition of 
wetlands, assuming they had commerce clause jurisdiction, is 
this a wetland under their own regulation?
    Again, I go back to Riverside Bayview Homes where the 
Supreme Court said you can regulate: here is the open water; 
there is a continuum, and then you have the dry land. Where in 
this continuum is the wetland? The Supreme Court said, we will 
give that tie to the Corps of Engineers; we will give them the 
expertise.
    They were only talking about wetlands adjacent to these 
open body of waters. What the Corps of Engineers did was take 
that decision and ran with it by going way inland where there 
is no adjacency at all. They start making up these hydrological 
connection-type of theories of jurisdiction to be sure they can 
get lower court decisions to buy into their power grab there. 
But I think the Supreme Court will also address that statutory 
definition issue as well.
    Mr. Burton. Mr. Sanford, if you like, we are going to have 
the Corps of Engineers and the EPA up here when we come back, 
we would love to have you come back because I know you probably 
have questions for them.
    Mrs. Biggert, we have about 8 minutes.
    Mrs. Biggert. I have just two short questions for Mr. 
Pozsgai's daughters.
    Some have said that your father knew that the property was 
a wetland before he bought it. Before he bought it. Is that 
true?
    Ms. Pozsgai-Khoury. No.
    Mrs. Biggert. That is not true.
    Do you think that your property is a wetland?
    Ms. Pozsgai-Khoury. Absolutely not. No.
    Ms. Pozsgai-Heater. No.
    Mrs. Biggert. Do you have any scientific findings that 
prove that your property is not a wetland?
    Ms. Pozsgai-Heater. Yes.
    Mrs. Biggert. Could you state those?
    Ms. Pozsgai-Khoury. If I could just have a moment.
    Dr. Kirkham's report. This was a soil scientist who we 
hired.
    Mr. Burton. Hold the microphone up closer to you and turn 
it on.
    Ms. Pozsgai-Khoury. It is on.
    We had hired a soil scientist, Mr. Wendell Kirkham, and his 
soil scientist analysis on our property was that we have never 
had a wetlands, or that he could not find any wetlands 
parameters that have ever been scientifically proven in any 
court that existed on our property; and that's Exhibit 20.
    Mrs. Biggert. Exhibit 20?
    Ms. Pozsgai-Khoury. Exhibit 20.
    Mrs. Biggert. Could we put that in the record?
    Mr. Burton. Yes, we will put that in the record, and if you 
like we could recess now and we will come back and conclude 
with this panel and then go right to the EPA.
    [Exhibit 20 follows:]

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    Mrs. Biggert. Thank you. That's all the questions that I 
have.
    Mr. Burton. We will be back in about 10 minutes. We have 
another vote. We apologize for that. We will try to wrap up 
with this panel as soon as we get back so we can get the EPA 
and the Corps of Engineers. We stand in recess.
    [Recess.]
    Mr. Burton. The committee will come to order. I talked to 
the rest of the panelists, and I don't believe we have any more 
questions for this panel, but I hope that maybe you will stay 
around and listen to what the people from the Corps of 
Engineers and the EPA say. I want to thank you very much for 
being here.
    Mr. Pozsgai, I didn't get a chance to say hello to you but 
perhaps I will get a chance to talk to you before the end of 
the hearing.
    I want to thank you all for your testimony. It was very 
interesting, very interesting from East St. Louis' perspective 
as well. So thank you very much.
    We will now have the next panel come forward. Our second 
panel will consist of Mr. Michael Davis and Mr. Robert Wayland. 
Mr. Davis is from the Corps of Engineers and Mr. Wayland is 
from the EPA.
    Before you sit down, if we could, we would like to have you 
sworn, please.
    Please raise your right hands.
    [Witnesses sworn.]
    Mr. Burton. Have a seat. Do either one of you have an 
opening statement? If so, you will be recognized, Mr. Davis, 
Mr. Wayland.
    Mr. Davis, you are recognized.

  STATEMENTS OF MICHAEL DAVIS, DEPUTY ASSISTANT SECRETARY FOR 
 POLICY AND LEGISLATION, OFFICE OF CIVIL WORKS, DEPARTMENT OF 
   THE ARMY; AND ROBERT WAYLAND III, DIRECTOR, OFFICE OF THE 
  WETLANDS, OCEANS, AND WATERSHEDS, ENVIRONMENTAL PROTECTION 
                             AGENCY

    Mr. Davis. Mr. Chairman, members of the committee, I am 
Michael Davis, Deputy Assistant Secretary of the Army for Civil 
Works. Thank you for the opportunity to provide information on 
the Department of the Army's regulatory program.
    In my detailed statement, I provided an overview of the 
Clean Water Act Section 404 regulatory program, including the 
Corps' enforcement responsibilities and recent changes made by 
the administration to improve the program.
    I will provide a brief summary of my statement. 
Specifically, I will emphasize three key points: that the 
Army's regulatory program considers fully private property 
rights; that both permitting and enforcement arms of the 
program are administered in a professional and respectful 
manner; and that the program is important if we are to protect 
the property rights of the public at large.
    To say that the protection of wetlands through regulation 
has engendered considerable controversy in the past 28 years 
may be one of the few points of common ground between those who 
believe that the Section 404 program is no more than a Federal 
rubber stamp allowing the destruction of wetlands and those who 
suggest that the program tramples on the rights of private 
property owners.
    We in the administration, however, believe that this 
dichotomy between private property rights and environmental 
protection does not reflect the way the program really works. 
In fact, through the administration's initiative, the Section 
404 program has been successful in reconciling the interests of 
all property owners, allowing reasonable development to proceed 
while protecting our Nation's aquatic resources and reducing 
the loss of wetlands.
    When evaluating how a program affects the public, it is 
important to understand why the program was established, how it 
developed and how it has operated over the years. Recent 
statistics and information on key administration wetland 
initiatives show that the Army's regulatory program is, on the 
whole, fair, flexible and effective, and that property rights 
are protected.
    One of the successful aspects of the Section 404 program is 
the ability of the Corps to reconcile the often conflicting 
objectives of an individual landowner with the interests of 
other landowners that could be adversely affected by the 
disruption of aquatic areas and by other development related 
impacts. Because most applicants are willing to work with the 
Corps, in over 99 percent of the cases, permit applicants are 
allowed to accomplish their objectives in a manner that 
protects the interests of other landowners and the environment.
    It is standard procedure for the Corps to consider fully 
how proposed activities could affect the environment and other 
people and their property. For example, the loss of important 
wetlands may harm the quality of water in the Chesapeake Bay 
which in turn could reduce blue crab and oyster populations, 
resulting in economic harm to the region.
    In addition, we have observed firsthand numerous examples 
where the Section 404 program has protected the rights of 
property owners. For example, in Georgia, through the Section 
404 program, a developer was required to mitigate for the 
illegal unauthorized filling of wetlands that resulted in the 
flooding of adjacent property owners.
    The homeowners in the affected subdivision expected and, 
Mr. Chairman, demanded that the Corps of Engineers and EPA 
enforce the Section 404 program.
    The statistics accompanying my written statement support 
our belief that the Army has been successful in providing 
necessary environmental protection and allowing landowners to 
realize their development goals. During fiscal year 1999, over 
74,000 landowners asked the Corps of Engineers for a Section 
404 permit. This was the largest number of Section 404 
permitting decisions made during any 1 year since the program's 
enactment in 1972. Of those decisions, 90 percent of the 
authorizations were made through a general permit in an average 
time of 18 days. Only 5 percent of the applications were 
evaluated using the more detailed, timely, standard individual 
permit evaluation process.
    The average process time, though, for these more detailed 
evaluations was 118 days.
    Mr. Chairman, less than 1 percent of those 74,000 permit 
applications were actually denied. With your permission, I 
would like to highlight some of these statistics on a graphic 
or two, if we could have the graphic put up.
    This one demonstrates the overall universe of permitting 
activities that the Corps of Engineers had; this is that 74,000 
people who walk into a Corps of Engineers office somewhere 
across the country. What this shows in this big purple piece of 
the pie is that 90 percent of these applicants got their 
permits under an abbreviated general permit process in an 
average time of 18 days.
    The next graphic, please.
    This is just a slightly different way of looking at some of 
the same data, but I call your attention to the last bar, the 
one on the far right. If you look at all of these 74,000 
individuals who were subjected to this process in fiscal year 
1999, the average time to get a permit decision was 23 days. 
The main point of this is that in the vast majority of cases, 
the Corps regulatory program authorizes owners of private 
property to use their land subject to reasonable conditions to 
protect the rights and property values of others.
    Mr. Chairman, you have heard a lot today about one wetlands 
enforcement case. It is regretful that the Federal Government 
was forced to take such action in a situation that could have 
been avoided. It is important to note, however, that this case 
does not in any way illustrate how enforcement of wetland laws 
really works.
    For example, the philosophy underlying the Corps' 
enforcement of its regulatory responsibility is to resolve 
enforcement actions by gaining compliance in the least 
confrontational and burdensome manner. A decision to bring an 
enforcement action is based on consideration of three factors: 
No. 1, the legal requirements; the nature of the violation; and 
the extent to which the violator was aware of Clean Water Act 
requirements.
    The basic Corps enforcement practice is to gain compliance 
with the least amount of conflict, seeking stronger enforcement 
measures only when a violation is severe or the violation is 
willful, flagrant or knowing.
    Much has been said and written about a very few highly 
publicized wetland enforcement cases. You have heard testimony 
of one of those today. As noted in the statistics provided in 
with my testimony, the reality is that less than 2 percent, 
less than 2 percent, of all enforcement actions result in any 
kind of civil or criminal penalty. After-the-fact permits and 
voluntary actions resolve the vast majority of violations by 
landowners.
    Only in extreme cases does the government pursue litigation 
and fines. It is significant that there have been fewer than a 
dozen enforcement cases that have been so highly publicized out 
of the tens of thousands of enforcement actions that have 
occurred since enactment of Section 404 in 1972.
    Looking at alleged violations reported to the Corps, 60 
percent resulted in a finding that there was no violation or 
that a permit had already been issued. Over 38 percent of the 
cases turn out to be violations that are resolved through 
administrative actions such as acceptance of a restoration plan 
or the acceptance of an after-the-fact permit application.
    While we believe that the program works well overall, we 
recognize that it is not perfect and that we can always make 
improvements, and we should make improvements. Shortly after 
coming into office, the administration convened an interagency 
working group to address concerns with Federal wetlands policy. 
After hearing from States, tribes, developers, farmers, 
environmental interests, Members of Congress and scientists, 
the White House Wetlands Working Group developed a 40-point 
comprehensive plan to enhance wetlands protection while making 
wetlands regulations more fair, flexible and effective for 
everyone.
    For example, a successful regulatory initiative is an 
interagency mitigation banking program. Mitigation banking is a 
market-based alternative for landowners to effectively and 
efficiently compensate for wetlands impacts.
    Mr. Burton. Excuse me, Mr. Davis. Everything you are saying 
is very interesting, but would it be possible for you to 
summarize the rest of it so we can get to some questions with 
you and your colleague, Mr. Wayland?
    Mr. Davis. Certainly, Mr. Chairman. I do think these are 
very important points. There has been a lot of information.
    Mr. Burton. We will be happy to submit those for the record 
and the committee members will read them.
    Mr. Davis. In conclusion, Mr. Chairman, as indicated by the 
facts presented in my statement, we strongly believe that the 
Corps implements the Section 404 program in a manner that 
respects the rights of the Nation's property owners. The vast 
majority of landowners are allowed to use their property and 
realize their development expectations in a manner that 
protects important aquatic resources.
    An often overlooked aspect of the property rights debate is 
the impact on other property owners of filling wetlands. We 
have observed firsthand where the Section 404 program has 
protected the rights of adjacent and downstream property owners 
from flooding and other problems. In this regard, we must 
recognize that fairness to landowners extends to all 
landowners, and that individuals do not have a right to harm 
their neighbors or the environment.
    This administration, like no other before it, has taken the 
initiative to address the legitimate concerns of all 
landowners. The right to own, reasonably use, and enjoy private 
property is vital to our Nation's economic strength and to our 
constitutional heritage. Our efforts at regulatory reform have 
been directed at new practices to make wetlands regulations 
more fair, flexible and effective for everyone. We believe that 
we have been successful in meeting these objectives.
    Mr. Chairman, thank you for the additional time. That 
concludes my statement. We would be happy to answer any 
questions.
    Mr. Burton. Thank you, Mr. Davis.
    [The prepared statement of Mr. Davis follows:]

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    Mr. Burton. Mr. Wayland.
    Mr. Wayland. Good afternoon, Mr. Chairman and members of 
the committee. I am Robert Wayland, Director of the 
Environmental Protection Agency's Office of Wetlands, Oceans 
and Watersheds, and I welcome the opportunity to join my 
colleague, Michael Davis, in describing the strong commitment 
of EPA and our executive branch partners to protecting and 
restoring wetlands with fairness, flexibility and 
effectiveness.
    Since you indicated my entire statement will be included in 
the record, I will gladly summarize it for you.
    Wetlands are among our Nation's most critical and 
productive natural resources, protecting private property from 
flooding and providing shoreline erosion control. They help 
protect water quality, support commercially valuable fisheries, 
and provide primary habitat for wildlife, fish and waterfowl.
    Flood-prone areas of the United States cover approximately 
15,000 square miles and at least 9.6 million households, and 
$390 billion in property are at risk. Direct flood damage in 
the United States in 1999 has been approximated at $5.4 
billion. Because wetlands serve as natural storage areas for 
flood water, they can help prevent or reduce the severity of 
flooding. Wetlands also play an important role in recharging 
groundwater used to irrigate crops or in manufacturing, such as 
playa lakes, a form of wetlands, in west Texas and New Mexico, 
which recharge the Midwest's Ogalalla aquifer.
    Wetlands are important to commercial and recreational 
fisheries, a multibillion dollar industry that employs hundreds 
of thousands of people and contributes billions in State and 
Federal taxes. Wetlands also provide important habitat for 
migratory birds and waterfowl.
    A national survey of wildlife-related recreation prepared 
by the Bureau of Census and the Fish and Wildlife Service 
indicated that overall in 1996, activities associated with 
hunting, fishing and wildlife watching amounted to $101 
billion.
    Since the time of the European settlement, more than half 
of the wetlands in the lower 48 States have been lost. Over the 
past 28 years, since its enactment, the Section 404 program, 
along with the Swampbuster provisions of the farm program, 
ongoing public and private wetlands restoration programs, and 
active State, local and private wetlands protection efforts, 
have prevented the destruction of hundreds of thousands of 
acres of wetlands and the degradation of thousands of miles of 
rivers and streams.
    The annual rate of wetland loss has been reduced from over 
460,000 acres a year during the 1950's to the 1970's, to 60,000 
acres from 1986 to 1997 annually. This has reduced property 
damage and loss of lives from flooding, and protected fish and 
wildlife habitat and water quality, all vital to our Nation's 
economy and overall health.
    Because they are waters of the United States, all of the 
protections applicable to rivers, lakes and estuaries 
established in the Clean Water Act apply to wetlands. Under 
Section 404, any person planning to discharge dredged or fill 
material to wetlands or other waters of the United States must 
first obtain authorization from the Corps of Engineers, either 
through issuance of an individual permit or as authorized under 
a general permit.
    The vast majority of authorizations for discharges take the 
form of general permits which usually have fewer procedural 
requirements, as my colleague mentioned, and are usually 
accomplished in a matter of days.
    The Federal agencies strive to minimize the imposition of 
Section 404 program burdens on landowners and other dischargers 
consistent with our mandate to protect, restore and maintain 
the physical, chemical and biological integrity of the Nation's 
waters. During fiscal year 1999 the Corps of Engineers 
regulatory program provided authorization to over 74,000 
activities. Administering the 404 program in a fair, flexible 
and effective manner is and long has been a priority of this 
administration.
    In a comprehensive 1993 plan developed by several Federal 
agencies, we set out a blueprint for actions to be responsive 
to landowner concerns with the Section 404 program while 
enhancing the effectiveness of protecting wetlands and other 
waters. The plan includes over 40 specific actions and their 
implementation by EPA, the Corps and other agencies, have 
resulted in many improvements on those we regulate, while the 
rate of wetland loss has declined.
    A few of the highlights include our guidance clarifying the 
need for flexibility in processing permit requests and 
emphasizing that small projects with minor impacts do not need 
the same detailed level of review as large projects. EPA and 
the Corps amended our jurisdictional regulations to make clear 
that prior converted crop lands are excluded from the Clean 
Water Act jurisdiction. We entered into a memorandum of 
agreement with the Corps and the Departments of Agriculture and 
Interior regarding the delineation of wetlands on agricultural 
lands in order to increase certainty for farmers by providing a 
single reliable wetland determination.
    EPA and the Corps had earlier, in 1991, adopted the use of 
the Corps 1987 Manual for Wetland Delineation Purposes. So 
there is a single wetland delineation manual for the 404 
program.
    To reduce regulatory burdens on persons wishing to build a 
home, or for their family, the Corps issued nationwide permit 
29 for single family homes, impacting less than a quarter acre 
of non-tidal wetlands. EPA, along with four other agencies, 
issued joint Federal guidance concerning the establishment of 
wetland mitigation banks. The Corps published final rules 
establishing an administrative appeal process for 
jurisdictional determinations, permit denials, and declined 
individual permits.
    We continue to emphasize the importance of nonregulatory 
programs such as advanced watershed planning, voluntary 
participation in the wetlands reserve program, partners for 
wildlife program, the five-star restoration program and other 
public and private cooperative programs to protect and restore 
wetlands. In addition, we have increased funding to States, 
tribes and local governments for their wetland programs.
    The EPA also provides information and coordinates 
extensively with the public to help landowners understand and 
comply with the requirements of the Clean Water Act. We provide 
a toll-free wetlands information helpline that has assisted 
tens of thousands of callers. We offer extensive information on 
wetland programs, policies, and regulations on the World Wide 
Web. We keep many active lines of communication with 
organizations representing landowner interests.
    The Clean Water Act provides the Corps and EPA may bring 
enforcement actions for violations of Section 404 and may bring 
criminal violations to the attention of the Department of 
Justice.
    A vital part of effective wetlands protection is the 
enforcement of those cases that involve serious harm to the 
environment and/or adjacent property owners as a result of 
unauthorized dredging or filling or involve flagrant or knowing 
violations of the law.
    Some aspects of the Pozsgai case which were not developed 
in previous testimony include the fact that the trial record 
established that Mr. Pozsgai was advised by three consulting 
firms he retained, prior to his purchase of the property in 
question, that much or all of the parcel consisted of protected 
wetlands. Those were the J.G. Park Engineering Co., Mr. Ezra 
Golub and the Majors Engineering Co. Over 400 truckloads of 
rock and concrete filling in at least 4 acres of wetland 
resulted in flooding of the neighbors' property in this case.
    During the course of the proceedings, Mr. Pozsgai violated 
a temporary restraining order issued by the court for which the 
court ordered Mr. Pozsgai in contempt.
    In conclusion, Mr. Chairman, in carrying out the Section 
404 program, both the Corps and EPA are sensitive to the issue 
of property rights. Implementation of the 404 program often 
requires balancing of environmental protection, public 
interests and individual interests. We have made much progress 
but we continue to strive toward the fair, flexible and 
effective implementation of the program.
    Thank you very much.
    [The prepared statement of Mr. Wayland follows:]

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    Mr. Burton. Thank you. I was just informed that the 
Pozsgais never hired any of those firms; that the realtor who 
sold it to them was concerned about possible litigation against 
him if he sold a wetland and so he hired one of those firms, 
who did a very cursory look at the wetland--or at the property. 
He walked around it and really didn't do a very thorough 
investigation.
    One of the things that concerns me is, Mr. Davis, I think 
you said that it is really impressive, the number of people 
that you have helped and the very small percentage of people 
who have had problems. That may be true, but we are, by the 
Constitution, supposed to protect the minority as well as the 
majority. And if a person who doesn't speak English well, who 
is a Hungarian freedom fighter who came over and here and 
didn't understand some of these problems, is put in that kind 
of a position, it seems to me that the Corps of Engineers and 
the EPA and the Justice Department ought to do everything they 
can to make sure, before legal action is taken, that they make 
sure that that person is apprised of the problems that they 
face.
    One of the things I asked one of the counsels for the 
Pozsgais awhile ago was if they thought it might be a good idea 
to have an ombudsman for those cases where there is a problem 
with EPA or the Corps of Engineers for these people to be able 
to go to, especially those who may not understand all of the 
ramifications that you are talking about, to talk to them and 
to be able to explain their problems before they are hauled off 
to jail.
    What do you think about an ombudsman for that kind of a 
situation?
    Mr. Davis. Mr. Chairman, we would certainly consider that, 
and we would want to understand exactly what it meant from a 
legal perspective, but I think that's something that we would 
take--under advisement. In fact, we have a record of doing 
something, I think, that's similar. In some Corps districts, we 
have what we call tribal coordinators to help us communicate 
better with tribes and understand more fully their issues, and 
so we do have----
    Mr. Burton. You are talking about Indian tribes?
    Mr. Davis. Yes, sir, Indian tribes.
    Let me just say, though, that I actually started my career 
in the Federal Government over 20 years ago as an enforcer in 
this program, out in the trenches, if you will, and my 
experience is that we work very hard to try to avoid any type 
of criminal or civil action. It is extremely rare.
    We work with landowners. We try to address the 
environmental problem. That's fundamentally all we are 
interested in, is taking care of the environment.
    Mr. Burton. Sure, I understand. Let me just ask you this: 
Have you ever heard of a more severe penalty than Mr. Pozsgai 
went through for this kind of a problem?
    Mr. Davis. Penalties in the program are very rare.
    Mr. Burton. Have you ever heard of a more severe penalty, 3 
years in jail, $200,000 in civil penalties, $202,000 in 
criminal penalties, 18 months in a halfway house? For this kind 
of a problem, have you ever seen a more severe penalty?
    Mr. Davis. I am not aware of one.
    Mr. Burton. How about you, Mr. Wayland?
    Mr. Wayland. I am not--Mr. Chairman, I think there may very 
well be penalties that have resulted in more lengthy 
incarcerations, and there certainly have been many money 
penalties that greatly exceed those that were imposed in this 
case.
    Mr. Burton. For a man who was a truck mechanic, who just 
had a small house, who bought 14 acres across the street from 
him? I mean, shouldn't the penalty fit the crime if there is a 
crime?
    Mr. Wayland. It is my understanding that the money penalty 
was significantly reduced as a result of----
    Mr. Burton. I know, but that's not the point. The point is 
that it was initially levied at over $200,000.
    Mr. Wayland. And that the--and that the period of 
incarceration was significantly affected by mandatory 
sentencing guidelines.
    Mr. Burton. It went from 3 years to 18 months. Well, let's 
just say the 18 months. Don't you think that's a little severe 
for that?
    Mr. Wayland. It is certainly very unusual for a penalty of 
that magnitude to be imposed. However, I think that the 
contributing circumstances were the continued violations after 
a restraining order had been issued by a court.
    Mr. Burton. One of the reasons, Mr. Wayland and Mr. Davis, 
that I think that there needs to be some kind of an ombudsman 
for these people to go to is Mr. Pozsgai, a Hungarian freedom 
fighter who still doesn't speak English all that well, was 
not--he thought when you talked about mitigating funds, he 
thought that was a bribe and he went to the FBI, I understand, 
to report that they were trying to--he was trying to be coerced 
into doing something, because that's what he had to live with 
in a Communist country where he fought the Russians in the 
streets of Budapest.
    It seems to me before you start throwing somebody like that 
in the slammer, if he thought he was being--they were trying to 
blackmail him, it seems like somebody would have sat down and 
said, hey, hold it, we aren't trying to blackmail you; we are 
talking about using some funds to go straighten out the mess 
that's been created.
    But it just went on and on and on, and even though this is 
a very rare situation--I don't know if it is or not. I am sure 
we are going to have other cases because I intend to have more 
hearings about this because I believe this thing needs to be 
streamlined and corrected. I mean, I understand what you are 
saying, that things are a lot better than they were, but it 
seems to me that there is more improvement that can be made.
    And so it just seems like to me--just 1 second. It just 
seems like to me that when you have somebody who is not 
conversant with the English language like they should be, and 
we have a lot of those, a growing number, especially Hispanics 
that are coming into the country, it seems to me that there 
should be extra care taken to make sure they understand their 
rights under the law and the penalties that they might face if 
they don't concur. And I don't believe in the case of Mr. 
Pozsgai that he understood that.
    With that--I don't have any more questions, but if you want 
to make a quick comment.
    Mr. Wayland. I just wanted to respond to the suggestion 
about an ombudsman being a useful position to help people 
understand what the legal and regulatory requirements are, 
because EPA has established a small business ombudsman. I 
believe that position has been established for some years now.
    Now, it may be that in 1988, when these violations 
occurred, that position had not been established. I am not 
sure. I will have to look at when we established that, but we 
do have a small business ombudsman.
    Mr. Burton. OK. Let me just followup on that. If a person 
of foreign descent like Mr. Pozsgai has a problem, are they 
informed that there is an ombudsman they can go to now or is 
this something they are just supposed to figure out for 
themselves? Because I think if there is a legal question or a 
problem, in addition to other things that they are informed 
about, they ought to be informed that there is a place they can 
go without hiring private counsel that's going to cost them an 
arm and a leg, within the governmental process, so they can sit 
down and understand the ramifications of the problems that they 
face instead of having to face incarceration and all of these 
other things.
    Did you have any comments?
    Mr. Kucinich. Yes, Mr. Chairman. I have some questions.
    I want to welcome the witnesses and thank you for serving 
our country in your respective capacities.
    Some questions for Mr. Davis. During the first panel, we 
heard concerns that applicants don't have the resources to go 
up against the Corps when they disagree with Corps decisions. 
However, my understanding is that citizens who are negatively 
impacted by a Corps decision to grant an application have no 
recourse at all.
    Now, isn't it true that the applicant can appeal a decision 
to deny a permit, but neighbors who might be flooded because of 
the loss of wetlands have no right to appeal the Corps decision 
to grant an application?
    Mr. Davis. Congressman, it is true. We were very concerned, 
as we put together the President's wetlands plan, that 
landowners who had permits denied or jurisdictional 
determinations that they disagreed with had no recourse short 
of going to Federal court, which we know is time-consuming and 
very expensive. So we have established an administrative 
appeals process for individuals who have permits denied, 
individuals who have permit conditions imposed that they 
disagree with, and individuals who disagree with jurisdictional 
wetlands determinations.
    It is true that this appeals process does not extend to 
third parties who would challenge the issuance of a permit. We 
debated that and concluded that we couldn't do that at this 
time.
    Third parties are allowed to participate in the appeal 
process, however. If a permit is denied and the applicant 
appeals that, third parties can participate in that process.
    Mr. Kucinich. Thank you. Now, either panelist. Ms. Andria 
testified about the manner in which some developers have beat 
the system. Some applied for permits in a piecemeal fashion. 
Others mischaracterized their needs. Yet these developers 
continue to obtain permits from the Corps and successfully 
develop their sites. Would you comment on this?
    Mr. Davis. I am not familiar with the particular case that 
Ms. Andria mentioned. We will certainly look----
    Mr. Kucinich. Just generally, just generally what about 
this idea of developers obtaining permits, developing their 
sites even though they mischaracterize their needs?
    Mr. Davis. We don't see that as a systemic problem 
throughout the program. We think most developers and applicants 
are honest with us and they correctly provide the information 
that we need to do a good evaluation.
    Mr. Kucinich. Mr. Wayland.
    Mr. Wayland. I think as a general matter we do, through the 
404(b)(1) guidelines that EPA has developed in consultation 
with the Corps, call for applications that address full and 
complete projects. It is the case that sometimes someone will 
expand their business and then at a later stage, when 
circumstances change, undertake different or additional 
activities and we can't completely rule that out, but I believe 
the Corps routinely considers what the prior permit history has 
been on a particular parcel when examining new permits.
    Mr. Kucinich. OK. A followup now. Do either of you believe 
that private property rights of landowners where negatively 
affected by development should be considered when developing 
and implementing wetlands policy?
    Mr. Davis. Yes, we absolutely do, and we think the property 
rights debate is, in fact, about everybody's property rights.
    Mr. Kucinich. Mr. Wayland.
    Mr. Wayland. I concur.
    Mr. Kucinich. Do you believe there is room for improvement 
in this area?
    Mr. Davis. Yes, I think so.
    Mr. Wayland. We continually strive to improve the program. 
We are continuing to supplement the actions that were taken at 
the time of the 1993 wetlands plan with additional efforts to 
improve our programs, and I think we are enjoying considerable 
success in doing that.
    Mr. Kucinich. Now earlier, I mentioned Ohio's no-net-loss 
policy which resulted in an 18 percent loss of wetlands between 
1990 and 1995. What has been done since 1995 and what do you 
propose to do in the future to ensure that a no-net-loss policy 
is implemented successfully?
    Mr. Davis. We continue to make improvements in this program 
both from the perspective of protecting the resources and 
protecting the landowner, the applicants, who have had to apply 
for permits. I think we have done a fair amount since 1995. One 
of the most important things that we have done is modify our 
nationwide general permit program to tighten up, if you will, 
those things that are allowed to occur under the general permit 
program.
    Mr. Kucinich. Now the study also found that the Ohio 
wetland program seemed to be biased toward deepwater wetlands 
that house game species like ducks and fish, while shallow 
water wetlands were being destroyed. Do you believe that both 
types of wetlands are important, and what policies are in place 
to prevent any kind of a bias?
    Mr. Davis. Our policy is to replicate, to the best we can, 
the functions that are lost, and we ought to be first looking 
toward what we call in-kind mitigation. If we have a marsh, we 
ought to create or restore a marsh for each wetland type. 
That's our first choice. Sometimes there are exceptions where 
it is actually better for the environment to deviate from that 
policy.
    Mr. Kucinich. Well, I also discussed a study--if I may, 
Madam Chair, ask one more question. I also discussed a study 
where the EPA found that the wetlands that had been created as 
part of a developer's attempt to mitigate impacts are not as 
useful as the wetlands they replaced. Would you care to, either 
of you, comment on that, Mr. Wayland?
    Mr. Wayland. Mr. Kucinich, I think one of the Achilles' 
heels of the regulatory program has been the lack of success in 
wetland mitigation. The National Academy of Sciences now has 
underway a study to look at mitigation policies and practices, 
to look in particular at mitigation banking which has been the 
source of some controversy. But I think that the mitigation 
banking policy of the agencies and the significant increase in 
this market-based approach to wetland restoration has, in 
fact--and I don't want to prejudge the National Academy's 
work--but I think there are some good indications to date that 
mitigation banking, because professionals undertake it, rather 
than people who may be trying to deal with a single project, 
enjoys a much greater rate of success in replicating the 
functions and values of wetlands that have been lost through 
permitting.
    Mr. Kucinich. Thank you, Mr. Wayland.
    Thank you, Madam Chair. I appreciate it.
    Mrs. Chenoweth-Hage [presiding]. Mr. Sanford, you are 
recognized.
    Mr. Sanford. I thank the chairwoman. I guess my first 
question would be to you, Mr. Davis. You may have heard my 
comments earlier on impoundments on the coast of South 
Carolina. Would you consider them to be wetlands or 
nonwetlands?
    Mr. Davis. Congressman, you have asked a very fact-specific 
question. I think there is--it could be either one, depending 
on the actual facts of that particular case. If you have an 
issue, we can certainly look into it and get back to you for 
the record and get back to you individually.
    Mr. Sanford. Let's think about what you just said. It could 
be either one. I mean, that fundamentally is what this hearing 
is all about. In other words, in a lot of different 
circumstances the same situation can be looked upon by one 
regulator and viewed one way, and by another regulator and 
viewed the other way.
    Mr. Davis. Congressman, that's not what I said. That's not 
what I said. What I said was----
    Mr. Sanders. Well, you said either one; it could be either 
one.
    Mr. Davis. Well, what I--I do not have the facts before me, 
the data that I would need, to make that determination. I 
believe----
    Mr. Sanders. Well, the facts would change based on what the 
landowner chose to do with his trunk. The trunk controls the 
water flow in or out of an impoundment. He could flood it with 
saltwater. He could drain it and keep it with a one-way flap 
forever dry and literally grow pine trees in there. He could 
flood it with saltwater, fresh water. In other words, you 
could--because it is a man-made environment, it could be any of 
the above, but oddly enough these things are regulated as 
wetlands by the Corps currently.
    I think that that is a very weird position for the Corps to 
be in because it is all based on a use that could literally 
change from week to week.
    Second, I guess I would say I guess to Mr. Wayland--it is a 
pleasure to see you again--first of all I would say you didn't 
really answer the chairman's question. When he asked in this 
particular situation did you know of a bigger penalty, you said 
you thought there certainly were, but----
    Mr. Wayland. There are larger money penalties under the 
Clean Water Act, substantially larger.
    Mr. Sanders. I understand. In other words, you could have 
Valdez with Exxon, but I am saying in a private landowner case 
who would be bigger?
    Mr. Wayland. The number of wetland criminal actions is a 
very small number, spanning many, many years.
    Mr. Sanders. I am just asking you----
    Mr. Wayland. You are testing my recollection beyond its 
limits to ask me about things that have happened in the history 
of the program.
    Mr. Sanders. His question was did you know of a bigger 
case. That's all I am asking.
    Mr. Wayland. No.
    Mr. Sanford. OK. Second, I think what you said in your 
testimony unfortunately was not true, in that if you look on 
page 5 of your testimony it says, Overview of Clean Water Act, 
Section 404, ``Because they are waters of the United States,'' 
you begin your phrase with, ``all the protections applicable to 
rivers, lakes and estuaries established,'' and so on. Could you 
show me the water on some of these wetlands that you referred 
to in this paragraph?
    Mr. Wayland. All wetlands have to be saturated or inundated 
for a period of time sufficient to allow the growth of a 
preponderance of wetland vegetation, and there needs to be the 
presence of hydric soil. So it is a time----
    Mr. Sanford. No, no, that's not true. It could be hydric 
soils solely.
    Mr. Wayland. It is a three-part test in our regulations for 
the presence of a wetland.
    Mr. Sanford. One of which could be hydric soil solely?
    Mr. Wayland. No, that is not the case. That is not the 
case.
    Mr. Sanford. You are saying all three have to be 
determined; it couldn't be one of the three?
    Mr. Wayland. That's correct.
    Mr. Sanford. All three?
    Mr. Wayland. All of the parameters; not just one as the 
basis for making a jurisdictional determination.
    Mr. Sanford. All three.
    Mr. Davis. Congressman, may I answer?
    Mr. Sanford. How many days a year would water have to be 
covered--cover the land?
    Mr. Wayland. It is a percentage of the growing season that 
is specific to the region of the country that you are looking 
at.
    Mr. Sanford. So how many days?
    Mr. Wayland. So the growing seasons vary, and the 
delineation manual calls for the presence of water through 
saturation or inundation for a percentage of the growing 
season.
    Mr. Sanford. So how many days would the land have to be 
covered?
    Mr. Davis. Five to 12\1/2\ percent of the growing season. 
So it varies from the growing season. In the Southeast, it 
would be a longer period than it would be in the North.
    Mr. Sanford. I am sorry? Say again.
    Mr. Davis. It is 5 to 12\1/2\ percent of the growing 
season. So it would vary. In the Southeast where the growing 
season is long, the requirement would be longer. In the 
Northeast where it is colder and the growing season is shorter, 
it would be shorter.
    Let me make a point, Congressman.
    Mr. Sanders. Let me just come back. I just found out that I 
was right. In other words, we are both right on our query. If 
it is an undisturbed wetland, you go to the second parameter, 
but if it was a--if it is a disturbed wetland, it is a 
different check. In other words, you have a number of different 
things--tools, if you will, that you can use in determining 
wetland. But it could well be my case wherein you could never 
see any water on the land whatsoever but based on vegetative 
content have it classified as a wetland.
    Yes? I am sorry.
    Mr. Davis. Along those same lines, Congressman, you are 
absolutely right. We use what we call secondary indicators, and 
it is not necessary to actually see water every time you are 
out there doing a delineation.
    Now, we could do that but it would force us to wait until 
the water is there, and applicants wouldn't like that.
    Mr. Sanford. But wouldn't you admit, then, that very 
problem causes some real problems with unsophisticated 
landowners in determining whether or not they have a wetland?
    Mr. Davis. I think there is some problem. There have been 
problems in the past, about our general understanding of 
wetlands, what they are, and the importance of wetlands. If you 
look at well-known wetlands like the Everglades in south 
Florida that we are trying to restore, parts of the Everglades 
are completely dry at times, dry to the extent that they 
actually burn. The Dismal Swamp in south Virginia is another 
example, many parts of the Dismal Swamp that everybody 
recognizes as a wetland, you could drive a tractor across that.
    Mr. Sanford. I readily acknowledge those are wetlands. I 
will be the first to acknowledge that. I think that's a very 
different animal than a quarter-acre wetland in a pine barren 
in South Carolina.
    Mr. Davis. If you go to the Midwest where the prairie 
potholes are, these are tenth-acre, quarter-acre, half-acre, 1-
acre, 2-acre potholes that are actually farmed many times of 
the year. They are dusty many times of the year, but they also 
provide almost the sole breeding grounds for our waterfowl in 
this country.
    Mr. Sanford. I see I am out of time. My one last question 
is smart growth; would you agree that our current wetland 
policy prevents smart growth?
    Mr. Davis. No.
    Mr. Wayland. No.
    Mr. Sanford. Why?
    Mr. Davis. Actually----
    Mr. Sanford. You would admit, then, based on current 
environmental policy you could never build a Charleston, which 
Andres Duany would argue is smart growth?
    Mr. Davis. Congressman, I disagree. I think the statistics 
that I pointed to in this chart indicates----
    Mr. Sanford. Wait, wait, wait. Do you think you could 
currently get permitted a Charleston, SC, on that same 
geography?
    Mr. Davis. I don't know. Again, it would be a very fact-
specific situation.
    Mr. Sanford. I am sorry. I am burning through time.
    Mrs. Chenoweth-Hage. Thank you, Mr. Sanford.
    Mr. McHugh, you are recognized.
    Mr. McHugh. Thank you, Madam Chair.
    Gentlemen, a couple of quick questions. You mentioned your 
three-part test. Many States, under their wetland regulations, 
have minimal-size standards. The State of New York, I believe, 
is about 12.4 acres. Do you have a similar size qualification 
or criteria by which you decide whether or not to even go in 
and to assess a program or not? Does size matter?
    Mr. Davis. Yes, Congressman, we do. As indicated on this 
graphic, about 90 percent of the activities are covered by a 
general permit. These are very minor things, and if they are 
under a certain size they go forward with little or no review 
from the Corps.
    Mr. McHugh. What is that size?
    Mr. Davis. Right now it is a half acre.
    Mr. McHugh. Let me ask you, do you have a standard by which 
you set your regulatory timeframe? In other words, do you have 
a criteria of, well, we shall process a permit in so many 
months? And if so, what is that?
    Mr. Davis. We have some statutory requirements that require 
us, for example, to issue a public notice within 15 days of a 
complete application. I think we generally meet that. We also 
have internal, within the Corps, goals that we try to meet in 
evaluating permits. I think it is 100--120 days; 120 days is 
our goal. But that 120-day goal is for those detailed 
individual permits. That's not the big purple piece of this pie 
that we are looking at here. That's that little----
    Mr. McHugh. I am concerned about the more difficult cases. 
I understand that.
    Mr. Davis. Right. That's--120 days is our goal. The average 
time is 118 days. That's what we did in 1999.
    Mr. McHugh. Also, help me to understand the process 
whereby--and I am thinking of a specific case in my district--
before the permit would be issued, the permit applicant was 
required to make a $60,000 donation to the Fish and Wildlife 
Service to some unnamed project for environmental restoration 
offsite, what is that about?
    Mr. Davis. I am not familiar with that.
    Mr. McHugh. I see Mr. Wayland is nodding.
    Mr. Wayland. Well, I think this could be, and I don't know 
the facts in that case----
    Mr. McHugh. I understand.
    Mr. Wayland [continuing]. So I have to put that caveat out, 
but some States and some Corps districts permit a form of 
mitigation known as ``in-lieu fee mitigation,'' where the 
impacts are very small and rather than undertaking direct 
mitigation onsite or offsite, the applicant can, in effect, buy 
into an ongoing mitigation project.
    Now, the mitigation banking approach, which is guided by 
much clearer interagency policy, draws a direct link between 
the wetlands that are being permitted for destruction and the 
wetlands that are being created or restored for mitigation.
    In-lieu fee lacks that direct sort of one-for-one 
connection, and as a result, a number of people, including 
mitigation bankers, question whether it should be permitted, 
should be authorized. That's one of the issues being examined 
in the National Academy of Sciences study that I referred to 
earlier.
    Mr. McHugh. I appreciate that. The reason I am asking, 
rather than sit here and vent--which I could do, because we 
have a very specific case that occurred in my district 
involving Wal-Mart, a very savvy organization with what I think 
most Americans would consider deep pockets. They had a project 
to establish, and ultimately did establish, a processing center 
in my district, where the unemployment rate is often double 
digits, that eventually created over 200 jobs.
    That project, the application for wetlands ultimately came 
down to two-tenths of an acre. It took 10 months to process and 
it cost them $3 million in processing fees additional to the 
project, and they were required, because----
    Mrs. Chenoweth-Hage. Will the gentleman yield?
    Mr. McHugh. I would like to finish this one----
    Mrs. Chenoweth-Hage. I just wanted to let you know, we have 
3 minutes left on the vote.
    Mr. McHugh. I will be finished in 20 seconds.
    Mrs. Chenoweth-Hage. Thank you.
    Mr. McHugh. At the end of the day, and I know this to be a 
fact because we negotiated it, based on nothing to do with the 
wetlands remediation program or the permit, they were forced in 
what I think can fairly be described as an administrative 
bribe, to pay $60,000 to an unnamed project for unnamed 
purposes.
    I would like to send you gentlemen the records of this. The 
county involved did a very extensive report that they shared 
with me, a lot of time and effort, and I would appreciate your 
responding to it because I think it illustrates the worst of 
this program that I take you gentlemen at your word that you 
want to make better, and I think this is what we need to look 
at. Can I count on you to do that?
    Mr. Davis. Yes, Congressman.
    Mr. McHugh. Thank you, gentleman.
    Thank you, Madam Chair.
    Mrs. Chenoweth-Hage. We will now recess the committee 
subject to the call of the Chair. We will be back as soon as we 
finish our votes. Thank you.
    [Recess.]
    Mrs. Chenoweth-Hage. We will now reconvene the hearing.
    I am a little bit out of breath. I just ran to the Capitol 
and back. So bear with me here.
    Mr. Wayland, I wanted to do just one followup question to 
Mr. Sanford's questions with regards to permitting on nonpoint 
sources. Isn't it true, though, that EPA has exempted the 
Forest Service and government lands from nonpoint source 
pollution?
    Mr. Wayland. Actually, what we did in our final TMDL rule 
was delete the provisions that had been proposed that would 
have potentially involved permitting for either the forest--
either activities on Forest Service lands or activities on 
private lands.
    So, in fact, the very interesting meeting that Congressman 
Sanford and I had had, as part of its upshot, a decision by the 
agency that we would not apply those permitting requirements to 
public--to activities on public or private forest lands.
    Mrs. Chenoweth-Hage. My concern is that we have suffered 
millions of board feet of fire out in the West and it is 
creating a tremendous sediment load in our streams and it just 
does seem inconsistent that forests on the Federal lands are 
exempted from stream pollution while----
    Mr. Wayland. We thought that was a pretty persuasive 
argument and decided we wouldn't go that way.
    Mrs. Chenoweth-Hage. Good. Thank you.
    Mr. Davis, I hope that what you reflected in your testimony 
just now is a real change and a new face for the Corps of 
Engineers and a new face for the EPA. The reason we are holding 
this hearing is that we are afraid the old face still looms, 
especially in cases like the Pozsgai case.
    Now, when our majority staff, our staff counsel, called the 
legislative liaison for the Army Corps, he said he wasn't 
excited about bringing down people from Philadelphia. He said 
that it might cost too much. I wonder, Mr. Davis, if you might 
have all the people that are with you from Washington or from 
Pennsylvania please stand.
    Mr. Davis. I would certainly be glad to do that. We 
actually do have somebody from the Corps' Philadelphia District 
and we have folks from the Corps of Engineers headquarters as 
well. They can raise their hand or stand if they want.
    Mrs. Chenoweth-Hage. I wonder if you would all please 
stand.
    Now, I wonder, Mr. Wayland, if you would ask all of those 
who are from your office to please stand.
    Mr. Wayland. Anybody who is with the Environmental 
Protection Agency?
    Mrs. Chenoweth-Hage. Yes. OK. I wonder how much this costs. 
In fact, I wonder, gentlemen, if both of you could produce for 
the record how much the entire Pozsgai costs have been from the 
beginning of your work with them until now. Would you please 
produce that for the record, the costs for both the Army Corps 
of Engineers and for the EPA?
    Mr. Davis. Madam Chairwoman, we will do it to the best of 
our ability. I don't know what bookkeeping procedures are in 
place to track that sort of thing but to the extent that we 
have this information we will certainly provide it to you.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T2734.126
    
    Mrs. Chenoweth-Hage. Mr. Davis, well, before I go on to 
that, I wonder if all of the lawyers presently representing Mr. 
Pozsgai would please stand.
    You know, there is the picture, and I think that it was 
testified to that this gentleman works for the Pozsgais on a 
pro bono basis. He also has a law firm to run. That's the 
reason for the hearing today, the full force of the government 
coming down on one individual and not just Mr. Pozsgai but 
other individuals who have to suffer under trying to understand 
the plethora of laws as well as regulations.
    You heard it testified to that Mr. Pozsgai was sentenced to 
3 years, of which he spent 1\1/2\ years in the Federal 
penitentiary. He was initially subjected to a fine of $202,000, 
which was subsequently reduced. But I would like to put in the 
record a number of other fines that the EPA has imposed on 
companies.
    Occidental Chemical Corp., October 13, 1998, they were 
fined for storing methylene chloride, chloroform and carbon 
tetrachloride in open containers; storing carbon tetrachloride 
and chloroform sump waste outdoors and failing to properly 
track manifests. Failing to properly track manifests is huge, 
as well as the storage. They were fined $244,000. That's 
Occidental Chemical Co. That is just a little bit more than 
what Mr. Pozsgai was fined for cleaning up a dump.
    Vacation Charters Limited out of Kidder, PA, has agreed to 
pay a fine of $10,000; Catenary Coal Co. for unlawful 
discharges of blackwater will pay a penalty of $5,000; Bobcat 
Oil and Gas, Inc., will pay a fine of $6,000, and it goes on 
and on.
    Without objection, I would like to enter these into the 
record because it precisely points out the reason why we are 
here.
    [The information referred to follows:]

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    Mrs. Chenoweth-Hage. We were supposed to be through with 
this hearing at 2 p.m.
    Mr. Burton. If the gentlelady would yield to me just for a 
minute?
    Mrs. Chenoweth-Hage. Yes, Mr. Chairman.
    Mr. Burton. I am just going to take a second because I want 
you to finish whatever questions you have. I would just like to 
say to the people both from the Corps of Engineers and the EPA, 
and the Justice Department if anyone is here, and that is that 
individual citizens don't understand government. They don't 
understand regulations.
    Even I, as a Member of the Congress of the United States, 
find that many things that I am supposed to comply with I am 
not familiar with. Therefore, there ought to be an education 
process before we start legal action.
    I understand Mr. Pozsgai, when people came on his property, 
he said get off and he forced them off and he may have even 
threatened them. But, you know, I would have done the same 
thing. People come on my property, I have a sign that says no 
trespassing. We have had death threats and all kinds of things, 
which you might well imagine. So if anybody comes on my 
property, I am going to run them off. That doesn't necessarily 
mean that I am doing something that's wrong.
    Yet that was one of the reasons why some of this action was 
taken against him. So I think there needs to be a little more 
concern about the average citizen and their limited knowledge 
of these things.
    Second, I think there needs to be an explanation process. 
And, third, if there is a strong difference of opinion, you 
really need to have some ombudsman for them because, as Helen 
Chenoweth, Congresswoman Chenoweth has just pointed out, you 
have unlimited resourcing to go after somebody. You have the 
power of the government. You have the power of the taxes that 
are collected to go after anybody you want, and it could be you 
someday for some other reason. You are citizens as well.
    And you go after this guy and he doesn't have an attorney. 
He hires somebody who is inebriated half the time. He goes into 
the courtroom, almost gets disbarred. He doesn't know. He 
doesn't mess with lawyers very much. And so he needs to have 
some concern.
    I really believe if this had been handled a different way 
it might have been resolved in a much more agreeable manner. So 
all I would like to say is in the future, and please tell your 
leaders--I will convey this myself to the head of the EPA; I 
talk to her on a regular basis, and I will be glad to do that 
with the head of the Army Corps of Engineers, I will make sure 
we do that--I believe that there ought to be an office of 
ombudsman for each one of your agencies and people who are 
having problems legally with your agencies ought to be told if 
you don't understand, we will explain it; and if you still have 
a problem, here is the number for the ombudsman; he represents 
the individual citizen and you can go to him or her and talk to 
them about that.
    If you had that, I think it would make your jobs easier. It 
would probably cut down on your overall expenses and you would 
get these things resolved without major problems like this.
    I am kind of angry because of the way this gentleman was 
treated, especially since I remember back in the 1956 when the 
Hungarian uprising took place and what they had to go through, 
and I know these people have fled communism, lived in what we 
called the captive nations, had to go through things for years 
and years and years. And all I would like to say is when people 
come here seeking freedom and they look at that Statue of 
Liberty, they think heaven has arrived, I am here. And then 
they go through something like this, and they think, man, what 
did I leave that other place for? It is just as bad.
    So all I am saying is be a little more concerned about 
these people and try to have someplace where they can get 
answers and at least some legal answers through an ombudsman so 
they don't have to go through all the things that he went 
through.
    With that, Madam Chairman, thank you for giving me this 
time.
    Mrs. Chenoweth-Hage. Thank you, Mr. Chairman.
    Mr. Burton. I also have some questions I would like to 
submit to you if you would answer them for the record.
    Mrs. Chenoweth-Hage. And I have numerous questions I will 
submit to you for responses.
    I do want to say, Mr. Davis, that your testimony 
represented something unlike what we have to face in the real 
world. In part, the fact is that the permitting time you 
testified to was 18 days. In the real world, based on a study 
that was submitted to Senator Baucus and Senator Chafee, the 
average lead-in and lead-out time is 262 days.
    I am just saying that, again, this just points out the 
confusion, the frustration, that individuals are feeling out 
there.
    I know that you are both probably husbands and fathers and 
uncles and, you know, you can see the human face on this whole 
thing. You are not just nameless, faceless people who have to 
run agencies.
    You heard the testimony that was presented here and I would 
just ask you, as a member of this body, that you personally 
give this case your attention, and cases like this. This should 
be over. This is not good for government. This is not good for 
your agencies. It discourages the grass-roots out there.
    I join the Pozsgais in saying what can we do to make this 
end? I think it is in your hands at your level, and I thank you 
very much for being here. Like I say, I do have numerous 
questions that I wanted to ask you but we must be out of this 
room. So I will submit them for the record, and for your 
answers the record will remain open for 10 working days. Should 
you wish to amend or add to your testimony, you are welcome to 
do so.
    With that, I thank you; and I will be staying in touch with 
you personally. Mr. Davis.
    Mr. Davis. Madam Chairwoman, could we perhaps maybe make 
one point? I wanted to clarify for the record that the 
individuals with me today from the Army and the Army Corps of 
Engineers are not necessarily related to Mr. Pozsgai's case; no 
more than a couple of those. We were invited to come testify 
about Federal wetlands policies so I brought staff that are 
experts in those areas, and so it is not illustrative or 
indicative of Mr. Pozsgai's case and the Federal effort on that 
case.
    Mr. Burton. If the gentlelady would yield. But I have 
worked with Janet Reno and the Justice Department, as you 
probably are well aware, for a long time and they have 
thousands of attorneys. All I am saying is that a lot of this 
could be eliminated if you had an ombudsman in place they could 
go.
    Mr. Davis. You raise some good points.
    Mrs. Chenoweth-Hage. Gentlemen, I thank you and this 
hearing is adjourned.
    [Whereupon, at 2:20 p.m., the committee was adjourned.]
    [Note.--The publication entitled, ``The Impact of 
Individual 404 Permits on Ohio Wetlands 1990-1995,'' may be 
found in committee files.]
    [Additional information submitted for the hearing record 
follows:]

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