[Senate Hearing 108-1036]
[From the U.S. Government Publishing Office]




                                                       S. Hrg. 108-1036

                    NOMINATIONS TO THE DEPARTMENT OF
                COMMERCE, THE FEDERAL TRADE COMMISSION,
                      THE AMTRAK REFORM BOARD, AND
             SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 2, 2004

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
               [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]        


                Available online: http://www.govinfo.gov
                
                
                                   ________
                       
                       U.S. GOVERNMENT PUBLISHING OFFICE
                
37-175 PDF                       WASHINGTON: 2019



                
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South 
CONRAD BURNS, Montana                    Carolina, Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          JOHN D. ROCKEFELLER IV, West 
OLYMPIA J. SNOWE, Maine                  Virginia
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois        BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  RON WYDEN, Oregon
GEORGE ALLEN, Virginia               BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
                                     MARIA CANTWELL, Washington
                                     FRANK R. LAUTENBERG, New Jersey
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Robert W. Chamberlin, Republican Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel
                
                
                
                
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 2, 2004.....................................     1
Statement of Senator Boxer.......................................     8
    Prepared statement...........................................    10
Statement of Senator Lautenberg..................................    10
Statement of Senator McCain......................................     1
    Prepared statement of Hon. George Allen, U.S. Senator from 
      Virginia...................................................     2
Statement of Senator Smith.......................................     7
    Letter dated April 5, 2004 to Hon. Timothy J. Muris, 
      Chairman, Federal Trade Commission from Hon. Gordon H. 
      Smith, Chairman, Subcommittee on Competition, Foreign 
      Commerce, and Infrastructure...............................     8
Statement of Senator Wyden.......................................     2

                               Witnesses

Boehlert, Hon. Sherwood L., U.S. Representative from New York....     3
DeWine, Hon. Mike, U.S. Senator from Ohio........................     4
Kohl, Hon. Herbert H., U.S. Senator from Wisconsin...............     5
Leibowitz, Jon, Nominated to be a Commissioner, Federal Trade 
  Commission.....................................................    40
    Prepared statement...........................................    41
    Biographical information.....................................    42
Majoras, Deborah Platt, Nominated to be Chairman, Federal Trade 
  Commission.....................................................    28
    Prepared statement...........................................    29
    Biographical information.....................................    30
Palmer, Brett, Nominated to be Assistant Secretary, Legislative 
  and Intergovernmental Affairs, U.S. Department of Commerce.....    12
    Prepared statement...........................................    13
    Biographical information.....................................    14
Ryan, Hon. Paul D., U.S. Representative from Wisconsin...........     6
Sosa, Enrique, Nominated to be a Member, Amtrak Reform Board.....    48
    Biographical information.....................................    48
Walker, Scott K., Nominated to be a Member, Advisory Board, Saint 
  Lawrence Seaway Development Corporation........................    52
    Prepared statement...........................................    53
    Biographical information.....................................    53
Wu, Benjamin H., Nominated to be Assistant Secretary, Technology 
  Policy, U.S. Department of Commerce............................    20
    Prepared statement...........................................    22
    Biographical information.....................................    23

                                Appendix

Hatch, Hon. Orrin G., U.S. Senator from Utah, prepared statement.    80
Hollings, Hon. Ernest F., U.S. Senator from South Carolina, 
  prepared statement.............................................    79
Letter dated May 4, 2004 to Hon. John McCain from June Ling, 
  Associate Executive Director, Codes and Standards; and James F. 
  Thomas, President, ASTM International..........................    80
Letter dated June 8, 2004 to Hon. John McCain and Hon. Ernest F. 
  Hollings from Harvey Applebaum, E.W. Barnett, John DeQ. Briggs, 
  Roxane C. Busey, Ky P. Ewing, Jr., James Halverson, Carla 
  Hills, Caswell O. Hobbs, Robert T. Joseph, Janet L. McDavid, 
  Richard Pogue, Phillip A. Proger, Harry Reasoner, J. Thomas 
  Roch, James F. Rill, Irving Scher, Alan H. Silberman, Robert 
  Taylor and Robert Weinbaum.....................................    81
Response to written questions submitted by Hon. John McCain to:
    Brett Palmer.................................................    83
    Benjamin H. Wu...............................................    84
Response to written questions submitted to Deborah Majoras by:
    Hon. George Allen............................................    92
    Hon. John Ensign.............................................    87
    Hon. Frank R. Lautenberg.....................................    94
Response to written questions submitted to Jon Leibowitz by:
    Hon. George Allen............................................    97
    Hon. Sam Brownback...........................................    96
    Hon. John Ensign.............................................    97
    Hon. John McCain.............................................    94
    
    
    

 
                    NOMINATIONS TO THE DEPARTMENT OF
                      COMMERCE, THE FEDERAL TRADE
                  COMMISSION, THE AMTRAK REFORM BOARD,
           AND SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

                              ----------                              


                        WEDNESDAY, JUNE 2, 2004

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:34 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John McCain, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    The Chairman. Good afternoon. The Commerce Committee meets 
today to consider the nominations of six individuals who have 
been nominated by the President to serve our country in very 
important positions.
    This Committee takes its advice and consent role very 
seriously, and I will note that each of the nominees has 
responded in detail to the Committee's request for biographical 
and financial data. I've had the opportunity to review your 
responses to the Committee questionnaire, and I look forward to 
moving your nominations.
    We have, appearing before the Committee today, Brett 
Palmer, to be Assistant Secretary for Legislative and 
Intergovernmental Affairs, and Benjamin Wu, to be Assistant 
Secretary for Technology Policy, both with the Department of 
Commerce; Jon Leibowitz and Deborah Majoras, to be 
Commissioners of the Federal Trade Commission; Enrique Sosa, to 
be a Member of the Amtrak Reform Board; and Scott Walker, to be 
a Member of the Advisory Board of the Saint Lawrence Seaway 
Development Corporation.
    I thank the nominees for being here today, and I note the 
presence of several of my colleagues, who are here to speak on 
behalf of several of the nominees.
    I would also like to note, before recognizing them, that 
Senator Allen regrets he can't be here at the hearing to 
introduce Deborah Majoras, and has asked that his statement on 
behalf of Ms. Majoras be submitted for the record. And, without 
objection, so moved.
    [The prepared statement of Senator Allen follows:]

  Prepared Statement of Hon. George Allen, U.S. Senator from Virginia
    Mr. Chairman and members of the Committee, it is my privilege to 
introduce for your consideration a fellow Virginian, Ms. Deborah 
Majoras, to be Chair of the Federal Trade Commission.
    As an independent regulatory agency, the FTC is one of the most 
important tools available for protecting individual consumers.
    The Commission is primarily charged with eliminating unfair or 
deceptive practices affecting commerce and protecting competition in 
our free market economy.
    Ms. Majoras is extraordinarily well qualified for an appointment to 
the Federal Trade Commission.
    She is an experienced antitrust lawyer, with extensive experience 
both in private practice and in government service.
    Ms. Majoras earned her undergraduate degree from Westminster 
College and her JD from the University of Virginia, School of Law in 
May of 1989.
    Currently, Debbie is a partner at the law firm Jones Day in 
Washington where she practices antitrust and competition law.
    At the firm she handles a variety of antitrust counseling and civil 
and criminal litigation matters, including mergers and acquisitions, 
monopolization and price-fixing conspiracies.
    Debbie is also a member of the Firm's Technology Issues Practice.
    In April of 2001, Ms. Majoras became the Deputy Assistant Attorney 
General at the Department of Justice Antitrust Division and later in 
her tenure became the Principal Deputy Assistant Attorney General.
    At the Department of Justice, her responsibilities included 
directing the Antitrust Division's civil and regulatory enforcement 
program, including supervision of all civil and regulatory merger and 
non-merger investigations, litigation, and policy issues.
    Additionally, she served as Counsel to then Acting and now sitting 
Assistant Attorney General Hewitt Pate.
    Ms. Majoras supervised and served as the principal negotiator of 
the settlement in, United States v. Microsoft Corp.; as well as 
supervised the litigation in U.S. v. General Dynamics and U.S. v. 3D 
Corp.
    Mr. Chairman, it is important to note (and perhaps some may not 
like this) but when Ms. Majoras is confirmed, the two top antitrust 
enforcers in the United States Government will be Virginians and 
University of Virginia Law graduates.
    Mr. Chairman, members of the Committee, it is my sincere pleasure 
to introduce this exceptional nominee and outstanding Virginian to you 
this afternoon, and I recommend her swift approval by the Committee.
    Thank you.

    The Chairman. Senator Wyden?

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman.
    Mr. Chairman, obviously there are several reasons why 
gasoline prices are soaring. Certainly increases in worldwide 
demand, the mischief of OPEC, and lack of effective 
conservation measures are significant factors. Today's hearing 
is important because the Federal Trade Commission's long-
running campaign of inaction on gasoline pricing is also a 
major factor in the escalating prices our consumers are paying.
    I'm of the view that gasoline pricing is one of the most 
important consumer-protection issues that the Federal Trade 
Commission is responsible for overseeing. Yet during both the 
Clinton and the Bush Administration, the Federal Trade 
Commission has sat on its hands and ignored oil-company mergers 
that short-change consumers, anti-competitive refinery 
practices that jack up prices, and market-distorting practices 
such as redlining, where oil companies restrict competition by 
preventing their wholesalers from selling to dealers.
    In effect, for years now the Federal Trade Commission has 
denied, delayed, and deflected when it comes to consumer 
protection on gasoline prices. Right now, it is denying the 
effect of a rash of oil-company mergers on consumers that the 
General Accounting Office has found led to gasoline price hikes 
of up to seven cents a gallon on the West Coast of the United 
States. It is delaying inquiries into questionable refinery 
practices, such as the Bakersfield refinery closure that I and 
several members of the Senate are concerned about. And it is 
deflecting responsibility on redlining, which the agency itself 
has found--the agency has found to be an anti-competitive 
practice in its inquiry.
    This is an extremely important hearing, Mr. Chairman. I 
intend to do everything I can, as a Member of the Senate, to 
force a change at the top in the Federal Trade Commission's 
policies for protecting gasoline consumers. My constituents 
and, I think, all Americans deserve it, and I appreciate your 
holding this hearing.
    The Chairman. Thank you, Senator Wyden.
    I'd like to thank my colleagues for appearing here on 
behalf of some of the nominees. We appreciate you taking the 
time from your busy schedule to appear, and we recognize that 
you'll be unable to stay because of other business, and I 
appreciate the fact that you're here.
    I would notice, as a matter of historical trivia, that our 
two middle Members, Senator DeWine and Congressman Boehlert, 
and I came to the House of Representatives together in the 
vintage year of 1982, and all have obviously failed miserably 
since, but I----
    [Laughter.]
    The Chairman.--want to recognize my friends. And, if it's 
OK with you, Mike, we usually go with the oldest first, so 
we'll begin with you, Mr. Boehlert.
    [Laughter.]
    The Chairman. Thank you for being here.

            STATEMENT OF HON. SHERWOOD L. BOEHLERT, 
               U.S. REPRESENTATIVE FROM NEW YORK

    Mr. Boehlert. Thank you very much, Mr. Chairman. I want to 
thank you for allowing me to appear here today.
    I'm here because you're considering one of our former 
Science Committee staffers, Ben Wu, to be the Assistant 
Secretary of Commerce for Technology. I hope we will able to 
confirm Ben expeditiously to this important position.
    The Assistant Secretary has important duties overseeing 
programs and policies that affect the economic competitiveness 
of the United States. It is not a position that should be 
allowed to remain vacant. And Ben is well-qualified to fill it.
    For 8 years, he served on the House Science Committee, 
working with all of us, but most closely with Representative 
Connie Morella, who chaired what was then the Technology 
Subcommittee. Through his work on that Subcommittee, Ben 
developed expertise on a wide range of technology issues, 
including Y2K, information technology, and standards policy, 
all issues he will be dealing with, I hope, as Assistant 
Secretary. Ben has also labored with these issues in his 
current post of Deputy Under Secretary for Technology, a job 
that requires him to help supervise policy and management of 
the technology administration and its more than 3,000 
employees. Ben has shown himself to be equal to the task.
    Mr. Chairman, you and I will have many discussions in the 
coming months, I'm sure, about the issues with which Ben will 
be dealing. We both have pending bills on a variety of issues 
that involve the National Institute of Standards and 
Technology, manufacturing programs, and information technology. 
That just names a very few. We are interested in a lot of 
things, and we have been for a lot of these years, Mr. 
Chairman.
    I am hopeful that Ben Wu can be an able and helpful partner 
in these efforts, and I urge his confirmation.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Congressman Boehlert. 
Thank you for taking the time to come over and join us today.
    Senator DeWine?

                STATEMENT OF HON. MIKE DeWINE, 
                     U.S. SENATOR FROM OHIO

    Senator DeWine. Mr. Chairman, Senator Wyden, I'm pleased to 
be here today, with my friend and colleague, Senator Kohl, to 
join in the introduction of his former Staff Director, Jon 
Leibowitz, and strongly recommend him to your Committee for 
confirmation as Commissioner of the Federal Trade Commission.
    I first worked with Jon starting back in the spring of 
1997. Senator Kohl and I had just taken over as Chair and 
Ranking Member of the Antitrust Subcommittee, and Jon was 
Senator Kohl's Minority Staff Director. Senator Kohl and I knew 
that we wanted the Subcommittee to be run in a professional, 
bipartisan way, and that we wanted the Subcommittee to promote 
competition and to work for consumers. And, right from the 
beginning, Jon was always able to do just that. The 
Subcommittee staff planned the agenda together, did the 
meetings together, did the work together, and held the hearings 
together. And, as a result, I think that we were effectively 
able to promote competition and really accomplish more for 
consumers than we could have otherwise.
    In working with Jon, Mr. Chairman, on competition policy, 
Jon was always open-minded, pro-consumer, pro-competition, 
tough on mergers, but fair to the merging parties. If 
government agencies were going too slow, he pushed them to make 
decisions and provide the certainty that business needed. If a 
merger were going to substantially lessen competition, Jon and 
the rest of the Subcommittee would work with the parties to 
resolve the issues or hold a hearing or send a letter to let 
regulators know that the deal posed problems. If a merger 
didn't pose problems, he did his best to get out of the way and 
let the marketplace work.
    Everything Jon did during his time working on the 
Subcommittee was to promote competition, and that is one of the 
reasons I believe that he will be a very fine commissioner. But 
the other reason is that Jon is such an easy person to work 
with. He's always looking for solutions to problems, looking 
for ways to work across the aisle to get things done, looking 
for a way to be reasonable instead of partisan. Time after 
time, his efforts in the past have been rewarded with solid, 
effective competition policy.
    The substantive skills and background that he brings to the 
Federal Trade Commission will make him a knowledgeable 
Commissioner. But it's his people skills and genuine good 
nature that will help make him an enormous asset to the 
Commission. I can't think of anyone better suited to the 
position of Commissioner, and I certainly wholeheartedly join 
Senator Kohl in recommending Jon for confirmation.
    I want also to mention that I know Jon and his family, as 
well as many other people who appear before this Committee, 
make a financial sacrifice, and I salute him for doing that, as 
well.
    Mr. Chairman, I also want to take a moment to say a few 
words about the nominee for Chair of the FTC, Debbie Majoras. 
Senator Allen, as you have noted, had planned to be here today 
to introduce her, but had an unexpected scheduling conflict. In 
his absence, I would like to tell the Committee that she 
certainly is a very fine nominee to be chair of the FTC. I'm 
very pleased to say a few words on her behalf.
    She spent several years as deputy in the antitrust 
division, and worked extensively on the Microsoft case, among 
other important issues. My office worked a great deal with her, 
and we have always been impressed with her knowledge, her 
professionalism. And I believe that she will be an excellent 
choice.
    And, of course, it certainly doesn't hurt, I must say, that 
she lived in my home state of Ohio, and worked there at a very 
highly regarded law firm of Jones Day. Having a good supply of 
Ohioans to fill these important agency positions, Mr. Chairman, 
is always of benefit to the agency, and I'm particularly glad 
to see that she has been nominated to lead the FTC.
    Mr. Chairman, you have in front of you two excellent 
candidates for the FTC. I'm just pleased to be here today to 
urge their confirmation.
    I thank the Chair.
    The Chairman. Thank you very much, Senator DeWine.
    Senator Kohl, welcome.

              STATEMENT OF HON. HERBERT H. KOHL, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Kohl. Thank you, Mr. Chairman and Members of the 
Commerce Committee.
    It is my pleasure today to introduce and enthusiastically 
support the nomination of Jon Leibowitz to the Federal Trade 
Commission. As some of you know, this nomination is a matter of 
particular pride for me, because Jon served as Chief Counsel on 
my Judiciary Committee staff for 12 years.
    Jon Leibowitz is a dedicated public servant and an 
excellent lawyer who has served the Senate with distinction. He 
is equipped with a creative and analytical mind, a sharp wit, 
and an ability to make sound judgments. Working with Jon was a 
joy, and having his wife Ruth and his children, Emma and Julia, 
as friends has been a pleasure. I'm confident that he will 
serve with great distinction as a Member of the Federal Trade 
Commission.
    Jon's experience during this last 4 years on my staff, when 
he served as Minority Chief Counsel on the Antitrust 
Subcommittee, leave him particularly well qualified to become 
an FTC Commissioner. He gained significant knowledge of the 
wide range of issues that fall within the ambit of the Federal 
Trade Commission, all with an eye to protecting consumers and 
business competition.
    He worked on mergers in a number of areas, from the media, 
to the oil industry, to aviation and healthcare. He focused on 
privacy issues, broadband, and other telecommunication matters.
    Areas worth mentioning specifically are Jon's work on media 
consolidation and media violence. Jon worked diligently on 
media mergers with an eye toward protecting the marketplace of 
ideas. In addition, Jon was instrumental in our project to 
combat media violence, which led to the first ratings system 
for the video-game industry.
    It is gratifying when someone who possesses exceptional 
talents and abilities and a strong desire to serve our Nation 
and protect consumers is entrusted with such an important post. 
I strongly endorse Jon Leibowitz's nomination to the Federal 
Trade Commission, and I urge my colleagues to join me in 
supporting him.
    Mr. Chairman, I would also like to introduce Milwaukee 
County Executive Scott Walker to this Committee. The President 
has nominated Scott for a position on the Advisory Board for 
the Saint Lawrence Seaway Development Corporation, and we look 
forward to his confirmation, as well.
    Mr. Chairman, I thank you for the opportunity to appear 
before you and your Committee today.
    The Chairman. Thank you very much for being here.
    Congressman Ryan, welcome. Thank you for coming today.

                STATEMENT OF HON. PAUL D. RYAN, 
               U.S. REPRESENTATIVE FROM WISCONSIN

    Mr. Ryan. Thank you, Mr. Chairman. I hope it's not out of 
place to say I was 12-years-old in 1982.
    [Laughter.]
    The Chairman. It is.
    [Laughter.]
    Mr. Ryan. I thought so.
    [Laughter.]
    The Chairman. But we thank you for joining this Senior 
Citizens Panel.
    [Laughter.]
    Mr. Ryan. Thanks for having me. I appreciate being here 
today. I am here to support Scott Walker--County Executive 
Scott Walker--in his nomination to the Saint Lawrence Seaway 
Development Corporation.
    The story about Scott Walker is a very intriguing and 
interesting one. Scott Walker came to office in the middle of a 
pension scandal in Milwaukee County a little over a year ago. 
This was a very bitter and divisive political climate, and what 
he did was truly remarkable. Not only did he win with a great 
mandate at that election, but, immediately when Scott Walker 
came into office, it was a very bitter political climate, and 
he sought to build bridges. He had an inclusive style, but very 
transparent reforms to county government, consolidated 
redundant programs, and, as a result of all of those things--
bringing people together, making government more transparent, 
more accountable to the people--he was just reelected last 
April with an overwhelming majority vote. And so I think that a 
person with Scott's skills, his abilities, the things he's 
already proven to do--to have two property-tax budgets with 
property-tax freezes, no increase in the country government 
levy--are skills that would be very welcomed on this 
Commission. He also has great legislative experience behind him 
because he served for 10 years in the state legislature prior 
to that.
    So I would just simply like to lend my support and 
introduction for Scott Walker to the Saint Lawrence Seaway 
Development Corporation. I think he'd be a great addition to 
it. He's also in the forefront of economic development in 
Milwaukee, which, of course, Lake Michigan is a great part of 
that. And so having someone who's familiar with economic 
development commerce on the Great Lakes as part of this 
Commission I think would be some great attributes and skills 
that are very much needed for this Commission. So I heartily 
support his nomination.
    The Chairman. Thank you very much.
    Mr. Ryan. Thank you.
    The Chairman. Don't ever come back here again.
    [Laughter.]
    The Chairman. I want to thank all of you for coming today, 
and we look forward to hearing from your witnesses. Again, 
thank you for taking the time to be here on behalf of these 
nominees. We thank you for appearing before the Committee.
    Now we'll have Mr. Brett Palmer, who is nominated to be 
Assistant Secretary for Legislative and Intergovernmental 
Affairs with the Department of Commerce.
    Will you all please come forward?
    Mr. Benjamin Wu is nominated to be Assistant Secretary for 
Technology Policy with the Department of Commerce; Mr. Jon 
Leibowitz, nominated to be a Commissioner of the Federal Trade 
Commission; Ms. Deborah Majoras, nominated to be a Commissioner 
of the Federal Trade Commission; Dr. Enrique Sosa, nominated to 
be a Member of the Amtrak Reform Board; and Mr. Scott K. 
Walker, who's nominated to be a Member of the Advisory Board of 
the Saint Lawrence Seaway.
    Senator Smith, would you like to make an opening comment, 
or Senator--go ahead.

              STATEMENT OF HON. GORDON H. SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Very, very briefly. I apologize. I was at a 
press conference on importing prescription drugs, but I do have 
a very brief statement.
    I want to express my support today for Ms. Majoras and Mr. 
Leibowitz. The FTC is vital to ensuring fair treatment for 
American consumers, as well as maintaining a competitive 
marketplace for commerce. Mr. Chairman, while I support the FTC 
nominees, I would hope that, before I'm asked to vote on their 
nominations, I'll get a response to a letter that I sent to a 
Federal Trade Commission as Chairman of your Subcommittee on 
Competition, Foreign Commerce, and Infrastructure. On April 5, 
2004, I wrote to the FTC asking that they provide the 
Subcommittee with information relating to any FTC 
investigations of gasoline market pricing since 1973. I would 
like to submit a copy of that letter for the record and 
reiterate that I hope I will get a response soon.
    [The information referred to follows:]

                                       United States Senate
                                      Washington, DC, April 5, 2004
Hon. Timothy J. Muris,
Chairman,
Federal Trade Commission,
Washington, DC.

Dear Chairman Muris:

    In representing my constituents, and in my role as Chairman of the 
Competition, Foreign Commerce, and Infrastructure Subcommittee of the 
Senate Committee on Commerce, Science, and Transportation, I am very 
concerned about the rapid increase in the cost of gasoline. Therefore, 
I am writing to request that the Federal Trade Commission (FTC), over 
which the Competition Subcommittee has jurisdiction, provide the 
Subcommittee with information relating to any FTC investigations of the 
gasoline market since 1973.
    As you are aware, for some time, individual Members of Congress 
have requested that the FTC investigate increases in gasoline prices to 
determine if there has been any price or market manipulation. It is my 
understanding that the FTC has, in fact, investigated the gasoline 
pricing issue numerous times in the past and has not found any evidence 
of wrongdoing. However, the FTC's findings are often not reported, 
which does little to improve consumer confidence in the face of rising 
gasoline prices.
    Specifically, I request that you provide the Competition 
Subcommittee with a list of the gasoline pricing investigations that 
have been performed by the FTC during the past 30 years and a summary 
of the conclusions of each of these investigations. Please include 
those instances when the FTC made a preliminary investigation of 
allegations but eventually determined that the situation did not 
warrant a full-scale investigation.
    If you have any questions concerning this request, please do not 
hesitate to contact me.
            Sincerely,
                                           Gordon H. Smith,
                                                          Chairman,
                                          Subcommittee on Competition, 
                                  Foreign Commerce, and Infrastructure.

    Senator Smith. I'd also like to suggest that the FTC change 
the manner in which it handles such investigations. For some 
time, individual Members of Congress have requested that the 
FTC investigate increases in gasoline prices to determine if 
there has been any price or market manipulation. My colleague, 
Senator Wyden, has been tenacious in pursuing this issue, and I 
congratulate him for that. But it's my understanding that the 
FTC has, in fact, investigated these issues many times, but its 
findings are often not reported, and that does very little to 
instill consumer confidence.
    So I hope they can figure out a better way to do some PR, 
get us the facts, answer our letters so we can vote in good 
conscience on these nominations.
    The Chairman. Thank you very much.
    Would Senator Boxer or Senator Lautenberg like to make an 
opening comment?

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. I'm so pleased, thank you. And I would ask 
unanimous consent to place my full statement in the record, 
please.
    The Chairman. Without objection.
    Senator Boxer. I wanted to welcome Ms. Majoras and Jon 
Leibowitz. I know Jon quite well. I worked with him when he 
worked with Senator Kohl in the MPAA, and it's a delight to see 
you here. And I had a very, I think, honest, straightforward 
meeting with Ms. Majoras, and I welcome her here today.
    Mr. Chairman, I want to take the rest of my time to just 
tell you what we just found out was going on in California 
during the electricity crisis. And a lot of you really helped 
us through that.
    CBS did an amazing job, and they found some tapes here of 
the traders--I don't say ``traitors,'' they were ``traitors,'' 
but ``traders''--of electricity. And I'm just quoting, ``While 
California had a major forest fire that shut down a major 
transmission line, the unidentified man on the phone, trader 
number one, said, `Burn, baby, burn. That's a beautiful thing,' 
and unidentified man number two said, he just `blanked' 
California.'' He steals money from California, to the tune of 
about a million. That's how they treat our people.
    Then in another one, as California was trying to obtain 
refunds, which we still are--and this has to do with the FERC, 
not the FTC; there's a reason for my sharing this--unidentified 
man six, ``They're `blank' taking all the money back from you 
guys, all the money you guys stole from those poor grandmothers 
in California''--that's what they said about our efforts to 
reimburse--``all that money you guys stole from those poor 
grandmothers in California.'' Unidentified man, ``Yes, Grandma 
Millie, man.'' Unidentified man back, ``Yes, she wants her 
`blanking' money back for all the power you've charged right 
up--`blank' jammed right up her `blank' for `blank' $250-a-
megawatt hour.''
    All I could tell you is, you have to listen to what's 
happening out there to ordinary people who you are responsible 
to help through this and protect. And the FERC--and I would 
agree, regardless of who the Administration wants--they never 
stepped up to the plate, and they're still not stepping up to 
the plate. And on gas prices, the FTC hasn't stepped up to the 
plate. Really. Under old Administrations and new.
    And what I want to hear from you--I don't know if you're 
going to give me what I want to hear from you--is this. We are 
just getting killed in California and other states. We've seen 
prices over three bucks a gallon, Mr. Chairman. And Chairman 
Muris has been wonderful to talk to. Wonderful. He says, in an 
informal investigation, he can't figure out why this is 
happening. He calls it an anomaly. But yet they haven't moved 
forward with a formal investigation. We brought up the issue of 
Shell, trying to shut down a refinery that makes 2 percent of 
the gas in California that's produced there, and 6 percent of 
the diesel. And they just bought that refinery 2 years ago as a 
result of a merger between Texaco and Chevron. Now they're 
walking away. First they said it didn't make any money. Then we 
found out, through documents, it's one of the most successful 
refineries in the country, let alone in the state. Then they 
said they didn't really--there were no buyers. Then we found 
out there were 18 buyers.
    There are things going on out there that are really wrong. 
And the FTC--I got a beautiful letter from Chairman Muris, 
``Oh, I'm looking at this. I'm very seriously looking at this 
Bakersfield deal.''
    The point, in closing, Mr. Chairman, is, we need to hear 
from you, How are you going to stand up for the consumer? 
Because we got it in the neck in California; we're getting it 
in the neck again.
    Thanks.
    [The prepared statement of Senator Boxer follows:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator from California
    Good afternoon, thank you Mr. Chairman for holding this hearing 
today.
    I want to welcome Ms. Majoras and Jon Leibowitz who I worked with 
in his capacity with Senator Kohl and with the MPAA. I also welcome the 
other nominees.
    As all of you know, gasoline prices across the country are 
extremely high and even higher in California.
    Nationwide, the average price per gallon of gasoline has risen from 
$1.54 on January 5 to $2.05 on May 31. In California, the price 
increase over this same period has been even sharper, from $1.61 to 
$2.32. In some cases, gasoline prices were over $3 per gallon.
    In April, I announced a 9-point plan to fight this gasoline price 
gouging. The plan includes keeping Shell's Bakersfield refinery in 
operation, pressing OPEC to increase oil production, and using 
America's Strategic Petroleum Reserve to help slow the rise in gas 
prices.
    One very important part of the plan is my call for the Federal 
Trade Commission to undertake a formal investigation of the current 
gasoline price spikes in California.
    In March, I met with outgoing FTC Chairman Moris, who confirmed 
that there was an ``anomaly'' in California's gasoline market and that 
the FTC was conducting an informal investigation.
    I strongly support the Pitofsky-Muris FTC policy of continually 
monitoring gasoline prices for anomalies.
    In addition, I believe that a formal investigation is necessary to 
find out why gasoline prices are out of control.
    I also believe the FTC must take a hard look at anti-competitive 
practices after mergers are completed. For example, Shell took full 
control of the Bakersfield refinery in 2002, after the FTC forced 
Texaco in 2001 to sell its interest in the plant. The FTC feared that 
merging Texaco's ownership with Chevron's own local refinery assets 
would hurt gasoline competition in California.
    Only two years after the FTC's decision, Shell announced it would 
shut the Bakersfield refinery. Shutting this refinery will short 
California of at least 2 percent of its gasoline and 6 percent of its 
diesel supply. This would happen at a time of huge demand and soaring 
prices.
    I believe the FTC must be a voice for consumers. As that voice, it 
needs to take a very hard look at the competitive implications of 
Shell's decision to shut this refinery permanently.
    The FTC's mission is to protect the consumer. I want to ensure that 
the FTC Commissioners are committed to protecting the consumers.
    The FTC is supposed to be the voice of the consumer in government. 
It is vital that the Commissioners--and especially the Chairman--
represent the people and not the companies that come before the 
Commission.
    Thank you, Mr. Chairman.

    The Chairman. Senator Lautenberg?

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman. I appreciate the 
fact that we are having----
    The Chairman. May I just say, before you go on, I saw that 
on television last night, too. It's just--it's so despicable 
that it's hard to imagine.
    Senator Lautenberg, I'm sorry to interrupt.
    Senator Lautenberg. No, that's all right. Thanks, Mr. 
Chairman.
    These are important nominees, and we'd like to welcome 
them. I am certain that every one of them is a well- qualified 
nominee. But the problem I'd like to get to--and it's 
consistent with now the cost of energy in transportation, in 
particular--I have an active interest in Amtrak. And I welcome 
Mr. Sosa. And this criticism is not directed at all to Mr. 
Sosa, but rather to the fact that from the White House we've 
lost some of the commitments to bipartisanship. And this loss 
of bipartisanship has been an unfortunate theme these days. And 
even now, as we see it, the President threatens to veto a 
bipartisan agreement on highway funding in both houses of 
Congress.
    Now, membership on the Amtrak Board is not a political 
vehicle for the Administration officials to bring home an 
ideology. It is an invaluable mode of transportation in this 
country and one that more and more people are relying upon. And 
without intercity passenger rail service, some 25 million 
people every year would be on the road or in the air, in line 
at the airports as the summer season comes about.
    Furthermore, Mr. Chairman, I'd like to remind everybody 
that the authorization for funding of Amtrak is a matter for 
this Committee to decide. Now, we decided last year that up to 
$2 billion a year may be necessary to get this railroad back on 
track, to use the expression, to a good state of repair and 
operating efficiently and safely.
    And, once again, I am pleased that the nominees are here 
today, and I raise my protest because it is a matter of 
concern. One of the things that I hope, in the future, that 
we'll be able to do is provide a serious bipartisan 
participation in all of these decisions.
    And I thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Lautenberg.
    Before we begin our statements, I'd like to ask the 
witnesses if they'd like to introduce members of their family 
who are here today to appreciate this very important moment. 
We'll begin with you, Mr. Walker.
    Mr. Walker. Thank you, Mr. Chairman.
    Actually, I don't have members of my family here, but I 
have two individuals from my staff, and one other supporter, 
who came along with--Jim Villa, John Hiller, and Tad Coper--all 
here.
    The Chairman. Thank you.
    Mr. Walker. We appreciate their presence.
    The Chairman. Thank you. You're all welcome here.
    Mr. Palmer?
    Mr. Palmer. Thank you, Mr. Chairman.
    I do have some family here. My wife and son, Charles----
    The Chairman. Would you please stand?
    Mr. Palmer.--in the back there.
    The Chairman. She's standing.
    [Laughter.]
    Mr. Palmer. She's keeping him bouncing.
    [Laughter.]
    The Chairman. There will be some courteous person who will 
give you their seat, I am sure.
    [Laughter.]
    Mr. Palmer. My father Tim, his wife Andrea, up front here, 
my sister Susannah, my mother-in-law, Camilla, and my sister-
in-law, Sarah. Without them, I probably would not be here 
today, so thank you for letting me introduce them.
    The Chairman. Thank you. You're most welcome here.
    Mr. Wu?
    Mr. Wu. Thank you, Mr. Chairman, for the opportunity to 
introduce my family. I have my wife Teresa, and my mother and 
my father and my cousin also are here.
    Thank you.
    The Chairman. Thank you.
    Ms. Majoras, we'll go, next, to you.
    Ms. Majoras. Thank you, Chairman McCain.
    I'm blessed to have my husband, John, here with me today at 
the hearing.
    The Chairman. Welcome.
    Ms. Majoras. And if I could also, Chairman McCain, we're 
very pleased to have four Commissioners from the Federal Trade 
Commission here today.
    The Chairman. And I recognize them.
    [Laughter.]
    Ms. Majoras. And if I could, I would just like to recognize 
Chairman Mozelle--I'm sorry, Commissioner Mozelle Thompson, 
Commissioner Orson Swindle, Commissioner Tom Leary, and 
Commissioner Pamela Jones Harbour. We're thrilled to have them 
here today.
    The Chairman. Thank you.
    Dr. Sosa?
    Dr. Sosa. Mr. Chairman, I'd like to introduce my wife 
Irene.
    The Chairman. Welcome. Welcome, Ms. Sosa.
    Mr. Leibowitz?
    Mr. Leibowitz. I'd like to introduce my wife, Ruth Marcus, 
who has been wonderfully supportive of the notion of my 
possibly returning to public service, and our daughters, Emma, 
age 9, and Julia, age 7, who have been generally supportive, 
even though they know, if I'm fortunate enough to be confirmed, 
Daddy won't have a movie theater in his office anymore.
    [Laughter.]
    The Chairman. Welcome Emma and Julia. Great.
    Mr. Palmer, we'll begin with you for your opening 
statement, and we'll go, then, through as we are on the 
schedule.
    Please proceed, Mr. Palmer.

           STATEMENT OF BRETT PALMER, NOMINATED TO BE

              ASSISTANT SECRETARY, LEGISLATIVE AND

                   INTERGOVERNMENTAL AFFAIRS,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Palmer. Thank you, sir.
    Mr. Chairman and Members of the Committee, thank you for 
having me here today. I am honored to be testifying before you, 
and honored to be nominated. I'd like to thank the President 
for nominating me, the Secretary for supporting me, and the 
Senate for considering my nomination.
    I have served the Congress in the House leadership and in 
the personal office of a House Committee Chairman. My 
experience in the House leadership office made me understand 
and respect the Congressional process, and having worked in a 
personal office, I understand and value good constituent 
service.
    In my current capacity as the Deputy Assistant Secretary 
for Trade Legislation and the Acting Assistant Secretary for 
Legislative and Intergovernmental Affairs, I have worked with 
just about every Senator's office and most every House office, 
as well. Working under the leadership of Secretary Evans, 
Assistant Secretary Brenda Becker, and Under Secretary Grant 
Aldonas has been the best and most fulfilling job I've ever 
had. It has allowed me to stay intimately involved in the 
Congress while continuously exposing me to new policy 
challenges.
    Now that I have been nominated to take the job that was 
performed so well by Brenda Becker, I intend to maintain the 
very high standards she set. Secretary Evans would tolerate 
nothing less.
    I see my mission as ensuring that Department of Commerce's 
relationship with Congress remains robust and constructive. 
Members from both chambers and parties must be able to expect 
timely and full information on issues of concern to them.
    I am an advocate for both the Secretary and the Congress. 
You can expect that I will aggressively make Congress aware of 
the Department's actions and positions. You can also expect 
that I will aggressively advocate for Congressional concerns 
inside the Department in our decisionmaking processes. While I 
do not expect Congress to like all of our decisions, I do 
expect the Congress to be fully engaged and it will be treated 
fairly.
    I believe it also important to mention that this job is not 
limited to Congressional affairs. State and local governments 
have an interest, and I intend to keep the lines of 
communication open with them, as well.
    As we go forward, if I am fortunate enough to be confirmed 
by this Committee and the Senate, I pledge to make myself 
available to the Committee personally to deal with any and all 
challenges that confront us jointly in the future.
    Thank you again for your time, and I would welcome any 
questions you have, sir.
    [The prepared statement and biographical information of Mr. 
Palmer follow:]

 Prepared Statement of Brett Palmer, Nominee for Assistant Secretary, 
 Legislative and Intergovernmental Affairs, U.S. Department of Commerce
    Mr. Chairman, Senator Hollings, and members of the Committee,
    I am honored to be testifying before you today. I would like to 
thank the President for nominating me, the Secretary for supporting me, 
and the Senate for considering my nomination.
    My wife Emily and my new son Charles, my father Tim and his wife 
Andrea, my mother-in-law Camilla, my sister Susannah, my sister-in-law 
Sarah and many friends and colleagues are here today. I would not have 
had the chance to be before you today without the lifetime of support 
given to me by my family and friends.
    I have served the Congress in a House leadership office and the 
personal office of a House Committee Chairman. My experience in the 
House leadership made me understand and respect the Congressional 
process. Having worked in a personal office, I understand and value 
good constituent service.
    In my current capacity as the Deputy Assistant Secretary for Trade 
Legislation and the Acting Assistant Secretary for Legislative and 
Intergovernmental Affairs, I have worked with just about every 
Senator's office and most House offices. Working under the leadership 
of Secretary Evans, Assistant Secretary Brenda Becker, and 
Undersecretary Grant Aldonas has been the best and most fulfilling job 
I have ever had. It has allowed me to stay intimately involved in 
Congress while continuously exposing me to new policy challenges.
    Now that I have been nominated to take the job that was performed 
so well by Brenda Becker, I intend to maintain the very high standards 
she set. Secretary Evans would tolerate nothing less.
    I see my mission as ensuring that the Department of Commerce's 
relationship with Congress remains robust and constructive. Members 
from both chambers and parties must be able to expect timely and full 
information on issues of concern to them.
    I am an advocate--for both the Secretary and the Congress. You can 
expect that I will aggressively make Congress aware of the Department's 
positions and actions. You can also expect that I will aggressively 
advocate for Congressional concerns inside the Department. While I do 
not expect Congress to like all of our decisions, I do expect that 
Congress will be fully engaged and treated fairly.
    I believe that it is also important to mention that the job for 
which I have been nominated is not limited to Congressional relations. 
State and local governments also are interested in many of the 
Department's issues. I intend to keep the lines of communication open 
with them as well.
    As we go forward, if I am fortunate enough to be confirmed by this 
Committee and the Senate, I pledge to make myself available to the 
Committee to personally deal with any and all challenges that confront 
us jointly in the future.
    Thank you again for the time you have taken to consider my 
nomination. I look forward to answering any questions you may have.
                                 ______
                                 
                      a. biographical information
    1. Name: (Include any former names or nicknames used.) Brett 
Palmer.
    2. Position to which nominated: Assistant Secretary of Commerce for 
Legislative and Intergovernmental Affairs.
    3. Date of nomination: May 11, 2004.
    4. Address: (List current place of residence and office addresses.)

        Residence: Information not released to the public.
        Office: U.S. Department of Commerce, Office of Legislative & 
        Intergovernmental Affairs, Room 5414, Washington, D.C. 20230.

    5. Date and place of birth: January 28, 1972; Tennessee.
    6. Marital status: Married, Dr. Emily Davis Palmer (formerly Emily 
Davis)
    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.)
    Charles Davis Palmer, born March 2004.
    8. Education: (List secondary and higher education institutions, 
dates attended, degree received, and date degree granted.)

        Davidson College 1990-1994, BA in History

        Boston College 1989, 1991--summer classes taken--no degree 
        sought

        Syracuse University/Instituto Internacional, 1993--classes 
        taken--no degree sought

        University of Georgia--1994-1995, classes taken--no degree 
        sought

        University Nebraska at Omaha--2002, class taken--no degree 
        sought

         East Carolina University--Masters in Public Administration 
        Program--1998-?, incomplete moved back to Washington--plan to 
        complete

        NC State University--2000, class taken, did not finish class 
        (moved to Washington)--no degree sought

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

        Congressional Aide--Office of the Speaker, Washington, 1995-
        1998

        Senior Associate--BKSH, Washington, 2000-2001

        Deputy Chief of Staff--Congressman Bob Ney, Washington, 2001-
        2002

        Deputy Assistant Secretary for Trade Legislation--U.S. 
        Department of Commerce, Washington, 2002-2004

        Currently Acting Assistant Secretary for Legislative and 
        Intergovernmental Affairs--U.S. Department of Commerce, 2004 to 
        present

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)
    See above.
    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.)
    I worked for BKSH doing research for a number of their clients 
including such organizations as the National Restaurant Association, 
the Travel Business Roundtable, Accenture, Coalition for Indoor Air 
Quality, the Hotel and Motel Association, and others.
    I was once a trustee of my father's living and irrevocable trusts.
    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.)

        Alpha Epsilon Delta (Premedical Honor Society)

        Sigma Phi Epsilon Fraternity--VP/Social Chairman, Pledge 
        Educator

        Holmes Run neighborhood association

    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.

                No formal positions

                Volunteered for campaigns of Rep. Walter Jones, Rep. 
                Shelley Moore Capito, Bush for President, and the NRCC

                Volunteered for NH GOP

                Volunteered at 2000 Republican National Convention

        (c) Itemize all political contributions to any individual, 
        campaign organization, political party, political action 
        committee, or similar entity of $500 or more for the past 10 
        years.
                None

    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognition for outstanding service or achievements.)
    Alpha Epsilon Delta--Premedical Honor Society
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated.
    I have addressed groups several times, but there were no formally 
written speeches. I normally sketch a few themes on a piece of scrap 
paper and then deliver a speech extemporaneously. I do not have 
transcripts of these events.
    17. Selection:
    (a) Do you know why you were selected for the position to which you 
have been nominated by the President?
    Yes. I believe I am the best person for the job. I have worked at 
the Department of Commerce for almost 2 years in the Office of 
Legislative and Intergovernmental Affairs as the Deputy Assistant 
Secretary and have been serving as the Acting Assistant Secretary since 
the departure of my predecessor.
    (b) What in your background or employment experience do you believe 
affirmatively qualifies you for this particular appointment?
     I have three traits that I believe make me qualified for this 
position. First, I want to serve. This job is not a notch on the belt 
or an opportunity to brag. This is my chance to use my skills to serve 
my country. Second, I have years of broad Congressional experience 
having served in a leadership office, a personal office, and in the 
Congressional Affairs office of an Executive Branch agency. Third, I 
also have a deep heartfelt respect for the institution of Congress and 
the vital contributions that a healthy relationship with Congress 
offers the Administration and the public.
                   b. future employment relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations, or business organizations if you 
are confirmed by the Senate?
    I currently work for the Department of Commerce from which I would 
not separate myself. I still must work with all of Congress so I must 
still work with Congressional Office for whom I had worked. I am 
willing to sever relations with previous private employers.
    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, please explain. No.
    3. Do you have any plans, commitments, or agreements after 
completing government service to resume employment, affiliation, or 
practice with your previous employer, business firm, association, or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.
                   c. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers. None.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. None.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    I do not see any conflicts of interest.
    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.
    While working in Congress I worked to advance or oppose hundreds of 
bills for the elected Member for whom I worked.
    While serving as the Deputy Assistant Secretary for Trade 
Legislation I worked to inform Members of Congress about the Chile, 
Singapore, and Australia FTA's as well as the Miscellaneous Tariff 
Bill, and other pieces of legislation.
    While working at BKSH, I provided legislative research for the 
company, much of which was related to appropriations, but also 
conducted research used to highlight the conflicts of interest between 
auditors and their consultant divisions.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    I am not aware of any conflicts of interest. I will divest myself 
of any potential conflicts should such a circumstance arise.
    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 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain. 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 for a minor traffic offense? If so, please explain.
    Never arrested.
    I once received a possession of alcohol ticket when I was 21 years 
old. I was 21 years old, standing outside of locked car that I did not 
own. In the back seat was a single unopened bottle of alcohol in a bag. 
However, since the neck of the unopened bottle extended outside of the 
bag and therefore visible from outside of the car and I owned the 
bottle, technically I was in public possession of alcohol. The charges 
were dropped and the record was to be expunged.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain. No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, please explain.
    Never arrested.
    I once received a possession of alcohol ticket when I was 21 years 
old. I was 21 years old, standing outside of locked car that I did not 
own. In the back seat was a single unopened bottle of alcohol in a bag. 
However, since the neck of the unopened bottle extended outside of the 
bag and therefore visible from outside of the car and I owned the 
bottle, technically I was in public possession of alcohol. The charges 
were dropped and the record was to be expunged.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination. None.
                     e. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? 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, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Please explain how if confirmed, you will review regulations 
issued by your department/agency, and work closely with Congress, to 
ensure that such regulations comply with the spirit of the laws passed 
by Congress.
    If confirmed, I would not be directly overseeing a regulatory 
office. However, part of my job is to ensure Congress understands 
actions that the Department is planning to take. Further, it is also my 
job to be the voice for Congress inside the Administration. Part of 
this advocacy involves strongly advocating for the original 
Congressional intent in the implementation of laws.
    5. 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 does your previous professional experiences and education 
qualify you for the position for which you have been nominated?
    As a former Congressional staff member, I understand the important 
role of Congress in overseeing executive agencies. I see this 
importance as stemming from the Constitutional duties and powers with 
which Congress is charged.
    I have worked in Department of Commerce's Office of Legislative and 
Intergovernmental Affairs for over a year and a half. This experience 
has given me insight into the issues and the concerns of many Members 
of Congress and state governments.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    I believe public service is important. Given my background in 
Congress and at the Department of Commerce, this is a natural fit for 
my skills and the best way for me to serve the public.
    3. What goals have you established for your first two years in this 
position, if confirmed?
    Maintain the Department's good reputation for Congressional service 
by constantly improving our service.
    Establishing a better system for tracking and managing 
Congressional contacts, questions, and tasks. At this point, we do not 
have any unified way to track our open Congressional tasks or hearings. 
When a Member calls me or the Secretary I want to have a system in 
place that would allow me to update him or her on all the issues they 
may have before the Department. Right now, I have to go from memory or 
call and e-mail whichever bureaus may or may not be handling the issues 
affecting that Member. Congress does an excellent job doing exactly 
this with their constituents. Senators and Representatives are our 
constituents and deserve better and faster service.
    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 career as a Congressional staff person was spent in the House. I 
do not know the Senate nearly as well. I am constantly reaching out to 
the new people in the Senate to expand and strengthen these Senate 
relationships.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when society's problems 
should be left to the private sector, and what standards should be used 
to determine when a government program is no longer necessary.
    I believe most goods and services are best delivered by the private 
sector. However, there are services for which market forces fail to be 
an adequate supplier and if these services are vital to the public 
interest then some level of government should supply them.
    The Constitution that separates and limits the powers of government 
to recognize the intrinsic advantage a free people have in making their 
own judgments. I respect those limits.
    A government program is no longer necessary when it has either 
accomplished its mission, circumstances have changed which no longer 
require the government to provide the service, or when the resources 
for the program would better be utilized by something else.
    Programs should have solid goals and performance measures that 
should be used by the Administration and Congress to determine if a 
program should continue.
    6. Describe the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated.
    We have many missions here that are ongoing, but our basic mission 
is to advocate strongly for the domestic private sector's needs and to 
create the environment for private sector growth.
    We are working to reorganize the International Trade Administration 
and the Economic Development Administration to make our government's 
trade and development efforts reflect a rapidly changing world.
    The Manufacturing Initiative is a top priority.
    Review of the Ocean Commissions Report, examination of its 
recommendations, and the implementation of some or all of its 
recommendations will be a major focus of NOAA.
    7. What do you believe to be the top three challenges facing the 
department/agency and why?
    The top issue is always how can we be serving the public better. We 
need to consistently asking ourselves what can we do to help our 
domestic competitiveness and create an environment for a robust 
economy.
    We face serious budget decisions. Addressing our policy goals while 
maintaining budget discipline is as much an opportunity as a challenge.
    The Oceans Commission Report will likely present a broad range of 
challenges that we will have to analyze. The result of this analysis 
will likely cause us to adjust our policies and organization.
    8. In reference to question number six, what factors in your 
opinion have kept the department/agency from achieving its missions 
over the past several years?
    I think we have begun to make significant progress in these three 
areas.
    We have totally reorganized the International Trade Administration 
to reflect the changes in the global economy--centralizing export 
promotion efforts, strengthening trade law compliance activities, 
creating new tools for better information from which policymakers will 
make decisions. The Economic Development Administration is very close 
to being reauthorized and reorganized to maximize effectiveness. The 
one area where we have not had success is in a new Export 
Administration Act, but the modernization of dual use export controls 
is highly controversial right now.
    On the budgetary front, we have tried to maximize public service 
while limiting spending. The International Trade Administration and the 
Economic Development Administration reorganizations are good examples 
of this type of good government and good budgeting coming together. 
However, the cuts at the NIST labs are a serious concern, and we will 
need to work with Congress to establish how much we really value these 
scientists and their efforts.
    The Oceans Commission's Report has not been finalized so we cannot 
fully review its recommendations yet.
    9. Who are the stakeholders in the work of this department/agency?
    Congress, the state governments, domestic industry, and ultimately 
the public.
    10. What is the proper relationship between the position to which 
you have been nominated, and the stakeholders identified in question 
number nine?
    My role is to be a strong advocate for the Administration's 
position. However, my role is not limited to telling Congress what the 
Department likes and does not like. My role is also to be a good 
listener for Congress and then be a vigorous advocate for their 
concerns inside the Administration. The proper relationship is one of 
honesty and trust.
    11. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices.
    (a) What do you believe are your responsibilities, if confirmed, to 
ensure that your department/agency has proper management and accounting 
controls?
    My responsibilities are to spend and save the people's resources 
wisely.
    (b) What experience do you have in managing a large organization?
    I ran a large congressional office with offices in four locations. 
I currently am the Acting Assistant Secretary and therefore I am 
temporarily running the Office of Legislative and Intergovernmental 
Affairs.
    12. 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) What benefits, if any, do you see in identifying performance 
goals and reporting on progress in achieving those goals?
    If government is unaccountable then the public will get poor 
service. Every person and every organization needs goals to give it 
purpose and to establish measures of success or failure. Useful 
performance goals can be a vital management tool. Performance goals 
that are unrealistic or too easily met offer an organization very 
little benefit.

    (b) What steps should Congress consider taking when a department/
agency fails to achieve its performance goals? Should these steps 
include the elimination, privatization, downsizing, or consolidation of 
departments and/or programs?
    There is no ``one size fits all'' answer to this question. The 
answer depends on what goals were not met and why.
    If the problem is a bad organizational structure then that should 
be addressed.
    If the problem is leadership then better leadership should be 
placed in authority.
    If the issue is that market forces would serve the public better 
then privatization should be the answer.

    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    Office of Legislative and Intergovernmental Affairs is unlike other 
bureaus or offices because we are the customer service desk of the 
Department. I believe the performance measure that I should and will be 
judged by is the quality of interaction the 535 Members of Congress 
have with the Department. This does not mean that I expect every Member 
of Congress to approve of every decision the Department makes, but it 
does mean that timely and quality information is given to Congress and 
the State governments. I and my office will be judged with every phone 
call, every e-mail, every hearing, and every meeting we have.
    13. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    My philosophy with regard to management is that if you have good 
people they will be their own toughest critic. What good people need is 
opportunities to grow in their job and learn more. If they ask for help 
then provide it. Luckily I have good people on my team.
    I have not had any complaints filed against me.
    14. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please explain.
    I work with Congress everyday. I expect to be judged with every 
phone call, every e-mail, every hearing, and every meeting the 
Department has with Congress.
    I worked for a Committee Chairman when I served in the House. I 
also worked in the House leadership where I worked closely with all the 
House Committees.
    I still deal with many Congressional Committees.
    15. 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 as the internal, independent 
watchdog. I will be fully cooperative with any Inspector General 
efforts.
    16. In the areas under the department/agency's jurisdiction to 
which you have been nominated, what legislative action(s) should 
Congress consider as priorities? Please state your personal views.
    I think the issue of domestic competitiveness is paramount.
    This issue is not isolated to any one bill, but instead is a simple 
yet profound question, ``Will action or inaction on a piece of 
legislation or regulation help or hurt our ability to be competitive in 
a global market.''
    This spans issues from trade, to spectrum management, to oceans 
policy.
    17. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending in an open 
manner through a set of fair and objective established criteria? If 
yes, please explain what steps you intend to take and a time frame for 
their implementation. If not, please explain why.
    The Office of Legislative and Intergovernmental Affairs does not 
issue grants or make major purchases. What funds we do have we will 
allocate in accordance with all ethical and procurement rules.

    The Chairman. Thank you.
    Mr. Wu?

           STATEMENT OF BENJAMIN H. WU, NOMINEE TO BE

          ASSISTANT SECRETARY OF COMMERCE, TECHNOLOGY

              POLICY, U.S. DEPARTMENT OF COMMERCE

    Mr. Wu. Chairman McCain and distinguished Members of the 
Committee, it's a privilege and an honor to appear before you 
today as the President's nominee for Assistant Secretary of 
Commerce for Technology Policy. I'm deeply grateful to 
President Bush and Secretary Evans for the confidence that they 
have shown in me.
    I'm also very pleased to have been introduced by 
Congressman Sherry Boehlert, the Chairman of the House Science 
Committee, where I called home for the majority of my years 
working in Congress. Chairman Boehlert has been a tireless 
leader in championing Federal investments in science and 
technology. I have known him since I first began my 
professional career in Congress, and he really has been a true 
inspiration, teaching me life-long lessons in the value of 
public service.
    I would also like to, as you have allowed me to do, 
recognize my wife Teresa and express my appreciation to my 
parents, who are here with me today.
    This is a proud moment for my family. When we first arrived 
in the United States from Taiwan, in the 1960s, this country 
opened its arms to us and allowed us to follow our hopes and 
dreams in this land of opportunity. And back then, Taiwan was 
still a mostly agrarian country, and had yet to unleash the 
revolutionary power of its technology as an economic engine. 
And today that little island the size of Massachusetts is one 
of the ``Asian tigers,'' ranking with some of the world's most 
developed countries.
    Taiwan, however, is certainly not the only current example 
of a country that has, or is seeking, a dramatic conversion 
fueled by technology. Countries all over the world--in Europe, 
Asia, and South America--are competing for their share of the 
technology market. They all understand, as we have experienced 
here in the United States, especially in the past two decades, 
the transformative impact of technological innovation.
    As these nations improve their economies and capabilities, 
now more than ever we must act decisively so as not to 
jeopardize our market leadership and preserve our American 
technological preeminence. We cannot afford to stand still with 
the pace of technology advancing so rapidly.
    At this critical juncture, the challenges are coming from 
varied fronts, and much is at stake. The keys to future United 
States competitiveness will be our ability to continue to 
develop technological innovation and our ability to spur 
entrepreneurship. They are the foundation upon which our 
command of the global marketplace rests, and they are also the 
overarching mission of the Commerce Department's Office of 
Technology Policy, which I would lead.
    I intend to focus OTP's resources on the process of 
technological innovation and entrepreneurship; in other words, 
how the genius of American technology gets developed, how the 
results of R&D make their way to the marketplace, and how 
technology could be harnessed to grow American jobs, companies, 
and industries.
    For Fiscal Year 2005, President Bush has requested an 
unprecedented level of $132 billion for research and 
development funding. And this R&D needs to be maximized for the 
country by converting it to wealth-generating, productivity-
enhancing products, processes, and services.
    OTP would also examine the wide range of factors and 
policies that affect the process of technology development, 
deployment, and commercialization. These areas include 
industrial structure and management, manufacturing 
capabilities, the ability and availability of highly skilled 
technical workers, innovation management practices, foreign 
policies and practices related to technology innovation, state 
and local government efforts to stimulate technology-led 
economic growth, and public-sector and private-sector 
cooperation in technology. The office would also identify and 
work to remove barriers that impede the flow of new technology 
into the economy, both domestically and in key foreign markets.
    My immediate goals in the Office of Technology Policy would 
be to provide the President, the Secretary, policymakers, and 
lawmakers quality analyses of important cutting-edge science 
and technology issues, establish greater dialogue with the high 
technology industry sectors, develop a rapid-response mechanism 
to advise on appropriate actions, strengthen the interagency 
collaborations with other Federal agencies on issues that 
crosscut departmental boundaries, and also form greater 
partnership opportunities with the three entities that perform 
our Nation's research and development--industry, universities, 
and our Federal Government--in order to enhance our Nation's 
science and technology enterprise.
    From the beginning of my 16-year professional career in 
public service, I have worked on policies and programs to 
promote United States science and technology advancements. I've 
been engaged with OTP ever since its inception, when it was 
created, either through legislative oversight or budget or 
through executive supervision and management. And in doing so, 
I've had the pleasure of working with you and your staffs in a 
strong bipartisan relationship.
    If confirmed by the Senate, I look forward to continuing 
that relationship. Together, we can promote innovation for a 
stronger, safe America, and I look forward to that opportunity.
    Thank you, Mr. Chairman, and I'd be pleased to respond to 
your questions.
    [The prepared statement and biographical information of Mr. 
Wu follow:]

Prepared Statement of Benjamin H. Wu, Nominee to be Assistant Secretary 
      of Commerce, Technology Policy, U.S. Department of Commerce
    Chairman McCain, Senator Hollings, and distinguished members of the 
Committee,

    It is a privilege and an honor to appear before you today as the 
President's nominee for Assistant Secretary of Commerce for Technology 
Policy. I am deeply grateful to President Bush and Secretary Evans for 
the confidence they have shown in me.
    I am so very pleased to have been introduced by Congressman Sherry 
Boehlert, the Chairman of the House Science Committee, where I called 
home for the majority of my years working in Congress. Chairman 
Boehlert has been a tireless leader in championing Federal investments 
in science and technology. I have known him since I first began my 
professional career in Congress and he has served as a true 
inspiration, teaching me life-long lessons about the value of public 
service.
    I would also like to recognize my wife, Teresa, and express my 
appreciation to my parents who are here with me today. This is a proud 
moment for my family. When we first arrived in the United States from 
Taiwan in the 1960s, this country opened its arms and allowed us to 
follow our hopes and dreams to seek greater prospects in this land of 
opportunity.
    Back then, Taiwan was still a mostly agrarian country and had yet 
to unleash the revolutionary power of high technology as an economic 
engine. Today, that little island the size of Massachusetts is one of 
the ``Asian tigers,'' ranking with some of the world's most developed 
economies. Taiwan is certainly not the only current example, however, 
of a country that has, or is seeking, a dramatic conversion fueled by 
technology. Countries all over the world--in Europe, Asia, and South 
America--are all competing for their share of the technology market. 
They all understand, as we have experienced here in the United States 
especially in the past two decades, the transformative impact of 
technological innovation.
    As these nations improve their economies and capabilities, now more 
than ever, we must act decisively so as not to jeopardize our market 
leadership and preserve our American technological preeminence. We 
cannot afford to stand still when the pace of technology is advancing 
so rapidly. At this critical juncture, the challenges are coming from 
varied fronts and much is at stake. The keys to future United States 
competitiveness will continue to be our development of technological 
innovation and our ability to spur entrepreneurship. They are the 
foundation which our command of the global marketplace rests and they 
are the overarching mission of our Commerce Department's Office of 
Technology Policy (OTP), which I would lead.
    I intend to focus OTP's resources on the process of technological 
innovation and entrepreneurship; in other words, how the genius of 
American technology gets developed, how the results of R&D make their 
way to the marketplace, and how technology can be harnessed to grow 
companies, jobs, and industries. For Fiscal Year 2005, President Bush 
has requested an unprecedented level of $132 billion for research and 
development funding, and this R&D needs to be maximized for the country 
by converting it to wealth-generating, productivity-enhancing products, 
processes, and services.
    OTP would also examine the wide range of factors and policies that 
affect the process of technology development, deployment, and 
commercialization. These areas include: industrial structure and 
management, manufacturing capabilities, the availability of highly 
skilled technical workers, innovation management practices in the 
private sector, foreign policies and practices related to technological 
innovation, state and local government efforts to stimulate technology-
led economic growth, public-private sector cooperation in technology, 
and more. The office would also identify and work to remove barriers 
that impede the flow of new technology into the economy, both 
domestically and in key foreign markets.
    My immediate goals in the Office of Technology Policy would be to: 
provide the President and the Secretary with quality analyses of 
important, cutting-edge science and technology issues of national 
concern in order to ensure that American technological preeminence is 
maintained; establish greater dialogue with the high-technology 
industry sectors; develop rapid response mechanisms to advise on 
appropriate actions; strengthen interagency collaborations with other 
Federal agencies on issues that cross-cut departmental boundaries; and 
form greater partnership opportunities with the three entities that 
perform our Nation's research and development--industry, universities, 
and the Federal Government--in order to enhance our science and 
technology enterprise.
    From the beginning of my 16-year professional career in public 
service, I have worked on policies and programs to promote United 
States science and technology advancements. I have been engaged with 
OTP ever since its inception, either through legislative budget and 
oversight or through executive supervision and management. In doing so, 
I have had the pleasure of developing strong bipartisan relationships 
with you and your staffs. If confirmed by the Senate, I look forward to 
continuing that relationship. Together, we can promote innovation for a 
stronger, safer America.
    Thank you and I would be pleased to respond to your questions.
                                 ______
                                 
                      a. biographical information
    1. Name (include any former names or nicknames used): Benjamin H. 
Wu.
    2. Position to which nominated: Assistant Secretary of Commerce for 
Technology Policy.
    3. Date of nomination: April 8, 2004.
    4. Address: (List current place of residence and office addresses.)

        Residence: Information not released to the public.
        Office: 4822 Hoover Building, Washington, D.C. 20230.

    5. Date and place of birth: March 6, 1963; Tainan, Taiwan (Republic 
of China).
    6. Marital status: (Include maiden name of wife or husband's name.)
    Married, Teresa L. Lee.
    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.) None.
    8. Education: (List secondary and higher education institutions, 
dates attended, degree received, and date degree granted.)

        University of Pittsburgh (Pittsburgh, PA) 1985-1988, J.D. 
        granted 5/88

        New York University (New York, NY) 1981-1985, B.A. granted 5/85

        Thomas S. Wootton High School (Rockville, MD), 1977-1981, 
        diploma granted 5/81

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

        Deputy Under Secretary, U.S. Dept. of Commerce, Washington, 
        D.C.; 2001 to present.

        Counsel, Technology Subcommittee, House Science Committee, 
        Washington, D.C.; 1993-2001.

        Counsel, Congresswoman Constance A. Morella, Washington, D.C.; 
        1988-2001.

        Prosecutor, University of Pittsburgh Judicial System, 
        Pittsburgh, PA; 1987-1988.

        Legal Intern, U.S. Attorney's Office for the Western District 
        of Pennsylvania, Pittsburgh, PA; 1988.

        Judicial Intern, The Honorable Joseph F. Weis, Jr., U.S. 3rd 
        Circuit Court of Appeals, Pittsburgh, PA; 1987.

        International Trade Law Clerk, Ablondi & Foster, Washington, 
        D.C.; Summers 1986 and 1987.

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)
    Chairman, Maryland Governor's Commission on Asian Pacific American 
Affairs, 2003 to present.
    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.)
    Limited Liability Partner, Mk WU JAYS Investment Partnership
    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.)
    Member, Executive Advisory Board of The Asian-American Review, 
Kennedy School, Harvard University
    13. Political affiliations and activities:
    (a) President, Montgomery County Young Republicans, 1997
    (b) Member, National Asian American Coalition, American Dreamers, 
and the Marshals Program for Bush/Cheney 2000
    Alternate Delegate & Deputy Whip for the Maryland delegation at the 
Republican National Convention in San Diego, District Chairman for 
Montgomery County, MD, and Co-Chair, Maryland Asian American Coalition 
for Dole/Kemp 1996
    Member, National Asian American Steering Committee and Co-Chair, 
Asian American Lawyers for Bush/Quayle 1992
    (c) Bush/Cheney 2004--$2,000
    Bush/Cheney 2000--$500
    Maryland Republican Party--$500
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognitions for outstanding service or achievements.)
    Several honors and awards from New York University, associated with 
undergraduate activities.
    Several honors and awards from the University of Pittsburgh, 
associated with law school activities.
    Several awards and recognitions for outstanding service or 
achievements from various Asian Pacific American community 
organizations.
    Several awards and recognitions from various professional 
organizations, associated with Congressional staff duties.
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.)
    None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated.
    (Two speeches are attached)
    American Association for the Advancement of Science (AAAS) 
Colloquium on Science and Technology Policy, Washington, D.C.: April 
11, 2002.
    Information Technology and Government Forum (Doing Business with 
the Federal Government Series sponsored by the House Government Reform 
Committee), Austin, TX; September 26, 2003.
    17. Selection:
    (a) Do you know why you were selected for the position to which you 
have been nominated by the President?
    I believe I was nominated by President George W. Bush to be his 
Assistant Secretary of Commerce for Technology Policy because I possess 
the necessary qualifications to assist in the administration of the 
President's science and technology agenda to promote innovation for a 
stronger, safer America.

    (b) What in your background or employment experience do you believe 
affirmatively qualifies you for this particular appointment?
    I have spent my entire 16-year professional career, first in 
Congress and then in President George W. Bush's administration, working 
on policies and programs to promote our Nation's science and technology 
advancements. I had the opportunity to play an important leadership 
role on technology policy issues for the U.S. House of Representatives 
during the largest peacetime economic expansion in our history a growth 
that was fueled and driven by our high-technology sector. Additionally, 
I have been engaged in the mission and activities of the Commerce 
Department's Office of Technology Policy ever since its inception in 
1988, either through legislative budget and oversight or through 
executive supervision and management.
                   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, as required.
    2. Do you have any plans, commitments, or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? 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.
    Limited liability partner in a de minimus private investment club 
with two other law school friends.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. None.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    I have attached my financial disclosure report. If required, I will 
divest conflicting financial interests where appropriate. I will not 
participate in any matter directly involving Advamed (Advanced Medical 
Technology Association), where my spouse is employed. On any matter 
that might involve a potential conflict of interest, I will consult 
with the Commerce ethics counsels.
    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.
    Per the advice and counsel of the Office of Government Ethics, my 
status in the private investment club has been changed from general 
partner to limited partner in order to be shielded from any possible 
conflict of interest in investment decisions. (Please see attached 
document withdrawing as a general partner).
    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. (Please see attached document).
                            d. legal matters
    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? No.
    2. Have you ever been investigated, arrested, charged, or held by 
any Federal, State, or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than for a minor traffic offense? No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? 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 disclosed in 
connection with your nomination. None.
                     e. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? 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, including technical experts and career employees, with 
firsthand knowledge of interest to the Committee? Yes.
    4. Please explain how if confirmed, you will review regulations 
issued by your department/agency, and work closely with Congress, to 
ensure that such regulations comply with the spirit of the laws passed 
by Congress.
    If confirmed, in the executive implementation of regulations issued 
by our department/agency, I would keep the statutory intent of the 
enacting legislation in mind and would work with Congress, as needed, 
so that the regulations comply with the spirit of Congressionally-
passed laws.
    5. 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 does your previous professional experiences and education 
qualify you for the position for which you have been nominated?
    I have spent my entire 16-year professional career, first in 
Congress and then in President George W. Bush's administration, working 
on policies and programs to promote our Nation's science and technology 
advancements. I had the opportunity to play an important leadership 
role on technology policy issues for the U.S. House of Representatives 
during the largest peacetime economic expansion in our history -a 
growth that was fueled and driven by our high-technology sector. 
Additionally, I have been engaged in the mission and activities of the 
Commerce Department's Office of Technology Policy ever since its 
inception in 1988, either through legislative budget and oversight or 
through executive supervision and management.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    It has been a privilege to serve President George W. Bush and 
Secretary Donald L. Evans in my current capacity and I am honored to be 
nominated for this Senate-confirmed presidential appointment. My entire 
professional career has been dedicated to public service. I believe my 
experience and background provide unique qualifications and abilities 
to serve effectively as Assistant Secretary of Commerce for Technology 
Policy.
    3. What goals have you established for your first two years in this 
position, if confirmed?
    My immediate goals in the Office of Technology Policy are: to 
provide the President and the Secretary quality analyses of important, 
cutting-edge science and technology issues of national concern in order 
to ensure that American technological preeminence is maintained; to 
establish greater dialogue with the high technology industry sectors 
represented at the Department of Commerce in order to be most 
responsive to our stakeholders; to develop rapid response mechanisms to 
advise on appropriate actions; to develop greater interagency 
collaborations with other Federal agencies on issues that cross-cut 
departmental boundaries, and; to form greater partnership opportunities 
with the three entities that perform our Nation's research and 
development industry, universities, and the Federal Government--in 
order to strengthen our science and technology enterprise.
    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 am confident that I possess the necessary and requisite skills, 
expertise, and background that will enable me to successfully pursue 
the goals listed above.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when society's problems 
should be left to the private sector, and what standards should be used 
to determine when a government program is no longer necessary.
    The landscape of U.S. research and development has changed 
dramatically since the end of the Cold War. In the middle of the last 
century, at the height of the Cold War and the race to put a man on the 
moon, Federal Government R&D investments exceeded industry R&D by a 
ratio of two to one. Today, the U.S. industry outspends the Federal 
Government on R&D by more than two to one--completely reversing that 
ratio in less than 50 years. As a result of these trends, Federal 
Government R&D funding--while obviously still important--is no longer 
the primary driver of R&D or its attendant economic benefits, such as 
economic growth, job creation, and improved standards of living. 
Accordingly, it should now be the role of the Federal Government to 
help shape the climate for innovation and create fertile conditions for 
entrepreneurship and to fund basic research. Since the drivers of 
technological advancement now increasingly reside in the private 
sector, greater attention must be given to how industry develops 
technology and commercializes technology. Policymakers must consider 
how policies--economic, regulatory, trade, education, and more affect 
the private sector's ability to develop technology and bring it to 
market. Also, as technology rapidly evolves, government programs that 
become technically obsolete, outdated, or no longer useful should be 
phased out.
    6. Describe the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated.
    The Office of Technology Policy is concerned with the process of 
technological innovation; in other words, how technology gets 
developed, and how the results of research and technology development 
make their way to the marketplace or get deployed throughout the 
economy. For Fiscal Year 2005, President George W. Bush has requested 
an unprecedented level of $132 billion for research and development 
funding, and this R&D needs to be maximized for the country by 
converting it to wealth-generating, productivity-enhancing products, 
processes, and services. Moreover, the process of technological 
innovation goes far beyond research and development. OTP is concerned 
with and examines the wide range of factors that affect the process of 
technology development, deployment, and commercialization. These areas 
include: economic and regulatory policies, economic and labor 
conditions, capital availability, manufacturing capabilities, 
industrial structure and management, manufacturing capabilities, the 
availability of highly skilled technical workers, innovation management 
practices in the private sector, the deployment of modern technology-
based infrastructure, foreign policies and practices related to 
technological innovation, state and local government efforts to 
stimulate technology-based economic growth, public-private sector 
cooperation in technology, and more. The office identifies and works to 
remove barriers that impede the flow of new technology into the 
economy.
    7. What do you believe to be the top three challenges facing the 
department/agency and why?
    Given the President's national priorities of funding the war on 
terrorism, providing for our homeland defense, and ensuring an economic 
recovery, a tight budget has limited the Office of Technology Policy 
from aggressively expanding into greater analyses of emerging 
technologies. The government is being asked to do more with less as a 
result of necessary budget constraints that affect all Federal non-
defense and homeland security discretionary programs. Other challenges 
include being able to constantly keep up pace with the rapid, ever-
changing pace of technology development and ensuring that policymakers 
do not inadvertently make ill-informed decisions based on a lack of 
understanding or insufficient data.
    8. In reference to question number six, what factors in your 
opinion have kept the department/agency from achieving its missions 
over the past several years?
    It appeared as if the department had developed stovepipes among 
bureaus in the previous administration and this perceived lack of 
collaboration and coordination impacted performance. Secretary Donald 
L. Evans has actively encouraged breaking down these stovepipes and, as 
a result, there is greater interaction and joint activities with all of 
the departmental bureaus that is creating a number of successful 
initiatives.
    9. Who are the stakeholders in the work of this department/agency?
    The Office of Technology Policy serves a number of stakeholders in 
its mission, most notably advocating and maximizing the benefits of the 
U.S. high-technology sector.
    10. What is the proper relationship between the position to which 
you have been nominated, and the stakeholders identified in question 
number nine?
    The Office of Technology Policy should be objective, ethical, and 
judicious in its relationship with all of its stakeholders.
    11. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices.
    (a) What do you believe are your responsibilities, if confirmed, to 
ensure that your department/agency has proper management and accounting 
controls?
    I would work closely with the Department of Commerce Chief 
Financial Officer and the Office of Management and Budget to ensure 
that the Office of Technology Policy has proper management and 
accounting controls, as well as meets requirements as set forth in the 
President's Management Agenda.
    (b) What experience do you have in managing a large organization?
    As the Deputy Under Secretary of Commerce for Technology, I have 
supervisory and management responsibility for almost 4,000 Federal 
employees.
    12. 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) What benefits, if any, do you see in identifying performance 
goals and reporting on progress in achieving those goals?
    I worked in Congress during the passage of the Government 
Performance and Results Act and I support the GPRA principles. 
Performance goals and reporting progress are useful in evaluating the 
success of programs and policies. Developing metrics for success 
provides managers a measurement tool for effective administration.
    (b) What steps should Congress consider taking when a department/
agency fails to achieve its performance goals? Should these steps 
include the elimination, privatization, downsizing, or consolidation of 
departments and/or programs?
    If Congressional oversight determines that performance goals have 
not been met, program managers should discuss all options for an 
appropriate recourse with Congress.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    Programs should be run in a well-managed, efficient, and effective 
manner that maximizes all available resources.
    13. 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 employees should be given clear direction but also 
empowered to make decisions in order to meet the mission of the office. 
Employees should be treated with respect and dignity, accorded rights 
and privileges as deemed appropriate and necessary. I have never had 
any employee complaints brought against me.
    14. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please explain.
    Having worked in both Congressional Member's and committee offices, 
I have a very strong sense of Congressional needs and oversight. I 
spent 13 years working for both Congresswoman Constance A. Morella of 
Maryland and the House Science Committee. During that time, I developed 
strong bipartisan relationships with both Members of Congress and their 
staffs.
    15. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    When I worked in Congress, I worked closely with the Inspector 
General of the Department of Commerce as required in Congressional 
oversight. In the administration, I continue to work closely with the 
Commerce Inspector General. The Inspector General's office can serve as 
a sounding board to address issues of concern and provide objective 
auditing and investigative resources that assists in the management of 
programs.
    16. In the areas under the department/agency's jurisdiction to 
which you have been nominated, what legislative action(s) should 
Congress consider as priorities? Please state your personal views.
    President Bush has developed a high-technology agenda that calls 
for the enactment of a number of measures that will boost our economy 
and assist our Nation's high-technology and manufacturing industries. I 
would work with Congress to pass these measures into law.
    17. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending in an open 
manner through a set of fair and objective established criteria? If 
yes, please explain what steps you intend to take and a time frame for 
their implementation. If not, please explain why.
    Yes, I would be willing to discuss with Congress specific steps and 
a timeframe to develop and implement fair and objective discretionary 
spending allocations, to the extent practicable.

    The Chairman. Thank you.
    Ms. Majoras?

 STATEMENT OF DEBORAH PLATT MAJORAS, NOMINATED TO BE CHAIRMAN, 
                    FEDERAL TRADE COMMISSION

    Ms. Majoras. Thank you, Mr. Chairman.
    Chairman McCain and Members of the Committee, it is a great 
honor to have been nominated by the President to chair the 
Federal Trade Commission, and it's a great honor to appear 
before you today. I thank you for your expeditious scheduling 
of this hearing.
    I thank Senator George Allen for submitting his generous 
statement on my behalf, and I also thank Senator DeWine for his 
kind remarks.
    The free market is the foundation of our enviable economic 
system. It breeds innovation, creativity, and entrepreneurship 
at unmatched rates. Yet while we can be proud of our beneficial 
use of the economic laws of demand and supply, we must never 
reduce either force to simply a curve on a graph. Demand is not 
a scientific formula. Rather, it is the collective voice of the 
U.S. consumer. And while, in a well-functioning marketplace, 
that collective consumer voice has the power to drive product 
innovation, marketing strategies, and pricing decisions, 
consumers are still at times taken for granted, ignored, 
manipulated, defrauded, and even robbed of their resources.
    For 90 years, the Federal Trade Commission has stood up for 
the welfare of the consumer. While the supply side, in general, 
responds effectively and responsibly to consumers' demands, 
some individual suppliers from inside and outside of our 
borders choose to illegally prey on consumers rather than 
battle for their business in the competitive arena. This harms 
consumers. And, frankly, it also harms firms that would conduct 
their businesses within the bounds of the law. And that is why 
strong law enforcement in defense of the consumer is an 
imperative.
    The range of commercial activity that the FTC must patrol 
is ever growing. The rise of the Internet and other technology-
related developments have brought consumers and suppliers 
closer together, creating new fora for providing and obtaining 
marketplace information and engaging in efficient commercial 
transactions. But these new tools have also, in another sense, 
driven consumers and some suppliers further apart, as those 
bent on deception can now hide behind phony identities, 
jurisdictional borders, and computers, and can steal private 
information without immediate detection. Working cooperatively 
with other law enforcers and with Congress, the FTC must lead 
the way in the fight against fraud and deception in whatever 
form it takes.
    The combination of antitrust and consumer protection 
enforcement is a powerful ``one-two punch'' in the FTC's fight 
to protect and promote and enhance consumer welfare. Protecting 
competition through enforcement of the antitrust laws gives 
consumers lower prices, innovation, and choice. Simultaneously, 
enforcement of the consumer protection laws promotes the 
exchange of complete, accurate, and non-deceptive information 
in the marketplace, while protecting consumers' private 
information from unwanted and unknowing dissemination. One type 
of enforcement complements the other as the flow of accurate 
information contributes to robust competition in our free 
market. And, significantly, properly enforced, these laws 
instill and restore in consumers a faith in the fair and proper 
working of our economic system.
    Mr. Chairman, serving as the consumers' defender and 
protector is a tremendous responsibility. If I am confirmed, I 
commit that I will undertake that responsibility, together with 
my colleagues, with the utmost dedication and integrity, 
working tirelessly, and using the talented men and women of the 
FTC as my example.
    Thank you very much.
    [The prepared statement and biographical information of Ms. 
Majoras follow:]

Prepared Statement of Deborah Platt Majoras, Nominated to be Chairman, 
                        Federal Trade Commission
    Thank you, Mr. Chairman. Chairman McCain, Senator Hollings, and 
members of the Committee, it is an honor to have been nominated by the 
President to serve as Chairman of the Federal Trade Commission and to 
appear before you today. I thank you for your expeditious scheduling of 
this hearing. I also wish to express my great appreciation to Senator 
George Allen for his generous introduction.
    I am blessed to have the strong support of my husband, John, who is 
here with me today. It is also a great privilege for me to recognize 
four sitting Commissioners who are with us today, Commissioner Mozelle 
Thompson, Commissioner Orson Swindle, Commissioner Tom Leary, and 
Commissioner Pamela Jones Harbour. Chairman Tim Muris regrets that he 
had to be out of town and could not be present. Also here today are 
some of my former and current colleagues, whose support I genuinely 
appreciate. Finally, it is an honor to be on this panel today with so 
many accomplished nominees and, in particular, with Jonathan Leibowitz, 
a proven public servant with whom I hope to have the opportunity to 
serve on the Commission.
    The free market is the foundation of our enviable economic system. 
It breeds innovation, creativity, and entrepreneurship at unmatched 
rates. Yet, while we can be proud of our beneficial use of the economic 
laws of demand and supply, we must never reduce either force to simply 
curves on a graph. Demand is not a scientific formula. Rather, it is 
the collective voice of the U.S. consumer. And while, in a well-
functioning marketplace, that collective consumer voice has the power 
to drive product innovation, marketing strategies, and pricing 
decisions, consumers are still at times taken for granted, ignored, 
manipulated, defrauded, and even robbed of their resources.
    For 90 years, the Federal Trade Commission has stood up for the 
welfare of the consumer. While the supply side in general responds 
effectively and responsibly to consumers' demands, some individual 
suppliers from inside and outside of our borders choose to illegally 
prey on consumers rather than battle for their business in the 
competitive arena. This harms consumers and, frankly, also harms firms 
that conduct their businesses in accordance with the law. That is why 
strong law enforcement in defense of the consumer is an imperative.
    The range of commercial activity that the FTC must patrol is ever 
growing. The rise of the Internet and other technology-related 
developments have brought consumers and suppliers closer together, 
creating new fora for providing and obtaining marketplace information 
and engaging in efficient commercial transactions. But these new tools 
have also, in another sense, driven consumers and suppliers further 
apart, as those bent on deception now can hide behind phony identities 
and jurisdictional borders and can steal private information without 
immediate detection. Working cooperatively with other law enforcers and 
with Congress, the FTC must lead the way in the fight against fraud, in 
whatever form it takes.
    The combination of antitrust and consumer protection enforcement is 
a powerful ``one-two punch'' in the FTC's fight to protect and enhance 
consumer welfare. Protecting competition through enforcement of the 
antitrust laws gives consumers lower prices, innovation, and choice. 
Simultaneously, enforcement of the consumer protection laws promotes 
the exchange of complete, accurate, and non-deceptive information in 
the marketplace, while protecting consumers' private information from 
unwanted and unknowing dissemination. One type of enforcement 
complements the other, as the flow of accurate information contributes 
to robust competition in the free market. And significantly, properly 
enforced, these laws instill and restore in consumers a faith in the 
fair and proper working of our economic system.
    Serving as the consumer's defender and protector is a tremendous 
responsibility. If I am confirmed, I commit that I will undertake that 
responsibility, together with my colleagues, with the utmost dedication 
and integrity, working tirelessly, and using the talented men and women 
of the FTC as my example.
    Thank you.
                                 ______
                                 
                      a. biographical information
    1. Name: (Include any former names or nicknames used.)

        Deborah Platt Majoras

        Deborah Platt Herman (previous married name)

        Deborah Sue Platt (maiden name)

        Deborah Sue Buser (birth name until adoption at 11 months)

        Debbie (nickname)

    2. Position to which nominated: Chairman, Federal Trade Commission.
    3. Date of nomination: May 11, 2004.
    4. Address: (List current place of residence and office addresses.)

        Residence: Information not released to the public.

        Office: Jones Day, 51 Louisiana Avenue, NW Washington, D.C. 
        20001.

    5. Date and place of birth: August 10, 1963; Titusville, 
Pennsylvania.
    6. Marital status: (Include maiden name of wife or husband's name.)
    Married to John Michael Majoras.
    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.)

        Stepchildren: Nicole Elizabeth Majoras, 17

        Shannon Christine Majoras, 15

        Andrew Louis Majoras, 11

    8. Education: (List secondary and higher education institutions, 
dates attended, degree received, and date degree granted.)

        (1) University of Virginia School of Law
        August 1986-May 1989
        J.D. 1989

        (2)Westminster College (New Wilmington, PA)
        September 1981-June 1985
        B.A., Sociology and Spanish, 1985

        (3) Meadville Area Senior High School, Meadville, PA
        September 1978-June 1981
        High School Diploma, 1981

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

        (1) Law Firm Partner
        Jones Day
        Washington, D.C.
        1/1/04 to present

        (2) Principal Deputy Assistant Attorney General
        United States Department of Justice, Antitrust Division
        Washington, D.C.
        11/23/02 to 12/31/03

        (3) Deputy Assistant Attorney General, Civil Matters
        United States Department of Justice, Antitrust Division
        Washington, D.C.
        4/16/01 to 11/22/02

        (4) Law Firm Partner
        Jones Day
        Washington, D.C.
        3/1/01 to 4/15/01

        Cleveland, Ohio
        1/1/99 to 2/28/01

        (5) Law Firm Associate
        Jones Day
        Cleveland, Ohio
        1/1/94 to 12/31/98

        Chicago, Illinois
        10/21/91 to 12/31/93

        (6) Law Clerk
        Hon. Stanley S. Harris, United States District Court
        for the District of Columbia
        Washington, D.C.
        9/89 to 9/91

        (7) Summer Associate
        Kirkland & Ellis
        Chicago, Illinois
        6/89 to 7/89

        (8) Summer Associate
        Jones Day
        Cleveland, Ohio
        7/88 to 8/88

        (9) Summer Associate
        Arnold & Porter
        Washington, D.C.
        5/88 to 7/88

        (10) Summer Associate
        Fox, Weinberg & Bennett
        Washington, D.C.
        6/87 to 8/87

        (11) Paralegal
        Porter, Wright, Morris & Arthur
        Washington, D.C.
        9/85 to 8/86

        (12) Receptionist
        Porter, Wright, Morris & Arthur
        6/85 to 8/85

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)
    Member, Antitrust Modernization Commission, Apri1 2004 to present
    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.)

        Partner, Jones Day
        Vice Chair, Shennan Act Section 2 Committee, ABA Section of 
        Antitrust Law, 2001 to present

    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.)

        Member, Church of the Saviour United Methodist Church, 
        Cleveland Heights, OH (roughly 1995-2000); Youth Council Member 
        (1997-2000)

        Member, Immanuel Presbyterian Church, McLean, VA (2002 to 
        present)

        Member, Independent Women's Forum (2002 to present)

        Member, Federalist Society (Jan. 2004 to present)

        Member, Business & Professional Women/USA (Feb. 2004 to 
        present)

        Member, Antitrust Section of the American Bar Association (1993 
        to present); Vice Chair, Publications Committee (1996-98); 
        Associate Editor, Antitrust magazine (1999-2001); Vice Chair, 
        Sherman Act Section 2 Committee (2001 to present)

        Member, Illinois Bar Association (roughly 1991-1993)

        Member, Ohio Bar Association (roughly 1994-1998)

        Board Member, In-Counsel With Women, Cleveland, OH (1999-2000)

        Member, University of Virginia Alumni Association (2002 to 
        present)

        Member, Lowe's Island Club (May 2003 to present)

    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.
    $2,000 to Bush-Cheney 2004 campaign.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognitions for outstanding service or achievements.)

        Order of the Coif

        Virginia Law Review, Articles Editor

        American Jurisprudence Awards in Civil Procedure, Property Law

        The Raven Society

        Summa Cum Laude (B.A.)

        Alumni Honors Award

        Zeta Tau Alpha Foundation Scholarship

        Wolves Club Scholarship

        Henrietta Lee Scholarship

        H.E. Parker-Schmid Scholarship
        Westminster College Scholarship

        Lambda Sigma

        Pi Sigma Pi

        Omicron Delta Kappa

    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.)
    I have authored or co-authored the following publications:

        ``Antitrust Compliance in a Federal/State 
        Environment,''_Government, Law & Policy Journal_, [    ], 2004 
        (to be published).

        ``The Price of Price-Fixing Through International Cartels,'' 1 
        Business Law International 24, Sept. 1999.

        ``A Program That Has Lost Its Way,'' Legal Times, May 4, 1998.

        ``The Effect of Twenty Years of Hart-Scott-Rodino on Merger 
        Practice,'' 65 Antitrust Law Journal 865, Spring 1997.

    (I have not included papers that were published in the context of 
speeches and panels; those papers are listed in response to No. 16, and 
copies are provided.)
    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.)
    The following is a list of speeches I have delivered or panel 
discussions in which I have participated in the last 5 years (two 
copies of texts provided where they exist):

        2004 Competition Law and Policy Forum, ``Interdependency/
        Coordinated Effects Issues In Merger Review,'' Cambridge, 
        Ontario, April 30, 2004 (Text)

        American Bar Association, Section of Antitrust Law, 52nd Annual 
        Spring Meeting, ``Economic Analysis of Mergers: Recent 
        Developments/Future Convergence,'' Washington, D.C., March 31, 
        2004. (No text)

        The Conference Board, 2004 Antitrust Conference, ``New Trends 
        in Antitrust Oversight of Mergers,'' New York, New York, March 
        3, 2004. (No Text)

        Business & Professional Women USA, ``Keynote Address: 
        Reflections on Equity In The Workplace,'' Washington, D.C., 
        February 5, 2004. (Text)

        The British Institute of International and Comparative Law, 
        Second Annual Merger Control Conference, ``Transatlantic 
        Cooperation--What is Really Happening?,'' London, England, 
        December 2, 2003. (No text)

        Kaye Scholer's Annual Antitrust Seminar, Key Developments in 
        Antitrust for Corporate Counsel, ``A View from the Antitrust 
        Division: Top 10 Things Every Corporate Counsel Should Know,'' 
        New York, NY, November 20, 2003. (Text, though unpublished)

        American Chamber of Commerce in Germany, Significant Antitrust 
        Developments in Europe and the U.S., ``An Overview of Antitrust 
        Enforcement in the United States Department of Justice,'' 
        Frankfurt, Germany, November 18, 2003. (No Text)

        The State Bar of California, Antitrust and Unfair Competition 
        Law Section, 11th Annual Golden State Antitrust and Unfair 
        Competition Law Institute, ``Vigorous Antitrust Enforcement 
        Covering the Waterfront: An Update from the Antitrust 
        Division,'' October 23, 2003 (Text).

        Meadville Business & Professional Women's Club, 75th 
        Anniversary of National Business Women's Week, ``Business & 
        Professional Women: Restoring Faith in a Climate of Mistrust,'' 
        Meadville, PA, October 20, 2003. (Text, though unpublished)

        American Bar Association, Section of Antitrust Law, Post Annual 
        Meeting, Panel: U.S. and Canada Antitrust Issues, Vancouver, 
        B.C., August 15, 2003. (No text)

        National Economic Research Associates, 23rd Annual Antitrust & 
        Trade Regulations Seminar, ``Ensuring Sound Antitrust Analysis: 
        Two Examples,'' New Mexico, July 3, 2003. (Text)

        American Bar Association, Section of Business Law, 2003 
        Conference for Corporate Counsel, ``A Review of Recent 
        Antitrust Division Actions,'' June 12, 2003 (Text).

        The Corporate Counsel Section of the Virginia State Bar and 
        McGuire Woods, ``The Antitrust Forum: An Interactive Program 
        with High-Ranking Government Officials,'' Richmond, VA, April 
        24, 2003. (No text)

        The National Institute for Women Corporate Counsel, ``Keynote 
        Address,'' Washington, D.C., April 10, 2003. (Text)

        American Bar Association, Antitrust Law Section, 51st Annual 
        Spring Meeting, ``Dominant Firms Under U.S. and E.U. 
        Competition Law: Convergence or Divergence? Tying, Bundling, 
        Leveraging,'' Washington, D.C., April 3, 2003. (No text)

        The Conference Board, 2003 Antitrust Conference, ``Horizontal 
        Restraints and Antitrust Concerns in Designing Joint Ventures, 
        Networks, and Strategic Alliances,'' New York, NY, March 18, 
        2003. (No text)

        DOJ/FTC Hearings on Health Care and Competition Law and Policy, 
        Federal Trade Commission, Introductory Remarks, ``A Tale of Two 
        Cities,'' Washington, D.C., February 28, 2003 (Text).

        American Bar Association, Antitrust Law Section, Forum on 
        International Competition Law, ``Recent Developments in 
        International Competition Law,'' New York, NY, February 6, 
        2003. (No text)

        Precursor Group, Tenth Annual--``Investment Precursors'' 
        Workshop, ``Antitrust Outlook,'' Washington, D.C., February 4, 
        2003. (No text)

        U.S. Council for International Business, Competition Committee 
        Meeting, ``Current International Antitrust Agenda,'' 
        Washington, D.C., January 29, 2003. (No text)

        New York Bar Association, Antitrust Law Section, Annual 
        Meeting, ``Antitrust and Federalism,'' New York, NY, January 
        23, 2003 (Text).

        American Bar Association, Antitrust Law Section, Midwinter 
        Leadership Conference, ``Efficiencies in Merger Review,'' Rio 
        Grande, Puerto Rico, January 19, 2003. (No text)

        Federal Bar Association, Corporate and Association Counsels 
        Division and American Corporation Counsel Association, 
        Northeast Chapter, ``Antitrust Going Global in the 21st 
        Century,'' Cleveland, Ohio, October 17, 2002 (Text).

        Canadian Bar Association, National Law Section, 2002 Annual 
        Fall Conference on Competition Law, ``Antitrust Remedies in the 
        United States: Adhering to Sound Principles in a Multi-Faceted 
        Scheme,'' Ottawa, Canada, October 4, 2002 (Text).

        American Bar Association, Section of Antitrust Law, Masters 
        Course, ``Current Enforcement Priorities at the Antitrust 
        Division,'' Sea Island, Georgia, October 2002. (Text)

        International Competition Network, ``Guiding Principles and 
        Recommended Practices for Merger Notification and Review''--
        Introductory Remarks (made on behalf of AAG Charles A. James), 
        Naples, Italy, September 29, 2002 (Text).

        KPMG/Chicago Graduate School of Business Mergers and 
        Acquisitions Forum, ``Merger Enforcement at the Antitrust 
        Division,'' Chicago, IL, September 27, 2002 (Text Published, 
        But Not Delivered).

        Health Care and Competition Law and Policy Workshop, Federal 
        Trade Commission, Washington, D.C., September 9, 2002 (Text).

        American Bar Association, 2002 Annual Meeting--Developments in 
        Merger Law and Policy, ``Merger Developments,'' Washington, 
        D.C., August 13, 2002. (No text)

        American Bar Association, 2002 Annual Meeting Plenary Program, 
        ``Federal Enforcement 2002,'' Washington, D.C., August 9, 2002. 
        (No text)

        New York Women Antitrust Lawyers Luncheon Program, ``The 
        Microsoft Case,'' New York, NY, June 7, 2002. (No text)

        George Mason University Symposium, ``Recognizing the 
        Significance of Prosecutorial Discretion in a Multi Layered 
        Antitrust Enforcement World,'' Washington, D.C., May 17, 2002. 
        (Text)

        American Bar Association, Antitrust Section, Annual Spring 
        Meeting, ``Hot Topics,'' Washington, D.C., April 25, 2002. (No 
        text)

        Houston Bar Association, Antitrust and Trade Regulation 
        Section, ``Houston, We Have a Competitive Problem: How Can We 
        Remedy It?'', Houston, TX, April 17, 2002 (Text).

        American Bar Association Section of Antitrust Law and Howard 
        University, ``Why Antitrust?'', Washington, D.C., March 26, 
        2001. (No text)

        The Precusor Group--The Anticipating Change Workshop for 
        Communications and Technology Investors, ``Antitrust: 
        Microsoft, Echostar & Consolidation,'' Washington, D.C., 
        February 6, 2002. (No text)

        New York State Bar Association, Antitrust Law Section, Annual 
        Meeting, Panel--``Preparing and Presenting Experts; Practical 
        and Ethical Issues,'' New York, NY, January 24, 2002. (No text)

        New York City Bar Association, Committee on Antitrust and Trade 
        Regulation, Milton Handler Review, ``Antitrust Review,'' New 
        York, NY, December 4, 2001. (No text)

        American Law Institute--American Bar Association--Trying and 
        Winning a Civil Antitrust Case, Panel--``Effective Interaction 
        and Coordination in Multi-Party Antitrust Trials,'' Washington, 
        D.C., November 30, 2001. (No text)

        State Bar of Georgia, Antitrust Law Section, ``GE-Honeywell: 
        The U.S. Decision,'' Atlanta, GA, November 29, 2001 (Text).

        American Bar Association, Antitrust Section, Fall Forum: New 
        Administration and New Technologies, Panel--``Mergers in High-
        Tech Industries,'' Washington, D.C., November 15, 2001. (No 
        text)

        National Economic Research Associates, 21st Annual Antitrust & 
        Trade Regulation Seminar, Panel: ``New Directions in Antitrust 
        Enforcement,'' Santa Fe, NM, July 6, 2001. (No Text)

        American Bar Association, Section of Antitrust Law, 49th Annual 
        Spring Meeting, ``Antitrust Litigation Without Borders: 
        Managing Private Antitrust Actions Across Multiple 
        Jurisdictions,'' Washington, D.C., March 28, 2001. (Text)

    17. Selection:
    (a) Do you know why you were selected for the position to which you 
have been nominated by the President?
    I believe that I was chosen based on my qualifications as an 
antitrust lawyer and as a leader and manager, with which many relevant 
persons became familiar during my tenure at the Department of Justice 
Antitrust Division.
    (b) What in your background or employment experience do you believe 
affirmatively qualifies you for this particular appointment?
    I am an experienced antitrust lawyer, having served both in the 
public enforcement and in the private representation sectors. During my 
recent tenure as Principal Deputy Assistant Attorney General in the 
Antitrust Division, my responsibilities spanned the civil, 
international, and policy fronts, and I oversaw enforcement matters in 
a wide variety of industries. I also gained significant experience in 
leading and managing a large enforcement organization and developed 
strong relationships throughout the global antitrust enforcement 
community. In my private law practice, I have participated in a variety 
of antitrust counseling and civil litigation matters, including matters 
involving mergers and acquisitions, governmental investigations, 
monopolization, price-fixing conspiracies, joint ventures, distribution 
issues, and trade associations. I firmly believe in the importance of 
competition to our economy and our citizens and in the importance of 
strong enforcement of the antitrust laws. I further believe that laws 
designed to protect consumers from marketing fraud, deceptive 
practices, and false advertising and to protect consumers' privacy must 
be vigorously enforced.
                   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.
    If confirmed, I will resign from my partnership at Jones Day. At 
the time of my departure, the firm will pay me my agreed upon 
compensation pursuant to the partnership agreement. I have no deferred 
compensation agreements with Jones Day and, once I leave the firm, it 
will make no further payments to me. I will continue to participate in 
both the defined benefit and defined contribution retirement plans but 
will receive no contribution during my tenure at the FTC.
    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.
    My investments and those of my spouse are widely diversified in 
mutual funds that should not present potential conflicts. My spouse is 
a partner at, and receives partnership income from, Jones Day, a law 
firm that represents and is likely to represent clients before the FTC. 
I will not participate personally and substantially in any particular 
matter that will have a direct and predictable effect on the financial 
interests of Jones Day, unless I obtain a written waiver under the 
applicable statute.
    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?
    During the last ten years, excluding my tenure at the Justice 
Department, I have been an associate and then a partner at Jones Day, a 
law firm that represents and likely will represent clients before the 
FTC. I have represented numerous clients in various matters, including 
before the FTC. I am aware of the conflict of interest rules pertaining 
to these prior dealings, and I will abide by those rules if and when 
applicable, consulting liberally with the Agency Ethics Official.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy.
    In my role as Deputy Assistant Attorney General at the Antitrust 
Division from 2001 through 2003, I consulted with colleagues at the 
Justice Department and/or Congressional staff members on various 
legislative proposals relating to antitrust or presenting competition 
issues. Legislative issues that I discussed internally and/or with 
Congressional staff members included proposals to increase fines and 
sentences for criminal antitrust violations; to expand the Antitrust 
Division's leniency policy; to revise the Tunney Act; to make technical 
corrections to the antitrust laws; to immunize airlines from antitrust 
liability during emergencies; and to place competition requirements on 
holders of music copyrights.
    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.)
    If confirmed, I will resign from my partnership at Jones Day. I 
will then abide by all applicable conflict of interest statutes and 
rules, consulting liberally with the Agency Ethics Official.
    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 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain. 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 for a minor traffic offense? If so, please explain. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain.
    Yes. I was a party to a divorce proceeding: Deborah P. Herman v. 
Steven James Herman, No. D270730 (Filed Nov. 18, 1999, Court of Common 
Pleas, Cuyahoga County). The divorce was uncontested, and judgment 
granting it was entered on January 26, 2000.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, please explain. No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination. None.
                     e. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? 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, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Please explain how if confirmed, you will review regulations 
issued by your department/agency, and work closely with Congress, to 
ensure that such regulations comply with the spirit of the laws passed 
by Congress.
    I know that the Commission has long been committed to reviewing the 
effectiveness of its regulations on a periodic basis. This is an 
important task for an agency like the FTC that is responsible for 
implementing by rule and enforcing a wide variety of Federal laws. 
Rigorous review of regulatory objectives and possible solutions is 
important also during the process of developing and issuing 
regulations. Before doing so, I will study the enabling legislation and 
work to ensure that a full record is developed on which the Commission 
can make sensible, well-supported decisions. The views of interested 
members of Congress would be an important part of the rulemaking 
record. The ultimate goal of the rulemaking process is to ensure that 
any FTC regulations are well-crafted to achieve results as Congress 
intended in passing the underlying statute.
    5. 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 does your previous professional experience and education 
qualify you for the position for which you have been nominated?
    I am an experienced antitrust lawyer, having served both in the 
public enforcement and in the private representation sectors. During my 
recent tenure as Principal Deputy Assistant Attorney General in the 
Antitrust Division, my responsibilities spanned the civil, 
international, and policy fronts, and I oversaw enforcement matters in 
a wide variety of industries. I also gained significant experience in 
leading and managing a large enforcement organization and developed 
strong relationships throughout the global antitrust enforcement 
community. In my private law practice, I have participated in a variety 
of antitrust counseling and civil litigation matters, including matters 
involving mergers and acquisitions, governmental investigations, 
monopolization, price-fixing conspiracies, joint ventures, distribution 
issues, and trade associations. I firmly believe in the importance of 
competition to our economy and our citizens and in the importance of 
strong enforcement of the antitrust laws. I further believe that laws 
designed to protect consumers from marketing fraud, deceptive 
practices, false advertising and to protect consumers' privacy must be 
vigorously enforced.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    During my tenure at the Department of Justice, I worked with the 
Commission on the enforcement of the antitrust laws, for which the 
agencies share responsibility. I developed an appreciation for the 
Commission's distinctive role in that area and learned of its many 
other responsibilities. The Commission has earned an excellent 
reputation for sensible, effective law enforcement and also for its 
policy development work. I believe that I am well-qualified to advance 
the FTC's important missions and, if confirmed, look forward to the 
opportunity again to serve our Nation's consumers. I firmly believe in 
the importance of competition to our economy and our citizens and in 
the importance of strong enforcement of antitrust and consumer 
protection laws.
    3. What goals have you established for your first two years in this 
position, if confirmed?
    In general, my goals are to continue the strong enforcement 
programs that the FTC has implemented over the past 15 years to the 
benefit of consumers; to adjust the Commission's priorities to keep 
pace with economic and other developments; to ensure that the 
taxpayers' dollars are spent effectively and efficiently; to lead and 
manage with professionalism and integrity; and to continue to exercise 
global leadership in antitrust enforcement and in the protection of 
consumers.
    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?
    Although I have little experience in dealing with consumer 
protection issues, my antitrust experience will usefully inform my 
understanding of the consumer protection challenges facing the 
Commission. I am currently working to learn the legal landscape for 
consumer protection enforcement, as well as the issues currently facing 
the Bureau of Consumer Protection. If confirmed, I will listen freely 
to all those with an interest in the Commission and will work closely 
with respected colleagues on the Commission and the agency's expert 
staff. Such collaboration will help me to gain further familiarity with 
the Commission's work.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when society's problems 
should be left to the private sector, and what standards should be used 
to determine when a government program is no longer necessary.
    The free market, the hallmark of our strong economic system, 
greatly benefits consumers. Accordingly, in general, I favor market 
forces over extensive government regulation. Regulation can be costly 
and provoke unintended consequences. What the absence or limitation on 
regulation means, however, is that the government must not hesitate to 
act in an enforcement capacity when market participants fail to comply 
with the rules governing the market, i.e., the antitrust and consumer 
protection laws. In the few instances in which a market or markets 
experience systemic failure that is not likely to self-correct, 
government regulation tailored to correct the failure may be 
appropriate, provided that careful analysis shows that the proposed 
regulation's expected benefits outweigh its expected costs. Because 
markets will act in accordance with regulation and adjust to it, and 
because not all actions and adjustments can be predicted in advance 
when regulations are first implemented, it is important that regulatory 
schemes undergo regular evaluations of their continuing benefits and 
costs. This should be done on a case by case basis, using market facts 
to evaluate the benefits of continuing regulation against the expected 
benefits of less or no government intervention. Factors to consider 
include what the economic actors' incentives would be in a market free 
of regulation and the costs of regulation or the lack thereof to 
consumers.
    6. Describe the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated.
    The mission of the FTC is to protect consumers from actions that 
interfere with their free enjoyment of the benefits of the free market. 
The FTC accomplishes its mission by enforcing the antitrust laws; by 
enforcing the consumer protection laws; by educating consumers about 
the competitive process and unfair and deceptive practices; and by 
providing a forum for study and debate on significant market issues 
that, in turn, informs Congress, government agencies, and the public.
    The FTC's major programs are: (1) Competition Law Enforcement and 
Guidance, which includes merger and nonmerger components, (2) Consumer 
Protection Law Enforcement, Rulemaking, and Guidance, (3) Policy 
Instruments for Assisting and Complementing Law Enforcement, and (4) 
International Activities, in both the competition and consumer 
protection areas. Recent FTC accomplishments have included launching 
the ``Do Not Call'' list; bringing more Part 3 administrative 
adjudication; completing an assessment of identity theft and the 
effectiveness of existing tools to combat it; increasing attacks on 
deceptive health claims; completing a report on the balance between 
competition and patent policy; completing a report on the reach and 
applicability of the state action doctrine; and holding a workshop to 
assess the effectiveness of the Horizontal Merger Guidelines. I 
understand that currently, the Consumer Protection and Economics 
Bureaus are working very hard to complete the rulemakings and studies 
the Commission was charged with last year by the Fair and Accurate 
Consumer Transactions Act.
    7. What do you believe to be the top three challenges facing the 
department/agency and why?
    Working with agencies inside and outside of the United States to 
battle cross-border fraud; continuing to find appropriate ways to 
evaluate the effectiveness of FTC enforcement remedies and programs; 
and hiring and retaining top legal and economic talent in the face of 
appreciably higher private sector salaries.
    8. In reference to question number six, what factors in your 
opinion have kept the department/agency from achieving its missions 
over the past several years?
    The FTC has performed quite well in achieving its missions over the 
past several years. Still, every government agency must always look for 
ways to improve and, if confirmed, I intend to thoroughly evaluate the 
agency's performance in achieving its goals and identify areas and 
plans for improvement.
    9. Who are the stakeholders in the work of this department/agency?
    Consumers are the primary stakeholders. Other stakeholders include 
the business and legal communities, Federal and state agencies, and 
elected representatives.
    10. What is the proper relationship between the position to which 
you have been nominated, and the stakeholders identified in question 
number nine?
    The primary consideration for members of the FTC as they carry out 
the FTC's mission is whether an action will increase the welfare of 
consumers. Making that determination requires listening to and 
responding to a full range of participants in the economic and 
political system: members of Congress and other elected officials; 
consumer organizations; businesses and their organizations; members of 
the bar and their organizations; officials at Federal and state 
agencies; and any other relevant voices. The FTC should also continue 
to make its resources (such as consumer and business education, the 
National Do-Not-Call Registry; Identity Theft resources; and Consumer 
Sentinel) widely known and available to the public.
    11. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices.
    (a) What do you believe are your responsibilities, if confirmed, to 
ensure that your department/agency has proper management and accounting 
controls?
    Ensuring that the Commission has proper management and accounting 
controls is a significant responsibility for the Chairman. I understand 
that the Commission has published a Strategic Plan for Fiscal Years 
2000-2005 that includes clearly articulated performance measures and 
targets. If confirmed, I will study the Plan and any other relevant 
documents to assess management and accounting controls, working closely 
with the employees who have such responsibilities and changing or 
adding controls as needed.
    (b) What experience do you have in managing a large organization?
    As Principal Deputy Assistant Attorney General in the Antitrust 
Division of the Department of Justice, I worked closely with the 
Assistant Attorney General to manage an organization with hundreds of 
employees, a significant budget, and a broad and significant mission. 
As a partner at Jones Day, an international law firm of 2000 attorneys, 
I have been involved in several aspects of management, including 
serving on the firm's Strategic Planning Committee.
    12. 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) What benefits, if any, do you see in identifying performance 
goals and reporting on progress in achieving those goals?
    Every government department and agency must be accountable to the 
U.S. taxpayer. And every successful organization sets goals and then 
evaluates its performance. The benefit of identifying measurable 
performance goals and reporting to Congress on success in achieving 
those goals is that it requires the agency employees to demonstrate 
direct accountability to the representatives of the taxpayers, while 
imposing the discipline of self-evaluation on a busy agency, which 
ultimately assists the agency itself.
    (b) What steps should Congress consider taking when a department/
agency fails to achieve its performance goals? Should these steps 
include the elimination, privatization, downsizing, or consolidation of 
departments and/or programs?
    As a first step, Congress and the agency leadership should 
communicate in an effort to determine why goals have not been met and 
whether continuation of programs is likely to achieve the goals. 
Particularly in a law enforcement context, the ability to meet certain 
goals may depend on outside circumstances. In many instances, a 
restructuring or reorienting of a program may be the best way to 
achieve the program's goals. This underscores the value of internal 
evaluations of an agency's goals and performance in achieving them. 
More dramatic adjustments such as the elimination, privatization, 
downsizing or consolidation of departments or programs should be 
undertaken only after the deliberate evaluation of performance that 
considers the program in its historical context.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    If confirmed, my primary goal will be to work collegially with my 
fellow Commissioners and with the FTC staff to continue to execute 
effective law enforcement, competition and consumer advocacy, and 
economic and policy analysis.
    13. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    My philosophy is based on respect, fairness, and teamwork. I show 
respect for all employees, regardless of rank or viewpoint; I work to 
be fair in delegating and evaluating; and I prefer to work together 
with all as a team. My supervisory model is to lead by example, again 
by being respectful and working as a team player, and also through hard 
work, strong focus on accomplishing the best possible result, and 
integrity. When employees within my responsibility fall short, I 
believe in communicating the shortfall directly and respectfully, which 
has the best chance of improving the organization and the individual's 
performance and professional growth. No employee has brought a 
complaint against me.
    14. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please explain.
    During my tenure at the Justice Department, I worked directly with 
the agency's oversight committee, with interested members of Congress, 
and with their staffs. In all of these dealings I believe that I 
developed effective and respectful relationships. If confirmed, I will 
strive to maintain a cordial and effective working relationship with 
this Committee. The critical economic issues faced by this Committee 
and the Commission deserve no less.
    15. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    I recognize the important role of Inspectors General in assisting 
agency management to eliminate waste, fraud and abuse of agency 
programs, and to recommend ways to improve agency operations. If 
confirmed, I will work with the FTC's Inspector General to achieve 
these goals. I will, of course, cooperate fully in any audits and 
investigations.
    16. In the areas under the department/agency's jurisdiction to 
which you have been nominated, what legislative action(s) should 
Congress consider as priorities? Please state your personal views.
    I know that the Commission has recommended legislation to enhance 
its ability to combat cross border consumer fraud. In an increasingly 
global marketplace, sufficient tools to address this important problem 
would be a useful adjunct to the Commission's authority. The Commission 
has also suggested that the Congress eliminate the FTC Act's exemption 
for telecommunications common carriers so as to allow it to bring cases 
against false and deceptive advertising by telephone companies. This, 
too, seems sensible. If confirmed, I will confer with my FTC colleagues 
and closely study the Commission's responsibilities to determine 
whether there are other legislative priorities I would recommend.
    17. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending in an open 
manner through a set of fair and objective established criteria? If 
yes, please explain what steps you intend to take and a time frame for 
their implementation. If not, please explain why.
    Although the Commission does not have any grantmaking authority, it 
does provide a detailed programmatic budget to the Congress that shows 
the allocation of its budget authority to the many programs for which 
it is responsible. Together with the Commission's Strategic Plan and 
its performance measures, the program budget provides the Congress and 
the public effective means to evaluate the Commission's operations.

    The Chairman. Thank you very much.
    Mr. Leibowitz?

  STATEMENT OF JON LEIBOWITZ, NOMINATED TO BE A COMMISSIONER, 
                    FEDERAL TRADE COMMISSION

    Mr. Leibowitz. Thank you, Mr. Chairman, Senator Wyden, 
Senator Boxer, Senator Lautenberg--from my original home state 
of New Jersey.
    I also want to thank Senators Kohl and DeWine for that kind 
and, I'm not sure entirely deserved, introduction on my behalf. 
The Antitrust Subcommittee, under their direction, was and is a 
terrifically bipartisan place to work. We planned our agenda 
together, we held meetings together--it's a tribute to their 
leadership. And you couldn't have a better, more decent boss 
than Herb Kohl. I can't say enough about what an honor it was 
to have been a part of his office for two terms.
    Mr. Chairman, with the possible exception of the Senate, I 
can't think of a better or more important place to work than 
the Federal Trade Commission. Its mission, to ensure 
competition and to foster the exchange of accurate information 
in the marketplace, brings consumers lower prices, greater 
choices, and creates more informed decisionmaking.
    When spam began to clog the inboxes of millions of 
computers and made parents afraid to let their children use e-
mail, Congress turned to the FTC to start going after the worst 
spammers and to tackle, or start to tackle, this technological 
traffic jam.
    When brand-name drug companies colluded with generics to 
prevent consumers from receiving more affordable medicine, the 
FTC halted this abusive practice.
    When a constant barrage of telemarketing calls disrupted 
the dinner tables of America, the FTC devised a plan to protect 
the privacy that all Americans deserve in their own homes. The 
``Do Not Call'' List has improved the lives--and the dinners--
of literally tens of millions of Americans.
    From stopping predatory lending practices and phony weight-
loss schemes, to ensuring privacy and security on the Internet, 
to blocking mergers that harm competition, the FTC is a 
critical first line of defense for bread-and-butter issues that 
affect all Americans. And while protecting consumer welfare, 
the Commission has also been crucial to preserving our system 
of free enterprise, and they have been doing so effectively for 
almost 90 years--since it was established during the Wilson 
Administration.
    Part of this is due to the leadership of the Commission in 
recent years: people like Bob Pitofsky and Tim Muris, the late 
Janet Steiger of Wisconsin; the Commissioners who are here 
today--I'm sure Debbie will become part of this rich tradition. 
And part of it's due to the talented, energetic, and 
hardworking staff at the Commission. Not a better staff, I 
believe, in all of government.
    Of course, it's impossible to imagine what consumer 
protection and competition challenges loom on the horizon, but 
I'd be honored to play even a small role in helping this unique 
Federal agency--one of the few in Washington whose stated 
mandate is to protect American consumers--devise solutions to 
the problems of the future.
    So, Mr. Chairman, if I am fortunate enough to be confirmed, 
I will go to the Commission with an open mind on every issue, 
but also with a firm commitment to very aggressively enforce 
the laws.
    Thank you.
    [The prepared statement and biographical information of Mr. 
Leibowitz follow:]

 Prepared Statement of Jon Leibowitz, Nominated to be a Commissioner, 
                        Federal Trade Commission
    Thank you, Mr. Chairman, Senator Hollings and Members of the 
Committee. I also want to thank Senators Kohl and DeWine for those kind 
and I'm not sure entirely deserved words on my behalf. The Antirust 
Subcommittee, under their direction, was and is a wonderfully 
bipartisan place to work--it's a tribute to their joint leadership. And 
you couldn't have a better, more decent boss than Senator Kohl. I can't 
say enough about what an honor it was to have been a part of his office 
for two terms.
    I don't have a long statement but, with the Committee's permission, 
I would like to introduce members of my family who are here today, and 
to speak briefly:

        Behind me is my wife Ruth Marcus, a writer at the Washington 
        Post, who has been enormously supportive of my returning to 
        public service; and sitting next to her are our daughters--
        Emma, age 9, and Julia, age 7.

    Mr. Chairman, with the possible exception of the Senate, I can't 
think of a better or more important place to work than the Federal 
Trade Commission. Its mission--to ensure competition and to foster the 
exchange of accurate information in the marketplace--brings consumers 
lower prices and greater choices, and creates more informed decision-
making.
    When SPAM began to clog the in-boxes of millions of computers and 
made parents afraid to let their children use e-mail, Congress turned 
to the FTC to start going after the worst spammers and help tackle this 
technological traffic jam. When brand name drug companies colluded with 
generics to prevent consumers from receiving more affordable medicine, 
the FTC stopped this abusive practice. And when a constant barrage of 
telemarketing calls disrupted the dinner tables of America, the FTC 
devised a plan to protect the privacy that all Americans deserve in 
their own homes. The ``Do Not Call List'' has improved the lives--and 
the dinners--of literally tens of millions of Americans.
    From stopping predatory lending practices and phony weight loss 
schemes to ensuring privacy and security on the Internet to blocking 
mergers that harm competition, the FTC is a critical first line of 
defense for bread and butter issues that affect average Americans. And 
while protecting consumer welfare, the Commission has also been crucial 
to preserving our system of free enterprise--doing so effectively for 
almost 90 years, since it was established during the Wilson 
Administration.
    Part of this is due to the leadership of the Commission in recent 
years--people like Bob Pitofsky, Tim Muris, and the late Janet Steiger 
of Wisconsin--I am sure Debbie will be part of this rich tradition. And 
part of this is due to the talented, energetic and hard working agency 
staff. Not a better staff, I believe, in all of government.
    Of course, it is impossible for us to know--or perhaps even 
imagine--what consumer protection and competition challenges loom on 
the horizon. But I would be honored to play even a small role in 
helping this unique Federal agency--one of the few in Washington whose 
stated mandate is to protect American consumers--devise solutions to 
future problems.
    Mr. Chairman, if I am fortunate enough to be confirmed, I will go 
to the Commission with an open mind on every issue. But also with a 
firm commitment to very aggressively enforce the laws.
    Thank you.
                                 ______
                                 
                      a. biographical information
    1. Name: (Include any former names or nick names used.) Jonathan D. 
Leibowitz.
    2.  Position to which nominated: Federal Trade Commission 
(Commissioner).
    3. Date of nomination: April 8, 2004.
    4. Address: (List current place of residence and office addresses.)

        Residence: Information not released to the public.
        Office: Motion Picture Association of America, 1600 I Street, 
        Washington DC 20006.
    5. Date and place of birth: Born June 17, 1958 in New York City, 
NY.
    6. Marital status: (Include maiden name of wife or husband's name.)
    Married to Ruth Allyn Marcus.
    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.)

        Emma Rose Leibowitz--Age 8
        Julia Rachel Leibowitz--Age 6

    8. Education: (List secondary and higher education institutions, 
dates attended, degree received and date degree granted.)

        Dwight Morrow High School, Englewood, N.J. (1972-1976)

        University of Wisconsin (1976-1980), BA 1980

        New York University School of Law (1981-1984), JD 1984

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

        Vice President, Congressional Relations, Motion Picture 
        Association of America, Washington, D.C. (2000 to present)

        Chief Counsel, United States Senator Herb Kohl, Senate 
        Judiciary Committee, Washington, D.C. (1989-2000)

        Democratic Chief Counsel and Staff Director: Senate Judiciary 
        Committee Subcommittee on Antitrust, Business Rights and 
        Competition (1997-2000); Senate Judiciary Committee 
        Subcommittee on Terrorism and Technology (1995-1996); Senate 
        Judiciary Committee Subcommittee on Juvenile Justice (1991-
        1994)

        Counsel, United States Representative Edward Feighan (1987-
        1988)

        Counsel, United States Senator Paul Simon, Senate Judiciary 
        Committee (1986-1987)

        Attorney, Lane and Edson, Washington, D.C. (1985-1986)

        Attorney, Cole, Raywid and Bravennan, Washington, D.C. (1984-
        1985)

        Attorney, Katten Muchin Zavis Pearl & Geller (Summer 1983)

        Employee, Sib's-by-the-Sea, St. Thomas, U.S. Virgin Islands 
        (1981)

        Employee, Vantage Publishing, New York, N.Y. (1980-1981)

    10. Government experience:(List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)
    None other than those listed above.
    11. Business relationships:(List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.)
    I am an officer of the Motion Picture Association of America.
    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.)

        Member, D.C. Bar Association, 1986 to present
        Member, New York State Bar Association (Retired)

    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.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years.
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years.
    None, except that I have been a registered Democrat in Maryland 
since 1998 and before that was a registered Democrat in Virginia.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognitions for outstanding service or achievements.)

        Phi Beta Kappa, University of Wisconsin, 1980
        Knapp Fellowship (for Undergraduate Honors Thesis)

    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated. None.
    17. Selection:
    (a) Do you know why you were chosen for this nomination by the 
President?
    Senators Daschle and Kohl recommended me to the President for a 
Democratic vacancy on the FTC. While I have not discussed my nomination 
with the President personally, I believe I was nominated based on my 
educational and professional background, which included four years as 
Chief Counsel to the Antitrust Subcommittee of the Senate Judiciary 
Committee, and my reputation for bipartisanship and consensus building.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment?
    My work on the Antitrust Subcommittee involved a variety of 
competition policy matters as well as oversight of the Federal 
antitrust agencies. My work on the Judiciary Committee involved 
consumer protection issues. My work in the Senate, generally, has given 
me a healthy respect for legislative intent and insight into the 
interaction between Congress and agencies. I believe that my background 
and experience will enable me to make informed, common sense judgments 
about complex matters before the Commission.
                   b. future employment relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? Yes.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.
                   c. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers.
    I am partially vested in the MPAA's 401K plan and, from my years 
working for Congress, I have vested in the Thrift Savings Plan and am 
also entitled to a pension after I retire.
    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.
    My financial disclosure report, which is attached, identifies 
several stock mutual funds my wife and I hold as well as small stock 
holdings my dependent children have in several companies. If 
appropriate, I will divest conflicting financial interests. I will not 
participate in any matter involving the Washington Post, where my wife 
is employed, unless I am authorized to participate pursuant to 5 C.F.R. 
2635.502. Moreover, pursuant to that same regulation, for one year 
after I leave the MPAA I will not participate in any particular matter 
involving specific parties in which the Association is a party or 
represents a party, unless I am authorized to participate. Indeed, on 
any matter that might involve a potential conflict of interest or raise 
the appearance of one, I will consult with the ethics officers at the 
FTC.
    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?
    There is none.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy.
    As Counsel to Senator Kohl and to the Judiciary Committee from 1989 
through 2000--and to Senator Simon and Congressman Feighan before 
that--I worked on a large number of legislative matters. These ranged 
from bankruptcy reform to crime policy to increasing the filing 
thresholds for merger reviews to encouraging the deployment of 
satellite television. In other words, one of my principal 
responsibilities was to influence legislation; during that time, I 
probably gave recommendations for literally hundreds of floor and 
committee votes. Since I left the Hill to work for the MPAA, my 
principal legislative focus has been more limited: to support measures 
that would reduce film piracy, especially on the Internet.
    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.)
    To the extent that I have any potential conflicts of interest, I 
will follow applicable statutes and regulations, and consult with 
ethics officers at the Federal Trade Commission. I have attached my 
``conflict of interest'' letter to the FTC, which was reviewed by its 
Designated Agency Ethics Official, the White House and the Office of 
Government Ethics.
    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?
    I have never been involved in any civil litigation or agency 
proceeding, personally, and I have not been involved in any MPAA-
related litigation or agency proceeding.
    The Association, however, represents its member companies in 
connection with issues of common interest to the motion picture and 
television industry. MPAA conducts anti-piracy efforts, which involve 
both civil and criminal enforcement actions related to infringements of 
its member companies' copyrights in their motion pictures and 
television programs. In the course of those anti-piracy activities and 
member company litigation, the MPAA itself has become party to several 
civil litigation matters. In addition, it has been party to certain 
litigation involving disputes arising in the ordinary course of its 
business operations. The litigation that has involved MPAA as a named 
party during the time I have been an MPAA officer is as follows:

        ``John Doe, Plaintiff, vs. Motion Picture Association of 
        America, Inc., a Delaware Corporation, Defendant,'' filed in 
        2001 in the United States District Court for the Eastern 
        District of Michigan, Southern Division, as Case No. 01-72664. 
        This action asserted claims by an informant for payment of a 
        reward out of MPAA's ``anti-piracy rewards program.'' The case 
        was amicably resolved in 2002.

        ''AbovePeer, Inc. v. Motion Picture Association of America, et 
        al.,'' filed in 2001 in the United States District Court for 
        the Northern District of New York, as Case No. 01-CV-0806. This 
        action sought a declaration that the Aimster peer-to-peer 
        service did not violate the copyrights of MPAA's member 
        companies or the Digital Millennium Copyright Act. The action 
        was consolidated for pre-trial proceedings with other 
        litigation involving the Aimster service as ``In re Aimster 
        Copyright Litigation,'' in the United States District Court for 
        the Northern District of Illinois, Eastern Division, as Case 
        No. 01C 8933. On October 30, 2002, that court issued a 
        preliminary injunction, effectively shutting down the Aimster 
        service; that injunction was affirmed by the Seventh Circuit 
        Court of Appeals on June 30, 2003.

        ``Michael J. Rossi, dba Internet Movies.Com v. Motion Picture 
        Association of America, et al.,'' filed in 2002 in the United 
        States District Court for the District of Hawaii as Civil No. 
        02-00239 BMK. This action seeks damages in connection with 
        letters sent by MPAA to plaintiff's Internet Service Provider 
        pursuant to the Digital Millennium Copyright Act. On April 29, 
        2003, the Court granted summary judgment in favor of MPAA, 
        dismissing plaintiff's complaint. Plaintiff has filed an appeal 
        to the Ninth Circuit Court of Appeals. The case number in the 
        Ninth Circuit is 03-16034.

        ``Encino Spectrum LLC v. Motion Picture Association of America, 
        Inc.,'' filed in 2003 in the Superior Court of the State of 
        California for the County of Los Angeles, Northwest District, 
        as Case No. LC 065604. This action sought damages for breach of 
        contract in connection with calculation of the parking rent due 
        under the lease by MPAA of its principal offices in Los 
        Angeles. MPAA filed a counterclaim for declaratory relief and 
        breach of contract. MPAA anticipates that the parties will 
        complete an amicable resolution of the case later this month.

        ``Antidote International Films, Inc. et al., v. Motion Picture 
        Association of America,'' filed in 2003 in the United States 
        District Court for the Southern District of New York as Case 
        No. 1:03-cv-09373-MBM. This action alleged that a policy 
        announced by the MPAA with respect to the sending of awards 
        screeners was an unlawful restraint of trade. On December 3, 
        2003, the Court issued a preliminary injunction against the 
        enforcement of that policy by MPAA. The parties have reached an 
        amicable settlement of this action.

        ``Motion Picture Association of America v. FCC 309 F.3rd 796'' 
        (D.C. Cir. 2002), in which the U.S. Court of Appeals for the 
        District of Columbia vacated video description rules imposed on 
        networks by the FCC. The original rulemaking took place prior 
        to the time I arrived at the MPAA but the Petition for 
        Reconsideration at the FCC was not decided until 2001. See MM 
        Docket No. 99-339.

    The MPAA also is a party in interest in two pending FCC matters: 
(1) the so-called ``Plug & Play'' proceeding, which involves 
compatibility between cable systems and consumer electronics equipment 
(PP Docket No. 00-67) and (2) the so-called ``Broadcast Flag'' 
proceeding, which involves digital broadcast copy protection (MB Docket 
No. 02-230). In addition, the Association was a respondent in a 
``counterveiling duties'' proceeding at the U.S. International Trade 
Commission and the Commerce Department (C-122-842) (2001). Petitioners 
argued that the Canadian Government illegally subsidized film 
production in Canada; the petition was eventually withdrawn. Finally, 
the MPAA represents copyright holders before the Copyright Office--as 
well as in any related appeals--and is involved in the FTC's periodic 
reviews of the entertainment industry's marketing practices but the 
Association is not a party in interest in either of these matters.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.
    I have no additional information to add.
                     e. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? Yes.
    4. 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. Please describe how your previous professional experience and 
education qualifies you for the position for which you have been 
nominated.
    During my years in the Senate I worked on a variety of antitrust 
and consumer protection issues, including reviewing the state of 
telecommunications and airline competition, assessing major mergers and 
acquisitions, oversight of the antitrust agencies, and ensuring that 
the video game industry rated its games (so that parents would know 
what they were purchasing for their children). These public policy 
matters all relate to the work of the FTC. My years in the Senate also 
taught me the value of bipartisanship and developing consensus, which 
should be especially useful at an agency where Commissioners are 
appointed from both parties. My work at the MPAA has given me insight 
into the importance of the private sector as an engine of economic 
growth. In addition, I have degrees in history and law, both of which 
should serve as useful tools in considering the complex matters before 
the Commission.
    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?
    None, though I am looking forward to working with the experts at 
the Commission to get up to speed on a variety of matters.
    3. Why do you wish to serve in the position for which you have been 
nominated?
    I have a long-standing commitment to public service, and I believe 
I can make a contribution to the Agency's twin missions of protecting 
competition and promoting accurate information in the marketplace.
    4. What goals have you established for your first two years in this 
position, if confirmed?
    My goals are to become intimately informed about all the issues 
before the Commission as quickly as possible and to serve to the best 
of my ability.
    5. Who are the stakeholders in the work of this agency?
    There are many who have a ``stake'' in the FTC, including 
businesses, producers of goods and services and, ultimately, the 
American consumer.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question number ten.
    A Commissioner should be an objective, ethical and informed 
decision-maker on matters before the Commission. That means listening 
to all sides and seeking out agency experts for guidance.
    7. Please describe your philosophy of supervisor/employee 
relationships.
    Generally, what supervisory model do you follow? Have any employee 
complaints been brought against you?
    I do not subscribe to a particular supervisory model but I do 
believe in a few basic principles. For example, I tend to delegate 
authority; encourage vigorous internal debate on specific matters; and 
treat all colleagues and subordinates with respect. No employee 
complaint has ever been 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.
    My professional experience, both on the Hill and off of it, has 
generally involved working with the Commerce and Judiciary Committees, 
its members and their staffs, especially in the Senate. I spent more 
than twelve years on the Senate Judiciary Committee, working first for 
the late Paul Simon and then for Herb Kohl. Since leaving the Hill, 
much of my time has been spent working on a bipartisan basis with the 
Commerce and Judiciary Committees. I believe my relationships with 
Members of Congress and their staffs are good.
    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.
    I am a strong believer in Congressional oversight and making 
certain that agencies follow Congressional intent. I will be available 
to the Committee or its staff should you have any questions or 
concerns. I also intend to work with the Chairman and the FTC's 
Director of Legislative affairs to ensure an open and cooperative 
relationship with the Committee.
    10. In the areas under the board/commission jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views.
    I believe the Congress has done a very good job of helping set 
priorities for the Federal Trade Commission. For example, in his 1999 
confirmation hearing before your committee, Commissioner Leary noted 
that one of the most pressing legislative needs was to raise the 
thresholds for pre-merger filings under the Hart-Scott-Rodino law, 
which had not been indexed for inflation since its enactment more than 
twenty years before. Congress then wrote legislation effectuating that 
much-needed change the following year. When a Federal district court 
judge threw out the ``do not call'' registry that protects consumers 
from unwanted phone solicitations on the specious grounds that the FTC 
overstepped its authority, this Committee quickly acted to ensure the 
Commission has the authority it needed. (The First Amendment challenges 
to the registry, while raising more serious issues, seem unlikely to be 
sustained and, hopefully, should not require more Congressional 
involvement.) More recently, Congress enacted useful anti-spam 
legislation.
    Given that I have just been nominated, I have only a few 
recommendations. (If I am fortunate enough to be confirmed, I 
anticipate eventually having more such suggestions.) First, combating 
cross-border fraud is critically important, especially in a global 
economy. Congress ought to enact the FTC Reauthorization, a largely 
non-controversial measure that would enhance the Commission's ability 
to reduce international consumer fraud. (The Reauthorization is out of 
the Committee but has not yet been taken up by the full Senate.) 
Second, the quality of an agency's work can occasionally be strained by 
the quantity of demands placed upon it. Today, the FTC's obligations 
are growing, which is entirely appropriate; after all, no Federal 
agency is better prepared to address matters relating to Internet 
fraud, Internet privacy, identity theft, deceptive trade practices that 
transcend national borders, etc. Having said that, however, this 
Committee needs to remain ever vigilant to ensure that, in the 
future,demands placed on the FTC do not overwhelm its ability to 
fulfill its twin missions of promoting competition and protecting 
consumers.
    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.
    Nominees to independent agencies are selected, I believe, to 
exercise their independent judgment. That is especially true with 
respect to agencies like the FTC, which have regulatory and enforcement 
powers. Having said that, Commissioners are not supposed to function in 
isolation, especially on broad policy questions. I would always give 
respectful consideration to the views of the Executive Branch, just as 
I would to the views of people in the Legislative Branch of government.

    The Chairman. Mr. Sosa?

  STATEMENT OF ENRIQUE SOSA, NOMINATED TO BE A MEMBER, AMTRAK 
                          REFORM BOARD

    Dr. Sosa. Mr. Chairman, I have no formal statement to 
present. I just want to say that I'm delighted to be here, and 
I look forward to answering your questions.
    [The biographical information of Dr. Sosa follows:]

                      a. biographical information
    1. Name: (Include any former names or nicknames used.) Enrique Jose 
Sosa.
    2. Position to which nominated: Amtrak Reform Board.
    3. Date of nomination: February 6, 2004.
    4. Address: (List current place of residence and office addresses.)

        Residence and Office: 430 Grand Bay Drive, #1002, Key Biscayne, 
        Florida 33149.

    5. Date and place of birth: March 17, 1940; Camaguey, Cuba.
    6. Marital status: (Include maiden name of wife or husband's name.)

        Married to Irene Maria Tremols.

    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.)

        Maria Luisa Villegas (42), Sylvia Cofer (40), Lourdes Sosa 
        (39), Beatriz Douma (38), Irene Callam (34).

    8. Education: (List secondary and higher education institutions, 
dates attended, degree received, and date degree granted.)

        University of Florida from 1957 to 1964. Obtained a B.S., M.S. 
        and Ph.D. all in Agriculture in 1960, 1961 and 1964, 
        respectively.

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

        Retired--April 1, 1999 to present.

        President, BP Amoco Chemicals (Chicago, Illinois)--1995-1999.

        President, Dow Chemical North America (Midland, Michigan)--
        1993-1995.

        Senior Vice President, Dow Chemical Co. (Midland, MI)--1990-
        1993.

        Vice President Dow Chemical USA, Chemical and Performance 
        Product Group (Midland, MI)--1986-1990.

        President, Dow Chemical Brazil (Sao Paulo, Brazil)--1982-1986.

        Director of Marketing for Plastics, Dow Chemical, USA (Midland, 
        MI) 1981-1982.

        Business Manager for Plastics, Dow Chemical USA (Midland, MI) 
        1979-1980.

        General Manager, Dow Mexico (Mexico City, Mexico)--1977-1979.

        General Manager, Dow Venezuela (Caracas, Venezuela)--1974-1977.

        Marketing and Business Manager for Agricultural Products, Dow 
        Chemical Latin America (Miami, Florida)--1971-1974.

        District Manager, Dow Chemical Colombia (Bogota, Colombia)--
        1970-1971.

        Various positions in Agricultural Business of Dow Chemical 
        International (Midland, MI)--1964-1966; (Miami, Florida)--1966-
        1970.

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.) None.
    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational, or other institution.)

        Director--Dow Chemical Company--1990 to 1995.

        Director--Dow Corning Corporation--1992 to 1994.

        Director--EDS--1995 to 1999.

        Director--FMC--1999 to present.

        Director--Royal DSM of the Netherlands--2000 to present.

    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
other organizations.)
    I was on The Board of the National Manufacturers Association, The 
Chemical Council, The Plastic Council, Chairman of the United Way 
Campaign of Midland Michigan and President of The American Chamber of 
Commerce in Sao Paulo, Brazil.
    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.
    I contributed $45,000 (along with my wife) to the Republican Party 
and to George W. Bush for President. I contributed $1,000 for the 
campaign of Tom Gallagher in the State of Florida. I contributed, this 
year, $1,000 for the Bush Cheney reelection. I contributed $1,000 for 
the Alex Penelas campaign for the U.S. Senate in the State of Florida. 
I contributed $200 for the election of Congresswoman Ileana Ros 
Leithan. There were some other minor contributions in the 90s the 
specifics of which I cannot remember but I believe them to total less 
than $5,000 in the aggregate.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals, and 
any other special recognitions for outstanding service or 
achievements.) None.
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated. None.
    17. Selection:
    (a) Do you know why you were selected for the position to which you 
have been nominated by the President?
    I believe I was selected for this position because of my background 
occupying senior management positions in corporations that went through 
difficult times.
    (b) What in your background or employment experience do you believe 
affirmatively qualifies you for this particular appointment?
    See answer to 17(a), above.
                   b. future employment relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations, or business organizations if you 
are confirmed by the Senate?
    I will not sever my ongoing business activities, which are 
currently limited to being a Director of FMC Corporation and Royal DSM.
    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. None.
    3. Do you have any plans, commitments, or agreements after 
completing government service to resume employment, affiliation, or 
practice with your previous employers, business firms, associations, or 
organizations? None.
    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?
    I expect to serve out my full term or until the next Presidential 
election, whichever is. applicable.
                   c. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers.
    I receive retirement benefits from the Dow Chemical Company and BP. 
I have some unexercised stock options from BP and EDS. I have deferred 
compensation from FMC. I realize director's fees from Royal DSM and 
FMC.
    2. Indicate any investments, obligations, liabilities, or other 
relationships, which could involve potential conflicts of interest in 
the position to which you have been nominated. None.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    I have not engaged in any business activities over the past 10 
years that could result in a conflict of interest situation.
    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 not engaged in any activity over the past 10 years that 
would affect legislation or would affect the administration or 
execution of law or public policy.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    I do not believe I have any conflict of interest as it pertains to 
the position for which I am being considered. If a conflict of interest 
situation was to be identified I would expeditiously remove myself from 
that situation by either divesting my financial interest or placing 
said financial interest in a blind trust. Alternatively, as 
appropriate, I would remove myself from any consideration or decision 
involving any entity or matter in which there was an actual or apparent 
conflict of interest.
                            d. legal matters
    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain. 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 for a minor traffic offense? If so, please explain.
    In 1959 I was found guilty of a misdemeanor charge (petit larceny) 
while attending the University of Florida in Gainesville, Florida. I 
was given a three day suspended sentence. In 1974 I was found guilty of 
DUI (alcohol) in Miami, Florida and was fined $150 as well as having my 
drivers license suspended for 6 months.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain.
    The Corporations for which I have worked or served as a Director 
during my career (see answers to A.9 and A.11., above) are large multi-
national corporations, which, in the normal course of business, are 
parties to many administrative hearings and civil litigation. I have 
never been a named party to any administrative hearing or civil 
litigation in my capacity as an Officer or Director of one of these 
Corporations, or as an individual.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense?
    See answer to D.2., above.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination.
    I know of no additional information which I feel should be 
disclosed.
    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.
                     e. relationship with committee
    1. Will you ensure that your board/commission complies with 
deadlines for information set by congressional committees? Yes.
    2. Will you ensure that your board/commission 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, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                  f. general qualifications and views
    1. How do your previous professional experiences and education 
qualify you for the position for which you have been nominated?
    In my previous experiences I have worked in very large 
organizations and have been exposed to the difficulties of dealing with 
business cycles, restructuring, competition, and labor unions. I have 
been on the Boards of Directors of 5 publicly traded companies and in 
one of them (The Dow Chemical Company) I was also a member of the 
Executive Committee. In my last job at Dow Chemical I supervised 20,000 
employees and while at BP (then Amoco) I supervised in excess of 8,000 
employees. My vast corporate experience should be helpful in advising a 
large and complex enterprise such as Amtrak which is undergoing severe 
losses and seems to be in need of an update of its strategy and modus 
operandi.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    I wish to serve on the Board of Amtrak because I consider it to be 
a challenge and because I have been asked by the current Administration 
to help. I wish to be helpful in this small way to my Country, which 
has been generous to me and my family.
    3. What goals have you established for your first two years in this 
position, if confirmed?
    My immediate goal, if confirmed, would be to develop an 
understanding of Amtrak's lines of business and how well they perform 
so that I could participate with the other members of the Board in 
providing strategic direction for the company.
    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 do not have experience in the area of land transportation. My 
initial plans are to take the time to learn and understand as much as 
possible in the shortest period of time about the railroad business and 
about Amtrak.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when society's problems 
should be left to the private sector, and what standards should be used 
to determine when a government program is no longer necessary.
    I believe that there is a role for the government to play in our 
private lives. I would hope that the role is limited since at the end 
of the day I firmly believe that self-initiative should be the call and 
an individual and his or her family should not be depending on the 
government to provide for themselves. It is up to individuals to be 
productive in our society. I believe the government needs to make sure 
its citizens live by the law. Obviously there are certain aspects of 
the infrastructure that can only be provided by the government such as 
highways, ports, water, etc. I believe very strongly in individual 
freedom, free market and capitalism.
    6. Describe the current mission, major programs, and major 
operational objectives of the board/commission to which you have been 
nominated.
    I do not as of yet have sufficient understanding of what the Board 
will be focusing on and what the priorities are. But as a general 
observation based upon my prior service on other boards, I would expect 
this board to be focused on the integrity of the company's financial 
statements, the development of a business plan and oversight of the 
company management's implementation of that plan.
    7. What do you believe to be the top three challenges facing the 
board/commission and why?
    Again I do not have sufficient understanding of Amtrak to be able 
to identify what the three top challenges are. But I understand that 
Amtrak is supposed to be run like a business and the three key 
challenges facing every business are increasing revenue, controlling 
expenses and providing high quality service.
    8. In reference to question number six, what factors in your 
opinion have kept the board/commission from achieving its missions over 
the past several years?
    I do not have sufficient understanding today of the challenges 
facing the past Amtrak boards to provide a knowledgeable response to 
this question. I hope to learn much more about this if I am confirmed. 
However, from what I have read in the media, Amtrak is incurring heavy 
capital and operational losses that are borne by the Federal 
Government. This Federal funding is the subject of public debate that 
creates uncertainty for the company and such uncertainty always makes 
accomplishing a specific mission more difficult.
    9. Who are the stakeholders in the work of this board/commission?
    The American Public and the legislative and executive branches of 
the U.S. Government.
    10. What is the proper relationship between the position to which 
you have been nominated, and the stakeholders identified in question 
number nine?
    The relationship between the Board and the stakeholders should be 
one where communications are very clear, where accountability is well 
established and where goals and objectives are well defined and where 
results should be pursued as agreed upon and are monitored.
    11. 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 very firmly in making sure that individuals are assigned 
tasks, which match their capabilities. I believe that once these 
individuals are given the opportunity to perform that they should be 
given ample freedom and support to succeed. I do not believe in 
abdicating my accountability solely to the individual but I believe 
that selecting the right individual for a job and motivating and 
supporting them should go a long way towards achieving successful 
results.
    12. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please explain.
    I do not have any experience working with Congress.
    13. In the areas under the board/commission jurisdiction to which 
you have been nominated, what legislative action(s) should Congress 
consider as priorities? Please state your personal views.
    The fact that Amtrak has a board of directors appointed by the 
President demonstrates that the Federal Government has a strong 
interest in this company. I think that Congress needs to be clear about 
the intended mission for the company and the resources that it will 
make available to accomplish that mission.
    14. 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.
    I believe that as a member of the Board of Amtrak I will be 
recommending and supporting actions that I see as sound whether I am in 
agreement with the President or not. I believe that is the only way to 
conduct my duties.

    The Chairman. Thank you very much.
    Mr. Walker?

                 STATEMENT OF SCOTT K. WALKER,

            NOMINEE TO BE A MEMBER, ADVISORY BOARD,

         SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

    Mr. Walker. Chairman McCain, distinguished Members of this 
Committee, thank you for the opportunity to appear before you 
today and to consider my nomination to serve on the Saint 
Lawrence Seaway Development Corporation.
    It's an honor to be here and a privilege to be selected for 
this position by President Bush.
    Mr. Chairman, if confirmed, I look forward to working with 
this Committee on the many important issues regarding commerce, 
transportation, and security facing the SLSDC Advisory Board 
and the Congress.
    I would particularly like to express my appreciation for 
the support I got for this position from our two Members of 
this distinguished body: Senator Herb Kohl and Senator Russ 
Feingold--I particularly want to thank Senator Kohl for his 
kind comments, as well as tell you that I'm proud to call him a 
constituent, as well--as well as express my appreciation for 
the support I have for this position from my Member of 
Congress, Chairman Sensenbrenner, and from the other two 
Members of Congress from Milwaukee County, Jerry Kleczka and 
Paul Ryan.
    And, Mr. Chairman, I will not tell you how old I was in 
1982, but just as an aside, that your comments at the American 
Legion Boys Nation Program in the mid-1980s were one of the 
things that inspired me to public service.
    [Laughter.]
    Mr. Walker. How is that for diplomacy?
    I have an excellent working relationship with the entire 
Wisconsin Congressional delegation, and I appreciate their 
support. I'm the elected County Executive for Milwaukee County 
in Wisconsin. Our county government has an annual operating 
budget of $1.1 billion and nearly 7,000 employed positions. Our 
county is made up of 19 municipalities, including the City of 
Milwaukee, with a combined population of 937,000 people on the 
western shores of Lake Michigan. I hope to draw on this 
executive management experience as well as my energy and 
enthusiasm for this position in carrying out my duties as an 
Advisory Board member.
    The work of the SLSDC is critically important to the 
progress of commerce and transportation in the Great Lakes 
region and, in turn, throughout the country. This is an 
excellent opportunity to work with our administrator and the 
members of the Advisory Board. And, if confirmed, I look 
forward to working with you, Mr. Chairman and the Members of 
this panel, on transportation and commerce, and to help that 
work well in the area covered by the SLSDC.
    Thank you for the opportunity to appear, and I look forward 
to your questions.
    [The prepared statement and biographical information of Mr. 
Walker follow:]

Prepared Statement of Scott K. Walker, Nominee to be a Member, Advisory 
          Board, Saint Lawrence Seaway Development Corporation
    Chairman McCain, Senator Hollings and members of the Committee, 
thank you for the opportunity to appear before you today to consider my 
nomination to serve on the Saint Lawrence Seaway Development 
Corporation (SLSDC). It is an honor to be here and a privilege to be 
selected by President Bush for this position. Mr. Chairman, if 
confirmed, I look forward to working with this Committee on the many 
important issues regarding commerce, transportation and security facing 
the SLSDC Advisory Board and the Congress.
    I also would like to express my appreciation for the support I have 
for this position from my Congressman, Chairman Jim Sensenbrenner as 
well as Congressmen Paul Ryan and Jerry Kleczka. Two members of your 
distinguished body--Senator Herb Kohl and Senator Russ Feingold have 
also been a great support to me. I have an excellent working 
relationship with the entire Wisconsin Congressional delegation and I 
appreciate their support as well.
    I am the elected County Executive for Milwaukee County, Wisconsin. 
Our county government has an annual operating budget of $1.1 billion 
and nearly 7,000 employee positions. Our county is made up of 19 
municipalities--including the City of Milwaukee--with a combined 
population of 937,000 people and we rest on the western shores of Lake 
Michigan. I would hope to draw on this executive management experience, 
as well as my energy and enthusiasm for the position, in carrying out 
my duties as an Advisory Board Member.
    The work of the SLSDC is critically important to the progress of 
commerce and transportation in the Great Lakes region and--in turn--
throughout the country. This is an excellent opportunity to work with 
Administrator Jacquez and the other members of the SLSDC Advisory 
Board.
    If confirmed, I look forward to working with you, Mr. Chairman, and 
members of the Committee to make transportation and commerce work well 
in the area covered by the SLSDC. Again, thank you for the opportunity 
to appear, and I look forward to answering any of your questions.
                                 ______
                                 
                      a. biographical information
    1. Name: (Include any former names or nicknames used.) Scott Kevin 
Walker.
    2. Position to which nominated: Member of the Advisory Board of the 
Saint Lawrence Seaway Development Corporation.
    3. Date of nomination: November 23, 2003.
    4. Address: (List current place of residence and office a dresses.)

        Residence: Information not released to the public.
        Office: Office of the County Executive, 901 N. 9th Street, 
        Milwaukee, WI 53233 USA.

    5. Date and place of birth: November 2, 1967; Colorado Springs, CO.
    6. Marital status: (Include maiden name of wife or husband's 
name.):

        Tonette Marie Tarantino Walker.

    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.):

        Matthew David Walker (9) and Alexander Nicholas Walker (8).

    8. Education:(List secondary and higher education institutions, 
dates attended, degree received, and date degree granted.):

        Marquette University 1986 to 1990; no degree.

    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.):

        IBM Corporation, Inc.--Milwaukee Metro Office; Account 
        Administrator from 1988 to 1990.

        American Red Cross--Greater Milwaukee Chapter; Financial 
        Development Specialist from 1990 to 1994.

        Wisconsin State Assembly--State Representative; elected from 
        1993 to 2002.

        Milwaukee County Executive; elected April 30, 2002, re-elected 
        April 6, 2004.

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.):

        Sesquintenial Commission--State of Wisconsin 1992.

    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational, or other institution.):

        Board of Directors, Foundation for Heart Science, Wauwatosa, 
        WI.

    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
other organizations.):

        National Association of Counties

        American Legislative Exchange Council

        Underwood Memorial Baptist Church in Wauwatosa

        Boy Scouts of America Milwaukee County Council

        Wauwatosa Historical Society

        NAACP--Milwaukee Chapter

        United Way of Greater Milwaukee--Campaign Cabinet

    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.
    Wisconsin State Representative--ran and was elected as a 
Republican.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years.
    Republican Party of Wisconsin (chair of the 5th Congressional 
District; member of the state executive committee; member, Wauwatosa 
Republican Club; member, Milwaukee County Republican Party)
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years: None.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals, and 
any other special recognitions for outstanding service or 
achievements.):

        Honorary member, Sons of Italy.

        Honorary member of Board of Directors, Milwaukee Symphony 
        Orchestra.

        Past Presidents Award from West Suburban Chamber of Commerce.

        Lawmaker of the Year--State Medical Society.

        Lawmaker of the Year--Wisconsin Professional Fire Fighters 
        Association.

        Lawmaker of the Year--Wisconsin Public Health Association.

    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written). None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated: None on this direct topic.
    17. Selection:
    (a) Do you know why you were selected for the position to which you 
have been nominated by the President?
    Wisconsin borders Lake Michigan and trade and commerce through the 
Great Lakes are important parts of the economy.
    (b) What in your background or employment experience do you believe 
affirmatively qualifies you for this particular appointment?
    Chief Executive Officer/Chief Elected Official of the largest 
county in Wisconsin.
                   b. future employment relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations, or business organizations if you 
are confirmed by the Senate?
    I have no employment aside from holding the office of Milwaukee 
County Executive (elected office).
    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 employers, business firms, associations, or 
organizations? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.
                   c. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers.
    I am a participant in the Milwaukee County Deferred Compensation 
Plan. The balance as of March 31, 2004 is $2,826.73. All future 
contributions will be directed as follows (per the plan): 55 percent T. 
Rowe Price Personal Strategy Balanced; 25 percent American Funds Wash 
Mutual Invs.; 10 percent Heartland Value Fund; 10 percent T. Rowe Price 
International Stock Fund.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. None.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated. None.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy.
    As the elected County Executive of the largest county in the State 
of Wisconsin, I occasionally comment on legislation proposed at the 
state and Federal level-primarily dealing with funding for county 
operated programs. Prior to taking office on May 9, 2002, I served as a 
member of the Wisconsin State Assembly from the date of my election on 
June 29, 1993 to the day I resigned on May 9, 2002. During that time, I 
introduced, debated and discussed legislation on a variety of topics, 
e.g., labor contracts and healthcare, and, while serving in the 
Wisconsin Legislature my principle assignment committees were as 
follows: I chaired the Committee on Corrections and the Courts and the 
Assembly Committee on Campaigns and Elections; I also served on the 
Assembly Committee on Health, the Assembly Housing Committee, Financial 
Institutions, Judiciary and Personal Privacy Committee.
    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.)
    Just as I did when serving as a member of the State Legislature, I 
realize that there may be times when the larger interests of the United 
States and this advisory board will make my decision based on the 
larger good for the country. Reviewing the work of this advisory board, 
however, do not believe that this would be a common occurrence (if at 
all).
    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 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain. 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 for a minor traffic offense? If so, please explain. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain.
    Yes, I was as the former Chairman of the state Assembly Committee 
on Corrections and the Courts, I was occasionally listed (along with 
other state officials) in lawsuits brought by inmates against the 
state.
    As the top elected officer in the county, I am occasionally listed 
in suits brought by individuals or groups against the county. None of 
these legal matters relate to my personal actions, but are related to 
my role as an elected official with that level of government.
    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 disclosed in 
connection with your nomination.
    My current office is nonpartisan. While I am clearly a Republican, 
I work well with elected officials from both major parties--including 
Senators Kohl and Feingold and the members of the Wisconsin 
Congressional Delegation. I know and contacted former Governor Tony 
Earl--whom I replace on this panel and would, if confirmed, work well 
with the other members. I also contacted the members of the Port of 
Milwaukee authority because of their positive relationship with the 
board and interest in the seaway.
                     e. relationship with committee
    1. Will you ensure that your board/commission complies with 
deadlines for information set by congressional committees? Yes.
    2. Will you ensure that your board/commission 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, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                  f. general qualifications and views
    1. How does your previous professional experiences and education 
qualify you for the position for which you have been nominated?
    Current role as the CEO of the largest county in the State of 
Wisconsin.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    It would be an honor to serve the President of the United States.
    3. What goals have you established for your first two years in this 
position, if confirmed?
    Working with other members to increase commerce opportunities for 
the United States, compliance with all federal, state and local 
requirements and continued dedication of protection of the natural 
resources available through the Great Lakes.
    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 do not have a direct occupational background in the areas of 
commerce and conservation on the Great Lakes. I am working with former 
Governor Earl--as well as organizations and individuals throughout 
Wisconsin to obtain insight from those with direct occupational 
experience.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when society's problems 
should be left to the private sector, and what standards should be used 
to determine when a government program is no longer necessary.
    I believe that government should play a limited role in the lives 
of individuals, but that this involvement should be determined by the 
legislative and executive branches. Individual commissions, boards and 
authorities within the government should administer this pre-
established policy.
    6. Describe the current mission, major programs, and major 
operational objectives of the board/commission to which you have been 
nominated.
    The SLSDC is responsible for the operations and maintenance of the 
U.S. portion of the St. Lawrence Seaway between Montreal and Lake Erie. 
This responsibility includes maintaining and operating the two U.S. 
Seaway locks in Massena, N.Y., and vessel traffic control in the areas 
of the St. Lawrence River and Lake Ontario. In addition, the SLSDC 
performs trade development functions designed to enhance Great Lakes 
St. Lawrence Seaway System utilization.
    The SLSDC coordinates its activities with its Canadian counterpart, 
the St. Lawrence Seaway Management Corporation (SLSMC), particularly 
with respect to rules and regulations, overall day-to-day operations, 
traffic management, navigation aids, safety, environmental programs, 
operating dates, and trade development programs. The unique binational 
nature of the Seaway System requires 24-hour, year-round coordination 
between the two Seaway entities.
    7. What do you believe to be the top three challenges facing the 
board/commission and why?
    Reliability, safety and security are the top three challenges. 
Continuing to meet these challenges will allow the people of the United 
States and Canada who rely on the ports throughout the system to 
prosper. If the system is reliable, safe and secure, commerce will 
grow.
    8. In reference to question number six, what factors in your 
opinion have kept the board/commission from achieving its missions over 
the past several years?
    It seems that the SLSDC has met the objectives that I stated in 
question number six over the past few years.
    9. Who are the stakeholders in the work of this board/commission?
    The biggest stakeholders are the people of the United States and 
Canada. More specifically, the communities that run ports, the 
companies that rely on goods received through those ports and the 
companies that provide goods to other parts of the world through those 
ports. In addition, there are a great many individuals whose employment 
is connected to the operations of the ports and of the seaway system. 
The owners and operators of the more than 2,000 commercial vessels are 
clearly stakeholders in the system.
    10. What is the proper relationship between the position to which 
you have been nominated, and the stakeholders identified in question 
number nine?
    This position requires a balance of interests between the 
stakeholders and between various states and--ultimately--the United 
States and Canada. Any actions taken should also be consistent with the 
policy of the United States on overall transportation and commerce 
policy.
    11. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    No, not against me personally, but complaints are routinely brought 
against Milwaukee County.
    12. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please explain.
    Yes, I work closely with all of the members of the Wisconsin 
delegation. Two of the current members served directly with me in the 
Wisconsin State Legislature.
    13. In the areas under the board/commission jurisdiction to which 
you have been nominated, what legislative action(s) should Congress 
consider as priorities? Please state your personal views.
    Maintenance of support for the safety, security and reliability of 
the system.
    14. 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.
    There must be a careful balance between the fact that these 
appointments are driven by the Executive Branch and there should be 
proper deference given to the policies of the current administration 
and the fact that members of an independent board are selected because 
of experience and talents specific to the workings of the board and 
they must use those skills to make appropriate decisions for the board.

    The Chairman. Thank you very much, Mr. Walker. I regret I 
mentioned the year 1982.
    [Laughter.]
    The Chairman. I congratulate all the nominees.
    Mr. Palmer, last year I wrote the Secretary of Commerce 
requesting the Department's view on the Commerce Justice State 
Appropriations bill. The Department of Commerce responded in an 
initial letter, saying, ``We'll work out the issue.'' I wrote a 
second letter. I never got an answer. I want an answer, Mr. 
Palmer, before your nomination moves forward. Got it?
    Mr. Palmer. I will get you an answer, sir.
    [The information referred to follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Mr. Wu, let me read to you a statement. 
``Greenhouse gases are accumulating in Earth's atmosphere as a 
result of human activities, causing surface air temperatures 
and subsurface ocean temperatures to rise. Temperatures are, in 
fact, rising. The changes observed over the last several 
decades are likely mostly due, ``likely mostly due,'' to human 
activities, but we cannot rule out that some significant part 
of these changes are also a reflection of natural 
variability.''
    Before I ask you to comment on that, that's from the 
National Academy of Sciences. Do you agree or disagree with 
that statement?
    Mr. Wu. Well, I certainly think that----
    The Chairman. I would ask if you agree or disagree with 
that statement, and then elaborate.
    Mr. Wu. Well, I think that the Academy of Sciences brings 
out good points, and----
    The Chairman. I would ask if you agree or disagree with 
that statement, and then elaborate.
    Mr. Wu. I would generally agree with that statement.
    The Chairman. Thank you. And please proceed.
    Mr. Wu. And I know that the climate-change issue is one 
that certainly is a major concern, for not just you, but for a 
number of the members of the Administration and also for 
lawmakers and policymakers. And while NOAA, in our Department, 
has been engaged in a number of the research activities related 
to climate change, we can develop new technologies that will 
also work to enhance and protect our environment, and we'd be 
happy to work with you and your staffs to further that.
    The Chairman. Well, I deeply regret the Administration and 
the Department of Commerce has strongly opposed a very modest 
piece of legislation that Senator Lieberman and I view as a 
first step in the reduction of greenhouse gases. We're doing 
terrible things to future generations of Americans, this 
Administration is, by failing to support even a modest proposal 
which is based on market economics. We'll give the 
Administration another opportunity to weigh in on that issue, 
because we're going to vote on it, and we're going to keep 
voting on it until the overwhelming majority of the American 
people's voice is heard, and that is, we've got to act, and act 
now, to reduce the effects--overwhelming effects of greenhouse 
gases, which, in the view of the National Academy of Sciences, 
is of the utmost serious consequence.
    Ms. Majoras, 2 years ago you were involved in negotiating 
an FTC/DOJ agreement that would have required the FTC to give 
the DOJ exclusive authority to review media, 
telecommunications, and entertainment industry mergers 
without--with very little consultation with this Committee, by 
the way. Why do you believe that this agreement was needed at 
the time?
    Ms. Majoras. Thank you, Mr. Chairman.
    At the time, we believed that the agreement was needed 
because the two agencies, which, as you know, share 
jurisdiction for enforcement of the antitrust laws, had gotten 
quite bogged down. And, indeed, there was one matter that was 
in need of investigation, and both agencies agreed on that, and 
yet they had allowed the matter to sit for 16 months, not being 
investigated by either agency, because they were arguing over 
which one was entitled to do it. So that was why, at the time, 
Chairman McCain, we thought that a change was a good idea.
    There's no question that we should have handled it 
differently. We did not handle it well. And I regret that that 
was the case.
    I would also add that, were I to be confirmed, Senator, I 
have no intention of resurrecting that clearance agreement, 
which, of course, has also been banned now by legislation.
    The Chairman. At a recent hearing on CAN-SPAM, which I'm 
sure you're aware of, the witnesses testified the volume of 
spam is still rising, accounting for anywhere from 64 to 83 
percent of all e-mail traffic. Do you share the concern that 
consumers are being rapidly driven away from e-mail as a result 
of spam?
    Ms. Majoras. I do share that concern, Chairman McCain. I 
think the Federal Trade Commission----
    The Chairman. What do you think needs to be done?
    Ms. Majoras. I think what needs to be done, now that the 
CAN-SPAM Act has been passed, which is a very good first step, 
in which the Federal Trade Commission----
    The Chairman. Do you think that going after the businesses 
that hire the spammers is a method you might pursue?
    Ms. Majoras. Absolutely. And, indeed, I think the Federal 
Trade Commission is already pursuing that, and that is a method 
that I think should be further pursued.
    The Chairman. What else would you like to say on that?
    Ms. Majoras. What else I'd like to say is, I think that the 
CAN-SPAM Act, Senator, is a very good first step. Part of the 
problem with new methods, such as spamming and the like, is 
that those who engage in it--and much of the spam, of course, 
is deceptive--have all kinds of new methods that the 
enforcement agencies need to learn about. And I think that we 
need to build on the CAN-SPAM Act now, see whether there are 
any more gaps in the FTC's enforcement arsenal, and move 
forward in bringing enforcement actions and in discussing with 
Congress whether any further legislation might be needed.
    The Chairman. Do you have anything to add to that, Mr. 
Leibowitz?
    Mr. Leibowitz. Just a little bit. I generally agree with 
what Debbie said.
    I think the CAN-SPAM bill is very, very important and a 
very useful tool for the Commission. I think your section 6, 
which allows you to, as I understand it, follow the money, is 
something that we should be looking at if we're fortunate 
enough to be confirmed. Debbie and I have talked about it, and 
we will take a hard look at that section.
    But, you know, we're not at the end of this process with 
respect to the spam problem or the CAN-SPAM bill. I think we're 
more at the end of the beginning, at best. Spam is a problem. 
It's going to take a lot of resources at the Commission, and 
it's going to require a lot of work with the Committee, and 
it's going to require, as well, more consumer education and, I 
think, technology. It's not an easy problem to solve.
    The Chairman. Thank you.
    Mr. Walker, congratulations.
    Mr. Sosa, you're going to have a very tough job, because 
one of the most contentious issues that we face here in the 
Congress is what to do about Amtrak. Most of us don't 
understand why we continue to subsidize routes at as much as 
$400 per passenger. But I hope that you also appreciate that 
there are also now security issues associated with Amtrak which 
cannot be separated from reform because there are going to be 
additional expenses and additional procedures that are going to 
have to be enacted.
    This Committee held a hearing after the Madrid bombing. As 
usual, we seem to react, rather than act, and I have placed the 
responsibility on me for that. But I think it's also clear that 
there are significant challenges that we face in rail security 
in this country today, and I hope you'll give that your 
significant priority.
    Dr. Sosa. I will do that, for sure. I wholeheartedly agree 
with what you just said.
    The Chairman. Thank you.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman.
    Ms. Majoras, it is hard for me to reconcile your statement 
that you're going to be the consumer defender and protector, 
while you don't even mention the question of gasoline pricing, 
which is clearly the big consumer issue for our country, and 
certainly for people on the West Coast of the United States. I 
intend to ask you some detailed questions this afternoon about 
oil-company mergers, about refinery closures, and redlining.
    But I think before I begin that I'd like to give you the 
same chance that I gave you in my office--and, as you know, I 
wrote you, as well, on it--and that is to ask you to tell me 
one area you would change, if you were confirmed as the Federal 
Trade Commission chair, that's going to make a difference for 
the consumer on the issue of gasoline pricing.
    Ms. Majoras. Thank you, Senator Wyden, for that 
opportunity. I do appreciate it.
    I think if I were going to choose--there are several areas, 
but if I were going to choose one, I would choose the area of 
refinery capacity. Because refinery capacity in this Nation is 
so tight, I would treat any proposed reduction in that capacity 
with extraordinary seriousness. If I am confirmed, the FTC will 
review the basis for any such reduction, and I will recommend 
enforcement action against any prohibited anti-competitive 
conduct that we find in the reduction of that capacity.
    Senator Wyden. I'll get to refinery capacity in a moment. I 
will tell you, just from the seat of my pants, it's hard to see 
how that's a change from current law or current practice. Maybe 
you want to just have a follow up right now, in terms of your 
statement a minute ago. How does that change current practice 
at the Federal Trade Commission?
    Ms. Majoras. Well, what I've committed to you, Senator, is 
that I would take action if, in fact, we find anti-competitive 
conduct in the----
    Senator Wyden. That's what the Commission says today.
    Ms. Majoras. They have said some of that, but I'm 
committing to you that I will take action. And you have said 
that what concerns you is that the Federal Trade Commission has 
not taken action. It's very difficult, of course, to commit to 
specific enforcement action when I have before me, at this 
moment, no evidence of wrongdoing, Senator.
    Senator Wyden. You just committed to Chairman McCain 
specific action on spam. You said you'd go after businesses. 
And that's what I'm going to insist on, in terms of your 
appointment, and I just want to make that clear again, as I did 
in the office.
    Let me ask you about oil-company mergers. Last week, the 
General Accounting Office, after reviewing hundreds of mergers, 
found that, in effect, the Federal Trade Commission's oil 
merger policy was permitting serial price gouging. In effect, 
with each merger, prices would go up. And on the West Coast of 
the United States, they said those mergers led to price 
increases of up to seven cents a gallon.
    Now, when that report was issued, the Federal Trade 
Commission, the existing one, went into its denial mode, as I 
highlighted. There's a very lengthy dissent, and ``General 
Accounting Office doesn't have it right, and they don't 
understand us,'' and all the rest.
    Is that how you feel about this? Do you think the General 
Accounting Office doesn't understand this? And all this 
evidence--it is a huge volume of evidence, Ms. Majoras. I mean, 
the number of areas where their market concentration has almost 
doubled in the last few years. It went up, I think, from 27 
states with highly concentrated markets in 1994; now it's 46 
states. And yet the Federal Trade Commission looks the other 
way on mergers, denies what the General Accounting Office has 
to say. And I want to give you the same chance that I did in 
the office to say how you would change the policy on mergers.
    Ms. Majoras. Thank you, Senator Wyden.
    Senator Wyden, I have reviewed the GAO report. It does 
contain a great deal of information. I'm still reviewing it and 
dissecting it.
    The Federal Trade Commission policy in reviewing mergers 
has stemmed from the policy that it uses when it reviews all 
mergers, but with one difference, and that is that the FTC, as 
I understand it, has reviewed those mergers using even lower 
concentration standards than it does for most industries, given 
the extreme importance of this industry and the many markets 
that must be reviewed.
    If I am confirmed and we are confronted with oil mergers, I 
will absolutely apply the antitrust laws to looking at those 
mergers. We will--I will recommend action against mergers if, 
in fact, we--I believe that they will violate the antitrust 
laws.
    And, in addition, Senator, I intend to take that report, to 
scrub it carefully. Naturally--and I've been an enforcer 
before, as you know, and also in the private sector, very 
accustomed to working with econometric studies--it's very 
important, when one receives such a study, to scrub it down, 
all the way down to the data, to try to replicate, to look at 
all of the assumptions that have been made, because even the 
simplest of assumptions can change the results of the study. So 
I intend to do that, and then take what we learn there, in 
discussion with my colleagues at the FTC, and determine whether 
any changes need to be made in merger policy.
    Senator Wyden. Well, you say in your written testimony, and 
I quote, you're ``protecting competition through enforcement of 
the antitrust laws gives consumers lower prices.'' Now, the 
General Accounting Office just found, in this report, that oil-
industry mergers have raised prices for consumers. So I'm 
curious, is your statement wrong in the case of the oil 
industry, or has the Federal Trade Commission not been 
enforcing the antitrust laws when it allowed oil mergers to go 
through and raise prices?
    Ms. Majoras. No, Senator, I can assure you that my 
statement is not wrong. Having been both an enforcer of the 
antitrust laws and a counselor in the antitrust laws, I do 
believe that the antitrust laws contribute to lower prices for 
consumers. The GAO report found some price increases that 
stemmed from the mergers. As I said, I still need to review 
that report more closely before I could rely on its 
assumptions, rely on its results in determining whether any 
different sort of merger action needed to be taken.
    Senator Wyden. Mr. Chairman, if I might, one last question.
    In 2001, Ms. Majoras, the Federal Trade Commission required 
Texaco to divest its ownership interest in the Bakersfield 
refinery as one of the conditions the agency imposed to 
mitigate anti-competitive impacts. The FTC's September 2001 
press release touted the consent agreement allowing the merger 
to go through as having required significant divestitures 
required to remedy the likely anti-competitive impacts of the 
transaction.
    Having found divestiture of the Bakersfield refinery was 
necessary to mitigate the anti-competitive impacts of the 
merger, now the FTC takes no action to ensure that the 
Bakersfield refinery isn't closed. If the Bakersfield refinery 
is shut down, wouldn't this eliminate any competitive benefit 
from the divestiture that the Federal Trade Commission 
required?
    Ms. Majoras. Thank you, Senator.
    Yes, indeed, it could very well eliminate the benefit of 
the divestiture. I am aware of the Bakersfield situation. I 
think it is a serious one. I do not know, of course, exactly 
what, if anything, the Federal Trade Commission is doing about 
that because I'm not yet privy to that information, but I hope 
that I will have the opportunity to find out and to act 
accordingly, as appropriate.
    Senator Wyden. Mr. Chairman, I would just hope that it 
would be possible to have another round, because I have a 
number of additional questions.
    Thank you.
    The Chairman. Senator Boxer?
    Senator Boxer. Thank you, Mr. Chairman.
    And I just want to say--I want to pick up on Bakersfield. 
And, Ms. Majoras, you and I spoke about that very honestly. And 
I just want to make a point here to my colleagues. We can't 
wait until you get confirmed to take care of the Bakersfield 
problem, Mr. Chairman. We've got an immediate threat that 
Shell's going to shut down a refinery right away. They're 
slowing down, starting this summer. The FTC has to act now. And 
you have no control over that, so let me just speak to my 
colleagues for a minute, because I think it's important.
    I like these people who are here, and I think they're good 
choices. But the FTC is--and I discussed this with Senator 
Wyden, who I thought put it in the best way, they're just sort 
of slow-walking this stuff, giving us a letter here, a letter 
there. We've been on this Bakersfield refinery--and I have to 
give full credit to Senator Wyden for calling it to my 
attention; then I had whistleblowers in California that talked 
to me--they're producing 2 percent of our fuel. We can't afford 
that jolt, Mr. Chairman, when we see $3 per gallon numbers out 
in California now and then--certainly well over $2.50 a gallon. 
It's hurting people who have to rely on a car to get to work. 
These are the people that are hurting.
    And so I just want to say, maybe this can go out to the FTC 
Chairman now, who sent me wonderful letters on this; very 
encouraging letters, I have to say. I'm encouraged. He says he 
takes what we say very seriously. He's looking at it really 
seriously.
    Well, enough with the looking. Let's get some action. 
Because, as Senator Wyden said, this refinery was so important 
to the FTC just a couple of years ago that they said, ``Texaco 
divested. Shell you buy it.'' And now, 2 years later, they're 
walking away, and they're going to shut it down. They day they 
leave, they're shutting it--they're dismantling it.
    Now, we cannot wait. And I don't want your nominations to 
be caught in this bind. But I have to say, to be honest, I may 
have to do some serious thinking before I add more people to 
this Commission if the FTC won't act in an appropriate fashion. 
It's the same way with the investigation on high gas prices. 
Got a beautiful letter from Chairman Muris. And, by the way, I 
used to get beautiful letters from Mr. Pitofsky. Let me assure 
you, this is not a partisan deal. The FTC--and I thought, Ms. 
Majoras, you gave the most beautiful statement I've ever heard. 
It is beautiful. Really. It's eloquent. And I'm sure that you 
wrote it. And it's moving to me, it's so much in favor of the 
consumers. But there's one thing you say, ``For 90 years the 
FTC has stood up for the welfare of the consumer.'' I would 
change that. For 90 years, they should have stood up for their 
welfare. I could tell you, chapter and verse, where they 
didn't, where they allowed these mergers.
    Would you consider putting a moratorium, Ms. Majoras, on 
all mergers until we get a handle on this oil crisis?
    Ms. Majoras. Thank you very much, Senator Boxer, for your 
comments. I do take them very seriously.
    I've never thought about a moratorium on letting mergers go 
through, Senator Boxer. Of course, the Federal Trade Commission 
is bound by the merger laws, and I know of no law that would 
permit a moratorium. I, obviously, would be willing to speak 
with you, and to other Members of this Committee and to 
Congress, about methods that we may deal with these issues, 
particularly while we are in this crisis.
    Senator Boxer. Yes. Well, my understanding is that there 
could be a moratorium if there was a--if people suspected that 
there was anti-competitive behavior going on, you would be able 
to do that. But we don't have to discuss that, because you 
can't do it now. I wrote to the Chairman. He actually didn't 
get back to me on that particular--I mean, we're--we write a 
lot, back and forth.
    But here's the thing. When you came into my office, we had 
a really--I thought, the most honest--and I gave you advice. 
You didn't take it. But you wrote a beautiful statement. What 
did I tell you? I said, ``When you come before us, you should 
address Senator Wyden's concerns.'' He has been very open about 
his problems and--on how he feels. ``You need to address''--I 
said to you, ``Please address gas prices in your statement. 
Talk about that. Show that you're concerned about that in your 
statement.'' Because, you know, if this was another time, 
another place, and I told you this, you wouldn't be facing this 
kind of concern. But especially in California, where we see the 
callousness of the people that held back supply from us.
    And, you're perfectly right, when supply and demand works, 
it's a beautiful thing. I'm an economics major, I was a 
stockbroker, I love supply and demand. It's so good when it 
works. But when someone's manipulating supply, like we had, and 
they don't care, this is the problem we face.
    Now, I believe, in the Bakersfield refinery, if you look at 
all the facts from day one, you will come to a conclusion that 
something is not right here. First they said they didn't make a 
profit. Oop, Oop, they were wrong, they make a good profit. 
Then they say the future of refineries are terrible. Then you 
read, in Fortune magazine, every other company is saying 
refineries are golden right now. They're golden right now. Why 
do they wan to shut this place down? And the FTC has a 
responsibility here.
    So I'm going to ask you one more time, and then I'm going 
to ask Mr. Leibowitz to comment, and we'll be theoretical. We 
won't use this example. But if you were putting yourself in the 
shoes of the FTC, and you knew that just 2 years ago they said 
to Texaco--they said to an oil company, ``Sell your refinery. 
We're--we don't want you to have so much power in the 
marketplace. Sell it to someone else.'' And as part of the 
merger, Company B steps forward, buys the refinery. Suddenly, 2 
years later, they're shutting it down at the point where there 
are the highest prices. Would you not feel--or let me just 
say--put my own view in it--would you believe that this was 
enough to launch a very serious investigation?
    Ms. Majoras. Thank you, Senator Boxer.
    Senator Boxer. Before they close down.
    Ms. Majoras. Senator Boxer, I would think that it's 
something that needs to be looked at very, very closely, and 
certainly before it's closed down, when generally the antitrust 
agencies do like to step in, if they can, to continue----
    Senator Boxer. Thank you.
    Ms. Majoras.--competitiveness in the marketplace.
    If I may, Senator Boxer, I thank you for your comments. We 
did have a terrific meeting in your office, and I apologize if 
I misconstrued any of your advice. No disrespect is intended to 
either you or Senator Wyden. I knew that I would have--well, I 
should say, I suspected that I would have time to address 
Senator Wyden's concerns, and I do appreciate the opportunity 
to address them, because they are serious concerns. And I do 
share the concerns that both of you and others on this 
Committee have expressed.
    Senator Boxer. Jon?
    Mr. Leibowitz. Senator Boxer, without prejudging the 
Bakersfield refinery issue, based on the facts as you related 
them, it does sound like a market that's perversely skewed. And 
the Bakersfield refinery is crucial to West Coast competition.
    I have talked with Debbie about this quite a bit. I believe 
she is committed to taking a very close look at this if she's 
fortunate enough to be confirmed. And if I'm fortunate enough 
to be confirmed, I will work with her, and I will work with 
you.
    And I guess the only other point I wanted to make is, I 
read the GAO report. When I worked for Senator Kohl, we were 
very involved in oil-company merger issues. We held a hearing--
or he held a hearing on the BP/Amoco deal, I think, in 1998, 
and we were very, very concerned that that would lead to a wave 
of consolidation. And, of course, it did.
    So I'm committed to working with you on this issue. I know 
Debbie is, too. And thank you.
    The Chairman. Senator Lautenberg?
    Senator Lautenberg. Thanks, Mr. Chairman.
    I want to talk for a few minutes about Amtrak, Mr. Sosa. 
And I recognize that you've had a distinguished business 
career, and I commend you for that. I, too, come out of the 
business community, and I ran a company called ADP, which was 
started by three very young people from poverty-stricken homes. 
I was one of the three. And today we employ over 40,000 people. 
So I've had pretty good experience in the corporate world.
    And in your response, your written response, to the 
Committee about your biography, there are a couple of things 
that I just wanted to air with you here. You say--the question 
was, How does your previous professional experience and 
education qualify you for the position you've been nominated? 
And you say, ``In my previous experience, I have worked in very 
large organizations, have been exposed to the difficulties of 
dealing with business cycles, restructuring, competition, and 
labor unions.'' And I'd like to ask you, What were the problems 
with the labor unions that you experienced?
    Dr. Sosa. I oversaw Dow Chemicals North American 
operations, and I worked very closely with the management of 
the factories, which is where we had most of the union groups. 
And I can tell you that, while I was there, there was no 
strike. Now, maybe that was fortunate, or not. I had a very 
good group of individuals. I believe very strongly in good 
labor relations. And we did not have an antagonistic 
relationship. So----
    Senator Lautenberg. But you do say that you had problems 
with labor unions. So----
    Dr. Sosa. Well----
    Senator Lautenberg.--what were the problems?
    Dr. Sosa.--a challenge. Perhaps I used the wrong word. 
Working of management and union is always full of challenges, 
and I did not have, as far as I can remember, a confrontational 
situation while I was in charge of the North American 
operation. And I oversaw 25,000 people.
    Senator Lautenberg. But here you say that you did have 
trouble. Now you're saying you didn't have trouble. And--with 
unions. The company that I ran had the longest growth record of 
any company in America, of regular growth--42 years in a row 
that we had more than 10 percent--10 percent or more in 
earnings growth--42 consecutive years. It's a record that's 
unchallenged any place in the annals of business. We had no 
unions. We have 40,000 today. Don't have a union. We didn't 
have a problem with unions because we treated our people in 
such a way that there was no reason to bring in anybody outside 
in this case. They were our partners in many instances, whether 
it came to educational investments or stock participation, you 
name it. That's the way the company is. And we now have 44 
years worth of continuous earnings growth, not at the same 10 
percent rate in the last two.
    Because, Mr. Sosa, there are lots of union questions about 
Amtrak and how they operate, and there are different traits 
involved. And if we start off with one premise, and that is 
that you had problems with labor unions, it's going to be tough 
sledding, I think, if that's an attitude that you bring.
    I would ask, also, one other question. You say, ``I do not 
have experience in the area of land transportation.'' What do 
you think your best qualification is to be on the Amtrak Board, 
Mr. Sosa?
    Dr. Sosa. Well, first of all, I come here with no bias in 
either direction. I guess my only bias is, I like to make 
profits. I understand that there is a unique situation when it 
comes to Amtrak, and some of the fundamentals that one learns 
in managing businesses may not apply here, or cannot be 
applied, but a lot of the other fundamentals do apply. I'm 
talking about good business. And I think that because I've had 
an exposure to manage large organizations and complex worldwide 
businesses, I have a fairly good understanding of the some of 
the fundamentals that make business effective and make things 
work. And----
    Senator Lautenberg. Mr. Sosa, I don't want to interrupt, 
but our time is limited. And I just gave a chair to Columbia 
University, my alma mater, and I was a guest speaker at their 
keynote--at their graduation, the business school, last week. 
And the one thing I addressed my comments to was business and 
ethics. And I gave a chair in corporate governance to Columbia. 
It's a Frank R. Lautenberg chair. Didn't come from government 
money; it came from my money.
    And when you say ``how to make a profit,'' this business is 
not going to make a profit. This is a public corporate. Every 
railroad, passenger railroad, in the world requires subsidies, 
even those that are in private hands. So I submit that there 
are some lessons here that you're going to have to apply. And 
I'm sure you want to be a constructive member. You don't want 
to be engulfed in confrontation.
    Have you looked at the financial statements for Amtrak?
    Dr. Sosa. Absolutely.
    Senator Lautenberg. What was most noticeable about the 
financial statements?
    Dr. Sosa. Well, the continuous loss that happens at Amtrak. 
But I understand that.
    Senator Lautenberg. Operating loss?
    Dr. Sosa. Operating loss.
    Senator Lautenberg. How about capital investment?
    Dr. Sosa. And capital investment. I, you know, have a lot 
to learn here, but evidently there is a need to upgrade some of 
the facilities. Some of them are aging. So that will be an 
issue that----
    Senator Lautenberg. Me, too.
    Dr. Sosa.--we would be confronted with. I understand that 
it's going to be very difficult to make a net profit at Amtrak, 
but I hope there's opportunity to do some of the things that 
we're doing better, and, therefore, increase the revenue. But I 
accept that making a net profit will be very difficult.
    Senator Lautenberg. Well, the--just an interesting Pocket 
Guide to Transportation put out by DOT--and, Mr. Chairman, I'll 
be finished momentarily, I promise--from 1960, the million 
barrels-per-day consumption of--three parts--industry, 
buildings, utilities--four parts, I'm sorry--transportation. 
Transportation went from five million barrels-a-day, in the 
year 2002, to about 13 million barrels-a-day, while industry 
practically held flat from going from three million to five 
million. And we're putting those kinds of funds into 
transportation because it's required. The growth of our 
country, the ability to get around, to stop polluting our world 
requires that we provide transportation other than automobiles 
and flooding the sky with airplanes. And I hope--have you ever 
had a ride on an Amtrak train--Northeast Corridor in 
particular?
    Dr. Sosa. No, I haven't.
    Senator Lautenberg. I take it----
    Dr. Sosa. I will. If confirmed, I will.
    [Laughter.]
    Senator Lautenberg. You mean otherwise you won't?
    [Laughter.]
    Senator Lautenberg. OK. Mr. Chairman, thank you very much.
    The Chairman. Very rarely, Mr. Sosa, do we have a moment of 
candor in these hearings. We thank you.
    [Laughter.]
    Senator Lautenberg. Intended or otherwise.
    [Laughter.]
    The Chairman. Senator Lautenberg and I have an ongoing 
discussion about Amtrak, and that's why I mentioned earlier, 
Dr. Sosa, that you have a very difficult task. I suggest that 
one of the things you do is go back and look at the record when 
heads-of-Amtrak repeatedly came over and testified before this 
Committee they were on the glide path to fiscal independence. 
You know, it's a very sordid and sad tale, a waste of 
taxpayers' money, in my view. And I think Mr. Gunn is doing a 
good job. I think he's coming over and being very candid with 
the Congress about the situation as regards to Amtrak, and I 
think you'll be able to get very good advice and counsel from 
him.
    Mr. Wu, this year, NIST announced that it would have to 
reduce its staff by about 120 people after the Congress funded 
NIST laboratories at less than President Bush requested. I 
think there are a couple of Nobel Prize winners in NIST.
    Mr. Wu. There are two. We're very proud of them.
    The Chairman. During your tenure as Under Secretary of 
Commerce for Technology in the Administration, did you attempt 
to find other sources of funding or reallocate congressional 
earmarks or take other actions to prevent these critical staff 
reductions?
    Mr. Wu. Mr. Chairman, the FY04 appropriations for NIST 
concerns us greatly. NIST is our Nation's oldest Federal 
laboratory. We have two Nobel science winners. They do 
important work. And they're the only laboratory with the 
express mission of working with industry. And developing that 
partnership with industry is very critical if we're to utilize 
and maximize our Nation's science and technology enterprise.
    We have looked at ways in which we can try to augment the 
NIST budget working with other Federal agencies and trying to 
work and receive Federal agency contributions from other 
agencies, such as Department of Homeland Security for our 
first-responders work, and a number of other Federal agencies 
across the board, to try to make up for the budget shortfall. 
It's something that we're very concerned about, and we hope 
that the President's budget request can be met, even though 
we're in very tight times for this Fiscal Year.
    The Chairman. Thank you.
    Senator Wyden had additional questions. He's on his way 
back. I'll let Senator Boxer--and, Senator Boxer, I've got to 
go vote.
    Senator Boxer. OK. I just have one----
    The Chairman. Senator Wyden should be back in a minute.
    Senator Boxer.--I have just one question. So should we just 
put it into recess when I'm done and----
    The Chairman. Yes.
    Senator Boxer. OK.
    The Chairman. He should be back.
    Senator Boxer. Ms. Majoras, when we met, a few weeks ago, 
in our good meeting, you discussed potential conflicts of 
interest from your private practice. And what I'm concerned 
about is, the Bakersfield refinery, as you know, was sold to 
Shell as part of a condition on the merger between Texaco and 
Chevron. Do you have a problem with that? Would you have to 
recuse yourself on that matter?
    Ms. Majoras. Thank you, Senator Boxer.
    We did discuss this. I have discussed the matter further 
with the FTC's ethics officer, and I'm afraid the answer is, 
it's just simply not clear. As I told you, I have done work 
only for one oil company that would require any recusal--that 
is Chevron Texaco, for whom I did a small amount of work in the 
few months that I've been back in private practice. And until 
we know exactly--until I have more information within the 
Commission and know exactly what action may be underway or what 
action we would like to take, I'm afraid I can't----
    Senator Boxer. OK.
    Ms. Majoras.--I can't answer that question just yet.
    Senator Boxer. Well, this is very important. I'd say it's 
kind of a bombshell, in a way. It's possible that our nominee 
might not be able to participate in the Bakersfield refinery 
due to conflict of interest from prior work. And what that says 
to me is, we've got to get this thing done now, because we need 
to have this looked at, and by the Chairman. I think it's very 
important. But I thank you.
    What was the problem that they couldn't give you a more 
definitive answer?
    Ms. Majoras. Well, it all depends--as you know, of course, 
it is Shell that would be shutting down this refinery.
    Senator Boxer. That's right.
    Ms. Majoras. And, at this point, Chevron Texaco, as far as 
we know--as far as I know--I don't know of anything that 
Chevron Texaco has to do with that closure. And so----
    Senator Boxer. But yet the ethics person said that you 
might still--he can't answer it? When is he going to be able to 
answer it--he or she?
    Ms. Majoras. Well, we would be able to answer it--recusals 
are based not on general industry looks, and so forth, Senator. 
They are generally based on particular matters that----
    Senator Boxer. I understand that, but you're saying that 
you went to the ethics officer, and he can't answer the 
question. Why can't he answer the question?
    Ms. Majoras. If it is simply a matter of Shell--or perhaps 
Shell and----
    Senator Boxer. No, no, no. But doesn't he know the issue at 
stake? When you went to him, didn't he know what issue you were 
talking about?
    Ms. Majoras. Yes, he----
    Senator Boxer. OK. But yet he said he doesn't have an 
answer? I don't understand that. It's a big problem for us on 
this Committee, at least several of us here, because we need to 
have a chairman that's going to be able to resolve this matter. 
And all I'm suggesting is--I don't understand why he couldn't 
give you a yes or no. Never heard of a maybe. I've had to go 
seek recusals, and you get an answer.
    Ms. Majoras. I understand, Senator Boxer, but part of the 
answer turns on what it may be that the FTC may have found so 
far, if they're looking at the issue. And because that 
information is confidential, and I'm not permitted to know the 
answer to that, that is why I don't have a----
    Senator Boxer. OK.
    Ms. Majoras.--definitive answer.
    Senator Boxer. OK. Well, thank you.
    Chairman Wyden, you can take--I think the Chair said you 
could take the gavel at this point. I'm going to go vote. Thank 
you.
    Thank you, all.
    Senator Wyden [presiding]. I thank my colleague, and I'm 
just going to follow up just on this conflict----
    Senator Boxer. Yes.
    Senator Wyden.--question, because I think you're raising a 
very important matter.
    Tell me, if you would, Ms. Majoras, this potential 
conflict, is it possible that this conflict will run beyond the 
question of the Bakersfield matter and into oil-pricing issues 
overall, so that you would have to recuse yourself from the 
question of oil pricing altogether?
    Ms. Majoras. I don't believe so, but I would have to recuse 
myself for some period of time for any specific matter that 
involved Chevron Texaco, is my understanding. And what the 
ethics official has told me is that we'll have to take it on a 
case-by-case basis, obviously if I am confirmed.
    Senator Wyden. So there is a possibility, then, that, for 
some period of time, you would have to recuse yourself from all 
oil-pricing issues. Certainly that possibility.
    Ms. Majoras. I think--but I think that possibility is 
remote.
    Senator Wyden. And when do you anticipate being able to 
tell us that?
    Ms. Majoras. Unfortunately, Senator, it's virtually 
impossible for me, or for, I believe, anyone at the FTC, to 
give a blanket answer to that today, because it's taken on a 
case-by-case basis as matters are formed. It doesn't go to 
general industry looks; it goes to very specific matters where 
the FTC may be taking enforcement action against a particular 
company, and that is what would possibly trigger----
    Senator Wyden. Well----
    Ms. Majoras.--a recusal.
    Senator Wyden.--tell me how this works, because this is an 
important issue. And, as you can see, after 8 years of going at 
this, I want some leadership now. Does this mean that every 
single time an oil-pricing issue comes up, because of your 
statement that it's case-by-case, you've got to send this down 
to the ethics office, wait for a response, and then you can go 
ahead?
    Ms. Majoras. With respect to--if I could say it this way, 
if specific matters are coming to the fore, and a specific 
matter involved possibly taking action against Chevron Texaco, 
then the answer is yes, I would need to consult.
    Senator Wyden. I guess what concerns me is, Chevron Texaco 
has such an entrenched role in the oil marketplace, I think 
you're going to be sending an awful lot of stuff down to the 
ethics office. And so at a time when we need leadership, here 
is yet another reason why the consumer is going to wait. And I 
guess we'll have to look forward to getting more details from 
you on this. But I will tell you, I find it very troubling. And 
what I was going to ask about was not just the Bakersfield 
issue, which I and all West Coast Senators--Senator Boxer, 
myself, Senator Reid, and others--are troubled about. But I'm 
concerned that this recusal will have much more sweeping 
ramifications, because, as I told you in the office, I don't 
intend to accept just one change at one refinery unless I see 
this agency, and you at the top, make the kinds of changes 
where it's going to be different for the consumer in the real 
world.
    I drove to a Veteran's Day program in Eagle Point in 
Oregon, more than $2.30 a gallon, a couple of days ago. A lot 
of vets said they almost couldn't drive there because of the 
cost. And I'm not going to accept anything other than a 
commitment to drain this swamp, and I want to be real specific 
about that.
    Let me ask you about several other areas. Last month, in 
Bloomberg News, the FTC General Counsel was quoted as saying, 
``It may be possible, in selected markets, for individual firms 
to unilaterally increase prices.'' That was a direct quote by 
your General Counsel. Now, you say, in your written testimony, 
that protecting competition through enforcement of the 
antitrust gives the consumer the lower price. Isn't your 
General Counsel directly contradicting what you said today?
    Ms. Majoras. Thank you, Senator.
    No, I don't think that Mr. Kovacic is directly 
contradicting. Again, the antitrust laws are absolutely in 
place for the goal. If there's one goal at all, it's to lower 
prices to consumers. And enforcement of the antitrust laws by 
the FTC is directed to that goal, and surely would be, were I 
confirmed. There are instances in markets--I know of instances 
in markets where, in fact, firms can unilaterally raise prices 
for some period of time. And that doesn't necessarily mean, if 
they're not--if they are not engaging in a monopolistic way 
under the antitrust laws, it does not necessarily mean that 
that is a violation of the antitrust laws.
    Senator Wyden. If your General Counsel is saying that 
individual oil companies have the market power to increase 
prices unilaterally, is that an argument for giving the Federal 
Trade Commission new tools to address the ability of a powerful 
company to manipulate the market without the need to collude?
    Ms. Majoras. It possibly would be, Senator. I would like to 
know more about what the FTC has found, very specifically. I 
don't think that the Commission, to date, has done a very good 
job at telling the public and telling the Congress what it has 
found--I think, as far as I understand, has done numerous 
studies of the industry, looked at what has caused high prices, 
and yet the rest of us haven't known exactly what it has found. 
And so I would look forward to the opportunity, if confirmed, 
to be able to, myself, take advantage of that knowledge that 
the FTC has gained and see if, in fact, changes would be 
warranted.
    Senator Wyden. On the redlining issue, I'm especially 
troubled about this because it is such a pernicious practice on 
the West Coast. And the agency found that there was redlining. 
In fact, let me read you what the agency found. This is a 
specific Commission finding. I quote, ``Most of the western 
states' refiners prevented their jobbers from competing with 
them to supply branded gasoline to independent dealers in 
metropolitan areas, a practice called redlining.'' So redlining 
is a practice where oil companies restrict competition by 
preventing wholesalers from selling to dealers. This is an 
anti-competitive practice. It is draining the competitive 
juices out of gasoline markets all up and down the West Coast. 
The agency you want to head has found that it's going on. I 
read you directly from it. Do you want to change that practice 
and fight redlining?
    Ms. Majoras. Thank you, Senator.
    I have begun to take a look at redlining. I do know, as you 
do, that the FTC has also taken a look. The FTC has found 
that--and the economists have found--that, in some instances 
redlining can, in fact, be anti-competitive and used as an 
anti-competitive tool, but, that in some instances, in fact, it 
might be pro-competitive. And so I would like to take a look at 
all of that study before determining--and also understand 
better what the FTC has done on redlining--before saying for 
certain that I would make changes. But I do understand that 
there has been some concerns expressed about redlining, and 
like many vertical distribution practices, we need to take a 
close look to see whether, in fact, it is pro-competitive or is 
having an anti-competitive effect.
    Senator Wyden. Well, again, I just am mystified. I mean, 
you've got commissioners sitting behind you who said it was 
anti-competitive. Shall I read you their comments? ``The result 
is that in certain metropolitan price zones, refiners either 
prevent or discourage jobbers from undercutting refinery prices 
to company-supplied stations.''
    And I will tell you, I'm just not going to support your 
confirmation because you tell you're going to look into 
something and you're going to study it. You know, people in my 
part of the country--consumers and businesses and others in the 
real world--have suffered too much. And it's just not enough to 
expect a Member of the U.S. Senate to say you're going to 
investigate it and, because you're a good person, to give you 
an OK. And so I'm going to continue with this a bit longer.
    But I haven't changed my view with respect to what we 
talked about in the office. I need to hear more specific 
changes, and we'll go through a couple of other areas. What 
about this matter of, you know, concentration and the fact that 
the concentration--the number of states in highly concentrated 
markets has almost doubled from 1994 until now? Do you find 
that troubling? Is that something you want to do something 
about? I'm trying to throw you an opportunity to say there are 
going to be some specific changes down there, but I'm kind of 
running out of areas.
    Ms. Majoras. Well, I do appreciate it. I do appreciate it, 
Senator.
    As I have committed to you--and I do want to emphasize that 
this will be a very high priority if I am confirmed. And if I 
am at the helm of the FTC, we will take action against illegal 
anti-competitive practices that oil companies engage in when we 
find it.
    With respect to the GAO report and the concentration----
    Senator Wyden. I asked about the fact that concentration 
nearly doubled in the last few years. You said that gasoline 
prices would be an important area. I would like to have an 
answer to the question I asked.
    Ms. Majoras. Yes, and--yes, and I apologize, Senator. I 
would like to answer that. With respect to the GAO report that 
looked at concentration levels, it found that in some areas 
concentration went way up. It found that in other parts of the 
distribution chain it went down. Those are all issues that I am 
looking at.
    The question is whether--not just whether concentration 
increased, but whether it increased and, therefore, had an 
anti-competitive effect. When we look at mergers, we go beyond 
just concentration levels. As I understand what FTC, under 
Chairman Pitofsky and Chairman Muris, has done in mergers, 
sure, looked at the concentration level and then went beyond it 
and looked at the whole range of competitive factors or anti-
competitive factors in the industry, and that is absolutely 
what I would do if I were confirmed and if a merger were to 
come before me.
    Senator Wyden. Well, the report found specifically that 
increased market concentration leads to higher prices. Now, do 
you disagree with that?
    Ms. Majoras. It can lead to higher prices. And I know that 
the GAO has done some very good work. But, Senator, econometric 
studies are extremely complicated. Each one needs to be 
scrubbed. Each one, I would need to look at to determine 
whether the bases on which assumptions were used makes good 
sense. So, for example, I want to look at, Why did the GAO use 
states as a geographic market? As you know, the market 
definition, when we do any kind of competitive study, is 
absolutely critical. It's very critical to get that right. And 
questions have been raised about whether that was actually the 
proper market. If you review pricing, and you review other 
competitive or anti-competitive effects in a market that 
shouldn't have been defined as such, then your results will be 
off. So before saying that I would take action based on any 
report, whether generated by the Federal Trade Commission, the 
GAO, or whomever, I want to get down to the numbers and satisfy 
myself as to the way that the report was done.
    Senator Wyden. You said the General Accounting Office does 
very good work. Mr. Muris wrote, I would say, as strong a 
dissent as I've seen in a long, long time with respect to the 
work done by the General Accounting Office. I mean, he 
basically--he all but said, ``What are you smoking over there 
at the General Accounting Office?''
    Ms. Majoras. Yes, he did.
    Senator Wyden. That was the only thing he left out. So are 
you disagreeing with Mr. Muris and saying that you're inclined 
to be with the General Accounting Office, or do you agree with 
him, or--give me some sense. Because you just said the General 
Accounting Office does good work, and Mr. Muris said it was 
pretty much garbage.
    Ms. Majoras. Well, yes, Senator, I know that Chairman Muris 
feels very strongly that this report was not well done. I have 
an open mind today. I am looking at this report very closely. I 
am looking at the FTC's comments on the report. The criticism 
is quite harsh. Both the FTC and the GAO, quite frankly, have 
economists helping them with that, and, at the moment, I've 
been relatively on my own on this. So I'm trying to work my way 
through it. I obviously, I've told you, have worked with 
econometric studies before, and I'm going to look closely to 
see whether this criticism or any other criticism is warranted 
and, of course, what the GAO's response to that criticism has 
been.
    Senator Wyden. Early on, when I was just outlining a few of 
my concerns, I talked about this issue of refineries. And you 
see, for example, on my website, I've posted oil-industry 
documents that attest to the fact that in the past oil 
companies have been closed, not primarily for competitive 
reasons, but to boost profit. And so I'm very interested in 
seeing fresh policies with respect to refinery closures.
    And you said something with respect to refinery capacity, 
which certainly struck me as what the agency is doing now, in 
terms of saying that it will investigate, or it will look at 
matters when brought to them. But I want to give you another 
chance to outline specifically the kind of thing you would do 
to deal with the abuses, the kind of abuses that are up on my 
website. I mean, this is not some abstract thing; this is not 
something that some, you know, wild-eyed liberal thought up. 
It's on my website. And I'd like to give you a chance to tell 
us how you'd deal with it.
    Ms. Majoras. Thank you, Senator. I appreciate that 
opportunity.
    There's no question that refinery capacity is extremely 
tight in the United States today. I would first want to make 
sure that the Federal Trade Commission has a handle on finding 
out, if and when refineries are going to be taken down, 
offline, if any capacity is going to be reduced. First we need 
to know, so we then would be able to take a look at it. Then I 
would want to look for the reasons why not only refineries are 
being shut down--is it they have outdated equipment, and so 
forth, so they can't function profitably? What is the reason? I 
also want to take a look at the reasons why companies are not 
investing in new refineries, because that's obviously a 
question that has been raised, from what I have read.
    Senator Wyden. Well, are you going to start a program to 
investigate refinery capacity? As I say, these are oil-industry 
documents that I've posted. That's why I think they're 
important. And so I would like to see something that suggests 
that there's a change in policy. And are you going to start a 
program to look at anti-competitive practices with respect to 
refineries?
    Ms. Majoras. That's what I said. We're going to treat--
we're going to take a look at refineries, we're going to take a 
look at all the closings. And, yes, we can call that a program. 
Yes. I'd also like to designate a special energy council within 
the FTC who can spend full time on these issues, who can work 
directly with me, and who can always be accessible to the 
public and to Congress. There's always someone to go to, to 
talk to. Obviously, the Chairman and the other Commissioners, 
the buck would stop, but I think that that would be another 
important piece of this, in terms of making it a high priority.
    Senator Wyden. So at this point, you are going to start a 
program to investigate refinery capacity. This would be an 
industry-wide, nationwide inquiry. Is that correct?
    Ms. Majoras. Well, it would be----
    Senator Wyden. Or is this only going to be done if, say, 
nothing happens on Bakersfield, and you're going to look at 
Bakersfield?
    Ms. Majoras. No, I want to look at the reason why any 
refinery capacity will close.
    Senator Wyden. But how would that be done? I guess what I 
want to see is a significant, you know, policy change. And if 
you're saying, ``Well, if somebody tries to close one refinery 
in one community, I'll take a look at that,'' that's one thing, 
and it's not what I'm looking for. If you're telling me that 
you're going to set up a nationwide program to examine anti-
competitive practices in the refinery area, that's significant. 
Which is it?
    Ms. Majoras. It's something very close to the second one. I 
want to look at every refinery closing that we can at the FTC 
to determine why the refineries are being closed. And, as I 
said, I also--and you can call it part of the same program, 
call it part of my agenda--I also want to take a look at why we 
are not seeing investment in new capacity, new refinery 
capacity, because right now we don't have any extra capacity. 
So when there are glitches in the flow--and there are, we've 
seen them--they've contributed to severe price spikes. We don't 
have anything to fall back on.
    Senator Wyden. Let's try this another way. If you're 
confirmed, and you take office, on your first day what are you 
going to do about refinery capacity to follow up on this pledge 
that you've made to the Committee today?
    Ms. Majoras. I'm going to talk to the experts at the FTC, 
and I'm going to find out immediately what has been done 
already--both to study the issue and also on any specific 
investigation. That would be the first thing. I'd also like to 
take a look at how the FTC has done the gasoline price 
monitoring project, which, as you know, is monitoring gas 
prices in 360 cities and 20 wholesale markets every day. I want 
to see how that's been set up and determine whether we can 
change that in any way, add to it in any other way--again, in 
terms of looking at this refinery issue.
    Senator Wyden. Well, if you're going to do the two things 
that you described--talk to the experts and look at gas price 
monitoring--that is business as usual. That is a textbook case 
of just continuing this campaign of inaction, and it's not 
something that's going to be acceptable to me. I think we can--
--
    Mr. Leibowitz, you are eminently qualified to be on the 
Federal Trade Commission, and I understand that this has not 
put you in a comfortable spot, and I regret it very much. I 
think you'll be a great asset to the Commission. And all of you 
who have been spared the questioning today can consider 
yourself in a position to take the rest of the day off.
    [Laughter.]
    Senator Wyden. Ms. Majoras, I want to give you the last 
word and a chance to offer any comments. Chairman McCain 
indicated that I should break this off when I was done, and I 
wanted to give you the last word.
    Ms. Majoras. OK. Well, thank you very much, Senator. I wish 
I could commit to you that--on the very first day, if I were 
confirmed, that I would be able to immediately satisfy myself, 
as a responsible enforcer, that I have enough information and 
evidence in front of me to actually bring action against 
particular companies, but I don't think that that would be the 
responsible thing to do, and I apologize that it sounds to you 
like business as usual. But, of course, I haven't been there, 
Senator. I don't have the evidence of--any evidence of 
wrongdoing before me. I want to look for it. And if we find it, 
I can assure that, if I am at the helm, we will prosecute.
    Senator Wyden. I'll still give you the last word, Ms. 
Majoras. What troubles me is that every time I ask about 
something that would be specific, in terms of action, what I 
hear is essentially a recitation of what the Commission is 
doing. I asked you about the first day in hopes that something 
would change, you know, the first day. If you want to take 6 
months out, or 9 months out, or something along those lines, 
that would be fine, as well.
    But what troubles me is, we could actually be going 
backward, with respect to consumer protection and gasoline 
pricing if, in fact, you have to recuse yourself from a 
significant number of these gasoline pricing issues at a time 
when I and others want to move forward. I think that's very 
troubling. Now, we don't know that to be the case, but you've 
certainly said it's a possibility. And given the pervasiveness 
of Chevron and Texaco in the American economy, it strikes me as 
certainly something that ought to be of concern.
    So, again, last word to you.
    Ms. Majoras. Well, I thank you very much, Senator, for 
airing those concerns. I will continue to think about these 
issues and, I hope, continue to communicate with you about 
them, because I would like to do that. And I thank you.
    Senator Wyden. My door remains open to you, Ms. Majoras.
    And, with that, the Committee is adjourned.
    [Whereupon, at 4:22 p.m., the hearing was adjourned.]

                            A P P E N D I X

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina
    It is a pleasure to welcome Mr. Sosa here today as we consider his 
nomination to become a member of the Amtrak Board. As I said to the 
other three Amtrak Board nominees that we've already considered over 
the past year, the role of an Amtrak Board Member is an important one, 
especially during this time of debate about the future of our national 
passenger rail system. A position on the Amtrak Board provides a 
significant opportunity for strong leadership and determined advocacy 
on behalf of our national passenger railroad.
    As we do each and every summer, Congress is sure to soon be arguing 
about how much money to appropriate for Amtrak for the coming year. As 
usual, this debate will probably result with Amtrak's supporters 
finding just enough money to keep Amtrak limping along for yet another 
year, with Amtrak's opponents preventing us from doing anything more 
than preserving the status quo. But I'm afraid that Amtrak's been 
limping along for so long that it's legs may be ready to fall off.
    We've heard from Amtrak President David Gunn that Amtrak can't 
survive much longer on its starvation diet, and that without 
significant investment to maintain the railroad, we're going to have 
worse service and higher costs to Federal Government. Our nation's 
interstate highway and aviation systems were developed because of 
strong Federal leadership and funding for the past 50 years. It's 
because we've have failed to provide that same kind of leadership and 
foresight for passenger rail that we find ourselves in this situation. 
This is where you as a member of the Amtrak Board could be vitally 
important.
    The Amtrak Board can play a critical role in helping Amtrak become 
the national intercity passenger railroad that our Nation deserves. 
With highway gridlock strangling our cities and passengers once again 
filling our airports, preserving and developing our intercity passenger 
rail system is one of our best options to enhance capacity and maintain 
our present level of mobility. And, amidst the daily warnings of 
terrorist threats here at home and following the events of September 
11, it's obvious that passenger rail serves our national security by 
providing an alternative to highway and air travel in times of crisis. 
If we are going to have a strong Amtrak, that operates safely and 
efficiently in communities big and small, then we will need a firm 
commitment from you as a member of the Board to ensure that passenger 
rail is promoted as a necessary and critical part of our national 
transportation system. The nation deserves nothing less.
    Amtrak and intercity passenger rail isn't just another private 
business. It's a unique entity that serves both public and private 
functions that have to be carefully balanced. Passenger rail systems 
throughout the entire world require substantial public investment to 
survive. Private railroads companies in the U.S., who are arguably some 
of the best freight railroads in the world, got out of providing 
passenger rail service because it was a money-losing proposition. What 
intercity passenger rail needs to grow and thrive is consistent and 
substantial public investment, regardless of whether the service is 
operated by the government or a private entity. This is the heart of 
the matter and any future plans for Amtrak that miss this point will 
only exacerbate Amtrak's delicate financial situation, or worse, 
precipitate an unacceptable reduction in safety and service.
    Let me also take a minute to talk about the nominations process. 
There has been absolutely no consultation on the lone democratic 
nominee, as well as the three other republican individuals, including 
Mr. Sosa, that have been nominated to serve on the Amtrak Board this 
Congress.
    As I have said before, the Amtrak Reform and Accountability Act of 
1997 established a 7 member board with a specific mandate that the 
President ``consult'' with the Majority and Minority. President Clinton 
was the first to nominate board members under this authority and 
submitted 6 names--3 Democrats and 3 Republicans, including Mayor Smith 
of Meridian, who became Board Chairman. Under the statute, the 
Secretary of Transportation is the seventh member of the board and has 
voting privileges. Clinton's Secretary of Transportation, Rodney 
Slater, was the 7th voting Member. I am certain there was consultation 
with both sides. I mention Mayor Smith because he did an excellent job, 
and is the person Mr. Thompson is slated to replace.
    We need to get back to the way nominations were handled in the past 
for these types of positions, where consultation with the minority was 
common place and sought by the White House.
                                 ______
                                 
   Prepared Statement of Hon. Orrin G. Hatch, U.S. Senator from Utah
    Mr. Chairman:

    Thank you for giving me a few moments to express my views in 
support of Jon Leibowitz, President Bush's nominee to serve as a 
Commissioner to the Federal Trade Commission.
    Mr. Leibowitz currently serves as the Vice President for 
Congressional Affairs for the Motion Picture Association of America. 
Many of us have had the pleasure of working with Mr. Leibowitz during 
his time at the MPAA where he quickly became an able and trusted 
advisor to the MPAA's President and CEO Jack Valenti.
    Many of us in the Senate first came to know Mr. Leibowitz during 
his years of service to the Senate Judiciary Committee where he was the 
Democratic Chief Counsel and Staff Director for the Senate Antitrust 
Subcommittee. While working on the Committee staff, he focused his work 
on competition policy and telecommunications matters and was a trusted 
advisor to our Senate colleague, Herb Kohl. Prior to working for Sen. 
Kohl, Mr. Leibowitz worked for the late Sen. Paul Simon. He graduated 
Phi Beta Kappa from the University of Wisconsin in 1980 and from New 
York University School of Law in 1984.
    While on the Judiciary Committee staff, Mr. Leibowitz developed a 
reputation as an able lawyer, earnest advocate for the consumer, and a 
consensus builder. His first inclination has always been to work across 
the political aisle with the goal being to advance bipartisan solutions 
to public policy problems.
    Mr. Leibowitz came to view his role as Sen. Kohl's advisor on 
``competition'' issues quite broadly so that it included giving Sen. 
Kohl unsolicited advice on the NBA draft and the roster for Sen. Kohl's 
Milwaukee Bucks. However, I would note that the Bucks' playoff 
appearances have increased substantially since Jon left Sen. Kohl's 
employ.
    Mr. Chairman, I am always pleased to see those who worked 
tirelessly for the Senate go on to greater success in life. Mr. 
Leibowitz is no exception. His fine personal qualities, and the support 
of his lovely wife Ruth Marcus and their two children--Emma and Julia, 
will serve him well on the Federal Trade Commission. I strongly urge 
the Committee to favorably report his nomination to the full Senate 
where I believe he will be unanimously supported.
                                 ______
                                 
                                                       ASME
                                        Washington, DC, May 4, 2004

Hon. John McCain,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Dear Mr. Chairman:

    We are writing to express our strong support for President Bush's 
nomination of Benjamin H. Wu to serve as Assistant Secretary of 
Commerce for Technology Policy. Mr. Wu has served admirably as Deputy 
Under Secretary of Commerce for Technology since 2001, and we believe 
he deserves the post to which he has been nominated.
    Under Mr. Wu's leadership, the Department of Commerce's Technology 
Administration has aggressively advocated for American technology and 
codes and standards both in the United States and overseas. Partly as a 
result, Secretary of Commerce Donald Evans in 2003 issued an 8-point 
initiative to enhance the Department's standards-related activities as 
a way to increase the U.S. competitiveness in the global marketplace. 
Through this initiative, the Department of Commerce has strengthened 
its collaboration with the Office of the U.S. Trade Representative and 
the Department of State on the vital issues of trade and 
competitiveness.
    Throughout his tenure at Commerce and during his years on Capitol 
Hill, Mr. Wu has been a forceful and effective advocate for the 
laboratories and programs at the National Institute of Standards and 
Technology, an agency of vital importance to U.S. industry. Mr. Wu 
understands the important mission of that agency? and has worked to 
ensure it has the resources necessary to effectively assist U.S. 
industry in technology transfer, precision measurements, standards and 
global trade, and homeland security technologies.
    We are pleased that President Bush has recognized Mr. Wu's 
contributions to the Department of Commerce and to the Nation by 
seeking to elevate him to the position of Assistant Secretary for 
Technology Policy. We urge a positive recommendation on his nomination 
from your Committee to the full United States Senate.
            Sincerely,

June Ling
Associate Executive Director,
Codes and Standards
James F. Thomas
President
ASTM International
                                 ______
                                 
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                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                              Brett Palmer
    Question 1. On September 6, 2003, workers with Lockheed Martin were 
alleged to have tipped over and destroyed the NOAA N Prime polar 
orbiting satellite on the assembly room floor. What is the status of 
the investigation into this accident, and what steps does the Secretary 
of Commerce intend to take to ensure the American people are able to 
recover the financial costs from this accident?
    Answer. The Department of Commerce has undertaken three responses 
to this mishap.
    First, immediately following the incident, NOAA and NASA, its 
contracting agent with Lockheed Martin for NOAA N Prime, commenced 
taking appropriate steps to determine the cause of the accident and to 
implement corrective action, both at the contractor's facility and at 
the NASA Center responsible for providing oversight of the NOAA N Prime 
spacecraft. NASA will issue its Accident Investigation Report in the 
near future.
    Second, NASA and the Department of Commerce are assessing available 
legal means for recovery of the Government's financial costs due to 
this accident. Following a thorough evaluation of the NOAA N Prime 
spacecraft and instruments, NOAA and NASA have determined, on a lowest 
cost, lowest risk basis, that it may be possible to repair or replace 
components on NOAA N Prime in time to meet a required launch in early 
FY 2008. The Department of Commerce/NOAA and NASA are negotiating with 
Lockheed Martin to implement this step if it can be achieved within the 
anticipated run out of the FY 2005 President's Budget Request had the 
accident not happened. In other words, no tax dollars other than those 
originally envisioned for building and placing the satellite in orbit 
would be spent to rebuild NOAA N Prime.
    Third, to protect Government interests in the event these 
negotiations are unsuccessful, NOAA and NASA are evaluating and 
preserving alternate means to deliver the environmental measurements 
and other data that were to come from the NOAA N Prime mission.

    Question 2. I remain deeply troubled by the growing number of 
Congressional earmarks that have been attached in both statutory and 
report language for the Department of Commerce. What are your thoughts 
about the effects of Congressional earmarking on agencies and how do 
you treat these earmarks when they appear in statutory or report 
language?
    Answer. The Department of Commerce works very closely within the 
Administration in the annual budget formulation process, resulting in 
the submission of our annual budget request to Congress. I believe the 
President's budget submission best reflects the funding needs and 
priorities for the Department. The Department does not and should not 
advocate for spending provisions that are outside of the President's 
request.
    The Administration strongly prefers to avoid earmarks, because the 
Executive Branch needs the flexibility to make decisions about how best 
to allocate funds within each program. However, Congress has the 
Constitutional prerogative to write the appropriations bill. Congress 
can, and often does, add specific language in the appropriations 
language that sets into law how specific funds will be spent. It is our 
duty to obey all the laws, spending laws included. In doing so, we look 
first to the actual language of the law, but we take into account any 
additional expressions of Congressional intent that may be included in 
accompanying report language. Report language does not bear the force 
of law. It is worth stating that although report language can be 
helpful in understanding and implementing the Congressional intent of 
the law, report language does not override the actual text of the law.

    Question 3. Last year, Congress passed the 21st Century 
Nanotechnology Research and Development Act (P.L. 108-153). This law 
authorized the Secretary of Commerce to establish a clearinghouse of 
information related to commercialization of nanotechnology research. 
What steps have been taken to establish this clearinghouse?
    Answer. The Department has taken preliminary steps to create the 
nanotechnology commercialization clearinghouse, but is not close to 
completing this project. The bill as passed made the establishment of 
the clearinghouse on nanotechnology commercialization the 
responsibility of the Secretary's designee in consultation with the 
National Nanotechnology Coordination Office. The National Technical 
Information Service (NTIS) continues to receive and make available 
federally funded research on nanotechnology as part of its overall 
clearinghouse program. In addition, the National Nanotechnology 
Coordination Office and the NTIS have begun discussions for a possible 
Memorandum of Understanding toward the goal of directing more 
information to the NTIS for the dissemination of information related to 
nanotechnology research.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                             Benjamin H. Wu
    Question 1. The Administration's Climate Change Technology Program 
(CCTP) has a FY 2005 budget request of approximately $3 billion. The 
Climate Change Science Program (CCSP), headed by the Department of 
Commerce, has a FY 2005 budget request of approximately $2 billion. The 
Climate Change Science Program recently completed its strategic plan 
and the Climate Change Technology Program plans to issue its initial 
version of a strategic plan this month. What are your plans for 
ensuring that the results from the scientific research are incorporated 
into the technology development programs?
    Answer. The Department's CCSP and CCTP efforts are led by our 
National Oceanographic and Atmospheric Administration (NOAA). I have 
been advised that both the CCSP and CCTP Strategic Plans recognize the 
need for close collaboration of the two programs. One such 
collaborative activity could be technology transfer by industry into 
the marketplace of scientific research that holds commercial promise. 
If this technology transfer is successful, we can move into commerce 
the basic scientific research that holds the potential to monitor 
climate change and reduce our greenhouse gas emissions. In doing so, we 
would also enhance the return on this substantial taxpayer investment.
    The Office of Technology Policy (OTP) has statutory 
responsibilities and executive oversight of our Nation's Federal 
technology transfer enterprise. Additionally, OTP manages the 
Interagency Working Group on Technology Transfer, comprised of Federal 
agencies and laboratories that conduct technology transfer activities. 
As the Assistant Secretary of Technology Policy, I would be willing to 
promote appropriate efforts to use the working group for an interagency 
review of actions to assist in furthering the CCTP mission.
    I understand that both the CCSP and CCTP recognize the need to 
integrate science and technology to further the mission of each. In the 
February 2004 review of the CCSP Strategic Plan, the National Academies 
said that the CCSP and CCTP had made ``commendable efforts'' to 
integrate their activities, particularly with respect to assessing the 
``scientific implications of technologies under consideration by the 
CCTP'' and developing ``realistic emissions scenarios for climate and 
associated global changes with these technologies in mind.'' The 
Academies also noted that ``[c]omments by CCSP and CCTP representatives 
at the committee's August 2003 meeting indicated that efforts are 
already yielding benefits in coordinating the two programs.'' Wherever 
helpful, I would be pleased to work as Assistant Secretary with NOAA, 
the Department of Energy, the Environmental Protection Agency, other 
participating Federal agencies, and the Committee to further facilitate 
the integration of science and technology for both programs.

    Question 2. In a December 2003 editorial in the Financial Times, 
Paula Dobriansky, the Under Secretary of State for Global Affairs, 
wrote that there are only two paths forward toward achieving big 
reductions in greenhouse gas emissions. One was to use existing 
technologies and the other was to use breakthrough technologies, which 
she said is the only acceptable, cost effective option. She further 
states that a rigid policy that allows no role for new technology would 
be ill-suited to the realities of the 21st century. One of the main 
elements in any successful technology development program is the 
``driver.'' Can you comment on the importance of having a mandatory 
emissions reduction program as the ``driver'' for the Administration's 
climate change technology development program?
    Answer. From the scientific information currently available, the 
Administration has taken an approach that includes robust mitigation 
technology research, development, and deployment combined with tax 
incentives and voluntary programs aimed at securing least cost 
greenhouse gas emissions reductions. I understand that other market-
based drivers will be examined as needed in the future. While a 
mandatory emissions reduction program could be implemented as a 
``driver'' to spur the development of breakthrough climate change 
technologies, the regulatory bodies that would consider such action 
will need to weigh any decision based on a balance of impact to 
industry, our international competitiveness, and sound science, among 
other factors.

    Question 3. The funding for the Office of the Under Secretary of 
Technology Administration at the Department of Commerce was eliminated 
in the Fiscal Year 2004 Commerce, Justice, and State Appropriation 
bills as initially reported in both the Senate and the House. What 
actions has the Technology Administration taken to address the concerns 
about the agency's performance raised by these actions? What actions 
will you take as the Assistant Secretary of Commerce for Technology 
Policy to continue to address these performance concerns raised by the 
Appropriators?
    Answer. The Office of the Under Secretary for Technology and the 
Office of Technology Policy (OTP) provides policy guidance to the 
Secretary of Commerce and serves as the primary portal for the high 
technology industry, advocating for innovation and industrial 
competitiveness within and outside the government. Last year's initial 
congressional appropriation actions for the Office of the Under 
Secretary were clearly disheartening since, as we understood, the 
actions were taken for reasons that were not directly related to the 
impact, success, or abilities of the office. Since the Fiscal Year 2004 
appropriations cycle, we have sought out regular meetings and have 
begun a constructive dialogue with both the House and Senate 
appropriators to discuss concerns, future activities, and opportunities 
for partnership. We were especially grateful for the Committee's 
consideration and funding authorization, consistent with the 
President's budget request, in S. 1395, the Technology Administration 
Authorization Act of 2003. We were also pleased that the high 
technology industry sectors spoke out so forcefully in support of the 
vital need for the office and the necessity for an effective advocate 
in the government.
    As the Assistant Secretary for Technology Policy, I intend to 
continue to ensure that the funding for OTP continues to be fully 
leveraged and magnified in order to provide strong returns on a 
relatively small Federal investment. For well over the past two 
decades, high technology industries have disproportionally been the 
lead engine of our economy. OTP works in partnership with the private 
sector to develop and advocate national policies and initiatives to 
strengthen the U.S. economy. Under my direction, the office will 
promote domestic and international technological competitiveness in 
areas such as technology transfer, business innovation, technology-led 
economic growth, and workforce preparation for a technology-driven, 
knowledge-based future.
    I expect that OTP will produce high value products and outputs, 
which meet strategic objectives consistent with the Department's 
mission and the President's Management Agenda (PMA). These specific 
objectives include: (1) Support and improve the American innovation 
system (examples include strengthening the Federal technology transfer 
system and identifying policies that promote the competitiveness of the 
U.S. science and technology workforce); (2) Advance the role technology 
plays in U.S. economic growth and homeland security (increasing the 
understanding of policymakers of the importance of emerging 
technologies and identifying strategies that facilitate technology-led 
economic growth); (3) Strengthen the competitive position of U.S. 
technology industries (analyzing the impact of globalization, trade, 
standards, and technology development in an international marketplace, 
proposing policy options on critical U.S. business climate issues, and 
promoting adoption of policies that support innovators and 
entrepreneurs); and (4) Effectively manage OTP's organization, 
capabilities, and resources to maximize the effectiveness of its 
activities and services (transforming OTP's internal organization and 
procedures to align with the PMA objectives).

    Question 4. The Office of Technology Policy is charged with working 
in partnership with the private sector to develop and advocate national 
policies to build America's economic strength. One area of great 
concern today is the U.S. manufacturing sector. What policies will you 
advocate to improve the American manufacturing sector?
    Answer. The current state of U.S. manufacturing employment is 
troubling, despite very positive current trends indicating a rebound in 
that sector. Manufacturing employment has been declining over an 
extended period. This trend reflects, in part, to higher productivity 
growth in the U.S. than in other countries. Our recent analysis 
indicates that U.S. manufacturing jobs have declined for two major 
reasons: productivity growth and contracting out to domestic suppliers; 
with two key factors exacerbating the long-term trend: investment and 
slower growth abroad. OTP will continue to provide analysis and 
assistance in efforts to improve our manufacturing sector. OTP provided 
significant contributions to the January 2004 Manufacturing in America 
report. OTP intends to work very closely with the Department's newly 
created Assistant Secretary for Manufacturing and Services to 
collaborate on measures improving manufacturing. Specifically, we need 
to enhance our manufacturing research and development capabilities, 
improve supply chain processes, implement enterprise integration that 
fully utilizes new technologies, ensure that we have a free and fair 
trade policy for U.S. manufactured exports overseas, and remove foreign 
trade barriers, among others.

    Question 5. What are your thoughts on the recent ``out-sourcing'' 
controversy? One of the ``not-yet discussed'' aspects of out-sourcing 
is the relocation of U.S. research labs to other countries. This may 
create a situation known as ``in-sourcing'' whereby technology 
developed outside the country is used to create jobs within the U.S. 
Any thoughts on this phenomenon?
    Answer. We need to look into all aspects of the impact of 
offshoring. There is currently a lack of data that can accurately 
forecast and determine offshoring trends. The ability to identify these 
trends is crucial for policymakers and lawmakers to develop informed 
decisions and be ahead of the policy curve on this very important, yet 
politically sensitive issue. OTP was tasked by Congress in last year's 
appropriations bill to provide an analysis of workforce globalization 
in key technology sectors and will be submitting a summary of findings 
in July 2004. Additionally, OTP is consulting with the Department's 
Economic Statistics Administration on methods to improve the quality 
and timeliness for measuring outsourcing, as well as ``insourcing'' 
when foreign multinationals choose to locate production and jobs in the 
U.S. Insourcing is an important datapoint that needs to be effectively 
measured so that it can be engaged as a part of the greater offshoring 
debate.

    Question 6. Greater international competitiveness in the technology 
sector is viewed by some observers as a serious challenge to U.S. 
economic leadership. What are your thoughts on the rise of China and 
other nations' share of the technology sector, and how should the U.S. 
Government and American companies adapt to the new economic climate?
    Answer. It is clear that the U.S. cannot afford to stand still 
while the rest of world moves forward. The rapid pace of technology 
maturation requires us to be constantly vigilant and aggressive. 
Creating policies that allows us to maintain our Nation's technological 
preeminence in the face of ever-increasing global competitive pressures 
will be an OTP priority. We must adapt to the new global, knowledge-
based marketplace. In doing so, we need to have a policy environment 
that promotes innovation and allows the technology sector to grow and 
prosper. We must have, at minimum, a strong education system to expand 
our country's knowledge base, free and fair international trade for 
American exports, a climate that promotes technology as a powerful, 
productive job creator, and a strong intellectual property rights 
regime.

    Question 7. Many experts believe that nanotechnology can play a 
role in revolutionizing the U.S. economy, and will offer an opportunity 
for continued U.S. economic leadership. Some experts have projected 
that sales of products based on nanotechnology will reach $1 trillion 
by 2015. What steps should the Office of Technology Policy take to 
ensure the smooth transfer of the results of this new field of research 
from the laboratory to the commercial sector?
    Answer. Nanotechnology has the potential to change and/or replace 
industries and processes, knowledge, and skills as we currently define 
them. So, it is clear that the first nations to harness these new 
technologies will be in an advantageous position to reap the greatest 
rewards. That is why OTP has been prominently engaged in the debate to 
bring the fruits of this new field of research to commercialization.
    Yet at the same time, nanotech's revolutionary nature will 
challenge our regulatory systems which may also have to cope with 
uninformed public fear of potential negative consequences. If we fail 
to create appropriate regulatory regimes with the flexibility to adapt 
to rapidly advancing technologies, such as nanotechnology, we will deny 
ourselves extraordinary economic and societal benefits. And other 
nations will be sure to step into the vacuum. Comparative advantage 
will accrue to countries that find the right approach to regulatory 
oversight in balancing legitimate societal interests. We must ensure 
nanotechnology is understood and welcomed by the public, lest unfounded 
fears undermine its potential. OTP has engaged with key stakeholders--
government, industry, academia, and financiers--so that we can ensure 
that knowledge moves quickly and efficiently from the laboratory to the 
marketplace. We are also working with those stakeholders to ensure that 
we have a regulatory environment that is fair, open, and transparent--a 
framework that allows good science to overcome overly bureaucratic and 
burdensome restrictions in order to bring the promise of nanotechnology 
to the marketplace.

    Question 8. I remain deeply troubled by the growing number of 
Congressional earmarks that have been attached in both statutory and 
report language for the Department of Commerce. What are your thoughts 
about the effects of Congressional earmarking on agencies, and how do 
you treat these earmarks when they appear in statutory or report 
language?
    Answer. With expected budget pressures being placed upon all 
discretionary Federal programs, I share the concern that congressional 
earmarks could have the potential to limit the ability of our agencies 
to place appropriate emphasis on important programs and activities. I 
would defer the ultimate resolution of Departmental actions relating to 
earmarks when they appear in statutory or report language to the 
guidance of our General Counsel's office and our Legislative Affairs 
office.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John Ensign to 
                            Deborah Majoras
    Mr. Chairman, I would like to propose to both the Federal Trade 
Commission nominees a series of questions related to a recent Federal 
Trade Commission staff report entitled ``Possible Anticompetitive 
Barriers to E-Commerce: Wine''.
Responses from Deborah Majoras
    I understand that the Committee staff has indicated that a general 
answer to the questions below will suffice. For your convenience, 
however, I also have provided responses that the FTC previously gave in 
response to the specific questions.
    I am aware that last year, the FTC released a staff report entitled 
``Possible Anticompetitive Barriers to E-Commerce: Wine''. In sum, the 
report examined state law barriers to Internet wine sales and concluded 
that wine consumers could save money and have greater choice by 
purchasing wine on the Internet. I understand that questions have been 
raised concerning the limited scope of the report, whether the report 
adequately addresses the tax ramifications of direct shipping, whether 
the report adequately addressed problems with respect to sales to 
minors, and whether the report is relevant in light of the 21st 
Amendment. Because I am not at the FTC currently, I have not had the 
opportunity to explore these issues with the FTC staff who prepared the 
report or with those who have expressed concerns with the report's 
methodology and conclusions. I recognize, however, that this is an 
important issue (and, indeed, important enough from a legal standpoint 
that the Supreme Court has granted certiorari in a case raising issues 
regarding Internet wine sales), and I have an open mind. If confirmed, 
I will carefully examine the issues raised. At that time, I would be 
pleased to meet with you to discuss your concerns.
The answers set forth below have previously been provided by the FTC

    Question 1. With respect to the FTC staff report that included a 
study of market conditions in McLean, Virginia:
    (a) How does that study provide guidance for the rest of the United 
States with regard to the price and variety of wines available to 
consumers?
    Answer. Prior to the study of market conditions in McLean (``McLean 
study''), there was little empirical information on how access to out-
of-state wine sellers through the Internet affected prices and 
varieties of wines available to consumers. To address this void, the 
study analyzed the prices and wine selections offered by stores that 
identified themselves as wine retailers in the greater McLean, Virginia 
area for a pre-identified bundle of wines. McLean was chosen as the 
relevant retail area for several reasons. First, at the time the study 
was conducted, Virginia banned direct sales from out-of-state 
suppliers. Second, given the socio-economic status of many residents in 
McLean (and northern Virginia, generally), it seemed likely that 
several bricks-and-mortar outlets could be found locally that catered 
to the needs of a sophisticated wine drinking population. As a result, 
an estimate of the effect on variety was likely to be conservative and 
could not be dismissed as driven by the choice of a location where few 
fine wines would likely be available. McLean is just one market; 
smaller or less affluent markets likely have somewhat less variety than 
McLean, and larger or more affluent markets likely have somewhat more 
variety.
    The McLean study found that consumers can purchase many wines 
online that are not available in nearby bricks-and-mortar stores. The 
study found that 15 percent of a sample of popular wines available 
online were not available from retail wine stores within ten miles of 
McLean. The study also found that, depending on the wine's price, the 
quantity purchased, and the method of delivery, consumers can save 
money by purchasing wine online. Because shipping costs do not vary 
with the wine's price, consumers can save more money on more expensive 
wines, while less expensive wines may be cheaper in bricks-and-mortar 
stores. The McLean study suggests that, if consumers use the least 
expensive shipping method, they could save an average of 8-13 percent 
on wines costing more than $20 per bottle, and an average of 20-21 
percent on wines costing more than $40 per bottle. These results should 
be interpreted as an indicator of the potential for direct shipment to 
offer price and variety benefits to consumers, rather than a 
quantitative prediction of the size of these benefits if a direct 
shipment ban was lifted.

    (b) Doesn't the FTC testimony to the Committee contradict testimony 
received by the FTC at the FTC Workshop clearly demonstrating that 
wineries sell wine directly to consumers at retail prices, and when 
shipping costs are included, the cost to consumers is actually more 
expensive than purchasing the same products through the three-tier 
system?
    Answer. The McLean study found that, including shipping costs, 
consumers can save more money on more expensive wines (as detailed in 
the previous answer), while less expensive wines may be cheaper in 
bricks-and-mortar stores. At the FTC Workshop, witnesses provided a 
variety of largely anecdotal views as to the prices available online. 
Systematic data analysis, however, generally provides more accurate and 
reliable evidence regarding prices than anecdotes. The McLean study was 
conducted by economists trained in methods of empirical analysis and 
reviewed by Ph.D. economists.

    Question 2. The FTC press release regarding the FTC report claimed 
the report did not address the issue of lost taxes, yet at the 
Subcommittee hearing, the FTC claimed knowledge of the tax 
ramifications of direct shipping.
    (a) Has new information with regard to the tax collection 
ramifications of direct shipping been made available to the FTC?

    (b) How were you able to explain the tax collection ramifications 
of direct shipping to the Subcommittee if the FTC report did not 
address this issue?
    Answer. The Report focuses on the competition and consumer 
protection issues, although the Report does discuss the tax issue. The 
press release identifies the scope of the tax discussion: ``The report 
also does not focus on the merits of the tax debate, other than to note 
that states attempting to collect taxes generally report few or no 
problems with collecting them.'' See Federal Trade Commission, Possible 
Anticompetitive Barriers to E-Commerce: Wine (2003) (``Report''), at 
http://www.ftc.gov/os/2003/07/winereport2.pdf. Accordingly, while the 
Report does not ``focus'' on the tax issue, the Report does discuss 
information that state officials provided to FTC staff. For example, 
FTC staff asked officials from many different states the following 
questions: ``Do you try to collect sales or excise taxes on shipments 
of wine into your state, and if so how effective have you been? Have 
you had any problems collecting taxes from out-of-state shippers?'' The 
Report reprints the state officials' answers in an appendix, and also 
discusses their answers. In general, several states that allow 
interstate direct shipping also collect taxes from those shipments. By 
requiring out-of-state suppliers to obtain permits, states such as New 
Hampshire have sought to achieve voluntary compliance with their tax 
laws. Most of these states report few, if any, problems with tax 
collection.

    Question 3. The 21st Amendment to the Constitution of the United 
States gives individual states the right to regulate the distribution 
of alcohol.
    (a) Although admittedly not addressed in the FTC report, doesn't 
the 21st amendment give states the right to regulate the distribution 
of alcohol?
    Answer. Yes. Section 2 of the Twenty-First Amendment states as 
follows: ``The transportation or importation into any state, territory, 
or possession of the United States for delivery or use therein of 
intoxicating liquors, in violation of the laws thereof, is hereby 
prohibited.''

    (b) What constitutional or statutory authority gives the Federal 
Trade Commission the right to involve itself in alcohol importation or 
distribution?
    Answer. The Federal Trade Commission is charged by statute with 
preventing unfair methods of competition and unfair or deceptive acts 
or practices in or affecting commerce. Federal Trade Commission Act, 15 
U.S.C. Sec. 46. This statute gives the Commission the authority to 
``gather and compile information concerning, and to investigate from 
time to time the organization, business, conduct, practices, and 
management of any person, partnership, or corporation engaged in or 
whose business affects commerce.'' Under this statutory mandate, the 
Commission seeks to identify business practices that impede competition 
or increase costs without offering countervailing benefits to 
consumers. See 15 U.S.C. Sec. 46(b). As outlined in the written 
testimony, Commission staff have often assessed the competitive impact 
of regulations and business practices affecting e-commerce in a variety 
of industries, including real estate, contact lenses, and funeral 
goods. Such assessments can inform the decisions of both state and 
Federal policymakers.

    (c) What authority allows the Federal Trade Commission to supercede 
the authority of the Constitution of the United States and the 21st 
Amendment?
    Answer. The Federal Trade Commission does not have the authority to 
supersede the authority of the Constitution of the United States or the 
21st Amendment.

    Question 4. What logical process has the FTC used to extrapolate 
from a report declaring that a state did not conduct any compliance 
checks or stings with regard to sales to minors, and conclude from that 
[lack of] information that there is not a problem with sales of alcohol 
to minors associated with direct shipping?
    Answer. To gather information on the actual experiences of states 
that allow interstate direct shipping, FTC staff contacted officials 
from numerous reciprocity and limited importation states and asked them 
a variety of questions, including whether they had experienced problems 
with interstate direct shipping to minors. Most of the surveyed states 
provided written responses. Staff also reviewed testimony from a 
California alcohol regulator who had testified before California's 
legislature.
    In general, these state officials report that they have experienced 
few, if any, problems with interstate direct shipment of wine to 
minors. Most of them do not believe that interstate direct shipment of 
wine to minors is currently a serious problem, although several of them 
believe that it is possible for minors to buy wine online. None of them 
report more than isolated instances of minors buying or even attempting 
to buy wine online. Some of them, such as California, have monitored 
the issue of alcohol delivery to minors for years or even decades.
    Notably, New Hampshire has conducted stings against out-of-state 
shippers. In a letter to FTC staff, New Hampshire reported that, ``The 
NH Liquor Commission Bureau of Enforcement has in the past done 
compliance stings against out-of-state shipper [sic] who do not hold 
permits and against shippers who do hold permits.'' New Hampshire then 
reported that, ``We suspect there may be some instances where this is 
occurring but we have very little evidence in this area and do not 
believe this is a serious problem at this time.''
    As your question suggests, the fact that states have received few 
complaints about direct shipments to minors does not establish that 
minors are not purchasing wine online. As noted by a Michigan Assistant 
Attorney General, minors who buy wine online are unlikely to report 
their purchases to the authorities, and neither the package delivery 
company nor the supplier may know or care that they are delivering wine 
to a minor. The FTC cannot rule out the possibility that minors are 
buying wine online undetected by state officials. Nevertheless, states 
that allow interstate direct shipping generally say that direct 
shipping to minors currently is not a serious problem, and that they 
have received few or no complaints about direct shipping to minors. 
States can receive information in ways besides stings. For example, if 
online wine sales to minors were a serious problem, one would expect 
that at least some parents would complain to the relevant state 
officials, particularly because parents likely would see the wine 
orders charged to their credit cards. In other words, the fact that 
states have received few such complaints is itself important 
information about the scope of the problem.

    (a) How do you reconcile the FTC's finding of ``no problem'' with 
respect to sales to minors in light of testimony given to the FTC by 
the Michigan Attorney General's office, media reports, and information 
provided by witnesses at the Subcommittee hearing?
    Answer. FTC staff carefully evaluated all of the information 
received at the workshop. FTC staff also gathered additional 
information from studies, media reports, and officials from many 
different states, including New Hampshire, Illinois, California, 
Michigan, and others. The Report did not find that there was ``no 
problem'' with respect to sales to minors. As discussed in the Report, 
in states that allow interstate direct shipping, the state officials 
generally report that they have experienced few, if any, problems with 
shipments to minors. As the Report also notes, there is evidence, 
largely anecdotal, that minors have been able to buy wine online in 
some instances. See Report, pp. 26-27. Nevertheless, FTC staff found or 
received no systematic studies assessing whether direct shipping causes 
an increase in alcohol consumption by minors. The principal sources of 
information--data from state compliance checks and one empirical study 
on home alcohol delivery--are inconclusive on this point. In regard to 
Michigan and other states that ban interstate direct shipping, it is 
not clear whether their experiences are comparable to the experiences 
of states that allow direct shipping, because those states may have 
different ordering and distribution practices, such as different levels 
of training for couriers in those states. In any event, the evidence 
from the McLean study suggests that an interstate shipping ban 
primarily deprives consumers of access to lower-cost sources of high-
end, expensive wines. FTC staff has seen no evidence indicating whether 
higher prices for these types of fine wines would curtail consumption 
significantly either among the general populace, minors, or problem 
drinkers.

    (b) What evidence does the FTC possess that the ``safeguards'' 
noted by proponents of direct shipping actually work? How do you 
reconcile that lack of evidence with the evidence given at the FTC 
Workshop and by WSWA at the Subcommittee hearing that shows the 
safeguards do not work?
    Answer. Unfortunately, there is no systematic empirical data 
revealing how often couriers obtain a valid adult signature. Both UPS 
and FedEx, however, have adopted policies that require their couriers 
to obtain adult signatures. As several Federal courts have discussed, 
states can develop penalty and enforcement systems to provide 
incentives for both out-of-state suppliers and package delivery 
companies to comply with the law.
    If online wine sales to minors were occurring frequently, one would 
expect that parents would complain to the relevant state officials, 
particularly because parents likely would see the wine orders charged 
to their credit cards. FTC staff contacted officials from numerous 
reciprocity and limited importation states and asked them a variety of 
questions, but those state officials generally report that they have 
experienced few, if any, problems with interstate direct shipment of 
wine to minors. Most of those states require an adult signature at the 
point of delivery and similar safeguards discussed in the Report. In 
addition, FTC staff is aware of no evidence that states that allow 
intrastate direct shipping have experienced problems with direct 
shipments to minors. See Report, pp. 27-29. Finally, as noted earlier, 
it is not clear whether the experiences of states that ban interstate 
direct shipping are comparable to those of states that allow such 
shipping, because ordering and distribution practices, such as the 
extent of training for couriers, may differ.

    (c) Why does the FTC on its Internet site have information warning 
about Internet gambling and its negative affect on children?
    Answer. The FTC Internet site contains two pages regarding Internet 
gambling. These sites are characteristic of the FTC's broad consumer 
education program, which provides consumers with information about 
issues of concern. The sites warn parents that many Internet game 
operators operate from servers outside the U.S.--beyond the 
jurisdiction of state or Federal regulations. The sites warn that 
minors who gamble online can lose money, ruin a good credit rating, and 
become addicted. They further warn that gambling sites do not pay out 
to minors. See FTC website, http://www.ftc.gov/bcp/conline/pubs/alerts/
olgamble.htm; http://www.ftc.gov/opa
/2002/06/onlinegambling.htm.

    (d) In light of the fact that the FTC feels Internet gambling is 
dangerous for children, why does the FTC believe that Internet sales of 
alcohol to minors is not dangerous to children? Isn't alcohol a greater 
real danger to children than gambling?
    Answer. The FTC has consistently reported that alcohol consumption 
poses significant dangers to minors. As discussed in the Report,
    Much of the public debate surrounding online sales focuses on the 
problem of underage drinking. In 2002, approximately 20 percent of 
eighth graders, 35 percent of tenth graders, and 49 percent of twelfth 
graders reported that they had used alcohol one or more times within 
the previous thirty days. . . . Alcohol use imposes significant costs, 
in both human and economic terms. Although the numbers are very 
difficult to quantify, one study estimated that, in 1996, the total 
cost of underage drinking--including traffic crashes, violent crime, 
burns, drowning, suicide attempts, fetal alcohol syndrome, alcohol 
poisoning, and treatment--was $52.8 billion.
    See Report at 15. See also FTC, Alcohol Marketing and Advertising 
(2003) at 1.
    There are meaningful differences between online gambling and online 
wine sales. In the case of Internet gambling, the entire transaction 
occurs online, the injury is completed without the intervention of any 
gatekeeper, and the activity often falls outside the effective 
jurisdiction of state and Federal operators. In contrast, online 
alcohol sales are not completed until the product is delivered to the 
home, and the delivery company thus plays a role analogous to the 
retail clerk, serving as a gatekeeper to ensure that an adult receives 
delivery. Moreover, operators of alcohol Internet sites are licensed 
entities subject to Federal and state law enforcement penalties in the 
event of illegal conduct. There are, therefore, important protections 
and effective avenues of enforcement should violations occur.
    Finally, the available evidence suggests that retail sales to 
minors of all alcohols pose a much greater problem than online sales of 
wine. Several state officials opined that minors are more interested in 
beer and spirits than wine. New Hampshire concluded that minors are 
less likely to purchase wine online because of the extra expense of 
ordering over the Internet. These conclusions correspond with the 
McLean study, which found that when transportation costs are included, 
lower-end wines are more expensive when purchased over the Internet 
than through the three-tier system. Minors would have to pay a hefty 
premium, from 33-83 percent, to purchase a bottle of wine costing less 
than $20 online and have it delivered to them via 2nd Day Air.
    Similarly, several state officials commented that, based on their 
experience, minors were much more likely to buy alcohol through offline 
sources than over the Internet. As discussed in the written testimony, 
in a 2002 survey, large percentages of high school students, from 68-95 
percent, said that it is ``fairly easy'' or ``very easy'' to get 
alcohol. In examining offline and online stings, there are not enough 
data from which to conclude that minors can buy wine more easily or 
less easily online than offline (among other reasons, there is far more 
sting data about offline sales). Theoretically, either channel could be 
more accessible to minors. In the absence of empirical information, it 
is difficult to ascertain whether online wine sellers are, or would be, 
a significant source of alcohol for minors.

    (e) In light of the information reported in media and other sting 
operations clearly demonstrating that common carriers often do not 
properly ascertain that the recipient of packages containing alcohol is 
of legal age; and that carriers sometimes leave packages containing 
alcohol are left at the doorstep of mailing addresses without any 
attempt to obtain proper identification, why does the FTC believe that 
common carriers can be relied upon to carry out the function of 
properly delivering alcohol by checking the identification of the 
package recipients?
    Answer. Although there is some anecdotal information, there is no 
systematic empirical data revealing how often couriers obtain a valid 
adult signature. Both UPS and FedEx, however, have adopted policies 
that require their couriers to obtain adult signatures. Courts have 
suggested that states could develop statutory systems that would impose 
similar requirements on package delivery companies as on retail stores. 
One court concluded that ``[t]here is no practical difference from 
requiring such a procedure and that required of store clerks or 
bartenders who regularly check customers for valid identification to 
verify age before allowing the sale of alcoholic beverages.'' For 
instance, Michigan requires that retailers make a ``diligent inquiry'' 
to verify a customer's age, such as by examining a picture 
identification. States could impose similar requirements on delivery 
personnel, including training requirements, along with appropriate 
penalties. In Illinois, for example, package delivery companies ``may 
face business or criminal offenses for failure to report [alcohol 
shipments] to the [Illinois Department of Revenue].'' Many states go 
beyond verification and require that package delivery companies obtain 
an adult signature at the point of delivery. Moreover, in New 
Hampshire, the carrier ``is required to forward to the NH Liquor 
Commission on a monthly basis signature information.'' For these 
reasons, package delivery companies have legal incentives to check the 
identification of package recipients. The Report recommends that states 
develop penalty and enforcement systems to provide incentives for both 
out-of-state suppliers and package delivery companies to comply with 
the law. Such systems would be less restrictive than an outright ban on 
interstate direct shipping. See Report, pp. 29, 40. Notably, the 
National Academy of Sciences largely agrees with this position.

    (f) In light of the fact that the Tax and Trade Bureau has never 
taken a single license away from a winery, [in the face of voluminous 
evidence of violations from the Michigan Attorney General's office, for 
example], why does the FTC believe that the Tax and Trade Bureau can be 
relied upon as a caution to those shipping alcohol illegally?
    Answer. TTB, which has the authority to revoke a winery's basic 
permit, has stated that it will assist states in combating significant 
violations of state law:

        ATF [now TTB] could under appropriate circumstances take 
        administrative action against a basic permit where a basic 
        permittee ships alcohol beverage products into a state in 
        violation of the laws of that state. . . . ATF will respond to 
        an official state request for assistance only where a written 
        determination has been made by the chief administrative officer 
        of the state liquor enforcement agency or the State Attorney 
        General that the conduct violates state law and ATF has 
        independently determined that the state law violation has some 
        pronounced impact on the regulatory and/or criminal enforcement 
        scheme of the state in question. That is, ATF will evaluate the 
        conduct in question in relation to the proper exercise of its 
        Federal authority over matters that necessitate Federal 
        intervention.

    See Report, pp. 30-31. FTC staff is not aware of whether the 
circumstances for TTB's involvement, as outlined by TTB, have ever been 
met, i.e., whether any state has ever made an ``official state request 
for assistance,'' whether there has ever been a ``written determination 
. . . by the chief administrative officer of the state liquor 
enforcement agency or the State Attorney General that the conduct 
violates state law,'' or whether TTB has ever ``independently 
determined that the state law violation has some pronounced impact on 
the regulatory and/or criminal enforcement scheme of the state in 
question.'' Indeed, Michigan officials told FTC staff that they have 
never attempted to use the Twenty-First Amendment Enforcement Act 
against out-of-state shippers. See Report, p. 39 n.170. Some states may 
not turn to TTB; for example, New Hampshire works with out-of-state 
suppliers that may be violating the law:

        [T]he State of New Hampshire Liquor Commission collects an 8 
        percent fee on all shipments into the State of New Hampshire. 
        When the NH Liquor Commission discovers an improper shipment we 
        contact the company and inform them of the laws in NH. Once the 
        company learns of NH laws they normally get a permit or stop 
        shipping into NH. The NH Liquor Commission is working with out-
        of-state supplier[s] and encouraging them to obtain a permit.

    See Report, p. 38.

    Question 5. What would be the response of the FTC be to a mother of 
a teen who ordered wine over the Internet, who had the wine delivered 
to his door or didn't have his ID checked, and ended up getting hurt in 
a drunk driving accident? How would the FTC characterize the alleged 
safeguards in place in this circumstance?
    Answer. The FTC has consistently reported that alcohol consumption 
poses significant dangers to minors. See Report at 15; FTC, Alcohol 
Marketing and Advertising (2003) at 1. Unfortunately, safeguards 
sometimes fail for both online and offline sales. For example, bricks-
and-mortar stings typically find that minors are able to buy alcohol 
between 15-30 percent of the time. In Michigan, minors were able to buy 
alcohol 55 percent of the time after showing a valid Michigan license 
that identified the customer as a minor. See Report, p. 35.

    Question 6. How would the safeguards against minors' access to 
alcohol espoused by the FTC have prevented deliveries of alcohol from 
being made in the following cases:
    (a) The teen in the alcohol rehabilitation facility in Michigan who 
successfully ordered 2 separate cases of bourbon, and had them 
delivered to him in the rehabilitation facility?

    (b) The teen that successfully ordered a bottle of wine delivered 
to him in the South Dakota state capitol?

    (c) A 15-year-old who used his own credit card to successfully 
order bottles of tequila, and had the package left on his doorstep [no 
I.D. check] in a state that prohibits such shipments regardless of 
consumer age?

    (d) An 11-year-old boy who successfully accepted delivery from a 
common carrier of a bottle of wine in a box clearly marked ``wine'' and 
labeled to require an adult signature?

    (e) The sale and delivery of beer to a 17-year-old in Alabama from 
a company in Illinois?

    (f) The shipment of beer to a minor in the Missouri Attorney 
General's office?
    Answer. Some states have applied the same types of safeguards to 
online sales that already apply to bricks-and-mortar retailers, such as 
requirements that package delivery companies obtain an adult signature 
at the time of delivery. Some states also have developed penalty and 
enforcement systems to provide incentives for both out-of-state 
suppliers and package delivery companies to comply with the law. These 
states generally report few or no problems with shipments to minors, 
although no safeguards are foolproof.

    Question 7. What system of safeguards is the FTC aware of that 
would prevent the foregoing incidents listed in Question 6 a-f from 
happening in the future?
    Answer. As an alternative to banning interstate direct shipment of 
wine, some states have adopted less restrictive means to satisfy their 
regulatory objectives. For example, some states register out-of-state 
suppliers and impose various civil and criminal penalties against 
violators. Several states, including Nebraska, New Hampshire, and 
Wyoming, require out-of-state suppliers to register and obtain permits 
(a permit can be conditioned on the out-of-state supplier's consent to 
submit to the state's jurisdiction). None of these states reported 
problems with interstate direct shipping to minors. In addition, many 
states require an adult signature at the point of delivery, and several 
Federal courts have suggested that labeling requirements could be 
effective regulatory tools. See Report, pp. 27-31.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. George Allen to 
                            Deborah Majoras
    Question 1. During his tenure, Chairman Muris noted that there is a 
growing need in the Federal Trade Commission's competition matters to 
address issues involving the intersection of antitrust law and patent 
law. He noted that a particular priority in that area was addressing 
the problem of patent owners abusing standard setting processes to the 
detriment of competitors and consumers. Standard setting activities 
obviously play a critical role in products across many different 
industries and can greatly benefit consumers. Given that importance, 
the Commission has brought a number of cases to remedy abuses of the 
standard setting process.
    a. As Chair of the Commission (or as a Commissioner), do you intend 
to continue with those important efforts?
    Answer. Yes, if confirmed, I do intend to continue with those 
important efforts. Case selection, of course, involves a careful 
consideration of the facts and the economic consequences of particular 
standard setting-related activity, as well as relevant law. I believe 
that the Commission should challenge standard setting-related activity 
that appears likely to impose substantial harm on consumers and lacks 
countervailing efficiency benefits.

    b. Do you agree that manipulation of the standard setting process 
is a legitimate and important area for antitrust enforcement? Why?
    Answer. Yes, I agree that manipulation of the standard setting 
process is a legitimate and important area for antitrust enforcement. 
While standard setting can greatly benefit consumers, it also can be 
used as a vehicle for collusion and anticompetitive deception. 
Manipulation of the process by an IP holder may lead a standard setting 
organization to favor or disfavor particular technologies for reasons 
other than cost, efficiency, and technical suitability, with consequent 
harm to competition and consumers.

    Question 2. As you know, the Commission plays a critical role in 
considering the appeal of an initial decision by an administrative law 
judge. Importantly, the Commission reviews all of the evidence, 
arguments, and legal issues from the case. What will you do to ensure 
that, with respect to appeals, the Commission very carefully and 
thoroughly investigates and considers all of the evidence and issues in 
reaching well-reasoned decisions?
    Answer. If confirmed, I will carefully evaluate the record to 
ensure that a final Commission decision rests on a solid basis of law 
and fact. Although I believe the Commission should be respectful of the 
factual findings and legal holdings made by the administrative law 
judge, the Commission has the responsibility to evaluate these findings 
and holdings in light of its own independent review of the record and 
its own independent legal analysis. The Commission should displace the 
administrative law judge's initial factual and legal determinations 
when it finds that those determinations are not borne out by the record 
or by sound application of legal principles.

    Question 3. In 2002, the Department of Justice and the Federal 
Trade Commission held joint hearings that focused on the implications 
of competition and patent law and policy for innovation and other 
aspects of consumer welfare. In October 2003, the Federal Trade 
Commission issued a report with views on how to promote innovation by 
finding the proper balance of competition and patent law and policy. In 
the October report, the Federal Trade Commission proposed ten 
legislative and regulatory changes to improve patent quality.
    a. Do you support the important recommendations discussed in the 
report?
    Answer. The FTC's October 2003 report on the proper balance of 
competition and patent law and policy addresses significant issues for 
the future of innovation in our Nation. Both competition and patents 
can spur innovation, and policymakers must strike a proper balance 
between them in implementing antitrust and patent law. Among other 
things, the FTC report discusses significant concerns about patent 
quality raised by many members of the patent community, including 
companies that hold patents and depend on strong patent protection for 
continued success. The report points out that strong patent protection 
requires valid, not questionable, patents, and recommends certain 
changes to improve patent quality.
    The FTC's ten recommendations have received a great deal of 
attention since issuance of the report. The American Intellectual 
Property Law Association has issued a Response to the FTC's report, 
which includes some of its own proposals to improve patent quality. In 
April, the National Academy of Sciences (NAS) issued its own report, 
``A Patent System for the 21st Century,'' which also makes 
recommendations to improve patent quality. Many of the NAS 
recommendations are similar to those of the FTC; some are not.
    I support the ten recommendations in the FTC report. Nonetheless, 
in light of the many different recommendations for patent reform that 
are now being discussed, I am also open to considering other 
alternative or additional means to improve patent quality. If 
confirmed, I look forward to participating in the dialogue that is 
developing in this area.

    b. At the time of the report, Chairman Muris outlined steps that 
the FTC would take to increase communication and cooperation between 
antitrust agencies and patent institutions and steps toward 
implementation of the recommendations in the report. Do you intend to 
continue and support those important efforts?
    Answer. Yes, I do. I believe that it is important for the antitrust 
and patent communities and institutions to build on the communication 
that has begun, so that we can better support and promote innovation in 
the United States.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                            Deborah Majoras
    Question 1. As Chairwoman, do you have any plans to fix the problem 
with machine testing of cigarette tar and nicotine levels?
    Answer. Fighting unfair and deceptive advertising is one of the 
FTC's most important jobs, and this is particularly true for products 
like tobacco that harm consumer health. I understand that there are 
longstanding concerns that the tar and nicotine ratings generated by 
the so called FTC test method do not provide smokers with accurate 
information about the amount of these substances that they will receive 
from any particular cigarette. I further understand that the FTC, 
recognizing the complex scientific issues raised by designing a new 
testing procedure, has sought the Department of Health and Human 
Services' assistance in determining whether a testing system should be 
maintained and, if so, what specific changes should be made to it.
    As a first step in HHS's response to the Commission's request for 
assistance, the National Cancer Institute issued a monograph entitled, 
``Risks Associated with Smoking Cigarettes with Low Machine-Measured 
Yields of Tar and Nicotine.''
    If confirmed, I will certainly review the status of this effort 
when I arrive, and continue to work with HHS to determine what changes 
are necessary to fix the current testing system. Moreover, I note that 
the Commission has in the past recommended that responsibility for the 
cigarette testing method be moved to a science-based agency. 
Legislation currently pending in both the House and Senate would 
accomplish that result.

    Question 2. For years the FTC tried to stop the now infamous Joe 
Camel ads that targeted youth. Now Kool brand cigarettes is running a 
``Kool Mixx'' marketing campaign targeting African American teenagers. 
Do you anticipate taking any action on these Kool Mixx ads?
    Answer. As you know, the 1998 Master Settlement Agreement (``MSA'') 
between the major cigarette manufacturers and 46 states specifically 
prohibits any tobacco advertising, marketing or promotion that targets 
youth and bans the use of any cartoon character (including the use of 
``Joe Camel'') in tobacco advertising marketing and promotion. I 
understand that, in March 2004, Maine's Attorney General wrote to Brown 
& Williamson warning that the company's use of a hip-hop theme to 
promote Kool cigarettes (including special packs with images of DJs and 
dancers) was likely a violation of the MSA. I further understand that 
Brown & Williamson subsequently discontinued the packaging and certain 
related advertising and promotions. I know that the Commission staff 
continues to monitor cigarette advertising issues and coordinates with 
the states on questions of youth targeting by companies subject to the 
MSA, given the specific prohibitions that exist under that agreement. 
If confirmed, I will review the status of these efforts and ensure that 
the FTC remains vigilant as to youth targeting.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                             Jon Leibowitz
    Question 1. Please explain how if confirmed, 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.
    Answer. I am a strong believer in Congressional oversight and 
making certain that agencies follow Congressional intent, and I will 
always be available to the Committee and its staff regarding any 
concerns you may have. Beyond that, my understanding is that the 
Commission has long had a regulatory review program that provides for 
periodic review of its rules and guides. To my mind, this is a good way 
to assess existing regulations and ensure that they continue to 
implement effectively the spirit of the law. With respect to new rules, 
I will carefully consider the laws entrusted to the Commission and work 
to ensure that any rules I vote on embody the intent of the Congress in 
enacting them. In the rulemaking process I will be open to input in the 
record from all parties including, of course, Congress.

    Question 2. The Chief Financial Officers Act requires all 
government departments and agencies to develop sound financial 
management practices.
    (a) What do you believe are your responsibilities, if confirmed, to 
ensure that your department/agency has proper management and accounting 
controls?
    Answer. My responsibility as a Commissioner of the FTC would be to 
work with the Chairman and other Commissioners to ensure that the 
agency has proper management and accounting controls. Ensuring 
effective management starts with the senior management. It is important 
to demonstrate to agency managers that management of their staff and 
programs is a critical aspect of their job. Agency executives and 
managers must understand that they will be held accountable for 
managing effectively apart from the substantive productivity they may 
achieve in the short run. Simply put, program performance cannot be 
sustained in an organization that is not well managed, and I will do my 
best to ensure proper management at the Commission.

    (b) What experience do you have in managing a large organization?
    Answer. I do not have experience managing an organization the size 
of the FTC. My management experience in smaller organizations has, 
however, given me good grounding in the fundamentals of managing a 
complex, important enterprise. I believe that experience with the areas 
of the Commission's responsibilities, especially my work on consumer 
protection and antitrust issues in the Senate, will help me to 
contribute to preserving and extending the agency's mandate.

    Question 3. 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) What benefits, if any, do you see in identifying performance 
goals and reporting on progress in achieving those goals?
    Answer. Identifying performance goals is a useful discipline for 
any organization, especially in the public sector. The process of 
developing goals requires the organization to assess its objectives and 
resources and to articulate clearly what it must accomplish. This also 
allows the public and the agency itself to understand what ends must be 
sought. Periodic reporting on progress toward the stated goals provides 
a useful discipline for the agency. Knowing that progress must be 
reported is a strong incentive for the organization to accomplish what 
it has set out to do. Both the Congress and other stakeholders, 
including the public, can then more easily provide input to the agency 
on whether the stated goals are appropriate as well as whether they 
have been met.

    (b) What steps should Congress consider taking when a department/
agency fails to achieve its performance goals? Should these steps 
include the elimination, privatization, downsizing, or consolidation of 
departments and/or programs?
    Answer. Congress should assess the reasons why an agency fails to 
achieve its performance goals. Depending on the particular reasons an 
agency does not meet it's stated objectives, a variety of Congressional 
responses might be warranted, including the steps mentioned in the 
question. Eliminating an agency would be an appropriate response, but 
only where Congress found that the original stated objectives were no 
longer valid or were not reasonably attainable by the government.

    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    Answer. For myself, the primary performance goal will be to work 
with the Chairman and the other Commissioners to continue and to 
strengthen the agency's ability to protect consumers. My first steps 
will include reviewing the current enforcement agenda, learning more 
about the details of FTC operations, and forging an effective working 
relationship with my colleagues.

    Question 4. Please explain what you believe to be the proper 
relationship between yourself, if confirmed, and the Inspector General 
of your department/agency.
    Answer. The proper relationship is one of mutual respect as well as 
a recognition of the important independent functions of the Inspector 
General. The Inspector General can provide useful mechanisms for 
stopping waste, fraud and abuse in an agency or at the Commission--and 
can be important in keeping the Commissioners as well as Congress fully 
informed about any problems. I would seek to develop a professional and 
working relationship with the FTC Inspector General and support the 
important mission that he or she fulfills.

    Question 5. Within your area of control, will you pledge to develop 
and implement a system that allocates discretionary spending in an open 
manner through a set of fair and objective established criteria? If 
yes, please explain what steps you intend to take and a time frame for 
their implementation. If not, please explain why.
    Answer. While I don't think that the Federal Trade Commission has 
the type of discretionary spending authority that the question 
contemplates, the Commission does have some discretion in allocating 
its resources among its missions and programs. If confirmed, I will 
participate vigorously in the Commission's budget deliberations with an 
eye towards ensuring that resources are allocated in a manner that 
carries out the agency's mandates in the most effective ways.

    Question 6. Describe the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated.
    Answer. The FTC serves two primary missions. First, it seeks to 
promote competition in the marketplace by enforcing Federal antitrust 
laws and other statutes designed to promote competition and halt anti-
competitive business practices. Second, it seeks to protect consumers 
by ensuring fair, accurate and non-deceptive information in the 
marketplace, and by preventing unfair, deceptive or intrusive 
practices, for example, spamming or certain types of telephone 
marketing. In my view, however, the Commission's twin missions of 
competition promotion and consumer protection serve a common aim: 
enhancing consumer welfare.

    Question 7. What do you believe are the top three challenges facing 
the department/agency and why?
    Answer. As a mere nominee to the Federal Trade Commission, as 
opposed to a sitting Commissioner, it is difficult to quantify the 
three largest challenges to the agency. Having said that, I will 
identify what I believe to be several important ones:

  (1)  Challenges caused by new technologies; for example, how far 
        should the Commission go [and how far can it go under existing 
        laws] to protect the privacy rights of consumers? In 
        particular, the Commission faces the task of effectively 
        implementing the new spam law as well as confronting the issues 
        posed by spyware and adware.

  (2)  Challenges resulting from the increased globalization of 
        commerce, which raise a myriad of policy and process matters 
        with respect to both the agency's antitrust and consumer 
        protection missions.

  (3)  Challenges driven by additional obligations on the Commission, 
        i.e., new laws it enforces, additional rulemakings, etc., etc. 
        Simply put, how does the Commission ensure that that the 
        quality of its work is not strained by the quantity of demands 
        placed upon it.

    Question 8. What factors in your opinion have kept the department/
agency from achieving its missions over the past several years?
    Answer. This question implies that the Commission has failed in its 
mission in recent years. In the case of the FTC, I am not sure that 
assumption is accurate. During the past several decades the 
Commission's stature as ``an agency that works'' seems to have grown 
consistently even as it has confronted a whole host of new and 
unforeseen policy problems.

    Question 9. Please discuss your philosophical views on the role of 
government.
    Answer. The United States, I believe, has the strongest and most 
open markets in the world, ones that operate freely and competitively. 
For the most part, this serves the American people well: competition 
pushes producers to offer the greatest amount of choice at the lowest 
prices to consumers. Having said that, sometimes even the most 
competitive markets fail to work the way as we would like them to at 
all times. Criminals will always try to defraud those unable to defend 
themselves; businesses will occasionally cross the line into anti-
competitive conduct. Of course, free enterprise does not mean a system 
without rules. For these reasons, well crafted regulatory institutions 
such as the FTC, which ensure that markets are vigorous, efficient and 
free from unnecessary restrictions and fraud, are vitally important to 
enhancing consumer welfare and maintaining faith in our system of 
government.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Sam Brownback to 
                             Jon Leibowitz
Marketing of Sexual Content to Children
    Question. In response to the letter sent asking the FTC to look at 
whether the movie, music, recording and computer and video game 
industries target minors with sexual material, I was informed that the 
FTC already took some steps to examine that issue in their latest 
follow-up to the 2002 report that will be released shortly. I look 
forward to reviewing that report. In the meantime, it appears from the 
FTC's response that the incorporated analysis of the sexual content was 
mostly as it occurred alongside violent material. Would you support a 
greater effort to focus on the marketing of all sexual material to 
minors? Would you support a separate study? What steps would you take 
to improve the research on the marketing of sexual content to minors?
    Answer. I have been a strong believer in the FTC's periodic reviews 
of the entertainment industries' marketing practices ever since I 
worked on this issue as a staffer for Senator Kohl. Simply put, 
companies should not market to children any products that they 
themselves deem inappropriate for such age ranges. While not privy to 
the exchange of letters between your office and the FTC, I am told that 
the Commission's ``Marketing of Violent Entertainment'' Reports--there 
have been four since September 2000 with another expected by the end of 
the month--do to some extent incorporate analysis of sexual material 
into its investigations of violent content. If I am fortunate enough to 
be confirmed, I would be happy to look into whether (and how 
extensively) sexual content is incorporated into the Commission's 
periodic reviews of the entertainment industry and to work with the 
Chairman and other Commissioners on whether such reviews can be made 
more effective; to encourage continuation of the Commission's 
``undercover shopper'' survey (in which young teens attempt to buy 
materials rated for adults or older children); and to meet with you (or 
your staff) to discuss this matter at any time. Finally, to the extent 
that these FTC reviews are to some extent now governed by language in 
the appropriations bills, I would of course carry out the intent of 
Congress if a separate study on sexual content is mandated.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Ensign to 
                             Jon Leibowitz
    Question not submitted in record.
    Answer. Pursuant to my discussions with Committee staff and the 
staff of Senator Ensign, I will respond to these questions generally. 
As I understand it, last year the Commission staff issued a Report 
relating to on-line sales of wine (``the Wine Report''). The Wine 
Report examined barriers to e-commerce in the wine industry, 
principally bans on direct interstate shipping of wine, and concluded 
that consumers could often save money by purchasing wine via the 
Internet. I recognize that there are questions about the Report's 
methodology, which compared on line wine prices only to those in 
McLean, Virginia; acknowledged but perhaps did not focus adequately on 
the issue of lost tax revenues; and according to some may have glossed 
over the serious and potentially tragic consequences of easier access 
to alcohol by minors through on-line sales.
    I have not yet had an opportunity to speak in detail with the FTC 
staffers who wrote the Wine Report nor with critics of that Report. If 
I am fortunate enough to be confirmed, however, I promise to meet with 
both the Report's supporters as well as its detractors, and to review 
the entire issue. I also understand that the Supreme Court expects to 
hear arguments on the matter of on-line wine sales sometime next fall, 
which may bring some legal (and policy) clarity to the area. And I am 
of course available to meet with you, Senator Ensign (or your staff), 
about this or any other matter relating to the Commission.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. George Allen to 
                             Jon Leibowitz
    Question 1. During his tenure, Chairman Muris noted that there is a 
growing need in the Federal Trade Commission's competition matters to 
address issues involving the intersection of antitrust law and patent 
law. He noted that a particular priority in that area was addressing 
the problem of patent owners abusing standard setting processes to the 
detriment of competitors and consumers. Standard setting activities 
obviously play a critical role in products across many different 
industries and can greatly benefit consumers. Given that importance, 
the Commission has brought a number of cases to remedy abuses of the 
standard setting process.
    a. As chair of the Commission (or as a Commissioner), do you intend 
to continue with those important efforts?
    Answer. Yes.

    b. Do you agree that manipulation of the standard setting process 
is a legitimate and important area for antitrust enforcement? Why?
    Answer. This is not just a legitimate area for antitrust 
enforcement, it is also a crucial area for competition policy. To be 
sure, standard setting may often confer economic efficiencies and other 
benefits; indeed, a bill reducing antitrust exposure for certain 
standard-setting organizations recently passed both the House and the 
Senate. Having said that, manipulating or subverting the standard 
setting process--for example, by failing to acknowledge that certain 
standards would require use of a particular company's patents--
disadvantages competitors, harms consumers and ultimately undermines 
faith in the marketplace.

    Question 2. As you know, the Commission plays a critical role in 
considering the appeal of an initial decision by an administrative law 
judge. Importantly, the Commission reviews all of the evidence, 
arguments, and legal issues from the case. What will you do to ensure 
that, with respect to appeals, the Commission very carefully and 
thoroughly investigates and considers all of the evidence and issues in 
reaching well-reasoned decisions?
    Answer. I will familiarize myself with the briefs and opinions, 
listen to all sides and follow the appropriate procedures and standards 
for review.

    Question 3. In 2002, the Department of Justice and the Federal 
Trade Commission held joint hearings that focused on the implications 
of competition and patent law and policy for innovation and other 
aspects of consumer welfare. In October 2003, the Federal Trade 
Commission issued a report with views on how to promote innovation by 
finding the proper balance of competition and patent law and policy. In 
the October report, the Federal Trade Commission proposed ten 
legislative and regulatory changes to improve patent quality.
    a. Do you support the important recommendations discussed in the 
report?
    Answer. I strongly agree with the Report's conclusions: (1) that 
although most of the patent system works well, some modifications are 
probably needed to maintain a proper balance of competition and patent 
law and policy; and (2) that questionable patents are a significant 
competitive concern and can harm innovation. I also believe that the 
Report, which was preceded by 24 days of hearings and involved more 
than 300 panelists, is exactly the type of useful, thought-provoking 
undertaking that the Commission should be engaging in. As to the 
individual recommendations, which range from enacting legislation to 
changing PTO rules to altering the legal standard for challenging the 
validity of a patent, for the most part they appear sensible but I do 
not currently have sufficient information to go beyond that. If I am 
fortunate enough to be confirmed, however, I will push to ensure that 
the Commission continues to make the area of patent law and competition 
policy a priority.

    b. At the time of the report, Chairman Muris outlined steps that 
the FTC would take to increase communication and cooperation between 
antitrust agencies and patent institutions and steps toward 
implementation of the recommendations in the report. Do you intend to 
continue and support those important efforts?
    Answer. Yes.

                                  

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