[Senate Hearing 107-1023]
[From the U.S. Government Publishing Office]
S. Hrg. 107-1023
NOMINATION OF DONALD L. EVANS, TO BE
SECRETARY OF THE DEPARTMENT
OF COMMERCE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
JANUARY 4, 2001
__________
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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska
Virginia CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon BILL FRIST, Tennessee
MAX CLELAND, Georgia SAM BROWNBACK, Kansas
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
Mark Buse, Republican Staff Director
Ann Choiniere, Republican General Counsel
C O N T E N T S
----------
Page
Hearing held on January 4, 2001.................................. 1
Statement of Senator Brownback................................... 40
Prepared statement........................................... 40
Statement of Senator Burns....................................... 9
Prepared statement........................................... 10
Statement of Senator Cleland..................................... 13
Prepared statement........................................... 14
Statement of Senator Dorgan...................................... 12
Statement of Senator Hollings.................................... 1
Prepared statement........................................... 2
Statement of Senator Inouye...................................... 17
Prepared statement........................................... 17
Statement of Senator Kerry....................................... 7
Statement of Senator McCain...................................... 5
Prepared statement........................................... 7
Statement of Senator Rockefeller................................. 11
Statement of Senator Snowe....................................... 15
Statement of Senator Stevens..................................... 7
WITNESSES
Gramm, Hon. Phil, U.S Senator from Texas......................... 17
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas.............. 18
Prepared statement........................................... 19
Wyden, Hon. Ron, U.S. Senator from Oregon........................ 38
Evans, Donald L., nominee to be Secretary of the Department of
Commerce....................................................... 20
Prepared statement........................................... 22
Appendix
Frist, Hon. Bill, prepared statement............................. 44
Biographical and Financial Information Submitted by Nominee to:
Donald L.Evans............................................... 57
Response to written questions submitted by Hon. John McCain to:
Donald L. Evans.............................................. 44
Response to written questions submitted by Hon. Max Cleland to:
Donald L. Evans.............................................. 53
NOMINATION OF DONALD L. EVANS, TO BE
SECRETARY OF THE DEPARTMENT OF COMMERCE
----------
THURSDAY, JANUARY 4, 2001
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m. in room
SR-253, Russell Senate Office Building, Hon. Ernest F.
Hollings, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. ERNEST F. HOLLINGS,
U.S. SENATOR FROM SOUTH CAROLINA
Senator Hollings. The hearing will come to order. Let me
first thank our regular Chairman, Senator McCain, for his
leadership, in showing that a 50/50 divided Senate can work
together as a unit.
We have always operated in a bipartisan fashion. And our
regular Chairman has been outgoing in wanting to move things
along and get things done. And that is the whole idea here
today. It is not to get into partisan struggle to see who is on
top and who can get the most publicity.
But welcome to you very much, Mr. Evans. I understand your
wife Susan is with us this morning. Would she please stand? We
want to recognize her and welcome her, too.
First, we do not have the Office of Government Ethics
report from the financial statement you submitted. We do not
have the FBI report either. And it could be that some of the
predictive Members on both sides who have yet to be announced
next week would want to be able to meet with you, Mr. Evans,
and ask some questions, particularly about the census. And we
will find then if Chairman McCain at that time in the week of
January 22 wants to hold a further hearing before we move to
confirmation in this Committee. But Chairman McCain will make
that decision, and we will be glad to support him.
Otherwise, let me say this. I have a five minute
opportunity for an opening statement. I want to set an example.
I will put my prepared statement in the record without
objection.
Before yielding to Chairman McCain as mentioned, I have cut
my opening statement down to respect our time limits and
because I have had the opportunity to meet with Mr. Evans to go
over the matter of manufacturing. We are losing our industrial
backbone. We have lost 100,000 manufacturing jobs just in this
past year.
I have expressed my interest in the oceans. We have talked
about technology. And there is one other thing that we did not
get to touch upon that I ought to cover here in an opening
statement. And that is the trade opportunities that we have if
we could only enforce our trade laws.
Specifically, we welcome our Texas Senators to make the
introduction.
Texas, and the entire nation, has an opportunity now with
NAFTA. We have got NAFTA. I opposed it. I am confident it has
not worked. But our job or opportunity is to make it work,
Senator Gramm. We have lost jobs. I have lost 40,100 textile
jobs alone since NAFTA in my little State of South Carolina.
But be that as it may, we have got a wonderful happening
down there in Vincente Fox's election. And rather than to pass
through money and the Wall Street bankers operating the policy
toward Mexico, we can develop, as President Fox has indicated,
a common market. And Secretary Evans can take the leadership on
that.
The Europeans long since have found that the free market
approach did not work. They taxed themselves some $5 billion
before they allowed Greece and Portugal to come into the Common
Market.
I noticed from the statements made by President Fox and his
appointment of Jorge. Casteneda that they intend to rebuild the
infrastructure. Before you can really have free trade, you've
got to have a common market. You've got to have the entities.
You've got to have not only free elections, but labor rights,
property rights, a respected judiciary. And they will need
financial help.
From this Committee's standpoint, I think we could support
that very, very strongly. Rather than sending money down to go
back to Wall Street, which has been the case over the many
years, we want to help build that infrastructure and really
solve that immigration, solve that drug problem, and bring up
their economy so that it is relatively competitive with ours.
Secretary Evans, you can take the lead in that. You have
got an individual interest in it, I am confident. So I want to
make sure that we not only enforce our trade laws, but we make
sure that they work. That one in NAFTA is not working now. It
is just an outpouring of manufacturing jobs down there because
we as politicians at this particular level say ``Before we open
up Evans manufacturing, you have got to have clean air, clean
water, Social Security, Medicare, Medicaid, plant closing,
parental leave, safe working place, safe machinery.'' All of
that goes into the cost of production, and they do not even
have a good minimum wage down there.
So let me yield to my distinguished Chairman here, Senator
McCain.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings,
U.S. Senator from South Carolina
We will convene the hearing on the nomination of Donald L. Evans to
be the Secretary of Commerce. First let me thank Mr. Evans for being
here today and the panel that will assemble shortly to introduce him.
Before we get started, I also want to acknowledge Mr. Evan's wife,
Susan who is in the audience.
I also want to thank Senator McCain for scheduling this hearing
today. He has demonstrated that a Senate divided equally between the
parties can work. The Commerce Committee has always operated in a
bipartisan fashion and Senator McCain has continued that tradition. The
incoming administration can learn from our experience here on the
Committee. The Republican Caucus and you Mr. Evans, as the Secretary of
Commerce, will need to work with Democrats to reach consensus on a
myriad of issues in order to be successful. This is the inescapable
truth we face. It is in our mutual interest to face it together. And as
we work together in this historical time where our political parties
are at virtual parity, there are several issues that are vitally
important to me that I want to discuss with you today. They include--
trade, NOAA, the Department's role in the promotion of technology and
the manner in which the census is conducted.
I. Trade
As you know, Secretary-designate Evans, I have often expressed
concern about creating and keeping manufacturing jobs in the United
States. In the last year alone, we have lost over 100,000 manufacturing
jobs.
For example, in my home state of South Carolina, we have lost
36,500 net manufacturing jobs since the implementation of NAFTA. Those
are jobs that pay better than many that we are now creating in the
service sector. They are jobs that held together families and
communities. They are jobs that did not require that people spend 4-
plus years in college.
How do we support these workers? By supporting and enforcing our
existing unfair trade laws. You are familiar with these laws because of
your experience in the energy industry. These laws are vitally
important because they protect U.S.-based manufacturing and the workers
in this industry. Their vigorous enforcement is a most important weapon
already at our disposal in protecting our manufacturing base. Moreover,
as this administration moves forward in its dealings with our foreign
trading partners, keep in mind the importance of these manufacturing
jobs and the people who work in these industries.
Second, I look forward to working with you on several important
legislative proposals. In the coming days, I will introduce legislation
that will consolidate all international trade functions in the
Department of Commerce. The current situation, which has trade
functions spread across various departments and agencies, has become
unworkable. Therefore, I will propose legislation to move the office of
the U.S. Trade Representative into the Commerce Department and to
abolish the ITC and transfer its functions to the Commerce Department
as well. Such consolidation will assist in developing a comprehensive
trade policy and in enforcing the U.S. unfair trade statutes and our
trading partners' international commitments.
I also look forward to working with you as we begin the process of
interacting with Vincente Fox, the new President of Mexico. As you
know, I opposed NAFTA and continue to believe that in its current
structure, it costs the United States more jobs that it creates.
However, with the changes in administrations in both the U.S. and
Mexico, the opportunity exists to create a true trading relationship in
a Common Market type arrangement, something that President Fox has, in
principle endorsed. I proposed just such an arrangement in 1993 during
the NAFTA debate and I look forward to reviving that proposal during
the coming year.
II. NOAA
Improving the science and management of our oceans and atmosphere
is at the heart of what the Department of Commerce does, and it has a
lot of work to do in the coming years. The National Oceanic and
Atmospheric Administration (NOAA) 2001 budget tops $2.6 billion--more
than half of the Commerce Department's total budget. This year's budget
increase reflects the profound need to improve our understanding of the
marine environment so decisions are based on scientific analysis and
not merely the push and pull of interest groups, particularly in the
areas of coastal protection, fisheries management and basic ocean
research. The NOAA Corps and fleet are critically important to
performing this function.
We also need a comprehensive review of our nation's ocean policy
similar to that conducted by the 1969 Commission on Marine Science,
Engineering, and Resources (called the ``Stratton Commission'' after
its chair, Dr. Julius T. Stratton). The recommendations of this first
commission led to the very creation of NOAA and most of the laws the
agency implements. Last year, after 30 years and a long 4-year struggle
here in Congress, we finally enacted legislation to give us a new Ocean
Policy Commission.
Enactment of the Oceans Act of 2000 sets into motion a process that
will have a profound influence on the way our oceans are managed for
decades to come. The statute charges the new commission with studying
and reevaluating the nation's laws and policies regarding the oceans
and coasts, including legal, budgetary, organizational, and
technological changes needed to tackle these increasingly complex
problems--from ``dead zones'' to hurricane planning. Unfortunately,
getting our oceans ``house'' in order at this point can't prevent some
disasters.
Last year's high profile conflict over protection of Steller's sea
lions in Alaska is a perfect example of our need to reevaluate our
ocean law and policy. For over a decade, while fishing pressure has
increased as a result of rapidly improving technology, our information
on species such as the Steller's sea lion and the Bering Sea ecosystem
has been stagnant--despite the existence of new tools to close the gap.
The underlying legal conflicts and profoundly imbalanced investment of
time and money long ago, set the Magnuson-Stevens Act and the
Endangered Species Act on a collision course. In 2000, the scene was a
Federal court in Seattle, but it is hitting Hawaii now, and is headed
for every other coastal state, including my home State of South
Carolina. We are doing our best to work these problems out right now,
but we all know that prevention is worth an ounce of cure!
One thing is completely clear--if there was a need for the Stratton
Commission in 1969, there is an even greater need for a new commission
now. Just as before, we will need to appoint commissioners of national
prestigious stature, who have the vision, integrity, and creativity to
work toward new solutions, and the ability to make the public and
Congress understand, and embrace, the need for such solutions. Thus, we
will need to consider individuals with broad expertise in problem-
solving as well as those well versed in ocean, atmospheric, and coastal
issues. Ocean issues today are technically and biologically more
complex than ever and require thoughtful, experienced, and innovative
members who can work together to think ``outside the box.'' We have got
to get ahead of the curve again, and I look to both the new
administration and Congress to move the nation's ocean policy into the
new millennium. We have the tools, the brains, and the money to do it
right, but we will need the right people, and I look forward to working
with you closely to ensure it happens.
III. Technology
The National Institute of Standards and Technology (NIST)
represents the core of the Department's technology administration. As
NIST, formerly the Bureau of Standards, celebrates its 100th
anniversary, its mission--to work with industry to develop and apply
technology, measurements, and standards--is more relevant than ever.
The NIST laboratories maintain fundamental weights and measures and
provide technical services that allow industry and others to utilize
these measurements. For example, the NIST laboratories help industry
and government ensure accuracy, consistency, and quality in a range of
commercial and industrial products or processes. In addition, the NIST
labs provide technical support for American industry representatives
participating in international negotiations on product standards. The
Department of Commerce estimates that standards are an integral portion
of about $150 billion in U.S. exports and serve as barriers to trade
for an additional $20 billion to $40 billion of exports. The excellent
work of the Measurements and Standards Laboratories can help U.S.
industry prevent foreign standards from becoming non-tariff trade
barriers used against U.S. products.
NIST is also helping U.S. industry stay competitive for the future
by funding the Advanced Technology Program (ATP) to develop the next
generation of breakthrough technologies in advance of its foreign
competitors. ATP encourages companies to undertake initial high-risk
research that promises significant widespread economic benefits,
although the program does not support product development.
According to a forecast by the Battelle Memorial Institute, U.S.
companies plan to slow the growth of spending on research and
development in 2001. You and I both know that the first thing to go
will be the fundamental long-term R&D projects and only those projects
that will pay off in the next few quarters will survive. As industry
continues to focus more of its R&D on near term product development,
there will be fewer private sources of support for the type of
fundamental, enabling technology R&D that ATP supports. At the same
time, Federal R&D funding--as a percentage of overall R&D spending is
declining. It has declined from 50 percent of total R&D funding in the
1990s to approximately 26 percent today. What does this mean? Simply
put, the advanced technology program is as necessary now as it was when
it was created under the leadership of former President George H.W.
Bush. The program's support from the Council on Competitiveness tells
you that ATP is needed so our industries can stay competitive in the
world market.
The proof is out there. Companies--over one-half of which are small
companies--are approaching the ATP to co-fund truly revolutionary
research, ranging from tissue engineering to advanced learning
technologies--new technical areas that are becoming increasingly
important to the U.S. economy and the quality of life of its citizens.
To date, ATP funded projects have enabled a 50-percent reduction in the
size of some computer memory chips, improvements in auto manufacturing
processes, and a faster, lower-cost DNA sequencing technology.
Small manufacturers--those with fewer than 500 employees--employ 1
in 10 American workers. Another NIST program, the Manufacturing
Extension Partnership or MEP, supports a network of locally run centers
which provide technical advice and consulting to the small
manufacturing companies in all 50 states and Puerto Rico. Many of these
firms lag behind foreign competitors in technology and operations,
leading larger American firms to look increasingly for offshore
suppliers. MEP-assisted companies surveyed report benefits of $8 for
every $1 that the Federal Government has invested in the MEP centers.
The Department of Commerce should continue to nurture MEP in the new
administration.
IV. Census
On the matter of the census, I am in strong support of statistical
sampling. I hope that the incoming administration will not interfere
with the authority and ability of the Census Bureau to make the final
determinations on the use of sampling. Former census directors,
including Republicans, support allowing the Census Bureau the freedom
to decide the counting methods and procedures without interference from
the administration or Commerce secretary.
It has now been more than 50 years since the discovery of
substantial inaccuracies in the census count, primarily based on severe
undercounting of minority groups, especially blacks and Hispanics. For
example in the 1990 census, it was discovered that 8.4 million
minorities were undercounted. Not only are such results unfortunate,
they are unacceptably tragic when proven methods exist to correct and
prevent such disparities. Four decades of sound research proven testing
have demonstrated that statistical sampling is the best and most
feasible method for ensuring greater accuracy in the census. This has
been affirmed by the diligent work of the Census Bureau, working in
coordination with the National Academy of Sciences and statistical
experts. Unfortunately some members on the other side of the aisle have
attempted to obstruct the use of sampling. Notably, until 1995, the
dispute on the issue rested on regional differences. Sampling was
supported not only be my able colleague, Mr. McCain, but by Mr. Newt
Gingrich himself. However, after the Republicans took over the House in
1995, through the leadership of Mr. Gingrich, they became vigorous
opponents of sampling--no doubt for political reasons. In fact, the
dispute eventually led to a lawsuit against the Census Bureau by the
House Republicans. The matter eventually was decided by the U.S.
Supreme Court. In a 5-4 decision, the Court ruled that statistical
sampling could not be used for state reapportionment, but could be used
for all other purposes, including redistricting. Some interpret the
decision as the majority asserting that sampling must be used for all
purposes except for apportionment regardless. The fact is that the
Court affirmed the use of sampling.
This issue entails many important facets. First and foremost it is
about justice and fairness. When groups and areas are undercounted, the
strength of their vote and representation are severely diluted; they
suffer economically based on decisions by banks and insurance companies
on the use of demographic data; and they suffer from reduced access to
government resources. This injustice ought not stand. This issue,
however, also is about the integrity of our government. Americans have
a right and obligation to be properly and accurately represented by
their government. Only the most accurate accounting can ensure this
principle is upheld.
I hope the secretary-designee will adhere to this principle and not
do anything to discourage or to disrupt the work of the Census Bureau
on this vitally serious matter.
STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
Senator McCain. Thank you, Mr. Chairman. I want to thank
you for your continued cooperation, including holding this
confirmation hearing. This is the first hearing of the
President's nominees for his cabinet. I think it is both
significant and traditional on your part that you would agree
to hold this hearing at this early time.
I would also like to mention that I was thinking this
morning this begins our fifth year of working together. Not a
single piece of legislation has gone through this Committee on
a party line basis. I appreciate that very much, and I look
forward to the opportunity in the next 2 years of working
together as we have in the past. Thank you again for convening
this hearing.
Welcome and congratulations to Mr. Evans and his family. In
his acceptance remarks following the President's nomination,
Mr. Evans laid out his vision and priorities for the Commerce
Department. They include the promotion of free enterprise,
first in America and then abroad, the free flow of capital, and
free and open competition. We look forward to hearing about Mr.
Evans' plans in more detail today.
At the outset, I want to applaud what I take to be Mr.
Evans' emphasis on free and fair trade. I am a firm believer in
free and open competition across international borders. We live
in a global economy. The rapid rise of the Internet is just one
of the more recent factors that makes a global economy an
undeniable reality.
Erecting and enforcing trade barriers between and among
individual countries is simply the wrong policy to pursue. Free
trade benefits its consumer beneficiaries. Established
procedures, rather than retaliatory trade actions, are
available to ensure trade is fair.
Turning to the Department's responsibility for the census,
we all know that the issue of statistical sampling is
controversial, and has been deemed unconstitutional strictly
for census counting purposes. I support a constitutional census
plan that accurately counts every person.
This issue is important to me as well as many other Members
of the Committee because traditional counting methods do not
provide an accurate count of the population in my home State of
Arizona, and Arizona citizens have suffered as a result. I look
forward to Mr. Evans' comments on his plans to ensure an
accurate census count, especially in those locations where
there have been documented undercounts in the past.
I would also like to mention another issue I raised with
Mr. Evans in private. I believe that one of the most important
missions of the Commerce Department is to remain politically
neutral. Commerce Secretaries Daley and Mineta made great
strides in reducing the political emphasis of the Department.
Mr. Evans, I hope and expect that you will strive to continue
and improve upon their efforts.
In the past, the reputation of the Commerce Department has
suffered. Charges include allegations that seats on foreign
trade missions were ``sold'' to major donors, and that Commerce
Department officials were directly involved in political
fundraising. Mr. Evans, your vigilance will be essential to
ensure that the Department remains true to its publicly stated
mission, rather than an agenda that merely promotes political
interests.
Congratulations on your nomination, Mr. Evans. Your
business experience speaks for itself as you face the
challenging management task ahead of you. Thank you for your
appearance today, and your willingness to serve. And
congratulations to your lovely wife and family.
I thank you, Mr. Chairman.
[The prepared statement of Senator McCain follows:]
Prepared Statement of Hon. John McCain,
U.S. Senator from Arizona
Mr. Chairman, thank you for convening this hearing. Welcome and
congratulations to Mr. Evans and his family.
In his acceptance remarks following the President's nomination, Mr.
Evans laid out his vision and priorities for the Commerce Department.
They include the promotion of free enterprise, first in America and
then abroad, the free-flow of capital, and free and open competition.
We look forward to hearing about Mr. Evans' plans in more detail today.
At the outset, however, I want to applaud what I take to be Mr.
Evans' emphasis on free and fair trade. I am a firm believer in free
and open competition across international borders. We live in a global
economy. The rapid rise of the Internet is just one of the more recent
factors that makes the global economy an undeniable reality.
Erecting and enforcing trade barriers between and among individual
countries is simply the wrong policy to pursue. Free trade benefits its
consumer beneficiaries. Established procedures, rather than retaliatory
trade actions, are available to ensure trade is fair.
Turning to the Department's responsibility for the census, we all
know that the issue of statistical sampling is controversial, and has
been deemed unconstitutional strictly for census counting purposes. I
support a constitutional census plan that accurately counts every
person.
This issue is important to me because traditional counting methods
do not provide an accurate count of the population in my home State of
Arizona, and Arizona's citizens have suffered as a result. I look
forward to Mr. Evans' comments on his plans to ensure an accurate
census count, especially in those locations where there have been
documented undercounts in the past.
I should also mention another issue I raised with Mr. Evans in
private. I believe that one of the most important missions of the
Commerce Department is to remain politically neutral. Commerce
Secretaries Daley and Mineta made great strides in reducing the
political emphasis at the Department. Mr. Evans, I hope and expect that
you will strive to continue and improve upon their efforts.
In the past, the reputation of the Commerce Department has
suffered. Charges include allegations that seats on foreign trade
missions were ``sold'' to major donors, and that Commerce Department
officials were directly involved in political fundraising. Mr. Evans,
your vigilance will be essential to ensure that the department remains
true to its publicly-stated mission, rather than an agenda that merely
promotes political interests.
Again, congratulations on your nomination, Mr. Evans. Your business
experience speaks for itself as you face the challenging management
task ahead of you. Thank you for your appearance today, and your
willingness to serve.
Senator Hollings. Thank you.
Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Good morning, Mr. Evans. I am anxious to
hear your statement. I am going to endorse the statements made
by our two chairmen here this morning, and welcome you to the
Committee. Thank you, very much.
Senator Hollings. Senator Hutchison, you are next on the
list. But do you want to wait until the introduction?
Senator Hutchison. Yes, thank you. I will.
Senator Hollings. Very good then.
Senator Kerry.
STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Kerry. Mr. Chairman, I do want to take a moment.
I appreciate what Senator Stevens has said. But I first
want to thank both you and Senator McCain for setting a
terrific example for the Senate. And I appreciate the fact that
this Committee is meeting today in a way that I hope paves the
way for people to understand, particularly when you look at the
last years of record of this Committee, how effective
bipartisanship cooperation can be. And I think it shows that no
one has anything to fear from some of the proposals that are on
the table for our cooperative effort.
Mr. Evans, thank you for taking time yesterday to meet and
I certainly congratulate you on your nomination. I have no
doubt at all about your capacity to perform one of the most
important things of the Commerce Department, which will be to
be a champion of American business and to openness. And that, I
think, will come extraordinarily naturally and effectively to
you.
I think a number of us, as we have expressed to you
privately, have some concerns in other areas. And I am
confident that you will address those in the course of the day.
But let me just say very quickly with respect to, No. 1, a
major issue is not just opening markets, but it is the
enforcement of the trade laws. And many people feel that
enforcement could, in fact, be stronger in a number of
respects, antidumping and otherwise. We certainly will look for
your leadership in that regard.
Second, on the census. Senator McCain just mentioned the
question of unconstitutionality. Let me just make it clear that
the Supreme Court only found unconstitutional aspects with
respect to the constitutional requirement of actual enumeration
for the apportionment of Congressional seats with respect to
between the States. It has not found any unconstitutionality,
nor is there any asserted intrastate with respect to the
apportionment within a state itself, nor particularly for the
apportionment of federal funds under Title I, Medicaid, the
poverty programs and so forth.
Regrettably, the last census was found to be some, I think
11 or 12 million people shy. And there was a significant gap,
therefore, in our ability to be able to deal with the problems
of the children that we do not want to leave behind. I know the
President-elect made one of his most significant promises in
this campaign not to leave any child behind.
But the question is obviously significant. How can you not
leave any child behind if you do not count all the children?
And significantly, we have found that large numbers of the
population in minority communities were not counted last time.
That very significantly effects the amount of money that can be
allocated to them and guarantee that they are, in fact, not
left behind.
I think there were 13 million people who were, in fact, not
counted last time according to the census professionals. You
will have the discretion to decide according to the
professional recommendations that will be made to you within
the department as to whether or not that sampling will be used
to properly reflect the true population of America. And given
the fact that that count is 13.2 percent higher than anybody
expected at 281 million people, there is the capacity to--I do
not know if it will be. But the professionals in the department
will shortly tell us if, in fact, there is a significant gap.
And clearly, we will have an enormous interest in your reaction
to that.
The final comment I would make is that you come from a
State where oil is of enormous significance and has made a
great contribution to this country. I come from a State, and
many of us on this Committee represent States where a very
significant part of our population lives adjacent to the coasts
of our nation. And the oceans are increasingly stressed,
increasingly polluted.
Forty percent of the fisheries are over-fished. And we have
been struggling, Senator Stevens and this Committee, with the
reauthorization of the Magnuson Act. You will have the
jurisdiction which we have increasingly strengthened your hand
to help guarantee the capacity of our fishing industry to
continue.
It is an enormous industry. We boast the second largest
commercial port in the country, with millions of dollars of
products, billions of dollars ultimately of gross domestic
product coming from it. And it is vital to us to have a
Commerce Secretary who will engage significantly in the
protection of those fisheries. And I simply want to highlight
that because it is of such increasing concern to so many of us
on the Committee and in the country. And I will have some
questions with respect to that. But I look forward to that
opportunity. And I thank the Chair.
Senator Hollings. Thank you.
Senator Burns.
STATEMENT OF HON. CONRAD BURNS,
U.S. SENATOR FROM MONTANA
Senator Burns. Good morning, Mr. Chairman. I guess I never
really got out of the habit of not addressing you as Mr.
Chairman. And by the way, over the holidays, from your remarks,
I had an opportunity to drive through South Carolina and North
Carolina. And that Highway 85 corridor looked pretty busy to
me, pretty prosperous down there. I think maybe I am going to
have to visit your State instead of listening to you.
I just want to welcome Mr. Evans and our two colleagues
this morning from Texas. And I am delighted on this
appointment, by the way, and our visit with Mr. Evans and to
welcome him here this morning. And I appreciate him stepping
forward for public service. We realize that public service is
sometimes not too keenly sought after among successful people
that we need to get into government and they bring a certain
amount of expertise to government that we certainly need. And
we need their knowledge and their judgment. So we appreciate
you doing this. And we know you do it out of a sacrifice.
My good friend from Arizona had it right. The new
technologies, in communications, in international trade, in e-
commerce and the information age, those new technologies do not
recognize national or international borders.
So the NTIA is a very important part of the Commerce
Department, and how we foresee new technologies into areas
where the majority of Americans can take advantage of those.
So that's a very important area.
Also, an important area that I just want to bring to your
attention is the National Institute of Standards and Technology
(NIST). NIST is sometimes overlooked, and I would like to
recognized that institution up the road here in Maryland. It
contributes so much to the commerce of this country and to
facilitate some new things.
And also, I want to follow up on the words of my friend
from Massachusetts. I don't know whether they under-counted 13
million people or not. But they got everybody in Montana. I
will guarantee you that.
Now, we have got a land mass of 184,000 square miles. That
is a pretty fair size pasture. And from Eureka, Montana to
Alzada, Montana, flying like a crow flies, maybe a little
straighter, it is further than it is from Chicago to
Washington, D.C. That is the land mass and you understand land
mass as far as the State is concerned and so does my friend
here on my right.
But we have got 902,000 people in Montana now. And we still
only have one Representative. And that is asking a lot whenever
we go through reapportionment. So whenever we talk about
recognizing population and the representation in this Congress,
I think I have got a pretty good argument.
But, welcome to this town. I call it 17 square miles of
logic-free environment. But knowing you, you will adapt very
quickly.
Thank you, Mr. Chairman.
[The prepared statement of Senator Burns follows:]
Prepared Statement of Hon. Conrad Burns,
U.S. Senator from Montana
Thank you Mr. Chairman, I look forward to working with Secretary
Evans upon his confirmation. I'll keep my statement brief and address
any questions I have at the appropriate time.
It is my belief that the responsibilities of the Department of
Commerce are very diverse considering the Department's limited budget.
Among the most important of those tasks are the National
Telecommunications and Information Administration.
The NTIA serves an important role in making sure that advanced
technologies are available in rural areas and this Committee has always
enjoyed a close working relationship with that office. We need to
continue that focus. The NTIA is one of the most important offices in
the Department of Commerce.
Furthermore, it is important that the Commerce Department recognize
its' role as the nation's watchdog on trade matters. During the 1990s,
agricultural economies have been devastated by weather, market
conditions, global economics and most importantly, poorly authored
trade agreements.
It is the joint role of the Commerce Department and the office of
the United States Trade Representative to shield all economies--
including agricultural economies--from trade barriers of other
governments.
On August 28 of last year, I along with several colleagues on both
sides of the aisle sent similar letters to Secy. Mineta addressing the
impact of other nations' trade practices on American livestock
producers. That letter requested the Department of Commerce produce a
report that compares America's trade practices with other cattle
exporting nations.
We are all aware that unfair trade subsidies. Referencing a
comparison of those subsidies globally and in one single report would
provide our trade negotiators, Congressional representatives--and most
important--those who represent our livestock producers with a valuable
tool.
As we go into this next round of WTO negotiations--it would be very
helpful to have reference a report conducted by the Commerce Department
and independent of other government agencies including the USTR and the
Department of Agriculture.
Although the National Institute of Standards and Technology is
sometimes overlooked, I would like to recognize that institution for
the research conducted just up the road in Maryland. They have provided
our nation with valuable R&D that has led to the manufacture of very
useful products.
Furthermore, as the Secretary of Commerce, Mr. Evans will be
responsible for the Patent and Trademark office, NOAA (National Oceanic
and Atmospheric Administration), the Economic Development
Administration and the Technology Administration. The roles of these
offices are all very important to our nation.
Finally, the Commerce Department is responsible for the Census
Department. Last month, Montana learned we lost in our opportunity to
gain another Congressional seat by less than 10,000 votes. It is
probably one of the most frustrating losses considering Montana's at-
large Congressional seat is now the nation's largest Congressional
district in America. Congressman Dennis Rehberg is responsible to
represent nearly a million people in the nation's fourth largest State.
Finally, I have enjoyed the opportunity of working with past
administrations and the staff at the Department of Commerce. I look
forward to continuing that relationship. I look forward to hearing from
Mr. Evans.
Thank you, Mr. Chairman.
Senator Hollings. Thank you, very much.
Senator Rockefeller.
STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
Senator Rockefeller. Mr. Evans, I was particularly grateful
to have a chance to meet with you. And I found you, frankly,
even on first meeting, to be very direct, very candid, very
pragmatic. At the same time, interested in business success. On
the other hand, very sort of instinctively, intuitively people-
oriented in your nature. And I want to say that before I say
anything else at all. And I will look forward to supporting
your nomination with a lot of enthusiasm.
Let me just make three quick points which we discussed, and
one of which I will ask a further question on. The steel
industry is in very dire crisis. It is not impossible that very
shortly about 50 percent of the steel industry in the United
States will be in bankruptcy or in financial comparable status.
Vice President-elect Dick Cheney came to Weirton, West
Virginia, and said that there could not be a defense industry
without a steel industry. It is not simply another industry. It
has a particular nature to it.
I just need to say that even though it may create tensions
within the administration, there really is, in terms of the
steel industry, a need for the Bush Administration to intervene
quickly. And I will have more to say about that in questions.
But this is a genuine, genuine crisis for the industry and for
all of the people that work within it.
Second, there are three quick technology issues, one of
which Senator Conrad Burns, my good friend, has already
mentioned. The first I would mention would be the question of
the digital divide which has almost become a cliche, but which
is becoming in my judgment not only a severe, more severe,
problem, even as we work to expand our technology
infrastructure within States, within the country, and obviously
even more dramatically, within the world.
NTIA has done a terrific job. They put out a report which
is called ``Falling Through the Net'' each year. And I would
hope that that would continue because it is dramatic and it is
powerful.
Also, there is an interesting program called the TOP
program which is the Technology Opportunities Program. Hardly
anybody has heard of it, but it makes an enormous difference to
States and to regions which would otherwise be under-served in
a very dramatic way. And I would just simply call your
attention to that.
And third, something we discussed yesterday, the EPSCOT
program, which is the technology equivalent of taking not just
University of Texas where you graduated from, in other words,
the first tier universities--excuse me, Senator Gramm--among
others, and the Stanfords and the Harvards, et cetera.
Senator Gramm. Thank you, Senator Rockefeller.
Senator Rockefeller. But going to first-rate, second level
universities where first-rate research is being done by first-
rate young researchers who, if given a boost, can do remarkable
work. It is called the EPSCOT. I just want to put that on the
record.
And finally, I want to mention the spectrum management. As
we discussed yesterday, we go from crisis-to-crisis. We have
got government needs. We have got new technology needs. We have
traditional needs. We have no spectrum management strategy. The
Commerce Department is so heavily involved in that. And I think
it represents one of the truly important challenges for you and
for your department and for the country's success as you go
into your new job.
Very finally, another rather obscure program, but we have
to protect our information infrastructure. And I am not just
talking here about privacy. I am talking about the actual
protection of it. And you have within your Bureau of Export
Administration a program called the Critical Infrastructure
Assurance office. I want to put that on the record. It is
underfunded, understaffed. And it is the body that protects our
basic infrastructure.
Having said that, I do not want people to come back here in
5 years with us in shambles in this whole area and asking why
it was that we did not do something when we have the ability
within your department to take action on that.
So having said that, I look forward very, very much to
working with you. I think you will do a wonderful job.
I thank the Chairman, both chairmen.
Senator Hollings. Thank you.
Senator Dorgan.
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Thank you, Mr. Chairman. Thank you, Mr.
Evans and your family for being with us today. And thank you
for offering to serve our country. It is my intention to
support your nomination. I think your qualifications will give
you an opportunity to excel in this particular role. We had an
opportunity to visit yesterday, for which I am very
appreciative. I will mention just very briefly, because I know
we want to get on with the statements. But I do want to say
that I am very interested in the issues of technology, the
NTIA, the work it is doing, third-generation wireless. There
are so many interesting and critically important things that
are being done in these areas. And you and I talked about that.
This is breathtaking technology. In some areas, we are well
ahead. In some areas, we are lagging. And especially third-
generation wireless, we need to be very attentive to that. I
know we had a visit about it.
I got in on the last part of Senator Hollings' statement.
But he has probably said it before. So I may have heard it
before--on the issue of trade. He comes at this with great
passion and great aggression.
And I want to mention that Senator Stevens, Senator Byrd,
and myself authored legislation that created a trade deficit
review commission. In fact, Donald Rumsfeld was on that
commission. And they have just reported. And one of the things
I said is we need to devote more resources to monitoring
compliance with trade agreements. The President should request
more resources for Commerce's market access and compliance
unit.
I want to make this point. We have a nearly $80 billion
trade deficit with Japan. Do you know how many people are
involved in monitoring our trade relationship with Japan?
Seven. A nearly $80 billion trade deficit with China. You know
how many people over in Commerce are involved in monitoring our
trade relationship with China with respect to enforcement?
Seven.
I mean, it is just unthinkable that we are doing this to
ourselves. We must--we must--enforce, aggressively enforce,
trade agreements.
Canada and Mexico. Our Canada trade deficit is estimated to
be $50 billion. Mexico, $26 billion. Both of them, we have 13
people monitoring trade components with those two areas. Europe
the same thing. We now import $1 billion more a day every day
in goods than we export. We have got huge trade problems. The
largest trade deficit--the largest merchandise trade deficit in
the history of this country and growing rapidly.
So we had a long talk about that. I will not continue
further except to say a number of our colleagues have talked
about this and it is very important. And as you come to this
job and this opportunity, I know you will pay some attention to
it from our discussion yesterday.
Again, thank you for being willing to serve our country and
I look forward to supporting your nomination.
Senator Hollings. Thank you.
Senator Cleland.
STATEMENT OF HON. MAX CLELAND,
U.S. SENATOR FROM GEORGIA
Senator Cleland. Thank you very much, Mr. Chairman and Mr.
Ranking Member. May I just say what a pleasure it is to be here
with Mr. Evans and our distinguished colleagues from the great
state of Texas. I feel that this hearing is a harbinger of good
things to come and bipartisan cooperation on behalf of our
country and behalf of our federal government.
Mr. Evans, as Secretary of Commerce, you will have an
extraordinary responsibility presiding over the department in
our federal government which is the focal point for federal
policy which actually helps shape the economy of the new
millennium. You will monitor and administer an incredible
variety of programs and policies, central to preserving
America's economic and technological leadership well into the
21st century.
I do not have to remind you how great an impact the
Commerce Department has on our 50 States. In terms of our
states, in terms of institutions of higher learning, Senator
Rockefeller did mention to Senator Gramm that there were other
institutions like the University of Georgia, from which you
graduated, and Emory University, from which I graduated, that
were as great as the University of Texas. And we are delighted
to see that recognition.
In my state, export promotion is critical. We have two
major ports that open into the Atlantic and the largest airport
and busiest airport in the world. And export promotion is
critical to the continuance of a successful economy in my State
as well as trade enforcement, enforcement of our trade laws.
How that goes will depend on the future of Georgia peanuts,
Vidalia onions, textiles, Coca-Cola, poultry and so forth, to
keep our economy going. Economic development and technology
advances certainly can open doors of opportunity for our
businesses, large and small, and for our people, whether they
be on a farm or in the city.
And, of course, NOAA, the national weather service is vital
to the life and livelihood of the farmers, sailors, aviators of
our state. We have had, unfortunately, a situation where in the
last 6 years each year has seen some major weather disaster, a
tornado, flash flood, et cetera. NOAA is critical to in effect
literally the survival of a lot of people in my State.
The Department of Commerce is also the steward of the
census. The one mechanism we have to establish the nation's
population and to ensure equitable and fair representation here
in the Congress and the allocation of federal funds where
they're most needed. I think it is essential that your
department do all in its power to produce as accurate a
population count as possible, and one which includes the
vulnerable Americans who have been missed in the past.
I would just like to say that I believe the approach
developed by Secretary Mineta and the current leadership within
the Census Bureau is the right approach, I think, one which
squares the need for accuracy with the requirements laid down
by the courts. And I hope we can work together in a bipartisan
way to secure such a result under your leadership.
I would just like to join the Chairman and Ranking Member
in welcoming you before the Committee. I wish you success in
meeting the challenges before you. And I would just like to
offer you these words from John Kennedy. He said ``My
experience in government is that when things are
noncontroversial, beautifully coordinated, and all the rest, it
must be that not much is going on.'' You have my support and my
friendship and I wish you well in your new endeavors. Thank
you, very much.
Thank you very much, Mr. Chairman.
[The prepared statement of Senator Cleland follows:]
Prepared Statement of Hon. Max Cleland,
U.S. Senator from Georgia
Mr. Chairman and Mr. Ranking Member, thank you for convening this
hearing which hopefully will serve as the harbinger of the bipartisan
cooperation our country needs and the federal government requires at
this extraordinary juncture in our nation's history.
Mr. Evans, as Secretary of Commerce you will have before you an
awesome responsibility--presiding over the department in our federal
government which is the focal point for federal policy shaping the
economy of the new millennium. You will monitor and administer an
incredible variety of programs and policies which are central to
preserving America's economic and technological leadership well into
the 21st century and beyond.
I don't have to tell you how great an impact the Commerce
Department has on our 50 States. In my state of Georgia, export
promotion and trade enforcement can determine how well our home-grown
products fare in foreign markets, be they Georgia peanuts, Vidalia
onions, textiles or soft drinks. Economic development and technology
advances can open doors of opportunity for Georgia's large and small
businesses, for our farms, and the people they employ. They can be a
lifeline for our disadvantaged communities.
NOAA and the National Weather Service are vital to the life and
livelihood of the farmers, sailors, and aviators of my state. The
ability to provide accurate and timely information regarding tornados,
hurricanes and flash floods affects not only every Georgian, but every
American from Savannah to San Antonio to Sacramento.
The Department of Commerce is also the steward of the census, the
one mechanism we have to establish the nation's population and to
ensure equitable representation in Congress and the allocation of
federal funds where they are most needed. It is essential that the
Department do all in its power to produce as accurate a population
count as possible--and one which includes the vulnerable Americans who
have in the past been missed. I must say that I believe the approach
developed by Secretary Mineta and the current leadership within the
Census Bureau is the right approach--one which squares the need for
accuracy with the requirements laid down by the courts, and I hope we
can work together in a bipartisan fashion to secure such a result under
your leadership.
I join the Chairman and Ranking Member in welcoming you before this
Committee. I wish you success in meeting the challenges before you and
offer you these words from John Kennedy: ``My experience in
government,'' he said, ``is that when things are noncontroversial,
beautifully coordinated, and all the rest, it must be that not much is
going on.''
Senator Hollings. Thank you.
Senator Snowe.
STATEMENT OF HON. OLYMPIA J. SNOWE,
U.S. SENATOR FROM MAINE
Senator Snowe. Thank you very much, Mr. Chairman. And I too
want to join my colleagues here today in welcoming you, Mr.
Evans, to this Committee and to congratulate you as well on
your nomination as Secretary of Commerce by President-elect
Bush. I also want to say you are in good company here today
with our colleagues Senator Gramm and Senator Hutchison.
It is certainly clear from your background and your
experience that you bring a broad range and expertise to the
position for which you have been selected. As others have
indicated here today, the Department of Commerce has a broad
range of jurisdiction among a number of agencies. Therefore,
the Secretary of Commerce does have tremendous
responsibilities. There is every indication that you possess
the credentials and the knowledge and the expertise that is
consistent with the post. We need to have an individual who has
clear vision, innovative ideas and skill and administrative
abilities. I think that you will be a tremendous asset to the
Commerce Department efforts in export promotion which is key to
providing a strong competitive environment in which our
businesses can thrive. I believe small and large businesses
must have the opportunities to export abroad to maintain a
strong economy.
Others, particularly Senator Dorgan, have talked about
being vigilant about unfair trade practices. Certainly, it is a
concern to have the estimated $440 billion trade deficit which
we incurred last year. This unprecedented deficit mentioned by
Senator Dorgan underscores the Federal Trade Deficit Review
Commission finding that long-term trade deficits are not
sustainable or desirable for the long term. And that is
certainly something that we have to be mindful of with the
passage and the ratification of the trade agreement with China.
We have to be vigilant in China's compliance and enforcement
with WTO agreements without any question.
And I would encourage you, as I was discussing with you
yesterday in our meeting, to seek and fill the position that
was proposed by the Clinton Administration last year with
respect to having a deputy secretary at the Commerce Department
to monitor China's compliance with WTO agreements, especially
for import-sensitive businesses like textiles and apparel that
have been devastated in my State and the State of the Chairman
of this Committee over the last decade. We have experienced
irrevocable losses across the nation. I think it is all the
more important that we have a responsibility--indeed an
obligation--to strongly enforce the principles of these
agreements to make sure that their end of the bargain is being
upheld.
As Chair of the Ocean and Fisheries Subcommittee, I also
would call your attention to our nation's fisheries. I guess I
do not have to remind you, given the coastal State that you
come from, Mr. Evans, and our colleagues. But our nation's
fisheries are an invaluable resource, certainly to my State as
well and to this country. We have seen the value of those
resources increase by more than 11 percent last year alone.
I would have to say my biggest concern is in holding
regulatory agencies accountable for the regulatory decisions
they make. In this instance, as we prepare to reauthorize the
Magnuson-Stevens Act which is the primary law governing our
nation's fisheries, we have to make sure that we have the good
science to back up those regulatory decisions.
I conducted six hearings across this country last year, and
the major complaint that I heard from the wide range of
stakeholders is that the agency, the National Marine Fisheries
Service, failed to provide the kind of science to back up and
to reinforce the strong regulatory action that they were
taking.
Also what is disturbing is the trend toward litigation
driving the agency's decisions because of the lack of good
science.
So this transition to sustainable fisheries has been a
difficult one that has really culminated in a never-ending
morass of regulations upon regulations.
To cite an example, the New England groundfishing
industry--as Senator Kerry would also acknowledge--has faced
more changes than one could count. I mean, in 1999 alone, they
faced five different regulatory changes. In the year 2000, four
different changes. You can appreciate this as a businessman.
You like to be able to plan. The fishing industry has not been
able to plan more than a few months ahead.
That is unacceptable and clearly intolerable and it is
something that could change. And I hope that with your
background and experience that you would be able to lead that
change in improving the management of that agency as well as
the overall fishing industry.
I would also commend your attention to the Economic
Development Administration. That is a very important program to
many areas of the country, including the State of Maine. It has
in its 35 years of existence provided more than $16 billion to
distressed areas. It has created more than 2.9 million jobs.
And I hope that you will continue to sustain that agency, to
help revitalize areas of the country that have been bypassed in
this unprecedented era of economic growth.
And finally, on the technology issue, I too want to
underscore the importance of the Technology Opportunities
Program that is within the National Telecommunications and
Information Administration, because it is important to
revitalizing and rejuvenating areas of the country that have
not experienced strong economic growth and who are apt to be
left behind in this information revolution.
So, again, Mr. Evans, I thank you for being here today. We
appreciate the kind of commitment and contribution you are
prepared to make. Thank you.
Senator Hollings. Thank you.
Senator Inouye.
STATEMENT OF HON. DANIEL K. INOUYE,
U.S. SENATOR FROM HAWAII
Senator Inouye. Thank you very much, Mr. Chairman. I wish
to join my colleagues in congratulating Mr. Evans on his
nomination. As you know, I have the privilege of representing
an island State. And so, your agency, NOAA, is extremely
important to us. In fact, over half of our budget concerns
NOAA. And I am certain that in your hands we will be able to
succeed and thrive and flourish in Hawaii.
I am also concerned about the Census Bureau. And so if I
may, I would like to, Mr. Chairman, submit questions on both
these items. And I further request that my full statement be
made part of the record.
Senator Hollings. Without objection.
Senator Inouye. Congratulations. And you have got my vote.
[The prepared statement of Senator Inouye follows:]
Prepared Statement of Hon. Daniel K. Inouye,
U.S. Senator from Hawaii
I wish to congratulate you on your nomination to serve as our
nation's next Secretary of Commerce. The activities within the
jurisdiction of the Commerce Department touch the daily lives of
Americans in many ways. I look forward to hearing your vision on how
the new administration plans to fulfill the department's mission to
promote job creation, economic growth, and effective management and
stewardship of our nation's resources to ensure sustainable economic
opportunities. Of particular interest would be your vision for the
National Oceanic and Atmospheric Administration, which represents more
than 50 percent of the Commerce Department's budget.
I am also looking forward to hearing your views on a number of key
issues pending before the department including the process for
determining the final accounting of the 2000 census and addressing the
growing number of fisheries-related lawsuits.
Senator Hollings. The Committee record will stay open for
questions by the other Members. The Committee is pleased to
have our distinguished colleagues Senator Gramm and Senator
Hutchison to present the nominee.
Senator Gramm.
STATEMENT OF HON. PHIL GRAMM,
U.S. SENATOR FROM TEXAS
Senator Gramm. Mr. Chairman and Members of the Commerce
Committee, let me thank you for having this early hearing. It
is a great privilege for me to be here today to introduce my
fellow Texan and my friend, Donald L. Evans and to introduce
you to him as the President's nominee for Secretary of
Commerce.
Don Evans has served as Chairman of the Board and CEO of a
major oil and gas exploration company with a billion dollars of
private assets. He knows commerce. He knows the American
capitalistic system and how it works. Few candidates for
Secretary of Commerce have ever brought the rich and lengthy
experience in the private sector of the economy to this job
that Don Evans brings.
I think as an indication of his ability as a manager, he
became CEO of a billion dollar company when he was 33 years
old. He has served our State in many positions of leadership,
certainly one of the most important is Chairman of the Board of
Regents of the University of Texas which is a huge concern,
80,000 staff members, $6 billion budget. In my humble opinion,
they spend too much money on athletics and not enough on
academics. But he has served with great distinction as Chairman
of the Board of Regents of the University of Texas.
He has been very active in philanthropic activities. He was
the driving force behind Native Vision, which is a program to
assist Native American children. And that program, which is
largely his creation, now provides services to some 10,000
Native American children in America.
He is a graduate of the University of Texas in mechanical
engineering which is one of their most outstanding programs at
the university. He has an MBA from there. He is a distinguished
alumni of the business school. And Don is what we would call in
Texas a ``top hand.'' He is the kind of guy you want on your
side. You can ask our new President about having Don Evans on
your side. And I think the happy condition we are in today is
finding ourselves where through our action in the Senate we can
put Don Evans on America's side as Secretary of Commerce. So I
am very happy to be here. And I very strongly recommend to this
distinguished Committee that Don Evans be reported favorably
and confirmed by the Senate.
Senator Hollings. Thank you.
Now our important Committee Member, Senator Hutchison.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Thank you Mr. Chairman. And I want to
thank you and Senator McCain for working together to have this
early hearing so that we can get an early confirmation.
I called Don Evans on the day after his appointment. And I
said, ``Don, if there is anything I can do to help you, let me
know.'' And he said, ``Well, if you could remind me of every
place I lived when I went to the University of Texas.'' It
seemed that I got him while he was filling out his FBI form.
I want to say that I am particularly pleased that our
President-elect has chosen someone who is a true entrepreneur,
someone who knows the ups and downs of business. We all know
what kind of peaks and valleys we see in the oil industry. And
I think that is good experience. Because this is a man who
knows first-hand what the businesses of our country go through
when we have economic swings as we are seeing today.
I think it is particularly important that as he says he has
been tested. He has been through the whole cycle, the ups and
the downs. And I think he will have good advice for our
businesses and our country. But mostly he will understand what
they are going through and how we can level out those peaks and
valleys.
Second, from a non-credible source, an Aggie, no less, you
have heard of his service to the University of Texas. But in
fact, I am also an alum of the University of Texas and very
proud that he has held the very highest position of leadership
in our mutual university and that he serves as Chairman of the
Board of Regents. He has done a wonderful job.
Senator Rockefeller, you were talking about the importance
of research and bringing fledgling researchers up through our
system in America, that was one of the great strengths of Don
Evans' service as Chairman of the University of Texas Board of
Regents. He focused on research and increased the opportunities
for our young researchers at the University of Texas throughout
the system because he too felt that that was so important. So I
have a feeling that research is going to be one of the
important priorities that he will bring to the Commerce
Department.
I do not need to go back through his resume because I think
Senator Gramm has given you that. But I will just say that I am
very proud that this Texan has been chosen to lead the
Department of Commerce. And I do hope that our Committee will
confirm him quickly so that he can represent the best that is
America in our free enterprise system to the world.
Thank you.
[The prepared statement of Senator Hutchison follows:]
Prepared Statement of Hon. Kay Bailey Hutchison,
U.S. Senator from Texas
Thank you, Mr. Chairman. It is my great privilege to stand before
the Committee today for the purpose of introducing a fellow Texan and
great friend, Don Evans, the nominee-designate for the position of
Secretary of Commerce in the Bush Administration.
Don graduated with a degree in mechanical engineering from my alma
mater, the University of Texas. He serves as chairman of the
University's Board of Regents.
The mantle of promoting and protecting America's commercial
interests throughout the globe is a good fit for a man who has been a
hands-on businessperson with real-world experience.
Free enterprise has been Don's life. As one headline put it, Don
went from ``roughneck to oil exec''--Don started work on a drilling rig
for the Tom Brown company in Midland and took only 5 years to become
president of the billion-dollar company, at age 33.
He's seen the oil and gas business at its peaks in the 1970s and in
its valleys in the 1980s. He's Texas tough. He's seen prices high and
low, the dry holes and the gushers. This entrepreneur says: ``I have
been cycle-tested. I have been through the whole cycle.'' Don is well
prepared for the cycles and challenges of running a large Federal
department. He has collaborated with many heads of businesses, in Texas
and elsewhere, and as Secretary of Commerce, he will work effectively
with America's executives.
I don't want to embarrass the distinguished Senior Senator from
Texas seated next to me, because I know he is a devoted Aggie, and I
want to take a moment to pay tribute to Don's efforts at the University
of Texas. The UT system has a $5.8 billion operating budget and would
rank as the fifth-largest company in the State of Texas if it were a
private entity. UT has 70,000 employees and 153,000 students.
Again, I would like to applaud President-elect Bush's choice of Don
for Commerce Secretary. I know he will face the challenges ahead with
the same acumen he showed in the private sector.
Senator Hollings. Thank you very much.
The Chair is now pleased to recognize the nominee, Mr.
Evans.
STATEMENT OF MR. DONALD L. EVANS, NOMINEE TO BE SECRETARY OF
THE DEPARTMENT OF COMMERCE
Mr. Evans. Mr. Chairman, thank you very, very much. As
Senator Gramm is leaving, I must say to you that it is not
often that--in our State anyway--that you get somebody from
Texas A&M University to say something nice about somebody from
the University of Texas. I appreciated those kind words by both
Senator Gramm and Senator Hutchison.
I have got a short prepared statement. Before I get to
that, I want to apologize to Senator Inouye for not yet getting
by to see you, Senator. I look forward to that. I must say that
the last 2 days in Washington, D.C. have been very moving to
me, moving in the sense I have met, in some cases for the first
time, U.S. Senators and in other cases visit with Senators that
I already have known. There is a sense of the great bipartisan
spirit here.
As I move into the short prepared statement, I want to
thank all of the Senators that I have had the chance to visit
with and spend time with and listen to. And please know that I
have come away from those meetings with the sense that these
are all Senators that I look very forward to working with, to
hearing from, to talking to, to hearing what is on your mind.
And knowing that there are many ways that we can solve these
common problems together. So I thank you for your indulgence
the last 24 hours, 48 hours, as I come by to see you. Because I
know how busy your schedules are.
Mr. Chairman, Senator McCain, other distinguished Members
of this Committee, thank you for the opportunity to appear
before you this morning. I deeply appreciate again those
introductions from my longtime friends, Senator Gramm and
Senator Hutchison, and your words of kindness to Susie and me
are very much appreciated.
Since President-elect Bush announced his intent to nominate
me to the position of Secretary of Commerce, I received nothing
but the most gracious kind of welcome here in Washington, D.C.
Democrats and Republicans, career agency employees,
Congressional staff, and the public have all have extended warm
and helping hands. My meetings over the past 2 days, as I have
already referred to, with many of the Committee Members have
been particularly helpful to me. I trust this is only the first
step in what will be a regular, productive dialog.
If confirmed as Secretary, I will continue to seek your
views and counsel so that together we will meet the challenges
and missions of this very vital department that we are talking
about today.
Secretary Mineta and his staff have been extraordinarily
helpful. Many worked over the holidays to assist our transition
team. I am very pleased that Norm will continue his public
service as Secretary of Transportation. He will be close at
hand, somebody that I will consult frequently.
I especially also wish to extend my gratitude to former
Secretary Bill Daley for his friendship, for his assistance and
for his advice. I met with Bill on one occasion since the
election. I have talked to him on numerous occasions. He is one
that I will seek advice from frequently. His generosity once
again affirms the nature of our democracy. It's vibrant and
competitive, but also respectful and committed to the common
good of this great nation. And we all realize that beyond
anything else, we are here to serve our fellow Americans.
Mr. Chairman, I am humbly grateful and honored that
President-elect Bush would nominate me for this new role. I am
eager to take on the challenge.
President-elect Bush has observed that it is not
government, but the entrepreneurial spirit of the American
people that creates wealth. What government can do, however, is
to help create an environment in which this spirit flourishes,
an environment that promotes innovation, risk-taking and equal
opportunity.
President-elect Bush clearly understands the challenges of
competing in a global economy. But challenges are neither to be
avoided nor feared. Americans have never had greater
opportunities to pursue their dreams than today. If confirmed
as Secretary, my mission for the Department of Commerce will be
to foster a marketplace where ideas and energy can thrive,
where the entrepreneurial spirit will flourish.
I must say that when I worked as a roughneck on the
drilling rigs in the oilfields of West Texas some 30 years ago,
I never expected to be nominated or to become Secretary of the
Cabinet agency charged with promoting the nation's business.
Nor was I aware of the important training for this role that I
was receiving while I worked my way up the chain as an
engineer, as a manager at industrial and energy companies or
when I struggled to find a way for my company to survive the
severe downturn that hit the oil patch in the 1980s and 1990s
or as I chaired the Board of Regents of the University of
Texas, a system of nine educational and six health care science
centers--having 79,000 employees and having over 154,000 very
cherished students. In a sense, I have been preparing for my
new responsibilities, if confirmed, throughout my working
career.
My experience has taught me this: Our free enterprise
system is unmatched in its ability to provide economic freedom
and opportunity and hope for all of our citizens. If confirmed
as Secretary of Commerce, my objective will be to direct the
department's great and diverse resources to the common cause of
fostering economic strength at home, and indeed, abroad. Every
part of the Commerce Department will join in this purpose.
Two precepts will guide our work. First, no sector of the
U.S. economy operates in isolation from the global economy.
Every worker and every employer faces the challenges of
competition from the world's farthest reaches. Our job will be
to ensure that those challenges are turned into opportunities.
Second, our nation's greatest export is its democratic
principles. Those principles best take hold in a world of
unshackled economic opportunity. Whether in seeking agreement
on rules for e-commerce or the elimination of free-enterprise-
distorting trade subsidies, we want to foster a world of
private, not government, competition.
This is a critical role for the Commerce Department, to
partner with the U.S. Trade Representative to ensure that our
trade agreements provide more meaningful opportunities for
exports of American goods and services--trade must never be a
one-way street. We must ensure our workers and businesses--
small and large, rural and urban--are protected against unfair
trade competition, while gaining the great benefits of larger
global markets.
Equally important is the proper stewardship of our oceans,
fisheries, and marine environment. The research and regulatory
roles of the National Oceanic and Atmospheric Administration
contribute greatly to our national security and to the
livelihoods of all our citizens, especially those who live and
work in coastal areas. NOAA's important research will also be
critical to decisions that we will make as to the global
climate change.
Fostering America's technological leadership will be a
central concern of the Commerce Department under my leadership.
American inventiveness is a national treasure. The great
inventors of our history, from Edison and Bell to McCormick and
Whitney, would marvel today at the power and reach of American
technology and its swift contributions to our standard of
living.
The words of Lincoln that are chiseled in stone above the
Commerce Department's entryway on Fifteenth Street remind us of
a key mission: It is our patent system, Lincoln noted, that has
``added the fuel of interest to the fire of genius.'' The
nation's security and prosperity rely on the promise of
effective intellectual property protection. Maximizing
competitive opportunity also results from the establishment of
appropriate industrial standards, from the exploitation of new
technologies and the new means of doing business, and from the
predictable, common sense administration of controls on exports
of strategically important goods.
The wide range of interests and concerns expressed to me by
many of you over the past few days matches the very diversity
of the Department itself. I want you to know that your issues
are my issues. Whatever debates there have been previously or
may be in the future about the shape and substance of the
Commerce Department, I intend simply to make the Department
work well for all Americans: all workers, all businessmen and
women, fishermen, investors, inventors, scientists, and
consumers alike. I assure the Committee that if I am confirmed
as Secretary, the Department of Commerce will pursue our
missions with energy, integrity, and constant awareness that we
labor in the public interest.
In closing, I want to thank my family for supporting my
decision to enter public service. I love this country. I love
all Americans, and I will cherish this opportunity to serve
this great nation.
Again, my appreciation for the opportunity to appear before
you today. I welcome an opportunity to answer any questions
that you might have.
[The prepared statement of Mr. Donald L. Evans follows:]
Prepared Statement of Donald L. Evans, Nominee to be Secretary of the
Department of Commerce
Mr. Chairman, Senator McCain, Members of the Committee.
Thank you for this opportunity to appear before you this morning. I
deeply appreciate the introductions by my long-time friends, Phil Gramm
and Kay Bailey Hutchison and your words of welcome for Susie and me.
Since President-elect Bush announced his intent to nominate me to
the position of Secretary of Commerce, I have received nothing but the
most gracious welcome here in Washington. Democrats and Republicans,
career agency employees, Congressional staff, and the public all have
extended warm and helping hands. My meetings over the past 2 days with
many of the Committee members have been particularly helpful to me. I
trust this is only the first step in what will be a regular, productive
dialog. As Secretary, I will continue to seek your views and counsel.
Secretary Mineta and his staff have been extraordinarily helpful.
Many worked over the holidays to assist our transition team. I am very
pleased that Norm will continue his public service as Secretary of
Transportation--and that he will not be able to avoid my calls for his
advice. I look forward to continued work with this most esteemed
colleague.
I especially wish also to express my gratitude to former Secretary
Bill Daley for his assistance and advice. His generosity once again
affirms the nature of our democracy--vibrant and competitive but also
respectful and committed to the common good.
Mr. Chairman, I am humbled and honored that President-elect Bush
would nominate me for this new role. And I am eager to take on the
challenge.
President-elect Bush has often observed that it is not government,
but the entrepreneurial spirit of the American people that creates
wealth. What government can do, however, is to help create an
environment in which that spirit flourishes--an environment that
promotes innovation, risk-taking and equal opportunity.
President-elect Bush clearly understands the challenges of
competing in a global economy. But challenges are neither to be avoided
nor feared. Americans have never had greater opportunities to pursue
their dreams. If confirmed as Secretary, my mission for the Department
of Commerce will be to foster a marketplace where ideas and energy can
thrive, where the entrepreneurial spirit indeed will flourish.
I must say that when I worked as a roughneck on drilling rigs some
30 years ago, I never expected to be nominated to become Secretary of
the Cabinet agency charged with promoting the nation's business. Nor
was I aware of the important training for this role that I was
receiving while I worked my way up the chain as an engineer and manager
at industrial and energy companies; when I struggled to find a way for
my company to survive the severe downturn that hit the oil patch in the
late 1980s; or as I chaired the Regents of the University of Texas, a
system of nine educational and six health care science centers, having
79,000 employees and 154,000 students. In a sense, I have been
preparing for my new responsibilities throughout my working career.
My experience has taught me this: Our free enterprise system is
unmatched in its ability to provide economic freedom and opportunity
for all of our citizens. If confirmed as Secretary of Commerce, my
objective will be to direct the Department's great and diverse
resources to the common cause of fostering economic strength at home
and abroad. Every part of the Commerce Department will join in this
purpose.
Two precepts will guide our work. First, no sector of the U.S.
economy operates in isolation from the global economy. Every worker and
every employer faces the challenge of competition from the world's
farthest reaches. Our job will be to ensure that those challenges are
turned into opportunities.
Second, our nation's greatest export is its democratic principles.
Those principles best take hold in a world of unshackled economic
opportunity. Whether in seeking agreement on rules for e-commerce or
the elimination of trade-distorting subsidies, we want to foster of
world of private not government competition.
There thus will be no more important role for the Commerce
Department than to partner with the U.S. Trade Representative to ensure
that our trade agreements provide meaningful opportunities for exports
of American goods and services--trade must never be a one-way street.
We must ensure our workers and businesses--small and large, rural and
urban--are protected against unfair trade competition while gaining the
great benefits of larger global markets.
Equally important is the proper stewardship of our oceans,
fisheries, and marine environment. The research and regulatory roles of
the National Oceanic and Atmospheric Administration contribute greatly
to our national security and to the livelihoods of our citizens,
especially those who live and work in coastal areas.
Fostering America's technological leadership will be a central
concern of the Commerce Department under my leadership. American
inventiveness is a national treasure. The great inventors of our
history, from Edison and Bell to McCormick and Whitney, would marvel
today at the power and reach of American technology and its swift
contributions to our standard of living.
The words of Lincoln that are chiseled in stone above the Commerce
Department's entryway on 15th Street remind us of a key mission: It is
our patent system, Lincoln noted, that has ``added the fuel of interest
to the fire of genius.'' The nation's security and prosperity rely on
the promise of effective intellectual property protection. Maximizing
competitive opportunity also results from the establishment of
appropriate industrial standards, from the exploitation of new
technologies and new means of doing business, and from the predictable,
common sense administration of controls on exports of strategically
important goods.
The wide range of interests and concerns expressed to me by many of
you over the past few days matches the very diversity of the Commerce
Department itself. I want you to know that your issues are my issues.
Whatever debates there have been previously or may be in the future
about the shape and substance of the Commerce Department, I intend
simply to make the Department work well for all Americans: workers,
businesses, fishermen, inventors, scientists, and consumers alike. I
assure the Committee that if I am confirmed as Secretary, the
Department of Commerce will pursue our missions with energy, integrity,
and constant awareness that we labor in the public interest.
In closing, I want to thank my family for supporting my decision to
enter public service, and to express to you again my appreciation for
the opportunity to appear before you today. I will be pleased to
respond to your questions.
Senator Hollings. Thank you very much, Mr. Evans.
Two of our colleagues have yet to have an opportunity to
present opening statements. Senator Hutchison, would you like
to make a statement?
Senator Hutchison. No, thank you, Mr. Chairman. I will ask
questions.
Senator Hollings. Very good.
Senator Inouye.
Senator Inouye. No opening statement.
Senator Hollings. Very good. We will try to hold it down to
the 5 minutes so we can get around to everybody.
When you talk about trade it cannot be a one-way street
with the opportunity to export, but that is not our problem.
You remind me of that Small Business Administration
questionnaire that went out some years ago, Mr. Evans. One
section said, ``How many employees do you have broken down by
sex?'' The small businessman said, ``None. Alcoholism is our
problem.''
Exports are not our problem. We have got offices all over
South Carolina. I take almost everything I produce for General
Electric in Greenville and the Dozer turbines down in Florence
where we are making the magnetic resonance images. We export
more than 50 percent of that. BMW that I have in South Carolina
exports 95 percent. So we know all about exports.
It is, as Senator Dorgan has said, almost a $400 billion
trade deficit in imports. That is what we had with respect to
the International Trade Commission. You have the International
Trade Administration. You have a finding of a dumping
violation. And supposedly to enforce it was the Commission. But
they are a patsy. They never find injury and never have
enforcement.
What we really need is a change of mindset to get away from
the foreign trade as foreign aid. Fine. Whoopee for the
Marshall Plan. It has worked. Capitalism has defeated
communism.
But right to your particular industry. You had a couple of
years ago the dumping of oil at less than cost. Louisiana,
Oklahoma and Texas brought a dumping case. But what happened?
Politically, they said, ``Wait a minute. If we make a finding
in favor, then we are going to run up the price of gasoline
during an election year.''
So they bucked it up to the Court of International Trade on
a technology issue about standing. Now it is back and we will
see where we go from there. But the market has changed.
But I want to give you that as an example because the
Zenith case, the entire Cabinet after a 3-year trial and a
Supreme Court finding and everything else of that kind, with
President Reagan, the Cabinet had voted to go ahead and enforce
the finding. And instead, President Reagan came in and said,
``Well, I have just talked to Nakasone. And we are going to let
that one go by.''
And time and time again this has happened. So America's
industry says ``the heck with these trade lawyers and spending
3 years and millions of dollars in court. I am going to go over
and join them.''
And so before you can produce the Boeing 777 or sell it in
the People's Republic, they say you have got to produce half of
it in downtown Shanghai. You pick up Monday's Wall Street
Journal and it says we are going to try to compete now with the
747 super-duper 747. The Europeans do not have one, but the
AirBus crowd is now trying to go to 600 passengers.
So in order to compete, we are going to that. But where are
we going? To Japan. Look at the headline, the Wall Street
Journal. We are going to produce it in downtown Japan.
That is why the Boeing machine has led to the strike
demonstration December a year ago. Not the crazies that came
out of Oregon--excuse me, Ron--that tried to break up Main
Street there in Seattle, you know, that crowd that came. I am
talking about the legitimate AFL/CIO demonstration against WTO.
That was led by America's premier export industry.
The problem is not exports. We are losing our industrial
backbone. With respect--and you have got to change the mindset
in you and everybody else. That is why we plead with you to
please take over so that we have got a proper, not just--we do
not need a sheriff or chief of police to enforce. We need a
whole mindset to comply. That is all. Everybody else uses their
market to promote the interests of their manufacturer, and we
have got to start doing the same.
With respect to the steel, as Senator Rockefeller said,
that is exactly right. Look at Bethlehem. They have modernized
and everything else. But look at their stock. Why? Because you
are competing with the World Bank. The World Bank goes the
world around. And they said, ``Wait a minute. You are a Third
World emerging economy here. Before you become a nation state,
you have got to produce the steel for the weapons of war and
the tools of industry.''
I have done this down in South Carolina. I have Nucor and
all the rest of the steel plants. But they went into Saudi
Arabia when poor Willie Korf died in an air crash. He was
building steel plants in China.
So we build 2 percent steel plants the world around. And
then we come back to our workers and steel plants here and say,
``Oh, you have got to compete. Productivity, productivity.''
And then give them all the requirements that I talked about.
So you have got to enforce the steel dumping. That is what
you appeared before the group, International Trade Commission,
and made an eloquent statement about that need.
With respect to fisheries that Senator Snowe and Senator
Kerry pointed out, we actually had to hold up an almost
continuing resolution and could not adjourn just before
Christmas on account of a fisheries case--the sea lions up in
Alaska. And we had not gotten the right science to feed into
the right court finding to protect those fisherman up there in
Alaska.
So a little thing--all for the want of a horseshoe nail--a
little thing in your department becomes an almost super
important matter here on the Hill itself. So look at that.
I could go down several other things, but I want to comply
with that red light.
The next person, I think, was Senator McCain.
Senator McCain. Thank you, Mr. Chairman.
I note the presence of Congresswoman Jennifer Dunn from the
State of Washington, who is here in support of our nominee and
we thank you for being here, Congresswoman Dunn.
Senator Hollings. If you would yield, we had told Members
that there would not be any other witnesses. Otherwise, we
would welcome Congresswoman Dunn to testify. But we do
appreciate your presence. Thank you, Senator.
Senator McCain. Thank you, Mr. Chairman.
Mr. Evans, I would like to mention that in our meeting I
said that I would ask you either at the hearing or in writing
many of the questions, or most of the questions, that I asked
your predecessor Secretary Daley. I would like to get through a
couple of these with the time that I have.
In the pre-hearing questionnaire you filled out for the
Committee, you were asked whether you or any business in which
you were an officer had been involved in civil litigation or
administrative agency proceedings and to provide details. I
appreciate the candor with which you addressed these questions.
With respect to the Security National Bank and the American
Century Corporation cases, please clarify for the Committee
exactly what your roles were at these companies during the
times addressed in the litigation.
Mr. Evans. Thank you, Senator. Out of utmost caution, I
responded to that question in the affirmative because while I
was not an officer of those entities----
Senator McCain. I think you need to pull the microphone a
little closer.
Mr. Evans. Sorry, sorry. The question asked ``were you an
officer.'' I actually was not an officer, but I felt like I was
close enough to those situations that I should respond to them.
Security National Bank was a young startup bank in the early
1980s that was one of the many banks that did fail in the 1980s
in Texas. I was on the board from a period of 1981 to 1985.
Subsequent to resigning from the board, in 1987 a lawsuit
was brought against the bank. All the board members were named
in that lawsuit. I was one of those names, although I was not
serving on the board at the time. As the lawsuit progressed, my
name was, in fact, dropped from that lawsuit. So it was through
a civil litigation action in a bank that I was named later
dropped from that suit. But no claims or charges were brought
against me personally.
In the American Century situation, that was a savings and
loan, some 48 of the 50 largest savings and loans in the State
of Texas failed during that period. American Century--again out
of kind of utmost caution--American Century was a holding
company of a savings and loan. And I was not actually on the
board of the savings and loan that failed. I was on the board
of the holding company.
But there was some agency administrative action taken
against the savings and loan. I was not named in that, but I
felt like I was close enough to it where I should mention it.
Again, I was not an officer in the savings and loan. I was not
actually a director of the savings and loan itself. But I was a
director of the holding company of the savings and loan.
But what it did allow me to do is see the collapse of an
industry up close and personal. I mean, I saw the collapse of
the financial industry along with the oil and gas industry and
others up close and personal.
But I wanted to respond to those that I was close to those
situations, even though, again, not an officer, no action was
ever actually taken against me personally.
Senator McCain. One of your responses to the pre-hearing
questionnaire states that Tom Brown, Incorporated has been
involved in various State and Federal administrative agency
proceedings in the normal course of this business. Could you
clarify what proceedings Tom Brown, Incorporated was involved
in and their disposition? And did any of these proceedings
involve damages or civil penalties paid to the government or to
third parties and your involvement there.
Mr. Evans. Senator, I am not aware of any civil penalties,
any damages that were paid in any proceedings that the company
was involved in over the last 25 years, the time period that I
been employed there, the last 21 years an officer there. We
have ongoing activities with the BLM, with the Federal Energy
Regulatory Commission to mention a couple.
What I think I would like to do, if it is OK with you, is
just submit to the full Committee in writing a full list of all
of those ongoing activities that we had with various Federal
agencies as opposed to trying to enumerate them right now.
Senator McCain. Thank you. I think that would be fine.
Mr. Evans. OK. *
---------------------------------------------------------------------------
* Witness did not provide a response.
---------------------------------------------------------------------------
Senator McCain. There have been numerous reports in the
past that the Department of Commerce trade missions have
involved explicit and implicit fundraising activities or
requests.
There have also been allegations that there may have
existed a quid pro quo involving campaign contributions in
return for being involved in or invited on such missions.
Without passing judgment on the veracity of these reports,
I would like to know what actions you intend to take to ensure
that such activity does not occur in the future. And by the
way, I emphasize I applaud your predecessor in his efforts in
this area. Would you for the record submit to this Committee no
later than 30 days from now in writing your plan to ensure that
electoral politics do not play a role in the Department of
Commerce programs and trade missions?
Mr. Evans. Senator, I will absolutely submit that in
writing to you within 30 days. Let me tell you that I have had
occasion to meet with Secretary Daley. I have discussed with
him in some detail the procedure that is in place now as to the
selection of individuals, companies, to participate in trade
missions. I am comfortable with the plan, the procedure, the
methodology which they now use there as I understand it. *
---------------------------------------------------------------------------
* Witness did not provide a response.
---------------------------------------------------------------------------
I have not seen it in writing myself yet. But the way, that
it has been explained to me, it is basically career people who
are making the decisions as to who participates on the trade
missions. And the political appointees have been taken out of
it. I think that is appropriate.
But I would just say to amplify on that a little bit, I am
not the one that is confused at all about service and public
trust. And that is something that, every decision I made will
go through that screen. It will go through a screen of is this
decision being made in the best interest of the American people
and the best--the long-term interest of America and for the
general well-being of this country.
And so that is how all of my decisions will be made. But I
will be happy to submit to you within the next 30 days a
detailed plan of how those trade commissions will be selected.
Senator Hollings. Senator Hutchison.
Senator Hutchison. Thank you, Mr. Chairman.
Mr. Evans, we passed the PNTR bill last year, but many of
our Members were very concerned about the lapses in export
technology restrictions and the potential proliferation of
nuclear and chemical weapons that are being observed in China.
I want to just ask you a general question about what you
think should be the parameters of any kind of normal trade
agreements about technology transfers, and if you have had a
chance yet to think about how you might address this with the
Department of Defense and the Department of State and the U.S.
Trade Representative and all of those who would be involved in
our export relations.
Mr. Evans. Thank you, Senator. And thank you again for
those kind remarks earlier. What I can say to you at this point
is I understand how sensitive this issue is, how critical this
issue is. I know President-elect Bush in the course of the
campaign talked about this specific issue and it was his
suggestion that a President's Technology Export Council be
considered or be developed so that you did have the right
people sitting around the table making decisions as to whether
or not we should allow certain technology to be exported.
And so, I would say to you that it is something that I will
give high priority to, to make sure that we will look at this
President's Technology Export Council to see if that is an
appropriate way to bring the interagency input or minds to the
decision of making the appropriate decision as to whether or
not this particular export item would be qualified as a
commercial civilian use. Or could it be of military use?
And certainly, if it is, when making the decision whether
it would be State or Defense or whoever, say this could be
indeed of military use, I think the Council would make the
appropriate decision.
But I think, you know, I can say I know it is a very, very
sensitive important issue, one that needs focus and I will give
it focus.
Senator Hutchison. Well, I appreciate the priority that you
are putting on it and particularly that you would work with all
of the others involved to try to set a policy that everyone has
a part in developing and then letting everyone know what that
policy is.
So it is very important to many of us and I am pleased that
it is to you as well.
The only other comment that I would make, and I think that
you have seen the diversity of issues with which you are going
to have to deal from the opening statements of Members. I would
just say that I think the President-elect's focus on an energy
policy in the very near term is well placed. And I hope that
you as Secretary of Commerce and someone who understands this
business will be helpful in formulating an energy policy that
not only is good for the short-term and the help that is needed
in the short-term to stabilize prices, but also for the long
term. We must have conservation and production in our own
country if we are going to control the stability of our own oil
resources.
So I hope that with the Secretary of Energy, with the
Secretary of Interior and with the President-elect, you will be
a part of a process that will give us an energy policy really
for the first time in this country that will value all of those
elements and put us on the right course for having better
control of our own destiny as it relates to energy. And with
that, I will just say that you know I am going to support you
and I am very pleased that you are here. Thank you.
Mr. Evans. Thank you, Senator.
Senator Hollings. Very good.
Senator Kerry.
Senator Kerry. Thank you, Mr. Chairman.
Mr. Evans, as I mentioned in my opening, I have that
concern about the census. I would like to pursue that with you
a little bit if I can.
Mr. Evans. You bet.
Senator Kerry. I mentioned, this has really been a problem
since the 1940s. And I think in the 1990 census, I mentioned
the 13 million people. Among those were about an undercount of
approximately 8.4 million Hispanics, Asians and blacks. And
there was an overcount of some 4.4 million, mostly of affluent
whites.
The sampling back then found that the decennial census
undercounted Native Americans living on reservations at a rate
of 15 times that of whites. And it also undercounted Latinos
and blacks at a rate of 6 to 7 times the rate of whites, and
Asians at a rate of 3 times that of whites.
Now, the experts in the Census Bureau have determined that
a statistical sampling process is a viable, scientifically
sound method to ensure that those counts are accurate, and that
that would provide us with a single uniform standard by which
we can count accurately our fellow Americans.
I would like to know if the professionals in the Department
were to recommend to you as Commerce Secretary--and we do not
know this yet--but if they were to come to you and say, Mr.
Secretary, there is a bad undercount here and we have
determined based on this scientific methodology that we need to
rectify that so that Americans are properly represented, your
predecessor Mr. Mineta has, in fact, left in place a process
that will allow them to do that. Will you honor what Mr. Mineta
has put in place and, in fact, follow the professional
recommendation?
Mr. Evans. Senator, of course, I have to wait and see what
the professionals' recommendation is. As you mentioned in your
opening statement, the experts are still at work. They are
still going through the data. I know the Director made the
statement just a few days ago that their work continues. He
cannot yet say whether or not--how accurate the count is or
what the undercount or overcount is.
I can tell you a couple of things. One is that I am an
engineer, scientist, by training. I like the facts. I like
accuracy. And so I will look forward to seeing what the facts
are and just the exact nature of the recommendation that might
come to my desk. It is also though been called to my attention
that maybe this decision--and I am not sure exactly what the
process is yet--but it has been called to my attention that
this decision has been delegated to the Director of Census and
will not come across my desk.
So I am not yet clear as to what authority I will have or
will not have quite frankly. I read a briefing paper I know
just a few days ago that said as of November 6, the delegation
of responsibility had been delegated to the Director of the
Census or whoever the Acting Director was at the time.
So I am still a little unclear as to what kind of authority
I will have when the Bureau of Census and their experts reaches
whatever conclusions they might have.
The only other thing I might add, I would note that what
has been said so far is the professionals are saying that it is
the most accurate count we have had so far in any census that
we have ever conducted. And I guess we spent some $60 billion
or so getting to this point. So it should be the most accurate
count. Does that mean that is good enough? I am not sure yet.
We will just have to see what the experts say.
Senator Kerry. Well, fair enough. I think that you are
accurate in saying that it has been delegated to the Census
Bureau. What I and others are concerned about is that it is
left to professionals, that politics does not enter into it so
that some recourse is sought that does not respect the rule
that is in place. I mean, is there any reason that you would
see as you approach this job that would motivate you to suggest
that you would not leave it to the Census Bureau?
Mr. Evans. Again, Senator, I just have not had a full
review on the total issue yet. Obviously, it is a very
sensitive issue. It is at the top of the list. This information
is going to become available within the next month-and-a-half
or so. I think we are due to deliver the counts to the States
in the spring. So I know it is an issue that is on everybody's
mind. It is certainly on my mind--exactly what action we will
take or will not take.
Senator Kerry. Would you as a matter of your confirmation
today guarantee to the Committee that if there were some reason
that you thought that the rule Mr. Mineta put in place should
not be honored that you would come back to the Committee and
explain to the Committee in an open session precisely what the
rationale for changing that might be?
Mr. Evans. You can be assured that I will be very open and
very straightforward with this Committee. And anytime you would
like for me to come before this Committee, I will be delighted
to do that.
Senator Kerry. Mr. Evans, let me also ask you about another
subject of enormous concern. Last year at the World Economic
Forum, which is a gathering of significant business and
corporate interests from around the globe, a poll was taken of
the leading businesspeople there.
And overwhelmingly, these corporate chiefs from around the
planet agreed that one of the most serious issues, the most
serious issue, that they felt they faced in the long-term was
the problem of global warming. People were significantly
surprised by that sort of consensus.
Paul O'Neil, who will be our new Treasury Secretary, has
been a leader, in fact, among the corporate community in
leading his company to proactively take steps to deal with this
issue.
Your budget, as Senator Inouye mentioned, 51 percent of it
goes to NOAA. And NOAA is our most important research entity,
most important entity for climate change knowledge, science.
Could you share with the Committee your perception of this
issue at this time? And I wonder if you are familiar with the
IPCC climate assessment and what your commitment would be with
respect to that issue and the leadership role the Commerce
Department plays in it?
Mr. Evans. Right. Senator, what I first and foremost would
say to you is that I am totally committed to the continuation
of an active research of this specific issue. I spent a fair
amount of time talking to Secretary Daley about this issue. His
pride in the scientists that we have, or in the Department of
Commerce studying this particular issue. I think it was
Secretary Daley mentioned to me that he felt like he had one
of--maybe the only Nobel Prize winner inside government, a guy
in his department as one of the key scientists researching
these very important issues.
So as I expressed to you in our private meeting, this is
something that I am very sensitive to. Have I had a chance to
be fully briefed on the issue? No, I have not. Is it something
that this world ought to be concerned about? You bet it is. Am
I one that will be high on that list of concern? I absolutely
am.
And so I would say that it is something that I will stay
focused on, stay committed to. As I said in my opening remarks,
our kind of understanding of the global climate change that
could be taking place will be very important to the kind of
decisions, the kind of policy decisions, that we quite frankly
make.
Senator Kerry. The red light is on and I do not want to
abuse the process. But do you accept the science to date? Do
you accept the science of the IPCC?
Mr. Evans. Senator, I would have to tell you I have not
reviewed that in detail. And I know there is science on both
sides of it. I know that. But I just would have to say to you
that it is just not something that I have been briefed on, that
I have reviewed yet. But I would absolutely say to you that it
is an issue that I am very sensitive to. And I appreciate your
sensitivity to it. And I look forward in getting back to you
when I think I have a more kind of educated understanding if
you will.
Senator Kerry. Thank you, Mr. Evans.
Thank you, Mr. Chairman.
Senator Hollings. On the census, Mr. Evans, it is the
Committee's hope that you will support President-elect Bush's
supporting sampling and opposing hand counts.
Senator Burns.
Senator Burns. Thank you, Mr. Chairman.
In your position you are going into, Mr. Evans, now, this
morning we had the opportunity to visit with the appointee for
the Secretary of Agriculture. And food safety, of course, is
always an issue with the Department of Agriculture and other
departments. And we always see government as it works.
You know, we have the most inefficient government in the
world, but it is designed that way. When you have got a free
government and the flow of free ideas. But we also you are
coming into a town where there continues to be turf wars and
battles. And with you coming in, what happens in the Department
of Transportation and what happens in the Department of Energy
and what happens in the Department of Agriculture effects a lot
of things that happens in the Department of Commerce.
In other words, you have the ability to oversee or to look
on what the policies of those agencies are, and how it effects
our commerce, our movement of trade, our everyday life.
And I would hope that--and this is just a statement and you
can respond if you want to. I do not know how you set it up,
but I would certainly like to see some sort of a little office
off in the corner that is in charge of communicating or
nourishing a relationship between departments because of these
very sensitive areas.
So we know what our challenges are in agriculture. I think
the same challenges in order to make government work, we have
to nourish those relationships between communications of what
we do over in the Department of Labor. Now, what we do in the
Department of Energy and Transportation does effect our ability
to foster economic opportunities for every American in this
country.
So I think that is very, very important. How you do that,
that is up to you.
Mr. Evans. Right.
Senator Burns. However you feel comfortable in doing that.
I would certainly suggest that. I am planning on supporting
you. I like your attitude. Your attitude is right out of the
oil patch and I can deal with that. Because we have had some
experience about that up in my home State of Montana.
So thanks again for your public service. And do you want to
respond to that communication?
And thank you, Mr. Chairman.
Mr. Evans. The only thing I would say is I have had the
experience of running a large system of institutions, higher
education along with health science centers. And I understand
the importance of communicating across boundaries.
And I was thinking last night, in fact, about the
importance of telecommunications and technology with respect to
education and how important I think it is even for the Commerce
Department to be talking maybe to the Department of Education
so they understand what kind of telecommunication and
technology might be available.
So that just carries further to your point that I think
there is all kinds of reasons for there to be an active dialog
between all of the important departments of the Executive
Branch of government. And there is a lot of intragency, inter-
department activity, dialog, discussion and opportunities to
share when resources can support and help in other departments.
Anyway, I appreciate your comment. I hear where you are coming
from, and I will hopefully be one that is considered to be very
active in talking to all the departments. Thank you.
Senator Burns. Thank you, Mr. Chairman.
Senator Hollings. Senator Rockefeller.
Senator Rockefeller. Thank you, Mr. Chairman.
Mr. Evans, steel again. From a philosophical point of view
as we discussed, it is an interesting situation. You used the
word to promote industry in describing your mission. And that
has a broad meaning.
When you are discussing the steel industry and the enormous
import surges which have taken place in the last several years
and which are still at record highs. I mean, there has really
been no diminution.
What you find is that the State Department, the National
Economic Council, the U.S. trade representative, the Export/
Import Bank, which I will explain in a moment, and others,
Treasury, notably Treasury, always take the macroeconomic world
view. And there really is nobody in a government agency, who
runs a government agency, who can promote American industry in
the sense of making sure that it survives other than the
Commerce Department. That is just the way it works.
Nobody stands up for steel so to speak except the Commerce
Department if it so chooses. Your predecessors, both of them,
wanted to and did, but were undercut by the Clinton
Administration which declined to because of the influence of
Treasury and others in the second term international legacy
pursuit. We discussed that. And I told you that it had just a
devastating effect not only less importantly on me, but on the
steelworkers in my State.
So the Export/Import Bank--and your deputy secretary serves
on that--has just given $18 million to China Steel Construction
for a new plant which they are putting $2 to $4 billion in. And
it is a matter of absolute outrage to the people of my State--
and should be to the people of any State where steel is
produced, in a major way. And that is at least 16 States which
is one of our problems. It does not come up to half of the
Congress or the Senate.
But you look at our steel industry. And from a private
enterprise point of view, it ought to be a model to you. And
you have served in it. ARCO or Alcoa I think you told me.
Mr. Evans. Armco.
Senator Rockefeller. Armco, I am sorry. So you know the
steel industry. And you know that unlike any other steel
industry in the world, not one single dime of Federal money has
gone into the productivity increases, the remodeling, the
complete--whether it is environmental, furnaces, whatever, it
has all been money which has been borrowed or taken from
profits and which can no longer be borrowed from banks. Because
banks will not make those loans.
I indicated to you in my opening statement that about half
of our steel industry, if two more go under, which I think they
are going to, about half will be in bankruptcy. Geneva came out
of this morning and I am happy for that. But when Bethlehem is
trading at about $1 stock, one really has to stand back and say
what is going on here?
Now, Italy produces steel--and substitute them for any
other nation in the world--they have not made a profit in a
generation or more. Whatever the difference is at the end of
the year, the government makes up that difference. So they do
not need to make a profit.
Now, I would think from an entrepreneurial perspective,
that would be really offensive. It is really offensive to us in
West Virginia. And hence, the whole concept of making sure that
import surges and anti-dumping circumvention laws are enforced.
I mean, people say that if you say something like that, you are
a protectionist or that you are doing something which is
regressive.
I would posit this to you. We import about two-thirds of
the oil that we use in this country, perhaps more. If the
United States were to make a decision, an inadvertent decision,
by not making other decisions, to say, ``Oh, well, the Middle
East has a lot of oil. Let us just import all of it.'' We would
never do that. We would never do that.
But in effect, that is what is happening in steel. We
import an enormous percentage of what we use in this country
now because it is dumped at lower prices than the cost of
production in the home country. And as I indicated to you
yesterday, Weirton Steel, which when we made it into an ESOP in
1982 had 13,000 people working for it. It now has 4,000.
Wheeling Pittsburgh Steel is bankrupt. If you want to ask Mr.
Gore why he did not carry the State of West Virginia, a large
part of it would come around to that and the effect on the coal
industry which feeds the steel industry in West Virginia.
Now, I do not want to inject politics into that, but it is
a very graphic example of how angry our people are at the
Export/Import Bank loan and the way steel import surges and the
steel prices was not dealt with by the present administration,
the Clinton Administration.
So, understand that my angst is very real. I go back to
what Vice Present-elect Cheney said, that we have to have a
steel industry to have a defense industry. You cannot go to war
in the Gulf or any other place and say, ``Korea, could you lend
us some steel so we can make some more whatever kind of
armaments?''
So, this is a very special type of industry. What we have
done is we have tended to go to trade cases, individually-
brought trade cases. They do not work well. They take forever.
They are just litigated to death. And the steel industry
disappears.
We could lose our steel industry, Mr. Evans. I say that in
all seriousness.
Now, what I would ask you is two things. One, that you
would in a sense make a commitment that you recognize that in
the promotion of American industry that that also involves the
promotion of keeping, as Chairman Hollings has indicated, that
manufacturing base of which there can be no more important
component than steel.
Second, that you would agree with me that if this industry
is, in fact, going to be saved, if we are not going to simply
lose all of it, that the government--and this is always a
difficult decision. And it would be more difficult, I think,
for a Republican government. On the other hand, clearly it did
not work with a Democratic government--has to somehow intervene
to be helpful. And that you bear some of that responsibility.
There is something called Section 201, which Chairman
Hollings knows very well. It is a very fair process. It
involves the International Trade Commission. It involves
countries only which are dumping steel illegally. That is the
1974 Trade Act. It is very straight and clear. It is against
the law.
The present administration decided to ignore it. And I hope
that you would say to me that you would be willing to consider
and perhaps promote not just sort of a generalized intervention
into this problem of your own intellect and energy, but also
take a very clear look at the Section 201 approach which would
do more to stop import surges than anything else I can think
of.
Mr. Evans. Thank you, Senator. You know in our discussion
yesterday, I talked a little bit about my background. I think
maybe one of the most important jobs I have had in my career
was working next to the furnace at Armco Steel in the ship
channel in Houston, Texas. So understanding that industry and
the people in that industry and the importance really, I think,
of that industry to this country.
There has been a lot of talk over the last 5 to 10 years
about this economy moving from an industrial-based economy to a
knowledge-based economy. I am not one that believes that that
means you turn your back on the industrial based economy or the
manufacturing base of this country and the manufacturing part
of this base of this economy.
I am disturbed when I hear that our laws are not being
enforced. I am disturbed when I hear that our agreements, our
trade agreements, are not being complied with. I am disturbed
when I hear that the big trade deficit that we have with China
and, you know, we have got six people, seven people, that are
watching that.
So what I will pledge to you is I will look at Section 201
and the implication of it as to the steel imports. But in a
more general kind of response to your comments, what I would
say to this Committee is that compliance is going to be an
absolute with me.
Now, I do not know how you can carry on--there is nothing
that will dispirit the American entrepreneur and worker--there
is nothing that will dispirit them anything more than thinking
that they are not on a level playing field. You know, we do not
mind competition. Competition is OK. But it is not OK if it is
not a level playing field. And my sense is there are some areas
going on out there in the world that it is not a level playing
field.
So, it is something that I have heard a lot about the last
48 hours. I look forward to working with you in particular on
steel, because I know it is of great concern to you. You are
exactly right. It not only impacts the steel industry. It
impacts the very national security of this country. It impacts
the coal industry and those workers.
So you have my pledge to work with you, have an active
dialog with you on this issue. And as I have a chance to review
it even further, I will look forward to talking to you about
it.
Senator Rockefeller. Thank you, Mr. Evans.
Thank you, Mr. Chairman.
Senator Hollings. Very good.
Senator Cleland.
Senator Cleland. Thank you very much, Mr. Chairman.
Thank you very much, Mr. Evans, for your insightful
comments. Let me just mention a few buzz words here. One of the
things about commerce in the couple of years I have been on the
Commerce Committee and certainly the 4 years I have been in the
Senate, that one has to realize as we move into the 21st
century is the impact of e-commerce, the impact of technology
on our society, the need for technological workers.
In my own interest, I mentioned the products from my State
that we sought to export, that we seek to find markets for
abroad.
In all honesty, I find it fascinating that our country, our
economy, has to import a lot of technological workers from
abroad to fill the 3- to 4-hundred-thousand high technology
jobs out there that are going lacking for workers.
Which brings us to more maybe your role as Chairman of the
Board of Regents of a great university system and that maybe
the key to economic growth and commerce, particularly e-
commerce, is growing our own high tech workers and providing
the kind of connectivity to the not only global marketplace,
but through the Internet for all of our workers.
If President-elect Bush's goal is to leave no person
behind, no community behind, is really to be fulfilled, which
is our basic wish, it is obvious if you look at America, and
certainly my State, there are lot of people that are not
connected.
I held a forum in South Georgia, rural Georgia, on the
whole point of high tech workers and whether or not rural
America, rural Georgia, was connected, particularly via the
Internet. I found it interesting that in urban America, and
even the urban poor, are more connected via the Internet than
shall we say anyone, wealthy or poor, in rural America or in
rural Georgia.
In the Commerce Department, there is something called the
Technology Opportunities Program, TOP, the TOP program, which
provides infrastructure and Internet access to disadvantaged
communities. And I think basically we are just talking
basically rural. Not particularly black, not particularly
Hispanic, not particularly white or particularly wealthy or
economically disadvantaged. But I think it is just basically
rural. It is hard to connect rural America with the world.
Fiber-optic cable is required. All kinds of Internet access
devices are required. And the cost seems to be higher in rural
America for that connectivity than if you were just living in
say a suburban part--urban part of America.
Well, the point being this forum highlighted for me this
little-known program that happens to be in your agency. I would
just like to know or to ask you to take a look at that as maybe
an opportunity through that program to facilitate connectivity.
Leave no community behind, no individual behind. And through
continued infrastructure and Internet access grants or help to
disadvantaged communities through these TOP grants. In other
words, continue to boost the American economy or the chance to
participate in the global marketplace.
As you well know, some rural or poor or disabled individual
sitting at home can through the Internet market goods abroad
and in effect have a job, have a sales effort and so forth.
So I thought I would just bring the TOP program, sir, to
your attention. Technology Opportunities Program which provides
infrastructure and Internet access to the disadvantaged
communities around our country. My attention was called to it
when I went into the rural portions of my State. And I will be
looking at that as a way to hopefully expand economic
development, e-commerce and access to the Internet from their
point of view.
I thought I would mention that to you, just highlight that
and underscore that. I do not have any further questions, but I
did have that one observation. And in this whole world of e-
commerce and the global marketplace that there is more and more
information to suggest that a certain portion of our culture,
our economy, is being left behind. And that is rural America.
And to the extent to which we could boost their chances for
connectivity is the extent to which that rising tide could lift
those boats too. Any comment or reaction?
Mr. Evans. Thank you, Senator. I appreciate you calling
that to my attention. Senator Rockefeller also called that
program, that worthwhile program, to my attention. I live in a
big State, as you know. And we have had big concerns in our
State about making sure that we leave no area behind.
So I know how important the issue is. I will give it my
attention. I am excited about some of the 3G technology that is
coming along that may help us penetrate these rural areas in a
more effective way, but it has to happen. I mean, we do not
leave anybody behind in this country.
And I think that I am in a unique position, if I am
fortunate enough to be confirmed, to help with this and also
let business understand how important it is for their
responsibility to make sure that we touch all of the
communities in this country.
So I am sure I will have an opportunity to talk to many
business leaders in the technology area and the
telecommunications area. And one of the issues that will be on
my mind when I talk to them is making sure programs are being
developed that reach every citizen in this great land.
Senator Cleland. Thank you. And I appreciate your insight
too into how both the private sector and the academic sector,
with maybe a little help from government as a catalyst, maybe
can with all three partners in effect working together, a lot
of good things can happen.
Mr. Evans. Well, it is probably one of the things I am most
proud of as my service on the board of the University of Texas
system. I spent a lot of energy and time talking to business
leaders trying to impress upon them their responsibility to
give back to this great country and do it in a way that also
helps them though in developing the labor force that they need.
So, we have had a terrific response at our system. The
grants and the research opportunities have increased
dramatically. I also checked and then you talked about it in
terms of a partnership that actually the University of Texas
system has participated in some of these programs from the
Department of Commerce while on my watch. And it has been
mostly our border universities like the University of Texas El
Paso, Brownsville, Pan American.
But they participated in some of these very worthwhile
programs to bring partnerships together and resources together
to develop some of this technology and reach these areas that
did need to be reached. So I thank you.
Senator Cleland. Thank you very much, Mr. Evans.
Thank you very much, Mr. Chairman.
Senator Hollings. Thank you.
Senator Wyden.
STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Mr. Chairman.
Mr. Evans, thank you yesterday for the chance to visit and
particularly your desire to work in a bipartisan way. As you
and I discussed, I think particularly with Senator Hollings and
Senator McCain's leadership, this Committee has really tried to
take the lead in terms of writing the rules for the new
economy. It has been our judgment that a lot of what applied to
the economy where people got up about 5 o'clock in the morning
and ate 10,000 calories and then did physical labor, a lot of
those principles do not exactly apply to the Internet and what
Senator Cleland appropriately focused on.
We have two big issues that your agency will have to play
an activist role on coming up and I would just like to get your
general feelings. At the end of October of this year, the
Internet Tax Freedom Act will expire. And there are many of us
who think it is extremely important to extend it for another 5
years, extend the moratorium on discriminatory taxes on
electronic commerce and would be willing in return to give the
mayors and the governors that have been concerned about the
impact on the revenue base a chance to have their proposals
considered as well, with the Congress voting on whether or not
to let them go into place.
What would be--and I know this is new to you--what would be
your general reaction to a bipartisan proposal that would come
from this Committee with those two components, extending the
moratorium and discriminatory taxes on electronic commerce for
another 5 years, and in return making sure that the mayors and
the governors got a fair shake to have the Congress consider
and vote on any proposal they would have with respect to sales
tax and other local taxes?
Mr. Evans. On Internet taxation, President-elect Bush's
position has been, as we discussed yesterday, that he is
opposed to any Internet access tax. And he supported the
moratorium on Internet taxation of commercial goods. And that
moratorium expires later on this year.
Obviously, that is going to be on all of our minds as we
approach that date. We all understand the growing role that the
Internet is playing in our society today in terms of delivering
goods and services to our citizens.
I am one that we are all sensitive though to the impact it
has on other businesses that establish proprietors. We are
sensitive to what it might mean to the tax base as you are
suggesting, the cities and the counties and the States. And so
those factors needs to be considered.
What other factors need to be considered I am not certain.
Because it is not something I have spent a lot of time really
reviewing or studying or analyzing, but it is obviously
something that I will be spending some time on, I look forward
to that.
I think your proposal of bringing the mayors and the
governors into the mix makes imminent sense. They are the ones
that are being impacted on the local level. They have got their
revenue projections to worry about and think about and where
their revenue will come from to provide the services of the
citizens of their counties or cities or States needs.
So, the important thing is to get all of the right
constituents to the table to talk about this very important
issue. And also kind of a general understanding with where
Commerce is going in the years ahead.
Senator Wyden. Well, I hope you will get us a proposal on
this promptly, because both Senator McCain and Senator Hollings
spent a lot of time in discussions at the end of last year.
We feel we are pretty close and have something that would
be important for the entrepreneurs in the new economy that hold
so much promise and at the same time would be fair to the
mayors and the governors by saying if you have got a proposal,
we will consider it. We are not going to allow for a new tax
hike without a vote, but we will consider it.
Along the same lines, I would like to ask you about privacy
as well. Because in your emphasis in terms of free markets and
free enterprise, the key, of course, to free enterprise is for
citizens to have confidence that they are being treated fairly.
And as you know, concerns today about privacy are enormous.
Senator Hollings has a good bill. Senator McCain has been
part of an effort again to come up with a bipartisan approach.
We feel that you obviously need to get the consent of the
individual and they ought to have access to their records and
provisions for security and enforcement. And again, I know
because this is all new to you, I would just like this morning
to have you outline your general feelings about how you are
going to approach this privacy issue.
Because I think Fritz Hollings and John McCain have done
very good work on these new economy issues over the last year
or so. And with your leadership, we could on both of these
issues--the Internet Tax Freedom bill and the privacy issue--we
could get out of this Committee bipartisan legislation and put
something on the President's desk that he would feel good about
signing. And since the red light is on, why do you not just
give me your feelings about privacy?
Mr. Evans. I think my general approach will be to work with
Chairman Hollings and Chairman McCain and work with them.
Senator Wyden. That is generally good.
Mr. Evans. And yourself, Senator. Look, like I said in my
opening comments, I was very impressed by the bipartisan spirit
of this Committee as I went and visited each and every Senator
except Senator Inouye I have not had the chance to meet yet.
Privacy is a very, very important issue. It needs to be
addressed. We need to make a decision. We should not continue
to procrastinate, put it off.
So, it is an issue that I can see a lot of work already has
been done on it. I would just like to get myself up to speed
and be one of those that helps push it forward. Just like I
think and respond to your earlier comments about taxation, this
is not something that we should wait until October, September,
whenever, to talk about it. We need to get our arms around it
now and begin the discussion. We should not wait until the last
minute to make a decision.
So, anyway, generally I look forward to working with you on
these important issues to you. They are important to me and
other distinguished Senators on this Committee. And hopefully,
we can come to some quick conclusions.
Senator Hollings. Very good.
Senator Brownback.
STATEMENT OF HON. SAM BROWNBACK,
U.S. SENATOR FROM KANSAS
Senator Brownback. Thank you, Mr. Chairman. I have a
statement I would like to submit for the record as well.
Senator Hollings. No objection.
[The prepared statement of Senator Brownback follows:]
Prepared Statement of Hon. Sam Brownback,
U.S. Senator from Kansas
Mr. Chairman, I am delighted to welcome Don Evans to Washington and
to this Committee. Mr. Evans has had a distinguished career in
business, and he will serve President-elect Bush well as Secretary of
the Department of Commerce.
I trust that under Mr. Evans' leadership, the Commerce Department
will serve as the focal point for fostering job-creation,
entrepreneurship, export-expansion, and technological innovation. In
particular, there are several issues which I hope will receive primary
attention from the Commerce Department during Mr. Evans' tenure.
First, the administration needs to increase export opportunities
for America's manufacturers and farmers. I strongly encourage the Bush
Administration to make the expansion of NAFTA to the entire Western
Hemisphere a top and immediate priority. From its failure to
aggressively push for Fast Track to the debacle in Seattle, the Clinton
Administration missed many opportunities to open more markets for U.S.
goods and services.
I hope that the Bush Administration comes to the Hill early to push
for Fast Track so that our trade negotiators have the tools necessary
to knock down barriers to U.S. exports. And I hope that the Bush
Administration embraces free trade as a means of improving not only our
economy, but the economies of other nations as well.
Second, the United States is years behind Europe and Japan in terms
of identifying and allocating spectrum necessary to provide third-
generation wireless services. While the World Radio Conference
identified several bands that could be used for third-generation
services, in the United States, two of those bands have incumbents
occupying the spectrum.
In the case of the 1710-1885 Megahertz band, the Department of
Defense and other government agencies currently use most of this band
for national security and other purposes. It is critical that the
Commerce Department, through NTIA, determine whether third-generation
wireless services can coexist in the 1755-1850 band with the incumbent
government operations. This determination is scheduled to be made by
July of this year. It is critical that the determination not be
delayed. Despite the lead that the U.S. currently maintains in the
Internet and Internet technology, we risk ceding pre-eminence in
advanced wireless Internet services and technology if we do not make
the spectrum necessary for third-generation services available in a
timely manner.
Finally, Mr. Chairman, I would ask that, as Commerce Secretary, Mr.
Evans help us ensure that rural areas are not left out of the broadband
revolution. Broadband services have the potential to change the way we
communicate, work, learn, and shop. But, while broadband services are
being deployed in an increasingly rapid manner in urban and densely-
populated suburban areas, rural communities are being left behind.
The most significant economic development issue that rural areas
will face in the next 5 years is whether businesses will have access to
the same high-speed Internet services in rural communities that they
have in urban and suburban areas. The availability of broadband
services will be as critical an infrastructure issue as whether a
community has good access to highways, railroads, and airports.
Mr. Evans, thank you for appearing before us today. I look forward
to your speedy confirmation by the Senate.
Senator Brownback. Mr. Evans, thanks for coming to the
Committee. You have presented a number of very good answers to
tough questions. I have got a couple of questions on narrow-
focused industries.
One is we have got a little caucus called the wireless
caucus. And it is the industry that is developing around
wireless communications. Their lead issue that they have right
now is spectrum and availability of spectrum to go into the
next generation of wireless services. So that I guess all of us
can mindlessly be connected all the time anywhere wherever we
are.
There is some fear to that I have. I guess when you just
turn the device off, but be able to have access to it. People
need more spectrum. That is going to be a major issue for you
in the department is the allocation of spectrum for this next
generation of wireless services. I want to raise it to your
attention. I hope you will be open to providing the necessary
spectrum so that that next level of connectivity over the
Internet, wireless, video wireless, a whole series of
innovations within that industry will move forward. And I would
invite some of your comments if you would have any on that
industry.
Mr. Evans. You bet, Senator. And again, I look forward to
visiting with you in-depth in the near future. I know how
important that issue is. I have just quite frankly learned
about it in the last 48 hours or so. But I understand the issue
of third-generation technology. I understand that Asia and
Europe really are out in front of us on this particular type of
technology. And I understand the limited amount of spectrum
that we may have to market to auction.
I understand that a substantial amount of spectrum has
already spoken for within government. I think that just we need
to put a lot of emphasis on the management of spectrum and how
we are going to manage this very, very important resource, not
in the days ahead, but in the decades ahead. Because this will
be a very important resource as to how communication, how
information, flow; how data, video, voice flows around this
country, and indeed, around the world.
So, I view it as a very valuable resource that this country
has. We have to be very, very comfortable when it comes to how
we are going to auction it, how we are going to manage it. And
there needs to be a long-term strategic plan as to how it is
managed and how it is auctioned and not just, OK. We have got
this much spectrum. Why do we not go auction it this summer and
see what the highest bidder is?
So I am sensitive to that issue. I mean, it falls into the
telecommunications technology area. I know that it is in our
department. I know that it requires some immediate attention.
Because we are about to move into a--recommend to the FCC the
auction of some of the spectrum.
Senator Brownback. I appreciate your interest and
sensitivity to it. Because I think that issue is going to
determine the future of that next generation of wireless
services. And there is great competition for those spectrums.
And so it is really going to take some thoughtfulness. Because
the decisions made today put in place what we can or cannot do
for the next couple of decades, I think, in this whole
industry.
And we need to keep out in front on it. We need to keep
leading in it. And I think it can add a level of productivity.
It can add a level of comfort and communication to people that
we have really only dreamed of in the past. But it is
available. It is there. But we could also limit it such that we
will not be able to do it if we do not do it right.
So I appreciate your interest and your thoughtfulness on
it, because it is an issue that is out there. And a lot of
times we spend time looking back on industries that we want to
try to change. Here is one we can shape going into the future
and we need to do it right.
A second one that is somewhat similar is high speed
Internet access, particularly in our less populated areas in
the country. We had a hearing in this Committee several months
ago about access to high speed Internet, and found that in the
suburban and urban areas, generally really in the suburban
areas, there was as much as 70 percent penetration of high
speed Internet access. And in the rural areas, it was less than
5 percent access.
So the ability to download large quantities of material in
rural areas. or be able to get information as quickly as you
would want it, is hindered. There are a series of bills that
have been put forward, some subsidies, some deregulatory, some
tax incentives, on trying to get more deployment of high speed
Internet into less populated areas.
We need your help on this. We do not need a divide across
the country based on urban and rural. And with your background
and where you are from, I think you can be sensitive to this.
This is currently the situation. I would hope you would work
with us. The approach I am supporting is a deregulatory
approach toward it, but you would add some real focus and
effort and intensity to this so the problem does not continue
to grow and exacerbate and cause difficulty for economic
activity and other type of activities in rural areas.
Mr. Evans. I will do that, Senator, absolutely. And I look
forward to working with you on that issue.
Mr. Brownback. Thank you. And welcome. You are going to do
an excellent job as Secretary of Commerce and I look forward to
working with you.
Mr. Evans. I appreciate it, Senator. Thank you.
Senator Hollings. Very good, Mr. Evans.
The Members to be appointed next week have yet had an
opportunity to confer or ask questions. Whether or not that
will require a further hearing, it will be up to our regular
Chairman. We will have that--I hope--FBI report, ASAC's report,
within the next 2 weeks. And Chairman McCain will take over.
Once again, I want to thank him for his leadership. And thank
you, very, very much for your appearance here today. It is the
Committee's hope that we can confirm you that first week after
the inauguration.
Senator McCain.
Senator McCain. Senator Hollings, I just want to thank you.
I look forward to the continued close working relationship
between our staffs, and I thank you again for holding this
hearing on a very important position.
Senator Hollings. The record will stay open for any written
questions. The Committee will be in recess subject to the call
of the Chair. Thank you.
[Whereupon, at 12:05 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Bill Frist,
U.S. Senator from Tennessee
Thank you, Mr. Chairman. It is a great honor to be returning to the
U.S. Senate and to the Senate Commerce Committee for the 107th
Congress. Six years ago yesterday, I was sworn as a new Senator and
feel privileged that the people of Tennessee have endorsed my return.
I am most pleased to welcome my friend, Don Evans, to the Commerce
Committee this morning. President-elect Bush has nominated him to a
position of great responsibility. The next Secretary of Commerce will
have a critical role in expanding technology and innovation to enhance
the United States' international competitiveness. Just as Malcolm
Baldridge, the father of the American quality revolution proved almost
two decades ago, the Commerce Secretary can have an extraordinary
effect on the productivity of American business.
I applaud President-elect Bush for finding the best nominees for
his new Cabinet. It is especially clear that this nominee embodies all
of the attributes and virtue necessary for success. This is truly a
gentleman who believes in giving back to his community and his nation
and I am grateful for his willingness to serve.
Don, now comes the hard part. Winston Churchill quipped before the
House of Commons that ``I have nothing to offer but my blood, toil,
tears and sweat.'' As my colleagues on this Committee will attest,
Washington is a city that demands nothing less. I look forward to your
quick confirmation and working with you in the years to come.
Thank you, Mr. Chairman.
__________
Response to Written Questions Submitted by Hon. John McCain
to Donald L. Evans
Census
Question 1. As you well know, the census, specifically the issue of
statistical sampling, is controversial. The Supreme Court has ruled
that the Census Bureau cannot constitutionally use statistical sampling
for census counting purposes. I support a constitutional census plan
that accurately counts every person. What means do you plan to use to
ensure an accurate census count, especially in those locations where
there have been documented undercounts in the past?
Answer. To ensure an accurate and constitutional census count, I
believe Congress and the administration must adequately fund and
support Census Bureau efforts to increase the participation and
response rates to the census. I understand that over the past decade,
the Census Bureau spent over $7 billion to fund the many activities
leading up to, and carrying out, the 2000 Decennial Census. Current
Commerce Department officials describe the 2000 Census as the most
successful census in history, with the lowest undercount ever. Looking
ahead to the 2010 Census, the apparent success of the 2000 Census
suggests the need to continue emphasis on use of adequate numbers of
trained, temporary census workers; public awareness and educational
campaigns; and other methods to encourage people to respond. Successful
implementation of the American Community Survey initiative also should
contribute to an even more accurate count in the 2010 Census.
Foreign Trade Missions/Political Activities
Question 2. Will you commit to this Committee that in an Evans
Commerce Department trade mission invitations would be issued on the
basis of merit and in accordance with clear and objective criteria?
If so, what would you do to ensure that your commitment is
followed through?
Answer. As you may be aware, Secretary Daley put in place major
changes in the way that trade missions are conducted. He has advised me
that his purpose was to ensure that invitations are based on merit in
accordance with clear, objective standards. The current policy thus
requires written criteria for selection of participants, prohibits
consideration of political activities, and requires selection of
participants by a majority of career Department personnel. This appears
to be a sound approach, and I am committed to ensuring that it works
effectively. I will work with the Office of Inspector General, the
General Accounting Office, and others to evaluate the effectiveness of
the current approach and to make further improvements where necessary.
Question 3. Would you please supply the Committee in writing your
criteria for selection as a participant in a Department of Commerce-
sponsored trade mission?
Answer. I will apply the general criteria noted above for selecting
participants. I understand that additional, specific criteria for
selection as a participant are also established to meet the goals of
individual missions. These specific criteria for selection are
published in the Federal Register for each mission. Because they are
mission-specific, I cannot provide all of the criteria in advance. I
also understand that the Office of Inspector General is currently
engaged in a review of the implementation of the new trade mission
policy. Until that review is completed, I believe it would be prudent
to maintain the new system for publishing the criteria for
participation in specific missions.
Question 4. At about the time of Secretary Daley's confirmation
hearing before this Committee, significant allegations had been raised
that the Commerce Department was being used by certain individuals for
fundraising purposes. In the past year, at least one allegation has
surfaced that the former head of the Commerce Department Office of
Business Liaison sent fundraising letters to foreign trade mission
participants. I cannot judge the accuracy of this allegation, but it
disturbs me nonetheless.
Mr. Evans, can you tell me what safeguards you would
propose to ensure that political activities do not occur in conjunction
with Commerce Department trade missions?
Answer. As stated in my response to Question 2, the current
procedures include specific prohibitions against consideration of
political activities in the selection process. The Inspector General's
office is currently looking at implementation of the new procedures,
and I expect that office to continue periodic reviews to point out
problems and to ensure compliance.
Question 5. At his nomination hearing, former Commerce Secretary
Daley pledged to hold a 30-day ``top to bottom review of the
procedures, rules, and criteria used to govern'' foreign trade
missions. Would you pledge today to institute a 30-day review of the
procedures, rules, and criteria used to govern foreign trade missions
in order to ensure the integrity of the foreign trade mission selection
process?
Answer. Given the institution of new procedures since Secretary
Daley conducted his review, a better approach is to obtain the results
of the Office of Inspector General's on-going work in this area before
instituting another 30-day review of the type previously conducted. I
will then review the new policy and procedures put in place by
Secretary Daley and refine and improve the policy as needed to ensure
the integrity of the foreign trade mission process.
Question 6. There has been a suggestion made that the Department
could institute a voluntary system where individuals and the firms or
entities they represent could be asked to agree not to make any
political contributions during a period beginning when they are invited
to participate in a foreign trade mission and ending 6 months after the
mission is completed. Please comment on this proposal, noting with
specificity why you would or would not support it. If you do not
support it, please outline any suggestions you have regarding this
subject.
Answer. Should I be confirmed as Secretary of Commerce, I will
consider all proposals for improving the selection of trade mission
participants. I am committed to ensuring that politics do not enter
into the decisionmaking process, and I will strive to isolate the
selection criteria and decisionmaking process from all political
influence. I would not, however, favor a policy of asking candidates to
refrain from making political contributions. Potential invitees who
satisfy objective, relevant selection criteria should be treated no
differently than other candidates merely because of their independent
political activities, including their political contributions. Such a
policy could effectively exclude many qualified individuals or their
companies from participating, to the detriment of the trade mission
program.
Question 7. Would you agree to a periodic review of the
Department's foreign trade mission selection process by either the
Inspector General of the Department of Commerce or the General
Accounting Office to ensure that the Department's foreign trade mission
procedures, rules, and criteria are appropriate, and that the
Department is following them?
Answer. Yes, please see answer to Question 4.
Question 8. You are probably aware of the ongoing litigation
regarding Freedom of Information Act requests concerning Department of
Commerce foreign trade missions. The foreign trade mission litigation
appears to me to be an unfortunate and easily avoidable instance of
administration stonewalling in the face of these document requests. I
would request that you commit that in all instances the Department of
Commerce be as forthcoming as possible in response to Commerce
Committee requests for documents, as well any other legal requests made
to the Department.
Answer. I understand that current Department policy requires
recordkeeping procedures and automatic public availability of documents
without Freedom of Information Act requests. Until further review, I
believe this is the appropriate policy. If confirmed, I will be as
forthcoming as possible in response to the Committee's requires for
documents, as well as any other legal requests of the Department.
Question 9. In a sworn affidavit, a Commerce Department career
civil servant who had supervisory authority over all Freedom of
Information Act matters stated that the Office of the General Counsel
staff ``improperly assumed and exercised the final authority to approve
or disapprove the release of documents responsive to FOIA requests
submitted by Judicial Watch.'' Many times the FOIA staff was not
notified what documents had or had not been released, according to the
affidavit. The employee further asserted that the General Counsel's
procedure in this instance ``was and is inconsistent with the Commerce
Department's written, prescribed rules for responding to FOIA
requests.''
Can you supply the Committee with these rules?
Will you assure this Committee that they will be followed
in all circumstances?
Answer. The Department's published rules for responding to FOIA
requests are attached. It would be my policy that the Department must
follow its own rules when responding to FOIA requests.
Earmarking Corporate Waste
Question 10. As you are probably aware, I believe that earmarking
Federal funds is wrong because it gives special benefits to certain
groups of individuals when others may be more in need or better
qualified in the case of research or a similar, project. I strongly
believe that the expenditure of Federal money should be made solely on
the basis of national priorities determined in an open fashion based on
a standard set of criteria that provide no undue advantage to any one
entity or locality.
Will you pledge to work to ensure that Federal funds are
distributed on a merit basis and not due to earmarks?
If so, does that pledge include ``congressional priorities'' that
are itemized in committee report language?
If not, please state why.
Answer. I support the funding of programs on the basis of merit and
the award of grants in an open and transparent process based on
objective criteria. I will work with the Congressional authorizing and
the appropriating committees and subcommittees with jurisdiction over
the Department of Commerce to achieve consensus on the nation's
priorities and specific goals for Commerce Department grant programs,
and to ensure that funding decisions are based on merit.
Question 11. The 2001 budget for the National Marine Fisheries
Service is approximately $519 million. Of that, $377 million was
earmarked for special projects. While much of this funding may go to
worthwhile fisheries programs, other equally important research and
management programs will not be funded because a fair and equitable
allocation process was circumvented. Mr. Evans, sustainable and
competent management of our nation's fisheries is difficult. It is made
more difficult unnecessarily when the routine, merit-based
prioritization spending process is ignored.
How do you plan to address this growing problem at the National
Marine Fisheries Service?
Answer. While I was not a party to the decisions surrounding the
allocation of resources for National Marine Fisheries Service in fiscal
year 2001, I understand that NMFS received a substantially increased
budget. I hope that such increased funding can and will help the
Service to address the host of fisheries and endangered species
management issues facing the nation.
As I expressed in response to the previous question, by working
collaboratively with the Department of Commerce's Congressional
authorizing and the appropriating committees, I trust we can achieve
consensus on a fiscal year 2002 budget that will reflect the
Department's natural resource stewardship priorities.
Electoral Reform
Question 12. It was recently discovered during the post-election
drama that the National Institute of Standards and Technology (NIST)
previously published two reports criticizing the lack of uniform
standards in our national voting machines--one in 1978 and the other in
1988. Upon learning of these reports, I have been working closely with
NIST to encourage the establishment of voluntary standards for voting
machines used in Federal, State and local elections. What are your
plans for such action at the Department of Commerce?
Answer. The election and its aftermath rightly focused attention on
the mechanics of voting. Historically, issues associated with voting
standards have been addressed at the State level. I understand that
efforts will be undertaken in both the House and the Senate to study
voting standards matters during the first session of the 107th
Congress. The ultimate role of the National Institute of Standards and
Technology will depend largely on the overall decisions made by
Congress on whether and how to address standardizing voting machines
and processes. I would welcome the opportunity to deploy the expertise
found within the National Institute of Standards and Technology to
assist the States and Congress to achieve their goals in this area.
Trade
Question 13. In the last Congress, President Clinton signed into
law a provision to the Agricultural Appropriations bill that shifts
antidumping duties from the general fund to the petitioning U.S.
companies in antidumping cases. This legislation would have diverted
almost one-half billion dollars from the general fund last year.
Concerns have been raised that this provision will spur a number of
frivolous antidumping and countervailing duty cases. In addition, a
number of American trading allies, including the European Union and
Japan, have objected to this legislation stating that it violates U.S.
WTO obligations.
Would the Bush Administration support a repeal of this
legislation?
Answer. The provision in question raises a number of concerns,
including whether it is appropriate on a permanent basis to earmark
general revenues for narrow groups of beneficiaries, and whether U.S.
exporters will be exposed to retaliatory trade action if the provision
is found to be inconsistent with U.S. trade agreement obligations. At
this time, however, President-elect Bush has not determined whether to
propose a repeal of this legislation, or to support a repeal if such
action is proposed in Congress. That determination must await a more
thorough analysis of the consistency of the legislation with U.S. trade
agreements, its purpose, and economic effects.
Question 14, part 1. President-elect Bush faces a number of major
trade issues left over from the Clinton Administration, including free
trade negotiations with Chile and Singapore, the Free Trade Area of the
Americas negotiations, re-starting the next round of World Trade
Organization (WTO) negotiations, and getting Congressional approval for
the U.S.-Vietnam bilateral agreement and the U.S.-Jordan free trade
agreement. The President-elect has also indicated that he intends to
expand this ambitious trade agenda.
What are the major trade objectives of the Bush
Administration?
Answer. Among the top priorities of the Bush Administration will be
to secure fast-track trade negotiating authority that will allow the
United States to speak with a unified voice in international trade
negotiations, and to secure sound trade agreements based on that
authority. The Bush Administration will seek to expand trade through a
hemispheric free trade initiative in the Americas and through the
launching of a new round of negotiations under the auspices of the
World Trade Organization. The Bush Administration will continue to
support the admission of the People's Republic of China and Taiwan to
the World Trade Organization. Vigorous enforcement of our trade remedy
laws will also be a priority.
Question 14, part 2. Where do you foresee opportunities for
embarking on future negotiations for free trade agreements?
Answer. The Bush Administration will seek market-opening
opportunities with any nation or group of nations committed to free
market principles and trade liberalization on a reciprocal and fair
basis. We will pursue market-opening opportunities for our services,
agriculture, and manufacturing sectors. We will also seek elimination
of tariffs on high tech goods and services and the removal of non-
tariff barriers that hinder the export and deployment of these products
and services.
Question 15. Ambassador Barshefsky, the current United States Trade
Representative, has stated that the incoming Bush Administration may
want to pursue a strategy of negotiating agreements and then sending
them to Congress for ratification, instead of pursuing general ``fast-
track'' legislation. Many of our trading partners, however, are wary
about negotiating trade agreements with the United States without
existing ``fast track'' authority.
Will the Bush Administration introduce ``fast track''
legislation this year?
Does the Bush Administration view ``fast track''
legislation as a necessity for its international trade agenda?
Answer. The Bush Administration will work in a bipartisan fashion
to secure ``fast-track'' trade negotiating authority this year. This
authority is necessary for the achievement of an international trade
agenda that serves America's interests.
Question 16, part 1. Last year, the Clinton Administration
negotiated a free trade agreement with Jordan that includes
controversial labor and environmental provisions. Specifically, this
agreement includes provisions that would allow the United States to
implement trade sanctions against Jordan if it does not effectively
enforce Jordanian labor and environmental laws. The Clinton
Administration has hailed this free trade agreement as a model for
future free trade agreements, including current negotiations with
Singapore and Chile.
Does the Bush Administration support the use of these
provisions of the Jordan Free Trade Agreement as a model for future
U.S. trade negotiations?
Answer. The Bush Administration will carefully review all aspects
of the Jordan Free Trade Agreement, including its provisions on labor
and environmental matters. Generally, imposing sanctions is not the
best way to achieve progress in these areas. Until the implications of
these provisions are fully analyzed, however, it is premature to
comment on their applicability to future trade agreements.
Question 16, part 2. How does the Bush Administration intend to
deal with pressure by environmental and labor groups to use trade
agreements to address labor and environmental standards?
Answer. The Bush Administration will consider all reasonable
proposals to address international labor and environmental issues. In
our view, the best way to address labor and environmental issues abroad
is not through trade sanctions, but through international agreements.
We must remain on guard against countries using labor and environmental
standards as an excuse to raise protectionist barriers. Indeed, a
primary goal of our trade agreements program is to raise living and
working standards everywhere.
Question 17, part 1. Recently, a number of concerns have been
raised that existing United States antidumping laws do not give
consuming industries an appropriate role in antidumping and
countervailing duty investigations. For example, it has been alleged
that United States steel-consuming companies are not given an adequate
voice in antidumping and countervailing duty trade cases, despite the
fact that the steel-consuming industries employ 40 Americans for every
1 American employed by steel-producing companies. In addition, our
foreign trading partners have initiated a number of WTO cases against
American antidumping laws, and urged that the United States revise its
antidumping and countervailing duty laws.
Could you describe how the Bush Administration will ensure
objective and fair antidumping and countervailing duty investigations
that will take full account of the prevailing economic conditions?
Answer. Consideration of prevailing economic conditions in the
context of unfair trade cases is generally the responsibility of the
International Trade Commission, an independent agency. It will be the
policy of the Bush Administration to administer the unfair trade laws
fairly and impartially, taking into account prevailing economic
conditions as required by applicable law.
Question 17, part 2. Could you discuss how the Bush Administration
will respond to foreign pressure and recent WTO rulings concerning
American antidumping laws?
Answer. Foreign pressure is irrelevant to the administration of the
antidumping laws. The Bush Administration will administer these laws
fairly, impartially, and in accordance with U.S. obligations under the
WTO Agreements. We will vigorously defend foreign challenges to all
U.S. laws, including our antidumping laws.
Question 17, part 3. Do you foresee a need to revise the United
States' antidumping and countervailing duty laws to ensure that they
are compliant with our WTO obligations?
Answer. We will review all applicable WTO rulings concerning U.S.
antidumping and countervailing duty laws and, where necessary or
appropriate, propose legislative or administrative changes to ensure
that these laws operate in accordance with our WTO obligations. I do
not have any such proposals to make at this time.
Question 17, part 4. Consuming industries have expressed concerns
that trade restrictions have been imposed without adequate attention to
the needs and interests of consumers in this country. Could you please
discuss ways to ensure that the Department can ensure that the
antidumping investigatory process is inclusive of the views of all
affected industries, while still ensuring the integrity of the process?
Answer. The antidumping and other trade laws establish the
framework for the conduct of investigations, for the participation of
interested parties, and, where necessary, for the imposition of trade
remedies. It is vital that these investigations be conducted fairly and
impartially, and in accordance with law. To the extent trade laws
permit interested parties and others to express views on the merits of
pending cases and for the Department to take those views into account
in the process, we will do so.
Question 18. In June 1999, a coalition of domestic oil producers
represented by Save Domestic Oil, Inc. filed antidumping and
countervailing duty cases against crude oil from Iraq, Mexico, Saudi
Arabia, and Venezuela. The Department of Commerce dismissed these
petitions in August 1999. On September 19, 2000, Judge Thomas J.
Aquilino, Jr. of the U.S. Court of International Trade instructed the
Department to re-examine industry support for the petitions. The
Department has appealed this case, and it is still in litigation. It
has been alleged that Tom Brown, Inc. is a member of the Permian Basin
Petroleum Association, which Save Domestic Oil lists as an association
which has ``agreed to support Save Domestic Oil.''
As Secretary of Commerce, what actions do you intend to
take to ensure that the Department of Commerce's investigation into
crude oil dumping, and the resulting legislation, is handled in an
unbiased, objective, and fair manner?
Answer. If confirmed as Secretary, I will do what is necessary to
ensure that the trade remedy laws are, in all cases, administered in an
unbiased, objective, and fair manner. As for the specific case to which
you refer, it is my understanding that there is no antidumping
investigation of crude oil imports currently before the Department.
Even if the proceeding involving Save Domestic Oil is remanded to the
Department, I would not expect to be involved in it, because I will be
generally disqualified from particular proceedings involving Tom Brown,
Inc.
Export Controls
Question 19. A major issue concerning the Department of Commerce
concerns export controls. In the last Congress, a number of bills were
introduced, including legislation intended to establish a new Export
Administration Act. The June 1999 Department Inspector General's report
stated that the ``intelligence community does not review all dual-use
export applications or always conduct a comprehensive analysis of
export license applications it does review.''
Could you describe your views of how the Department should
interact with the Department of Defense and the State Department in the
area of dual-use export applications?
Answer. In the past, the Department of Commerce has been the lead
decisionmaker among the involved Departments in licensing dual-use
exports under the Export Administration Act and Export Administration
Regulations, while the State Department has been the lead agency for
licensing items on the Munitions List. I understand that the
Departments of State and Defense participate regularly with the
Commerce Department in reviews of dual use export issues, with an
established mechanism for resolving the relatively few questions that
are not decided by consensus at the working level. Close cooperation
among these three agencies, with support from the intelligence
community and other relevant agencies, is essential to an effective
export control and licensing system. I thus anticipate that the
Commerce Department will continue to lead a joint effort regarding dual
use items, with enhanced integration of information from the
intelligence community as necessary.
Question 20, part 1. One major piece of legislation that was
introduced in the last Congress to deal with recent export control
problems was S. 1712, the Export Administration Act. I had a number of
problems with this legislation. It ultimately did not pass, and instead
a 1-year renewal of the old Export Administration Act was enacted. The
1-year renewal expires on August 20, 2001.
Could you discuss your plans for establishing a regime to
guide the process for approving or rejecting applications involving
items on the Commerce Control List?
Answer. We will follow the existing licensing framework, at least
until further review suggests the need for significant change. Within
that framework, my general approach will reflect the principles that
have been outlined by President-elect Bush: wherever there is no
national security interest at stake, exports will be permitted; but
wherever national security is truly at stake, exports will be subject
to appropriate levels of control, with serious penalties for
violations. In addition, the Bush Administration will work to
strengthen multilateral cooperation to control proliferation of the
most critical technologies.
President-elect Bush has proposed the establishment of the
President's Technology Export Council (PTEC) to advise him on the
implementation of the export control laws. The mission of PTEC will be
to ensure that accurate and timely information is provided to the
responsible export control officials concerning trends and issues
involving advanced technology items.
President-elect Bush also expressed support for renewal of the
Export Administration Act along the lines proposed by Senators Gramm,
Enzi, and others last year. Renewal of the EAA will be a high priority.
We look forward to working with you, Senator Gramm, Senator Enzi and
others to achieve a consensus on EAA reauthorization.
Question 20, part 2. In a revised Export Administration Act, what
would you like to see your role be vis-a-vis the Secretary of Defense
in deciding what dual-use commodities should be placed on this list?
Answer. In a revised Export Administration Act, I would expect to
see my relationship with the Secretary of Defense, like that with the
Secretary of State, to continue to be one of close consultation
regarding the treatment of items on the Commerce Control List, but with
final responsibility for licensing decisions and administration resting
with the Commerce Department. As is currently the case, any
disagreements would be resolved through an inter-agency process.
Question 20, part 3. Do you support the use of a ``foreign
availability or mass market status'' designation to delist items from a
Commerce Control List?
Answer. Yes, I support the discretionary use of a ``foreign
availability or mass market status'' designation to delist items from
the Commerce Control List.
Question 21, part 1. On August 3, 2000, the Clinton Administration
revised the policy for exporting computers. Concerns have been raised
that this new policy allowed computers performing up to 28,000 million
theoretical operations per second to be exported to ``Tier III''
countries, such as China, without government review. Experts who study
nuclear proliferation have alleged that this new policy will benefit
China's strategic nuclear warhead modernization and missile program.
Could you describe the new administration's policy with
regard to the export of computers to countries considered national
security or proliferation risks?
Answer. On January 10, 2001, the current administration made
further significant and wideranging changes to the high performance
computer (BPC) export control policy of the United States. The incoming
Bush Administration will closely examine these changes and the
implementation of the revisions by the Department of Commerce.
That review will be conducted in light of President-elect Bush's
position that computer export controls should not be based on technical
specifications that consistently lag behind technological developments,
resulting in unilateral U.S. restrictions on widely available
technologies. At the same time, under the President-elect's proposals,
wherever security is truly at stake, exports will be subject to
appropriate levels of control, with serious penalties for violations.
Question 21, part 2. Are there actions you would recommend to
ensure that the existing United States export control policy cannot be
used by nations to aid their weapons development programs?
Answer. Multilateral cooperation is essential to control the
proliferation of the most critical technologies. I thus would seek to
strengthen efforts to obtain multilateral solutions to proliferation
issues. In addition, I support improving intelligence capabilities to
detect violations of export controls, utilizing onsite inspections
where appropriate, and imposing stringent penalties on those firms
guilty of serious export violations.
Science, Technology and Space
Question 22. The Advanced Technology Program administered by the
National Institute of Standards and Technology (NIST) has been the
subject of criticism and controversy over the last decade. Several
members of this Committee, including myself, have voiced our concerns
that the program has outlived its mission and no longer awards grants
to ``high-risk'' research and development projects. Do you envision any
substantial changes to the program under your leadership and the new
administration?
Answer. I have not made any decisions on the future of the Advanced
Technology Program (ATP). I intend to review the status of ATP during
the fiscal year 2002 budgetary process. My review will include a hard
assessment of the continued utility of ATP and the extent to which it
fills a need not capable of being satisfied at least as well by the
private sector.
Question 23. The National Weather Service completed its $4.5
billion modernization program recently, closing an estimated 184
weather offices throughout the country. Are you satisfied that the
agency has achieved each of its original goals in completing this
massive overhaul and reorganization?
Answer. I understand the Weather Service modernization has
significantly improved the accuracy and timeliness of weather forecasts
and warnings. Such improvements were the primary reason for the
modernization effort. In addition, the Weather Service promised to
downsize its staff and to close over 160 weather offices across the
country. I am advised that almost 150 of these offices have already
been closed.
It thus appears that the Weather Service has substantially achieved
its immediate modernization goals. I nevertheless would review this
program more closely, if confirmed, to ensure its goals have in fact
been met, and whether new goals should be set.
Question 24. The Technology Administration has the potential to be
at the forefront of emerging technology issues that impact this
nation's economy. Yet under the previous administrations, it failed to
be more than a small think tank. Do you have any plans to reorganize
and re-energize the Technology Administration?
Answer. I have not developed any specific reorganization plan or
new missions for the Technology Administration. No bureau within the
Commerce Department, however, should lack energy or focus. I will work
to ensure that the Technology Administration plays an important role in
the Department of Commerce's mission to promote the growth of the U.S.
economy.
Question 25. Over the last year, this Committee has held hearings
and meetings to discuss the fate of the National Technical Information
Service (NTIS), which is no longer self-sufficient and in need of
reorganization. Do you believe that NTIS should be transferred to the
Library of Congress or the Government Printing Office? What are your
plans for this valuable Federal resource?
Answer. I understand that the National Technical Information
Service is neither self-sufficient nor appears capable of becoming
self-sufficient. With Federal technical information being ever more
readily available through easily accessible sources, the future role of
NTIS clearly must be rethought. I understand that the Library of
Congress has not expressed any interest in taking over NTIS' functions.
It is also unclear if this solution would actually save any of the
taxpayers' money, because it may be more expensive to house NTIS
functions at the Library of Congress than to simply fund NTIS.
Currently, NTIS does not appear to require any appropriated funds
in fiscal year 2002. I am hopeful that, working with interested Members
of Congress, we might find a solution to NTIS' future before additional
funding is required.
Question 26. With the International Space Station moving along in
its assembly process, commercial space opportunities for industry will
grow. Do you have any plans for the Office of Space Commercialization
to become more active in this area of industry involvement?
Answer. The International Space Station will indeed offer
significant opportunities for private sector pursuit of commercial
ventures in space, but it is only one potential source for such
ventures.
The future commercial development of the Global Positioning System
(GPS) and commercial remote sensing licensing and enforcement are other
areas where the Commerce Department can promote space-related commerce.
These areas deserve increased attention. I have no specific plans for
broadening the work of the Office of Space Commercialization, but I
would welcome working with the Committee and private sector
participants to focus the work of the office most effectively.
Question 27. Do you feel that that NOAA research budget and
activities are sufficient to address its responsibilities on climate
change research?
Answer. Climate change research is clearly important, and I support
continuing the Department's central role in this field. The National
Oceanic and Atmospheric Administration's budget for Oceanic and
Atmospheric Research (OAR) includes most of the Department's funding
for climate change research. I have not had the opportunity to review,
the budgetary needs of all of the Department of Commerce's programs. I
will examine whether OAR's funding needs are sufficient in connection
with the submission of the Bush Administration's fiscal year 2002
budget.
Question 28. As part of its work on climate change, do you have any
plans of developing policies on a national emission trading program?
Answer. President-elect Bush supports private sector trading of
airborne emissions, including carbon dioxide. The Department of
Commerce, however, neither regulates airborne emissions nor administers
an emissions trading program. I expect that the Department of Commerce,
through scientific research conducted by the National Oceanic and
Atmospheric Administration, will contribute its technical expertise to
any policies the administration may develop.
Question 29. Last year, the Congress passed legislation on
improving technology transfer between Federal laboratories and
industry. The Technology Administration is required to issue a biannual
report on the progress on technology transfer activities. Based on the
previous experience in industry, do you have any ideas that you will
pursue to further improve the technology transfer process?
Answer. I understand that the Technology Transfer Commercialization
Act of 2000 (P.L. 106-404) is the latest in a series of refinements to
previous laws, including the Bayh-Dole and Stevenson-Wydler acts, that
have helped stimulate technology transfer between federally funded
research institutions and the private sector. P.L. 106-404 was signed
into law on November 1, 2000. It is too early for me to determine if
any additional changes are needed to improve the technology transfer
process.
Question 30. At the end of 1998, foreign companies owned 715
facilities in the U.S. designated as R&D centers. What are your
thoughts on this from a competitive standpoint?
Answer. The eagerness of foreign companies to invest in research
and development facilities in the United States says much about the
advantages offered by our free market economy and our educational
system. Overall, I believe the U.S. economy benefits tremendously from
such investments. Foreign investment in the United States fosters new
ideas, talent, innovation, and competition--all of which invigorate our
economy, creating new jobs and opportunities for entrepreneurs.
Question 32. The Commerce Department released a report on
American's Access to Technology Tools this past October. The report
indicates that while 11 percent of Internet users access the Internet
using broadband technologies such as DSL or cable modem, far fewer
rural persons have the ability to gain access to high speed networks.
How do you intend to increase rural America's access to
broadband technology?
Answer. The job of increasing rural America's access to broadband
technology is one foremost for the private sector. The role of the
Commerce Department and other agencies primarily will be to remove
regulatory barriers and otherwise to foster a business and regulatory
environment that will encourage rapid deployment of broadband access to
all citizens. For example, the identification of suitable spectrum for
Third Generation (3G) wireless technology, an initiative being lead by
the NTIA, has great potential for ultimately giving our rural citizens
a cost-effective option for digital services. There may be initiatives
to be undertaken in conjunction with the FCC, such as finalization of
the universal service proceeding, that should be encouraged as well.
Question 33. The Commerce Department released a report on advanced
telecommunications in rural America this past April. The report
recommended revisions to the universal service program to ensure that
advanced services are deployed to rural America.
Do you believe that in order to ensure that all Americans
have access to broadband technology we must subsidize broadband
deployment, or do you believe a competitive market-based approach can
accomplish this task?
Answer. I understand that a recent Commerce Department study
reported a dramatic increase in Internet access by rural residents over
a very short time period. This increase apparently occurred simply
through the workings of a competitive market place. I would hope the
same migration to broadband access will occur without any need for
potentially expensive and market-distorting subsidies. As President-
elect Bush has stated, however, we must ensure that no person is left
behind, especially the children of America. We need to look closely at
the merits of expanding existing universal service programs to cover
additional services, such as broadband deployment, but in light of the
potential harm to existing universal service that might result.
Question 34. As new wireless telecommunications services become
available and spectrum becomes more scarce, increasing pressure is
placed on the Federal Government to share or turn over more of the
spectrum it uses to the private sector for commercial use.
What do you see as the proper role of NTIA, the manager of
Federal spectrum, as commercial demands increase?
Answer. The need for additional allocations of spectrum for
commercial purposes is apparent. The Department of Commerce, through
NTIA, should lead the effort to maximize the efficient use of spectrum
by Federal users. NTIA can promote efficiency and use of modern
technologies, which may significantly decrease the amount of spectrum
now allocated for Federal Governmental use.
The immediate challenge for NTIA will be to complete the process of
identifying spectrum suitable for Third Generation (3G) wireless use
according to the current schedule. Completion of this process will
unleash great potential for providing new technologies that will help
bring greater choices to all consumers, especially our rural citizens.
Finally, NTIA can also help to promote consensus among the Federal
spectrum users about the proper balance of interests to be made in
setting spectrum policy and freeing spectrum for commercial use.
Question 35. Several bills were introduced in the 106th Congress
that were seeking to facilitate broadband deployment nationwide by
leveling the regulatory playing field between cable companies and
regional Bell operating companies. Specifically, these bills would
deregulate Bell data services to more closely resemble the largely
unregulated environment in which cable, modern deployment is taking
place.
Do you believe regulatory parity and the anticipated
increased competition for broadband subscribers will facilitate
broadband deployment to rural areas?
Answer. Yes, I am hopeful that a competitive, market-based approach
will promote deployment of broadband services to rural areas. I also
will look to remove regulatory barriers to fair competition in the
marketplace.
Question 36. Currently, NTIA's Public Telecommunications Facilities
Program is being used to assist public broadcasters' transition to
digital television, a project that can only be achieved with a $1
billion price tag according to the administration and public
broadcasters.
At this past July's CPB nomination hearing, Senator
Rockefeller indicated that viewership was in the low single digits.
Given the explosion in the new sources of data and content available to
the public through the Internet and multichannel video marketplace, and
the public's apparent lack of interest in the programming offered
through public broadcasting, do you believe the taxpayers should be
asked to give the public broadcasters $1 billion for DTV?
Answer. I am not yet prepared to determine whether or to what
extent public broadcasters should receive Federal funding for DTV
conversion. In general, however, I believe that the cost and benefits
of such funding must be given a hard look. The development of
additional media outlets and opportunities is a factor to be
considered. At a minimum, the specific funding request made by the
public broadcasters must be examined fully to ensure that all potential
savings and discounts are fully understood in order to protect
taxpayers from paying more than necessary. Further, it is important to
examine the public broadcasters' request in the context of how the
entire industry is making the conversion to digital television.
Question 37. In recognition of the potential of wireless Internet
services, the Department of Commerce is presently working under an
aggressive schedule to identify the additional spectrum that is
necessary for the wireless mobile industry to undertake expansion and
to provide services competitive with those available in other nations.
Will the Department adhere to the timeframes and
responsibilities set forth in the Presidential Directive on 3G? What
steps do you envision the Department and the NTIA will undertake to
further the President Directive on 3G?
Answer. The current timeframes provided in the Presidential
Directive seem reasonable at this point, and most parties apparently
agree that they can be met. I thus will expect the NTIA to meet the
proposed schedule. I am presently unaware of any new steps that the
Department and NTIA must undertake to meet the schedule, but I will
make clear that meeting the schedule is a priority, and that NTIA
should advise me of any anticipated difficulties that may delay the
decision.
__________
Response to Written Questions from Senator Max Cleland
to Donald L. Evans
Question 1. Both the incoming Bush Administration and the just-
sworn-in 107th Congress face unprecedented challenges requiring
bipartisan communication and cooperation within and between the
Executive and Legislative branches. What ideas do you have--in terms of
staffing or outreach or policy proposals or some other approach--for
addressing such challenges?
Answer. I have always found that the surest way to achieving one's
goals is to approach issues with an open mind, to obtain the facts, to
listen to the ideas of others, and to conduct one's affairs with
integrity. President-elect Bush shares these principles and they are
not novel, but I see no reason why the approach that has served well in
my prior business and public service endeavors will not work equally
well to forge an effective governing partnership between the Congress
and the Administration.
Question 2. One of the concerns of this Committee regarding the
Department of Commerce, under both Democratic and Republican
Administrations, has been the political nature of the Department in
general and the Department's trade missions in particular. Is this a
concern to you as well? If so, how will you address these concerns?
Answer. Whatever the record of the Commerce Department might have
been in the past, my focus will be on ensuring that all of the agency's
programs, including trade missions, are conducted in the public
interest and to achieve the goals established by the Administration and
Congress. With specific regard to trade missions, I will ensure that
invitations to participate will be based on merit in accordance with
clear objective criteria. I understand the current policy requires
written criteria for selection of participants, prohibits consideration
of political activities, and requires selection of participants by a
majority of career Department personnel. I am committed to ensuring
that this new approach works effectively. If confirmed, I will work
with the Office of Inspector General, the General Accounting Office,
and others to evaluate the effectiveness of the current approach and to
make further improvements where necessary.
Question 3. Just a week ago, the Census Bureau released the State-
by-State counts of population data that will be used to reapportion the
U.S. House of Representatives. By Supreme Count decision, the use of
sampling is prohibited in determining the number of congressional
districts each State gets. However, the decision did not prohibit
States from using sampling numbers for congressional and legislative
redistricting.
Do you favor or oppose the use of scientific sampling to correct
the historic miscounts in the census? Please elaborate.
Answer. By all accounts, the 2000 Decennial Census was the most
successful census in history. Congress deserves credit for authorizing
the substantial funds required to achieve such an apparently accurate
count. The Census Bureau did an admirable job of deploying new
resources, increasing awareness, educating people about the importance
of the Census, and encouraging people to respond and to be counted. The
Census Bureau has suggested that count is highly accurate.
I have not pre-judged whether sampling techniques should be used to
adjust the recently released State population data for redistricting or
other purposes. Whether the 2000 headcount should be statistically
adjusted is still being evaluated internally by the Census Bureau, and
I do not possess the information upon which the Bureau's evaluation is
being made. In general, I believe we must continue to seek the most
accurate census counts for each of the many purposes for which the
counts are used, within the bounds of scientific validity and
applicable law.
Question 4. Barring action by the new Administration, the Census
Bureau may offer two sets of population numbers this spring--one raw
and one adjusted by statistical sampling. Many scientific experts,
including the National Academy of Sciences, believe that the second set
of numbers, based on scientific sampling, is the more accurate, since
it seeks to address the consistent undercount, chiefly of poor people
and minority groups, that continues to plague the census. For example,
according to the Census Bureau's own estimates, approximately 8 million
Americans went uncounted in 1990.
As Secretary of Commerce, would you support the release of the
adjusted, more accurate census numbers this spring?
Answer. As I noted in response to Question 1, the current Census
Director has stated that the 2000 Decennial Census was the most
successful ever, with the lowest undercount in history. The Census
Bureau is still evaluating whether the 2000 headcount should be
statistically adjusted. At this time, it is not known that adjusted
census numbers would necessarily be more accurate.
Also, it is my understanding that, while supportive of the concept
of statistical adjustments, the National Academy Panel to Review the
2000 Census has not expressed any opinion on whether the 2000 Census
data should be adjusted by use of statistical sampling techniques,
because neither the internal evaluation of the actual headcount, nor
the statistical adjustment process, has been completed by the Census
Bureau. I similarly have not prejudged the question whether the Census
Bureau should attempt to adjust the population data through statistical
sampling techniques.
As I indicated in the January 4 hearing, it is not clear what
responsibility now lies with the Secretary of Commerce concerning any
decision by the Census Bureau to release adjusted numbers. I will only
be able to form a personal judgment about the adjustment question after
obtaining the facts and determining what my responsibilities will be.
Question 5. On October 6, 2000, the Commerce Department under
Secretary Mineta issued a rule which delegates to the Director of the
Census Bureau the final authority to determine whether the census data
will or will not be adjusted to correct for census miscounts. However,
the rule also allows the Secretary of Commerce to revoke the delegation
of authority given to the Director of the Census Bureau. Do you intend
to overturn the rule and take the decisionmaking authority back under
your jurisdiction so that you would have the final say?
Answer. As section 195 of Title 13 of the U.S. Code confers the
responsibility for making any adjustment decision specifically on the
Secretary of Commerce, the timing and purpose of the November 6 rule,
and its consistency with Congressional intent, certainly may be
questioned. Nevertheless, I have made no decision concerning any
changes to the rule, and as a practical matter, whether the rule should
be revoked or amended is an issue that will be addressed, if at all,
only after the Director of the Census Bureau has determined whether to
issue. statistically adjusted data.
Question 6. The census long form has been widely criticized as
being too intrusive. To what extent do you support the American
Community Survey as an eventual replacement for the census long form?
Will you push for adequate funding for this initiative?
Answer. I will support efforts to deal with problems associated
with the census long form, including those relating to privacy and
intrusiveness, and the overall drag on decennial census response rates.
These concerns must be balanced with the data needs of Federal entities
for effectively implementing particular Federal programs.
I understand that the American Community Survey (ACS) will attempt
both to simplify the decennial census form, and to collect more timely
socio-economic data. I support these goals. This program is in its
infancy, however. As the ACS survey is developed more fully, I look
forward to learning more about how effective it will be as a
replacement for the long form.
As Secretary of Commerce, I would work to ensure that issues of
privacy and intrusiveness are addressed with the ACS in a way that
balances privacy concerns with the need for accurate and timely data.
This undertaking would involve a thorough assessment of the actual
questions on the ACS, including how new questions are added, and how
outdated questions are removed. The ACS is a promising initiative.
While I cannot presently commit to any particular funding level, I look
forward to evaluating the program as it unfolds, and together with the
Congress, determining how it should be shaped and funded.
Question 7. The Commerce Department plays a key role in compiling
statistics that measure the performance of our economy. What is your
view regarding the proper role of the Department in assuring that we
have the best possible measurements of economic activity? Does the
Department have adequate funding for carrying out this responsibility?
Answer. I agree that the Department of Commerce has a critical
responsibility for collecting and analyzing the business, housing, and
employment data that give us an accurate and timely picture of the
status and performance of our economy. To date, I have not been made
aware of any issues regarding adequate funding for carrying out this
responsibility. As Secretary of Commerce, I would work to ensure that
adequate resources are in place for the Department's traditional
surveys that constitute the measures of our economy, as well as new
surveys recently funded by Congress to measure important trends, such
as electronic commerce, so that we maintain an accurate picture of a
constantly changing economic landscape.
Question 8. The Clinton Administration has advocated wider
government involvement in promoting technology and research and
development. What do you believe is the proper role, if any, of the
Federal Government--and the Department of Commerce in particular--in
fostering technology development leading to economic growth?
Answer. The primary goal of the Department should be to foster a
climate in which the development and deployment of technologies may
thrive. It may play several roles in pursuing that mission. Those
include, for example, promoting harmonization of domestic and
international technical standards taking into account U.S. commercial
interests; identifying regulatory impediments to technology development
and means of alleviating them; and working to eliminate foreign
barriers to technology exports and services dependent on them.
Question 9. One of the difficult challenges faced by the Commerce
Department is maintaining a proper balance between easing the
regulations on the export of U.S. technology, such as encryption and
space launch, and ensuring that national security is maintained at all
times. What role do you believe the Commerce Department should play in
promotion of these sensitive industries and how would you suggest that
such a balance be struck? In particular, how can we be assured that the
national security side of the balance will be appropriately maintained?
How would you weigh the need to limit overseas sales for security
reasons against commercial requirements of U.S. exporters, especially
hi-tech producers, to reach foreign markets?
Answer. As President-elect Bush has stated: ``There need not be any
conflict between America's security interests abroad and our economic
interests. We just need to be smart enough and flexible enough to
distinguish between the technologies that guide enemy missiles and the
technologies that animate children's games.'' Of course, these
decisions are not always easy.
Obtaining up-to-date, and accurate information, and applying
seasoned judgment, are essential components of the deliberative
process. Proposals in Congress to reauthorize the EAA have been
consistent with President-elect Bush's approach.
Maintaining the nation's security will be the guiding principle in
any Commerce Department licensing decision. Against that paramount
concern a variety of factors will be considered, including the
effectiveness of controls, the proposed end use, the integrity of the
end user, and alternative means of ensuring that national security
concerns are satisfied.
Question 10. What do you see as the principal role of the
government in helping U.S. industries in the global market? Do you
believe the government should step back and let U.S. industries fight
on their own or do you believe the government should be actively
involved in ensuring that these markets are kept open for U.S.
businesses?
Answer. The entrepreneurial spirit of the American people, not the
government, creates wealth. But government can help create an
environment in which the entrepreneurial spirit flourishes, an
environment that promotes innovation, risk-taking and equal
opportunity. In this regard, there is no question that the government
should be actively involved in ensuring that foreign markets are kept
open to U.S. business. Should I be confirmed as Secretary of Commerce,
this will be one of my foremost goals.
Question 11. How do you currently rate U.S. producers
internationally? Do you believe they are competitive or not? If not,
what do you believe the problems are and what do you suggest government
can do about them?
Answer. American producers are some of the most efficient and
productive--and therefore the most competitive--in the world. The most
important role for government is to foster the climate in which that
competitiveness continually increases. This means maintaining a strong
economy at home and reducing trade barriers abroad.
Question 12. What role do you envision for the Commerce Department
in the near future in terms of ecommerce? Are there some ``rules of the
road'' that have applied to governmental involvement in commerce in
generally, especially interstate commerce, for the last 100 years or so
that we might want to consider as we look at e-commerce, or is this
such a new item that we have better take a ``hands off'' approach until
we see how things progress. What is your reaction to the dramatic
growth of e-commerce?
Answer. The Commerce Department should continue to lead efforts by
the Federal Government to harmonize and minimize government regulation
of e-commerce, both domestically and abroad; and to foster standards
and technologies (e.g., acceptance of digital signatures, increased
broadband access) that facilitate e-commerce.
Question 13. In the last Congress this Committee struggled with the
issues of Internet privacy and taxation. What role do you believe the
Federal Government should play in guaranteeing privacy or working out
some accommodation on Internet taxation?
Answer. President-Elect Bush supports the current Internet tax
moratorium. We also understand the serious concerns many parties have
about its impact on the tax bases of State and localities, and its
impact on local merchants and retailers. Although it must be respectful
of the taxing authority of State and local governments and their
revenue needs, the Federal Government has an important role to play in
promoting harmonization of fiscal and regulatory measures affecting e-
commerce, in a manner that least intrudes on the growth and directions
taken in that marketplace. E-commerce will thrive in an environment of
certainty and minimal government intrusion. E-commerce also will falter
ultimately if the public loses confidence in the security of electronic
transactions.
In some areas, like financial services, Congress has already taken
action to promote consumer privacy. The privacy provisions of the
Gramm-Leach-Bliley Financial Modernization Act offer important models
by which these concerns may be addressed. In addition, it is vital that
the Federal Government examine its practices and policies on protecting
consumer privacy. In the past the Federal agencies apparently have
violated their own privacy policies. This is unacceptable. Improving
the privacy protections of the Federal Government should be a priority.
Question 14. As you know, the Technology Opportunities within the
Dept. of Commerce provides infrastructure and Internet access to
disadvantaged communities. How do you view this program and would you
like to see it expanded?
Answer. The TOPs program has a very laudable mission. I have not
yet formed a view, however, as to whether TOPs is accomplishing its
mission in the most effective way, or whether it should be expanded.
Question 15. In recent years, some critics have questioned the role
of the National Weather Service in providing important weather
information for free, even though there are private firms that seek to
perform the same service. Supporters of the Weather Service's policy
believe it provides a service to the public, including farmers,
aviators, sailors and others whose lives and livelihood depend upon
abundant and accurate forecasting. Do you support a continuation of
this policy by the National Weather Service or do you see a need for
change at this time? What role do you believe the National Weather
Service should play for our country?
Answer. The mission of the National Weather Service is to provide
weather, hydrologic, and climate forecasts and warnings for the people
of the United States and those that navigate our waters. The Weather
Service should continue to play this vital role in the protection of
lives and property.
The Weather Service currently provides free access to the data and
forecasts it generates. Such access both assists the public and enables
private sector businesses to develop specialized forecasts for paying
costumers. The Weather Service should continue to make this information
readily available to the private sector for educational, commercial and
other uses.
Question 16. As you know, foreign trade zones provide an
opportunity for industries to import their goods under certain very
special circumstances at reduced tariff rates. This past summer the
Savannah Foreign Trade Zone applied for an expansion of their Trade
Zone which they believe could be a boon to their economic development.
As Secretary of Commerce, your seat on the Foreign Trade Zone Board
will have a great impact on the decisions made. What role do you
believe the FTZ Board should play as we enter the 21st Century and an
era of increasing global trade?
Answer. Foreign trade zones play a positive role in the economic
development of the United States by allowing U.S. companies to
capitalize on market efficiencies at home and abroad. The FTZ Board
should continue to assist local communities to establish FTZs adapted
to the changing needs of commerce and capable of being administered
with a minimum of red tape.
Question 17. One of the first pieces of legislation that I authored
and saw signed into law was a disaster mitigation pilot program to
protect small businesses before a disaster strikes. I am sure you are
well aware of the importance of a reliable and timely disaster warning
system not only for the sake of the lives of millions of Americans but
also for the sake of U.S. commerce. Do you see the issue of disaster
warning as something you would like to champion or become actively
involved in? If so, do you have any preliminary idea as to what
additional steps the Federal Government should take in this field?
Answer. The National Weather Service plays a critical role in
disaster preparedness. I strongly support the Weather Service's role in
proving disaster warnings.
The Weather Service is only part of the disaster mitigation
solution, however. While I do not have specific proposals to make at
this time, I believe one should look at what further steps the Weather
Service might take to work with State and local agencies and other
Federal agencies, including the Federal Emergency Management
Administration, Army Corps of Engineers, U.S. Geological Survey, U.S.
Forest Service, Bureau of Land Management, Department of Defense,
Department of Agriculture and the Environmental Protection Agency, to
help ensure that disaster warnings are translated into actions that
save lives and property.
__________
Biographical and Financial Information on Donald L. Evans, Nominee to
be Secretary of the Department of Commerce
Biographical Information
1. Name: (include any former names or nicknames used.)
Donald Louis Evans (Don).
2. Position to which nominated:
Secretary of Commerce.
3. Date of nomination:
A date to be determined after January 20, 2001. President-
elect Bush announced his intention to nominate me on December
20, 2000.
4. Address: (List current place of residence and office addresses.)
Residence: (Information not released to the public); Office:
508 West Wall, Suite 500, Midland, Texas 79701.
5. Date and place of birth:
Houston, Harris County, Texas.
6. Marital status: (include maiden name of wife or husband's name.)
Married--Susan Marinis (wife's maiden name)
7. Names and ages of children: (Include stepchildren and children
from pervious marriages.)
Elizabeth S. Moon, 27; Jennifer S. Evans, 25; Donald L.
Evans, Jr., 11.
8. Education: (List secondary and higher education institutions,
dates attended, degree received and date degree granted.)
----------------------------------------------------------------------------------------------------------------
Name of school Dates attended Degree received Date degree granted
----------------------------------------------------------------------------------------------------------------
University of Texas at Austin........ Sept. 1964-May 1969 MSMB June 1969.
University of Texas at Austin........ Feb. 1970-Dec. 1972 MBA Aug. 1973.
----------------------------------------------------------------------------------------------------------------
9. Employment Record: (List all jobs held since college, including
the title or description of job, name of employer, location of work,
and dates of employment).
----------------------------------------------------------------------------------------------------------------
Title Name of employer Location Dates of employment
----------------------------------------------------------------------------------------------------------------
Engineer............................. Armco Steel Houston, TX June 1967-Sept. 1967.
Design Engineer...................... Monsanto Chemical St. Louis, MO June 1968-Aug. 1968.
Design Engineer...................... Cameron Iron Works Houston, TX June 1969-Sept. 1970.
Counselor............................ Camp Olympia Houston, TX June 1971-Sept. 1971.
Chairman of the Board, CEO........... Tom Brown, Inc. Midland, TX Feb. 1975-Present.
----------------------------------------------------------------------------------------------------------------
10. Government experience: (list any advisory, consultative,
honorary or other part-time service or positions with Federal, State,
or local governments, other than those listed above.)
University of Texas System Board of Regents.
11. Business relationships: (List all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, or other
business enterprise, educational or other institution.)
Tom Brown, Inc.--Chairman of the Board, Chief Executive
Officer, Director.
TMBR/Sharp Drilling, Inc.--Director.
American Oil & Gas, Inc.--Director.
Caprock Electric Cooperative--Director.
Security National Bank--Director.
American Century Corporation--Director.
Greenway Heritage Partners, L.P.--Limited Partner.
Greenway-Glade Partners, L.P.--Limited Partner.
Carlang Partners, L.P.--Limited Partner.
Turnpike Waldrop Joint Venture--Joint Venturer.
12. Memberships: (List all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable and
other organizations.)
Board of Regents, University of Texas System--Chairman.
The Bynum School Board of Governors.
The Gladney Fund--Board Member.
Memorial Hospital & Medical Center--Trustee.
Midland Cerebral Palsy Center--Beefeaters Ball Chairman.
Scleroderma Research Foundation--Board Member.
United Way of Midland, Campaign Chair.
United Way of Midland, President.
Midland Chamber of Commerce.
YMCA of Midland, Metropolitan Board.
Young Life, Executive Committee.
Young Presidents Organization.
Omicon Delta Kappa Society Sigma.
Alpha Epsilon Fraternity.
Texas Cowboys.
13. Political affiliations and activities:
(a) List all offices with a political party which you have held or
any public office for which you have been a candidate.
None.
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years.
Bush For Governor, Inc.
1995 Texas Inaugural Committee for Governor George W. Bush.
Bush for President, Inc. (formerly Governor George W. Bush
Presidential Exploratory Committee, Inc.)
Bush-Cheney 2000, Inc. (formerly Bush for President & General
Election Committee, Inc.)
Bush-Cheney 2000 Compliance Committee, Inc. (formerly Bush
for President Compliance Committee, Inc.)
Bush/Cheney Presidential Transaction Foundation, Inc.
(c) Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years.
------------------------------------------------------------------------
Name Amount
------------------------------------------------------------------------
Wayne Allard for U.S. Senate Committee..................... $ 200.00
Texans for Rudy Izzard..................................... 250.00
Kay Bailey Hutchison for Senate Committee.................. 1,000.00
Cubin for Congress Inc..................................... 1,000.00
Texans for Lamar Smith..................................... 250.00
Texans for Lamar Smith..................................... 250.00
Kay Bailey Hutchison for Senate Committee.................. 1,000.00
Texans for Lamar Smith..................................... 250.00
Texas Republican Congressional Committee AKA Victory `96... 1,000.00
Pink Elephant Committee.................................... 200.00
Texans for Lamar Smith..................................... 250.00
Friends of Phil Gramm...................................... 1,000.00
Texans for Henry Bonilla................................... 250.00
Cubin for Congress......................................... 250.00
Phil Gramm for President, Inc.............................. 11,000.00
Dole for President Inc..................................... 1,000.00
McMillan for U.S. Senate................................... 250.00
Cubin for Congress......................................... 500.00
Kay Bailey Hutchison for Senate Committee.................. 1,000.00
Gramm `96 Committee........................................ 500.00
Texans for Lamar Smith..................................... 250.00
Texans for Henry Bonilla................................... 500.00
Bush-Quayle `92 Primary Committee Inc...................... 1,000.00
Texas Republican Party..................................... 1,000.00
Craig Thomas for Congress Inc.............................. 300.00
------------------------------------------------------------------------
14. Honors and awards: (List all scholarships, fellowships,
honorary degrees, honorary society memberships, military medals and any
other special recognitions for outstanding service or achievements.)
Distinguished Service Award and Boss of Year presented by
Midland Jaycees in 1980.
Distinguished Alumni Award--University of Texas at Austin--
School of Engineering--1997.
15. Published writings: (List the titles, publishers, and dates of
books, articles, reports, or other published materials which you have
written.)
None.
16. Speeches: Provide the committee with two copies of any formal
speeches you have delivered during the last 5 years which you have
copies of on topics relevant to the position for which you have been
nominated.
None.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President?
Apparently because President-elect Bush believes my skills
and experience will enable me to lead the Commerce Department
successfully.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
In my professional career I have been employed as an engineer
and manager at several industrial companies, including as the
Chairman and Chief Executive Officer of a large energy concern
for the past 15 years; and I have chaired the University of
Texas System Board of Regents, an educational system comprised
of nine academic institutions and six health science centers,
having 79,000 employees serving 154,000 students. Besides the
skills thus acquired through years of managing large
enterprises, both commercial and governmental, I am thus well
acquainted both with the challenges and opportunities of
operating in global, highly competitive and regulated
industries--through good times and bad--and with the tremendous
benefits of educational and scientific endeavor.
B. Future Employment Relationships
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate?
Yes.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain.
No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization?
No.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service?
No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable?
Yes.
C. Potential Conflicts of Interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers.
None.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
None.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 20 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated?
None identified.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy.
None.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Please provide a copy of any trust or other agreements.)
I will comply fully with government ethics requirements. At
present, I am working with transition and government ethics
counsel to identify potential conflicts and to address
appropriately any that are identified. I also am working on
structuring my personal financial affairs to comply with
government ethics requirements. I have no trust or other
agreements relevant to these matters at this time. Upon taking
office, I will act upon the advice of the Department's ethics
counsel to avoid conflicts of interest that might arise,
recusing myself from matters as appropriate.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of the Government Ethics concerning
potential conflicts of interest or any legal impediments to your
serving in this position?
Yes.
D. Legal Matters
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a complaint to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details.
No.
2. Have you ever been investigated, arrested, charged or held by
any Federal, State, or other law enforcement authority for violation of
any Federal, State, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details?
(a) Security National Bank.--I served on the Board of
Directors of Security National Bank, a small, locally owned
national bank in Midland, Texas, from the date of its formation
in November 1981 until my resignation as a Director on February
15, 1985.
The Comptroller of the Currency declared Security National
Bank insolvent on February 12, 1987 and the Federal Deposit
Insurance Corporation was appointed as receiver of the Bank.
Charles and Jeannie McClure brought suit in the U.S. District
Court for the Western District of Texas, Midland-Odessa
Division, Civil Action No. M086CA86, styled Charles McClure and
Jeannie McClure v. Security National Bank of Midland, et al,
filed on May 19, 1986. The Plaintiffs alleged that officers of
the bank breached a commitment for interim financing and
refused to honor the bank's contract. The bank's directors,
including me, were joined Defendants in their official
capacities on the alleged grounds that they consented to and
agreed with the actions of the officers. At the conclusion of
the evidence in the trial, the other directors and I were
dismissed from the suit. Thereafter, the jury returned a
verdict for the Plaintiffs, and a judgment was entered on
December 13, 1986, in the amount of $2,250,000 (resulting from
the trebling of actual damage award of $750,000 in accordance
with 12 U.S.C. 1975). The McClures filed for bankruptcy (In Re:
Charles and Virginia McClure, Debtors, in Bankruptcy No. 7-85-
0328 in the U.S. District Court for the Western District of
Texas, Midland-Odessa Division) and on February 12, 1987, the
FDIC was appointed Receiver of Security National Bank of
Midland. Thereafter, the $2,250,000 award was reduced to
$750,000 and filed as a claim with the FDIC, with approximately
$250,000 in dividend payments being made to the McClures.
The McClures then filed another lawsuit against the
directors, including me. This action was Case No. 89CA029 in
the U. S. District Court for the Western District of Texas,
Midland-Odessa Division, styled Charles McClure and Virginia
McClure, Individually and on Behalf of Security National Bank
of Midland v. Fred M. Allison, III, Ray P. Moudy, Ernest
Angelo, Jr., James M. Blakemore, L. Decker Dawson, Arlen L.
Edgar, Donald L. Evans, Joseph A. Kloesel, C.R. Schwisow,
William C. Thomas, William Howle McCright, Jr., David Covey,
Individually, and the Federal Deposit Insurance Corporation, as
Receiver of Security National Bank. In general, the Plaintiffs
alleged (1) derivative claims on behalf of Security National
Bank and (2) claims, individually, for personal damages based
upon the same alleged wrongdoings which served as a basis for
the derivative claims. The Defendant Directors filed a motion
for a Rule 12 (b)(6) Dismissal for Failure to State a Claim or
for Summary Judgment on March 13, 1989. The motion was granted
on May 4, 1989. While the McClures filed a Notice of Appeal to
the U.S. Court of Appeals for the Fifth Circuit, the appeal was
dismissed on August 30, 1989 for want of prosecution for
failure of Appellants to file a brief.
At no time was a claim against the Directors, including me,
made by the FDIC or any other governmental agency.
B. American Century-Corporation, San Antonio, Texas. I was
elected to the Board of Directors of American Century
Corporation on August 24, 1984. Originally organized as a real
estate investment trust in 1969 in Jacksonville, Florida, under
the name ``American Century Mortgage Investors,'' the company
relocated its headquarters in San Antonio, Texas in 1982 and
was reincorporated as a Delaware corporation under the name
American Century Corporation. At the time I joined the Board of
Directors, American Century was a New York Stock Exchange-
listed company engaged in commercial real estate investment and
mortgage lending through a wholly owned subsidiary, Commerce
Savings Association, a State-chartered thrift with
approximately $850,000,000 in assets. In addition, American
Century held a 20 percent stake in The First American Financial
Corporation in Santa Ana, California, the nation's second-
largest title insurance company.
With the sharp downturn in Texas economy and collapse of the
real estate market in the late 1980s, American Century
experienced significant operating losses, primarily through its
wholly owned subsidiary, Commerce Savings. I resigned as a
director of American Century in January 1989. Shortly
afterwards, Commerce Savings became insolvent and was placed in
conservatorship in March 1989. American Century also had
outstanding publicly traded subordinated debentures, which
defaulted at approximately the same time. In June 1989,
American Century filed a voluntary petition for reorganization
under Chapter 11 of the bankruptcy code. A plan of
reorganization of American Century was confirmed in June 1990,
under which American Century was merged with Tescorp, Inc. in
Austin, Texas, and American Century's bondholders received a
combination of publicly-traded Tescorp common stock, preferred
stock and warrants with a combined value that exceeded the par
amount of the debentures, resulting in no loss to its
creditors. Its shareholders also received a modest recovery in
the form of publicly-traded warrants. No claim was asserted
against American Century by Federal or State banking regulators
in such proceeding, and it is believed to be the only one of
the numerous holding companies of failed banks or thrifts in
the State to have been successfully reorganized. It should be
noted that 48 of the 50 largest thrifts and all but one of the
20 largest banks in the State either failed or were the subject
of supervised mergers with Federal assistance.
In June 1992, the Resolution Trust Corporation filed a suit
against the former directors of Commerce Savings. The suit
alleged simple negligence on their part in connection with the
lending activities of the thrift (no allegations were made of
gross negligence, fraud or selfdealing). I was not named as a
defendant in the suit. The defendants denied any liability and
no discovery was taken in the suit, which was settled in late
1992 for an amount approximately the cost of defending the
suit.
(c) Tom Brown, Inc., an oil and gas exploration and
production company, of which I have served as Chairman and CEO,
has been involved in various State and Federal administrative
agency proceedings in the normal course of its business.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense?
No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. Relationship With Committee
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information?
Yes, within the bounds of my authority.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistleblowers from reprisal for
their testimony and disclosures?
Yes.
3. Will you cooperate in providing the Committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the Committee?
Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress.
The Commerce Department only has the authority Congress has
granted it. I thus will expect Department personnel to develop
rules only where necessary and only as consistent with
applicable law. I view Congress and the Department as having
complementary roles in ensuring that the Department's programs
are developed and implemented effectively and true to their
purpose. I thus expect on-going, two-way communications between
the Department and Congress will be an integral part of the way
we do business, including in our role as regulator.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
Although the world in which we live and work is much
different than it was a century ago, the Department of
Commerce's mission remains fundamentally as it was stated by
Congress in 1903: to foster and to promote U.S. commerce,
international trade, manufacturing and fisheries. I believe the
Department's programs should reflect our nation's commitment to
the free enterprise system and be designed to bring the
benefits of that system to all Americans, whether through
opening new foreign markets to U.S. exports, or bringing the
great scientific research resources of the Department to bear
in establishing standards and policies to free our
entrepreneurs to concentrate on commercial competition rather
than regulatory barriers. The major programs of the Department
fit this mission. These include: (1) Managing the nation's
fisheries and coastal zones through NOAA; (2) providing first-
class weather data gathering and analysis services, also
through NOAA; (3) supporting both U.S. commerce and national
security through oceanic mapping and research; (4) partnering
with the U.S. Trade Representative to negotiate and implement
effective trade agreements that promote and protect U.S.
interests; (5) promoting U.S. export opportunities,
particularly by assisting new and smaller exporters to take
advantage of world markets; (6) advising the President on
telecommunications and information technology policies, and
manage the allocation of the Federal radio spectrum; (7)
fostering technology standards development, research, and
policies that enable U.S. commerce to thrive; (8) supporting
economic development opportunities by minority and
disadvantaged businesses and communities; and (9) conducting
the U.S. census and related economic research. My major
operational objectives will include ensuring that all of these
programs, and other responsibilities assigned to the Department
by the President and Congress, are conducted efficiently,
honestly, and with the purpose of promoting a strong American
economy.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so?
Yes.
F. General Qualifications and Views
1. How have your previous professional experience and education
qualifies you for the position for which you have been nominated.
The Secretary of Commerce must be an advocate of our free
enterprise system, champion and defender of the nation's
commercial interests, and steward of the nation's marine
environment. I have spent 25-plus years as an employee and
leader of a successful billion dollar company--through good
times and bad--operating in a global, highly competitive, and
regulated environment, as well as chairing the regents of a
major university system and leading other community activities.
These experiences all have provided me both with the skills to
manage a large and diverse organization, and a deep
understanding of the challenges and opportunities faced by
American businesses and workers, whatever their size, location,
or sector.
2. Why do you wish to serve in the position for which you have been
nominated?
I share the goals and ideals of President-elect Bush and,
like him, wish to put my experience and abilities to public
service.
3. What goals have you established for your first 2 years in this
position, if confirmed?
Assemble a top-notch team of people.
Establish the Department's leadership and supporting roles
in carrying out the President-elect's policies and programs, including
vigorous enforcement of U.S. trade laws and monitoring of trade
agreements, streamlining our export control mechanisms, promotion of
U.S. trade opportunities and of hemispheric trade in particular, and
fostering ecommerce.
Continued improvement in management of the Department,
including implementation of up-to-date and efficient information
systems.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills?
I believe I possess the necessary experience and management
skills to carry out my responsibilities. My team of appointed
and career people will assist me to analyze and to make
decisions in subject areas where I currently lack detailed
expertise.
5. Please discuss your philosophical views on the role of
government. Include a discussion of when you believe the government
should involve itself in the private sector, when should society's
problems be left to the private sector, and what standards should be
used to determine when a government program is no longer necessary.
U.S. leadership of the global economy and our national
security derive from our nation's free enterprise system. I
share the President-elect's belief in restrained Federal powers
and reliance on State and local governments where appropriate
to promote the public welfare. Nonetheless, the Federal
Government has many important roles to play in our society,
ranging from defending the national security, to conducting
international trade relations, to resolving conflicting claims
to our common resources. The government generally shouldn't be
carrying on activities, especially commercial activities that
are better done in the private sector. The creation and
continued utility of government programs must be measured
against their purpose, effectiveness, and the alternatives.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives.
See my answer to Question E5, which is in my own words.
7. In reference to question No. 6, what forces are likely to result
in changes in the mission of this agency over the coming 5 years.
I do not see changes in the Department's basic mission
occurring, but how the Department carries out its mission will
certainly be affected by a variety of factors. These include:
Continued expansion of international trade and negotiation of
new trade agreements; technological advances that will continue
to drive new modes of conducting business and new products and
businesses; scientific discoveries and applications of the
fruits of those discoveries to our management of fisheries, the
marine environment, weather analysis, and other endeavors; etc.
8. In further reference to question No. 6, what are the likely
outside forces which may prevent the agency from accomplishing its
mission? What do you believe to be the top three challenges facing the
department/agency and why?
I currently do not see any outside obstacles that will
prevent the Department from accomplishing its mission. That is
not to say there will not be challenges, but it is premature
for me to specify and rank those challenges.
9. In further reference to question No. 6, what factors in your
opinion have kept the department/agency from achieving its missions
over the past several years?
I have no opinion on this subject, as I have not yet reviewed
in detail what the Department sought to accomplish over the
past 6 years and why it did not achieve some of its goals, if
any. The Department clearly spent much effort over the past 3
years on improving its management systems, with positive
results, but with more to be done.
10. Who are the stakeholders in the work of this agency?
All of the American people.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10.
I will be a public servant, and my office must serve the
people. Those who are interested in the Department's programs
will find that I place great value on listening to a wide range
of views and obtaining the best technical advice available with
respect to the issues before me. We will strive to define and
to promote the public interest taking into account those views,
the law, and the President-elect's policies and initiatives. At
the end of the day, I will make the required decisions and be
accountable for them.
12. The Chief Financial Officers Act requires all government
departments and agencies to develop sound financial management
practices similar to those practiced in the private sector.
(a) What do you believe are your responsibilities, if confirmed, to
ensure that your agency has proper management and accounting controls?
I will be accountable to the President and Congress for the
proper management of the Department. I will put into place a
team of well-qualified individuals, lead by the CFO, to manage
the Department properly. I will rely on the expertise of the
Inspector General, other agencies (such as the General
Accounting Office and OMB), and our outside auditors to ensure
the integrity and efficiency of our programs.
(b) What experience do you have in managing a large organization?
See answer to Question F1 above.
13. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals.
(a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals.
I believe that appointing capable people at the start,
delegating the necessary authority to them to do their jobs,
and holding them accountable for the results is the best way to
obtain the results you seek. Accountability depends on defining
goals and measuring progress toward those goals.
(b) What steps could Congress consider taking when an agency fails
to achieve its performance goals? Should these steps include the
elimination, privatization, downsizing or consolidation of departments
and/or programs?
The remedy depends on the problem. Programs that do not have
a justifiable purpose may certainly be candidates for
elimination or restructuring. Worthwhile programs that simply
are not performing well should be reviewed from a management
improvement perspective.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
To be an effective leader and communicator with Congress and
the public, and a candid, forthright advisor to the President.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
As noted above, I have followed a philosophy of delegation of
responsibility and authority, with expectations of performance.
I also believe strongly in the value of communicating personal
interest in the success of each individual.
15. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
I expect to be in regular communication with Congress about
the range of issues that the Department will address under my
leadership. My past work involving Congress has been largely
limited to the Texas delegation.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
The IG has a valuable role to play as an objective reviewer
of the Department's programs. We will share the same objectives
of efficiency, effectiveness and integrity in the Department's
operations. I thus expect the IG to perform his duties
cooperatively, but independently.
17. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
See my response to Question E4.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
State your personal views.
President-elect Bush supports reauthorization of the Export
Administration Act, on a permanent basis, as soon as possible.
It also appears to be important to resolve the funding status
of the Patent and Trademark Office.
19. Within your area of control, will you pledge to develop and
implement a system that allocates discretionary spending based on
national priorities determined in an open fashion on a set of
established criteria? If not, please state why. If yes, please state
what steps you intend to take and a timeframe for their implementation.
Yes. Discretionary spending should be made on the basis of
objective criteria developed in a methodical process. I will
review the Department's programs to determine whether any
discretionary spending is not made according to such a process,
and determine what procedural changes are necessary in the
circumstances.
Affidavit
Donald L. Evans, being duly sworn, hereby states that he has read
and signed the foregoing Statement on Biographical and Financial
Information and that the information provided therein is, to the best
of his knowledge, current, accurate, and complete.
Signature of Nominee--Donald L. Evans.