[Senate Hearing 109-68]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 109-68

 SAFEGUARDING THE MERIT SYSTEM: A REVIEW OF THE U.S. OFFICE OF SPECIAL 
                                COUNSEL

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

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                THE FEDERAL WORKFORCE, AND THE DISTRICT
                        OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 24, 2005

                               __________

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs


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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                      Trina D. Tyrer, Chief Clerk


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                  GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota              CARL LEVIN, Michigan
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

                   Andrew Richardson, Staff Director
              Richard J. Kessler, Minority Staff Director
            Nanci E. Langley, Minority Deputy Staff Director
                       Tara E. Baird, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1
    Senator Akaka................................................     2
    Senator Lautenberg...........................................     5
    Senator Levin................................................    16
    Senator Carper...............................................    27

                                WITNESS
                         Tuesday, May 24, 2005

Hon. Scott J. Bloch, Special Counsel, Office of Special Counsel:
    Testimony....................................................     7
    Prepared statement...........................................    33

                                Appendix

Letter from Scott J. Bloch, Special Counsel, dated May 31, 2005, 
  to Senator Voinovich, with attachments.........................    40
Letter from Tom Devine, Legal Director, Government Accountability 
  Project, and Jeff Ruch, Executive Director, Public Employees 
  for Environmental Responsibility (PEER), dated May 23, 2005, to 
  Senators Voinovich and Collins.................................    67
OSC Response to the GAP/PEER Letter..............................    72

Prepared statements from:
    Project On Government Oversight, Danielle Brian, Executive 
      Director, with an attachment...............................    95
    The National Treasury Employees Union (NTEU), Colleen M. 
      Kelley, National President.................................    97
    Linda Myers, former OSC Alternative Dispute Resolution (ADR) 
      Specialist, with an attachment.............................    99
    Joe Solmonese, President, Human Rights Campaign, and Len 
      Hirsch, President, Federal GLOBE, with attachments.........   102
    Letter from Cary P. Sklar, dated May 31, 2005, to Senators 
      Voinovich and Akaka........................................   118
    Letter from Debra S. Katz, Bernabei & Katz, PLLC, dated May 
      31, 2005, to Senators Voinovich and Akaka with attachments.   120

Questions for the record from Senator Lieberman..................   162
    Responses from Mr. Bloch.....................................   164
Questions for the record from Senator Akaka......................   165
    Responses from Mr. Bloch with attachments....................   191

 
                     SAFEGUARDING THE MERIT SYSTEM:
                     A REVIEW OF THE U.S. OFFICE OF
                            SPECIAL COUNSEL

                              ----------                              


                         TUESDAY, MAY 24, 2005

                                       U.S. Senate,
          Oversight of Government Management, the Federal  
      Workforce, and the District of Columbia Subcommittee,
                            of the Committee on Homeland Security  
                                         and Governmental Affairs, 
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:06 a.m., in 
room SD-562, Dirksen Senate Office Building, Hon. George V. 
Voinovich, Chairman of the Subcommittee, presiding.
    Present: Senators Voinovich, Akaka, Levin, Carper, and 
Lautenberg.

            OPENING STATEMENT OF CHAIRMAN VOINOVICH

    Senator Voinovich. The meeting will please come to order.
    Today's Subcommittee hearing entitled Safeguarding the 
Merit System: A Review of the U.S. Office of Special Counsel is 
going to provide an in-depth examination of the mission, roles, 
and responsibilities of a small yet important Federal agency. I 
would like to thank Senator Akaka for requesting today's 
hearing on this important human capital topic.
    I would also extend a warm welcome to our witness, the Hon. 
Scott Bloch. Mr. Bloch began his 5-year term as Special Counsel 
on January 5, 2004, after being confirmed by voice vote on 
December 9, 2003. As an independent investigative and 
prosecutorial agency, OSC protects current and former Federal 
employees and applicants for Federal employment from Prohibited 
Personnel Practices (PPP). The Agency also promotes and 
enforces compliance with the Hatch Act. Finally, the Agency 
facilitates disclosures by Federal whistleblowers about 
potential government wrongdoing.
    Since the foundation of OSC's mission is rooted in the 
merit system principles, the Agency will play a vital role in 
the transformation of the 21st Century Federal workforce. 
Therefore, with OSC in the middle of a 5-year reauthorization, 
it is appropriate for this Subcommittee to ensure that the 
Agency is meeting its mission during the most dramatic changes 
in the civil service system in more than a quarter of a 
century.
    During his short tenure as Special Counsel Mr. Bloch has 
implemented a number of ambitious steps to transform the 
mission, culture, and structure of OSC. Some of Mr. Bloch's 
decisions are perceived as controversial. Although I will go 
into further detail in my line of questioning, I would like to 
mention one area specifically in my opening statement.
    On January 7, 2005, Mr. Bloch announced several performance 
improvements and organizational changes to OSC, including his 
vision for decentralizing some of OSC's Washington-based 
operations. Mr. Bloch's authority to reorganize OSC is not in 
question. In fact, the President's Management Agenda required 
agencies to create a more citizen-centered, results-oriented, 
market-based Federal Government.
    For example, OMB guidelines issued in May 2001 required 
each agency to develop a strategic workforce plan that 
redirects employees to service delivery positions in order to 
improve customer service, and take care of internal and 
external customers. Even though I believe OSC's restructuring 
efforts conform to the intent of the President's agenda, I 
question the urgency of opening a new field office 3 months 
after the Agency's reorganization plan was announced. As the 
Agency that protects the merit system, OSC should set a 
sterling example of how to manage and treat Federal employees.
    In this instance, I feel that OSC could have done a better 
job during this initial phase of the restructuring. Guidance 
issued by OSC required affected employees to initially accept 
or decline a transfer within 10 days. OSC extended the deadline 
by an additional 10 days after receiving a request from 
numerous congressional offices, including mine. Mr. Bloch, I 
hope you understand that asking employees to make life-altering 
decisions in just 10 days may be construed as very insensitive. 
Even though OSC followed the letter of the law, I believe 
employees should have been provided a lot more time to make 
this decision.
    Fortunately, Mr. Bloch, this hearing will afford you the 
chance to provide a detailed explanation of the reasoning 
behind your actions and I hope you seize this opportunity to do 
so. To this end, last week Mr. Bloch submitted a comprehensive 
letter to GAO outlining the organizational improvements at OSC 
and I ask unanimous consent that Mr. Bloch's May 17, 2005, 
letter be added to the hearing record.\1\
---------------------------------------------------------------------------
    \1\ The letter referred to appears in the Appendix as Appendix A on 
page 210.
---------------------------------------------------------------------------
    There being no objection, it is included.
    Senator Voinovich. Before I yield to my good friend Senator 
Akaka, I would like to recognize his steadfast commitment to 
provide Federal whistleblowers with a safe disclosure process 
which is central to OSC's mission. I do not think there is 
anybody in the Congress that is a better friend of 
whistleblowers than Senator Akaka, and that has been part of 
his whole career here in the Senate. As many of you know, 
Senator Akaka is the chief sponsor of legislation to strengthen 
the protections of Federal whistleblowers and I am pleased to 
be one of its co-sponsors.
    I now yield to Senator Akaka for his opening statement.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I cannot 
say enough about your leadership in the U.S. Senate and what 
you have done for the Federal workers of our country. I want to 
commend you for your commitment to Federal workers and for 
listening to their concerns. By holding today's oversight 
hearing on the Office of Special Counsel you have once again 
demonstrated your leadership in protecting employee rights. I 
do not have to tell you this, but I am right by your side.
    OSC has a special role in the Federal Government. It is 
charged with making sure that Federal employees are free from 
discriminatory, retaliatory, and arbitrary actions. These 
protections are essential so that employees can perform their 
duties in the best interest of the American public. By 
enforcing the merit system principles and serving as an 
advocate for Federal employees, OSC helps ensure that the 
Federal Government is an employer of choice. As we look at the 
future, this becomes very important when the baby boomers 
retire.
    As the Departments of Defense and Homeland Security embark 
on new personnel systems that, in my opinion, severely diminish 
the rights and protections of Federal employees, the importance 
of OSC in protecting the merit system principles will increase. 
Today's hearing examines how well OSC is meeting this extremely 
important mission.
    The role of OSC has evolved. Created by the Civil Service 
Reform Act of 1978, OSC was established as an independent 
investigative and prosecutorial agency working on behalf of 
employees, particularly whistleblowers. But it did not live up 
to this role. The Whistleblower Protection Act was passed in 
1989 in large part because OSC at the time was perceived as 
ineffectual. At that time, OSC had not brought a single 
corrective action case since 1979 to the Merit Systems 
Protection Board on behalf of a whistleblower. A former Special 
Counsel advised the whistleblowers, ``do not put your head up 
because it will get blown off.''
    Whistleblowers told Congress that they thought of OSC as an 
adversary rather than an ally, and urged this Committee to 
abolish the office altogether. Instead, Congress strengthened 
rather than abolished the office, and the Whistleblower 
Protection Act gave OSC a new charter: To protect employees, 
especially whistleblowers, from Prohibited Personnel Practices 
and to, again, act in the interest of employees who seek its 
assistance.
    Despite significant changes in OSC after the 1989 Act, 
employee satisfaction with the office remained surprisingly 
low. According to the Government Accountability Office in 1993, 
81 percent of employees with cases before OSC gave the office a 
generally low to very low rating for overall effectiveness. 
Even employees with successful cases before OSC gave the Agency 
low marks for poor customer service and effectiveness.
    Congress passed amendments to the WPA to strengthen 
protections for whistleblowers and improve OSC's effectiveness 
in 1994, and we had been encouraged about the direction OSC was 
headed. For example, in 2001 the Government Accountability 
Project, one of OSC's stakeholders, said that OSC had won over 
even the most disillusioned critics by opening channels of 
communication with stakeholders and developing a genuine docket 
of ongoing litigation. I was very pleased to see that even 
though changes are needed to strengthen the WPA, those filing 
whistleblower cases generally believed that their cases had a 
fair evaluation and that OSC was actively pursuing its mission.
    Sadly, it appears that this trend is reversing and that OSC 
may be reverting to the anti-employee practices of the past. 
For example, employees, good government groups, and employee 
unions have publicly expressed their concerns over the 
activities of OSC regarding the backlog of cases. While I 
appreciate the efforts by Special Counsel Bloch and his staff 
to reduce the backlog, there are charges that the manner in 
which the reduction was accomplished is suspect. Very serious 
allegations have been raised that complaints are not being 
adequately reviewed, cases have simply been shifted from one 
office to another, or cases were dumped. If true, these 
practices are directly counter to OSC's legal responsibility to 
be the protector of civil service employees.
    Moreover, the allegations about the adverse treatment of 
OSC employees are deeply troubling. Earlier this year, without 
notice to congressional authorizers or appropriators, OSC 
initiated a reorganization which resulted in the opening of a 
new field office in Detroit and the loss of approximately 10 
percent of the Agency's workforce. The reorganization 
announcement came on the heels of a $140,000 external review of 
OSC which did not recommend such a change.
    In addition, the reorganization proposed moving the 
Alternative Dispute Resolution office, which has been highly 
successful in resolving disputes, from the Washington, DC 
headquarters where a majority of the cases are handled, to the 
new Detroit field office. In my opinion, the business case for 
a new field office has not been made, and I am alarmed by the 
way employees were forced to relocate or lose their jobs. 
Volunteers were not solicited and those selected to relocate 
were not consulted before the decision was made. In fact, the 
unilateral action was the impetus for some remaining OSC staff, 
who have asked to remain anonymous, to write this Subcommittee 
in support of the fired employees who have joined in filing a 
complaint against Special Counsel Bloch with the President's 
Council on Integrity and Efficiency.
    Equally troubling, shortly after taking office in 2004, 
Special Counsel Bloch removed all information relating to 
sexual orientation discrimination from OSC's web site. This 
action was taken in spite of repeated questioning by myself and 
other Members of this Committee during Mr. Bloch's confirmation 
process as to his views on this subject. He repeatedly assured, 
under oath before this Committee, that discrimination based on 
one's sexual orientation is prohibited and is under OSC's 
jurisdiction.
    Only after Senators Collins, Lieberman, Levin, and I 
questioned this action in a letter to Mr. Bloch, dated February 
19, 2004, and after both the Office of Personnel Management and 
the White House reaffirmed that the long-standing position that 
sexual orientation discrimination was prohibited, did OSC 
reverse itself. However, employees are still unsure of the 
degree of their protection and related subject matter 
information that was on the OSC web site prior to the legal 
review of this issue still has not been returned to the site.
    Last, Mr. Chairman, some OSC employees claim they have 
faced retaliation for being ``leakers'' after alerting Congress 
and the press that OSC's policy on sexual orientation 
discrimination was under review and for filing complaints 
against Mr. Bloch. These charges, if proven true, could result 
in Mr. Bloch's dismissal from Federal service. Let me be clear, 
if the lead agency charged with protecting Federal employees is 
seen as the most egregious offender of the merit principles, 
the best and brightest now serving in the Federal Government 
will want to leave and it will be hard, if not impossible, to 
recruit young men and women to serve.
    With fears over retaliatory and arbitrary action against 
employees under the new personnel systems at the Departments of 
Defense and Homeland Security, it is imperative that OSC be a 
safe haven and a place of hope for employees. As such, OSC must 
be held to a higher standard. The activities of OSC must be 
above reproach. To the detriment of employees and the merit 
principles, it appears that OSC is not meeting this goal.
    Mr. Chairman, I hope that today's hearing will allow us to 
get to the bottom of these concerns and allegations, and ensure 
that OSC is a safe haven for Federal employees and a staunch 
advocate for the merit system principles. I want to thank you 
again, Senator Voinovich, as well as Senator Lautenberg, for 
supporting my whistleblower legislation. We have received, Mr. 
Chairman, a letter of support for this hearing from the 
Government Accountability Project and Public Employees for 
Environmental Responsibility, and I ask that the letter be 
included in the record.\1\
---------------------------------------------------------------------------
    \1\ The letter referred to dated May 23, 2005, appears in the 
Appendix on page 67.
---------------------------------------------------------------------------
    Thank you very much, Mr. Chairman.
    Senator Voinovich. Without objection.
    Everyone should understand that Senator Akaka's opening 
statement was a little longer than what we ordinarily allow in 
this Subcommittee, but I know he feels strongly about this 
issue that I thought that he ought to be able to articulate his 
position before the Subcommittee. Thank you, Senator Akaka.
    Senator Lautenberg.

            OPENING STATEMENT OF SENATOR LAUTENBERG

    Senator Lautenberg. Thanks, Mr. Chairman. I listened to 
Senator Akaka's statement very carefully and I thought that he 
touched a lot of very important bases, and I congratulate him 
for the thoughtfulness and the direction that he has taken this 
hearing into. And also to you, Mr. Chairman.
    The one thing that happens is when you get a group of 
Senators to focus on a particular subject, especially something 
to do with the innards of government, then it begins to get a 
lot easier to make the statements with a degree of conviction 
and knowledge. Mr. Bloch, it does not augur well for your 
management of this office, at least the reports of your 
management.
    The Office of Special Counsel's central purpose is to 
safeguard Federal employees from reprisal from whistleblowing. 
However, the way the office is being managed, it appears that 
its primary function is to protect arbitrary actions and to 
inhibit employee criticism or complaint. Now this places the 
Special Counsel in the position of representing Federal 
employees while ensuring that the laws and the policies of the 
United States are upheld. Those are the requirements. It is a 
challenging balancing act and I appreciate the difficulty of 
achieving the correct balance.
    However, I am really concerned that the office has tilted 
too far in one direction, Mr. Bloch, since you have taken over 
in 2004. During Mr. Bloch's confirmation a year-and-a-half ago 
I noted that you had substantial experience in the private 
sector handling complex whistleblowing cases on behalf of both 
plaintiffs and defendants, and I had hoped that such experience 
would serve well in the new post. Since then, however, a number 
of concerns have been raised by public watchdog groups, and as 
Senator Akaka mentioned, labor unions that represent public 
employees. These concerns include inadequate protection against 
discrimination on the basis of sexual orientation. Again, I may 
repeat some of the things said by colleagues but I think they 
are worth repetition, questionable hiring and contracting 
practices, allegations of dumping valid cases simply to reduce 
the backlog.
    Mr. Chairman, when I was in private business I ran a 
company when I came here with almost 20,000 employees, now over 
40,000 employees, and we always felt that those employees were 
the company's greatest asset and strength. We always encouraged 
employee contributions of thought and ideas as well as 
listening carefully to legitimate criticisms.
    I learned something in now over 20 years about government 
employees as well. I spent 30 years in business--I am really a 
relic if you look at the time spent--but I learned something 
about government employees as well. Loyal, hard-working, easily 
as qualified as any of those that I met in the private sector. 
But the loyalty and the skill that they bring to the job is 
always pleasing, but almost surprising because, and I say this, 
with relatively modest compensation. It was mentioned that 
employees can find lots of things to do outside of here, and we 
are having some difficulties. Those who come to government come 
for special reason. It is not simply to look at a pension but 
it is to make a contribution to the well-being of our country.
    I learned something about employee transfers, Mr. Chairman. 
When we first started in business I was always interested to 
hear that our salesmen who sold us from IBM or other computer 
companies would come in and they would talk about the transfer 
they got to Paducah--that is not a name--I am not criticizing 
Paducah, Kentucky--and they would gladly take these promotions. 
Years later as we grew, as our company grew outside of its New 
Jersey presence, if I wanted to transfer someone, a promotion, 
they would say, I have to talk to my wife and my kids. I 
thought that is a legitimate thing. The dialogue between 
management and employee made our company incredibly successful. 
If anyone wants to look up ADP's history, it is pretty 
spectacular, in modesty I say.
    So I cannot understand the attitude that the Administration 
repeatedly has taken toward public employees. The Office of 
Special Counsel is supposed to protect the rights of public 
employees. It is an important mission, not just for the sake of 
the employees themselves. Public employees who come forward as 
whistleblowers serve an important function in our democracy. 
They provide a check on the bureaucracy by warning the public 
when there is waste, fraud, or abuse at a government agency. 
And this Subcommittee, in particular, has the assignment to 
review these things as carefully as we can and as diligently. 
Many times the only people who are aware of such wrongdoing are 
those who work inside the agency. If we fail to protect those 
who come forward and do the right thing, we do a disservice to 
every taxpayer in the country and every citizen who relies on 
the government to provide quality services.
    Again, Mr. Chairman, many thanks for calling this hearing.
    Senator Voinovich. Thank you, Senator.
    Mr. Bloch, it is tradition here on this Subcommittee that 
we swear in our witnesses. If you will stand and I will 
administer the oath.
    [Witness sworn.]
    Mr. Bloch, I would like to remind you to please keep your 
oral statement to 7 minutes and also remind you that your 
entire written statement will be made a part of the record. 
Thank you for being here today.

TESTIMONY OF HON. SCOTT J. BLOCH,\1\ SPECIAL COUNSEL, OFFICE OF 
                        SPECIAL COUNSEL

    Mr. Bloch. Thank you, Mr. Chairman, Senator Akaka, Senator 
Lautenberg, and distinguished Members of the Subcommittee. In 
Shakespeare's immortal drama of political treachery and 
leadership, Julius Caesar, he states, ``There is a tide in the 
affairs of men which, taken at the flood, leads on to fortune. 
Omitted, all the voyage of their life is bound in shallows and 
in miseries. On such a full sea are we now afloat, and must 
take the current when it serves or lose our ventures.''
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Bloch appears in the Appendix on 
page 33.
---------------------------------------------------------------------------
    Senators our country is at a high tide of homeland security 
and national security affairs, and what we do and how we meet 
the public trust will determine in some part the success of the 
American venture of limited self-government. At OSC, our 
ventures into reform and innovation in the Federal workforce 
have set us on a course toward greater efficiency, greater 
accountability, and I am proud to be a part of the solutions 
with you.
    Kristin Shott certainly understood the high tide of safety 
to the public and our state of war when she reported to us the 
nonconforming welds on the USS Kitty Hawk aircraft carrier, 
which averted a potential loss of life and destruction of jet 
fighters. As a result, Ms. Shott has suffered greatly for 
carrying on in her role of whistleblower.
    It was the same for an FAA controller who courageously 
reported to us that her superiors failed to properly 
investigate and report near misses at a major international 
airport. In layman's terms, these planes were almost running 
into each other about every other week.
    Another conscientious whistleblower took on the U.S. Air 
Force to protect the integrity of the Air Force's C-5A Galaxy 
transport aircraft. The same goes for the TSA employee who was 
subjected to a retaliatory investigation, placed on paid 
administrative leave, and ultimately proposed for termination 
because she reported to TSA's Office of Inspector General that 
her supervisor illegally brought his privately owned AK-47 to 
the office. We have pursued protections for these 
whistleblowers who have been reprised against for their brave 
reporting.
    Or take Judithe Hanover Kaplan, former colonel, U.S. Air 
Force, who was a nurse in Federal employment with a Ph.D. and 
an unblemished record who was fired when she was called away on 
military duty. One of my first acts upon taking office was to 
take swift action on that case. We filed it as the first ever 
USERRA case before the Merit Systems Protection Board (MSPB) in 
the history of OSC, and we got more money for her than was 
proposed originally in the case that was filed.
    OSC is aware of taking the current when it serves to 
protect whistleblowers, to step up prosecutions for returning 
service members, and to vigorously prosecute illegal 
partisanship and illegal personnel practices to bring greater 
integrity to our Federal Government. The problem of good 
government is not divided by party but by commitment to 
principle.
    During my confirmation hearing and after I became the 
Special Counsel, it was apparent that two major problems 
confronted OSC, a serious backlog of cases and a cumbersome 
organizational structure. My publicly-stated pledge to this 
body and to the public has been to give all full, fair and 
expeditious resolution to all cases, especially the 
unacceptably high number in backlog.
    My recent reorganization is dedicated to the above-stated 
goals. Indeed, given the widespread press about these historic 
backlogs and the GAO report issued shortly after I assumed 
office, it is indeed ironic that we are now being subjected to 
such scrutiny for having addressed the backlog, studied the 
source of the problems, and embodied a creative and long-
lasting strategic solution to the problem that will benefit the 
Federal workforce for years to come. I have kept my pledge to 
Congress and Federal employees and am pleased to report that we 
have made tremendous progress in our first year.
    One of my first priorities in office was to address and 
eliminate backlogs in the Intake Unit, Complaint Examining Unit 
(CEU), Disclosure Unit and Hatch Act Unit, within 1 year. At 
the same time, I made it clear that ultimately the Agency would 
reorganize into a leaner, better organizational unit. The 
Agency seemed to lack a vision and needed performance goals and 
standards. Personnel did not seem strategically placed to solve 
Agency challenges. Agency structure was process-oriented, not 
results driven.
    I created a Special Projects Unit (SPU), which was new to 
the Agency, in April 2004, and it managed the Agency's 
resources and directed the backlog resolution efforts. The SPU 
became, so to speak, the ``fireman'' of the Agency. SPU is now 
the Agency's official watchdog on case backlogs and will ensure 
that OSC staff will resolve any large inventory of cases before 
they become backlogged. In addition to the SPU, we hired an 
independent assessment team to study the Agency and make 
strategic recommendations. The results of the past year were 
unprecedented. As we announced on May 17, 2005, in a detailed 
response to GAO's report in the record here, I am pleased to 
report that we reduced the overall Agency backlog by 82 
percent, from 1,121 to 201 cases in the Intake and Disclosure 
units, all by the end of calendar year 2004, and all without 
sacrificing quality.
    We gave a full and fair resolution to all claims, such as 
the TSA whistleblower, the Air Force employee, and Ms. Hanover 
Kaplan. In fact, we were able to provide even more justice to 
complainants. During this backlog resolution project we doubled 
the historic percentages of internal referrals for Prohibited 
Personnel Practices. This meant an even higher percentage of 
claims were investigated and are being investigated.
    For whistleblower disclosures, we have nearly doubled the 
number of cases that were referred back to agencies or their 
Inspectors General for further investigation. The credit for 
this Herculean effort goes to my career staff that has worked 
long and hard to meet our goal. Our Hatch Act unit has reduced 
backlogs of older cases to a very manageable level, provided a 
record number of advisory opinions--some 600 more than the 
prior year, done extensive outreach during an election year, 
and been a model of non-partisan enforcement. Truly amazing 
results.
    In January, I announced an Agency reorganization plan to 
ensure no future case backlogs would occur and to create 
internally consistent procedures. I consulted with all senior 
management as well as my immediate staff throughout the past 
year in preparation for this. The independent assessment report 
was not the only source of information that I utilized to 
reorganize the Agency. It was only one among several tools.
    The overall paradigm was to delayer the current OSC 
organizational structure; we had a ``SES'' sandwich at OSC, if 
you will. All SES and several GS-15 level supervisors were in 
Washington and took turns reviewing what had already been 
reviewed. I wanted to ``power down'' decisionmaking to the 
lowest levels of competence versus having repeated reviews, 
endless written memoranda, and needless meetings. OSC was a 
D.C.-centric organization that some saw as ``cherry picking'' 
all of the good cases away from the existing field offices, and 
often the field offices felt as if they were mere appendages of 
our Agency and I wanted to change that.
    The restructuring will also include a new field office in 
the upper Midwest, in Detroit, for geographic representation 
throughout the United States. With the various States assigned 
to this office under the new plan, this office will handle the 
same number of cases as the other field offices. The management 
director reassignment was based on the precepts of strategic 
management of human capital, placing the right people in the 
right positions to have a winning team.
    At the same time, we have implemented a vigorous new 
training unit that will cross-train personnel to work in other 
areas of law. The lack of cross-trained personnel was a major 
impediment to attacking backlogs. Our new customer service unit 
will better serve the public and Federal employees.
    Last, we have stepped up enforcement of Uniformed Services 
Employment and Reemployment Rights Act (USERRA) cases within 
the Federal Government. This is the law that guarantees job 
protections to those service members who go on active duty and 
want to return to their job when their service ends. With the 
historic mobilization and demobilization some have faced 
illegal employment practices after their active service. 
Although cases have been in the Agency for years, I am the 
first Special Counsel to take MSPB actions against agencies 
that were not in compliance with this important law. As the 
father of a U.S. Marine who has served in two combat tours in 
Iraq, the last along the Syrian border from which he recently 
returned, I do not take these USERRA responsibilities lightly.
    Last year, a law was passed giving us additional 
responsibilities under this law and we have now set up a new 
USERRA unit within OSC. This new arrangement marries up OSC's 
investigative and prosecutorial roles, which do not work as 
effectively when separated.
    As Shakespeare said, we must take the current when it 
serves, and thanks to our excellent career staff we have taken 
it at OSC, with proud results that have improved the merit 
system and our government's overall efficiency and safety.
    I welcome any questions you have. Thank you, Senators.
    Senator Voinovich. Thank you, Mr. Bloch. We are going to 
have 5-minute rounds of questions.
    Mr. Bloch, I would like you to provide more details 
regarding your decision to open the office in Detroit. From 
what I understand, 10 of the 12 affected employees that were 
asked to transfer to the field offices have left your Agency 
entirely. Since you have only about 110 employees, losing 
nearly 10 percent of your workforce in less than 3 months could 
negatively impact the progress you have made on this case 
backlog. Now you must recruit, hire, and train new staff to 
replace those that left. Your Agency has a specialized mission 
and I suspect it is not easy to find potential employees to 
help you accomplish your goals. What steps are you taking to 
ensure that the new employees have the tools that they need to 
get the job done? This gives you an opportunity to talk about 
that office, that decision and the whole issue of the short 
notice to have folks leave, because there were some allegations 
that the reason they were asked to move within the 10-day 
period was that you were unhappy with them and that was one way 
that you could show your displeasure. We might as well just get 
that out on the table and give you a chance to respond to it.
    Mr. Bloch. Thank you, Senator. I appreciate your 
leadership, the leadership of Senator Akaka and Senator 
Lautenberg and this Subcommittee. I share with you 100 percent 
commitment to the principles you have expressed and I want to 
assure this Subcommittee that we are not doing anything 
contrary to what you have expressed in terms of the vision and 
the goals for the Federal workforce.
    I will take the last part of your question first, Senator, 
if I might, to simply dispel any notion that there was any 
attempt to do away with, or retaliate, or hurt any employees. 
We understand at OSC, and we have discussed this at length, not 
only with my immediate staff but with the SES and other career 
staff who are in leadership in OSC, that it was our sincere, 
and is our sincere desire that each and every one of the 
employees affected by this reorganization plan would come along 
with us and be a part of this new team, which was going to be a 
great success and is still going to be a great success. We were 
very mindful, and still are mindful, of the human dimension, 
how this affects people.
    We realize the 10 days seemed rather harsh and we 
immediately gave in, in fact, on the recommendation of our 
human resource manager who told us originally 10 days was what 
the case law said was permissible and that is what we 
understood. We also felt, and I want to make sure that everyone 
understands this on the Subcommittee, that we were not going to 
just give them 10 days. They also had all kinds of time to make 
a decision, even if they decided to initially determine they 
might want to go, and most of them did say they probably did, 
that they could always change their mind without any harm to 
them or any effect, and we were going to work with them at all 
levels to try to facilitate a good result for them.
    Indeed, I want to clarify for the record that each of these 
employees we were very concerned about and we made 
recommendations to them for other Federal employment. When we 
had the opportunity we gave them very high recommendations. We 
had nothing but good will towards them. They were excellent 
people who had excellent records and we simply had a difference 
of opinion about management style perhaps, but it was nothing 
more than that. I want to assure this Subcommittee that there 
is no truth whatsoever to that aspect of the question.
    With regard to why we opened the Detroit office, we did not 
seize on Detroit as a city that we were looking for, but rather 
we talked to employees----
    Senator Voinovich. What I would like to know is why did you 
not choose Cleveland.
    Mr. Bloch. We tried, Senator, and your wonderful State of 
Ohio. We actually have people from Ohio who came into our 
Agency after I came aboard and they were wanting Cleveland or 
Columbus. Unfortunately, GSA was in the driver's seat for us on 
this issue. We wanted to go to Chicago because employees had 
recommended Chicago to us. They had recommended Ohio, 
Indianapolis, and Kansas City. GSA was unable to accommodate us 
and told us, you are not going to be able to get those cities 
for a year. Chicago was our top pick. That is an MSPB based 
city and employees that are in our Agency from there, and in 
fact the head of ADR was from there originally. So that was our 
first choice.
    But GSA said, you can get space now, we have space 
available in a Federal building in Detroit, with no build out 
costs. We were quite surprised by that. My immediate staff went 
and visited, looked at it and it seemed appropriate.
    Senator Voinovich. So the issue is the GSA basically 
controlled that decisionmaking that you went to Detroit.
    Mr. Bloch. That is correct.
    Senator Voinovich. It has been said that the employees who 
were asked to transfer but decided to leave OSC is because they 
had a difference of opinion with you in terms of whether that 
is a good idea or not, or what was it?
    Mr. Bloch. Senator, I do not pretend to say that about 
them. I am not trying to put words in their mouth. I am saying, 
at worst it was a difference of management style. But I think 
what they really expressed to us was, we have human issues in 
our lives. We have family. We have other issues and we really 
would prefer to stay here, and was, I think, the basis of much 
of the decisionmaking. We had a couple of employees who 
immediately said they would go and were on board and were 
getting ready, and in fact, made trips out there to Detroit, 
two of whom were, I think, from Detroit originally, so the 
hardship issue was not as great for them. They had family they 
could stay with.
    Senator Voinovich. So basically the eight that did not go, 
or whatever it is, they did not want to go out to Detroit 
because of family reasons and so on. But they did leave the 
Agency; is that correct?
    Mr. Bloch. Some of them left the Agency.
    Senator Voinovich. Of the ones you asked to leave, how many 
stayed in the Agency?
    Mr. Bloch. We did not ask anyone to leave. We asked them to 
stay with us. Those who were caught up in the reorganization 
plan that would have to be reassigned geographically----
    Senator Voinovich. How many of them stayed with the Agency?
    Mr. Bloch. I believe it is three or four.
    Senator Voinovich. Then the others left and went somewhere 
else?
    Mr. Bloch. Right. One retired. Most of the others got other 
jobs in the Federal Government, thankfully in the whistleblower 
area, so I think it is a net plus for the Federal sector for 
the merit system. But in any event, yes. And we made 
recommendations to those employers, giving them very high 
marks.
    Senator Voinovich. Just for the record, why don't you just 
send as part of this hearing, send me a letter about what 
happened to these people so it is very clear in the record? Who 
went out, who did not go out and what happened to them, so the 
record is clear about what happened there.\1\ I will ask one 
question--my time is up--but two did go out there and how are 
you doing in terms of recruiting people for that office?
---------------------------------------------------------------------------
    \1\ The letter referred to dated May 31, 2005, appears in the 
Appendix on page 40.
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    Mr. Bloch. Thank you, Senator. That was another part of 
your question I neglected to get to. We had two that went out 
there, but ultimately they got other jobs in the whistleblower 
area in Washington, but we had two other volunteers that went 
out there and they are doing a wonderful job. They have opened 
the office. One Senior Executive Service has been overseeing 
that, traveling to various field offices including Detroit, to 
make sure that is opened correctly.
    We have hired, unbelievably, through the tireless efforts 
of the career staff on the hiring committee, been able to hire 
all those positions back. I think essentially all the positions 
that we lost. We have, I think, four investigators and five 
attorneys we have hired recently through a competitive process. 
We are very grateful that we got very high quality employees, 
people who could step right in, who have experience and 
knowledge and background and a commitment to this area. So we 
are very hopeful about the future. The Detroit office is 
looking very promising. We are doing really well with cases, 
some of which I have cited here. We think the future looks very 
bright and we are very sorry that some of the employees were 
aggrieved, and we really hope the best for them.
    Senator Voinovich. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Bloch, I am glad to hear about the tremendous progress 
you feel you have made with the office and the results, as you 
mentioned, have been unprecedented. You have worked on the 
backlog and consulted with the employees. I am glad to hear all 
of that.
    I have some questions that will help clarify some of the 
concerns I have. Just to follow up on Senator Voinovich's 
question on the reorganization. You did not extend the time for 
employees to make a decision on the reassignment until Members 
of Congress protested. How was the ``all kind of time to make a 
decision'' relayed to the affected employees?
    Mr. Bloch. Thank you, Senator Akaka.
    Senator Akaka. How was it relayed to them?
    Mr. Bloch. Thank you, I appreciate the question and the 
concern. We shared the concern. Again, we originally set forth 
all of the procedures that were going to be used for the 
reorganization, and giving people notice of their rights and so 
on, and we relied on our human resource director, the manager 
of the human resources division, to come up with all of the CFR 
portions and the various timelines and so on. We did not make 
this up. It was recommended to us.
    After the fact, and indeed thanks to your staffs and 
yourselves, we were made aware of some of the concerns and the 
problems with the timeline. We were quite cognizant of the 
difficulty this posed for some people. Our human resource 
director came up to us and said, let us give them 10 additional 
days. Let us do it. And we said, we have no problem with that 
whatsoever. He went around to each office, for those who were 
present, related to them immediately orally. We also gave them 
in writing an additional 10 days. Plus he mailed it to those 
who were not present on that particular day. We also had him--I 
think he would have done this any way on his own--but we asked 
him to make sure they understood, we will work with you.
    Senator Akaka. I am also concerned, Mr. Bloch, by your 
statements in the press regarding OSC employees, particularly 
where you said ``it is unfortunate that we have a leaker or 
leakers in our office who went to the press rather than coming 
to me.'' Given the specific role that Congress gave to OSC to 
protect employees from adverse action by Federal agencies, 
especially whistleblower retaliation, I am deeply concerned 
about the message this sends to Federal workers.
    My question to you is, why did you refer to OSC employees 
who believed they were disclosing violations of law as leakers?
    Mr. Bloch. Thank you, Senator. That certainly is an 
unfortunate term and I think that harkens back to an article 
that appeared in the Federal Times some year-and-a-half ago, or 
at least over a year ago, I think. As I am sure Members of this 
Subcommittee may have had experience with, sometimes remarks 
get taken out of context or emphasized in a way that makes them 
appear far worse than they were. We had a lengthy hour-and-a-
half interview or hour or something and the tape recorder and 
the discussion and the notes do not often reflect things like 
quote marks being put around something by your fingers and 
things of that nature.
    I certainly did not mean anything inappropriate or 
derogatory. We were talking about the general issue of the 
tendency of new Special Counsel to have people who might 
disagree with him, and that I was trying to express our 
willingness to work with anybody on any issue, and it would be 
better if they came to us. In fact, the reporter may have even 
used the term ``leaker'' with quote marks around it and we had 
that discussion going. I cannot honestly recall the 
circumstances but that is not how I look at my employees. I 
look at my employees as valued individuals who are part of a 
team and who have given me great advice and even greater 
efforts.
    So I reject the notion that people should not be permitted 
to express their opinions, either to me or to the public or 
wherever they want. We have made it very clear to everyone in 
the Agency that we appreciate their rights and they should be 
able to express themselves.
    Senator Akaka. Do you deny you used the word leaker?
    Mr. Bloch. No, I do not deny that occurred during the 
interview. All I am expressing to you, Senator, is that in the 
context I am not sure that it was intended in the way that it 
has been used.
    Senator Akaka. Mr. Chairman, my time has expired.
    Senator Voinovich. Senator Lautenberg.
    Senator Lautenberg. Mr. Bloch, you expressed your concern 
for the employees and how sensitive you want to be. On the 
other hand, your actions do not comport with your words, I have 
got to tell you that. I listened in stark amazement at times at 
the things you say you care about and you are sorry for and it 
was misunderstood. We ought to get this straight here. We are 
going to judge you based not so much on what you say today but 
on the actions you have taken thus far.
    One of the decisions you made earlier this year was that 
the Department of Treasury officials did not violate the Hatch 
Act by presenting John Kerry's tax plan and posting the results 
on the Treasury web site in support or defense of 
administration tax policy. Do you think that is an appropriate 
place to be spending taxpayer money, because it was obviously a 
tactic in a political campaign? But that was your decision.
    Mr. Bloch. Senator, I appreciate your question. As we 
stated to you in a letter, we took that claim very seriously. 
The Hatch Act unit, which is in charge of these matters, 
thoroughly investigated that using an investigator and an 
attorney. They thoroughly looked through documents and 
interviewed witnesses at the Department of Treasury and it was 
their determination, not mine, that the use of the web site and 
that the defense of administration policy which had been long-
standing across all different partisan divides, different 
administrations had done this, that this was acceptable as 
long----
    Senator Lautenberg. You saw no problem with that? I mean, 
you are the boss.
    Mr. Bloch. No, I disagree with that, Senator. We did see a 
problem with it. It is just that the Hatch Act Unit, SES and 
GS-15 career staff are highly capable and know a lot more about 
Hatch Act than I do, and said it did not cross the line. 
However, we had concerns, and those concerns were expressed in 
a letter to the Department of Treasury general counsel's 
office, do not get into this sticky wicket anymore, to make it 
clear to employees they are not going to be coerced into doing 
anything partisan during an election year, and that they have 
Hatch Act rights, and that the only thing they are required to 
do is their job and the defense of administration policy and 
not crossing over the line.
    I mean to tell you, Senator, that we did not get a warm 
fuzzy from the Department of Treasury when we did that. But we 
did express difficulties and problems with that.
    Senator Lautenberg. Thank you. You said before that you 
tried to be considerate of the employee needs and so forth when 
you declared that you had 10 days to make a decision as to 
whether you would move you, your family, your grandmother, 
whoever else was in your family unit, to Detroit, but you had 
this mad dash to reduce the staff and the backlog. It seems to 
me that you had determined that heads would roll if they did 
not agree.
    Now how many employees do you have in the Detroit office?
    Mr. Bloch. Currently we have two full-time equivalents with 
three new hires which should be joining us shortly.
    Senator Lautenberg. This decision was made in January; am 
my right?
    Mr. Bloch. The decision was announced in January. I believe 
it was made in December, late December.
    Senator Lautenberg. So obviously this did not meet with 
thunderous applause from the employee group that was asked to 
make this move. It is terrible to say to an employee who may 
have lived in the area here for 20 years or whatever, and has 
established their family roots, and you say, OK, you have got 
10 days, put up or do whatever you want to do. These employees 
that you now bemoan having lost, I do not think got 
particularly human treatment.
    You said that there was case law to substantiate it, but at 
what point does soul creep into case law? Is there any point in 
time, is there anything that says, these are human beings? They 
have lives to conduct. But case file; you are out of here. How 
does that strike you? You obviously are proud of your son 
serving in the Marine Corps. You are proud of your family 
thusly. But aren't other people entitled to some family pride, 
some family balance when a decision is made that affects their 
life, her life, or their lives?
    Mr. Bloch. Yes, Senator, I agree with you, they are 
entitled to consideration and we never intended to try to hurt 
anyone, and we did not intend for them to have to move in 10 
days. All we were asking them was for their initial decision, 
will they go along, because we had a lot of planning to do to 
open the office in 60 to 90 days. I want to take a clear stand 
here for the record that we had three different offices we were 
sending 12 different employees to, not just Detroit but also 
Dallas and San Francisco, to be consistent with our overall 
plan to have smaller modular units that were more agile, had 
power down from D.C. and had a lot of innovation and leadership 
within their own offices.
    Now in response to your question, I did discuss with my 
immediate staff as well as with career staff the very thing 
that you have raised, which is the human problem here. We have 
real people that we care about who have real lives, who have 
real histories with commitment to the workforce and we were 
having to do a balancing act. This was a management-directed 
reassignment, which according to the Government Executive that 
did an article on this, happens about 22,000 times a year in 
the Federal Government. So each one of those people are 
affected. Each person is affected by a decision I make, and I 
am quite well aware of that, and it is something that weighs 
heavily on my decisionmaking.
    However, we thought this was for the best of the Agency. I 
want to hasten to add that the SES employee who was affected by 
the Detroit reassignment said to us in the first discussion 
about whether he would go or not, I think this is a creative 
solution. I want to go along with this. This might actually 
work really well. So we were very confident and hopeful that 
all employees would see their way clear to helping us achieve 
the results. But yes, Senator, the human dimension really meant 
something to me then. It means something to me today.
    Senator Lautenberg. But eight people did not agree with 
you.
    Mr. Bloch. Thankfully, they have other jobs, most of them, 
and I am very thankful for that.
    Senator Lautenberg. That is very thoughtful. Thank you.
    Senator Voinovich. Senator Levin. Thank you for being here.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    First on the question of sexual orientation discrimination. 
What is the current policy as to whether or not claims of 
adverse action against an employee based purely on orientation 
is recognizable and within your jurisdiction?
    Mr. Bloch. Thank you, Senator Levin. Thank you for being 
here and giving me the opportunity to respond to these 
questions and set the record straight on these issues. I want 
to say what I said in my confirmation to you personally, as 
well as in the hearing, my one hundred percent commitment to 
those employees who come to us who have complaints, that a 
complaint of sexual orientation discrimination or any other 
kind of discrimination based on sexual activity, or any other 
activity, conduct of any kind, we have enforced the statute 
that we have that governs this. We enforced it through the 
process of our legal review, and we enforce it today and we 
never stopped enforcing it. So they do have protections.
    Senator Levin. I just want to ask my question, which is, 
put aside conduct, just about sexual orientation. Somebody 
says, I am gay; that is it. That is my orientation. And there 
is some adverse action against that person purely because that 
person says, that is my orientation. No showing of conduct. Is 
that within your protection?
    Mr. Bloch. Senator, thank you. The answer to your question 
is, when you say the term sexual orientation or gay, you are 
saying something that equates to status or class protection. So 
the question I would say is, do we give status protection to 
any employees? The answer is, yes, we do. That is found in 
Section 2302 (b)(1) of our statutes. The status protections 
that we have based on just who you are, not on what you have 
done, are to be found there and are enumerated and they are 
typically understood as Title VII types of protections, but 
they also add--we have race, sex, religion, and all those, but 
they also add marital status, and political affiliation.
    Senator Levin. I understand those protections under Title 
VII. I am talking about in your jurisdiction. Will you protect 
in your jurisdiction an employee against whom adverse action is 
taken purely because that person is gay, without any 
information relative to activity? You always use the word 
activity and I want to drop that word out of there and ask you 
the direct question, because we keep floating back and forth on 
this issue.
    Mr. Bloch. Thank you, Senator. The answer is that under 
(b)(1) sexual orientation does not appear as a class status 
protection. The only other section of the statute that we 
have----
    Senator Levin. Is it within your jurisdiction to protect or 
is it not? Can you give me----
    Mr. Bloch. Yes, it is within our jurisdiction to protect 
employees who claim sexual orientation discrimination. When 
they file a Form 11 with our office the first question we ask 
them is why do you think you have been discriminated against. 
If they tell us because of sexual orientation we say, OK, we 
want to investigate this. The next question is, did you engage 
in any conduct for which you were terminated or in any other 
way discriminated against.
    Senator Levin. The answer is no.
    Mr. Bloch. That does not adversely affect your employment.
    Senator Levin. Let us assume the answer is no conduct. I 
just made a statement that I am gay, action was taken against 
me. Drop the word conduct. This thing has gone back and forth 
and back and forth for years. Give us a clear answer, yes or 
no. There is no showing of conduct, no allegation of conduct 
relative to activities, homosexual activities. It is just, I am 
gay. Yes or no, is that protected by you or not?
    Mr. Bloch. We are limited by our enforcement statute given 
to us----
    Senator Levin. Is it protected or not?
    Mr. Bloch. If given the opportunity to answer I will answer 
it this way. We are limited by our enforcement statutes as 
Congress gives them. The courts have specifically rejected 
sexual orientation as a status protection under our statutes in 
Morales v. Department of Justice in 1993. It is not a part of 
our--it appears nowhere in our statutes. It is not in the 
legislative history. The case law has rejected it. Far be it 
from me to exceed my authority and make law when I do not have 
that authority.
    Senator Levin. Why did it take me 5 minutes to get that 
answer out of you?
    Mr. Bloch. I believe it is more than 5 minutes we have been 
talking, Senator.
    Senator Levin. Why did it take me 6 minutes? I do not want 
to underestimate the amount of time that I have been trying to 
get a direct answer out of you. Why does it take so long for 
you to say you do not have that jurisdiction? I disagree with 
you, by the way, and the White House does, too, but why does it 
take you so long?
    Mr. Bloch. I think, Senator, in this area we have what I 
would refer to as ships passing in the night. Some people refer 
to sexual orientation and they mean conduct. Some people refer 
to it and they mean class protection and status. So we have to 
be clear about our terms, and when we are talking about legal 
protections that could debar a Federal employee, a manager let 
us say from employment, we have to know we have statutory 
authority in that area. We do not see sexual orientation as a 
term for class status anywhere in the statute or in the 
legislative history or the case law. In fact, quite contrary to 
it.
    Senator Levin. The American Spectator a few weeks ago 
published a letter from you saying that you have been 
conducting a responsible, common sense, and full review of this 
issue. Is that under review again?
    Mr. Bloch. I am sorry, no, the original policy that we put 
out is still in effect and it is on our web site which sets 
forth not only the original administration position but our 
enforcement statute. And not only the conduct requirement but 
our extension of that to implied conduct.
    Senator Levin. So do you imply conduct with nothing more 
from a statement that somebody is gay?
    Mr. Bloch. I do not imply anything. But that if there is 
evidence that it established that there is imputed personal 
conduct, an inference can be drawn. Yes, Senator, it goes 
beyond witnessing somebody doing something.
    Senator Levin. But you have to impute conduct?
    Mr. Bloch. Yes.
    Senator Levin. It is not enough that somebody says they are 
gay, adverse action is taken against them, you do not consider 
that within your jurisdiction because of the word conduct in 
the statute. The White House has made very strong statements 
about not allowing discrimination against Federal employees 
based on sexual orientation. It does not talk about activity, 
it says sexual orientation. President Bush expects Federal 
agencies to enforce this policy to ensure that all Federal 
employees are protected from unfair discrimination at work. 
That is not something that you believe is binding on you?
    Mr. Bloch. I believe that is binding on me.
    Senator Levin. If there is conduct.
    Mr. Bloch. No, it is binding on me without conduct. But it 
is not something I can prosecute on the basis of. It is binding 
on my Agency. It is binding on the Department of Justice. It is 
binding on each agency.
    Senator Levin. It is binding on you but you cannot do 
anything about it.
    Mr. Bloch. If you look at the Executive Order in question, 
that you are referring to, it states specifically, no right or 
remedy is conferred upon a Federal employee against the 
Government of the United States by virtue of this Executive 
Order.
    I am limited by the enforcement statutes that you give me, 
Senator.
    Senator Levin. My time is up. Thank you.
    Senator Voinovich. I would like to just explain for the 
record that we talked about the moving of employees and it was 
brought to my attention that the requirement for moving Federal 
employees is very common. Military personnel move usually every 
2 to 3 years. Federal law enforcement like the FBI special 
agent--I know one of our agents came to see me, the new head of 
the Cleveland office--and they are required to move quite 
frequently, and about 22,000 non-military employees a year are 
moved around in the Federal Government. That does not mean that 
we ought not to be as sensitive as we should in terms of giving 
them notice, and working with them, and understand their family 
conditions and so forth. I hope that because of this incident 
you have learned something in terms of consideration, and that 
int he future you will allow a little mroe time for this 
process.
    Mr. Bloch. Yes, Senator, I am learning new things every 
day.
    Senator Voinovich. You mentioned the issue of the backlog 
of cases in your opening statement, but there are some 
allegations out there that you went through this backlog and 
arbitraily closed whistleblower cases in a cursory fashion. And 
the reason for it is because in the prior 3 years, you closed 
more cases in 1 year than they did in 3 years, so the 
implication is that perhaps your employees really didn't look 
at these cases as thoroughly as they should before they were 
closed. I would like you to just share with us again what 
process you went through in examining those cases. Also please 
share the steps you took to ensure your employees had a way to 
provide feedback in order to improve case processing. So often, 
we don't ask them.
    Mr. Bloch. Thank you, Senator. Indeed, when I first got 
there, I met with all of the employees and I said I want your 
creativity. Like Socrates said, real wisdom is knowing you 
don't know anything. And I knew I didn't know a lot, but I knew 
they knew a lot, and I wanted to mine that material, I wanted 
to mine that talent and get them to tell me how we should look 
at the world differently. I even said to them, if you have to 
stand on your desk to look at your files in a different light, 
let's do that. Let's do it together!. Let's try to come up with 
solutions. And you know what? They did. We put together this 
Special Projects Unit and it was like a bull pen. And they 
would sit together, very talented employees like Pernell Caple, 
who's one of the leaders of our intake unit, who knows more 
about personnel law--he's forgotten more than I'll ever know. 
And people like that were in the bull pen, with ideas going 
back and forth, and then experienced people from the 
Investigation and Prosecution Division were coming through and 
they were interacting with new ideas. And out of that process 
arose new procedures and new solutions to the backlog that made 
it possible for us to give full and fair resolution, never 
sacrificing quality. In fact, we doubled the number of claims 
that were successful over the rate that had been done in the 
prior years. I think that speaks very highly for the process.
    Senator Voinovich. The impression that I originally had, 
when we talked about the process, is you closed cases just to 
eliminate the backlog. What you are telling me is that wasn't 
the case, that you went through them and there were many that 
were moved on to agencies to be investigated or other action 
that you took. It didn't mean that because you eliminated the 
backlog it meant that they were dumped into the circular file.
    Mr. Bloch. That's correct, Senator. What we did is we 
released the bottleneck in the Agency and we took care of 
business. But most of all, we took care of employees who were 
complaining. I said to my staff when I first arrived, also, we 
do not exist to get rid of cases; we exist to find the good 
ones that are there. And I want you to change your mentality 
from one of ``they're coming down the assembly line,'' kind of 
like the Lucille Ball episode where all the chocolate keeps 
coming down, you've got to find a place for it because you 
can't wrap it all. And I said, ``We've got to change our 
mentality to one of finding the good that is there.''
    And they've done that, they've done everything I asked 
them. It's not my doing, Senator. All I did was point to the 
hill. They took the hill. And if you told my career employees 
that they threw cases out and didn't do their job and put their 
bar licenses on the line because of me--it isn't going to come 
out of their mouths. They didn't do that. In fact, a bipartisan 
group of staffers from the House side--our oversight 
committees, Congressman Porter and Congressman Davis--last 
month came through and spent days with my career staff asking 
them questions about what we'd done. And they looked through 
hundreds of files randomly to determine if we'd done a proper 
job. And they concluded that we had, and they sent us a letter 
to that effect on May 17, 2005, which, if it isn't already, I'd 
like to make a part of the record.\1\
---------------------------------------------------------------------------
    \1\ The letter, dated May 17, 2005, appears in the Appendix on page 
210.
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    Senator Voinovich. I would like to make it part of the 
record, so without objection, it will be.
    Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman.
    I want to follow up on the line of questioning of Senator 
Levin. During your legal review of the scope of protection for 
employees and role of OSC in protecting employees from sexual 
orientation discrimination, you removed all information on this 
topic from OSC's web site, including a training slide and press 
release. As a result of your legal review, why are these 
documents not back on OSC's web site? Do you believe they are 
in any way inconsistent with the results of your legal review? 
If so, why?
    Mr. Bloch. Thank you, Senator Akaka.
    The answer is yes. I think some of the materials are 
inconsistent with our legal review. There was confusion between 
Section 2302 (b)(1) status protections and the use of the term 
``sexual orientation'' in our training materials as well as 
slide presentations as well as press releases. And it doesn't 
appear anywhere in our enforcement statute, case history, or in 
the legislative history. In fact, to the contrary, it's been 
rejected. So we couldn't feel that we were doing the right 
thing in educating people properly about the law unless we used 
the proper terminology.
    What we put back up on the web site, Senator, was the 
handout called ``Your Rights as a Federal Employee.'' And in 
that handout, it sets forth the same protections that were 
there before under the conduct-based discrimination and it 
expands the list of categories. But it starts with what was 
originally on there, which was Jack's employment is terminated 
because he attended a Gay Pride march. We also expanded it out 
to include all other categories so we didn't give a mis-
impression that we were singling out someone. And that would 
be, attended a pro-life event, attended an animal rights rally, 
or attended a gun owners' rights meeting. So any kind of 
conduct that occurs that people are doing things in their off-
hours should have nothing to do with their performance in the 
Federal workforce. We are fully committed to that and we 
continue to enforce that and never have stopped.
    And we think the materials that are on there currently also 
include our policy statement that in the Federal Government, 
the President has stated the policy of the Administration, and 
then we set forth our enforcement statute and we explain how we 
enforce it.
    Senator Akaka. Will you please provide a copy of the legal 
review for the record?
    Mr. Bloch. Yes, we will, Senator.
    Senator Akaka. Thank you.
    The press reports, Mr. Bloch, that all cases involving 
sexual orientation discrimination are reviewed and investigated 
under a special procedure under the supervision of James McVay, 
your principal legal advisor, who is a political appointee. 
Please describe the process for reviewing and investigating 
allegations of discrimination based on one's sexual orientation 
at OSC and explain how it is different from the process used 
for reviewing other Prohibited Personnel Practices, such as 
nepotism, political coercion, or other Section 2302 (b)(10) 
cases.
    Mr. Bloch. Thank you, Senator. The answer to that is that 
we have a Special Projects Unit which was created, which is 
doing a lot of different tasks, including the new USERRA unit, 
as well as continuing to work on the backlog issues to make 
sure they don't crop up again, and any other major projects 
that the Agency has undertaken that are new in nature. One of 
the undertakings is the new policy that we put out in April of 
last year concerning sexual orientation discrimination. And we 
were concerned that cases might not be given the attention that 
they should be, that they would too quickly work their way 
through the process because of the new mandates for backlog 
reduction. And so what we said was let's make sure that they 
get extra attention, and that is exactly what's happened. Mr. 
McVay has faithfully carried out the needs of the unit.
    But all of these sexual orientation claims receive a higher 
level of review from an SES and they are worked by a career 
employee. So there's a misnomer that they've somehow been 
funneled through a political appointee. As all of you know, 
agencies throughout the Federal Government always have 
politicals at various levels of leadership who are the assigned 
leadership of that particular administration. But that does not 
in any way express any kind of change of the notion of career 
staff working these cases and then being reviewed by higher-
level employees.
    Senator Akaka. Chairman Voinovich, I wish to note for the 
record that staff from our Subcommittee asked twice to visit 
OSC and were told no. However, the request was accepted just a 
few days before this hearing. Mr. Bloch, can you comment on 
that?
    Mr. Bloch. Yes, Senator Akaka. My understanding was that my 
congressional affairs person, Cathy Deeds, had a conversation 
with staffers in the Senate who heard about the people that 
were already at our Agency from the House, who had requested to 
be able to come over, a bipartisan group, to look through our 
files and talk to our career staff. And they asked, well, can 
we come over too, and we said yes. I was requested, and I said 
absolutely, but we want to make sure they don't come in 
midstream and not hear the speeches of the career staff and 
have to reinvent the wheel in the middle of things, so let's 
make sure they have their own time to come over--we were 
talking early May--and that's the last I heard. There were two 
conversations, and I never said no. Absolutely never said no, 
and was happy to have them over any time they want to come 
over. We certainly welcome them. We had nothing to hide with 
the House, and we have nothing to hide with the Senate.
    Senator Akaka. Thank you. Mr. Chairman, my time has 
expired.
    Senator Voinovich. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    Just to summarize our previous discussion, basically it 
seems to me you have acknowledged that it is the policy of the 
Federal Government that adverse action not be allowed to be 
taken against employees based on their sexual orientation.
    Mr. Bloch. That is correct, Senator.
    Senator Levin. But that there is nothing you will do to 
enforce that.
    Mr. Bloch. No, that's not correct. We will enforce that, 
and the first thing we'll ask the employee is--sometimes 
employees don't even know what they have in the way of 
evidence. And so we ask them--and this happens routinely; I've 
heard a number of cases where we're able to find out there may 
be some evidence that we're able to support under Section 2302 
(b)(10).
    Senator Levin. Evidence of conduct.
    Mr. Bloch. Evidence of conduct, actual or imputed.
    Senator Levin. I understand. But in the absence of conduct 
actual or imputed, there is nothing you feel that you can do 
about it even though it is the policy of the government not to 
allow adverse action against employees based on sexual 
orientation alone. Is that just a fair summary of where we are?
    Mr. Bloch. Yes, because of the limitations of my authority.
    Senator Levin. I understand. Now, would you recommend that 
we clarify the statute, since that is the way you read it, so 
that we can permit you to protect those employees against 
adverse action even in the absence of a showing of actual or 
imputed conduct?
    Mr. Bloch. Far be it from me, Senator Levin, to tell you 
how to do your job.
    Senator Levin. I am just asking would you support that?
    Mr. Bloch. If you provide such a statute----
    Senator Levin. No, I am sure you would----
    Mr. Bloch [continuing]. We will enforce it vigorously.
    Senator Levin. I am sure you would. But would you recommend 
that change?
    Mr. Bloch. Well, that's a change that has to come at the 
level of those who are elected to make those decisions. I will 
not step in and try to make a comment about whether you should 
do that or shouldn't do that. My understanding is that it came 
before this body a couple of times, and it has not passed. But 
I certainly will enforce it vigorously if it passes, with 
regard to the Federal workforce.
    Senator Levin. Given all the confusion about this, how you 
impute conduct in this area and all the rest, you are not 
willing even to say yes or no that you would recommend a 
clarification of the statute in this area. You say it is just 
not your job.
    Mr. Bloch. I think we did clarify it as to the statute as 
it exists now. So I don't think there's a lot to----
    Senator Levin. In terms of responding to my question as to 
whether or not, in the absence of direct or imputed evidence of 
sexual orientation conduct, you are not willing to give us your 
opinion as to whether or not we should clarify the statute to 
make it clear that, since it is the policy of the government 
that sexual orientation per se not be used to discriminate 
against people or be the basis of adverse conduct, you are not 
willing to say that you would recommend a clarification of the 
statute. Is that correct?
    Mr. Bloch. I am going to say that I support the 
Administration's position. I have told you----
    Senator Levin. Well, what is the Administration's position 
on my question?
    Mr. Bloch. The Administration's position----
    Senator Levin. On my question.
    Mr. Bloch. On your question, I do not know the answer to 
that.
    Senator Levin. Thank you.
    Mr. Bloch. So I won't purport to speak for the 
Administration. And since I am, even though we're an 
investigative and prosecutorial Agency that's independent, I'm 
still part of the Administration. I think the Administration 
should speak for itself on these issues.
    Senator Levin. Would you find out and let us know for the 
record?
    Mr. Bloch. I certainly will, if I find out.
    Senator Levin. Thank you. The next question has to do with 
the issue which was raised about the transfer, the geographical 
relocation or reassignment of the OSC employees. I understand 
that Mr. McVay negotiated a draft settlement with the 
employees. Is that correct?
    Mr. Bloch. My understanding is that he was running with 
that most of the time, but I'm not sure if it was all the time.
    Senator Levin. Was somebody else involved?
    Mr. Bloch. I think my deputy, Jim Renne, also was involved 
in that at one point. And then at the very end, I was involved 
in a very small period of time.
    Senator Levin. All right, well, Section 9 of the draft 
agreement by whoever worked on it--whether it was one of you, 
Mr. McVay, or all three of you, Section 9 reads the following: 
That the employees agree to waive any and all rights, interest, 
and claims to file any complaints, actions, appeals, requests, 
or other attempts to obtain relief against the Agency, any 
entity of the Agency, any individual employed by the Agency 
itself, including any grievance or complaints process, the 
Equal Employment Opportunity Commission, any State or Federal 
court, public official's office, or administrative forum 
whatsoever.
    So you were proposing that they waive any grievance or 
complaint that they would file with a public official's office. 
Are you familiar with that language?
    Mr. Bloch. Generally, yes.
    Senator Levin. Now, there was an e-mail that was sent out 
saying that there was no intent that the First Amendment 
rights, WPA, or other statutory rights of employees be 
curtailed. Well, what was the intent of that language other 
than to curtail the right of those employees to file complaints 
with elected officials?
    Mr. Bloch. Senator, my understanding is that those 
employees were represented by counsel at a very able law firm, 
by Mr. Bransford, and this was language that had been used in a 
prior agreement he had with the Pentagon. This is very typical 
release language, that if you want to get extra things and come 
to a resolution, a give-and-take occurs. Everybody waives the 
rights and nobody admits to any liability. It's very typical.
    Senator Levin. You know, waiving rights and liabilities, 
however, is something very different than not complaining to 
Congress.
    Mr. Bloch. Well, they already had complained to Congress.
    Senator Levin. Are you familiar with the law about this 
subject? Are you familiar with Section 620, which is put into 
almost--or a similar provision, which is put into every 
appropriations law by Senator Grassley and all the, I think, a 
lot of other supporters around here of whistleblowers? Are you 
familiar with the language which says that no funds may be used 
to enforce an agreement, policy, or form if such policy, form, 
or agreement does not contain the following provisions: These 
conditions are consistent with and do not supersede, conflict 
with, or otherwise alter the employee obligations, rights, or 
liabilities created by--and then they list a number of 
provisions of the code, including disclosures to Congress. Are 
you familiar with the annual language in the appropriations 
bill prohibiting you from enforcing, implementing any agreement 
which contains the waiver of the type that you had in this 
draft agreement?
    Mr. Bloch. Senator, if you're referring to the no-gag 
statute or rule, I am familiar with that. I believe that there 
is serious question as to whether it applies to agreements to 
terminate employment or the relationship between employer and 
employee, and there's significant dispute as to whether it 
applies at all to the situation at hand. However, we certainly 
did not run afoul of that because this is a negotiated 
agreement. If they want to propose language--which they did, 
and this came from one of Mr. Bransford's agreements with the 
Pentagon; we were not trying to do anything illegal, we were 
simply trying to, as amicably as possible, resolve any 
differences.
    Senator Levin. So they proposed this language? This didn't 
come from you folks, it came from the employees?
    Mr. Bloch. Senator, I cannot honestly tell you at what 
stage what draft came from whom. I know that there was drafting 
going back and forth. All I do know is that the original 
language came from an agreement Mr. Bransford had signed off on 
on behalf of a client with the Pentagon settlement.
    Senator Levin. Thank you. My time is up, Mr. Chairman.
    Senator Voinovich. Mr. Bloch, I have no further questions 
for you. I will defer to Senator Akaka or Senator Levin to 
maybe have another round of 5 minutes.
    Senator Akaka. Thank you, Mr. Chairman.
    Mr. Bloch, following up on the issue of sexual orientation 
discrimination, how many complaints have been filed by 
employees claiming sexual orientation discrimination since 
January 2004? And, what were the results of OSC's review and 
investigation of those complaints?
    Mr. Bloch. Senator, we get about a handful of these a year, 
10 to 20. They are about 13 percent of the Section 2302 (b)(10) 
claims we get, conduct discrimination claims. They are less 
than a tenth of a percentage point of the overall allegations 
we get. We handle each one carefully. We've received 
approximately 20 to 25 since I have arrived. We have 
investigated those. Some are still in the investigation phase 
that are either in the Investigation and Prosecution Division 
going for full prosecution or they are still being investigated 
in the Special Projects Unit and have not made it to the 
Investigation and Prosecution Division. So there are cases that 
are in the Agency that have gone forward since my arrival in 
this area of sexual orientation discrimination allegations.
    Senator Akaka. Concerning your efforts to reduce the 
backlog, I believe the overall referral rate of complaints 
remains at about 10 percent, plus the number of disclosure 
cases referred has not doubled. What is the backlog of 
Prohibited Personnel Practices as defined by Congress?
    Mr. Bloch. Well, we have statutes with deadlines--for 
instance, under Prohibited Personnel Practices, we have to make 
a reasonable grounds determination that a prohibited practice 
occurred within 240 days of the filing. Under the disclosure, 
whistleblower disclosure statute, we have 15 days to make a 
substantial likelihood determination that the illegality or 
waste, fraud, and abuse occurred. We don't have any deadline 
under Hatch Act, but we impose our own, if you will.
    Our concern about backlogs goes much further than statutory 
deadlines. We feel that if a case gets over the age of 60 to 90 
days in the intake unit, it's going to get stale. Witnesses may 
leave the government, people may not have memories of things, 
so we want to act quickly on claims. We indeed doubled the 
number of whistleblower disclosures that went to agencies in my 
first year. It went from 14 in 2003 to 26 in 2004, and my 
desire is to increase that even above that.
    And the way we were able to do this was we got more 
efficient and we also lowered the bar by changing the internal 
legal definition of what substantial likelihood is. It used to 
be this really high standard that almost came to the level of 
reasonable doubt, like they have in criminal trials, and we 
said that doesn't make common sense since we don't have 
authority to actually do the investigation that the inspectors 
general do within the Agency. So we lowered the bar and said 
it's a likelihood, a probability, that when they actually get 
the case at the inspectors general or wherever the Agency sends 
it when we refer it, that it will be established by a 
preponderance of evidence.
    So a probability that there will be a preponderance of 
evidence, a lowering of the bar, and we think this is going to 
be a net plus for whistleblowers and for the public.
    Senator Akaka. OSC serves a valuable role in protecting 
Federal employees and applicants from Prohibited Personnel 
Practices. However, it is unclear what protections employees at 
OSC have when reporting allegations of Prohibited Personnel 
Practices or protected disclosures. Would you please explain 
what redress options are available to OSC employees and whether 
these options afford OSC employees the same or similar 
protections that your office makes available to other Executive 
Branch employees, such as a comprehensive investigation and 
representation?
    Mr. Bloch. Senator, like all agencies, we have an EEO 
program that is administered by the career staff. We have a 
program, if you complain to our office, to the managers of the 
Agency about a Prohibited Personnel Practice or a whistleblower 
disclosure concerning OSC, that it will be handled by the 
management of the Agency if it concerns the career staff. And 
if it concerns the managers of the Agency, such as myself, it 
will be passed on to the President's Council on Integrity and 
Efficiency (PCIE).
    We've had two complaints since I've been there. One was by 
a career employee about my predecessor, and that was handled by 
our office and resolved satisfactorily. And the other is the 
one that was filed recently against me by the affected 
employees in the reorganization, which, again, is unfortunate, 
but that's certainly their right. And we forwarded it on to the 
PCIE and we're very happy that they have it and we'll let them 
determine it, we'll cooperate fully.
    Senator Akaka. Thank you, Mr. Chairman.
    Senator Voinovich. Senator Levin.
    Senator Levin. Just a couple of questions. Thank you, Mr. 
Chairman.
    Just to conclude that nondisclosure agreement line of 
questions, we understand that the employees objected to that 
language and asked that it be removed and that there was 
objection on the part of you folks to removing that. Is that 
accurate?
    Mr. Bloch. The way I understand--to give you my best 
recollection truly on that there was a lot of back-and-forth 
and I wasn't privy to most of it. It was reported to me after 
the fact. My recollection is that there wasn't fundamental 
disagreement about the release language, but rather there was 
some additional language that was batted back and forth in 
terms of what kinds of complaints would be filed and so on. And 
we accepted--ultimately we accepted the language the employees 
proposed through their attorney to maintain their ability to do 
whatever they wanted as far as continue to complain to 
Congress--they already had before we even started to negotiate, 
and we understood that. And we intend to cooperate fully.
    So we eventually said your language is good, we'll go with 
that, and then they didn't want to settle in the final 
analysis.
    Senator Levin. For other reasons than this?
    Mr. Bloch. I don't know the honest answer to that, what the 
other reasons were. But yes, possibly.
    Senator Levin. My last question is about an article that 
appeared in the Wall Street Journal recently, ``Crying Foul at 
Whistleblower Protector.'' One of the allegations which you 
responded to in the article, is about the hiring of a former 
headmaster of a boarding school attended by your children as a 
OSC consultant. I just have two quick questions on that. One 
is, was that a competed contract?
    Mr. Bloch. OK. The answer to that is no, it was an 
intermittent consultant, pursuant to 5 USC 3109, and we 
complied with all Civil Service laws, rules, and regulations. 
It was all signed off on by our contracting officer and our 
human resource department and Bureau of Public Debt in the 
Department of Treasury.
    Senator Levin. Got it. And second, there was a FOIA request 
for the report on work from Mr. Hicks to you, which was 
completely redacted when you sent out the answer to the FOIA 
request. It's called ``Report on Work,'' to you from Mr. Hicks, 
dated September 16, 2004.
    This is the copy you sent out in response to the FOIA 
request. It is not too helpful. It has B5--that is the only 
thing that is unredacted.
    In any event, my question is will you submit to the 
Committee an unredacted version of this report? That is my 
question.
    Mr. Bloch. Senator, I relied on the head of our Legal 
Counsel and Policy Division who handles all FOIA matters and 
the legality under FOIA, and it was their recommendation that 
there were exceptions and exemptions to the FOIA request 
concerning specific pre-decisional materials. So I would have 
to get back to you on that and have my staff confer with your 
legal staff about what we'll do. I don't want to make a 
commitment there and step in something I shouldn't step into.
    Senator Levin. That would be fine. You just let us know if 
you will do that.
    Thank you, Mr. Chairman.
    Senator Voinovich. Thank you. Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. I have a couple of questions I would like 
to ask, but I would ask you, if you don't mind, to just take a 
minute and share with me what you would like for us to take 
away from this hearing. If there are only one or two things 
that we remember from all the things that you have said, what 
might be those one or two top items to remember?
    Mr. Bloch. Senator, I think the top thing to remember is 
that we really have done an excellent job, and it's because of 
the career staff. And anytime some of these unfortunate 
statements have been aired in the press that are nothing but 
rumor and innuendo, it really isn't helpful. Because it's the 
career staff who's done such an excellent job, and it's really 
kind of denigrating and insulting to them to think that they 
would just let some guy like me come in and tell them not to do 
their job correctly. They're not going to do that. They've done 
a wonderful job. And they're very hurt by the kinds of things 
that are being said by people, that they're throwing cases in 
the river, that they're doing bad things. It's absolutely 
false, it's denigrating, and it's not fair to them.
    And that's what I care about, and I hope you take that away 
from what I'm saying, is that they're the ones that count. And 
it shouldn't be about me, it should be about them.
    Senator Carper. All right. The first question I would like 
to ask you is if you could just talk a little bit about 
backlog. And let me just ask, what was the situation at OSC 
when you arrived, when you were confirmed, with regard to 
backlogged cases? And if you have already addressed this, I 
apologize. I would just ask you to do so again. What was, when 
you delved into it, the reason for the backlog that existed? 
What steps have you taken or has been taken under your 
leadership to address that backlog? And finally, do you believe 
that OSC has or will soon have the capability to resolve these 
cases more quickly? And why should we have cause for hope or no 
hope?
    Mr. Bloch. Senator, thank you for that. We have experienced 
an unprecedented year of reduction in backlogs while at the 
same time increasing the rate of referral during that process, 
doubling it, of positive cases. So we think that's a good model 
for looking at the good that is in cases rather than trying to 
get rid of them. We successfully negotiated the waters of 
bureaucracy to strike a good balance between procedure and 
results and to look at whether something actually contributes 
to the end result. The employees came up with the solutions, 
we've implemented those solutions by reducing unnecessary 
referral memos. We sometimes would see 10-page referral memos. 
It might take 2 to 3 weeks for someone to refer something out 
of the intake unit because they were so busy doing something 
else, and then that would be duplicated by the lawyers and 
investigators who would get the case to prosecute it. And so we 
saw a duplication going on, and we wanted to make sure we were 
more efficient than that. And yet we contributed to the overall 
fairness and result to the employee.
    There is reason for hope because we reduced the backlog in 
1 year by 82 percent, while doubling the rate. And we can 
continue to do this into the future by having a better 
structured Agency, more agile and cross-trained, and that's 
what we've tried to do in the reorganization.
    Senator Carper. You talked a little about victims of 
Prohibited Personnel Practices. Do you think that you have made 
it easier during your tenure at OSC for whistleblowers who do 
believe that they have been victims of Prohibited Personnel 
Practices, do you think you have made it easier for them to 
come forward? And if so, how?
    Mr. Bloch. Yes, absolutely, Senator. We have made it 
easier. We lowered the bar for what we would accept as a claim, 
the whistleblower disclosure. We reduced it from a very high 
standard of proof, which was approaching reasonable doubt, down 
to a preponderance of evidence based on what the Agency would 
ultimately investigate, since we don't have investigatory 
authority for the whistleblower disclosures themselves, 
although we do on the Prohibited Personnel Practices side. And 
so we did make it easier for them to file claims, and the proof 
of that is we doubled the number that we sent to the agencies 
as substantiated whistleblower claims.
    Over and above that, we have stepped up our efforts to do 
outreach to employees to say we really care, and we want you to 
file these claims. And we're doing that routinely. I'm giving 
speeches on it, putting out op-eds about it. There's an op-ed 
in this week's Federal Times about the need for protection of 
whistleblowers and how much we welcome them, and the whole 
history of whistleblowing and how important it is to our 
country.
    Senator Carper. Mr. Chairman, I know my time has expired or 
is just about to expire. Could I ask one more question?
    Senator Voinovich. Sure.
    Senator Carper. My last question, Mr. Bloch, is, as I 
understand it, there has been a restructuring during your 
tenure of OSC field offices. I don't fully understand what the 
restructuring is and I don't know that I need to do, but I have 
been led to believe that restructuring has compelled some of 
the affected employees to leave the Agency.
    Senator Voinovich. Senator Carper, I might just say that 
there has been extensive testimony by Mr. Bloch on that issue. 
Maybe you could just summarize it for Senator Carper, OK?
    Mr. Bloch. All right.
    Senator Carper. And before you do, let me just ask my 
question as part of it. Are you concerned about the impact that 
these departures will have on your efforts on OSC's case 
backlog, and are you concerned about the potential impact on 
employee morale. If you could just address those two issues, I 
would be grateful. Thank you.
    Mr. Bloch. Thank you, Senator. We are very concerned----
    Senator Voinovich. Two questions that weren't asked, 
Senator Carper. That is great.
    Mr. Bloch. We are very concerned about employee morale. 
We've implemented new policies. I have an employee advisory 
committee that I established last year, that I receive their 
recommendations and then we implement their recommendations. 
We've changed policies. We're implementing a new student loan 
repayment program, retention bonuses, and a cross-training 
program. We're having an offsite retreat in June. All staff are 
coming in. We really need to pull back together and once again 
recognize and realize the mission of the Agency.
    We are very concerned about those employees who were not 
able to go along with our reorganization for one reason or 
another--their personal lives, they wanted to stay in 
Washington, they got other jobs. We tried to help them get 
those jobs. Again, we're very concerned about that. But this 
was about an overall management decision that we felt we really 
needed to take the Agency in a new direction, a positive 
direction, and a winning direction. And we think we're there, 
and we've hired new employees to be able to make up for the 
shortfall and they're--I think we've got them all in place now.
    Senator Carper. Thanks, Mr. Bloch, and Mr. Chairman, thanks 
for the chance to ask these questions.
    Senator Voinovich. Thank you, Senator Carper.
    Senator Akaka has a couple more questions that he would 
like to ask.
    Senator Akaka. Oh, thank you so much, Mr. Chairman. You 
have been most generous in granting this hearing and granting 
additional time.
    Mr. Bloch, Military and Professional Resources, Inc. (MPRI) 
review called OSC's Alternative Dispute Resolution unit, ``an 
invaluable tool,'' and stated that the unit's mediation 
practice is ``a growth industry which should be expanded.''
    These words of praise are consistent with the findings of a 
GAO report I requested on the use of ADR in Federal agencies. 
However, in March, the ADR unit employee responsible for this 
praise resigned rather than accept the involuntary relocation 
to Detroit. Since most Agency officials with authority to 
mediate are located in Washington, what was the basis for 
moving the sole ADR employee to Detroit?
    Mr. Bloch. Senator, when I first arrived at the Agency, I 
expressed the same kind of praise for the ADR program and the 
desire to expand it. I told all of my employees that I wanted 
to get them to be involved in it. Some of them are trained in 
this and have done some team ADR. So we talked with Linda, who 
is our ADR person, a very capable person whom I've relied on 
greatly, about expanding the program and we've been working on 
that. This was part of our overall vision and mission, was to 
expand it by making the Detroit office a leader, a center for 
the country, where people would come in and have more face-to-
face, because it was my sense from 15 years of law practice 
that the more you got people in the room together, the more 
chance of success you had. And so I wanted to step up our use 
of ADR and make that a national center for that.
    At the same time, we wanted others in the other field 
offices to have some ability to work as a team. And we've 
actually been able to do that since Linda left--and we were 
very sorry to see her go. And in fact, when we had an employee 
advisory committee meeting back--I can't remember the exact 
dates here, maybe March or February--she was a part of that. 
And I was trying to express to her that we were interested in 
keeping ADR in D.C. if all these other employees did not end up 
going to Detroit and didn't accept the reassignment.
    There was apparently--and again, I can't speak for others 
and why they did things or didn't do things, but all I know is 
there was not an approach there that she seemed to be 
interested in staying. And that is unfortunate. But we did make 
that clear that we would be very willing to work with the 
employees and to do something in D.C. because of the change of 
circumstances when the employees did not take the 
reassignment--or if they did not.
    Senator Akaka. Mr. Chairman, I have one last question. Mr. 
Bloch, it has been alleged that under your direction the 
Complaint Examining Unit has dumped an increasing number of 
cases into the Investigation and Prosecution Divisions, IPDs, 
without giving adequate review of the complaints. As a result, 
the backlog in the IPDs has doubled, especially since the cases 
referred for investigation require significantly more time and 
attention than those being considered in CEU because CEU 
employees cannot discuss the cases with the complainants.
    My question is, how many cases are in the IPDs and how are 
you going to fully investigate them, especially now that seven 
experienced career staff are no longer at OSC?
    Mr. Bloch. Senator, it would be a real surprise to my 
employees in the CEU that they don't discuss cases with 
employees. I was just sitting in one's office about 3 days ago 
and they said, I was on the phone with an employee for an hour 
today. And I was congratulating her on her years of experience 
and ability to interact with employees and how important that 
is. And they were asking when are we going to get the new 
customer service unit to take some of that burden off them, and 
we were coming up with solutions there.
    They interact with employees. There's been no dumping 
whatsoever. There was no effort to simply transfer one backlog 
to another. The backlog refers to cases that are over-aged. It 
doesn't refer to number of cases. If we got a million cases in 
tomorrow in OSC, they wouldn't be in backlog because they're 
not old. They're moving through the Agency. Now, if you can't 
move the million and they get bottlenecked, that's a problem. 
That becomes a backlog over time, when they become over-aged. 
We do not have that problem with the cases we recently have 
referred to the IPDs.
    However, there is what we called, after we finished our 
backlog reduction process last year, there is--what we 
discovered was what I call a ``silent backlog'' in the IPD, 
which is cases that are over a year to 2 to 3 and sometimes 4 
and 5 years old that have never been filed with MSPB, and some 
of them have been just sitting essentially in corners in a pile 
without any action taken on them, some of which had already 
been slated for 16-day closure letters, but just no action had 
been taken. And so we're really stepping up our efforts to make 
sure that doesn't occur anymore and that we don't have this so-
called ``silent backlog'' in the IPDs that I inherited.
    But we don't have another problem in terms of the cases 
that we referred, and we certainly don't engage in any dumping. 
And that's just an absolute fact.
    Senator Akaka. Thank you very much for your responses.
    Senator Voinovich. Thank you, Mr. Bloch, we really 
appreciate your being here and your candor in answering our 
questions. Without objection, I would like to submit in the 
record the May 17, 2005, letter from Tom Davis and John Porter 
to Mr. Bloch commending his efforts to improve OSC's service to 
whistleblowers. To my understanding, that is--was it their 
staffs that were in your shop going over things?
    Mr. Bloch. Theirs and others. Congressman Waxman and some 
others, yes.
    Senator Voinovich. Then a May 18, 2005, Government 
Executive article on OSC. And the May 11, 2004, Stars & Stripes 
article on OSC's involvement in the whistleblower case dealing 
with defective welding on the USS Kitty Hawk. And the April 29, 
2005, Federal Times article, ``OSC's Involvement in 
Reemployment of Reservists.'' \1\
---------------------------------------------------------------------------
    \1\ The letter and articles appear in the Appendix on page 210, and 
75 through 94, respectively.
---------------------------------------------------------------------------
    We will leave the record open for Senators if they want to 
submit anything for the record, and then we will give people a 
chance, if they have some differences of opinion on the record, 
to submit their statement so that we have a complete statement 
here for this Subcommittee in regard to your responsibilities 
there at the OSC.
    Mr. Bloch. Thank you, Mr. Chairman.
    Senator Voinovich. Thank you very much for coming.
    [Whereupon, at 11:48 a.m., the Subcommittee was adjourned.]


                            A P P E N D I X

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