[Senate Hearing 108-270]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-270

DETERIORATING BUILDINGS AND WASTED OPPORTUNITIES: THE NEED FOR FEDERAL 
                          REAL PROPERTY REFORM

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

                                HEARING

                               before the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 1, 2003

                               __________

      Printed for the use of the Committee on Governmental Affairs



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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
                        James R. McKay, Counsel
                       Johanna L. Hardy, Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
         Donny R. Williams, Minority Professional Staff Member
                      Amy B. Newhouse, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Bennett..............................................    16
    Senator Coleman..............................................    25
    Senator Carper...............................................    26
Prepared statement:
    Senator Lautenberg...........................................    31

                               WITNESSES
                       Wednesday, October 1, 2003

Hon. David M. Walker, Comptroller, U.S. General Accounting Office     3
Johanna L. Hardy, Senior Counsel, Committee on Governmental 
  Affairs........................................................     9
James R. McKay, Counsel, Committee on Governmental Affairs.......    10
William C. Stamper, Deputy Assistant Secretary for Facilities 
  Management and Policy, U.S. Department of Health and Human 
  Services.......................................................    17
Martha B. Knisley, Director, Department of Mental Health, 
  Government of the District of Columbia, accompanied by David 
  Norman, Acting General Counsel, Department of Mental Health....    20

                     Alphabetical List of Witnesses

Hardy, Johanna L.:
    Testimony....................................................     9
    Prepared Statement...........................................    64
Knisley, Martha B.:
    Testimony....................................................    20
    Prepared Statement...........................................    77
McKay, James R.:
    Testimony....................................................    10
    Prepared Statement...........................................    65
Stamper, William C.:
    Testimony....................................................    17
    Prepared Statement...........................................    67
Walker, Hon. David H.:
    Testimony....................................................     3
    Prepared Statement...........................................    32

                                Appendix

Letter from William C. Stamper, dated Novermber 12, 2003, in 
  response to an article in The Washington Post..................    82
Powerpoint presentation by Mr. McKay and Ms. Hardy consisting of 
  photographs of the West Campus.................................    83

 
DETERIORATING BUILDINGS AND WASTED OPPORTUNITIES: THE NEED FOR FEDERAL 
                          REAL PROPERTY REFORM

                              ----------                              


                       WEDNESDAY, OCTOBER 1, 2003

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:32 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Committee, presiding.
    Present: Senators Collins, Bennett, Coleman, and Carper.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will come to order.
    Good morning. Today the Committee on Governmental Affairs 
will examine the challenges the Federal Government faces in 
managing its real property. The government's real property 
assets are worth an estimated $328 billion and include more 
than 3 billion square feet of building space.
    Some of the government's assets are historically 
significant and valuable yet deteriorating and rundown. In 
January of this year, the General Accounting Office added 
Federal real property to its High-Risk List. The High-Risk List 
is reserved for programs that are particularly vulnerable to 
waste, fraud, abuse, or mismanagement.
    The GAO's work in this area has shown that the Federal 
portfolio is in an alarming state of deterioration, in large 
part because of the Federal Government's ineffective management 
of these assets.
    The Federal Government also has considerable property that 
it no longer needs. Just weeks ago, the General Accounting 
Office released a report identifying 600 vacant properties and 
327 underutilized properties owned by just three agencies--the 
General Services Administration, the Department of Veterans' 
Affairs, and the U.S. Postal Service.
    These 927 properties represent more than 2,000 acres and 
32.1 million square feet of vacant or underutilized space. By 
way of comparison, the Pentagon consists of approximately 3.7 
million square feet of office space. This means that the GSA 
alone currently possesses the equivalent of almost five 
Pentagons' worth of vacant or underutilized space, which is 
costly to maintain and could be put to better use. We can and 
must do better.
    To see an example of underutilized Federal property, the 
Committee staff visited the L. Mendel Rivers Federal Building 
in South Carolina. It has sat vacant since it was damaged in a 
hurricane in 1999, despite the fact that it is located on 
valuable property on the edge of downtown Charleston.
    Another example of underutilized Federal property is right 
down Pennsylvania Avenue. Due to government inaction, the Old 
Post Office Pavilion Annex has been empty for more than 10 
years.
    Adding insult to injury, the Federal Government spends 
considerable money to maintain this empty space. This is 
government waste, plain and simple.
    Today I have asked David Walker, the Comptroller General of 
the General Accounting Office, to report to this Committee on 
the longstanding challenges facing the Federal Government in 
this area. Federal property is, after all, the property of the 
American people.
    A disturbing example of the mismanagement of taxpayers' 
property can be found right in the Capitol's backyard. St. 
Elizabeths Hospital was founded in 1855 to provide for the 
treatment of individuals suffering from mental illness. This 
hospital served as the first and only national Federal mental 
health facility. At its height in the early to mid-1960's, St. 
Elizabeths had almost 4,000 employees who cared for 
approximately 7,000 patients.
    The deterioration of the West Campus of St. Elizabeths is a 
particularly tragic example of how the Federal Government's 
mismanagement of its real property can result in massive waste 
of taxpayer dollars.
    This hearing will examine how this once elegant, thriving 
Federal property has deteriorated to the point that it could 
cost nearly $500 million to rehabilitate its buildings.
    Many people mistakenly believe that St. Elizabeths is owned 
by the District of Columbia. In fact, that is only half right. 
St. Elizabeths is fairly equally divided between an East and 
West Campus, the former of which was given to the District of 
Columbia by an act of Congress in 1984. The 182-acre West 
Campus is still owned by the Department of Health and Human 
Services but is currently occupied by the D.C. Department of 
Mental Health under a use permit signed in 1987. As a result, 
HHS and the D.C. Government share responsibility for its 
deplorable condition.
    Although the D.C. Government by agreement was responsible 
for the upkeep of St. Elizabeths, HHS as owner and landlord 
should never have allowed St. Elizabeths to reach such a 
deteriorated state.
    The poor oversight of St. Elizabeths by both HHS and the 
D.C. Government is inexcusable. What was a valuable asset in 
the mid-1980's today is a massive liability.
    I have visited this historic property, and its condition is 
truly deplorable. The Committee staff have documented the 
extent of damage resulting from the neglect of this property 
and will be presenting the results of that investigation at our 
hearing today. I have also asked witnesses from the Department 
of Health and Human Services and the D.C. Government to testify 
today about the management of St. Elizabeths.
    Although St. Elizabeths Hospital may be an extreme example 
of mismanagement of federally-owned property, it is not an 
isolated case. If a 182-acre historic landmark just 2 miles 
away from the Capitol can be so mismanaged, what confidence can 
we have that thousands of other Federal buildings scattered 
across the country are being managed effectively, efficiently, 
and properly to preserve their value and to ensure their best 
use.
    I look forward to hearing the testimony of all our 
witnesses today as we tackle this issue.
    As our first witness, I am very pleased to welcome back to 
the Committee the Hon. David M. Walker, Comptroller General of 
the General Accounting Office. Since assuming this 
responsibility on November 9, 1998, Mr. Walker has done an 
outstanding job as the Nation's chief accountability officer. 
He has been a leader in improving the performance of the 
Federal Government on behalf of the American taxpayer. This 
Committee works very closely with Mr. Walker and with the GAO 
on a wide variety of projects.
    When Federal real property management was added to the 
GAO's High-Risk List, I talked with Mr. Walker about working 
with the Committee so that we do not keep adding programs and 
agencies to the High-Risk List but actually try to identify the 
problems that land them on the list and the steps that could be 
taken to get them off the list.
    So it is a pleasure to welcome Mr. Walker here today. You 
may proceed.

TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL, U.S. 
                   GENERAL ACCOUNTING OFFICE

    Mr. Walker. Thank you, Madam Chairman. It is a pleasure to 
be back before the Senate Governmental Affairs Committee.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Walker appears in the Appendix on 
page 32.
---------------------------------------------------------------------------
    I would ask that my entire statement be included in the 
record.
    Chairman Collins. Without objection.
    Mr. Walker. Thank you. I will now move to summarize it.
    As you pointed out, Madam Chairman, the GAO added the area 
of real property management to our High-Risk List in January 
2003. This is a major challenge that crosses a number of 
organizational boundaries within the Federal Government. It is 
also a major multidimensional challenge involving billions of 
dollars, with significant budget, safety, security, 
environmental, and economic development implications.
    Much of the government's current infrastructure is based 
upon a 1950's environment and business model. The world has 
changed significantly since then, yet our approach to 
infrastructure has not kept pace. The result--billions in 
excess property that is inadequately maintained and not 
properly secured. Taxpayer dollars are being wasted on 
maintaining excess properties, and asset recoveries are not 
being achieved for the benefit of taxpayers. In addition, there 
are significant opportunity costs associated with the failure 
to act.
    The excess property challenge spans numerous Federal 
agencies, including DOD, the Postal Service, VA, GSA, the DOE, 
and the State Department, just to name a few. Given current and 
projected Federal budget deficits, we cannot afford to maintain 
the status quo in this area.
    We have boards just to illustrate four particular 
properties, and I know that this Committee is going to have a 
number of witnesses after me dealing with this first property, 
which is St. Elizabeths here in the District of Columbia. But 
these four examples are illustrative of a much larger problem.
    The first one is St. Elizabeths Hospital, which is largely 
a vacant property in the District of Columbia which, as you 
noted, a portion of which is owned by the Department of Health 
and Human Services.
    The next one is a vacated postal facility in Chicago, 
Illinois. It is downtown Chicago, Illinois, and yes, that is 
the Sears Tower right down the street, so I would say that 
property is worth a fair amount of money.
    The next one represents an IRS Service Center in Andover, 
Massachusetts up on the left. There is also a significant 
amount of valuable real estate that is underutilized in that 
area.
    And the last one on the bottom right is a property in 
Portland, Oregon.
    These are just four examples of either vacant or 
underutilized properties where we are spending money and we are 
not recovering asset values in circumstances that could be of 
benefit to the taxpayer.
    What are some of the steps that need to be taken in order 
to address this challenge?
    First and foremost, we have to ask the question, who is in 
charge? Who is responsible and accountable for making sure that 
the billions and billions of dollars of vacant and 
underutilized property that the taxpayers own is accounted for 
and managed effectively and for the benefit of the taxpayer? It 
is not clear right now who is in charge. We have individuals 
within the various departments and agencies, but who has been 
charged on a government-wide basis on this issue? It demands 
that somebody be in charge, responsible and accountable on a 
government-wide basis.
    Second, how big is the problem? We need timely, accurate, 
useful information to understand how many vacant and 
underutilized properties we have. We do not have that right 
now. There is no consolidated, government-wide list, it is my 
understanding, and we need additional transparency over that 
list to try to spur people to action.
    Third, we need a plan to rationalize any excess 
infrastructure.
    We also need additional authorities and incentives for 
people to act. In some cases, there is going to have to be 
legislation to give people additional authorities or incentives 
to act, and in some cases, we are going to have to look at our 
scoring rules and who benefits from the savings in order to 
make sure that actions are taken.
    We also need to make sure that there are accountability 
mechanisms in place if people do not act; so incentives to do 
the right thing and accountability mechanisms if they do not do 
the right thing.
    And furthermore, given past history, competing stakeholder 
claims and interests, and a variety of other considerations, we 
may have to employ a government-wide task force or even a BRAC-
type approach in order to rationalize this excess 
infrastructure, because there are a variety of stakeholder 
interests, and we need to look at this on a consolidated basis 
rather than a piecemeal basis in order to try to achieve timely 
action.
    Now, what type of action is it going to take in order to 
get this area off the High-Risk List? There are four general 
factors.
    First, there has to be an overall transformation strategy 
for Federal real property. There needs to be demonstrated 
leadership, attention, and commitment to the strategy and 
meaningful progress toward its implementation.
    Second, there needs to be enactment of real property reform 
legislation to give real property-holding agencies the tools 
that they need to achieve better outcomes, to foster a more 
businesslike real property environment, and to provide for 
greater accountability for real property stewardship.
    Third, there needs to be a successful implementation effort 
of ongoing agency initiatives and adoption of key open GAO 
recommendations, critical ones in the real property area.
    And last but certainly not least, we need to use a set of 
performance measures to assess results and demonstrate 
sustained progress toward solving the larger problem over a 
reasonable period of time--the larger problem meaning the 
excess property, the repair backlogs, poor data, security 
challenges, and over-reliance on leasing. Many times, what is 
happening is we have this excess property or underutilized 
property, yet we are still adding, and sometimes we are 
entering into operating leases because of the budget-scoring 
rules. Specifically, currently you may get better treatment 
under budget-scoring rules and yet it may not be in the best 
economic interest of the taxpayers, because there are other 
methods that clearly would be less costly for the taxpayers; 
yet the way we keep score sometimes causes people to either 
take actions they should not take or not take actions that they 
should take.
    In closing, this subject--real property management--is 
illustrative of one of many transformation challenges the 
Federal Government faces. It is illustrative of a horizontal 
challenge that crosses the various silos or stovepipes in 
government, traditionally known as departments and agencies. 
The base of government programs, policies, processes, 
functions, and operations represents an amalgamation of past 
actions that have taken place over decades. They may have made 
sense and hopefully did make sense initially. However, given 
the profound changes that have occurred in the world, and our 
position in the world, and business practices and technological 
advances, etc., just to name a few, the status quo is clearly 
unacceptable. We have to fundamentally review, reassess, re-
engineer, reprioritize and in some cases eliminate things that 
have accumulated over the years because they may have made 
sense in the past, but they may not make sense today, and they 
may make even less sense in the future.
    We are talking about asking fundamental questions like what 
the Federal Government should do, how it should do business, 
and in some cases, who should do its business. The base is 
unacceptable, the base is unsustainable. The clock is working 
against us. We need to start acting now.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you very much, Mr. Walker, for your 
excellent overview of this problem.
    The Federal Government clearly owns many more properties 
than it needs. In a report that was released in August, the GAO 
found that there were three agencies--the GSA, the VA, and the 
Postal Service--that together held almost 1,000 vacant or 
underutilized properties. Obviously, it is expensive to 
maintain those properties. And as you point out, in some cases, 
we have agencies with vacant buildings leasing space in other 
buildings, so the taxpayer in essence is paying twice.
    Can you explain why there are so many unused properties in 
the Federal inventory? Is it just lack of proper management, or 
is it that the system for disposing of those properties is too 
cumbersome?
    Mr. Walker. I think it is a multidimensional challenge. 
First, there is not adequate accountability. We do not have a 
person or persons who are put on the line, where their 
responsibility is to deal with these issues and they are held 
accountable for achieving results.
    Second, we do not have a current inventory of how many of 
these we have on a government-wide basis.
    Third, in some cases, agencies do not have the authority to 
enter into out-leasing arrangements or to enter into public-
private partnerships.
    Fourth, there are circumstances in which the current budget 
scoring rules discourage people from taking certain actions 
that they otherwise should take, or encourage them to take 
actions such as leasing rather than lease-purchase or purchase 
decisions that might make more sense for the taxpayers.
    So we do not have the right kinds of incentives and in some 
cases the right kinds of authorities. We do not have adequate 
transparency, and we do not have enough accountability 
mechanisms for the failure to act. So I think we need to take 
steps in all those three dimensions and along the lines of what 
I articulated in my opening statement.
    Chairman Collins. Since the GAO added real property 
management to the High-Risk List, have you seen any improvement 
in the management of Federal property? The reason I am asking 
this question is that as you and I have discussed before, there 
are certain agencies and programs that are on the High-Risk 
List every 2 years when it is released--some have been on for 
as long as a decade. And what I want to get into as Chairman of 
this Committee is helping programs and agencies get off the 
list.
    Now that you have identified this area, are you seeing any 
progress or any response to your findings?
    Mr. Walker. The answer is yes, and it is from two 
dimensions. The first dimension is a government-wide dimension. 
As I mentioned, this is a government-wide challenge. It is more 
acute in some departments and agencies than others, but it is a 
government-wide challenge. I have had conversations with the 
Director of OMB and the Deputy Director of OMB for Management 
as well as other parties. They are taking this very seriously.
    As you know, when we add something to the High-Risk List, 
that is intended to bring light to an issue; with light, you 
get heat, and with heat, hopefully, you get action. OMB is 
looking at whether or not they are going to add this item to 
the President's Management Agenda. They are taking it 
seriously, and that is encouraging.
    There are a number of other departments and agencies who 
are starting to take additional actions in this area. But I 
think we cannot underestimate the degree of difficulty and the 
significance of this issue. It is going to take action by both 
the Congress as well as the Executive Branch. It is going to 
take the sustained attention of a variety of parties over an 
extended period of time to get to where we need to be, but we 
need to get started now.
    Chairman Collins. One aspect that surprised me as our 
Committee has been investigating this issue is the lack of 
information that many agencies seem to have about their own 
property. If you survey Federal agencies, you will find that it 
is very difficult to get basic information about what they own, 
what they occupy, what the condition is.
    GAO has found that many agencies do not even have current 
data about the property that they own, and even when they do, 
that their inventories often lack key information needed to 
make budgetary and other strategic decisions.
    It seems basic to me that if agencies do not even know what 
properties they own, they are not going to be doing an 
effective job managing it.
    Would you comment on that problem and how you see that 
being addressed?
    Mr. Walker. I think you put your finger on a key issue. You 
manage what you measure, and if you do not have adequate 
measurements here, you are not going to be able to effectively 
manage it. We do not have adequate information with regard to 
the nature and scope of this challenge in certain agencies, and 
we clearly do not have it on a government-wide basis. We need 
that. We need to have a currant inventory. We need to have 
adequate information. We need to have transparency so the 
Congress and other parties can monitor what is going on. So 
that is one of the fundamental steps that I think we need to 
take.
    Chairman Collins. Today, as you know, we are looking at St. 
Elizabeths Hospital as a case study of some of the problems, 
and as you know from GAO's own extensive review of St. 
Elizabeths, the West Campus has deteriorated significantly 
during the 16 years that it has been used by the District of 
Columbia.
    There have been disagreements between the Federal 
Department of Health and Human Services and the D.C. Government 
as to who is responsible for the deterioration of St. 
Elizabeths and who is responsible for many of the costs to 
remedy the years of neglect and deterioration.
    What can we do to make sure that when the Federal 
Government is leasing a building to a non-Federal entity that 
it is still being effectively managed, and how would you assess 
responsibility for the deplorable state of St. Elizabeths?
    Mr. Walker. Well, the fact of the matter is as you have 
pointed out, the Department of Health and Human Services owns 
about half the property, the West portion of that property. 
Even if you enter into leasing arrangements or use arrangements 
with a third party, whether that be a governmental party or a 
private sector party, you still own it. You still have 
stewardship responsibility and accountability. So part of it 
comes back to making sure that we have the people responsible 
and accountable for making sure that the right thing is done, 
the right types of contractual arrangements are entered into, 
that these issues are addressed up front as to who is 
responsible for what.
    I do think, however, that St. Elizabeths is an example of 
why we are debating all these questions about who is 
responsible and how much it is going to cost, but also the 
question is what are we going to do with the property. In the 
time that we are debating all of this, we are incurring 
additional cost, there is additional deterioration, and we are 
not recovering asset values.
    One thing that I would like to raise, Madam Chairman--and I 
do not know if they have considered this or not, but it is 
something that we did at GAO, and it may make sense here--as 
you know, the GAO building is a national historic property. The 
GAO building had an asbestos problem. And we entered into an 
arrangement--a public-public partnership, but it could easily 
have been a public-private partnership. Specifically, in our 
case, we entered an arrangement with the Army Corps of 
Engineers where they agreed to work on remediation of our 
asbestos problem. We then ended up leasing space to them and we 
gave them rent concessions to pay for the remediation effort. 
Some of these same factors exist for St. Elizabeths--so what if 
anything is being done to try to work out either a public-
public or a public-private partnership to restore and redevelop 
this area such that the parties who might want to use it and 
who might benefit economically might end up incurring some of 
the cost to deal with the remediation, to deal with the 
restoration, and in a way that we can actually make some 
progress. I am not so sure that has been considered, but I 
think it is something that needs to be done.
    Chairman Collins. When I toured St. Elizabeths, I was 
struck by the lack of common sense maintenance of roofs, of 
steam tunnels, for example, that would have prevented at least 
a substantial part of the deterioration. How good a job does 
the Federal Government do in maintaining its properties?
    Mr. Walker. Well, it obviously varies by agency and by 
location. The ``bottom line'' answer is ``Not good enough,'' 
and we need to do a better job. But in the aftermath of 
September 11, 2001, we have got a new dimension that we need to 
be concerned about. For so many years, we had extra money that 
we were paying on maintenance, we had deferred maintenance 
because of deteriorating properties, and we had asset recovery 
values that we were not achieving because we were not taking 
the right steps.
    I would respectfully suggest that we have a new dimension 
now. We need to rationalize our excess infrastructure. We need 
to streamline it down to absolutely the minimum amount that we 
need, because what we have to do is not only make sure that we 
deal with the budgetary aspects; we have to deal with the 
security aspects. We need to minimize our footprint. We need to 
have as few Federal properties and facilities as possible in 
order to save money and gain asset recovery values, so we can 
properly secure those facilities. This is not just an issue in 
the United States; it is also an overseas issue in connection 
with our embassies. This is a real issue for the State 
Department. We need to be rationalizing our presence overseas, 
which many countries have already started to do, like the 
United Kingdom and others, in light of recent world events and 
changing circumstances.
    Chairman Collins. Thank you. I want to thank you very much 
for your testimony this morning. It has given us a very helpful 
overview of this problem as we proceed.
    We are looking at both legislative and other reforms, and 
if GAO as your work continues, has some specific suggestions 
for the Committee, we would very much welcome them.
    Mr. Walker. Thank you, Madam Chairman.
    Chairman Collins. Thank you.
    For our next panel, I would like to welcome two members of 
the Committee staff, Johanna Hardy, and James McKay. They are 
both members of the Committee's legal and investigative staff. 
They have conducted an extensive investigation of the property 
at St. Elizabeths Hospital. They have also prepared a 
powerpoint presentation consisting of photographs of the West 
Campus that detail much of its deterioration.\1\
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    \1\ The powerpoint presentation by Mr. McKay and Ms. Hardy 
consisting of photographs of the West Campus appears in the Appendix on 
page 83.
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    I want to thank the staff for its investigation. I think 
they did a terrific job.
    I will ask Ms. Hardy to proceed.

TESTIMONY OF JOHANNA L. HARDY,\1\ SENIOR COUNSEL, COMMITTEE ON 
               GOVERNMENTAL AFFAIRS, U.S. SENATE

    Ms. Hardy. Madam Chairman, my name is Johanna Hardy, 
sitting to my left is James McKay. We are part of the 
Governmental Affairs Committee's legal and investigative staff.
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    \1\ The prepared statement of Ms. Hardy appears in the Appendix on 
page 64.
---------------------------------------------------------------------------
    Over the last 8 months, the Committee has been conducting 
an investigation into the management of Federal real property. 
As part of the investigation, we looked at several Federal 
buildings that were underutilized, vacant, or deteriorating.
    St. Elizabeths Hospital was the most striking. The West 
Campus of St. Elizabeths is owned by the Department of Health 
and Human Services. St. Elizabeths, of course, is right here in 
the Capitol's back yard. In fact, we are the same distance from 
St. Elizabeths as we are from the Lincoln Memorial. Yet, 
despite the proximity, what we found during our five visits to 
St. Elizabeths could not contrast more from the well-maintained 
Capitol complex.
    The St. Elizabeths property includes over 300 acres of 
land, 182 of which compose the federally-owned West Campus. The 
television monitor shows an overhead picture of St. Elizabeths 
which is bounded by the red. There are 61 buildings with 
approximately 1.1 million square feet on the West Campus alone.
    In addition, the campus contains a Civil War cemetery, 
sweeping views of the downtown and monumental core of the city, 
as well as a park-like landscape. In addition, the West Campus 
of St. Elizabeths is designated as a National Historic 
Landmark.
    In 1987, pursuant to an act of Congress, the hospital's 
East Campus was transferred to the District. Shortly 
thereafter, HHS entered into various agreements with the 
District to allow the District to use the federally-owned West 
Campus.
    St. Elizabeths Hospital, the first and only national 
Federal mental health facility, began its operations in 1855. 
For more than a century, the hospital was a world premier 
mental health and research facility. Since the District assumed 
responsibility for the D.C. mental health functions, St. 
Elizabeths' patient population has significantly decreased, as 
has the District's need for the facilities.
    During the 1990's, the District began moving personnel and 
property from the Federal West Campus to the East Campus. While 
all personnel have been relocated to the East Campus, 
considerable District property still remains in vacant West 
Campus buildings owned by HHS.
    Chairman Collins. Thank you. Mr. McKay.

     TESTIMONY OF JAMES R. McKAY,\1\ COUNSEL, COMMITTEE ON 
               GOVERNMENTAL AFFAIRS, U.S. SENATE

    Mr. McKay. Madam Chairman and Members of the Committee, I 
would now like to explain the current situation at St. 
Elizabeths and then begin a slide presentation.
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    \1\ The prepared statement of Mr. McKay appears in the Appendix on 
page 65.
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    Although the District's personnel have vacated the West 
Campus, a substantial amount of District property remains 
including patient records, employment files, billing records, 
personal items, and furniture.
    Subsequent to the start of our investigation, the District, 
GSA, and HHS signed an agreement to provide for the removal of 
the District's remaining items. After the removal of all 
District items from the West Campus is complete, HHS and GSA 
plan to begin mothballing the buildings in compliance with 
standards set by the Secretary of the Interior. ``Mothballing'' 
is the process by which a building is deactivated and 
temporarily sealed to protect it from the elements and to 
secure it from vandalism. It is not returning a building to 
productive use.
    Estimates of the cost to complete the mothballing of the 
entire West Campus vary, but according to a February 2003 
estimate provided to GSA, the cost will be at least $18 
million, or approximately double an estimate found in a GAO 
report from just 2 years earlier.
    We would now like to begin a slide presentation that shows 
the conditions in which we found St. Elizabeths during our five 
visits to the West Campus. We have also provided a color copy 
of the slide presentation to each Member of the Committee.
    [Powerpoint presentation.]
    The following slides were taken in and around the Center 
Building, the most historic building on the West Campus.
    Ms. Hardy. As we go through these slides, it is important 
to highlight the Stabilization and Mothballing Study completed 
this year by consultants hired by GSA, which highlighted the 
problems that needed to be rectified on other buildings on the 
West Campus prior to them being mothballed. It is interesting 
to note that many of those problems, including furnishings and 
debris still in the buildings, exist in the Center Building 
even though it has supposedly already been mothballed.
    Mr. McKay. The slides that we are looking at are photos of 
various rooms in the Center Building. You will notice ceilings 
and floors collapsing as well as furnishings and debris 
remaining in the building.
    Here is the room in which the poet Ezra Pound was confined 
between 1946 and 1958. This further illustrates the historic 
significance of the property.
    Here are some good examples of how many of the floors in 
the Center Building are collapsing. In many cases, the floor 
below can clearly be seen through the collapsing floor.
    In the Center Building's basement, many of the wooden 
supports have rotted and have been replaced by these temporary 
metal poles.
    This picture and the next are of the last rooms the 
District occupied in the Center Building. Besides the obvious 
poor condition of the room, what this picture does not fully 
capture is the sagging floor. An engineering firm that examined 
this floor described it as having ``failed.'' As late as 1997, 
District employees occupied this room, which was used for 
photocopying. We understand that they complained to the 
District about the floor to no avail, then to HHS. HHS did 
write a letter to the District supporting the employees, but 
nothing was done. We were told that eventually, the District 
employees took matters into their own hands and moved from one 
side of the room to the other.
    This further highlights the deterioration of St. 
Elizabeths, the District's lack of maintaining the buildings it 
was occupying, and HHS's failure to preserve and protect its 
own property.
    The following two slides were taken in the gymnasium 
located on the top floor of the Center Building. As you can 
see, a portion of the roof has collapsed, and there has been 
extensive water damage.
    Here is a bathroom located off the gymnasium. Again, the 
roof is collapsing, and there is water damage. On one visit to 
the site, the water was actively streaming into the room.
    In this slide and the next, you see an open door and a 
tunnel leading directly into the Center Building.
    The next several slides show some of the refuse that has 
accumulated behind the Center Building. This slide shows 
several barrels, some marked as containing chemicals.
    Ms. Hardy. The next couple of slides not only show the 
amount of trash and debris left outside the buildings, but on 
one visit, we captured pictures of an individual who, according 
to District representatives, engages in informal salvage work. 
This person was allowed to enter the site in what is supposedly 
the secure West Campus.
    Mr. McKay. The bakery is another historic building. On one 
visit, we could not even enter the bakery because the floor was 
flooded with water.
    And despite the fact that this picture was taken several 
days after the last rainstorm, water damage is still clearly 
visible, and in fact, standing water can still be seen on the 
floor of this room.
    Ms. Hardy. This is important to highlight because of the 
potential consequences of standing water. In the study 
completed by the GSA consultant that I referenced earlier, the 
study highlighted a sprinkler accident in another building that 
was never contained or mopped up. This caused rotting and 
rusting of interior structural elements and resulted in a 
massive infestation of termites that badly damaged that 
building.
    Mr. McKay. The remaining slides are taken of the 
Administration Building, which was vacated by District 
personnel in January. Many of you will recognize this building 
from the movie ``A Few Good Men.''
    According to GSA's Mothballing and Stabilization Report 
from earlier this year, it will cost around $270,000 to 
mothball this building.
    The following slides are taken of the Administration 
Building's interior. Notice paint peeling, mildew, open windows 
that expose the interior of the building to the elements, and 
items left by the District. It is our understanding that HHS 
has repeatedly asked the District to remove their items.
    Ms. Hardy. This slide shows damage to items left in the 
building, including papers and records. We obtained this binder 
from the Administration Building as an example of the condition 
of many of the records left on the campus. The binder contains 
travel and expense records, including names and Social Security 
numbers of U.S. Department of Health and Human Services 
employees. There appears to be some sort of growth on the 
binder; the binder and its contents are clearly warped and 
damaged, and even through the plastic bag storing it, there is 
an odor emanating from this object.
    This is indicative of the state in which we found a number 
of records and items left in the building.
    Mr. McKay. In this area of the Administration Building, 
there was a strong odor of mildew, humidity from the steam 
tunnels, and leaking water.
    In this slide, you will notice extensive growth of mold on 
the wall.
    And this appears to be some sort of animal print, probably 
from a raccoon, that we found on the stairway leading from the 
main floor to the second floor of the Administration Building.
    The following slides were taken in the basement of the 
Administration Building. This slide shows water actively 
streaming into the basement, and as you can see, items left in 
the basement have suffered extensive damage from the water and 
moisture and are now totally ruined.
    Ms. Hardy. The last set of slides demonstrates the types of 
files and records we found left in the Administration Building.
    I am holding up an example of those files. According to 
District officials, they are in the process of removing these 
items and maintain that the building is secure and that there 
is controlled access to the campus. However, on one visit, the 
front door of this building was unlocked and, as mentioned 
previously, on all of our visits, a number of windows were left 
open.
    Mr. McKay. This slide was taken in the basement of the 
Administration Building. As you can see, due to the water 
damage, the filing cabinets are warped and rotting. The filing 
cabinets and several open shelves in this room contain what 
appeared to be thousands of patient records going back decades 
to when HHS still occupied the West Campus.
    The types of records we found included a file with a 
corporate credit card; boxes of documents labeled 
``Confidential--Please Shred''; lab results containing patient 
personal information. In one room of the Administration 
Building, we found folders of patient records strewn on the 
floor, and sitting on top of these records was medical 
information for a 13-year-old girl. Here, we have redacted any 
identifying information, but the information included her 
Social Security number, her parents' names, her address and 
birth date. We saw literally hundreds of records like this. 
This information was found right next to this open window.
    More information was found in the computer room, including 
computer tapes containing Medicaid outpatient claims, some of 
which were also strewn on the floor.
    Moving the West Campus from a mothballed state to 
productive use is likely to be extraordinarily expensive. As 
discussed earlier, this property is a National Historic 
Landmark, and most of the buildings have to be preserved.
    The 1985 physical plant audit of St. Elizabeths estimated 
the cost of renovating both campuses at between $66 and $69 
million, plus the cost of hazardous materials removal. Later, a 
1993 estimate, which assumed that 52 percent of the West Campus 
would continue to be used for the District's mental health 
services with the remainder adapted for other institutional-
type uses, assessed this cost to be as high as between $116 and 
$128 million.
    The current cost to renovate the West Campus is likely to 
run much higher due to its accelerated deterioration. Nearly 
every building on the West Campus has severely deteriorated, 
and almost all of the buildings will require remediation of 
lead and asbestos. They will also need to have their heating 
and air conditioning systems completely replaced.
    As a result, GSA has estimated that it will cost between 
$400 and $450 per square foot to bring St. Elizabeths to normal 
occupancy levels and in a manner that complies with the 
Secretary of the Interior's Standard for Historic Properties. 
If this estimate proves to be consistent across the West 
Campus' 1.1 million square feet, restoring it can be expected 
to cost between $440 and $495 million.
    Ms. Hardy. Earlier this year, GSA hired a consultant to 
conduct a Stabilization and Mothballing Study of St. Elizabeths 
West Campus. The report concluded, and I quote: ``The current 
deteriorating state of the West Campus is the unfortunate 
result of the discontinuation of maintenance and repair,'' and 
``minor maintenance problems have gone unrepaired long enough 
to have had a major impact on the structural integrity of the 
buildings.''
    The bottom line is that this is not simply one or two 
buildings that were lost in the bureaucracy of a large agency. 
St. Elizabeths is 182 acres of Federal land, 61 buildings, and 
1.1 million square feet of space with the highest historic 
designation. The sad demise of this once stunning landmark 
institution raises a real question of how other Federal 
properties are being managed and maintained.
    Thank you. This concludes the staff testimony.
    Chairman Collins. Thank you very much for your excellent 
presentation.
    When I joined you at one point in visiting the West Campus, 
I believe you told me that there were some 61 buildings; is 
that correct?
    Ms. Hardy. That is correct.
    Chairman Collins. And I went into two of the major 
buildings that we have featured today, but could you give us an 
overview of the condition of the other buildings as well?
    Ms. Hardy. The two other buildings that we went into 
included the bakery, as you saw in the pictures, as well as the 
firehouse. All of the buildings seemed to have some level of 
decay and deterioration. As you saw with the bakery, there was 
standing water and clearly a lot of water damage on the walls 
and on the floors.
    Chairman Collins. It is very troubling to see the 
deterioration of these buildings in an area of the city with 
beautiful views. This was once a spectacular campus. Many of 
the buildings from the outside look beautiful as well as being 
historically significant. But in addition to the deterioration 
of the buildings, what I found most astounding and your 
presentation amply documents was the number of personal 
documents, psychiatric records, and other confidential 
materials that had been left unattended.
    Could you elaborate on the security of those materials? 
Were they easily available to you? Were they open, or was there 
any security evident?
    Ms. Hardy. The documents inside the building were very 
accessible. In terms of the security, we were told by District 
officials that they believed that the West Campus was secure, 
there was controlled access, and that the buildings remained 
secure. But as we indicated in our presentation, on at least 
one occasion when we visited the Administration Building where 
most of the records were found, the front door was unlocked, 
and as you noticed in a number of the slides, a number of 
windows open. On at least one occasion, there was an individual 
who did gain access to that side of the campus.
    Chairman Collins. Did you inform District officials of the 
personal records, the medical records in particular, that you 
found during your tours of these buildings?
    Ms. Hardy. Yes, we did.
    Chairman Collins. And what was the reaction of the District 
officials? Were they concerned?
    Ms. Hardy. I think that they felt pretty confident that 
there was controlled access and that the building was secure, 
but there was some level of concern that we were able to gain 
access to these files.
    Chairman Collins. In your subsequent visits to these 
buildings, did you still find personal files after you had 
notified the District officials?
    Ms. Hardy. Yes, we did.
    Chairman Collins. So no one went in and cleaned out all of 
those files in between your visits to the campus?
    Ms. Hardy. No. While we did see some cleanup work that 
apparently had occurred between visits, there was still a 
significant amount of patient records and confidential records 
still left in the building.
    Chairman Collins. Did some of those records seem beyond 
repair as you looked at them, because of water damage, mold, or 
other problems?
    Ms. Hardy. Yes, they did.
    Chairman Collins. And again I want to emphasize for the 
record that the records that you found had identifying 
information about some of the patients who had been treated at 
St. Elizabeths; is that correct?
    Ms. Hardy. Yes.
    Chairman Collins. Such as names, addresses, Social Security 
numbers, and diagnoses.
    Ms. Hardy. Exactly, including, as one slide showed, lab 
results.
    Chairman Collins. Mr. McKay, clearly the failure to 
maintain St. Elizabeths has added to the cost of ultimately 
renovating these buildings so that they can be returned to 
productive use. Do you have any idea how much of the current 
estimate of rehabilitating the West Campus, which you have 
estimated based on GSA and other reports to be approximately 
half a billion dollars, can be attributed to the poor 
maintenance of the West Campus over the past 15 years?
    Mr. McKay. While no definitive study has been done, it is 
the case that in many of the buildings, there were some very 
simple maintenance tasks that could have been done that would 
have prevented more serious problems down the line. In many 
cases--for example, in the Administration Building--there was a 
tremendous amount of humidity as a result of steam still being 
pumped into the building. In fact, we heard dripping water. The 
damage was clearly extremely intense, and this was something 
that would not necessarily have cost a lot of money to fix at 
the beginning, but as things escalated, it became more and more 
expensive.
    Chairman Collins. Was the deterioration of St. Elizabeths 
due to a lack of funds to do basic, essential maintenance?
    Ms. McKay. Well, while more money always helps, much of the 
damage that was done appears to be the result of unnecessary 
neglect. As we said, during our visits to the campus, we 
discovered wide open windows exposing the interior of the 
building to the elements. In addition, there was still a large 
amount of trash and personal property that was left in the 
buildings. This is going to be expensive to remove, and it is 
going to add to the overall price of mothballing. As you saw in 
the Center Building, many of the floors that were collapsing 
still had items on them, which is obviously going to increase 
the likelihood that the floors will actually collapse.
    Chairman Collins. Ms. Hardy, it is obvious that District 
officials knew of the poor condition and the continuing 
deterioration of these buildings, because after all, the D.C. 
Government was essentially the tenant. In your review of 
documents, did you come across any evidence that indicated that 
the Federal owners, the Department of Health and Human 
Services, were aware of the deterioration of conditions at St. 
Elizabeths?
    Ms. Hardy. Yes, we did. In fact, documents supplied to the 
Committee by HHS which included correspondence from HHS to the 
District dating back to 1992 clearly indicate that HHS was 
fully aware of the deteriorated state of the property. The 
letters are apparent attempts by HHS to notify the District of 
these problems, but again, all we have is evidence of the 
letters and no evidence of further action taken by HHS.
    Chairman Collins. And did the General Accounting Office 
also do a review of the condition of St. Elizabeths that would 
have put the Federal Government on notice if there were a lack 
of understanding of what was going on?
    Ms. Hardy. Yes. In fact, a couple of years ago, there was a 
GAO study done specifically on St. Elizabeths Hospital, and in 
fact that report highlighted the deteriorated state of the 
property. So again, HHS was fully aware of the problems with 
St. Elizabeths.
    Chairman Collins. Thank you. Senator Bennett.

              OPENING STATEMENT OF SENATOR BENNETT

    Senator Bennett. Thank you, Madam Chairman.
    I do not have a lot of questions because you have been very 
thorough in your analysis of this.
    The thing that stuns me as I go through this material is 
that I find photographs of dates--1999, 2000, and 2001. This is 
very recent if the building was being used. To look through 
these photographs, you would think this thing was abandoned in 
the 1980's, and nothing had been done for 20 years.
    To have it being used to the point where you have computer 
printouts that are dated 2001 left on the floor indicates on 
the face of it a very rapid and sudden abandonment and decline.
    Is that accurate? That is my impression from looking at 
this, but I could very easily be wrong.
    Ms. Hardy. That is accurate. In fact, our understanding is 
that the Administration Building was used as recently as 
January of this year. The deterioration, as you can see, is 
accelerated deterioration, and we are told it is from a number 
of causes--water leaks, steam leaks, etc.--that clearly were 
not dealt with when they occurred.
    Senator Bennett. Well, I thank you for holding the hearing, 
Madam Chairman, and going after this. My own experience would 
dictate at this point, from a financial point of view, just 
bulldoze the whole thing and start over. You could build new 
buildings with better facilities than you could rehabilitate 
this at this point.
    I know the preservationists will not like that because they 
love these old buildings, and certainly there are cases where 
we have spent money on old buildings--the Library of Congress 
Jefferson Building, Union Station--and we have gotten our 
money's worth even though we could have created the same amount 
of square footage for less money than we put into 
rehabilitation. But I would view this one very carefully before 
I would say let us go back and rehabilitate those buildings, 
because the deterioration is so severe that it looks like you 
could call out the Seabees and get their bulldozers and go to 
work.
    Thank you.
    Chairman Collins. Thank you, Senator Bennett.
    It is extraordinary the state of these buildings. The fact 
that the Federal Government owns 61 buildings on a beautiful 
campus so close to the Capitol, that is clearly very valuable 
real estate, and as the Comptroller General said in his 
testimony, one of the problems that they found is that Federal 
agencies are not even clear about what they own in some cases, 
and it is pretty hard to manage effectively what you do not 
realize that you own.
    So there is a lot of work to be done in this area.
    I want to thank our witnesses for an excellent presentation 
and for all of your hard work as we explore this important 
area.
    I would now like to welcome our third panel of witnesses to 
the hearing.
    William C. Stamper is Deputy Assistant Secretary for 
Facilities at the U.S. Department of Health and Human Services. 
He began his current position on July 1, 2002. Previously, he 
served as Deputy Director of Facilities for the National 
Aeronautics and Space Administration and as Director of the Air 
National Guard Facility Requirements Branch.
    Martha Knisley is Director of the District of Columbia's 
Department of Mental Health which operates the East Campus of 
St. Elizabeths Hospital. She began serving in her position last 
November. Prior to that, she spent three decades as a mental 
health clinician and administrator.
    I want to thank you both for appearing today. I also want 
to say for the record that both the Department of Health and 
Human Services and the D.C. Government have been fully 
cooperative with the Committee in its investigation of St. 
Elizabeths as a case study of the Federal Government's 
management of its real property.
    Mr. Stamper, we are going to begin with you.

TESTIMONY OF WILLIAM C. STAMPER,\1\ DEPUTY ASSISTANT SECRETARY 
FOR FACILITIES MANAGEMENT AND POLICY, U.S. DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Mr. Stamper. Thank you, Madam Chairman and Committee 
Members. Good morning.
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    \1\ The prepared statement of Mr. Stamper appears in the Appendix 
on page 67.
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    Thank you for inviting me to testify today on behalf of the 
Department of Health and Human Services. Secretary Thompson 
sends his thanks to the Committee for addressing an issue that 
many executive agencies are experiencing.
    As stated in the GAO report on real property, many Federal 
assets are no longer effectively aligned with or responsive to 
agencies' changing missions and are therefore no longer needed.
    I have been asked to speak about one such asset owned by 
the Department of Health and Human Services. The West Campus of 
St. Elizabeths Hospital in Southeast Washington, DC has been 
excess to the Department's needs for many years. However, due 
to a unique set of circumstances, we have been unable to 
dispose of the property.
    As testified to before, there are 61 buildings on the West 
Campus, approximately 1.1 million square feet. In addition to 
the historic buildings, the West Campus is the site of a Civil 
War cemetery reported to be the only public cemetery containing 
the remains of both Union and Confederate and black and white 
soldiers.
    In December 1990, St. Elizabeths was designated a National 
Historic Landmark.
    Congress adopted the St. Elizabeths Hospital and District 
of Columbia Mental Health Services Act, otherwise known as the 
Transfer Act, in 1984. The Act provided for the transition of 
the District's mental health system to local control and gave 
the District two opportunities to take title to the St. 
Elizabeths Hospital grounds and buildings.
    On October 1, 1987, those buildings identified by the 
District as necessary for its mental health system were 
transferred, including the entire East Campus except for one 
building, five buildings on the West Campus, and approximately 
$27 million to pay for repairs.
    The Transfer Act also provided the District a right of 
first refusal on the remaining property, which included most of 
the West Campus. Although the District occupied about 34 
buildings on the West Campus, the second transfer did not take 
place.
    In 1987, then Mayor Marion Barry signed a Use Permit with 
HHS that specifically required the District to preserve, 
maintain and repair the West Campus. The Use Permit was 
extended indefinitely in 1997. Although HHS oversight was 
minimal, our records show that we notified the city of various 
violations throughout the years but took no action beyond the 
notification.
    The buildings have deteriorated significantly, as you have 
seen. To prevent further damage to the large Center Building, 
HHS spent $1 million on a new roof and gutter system in 1991 
and spent another million dollars on mothballing and 
stabilization projections in the year 2000. One million dollars 
requested from Congress in 1998 was not appropriated.
    Once we were notified by District officials in 2000 of 
their intent to vacate personnel from the campus the following 
year, we immediately began to take the steps necessary to 
protect and dispose of the property. GSA instructed HHS on the 
steps necessary to declare the property excess, and in 
September 2000, we completed Phase I of the required 
Environmental Assessment. In January 2001, HHS officially 
notified GSA of its intent to declare the property as excess.
    In April 2001, the GAO on behalf of the Committee on 
Appropriations verified the need for funds associated with 
property disposal, including fulfilling the requirements of the 
National Environmental Policy Act and the National Historic 
Preservation Act. Later in 2001, Congress provided $6.5 million 
to begin the disposal process and mothballing.
    In 2002, HHS awarded a contract for a building-by-building 
mothballing assessment of Federal buildings on the West Campus 
and completed the Phase II Environmental Survey. In May 2002, 
the Urban Land Institute conducted a study to develop 
suggestions on potential land use for the entire St. Elizabeths 
campus, both East and West.
    In late 2002, the District hired an architectural firm to 
develop a framework plan for the campus, to identify 
appropriate uses, and to establish implementation strategies.
    To start off 2003, in January, Mayor Williams held a public 
meeting to inform the community about the planning process for 
St. Elizabeths. Also, at the beginning of this year, the 
District vacated its last employees from the campus, and HHS 
received a report on the building-by-building assessment.
    GSA has arranged for bids on the mothballing and 
stabilization, but it was immediately apparent that the project 
was going to cost far more than the $6 million appropriated.
    We plan to complete the project in three or more phases 
depending on available funding. HHS recently contracted with 
GSA to award the first phase, which will involve roofing, 
boarding up windows, securing entrances, and pest control. That 
should begin within the next 2 months.
    Most of the buildings on the West Campus were constructed 
from 1855 to the early 1900's. Nearly every building suffers 
severe deterioration due to age and lack of maintenance. Our 
estimate to finish the mothballing and stabilization is 
approximately $20 million. This figure continues to rise with 
natural events such as our recent Hurricane Isabel and last 
year's severe winter.
    The District is still removing furniture, files, and other 
articles from the buildings and is required by the Use Permit 
to give us written, 180-day notice that the property is no 
longer needed. HHS will be responsible for security and 
maintenance after the turnover by the District until GSA 
assumes responsibility.
    St. Elizabeths' West Campus is one of the largest 
developable tracts in the District of Columbia and therefore an 
extremely valuable asset to the Federal Government, the 
community, and the future of Southeast Washington. 
Redevelopment will have a positive impact on the city and will 
promote economic growth in the area around St. Elizabeths. The 
government can and should make every effort to ensure that the 
property is redeveloped in such a way to preserve the historic 
buildings and site.
    With its rich heritage, St. Elizabeths Hospital offers a 
wonderful look at an important aspect of our Nation's history. 
Creativity must be a part of a negotiation process between the 
Federal Government, the District and, if needed, private 
entities to preserve this important cultural asset.
    GSA has informed HHS that there may be other Federal uses 
for the property. If a Federal transfer occurs, we believe it 
will greatly benefit the immediate community and the city as a 
whole. The continued mothballing and maintenance of the 
property is costly, and decisions need to be made as soon as 
possible.
    At Secretary Thompson's initiative, HHS is redoubling our 
efforts to work with GSA, the District, and the community to 
make certain that the potential for St. Elizabeths Hospital is 
realized.
    Thank you for allowing me to speak with you today, and I 
will try to answer any questions you might have.
    Chairman Collins. Thank you very much.
    Ms. Knisley, could you also introduce the person with you 
as you begin your statement?

  TESTIMONY OF MARTHA B. KNISLEY,\1\ DIRECTOR, DEPARTMENT OF 
    MENTAL HEALTH, GOVERNMENT OF THE DISTRICT OF COLUMBIA, 
ACCOMPANIED BY DAVID NORMAN, ACTING GENERAL COUNSEL, DEPARTMENT 
                        OF MENTAL HEALTH

    Ms. Knisley. Yes. Senator Collins, Senator Coleman, with me 
today is David Norman, who is our Acting General Counsel for 
the Department of Mental Health. He worked on the St. 
Elizabeths Campus for the Public Defender's Office in the 
District for 17 years and has been a source of informal 
information as we try to piece together these individual issues 
and is going to assist me today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Knisley appears in the Appendix 
on page 77.
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    Chairman Collins, Senator Coleman, my name is Martha 
Knisley. I am Director of the District of Columbia Department 
of Mental Health, and I thank you for inviting me to testify 
before you on a subject of great importance to myself, my 
Department, and the citizens of our Nation's Capital--the past, 
the present, and the future of the West Campus of St. 
Elizabeths Hospital.
    Before I begin, I would like to divert from the text for a 
moment and talk to you as a mental health professional who has 
worked in over 40 States, including the State of Maine, working 
at the Machias Campus and also in Bangor at that campus in my 
career. I have worked in, as I said, 41 States. I have worked 
in 77 State psychiatric hospitals during my career.
    I have found personally and tragically, both as a young 
woman in undergraduate school when I did work in a 
deteriorating campus--it was hard to say ``a deteriorating 
campus'' when it had never been very functional to begin with--
in Huntington, West Virginia, that as a Nation--and this goes 
beyond the scope of today's discussion--but as a Nation, what I 
found with our buildings, where we have placed our most 
vulnerable citizens, is that what we have done as a Nation to 
those people, to the people who work there, parallels the 
history of this campus.
    It is an unspeakable tragedy.
    I came to the District of Columbia at the request of a 
transitional receiver in the Dixon case that began in 1974. 
This case was brought against the HHS at that time, which was 
running St. Elizabeths, and the District of Columbia, which was 
operating a few small community clinics.
    That case was brought with the expressed purpose to develop 
a system of care for people with mental illness in the 
District. It is 2003, and that case has not been settled.
    It just so happens that the transfer of this hospital came 
at the time that the Federal Government wanted to exit the 
case. The point in fact is that the deterioration of St. 
Elizabeths Hospital began probably several decades before the 
case was even brought. These buildings have been rotting away 
for many decades. And as testified to earlier this morning by 
your staff, who have done an excellent job, Senator Collins, I 
found the same situation when I arrived that they found at St. 
Elizabeths.
    The situation got so bad with the city's operation--again, 
all the time with HHS and the city operating not just for the 
buildings but for the people--that Federal Judge Aubrey 
Robinson in the Dixon case placed the mental health system in 
the District in receivership in 1997. Mayor Williams 
aggressively argued to bring this system out of court 
receivership so that the city could begin to manage this 
system--partly because of this valuable property, the people 
who worked there, but the citizens in the District who need 
mental health care.
    We did that in April 2001. One of the first actions that I 
had to take as director was to stop the renovation of the 
William A. White Building, where the renovation had begun 
before they had removed asbestos. They had not even removed the 
asbestos. And today, we heard about the conditions continuing 
this year.
    There are two issues I would like to raise about those. One 
is that while in receivership, the Commission on Mental Health 
transferred all of the operations of their recordkeeping and 
those files you saw to a private firm without sufficient 
guarantees in that contract to manage those records that you 
saw. We have had to discontinue that contract. But the 
recordkeeping, Madam Chairman, was just as horrendous in terms 
of the billing for the services, so we had a double problem 
there. And we are rapidly trying to reconstruct what even went 
on with the patients during that period of time.
    So those were billing records that you saw in the pictures. 
But even the other medical records, when we wanted to move them 
to buildings on the East Campus, our medical records building 
that we were using, where we wanted to use things, and that was 
under our control was in just as bad shape, so we had to shore 
up that building so we could move out of the other deteriorated 
buildings over onto the East Campus where we operate.
    We are also aggressively moving to build a new hospital on 
that campus on the southwest corner of the East Campus so that 
we can meet the basic safety and health concerns of our 
patients whom you did not see on the East Campus but who are 
living in some of the same conditions.
    When I arrived, Madam Chairman, the Centers for Medicaid 
and Medicare Services had placed this system on the endangered 
species list, if you will, for just its care. In August, they 
gave us a clean bill of health on active treatment at the 
hospital, brought us out of the conditions that we were in and 
said that at least our care for patients was on the upswing. 
Madam Chairman, as you can see, we still have a lot of catching 
up to do on the buildings themselves.
    So I just wanted to give you that background, because we 
need to develop a fully functioning community mental health 
system here in the District. Mayor Williams is adamant that we 
do that. We have exited the receivership, and we should be able 
to exit that case in 2 years.
    You have asked me to comment specifically on how the West 
Campus arrived at its current state of deterioration, and let 
me say that I have only secondhand knowledge of those events, 
and I have been trying to patch them together as you have, 
prior to my appointment.
    It appears that there was very little institutional memory, 
and I do believe that HHS has captured it very well, as have 
your staff, so that we could begin to piece together who was 
responsible for what and when. But beyond that, what are we 
going to do next?
    The Transfer Act that was initiated in 1987, as well as 
basically the original version of that Transfer Act, was 
charged with the responsibility for repairing and renovating 
those buildings and support systems that the District indicated 
it would need to use in its final system implementation plan, 
which was a part of the delivery of mental health services.
    Pursuant to that Act, HHS contracted for a physical plant 
audit which was conducted by an architectural and engineering 
firm, and this audit concluded that it would cost $55.8 million 
to bring up to code those portions of the campus that the 
District intended to use. Of that amount, $25.8 million was 
attributed to renovation of the West Campus.
    Unfortunately, this story, as you have heard this morning, 
only goes downhill from there. I would have to say, knowing 
what I have been going through, for example, just in the 
cleanup that we had to do after the storm last week, that 
probably every administrator in my seat before I became the 
director--and by the way, as we came out of receivership, it 
was the first time we actually created a Department of Mental 
Health; I report directly to the Mayor, and that did not occur 
before, either--but every year, they would have had to make the 
decision on cleaning up a building or making it safe for people 
living there today. And I myself personally have had to make 
that decision at least two or three dozen times in my short 
tenure--where am I going to place the resources that I have--in 
this deteriorating building or in a location where patients are 
actually living.
    So in summary, yes, not enough money, promises probably not 
kept, and when HHS did come to the District and request that 
activity occur, that did not happen. And the challenges, as I 
said, exist both for the care of the patients and with respect 
to the care of the campus.
    I can only say to you now, Senator Collins and Senator 
Coleman, that we are moving rapidly out of the buildings on the 
West Campus so that the mothballing can go ahead, and it has 
been a challenge for us to even do that this year, as has been 
evidenced here today, and we have been continuing even after 
the time that your staff were on the campus.
    I am available to answer questions, and I would like to ask 
that my statement that I was going to read be put into the 
record.
    Chairman Collins. Without objection, your statement will be 
entered in full.
    Ms. Knisley, you have obviously spent your entire life 
dedicated to serving those with mental illness, and I salute 
you for that commitment. Since you have been a mental health 
clinician for many years, I would like to get your reaction to 
the fact that we found during our investigation patients' 
medical records--not just billing records; I am talking about 
actual patient files with full identifying information, with 
diagnosis information--and not just one or two files, but 
hundreds of files on each of five different visits to the West 
Campus.
    Ms. Knisley. Madam Chairman, the A Building, where I 
believe that--again, from the pictures of where most of the 
files were found--in that particular building during my tenure, 
there were no staff offices or medical records offices. Those 
were the offices of the firm that had been contracted with that 
was located in that building, and it does appear, both from 
what we have been trying to construct just for the billing as 
well as for cleaning up the files and moving them, that many of 
the files migrated over to this billing operation. So the 
medical records--that is, the recordkeeping facility or 
division for the hospital that is used by the clinicians is 
actually located in a different building on the East Campus 
where we were operating. So it is somewhat of a mystery how the 
volume and those types of records found their way into the 
offices of these staff.
    Chairman Collins. Please understand--this is in a vacant 
building with no staff, with virtually no security, with the 
roof caving in, with water dripping on these confidential 
medical records. And we informed your department the first time 
we found these records, because we were so alarmed at what we 
were seeing. We expected by our next visit that individuals 
from your department would have come and immediately moved the 
records or taken some steps to secure them. But that did not 
occur.
    Moreover, there were members of your department who 
actually accompanied my staff on one of the visits and saw it 
for themselves.
    I assume the District of Columbia has patient 
confidentiality laws, and I am just wondering why no action. It 
is bad enough that the records were left there in the first 
place, but after we informed your department, nothing was done.
    Ms. Knisley. Madam Chairman, I am pleased to say that those 
records have been removed. The length of time to remove them--
and this is not an excuse--but the length of time to remove 
them is in part related to the fact that the place where we 
were moving them, we were also cleaning up that building and 
shoring up the wall there, so we were doing both activities at 
the same time.
    I might also add that the condition with the water coming 
in was going on while people were working in those buildings. I 
am not sure you were even aware--you went when they were 
vacant, but I do not know if they had taken the tarp down or 
not. They put a tarp up over the records and the computer 
equipment instead of repairing the building.
    So you are absolutely right. It has been a challenge for us 
to remove those records, and they are removed now, and again, 
we are doubly challenged by getting them into a place that 
would be safe.
    Chairman Collins. Mr. Stamper, in October 1996, the D.C. 
Preservation League, which is an organization of District 
historic preservationists, named St. Elizabeths Hospital to its 
list of eight most endangered properties, and a story in The 
Washington Post described the league as arguing that, ``A lack 
of proper maintenance by the District Government has created a 
desperate need for repair and has made the structure's long-
term fate uncertain.''
    That was 7 years ago. What actions did HHS take when 
alerted by outside groups to the deterioration of these 
buildings?
    Mr. Stamper. Madam Chairman, I am not familiar with that 
particular report. I think I can go back to the advent of this 
administration at least and say that we have been trying to be 
much more proactive about dealing with the St. Elizabeths 
problem. We are certainly aware of it.
    There is some kind of a trail of correspondence that took 
place in the nineties between the Department and the District. 
I have not read up on the specific one that you are 
referencing. I could get back to you with a written answer on 
that.\1\
---------------------------------------------------------------------------
    \1\ Letter from Mr. Stamper, dated November 12, 2003, in response 
to the question of an article in The Washington Post appears in the 
Appendix on page 82.
---------------------------------------------------------------------------
    Chairman Collins. In your testimony and just now, you 
referred to correspondence back and forth between HHS and the 
District, but you also conceded that HHS oversight was minimal 
and that HHS did nothing other than notify the District of its 
violations.
    Why didn't the Department take stronger actions to 
safeguard the taxpayers' investment in these properties?
    Mr. Stamper. I wish I knew the answer. I really--it is 
difficult for me to speculate back that far as to what recourse 
there was. There were certain things that probably could have 
been done short of an eviction notice or something, I guess.
    I would also like to add, though, that there is a context 
here of a drawdown in the Department headquarters facilities 
staff in HHS, and in the mid-90's, it was drawn down to, I 
think, two people to oversee departmental facilities activities 
in total, which is virtually nothing.
    Secretary Thompson, when he came in, recognized that we had 
a severe shortfall in the facilities function at Headquarters 
and took action to establish a new office that I am in charge 
of to establish an oversight presence at headquarters to try to 
avoid these kinds of problems.
    Chairman Collins. Well, before I turn to my colleague, 
Senator Coleman, let me say in response to that that if HHS 
only had two people at headquarters in charge of overseeing all 
of the property--is that what you are saying----
    Mr. Stamper. That is my understanding.
    Chairman Collins [continuing]. I cannot think of a more 
penny-wise and pound-foolish decision than to cut back on the 
staff that is responsible for ensuring the quality of the 
taxpayers' investment in real estate property that is valued in 
the multiple millions--just this one property alone, not to 
mention all the other HHS property.
    Ms. Knisley. Madam Chairman, if I might, it is possible, 
knowing the individuals involved at the time, that if HHS 
attempted to pursue that with the District, the District 
officials could have said, ``Well, this is our operating money; 
it would take away from patient care.'' Again, that is not to 
say that HHS should not have done more, but I think that the 
responsibility for that maintenance during that period of time, 
the District did need to step up to the plate, and I would 
suspect that there was some hope that during that receivership 
period, the District would in fact have done that.
    So I am not trying to say that HHS should not have done 
more, but it was very evident to individuals whom I have 
interviewed that, because the city was taking the repair money 
out of their operating budget, what people could see was that 
that was taking away from the patients. So that may have been 
going on. And again, that is not to at all say----
    Chairman Collins. I would argue that it is not good care--
--
    Ms. Knisley. No, it is not good.
    Chairman Collins [continuing]. Of patients or fair 
treatment of the staff----
    Ms. Knisley. It was not, no.
    Chairman Collins [continuing]. To allow this kind of 
deterioration. Senator Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Madam Chairman.
    Madam Chairman, first let me thank you for your leadership 
on this issue. This is important. You are always doing a public 
service, but this is a public service. This is a public 
service, and I appreciate it. I always and quite often, as you 
know, reflect upon my experience as a mayor. I will have to 
tell you that in my city, when we went through our list of 
problem properties, the leading landlord of problem properties 
was the Federal Government. So I think that what we are 
exploring here in a very dramatic and almost beyond 
comprehension way is perhaps symptomatic of a range of other 
issues that deserve further exploration. Again, I saw that in 
my city. We did not take this kind of action to deal with it; 
we dealt with it one-on-one. But I hope that down the road, we 
can kind of get our arms around this.
    I am not even sure what question I want to ask here, but I 
will tell you that I always have an appreciation for folks who 
dedicate their lives to public service and what you have done, 
Ms. Knisley, but as I listened and reading your testimony--I am 
still, by the way, trying to figure out how files migrate over; 
I am not sure what that means--but I would say that 
particularly in regard to the issue of patient confidentiality, 
that issue is one that folks are not being cared for if those 
records are made available. I am trying to sort out what 
happened here, and I think you are faced with what folks around 
cities always face when you have ``x'' number of dollars, and 
do you put them into patient care, or do you put them into 
fixing something up. And the problem is that there is a 
delicate balance, and when the balance is somehow not dealt 
with appropriately, you have problems, and there are clearly 
dramatic problems here.
    In your testimony, you note that ``You asked me to address 
the responsibility for this state of affairs,'' and you then 
say ``The responsibility ultimately rests with HHS as a holding 
agency of the property.'' I think I would have much preferred 
both of you coming up here and saying, ``Do you know 
something--we really messed up. We did not do what should have 
been done, and we will do everything in our power from this day 
forth to address that.''
    From the HHS perspective, I hope that you are looking over 
your list of 10 worst properties and taking a very close look 
at what you are doing and not doing rather than waiting for the 
Chairman to show up on the doorstep and figure out what has not 
been done. I would hope that has been done already.
    Mr. Stamper. Well, in fact, I think we had started the 
process to look and fix this problem prior to the Committee's 
interest. Maybe we could be criticized for the speed, but we 
have been working on this very diligently.
    Senator Coleman. My concern about working on it is that as 
I am listening to the testimony, I hear a lot of discussion 
about long-term plans, grand vision, land institute, future 
use, but there is the more immediate need of did you get a 
broom in there to pick up the garbage. I mean, I worry that 
sometimes we are not seeing the forest for the trees here. And 
the first step says we are going to make this safe. This is a 
safety issue. I do not know if there are kids in the area, 
Madam Chairman, but God forbid that there are, with these kinds 
of conditions.
    So, rather than ask a question, I would say that I hope the 
Department is not getting caught up in what the long-term 
vision is, but first saying ``We will make sure that these 
properties are cleaned up. We will make sure that they are 
secure.'' And then we can go beyond that.
    And I would hope, Ms. Knisley, that you would go back and 
figure out why it took so long for files that were sitting 
around not to be picked up and have somebody responsible to act 
on that.
    Ms. Knisley. Yes, I totally agree, Senator Coleman. And let 
me just say that even with the ultimate responsibility as the 
landlord, we have the responsibility of the care of the 
patients and the security of the records, absolutely.
    The first is no longer working for us in part because of 
this, and our staff have had to go in behind them and clean up 
these records. And I cannot fathom, either, this migration of 
that information to a company that was going to be doing 
billing. I cannot fathom that, either.
    I have the responsibility now, this is the shape I found it 
in, but I totally agree that it is my responsibility to get it 
cleaned up, and we are doing that as quickly as we can.
    Senator Coleman. I appreciate that, but I will tell you 
that it is hard for me to fathom when a Member of the U.S. 
Senate or Congress raises an issue about something, and files 
are lying around, that someone is going to come back and see 
them still there ``x'' number of days later. I cannot fathom 
that the next day, I do not have somebody there, figuring out 
what is being done and taking care of it--and if it is not 
done, figuring out who did not do it and deal with that, 
because if you do not, the problem will still exist.
    Ms. Knisley. Right. And Senator Coleman, yes, we did both. 
We dealt with the people who were supposed to have done it, and 
now we have dealt with the conditions themselves--or, I should 
say with the files. The conditions themselves are along way 
from being complete.
    Senator Coleman. Thank you. Thank you, Madam Chairman.
    Chairman Collins. Thank you, Senator Coleman. Senator 
Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks, Madam Chairman, and to our 
witnesses, thank you for joining us today.
    I apologize for not being here during the time that you 
were testifying, and what I am going to ask you to do is, if 
you will, just take a minute or two apiece and, as we approach 
the end of this hearing, just share with me what you would hope 
the Members of this Committee would take from this hearing, 
what we and our staff would take from this hearing as we go 
forward.
    Ms. Knisley. Senator Carper, and to the Members of the 
Committee, if I could summarize for me personally, I would go 
back and redo as much as we possibly can do. That is obviously 
not going to happen, and I apologize to the Members of the 
Committee and particularly, Madam Chairman, to you for the 
amount of time that it has taken us to fulfill our 
responsibilities to clean out these buildings.
    The matter of St. Elizabeths Hospital, as I said in my 
opening statement, is a very large and very personal concern. 
It was the crown jewel of psychiatric hospitals in the United 
States at one point in time, and since the 1960's, it has 
become the worst example of our treatment and care of persons 
with mental illness that I can imagine or that I have ever 
seen. And the lack of follow-up and follow-through by the D.C. 
Government during the last 20 years has been a tragedy.
    Mayor Williams, who fought valiantly to get this Department 
back under his control, has given us a very strong mandate to 
clean up the mental health system and to make good use of the 
hospital and to build a new hospital on this campus for the 
care of our patients, and we are proceeding as vigorously as we 
can to see that that occurs.
    Again, in a way, this is about Federal property today in 
the hearing, and it is a very important hearing, and we 
understand our responsibilities as part of that and our 
responsibilities to the care and treatment of the patients.
    Senator Carper. Thank you. Mr. Stamper.
    Mr. Stamper. Thank you, Senator.
    Several points--the Department of Health and Human Services 
has declared the property excess to our needs. Factually, we 
have not needed it since mental health care was transferred to 
the District in 1987. We are working with GSA to release the 
property and are following the Federal process that we have to 
follow to do that.
    The District has been responsible for maintenance and 
repair since the Use Agreement was signed in 1987. Our 
oversight, admittedly, of that Use Agreement was not what it 
should have been. The property is in bad shape, and we believe 
it has a high potential for redevelopment in the right hands.
    Senator Carper. Thanks very much. Madam Chairman, thank 
you.
    Chairman Collins. Thank you very much, Senator.
    Mr. Stamper, you testified that it would take approximately 
$20 million just to mothball the buildings. Is that the route 
that HHS is now pursuing? Would it make sense since, as you 
pointed out, this is one of the largest developmental tracts, 
buildable tracts, left in the city to instead partner with the 
private sector to try to develop this property instead of 
investing $20 million just in mothballing it--or are the 
buildings so far gone at this point that you have to mothball 
them first before you can go on to try to find a developer who 
might be interested?
    Mr. Stamper. It is a difficult question to answer because 
timing becomes important, and the rate of deterioration is so 
rapid because of where we are now. What I can say, though, is 
that, working through the Federal process, GSA has to determine 
if there is a Federal need for the property, and it is really 
going to be in their hands as the government's property 
manager. The Department of Health and Human Services does not 
have the legal authority to negotiate those kinds of 
partnerships.
    Chairman Collins. GSA would take over that responsibility?
    Mr. Stamper. Yes, ma'am.
    Chairman Collins. Another question that I want to ask you 
comes from a comment that was made by Ms. Knisley, and that is 
when she said that there was a concern about taking from 
patient care. And your written statement makes a similar 
comment. Didn't the Use Permit between the Department and the 
District of Columbia call upon the District to be fully 
responsible for all the maintenance, repairs, and operations of 
the West Campus?
    Mr. Stamper. Yes, it did.
    Chairman Collins. So presumably, when the District agreed 
to the Use Permit, it agreed to take over the maintenance of 
the buildings in a way that should have been separate from the 
money for patient care; is that not accurate?
    Mr. Stamper. I do not know how the District would normally 
run their budget, but certainly the Use Agreement requires them 
to maintain and preserve the facilities.
    Chairman Collins. Ms. Knisley, would you like to comment on 
that? My point is that when the District agreed to these 
conditions, it presumably knew what it was agreeing to.
    Ms. Knisley. Madam Chairman, I think that is part of the 
problem, and as a matter of fact, we are in litigation because 
in the due diligence phase of turning over the land and, again, 
an audit--and again, I was not here at the time--but an audit 
revealed that there was a certain amount of money that was 
required--I believe it was $55 million--but only $25 million 
was forthcoming as part of that transfer at that time.
    So the District took on this responsibility and agreed to 
certain responsibilities without fully appreciating the repair 
costs--not capital costs, but repair costs--that come out of 
the operating budget. Since I have been director, I have asked 
for--and Mayor Williams has granted and it is before Congress 
as we speak--additional capital funds so that we are not 
dipping into the operating funds, because in operating, you are 
moving between the day-to-day maintenance and your staffing in 
an operating budget. And what was happening was that they were 
sucking up these daily operating funds, because they did not 
have capital funds to do the kinds of repairs.
    We had two dozen water main breaks this winter that cost us 
about $2.7 million. I took that out of patient care. And I 
believe that is what happened over this period of time, that 
because there was not a capitalization of these repairs, it 
then fell naturally to the operating budget.
    Chairman Collins. Of course, one of the obvious problems 
here is that very small maintenance problems were not attended 
to which would have been inexpensive, relatively speaking, had 
they been dealt with at the time that they occurred, and 
because they did not, there is, for example, extensive water 
damage, which produced a host of other problems.
    It is just very troubling to see these buildings, this 
extraordinary asset that the Federal Government owns, and today 
the best estimate is that it will take $450 million to 
rehabilitate these buildings.
    Ms. Knisley. I would not like to have to buy the bottled 
water--even though we get very good Poland water, Madam Chair--
I would not like to have to buy bottled water for our patients. 
I would like to be able to use the water there. That is just an 
example.
    I have employees who have never had hot water in their 
entire careers--or patients--30 years, because we made a 
difference between hot water and fixing something else.
    Chairman Collins. I just want to end my questioning with 
one clarification. As I indicated to you, in each of the five 
visits that my staff made to the buildings, we still found 
confidential patient records, lab results, and during my visit, 
a corporate credit card, an American Express card, all sorts of 
materials that should not have been left there.
    Are you testifying today that the District has now removed 
and safeguarded all of those personnel and patient records that 
we saw?
    Ms. Knisley. Yes, Madam Chairman. There are two sets of 
items in the Administration Building, and I believe we are 
still removing material out of the basement and some items, but 
the patient records have been removed.
    The corporate credit card, by the way, was the firm that is 
no longer working for us. Our agency has no credit cards. And 
again, that just illustrates the fact that this whole operation 
had been turned over to a private company with no oversight of 
that company. The contract had no oversight even written into 
the contract over the company.
    Chairman Collins. That is also inexcusable but outside the 
scope of this particular hearing.
    Ms. Knisley. Absolutely. I understand, Madam Chairman.
    Chairman Collins. I would like to ask my two colleagues if 
they have any further comments or questions. Senator Coleman.
    Senator Coleman. Madam Chairman, just one. Actually, in 
reference or in follow-up to the question you asked Mr. Stamper 
about the possibility of some kind of public-private 
partnership for further development, those things do take time. 
I would certainly urge the Department to get in there and clean 
it up. Do that, and at the same time, you can be involved in 
some long-term planning. But development takes a while--it is 
great to have a long-term vision, but I think there are some 
immediate needs. And whether it is this property, St. 
Elizabeths, or others, I do hope the Department is looking to 
say, OK, what are we going to get done today to make sure that 
facilities are safe.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you, Senator, and thank you for 
your participation. Senator Carper.
    Senator Carper. I would simply say to you, Madam Chairman, 
that I look forward to taking a minute or so at the conclusion 
of this hearing just to talk about what other steps we might 
need to contemplate; if we could do that, I would appreciate 
it.
    Chairman Collins. Absolutely. Thank you.
    I want to thank our witnesses today. As I said when I began 
this hearing, St. Elizabeths was the most egregious example of 
a deteriorated Federal real property asset that our Committee 
has looked at, but there are many others that we found as part 
of our review. As the GAO testified, the number of vacant and 
underutilized Federal buildings or federally-owned buildings is 
truly astonishing. We have a lot of work to do in this area to 
make sure that the investment of Federal taxpayers in real 
property is safeguarded. So we look forward to continuing this 
investigation.
    We will be keeping the record open for 15 days for the 
submission of any additional statements or questions.
    I thank our witnesses for their cooperation. We look 
forward to working with you to ultimately produce a happy 
outcome for the reuse of the West Campus of St. Elizabeths.
    This hearing is now adjourned. Thank you.
    [Whereupon, at 11:15 a.m., the Committee was adjourned.]


                            A P P E N D I X

                              ----------                              


                PREPARED STATEMENT OF SENATOR LAUTENBERG
    Madam Chairman, this is an important hearing. The Federal 
Government owns or leases 3.3 billion square feet of building floor 
area and has real property assets worth nearly 330 billion dollars. 
That's a lot of property and a lot of money.
    I doubt anyone would argue that the Federal Government needs every 
square foot of that space. Clearly, the Federal Government could get 
rid of some of this property.
    There are ``opportunity costs'' when the Federal Government holds 
onto excess property: Taxpayers pay higher taxes to maintain the 
property and it's not being put to a more beneficial use. Moreover, the 
money used to maintain property we don't use isn't available to 
refurbish the property we do use. According to the General Accounting 
Office, the General Services Administration has a maintenance and 
repair backlog of somewhere between 4.0 and 5.7 billion dollars.
    Clearly, the time is ripe for real property reform.
    There is another subject which I hope will be addressed to some 
extent today: Terrorism and its impact on government buildings and 
other property.
    We have been told that we are winning the war against terrorism. It 
sure doesn't look like it to me. Just drive down Constitution Avenue or 
Pennsylvania Avenue. Barricades everywhere. Streets blocked off. It 
looks like a war zone. As best as I can tell, there are concrete 
barriers surrounding every government building in town except--
interestingly--the Internal Revenue Service! Putting flowers in these 
things isn't a big improvement!
    I realize much of this was done hastily, and is meant to be 
temporary. Let's hope so. One of the important characteristics of our 
democracy is openness. We have lost that since 9-11.
    I don't mean to trivialize the very real threat that modern 
terrorism poses but I would like to think that we have the creativity 
and skill to protect our buildings and other property without making 
Washington look like Berlin during the Cold War.
    I look forward to hearing from our witnesses about this. Thank you, 
Madam Chairman.

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