[Senate Hearing 109-274]
[From the U.S. Government Publishing Office]
S. Hrg. 109-274
NOMINATION OF HON. THOMAS C. DORR, TO BE UNDER SECRETARY OF AGRICULTURE
FOR RURAL DEVELOPMENT AND TO A MEMBER
OF THE BOARD OF DIRECTORS OF THE
COMMODITY CREDIT CORPORATION
=======================================================================
HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
APRIL 27, 2005
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
______
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
SAXBY CHAMBLISS, Georgia, Chairman
RICHARD G. LUGAR, Indiana TOM HARKIN, Iowa
THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky KENT CONRAD, North Dakota
PAT ROBERTS, Kansas MAX BAUCUS, Montana
JAMES M. TALENT, Missouri BLANCHE L. LINCOLN, Arkansas
CRAIG THOMAS, Wyoming DEBBIE A. STABENOW, Michigan
RICK SANTORUM, Pennsylvania E. BENJAMIN NELSON, Nebraska
NORM COLEMAN, Minnesota MARK DAYTON, Minnesota
MICHEAL D. CRAPO, Idaho KEN SALAZAR, Colorado
CHARLES E. GRASSLEY, Iowa
Martha Scott Poindexter, Majority Staff Director
David L. Johnson, Majority Chief Counsel
Steven Meeks, Majority Legislative Director
Robert E. Sturm, Chief Clerk
Mark Halverson, Minority Staff Director
(ii)
C O N T E N T S
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Page
Hearing(s):
Nomination of Hon. Thomas C. Dorr to be Under Secretary of
Agriculture for Rural Development and to be a Mmember of the
Board of Directors of the Commodity Credit Corporation......... 01
----------
Wednesday, April 27, 2005
STATEMENTS PRESENTED BY SENATORS
Chambliss, Hon. Saxby, a U.S. Senator from Georgia, Chairman,
Committee on Agriculture, Nutrition, and Forestry.............. 01
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member,
Committee on Agriculture, Nutrition, and Forestry.............. 02
WITNESSES
Dorr, Hon. Thomas C., of Iowa, to be Under Secretary of
Agriculture for Rural Development, and to be a member of the
Board of Directors of The Commodity Credit Corporation......... 08
Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa. 04
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APPENDIX
Prepared Statements:
Coleman, Hon. Norm........................................... 40
Farm Payment Scenario Table.................................. 207
Forms (CCC-477) of Mr. Dorr.................................. 196
FSA Statistics............................................... 194
Letter from Steven Phillips and James Little................. 325
Letters submitted by Senator Harkin.......................... 261
Letters of Support for Mr. Dorr.............................. 49-50
Letters submitted by the Congressional Black and Hispanic
Caucuses................................................... 41-47
Neil Harl, Charles F. Curtiss Distinguished Professor........ 204
OIG Report................................................... 303
Recorded Transcript of Mr. Dorr.............................. 201
Document(s) Submitted for the Record:
Cochran, Hon. Thad........................................... 272
Dorr, Hon. Thomas (Biographical Information)(Dorr Nomination
Hearing, March 6, 2002, can be viewed in the committee
file)...................................................... 282
Support and Opposition Letters..............................324-357
Talent, Hon. James........................................... 274
Questions and Answers Submitted for the Record:
Harkin, Hon. Tom............................................. 360
Coleman, Hon. Norm........................................... 366
NOMINATION OF HON. THOMAS C. DORR TO BE UNDER SECRETARY OF AGRICULTURE
FOR RURAL DEVELOPMENT AND TO BE A MEMBER OF THE BOARD OF DIRECTORS OF
THE COMMODITY CREDIT CORPORATION
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WEDNESDAY, APRIL 27, 2005,
U.S. Senate,,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The committee met, pursuant to notice, at 10:37 a.m., in
room 328A, Russell Senate Office Building, Hon. Saxby
Chambliss, [Chairman of the Committee], presiding.
Present or submitting a statement: Senators Chambliss,
Coleman, Crapo, Grassley, Harkin, Nelson and Salazar.
STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR FROM GEORGIA,
CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
The Chairman. The committee will come to order and we are
pleased to be here this morning to welcome the President's
choice for Under Secretary of Agriculture for Rural
Development, Mr. Thomas Dorr of Iowa.
Mr. Dorr, welcome to the committee this morning.
This will be the second hearing for Mr. Dorr. The first
hearing occurred on March 6, 2002, and everybody should have a
copy of the transcript of that hearing before them, as well as
the subsequent questions proposed by members of the committee
and the answers thereto.
I believe Mr. Dorr is well-qualified for the position that
he is being nominated for by the President. The rural
development mission for the Department of Agriculture is
extremely important. My colleagues and I have highlighted the
need to provide new economic opportunities for farmers and
ranchers across the United States. Rural America has been at a
crossroads for some time. The old ways of doing business in
farm country are not quite applicable to the information age
and modern agricultural markets.
Having practiced law in South Georgia for over 26 years, I
am intimately familiar with the challenges facing farmers and
ranchers every day. We need leadership at the Department that
can bring real-world experience to Government programs. Mr.
Dorr is a powerful thinker and he has already demonstrated his
ability to bring sound and well-established business principles
to USDA.
Mr. Dorr, I believe you have been at USDA now for the last
30 months, both as a recess appointee and most recently as an
adviser to the Secretary.
The position of Under Secretary of Agriculture for Rural
Development has been vacant for some time. It is simply
unacceptable in my view to let such a critical mission area
remain open while Congress and this committee spend time on
past issues that will have little or no relevance to the duties
of the position. In the meantime, housing, business,
telecommunications and utilities programs are without
consistent and determined leadership.
I believe the President has made a fine choice in Mr. Dorr.
This committee has already held an exhaustive hearing in March
of 2002, and the witness has spent more than 4 hours testifying
and additional hours answering written questions. We know more
about Thomas Dorr now than probably any nominee that has come
before this committee. I believe we should move forward and
confirm Mr. Dorr.
Since working at the Department Mr. Dorr has been a leader
at rural development and an important adviser to Secretaries
Veneman and Johanns. In his time at USDA Mr. Dorr has focused
on outcomes rather than outputs, improved outreach and employee
customer service, and enhanced the business practices of the
cooperative programs. Mr. Dorr understands the needs of rural
America because he is from rural America.
We must complete this process expeditiously. Senators must
and should be heard regarding their concerns, and substantive
information should be brought before the committee for
consideration.
I look forward to the proceedings and will look upon any
new information with interest.
Having said that, I also believe that the job Mr. Dorr has
done at the Department since being nominated by the President 4
years ago is certainly more important than events from 10 years
ago that have been thoroughly investigated, not only by this
committee but by the USDA Inspector General.
Mr. Dorr, welcome again to the committee. We look forward
to your testimony.
I would now like to ask my good friend, the distinguished
ranking Democratic member of the committee, Senator Harkin, if
he has any opening remarks?
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM THE STATE OF
IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND
FORESTRY
Senator Harkin. Thank you very much, Mr. Chairman. I want
to thank you for holding this hearing today, and thank you for
the courtesies that you have shown not only to me but to our
side of the aisle.
This hearing fulfills our committee responsibility to
review nominees carefully. It is no secret that I have major
concerns about this nominee, and I intend to inquire into these
matters at this hearing. You are correct, we had an extensive
hearing record in March of 2002. However, there had been
subsequent letters and findings and things that have not been
put in the record which I will put in the record during this
hearing today.
Mr. Chairman, I regret very much that so many problems have
arisen regarding the nomination of a fellow Iowan. This is not
a joyful thing for me to do, especially when it is a fellow
Iowan and especially when I know that my colleague, Senator
Grassley, is a strong supporter of this nominee, and I assume a
friend of this nominee, and Senator Grassley knows I have the
highest esteem and friendship toward him, and so this is not
something that I take any joy in doing. However, I feel that we
do have a responsibility to inquire into some of these matters,
and I will explain that further as we go along. Just as it
would be for anyone, it is a matter of real pride for me when
anyone from my State has been nominated to a high position in
our Federal Government. Regardless of party, in the 20 years
that I have been in the Senate I have never opposed an Iowan
who has been nominated to serve in any administration here in
Washington. This is the first one.
The Under Secretary for Rural Development is critically
important, as you said, Mr. Chairman, to family size farms and
ranches and to smaller communities all across America. The
responsibilities include helping build water and wastewater
facilities, financing decent affordable housing--I will repeat
that--financing decent affordable housing, supporting electric
power and rural businesses such as cooperatives. They also
include promoting community development, helping to boost
economic growth and create jobs and improve the quality of life
in rural America.
Therefore, I am concerned about Mr. Dorr's comments
regarding his vision of agriculture with 225,000-acre mega-
farms consisting of three computer-linked pods, or criticizing
the failure of Iowa to move aggressively toward very large,
vertically integrated hog production facilities. These are on
the record and we will get into those also.
Mr. Dorr made questionable comments about ethnic diversity
that have yet to be fully explained. The person in the position
of Under Secretary for Rural Development must also be
responsive and sensitive to the demands of serving America's
very diverse rural citizens and communities. That requirement
for the job cannot be over-emphasized in a department that has
been plagued with civil rights abuses of both employees and
clients. I am troubled that the nominee misrepresented the
farming relationship between Dorr's Pine Grove Farm Company and
two family trusts, and that, at least to this Senator's
observation, he has been unwilling to fully explain this
complicated farming arrangement.
As Secretary Veneman wrote to me in 2002, quote, ``Any
person who serves this Nation should live by the highest of
standards,'' end quote. That is why I am concerned about Mr.
Dorr's financial dealings with USDA.
I guess bottom line my concern is that what kind of signal
does this send to farmers and ranchers, people in rural America
who may partake of the many varied programs that the Department
of Agriculture has, whether it is deficiency payment programs
or any of the myriad of rural development programs? What does
it say to them if someone misrepresented their farming
operation in order to avoid payment limitations? What does it
say to them if this person is then elevated to one of the
highest positions in our Department of Agriculture, someone
whose family had to pay back almost $34,000 in deficiency
payments? As I said, basically, I guess that is my bottom line
concern, what signal does that send?
As I said earlier, I intend to inquire into those areas
that have concerned me. Perhaps today Mr. Dorr will be able to
enlighten me and the rest of the committee about his vision,
his tolerance and his integrity.
Thank you very much, Mr. Chairman.
The Chairman. Thank you, Senator Harkin.
Now I will turn to Senator Grassley for an introduction of
Mr. Dorr.
STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S. SENATOR FROM THE
STATE OF IOWA
Senator Grassley. I had the privilege of introducing Tom,
and I am very glad to do that, and particularly want to thank
him for his willingness to serve the people of this country
again, particularly considering the controversy that evolved
during his first nomination.
Thank you, Tom, for your continued willingness to do good
for our country.
Tom is a fourth generation dirt-under-the-fingernails
family farmer. He has also been a small businessman and
understands the demands and challenges of doing business in
rural America. He has been a community leader, as evidenced by
being chairman of the board of the Heartland Care Center, a
cooperative care center there in Marcus. Tom was instrumental
in starting the Iowa Corn Grower's Association, moving to
leadership roles in the National Corn Grower's Association. Tom
served on the board of the Chicago Federal Reserve, and has
also served on the board governing our three State
universities, the Board of Regents of the State of Iowa, one of
the most prestigious jobs in our State and one where Senator
Harkin's wife has now been appointed to a very hard job to do,
very little reward for it, but a great opportunity to make a
difference to the people of our State.
I also want to thank Tom for his deference to me on our
disagreement in this nomination and the respectful way in which
he has responded to our differences, or at least not make a big
deal out of our differences. Thank you, Tom.
Now, Tom Dorr's leadership ability has been demonstrated
and utilized to the benefit of his community and our State time
and time again. A family man, married to Ann for 35 years, son
and married daughter and granddaughter living in Iowa. He has
the same desire we do as Senators, to improve the economy of
rural America so his family can have all the benefits of the
quality of life that rural America brings.
Tom has the financial expertise and business savvy required
to run an organization as large as the complicated USDA Rural
Development. This agency is basically a large bank, after all,
with loan portfolio of $90 billion. That is as big as Wells
Fargo, Chase Manhattan and bigger than most banks in America.
This agency has 7,000 employees located in 800 offices. Not
just any person can move from the farm to take over an
organization of this size, but Tom Dorr did run this
organization for 6 months, from August 2002 until December
2003. From the stack of letters that I have received, he did it
very well. He did it so well that Secretary Veneman retained
him as Senior Adviser when his recess term expired, and
assigned him additional duties in other areas.
Because of his recess appointment we have a unique
opportunity to examine his track record. He served 15 months
Under Secretary of Rural Development. I have heard from many
people at USDA about his accomplishments. This was not only
Secretary Veneman, but also career staff and groups who
originally had concerns. They talk about his leadership, his
vision, his intellect, and most importantly, his commitment to
rural America. When I hear of the comments like this from peers
and those who work for him, we should all take particular note.
Let me describe a few of the results that have been brought
to my attention.
No. 1. He expedited the release of 762 million of water and
wastewater infrastructure funds provided in the 2002 Farm bill,
and he did that in just 3 months.
No. 2. He led the effort to complete the rulemaking process
and order $1-1/2 billion of broadband program could begin
taking applications this year. He believes that if Americans
are to live locally and compete globally, that it is imperative
to wire the country for technology access as it was to
electrify it 60 years ago.
No. 3. In order to facilitate, review an announcement of
$37 million of value-added development grants, he is using
private sector resources to expedite the process.
Four. In order to deliver financial grants authorized by
the Delta Regional Authority, he helped develop and get signed
a memorandum of understanding between Rural Development and
Delta Regional Authority. This will Rural Development to assist
in delivering joint projects at no added cost to Delta
Regional.
Five. He facilitated the developments of a memorandum of
understanding signed by Secretary Veneman and Secretary
Martinez, between Department of Agriculture and HUD, that
focused on better serving housing and infrastructure needs.
Six. He has developed a series of initiatives with HUD that
will allow Rural Development to more cost effectively meet the
housing needs of rural America. These will allow the Department
to provide greater access to housing for all rural America, but
especially minority rural Americans in the fulfillment of the
President's housing initiative.
He has initiated a review of multi-family housing programs.
This has included the hiring of an outside contractor to
conduct comprehensive property assessments to evaluate the
physical condition marketing positions and operational status
of more than 17,000 properties USDA has financed, while
determining how best to meet the needs of low-income citizens
in rural America.
He has initiated a major outreach program to ensure USDA
Rural Development programs are more easily made available to
all qualified individuals, communities and codified
organizations. This marketing and branding initiative has also
played an important role in changing the attitude of employees
to concentrate on customer service and proactive outreach with
emphasis upon reaching out to minorities.
Although this is an incomplete list of accomplishments, it
is easy to set that Mr. Dorr did a great job in the short 15
months he served Rural Development. Clearly on paper Tom did a
great job.
Let me read a few comments from folks who worked with Tom.
First, Mortgage Bankers Association. Quote, ``We support Mr.
Dorr's nomination as Under Secretary of Rural Development
because we have found him to be an engaged leader with true
commitment to housing and community development needs in rural
America.'' This organization certainly is able to recognize if
anyone has the ability to understand the financial issues and
have the skill needed to run this agency.
The next quote is from the Council of Affordable Rural
Housing. Quote, ``On behalf of our members throughout the
country we're writing you today in support of the nomination of
Thomas C. Dorr to be Under Secretary. There is a need for
strong leadership and determination to forge long-term
solutions preserving this important investment in rural
America.'' That is Robert Rice, Council of Affordable Rural
Housing.
I have many more letters, probably 50 or more from
organizations all across the country asking us to confirm Mr.
Dorr. In addition, I have a letter signed by many of the
leading national agricultural organizations such as the Corn
Growers and American Farm Bureau.
There is another issue that I feel compelled to address,
and this is during the 2002 hearing and in the floor debate in
the Senate. Concerns were expressed regarding Tom's position on
minority issues. I would like to reference letters for the
record this morning that would alleviate lingering concerns. I
have several letters from minority organization leaders
expressing their support for Tom Dorr's confirmation.
The first letter is from the Federation of Southern
Cooperatives, and you would recall that they had a
representative testify against Mr. Dorr in the 2002 hearing.
Quote, ``I am personally endorsing Tom Dorr's nomination
because of his deep interest in rural development. He has made
several visits to the communities when in the Federation's
network, and has a great understanding of the needs of rural
poor communities. He is a man for the job.'' Ralph Paige,
Executive Director.
Another letter to quote from, this is from the Northeast
Louisiana Black Farmers and Landowners Association, Dexter
Davis, President. ``Mr. Dorr has made great accomplishments in
the position and has earned the trust from rural Americans to
carry out his mission.''
From Calvin King, President and CEO of Arkansas Land and
Farm Development Corporation, quote, ``I met Tom Dorr in
Washington, DC when he was serving as the Acting Under
Secretary and was impressed with his patience for small
farmers. Quite frankly, when I first met Tom I was not
expecting him to be particularly supportive of our needs, but
over the years we have worked together, have found him to be a
great ally and tireless fighter for the causes that we both
support.''
From Fernando Burkette, Black Farmers and Agricultural
Association, Arkansas Chapter. Quote, ``We hold Mr. Dorr as a
valuable asset to our organization and his future. He is one of
the individuals who has played a major role in bridging the gap
between the small limited resource and minority producers for
our organization and the USDA.''
I have many more others that I could read, but you get the
point. Thankfully, these organizations were very concerned to
come forward after they had a chance to get to know and work
with Tom.
With your indulgence, Mr. Chairman, I want to also read
portions of a letter to Mr. Dorr by Dr. Dennis Keeney, former
head of the Leopold Center at Iowa State University. Many of
you will recall that Dr. Keeney was asked to testify against
Mr. Dorr in 2002. Quote: ``I write to apologize for appearing
at your hearing in 2002. It was something I should have said no
to right off, but did not. Then it drug on and I had to go
through with the appearance or lose face. That still did not
make it right. It was during the reading of this book, The
Natural Misunderstood Presidency of Bill Clinton, that I
realized that I had become part of a mud-slinging character
assassination. This is not the type of legacy that I would like
to leave. You have been misunderstood and made a poster child
for big agriculture. I am sure that that has not particularly
bothered you, but I have not been proud of my little part in
painting that picture.'' Dr. Dennis Keeney, Emeritus Professor,
Iowa State. I thank Dr. Keeney for sharing his letter.
In closing, Mr. Chairman, I want to ask that this committee
set aside the politics of the past and concentrate on the real
issues affecting rural America and that Tom Dorr would be
confirmed for this important job. We have neglected our duty of
going 4 years without having a confirmed Under Secretary. To
think that while all this debate was going on in the Senate we
have had four different individuals serving in the Under
Secretary position. None of them were confirmed by the Senate.
This is not a good way to run a business or a large complicated
agency as important to the States as the U.S. Department of
Rural Development.
Tom has been under the microscope since his original
nomination, and everyone who has looked in the lens has offered
praise for his work and accomplishments. Thankfully, we do not
need to speculate about whether Tom would do a good job or not.
Tom has already demonstrated how he can do it and what he has
done, and will likely continue to do the same great job as a
confirmed Under Secretary. How often do we actually get to
judge a nominee by their proficiency in the job? Tom is a sure
thing. Rural America is regaining its economic, social and
cultural momentum. It would be a shame to deprive it of the
leadership that he can give at this critical juncture.
We have a unique second chance here today, Mr. Chairman. I
hope that we will set aside our differences, do what is best
for our rural citizens, our State and our country. it is an
honor for me to introduce Mr. Dorr to you as the new chairman
of the committee, Senator Chambliss.
The Chairman. Thank you, Senator Grassley.
Mr. Dorr, it goes without saying that to be introduced by
one of the more respected members not just of this committee
but of the U.S. Senate says an awful lot about you and your
appointment to this position.
Let me say, before we turn to Mr. Dorr, that we have
received a letter dated April 26, 2005, and let me just read
this letter. It says, ``As Members of the Congressional Black
Caucus and Congressional Hispanic Caucus, we write with concern
to the nomination of Mr. Thomas Dorr for Under Secretary of
Agriculture for Rural Development. Attached please find copies
of letters sent last year by members of each caucus. The
concerns raised in these letters are yet to be adequately
addressed. We ask that these issues be raised and probed prior
to confirmation of Mr. Dorr.''
We are going to put this letter with the attached letters
in the record unless there is objection. Hearing none, they
will be so put in the record.
[The letters sent last year by members of the Congressional
Black and Congressional Hispanic Caucus can be found in the
appendix on page 41.]
The Chairman. In addition we have received letters from 85
organizations, farm organizations around the country and 14
individuals supporting the nomination of Mr. Dorr. Likewise, we
will put this list of the 85 organizations along with their
letters, and the 14 letters from individuals supporting Mr.
Dorr in the record unless there is objection. Hearing none,
they will be so put in the record.
[The letters from 85 organizations and 14 individuals
supporting Mr. Dorr can be found in the appendix on page 49.]
The Chairman. Mr. Dorr, would you please stand and raise
your right hand? Do you swear that the testimony you are about
to present is the truth, the whole truth and nothing but the
truth, so help you God?
Mr. Dorr. I do.
The Chairman. Thank you. Let me ask you the mandatory
question before we turn to you for your testimony. Do you agree
that if confirmed you will appear before any duly constituted
committee of Congress if asked?
Mr. Dorr. Yes, I will.
The Chairman. Mr. Dorr, thank you very much again for being
here today. We look forward to your testimony and you may
proceed.
STATEMENT OF HON. THOMAS C. DORR, OF IOWA, TO BE UNDER
SECRETARY OF AGRICULTURE FOR RURAL DEVELOPMENT AND TO BE A
MEMBER OF THE BOARD OF DIRECTORS OF THE COMMODITY CREDIT
CORPORATION
Mr. Dorr. Thank you, Mr. Chairman. Chairman Chambliss,
Senator Harkin, members of the committee, I thank you for this
opportunity to again come before you. Senator Grassley, I am
most appreciative of your kind and gracious introduction. I am
deeply honored by the nomination of the President to serve as
the Under Secretary for Rural Development.
I have tremendous respect for the mission of Rural
Development and deep admiration for its employees. It is with a
great deal of humility that I appear before you today in this
confirmation process. I would like to take just a brief moment
to introduce my wife of nearly 34 years, Ann, right behind me.
Our daughter Allison Kleis, her husband Karlton, our
granddaughter Emerson, as well as our son Andrew, all of Des
Moines, were unable to be with us. My father is deceased and
although my 83-year-old mother Margaret Dorr would like to have
been here, her health precludes that. However, my parents, my
wife, and children's guidance, support and love has truly been
instrumental in my desire to both continue to serve rural
America and to be with you here today.
Since May of 2001, I have been honored to serve as a
consultant and Senior Advisor to Secretary Veneman and now
Secretary Johanns. President Bush appointed me to serve as
Under Secretary for Rural Development from August of 2002
through early December of 2003, and I deeply appreciate this
decision to nominate me once again for this important position.
I take the confidence that he has shown in me with the utmost
seriousness. Prior to serving at the Department of Agriculture
I was a full-time farmer and businessman from Marcus, located
in Northwest Iowa.
My great-grandfather, a German immigrant, was the first
homesteader in Amherst Township in Cherokee County. A single
large tree marks the spot near the creek where he built his
first sod home. When I visit that tree I am continually
reminded of how much agriculture has changed. Farming is the
first and noblest of professions, but it is one that is
constantly changing. You are constantly reminded that many
forces in farming are outside of your control and this
uncertainty has made it necessary for farmers to develop
relationships with their families and neighbors in order to
weather these many challenges.
My father was an early innovator who tried to find new ways
to manage risk through diversification. He was interested in
value-added concepts before they were described as such. He and
my uncle owned and operated grain elevators and feed mills.
They also had hatcheries, grow-out facilities, and even a
poultry processing plant that allowed them to slaughter and
ship frozen turkeys throughout the country. Yet, because of the
ever-changing economic landscape, in many cases they were
forced to liquidate these businesses during the 1950's and the
early 1960's.
I am the eldest son in a family of 9 children. My father
and I were especially close, so upon my return to the farm in
1971, my dad and my uncle entrusted me to oversee the farming
operation. They placed some of their land in trusts in order to
provide for both my mother and aunt, as well as pay college
expenses for the children of both families. This was a
tremendous responsibility, and one that has not been without
its challenges, but it has not been easy to fulfill the
parents' wishes while also trying to respond to the needs of 8
brothers, sisters--8 loving brothers and sisters and 5 cousins.
In my statement to this committee 3 years ago I took the
time to outline my background in farming and involvement in a
variety of public service venues. Today though I'd like to
share with you more about my passion for rural America and what
I have learned during my tenure at USDA.
First, during the period in which I served as Under
Secretary, I was blessed to lead a talented and dedicated staff
of professionals located at not just USDA's Rural Development
headquarters here in Washington, DC, but in our service center
in St. Louis and in our 47 State offices and subsequently 800
local offices located across the country.
It was gratifying, it was truly gratifying to watch these
energetic and committed people work together as a team. We made
great progress in expanding our outreach to qualified
individuals and communities, making them aware of, and
assisting them with our many USDA Rural Development programs.
We put a special emphasis on minority outreach, and we began to
tackle some very serious program issues that were there when we
arrived.
Our overriding goal during my time leading USDA Rural
Development was to be the ADVOCATE for rural America, and we
took that objective very, very seriously. I witnessed many
examples of leadership and creativity from our team and our
constituents as well, who worked with individual communities,
which often helped facilitate and bring together a multitude of
multiple funding sources such as Federal, State, nonprofit,
local and private.
I would like this morning just to share briefly with you
two examples of the many that I witnessed in person of the
successes that we encountered at Rural Development.
The first is the Guadalupe Garcia family, who were part of
a self-help housing program in Anthony, New Mexico, which is a
small Colonias community just outside El Paso, Texas. Mr.
Garcia is a machine operator with Tyson Foods. He and his wife
I believe had two children. I happened to be fortunate to be
there when they moved into their new home for the first time, a
home with running water and central air and heating. It was
truly a very emotional event, not just for them, but for all of
us who were able to be there.
However, the unique aspect of this program is that it was a
collaborative effort between the community, between USDA Rural
Development, the financial institution and the Garcias and a
number of others involved in that self-help project. The
remarkable thing was that a minimum of Federal investment was
required, although there was plenty of sweat equity provided on
the part of the Garcias. The result was a safe secure house, a
stronger family that ultimately becomes part of a very viable
rural community.
The second example, although a bit more traditional, is
equally unique, and that was my ability to attend the grand
opening of something called Meadow Brook Farms, which was a
producer-owned and value-added cooperative that was involved in
pork slaughter--it is involved in pork slaughtering and process
in Rantoul, Illinois.
Starting back in 1998, James Burke, now the CEO of the
company, and Melvin Weck, who is the Executive Vice President
of their IT operation and is also a lifelong farmer of the
area, were part of a uniquely organized producer cooperative
that worked with local government, bankers and the State and
national USDA Rural Development staff, amongst others, to put
together this project. The effort has resulted in a facility
that in 2004, its first year of operation, processed nearly
690,000 hogs, utilizing a state-of-the-art animal ID and
tracking system developed by these producers. The 200 producer
members have a better market for their quality hogs, are
building equity in the new venture, and have created over 300
new jobs in the rural community.
These two examples demonstrate the great work this Agency
can accomplish with the support from the administration and
Congress, plus that of a motivated and well-trained staff
working in conjunction with the local communities all across
rural America.
We are entering an exciting time in rural America. In my
view many--in many areas the out migration trends are in fact
being reversed. We are seeing more young people staying in
their hometowns to raise their families and care for aging
parents, and boomers are moving back to smaller towns for the
quality of life.
We are also seeing significant gains in value-added
agriculture, allowing smaller operations and co-ops to
successfully compete in niche and emerging markets. This
development has not only raised income for area farmers but
also for many local investors. At the same time it has created
new jobs in these communities and provided additional
incentives for young people to not just stay but frequently
move back to rural America.
There are plenty of exciting--there are plenty of other
exciting developments on the horizon for rural America. The
list is virtually endless, limited only by our creativity and
our dedication to developing significant new income sources for
America's farmers, ranchers and local business people, which
ultimately provide jobs and a better quality of life for those
who choose to live in our rural communities.
I understand fully how important USDA Rural Development
programs are to the citizens in your States. This wonderful
Agency has the tools to impact so many lives in a positive way
at a very low cost to the taxpayer.
If confirmed, I pledge to work tirelessly with you to make
the vision of rural rejuvenation a reality. In that I suspect I
will be, second only to Secretary Johanns, the most energetic
champion at USDA for the future of rural communities.
I thank you for holding this hearing and your consideration
of my nomination, and I look forward to answering any questions
you may have.
The Chairman. Thank you very much, Mr. Dorr.
Let me start out this morning by asking you a question that
I do not expect you to give me a detailed answer on relative to
your farming operation. During the past 4 years and in the 2002
hearing, much has been made of your farming operation and your
farm structure. I expect you to be thoroughly examined about
some aspects of those today. I think it would be helpful if we
just go back to the basics, and let you have the opportunity to
explain, as you have somewhat alluded to in your statement, as
to how your farming operation was structured. How your
operation related to the family trust that will be referred to
later in the questioning.
Mr. Dorr. Thank you, Senator Chambliss. When I moved back
to the family operation in 1971 it was composed of something in
the neighborhood of 1,000 or 1,100 acres along with some grain
operations as well. They were owned and operated jointly by my
father and uncle.
From that point on I was engaged in the business, starting
as an employee, as a hand, ultimately evolving into more of a
manager, and finally the full-time operator/manger of the
operation, taking care of all of the essence of all the
business opportunities.
The Chairman. Mr. Dorr, what timeframe are we talking about
here?
Mr. Dorr. This evolved from 19--that evolution was from
1971 through say 1975 to 1978.
The Chairman. OK.
Mr. Dorr. In late 1976 my father and my uncle, in their
concern to maintain the integrity of the family farm, embarked
on a series of estate planning initiatives, and the outgrowth
of that was the formation of two family trusts that have been
discussed extensively in 2002 and since. These two family
trusts were designed as generation-skipping trusts to maintain
the integrity of the family operation for anyone who cared to
stay and operate the family farm.
Those were the only two trusts outside of others that
evolved from the process of probating the estate that were
involved and that were developed. There were a couple of other
family corporations that had been there for a number of years,
and we grew the farm then from the early 1970's to around 2,200
acres of family owned property by the time I left in 2001, and
we were renting and custom-farming other properties as well.
The Chairman. To your knowledge did the FSA, or what I
guess then was ASCS maybe, USDA Inspector General's Office, or
any other agency of the Federal Government ever accuse you of
deliberately or knowingly falsifying documents or providing
misleading information to the Federal Government, particularly
to FSA?
Mr. Dorr. No.
The Chairman. USDA Rural Development has a staff of more
than 7,000. It has a $90 billion loan portfolio. As you have
stated, it is the advocate for rural America. It is the venture
capitalist, and it builds the infrastructure for businesses,
hospitals, communities and families. It is a crucial mission at
USDA. In your opinion what makes you qualified to be Under
Secretary for Rural Development?
Mr. Dorr. Senator, I left home in 1964, went to college,
worked for a large corporation for about 3 years and returned
to the family farm I believe in, as I said earlier, in 1971.
That experience in working on that farm, that grain
company, growing up with it, working with a number of
associates led me to then ultimately get involved because of my
interest in the entirety of the rural community, and quite
frankly, with a lot of urging from my parents, who believed
strongly that we needed to give back to our communities, to get
involved with a number of things that migrated from the county
level, County Board of Review, all the way up to the Iowa Corn
Growers, to the National Corn Growers.
These iterations of experiences gave me a fairly
significant insight I believe into what I felt were a number of
the unexplored opportunities that could positively impact rural
America. With that insight and those opportunities and those
experiences over about 30 years, I felt that I had the
qualities and the qualifications to facilitate the President's
agenda serving in this position.
The Chairman. For nearly 70 years Rural Development and its
predecessor agencies have been providing assistance to rural
America. In each succeeding farm bill we provide additional
resources and emphasis on Rural Development. Clearly it is an
important mission area at USDA. What is your vision for Rural
Development over the next few years, and if confirmed, what
will you do to make that vision a reality?
Mr. Dorr. That is a terrific question and I appreciate it.
The opportunity in rural America to increase--the vision at
Rural Development is very simple, and this was enunciated
shortly after I became the Under Secretary, and that was to
increase economic opportunity and improve the quality of life
for all rural Americans. There has been a significant
transition taking place throughout rural America that makes
these opportunities possible. We can improve the quality of
life because Rural Development essentially is what amounts to a
venture capital bank for all of rural America.
When I got there they had a loan portfolio of about $60
billion. Today it's $90 billion. The thing though that makes
this all more likely to happen is that first of all we have
some significant people in this organization. We have people of
great caliber and integrity, and the interesting thing about it
is that these are people that are State and local driven. They
understand what's going on at the local level, so what happens
is we drive ideas from the bottom up.
Second, the programs at Rural Development run the gamut
from the traditional REC, rural water and waste programs to the
very unique new IT. We have information technology systems,
venture capital, renewable energy. There are a whole array of
opportunities that this rural resource base and the people in
it have an opportunity to participate in with great economic
opportunity.
Finally, we have developed an outreach program that was
designed to make certain that we reached out and identified
those who really were qualified for our programs, both as
individuals and communities, CBOs and others, that were not
accessing them at the time, and this outreach program did a
couple of things. It increased our understanding of our system.
It made us more available, and it clearly energized those who
were benefiting from us.
Finally, tying all that together, what I found was that if
we paid close attention to the President's management agenda,
really zeroed in on performance budget integration, we could
develop systems to very quickly respond to the changes that
were taking place in rural America as they accommodated these
programs. There is a great deal of opportunity out there. I've
probably gone on a little bit long. These programs give us a
great deal of flexibility.
The Chairman. That obviously comes from your heart too, Mr.
Dorr, which is great to hear. Without question it can be said
that when you look across America farming is farming
irrespective of what part of the country you come from. Clearly
there are differences in the methods of farming, there are
different crops grown in different areas of the country. You
come from the midwest part of the Country where you grow a lot
of soybeans and corn. Senator Coleman comes from an area where
there is a lot of dairy, a lot of wheat grown. Senator Salazar
comes from an area where a lot of wheat, maybe a lot of
livestock is produced. I come from an area where there's a lot
of row crops and a lot of vegetables grown. Clearly there are a
lot of differences there that somebody at USDA has to look at
from the aspect that farming is farming irrespective of what
part of the country that it is located.
Assuming you are confirmed in this position, are you going
to be looking at farming as farming all across America, not
with respect to your personal interest relative to any
particular crop, or any particular section of the country? Are
you willing to treat all farmers, all agri-business people and
the implementation of Rural Development provisions of the Farm
bill fairly and equally?
Mr. Dorr. Senator, absolutely, and my record of the 15 or
16 months I served as Under Secretary would more than justify
that.
The Chairman. Thank you.
Senator Coleman. [Off microphone]--without objection. I
fully support this nomination. I have heard from all my ag
groups and rural advocates and they support it, and I just
wanted that to be on the record before I leave.
The Chairman. Certainly, without objection, Senator
Coleman.
We are going to proceed a little bit differently. Senator
Harkin and I have agreed that he will have an extensive
opportunity to examine Mr. Dorr, and that being the case,
rather than giving Senator Harkin 5 minutes, 10 minutes,
whatever he might want to start with, he is in agreement to
allowing other Senators to ask questions, since you may have to
be somewhere else today.
We will move to Senator Salazar first for any questions
that you might have.
Senator Salazar. Thank you very much, Mr. Chairman
amendment Ranking Member Harkin, and thank you for your
leadership on agricultural issues and the leadership of this
committee.
I also want to say to you, Mr. Dorr, thank you for your
service to our country and for coming before this committee
this morning. I must say that it is a mark of tenacity to come
back because you feel so passionately about the job and for
rural America, and for that, I acknowledge and laud you for
those efforts.
You and I had a good meeting last week. I very much
appreciated the conversation that we had where you stated some
of the things that you have talked about this morning, the
importance of rural America and getting a revitalized rural
America. We also spoke about my own maiden speech on the floor
of the U.S. Senate, where I talked about the forgotten America.
I am open to the possibility of voting for you as this
nomination moves forward. I do however want to go through this
process and to hear the concerns that Senator Harkin and others
have stated, and to also study the responses that you have.
Let me just say at the outset that I asked for a letter
from you that would articulate your vision and your program for
what you wanted to accomplish in rural America in this position
that you have been nominated for. I was disappointed that I did
not get that letter on Monday. My staff called on Monday and
again yesterday, and I still have not received that letter. The
one thing that I will ask of you, Mr. Dorr, is that as we work
together on this mutual agenda of rural America, I want to have
the kind of relationship with you where if I request something,
I want some response. At the end of the day this is a joint
undertaking between the Executive and the legislative branches
of Government. I would appreciate getting the letter that I
requested by the end of the day today.
Let me also say that I have read some of the materials, I
am not as versed as the people who have been on this committee
before and who have gone through these hearings in the past. I
am certain that Senator Harkin, in his hour of inquiry will
touch base on many questions.
There is one question in particular though that I want to
ask. That is a question relating to the comments that were made
on diversity in a speech that you gave. This is from a speech
that I know has been talked about--I have a copy of the
transcription--in which you apparently were talking to a group
of farmers.
The comment that I have here is from when you made the
statement that there are, I quote, ``...if they're not the
three then two of these are the three--and would be Carroll
County, Sioux County and Lyon County. You will notice when you
get to looking at them that they are not particularly diverse,
at least not ethnically diverse. They are very diverse in their
economic growth, but they have been very focused, very
nondiverse in their ethnic background and their religious
background.'' ``There's obviously something there that has
enabled them to succeed and to succeed very well.''
I know very well, having been involved as a prosecutor,
having worked on a lot of issues, and having been in the public
world, that sometimes statements are taken out of context. I
have not read the letters that Senator Chambliss spoke about
from the Congressional Hispanic Caucus or the Congressional
Black Caucus, but I would like you to talk to us about your own
views of diversity and your own views of inclusion of people
from all backgrounds in the things that you do and how you will
proceed on that issue in the future, looking ahead, for the
U.S. Department of Agriculture and the position that you have
been nominated for.
Mr. Dorr. Sure. First of all, let me simply say that I do
believe the letter was delivered if not on Monday, yesterday. I
apologize if it wasn't there on Monday, but I believe the
letter was delivered yesterday.
Second, those comments that you referred to were not with a
group of farmers. It was actually a the university event that I
was asked to be at, and review a proposal relative to a grant
of money that had been given to the Agronomy Department of Iowa
State University.
Third, as you've clearly enunciated, they were in my view
taken out of context. Probably it's important to reflect as
much as anything on the opportunities that I've had to work
with a number of minority organizations, sustainable small farm
groups and others since I've been here serving at USDA's Rural
Development. No. 1, that I related very well. I have a--
contrary to what perhaps the public perception may be, a very,
very big heart when it comes to working with people who have
frequently been less fortunate or had less opportunity than I
have. I have been a very blessed guy. I know that. I've been a
very fortunate fellow to have a loving family by and large and
many opportunities.
One of the things that I've encountered at Rural
Development is there are a lot of old ongoing issues that
everyone is struggling with, very honestly so. One of the
things that I found, as an example, and as a result of
attending a listening session at Alcorn State University, this
wasn't where it first came up but it was where a lot of these
things galvanized, is the access to credit issues and a number
of other things that make it difficult for many in the minority
community to actually aggregate equity.
One of the problems is that there are very few African-
American appraisers or title company owners or surveyors or
others who are able to actively work with members in their
community that they trust.
Senator Salazar. Let me if I may, because I do not want to
take up more time here than--my red light is already on and the
chairman is being very indulgent in my time here.
Let me put a more focal point on my question. For me this
America of ours has been very much an America in progress, from
the Civil War, to the 13th and 14th Amendments, to Brown v. the
Board of Education and to getting where we are today. We are
not a perfect country, but we certainly are a country that has
made tremendous progress. I want you to specifically answer
this question for me. Take the African-American farming
community, describe to me in a couple of minutes what your
agenda would do to make sure that the African-American farming
community receives the benefits of the work that you would be
doing at USDA? Focus it on African-Americans.
Mr. Dorr. We would work within the framework of the
National Centers of Excellence, the 1890's Institutions and the
other organizations that work with USDA to make sure that we do
a good job of making certain they have the tools to participate
in the American dream, that they have the ability to leverage
their equity resources and other things that they utilize to
grow and build their communities, their families, their farms,
and build and own their own homes.
Senator Salazar. Now, spin that out a little bit in terms
of the specific action items that you would take as the Under
Secretary of Agriculture to accomplish that vision. You started
by saying access to capital----
Mr. Dorr. Access to capital. We have to do a better job of
facilitating the development and training of folks within those
communities who have the ability to be surveyors, be people
that the community trust and can work with so that they can
build equity. We'll have to look at all of the programs that we
have available and make sure that they are as friendly and user
friendly as possible within that community.
Rural Development does not directly participate in farm
program activities at USDA, but in the context of our community
development programs and other things, we will make sure that
they function and function well within those communities.
Senator Salazar. Let me ask you with respect to staff and
diversity of staff within USDA. What kinds of efforts would you
undertake to ensure that there is diversity within the staff?
Is that an important issue to you? Is it something that you
would aggressively undertake? Also what have you done in the 3
years that you have served there as Senior Advisor to achieve
diversity?
Mr. Dorr. Diversity has always been a top agenda item
within the Department. I've worked very, very closely with the
Assistant Secretary for Civil Rights, Vernon Parker, and a
number of others on these issues. I see no reason why we
wouldn't continue to do that.
Senator Salazar. Thank you, Mr. Chairman.
Thank you, Mr. Dorr, for your responses.
The Chairman. Senator Grassley.
Senator Grassley. President Bush has nominated you to be
Under Secretary for this Agency three different times. During
your time as nominee you have endured intense public scrutiny
of your farming operation and statements about you as a private
citizen. Yet you sit before us again today responding openly
and honestly to every question that is asked of you. Personally
I have no doubts that you are the right person for the
position, and I applaud President Bush for his persistence in
continuing to nominate you. After all this, I am compelled to
ask why do you want to be in this position?
[Laughter.]
Mr. Dorr. I've even asked myself that sometimes.
I deliberated that at length, Senator. I deliberated at
length with my wife and my family. As I said in my comment to
Senator Salazar earlier, I've been a very blessed guy, had a
terrific, terrific father and mother, terrific wife, and I've
had a number of terrific experiences, and the thing that I know
more than anything else is that rural America has had some
difficulties. Rural America's been in a real funk since the
late 1970's and emerged into the ag crisis of the 1980's. In
the late 1990's and the early--in the early 2000's and on
through the 2000's it became abundantly clear that with the
advent of technology, of bandwidth access, access to knowledge
and information and capital, it was creating an untold number
of new and undeveloped opportunities for those who live there,
and quite frankly, in many cases, for people who I had run
into, who were moving back into these areas.
In my view, particularly after driving to work every day in
this moving parking lot in Washington, DC, it's clear to me
that rural America and this evolving environment in which we
have access to technology, when we have energy problems, we
have access to renewable energy opportunities, and a whole host
of things that only rural America truly has the ability to
provide. It's too great an opportunity to pass up and not try
to make sure that many of my fellow citizens in rural America
can participate in this economic growth and activity. It's that
simple. There's a lot of, a lot of hope out there and I want to
be part of it.
Senator Grassley. Let me ask you about a specific program
and a specific problem. I need to compliment Senator Harkin for
bringing this to my attention last night at a rural development
conference or capitalization conference that he and I hosted.
Senator Harkin mentioned that the Department has been slow
allocating the $2 billion available for broadband and that
there is still approximately one and six-tenths billion dollars
at USDA. Could you please tell me what you would do as Under
Secretary to ensure that this program is developed and managed
to its full potential? I guess I would add to that, because
Congress made a decision this money ought to be spent, and
presumably it is not being spent. I rely upon Senator Harkin
for that judgment, not my own. What would you do to get that
money out?
Mr. Dorr. Well, that's a good question. The 2002 Farm Bill
was passed in June of--or May 1902, signed into law by the
President May 1902. There was a very significant effort placed
early on to conduct a field hearing to find out what sorts of
things needed to be addressed in the deployment of those funds
and that technology and making access to that new program.
It's a unique program, and quite honestly, there have been
a number of things that have occurred the last year that I
frankly have not been involved in, not serving as the Under
Secretary, not having any decisionmaking authority with regard
to that. The thing that is important to remember in the
broadband program is that it is unique, traditionally the rural
utility system and the rural telecom programs were largely
loans made to sole providers in rural areas on long-term
assets, and those loans--there was a process developed and they
understood those clearly. The technology involved in deploying
broadband to do a couple of things, No. 1, get the money out
quickly, and No. 2, make sure you don't make bad loans, and
then ultimately have to deploy those resources on assets that
frequently have life spans of only 5 years or on out to 30
years is a complex new way in which you have to deal with this
matter.
If I am confirmed and had the ability to get engaged in
this, I would frankly go to the outside, seek some outside
expertise to help us get a better handle on how to analyze
these loans so that we could deploy them in a more rapid and
more effective and efficient manner, and yet maintain the
integrity of the program.
Senator Grassley. You are saying that if Congress makes a
decision that this money ought to be spent, the only thing for
not spending it would be to make sure that the loan was a wise
loan. There is no philosophical opposition you have in this
area of this money being used for this purpose.
Mr. Dorr. None whatsoever. I'm probably as sold on
technology as anyone.
Senator Grassley. My last question then. The work of the
Rural Housing Service is particularly important to me because I
have seen the impact that single-family, multi-family and
community facilities can have on individuals and communities in
Iowa, as you know, Tom. One of my concerns has been the lack of
solid information regarding multi-family housing portfolio. For
many years it was clear that RHS was flying blind when it comes
to portfolio. They could not tell us what types of housing were
in the portfolio, and they could not verify the condition of
the properties.
As Under Secretary you initiated a comprehensive property
assessment to determine what needs to be done to maintain that
portfolio and to protect the low-income tenants who live in
those properties. From all accounts, this process has been
successful, and an excellent example of your leadership. Could
you tell us some detail as to how this all came about?
Mr. Dorr. I will try to keep this brief. It was probably
one of the most significant, the multi-family housing and
rental assistance and farm labor housing programs, probably
some of the most complex and significant issues that we had to
deal with. I believe rental assistance is perhaps the largest
line item budget item in the entirety of the USDA budget, as
I've been informed.
The bottom line was that there had been a myriad of
statutory and regulatory changes over a period of 20 years.
Rental assistance was growing quite rapidly, and a couple of
things were clear. No. 1, there was discussion about whether or
not we need to save the program, and No. 2, how we were going
to finance it.
After getting together with a number of the best and
brightest in our multi-family group and organization throughout
Rural Development, by bringing in some statewide leaders, I
determined, in conjunction with task force that had helped me
collect this information, that the best thing we could do was
to go out and bring in two of the best multi-family housing
consultants we could find, and we were able to do that.
In the course of that I gave them two charges--this was
when I was serving as the Under Secretary--No. 1, find out
whether or not we really need this program. I wanted to dispel
that myth if there is a myth involved. No. 2, provide us with
some answers in terms of how we revitalize the portfolio, how
we go about revitalizing it in a cost effective manner.
Out of that evolved a comprehensive property assessment.
The comprehensive property assessment showed that of the
455,000 units, there were 750,000 residents, that's less than
three-tenths of 1 percent of the population. 75--the average
income of the residents was $7,500. It was clear that we needed
the properties. The properties had an average age of 26 years.
On top of that we were having escalating rental assistance
projects. We think--I believe, and I'm not sure where the Under
Secretary, the Acting Under Secretary is relative to the
decision, but we think we've identified a solution to
essentially revitalize a $50 billion replacement cost portfolio
for something less than $2 billion over a period of about 6, 7
years.
If that is what they ultimate decide to do at the Under
Secretary's Office, we've done a remarkable job of revitalizing
a portfolio and making--most importantly, protecting the
tenants, and making available housing for those who can least
afford it in rural America.
Senator Salazar. Thank you, Mr. Chairman.
The Chairman. Senator Nelson.
Senator Nelson. Thank you, Mr. Chairman. What I will do is
I will just defer to the Ranking Member at this point.
The Chairman. Senator Crapo.
Senator Crapo. Thank you very much, Mr. Chairman.
Mr. Dorr, we appreciate having you here and we appreciate
all of the good work that you do.
Energy costs have a big impact on our economy, and you and
I visited about this personally, but as you know, one of the
provisions in the energy bill that is very important to me is
the Renewable Energy Systems and Energy Efficiency Improvements
Grant Program. This program holds a tremendous potential to
stimulate development of our farm energy sources. It also
presents an opportunity to address environmental concerns, and
in Idaho we are very excited about the potential in this
program to help develop anaerobic digesters. Do you agree that
this program can help develop energy sources, and also address
environmental concerns at the same time? If so, would you
commit to work with me to help find ways to address the
anaerobic digester issue?
Mr. Dorr. I would. I agree with your interpretation. I
would be delighted to work with you.
Senator Crapo. What are your thoughts about the
implementation of this program, the Renewable Energy Systems
and Energy Efficiency Improvements Grant Program?
Mr. Dorr. Like all of these new and innovative programs,
they're somewhat complex, but the Department has done a good
job of working with a multitude of agencies, and will continue
to do that, and as a result can make these very effective
programs over the long term.
Senator Crapo. If you are confirmed, one of the things I
want to do is be as effective as possible in leveraging
resources, and it seems to me that this grant program is one of
those. I guess I am basically just alerting you that I want to
work closely with you on that and try to leverage resources to
the maximum extent possible.
One other question: many of us on this panel have
recognized the importance of value-added agriculture, and we
included the Value-added Grant Program in the 2002 Farm Bill,
which is another program which I strongly support. In your
opening statement you mentioned that value-added agriculture
will become an even more important part of the rejuvenation of
rural America, and I would just like to ask you if you would
expand on that a little bit.
Mr. Dorr. Well, very quickly, the evolution of ethanol has
shown that research and technology can do some amazing things
with the natural resource base that we have in this country,
and clearly as we grapple with the energy issues and other
things, and we begin to look more deeply into this, it's very
evident that technology has grown by leaps and bounds.
Renewable bio-based energies, biodiesel, wind energy and a
number of these offer three or four great opportunities for
rural America to leverage their asset base, increase economic
activity, improve the quality of life, build jobs, build
equity, and it's clearly something, that if confirmed, I will
continue to look at, and look at in a very--I would look at in
a very aggressive manner.
Senator Crapo. Thank you very much. That is all the
questions I wanted to ask of you. Before I yield my time back,
I just wanted to take this opportunity once again to thank you
for the great service that you have already provided at the
Department, and to tell you that you have a tremendous amount
of support here in the Senate, and I look forward to working
with you after you are confirmed.
Mr. Dorr. Thank you very much.
Senator Crapo. Thank you very much.
The Chairman. Thank you, Senator Crapo.
We will now turn to Senator Harkin for questions.
Senator Harkin. Thank you very much, Mr. Chairman.
Mr. Dorr, I just wanted to start off by referring to the
question that was asked by Senator Salazar regarding diversity.
Your response to his question regarding the statement you made
at Iowa State University was that it was taken out of context.
Mr. Dorr. That's correct.
Senator Harkin. Well, I watched the tape. I watched the
tape of that whole thing. A person right before you--no, it was
not the one right before you, it was like maybe two before you,
preceding the person that spoke before you--said something
about diversity and had talked about the importance and the
value to rural communities of supporting diversity. Your
statement in that--when you made that statement about
diversity, you seemed to be responding directly to this. A lot
of times we look at patterns, Mr. Dorr. You just say you were
taken out of context. What is the context?
First of all, as a member of the Board of Regents there was
a big issue in Iowa about naming Iowa State University Stadium
after Jack Trice. He was an African-American football player,
and they wanted to name the stadium after him; students wanted
to name the stadium after Jack Trice. There was a lot of heated
debate about this at that time. It was finally decided to name
the stadium after him. The Board of Regents voted on that. You
voted against naming the stadium after Jack Trice.
Then we have the statement at Iowa State that Mr. Salazar--
I am not going to read it again, it is in the record--when you
said that there is something in these three counties that
enable them to succeed. It may be their economic diversity but
not their ethnic diversity. There is something there to that.
Last, you wrote a letter to me, and I am going to have more
to say about this letter, but you wrote a letter to me on
October 8th, 1999, in which you talked about a number of
different things, but you said, ``I'm sure my ranting won't
change your approach to maintaining a constituency dependent on
government revenue.'' I am reading your own words. ``But should
you decide to take a few side trips through the Iowa
countryside, you will see an inordinate number of homes
surrounded by 5 to 10 cars. The homes generally have a value of
less than $10,000. This just confirms my 10-car, $10,000 home
theory. The more you try to help, the more you hinder. The
results are everywhere.''
Now, Mr. Dorr, when you take all of those, you see a
pattern and so I am not certain that it was taken out of
context. People grow and develop and they change their minds
about things. Certainly my own thinking on race relations and
minorities has developed a lot since my upbringing in a small
town in rural Iowa. I guess I was hoping to hear you say that
perhaps your thinking had evolved and that perhaps those
statements may have reflected an earlier mindset, but now maybe
that mindset has changed. All I heard was it was just taken out
of context.
Do you still maintain that all of the things I have said
were just taken out of context?
Mr. Dorr. Senator, we've gone through this at length
earlier, much of this is in the record. The record that I've
established and the opportunities that I've had to work within
the minority community serving at Rural Development, and quite
honestly prior to that in Iowa in a smaller way, and one must
recognize that, as you've already indicated, Iowa has a very
small minority population. I was quietly and privately before
the events at Iowa State University and actually after that,
attempting to find out why we were having difficulty placing
slaughter plants in Iowa because of fears that they would be
staffed by large numbers of hispanics.
I worked privately with a number of folks trying to figure
out ways to help establish hispanic banks so the hispanic
community would feel more comfortable in originating
homeownership loans and increasing their ability to participate
in the American dream.
My record at Rural Development, in working with a number of
minority community and minority initiatives is well known. I
don't know that I have to defend myself relative to my attitude
toward race relations or my sensitivities toward minorities. I
agree, when you grow up in a basically lily white State like
Iowa you do evolve and change over a period of time. I was
raised in a family, and quite frankly was taught generally
speaking to be sensitive to everyone in every situation, and
that's the way I've raised my family, that's the way I've tried
to live my life. Again, I don't believe that those remarks at
Iowa State University adequately reflect what was the context
of that particular situation.
Senator Harkin. Nor the comments you made in your letter to
me about the $10,000 home and the 10-car--you said ``reflects
my theory.'' I asked you at the hearing 3 years ago about that,
and I have examined the record on that, and I cannot find
anything that really tells me what that theory is. ``This just
confirms my 10-car, $10,000 home theory.'' I read the record--I
am sure you have too--and I said at the time, a lot of times
poor people have a lot of cars around. I asked that question
once, he says, ``Well, I've got a lot of cars because I've got
to junk one to get the other one running.'' They do not have
good cars.
I am just wondering about the sensitivity to that in terms
of the letter that you sent to me in 1999, and so I just ask,
do you see how someone could interpret your remarks as
insensitive? Do you have any comprehension that somebody might
see this as being insensitive?
Mr. Dorr. Senator, the remarks are the remarks. I'm not an
insensitive person.
Senator Harkin. My question was not whether you were
sensitive. Could you see that someone might interpret your
remarks and this pattern as being insensitive?
Mr. Dorr. I believe my actions have actually--my actions
have spoke very well of my sensitivity.
Senator Harkin. Well, we can beat that one around.
Mr. Chairman, I have a series of questions of Mr. Dorr that
I would like to ask, and I hope the answers will not be too
long and involved.
Mr. Dorr, I wrote to you last Friday indicating that I
would be referring to the record of the March 6, 2002 hearing,
and that I would ask whether any part of that record ought to
be clarified, corrected or completed. Do you have a response to
that?
Mr. Dorr. My response is, Senator, that I believe the
record clearly reflects the hearing and the questions that were
sent to me and which I responded to. The record, frankly, is a
record. I realize that perhaps you or maybe some of your
colleagues feel that it was not complete, but frankly, that is
the information that I had available and I believe that is--the
record reflects the hearing.
Senator Harkin. It is your position as you appear before
this committee today that the record of March 6, 2002, there is
nothing that needs to be corrected, nothing that needs to be
clarified, or nothing that needs to be completed?
Mr. Dorr. Not that I'm aware of, no.
Senator Harkin. Did you have a chance to go over that
record?
Mr. Dorr. Yes, I did.
Senator Harkin. Well, let us start with what is established
in the record, and then I have some matters that I hope we can
clear up.
At page 53 of the record--and if you have that record in
front of you, you can refer to it. On page 53 of the record,
Senator Dayton stated that the Farm Service Agency found that
the Melvin G. Dorr Irrevocable Family Trust was in violation of
the shares agreement in 1993, 1994 and 1995, and as a result,
$17,000 was paid from that trust to FSA, and you said, ``That
is correct.'' Now I believe the actual figure was $16,638. Is
all of that correct?
Mr. Dorr. I believe so.
Senator Harkin. You believe so. On page 54 you stated that
there was an arrangement between the Melvin G. Dorr Irrevocable
Family Trust and Dorr's Pine Grove Farm, of which you were the
CEO and sole stockholder along with your wife. Is that correct?
Mr. Dorr. Correct.
Senator Harkin. On page 56 you stated that the arrangement
was that the Melvin Dorr Trust paid Dorr's Pine Grove Farm for
machinery, management and marketing services. Is that correct?
Mr. Dorr. Correct.
Senator Harkin. On page 54 you state that you had the power
of attorney to sign for this Melvin G. Dorr Trust at the FSA
Office, and you did sign for that trust either as trustee or
with the power of attorney. Is that correct?
Mr. Dorr. That's correct.
Senator Harkin. Again on page 55 you state that the Melvin
Dorr Trust was, quote, ``set up as an operating entity entitled
to receive 100 percent of the benefits from the various farm
program payments,'' end quote. You signed USDA papers to do
that, is that correct?
Mr. Dorr. Correct.
Senator Harkin. Now, if this Melvin Dorr Trust was
receiving 100 percent of the payments, as you signed the trust
up for the farm program, that would be appropriate if the trust
was the operator and was hiring custom farming done. Is that
your understanding?
Mr. Dorr. Correct.
Senator Harkin. Indeed, going to page 60 of the record,
there is a discussion of signing papers at the ASCS or FSA
office. You said, quote, ``On the M.G. Dorr Irrevocable Family
Trust, I did, but I am--'' and then Senator Dayton interrupted
you and said, ``You signed the documents?'' Mr. Dorr. ``That is
right.'' Senator Dayton. ``Representing it as a custom fee
arrangement?'' Mr. Dorr. ``That is right.''
Just to recap, Mr. Dorr, you signed papers at FSA that the
Melvin G. Dorr Irrevocable Family Trust was the operator, and
basically so that USDA would believe that there was a custom
farming arrangement. Is that correct?
Mr. Dorr. That is correct.
Senator Harkin. More specifically, on page 56 Senator
Dayton said this: ``It was my understanding that ASCS, when
they came in and did an evaluation determined that the reason
the trust owed the $17,000 back''--well, it was slightly less
than 17,000--``was because the trust had represented this
arrangement as a custom fee arrangement, and in fact it was
not, it was a crop share arrangement.'' End quote, that was
Senator Dayton.
You did not disagree with that statement. Is that not in
fact a correct statement of USDA's conclusion about what the
actual arrangement was between the Melvin Dorr Trust and Pine
Grove Farm? Again, I am not asking what you believe, Mr. Dorr,
but that is what USDA determined, that in fact it was a crop
share arrangement. Is that correct?
Mr. Dorr. Senator, the Melvin Dorr Trust was signed up--the
Melvin Dorr Irrevocable Family Trust was signed up as an owner/
operator. Dorr's Pine Grove Farm Company provided custom
farming services, management services, and stewardship services
and marketing services as well, which they were reimbursed for.
That was part of this record.
The end of year review determined that they thought it was
something other than that. The trustees, of whom I was one,
yes, I was given the power of attorney to sign up for farm
programs at the FSA, but the trustees requested a meeting with
the End-of-Year Review Committee after they made their decision
and were denied.
In the context of working with legal counsel, he advised us
that if we appealed this decision we could likely overturn the
decision, but in all likelihood it would cost us about two
times as much money or maybe even more, and to repay. He
suggested that we just go ahead and pay back the fees and ask
them how they wanted us to operate the farm if this wasn't
appropriate, which is exactly what we did. That's what I stated
back in March of 2002. That's what the case was.
Senator Harkin. Now, obviously, we have other documents
that came to our attention after that hearing, and we were
unable to present these at the very brief and cursory hearing
that we had in 2003, if I am not mistaken, 2003. In fact--and I
would ask that the copy of a letter from Steven Phillips, the
Iowa State FSA Office to James Little, Administrator of FSA,
dated June 25th, 2002 be made a part of the record.
Well, I will ask it when the chairman comes back.
Senator Crapo [presiding]. I will step in and assume the
role, and without objection that will be so ordered.
[The letter from Steven Phillips, the Iowa State FSA Office
to James Little, Administrator of FSA, dated June 25, 2002 can
be found in the appendix on page 325.]
Senator Harkin. Thank you, Mr. Chairman.
I want to have to have that because I want to correctly
point out and ask if this is correct. First I will interject
here that you said the end of the review--your End-of-Year
Review Committee determined that that was not a custom farming
arrangement.
Mr. Dorr. They determined that there was an inappropriate
division of----
Senator Harkin. Shares.
Mr. Dorr. Shares.
Senator Harkin. Exactly. That is because that was not a
crop share arrangement--it was not a custom farm arrangement.
Is it not true, Mr. Dorr, that there are three separate times
that either the Department of Agriculture of the Office of
Inspector General determined that this was a crop share
arrangement and not a custom farm arrangement? No. 1, the End-
of-Year Review Committee, second an investigation by the Office
of Inspector General of the Department of agriculture, and
third a special team from FSA was sent to investigate this. All
three determined the same thing, so it was not just the End-of-
Year Review Committee that determined that there was a shares
violation based upon the fact that the arrangement that was
stipulated was not in fact a custom farming arrangement, but
was a crop share arrangement. That is what they determined. I
am not asking what you believe, but this is what three separate
entities said.
Mr. Dorr. Obviously we disagreed with them.
Senator Harkin. You do not disagree that three separate
entities found that?
Mr. Dorr. I do not know about the other two entities.
Senator Harkin. Well----
Mr. Dorr. I know that the OIG did an investigation. I don't
know--frankly, that they addressed the inappropriate division
of shares. I didn't--I'm not cognizant that that was the issue.
Senator Harkin. Yes, they did. There was also a special
team from FSA sent out to investigate this. Now, again, I will
have those put in the record. I just want to make it clear that
it was not just the End-of-the-Year Review Committee.
Mr. Dorr. I would also add that the county committee,
Senator, early on made a determination that there was not an
issue here too.
Senator Harkin. The county committee decided that there was
not a shares violation.
Mr. Dorr. That's correct.
Senator Harkin. Did they have all the appropriate
documentation in their hands at that time by which they needed
to make that decision?
Mr. Dorr. I don't know. They had all the documentation that
they had requested.
Senator Harkin. A lot of this came to light later on after
the county had made their decision. I don't know if the county
ever went back and reviewed it. I don't think so.
I am told, Mr. Dorr, that the State FSA Committee did, in
fact, go back to the county committee and ask them to reexamine
it, and that the county committee did, in fact, find a shares
violation. Is that correct? I am told by my counsel that that
is correct. Again, the county committee did not initially found
a shares violation, but when they went back and investigated it
later on, after they had the documentation that they needed,
they did find a shares violation.
Mr. Dorr. OK. If the end-of-year review committee
recommendations went to the county and the county concurred,
then, yes, they did.
Senator Harkin. Correct me if I am wrong. Mr. Dorr, did you
just say that the trustees requested to meet with the county
committee and were not allowed?
Mr. Dorr. No. I said that the trustees requested a meeting
with the end-of-year review committee to review their decision,
and that was not allowed.
Senator Harkin. Well, Mr. Dorr, I am a little confused here
because I have some minutes here of a meeting that took place
at 9 a.m., December 5, 1996.
[Pause.]
Senator Harkin. You did meet with the county committee.
Mr. Dorr. That's correct.
Senator Harkin. At the end of the year.
Mr. Dorr. I shouldn't say that's correct. This is 9, going
on 10 years ago, so I don't frankly have a document listing all
those meetings, nor do I have that available.
Senator Harkin. It looks as though you did have a chance to
meet with the county committee, but whether you met with the
end-of-year review committee I cannot determine that. I don't
know that.
I ask that copies of all three of those--the end-of-year
review committee, the investigation by the OIG, and the special
team from the FSA--all be included in the record, and Senator
Crapo acting for you said that that would be OK.
The Chairman. Without objection.
Senator Harkin. Now, let's turn to the Harold E. Dorr
Irrevocable Family Trust. I ask you to look at a document that
was attached to a letter from Secretary Veneman.
Senator Salazar. Can I have 1 minute? I have another
meeting that I have to run to.
Senator Harkin. I would be glad to yield.
The Chairman. Senator Salazar.
Senator Salazar. Thank you, Mr. Chairman.
Mr. Dorr, I very much appreciated the response that you
sent to me concerning the letter that I wanted from you
outlining six different areas under which you wanted to work on
an agenda on rural development. I am going to formally request
of you that you get to me something that elaborates on each of
the six points that you set forth in that letter. What I am
looking for, prior to making my decision on how to move forward
with this vote, is an action plan under each of the six
subjects that you discuss in your letter. Will you agree to do
that for me?
Mr. Dorr. We will take a look at that, and we will do the
best we can, yes, Senator.
Senator Salazar. OK. I am telling you, Mr. Dorr, what I
really want here is a specific set of an action plan that you
intend to implement over the next 4 years while you serve in
this position, if confirmed. That will be very important to me
as I move forward in my deliberation on this decision.
Mr. Dorr. Senator, I am not trying to be evasive. I will do
the best I can in all of those, yes.
Senator Salazar. Thank you.
Thank you, Mr. Chairman, and thank you, Senator.
Senator Harkin. Thank you, Senator.
Mr. Dorr, you have a copy of a letter and attachments that
were sent to me on June 27, 2002, stamp dated that time, signed
by Ann Veneman, Secretary of Agriculture, with attachments
thereto. I asked my staff to give that to you.
Mr. Dorr. I have it.
Senator Harkin. I would ask you to look at it. Isn't it
true that the Harold E. Dorr Irrevocable Family Trust had to
repay $17,151.87 because they were also found to have a shares
violation for the 1994 and 1995 crop years?
Mr. Dorr. I'm not privy to the specific details of that,
but generally speaking that's correct.
Senator Harkin. Well, that was stated in the letter back
here from Michael Houston, County Executive Director, to the
Harold E. Dorr Irrevocable Family Trust, c/o Donald J. Dorr,
stating that the county committee had determined that the trust
owed $17,151.87 plus interest as applicable. Again, they found
that they had a shares violation for 1994 and 1995 crop years.
At the top of page 59, again, referring back to the record
of 2002, following a reference to the repayment by the Melvin
Dorr Family Trust, Senator Dayton asked you this:
``You have described here having a similar arrangement with
the Harold Dorr Trust?''
You said, ``That is correct.''
Just a few lines later, again Senator Dayton, referring to
the Harold Dorr Trust, said, ``It was the same arrangement as
with the other trust.''
You said, ``It was the same arrangement with the other
trust, and the reason these were set up was because my uncle,
shortly before his death, asked me to do that.''
Now, this is all in the record, and again, I ask you: Is
this record correct?
Mr. Dorr. As far as I know, yes.
Senator Harkin. Both the Melvin Dorr and the Harold Dorr
Irrevocable Family Trusts had the same arrangement with Pine
Grove Farm, your company. Is that correct?
Mr. Dorr. Both trusts were set up as owner-operators at the
FSA office. Both engaged Dorr's Pine Grove Farm and Tom Dorr to
provide custom farming services, marketing services, management
and land stewardship services, which we were reimbursed for by
those trusts, that was the arrangement.
Senator Harkin. That is how you filed it at the county
office?
Mr. Dorr. We filed the trusts. I filed the Melvin G. Dorr
Irrevocable Family Trust. The Harold Dorr Family Trust filed
theirs. I believe my aunt made the original filing back in 1988
or 1989 as owner-operators, yes.
Senator Harkin. As for your signing papers as the ASCS
office or FSA on behalf of the Harold Dorr Trust, on page 48 of
the record, you said, ``I believe the record shows that I had
power of attorney for the various family entities with regard
to filing papers at the ASCS or now the FSA office.'' You had
the power of attorney signing all this?
Mr. Dorr. I had the power of attorney to sign these myriad
of forms at the FSA or ASCS office at the time, yes. I did
not--I believe, the record shows that, too, that I did not file
any of the forms for the Harold Dorr Irrevocable Family Trust
indicating that it was an owner-operator. I believe that was
done by my Aunt Belva that was the trustee.
Senator Harkin. Was that done by Donald Dorr?
Mr. Dorr. I believe that was done back in 1988 or 1989 by
my Aunt Belva Dorr.
Senator Harkin. Well, I have here a copy of a CCC-477,
which indicates that all of the shares go to the trust. I see
that. The signature is Harold E. Dorr Irrev.--I-r-r-e-v.--
Family Trust, and it's signed by Thomas Dorr.
Mr. Dorr. That was what form?
Senator Harkin. POA--that's the Form CCC-477, which I
understand is the form that you sign up intending to
participate in the----
Mr. Dorr. That's correct.
Senator Harkin [continuing]. Program, in the program.
Mr. Dorr. That's correct.
Senator Harkin. This was----
Mr. Dorr. I don't believe that's the form that indicates
that it's an owner-operator.
Senator Harkin. Here is 1995 and here is 1994 and here is
1993, and all three are signed by you, power of attorney. POA,
I assume that's what that stands for.
Mr. Dorr. Correct.
Senator Harkin. What it says is that a 100 percent share,
all, every one of them, and you signed it.
Mr. Dorr. On the Form 477s?
Senator Harkin. Yes.
Mr. Dorr. Yes.
Senator Harkin. Well, this is the form on which you attest
as to where the percent shares go, and it says all, and it's to
the Harold E. Dorr Trust, not the Melvin Dorr Trust.
Mr. Dorr. Yes.
[Pause.]
Senator Harkin. Yes, my counsel tells me that is right,
that the years I just mentioned and the documents I have here,
the copies of the CCC-477s for 1993, 1994, and 1995, were for
the same years where you claimed that it was operated as a
custom farming operation. Is that right?
Mr. Dorr. Dorr's Pine Grove Farm was hired by those
trusts--that trust to do the custom farming, to do the
marketing, land stewardship, land management for the trusts,
and they were compensated accordingly.
Senator Harkin. OK. Mr. Chairman, I would ask that a copy
of these be made part of the record in their entirety.
The Chairman. Do you want to identify exactly what they
are?
Senator Harkin. Yes, these are copies of three forms, CCC-
477s for the Department of Agriculture. I will go through them
seriatim here. The first one I guess I would identify as being
1993, and I don't know if the codes mean anything or not.
The Chairman. Just some general description so we can
make----
Senator Harkin. OK. These are CCC-477 forms signed by Mr.
Dorr, one for 1993, one for 1994, and one for 1995.
The Chairman. They will be entered without objection.
Senator Harkin. Thank you, Mr. Chairman.
[The forms CCC-477, signed by Mr. Dorr, for the years 1993,
1994, and 1995 can be found in the appendix on page 196.]
Senator Harkin. OK. Now we have established clearly that
trail, that, in fact, when you signed those documents, you
signed it as a custom farming arrangement. Now, there was some
discussion about whether you signed those, but it is, in fact,
that you did sign those papers, indicating 100-percent share of
the payments and that it is a custom farming arrangement. I
just want to make sure that so far we agree on that, that you
signed those papers indicating that it was a custom farming
arrangement, that all shares should go to the trust, Harold E.
Dorr Trust.
Mr. Dorr. I signed those forms indicating that the Harold
Dorr Trust--Harold Dorr Irrevocable Family Trust was the owner
and the operator. They were free to go out and hire whoever
they wanted to do the farming operations.
Senator Harkin. There is a block on there that says percent
shares, and you said all, and you signed to that.
Mr. Dorr. I said that all the shares of the farm program
payments would go to the Harold E. Dorr Irrevocable Family
Trust as directed by the trustees of that trust to do so.
Senator Harkin. Exactly. Again, Mr. Dorr, the repayment
from the Harold Dorr Trust to USDA was because USDA found a
shares violation based on their determination that it was not
custom farming but instead it was, they concluded, a crop share
arrangement.
Again, I am not asking what you believe. I am asking what
USDA found. Is that correct, that they found this not to be a
custom farming but a crop share arrangement?
Mr. Dorr. Apparently so.
Senator Harkin. Now, I just want to review briefly the
history of the arrangements between Dorr's Pine Grove Farms and
the two trusts--the Melvin G. Dorr Irrevocable Family Trust and
the Harold E. Dorr Irrevocable Family Trust. Can we have that
chart here again?
Mr. Chairman, I ask the indulgence of the committee just a
second to put a chart up.
This may look familiar, Mr. Dorr. We had this in 1992--I am
sorry, in 2002. Of all the different entities and arrangements
that you had from crop year 1988 to 1992.
Let's do a little bit of a history here. On page 65 of this
record--and I want to look at that now myself. On page 65 of
the record--I am referring now to the record of the hearing of
2002. You testified that until 1988, I am sorry, or 1989,
Dorr's Pine Grove Farm had a crop share arrangement with these
two family trusts. Again, it seems here that you were not
certain which year it changed. Is that correct?
Mr. Dorr. Yes, it was 1988 or 1989.
Senator Harkin. Prior to that, you testified that it was a
crop share arrangement.
Mr. Dorr. That's correct.
Senator Harkin. Again, on page 65, Mr. Dorr, you said, ``I
do not know what year exactly it was, Senator, whether it was
1989 or 1988. I cannot remember for sure what year it was.''
``The Chairman. This is the same operation''--``the same
operation''--``that you had from 1989 to 1995, but during that
period of time you called it custom farming for those years.''
``Mr. Dorr. That is correct.''
``The Chairman. Before, it was crop share; after that, it
was custom farming, and yet nothing else had changed?''
I wanted to find this exact quote here. You said,
``Correct,
[except that] my uncle [had] approached me.''
It certainly appears that nothing changed, even according
to your own testimony, except how you characterized the
arrangement to the USDA office and the paperwork that you or
perhaps your aunt had on occasion signed at USDA. It looks like
whatever was being done before 1988 or 1989 continued on, the
same arrangement continued on, nothing changed, except how you
presented that to the local county office.
Now, again, to shed some further light on the history of
these arrangements, I want to direct your attention to this
document provided to the committee as an attachment to a letter
from Secretary Veneman dated June 27, 2002, which I referred to
earlier. This document contains information on payments and
shares for years from 1988 through 1993 for both the Melvin G.
Dorr and Harold E. Dorr Trusts.
Now, that would be back here on--there's a page that has
Harold Dorr Irrevocable Family Trust and then at the bottom it
has Melvin G. Dorr Irrevocable Family Trust.
I want you to look at the figures for the years that were
not involved in the audits that resulted in repayments to USDA;
that is, for the Melvin G. Dorr Trust, that would be 1988,
1989, 1990, 1991. For the Harold Dorr Trust, that would be 1988
to 1993--I am sorry. The first one would be 1988 to 1992. That
is the Melvin Dorr Trust. The Harold Dorr Trust was 1988 to
1993.
Now, what these figures on this page is that in 1988
through 1993 the Melvin Dorr Trust had a 100-percent CCC-477
share, and for 1990 through 1993 the Harold Dorr Trust had a
100-percent CCC-477 share; and that for all 5 years, the trusts
were signed up to receive 100 percent of the Farm Program
payments. That is what this shows. Is that correct?
Mr. Dorr. Apparently.
Senator Harkin. The document shows that for the years 1988
through 1992, the Melvin Dorr Trust received USDA payments of
$35,377. Further, for the years 1988 through 1993, the Harold
Dorr Trust received at least $35,025 in USDA payments.
Now, it had to be more than that since the payment
information for 1988 and 1989 is not available, as this thing
shows. Again, I hope--do you agree on those figures?
Mr. Dorr. I have no records to know whether or not those
figures are correct, but if you have them from the FSA office--
--
Senator Harkin. This is from the FSA office.
Mr. Dorr. That's the best that I have access to.
Senator Harkin. I have asked for this to be put in the
record. I already asked for this to be put in the record.
Again, apart from the money that was paid to USDA by these
trusts, there is an additional amount in excess of $70,000 in
earlier years that was received under the same facts and
circumstances that led USDA to require repayment of amounts
received in 1993, 1994, and 1995. Now, again, this is before
any penalties or interest. That $70,000 was not looked into,
nor was it repaid. It seems clear that it stands on exactly the
same basis as the money that the trusts were required to pay
back to USDA. Again, the reason they had to pay that money back
was that the nature of the farming arrangements was not truly
represented to USDA. You, Mr. Dorr, were the person principally
involved in making these representations and signing these
representations to the USDA.
Mr. Chairman, I am pointing out and the reason for this
whole line of questioning was to point out that through all
these years, prior to 1988 up to 1995, that the farming
operations between Pine Grove Farms, Inc., of which Mr. Tom
Dorr was the sole stockholder, shareholder, I guess along with
his wife, the arrangement that Pine Grove Farms had with these
trusts remained the same. By his own testimony, Mr. Dorr said
that nothing changed except how it was represented to USDA. If
it was a crop share basis before, it has never been fully
explained, Mr. Dorr, why it was not a crop share arrangement
afterward because you testified that it was the same basic
operation. The only thing that changed is what you said to
USDA. If it was crop share before, why wasn't it crop share
after that?
Mr. Dorr. As I've indicated, Senator, those decisions were
made 17 years ago. They were made at aging parents and aging
aunts and uncles. They were made for legitimate management
reasons. We did not agree with the end-of-year review. It was
interesting to me that once the Melvin G. Dorr end-of-year
review was done, they never did an end-of-year review on the
Harold Dorr Irrevocable Family Trust until I became nominated.
We don't agree with the ruling. We think that the
management fees, the marketing fees, the stewardship fees that
were paid were appropriate. That's what the arrangement was.
Senator Harkin. Well, Mr. Chairman, I have asked myself--
and this has gone back to the first times of this hearing when
all this came out--why was all this done? Mr. Dorr by his own
words recorded on a conversation with his brother that has been
extensively viewed--or listened to, himself said why it was
done, not for aging aunts and uncles or anything like that,
but, Mr. Chairman, I would like to request that the 7 minutes
of that tape be played for this committee to hear.
The Chairman. As per our previous agreement, the CD of this
recording will be played. I assume you have some mechanism to--
--
Senator Harkin. Well, I asked the staff. I don't know this
stuff.
[CD played.]
Senator Harkin. Mr. Chairman, the transcript of this tape
was not put in the record previously yet. I would ask that the
transcript be made a part of the record.
The Chairman. Without objection.
[The transcript of Mr. Dorr's recorded conversation with
his brother can be found in the appendix on page 201.]
Senator Harkin. Well, there you have it. Mr. Dorr, you did
that, as you said by your own words. By your own words. You say
some interesting things: first, it has always been done that
way; and then, second, that you say that you have done this to
avoid the minimum payment limitation. Is that not correct?
Mr. Dorr. I believe I also indicated that it was
appropriate to do that when we did it.
Senator Harkin. Wait a minute. It was appropriate to file--
to change the filing of your operation from crop share to
custom farming in order to avoid minimum--in order to avoid the
payment limitations. You say that that was correct, that was OK
to do that?
Mr. Dorr. I believe that everything we registered with the
FSA office at the time we did it was legal and appropriate,
yes.
Senator Harkin. Well, Mr. Dorr, this is what is really
baffling here in that you have said on the record that it was
custom farming, and yet here in this phone conversation, you
say it was a crop share basis and it sells all the crop and it
reimburses us with a 50/50 split basis.
Now, either what you said on the tape is wrong or what you
filed with USDA is wrong. They both cannot be right. USDA did
not say it was correct. That is why they asked the trusts to
pay the money back. They did not find it appropriate. You say
it is appropriate. USDA did not say it was appropriate when
they revisited it.
Well, Mr. Chairman, that is really the essence of that. I
have one other letter that I wanted to include in the record,
and that was the letter--do you have that letter? Where is it?
I asked Professor Neil Harl at Iowa State University, who
knows a lot about farming arrangements and trusts, and is a
recognized expert--he is the Charles F. Curtiss Distinguished
Professor in Agriculture at Iowa State--to look at all of these
arrangements. That letter is dated July 29, 2002, and I would
ask that that letter be made a part of the record.
The Chairman. Without objection.
[The letter dated July 29, 2002 of the Charles F. Curtis
Distinguised Professor in Agriculture at Iowa State, can be
found in the appendix on page 204.]
Senator Harkin. Again, Mr. Chairman, I really thank you for
your indulgence in this matter. This is something that has
bothered me for a long time and continues to bother me. I hope
I will be done here very shortly and we will be out of here.
The deficiency payments varied each year. When the producer
signs up for the Farm Program in the spring on those forms, the
477 forms, the producer does not know the final deficiency
payment rate. Mr. Dorr could not have predicted what the
deficiency payment would be in future years, but he certainly
could have known that in the case of low corn prices, his Pine
Grove Farm could exceed the payment limitation if the payments
went to Pine Grove Farm, as they should, under a crop share
arrangement.
USDA found that the farming arrangement between the two
trusts and Dorr's Pine Grove Farm was not truly represented to
USDA. It was represented as custom farming. USDA concluded it
was a crop share lease.
Now, again, Mr. Dorr has said he disagrees with USDA's
finding, but Mr. Dorr signed the papers to the effect that it
was custom farming, but on this telephone conversation openly
says, ``I get a crop share on this arrangement.'' Both cannot
stand individually.
What would the motivation be for that change, that change
that happened in 1988 or 1989 when, by his own words, Mr. Dorr
says nothing changed in the farming operation. He went down to
the ASCS office and changed the way that it was represented.
Well, what is the motivation? We heard the tape. Calling is
custom farming moved USDA payments to the trust that should
have gone to Dorr's Pine Grove Farm in a crop share which USDA
found was the really true arrangement here. Mr. Dorr said in
his response to a question from Senator Conrad, page 393--this
was a written question submitted by Senator Conrad. Mr. Dorr
said that there was no exceeding of payment limitations in any
of the years, even if the payments to the trusts and Dorr's
Pine Grove Farm are all combined. That is not the point. The
issue is whether misrepresenting the actual farming operation
had to do with evading the potential to exceed payment
limitations.
If we use Mr. Dorr's chosen method of combining the trust
payments plus the payments to Dorr's Pine Grove Farm--let's use
that method. If you combine the trust payments plus the
payments to Dorr's Pine Grove Farm, remember, it was evading
the potential to exceed the payment limitation for Dorr's Pine
Grove Farm that is the issue.
If you look at the potential maximum combined payments, we
see the combined payments could have exceeded $50,000 in 1989,
in 1991, and perhaps even 1990 or 1992, had they been paid as a
crop share basis rather than custom farming.
Again, that really is the point of what we are trying to
point out here. The fact that, as I have said before, someone
who is entrusted with a high position as Under Secretary of
Agriculture, with this in the background, sends a very bad
signal to farmers, to anyone who is partaking of Government
programs.
Now, I have never said that people should not try to
minimize their taxes or things like that, as long as it is done
legally. As long as things are done legally and forthrightly,
and as long as things are done in a way not to cheat the
Government or misrepresent how an entity is structured--well,
if you do it that way, then that is wrong.
Anyway, just a second. I am sorry. Mr. Chairman, one other
thing, just to--I hope this is the last--have a table put into
the record at this point regarding farm payment scenarios with
target prices and loan rates for the years 1989, 1990, 1991,
1992, 1993, and 1994.
The Chairman. Without objection.
[The table of farm payment scenarios with target prices and
loan rates for years 1989, 1990, 1991, 1992, 1993, and 1994 can
be found in the appendix on page 207.]
Senator Harkin. Mr. Dorr, you were a trustee of the Melvin
G. Dorr irrevocable family trust, is that correct?
Mr. Dorr. That's correct.
Senator Harkin. Are you still a trustee of that?
Mr. Dorr. No.
Senator Harkin. Were you at this time in question also a
trustee of the Harold E. Dorr?
Mr. Dorr. No.
Senator Harkin. Just the Melvin G. Dorr----
Mr. Dorr. That's correct.
Senator Harkin [continuing]. Irrevocable family trust. You
also had power of attorney for the Melvin G. Dorr irrevocable
family trust?
Mr. Dorr. That's correct.
Senator Harkin. Again, Mr. Dorr, my question here gets to
how you see your responsibilities. Now, again, I realize that
families want to keep farms as viable operations. Is not your
fiduciary responsibility as a trustee of the Melvin G. Dorr
irrevocable family trust, is not your responsibility and
obligation to get the best possible return for the trust?
Mr. Dorr. Sure.
Senator Harkin. Do you believe that the arrangement that
you had set up gave them the best return?
Mr. Dorr. The custom farming and management arrangement we
had set up was a good return for them, yes.
Senator Harkin. Well, did you ever consider relinquishing
your position as trustee during the years that you, through
Dorr's Pine Grove Farm and PGF seeds, purchased inputs, farmed
the land, and marketed the grain? Are you not also operating in
Pine Grove's interest at that time?
Mr. Dorr. Obviously, yes.
Senator Harkin. You did not consider relinquishing your
position as trustee of the Melvin G. Dorr irrevocable family
trust? Again, the reason I ask that question, because if you
assume this position of under secretary, then you have certain
responsibilities and commitments. It has to be clearly
delineated where those interests and where those
responsibilities lie. Again, I would think as a trustee that
you would have recognized that that was in conflict with your
operations, or could potentially be a conflict with your
operations on Pine Grove Farms and with the arrangements that
you had with the Melvin G. Dorr irrevocable family trust.
I just have a couple of things. I want to loop back again
where I started. Actually, I was going to finish on this, but I
started on it, and that has to do with the letter that you sent
me in 1999, October 8, 1999, and again, in which you say that--
well, first of all, you are complaining about the access fee,
the Federal universal access fee under telephone charges, which
I in 2002 pointed out that this money helps rural communities.
Here is what you said: With these kind of taxation and
subsidies, you collectively are responsible for turning Iowa
into a State of peasants totally dependent on your largesse.
Should you decide to take a few side trips to the Iowa
countryside, you will see an inordinate number of homes
surrounded by five to 10 cars. The homes generally have a value
of less than $10,000, which just confirms my 10-car, $10,000-
home theory. The more you try to help, the more you hinder. The
results are everywhere.
Again, Mr. Dorr, 3 years later, I would like to ask you
again to explain the $10,000-home, 10-car theory. What is that
theory? What is it a theory of?
Mr. Dorr. It's appropriately stated in my note to you at
the time, that was from a constituent to a Senator, not under
the guise of the expectation that it would be something
presented at a hearing.
I feel pretty passionately, Senator, about creating
economic opportunities in rural America so those perhaps
hardest--some of us have the opportunity to gain an economic
foothold to build equity. As a matter of fact, in the context
of my operation and my business, I work very, very closely with
my associates, helped one of them get a college education,
helped another one buy a couple of homes, and get started so he
had home ownership. The essence of it is, is that if you--every
time you turn around they have more taxes to pay, it becomes
more and more difficult for them to get the leg up that they
need.
That was an outgrowth of my frustration with the increase
in that particular tax at the time, that was stimulated,
actually, by one of my associates who came out to me and showed
it to me. It is absolutely no reflection on my view or my
attitude about those in rural America that need a leg up and
that we clearly work with, rural development, and that I have a
long history of having worked with in my community and in a
number of things that I have been involved with over the years.
To the extent that sheds any light on that comment, that's
probably the best I can do at this point.
Senator Harkin. Well, first of all, I would point out,
again, as I did in the record at that time, that the national
access fee you complained about for $4.31 was not a tax, even
though you might have thought it was. It is the cost that long-
distance companies pay the local telephone companies to cover
some of the fixed costs. The tax that you had here was the
universal access fee, it was 3 cents. You called it
confiscatory. I pointed out at the time that a lot of this goes
to help our rural schools, hospitals, and things like that.
This idea that somehow the more you help, the more you
hinder, I asked you at the time--and I will refer back to the
hearing--I said, Well, I still find this a little baffling.
Then you said, ``The more you try to help, the more you
hinder.''
Mr. Dorr, it seems to me, as under secretary for rural
development you are there to help people. If you have an
attitude that the more you help, the more you hinder them, I
don't understand how you can carry that out. I assume, and I
can only read this as plain English, you talk about Government
maintaining a constituency dependent on Government revenue, the
more you try to help, the more you hinder. The results are
everywhere. Again, I am reading from the record, on Page 80 of
that hearing in 2002.
Well, Mr. Dorr, the way I look at it, it seems that the
Dorr family has benefited a lot from Government help.
``Did not the Dorr farms receive farmers home loans back
during the farm crisis of the 1980's?''
``Mr. Dorr: I don't believe we received a farmers home
loan. I believe I received a guaranteed loan the 1980's, that's
correct.''
``The Chairman. That is a guaranteed loan?''
``Mr. Dorr. That's correct. I appreciated it.''
``The Chairman. You went to college. Did you get student
loans?''
``Mr. Dorr. Yes, I did.''
``The Chairman. Those were Government-backed?''
``Mr. Dorr. Yes.''
``The Chairman. You have received farm payments?''
``Mr. Dorr. Yes.''
``The Chairman. From the Federal Government?''
``Obviously.''
``Has all this hindered you?''
Well, you went on to say no, then you went on to make a
comment about mega-farms.
I guess it is that attitude, and I am trying to find out--
that is why I asked if you had looked at the record. In my
opening statement, I asked if you had looked at the record and
was there anything you wanted to complete or correct. I guess
what I was looking for, perhaps, was, that had you been, now,
the length of time that you have been down at the Department
and you have been working in these capacities, that maybe the
more you help, the more you hinder is not quite the correct way
to look at many of these things. I don't know. I don't know how
to interpret it other than what was said there, other than you
just wrote it in a moment of anger. I can understand people
sometimes flying off the handle and stuff like that. If that is
what it was, hey, I can accept that. If that was just I flew
off the handle and I got ticked off 1 day and I wrote my
Senator. I can understand that.
Are you saying that this really does--does this reflect
your philosophy or does it not reflect your philosophy now?
Mr. Dorr. Senator, I just explained to you what my
philosophy was. I said earlier in the day what my philosophy is
and what my views are of the things and the opportunities that
we have at rural development to do. I believe that my
background and characterization, my passion for assisting the
minority communities that we talked about earlier, and all the
others involved in rural development are pretty clearly part of
the record. To suggest that I believe that the more we help,
the more we hinder--that is clearly not true.
Senator Harkin. Thank you. I appreciate that.
Last--I see Senator Grassley has come back--I do want to,
again--I just want to comment on the bandwidth issue. Now, you
have been down at the Department for the last 3 years or so in
a key position. You served for over 1 year as under secretary
for rural development, during which time the 2002 Farm bill was
in effect. There is a provision in the Farm bill that provides
for low-interest loans to private entities for getting
broadband to rural communities, with a preference for those
communities with less than 2,500, population.
Now, Senator Grassley was with me last year when we talked
about that to President Bush in Des Moines. You can correct me
if I am wrong, you said you had constituents, I know I have had
constituents in Iowa, private entities who have tried to get
these loans to get broadband out to small communities, and they
have been stymied at every turn. Now, if I am off, I am off a
little bit on this in terms of $1.6 billion, but there is still
about $1.6 billion sitting there that could go out. When you
responded to Senator Grassley earlier, you said, Well, if I get
there then we will get outside experts to look at it.
That money has been there for 3 years. You were under
secretary for a year. You have been in a key advisory position
down there for 3 years. Yet, nothing has happened. You
mentioned bandwidth in your opening statement. Well, Mr. Dorr,
I don't see anything happening down there. With a provision
that was put in the Farm bill, it is mandatory spending. The
money is there. I have been extremely frustrated, as I know
other Senators have been, that this money is not getting out to
entities. Some of these entities are already providing services
to communities. It is not that they are some fly by-night
outfit. In order to get the bottom line to come out, they need
these low-interest loans, and they can get out to small
communities all over our State and, I am certain, Georgia and
other places, too.
I am--I just want for the record to say that I would like
to have seen a little bit more action on that up to now than we
have seen in getting that out. It is nice to hear that you
support that, that you are interested in getting broadband out.
That is wonderful. Words just don't suffice. We have to have
some action in that regard.
If you have any comment on that. It is not really a
question; it is more of a statement on my part.
Mr. Dorr. I agree the program is a good program. We need to
implement it as aggressively as possible. If I am confirmed, I
will clearly work very hard on that.
Senator Harkin. I thank you. I thank you, Mr. Dorr, and,
Mr. Chairman, again I want to thank you for your indulgence as
chairman for letting me pursue this questioning and making the
record. I just can't thank you enough for your indulgence.
The Chairman. Yes, sir.
[The statement and Biographical information of Mr. Dorr can
be found in the appendix on page 282.]
Senator Harkin. Oh--I thought I already asked that. I have
a letter from Secretary Veneman dated April 12, 2002, that is
referred to in the Harl letter. I have an order from the court
dated September 6, 2002, regarding the audio tape. Then
documents produced pursuant to a court order and the materials
were disclosed after in camera inspection and redaction of
purely private items, regarding the audio tape. The minutes of
the Cherokee County FSA County Committee meeting of June 20,
1996; August 29, 1996; November 14, 1996; December 5, 1996; and
December 19, 1996. Last, the Annual Survey of County Farmland
Values prepared by Cherokee County FSA dated February 1, 1996.
The Chairman. Without objection.
[The letter dated February 1, 1996 of the Annual Survey of
County Farmland Values prepared by Cherokee County FSA can be
found in the appendix on page 245.]
The Chairman. Let me say, first of all, that this issue of
farm payments has certainly come up a lot in discussion today.
It also came up quite often in the discussion in the hearing on
March 6, 2002. [ I have statistics here from the Farm Service
Agency that show that in fiscal year 2001 alone there were
thousands of repayments to USDA.] This includes a number of
programs and also includes voluntary collections. I am not in
any way introducing this to condone or agree with what Mr. Dorr
did or should have done or didn't do relative to his situation,
I do know, as all of us do, that farm programs can be very
complicated, just like the tax code, and that individuals can
make mistakes. The Government even makes mistakes. I would ask
unanimous consent that these FSA statistics be included in the
record. They will be, without objection.
[The information referred to in the FSA statistics can be
found in the appendix on page 194.]
The Chairman. Also, after Mr. Dorr's first hearing before
this committee, on March 6, 2002, the USDA Inspector General
received a hotline complaint regarding the statements made on
the audio tape that was played here today. That prompted a full
investigation, and Mr. Dorr was subsequently cleared of any
wrongdoing. According to a report dated May 28, 2002, from
Joyce Fleischman, Acting Inspector General for USDA, the
conversations on that tape were the subject of a thorough
investigation by OIG and the Iowa State FSA Office. I would ask
that a copy of that report be included in the record.
Based upon the information developed during the OIG
investigation, the U.S. Attorney's Office for the Northern
District of Iowa declined any criminal or civil prosecution of
Mr. Dorr, and the OIG considers this case to be closed. Quoting
from that OIG report, let me read this statement: ``We feel
that we have investigated the matters referred to OIG
concerning Mr. Dorr fully and consider the case to be closed.
To date there is no new evidence to warrant reexamination nor
the need to open a new investigation.''
We have requested a copy of that OIG report. I would ask
unanimous consent that when it is received, that it be inserted
into the record.
[The information referred in the OIG report can be found in
the appendix on page 303.]
The Chairman. Is there anything further?
If not, this hearing stands adjourned.
[Whereupon, at 1:04 p.m., the committee was adjourned.]
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A P P E N D I X
April 27, 2005
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DOCUMENTS SUBMITTED FOR THE RECORD
April 27, 2005
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QUESTIONS AND ANSWERS
April 27, 2005
=======================================================================
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