[Senate Hearing 109-414]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-414

 
                  NOMINATIONS OF: KEITH E. GOTTFRIED,
                     KIM KENDRICK, KEITH A. NELSON,
                DARLENE F. WILLIAMS, FRANKLIN L. LAVIN,
                ISRAEL HERNANDEZ, DARRYL W. JACKSON, AND
                           DAVID H. McCORMICK

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

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION
                                   ON

                            nominations of:

       keith e. gottfried, of california, to be general counsel,
            u.s. department of housing and urban development

                               __________

               kim kendrick, of the district of columbia,
   to be assistant secretary for fair housing and equal opportunity,
            u.s. department of housing and urban development

                               __________

        keith a. nelson, of texas, to be assistant secretary for
    administration, u.s. department of housing and urban development

                               __________

                     darlene f. williams, of texas,
     to be assistant secretary for policy development and research
            u.s. department of housing and urban development

                               __________

         franklin l. lavin, of ohio, to be under secretary for
            international trade, u.s. department of commerce

                               __________

       israel hernandez, of texas, to be assistant secretary for
          trade promotion and director general of the u.s. and
        foreign commercial service, u.s. department of commerce

                               __________

    darryl w. jackson, of the district of columbia, to be assistant
      secretary of export enforcement, u.s. department of commerce

                               __________

     david h. mccormick, of pennsylvania, to be under secretary for
           export administration, u.s. department of commerce

                               __________

                           SEPTEMBER 15, 2005

                               __________

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                                Affairs

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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman

ROBERT F. BENNETT, Utah              PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado               CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming             TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska                JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania          CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky                EVAN BAYH, Indiana
MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
JOHN E. SUNUNU, New Hampshire        DEBBIE STABENOW, Michigan
ELIZABETH DOLE, North Carolina       ROBERT MENENDEZ, New Jersey
MEL MARTINEZ, Florida

             Kathleen L. Casey, Staff Director and Counsel

     Steven B. Harris, Democratic Staff Director and Chief Counsel

           Mark A. Calabria, Senior Professional Staff Member

                Skip Fischer, Senior Staff Professional

               John O'Hara, Senior Investigative Counsel

Tewana Wilkerson, Republican Staff Director, Housing and Transportation 
                              Subcommittee

             Jonathan Miller, Democratic Professional Staff

               Jennifer Fogel-Bublick, Democratic Counsel

           Sarah L. Garrett, Democratic Legislative Assistant

                   Stephen R. Kroll, Special Counsel

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)


                            C O N T E N T S

                              ----------                              

                      THURSDAY, SEPTEMBER 15, 2005

                                                                   Page

Opening statement of Senator Enzi................................     2

Opening statements, comments, or prepared statements of:
    Senator Santorum.............................................     3
    Senator Dewine...............................................     4
    Senator Reed.................................................     5
    Senator Sarbanes.............................................     8

                                NOMINEES

Keith E. Gottfried, of California, to be General Counsel, U.S. 
  Department of Housing and Urban Development....................     5
    Prepared statement...........................................    26
    Biographical sketch of nominee...............................    33
Kim Kendrick, of the District of Columbia, to be Assistant 
  Secretary for Fair Housing and Equal Opportunity, U.S. 
  Department of Housing and Urban Development....................     9
    Prepared statement...........................................    28
    Biographical sketch of nominee...............................    46
    Response to written questions of:
        Senator Santorum.........................................   102
        Senator Reed.............................................   104
        Senator Crapo............................................   107
Keith A. Nelson, of Texas, to be Assistant Secretary for 
  Administration, U.S. Department of Housing and Urban 
  Development....................................................    11
    Biographical sketch of nominee...............................    61
Darlene F. Williams, of Texas, to be Assistant Secretary for 
  Policy and Development and Research, U.S. Department of Housing 
  and Urban Development..........................................    12
    Biographical sketch of nominee...............................    70
    Response to written questions of Senator Reed................   108
Franklin L. Lavin, of Ohio, to be Under Secretary for 
  International Trade, U.S. Department of Commerce...............    18
    Prepared statement...........................................    30
    Biographical sketch of nominee...............................    77
    Response to written questions of:
        Senator Sarbanes.........................................   111
        Senator Shelby...........................................   113
        Senator Dole.............................................   115
Israel Hernandez, of Texas, to be Assistant Secretary for Trade 
  Promotion and Director General of the U.S. and Foreign 
  Commercial Service, U.S. Department of Commerce................    19
    Prepared statement...........................................    31
    Biographical sketch of nominee...............................    85
Darryl W. Jackson, of the District of Columbia, to be Assistant 
  Secretary for Export Enforcement, U.S. Department of Commerce..    20
    Biographical sketch of nominee...............................    89
    Response to written questions of Senator Shelby..............   118
David H. McCormick, of Pennsylvania, to be Under Secretary for 
  Industry and Security, U.S. Department of Commerce.............    21
    Biographical sketch of nominee...............................    96
    Response to written questions of Senator Shelby..............   119
                            NOMINATIONS OF:

                   KEITH E. GOTTFRIED, OF CALIFORNIA,

                         TO BE GENERAL COUNSEL,

               KIM KENDRICK, OF THE DISTRICT OF COLUMBIA,

                     TO BE ASSISTANT SECRETARY FOR

                  FAIR HOUSING AND EQUAL OPPORTUNITY,

                       KEITH A. NELSON, OF TEXAS,

             TO BE ASSISTANT SECRETARY FOR ADMINISTRATION,

                     DARLENE F. WILLIAMS, OF TEXAS,

                     TO BE ASSISTANT SECRETARY FOR

                    POLICY DEVELOPMENT AND RESEARCH,

           U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;

                      FRANKLIN L. LAVIN, OF OHIO,

                       TO BE UNDER SECRETARY FOR

                          INTERNATIONAL TRADE,

                      ISRAEL HERNANDEZ, OF TEXAS,

             TO BE ASSISTANT SECRETARY FOR TRADE PROMOTION

                        AND DIRECTOR GENERAL OF

                THE U.S. AND FOREIGN COMMERCIAL SERVICE,

            DARRYL W. JACKSON, OF THE DISTRICT OF COLUMBIA,

                     TO BE ASSISTANT SECRETARY FOR

                        EXPORT ENFORCEMENT, AND

                  DAVID H. McCORMICK, OF PENNSYLVANIA,

                       TO BE UNDER SECRETARY FOR

                         INDUSTRY AND SECURITY,

                      U.S. DEPARTMENT OF COMMERCE

                              ----------                              


                      THURSDAY, SEPTEMBER 15, 2005

                                       U.S. Senate,
           Committee on Banking, Housing and Urban Affairs,
                                                    Washington, DC.

    The committee met at 10:03 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Michael B. Enzi presiding.

          OPENING STATEMENT OF SENATOR MICHAEL B. ENZI

    Senator Enzi. This hearing will come to order.
    Today, the Committee will hold hearings on the first panel, 
nominations of Keith Gottfried, to be the General Counsel at 
the U.S. Department of Housing and Urban Development, Kim 
Kendrick to be Assistant Secretary of Housing and Urban 
Development for Fair Housing and Equal Opportunity, Keith 
Nelson to be Assistant Secretary for Administration, Department 
of Housing and Urban Development, and Darlene Williams to be 
Assistant Secretary for Policy Development and Research, also 
at the Department of Housing and Urban Development.
    The second panel will be comprised of nominees for the 
Department of Commerce. Before we begin, I would like the 
witnesses to rise, raise their hands so that I may administer 
the oath.
    [Witnesses sworn.]
    Senator Enzi. I would like to thank all the nominees who 
are going to come before the Committee today. Over the course 
of the last few months, my staff and I have had the pleasure of 
meeting with many of you. I am impressed with your credentials 
and I am confident that you have earned the honor of these 
nominations. As we move forward with your nomination process, I 
will be particularly interested in those nominees who will be 
dealing with export administration and enforcement with the 
Department of Commerce.
    As many of you know, I have been working to reauthorize the 
Export Administration Act for over 7 years now. During that 
time, my staff and I have worked diligently with all parties to 
craft legislation that would correct some of the shortcomings 
in the current temporary regulation. In some ways, we have been 
successful. I believe that we have educated some Members about 
the importance of creating a strong export control system. We 
have built consensus around some areas of reform.
    Unfortunately, we have not been successful in passing 
meaningful reform in the form of reauthorization of the Export 
Administration Act. The Department of Commerce plays a critical 
role in all of this. So far, the Department has streamlined 
some of the licensing process and relieved some of the burden 
of the technology companies by doing business overseas. I 
applaud them on their efforts.
    However, they need statutory authority to make substantive 
improvements to law enforcement and control mechanisms. 
Congress should be committed to granting that authority. The 
Federal Government has limited resources to deal with control 
of dual-use exports developed within the United States. Molding 
export controls that focus our priorities on those products and 
nations that may threaten our national security is good policy. 
Not only will it make controls more effective, but it also will 
strengthen our ability to craft multilateral controls that 
truly keep our dual use technology out of the wrong hands.
    It is very difficult for the United States to tell our 
international partners to stop selling goods and technology to 
bad actors, but we do not have a statute in place to control 
our own sales. I will continue to emphasize the importance of 
reauthorizing the Export Administration Act to my colleagues, 
this Committee, and elsewhere.
    I look forward to the Department of Commerce's continued 
role in this debate and trust they will continue to make 
progress to get that done. I look forward to the testimony of 
all the witnesses, and Senator Santorum.

           OPENING STATEMENT OF SENATOR RICK SANTORUM

    Senator Santorum. Thank you, Mr. Chairman. I appreciate it.
    I am pleased to introduce to the Committee three of the 
eight witnesses that are scheduled to testify here this 
morning. One in the first panel, Kim Kendrick, is a 
Pittsburgher, and two on the other panel. So if you will allow 
me to introducing all three of them, Mr. Chairman, even though 
only one of them is actually before you. Ms. Kendrick is 
someone who I have not had the opportunity to meet however, my 
staff, having talked to her recently, is very impressed with 
her personally and the tremendous wealth of experience that she 
will bring to the position of Assistant Secretary of Housing 
and Urban Development for Fair Housing and Equal Opportunity.
    She has tremendous experience in both her educational 
background as well as the work that she has done in the area of 
housing. She has a law degree from the University of 
Pittsburgh, as does my wife, and so, I will put in a good plug 
for that. She went on to work for Neighborhood Legal Services 
in Pittsburgh. She later served with the Department of Housing 
and Urban Development in several positions, in the Office of 
the General Counsel.
    She left HUD to go to the D.C. Housing Authority, where she 
served 7 years as General Counsel and in other positions at a 
time when the DC Housing Authority was placed in receivership 
and needed some strong leadership, and she was there to provide 
that. And after that, she spent 2 years working at Covenant 
House in Washington, DC, which as you know, Mr. Chairman, is 
one of the real outstanding philanthropic agencies not just in 
Washington but in many other cities, including Philadelphia, 
where they provide for housing services to troubled youth.
    And she returned to HUD early in 2004, and she serves as 
Senior Counsel to the Secretary. So she has a wealth of 
experience both inside of Government and outside of Government 
and will do, I believe, an outstanding job for the Department 
in this regard. I know she is joined here today with her 
parents and her sisters, and I want to welcome her and her 
family to the Senate.
    Two other individuals will be on your next panel, Mr. 
Chairman. One is David McCormick, whom I have gotten to know in 
his role as a community and business leader in Pittsburgh. He 
is a graduate of West Point, served as an Army Ranger and in 
the 82nd Airborne. And he earned his doctorate from Princeton 
University. He is Chief Executive Officer of Arriva, which is a 
successor company to a company started in Pittsburgh called 
Free Markets, and they are a major and important employer in 
our city and a high technology company, and he has a tremendous 
amount of skills in the area of technology. And for him to be 
nominated as Under Secretary of Commerce for Export 
Administration, you mentioned the concerns that you have there; 
he is a top flight business person, a top flight technologist, 
and someone who I think will be just a tremendous addition to 
this Administration. So, I want to introduce him to you, and I 
know his family is here also. And I want to thank you, Dave, 
for offering your services. As you can see, he is a young man 
and has a lot of enthusiasm to bring to the position.
    And finally, Darryl Jackson, who is from Philadelphia; he 
is to be nominated as Assistant Secretary of Commerce for 
Export Enforcement; another person, like so many in 
Pennsylvania with great experience and background to lend to 
our country. He is experienced in the practice of law. He got 
his law degree from Harvard University, and--Howard University, 
excuse me; I would have said do not hold that against him, but 
Howard, it is a great university, in 1977.
    [Laughter.]
    I did not mean to contrast that.
    He began his legal career in the Legal Defender Association 
of Philadelphia, where he worked for 3 years. He worked as a 
prosecutor in the Office of the U.S. Attorney here in the 
District of Columbia for 12 years. He became the Executive 
Assistant to the U.S. Attorney for Operations, where he was 
responsible for overseeing legal operations and implementing 
prosecutorial policy.
    Since 1992, he has been a partner at Arnold and Porter, 
where he worked as a civil litigator and a white collar 
criminal defense attorney. He has taught and lectured at George 
Washington National Law Center and Catholic University of 
America's Columbus School of Law. He is someone, again, who 
brings a wealth of experience to this position, and I know that 
he will serve his country well.
    Senator Enzi. Thank you very much. And I should mention 
that the reason that Senator Shelby is not chairing this 
meeting at the moment is that he is chairing the debate on 
Commerce, Justice, State appropriations over on the floor of 
the Senate, and that is not optional, either. So, I am filling 
in for him. And we have Senator DeWine with us, who is going to 
make an introduction from the second panel so that he can 
return to the Judiciary Committee, where we are trying to get 
the Chief Justice of the Supreme Court finished on 
confirmation.
    Senator DeWine.

                    STATEMENT OF MIKE DeWINE

             A U.S. SENATOR FROM THE STATE OF OHIO

    Senator DeWine. Mr. Chairman, thank you for taking me out 
of order, and thank you for this opportunity to introduce my 
fellow Ohioan, Ambassador Frank Lavin of Canton, Ohio, an 
Ambassador whom President Bush has nominated to be the Under 
Secretary of Commerce for International Trade.
    Frank's background is quite impressive, including several 
advanced degrees related to international relations and 
economics from Georgetown, Johns Hopkins, and Wharton. 
Professionally, Frank has distinguished himself through over 
two decades of work in Asian affairs in both government and the 
private sector. I have known Frank for over two decades, dating 
back to when I was in the House of Representatives, and he was 
in the Reagan Administration. He worked in the Reagan 
Administration at the National Security Council as Deputy 
Executive Secretary. He went on to serve the White House in the 
Office of Political Affairs.
    Frank was previously nominated and served as the Deputy 
Assistant Secretary of Commerce for Asia and the Pacific, where 
he was responsible for commercial policy, assisting companies 
with market access, and trade negotiations for the region. He 
continued his connection with the region during the late 1990's 
as a banker and venture capitalist in Hong Kong and Singapore.
    It was therefore no surprise when President Bush nominated 
Frank to be Ambassador to Singapore, given his professional 
experience within the region. And as Ambassador, Frank Lavin 
helped oversee the successful negotiation and enactment of the 
United States-Singapore Free Trade Agreement. I believe, Mr. 
Chairman, Members of the Committee, it is important that we 
have someone in this position who knows business, knows our 
trade rights and responsibilities, knows our trade partners, 
and knows how to open markets to U.S. goods.
    It is particularly important to have someone like 
Ambassador Lavin, who has a thorough understanding of the 
countries in the Far East, which seems to be at the center of 
so many of our trade discussions today here in the Congress.
    Frank has a ground floor view of the region, both from his 
days in the private sector and from his years spent in 
Government service. Adding to his professional accomplishments, 
I would like to mention that the Ambassador is also a 
lieutenant commander in the U.S. Naval Reserves and is raising 
three wonderful children with his wife Ann. I wish them all the 
best during this confirmation process.
    Mr. Chairman, I thank you again for taking me out of order 
and allowing me to move ahead here. Thank you.
    Senator Enzi. Thank you very much. Mr. Lavin, thank you.
    Senator Reed, did you want to make any comments?

                 COMMENTS OF SENATOR JACK REED

    Senator Reed. Mr. Chairman, I think we can proceed to the 
witness statements and questions. It would be fine. I just want 
to welcome today's nominees.
    Senator Enzi. Thank you. We will begin with the statements, 
then.
    Mr. Gottfried.

        STATEMENT OF KEITH E. GOTTFRIED, OF CALIFORNIA,

                     TO BE GENERAL COUNSEL,

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Gottfried. Thank you, Mr. Chairman and good morning.
    I would like to thank Senator Shelby, Senator Sarbanes, and 
distinguished Members of the Committee for giving me the great 
privilege and honor to appear before this Committee today as it 
considers my nomination to be General Counsel of the U.S. 
Department of Housing and Urban Development. I know this is a 
particularly busy time for the Committee, for the Senate, and 
accordingly, I am especially grateful to this Committee for 
expediting the confirmation process for myself and for the 
other nominees present today.
    I would also like to express my deep gratitude to President 
Bush and Secretary Jackson for the trust and confidence they 
have placed in me in putting forward my nomination for this 
very important position. I am honored by their willingness to 
entrust me with a leadership position on issues that are of 
great importance to our Nation and that are of great interest 
to me personally. As Secretary Jackson continues to lead HUD in 
strengthening our Nation's communities, promoting affordable 
housing, expanding homeownership opportunities for all 
Americans, particularly low- and moderate-income families, 
vigorously enforcing the fair housing laws, and of course, 
providing housing and other desperately needed relief to the 
victims of Hurricane Katrina, if confirmed, it would be for me 
the honor of a lifetime to serve as his General Counsel.
    Mr. Chairman, with your indulgence, I would like to 
introduce some family members. I would like to introduce my 
wife, Cindy. It is due to her love and support and with the 
grace of God that I am before you today, and it will be with 
her love and support and with the grace of God that I will be 
able to carry out, if confirmed, the important responsibilities 
that are before me. I thank her for being my closest adviser 
and my best friend.
    I would also like to introduce my mother Rosalie Gottfried, 
from whom I have learned many things, including the benefits 
that attach to homeownership and being a vested member of a 
community and who has sacrificed so much so that I could have 
the opportunity to pursue my personalized version of the 
American Dream.
    Mr. Chairman, I have been very blessed in my life. The most 
recent example of that being that my wife and I are expecting 
the birth of our first child in March. And as we anxiously 
anticipate the day that we become parents, my wife and I find 
ourselves very attentive, becoming more attentive to how to 
ensure that our children have access to the same opportunities 
that we had, including, of course, access to affordable 
housing.
    I cannot begin to articulate how honored and humbled I am 
to appear before this Committee. I come from a very modest 
upbringing. I could never imagine growing up in Queens, New 
York, in my neighborhood, that one day, I would be nominated by 
the President of the United States of America to serve the 
American people in this very important leadership position. I 
feel very strongly that to those who much is given, much is 
expected, and that as a member of a compassionate society, I 
have a duty to give something back to the Nation that has given 
me so much.
    The opportunity to serve as General Counsel of HUD would be 
a particularly fitting opportunity for me to give something 
back to this great Nation that has given me so much, not only 
because of my background as a lawyer, as a seasoned legal 
executive in the private sector, but also because of a deep 
personal connection I share with HUD's mission.
    In 1967, one year after the cornerstone was laid for the 
building that would become HUD's headquarters, the building now 
known as the Robert C. Weaver Federal Building, named after the 
first Secretary of the Department of Housing and Urban 
Development, my parents purchased their first home in Queens, 
New York, using a modest downpayment and a 30-year, fixed-rate 
mortgage.
    When their marriage dissolved some years later, my mother 
was extremely determined that we were not going to leave that 
home. She was not going to part with that home. We were not 
going to move to a much smaller rental apartment. My mother, 
the daughter of immigrants, had grown up in the Brighton Beach 
section of Brooklyn, New York, and she had shared with her 
parents and her three siblings a one-bedroom apartment. She 
knew all too well that that was not the environment that she 
wanted for her children.
    As a school teacher employed by the New York City Board of 
Education, she just retired, almost 40 years, my mother 
struggled for many years to be able to continue to make the 
monthly mortgage payments and to remain a member of the 
ownership society. Like President Bush and Secretary Jackson 
today, my mother recognized the value and benefits of 
homeownership. She believed, and I know continues to believe, 
the contribution that homeownership makes to a family's stable 
living environment.
    I learned from my mother many things, and I learned from 
her the benefits of being a part of a closely knit community 
where your neighbors feel like family and where homeownership 
translates into greater concern for your neighbors. Almost 40 
years after purchasing her home, my mother remains deeply 
active and deeply committed to her community.
    Mr. Chairman, if confirmed, I would embrace the 
responsibilities and the duties of the Office of General 
Counsel with an abundance of enthusiasm, vigor, and dedication. 
Over the past few weeks, I have had the opportunity to get to 
know some of the staff members of the Office of General 
Counsel, and to date, I have been extremely impressed with the 
caliber and dedication of all the people that I have had the 
privilege of meeting, in particular, because HUD has been 
without a General Counsel since May 2004. I would like to 
recognize, acknowledge, and thank Kathleen Koch, who has served 
as acting General Counsel since that time.
    If confirmed, I will commit myself to assisting Secretary 
Jackson in his ongoing efforts to make HUD a more effective, 
efficient, and responsive institution, one that will operate in 
accordance with the highest ethical and professional standards 
both for its employees and for its program participants. I am 
also committed to assisting Secretary Jackson in his ongoing 
efforts to create a culture that inspires confidence in HUD's 
programs on Capitol Hill and with all our program participants 
and beneficiaries.
    Mr. Chairman, Members of the Committee, the Office of 
General Counsel at HUD is a great honor, a great 
responsibility, and a tremendous challenge. If confirmed, I 
look forward to working in a bipartisan manner with the 
Committee, other Members of Congress, as we together work to 
meet the challenges before us. As has been noted before this 
Committee in a number of hearings, the mission at HUD, the 
mission to provide affordable housing to all Americans, is not 
a Democratic mission; it is not a Republican mission; it is an 
American mission for all Americans.
    At this time, Mr. Chairman, I stand ready to answer any 
questions or address any comments that you or any other Members 
of the Committee may have. I thank the Members of the Committee 
for the honor and the opportunity to appear before you today.
    Senator Enzi. Thank you for your testimony.
    We have been joined by the Ranking Member of the Committee. 
Senator Sarbanes, do you have a statement that you would like 
to make?

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. Thank you very much, Mr. Chairman, I 
appreciate that, because regrettably, I am not going to be able 
to stay this morning because of a number of conflicting 
engagements, but I do have an opening statement.
    First of all, I want to thank you very much for presiding 
over the hearing. I think we need to get people in these jobs. 
These are important positions, both at HUD and at Commerce, and 
I am going to comment in a moment about how long some of them 
have been vacant. I want to congratulate all the nominees both 
at HUD and the Department of Commerce.
    I hold public service in high esteem, and I appreciate the 
willingness of the nominees to serve the Nation. We have four 
important HUD positions; of course, HUD plays a crucial role in 
many communities across our country. Millions of people live in 
HUD-assisted housing. Millions more receive HUD-subsidized 
mortgages through the FHA program. About 220,000 people lived 
in FHA-insured single family homes that have been affected by 
Hurricane Katrina. Another 90,000 lived in FHA-insured 
apartments, and nearly 150,000 receive Section 8 vouchers or 
were living in public housing in those areas, so obviously, the 
reach of HUD into these communities is quite extensive. The 
Senate actually adopted, yesterday, an amendment I proposed to 
give authority to HUD to issue temporary Section 8 vouchers to 
get people housed.
    HUD contributes to the vitality of communities through the 
Community Development Block Grant program. It increases 
homeownership through FHA but also through the HOME program. 
The American Dream Down Payment Assistance Initiative helps 
low-income families afford decent housing. It also seeks to 
ensure that all Americans have equal access to affordable 
housing opportunities. I want to underscore that, without 
regard to race or gender, and it does all this in close 
partnership with State and local governments.
    Obviously, to meet these responsibilities, it needs top 
quality staff and top quality leadership, and have been 
concerned about these vacancies in key positions. There has not 
been a confirmed General Counsel at HUD since May 2004, almost 
18 months. The position of Assistant Secretary for 
Administration has been open since February of this year. So, I 
look forward to reviewing the witnesses' statements and their 
papers and looking over the hearing records in the hopes that 
we can expedite the process of getting these important 
positions filled.
    Let me say a word about the second panel which the Chairman 
will bring before us involving the Department of Commerce. I 
have had the opportunity to meet with a number of these 
nominees. They have critical responsibilities for promoting 
American exports, assuring our businesses compete on a level 
playing field, increasing American competitiveness while 
protecting our defense industrial base.
    These are particularly challenging times. We have a trade 
deficit with China which may exceed $200 billion. The total 
current deficit is more than $700 billion, so we face a very 
difficult situation. We are seeing some effort to undermine the 
impact of U.S. antidumping and countervailing duty rules. These 
are all issues the nominees will have to confront.
    This Committee has had a good working relationship with the 
predecessors of the people going into these Commerce jobs. 
Senator Enzi has taken a strong leadership role with respect to 
the issue of export controls and promotions. I have been 
pleased to work with him in that effort.
    The former Under Secretary, Grant Aldonas, took a lead in 
the Trade Promotion Coordinating Committee Initiative. I hope 
that it will not lose its momentum. The one stop shops 
authorized in the 1992 Export Enhancement Act must continue to 
be used effectively. Mr. Chairman, I want to underscore the 
importance of the hearing, and I hope that we get these people 
in position.
    Let me, as I close, I want to pay a note of tribute to 
Timothy Hauser, who had a tragic death this summer. Mr. Hauser 
was a career civil servant who had served as Deputy Under 
Secretary for International Trade since 1991. He was a mainstay 
of our trade programs and of the Department of Commerce. I 
think his career was a model one. It exemplified the 
commitment, the knowledge, the expertise, and the dedication of 
literally thousands and thousands of career civil servants, and 
I want to take this opportunity to acknowledge his 
extraordinary contributions over the course of his career.
    Thank you very much.
    Senator Enzi. Thank you very much, and yes, we did have 
some interesting times together on the Export Administration 
Act Reauthorization and got it through the Senate 84 to 14, and 
then, September 11 happened, and everybody's focus changed, and 
we were not able to finish it.
    Senator Sarbanes. Right.
    Senator Enzi. So we will continue on that.
    Ms. Kendrick.

                   STATEMENT OF KIM KENDRICK

                  OF THE DISTRICT OF COLUMBIA,

               TO BE ASSISTANT SECRETARY FOR FAIR

                 HOUSING AND EQUAL OPPORTUNITY,

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Ms. Kendrick. Good morning, Senator.
    I want to thank Chairman Shelby, Ranking Member Sarbanes, 
and distinguished Members of this Committee. I appreciate your 
consideration today, especially in light of the important 
issues that face this Nation that require your valuable time.
    I would first like to thank President Bush for nominating 
me to serve as HUD's Assistant Secretary for Fair Housing and 
Equal Opportunity. I am also profoundly grateful to Secretary 
Alphonso Jackson for his strong support of my nomination and 
his encouragement during this nomination process.
    Before I go any further, I want to recognize some people 
who have been an important part of my life and who are with me 
today. First, I must acknowledge the most important sources of 
encouragement and support in my life, my parents, Louis and 
Gloria Kendrick.
    Senator Enzi. Welcome.
    Ms. Kendrick. After I was notified that President Bush 
nominated me for this position, I immediately called my parents 
to relay the good news. My father's first response was are you 
not glad that you have great parents?
    [Laughter.]
    As a matter of fact, I am. I can honestly say without their 
guidance, sacrifice, and love, I would not be sitting here 
before you today, and I want to publicly thank them for all 
that they have done for me.
    Also with me today are my two sisters, Toni and Jerri 
Kendrick, my nephew of 15 years, Louis Washington, who got to 
get out of school today.
    [Laughter.]
    My cousin, Sabrina Cobb, and my godchild, whom I think you 
have heard, Olivia Albury, who celebrated her first birthday 
just 2 weeks ago.
    I am blessed to have a number of great friends who came to 
lend support and encouragement today. I have colleagues with me 
today from HUD and former colleagues from both the District of 
Columbia Housing Authority and Covenant House Washington. Here 
also are friends that I have known and met through Leadership 
Washington, friends from the Greater Washington Area Chapter of 
the Women Lawyers Division of the National Bar Association, 
members of my sorority, Alpha Kappa Alpha, and a friend from 
college. I want to thank each of them for taking time out of 
their schedules to support me.
    I will not spend a lot of time telling you about my 
professional journey. You have heard Senator Santorum talk 
about that. As you already know, I have worked for over 20 
years as a lawyer and that most of my legal career has been 
involved with matters associated with housing, starting as an 
attorney with Neighborhood Legal Services in Pittsburgh, 
Pennsylvania, and currently serving as legal counsel to a 
member of the President's Cabinet who is responsible for 
housing for the entire Nation.
    I do, however, want to share with you a bit about my 
personal background. I grew up in the Hill District, a number 
in Pittsburgh, Pennsylvania. At that time, it was the most 
economically depressed part of the city. However, our home life 
was rich, so rich that I had no idea other people considered us 
low income.
    One of the reasons I never felt deprived was because my 
family always had a house that we could call our own. My 
parents created a home atmosphere where my sisters and I were 
safe and free, free to become the successful women that we are 
today. I am particularly proud of my sisters. My sister Toni is 
a principal in an inner city school in Pittsburgh. Jerri is a 
graduate of Carnegie Mellon University, and she is one of a few 
African-American female program managers for Lockheed Martin. 
While the successes in our lives may not solely be related to 
the fact that our parents were and are homeowners, it did not 
hurt.
    The one thing that my career in housing has made very clear 
to me is that having a home is a critical step to achieving 
economic equality in this country. The Rev. Dr. Martin Luther 
King was assassinated on April 4, 1968, and the Fair Housing 
Act was enacted on April 11 of that same year.
    The significance of the two events cannot be ignored. His 
death brought to the forefront of this country the severe 
inequities in its social fabric. Dr. King often spoke about the 
inequities in the housing opportunities between whites and the 
minorities in this country. Unfortunately, Dr. King did not 
live to see the Fair Housing Act signed into law or see how 
fair housing in this country has led to a record number of 
minority homeowners.
    However, I do know that there is more to be done. As 
reported in the media yesterday, minorities are twice as likely 
as whites to get higher priced mortgages, and we must 
understand these disparities and work to eliminate them. Also, 
I am quite aware of the number of Americans who were displaced 
from their homes by Hurricane Katrina, and I know there is work 
to be done to get those families back into their homes.
    As the President's nominee for Assistant Secretary for Fair 
Housing and Equal Opportunity, I have been given an opportunity 
few people before me have been given; that is, to ensure equal 
access to housing for all Americans. If I am confirmed, I 
promise to diligently and enthusiastically carry out the duties 
for which I have been nominated, because I cannot think of a 
greater honor than to serve this Administration as the chief 
enforcer of the Nation's fair housing laws.
    As a little girl growing up in Pittsburgh, I could never 
imagine I would one day be sitting in a confirmation hearing 
before the U.S. Senate. This kind of personal journey is only 
possible in the United States, and it makes me immensely proud 
to be an American.
    Again, I thank you for your time, and I welcome any 
questions that you may have of me.
    Senator Enzi. Thank you very much.
    Mr. Nelson.

            STATEMENT OF KEITH A. NELSON, OF TEXAS,

          TO BE ASSISTANT SECRETARY FOR ADMINISTRATION

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Nelson. Thank you very much.
    I would like to thank Chairman Shelby, Ranking Member 
Sarbanes, and distinguished Members of the Committee for 
holding this hearing today. It is a privilege to appear before 
you as the President's nominee to serve as Assistant Secretary 
for Administration at the U.S. Department of Housing and Urban 
Development. I am honored that President Bush has nominated me 
to serve in this position, and that this Committee is taking 
the time to consider my nomination.
    I also want to take a moment to introduce some of my 
family. Especially, I am very proud to introduce my wife, Julia 
Gomez Nelson, and also my mother, who came from Texas. Her name 
is Pamela Hudson Nelson, and she is missing part of her meeting 
today as Vice Chairman of the U.S. Commission of Fine Arts, and 
also my in-laws who traveled from Florida, Guillermo and Olema 
Gomez, who are here with us today, and I am very excited and 
thankful that they are here.
    Commitment to public service is a proud tradition in my 
family, and I have been honored to continue that tradition over 
the last 3-plus years at the U.S. Department of Labor. Since 
2001, I have worked in management and administration at the 
Labor Department, most recently serving as Associate Deputy 
Secretary for Management. In this capacity, I have been 
involved in human resource matters, information technology, 
budget formulation, financial management, and general 
operations. One of our proudest accomplishments at the 
Department of Labor came recently, when the Office of 
Management and Budget recognized the Labor Department as the 
best-managed in the Executive Branch.
    Among Labor's most significant achievements was the 
collective bargaining agreement we reached earlier this year 
with Local 12 of the American Federation of Government 
Employees, which represents most of the Department's employees 
in the Washington, DC area. This agreement, the first since 
1992, was the culmination of more than 3 years of mediation and 
negotiation.
    The Department of Labor also successfully migrated its 
payroll system to the National Finance Center. This is part of 
a governmentwide effort to shift certain services that are not 
mission-specific to certain designated government service 
providers. This was a significant endeavor, one that required 
our office to coordinate the efforts of our Chief Financial 
Officer, the human resources staff, and regional employees in 
order to prepare the Department's 17,000 employees for a new 
payroll system.
    In a more broad sense, my service at the Labor Department 
has allowed me to gain a clear understanding of the urgency of 
succession planning in the Federal Government. And through the 
extensive briefings and interviews that have characterized the 
confirmation process, I have come to appreciate how acute and 
serious this issue is for the Department of Housing and Urban 
Development.
    In addition to succession planning, HUD has also performed 
an assessment revealing various ``skill gaps'' between current 
personnel and those required to execute the mission most 
effectively. If confirmed, I hope to have the opportunity to 
provide the Department with the training and recruitment 
necessary to bridge those gaps. Through these and other areas 
of focus, I will keep lines of communication open with 
stakeholders to ensure that all interested parties receive a 
fair hearing.
    In conclusion, I am committed to the responsibilities and 
challenges that come with this position. Under the leadership 
of Secretary Jackson and Deputy Secretary Bernardi, I am 
confident that HUD will continue its progress to becoming a 
more efficient and effective operation in fulfilling its vital 
public mission.
    I want to thank you again for scheduling this hearing 
during what I know is a very busy time for the Senate. I am 
ready for any questions you may have.
    Senator Enzi. Thank you very much.
    Ms. Williams.

          STATEMENT OF DARLENE F. WILLIAMS, OF TEXAS,

                 TO BE ASSISTANT SECRETARY FOR

                POLICY DEVELOPMENT AND RESEARCH

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Ms. Williams. Thank you.
    I want to thank Chairman Shelby, Ranking Member Sarbanes, 
and Members of the Committee for convening this hearing during 
what I know is a busy legislative session. It is a privilege to 
be here with you today. I would like to express my appreciation 
to President Bush for the honor of being nominated as Assistant 
Secretary for the Office of Policy Development and Research. I 
am also grateful for your consideration today, so that I may 
continue my services to HUD and to Secretary Alphonso Jackson.
    Before I say a few words about my nomination, I would like 
to acknowledge and thank a very special person in my life, my 
mother, Ms. Julie Bernice Walker. Without her, this would not 
have been possible. Through her sacrifices, she paved this road 
and provided me with a bridge that has allowed me to experience 
incredible educational and career opportunities. I would also 
like to acknowledge in their absence, a sincere sacrifice on 
their part, my father, Mr. Francis Harold Williams, Sr.; my 
stepfather, Mr. Nathan Walker; my dear friend, Mr. Herbert 
Moore, Jr.; and of course, my two brothers, Harold, Jr., and 
Rodger, along with the many men and women throughout my 
corporate and Federal careers who are shining examples of 
excellence.
    The Office of Policy Development and Research, or PD&R, is 
a principal adviser to the Secretary providing support in 
policy development, applied social science and economic 
research on housing policy and issues, including, for example, 
advances in housing technology and evaluation and monitoring of 
the Department's programs. In fact, one of the very important 
responsibilities of PD&R is to conduct evaluations of 
Departmental programs to make sure they are operating 
effectively as Congress intended. If confirmed, I will work to 
ensure that this mission continues with professionalism and 
integrity.
    As for my personal background, on June 2, 2003, I joined 
HUD as the General Deputy Assistant Secretary for PD&R. As 
such, I have served as the general manager for the office 
during interim periods when the office was without an Assistant 
Secretary.
    One example of a critical initiative we undertook at PD&R 
was the establishment of HUD's research plan for each fiscal 
year. The role of the Assistant Secretary for PD&R is to 
establish an approved HUD research plan through the 
collaborative input of PD&R staff and HUD leadership. Under my 
leadership, PD&R developed a plan addressing research and 
survey activities early in the fiscal year, which ensured that 
staff could begin implementing the research plan once the 
appropriations were known. The research plan was important to 
PD&R because it established the work assignments for the fiscal 
year for staff and permitted implementation of an often lengthy 
and rigorous process.
    Prior to entering Federal service, I gained expertise in 
operations, marketing research, and corporate policy at the 
following corporations: Pacific Bell, now known as SBC; Eastman 
Kodak; Ryder Systems, Incorporated; and TXU, formerly known as 
Texas Utilities. I believe that my earlier experiences in PD&R 
along with these professional experiences in corporate America 
helped me to be an effective leader. I would be personally 
honored to have the opportunity to join the men and women of 
PD&R, who are among the best and brightest of the HUD 
workforce.
    Let me conclude by saying that I have a deep appreciation 
for Congress as an institution. I look forward to working with 
this Committee in an open and collaborative spirit to advance 
the goals of affordable housing, homeownership, and strong 
communities.
    Thank you for your kind attention, and I will be happy to 
answer any questions you may have. Senator, I respectfully 
request that my testimony be added to the record.
    Senator Enzi. Thank you very much. The complete testimony 
of everyone will be a part of the record, and there will be 
statements entered by people who have not been able to be here 
this morning. There will probably be some written questions 
that will be addressed from those who were not here and even 
some of those who are here, because time does place some 
constraints on us, and we will encourage you all to give as 
prompt an answer as possible, because I want to congratulate 
you on your nomination, and we want to make that a 
confirmation. So we will work with all speed to get that done.
    I want to welcome all the families and friends of the 
nominees. It is nice that there is that kind of support there, 
and I know that that is where each of you got some direction 
for your life, as was often mentioned.
    I used to be the Mayor of a boom town. It tripled in size 
while I was the Mayor. And the one thing that I noticed was 
that when a person got homeownership, their perspective 
changed. They suddenly become considerably more interested in 
the community, because they felt they had ownership not just in 
their house but in their community, and it is the American 
Dream. And you all are in charge of getting that dream to as 
many people as possible in the best way possible, and so, I 
challenge you with that.
    I do have a few questions that I want to ask, and I will 
begin in the same order that we spoke. Mr. Gottfried, I believe 
your experience as corporate counsel does provide a useful 
background for serving as HUD's General Counsel. However, I 
believe there are some substantial differences. Could you offer 
for the Committee what you see as some of those differences in 
responsibilities and duties of an agency general counsel in 
contrast to that of serving as a corporate general counsel?
    Mr. Gottfried. Thank you, Senator. There are many 
differences between serving as a general counsel of a publicly 
traded company and serving as general counsel of a Federal 
Cabinet Department. There are also many similarities. One of my 
goals as General Counsel of Borland Software Corporation was to 
have a zero tolerance policy with respect to ethics compliance.
    It was extremely important, particularly in light of the 
Sarbanes-Oxley Act of 2002, that we comply over and above what 
was required of us under that statute. Similarly, at an agency 
like HUD, an agency that grants significant amounts of money 
and has numerous program participants and beneficiaries, it is 
incredibly important that at HUD that we be an example of 
ethics and of compliance at the highest levels and that there 
be zero tolerance.
    At Borland Software, I managed tremendous amounts of 
litigation, and I can say with a lot of pride that 
substantially all the litigation that I inherited, and it was 
well into the tens of millions of dollars in paid liability if 
not higher when I became general counsel in 2000, by the time I 
left, all that litigation was resolved.
    HUD also has significant litigation where it is a 
defendant. Currently, there are approximately 510 cases where 
HUD is a defendant. That will be one of my priorities. One of 
my priorities will be helping to resolve that litigation. For 
every dollar that we have to pay out in litigation costs, that 
is a dollar that is not going to go to help people gain access 
to affordable housing or in increasing access to homeownership.
    Now, a great difference, of course, is that when I was at 
Borland Software in the private sector, and I wanted to settle 
a case, I would go talk to my CEO and my board, and it was 
fairly easy to do that. Obviously, in a Federal Cabinet 
Department, as General Counsel, it is not just the Secretary 
and I and possibly the Deputy Secretary making that decision. I 
have a very important co-counsel or lead counsel in the 
Department of Justice, and I will have to consult and work 
collaboratively with them.
    In my corporate law background, when I was a lawyer at 
Skadden Arps, I had to work with lawyers all the time and lots 
and lots of lawyers on the other side of the table or three 
different sides of the table, so that is nothing new for me. 
And I look forward to building a collaborative relationship 
with the people at the Department of Justice and other agencies 
and obviously the Solicitor General from time to time.
    Senator Enzi. Thank you.
    Ms. Kendrick, I understand that you have been Secretary 
Jackson's primary advisor on RESPA. As you know, the Committee 
has a variety of concerns regarding the RESPA rule as 
previously proposed. If confirmed, is the Secretary's intention 
for you to remain as his primary counsel on RESPA, and could 
you share with the Committee what is the current status of 
HUD's RESPA efforts?
    Ms. Kendrick. The Secretary has not made a decision, 
Senator, on whether I should remain as his chief advisor on 
RESPA. I will leave that to him after the confirmation process. 
But what we are doing on RESPA today is, as you may know, we 
held seven roundtables to discuss the RESPA issue this summer. 
We had four in Washington, DC, one in Chicago, one in Los 
Angeles, and one in Fort Worth.
    We wanted to get a sense around the country of what the 
industry and consumers were thinking about RESPA, what they are 
interested in, what they do not want, what they do want, and is 
RESPA viable? Is it viable to do a RESPA rule this year? And 
so, this year, we are still in that thought process. There is 
no rule in a drawer. We have not made a decision about whether 
there will be a RESPA rule, and before we even think about 
whether we are going to do a rule, we will come back and see 
the Senate; we will talk to the House Members, we will talk to 
everyone, sir.
    Senator Enzi. Thank you, and I hope he does rely on you. I 
am sure you have a great deal of expertise on that and can 
continue that.
    Mr. Nelson, the GAO has testified before this Committee 
that HUD's financial management systems cannot currently 
provide the day-to-day information needed by its managers to 
effectively manage and monitor the Department's programs. I 
believe it is critical that HUD have reliable financial and 
accounting systems. Do you share this concern with respect to 
the critical importance of reliable financial and accounting 
systems, and do you have any thoughts for addressing those 
deficiencies?
    Mr. Nelson. Thank you for your question, Senator.
    That GAO report is certainly one that we are very 
interested in trying to close those recommendations one-by-one. 
In fact, there is a very useful report that I have seen that we 
keep track of on a monthly basis of all the GAO reports and 
Inspector General reports that we are needing to deal with and 
close down these recommendations.
    Certainly, financial management is an important point of 
any department and agency, and if you do not get the data 
right, and you do not have the numbers right, it is very 
difficult to operate efficiently and effectively. So that is a 
key concern, and if confirmed, I will work very hard along with 
the CFO to establish better measures for that.
    Senator Enzi. Thank you.
    Ms. Williams, HUD over the last decade or so has been 
increasingly reliant on outside contractors to perform many of 
its responsibilities. I know that is not an issue solely in the 
research area, but it does seem that most of the research 
produced by HUD is conducted by outside parties. I am concerned 
about HUD's ability to effectively monitor those contractors. 
Could you detail for the Committee your relevant experience in 
monitoring and evaluating contract performance?
    Ms. Williams. Thank you, Senator.
    The Office of Policy Development and Research is comprised 
of professionals with backgrounds in social science along with 
engineering, architecture, and many of the skills that are 
necessary not only programmatically for the Office to determine 
the types of research that need to be conducted but also for 
further monitoring and evaluation. Additionally, many of the 
members, the 156 individuals have been involved in other 
program offices prior to joining the Office of Policy 
Development and Research, so we are going to continue to use 
the talent that we have.
    We are also putting into place a succession plan to ensure 
that we continue to have great HUD content. As you have 
indicated, we have relied significantly on outside contractors, 
but that does not mean that the individuals within the program 
areas as well as within the Office of Policy Development and 
Research are not quite often extensively involved in the 
contracting arena.
    Senator Enzi. Thank you.
    Mr. Gottfried, you mentioned in your testimony your 
experience practicing before the SEC and your understanding of 
how regulatory agencies work. I believe it is vital for an 
agency general counsel to have a strong knowledge and 
appreciation of administrative procedures, particularly 
rulemaking. Could you offer the Committee a little more detail 
about your interaction with Federal agencies and your knowledge 
of administrative procedures?
    Mr. Gottfried. Yes, as a lawyer in New York, most of my 
career has been as a mergers and acquisitions and public 
company lawyer with substantial expertise in securities laws 
and in negotiating with the Securities and Exchange Commission 
to get large, billion dollar transactions completed. I have not 
done a lot of work with administrative procedures, like the 
Administrative Procedure Act. Most of my compliance work was in 
complying with securities laws and the numerous regulations of 
the Securities and Exchange Commission.
    Senator Enzi. Thank you.
    Ms. Kendrick, I believe your past experience working at a 
public housing authority will prove invaluable to HUD. I also 
find it interesting that part of your responsibilities were 
defending the D.C. Housing Authority against fair housing 
complaints. Could you share with the Committee any reflections 
you gained from, as you state in your testimony, being on both 
sides of the issue, and do you believe a greater focus on 
public housing authorities should be a greater priority for 
HUD?
    Ms. Kendrick. Thank you, sir.
    The appreciation I received from my experience is that 
everyone is entitled to a decent, safe, sanitary unit that can 
be accommodated for a disability. I think it is very important 
that persons with disabilities have decent housing, they have 
available housing, and that public housing authorities and 
private landlords should make that effort to make sure that 
those accommodations are met, especially in the public arena, 
where public housing authorities and other people who receive 
public dollars, they should be required to make their units 
adaptable for persons with disabilities.
    And I gained a strong appreciation, because if you have 
ever seen people who are in wheelchairs who cannot find 
housing, people who have children who are in multiple 
wheelchairs who do not have housing, it is very sobering, and 
it must be incumbent upon public housing authorities to make 
sure those units are available, because they are receiving 
public dollars for housing people.
    Senator Enzi. Thank you.
    Mr. Nelson, earlier, I asked Ms. Williams about contractors 
performing their responsibilities and the ability to 
effectively monitor those contractors. Could you comment on 
that issue as well?
    Mr. Nelson. Certainly. Thank you, Senator.
    Contracting is more important than ever now in the Federal 
Government with more and more contractors doing work that is 
really not mission specific to Federal agencies, and so, 
writing and executing good contracts is paramount. Where we 
can, if confirmed, I will try to really build on performance-
based contracting, where if vendors do jobs faster and better, 
they will get rewarded, and if they do it slower, they will be 
penalized. And those types of contracts are going to move the 
Government forward in this arena.
    Senator Enzi. Thank you.
    And Ms. Williams, you get kind of the key question of the 
issue of the day, which is Katrina. One of the things I have 
noticed in areas hit by hurricanes and flooding is that some 
homes stand up better than others. Generally, it is the newer, 
better ones that survive, and one of the programs administered 
under PD&R is the Partnership for Advancing Technologies in 
Housing Initiative, known as PATH. Now, this program is 
intended to encourage the development of innovative buildings 
and technologies.
    Could you share with the Committee any thoughts you have on 
whether increasing research into this area may result in the 
development of technologies which advance the capabilities of 
homes to withstand wind and flood damage?
    Ms. Williams. Yes, sir; thank you, Senator.
    The Partnership for Advancing Technologies in Housing, as 
you have indicated, has been very involved with Katrina and 
even last season, when we had the terrible devastation in 
Florida and the other areas in the United States.
    And although this has been a terrible devastation, I am 
pleased to share with you that PATH and the Office of Policy 
Development and Research have already contributed somewhat by 
noting where there are sites available for temporary housing in 
the region and also by already focusing, as you have indicated, 
on available resources and information, alternative housing, 
building technologies such as modular, and flood-proof housing.
    Yes, I do believe that more research in this area would be 
a very positive element for HUD, and we are already doing great 
work in that area, so we will continue.
    Senator Enzi. Thank you very much.
    I want to thank this panel for their testimony and their 
answers to the questions but most of all for your enthusiasm 
for what you are about to undertake. That goes a long way in 
making sure that the jobs get done more than adequately, and I 
am convinced that we will have an outstanding team at HUD with 
this group of people. So do your best, do what is right. Thank 
you very much.
    And a vote is imminent, so rather than interrupt the next 
panel, I will recess so I can run over and come right back so 
we can do the next panel, hopefully without interruption. That 
is usually not the way things work out around here, however, so 
we will recess.
    [Recess.]
    Senator Enzi. We will go ahead and reconvene the hearing. I 
appreciate all of your patience. We will begin with the second 
panel. It is Mr. Franklin Lavin, the Under Secretary of 
Commerce for International Trade designee, U.S. Department of 
Commerce; Mr. Israel Hernandez, the Assistant Secretary of 
Commerce and Director General of the U.S. Foreign and 
Commercial Service designate, U.S. Department of Commerce; Mr. 
Darryl W. Jackson, the Assistant Secretary of Commerce 
designate for the U.S. Department of Commerce; and Mr. David H. 
McCormick, the Under Secretary of Commerce for Export 
Administration of the U.S. Department of Commerce.
    I thank all of you for being here today. I will ask if you 
can condense your remarks so that we can hopefully finish this 
before the next set of votes.
    Senator Enzi. So without further ado, Mr. Lavin.

            STATEMENT OF FRANKLIN L. LAVIN, OF OHIO,

         TO BE UNDER SECRETARY FOR INTERNATIONAL TRADE

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Lavin. Thank you, Mr. Chairman and to the other Members 
of the Committee. I am very grateful for the opportunity to----
    Senator Enzi. Excuse me; I am sorry. Could you please rise 
so I can swear you in?
    [Witnesses sworn.]
    Thank you. Be seated, and I apologize for interrupting.
    Mr. Lavin. I am grateful to appear here today, and I also 
want to thank Senator DeWine for his very gracious 
introduction, and I am proud that he represents my home State.
    My wife and three children cannot be here today, separated 
as we are by the oceans and the miles, but they are certainly 
here in spirit, and I am honored that my in-laws are here 
today, retired Congressman George Whartley and his wife, 
Barbara are able to join us. Thank you for your presence.
    Senator Enzi. Welcome.
    Mr. Lavin. I would also like to recognize my fellow 
Commerce nominees here on the panel, and if confirmed, I look 
forward to working with them. Taking your guidance, Mr. 
Chairman, I would like to submit written testimony for the 
record, but maybe I can offer just a brief comment in summary.
    It has been a privilege for me to serve the President and 
the American people, Mr. Chairman, as the U.S. Ambassador to 
Singapore. I am very honored that the President and Secretary 
Gutierrez have asked me to serve as Under Secretary of Commerce 
for International Trade.
    If confirmed, I will be guided by three principles: First, 
I firmly believe that there are tremendous export opportunities 
for U.S. companies, large and small. We produce world class 
goods and services, and we can win in the global marketplace. 
The second principle is that we must use all the tools at our 
disposal to ensure that American businesses face fair 
competition. We must enforce the rules; we must hold our 
trading partners accountable to the agreements that they have 
signed. Third, cooperation between the Legislative Branch and 
ITA is essential for a constructive international trade policy. 
I look forward to working with the Senate on the vital issues 
that we face.
    The men and women of the International Trade Administration 
are a talented and dedicated group. Their mission is vital to 
the economic security of the Nation, and if confirmed, I would 
be honored to join them. Thank you for your time.
    I would be happy to answer any questions the Committee may 
have.
    Senator Enzi. Thank you, and thank you for your brevity.
    Mr. Hernandez.

            STATEMENT OF ISRAEL HERNANDEZ, OF TEXAS,

         TO BE ASSISTANT SECRETARY FOR TRADE PROMOTION

                    AND DIRECTOR GENERAL OF

            THE U.S. AND FOREIGN COMMERCIAL SERVICE,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Hernandez. Mr. Chairman, good morning. Thank you for 
granting me this hearing today. I will also condense my 
remarks, and I will submit one for the public record.
    Senator Enzi. Yes, your full statements, for all of you, 
will be in the record.
    Mr. Hernandez. Great.
    I am also privileged to be here alongside with Ambassador 
Frank Lavin and others who will be within the Department of 
Commerce, if confirmed. If confirmed, I pledge to define and 
lead the U.S. Foreign and Commercial Service based on a clear 
and strategic mission to ensure that small and medium-sized 
companies gain greater access to international markets.
    I will ensure that the team of specialists within the 
service have the tools necessary to anticipate commercial 
interests of our American exporters and rapidly adapt to the 
ground to meet their needs. Organizations are only as good as 
their people, and I will work to foster a diverse environment 
where women and men of the Commercial Service continue to grow 
in discipline and expertise.
    I will also be a disciplined and accountable steward of the 
people's money, and I will commit to a thorough assessment of 
our resources to ensure that the Service not only meets but 
also exceeds the highest expectations, and I will work to build 
on the essential relationships with the Federal and State 
level.
    Thank you for your time, and I will be happy to take any 
questions following our comments.
    Senator Enzi. Thank you. Excellent job.
    Mr. Jackson.

                 STATEMENT OF DARRYL W. JACKSON

                  OF THE DISTRICT OF COLUMBIA,

        TO BE ASSISTANT SECRETARY OF EXPORT ENFORCEMENT,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Jackson. Mr. Chairman, thank you, and my thanks to 
Senator Santorum for his wonderful introduction this morning.
    I am honored to be here today as the President's nominee 
for the position of Assistant Secretary of Commerce for Export 
Enforcement. The President has my deepest gratitude for the 
trust and confidence he has reposed in me, and I would also 
like to thank Secretary Gutierrez, with whom I look forward to 
serving.
    Several days ago, as you know, we marked the fourth year 
since the tragic events of September 11, 2001, occurred. In his 
Patriot Day 2005 proclamation, President Bush stated that, 
``The mission that began on September 11 continues.'' The 
President went on to discuss the military's continuing role in 
keeping us safe at home, and also noted that, ``Thousands of 
other Americans, from intelligence analysts to border guards to 
countless others, are doing vital work to help defend America 
and prevent future attacks.''
    Those who work at the Bureau of Industry and Security's 
Export Enforcement Division play an important role in that 
critical task. They vigorously enforce the export regulations 
concerning dual-use goods and technology, as well as the 
antiboycott laws. Their goal is to keep the most sensitive 
dual-use goods out of the most dangerous hands. As a top 
priority, they pursue violations that involve weapons of mass 
destruction proliferation, terrorists and terrorist support, 
and unauthorized military use. That approach is consistent with 
views that the President expressed in his 2003 remarks 
concerning Libya's pledge to dismantle its weapons of mass 
destruction programs. Therein, the President said that, 
``Opposing proliferation is one of the highest priorities of 
the war on terror'' because the danger is, ``dramatically 
increase when regimes build or acquire weapons of mass 
destruction and maintain ties to terrorist groups.''
    In carrying out their mission, those who work in Export 
Enforcement protect our national security, while also advancing 
the foreign policy and economic interests of the United States. 
If confirmed, I look forward to joining them in their mission. 
Meeting these challenges is of the utmost importance for our 
generation. That we do so is also of great importance to 
younger generations, which look to us for their protection. I 
will bring to the position the full range of my experience, 
which includes more than a decade as a Federal prosecutor and 
more than a decade as a litigation partner in a private 
corporate law firm.
    As I close, I would like to remember my departed parents, 
Woodrow and Elizabeth Jackson, who would be very pleased today, 
and without whose unwavering devotion and support I would not 
be here. I would also like to thank my wife, Amy, who is here 
today, as well as our two sons, David and Matthew, for their 
continuing support.
    I would like to conclude by thanking the Committee for its 
prompt consideration of my nomination. If confirmed, I look 
forward to working with you and your staff. I would be happy to 
answer any questions that you have.
    Thank you.
    Senator Enzi. Thank you very much. Mr. McCormick.

       STATEMENT OF DAVID H. McCORMICK, OF PENNSYLVANIA,

        TO BE UNDER SECRETARY FOR EXPORT ADMINISTRATION

                  U.S. DEPARTMENT OF COMMERCE

    Mr. McCormick. Thank you, Mr. Chairman.
    It is a great honor for me to be here today as the 
President's nominee for the position of Under Secretary of 
Commerce for Export Administration. I thank the President and 
Secretary Gutierrez for their confidence and trust. I would 
also like to thank my wife, Amy Richardson, and our three young 
children for their ongoing support and dedication and good 
behavior up until this point.
    As its name suggests, the Commerce Department's Bureau of 
Industry and Security, which I would lead as Under Secretary, 
operates at the intersection of issues involving industry and 
national security. The Bureau's primary mission is 
administering and enforcing U.S. dual-use export controls, but 
its responsibilities go far beyond that. Across a wide range of 
activities from ensuring U.S. industry compliance with 
international arms control treaties to monitoring the health 
for our own defense industrial base, from implementing the 
Defense Priorities Allocation System to spearheading ongoing 
high technology cooperation talks with India, the Bureau's 
central objective remains the same: Establishing a strong 
foundation of security upon which U.S. exports can grow and 
U.S. industry prosper.
    As the former CEO of a global technology company, I 
understand very personally the challenges U.S. companies face 
in maintaining competitiveness and negotiating their way 
through an ever-changing regulatory environment. I recognize, 
too, that both U.S. prosperity and security in the longer-run 
depend on Government's ability to minimize the burdens it 
places on industry, creating an economic climate where 
businesses can prosper.
    At the same time, as a former soldier and concerned 
American, I also fully appreciate the critical importance of 
protecting the country's security by ensuring that our 
sensitive technologies do not fall into the wrong hands. Our 
national nightmare on September 11 made all too clear that 
these sensitive technologies in the hands of our adversaries, 
or even potential adversaries, abroad pose a devastating and 
unacceptable threat to us at home.
    If confirmed, I am committed to pursuing policies that 
advance these complementary objectives, enhanced security and 
expanded trade. Indeed, in today's rapidly changing, 
technology-driven environment, one cannot be achieved without 
the other. I am devoted also to bringing focused leadership and 
management to the Bureau of Industry and Security and acting as 
a conscientious steward of the valuable taxpayer resources that 
would be entrusted to this office.
    I would like to conclude my remarks by thanking the 
Committee for its prompt consideration of my nomination and 
reiterating my commitment to work closely with you. I am happy 
to answer any questions you may have at this time.
    Thank you.
    Senator Enzi. Thank you very much, and I do want to express 
my deep appreciation for the brevity of your statements. Your 
full statement will be a part of the record, and that gives us 
a chance to hopefully ask a few questions before we get 
interrupted by a vote again. Sometimes, those votes seem like a 
huge nuisance, but apparently, it is our most important job, so 
we have to leave for those.
    I will begin with Mr. Lavin. One important Commerce 
Department function involves joint export trade, whereby U.S. 
exporters can cooperatively access foreign markets that might 
be out of reach to them individually, and joint export trade is 
facilitated by antitrust safe harbors, including the Webb-
Pomerine Act and the Export Trading Company Act, which is 
administered by Commerce. Export associations using these 
provisions account for many billions of dollars worth of export 
trade annually, supporting good jobs across a wide range of 
manufacturing and foreign service sectors in the national 
economy.
    So amazingly, at a time when the U.S. trade deficit is a 
subject of huge public concern, and we need all the export 
successes we can possibly muster, a blue ribbon panel of 
antitrust scholars, the Antitrust Modernization Commission, has 
decided to study whether these successful export trade measures 
should be repealed.
    I am aware that the Under Secretary for International 
Trade, Grant Aldonas, wrote to the Antitrust Modernization 
Commission in March affirming Commerce's support for joint 
export trade and for the current statutory work. I would like 
for you to share your views on that to see how similar or 
dissimilar they might be.
    Mr. Lavin. Thank you very much, Mr. Chairman.
    I very much support the position held by my predecessor 
that the establishment of the Joint Export Trade Mechanism 
gives our exports flexibility to work together in the 
international arena that allows them to compete more 
effectively. To the extent that the antitrust concerns are 
valid, I think that we should remind ourselves that it is an 
issue which would apply in the domestic U.S. market, but when 
we are looking at a more competitive international market, the 
ability of particularly the small and medium-sized enterprises 
to work together is something we should find ways to facilitate 
and not impede.
    Senator Enzi. Thank you.
    Mr. Hernandez, if confirmed, you will be the lead office 
for trade promotion for the Federal Government, a mission near 
and dear to the heart of this Committee, of course. Do you 
believe that the current structure of the Federal Government 
for trade promotion is appropriate? Are there areas for 
improvement? To the extent there are areas where the structure 
and the process could be improved, could you provide the 
Committee with some sense of how you would go about that?
    Mr. Hernandez. Yes, sir.
    Mr. Chairman, I think that there are mechanisms in place at 
this point to make sure that those agencies that work on trade 
are united, and that is through the Trade Promotion 
Coordinating Committee, which is led by the Department of 
Commerce and in many ways affords us the opportunity to 
leverage our resources so that we have seamless assistance to 
companies that need assistance overseas.
    There are units within SBA, within Ex-Im Bank, within the 
Departments of Agriculture, Commerce, and State, and we work 
together to help, in many ways, companies do better business 
abroad. So, I think there is a mechanism for us to help 
companies, for those who do trade, as far as finding better 
ways. I think I will be actively engaged in working with these 
agencies to figure out how we can find better opportunities for 
businesses to do commerce overseas.
    Senator Enzi. Thank you.
    Mr. Jackson, a Department of Commerce Inspector General 
report stated the Bureau of Industry and Security's level of 
cooperation with other Federal agencies, including the U.S. 
Attorney's office, the Department of Homeland Security, the 
FBI, and other agencies was deficient. It has also noted that 
cooperation with the intelligence community is similarly 
lacking. Can you assure the Committee that you are prepared to 
work closely with other agencies of the Federal Government, 
including law enforcement agencies, in the best interests of 
the national security of the United States? And any suggestions 
you have for ways that it can be done?
    Mr. Jackson. Thank you, Senator, for that question. It is a 
very important one, and I am certainly fully prepared to work 
broadly with other law enforcement agencies as well as the 
intelligence community in my current role.
    I had the experience of doing so both as a line prosecutor 
in the U.S. Attorney's office here, where I worked cases that 
involved task forces from various agencies, Federal and local, 
and also had that responsibility at a higher level when I was 
the Executive Assistant U.S. Attorney for Operations, the 
number three position, and coordinated our law enforcement 
efforts at a higher policy level. So I know the importance of 
coordination and the impact that it can bring to a law 
enforcement position, and I certainly look forward to that 
aspect of the job.
    Senator Enzi. Thank you.
    Mr. McCormick, the Department of Commerce has made 
significant progress on regulations that help streamline the 
licensing process for technology and other goods, but there is 
still work to do, and I know the Department needs the statutory 
authority to improve law enforcement procedures and collect 
increased penalties.
    This year, at a meeting of the President's Export Council, 
Commerce Secretary Gutierrez and Acting Under Secretary Peter 
Lichtenbaum both shared my interest in getting an EAA bill 
done. I am committed to getting the job done. Could you please 
explain the current efforts of the Department in streamlining 
the licensing process for technology and what you need from the 
Congress in the near future to help you get the job done?
    Mr. McCormick. Thank you, Senator, and thank you for your 
leadership on this issue, and thank you to Senator Shelby and 
others for their leadership on this issue as well.
    I would say first that you are right: There has been real 
progress made in terms of streamlining the licensing process. 
If you look at the 2004 data, which I suspect you are familiar 
with, the amount of licenses that have been processed with 
roughly the same resources have increased by about 25 percent, 
while the cycle time has gone down by about 20 percent.
    So there has definitely been a focus on productivity. With 
that said, there is much more to be done, and one critical 
component of that would be a renewal of an EAA that has broad 
support and broad consensus. And that would put, clearly, the 
Bureau of Industry and Security in a position to more 
forcefully and effectively execute its mission of managing, 
overseeing, and enforcing the export of dual-use items.
    Senator Enzi. Thank you.
    The Department of Commerce is working by the interagency 
process on a number of proposed rules in relation to the export 
controls, and because this is the Committee of jurisdiction for 
those rules, we hope to continue to be consulted on the 
Agency's process and look forward to working with you on that.
    Mr. Lavin, you authored a very insightful article in 
Foreign Affairs in 1994 that described the Chinese approach to 
international negotiations and how that approach differs from 
that of the United States. You have since served as U.S. 
Ambassador to Singapore, from which vantage point you have been 
able to observe United States-China negotiations for the past 
several years. Can you offer the Committee some insight on 
whether the disparities in negotiating strategies have been 
adequately addressed by the United States? What recommendations 
would you make to improve the United States posture in 
bilateral negotiations with China?
    Mr. Lavin. Thank you, Mr. Chairman.
    As you know, we were able to successfully conclude a United 
States-Singapore Free Trade Agreement about 18 months ago, and 
that provided a very interesting contrast to some of my work 
both in government and in banking in China. Singapore is a much 
more advanced society economically, comes from a British 
colonial tradition and uses British corporate law. It is a much 
more rules-based society and has a firm philosophical 
commitment to open trade.
    China, again, all those criteria I think suffers from the 
fact that they did not have a strong inherited legal tradition. 
It is a much less advanced country economically, although they 
have seen rapid economic progress. Even though they have moved 
away from a Marxist economic orientation, there can still be a 
bureaucratic hangover in that regard in many sectors, which is 
to say there is lack of a broad consensus on trade 
liberalization, although it does tend to dominate.
    So, I found trade negotiation with China far more 
incremental, far more adversarial, and far more protracted. It 
took an enormous amount of time to gain consensus on a 
particular point, and it took an enormous amount of time, then, 
to get to implementation and enforcement with a point, and I 
think some of what we see in dealing with China is this is what 
we have when we are dealing with a less advanced economy that 
does not come from an open market tradition.
    I think my first word of advice would be we have to apply 
resources accordingly. We are simply not going to make the kind 
of progress in China that we might make with other, more 
advanced economies, and we have to devote significantly greater 
resources to try to move ahead. And I think we have to realize 
the time horizon in building a consensus and trying to move 
toward an agreement is just going to be longer than it is in 
market-oriented economies.
    Senator Enzi. Thank you. I have been reading The World is 
Flat by Friedman.
    Mr. Lavin. Yes, sir.
    Senator Enzi. Hoping kids across the Nation will read that 
book. It scares the heck out of me.
    Mr. Lavin. It is very well done. It is a new era.
    Senator Enzi. It should increase a lot of interest in 
science, technology, and commerce and the way it is going to be 
in the global economy.
    So, I appreciate the answers from all of you, and I look 
forward to your confirmation and working with you. The record, 
of course, will remain open subject to call of the Chair with 
the approval of the Ranking Member so that additional questions 
can be submitted for your answers in writing if anyone from the 
Committee desires it. So, I thank everyone for their 
participation today. This hearing is adjourned.
    [Whereupon, at 11:43 a.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of nominees, 
response to written questions, and additional material supplied 
for the record follow:]
                PREPARED STATEMENT OF KEITH E. GOTTFRIED

                       General Counsel-Designate,

            U.S. Department of Housing and Urban Development

                           September 15, 2005

    Chairman Shelby, Senator Sarbanes and distinguished Members 
of the Committee, my name is Keith Gottfried, and I thank you 
for giving me the great privilege and honor to appear before 
this Committee today as it considers my nomination to serve as 
General Counsel of the U.S. Department of Housing and Urban 
Development. I know that this is a particularly busy time for 
the Senate and, accordingly, I am especially grateful to this 
Committee for expediting the confirmation process for myself 
and the other nominees present today.
    I would like to express my deep gratitude to President Bush 
and Secretary Jackson for the trust and confidence they have 
placed in me in putting forward my nomination for this very 
important position. I am honored by their willingness to 
entrust me with a leadership position on issues that are of 
great importance to our Nation and which are of deep interest 
to me personally. As Secretary Jackson continues to lead HUD in 
strengthening our Nation's communities, promoting affordable 
housing, expanding homeownership opportunities for all 
Americans, particularly low- and moderate-income families, 
meeting President Bush's goal of at least 5.5 million new 
minority homeowners before the end of the decade, ending 
chronic homelessness, vigorously enforcing fair housing, civil 
rights, and antidiscrimination laws, and, of course, providing 
housing and other desperately needed relief to the victims of 
Hurricane Katrina, it will be the honor of a lifetime to serve 
as his General Counsel.
    With your indulgence, I would like to introduce my wife 
Cindy. It is due to her love and support, and with the grace of 
God, that I am before you today and it will be with her love 
and support, and with the grace of God, that, should I be 
confirmed, I will be able to carry out the important 
responsibilities that will be before me. I thank her for being 
my closest adviser and my best friend.
    I would also like to introduce my mother Rosalie from whom 
I first learned the benefits that attach to homeownership and 
being a vested member of a community, and who has sacrificed so 
much so that I would have the opportunity to pursue my 
personalized version of the American Dream.
    Mr. Chairman, I have been very blessed in my life, the most 
recent example of that being that my wife and I are expecting 
the birth of our first child in March. As we anxiously 
anticipate the day we become parents, my wife and I find 
ourselves becoming more attentive to how to ensure that our 
children will have access to the same opportunities that we 
had.
    Over the past two decades, I have had wonderful and 
enriching career opportunities to work for a number of 
prestigious organizations, first as an accountant and auditor 
with the Philadelphia office of Arthur Young & Company, one of 
the predecessor firms to Ernst and Young LLP, and then later as 
a lawyer focused on corporate transactions and securities law 
compliance for two excellent law firms, first, following law 
school, at Blank Rome LLP in Philadelphia and then, for most of 
the 1990's, at Skadden, Arps, Slate, Meagher & Flom LLP in New 
York. During my tenure at Skadden Arps, I counseled clients in 
a variety of industries on mergers, acquisitions and other 
corporate transactions aggregating tens of billions of dollars. 
I also counseled clients with respect to corporate governance 
issues, securities law compliance, SEC reporting issues, and 
New York Stock Exchange and Nasdaq compliance. As a function of 
my securities law compliance work, I practiced extensively 
before the Securities and Exchange Commission and developed an 
understanding of, and deep respect for, how regulatory agencies 
work.
    In June 2000, I relocated to Silicon Valley to join Borland 
Software Corporation as its General Counsel and Chief Legal 
Officer. Borland is a publicly traded, Nasdaq-listed software 
development company headquartered in Scotts Valley, California. 
During my tenure as General Counsel of Borland, I significantly 
overhauled almost every aspect of the company's worldwide legal 
function to make it more efficient and responsive to the needs 
of the company and more in tune with the 
company's business objectives as well as to have the company 
serve as a model of state-of-the-art corporate governance and 
disclosure practices. I also was responsible for overseeing the 
company's implementation of the necessary systems and processes 
to comply with the requirements of the Sarbanes-Oxley Act of 
2002, which had recently been enacted. As General Counsel of 
Borland, I strived for the highest levels of transparency and 
accuracy in all of our public disclosures and communications, 
whether they were press releases, analyst conference calls, or 
periodic filings with the SEC. I also strived to create a 
culture that accorded respect for, and adherence to, the 
highest standards of ethical conduct. In addition, as General 
Counsel, though I am not a litigator by training, I achieved an 
impressive track record in managing and resolving complex, 
potentially high-exposure litigation.
    I cannot begin to articulate how honored and humbled I am 
to appear today before this Committee. I come from a very 
modest upbringing and never did I imagine growing up in Queens, 
New York that one day I would be nominated by the President of 
the United States to serve the American people in this 
position.
    I feel very strongly that to those to whom much is given 
much is expected and that, as a member of a compassionate 
society, I have a duty to give something back to the Nation 
that has given me so much. The opportunity to serve as General 
Counsel of HUD would be a particularly fitting opportunity for 
me to give something back to our Nation, not only because of my 
background and experience as a lawyer and as a seasoned legal 
executive in the private sector, but also because of a deep 
personal connection that I share with HUD's mission.
    In 1967, one year after the birth of HUD and one year after 
the cornerstone was laid for HUD's current headquarters, the 
building now known as the Robert C. Weaver Federal Building, my 
parents purchased their first home in Queens, New York using a 
modest downpayment and a 30-year, fixed-rate mortgage. When 
their marriage dissolved some years later, my mother was 
extremely determined to keep our home--notwithstanding much 
advice to the contrary that she should sell it and move the 
family to a much smaller rental apartment. My mother, the 
daughter of immigrants, had grown up in the Brighton Beach 
section of Brooklyn, where she shared a one-bedroom apartment 
with her parents and three siblings, so she knew all too well 
that this was not the environment she wanted for her family. As 
a schoolteacher employed by the New York City Board of 
Education, my mother struggled for many years to keep our home 
and to remain a member of the ``ownership society,'' often 
taking on extra class coverage assignments at her school as 
well as additional work in after-school, weekend, and summer 
school programs, to be able to continue to make the monthly 
mortgage payments.
    Like President Bush and Secretary Jackson today, my mother 
recognized the value and benefits of homeownership. She 
believed, and continues to believe, that homeownership plays an 
immeasurable contribution to a family's stable living 
environment. From the time I was an infant until I left home to 
attend college, I lived in the same home and maintained the 
same group of friends. I also had numerous surrogate parents 
among our neighbors and the parents of my friends, something of 
obvious comfort to a working single parent. Because of my 
mother's strong determination to remain a homeowner, neither my 
sister nor I ever had to switch elementary, middle, or high 
schools. While our home was modest in size, we each had our own 
bedroom. Not sharing a bedroom meant that I had a place to 
retreat to each evening after clearing the dinner table, a 
place where I could focus on my schoolwork in an atmosphere of 
relative quiet and take advantage of the opportunities afforded 
to me by the New York City public school system.
    I learned from my mother first-hand the benefits of being 
part of a closely knit community where your neighbors feel like 
family and where homeownership translates into greater concern 
for your community and the welfare of your neighbors. In 
addition to working as a schoolteacher and her numerous 
ancillary jobs, my mother was an active and concerned member of 
the community, leading a Girl Scouts troop, tutoring 
neighborhood children for little or no compensation, and 
serving as an executive officer of the local chapter of 
CancerCare, a national, nonprofit organization that provides 
free, professional support services to anyone affected by 
cancer.
    My mother's home and community continue to be sources of 
great pride to her. Almost 40 years after purchasing her home, 
my mother remains deeply active in, and committed to, her 
community. Just a few weeks ago, she convinced all the 
neighbors on her block to organize a neighborhood block party 
so that the ``old-timers'' and those who more recently had 
moved onto her block or into the community could get to know 
each other.
    Mr. Chairman, if confirmed, I would embrace the 
responsibilities and duties of the Office of the General 
Counsel with an abundance of enthusiasm, vigor, and dedication. 
Over the past few weeks, through a variety of briefings, I have 
had the opportunity to familiarize myself with some of the 
responsibilities of the Office of General Counsel, the myriad 
of statutes and regulations that apply to the programs that HUD 
administers or has enforcement authority over, and how the 
Office of General Counsel ensures that HUD achieves its mission 
consistent with applicable law and Congressional intent. To 
date, I have been extremely impressed with the caliber and 
dedication of all the staff members in the Office of General 
Counsel that I have had the privilege of meeting. In 
particular, because HUD has been without a General Counsel 
since May 2004, I want to acknowledge and thank Kathleen Koch 
who has served as the Acting General Counsel since that time.
    I am also extremely committed to assisting Secretary 
Jackson in his ongoing efforts to make HUD a more effective, 
efficient, and responsive institution, one that will operate in 
accordance with the highest ethical and professional standards, 
both for its employees and for its program participants. 
Additionally, I am committed to assisting Secretary Jackson in 
his ongoing efforts to create a culture that inspires 
confidence in the integrity of HUD's programs on Capitol Hill 
and with all of our program participants and beneficiaries. I 
am very respectful of the independence of the Government 
Accountability Office and the HUD Inspector General. I also 
appreciate the valuable oversight functions that they perform. 
If confirmed, I will dedicate myself to building on the 
constructive working relationships that have developed during 
the course of the current Administration between the Office of 
the General Counsel and both the GAO and the HUD IG. I would 
also seek to be a catalyst for the development of constructive 
working relationships between the Office of the General Counsel 
and the Members of this Committee, as well as other Members of 
Congress.
    Mr. Chairman and Members of the Committee, the Office of 
General Counsel at HUD is a great honor, a great 
responsibility, and a tremendous challenge. If confirmed, I 
look forward to working in a bipartisan manner with this 
Committee and other Members of Congress as we meet the 
challenges before us. As has been noted a number of times in 
prior hearings of this Committee, the mission at HUD is neither 
a Democratic nor a Republican mission, but rather a mission on 
behalf of all Americans.
    At this time, Mr. Chairman, I stand ready to answer any 
questions or comments that you or the other Members of the 
Committee may have. I thank the Members of the Committee for 
both the honor and the opportunity to appear before them today.

                               ----------

                   PREPARED STATEMENT OF KIM KENDRICK

                     Assistant Secretary-Designate,

            U.S. Department of Housing and Urban Development

                           September 15, 2005

    Chairman Shelby, Ranking Member Sarbanes, and distinguished 
Members of the Committee, I appreciate your consideration 
today, and welcome this opportunity to share my vision for the 
future of the Office of Fair Housing and Equal Opportunity at 
the Department of Housing and Urban Development.
    I would first like to thank President Bush for nominating 
me to serve as an Assistant Secretary at HUD. I also appreciate 
Secretary Jackson's strong support of my nomination and his 
encouragement during this process. This is truly an immense 
honor.
    Before I go any further, I want to recognize some of the 
people who have been important in my life and are here with me 
today.
    First, I must acknowledge the most important sources of 
encouragement and support in my life: My parents Louis and 
Gloria Kendrick and my two sisters, Toni and Jerri, my nephew 
Louis, and one of my three godchildren, Olivia.
    After I heard that the President had nominated me, I 
immediately called my parents to relay the good news. My 
father's first response was, ``Aren't you glad you had great 
parents?'' As a matter of fact, I am. I can honestly say that 
without their guidance, sacrifice, and love, I would not be 
sitting before you today, and I want to publicly thank them for 
all they have done for me.
    I feel blessed to have a number of friends, former 
colleagues, fellow church members, associates from the Greater 
Washington Area Chapter, Women Lawyers Division, National Bar 
Association (GWAC) and members of my sorority, Alpha Kappa 
Alpha, all here supporting me today.
    I grew up in the Hill district of Pittsburgh. And although 
it was the most economically depressed part of the city, my 
home-life was rich--so rich that I had no idea other people 
considered us low income.
    One of the reasons I never felt poor was because my family 
always had a house we could call our own--not an apartment or a 
rented house, but a home with a mortgage in our name. My 
parents created a home atmosphere where my sisters and I felt 
safe and free--free to become the women we are today. My older 
sister, Toni, is an educator. She is a principal in an inner-
city middle school, where every day she has to deal with more 
than just educating her students. Jerri, my younger sister, is 
an engineer. When Jerri graduated from Carnegie Mellon 
University, there were few African-American women in her class 
and in her field of study. Today, she is one of a few African-
American women program managers who work for Lockheed Martin.
    While our successes may not be solely related to the fact 
that our parents were homeowners, it did not hurt. President 
Bush understands the power of homeownership and has worked to 
expand it to new segments of the population. I am proud that 
this Administration has created 2.3 million new minority 
homeowners since June 2002, and will create in excess of 2.2 
million more by 2010.
    I want to tell you a little about my professional history. 
I first began working with HUD in the winter of 1987, when I 
took a job as a trial attorney for the Department. For 8 years, 
I made certain that HUD program offices not only followed the 
Nation's housing laws, but also helped reinforce the housing 
laws through litigation, including the fair housing laws.
    In 1995, I became the General Counsel for the District of 
Columbia Housing Authority. In that position I was responsible 
for defending the Housing Authority against complaints from 
public housing residents and from complaints from HUD. I 
defended the Housing Authority against fair housing complaints 
and accusations. I am grateful to have had the opportunity to 
examine the fair housing question from both sides, and I fully 
understand the responsibilities and challenges associated with 
enforcing the Fair Housing Act.
    I also have experience managing a staff and running a large 
organization. For almost 4 years, I was responsible for 
managing and operating 3,000 units at the Columbia Housing 
Authority. My time at the DC Housing Authority allowed me to 
move beyond the legal field to an area where I could address 
the challenges facing low-income persons searching for housing. 
This experience made very clear to me that having a home is a 
critical step to achieving economic equality.
    The Rev. Dr. Martin Luther King was assassinated on April 
4, 1968, and the Fair Housing Act was enacted on April 11, 
1968. The significance of the two events 
cannot be ignored. His death brought to the forefront of this 
country the severe inequities in its social fabric. Dr. King 
spoke often about the inequities in housing opportunities 
between whites and other minorities.
    Unfortunately, Dr. King did not live to see the enactment 
of the Fair Housing Act or to see how fair housing in this 
country has led to a record number of minority homeowners. As 
the President's nominee for Assistant Secretary for Fair 
Housing and Equal Opportunity, I have been given an opportunity 
few people before me enjoyed: To ensure equal access to housing 
for all Americans.
    HUD's Office of Fair Housing and Equal Opportunity has 
initiated a number of actions in the last several years. For 
example, HUD, under the leadership of Secretary Jackson, 
recently published a study that took a look at how persons with 
disabilities are treated in the housing rental market. The 
results of the study show that people with disabilities 
experience more discrimination when seeking rental housing than 
do racial minorities. This is a problem that demands immediate 
attention and, if I am confirmed, I can promise it will be one 
of my highest priorities.
    I would also take a look at the manner in which HUD's fair 
housing complaint process works. As it stands right now, HUD 
may be unintentionally discouraging some people from filing 
complaints because of overly confusing paperwork and 
procedures. We need a system that is complainant-friendly and 
quick to process violation claims: A system that can work 
without the involvement of lawyers and the 
inevitable delays that can bring. When we accomplish this, we 
will be able to return to the business of improving people's 
lives.
    Last, it is becoming clear that predatory lending is on the 
rise. In order to affect widespread change, we need to move 
beyond prosecution and do a better job educating borrowers and 
lenders about this kind of lending and its consequences. If we 
are successful, we will be able to stop predatory lending 
before it starts.
    If confirmed, I promise to diligently and enthusiastically 
carry out the duties for which I have been nominated, because I 
cannot think of a greater honor than to continue serving this 
Nation.
    As a poor girl growing up in Pittsburgh, I never imagined I 
would one day be sitting in a confirmation hearing before the 
U.S. Senate. This kind of personal journey is only possible in 
the United States, and it makes me immensely proud to be an 
American.
    Again, thank you very much for your time, and I welcome any 
questions you might have.

                PREPARED STATEMENT OF FRANKLIN L. LAVIN

         Under Secretary-Designate, U.S. Department of Commerce

                           September 15, 2005

    Mr. Chairman, Senator Sarbanes, and distinguished Members 
of the Committee, thank you for the opportunity to appear here 
today.
    I want to thank Senator DeWine for his gracious 
introduction. I admire his service, and I am proud that he 
represents my home State.
    I would also like to recognize my fellow Commerce nominees 
here on the panel, and if confirmed, I look forward to working 
with David McCormick, Israel Hernandez, and Darryl Jackson.
    Mr. Chairman, it has been a privilege to serve the 
President and the American people as the U.S. Ambassador to the 
Republic of Singapore. I am honored that President Bush and 
Secretary Gutierrez have asked me to serve as Under Secretary 
of Commerce for International Trade.
    If confirmed, I will be guided by three principles. First, 
U.S. companies can compete internationally. I firmly believe 
that there are tremendous export opportunities for U.S. 
companies, large and small. We produce world-class goods and 
services, and we can win in the global marketplace. The second 
principle is that we must use all of the tools at our disposal 
to ensure that American businesses face fair competition. We 
must enforce the rules. And we must hold our trading partners 
accountable to the agreements they have signed. Third, 
cooperation between the legislative branch and ITA is essential 
for a constructive international trade policy. I look forward 
to working with the Senate on the vital issues we face. Let me 
elaborate on these principles.
    U.S. businesses are capable of competing and winning in the 
global market. Americans are resourceful, innovative, and quite 
nimble at adapting to change. We are living in an era of 
economic transition, but I have no doubt that American 
companies can successfully grapple with this challenge. 
Advances in technology allow even the smallest U.S. firms the 
opportunity to do business outside our borders.
    I have spent a number of years in the public and private 
sectors helping U.S. companies navigate the international 
marketplace. I firmly believe that there are tremendous export 
opportunities for all U.S. companies, large and small. We must 
use all of the tools at our disposal to ensure that American 
businesses face fair competition. We must enforce the rules. 
And we must hold our trading partners accountable to the 
agreements they have signed.
    Government must be a cooperating partner, opening markets 
and enforcing the rules that govern free trade. The Office of 
the U.S. Trade Representative negotiates trade agreements on 
behalf of all Americans. ITA then oversees compliance with, and 
enforcement of, all trade agreements. ITA is involved in every 
step of the implementation process.
    The Senate is uniquely positioned to know first-hand about 
trade problems encountered by constituent companies. You have 
my commitment that ITA will work closely with Congress and 
remain attuned to any concerns about ITA-related matters. If 
confirmed, I will maintain an on-going dialogue with the Senate 
about trade and attendant commercial issues.
    As an example of these principles, I would like to cite the 
Singapore FTA. It committed Singapore to maximum liberalization 
for bilateral trade in goods and services. It included state-
of-the-art commitments in e-commerce, customs cooperation, 
transparency, and the protection of intellectual property 
rights, and it incorporated a constructive model for workforce 
and environmental matters. Since this FTA went into effect in 
2004, U.S. exports have grown at a run-rate of almost 30 
percent.
    In closing, I would like to express my enthusiasm about 
ITA's critical mission. The men and women of ITA are 
professional and dedicated. The mission of ITA is to create 
economic opportunity for American workers and businesses by 
promoting international trade, opening foreign markets, 
ensuring compliance with trade laws and agreements, and 
supporting U.S. commercial interests at home and abroad. The 
men and women of ITA work around the world to support that 
mission. I firmly believe that their work has never been more 
critical to both our economic well-being and our national 
security. If confirmed, I would be honored to lead them in this 
endeavor.
    Thank you for your time. I would be happy to answer any 
questions that the Committee may have.

                 PREPARED STATEMENT OF ISRAEL HERNANDEZ

           Assistant Secretary and Director General-Designate

                      U.S. Department of Commerce

                           September 15, 2005

    Mr. Chairman, Ranking Member Sarbanes, and distinguished 
Members of the Committee, thank you for granting me this 
hearing today. I am humbled and honored to be here as President 
Bush's nominee for the position of Assistant Secretary for 
Trade Promotion and Director General of the United States and 
Foreign Commercial Service. I am also privileged to be here 
alongside Ambassador Frank Lavin with his nomination to be 
Under Secretary of the International Trade Administration, Mr. 
Darryl Jackson to be Assistant Secretary of Commerce, and Mr. 
David McCormick to be Under Secretary of Commerce for Export 
Administration.
    I would also like to thank President Bush and Secretary 
Gutierrez for supporting my nomination and note how proud I 
will be to work under their leadership.
    If confirmed, I look forward to working with each of you to 
ensure America builds on its status as the world's largest 
exporter.
    Although my family was able to attend my hearing before the 
Commerce, Science, and Transportation Committee, they are 
unable to attend today's hearing. Instead, they are supporting 
my sister Veronica who is recovering well from a recent 
surgery. Even so, many friends and loved ones are here today 
and I thank them for their support.
    Before I expand on the importance of trade and market-
oriented economies, I would like to call attention to the 
Department of Commerce's Hurricane Katrina relief efforts. 
Although we are involved in many aspects of this effort, 
Commerce Secretary Gutierrez recently established a nationwide 
Hurricane Relief Call Center (888-4USADOC or 888-487-2362) to 
shepherd all private sector in-kind donations. The Department 
of Commerce will serve as the repository for these 
contributions and help steer each contribution to families and 
businesses in need of our help. Phone lines at the Department 
of Commerce will be staffed by caseworkers from 8 a.m. to 8 
p.m. EDT, 7 days a week. By establishing the Call Center, the 
Department of Commerce has teamed with the White House, 
Department of Homeland Security, and other agencies involved in 
the relief and rebuilding effort.
    In the 21st century, opening our doors to trade is the 
surest way to create opportunity for all Americans. Trade is 
not mere economics. Free and open trade is economic diplomacy, 
which promotes the spread of ideas, friendships, and the habits 
of liberty--and ultimately encourages the spread of democracy, 
economic stability, and stronger partnerships.
    I come before this Committee during a unique and 
transformational moment in history. A time when democracy is 
taking hold around the world and we are experiencing a great 
shift in economies around the world.
    The pursuit of liberty and new opportunities was a 
motivating force in bringing our Founding Fathers to this great 
land, and it is this freedom that has become the foundation for 
the entrepreneurial spirit embedded in the hearts and minds of 
the American people.
    From the first electric light--to the first flight--to 
nanotechnology, the entrepreneurial spirit that exists today 
has created a dynamic and vibrant community of enterprises 
second to none. Government must create an environment where 
entrepreneurs and risktakers can realize their dreams.
    Giants like Ford and Microsoft were not so long ago small 
businesses striving to realize the dreams of Henry Ford and 
Bill Gates. Today, small businesses create 70 percent of new 
American jobs, employ the majority of American workers, and are 
responsible for the majority of our Nation's economic output. 
Small business owners are economic patriots taking risks and 
pursuing dreams. A vibrant small business sector is necessary 
for the economic health of our country.
    If confirmed, I pledge to define and lead the U.S. and 
Foreign Commercial Service based on a clear and strategic 
mission to ensure that small- and medium-sized businesses gain 
greater access to international markets. I will ensure that the 
team of specialists within the Service has the tools necessary 
to anticipate the commercial interests of our American 
exporters and rapidly adapt on the ground to meet their needs.
    The U.S. and Foreign Commercial Service, created by 
Congress a quarter century ago, does what no other entity in 
the United States can do--provide a global infrastructure in 
more than 80 countries and a domestic platform in 109 cities 
with the exclusive purpose of promoting American goods and 
services. We ensuring a level export playing field abroad, and 
in 2004, the volume of those export sales exceeded $26 billion.
    The Commercial Service offers end-to-end export solutions 
helping smaller firms increase profits and lower risks in 
accessing markets otherwise difficult to enter. The worldwide 
network of trade specialists provides export counseling, 
customized market research, trade leads, and advocacy to help 
companies compete in global markets. This worldwide network is 
essential to today's market economy in which 95 percent of the 
world's consumers live outside of the United States.
    U.S. exports support millions of American jobs. 
Approximately 1 of every 5 factory jobs--or 20 percent of all 
jobs in America's manufacturing sector--depends on exports. 
Moreover, research shows that workers in jobs supported by 
exports typically earn wages higher than the national average.
    If confirmed, I will serve as a disciplined and accountable 
steward of the people's money.
    I will commit to a thorough assessment of our resources to 
ensure that the Commercial Service not only meets but also 
exceeds the highest expectations. I will work to build on the 
essential relationships with partners at the Federal, State, 
and local level--such as the Trade Promotion Coordinating 
Committee (TPCC). The TPCC is a critical interagency task force 
that leverages scarce resources and provides a ``one-stop'' 
shop for American companies wanting to expand and sell the 
goods and services in foreign markets.
    Theodore Roosevelt was right when he said, ``[t]he best 
executive is the one who has sense enough to pick good men to 
do what he wants done and self-restraint enough to keep from 
meddling with them while they do it.'' Organizations are only 
as good their people, and I will work to foster a diverse 
environment where the women and men of the Commercial Service 
continue to grow in discipline and expertise--an environment 
where our people have the tools and capability to provide the 
highest quality of service to our constituents--American 
businesses and their employees, owners, and communities. I will 
hold myself and the entire organization to a standard of 
accountability that demands integrity, efficiency, and 
effectiveness.
    I hail from the Southwest Texas border, an area often 
considered one of the final U.S. frontiers. I am privileged to 
be here with you today, and my presence is a testament to 
America's place as a haven for dreamers and doers. My loved 
ones--my family and my friends--along with our diverse 
community, represent America's potential, and I wish to thank 
them for all they have done (and will do) to support me in this 
important post.
    Still today people from around the world see America as a 
land of freedom and opportunity. The President once said, 
``[w]e in the United States live in liberty, trade in freedom, 
and grow in prosperity.'' We certainly face challenges, but we 
also face a world of great opportunities, and a choice on how 
to proceed. If confirmed, I look forward to the challenge of 
helping ensure that our Nation--and its economy--remains a 
beacon for the world.
    Thank for your time. I will be happy to answer any 
questions you might have and welcome your comments.




       RESPONSE TO WRITTEN QUESTIONS OF SENATOR SANTORUM 
                       FROM KIM KENDRICK

Q.1. On April 5 of this year, I sent a letter to Secretary 
Jackson urging him ``to consider refraining from issuing the 
final LEP guidance until concerns about its unfunded costs, its 
potential for unintended consequences at the local level and 
its legal liabilities for 
affordable housing providers are sufficiently addressed.'' I am 
told that HUD officials have advised affordable housing 
operators that the final guidance will call for translating 
``vital documents'' and providing oral interpretation services 
to persons with limited English proficiency free of charge to 
that person and at the project's expense. Has HUD performed any 
cost studies to determine how much these services will cost the 
industry?

A.1. Executive Order (EO) 13166, signed on August 11, 2000, 
requires all Federal agencies to ensure that programs receiving 
Federal financial assistance provide meaningful access to LEP 
persons. The Order charges the Department of Justice (DOJ) with 
responsibility for providing LEP Guidance to other Federal 
agencies and for ensuring consistency among each agency-
specific guidance. On June 12, 2002, DOJ issued LEP guidance 
that directed all Federal agencies to use the DOJ guidance as 
the model. Based on DOJ's instruction, HUD published proposed 
guidance for its recipients on December 19, 2003. HUD made 
extensive changes based on the comments it received and will 
soon publish the final guidance.
    HUD is sensitive to the cost concerns of affordable housing 
providers. Following DOJ's guidance, our guidance requires that 
HUD recipients conduct a four-factor analysis to determine 
whether there is a need to provide language services to 
beneficiaries relative to costs and recipients' resources. 
After applying the four-factor analysis, a recipient may 
determine that an effective LEP plan for its particular program 
or activity includes the translation of vital written materials 
into the needed language to ensure equal treatment and equal 
access of LEP persons to the recipient's programs and 
activities.

Q.2. Again, referring to my letter to Secretary Jackson, I 
urged HUD to consider as one possible solution, ``The 
Department itself should provide translation and oral 
interpretation services directly to the LEP population in order 
to achieve cost effectiveness, uniformity in the quality and 
delivery of service, and to minimize the burden on affordable 
housing providers.'' I am aware that the Office of Multifamily 
Housing intends to provide translations of the four HUD model 
leases and the Resident Rights and Responsibilities brochure in 
a limited number of languages.
Q.2.a. Could you specify which documents should be considered 
``vital''? Has HUD considered translating these important 
documents at the Department's expense?

A.2.a. DOJ guidance explained,

    Whether or not a document (or the information it solicits) 
is ``vital'' may depend upon the importance of the program, 
information, encounter, or service involved, and the 
consequence to the LEP person if the information in question is 
not provided accurately or in a timely manner.

    HUD's guidance applies this same principle. HUD does not 
determine which of the recipients' documents are ``vital.'' The 
recipients make this determination.

Q.2.b. Do you believe having HUD specify and translate ``vital 
documents'' is a more cost-effective solution that would 
achieve uniformity in the quality and delivery of service?

A.2.b. It is not practical for HUD to translate recipients' 
vital documents because vital ``may depend upon the importance 
of the 
program, information, encounter, or service involved, and the 
consequence to the LEP person if the information in question is 
not provided accurately or in a timely manner.'' Only the 
recipient can determine this.

Q.3. As you know, in HUD's multifamily housing programs, all 
members of the household who are 18 years of age and older must 
sign the lease. Another recommendation I urged Secretary 
Jackson to consider is revising the definition of who is LEP so 
that it does not include any member of a household where at 
least one of the signatories to the lease in that household is 
proficient in English. Is this a revision that HUD could 
accept? Please explain.

A.3. Your concern has been raised by the multifamily housing 
industry groups. HUD is giving consideration to this issue. It 
will be an issue I will deal with before the issuance of the 
final guidance.

Q.4. There is a document on the HUD FHEO website to which I 
would like to call your attention. ``Know Your Rights Are You 
Limited English Proficient'' (http://www.hud.gov/offices/fheo/
promotingfh/leprights.pdf), lists the following among the 
examples of what may be discrimination based on national 
origin, ``You call the landlord to report an emergency, but 
they cannot help you because they only speak English and they 
cannot understand your language.'' Please explain the rationale 
behind HUD using this example as advice for tenants.

A.4. This concern has also been brought to HUD's attention. The 
subject document will be revised to be consistent with HUD's 
final guidance when it is issued.

Q.5. Last, I have been told that FHEO is already proceeding 
with investigations of LEP-related complaints, even though the 
final guidance to HUD's funding recipients has not been 
released.
Q.5.a. How are affordable housing operators supposed to know 
what their LEP obligations are before the final guidance is 
issued?

A.5.a. EO 13166 sets forth the compliance standards that 
federally assisted program and activities must follow. It 
states that,

    . . . the compliance standards that recipients must follow 
to ensure that the programs and activities they normally 
provide in English are accessible to LEP persons and thus do 
not discriminate on the basis of national origin in violation 
of Title VI of the Civil Rights Act of 1964, as amended, . . .

    HUD uses the Title VI compliance standards for national 
origin when conducting reviews for LEP. HUD's guidance is 
consistent with DOJ Policy Guidance entitled, ``Enforcement of 
Title VI of the Civil Rights Act of 1964--National Origin 
Discrimination Against Persons with Limited English 
Proficiency,'' dated August 16, 2000.

Q.5.b. Under your tenure as Assistant Secretary of FHEO, will 
fair housing policies be finalized and publicly distributed (in 
the Federal Register for instance) before your office 
investigates and takes actions against affordable housing 
operators and/or public housing agencies?

A.5.b. No additional fair housing policies are necessary. HUD 
uses the Title VI compliance standards for national origin as 
the basis for its compliance reviews of its federally assisted 
recipients.

         REPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                       FROM KIM KENDRICK

Q.1. There has been a significant drop in the number of fair 
housing complaints where a reasonable cause determination has 
been issued in the past few years. What will you do to increase 
the effectiveness of enforcement? What will you do to increase 
the number of systemic investigations of violations of the Fair 
Housing Act by your staff ?

A.1. I, too, am concerned about the drop in charges in recent 
years. I am pleased to report that the numbers are trending up 
again, but I am still not satisfied. HUD is the Federal agency 
with the primary responsibility for enforcing the Fair Housing 
Act. People who file complaints with us expect prompt and just 
resolutions of their cases. HUD has made great strides in 
reducing the time it takes to investigate cases. The Department 
is currently analyzing its operations to ensure that we 
maintain quality in the process. Moreover, the Office of Fair 
Housing and Equal Opportunity and the 
Office of General Counsel are exploring ways they can work 
closer in the planning and conduct of investigations so we can 
complete cases faster, with more effective outcomes. I will 
work to increase training opportunities for HUD investigators, 
drawing on significant expertise at HUD and other 
organizations. The training we will provide at the National 
Fair Housing Training Academy will make a significant 
contribution to that effort.
    HUD is completing revisions to HUD's Title VIII (Fair 
Housing Act) handbook, which provides improved instruction and 
updated information on the conduct of a fair housing 
investigation. The handbook provides guidance on every stage of 
a fair housing complaint from intake through investigation all 
the way to adjudication. This will increase the effectiveness 
of HUD's investigative activities.
    While HUD's fair housing enforcement function provides 
critical redress for individuals who face discrimination, we 
will not eliminate discriminatory barriers in the housing 
market through the enforcement of individual cases alone. This 
past year, HUD created the Office of Systemic Investigations to 
initiate large-scale cases on behalf of the public interest. 
The consolidation of this responsibility in one unit will allow 
HUD to better address novel and complex cases in lending and 
against large developers. I will ensure HUD also continues to 
work closely with the Department of Justice on joint 
investigations and in the referral of pattern-and-practice 
cases.

Q.2. In your opinion does the Office of Fair Housing and Equal 
Opportunity currently have enough funding to support fair 
housing enforcement? Does it have enough staff ? What programs 
or projects to support fair housing enforcement would you like 
to see initiated in FHEO if you are confirmed? Will you ensure 
that FHEO will have enough travel funds to provide for on-site 
investigations in every case?

A.2. With the funds available, HUD and its State and local 
partners currently investigate more than 9,000 housing 
discrimination complaints each year, while also conducting 
compliance reviews and investigations of HUD-funded recipients. 
Of course, this does not represent the full extent of housing 
discrimination in America. HUD's national housing 
discrimination studies, conducted in 2000, show that racial 
minorities experience some form of different treatment on 
average, in over 20 percent of the time they seek housing. 
HUD's disability study, issued this year, showed that hearing-
impaired persons using a TTY face some form of different 
treatment than half of the time they make a call to inquire 
about housing. People in wheelchairs, visiting apartment 
buildings in person, are treated differently one-third of the 
time.
    It is true that HUD does not have the resources to pursue 
every entity that engages in discrimination. Still, HUD can 
educate both consumers and housing providers about their rights 
and obligations under the law through our high-profile cases. 
In particular, I would like to bring more Secretary-initiated 
cases, more cases on behalf of people with disabilities, and 
more cases that combat predatory lending. The newly created 
Office of Systemic Investigations provides a mechanism for us 
to do so.
    I believe on-site investigations are critical to the 
successful and appropriate resolution of a case. As Assistant 
Secretary, I will work to make sufficient travel funds 
available for fair housing investigations.

Q.3. FHEO established a fair housing training academy and it is 
mandatory that substantially equivalent State and local 
agencies attend, often to the exclusion of other available fair 
housing education. However, many FHAP agencies report that the 
courses lack substance and the teachers are not the best in the 
field. Evaluations have been completed by all attendees. Will 
you review these evaluations personally to determine if the 
Fair Housing Academy is meeting its goals and expectations?

A.3. The National Fair Housing Training Academy just completed 
its first year of operation successfully providing training to 
over 600 attendees. In the coming year, the Academy will 
include some advanced courses that will meet the training needs 
of our more experienced investigators. Like any new project, I 
am sure the Training Academy will have to make adjustments and 
improvements as it moves forward. It will need to modify and 
expand the curriculum to best meet the needs of fair housing 
investigators. To that end, the feedback that we receive from 
attendees is invaluable. We look forward to receiving their 
suggestions and using them to guide this project.

Q.4. The current Office of Fair Housing and Equal Opportunity 
has very few written resources that provide education and 
outreach about the Fair Housing Act and other civil rights laws 
that the Office enforces. What are your plans to provide 
written educational materials for industry, advocates, and 
enforcers? In particular, given that Secretary Jackson 
announced in early August, in conjunction with the issuance of 
HUD's Disability Discrimination Study, that HUD intends to 
``educate both consumers and landlords about the rights of 
disabled individuals,'' what are your plans to develop 
materials and programs to conduct this education?

A.4. HUD has produced some excellent resource material, 
available in multiple languages, to inform people of their fair 
housing rights and what they can do if they believe they have 
experienced housing discrimination. At conferences, 
conventions, and fairs, the Department regularly distributes 
brochures, posters, and forms people can use to report 
discrimination.
    Moreover, the Department provides thousands of pages of 
resource material on fair housing at http://www.hud.gov/
fairhousing. Persons searching on Google need only type in 
``HUD'' and ``fair housing,'' and HUD's fair housing home page 
is the first site retrieved. HUD has made numerous improvements 
to that page to make it more user-friendly. From any public 
library, you can visit that site and learn how to file a 
complaint with HUD; read the charges HUD has recently issued; 
and learn about your rights as a person with a disability under 
the Fair Housing Act and other civil rights laws. There is also 
information on the responsibilities of a housing provider and 
the additionally responsibilities of providers of federally 
assisted housing.
    HUD also funded the creation of the written and web-based 
resource materials produced by Fair Housing Accessibility FIRST 
at http://www.fairhousingfirst.org/. This program promotes 
greater compliance with the Fair Housing Act's accessibility 
compliance among private developers. You can also find and read 
every fair housing research publication.
    When HUD published its most recent study, ``Discrimination 
Against Persons with Disabilities: Barriers at Every Step,'' in 
August, the Department made that report available at http://
www.hud.gov/offices/fheo/library/dss-download.pdf, along with a 
Guidebook for Practitioners at http://www.hud.gov/offices/fheo/
library/dss-guidebook.pdf. The Department produced the 
guidebook as a resource for disability and fair housing 
advocates so they can address discrimination in their 
communities. The National Fair Housing Training Academy will 
also use the guidebook as training for fair housing 
practitioners. The findings also underscore the importance of 
continued funding of the much-praised FIRST program.
    In addition, HUD and the Department of Justice have issued 
a joint statement on reasonable accommodations under the Fair 
Housing Act, which answers some of the most frequently asked 
questions regarding reasonable accommodations.
    Beyond this, HUD provides education and outreach grants to 
fair housing organizations, often placing an emphasis on a 
particular education need (that is, outreach to people with 
disabilities or to Hispanics and Latinos). The National Fair 
Housing Training Academy will begin cataloging these materials 
to make them available to all fair housing groups.

Q.5. We have heard complaints that different fair housing HUB 
and program offices take different positions on interpretations 
of the Fair Housing Act, Section 504 of the 1973 Rehabilitation 
Act and Title VI of the 1964 Civil Rights Act. What will your 
office do to address possible inconsistencies among your 
offices?

A.5. It is important that HUD offices have a consistent 
interpretation of the Fair Housing Act. The training underway 
on the new Title VIII handbook should go a long way to address 
this. Under my leadership, HUB directors will continue to have 
weekly phone calls to discuss problems and concerns with cases. 
I will also have quarterly meetings with HUB directors to 
address policy and interpretation of the Fair Housing Act and 
our requirements. Furthermore, I will provide regular guidance 
on precedent setting issues to ensure uniform interpretation on 
novel issues.

Q.6. How is HUD planning to make sure in the wake of Katrina 
that those dislocated voucher holders of Section 8 housing 
choice/ tenant-based vouchers or 811 mainstream vouchers are 
matched with and placed in accessible housing that meets their 
needs? And if they are in communities without such rental 
stock, what contingencies can HUD take to ensure they do not 
wind up homeless?

A.6. After the tragedy suffered by so many in the Gulf region, 
it is important that we not only provide people with a place to 
call home, but also ensure that they can access that home. To 
achieve this, many groups, including State and local housing 
providers and the housing industry must work together. As an 
initial step, I propose that HUD require all its recipients to 
survey the availability of their accessible units and give 
priority for those units to evacuees who require those 
accessibility features. HUD should also issue guidance to all 
HUD recipients reminding them of their duty to comply with the 
requirements of Section 504.
    HUD will coordinate with FEMA to ensure that there is 
access into its manufactured housing, as needed, to identify 
the location of mobile home parks with accessible manufactured 
housing or other accessible units, and to issue letters with 
appropriate design standards. I understand that the 
Manufactured Housing Consensus Committee, a Federal Advisory 
Committee, is exploring providing guidance to all trailer home 
manufacturers encouraging them to produce manufactured housing 
units that are accessible.
    On a longer-term basis, HUD should remind local governments 
that are housing evacuees with disabilities in nursing homes 
that consistent with Olmstead, this should not be considered 
permanent housing for those persons.

        RESPONSE TO WRITTEN QUESTIONS OF SENATOR CRAPO 
                       FROM KIM KENDRICK

Q.1. I am pleased that HUD has decided to hold public forums to 
discuss proposed reforms to RESPA. This is a welcomed change 
from previous attempts to reform RESPA that appeared to have 
taken place without any regard to stakeholder opinions. 
However, it is my understanding that these meetings have not 
been recorded and no public record of what transpired in the 
meetings exists. Can you explain HUD's reasoning for not 
recording these meetings and if officials plan to record future 
meetings?

A.1. The RESPA Reform Roundtables that HUD held this summer 
with representatives of industry, including small business 
entities, and consumers, although publicly announced for 
purposes of information and transparency of HUD processes, were 
established as informal meetings. One of HUD's objectives in 
conducting the Roundtables was to initiate a meaningful and 
productive discussion of issues surrounding the home settlement 
process and how these issues might be addressed through 
possible changes to HUD's RESPA regulations or other means, and 
HUD's view was that this objective could be best achieved 
through an informal meeting setting. HUD's concern was that the 
recording of these meetings would lend a formality to the 
meetings, which HUD thought would be counterproductive. HUD was 
also concerned that the recording of the meetings would have 
presented a chilling effect on the participants and their 
willingness to voice proposals or comments about possible RESPA 
reform, or how they voiced these proposals, which would 
definitely be counterproductive to the objective of the 
Roundtables. To ensure, however, transparency on this process, 
HUD allowed members of the media to view the Roundtables and 
report to the public on the views, proposals, and comments 
expressed, and who said them but not with every statement being 
recorded. By all accounts, HUD believes its RESPA Reform 
Roundtables were well-received and a success.
    HUD learned much from the discussion at the roundtables and 
we are in the process of considering the information, views, 
and proposals presented. No actions have yet been decided, and 
we have not ruled out the possibility of additional meetings, 
perhaps issue-specific meetings.

Q.2. Also, since you attended the series of roundtables on 
RESPA reform, do you think there is consensus among the 
industry on RESPA reform efforts, particularly on packaging and 
the GFE?

A.2. I believe there is consensus on areas of RESPA for which 
change would be welcomed by the industry, and the GFE is one 
such area. Consensus on specific changes, however, whether 
changes to the GFE or packaging, would depend, upon the 
specific proposal for change presented by HUD. With respect to 
both packaging and the GFE, HUD received several suggestions at 
the Roundtables. Another positive outcome of the Roundtables, 
in addition to the information received by participants from 
HUD, was the willingness of the participants to be open to 
suggestions for changes and the commitment to consider 
proposals for change, whether offered by HUD, the industry, 
consumers, or other interested parties.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                     FROM DARLENE WILLIAMS

Q.1. In recent years, HUD has had difficulty in releasing 
reports in a timely way. For example, the HUD publication, ``A 
Picture of Subsidized Households,'' has not been updated with 
data past 1998. The current ``Worst Case Housing Needs 
Report,'' based on 2003 data, is apparently completed but has 
yet to appear, and the last ``Worst Case Housing Needs 
Report,'' based on 1999 data, with ``an update for 2001,'' did 
not appear until January 2004. How, as Assistant Secretary for 
Policy Development and Research, would you work to improve this 
record?

A.1. PD&R releases over 60 publications per year. Also, 800 
publications are available on PD&R's website, www.huduser.org, 
and more than 4.5 million documents are downloaded every year 
from the site. The two specific publications you refer to are 
among PD&R's in-house publications. I recognize that they are 
very important to Congress and other PD&R users.
    Work on the next ``Picture of Subsidized Households'' 
publication is almost complete. If confirmed as Assistant 
Secretary, I would make it a priority to make this publication 
available as soon as possible.
    The Worst Case Needs for Housing Assistance Reports were 
first issued at the direction of the Senate Appropriations 
Committee in 1991 and are based on national data from the 
American Housing Survey (AHS), which is funded by PD&R's 
Research and Technology account. A Worst Case Needs for Housing 
Assistance--A Report to Congress, based on the 2003 AHS data, 
which first became available in June 2004 for analysis, is 
ready for Department-wide clearance but Hurricane Katrina has 
delayed the review process. The Departmental clearance process 
typically takes 3 months. If confirmed, I will work to ensure 
that Congress receives this Worst Case Needs for Housing 
Assistance Report before the end of the 2005 calendar year.
    The Office of Policy Development and Research has a strong 
record of issuing objective, methodologically sound research 
publications that are relied upon by policymakers, academic 
institutions, housing advocates, and the construction, real 
estate, and finance industries. If confirmed as Assistant 
Secretary, I will work to build on this record of achievement 
and ensure that PD&R remains a nationally recognized source of 
sound and objective housing and economic information.
    Finally, Congressional assistance and support for PD&R, 
including funding for its Research and Technology account, is 
critical for the successful completion of its duties. Sound and 
objective data is the foundation for informed policy 
decisionmaking. If confirmed as Assistant Secretary, I will do 
my utmost to bring about the timely issuance of sound and 
objective research.

Q.2. HUD possesses a significant quantity of data on the 
housing and housing needs of low-income people in the path of 
Katrina. Much of the most up-to-date data has not been made 
available publicly, such as on the ``Picture of Subsidized 
Households'' website. Will you make it a priority to make those 
data available to the public so that they can understand the 
impact the storm has had in their area and can use these data 
in aiding the recovery of the Gulf region?

A.2. As you mention, PD&R maintains a great deal of information 
on assisted housing and low-income housing needs. PD&R 
regularly updates its files on assisted housing programs, and 
already has contributed to HUD's Katrina-related effort: (1) by 
providing maps on locations of HUD properties and participants 
to the Secretary; and (2) by making available, on very short 
notice, information on participants in multifamily assisted 
programs in the areas impacted by the hurricane, so that PHAs 
across the country could confirm that families applying for 
assistance were, in fact, impacted by Katrina.
    PD&R staff are beginning to work now on a geographic 
information system (GIS) application that will provide more 
extensive tabulations, maps, and modeling of housing outcomes 
in the States 
impacted by Katrina. As Assistant Secretary, I would lend my 
best efforts to ensure that data that would be useful to the 
public in responding to this disaster would be available to the 
public.

Q.3. In a recent GAO report, HUD was found to lack transparency 
in presenting the Fair Market Rent data. It was very difficult 
to replicate the results or determine how individual FMRs were 
determined. Since that report, HUD has made considerable 
progress in showing where the fiscal year 2006 Fair Market 
Rents released June 2, 2005, came from. Twelve weeks later (and 
6 weeks late), HUD released 70 FR 50138 that proposed changes 
to the 50th Percentile Fair Market Rents but did not provide 
sufficient information to replicate or understand how an 
individual community scored on the various criteria. The notice 
was released on August 25, 2005, with only a month of comment 
time. Are you committed to making the work of PD&R where it 
relates to the administrative work of HUD transparent and 
useful to the end users, the tenants, and PHAs that must live 
with these results?

A.3. Senator Reed, I can assure you that, if confirmed, I am 
committed to continuing PD&R's efforts to make data related to 
PD&R's administrative work as transparent and useful as 
possible to those affected by the decisions made based on the 
data. PD&R's Fair Market Rent (FMR) documentation websites are 
a primary example of how, when staff and resources are 
available, the public can be made better informed about how 
data are used to make decisions affecting their lives. PD&R has 
made available sufficiently extensive data that allows 
localities to replicate virtually all FMR determinations.
    There are times, however, when statutory constraints 
related to the privacy of the American people, and the accuracy 
of the data used for HUD's administrative decisions, may come 
into conflict with the goals of transparency of methods and 
usefulness of data. For example, the FMR Documentation websites 
cannot, under the Privacy Act of 1974, 5 U.S.C. Sec. 552a, use 
the same special tabulations of the 2000 Census used by PD&R to 
benchmark the FMRs. The FMR Documentation websites demonstrate 
how the 2000 Census base rents are calculated, but that 
demonstration does not always exactly match PD&R's results due 
to rounding in the data on the website.
    The 50th percentile FMR determination presents another such 
case. Two of the data elements used to make the 50th percentile 
FMR determinations cannot be released to the public because of 
Privacy Act considerations. Like the data used to benchmark 
FMRs to the 2000 Census, the underlying data on the 
concentration of affordable housing units from the 2000 Census 
is a special tabulation of rental housing units available for 
use only to Sworn Census Officials (PD&R has several on staff). 
A rounded version of this special tabulation is provided that 
does not allow the public to produce the same results as PD&R 
because the rounding of data at small geography levels (tracts) 
introduces differences that are compounded when many rounded 
data elements are summed. The data on concentration of voucher 
tenants is derived from individual tenant records in HUD's 
administrative data systems. While HUD and PD&R can report the 
results of analysis of these data, HUD and PD&R are prohibited 
by law from releasing the source data to the public.
    The August 25, 2005 Notice clearly stated that HUD could 
not release the data used to make the 50th percentile FMR 
determinations. The Privacy Act barrier to disclosure was part 
of the justification for applying stricter scrutiny of the data 
under HUD's 
Information Quality Guidelines.

       RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES 
                      FROM FRANKLIN LAVIN

Q.1. What specific issues would you place at the top of the 
agenda of the Trade Promotion Coordinating Committee?

A.1. The TPCC is a critical tool for making export 
opportunities more available to U.S. businesses. My priorities, 
if confirmed, will be to implement the 2005 National Export 
Strategy, coordinate an interagency component to the 
President's Asia Pacific Partnership for Clean Development, and 
use the TPCC to broaden the base of U.S. companies that export.

 The 2005 Strategy focused on making sure that U.S. 
    small businesses are aware of and possess the tools they 
    need to take advantage of recent market openings such as 
    CAFTA. In addition, the TPCC is focusing on seven other key 
    markets (Japan, South Korea, China, India, Russia, EU, and 
    Brazil) where United States Government trade promotion 
    resources can have the biggest impact.
 The Department is helping to coordinate an interagency 
    component to the President's Asia Pacific Partnership for 
    Clean Development. This partnership focuses on practical 
    measures that can be taken by countries in the Asia-Pacific 
    region to create new investment opportunities, build local 
    capacity, and remove barriers to the introduction of clean, 
    more efficient technologies. U.S. companies are leaders in 
    many of these technologies, and the TPCC agencies will 
    engage these companies to help them participate in projects 
    that are part of this partnership.
 I would like the TPCC agencies to develop private 
    sector partnerships that encourage more U.S. companies to 
    export. The latest Census figures show that of the 1.5 
    million U.S. manufacturing and wholesales firms only 
    225,000 of them export. One study showed that as many as a 
    third of nonexporting firms would export if they had the 
    right information and assistance. The Department is 
    currently piloting a number of innovative partnerships with 
    the private sector (for example, Fed Ex and PNC Bank). One 
    of my goals will be to develop these and other partnerships 
    into a larger strategy to get more U.S. companies 
    exporting.

Q.2. The U.S. trade deficit with China is rapidly increasing 
and will likely exceed $200 billion by year-end. What specific 
steps do you propose to help United States exporters penetrate 
Chinese markets and deal with the imbalance?

A.2. If confirmed, I intend to pursue a three-pronged approach 
to helping United States business export to China.
    First, we need to take every step we can to improve market 
access for United States companies in China. We will continue 
to press China to adhere to its WTO commitments. We will use 
the annual JCCT process, the Trade Review Mechanism of the WTO, 
and bilateral senior-level meetings in this effort.
    Second, we need to reach out to companies in the United 
States to make sure they understand the opportunities of the 
China market. We will step up our trade promotion efforts to 
assist United States companies in locating qualified buyers in 
China. This will include a series of focused trade events 
during 2006, continued improvements to our China Business 
Information Center (CBIC), and full implementation of the 
American Trading Centers (ATC) initiative which will 
particularly help small and medium United States companies 
enter the market in a broader range of Chinese cities.
    Third, we need to vigorously enforce our laws against 
unfair trade practices. If confirmed, I can assure you that we 
will use every tool at our disposal to rigorously enforce the 
rights of U.S. business under our trade laws. Indeed, the Bush 
Administration has put in place more antidumping duty orders on 
products from China (29) than were put in place during the 
prior 8 years (25). In addition, the Commerce Department is 
currently enforcing 57 antidumping duty orders on goods from 
China, more than twice the number of orders being enforced with 
respect to the next largest country (Japan, 26).
    I have spent 15 years helping United States businesses 
compete in Asia and while China is a challenging market for 
United States business, it can also be very rewarding. Despite 
these challenges, U.S. businesses have had some success. United 
States goods exports to China have more than tripled during the 
past 10 years, increasing from $9.3 billion in 1994 to $34.7 
billion in 2004. Much of this growth has taken place following 
China's accession to the WTO in 2001. The average annual growth 
rate between 2002 and 2004 was 28.5 percent; almost double the 
average increase from 1994 to 2001 (15.2 percent).

Q.3. The currency imbalance between the United States and China 
encourages U.S. companies to move manufacturing to China and 
ship finished goods back to the United States for sale. Almost 
60 percent of China's exports are now produced by companies 
funded by foreign capital.
    In a 1994 Foreign Affairs article, you seemed to advocate 
ameliorating Chinese trade barriers through inbound United 
States investment--which could lead Chinese companies to 
purchase American technology and American goods such as machine 
tools--rather than through an export-based strategy aimed at 
the Chinese consumer market. Is that still your view?

A.3. I believe there are three important elements to our China 
strategy: First, we must continue to push for improved market 
access for U.S. companies, using bilateral negotiations and the 
WTO process to continually improve our companies' ability to 
compete. Second, we must expand export promotion for United 
States products and companies, helping match suppliers with 
buyers, and familiarize new-to-market companies with the 
challenges of China. Third, we need to ensure the rigorous 
enforcement of our trade laws so that no Chinese exporter can 
use unfair means to compete in the United States. This 
multiprong approach, if consistently pursued, should yield 
positive results for American exporters.
    As to the question of United States-China investment, I 
believe that as bilateral economic engagement continues to 
grow, so will prospects for bilateral investment. It should be 
noted that Chinese investment in the United States can bring 
benefits for United States companies and workers, for example, 
job creation. Of course, such transactions should be subject to 
CFIUS review where appropriate.

Q.4. Would you favor the United States taking actions such as 
initiating a WTO case or the imposition of tariffs to encourage 
the Chinese to allow the value of the remnimbi to reach a 
realistic level?

A.4. The Administration has been clear in its position that 
China should move toward a market-based flexible exchange rate 
and there has been some progress on that front. The Treasury 
Department has the lead for the Administration on that issue 
and I would refer you to that agency for further details.

Q.5. If confirmed, you will be involved in the current round of 
WTO negotiations. What importance would you assign to U.S. 
antidumping and countervailing duty laws in the overall 
strategy of the Office of International Trade Administration?

A.5. Preserving the effectiveness of the antidumping and 
countervailing duty laws is crucial to the overall strategy of 
the International Trade Administration in the current round of 
WTO negotiations. I believe that strong antidumping and 
countervailing duty laws are critical for maintaining support 
for trade liberalization. We must ensure that our workers and 
businesses are protected against unfair trade, while gaining 
the great benefits of larger global markets.
    Working with the USTR, the International Trade 
Administration has been very active in the negotiations on the 
issues of antidumping and countervailing duty trade remedy 
measures--tabling many papers to promote our objectives in 
these negotiations. I will continue to work hard to ensure that 
the United States' concerns, including those identified by 
Congress in the Trade Promotion Authority, are addressed as 
part of the WTO Rules negotiations and that antidumping and 
countervailing duties remain effective remedies against unfair 
trade.

        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 
                      FROM FRANKLIN LAVIN

Q.1. Mr. Lavin, unlike its predecessors, the National Export 
Strategy for 2005 is silent on the matter of tied aid.
    Obviously, you cannot be expected to comment on reports 
with which you have not been involved. For the record, though, 
could you provide the Committee your view on the extent to 
which foreign tied aid practices remain a problem.

A.1. While tied aid remains an issue, it has become less of a 
problem. Tied aid now averages between $3 and $4 billion, down 
from an average of $10 billion in the early 1990's. We will 
continue to match any violation of OECD rules.
    Because of the success in negotiating disciplines on tied 
aid in the OECD, most tied aid now occurs in social sectors 
like education, basic medical care, rail, water, and waste 
water. While tied aid is less injurious when used to fund 
projects in noncommercial sectors, it is not the most effective 
use of development dollars.

Q.2. The issue of intellectual property rights, particularly 
involving China, has been a significant problem for decades, 
costing American manufacturers billions of dollars in lost 
revenue, and there is little indication the problem will go 
away anytime soon. The National Export Strategy report for 2005 
devotes considerable space to this recurring problem.
    Apart from continuing to raise the issue in bilateral 
discussions with Chinese counterparts, can you provide the 
Committee some indication of what measures you are considering 
to help affect significant change in this nefarious practice by 
Chinese industry?

A.2. The International Trade Administration (ITA) currently has 
four initiatives underway on the IPR problem:

 Policy Efforts: Through the commitments secured at the 
    Joint Commission on Commerce and Trade (JCCT), and in other 
    fora, we are working to ensure that China has in place and 
    enforces the policies needed to ensure adequate protection 
    of intellectual property. This includes seeing a 
    substantial increase in the number of criminal prosecutions 
    of violators of foreign IP rights in China, ensuring that 
    Chinese Government agencies and enterprises use only legal 
    software; strengthening efforts to rid trade fairs of fake 
    goods; ensuring timely accession by China to the WIPO 
    global Internet treaties; and enhancing bilateral 
    cooperation between United States and Chinese law 
    enforcement agencies on combating IP infringing activities.
 Capacity Building: In cooperation with other United 
    States agencies and the United States business community, 
    ITA has conducted numerous training programs for Chinese 
    officials and business executives over the past several 
    years. For example, we have conducted IPR enforcement 
    seminars and training focused on criminal and customs 
    enforcement. These efforts are aimed at ensuring that China 
    has the trained personnel necessary to ensure protection 
    for IPR. We will continue to expand these efforts.
 Outreach to U.S. Industry: We are working on a variety 
    of programs to ensure United States companies are aware of 
    the need to protect their IP in China and to give them the 
    information on how to accomplish this goal. For example, in 
    2004, ITA's China Office organized over a dozen seminars 
    across the United States addressing how small and medium 
    enterprises can protect their IP. We are working with 
    interagency colleagues to implement an even more ambitious 
    IP outreach program for 2005.
 Metrics: We are working with other United States 
    Government agencies and United States industry to ensure 
    that we have the metrics necessary to track future trends 
    in China's IP situation. The ability to benchmark China's 
    performance in IP protection and enforcement will continue 
    to be a priority for us.

    All of these activities are undertaken in coordination with 
the Department of Commerce's broader IP initiatives, which 
include the creation of a new position at DOC--a Coordinator of 
International Intellectual Property Enforcement, the stationing 
of additional United States Government IP experts in China and 
the launching of the Patent and Trademark Office's IP Academy 
to train foreign officials, including Chinese, in IP law and 
regulations.
    If confirmed as Under Secretary for the International Trade 
Administration, I would like to explore the following:

 Initiate a United States Government-Industry ``Best 
    Practices Initiative'' for manufacturers looking to protect 
    their intellectual property in China throughout its 
    distribution chain. Help U.S. business make it as difficult 
    as possible for IP crimes to occur.
 Reinvigorate policy discussion in China to increase 
    market access for United States products in China, with a 
    focus on expanding legal distribution channels for United 
    States products currently unavailable in China's market. 
    The easier the legal distribution channels become, the less 
    attractive the illegal channels.
 Cooperate with Chinese indigenous industry coalitions 
    to raise awareness of the importance of protection of 
    Chinese intellectual property. As the Chinese increasingly 
    develop their own intellectual property, this should foster 
    an indigenous constituency sympathetic to our message.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR DOLE 
                      FROM FRANKLIN LAVIN

Q.1. Mr. Lavin, if confirmed by the Senate, in your role 
overseeing the Committee on the Implementation of Textile 
Agreements (CITA) what is your view of the future of the 
Chinese textile safeguards?

A.1. The Administration is committed to finding a solution to 
the problems we are confronting in the textile sector, 
particularly with respect to imports from China. There is broad 
support in our textile and apparel industries for a 
comprehensive approach to textile trade with China that would 
provide greater certainty in the marketplace. We are currently 
engaged in negotiations with China aimed at reaching a broad 
textile agreement. United States negotiators met with Chinese 
officials again on this issue on September 26-28. Assuming we 
have successful negotiations with the Chinese, it is our intent 
to have an agreement that extends through 2008. I can assure 
you that we will continue to exercise our rights, as 
circumstances warrant, to invoke the textile provision of 
China's Accession Agreement to the World Trade Organization.

Q.2. Mr. Lavin, in your time as United States Ambassador to 
Singapore, that country was identified as a major center for 
the transshipment of textiles. What actions did you and your 
staff take to reduce this illegal trade?

A.2. Singapore is the world's largest transshipment center. For 
a ship to get from anywhere in the Indian Ocean or South Asia 
to anywhere in the Pacific, including the United States west 
coast, it typically has to go through the port of Singapore.
    Singapore's role as a major transshipment center raises the 
possibility of illegal transshipments through that port. The 
U.S. Government has spent much time, effort, and money over the 
last 
several years establishing stricter controls over 
transshipments through Singapore and working with the 
Singaporean Government to increase their knowledge and 
prosecution of such illegal shipments.
    The United States-Singapore FTA requires an unprecedented 
level of cooperation between the United States and Singaporean 
Customs services, with a particular emphasis on preventing 
illegal textile transshipments and rules-of-origin fraud. One 
textile fraud expert at DHS ICE headquarters told us that the 
United States-Singapore FTA is the strongest of any FTA for 
Customs cooperation and antitransshipment procedures for 
textiles.
    The FTA provides for criminal, civil, and administrative 
penalties to deter circumvention and imposes additional 
obligations related to information sharing and investigations. 
For instance, the FTA requires textile producers to retain 
production and shipping documents for 5 years (the same as in 
the United States) rather than only 2 years, as under previous 
regulations. This makes it easier for United States and 
Singapore Customs to carry out investigations of alleged 
transshipment and other illegal activities.
    As a result of the FTA, all Singapore textile 
manufacturers, subcontractors, and exporters must register with 
Singapore Customs and reregister every 2 years, the first part 
of a process of enhanced transparency and enforcement. 
Singapore also now provides to United States Customs and Border 
Protection (CBP) monthly reports of survey results, including 
factory profiles, capacity, types of goods produced, and any 
anomalies they spot. The goal is to ensure that Singapore-based 
firms are actually capable of producing what they claim to be 
producing. Singapore Customs has increased its number of 
personnel to handle this new enforcement workload.
    The Administration takes seriously its responsibilities to 
prevent fraudulent textile shipments. When we have approached 
Singapore with actual cases of textile fraud, they have 
responded effectively. While it predates the FTA (and my tenure 
as Ambassador), in one case in 1999, we found a Singapore-based 
company engaged in several million United States dollars worth 
of fraudulent labeling and approached the Singapore Government 
for assistance. They closed the company down.
    In early 2004, my Embassy hosted a CBP textile production 
verification team, known as a ``Jump Team.'' Its job was to 
verify production capabilities of more than a dozen Singapore 
companies of interest. The Jump Team's final report did not 
reveal illegal export activity per se, but did report that 
several companies had not implemented document retention 
required for exports to the United States. The team identified 
these companies to Singapore Customs as entities to be 
scrutinized to ensure compliance.
    As the world's largest transshipment port, we can be sure 
Singapore will remain a potential venue for illegal 
transshipment activities, and it will remain a challenge for 
Singapore authorities to know for certain what is inside the 21 
million containers that pass through each year. But in my 4 
years as Ambassador, we have pressed hard for Singapore to 
tighten its trade controls and enforcement and we have seen an 
impressive growth in Singapore's cooperation with us across a 
wide range of trade control activities, including preventing 
illegal textiles transshipments. If confirmed, illegal 
transshipment of textiles will continue to be a priority.

Q.3. According to the National Council of Textile 
Organizations, NCTO, ``China is a textbook case of how a 
foreign government has used a network of illegal subsidies and 
government interventions in order to destroy foreign 
competition, both in the United States as well in many other 
countries.'' Mr. Lavin, in your extensive dealings with China, 
have you been aware of China using subsidies or government 
intervention to damage a foreign competitor? If so could you 
provide the Committee examples and proposed remedies?

A.3. China is very aggressive in the marketplace and its 
practices can be detrimental to United States companies. The 
U.S. Government needs to be at least as equally aggressive in 
market access and remedies as well as in export promotion. 
Using the Joint Commission on Commerce and Trade (JCCT) gives 
us a multiprong approach and will improve market-operating 
conditions. Improving the operating environment in China for 
United States business is a long-term effort and, if confirmed, 
I am committed to using every tool in our toolbox, including 
strict enforcement of antidumping laws.

Q.4. The United States has put forward a proposal in the Doha 
Round negotiations to clarify that member countries are 
permitted to distribute antidumping and countervailing duties, 
as the United States currently does under the Continued Dumping 
and Subsidy Offset Act. Specifically, this proposal states that 
members may distribute the duties collected when respondent 
companies continue to dump or receive subsidies any way that 
WTO member countries see fit.
    Do you support efforts to allow countries to distribute 
antidumping and countervailing duties to the harmed industries 
in the Doha negotiations? Please explain the reasoning behind 
your answer.

A.4. As you know, the United States' enactment of the Continued 
Dumping and Subsidy Offset Act (commonly known as the Byrd 
Amendment) was challenged before the World Trade Organization 
(WTO) by 14 countries that claimed the law violated the 
antidumping and countervailing duty agreements. Although the 
United States staunchly defended its right to distribute 
collected antidumping and countervailing duties, arguing that 
the relevant WTO agreements were silent on this issue, the WTO 
Appellate Body found that the law was WTO inconsistent in that 
the disbursements were a ``specific action'' against dumping 
and subsidies that are not permitted under the WTO antidumping 
and countervailing duty agreements. Because our laws were not 
brought into compliance by the deadline of December 27, 2003, 
several of the complaining WTO Member countries, including 
Canada, the EU, Japan, and Mexico, have been authorized to 
impose sanctions against goods from the United States. All 4 of 
those countries are now imposing duties on selected U.S. 
products in retaliation for our failure to come into compliance 
with the WTO decision.
    Congress has instructed Commerce to engage on this issue in 
the context of the WTO Rules negotiations and I understand that 
Commerce have raised the issue. If confirmed, I will ensure 
that the Department continues our engagement on this issue as 
the Doha Round progresses. We need to find a resolution to this 
issue that respects Congressional direction and satisfies WTO 
rules or U.S. companies and U.S. consumers will continue to be 
exposed to retaliation.

        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 
                      FROM DARRYL JACKSON

Q.1. Mr. Jackson, some of us in Congress are concerned about 
the transfer of militarily sensitive technology to foreign 
nationals residing in the United States whose countries of 
origin have active programs in these areas, for example, Iran 
and China.
    A 2004 report by the Department of Commerce Inspector 
General was highly critical of the Bureau of Industry and 
Security's handling of the deemed export issue, including in 
the issuance of licenses and in the monitoring of compliance 
with those licenses.
    Can you comment for the Committee on whether the issue of 
deemed exports is receiving the attention it deserves by BIS? 
Is there room for improvement there?

A.1. I consider the deemed export regulations to be a necessary 
part of the U.S. Government's efforts to prevent the harmful 
diversion of controlled dual-use technology to foreign 
nationals. If confirmed, I will work to ensure that enforcement 
of these regulations is robust.
    I am also sensitive to the important role that foreign 
scientists and other non-Americans play in America's companies, 
universities, and research institutes. Accordingly, if 
confirmed I will work with industry, the academic community, 
and other Government agencies to increase awareness and 
understanding of the deemed export requirements to prevent and 
deter violations of the deemed export rule.
    The Office of Inspector General report that you refer to 
recommended that BIS implement programs to verify compliance 
with special conditions in deemed export licenses. I understand 
that BIS is finalizing development of protocols for conducting 
such compliance reviews of selected deemed export licenses, 
similar to the procedures currently in place to conduct foreign 
end-use verifications. President Bush's fiscal year 2006 budget 
request, as passed by the Senate and the House, provides BIS 
with resources to implement this new compliance verification 
program, and would enable selected deemed export compliance 
reviews in sensitive sectors beginning in fiscal year 2006.

Q.2. Mr. Jackson, the United States proposal to provide India 
with nuclear technology under the Next Steps in Strategic 
Partnership program could have serious implications for this 
country's nonproliferation policy. Providing even commercial 
nuclear technology to a country that is not a signatory of the 
Nonproliferation Treaty and that has tested nuclear weapons 
could be seen as undermining the credibility of U.S. policy in 
a very crucial area. And, I should remind the Committee that 
the Administration imposed sanctions on two Indian scientists 
for selling nuclear technology to Iran.
    What specific Red Flag Guidance will be provided to 
exporters of items that formerly required licenses for exports 
of goods to India under the new Export Administration 
Regulation amendments of August 30? Can you state that no 
personnel employed at any Indian Space Research Organization 
facility or site that has been 
removed from the Entities List as a result of the Strategic 
Partnership policy has any relationship with any Indian Defense 
Research and Development Organization office, facility, or site 
responsible for India's ballistic missile program?
    Have there been any denials to India since last September 
when Commerce first amended the EAR under the NSSP? If so, what 
kinds of exports have been denied?

A.2. I support the policy of President Bush in working toward a 
strategic and economic partnership with India, in recognition 
of the steps India has taken to meet its obligations as a 
nation with advanced nuclear technology.
    Our relationship with India has progressed via a series of 
reciprocal steps, in which Indian actions have made possible 
United States steps. As a result, I understand that India has 
strengthened its internal and external controls on sensitive 
technologies, thereby allowing the United States to ease 
certain dual-use export controls with regard to India. One of 
the key steps India took was passing legislation to enhance its 
export control system and strengthen its enforcement 
capabilities.
    Additionally, under Phase I of the NSSP, the United States 
and India reached an agreement on procedures for conducting 
end-use checks on sensitive United States-origin dual-use items 
exported to India. It is my understanding that BIS's Export 
Control Officer has been actively and successfully conducting 
such checks.
    If confirmed, I will make enforcement of the U.S. export 
control laws with respect to India a top priority, and I will 
work to prevent the diversion of sensitive items to proscribed 
nuclear weapons and missile activities. I look forward to 
working closely with you, your staff, and the Committee on this 
very important issue.

        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 
                      FROM DAVID McCORMICK

Q.1. Mr. McCormick, some of us in Congress are concerned about 
the transfer of militarily sensitive technology to foreign 
nationals residing in the United States whose countries of 
origin have active programs in these areas, for example, Iran 
and China.
    A 2004 report by the Department of Commerce Inspector 
General was highly critical of the Bureau of Industry and 
Security's handling of the deemed export issue, including in 
the issuance of licenses and in the monitoring of compliance 
with those licenses.
    Can you comment for the Committee on whether the issue of 
deemed exports is receiving the attention it deserves by BIS? 
Is there room for improvement there?

A.1. Deemed export controls are an important part of the 
overall mission of the Bureau of Industry and Security (BIS) 
and, if confirmed, I will make this area one of my top 
priorities.
    I understand that BIS has undertaken a major deemed export 
outreach program over the past year to ensure that those 
covered by deemed export controls, particularly in the academic 
and research communities, are aware of the current 
requirements. I also have learned that BIS is currently 
reviewing extensive public comments on changes that the 
Department of Commerce Inspector General recommended be made to 
the deemed export controls. If confirmed, I will be closely 
involved in making decisions on any potential changes to the 
deemed export controls and otherwise working to make this 
important program continues to meet our national and economic 
security needs.

Q.2. Mr. McCormick, the United States proposal to provide India 
with nuclear technology under the Next Steps in Strategic 
Partnership program could have serious implications for this 
country's nonproliferation policy. Providing even commercial 
nuclear technology to a country that is not a signatory of the 
Nonproliferation Treaty and that has tested nuclear weapons 
could be seen as undermining the credibility of U.S. policy in 
a very crucial area. And, I should remind the Committee that 
the Administration imposed sanctions on two Indian scientists 
for selling nuclear technology to Iran.
    What specific Red Flag Guidance will be provided to 
exporters of items that formerly required licenses for exports 
of goods to India under the new Export Administration 
Regulation amendments of August 30? Can you state that no 
personnel employed at any Indian Space Research Organization 
facility or site that has been 
removed from the Entities List as a result of the Strategic 
Partnership policy has any relationship with any Indian Defense 
Research and Development Organization office, facility, or site 
responsible for India's ballistic missile program?
    Have there been any denials to India since last September 
when Commerce first amended the EAR under the NSSP? If so, what 
kinds of exports have been denied?

A.2. I fully support President Bush's policy toward India and, 
if confirmed as Under Secretary, look forward to implementing 
it fully, with full attention to its national security aspects.
    Concerning the Red Flag Guidance you mentioned, it is my 
understanding that U.S. exporters are advised of their 
obligation to know their customers when exporting to an end-
user formerly listed on the Department of Commerce Entity List. 
BIS strongly urges exporters to use Supplement No. 3 to Part 
732 of the Export Administration Regulation (EAR), ``BIS's 
`Know Your Customer' Guidance and Red Flags,'' when exporting 
or reexporting to any entity in India. BIS officials have told 
me that exporters are specifically advised that exporting to an 
entity formerly listed on the Entity List constitutes a ``Red 
Flag'' to be resolved prior to export.
    Concerning your question regarding Indian Space Research 
Organization facility personnel, the answer to this question 
requires access to classified information and, as a nominee, I 
am not authorized to review classified information. It is my 
understanding, however, that the Indian Space Research 
Organization facilities, which were recently removed from the 
Entity List, are involved in India's civilian satellite program 
and not with its space launch vehicle program. If confirmed, I 
would be happy to follow up on this question in greater detail.
    Finally, with respect to denied export license 
applications, BIS officials inform me there have been denials 
to India since the October 2004 revisions to the EAR made in 
conjunction with the United States-India Next Steps in 
Strategic Partnership (NSSP). As a nominee, I do not have 
access to information on what kinds of exports have been 
denied. I have asked BIS officials to provide this information 
to you in a separate transmittal.

Q.3. Mr. McCormick, a recent article in The Wall Street Journal 
stated that the FBI has estimated that there are as many as 
3,000 Chinese ``front companies'' in the United States actively 
seeking to illegally acquire militarily sensitive dual-use 
technologies. Those efforts are in addition to the large number 
of licenses legitimately provided to United States companies 
exporting dual-use items to China.
    Similarly, a June article in the Washington Times reported 
that a Chinese front company won a contract from a system 
manufacturer involved with the Navy's Aegis battle management 
radar system and proceeded to steal details of that highly 
sensitive technology, which may have contributed to China's 
development of its own Aegis-type radar system.
    There are very serious national security considerations 
involved in the position for which you have been nominated. Can 
you assure the Committee of your commitment to ensure that 
national security will not be jeopardized in deference to 
commercial interests and that the gravity of the issue of dual-
use export controls will receive the attention it deserves?

A.3. I am committed to vigorously pursuing BIS's national 
security mission. Having proudly served in the U.S. Army, I am 
keenly aware of the importance of a dual-use export control 
system that keeps sensitive goods and technologies out of the 
hands of our adversaries and potential adversaries. If 
confirmed, I will work to ensure that the dual-use licensing 
process, from regulation to enforcement to outreach, prevents 
exports that would undermine U.S. security. By paying close 
attention to the security requirements of dual-use trade, we 
can also support legitimate trade in dual-use items.
    I would note that, with respect to China, BIS has 
aggressively pursued enforcement cases involving unauthorized 
exports, particularly those which involve goods which could 
support Weapons of Mass Destruction programs or are intended 
for unauthorized military use. If confirmed, I will accord the 
highest priority to the effort to prevent illegal diversions of 
dual-use goods and technologies to China. I look forward to 
working closely with you, your staff, and the Committee, to 
fulfill our common commitment to protecting our Nation's 
security.

Q.4. Have there been any denials to India since last September 
when Commerce first amended the EAR under the NSSP? Is so, what 
kinds of exports have been denied?

A.4. The Bureau of Industry and Security (BIS) denied 64 
license applications for exports to India during the period of 
September 2004 to September 2005. The United States does not 
approve license applications for exports intended for use in 
programs of concern, such as India's ballistic missile, space 
launch vehicle, nuclear weapons, and unsafeguarded nuclear 
power program. The majority of the items that were denied for 
export to India were low-level items not elsewhere specified on 
the Commerce Control List (CCL) intended for these programs of 
concern or items that posed a risk of diversion to such 
programs.
    In addition, BIS denied other items that were controlled on 
the CCL, including: Oscilloscopes, vibration test equipment, 
general electronic testing equipment, telecommunications 
equipment, information security hardware and software, 
dosimeters, isostatic presses, ceramic materials, and 
technology for steam generators.
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