[Senate Hearing 107-1088]
[From the U.S. Government Publishing Office]
S. Hrg. 107-1088
NOMINATIONS OF SAMUEL W. BODMAN TO BE DEPUTY SECRETARY OF COMMERCE
(DOC); ELLEN G. ENGLEMAN TO BE
ADMINISTRATOR OF THE RESEARCH AND
SPECIAL PROGRAMS ADMINISTRATION AT THE DEPARTMENT OF TRANSPORTATION
(DOT); JON ALLAN RUTTER TO BE ADMINISTRATOR OF THE FEDERAL RAILROAD
ADMINISTRATION (FRA); AND KIRK K. VAN TINE TO BE GENERAL COUNSEL,
DEPARTMENT OF TRANSPORTATION (DOT)
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JUNE 26, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
U.S. GOVERNMENT PRINTING OFFICE
87-007 WASHINGTON : 2004
_________________________________________________________________
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Washington, DC 20402-0001
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 SAM BROWNBACK, Kansas
MAX CLELAND, Georgia GORDON SMITH, Oregon
BARBARA BOXER, California PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
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 June 26, 2001.................................... 1
Statement of Senator Hollings.................................... 1
Prepared statement........................................... 1
Prepared statement of Senator Rockefeller........................ 3
Witnesses
Bodman, Samuel W., nominee to be Deputy Secretary of Commerce.... 4
Prepared statement........................................... 5
Biographical information..................................... 6
Engleman, Ellen G., nominee to be Administrator of the Research
and Special Programs Administration............................ 17
Prepared statement........................................... 19
Biographical information..................................... 21
Rutter, Jon Allan, nominee to be Administrator of the Federal
Railroad
Administration................................................. 36
Prepared statement........................................... 37
Biographical information..................................... 37
Van Tine, Kirk K., nominee to be General Counsel, Department of
Transportation................................................. 28
Prepared statement........................................... 29
Biographical information..................................... 30
Appendix
Article from the New York Times, dated June 24, 2001, entitled
``The World: Free Trade's Promise in Latin America; The Poor
Survive It All. Even Boom Times''.............................. 75
Lugar, Hon. Richard G., U.S. Senator from Indiana, prepared
statement...................................................... 47
McCain, Hon. John, U.S. Senator from Arizona, prepared statement. 77
Response to written questions submitted by Hon. Ernest F.
Hollings to:
Samuel W. Bodman............................................. 47
Ellen G. Engleman............................................ 54
Jon Allan Rutter............................................. 57
Kirk K. Van Tine............................................. 64
Response to written questions submitted by Hon. John McCain to:
Samuel W. Bodman............................................. 50
Ellen G. Engleman............................................ 55
Jon Allan Rutter............................................. 60
Kirk K. Van Tine............................................. 70
NOMINATIONS OF SAMUEL W. BODMAN TO BE DEPUTY SECRETARY OF COMMERCE
(DOC); ELLEN G. ENGLEMAN TO BE
ADMINISTRATOR OF THE RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION AT
THE DEPARTMENT OF TRANSPORTATION (DOT); JON ALLAN RUTTER TO BE
ADMINISTRATOR OF THE FEDERAL
RAILROAD ADMINISTRATION (FRA); AND KIRK K. VAN TINE TO BE GENERAL
COUNSEL, DEPARTMENT OF
TRANSPORTATION (DOT)
----------
TUESDAY, JUNE 26, 2001
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 9:33 a.m. in room
SR-253, Russell Senate Office Building, Hon. Ernest F.
Hollings, Chairman of the Committee, presiding.
OPENING STATEMENT OF ERNEST F. HOLLINGS,
U.S. SENATOR FROM SOUTH CAROLINA
The Chairman. The Committee will please come to order. We
are pleased this morning to have Mr. Sam Bodman to be the
Deputy Secretary of Commerce. We have our distinguished
Secretary here. Please come and have a seat with your Deputy.
You are going to be working closely with him. We will not ask
you any questions.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings,
U.S. Senator from South Carolina
Nomination of Samuel W. Bodman
Mr. Samuel W. Bodman, III is the nominee for Deputy Secretary of
Commerce. He is joined today by his wife, Dianne Bodman, and his
stepson Terry Barbar. Mr. Bodman is a chemical engineer by training and
has had a long, distinguished career in business, most recently as
Chairman and Chief Executive Officer of the Cabot Corporation.
I enjoyed meeting Mr. Bodman, and, like Secretary of Commerce Don
Evans, I am expecting great things of this nominee. The Secretary has
said more than once that he is anxious to have you at the Department.
He is expecting you to play a major role in two agencies that are very
important to me, the National Oceanic and Atmospheric Administration
(NOAA) and the National Institute of Standards and Technology (NIST).
With regard to NIST, as you know, Mr. Bodman, I am looking forward
to working with you and the Secretary on making improvements to the
Advanced Technology Program for fiscal year 2002 and beyond. But make
no mistake, the ATP contracts with firms, on a cost-shared basis, for
long-term research to develop new breakthrough technologies with broad
economic promise--and it's working. No matter what changes are made for
the future, I hope that, if confirmed, you can ensure that the
foolishness stops and that the Department begins to issue the fiscal
year 2001 awards in a timely manner.
NOAA was just provided with its largest budget in history, so, as
the person who is responsible for the day-to-day operations of the
Department, you will have at your disposal the appropriate resources
for improving the management capabilities of NOAA. This Committee will
be closely following the new Administration on its plans for improving
the management and integration of the various NOAA line offices, and
strongly believes that NOAA urgently needs high level focus to improve
upon its mission to conserve our Nation's coastal and marine resources.
One of the critical needs is modernizing our management and stewardship
of living marine resources and reducing the need for fisheries-related
litigation, especially suits brought under the Endangered Species Act
and the National Environmental Policy Act. It is my strong desire, that
if nominated, you will provide the leadership and support necessary to
improve the management of NOAA.
Finally, I also wanted to mention the Department's role in
enforcing our Nation's unfair trade laws. I am confident that you will
apply these rules vigorously.
Nominations of Kirk Van Tine, Allan Rutter and Ellen Engleman
The Department of Transportation performs many vital national
functions in promoting safe and efficient travel. From the safety
functions of providing oversight of our highways, airways, waterways,
and railroad network, to promoting our transportation system so that
all U.S. citizens can travel efficiently and economically, the
Department of Transportation has many important responsibilities.
The role of the General Counsel at DOT is one of stewardship, and
provides the agency with legal representation and advice, as well as
the important function of monitoring and approving regulations
implementing the laws passed by Congress. Mr. Kirk Van Tine has been
nominated for the position of General Counsel of the Department of
Transportation. He is a graduate of the U.S. Naval Academy, and served
as a submariner. In addition he graduated from the University of
Virginia School of Law with distinction. Before hearing from the
nominee I would like to comment on a couple of issues of particular
concern to me, and would hope that you, Mr. Van Tine could help move
these issues forward at the Department.
In aviation, DOT is the protector of the public interest when it
comes to aviation competition. You get to look at the broad picture and
make decisions. DOT has an enormous amount of underutilized authority
to look at competition issues. Section 155 of AIR 21 mandates that
airports focus on how to increase competition. DOT's authority to
review ``unfair methods of competition,'' a broader standard than the
traditional antitrust laws, gives you the ability to issue predatory
pricing guidelines and take enforcement action. DOT also has authority
to review alliances ``or any other cooperative working arrangement''
involving two carriers that affects 15 percent of the industry. You
have got to use this authority. You have got to focus on the lack of
competition in the airline industry. We have a choice--either force
more competition, as S. 415 would do, or somehow prevent monopoly
pricing.
I am also concerned about the state of security at our seaports.
When we move passengers and freight through airports the FAA has
implemented a system of security in order to protect the public,
however, when cargo or freight moves through a seaport we have no
Federal system in place to try to protect the population from threats
of terrorism, drugs, or criminal acts. I know that the Coast Guard,
which is already overextended, has been working to come up with
policies to try to address these issues. I intend to introduce
legislation to create a security program at our sea borders and, I
would hope that, if confirmed, you could help us address these issues.
Today we will also hear about the nomination of Allan Rutter, of
Texas, to be Administrator of the Federal Railroad Administration (FRA)
within the Department of Transportation. This position is an important
one, and I am pleased to have before us a nominee of evident
professional qualifications and experience with rail transportation
policy issues.
If confirmed as FRA Administrator, Mr. Rutter will be responsible
for administering and enforcing the railroad safety laws of the United
States. The FRA plays a critical role in implementing Federal policies
intended to ensure the vitality and economic health of the Nation's
railroads, rail labor, and the railroad supply industry. In addition,
if confirmed, Mr. Rutter will be confronted with decisions regarding
many important rail issues, including the appropriate role and mission
of the National Railroad Passenger Corporation (Amtrak), as well as
proposals for an increased Federal role in promoting the development of
new high-speed ground transportation systems in this country. These
challenges will require significant effort and commitment on the part
of the FRA Administrator. Mr. Rutter brings strong experience in rail
transportation and working with different groups at the State level to
the tasks which lie ahead at the FRA.
The Committee will also be hearing from Ellen Engleman of Indiana,
to be Administrator of the Research and Special Programs Administration
(RSPA) within the Department of Transportation. RSPA is one of the
Department's most important components and one of the youngest. It was
established in 1977 and is responsible for hazardous materials
transportation and pipeline safety, transportation emergency
preparedness, safety training, multi-modal transportation research and
development activities, and collection and dissemination of air carrier
economic data. Two of the more important offices within RSPA are the
Office of Hazardous Materials Safety and the Office of Pipeline Safety,
which establishes and provides for compliance with standards that
assure public safety and environmental protection in the transportation
ofgas and hazardous liquids by pipeline.
In the too recent past there have been several pipeline accidents
across the Nation which have resulted in loss of life and serious
property damage. In fact, the Office of Pipeline Safety recently
proposed the largest ever fine against a natural gas pipeline carrier
last week. These accidents call for a vigorous response on the part of
RSPA, and a focus on improving safety. The nominee for the position of
RSPA Administrator is Ellen Engleman, and she is coming to us with good
amount of experience in the business arena. I am pleased to welcome Ms.
Engleman, and all of the DOT nominees to this Committee, and look
forward to hearing from them.
[The prepared statement of Senator Rockefeller follows:]
Prepared Statement of Hon. John D. Rockefeller IV,
U.S. Senator from West Virginia
Nominations of Bodman, Rutter, Van Tine, and Engleman.
Thank you Mr. Chairman. I appreciate the opportunity to make a
brief statement on the nominations of these four highly qualified
individuals.
deputy secretary of commerce
As he assumes the role of Deputy Secretary of Commerce, I expect to
have a close working relationship with Mr. Bodman on a variety of
science and technology programs. I was impressed by his strong
technology and R&D background, and I believe that his nomination bodes
well for many programs, such as EPSCoT and the research ``doubling''
bill, that are Commerce Department priorities for me and the nation.
As you know, I have more than a passing interest in the state of
the U.S. steel industry. I look forward to working with Mr. Bodman on
steel issues, particularly in dealing with the root causes of the
current steel crisis, namely foreign over-capacity and market-
distorting foreign subsidies.
administrator of the federal railroad administration
I hope that Mr. Rutter will take the time early in his tenure as
Administrator to examine the roles and responsibilities of the Surface
Transportation Board and the FRA, to see where they overlap, and to see
where he can be active in helping to create a more competitive freight
rail market. As part of this analysis, I expect Mr. Rutter to carefully
consider the current division of labor between the STB and the FRA, and
to recommend to Congress changes that should be made to help the FRA to
better perform its functions.
I don't know how closely Mr. Rutter monitored the work of the FRA
under the Clinton Administration, but candidly, I believe it stayed too
much on the sideline. I think the current State of the freight rail
industry may be partly blamed on their unwillingness to engage on many
of the issues in the industry.
In general, I look forward to working with Mr. Rutter on the full
range of responsibilities as Administrator of the FRA.
general counsel of the department of transportation
I will look to the General Counsel at the Department of
Transportation for assistance with my two major transportation
priorities--aviation, especially small community service, and
competition in the freight rail industry.
The General Counsel plays a crucial role in aviation policy
matters. He will be involved in overseeing the FAA's safety authority
and also directly involved in domestic and international aviation
economic issues. For instance, I would expect Mr. Van Tine to clearly
indicate that neither the Port Authority of New York and New Jersey,
nor other airports have the authority to impose congestion pricing
schemes.
I hope that Mr. Van Tine will work with Congress to improve air
service to small communities. In the role of General Counsel, you will
hear a lot of complaints about air service, prices and competition, and
no comments will mean more to me than those about small and rural
community service. There are two programs--the essential air service
program and the small community pilot program--that can be a lifeline
to small towns in need of air service.
Finally, DOT plays a crucial role in international aviation issues.
I expect a litigator of Mr. Van Tine's talents to help the Secretary
and the Administration make persuasive arguments about some recent
unfortunate aviation decisions by the European Union on behalf of
American industry and consumers.
In the area of railroads, as I have said, I will look to the
Department of Transportation to take an active and supportive role in
the efforts of this Congress to achieve true competition for both the
shipper community and the railroads themselves.
administrator, research and special programs administration, dot
Finally, I look forward to working with Ms. Engelman in her role as
Administrator of RSPA. I trust that she will take her responsibility
for ensuring the public safety very seriously. As the person in charge
of a regulatory agency charged with securing the transportation of
hazardous materials, she is no doubt aware that few people, perhaps no
one, in government has a more pervasive day-to-day oversight of
potential human health and environmental risks.
I hope that in this role she will always look to the public welfare
first and foremost. I expect her to have constructive suggestions about
how this Congress can improve the safety of the highways and pipelines
that carry our most potentially dangerous chemicals.
Secretary Evans. He does not need any help, believe me. He
is fine.
The Chairman. Very good.
Mr. Bodman, would you like to present your wife, whom I
believe is present, and any other members of your family?
STATEMENT OF SAMUEL W. BODMAN, NOMINEE TO BE DEPUTY SECRETARY
OF COMMERCE
Mr. Bodman. Thank you, Mr. Chairman. My wife Diane is here
and my stepson Perry Barber is here as well.
The Chairman. We welcome them to the Committee. We are glad
to have them with you. We would be delighted to hear from you,
sir.
Mr. Bodman. Mr. Chairman, I have prepared a formal
statement which I think has been distributed to the Committee.
The Chairman. It will be included in its entirety, and you
may summarize it.
Mr. Bodman. Thank you. I will not burden you with going
through it. I would first want to tell you and the Committee
Members how pleased I am to be here. I am particularly
appreciative of the Committee holding this hearing so promptly
following my nomination. I think my colleague Mr. Evans,
prospective colleague Mr. Evans, is anxious to put me in
harness, so I know he is very pleased and thankful that you
have attended to this as promptly as you have, and I wanted to
express my gratitude for that.
The overview that I would give you is quite brief. I am a
chemical engineer. I went to Boston to be a student 40 years
ago and I never left. I held four jobs while I was there. I was
a teacher of engineering for 8 years and during that time I
consulted what we believe to be the premium venture capital
company of its type, so I spent many years engaged in that
activity.
I left both jobs and went to what was then a small company
called Fidelity. There were 50 people there at the time and we
built it up to a company of some substance that is now, I
believe, an important global investment manager. Then last, I
spent the last 14 years as the manager of a globally deployed
specialty chemical company where we worked hard on such issues
as new product innovation and the sorts of things that I think
will be on our agenda in the Commerce Department.
Secretary Evans asked me to consider this assignment and I
have been very pleased to do so. I have been studying some of
the records of the things that he agreed to undertake and I
read his transcript of his testimony here and I just thought I
would comment that the major thrust, as I read his comments to
you were thrusts and major objectives of the Commerce
Department that I certainly subscribe to.
First, we would view ourselves as a partner with the U.S.
Trade Representative in expanding our trade agreements and
making sure that we enforce all of our trade agreements that
are in place.
Second, we are committed to managing all aspects of NOAA's
portfolio of responsibilities. It is quite broad, as I know you
are aware, and we will have particular focus on preserving our
environment and of managing the regulatory environment of the
various aspects of NOAA's portfolio of duties.
We intend to enhance America's technology leadership by
fostering invention and creativity through a variety of the
agencies that the Department is responsible for.
Last, we are committed to improving the performance and the
operation of the Patent and Trademark Office, because without a
well-managed intellectual property protection we really cannot
have the kind of creativity and invention that we need.
So those are the four focuses that we expect to pursue, and
I am very supportive of all of those. I would conclude by
reiterating how pleased and proud I am to be here. I am very
grateful to my family and my friends for their support in my
undertaking this responsibility, and I am grateful again that
the Committee has been as prompt as it has in undertaking this
hearing.
With that, I thank you, sir.
[The prepared statement and biographical information of Mr.
Bodman follow:]
Prepared Statement of Samuel W. Bodman, Nominee to be Deputy Secretary
of Commerce
Mr. Chairman, Senator McCain and Members of the Committee, I am
very proud to have this opportunity to come before you today. I wish to
thank the President for nominating me to this position. I also
appreciate the courtesies shown to me during my visits with the
Committee members last month. I want to summarize briefly my own
professional background and how those experiences will affect my
approach to the responsibilities of the Deputy Secretary of Commerce.
Having been born and raised in a small Illinois community, my
education was entirely in the field of chemical engineering, and my
final degree was the ScD completed at MIT in 1965. I taught chemical
engineering for 8 years at MIT while also consulting with Boston's
leading firm in the emerging field of venture capital. I left both jobs
to join a then-fledgling investment firm called Fidelity. I spent 17
years there, served the last 10 years as president of Fidelity, and
helped orchestrate the transformation of that tiny company into a
powerful financial service enterprise.
Finally, for the past 14 years, I have served as Chief Executive
Officer of Cabot Corporation, one of Boston's oldest industrial
companies. Cabot is a specialty chemical manufacturer with forty
manufacturing plants in twenty-five countries. During my tenure we
transformed Cabot from a mundane old-line company into a technology
driven business, and we achieved outstanding results for our
shareowners, employees, and customers.
Through all these experiences I have come to revere the genius of
the American free enterprise system. Our country's ability to create
and commercialize new products is unmatched, and that ability has led
to unsurpassed economic growth. On the other hand, our approach is far
from perfect. We have environmental problems; we have not always
implemented reciprocal free trade arrangements with our trading
partners; and the fruits of America's economic system have not always
been distributed among all members of our society in an effective
manner. Confronting these problem while retaining our greatness and
growing our economy will require that, in the words of Don Evans, ``we
create an environment in which the (entrepreneurial) spirit flourishes,
an environment that promotes innovation, risk-taking, and equal
opportunity.'' Secretary Evans has already described to you his
priorities in managing the Department, and I subscribe to them:
1. First we expect to play an important role as a partner of
the U.S. Trade Representative in expanding our trade agreements
and enforcing all agreements that are in place;
2. We expect to manage effectively all aspects of NOAA's
portfolio of responsibilities. Our environment must be
preserved, and regulations must be based on sound science. I am
well aware of President Bush's recent directive to the Commerce
Department related to the U.S. Climate Charge Research
Initiative, and I am prepared to assist Secretary Evans in
creating and carrying out that program;
3. We intend to enhance American technology leadership by
fostering invention and creativity both in the government and
the private sector. That leadership will be augmented by
establishing appropriate industrial standards, by funding
directly new research initiatives, and by the pragmatic
administration of export controls over strategic technology;
and
4. We will proactively seek continued improvement in the
operations the Patent and Trademark Office. Creativity and
invention cannot be institutionalized without adequate
intellectual property protection.
I have been pleased and privileged to receive a wide range of
comment and input during my personal visits with the Committee members.
Those remarks have been highly educational and helpful--particularly
for a person whose entire career has been in the private sector--and I
am grateful for this. As we go forward, if I am fortunate enough to be
confirmed by this Committee and the Senate, I pledge to make myself
available to the Committee to personally deal with any and all
challenges that confront us jointly in the future.
In closing, I would like to thank my family and friends, and most
particularly my wife Diane, for their support of my decision to take on
this assignment in public service. I am proud to be here. I am proud to
serve this President, this Secretary of Commerce, and this Committee.
Mostly, I am proud to be an American and to play a small role in
serving our great country.
______
A. Biographical Information
1. Name: Samuel W. Bodman.
2. Position to which nominated: Deputy Secretary of Commerce.
3. Date of nomination: March 16, 2001
4. Address: Not released to the public.
5. Date and place of birth: November 26, 1938, Chicago, Illinois.
6. Marital status: Married to Mary Diane Petrella Bodman.
7. Names and ages of children: Children: Elizabeth Bodman Mott, 38;
Andrew Morgan Bodman, 36; Sarah Bodman Greenhill, 33; Stepchildren:
Perry Oscar Barber III, 24; Caroline Killough Barber, 21.
8. Education: Secondary: Glenbard Township High School, Glen Ellyn,
Illinois, 1952-1956; High School Diploma, June, 1956. College: Cornell
University, Ithaca, New York, 1956-1961, B. Ch. E., June, 1961.
Graduate School: Massachusetts Institute of Techonolgy, Cambridge,
Massachusetts, 1961-1965, Sc.D., June 1965.
9. Employment record: (a) Massachusetts Institute of Technology,
Cambridge, MA, Professor of Chemical Engineering, 1964-1970. (b)
American Research and Development Corporation; Boston, MA, Venture
capital investing, Technical Director, 1964-1970. (c) Fidelity
Investments, Boston, MA, Investment management, President and Chief
Operating Officer, 1970-1986. (d) Cabot Corporation, Boston, MA,
Diversified, global chemical manufacturer, Chairman and Chief Executive
Officer, 1987-2001.
10. Government experience: In 1993 I served on an advisory
committee to Governor William Weld on developing strategies for new
business development in Massachusetts.
11. Business relationships: Directorships: Cabot Corporation; John
Hancock Financial Services; Thermo Electron Corporation; Cabot
Microelectronics Corporation; Cabot Oil and Gas Corporation; Security
Capital Group, Inc.; Westvaco, Inc.; Apco Oil and Gas Company; Steam
Engine Systems Corporation; Marathon Manufacturing Company; Haemonetics
Corporation; Rixson-Firemark Corporation; Environmental Research &
Technology Corporation; Mardrill, Inc.; Guardian Oil Company;
Respiratory Care, Inc.; Continental Cablevision, Inc.; Skok Systems,
Inc.; Well Tech, Inc.; Fidelity Group of Mutual Funds; FMR Corporation;
Industrial Research, Inc.; Aspen Technology, Inc.; MCI New England,
Inc.; France Drilling Company; Amata Gas, Inc.; Index Technology, Inc.
Trusteeships of Non-Profit Organizations: Massachusetts Institute
of Technology; Isabella Stewart Gardner Museum; New England Aquarium;
French Library and Cultural Center; MITRE Corporation; Babson College;
Northeastern University; Massachusetts General Hospital Physicians
Organization.
Employment: Massachusetts Institute of Technology, Professor of
Chemical Engineering, 1964-1970; American Research and Development
Corporation, Technical Director, 1964-1970; Fidelity Investments,
President and Chief Operating Officer, 1970-1986; Cabot Corporation,
Chairman and Chief Executive Officer, 1987-2001.
12. Memberships: Scholarly Memberships: American Academy of Arts
and Sciences.
Social Memberships: The Country Club, Brookline, Massachusetts;
Somerset Club, Boston, Massachusetts; West Chop Club, Martha's
Vineyard, Massachusetts; Houston Country Club, Houston, Texas; Lost
Tree Club, North Palm Beach, Florida; Coronado Club, Houston, Texas.
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. None.
(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. The Committee for Tim
Wirth, 10/16/91, $500; The Weld Committee, 09/16/93, $1,000; The Menino
Committee, 10/12/93, $500; The Harshbarger Committee, 05/18/94, $500;
George W. Bush for Governor, 06/07/94, $500; The Senator Chafee
Committee, 10/04/94, $500; No On 6&7 Committee, 10/14/94, $2,500; Scott
Harshbarger Committee, 03/25/96, $500; Weld for Senate, 09/09/96,
$1,000; Harshbarger Committee, 01/20/98, $500; RNC Presidential Trust,
06/15/00, $20,000; Bush-Cheney Fund, 11/14/00, $5,000.
14. Honors and awards: McMullen Scholar--Cornell University; Alfred
P. Sloan Scholar--Cornell University; National Science Foundation
Fellowship--Massachusetts Institute of Technology; Eastman Kodak
Award--Massachusetts Institute of Technology; Tau Beta Pi--Cornell
University.
15. Published writings: The Industrial Practice of Chemical Process
Design, textbook published by MIT Press, 1968.
16. Speeches: None.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? I was, recommended to the President by
Secretary Donald Evans.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
I believe my experience as a Professor of Chemical Engineering at
MIT will provide an excellent background in dealing with the issues
confronting NOAA, the Technology Administration, and the National
Telecommunications and Information Administration. I believe my
experience as a creator of new business opportunities at American
Research and Development Corporation, Fidelity Investments, and Cabot
Corporation, will produce valuable insights in managing the Patent and
Trademark Office. I believe my experiences in managing Fidelity's
worldwide investment activities will allow me to contribute to the
Department's understanding of global economics and international trade
issues. These issues are central to the management of the Bureau of
Export Administration, Economics and Statistics Administration, and the
International Trade Administration. Finally, my recent experiences in
managing Cabot Corporation's worldwide manufacturing enterprise--40
plants in 25 countries--will provide valuable perspective on the
challenges and opportunities confronting American business leaders as
they seek to participate in and benefit from global opportunities.
B. Future Employmnent 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, although certain employee benefit arrangements, including
stock option grants established prior to my consideration for
government service will continue pursuant to their terms as described
in my Form SF278.
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.
I have no plans, commitments or agreements to pursue outside
employment during my government service.
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?
I have no plans, commitments or agreements to resume any employment
or affiliation with any corporation or organization.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service?
No one has committed to employ me after my government service.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable?
If confirmed, I expect to serve a full term in this office--
presumably until the next Presidential election.
C. Potential Conflicts of Interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers.
See Exhibits A and B attached, which are portions of exhibits to my
Form SF278.
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, because my ethics agreement addresses all potential conflicts
and creates a mechanism with which to deal with them.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 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.
I don't believe that I have had any business relationship or
transaction during the past 10 years that in any way could cause a
conflict of interest with respect to my responsibilities in the
Department of Commerce.
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.
I have never engaged in any effort to influence any legislation or
affect any public policy.
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 consult with ethics officials in the Office of the General
Counsel for the Department of Commerce to resolve any potential
conflict of interest.
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 Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position?
Yes, I do.
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.
I, personally, have not been the subject of any administrative
agency proceeding or civil litigation at either Fidelity Investments or
Cabot Corporation, my two principal employers for the past 30 years.
However, both companies have, of course, been involved with a wide
variety of litigation. I have asked the General Counsels of each
company to summarize the most significant litigation issues confronting
them at this time. Their responses are appended to this report (see
Appendices A and B).
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.
I know of no relevant additional information.
E. Relationship With Committee
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information?
I will ensure, to the best of my ability, that the Commerce
Department complies with deadlines set by congressional committees.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosure?
I will ensure, to the best of my ability, that the Commerce
Department will protect congressional witnesses and whistle blowers
from reprisal.
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?
I will cooperate, to the best of my ability, in providing
congressional committees with requested witnesses which will include
technical experts and career employees.
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 Department of Commerce, as the voice of business within the
Administration, has long been a leader in advocating and using market-
oriented regulatory approaches in lieu of traditional command-and-
control regulations when such approaches offer a better alternative.
While not principally a regulatory agency, all regulations of the
Department are designed and implemented to maximize societal benefits
while placing the smallest possible burden on those being regulated.
The Deputy Secretary does not issue regulations and is not
typically involved in the review of individual regulations issued by
agencies of the Department. However, I intend to work closely with the
General Counsel, who serves as the Regulatory Policy Officer for the
Commerce Department and whose office does review each regulatory action
to be issued by the Department, to ensure that I am briefed on and
participate in the review of any controversial and/or important
regulation. In this manner, I will ensure that regulations issued by
the Department comply not only with the letter, but also with the
spirit of the laws passed by Congress.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
As the strategic plan of the Department sets out, the current
mission of the Department of Commerce calls for the promotion of job
creation and the improvement of living standards for all Americans by
growing the economy and contributing to technological advancement.
The Department's first strategic goal is to provide the information
and framework to enhance economic performance. Programs supporting this
goal are those to broaden the participation in economic growth, to
promote growth and trade while protecting our security, and to support
decisionmaking in our society.
The second strategic goal is to enhance innovation in our society.
Programs supporting this goal are those to create technical knowledge
and capability to protect intellectual property, and to provide
infrastructure as America transitions to a digital economy.
Third, the Department seeks to learn more about our environment so
as to permit sustainable economic growth. Related programs and
objectives include the promotion of conservation of our natural
resources and the understanding and prediction of natural phenomenon.
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?
I am willing to appear and testify before congressional committees
as requested by those committees.
F. General Qualifications and Views
1. How have your previous professional experience and education
qualify you for the position for which you have been nominated?
As mentioned in my answer to Question A. 17(b), I believe that my
previous professional experience qualifies me to be Deputy Secretary of
Commerce. I have taught engineering at MIT. I have invested venture
capital in new companies for American Research and Fidelity. I have
managed a global investment operation for Fidelity Investments which is
responsible for organizing and deploying the assets of millions of
American citizens. Last, for the past 14 years, I have reorganized and
rebuilt the operating assets of Cabot Corporation. Cabot manages 40
manufacturing facilities in 25 countries. We have been a leader in
managing our safety and environmental responsibilities, have developed
a competent diverse organization with high morale and enthusiasm, and
also have produced superior financial returns.
I believe that all of these experiences qualify me for a leadership
position in the Commerce Department. My technical background should
qualify me to deal with the environmental issues, the atmospheric and
oceanic research, and the advanced technology that form a large part of
the Department's portfolio. Having dealt with intellectual property
issues as an academician, venture capitalist, and industrialist gives
me unique perspective on the nation's copyright and patent functions.
My work as an investment manager and industrialist helps me understand
the global economy and deal with complex global trade issues.
All in all, I believe that these experiences provide me with a very
broad background with which to confront the complex portfolio of
activities in the Commerce Department.
2. Why do you wish to serve in the position for which you have been
nominated?
I wish to serve in order to give something back to the United
States of America. My family and I have benefited greatly by our
participation in the American economy. If confirmed, I would view it a
privilege to give something back to the U.S. commercial enterprise.
3. What goals have you established for your first 2 years in this
position, if confirmed?
If confirmed, my first goal will be to develop an in-depth
understanding of the people, the organizations, and the programs that
constitute the Department of Commerce. Following that, I expect to
devote most of my time in the first 2 years to working with those
programs which are most directly related to the highest priorities of
the Administration, of Congress, and of American business. For example,
the Department should be a leading resource in studying and forecasting
changes in our natural environment on earth--both oceanic and
atmospheric. I expect to be active in encouraging these efforts and
integrating them with work in other Departments and agencies. Many fast
growing business segments depend on an effective patent system for
their economic health. Understanding these needs and the Department's
response to them will be a major objective. The management of our
fisheries is a controversial subject and one for which scientific
understanding is difficult to come by. A third objective will be to
improve my understanding of this issue and the various approaches that
are being used in managing our fisheries. Last, I have had considerable
experience in international trade. I hope I can help expand the markets
for American exports and investment.
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?
The only lacked skills of which I am aware are those that derive
explicitly from serving in the Federal Government--those related to
``knowing how the system works.'' I believe that I will learn those
skills as I pass through the confirmation process and in the first few
months of my formal service.
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 sctor, 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.
I believe that the United States Government is charged with the
responsibilities enumerated in the Constitution. These include
providing for national defense and the safety of our citizens, carrying
out foreign policy and maintaining an economic system conducive to the
growth of our economy. Government is also responsible for encouraging
American business in the global marketplace, supporting fundamental
research to preserve the health and technical advancement of our
society, managing our natural resources, and protecting our
environment.
Specifically, with respect to activities in the Commerce
Department, government should play the role of encouraging the great
American economic system to operate at full efficiency to the benefit
of all citizens. Government regulation should provide appropriate
limits on private sector activity, but should be utilized sparingly.
Environmental standards, workplace safety, anti-competitive behavior,
proper financial reporting, and the like should be governed bo
appropriate regulatory standards. Such regulation should ensure the
safety, fair treatment, and sense of well-being for all our citizens. I
believe it also important that all our regulations be constructed and
updated so as to recognize the tremendous changes that have occurred
and are likely to occur in society at large. For example, many of our
regulations and laws were developed at a time when American commerce
dominated the world. With rare exception, such dominance no longer
exists. Global competition dominates the world landscape, and U.S.
regulations and law should recognize that. Similarly, the rapid speed
of technological change is breathtaking in speed and grandeur.
Legislation and regulation will be hard-pressed to keep pace, but every
effort must be made to do so.
To the extent possible, regulation and law should remain removed
from the creative process of inventing new technology and developing
new products. The American genius for innovation and creativity is
unsurpassed globally; regulation and legislation can only serve to
stifle that process, and should be administered sparingly.
Lastly it must be noted that some of our citizens have not fully
participated in America's tremendous economic progress of the last
decades. Government can and should play an active role in supporting,
encouraging, educating, and liberating less fortunate members of our
society. To the extent humanly possible, no one should be left behind.
In this instance education is the key, and government should take the
lead and provide the resources.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives.
The Commerce Department, as I see it, has the most diverse set of
missions of any department or agency in the Federal Government. In
thinking about this question, I would bifurcate the missions of the
various parts of the Department. First are those Administrations whose
primary responsibility is professional and their tasks require the
delivery of the highest quality of service to the American public.
Second are those Administrations that are primarily advocates for the
development, expansion, and success of American business both at home
and abroad. The following paragraphs deal with each of these mission
categories.
Most of the employees and the majority of the Department's budget
are devoted to Administrations which are charged with the
responsibility of delivery of professional services. In my mind, these
include NOAA, Patent and Trademark Office, Technology Administration,
and the Economics and Statistics Administration. All of these
organizations are charged with the responsibility of collecting data,
distilling and sifting those data in order to create information, and
correlating and analyzing that information in order to produce various
forms of knowledge. That knowledge--be it a fisheries population model,
a specific patent issuance, or an informed census report--needs to be
effectively communicated to the American people and their governmental
representatives. In most instances the quality and value of such
knowledge can only be judged by a professional peer review. The
practical implications of such knowledge are often expressed in the
form of regulation or legislation.
The second group of Administrations, in my judgment, have a more
easily defined and easily measured set of missions. In sum, these
missions involve the continuous improvement and global expansion of
American business. The Bureau of Export Administration, Economic
Development Administration, and International Trade Administration all
are charged with the expansion of the American free enterprise system
domestically and especially abroad. Freeing up markets so that U.S.
business can effectively export has to be a lead objective of the
entire Department. The American enterprise system is the greatest
economic development in history. Making that system operate throughout
the world will not only improve opportunities in America, but can
literally change the state of world prosperity.
7. In reference to question No. 6, what forces are likely to result
in changes to the mission of this agency over the coming 5 years?
I see no forces that are likely to produce wholesale changes in the
missions of the various Administrations of the Department. However,
there are two types of forces that will change the priority or
importance of these missions. The first of these are economic forces
can and will affect the trade and export functions of the Department.
More difficult economic conditions are likely to produce greater focus
on trade issues. The rapid development of one part of the economy--for
example biotechnology or venture capital--may necessitate a shift in
emphasis and priority from those responsible for managing the
Department of Commerce. The second set of forces are those of a
physical or chemical nature--natural forces you might call them.
Everything from changes of weather patterns to technical developments
in understanding global warming can and should change priorities and
allocation of appropriate resources.
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?
As I described in the answer to Question F.7, outside economic
forces and external physical or natural phenomenon affect the
Department's ability to achieve its various missions.
The three top challenges to the Department's success are enumerated
below:
(i) First is the economy. A neutral or recessionary economic
environment could require budgetary reductions and consequent
impairment of the Department's ability to function.
(ii) Second is the pace and nature of technological change. So much
of the Department's mission is scientifically based that an unexpected
scientific finding could call into question and call for a redirection
of programs and mission definitions. Specific examples of this
phenomenon could develop from research efforts in biotechnology,
internet-based systems, or oceanic physics and chemistry.
(iii) The third challenge results from the Department's
responsibility to encourage a broad distribution of the benefits of the
country's economic growth. The tremendous growth of the internet and
related computer sciences is occurring just as the great deficiencies
in American education are becoming increasingly apparent. Participation
in economic growth requires education which is lacking in some regions
of the country and sectors of our society. Rationalizing that disparity
is an enormous challenge.
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?
In many respects the Department has been quite successful over the
past few years. The economy has been strong and funding has been
adequate. However, there are a few areas where improvement can be
sought. The development of trade partnerships in Southern Asia has been
impaired by the economic turmoil in that region over the past few
years. Commercial relations with China have moved only haltingly
because of domestic disagreements as to the appropriate policy for
dealing with the Chinese. On the scientific front, uncertainty over the
causes or even the existence of global warming seems to have interfered
with the responsiveness of our government in dealing with that issue.
Similarly an uncertain scientific foundation in understanding our
fisheries and their evolution seems to have hindered the development
and dissemination of effective and widely accepted plans for managing
those natural resources. Last, very little progress has been made in an
equitable distribution of the benefits of America's economy. Great
efforts and resources have been expended; however, the problem
continues to be glaringly apparent. Education is a big part of the
solution, and the Department can and should contribute to that effort.
10. Who are the stakeholders in the work of this agency?
Ultimately the stakeholders in the work of the Department of
Commerce are the citizens of the United States. As proxies for the
citizens, the local, State, and Federal Governments must be thought of
as intermediaries or representative stakeholders.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10?
As Deputy Secretary of Commerce, I am responsible first to the
Secretary of Commerce and with him to all American citizens and then
intermediaries or representative stakeholders. First, we are
responsible to the President and the Executive Branch of the Federal
Government for carrying out the President's policies to the best of our
abilities. Second, we are responsible to Congress and its various
committees from whom we receive financial support and legislative
requirements and to whom we are obliged to report our progress and to
respond to suggestions and criticisms.
12. Question 12. (was not available at the time this hearing went
to press)
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 report on your progress in achieving
those goals.
Identifying performance goals and measuring progress against those
goals is a widely accepted approach to managing and improving the
performance of a complex enterprise. The most important benefit derived
from this approach is the identification of areas of shortfall at an
early enough time to permit timely response. It also provides an
effective means of recognizing individuals and groups that are
performing at a superior level.
(b) What steps should 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?
If the Commerce Department is failing to achieve any of its
objectives, I presume that the Department leadership would be asked for
an explanation and a remedial plan. If failure persists after a
reasonable period for management response, I presume that Congress
would and should institute responses up to the limit of its powers. I
further presume that these responses would include some or all of the
remedies mentioned in framing the question.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
First I should be held accountable for all legislated requirements
for managing the Department. These would include the Chief Financial
Officers Act of 1990 and the Government Performance and Results Act of
1993 (GPRA). In addition the Annual Performance Plan for the
Department, as required by the GRPA, will set forth a series of
tactical and strategic goals. The Secretary of Commerce and I should be
held accountable to these goals and our progress measured against these
goals.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
I follow the philosophy of setting goals and expectations for each
employee, of periodic meetings and/or reports to assess progress, and
an annual review to agree with the employee as to his or her cumulative
performance. I pride myself on maintaining an informal atmosphere and
make myself available for frequent unscheduled interaction. Most
colleagues who have worked under my supervision over the years tell me
that they have learned a good deal and have personally benefited from
the interaction. I have had no employee complaints against me.
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 have had no prior working relationship with Congress or its
committees.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
As I understand it, the Inspector General has a role of
investigating any instances of fraud, waste and abuse that are thought
to exist within the Department. The Inspector General then has an
obligation to report his/her findings to the Secretary and to Congress.
Over time I would hope to develop a relationship with the Inspector
General of the Commerce Department such that he/she would communicate
frequently and freely with the Secretary's office so that, if
warranted, prompt remedial action could be implemented.
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.
If confirmed, I would expect to have frequent personal interaction
with the Senate Committee on Commerce, Science and Transportation and
other stakeholders as to the progress we are making on various missions
of the Department. I am certain those meetings will afford ample
opportunity for appropriate suggestions and criticisms to be offered.
Further, we will be obliged to prepare and submit an Annual Performance
Plan which will enumerate our objectives. I would expect frequent
discussions related to our progress on these objectives to take place
between Commerce staff (including myself), and all stakeholders. I
believe I would have the affirmative obligation to alert affected
stakeholders, including the committee, if I anticipate significant
shortfall from any of our objectives.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities: Please
state your personal views.
Because of the highly diverse nature of the Department's
activities, I find it impossible to give the Committee a meaningful set
of priorities. However I would offer a few suggestions: (i) First we
will need approval for a FY '02 budget for the Department. This budget
should be consistent with the President's priorities and objectives.
(ii) We should seek a reauthorization of the legislation for the
regulation of our fisheries. (iii) I believe that ``fast track''
authority for the President to negotiate international trade agreements
is very high priority.
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.
I do pledge to work with the Secretary to organize a management
system to allocate discretionary spending based on national priorities
as determined in an open forum. I am aware that Congress will have
views on these matters and will express them from time to time. These
views, as well as views within the Department and other parts of the
Executive Branch, will form the basis for spending allocation.
The Chairman. The Committee is very pleased to have you
willing to come and sacrifice in order to serve the government.
You say you are going to foster technology, and yet I am
reading in the papers that you are going to get rid of the
Advanced Technology Program (ATP). What do you mean you are
going to foster it, but then get rid of it?
Mr. Bodman. Well, there are all aspects of technology
fostering, if you will, that go on within the Commerce
Department. The Advanced Technology Program is one of them.
The Chairman. What do you think of it?
Mr. Bodman. Well, I have to say, sir, that first I would
tell you that you are looking at a product of the Federal
funding of research. I was funded during my graduate years at
MIT by a National Science Foundation fellowship and the works
that I depended upon were projects and programs that had been
funded by the Office of Naval Research and by DARPA.
I am a great believer in the effectiveness and the power of
the Federal Government funding research. I think the question,
at least as I understand it, and I would reiterate I have not
been involved in this, because whatever discussions have gone
on and decisionmaking I have been excluded from, but if I am
confirmed, I would expect that this is one of the areas that
the Secretary would expect me to focus my time and attention on
because I have a good deal of experience in understanding and
managing the process of commercializing technology,
commercializing new ideas.
The Chairman. Well, that said, it is not fostering
research--you came in finally and made a safe landing by the
last comment--by commercializing. What we found in our
experiences some 20 years ago was that we were fostering the
research. There is not any question that the United States of
America is a leader in technology research. But we were not the
leader by any manner or means in the commercialization, the
actual development and the commercialization of it. We have got
hundreds of examples.
We saw that we were losing out, and we had all of this
research proved, but not developed and not commercialized, in
the old Bureau of Standards that you had in the Department of
Commerce. So we developed the Bureau of Standards into the
National Institute of Standards and Technology, launched the
Advanced Technology Program, and then supplemented it with the
Manufacturing Extension Partnership program for the small
businesses and otherwise to gear up and compete.
Now, getting right to the Advanced Technology Program, the
projects that are funded have been vetted and re-vetted. The
decision is made by a non-political panel not influenced by me
or the Secretary, or by calls from the White House. Senator
Danforth of Missouri was the chair at that time, and we went
over it thoroughly in a bipartisan fashion.
One, the particular research that has been found first must
be financed to the tune of 50 percent of those making
application for participation in the ATP. Second, it must be
found to be a unique particular research that needs to be
developed. Then they have to stand in line on a limited funding
basis to see whether or not they ought to be funded, and that
comes through the National Institute of Standards and
Technology within the Department, which is a group of
professionals, and not calls from the Senator and the Commerce
Committee or from the Secretary calling down and saying, I want
to fund this, or from the White House saying, we have got a
campaign going and we would like to take and beef up that vote
in New Jersey, so let us get that New Jersey program going.
So we went about it very, very carefully, and it has
weathered the storms, in fact, first opposed by the executive
branch and then enthusiastically supported. So that is why I am
somewhat dismayed. When you said you were fostering research I
said, well, maybe you have got the wrong idea. It is not the
research at all. It is actually the development and
commercialization of the research.
We have the Academy of Sciences and everything else. We
have got tax write offs and things galore going on that we all
favor with respect to fostering research. But this is the one
program in government that commercializes and develops the
research.
Let me just ask one question about trade. What do you think
is the Commerce Department's role fostering trade? What do you
intend to do about trade? You mentioned NOAA, you mentioned the
Census, you mentioned all these other things, including NIST.
But, you did not mention trade. You have got a Secretary who is
interested in that for a change, and I was wondering if you
were interested.
Mr. Bodman. Yes, sir, I am interested in that. Having spent
the bulk of my time during the last 14 years engaged in
international trade, it seems to me the responsibility of the
Department is twofold: One, to expand our trade agreements,
which will expand markets for American business abroad; and
second, to enforce the agreements that are in place. We expect
to do both.
The Chairman. Well, we got a break in Sunday's New York
Times. I will not read the entire article entitled ``Free
Trade's Promise in Latin America: The Poor Survive It All.''
However, I will read the following:
Their debate barely touches a far more fundamental
question: Does the combination of democracy and free
enterprise guarantee achievement of the larger goal--
higher living standards? In Latin America, the answer
often is no.
[Full article is included in the Appendix.]
I testified 40 years ago before the old International
Tariff Commission, and at that time they said, Senator--
incidentally, I had Tom Dewey representing Japan. Excuse me,
they said,
Governor, what do you expect these emerging countries
from World War II and the Third World countries to
make? Let them make the shoes and the clothing; we will
make the airplanes and the computers.
Now fast-forward 40 years. They are making the shoes, the
clothing, the airplanes, the computers, and by way of
production, we are going out of business. We had 42 percent of
the work force at the end of World War II in production and
manufacturing. By 1965, it was down to 29 percent, and it is
now down to 12 percent. So we are not making anything.
Otherwise, the competition in trade is competition with
ourselves. America's industry has given up on the government.
For example, let us go right straight to Japan. They say: ``You
do the research,'' which bothers me. Secretary Evans has
already sent Dr. Kosmetski over to Japan to set up all of their
research. So they are doing the research, and they are doing
the manufacturing, and we are doing the sales and promotion and
sales in country.
So you do not find--when I used to come 30 years ago, the
first fellow on the trade bill was the downtown lawyer for
Japan. Now it is the downtown lawyer for the Fortune 500. They
are gone. It caused the Wall Street Journal to headline right
after we had the vote on PNTR that it was not really a trade
measure, it was an investment measure. It was to allow
America's industry to invest in China. We have got an $83
billion deficit in the balance of trade with China. Europe does
not have that, but we are going out of business there.
We found, of course, with NAFTA that that is exactly what
it was, an investment agreement with Mexico. Rather than
gaining 200,000 jobs, we have lost 600,000. So it is an 800,000
swing that we know about.
So as you work as the Deputy Secretary of this auspicious
Department of government, commerce and trade--and I would like
to change the name to ``Trade and Commerce'' and emphasize it--
in essence, you are running around worried about fisheries, you
are worried about the Census, you are worried about all these
other tidbits, while the economic strength of the nation is
being drained.
So if you do not mind, please talk to the Secretary and
tell him you are enthused about doing something about trade.
Mr. Bodman. I have the feeling you have already
communicated that, sir.
[Laughter.]
The Chairman. We welcome you and we appreciate it. We are
looking forward to working with you. The Committee will be at
ease to submit questions from a couple of other Senators that I
believe had some questions for you. As soon as we solve this
organizational problem that we have here in the U.S. Senate, we
will be voting on your confirmation.
Thank you very much, Mr. Bodman.
Mr. Bodman. Thank you very much, sir. We appreciate the
help.
The Chairman. Yes, sir.
Our second panel is: Allan Rutter, nominated as
Administrator--our second panel, if they will come forward,
please: Mr. Allan Rutter, he is nominated to be Administrator
of the Federal Railroad Administration; Kirk Van Tine, who is
nominated as the General Counsel at the Department of
Transportation; and Ellen Engleman, who has been nominated to
be Administrator of the Research and Special Programs in the
Department of Transportation.
Mr. Rutter, you have, I believe, your wife with you?
Mr. Rutter. Yes, sir, my wife, Melanie.
The Chairman. We welcome you to the Committee. We are glad
to have you.
Mr. Van Tine, you have your wife and daughter, I believe.
Mr. Van Tine. Yes, Mr. Chairman, my wife Barbara and my
younger daughter, Meredith, who is 17. My older daughter
Lindsay is away at college, and she could not be here today.
The Chairman. Very good.
Ms. Engleman, you have--whoa, boy, you have got a good
group here. You have got your mother, your stepfather, your
nephew, and me as your friend. Go ahead. Would you introduce
your mother and relatives, please.
Ms. Engleman. Thank you, sir. My mother, Beatrice Engleman
Johnson; my nephew, Kyle Andrew Kewis; my stepfather, Robert
Johnson.
The Chairman. We are very glad to have them. Thank you very
much.
Let us start with you, Ms. Engleman. The statements of the
witnesses in their entirety will be included in the record. You
can highlight it as you wish.
STATEMENT OF ELLEN G. ENGLEMAN, NOMINEE TO BE
ADMINISTRATOR OF THE RESEARCH AND SPECIAL
PROGRAMS ADMINISTRATION
Ms. Engleman. Thank you, sir. There was a slight flood
here. I believe that is my first Office of Emergency
Preparedness action.
[Laughter.]
Mr. Chairman, Members of the Committee, and staff: It is
with great humility and appreciation I sit before you today as
President Bush's nominee for the position of Administrator for
the Research and Special Programs Administration within the
U.S. Department of Transportation. If confirmed by the Senate,
I look forward to the opportunity to work with Secretary Mineta
and the Members of this Committee, and I thank you in advance
for your time and consideration.
My professional work experience has focused on a mix of
public policy, law, and communications. As an attorney, I
understand and support the legislative and regulatory process.
As a public policy professional, I understand and support the
need for successful communication and coordination among the
modes within the Department of Transportation and legislative,
executive, and judicial branches of government, as well as key
stakeholders, constituents, and/or employees.
As current president and CEO, I bring a business
perspective with advanced managerial skills and a focus on
achieving a return on investment for Federal dollars and
programs and creating and managing efficient and effective
projects.
If confirmed as Administrator for RSPA, I would focus on
identifying, supporting, and developing when necessary
programs, rules, and regulations that support the goals of
increasing safety for the American people. As an attorney,
regulatory matters are of considerable importance to me. As a
citizen, I believe that regulations are intended to be
supportive of my health and safety. As Administrator of RSPA,
regulatory issues for pipeline safety and hazardous materials
are an important part of the overall role and responsibility of
the RSPA mission.
As such, it would be a key priority to act with the utmost
diligence to ensure that duly enacted laws are enforced, that
regulations comply with the letter and spirit of the law, and
that timely implementation and responsiveness by RSPA is
carried out in all areas. This includes a commitment to working
closely with Congress to deliver successful pipeline safety
reauthorization.
If confirmed, I will work to ensure that a firm commitment
to efficient and effective use of Federal funds is universally
understood and accepted by all within RSPA. I wholeheartedly
agree with President Bush in his statement that it is the
people's money and anyone associated with the governance,
issuance, and responsibility of Federal funds should share in
this belief. In practical terms, this means that programs and
projects within RSPA should be held to a high standard, seeking
to develop and create efficiency and effectiveness in all
tasks.
I will support partnership solutions and innovative
programs and projects that address our national energy goals. I
believe that RSPA program goals should seek synergy among the
transportation modes and other agencies within the Federal
Government. I would focus on inter-agency, intermodal, and
departmental cooperation and coordination whenever possible to
lower costs, focus on avoiding duplication of effort and
responsibility, and developing partnering opportunities.
This includes review of regulatory, contractual, and
procurement standards to remove unnecessary requirements,
procedures, or regulations that discourage innovation, restrict
or limit efficiency and effectiveness, and negate incentives.
I believe that all professionals can improve their
capability and ability to learn, to manage, to develop
professionally and personally. I know that I will face new
challenges in my role as a senior government official if
confirmed. I am willing to listen and learn and dedicate that
which I do know through my professional career and educational
background to do my best each and every day. I will seek out
detailed knowledge of RSPA senior staff and ask Congress and
key transportation constituents and stakeholders to share their
opinions and views to support my education and my understanding
of the other critical issues facing RSPA and the Department of
Transportation.
Honesty, integrity, commitment, ethical behavior, and
perseverance are the core values and performance goals that
would form my responsibilities as RSPA Administrator. It would
be my responsibility to build bridges of communication, enhance
relationships, and fulfill my official responsibilities in a
dutiful, honorable, and responsible manner. In addition, I hope
to offer measurable results via improved efficiency,
effectiveness, awareness, cost versus return on investment, and
responsiveness.
I believe that we work as individuals, but are most
effective when we come together as a team. I believe in
rewarding individual performance, supporting individual
professional growth, and establishing clear direction, goals,
and advertised rewards and consequences. In short, I believe in
open and honest communication with respect to the individual,
his work, his work ethic, and his ethic.
I believe in leading by example and would provide
motivation and enthusiasm and hold myself accountable for
failures. If confirmed, I will work as closely and regularly
with Congress as possible.
As a daughter of a Federal employee who is in her forty-
sixth year of government service, I am proud to share her
belief that public service is both an honor and a
responsibility. As an officer of the U.S. Naval Reserve, I am
proud to serve this country. As the president and CEO of
Electricore, a public-private partnership, I have had the
responsibility to protect Federal investment, to ensure
successful program management, and develop winning strategies
to support our national goals of education, economic
development, environment, and energy independence. As a
community volunteer, I know what a difference a single person
can make when the heart is committed to a larger goal than
oneself. As a proud Hoosier, I believe in the American dream
and the American spirit.
To serve as the Administrator for RSPA would be the
greatest honor and responsibility that would call upon my
professional and personal knowledge and skills in a unique role
of public service. I believe that we as a nation are on the
critical edge of decisionmaking that will affect our country
and our world for generations to come. It would be my honor and
privilege to dedicate my heart and my mind to supporting
President Bush, Secretary Mineta, and the American people in
this mutual effort, and to serve all Americans who rely on safe
and secure transportation enforcement and a safe and effective
national transportation system for goods and services.
Thank you again for your time and consideration.
[The prepared statement and biographical information of Ms.
Engleman follow:]
Prepared Statement of Ellen G. Engleman, Nominee to be Administrator of
the Research and Special Programs Administration
Mr. Chairman and Members of the Committee: It is with great
humility and appreciation that I sit before you today as President
Bush's nominee for the position of Administrator for Research and
Special Programs Administration within the Department of
Transportation. If confirmed by the Senate, I look forward to the
opportunity to work with Secretary Mineta and the Members of this
Committee. I thank you in advance for your time and consideration.
My professional work experience has focused on a mix of public
policy, law and communication. As an attorney, I understand and support
the legislative and regulatory process. As a public policy
professional, I understand and support the need for successful
communication and coordination among the modes within the Department of
Transportation and the Legislative, Executive and Judicial branches of
government as well as key stakeholders, constituents and employees. As
a current President and CEO, I bring a business perspective with
advanced managerial skills and a focus on achieving a return on
investment for Federal dollars and programs and creating and managing
efficient and effective programs.
If confirmed as Administrator for RSPA, I would focus on
identifying, supporting and developing, when necessary, programs, rules
and regulations that support goals of increasing safety for the
American people.
As an attorney, regulatory matters are of considerable importance
to me. As a citizen, I believe that regulations are intended to be
supportive of my health and safety. As Administrator of RSPA,
regulatory issues for pipeline safety and hazardous materials are an
important part of the overall role and responsibility of the RSPA
mission. As such, it would be a key priority to act with the utmost
diligence to ensure that duly enacted laws are enforced, that
regulations comply with the letter and spirit of the law and that
timely implementation and responsiveness by RSPA is carried out in all
areas. This includes a commitment to working closely with Congress to
deliver successful Pipeline Safety Reauthorization.
If confirmed, I will work to ensure that a firm commitment to
efficient and effective use of Federal funds is universally understood
and accepted by all within RSPA. I wholeheartedly agree with President
Bush in his statement that it is the ``people's money'' and anyone
associated with the governance, issuance and responsibility of Federal
funds should share in this belief. In practical terms this means that
programs and projects within RSPA should be held to a high standard,
seeking to develop and create efficiency and effectiveness in all
tasks. I will support partnership solutions in innovative programs and
projects that address our national energy goals. I believe that RSPA
program goals should seek synergy among the transportation modes and
other agencies within the Federal Government. I would focus on
interagency, inter-modal and departmental cooperation and coordination
whenever possible to lower costs, focus on avoiding duplication of
effort or responsibility and develop partnering opportunities. This
includes review of regulatory, contractual and procurement standards to
remove unnecessary requirements, procedures or regulations that
discourage innovation, restrict or limit efficiency and effectiveness
and negate incentives.
I believe that all professionals can improve their capability and
ability to learn, to manage, to develop professionally and personally.
I know that I will face new challenges in my role as a senior
government official. I am willing to learn and listen and to dedicate
that which I do know through my professional career and educational
background to do my best, each and every day. I will seek out detailed
knowledge of RSPA senior staff and would ask the Congress and key
transportation constituents and stakeholders to share their opinions
and views to support my education and my understanding of the other
critical issues facing RSPA and the Department of Transportation.
Honesty, integrity, commitment, ethical behavior and perseverance
are the core values and performance goals that would form my
responsibilities as RSPA Administrator. It would be my responsibility
to build bridges of communication, enhance relationships, and fulfill
my official responsibilities and duties in a responsible and honorable
manner. In addition, I hope to offer measurable results via improved
efficiency, effectiveness, and awareness, cost versus ROI and
responsiveness.
I believe that we work as individuals, but are most effective when
we can come together as a team. I believe in rewarding individual
performance, supporting individual professional growth and establishing
clear direction, goals and advertised rewards and consequences. In
short, I believe in open and honest communication with respect to the
individual, his work efforts and ethic. I believe in leading by
example, and would provide motivation and enthusiasm and hold myself
accountable for failures. If confirmed, I will work as closely and
regularly with Congress as is possible.
As the daughter of a Federal employee who is in her 46th year of
government service, I am proud to share her belief that public service
is both an honor and a responsibility. As an officer in the U.S. Naval
Reserve, I am proud to serve this country. As the President and CEO of
Electricore, a public/private partnership, I have had the
responsibility to protect Federal investment to ensure successful
project management and develop winning strategies to support national
goals of education, economic development, environment and energy
independence. As a community volunteer, I know what a difference a
single person can make when the heart is committed to a larger goal
than oneself. And as a proud Hoosier, I believe in the American dream
and the American spirit.
To serve as Administrator for RSPA would be the greatest honor and
responsibility that would call upon my professional and personal
knowledge and skills in a unique role of public service. I believe that
we are, as a nation, on the critical edge of decisionmaking that will
affect our country and our world for generations to come. It would be
my honor and privilege to dedicate my heart and mind to supporting
President Bush, Secretary Mineta and the American people in this mutual
effort and to serve all Americans who rely on safe and secure
transportation infrastructure and a safe and effective national
transportation system for goods and services.
Thank you again for your time and consideration.
______
A. Biographical Information
1. Name: Ellen Gayle Engleman.
2. Position to which nominated: Administrator--Research and Special
Programs Administration, Department of Transportation.
3. Date of nomination: June 7, 2001.
4. Address: Not released to the public.
5. Date and place of birth: September 21, 1959, Beech Grove,
Indiana.
6. Marital status: Single.
7. Names and ages of children: None.
8. Education: John F. Kennedy School of Government, Harvard
University, 1992-1993; Master of Public Administration, 1993; Indiana
University School of Law, 1984-1987, Juris Doctorate, 1987; Indiana
University, 1979-1983, Bachelor of Arts, 1983.
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.)
President & CEO, Electricore, Inc. President and Chief Executive
Officer for non-profit public/private research and development
consortium dedicated to advanced transportation and energy
technologies. Responsible for all operations, management and
administrative duties, business development activities, communication,
negotiation, program management and contractual administration, for
$160 million in total R&D contracts. Also responsible for governmental
and community affairs with university and private sector participants
and Federal agencies including Departments of Defense, Energy and
Transportation. Responsible for organizational development and
internal/extemal communication, public relations. Office located in
Indianapolis, Indiana, 1993 to present.
Director, Corporate and Government Affairs, Direct Relief
International. Responsible for corporate and government relations for
non-profit international medical relief organization. Responsible for
$25+ million in-kind contribution budget and development of community
governmental affairs outreach programs, designed corporate giving
relationships and standards, supervised in-kind contributions team and
served as liaison with almost 100 pharmaceutical and medical supply
manufacturers, distributors. Located in Santa Barbara, California,
1993-1994.
Public Affairs, Corporate Communications Manager, GTE North, Inc.
Responsible for corporate communications, public affairs and
governmental affairs for 10-State regional headquarters for GTE
Telecommunications company. Developed, produced and evaluated strategic
communications programs/plans for 20,0000 employees within a 10-State
area operations with special emphasis on telecommunications, quality
management and labor issues. Led inter- and intra-departmental teams
within 10-State operations for special projects including task force on
environmental efforts. Served as special assistant to the President.
Served as EEO coordinator. Included executive speech writing and
conference planning/design. Editor of employee newspaper responsible
for all articles on telecommunications issues. Office headquartered in
Westfield, Indiana, 1989-1992.
Public Affairs, Governmental Affairs Executive, GTE North, Inc.
Responsible for initial review and analysis of proposed legislation for
10 States. Developed strategic plans and corporate responsive
positions, coordinated lobbying efforts in support of GTE North
telecommunications and business objectives in legislative arena for 10
States. Developed network of State and Federal legislative contacts.
Developed political action committee membership recruitment and support
activities, constituency relations and special events for 10 States.
Developed legal guidelines for lobbying/PACs for 10 States. Office
headquartered in Westfield, Indiana, 1987-1989.
Legislative Analyst, Indiana Judicial Study Commission, State of
Indiana. Legislative Analyst for State of Indiana, responsible for
studies of State courts to determine necessity for new court creation.
Researched and investigated effectiveness and evaluation of proposed
court creation within State of Indiana. On-site investigation,
interviews, statistical analysis provided for testimony and
documentation issued to General Assembly. Office located in State
House, Indianapolis, Indiana 1985-1987.
Law Clerk, Marion County Prosecutor's Office, State of Indiana.
Law Clerk for Marion County Prosecutor Stephen Goldsmith, responsible
for legal research and other assignments. Special assignments included
Governor's Task Force to Reduce Drunk Driving: designed major media
event for and organized Hoosiers Against Drunk Driving 2 day conference
for over 800 high school students. Marion County Medical Society:
authored and coordinated production for booklet concerning mandatory
reporting requirements issued to 2,000 physicians in Marion County,
Indiana. Office located in City County Building, Indianapolis, Indiana,
1985.
Development Associate for Indianapolis Symphony Orchestra.
Responsible for fund-raising support to development director.
Researched and authored grant applications assisted with corporate and
private fundraising campaigns, organized and coordinated special
events. Managed major donor base. Office located in Indianapolis,
Indiana, 1984.
Sales Manager, L.S. Ayres and Company. Selected from field of 600
applications for one of ten positions. Completed 12 week intensive
training course, then assigned responsibility for $1,000,000 area with
sales forecasting and tracking for weekly, monthly projections, trend
analysis. Supervised 16 full-time, 7 part-time employees. Responsible
for multi-million sales area at Glenbrook store, located in
Indianapolis, Indiana, 1983.
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.)
Congressional Fellow, office of Senator Richard G. Lugar, U.S.
Senate, 1992.
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.)
President & CEO, Electricore Inc. Corporate Officer, 1999-present;
Board of Directors, Direct Relief International 1997-2001, (resigned
June 2001); Board of Directors, Vitamin Angel Alliance, 1999-2001,
(resigned June 2001).
12. Memberships: (List all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable and
other organizations.)
Current Memberships: Indiana State Bar Association, Member;
Indianapolis Bar Association; Columbia Club, Indianapolis, Indiana;
Indianapolis Athletic Club, Indianapolis, Indiana.
Past Memberships: Indianapolis Opera Guild; Santa Barbara Grand
Opera Association; Indianapolis Symphony North Group; Public Relations
Society of America; Indianapolis Council on World Affairs; Indianapolis
Committee on Foreign Relations; Junior League of Indianapolis; Heritage
Place, Senior Citizens Center; Indianapolis Shakespeare Festival;
Indianapolis Phoenix Theater; Kiwanis International.
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. General campaign support for: Kerns for Congress, 2000; Indiana
State Republican Committee, general support for 2000 election; Richard
G. Lugar for President, 1995; Lugar Senate Race, 1994; Dan Quayle, U.S.
Senate, 1980; Republicans for Indiana, member of executive board, 1992-
1992; 10 district Congressional Races, 1984, 1990, 1992; Marion County
Prosecutor Race, 1986; Sue Anne Gilroy, mayoral race, Indianapolis;
Goldsmith Governor's Race; Indianapolis County Council Republican
support, 1986, 1990; William Hudnut mayoral race for Indianapolis,
1986; Victory 1990 State legislative race support, 1991-92.
(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. 1996, Richard G. Lugar
Presidential Campaign, $1,000; 2000 Congressional Campaign for Brian
Kerns, $1,000.
14. Honors and awards: (List all scholarships, fellowships,
honorary degrees, honorary society memberships, military medals and any
other special recognition for outstanding service or achievements.)
``Top Forty under 40'' Indianapolis Business Journal, 1997; Richard G.
Lugar Excellence in Public Service Series, 1992; Stanley K. Lacy
Executive Leadership Series, Class XII, 1987; Columbia Club Chairman's
Recognition Award for Exemplary Service, 1985.
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?
I believe that I was chosen for nomination for the position of
Administrator for Research and Special Programs in the Department of
Transportation due to my almost 20 years experience and background in
private sector corporate management and public affairs (a combination
of law, public policy and public and governmental relations) with
specific emphasis on my experience at Electricore, Inc. As President
and CEO of Electricore, I have had the privilege of creating a
successful public/private partnership among universities, small and
large businesses and the Federal Government. Using a non-profit
organization as a basis to create a partnership focus among disparate
groups, allowed for a unique and ultimately successful ``way of doing
business'' to be developed and evolve. Our successes include:
Serving as program manager for Federal R&D partnerships of $160
million for over 70 projects. Key R&D program development with
Department of Energy (Office of Transportation Technologies OTT, Energy
Efficiency and Renewable Energy EERE), Department of Transportation
Research Special Programs Administration (RSPA), the Defense Advanced
Research Projects Agency (DARPA), Tank Automotive Command (TACOM--
Department of Army), U.S. Air Force and Naval Surface Warfare Center,
Crane Division.
Consortium recognized by a Hudson Institute assessment report as a
``model for defense acquisition reform.''
Designed, developed, and implemented the establishment of the
Battery Evaluation and Testing Center at the Naval Surface Warfare
Center, Crane Division. Created public/private partnership to allow
private industry access to testing facilities at NSWCC. This ``seed''
of privatization provides for independent revenue to support 1100
engineering jobs at NSWCC.
Established Hawaii as first Electric Vehicle-ready State. In less
than 12 months, designed, developed and implemented Federally-funded
project to install electric vehicle infrastructure throughout State on
three islands.
Successful consortium R&D projects include: design and delivery of
first all-electric vehicle to the National Parks System; design and
delivery of first advanced series hybrid transit bus to New York City;
design and development of first advanced fast charging infrastructure;
design and development of first heavy hybrid power train cycler; design
and development of national fuel cell center for NSWCC; advanced power
electronics and electric motor development.
Design, development and management of national Federal program
reviews, conferences, program creation and planning sessions between
industry and Federal agencies.
Representing industry leaders, decisionmakers and government to
develop Federal programs. Monitor technology development, serve as
liaison between industry and government to develop, create public/
private partnerships.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
My experience as President & CEO of Electricore is of primary focus
on my ability to serve as Administrator of Research and Special
Programs at the Department of Transportation. Also, I have a unique
professional background with almost 20 years experience and background
in private sector corporate management and public affairs (a
combination of law, public policy and public governmental relations).
Through this tripartite set of skills, I have focused on building
bridges of communication among disparate entities, creating new
partnerships and entrepreneurial programs, developed successful
governmental affairs, public relations and public outreach programs and
focused on creating cost-effective, efficient and successful public/
private projects and programs. This ability to communicate, coordinate,
supervise, and manage governmental and community affairs projects with
universities, small and large businesses and State and Federal
Government uniquely supports my nomination as Administrator of RSPA.
RSPA is also uniquely positioned as an agency with a broad base of
interests and responsibilities. As a professional ``communicator'' I
can serve the needs of RSPA in supporting safety and educational
outreach for pipeline safety, transportation of hazardous materials,
negotiation of Federal and State relationships, and support the overall
goals of the Department of Transportation. As an attorney, I offer
support and understanding of the regulations and contractual
negotiations necessary to support Research and Development, pipeline,
HAZMAT and safety reporting regulations and standards. As someone
experienced in program management of Federal research and development
projects, public outreach and recruitment of universities and private
companies to work together in partnerships, I offer support to the
Volpe National Transportation Systems Center, the university
partnerships, and the Transportation Safety Institute. Last, as someone
experienced in disaster relief and medical relief, I will support the
RSPA responsibilities of emergency management and disaster
coordination.
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.
Please refer to the Acting General Counsel opinion letter.
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.
Please refer to the Acting General Counsel opinion letter.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 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.
Electricore, Inc. has been and is currently under contract for R&D
projects with the Federal Government. As part of my ethics agreement, I
will recuse myself from direct involvement with any Electricore
activities for 1 year.
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.
Electricore, Inc. is one of the Advanced Vehicle Program consortia
members. I have acted in concert with my fellow consortia members to
support the Advanced Vehicle Program.
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.)
As part of my ethics agreement I will recuse myself from direct
involvement with any Electricore activities for 1 year.
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 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 compliant 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 businesses 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? No.
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, to the
best of my ability.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes, to the best of my ability.
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, to
the best of my ability.
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.
I will work closely with RSPA staff to ensure that proposed
regulations meet and do not exceed the statutory intent expressed in
legislation. I will do my best to keep Congress informed of the
timetable and substance of proposed legislation under the guidelines of
and in adherence to the Administrative Procedure Act. I will focus on
procedures and processes that will expedite the rulemaking process and
support improvements in accountability and efficiency.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
First and foremost, RSPA is inter-modal and supports and
coordinates with all other modes within DOT on matters such as
hazardous material regulation. Second RSPA is a network of programs
that share an underlying focus--that of safety. Third, RSPA has a
leadership role in research and development, public education,
emergency and disaster coordination and management.
RSPA is unique in terms of its multi-modal mandate and
organizational history and has a mission to support safety, inter-
modalism, cost effective regulation, compliance training and research.
Strategic goals include: Safety of people and property through the
reduction of transportation related deaths, injuries and property
damage via pipeline safety, hazardous materials, and emergency disaster
management; Protection of the environment through the reduction of
transportation related events and incidents that pose a threat to or
inflict harm upon the environment; Support of the nation's economic
health through research and development activities that foster
innovation through science and technology to support national
transportation goals including safety, mobility, economic growth and
trade, and national security; Support of education and training through
innovative partnerships with universities, support of the Volpe
National Transportation Systems Center and the Transportation Safety
Institute; Support of emergency management through coordination within
DOT and with FEMA and other agencies to secure and minimize the harmful
impact on people, property and environment by providing and ensuring
transportation readiness in time of crisis.
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
qualified you for the position for which you have been nominated?
As discussed above, my professional work experience has focused on
an interrelated mix of public policy, governmental and public
relations, law and communication. As an attorney I understand and
support the legislative and regulatory process. As a public relations
professional I understand and support the need for successful
communication and coordination among and between modes within the
Department of Transportation and Legislative, Executive and Judicial
branches of government as well as key stakeholders, constituents and
employees. As a current President and CEO, I bring a business
perspective with advanced managerial skills and a focus on achieving a
return on investment for Federal dollars and programs and creating and
managing efficient and effective programs.
2. Why do you wish to serve in the position for which you have been
nominated?
First and foremost, as the daughter of a Federal employee who is in
her 46th year of government service, I am proud to share her belief
that public service is both an honor and a responsibility. As an
officer in the U.S. Naval Reserve, I am proud to serve this country. As
the President and CEO of Electricore, a public/private partnership, I
have the responsibility to protect Federal investment to ensure
successful project management and develop winning strategies to support
national goals of education, economic development, environment and
energy independence. As a community volunteer, I know what a difference
a single person can make when the heart is committed to a larger goal
than oneself. And as a proud Hoosier, I believe in the American dream
and the American spirit.
To serve as Administrator for RSPA would be the greatest honor and
responsibility that would call upon my professional and personal
knowledge and skills in a unique role of public service. I believe that
we are, as a nation, on the critical edge of decisionmaking that will
affect our country and our world for generations to come. It would be
my honor and privilege to dedicate my heart and mind to supporting
President Bush, Secretary Mineta and the American people in this mutual
effort.
3. What goals have you established for your first 2 years in this
position, if confirmed?
I would focus on identifying, supporting and developing, when
necessary, programs and projects that support goals of increasing
safety for the American people. I would further address issues
affecting the environment; issues supporting economic development
through efforts to mitigate traffic congestion, and issues that
increase fuel efficiency and emissions reduction through our research
and development efforts. I would look to develop or create new public/
private partnerships that seek out the best in government, universities
and the private sector to improve our transportation systems.
I will work to ensure that a firm commitment to efficient and
effective use of Federal funds is universally understood and accepted
by all within RSPA. I wholeheartedly agree with President Bush in his
statement that it is the ``people's money'' and anyone associated with
the governance, issuance and responsibility of Federal funds should
share in this belief. In practical terms, this means that programs and
projects within RSPA should be held to a high standard, seeking to
develop and create efficiency and effectiveness in all tasks.
I believe that RSPA program goals should seek synergy among the
modes and other agencies within the Federal Government. I would focus
on interagency, inter-modal and departmental cooperation and
coordination whenever possible to lower costs, focus on avoiding
duplication of effort or responsibility and develop partnering
opportunities.
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 that all professionals can improve their capability and
ability to learn, to manage, to develop professionally and personally.
As such, I know that I will face new challenges in my role as a senior
government official. I am willing to learn and listen and to dedicate
that which I do know through my professional career and educational
background to do my best, each and every day.
As with any new position, I would need to seek out additional
information and detailed knowledge of key issues support from RSPA
senior staff. I would also ask administration officials, the Congress
and key transportation constituents and stakeholders to share their
opinions and views to support my education and my understanding of the
issues facing RSPA and the Department of Transportation.
5. Who are the stakeholders in the work of this agency?
The stakeholders for RSPA are the Congress, State and local
officials, private sector entities involved in the transportation of
hazardous materials and in pipeline transport, the general public who
rely on safe and secure transportation infrastructure and virtually all
other Americans who rely on a safe and effective national
transportation system for goods and services.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 5?
My role as Administrator for Research and Special Programs at the
Department of Transportation would be to listen, learn, communicate,
and support efforts for mutual benefit among the identified
stakeholders. It would be my responsibility to build bridges of
communication, enhance relationships, and fulfill my official
responsibilities and duties in a responsible and honorable manner. I
would be particularly conscious of my role in rulemaking and observe ex
parte communication requirements if confirmed as Administrator.
7. 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?
My first responsibility is to ensure that I am aware of and
knowledgeable about the RSPA budget, the roles and responsibilities of
its departments, its internal financial controls and processes.
Second, it would be my responsibility to monitor and review RSPA
departmental spending.
Third, I would encourage and motivate all employees to do ``more
with less.''
Fourth, I would lead by example and seek ways and means to more
efficiently administer any direct budget items and programs under the
Administrator's direct control.
(b) What experience do you have in managing a large organization?
I have managed programs affecting 20,000 employees at GTE,
coordinated and served as liaison with over 100 large companies when at
Direct Relief International and currently am responsible for a research
and development consortium consisting of over 50 universities and
businesses in 17 States for Electricore, Inc. I am responsible for
program management for a total of $160 million in Federal R&D contracts
involving over 75 projects.
8. 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 strongly support the goals and requirements of the Government
Performance and Results Act. This legislation requires the development
of measurable program targets and thus ensures that mission and vision
are developed. I believe that a strategic plan carefully crafted and
responsibly implemented is at the core of successful management.
(b) What steps should 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?
Congress has a right to anticipate and expect that a Department
will meet its stated goals and core performance objectives. If this
does not occur, then an analysis and evaluation of this failure should
be conducted. If exceptional or extraordinary circumstances occurred
which affected the outcome or limited goals, then this should be
documented and utilized as part of the lesson's learned analysis. It is
important to try to identify if limited or individual success was
achieved even if overall objectives were not met. That which is
``good'' or successful should be acknowledged and continue. That which
was ``negative'' or a failure should be equally acknowledged and
consequential actions may include eliminating, privatizing, downsizing
or consolidating programs.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
Honesty, integrity, commitment, ethical behavior and perseverance
are the core values and performance goals that would form my
responsibilities as RSPA Administrator. In addition, I hope to offer
measurable results via improved efficiency, effectiveness, and
awareness, cost versus ROI and responsiveness.
My role as Administrator for Research and Special Programs at the
Department of Transportation would be to listen, learn, communicate,
and partner in support of efforts for mutual benefit among the
identified stakeholders. It would be my responsibility to build bridges
of communication, enhance relationships, and fulfill my official
responsibilities and duties in a responsible and honorable manner.
9. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
I believe that we work as individuals, but are most effective when
we can come together as a team. I believe in rewarding individual
performance, supporting individual professional growth and establishing
clear direction, goals and advertised rewards and consequences. In
short, I believe in open and honest communication with respect to the
individual, his work efforts and ethic. I believe in leading by
example, and would provide motivation and enthusiasm and hold myself
accountable for failures. I am not aware of having an employee
complaint brought against me as a supervisor or fellow employee.
10. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
If confirmed, I will work as closely and regularly with Congress as
is possible. In my professional life I have worked successfully with
individual congressional offices on a bi-partisan basis and with
Federal agencies.
11. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
I would work closely with the Inspector General and anticipate that
any and all oversight that is brought to the department from the IG is
of value to the success of the department. I believe that the IG's
oversight and inspection is an important part of the checks and
balances we have within the American system of government and will meet
all required responsibilities of my office to support and cooperate
with the IG.
12. 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.
As an attorney, regulatory matters are of considerable importance
to me. As a citizen, I believe that regulations are supportive of my
health and safety. As Administrator of RSPA, regulatory issues are an
important part of the overall role and responsibility of the RSPA
mission, especially in pipeline safety and hazardous material areas. As
such, it would be a key priority to act with the utmost diligence to
ensure that duly-enacted laws are enforced, that regulations comply
with the letter and spirit of the law and that timely implementation
and responsiveness by RSPA is carried out in all areas.
13. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views.
I believe that legislative action which is directed to supporting
transportation safety, effectiveness, and efficiency would be first
priorities. Second, I believe that legislative actions supporting
critical research and development activities to support national energy
needs and development, economic development (and related congestion
mitigation) and energy security and national defense should be
addressed.
Although I have not studied all the major policy and management
issues involved with RSPA, I believe that the following areas are
appropriate for specific discussion: Reauthorization of TEA-21 to
include enhancement of R&D programs which support the national goals of
economic development, clean air, and energy independence; Support for
coordination of interagency programs and policies for increased
efficiency and effectiveness of Federal programs; Support for and
development of public private partnerships to develop solutions in
innovative programs and projects that address our national goals;
Review of regulatory, contractual and procurement standards to remove
unnecessary requirements, procedures or regulations that discourage
innovation, restrict or limit efficiency and effectiveness and negate
incentives.
14. 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. I believe that discretionary spending should be allocated in a
manner that is fixed, fair and include an open and acknowledged
standard or criteria. Funding should reflect the statutory intent of
authorized programs.
The Chairman. Thank you very much.
Mr. Van Tine.
STATEMENT OF KIRK K. VAN TINE, NOMINEE TO BE GENERAL COUNSEL,
DEPARTMENT OF TRANSPORTATION
Mr. Van Tine. Thank you, Mr. Chairman. It is a great honor
to appear before the Committee today as the President's nominee
to serve as the General Counsel of the Department of
Transportation. I deeply appreciate Secretary Mineta's
confidence in my ability to assist in this role and, if
confirmed, I look forward to working with you and the other
Members of the Committee and all of your staffs to address the
pressing transportation issues that affect all Americans today.
Secretary Mineta has emphasized that the transportation
challenges we face today can only be resolved through
consultation, cooperation, and coordination among all of the
governmental and private sector stakeholders, and that new
challenges require new ideas. I believe my background equips me
well to contribute to the development of a more innovative,
responsive Department of Transportation.
I have had experience working with large government
organizations. I served in the Navy as a submarine officer and
I have represented the FDIC, a government corporation, in
litigation matters for a number of years. I agree with the
Secretary's view that the Department's success depends
ultimately on having highly motivated and well-trained
employees.
While no private sector experience compares with the
challenges of government service, I believe my years as a
partner with management responsibilities in a large law firm
have given me the necessary preparation for the responsibility
of guiding the legal staff of the Department of Transportation
and coordinating the work of the chief counsels' offices in the
operating administrations.
The Department is very fortunate to have an outstanding,
highly experienced career legal staff, not only in the Office
of General Counsel, but in all the operating administrations as
well. I look forward to working with them and learning from
them.
The fundamental responsibility of the Office of General
Counsel is to provide dependable and timely legal advice to the
Secretary and other departmental employees. While I have a lot
to learn regarding the particular statutes under which the
Department operates, my background and experience as a lawyer
is in using the law to solve practical problems. From what I
have learned so far, it appears the major challenges facing the
Department are fundamentally practical problems, such as
ensuring safety, relieving congestion, and protecting
consumers. I know those issues and many others are of the
utmost importance to Congress and I commit that if I am
confirmed, I will apply all my legal skills and energy to help
find workable solutions to the challenges that face the
Department of Transportation.
I know that all the Members of the Committee and the
Committee staffs are extremely busy right now and I would like
to thank the Committee for scheduling today's hearing. I would
be pleased to respond to any questions you may have.
[The prepared statement and biological information of Mr.
Van Tine follow:]
Prepared Statement of Kirk K. Van Tine, Nominee to be General Counsel,
Department of Transportation
Thank you, Mr. Chairman and Members of the Committee:
It is a great honor to appear before the Committee today as the
President's nominee to serve as General Counsel of the Department of
Transportation. I deeply appreciate Secretary Mineta's confidence in my
ability to assist in this role, and if confirmed, I look forward to
working with all of you and your staffs in addressing the pressing
transportation issues that affect all Americans today.
Secretary Mineta has emphasized that the transportation challenges
we face today can only be resolved through consultation, cooperation
and coordination among all of the governmental and private sector
stakeholders, and that new challenges require new ideas. I believe my
background equips me well to contribute to the development of a more
innovative, responsive Department of Transportation.
I have had experience in working with large government
organizations--I served in the Navy as a submarine officer, and have
represented the FDIC--a governmental corporation--in litigation matters
for a number of years--and I agree with the Secretary's view that the
Department's success depends ultimately on having highly motivated and
well trained employees. While no private sector experience compares
with the challenges of government service, I believe my years as a
partner with management responsibilities in a large law firm have given
me the necessary preparation for the responsibility of leading the
legal staff in the Department of Transportation, and coordinating the
work of the Chief Counsels' Offices in the operating administrations.
The Department is very fortunate to have an outstanding, highly
experienced career legal staff, in the Office of General Counsel, and
in all the operating administrations. If confirmed, I look forward to
working with them and learning from them.
The fundamental responsibility of the Office of General Counsel is
to provide dependable and timely legal advice to the Secretary and
other Departmental employees. While I have a lot to learn regarding the
particular statutes under which the Department operates, my background
and experience as a lawyer is in using the law to solve practical
problems. And from what I have learned so far, it appears that the
major challenges facing the Department are, fundamentally, practical
problems, such as ensuring safety, relieving congestion and protecting
consumers. I know those issues, and many others, are of the utmost
importance to Congress, and I commit that--if I am confirmed--will
apply all my legal skills and energy to help find workable solutions to
the challenges that face the Department of Transportation.
I know that all the members of the Committee, and the Committee
staffs, are extremely busy right now, and I would like to thank the
Committee for scheduling today's hearing. I would be pleased to respond
to any questions you may have.
______
A. Biographical Information
1. Name: Kirk K. Van Tine.
2. Position to which nominated: General Counsel, U.S. Department of
Transportation.
3. Date of nomination: June 13, 2001.
4. Address: Not released to the public.
5. Date and place of birth: August 30, 1948; Syracuse, New York.
6. Marital status: Married to Barbara B. Van Tine, maiden name
Barbara A. Byers.
7. Names and ages of children: Mary Lindsay Van Tine, 20; Meredith
Leigh Van Tine, 17.
8. Education: 1966 to 1970, U.S. Naval Academy, Annapolis, MD;
B.S., June 1970; 1975 to 1978, University of Virginia School of Law,
Charlottesville, VA; J.D. 1978.
9. Employment record: 1970-1975, Officer, U.S. Navy, various
locations; 1975-1978 Student, U.Va. School of Law, Charlottesville, VA;
Summer 1976, Summer Associate, Law Offices of Northcutt Ely,
Washington, DC; Summer 1977, Summer Associate, Baker & Botts,
Washington, DC; Summer 1977, Summer Associate, Hunton & Williams,
Richmond, VA; 1978-Present, Attorney, Baker Botts, L.L.P., Washington,
DC, (Associate 1978-1986; Partner 1987-Present).
10. Government experience: U.S. Navy 1966-1970.
11. Business relationships: Partner, Baker Botts, L.L.P.; Partner,
Boterlove (Baker Botts real estate partnership in Houston office
building where firm offices are located).
12. Memberships: Member, D.C. Bar Association; Co-Chair, D.C. Bar
Litigation Section; Co-Chair, D.C. Bar Law Practice Management Section;
Chair, D.C. Bar Election Board; Member, D.C. Bar Special Committee on
Implementation of Civility Guidelines; Member, City Club of Washington.
13. Political affiliations and activities: (a) List all offices
with a political party which you have held or any public office for.
None.
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years. 11/17/00 to 12/13/00, Provided legal services in support of
George W. Bush in connection with 2000 Presidential Election litigation
in Tallahassee, Florida.
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. 1999, The Bluebonnet Fund
(Baker Botts Political Action Committee, $522; 2000, The Bluebonnet
Fund (Baker Botts Political Action Committee, $522; 2001, The
Bluebonnet Fund (Baker Botts Political Action Committee, $540; 1999,
George W. Bush, Republican Presidential Primary Campaign, $1000.
14. Honors and awards: Competitive Appointment to U.S. Naval
Academy; National Defense Service Medal, U.S. Navy; Virginia Law
Review; Order of the Coif (top 10 percent of law school class); D.C.
Bar Best Section Award, Litigation Section Co-Chair, 1999-2000.
15. Published writings: ``Financial Services Modernization: A Cure
for Problem Banks?,'' 69 Wash. U.L.Q. 809 (1991).
``Enforcement Issues Under the Natural Gas Act of 1938 and the
Natural Gas Act of 1978,'' 16 Hous. L. Rev. 1025 (1979).
16. Speeches: None.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President?
I believe I was chosen as a result of my background and experience
as a lawyer practicing in Washington, DC since 1978. While I have very
little experience with the substantive issues presently before the
Department of Transportation, I have substantial experience in the
principles of administrative law, which establish the legal framework
within which the Department acts. The majority of my practice has
consisted of litigation involving the Federal Government, and in the
course of that practice, I have become familiar with the procedural
requirements governing executive branch actions, and with the
Congressional oversight process. Also, for a number of years, I have
served as outside counsel to the FDIC in a variety of litigation
matters, and through that representation, I have gained an
understanding of the unique policy and legal constraints under which
governmental entities operate.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
In a general sense, my experience and training to date have been
directed toward solving practical problems through the legal process.
The skills that I have developed in listening, analyzing and creative
problem solving seem to be useful skills for the position to which I
have been nominated. I have learned to handle substantial matters,
under considerable pressure, to understand and respect opposing points
of view, and to set and keep deadlines. As a result of my litigation
experience, I am also accustomed to mastering new substantive topics
quickly, and to isolating the essential points and achieving results.
More specifically, since 1986, I have represented the FSLIC, the RTC,
and the FDIC in various types of litigation matters, and through that
experience I have become familiar with many of the generic legal issues
facing governmental entities, such as FOIA, Privacy Act and Sunshine
Act matters, Federal employee EEO matters, government contracting
disputes, interpretation of statutes and regulations, enforcement
issues, Federal Tort Claims Act matters, and interagency issues.
Through my representation of the FDIC, I have also learned to
understand and respect the special ethical and policy considerations
that government attorneys must take into account in everything they do.
In the course of my practice, I have also assumed various management
responsibilities, and currently serve as the head of the Litigation
Practice Group, consisting of 40 lawyers and 7 legal assistants, in my
firm's Washington, DC office.
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.
I have no such arrangements or agreements with any entity except
those described in my answer to Part G, item 7, below.
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.
Please refer to Acting General Counsel Opinion Letter.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 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.
Please refer to Acting General Counsel Opinion Letter. In addition,
during 1995-1996, I served as lead counsel in one case against the
Department of Transportation, Mesa Air Group, Inc. v. Department of
Transportation, 87 F.3d 498 (D.C. Cir. 1996). That case concluded in
1996, and I have had no relationship with either Mesa Air Group or the
Department of Transportation since that date, until my nomination to be
the General Counsel.
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.)
Please refer to the Acting General Counsel Opinion Letter.
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 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 compliant 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. No.
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, to the
best of my ability.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes, to the best of my ability.
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, to
the best of my ability.
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.
If confirmed, I expect that one of my primary responsibilities as
General Counsel would be to supervise and if necessary improve the
rulemaking process within the Department. I would expect that I would
be closely involved in all major rulemaking efforts, with the goal of
ensuring that all rules issued by the Department comply with the letter
and the spirit of the laws passed by Congress. As part of that process,
I would expect to receive and consider communications from Congress, to
the extent permitted by law.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
The Department's No. 1 mission with respect to every mode is to
promote safety. Other missions include, in general, the need to
maintain and improve the transportation infrastructure, increasing
transportation efficiency and capacity, thereby relieving
transportation congestion, the regulation of transportation modes as
necessary to maintain safety and protect the public interest, and the
appropriate balancing between development of transportation systems and
the protection of the environment. Additionally, the Coast Guard
patrols our borders and interdicts illegal drug shipments and conducts
migrant interdiction activities. The Maritime Administration promotes a
healthy merchant marine in support of the defense posture of the United
States.
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
qualified you for the position for which you have been nominated?
See response to Part A, items 17 (a) and (b) above.
2. Why do you wish to serve in the position for which you have been
nominated?
First and foremost, I have a genuine desire to be of service to the
United States. The actions of the Department of Transportation have a
direct impact on the daily lives of the American people, and I would be
honored to play a role in helping to shape those actions. In addition,
I enjoy new challenges, and I believe that the position of General
Counsel would be both intellectually challenging and professionally
stimulating.
3. What goals have you established for your first 2 years in this
position, if confirmed?
If confirmed, my immediate short term goal will be to learn the
basic statutory and regulatory requirements applicable to the
operations of each of the operating administrations, and to master the
legal requirements that relate to the most important current issues in
each mode, to enable me to provide meaningful and helpful legal advice
to the Secretary and other officials within the Department. Longer
term, I expect to devote substantial time and attention to the
Department's process for developing and promulgating regulations
implementing the intent of Congress, with the goal of reducing the
delays in that process to the maximum extent possible, consistent with
all requirements of existing law. I also hope to assist in the process
of reducing congestion in all of the transportation modes, with an
immediate focus on air travel congestion, while maintaining the highest
standards of safety. Associated with the problem of air travel
congestion is the problem of consumer complaints, and I would hope to
investigate and work out measures that would alleviate the root causes
of the increasing numbers of complaints received by the Department.
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?
The most significant area in which I currently feel deficient is in
my knowledge of the substantive law governing the operations of the
Department and its operating administrations. While I feel that I have
sufficient knowledge of the general procedural requirements applicable
to governmental action, I presently have little knowledge of the
detailed statutes that set forth the intent of Congress with respect to
the specific programs administered by the Department, and the
regulations the Department has issued to implement those statutes. Over
the past month, I have begun to address that deficiency by studying,
asking questions and listening, and if confirmed, I intend to devote a
portion of each day to the process of learning the applicable law.
5. Who are the stakeholders in the work of this agency?
Based on my current understanding of the work of the Department,
the primary stakeholders are the American people, virtually all of whom
have significant personal and economic interests in the safety and
efficiency of our transportation systems. Other stakeholders, all of
whom have major roles in improving the overall quality of our
transportation systems include Congress, the States, local governments,
commercial businesses that provide transportation goods and services,
and those who are involved in construction and operation of the various
parts of our transportation network.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 5?
If confirmed, my role as General Counsel would be to ensure that
officials of the Department observe all applicable legal requirements
in considering the views of the stakeholders identified above, and give
those views appropriate weight in making decisions affecting the
operations of the Department. In balancing the views of various
stakeholders, the Department should be guided by the intent of Congress
as expressed in the statutes applicable to the Department's operations.
7. 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?
If confirmed, I would be responsible as General Counsel for
ensuring the Department's compliance with all Acts of Congress,
including the Chief Financial Officers Act. While my authority and
ability to direct specific actions in areas of management and
accounting would be limited, I would be responsible for advising
Departmental officials of the requirements of the Act and for assisting
in the development of any necessary measures to ensure compliance. I
would do so to the best of my ability.
(b) What experience do you have in managing a large organization?
My management training and experience began, in a very small way,
on my first day at the U.S. Naval Academy, and my primary roles during
my subsequent service as an officer in the Navy were to lead and
manage. While I did not manage large numbers of people, I learned to
lead by example, to instill a sense of common purpose and pride in the
organization, to earn the respect of my subordinates by learning the
details of their work, and to value the contributions of all.
I have practiced law since 1978 at the law firm of Baker Botts,
L.L.P., where I am currently the head of the Litigation Practice Group
in the Washington, DC office. The Litigation Practice Group consists of
approximately 40 lawyers and seven legal assistants. Over the course of
the past 20 years, I have had various other management responsibilities
within the firm, serving as hiring partner for the Washington office
for 9 years, serving on the firm-wide strategic planning committee,
serving on the firm-wide compensation committee, and serving on various
ad hoc budget and marketing committees. I have a strong interest in law
firm management, and I have served on the Steering Committee of the Law
Practice Management Section of the D.C. Bar for several years, serving
as Co-Chair of the Section during 2000-01. While no law firm experience
can compare to the management challenges presented by government
service, I believe that I am adequately prepared to assume the
management responsibilities associated with the position of General
Counsel of the Department.
8. 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.
Performance goals and required reports are a valuable tool for both
Congress and the Department. For Congress, the requirement to establish
goals and report results provides a concrete way to assess an agency's
effectiveness in carrying out its missions. The required reports also
provide a way for Congress to identify specific problem areas at an
early stage. For the Department, the establishment of performance goals
is beneficial because the process of developing those goals requires
the Department to consider, discuss and decide among competing
priorities and possible policy choices and formulate an integrated and
coherent plan for achieving its objectives. In addition, the
requirement to submit reports is useful as a catalyst for establishing
internal deadlines in the organization and ensuring that necessary
actions move forward as expeditiously as possible. The preparation of
required reports also serves as a focus for a periodic internal
evaluation of the Department's performance, and as an additional
incentive to maintain proper management and supervision over the
Department's activities.
(b) What steps should 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?
Congress has an important oversight role in reviewing the
performance of executive branch agencies. Where an agency has failed to
achieve its goals, an important first question should be whether the
agency has sufficient resources to achieve those goals. If so, then the
focus should be on whether the agency has been granted, and has
exercised, the necessary legal authority to carry out its missions and
achieve its goals. If so, then the agency's operations should be
reviewed to determine the fundamental causes of the agency's inability
to perform satisfactorily. While it is beneficial to review
periodically the need for and nature of government programs,
elimination, downsizing, privatization or consolidation would seem to
be solutions of last resort, to be undertaken only where there is
sufficient consensus that the original purposes of the agency are no
longer necessary in the public interest, or that the agency no longer
has the ability to perform its assigned mission.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
The performance of the General Counsel should be evaluated in at
least three areas. First, as Chief Legal Officer of the Department, the
General Counsel should give sound, clear and timely legal advice to the
Secretary and other Departmental employees, helping the Department to
achieve its operational and policy goals in implementing the statutes
adopted by Congress. Second, as a manager within the Office of the
Secretary, the General Counsel has a responsibility to monitor the
professional training, advancement and recruitment of the legal staff.
Third, as the officer within the Department who has the final
responsibility for legal interpretations, the General Counsel should
ensure that, to the best of his or her ability, the actions of the
Department in interpreting its statutory authority are consistent with
both the letter and the spirit of the intent of Congress.
9. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
I believe that supervisor/employee relationships should be
professional, but as informal as possible while maintaining a
businesslike atmosphere. I have always tried to treat others as I would
like to be treated, with respect and consideration. I follow a
supervisory model that stresses teamwork, open and frequent
communications, and inclusion and consideration of all views and ideas
in the decisionmaking process. I give credit for successes to my
subordinates, and assume responsibility for problems myself. No
employee complaints have ever been brought against me.
10. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
I have no past experience in working with Congress. If confirmed, I
would hope to develop a cooperative and professional working
relationship, to ensure that the concerns of the committees and of
individual Members are promptly and effectively addressed.
11. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
I believe that the proper relationship between the General Counsel
of the Department and the Inspector General is one of independence and
mutual respect. While the General Counsel is the final authority on
legal issues within the Department, the Inspector General is free to
disagree, and is expressly authorized to investigate and make
recommendations. As a matter of course, I believe the General Counsel
should cooperate fully with the Inspector General at all times, and
should make every effort to implement recommendations of the Inspector
General regarding matters within the scope of the General Counsel's
authority. If confirmed, I would hope to establish a close working
relationship with the Inspector General and work cooperatively with the
common goal of improving the operations of the Department.
12. 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.
As the Chief Legal Officer of the Department, one of the General
Counsel's primary responsibilities is to ensure that all of the
Department's actions are authorized by law, and consistent with both
the letter and the spirit of the statutes passed by Congress. If
confirmed, I will work closely with Members of the Committee and other
stakeholders to ensure that their views as to the intent of Congress
are given appropriate weight.
13. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views.
With respect to the Department of Transportation, I believe that
safety issues should always be the highest priority. Presently, issues
relating to congestion, particularly with respect to automobile and air
travel, also are extremely significant, and modernization of the
transportation infrastructure is a long term goal. Finally, to achieve
those priorities, Congress should ensure that sufficient funding levels
are appropriated and authorized.
14. 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, to the extent such matters are within my authority as General
Counsel. If confirmed, my primary role in this area will be to advise
the senior staff of the Department. I would begin to do so immediately,
to the extent I am involved in decisionmaking regarding discretionary
spending.
The Chairman. Very good.
Mr. Rutter.
STATEMENT OF JON ALLAN RUTTER, NOMINEE TO BE
ADMINISTRATOR OF THE FEDERAL RAILROAD
ADMINISTRATION
Mr. Rutter. Thank you, Mr. Chairman. I am incredibly
honored to have the confidence of the President in being
nominated to this important position. I worked for him as his
Transportation Policy Director for 6 years when he was Governor
and it was the most rewarding period of my career. He is a good
boss and a great man.
I am also grateful to be part of the exceptionally capable
team being assembled at the Department by Secretary Mineta. My
professional career has always been about transportation and I
was eager to accept a position that would allow me to work
alongside someone who has such a passion for better
transportation. I am looking forward to building on my
experiences in Texas with freight and passenger rail issues.
I am honored to be associated with the hard-working
professionals at the Federal Railroad Administration. I have
met many of them in the past few weeks and am impressed with
their devotion to their work. Should I be given the chance, I
look forward to working with such talented individuals and to
meeting many more of them throughout the country.
I am happy that my wife, Melanie, is here with me this
morning. When I talk about my better half, I refer to the
second half of my life that I have spent with her, for she has
made me a better person. She is a gifted school teacher and a
blessing to our daughters Sarah and Elizabeth.
I am proud to have been chosen by the President and the
Secretary, but I am even more proud to be a husband and father
to my family, for they have been willing to join me on this new
adventure in their lives.
Well, by the time most speakers say ``I will be brief'' it
is usually too late, and so I will simply mention three things
that will be important to me should I be given the honor of
being confirmed.
First, I want to continue the work of rail labor, rail
management, and the FRA in making railroads safer for those who
work on them and for the communities through which railroads
travel. While progress has been made, there remains work to be
done. Safety is going to be my most important priority if
confirmed in this position.
Second, I want to be an advocate for the value of freight
railroads in the nation's transportation system. As highway
capacity remains constrained, I hope to work with railroads to
see that they take advantage of market opportunities to grow
their business, which will benefit our nation's transportation
network and our economy.
Third, I look forward to being given a chance to work with
Secretary Mineta, the Bush Administration, and Congress in
developing a national passenger rail policy as this Committee's
1997 Amtrak reform legislation reaches its conclusion.
I have been a public employee all my life and I know,
though this job is going to be important, but it is not as
important as yours. I respect the fact that you are elected and
I am not. I hope to have the confidence of this Committee and
also hope this morning can be the beginning of a productive
working relationship with Committee Members and staff.
I have enjoyed visiting with many of the Committee Members
and will, if confirmed, be responsive to each of you whenever
you need me.
Thank you.
[The prepared statement and biological information of Mr.
Rutter follow:]
Prepared Statement of Jon Allan Rutter, Nominee to be Administrator of
the Federal Railroad Administration
Thank you Senator Hutchison, for the kind introduction and thank
you Chairman Hollings for giving me the opportunity to visit with the
Committee this morning.
I am incredibly honored to have the confidence of the President of
the United States in being nominated to this important position. I
worked for our President as his transportation policy director for 6
years when he was Governor of Texas, and it was the most rewarding
period of my career. He's a great boss and a great man.
I am also grateful to be part of the exceptionally capable team
being assembled at the Department of Transportation by Secretary Norm
Mineta. My professional career has always been about transportation, so
I was eager to accept a position that would allow me to work alongside
someone who has such a passion for better transportation. I am looking
forward to building on my experiences in Texas with freight and
passenger rail issues.
I am honored to be associated with the hard-working professionals
at the Federal Railroad Administration. I have met many of them in the
past few weeks. I am impressed with their devotion to their important
work. Should I be given the chance, I look forward to working with such
talented individuals and to meeting many more of them throughout the
country.
I am happy that my wife Melanie is here with me this morning. When
I talk about my ``better half,'' I refer to the second half of my life
that I have spent with this wonderful woman, for she has made me a
better person. She is a gifted elementary school teacher and a blessing
to our beautiful daughters, Sarah and Elizabeth. I am proud to have
been chosen by President Bush and Secretary Mineta, but I am even more
proud to be a husband and a father for my family, for they have been
willing to join me on this new adventure in all of our lives.
By the time most speakers say, ``I'll be brief,'' it's usually too
late, so I will simply mention three things that will be most important
to me should I be given the honor of being confirmed as Federal
Railroad Administrator.
1. I want to continue the good work of rail labor, rail management,
and the FRA in making railroads safer for those who work on them and
for the communities through which the railroads travel. While progress
has been made, there remains important work to be done. Safety will be
my most important priority if confirmed to this position.
2. I want to be an advocate for the value of freight railroads in
the nation's transportation system. As highway capacity remains
constrained, I hope to work with railroads to see that they take
advantage of market opportunities to grow their business, which will
benefit our nation's transportation network and our economy.
3. I look forward to being given a chance to work with Secretary
Mineta's team, the Bush Administration and the Congress in developing a
national passenger rail policy as this committee's 1997 Amtrak
legislation reaches its conclusion this coming year.
I've been a public employee all my life, and while this job I hope
to have is important, it is not as important as yours. Please know that
I respect the fact that you are elected and I am not.
I hope to have the confidence of this committee and also hope this
morning can be the beginning of a productive working relationship for
us all. I have enjoyed visiting with many of you on this committee and
will, if confirmed, be responsive to each of you whenever you need me
in the future. Thank you.
______
A. Biographical Information
1. Name: Jon Allan Rutter.
2. Position to which nominated: Federal Railroad Administrator.
3. Date of nomination: May 14, 2001.
4. Address: Not released to the public.
5. Date and place of birth: 11/19/58, Austin, Travis County, Texas.
6. Marital status: Married. Melanie Kaye Moore, May 28, 1983.
7. Names and ages of children: Sarah Michele Rutter, 15; Elizabeth
Francis Rutter, 13.
8. Education: (List secondary and higher education institutions,
dates attended, degree received and date degree granted.)
Lyndon B. Johnson School of Public Affairs, University of Texas at
Austin, attended August 1981 to May 1983, graduated with a Master of
Public Affairs, December, 1985; University of Texas at Austin, attended
August 1997 to May 1981, awarded Bachelor of Arts, May 1981; Westlake
High School, Austin, Texas, attended August 1972 to May 1977, graduated
May 1977.
9. Employment record: Transportation Policy Director, Governor's
Policy Office, Austin, Texas, March 1995 to April 2001; Deputy
Executive Director, Texas High-Speed Rail Authority, Austin, Texas,
March 1990 to February 1995; Senior Budget Analyst, Governor's Office
of Budget and Planning, Austin, Texas, November 1985 to March 1990;
Assistant Committee Clerk, Texas House Committee on Transportation,
Austin, Texas, October 1984 to November 1985; Warehouse/Sales, Import
Building Products (tile retailer) Austin, Texas, January 1984 to
October 1984; Delivery Driver/Sales, Sheridan, Inc. (delivery company)
Austin, Texas, September 1983 to January 1984.
10. Government experience: Legislative Intern, Texas House
Committee on Transportation, Spring, 1983; Texas State Senate
Messenger, Texas State Senate, Spring 1981; Clerk, Texas Health
Department, Bureau of Vital Statistics, Summers, 1978-1980.
11. Business relationships: None.
12. Memberships: I belong to a Southern Baptist Church, Hyde Park
Baptist Church, Austin, Texas, and have been a member since May 1998. I
currently teach an Eighth Grade Boys Sunday School Class, and have
worked in the Eighth Grade department for 2 years. Prior to moving my
membership to Hyde Park, I belonged to First Baptist Church, Austin. At
First Baptist, I was a deacon, Chairman of the Board of Deacons in
1994. I had also served as a Sunday School Teacher (College Department,
Adult Couples VI Department) and member of various committees
(Committees: Budget Preparation (Vice-Chair), Health and Safety Policy
Task Force (Chairman), Personnel, Worship). No other memberships.
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. None.
(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. None.
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.)
None.
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.
------------------------------------------------------------------------
Group Requesting
Date of Speech Location Speech
------------------------------------------------------------------------
February 2001................... Austin, TX........ Southwest Movers
Association
Quarterly
meeting.
October 2000.................... Laredo, TX........ Camino Colombia
Toll Road
Corporation
groundbreaking.
September 1998.................. Kerrville, TX..... Texas Motor
Transportation
Association
Safety Management
Council Fall
meeting.
September 1998.................. San Antonio, TX... San Antonio
Transportation
Association
monthly meeting.
July 1998....................... Austin, TX........ Texas Good Roads/
Transportation
Association
Annual Meeting.
April 1998...................... Houston, TX....... Texas Public
Transportation
Conference.
April 1997...................... Austin, TX........ Welfare to Work
Summit
------------------------------------------------------------------------
17. Selection: (a) Do you know why you were chosen for this
nomination by the President?
I was chosen for this position: (1) Because the President was aware
of my professional abilities when I worked for him as Governor of
Texas; (2) Because of my interest in rail transportation; and (3)
Because of my ability to work effectively with elected officials,
administrative officials and constituents.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
Most of my professional career has been spent studying and
implementing transportation policy. My experiences with passenger and
freight rail issues will help me address challenges facing the Federal
Railroad Administration. My other experiences with other modes of
transportation will give me a balanced perspective in considering the
impacts of rail policies on the transportation system as a whole.
B. Future Employment Relationships
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, to the
best of my ability.
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.
Please refer to the Assistant General Counsel Opinion letter.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 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.
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, other than
the exercise of my duties as Policy Advisor to the Governor, in which I
have been expected to offer information for State legislators and
Members of Congress regarding the Governor's agenda.
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.)
Please refer to the Asistant General Counsel Opinion letter.
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 Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
D. Legal Matters
Have you ever been disciplined or cited for a breach of ethics for
unprofessional conduct by, or been the subject of a compliant 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.
In 1991-2, I was a member of the staff of the Texas High-Speed Rail
Authority, and in that capacity, testified in a State district court
proceeding brought by Southwest Airlines to rescind the award of a
franchise to finance, construct, maintain and operate a high-speed
passenger rail system in Texas.
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, to the best of my ability. In the event such requests are
difficult to meet (for any number of reasons), I pledge to work with
the Committee staff to discuss means by which to respond appropriately
to the Committee's requests.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures?
Yes, I will ensure that the Federal Railroad Administration
complies with its legal obligations to protect those who testify from
any subsequent discrimination or treatment related to that testimony.
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, I will work with Committee staff to arrange for witnesses from
the FRA who can provide expertise for the Committee.
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.
I will do my best to ensure that FRA staff carefully considers the
full legislative record of laws that require promulgation of rules by
the agency. While the Administrative Procedures Act may limit the
amount of direct communication about the rules, I will do my best to
provide Congress with information on the timing and substance of
rulemaking proceedings begun in response to legislation. I will also
work with Secretary of Transportation to apply best practices in
administrative procedures in other Federal agencies in quickening the
completion of FRA rules.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
The agency's current mission statement is: The Federal Railroad
Administration promotes safe, environmentally sound, successful
railroad transportation to meet current and future needs of all
customers. We encourage policies and investment in infrastructure and
technology to enable rail to realize its full potential.
The agency has the following major programs: Promulgation of rules
and regulations to promote safe operations of the nation's railroads;
Inspection and enforcement of those regulations; Providing financial
and technical assistance for high-speed passenger rail systems;
Providing financial assistance to Amtrak; Administrative and managerial
support of these programs.
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, to the best of my ability.
F. General Qualifications and Views
1. How have your previous professional experience and education
qualified you for the position for which you have been nominated?
(a) Working in the Governor's office has prepared me to work with
all governmental levels. This helps me realize that solving problems
usually requires cooperation among government agencies. (b) My
education helps me understand public sector bureaucracy--its culture,
its language, its mores. That will help me get things done. (c) Working
in Texas has exposed me to a wide scope of transportation--tens of
thousands of miles of highways, rail lines and pipelines, deep water
ports, international ports of entry. This will help me understand the
role rail plays in an efficient multimodal transportation system. (d)
My experience involves an appreciation for safety. I have worked
closely with legislators, agency officials, and private sector groups
to carefully consider State policies to improve safety of the surface
transportation network. My experience in State worker's compensation
administration also helps me understand the personal consequences of
safety practices. This will make transportation safety a paramount
personal concern.
2. Why do you wish to serve in the position for which you have been
nominated?
(a) I want to serve the President. After working for him for 6
years, I enjoyed working for him and look forward to doing so again. I
consider this nomination the most important thing I've ever been asked
to do. (b) I want to work with the team the President has assembled at
USDOT. Given the reputation of the Secretary and Deputy Secretary, I
know that my professional stature would be enhanced just by being
associated with them. Having met with them, I know that I will be a
better person for getting the chance to work alongside them. (c) I want
to work with the freight rail industry. Freight railroads, along with
pipelines, are the segment of the nation's transportation system that
we fully entrust to the private sector. I have enjoyed working with the
people involved in this business (the ones who run the companies and
the ones who work for them) and look forward to making a positive
difference for the movement of goods through maximizing the
effectiveness of our rail system. (d) I look forward to contributing to
the significant change in national passenger rail policy that will come
in the next 2 years. Amtrak's looming financial deadlines and the
increasing interest by States in pursuing incremental higher speed rail
operations will lead to fundamental choices about the role of the
Federal Government in passenger rail systems.
3. What goals have you established for your first 2 years in this
position, if confirmed?
(a) Maintain the momentum of the previous 5 years in keeping rail
accidents and fatalities to a minimum. (b) Improve the efficiency of
the freight rail network. (c) Reauthorize the rail safety program. (d)
Participate in the development of a national passenger rail policy. (e)
Accelerate the FRA's rulemaking cycle.
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 will work with experienced managers within the agency and within
the department to accelerate my understanding of the particular
financial and administrative practices of the Federal Government.
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.
Governments serve best when they enforce democratically enacted
laws to provide justice in personal and contractual relationships, to
promote safety of persons and communities, and to offer persons
educational opportunities to choose their own destinies. We can choose
to exercise compassion for those in need through governments and other
social organizations.
Governments should exercise healthy humility and creativity.
Governments should realize that problems are usually more complicated
than they seem, and that some solutions may cause unintended negative
consequences. Governments should freely innovate and experiment in
small steps, much like planting perennials rather than redwoods, so
that good results can be replicated and mistakes easily erased.
I close with some observations about some of the characteristics of
government programs that may no longer be necessary: No one can say
when the program was started, who was responsible for starting it, what
the program's goals were when started, or whether the program has ever
accomplished or is close to accomplishing those goals; A program may
have been authorized but never funded; The beneficiaries of the program
have independent resources to accomplish the program's objectives by
their own actions; A program may manipulate individual behavior in a
manner that subverts other public policy goals.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives.
The agency's most important mission is to protect the safety of the
nation's rail system. This means to enhance the safety of goods
transport for communities and environments through which railroads
pass, the safety of rail passengers, the safety of those who work on
and around railroads, and the safety of those who come into contact
with the rail system.
The agency's major safety mission is carried out by the hundreds of
Federal employees who inspect and support the inspection of the rail
system. The agency works with stakeholders to graft common-sense
regulations to advance the interests of public safety. The agency
explores technologies and strategies to reduce crashes at highway-rail
grade crossings. The agency also works with states interested in
implementing improvements to their passenger rail systems, leading to
higher speed rail passenger services. The agency also provides
financial assistance to Amtrak and to freight railroads.
Objectives: The FRA seeks to reduce the frequency and severity of
accidents on the rail system; The agency encourages increased
efficiency of the rail system for those who use into transport people
and goods; The administration will work to make further progress on
reducing crashes at grade crossings and reducing tresspassing on rail
properties; The agency will provide technical and policy assistance to
persons and governments wishing to implement passenger rail
improvements.
7. In reference to question No. 6, what forces are likely to result
in changes to the mission of this agency over the coming 5 years?
Events in the short term are likely to affect the FRA's mission by
offering opportunities for Congress and the Administration to alter its
mission: Reauthorization of the Federal rail safety program; Amtrak's
impending financial self-sufficiency deadlines; State pressure for
higher speed passenger rail services; Surface transportation program
reauthorization.
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?
In a competitive job market, it will be difficult to attract and
retain highly competent employees to accomplish the agency's mission.
Agencies with higher turnover suffer productivity and financial losses.
Rail safety results will depend on financial investments by rail
companies and on infrastructure investments by State and local
governments (grade crossing protection).
The FRA must plan for the consequences of an aging workforce at the
agency. Losing competencies and history may affect the agency's ability
to accomplish its mission with available staffing allocations.
The agency needs to marshal sufficient intellectual firepower to
address serious issues on improving freight railroad financial strength
and in considering alternatives in passenger rail policy. Either within
the agency or under contract to the agency, the FRA needs resources to
conduct research to support the agency's mission.
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?
By most measures, the FRA has been doing a good job of reducing
frequency and severity of rail accidents. While I reserve the ability
to correct problems where I might see them, I am more concerned about
improving agency operations and meeting organizational objectives.
10. Who are the stakeholders in the work of this agency?
Please refer to No. 11 below.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10?
------------------------------------------------------------------------
FRA Administrator's
Stakeholders in the work of FRA relationship with
stakeholders
------------------------------------------------------------------------
The administration and Members of Congress Advise when requested or
when I think it is
relevant; and follow
instructions, particularly
those enacted in law.
FRA's management and employees............ Lead, coach, advocate and
listen.
Management and stockholders of rail Partner in bringing about a
companies. healthy, vibrant rail
industry; lead in
accomplishing safety
objectives.
Employees of rail companies and the Listen to concerns and
organizations that represent them. foster cooperative efforts
to work for jobs and
workplace safety.
State and local governments who invest in Partner and assist, rather
rail passenger services and in grade than dictate and control.
crossing protection.
Citizens throughout the country who live Listen, educate and respond.
near or travel across rail lines.
Consumers and businesses whose goods are Consider the implications of
delivered in whole or in part by rail. policies on users of the
rail system.
------------------------------------------------------------------------
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 work closely with the USDOT's Chief Financial Officer to
ensure that FRA is complying with agency financial plans and with
statutory requirements. As Administrator, I would be responsible for
ensuring that taxpayers can clearly see that their tax dollars are
being used carefully, prudently and efficiently in carrying out the
missions of the agency.
(b) What experience do you have in managing a large organization?
In advising four Governors on transportation issues, I worked
closely with the executive management and appointed leadership of the
Texas Department of Transportation. Many times, it was my job to get
the Department to do something the Governor wanted done. In this
capacity, I exercised management discretion to: Discern which level of
management was appropriate to engage; Delegate tasks for someone else
to accomplish (and follow up on that delegation); Decide when an issue
required agency-wide action or policies and when an issue could be
resolved independently; and Discover relevant information on
identification of a problem and exercise judgment in deciding whether
the solution required action within or outside the agency.
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 think the goal-setting and reporting process offers benefits both
to the Congress and to the FRA. For Congress, this offers
accountability on the issues that matter most. For the agency, this
provides a clear direction to follow and a clear standard by which to
measure progress.
(b) What steps should 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?
This is obviously a matter of Congressional discretion. However, I
would work with the FRA's authorizing and appropriating committees in
both the House and Senate to work together to diagnose the problems and
prescribe solutions. Consistent failure to achieve goals would require
longer-term solutions, such as change in management, outsourcing or
consolidation of functions.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
I will do my best to ensure that agency performance goals are met;
Be responsive and helpful to the Administration and to Members of
Congress; Maintain high standards of ethical probity and personal
integrity; Be available to stakeholders; Strive to learn about the
agency and the issues we address by seeing firsthand (to the extent
possible and financially feasible) how things work.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
I will strive to learn enough about persons under my direct
supervision to know how they will function best--who needs degrees of
freedom and who needs closer supervision. I recognize that all people
are individuals and will work to provide a working environment that
allows people the freedom to achieve and create. I will instill a sense
of professionalism among every layer of the organization, and will try
to create opportunities for personal advancement and growth.
I am not aware of any employee complaints that have been brought
against me directly.
15. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
As Transportation Policy Director for Governor Bush, I worked with
the Texas congressional delegation (mainly at the staff level, and with
the assistance of Washington-based State employees from the Texas
Office of State-Federal Relations and the Texas Department of
Transportation). During the 6 years I worked for Governor Bush, I spent
the most hours providing congressional staff with information on the
Governor's ISTEA/TEA-21 reauthorization priorities. I also worked with
congressional offices on NAFTA trade corridors, border crossing issues,
and port and waterway matters.
I have worked closely with members of the Texas Legislature for
most of my professional life. While I recognize the vast difference in
responsibilities between that body and Congress, I also realize there
are similarities. I have experience helping legislators resolve
problems for their constituents, and will work to help Members of
Congress similarly in FRA matters. I understand that you have been
elected and I have not.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
I will work with the Secretary and Deputy Secretary to cooperate
with the Inspector General's investigations and to solve problems he
identifies. The Inspector General has prepared some valuable reports on
matters under the jurisdiction of FRA, and I will strive to work
closely with him and his staff to take advantage of their expertise and
seek their advice.
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.
The title ``Administrator'' implies that I will respond to
direction given to me by others (those who administer give feet to the
ideas and direction of others). In this case, I would be responding to
instructions from the Executive branch and from the Legislative branch.
I would also seek to instill an organizational culture within the FRA
that sought and valued contributions from all stakeholders.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views.
Reauthorization of the Federal rail safety programs; Development of
a national passenger rail policy and identification of organizational
and intergovernmental structures to achieve those policy objectives;
Consideration of rail issues during surface transportation
reauthorization in 2003.
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, I will to best of my ability. Some of my ability to distribute
program funds in an open fashion based on established criteria will
depend on the actual freedom afforded me by the annual appropriations
process.
The Chairman. Thank you.
Ms. Engleman, relative to pipeline safety, a recent
article, a report last year by the General Accounting Office
found that the number of major pipeline accidents, defined as
those involving death, injury, or property damage, rose by 4
percent a year during the 1990s. Then it goes on to relate:
``In recent years, Federal regulators have sharply curtailed
the use of fines as an enforcement tool.'' What are your
thoughts relative to fines?
Ms. Engleman. Well, sir, I believe also in that GAO report
it indicated the 4 percent increase in pipeline accidents and,
while it was to some degree augmented by the fact that there
was a 10 percent increase in overall pipeline mileage and
population growth near the pipelines, that does not change the
fact that the accidents are increasing.
I think it is incredibly important to enforce the rules and
regulations that we have in place stringently. When we create
rules and regulations, there should be open communication. Once
they are in place, they should be strictly enforced. I am
inspired by the fact that RSPA just 2 days ago announced a
$2.52 million fine against El Paso Pipeline in Texas for the
Carlsbad, New Mexico, accident, which you know occurred in
2000. That was a natural gas explosion that took over 12 lives
in an extended family, including 2 6-year-old twins.
This cannot occur, and when we have these problems we
should use every possible means of enforcement, education, and
have people understand that when accidents happen consequences
will follow.
The Chairman. Very good.
Mr. Van Tine, prior to Secretary Mineta coming on board, we
had a hearing relative to this fracas going on between Ford and
Firestone on tires and safety. We looked up and found at the
Committee level over at NHTSA, the National Highway
Transportation Safety Administration, that in the last 5 years,
for example, on vehicles there had been some 99 million
recalls. Quite a figure. Yet at the same time, all were
voluntary, none directed by NHTSA itself.
See if you can help wake up that organization, because
right now they are arguing whether the tires are safe or not
safe being replaced, and it is taking weeks to find out and
everything else. They ought to have that on the record
immediately, right now.
I do not know what they do, just eat and sleep and run out
and investigate and then eat and sleep some more and wait for
other things to happen, and then run out again and investigate.
This crowd is crazy up here about investigations, but nothing
about doing their work.
Mr. Van Tine. Mr. Chairman, within the past couple of weeks
I have gotten around to the Chief Counsels' offices in each of
the operating administrations and I have met all of the lawyers
who work at NHTSA and I have a sense of what they do, and they
do do a little more than eat and sleep.
But Dr. Runge has been nominated to be the new
Administrator of NHTSA, and I will commit to you that I will
work with him and his Chief Counsel to ensure that NHTSA
carries out its responsibilities in a forceful manner.
The Chairman. Then on one other score, predatory pricing.
You are familiar with the recent American Airlines decision,
and it appears to this Senator if there ever was predatory
pricing, in that case it was just that. There is a technicality
in antitrust law, Robinson-Patman, in pricing, and we do not
have that technicality with the Department of Transportation.
You have got the authority to issue guidelines on what the
Department constitutes as predatory pricing.
Will you get onto that immediately, if you do not mind,
because in addition to controlling all the hubs, where no one
can get in because they can engage technically in predatory
pricing, and de facto--I mean, there is not any question about
it--run out all the competition and continue with the lack of
service and high pricing and everything else of that kind. It
is a real job at the committee level here in government to try
to develop competition in the airline service. But that is one
of the little things that we need to get onto, and the
Department has that authority and I hope you will get behind
that one also.
Mr. Van Tine. Yes, sir. I know that ensuring and
maintaining competition is a priority of this Secretary and the
Deputy Secretary. I have again met the attorneys in the Office
of General Counsel who specialize in antitrust issues and I
have spoken with them. I have also met the enforcement
attorneys in the Office of General Counsel and I can assure you
again that I will actively pursue the predatory pricing issue
and look forward to working with you on that, sir.
The Chairman. Very good. We appreciate the appearance of
each of you this morning. The record will stay open for further
questions by the Committee, and we will try our best to move
your confirmation as quickly as possible.
Thank you very much. The hearing will be in recess subject
to the call of the chair.
[Whereupon, at 10:10 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Richard G. Lugar,
U.S. Senator from Indiana
I am pleased to have this opportunity to introduce Ms. Ellen G.
Engleman to the members of the Senate Committee on Commerce, Science
and Transportation.
I have known Ellen Engleman since 1990, when she was selected as a
distinguished member of the first class of the Richard G. Lugar
Excellence in Public Service Series. This program selects 15 women in
the State of Indiana each year for leadership training for elected and
appointed positions in public service.
After serving as a public affairs executive at GTE in Indianapolis,
Indiana, Ellen served as a Congressional fellow in my Washington office
in 1992 where she utilized her excellent research capabilities,
organizational skills, and writing to make her a vital part of my
legislative and administrative operation.
Most recently Ellen has been the President and Chief Executive
Officer of Electricore, Inc. This is a non-profit research and
development consortium located in Indiana which develops advanced
transportation and energy technologies through Federal private/public
partnerships. Through this consortium Ellen has established herself as
a thoughtful strategic planner and resourceful director and liaison to
Federal, private, and academic organizations.
Ellen's unique background blends experiences from the fields of
business, transportation, legislation and law. She has used her talents
and intellect to bring people together for a common cause in order to
effect positive change. I have always been impressed by her high level
of dedication and commitment to public service.
Mr. Chairman, I thank you for this opportunity to introduce Ellen
G. Engleman to the Committee on Commerce, Science and Transportation.
__________
Response to Written Questions Submitted by Hon. Ernest F. Hollings to
Samuel W. Bodman
The Advanced Technology Program (ATP) is an industry-led,
competitive, and cost-shared program to help the U.S. develop the next
generation of breakthrough technologies in advance of its foreign
competitors. ATP contracts encourage companies to undertake initial
high-risk research that promises significant widespread economic
benefits, although the program does not support product development.
The National Academy of Sciences' comprehensive report on ATP issued
earlier this month is the most recent study of this program. Mr.
Bodman, the Department of Commerce asked to reprogram this year's
funding for new ATP awards and use that funding in FY 2002. That
request was denied.
Question 1. Will you be able to issue the full amount currently
available for new awards this year?
Answer. It is my understanding that the Advanced Technology Program
(ATP) intends to evaluate each batch of applications independently. I
have been told that fourteen potential awards (Batch 1) are currently
being reviewed by the ATP selecting official. Unfortunately, it is
premature to speculate how much money will be spent this fiscal year
since the Program is conducting its first rolling applications process.
Question 2. When will you begin to issue new awards?
Answer. The ATP expects to make its recommendations for Batch 1 to
the Acting Director of NIST by mid-July. The recommended proposals will
then be subject to review by Secretary Evans. Finally, these proposals
will require review by both the legal and grants offices prior to the
commitment of the funds.
Question 3. How many rounds of competition will there be and what
is your timeline for completing the awards process for each round prior
to the end of the fiscal year?
Answer. I understand that ATP is conducting technical and business
reviews for Batch 2 and 3 and it is expected that recommendations to
the Acting Director of NIST will occur by August 31st. Since the
rolling submission competition remains open through September, as
published in the Federal Register, those proposals which are submitted
after July 10th, Batch 4, will not be evaluated in time to make awards
during this fiscal year.
Question 4. Is the United States in danger of losing its ability to
conduct longer-term research in job-creating technologies, and is this
a problem in a world where other governments consider it not only
acceptable but essential to support their industrial technologies?
Answer. Historically, much of the corporate research and
development (R&D) funding in the United States focused on longer-term
technologies. Often, working with universities and the government, in
the less competitive world economy of the past, American companies
could afford the research that led to the transistor, fiber optics,
modern integrated circuits, and biotechnology. In today's very
competitive economy and very demanding stock market environment,
however, both large companies and even many venture capitalists must
focus their limited research dollar on safer, short-term projects that
will pay off quickly.
Industry continues to focus more on downstream process and product
development and away from basic and applied research. Private investors
are becoming more critical of technically risky research ventures. The
United States spent $37.9 billion on the performance of basic research
in 1998, $51.2 billion on applied research, and $138.1 billion on
development. These totals are the result of incremental increases over
several years.
The United States cannot remain complacent while most of our
industrial competitors, including the European Union, the United
Kingdom, France, Japan, and Canada have industrial programs designed to
promote technological development and are increasing their financial
commitment to them. All of these programs are viewed as appropriate
vehicles to promote innovation.
As you are well aware, there is an on-going debate on whether a
funding gap exists in the United States between basic research and
innovation. According to Dr. Lewis Branscomb of Harvard University, we
do not know whether such a gap exists in the conventional sense of the
word. Yet I believe that in order to remain competitive, it is
necessary to ensure critical technologies are not lost. To make this
happen, the United States government should be prepared to utilize
various partnerships with industry, universities, and its national
laboratories to conduct the longer-term research vital to U.S. economic
growth.
Question 5. Do we need programs such as DOC's Advanced Technology
Program (ATP) to help American industry stay at the cutting edge?
Answer. The private sector is facing a set of challenges that did
not exist when current federal R&D priorities were set: an increasingly
competitive global economy; shorter product life cycles; and advanced
technologies being created and adopted by competitors worldwide. For
example, funding for total research rates the U.S. sixth behind the
other G-7 industrialized nations. Private investors are, increasingly,
viewing early stage technology as too risky for investment. Government
continues its significant and strong support of basic research, and the
private sector backs downstream developments.
ATP can fill a critical gap in bringing advanced technologies to
market, since it cost-shares funding of early stage, applied research
that companies and private investors consider too risky for captive
investment. In addition, the ATP catalyzes the formation of strategic
alliances between industry, universities, and states; partnerships are
a promising mechanism for competitive growth.
Question 6. How can you help Secretary Evans and me build support
for the program?
Answer. As you know, the Secretary is currently evaluating ATP and
believes that certain changes could enhance the Program to better serve
the Nation's needs. If confirmed, I intend to support the Secretary in
his review and to offer my expertise as a chemical engineer and a
former chief executive officer to help reform and reshape this valuable
program.
Question 7. What should the role of the States be in supporting
innovation?
Answer. States currently support innovation in a variety of ways.
They support technology incubators housed at their universities,
provide tax relief to companies who choose to locate or relocate to a
particular state, and often provide seed money for promising
technologies. Certainly, these efforts are necessary and should be
encouraged to continue.
Yet, from a national perspective, this is not enough. Because state
governments tend to be interested in regional economic development and
tend to invest in close-to-market solutions, they often miss
investments in the truly revolutionary technologies that will keep the
United States at the leading edge. They often ignore possible solutions
that can only be provided by a national program such as the Advanced
Technology Program.
carcon
Question 1. What was Carcon? How did you become involved with the
company? When did you buy stock in the company and how much stock did
you purchase? Did you know the other investors in Carcon? Did you ever
serve as a director of Carcon, or did you ever attend any meetings of
the Board of Directors?
Answer. Carcon was a private corporation formed as an investment
vehicle under the leadership of David Carmichael and William Connors of
Houston, Texas. I participated in a private offering and purchased
$50,000 worth of stock in 1985. As I recall, I was one of twenty or
more investors who participated in the offering. I personally knew
Carmichael, Connors, and Thad Hutcheson, then a partner of Baker and
Botts in Houston, who founded the company. I do not know who the other
investors were although I believe many of them were in the Houston
business community and I probably knew a few of them. I did not serve
as a director of Carcon, nor did I attend any meetings of Carcon's
Board.
Question 2. Did you ever have knowledge of any connection between
Carcon, a Delaware Corporation, and Tokai Carcon Corporation of Japan?
Answer. I have no knowledge of any connection between Carcon and
Tokai Carcon Corporation.
Question 3. What was Harkon and what was your involvement with
Harkon?
Answer. I have no knowledge of Harkon.
Question 4. Were you ever aware that Harkon was an investor in
Carcon? If so, when did you gain this knowledge? Were you ever aware of
who were the beneficial owners of Harkon?
Answer. I have no knowledge of Harkon and am unaware that Harkon
was an investor in Carcon.
Question 5. What was American Oil and Gas Company and what was your
involvement with American Oil and Gas Company?
Answer. American Oil and Gas Corporation (AOG) was an operator of
small intrastate gas transmission lines in Texas. When Carcon merged
with AOG, I became a share owner of AOG. I had no other involvement
with AOG until Cabot's transaction with AOG in 1988, at which time I
became a director of AOG.
Question 6. At the time that American Oil and Gas merged with
Carcon, what was your understanding of who the principal investors were
in American Oil and Gas? When did you become aware that American Oil
and Gas would acquire Carcon?
Answer. At the time of the Carcon-AOG merger, AOG was a publicly-
owned corporation with its shares traded on the American Stock
Exchange. To the best of my recollection the General Electric Company
was a major shareholder of AOG. I would estimate that I became aware of
the AOG-Carcon merger in late 1985. In any case, it was well before my
joining Cabot in 1987.
Question 7. Please describe the process by which Cabot Corporation
invested in convertible preferred stock and stock warrants in American
Oil and Gas Company.
Answer. Prior to my arrival at Cabot Corporation in 1987, Cabot had
purchased Westar, an Amarillo-based operator of gas transmission
properties. After my arrival and after about a year's study, Cabot's
management concluded that Cabot should withdraw from the gas
transmission industry and initiated an auction process under the
leadership of Goldman Sachs to sell Westar. AOG was the winning bidder
in the auction, Westar was sold to AOG, and Cabot Corporation received
convertible preferred stock and warrants in AOG.
Because I, as Chairman of Cabot, had owned shares of AOG prior to
my employment at Cabot, a Special Committee of Cabot's Board,
consisting of three outside Directors, reviewed the auction process and
any potential conflicts caused by my ownership in AOG. They concluded
that the sale of Westar to AOG was in the best interest of Cabot's
shareholders. Over time, that judgment proved to be correct.
Question 8. Have you ever met, or have you ever had any businesses
dealing with any of the following individuals: Haroon R. Kahlon, Khalid
Bin Mafouz or James R. Bath? If so, please provide dates and places of
meetings.
Answer. To the best of my knowledge, I have never met Messrs.
Kahlon, Mafouz, or Bath. I have never had any business dealings with
any of them.
Question 9. During the period that you were shareholder in Carcon,
what, if any, was your understanding of Khalid Bin Mafouz' involvement
with each of the companies listed above? (Carcon, Harkon, and American
Oil and Gas).
Answer. I had and have no knowledge of Mafouz' involvement with
Carcon, Harkon, or AOG.
Question 10. Did you ever become aware of the dissolution of
Harkon? If so, at the time of Harkon's dissolution, were you aware that
Khalid Bin Mafouz was under indictment by law enforcement authorities
with the United States? Were you ever aware that a restraining order
had been placed on the movement of his funds in the United States?
Answer. I was and am unaware of Harkon's existence or its
dissolution. I know nothing about Mr. Mafouz, his indictment, or
anything related to his financial dealings.
Question 11. Did you ever have any contact with or involvement with
any officer or director of the Bank of Credit and Commerce
International?
Answer. To the best of my knowledge, I have never had contact or
involvement with any officer or director of the Bank of Credit and
Commerce International.
__________
Response to Written Questions Submitted by Hon. John McCain to
Samuel W. Bodman
Question 1. The Cabot Corporation has 40 manufacturing facilities
in 25 countries. As its Chairman and CEO, you are very familiar with
the international environmental regulations. The President has
indicated that the U.S. will not sign the Kyoto Protocol. Several other
countries have indicated a desire to proceed with ratifying the
protocol. What impact will the absence of the U.S. in the final
negotiations have on the ability of U.S. industries ability to compete
in those countries which may sign the Protocol?
Answer. From what I understand, one cannot reasonably predict the
possible impact of the Kyoto Protocol on U.S. industries if the United
States does not become a party, because one can only speculate if in
fact the Protocol will become effective and if so, what its obligations
would entail and which countries would be party to it. In general,
however, it does not seem likely that U.S. multinational companies
would incur any competitive disadvantage concerning their operations in
countries that implement the Protocol. Companies choose to invest in
particular countries for a variety of reasons, including such factors
as market access, availability of natural resources, labor, and
technology, and general business climate. Environmental regulations may
or may not be a significant factor in an investment decision. In
addition, new regulatory requirements flowing from the Protocol in a
particular country presumably would affect only companies generating
greenhouse gas emissions, and would apply to all such companies
regardless of the nationality of their ownership. Thus, it would seem
that within Protocol countries the relative competitive impact of the
Protocol on U.S. companies would not likely be great. Operations in a
Protocol country--regardless of ownership--might be competitively
disadvantaged compared to operations in a non-Protocol country that
does not have similar obligations (such as China or India), but this
would depend also on a variety of factors, including the nature of the
obligations in the Protocol country and the presence or absence of
similar obligations in those non-Protocol countries where competitors
to the company are located.
Question 2. Given your experience as an investment banker and an
industrialist, what changes would propose to the government's patenting
and licensing process? How can we improve the technology transfer
process to get more of federally sponsored research results into the
marketplace?
Answer. The Office of Technology Policy within the Department's
Technology Administration issued a report last year (Tech Transfer
2000) that highlighted many ways to improve the process of moving
federally sponsored research results into the marketplace. The ideas
identified in that report are important; they include providing
companies with better information management tools to more quickly and
efficiently identify particular areas of Federal lab knowledge and
expertise, and streamlining the intellectual property protection rules,
contractual mechanisms, and management policies to reduce the potential
for friction among collaborating parties. If confirmed, I intend to
explore further the merits of these ideas and others, and how to put
them into practice.
Question 3. Over the years, we have heard claims of how some
countries have used technology standards as trade barriers. In your
experience, have you seen any attempts at this? As Deputy Secretary of
Commerce, do you have any plans to investigate this issue further?
Answer. It has indeed been commonplace for nations to use the
standards setting process as a trade barrier to foreign competition.
From wireless technologies to aircraft, American companies and
inventors face the constant challenge of building products to a variety
of specifications. The U.S. Trade Representative's 2001 National Trade
Estimate Report provides many examples of other nations' using
technology standards as barriers to trade. If confirmed, I would hope
to leverage the Department's many assets and resources in standards and
trade to assist American businesses in addressing this challenge.
Question 4. The Secretary of Defense has placed a high priority on
space as a future national security interest. What impact will this
increased emphasis have on the emerging commercial space industry?
Answer. The high priority on space emphasized by Secretary Rumsfeld
presents an opportunity for the U.S. commercial space industry. As
noted in the Rumsfeld Commission report, a robust commercial industry
is critical for our national security. For example, the Commission
stressed the need for our commercial remote sensing industry to be one
generation ahead of the rest of the world; that is a strategy that both
NOAA and TA's Office of Space Commercialization are working to
implement. The DoD's commitment to space also can benefit commercial
sectors in other related areas, by assuring, for example, that our
launch base and range infrastructure is the best in the world and that
our satellite navigation systems are without peer. In addition, DoD's
need for a highly reliable launch-on-demand capability could present
another area of opportunity for the commercial sector.
Question 5. In your response to earlier Committee questions, you
stated ``. . . many of the U.S. regulations and laws were developed at
a time when American commerce dominated the world. With rare exception,
this dominance no longer exists. Global competition dominates the world
landscape, and U.S. regulations and laws should recognize that.'' What
are some examples of regulations and laws that should be changed to
reflect this reality?
Answer. The Export Administration Act (EAA) is an example of a law
that needs to be modified to reflect the fact that American goods and
technology no longer dominate the world. The EAA has not been
substantially revised since before the end of the cold war. The Senate
Banking Committee recently reported out legislation (S. 149) that
would, among other matters, remove export restrictions on technology
that is widely available in foreign markets, and delete the provision
in the National Defense Authorization Act that uses MTOPS (millions of
theoretical operations per second) as the measure for controlling
exports of computers to certain destinations. These improvements, and
others, will allow American businesses to enhance their competitiveness
overseas. The Administration has expressed support for S. 149, as
reported from the Senate Banking Committee.
Additionally, I believe that the antitrust laws should be re-
examined in light of changes brought about by broader global
competition. Many of our ``old economy'' industries would probably be
more competitive globally if they were permitted/encouraged to
consolidate.
Question 6. Mr. Bodman, the 2001 Department of Commerce budget is
$5.1 billion. The NOAA budget comprises over half of that funding. The
National Marine Fisheries Service, the NOAA agency responsible for
fisheries, will receive approximately $519 million. Of that, $377
million was earmarked for special projects. While much of this funding
will 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. Bodman, sustainable and competent management of our nations
fisheries is extremely difficult. It is made unnecessarily more
difficult 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 and throughout the rest of the
Department?
Answer. The President's fiscal year 2002 Budget Request for NOAA is
$3.15 billion, which includes $598 million for the National Marine
Fisheries Service (NMFS). The Presidents fiscal year 2002 Budget
Request for NMFS follows Congressionally enacted levels in fiscal year
2001 and invests in core programs needed for NMFS to meet its mission
to manage fisheries, rebuild stocks, and protect endangered species. If
confirmed, I intend to work closely with the Congress to focus spending
priorities on improving science, management, and enforcement programs
at NMFS and core missions throughout the rest of the Department.
Question 7. A recent Senate report identified the lack of
experienced staff as limiting the ability of the Commerce Department
and other agencies to monitor and enforce trade agreements and to
obtain favorable resolutions of compliance problems. The report also
states that increasing applications and inexperienced staff at the
Patent and Trademark Office result in undeserving patents slipping
through which in turn poses a critical threat to an economy that runs
on intellectual property. With the upcoming wave of retirement in
government personnel, how would propose to address these significant
workforce management problems?
Answer. Workforce management issues are clearly of deep concern to
the President and to Secretary Evans. I share their concern. Your
question underscores the challenges we will face within the Department,
specifically, our ability to recruit key talent, retain our most
skilled workforce, and prepare for what appears to be a potentially
significant drain of experience through retirement losses.
To recruit key talent, we must pay attention to the marketplace and
to what is needed to attract recent college graduates to our workforce.
I have been told that Commerce has some initial efforts underway,
having recently established Memoranda of Understanding with nine
selected universities regarding recruitment of their graduates. It is
also my understanding that Commerce has deployed an automated hiring
process which allows people interested in Commerce jobs to apply over
the Internet. These are good first steps, but I am sure there is much
more we can do. I will be particularly focused on ways we can foster
recruitment of scientists and engineers, skill sets critical to the
Department.
To make certain that we have a skilled workforce, we must ensure
that appropriate, timely training is provided. I understand that
several of Commerce=s bureaus have implemented sound training
approaches that meet this objective. For instance, both Census and PTO
have onsite corporate universities to upgrade the skills of their
employees. We need to examine how to do better in this area, especially
if we turn our attention to using innovative, Internet-based approaches
that enable us to reduce costs while training large numbers of
employees.
The retirement wave that may be coming appears to be both a threat,
and an opportunity. I have been told that within the next 4 years,
close to 1 out of 3 Commerce employees will be eligible for retirement,
and that current models predict that we are likely to lose 20 percent
of our workforce to retirement by fiscal year 2005. Should this happen,
we will face a serious loss of experienced staff, most likely at the
highest senior levels. We will need stronger approaches to managing the
overlap of new and seasoned workers. On the other hand, the large
number of potential vacancies is a superb opportunity to re-think both
the number and types of jobs we need to deliver service to the public.
We can undertake considerable restructuring while minimizing any
negative impact on our workforce.
I have not had a chance yet to read the report you are citing, but
I will do so. I can assure you that Secretary Evans and I are fully
committed to examining and addressing the human capital challenges we
will face in the Department.
Question 8. One of the major functions of the Department of
Commerce is to ensure the global competitiveness of U.S. companies. One
of the major administrations that help to achieve this goal is the
Technology Administration. Based on your experience in the private
sector, could you please describe how the Technology Administration's
processes and functions can be improved to further help American
businesses?
Answer. The Technology Administration is indeed well-positioned to
help ensure the global competitiveness of U.S. companies, and I am
confident it will live up to this mission under Secretary Evans. I
believe the Technology Administration should focus its resources on
several key areas including: Global Technology Strategies: comparing
U.S. science and technology strategies to those of other global
leaders; Emerging Technology Policies: anticipating barriers to the
future success of critical emerging technologies and recommending
policy solutions; Technology-Led Economic Development: assisting state,
regional and local efforts to leverage technology strengths and
innovation assets to drive economic opportunity and job growth;
Technology Transfer: continuing to advise policymakers on ways to
maximize commercialization of technologies developed by or in
partnership with the Federal Government; Critical Current Issues:
working with policymakers in Congress and throughout the Administration
to address current policy challenges including workforce supply and
demand, barriers to e-commerce and the growth of critical
infrastructure platforms, such as broadband networks.
Within these broad areas, the Technology Administration will need
to identify specific activities or efforts where it can make the
maximum impact with its limited resources. TA leaders will need to
define clear and achievable projects with measurable goals.
Question 9. In your answer to the Committee's pre-hearing
questionnaire, you emphasize the importance of education in a number of
answers. One great threat to American competitiveness is that the
average American student is scoring much lower than foreign students on
math and science tests, and that America is not turning out enough
scientists and engineers. Based on your experience, what should the
Department of Commerce do to help improve the scientific and
technological aptitude of American students, and get more American
students interested in math, science, and engineering degrees?
Answer. The science and mathematics achievements of American
students have increased in the last two decades. Nevertheless, the math
and science performance of many American students remains below that of
global competitors, and improvements are needed. While states and
localities must shoulder most of the burden for improving our students'
math and science performance, the Federal Government is supporting
their efforts through initiatives focused on improving teacher quality,
upgrading curricula, increasing accountability, providing learning
support for students who need extra assistance, and integrating
technology into the classroom.
In nearly every job field, the demand for technological expertise
is growing, and skilled jobs involving science and technology are some
of the best paying jobs our economy offers. The Commerce Department can
play a role in helping prepare young Americans for these opportunities.
For example, many young people lack knowledge of and interest in
technical careers, and fail to stay with the math and science courses
needed to prepare them for these jobs. In response, the Commerce
Department is working with the National Association of Manufacturers in
a national campaign to provide information on technical careers to
students in middle school, the time when many young people form their
opinions about careers. We have also led a multi-year initiative to
focus national attention on meeting the Nation's demand for information
technology (IT) workers. This year, we are conducting a review of IT
worker training programs to help identify the types of programs that
provide workers with the marketable IT skills employers want. Finally,
business leaders have made it clear to us that improving workforce
quality is among their highest priorities. In response, the Commerce
Department is working to expand its role as an advocate for business
concerns in Federal education and training efforts.
Question 10. The Secretary of Commerce, following the President's
budget outline, has suspended new funding for the Advanced Technology
Program, pending a reevaluation of the program. What steps should the
Secretary take in order to thoroughly review and assess the
effectiveness of this program?
Answer. It is my understanding that the Secretary has not suspended
the ``rolling'' Advanced Technology Program competition this year. The
Secretary has, however, initiated a thorough review of the program to
ensure that it is fulfilling its original goal of funding the
development of high-risk technologies. Areas of concern include the
participation of large companies as single applicants and the
restricted role of universities, among others. If confirmed, I intend
to support the Secretary in this review and to offer my expertise as a
chemical engineer and a former chief executive officer to help reform
and reshape this program.
Question 11. A few members have recently suggested establishing a
Department of Trade within the Department of Commerce, to oversee and
coordinate all trade policy and address all trade-related concerns. I
don't believe the Department has been consulted regarding this matter.
What is your take on such a suggestion?
Answer. I am not aware of the specifics of this proposal, and at
present I do not have sufficient information to have an opinion on the
best way to organize the trade responsibilities of the executive
branch. I do know that we work closely with U.S.TR and the other trade
policy agencies through the National Economic Council process. On the
trade promotion side, I share Secretary Evans' desire to strengthen
coordination among the trade promotion agencies. In that regard, one of
his goals is to reinvigorate the Trade Promotion Coordinating Committee
(TPCC), so that it can provide recommendations to improve customer
satisfaction and increase coordination. Since the Department of
Commerce chairs the TPCC, Secretary Evans and I have a strong interest
in strengthening coordination across the government and are interested
in your thoughts as to how we can do a better job.
Question 12. The Administration seems to be walking a fine line
between enforcing current anti-dumping and countervailing duty laws and
abiding by WTO and other trade agreements. Does the Department plan to
develop an overall strategy to coordinate between these often opposing
forces?
Answer. The Bush Administration policy is to administer U.S.
antidumping and countervailing duty laws fairly, impartially, and in
accordance with U.S. law and our obligations under the WTO Agreements.
I see no reason for implementation of that policy to conflict with U.S.
obligations under WTO Agreements.
Question 13. Recent news report highlight how problems with voting
machine reliability have created public uncertainty regarding our
election system. Considering the National Institute of Standards and
Technology's role in establishing technical standards, what role should
NIST play in establishing rigorous standards for voting systems and the
election process to ensure public confidence in the American election
system?
Answer. If the Congress determines that the Federal Government
should play a role in the development of standards for voting systems,
NIST has expertise that could be helpful in implementing that role.
Specifically, and probably most relevant to voting system standards,
NIST has extensive experience in working with non-governmental
standards development organizations (SDO's) in their development of
standards. Although NIST itself promulgates technical standards for
Federal agencies to use in connection with their computer systems that
handle sensitive but unclassified information, it would not be
appropriate for a Federal agency unilaterally to promulgate standards
for voting systems, because State and local governments are in the best
position to determine what works best for their communities.
__________
Response to Written Questions Submitted by Hon. Ernest F. Hollings to
Ellen G. Engleman
pipelines
Question 1. As you know, the Senate passed a pipeline safety
reauthorization bill earlier this year. There is a great deal of
interest in improving the oversight and enforcement activities of the
Office of Pipeline Safety. What are your plans for working with both
the House and Senate to advance this legislation?
Answer. I know the Department looks forward to working with the
Congress to complete this important work this year, and has established
it as a priority element in our National Energy Policy, reflected in
the Administration's recent call for legislative action. Critical to
these mutual efforts are statutory mandates for pipeline integrity
management programs and programs that promote safety, including public
education and training. Reauthorization must include funding levels
sufficient to strengthen the Office of Pipeline Safety and its State
pipeline safety partners. RSPA must remain committed to using all the
incentives at its disposal--preventative education and training
activities as well as penalties to ensure the safety and reliability of
the Nation's pipeline network. RSPA will work with the pipeline
industry and all other affected stakeholders to improve safety and
reliability, but must maintain its independence and will take strong
action whenever warranted.
Question 2. There are a number of pending rules that need to be
finalized. In addition there are a number of rules that are long
overdue. What commitment can you make about moving this process ahead?
Answer. The Office of Pipeline Safety is attacking the huge task of
improving the safety of our nation's pipelines on several fronts
simultaneously, including completing rulemakings, strengthening our
enforcement efforts, rebuilding state partnerships, and building a
collaborative research and development efforts. In the FY 2002 budget,
the Administration seeks to increase significantly the resources
available to address the pipeline safety mission. In the past year, OPS
has completed a number of mandates. OPS developed a national integrity
management program, finalized integrity requirements for large oil
pipeline operators, proposed integrity requirements for small oil
pipeline operators, and outlined regulatory integrity concepts for gas
operators. OPS finalized rules defining unusually environmentally
sensitive areas. OPS proposed improvements to corrosion standards, and
also proposed rules for improving accident reporting, including
lowering the reporting threshold for spills to five gallons, which is
critical to improve analysis of safety problems that cause pipelines to
fail. I am committed to maintaining this progress and, with additional
resources, taking bold steps to complete any outstanding mandate as
well as addressing other pressing communications, education, and damage
prevention needs.
Question 3. The Office of Pipeline Safety recently assessed a $2.52
million fine, the largest civil penalty ever sought by a safety agency,
against a natural gas transmission pipeline operator for its role in
the explosion last year in New Mexico that killed 12 people. Last year
the agency assessed a record $3 million fine against a liquid-pipeline
operator for safety violations that led to the June 1999 explosion in
Bellingham that killed 3 boys. In recent years, federal regulators have
curtailed the use of fines as an enforcement tool. The agency says it
is now reconsidering that approach. Do you believe these penalties are
an effective tool in preventing accidents and encouraging safer
pipeline operations?
Answer. Yes, I think the Office of Pipeline Safety (OPS) has to
make full use of all enforcement tools available. As I discussed in my
response to question number one, RSPA must remain committed to using
all the incentives at its disposal--preventative education and training
activities as well as penalties to ensure the safety and reliability of
the Nation's pipeline network. RSPA will work with the pipeline
industry and all other affected stakeholders to improve safety and
reliability, but must maintain its independence and will take strong
action whenever warranted.
Question 4. A report last year by the U.S. General Accounting
Office found that the number of major pipeline accidents rose by about
4 percent a year during the 1990s. With the introduction of President
Bush's energy plan which calls for faster federal reviews of pipeline
projects and the construction of 38,000 miles of new natural-gas
transmission lines, do you think that the Office of Pipeline safety
should be playing an increased role?
Answer. Yes, the Office of Pipeline Safety currently has an
important role to play in evaluating the safety of the design and
construction of these projects, along with their state agency partners.
To better serve the safety goals of the Department, I believe that more
activity should be accomplished--especially in the role of public
safety education and outreach.
hazardous materials
Question 1. RSPA estimates that 800,000 shipments of hazardous
materials make their way through the national transportation system
each day. The Hazardous Materials Transportation Act was last amended
in 1994. The legislation which regulates the transportation of
hazardous materials including packaging and shipping requirements,
safety features and placement of rail tank cars, safety performance of
truck drivers and training and education for local emergency
responders, expired in FY 1997. There were no hearings during the 106th
Congress on this issue. What plans do you have for moving this
reauthorization forward? Are there specific areas of hazardous
materials transportation that you believe need to be addressed?
Answer. I believe that the Administration and Congress should work
together on reauthorizing and strengthening this law in order to
improve the good safety record of hazardous materials transportation,
and I am committed to doing so.
Question 2. Pursuant to Title 49 CFR Part 107, Subpart G (107.601-
107.620), certain offerors and transporters of hazardous materials,
including hazardous waste, are required to file an annual registration
statement with the U.S. Department of Transportation and to pay a fee.
The fee provides funds for grants distributed to States and Indian
tribes for hazardous materials emergency response planning and
training. DOT changed the fee assessment for haulers of hazardous
transportation from a flat rate per carrier to $1975 annually for large
carriers and $275 for small carriers. In December 2000, the RSPA
announced a proposal to temporarily reduce registration fees since the
registration fees collected were more than the amount anticipated when
the fee schedule was established. However the Bush Administration's
budget request required full funding for RSPA through user fees, so
eliminating the proposal to reduce the user fees. Can you please
comment on the issue of user fees?
Answer. It is Administration policy that industries that benefit
from government programs pay for those programs. The Hazardous
Materials Safety Program benefits shippers and transporters of
hazardous materials by helping ensure the safety of hazardous materials
in transportation. Consistent with Administration policy, the RSPA
budget request proposes to charge the hazardous materials industry for
the costs associated with assuring the safe transportation of hazardous
materials. This would ensure that industry pays part of the cost of the
program that facilitates its operations receiving those benefits.
Question 3. I have reviewed your credentials, which are impressive
and clearly show a wealth of experience in the business sector and in
managing people and budgets. However, given that you do not have the
same depth of experience in the areas of pipeline and hazardous
materials safety, what actions will you take to familiarize yourself
with your new regulatory responsibilities? What qualifications will you
look for as you fill out your staff?
Answer. RSPA is a very diverse agency. Based on my previous
contacts and through my more recent direct experience with the RSPA
senior staff, I know that RSPA is staffed with highly skilled and
professional individuals. I am confident that, irrespective of my
direct in-depth knowledge of these two programs, the management skills
that I bring to the position will be relevant and that the combination
of my skills and those that are available through the career staff will
enable RSPA to flourish.
__________
Response to Written Questions Submitted by Hon. Senator John McCain
to Ellen G. Engleman
Question 1. As you may be aware, this Committee has worked at
length to develop comprehensive pipeline safety improvement
legislation. As a result of our bipartisan efforts, the Senate approved
S. 235, the Pipeline Safety Improvement Act of 2001, on February 8th.
We remain hopeful the House will take a similar course of timely
action. While the Senate has acted, we are certainly interested in
working with the Administration and will consider its recommendations
to further promote pipeline safety. When can we expect to receive input
from the Department on proposals to strengthen our pipeline safety
policies?
Answer. I know the Department looks forward to working with the
Congress to complete this important work this year, and have
established it as a priority element in our National Energy Policy,
reflected in the Administration's recent call for legislative action.
Critical to these mutual efforts are statutory mandates for pipeline
integrity management programs and programs that promote safety,
including public education and training. Reauthorization must include
funding levels sufficient to strengthen the Office of Pipeline Safety
and its State pipeline safety partners.
Question 2. I recently contacted Chairman Young of the House
Transportation and Infrastructure Committee to urge him to move forward
with action on pipeline safety improvement legislation. If confirmed,
what actions would you take to help move a pipeline safety bill through
the legislative process?
Answer. If confirmed, I will commit myself to pipeline safety
reauthorization and to provide recommendations or proposals to Congress
in time for decisive action during this session.
Question 3. Last week, RSPA announced it would be seeking the
largest civil penalty ever proposed against a gas transmission pipeline
operator in the history of the federal pipeline safety program.
Specifically, RSPA would be imposing a $2.52 million civil penalty
against El Paso Energy Pipeline Group for safety violations related to
the August 2000 pipeline failure in Carlsbad, N.M., which lead to the
deaths of 12 people. Please comment on the Department's action in this
manner. Can we expect RSPA to take similar punitive actions in the
future?
Answer. I am aware of, and support, RSPA's decision to levy civil
penalties in this tragic case. RSPA must remain committed to using all
the incentives at its disposal-- preventative education and training
activities as well as penalties to ensure the safety and reliability of
the Nation's pipeline network. RSPA must maintain its independence and
will take strong action, whenever warranted, yet work with the pipeline
industry and all other affected stakeholders to improve safety and
reliability.
Question 4. In the past, the National Transportation Safety Board
(NTSB) has indicated that RSPA has the worst record of all
transportation agencies in responding to its recommendations. What will
you do to improve RSPA's responsiveness to NTSB safety recommendations?
Answer. I am aware that RSPA has taken important steps over the
past several years to improve its responsiveness to NTSB safety
recommendations and that its recent record has, in fact, been much
improved. RSPA and NTSB will not always agree on specific responses to
each recommendation, but should consistently agree on safety as the
highest priority. However, I assure the Committee that I will
personally place the highest priority on prompt and complete replies to
all NTSB recommendations. I also commit to early and frequent
coordination with the Board leadership and members.
A recent example of RSPA placing a higher priority on working with
the NTSB involves RSPA working directly with the Department's newly
created Intermodal Hazardous Materials Program Office. A safety
recommendation had been issued to another Operating Administration that
directly involved RSPA, and by working jointly with the two offices,
the recommendation was immediately acted upon and addressed. The end
result was that the recommendation was effectively and efficiently
responded to, which improved transportation safety.
Question 5. If confirmed, what policies would you initiate to
promote the safe and efficient transportation of hazardous materials?
Answer. I will encourage regulations that enhance intermodalism and
international harmonization to promote the efficient movement of
hazardous materials across borders while maximizing safety to the
public. I will stress compliance assistance, including training and
outreach to educate the regulated industries (e.g., carriers, shippers)
on the regulations, and enforcement to address violations of hazmat
regulations. I will encourage more extensive use of data analysis to
identify threats to safety not yet addressed in our program. I will
foster an environment that strives to enhance customer service.
Question 6. In 1990, Congress authorized an emergency preparedness
grant program (EPGP) for states and Indian tribes to be funded from
fees collected annually from the hazardous materials industry through a
registration program. At the same time, Congress directed the
Department to adjust the amount of the fees being collected to reflect
any unexpended balance in the EPGP.
This current registration year--2000-2001--is the first time the
Department has collected an unexpended balance in the EPGP. As required
by law, the Department proposed in December 2000 to adjust the fees
downward to reduce the unexpended EPGP balance. However, the
President's budget request proposes to use this unexpended balance--
currently in excess of $7 million--to partially fund the federal
hazardous materials transportation regulatory program, and further,
requires the Department to withdraw its proposal to reduce the hazmat
registration fees so that the Department will continue to have access
to an unexpended reserve of funds, and finally, that you would propose
another rulemaking to raise the fees so that by FY 2003 there will be
funds in the EPGP account to fully fund the federal hazardous materials
transportation regulatory program and the EPGP--a total of at least
$36.5 million.
(a) Does the Department currently have authority to divert hazmat
registration fees for the purpose of funding the Department's hazardous
materials regulatory program? (b) Is the Department is violating
current law by refusing to adjust the unexpended balance in the EPGP?
(c) Would you agree that the Department's hazardous materials
transportation regulatory program is critical to ensuring the safe
transportation of these materials? (d) Do you believe that a safety
program should be dependent on whether or not sufficient fees have been
collected to accomplish necessary inspections, enforcement, and
regulatory efforts?
Answer. I understand that RSPA does not have authority to use
hazmat registration fees to fund the hazardous materials safety program
without statutory change. On April 9, 2001 the President submitted his
fiscal year 2002 budget request to Congress. In that budget request,
the President proposes to fund a portion of RSPA's hazardous materials
safety program budget from fees collected through the Hazardous
Materials Registration program. Consistent with the President's budget
request to Congress, RSPA is delaying final action on this rulemaking
pending enactment of the authority to provide the authorization to fund
part of the hazardous materials program with registration fees. I am
told the Department's legislative proposal on this subject is currently
in clearance.
The delay in action to reduce registration fees would not appear to
violate laws, especially because the President has not proposed changes
to Congress to implement the use of these funds in a new way. The
President's FY 2002 budget proposes the use of fees to partially cover
the costs of the hazardous materials program. If the proposal is
adopted, it will establish the legal basis for spending those funds to
partially fund RSPA's hazardous materials safety program. Otherwise, I
am told that RSPA intends to adjust fees significantly to reduce the
surplus over a number of years.
I do agree that the hazardous materials safety program is critical
to the safe transportation of hazardous materials. The program also
yields substantial benefits to industry in providing a consistent set
of national standards to efficiently transport hazardous materials
throughout the U.S. We are confident that the industries that benefit
from the program can provide sufficient funds to cover the program
costs without imposing any net economic disadvantage. I am confident
that Secretary Mineta would not allow any reduction in safety effort
due to reduced user fee revenues.
Question 7. The United States benefits greatly from the
international commerce of hazardous materials. We are told that no
other country funds their hazardous materials regulatory program
through user fees. Has the Department assessed the competitive
disadvantages that US industry may face as a result of these fees?
Answer. I understand that the Department has not specifically
analyzed competitive disadvantages that could result from the
application of user fees. However, it is also my understanding that
RSPA anticipates that an additional fee would have a negligible
economic impact on companies engaged in foreign commerce.
__________
Response to Written Questions Submitted by Hon. Ernest F. Hollings
to Jon Allan Rutter
passenger service
Question 1. Many experts believe that it is long past the time for
the United States to develop an integrated high speed rail network,
similar to those in Europe and Japan, in an effort to develop a more
balanced transportation system, improve air quality and spur economic
growth in our downtown business centers. Can you comment on your plans
for the high speed corridor program?
Answer. Before answering about the plans for high-speed rail in the
U.S., I want to address the international comparisons in the question.
The Department of Transportation's Bureau of Transportation Statistics
compiled an informative set of transportation statistics about the G-7
countries, available at http://www.bts.gov/itt/G7HighlightsNov99/G-
7book.pdf. These statistics seem to illustrate that each nation's
transportation system usage statistics reflect its relative modal
transportation infrastructure investments. Western European nations and
Japan have more rail passenger travel (passenger-kilometers) than the
United States, but the U.S. has significantly more travel by air. These
statistics illustrate the national investment choices made in each of
these countries. Our aviation system and extensive highway and road
networks offer Americans much more personal mobility than other G-7
nations, as measured by passenger-kilometers per capita.
However, highway and aviation congestion has pressed many state
transportation planners to advocate higher speed intercity passenger
rail services that would offer competitive travel times to commercial
aviation and automobiles. One of the tasks of the Department of
Transportation will be to work with the Congress and the States to
figure out the right kinds of incentives to bring about more of this
type of development. Given my experiences in Texas, I have unique
perspectives in working with other states in these high-speed
corridors. I plan to give priority consideration to this effort in the
context of the broader issue of the Federal role in the management and
improvement of rail passenger service in this country.
Question 2. Some people advocate the ``privatization'' of Amtrak,
but don't agree on what that means. We, in fact, have mandated that it
become ``operationally self-sufficient'' by 2003, even though no other
railroad in the world operates without federal support. Do you think
that privatization means the elimination of operating support, and/or
the elimination of capital support (which means the end of the system),
or just that it should not be a federal entity operating it?
Answer. There is currently no legislative mandate for the
privatization of Amtrak or, more generally, of rail passenger service
in the U.S. I believe the sentiment for ``privatization'' is motivated
by a desire that the provision of rail passenger service be less
dependent on the public sector for financial support and that it be
managed by an organization with strong incentives to offer good
customer service and operate efficiently. It can be argued that, given
the degree of public investment in other competing modes of intercity
transportation, rail passenger service will require substantial and
continuing public investment, and that Amtrak will also have great
difficulty shedding its dependence on operating support. I welcome the
suggestions by Members of Congress that there be a debate on ways to
improve upon the provision of rail passenger service while decreasing
the need for public and, specifically, Federal support.
Question 3. As you will hear, some people on this committee will
say that a passenger railroad should be funded only in the most
congested areas of the nation--the East and West coasts. Others feel
very passionately that it must be a national system--that covers the
whole country--otherwise they are unwilling to pay for it. What is your
opinion? Do you ascribe to the theory that it is only for congestion
relief in overcrowded urban areas where you just can't drive, or do you
think it also necessary as an alternative in more rural areas, where
people already have less choices--served by fewer airlines, etc?
Answer. Certainly the purely economic case for the provision of
rail passenger service is stronger in those types of services that
represent attractive travel alternatives to air and auto trips, where
the revenue recovered exceeds or comes close to exceeding the operating
cost, and where there are substantial public benefits such as
congestion relief. These circumstances tend to be more likely in short
distance ``corridor'' services. States also appear more likely to share
in financial support for these types of services. Service to more
isolated communities may be justified on other grounds. In any case the
extent of rail passenger service should not be static. The provider of
these services needs to continue to examine the route structure.
railroad rehabilitation and improvement financing act (rrif)
Question 1. How is the FRA implementing the RRIF program? Have any
awards been made?
Answer. I understand that FRA has designed an interactive
application process that provides technical assistance to prospective
applicants. Applications may be submitted at any time. Pre-application
meetings are encouraged, but not required. If sufficient historic
financial information is provided, FRA calculates a preliminary
estimate of the Credit Risk Premium for a prospective applicant prior
to completion of an application.
Since the Final Rule was effective on September 5, 2000, FRA has
had 20 pre-application meetings. A total of 4 applications have been
submitted. FRA has approved the first RRIF loan, for the I&M Rail Link.
The $100 million loan will be used to refinance existing debt as part
of a re-capitalization plan that will enable the railroad to undertake
a 5-year major track rehabilitation program. I&M Rail Link is a 1,400
mile regional railroad operating in the States of Iowa, Illinois,
Minnesota, Missouri, and Wisconsin, serving 907 shippers. The term of
the loan is 25 years.
FRA currently is evaluating the creditworthiness of the other 3
applications.
Question 2. This is a new program that requires financial
expertise. Do you believe that the agency is adequately staffed to
advise applicants, review applications and process and monitor awards?
Answer. The RRIF statutory provisions amended Title V of the
Railroad Revitalization and Regulatory Reform Act of 1976. The staff
assigned to the RRIF Program has experience managing the prior Title V
Program. FRA also is strategically allocating available resources to
the RRIF Program. Even so, if confirmed, I will work with our budget
office (and the Secretary's Office and the OMB) to consider whether
additional staff and contractor support would help expedite review and
processing of RRIF applications.
high speed corridors
Question 1. Amtrak recently introduced high-speed rail service
between Boston and Washington D.C. The Department has designated nine
other high-speed rail corridors. As Secretary, what will be your
position on expanding high-speed rail service? And if supportive, what
steps will you pursue?
Answer. If confirmed, I will have FRA continue to work with the
State sponsors of corridor service and with Amtrak to encourage
investment and service development in the designated high-speed
corridors. Given my experiences in Texas, I believe the strong state
leadership and commitment shown in many of these corridors will be one
of the keys to the success of these efforts. I will also want FRA to be
fully engaged with other parts of the Administration in developing the
right mix of federal policies and programs that will lead to beneficial
development.
safety
Question 1. Administrator Molotoris established the Safety
Assurance and Compliance Program (SACP) to address systemic safety
concerns in the railroad industry. Do you believe that this program has
been a success and do you plan on continuing to use it to address
safety issues? Please explain what role it would play.
Answer. I believe this program has helped foster a cooperative,
system-based safety approach to safety issues outside the typical realm
of regulation, and I am told most rail management and rail labor
officials believe the program has been successful. I agree with them,
and look forward to discussing improvements to the program they believe
will build upon these successes, should I be confirmed. SACP is one
tool available to the FRA as it works to improve rail safety, another
is enforcement focused on the issues that present the greatest risk to
the public, railroad workers and rail operations. Future progress in
increasing rail safety will depend on using all tools available, a
sound and effective safety inspection and enforcement program, as well
as programs that encourage meaningful safety partnerships.
Question 2. The last eight years have produced the lowest numbers
of fatalities in railroad history. What do you attribute this decline
to? How do you plan to further improve those numbers during your
tenure?
Answer. This decline has been due to hard work by the FRA, rail
management and rail labor in a concerted attempt to improve rail
safety. There are a number of factors at work, not the least of which
is the FRA's recent efforts to create cooperative approaches to rail
safety, such as the Safety and Compliance Program and the Rail Safety
Advisory Committee. The FRA also supports an ambitious research agenda,
much of which is aimed at new technologies and practices to make
railroads safer. Future actions will likely focus on addressing
fatigue-related accidents, improving track inspection and maintenance
practices and technologies, and testing and developing cost-effective
collision avoidance technologies.
While no rail passenger fatalities were reported in 2000, and the
24 railroad workers killed on the job was the lowest number ever, FRA
is working to reduce the number of citizens killed in highway-rail
crossing crashes or killed while trespassing on railroad property.
These incidents represent 95 percent of the rail-related deaths for
last year, and pose the greatest challenge in meeting the agency's GPRA
safety performance goals. In addition to working to assess the full
range of education and outreach programs aimed at reducing these
fatalities, I would also pursue a range of other initiatives, if
confirmed: Encourage states to use TEA-21 safety incentive grants
(Sections 1403 and 1404 of TEA-21) to augment grade crossing formula
funding; Work with states and railroads to complete work on grade
crossing protection projects in less time; Work with states and the
Congress to improve the accuracy of the National Highway-Rail Grade
Crossing inventory database; Encourage states to include rail-
pedestrian accident prevention in their state traffic safety plans;
Work with community leaders to develop more effective public service
campaigns and education programs to caution citizens about the dangers
of walking along increasingly busy, multiple track rail corridors.
Question 3. There have been concerns in recent years that the
accident reporting information is not accurate. How will you ensure
that data the FRA receives is verifiable?
Answer. Timely and accurate accident reporting is critical to the
FRA being able to achieve our GPRA goals by reducing accidents and
injuries. I understand FRA extensively revised their accident/incident
reporting regulations in 1997, and these rules require railroads to
maintain accurate reporting on accidents, incidents, injuries, and
occupational injuries. These rules also require a complaint procedure
for employees who believe they have been intimidated or harassed for
reporting an injury (these employees and their representatives can also
communicate this information directly to the FRA). If confirmed, I will
work with FRA staff as they continue to inspect and audit railroad
records to ensure their accuracy.
Question 4. For many years now, rail labor and management have not
agreed to the Department's proposals to reauthorize the federal
railroad safety program. As Administrator, what will you do to forge
the consensus that would accelerate the enactment of some improvements
to current law?
Answer. The authorization of appropriations for the Federal rail
safety program expired at the end of fiscal year 1998. Since then, the
program has functioned on the basis of annual appropriations and the
use of the significant rail safety regulatory powers that Congress has
already conferred on the Secretary of Transportation. The U.S.
Department of Transportation is hopeful that the program will be
reauthorized and is working to develop a reauthorization proposal. A
draft bill is currently in review in the executive branch. If
confirmed, I will make every effort to bring the parties together to
reach a consensus on rail safety reauthorization.
__________
Response to Written Questions Submitted by Hon. John McCain to
Jon Allan Rutter
amtrak
Question 1a. Since enactment of the Amtrak Reform and
Accountability Act of 1997, Amtrak has received nearly $4.5 billion in
federal assistance, yet its debt load has more than tripled over that
same period from about $1 billion to $3.3 billion. Further, Amtrak's
own data shows that almost all of its 41 routes operate at a loss, with
about 25 percent of those routes losing over $100 per passenger. One
route lost as much as $512 per passenger. What are your views on
Amtrak's current route structure?
Answer. Amtrak's current route structure is significantly similar
to the network created thirty years ago at Amtrak's inception. However,
without knowing more about the interrelationships among routes and how
they relate to the system's overall financial performance, I cannot yet
estimate the direct and indirect effects of changes to specific routes
or services. If confirmed, I would work to see that a more
sophisticated understanding of these complicated issues would be used
in developing a national passenger rail policy.
Question 1b. What is your understanding of how Amtrak chooses
routes and what role, if any, should the FRA play in route selection?
Answer. My understanding is that Amtrak has used a number of
methods, some less analytical than others, to determine which routes it
will serve. Amtrak's latest ``market-based network analysis''
methodology is not well known outside the company. But, for me, the
question of how routes are chosen, expanded or terminated should be
determined in large part by principles laid out in a national passenger
rail policy. In a recent speech before the National Press Club, Amtrak
President George Warrington talked about ``mission conflict'' saying
that it was unrealistic to expect Amtrak to meet a mandate to run a
national network and also to perform in a true commercial sense. He
called on Congress and the Administration to define the mission of
intercity passenger rail in this country and to align capital resources
with that mission. He stated that he believed the major questions for
such a rail policy should be (and I paraphrase): (1) What would a
national passenger rail system look like? (2) Should a national system
have routes that don't pay for themselves? (3) How much capital will be
provided to support this system, and where will it come from?
I agree that these questions begin the discussion of a national
passenger rail policy, although such a policy should address more
fundamental issues than routes. If confirmed, I would work with
Secretary Mineta, the Administration and interested members of Congress
to develop a policy that answers these three questions and much more.
Once that policy is developed, I would foresee that FRA would not
choose routes, but rather ensure that the passenger rail network is
consistent with the policy.
Question 2a. As you are likely aware, last week Amtrak executed a
transaction to mortgage a portion of New York's Penn Station in order
to secure a loan for $300 million. Apparently, Amtrak's financial
condition is so severe that without an emergency infusion of cash
provided by this deal, it would face immediate bankruptcy. More
troubling, I have recently learned this deal is one in series of
transactions over the last several years in which Amtrak has mortgaged
billions of dollars in assets to which the federal government holds a
lien. In each case, the federal government had to subordinate its lien
to enable the deal to go forward. It is my understanding that the
Federal Railroad Administration (FRA) was primarily responsible for
overseeing the federal government's interest in these deals. Can you
explain how you view the FRA's responsibility in such oversight
matters?
Answer. It is my understanding that the Secretary has delegated to
the Federal Railroad Administrator the responsibility for actions
associated with the mortgage and liens on Amtrak assets held by the
Department. Before acting, FRA assures that any proposed transaction is
consistent with the Secretary's views on the management of Amtrak's
assets, with the interests of American taxpayers and passenger rail
customers in mind.
Question 2b. If confirmed, what will you do to insure that the
American taxpayer's interest are fully protected? Please provide for
the Record a list of all financial transactions in which the Department
of Transportation has acted to subordinate its rights in regard to
Amtrak financial transactions.
Answer. To the best of my ability, I will carefully review Amtrak
transactions, particularly looking at whether such transactions
constrain future decisions of either the executive or legislative
branches about Amtrak. A list of such transactions is attached.
Question 2c. What will you do to increase the FRA's awareness of
Amtrak's current financial and operational situation and how will you
insure that future actions by Amtrak do not result in unanticipated
transportation disruptions?
Answer. If confirmed, I would assist Secretary Mineta as he
performs his fiduciary duties as a member of Amtrak's Board of
Directors. Passenger rail policy development will depend on an
understanding of Amtrak's current financial status, and we will be
working with Secretary's office to develop that information. I would
also expect that FRA staff will carefully monitor Amtrak's finances and
trends, so that the Secretary can anticipate the likely service
implications of Amtrak actions and act accordingly as a Board member.
Question 3. What is your understanding on whether Amtrak will meet
the statutory requirement that it operate free of federal assistance by
2003?
Answer. I concur with Secretary Mineta's assessment and that of the
DOT Inspector General, who have opined that Amtrak is unlikely to meet
those deadlines specified in the 1997 legislation. Amtrak's need to
conclude the Pennsylvania Station mortgage raises serious concerns
about the company's ability to meet its operating and capital needs.
Passenger rail service is a vital link in the American transportation
network, and this most recent fiscal crisis highlights the need to
identify structural reforms and develop solutions that improve its
long-term financial health. Formal consideration of what that rail
transportation network should be, what we can afford, the reforms that
may be necessary, and how they will be implemented should take place
soon, well in advance of the expiration of the current Amtrak
authorization.
Question 4. Given your previous employment as an advocate for High
Speed Rail, what actions do you intend to initiate in this area? Can we
expect you to be a strong advocate of federal involvement in High Speed
Rail development?
Answer. My prior experience in Texas involved implementing the
Texas Legislature's vision for a privately funded, constructed and
maintained high-speed rail system. If confirmed, I look forward to
leading FRA as it provides assistance to states that are planning
higher speed passenger rail service as part of their overall state
transportation planning mandated by TEA-21. My own involvement in high-
speed rail in Texas has given me first-hand knowledge of the practical
difficulties of implementing high-speed rail, and I would be able to
share those lessons with interested states.I
Question 5a. Amtrak and some of its supporters in Congress have
crafted a plan to provide Amtrak with $12 billion in bonding authority
that would be supported through a federal income tax credit for the
holders of the Amtrak-issued bonds. In light of Amtrak's financial
situation as I mentioned above, the Congress will be very interested in
the Administration's position concerning this proposal. Have you had an
opportunity to review the Amtrak bonding proposal, S. 250, and if so,
what are your views on the proposed legislation?
Answer. The Administration has not developed a position on
currently proposed legislation to provide federal financial assistance
for high-speed rail development, so I will defer any comments on this
legislation or on the appropriate role the federal government should
play in high-speed rail development.
Question 5b. In light of the recent disclosure of Amtrak's
financial problems, would you support the proposed bonding plan?
Answer. I see the question of capital financing tools as another
implementation issue that first depends on the development and
articulation of a national passenger rail policy. Once that policy is
developed, then alternatives can be examined for public financing of
capital expenses of passenger rail.
Question 5c. Based on your past experience as an advocate for high-
speed rail, can you tell us what improvements the American taxpayer
could expect to see if the proposed bonding plan were to become law?
How many miles of high speed rail can be built for $12 billion dollars?
Answer. I am not familiar with the precise details of S. 250, and
do not know how or where the funds raised through these bonds would be
expended. I know that states and regions are planning different types
of passenger rail service operating at different speeds, and that these
differences will affect the answers to your question. The answer on
miles per dollar depends upon, among other things, the trains chosen
and the speeds desired and permitted over a chosen infrastructure.
Question 5d. I am concerned that there has been little study or
reporting on the true cost of implementing high speed rail on a
national basis. Can we expect the Administration to conduct a cost
assessment on high speed rail?
Answer. In 1997, FRA produced a report to Congress assessing the
commercial feasibility of high-speed ground transportation. A copy of
the report is available at http://www.fra.dot.gov/doc/hsgt/cfs/
index.htm.
Question 6. In 2000, there were 928 deaths attributable to rail
operations, of which approximately 50 percent were trespasser-related
and more than 40 percent occurred at highway rail grade crossings. What
actions will you initiate to help reduce rail fatalities?
Answer. If confirmed, I will work with the FRA staff to assess the
full range of safety education and outreach programs. I would also like
to explore the feasibility of other initiatives, such as: Encourage
states to use TEA-21 safety incentive grants (Sections 1403 and 1404 of
TEA-21) to augment grade crossing formula funding; Work with states and
railroads to complete work on grade crossing protection projects in
less time. Work with states and the Congress to improve the accuracy of
the National Highway-Rail Grade Crossing inventory database; Encourage
states to include rail-pedestrian accident prevention in their state
traffic safety plans; Work with community leaders to develop more
effective public service campaigns and education programs to caution
citizens about the dangers of walking along increasingly busy, multiple
track rail corridors.
freight railroads
Question 1a. In recent testimony before this Committee, the
Chairman of two of our nation's largest freight railroads stated that
in some cases, recent mergers have led to increased competition that
has resulted in smaller profit margins. In follow up discussions with
Committee staff, representatives of one of the railroads stated that as
a result of the smaller profit margins, they will have to seriously cut
back on capital investment and possibly cut shorter small volume routes
in order to maximize earnings. One possible alternative suggested to
avert service disruptions was to provide increased federal funding for
public-private partnerships to support and build railroad
infrastructure. What are your views on such partnerships?
Answer. There are a number of examples of such partnerships
providing public benefits as well as expanding freight rail capacity:
Oregon-Washington passenger rail service was improved by public
investment in stations, grade crossing improvements and private
expansion of freight rail lines. This resulted in higher frequency,
higher speed passenger rail service, and more reliable, higher-speed
freight service; The Alameda Rail Corridor is an example of providing
safety and environmental benefits for the public and speeding freight
operations for the railroads; The Alliance development in Fort Worth,
Texas combines public investment in a cargo airport and ground
transportation infrastructure with private investments in rail
intermodal facilities to attract hundreds of businesses and thousands
of jobs based on these transportation facilities.
Question 1b. Do you support public financing of railroad
infrastructure?
Answer. Most of the railroads considering partnerships with public
investment seem to be aiming at including rail investment provisions in
the successor legislation to TEA-21. If confirmed, I would work with
the Secretary and the Administration to consider these kinds of multi-
modal transportation investments with public benefits as surface
transportation reauthorization legislation is developed within the
Department.
Question 1c. Should railroads be allowed limited immunity to
discuss rates in order to set them at a level sufficient to cover their
cost of capital?
Answer. I am concerned about the ability of freight railroads to
attract sufficient capital. This affects the ability of railroads to
provide better service to customers, to expand their infrastructure to
move customers' freight, to make necessary maintenance investments to
operate safely, and to provide good paying jobs to hundreds of
thousands of Americans who either work for the railroads or work for
companies that depend on the railroads. However, collective ratemaking
may not be the most effective means of addressing the capital shortfall
issue, particularly in a marketplace concerned with carrier
competition.
surface transportation board
Question 1. What are your views regarding the role of the Surface
Transportation Board and what type of relationship do you hope to
establish between the FRA and the Board?
Answer. The FRA and STB have duties assigned to them by Congress by
law. If confirmed, I would work closely with STB members to understand
their views on the railroad industry (to the extent possible under ex
parte rules) and to advise on safety implications of STB decisions.
Question 2. What are your views on the STB's new railroad merger
rules?
Answer. I have not had time to thoroughly examine the full
decision, but am encouraged about the following aspects of the rules:
Requirement for integrated safety plans for post-merger operations;
More detailed planning for post-merger service, so that past merger
service problems do not occur; Consideration of future effects of a
particular merger.
Question 3. What is your general philosophy concerning the proper
role for the FRA in regard to addressing concerns raised by captive
rail shippers?
Answer. Many captive rail shipper issues deal with economic
regulations of the Surface Transportation Board, and statutory remedies
granted to the STB by Congress. The FRA is the principal advisor to the
Secretary on issues related to railroad economics, including rates,
service and infrastructure capacity and condition. The proper role for
FRA regarding the concerns of captive shippers is to develop
recommendations to the Secretary for DOT's position in relevant STB
proceedings and on proposed changes in law.
______
Attachment
Amtrak Transactions Requiring FRA Subordination/Release
Amtrak has undertaken a number of actions requiring FRA to
subordinate or release the Department's rights under the Amtrak lien.
These actions can be viewed as falling into three general categories:
Actions to permit Amtrak to mortgage existing Amtrak
assets to raise cash for operating needs.
Actions to permit Amtrak to mortgage existing Amtrak
assets to raise cash to make capital improvements to these or other
assets and, hence, increase the assets' ability to meet Amtrak's
service needs.
Actions to permit Amtrak to acquire new equipment. These
represent the large majority of transactions involving subordinations/
releases by FRA and are necessitated by the ``after acquired'' clause
in the lien. That clause extends the lien to any equipment acquired by
Amtrak. The equipment proposed for acquisition had never been
encumbered by the Department's lien and potential lenders required as a
condition of the financing that they have the first lien on the
equipment. But for FRA's subordination/release of the lien on this new
equipment, Amtrak would never have had access to it--indeed it would
never had been built in the first place.
------------------------------------------------------------------------
Dollar value [In
Transactions Date millions of dollars]
------------------------------------------------------------------------
Transactions that permitted
Amtrak to raise cash from
existing assets for
operating needs:
Certain rights at Penn June 2001....... $300,000,000
Station, NYC.
Transactions that permitted
Amtrak to raise cash from
existing assets for capital
investment:
30th Street Station December 1987... 30,000,000
Philadelphia.
624 Superliner 1 and Dec. 99-Aug. 00. 928,000,000
Amfleet 1 (four
transactions)*.
10 AEM-7 electric Oct. 00-Apr. 01. 40,000,000
locomotives (two
transactions).
Subordination/Release to
permit acquisition of new
assets:
7 AEM-7 locomotives...... December 1988... 25,777,800
103 Horizon passenger September 1989.. 108,150,462
cars.
70 Thrall material June 1990....... 22,197,000
handling cars.
9 F40 locomotives........ June 1990....... 16,200,000
18 GE Dash 8 locomotives. June 1990....... 31,872,604
Emeryville, CA lease..... August 1993..... 1,248,000
43 GE 8-40 locomotives (4 Sept 93-Dec. 93. 111,800,000
transactions).
Chicago Union Station December 1993... 20,000,000
garage.
83 Superliners passenger Mar 94-Dec. 94.. 159,790,709
cars (12 transactions).
10 GE dual mode December 1995... 34,159,605
locomotives.
98 GE P42 locomotives (6 Sept 96-Jun 97.. 254,800,000
transactions).
8 GE dual mode March 1997...... 32,000,000
locomotives.
22 GE P42 locomotives (2 Jun 97-Oct 97... 57,200,000
transactions).
50 remanufactured November 1997... 3,802,700
Greenbrier MHCs.
200 materials handling November 1997... 16,681,400
cars.
National Operations November 1997... 6,833,000
Center.
50 Viewliners low level December 1997... 96,534,529
sleeping cars.
Acela high-speed trainset December 1997... 120,000,000
maintenance facilities.
21 EMD (GM) F59 Aug 98-Nov 98... 47,210,034
locomotives (2
transactions).
8 Alsthom Surfliner Sep 00-Mar 01... 106,000,000
trainsets (3
transactions).
Bombardier/Alsthom Acela Nov 00-May 01... 400,064,800
equipment (11
transactions) 10
trainsets, 11 high
horsepower locomotives.
30 GE P42 locomotives (2 Dec 00-Mar 01... 78,000,000
transactions).
------------------------------------------------------------------------
* Frequently, large orders of equipment are divided into several
transactions. This is because the financing commitment, and hence the
need for FRA's subordination/release, occurs when equipment is
accepted by Amtrak.
__________
Response to Written Questions Submitted by Hon. Ernest F. Hollings to
Kirk K. Van Tine
rulemaking
Question 1. According to the DOT Inspector General, it takes on
average 3.8 years to complete aviation rulemakings. How will you seek
to expedite key safety regulations?
Answer. First, if confirmed, I will make the timely completion of
key safety regulations one of my highest priorities, and will
communicate that priority to the senior officials of the operating
administrations. Second, I will personally review the status of
rulemakings that are significantly behind schedule and make every
effort to ensure their completion in a timely manner. In addition, it
is my understanding that the Department has already taken a number of
steps to help expedite rulemakings. For example, language has been
added to the Department's Strategic Plan and the FY 2001 Performance
Plan to stress the need to complete rulemaking actions in a timely
manner. The heads of rulemaking agencies or offices will be expected to
make rulemaking a priority and establish schedules for each important
step for their significant rulemakings. All of the significant
rulemakings will be tracked as part of a Department-wide tracking
system that the General Counsel's Office is developing. The tracking
system should help to identify unreasonable delays in specific
rulemakings as well as general problems in the process, so that
remedial steps can be taken. The General Counsel's Office has also
developed a training course on the rulemaking process, which will
stress the importance of completing the process in a timely manner, and
attendance by new political appointees has been required. Finally, the
Department will continue to explore new and innovative ways to improve
its rulemaking process. The Department's internet-accessible rulemaking
docket is but one example of its efforts in this regard.
Question 2. The coordination process for rulemakings requires each
of the modal administrations to draft rules, submit them to the General
Counsel's office for coordination and solicitation of views of other
offices and modes. All too often other offices and modes do not place a
priority on the process, despite the efforts of the General Counsel's
Office. What changes do you believe are needed to ensure that other
offices place a high priority on critical rulemakings?
Answer. The personal attention of the General Counsel and, where
necessary, of the Deputy Secretary, combined with the tracking system
described in the answer to the prior question will help ensure that
other offices and modes give the proper priority to the clearance of
critical rulemakings.
Question 3. The Office of Management and Budget also reviews DOT
rulemakings. OMB does not have statutory time constraints on its
review. Would such limits aid in having critical rulemakings issued?
Should critical safety rules be exempted from OMB review? Can you
detail the types of changes the OMB has sought in rulemakings and
determine if they have made substantive changes to the various
significant FAA safety rules?
Answer. If confirmed, I believe it will be important for me to
continue the critical role of the General Counsel in dealing with OMB.
I believe that responsible senior officials should be able to ensure
that the deadlines established in Executive Order 12866 are met. I do
not believe that statutory time constraints are necessary.
Exemptions are not necessary for critical safety rules. E.O. 12866
already provides exceptions for emergency situations or legal time
constraints. OMB returns rules with which it has concerns for further
consideration by the agency. Generally those concerns involve such
things as the assumptions made or the methodologies used in economic
analyses. OMB also will often question why other alternatives were not
considered appropriate.
Question 4a. Under the Wendell H. Ford Aviation Investment and
Reform Act, Congress mandated that the FAA establish an Aircraft Repair
and Maintenance Advisory Panel. Can you tell us the status of this
panel? Should the time for the panel's work be extended past the
December 31, 2001 deadline? Have they begun to meet the challenges
mandated in Section 734 delineating their responsibilities?
Answer. The FAA Aircraft Repair and Maintenance Advisory Committee
has been established and is meeting monthly through the end of the
year. However, due to the length of time required to establish the
committee under the Federal Advisory Committee Act, the first meeting
did not occur until June 12, 2001.
The Committee has determined that its work centers on determining
the amount and type of work performed by aircraft repair facilities,
then providing recommendations to the Secretary in four areas: ``work
performed,'' ``staffing needs,'' ``balance of trade issues,'' and
``safety issues.''
The general sense of the Committee is that it will be impossible to
complete all its work properly by December 31, 2001.
Question 4b. The FAA drafted, and had approved by DOT and OMB, a
rule concerning foreign Repair Stations. The rule, however, was never
issued. Can you tell us when the entire rule will be published? Can you
also provide for the Committee the views of OMB on the rule to
illuminate why the rule has not yet been issued?
Answer. The FAA rulemaking action on repair stations had been
submitted to OMB and objections had been raised by other agencies
before the change in Administrations. It was still pending at OMB at
the time of the change. In accordance with directives issued by the new
Administration applying to all pending rulemakings, this rule was
withdrawn from OMB and re-reviewed within the Department to determine
whether changes were appropriate. The rule was re-submitted to OMB on
July 2. I understand that DOT does not yet know OMB's views.
Question 5. The FAA and DOT recently issued a request for comments
on congestion pricing options for LaGuardia's airport. While the notice
specifically acknowledges that ``grant-funded airports be available for
public use on fair and reasonable terms and without unjust
discrimination could continue to make it difficult for airports to
design workable market-based pricing regimes'' and also notes that
Federal laws ``may restrict'' pricing options, nowhere does the
document categorically state that airports are preempted from
interfering with routes, rates and service under the Airline
Deregulation Act, and that efforts to use price to affect such items
would be specifically preempted. What role will you play in reviewing
the comments and views on this matter? While existing law is clear,
will the General Counsel state that airports are preempted from
deploying such pricing schemes?
Answer. If confirmed as General Counsel, I will work closely with
the FAA on identifying those options that represent the best public
policy solutions for controlling congestion at LaGuardia. We will then
address whether they may be implemented in accordance with existing
legal and international requirements or whether changes might be
advisable.
While Federal law is clear that a State or airport owner may not
enact or enforce laws related to air carrier rates, routes, or
services, this prohibition does not limit a State or an airport from
carrying out its proprietary powers and rights. 49 U.S.C. 47173(b)(1)
and (3). An airport operator, therefore, may impose fees, terms and
conditions on air carriers that are reasonable, nonarbitrary,
nondiscriminatory, intended to advance a local interest, and that do
not impose an undue burden on interstate commerce. 49 U.S.C. 41713(b).
It is possible that a properly structured peak pricing program whose
objective is to align the number of aircraft operations with airport
capacity could be reasonable and not unjustly discriminatory under 49
U.S.C. 47107(a)(1) and 47129 as well as under the U.S. international
air services obligations and the International Civil Aviation
Organization's policies.
However, the Department has the legal authority and obligation to
review and carefully consider such programs, and I would ensure that
the Department exercises that authority with respect to any plan. As
stated in its June 12 Federal Register notice on LaGuardia options,
[T]he FAA does not propose nor endorse the Port Authority's
options at this time. Federal laws, regulations, and U.S.
international obligations presently in place may, in fact,
prevent PANYNJ from imposing these proposals. In this notice we
seek suggestions on effective, comprehensive solutions that
represent the best public policy for controlling congestion and
allocating operating rights at LGA, and we will consider
pertinent legal issues in any policy options ultimately put
forward for adoption. 66 FR 31736.
I will ensure that, if confirmed as General Counsel, the
Department's actions on this matter are based on sound legal analysis.
Question 6. Recently Secretary Mineta indicated that the
Performance Based Organization work should be stopped until a Chief
Operating Officer is selected. Disputes over what offices should be
included in the PBO continue. The ATC system is at its basic function a
safety responsibility of the Federal government, as former President
Clinton indicated in forming the PBO, specifically recognizing the
inherently Governmental nature of the ATC system. Can you tell us the
status of the hiring of the COO?
Answer. It is possible that there may be some confusion about the
Performance Based Organization (PBO) due to media reports. It is my
understanding the FAA's work on establishing the air traffic PBO is
ongoing and has not been delayed because of the search to fill the
position of the Chief Operating Officer (COO). With respect to that
selection effort, I am told the FAA has contracted with an executive
recruiting firm to conduct the search for the COO. Internal and
external sources are being canvassed to identify potential candidates
for the position. Several potential candidates have already been
identified and they are being approached to determine their interest in
the position. The Administrator will conduct interviews and Secretary
Mineta will be involved in approving the final selection of the COO.
Question 7a. Many members of this Committee have called for action
on a number of Department of Transportation regulatory initiatives.
Unfortunately, many new or revised rules have never been acted and have
dragged on too long. Below are questions on a few of those regulatory
issues. When can we expect completion of a final rule requiring the
safety certification of small airports?
Answer. The agency expects to issue the final rule not later than
November 3, 2001. Issuance by that date will ensure that the FAA
complies with requirements of the Wendell H. Ford Aviation Investment
and Reform Act of the 21st Century. Among other things, the Act
requires issuance of the rule within one year of the close of comment
period on the Notice of Proposed Rulemaking.
Question 7b. What is the status of requiring the deployment of
collision avoidance technology on all-cargo aircraft?
Answer. The document is currently in executive level coordination
and should be issued sometime this summer.
Question 8. The safety of Mexico-domiciled cross-border truck and
bus operators is a growing concern in this Congress. Please explain how
the Department intends to address the myriad unresolved safety issues
associated with opening our border to Mexican carriers. This is
especially important to the Committee in light of recent criticism
directed at Federal Motor Carrier Safety Administration proposals.
Also regarding cross-border transportation, is there a Memorandum
of Understanding between the DOT and the Department of Labor to ensure
that all Mexico-domiciled truck and bus carriers also comply with all
U.S. federal labor requirements?
Please provide the Committee with a list of all the DOT and DOL
regulations that must be complied with by Mexico domiciled truck and
bus carriers. Also provide the Committee with a status report on
regulatory harmonization talks between the United States and Mexico.
Specifically, include the status of those discussions concerning
commercial drivers licenses, hours of service, computerized tracking of
driver records, environmental regulations, vehicle inspections, driver
training, drug and alcohol testing and insurance.
Answer. I understand that the Department is developing a
comprehensive plan to ensure that the NAFTA cross-border provisions are
implemented effectively and on time without compromising highway
safety. To guide the development and implementation of the plan, the
Federal Motor Carrier Safety Administration (FMCSA) has established
several teams to identify and implement the various near- and long-term
program activities necessary to fully integrate Mexican operations into
our operating, safety, and enforcement programs. The activities
encompassed within the plan include very specific screening and
monitoring procedures to ensure safe carrier, vehicle and driver
operations in the U.S. The Department's plan continues to be refined as
it analyzes comments on rules that have been proposed and circulated
for public comment. I believe the Department recognizes that this is a
matter of great concern to Congress, and it intends to work in the
weeks and months ahead to assure that implementation can take place
while fully addressing any existing safety concerns.
Mexican trucks and drivers operating in the United States must
comply with the full range of Federal and State safety and operating
requirements applicable to U.S. carriers. These include requirements
concerning driver qualifications; vehicle inspection, maintenance and
repair; driver hours of service; drug and alcohol testing; and
insurance. Mexican carriers operating in the U.S. must maintain
insurance on file with the FMCSA. The companies providing insurance
must be licensed or admitted to issue bonds or underlying insurance
policies in a U.S. State.
The North America Free Trade Agreement (NAFTA) assures a high level
of safety in land transportation by encouraging the upward
harmonization of the safety standards in effect in all three countries.
Harmonization of motor carrier safety standards between the United
States and Canada and the United States and Mexico is an ongoing
process that pre-dates the NAFTA. The United States and Canada have
worked through the U.S.-Canada Motor Carrier Consultative Mechanism,
established in 1982. The United States and Mexico have cooperated
through the U.S.-Mexico Transportation Working Group, established in
1989. A major accomplishment of these efforts is the establishment of a
memorandum of understanding (MOU) between the United States and Mexico
on the mutual recognition of commercial driver's licenses. The MOU
ensures that drivers of trucks and buses from both countries have
comparable safety and operating knowledge and skills and do not have
more than one license. The United States has a similar reciprocity
agreement with Canada.
The U.S.-Mexico Transportation Working Group, with Canadian
participation already occurring on as-needed bases, evolved into the
Land Transportation Standards Subcommittee (LTSS) established in the
NAFTA to attempt to make the safety regulations of all three countries
as compatible as possible. The NAFTA established working groups to
address vehicle and driver standards, vehicle weights and dimensions,
traffic control devices, rail safety, and transportation of hazardous
materials. To address issues not specifically assigned to the LTSS by
NAFTA, the three NAFTA parties have created a related group, the
Transportation Consultative Group (TCG). This group (comprised of five
separate working groups) has been working in cooperation with the LTSS
to address issues related to cross-border facilitation, rail
operations, electronic data exchange, application and exchange of
information on advanced technologies and maritime and port policies.
The majority of the discussions related to commercial motor vehicle
safety regulations and programs fall under LTSS #1, Commercial Motor
Vehicle and Driver Standards and Motor Carrier Compliance, and TCG #3,
Automated Data Exchange. As part of the work accomplished under LTSS
#1, the three countries reached agreement in the following areas
critical to our mutual efforts to ensure cross border safety:
1. Vehicle and driver safety. To adopt the out-of-service criteria
promulgated by the Commercial Vehicle Safety Alliance as the minimum
level of mechanical fitness to be sustained by all commercial vehicles
engaged in interstate or foreign commerce.
2. Age. To establish 21 years of age as the threshold requirement
to operate a commercial motor vehicle in international commerce among
the NAFTA countries.
3. Language. In recognition of three countries language differences
it is the responsibility of the driver and the motor carrier to be able
to communicate in the country in which the driver/carrier is operating
so that safety is not compromised, and
4. Information systems. To develop and implement an electronic
exchange of commercial driver information commencing initially with
driver status, with the ultimate objective of including conviction
information and driver records.
The harmonization efforts have resulted in major improvements to
Mexico's commercial motor vehicle compliance and enforcement program.
Mexico has trained inspectors and instructors in U.S. safety inspection
techniques; developed electronic safety databases to help monitor the
safety compliance of carriers and drivers and facilitate exchange of
safety information between Mexico and the United States; and published
regulations that establish safety, operating, and logbook requirements
for carriers and drivers.
As a member of the Commercial Vehicle Safety Alliance (CVSA),
Mexico has adopted inspection procedures similar to procedures that
will be used to inspect Mexican vehicles while they are in the United
States. Mexico will enforce them with respect to Mexican and U.S. motor
carriers operating south of the border and help ensure that the
majority of vehicles and drivers are in compliance with the safety
standards even before they reach the border.
Mexico has developed a comprehensive safety information system to
monitor the compliance of its commercial carriers, vehicles, and
drivers. The FMCSA has provided technical assistance in the design,
development and implementation of these systems, in part, to ensure
that they are comparable to U.S. systems and U.S. enforcement personnel
have access to license, registration, and safety performance
information on carriers and drivers that operate or plan to operate in
the U.S. These systems include a driver's license module containing a
centralized database of all Licencia Federal holders that includes
license class and status information, driver identification data, and
medical examination information; a centralized registration database of
carriers and vehicles that contains carrier and vehicle identification
and Mexican operating authority information; and a centralized safety
performance database that includes information on vehicle inspections,
carrier compliance reviews, convictions, and accident reports.
Currently, U.S. enforcement personnel have on-line access to the
driver's license and carrier and vehicle registration databases. Access
to the safety performance information should be available by August
2001.
I am told that there is no DOT-Labor Department (DOL) Memorandum of
Understanding on NAFTA's implementation. Rather, DOL administers
Federal labor laws that apply to foreign commercial vehicle operators
and their helpers who work in U.S. territory. Important statutes that
directly apply to these persons include the Fair Labor Standards Act 29
U.S.C. 201 et seq., the Occupational Safety and Health Act of 1970 29
U.S.C. 651 et seq., and the whistleblower provision of the Surface
Transportation Assistance Act of 1982, 49 U.S.C. 31105.
DOL applies the minimum wage (which currently requires wages of
$5.15 per hour) and child labor provisions of the Fair Labor Standards
Act to foreign truck drivers and their helpers working in the United
States for a substantial period of time. Wages for all hours worked
must be paid free and clear of impermissible deductions or expenses for
the costs of operating the truck or traveling on the road. The child
labor provisions restrict persons under age 18 from working as drivers
or helpers on trucks. The U.S. Department of Transportation (DOT)
regulates hours of service and age requirements for commercial drivers.
The Occupational Safety and Health Act (OSHA) applies to the
working conditions of foreign truck drivers when they are in the United
States. In general, OSHA requirements apply only to smaller trucks,
since DOT administers laws with respect to the safety of commercial
motor vehicles (which include vehicles with a gross vehicle weight
rating exceeding 10,001 pounds). OSHA's hazardous materials
requirements apply to any vehicle designed to transport hazardous
materials that require placarding under DOT regulations.
The whistleblower provision of the Surface Transportation
Assistance Act (STAA) prohibits retaliatory discharge or other
discrimination against drivers of commercial motor vehicles, and other
employees whose work affects the safety of such vehicles, because they
complain about unsafe vehicles, testify in proceedings related to
safety violations, or refuse to drive in violation of safety
regulations or when conditions create a reasonable apprehension of
serious injury.
While there is no formal Memorandum of Understanding between DOT
and DOL regarding Mexican carrier compliance with U.S. labor laws, I
understand that the two departments are working cooperatively on this
important issue. For example, in a Notice of Proposed Rulemaking
published on May 3, 2001, DOT proposes to require Mexican motor
carriers to certify on their applications that they will provide
information requested by DOL within 72 hours of the request. The
Department will continue to work with DOL, and consider the possibility
of a formal arrangement if necessary.
Question 9. Rail safety reauthorization has been stalled in the
last several years. Please update the Committee on the Department's
work to address rail safety issues such as: harassment and intimidation
against workers who report safety problems and violations; improving
accident and incident reporting systems; fatigue management; employee
training and certification; and increased inspector staffing.
Answer. Based on limited exposure to the activities of the
Department's Federal Railroad Administration (FRA), I can provide some
information about the rail safety issues you raise. To prevent
harassment and intimidation of employees for reporting safety hazards,
FRA actively employs the partnership methodology of the Safety
Assurance and Compliance Program (SACP) in an effort to foster a
positive safety culture in the railroad environment. These efforts are
intended to encourage the free flow of information within the railroad
to ensure proper attention to safety problems.
I am told that, to improve accident and incident reporting systems,
a working group of FRA's Railroad Safety Advisory Committee (RSAC) is
preparing a draft of a proposed rule to conform FRA's accident
reporting regulations (49 CFR Part 225) to revised regulations of the
Occupational Safety and Health Administration. The working group will
also recommend appropriate revisions to the FRA Guide for Preparing
Accident/Incident Reports. Furthermore, FRA routinely audits railroad
accident and injury records, reports, and procedures. In some cases,
the agency has cited a railroad for hundreds of thousands of dollars in
penalties for failure to report accidents and injuries properly.
To deal with the fatigue of safety-sensitive employees, FRA is
utilizing SACP to encourage cooperative efforts on specific railroads,
exchanging information on best practices through the North American
Rail Alertness Partnership, and funding related research and
development projects. Still, the National Transportation Safety Board
has estimated that fatigue may be a contributing factor in nearly one-
third of all accidents caused by human factors. It may be that the rail
industry's voluntary efforts to manage fatigue have not been fully
successful.
To deal with employee training and certification issues, I
understand that FRA is enforcing existing regulations, such as 49 CFR
Part 240 on locomotive engineer certification, and FRA has incorporated
additional training requirements not yet in effect in (i) the Passenger
Train Emergency Preparedness rules issued in 1998, (ii) the Passenger
Equipment Safety Standards published in 1999, and (iii) the revised
power brake standards for freight and other non-passenger service that
were published January 17, 2001. In addition, FRA regularly monitors
railroads' training and testing on their operating rules. Also, the
issue of training for safety-sensitive railroad workers is being
debated in the RSAC. FRA is considering the merits of initiating a
rulemaking in that area.
As for increased inspector staffing, I understand that the
Department is seeking 12 additional rail safety inspector positions in
its Fiscal Year 2002 budget. FRA must intensify railroad inspection
efforts in order to reverse the trend of increasing train accident
rates. The additional field inspector positions will primarily support
FRA's track safety program, with a particular focus on rail lines that
carry high passenger traffic. Furthermore, the General Accounting
Office (GAO) has called on FRA to increase the number of site-specific
railroad inspections. In a report entitled, Rail Transportation:
Federal Railroad Administration's New Approach to Railroad Safety (GAO/
RCED-97-142), GAO urged FRA to assign additional resources to railroad
bridge integrity, standards for new railroad control and high-speed
technology, and efforts to reduce levels of railroad employee workplace
injuries. If FRA receives the additional inspector positions, FRA will
have a greater ability to address the growing track safety problem and
meet some of GAO's additional expectations.
Question 10. The future of Amtrak is obviously a major concern to
this Committee. Not a single passenger rail system in the world can
operate without some form of public financing. What are your thoughts
on ensuring that we maintain a national passenger railroad that is
adequately financed and able to keep up with growing capital needs?
Also, what are your thoughts on the pending Amtrak bonding legislation?
Answer. I agree with Secretary Mineta's assessment and that of the
DOT Inspector General, who has stated that Amtrak is unlikely to meet
the deadlines for self-sufficiency specified in 1997 legislation.
Amtrak's need to conclude the recent Pennsylvania Station mortgage
raises serious concerns about the company's ability to meet its
operating and capital needs. Passenger rail service is a vital link in
the American transportation network, and the Pennsylvania Station
mortgage incident highlights the need to identify structural reforms
and develop solutions that improve its long-term financial health.
Formal consideration of what that rail transportation network should
be, what we can afford, the reforms that may be necessary, and how they
will be implemented should take place soon, well in advance of the
expiration of the current Amtrak authorization. As for the pending
Amtrak bonding legislation (S. 250), the Administration has not
developed a position on currently proposed legislation to provide
federal financial assistance for high-speed rail development, so I must
defer any comments on this legislation or on the appropriate role the
federal government should play in high-speed rail development. My view
is that the question of capital financing tools is just one more
implementation issue that first depends on the development and
articulation of a national passenger rail policy. Once that policy is
developed, then alternatives can be examined for public financing of
capital expenses of passenger rail.
Question 11. We continue to be concerned with the safety of
commercial passenger vans carrying 15 or more passengers. A rulemaking
is still pending before the Department as mandated by TEA-21. When will
a Final Rule be completed and published?
Answer. I am told that the Department expects that a final rule
will be issued in the Fall of 2001. A Notice of Proposed Rulemaking was
published January 11, 2001, with comments due April 11. The Federal
Motor Carrier Safety Administration received 25 comments to review.
Question 12. There is an ongoing effort by the DOT and the
Department of Labor to ensure the safety of flight attendants. In fact,
last year a Memorandum of Understanding was signed committing the two
agencies to identify and apply, as appropriate, Labor Department (OSHA)
requirements to the flight attendant workplace. The first phase of this
joint effort was completed last December. Please update the Committee
on when this initiative will be completed.
Answer. Current activity involves the FAA and the Department of
Labor holding joint meetings. The Department of Labor's continuing
input forms an important part of the process. Another step is the
review of the final document by general counsel of both agencies. The
report is due December 2001.
Question 13. Section 725 of AIR-21 required a study on cabin air
quality to be initiated within 60 days of enactment (April 5, 2000).
What is the status of this study?
Answer. The cabin air quality study was initiated within 60 days of
the enactment of the AIR-21 legislation, as required by section 725.
The study is nearing completion, with the final report due by September
25, 2001.
__________
Response to Written Questions Submitted by Hon. John McCain to
Kirk K. Van Tine
surface
Question 1. As you know, the Administration has announced its
intention to fulfill the cross-border traffic requirements of NAFTA and
will open the Border by the end of the year. What is the Department
doing to prepare for the anticipated opening of the border? Will the
Administration submit a proposal to Congress to authorize additional
funding for border-related activities or seek other related authority?
Answer. I am aware that the Federal Motor Carrier Safety
Administration has prepared a comprehensive plan to ensure that the
NAFTA cross-border provisions are implemented safely and on time. The
plan sets forth specific screening and monitoring procedures to ensure
that Mexican vehicles and drivers comply with Federal Motor Carrier
Safety Regulations when they operate in the U.S. The Administration has
sought a significant increase in resources for FY2002 activities to
prepare for the safe entry of cross-border commercial traffic.
Some of the major program strategies, activities, and milestones
planned or undertaken to prepare for the opening of the Southern border
to commercial traffic follow:
1. Rulemaking. On May 3, 2001, DOT proposed regulations governing
the application process for Mexican-domiciled carriers that wish to
operate in the U.S. and the process by which DOT will review the safety
records of carriers during the first 18 months of their U.S.
operations. The new requirements will ensure that carriers understand
and are able to comply with U.S. requirements. Final regulations will
be published by November 2001.
2. Resources. To support comprehensive State and Federal safety
enforcement activities at the Southern border, the Department requested
$88.2 million in additional funds in its FY 2002 budget. The request
includes $13.9 million to hire 85 additional Federal staff to perform
safety inspections and conduct safety audits of Mexican carriers. The
Department also requested $54 million to provide the Federal share for
the construction and improvement of State commercial vehicle inspection
facilities. Currently 23 border crossings with truck traffic do not
have permanent inspection facilities. In addition, the Department
requested $2.3 million for immediate construction of areas to park
commercial vehicles placed out-of-service for safety violations. The
Department is also proposing that an additional $18 million be made
available to support the staffing of State facilities and increase
State motor carrier border inspection activities. All Federal
enforcement personnel will be hired and trained by December 2001.
3. Education and Outreach. The FMCSA, in concert with the border
States, will be conducting a series of safety compliance seminars to
educate Mexican carriers and drivers on compliance with Federal and
State regulations. The seminars will include a detailed explanation of
new application requirements. These seminars will supplement ongoing
efforts to translate and distribute educational materials to Mexican
carriers and drivers. The seminars will be conducted from August to
November 2001.
4. Application Processing Procedures. Procedures are being
developed to ensure that all applications are evaluated thoroughly,
accurately, and consistently, and that only qualified carriers are
approved to operate. Procedures will be developed by September 2001. An
application-processing center will also be established by September
2001.
5. Safety Audit Procedures. To ensure Mexican carriers operate
safely, the FMCSA rulemaking requires that an audit of each carrier's
safety performance be conducted. Within 18 months of receiving
authority, all Mexican carriers must submit to a safety audit by
providing records to a Federal safety investigator and participating in
a thorough review of their operating procedures. Procedures for
conducting the review will be in place by August 2001.
6. Safety Databases. The FMCSA will focus on improving the safety
information systems available to Federal and State enforcement
officials in order to verify application information directly with
Mexican transportation officials, automate the review of applications,
provide real-time safety performance and other data to Federal and
State inspectors and effectively monitor the safety performance of
Mexican motor carriers operating in the United States. All inspectors
will have access to available U.S. and Mexican driver licensing,
carrier, and other safety databases by January 1, 2002.
7. NAFTA Coordination. The Department of Transportation will
continue to work with Mexico to increase regulatory compatibility
between our countries, establish cooperative agreements on the exchange
of safety information, and provide technical assistance to build
compatible compliance and enforcement programs in Mexico. The adoption
and implementation of comparable programs in Mexico will provide
greater assurance that vehicles entering the U.S. are already in
compliance with safety standards.
Question 2. The astronomical costs of transportation projects
should be a top concern to the Department. The cost overruns associated
with the Boston Central Artery Tunnel Project have risen to over $14
billion, and those costs will likely continue to rise before the
project is completed. The Big Dig project must serve as an example for
all of us on the critical importance of federal oversight of federally
funded transportation projects.
In addition to the Big Dig, the DOT is overseeing 41 other
megaprojects. What actions will you take to ensure greater federal
oversight on all federally-funded transportation projects--from
airports to shipyards to highway projects?
Answer. I believe it is critical that the Department be a careful
steward of federal funds. Recipients of DOT funds and DOT internal
managers must be held accountable for meeting cost and schedule goals.
Since projects will not always proceed as planned, the Department
should have early warning of problems with these large projects and
should play an active role in developing solutions for those problems.
I understand that the Department created a Task Force to strengthen
the oversight process and that several recommendations have been
developed regarding improvements in the quality of the oversight
process and selection of the managers who perform the oversight. If
confirmed, I would expect to work with other members of Secretary
Mineta's management team to ensure that DOT oversight is strengthened.
Several of the operating administrations within DOT have processes
in place to oversee additional infrastructure projects that are not
categorized as mega-projects. Strengthening the process for mega-
projects will also serve as a model for strengthening the oversight of
these smaller projects.
administrative
Question 3. Over the last several years, it has become apparent
that it is difficult, at best, to get reports and regulations cleared
for release by DOT. Reports to Congress are regularly late and
regulations are often held up for months as they make there way through
the various agencies within DOT. Apparently even DOT agencies that have
no role in the development, oversight, or enforcement of regulations
are routinely required to review and sign off on regulations and
reports before clearance. (a) What action would you take to improve
interagency communication and cooperation within DOT and streamline the
review process for regulations and reports? (b) What will you do to
help ensure that reports to Congress are completed and submitted in a
timely manner?
Answer. Secretary Mineta has committed the Department to moving as
expeditiously as possible in rulemakings, consistent with its
obligation to ensure that DOT agencies comply with all statutory
requirements for rulemaking. As General Counsel, I would play a
significant role in accomplishing this management objective. On the
recommendation of the DOT Inspector General, the Department has
instituted a new tracking system for regulations. That system became
operational on May 1. It is capable of generating a basic set of needed
reports, and the Department intends to expand its capabilities over the
coming months.
Secretary Mineta's frustration with delinquent reports from the
Department while serving as a Member of Congress clearly demonstrated
to him the need for accurate, timely information as a key component for
decision-making by Congress. Additionally, the Deputy Secretary has
made timely regulatory action by the Department and its modes a very
high priority, in line with recent recommendations of the Inspector
General. The DOT Inspector General (IG) studied delay in DOT rulemaking
(report issued July 20, 2000), and its recommendations form the basis
for improved interagency communication and cooperation. The IG found
areas where there were clear opportunities for improving efficiency and
effectiveness and made several recommendations, all of which the
Department has implemented or is implementing. If confirmed as General
Counsel, I commit to make a sustained effort in this area one of my
highest priorities.
It is my understanding that the various administrations within DOT
are not routinely asked to review the rulemaking actions of other
administrations within DOT unless the rule making could directly affect
programs within their immediate jurisdiction. For example, FRA may be
asked to review an FMCSA rulemaking on railroad crossings, and NHTSA
may review an FAA rulemaking on child seats. In addition, it is my
understanding that the Office of the Secretary now limits the review of
proposed regulations and reports only to those offices within the
Department that could be affected. In coordinating the regulatory
process for all the modes, I would attempt to ensure that the process
works efficiently, and that regulations are developed and cleared in a
timely manner.
Question 4. I trust that you clearly understand the difference
between statutory and report language. What steps will you take at the
Department to ensure that the modal administrations treat report
language as it is intended, an expression of Congressional interest,
rather than having it be treated as a Congressional mandate?
Answer. I can assure you that I clearly understand the difference
between statutory and report language, particularly when it comes to
the naming of specific projects in report language. In such instances,
only statutory language is law; report language is not law but simply
an expression of Congressional interest. If confirmed, I will be sure
that the Chief Counsel offices in the modal administrations understand
this as well.
maritime
Question 5. The President has proposed as part of the
Administration's FY 2002 budget to zero out funding for Title XI
maritime loan guarantee program. Private maritime interests who support
the program recently published a report which argues that the program
has been a net revenue raiser for the federal government? I am
concerned the findings in the report have not been subjected to any
outside independent analysis. If confirmed, what will you do in order
to insure that such reports, which clearly counter the Department's
position, are responded to fully and in a timely manner?
Answer. If confirmed, I will attempt to ensure that, when the
Department is requested to evaluate a private report, it will perform
an objective, independent, and balanced evaluation, and that the
Department's analysis will be completed in a timely manner. My
understanding is that an evaluation of the report mentioned is underway
at this time in the Office of the Assistant Secretary for Budget and
Programs.
aviation
Question 6. The FAA recently published several options for managing
excessive demand at LaGuardia airport. Two of the options were
developed by the Port Authority of New York and New Jersey, which
operates the airport. Those options involved market-based solutions
wherein the Port Authority would charge congestion fees or hold an
auction for take off and landing ``reservations.'' I believe that any
attempt to manage demand at LaGuardia must be done under the authority
of the federal government because local authorities are legal preempted
from imposing such solutions. Do you agree that airports do not, under
federal law, have authority to establish their own remedies, such as
congestion fees, for managing demand for air services?
Answer. The extent of an airport proprietor's powers to set fees to
manage demand for air services raises complex legal issues as well as
difficult issues with regard to our international aviation obligations.
The FAA has the statutory authority to regulate navigable airspace and
to assure efficient air traffic management. 49 U.S.C. 40103. An airport
proprietor has the right to impose fees, terms and conditions on
operators at its airport that are reasonable, nonarbitrary,
nondiscriminatory, intended to advance a local interest, and do not
impose an undue burden on interstate commerce. 49 U.S.C. 41713(b). It
is possible that a properly structured peak pricing program whose
objective is to align the number of aircraft operations with airport
capacity could be reasonable and not unjustly discriminatory under 49
U.S.C. 47107(a)(1) and 47129 as well as under the U.S. international
air services obligations and the International Civil Aviation
Organization's policies.
However, the Department has the legal authority and obligation to
review and carefully consider such programs, and I would ensure that
the Department exercises that authority with respect to any plan. As
stated in its June 12 Federal Register notice on LaGuardia options,
[T]he FAA does not propose nor endorse the Port Authority's
options at this time. Federal laws, regulations, and U.S.
international obligations presently in place may, in fact,
prevent PANYNJ from imposing these proposals. In this notice we
seek suggestions on effective, comprehensive solutions that
represent the best public policy for controlling congestion and
allocating operating rights at LGA, and we will consider
pertinent legal issues in any policy options ultimately put
forward for adoption. 66 FR 31736.
I understand that, at present, FAA is working with the Port
Authority in seeking solutions to the congestion at LaGuardia; the Port
Authority has not acted to impose congestion pricing or other market-
based options on its own. The FAA's current effort is to attempt to
identify those options that represent the best public policy solutions
for controlling congestion at LaGuardia, and then address whether they
might be implemented in accordance with existing legal and
international requirements or whether changes might be advisable. I
would ensure that I am kept informed as this subject develops, and that
the Department's actions are based on sound legal analysis.
Question 7a. As you may know, the bilateral air services agreement
between the United States and United Kingdom, known as Bermuda 2,
restricts competition and is heavily slanted in favor of British air
carriers. The U.S. has tried unsuccessfully for many years to
liberalize the relationship. In recent weeks, there has been some talk
that negotiations may be back on track as American Airlines and British
Airways may make another attempt to obtain antitrust immunity for it
international alliance. What is your position with regard to the U.S./
U.K. bilateral, and what will you do to ensure that the United States
is not put at a disadvantage with respect to access at Heathrow?
Answer. I understand that replacing the restrictive U.S.-U.K.
aviation agreement with an ``Open-Skies'' agreement is a U.S. aviation
priority. DOT met informally with the British on June 26 and 27 to
discuss a possible resumption of talks, and it was agreed that the
parties would not fix dates at this point, but would be flexible and
prepared to meet as and when circumstances develop further. Meanwhile,
DOT continues to concentrate its efforts on partners that are ready for
liberalization.
I recognize the importance to U.S. carriers of access to Heathrow.
I also recognize that Heathrow is a highly congested airport and that
it is critical for the slot allocation system to continue to be
transparent and non-discriminatory. In a liberalized environment, the
ability of U.S. carriers to establish a competitively effective
presence at Heathrow will be a key consideration if British Airways
seeks antitrust immunity.
Question 7b. What are the chances that the U.S. will be able to get
a more liberalized agreement, or even ``open skies,'' with regard to
the British?
Answer. Although I do not at present have access to full
information on this topic, it appears unclear whether the U.K.
government is ready to engage in serious talks leading to open skies.
Question 7c. What is your position on changing the 25-percent
limitation on foreign investment in U.S. airlines?
Answer. The current 25-percent limit on foreign voting interest in
U.S. air carriers is of course a part of U.S. aviation law, so any
possible change would entail close consultation between the
Administration and interested members of Congress. I am aware that
there is a divergence of opinion on this issue. Proponents cite the
existing limit as an obstacle to further liberalizing U.S. carriers'
access to foreign markets, while others raise concerns about possible
impact on our defense posture and other adverse effects. If confirmed,
I would form an opinion on this important question only after I have
had an opportunity to make a thorough study of all the relevant issues,
in consultation with governmental and private-sector stakeholders.
Question 7d. What are your views on cabotage, and do you believe
U.S. air carriers would be at an advantage or disadvantage if the
Congress changed the cabotage laws?
Answer. This is a fundamental issue for both domestic and foreign
aviation policy, as well as for the transportation parties concerned. I
am familiar with the divergence of views in this area. Globalization of
the airline industry, the growing number of carrier alliances, and
consolidation concerns, for different reasons, have all spurred calls
to reevaluate constraints that limit the markets that airlines can
enter.
Modifying or removing the cabotage prohibition could result in new
sources of competition for U.S. aviation consumers and if adopted
globally, contribute to a more open international aviation regime on a
worldwide basis. However, there are also important competing factors,
such as our defense posture, that argue against any change in the
cabotage prohibition.
I believe that U.S. airlines have shown both domestically and
internationally that they are effective, adaptable competitors. I would
expect such U.S. carrier competition to continue if the cabotage laws
were changed. However, the specifics of any ``advantage or
disadvantage'' would also depend on how Congress changed the cabotage
laws and the international Response to the change.
Question 8a. In its January 2001 report on airline competition, the
Department of Transportation discussed taking aggressive action to open
up airport facilities to make possible new and increased airlines
services, and thereby promote competition. What actions to open airport
facilities do you believe DOT could take in order to promote
competition?
Answer. Beginning with Fiscal Year 2001, certain large- and medium-
hub airports must submit competition plans in order for the FAA to
approve the collection of a new Passenger Facility Charge (PFC) or for
a grant to be issued under the Airport Improvement Program (AIP). The
underlying purpose of this statutory requirement--contained in AIR 21
and based on our report ``Airport Business Practices and their Impact
on Airline Competition''--is for those airports that are dominated by
one or two carriers to demonstrate how they will provide for new-
entrant access and expansion of incumbent air carriers.
To date, DOT has reviewed and provided extensive comments on 38
competition plans, resulting in airport officials adopting business
practices that are more ``entry friendly.'' DOT has met with airports
that have deficient plans to provide them with detailed comments as to
what actions they need to take to meet their statutory obligations
regarding the content of the competition plan. Finally, DOT developed
an ``implementation audit plan,'' required by AIR 21, in light of the
possible need to take more stringent legal/regulatory actions against
those airports not meeting their legal obligations.
Question 8b. In your view, is the perimeter rule at Reagan National
Airport an anticompetitive barrier to competition?
Answer. While a principal tenet of airline deregulation is open
competition and the elimination of economic restrictions such as the
perimeter rule, the Department's position has been that modification to
the perimeter rule at Reagan National Airport should be handled by
Congress and the local authorities. I agree with that position.
Question 9a. For each of the past four years, DOT has extended the
current Computer Reservation System (CRS) rules for a year without
addressing the concerns that it raised about the rules' applicability
to Internet sales and other issues. Do you believe the CRS rules should
apply to Internet distribution of airline tickets?
Answer. Because the Department recognizes the importance of the
question of whether the CRS rules should be applied to the Internet
sale of airline tickets, the Department asked the parties in its
pending CRS rulemaking to comment on this issue. I understand that many
parties submitted comments on this issue which disagree on whether
regulation is necessary. I have not yet had an opportunity to review
those comments but would carefully do so before I would advise the
Secretary on the rulemaking issues.
Question 9b. When will DOT act to finalize changes to the CRS
rules?
Answer. The Secretary fully recognizes the importance of completing
the CRS rulemaking. He has instructed the staff to move forward on the
rulemaking and develop a rulemaking proposal that can be forwarded to
OMB. If confirmed, I intend to ensure that the staff promptly carries
out the Secretary's directions.
__________
[From the New York Times, June 24, 2001]
The World: Free Trade's Promise In Latin America; The Poor Survive It
All. Even Boom Times
(By Anthony DePalma)
For months now, President Bush has been asking Congress for
something really big: authority to negotiate the largest free trade
agreement the world has ever seen, one that would create a market of
800 million people in the Americas, from the Arctic to Antarctica. In
exchange, he has promised that the trade zone will not only create
markets for the United States, but will fortify democracy in Latin
America and spread the economic benefits equitably.
Last week, it became clear he has a big fight ahead. The capital
was flooded with critics who fear the deal's impact on workers' rights
and environmental standards, and supporters eager for bigger markets
and increased economic opportunities.
But their debate barely touches a far more fundamental question:
does the combination of democracy and free enterprise guarantee
achievement of the larger goal--higher living standards? In Latin
America, the answer often is no.
On the surface, descriptions of trade, democracy and shared
prosperity as inevitably linked represent a logical bind for the Bush
administration. The Western Hemisphere already is more politically
democratic than ever; excluding Cuba, every nation has an elected
government. And the markets have never been more open; most governments
have sold state-owned businesses, cut tariffs and torn down other walls
that protected national industries.
What has this produced? According to the United Nations Economic
Commission for Latin America and the Caribbean, an enormous number of
Latin Americans--224 million of them--live in poverty. They represent
roughly 36 percent of the population--an improvement from the 41
percent who were considered poor in 1990, but higher than the 35
percent so defined in 1980.
More perilous for social peace, Latin America maintains the
broadest gap between rich and poor in the world, and the gap has
narrowed only marginally, if at all, from what it was under the
generals, dictators and caudillos.
To some Latin American scholars, the linking of democracy, trade
and shared prosperity suggest that Mr. Bush and many Latin American
leaders are out of touch with reality. ``These guys are just whistling
Dixie,'' said Riordan Roett, director of the Western Hemisphere program
at the Johns Hopkins University School of Advanced International
Studies. ``They're ignoring the basic issues that everyone's been
pointing out to them for a decade.''
The most effective way to ensure a fairer distribution of the
economic benefits of market openings, according to Professor Roett and
many other experts, is by improving education. Greater skills translate
directly into higher wages. But only 15 percent of Latin American
children make it to the ninth grade, even though spending on education
has increased in at least 13 nations.
The increases tend to be less effective than they might be because
Latin American governments spend disproportionately on universities--a
strategy aimed at mollifying politically active middle class students.
And that kind of spending decision underlines a basic problem
throughout Latin America: the way to fairer distribution of wealth is
known, but the will to make the necessary changes gets waylaid between
the people and their governments.
Nobody expects miracles overnight. Economic ministers in Latin
America always counter reports of current problems with references to
how bad things were before, and they usually are right. But their
critics say they miss a crucial point. The region's rigid social
structure isn't equipped to equitably distribute wealth, and this has
been true whether a society was a democracy or an autocracy,
protectionist or free-trading.
As Mexico learned when it abandoned protectionism in the 1980's and
90's, capitalism unbound puts lower-wage people at the mercy of global
market forces. In order to counteract those forces and create more
winners than losers, a nation needs strong democratic institutions--a
sound judiciary, free media and officials who are responsive to voters.
Far too often, however, Latin America's fledgling democracies have
been too weak to effectively defend against such elite forces. For
example, the elected governments of countries like Guatemala did little
to stand in the way as the rich amassed tremendous wealth, allowing a
coalition of agricultural growers and financial groups to block tax
reforms. In Ecuador several years ago, so many rich people were evading
income taxes that the government just abolished them, putting a tax on
financial transactions instead.
In such cases, checks and balances intended to hold officials
accountable don't function; policy decisions are based on their impact
on the powerful few, not on the poor majority.
And so, even after decades of market opening and democratic
elections, the richest 10 percent of Guatemalans and Brazilians control
almost half of their national incomes, while the bottom 50 percent have
access to just 10 percent of the wealth. Chile, Uruguay and, until
recently, Argentina have had fairly sophisticated and stable economies,
but they too have barely narrowed the wealth gap.
In fact, over the last 40 years, the most effective efforts to
bridge the gap took place under populist authoritarian governments that
rejected both democracy and free trade. They erected protectionist
barriers that kept vast numbers of people employed, but not
productively. The governments made up for shortfalls by borrowing
heavily from foreigners. The system worked, but only for a while. It
led to the debt crisis of the 1980's, which worsened income inequity.
The region recovered in the early 90's but most of the progress was
wiped out by Mexico's debt crisis of 1994-95.
The region's economies climbed back again, but as they did
something else occurred. The economic restructuring intersected with
democratic opening in many countries, creating unforeseen new
pressures. Competing globally meant becoming more productive, which
brought layoffs. New standards of openness forced the governments to
reveal economic data on once-guarded items like foreign cash reserves.
This cleared the way for newly liberated news outlets to investigate
corruption on every level.
The result? ``People now see the corruption and the problems with
education, health and judicial impunity, and they think that is
democracy,'' said Cesar Gaviria, a former president of Colombia who is
secretary general of the Organization of American States. ``All of that
has created a sense of skepticism about democracy.''
That disenchantment has put democracy itself at risk, and some
Latin American intellectuals fear that the door has opened for the
region to return to what the Mexican writer Carlos Fuentes has called
the area's ``oldest and most deeply rooted tradition--
authoritarianism.''
The stirrings of such a shift are already evident. Using resentment
against the maldistribution of wealth in Venezuela, Hugo Chavez led an
unsuccessful coup attempt in 1991. A few years later, he won the
presidential election and began dismantling parts of Venezuela's
constitutional system that he said were unresponsive to the masses.
A coup in Ecuador last year was a backlash, in part, against the
country's economic morass and a decision to adopt the American dollar
as Ecuador's currency. After international pressure forced the generals
to surrender control, the new president promised to work to distribute
economic benefits equitably. But one of his first moves was to complete
dollarization, which helped businesses but not the poor.
And in last year's historic election in Mexico, perceptions that
economic opening had enriched a few families while leaving most
Mexicans in poverty helped to oust the ruling party that had controlled
the presidency for seven decades. This victory for democracy could
prove a tenuous one; sustaining the victory may well depend on
President Vicente Fox's ability to persuade most Mexicans that they too
are benefiting from free trade.
Mexico, Ecuador and Venezuela were among the 34 nations at the
recent Summit of the Americas in Quebec, which voted to limit
participation in future summits--and perhaps the proposed Free Trade
Area of the Americas that the Bush administration supports--to
democracies.
But critics of such a simple linkage say it is not merely a
democratic constitution and elections that determine the fairness of a
society, but how deeply democratic understandings reach into the
culture. Hernando De Soto, the Peruvian economist whose ideas have
influenced public policy in the region, believes that raw capitalism
has trumped principles of fairness in Latin America because many of the
region's democracies haven't developed completely.
``LATIN Americans get to choose their leaders, but once they are in
place, it's the old cliques that make the bottom-line decisions that
are suitable to their own needs, not the people's needs,'' said Mr. De
Soto. Latin American newspapers commonly refer to ``the arrival of
democracy'' after elections, but the process doesn't end there.
``These nations may look like democracies and sound like
democracies,'' said Mr. DeSoto, ``but they certainly do not function in
the same way that true democracies function.''
______
Prepared Statement of Hon. John McCain,
U.S. Senator from Arizona
Good Morning. I want to thank Chairman Hollings for moving swiftly
in scheduling this nominations hearing so early in his reinstated role
as Chairman of the Committee. I know the Administration and in
particular, the pending nominees, are very appreciative of his
leadership, and am hopeful the Committee and full Senate can work to
move your nominations quickly.
We will be considering the nominations of three individuals who are
being considered for positions with the Department of Transportation
(DOT). They are Mr. Kirk Van Tine to be General Counsel of the DOT, Mr.
J. Allan Rutter, to be Administrator of the Federal Railroad
Administration (FRA), Ms. Ellen Engleman, to be Administrator of the
Research and Special Programs Administration (RSPA). We will also
consider the nomination of Mr. Samuel Bodman to be Deputy Secretary of
the Department of Commerce.
The positions for which these individuals have been nominated are
important. For example, one only needs to see a telecast of a run-away
train or hear about a tragic pipeline explosion to understand the
importance of ensuring the Administrators of the FRA and RSPA are
highly capable. While times of tragedy most often reminds us of these
modal agencies, they are responsible for carrying our important safety
missions at all times.
The DOT General Counsel position is essential to assisting the
Secretary in carrying out our nation's federal transportation policies
and ensuring the Department's actions are in full compliance with the
law. The General Counsel's duties are far-reaching, overseeing the
Department's entire legal department, aiding in the sound development
of legislative submissions and fulfilling statutory intent through the
timely completion of Departmental rules and regulations.
And finally, the Deputy Secretary of the Department of Commerce
plays a key role the day-to-day management of that Department. In
addition to the management of approximately 40,000 Federal employees,
the Deputy is responsible for the policy implementation of a wide range
of issues, including international trade, economic growth, scientific
research and development, patents and trademarks, telecommunications,
weather forecasting, fisheries, and the census.
I would like to take this opportunity to thank the nominees for
being here today. I know your nomination is a great honor, and that
your families are very proud.