[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.
  

                                  
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