[Senate Hearing 107-1085]
[From the U.S. Government Publishing Office]
S. Hrg. 107-1085
NOMINATIONS TO THE FEDERAL TRADE
COMMISSION, DEPARTMENT OF
TRANSPORTATION, AND DEPARTMENT
OF COMMERCE
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
MAY 16, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada MAX CLELAND, Georgia
GEORGE ALLEN, Virginia BARBARA BOXER, California
JOHN EDWARDS, North Carolina
JEAN CARNAHAN, Missouri
Mark Buse, Republican Staff Director
Ann Choiniere, Republican General Counsel
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
C O N T E N T S
----------
Page
Hearing held on May 16, 2001..................................... 1
Statement of Senator Allen....................................... 41
Statement of Senator Dorgan...................................... 42
Statement of Senator Hollings.................................... 2
Prepared statement........................................... 2, 47
Statement of Senator Hutchison................................... 25
Statement of Senator McCain...................................... 1
Prepared statement........................................... 2
Statement of Senator Smith....................................... 3
Prepared statement........................................... 3
Statement of Senator Stevens..................................... 3
Statement of Senator Wyden....................................... 15
Witnesses
Cino, Maria, Assistant Secretary-Designate and Director General
of the United States Foreign Commercial Service, Department of
Commerce....................................................... 18
Prepared Statement........................................... 19
Biographical Information..................................... 20
Cooper, Kathleen B., Ph.D., Under Secretary-Designate for
Economic Affairs, Department of Commerce....................... 26
Prepared Statement........................................... 27
Biographical Information..................................... 28
Duncan, Hon. John J., Jr., U.S. Representative from Tennessee.... 46
McLean, Donna R., Assistant Secretary-Designate for Budget and
Programs and Chief Financial Officer, Department of
Transportation................................................. 47
Prepared Statement........................................... 48
Biographical Information..................................... 49
Mehlman, Bruce P., Assistant Secretary-Designate for Technology
Policy, Department of Commerce................................. 33
Prepared Statement........................................... 34
Biographical Information..................................... 35
Muris, Timothy J., Chairman-Designate, Federal Trade Commission.. 4
Prepared Statement........................................... 5
Biographical Information..................................... 5
O'Hollaren, Sean B., Assistant Secretary-Designate for
Governmental Affairs, Department of Transportation............. 57
Prepared Statement........................................... 58
Biographical Information..................................... 59
Appendix
Brownback, Hon. Sam, U.S. Senator from Kansas, prepared statement 71
Response to written questions submitted by Hon. John McCain to:
Maria Cino................................................... 76
Kathleen B. Cooper........................................... 77
Donna R. McLean.............................................. 80
Bruce P. Mehlman............................................. 78
Sean B. O'Hollaren........................................... 81
Response to written questions to Timothy J. Muris submitted by:
Hon. Sam Brownback........................................... 74
Hon. Kay Bailey Hutchison.................................... 74
Hon. John McCain............................................. 72
Hon. Olympia J. Snowe........................................ 73
Hon. Ron Wyden............................................... 75
NOMINATIONS TO THE FEDERAL TRADE
COMMISSION, DEPARTMENT OF
TRANSPORTATION, AND DEPARTMENT
OF COMMERCE
----------
WEDNESDAY, MAY 16, 2001
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, D.C.
The Committee met, pursuant to notice, at 9:33 a.m. in room
SR-253, Russell Senate Office Building, Hon. John McCain,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
The Chairman. Good morning. The Commerce Committee meets
today to examine the qualifications of six individuals who have
been nominated by the President to serve the nation in
important posts in the government. The Committee takes its
advice and consent role very seriously, and I will note that
each of the nominees has responded in detail to the Committee's
request for biographical and financial data. I have had the
opportunity to review your responses to the Committee's
questionnaire, as well as pre-hearing questions, and I look
forward to moving these nominations quickly.
We will begin today by hearing from Professor Timothy
Muris, who has been nominated to serve as chairman of the
Federal Trade Commission. Next, we will proceed to hear from
three nominees who are being considered for positions with the
Department of Commerce. They are, Ms. Maria Cino, nominated to
be Assistant Secretary and Director General of the United
States and Foreign Commercial Service, Dr. Kathleen Cooper to
be Under Secretary for Economic Affairs, and Mr. Bruce Mehlman
to be Assistant Secretary for Technology Policy.
Our third panel will be nominees for positions with the
Department of Transportation. They are, Mr. Sean O'Hollaren to
be Assistant Secretary for Governmental Affairs, and Ms. Donna
McLean to be Assistant Secretary for Budget and Programs and
Chief Financial Officer. I would like to take this opportunity
to thank the nominees for being here today. I know these
nominations are a great honor, and that your families are very
proud. We would like to begin with Mr. Muris. Would you come
forward please?
Senator Smith. Mr. Chairman.
The Chairman. Yes. Could I just have him come forward?
Mr. Muris, please take a seat. Mr. Muris, do you have any
family members that you would like to introduce today?
Mr. Muris. Yes, Senator. I would like to introduce my wife,
Pam.
The Chairman. Welcome, and we are glad to have you, and
congratulations. I know you are very proud of your husband
today, as we all are, and welcome to the Committee.
[The prepared statement of Senator McCain follows:]
Prepared Statement of Hon. John McCain, U.S. Senator from Arizona
Good Morning. The Commerce Committee meets today to examine the
qualifications of six individuals who have been nominated by the
President to serve the nation in important posts in the government.
This Committee takes its advice and consent role very seriously, and I
will note that each of the nominees has responded in detail to the
Committee's requests for biographical and financial data. I have had
the opportunity to review your responses to the Committee questionnaire
as well as pre-hearing questions, and I look forward to moving your
nomination quickly.
We will begin today by hearing from Professor Timothy Muris, who
has been nominated to serve as Chairman of the Federal Trade
Commission. Next, we will proceed to hear from three nominees who are
being considered for positions with the Department of Commerce. They
are Ms. Maria Cino, nominated to be Assistant Secretary and Director
General of the United States and Foreign Commercial Service, Dr.
Kathleen Cooper, to be Under Secretary for Economic Affairs, and Mr.
Bruce Mehlman, to be Assistant Secretary for Technology Policy.
Our third panel will be nominees for positions with the Department
of Transportation. They are Mr. Sean O`Hollaren, to be Assistant
Secretary for Governmental Affairs, and Ms. Donna McLean, to be
Assistant Secretary for Budget and Programs, and Chief Financial
Officer.
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. Please feel free to introduce any family
members who are present here today before you begin your remarks.
The Chairman. Senator Hollings.
STATEMENT OF HON. ERNEST F. HOLLINGS,
U.S. SENATOR FROM SOUTH CAROLINA
Senator Hollings. I welcome Chairman Muris, and I will file
my statement for the record. Thank you.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings,
U.S. Senator from South Carolina
Let me thank Mr. Muris for his appearance today. I congratulate him
on his nomination. Let me also take this time to thank my good friend
Robert Pitosfky for the excellent job he has done over the past 6 years
as FTC Chairman. The FTC has now become one of the more popular Federal
agencies, as it has sought in recent years to protect the public from
harmful behavior in the traditional markets, as well as in the new
emerging markets, such as the Internet's E-commerce. A lot is owed to
the leadership of Robert Pitofsky in this regard.
I say this to note that Mr. Muris is coming behind a very good
leader and public servant. However, Mr. Muris is no stranger to the
FTC. He served there previously under President Reagan--heading up both
the Competition and Consumer Protection Bureaus. He recognizes,
therefore, the importance of the Chairmanship of the FTC. He will be
the leader of the agency that is responsible for guarding against
deceptive, unfair, and fraudulent conduct that harms consumers, and
preserving competition in the marketplace through antitrust
enforcement.
With the tremendous changes that have occurred in the marketplace
over the past decade, this challenge is not easy. New technologies,
such as the Internet, provide services and benefits to consumers and
the marketplace never before experienced. At the same time, however,
they also are accompanied by new risks and harms. As evidenced by
recent polls, an issue which consumers are strongly concerned about,
and one in which I have a great interest, is the loss of privacy on the
Internet. As it stands today, every move an individual makes, including
every site that is visited, on the Internet, can be tracked by
companies. This tracking is used to form profiles, which are then sold
for commercial profit and use. All this is done, often without the
user's knowledge and consent. Clearly this practice cannot stand. Both
the Congress and the FTC will be called to act on this matter. I will
be reintroducing legislation on this issue soon, and am looking forward
to the Committee's review of the subject later this year. The FTC
already has established a record on this issue and will be called upon
to work with the Committee on national legislation. I welcome Mr.
Muris' views on this topic and look forward as well to working with him
on the issue following his confirmation.
On the matter of antitrust enforcement, if ever we needed vigorous
enforcement, it is needed now. In almost every major market involving
the nation's key industries, mergers and concentration are abound. This
Committee currently is reviewing legislation to stimulate more
competition in the airline industry and telecommunications industry, in
addition to having opened an investigation of the oil and gas
industries.
I am aware of some of Mr. Muris' views on antitrust enforcement. He
has questioned the recent aggressive enforcement by the agency, based
on different theoretical approaches he would apply. I have some
questions about his positions on some of these issues. For example he
seems to suggest that monopolies produce efficiencies, thus they serve
a public good; additionally, monopolies can do bad things, even behave
anti-competitively, but as long as there is still competition, their
conduct is okay. These positions raise some serious questions about how
he will approach enforcement. Mr. Muris will have an opportunity to
respond today and later on the record. He has assured me, however, that
though he may be a little different than Mr. Pitofsky on these issues,
he's the best Republican we're going to get at this point. On that
matter, I yield to the Chairman.
The Chairman. Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. I have no statement. Welcome.
The Chairman. Senator Smith.
STATEMENT OF HON. GORDON SMITH,
U.S. SENATOR FROM OREGON
Senator Smith. Mr. Chairman, I welcome this first witness.
I wonder if I might ask the Chairman's indulgence.
I have to chair a Committee in Foreign Relations to get
some nominations to diplomatic posts up for President Bush. I
am here because I am a member of the Committee, but also to
give a special welcome to Sean O'Hollaren, who is an Oregonian,
has been an intern for Senator Packwood, Senator Hatfield, for
a long time for Senator Hatfield, a distinguished
representative of the Union-Pacific Railroad--I could go on. I
have got a wonderful statement. I wonder if I could include it
in the record for him----
[Laughter.]
The Chairman. Without objection.
Senator Smith [continuing]. And ask his indulgence if I am
not here, but he has mine and Senator Wyden's full support, and
I thank you, Mr. Chairman.
[The prepared statement of Senator Smith follows:]
Prepared Statement of Hon. Gordon Smith, U.S. Senator from Oregon
Mr. Chairman and fellow colleagues on the Senate Commerce, Science
and Transportation Committee, it brings me great pleasure to introduce
to you my good friend and fellow Oregonian--Sean O'Hollaren to be
Assistant Secretary of Transportation for Governmental Affairs. Today,
Sean is joined by his beautiful wife Hilary and their 10-month-old
daughter Rory.
As you can see from his extensive resume, Sean started his career
as an intern for this committee and then served in various positions
for Senator Mark Hatfield. He most recently served as the Director of
Washington Affairs for Tax and Environment for Union Pacific.
As the Assistant Secretary for Governmental Affairs, Sean will
supervise and coordinate the Department of Transportation's legislative
and non-legislative agenda. I can think of no other person more
qualified than Sean O'Hollaren and would like to echo President Bush
and Secretary Mineta's unconditional support for Sean's nomination.
With his long service to Oregon and his experience in Washington,
D.C., Sean is the ideal candidate for this position. Sean's background
in transportation policy, coupled with his private sector experience,
will be useful to our country as we face problems related to traffic
congestion, transportation safety, and infrastructure.
My fellow colleagues, as the Chairman of the Subcommittee on
Surface Transportation and Merchant Marine, I wholeheartedly support
the nomination of Sean O'Hollaren to be Assistant Secretary of
Transportation for Governmental Affairs and ask that you join me and my
colleague Senator Ron Wyden in supporting his nomination.
The Chairman. Thank you very much, Senator Smith. Your
statement will be made a part of the record, and we appreciate
your strong endorsement of Mr. O'Hollaren.
Mr. Muris, welcome. Please proceed with your opening
statement.
STATEMENT OF PROFESSOR TIMOTHY J. MURIS,
CHAIRMAN-DESIGNATE, FEDERAL TRADE COMMISSION
Mr. Muris. Thank you. Mr. Chairman and members of the
Committee, it is a great honor to have been nominated by the
President to serve as chair of the Federal Trade Commission. I
thank you for the opportunity to appear before this Committee,
and I appreciate the expeditious scheduling of this hearing.
As members of the Committee already know, I have held three
staff positions at the FTC, as an Assistant to the Director of
the Planning Office, as Director of the Bureau of Consumer
Protection, and as Director of the Bureau of Competition. I am
fully committed to the mission of the Federal Trade Commission.
There has been an evolutionary policy for enforcing the
consumer protection and antitrust laws within the commission's
jurisdiction. If confirmed, I desire to continue this trend.
Regarding consumer protection, 20 years ago we shifted the
FTC's emphasis away from cumbersome rulemakings designed to
transform entire industries toward aggressive law enforcement
of the basic rules that we already have--rules against fraud,
against deception, against breach of contract. Our vision was
that the FTC would forge a bipartisan consensus on how to
protect consumers, and would work with other federal and state
agencies to provide maximum benefits for consumers from the
FTC's limited resources.
Today, through the hard work of hundreds of people over the
past 20 years, superb leadership at the commission, most
recently by Bob Pitofsky and his fellow Commissioners, and by
Jody Bernstein, that dream has become reality.
Regarding antitrust, bipartisan consensus also exists.
Although there is disagreement about cases at the margin, there
is widespread agreement that the purpose of antitrust is to
protect consumers, that economic analysis should guide case
selection, and that horizontal cases, both mergers and
agreements among competitors, are the mainstays of antitrust.
Moreover, today there is bipartisan recognition that
antitrust is a way of organizing our economy. A freely
functioning market subject to the rules of antitrust provides
maximum benefits to consumers.
Finally, a program that Chairman Pitofsky reinstituted at
the FTC should be continued. That program studies various
aspects of the economy, and issues reports to Congress and to
the public. Through public hearings and use of the FTC's
investigative powers, the agency has increased public knowledge
about important issues.
Thank you. I would be glad to answer any questions.
[The prepared statement and biographical information of Mr.
Muris follow:]
Prepared Statement of Professor Timothy J. Muris, Chairman-Designate,
Federal Trade Commission
Mr. Chairman and Members of the Committee:
It is a great honor to have been nominated by the President to
serve as Chair of the Federal Trade Commission. I thank you for the
opportunity to appear before this Committee, and I appreciate the
expeditious scheduling of this hearing.
As members of the Committee already know, I have held three staff
positions at the Federal Trade Commission: as an assistant to the
Director of the Planning Office (1974-1976), as Director of the Bureau
of Consumer Protection (1981-1983), and as Director of the Bureau of
Competition (1983-1985).
I am fully committed to the mission of the Federal Trade
Commission. There has been a beneficial evolution in policy for
enforcing the consumer protection and antitrust laws within the
Commission's jurisdiction. If confirmed, I desire to continue this
trend.
Regarding consumer protection, twenty years ago we shifted the
Federal Trade Commission's emphasis away from cumbersome rulemaking
designed to transform entire industries toward aggressive law
enforcement of the basic rules that we already have--rules against
fraud, deception, and breach of contract. Our vision was that the
Federal Trade Commission would forge a bipartisan consensus on how to
protect consumers and would work with other federal and state agencies
to provide maximum benefits for consumers from the Federal Trade
Commission's limited resources. Today, through the hard work of
hundreds of people over the past 20 years and superb leadership at the
Commission--most recently by Bob Pitfosky and Jodie Bernstein--that
dream has become reality.
Regarding antitrust, bipartisan consensus also exists. Although
there is disagreement about cases at the margin, there is widespread
agreement that the purpose of antitrust is to protect consumers, that
economic analysis should guide case selection, and that horizontal
cases, both mergers and agreements among competitors, are the mainstays
of antitrust. Moreover, today there is bipartisan recognition that
antitrust is a way of organizing our economy. A freely functioning
market, subject to the rules of antitrust, provides maximum benefit to
consumers.
Finally, a program that Chairman Pitofsky reinstituted at the
Federal Trade Commission should be continued. That program studies
various aspects of the economy and issues reports to Congress and to
the public. Through public hearings and use of the FTC's investigative
powers, the agency has increased public knowledge of important issues.
I would be glad to respond to your questions.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Timothy Joseph Muris (``Tim'').
2. Position to which nominated: Commissioner, Federal Trade
Commission.
3. Date of nomination: April 23, 2001.
4. Address: Information unavailable to the public. Office: George
Mason University, School of Law, 3301 North Fairfax Drive, Room 415,
Arlington, Virginia 22201-4498.
5. Date and place of birth: November 18, 1949, Massillon, Ohio.
6. Marital status: Married to Pamela Rodney Harmon.
7. Names and ages of children: Matthew A. Muris, 22; Paul A. Muris,
16; Catherine H. Harmon, 11 (step-daughter).
8. Education: San Diego State University--1967-1971, A. B.; UCLA
School of Law, 1971-74, J.D.
9. Employment record: Federal Trade Commission, Washington, D.C.,
Assistant to the Director, Office of Policy Planning and Evaluation
(1974-76); University of Miami, School of Law and Law & Economics
Center, Coral Gables, Florida, Assistant Professor (1976-1979);
University of Chicago School of Law, Chicago, Illinois, Law and
Economics Fellow (1979-1980); University of Miami, School of Law and
Law & Economics Center, Coral Gables, Florida, Associate Professor
(1979-1981), Professor (1981); Office of the Vice President, Deputy
Counsel, Presidential Task Force on Regulatory Relief (1981); Federal
Trade Commission, Washington, D.C., Director, Bureau of Consumer
Protection (1981-1983); Federal Trade Commission, Washington, D.C.,
Director, Bureau of Competition (1983-1985); Executive Office of The
President--Office of Management and Budget, Washington, D.C., Executive
Associate Director (1985-1988); George Mason University, School of Law,
Arlington, Virginia, George Mason University Foundation Professor
(1988-Present), Interim Dean (1996-1997).
10. Government experience: Consultant--Federal Trade Commission,
Washington, D.C. (1977); Consultant--Council on Wage and Price
Stability, Washington, D.C. (1981); Consultant--Department of Justice,
Washington, D.C. (1991-1992); Consultant--Congressional Budget Office,
Washington, D.C. (1999-2000); Consultant--Office of Management and
Budget, Washington, D.C. (1988-1989, 2001).
11. Business relationships: Timothy J. Muris. Inc.--President;
George Mason University School of Law; Law & Economics Advisor, Board--
Chairman; Progress & Freedom Foundation--Adjunct Scholar; Antitrust &
Trade Regulation Report--Advisory Board; Coordinator, Regulatory Law
Track, George Mason University School of Law; Acting Associate Dean,
George Mason University School of Law; Coordinator, International
Track, George Mason University School of Law; Member, ABA Section of
Antitrust Law Special Committee To Study International Antitrust;
Member, ABA Section of Antitrust Law Special Committee To Study the
Role of the Federal Trade Commission; Advisory Committee--American
Enterprise Institute Project on Regulation and Federalism; Brookings
Institution National Issues Forum Advisory Committee; Affiliated
Scholar, American Bar Foundation; Bush-Cheney Transition Team, ``Policy
Coordinator''; Bush-Quayle Transition Team, Senior Advisor; Reagan-Bush
Transition Team for the Federal Trade Commission; Collier, Shannon,
Rill & Scott--Of Counsel; Howrey, Simon, Arnold & White--Of Counsel;
Northern Virginia Baseball Academy--Officer & Minority Owner.
As Counsel to the two law firms and through my corporation, Timothy
J. Muris, Inc., of which I was president and sole employee, I consulted
with numerous clients. My major clients included: Association of
National Advertisers (ANA), ConAgra, Federated Dept. Stores, General
Mills, H. J. Heinz, Intel, Lithotripsy, Inc., Miller Brewing, North
Shore University Hospital, Publishers Clearinghouse, Rockwell Int'l.,
Trans Union, Walt Disney, Chick-Fil-A, Cytodyne, Ford Motor Company,
Grocery Manufacturers of America, Hoechst Marion Roussel, J.C. Penney,
May Co., Mundy & Adkins, PepsiCo, R. J. Reynolds, Toys `R' Us, United
Cable Television.
12. Memberships: Member, Advisory Board, Antitrust & Trade
Regulation Report; International Town & Country Club; American Bar
Association--Antitrust Section; Southwest Youth Association Baseball
Board; Greater Fairfax Babe Ruth Baseball Board; Brookings Institution
National Issues Forum Advisory Committee; Advisory Committee, American
Enterprise Institute Project on Regulation and Federalism; Adjunct
Scholar, The Progress & Freedom Foundation.
13. Political affiliations and activities: (a) None. (b) Economic
Advisor, George W. Bush for President; Policy Coordinator, Bush-Cheney
Transition Team. (c) Senatorial Campaigns of Pete Dawkins and Phil
Gramm, Presidential Campaigns of George W. Bush and Phil Gramm, and the
Congressional Campaign of Jim Kolbe.
14. Honors and awards: Phi Kappa Phi, Order of the Coif.
15. Published writings: Books and Monographs: The People's Budget:
A Common Sense Plan for Shrinking The Government in Washington, Regnery
Publishing (1995) (with Edwin L. Dale, Jr., Jeffrey A. Eisenach, Frank
I. Luntz, and William Schneider, Jr.); The Budget Puzzle: Understanding
Federal Spending, Stanford University Press (1994) (with John Cogan and
Alan Shick); Strategy, Structure and Antitrust in the Soft Drink
Industry, Quorum Books (1993) (with David Scheffinan and Pablo
Spiller). State and Federal Regulation of National Advertising,
American Enterprise Institute (1993) (with J. Howard Beales).
Articles: The Limits of Unfairness Under the Federal Trade
Commission Act, Association of National Advertisers (1991) (with J.
Howard Beales); The Federal Trade Commission Since 1970: Economic
Regulation and Bureaucratic Behavior, Cambridge University Press (1981)
(written and edited with Kenneth W. Clarkson); GTE Sylvania and the
Empirical Foundations of Antitrust, 68 Antitrust Law Journal 799
(2001); The Rule of Reason After California Dental, 68 Antitrust Law
Journal 527 (2000); Anticompetitive Effects in Monopolization Cases:
Reply, 68 Antitrust Law Journal 325 (2000); California Dental
Association v. Federal Trade Commission: The Revenge of Footnote 17, 8
Supreme Court Economic Review 265 (2000); The FTC and the Law of
Monopolization, 67 Antitrust Law Journal 693 (2000); Ronald Reagan and
The Rise of Larize Deficits: What Really Happened in 1981, 4 The
Independent Review 365 (2000); ``In Defense of the Old Order,'' in The
Fall and Rise of Freedom of Contract, (F.M. Buckley, ed.) (Duke
University Press 1999); The Government and Merger Efficiencies: Still
Hostile After All These Years, 7 George Mason Law Review 729 (1999);
``Is Heightened Antitrust Scrutiny Appropriate for Software Markets?''
in Competition, Innovation, and the Microsoft Monopoly: Antitrust in
the Digital Marketplace, (J. Eisenach & T. Leonard, eds.) (Kluwer
Academic Publishers 1999); The Federal Trade Commission and the Rule of
Reason: in Defense of Massachusetts Board, 66 Antitrust Law Journal 773
(1998); Economics and Antitrust, 5 George Mason Law Review 303 (1997);
Legislative Organization of Fiscal Policy (with W. Mark Crain), 38
Journal of Law & Economics 311 (1995); The Foundations of Franchise
Regulation: Issues and Evidence (with J. Howard Beales), Journal of
Corporate Finance 157 (1995); Budget Manipulations, 4 The American
Enterprise 24 (May/June 1993); ``Information, Competition, and Health:
Regulatory Standards For Health Messages,'' in America's Foods: Health
Messages and Claims (J. Tillotson, ed.) CRC Press (1993) (with J.
Howard Beales); Strategy and Transactions Costs: The Organization of
Distribution in the Soft Drink Industry, 1 Journal of Economics &
Management Strategy 83 (1992) (with David Scheffman and Pablo Spiller);
Economics and Consumer Protection, 60 Antitrust Law Journal 103 (1991);
The Great Budget Shell Game, 2 The American Enterprise 34 (November
1990) (with John Cogan); The New Rule of Reason, 57 Antitrust Law
Journal 859 (1989); Regulatory Policymaking, at the Federal Trade
Commission The Extent of Congressional Control, 94 Journal of Political
Economy 884 (1986); Cost of Completion or Diminution in Market Value:
The Relevance of Subjective Value, 12 Journal of Legal Studies 379
(1983); Rules Without Reason--The Case of the FTC, 6 Regulation 20
(September/October 1982); The Costs of Freely Granting Specific
Performance, 1982 Duke Law Journal 1053; ``Letting Competition Serve
Consumers'' in Instead of Regulation (with Kenneth W. Clarkson)
(Lexington Books 1982); Defining Deception, 42 Antitrust and Trade
Regulation Reporter 699 (1982) reprinted in 19 Journal of Reprints For
Antitrust Law and Economics 335 (1989); Opportunistic Behavior and the
Law of Contracts, 65 Minnesota Law Review 521 (1981); Constraining the
Federal Trade Commission: The Case of Occupational Regulation, 35 Miami
Law Review 77 (1980) (with Kenneth W. Clarkson); The Efficiency Defense
Under Section 7 of the Clayton Act, 30 Case Western Reserve Law Review
381 (1980); ``The Federal Trade Commission and Occupational
Regulation'' in Occupational Licensure and Regulation (S. Rottenberg,
ed., American Enterprise Institute 1980) (with Kenneth W. Clarkson);
Advertising and the Price and Quality of Legal Services: The Case for
Legal Clinics, 1977 American Bar Foundation Research Journal 179;
Foreward--Civil Liability of Government Officials, 42 Law and
Contemporary Problems 1 (1978) (Special Editor of Symposium with
Kenneth W. Clarkson); Liquidated Damages v. Penalties: Sense or
Nonsense?, 1978 Wisconsin Law Review 351 (1978) (with Kenneth W.
Clarkson and Roger LeRoy Miller); Scaling the Welfare Bureaucracy:
Expanding Concepts of Governmental Employee Liability, 21 U.C.L.A. Law
Review 624 (1973).
Other Publications: ``Bigger Can Be Better'' Washington Times, A19
(June 4, 1999); ``Downplaying a Defense: Agencies Take Overly Narrow
View of Efficiencies in Merger Cases'', Legal Times (March 8, 1999);
Beyond Block Grants Eliminating Federal Funding for Welfare Programs, 1
American Civilization 11 (Feb. 1995); Overstating Savings/
Underestimating Costs, 32 Society 67 (1994); Congressional Confusion on
Labeling and Advertising Could Deny Consumer Information and Free
Speech, Legal Opinion Letter, Washington Legal Foundation, (Oct. 25,
1991) (with J. Howard Beales III); ``The Myth of Domestic Spending
Cuts'' Wall Street Journal (September 6, 1990) (with John Cogan);
``Comment: Antitrust and International Competitiveness in the 1990's''
58 Antitrust Law Journal 607 (1989); The Kirkpatrick Commission:
Antitrust Issues, 58 Antitrust Law Journal 25 (1989); Antitrust's Next
Decade, in Is Antitrust Dead?, 55-58, Betty Bock, ed., Conference Board
1989; Interview: Antitrust in the Bush Administration, 3 Antitrust 6
(Spring 1989); ``Behind the Budget's Baseline Blues:'' Wall Street
Journal (August 3, 1988); The Consumer Protection Mission: Guiding
Principles and Future Direction, 51 Antitrust Law Journal 625 (1983);
Credit Markets and Market Forces, 37 Business Lawyer 1373 (1982); The
Effect of Advertising on the Quality of Legal Services: A Case Study,
65 American Bar Association Journal 1503 (1979) (with Fred S.
McChesney); ``Does Lack of Funds Hinder Antitrust Enforcement?'' in The
Attack on Corporate America The Corporate Issues Sourcebook 285-88
(McGraw Hill 1978); The Rise of the No-Lose Ethic, 2 Ripon Quarterly 19
(1975) (with Wesley J. Liebeler and Richard W. Rahn); Book Note on J.
Fried, Housing Crisis USA 20 U.C.L.A. Law Review 662 (1973).
16. Speeches: ``Antitrust: 1980, 2000, and Beyond'' (Copies are
being retained in Committee files.)
17. Selection: (a) I believe that I was chosen because of my
qualifications, as discussed below. (b) I have served as an outside
evaluator of the performance of the Federal Trade Commission (member of
the ABA Antitrust Section, Committee to Study the FTC), a member of its
staff (Director of Bureaus of Competition and Consumer Protection,
Assistant to the Director of Office of Policy Planning and Evaluation,
and as a student intern). I have participated or followed its work
since 1973. Moreover, as an academic, I have often written on issues of
consumer protection and competition policy. Most important, I believe
in the mission in the FTC. I believe the antitrust laws serve our
country well and should be enforced with enthusiasm, and I believe that
the Federal Government has an important role to play in protecting
consumers against marketing fraud, deceptive practices, false
advertising, and other practices that cause consumer harm.
B. FUTURE EMPLOYMENT RELATIONSHIP
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations, if you
are confirmed by the Senate? I will sever all connections, except, if
permitted, I will take a leave of absence from my university rather
than resign my tenured position.
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 service out your full term or
until the next Presidential election, whichever is applicable? Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial agreements, 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. Most of my investments
and those of my family are widely diversified in mutual funds that
should not present potential conflicts. We have stock interests in some
corporations. Prior to participating in any particular matter that
could affect any corporation or entity in which we have a financial
interest, I will consult with the Agency Ethics Official and will
either recuse myself divest the conflicting asset, or (for an
insubstantial conflict) seek a waiver under 18 USC 208 (b). As to other
``relationships,'' see my answer to question 3, next.
3. Describe any business relationship, dealing, or financial
transactions 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? The following business
relationships during the last 10 years conceivably could raise issues
of possible conflict of interest: I have served as Counsel to the
Washington, D.C. law firm of Collier, Shannon, Rill & Scott, as it was
then named. This firm represents and is likely to represent clients
before the FTC; Since May, 2000, I have served as Counsel to the
Washington, D.C. law firm of Howrey, Simon, Arnold & White. This firm
represents and is likely to represent clients before the FTC; I have
consulted with certain clients who have matters either potentially or
actually before the FTC, either in my role as Counsel to the law firms
mentioned above or as an independent consultant or expert witness; I
have consulted clients through Timothy J. Muris, Inc., of which I am
the president and sole employee; I am a stockholder and an officer in
the Northern Virginia Baseball Academy; I hold a tenured position on
the faculty of the George Mason University School of Law.
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 served as
a consultant to three Federal agencies. In 1992, I consulted with the
Department of Justice on the redraft of the merger guidelines. In 1999
and through the beginning of 2000, I consulted with the Congressional
Budget Office, commenting on various draft documents, particularly
those involving budget concepts. In 2001, I consulted with the Office
of Management and Budget regarding the preparation of President Bush's
Budget Blueprint.
In 1994-95 I assisted the House Republicans on various budget
issues. In 1999-2000, I was an Economic Advisor to the Bush-Cheney
Campaign and in 2000-2001 I was a Policy Coordinator for the Bush-
Cheney Transition.
Finally, I have testified before Congressional Committees,
including the Senate Budget Committee regarding budget process reform,
the House Budget and Rules Committees regarding budget process reform,
and the House Budget Committee regarding President Clinton's proposed
budget in 1993.
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.) Upon
confirmation, if permitted, I will take a leave of absence from George
Mason University School of Law, cease doing business with my private
consulting corporation, and resign from my other non-government
positions, including my position as Counsel to Howrey, Simon, Arnold &
White.
I will follow the procedures mandated by the Standards of Conduct
with respect to matters that could come before the Commission in the
future. The Standards require that, for 1 year, I disqualify myself
from particular matters involving parties in which Howrey, Simon,
Arnold & White or any of my own former clients are involved in any
circumstance in which a reasonable person could question my
impartiality. Even after the 1-year period, I plan to recuse myself on
a case by case basis, after consultation with the Agency Ethics
Official, from matters that could raise an appearance of impropriety.
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 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? 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.
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.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. 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.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination. None.
F. GENERAL QUALIFICATIONS AND VIEWS
1. Please describe how your previous professional experience and
education qualifies you for the position for which you have been
nominated. I have served as an outside evaluator of the performance of
the Federal Trade Commission (member of the ABA Antitrust Section,
Committee to Study the FTC), a member of its staff (Director of Bureaus
of Competition and Consumer Protection, Assistant to the Director of
Office of Policy Planning and Evaluation, and as a student intern). I
have participated in or followed its work since 1973, Moreover, as an
academic, I have often written on issues of consumer protection and
consumer competition policy. Most important, I believe in the mission
in the FTC. I believe the antitrust laws serve our country well and
should be enforced with enthusiasm, and I believe that the Federal
Government has an important role to play in protecting consumers
against marketing fraud, deceptive practices, false advertising, and
other practices that cause consumer harm.
2. 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? Although I am familiar with most of the
issues before the Commission, on some issues, particularly those of
recent origin, I am less familiar. I am endeavoring to learn about
those issues.
3. Why do you wish to serve in the position for which you have been
nominated? I believe that I can help advance the mission in the FTC. I
believe the antitrust laws serve our country well and should be
enforced with enthusiasm, and I believe that the Federal Government has
an important role to play in protecting consumers against marketing
fraud, deceptive practices, false advertising and other practices that
cause consumer harm.
4. What goals have you established for your first 2 years in this
position, if confirmed? The mission of the Federal Trade Commission has
become an area of widespread bi-partisan agreement. Thus, I believe the
agency has performed well under the extremely capable leadership of
Chairman Robert Pitofsky. I want to continue the excellent enforcement
program of the current Commission as well as increase the Commission's
capability to respond to the evolution in our economy and to understand
the impact of both of the practices that it investigates and of its
enforcement actions, as I discuss in the answers to the next several
questions.
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. I
believe that consumers are best served by a freely functioning market,
as opposed to extensive government regulation. The market needs
governing rules, however, and the antitrust and consumer protection
laws that the Federal Trade Commission enforces provide such rules. On
occasion, performance of the market can be improved through government
regulation, and in evaluating such occasions, the benefits and costs of
the regulation should be considered carefully. Moreover, government
programs should be re-evaluated periodically to determine if their
benefits exceed their costs and if the program has outlived its
usefulness or can be modified to increase its effectiveness.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The major
mission of the FTC is to help ensure that consumers receive the
benefits of a freely functioning market. To accomplish that goal, the
Commission enforces our nation's antitrust laws, principally preventing
mergers and anticompetitive practices that harm consumers. It also is
the principal Federal consumer protection agency, enforcing laws
against unfair or deceptive acts or practices, as well as enforcing
various statutes aimed at certain practices in specific industries such
as consumer credit. Finally, the FTC studies various aspects of the
economy, both as an adjunct to its antitrust and consumer protection
law enforcement and as a means to inform Congress, other legislative
and regulatory bodies, and the public about the impact of various
governmental and private activities on consumers.
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? As
our economy evolves, particularly the development of the ``new
economy,'' I expect that the Commission will continue to shift
resources toward evaluating the impact of these changes. Moreover, much
of the Commission's work in the 1990's has involved evaluating the
unprecedented merger activity of recent years. There are some signs
that this activity may be slackening.
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
board/commission and why? Although the Commission has a great many
high-quality employees, the continual escalation of salaries in the
sectors outside the Federal Government present a real challenge to
hiring and retaining such employees. Hiring and retention of high-
quality employees is one of the top three challenges facing the FTC,
along with the need to understand the evolving changes and the economy
as discussed in the answer to Question 7, and the need to obtain better
information on the impact of Commission enforcement efforts, as
discussed in my answer to the next question.
9. In further reference to question No. 6, what factors in your
opinion have kept the board/commission from achieving its missions over
the past several years? I believe that the Commission has performed
extremely well in the past several years. I do believe that the
Commission needs to strengthen its understanding of the market impact
of the various practices that it investigates and of its investigatory
activities and enforcement actions regarding those practices.
10. Who are the stakeholders in the work of this agency? Consumers
are the FTC's major stakeholders. The business community, the trade
regulation bar, and various interest groups are stakeholders. This
Committee, and others in Congress, serve as representatives of these
many stakeholders.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in Question No. 10? Members
of the Federal Trade Commission should strive to enforce the laws
within their responsibility to ensure that they work to improve the
welfare of consumers. As described in my answers above, particularly
question No. 6, I believe that the FTC has a crucial role in
contributing to the sound functioning of the economy through effective
law enforcement and incisive reporting on legal and economic issues.
12. 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
supervisors should set clear parameters for the work of their
employees. They should explain what they expect, delegate sufficient
authority to the employees to perform their tasks, and evaluate the
employees periodically to provide sufficient feedback. I believe that
supervisors should be accessible. They should not do the employees'
work for them, but they must provide adequate guidance and feedback. No
employee complaints have been brought against me.
13. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. In my past government jobs, I have
had close working relationships with Congress both while at the Federal
Trade Commission and the Office of Management and Budget. I have worked
effectively with Members of Congress and their staffs.
14. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your board/commission
comply with the spirit of the laws passed by Congress. It is extremely
important for members of the Federal Trade Commission to work closely
with the Commerce Committee and other stakeholders. The FTC should be
responsive to Congressional requests for information about agency
activities, ensure that the FTC enforces the laws as intended, and be
available to assist the Congress in studying specific legal and
economic issues within the agency's expertise and capacity.
15. In the areas under the board/commission jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
State your personal views. At the moment, I have no legislative action
to recommend that Congress consider regarding current FTC activities.
If confirmed, I will study this issue closely, and make any
recommendations to my colleagues and to Congress that I feel are
appropriate.
16. Please discuss your views on the appropriate relationship
between a voting member of an independent board or commission and the
wishes of a particular president. In my experience, Presidents appoint
individuals to independent boards or commissions who reflect their
general philosophy. Presidents do not have the time or inclination to
become involved in the daily business of such boards or commissions. If
confirmed, I would expect to adhere to the tradition of the FTC and
work with my colleagues to assess independently the various issues
presented on the basis of the facts at hand and the relevant legal and
economic considerations.
The Chairman. Thank you very much for your statement. We
intend to move your nomination next week.
Mr. Muris, the Federal Trade Commission recently completed
a follow-up to its study on the marketing of inappropriate
content to minors by the movie/video game/music industries, and
I believe there will be another complete study issued sometime
this fall, is that correct?
Mr. Muris. Yes, sir.
The Chairman. I just hope that you can assure this
Committee that you will continue to track the issue. It is an
important one to this Committee and, more importantly, to
families all across America. It is not an issue of censorship.
It is an issue concerning the marketing of material that these
industries themselves have deemed inappropriate to children,
and I hope you will view it in that context, and I hope you
will give some priority to this issue.
Mr. Muris. Yes, Senator, I will. I think the Commission has
done very good work in this area, and I would certainly
recommend to my colleagues, if confirmed, that the Commission
continue that work.
The Chairman. In recent years, the Federal Trade Commission
has acted on various occasions when it appeared that brand-name
drug companies and generic drug companies were working together
keeping generic drugs off the market to benefit themselves but
harm consumers.
In fact, there has been recent cases where brand-name drug
companies have paid, actually paid money to generic drug
companies to delay or keep them from producing those same drugs
that the brand-name drug company is producing. Do you think
that there are any changes in the law that would be appropriate
to deter this conduct?
Mr. Muris. Certainly, what has happened under Hatch-Waxman
raises serious problems, and I think the Commission has been
appropriately vigilant. There is a case in litigation which I
obviously do not want to comment on here. The FDA is
considering new regulations, and that is appropriate, and it
may be that legislation is needed if the regulations cannot
change the incentives to harm consumers that exist in the
current law and regulations.
The Chairman. Clearly, the intent of Hatch-Waxman was to
make available generic drugs as early as possible and, at the
same time, protecting the patent rights of the brand-name drug
manufacturers, some kind of careful balance.
Is there not ample evidence that this, at least the intent
of this law is being violated, at least in certain cases?
Mr. Muris. I believe there is. The FTC has a study
undergoing right now to see just how widespread the problem is,
and I think the results of that study will obviously inform
whatever recommendations that could be made, but there clearly
have been problems thus far.
The Chairman. And I am sure you appreciate that the issue
of the cost of prescription drugs, particularly to seniors, is
a major problem in America today.
Mr. Muris. Yes, I do. In fact, one of the very first
projects I worked on as a young staffer at the Federal Trade
Commission, 27 years ago, was to try to make it easier for
generic drug substitution, so I have had a longstanding
interest in this issue.
The Chairman. Finally, the issue of Internet privacy
continues to be one that we are going to have to address. There
are divisions of opinion as to how to address that issue within
this Committee, which is one reason why we have not moved
forward with legislation. Do you agree with the FTC's
recommendation that Congress should enact legislation to
regulate the collection and use of consumer information online?
Mr. Muris. Senator, that is obviously a very important
question, and I think the FTC has done several very beneficial
things. It has provided information to the Congress and to the
public. It has indeed been partly responsible for making the
issue as prominent as it is. It has brought several important
cases, in areas of deceptive and fraudulent spam, in pretexting
and identity theft. It has had an excellent role, and I would
hope that role would continue.
The specific issue of legislation is a new issue to me, and
I have been studying it. It is a very complex issue, and at
this time I have no specific legislative recommendation. It is
one that I would hope to be educated on by Members of Congress,
by privacy advocates, by business groups, and by my future
colleagues, if confirmed.
The Chairman. Well, I want you to make that a priority item
if you could, because the issue is going to get much larger
than smaller. More and more Americans will go online. There
will be more and more abuses by some of the less ethical
vendors, or people who use the Internet, and there will be
greater concerns about individual Americans' privacy.
Obviously, we do not want to enact legislation that would
harm the use of the Internet, but at the same time there are
already examples of these cookies moving from one place to
another, and Americans certainly are not aware, unfortunately,
until perhaps they have experienced some discomfort or pain
from the knowledge that information that they never believed
would be made public is not only being made public, it is being
bought and sold by different organizations, so I hope you
appreciate that this issue, I think, is one that is not going
away. It is going to grow a lot bigger.
Mr. Muris. I agree, Senator, privacy is a very important
value. I know there are three different positions on
legislation at the current Commission, and several bills in
this Committee. As I said, it is a new issue to me, but I have
done a lot of reading, and I hope to be able to continue that
reading, and I will make it a priority.
The Chairman. Thank you. Senator Hollings.
Senator Hollings. Well, Mr. Muris, you have already served
with distinction under President Reagan as a Commissioner. We
welcome you back in your chairmanship.
But getting right to the point, now, about being educated.
We have had 5 years of education under the Federal Trade
Commission and Chairman Pitofsky, and they approached it as you
indicate it should be approached, in a deliberate fashion,
namely, trying to get self-regulation, but the Internet is a
many-splendored thing, and the vendors and otherwise are
awfully competitive, and you cannot get them all to agree. We
have tried and tried.
We have outlined some guidelines at the Commission level.
They failed to respond to it, and we live in the real world,
and that is why we are looking at legislation. You say it is
complex, and maybe I am overeducated, or oversimplifying it,
but it looks like a question of whether or not we have opt-in
requirements. Everybody agrees on opt-out, but the opt-out has
not worked.
And mind you me, these are people taking private
information and making a business out of it. Once you put your
health or your financial information and so forth on the
Internet, it is there, but these are folks who are really
making a business of it, and the consumer is unaware, and it
seems to me we are going to have to get some kind of
requirement about opt-in.
Would you like to comment?
Mr. Muris. Senator, I understand the seriousness of the
issue. Although there has been a lot of discussion at the
Federal Trade Commission and a lot of discussion here, the
issue really is new to me.
One of the things I have tried to do is look in recent
weeks at privacy issues across the broad spectrum. I know there
are concerns about treating online and offline differently. I
know there are issues about various types and levels of
privacy. There are new types of technology, and I really have
not had an opportunity to talk to the professionals at the FTC,
to talk in-depth to various Members of Congress, to privacy
advocates, and to people in the business community. Until I can
do that and study the information that is just coming to the
fore daily, I am not yet ready to say which type of
legislation, if any, is preferable.
Senator Hollings. You are a good candidate for
confirmation.
[Laughter.]
Mr. Muris. Thank you.
Senator Hollings. The other thing of concern is your
articles relative to monopolies. After all, you are going now
on a consumer protection agency, and not a monopoly protection
agency, and your articles indicate that monopolies are
wonderful things that promote efficiencies, and even where
there is anticompetitive behavior, so long as there is some
competition in that market, that you would hesitate acting
under your charge as a trade Commissioner, and particularly as
the Chairman. What is your comment about that?
Mr. Muris. Senator, I have written widely about
monopolization. It is clear, under the law, that it is
difficult to bring a monopolization case. When I was Director
of the Bureau of Consumer Protection before we did bring
monopolization cases, and I support them, and as well in the
Antitrust Division. My criticism really had two parts. One, and
this was not a criticism about the FTC, because the FTC did not
do this, there were a very large increase in investigations at
the Department of Justice aimed at sending a signal that I
thought was inappropriate.
I do think that one has to look closely at monopolization,
and I would expect that that would continue. It is not a major
part of the FTC's resource expenditure, but there are good
monopolization cases, and I would have no hesitation to bring a
case if I thought it was a good case.
Senator Hollings. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Senator Stevens.
Senator Stevens. Mr. Muris, I remember very well your past
service, and I commend you for being willing to accept another
position in this agency, so I have no questions.
Mr. Muris. Thank you, Senator.
The Chairman. Senator Hutchison. Well, it looks like--oh,
excuse me.
[Laughter.]
The Chairman. I was going to say I thought you got off
pretty easily, but I note----
Senator Hollings. Oh, no.
The Chairman. I note the presence of Senator Wyden.
STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Mr. Chairman, and I appreciate
this hearing. I happen to think the Federal Trade Commission,
as Senator Hollings suggested, is one of the most important
places in government from the standpoint of the consumer, and I
do have a number of questions that are important to me.
Let me begin, if I might, Mr. Muris, the White House
announced recently that the President would be vigilant in
ensuring that consumers will be protected from price-gouging at
the gasoline pump this summer, and he instructed federal
agencies to keep a close eye to make certain that there is not
price-gouging going on.
If you are confirmed as Chairman of the Federal Trade
Commission, how would you carry out the Presidential directive
to make sure that consumers do not get gouged at the pump this
summer?
Mr. Muris. Senator, I think it is a very important issue,
and I will make it a top priority to recommend to my
colleagues, if confirmed, that the Commission vigorously
investigate such allegations.
Senator Wyden. Other than that, you have no specifics you
can give us this morning about how you would carry that out? I
mean, the President said this is going to be a big priority to
him, and the fact of the matter is, all across this country,
consumers are trying to figure out how to pay these gas bills,
and they would like to know how the government is going to
stand up for them.
Mr. Muris. Senator, I am at somewhat of a disadvantage
here. The Commission just had a very extensive investigation
with a lot of nonpublic information. Until and if I am
confirmed, I will not have access to that information, but I
believe it is very important for the Commission to investigate
alleged violations of the law. The Commission has had
investigations in this area, and I would recommend that they
continue, and that they be prosecuted vigorously.
Senator Wyden. Do you think redlining is anticompetitive?
Redlining is a practice where the distributors and the jobbers
are prevented by refineries--we have got it going on in the
West Coast--from being able to compete. My view is, it is
anticompetitive. I think it is about as anti-free enterprise as
anything you can find. Do you think redlining is
anticompetitive?
Mr. Muris. Senator, this is an area upon which my knowledge
is limited to that in two public statements released by the
Commission last week and by the hearings that this Committee
held. I certainly believe that it can be anticompetitive. I
know there are different forms of redlining.
For whatever reason, the Commissioners in their brief
discussion of that issue in the public statements that they
released last week did not think that the practices they
investigated amounted to an antitrust violation. Without being
able to look at the voluminous investigation that they had, I
cannot tell you whether I agree with that opinion or not, but
that kind of practice certainly can be anticompetitive, and
under the antitrust laws there are some practices which are
anticompetitive that are not illegal. Indeed, some of them are
even exempt.
Senator Wyden. Well, here is what the Commission found,
because redlining is rampant up and down the West Coast of the
United States, and the Commission found that. Let me read to
you from their report last week:
Most of the Western states refiners prevented their jobbers
from competing with them to supply branded gasoline to
independent dealers in metropolitan areas, a practice called
redlining.
That is what the Commission found, that redlining is going
on in places like Arizona and Oregon, Washington, and
California, places that have some of the highest gasoline
prices in the country.
Now, it may not be illegal under current law, but it sure
as heck is anticompetitive, and I would like to see the head of
the Federal Trade Commission do something about it.
Do you have any response to that?
Mr. Muris. Senator, I do know that the Commission has just
had an investigation, and that for reasons, again, I am not
fully aware of, because I have not seen the nonpublic
documents, concluded that although various forms of redlining
existed, that they could not find an antitrust violation.
I do think it is very important for the FTC to be on top of
this issue, to provide Congress with information, and I will
make it a priority to investigate these practices.
Senator Wyden. Well, again, I would hope that when you find
anticompetitive practices, you do more than say, ``Gosh, that
is just too bad'', because the American people are hurting now.
In my part of the country they are getting clobbered in terms
of gasoline prices, and for the Federal Government to say, as
the Commission did last week, that redlining is going on, that
it is anticompetitive, but gosh, the laws are just not on the
books and that is the way it goes, that is not acceptable to
me, and I hope it will not be acceptable to you if you are
confirmed as the chair of this Commission. I thought that was a
very, very regrettable message to send to the American people.
It would be one thing to say, we found redlining, we found
anticompetitive practices, but you know, we cannot do anything
about it under current law, and the Congress ought to dig in
and do its job and give us the tools we need. That would have
been one thing. But to just say, there is anticompetitive
practices going on, and that is the way it goes, is
unacceptable to this Member of Congress.
Let me, if I might, ask you about one other question, and
that is the matter of airline competition. My guess is that
before the year is over you may be able to count the number of
major airlines on the fingers of one hand. Remember, the
history of deregulation is supposed to bring more competition,
but what it has really done is bring consolidation, and the
airline industry is basically deregulated in name only, and
they are just keeping people in the dark about the information
they need.
In fact, the Inspector General sent me a report yesterday
saying that when flights are chronically late--constantly
canceled, the airlines are refusing to disclose that. Here we
are, heading into a season that by the industry's own
projections is going to be bedlam for passengers, and I would
like to know what, if anything, you are willing to do to
promote the rights of passengers when they are not being told
the truth?
As you know, aviation competition, in a precise sense, is
not within the purview of the Federal Trade Commission, but
certainly it is within the purview of the Federal Trade
Commission to take steps when the airlines are not being
straight with the public about scheduling, about delays, about
not giving them what they purchase.
How would you handle that issue?
Mr. Muris. There are certainly serious problems raised
there. I do not fully know the law in this area. I suspect that
the Department of Transportation has the primary jurisdiction
over these issues. I know the Antitrust Division deals with the
merger issue.
I would certainly be willing to look at whatever the FTC
can do and work with the Committee in that area, because it is
a very important one for consumers.
Senator Wyden. I understand with respect to mergers and
consolidations that there are areas where clearly your agency,
under the current statutes, cannot lead, but with respect to
misleading the public, which is what that industry is doing--
the Inspector General has said, for example, that even under
optimum conditions, when the weather is perfect, all the
runways are operating, these airlines cannot fulfill what they
are pledging to consumers, and that is a consumer issue. That
is an issue that is within the beat of the Federal Trade
Commission, and I sure hope that you will follow it up.
I enjoyed my visit with you. I think you are a good man. I
am planning to vote for you in this Committee and on the floor,
but I think you know--we talked about through my years in the
House and the Senate I probably have looked on more occasions
to the Federal Trade Commission for leadership on these
consumer protection issues than any Member of Congress.
I think it is an extraordinarily important agency, both
from the standpoint of your tools under existing law, and the
bully pulpit function that the Federal Trade Commission can
perform, and I think that in the areas that I have touched on,
particularly gasoline prices and the question of getting a fair
shake for airline passengers, you can do more.
I thought it was a very unfortunate opinion that the
Commission issued last week on gas prices. To tell the American
people that they found anticompetitive practices, and that is
tough, is just unacceptable to me. I want you to know that if
you are confirmed, and I hope that you will be, I will be
calling on you often, and Mr. Chairman, I thank you for the
chance to ask questions.
The Chairman. Thank you very much. Professor Muris, welcome
again. As I say, we will have a markup next week, and we will
move your nomination as quickly as possible. I am confident
that we can get that done before the Memorial Day recess. Thank
you again for your willingness to serve, and we look forward to
seeing you often here before the Committee and in other arenas.
Thank you.
Mr. Muris. Thank you very much, Senator and members of the
Committee.
The Chairman. The next panel is Ms. Maria Cino, Assistant
Secretary-Designate, and Director General of the United States
and Foreign Commercial Service of the Department of Commerce,
Dr. Kathleen Cooper, Under Secretary-Designate for Economic
Affairs for the Department of Commerce, and Mr. Bruce Mehlman,
the Assistant Secretary-Designate for Technology Policy of the
Department of Commerce. Would you please come forward?
The Chairman. We will wait just a second.
Ms. Cino, do you have any family members that are with you
that you would like to introduce today?
Ms. Cino. I do not, sir.
The Chairman. And Dr. Cooper.
Dr. Cooper. No, I do not. They are still in Texas.
The Chairman. And Mr. Mehlman.
Mr. Mehlman. Yes, Senator. I brought enough for all of us,
I think.
The Chairman. Good.
Mr. Mehlman. I have my parents, Art and Judith Mehlman.
The Chairman. Please stand up. Thank you.
Mr. Mehlman. My wife, Amy Mehlman.
The Chairman. Where is she? Please stand up. Thank you.
Mr. Mehlman. My mother-in-law, Judith Rodman, and my
father-in-law, Bruce Marshak, who may win the award for
farthest distance traveled. He is a career prosecutor down in
the U.S. Virgin Islands. I am fortunate that he flew all the
way up for me.
The Chairman. Ah. Welcome. That is a hardship post down
there in the Virgin Islands.
[Laughter.]
The Chairman. Thank you all for being here, and I know this
is a proud time for all of you. I know you are especially
proud, because Mr. Mehlman has progressed very far in a very
short period of time. I thank the witnesses for being here, and
we would like to hear your opening statements, beginning with
you, Ms. Cino.
STATEMENT OF MARIA CINO, ASSISTANT SECRETARY-
DESIGNATE AND DIRECTOR GENERAL OF THE UNITED
STATES FOREIGN COMMERCIAL SERVICE, DEPARTMENT
OF COMMERCE
Ms. Cino. Thank you. Mr. Chairman, members of the
Committee, it is an honor and a privilege to come before you as
President Bush's nominee for the position of Assistant
Secretary and Director-General of the U.S. Foreign Commercial
Service. Thank you for granting me this hearing today. I know
how busy you are and I really appreciate the attention to this
nomination.
I look forward, if confirmed, to working with Members and
staff of this Committee on matters related to export promotion.
I would like to thank President George W. Bush and Secretary of
Commerce Don Evans for their support of my nomination.
Small and medium-sized American businesses understand and
appreciate the unique and valuable role played by the
Commercial Service in trade promotion and trade compliance. If
confirmed, I have set three goals for the agency: increase the
number of exports from traditionally underserved communities,
which would include minority, rural, and women-owned business,
increase the number of new exports, and help current exporters
increase the number of markets to which they export and,
finally, improve the quality of export assistance provided to
American companies by the Commercial Service by enhancing the
skills of our employees through professional development
opportunities.
I welcome the challenge of leading the worldwide field
force organization of 1,700 dynamic individuals. My 20-plus
years of leading field-based organizations, developing and
adhering to complex budgets, setting short and long-term
strategic goals, building coalitions, and developing,
motivating, and mentoring staff have prepared me for this
position. I invite each of you to visit your local U.S. Export
Assistance Center to observe first-hand the tremendous service
that those men and women provide to your constituent businesses
seeking to export.
Finally, let me say that I am humbled. I could never have
imagined that, while growing up in a blue-collar, ethnic and
conservative household, that I would be sitting here today
before the U.S. Senate at a confirmation hearing as Assistant
Secretary for the Department of Commerce. I want to thank my
parents for teaching me that if I work hard, anything is
possible, and I also would like to thank my colleagues and
friends, who challenged me and gave me the opportunity to grow.
I appreciate the honor of being here today. If confirmed, I
look forward to working with Under Secretary Grant Aldonis and
my sister International Trade Administration bureaus to promote
U.S. exports, to support U.S. trade, and enforce trade
agreements.
Thank you very much.
[The prepared statement and biographical information of Ms.
Cino follow:]
Prepared Statement of Maria Cino, Assistant Secretary-Desgnate
and Director General of the United States Foreign Commercial Service,
Department of Commerce
Mr. Chairman, Senator Hollings, Members of this Committee, it is an
honor and a privilege to come before you as President Bush's nominee
for the position of Assistant Secretary and Director General of the
U.S. Foreign and Commercial Service. Thank you for granting me this
hearing today. I know how busy you are and I really appreciate your
attention to this nomination. I look forward, if confirmed, to working
with the Members and staff of this Committee on matters related to
export promotion.
I would like to thank Senator Allen for that kind introduction.
I also want to thank President George W. Bush and Secretary of
Commerce Don Evans for their support of my nomination.
Mr. Chairman, Congress created the U.S. Foreign and Commercial
Service to provide export assistance at a reasonable cost to American
companies. From the beginning, our mission has been to help small and
medium-sized American business export their U.S. made products and
services and protect the interests of U.S. businesses abroad. The
Commercial Service has grown into a worldwide organization that
facilities export transactions by linking U.S. suppliers with
international buyers through our network of 105 domestic and 159
international field offices.
Small and medium-sized American businesses understand and
appreciate the unique and valuable role played by the Commercial
Service in trade promotion and trade compliance. Federal, state and
local international trade agencies also value the Commercial Service.
Over the years we have forged a strong partnership with the Trade
Promotion Coordinating Committee to leverage scare resources and
provide seamless export assistance to clients.
If confirmed, I will work to further strengthen the partnerships
created through the Trade Promotion Coordinating Committee to better
leverage federal resources. The Commercial Service actively pursues
partnerships with government agencies and the private sector. I believe
that working together through partnerships at the point of service
delivery is the most effective way to help American exporters in
today's climate of increased global competition.
We live in a rapidly changing society. Our nation continues to
evolve into a service orientated, high-tech based economy where an
increased number of exporters are from non-traditional backgrounds. The
Commercial Service must continue to respond to these changes.
If confirmed, I have set three goals for the Agency:
Increase the number of exporters from traditionally under-
served communities (minority, rural and women-owned businesses).
Increase the number of new exporters and help current
exporters increase the number of markets to which they export.
Improve the quality of export assistance provided to
American companies by the Commercial Service by enhancing the skills of
our employees through professional development opportunities.
This is truly an exciting time and one of tremendous opportunity
for U.S. exporters. Commercial Service employees are dedicated,
hardworking and committed to providing export assistance services that
are second to none. Their enthusiasm is contagious. I invite each of
you to visit your local U.S. Export-Assistance Center to observe
firsthand the tremendous service that these men and women provide to
your constituent businesses seeking to export.
I welcome the challenge of leading a worldwide field-based
organization of 1700 dynamic individuals. My 20-plus years of leading
field-based organizations, developing and adhering to complex budgets,
setting short and long term strategic goals, building coalitions, and
developing, motivating and mentoring staff have prepared me for this
position. In addition, the contacts I have made in Federal, state and
local agencies will enable me to further the goals of the U.S.
Commercial Service. It is my hope that my skills in developing
successful, strategic marketing and outreach programs will heighten the
awareness and value of the Commercial Service's programs to American
companies.
Finally, let me say that I am humbled. I could never have imagined
that while growing up in a blue-collar, ethnic and conservative
household that I would be sitting here today before the United States
Senate at a confirmation hearing to be the Assistant Secretary and
Director General for the United States & Foreign Commercial Service.
I want to thank my loving parents for teaching me that if I worked
hard, anything was possible. I especially want to thank my late father
for not heeding the advice of my grandfather who insisted that it would
be a waste of money to send a girl to college. I also want to thank my
colleagues and friends who challenged me and gave me the opportunity to
grow.
I deeply appreciate the honor of being here today. If confirmed I
look forward to working with Grant Aldonas and my sister International
Trade Administration bureaus to promote U.S. exports, support U.S.
trade policies and enforce trade agreements.
Thank you.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Maria Cino.
2. Position to which nominated: Assistant Secretary of Commerce and
Director General of the United States & Foreign U.S. Commercial
Service.
3. Date of nomination: April 6, 2001.
4. Address: Information unavailable to the public.
5. Date and place of birth: 4/19/57, Buffalo, New York.
6. Marital status: Single.
7. Names and ages of children: None.
8. Education: St. John Fisher College, 1975-1979, BA--Political
Science; University of Dayton School of Law, 1979-1980.
9. Employment record: Department of Commerce, Senior Advisor, Grant
Aldonas (Supervisor), Washington, D.C., April 2001-Present; Republican
National Committee, Deputy Chairman for Political Operations and
Congressional Affairs, Fred Meyers (Supervisor), Washington, D.C., May
2000-March 2001; Bush for President, Inc., National Political Director,
Karl Rove (Supervisor), Austin, TX, March 1999-April 2000; Wiley, Rein
& Fielding, Government Affairs Consultant, Fred Fielding (Supervisor),
Washington, D.C., March 1997-March 1999; National Republican
Congressional Committee, Executive Director, Bill Paxon (Supervisor)
Washington, D.C., January 1993-March 1997; Congressman Bill Paxon,
Chief of Staff, Bill Paxon (Supervisor), Washington, D.C., January
1989-January 1993; Paxon for Congress, Campaign Manager, Bill Paxon
(Supervisor), West Seneca, NY, August 1988-December 1988; American View
Point, Research Analyst, Linda DiVall (Supervisor), Alexandria, VA,
January 1986-July 1988; Republican National Committee, Washington,
D.C., Executive Assistant to the Political Director, January 1985-
January 1986, State and Local Programs Director, January 1983-January
1985, Program Director, Political Education, July 1981-January 1983; Bo
Sullivan for Governor, Assistant Research Director, Bo Sullivan for
Governor Committee, Essex, NJ, January 1981-June 1981.
10. Government experience: Department of Commerce, Senior Advisor,
April 2001-Present; Congressman Bill Paxon, Chief of Staff 1989-1993.
11. Business relationships: Wish List (Political Group) Board
Member, 1997-1999; VIEW PAC (Political Group) President, 1997-2000;
EnterpriseWorks (Non-Profit) Trustee, 1988-2001, resigned 2/01.
12. Memberships: None.
13. Political affiliations and activities: (a) None. (b) National
Republican Congressional Committee, Executive Director, 1993-1997; Bush
for President, Inc., National Political Director, 1999-2000; Republican
National Committee, Deputy Chairman of Political Operations and
Congressional Affairs, 2000-2001; Wish List, Board, 1997-1999; VIEW
PAC, President, 1997-1999. (c) Collins for Senate, $500 (1996); Wish
List, $1000 (1998).
14. Honors and awards: None.
15. Published writings: None.
16. Speeches: None.
17. Selection: (a) I believe that the President nominated me for
this position because of my unique combination of management skills,
extensive experience managing nation-wide field operations, budgetary
and fiscal planning acumen, demonstrated leadership in building
coalitions and my long-standing commitment and success in motivating,
mentoring and developing employees. (b) I believe that my 20-plus years
of experience in managing large, national field operations and staff
qualifies me for this position, which requires managing a worldwide
operation of over 1,700 employees in 250+ offices located in 85
countries and 48 U.S. states. I also have significant experience in
developing and managing large and complex budgets, motivating and
mentoring geographically dispersed employees and setting clear
priorities, goals and objectives.
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, I have severed all relationships with
present employers, business associations and organizations.
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,
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 if applicable? Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealing 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 for which you have been nominated. None.
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 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? Over the past 10
years, in my capacity as Chief of Staff for a Member of Congress and as
a Government Affairs Consultant for the law firm of Wiley, Rein and
Fielding, I have worked on a wide range of issues. My primary role was
one of gathering information and arranging for all interested parties
to discuss their specific views. The issues I worked on ranged from
telecommunications, transportation, housing, banking and health care.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. I will consult with the General Counsel of the Department of
Commerce and, if appropriate, divest myself of conflicting interests,
recuse myself, or obtain a conflict of interest waiver under 18 U.S.C.
Sec. 208 (b) if the interest is not substantial.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer 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 a breach of ethics for
unprofessional conduct by, or been the subject of any complaint or
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, 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 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 the
deadlines set by congressional committees for information? Yes.
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.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress. The
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 Office of Legislative and Intergovernmental Affairs does not
itself issue regulations and is not typically involved in the review of
regulations issued by agencies of the Department. However, to the
extent that I do not participate in the regulatory review process, I
will ensure that regulations issued by the Department comply not only
with the letter, but also the spirit of laws passed by Congress.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. Mission: The overall
mission of the U.S. Commercial Service is to aggressively promote the
export of goods and services from the United States, particularly by
small and medium-sized businesses, and to protect U.S. business
interests abroad. The major programs of the U.S. Commercial Service
include: E-commerce--capitalizing on new technologies and developing
new e-commerce products and services to provide American companies with
more accessible, cost-effect export solutions and opportunities;
Services exports--adapting to the growth of the U.S. services
industries by developing new programs to support services exports;
Rural Export Initiative--providing rural companies with better access
to export assistance through a comprehensive network of partnerships,
new technologies and unique products; Communication and Outreach--
raising the profile of the wide array of Federal export assistance
programs available to small and medium-sized American companies;
Professional Development and Retention--implementing programs to
attract talented professionals and retain and motivate employees
through professional growth and development opportunities; Global
Diversity Initiative--providing minority-owned and operated firms with
access to export assistance through a comprehensive array of products,
services and programs. The U.S. Commercial Service remains committed to
achieving greater operational cost savings and efficiencies through
automation and streamlining, while maintaining its high level of client
service and satisfaction.
6. Are you willing to appear and testify before any duly
constituted committee of 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? My 20
years of leading field-based organizations, developing and adhering to
complex budgets, setting short- and long-term strategic operational
objectives, building coalitions, and developing, motivating and
mentoring staff have qualified me for this position. In addition, the
contacts I have made in Federal, state and local government will enable
me to further the goals of the U.S. Commercial Service by nurturing and
leveraging partnerships. Further, my skills in developing successful,
strategic marketing and outreach programs will heighten the awareness
and value of U.S. Commercial Service programs to American companies.
2. Why do you wish to serve in the position for which you have been
nominated? This position will allow me to apply my extensive
experience, skills and abilities to meet the significant challenge of
increasing the number of small and medium-sized U.S. exporters. In
doing so, the U.S. Commercial Service will play a part in improving the
prosperity of our country by adding new and higher paying jobs by small
and medium-sized enterprises (the fastest growing segment of the U.S.
economy), and increasing local tax bases to help communities across the
country.
3. What goals have you established for your first 2 years in this
position, if confirmed? In my first 2 years in this position, I plan
to: Increase the number of new exporters and help current exporters
increase the number of markets to which they export; Increase the
number of exporters from traditionally under-served communities
(minority-, rural-, women-owned businesses); Improve the quality of
export assistance provided to American companies by the U.S. Commercial
Service by enhancing the skills of our employees through professional
development 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? This position requires strong management,
motivational, and strategic planning skills for a widely dispersed,
worldwide network. These are skills that I have successfully cultivated
throughout my career and I believe that they will serve me well in this
position. If confirmed, I will continue to seek opportunities to
improve my skills in this capacity.
5. Please discuss your philosophical role of government. Include a
discussion of when you believe the government should, involve itself in
the private sector, and what standards should be used to determine when
a government program is no longer necessary. Congress created the U.S.
Commercial Service to provide American companies with reliable market
information and export assistance at a reasonable price. I believe that
it is necessary for federal agencies to play a role in providing export
assistance to small and medium-sized enterprises because the cost of
getting reliable market information from the private sector would
preclude most small and medium-sized companies from exporting. The
export assistance provided by the U.S. Commercial Service to small and
medium-sized businesses helps to improve the prosperity of our country,
add new and higher paying jobs and increase local tax bases to help
communities throughout the nation.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The mission
of the U.S. Commercial is to help small and medium-sized American
companies export. Major Objectives: The U.S. Commercial's primary
objective is to provide small and medium-sized American companies with
export assistance and customized business solutions so that they can
effectively compete in the global marketplace. Operational Objectives:
The U.S. Commercial Service remains committed to achieving greater
operational cost savings and efficiencies through automation and
streamlining, while maintaining its high level of client service and
satisfaction.
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. While
the U.S. Commercial Service mission (to help small and medium-sized
American companies export) will not change, the way in which the
mission is accomplished will likely change in response to the following
market forces: Technological advances that will require the development
of new and more effective ways to reach clients; Growth in Service
industries that has dramatically changed the structure of the U.S.
economy and will result in greater demand for U.S. services exports;
Globalization that will introduce a growing number of American
companies to exporting.
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 over the past several years? At this time, I do not
believe that there are any current or foreseeable outside forces that
would preclude the U.S. Commercial Service from accomplishing its
mission. Certainly, there are challenges including the need to stay
abreast of technological advances and to use these new technologies to
better serve American companies. In addition, the U.S. Commercial
Service must remain flexible and able to respond to new challenges,
such as the emergence of new markets and industries. To do so, the U.S.
Commercial Service's 1700 employees must have access to professional
development, mentoring and other growth opportunities.
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? The U.S. Commercial Service has
successfully achieved its mission because it has been proactive in
responding to changes in the world economy, and adapting new
technologies to improve both internal business processes and the range
of products and services available to American companies. In addition,
we have invested in its employees through professional development
opportunities and prioritized resources.
10. Who are the stakeholders in the work of this agency? Small and
medium-sized U.S. businesses seeking export assistance are the U.S.
Commercial Service's primary stakeholders.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question two? If
confirmed, I would lead the U.S. Commercial Service's worldwide network
in providing small and medium-sized U.S. businesses with customized
export solutions.
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? If
confirmed, my responsibilities would be to implement effective and
efficient management processes to ensure that the U.S. Commercial
Service adheres to the established management and accounting controls
set by the Department and the International Trade Administration. These
processes would include training, accountability measures and
mechanisms for collecting and incorporating feedback. (b) What
experience do you have in managing a large organization? I have over 20
years experience in managing large, primarily field-based
organizations. My collective experience includes developing and
adhering to complex budgets, setting short and long-term strategic
operational objectives, building coalitions, and developing, motivating
and mentoring geographically dispersed staff.
13. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals. (a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals. I believe that identifying relevant performance
goals benefits both taxpayers and the Congress by increasing an
organization's accountability. Putting strong measures in place and
reporting on those measures to the Congress ensures that our funds are
being spent effectively and helps the agency stay focused on its core
mission. (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? Should an agency fail to achieve its performance
goals, the Congress should request an explanation of why performance
targets were not met and establish a timeline to correct deficiencies.
The willingness and ability of an agency to resolve performance issues
should determine the appropriate corrective action including the
possible elimination, downsizing, privatization, and consolidation. (c)
What performance goals do you believe should be applicable to your
personal performance, if confirmed? If confirmed, my personal
performance goals should be identical to the goals of the agency.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? My philosophy of
supervisor/employee relationships is to work with my staff to set goals
and priorities and establish a workable timeline for completion. Upon
agreement, I empower my staff to manage their projects and programs
while I monitor progress. I offer advice and guidance when needed. I
have never had a complaint brought against me.
15. Describe your working relationship, if any, with Congress. Does
your professional experience include working with committees of
Congress? If yes, please describe. As a Chief of Staff for a Member of
Congress and Government Affairs Consultant for a law firm, I worked
with Congress on a wide variety of issues which included
transportation, health care, banking, housing and telecommunications.
My professional experience included gathering and distributing
information. In addition, I arranged meetings for interested parties to
discuss the issues. The Committees of Congress I worked with were
Commerce, Banking, and Transportation.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. If confirmed, I will have an open, honest and
respectful relationship with the Inspector General. I intend to have
regular, candid conversations with the Inspector General to discuss the
findings of investigations. I will act on and implement Inspector
General's recommendations in a timely manner.
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 will make it a priority to work closely with the Committee
and other stakeholders to ensure that regulations, policies and
procedures implemented by the U.S. Commercial Service will comply with
both the spirit and letter of the laws passed by Congress. In addition,
I will consult with the Department's Office of General Counsel and
Office of Legislative Affairs to fully research and document any and
all actions I may take relating to laws, mandates, regulations and
directives of the Congress.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. Personally, I believe that there are two
primary areas under the Department's jurisdiction that Congress should
consider as priorities: Improving the quality and accessibility of
export assistance programs to small and medium-sized American
businesses; Ensuring compliance with international trade agreements
including technology, biotechnology, and intellectual property, to
provide American companies with full and fair access to global markets.
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.
If confirmed, I will 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. In
allocating resources, I will examine the U.S. Commercial Service's
programs, initiatives, priorities and staffing patterns to ensure that
funding levels support the agency's mission. My actions will be in
accordance with budget timetables established by the Department and
will be fully transparent and well documented.
The Chairman. Thank you, Ms. Cino. I think Senator
Hutchison wanted to make some comments about Dr. Cooper before
we proceed.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Thank you so much, Mr. Chairman. I did
want to introduce my friend, Dr. Kathleen Cooper, as a fellow
Texan, but also someone that I have known and worked with. She
has been my friend for a long time.
She is, of course, nominated to be Under Secretary for
Economic Affairs at the Department of Commerce, and she today
holds the job of Chief Economist at ExxonMobil Corporation. She
has been a clear voice for carefully monitoring the economics
of our energy situation, and has long advocated that we should
not be dependent on foreign supplies for our energy needs.
Dr. Cooper was Executive Vice President and Chief Economist
at Security Pacific Bank before she began work for ExxonMobil.
She has had an extensive career in economics, earning
undergraduate and graduate degrees from the University of Texas
at Arlington, and a Ph.D. in economics from the University of
Colorado. She has also served as co-chair of a Subcommittee of
trustees of the Committee for Economic Development, a Committee
made up of people from the business background, who also have
an interest in improving the stability of the international
financial system.
As I said, Mr. Chairman, I have known Kathleen for a long
time. She is not only a very smart person, and an experienced
person in the field of economics, but she is a person of great
character, and I recommend her fully to the U.S. Senate for
confirmation.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Hutchison.
Dr. Cooper, welcome.
STATEMENT OF KATHLEEN B. COOPER, Ph.D.,
UNDER SECRETARY-DESIGNATE FOR ECONOMIC AFFAIRS,
DEPARTMENT OF COMMERCE
Dr. Cooper. Chairman McCain and members of the Committee, I
am very pleased to be here today to talk with you about my
nomination. I thank this Committee for holding today's
hearings, and very much thank Senator Hutchison for her very
kind words of introduction and support.
I also want to express my gratitude to President Bush and
Secre-
tary Evans for the confidence that they have shown in me with
this nomination, because after all, confidence is a very
important element in any relationship. Over many years, the
American people, policymakers, and officials in other countries
have developed confidence in the statistics provided to them
about the U.S. economy.
The role of the Economics and Statistics Administration at
Commerce, the ESA, is, in fact, to make sure that that
confidence is well-placed. A very large share of the economic
and social data that measures the U.S. economy and moves
markets is produced by the analysts at the Bureau of Economic
Analysis, the so-called BEA, and the Census Bureau. It is
critical, as I am sure you would all agree, that policymakers
have the best information possible in making their decisions,
and that the American people have the best information possible
in making their decisions.
Accurate assessments of the growth rate of GDP, the level
of housing starts, and changes in retail sales--all of these
indicators of the U.S. economy and more, assist businesses and
not-for-profit organizations in their planning processes, and
certainly they assist policymakers with their decisions.
Knowledge about income growth and distribution and the makeup
and health of families also enhances government policy
determinations.
The onslaught of new goods and services being produced
today, created by the flood of innovation that our economy has
witnessed in the second half of the 1990's, presents
unprecedented challenges for BEA and the Census Bureau.
Americans and others have confidence in the answers provided to
them regarding these issues. Important reasons why are the
professionalism of the analysts who work for the U.S.
Government's economic statistical agencies, and the belief that
the latest and best measurement and analysis techniques are
being funded and utilized.
After several years of insufficient resource availability
for economic statistics, President Bush has requested increased
funding for BEA in order to upgrade the analytical capabilities
and yardsticks of our economy. I am committed to working hard
to ensure that these and future increases are used effectively
in an economy and a society that is increasingly organized
around information.
Our nation's statistical agencies are a treasured national
resource. If confirmed, I will work diligently to protect and
enhance this resource. Having spent my career as a user and
interpreter of the economic statistics produced by the BEA and
the Census Bureau, I relish the opportunity to lead and support
their efforts at a very important point in their existence, and
I look forward to working with this Committee and with other
ESA stakeholders in this important endeavor.
I thank you, and I would be happy to answer questions at
the appropriate time.
[The prepared statement and biographical information of Dr.
Cooper follow:]
Prepared Statement of Kathleen B. Cooper, Ph.D., Under Secretary-
Designate for Economic Affairs, Department of Commerce
Chairman McCain and members of the Committee, I am pleased to
appear before you today regarding my nomination as Under Secretary for
Economic Affairs at the Department of Commerce. I thank this Committee
for holding today's hearing and thank President Bush and Secretary
Evans for placing their confidence in me with this nomination.
Indeed, confidence is a crucial element in any relationship. Over
the years the American people, policymakers, and officials in other
countries have developed confidence in the statistics provided to them
about the U.S. economy. The role of the Economics and Statistics
Administration (ESA) of the U.S. Department of Commerce is to ensure
that that confidence is well placed. A very large share of the economic
and social data that measures the U.S. economy and moves markets is
produced by the analysts at the Bureau of Economic Analysis (BEA) and
the Census Bureau--and an ever-increasing share of that data is made
available electronically by STAT-USA--all a part of the Economics and
Statistics Administration of the Department of Commerce.
The American economy is constantly changing. The makeup of our
national output is evolving in ways that make it more challenging to
measure. Understanding these changes is a critical function of the
economic statistics organizations of the U.S. Government, as is
employing the more sophisticated techniques required. Priorities for
methodological adjustments have been set and some important changes
implemented in recent years, but more must be considered.
It is critical that policymakers and the American people have the
best information possible upon which to base their decisions. Accurate
assessments of the growth rate of GDP, the level of housing
construction, and changes in retail sales assist businesses and not-
for-profit organizations with their planning and policymakers with
their decisions. Knowledge about income growth and distribution and the
makeup and health of families also enhances government policy
determinations.
The onslaught of new goods and services being produced today,
created by the flood of innovation that has swept our economy in the
second half of the 1990's, presents unprecedented challenges to the BEA
and Census Bureau. Americans and others have confidence in the answers
provided to them regarding these issues. Important reasons why are the
professionalism of the economic and statistical analysts who work for
U.S. government organizations and the belief that the latest and best
measurement and analysis techniques are being funded and utilized.
After several years of insufficient resource availability for
economic statistics, President Bush has requested increased resources
for BEA in order to upgrade the analytical capabilities and yardsticks
of the economy. I am committed to working hard to ensure that these and
future resource increases are used effectively.
In an economy and society that is increasingly organized around
information, a nation's statistical agencies are a treasured national
resource. If confirmed, I will work diligently to protect and enhance
this resource. Having spent my career as a user and interpreter of the
economic statistics produced by the Bureau of Economic Analysis and the
Census Bureau, I relish the opportunity to lead and support their
efforts at a very important point in their existence, and I look
forward to working with this Committee and other ESA stakeholders in
this important endeavor.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Kathleen Marie Cooper (Maiden name: Bell, Nickname:
Kathy).
2. Position to which nominated: Under Secretary of Commerce for
Economic Affairs.
3. Date of nomination: April 30, 2001.
4. Address: Information unavailable to the public. Office: Exxon
Mobil Corporation, 5959 Las Colinas Blvd., Irving, Texas 75039.
5. Date and place of birth: February 3, 1945; Dallas, Texas.
6. Marital status: Married; Ronald James Cooper.
7. Names and ages of children: Michael Patrick Cooper, 25;
Christopher Phillip Cooper, 21.
8. Education: High school--Ursuline Academy, 1959-60; Our Lady of
Good Counsel Academy, 1960-63, Diploma, 1963; North Texas State
University--1963-64; Part-time student at Texas A&M, 1966-68;
University of Texas at Arlington--1968-70, B.A., Mathematics, July
1970; University of Texas at Arlington--1970-71, M.A., Economics,
August 1971; University of Colorado--1977-80, Ph.D., Economics,
December 1980.
9. Employment record: Administrative positions at the U.S. Civil
Service Commission, U.S. Public Health Service, U.S. Agricultural
Stabilization and Conservation Service, and U.S. Office for Civil
Rights (DHEW), 1964-1970, while completing my undergraduate degree;
Economics Department, University of Texas at Arlington, Arlington,
Texas, 1970-1971, Graduate Research Assistant; United Banks of
Colorado, Denver, Colorado, 1971-1981; Economic Research Analyst,
Corporate Economist, Chief Economist; Security Pacific National Bank,
1981-1990; Vice President & Senior Financial Economist, First Vice
President & Senior Financial Economist, Senior Vice President &
Economist, Executive Vice President & Chief Economist; Exxon
Corporation, 1990-1999; Chief Economist Exxon Mobil Corporation, 1999-
Present; Chief Economist and Manager, Economics.
10. Government experience: None.
11. Business relationships: Director & Vice Chairman, National
Bureau of Economic Research; Trustee, Committee for Economic
Development; Director, American Council on Capital Formation;
Treasurer, International Women's Forum; Vice Chairman, Conference of
Business Economists; Chief Economist, Exxon Mobil Corporation.
12. Memberships: National Association of Business Economists;
President, 1985-1986; U.S. Association of Energy Economics; President,
1996; International Women's Forum--Treasurer, 1999-2001; Conference of
Business Economists, 1991-Present--Incoming Vice Chairman; Council on
Foreign Relations, 2000-Present; Dallas Committee on Foreign Relations
since early 1990's.
13. Political affiliations and activities: (a) No political offices
held; never a candidate. (b) No memberships or offices held in or
services rendered to political parties or election committees during
the last 10 years. (c) Checks only available for the period since 1994:
(1994) Kay Bailey Hutchison for Senate--$500; Friends of Kay B.
Hutchison Legal Fund--$250; Republican Campaign Council--$750. (1995)
Kay B. Hutchison--$500; Republican Campaign Council--$500. (1996) RNC--
$500; RNC Victory $1,000; Kay B. Hutchison--$500. (1997) Governor Bush
Committee--$250; Kay B. Hutchison--$500. (1998) Governor Bush
Committee--$500. (1999) Governor Bush Presidential Exploratory
Committee--$1000. (2000) McCain 2000--$1000; Republican Presidential
Roundtable $5000; RNC Victory 2000--$675; Victory 2000 Presidential
Trust $2500; RNC--$1000; Bush-Cheney Recount Fund--$1000; Friends of
Carole Keeton Rylander--$500.
14. Honors and awards: Scholarship, Ursuline Academy (freshman
year, high school), 1959; Scholarship, North Texas State University,
1963-1964; Graduate assistantship to University of Texas at Arlington,
1970--1971; Omicron Delta Epsilon Economics Honor Society, early
1970's; Dallas Real Estate Board Special Award for paper prepared on
local market, 1972; Distinguished Alumna Award, University of Texas at
Arlington, 1992; Senior Fellow, National Asociation of Business
Economists; Senior Fellow, U.S. Association of Energy Economics.
15. Published writings: ``Effects of Race on Property Values,'' The
Annals of Regional Science, The Western Regional Science Association,
December 1972; ``Re-Thinking the Fundamentals of Interest Rate
Determination,'' Business Economics, January 1983; ``Will High Real
Interest Rates Persist?'' Business Economics, April 1985; ``NABE's
Role: Fostering the Professional Growth of Business Economists,''
Business Economics, April 1986; ``Real Interest Rates: The Unpuzzle,''
Business Economics, January 1987; ``Commentary: U.S. Banking in an
Increasingly Integrated and Competitive World Economy,'' Journal of
Financial Services Research, 1990.
16. Speeches: Very few external presentations were given during my
tenure with ExxonMobil; most were internal. Copies of two are provided,
however, from the past 5 years.
17. Selection: (a) Most likely due to my long experience as a
business economist in a variety of companies and my involvement/
leadership positions in business economics professional organizations.
(b) The reasons enumerated in (a) above provide evidence of my
qualifications for this position. In addition, my professional career
has been spent analyzing and interpreting the output of the statistical
agencies that report to this position (BEA and Census). I have a deep
respect for the importance of these organizations, their leadership,
and their output--which will allow me to provide the kind of leadership
they deserve.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, business associations or business organization 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 defined benefit pensions from each of my
three primary employment relationships that will be paid to me by
formula beginning at the age of 65. I currently have outstanding vested
stock options and a long-term bonus that will be exercisable and paid
upon termination of my employment with ExxonMobil.
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 of which I am
aware.
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 of which I am aware.
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 met with staff
members of some government agencies and Congressional committees in
Fall 2000 and early in 2001 to provide an overview of world energy
supply and demand over the long term. The purpose was to provide
clarifying material to decisionmakers in the hope that any U.S. energy
policy decisions made would take a long-term and global perspective.
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
recuse myself from decisionmaking if any conflict arises. (I have no
trust agreements in place, nor do I plan to execute any).
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 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. My two former
bank employers and ExxonMobil may have been a party in interest in an
administrative agency proceeding in the course of doing business. All
have certainly been involved in litigation. The petroleum industry is
sporadically subject to Justice Department, FTC, and/or other agency
investigations on a range of issues. Banks are scrutinized by
regulators, competitors, and customers as well and are certainly
investigated and/or sued with some regularity. Lawsuits are, of course,
omnipresent in the business world, but all three organizations operated
then and now according to high ethical standards.
My positions with these firms did not regularly entail involvement
with lawsuits and/or investigations, except occasionally to recommend
an expert witness (economist) to be considered in working on a case. I
was involved in two cases while at Security Pacific, however.
A group of California residents who filed suit that Security
Pacific and other California banks colluded to hold the prime interest
rate above ``normal'' levels. My role was to provide data and backup
material about the relationship of the prime interest rate with other
interest rates governed by the Federal Reserve Board. I do not know the
case's resolution but believe that it was based in San Francisco.
A former employee's complaint that he was unfairly treated when
released from his duties with the bank. His name was Tom Graves; he had
worked directly for me. He sued the bank 6 to 9 months after having
been terminated; I and other bank employees provided depositions and
the case was ultimately settled. The events occurred in Los Angeles
County in 1986-1987 and would be recorded there if settled cases are
indeed recorded.
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. Nothing further to add.
E. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes.
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.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress. The
staff will diligently review legislative output, keep apprised of
Congressional statements of intent, and work closely with Members of
Congress to ensure that regulations promulgated by ESA/BEA/Census
Bureau comply with the spirit of legislation passed by Congress.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The mission of the
Economics and Statistics Administration (which includes the Bureau of
Economic Analysis) is fourfold: (1) help maintain a sound Federal
statistical system that monitors and measures America's rapidly
changing economic and social arrangements; (2) improve understanding of
the key forces at work in the economy and the opportunities they create
for improving the well-being of Americans; (3) develop new ways to
disseminate information using the most advanced technologies; and (4)
support the information and analytic needs of the Commerce Department,
the executive branch and Congress.
BEA's major programs include the national economic accounts,
industry accounts, regional accounts, and international accounts; The
Census Bureau's core responsibility is large-scale surveys and
censuses. Its mission is to use the most up-to-date and appropriate
techniques needed to produce such data in a timely, accurate and cost-
effective manner, requiring 10 ongoing research and data analysis to
support its capabilities. Not only does the Bureau conduct the
decennial census but also the censuses of various industries within the
U.S. economy.
These two organizations and ESA as a whole are continually in
search of the most effective and cost-effective ways of providing the
requisite information regarding the U.S. to the public and other users
of the information. In other words, the Federal statistical system is
routinely being reexamined and reengineered.
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. Both
my professional career and my graduate education have been spent
analyzing and interpreting economic statistics for the purpose of (1)
assisting my employer in planning its business strategies and (2)
sorting out what appropriate policy responses should be. For that
reason, I am very familiar with the output of the agencies that would
fall under my direction and have a deep respect for their importance.
Furthermore, my background provides me with the wherewithal to
contribute to the policy formulation process.
2. Why do you wish to serve in the position for which you have been
nominated? First, it will allow me to apply my experience/skills to
policy formulation rather than just policy assessment and to contribute
to my government. Second, I relish the opportunity to lead and support
the efforts of BEA and the Census Bureau at a very important point in
their existence.
3. What goals have you established for your first 2 years in this
position, if confirmed? If confirmed, my top five goals for the first 2
years would be to: Further upgrade U.S. GDP and other statistics; Fully
implement the American Community Survey nationwide by 2002; Begin the
planning for the 2010 decennial census; Further upgrade the technology/
capital base of departmental employees to enhance their overall
productivity; Shift our customer base more toward electronic means of
data delivery via STAT-USA.
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? It is not clear to me that I lack any of
the specific skills needed to successfully carry out this position. As
with any new position, however, I need to determine quickly the most
effective people within the group as a whole, clearly articulate the
goals that we need to achieve, and follow through to be certain those
goals are met.
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.
Basically, I believe that government should play a role when an issue
cannot be solved by the private sector alone. The simplest example, of
course, is national defense. Another is necessary but sensible
regulation of certain private organizations to protect either the
health, safety, or financial well-being of the American public. If the
private sector can provide the good/service without distortions or
potential problems, however, I believe that the private sector should
be allowed to operate. If the goals of a particular government program
have been achieved, the program should be discontinued unless there is
sound evidence that the goals were too narrow and should be expanded/
broadened.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The mission
of the Economics and Statistics Administration is to maintain a sound
Federal statistical system that monitors and produces relevant, timely,
and accurate national and community economic and household statistics
for decisionmaking in a rapidly changing environment. Furthermore, it
must develop more effective and cost-effective ways of disseminating
information to our stakeholders and of supporting the information and
analytic needs of the Commerce Department, the executive branch and
Congress.
BEA's major programs include the national economic accounts,
industry accounts, regional accounts, and international accounts; The
Census Bureau's core mission is large-scale surveys and censuses. It
must deliver its product in a timely, accurate and cost-effective
manner, which requires ongoing research and data analysis to support
its capabilities. The Bureau is best known for the decennial census but
also produces numerous other census of businesses and provides regular
statistics that helps to validate the overall Federal statistical
system.
These two organizations and ESA as a whole are continually in
search of the most effective and cost-effective ways of providing the
requisite information on the U.S. to the public. In other words, the
Federal statistical system is routinely being reexamined and
reengineered.
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.
Technological change will impact the way in which these agencies
fulfill their mission but not the missions themselves. Accurate, timely
information regarding the U.S. economy will remain critical to
policymakers and economic actors within the United States. If the
Census Bureau is successful in implementing more regular surveys of the
American public rather than conducting them only every 10 years, that
should further improve our ongoing knowledge about the U.S. population.
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? Insufficient resources are a potential
outside force that could prevent these agencies from accomplishing
their goals. Indeed, the top three challenges appear to be: (1) staying
abreast of the tools and technologies needed to effectively maintain
our statistigal system; (2) attracting a sufficient number of talented
analysts to carry out the more sophisticated analytical work now
required due to these tools; and (3) ensuring the security of BEA/CB
data previous to release, given the increasingly serious threat from
unauthorized intrusions.
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? Insufficient resources have made it
difficult for the Bureau of Economic Analysis to pursue a number of
important initiatives over the past several years; only recently are
more resources being provided. The 2000 Census was also handicapped due
to delayed availability of resources.
10. Who are the stakeholders in the work of this agency? The
stakeholders include a very broad set of groups and individuals. They
include the American people as a whole; potential officeholders in
different states, counties and communities; Congress itself,
policymakers; and the employees of the organizations.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10. I view
my role as that of providing the best possible information/leadership
to the organization on behalf of these stakeholders.
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? Since the
departmental CFO's responsibility is to bring more effective financial
management practices to the Federal Government, my responsibilities
would be to ensure that ESA cooperates fully with our departmental CFO
and that appropriate controls exist within the agencies reporting to
this position. In this regard, it is important that key people within
these agencies have the appropriate training and incentives to function
effectively. (b) What experience do you have in managing a large
organization? The largest organization that I have managed was very
small by comparison to the ESA. But I fully understand that the key to
successfully managing any large organization is to have strong
individuals in key positions, to clearly communicate goals and
expectations, and to provide accurate and timely feedback on
performance. If these guidelines are followed, the organization can and
should be an effective one.
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. The best way of communicating with employees is
by discussing goals and expectations. While goals cannot always be
numerically defined, general directions certainly can be. Reporting on
progress is a way of providing positive feedback to employees but can
also serve as a means to guide performance to even higher levels. (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? No categorical statement can be made in answer to this
question. Whether goals are met depends on a wide range of factors and
is sometimes outside the control of the particular agency. Therefore,
Congress's reaction should depend very much on the degree of control
that the agency has relative to the missed goal, the frequency of
missed goals, the degree to which the goals are missed, and the
importance of the goal. Taking these issues into account, persistent
and/or flagrant underachievement should carry a penalty. (c) What
performance goals do you believe should be applicable to your personal
performance, if confirmed? I should be held accountable for the goals
of the agencies that report to this position, taking into account the
various caveats mentioned in my answer to question 13b.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? My philosophy of
supervisor/employee relationships is that the supervisor is responsible
for clearly communicating goals and expectations to employees and
providing the best possible tools and information such that the
employee can be successful. The utmost respect should be provided to
the employee in carrying out his/her job, as long as the employee
follows the rules of the organization and meets the expectations of
him/her. If those expectations are not met or the rules are not
followed, the employee should be clearly informed of the deficiency so
that improvements are possible. In other words, two-way communication
and cooperation are important for successful implementation of agency
goals. No formal employee complaints have been brought against me in my
career.
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 virtually no experience
working with Congress in my current or former positions.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. The Inspector General's role is to detect and
prevent fraud, waste, abuse, and violations of law and to promote
efficient and effective operations of the Department. For that reason,
it would be important to have open lines of communication with the
Inspector General regarding the agencies for which I would be
responsible in order to assure that potential issues and problems are
identified early and resolved.
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. I will
ensure that staff regularly review legislation passed by Congress and
committee reports of legislation such that regulations reflect
congressional intent. Furthermore, we will remain open to other
stakeholders through correspondence from the general public and Members
of Congress.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. The Department's priorities show up most
clearly through the budget process. In the specific area of economic
statistics, our priorities include improving core statistics (including
Gross Domestic Product and related measures) as well as their means of
development and provision to users (requiring further upgrading of our
information technology systems). In addition, we believe it is critical
to provide funding and authority for: conducting the 2002 Economic and
Government Censuses, planning for the 2010 decennial Census,
implementing the American Community Survey, and redesigning the
demographic survey samples (to incorporate the results of Cenuss 2000).
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 ensure that the staff within my area of responsibility are
fully aware of the goals of the administration and stay abreast of any
adjustments to it. With those goals in mind, their task as managers of
the department will be to plan discretionary spending accordingly.
The Chairman. Thank you, Dr. Cooper.
Mr. Mehlman, welcome.
STATEMENT OF BRUCE P. MEHLMAN, ASSISTANT SECRETARY-
DESIGNATE FOR TECHNOLOGY POLICY, DEPARTMENT
OF COMMERCE
Mr. Mehlman. Mr. Chairman and members of this Committee,
thank you for considering my nomination so promptly, and thanks
to the members and their staff for the courtesies already shown
to me in some prehearing discussions that I have had that I
found very informative and educational.
It is hard for me to express exactly how honored and
humbled I am by the confidence that the President and Secretary
of Commerce have placed in me by forwarding my nomination to
the Senate. I am also grateful to my family for a lifetime of
love and support, and for so many of them joining me here
today.
I believe very deeply in public service, and I am excited
by this great opportunity to serve. I also believe very much in
the power of technology to improve our lives, to overcome our
challenges, and to grow our economy. I have provided a written
statement and written answers to questions the Committee has
asked to expound further on my beliefs and my goals for this
job, if confirmed, and I would be happy to answer any questions
at this time.
[The prepared statement and biographical information of Mr.
Mehlman follow:]
Prepared Statement of Bruce P. Mehlman, Assistant Secretary-
Designate for Technology Policy, Department of Commerce
Mr. Chairman and distinguished members of the Committee, I am
honored and humbled to appear before you today as the President's
nominee for the position of Assistant Secretary for Technology Policy
in the Department of Commerce. I sincerely appreciate the courtesies
that the Committee and the staff have afforded me during this process,
and am grateful for such timely consideration.
I am deeply grateful to President Bush and Secretary Evans for the
confidence they have shown in me, and for their willingness to entrust
me with a leadership position on issues that are of great importance to
our nation. If confirmed, I look forward to leading the Office of
Technology Policy, an office uniquely well-positioned to address the
opportunities and challenges presented by today's technology-based
global economy. More than ever before, our government needs knowledge
about and an advocate for American innovation and high-tech
entrepreneurship.
Rapid advances in technology, especially in information technology,
have driven our country's remarkable economic performance over the past
decade. Technological innovation has been at the heart of our strong
economic growth, accelerating rates of investment, extended low
inflation and unemployment, high-wage job growth, and solid increases
in productivity--the true path for producing higher standards of
living.
There is every reason to believe that technology will play an ever-
increasing role in supporting American economic and social success in
the years ahead. All around us we see the information technology
revolution in progress--in communications, business commerce, in how we
educate children and train our people, and in how we enjoy and manage
our personal lives. The Internet has only just begun to change how we
work, live, play and learn and knock down barriers of wealth and
distance. Biotechnology is poised to revolutionize agriculture and
medicine, promising new medicines and break-through therapies to those
who hope and pray for them. And exciting developments in other cutting
edge disciplines, from nano-technology to genetic engineering, suggest
great changes to come. Ours is an era of promise. Rapid advances in
technology are transforming all human endeavors, creating the potential
for a host of new global market opportunities, improvements in our
standard of living, and a better quality of life for all Americans.
It is no accident that the United States leads the world in high
technology. Our achievements are the dividends that flow from sustained
public and private sector investments in research and development,
coupled with America's entrepreneurial spirit and willingness to take
risks. The private sector plays the dominant role in the process of
developing new technology and bringing it to market. But the Federal
government plays a key role in creating an environment that supports
the private sector's efforts, making a strategic public-private
partnership essential. During the past decade, dramatic changes have
taken place in the climate for innovation--our forms of commerce are
being transformed by new digital technologies and networks; R&D,
competition, and markets have all gone global; and technological
progress is accelerating. These changes have profound implications for
our technology policy, regulations and laws, our economic and tax
policies, our investments in human capital, and how we allocate and
manage our R&D. Analyzing these changes--what they mean for our economy
and our policies--and making recommendations to maximize technology's
contribution to the economy and improve the environment for
technological innovation is the mission of the Office of Technology
Policy (OTP).
I believe my skills and experience are well suited to this mission.
Having worked at a leading technology company, I have developed a clear
understanding of the challenges and opportunities facing American
technology companies today. My work at Cisco Systems, and with its
customers and its partners--seeing first-hand how government decisions
can impact or support our innovators and employers--will help me
anticipate the impact of policy decisions on economic growth, business
opportunities, consumer welfare and global leadership in innovation. In
addition, working in and around Congress for several years I have
witnessed the dedication and commitment of Members of Congress and
their staffs. I share your passion for public service, and look forward
to again serving the American people together.
If confirmed, I would hope to increase OTP's focus on three
priority areas. First, there is widespread and growing recognition that
advances in technology are playing a large role in economic growth and
productivity gains. While the economists are working to measure these
effects, we need to better understand how technology is creating
improvements in our economy, and develop appropriate policies to
further amplify these positive outcomes.
Second, our outstanding economic performance of the past decade was
due in no small measure to high levels of private sector investment in
innovation and equipment. We need to ensure that our business
environment continues to encourage high-levels of investment in R&D,
product development, information technology equipment and software, and
in developing our human capital for today's technology-intensive
workplaces. For example, we want to encourage the spread of new
technologies and new applications to benefit all sectors of our
economy, and continue to focus on the Internet as a tool to foster free
enterprise.
Third, from information technology to biotechnology, and all manner
of technologies in between, new innovations are being developed at a
fast and furious pace. Nevertheless, it can take years for innovations
to reach consumers throughout the world. We need to examine our policy
environment with an eye toward reducing the costs of new, high-tech
products and services, and increasingly the speed at which they
penetrate consumer markets. This would benefit businesses and consumers
alike.
I believe the Office of Technology Policy is poised to make a
significant contribution to our nation, consistent with its
Congressional mandate. OTP has strong research and analytical
capabilities on subjects ranging from the U.S. innovation system and
investment in R&D, to foreign R&D initiatives and developing the high-
tech work force. It has a history of success in working across
government departments and agencies to inform policy-makers, to
contribute vital knowledge to the policy development process, and to
advance solutions to the challenges presented by rapid advances in
technology. The career staff is talented, creative, and they believe
deeply in their mission. If confirmed, it would be a privilege and
pleasure to lead this group of dedicated public servants.
Mr. Chairman, it is my pleasure and honor to appear before your
committee. If confirmed, I look forward to working closely with you and
the Committee. I will be happy to answer questions you may have. Thank
you very much.
______
A. BIOGRAPHICAL IFORMATTION
1. Name: Bruce P. Mehlman.
2. Position to which nominated: Assistant Secretary of Commerce for
Technology Policy.
3. Date of nomination: April 30, 2001.
4. Address: Information unavailable to the public. Office:
Department of Commerce, 14th Street & Constitution Avenue, Washington,
DC 20230.
5. Date and place of birth: April 27, 1969, Baltimore, Maryland.
6. Marital status: Married 5 years to Amy R. Marshack.
7. Names and ages of children: Jacob D. Mehlman (3 years old);
Michael G. Mehlman (14 months old).
8. Education: Gilman School, Baltimore, Maryland, high school
diploma, 1983-1987, degree granted 6/87; Princeton University,
Princeton, New Jersey, B.A. in US History, 1987-1991, degree granted 6/
91; University of Virginia Law School, Charlottesville, Virginia, J.D.,
1991-1994, degree granted 5/94.
9. Employment record: June 1992-Aug. 1992, summer associate, Piper
& Marbury law firm, Baltimore, MD; June 1993-Aug. 1993, summer
associate, Wiley Rein & Fielding law firm, Washington, D.C.; Aug. 1994-
Feb. 1996, associate attorney, Wiley Rein & Fielding, Washington, D.C.;
Feb. 1996-Feb. 1999, deputy & general counsel, National Republican
Congressional Committee, Washington, D.C.; Feb. 1999-Aug. 1999, policy
director & general counsel, U.S. House Republican Conference,
Washington, D.C.; Aug. 1999-May 2001, telecommunications policy counsel
& deputy DC representative, Cisco Systems, Washington, D.C.; May 2001-
present, senior adviser to the Secretary, U.S. Department of Commerce,
Washington, D.C.
10. Government experience: (Listed in response to question No. 9.)
11. Business relationships: (Business relationships listed in
response to question No. 9) I also co-chair the Princeton University
Alumni Schools Committee for Montgomery County Maryland, ensuring that
roughly 250 candidates applying for admission to Princeton are
interviewed by local alumni each year.
12. Memberships: American Bar Association, member; Maryland Bar,
member; DC Bar, member; UVA Alumni Association, member; Princeton Club
of Washington, member.
13. Political affiliations and activities: (a) I served as Deputy
Counsel of the National Republican Congressional Committee from
February 1996 until December 1996, and I served as General Counsel from
December 1996 through February 1999. (b) I served as Deputy Counsel of
the National Republican Congressional Committee from February 1996
until December 1996, and I served as General Counsel from December 1996
through February 1999. (c) $500, Bush for President, 6/30/99; $500,
Bush for President, 6/28/00; $500, Friends of Conrad Burns (for
Senate), 9/29/2000; $500, Friends of Conrad Burns (for Senate), 11/3/
2000.
14. Honors and awards: None.
15. Published writings: None.
16. Speeches: None. None of the public speeches I have delivered
involved a prepared written text.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? Secretary Evans recommended me to the
President, I believe based upon my background and experience working
closely with and among the technology industry. (b) What do you believe
in your background or employment experience affirmatively qualities you
for this particular appointment? I believe I have developed a strong
understanding of the challenges and opportunities facing American
technology companies while working at Cisco Systems. My work with Cisco
and its partners--seeing first-hand how government decisions can impact
or support innovators and employers--will help me anticipate the impact
of policy decisions on economic growth, business opportunities consumer
welfare and global leadership in innovation.
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 presently hold 4,583 vested stock options from
Cisco Systems Inc. These ``expire'' on August 2, 2001. They presently
have no monetary value, with strike prices far above current market
value. (See Section G, question 8 below for exact option prices).
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. None.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 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. As a lobbyist for
Cisco Systems, as policy director at the House Republican Conference,
and as an attorney at Wiley Rein & Fielding, I lobbied Congress and the
Administration on a variety of issues and legislation, generally
related to technology policy and telecommunications issues.
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.)
Attachment A to this document is the Ethics Agreement I signed based
upon the advice and consultation of the Department of Commerce's Office
of General Counsel. I intend to bring any questions to the attention of
these same counsels and seek their advice to avoid any potential
conflicts of interest. I intend to follow the guidance of the
Department's counsels.
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 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? The National
Republican Congressional Committee was involved in many proceedings
before the Federal Election Commission, before, during and after my
tenure as deputy and general counsel. None of these routine proceedings
involved me specifically or related to any of my actions at the
Committee. 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.
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.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress.
While the Office of Technology Policy has no regulatory authority at
this time, my approach to development of regulations would be to review
the legislation, the legislative history, and committee conference
reports, as well as consulting with Members of Congress, to ensure that
I fully understand the intent of the authorizing legislation.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The mission of the Office
of Technology Policy is to develop and advocate national policies
designed to maximize technology's contribution to the economy and
improve the environment for technological innovation. OTP carries out
its mission by: providing expert analysis of factors that affect
American competitiveness, such as R&D investment, technology
development and commercialization; serving as an advocate for industry
and the process of technological innovation in the government policy
arena and other key arenas.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
F. GENERAL QUALIFICATIONS AND VIEWS
1. How have your previous professional experience and education
qualifies you for the position for which you have been nominated? I
believe I have developed a strong understanding of the challenges and
opportunities facing American technology companies while working at
Cisco Systems. My work with Cisco and its partners--seeing first-hand
how government decisions can impact or support innovators and
employers--will help me anticipate the impact of policy decisions on
economic growth, business opportunities consumer welfare and global
leadership in innovation.
2. Why do you wish to serve in the position for which you have been
nominated? I believe very deeply in public service and am humbled and
grateful for the opportunity to serve. I believe that technology is
crucial to U.S. economic growth, innovation, consumer welfare and
business competitiveness. I hope I might be able to assist our national
leaders in identifying those policy alternatives that maximize the
opportunities for technology to raise our standard of living and
improve the quality of life for all Americans.
3. What goals have you established for your first 2 years in this
position, if confirmed? If confirmed, I hope in the first 2 years to
(1) buildupon a first-rate group of career professionals to develop a
flexible and effective policy team, (2) establish close working
relationships with the technology community and the appropriate
Congressional Committees, and (3) make meaningful recommendations to
the Secretary and the Administration on technology policies to boost
American competitiveness, innovation and technology-driven economic
growth.
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? There are many programs and activities
within the Department of Commerce and Technology Administration which I
need to explore and understand better. Likewise, while I have observed
the relationship between the Executive and Legislative Branches from
the Congressional side, there is much to learn about the unique roles,
responsibilities, and unique ways of operating in the Executive Branch.
I intend to work hard and closely with the dedicated career
professionals at the Commerce Department, and with Congressional
experts, to obtain the expertise needed as quickly as possible.
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. I
believe the role of government is to serve the American people. Such
service includes economic policies that promote an environment that
rewards hard work, fair play and good ideas. Because competitive
markets have proven remarkably effective in generating economic growth
and consumer welfare, I believe government has an affirmative role to
play in supporting competitive markets, often through forbearance, and
sometimes by addressing market failures or externalities. I believe
policymakers should consider discontinuation of government programs
when their goals have been achieved or are no longer appropriate
objectives.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The Office
of Technology Policy (OTP) exists to inform and advise policymakers on
issues of technology policy based upon expert analyses. OTP works
closely with the American technology community to identify, assess and
recommend policies most likely to promote US economic growth,
innovation, global competitiveness and consumer welfare. OTP's major
focuses presently include (1) identifying factors that affect
technological innovation and support economic growth, (2) assessing
investment in research and development, (3) overseeing U.S. technology
transfers, (4) assessing technical workforce training and development.
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.
Originally set by Congress in the Stevenson-Wydler Act of 1980, the
mission of the Office of Technology Policy is more essential today than
ever. Considering the increasing importance of technology to our
standard of living, its direct impact on economic growth, and the
importance of American innovation to our global competitiveness, OTP's
mission is likely to remain constant over the coming 5 years.
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? The top three challenges facing OTP are
likely (1) building and retaining a world-class analytical team with
the knowledge and flexibility to address the wide range of issues, (2)
understanding and responding to global forces impacting our technology-
based economy, and (3) managing efficient and effective working
relationships with a technology community that is rapidly evolving and
growing dynamically. The outside force most likely to prevent
successful accomplishment of our mission is inadequate resources.
9. In further reference to question No. 6, what factors in your
opinion have kept the department/agency from achieving its missions
over the past several years? I presently lack adequate perspective to
speak to the agency's success or failure in achieving its mission over
the past several years, although it appears that limited resources and
high career staff turnover have hampered OTP's effectiveness in recent
years.
10. Who are the stakeholders in the work of this agency? The
primary stakeholders are the American people. Technology can improve
the lives of all Americans, by increasing the standard of living
through economic growth and productivity and through new inventions and
products, such as biotech breakthroughs that cure disease. Stakeholders
also include American businesses--big and small, high tech and low--all
of whom benefit from innovation. And stakeholders further include the
duly elected representatives of the people in Congress and in State
capitols around the nation.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10. If
confirmed, my job would be to work closely with these stakeholders to
ensure that OTP's work is responsive, informed and helpful to
policymakers.
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? If
confirmed, I would be responsible for overseeing the activities and
expenditures of the Office of Technology Policy. I would intend to have
my staff set goals for which they were accountable, and I would expect
to set a budget and stick to it. (b) What experience do you have in
managing a large organization? As general counsel of a national
political party committee with a multi-million dollar budget, I worked
closely with the Executive Director and Administrative staff to ensure
sound and legal practices in all aspects of the organization, including
personnel management and expenditure oversight.
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. The process of setting performance goals and
metrics forces organizations to focus their energies and resources on
what is important to achieving the mission of the organization. By
reporting on progress, organization leaders can be held accountable for
their effectiveness. Additionally, performance goals are an effective
tool to identify problems needing attention and improvement. (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? When an Agency fails to achieve its performance goals,
Congress should work with the agency and the Department to determine
the root causes of failure and the steps needed to get back on track.
The proper responses to failure will likely depend upon the causes of
ineffectiveness and the remedies available to return the agency to
successful completion of its mission, if possible. (c) What performance
goals do you believe should be applicable to your personal performance,
if confirmed? If confirmed, I would expect to be held accountable by
the Secretary and by others overseeing my performance for setting
appropriate objectives, identifying benchmarks by which the agency's
progress could be measured, effectively deploying our resources, and
achieving our 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 view supervisors
like coaches--their job is to motivate individuals on their team to
deliver maximum performance, both individually and collectively.
Supervisors should help employees identify, understand and focus on the
organization's mission, maximize the use of their talents, and grow in
understanding and effectiveness. No employee complaints have ever been
brought 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. As a lobbyist, Congressional
staffer, and party committee counsel, I have worked extensively with
Members of Congress and their staffs. At Cisco Systems and as an
employee in the House of Representatives I worked closely with various
committees on legislative matters including Congressional hearings,
policy development and analysis, and report drafting and preparation.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. The Inspector General serves a crucial function,
much as the outside auditors did at my prior employers. I will work
with the IG to provide whatever information they need, and will turn to
the IG for knowledge and advice when appropriate.
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. To the
extent that the Office of Technology Policy issues any regulations, I
would make certain that drafts of such regulations were developed in
close consultation with this Committee. I would personally review any
such regulations to ensure they comply with the spirits of laws passed
by Congress, seeking advice of others as appropriate.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. The President has laid out a clear
technology agenda that includes recommendations for appropriate
Congressional actions. Personally, I share the President's belief that
policymakers should: invest in knowledge, developing our nation's
intellectual assets by focusing on educational achievement in math &
science, workforce development and R&D; promote economic growth and
innovation, through pro-growth tax and trade policies; empower
consumers, by investing in e-government technologies that puts more
power, information and choices in individuals' hands; and develop
infrastructures for the 21st century in critical areas such as energy,
broadband and critical infrastructure protection.
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. If confirmed, as part of the process of setting goals and
performance metrics in the first few months, I would develop an open
and objective method for identifying national priorities within the
mission of OTP, so discretionary resources can be allocated to national
priorities.
The Chairman. Thank you very much. I think Senator Stevens
has a question for Dr. Cooper, and I think Senator Allen would
like to say a few words about Ms. Cino, is that correct,
Senator Allen?
Senator Allen. Yes, sir. Thank you, Mr. Chairman. I am
sorry I had to introduce--yes, sir.
Senator Stevens. If you would just give me 1 minute, I have
got to go chair a hearing, if you do not mind.
Senator Allen. I yield.
Senator Stevens. Dr. Cooper, I just have one question. By
the way, I will support each of you, and I am sorry I will not
be here for the other two witnesses.
But Dr. Cooper, in October of 2000 the National Fisheries
Service came to my office and told me that the cost of a
biological opinion that they had just prepared would be $0 to
$191 million. That same agency, in November, less than a month
later, went before the North Pacific Fisheries Management
Council and testified that the same biological opinion would
cost $500 to $800 million.
Now, I have just one request and question. I believe that
your position should also coordinate the economic analyses
prepared by all agencies of your Department, not just those
prepared for specific uses such as the census and others. Would
you agree to see if you could try to get a hand on the agencies
within Commerce, and standardize their economic analyses so
that they make some sense, particularly to those in Congress
who have to rely on them?
Dr. Cooper. Well, Senator, you are being--you are making a
very interesting point. I will talk to people at Commerce to
see what we might do to coordinate so that some of the concerns
that you raise can be addressed.
The Chairman. I do not think that is the right answer, Dr.
Cooper.
Senator Stevens. I think you said you would try. Thank you
very much.
Dr. Cooper. I think I will try, I definitely will try,
Senator Thank you very much.
The Chairman. Thank you. Senator Allen.
Dr. Cooper. But I do not want to go through a power play
before I am even confirmed.
Senator Stevens. Thank you.
The Chairman. It is hard to construe a desire on the part
of the Congress for accurate economic forecasts, cost data, as
a power play.
Senator Allen.
STATEMENT OF HON. GEORGE ALLEN,
U.S. SENATOR FROM VIRGINIA
Senator Allen. Thank you, Mr. Chairman, and I apologize to
you, Mr. Chairman and the members of the Committee, and Ms.
Cino. I was over--ending up introducing two people in the
Energy Committee with Senator Dorgan, and I am sorry to be
late, and I know that Ms. Cino has already spoken, and so it is
a belated introduction.
But I will only say, Mr. Chairman and members of the
Committee, that this Commercial Service effort is one that I
have found was important while I was Governor, going on trade
missions to countries. Especially for the smaller and medium-
sized businesses, the Commercial Service could be of good help
in many of those contacts in credibility for businesses, and
when you look at international trade being a great opportunity
for our enterprises, the ones who need the most help are
usually the smaller businesses.
And really it is only about 1 percent of all small
businesses that are involved in exporting, and to the extent
that they can increase their enterprises, capabilities by
exporting, and also creating good-paying jobs here at home,
this is a vitally important effort for our international trade
and global competition.
I think Maria has obviously 20 years of experience leading
field-based organizations, building coalitions. Developing,
motivating, and mentoring her staff will be very, very
important to coordinate and work, and I think she clearly has
enthusiasm, the energy, the dedication, the commitment for
public service, as well as her management experience, which
will be exceptionally result-oriented, and she will get clear
answers, and we expect measurement from all the good results,
so I certainly do very welcome her, and enthusiastically
support her as an advocate for our American interests in
opening up markets and opportunities abroad.
Thank you, Mr. Chairman, and thank you, Ms. Cino.
The Chairman. Thank you very much, Governor Allen. As
Governor, Senator Allen was one of the most active in
encouraging exports, and we appreciate your active role on
those issues on this Committee. We thank you, Senator Allen.
Mr. Mehlman, I want to go back to an issue I just raised
with Dr. Muris concerning Internet privacy. There was a recent
study of the Internet conducted by UCLA that 66 percent of
Internet users agree that your privacy is at risk while online.
Do you have any views as to how we can best address this issue,
both from an Administration and congressional standpoint?
Mr. Mehlman. Thanks for the question, Senator. Online
privacy, having come from industry, is a question not only that
concerns policymakers, but also the online community, including
a lot of the businesses that want to sell products or provide
information online, and based upon those concerns, we have
seen, I think, a pretty good effort to date by a lot of the
online community to get their own affairs in order so that
consumers are more comfortable going online.
I think I probably cannot come here today with the silver
bullet solution, but I do believe the process is one of
cooperation between Congress, between the Administration, and
between industry, as well as those who represent consumers, to
try to approach this from the position of--we all seem to have
the same goal, and the key is, how do we get there without
providing solutions that cause unintended consequences if they
are overregulatory or if they are underprotective.
The Chairman. Senator Dorgan.
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Mr. Chairman, thank you. I regret I was not
here at the beginning of the hearing, but as Senator Allen
indicated we were both over in the Energy Committee.
I intend to support all three of these nominees, and will
be pleased to vote for their confirmation. I would like to say
I regret having missed the testimony and being able to ask some
questions of Mr. Muris. I would like to submit some questions
for him.
The Chairman. Without objection.
Senator Dorgan. I have some heartburn with statements he
has made about monopolies and antitrust and so on, and I really
would hope that we would have a Chairman of the Federal Trade
Commission who is a real tiger on these issues.
With the growing concentration of virtually every industry
in this country, I think consumers are left with the daunting
circumstance of confronting more and more economic power, and
in some markets I think we have near monopolies, and I just
really feel strongly that we need a Federal Trade Commission
and the Chairman of that commission who is wanting to be very
active and aggressive on those issues.
If I might just ask one question of Ms. Cino, could you
describe for me the position dealing with foreign commerce that
you are nominated for?
Ms. Cino. I will try. Yes, sir. Senator, Commercial Service
is a unique organization in the Department of Commerce, and
what we try to do is work with small and medium-sized
businesses, and we try to promote them to export abroad. We do
this in a variety of different ways through the services that
we offer.
Presently, as Senator Allen said, only about 1 percent of
small businesses export. Of the 1 percent that actually export,
only 63 actually export to one country, and it is our goal to
at least double, if not triple, the number of small businesses.
We feel without the Commercial Service that many small and
medium-sized businesses would not have the manpower, the
resources, or even the know-how to export abroad, and we try to
provide, if you will, through our worldwide network of staff,
the ability to have folks, small and medium-sized businesses
export outside the United States.
Senator Dorgan. How large is that staff?
Ms. Cino. The staff is approximately 1,700, sir.
Senator Dorgan. Mr. Chairman, as I indicated, I intend to
support all of these nominees. I think they are nominees with
excellent qualifications. It raises the question--I have been
thinking through this issue of trade. I think every
Administration has tried to grapple with trade in different
ways, but we have so many different areas in government in
which we are dealing with trade. We probably ought to begin
thinking about consolidating them so that we have them all
working in tandem, but I am kind of interested in the area you
describe, because of my interest in consolidation.
Again, thank all of you for offering yourself for public
service, and I would, Mr. Chairman, like to submit, as I
indicated, questions for Mr. Muris.
The Chairman. Without objection. Thank you, Senator Dorgan.
Senator Hutchison.
Senator Hutchison. Yes, Mr. Chairman. I just want to try to
clarify a little bit. What Senator Stevens was trying to say to
Dr. Cooper was that when you ask for the cost of a study, and
you get back something between $0 and $190 million for the cost
of the study, that causes people in Congress to think maybe
someone was not trying very hard, and we just wanted to ask you
if you would take the lead, as the person in charge of
statistics and economics there, to try to respond to Congress,
and be as specific as possible, and give us sound, well-
researched information. This information will form the basis of
the laws we pass and the policy we set here in Congress. I
think that was the point Senator Stevens was trying to make.
Dr. Cooper. Well, thank you very much, Senator. I just,
then--for clarifying, you have to remember I am new in town. I
just got here last week, and I was not aware of that study, and
I was not sure if he was talking about the range of the cost,
or an estimate that was made, but obviously we--this is a very
difficult issue. There are lots of cost estimates that are
tough to come by, but I will do my best to make sure that we
come up with some estimates that are worked hard, and I will
then work with the Congress on it.
Senator Hutchison. Thank you. Thank you, Mr. Chairman.
The Chairman. Senator Allen.
Senator Allen. Mr. Chairman, thank you. I would only have a
few comments directed mostly to Mr. Mehlman, seeing how he was
a graduate of the University of Virginia Law School in 1994,
and I spoke at your graduation. I am sure you have no memory
whatsoever of my commencement address.
[Laughter.]
Senator Hutchison. I thought you were going to ask for a
report.
Senator Allen. No, no, no. Unless you were one of those who
were somehow protesting with--there is this great fun of being
hit with stuffed animals as I go down the mall.
[Laughter.]
Senator Allen. Which my young daughter enjoyed, but you
were not one of those doing that.
There are two things I would like to have you address, or
at least concerns that I have heard from the technology
community and throughout your statement here you clearly are
going to be an advocate for American innovation and understand
the importance of entrepreneurship, our economic and tax and
regulatory policies being very important, which were some of
the questions that the Chairman was asking you as far as
Internet security, or privacy, and also the focus on the
Internet as a tool to foster free enterprise.
There are two areas that I think we will be continuing, or
maybe not continuing issues. One is the question of taxation of
the Internet and if it is going to expand, as you say, the
question is, when will there ever be a time where it is
appropriate to impose a tax on access to the Internet, or ever
a time where it is appropriate to have discriminatory or
multiple taxes on Internet transactions? Do you have any
comment about that, since the moratorium on those two aspects
are expiring in October of this year?
Mr. Mehlman. Well, Senator, certainly coming from industry
your great leadership on the issue of Internet taxes has been
very much appreciated, and I think the voices that have been
heard across Congress and in industry to want to go slow with
this new, very promising medium, and to not rush into taxation
until the impact can be clearly seen has been the right
approach.
I would not want to get out in front of the Secretary of
Commerce and the Administration, although they have already
spoken on some of these issues with respect to trying to avoid
taxes on Internet access and the President throughout the
campaign, and the Vice President and they both already
indicated a desire to see an extension of the tax moratorium,
so certainly I share those beliefs coming in, and I look
forward to working with you. I am hoping and assuming you will
continue your leadership on the question.
Senator Allen. Thank you. Mr. Chairman, if I may ask
another question, the other issue as far as our technology
innovations is the protection of our intellectual property and
the copying of our creativity in other countries. How do you
see your role in this very important Assistant Secretariat
position in trying to protect the intellectual property of our
technology companies abroad?
Mr. Mehlman. Thanks also for that question, Senator. The
role I will be able to play I suppose I will learn more about,
if confirmed, when I am in. Certainly it is very clear the
protection of intellectual property rights is essential to
promote the creative process and make investments in a lot of
technology, and a lot of information worthwhile. At the same
time, online media present some new challenges and different
issues that need to be thought about.
The Office of Technology Policy I hope is well-positioned
and has a lot of very dedicated and intelligent career
professionals who are going to try to delve into the questions
of what will the various alternatives--in how we go about
protecting our intellectual property, what will the
alternatives mean for the continuing climate of innovation,
continuing investment, and continuing growth of new technology,
so I hope those are the types of issues I will have an
opportunity to work on.
Senator Allen. Thank you. Thank you, Mr. Chairman.
The Chairman. Senator Wyden.
Senator Wyden. I do not have any questions. I just want to
tell Mr. Mehlman that I very much appreciated having a chance
to talk with him yesterday, because I think he made a point
that will be very helpful to us as we try to deal with Internet
taxes, and the variety of issues that have occupied the time of
this Committee in the past.
He has, as you can see from his resume, a record of being a
pretty active partisan. He spent many years for a young man in
the partisan trenches, but when he visited with me he said,
``Look, I am going to be taking a different role in this job. I
want to figure out a way to help you and the Republicans and
folks on both sides of the aisle to try to find some common
ground on issues that we have spent'', and Senator Dorgan has
done a lot of good work on this as well, have spent a lot of
time vexing this Committee, and with a deadline coming up on
Internet taxes, a willingness to work in a bipartisan way on
those kinds of issues is very welcome, and I am looking forward
to voting for him.
The Chairman. Thank you. Mr. Mehlman, do you want to give
us the highlights of Governor Allen's speech at your
graduation?
[Laughter.]
Mr. Mehlman. I have it committed to memory, Senator, but I
think for an expeditious hearing I will leave it for another
time.
The Chairman. Thank you. I think that is the reason for
your success today.
[Laughter.]
The Chairman. I thank the witnesses, and I want to again
thank you for your willingness to serve the country. We are
grateful for your willingness to do so. We think you are very
highly qualified, and as I mentioned to the other panel, we
will try and get your nominations to the floor and confirmed
before the Memorial Day recess. Thank you again, and we look
forward to working with you.
Our next panel is Mr. Sean O'Hollaren, who is the Assistant
Secretary-Designate for Government Affairs for the Department
of Transportation, and Ms. Donna McLean, who is the Assistant
Secretary-Designate for Budget and Programs and Chief Financial
Officer of the Department of Transportation.
Before we begin, Ms. McLean, Mr. O'Hollaren, would you care
to make note of any of your family members that are with you
today?
Ms. McLean. Yes, sir, thank you. My husband, Marcus
Peacock, and my two daughters, Mey and Iona, and my mother,
Caroline McLean, and my father, Ray McLean.
The Chairman. Welcome. Welcome to the family members. What
are your daughters' names again?
Ms. McLean. Mey and Iona.
The Chairman. They are beautiful children.
Ms. McLean. Thank you.
The Chairman. Congratulations. Mr. O'Hollaren.
Mr. O'Hollaren. I am escorted by my wife, Hilary
O'Hollaren, and my 10-month-old daughter, Rory, who may or may
not make it through.
[Laughter.]
The Chairman. Welcome. Welcome, and congratulations. I
guess the day care center over there is going to be full, or
busy.
We are pleased to welcome Congressman Duncan, but first I
would like to ask Senator Wyden, who would like to make some
introduction of Mr. O'Hollaren.
Senator Wyden. Thank you very much, Mr. Chairman. I
appreciate your thoughtfulness, and it is really a pleasure to
be able to introduce Sean O'Hollaren to the Committee and to
support his nomination as Assistant Secretary. I have known
Sean and his family for more than 20 years. I think it goes
back to the days when he was a high school student in Portland.
He and his family have made extraordinary contributions in our
state. They have built the Mount Bachelor resort, and Sean has
been involved in public service ever since he graduated from
Willamette University.
He has extensive experience working on issues that this
Committee deals with. When he was with Senator Hatfield we
called him the man who dealt with trains, planes, and
automobiles, and he was always somebody on a bipartisan basis
that was a problem-solver, that was trying to bring people
together.
I want to wrap up with one comment that I think really
illustrates what he is all about, and that is, when I first
came to the Senate and we had a real run of very cold weather,
we were having terrible problems getting services and
assistance to the homeless.
We found these military surplus blankets in California, and
we just did not have any way of getting them to Oregon, so we
called up UP, where Sean was. He essentially cut through the
red tape, and within a few days thousands of blankets for the
homeless were headed on the way to Oregon, so I can tell you
this is somebody--and I know I speak for Senator Smith on
this--that we Oregonians are very proud to see nominated for
this position, and look forward to his confirmation.
The Chairman. Thank you. Congressman Duncan, welcome. Thank
you for coming over.
STATEMENT OF HON. JOHN J. DUNCAN, JR.,
U.S. REPRESENTATIVE FROM TENNESSEE
Mr. Duncan. Thank you, Mr. Chairman. I am very pleased to
be here to introduce to you and the other Members Mrs. Donna
McLean, and to recommend her for the position of Assistant
Secretary of the Department of Transportation, and its Chief
Financial Officer.
Mrs. McLean worked for me in my 6 years as Chairman of the
House Aviation Subcommittee, and in that capacity she was one
of the main architects of AIR-21, very landmark legislation.
She then was stolen from us to go to the FAA as their Chief
Financial Officer, and she started a new accounting system over
there, and has done some really tremendous work in helping make
the FAA operate much more effectively.
I can tell you that in my years that Donna and I spent
together I found her to be one of the most capable, competent,
intelligent, talented young women with whom I have ever worked,
and I am very pleased that she asked me to come over here and
introduce her to you and recommend her for this position. I do
not think that President Bush could have nominated anyone any
better for this position, and while she is not one of my
constituents, I would be very proud if she was, and I really
cannot say much more than that.
I notice Rob Chamberlin back over there, who you stole from
me.
[Laughter.]
Mr. Duncan. But when you hire good people, sometimes they
move on to bigger and better things.
The Chairman. Thank you very much.
Mr. Duncan. But you also should know that I have long been
an admirer of yours, and have supported many of the things in
the House that you have supported over here in the Senate, and
it is a great honor and privilege for me to appear before you
this morning. I have to run back over for a very important
Journal vote. Some of you know what I am talking about there,
but I do apologize, I need to slip out because I have got two
Committee meetings going on right now, but thank you for
allowing me to be with you.
The Chairman. Thank you, Congressman Duncan. You are always
welcome here, and I appreciate our years of working together on
aviation issues. You are very much appreciated, and your words
of recommendation for Ms. McLean are very important. We thank
you for taking the time from your busy schedule.
Mr. Duncan. Thank you.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings, U.S. Senator
from South Carolina
Mr. Chairman, thank you for scheduling this hearing on these two
nominees for key posts at the Department of Transportation.
Mr. O'Hollaren has worked the halls of Congress on behalf of the
Senate Appropriations Committee and our former colleagues Senator Mark
Hatfield. He most recently represented Union Pacific. He knows
transportation, he knows the politics of the issues and he is committed
to working with all of us on issues like seaport security, aviation
competition, and other key safety transportation concerns.
Donna McLean also comes before the Committee with impressive
credentials and is highly recommended. Her peers at the federal
Aviation Administration and former colleagues on the House
Transportation and Infrastructure Committee all commend her work and
her character. Ms. McLean has a tough job--fitting a $60-$70 billion
``need'' to enhance capacity on our roads, aviation system and
navigable waters into a $50 billion box. She is known to be creative
and thoughtful and she will need all of her skills in her new position.
One of the DOT's premier missions is to make our transportation
systems safer. It is a tough job, pitting many constituencies against
one another in finding solutions. Both of these outstanding nominees
will be there to help Secretary Mineta, and work with all of us to
provide a safer, more competitive, transportation system.
The Chairman. We will begin with you, Ms. McLean.
STATEMENT OF DONNA R. McLEAN, ASSISTANT SECRETARY-
DESIGNATE FOR BUDGET AND PROGRAMS AND CHIEF
FINANCIAL OFFICER, DEPARTMENT OF TRANSPORTATION
Ms. McLean. Good morning, and thank you, Mr. Chairman and
members of the Committee, and thank you, Mr. Duncan, for your
kind words. I am very pleased to be considered for this
position in the Department of Transportation and, if confirmed,
I look forward to working with you and your staff on the
transportation issues that we face.
If confirmed as Assistant Secretary for Budget and Programs
and Chief Financial Officer, I will work to support the
Department's number 1 priority, safety. We are fortunate to
live in a country that has a very good transportation safety
record, but this did not occur by chance. The Congress and the
Department of Transportation have worked hard to establish the
right level of laws, regulations, funding, and oversight, but
as with anything, it can always be improved.
I know that the employees at the Department are constantly
working to improve the transportation safety record, be it the
technicians who maintain the air traffic control systems 24
hours a day, 7 days a week, or the motor carrier employees
conducting truck safety inspections, or the Coast Guard
personnel who, just last week, seized nearly 13 tons of
cocaine. If confirmed, I look forward to doing what I can to
support these and other DOT efforts.
One of the biggest challenges faced by this country and the
Department is transportation congestion. A recent study of 68
urban areas found that in 1999 alone, highway congestion cost
$78 billion in lost time and wasted fuel. Another report stated
that more than one-fourth of airline flights last year were
either delayed or canceled.
If confirmed, I look forward to working with and advising
Secretary Mineta on financial decisions that will help this
nation get the most out of its transportation investments. We
need to look at advances in technology to ensure that we are
getting the most effective use of today's capacity.
We must also recognize that the country's transportation
needs will have to be aided with additional capacity and
capital investments. If confirmed, my job is to support
President Bush and Secretary Mineta's budget requests, and to
provide to the Congress any additional information needed to
make sound policy decisions and to assure that the best
transportation investments are made.
In addition, I would be responsible for the Department's
performance report, as required by the Government Performance
and Results Act, or GPRA. The Department's performance report
has been referred to as one of the best in Federal Government,
and I plan on keeping it that way.
Finally, my responsibilities would include guaranteeing
that the Department has the most accurate, timely, and usable
financial system available. I would like to assure you and your
staff that I will be working closely with Congress. As a former
staff member in the House Transportation Infrastructure
Committee, I understand the importance of timely responses to
congressional requests.
I am eager to serve both President Bush and Secretary
Mineta in this position, and I would be pleased to answer any
questions you might have. Thank you.
[The prepared statement and biographical information of Ms.
McLean follows:]
Prepared Statement of Donna R. McLean, Assistant Secretary-Designate
for Budget and Programs and Chief Financial Officer, Department of
Transportation
Thank you, Mr. Chairman and members of the Committee. It is an
honor to appear before you today. I am very pleased to be considered
for this position in the Department of Transportation, and if
confirmed, I look forward to working with you and your staff on the
transportation issues that we all face.
If confirmed as the Assistant Secretary for Budget and Programs and
Chief Financial Officer I will work to support the Department's number
one priority--safety. We are fortunate to live in a country that has a
very good transportation safety record. But this did not occur by
chance. The Congress, and the Department of Transportation have worked
hard to establish the right level of laws, regulations, funding, and
oversight. But as with anything, it can always be improved.
I know that the employees at the Department are constantly working
to improve transportation safety--be it the technicians who maintain
the air traffic control computers 24 hours a day 7 days a week, or the
motor carrier employees conducting truck safety inspections, or the
Coast Guard personnel who just this week seized nearly 13 tons of
cocaine. If confirmed, I look forward to doing what I can to support
these and other DOT efforts.
One of the biggest challenges faced by this country and the
Department is transportation congestion. A recent study of 68 urban
areas found that in 1999 alone, highway congestion cost $78 billion in
lost time and wasted fuel. Another report stated that more than one-
fourth of airline flights last year were delayed or canceled.
If confirmed, I look forward to working with and advising Secretary
Mineta on financial decisions that will help this nation get the most
out of its transportation investments. We need to look at advances in
technology to ensure that we are getting the most effective use of
today's capacity. We must also recognize that this country's
transportation needs will have to be aided with additional capacity and
capital investments.
If confirmed, my job is to support President Bush and Secretary
Mineta's budget request and to provide to the Congress additional
information needed to make sound policy decisions and to assure that
the best transportation investments are made. In addition, I would be
responsible for the Department's performance report as required by the
Government Performance and Results Act (GPRA). The Department's
performance report has been referred to as one of the best in the
Federal Government and I plan on keeping it that way. Finally, my
responsibilities would include guaranteeing that the Department has the
most accurate, timely, and usable financial system available.
I would like to assure you and your staff that I will be working
closely with Congress. As a former staff member of the House
Transportation and Infrastructure Committee, I understand the
importance of timely responses to Congressional requests.
I am eager to serve both President Bush and Secretary Mineta in
this position, and I would be pleased to answer any questions you may
have.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Donna Rae McLean.
2. Position to which nominated: Assistant Secretary for Budget and
Programs/Chief Financial Officer, U.S. Department of Transportation.
3. Date of nomination: April 3, 2001.
4. Address: Information unavailable to the public. Work: Federal
Aviation Administration, 800 Independence Ave, S.W., Washington, D.C.
20591.
5. Date and place of birth: 07/09/64, St. Louis, MO.
6. Marital status: Married to Marcus Christopher Peacock since May
2, 1992 (I did not change my name, so I have no maiden name.)
7. Names and ages of children: Iona Rae McLean (DOB 01-06-97); Mey
Rose McLean (DOB 01-06-97).
8. Education: 8/86 to 5/87 & 8/88 to 5/89 Indiana University,
School of Public and Environmental Affairs, Bloomington, Indiana--
Masters in Public Administration received 5/89; 8/82 to 5/86 Indiana
University, Bloomington, Indiana--Bachelor of Arts (majors in Political
Science and Anthropology) 5/86.
9. Employment record: (8/99 to Present) Assistant Administrator for
Financial Services/Chief Financial Officer, Federal Aviation
Administration, U.S. Department of Transportation, 800 Independence
Avenue, S.W., Washington, D.C. 20591; (2/93 to 8/99) (during this
period, took 3 month break to serve with NCARC, see below), Republican
Professional Staff Member, Aviation Subcommittee, Transportation and
Infrastructure Committee, U.S. House of Representatives; (5/97 to 8/97)
Director of Budget Policy, National Civil Aviation Review Commission.
This was a temporary Commission. Chaired by Secretary Norman Y. Mineta,
located in Washington, D.C.; (4/90 to 2/93) Budget Examiner,
Transportation Branch, U.S. Office of Management and Budget, 725 17th
Street, N.W., Washington, D.C.; (8/89 to 4/90) Program Analyst, Office
of Budget and Programs, Office of the Secretary, U.S. Department of
Transportation, 400 7th Street, S.W., Washington, D.C.; (15/88 to 8/88
and 5/87 to 8/87) Summer Intern, U.S. Office of Management and Budget,
725 17th Street, N.W., Washington, D.C.
10. Government experience: Complete list provided in last question.
11. Business relationships: Indiana University, School of Public
and Environmental Affairs, Alumni Board, Current Member (contact at IU
is Dick McGarvey 812-855-0163).
12. Memberships: Indiana University, School of Public and
Environmental Affairs, Alumni Association, Advisory Board Member.
13. Political affiliations and activities: (a) None. (b) None. (c)
$250 and $251 to Republican National Committee 6/19/00 and 10/11/00
(under my husband's name, Marcus Peacock).
14. Honors and awards: (5/86) Elected to Pi Sigma Alpha, honor
society for political science, Indiana University; (8/86-5/87) Full
Tuition Scholarship from Indiana University, School and Public
Environmental Affairs, Elected to Pi Alpha Alpha honor society,
Received the Chancellor Wells book award for academic achievement; (8/
88-5/89) Full Tuition Scholarship from Indiana University, School and
Public Environmental Affairs; (1989) National Academy of Sciences,
Transportation Research Board, Graduate Scholarship; (2001) Selected by
the School of Public and Environmental Affairs at Indiana University as
the Alumni of the Year (to be presented May 4, 2001).
15. Published writings: Article in the Transportation Research
Board, Transportation Research Board Record 1257, 1990, ``General
Aviation Safety: Where Can Safety Improvements Be Made?''
16. Speeches: All of my public speaking appearances have been
relatively informal and I have spoken from talking points and hand
written notes.
17. Selection: (a) I believe I was chosen because of my background
in U.S. transportation policy and the Federal budget process. My
previous commitment to Republican policies by serving as a staff member
in the U.S. House of Representatives was also a contributing factor.
(b) I have always been interested in transportation policy which is
illustrated in my past employment experiences--in particular, I have
focused on transportation policy through the Federal budget process. I
have worked at the U.S. Department of Transportation, U.S. Office of
Management and Budget, and the U.S. Federal Aviation Administration on
transportation budget policy. In addition I have demonstrated my
ability to work with both political parties. For instance, while I
worked as a staff member at the Transportation and Infrastructure
Committee, I was asked to work for 3 months on the National Civil
Aviation Review Commission, which was chaired by Secretary Norman Y.
Mineta. Finally, I believe my current position, as Assistant
Administrator for Financial Services/CFO for the U.S. Federal Aviation
Administration, provides me a strong background for this appointment.
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? I currently work for the Federal Aviation
Administration.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization? No.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service? No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers. None.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. Please refer to the
Acting General Counsel's 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. In my past
position (2/93 to 8/99) as a Republican staff member at the
Transportation and Infrastructure Committee of the U.S. House of
Representatives my job description included drafting legislation.
However, my actions were directly related to wishes of Congressional
members. While working for the Office of Management and Budget (4/90 to
2/93) and my current position at FAA, I have been asked by
Congressional staff to provide technical assistance in drafting
legislation.
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's 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 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? 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. There has been an EEO complaint filed
against FAA by an employee in my current office that mentions several
managers, including me. The case is being handled in accordance with
the Federal sector EEO administrative process. The complaint was filed
March 26, 2001 and the case number is 2-012074.
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 abilities.
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 abilities.
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 abilities.
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
Office of the Assistant Secretary for Budget and Programs/CFO has the
responsibility to review the economic impact of all significant DOT
regulations. If confirmed, it would be my responsibility to verify the
cost of a regulation to both the Department and the industry. I know
that the Department's authority to issue regulations is defined by law.
I would work with other DOT officials to address congressional concerns
with proposed regulations. For additional information, please refer to
my response to question 17, under section F.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The Department's top
mission is to support and provide a safe and efficient transportation
system. This is accomplished in a variety of ways, including issuing
regulations, providing safety inspections, operating safety services,
investing in infrastructure, developing new technologies, and providing
public education.
The Department is committed to managing for results and this is
reflected in its strategic goals and performance plan required by the
Government Performance and Results Act (GPRA). DOT is committed to five
overarching transportation goals, which are to improve safety,
mobility, economic growth, human and natural environment, and national
security. DOT has specific goals that relate to each of these
categories. In 2000, DOT reached over 70 percent of its goals. For
additional information, please :refer to my response to question 6
under section F.
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
qualify you for the position for which you have been nominated. My
career over the last 14 years has focused on Federal transportation
policy. I have worked both for Congress and the Administration. I
believe investments in transportation have provided substantial
benefits to our country. As a result, my career has focused on the
Federal budget process and the importance of that process for
maintaining and improving transportation infrastructure. My career
working for Congress, Office of Management and Budget, and the Federal
Aviation Administration, provides me with a well-rounded Federal
background as the candidate for the DOT Assistant Secretary for Budget
and Programs/CFO.
2. Why do you wish to serve in the position for which you have been
nominated? I have great respect for President Bush and Secretary
Mineta. My professional career has focused on Federal transportation
issues. To be able to serve the public, President Bush, Secretary
Mineta, and to focus on transportation policy would be a great personal
and professional honor. I know that working at this level for the
Federal Government is both demanding and challenging. The position for
which I have been nominated provides a comprehensive view of
transportation policy through funding decisions. I hope to be afforded
the opportunity to provide counsel and guidance to the Administration
and Congress on identifying top transportation priorities and
recommending appropriate funding levels.
3. What goals have you established for your first 2 years in this
position, if confirmed? DOT's top goal is to provide the safest and
most efficient transportation system possible. My personal goal would
be to aid in achieving that goal by providing appropriate funding
recommendations. Although DOT is a $59 billion department, priorities
still must be made. My goal would be to recommend support for safety
programs that provide the most improvement to our transportation
system. With respect to efficiency, both in aviation and surface
transportation we are seeing congestion and choke points that result in
significant costs to the country. I intend to review programs targeting
these problems and recommend funding for programs that most effectively
solve our capacity problems. One of the responsibilities of DOT's
Office of Budget and Programs is the compliance with the Government
Performance and Results Act (GPRA). DOT has been praised in the past
for its Performance Plan as being one of the best in government. I
believe one of the best ways to hold Federal Government agencies
accountable is to set goals and manage to those goals. This is the
philosophy GPRA I intend to continue and improve DOT's efforts in
compliance with this law, if confirmed. Finally, it is the role of the
Assistant Secretary for Budget and Programs/CFO to improve financial
management efforts of the Department. In this area, my goals would
include to achieve and maintain a clean audit for the Department. In
addition, my goals would include continuing to modernize and improve
DOT's financial systems to better manage our programs and to most
efficiently use the tax payers' money. My intention would be to provide
DOT managers with real-time financial information at their desktops--
something that its current system cannot provide.
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? My knowledge of aviation issues is broad.
I do not have as much knowledge in the other modes of transportation.
However, I believe that going through the nomination process and having
to immediately deal with the 2002 budget request will allow me to
quickly refine my knowledge of the other transportation modes. I will
also work with the Department's staff, Administration officials,
Congress, and other relevant transportation organizations to broaden my
knowledge.
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. I
believe that the government should step in where the market fails. It
is true too, that over the past several years, the market has stepped
in where the government has failed. I think a large part of our
country's success can be attributed to our ability to watch, challenge,
and change the responsibilities of government versus the private
sector. Since the Department was established, its top priority has been
safety. But the role DOT plays in assuring the level of safety has
changed over time, and the safety of the system has improved. Policy
decisions redefining the role of DOT have also led to improved
efficiency in transportation operations. For instance, most citizens
have benefited from the economic deregulation of the aviation system.
At the beginning of the aviation era, it was believed that the
intensive capital investment necessary to begin air service could not
be sustained by the private market, and government intervention was
needed. However, as the industry matured, the government's decision to
implement economic deregulation led to improved air service in most
communities. However, for some smaller communities where service was
not improved, the government has provided assistance to ensure a
reasonable level of air service. While not perfect, this balance of
government and market incentives has produced the most productive
aviation market in the world. This great success in aviation and in
surface transportation has resulted in some areas where demand is
greater than the infrastructure can support. The challenge of providing
enough capacity for transportation users has ignited the debate again
on the role of government versus the private sector. I believe we
should turn to the private sector whenever possible to aid in solving
these problems. However, I also believe it is clearly the role of the
Federal Government to ensure safety and a competitive marketplace.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. Our
nation's well-functioning, interconnected transportation system is
critically linked to our nation's growth and prosperity. The
Department's mission is to shepard and maintain that system, ensuring
that safety and security are always top priorities. The Department has
11 individual transportation modes or administrations. But I like to
think of the Department's mission programs, and operational objectives
based on the major goals identified in DOT's performance plan.
Safety: DOT's No. 1 priority is to maintain and improve a safe
transportation system. For the Federal Aviation Administration (FAA),
that means safely operating a 24-hour, 7 days a week air traffic
control system. FAA's responsibilities also include inspecting the
industry's operations through their flight inspector workforce. The
National Highway Traffic Safety Administration (NHTSA) and the newly
established Federal Motor Carrier Safety Administration (FMCSA) issue
safety regulations, support research projects, and support public
education activities to improve private and commercial highway safety.
The responsibility of the Federal Railroad Administration (FRA)
includes regulating the operations and equipment of the U.S. railroad
industry. The Coast Guard (CG) clearly has a strong safety mission, as
they save one life every 2 hours. In addition to air and sea rescue
activities, the CG oversees the regulation of vessels and seamen. The
Research and Special Programs Administration oversees pipeline safety
and the transportation of hazardous materials.
Mobility: As our country grows, transportation congestion continues
to increase. The Department plays a key role in increasing system
capacity to better accommodate transportation demand. The FAA must
continue to purchase and build technology to handle the ever-growing
air traffic operations. FAA also administers the Airport Improvement
Program, providing Federal grants primarily for airport construction.
The FHWA and FTA also administer grant programs that improve highway
and transit capacity.
National Security: It is critical that the Department ensure that
the U.S. transportation system is secure and U.S. borders are safe from
illegal intrusion. The FAA accomplishes its goal by issuing key
regulations and security requirements for the aviation industry, and
provides the appropriate level of inspectors to enforce the
requirements. The CG conducts migrant interdiction actions and drug
enforcement operations--in fact, since October 2000 the CG has seized
27 metric tons of cocaine. In addition, the Maritime Administration is
responsible for maintaining a fleet of ships which with a few days
notice, can be available for national security purposes.
Other enabling agencies include: the Saint Lawrence Seaway
Development Corporation which operates and promotes its unique
international waterway with Canada; the Bureau of Transportation
Statistics which collects data and conducts research for public policy
decisionmaking; and the Office of the Secretary which provides policy
guidance and management oversight for the Department components.
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. The
pressure we are currently seeing in aviation and highway capacity is
stressing our transportation infrastructure. Although the Department's
current mission encompasses improving transportation capacity, the
recent and continuing growth in the nation's transportation needs will
have to be addressed more aggressively by the Department. The
Department's focus will be to both increase transportation
infrastructure, but also to use the current infrastructure as
efficiently as possible. This means that enhancing investments in new
technology, such as intelligent transportation systems, and improved
coordination between government and industry will be necessary (this is
occurring in the Spring/Summer 2001 effort with FAA and the airlines
sharing information several times a day to improve the management of
the air traffic system and reduce air traffic delays). While we are all
concerned about transportation congestion, as we increase
infrastructure investments, the Department must also be mindful of
concerns about noise and the environment. While transportation.
congestion places costs on our economy and environment, so too do
infrastructure investments. Understanding these constraints and
weighing the challenges of transportation solutions takes a highly
qualified workforce. Attracting and keeping a strong employee base has
always been difficult, and will continue to be a challenge for the
Department.
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 the area of dealing with demand for
capacity, I believe we have seen that an outside force is the health of
the overall economy. The sluggish economy of the early 1990's had the
U.S. Government discussing the economic health of the aviation
industry. With the most recent economic growth, the Department must
ensure that the substantial increases in infrastructure funding
provided by TEA 21 and AIR 21 are used to increase transportation
capacity and are managed effectively. If the economy's growth slows
significantly, the Department may explore different policy decisions to
maintain the safest, most efficient, and reliable transportation system
possible.
Regarding the Department's top three challenges, I agree with
Secretary Mineta's top three challenges he has identified: (1)
maintaining focus and effectiveness in a world that is increasingly
globalized, interconnected, and consolidated in the delivery of
transportation services; (2) managing the Department to meet its
historical mission of protecting safety while being innovative in our
service delivery; and (3) working with Congress to ensure that the
Department has adequate resources.
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? While the Department often is criticized
for its actions, there are many success stories in DOT. DOT's has
identified clear and difficult-to-attain goals in compliance with the
Government Performance and Results Act (GPRA). In 2000, the Department
succeeded in reaching over 70 percent of these goals. These goals are
purposely set to be challenging, yet attainable--so you would not
expect a department to reach 100 percent of its goals. For the most
part, safety indicators show that transportation safety is improving.
Where the Department is currently having trouble is providing
enough capacity to avoid aviation and highway congestion. Keeping pace
with the growing economy over the last several years has been a
challenge for many government agencies and businesses.
Another challenging area for the Department is its efforts to
modernize its air traffic control system. Although the FAA. installed
new computers in all of its en route facilities last year, there are
still areas where FAA modernization is needed. FAA must develop systems
that are not currently in existence. In systems where software must be
developed, the FAA has often had cost overruns and delays. It will
continue to be a challenge of this Administration, and mine, if I am
confirmed, to aid in keeping these programs as close to on time and
under budget as possible.
10. Who are the stakeholders in the work of this agency? I believe
the American citizens are a broad definition of the Department's
stakeholders. Since transportation is essential to bring food to our
tables, to deliver us to work daily, and plays a vital role in cases of
national emergencies, most Americans benefit from actions of the
Department. More specifically, the Department's stakeholders include
the Congress, State and local officials, the traveling public,
transportation related businesses, and the employees who build,
maintain, and operate our nation's transportation system.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10. If
confirmed, I would clearly be accessible and responsive to the
stakeholders mentioned above. My actions, however, would be balanced
with the clear legal and ethical standard of not allowing special
interests to dictate the policy and operations of the Department.
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? If I were to
be confirmed as Assistant Secretary for Budget and Programs/Chief
Financial Officer, I would have direct responsibility to insure that
the agency has proper management and accounting controls. I believe it
is key for Federal managers to have reliable, accessible, and accurate
financial information. The Department's accounting system is an old,
internally developed system called DAFIS. The Department is currently
in the process of upgrading to an Oracle-based financial system.
Getting this ``off-the-shelf '' system installed successfully would be
a top priority for me, if I were to be confirmed. To make the
transition to a new accounting system a success, I would work closely
with the Inspector General's office and the General Accounting Office--
two organizations that have identified the need to improve the
Department's financial systems. Because this effort will be key to the
Department, I would continually inform the Secretary and Deputy
Secretary on our progress. (b) What experience do you have in managing
a large organization? I am currently the Assistant Administrator for
Financial Services/Chief Financial Officer at the Federal Aviation
Administration. I have held that position since August of 1999. In this
position, I am responsible for a staff of approximately 120 employees
and the office budget of approximately $48.4 million. In addition, as
CFO of FAA, I am responsible for shaping and defending FAA's overall
budget request of over $13 billion.
13. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals. (a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals. I believe strongly in the spirit and intent of
GPRA. Fortunately, the Department also values this law and has received
accolades as having one of the best GPRA performance plans in
government. Implementing GPRA in any department will bring a level of
focus and accountability that all businesses and government agencies
should strive to implement. The GPRA law requires an agency to identify
its strategic goals (longer-term goals) and then identify annual goals.
The annual goals are what the Department usually refers to as its GPRA
goals. Without a strategic plan and without annual performance goals,
an agency would lack focus and would lack the message to lead its
employees to success. It would also lack any definition of success. By
aggressively implementing and using the GPRA law, an agency provides a
clear message to its employees and stakeholders of what should be
expected from them over the next year. If the goals are reasonable and
are met, the agency can be identified as successful. On the other hand,
if the goals were reasonable and not met, then the agency must identify
changes in its behavior to make it a success. (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? Managing to performance is always difficult and I believe
each situation needs to be handled on an individual basis. The steps
mentioned above, elimination, privatization, downsizing, or
consolidation of departments or programs could be appropriate actions
to take. I believe that GPRA goals should be set at a level that is
hard to attain--often referred to as stretch goals. This provides
incentives to challenge the workforce and see real improvements in
performance. If an agency fails to achieve more than the majority of
its performance goals, then I think the agency should re-evaluate its
goals, identify what programs are being implemented to change the
desired performance, and possibly identify changes to both its actions
and goals. In some cases, we may find that an agency is actually
spending a great deal of time and funds trying to change some
performance indicator, but without success. Increasing funds to those
programs may or may not be the right answer. On the other hand, if an
agency has met 100 percent of its goals, I think the goals should also
be re-evaluated and probably changed. Perhaps the agency set goals that
were not very challenging, or the programs were successful and may not
need to be continued at the current level. (c) What performance goals
do you believe should be applicable to your personal performance, if
confirmed? If I were to be confirmed, I would be responsible for
administering the GPRA performance plan. I would hold myself
accountable to all of the Department's top goals. I would also
identify, with the coordination of the Secretary and Deputy Secretary,
annual performance goals for my office. These goals would include being
responsive to Congress and other stakeholders, and properly
implementing the duties of the Office of Programs and Budget--
specifically achieving and maintaining a clean audit.
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 believe that the
relationship between a supervisor and employee should be open, honest,
and mutually respectful. I also believe that any employee's performance
should be measured by objective requirements. If that individual
performs, then that performance should be rewarded. However, if
performance levels are not acceptable, then that employee should be
held accountable. Holding employees accountable is not always done in
the government, and therefore is often resisted. There was an EEO
complaint filed against the FAA that named several managers in the FAA
including me. The case is being handled in accordance with the Federal
sector EEO administrative process. It was filed March 26, 2001 and its
case number is 2-012074.
15. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. Having worked for the House
Committee on Transportation and Infrastructure for 6 years, I have
strong ties to both Congressional Members and staff. In my current job
at FAA, I try to be responsive to Congressional staff and members. If
confirmed, I would continue that effort and make sure that my office
understands the important decisionmaking role that Congress has in the
Federal Government.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. One of the many goals of the Inspector General is to
ensure that the Department is operating in a way that is free of waste,
fraud and abuse. That is certainly a goal of mine as well. In the past,
there has been a strong relationship between the Inspector General and
the Assistant Secretary for Budget and Programs. The Inspector General
may identify problems that are not readily apparent to the rest of the
Department. I have spoken to the Inspector General and welcome his
offer to continue an open, candid relationship with me, if I were to be
confirmed.
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.
Regulations are proposed only when the Department has legal authority
or direction to impose the regulations. In reviewing regulations, I
would refer back to existing law and confirm that the regulation
reflected Congressional intent. I would work with other DOT officials
to address Congressional concerns wit proposed regulation. While
serving as the Assistant Administrator for Financial Services at FAA I
did brief Congressional staff on the status of the overflight rule
before it was issued. I knew that this rule had strong Congressional
interest, and I wanted to make sure that the Congressional staff was
aware of the agencies' actions. The Office of Budget and Programs is
responsible for reviewing all regulations for budgetary impact both on
the Department and the industry. The office would also be responsible
for notifying Congress if the resources are not available to complete a
regulatory effort and propose alternatives to gain the necessary
resources.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. Congestion in both the aviation and highway
modes will continue to be a problem. The reauthorization of both TEA-21
and AIR-21 should soon be a priority of the Department and Congress.
Reviewing the current law, and identifying successful provisions and
provisions that may need changing, should be done soon in preparation
for these reauthorization efforts.
Helping FAA successfully utilize modernized air traffic equipment
should also be a priority for Congress and the Department. While FAA
has been able to purchase and install many modern pieces of equipment,
FAA has historically had difficulty with developing high-tech systems.
I think the Congress and the Department should look to the industry and
the private sector for specific improvements to successfully develop
these highly technical air traffic systems.
The authorization legislation of other transportation modes, such
as NHTSA, RSPA, FRA, MARAD, and the Coast Guard will also be important
to continue their important roles in the Department. In addition,
support for the Coast Guard's operating expenses and deepwater asset
replacement program will be essential.
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 time frame for their
implementation. I strongly believe that discretionary spending in the
highway and aviation grant programs should be based on national
priorities and determined in an open fashion. The criteria used should
be based on Congressional intent identified in law. I will make sure
that I am familiar with reports on this subject, such as the 1998
Inspector General's report on discretionary spending. In addition, I
will follow the direction Congress sets in law.
The Chairman. Thank you. Mr. O'Hollaren.
STATEMENT OF SEAN B. O'HOLLAREN, ASSISTANT
SECRETARY-DESIGNATE FOR GOVERNMENTAL AFFAIRS,
DEPARTMENT OF TRANSPORTATION
Mr. O'Hollaren. With your blessing, I will summarize my
remarks and ask that my full statement be included for the rec-
ord.
The Chairman. Without objection.
Mr. O'Hollaren. Chairman McCain, members of the Committee,
let me begin by thanking you for the opportunity to appear
before you today. Following graduation from college in Oregon,
I left for my first job in Washington, D.C. and it was as an
intern on this Committee, so it is indeed a great honor for me
to be here on this side of the dais today.
While I have held a number of positions since my
internship, I have always considered Oregon home, and I am
deeply honored and grateful to have the support of my home
state Senators, Ron Wyden and Gordon Smith.
Since being nominated, I have asked people who deal with
the Governmental Affairs Office of their expectations and what
could be done better. In response, one theme was consistent
throughout. Its customers expect Governmental Affairs to be the
primary point of contact for their dealings with the Department
and, when they call, they expect to hear back in a timely
fashion, and the information they receive to be accurate.
Secretary Mineta's knowledge of transportation and his
distinguished career on Capitol Hill give him a thorough
understanding of what is expected of the Department in its
dealings with Congress. He expects us to work with you to
ensure that the Department complies with both the spirit and
the letter of the law as passed, and to make certain that the
line of communication between Congress and the Department is
always open.
Secretary Mineta also expects us to coordinate the
congressional activities of the Department, so that we speak
with one voice. It is not just a matter of providing and
processing information, but doing so professionally,
expeditiously, and politely. In other words, there needs to be
a strong focus on customer service and, in this case, Mr.
Chairman, members of the Committee, you are the customers. I
share Secretary Mineta's belief and, if confirmed, will work
diligently to fulfill his expectations.
The opportunity to serve as Assistant Secretary to
President Bush and Secretary Mineta is a great honor, and a
rare privilege. Should I be confirmed, I will commit my energy,
experience, and enthusiasm to working with you in carrying out
the Bush Administration's transportation agenda, and in
furthering the vital mission of the Department. I will always
be straightforward with you and receptive to your input and
ideas.
I am anxious to begin working, and I thank you for the
opportunity to appear before you today. I would be happy to
address any questions.
[The prepared statement and biographical information of Mr.
O'Hollaren follow:]
Prepared Statement of Sean B. O'Hollaren, Assistant Secretary-
Designate for Governmental Affairs, Department of Transportation
Chairman McCain, Senator Hollings, Members of the Committee, let me
begin by thanking you for the opportunity to appear before you today as
President Bush's nominee for Assistant Secretary for Governmental
Affairs at the Department of Transportation. Following graduation from
college in Oregon, I headed across the country to take my first job in
Washington, D.C.--as an intern on this Committee. Without a doubt, I
could not have imagined then, as I helped prepare for Committee
hearings, that I would ever be before you being considered for
confirmation. So indeed it is a great honor for me to be here today.
While I have held a number of positions in government and the
transportation industry since my internship on this Committee, I have
always considered Oregon home and I am deeply honored and grateful to
have the support of my home state Senators, Ron Wyden and Gordon Smith.
Mr. Chairman, since being nominated for the post of Assistant
Secretary, I have spent some time speaking with elected officials and
staff who deal with the Office of Governmental Affairs. I asked them
about their expectations of the operation and what could be done
better. While there is a wide variety of opinion, one theme was
consistent throughout: Its ``customers'' expect not only to be able to
turn to the Office of Governmental Affairs as a primary point of
contact for their dealings with the Department of Transportation, but
they expect to hear back in a timely fashion, and they expect the
information they receive to be accurate. Having worked with the Office
of Governmental Affairs as a Senate staff member, I share those
expectations and, if confirmed, will work diligently to fulfill them.
Secretary Mineta's broad depth of knowledge and experience in
transportation, as well as his distinguished career in Congress, give
him a thorough understanding of what is expected of the Department in
its dealings with Congress. Secretary Mineta knows, that in addition to
being a responsive and reliable source of information, there needs to
be a strong ``customer service'' component to the office. It is not
just a matter of providing and processing information, but doing so
professionally, expeditiously and politely. In the Office of
Governmental Affairs, you and your colleagues in the House and in other
levels of government are the customers.
Mr. Chairman, as Secretary Mineta elaborated in his appearance
before this Committee, the Department's top priority is promoting
transportation safety. This mission holds true throughout the
Department. If confirmed, it will be my top priority to work with
Secretary Mineta and my colleagues at the Department to improve
transportation safety in every mode, every day. It is clear that the
safe and efficient movement of goods and people is vital to the health
and well being of the national economy and our overall quality of life.
It is the role of the Department to enhance, not impede, this mission.
Additionally, the Department is charged with the job of helping to
build and maintain our nation's transportation infrastructure. These
goals go hand in hand in determining the health of our national
transportation system. Without a healthy national transportation
system, goods cannot move to market, people cannot get to work, we
cannot defend our nation, and we cannot feed and keep our people
healthy. If confirmed, I will work with you to help achieve this
mission--whether it be through a modern air traffic control system, the
interstate highway system, a viable rail, pipeline and maritime
industry or in support of the unique mission of the U.S. Coast Guard,
the nation's ``fifth armed service.''
Mr. Chairman, we have all seen and experienced increased congestion
and delay in virtually every mode of transportation. Closing the gap
between transportation capacity and the demand for transportation
services is a top transportation priority identified by both President
Bush and Secretary Mineta. The growth in our transportation
infrastructure has not kept pace with the growth in our economy. This
gap impedes the effective movement of people and cargo. Should I be
confirmed, I will work diligently to provide the support of the Office
of Governmental Affairs to the President and the Secretary in working
to solve this problem and in carrying out the mission of the Department
of Transportation.
The Office of Governmental Affairs must be composed of an energetic
team of people who are knowledgeable about transportation issues and
willing to be responsive and professional when dealing with Congress,
governors, state and local officials, other federal departments,
branches and agencies, and relevant transportation industries. It would
also be my goal to work closely with the various modal administrations
to coordinate their dealings with Congress so that the Department may
speak with one voice on critical policy issues. The Office of
Governmental Affairs must serve as a conduit of communication between
the Department and Congress, the White House, state and local
governments and other federal departments and agencies. It must be a
key point of contact for solving problems that may arise between the
Department and its various constituencies.
If confirmed, it is my intent to work with you to ensure that the
Department complies with both the spirit and letter of the laws passed.
It is also my intent to make certain that the lines of communication
between the Congress and the Department are always open. It is critical
to be in constant consultation with Congress and other transportation
stakeholders in order to effectively implement laws and regulations and
to fully understand congressional intent and the impact of the laws and
regulations on the transportation system.
Mr. Chairman, Members of the Committee, in the coming months, the
Department and Congress will have the opportunity to work together on
initiatives that improve safety and expand capacity. As major
authorization legislation expires, such as TEA-21 and AIR-21, continued
focus must be placed not only on safety enhancements, but also on
building even more capacity to meet continually growing demand. There
is also the opportunity to work together to address the Coast Guard's
deepwater asset replacement program, and to reauthorize the entire
Coast Guard program. Reauthorization will be needed for this important
agency, and also for the Research and Special Programs Administration,
the National Highway Traffic Safety Administration, the Federal
Railroad Administration, and the Maritime Administration. Additionally,
while separate from the Department, Amtrak capital and operational
shortfalls and the recommendations of the Amtrak Reform Council merit
legislative consideration. High priority will need to be given to
modernization of the Air Traffic Control system and implementation of
the recently enacted TREAD legislation. It is my hope to work with you
and the White House Legislative Affairs team to produce solutions to
these and other issues of mutual concern to meet the growing need for
transportation services.
The opportunity to serve as Assistant Secretary to President Bush
and Secretary Mineta is a great honor and a rare privilege. Should I be
confirmed, I would commit my energy, experience and enthusiasm to
working with you and my transportation colleagues in carrying out the
Bush Administration's transportation agenda and in furthering the vital
mission of the Department. Without a doubt, this job will be
challenging and educational. The issues will constantly change,
creating new and different opportunities to solve problems and to help
give taxpayers a return on their investment in government. Mr.
Chairman, Members of the Committee, I will always be straight forward
with you and receptive to your input and ideas. I am anxious to begin
working together to improve transportation in America. Again, I thank
you for the opportunity to appear before you today.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Sean Brendan O'Hollaren.
2. Position to which nominated: Assistant Secretary of
Transportation for Governmental Affairs.
3. Date of nomination: April 5, 2001.
4. Address: Information unavailable to the public. Work: U.S. Dept
of Transportation, 400 Seventh St, SW, Washington, D.C. 20590.
5. Date and place of birth: September 4, 1961, Portland, Oregon.
6. Marital status: Married to the former Hilary Newhn.
7. Names and ages of children: Rory McHugh O'Hollaren, born July
12, 2000.
8. Education: Georgetown University, Certificate Program in
Business Administration, 1987; Willamette University, Bachelor of
Science in Political Science and Psychology, 1983; Villanova
Preparatory School, Diploma, 1979.
9. Employment record: Union Pacific Co., Director of Washington
Affairs--Tax & Environment, Washington, D.C., November 1991-April 2001;
U.S. Senate Committee on Appropriations, Professional Staff,
Washington, D.C., May 1990-November 1991; U.S. Senator Mark O.
Hatfield, Legislative Assistant, Washington, D.C., August 1987-May
1990; U.S. Senator Mark O. Hatfield, Staff Assistant, Washington, D.C.,
January 1985-August 1987; U.S. Senator Mark O. Hatfield, Washington,
D.C., Intern, September 1984-January 1985; U.S. Senate Committee on
Commerce, Science and Transportation, Washington, D.C., April 1984-
September 1984, Intern; Oregon Department of Justice, Office of
Attorney General Dave Frohnmayer, Salem, Oregon, September 1983-April
1984, Intern/Paralegal; Marion County Court, Juvenile Justice
Department, Salem, Oregon, Instructor, January 1983-June 1983.
10. Government experience: U.S. Senate Committee on Appropriations,
Professional Staff, Washington, D.C., May 1990-November 1991; U.S.
Senator Mark O. Hatfield, Legislative Assistant, Washington, D.C.,
August 1987-May 1990; U.S. Senator Mark O. Hatfield, Staff Assistant,
Washington, D.C., January 1985-August 1987; U.S. Senator Mark O.
Hatfield, Washington, D.C., Intern, September 1984-January 1985; U.S.
Senate Committee on Commerce, Science and Transportation, Washington,
D.C., April 1984-September 1984, Intern; Oregon Department of Justice,
Office of Attorney General Dave Frohnmayer, Salem, Oregon, September
1983-April 1984, Intern/Paralegal; Marion County Court, Juvenile
Justice Department, Salem, Oregon, Instructor, January 1983-June 1983.
11. Business relationships: Union Pacific, Director of Washington
Affairs, Tax & Environment.
12. Memberships: West Annapolis Civic Association, Board Member
2000-2002, Treasurer, 2001-2002; Environmental Transportation
Association, President, 1993-1996; Calvary Woman's Shelter, Board of
Directors, 1994-1996; Villanova Preparatory School, Alumni Board
Member, 1999-2001; Washington Decade Society (charitable organization),
2001 Ball Co-Chair; Sigma Alpha Epsilon Social Fraternity, President,
1981-1983; Union Pacific Fund for Effective Government (Political
Action Committee), Board Member, 1991-2001; Capitol Hill East
Condominium Association, Board Member 1991-1993; Willamette University
Associated Student Body, Senator, 1981-1983; Capitol Mini Cooper
Register (automobile club), 2000-2001; Mercedes-Benz Club of America,
1987-2001; Club VW, 1998-2001; Land Rover Owners 1997-2001; Audi
Quattro Club, 2000-2001; MGT Register 1995-2001; Severn Sailing
Association, 1999-2001; St. Mary's Catholic Church, 1999-2001; Oregon
State Society, 1984-2001. (Note: The automobile clubs listed are social
and technical in nature and do not take positions on legislation or
matters before the Department of Transportation).
13. Political affiliations and activities: (a) I have held no
previous elected or appointive political offices. (b) I served as a
volunteer on the 1980 Bush for President campaign in Salem, Oregon, and
as a volunteer on the 1992 Bush/Quayle campaign in Washington, D.C.
Additionally, as a member of Union Pacific's Fund for Effective
Government Political Action Committee, I volunteered to serve on
numerous steering committees to raise funds for Republican Senate and
House candidates. (c) To the best of my knowledge, I have made the
following personal political contributions of $500.00 or more over the
past 10 years: Republican National Committee, Victory 2000--$500.00;
McCain 2000 Inc.--$750.00; Abraham for Senate 2000--$1,000.00;
Republican Majority Fund--$500; Union Pacific Fund for Effective
Government Political Action Committee: 2000--$1096.00, 1999--$1063.00,
1998--$1016.00, 1997--$973.00, 1996--$940.00, 1995--$906.00, 1994--
$871.00.
14. Honors and awards: Willamette University Senior Certificate for
Outstanding Contributions to the University, 1983; Union Pacific
Executive Achievement Award, 1999.
15. Published writings: None.
16. Speeches: While at Union Pacific, I made numerous speeches and
presentations on issues relating to transportation and Federal affairs,
however, only notes and overhead slides were used in lieu of prepared
text.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? While the reason for my selection was not
elaborated to me, my experience in the transportation industry and as a
staff member in the U.S. Senate were likely strong factors. Through
these experiences, I have worked across political boundaries and with a
wide variety of industries and government agencies to accomplish
legislative goals. I believe it is President Bush's objective to put
together a team of people who will work together as a team with
Secretary Mineta to advance the transportation agenda on Capitol Hill
and throughout the country. (b) What do you believe in your background
or employment experience affirmatively qualifies you for this
particular appointment? Should I be confirmed by the U.S. Senate, I
would bring to the position nearly 10 years of work in governmental
relations from a regulated transportation sector and more than 8 years
of experience in Congressional offices that, had regular interplay with
government agencies at all levels. This has given me a keen
understanding of the needs of Capitol Hill and the transportation
industry.
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. The only remaining financial arrangement with my
former employer is a pension obligation earned over more than 9 years
of service (roughly $1,660.00 monthly at age 65). Please see the
attached opinion letter from the Department's Acting General Counsel on
this matter.
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. All transportation
stocks have been divested from my portfolio. My wife is a current
employee in the Washington Office of AT&T. Because of her work and
associated benefits and stock holdings, the Acting General Counsel has
also addressed this matter.
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? Union Pacific's compensation
package included the award of stock and stock options. To date, all of
the stock held has been sold and all options vested have been exercised
and sold. I have divested all UP holdings and entered into a recusal
agreement with the Department of Transportation, which would be
effective, should I be confirmed. Additionally, all unvested options of
Union Pacific Corporate stock were revoked upon my termination of
employment, March 28, 2001.
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. From November
1991 to April 2001, I served as a registered lobbyist for Union
Pacific. In that capacity, I worked on a wide variety of transportation
and related legislation of interest to Union Pacific and its
subsidiaries. While I have outlined some of the major issues below
where I took a position on legislation on behalf of the Company,
complete copies of the lobbying reports for the past 10 years are on
file and available for review with the Clerk of the House and the
Secretary of the Senate.
HR 4475 Treasury Appropriations--In support of U.S. Customs Service
funding; H.R. 4475 Transportation Appropriations--Monitored various
rail provisions; H.R. 4578 Interior Appropriations--Supported mining
and coal provisions; H.R. 4577 Consolidated Appropriations--Monitored
Whistle Ban language; H.R. 833 Bankruptcy Reform Act--Supported rail
rolling stock provisions; S. 608 Nuclear Waste Policy Amdt.--Monitored
for transport provisions; H.R. 4507 Transit Rail Access--Opposed; H.R.
4514 Rail Merger Reform--Opposed; H.R. 3163 STB Reauthorization--
Opposed; H.R. 3398 Railroad Competition Act--Opposed; S. 98 STB
Reauthorization--Supported; H.R. 2614 Community Development Act--
Supported repeal of 4.3 cent fuel tax on railroads; S. 3152 Community
Renewal (AMTRAK)--Monitored; H.R. 1001/S. 820 Transp. Tax Equity Act--
Supported; H.R. 4844 Railroad Retirement--Supported; Various Managed
Care bills--No position/monitored; Various Medical Confidentiality
bills--Supported rail provisions; S. 1090 Superfund Reform--Supported
rail provisions.
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 refer to the attached opinion letter from the
Department's Acting General Counsel.
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 complaint to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? 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? 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? While I have never been named
personally as a party, Union Pacific Corp. has been and is involved in
both administrative proceedings and civil litigation.
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 can think of no additional
information that is not already covered in other sections of this
document.
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. It
is my intent to work with every agency of the Department of
Transportation to ensure that laws and legislative intent are
effectively implemented, administered, and enforced. I will consult
with affected modal administrations to help review the laws and
regulations. Additionally, I will work with Members of Congress and
their staff to gain a strong understanding of legislative intent.
Secretary Mineta has the advantage of being a former Member of
Congress, and accordingly, he fully understands what is expected of the
Department in its dealings with Congress.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The Department's mission is
to assure safety in all aspects of transportation. Its second mission
is to provide available financial assistance to invest in the country's
infrastructure network that will support national defense and economic
growth. The national transportation system connects resources with
consumers and enables citizens to travel to where they need and want to
go. The Department's major programs support this mission. Highway and
transit funding are authorized in the Transportation Equity Act for the
21st Century (TEA-21), and aviation operating, capital and airport
grant funding are authorized in the Aviation Investment and Reform Act
for the 21st Century (AIR-21). The Department also funds rail and
marine transportation improvements, Coast Guard operations, pipeline
inspections, and transportation safety programs. These programs reflect
the Department's five main operational objectives: enhancing safety,
the human and natural environment, national defense, mobility, and
economic growth and trade.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
F. GENERAL QUALIFICATIONS AND VIEWS
1. How have your previous professional experience and education
qualifies you for the position for which you have been nominated? As an
undergraduate, my major area of study was in political science. As part
of my education, I interned in the Oregon State Legislature prior to
moving to Washington, D.C., to begin work on Capitol Hill. My first
experience in Washington was as an intern on the Senate Commerce
Committee. When I began handling legislative issues in a Senate office,
I was assigned transportation as my area of responsibility. During this
period, I completed an intensified executive program in Business
Administration at Georgetown University. The program was helpful in
gaining an understanding of the interplay between business and
government. When I moved to the Appropriations Committee, I handled
transportation funding and related matters. In 1991, I left the
employment of the Federal Government to begin work in the
transportation industry. This combination of education and work
experience has given me a keen understanding of the relationship
between government, at all levels, and the transportation industries it
regulates. I have dealt with the Department of Transportation from the
perspective of a congressional staff member and as a representative of
the transportation industry.
2. Why do you wish to serve in the position for which you have been
nominated? This is an honor and a rare opportunity to serve two people
I greatly respect, President Bush and Secretary Mineta. The job will be
challenging and educational. The issues will constantly change,
creating new and different opportunities to solve problems and to help
give taxpayers a return on their investment in government. Not only is
transportation my career, but it is my passion. For someone who is
passionate and enthusiastic about transportation and politics and
government, this is perhaps the ultimate job.
3. What goals have you established for your first 2 years in this
position, if confirmed? My primary goal will be to provide the support
of the Office of Governmental Affairs to the President and the
Secretary in carrying out the mission of the Department of
Transportation. If confirmed, I would hope to put together an energetic
team of people who are knowledgeable of transportation issues and
willing to be responsive and professional when dealing with inquires
from Members of Congress and their staff, Governors, State and local
officials, other Federal departments, branches and agencies, and
relevant transportation industries. The Department of Transportation
should be recognized as the most responsive department in the Federal
Government. While this may seem lofty, there is no reason for the
Department not to be fully responsive to its stakeholders.
It is also my goal to better coordinate the Congressional and
Intergovernmental Affairs activities of the various modal
administrations with that of the Office of Governmental Affairs.
Achieving this will allow the Department to lay out clear objectives
and to speak with one voice on critical policy issues. The Office of
Governmental Affairs must serve as a conduit of communication between
the Department and Congress, the White House, State and local
governments and other Federal departments and agencies. It must be a
point of contact for solving problems that may arise between the
Department and its various constituencies.
As part of my goal to make the Office of Governmental Affairs
easier to work with, I would hope to improve communications with
Congress and various other government entities through enhanced use of
the Internet. Grant announcements can be expedited and distributed
simultaneously to congressional offices using the Internet to make such
announcements. Additionally, questions tabbed on a Governmental Affairs
Home Page can be directed to the various modal administrations for
response, thus vastly improving the length of time in responding to
inquires on Departmental matters. This technology is used in numerous
governmental agencies and virtually every congressional office. There
is no reason why it cannot be put to more efficient use in enhancing
the effectiveness of the Governmental Affairs Office.
In summary, I hope to represent the President and the Secretary in
an honest and straightforward manner; be prompt and responsive;
exemplify integrity and the highest ethical standards; effectively
communicate between the Department and its various constituencies; and
be courteous and ``customer friendly.'' These are my personal goals as
well as those of the Governmental Affairs operation.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills? I believe I have the necessary skills to
successfully carry out the job of Assistant Secretary of Transportation
for Governmental Affairs. While I do not expect to know everything
about the numerous issues the Department will face, I do possess the
desire and willingness to learn and to be humble. The job does carry
high expectations and great challenges which I intend to do my best to
meet.
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.
First and foremost, I do not believe that government has the answers to
all problems in American society. My philosophical views of government
adhere very closely to the principles on which this democracy was
established, as outlined in the Declaration of Independence and the
Constitution. Aside from the responsibilities of government outlined in
the Constitution, I do not believe there is a defined litmus test to
determine when and where the government should step into the private
sector. In transportation, government is a partner with the private
sector in virtually every mode. The role of government in the private
sector has to be determined on a case-by-case basis, issue by issue.
It is my belief that the private sector has a basic obligation to
serve and provide for certain public interests. When the private sector
and the competitive marketplace fail to meet this obligation,
government needs to step in with the force of law to give direction. If
the imposition is too great, it will damage the private entity. If the
imposition is too little, certain entities will take advantage of the
resources available and will refuse to serve any public good.
Take for example, the case of industrial pollution. Prior to
certain environmental laws and regulations being enacted, many
companies used available resources to manufacture their products and
produce a profit, but often returned only waste to the environment. In
this case, the government imposed certain laws to protect the public's
interest. In the case of transportation, the government has implemented
laws to protect the safety of the public while using transportation
systems. In the case of economic regulation of certain transportation
sectors, as I have seen in rail, government overreached and forced many
companies into bankruptcy. This brought on a correction under
deregulation, which again allowed companies to prosper and invest to
better serve the public interest. In the long run, government should
try to encourage the private sector to find solutions to problems and
should work with the various levels of governments to determine the
appropriate level of involvement.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The primary
objective of the Department of Transportation is to do everything in
its power to ensure that the national transportation system is the
safest and most efficient in the world. Each of the safety agencies
within the Department has as its mission to maintain and improve upon
the record of safety. The safe and efficient movement of goods and
people is vital to the health and well being of the national economy
and our overall quality of life. It is the role of the Department to
enhance, not impede, this mission. The Department is also charged with
a major economic mission in building and maintaining transportation
infrastructure. Without the ability to move people to their
destinations, whether it be to work, to school or to a hospital, our
economic vitality is directly linked to mobility. Without healthy
transportation systems, goods cannot move to market, we cannot defend
our nation, and we cannot feed and keep our people healthy. The health
of the overall transportation is directly linked to the overall health
and well-being of the nation. It is the Department's mission to keep
the transportation system healthy--whether it be through a modern air
traffic control system, the interstate highway system, or a viable
rail, pipeline and maritime industry.
The Department is responsible for providing direct financial
assistance, regulatory oversight and enforcement, operational safety
services, public education and research. The Department also has a
unique mission in its support of the U.S. Coast Guard, the nation's
``fifth armed service.''
The Department of Transportation's strategic objectives include
promoting health and safety by reducing the number of transportation
related injuries and deaths; improving mobility by delivering
accessible, affordable and reliable transportation system for people
and goods; and ensuring the security of the national transportation
system.
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. One
issue that has plagued the national transportation system is
congestion. This has become an increasingly difficult issue for both
the effective movement of people and cargo. We have seen this problem
grow in virtually every mode of transportation. Much of this congestion
is a result of the growth in our economy. However, the growth in our
transportation infrastructure has not kept pace. Bridging the gap
between the demand for transportation services and capacity of our
infrastructure is one of Secretary Mineta's top priorities, and should
I be confirmed, I will work to support Departmental activities that
relieve congestion.
Changes in technology, the environment and the economy will put
pressure on the Department to adjust its mission to remain modern and
efficient. The Department must be willing to experiment with innovative
programs, and wherever reasonable, it should embrace private sector
solutions to problems that affect our infrastructure system.
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? The outside force that could prevent the
Department from accomplishing its mission is significant economic
downturn, which may diminish the revenue provided to the Department by
Congress. The top three challenges facing the Department are: (1)
Proper stewardship of financial assistance for mega-projects; (2)
Applying best available technology to Air Traffic Control; (3) Having
the resources to meet the challenges of the 21st Century.
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? Each agency within the Department has its
own specific mission and accordingly, its own failures and successes.
The Inspector General has outlined many of these in a recent report--
with a focus on safety, stewardship of transportation funding and
aviation system performance. From my current perspective, it is
difficult to cast judgment without having the benefit of understanding
what obstacles may exist within the Department. However, in spite of a
skilled and professional workforce at the Department, it often fails to
be innovative and dynamic, as is demanded of the private sector. This
is in large part, because it is difficult to be nimble and responsive
in any large organization. The willingness to maintain the status quo
is prevalent because it is easiest. This also goes for financial
discipline. There are often too many places for abuses to occur, and
thus if any fraud or abuse exists, the Department has failed in its
mission. Additionally, I do not believe the Department has effectively
outreached to its constituencies in transportation. In particular,
businesses regulated by the Department are forced to ``shop around''
for someone within the Department to take their call, because there is
no obvious stopping point. This could be addressed by creating an
``Industry Affairs'' office, which could subsequently direct inquires
to the appropriate person. I also believe that poor communications
between the Department and its stakeholders has contributed to some
failings. Often the channels of communication seem to be open within
the Department, but narrowed with outside constituencies. If confirmed,
it would be one of my objectives to improve the level of communication
between the Office of Governmental Affairs and Congress, as well as
other branches and of government and relevant transportation partners
in the private sector--all as a means of improving customer service.
10. Who are the stakeholders in the work of this agency? The
Department's stakeholders are: Congress, State and local elected
officials, the various transportation industries, the numerous
government employees who help build, maintain, and administer
transportation systems, and the traveling public. Given the role
transportation plays in the nation's economy, defense, and well-being,
the stakeholders are as broad and diverse as the American people.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 10. My
position requires me to be held accountable to the stakeholders. As a
user of most modes of transportation under the Department's
jurisdiction, however, I also include myself as a stakeholder. If
confirmed, the proper relationship would be to listen to the concerns
of stakeholders, learn the issues, and communicate the Department's
objectives as part of carrying out my official duties. My primary
responsibility will be to communicate between the Department and its
various stakeholders, and to facilitate finding solutions to problems
in the transportation 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? Management
and accounting controls at the Department of Transportation are the
primary responsibility of the Assistant Secretary of Transportation for
Budget and Programs, who also serves as the Department's Chief
Financial Officer. If confirmed, I would work with the Budget office to
ensure that proper accounting and financial planning and procedures
were adhered to within the Office of Governmental Affairs. I also share
Secretary Mineta's policy of zero tolerance for waste, fraud and abuse.
I believe every employee of the Department has an obligation to expose
every possible case of misuse of taxpayer funds. It would also be my
intent to work with the Department's Inspector General to address
various financial concerns within the various modal administrations, to
make sure that every dollar spent is in accordance with the law, and
that appropriate financial controls are in place. (b) What experience
do you have in managing a large organization? For almost 10 years, I
served as a manager in the Washington, D.C., office of a large
transportation company. However, the office I worked in was quite small
with a management focus on issues, rather than a large number of
employees. If confirmed, I would work to instill a management style
that encourages people to perform by motivating to succeed, versus
instilling fear over what will happen if they fail at their duty.
Secretary Mineta has discussed various ways to manage by holding people
accountable for their actions and giving them the responsibility to
perform.
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. My experience in the private sector had a strong
emphasis on setting annual goals to use as a performance standard
throughout the year. These goals could be updated, and would be
periodically reviewed so that performance adjustments could be made. In
establishing objectives, both personal and organizational goals would
be included. This was useful as a measure of performance and to make
certain everyone was working toward mutual organizational objectives.
This also allowed managers to test the success, or lack thereof, of
certain methods used to achieve these personal and organizational
goals. We also engaged in a feedback program that allowed peers and
subordinates to rate managers as a way to improve the quality of
management. I would hope to use similar methods if confirmed. (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? While the Department sets its own goals, many of the
Department's performance goals are determined by Congress. Congress
expects these goals to be met, but it has the responsibility to provide
the Department with the necessary tools and resources to fulfill the
objectives outlined in legislation. If the Department fails to meet its
objectives, the reasons for the failure must be determined and the
Department must take appropriate action to correct the problem. This
could include eliminating, privatizing, downsizing, or consolidating
operations. Additionally, the Department must learn from its mistakes
and put appropriate safeguards in place to prevent a recurrence. As in
the private sector, government must be innovative and creative in its
approach to the issues it is charged with addressing. Outstanding
performance should be rewarded and poor performance should have
consequences. (c) What performance goals do you believe should be
applicable to your personal performance, if confirmed? As stated in
question No. 3, my primary goal will be to provide the support of the
Office of Governmental Affairs to the President and the Secretary in
carrying out the mission of the Department of Transportation. If
confirmed, I would hope to put together an energetic team of people who
are knowledgeable of transportation issues and willing to be responsive
and professional when dealing with inquires from Members of Congress
and their staff, Governors, State and local officials, other Federal
departments, branches and agencies, and relevant transportation
industries. The Department of Transportation should be recognized as
the most responsive department in the Federal Government. While this
may seem lofty, there is no reason for the Department not to be fully
responsive to its stakeholders. I should be judged on my ability to
represent the President and the Secretary in an honest and
straightforward manner; be prompt and responsive; exemplify integrity
and the highest ethical standards; effectively communicate between the
Department and its various constituencies; and be courteous and
``customer friendly.''
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? My supervisory model
integrates the practices learned from management courses I have taken
and from the various supervisors I have had during my career. In
general, I believe that a supervisor has to have the respect of his or
her colleagues and staff to be effective. The more professional the
relationship, the more effective the team will operate together. I
believe in charging individuals with responsibility and accountability
in carrying out their responsibilities. An effective manager must
provide leadership, but use a cooperative team approach to problem
solving rather than intimidation. I believe that giving credit where
credit is due is a very important management tool. I am not aware of
any complaints brought 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. My entire professional career has
involved working with committees of Congress. My first direct working
relationship with Congress at the Federal level was as an intern on the
Senate Commerce Committee. As a Legislative Assistant for a U.S.
Senator, my work involved constant interaction with not only the
Committees he served on, but the relevant committees for my areas of
responsibility as well. I also served as professional staff on the
Senate Appropriations Committee. Finally, as a governmental affairs
representative for a transportation company, I was constantly meeting,
corresponding and discussing issues with both members and staff of the
relevant committees of jurisdiction.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. It is my understanding that the Inspector General
(IG) is directed by statute to report directly to Congress. The IG is
independently appointed and confirmed and is designed to remain
insulated and somewhat independent of activities in the Department.
This is done to allow the highest level of objectivity in reporting on
the Department's practices and activities. The findings of the IG are
important tools that should be taken seriously and used as a fulcrum
for change at the Department. If confirmed, I would communicate openly,
candidly, and cooperatively with the IG and work to implement needed
changes that may be discovered and outlined in his or her findings. I
view the IG as a powerful and much needed watchdog of the Department's
activities.
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
Senate Committee on Commerce, Science, and Transportation is one of the
primary committees with authorizing jurisdiction over the Department of
Transportation. If confirmed, it is my intent to work diligently with
Committee Members and staff to make certain that the Department
complies with both the spirit and letter of the laws passed by the
Committee. It is also my intent to make certain that the lines of
communication between the Committee and the Department are always open.
It is critical to be in constant consultation with the Committee in
order to effectively implement laws and regulations and to fully
understand congressional intent. Much is the same for other
stakeholders. It is critical to be in constant consultation with a wide
spectrum of stakeholders in order to fully understand the impact of the
laws and regulations on all the various stakeholders in the
tinsportation system.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. The Department and Congress should work
together on initiatives that improve safety and expand capacity. These
are closely linked. The current demand for transportation services far
exceeds the system's ability to deliver. Accordingly, effort and energy
should be focused on enhancing and expanding capacity, largely through
the addition of new transportation infrastructure. As major
authorization legislation expires, such as TEA-21 and AIR-21, continued
focus must be placed not only on safety enhancements, but on building
even more capacity to meet the continually growing demand.
It is also important to continue support for the Coast Guard's
deepwater asset replacement program, and to reauthorize the entire
Coast Guard program. Reauthorization will be needed for not only this
important agency, but also the Research and Special Programs
Administration, the National Highway Traffic Safety Administration, the
Federal Railroad Administration, and the Maritime Administration.
Additionally, decisions will need to be made and legislation
enacted on AMTRAK's ongoing capital and operational shortfall and the
recommendations of the AMTRAK Reform Council. High priority will need
to be given to modernization of the Air Traffic Control system and
implementation of the recently enacted TREAD legislation, although it
is not expected that further legislation is needed in these areas.
The focus needs to remain on funding for these critical
Departmental programs. Without the needed financial resources, it will
be impossible for the Department to carry out its mission and fulfill
the mandates of Congress.
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.
The discretionary funds allocated by the Department are significant and
must be awarded using established and public criteria. It is important
to note that much of the funding distributed by the Department goes
directly to the states, and they determine the priorities and basis and
eligibility for awarding grants. With the combination of the amount
awarded to states and Congressionally earmarking, the percentage of
funds where the Department has total discretion is relatively small.
Given the importance of transportation to the overall economy of the
country, the Department has an obligation to make certain that limited
resources are spent on the highest priority and most cost-effective
projects. To this end, the Department must work diligently with
Congress and State and local governments to do its best to assure that
every dollar is put to use to improve the well being of the
transportation system, and accordingly, the economy. If confirmed, my
timeframe for imposing the allocation process would be immediate.
The Chairman. Thank you.
Ms. McLean, the GAO and DOT Inspector General have reported
that several major infrastructure projects that received
federal money, including the Boston Central Artery Tunnel
project, known as the Big Dig, the Los Angeles subway project,
and the San Francisco BART, have experienced significant cost
overruns and schedule delays. The Boston Central Artery Tunnel
project is now the most expensive public works project in the
history of this nation.
What actions will you take to ensure federally funded
projects contain costs, meet schedules, and do not increase the
financial exposure of the American taxpayer?
Ms. McLean. Mr. Chairman, I understand I believe the
Department's role has probably changed in the last several
years, where we had previously been, or the Department had
previously been issuing grants, and the proper oversight
probably was not being done. In the last Administration, there
was the beginnings of this oversight for these large
megaprojects, that is what the Department refers to them as,
and Secretary Mineta, I know, is committed to continuing a very
strong oversight role.
The specifics of that oversight have not been determined,
but I am definitely going to be working with the Secretary if I
am confirmed, and Deputy Secretary Michael Jackson, to make
sure that those projects are overseen by the Department,
because these grants, issuing the grants is not where our
responsibility, or the Department's responsibility should stop,
so I understand the importance of that oversight.
The Chairman. The Congress approved legislation in 1995
which directed the FAA to develop a cost-accounting system,
which I believe is very important. The projected roll-out date
has slipped several times, and since then most recently to
2002. Do you believe you can make that system be fully
developed and in place by 2002?
Ms. McLean. As you know, working at FAA over the last 18
months, we have been working extremely hard on the cost-
accounting system, and I believe that we can meet the deadline
by 2002, sir. In the last fiscal year we have been able to
basically have monthly reports come out of the cost-accounting
system that equates to about 70 percent of FAA's total cost, so
I think we are progressing on that system. However, it is
frustrating at the length of time it has taken to get to this
point.
The Chairman. You think you can get it done by 2002?
Ms. McLean. I believe so, sir.
The Chairman. What is your view in general of user fees?
Ms. McLean. Well, I strongly support the user fees that
were passed on oversight for international flights, and that
right now is in litigation, and I am anxious to see that come
to closure so that FAA can receive the user fees for
international flights that currently those users are not paying
into the system.
Overall user fees for transportation, I believe that users
right now are paying into the system through taxes, but you
know, user fees obviously is another option for having users
pay for their use of a system. I think that in general users
should contribute to a system.
The Chairman. Finally, the predictions are that we are
going to have the worst summer in history as far as aviation is
concerned, particularly if there is an onset of bad weather. I
think this not only is disruptive to average citizens, but
obviously could have further debilitating effects on the
economy.
Do you have any views in the short term or the long term
about this issue, particularly as far as programs are
concerned?
Ms. McLean. Well, I think that FAA's recent efforts to
issue benchmarks of the airports, in other words to identify
exactly what the capacity of each airport is, and to clearly
note, in good weather and bad weather, what is a reasonable
number of flights to come in and out of airports.
It is helpful in the sense that we have to acknowledge that
there are limits to the capacity that are at airports currently
today, and without additional technology in the short term, or
runway expansions in the long term, we are not going to see,
unfortunately, any significant, probably, improvement in the
delays we saw last year this coming year.
However, FAA is also doing some additional coordination
with airlines at their Herndon Center which allows airports and
airlines to understand what the capacity and delay concerns
are, and I think a lot of the problems and frustration in
traveling is that the travelers do not have the information.
The travelers do not understand that in fact their flight is
going to be delayed until the last minute.
With this effort, with FAA working with the airlines, I
believe that information is getting to airlines quicker, and
the intention of the airlines is to pass that on to the
consumers, which I think in the short term will hopefully help
people understand the system.
The Chairman. Well, I think our babies are getting
restless----
[Laughter.]
Ms. McLean. I thank them.
The Chairman [continuing]. So I will congratulate you both,
and we look forward to a rapid markup and confirmation so you
can get to work. We thank you for your willingness to serve,
and we are very pleased to have two individuals of your quality
serving in these very important positions.
Thank you very much.
Ms. McLean. Thank you.
The Chairman. This hearing is adjourned.
[Whereupon, at 10:47 a.m., the Committee adjourned.]
A P P E N D I X
Prepared Statement of Hon. Sam Brownback, U.S. Senator from Kansas
Thank you Mr. Chairman, for holding this hearing in an expeditious
manner and thank you to all the witnesses for being here today and your
willingness to serve in our nations's government in your respective
agencies. I have had the opportunity to meet with some of you,
particularly Ms. McLean and Mr. O'Hollaren, I appreciate your taking
the time to visit with me about Transportation issues. I am
particularly pleased to see Sean O'Hollaren up here today, who I have
had the great pleasure of working with over the years in his capacity
at Union Pacific railroad, through good times and bad. I'm sure he is
glad he does not need to hear any more from me about the grain sitting
on the ground in Kansas during harvest time. I look forward to working
with you both at the Department of Transportation, and I take pleasure
in supporting both your nominations.
Ms. McLean and Mr. O'Hollaren. I would like to make some general
remarks about an issue I am deeply concerned about, and get your
reaction to them, if I may. This concerns an issue we discussed when we
met last week, and which I have raised before in this Committee.
Summer is right around the corner, and the traveling public can
expect the same horrendous air travel delays experienced during the
past several years. We have a capacity crisis in our nation's aviation
infrastructure, and unless we build new runways and build them faster
than we are now, aviation gridlock will become a permanent feature of
air travel. In order to speed up runway construction, we must bring
some common sense and predictability to the convoluted, sluggish and
prolonged environmental review process governing runway construction.
The unbearable air travel delays experienced during the past few
summers are proof that our nation's aviation system has been pushed to
its capacity. During the past 10 years, the number of people using the
aviation system has increased by 40 percent. However, during this time,
only six new runways have been built at the nation's busiest airports.
In addition, passenger traffic is expected to reach one billion persons
by the end of the decade. Experts say that in order to keep pace with
anticipated growth, airports would have to recreate the equivalent of
the 17 largest airports. It's also been said that the nation is about
50 miles of runways short of where it needs to be to meet future
demand.
Last year, Congress took an important first step to reducing
aviation gridlock by providing historic increases in funding for
airport construction projects through the FAA reauthorization bill,
AIR-21. However, money is only one piece of the puzzle. Without a more
efficient environmental review process, airports will not be able to
complete necessary construction projects in time to meet the expected
demand in passenger and cargo enplanements even with increases in
federal spending.
Over the years, multiple reviews by federal, state and local
governments, open-deadlines for completion of these reviews and
different state and local requirements have bogged down the review
process and have strangled airport construction projects across the
country. Currently, there are 40 federal laws and executive orders that
govern runway construction. None are synchronized and there are no
deadlines for these reviews. A number of agencies including, but not
limited, to the Federal Aviation Administration, the Environmental
Protection Agency, the Department of Interior, and the Army Corps of
Engineers all have jurisdiction over the environmental review process
and each works at their own pace. The result of this complicated review
process is that runway construction projects can take 10 to 15 years
from start to completion, even without opposition.
Last month, President George W. Bush said that the nation needed to
expand airport capacity in order to reduce the number of air travel
delays and that there were a number of environmental regulations that
prohibit the expansion of runways. I agree with the President and have
been actively working with Senate Appropriations Chairman Ted Stevens
on legislation to streamline current environmental reviews required of
critical airport construction projects so the nation can reduce
aviation gridlock and meet future demand.
It's important to point out that we are not seeking to change,
weaken or loosen existing environmental law. What we are working on is
a coordination of the environmental review process for runway
construction so that it is not a series of overlapping jurisdictions
and neverending deadlines. We need to bring some order to an important
but unproductive environmental review process that threatens the
ability of the U.S. aviation system to meet future demands.
In January, during the Senate Commerce Committee's confirmation
hearing for Secretary of Transportation Norman Mineta, I said that the
107th Congress needs to be aggressive to improve airport capacity. My
constituents are frustrated with flying, because of flight delays,
cancellations and congestion at our airports. All of us have sat
waiting for hours on tarmacs of different airports, and those delays
fuel the lion's share of the public's frustration with the aviation
industry. We have a capacity crisis in our nation's aviation
infrastructure, and my constituents have caught on to the problem. They
fly defensively, avoiding if at all possible certain airports that are
notorious for delays.
Streamlining the environmental review process for building new
runways will not reduce the delays expected this summer, but it will
reduce delays in the long-run. We must increase the capacity on the
ground at our nation's airports. We must build more runways and build
them faster than we are now. We faced a crisis in air transportation
last summer, and the summer before that, and we did nothing about it.
If Congress does not streamline environmental reviews required of
runway construction projects, aviation gridlock will become a permanent
part of air travel.
Ms. McLean, Mr. O'Hollaren, your thoughts on this, please.
______
Response to Written Questions Submitted by Hon. John McCain
to Timothy J. Muris
Question 1a. It appears from the many academic articles you have
written about mergers that your approach to merger reviews is different
from that of the current Federal Trade Commission. In particular, you
appear to advocate placing greater weight on the efficiencies that
could arise from mergers and less weight on theoretical harms that
could result. Is this a fair characterization of your approach? Can you
elaborate on this?
Responses. On the overwhelming majority of mergers, my approach
will not be different. Regarding efficiency, throughout my career, I
have followed closely the issue of the efficiency defense in merger
cases. I was an early critic of the government's position of outright
hostility toward efficiencies, a position that the government has
abandoned in the last twenty years. I would not allow claims based on
possible efficiencies, but would insist that the merging parties show
that the merger would likely lower costs. If so, then I believe that
the government should show, through a detailed examination of the
specific facts in the industry at issue, that the merger will likely
raise prices. In its internal processes, my experience is that the
government normally follows this standard. In litigation, however, some
of the government's cases still reveal too much hostility toward likely
efficiencies.
Question 1b. Are there any merger review cases that the Commission
has handled within the last few years that you would have handled
differently?
Answer. Merger analysis is fact intensive, and I have personal
knowledge of the relevant facts in only a minority of cases. I have
criticized the government's decision in two cases, and raised
additional questions about a third.
First, I found it surprising that the Antitrust Division did not
challenge Microsoft's $425 million acquisition of WebTV. With the rise
of the Internet, new devices were invented to provide access without
using a personal computer. These devices directly threatened
Microsoft's dominance. Although Microsoft had previously introduced a
product for digital set-up boxes, the government allowed the merger to
proceed.
Second, I believe that the FTC should not have challenged the
recent Heinz/Beech-Nut baby food merger, on which I consulted with
Heinz. Although the parties had an excellent efficiency defense, my
primary disagreement was whether there was substantial competition
between the merging parties in the nationwide market for baby food. The
strongest evidence that there was no such competition was that Gerber,
the dominant firm in the market, feared that the merger would increase
competition, a view that numerous grocery retailers shared. If the
merger was in fact anti-competitive, then the grocery retailers, who
sell the product directly to consumers, would have had no incentive to
support it.
Obviously, people disagreed over this merger, as the FTC staff
recommendation to the Commission was split, the full Commission vote
was 3-2, and the district court disagreed with the FTC.
Finally, I have disagreed with the court's decision in FTC v.
Cardinal Health, Inc., 12 F. Supp. 2d. 34 (D.C. 1998). Although the FTC
may have been correct in challenging the merger, I believe that the
court's opinion provided an inadequate basis to find for the
government.
Question 2. At a time when the price of gasoline is rising, there
are a number of oil company and energy company mergers pending before
the FTC. During a recent subcommittee hearing in the Commerce Committee
on the topic of West Coast gasoline prices, concern was expressed about
the relatively small number of gasoline refiners on the West Coast. How
do you think your review of the pending mergers in the oil industry
will differ from that of your predecessor?
Answer. Merger analysis is fact-intensive, and I do not have
detailed data about the recent oil mergers that the FTC has evaluated.
While Director of the Bureau of Competition in the 1980's, however, we
required substantial divestitures and other relief in two significant
oil industry mergers, Texaco-Getty and Chevron-Gulf. Based on this
experience, I would have supported similar relief in the recent
mergers, assuming that they raised problems like those that we
encountered in the 1980's.
Regarding any mergers that are currently pending, I will evaluate
them carefully under the applicable legal standards, but do not yet
possess specific details regarding such mergers.
Question 3. Do you think that the Intellectual Property guidelines
adopted in 1995 by the Justice Department and the Federal Trade
Commission are consistent with the statement of outgoing Federal Trade
Commission Chair Robert Pitofsky that, ``intellectual property is now a
principal, if not the principal barrier to new entry in high tech
markets?''
Answer. The principles of the Intellectual Property Guidelines are
generally sound. I do agree with Chairman Pitofsky that the
relationship between antitrust and intellectual property is
increasingly important, including in high tech industries. Although the
ownership of valid intellectual property can include exclusive rights
that the antitrust laws must respect, the Intellectual Property
Guidelines address abuses of those rights outside the protection of the
laws of intellectual property. If confirmed, I will make evaluation of
the antitrust-intellectual property relationship a high priority.
Question 4. The Court of Appeals for the Federal Circuit in a
recent case involving Xerox asserted that in essence unless a patent
was fraudulently procured, intellectual property protection trumps
antitrust, and the patent owner is free to impose any license
restrictions whatsoever, regardless of their alleged competitive effect
in the particular case. The Supreme Court declined to hear an appeal
from this decision. The court's view seems to be that, even if refusals
to license intellectual property rights, or restrictions in such
license seem to create some short-term problems for particular
competitors, such policies may be pro-competitive in the long run. What
is your view?
Answer. I have not closely studied the facts of Xerox and thus
cannot comment on the specifics of the decision. In general, as stated
in my answer to the previous question, antitrust law must respect valid
intellectual property rights, but those rights can be abused in
violation of the antitrust laws. The possession of intellectual
property rights does not preclude liability under the antitrust laws.
For example, anti-competitive behavior in excess of the intellectual
property rights could violate the antitrust laws.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe
to Timothy J. Muris
Question 1a. For the past two years, the Senate Committee on Small
Business, of which I am a member, has been investigating the
competitive effects of slotting fees in the grocery industry. In the
two hearings the Committee has held, the Committee heard from numerous
witnesses testifying about the harm that can be inflicted on small
businesses and consumers by the imposition of certain types of slotting
fees. To date, the Federal Trade Commission (FTC) has been responsive
to the information collected by the Committee, including holding a
public workshop on slotting allowances, taking slotting allowances into
consideration in merger reviews of retailers and investigating an
increasing number of complaints by small manufacturers on the anti-
competitive application of such allowances. Nevertheless, Congress' and
the FTC's current understanding of the market practices related to
slotting fees is still limited. Accordingly, in a bi-partisan effort,
Congress requested the FTC to collect comprehensive data on the current
competitive environment related to such practices, assess their impact
and report back to Congress on appropriate policy considerations. That
effort is ongoing. Do you support the continued investigation of
complaints received by the FTC by small manufacturers and consumers of
anti-competitive activity related to the payment of slotting fees?
Answer. Yes.
Question 1b. What assurances can you provide demonstrating that you
support the FTC's ongoing examination of the competitive effects of
slotting fees and, if necessary, will support efforts to ensure that
retailers and manufacturers produce the information that is required to
comply with this Congressional directive?
Answer. I fully support the FTC's ongoing examination of this
issue. I will support any necessary efforts to insure that the FTC
receives the information necessary to comply with the congressional
directive.
Question 1c. If the report to Congress finds that slotting fees are
being applied by manufacturers or retailers in an anti-competitive
manner, in certain circumstances, what action do you believe would be
appropriate for the FTC to take?
Answer. If slotting fees are being used in violation of the
antitrust laws, law enforcement would be appropriate.
______
Response to Written Questions Submitted by Hon. Kay Bailey Hutchison
to Timothy J. Muris
Question 1a. With summer approaching, this country is again faced
with the problem of surging gasoline prices. The Federal Trade
Commission recently issued a report in which it concluded that last
summer's price increases were not the result of collusive activities.
Rather, the price spikes stemmed from a general tightness in supply and
the difficulties that refiners encountered in trying to comply with the
EPA Phase II regulations for summer-blend gasoline. Reformulated
gasoline is subject to a series of patents which have reportedly caused
some refiners and blenders to forego the reformulated gasoline market.
Refiners and blenders are incurring additional costs, which ultimately
are largely absorbed by the consumer. Moreover, refiners have only a
narrow window in they can both avoid the patents and comply with the
regulations. The resulting reduced refining flexibility can magnify the
effects of any supply disruption. Do you agree that the Commission
should look into this matter closely to ensure that consumers are not
needlessly paying higher prices at the gas pumps?
Answer. I am not personally familiar with the intellectual property
issues regarding reformulated gasoline that this question raises. In
general, intellectual property can be abused in ways that violate
antitrust laws. The current Commission has been vigilant in this area,
and, if confirmed, I would seek to continue this vigilance.
Question 1b. What options would the Commission have to address this
situation?
Answer. If there are problems, a variety of solutions exist,
including law enforcement and recommendations to Congress for
appropriate legislation.
______
Response to Written Question Submitted by Hon. Sam Brownback
to Timothy J. Muris
MARKETING VIOLENCE TO CHILDREN
Question. One of the most important achievements of the FTC within
the last year has been the completion and submission of its report on
the marketing of violent, adult-rated entertainment to children. As you
know, an interim report was submitted a few weeks ago, and a more
comprehensive follow-up report is due in September. Can you tell me
what priority the FTC will place on the conduct of this report, and
how, if at all, your lines of inquiry will differ from the report or
last year?
Answer. If confirmed, I will place high priority on this issue. I
have no plans to change the current lines of inquiry, but will be
responsive to market developments, if appropriate.
______
Federal Trade Commission,
Washington, D.C., June 13, 2001.
Hon. Ernest F. Hollings, Chairman,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, D.C.
Dear Mr. Chairman: I am pleased to respond to the follow-up
questions submitted by Senator Wyden in connection with the Committee's
May 16, 2001, hearing on my nomination as Chairman of the Federal Trade
Commission. My responses are enclosed with this letter. Please let me
know if I can be of further assistance.
Sincerely,
Timothy J. Muris,
Chairman.
______
Response to Written Questions Submitted by Hon. Ron Wyden
to Timothy J. Muris
Question 1. Some argue that the high tech sector should not be
subject to the antitrust rule applicable in other sectors--that the
enforcement of the rules should either be suspended or substantially
rewritten for the high tech sector. One of the reasons given is that
New Economy markets that appear monopolistic by Old Economy standards
may be quite competitive. Federal Reserve chair Alan Greenspan has
testified before Congress that many high-growth, high technology
industries are ``extremely competitive.'' Former Treasury Secretary
Summers has noted that ``The only incentive to produce anything (in the
New Economy market) is the possession of temporary monopoly of power .
. . so the constant pursuit of that monopoly power becomes the central
driving thrust of the new economy.[''] Do you believe the ``constant
pursuit'' of monopoly of power as the central imperative of New Economy
business merits revision of antitrust law?
Answer. The proper application of the antitrust laws to dynamic,
high-technology markets is one of the major challenges of antitrust
enforcement today. I believe the current antitrust laws are capable of
such application. One of the chief strengths of the U.S. antitrust
system is the consciously evolutionary scheme established in the
federal antitrust statutes. In designing these laws, Congress
anticipated that the courts would adapt doctrine to account for
``changed circumstances and the lessons of accumulated experience.''
State Oil Co. v. Khan, 522 U.S. 3, 20 (1997). This approach generally
has succeeded in adjusting antitrust legal concepts to meet challenges
posed by new economic phenomena.
Even assuming that the pursuit of monopoly is the central
imperative of New Economy businesses, that assumption does not, in
itself, suggest that the antitrust laws should be revised. I believe
such business strategies can readily be examined under current law. The
law recognizes that monopoly power may be a consequence of ``superior
product, business acumen, or historic accident.'' United States v.
Grinnell Corp., 384 U.S. 563, 570-71 (1966). The acquisition or
maintenance of monopoly power through such means is not unlawful. Thus,
if a firm's pursuit of monopoly power in the new economy simply
involves an attempt to gain a competitive advantage over rivals by
providing superior technologies, products, or services, consumers
likely will benefit from the rivalry and antitrust enforcement would be
uncalled for. On the other hand, as the leading antitrust treatise
states, the law is violated where there is ``conduct other than
competition on the merits, or other than restraints reasonably
`necessary' to competition on the merits, that reasonably appear[s]
capable of making a significant contribution to creating or maintaining
monopoly power.'' 3 Phillip E. Areeda & Herbert Hovenkamp, Antitrust
Law para. 651(c), at 78.
Question 2. If confirmed, would you instruct the FTC's Antitrust
Division to examine the special characteristics of ``sequential'' or
``leapfrog'' monopolies and whether such characteristics pose any
conflict with the FTC's mandate to promote and protect competition
through antitrust enforcement?
Answer. The agency's Bureau of Competition staff would be
instructed to examine closely any business practices that may result in
anticompetitive effects, but it does not appear necessary to single out
sequential or leapfrog monopolies for special examination. We already
know a fair amount about the competitive dynamics that can result in
those kinds of monopoly situations, and not all of them are
anticompetitive. As suggested by my response to the first question, it
is important to consider the nature of the business conduct and market
dynamics that lead to a sequential or leapfrog monopoly.
Conditions of sequential or leapfrog monopoly generally arise when
a new technology essentially overtakes and displaces an older
technology. A variety of factors can contribute to such a change. Most
fundamentally, a new firm (or the incumbent) may simply develop a
break-through technology that renders the old technology obsolete or,
at least, substantially less desirable. Users may be disinclined to
switch away from the product they currently use, unless a new product
offers substantial advantages. Thus, a leapfrog technology may be a new
firm's best hope for breaking into the market. Once users switch to the
new product, it, too, may enjoy temporary market power, but consumers
nonetheless will have benefitted through this process of innovative
competition. The emergence of a break-through monopoly in that manner
would not be of antitrust concern. On the other hand, as I stated in my
answer to the previous question, certain exclusionary conduct can, and
should, violate the law.
______
Response to Written Questions Submitted by Hon. John McCain
to Maria Cino
Question 1a. In your responses to the nomination questionnaire, you
repeatedly stressed the importance of providing small and medium-sized
enterprises with export assistance and customized business solutions to
increase the competition of these enterprises in the global market.
What are the primary challenges faced by U.S. manufacturers to expand
global markets?
Answer. Education.--American companies who are new to export don't
fully understand the exporting process and are not aware of the
resources available to help them.
Export Process.--The paperwork associated with exporting and export
regulations can be complicated. The export process is often a long-term
(rather than short-term) endeavor that requires a commitment outside of
the regular quarterly profit cycle.
Budget.--New-to-export American companies are often concerned that
they will not get paid by their international customers. Many American
companies do not know how to get financing.
Limited personnel/resources to locate partners in markets.--
American companies often do not know how to find overseas partners.
Strong dollar.--Strong value of currency makes U.S. products over-
priced in markets.
Question 1b. What are small and medium-sized businesses currently
doing to meet these challenges?
Answer. More small and medium-sized businesses are reaching out to
U.S. Government agencies, including the Commercial Service, for help
with these issues. At the Commercial Service, each of the 105 domestic
U.S. Export Assistance Centers conducts seminars, which educate
American companies about the exporting process. These seminars also
describe the available federal and state export assistance programs,
including financing programs. Companies can call their closest U.S.
Export Assistance Center for export information and to schedule one-on-
one meetings to discuss export objectives and to formulate an
international marketing strategy. In addition, companies are
participating in trade missions sponsored by federal and state agencies
that bring them access to international markets. American companies are
looking to public and private sources for assistance with international
financing. For example, Department of Commerce Trade Specialists
incorporate export finance information/options when helping American
companies develop their international marketing strategies.
Question 1c. What is the role of e-commerce in this expansion?
Answer. The U.S. & Foreign Commercial Service has effectively
integrated e-commerce into its daily operations. The Internet has
become widely accepted as a powerful vehicle for conducting business
both within the U.S. and worldwide. For domestic business, e-commerce
is part of the business landscape. The Internet is increasingly
perceived as infrastructure--as basic as electricity or the telephone--
and E-Business is an integral part of every corporate strategy. The
products described below were developed by the U.S. & Foreign
Commercial Service to assist American companies export.
Video Products.--Clients and other partners may want to have a
video conference with their overseas distributor, agent or other
parties overseas. (1) The Video Gold Key provides the client with an
opportunity to test the market prior to traveling to the country for
the Gold Key, prescreen foreign buyers, and focus their efforts. (2)
The Video Market Brief is a 30-minute appointment that allows U.S.
companies to connect with post via video to obtain a current view of
the overseas market. After a 15-minute presentation by overseas staff
the videoconference is open for questions.
Webcast Library.--An online series of video streamed seminars and
briefings on current international business. Over 60,000 unique
visitors viewed our webcast series on the Internet last fiscal year,
with an average viewing session lasting 21 minutes.
www.USATrade.gov.--The U.S. Commercial Service's website that
provides an overview of available export assistance services through
the worldwide network of 105 Export Assistance Centers nationwide and
160 overseas posts. International market research, country-specific
Commercial Guides, information on U.S. & Foreign Commercial Service
matching services, promotional events and opportunities are found on
this site.
BuyUSA.com (summer 2001 launch).--The Commercial Service e-
marketplace, is envisioned to be a ``one-stop,'' export transaction
focused website. BuyUSA will integrate technology with the Commercial
Service's worldwide physical network, to offer unequalled export
assistance to U.S. firms operating in the global e-economy. BuyUSA will
ease the exporting process for U.S. SMEs, to help more export-capable
U.S. firms begin to export, expand their international sales to new
countries, or within existing markets overseas.
Question 2. In your responses to the nomination questionnaire, you
highlight the importance of increasing ``the number of new exporters
from traditionally under-served communities,'' such as minority, rural,
and women-owned businesses. What can be done within the law regarding
preferences to promote exports by these enterprises?
Answer. U.S. & Foreign Commercial Service programs do not give
preference to minority, rural and women-owned businesses. Rather,
US&FCS has identified these groups as being under-served by export
promotion programs but having a high export potential. While small
women, minority, and rural businesses are the fastest growing segment
of the economy, these firms export at half the rate of other firms.
US&FCS programs identify and recruit these under-served U.S. export
groups and expose them to the same export promotion services that are
used by more traditional U.S. exporters. Although some US&FCS programs
are tailored to different subgroups of the US&FCS clientbase, all
US&FCS programs are available for all U.S. companies that are eligible
in terms of U.S. export potential.
US&FCS programs targeted at under-served businesses: Introduce
under-served U.S. firms to U.S. & Foreign Commercial Service programs;
Train new-to-export firms, improving their ability to successfully sell
their products in the international market; Promote new, technology-
based services and programs aimed at providing information and access
to international markets; Organize trade missions and other export
assistance programs and services; Offer logistical support and
encourage participation in global trade events; Help create partner
networks.
______
Response to Written Question Submitted by Hon. John McCain
to Kathleen B. Cooper
Question. How does the Department plan to ensure an accurate census
count, especially in those locations where there have been documented
undercounts in the past?
Answer. Census 2000 was the most successful decennial census ever
along a number of important dimensions. Most critically, the current
measures of accuracy for Census 2000 indicate that the net national
undercount was reduced from the 1990 rate of 1.61 to 1.18 percent in
2000. This reduction is substantial and reflects high census quality.
More important than the overall totals, the reduction in the
undercount for various population groups showed great progress. The
estimated undercount rate for non-Hispanic blacks was cut to less than
half of its 1990 level--from 4.57 percent in 1990 to 2.17 percent in
2000; the estimated undercount rate for Hispanics fell from 4.99
percent to 2.85 percent. The undercount rate for American Indians and
Alaska Natives on Reservations in Census 2000 was 4.74 percent, a
reduction from 12.22 percent in 1990. For American Indians and Alaska
Natives off Reservations, Native Hawaiians and Other Pacific Islanders,
and non-Hispanic Asians, Census 2000 showed undercount rates of 3.28
percent, 4.60 percent, and 0.96 percent, respectively. The undercount
rate for renters dropped from 4.51 percent to 2.75 percent and for
children from 3.18 percent to 1.54 percent.
While Census 2000 showed enormous improvement from the 1990 level,
the Census Bureau is taking additional steps that may improve the
accuracy of census data for future uses. Municipalities will have the
opportunity to question the Census 2000 housing unit counts and their
group quarters population counts. The U.S. Census Bureau is currently
developing the Count Question Resolution (CQR) program, which includes
the procedures and guidelines for receiving, processing, and responding
to questions regarding officially released counts. The Census Bureau
will review challenges filed according to the procedures defined for
the CQR program. Action will be taken to correct detected geographic
errors regarding boundaries and geocoding. Action will also be taken in
cases where processing errors were made by the Census Bureau that may
have resulted in either the incorrect inclusion or exclusion of housing
units or group quarters population data that were identified and
collected during Census 2000 operations.
The Census Bureau also conducted an Accuracy and Coverage
Evaluation (ACE) to determine whether a statistical adjustment would
improve the accuracy of the data required for redistricting. After
carefully examining data from the ACE, the Census Bureau recommended
that the unadjusted data were the best available data for this purpose,
because this examination produced serious reservations regarding the
quality and accuracy of the adjusted data. Nonetheless, the Census
Bureau is conducting even further analysis of the ACE over the summer
and will be releasing a recommendation in the fall regarding whether or
not the ACE can improve the accuracy of Census 2000 data for future
uses.
The Department of Commerce awaits the Census Bureau's report, and I
can assure you that we will give all due consideration to their
conclusions when they are presented to us. In the meantime, we are
deeply encouraged by the results achieved by the dedicated
professionals at the Census Bureau, whose goal was achieved--to conduct
the most successful and accurate census in our nation's history.
______
Response to Written Questions Submitted by Hon. John McCain
to Bruce P. Mehlman
Question 1. The Office of Technology Policy works with industry to
identify, assess and recommend policies to promote global
competitiveness. Given your experience in the technology industry, what
would you say are the greatest challenges for the American technology
industry over the next few years in terms of global competitiveness?
Answer. The American technology industry faces several challenges
over the next years in its quest to maintain its global leadership. In
my opinion, the greatest challenges in terms of global competitiveness
include:
Opening foreign markets to U.S. high tech products and
reducing barriers to trade;
Protecting U.S. intellectual property rights overseas;
Ensuring American workers and students have the
information and quantitative skills needed in a knowledge-based
economy;
Competing with foreign companies that are increasingly
spending more on R&D, improving their technological capabilities, and
enjoying growing support from foreign governments (through research and
technical assistance);
Ensuring adequate domestic infrastructures, both physical
(e.g. energy and broadband) and policy (e.g. regulatory and legal
systems that keep pace with technological change).
Question 2. What are the major barriers to the commercialization of
federal technologies by private industry?
Answer. There are several barriers to commercialization of federal
technologies by private industry. The Office of Technology Policy
recently released a report to Congress detailing many of these
barriers, and I look forward to learning more about this important
subject and how policy makers might address it. Some of the barriers to
the commercialization of federal technologies include:
Matching companies seeking assistance with the right
federal labs. Companies still have difficulties finding the right
federal laboratory. While individual agencies and the Federal
Laboratory Consortium have put considerable effort into creating web
sites and printed information and conducting outreach to make their
capabilities better-known to industry, it remains difficult for
businesses unfamiliar with the federal laboratory system to find the
labs with the expertise or technologies available to address a specific
problem.
Handling intellectual property issues generated by or used
in cooperative research. Several areas of intellectual property
management present a continuing challenge, including procedures related
to exclusive licensing, treatment of pre-existing inventions brought
into Cooperative Research and Development Agreements (CRADAs),
confidential treatment of data within a CRADA, and government receipt
of licenses to their partners' CRADA inventions.
Financing further development of federal technologies.
Many federal technologies require substantial investments to make them
commercially viable, either because they have not yet been developed
beyond early-stage basic research or because they were developed for
specific federal missions.
Negotiating CRADAs. Some companies have difficulty in
negotiating CRADAs and patent license agreements with federal agencies
due to concerns over exclusive licensing arrangements, treatment of
pre-existing inventions, data confidentiality, and liability and
indemnification terms.
Question 3. Over the past few years, there has been a lot of
discussion and attention given to Information Technologies. Given the
government investments in large science and technology projects such as
the International Space Station, we continue to be troubled by
challenges in other technology areas such as aerospace, energy and
health. How will you work to ensure a balanced approach is used in
technology policy decisions?
Answer. The Office of Technology Policy attempts to reach out to
all industries to identify emerging policy issues and contribute to
their resolution, not just information technology companies. If
confirmed, I would hope to address the important technology policy
issues that face both providers of new technologies and users of
technology in established industries. Likewise, I would hope to work
with a wide array of business sectors, to meet a representative cross-
section of technology users and producers, and to ensure a balanced
approach is used in policy analyses and recommendations.
Question 4. There has been a lot of discussion about doubling the
U.S. investment in Research & Development over the next few years. Do
you believe that the United States is in need of an overall Research &
Development strategic plan to ensure that we are prepared to make these
future investments?
Answer. Certainly the Federal Government needs to approach its
investments in R&D strategically. federal dollars should be focused on
specific federal missions (such as defending the nation or curing
infectious diseases) and higher-risk, longer-term research (as opposed
to commercial applications) that industry has less incentive to
undertake.
At the same time the Federal Government must be careful not to
presume to know better than the markets where private investment
dollars should flow. Policy makers may find it more valuable to use
strategic principles to guide investments of federal dollars, rather
than a comprehensive plan, to ensure the maximum flexibility and
responsiveness to changes in technology, markets and federal needs.
Question 5. The current uncertainty in our economic situation has
led to reduced corporate investment in Research & Development. What
will the Administration do to maintain an adequate amount of Research &
Development to ensure America's continued competitive edge?
Answer. Having not been confirmed or appointed, I cannot speak for
the Administration and what steps it will take to ensure adequate R&D.
In addition, it is not clear that corporations have reduced their
investments in research & development. For the year 2000, the NSF
estimates that industry invested $181 billion in R&D. That is an
increase of almost 11% and puts the total U.S. R&D portfolio at an
estimated $265 billion, $21 billion above 1999. Further, R&D as a
percentage of U.S. GDP has grown from 2.58% (in 1999) to 2.66% (in
2000) despite more than a trillion dollar increase in the size the U.S.
GDP.
In my personal opinion, the Administration has already proposed
several appropriate steps to ensure America's continued competitive R&D
edge. First, the tax plan submitted by the President recommends
permanent extension of the research and experimentation tax credit.
Permanent extension will provide corporate planners the certainty
needed to encourage maximum private investment. In addition, the
Administration has proposed an R&D program that will increase federal
commitment to R&D to a record high of $95 billion, including a doubled
commitment to medical research. And the Administration has indicated
its intention to facilitate a business environment that supports and
encourages innovation.
As for determining the adequacy of U.S. R&D, there is a real need
for better understanding of the quantity and quality of R&D investment
in the U.S. Congress and the Administration will need to better measure
and understand the nature of research being performed by the private
and public sectors, to ensure federal dollars are most wisely invested.
Question 6. One of the major complaints of U.S. industry is the
shortage of American students graduating with science, math and
engineering degrees. In addition, there have been complaints that
American students who graduate with these degrees still lack basic
skills in these fields. What role can the Office of Technology Policy
play in working with industry to resolve this problem?
Answer. The Office of Technology Policy has been working with
industry to analyze the question of technical workforce development and
help promote math and science education. And OTP has a constructive
role to play going forward. If confirmed, I look forward to leading
dedicated career professionals on new and ongoing initiatives
including:
Preparing IT Workforce Analyses: OTP published a study of
IT workforce trends (``Digital Work Force: Building Infotech Skills at
the Speed of Innovation'') in 1999 and will conduct a new analysis of
IT worker training over the next year;
Listening to Industry: OTP can reach out to industry on
workforce issues and other policy matters to better understand their
needs and ensure their voice is heard and appreciated by policy makers;
Leading the GetTech program: GetTech is a public-private
partnership working to inspire teens to choose and prepare for
technical careers. The partnership has developed a public service
campaign and website to provide information on technology careers. OTP
is the government lead in this effort.
Question 7. According to numbers released last month, 163 million
Americans (58 percent of the U.S. population) have Internet access at
home, up 33 percent from 123 million Americans a year earlier. High
speed Internet access nearly doubled in one year from 7 percent to 13
percent. While these numbers show tremendous growth in just one year,
it is important to ensure that the enormous benefits of advanced
telecommunications services are accessible to all people, regardless of
where they live, what they do, or how much they earn. What can we do to
ensure continued growth of Internet access and the deployment of high
speed Internet access to rural America?
Answer. The Internet is changing the way we work, live, play and
learn. The numbers of Americans going online has exploded over 300% in
4 years, from an estimated 51 million in June 1997 to roughly 163
million today. Our online population will continue to expand as more
services and applications become available.
The continued growth of Internet access, and the deployment of
broadband services in rural America, is important to all of our
citizens and to the health of our economy.
To ensure continued growth of Internet access, policy makers should
first do no harm. The growth of the Internet has occurred in a largely
deregulated competitive environment. Any new proposed regulation or
taxation should be scrutinized carefully, and with a skeptical eye. In
many ways, Internet growth would be best served by doing more of what
we are doing now--imposing a minimal regulatory burden, extending the
moratorium on Internet taxation and banning taxes on Internet access.
With regard to broadband access in rural America, I know from
personal experience that the private sector wants to bring broadband to
rural markets. And I believe that there is a strong rural market for
those services.
New wireless and satellite technologies are lowering the costs of
bringing broadband to rural areas, and thereby will make it ever easier
to provide broadband service to rural markets. Policymakers must make
sure that spectrum is available for those services, and that undue
regulation does not impede their rollout. To the extent policymakers
determine that rural broadband deployment should be further
accelerated, they may consider other options as well.
Question 8. Your written statement states that the private sector
plays the dominant role in the process of developing new technology and
bringing it to market. Can you elaborate on this point given the number
of technologies, including the Internet, that are the result of
federally-funded research?
Answer. While the Federal Government's research investments have
clearly played a critical role in promoting America's leadership in
high-technology (and other industries), the private sector plays the
dominant role in turning new technologies into products and services
and bringing them to market.
The U.S. private sector has increasingly dominated U.S. R&D, its
R&D investments surpassing the Federal Government's in 1980 and now
accounting for more than two-thirds of the total U.S. R&D investment.
While Federal Government investments in R&D remain critical for future
innovation, federal dollars are generally targeted at specific federal
missions (such as defense needs) and higher-risk, longer-term basic
research (as opposed to commercial applications) that industry has
little incentive to undertake. The federal research establishment is
not as focused on commercial markets nor should it be. And only the
private sector has the wherewithal to make the necessary investments in
labor, manufacturing and product development to successfully translate
innovations into viable commercial products.
______
Response to Written Questions Submitted by Hon. John McCain
to Donna R. McLean
Question 1. As you may be aware, I prefer to eliminate restraints
on U.S. businesses' competitiveness rather than provide subsidies that
remove incentives for businesses to find new ways to operate and
compete in the world market. I continue to believe that U.S. companies
are struggling to compete in the international maritime industry in
part because of the prevalence of subsidies by other flag-states. What
are your views on maritime subsidies?
Answer. While I am new to the maritime area, the evidence indicates
that foreign government subsidies to national industries and
restrictions and barriers to free trade have hurt U.S. companies in
global markets. It appears that U.S. maritime companies encounter a
variety of such foreign measures that affect their operations,
including, for example, subsidies that are particularly prevalent in
the shipbuilding sector and restrictions that foreign governments
impose on intermodal operations of foreign carriers. I know that the
Department of Transportation's leadership is opposed to such measures,
which distort or interfere with the free market, and it seeks to
eliminate them wherever possible.
Question 2. Please explain the rationale behind the President's
proposal to zero out funding for the Title XI maritime loan guarantee
program?
Answer. My understanding is that the President's Budget Request
seeks no new funding for Maritime Guaranteed Loan Subsidy Program as a
step, not only in this area but in others as well, to trim corporate
subsidies in the federal budget in favor of more compelling needs.
Question 3. Are you aware of the recent report published by private
maritime interests, which argues that the federal Title XI maritime
loan guarantee 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, will you
commit to providing the Committee with a full accounting of the total
cost and revenues associated with this program?
Answer. Yes, I am aware of the report. If confirmed, I will be
pleased to provide the Committee with a full accounting of the total
costs and revenues associated with the Title XI program.
Question 4. While AIR-21 significantly increased funding for the
Federal Aviation Administration, much of the Operations' budget seems
to have been consumed by pay raises for air traffic controllers. I have
been contacted by several FAA safety inspectors who say their ability
to do their jobs has been seriously affected by budget cuts in areas
such as training and travel. What is being done to ensure that safety
inspectors are receiving adequate resources?
Answer. In fiscal year (FY) 2000, the FAA had a budgetary shortfall
in the Operations account of $184 million. This necessitated reductions
in all areas, including funds for both travel and training for Flight
Standards inspectors.
With increased funding in FY 2001, the agency was able to increase
the levels for travel and training and restore these reductions. When
measured from FY 2000 to 2001, the FAA will increase Flight Standards
inspector training by 15.5 million (65 percent). For travel, this
increse is $8.2 million (46 percent).
These higher levels are maintained in the President's FY 2002
budget request.
______
Response to Written Questions Submitted by Hon. John McCain
to Sean B. O'Hollaren
Question 1. What is your view regarding the Administrations
preparedness to fulfill the cross-border traffic requirements of NAFTA
and, more important, what is the Department doing to prepare for the
anticipated opening of the border by the end of this year? Will the
Administration submit a proposal to Congress to authorize additional
funding for border-related activities or seek other related authority?
Answer. In my View, DOT will be prepared to comply with our NAFTA
agreement while maintaining the highest possible levels of transport
safety at our borders and across the nation. DOT has focused on the
cross-border provisions at the southern border, fully consistent with
the recent final decision by a NAFTA arbitration panel. DOT will work
to ensure that all truck and bus drivers along with their vehicles,
regardless of country of origin, comply with the federal Motor Carrier
Safety Regulations.
President Bush has indicated his commitment to fulfilling the terms
of the NAFTA Agreement on access of commercial vehicles from Mexico to
the full U.S. market and on Mexican investment in U.S. trucking
companies. On March 22, DOT had discussions with Mexican transportation
and trade officials on implementation of these provisions. The meeting
went well, and it is my understanding that the Department intends to
fulfill the NAFTA access provisions by the end of the year.
At the beginning of the month, DOT published three proposed
regulations, two of which govern the application process for Mexican
motor carriers that wish to operate in the U.S. These proposed rules
identify information requirements that will address specific elements
of a carrier's safety management system. Additionally, the rules intend
to provide a basis for our federal Motor Carrier Safety Administration
to determine the ability of an applicant to be in compliance with our
safety standards prior to receiving operating authority. The third
proposal addresses the process by which DOT will review the safety
records of these carriers during the first 18 months of their U.S.
operations.
The fiscal year 2002 Budget Request recently submitted to Congress
by President Bush contained a proposal to authorize additional funding
for border-related activities and other related authority. To ensure
that opening the U.S./Mexico border is carried out with the utmost
attention paid to motor carrier safety, close to $100 million ($88
million over fiscal year 2001) is requested in fiscal year 2002 to
support motor carrier safety at the southern border. This has three
components:
$17.5 million ($13.9 million above fiscal year 2001) for
federal enforcement operations and safety audits of Mexican Carriers at
the southern border. This funding will place 80 additional federal
commercial motor vehicle enforcement personnel at the border, for a
total federal presence of 140 enforcement staff.
$26 million ($18 million above fiscal year 2001) for
grants to states for motor carrier inspection and enforcement programs
at the border. (This includes $18 million from FMCSA Revenue Aligned
Budget Authority (RABA) and $8 million in Motor Carrier Safety
Assistance Program (MCSAP) grants.)
$56.3 million in new funding (from federal-Aid Highways
RABA) for southern border safety inspection facilities construction.
Funding will be based on need, with states submitting proposals to
qualify for federal funding. $2.3 million of this is for federal
construction of areas to park unsafe vehicles placed out-of-service at
the border.
With the augmented safety information and monitoring that would be
available under the proposed rules, the added funds for both staffing
and infrastructure at the border in addition to the continuing efforts
to engage with the Department's Mexican counterparts, we should be able
to implement NAFTA's provisions with full confidence by year's end that
cross-border operations meet our highest safety expectations.
Question 2. 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 their 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. For example, this Committee is currently awaiting a report
on the Department's plan for disposal of obsolete vessels that was due
on April 30th. While no time estimate has been given as to when the
report may actually be released, the Committee has been made aware that
it is being held up in ``clearance.'' What action would you take to
improve interagency communication and cooperation within DOT and to
streamline the review process for regulations and reports? What will
you do to help ensure that reports to Congress are completed and
submitted in a timely manner?
Answer. The timeliness of congressionally mandated reports from the
Department is a key area of focus by Secretary Mineta. While the
Secretary shares your frustration in the tardiness of some reports,
efforts are under way to improve DOT's record in this area. Much of
what the Department is working on now is carry over from the previous
administration. While we are currently assessing the status of all
reports due to Congress from the Department, it can be expected that
some nearly completed reports may be delayed in order to accurately
reflect the views of Secretary Mineta. If confirmed, I will make every
effort to ensure that reports to Congress are completed and submitted
in a timely manner by regularly requesting a progress report from the
mode tasked with the report. If this is done well in advance of the due
date of a mandated report, adequate time will exist for the Secretary
to intervene with whatever action is needed to ensure that the report
is submitted to Congress on or before the date it is due.
Secretary Mineta's frustration with delinquent reports from the
Department while serving as a Member of Congress and my own experience
as a committee staff member have demonstrated the need for accurate,
timely information as a key component for decisionmaking 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. My understanding is that DOT
is constantly trying to improve its rulemaking process, and the current
Administration will reemphasize the need for meaningful change. 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. Interestingly, the report
did not find the OST-managed review process to be a problem. The IG did
find areas where there were opportunities for improving efficiency and
effectiveness and made several recommendations, all of which the
Department has implemented or is implementing. It is my understanding
that other DOT agencies are not necessarily asked to routinely review
the rulemaking actions of others modes within DOT unless the rulemaking
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 a FAA rulemaking on child seats.
With respect to the Department's report on the plan for disposal of
obsolete vessels, I have been informed that it will be submitted to the
Committee the week of May 21, 2002.
Question 3. Two years ago, federal Aviation Administrator Garvey
established a committee to provide input to the FAA on how fractional
ownership programs for general aviation aircraft should be regulated.
Last year, that committee submitted a draft rulemaking to the FAA. It
is my understanding that in February of this year, the FAA completed
its internal review and forwarded the draft rulemaking to the
Department of Transportation for review. What is the status of the
Department of Transportation's review of the proposed rulemaking on
fractional ownership of aircraft?
Answer. It is my understanding that the review by the Office of the
Secretary should be completed shortly. With the incredible growth of
fractional aircraft ownership programs, there has been a growing
concern over accountability and responsibility and the appropriate
regulatory structure. It is also my understanding that the FAA has
focused on: defining fractional ownership and their various
participants; clearly allocating responsibility and authority for
safety of flight operations; and, ensuring that fractional ownership
operations maintain a high level of safety equivalent to that of Part
135 air carrier operators. In this area as in others, I believe the
Bush Administration can and will bring new focus on processing its
rulemakings and it's reporting to Congress on schedule. If confirmed, I
commit to do my part.