[Senate Hearing 107-959]
[From the U.S. Government Publishing Office]
S. Hrg. 107-959
NOMINATION OF STEVEN ROBERT BLUST
TO BE COMMISSIONER OF THE
FEDERAL MARITIME COMMISSION
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 5, 2002
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
SECOND 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
Jeanne Bumpus, Republican Staff Director and General Counsel
C O N T E N T S
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Page
Hearing held on June 5, 2002..................................... 1
Statement of Senator Breaux...................................... 1
Statement of Senator McCain...................................... 11
Prepared statement........................................... 11
Witnesses
Creel, Hal, Chairman, Federal Maritime Commission, FMC........... 2
Blust, Steven Robert, nominee to be Commissioner of the Federal
Maritime Commission............................................ 3
Biographical information..................................... 4
NOMINATION OF STEVEN ROBERT BLUST
TO BE COMMISSIONER OF THE
FEDERAL MARITIME COMMISSION
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WEDNESDAY, JUNE 5, 2002
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 9:35 a.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 hearing will be in order. This
morning's hearing is for the confirmation of the nomination of
Mr. Steven Robert Blust as our new Federal Maritime
Commissioner. We are delighted to have him with us, and I
understand your wife is with you, Mr. Blust. We are happy to
have her here, and pleased to have you in attendance, and thank
you for allowing him to serve.
The Federal Maritime Commission, as everyone here knows, is
a very important, independent commission. It is one that maybe
the average person in Washington, the average person in the
United States, does not understand, or is not very familiar
with, but for those who are interested in trade, trading
opportunities, fair trade, and level playing fields in the
international arena, the Federal Maritime Commission obviously
is very, very important.
I want to congratulate Mr. Blust, you personally on your
nomination, and also express my sincere appreciation on behalf
of this Committee and, indeed, all Members of the Senate for
your willingness to step out of the private sector and into a
job that I am certain will pay a lot less financially, in terms
of financial reward, but in terms of the challenges and the
ability to do good things for your country and your nation, I
know that it is a very rewarding challenge.
The current Chairman, Hal Creel, is a good friend of this
Committee and a good friend of mine, served on my staff as
Counsel and Staff Director in his prior life. I understand that
it is the President's desire that when you, Mr. Blust, join the
Commission, you will begin service as the Chairman of the
Commission. Hal has done a terrific job, and we appreciate his
long service and the record that he has established in this
very important position.
I will just point out that the Commission has extremely
important duties. Sometimes these duties have to be carried out
with the honey and sugar approach, and sometimes you need to
use the 2x4 approach. I think Hal has used both, from talking
nicely to our trading partners and our port authorities around
the world, to threatening to close the Port of Japan. We have
done just about everything during your tenure, but that is the
type of perspective that I think is needed in this very
important position.
I am delighted, Mr. Blust, that you are a person who comes
to this nomination process with a great deal of professional
credibility and background. You are not going to have a lot of
on-the-job training, as Hal did when he got there. He knew what
the Commission was about, and he had previously worked with the
Commission. However, coming from your industry perspective,
currently as manager of the Tampa Bay International Terminals,
and prior to that, working for Lykes Brothers Steamship
Company, the Port of Jacksonville, Crowley Maritime, Delta
Steamship, and graduate of the Merchant Marine Academy. You had
the good fortune of going to Louisiana, as Hal did, and
receiving an MBA degree at Tulane in New Orleans. You obviously
have the professional background, training, and educational
experience I think that is needed in this job.
No one can suggest that you are just a political appointee
that they found a place for in the Administration. You are a
professional, extremely well-qualified individual, and we look
forward to having you in that position.
I understand that Senator Bill Nelson from Florida was
going to try and be here, but since he is not able, he sends
his regards. I will ask Commissioner Hal Creel to have a word
or two for introduction purposes. Hal.
STATEMENT OF HAL CREEL, CHAIRMAN,
FEDERAL MARITIME COMMISSION
Mr. Creel. Thank you, Chairman Breaux. I am appearing
before you today with the unusual task of recommending someone
to replace me as Chairman. I cannot think of a better man than
Steve Blust, to kick me out of a job of which I am so fond.
Steve and I have had the chance to visit many times over the
last several months, and I can tell you he is extremely
qualified to be Chairman of the Federal Maritime Commission.
His vast experience in both the terminal and the steamship
sides of the business give him tremendous qualifications for
that position. He understands the issues before the Commission,
and he has the demeanor and the personal qualities, I believe,
to be not only a good steward of the agency, but to be a leader
as the agency enters a new era in the oversight of
international ocean shipping.
I have a lot vested in the FMC, and I want to see it and
Mr. Blust succeed. I hope that you will favorably report him
out of the Committee so I can start working with him, and that
now I can be the one complaining about the Chairman, rather
than the other way around.
Thank you very much.
Senator Breaux. Thank you very much, Hal, for attending and
being with us once again.
Mr. Blust, you are on board. Any comments you would like to
make to the Committee?
STATEMENT OF STEVEN ROBERT BLUST, NOMINEE TO BE
COMMISSIONER OF THE FEDERAL MARITIME COMMISSION
Mr. Blust. Yes, Mr. Chairman, I do have an opening
statement, if I may proceed with that. It is, indeed, an honor
to appear before you and the other Members of the Senate
Commerce, Science, and Transportation Committee as President
Bush's nominee to be a Commissioner of the Federal Maritime
Commission.
During my life, I have been fortunate to have support from
many individuals, including family, friends, colleagues, and
alumni from the United States Merchant Marine Academy and
Tulane University. I would like to publicly extend my thanks to
them, and especially to my wife, Sharon, who is here today at
the hearing, for all the support and help they have provided
over the years.
International ocean transportation is an industry that has
played an important role in the history of this great land.
From the arrival of the earliest explorers seeking new ocean
routes for commerce, to the Boston Tea Party protest of unfair
taxation on imports, and to today's global economy, our society
and quality of life have benefited from international trade.
Today, over 18 million TEUs of cargo move in the international
commerce of the U.S. with a value of about $500 billion.
The Federal Maritime Commission plays a crucial role in
this marketplace by assuring that fair maritime competition
exists, and that the maximum benefits of international ocean
transportation are received by this nation at a minimum cost.
The intent of our governing laws is to let the market forces
guide the growth and development of U.S. international trade.
The Federal Maritime Commission is charged with ensuring that
there are no undue controls, influences, or non-market barriers
imposed by any nation, carrier, cargo-owner, or intermediary
which can affect U.S. ocean-borne trade.
If I am confirmed by the Senate and designated as Chairman
of the FMC, I will do all that I can to ensure that our U.S.
exporters, importers, ocean transportation, intermediaries, and
carriers are provided a fair and unencumbered operating
environment in which to conduct their business in international
trade.
After graduation from the U.S. Merchant Marine Academy, my
employment experience has been solely in the maritime industry.
Many of the functions that I have performed in my career have
been subject to the maritime laws and regulations that are
administered by the Commission. I have extensive experience in
the areas of ocean carrier liner trade management, marine
terminal management, operations, public port administration,
tariff and service contract use and publication, and liner
operations.
I believe that my diverse and proven background in the
maritime industry will allow me to contribute to the efforts of
the Federal Maritime Commission. The United States is a world
leader in addressing international transportation issues. The
Ocean Shipping Reform Act of 1998, OSRA, has proven to be a
significant step forward for the U.S. international commercial
sector. It has greatly benefited international trade by
allowing shippers and ocean carriers to work more closely
together through the use of confidential service contracts, to
better meet the needs of both parties. Congratulations to this
Committee for your wisdom and efforts in introducing and
shepherding through the passage of OSRA.
As a result of OSRA, the Federal Maritime Commission now
focuses on marketplace trends for indications of disrupting and
distorting practices adversely affecting U.S. international
transportation. Upon our identifying adverse practices, the FMC
can take appropriate steps initially through compliance efforts
but, when required, through the use of penalties and sanctions
to remedy the situation.
OSRA has also strengthened the enforcement provisions of
the Foreign Shipping Practices Act of 1988, thus giving the
Commission greater ability to rectify unfair shipping practices
of foreign countries and entities.
In the area of transportation security, I will do all that
I can to be certain that the Federal Maritime Commission works
in concert with other agencies and Congress to ensure that the
U.S. international commerce is conducted in a safe and secure
manner.
As a regulator of the business in which the FMC
stakeholders operate and function, my relationship will be one
of fairness and impartiality, combined with an understanding
and support. I will strive to ensure that the stakeholders are
allowed to function free from discriminatory practices, market-
distorting activities and, in the case of cruise passengers,
protection from undue financial risk.
Thank you for your time and consideration. I will be happy
to answer any questions you may have.
[The biographical information of Mr. Blust follows:]
A. BIOGRAPHICAL INFORMATION
1. Name: Steven Robert Blust.
2. Position to which nominated: Commissioner of the Federal
Maritime Commission.
3. Date of Nomination: March 14, 2002.
4. Address: (Information not released to the public).
5. Date and place of birth: December 5, 1948, Sheboygan, WI.
6. Marital status., Married, Sharon Rose Buckel.
7. Name and ages of children: Kristian Robert Blust, age 22.
8. Education: Sheboygan Falls High School, 09/1963-06/1967,
Sheboygan Falls, WI, H.S. Diploma, June 7, 1967; United States Merchant
Marine Academy, 07/1967-06/1971, Kings Point, NY, Bachelor of Science,
June 9, 1971; Tulane University, 01/1975-05/1979, New Orleans, LA,
Master of Business Administration, May 11, 1979.
9. Employment record: Tampa Bay International Terminals, Inc.,
Tampa, FL, 10/1996 to Present, President/CEO. Chief Executive Officer
of transportation service corporation. Increased business volume and
profitability through diversification and expansion, expanded marketing
activity, and revised operational focus. Lykes Brothers Steamship Co.,
Inc. Tampa, FL/New Orleans, LA, 02/1987-09/1996, Vice President
Partnerships, 1996. Sought and secured alliance agreements with
partners on strategic and tactical levels. Improved performance through
asset sharing, service coordination, cost reduction and business
growth. Vice President Mediterranean Service, 1991 to 1996, Profit and
lost; responsibility for an international transportation service, 1993-
1996. Directed all aspects of business, including cargo management,
tariff filings, carrier agreements, operations, business development,
sales, marketing, and logistics. Negotiated contracts with top 5
accounts. Developed annual operating and strategic business plans.
Decision-maker at owner meetings; Director Marketing and Pricing, 1989
to 1990. Directed business development activities of transportation
service. Developed market strategy program including customer
acquisition, profit improvement and business growth. Directed
conference representatives. Designed customer plans for both private
and public sector clients; Director Liner Services, 1987 to 1989,
Directed service operations, traffic and documentation departments.
Jacksonville Port Authority, Jacksonville, FL, 05/1985-01/1987, General
Manager, 1986 to 1987 Managed 300-acre multipurpose facility that
included cargo transit terminals, manufacturing plants, auto processing
facilities, regional offices, and military depots. Provided services to
customers including facility development, site management, security,
cargo operations. Director of Marketing, 1985 to 1986. Directed port
authority business development for domestic and international markets,
including sales activities, managed pricing functions, and represented
port in international and regional forums; Crowley Terminal Operators,
New Orleans, LA, 09/1984-05/1985, Terminal Manager, 1984 to 1985.
Managed terminal operations, cargo handling and labor management, with
staff of 25 employees; Delta Steamship Lines, Inc., New Orleans, LA,
01/1974-09/1984. Assistant Director, 1982 to 1984 Directed container
fleet management, cargo development, and pricing. Managed intermodal
services, traffic management, tariff publication, and vessel operations
1974-1982. Texas A&M University, Galveston, TX, 06/1973-12/1973. Ship's
Officer, RV Alaminos. Watch standing ship's officer on research vessel,
responsible for ship's navigation and maintenance. Performed ship
maneuvers during research projects. Central Gulf Lines, New Orleans,
LA, 10/1972-06/1973. Operations Assistant, Coordinated LASH barge fleet
movement, inventory control, fleeting and cargo operations. Ann Arbor
Railroad, Frankfort, MI, 07/1971-06/1972. First Class Pilot, Watch
standing ship's officer responsible for cargo operations and ship's
navigation on railcar ferries operated on Lake Michigan.
10. Government experience: None.
11. Business relationships: Tampa Chamber of Commerce International
Committee Member 2001-Present; Hillsborough Community College,
International Advisory Committee, Member 1999-Present; Enterprise
Florida International Advisory Committee, Member 1999-Present.
12. Memberships: Propeller Club of the United States, Vice
President, Port of Tampa 2001-Present; Boardmember, Port of Tampa 1997-
2001, Tampa Bay Cargo Association, President, 2000-Present; Vice
President, 1998-2000, U.S. Merchant Marine Academy Alumni Assn., member
1971-Present; President, New Orleans Chapter, 1988-1989; Tulane
University Alumni Association, member 1979-Present; Navy League member,
2001.
13. Political affiliations and activities: (a) List all offices
with a political party which you have held or any public office for
which you have been a candidate. None.
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years. None.
(c) Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years. Contributed $360/year to
Lykes Bros. Steamship Co. PAC 1992-1994.
14. Honors and awards: United States Merchant Marine Academy Alumni
Association, Meritorious Alumni Award 1991; Propeller Club of the
United States, Port of Tampa Maritime Person of the year, 2002;
15. Published writings: None.
16. Speeches: Provide the committee with two copies of any formal
speeches you have delivered during the last 5 years which you have
copies of on topics relevant to the position for which you have been
nominated.
While I have not delivered any formal speeches, I participated as a
panel member at the Journal of Commerce Breakbulk Conference on 10/1/
2001 using informal notes.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? I believe that my extensive professional
experience in the maritime industry, formal maritime and business
education, as well as my involvement in professional and fraternal
organizations, were recognized by the President as providing a valuable
base upon which I could effectively function as a Commissioner of the
Federal Maritime Commission.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment? My
employment experience, after graduation from the United States Merchant
Marine Academy, has been solely in the maritime industry. I have
extensive experience in the areas of ocean carrier liner trade
management, marine terminal management, public port administration,
tariff and service contract use and publication, and liner operations.
Many of the functions that I have performed in my career have been
subject to the maritime laws and regulations that are implemented by
the Federal Maritime Commission, and my experience will be beneficial
to me, if confirmed as a Commissioner.
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.
(a) 401-K Defined contribution plan, Hartford Life, Tampa Bay
International Terminals, Inc. (I will continue to participate. Neither
I, nor my previous employer will continue to contribute).
(b) Deferred Annuity, Equitable Life. Delta Steamship Lines
terminated its retirement plan in 1985 and a deferred annuity was
purchased from Equitable Life in Secaucus, NJ, which matures at
retirement age.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. None.
3. Describe any business rellationship, 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. (a) Tampa Bay International
Terminals, Officer of the company; (b) Tampa Port Authority, Tampa Bay
International Terminals, performed terminal operations under agreement
with the Tampa Port Authority; (c) Lykes Brothers Steamship Co. Inc.,
employee.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy. None.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (a) 401-K Defined contribution plan, Hartford Life, Tampa Bay
International Terminals, Inc. I will continue to participate. Neither
I, nor my previous employer will continue to contribute. (b) Deferred
Annuity, Equitable Life. Delta Steamship Lines terminated its
retirement plan in 1985 and a deferred annuity was purchased from
Equitable Life in Secaucus, NJ, which matures at retirement age. As
this is a defined retirement program, it presents no potential
conflict. (c) As required by 18 U.S.C. 208(a), I will not participate
personally and substantially in any particular matter that has a direct
and predictable effect on my financial interests or those of any other
person whose interests are imputed to me, unless I first obtain a
written waiver, pursuant to section 208(b)(1), or qualify for a
regulatory exemption, pursuant to section 208(b)(2). I understand that
the interests of the following persons are imputed to me: my spouse,
minor children, or any general partner; any organization in which I
serve as officer, director, trustee, general partner or employee; and
any person or organization with which I am negotiating or have an
arrangement concerning prospective employment. Upon confirmation, I
will resign my position as President and CEO of Tampa Bay International
Terminals, Inc. Furthermore, pursuant to 5 C.F.R. 2635.502, for 1 year
after I terminate my position with Tampa Bay International Terminals, I
will not participate in any particular matter involving specific
parties in which Tampa Bay International Terminals is a party or
represents a party, unless I am authorized to participate.
6. Do you have any 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? Designated Agency Ethics Official of the Federal Maritime
Commission, on March 15, 2002, issued a letter to the U.S. Office of
Government Ethics, stating his opinion that the nominee will be in
compliance with the conflict of interest laws and regulations that will
apply to the nominee as a member of the Commission.
Office of Government Ethics, on March 18, 2002, issued a letter to
the committee stating that nominee is in compliance with applicable
laws and regulations governing conflicts of interest.
The General Counsel of the Federal Maritime Commission sent an
opinion letter to the committee on March 20, 2002 stating his belief
that nominee will be in compliance with the conflict of interest laws
and regulations that will apply to the nominee as a member of the
Commission if the nominee is confirmed.
D. LEGAL MATTERS
1. Have you ever been disciiplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a complaint to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details. No.
2. Have you ever been investigated, arrested, charged or held by
any Federal, State, or other law enforcement authority for violation of
any Federal, State, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details. Federal
Maritime Commission Docket No. 99-22, Tampa Bay International
Terminals, Inc. (TBIT) v. Coler Ocean Independent Lines Company
(Coler). Agency decision found Coler in violation of the Shipping Act
of 1984 and TBIT was awarded reparations in the amount of $30,647.07
plus interest.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination. None.
E. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Are you willing to appear and testify before any duly
constituted committee of the Congress, on such occasions as you maybe
reasonably requested to do so? Yes.
F. GENERAL QUALIFICATIONS AND VIEWS
1. Please describe how your previous professional experience and
education qualifies you for the position for which you have been
nominated. My employment experience, after graduation from the United
States Merchant Marine Academy, has been solely in the maritime
industry. I have extensive experience in the areas of ocean carrier
liner trade management, marine terminal management, public port
administration, tariff and service contract use and publication, and
liner operations.
The education that I received at the United States Merchant Marine
Academy provided an excellent foundation upon which to build a career
in the maritime industry. Both the technical and leadership skills that
were taught at the Academy have proven to be invaluable to me during my
career. Tulane University's Master of Business Administration program
has greatly contributed to my ability to effectively work with
customers and business partners.
Many of the functions that I have performed, in my career, have
been subject to the maritime laws and regulations that are implemented
by the Federal Maritime Commission, and my experience will be
beneficial to me, if confirmed, as a Commissioner.
2. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills? (a) My current knowledge of the technical
processes and procedures within the Federal Maritime Commission may be
lacking at this time. Expertise can be quickly developed by reviewing
the Commission's written procedures and seeking guidance and
explanations from the Commission staff.
(b) I do not presently have a working relationship with Congress. I
will meet with the appropriate Members of Congress and their staff to
promptly develop the necessary working relationships.
3. Why do you wish to serve in the position for which you have been
nominated? I wish to serve as a Commissioner of the Federal Maritime
Commission, so that I can contribute to the development of an efficient
and competitive ocean transportation system, that benefits U.S.
shippers, carriers, and the Nation overall, with a minimum of
government intervention and regulatory costs.
4. What goals have you established for your first 2 years in this
position, if confirmed? (a) Fairly and impartially perform the
functions of a Commissioner in the implementation and application of
the relevant laws and regulations.
(b) Improve the business climate for U.S. shippers and carriers by
identifying and eliminating unfair shipping practices.
(c) Pursue increased use of alternative dispute resolution to
minimize regulatory costs borne by shippers, carriers and cruise ship
passengers.
5. Who are the stakeholders in the work of this agency? (a)
Shippers in international liner trades; (b) Vessel operating common
carriers; (c) Freight forwarders; (d) Non-vessel operating common
carriers; (e) Marine terminal operators; (f) Cruise ship passengers;
(g) Cruise liners; (h) Related trade associations.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 5? As a
regulator of the business in which the stakeholders operate and
function, my relationship will one of fairness and impartiality,
combined with understanding and support, to ensure that the
stakeholders are allowed to function free from discriminatory
practices, market distorting activities, and undue financial risk borne
by passengers.
7. Please describe you philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? I believe that
supervisor/employee relationships must be based upon open
communications and mutual support. I follow the model of participative
supervisory activities.
It is important to encourage and support continued education and
training programs for employees to improve promotional capabilities
within an organization.
I do not recall any substantive employee complaints being brought
against me.
8. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. I have no current or past working
relationship with the Congress.
9. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your board/commission
comply with the spirit of the laws passed by Congress. It is essential
that regulations comply with the spirit of the laws passed by Congress.
This can be accomplished by seeking comments and advice from both the
Committee and the stakeholders to ensure that current or pending
regulations are developed that are in concert with the law, are
achievable and enforceable.
10. In the areas under the board/commission jurisdiction, what
legislative actions(s) should Congress consider as priorities? State
your personal views. It is believed that Congress, with the passage and
implementation of the Ocean Shipping Reform Act of 1998, has
satisfactorily met the requirements under the board/commission
jurisdiction for the foreseeable future.
11. Please discuss your views on the appropriate relationship
between a voting member of an independent board or commission and the
wishes of a particular President. A voting member of an independent
board, while greatly valuing the views of the President, must give all
sides of an issue or case due consideration, must make an objective,
impartial and fair decision based upon the merits of each issue or
case.
Senator Breaux. Thank you, Mr. Blust, for being with us and
for, again, your willingness to serve in this position.
You mention in your statement the question of security and,
of course, that is appropriately the buzz word in Washington,
as it appropriately should be today. About security, we happen
to believe that port security is something that should be the
highest priority.
As you know, the Senate has passed the Port Security Act.
We reported out of this Committee amendments to that Act to
make it even stronger, yet the House of Representatives has
failed to--I am sorry, they did pass it last night. Good news,
they passed it last night, so at least the House has now
finally acted, so we ought to have a port security bill passed
by the Senate and the House and hopefully, the conference can
come through with something quickly.
My point in raising this is, how do you envision the
Federal Maritime Commission being helpful in this whole area?
As I have said in the past, we are not just going to be
able to allow the Coast Guard to do everything. It seems that a
lot of the ports and a lot of people in the shipping business
feel that the Coast Guard is going to take care of port
security. It actually has to be local government officials,
local port authorities, the Coast Guard, state police, the
National Guard, port and harbor police, everybody has to be
involved.
Now, I am wondering whether you envision any potential role
for the Federal Maritime Commission in providing information,
perhaps, to the Department of Transportation in terms of
shipping contracts and who is doing what, and cargo, and
anything of that nature. Is there anything that can come out of
the Federal Maritime Commission that could be helpful in the
area of security?
Mr. Blust. Mr. Chairman, I do believe that the Federal
Maritime Commission can greatly help in the process by being
primarily in a support role to the major efforts that are going
forward. The FMC has a tremendous wealth of information
available through the licensing processes that they have, the
agreements that are filed, the service contracts that are
filed, the tariffs that are published in the process, and the
FMC staff understands the business flow. They understand the
commercial aspects of how cargo moves, and the relations
between carriers and shippers, and the intermediaries, and I
believe that they would be able to bring that into the process,
cross-referencing information on shippers.
If a particular entity is under review by another agency,
it is possible that there may be information within the records
or in the files of the FMC that could help in supporting that.
Senator Breaux. I would certainly encourage you to do that
as Chairman, and Hal being down there, it seems that a lot of
the problems that we are seeing in intelligence information is
due to a lack of sharing that information among the relevant
agencies and the government, the CIA not wanting to tell the
FBI, the FBI not wanting to tell the state police, and people
wanting to keep their information internally, and sometimes if
that information is shared, the results will be far more
positive in helping to stop things that should not happen
before they happen. I would really encourage the FMC to take a
look at everything you all do and say, look, can anybody else
benefit from this information?
You would hate to find out that you had information
internally that, had it gone to the proper law enforcement
authorities from a criminal standpoint, or from an intelligence
standpoint, may have prevented shipments from going someplace
and causing damage. If you have information that should set off
flags and bells and whistles that something is wrong with this,
we have never seen this carrier before in this trade, and is
there something we need to check here, and do not hesitate to
do that.
Let me ask a question about this recent Supreme Court
decision, which I happened to read in the paper, and I see the
staff has it listed here, about the cruise line that filed suit
against the Port of South Carolina alleging discrimination in
favoring one carrier over another carrier.
That case went all the way to the Supreme Court, and the
United States Supreme Court, in a recent 5-4 decision, said the
FMC does not have jurisdiction to litigate against states, that
the states are protected against federal suits because of state
sovereignty.
Do you have any concerns? Is that case going to cause us
problems? As I read the Supreme Court decision, you are going
to be prohibited from taking any action against any kind of
state port authority. Do you have any comment on it, and I will
ask Hal if he has a comment on it.
Mr. Blust. Mr. Chairman, there is a fine point that was
brought out in the ruling and the decision by the Supreme
Court, and that is in the area where an individual, a private
individual, a private citizen would go through the Federal
Maritime Commission with a formal complaint seeking monetary
reparations in the event of harm from a State agency.
The Supreme Court said that the Federal Maritime Commission
is not able to pursue that, but they could pursue non-monetary
investigations, and on their own initiation, or through an
informal complaint or request pursue it. But what it does is,
it narrows some of the options that are out there. It would
also have an impact on the Commission's staff, where more of
the homework would have to be done by them, and more of the
research, making it a little more difficult than if the prior
belief, or what the Commission was pursuing, had gone forward.
The other area is that the individual, the private
individual that saw harm or felt that they were harmed now has
to deal with several different approaches. If it is a terminal
that is privately owned, they can pursue it through the Federal
Maritime Commission. If it is owned by the State, as in the
case of South Carolina, it has to go through another avenue,
and they may not be able to collect any monetary reparations.
Senator Breaux. Hal, how do you see that case?
Mr. Creel. Mr. Chairman, I agree with Mr. Blust, the ruling
is limited to a private individual bringing a case to the FMC
formally. An individual could still bring a case informally to
us and the FMC could of its own volition go forward against the
State entity. Ironically, I think the press has characterized
this as a diminution in the responsibilities of the FMC, and I
would argue just the opposite, that it increases the
responsibilities of the FMC, because now the FMC has to step
into the shoes of those individuals that may be aggrieved
because of problems with the State.
Senator Breaux. You interpret the case to mean that the
Federal Maritime Commission on its own initiative could file a
complaint in Federal court against a State port authority for
discrimination?
Mr. Creel. Yes, sir.
Senator Breaux. But they could not do it on behalf of a
citizen?
Mr. Creel. That is right. An individual citizen could not
file a formal complaint with the FMC, but they could informally
give us information that would lead us to go out on our own.
Senator Breaux. So it is sort of a distinction without a
difference, really.
Mr. Creel. Except it really does put more of the onus on
the Commission itself, rather than the aggrieved individual.
Senator Breaux. But you interpret that case to mean that in
the same set of facts in the South Carolina case that was
presented at the Supreme Court, that had the carrier just
informed the FMC of discrimination, and the FMC considered that
evidence, that the FMC on their own then could file a complaint
in federal court?
Mr. Creel. That is right.
Senator Breaux. So really you would still have the same
ability to influence as you would before. That is an
interesting idea, because you do not get that from reading the
newspaper accounts of the case.
Mr. Creel. That is right.
Senator Breaux. Well, Mr. Blust, we are joined by our
Ranking Member from the great maritime state of Arizona. The
President has appointed a terrific gentleman here who is a
Merchant Marine graduate, John, and with a great deal of
experience in this business, to be Chairman. We have just asked
him a few questions, and he has made an opening statement. If
you have any comments you would like to make.
STATEMENT OF SENATOR JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
Senator McCain. Thank you, Mr. Chairman. After the next
earthquake, we will be a coastal State. I congratulate you,
sir, on your nomination to be Commissioner of the Federal
Maritime Commission. With your years of experience serving in
the maritime community, including your current position as
President and CEO of Tampa Bay International Terminals, and
your previous experiences, you are well-qualified, I believe.
In your role, you will have the unique responsibility of
setting the course the Commission takes over the next several
years, and it will be important that, given the limited
resources, the priorities you establish are sound and carried
out in an efficient manner.
Over the past several years, the liberalized exemption
authority under the Ocean Shipping Reform Act has helped
diminish this fear of collusion among carriers. A more defined
commercial market system is creating new openings to increase
trade among nations. The Ocean Shipping Reform Act has begun to
show signs of success, and I would like to see this pattern of
deregulation continue.
The duties of the Commission are important to the daily
functions of trade and commerce in the United States. In the
age of the global marketplace, you will be in a position that
can help ensure fair maritime trading practices. I am confident
you will be up to the challenges in store for you both as a
Commissioner and as a Chairman.
[The prepared statement of Hon. John McCain follows:]
Prepared Statement of Senator John McCain
I congratulate you, Mr. Blust, on your nomination to be a
Commissioner of the Federal Maritime Commission. The President has
indicated that upon confirmation by the Senate, you will be designated
its Chairman. With your years of experience serving in the maritime
community, including your current position as President and CEO of Bay
International Terminals and your previous tenure at Lykes Brothers
Steamship Company, I believe you are well qualified for this position.
As a Commissioner, you, along with your fellow commissioners, will
be charged with regulating the waterborne foreign commerce of the
United States and ensuring that U.S. international trade is open to all
nations on fair and equitable terms. To ensure these mandates are
achieved, you will have to, among other things, be vigilant in your
enforcement of prohibitions against discriminatory acts and other
prohibited practices. You will also be charged with ensuring that
adequate levels of financial responsibility are maintained for
indemnification of waterborne passengers.
In your role as Chairman, you will have the unique responsibility
of setting the course the Commission takes over the next several years.
It will be important that, given the limited resources of the agency,
the priorities you establish are sound and carried out in a efficient
and effective manner.
Over the past several years, the liberalized exemption authority
under the Ocean Shipping Reform Act, (OSRA), has helped diminish the
sphere of collusion among carriers. A more defined commercial market
system is creating new openings to increase trade among nations. OSRA
has begun to show signs of success, and I, for one, would like to see
this pattern of deregulation continue.
The duties of the Commission are important to the daily functions
of trade and commerce in the United States. In the age of a global
marketplace, you will be in a position that can help ensure fair
maritime trading practices. I am confident you will be up to the
challenges in store for you both as a Commissioner and as Chairman.
I would like to take this opportunity to thank Mr. Blust for being
here today and thank you in advance for your service. I know your
nomination is a great honor and that your family is very proud.
Senator McCain. Exercising the duties of old age and
latitude on this Committee, I want to ask you what may be
viewed by you as an off-the-wall question. Why is it that every
yacht of any size that I see in any port in America with an
American name on it has a foreign flag, any large vessel that
you see in any port?
Mr. Blust. In the commercial----
Senator McCain. And non-commercial. I am talking about a
yacht. Do you know why?
Mr. Blust. No, sir. I am not a sailing buff.
Senator McCain. Well, let me tell you why. It is because of
the Jones Act, I am told, and that is that if you want to have
a crew on your yacht, then that crew has to be all American
employees. So all of these American yacht owners register their
boats in Liberia, or the Cayman Islands, or some other place,
so that they can have foreign-born and foreign citizens onboard
their ships. You do not know anything about that?
Mr. Blust. No, sir. It has been an area I have not been
involved in, but I think the Federal Maritime Commission does
not get involved in the Jones Act.
Senator McCain. Does the Maritime Commission get involved
in the issue of flagging non-commercial vessels?
Mr. Blust. No, sir. The Federal Maritime Commission does
support the commercial U.S. flag side, but not on the yacht
side.
Senator McCain. Let me switch subjects again. I was reading
a story about Mr. Charles Taylor, the Liberian dictator who has
been responsible for the deaths of thousands and thousands of
people, I am told, in numbers, and according to several stories
I have read, one of his major sources of revenue is from ships
registered under a Liberian flag. Do you have any views on
that?
Mr. Blust. The flags are commonly called ``flags of
convenience.'' Liberia and other countries have been in
existence for a number of years, and it is an avenue for
shipowners to have vessels that take advantage of lower
taxation. Now it has become international manning standards. In
years past, it had been done country by country, but now there
is an international standard for the international flag vessels
that are out there, which has reduced some of the risks and
concerns of vessels that were operating that were not up to
today's standards.
Senator McCain. Should it not bother you that ships owned
by citizens of the United States of America that operate
carrying mainly U.S. goods and products around the world should
be subsidizing and keeping in power a ruthless dictator who--I
mean, the crimes that they have committed are unspeakable. Does
that concern you?
Mr. Blust. Of that nature, yes, sir, that would concern me.
Senator McCain. Should we not look at why the laws are such
that we drive these ships to register in a God-awful place like
Liberia?
Mr. Blust. That probably would be warranted.
Senator McCain. It removes your supervision of them, does
it not?
Mr. Blust. Not in the U.S. trade, sir. In U.S. trade, the
Federal Maritime Commission would oversee vessels in trade in
the commercial liner side whether they are U.S. flag or non-
U.S. flag vessels, so it really does not change the
Commission's role in that sense. But it does not help support,
the support of the U.S. merchant fleet and, that being a
separate issue, is a major issue that is well worth pursuing
and reevaluating.
Senator McCain. I mean, it is a joke and a sham. I doubt if
there is one Liberian citizen that has any interest of any kind
in any of these ships.
Well, again, I understand that it is out of the norm, but
those two issues have bothered me for some time, and I
congratulate you on your nomination, and I look forward to
working with you and Senator Breaux, who does represent a
coastal State, who will be working with you more than I will,
but I am sure you will enjoy that as well. I again congratulate
you on your nomination, and we look forward to having you at
work as soon as possible.
Thank you, Mr. Chairman.
Senator Breaux. I thank the Senator for making his comments
on the point of the Liberian flag vessel. During the port
security hearing, it is interesting that one of the things we
learned was that Panama, which is also a flag of convenience
where many of these ships are flagged, we actually caught them,
the U.S. government, providing about a thousand false documents
for Panamanian sailors on Panamanian ships. I mean, you just go
in there and pay your money, and you get your documentation
that you are a licensed crew person to serve on those vessels.
These vessels come into every port in the United States, many
of them with crews that have false documentation. How easy it
is for a potential terrorist to go down to Panama and pay the
right person, get the documentation that you are a licensed
seaman to sail on one of their vessels, and to come into the
Port of New Orleans, or the Port of Long Beach, or anywhere
else, and cause a great deal of damage.
It is a real, huge problem. It is not your area, but it is
a huge problem.
Well, I thank the Senator for making that point, and Mr.
Chairman-to-be, congratulations, and we will get to your
confirmation just as soon as we can, and with that, the hearing
will stand adjourned.
[Whereupon, at 10 a.m., the hearing was adjourned.]