[Senate Hearing 107-976]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-976

                  NOMINATION OF MR. EMIL FRANKEL TO BE
                 ASSISTANT SECRETARY FOR TRANSPORTATION
                   POLICY AND MR. JEFFREY SHANE TO BE
                     ASSOCIATE DEPUTY SECRETARY OF
                         TRANSPORTATION AT THE
                      DEPARTMENT OF TRANSPORTATION

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 6, 2001

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation


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                            WASHINGTON : 2003
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida

               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                  Mark Buse, Republican Staff Director
               Jeanne Bumpus, Republican General Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 6, 2001.................................     1
Statement of Senator Breaux......................................     1

                               Witnesses

Dodd, Hon. Christopher, U.S. Senator from Connecticut............     3
    Prepared statement...........................................     3
Frankel, Emil, Nominee to be Assistant Secretary for 
  Transportation Policy at the Department of Transportation......    18
    Prepared statement...........................................    19
    Biographical information.....................................    20
Lieberman, Hon. Joseph, U.S. Senator from Connecticut............     4
    Prepared statement...........................................     4
Oberstar, Hon. James, a Representative in Congress from Minnesota     6
Petri, Hon. Thomas, a Representative in Congress from Wisconsin..     5
Shane, Jeffrey, Nominee to be Associate Deputy Secretary of 
  Transportation at the Department of Transportation.............     8
    Prepared statement...........................................    10
    Biographical information.....................................    11
Shays, Hon. Christopher, a Representative in Congress from 
  Connecticut....................................................     6

                                Appendix

Response by Emil Frankel to written questions submitted by:
    Hon. Ernest F. Hollings......................................    40
    Hon. John McCain.............................................    42
Response by Jeffrey Shane to written questions submitted by:
    Hon. Ernest F. Hollings......................................    37
    Hon. John McCain.............................................    43
    Hon. Ted Stevens.............................................    47

 
                     NOMINATION OF MR. EMIL FRANKEL
                     TO BE ASSISTANT SECRETARY FOR
                       TRANSPORTATION POLICY AND
                   MR. JEFFREY SHANE TO BE ASSOCIATE
                   DEPUTY SECRETARY OF TRANSPORTATION
                  AT THE DEPARTMENT OF TRANSPORTATION

                              ----------                              


                       THURSDAY, DECEMBER 6, 2001

                               U.S. Senate,
         Committee on Commerce, Science, and Transportation
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John B. Breaux 
presiding.

           OPENING STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. The Committee will please come to order. 
Good afternoon. We are in the Full Committee, this afternoon on 
the confirmation of two nominees submitted by the 
administration, Mr. Jeffrey Shane to be Associate Deputy 
Secretary, Mr. Emil Frankel to be Assistant Secretary of 
Transportation Policy at the Department of Transportation.
    We are delighted to have some of our colleagues here to 
introduce our nominees and we will get right to their remarks 
and let them be excused after they make their comments. Of 
course, our good friend Senator Dodd is here, and Chris, we 
welcome your introductory comments.
    [The prepared statement of Senator Breaux Follows:]

  Prepared Statement of Hon. John Breaux, U.S. Senator from Louisiana

    I am pleased to welcome Mr. Jeffrey Shane and Mr. Emil Frankel to 
the Committee today.
    The two candidates before us present good credentials in 
transportation, law, education and politics. As veteran of the 
Department of Transportation, Mr. Shane's knowledge and background will 
serve him well as he moves through the confirmation process and into 
his new role as Associate Deputy Secretary. As a former Commissioner at 
the Connecticut Department of Transportation, Mr. Frankel is up to the 
task of Assistant Secretary for Transportation Policy, but we don't 
want to downplay the host of challenges awaiting both nominees at the 
Department of Transportation. I would like to highlight a few of my 
concerns.

                                SECURITY

    After the passage of the Aviation Security Act, there is a lot of 
work ahead for the FAA and the Department of Transportation to 
establish improved federal security systems at airports, oversee 
airplane retrofits, and coordinate relevant criminal data bases. While 
much attention has been correctly focused on aviation, I would like to 
make sure that security efforts are addressed in a comprehensive 
fashion. My subcommittee has held hearings on maritime, rail, and 
hazardous materials security concerns. All of these modes face serious 
security challenges and they have not received adequate attention and 
support from the federal government. We should not wait until a 
catastrophe happens to provide the necessary focus to our nation's 
transportation systems--there is a clear need to do so now.

                              COMPETITION

    We have watched for many years as the airline, railroad and 
virtually every other industry has continued to consolidate--the 
transportation sector is not unique in this respect. However, while I 
am a true supporter of competition, we will not have a competitive 
environment if we are left with only one or two carriers and the 
government regulates every movement or transaction.

                                MARITIME

    There are few organizations in the federal bureaucracy that are 
more liked and better respected than the Coast Guard. Each year we add 
to the Coast Guard's diverse missions in law enforcement, search and 
rescue, drug interdiction, port security, and marine environmental 
protection. Each year the men and women of the Coast Guard rise to the 
new challenges we offer them--and this year is no exception with the 
increased demands placed on the Coast Guard after September 11th. But 
there is a limit to what we can ask without compromising their safety 
and security of the nation. We have made strides this past Congress to 
ensure appropriations can support the Agency's mission, but even after 
securing substantial additional funding, budget shortfalls remain. 
These shortfalls, made chronic by ever-tightening budget caps, will 
continue to undermine the agency's operational readiness and the safety 
of its service members until we come up with a solution.

                                TRUCKING

    The safety of truck and bus operations in the U.S. is of particular 
concern to me. Following a horrible bus crash on Mother's Day in 1998, 
I worked with the Chairman to create the Motor Carrier Safety 
Administration, and I continue to have concerns about truck and motor 
coach safety and security.
    The issue of Mexican trucks and buses has been highlighted this 
Congress and while I am glad that a resolution was reached in the 
Transportation Appropriations bill that was recently approved, this is 
an area which requires continued oversight. In 2000, 35 percent of 
inspected Mexican vehicles were placed out of service for significant 
safety violations, compared with 25 percent of U.S. trucks. In 
addition, the DOT IG found that there were hundreds of Mexican carriers 
operating improperly outside of the commercial zones. If we do not have 
the ability to properly oversee the safety and movements of Mexican 
trucks when they are only permitted to operate in the U.S. on a limited 
basis, how can we have any confidence in their adherence to U.S. safety 
and cabotage requirements if the borders are opened.

                            PIPELINE SAFETY

    The Senate has approved bipartisan Pipeline Safety legislation in 
each of the last 2 years. It is my hope that we can work with the 
Administration and encourage the House to achieve a strong safety 
regime for interstate pipeline operators.

                                 AMTRAK

    Finally, the national passenger railroad system will continue to be 
a top priority for the members of this Committee. My state is highly 
supportive of Amtrak and participates directly with Amtrak in the 
development and implementation of existing and new service throughout 
Louisiana. The recent finding of the Amtrak Reform Council and the 
subsequent requirement that Amtrak prepare and submit a plan for its 
own liquidation has created serious questions within the financial 
markets about Amtrak's viability. I hope that we can work together to 
address the short-term and long-term issues facing Amtrak.
    Although you will certainly face many challenges, I look forward to 
seeing both of you confirmed and working with you in the future. Please 
introduce your families to the Committee and make a brief statement, 
the text of your written statement with be included in its entirety in 
the record.

              STATEMENT OF HON. CHRISTOPHER DODD, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Dodd. Thank you, Mr. Chairman, and I suspect you 
will be seeing shortly come through the door my colleague as 
well, Senator Lieberman, who wants to be here as well on behalf 
of Emil, to express our support for this nominee.
    You will see, Mr. Chairman, as you go and take a look at 
the background qualifications of Emil Frankel, that this is 
just a first-class nomination, and I want to commend the 
administration for reaching out to Emil to fill this position. 
He has had a distinguished career and knows the areas of 
transportation very, very well. He served as our Commissioner 
of Transportation in Connecticut for about 4 or 5 years, back 
in the early 1990s, I might point out during those immediately 
after the passage of ISTEA, which, as we all know, around the 
country a transition period and very, very difficult, the first 
major federal legislation designed to encourage intermodal 
planning and multimodal operations, and he just did a fabulous 
job in our state as the Commissioner of Connecticut's 
Department of Transportation.
    Since then, he has been an adjunct professor at the 
University of Connecticut, a fellow at Harvard and Yale, a 
graduate of Wesleyan University, Harvard law degree, knows 
these issues, knows economic development issues. Part of his 
earlier incarnation was at HUD. You tie these together, you 
have really got in the person of this nominee a remarkable 
individual who will bring, I think, some wonderful 
observations, analysis to the office of Transportation Policy.
    So I am just pleased to be--I am glad he asked me to stand 
and present him to you. I think Joe will echo these comments 
when you hear from him. He served, as I said, as a very 
successful Commissioner in our state, and I think across the 
board in our delegation in Connecticut you will hear nothing 
but kudos about Emil Frankel.
    Senator Breaux. Well, it is good to have you here, Senator 
Dodd, and it is good to have Mr. Frankel and your delegation 
supporting you. It is a Republican nomination. You have two 
Democratic Senators who are strongly in support of you, and 
that is a good sign. Chris, thank you for being with us.
    Senator Dodd. Thank you, Mr. Chairman.
    [The prepared statement of Senator Dodd follows:]

            Prepared Statement of Hon. Christopher J. Dodd, 
                     U.S. Senator from Connecticut

    Thank you for scheduling this important hearing. It is a distinct 
pleasure to be here in support of the nomination of Emil Frankel to be 
the Assistant Secretary for Transportation Policy at the United States 
Department of Transportation.
    The American people expect thoughtful analysis of the federal 
government's transportation choices. The Transportation Policy Office 
can play an invaluable role in helping DOT decisionmakers understand 
how new technologies and new approaches to design and community 
involvement can improve not only transportation, but people's lives. I 
hope that under Emil Frankel's leadership, the office will remain at 
the forefront of the federal government's efforts to develop a 
comprehensive approach to managing our transportation resources.
    I have every confidence that Emil will not only succeed, but will 
excel in his new role. His background and interests betray a remarkable 
understanding of the infrastructure, business, environmental, and 
quality of life aspects of transportation policy.
    Emil served as the Commissioner of the Connecticut Department of 
Transportation from 1991 to 1995, during the critical years immediately 
after passage of ISTEA--the first major federal legislation designed to 
encourage intermodal planning and multimodal operations. Since leaving 
ConnDOT, Emil has be an Adjunct Professor at the University of 
Connecticut and a Fellow at both Harvard and Yale where he has 
conducted research, written, and taught on issues of transportation 
policy, transportation and the environment, and public management.
    Emil started his academic career in good standing when he graduated 
from Wesleyan University in Middletown, Connecticut. After graduating 
from Harvard Law School, he has enjoyed a distinguished career in 
business, academia and public service. I am delighted that the federal 
Department of Transportation will now have the advantage of his many 
talents.

    Senator Breaux. Next, if it is OK, because I think Joe had 
another engagement--Joe, do you want to go ahead and make 
comments now? We will love to have Senator Lieberman's 
comments.

              STATEMENT OF HON. JOSEPH LIEBERMAN, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Lieberman. Junior colleagues always find a word, 
but we always start with an expression of respect for our 
senior colleague.
    Very briefly, I am delighted to come before you today, Mr. 
Chairman, on behalf of Emil Frankel. He has served as a very 
able and highly respected Commissioner of Transportation for 
Connecticut for 4 years. He has extensive knowledge of 
transportation programs and planning. During those 4 years in 
Connecticut he oversaw 4,000 employees and a $1 billion annual 
budget, was responsible for construction, rehabilitation and 
management of a genuinely multimodal transportation system, and 
at the same time he was chairman of the Standing Committee on 
the Environment of the American Association of State Highway 
and Transportation Officials.
    Since he has left the state, he has been involved as an 
advisor to the Massachusetts Transportation Authority. I have 
searched his record, and wanting to create credibility before 
you, Mr. Chairman, having two Democrat Senators support him, I 
have looked for some Republican contact, because he served 
under a truly independent governor of the State of Connecticut 
but served as legislative assistant to Senator Javits. Did you 
remember that?
    Senator Dodd. I did not remember that.
    Senator Lieberman. I thought you were here then.
    [Laughter.]
    Senator Lieberman. Anyway, this is a very good and able 
person, and I am really thrilled that the President has put him 
before you for this Assistant Secretary of Transportation.
    [The prepared statement of Senator Lieberman follows:]

             Prepared Statement of Hon. Joseph Lieberman, 
                     U.S. Senator from Connecticut

    Mr. Chairman and members of the Committee, I am pleased to come 
before you to introduce Emil H. Frankel. Mr. Frankel served as a very 
able and highly respected Commissioner of the Department of 
Transportation in my state for 4 years and has extensive knowledge of 
transportation programs and planning. It is with great pleasure that I 
come before you to strongly support his nomination to the position of 
Assistant Secretary of Transportation Policy for the U.S. Department of 
Transportation.
    From 1991 to 1995 Mr. Frankel served as Commissioner of the 
Connecticut Department of Transportation where he oversaw over 4,000 
employees and a $1 billion annual budget. He was responsible for the 
construction, rehabilitation, maintenance, and management of a truly 
multi-modal transportation system. This included Connecticut's highways 
and bridges, bus and commuter rail services, and airports. 
Additionally, he was Chairman of the Standing Committee on the 
Environment of the American Association of State Highway and 
Transportation Officials and Vice Chairman of the I-95 Corridor 
Coalition. He has brought to these positions his in-depth understanding 
of Intelligent Transportation Systems technologies, inter-city rail 
services, transportation planning and managing, and transportation and 
air quality.
    Since Mr. Frankel left the Connecticut Department of 
Transportation, he has acted as advisor to the Massachusetts Port 
Authority on proposals to reorganize state government and worked on a 
major transportation Joint Feasibility Study for the Massachusetts 
Turnpike Authority and Massachusetts Highway Department. Furthermore, 
he served as counsel to the New York City Partnership and Chamber of 
Commerce regarding federal surface transportation legislation and he 
advised the Delaware Department of Transportation. He has continued to 
work with the Connecticut Department of Transportation on management 
and governance reforms for bus and commuter rail. In other words, he 
has a strong grasp of transportation, including some exciting areas for 
transportation innovations. He also truly understands state and local 
transportation needs.
    Mr. Frankel's federal public service includes serving as a 
Legislative Assistant to Senator Jacob Javits of New York and as a 
Special Assistant to the Under Secretary of the Department of Housing 
and Urban Development.
    Mr. Frankel has very strong academic credentials; he graduated Phi 
Beta Kappa from Wesleyan University and was a Fulbright Scholar. From 
1981 to 1997 he served as a Trustee to Wesleyan. He received his law 
degree from Harvard Law School and, in 1995, was a Fellow at Harvard's 
John F. Kennedy School of Government. At the University of Connecticut, 
he was an adjunct professor. Currently, Mr. Frankel is a Fellow at the 
Yale School of Management and a Senior Fellow at the Yale School of 
Forestry and Environmental Studies.
    When Mr. Frankel is not occupied with the teaching and law, he 
serves as a member on the Governor's Council on Economic 
Competitiveness and Technology as Chairman of the Council's 
Transportation Infrastructure Advisory Board. He is Advisor to the 
National Trust for Historic Preservation, Trustee of the Connecticut 
Trust for Historic Preservation, and a Director of the Regional Plan 
Association. Additionally, he was a Selectman for the town of Weston, 
Connecticut.
    While Emil's credentials overwhelmingly speak for themselves and 
demonstrate his high qualification to be an Assistant Secretary of 
Transportation, I would like to emphasize my own personal support. His 
experience in the public and private sector, as well as in academia, 
allow him to understand the complex nature and importance of 
transportation in today's economy and society. He is an innovator and 
thinker with a great understanding of state and local transportation 
needs. I can think of no better person for the job. I hope you will 
confirm him quickly and I thank the Chair and Committee members for 
their time. Thank you.

    Senator Breaux. I appreciate both of your comments. I want 
to get our House colleagues--I appreciate your comments about 
his credibility. I noticed--I think I noticed--yes, I noticed 
that in the conflicts of interest in Mr. Frankel's testimony 
that Mr. Frankel has agreed to, if he is confirmed, to sell his 
stock in Enron Corporation.
    [Laughter.]
    Senator Breaux. I know that is a tough thing to have to do. 
We are glad you agreed to do that.
    Mr. Frankel. I wish I had been here 2 months ago.
    [Laughter.]
    Senator Breaux. We are glad to have Congressman Petri here, 
and any comments you might make.

                STATEMENT OF HON. THOMAS PETRI, 
               U.S. REPRESENTATIVE FROM WISCONSIN

    Representative Petri. Just a word, Senator, to say I have 
had the opportunity to know Emil Frankel for longer than either 
one of us would like to admit, and he is an honorable person, 
and I think the public is lucky to have the opportunity to 
benefit from his services. I know that I and a number of us in 
the transportation area look forward to working with him. He 
brings a very broad range of experience to his job, and I think 
will be of great benefit.
    Senator Breaux. Thank you very much, Congressman. 
Congressman Chris Shays, we are glad to have you.

             STATEMENT OF HON. CHRISTOPHER SHAYS, 
              U.S. REPRESENTATIVE FROM CONNECTICUT

    Representative Shays. Thank you, Mr. Chairman. I am 
delighted to be here with my two very esteemed Senators, and my 
colleague from the House, to just say to you that Emil Frankel 
is probably one of the people I respect the very most. If I was 
ever in a tight situation, he would be one of the people I 
would want by my side, and so I think that our new Secretary 
will find him extraordinarily helpful. I think both the 
administration will find him very loyal, but I think Congress 
will find him very responsive, and I just have enormous respect 
for him.
    The only quality I wondered if he had was patience, and I 
have learned that he is a very patient person, this being 
December, and his selection process beginning many, many, many, 
many moons ago.
    Senator Breaux. Well, we are going to try to do it as 
expeditiously as we can, Chris. We thank you and Tom for being 
with us. We are going to move on and have Congressman Jim 
Oberstar--Jim, if you would come on up with Mr. Jeffrey Shane, 
and Mr. Frankel, go ahead and stay at the desk, and we will 
have both of our nominees at the table, and we will look 
forward to having Congressman Jim Oberstar's introductory 
comments for Mr. Jeffrey Shane.

               STATEMENT OF HON. JAMES OBERSTAR, 
               U.S. REPRESENTATIVE FROM MINNESOTA

    Representative Oberstar. Thank you, Mr. Chairman. First, 
Mr. Chairman I want to thank you and Chairman Hollings for 
standing as towers of strength during the aviation security 
conference negotiations. Thanks to your firm position and 
visionary view we got the best aviation security bill that the 
nation has seen, and surpassing even the original 1990 NM 103 
bill.
    Senator Breaux. Thank you, Congressman. I think you are 
certainly correct that Chairman Fritz Hollings deserves the 
lion's share of the credit. He did a truly outstanding job, and 
I appreciate your comments.
    Representative Oberstar. I would say that never in the 35-
year history of the Department of Transportation has a person 
been nominated for a position at DOT with better or more 
appropriate credentials than Jeff Shane, the only exception 
perhaps being the current Secretary, Norm Mineta.
    I was present at the creation of the Department of 
Transportation in 1966 as administrative assistant to my 
predecessor, John Blotnick, who chaired the appropriate 
subcommittee at the request of President Johnson, managed the 
legislation that crafted the Department, and so I have had a 
long view of this issue, and those who have filled various 
positions.
    Jeff Shane comes to this position with a sweep of 
intellect, with the personal and professional integrity, with 
more than three decades of extensive experience with the 
Department of State and Department of Transportation on 
international aviation and trade policy, with credentials that 
will enable him to take command of the duties of the office on 
which he is about to enter without breaking stride, with a 
clarity of purpose, with a clear understanding.
    My experience with Jeff Shane extends back over a decade 
and a half to his service at both the State Department and DOT 
in the Reagan and George H. Bush administrations. We worked on 
international aviation and passenger and cargo trade matters. 
We worked on domestic aviation issues. In my capacity as 
Chairman of the Aviation Subcommittee, I found Jeff Shane 
always to be a model of intellectual probity, thoroughly 
knowledgeable on a wide range of issues on which he was called 
to act, informed, and consistently and a constantly vigilant, 
vigorous advocate for U.S. aviation interests, and a skillful, 
effective international negotiator.
    He was the architect of our government's open skies policy, 
Mr. Chairman, to promote competition in our bilateral aviation 
agreements. Under this policy, we achieved very significant 
competitive agreements that advanced the cause of U.S. 
aviation, turned our share in the most important international 
aviation markets from 40-60 American-foreign, or 30-70 to 70-30 
and 60-40 in favor of the United States. The Clinton 
administration continued those policies with great success.
    But his experience extends beyond aviation to other modes 
of transportation. I would just recall a conversation that Jeff 
and I had early in 1992. In the aftermath of the enactment of 
ISTEA, we were having a discussion about the significance of 
this legislation and he said, it is one of the most 
extraordinary, innovative transportation measures ever enacted. 
It has had the exceptional benefit of causing Assistant 
Secretaries at the policy level in the Department to get 
together to share our thoughts, understand each other's mode of 
transportation better, to begin thinking and acting 
intermodally, something we have long needed to do. That is the 
kind of person I want to see in the Department of 
Transportation.
    Secretary Mineta has told me several times that he wants 
Jeff to upgrade the Department's Policy Office to create, as he 
put it, a world class think tank. Well, I support those 
efforts, and in fact 2 years ago while Jeff was in the private 
sector he and Charlie Honicutt, who came to me and out of 
concern about the level of staffing at DOT--Honicutt also held 
the same position in the Clinton administration--to explore 
means of upgrading the aviation policy staff. Normally, folks 
out in the private sector, they have left government, they 
forget about the public policy issues, but Jeff was concerned.
    We met weekly to fashion ideas, approaches, strategies to 
get the funding necessary to buildup the staff, which in the 
demise of the CAB, when it was transferred over to DOT, was one 
time 300, is now well under 100, and half of those are at 
retirement age, and you do not have the critical expertise in 
the Department to analyze these multibillion dollar aviation 
trade deals that we are in the process of negotiating. Jeff 
Shane is concerned about it, and wanted us to do the right 
thing, took an enormous amount of time to address this issue, 
and now he will have the opportunity to first-hand deal with 
it, with the support of the Secretary.
    I can think of no one better qualified to attract new 
staff, to keep them and to inspire them., and in these post 
September 11 times, in the aftermath of enactment of this 
landmark aviation and transportation security law, DOT needs at 
the policy level a person with Jeff Shane's experience, 
intellectual capacity, honesty, openness to new ideas, and the 
energy to pursue and implement innovation. His reentry into 
public service, Mr. Chairman, will produce better 
transportation policy decisions to the benefit of our nation's 
economy and to the benefit of the Department, and to the 
benefit of the American public generally.
    Senator Breaux. Well, Congressman Oberstar, thank you for 
coming over from the House. You are truly the transportation 
guru of the House, and those remarks coming from you are very 
encouraging about your relationship with Mr. Shane and your 
knowledge of his background, and your support is very 
important.
    It is clear that both of these nominees have bipartisan 
support from both Republicans and Democrats, and that has got 
to be a very positive indication about the job they are going 
to be able to do.
    So Congressman, thank you for being with us, and you can go 
back and do something over there.
    [Laughter.]
    Senator Breaux. Gentlemen, we have heard some nice words 
about both of you. We would like to hear from you. Mr. Shane, 
we will allow you to go first, if you would give your 
statement, and then we will follow with Mr. Frankel.

         STATEMENT OF MR. JEFFREY SHANE, NOMINEE TO BE 
ASSOCIATE DEPUTY SECRETARY OF TRANSPORTATION AT THE DEPARTMENT 
                       OF TRANSPORTATION

    Mr. Shane. Thank you, Mr. Chairman. Before Congressman 
Oberstar leaves, I just want to express my profound gratitude 
to him for those very, very gracious remarks. Having him here 
means more than I can say, and I really am grateful to you for 
taking the time, especially in this environment. Thanks so 
much.
    Mr. Chairman, I have a prepared statement, a longer 
statement that we have submitted, and I would ask that that be 
included in the record. I would like to summarize that.
    First, I really do want to express my gratitude to the 
Committee and to you personally in this busiest of times for 
holding the hearing today. I want to underscore my commitment 
from the very outset, if I am fortunate enough to be confirmed 
by the Senate, to continue to work with this Committee and its 
staff as in past years as closely as possible in addressing the 
extraordinary challenges that confront our nation's 
transportation system today.
    Mr. Chairman, my wife, Jean Wu is here today, and I have 
relied heavily on her understanding and encouragement. From the 
moment I first considered putting my law practice on hold for a 
possible return to government, she has been a full partner in 
this enterprise, and I am eternally grateful for her wisdom and 
her support, and for her love.
    Senator Breaux. We are glad to have her as well.
    Mr. Shane. While I am expressing thanks, let me of course 
say how grateful I am to President Bush, to Secretary Mineta, 
to Deputy Secretary Michael Jackson for inviting me to join the 
superb team they have assembled at the Department of 
Transportation. If I am fortunate enough to be confirmed by the 
Senate, this appointment will represent my fourth tour of duty 
at DOT. For the past 8 years, my legal practice has been 
largely devoted to transportation issues. A variety of 
extracurricular activities have also been about transportation. 
All of this is detailed in the material I submitted to the 
Committee.
    It is fair to say I have been involved in transportation 
policy for the greater part of my professional life. I do not 
know of any issues that are more important to the long-term 
economic vitality of this country. That is why it would be such 
an honor and such a privilege to be able to return to DOT and 
to continue this work.
    As you know, Mr. Chairman, Secretary Mineta has proposed a 
reorganization of the Office of the Secretary to ensure a more 
effective transportation development function there than has 
existed for some time. The Secretary has proposed that I head 
up that new structure, and the administration has proposed to 
the Congress a small legislative adjustment to the Secretary s 
senior staff to facilitate that new restructuring.
    I have spent enough years at the Department to know quite a 
lot about what works and what does not, and I have every 
confidence that this reorganization will work. I hope, 
therefore, that if I am a confirmed I will be in a position to 
help breathe some life into Secretary Mineta's vision.
    The events of 9/11 have altered DOT's agenda in fundamental 
ways. The Aviation and Transportation Security Act is a seminal 
piece of legislation, an act of which the Congress can be 
immensely proud, and I can report that the Department began 
working full bore on its implementation even before it was 
signed. In my temporary advisory capacity at the Department I 
have been working with the Secretary's team on establishing 
this new Transportation Security Administration, and I can 
report that the effort those far has been both extremely 
intense and extremely impressive.
    The implications of that legislation, however, go far 
beyond the establishment of a new agency, or the many specific 
requirements that it contains. That act, the Port, Maritime and 
Rail Security legislation which has been introduced, and 
perhaps future acts of Congress, leave no doubt that we have a 
fundamental obligation to perform all of our jobs within a new 
and more security conscious environment. What we need is a new 
culture within our transportation sector, one that treats 
security as an essential element of the logistics process.
    The administration and the Congress have some big issues to 
address during the next few years, during which we will have to 
reauthorize all of our major transportation programs, but from 
this point on we will have to take up those issues within the 
context of a security challenge the dimensions of which we are 
only now beginning to understand. It would be an immense 
privilege to be able to work with you in that essential 
enterprise.
    Let me conclude by saying again how honored I am that the 
President has nominated me for this position. I thoroughly 
enjoyed working with this Committee and it staff during my past 
tours in the executive branch, and I very much hope that I will 
have the opportunity to do so again. I hope that it will be 
possible, with the Senate's advice and consent, to get to work 
very soon.
    Thank you very much.
    [The prepared statement and biographical information of Mr. 
Shane follow:]

       Prepared Statement of Jeffrey N. Shane, Associate Deputy 
           Secretary-designate, Department of Transportation

    Mr. Chairman and Members of the Committee:
    First, I want to express my gratitude to the Committee for your 
willingness, in this busiest of times, to schedule this hearing. I also 
want to underscore my commitment from the very outset, if I am 
fortunate enough to be confirmed by the Senate, to work with the 
Committee and its staff as closely as possible in addressing the 
extraordinary challenges that confront our nation's transportation 
system today.
    I am extremely grateful to President Bush, Secretary Mineta, and 
Deputy Secretary Jackson for inviting me to join the superb team they 
have assembled at the Department of Transportation.
    My wife, Jean Wu, is here today. I have relied heavily on her 
understanding, encouragement, and guidance from the moment I first 
considered putting my law practice on hold for a possible return to 
government service. She has been a full partner in this enterprise, and 
I am eternally grateful for her wisdom, her support, and her love.
    Finally, let me express my heartfelt thanks to my good friend 
Congressman Jim Oberstar for his gracious introductory remarks this 
afternoon. Having him here means more than I can say.
    Let me start by summarizing my background.
    If I am fortunate enough to be confirmed by the Senate, this 
appointment will represent my fourth tour of duty at the Department of 
Transportation. My first began in the late 1960s, when I served as a 
trial attorney and later Special Assistant for Environmental Affairs in 
the Office of the General Counsel. I appeared for DOT in a great many 
regulatory proceedings before the Interstate Commerce Commission, the 
Civil Aeronautics Board, and the federal Maritime Administration, and 
spent a considerable amount of time on the implementation of the 
National Environmental Policy Act in the context of the nation's 
transportation programs.
    In 1979, after several years of traveling and working overseas--
mostly as an environmental lawyer for the United Nations Development 
Program--I returned to DOT as Assistant General Counsel for 
International Law. After four years in that position I moved to the 
Office of Policy and International Affairs as Deputy Assistant 
Secretary.
    In 1985 I moved to the Department of State as Deputy Assistant 
Secretary for Transportation Affairs to serve, among other things, as 
chief aviation negotiator. I remained at State for four years.
    I served as Assistant Secretary of Transportation for Policy and 
International Affairs from 1989 to early 1993, working for Secretaries 
Samuel Skinner and Andrew Card on the full range of transportation 
issues for which DOT has responsibility.
    Since early 1993 I have been practicing law. I am currently a 
partner at Hogan & Hartson in the firm's Washington office.
    I should also mention some extracurricular activities that I have 
been engaged in during my time as a private practitioner. First, from 
1994 until about a month ago I served as a Vice President of the 
National Defense Transportation Association and as Chairman of its 
Military Airlift Committee. The Committee exists for the purpose of 
fostering as healthy and productive a relationship as possible between 
the Defense Department and the civilian providers of airlift on whom 
DOD relies so heavily at all times.
    Second, also for the past seven years, I served as Chairman of the 
Commission on Air Transport of the International Chamber of Commerce. 
The Chamber represents the international business community before 
governments everywhere, and the Air Transport Commission's job is to 
formulate sensible positions, on behalf of business enterprise the 
world over, in the area of aviation policy.
    Finally, I was recently elected chair of the American Bar 
Association's Forum on Air and Space Law--a large group of lawyers 
around the country who specialize in aviation and space issues.
    You will have inferred from this history that I have been involved 
in transportation policy for the greater part of my professional life. 
That is why it would be such an honor and privilege to be able to 
return to the Department of Transportation and continue this work.
    I am enthusiastic about this opportunity for a number of reasons. 
First, I have known Secretary Mineta for many years. Based on his 21 
years of service in the Congress, he brought a level of experience in 
federal transportation programs to the Secretary's office on his first 
day in the job that we have not seen in a very long time. I knew from 
the outset that this is likely to be a uniquely productive time for DOT 
under his leadership, and therefore the right time to be a part of the 
DOT team.
    Deputy Secretary Michael Jackson was a friend and colleague during 
the first Bush Administration, when he served as Chief of Staff to then 
Secretary Andrew Card. Mr. Jackson is another extraordinarily talented 
public servant and it would be a special privilege to work closely with 
him once again.
    As you know, the Secretary has proposed a reorganization of the 
Office of the Secretary to ensure a more effective transportation 
policy development function than has existed for some time.
    Secretary Mineta has proposed that I head up the new structure. I 
have spent enough years at the Department to know quite a lot about 
what works and what doesn't, and hope, if confirmed, that I will be 
able to help breathe life into his vision. I am looking forward to 
returning to the Committee to discuss the details of the restructuring 
at the appropriate time.
    Like all nominees who come before this Committee, I was asked to 
respond in writing to a number of thoughtful questions about why I am 
attracted to this position, why I believe I am qualified to hold it, 
and what I hope to accomplish if confirmed. I don't want to take time 
now to reiterate what I said in that questionnaire. I do want to say, 
however, that the events of 9-11 have altered DOT's agenda in 
fundamental ways. The Aviation and Transportation Security Act is a 
seminal piece of legislation--an act of which the Congress can be 
immensely proud--and I can report that the Department began working 
full-bore on its implementation even before it was signed by the 
President.
    The implications of that legislation go far beyond the 
establishment of a new Transportation Security Administration, or the 
many specific requirements that it contains. That act, the port 
security legislation which is currently pending, and perhaps future 
acts of Congress, leave no doubt that we have a fundamental obligation 
to perform all of our jobs within the context of a new and more 
security-conscious environment. What we need, I believe, is a new 
culture within our transportation sector--one that treats security as 
an essential element of the logistics process. We have the tools--
notably the technology--to make our system much tighter than it is 
today, and we have no alternative other than to do so with all 
available speed.
    The Department of Transportation and the Congress have some big 
problems to address during the next few years, during which we will 
have to reauthorize all of our major transportation programs. But from 
this point on we will have to take up those issues within the context 
of a security challenge the dimensions of which we are only now 
beginning to understand. It would be an immense privilege to be able to 
work with you in that essential enterprise.
    Let me conclude by saying again how honored I am that the President 
has nominated me for this position. I thoroughly enjoyed working with 
this Committee and its staff during my past tours in the Executive 
Branch, and I very much hope that I will have the opportunity to do so 
again. I hope that it will be possible, with the Senate's advice and 
consent, to get to work very soon.
    I would be pleased to respond to any questions you might have.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name: Jeffrey N. Shane (Nickname: Jeff).
    2. Position to which nominated: Associate Deputy Secretary of 
Transportation.
    3. Date of nomination: October 10, 2001.
    4. Address: (Information not released to the public.) Office: Hogan 
& Hartson L.L.P., 555 Thirteenth Street, N.W., Washington, DC 20004-
1109.
    5. Date and place of birth: March 27, 1941, New York, NY.
    6. Marital status: Married to Dzing Jean Wu.
    7. Names and ages of children: N/A.
    8. Education: (High School): Hempstead H.S., Hempstead, NY (9/54-6/
57), West Hempstead H.S., West Hempstead, NY (9/57-6/58), High School 
Diploma, June 1958; (College): Princeton University, Princeton, NJ, 
A.B., June 1962; (Law School): Columbia Law School, New York, NY, 
LL.B., June 1965.
    9. Employment record: Turret lathe operator, Sylvania-Corning 
Nuclear Corporation, Hicksville, NY, 6/59-9/59; Waiter, Frontier 
Village, Lake George, NY, 6/60-9/60; Management trainee, New York 
Telephone Company, Hempstead, NY, 6/61-9/61; Counselor, Camp Timber 
Lake, Phoenicia, NY, 6/62-9/62; Investigator, Retail Credit Co., New 
York, NY, 6/63-9/63; Summer Intern, Voice of America, Washington, DC, 
6/64-9/64; Research Assistant, Columbia University, New York, NY, 9/65-
10/65; Legislative Analyst, Basic Systems, Inc., New York, NY, 3/66-9/
66; Trial Attorney, Federal Power Commission, Washington, DC, 6/66-4/
68; Trial Attorney and Special Assistant to the General Counsel, Dept. 
of Transportation, Washington, DC, 4/68-10/72; Attorney and special 
investigator, Dept. of Transportation, Washington, DC, 3/74-7/74; 
Consultant, Environmental Law Institute, Washington, DC, 7/74-11/75; 
Attorney, United Nations Development Programme, Bangkok, Thailand, 11/
75-1/78; Attorney and consultant (self-employed), Washington, DC, 1/78-
12/78; Project Director, Library of Congress, Washington, DC, 12/78-3/
79; Assistant General Counsel for International Law, Dept. of 
Transportation, Washington, DC, 3/79-3/83 Deputy Assistant Secretary 
for Policy and International Affairs, Dept. of Transportation, 
Washington, DC, 3/83-3/85; Deputy Assistant Secretary for 
Transportation Affairs, Dept. of State, Washington, DC, 3/85-6/89; 
Adjunct Professor of Law, Georgetown University, Washington, DC, 1985-
89; Assistant Secretary for Policy and International Affairs, Dept. of 
Transportation, Washington, DC, 6/89-1/93; Counsel, Wilmer, Cutler & 
Pickering, Washington, DC, 4/93-12/96; Partner, Wilmer, Cutler & 
Pickering, Washington, DC, 12/96-4/00; Partner, Hogan & Hartson L.L.P., 
Washington, DC, 4/00-present.
    10. Government experience: Member, Architectural and Transportation 
Barriers Compliance Board, 1989-93 (Vice-Chairman, 1992-93); Vice-
Chairman, Advisory Commission on Conferences in Ocean Shipping, 1992; 
Member, Study Group of Experts on Future Regulatory Arrangements, 
International Civil Aviation Organization, 1993-94.
    11. Business relationships: Director, A. A. & S. Real Estate, Inc. 
(family corporation established for estate planning purposes) Director, 
Albert Shane, Inc. (family corporation established for estate planning 
purposes).
    12. Memberships: Member, D.C.; Bar Member, American Bar 
Association; Chairman, Commission on Air Transport, International 
Chamber of Commerce (Paris), 1994-present; Vice President, National 
Defense Transportation Association, and Chairman, NDTA Military Airlift 
Committee, 1994-present; Chair, American Bar Association Forum on Air 
and Space Law, 2001-present; Member, International Aviation Club of 
Washington (President, 1999-2000) Member, Aero Club of Washington; 
Member, Board of Directors, International Institute of Air and Space 
Law, Leiden University, Holland, 1993-95; Member, Wings Club, 1993-
present (Board of Governors, 1994-97); Member, Cosmos Club, 1987-
present; Member, Columbia Country Club, 2000-present.
    13. Political affiliations and activities: (a) None. (b) None. (c) 
Oberstar, James--via Friends of James Oberstar: 10/07/1997--500.00, 04/
21/1999--500.00, 09/14/1999--500.00, 02/09/2000--500.00; Allen, 
George--via Friends of George Allen: 08/11/2000--1000.00; Lazio, Rick 
A--via Lazio 2000 Inc: 09/30/2000--1000.00; Republican National 
Committee-RNC: 11/01/2000--1000.00; Hogan & Hartson Political Action 
Committee: 10/02/2000--950.00; Dole, Elizabeth--via Elizabeth Dole for 
President Exploratory Committee Inc: 03/30/1999--1000.00; Bush, George 
W--via Bush for President Inc: 06/30/1999--1000.00; Reid, Harry--via 
Friends for Harry Reid: 12/28/1997--500.00; Hogan & Hartson Political 
Action Committee: 04/23/2001--1100.00; McCain, John S--via McCain 2000 
INC: 02/15/2000--1000.00.
    14. Honors and awards: Full-tuition academic scholarship, Princeton 
University (1958-62); New York State Regents' Scholarship, Columbia Law 
School (1962-65); 1Presidential Meritorious Rank Award, Department of 
State, 1988; Senior Executive Service Performance Award, Department of 
State, 1987; Secretary's Medal for Meritorious Achievement, Department 
of Transportation, 1971.
    15. Published writings: ``Aviation Policy: Who Decides?'' LatinCEO, 
June 2001; ``It is Time for Foreign Investors,'' Business Travel News, 
October 1998; ``The Changing Nature of International Aviation,'' FTL 
Memorandum M89-4, Flight Transportation Laboratory, Massachusetts 
Institute of Technology, December 1989; ``Challenges in International 
Civil Aviation Negotiations,'' U.S. Department of State, Bureau of 
Public Affairs, Washington, D.C., February 1988; ``Getting to Yes in 
International Aviation Negotiations: An Impossible Dream?'', ITA 
Magazine No. 37, September 1986; ``Environmental Law in the Developing 
Nations of Southeast Asia,'' in Colin MacAndrews and Chia Lin Sien, 
eds., Developing Economies and the Environment: The Southeast Asian 
Experience (to be published November 1978 by McGraw-Hill); ``Asian 
Nations Focus on Environmental Law,'' Environmental Policy and Law, 
Autumn 1978 (to be published November 1978); Statement on applicability 
of National Environmental Policy Act to U.S. Government activities 
abroad, presented to Subcommittee on Resource Protection, Senate 
Committee on Environment and Public Works, September 1978; 
``Environmental Law: Closing the Gap,'' Business in Thailand, August 
1978; ``Coastal Management Legislation in Sri Lanka,'' report to the 
Regional Office for Asia and the Pacific, U.N. Environment Program, 
Bangkok, Thailand, February 1978. ``Environmental Law and Technical 
Cooperation: Agenda for Asia and the Pacific,'' paper presented at 
ESCAP/UNEP Expert Group Meeting on Environmental Protection 
Legislation, December 1977, Bangkok, Thailand; ``Environmental Law in 
Thailand,'' project working paper, U.N. Task Force on Human 
Environment, November 1977; ``Legal Aspects of Environmental Protection 
in Asia,'' paper presented at Fifth LAWASIA Conference, Seoul, Korea, 
August 1977; ``Legal Aspects of Environmental Management in Malaysia,'' 
project working paper, U.N. Task Force on Human Environment, January 
1977; ``The Use of Environmental Impact Statements in the United 
States,'' background paper, U.N. Task Force on Human Environment, 
September 1976; NEPA in Action: The Impact of the National 
Environmental Policy Act on Federal Decision-Making, 1975, book-length 
report to the U.S. Council on Environmental Quality, prepared in 
association with the Environmental Law Institute, Washington, D.C. 
(principal co-author, with Roan Conrad and Susan B. Pondfield); 
``Enforcement of Water Pollution Controls in California and EPA Region 
IX,'' 1975, a report to the U.S. National Commission on Water Quality, 
prepared in association with the Environmental Law Institute, 
Washington, D.C; ``Ecology in Transportation,'' I.C.C. Practitioners 
Journal, Vol. 39, p. 808 (1972); ``Environmental Litigation in 1971,'' 
Highway Research Circular No. 135 (published by the Highway Research 
Board of the National Research Council), May 1972; ``Marijuana Law,'' 
The New Republic, March 28, 1968; ``Draft Those Reservists?'' The New 
Republic, September 17, 1966.
    16. Speeches: Please see accompanying compilation.
    17. Selection: (a) I believe it was felt that my 14 years of 
experience at the Department of Transportation in a variety of legal 
and policy positions, together with 4 years supervising our 
international transportation negotiations at the Department of State 
and 8 years of practicing transportation law in the private sector, 
provided a suitable background for the position. (b) During my previous 
government service I had the opportunity to work with most of the 
Department of Transportation's modal administrations on a variety of 
issues. As Assistant Secretary for Policy and International Affairs 
(1989-93) I was involved at a senior level in the entire range of 
policy issues for which DOT has responsibility, both domestic and 
international. My time in the private sector, predictably, has enhanced 
further my understanding of many of those issues. I believe that the 
sum total of that experience will be invaluable in equipping me to 
assist the Secretary of Transportation and the President in addressing 
the important transportation policy challenges that face our country 
today.

                   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--with the single exception of two 
family corporations of which I am an officer.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. Please refer to the Deputy General Counsel 
opinion letter.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. Please refer to the 
Deputy General Counsel opinion letter.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated? Please refer to the Deputy 
General Counsel opinion letter.
    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 long 
believed, as a matter of personal conviction, that the United States 
should liberalize restrictions in its laws that impede U.S. airlines' 
access to the global capital market. I have made a great many speeches 
expressing that view, have written articles to that effect, and I have, 
on a few occasions, expressed that view in private conversations with 
Members of Congress and congressional staff members. On a few 
occasions, I expressed the same view on behalf of an aspiring foreign 
investor in the U.S. airline industry who was my client.
    In another assignment, I indirectly assisted in the preparation of 
legislative language designed to tighten up U.S. law in connection with 
the ``Fly America'' requirements as applied to foreign military sales 
to Israel.
    Finally, I communicated with agencies of the U.S. Government and 
congressional offices in an effort to persuade the Agency for 
International Development to use U.S. airlines for the emergency 
shipment of foodstuffs to Honduras rather than employing a Russian 
airline.
    I have not mentioned a larger number of examples which I pursued on 
clients' behalf in the context of administrative proceedings before the 
Department of Transportation.
    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 Deputy General Counsel opinion letter. A copy of my ethics 
agreement with DOT is enclosed.
    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. The FBI reported to me in late September of this year that a 
complaint was filed against me in February 1994 with the Public 
Integrity Section, Criminal Division, Department of Justice, alleging 
that, while still employed by the Department of Transportation, I 
entered into negotiations regarding post-government employment with a 
company doing business with the Department. The file was apparently 
closed without action in October 1994. I was never interviewed with 
respect to this complaint and was wholly unaware of it until the FBI 
brought it to my attention last month during the course of my pre-
appointment background investigation. I have never been disciplined or 
cited for any breach of ethics or unprofessional conduct by any 
government agency or other entity.
    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. See 
previous answer regarding an apparent Justice Department investigation 
in 1994. I have never been 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 
minor traffic offenses.
    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? Since leaving 
government in early 1993 I have been a partner in two major Washington 
law firms. I sure that each has been involved from time to time as. a 
party in interest in administrative agency proceedings and in civil 
litigation. I have had no direct involvement in any such proceedings or 
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. None.

                     E. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? I will 
certainly do everything within my power to ensure that such deadlines 
are routinely met.
    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? I will do everything within my 
power to ensure that the Department of Transportation protects 
congressional witnesses and whistle blowers from reprisal.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? 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. As a 
lawyer with a practice substantially devoted to regulatory issues, my 
training and experience amply equip me to understand whether a proposed 
regulation complies not only with the letter, but also with the spirit 
of enabling or other relevant legislation. I am also fully aware of 
Congress's interest in seeing laws implemented promptly. I know that 
Secretary Mineta and Deputy Secretary Jackson are fully committed to 
enhancing the Department's performance and to increasing the 
Department's accountability in this regard. I wholly share that 
commitment, and look forward to joining them in achieving this 
important objective.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives. The Department of 
Transportation is charged with providing leadership in the development 
and administration of policies and programs that ensure the 
availability of safe, secure, efficient, coordinated, competitive, 
cost-effective, and environmentally sound transportation services as a 
critical ingredient in the economic health of our country. From the 
Department's inception, safety has been its most important goal; it 
remains so today, particularly in this time of extraordinary challenge 
to the security of our transportation system. A second key objective is 
the maintenance and expansion of the nation's transportation 
infrastructure. Third, the Department must enhance mobility by ensuring 
the availability of fully accessible, competitive, and affordable 
transportation services to all of our citizens. Fourth, the Department 
has important law enforcement responsibilities such as those of the 
U.S. Coast Guard for interdicting attempted importation of illegal 
drugs or other contraband and for preventing the pollution of our 
waters. I have worked with each of the Department's modal 
administration over the years in carrying out the Department's mission, 
and I look forward enthusiastically to doing so again if I am 
confirmed.
    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. I 
have spent the major portion of my career in public service. Most of 
that time was devoted to transportation policy issues at the federal 
level. In my last federal government assignment--Assistant Secretary of 
Transportation for Policy and International Affairs--I was the senior 
advisor to the Secretary of Transportation on the full range of policy 
issues for which the Secretary has responsibility.
    2. Why do you wish to serve in the position for which you have been 
nominated? I did not seek this opportunity. When it was first 
presented, I felt some ambivalence, having already enjoyed so many 
tours of duty in public service, and having found a home in a wonderful 
law firm with a practice that, after 8 years, had hit its stride. 
Following a lengthy deliberation, however, I concluded that, for 
someone with my particular background and interests, it would be a 
profound mistake to say no--to forgo the opportunity to spend at least 
a few more years working to rebuild our nation's transportation 
infrastructure, to address the congestion and gridlock that threaten to 
impede our future economic growth, to help ensure the safety and 
security of our transportation system, and to ensure the maintenance of 
meaningful competition for the benefit of travelers and shippers of 
goods, both domestically and internationally. The extraordinary quality 
of DOT's current leadership--Secretary Norman Mineta and Deputy 
Secretary Michael Jackson--was an essential factor in my decision to 
pursue this position. That President Bush has chosen so qualified a 
team of managers for the Department bodes very well for transportation 
policy during this Administration.
    The events of September 11, 2001, will alter DOT's agenda, at least 
for a time, but they have only served to underscore my conviction that 
this is clearly the right thing for me to do, if the Senate agrees.
    3. What goals have you established for your first 2 years in this 
position, if confirmed? My most immediate personal goal will be to work 
closely with the Secretary, Deputy Secretary, and modal administrators 
to refresh the Department's transportation policymaking capability; 
Given the events of September 11, 2001 and their aftermath, an 
essential goal must be the securing of our transportation system and 
the restoration of public confidence in it. These attacks on our 
country have taken the challenge to an entirely new level, and an 
effective response will require an extraordinary commitment of 
resources, both human and financial. Much has been accomplished by the 
Department and the Administration in recent weeks in cooperation with 
Congress, there is much more to be done; The nation's surface 
transportation and aviation programs will shortly be up for 
reauthorization. The Department's challenge will be to exploit these 
opportunities for the 14 purpose of ensuring the availability of a 
national transportation infrastructure that not merely accommodates, 
but encourages the economic growth of our country; Closely tied with 
the previous goal is a growing concern about the quality of competition 
in our transportation system. DOT, in cooperation with the Department 
of Justice, must find ways to enhance competition in our transportation 
system. Any measures adopted for the enhancement of consumer welfare in 
this regard, however, must be taken without compromising deregulation; 
Unless immediate steps are taken to augment DOT's professional staff--
notably in the areas of transportation policy generally and aviation 
policy in particular--the Department simply will not have the 
wherewithal to carry out its mission. Accordingly, a major goal is to 
encourage in any way I can an effective response to this problem. 
Secretary Mineta has stated the same thing, and I strongly support his 
views.
    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 my 18 years in a variety of 
transportation policy positions equips me well for the responsibilities 
I will assume if confirmed.
    5. Who are the stakeholders in the work of this agency? The primary 
stakeholders for DOT are, of course, the traveling and shipping public. 
Other important stakeholders are the providers of transportation, both 
direct and indirect, our transportation workforce, state and local 
transportation agencies, and, of course, the Congress.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 10. Given my 
proposed role in helping to shape transportation policy at the federal 
level, I believe it is essential that I maintain an open channel for 
communications with all stakeholders. In my experience, a constant 
challenge for federal policymakers is to remain closely in touch with 
those likely to be affected by the federal government's decisions.
    7. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls? As a senior 
manager at the Department of Transportation, I would be obligated to 
ensure that the Department approaches its programs in an effective, 
business-like way, wholly within available budgetary resources. I know 
that Secretary Mineta is committed to improving the Department's 
performance on this front, and I will support him in every way 
possible. (b) What experience do you have in managing a large 
organization? As Assistant Secretary of Transportation for Policy and 
International Affairs, I managed a staff of 185-200. I supervised three 
Deputy Assistant Secretaries and five office directors, and a greater 
number of division chiefs. I held that position.for 4 years (1989-
1993), and served as a Deputy Assistant Secretary in the same office 
for 2 years (1983-1985).
    As Deputy Assistant Secretary of State for Transportation Affairs 
(1985-1989) I supervised a staff of approximately 30.
    8. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals. The most important responsibility of any public 
servant privileged to serve in a decisionmaking capacity is to help set 
the public policy agenda. Unless there is a determined effort to 
establish identifiable performance goals, the tendency to slip into a 
passive mode of operation is almost irresistible. At this point in my 
own career, joining a government agency provides the opportunity to 
participate in the setting of the agenda and then to help ensure that 
it is accomplished in real time. The responsibility to report to 
Congress on the Department's success in achieving established goals 
helps to ensure that the agenda isn't subordinated to merely 
``answering the mail.'' (b) What steps should Congress consider taking 
when an agency fails to achieve its performance goals? Should these 
steps include the elimination, privatization, downsizing or 
consolidation of departments and/or programs? Congress should attempt 
to analyze the organic reasons for an agency's failure to achieve its 
performance goals. In some cases, no doubt, ineffective management may 
be the root cause, and improvements on the managerial front may be a 
sufficient remedy. In other cases, it may well be that a Department 
function would be carried out more effectively at a different level of 
government or in the private sector. Still other programs may be found, 
upon investigation, to have outlived their usefulness and be targets 
for elimination. (c) What performance goals do you believe should be 
applicable to your personal performance, if confirmed? My performance 
should be measured against the goals I outlined in the answers to 
Question 3. I will be particularly disappointed if, by the time this 
tour of duty ends, DOT does not have a more effective policymaking 
capability, and has not hired new staff 16 capable of carrying the 
Department's mission forward following the anticipated retirement of 
large numbers of professionals in the next few years. Similarly, the 
quality of the Department's contribution to the process of 
reauthorizing the federal aviation and federal highway programs should 
be seen, I think, as another performance indicator for the position I 
hope to assume. Finally, I hope it will be possible to look back on 
important improvements and the quality of competition found in our 
domestic airline industry.
    9. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you? I believe that the 
first duty of a manager is to empower employees and to create the most 
interesting and engaging work environment possible. To be productive, 
the supervisor-employee relationship must be characterized by mutual 
respect and collegiality. Given the extraordinary quality of the 
Department's career professionals, it will not be difficult to adhere 
to this model. No employee complaints have been brought against me.
    10. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe. In a number of my past positions in 
the federal government, I have been called upon to meet with and 
testify before Members of Congress on a regular basis. The opportunity 
to exchange views with Members of Congress and staff on key issues has 
been one of the great privileges in these positions. I am looking 
forward to further opportunities to engage the Congress.
    11. 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 is charged with looking at the 
Department's activities with a more detached, independent, and 
objective view than those of us ``on the line'' are likely to have. For 
that reason, the IG is often in a position to offer essential insights 
and constructive criticism of the Department's activities. I have 
always tried, in past positions at the Department, to engage the 
Inspector General in a spirit of cooperation, with communications 
predicated on mutual integrity, respect, and a shared commitment to 
problem solving. I would expect to maintain this approach if confirmed. 
I know that Secretary Mineta and Deputy Secretary Jackson will insist 
that the Department bring this spirit to all interactions with the 
Inspector General.
    12. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress. As a 
lawyer with a practice substantially devoted to regulatory issues, my 
training and experience amply equip me to understand whether a proposed 
regulation complies not only with the letter, but also with the spirit 
of enabling or other relevant legislation. I will make myself readily 
available to the Committee and its staff to address concerns relating 
to regulations issued by the Department of Transportation.
    13. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views. Congress and the Administration are already 
addressing the most important near-term priority: the establishment of 
much tighter security measures for our transportation system, with a 
particular focus on aviation.
    The most important long-term priority for Congress in the 
transportation policy arena will be the reauthorization of our 
transportation infrastructure programs. There is an even greater danger 
now, given the current downturn in economic activity--and the 
consequent reduction in demand for transportation--that we will be 
misled into believing that our infrastructure is adequate. It would be 
a huge public policy mistake not to take steps now to ensure that our 
transportation system is fully capable of supporting a more robust 
level of economic activity.
    14. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation. 
I wholly agree that discretionary spending must be predicated on a 
clearly articulated set of policy objectives and that decisions must be 
made pursuant to transparent criteria. I will have to acquaint myself 
with the extent to which this principle already characterizes DOT 
spending programs. If not, I look forward to an early project to 
address this issue more effectively.

    Senator Breaux. Mr. Shane, thank you very much for that 
statement.
    Mr. Frankel, we are pleased to have your statement now.

         STATEMENT OF MR. EMIL FRANKEL, NOMINEE TO BE 
ASSISTANT SECRETARY FOR TRANSPORTATION POLICY AT THE DEPARTMENT 
                       OF TRANSPORTATION

    Mr. Frankel. Than you, Mr. Chairman. I, too, would request 
that my written statement be included in the record, and I will 
just excerpt from it, and although they are not here any 
longer, I really want to also express for the record my 
profound thanks and appreciation to my two Senators and my two 
long-time friends who are Representatives, Congressman Petri 
and Congressman Shays.
    It is a great privilege to be here before you, and I 
appreciate particularly your willingness to consider my 
nomination with so many other urgent and critical legislative 
matters before the Congress. Needless to say, I am humbled and 
honored to be nominated by President Bush for the position of 
Assistant Secretary for Transportation Policy, and I appreciate 
the opportunity that Secretary Mineta and Deputy Secretary 
Jackson have extended to me to assist them and the great team 
that Secretary Mineta has assembled in shaping national 
transportation policy at this time.
    As you have already heard, I spent 4 years running or 
leading a multimodal state transportation agency, but I think 
importantly as state Transportation Commissioner I never forgot 
that the agency I led was providing some service to every 
resident and every business in the state every day, and that 
what we did affected people's daily lives and their work, and I 
think that speaks to the transportation field generally, and 
certainly to the United States Department of Transportation.
    I believe strongly in the need to continue moving toward a 
transportation system that operates seamlessly and one which 
provides for greater coordination between freight and passenger 
modes. I know that is something to which you are committed 
personally, and the leaders in the Congress, and certainly 
Secretary Mineta, are equally committed to. As a result of the 
experience I have had at the state and local levels, I believe 
that I can bring an important and relevant perspective to the 
development of policy at the federal level, and I hope that I 
can contribute to the goal of a Department of Transportation 
that speaks with one voice across all modes.
    I have remained deeply involved in the transportation field 
since I left state service in 1995, and therefore am looking 
forward certainly to becoming reengaged now at the federal 
level. The events of September 11 have underscored, I think, 
the pivotal role that transportation plays in the nation's 
prosperity and quality of life. Our obligation now is to 
enhance the safety and the security of our transportation 
system in every way possible. At the same time, we must ensure 
that the nation's transportation system emerges from this 
transformation, this crisis, even stronger and more efficient 
than before.
    We need to focus, even as we are focusing on issues of 
airport security and maritime security, and the surface 
transportation field, that we also have to focus again on 
critical transportation issues which perhaps have somewhat 
receded from public attention in the past 3 months. Secretary 
Mineta has often said that nothing has as great an impact on 
economic development patterns of growth and quality of life as 
transportation. We face an urgent need together to ease 
congestion of all modes of transportation, and to improve the 
connections between modes for people and goods. That is, to 
focus on issues of efficiency and reliability, even as we are 
giving renewed and even more urgent attention to questions of 
safety and security.
    In the next 2 years, Congress will be taking up 
reauthorization of the Department's surface transportation and 
air programs, as well as other critical bills affecting 
virtually every mode of transportation, and I look forward to 
supporting the President and the Secretary and to working with 
this Committee and other Members of Congress in addressing 
these vital tasks.
    In the years since I first assumed an executive position in 
the transportation field, I have developed a passion for this 
field, a passion that I am certain you share. I think that we 
all recognize that the ultimate stakeholders in the 
transportation system are the citizens and businesses of 
America who rely on the transportation sector to move people 
and goods safely and efficiently. If confirmed, I pledge all of 
my energy and efforts toward meeting the critical challenges 
which we now face in restoring and restrengthening the nation's 
transportation system, and I look forward to working with you 
and your colleagues in improving and protecting our nation's 
transportation system.
    I know we look forward, both of us now, to responding to 
any of your questions.
    [The prepared statement and biographical information of Mr. 
Frankel follow:]

    Prepared Statement of Emil H. Frankel, Assistant Secretary for 
     Transportation Policy-Designate, Department of Transportation

    Thank you, Mr. Chairman and members of the Committee.
    It is a great privilege to appear before the Committee today. I 
appreciate the Committee's willingness to consider my nomination in the 
midst of so many urgent and critical legislative matters.
    I am honored to be President Bush's nominee for Assistant Secretary 
for Transportation Policy of the Department of Transportation. I 
appreciate the opportunity, which Secretary Mineta has extended to me, 
to assist him in shaping national transportation policy at this 
critical time.
    For over ten years I have been deeply involved in the 
transportation field. For four years I led a state transportation 
agency, as Commissioner of Transportation of Connecticut. In that 
capacity I led a consolidated multi-modal transportation agency, making 
policy and implementing programs for all elements of the state's 
transportation system--for the construction, maintenance and management 
of highways, bridges and arterial roads, for commuter rail and bus 
services, and for commercial and general aviation airports and 
seaports.
    As state transportation commissioner, I never forgot that the 
agency I led was providing some service to every resident and business 
of the state every day and that what we did affected people's daily 
lives and their work. I believe strongly in the need to continue moving 
towards a transportation system that operates seamlessly, and one which 
provides for greater coordination between freight and passenger modes.
    As a result of my experience at the state and local levels, I 
believe that I can bring an important and relevant perspective to the 
development of policy at the federal level, and I hope that I can 
contribute to the goal of a Department of Transportation that speaks 
with one voice, across all modes.
    Since leaving state government, I have remained deeply engaged in 
these issues--as a professional, providing legal and consulting advice 
to public agencies and private organizations engaged in transportation 
services and infrastructure development, and as a teacher of 
transportation policy and public management at the undergraduate and 
graduate school levels.
    The events of September 11 have underscored the pivotal role 
transportation plays in the nation's prosperity and quality of life. 
Our obligation now is to enhance the safety and security of our 
transportation system in every way possible. At the same time, we must 
insure that America's transportation system emerges from this 
transformation even stronger and more efficient than before. Actions 
that the Secretary, the Administration, and Congress have taken in the 
last few weeks demonstrate that DOT's mission must include protecting 
against vulnerability in the transportation system and seeking to 
assure the security of every transportation customer.
    At the same time we must continue to focus on critical 
transportation issues, which have, perhaps, somewhat receded from 
public attention in the past three months. Secretary Mineta has often 
said that nothing has as great an impact on economic development, 
patterns of growth and quality of life as transportation. We face an 
urgent need to ease congestion in all modes of transportation and to 
improve the connections between modes for people and goods. Our 
challenge will be to balance security and safety with efficiency and 
reliability. I am certain that, under Secretary Mineta's leadership, 
those goals will inform my work, as Assistant Secretary for 
Transportation Policy, if I am confirmed.
    In the next two years Congress will take up DOT's surface and air 
program reauthorizations, as well as other critical bills affecting 
virtually all modes of transportation. I look forward to supporting 
President Bush and Secretary Mineta and to working with Members of 
Congress, in addressing these vital tasks and in helping to analyze and 
shape these policies.
    In the years since I first assumed an executive position in the 
transportation field I have developed a passion for this field--a 
passion I am certain that many of you share. I think that we all 
recognize that the ultimate stakeholders in transportation are the 
citizens and businesses of America, who rely on the transportation 
sector to move people and goods safely and efficiently. If confirmed, I 
pledge my energy and commitment to meeting the critical challenges 
facing the nation's transportation system. I look forward to working 
with you in improving and protecting our nation's transportation 
system.
    Thank you for the opportunity to appear before you today, as you 
consider my nomination to be Assistant Secretary of Transportation for 
Transportation Policy. I would be pleased to respond to any questions 
you may have.

                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name: Emil Hiram Frankel.
    2. Position to which nominated: Assistant Secretary for 
Transportation Policy, United States Department of Transportation.
    3. Date of nomination: September 14, 2001.
    4. Address: (Information not released to the public.) Office: Day, 
Berry & Howard LLP, One Canterbury Green Stamford, CT 06901.
    5. Date and place of birth: May 9, 1940, Bridgeport, CT.
    6. Marital status: Married to Kathryn Frankel (maiden name: 
Fletcher), November 24, 1968, in Washington, D.C.
    7. Names and ages of children: None.
    8. Education: Harvard Law School, Cambridge, MA, 1962-1965--LL.B., 
May 1965; Manchester University, Manchester, United Kingdom, 1961-
1962--Fulbright Scholar, no degree; Wesleyan University, Middletown, 
CT, 1957-1961--B.A., May 1961; Andrew Warde High School, Fairfield, CT, 
1956-1957--high school diploma, June 1957; Roger Ludlow High School, 
Fairfield, CT, 1953-1956--no degree/diploma.
    9. Employment record: Of Counsel, Day, Berry & Howard LLP, 
Stamford, CT, 1995-Present; Fellow (part-time faculty), Schools of 
Forestry and Environmental Studies and of Management, Yale University, 
New Haven, CT, 1995-Present; Adjunct Professor, School of Civil and 
Environmental Engineering, University of Connecticut, Storrs, CT, 2000; 
Fellow, John F. Kennedy School of Government, Harvard University, 
Cambridge, MA, 1995; Commissioner, Department of Transportation, State 
of Connecticut, Newington, CT, 1991-1995; President, E.H. Frankel 
Company, Inc., Bridgeport, CT, 1989-1991; Of Counsel, Cohen & Wolf, 
P.C., Bridgeport, CT, 1989-1991; Vice President, The Palmieri Company 
(formerly Victor Palmieri and Company Incorporated), Washington, DC, 
and Los Angeles, CA, 1985-1988; Partner, Cohen & Wolf, P. C., Stamford 
and Bridgeport, CT, 1982-1985; Division Vice President, Victor Palmieri 
and Company Incorporated, New York, NY, Greenwich, CT, and Washington, 
DC, 1975-1982; Visiting Lecturer, Yale University, New Haven, CT, 1972 
and 1973; Associate, Wofsey, Rosen, Kweskin & Kuriansky, Stamford, CT, 
1971-1975; Special Assistant to the Under Secretary, United States 
Department of Housing and Urban Development, Washington, DC, 1970-1971; 
Legislative Assistant to United States Senator Jacob K. Javits (New 
York), Washington, DC, 1967-1970; Special Assistant to the Chairman, 
Connecticut Republican State Committee, Hartford, CT, 1966; Associate, 
Day, Berry & Howard, Hartford, CT, 1965-1966; Assistant Counsel, 
Connecticut Constitutional Convention, Hartford, CT, 1965.
    10. Government experience: Selectman, Town of Weston, CT, 1999-
Present; Member, Board of Finance, Town of Weston, CT, 1989-1999 
(Chairman for five years); Member, Conservation Commission, Town of 
Weston, CT, 1970s; Member, Charter Revision Commission, Town of Weston, 
CT, 1970s; Member, Governor's Council on Economic Competitiveness and 
Technology (Connecticut); Member, Public Infrastructure Subcouncil, 
United States Competitiveness Policy Council; Member, President Bush's 
Transition Team at the United States Department of Housing and Urban 
Development, 1988; Member, President Reagan's Transition Team at the 
United States Department of Housing and Urban Development, 1980; 
Member, Governor Meskill's Task Force on Housing (Connecticut), 1970s.
    11. Business relationships: Trustee, Wesleyan University, 
Middletown, CT, 1981-1984 and 1985-1997 Trustee Emeritus, Wesleyan 
University, Middletown, CT, 1997-Present; See positions held (as 
officer, director, and/or trustee) of various non-profit organizations, 
as described in the answer to Question 12, below; Between 1995 and the 
present I provided consulting services to the following corporations, 
business organizations, and/or public agencies, all of which entities 
were clients of Day, Berry & Howard LLP, the law firm with which I have 
been associated since 1995: New York City Partnership and Chamber of 
Commerce; AMTRAK; Joint Program Office of the United States Department 
of Transportation (as a subcontractor of Parsons Brinckerhoff); 
Delaware Department of Transportation; Massachusetts Port Authority; 
Massachusetts Turnpike Authority and Massachusetts Highway Department 
(as a subcontractor of Commonwealth Capital Partners, Inc.); 
Massachusetts Bay Transportation Authority (as a subcontractor of 
Hamilton, Rabinowitz & Alschuler, Inc.); Connecticut Department of 
Transportation (as a subcontractor to Cambridge Systematics, Inc.); 
Connecticut Department of Economic and Community Development (as a 
subcontractor to Frasca & Associates); Williams Communications, Inc. 
(client of Day, Berry & Howard LLP); and Rock Acquisition LP (client of 
Day, Berry & Howard LLP). All of these consulting relationships have 
been terminated with the exception of the project for the Connecticut 
Department of Transportation (as a subcontractor of Cambridge 
Systematics, Inc.), and representation of Rock Acquisition, L.P., which 
work is on-going.
    12. Memberships: Admitted to Connecticut Bar, 1965; Member, 
Connecticut Bar Association; Member, Stamford, CT, Regional Bar 
Association; Member, Congregation B'Nai Israel, Bridgeport, CT; Member, 
Weston, CT, Kiwanis Club and Director, Weston Kiwanis Foundation, Inc.; 
Director and former President, Intelligent Transportation Society of 
America, Connecticut Chapter; Director, Regional Plan Association 
(RPA), New York, NY, and Member of RPA's Connecticut Committee; 
Trustee, Connecticut Trust for Historic Preservation; Advisor, National 
Trust for Historic Preservation; Director, Surface Transportation 
Policy Project; Trustee, Merritt Parkway Conservancy (a charitable 
trust), and President and Director of Merritt Parkway Conservancy, 
Inc., a Connecticut non-profit corporation.
    13. Political affiliations and activities: (a)Selectman, Town of 
Weston, CT, 1999-Present; Member, Board of Finance, Town of Weston, CT, 
1989-1999 (Chairman for five years); Member, Connecticut State 
Republican Committee, 1979-1985. (b) Member, Weston, CT, Republican 
Town Committee, 2000-Present. (c) Christopher Shays for Congress 
Committee: $100.00 (September, 1994), $135.00(September and October, 
1996), $150.00 (May, 1997), $250.00 (June and September, 1998), $350.00 
(May and October, 2000); Weston Connecticut Republican Town Committee: 
$225.00 (September, 1991), $25.00 (March, 1992), $5000 (August, 1995), 
$105.00 (September and October, 1996), $100.00(September, 1997), 
$500.00 (July and November, 1999); Connecticut Republicans: 
$150.00(May, 1996), $150.00 (March, 1997), $150.00 (May, 1998), 
$250.00(March and April 1999), $200.00(May, 2000), $200.00 (April, 
2001); Weld for Senate: $600.00(May and October, 1996); Bayley Senate 
1998: $500.00(March, 1998); Friends of John Rowland: $500.00(December, 
1997), $250.00(May, 1998), $500.00 (June, 2001); Republican Women's 
WISH List: $50.00(May, 1993), $100.00(March, 1999), $400.00.(March and 
May, 2000); Nielson Congress 1998: $100.00 (August, 1998), $75.00 
(February, 1998); Nielson for Congress: $350.00 (August and September, 
2000); Gov. George Bush Presidential Exploratory Committee: $500.00 
(June, 1999); Victory 2000 for Connecticut: $500.00(June, 2000).
    14. Honors and awards: Honor Award, Conference Planning Committee 
for the Preserving the Historic Road in America; Management Fellow, 
School of Management, and Senior Fellow, School of Forestry and 
Environmental Studies, Yale University, New Haven, CT; Joint Fellow, 
Center for Business and Government and the Taubman Center for State and 
Local Government, John F. Kennedy School of Government, Harvard 
University, Cambridge, MA; Fulbright Scholar, United Kingdom; William 
Day Leonard Award, Wesleyan University, Middletown, CT.
    15. Published writings: See attached.
    16. Speeches: During the past five years I have frequently spoken 
to transportation groups and/or moderated panels before transportation 
organizations. These appearances have largely occurred in Connecticut 
or in other parts of the metropolitan New York City region. My remarks 
have been delivered from notes, and I have not prepared formal speeches 
for these occasions.
    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President? I assume that I was nominated for the 
position of Assistant Secretary for Transportation Policy because of my 
experience and record, as Commissioner of the Connecticut Department of 
Transportation, my involvement in, and leadership of, various national 
and regional organizations engaged in transportation issues (such as 
the American Association of State Highway and Transportation Officials 
and the I-95 Corridor Coalition), my continuing work in the 
transportation field, since I left my position in state government, as 
a teacher of transportation policy and public management at the college 
and graduate school levels, and my ability to reach out to the wide 
variety of stakeholder groups, related to the transportation sector, in 
all my positions over the last several years. (b) What do you believe 
in your background or employment experience affirmatively qualifies you 
for this particular appointment? I have been deeply involved in 
transportation policy issues for more than ten years, as a public 
official (Commissioner of the Connecticut Department of Transportation 
from 1991 to 1995), as a professional, providing legal and consulting 
advice to public agencies and private organizations engaged in 
transportation services and infrastructure development, and as a 
teacher of transportation policy and public management at the college 
and graduate school levels.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? Yes.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. Please refer to the opinion letter of the Acting 
General Counsel.
    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 
opinion letter of the Acting General Counsel.
    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? Commissioner of the 
Connecticut Department of Transportation (ConnDOT) from February 1991 
to January 1995--Except for consulting assignments for ConnDOT, no 
continuing relationships with this public agency. Consulting services 
were provided to the following clients through Day, Berry & Howard LLP 
between 1995 and Present: AMTRAK; Joint Program Office of the United 
States Department of Transportation, as a subcontractor to Parsons 
Brinckerhoff; Delaware Department of Transportation; Massachusetts Port 
Authority; Massachusetts Turnpike Authority; Massachusetts Highway 
Department; Massachusetts Bay Transportation Authority, as a 
subcontractor to Hamilton, Rabinowitz & Alschuler, Inc.; and ConnDOT, 
as a subcontractor to Cambridge Systematics, Inc. (CSI). As of this 
date, all of these professional assignments had been completed with the 
exception of the work for ConnDOT through CSI, which consulting 
assignment is on-going.
    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. During my tenure 
as Commissioner of the Connecticut Department of Transportation 
(ConnDOT) I frequently appeared before the Connecticut General Assembly 
with regard to legislation and public policies, pursuant to my official 
responsibilities. During that time I also spoke with Members of 
Congress (particularly members of the Connecticut Congressional 
Delegation) regarding consideration and enactment of the Intermodal 
Surface Transportation Efficiency Act (ISTEA) and other matters of 
federal legislation, regulation, and public policies which related to 
my official duties as Commissioner of ConnDOT.
    Since 1995 I testified, as a private citizen and not on behalf of a 
client, before a committee of the Connecticut General Assembly, 
regarding transportation financing and the establishment of a 
Transportation Strategy Board for Connecticut. I have represented legal 
clients of Day, Berry & Howard LLP before, and in meetings with, 
ConnDOT, regarding various right-of-way and condemnation issues. As a 
consultant to the New York City Partnership and Chamber of Commerce, I 
was involved in developing strategies for, and providing advice 
regarding, the reauthorization of the federal surface transportation 
legislation in 1996 and 1997. In 1998 DBH provided lobbying services to 
SPX Corporation before the Connecticut General Assembly, regarding 
then-pending bills. For the purpose of that proposed legislation, I 
registered as a lobbyist with the Connecticut Ethics Commission. I am 
not currently registered as a lobbyist and have provided no other 
lobbying services on behalf of DBH clients from 1995 to the present.
    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 opinion letter of the 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 compliant to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any federal, state, or other law enforcement authority for violation of 
any federal, state, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. None.

                     E. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? Yes, to the 
best of my ability.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes, to the best of my ability.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? Yes, to 
the best of my ability.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress. To 
the degree the position of Assistant Secretary for Transportation 
Policy is involved in the review of regulations issued by the 
Department, I will work with the Secretary, the Deputy Secretary, the 
General Counsel, and all of the modal administrations to insure that 
regulations meet the statutory intent of legislation enacted by 
Congress. Within the limits of the Administrative Procedure Act and 
consistent with my responsibilities and authority, as Assistant 
Secretary for Transportation Policy, I will exert my best efforts to 
keep Congress informed about the timetable and substance of proposed 
regulations. Moreover, Secretary Mineta has stated his commitment to 
making the rulemaking process more accountable and efficient, an 
important objective of Members of Congress. I will work closely with 
the Secretary, the Deputy Secretary, and my colleagues at the 
Department of Transportation to achieve this important goal.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives. The Department of 
Transportation's mission is to support safe and efficient 
transportation. The Department's core activities include direct 
assistance, as provided by law, regulatory oversight and enforcement, 
operational safety services, public education, and research.
    The Department of Transportation's current Strategic Plan describes 
five objectives for the Department for the years 2000 to 2005: First, 
the Department will promote health and safety by reducing 
transportation-related injuries and deaths; second, the Department will 
improve mobility by delivering an accessible, affordable and reliable 
transportation system for people and goods; third, the Department will 
support economic growth; fourth, the Department will seek to enhance 
the human and natural environment; and, fifth, the Department will 
insure the security of the nation's transportation system.
    While supporting these strategic objectives, if confirmed, I will 
work with Secretary Mineta, Deputy Secretary Jackson, and my colleagues 
in the modal administrations at the Department of Transportation to 
review these goals, to revise and enhance them, to the degree 
appropriate in light of changing circumstances, and to manage those 
operations and programs of the Department for which I might become 
responsible in support of these objectives.
    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. For 
more than ten years I have been deeply involved in transportation 
issues. This period includes my tenure, as Commissioner of the 
Connecticut Department of Transportation (ConnDOT) from 1991 to 1995, 
and, in the years since I left my state position, as a professional, 
providing consulting and legal services to a range of transportation-
related agencies and private organizations, as a frequent speaker, 
panelist, and moderator on transportation issues, as a teacher of 
transportation policy and public management at Yale University and the 
University of Connecticut, and as a writer on transportation issues and 
the interface between transportation and economic development, 
environmental quality, and community renewal.
    Connecticut is a heavily urbanized state, and ConnDOT is 
responsible for virtually all of the transportation services provided 
to the state's residents and businesses. As the chief executive officer 
of this consolidated agency, I was responsible for an annual budget of 
over $1 billion and for the construction, rehabilitation, maintenance 
and management of a multi-modal transportation systems, including 
highways, bridges and arterial roads, bus and commuter rail services, 
and airports. My consulting services have included advice on almost all 
elements of the transportation system--public transit, airports, 
highways, intelligent transportation systems (ITS), transportation 
management, and institutional reform.
    Thus, I believe that the range of my engagement in transportation 
issues qualifies me for the position of Assistant Secretary for 
Transportation Policy.
    2. Why do you wish to serve in the position for which you have been 
nominated? Since first assuming a role in the transportation sector 
over ten years ago, I have developed a passion for this field, a 
passion which grows out of an understanding of the effect which 
mobility and accessibility have on every aspect of our lives. 
Transportation plays a key role in the economy, in the environment, and 
in community life. With the leadership of the President and of 
Secretary Mineta I welcome the opportunity to contribute to the shaping 
of transportation policy at this time and to play a role in the 
development of transportation policy.
    3. What goals have you established for your first two years in this 
position, if confirmed? Secretary Mineta has pointed out that nothing 
has as great an impact on economic development, patterns of growth, and 
quality of life as transportation. The mission of the Department of 
Transportation emphasizes safety and enhanced mobility. We face an 
urgent need to ease congestion in all modes of transportation and to 
improve the connections between modes both for people and for goods. In 
the next two years Congress will be considering reauthorization of the 
surface transportation legislation (TEA-21). I am confident that the 
Executive and Legislative branches will work together to build on the 
foundations of ISTEA and TEA-21 to assure adequate capital investment 
in our transportation system and to enhance the management of the 
existing system through technological innovation and institutional 
reform.
    Engagement in these issues and participation in their solution are 
the key goals that I have established for my first two years, as 
Assistant Secretary for Transportation Policy, if confirmed.
    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 management experience in the 
transportation field has largely been at the local, state and regional 
levels. Although I have extensive knowledge of national transportation 
issues, I have not had direct or continuing engagement in the 
management of such issues. It will be necessary that I develop the 
information and expert knowledge that I will need to contribute to the 
management and resolution of such national transportation issues and 
the experience to work constructively with Members of Congress in the 
consideration and implementation of transportation and transportation-
related legislation.
    5. Who are the stakeholders in the work of this agency? The 
ultimate stakeholders in the work of the Department of Transportation 
are the people and the businesses of America who rely on the nation's 
transportation system to move people and goods efficiently and safely. 
Public agency stakeholders are the Congress, state and local 
governments, regional and metropolitan area public authorities, and 
other transportation facility governing/managing agencies. In the 
private sector stakeholders include the workers and the companies (and 
the associations which represent them) who build, maintain and operate 
the nation's transportation system and facilities. Finally, 
stakeholders include all those who are engaged in, and concerned about, 
the impact of the nation's transportation system on economic growth and 
international competitiveness, community renewal, public health and 
quality of life, energy utilization, and technological innovation.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question number five? 
Secretary Mineta has emphasized accessibility and accountability, as 
essential values of the Department of Transportation. Consistent with 
that commitment, I would listen to, and work with, the Department's 
various stakeholders, in the development and implementation of the 
agency's policies and in carrying out the responsibilities of the 
position to which I have been nominated, if confirmed.
    7. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls? The 
Department of Transportation has a centralized budgetary office, led by 
the Assistant Secretary for Budget and Programs, who essentially serves 
as the Department's Chief Financial Officer. While the Assistant 
Secretary for Transportation Policy is not directly responsible for the 
operational management of the Department's major programs, to the 
extent appropriate to the responsibilities of this position, at the 
direction of the Secretary and Deputy Secretary, I would work closely 
with the Assistant Secretary for Budget and Programs, the Department's 
Inspector General, and my senior colleagues at the Department, to 
assure the effective implementation of all Department programs. (b) 
What experience do you have in managing a large organization? As noted 
above, from 1991 to 1995 I served as the chief executive, officer of 
the Connecticut Department of Transportation (ConnDOT), a consolidated, 
multi-modal transportation agency with over 4,000 employees and an 
annual budget of over $1 billion. Prior to my service at ConnDOT, for 
approximately ten years I served as a senior executive of The Palmieri 
Company (formerly; Victor Palmieri and Company), a nationally-known 
business reorganization firm. In my capacity as a Palmieri Company 
executive, I was responsible for the management and reorganization of 
large and complicated real estate assets and real estaterelated 
companies.
    8. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals. I support the Government Performance and Results 
Act. This legislation required the Department to establish measurable 
program targets, and it has helped the Department achieve a coherent 
vision. In my own experience as an executive in the public and private 
sectors, I have established goals for myself and for those under my 
supervision and have measured performance against those goals, as 
critical elements in improving operations. I would anticipate that I 
would use this experience in carrying out my management 
responsibilities at the Department of Transportation, 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? The Congress has a right to expect the Department to 
meet its performance objectives. If it fails to do so, there should be 
an examination of the reasons for this failure. While managers should 
be empowered and enabled to carry out programs and should be encouraged 
to introduce innovations in program administration and implementation, 
poor performance must have consequences. These might include the 
elimination, privatization, downsizing or consolidating of departments 
and/or programs. (c) What performance goals do you believe should be 
applicable to your personal performance, if confirmed? If confirmed, I 
would be committed to the Department's strategic goals, and I would 
anticipate that I would be personally engaged in managing the Office of 
Transportation Policy to assure its performance to those objectives. I 
would be responsive to direction from the Secretary in establishing 
priorities.
    9. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you? My management style 
might be described as ``consensual,'' that is, I consult broadly with 
my colleagues, empower employees, and then make decisions, based on the 
information and opinions provided to me. Information is a critical 
element of my management style: I insist on being informed of all 
important programmatic and operational issues, and I believe in 
intervening in a matter before it has become a crisis, if possible. 
Once decisions have been made, I believe in delegating implementation 
to subordinates, but I expect to be kept informed of progress, and I 
hold employees accountable for their performance.
    When I served as the chief executive officer of the Connecticut 
Department of Transportation (ConnDOT), I typically managed by 
``walking around'': I visited every highway maintenance facility and 
every branch office of ConnDOT, and frequently toured the headquarters 
building. I sought to meet with all ConnDOT employees on a regular 
basis, and during these meetings, I asked for their opinions and 
suggestions, and answered their questions about our policies, programs, 
and strategic goals.
    I am not aware of any employee complaints brought against me in any 
of my executive positions, in either the public or the private sectors.
    10. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe. If confirmed to the position to 
which I have been nominated, I would anticipate working closely with 
all Members of Congress. Outside of an appearance before a 
Congressional Committee, in my official capacity as Commissioner of the 
Connecticut Department of Transportation (ConnDOT), in order to testify 
about implementation of ISTEA, and frequent consultations with members 
of the Connecticut Congressional Delegation about matters of federal 
transportation policy and programs during my tenure at ConnDOT, I have 
not had an extensive working relationship with the Congress. However, 
as Commissioner of ConnDOT, I appeared frequently before, and worked 
closely with, members of the Connecticut General Assembly. I am very 
accustomed to establishing close and cooperative working relationships 
with legislators, and I would expect to work in a similar way with 
Members of Congress. Certainly, it would be an important priority for 
me to work closely with Members of Congress and their staffs on a bi-
partisan basis and to support the work of Congressional committees on 
all matters and issues that come before me in the position to which I 
have been nominated.
    11. 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 is a critically important 
position at the Department of Transportation and provides statutorily 
protected independence in evaluating effectiveness and integrity in 
implementation of the Department's programs. I would anticipate a 
respectful and candid working relationship with the Inspector General, 
and I believe that my own performance, as an executive of the 
Department, can and will benefit from the analyses, reports and 
opinions of the Department's Inspector General.
    12. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress. It is the 
responsibility of the Department of Transportation to administer and 
implement the duly enacted laws of the United States in a manner 
consistent with their language and intent. Continuing consultation with 
Congress and with relevant stakeholders can be critically important to 
insuring that the regulations promulgated by the Department are 
consistent with the laws passed by Congress, and broad public 
participation in the Department's rulemaking activity is also vital to 
this process.
    13. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views. Safety and congestion are the critical needs 
facing the nation's transportation system, and it is likely that 
Congress will be considering a wide and varied range of legislative 
proposals to address these issues. As Secretary Mineta has noted, 
congestion affects virtually all elements of the transportation 
infrastructure, and. by impeding mobility and accessibility, congestion 
threatens America's competitiveness, economic growth and productivity, 
and quality of life. Both the Department's safety and congestion 
priorities require addressing the need for additional capacity (which 
is an issue of adequate capital investment) and improved operational 
management of transportation systems and facilities.
    While I have not analyzed all the major policy and management 
issues facing the Department of Transportation, among the specific 
areas which Congress may well consider as legislative priorities are 
the following: Reauthorization of TEA-21 and AIR-21. While neither 
reauthorization will occur for a couple of years, both Congress and the 
Department will be studying implementation of existing laws and 
programs, and considering possible amendments and improvements to the 
current authorizing legislation; ``Streamlining'' of capacity-enhancing 
transportation infrastructure projects; The future of AMTRAK and the 
maintenance of a viable national system of intercity rail passenger 
services; The movement of goods both domestically and in advancing 
national goals in global free trade (including the implementation of 
NAFTA); The role of the transportation sector in meeting the nation's 
energy needs; Improved management of the nation's air and surface 
transportation systems through the continued deployment of the most 
advanced information technologies; and With Congress, the Secretary and 
my colleagues at the Department of Transportation, working to 
strengthen the Department's ability to manage important economic and 
regulatory decision-making.
    14. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a time frame for their 
implementation. I believe that discretionary funds should be allocated 
pursuant to a fair, fixed and understood set of criteria. Although one 
of the largest grant-making agencies in the federal government, the 
Department has a relatively small percentage of funds over which it has 
discretion. Moreover, Congress increasingly earmarks even these funds 
for specific projects. I will support, and will be guided by, national 
priorities established by Congress and articulated by the Secretary in 
the allocation of those funds available to the Department which are 
genuinely discretionary, and, as Assistant Secretary for Transportation 
Policy, I look forward to advising the Secretary, the Deputy Secretary, 
and my colleagues at the Department of Transportation in the 
development of such priorities.
    I understand that the Department's Inspector General has studied 
discretionary programs and that the Committee has held hearings on this 
issue. If confirmed, I will review these reports and hearings, as soon 
as possible, and will personally study the effect of Congressional 
earmarking on the discretionary programs of FHWA, FTA, and FAA.

    Senator Breaux. Thank you both very much, gentlemen, for 
being with us, and thanks for your commitment to come back. I 
know Mr. Shane and Mr. Frankel, you are not doing this for the 
money. Obviously, it is a great sacrifice. I think good people 
for the right job is absolutely critical, and that means 
getting people with experience both in the private sector and 
in the public sector to serve.
    I mean, I want people who know what they are doing. The 
fact that they were doing it in the private sector and are 
willing to come back at great sacrifice as far as I am 
concerned is something that is very positive, and not negative 
at all. I want the best people there, and we are glad you are 
coming back.
    I want to also express the fact that I am the only Senator 
here should not be considered as a bad sign for either of you. 
You ought to consider it a good sign----
    [Laughter.]
    Senator Breaux [continuing]. Because of the fact that if 
you all were controversial, or were less than supported by this 
Committee, every Senator would be here trying to tear you 
apart. The fact that I am doing this on behalf of the Chairman, 
by myself, indicates actually the strong support that you have 
from both sides of the Committee, so it should not be in any 
way seen as a slight, really as positive.
    Mr. Shane, we are going to confirm you very shortly for the 
position of Associate Deputy Secretary, and then I take it we 
are going to come back when we get the legislation from the 
White House to consider creating an Under Secretary for Policy. 
I am sure you have had discussions with Secretary Mineta about 
that. Can you tell me what the difference is going to be? Can 
we just talk about it all at one time?
    Mr. Shane. Thank you, Senator. The position of Associate 
Deputy Secretary has been in the Department for many years. It 
has more recently, sometime after it was originally created it 
was also given the additional title of Director of 
Intermodalism. There have been some superb incumbents in that 
position, but notwithstanding the quality of the people that 
have populated the job, for some reason it has not done the job 
that various Secretaries of Transportation have expected.
    Secretary Mineta is of the view that what is lacking in the 
Office of the Secretary of Transportation is a single, coherent 
focus of policy development. He does not have that right now at 
the appropriate level.
    Senator Breaux. And that focus on policy development is 
across all different venues of transportation and not just 
aviation, but the big picture.
    Mr. Shane. Absolutely, Department-wide. For example, the 
position for which Mr. Frankel has been nominated is entitled, 
Assistant Secretary for Transportation Policy. It is a bit of a 
misnomer, because he has transportation policy except for 
aviation, or except for most of aviation.
    Read Van Der Water, who has already been confirmed in the 
job of Assistant Secretary for Aviation and International 
Affairs, has aviation and a variety of other international 
transport issues, so the transportation policy function right 
now is divided between two Assistant Secretaries.
    Now, you might say, ``OK, well then, if you want a single 
focus of transportation policy, why not combine those two 
jobs''. The answer to that is, that was in fact the status quo, 
and the last job that I had in the Department was those two 
jobs combined, and I have to tell you as the last incumbent in 
that combined position, it did not work. It did not work 
because the line responsibilities that Assistant Secretaries 
have are such that for the most part the aviation and 
international side of the portfolio is simply overwhelmed. What 
I consider to be many of the core issues of the Department of 
Transportation which were there were given short shrift at the 
Assistant Secretary level.
    I think Secretary Mineta came to the same conclusion, and 
it was therefore his view that by elevating this coordination 
function, this policy development function to a notch above the 
Assistant Secretaries, the Associate Deputy Secretaries--not 
above, it is actually below. If you ratcheted it up above the 
Assistant Secretaries, and you have that single focus, the 
incumbent in that Under Secretary position will have the luxury 
of not having to deal with regulatory issues every day of the 
week, the way Ms. Van Der Water will have to do as Assistant 
Secretary for Aviation, programmatic issues that Mr. Frankel 
will have to deal with if he is confirmed, and so forth, and so 
I honestly believe that we can really give life to this 
concept.
    What excites me most about it, if I can just add one final 
thought, is that we have been talking about one DOT for as many 
administrations as I can remember. I have never seen that 
concept actually take hold. I think just by virtue of having 
been there as many times and as many years as I have, I have 
some ideas about how that can be done. I have discussed those 
with the Secretary as recently as a couple of days ago. I am 
really quite confident that we can make the Department of 
Transportation function in a way that it was meant to function 
in the Department of Transportation Act of 1966, and this 
Committee and other Committees of the Congress will be the 
beneficiaries of that more coherent policymaking operation.
    Senator Breaux. Let me hope that when you leave this 
position you will be able to look back and say, it was a better 
place than when I got there. I think that is really a 
challenge.
    Let me talk a little bit about the concept, since it is a 
policy decision that you are in. There are many of us who are 
big believers in the free market and competition. It has become 
increasingly, and perhaps now because of the economics of the 
situation we are in, more and more concerned that in order to 
have competition and free markets, you have to have 
competitors, that you cannot have competition without 
competitors, and more and more it seems to me that more and 
more we have less and less.
    More and more we have fewer railroads, more and more we 
have fewer oil companies, more and more we have fewer airlines, 
more and more we have fewer and fewer telephone companies, and 
it is sort of something that is permeating throughout society.
    There is a great deal of activity and consolidation and 
mergers and what-have-you, and if we end up with two railroads 
in this country, or two airlines in this country, how are we 
going to have real competition, and if you do not have 
competition, the alternative is, government regulates. If we 
only have one railroad, we are going to regulate where they go, 
what they charge, and who they serve. The same thing with 
airlines. The same thing with, you name the industry, and so 
competition is an essential ingredient, and you must have 
competitors in order to have competition.
    Can you just give me some of your philosophy about the 
things that are happening out there, and what your 
recommendations might be?
    Mr. Shane. Yes. Well, first of all, the one thing I would 
say in response to your statement is, Amen. I share that 
concern. I think there are some worrisome developments in a 
variety of modes of transportation that do bear close watching. 
I was pleased to see the Surface Transportation Board put a 
moratorium on mergers in rail in order to take a good, hard 
look at what is really happening in the rail sector.
    The aviation sector is, I think, complicated right now. 
Obviously the airline industry is in the tank for all the 
reasons that we know even prior to 9/11 and certainly 
subsequent to that. The Congress has jumped in very quickly, 
and I must say very adroitly, in order to stave off what could 
have been a real catastrophe in the air transport sector, but I 
can tell you that from my experience in the private sector over 
the past 8 years, and particularly in the past couple of years, 
I would not write off the prospects for new entry in the 
airline industry.
    I am not here to make any promises, but there are some very 
interesting developments out there right now. Venture 
capitalists are beginning to look very hard at some models that 
have really worked, I think, for a long time. I used to come in 
past incarnations at the Department of Transportation and 
testify about how much competition we had in the airline 
industry, and I will always cite Southwest Airlines. Southwest 
Airlines was a savior of executive branch policymakers in the 
aviation field, because it was bringing some competition to a 
market that otherwise might have been too concentrated in some 
places.
    Now you are beginning to see replications of the Southwest 
experience coming in different forms, but a whole variety of 
data points I would say that investment bankers look for when 
they advise possible new entrants as to whether this is a 
business to get into, and so I am naturally encouraged. It is a 
little hard to see it through the fog of this awful environment 
we are living in right now, but I am encouraged about the 
prospects for new entrants into the airline industry, and I 
would not jump to any conclusions about what the federal 
government needed to do beyond that which it is proposing to 
do, which it is doing now pursuant to the airline stabilization 
legislation that was just passed.
    When we began the first Bush administration, we did a 
comprehensive study of competition in the domestic aviation 
industry. I do not think there has been as comprehensive a 
study of competition in that industry since, and it may well be 
that if, depending upon developments--I mean, we have not 
formed any judgment right now as to whether we are about to do 
another study, but depending upon developments there might well 
be a basis for going back in and replicating that study, seeing 
what the data showed today, similarly in shipping.
    I think that competition, as you say, is critical to our 
economic well-being and the Department of Transportation, 
working with the Department of Justice, has a solemn obligation 
to ensure that we continue to enjoy the benefits of it.
    Senator Breaux. I know that, and thank you.
    Mr. Frankel, your areas are going to deal with some of the 
regulatory issues, as I understand it, is that correct?
    Mr. Frankel. Principally, Mr. Chairman, in the surface 
transportation area.
    Senator Breaux. Let us talk about the trucking industry, 
and the carrying of hazardous waste. We have been in this area 
of trying to make sure that people who drive trucks that carry 
hazardous materials are qualified in order to do that, and 
Congress has been involved in the Patriot Act and requiring 
background checks to be performed on all commercial drivers, 
and there is a debate about who is going to do that, whether 
the industry is going to do it, or whether the government is 
going to do it, or whether we are going to have a combination 
of some form to be able to do it.
    I suggested, maybe naively, but it seems like it made a lot 
of sense, that we now require background checks for the 
purchase of firearms in this country, and we get those 
background checks done in 24 hours so somebody can buy or not 
buy a hand gun, which I imagine is done through some type of a 
computer system. I am just wondering, why can we not use that 
same type of computer information on people who have criminal 
records, and extract that information for the purpose of 
determining whether they should have a commercial license to be 
able to transport hazardous material.
    Can you give me your thinking, and what your 
recommendations would be on how we are going to resolve the 
question on how we can as quickly and fairly as we can get 
criminal background checks on people that are applying for 
these licenses?
    Mr. Frankel. Well, I know, Senator, that this has been an 
area to which Congress and this Committee in particular has 
turned its attention with great urgency, particularly sine 
September 11. Of course, the question of hazardous waste--
hazardous materials, excuse me, movements is something which 
has several different parts, as you all know. The operating 
agencies, the operating administrations in the Department are 
involved, and indeed, the policy office, the Office of 
Intermodalism, has been involved in trying for the last 2 years 
in trying to coordinate this effort to deal with what public 
policy and national policy should be with regard to the 
movement of hazardous materials, the licensing.
    I think we have taken some important first steps with the 
Patriot Act. I know that this Committee, Senator Hollings, 
yourself and your colleagues have also taken the initiative in 
trying to clarify and make clearer the implementation of that 
act.
    Senator Breaux. Well, I take it on that point that the 
administration is now of the opinion that that act is not 
necessary. Is that your understanding of what you are hearing 
down there?
    Mr. Frankel. I cannot really speak to that, Mr. Chairman 
with specificity. I do know that the Secretary certainly is 
committed to the implementation and the clarification of the 
terms and requirements of the Patriot Act with regard to the 
licensing of those who would move hazardous materials.
    Senator Breaux. We had some technical corrections which I 
think they are saying it is not really necessary now, that I 
think some of us felt that it would be helpful to have it 
spelled out in legislation, and you need to take a look to see. 
We are not trying to pass legislation just to pass it, but I 
think if it is needed, and it is necessary, we want you all to 
take a look at it.
    Mr. Frankel. We will do that, sir.
    Senator Breaux. You would have railroads under your 
jurisdiction?
    Mr. Frankel. Yes, in terms of policy, and obviously, in 
working with the Secretary and the Deputy Secretary, and hope-
to-be Under Secretary in FRA. We have major fundamental issues, 
obviously, before us with regard to railroads.
    Senator Breaux. I was pleased to see that Mr. Shane 
supports no more rail mergers at the present time. I think that 
is correct. Can either of you give some indication of what we 
can do as an administration and as a Congress concerning the 
financial status of Amtrak? It is almost a regional issue, and 
yet it really is not.
    We have got the legislation requiring that they liquidate 
if they do not operate in the black. That is not going to 
happen. I mean, what do we need to do to assure the traveling 
public who uses rail transportation as a means of moving around 
the country that we are going to invest in this system?
    I mean, if you look at what--and we always hear the stories 
about what Japan and what Europe has done to emphasize rail as 
a transportation of people. The systems are generally much 
better supported, and there is a lot reasons, because of 
geography and the size of the countries, of course, but I 
hesitate to think what would happen to the Northeast Corridor 
with aviation if we did not have Amtrak. I mean, we would have 
an overload of those airports, and we would never be able to 
move.
    I support it, but what can you tell the Congress, and 
perhaps in general right now, that we need to be doing to 
reassure this country that we are going to have an Amtrak 
system that is going to be available?
    Mr. Frankel. Well, Mr. Chairman, I have obviously dealt 
with Amtrak a good deal as Commissioner of a state in the 
Northeast through which Amtrak passes, indeed, one of the few 
states that actually owns a significant portion of the right-
of-way which Amtrak uses. I became quite familiar with both the 
opportunities, the possibilities, the importance of intercity 
passenger rail, and also what some of the obstacles and burdens 
are.
    There are obviously--you know better than anyone that there 
are no easy answers here. If we had them, I am sure we would 
have a more clearly financially appropriate program. From the 
beginning, Amtrak has obviously had two oftentimes conflicting 
missions, that is, to be financially viable, if not profitable, 
as well as to run, maintain, operate a national passenger 
service.
    I think in the crisis that we have, including the events, 
as you said, Mr. Chairman, of September 11, and the aftermath, 
and recognizing the importance of inner city passenger rail in 
crowded corridors, including, but not limited to the Northeast 
Corridor, and now the statement, the finding, if you will, by 
the ARC of dealing with the financial viability of Amtrak, I 
think this is a moment of opportunity.
    You all have Amtrak reauthorization to deal with next year. 
The Secretary and the Department are committed to working with 
the Congress early in the next year in trying to develop some 
fundamental solutions to the provision of intercity passenger 
rail. I think the one thing that I have noticed is, it may not 
be unanimous, but I think there is a broad common interest and 
commitment to viable, effective, efficient intercity passenger 
rail, and now I think we have to together deal with the 
fundamentals of that.
    Senator Breaux. Mr. Shane, as a policy forecaster, perhaps, 
in the Department can you share some thoughts on that? I guess 
I have the conclusion that we ought to quit trying to make 
Amtrak operate at a profit. Make them operate efficiently, but 
recognize that a transportation system in crowded corridors 
using the rail is in the national interest, and we are going to 
have to quit worrying about whether it can only exist if it 
makes a profit.
    I think it is in the national interest to have that there, 
because it also helps other sectors, other transportation 
sectors immensely. What are your thoughts? Is this something we 
need to do in the national interest? Do we have to recognize we 
are going to have to spend some money on it, or do we take the 
position that if they cannot make it, we will shut them down?
    There are some Members of Congress who say, look, you have 
got so many passengers. If your trains are running full, we 
will operate at a profit, and if you cannot operate at a 
profit, we do not need you, or you should not be there. What 
are your thoughts on that?
    Mr. Shane. Senator, I would be fooling myself and anybody 
else if I sat here and pretended that I had the right answer to 
the Amtrak dilemma. I think I actually have the somewhat 
dubious distinction of having been a lawyer on the little task 
force that was set up in the early seventies to create Amtrak, 
and so I have a long history with Amtrak, none of which I can 
take any real credit for.
    The fact is that Amtrak does not seem to be viable in its 
current form. Just throwing money in the kinds of amounts that 
we are used to seeing at Amtrak will not make it more viable. 
It will have to be in order to proceed on that basis a sea 
change in the administration's and the Congress' attitude 
toward Amtrak, and it is hard for me to see that that is going 
to be the solution, so I look at the issue as the issue of 
intercity rail transportation generally. What are we going to 
do to assure we have a viable intercity rail transportation 
system in this country?
    I do not know whether Amtrak is a solution to that. I do 
know it is an issue that we cannot not face up to very 
seriously in the next few months. I am hoping that because of 
the crisis which has ben created by the ARC decision, we are 
all waiting for the plan that will emerge, I guess, in 90 days 
from November 9, I think it was. As a result of that, our minds 
are going to be concentrated wonderfully on what we are going 
to do about rail transport in this country. You are absolutely 
right, it cannot be sort of written off. It is an essential 
component of our transportation system, and all I can tell you 
is that I commit myself, and I know Mr. Frankel commits himself 
to making sure that we address it with all available energy and 
creativity.
    I do not know whether Amtrak will be part of the solution 
when we finally find the solution. If we could address this 
issue successfully, Mr. Chairman, I think it would probably be 
the most important thing we did in the transport sector in 
years.
    Senator Breaux. I am not trying to pin you down, but maybe 
if you could elaborate, I mean, just from a philosophy type of 
standpoint, do you think that Amtrak should only exist if it 
could make its way financially, or would you be put into the 
category that, let us say it is in the national interest, and 
you are going to have a financial commitment of some sort to 
assist it to provide the service?
    Mr. Shane. Well, the country, I mean, by default has pretty 
much taken the view that it is in the national interest, and we 
continue to finance it, notwithstanding the fact that it is not 
and has not been ever financially viable, so in that sense 
there is sort of a policy in place right now, but it is a 
policy by default.
    I honestly do not know--after looking at the numbers, and I 
cannot pretend to have studied Amtrak nearly as much as a lot 
of other people have, so I really do not want to pretend to be 
an expert on the subject. I do not know if, after I have taken 
a look at all of that, I would conclude that we should simply 
treat Amtrak as something that we should subsidize forever and 
continue to operate in the way that it has been operated.
    Senator Breaux. I should know, but I do not think I do, but 
I would imagine that other countries that have successful rail 
transportation systems, they are probably not money- making 
operations, whether it is in Europe or in Asia or Japan. I 
would imagine that those countries have a financial commitment 
to keep those passenger transportation systems in place of some 
sort.
    Mr. Shane. That is right. They have taken a very different 
policy decision, I think, with respect to rail transport, and 
by and large we are talking about countries that have different 
population densities, different demographics than much of our 
country, and so it is difficult to say whether comparisons with 
Europe, for example, or with Japan are apposite in trying to 
address the Amtrak problem, but those are the kinds of 
questions we really do need to address.
    I am not trying to be cute. Please understand, I think this 
is one of the most serious transportation policy issues that is 
confronting the Department of Transportation right now.
    Senator Breaux. It is not an easy answer. If you make the 
decision that a rail transportation system is in the national 
interest and it cannot make a go of it financially so we are 
going to have to assist it and subsidize it, could you not say 
the same thing for the aviation industry?
    I mean, there is not an airline out there right now, but 
maybe one, that is probably showing a profit, so eventually, 
when you do not show a profit, you cease to exist in a free 
market. Therefore, an aviation system is in our national 
interest, so we are going to subsidize passengers on all of the 
airlines to make sure they do not go away, and then you can 
extrapolate that to everything that you think is in the 
national interest and move away from a free market society. It 
is not an easy question.
    Well, I think if we do have some additional questions to 
both of you gentlemen, I think we will submit them and ask that 
you respond. After that is completed, I would hope the Chairman 
would try to process this out of the Committee as quickly as 
possible and hope we can get it done perhaps before we leave, 
because the question is, nobody knows when we are going to 
leave. We may have a lot of time.
    [Laughter.]
    Senator Breaux. Mr. Frankel, I hope you got rid of that 
Enron stock.
    [Laughter.]
    Mr. Frankel. Too late, Mr. Chairman.
    [Laughter.]
    Senator Breaux. Well, we appreciate both of you spending 
time with us. I think you are uniquely qualified, and thank you 
for agreeing to serve, and with that, the hearing will be 
adjourned.
    [Whereupon, at 3:25 p.m., the hearing adjourned.]

                                APPENDIX

  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                            to Jeffrey Shane

    Question 1. The Committee will act on your nomination to become the 
Associate Deputy Secretary. I know that we will attempt to create a new 
position for you, an Under Secretary for Policy and that we will need 
to go through an abbreviated process to confirm you for that position 
at a later time. You have already served as the Assistant Secretary for 
Policy at the Department and thus have much experience with how DOT 
functions. Can you explain, for the record, your view of how the new 
position will function and the benefits?
    Answer. Because the old position of Assistant Secretary for Policy 
and International Affairs was split into two new positions in 1993, 
surface and intermodal issues now enjoy the undivided attention of one 
assistant secretary while another assistant secretary is devoted full-
time to aviation and other international issues.
    This change produced important improvements over the previous 
structure, which had become unwieldy and ineffective. Still, the day-
to-day regulatory, administrative, and project-specific decisions that 
have to be addressed at the assistant secretary level leave little time 
for the forward-looking, intermodal policy development process that 
Congress foresaw when it wrote the Department of Transportation Act in 
1966, and that Secretary Mineta wants to achieve through his proposed 
reorganization.
    As contemplated in Secretary Mineta's proposal, a new Under 
Secretary for Policy would have Department-wide scope and serve as the 
Secretary's principal policy advisor. The Under Secretary would serve 
as the main focal point for formulating new initiatives, developing the 
Department's views on pending program reauthorizations and other key 
legislative proposals, advising the Secretary on major regulatory and 
policy decisions, and brokering an on-going policy development effort 
that draws continually and cooperatively on the Department's operating 
administrations.
    The Secretary's proposal would not do any violence to the 
Department's structure. The Assistant Secretaries for Transportation 
and for Aviation and International Affairs would remain in place, 
reporting to the Under Secretary. Also, because the present position of 
Associate Deputy Secretary would be abolished upon the creation of the 
new Under Secretary position, the proposed restructuring would not 
expand the Office of the Secretary. Rather, the change would facilitate 
a drawing together of the Department's vast resources in a way that 
will enable us--in close cooperation with the Congress--to develop and 
manage a truly creative, forward-looking, and integrated responses to 
our nation's transportation requirements. It is a structure, we 
believe, that will enhance the Department's ability to do business with 
its authorizing and appropriating committees, and vice versa.

                                AVIATION

    Question 1. With the faltering economy and the events of 9-11, the 
airline industry is facing an enormous challenge. DOT will be 
confronted with a different industry in 6 months--perhaps with less 
airlines, less low cost air carriers, and thousands unemployed. What 
concerns do you have if we do see failures or consolidations, leaving 
us with less participants in the market?
    Answer. The terrorist attacks of September 11th had a profound 
effect on the financial position of the airline industry. DOT has 
disbursed nearly $4 billion of the $5 billion in compensation to 
airlines made available by the Air Transportation Safety and System 
Stabilization Act. In addition, America West was granted a loan 
guarantee in accordance with procedures established by the Act. 
Anecdotal evidence suggests that quick action under the Stabilization 
Act has had the intended effect of stabilizing the industry and 
restoring the confidence of the financial markets in the airline 
industry.
    Although the future of the industry is still precarious, the 
financial condition of most carriers is improving. It seems premature, 
therefore, to speculate that the terrorist attacks have forever changed 
the fundamental structure of the airline industry. The spirit behind 
the Air Transportation Safety, and System Stabilization Act was and is 
exactly right: to preserve the existing competitive structure in the 
airline industry by compensating airlines for their incremental losses 
due to the terrorist attacks, and to allow the market to seek its own 
equilibrium thereafter.
    The Department will continue to monitor developments in the airline 
industry closely. Our primary goal must be to continue to work toward 
the stabilization of the industry and thereby to preserve competition. 
We remain committed to ensuring an environment that promotes 
competition and provides consumers with the price and service benefits 
that competition brings.
    Question 2. The House has introduced legislation to provide direct 
support and loan guarantees for general aviation. Does the 
Administration support this legislation?
    Answer. The Administration has not yet taken a position on H.R. 
3347 (or on a similar bill introduced in the Senate, S. 1552). The 
general aviation industry is a critical element of the U.S. aviation 
sector, and it is important to focus on the prospects for a revival in 
this sector of the economy. As you know, the President has just 
transmitted his FY2003 Budget Request. It represents a comprehensive 
and balanced approach to reviving the economy and addressing the 
consequences of the attacks of September 11. I would expect that the 
Administration's position on this bill, and other bills that take an 
industry-by-industry approach to these questions, will be developed as 
a part of the overall budgetary and appropriations process in this 
session of Congress.
    Question 3. DOT has been asked repeatedly to review and revise its 
CRS rules governing travel distribution. The world of travel 
distribution has changed substantially since the rules were last 
revised. Carriers have cut fees to travel agents, new companies have 
been created to provide services, companies once subject to the rules 
may no longer fall under the rules, and yet the rules remain unchanged. 
When can we expect that DOT will revise its CRS rules?
    Answer. The Secretary fully recognizes the importance of completing 
the CRS rulemaking. He has instructed the staff to move forward on the 
rulemaking and develop a rulemaking proposal that can be forwarded to 
OMB. We expect the Department to submit a proposal to OMB within a few 
months. I intend to ensure that the staff promptly carries out the 
Secretary's directions.
    Question 4. The Committee favorably reported S. 415, legislation 
designed to provide an ability for carriers to enter fortress hubs. 
While the downturn and 9-11 have changed much, what are your views on 
how best to ensure that we have competitive access to major airports 
around the country?
    Answer. To increase airline competition, we should seek to reduce 
anticompetitive barriers to entry--barriers that either prevent or make 
it more difficult or costly for air carriers to enter a market or 
expand operations once they begin serving a community.
    Airport managers, as outlined in an October 1999 DOT study (Airport 
Business Practices and Their Impact on Airline Competition), have a 
legal obligation to ensure that all air carriers have reasonable access 
to essential airport facilities. Under AIR-21, certain large- and 
medium-hub airports--those airports served primarily by one or two 
dominant carriers--must submit to DOT airport competition plans in 
order for the FAA to approve the collection of a new Passenger Facility 
Charge (PFC) or for a grant to be issued under the Airport Improvement 
Program (AIP).
    A competition plan must include information on the availability of 
airport gates and related facilities, leasing and subleasing 
arrangements, gate-use requirements, patterns of air service, gate 
assignment policy financial constraints, airport controls over air- and 
ground-side capacity, whether the airport intends to build or acquire 
gates that would be used as common facilities, and airfare levels (as 
compiled by DOT) compared to other large airports.
    I understand that FAA and OST staff devoted a considerable amount 
of time to reviewing fiscal year 2001 airport competition plans and 
offered suggestions for what actions airport officials could take to 
reduce entry barriers. The ongoing review of fiscal year 2002 plans is 
focusing on actions taken in response to these suggestions, 
particularly as they relate to gate utilization and monitoring, 
subleasing practices and notification to all carriers of gate 
availability and gate assignment policies. Clearly, a careful review of 
airport competition plans is and should remain an important policy tool 
for increasing airline competition.
    Question 5. I know that you have been extremely involved in the 
security issues, and I will not ask you to divulge classified 
information or go into details about implementation of the Aviation and 
Transportation Security Act. How quickly do you anticipate that the 
President will nominate the Under Secretary for Security? With respect 
to National Airport, the press reported that the Secretary would be 
spending $2 million for additional security measures. Can you generally 
explain how the money will be expended?
    Answer. The $2 million dollars have been allocated for a 
demonstration project to investigate technology for 100 percent 
positive passenger bag matching at Reagan Washington National Airport. 
New technology concepts, such as automated barcodes, radio-frequency 
(RF) tags, and other baggage reconciliation procedures will be 
evaluated and selected based on effectiveness and availability. 
Separately, I know that the Secretary is gratified by the speed with 
which your Committee and the Senate has acted to confirm John Magaw as 
the Under Secretary of Transportation for Security.

                                SECURITY

    Question 1. Security in the transportation system is only as strong 
as its weakest link. If we focus all of our resources on the security 
of the aviation system but neglect the other modes of transportation 
are we doing a disservice to the American public?
    Clearly there are a number of vulnerabilities throughout the 
transportation system. Although the highways are publicly owned, there 
is virtually no security on the highways, other than the enforcement of 
highway laws. There is very little security on either the freight or 
passenger rail systems or throughout the vast maritime system. While 
the Commerce Committee has approved legislation addressing both 
maritime and rail security, it concerns me that there are generally no 
recognized standards and very little attention is being focused on 
security modes other than aviation. Can you discuss what you will do to 
bring these issues in the greater focus at the Department and within 
the Administration?
    Answer. The Department believes the security of the entire 
transportation system is of paramount importance. While the aviation 
system has received much of the public's attention, the Administration, 
the Secretary and the Department have been looking at the security of 
our transportation facilities in a more comprehensive way.
    Immediately following the September 11th attacks, the Secretary--
concerned about the very issues mentioned in your question--established 
the National Infrastructure Security Committee (NISC) to evaluate 
security issues and recommendations in all surface modes of 
transportation. Six ``Direct Action Groups'' (DAGs) were formed under 
the NISC to consider transportation security matters related 
specifically to particular security issues as they arise in particular 
modes of transportation (maritime, motor carrier, pipeline, railroad, 
transit, and hazardous materials transportation). The DAGs are 
comprised of personnel from Office of the Secretary of Transportation 
and from the Department's various modal administrations.
    The Department has also created: A Transportation Information 
Operations Center--a ``24/7'' communications facility, to be fully 
operational by April 1, 2002, that will improve the flow of information 
between the Department and the transportation industry; A Credentialing 
Direct Action Group--exploring the ``smart'' credentialing of all 
transportation workers and persons with access to secure transportation 
facilities; A Container Working Group--an interagency working group 
that includes the Departments of Agriculture, Commerce, Defense, 
Energy, Health and Human Services. Transportation, and the Treasury. 
The group is tasked with improving the security of containers that flow 
through the nation's intermodal transportation system.
    Representatives from across the transportation industry have been 
meeting with the DAGs on a regular basis. In turn, the DAGs have been 
working aggressively to (i) identify shortcomings in current security 
measures, (ii) formulate recommendations (including suggested 
legislative and regulatory changes), (iii) establish standards, and 
(iv) engender more effective company and government security 
preparedness.
    As one early product of this effort, the DAG on maritime 
transportation prepared recommendations and technical assistance for 
the Department's position on the ``Port Maritime and Rail Security Act 
of 2001'' (S. 1214).

                                  RAIL

    Question 1. Does the Administration intend to submit rail safety 
legislation next year?
    Answer. I am told the Administration does expect to submit a rail 
safety reauthorization bill to Congress for its consideration this 
session.

                                 AMTRAK

    Question 1. There is major concern over the current financial state 
of Amtrak given the recent finding of the Amtrak Reform Council which 
has required Amtrak to prepare a plan detailing their own liquidation. 
While it is generally agreed that Amtrak will not be liquidated, the 
current process has created a great deal of uncertainty within the 
financial markets. What is the Administration doing to reassure Amtrak, 
their creditors and passengers that Amtrak service will continue 
uninterrupted at this time?
    It has been said recently that the Administration plans to send up 
reauthorization plans for Amtrak early next year. Can you please 
comment on the successes and the failures of the current passenger 
railroad system and any changes that you think might create a more 
stable, better funded system which can serve a larger number of 
passengers?
    Answer. I strongly believe that the Administration and the Congress 
need to work together sooner rather than later to craft a consensus on 
the national policy toward intercity rail passenger service. While the 
spotlight is on Amtrak's financial challenges, we must not lose sight 
of the fact that this is a transportation mode that has the potential 
to play a much more important role in providing the intercity passenger 
mobility that this nation needs. I have no doubt that Amtrak will be 
kept up and running while the debate over this policy takes place and 
through any transition to a new paradigm of for intercity rail 
passenger service.
    With regard to Amtrak's experience to date, the success that is 
most readily apparent to all is the important role Amtrak plays in the 
Northeast Corridor transportation market, where it carries a majority 
of the combined air/rail market between Washington and New York City 
and a growing percentage between New York City and Boston. The less 
obvious successes have been the way intercity rail passenger service 
has been embraced by several states as major components of their 
transportation plans and how these states have financially supported 
intercity passenger rail service even in the absence of a strong 
federal partner.
    I believe that the two essential prerequisites to a more stable and 
reliable passenger rail system are (1) a clearly stated federal policy 
with regard to passenger rail service, and (2) a much larger role for 
the states.

                                MARITIME

    Question 1. President Bush has expressed strong support for the 
Jones Act, support that has been reiterated by Secretary Mineta and 
other members of the Administration. Do you support the President's 
position on maritime cabotage?
    Answer. Yes. The maritime cabotage restriction has been an element 
of U.S. transportation policy for many years, and I am well aware of 
the President's support for it.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                            to Emil Frankel

                                TRUCKING

    Question 1. As you know, the issue of Mexican trucks operating 
beyond the commercial zones on the U.S.-Mexican border has been the 
focus of a lot of attention in recent months. While I am pleased that 
the appropriators reached a compromise on this issue, I have concerns 
about the lack of coordination on this issue and the amount of 
information available about Mexican trucks. Can you please discuss the 
state of readiness on both sides of the border and when you believe the 
border can be opened to cross border traffic?
    How will the requirements contained in the fiscal year 2002 
Transportation Appropriations bill be complied with?
    Answer. The fiscal year 2002 DOT Appropriations Act established a 
variety of requirements for the Department to meet prior to opening the 
southern border to meet prior to opening the USMexican border, 
consistent with the requirements of the NAFTA.
    The Department and the four southern border states are working 
cooperatively to implement the provisions contained in the 
Appropriations Act. These include the placement of vehicle weighing 
scales at each crossing; placing ten Weigh in Motion scales at the ten 
busiest crossings; deploying 214 additional federal enforcement 
personnel at the border; providing $18 million for additional state 
border enforcement personnel; establishing permanent inspection 
stations at major crossings; and issuing comprehensive safety rules to 
assess the safety of Mexican carriers before they are allowed to 
operate in the United States.
    The Mexican government has made great progress in improving their 
safety information management systems, including developing a drivers 
license data base with some 88,000 drivers to date and establishing a 
carrier based system with some 100,000 carriers operating 500,000 
vehicles. In addition, Mexico is conducting vehicle and driver 
inspections. The US and Mexico have agreed to provide access to these 
data bases by U.S. and state inspectors.
    High-level delegations from both countries are meeting on a regular 
basis to discuss issues, exchange information and solve issues 
cooperatively to assure the attainment and maintenance of the highest 
levels of operational safety in cross-border operations.
    Question 2. The USA PATRIOT Act of 2001 required background checks 
to be performed on all drivers of commercial vehicles carrying 
hazardous materials. S. 1750, which I introduced last week along with 
other members of the Commerce Committee, provided technical corrections 
to section 1012 of the USA PATRIOT Act following extensive 
consultations with the DOT. I understand that within the last week, the 
Department has reached the conclusion that a legislative fix is not 
necessary. Can you please discuss why it would not be helpful for the 
Congress to approve S. 1750 providing the technical corrections that 
DOT previously requested?
    Answer. We understand that the Department is developing an interim 
final rule to implement section 1012 of the USA Patriot Act. The rule 
in development will be comprehensive and not only implement Section 
1012 but also address the clarifying requirements, as proposed in S. 
1750. We look forward to working with the Committee in ensuring that 
all necessary steps are taken, by legislation and/or by rulemaking, to 
ensure that the purposes of the Act are carried out.

                               PIPELINES

    Question 1. The Senate has approved pipeline safety reauthorization 
legislation in each of the last 2 years. This bipartisan legislation 
has been passed overwhelmingly by the Senate and has included the input 
of the Administration in addition to other interested parties. The 
House has not acted on any pipeline safety legislation even though 
there have been much publicized accidents resulting in multiple 
fatalities in both the liquid and the gas industries in recent years. 
How will you work to advance pipeline safety priorities either through 
the legislative process or the regulatory process?
    Answer. I understand the Administration is fully committed to 
passage of pipeline safety legislation and if confirmed, I would hope 
to make that a high priority for my office. In addition to supporting 
the pending legislation, the Department had made considerable progress 
in addressing issues of pipeline safety, and remains committed to 
continuing it efforts in that regard. The Department's actions include 
the following: We have now begun inspections to enforce hazardous 
liquid pipeline integrity management rules; In January 2002, the 
Department issued a notice of proposed rulemaking to define the areas 
where gas integrity management will apply; During 2001, the Department 
improved its accident reporting requirements for hazardous liquid and 
gas transmission pipelines. The Department lowered the reporting 
threshold for spills from 50 barrels to 5 gallons; In December 2001, 
the Department issued a final rule updating corrosion control 
requirements for hazardous liquid pipelines; The Department's Research 
and Special Programs Administration is working with states to enforce 
more comprehensive requirements to assure that pipeline employees 
performing safety duties are qualified; The Department improved its 
pipeline safety enforcement program, to commit more resources to this 
effort; There are new guidelines for state participation in interstate 
pipelines oversight; There is a new comprehensive multi-year plan for 
research and development of pipeline safety technologies. This was 
developed in connection with the Departments of Energy and Interior.

                               RAILROADS

    Question 1. Railroad safety programs expired in 1998 and 
reauthorization of these important programs is long overdue. What are 
the major safety concerns facing freight and passenger rail?
    Answer. Highway-rail grade crossing collisions and accidents 
involving trespassers and pedestrians along railroad rights-of-way 
account for 95 percent of all railroad-related fatalities. Grade 
crossing safety and trespasser prevention programs remain essential to 
the Federal Railroad Administration's (FRA) rail safety program. Track 
problems have recently become the leading cause of train accidents, 
accounting for more than one-third of all such accidents. Railroads 
have scaled back investment in track rehabilitation, and axle loadings 
have increased as the rail industry continues to introduce heavier 
freight cars. The result is accelerated deterioration of the track 
structure. FRA is intensifying its track inspection program to drive 
down track-caused accidents. Human factors are also a significant cause 
of train accidents, accounting for slightly less than one-third of 
total train accidents. FRA is promoting improved training of railroad 
workers, the adoption of fatigue mitigation programs, and increased 
safety oversight by railroad managers as necessary steps to reduce 
human factor caused accidents.

                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                            to Emil Frankel

                        SURFACE/MERCHANT MARINE

    Question 1a. As you may be aware, last month the Amtrak Reform 
Council (ARC) voted 6:5 making a ``finding'' that Amtrak will not meet 
its statutory requirement of operational self-sufficiency by next 
year's deadline (December 2, 2003). Have you had an opportunity to 
review Amtrak's financial and operating performance?
    Answer. While I have not reviewed Amtrak's financial and operating 
results in detail, I am, of course, aware of the very difficult 
financial circumstances, which the company faces. Costs have increased, 
and are continuing to increase, more rapidly than revenues, and the 
capital needs of Amtrak are significant.
    Question 1b. Given the Secretary's membership role on both the ARC 
and the Amtrak Reform Board, does the Administration intend to submit a 
rail passenger restructuring proposal or some type of proposal to 
address Amtrak's severe financial situation, and if so, when?
    Answer. It is my understanding that the Department of 
Transportation is working to develop a comprehensive policy and set of 
recommendations, relating to the future of inter-city passenger rail. 
The Secretary's goal, I believe, is to have these policy proposals 
ready for submission to Congress early next year, when the President 
presents his FY 2003 budget. If confirmed, I hope to be involved in the 
development of this policy, and I look forward to working with Congress 
in shaping a legislative package, which will address these issues.
    Question 2. Earlier this week, the Senate approved, without my 
support, H.R. 2299, the DOT Appropriations Bill for fiscal year 2002. 
That bill was an egregious overreach by the Appropriators in 
redirecting the programmatic expenditures and directives under the laws 
developed by the Authorizing Committees. There were more than $4.1 
billion in earmarked projects ($1.2 billion in the conference report 
and $2.9 billion in the statement of managers). It went so far as to 
redirect nearly $1 billion in highway dollars that should have gone out 
by formula to the states or allocated to the highway programs and the 
money was used as a slush fund to earmark the Appropriators' home-state 
projects. I want to ensure that each of you fully understands the 
difference in the legal effect between report language and bill 
language. Do you understand that report language is advisory only?
    Answer. Having once served as a legislative assistant to United 
States Senator Jacob Javits, I have not forgotten the difference 
between report language and bill language: only the language of an 
enacted bill has the force of law, while report language is simply an 
expression of Congressional interest and intent. Secretary Mineta has 
made this point to the Department's executive management team. He has 
made it clear that he understands the difference between statutory and 
report language, particularly with regard to the naming of specific 
projects in report language.
    Question 3. How do each of you envision your role, if confirmed, 
with respect to the development and advocacy of policies promoting 
transportation security?
    Answer. In the next two years Congress will be considering the 
reauthorization of the surface transportation and aviation programs, as 
well as other critical bills affecting virtually all modes of 
transportation. I look forward to assisting the President and the 
Secretary, and to working with Congress, in addressing these critical 
issues. I believe that the legislation in all these areas--legislation 
that I hope to help shape--must necessarily incorporate the critical 
goals of safety and security in our transportation system, and seek to 
balance those requirements with mobility and reliability.
    While the position for which I have been nominated will not carry 
with it management responsibilities for the Department's transportation 
security programs, I hope to play a constructive role--working with my 
colleagues at the Department of Transportation, with Congress, and with 
state and local officials--in analyzing, developing and advocating 
transportation safety and security policies and programs, relating to 
all modes.
    Question 4. Through much of the last century, our nation's maritime 
policy was directed toward supporting our national defense needs. While 
meeting our defense needs should and must remain a top priority, 
changes in the global market and advances in the maritime industry have 
clearly put new pressures on the industry that were not contemplated 
during the development of many of the laws and regulations that form 
our current maritime policy. What specific changes would you propose to 
bring our nation's maritime policy in line with the maritime industry 
of today?
    Answer. In the past, U.S.-flag vessels have competed with other 
nations primarily on the basis of superior service quality and 
reliability and their ability to provide better intermodal connections 
to domestic transportation. Even so, U.S.-flag carriers need a cost 
structure that is not appreciably higher than those of direct, lower-
cost competitors in the world market. U.S.-companies must earn 
sufficient returns to cover costs, and to fund the continuing 
investments required in this extremely capital-intensive industry, if 
they are to remain competitive in a global market.
    If confirmed, I look forward to supporting the Secretary in 
addressing these issues. To that end, I believe that we need to 
consider and assess all the options available to help U.S.-flag 
carriers meet the competitive pressures from foreign-flag carriers. 
These could include measures to provide direct assistance to carriers, 
measures to improve their tax liabilities, and measures to guarantee 
certain types of cargos to U.S.-flag carriers.
    Question 5a. As you may be aware, I prefer to eliminate restraints 
on U.S. business 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. As you have noted, foreign government subsidies to their 
industries, as well as restrictions and barriers to free trade, have 
hurt American companies in international markets. United States 
companies will continue to operate at a disadvantage to foreign-flag 
shipping lines, as long as their governments use subsidies and other 
policies to distort or restrict market forces.
    Question 5b. If confirmed, how would you propose to help improve 
the competitiveness of the U.S. maritime industry?
    Answer. It is my understanding that the Administration will 
continue to press foreign governments to eliminate practices, which 
inhibit free market forces in the maritime sector. If confirmed, I look 
forward to supporting the President and the Secretary, and to working 
with Congress, in seeking to remove restrictions and barriers, which 
inhibit the capacity of American companies to compete fairly, and on a 
``level playing field,'' with foreign shipping lines.

                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                            to Jeffrey Shane

                        AVIATION--GENERAL ISSUES

    Question 1. Why is the Department reorganizing to create a new 
position for you to hold?
    Answer. From the Department's inception until early 1993, the 
principal policy advisor to the Secretary was an Assistant Secretary 
for Policy and International Affairs. That job covered the entire 
spectrum of the Department's activities, both domestic and 
international. It became clear to me after spending nearly four years 
in that role (1989-1993) that the aviation and international affairs 
side of the portfolio had overwhelmed the office's ability to address a 
great many core transportation issues facing the country--notably in 
the surface modes. Based on that experience, I recommended to the 
incoming Clinton Administration in early 1993 that it consider 
splitting the office into two separate offices. My guess is that others 
may have had the same idea. The result was that two new offices were 
then created, each headed by an Assistant Secretary. One was the Office 
of Transportation Policy; the other was the Office of Aviation and 
International Affairs.
    The change produced a real benefit: surface transportation, 
intermodal, and other issues now received once again the level of 
attention they deserve from the Secretary's senior policy advisors. 
Unfortunately, the change also deprived the Secretary of a single, 
centralized focal point for transportation policy advice and counsel.
    The newly proposed structure, Secretary Mineta believes, offers the 
best of both worlds. Surface transportation and intermodal issues 
continue to benefit from the attention of an Assistant Secretary. 
Aviation and other international issues will also have the undivided 
attention of an Assistant Secretary. A new Under Secretary for Policy 
will have Department-wide scope and serve as the Secretary's principal 
policy advisor. The Under Secretary will have major responsibility for 
coordinating the development of new initiatives, developing the 
Department's views on pending program reauthorizations and other key 
legislative initiatives, advising the Secretary on major regulatory and 
policy decisions, and brokering an on-going policy development effort 
that draws continually and cooperatively on the Department's operating 
administrations.
    Question 2. What effect are these changes expected to have on the 
operations of the Department?
    Answer. Our hope is that the new structure will furnish a basis for 
pulling the Department together, at last, in a way that Congress 
intended in the Department of Transportation Act of 1966. The idea is 
not to do violence to the Department's structure. Rather, it is 
intended to facilitate a drawing together of the Department's vast 
resources in a way that will enable us--in close cooperation with the 
Congress--to develop and manage truly fresh, creative, effective and 
forward-looking responses to our nation's transportation requirements. 
It is a structure, we believe, that will enhance the Department's 
ability to do business with its authorizing and appropriating 
committees, and vice versa.
    Question 3. When can we expect to see proposed legislation to 
implement these organizational changes?
    Answer. I am pleased to report that the House of Representatives on 
December 11 passed implementing legislation introduced by Chairman Don 
Young of the Committee on Transportation and Infrastructure. H.R. 3441 
would make the needed structural changes in Departmental organization 
to put Secretary Mineta's proposed reorganization into place. The 
legislation is now before the Senate.

                   INTERNATIONAL AVIATION AGREEMENTS

    Question 1. As you know, one of the most important matters pending 
before the Department with respect to international aviation is the 
American Airlines-British Airways application for antitrust immunity 
for their alliance. Everyone understands that immunity for this 
proposed alliance and the prospect of Open Skies with the United 
Kingdom are inextricably linked. While I have pushed hard for many 
years for a truly open air services market with Britain, it is 
essential that such an agreement and any associated conditions, such as 
approval of the alliance, produce a truly competitive and fair regime. 
It is clear to me that DOT's decision on this matter must not be 
rushed. Can you assure the Committee that the AA-BA application will 
receive a thorough and complete review?
    Answer. I have recused myself from participation in the AA-BA case. 
While I have no reason to doubt that the AA-BA application will receive 
a thorough review, I am not privy to the Department's deliberations.
    Question 2. As a general matter, what is your position with regard 
to the U.S./U.K. bilateral, and what will you do to ensure that the 
United States is not put at a disadvantage with respect to access at 
Heathrow?
    Answer. As you know, Bermuda 2 is a highly restrictive agreement in 
many ways. Given that both the U.S. and the U.K. now routinely seek 
pen-skies agreements with third countries, their inability to achieve 
an open-skies regime with each other represents a conspicuous 
aberration. It was the U.S. Government's goal to replace Bermuda 2 with 
an open-skies agreement during my last tour of duty at DOT (1989-1993), 
and that goal remains a priority for this Administration. I fully 
support that objective.
    It has always been a fundamental element of the U.S. position that 
any new agreement with the U.K. must provide meaningful access to 
Heathrow for U.S. carriers. I fully support that objective as well. 
Because the precise nature of that access in the near term may well be 
a central element in the Department's disposition of the AA-BA 
proceeding--a case from which I am recused--I am unable to comment 
further at this time.
    Question 3. What role would you play in DOT efforts to liberalize 
aviation markets around the world, and what areas do you see as a 
priority?
    Answer. I expect to contribute my experience in international 
aviation to the Department's on-going efforts to liberalize aviation 
markets. I intend to focus on policy formulation, consultations with 
stakeholders, and negotiating strategy in cooperation with the 
Assistant Secretary for Aviation and International Affairs and her 
staff, as well as with our counterparts at the Department of State. We 
will continue to seek open skies agreements to the extent like-minded 
partners can be found, but I also believe that we should explore other 
avenues toward liberalization. The all-cargo sector might form a 
crucible in which to test new ideas; we should also try to build on the 
multilateral approach adopted with four of our APEC partners late last 
year. Although the United Kingdom, Japan, China, and Hong Kong are 
clearly our highest immediate priorities, I am also very interested in 
exploring further opportunities for progress with Canada, Latin 
America, and Africa. It is also reasonable to anticipate that U.S.-EU 
negotiations are not far off. It is my hope that the Department will be 
able to engage all affected interests and the Congress in a thoughtful 
discussion about fostering greater liberalization, and thus more robust 
competition, in international aviation markets.
    Question 4. What are your views on cabotage, and do you believe 
U.S. air carriers would be at an advantage or disadvantage if the 
Congress changed the cabotage laws?
    Answer. In my view, U.S. airlines have demonstrated beyond doubt 
that they are effective, adaptable competitors in both domestic and 
international markets. I doubt that U.S. carriers would be at any net 
disadvantage were our cabotage laws changed; indeed, I would expect 
them to emerge as net winners in a regime that allowed them to exploit 
any market that offered meaningful new economic opportunity, whether at 
home or abroad.
    There are, of course, some major practical impediments to the 
operation of domestic services by foreign carriers. First, foreign 
carriers operating in the domestic U.S. market would have to comply 
with all of the regulations, labor laws, and tax requirements that 
apply to U.S. carriers (and vice versa). A second is that any proposal 
to the U.S. to allow foreign carriers access to domestic markets would 
have to be wholly reciprocal. Third, any exchange of cabotage rights 
would have to be preceded by a great deal of detailed work in the 
legislative and regulatory area. It may well be for this reason that I 
have not detected any major groundswell of enthusiasm from foreign 
carriers for a change in our cabotage law.
    Question 5. If confirmed, would you encourage the Congress to amend 
the Fly America Act, or do support the current law?
    Answer. Code sharing and the growing number of alliances between 
U.S. and foreign airlines--meaning that U.S. Government passengers do 
fly more routinely on foreign carriers--have diminished the economic 
importance of this issue. Nonetheless, Fly-America requirements 
continue to be a sensitive point in some of our international aviation 
negotiations. In that connection, there is some scope under the Fly 
America provision for the United States to offer access to Fly-America 
traffic to our international aviation partners in exchange for benefits 
for U.S. aviation interests, although I know of no case in which such 
an exchange was entered into.
    There are also competing considerations, however. First, the Fly 
America requirement has undoubtedly delivered important benefits to 
U.S. airlines. Second, as a former Vice President of the National 
Defense Transportation Association and former Chairman of the NDTA's 
Military Airlift Committee, I am fully aware of the importance the 
Department of Defense attaches to Fly America as an incentive to CRAF 
participation by U.S. carriers. In other words, there continue to be 
divergent views on this issue that will have to be carefully considered 
before we will be in a position to decide whether to offer Congress a 
recommendation regarding the Fly America legislation.
    Question 6. What is your position on changing the 25-percent 
limitation on foreign investment in U.S. airlines?
    Answer. As globalization of the airline industry and the growing 
number of carrier alliances continue to strain the decades-old 
limitations on foreign investment in U.S. airlines, this issue is sure 
to receive increasing prominence. A change could open up new sources of 
capital for U.S. airlines, strengthening their competitiveness, and 
thus contributing to a more open global aviation regime. Again, 
however, I am fully aware of countervailing considerations, such as the 
possible implications of a change in the foreign investment ceiling on 
our defense preparedness, that require careful analysis. My impression, 
too, is that airline labor is generally opposed to permitting foreign 
investors to own a more significant stake in U.S. airlines. Without 
attempting to predict what the outcome of a public policy debate on the 
continuing utility of foreign investment restrictions would be, I would 
hope that we could have that debate at the appropriate time.

                   AIRLINE TICKET DISTRIBUTION ISSUES

    Question 1. For each of the past few years DOT has extended the 
current Computer Reservation System (CRS) rules for a year without 
addressing the concerns that it raised about the rules' applicability 
to Internet sales and other issues. Do you believe the CRS rules should 
apply to Internet distribution of airline tickets?
    Answer. Because the Department recognizes the importance of the 
question of whether the CRS rules should be applied to the Internet 
sale of airline tickets, the Department asked the parties in its 
pending CRS rulemaking to comment on this issue. I understand that many 
parties submitted comments on this issue to the Department over the 
years, and they disagree on whether regulation is necessary. This is an 
issue that needs to be decided, but I have not yet had an opportunity 
to review their comments.
    Question 2. When will DOT act to finalize changes to the CRS rules?
    Answer. I know that Secretary Mineta views the issue as a priority 
and has recently instructed the staff to move forward on the rulemaking 
and develop a rulemaking proposal that can be forwarded to OMB. The 
staff is currently at work on an NPRM. I fully expect that a final rule 
will be issued--after comments on the NPRM have been digested--by mid-
2002.

                        SURFACE/MERCHANT MARINE

    Question 1a. As you may be aware, last month the Amtrak Reform 
Council (ARC) voted 6:5 making a ``finding'' that Amtrak will not meet 
its statutory requirement of operational self-sufficiency by next 
year's deadline (December 2, 2003). Have you had an opportunity to 
review Amtrak's financial and operating performance?
    Answer. I have reviewed Amtrak's financial and operating 
performance in a general way. The company is still in very difficult 
financial circumstances. Costs have increased faster than revenues and 
capital needs for the current system are very large.
    Question 1b. Given the Secretary's membership role on both the ARC 
and the Amtrak Reform Board, does the Administration intend to submit a 
rail passenger restructuring proposal or some type of proposal to 
address Amtrak's severe financial situation, and if so, when?
    Answer. The Department is working to develop a comprehensive 
federal policy to guide the future of rail passenger service and the 
financing of high-speed rail. Our aim is to have this policy ready when 
we submit the FY 2003 budget early next year. After that the Department 
intends to work with the Congress to develop a legislative package to 
implement that policy. I look forward to being an active participant in 
that process.
    Question 2. Earlier this week, the Senate approved, without my 
support, H.R. 2299, the DOT Appropriations Bill for fiscal year 2002. 
That bill was an egregious overreach by the Appropriators in 
redirecting the programmatic expenditures and directives under the laws 
developed by the Authorizing Committees. There were more than $4.1 
billion in earmarked projects ($1.2 billion in the conference report 
and $2.9 billion in the statement of managers). It went so far as to 
redirect nearly $1 billion in highway dollars that should have gone out 
by formula to the states or allocated to the highway programs and the 
money was used as a slush fund to earmark the Appropriators' home-state 
projects. I want to ensure that each of you fully understands the 
difference in the legal effect between report language and bill 
language. Do you understand that report language is advisory only?
    Answer. My first assignments with the Department were in its legal 
office. The Committee can be confident that I do understand the 
difference between statutory and report language, particularly when it 
comes to the naming of specific projects. In such instances, only 
statutory language is law; report language is not law but simply an 
expression of Congressional interest. I know, furthermore, that the 
Secretary has made this point clearly to his new management team.
    Question 3. How do each of you envision your role, if confirmed, 
with respect to the development and advocacy of policies promoting 
transportation security?
    Answer. As Under Secretary for Policy, I would expect to maintain a 
close working relationship with the Under Secretary for Security. My 
expectation would be to stay fully apprised of the work of the new 
Transportation Security Administration (TSA) and to ensure that we miss 
no opportunities to integrate more effective security measures into the 
Department's organic programs. The forthcoming reauthorization of our 
surface and air transportation programs will have to be undertaken with 
a heightened attention to the security dimension and, if confirmed, I 
would expect to be in a position to help coordinate the development of 
appropriate security provisions in that legislation--again in close 
cooperation with the Under Secretary for Security and the TSA. Finally, 
the Department's international activities need to be heavily focused on 
the need for more effective transportation security. It is self-evident 
that a transportation security program focused exclusively on domestic 
activities will not deliver the full measure of security that we must 
have. New international protocols and a new level of international 
cooperation and harmonization are urgently required if we are to 
achieve the objective of a fully secure transportation system.
    Question 4. Through much of the last century, our nation's maritime 
policy was directed toward supporting our national defense needs. While 
meeting our defense needs should and must remain a top priority, 
changes in the global market and advances in the maritime industry have 
clearly put new pressures on the industry that were not contemplated 
during the development of many of the laws and regulations that form 
our current maritime policy. What specific changes would you propose to 
bring our nation's maritime policy in line with the maritime industry 
of today?
    Answer. The President and Congress have repeatedly affirmed the 
need for a U.S.-flag international merchant fleet, a skilled American 
mariner workforce, and U.S. shipbuilding and ship repair infrastructure 
to assure the continued economic security and military readiness of the 
nation. Although the United States today is the world's largest trading 
nation, accounting for more than 24 percent of world ocean-borne trade, 
the U.S. maritime industry continues to struggle to compete effectively 
in international shipping and shipbuilding markets. If U.S.-companies 
do not earn sufficient returns to cover costs and the continuing 
investments required in this extremely capital-intensive industry, 
these companies will not be able to competitively operate US-flag 
vessels in a global market.
    As Assistant Secretary for Policy and International Affairs during 
the first Bush Administration, I served as Vice Chairman of the 
Advisory Commission on Conferences in Ocean Shipping, and I worked 
closely with then Secretary of Transportation Andrew Card on a program 
that bore a strong resemblance to the later-enacted Maritime Security 
Program. Ocean shipping issues have long been of personal interest to 
me and of great concern.
    In particular, I believe that we need to assess the options that 
might be available in the near term. These options may include: 
enhancements to the Maritime Security Program; the Voluntary Intermodal 
Sealift Agreement programs; revisions to the cargo preference 
regulations affecting the movement of food aid cargoes; and revisions 
to the Capital Construction Fund program which might attract new 
capital investment more effectively. We will also examine the U.S. tax 
burdens on our merchant marine and maritime workforce relative to those 
of their international competitors. By implementing a fair tax policy, 
we would begin to promote cost parity with the rest of the shipping 
world.
    Question 5. As you may be aware, I prefer to eliminate restraints 
on U.S. business 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? If confirmed, how would you 
propose to help improve the competitiveness of the U.S. maritime 
industry?
    Answer. Let me preface my answer by saying that I am fully aware of 
your long devotion to the cause of U.S. international competitiveness. 
You can depend on the Department to be a staunch ally in the campaign 
to eliminate barriers to U.S. transportation providers in international 
markets.
    Looking specifically at ocean shipping, it is certainly the case 
that foreign government subsidies to national industries and 
restrictions and barriers to free trade have hurt U.S. companies in 
global markets. As long as foreign governments maintain policies that 
distort or restrict market access, U.S. operators will operate at a 
disadvantage compared to foreign flag shipping lines. We will continue 
to press foreign governments to eliminate practices that distort the 
operation of a free marketplace for shipping services and remove 
restrictions and barriers on U.S. companies so that they can compete 
fairly in the world market.
    At the same time, we need to be cognizant of another distortion 
that hurts U.S. operators. Like domestic rail and truck carriers and 
all U.S.-based industries, U.S.-flag vessel operators incur ``U.S. 
costs'' that their foreign competitors do not incur. I refer to burdens 
associated with taxes, labor rules, INS requirements, and rules 
relating to safety and the environment. If foreign-based shipping 
companies doing business in the United States could be required to 
comply with the same laws as American companies, the cost differential 
between U.S. and foreign operators would largely disappear. Because the 
United States cannot impose its cost structures on foreign operators, 
however, we need to examine whether there might be approaches to 
reducing the cost structure for U.S.-flag vessel operations that might 
enhance the prospects for the long-term survival of the fleet.

                                 ______
                                 
      Response to Written Questions Submitted by Hon. Ted Stevens 
                            to Jeffrey Shane

    Question 1. During the recent Transportation appropriations bill, 
an amendment was accepted on the Senate floor that would have allowed 
greater flexibility in transferring cargo shipments at Anchorage 
International airport as long as all the carriers involved (both 
domestic and foreign) had individually had rights to the final 
destination point within the United States.
    Initially, the Department told me that they were ``neutral'' on 
that provision, but later decided that they needed to oppose it not 
because they opposed the result, but that it needed to be done in a 
``multilateral'' aviation negotiation. Do we have any multilateral 
cargo aviation negotiations scheduled? Do we have any multilateral 
passenger cargo negotiations scheduled?
    Answer. Although, at the present time, the Department does not have 
any multilateral aviation negotiations scheduled for cargo or passenger 
operations, we are continuing our efforts to bring Open Skies to as 
many countries as possible through our multilateral agreement that 
Secretary Mineta signed with four other countries, New Zealand, Chile, 
Brunei, and Singapore, in May 2001. This agreement is open for all 
nations to join. Effective in April 2002, Peru will become a partner to 
the agreement, and there is active coordination among the signatories 
to obtain additional partners. The multilateral agreement contains all 
the liberal elements of our bilateral Open Skies agreement, 
particularly in the cargo area where seventh-freedom operations and 
liberal cargo transfer operations are authorized.
    In addition, I anticipate that the European Commission will 
eventually receive a mandate from E.U. Member States to conduct 
negotiations with the U.S. on a multilateral basis. The Department has 
indicated that the U.S. is willing to discuss a potential E.U.-U.S. 
agreement at that time. Such an agreement would have to build on the 
open-skies bilateral relationships that the United States has already 
established with most European Union countries.
    Question 2. Do you believe that we should pursue liberalizing the 
ability of airports and carriers to transfer cargo between and among 
carriers if each of those carriers have the requisite rights to carry 
that cargo to its final destination?
    Answer. I recognize the economic importance to airports and 
communities of air cargo operations, including the ability of carriers 
to transfer cargo. Such matters are of particular importance to Alaska 
because of its unique geographic characteristics.
    The Department has taken a number of actions to enhance and 
encourage cargo operations, and to facilitate the transfer of cargo 
traffic in Alaska. At the state's request, the Department has twice 
granted broad authorizations to U.S. and foreign carriers to permit 
such operations to take place at airports in Alaska.
    I, personally, have been committed, throughout my entire career in 
aviation, to furthering liberalization of aviation services, and have 
made it a personal priority to review existing policies to achieve that 
end. For example, the cities program (which allowed extra-bilateral 
service by foreign carriers to underserved U.S. cities) and the first 
open skies agreement were developed during my tenure as Assistant 
Secretary for Policy and International Affairs from 1989 through early 
1993.
    I believe that it is important to consider fully what further 
liberalization may be accomplished to enhance economic benefits in the 
State of Alaska, as well as in other communities throughout the United 
States. In doing so, we must ensure full consideration of the impact of 
our efforts on those communities, as well as our industry and other 
affected parties. When international agreements are involved, we also 
need to make sure that arrangements are fair and reciprocal.
    Question 3. What role do you anticipate playing in the office of 
the Secretary of Transportation vis-a-vis the Assistant Secretary for 
Aviation and International Affairs, the Assistant Secretary for Policy, 
and the Assistant Secretary for Budget and Programs?
    Question 4. What are the line (management) responsibilities of the 
office you've been nominated for?
    Answer to Questions 3 and 4. As you know, although my current 
nomination is for the position of Associate Deputy Secretary, it is 
Secretary Mineta's hope that Congress will approve the reorganization 
of DOT's policy function through the creation of a new position, Under 
Secretary for Policy. The intention is that I would be appointed to 
that position with the advice and consent of the Senate at which time 
the Associate Deputy Secretary position would be abolished. This 
response is addressed, therefore, to the role of the proposed Under 
Secretary for Policy.
    The Under Secretary would have Department-wide scope, serve as the 
Secretary's principal policy advisor, and work closely with all 
elements of the Department to ensure that the nation's transportation 
programs are managed in an integrated and fully coordinated way.
    As contemplated in Secretary Mineta's proposal, the Assistant 
Secretaries for Transportation Policy and for Aviation and 
International Affairs would report to a new Under Secretary for Policy. 
The Under Secretary would be the main focal point for formulating and 
evaluating new initiatives, developing the Department's views on 
pending program reauthorizations and other key legislative proposals, 
advising the Secretary on major regulatory and policy decisions, and 
managing a long-range transportation policy development process that 
draws continually and cooperatively on the Assistant Secretaries for 
Transportation Policy and Aviation and International Affairs as well as 
the Department's operating administrations.
    Because the present position of Associate Deputy Secretary would be 
abolished upon the creation of the new Under Secretary position, the 
reorganization would not expand the Office of the Secretary. 
Nevertheless, it is a structure that will enhance the Department's 
ability to interact with stakeholders throughout the transportation 
community. Secretary Mineta believes that the change will facilitate a 
drawing together of the Department's resources in a way that will 
enable the Department--in close cooperation with the Congress--to 
develop and implement truly creative, forward-looking, and intermodal 
responses to our nation's transportation requirements.
    Question 5. As someone who has been in the international aviation 
arena for the last 20 years, what are goals have you personally set for 
next 2, 3, or 4 years for international aviation negotiations aviation?
    Answer. The first objective must be to do all we can, both in 
multilateral fora and bilaterally, to establish a regime that ensures 
the security of international aviation. Although much has been 
accomplished already in the aftermath of 9/11, the effort will have to 
be focused and sustained over the long term. It is particularly 
important that we encourage our trading partners around the world to 
support initiatives recently undertaken within the International Civil 
Aviation Organization to tighten security standards further and 
establish a meaningful security audit program. We should reinforce 
these themes and objectives in all of our bilateral negotiations.
    Regarding the negotiation of international aviation economic 
rights, the U.S. has pursued increasingly liberal aviation arrangements 
with its trading partners over the course of the past 25 years. Our 
current preferred model is Open Skies--a regime in which most of the 
restrictions that characterized earlier, more traditional agreements 
have been abolished. Open Skies agreements permit the airlines of 
signatory countries to operate in keeping with commercial exigencies 
rather than trying to game an artificially regulated market.
    Although we have negotiated more than 50 Open Skies agreements with 
like-minded countries, there are still some conspicuous exceptions--the 
United Kingdom, Japan, China, and Hong Kong, to name four. My hope is 
that the United States will redouble its efforts to bring these 
important trading partners into a regime in which air transportation 
can contribute more fully to economic growth both here and abroad.
    Finally, I would hope to enter into more negotiations on a 
multilateral basis in order to promote the benefits of the Open Skies 
model more widely and more efficiently. As indicated above, we should 
seek further signatories for the groundbreaking APEC agreement signed 
early last year by Secretary Mineta. I also anticipate that we will be 
able to conduct aviation negotiations with the European Union sometime 
in the near future.
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