[Senate Hearing 109-936]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-936

 
                            NOMINATIONS OF:
                   JAMES S. SIMPSON, ROBERT M. COUCH,
              CHRISTOPHER A. PADILLA, AND BIJAN RAFIEKIAN

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

                                HEARING

                               before the

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

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                            nominations of:

  james s. simpson, of new york, to be federal transit administrator, 
                   u.s. department of transportation

                               __________

             robert m. couch, of alabama, to be president, 
         government national mortgage association (ginnie mae)

 christopher a. padilla, of the district of columbia, to be assistant 
                 secretary, u.s. department of commerce

                               __________

    bijan rafiekian, of california, to be a member of the board of 
             directors, export-import of the united states

                               __________

                    MARCH 14 AND SEPTEMBER 27, 2006

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
36-470                      WASHINGTON : 2007
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001


            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

                Sherry Little, Professional Staff Member

                Tewana Wilkerson, Legislative Assistant

             Jonathan Miller, Democratic Professional Staff

                   Sarah A. Kline, Democratic Counsel

                   Aaron Klein, Democratic Economist

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                        TUESDAY, MARCH 14, 2006

                                                                   Page

Opening statement of Chairman Shelby.............................     1

Opening statements, comments, or prepared statements of:
    Senator Schumer..............................................     4
    Senator Sarbanes.............................................     5
    Senator Martinez.............................................     6
    Senator Reed.................................................     6
        Prepared statement.......................................    29
    Senator Allard...............................................    21
    Senator Carper...............................................    23

                                WITNESS

Max Cleland, Member, Board of Directors, Export-Import Bank of 
  the United States..............................................     2

                                NOMINEES

James S. Simpson, of New York, to be Federal Transit 
  Administrator, U.S. Department of Transportation...............     8
    Prepared statement...........................................    29
    Biograpical sketch of nominee................................    31
    Response to written questions of:
        Senator Shelby...........................................    48
        Senator Stabenow.........................................    51
Robert M. Couch, of Alabama, to be President, Government National 
  Mortgage Association...........................................     9
    Biograpical sketch of nominee................................    42
                              ----------                              

                     WEDNESDAY, SEPTEMBER 27, 2006

Opening statement of Chairman Shelby.............................    53

Opening statements, comments, or prepared statements of:
    Senator Allard...............................................    54

                                NOMINEES

Christopher A. Padilla, of the District of Columbia, to be 
  Assistant Secretary, U.S. Department of Commerce...............    56
    Biograpical sketch of nominee................................    66
Bijan Rafiekian, of California, to be a Member of the Board of 
  Directors, Export-Import of the United States..................    57
    Biograpical sketch of nominee................................    73

                                 (iii)


                            NOMINATIONS OF:
                     JAMES S. SIMPSON, OF NEW YORK,
                  TO BE FEDERAL TRANSIT ADMINISTRATOR,
                 U.S. DEPARTMENT OF TRANSPORTATION AND
                      ROBERT M. COUCH, OF ALABAMA,
                            TO BE PRESIDENT,
         GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GINNIE MAE)

                              ----------                              


                        TUESDAY, MARCH 14, 2006

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

    The Committee met at 10:07 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Richard C. Shelby (Chairman of 
the Committee) presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The hearing will come to order.
    We have two nominations which we will consider this 
morning. The first nomination is of James S. Simpson to be the 
Administrator of the Federal Transit Administration. The second 
nomination is that of Robert M. Couch, to be the President of 
the Government National Mortgage Association, which we call 
Ginnie Mae.
    I appreciate the willingness of the nominees to appear 
before the Committee today. President Bush has nominated James 
S. Simpson of New York to head the Federal Transit 
Administration, the office within the Department of 
Transportation which oversees Federal investment in public 
transportation.
    Mr. Simpson will be responsible for implementing SAFETEA, 
the 6-year transportation reauthorization legislation, which 
this Committee authored and which President Bush signed into 
law last year.
    This is the first year of its implementation, and of 
course, a critical one. We will be closely watching the agency 
during this period to ensure that they are carrying out our 
Congressional intent. We want to know that the provisions of 
law that are so important to this Committee, private sector 
involvement being one of the many, are garnering the attention 
they deserve.
    Before being nominated, Mr. Simpson served on the Board of 
the Metropolitan Transportation Authority of New York, a 
position he held for 8 years and to which he was appointed by 
Governor Pataki. We are pleased to see a nominee for this 
important position who has professional experience in the 
provision of transportation service. Mr. Simpson, I look 
forward to your testimony.
    Mr. Simpson. Thank you, Mr. Chairman.
    Chairman Shelby. Our second nominee is Robert Couch, whom 
President Bush has nominated to be President of the Government 
National Mortgage Association, or Ginnie Mae. Mr. Couch has 
served as president and Chief Executive Officer of the New 
South Federal Savings Bank in Birmingham, Alabama, the largest 
thrift in my State. He has also served as Managing Director of 
Collateral Mortgage Limited, a large originator and servicer of 
loans secured by commercial and multifamily real estate located 
in Birmingham.
    Mr. Couch is no stranger to this Committee, having 
testified before the Committee on several occasions in his role 
as Chairman of the Mortgage Bankers Association of America. In 
addition to his experience in mortgage banking, Mr. Couch is 
also a certified public accountant and I know is an attorney.
    After we administer the oath this morning, nominees may 
make their opening statement. You can also feel free at that 
time to introduce any members of your family that are here 
today. We will be joined by Senator Sarbanes in a few minutes. 
He has another Committee. If both of you will stand and let me 
administer the oath to you.
    [Witnesses sworn.]
    Senator, do you want to say something about both of them or 
one of them? Welcome again to the Committee. You have been here 
before us, too.

                    STATEMENT OF MAX CLELAND

                   MEMBER, BOARD OF DIRECTORS

            EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Cleland. Thank you very much, Mr. Chairman. Good to be 
back with you, my dear friend. I am sure that the great 
distinguished nominee from Alabama has all the qualifications 
necessary to carry out his task.
    Chairman Shelby. Absolutely. I am sure he does, too.
    [Laughter.]
    Mr. Cleland. But I am here to speak on behalf of Jim 
Simpson.
    Chairman Shelby. I am sure Mr. Simpson does, too.
    Mr. Cleland. Yes, sir, on behalf of Jim Simpson, whom I 
have known for more than a decade. He has an extraordinary 
background in transportation.
    Chairman Shelby. He does.
    Mr. Cleland. He has been involved in transportation issues 
all of his adult life. He actually currently serves on the St. 
Lawrence Seaway Board, for which he was confirmed about a year 
and a half ago by the Senate.
    But Jim began his career as a commercial interstate semi 
tractor trailer driver. He has done this business from the 
bottom up. He attended, worked his way through St. Johns 
University, and today, he is chairman of the very company he 
was a truck driver for: Victory Worldwide Transportation, a 
domestic and international moving and storage company, 
affiliated domestically with United Van Lines.
    His company has been honored with an international trade 
award for exceptional international achievement, awarded that 
by the U.S. Department of Commerce. Jim's honors as an 
entrepreneur also include receiving the Employer of the Year 
Award from the American Moving and Storage Association. In 
addition, he was selected by Ernst and Young's Nasdaq judges as 
one of four finalists for the National Entrepreneur of the Year 
Award, so your emphasis on the private sector, Mr. Chairman, is 
well-placed here.
    In June 1995, Jim began his 10-year tenure with the New 
York State Metropolitan Transportation Authority. He served as 
Chairman of two committees during this time: Safety and 
Security as well as Planning and Real Estate. The MTA runs on a 
$9 billion budget; is responsible for seven bridges and tunnels 
and provides 2.4 billion rides a year through buses, subways, 
or ferries in the State of New York and the City of New York.
    Jim took on many projects during his decade-long service at 
the MTA. He advocated for an automatic fare collection system 
which resulted with the usage of Metrocards on subways, which 
replaced the burdensome tokens. As Chair of the Safety 
Committee after the September 11, 2001 terrorist attacks, he 
reviewed and upgraded MTA's security policies. He personally 
guided more than $600 million through in new security projects 
which helped restore the confidence of riders in MTA safety.
    As the Chairman of the Real Estate and Planning Committee, 
he oversaw the $190 million Grand Central Terminal restoration 
project. Wow. Jim also served as spokesman last year for the 
project to convert a former Upper West Side rail yard into a $2 
billion convention center and stadium. Jim is no stranger to 
large transportation projects.
    He has served as a member of the New York State Job 
Development Authority, which provides long-term loans and 
guarantees to aid businesses relocating, expanding, and 
improving employment opportunities in the State of New York. As 
you mentioned, Mr. Chairman, Former New York City Mayor Rudy 
Giuliani appointed Jim as an honorary Deputy Police 
Commissioner for the New York City Police Department. He has 
received numerous citations from the Police Department and the 
Patrolmen's Benevolent Association for his support.
    He has served also as Chairman of the Board of the Staten 
Island Chamber of Commerce, Vice Chairman of Snug Harbor 
Cultural Center, Staten Island University Hospital, St. 
Vincent's Hospital and on the boards of numerous other 
nonprofit organizations. He has received proclamations from 
former U.S. Representative Susan Molinari and the New York City 
Council for civic leadership.
    He graduated magna cum laude from St. John's University 
with a B.S. in managerial science and economics. He is a member 
of the National Honor Society of Economics and the National 
Business Honor Society. He is also a 1995 alumnus of the 
Rockefeller Fellowship Program and a 1996 fellow of the Johns 
Hopkins University School of Advanced International Studies for 
its British-American Project.
    Jim also is a licensed multiengine, instrument-rated pilot 
and flies both prop and jet aircraft. He is one of the most 
qualified people I have ever run across for public service, Mr. 
Chairman and Senator Sarbanes, and it is my pleasure to 
introduce to the Committee my friend and a great public 
servant, Jim Simpson.
    Chairman Shelby. Thank you.
    Senator Schumer.

            STATEMENT OF SENATOR CHARLES E. SCHUMER

    Senator Schumer. Thank you, Mr. Chairman, and I join my 
good friend Senator Cleland, who has every one of our respect 
for just not only his service both in the armed forces and in 
the Senate but also just by being a great human being, so thank 
you for being here, Max, and it is great to see you.
    And I, too, join with him. I am delighted and proud to 
introduce, along with Senator Cleland, James Simpson, former 
MTA Authority Board Member, Staten Island business leader, and 
now nominee to be the next Administrator of the Federal Transit 
Administration.
    I know that Jim will do a great job at the FTA and 
recommend his nomination wholeheartedly. We have a few things 
in common. We were both born in Brooklyn. But a good number of 
Brooklynites moved to Staten Island. Some of us stayed in 
Brooklyn; here I am, there he is, but we do share common bonds 
as New York City people through and through.
    He graduated from St. Johns University and is even a member 
of the Staten Island Country Club. Everything about Jim is New 
York, and that is why I know he is going to do a great job 
among other things.
    [Laughter.]
    I hope that does not jeopardize his nomination with 
everyone else.
    [Laughter.]
    Jim worked his way up from being a driver at Victory 
Worldwide Transportation to serving as President and/or CEO for 
the last 20 years. The company started with only a few trucks, 
operating out of a storefront on Staten Island, and now, 
Victory is a worldwide transportation service provider and an 
economic engine for Staten Island and the whole city.
    Jim will bring that Staten Island tough, no nonsense 
dedication to a job that is critical for the Nation's economy. 
New York, of course, is one of the economic engines of the 
country, and Jim, in no uncertain terms, kept the trains and 
trucks running on time. Jim served on the MTA Board for more 
than a decade. He was an active member of the New York City 
Transit Authority Committee, which oversees the city's subways 
and buses; was Chairman of the Safety and Security Committee in 
the aftermath of September 11, so he has a good background in 
homeland security as well, which obviously is very important 
when you are dealing with our rails.
    Jim has been a New York City transportation leader, in 
short, for more than 20 years. During his tenure as an MTA 
Board Member, he had oversight over management and operations, 
budgets, capital programs, and as I said, worked with the MTA 
police to develop and implement new security plans after 
September 11 for what is by far the largest mass transit system 
in the country.
    He served as a member of dozens of organizations, Chairman 
of the Staten Island Chamber of Commerce, which is one of the 
great business organizations in New York; I am supposed to 
speak before them in a week or so, and the New York City 
Partnership and the New York State Job Development Authority.
    So in short, Jim has gained a unique knowledge of how 
essential, safe, fast, and easily accessible transportation is 
to local communities and to the economic growth of States, 
regions, and the whole country. I believe that--I am going to 
ask unanimous consent my entire statement--I have so much to 
say, because I think he is a good man.
    Chairman Shelby. Your entire statement will be made part of 
the record without objection.
    Senator Schumer. But in short, he is a thoughtful, 
knowledgeable, dedicated transportation official, and Jim, I 
look forward to working with you to make our Nation's mass 
transit systems the largest, safest, and most efficient in the 
world, should you be confirmed, which I hope you will be
    Chairman Shelby. Thank you, Senator Schumer.
    Senator Sarbanes.

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. Well, thank you very much, Mr. Chairman. 
I want to welcome our two nominees this morning. We commend 
their willingness to serve the public. First, Mr. Couch, we are 
pleased to have you here. You have been nominated to be 
president of the Government National Mortgage Association.
    Mr. Couch. Yes, sir.
    Senator Sarbanes. And we know you. You have been in the 
lending business for quite awhile, and of course, were 
President of the Mortgage Bankers Association, which led to a 
lot of interaction with this Committee, since the Mortgage 
Bankers are constantly before us with respect to policy 
discussions and deliberations.
    I know you have also been on the Federal Reserve Board's 
Thrift Advisory Council, as I understand it, and a Member of 
the Fannie Mae National Advisory Council and have taken an 
active role in your community in dealing with low income 
housing and homelessness, and I certainly commend you for those 
initiatives. Ginnie Mae has been now without a president since 
the end of 2004, if I am not mistaken.
    Mr. Couch. That is correct, Senator.
    Senator Sarbanes. So it went all of 2005 without a 
confirmed president.
    They do important work. I am going to explore some of it 
with you in the question period, but you certainly bring 
qualifications to the job and previous experience which is 
highly relevant to the work that you are now being called on to 
do.
    I also want to welcome Jim Simpson, who is being considered 
for the position of Federal Transit Administrator. I thank our 
former colleagues, Senator Cleland, for coming this morning to 
introduce you, Mr. Simpson. You will be leading the FTA, if 
confirmed, through a critically important period. We just 
passed the surface transportation law. It provides a record 
level of funding, a number of new requirements for the FTA, 
some new programs, including the transit and the parks program, 
which is one I have had a keen interest in; modifications to 
existing programs, all of which will now need to be put in 
effect.
    You are also going to be, and I am sure you appreciate 
this, the Nation's leading spokesperson for transit. I mean, 
you are the Federal Transit Administrator or will be, and of 
course, that is a very important aspect of the job. Your work 
on the Board of the New York Metropolitan Transit Authority 
obviously has exposed you to challenges facing our Nation's 
transit systems, and it is obviously quite relevant to the 
position for which you have now been nominated.
    So Mr. Chairman, I look forward to the hearing and then to 
the expeditious consideration of these nominees.
    Thank you.
    Chairman Shelby. Thank you, Senator Sarbanes.
    Senator Martinez, do you have any opening statement?

               STATEMENT OF SENATOR MEL MARTINEZ

    Senator Martinez. Mr. Chairman, I just wanted to say a 
couple of words in regard to the nomination for the new 
President of Ginnie Mae. I had, of course, as you know, the 
opportunity as Secretary of HUD to nominate someone to be the 
president of Ginnie Mae, and I was very proud of the work that 
Ronnie Rosenfeld did as President of Ginnie Mae, and I know Mr. 
Couch, and I know his fine background. I also believe it is 
important that--
    Chairman Shelby. You know where he is from, do you not?
    Senator Martinez. Yes, sir, I understand that he has a 
great lineage.
    [Laughter.]
    Senator Martinez. In fact, in the course of my work at HUD, 
I got to know Mr. Couch, and I know that he will do an 
excellent job, but I also, in addition, I just wanted to put a 
statement for the record.
    Chairman Shelby. Without objection, your full statement 
will be made part of the record.
    Senator Martinez. Thank you.
    I just wanted to highlight the fact that I believe a number 
of very important innovations were created by Mr. Rosenfeld 
during his administration. I hope you will take a good look at 
those and encourage them and further them, because I think what 
Ginnie Mae does is tremendously important to providing one more 
element to making housing affordable, to making mortgages 
possible, and I just really appreciate greatly the great work 
that has been done at Ginnie Mae, modernizing, moving forward 
in a very dynamic way, and I hope that you will very much 
continue in that path.
    I think we have an outstanding nominee, and I do believe 
that it would be important for the Senate to quickly confirm 
Mr. Couch to this important position, and I appreciate the 
Chair.
    Mr. Couch. Thank you, Senator.
    Chairman Shelby. Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman. And let me 
welcome Mr. Simpson and Mr. Couch here today and Max Cleland, 
who is a great hero, great friend, great inspiration to us all. 
Thanks, Max. It is always a pleasure to see you.
    I would like to put my statement in the record and make a 
few comments.
    Chairman Shelby. Without objection, it will be so ordered.
    Senator Reed. Mr. Simpson, we all recognize public transit 
is essential to millions of Americans, and not just in New York 
City but all over the country. And there are two issues that I 
think we have to emphasize at this hearing and in your tenure. 
First is the overall funding for transit and second, 
specifically funding for transit security.
    The President said, and we all agree, that we are addicted 
to oil. One of the best ways to kick the habit is to have good 
public transit, and that means spending money. Unfortunately, 
the President's proposal this year is $100 million less than 
what was proposed and authorized under SAFETEA. So one of your 
biggest challenges, if you are confirmed, and I suspect you 
will be, is to try to drive that money up so we can meet the 
objectives of the SAFETEA Act.
    And second, transit security: we have spent a great deal of 
money appropriately on airline safety, but if we all recall, 
the two major incidents since September 11 involved subway 
trains in Madrid and in London, and we have not done nearly 
anything with respect to surface transportation. We have only 
allocated about $250 million. We need much, much more, I do not 
think I have to tell you, being someone from New York City, and 
you have to work closer with Homeland Security. So you have 
huge challenges facing you, and I look forward to the 
questioning to get into detail.
    And Mr. Couch, again, it was a pleasure meeting with you, 
and I wish you well, and you have great experience coming into 
Ginnie Mae. The reality is affordable housing is just getting 
beyond everyone's grasp. In Rhode Island, to get an adequate 
two-bedroom apartment, you have to earn $18.42 an hour. That is 
way above minimum wage, even in Rhode Island, and how do we do 
that? And I think Ginnie Mae plays a critical role, because 
what you are doing is trying to ensure that households can 
finance affordable housing, and one of the goals of Ginnie Mae 
is to provide more affordable housing, and we will talk about 
it in the questioning.
    But I am pleased that we have this hearing and look forward 
to the witnesses' comments. Thank you, Mr. Chairman.
    Chairman Shelby. Thank you, Senator Reed.
    We will start with you, Mr. Simpson. Do you have any 
members of your family you want to introduce?
    Mr. Simpson. Yes, I do, Mr. Chairman. I have my wife, Trudy 
Simpson; my niece, Ashley Simpson; and my sister, Maria Simpson 
with us today.
    Chairman Shelby. You also have a couple of daughters, do 
you not?
    Mr. Simpson. I have two daughters that unfortunately are 
not with us today, but one has an illness, unfortunately, and I 
understand with our modern technology, they are somehow 
listening in, so they are here in spirit.
    Chairman Shelby. Mr. Couch, do you have anyone you want to 
introduce here?
    Mr. Couch. Yes, Mr. Chairman, I do.
    Behind me on my left is my daughter, Frannie, who is a 
senior in high school, and my wife, Anne, is to my other side, 
and like Jim, I have another daughter who is studying abroad. 
She is in Seville, Spain, and I think she is watching this on 
the Internet.
    Chairman Shelby. She probably is.
    Mr. Simpson, you proceed as you wish. You and Mr. Couch, 
your written testimony will be made part of the hearing record. 
You sum up what you want to say.

           STATEMENT OF JAMES S. SIMPSON, OF NEW YORK

                      TO BE ADMINISTRATOR,

                 FEDERAL TRANSIT ADMINISTRATION

               U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Simpson. Great. First, I would like to thank Senator 
Schumer for his kind remarks and just let the Senator and his 
staff know if confirmed, I would enjoy having the opportunity 
to work with him on many of the issues facing New York City.
    And second, I would like to thank my dear friend, Senator 
Cleland, who said we have only been friends for 10 years, but 
it is really 15 years, and he has been a true inspiration to me 
throughout my life.
    Chairman Shelby. He did not want to be 5 years older. Ten 
years sounds better.
    [Laughter.]
    Mr. Simpson. Okay; and he has been a true inspiration in my 
life, and I am proud to be able to call him my friend.
    And then, I would like to begin with my written testimony.
    Chairman Shelby. Go ahead.
    Mr. Simpson. Mr. Chairman and Members of the Committee, I 
believe one of the highest honors bestowed upon an American 
citizen is to sit before a U.S. Senate Committee for a 
confirmation hearing. I am both humbled and honored for having 
the opportunity to come before you today.
    I want to thank President Bush for having the confidence in 
me and nominating me to another post within the Department of 
Transportation. As you may be aware, I currently serve the 
President as a Member of the St. Lawrence Seaway Development 
Corporation Advisory Board. I would also like to thank 
Secretary Mineta for his support of me as Administrator of the 
Federal Transit Administration.
    Many of my life's experiences have had a profound impact on 
me as an advocate for public transportation. As the oldest of 
four children, growing up in New York City, I am keenly aware 
of how public transit impacts the lives and families of 
individuals. I have witnessed how public transit moves people 
who are economically disadvantaged from the home to the 
workplace. Transit made it possible for my mother to commute to 
Manhattan for employment, which enabled our family to move off 
welfare. Public transportation provided me with the opportunity 
to travel from home in Staten Island to school in Brooklyn and 
to work in Manhattan after school via five buses, one ferry and 
subway each day. Without a family automobile, I viewed 
affordable public transit as a necessity and as a vehicle that 
created a sense of freedom. Public transit opened a world of 
social and cultural diversity. It made summers possible at 
Coney Island, winters in Central Park, and it exposed me to 
Times Square, the Museum of Natural History, Yankee Stadium, 
the World's Fair, Chinatown, and Little Italy. All of these 
influences, fostered by public transportation, account for much 
of the reason I stand before this Committee today.
    As a business owner in the motor carrier industry for over 
25 years, I have experienced first hand the economics and 
social costs associated with insufficient public 
transportation. At one of my facilities on Staten Island, New 
York, a mere 15 miles from Midtown Manhattan, my vehicles and 
employees waste over four hours a day traveling to and from 
their job site during the morning and evening rush on 
Interstate 278, a commute that is only a half hour each way off 
peak. An expanded public transit system can help mitigate 
highway congestion, lower travel time, and increase 
productivity and profitability for our Nation's businesses and 
individuals alike.
    Additionally, in 1995, as you know, I was appointed by 
Governor Pataki as a Commissioner and Member of the Board of 
Directors of the New York State Metropolitan Transportation 
Authority, which exposed me to a decade of oversight of large-
scale, extremely complex transit systems.
    If confirmed as FTA administrator, I will work diligently 
with all of the stakeholders to foster economic development, 
enhance mobility and accessibility in rural and urban 
communities alike, reduce traffic congestion, and strengthen 
the safety and security of the Nation's transit systems through 
cost-effective spending on public transportation.
    I have made public service an integral part of my life, as 
I believe it is should be an endeavor undertaken by all 
responsible businesspeople. Serving our country and the 
President is an immense privilege and honor, and if confirmed, 
I would apply my knowledge and skills to the successful 
management and advancement of our Nation's transit systems. If 
confirmed, I would work tirelessly with this Committee, the 
Congress, and other stakeholders to ensure that all people 
across this great Nation are well-served by a safe, cost-
effective, and reliable public transportation system.
    Thank you.
    Chairman Shelby. Mr. Couch.

            STATEMENT OF ROBERT M. COUCH, OF ALABAMA

                        TO BE PRESIDENT,

            GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

    Mr. Couch. Chairman Shelby, Ranking Member Sarbanes, and 
distinguished Members of the Committee, I want to thank you for 
the opportunity to appear before you today. I also want to 
thank you, Mr. Chairman, for the kind words of introduction, 
and thank you to all of the Members of the Committee and their 
staffs who have met with me over the past month. Those meetings 
have helped me gain important insights into the position for 
which I have been nominated.
    My wife, Anne, who is with me here today, and I are 
extremely fortunate. We own the home in which we have lived for 
the last 18 years. Not everyone in this great country can say 
that. When we initially tried to borrow money to buy our first 
home, we were turned down. Luckily, we had a supportive family 
that was willing to back us, and we became homeowners. Other 
aspiring homeowners may not be as blessed. The job for which I 
have been nominated, the presidency of Ginnie Mae, has the 
potential to help those families achieve the dream of owning 
their very own home.
    I believe deeply in the power of homeownership, as do 
President Bush and Secretary Jackson. When a family owns the 
home in which it lives, it has a stake in the community, which 
in turn leads to more community involvement and more community 
investment. Homeownership is also perhaps the best vehicle we 
have today for building personal wealth.
    The mission of Ginnie Mae is to ``expand access to 
affordable housing in America by linking the global capital 
markets to the Nation's housing markets.'' We have seen 
homeownership grow in recent years, with a record level of more 
than 69 percent in 2005, and we have seen the gap between 
minority and nonminority homeownership levels shrink. Still, 
there is plenty of room left for improvement. Working with its 
partners at HUD, the Veterans Administration, and USDA's Rural 
Housing Program, Ginnie Mae continues to play a vital role in 
keeping America's homeownership rate going in the right 
direction. If confirmed, I am committed to do all that I can to 
help Ginnie Mae fulfill this important mission.
    Shortly after taking office, President Bush challenged the 
Nation to create 5.5 million minority homeowners by the end of 
the decade. Since the announcement of that goal, 2.4 million 
minority families have joined the ranks of homeowners.
    To fully realize the President's goal, the secondary 
mortgage markets, and particularly the markets for mortgages 
secured by homes of low-to-moderate income families must 
continue to operate efficiently. Ginnie Mae has been an 
indispensable element in the housing finance sector since its 
inception in 1968, and Ginnie must continue to play an active 
role in the future.
    I recognize that not everyone in this country is able to 
own a home, but everyone should have access to affordable 
housing. While most of Ginnie Mae's efforts are focused on 
securitization of single-family mortgages, a growing area is 
the securitization of FHA multifamily loans. If confirmed, I 
will continue to look for creative ways to improve the market 
for multifamily securities.
    Mr. Chairman, I am very appreciative of the trust that the 
President and Secretary Jackson have placed in me by nominating 
me for the post of Ginnie Mae President. I am hopeful that the 
Banking Committee and ultimately the full Senate will look 
favorably on my nomination.
    I would be pleased to answer any questions you might have.
    Chairman Shelby. Thank you, Mr. Couch.
    Mr. Simpson, I will start with you for the record. In 
November of last year, the Committee successfully reported the 
Public Transportation Terrorism Prevention Act of 2005. It 
currently awaits action on the Senate floor. This is a top 
priority for the Committee, and many of us share the belief 
that the Administration is not doing enough to protect the 
transit riding public.
    You know what happened in London back in the----
    Mr. Simpson. Yes, sir, I am well aware of what happened in 
London, Madrid, and Tokyo.
    Chairman Shelby. And you have to have some concerns.
    Mr. Simpson. Excuse me, sir?
    Chairman Shelby. You will have to have some concerns in----
    Mr. Simpson. Yes, I do.
    Chairman Shelby. What is your feeling about the role that 
the Federal Transit Administration should play in securing U.S. 
transit systems?
    In other words, in what areas should FTA focus their 
security efforts?
    Mr. Simpson. It is my understanding that the Department of 
Homeland Security has the primary responsibility for security.
    Chairman Shelby. They do.
    Mr. Simpson. However, I believe there is room at the table 
for everybody, and it is up to the leadership to determine how 
far we need to go with security.
    Chairman Shelby. You are not going to be silent if you are 
confirmed, assuming you are confirmed, and I believe you will 
be.
    Mr. Simpson. If confirmed, I can assure you that I will not 
be silent in the area of security.
    I have a basic understanding of security, and security is 
very important to me. When I first joined the MTA 10 years ago, 
I was offered a variety of leadership roles, and I chose the 
Safety and Security Committee because of my natural inclination 
toward safety and security.
    Chairman Shelby. How many people, in your best judgment, 
are riding transit, subways, trains every day to go to work?
    Mr. Simpson. In New York alone, it is over 8 million a day, 
and nationwide, it is 9 billion a year.
    Chairman Shelby. Nine million?
    Mr. Simpson. Nine billion rides.
    Chairman Shelby. Nine billion?
    Mr. Simpson. Yes.
    Senator Sarbanes. A year.
    Chairman Shelby. A year.
    Mr. Simpson. A year.
    Chairman Shelby. And that is cumulative.
    Mr. Simpson. Yes.
    Chairman Shelby. That is in the aggregate, nine billion 
people. Do you know how much money has been spent for security 
there compared to airports?
    Mr. Simpson. I have read that it is somewhere about a 
penny, or it is a very low number relative to what has been 
spent elsewhere.
    Chairman Shelby. Does that concern you at all?
    Mr. Simpson. I do not know if it concerns me, only 
because----
    Chairman Shelby. What did you say?
    Mr. Simpson. Having not served as the Administrator of the 
FTA, I do not have all the facts, and I do not have the 
information available to really tell what is appropriate and 
what is inappropriate. But if confirmed, that would allow me 
the opportunity to meet with the other departments to get a 
better understanding of how much and what the appropriate 
levels of funding are.
    Chairman Shelby. Do you believe, or do you have a judgment, 
that our subways, buses, and everything are safe from terrorist 
attacks today?
    Mr. Simpson. I believe that this country is doing the best 
that it can with the resources that it has, and I do not know 
what the correct level is, but I can assure you that if 
confirmed by this Committee, I will work tirelessly to be an 
advocate for safety and security.
    Chairman Shelby. I hope this never happens, but it could. 
But if what happened in London happens in New York? What then?
    Mr. Simpson. That would be a very dark day for this country 
if it happened.
    Chairman Shelby. It would be. It would be.
    Mr. Simpson, the 2006 budget for Amtrak directed the 
Secretary of Transportation to assess a fee on the commuter 
rail agencies in the Northeast Corridor. Are you familiar with 
that?
    Mr. Simpson. Yes, I am.
    Chairman Shelby. We have heard concerns from the transit 
agencies that operate commuter trains on the corridor that this 
may be an attempt to redirect scarce Federal transit assistance 
from transit agencies to the mismanaged, I believe mismanaged 
Amtrak.
    Can you assure the Committee that if confirmed, you will 
work to assure that commuters are fairly treated in the process 
of developing a formula to arrive at a fee and then the process 
of actually assessing the fee?
    Mr. Simpson. Mr. Chairman, it is my understanding that this 
lies in the domain of the Federal Railroad Administration, and 
the FTA is more of a facilitator. But with my past experience--
--
    Chairman Shelby. But as a facilitator, you would have a 
voice, would you not?
    Mr. Simpson. Absolutely, I would have a voice, and as 
someone who served in an operating level at the MTA and 
understanding the tight cost constraints that we are under to 
operate, every transit authority has a budget, and things are 
very tight as we all know, that this is a major issue for the 
Northeast corridor and the transit systems.
    I can assure you that if I am confirmed by this Committee 
and by the Senate, that I will work to resolve this so that all 
the transit agencies are treated equitably.
    Chairman Shelby. Mr. Couch, a few questions for you, sir.
    Mr. Couch. Yes, sir.
    Chairman Shelby. The importance of strong accounting; you 
are a CPA by background and an attorney and businessman; I 
understand that.
    Mr. Couch. Yes, sir.
    Chairman Shelby. Other financial institutions engaged in 
mortgage securitization have experienced a variety of 
shortfalls in their accounting. You are very familiar with 
this.
    Mr. Couch. Yes, sir.
    Chairman Shelby. I believe your background in accounting 
can make a vital contribution to Ginnie Mae.
    Secretary Martinez, we still call him that, Senator, too; 
we would rather have him up here than down there and he is very 
involved in these issues. He knows these issues. He has worked 
with these issues, and I know he will be outspoken on this.
    But while we all hope that the accounting at Ginnie Mae has 
been strong, have you had an opportunity yet to examine Ginnie 
Mae's financial systems and statements? Do you believe a strong 
accounting system should be a high priority for Ginnie Mae?
    Mr. Couch. Senator, I can answer your last question first, 
and the answer is yes. Accounting systems in all entities are 
very important.
    Chairman Shelby. They tell the truth of what is in the 
portfolio, what is going on, do they not?
    Mr. Couch. Yes, sir, they do.
    Chairman Shelby. If the accounting is honest and accurate.
    Mr. Couch. Yes, sir, they do, and under the Sarbanes-Oxley 
bill and those accounting standards have been strengthened, 
particularly internal controls. I can tell you it was important 
to me in my past job; if confirmed, it will be important to me 
in my future job. I think it is important to draw a 
distinction, however, between Ginnie Mae's business model of 
Fannie Mae and Freddie Mac, for instance.
    Chairman Shelby. Tell us a little about that.
    Mr. Couch. Currently, Ginnie Mae does not buy loans or 
securities for its own balance sheet, and many of the 
accounting issues that have been in the headlines lately at the 
other entities have had to do with the accounting for the 
hedges that were placed on the balance sheet to address 
interest rate risk.
    Chairman Shelby. What they have kept in their portfolio.
    Mr. Couch. Yes, sir; if you have those assets on your 
books, you subject yourself to some interest rate risk, and 
that leads you to putting hedges on your books to counteract 
the interest rate----
    Chairman Shelby. And Ginnie Mae is not doing that.
    Mr. Couch. No, sir; no, sir. We do not have those assets on 
our books. If confirmed, we would not have those on our books. 
Ginnie Mae currently does not have those assets on its books.
    Chairman Shelby. But you are going to look closely at the 
accounting system once you get inside.
    Mr. Couch. Yes, sir. It is my understanding that that 
process is already underway. It is not a process, though, I can 
tell you, that ever has an end to it. You constantly have to be 
looking at your internal controls and making sure that 
everything is in place.
    Chairman Shelby. The asset portfolio, I understand that 
while Ginnie Mae guarantees almost $500 billion in outstanding 
mortgage-backed securities, Ginnie Mae's balance sheet assets 
are only about $11 billion, three-fourths of which are in the 
form of U.S. Treasuries.
    Ginnie Mae has met its mission of providing liquidity to 
the mortgage market with a minimal portfolio of balance sheet 
assets. Do you see any reason to change Ginnie Mae's business 
practice of maintaining a small portfolio of assets?
    Mr. Couch. At this point, no, Senator, I see no need to do 
that. I think Ginnie is serving its mission well at this point.
    Chairman Shelby. Do you believe there is anything to the 
idea that a small portfolio relative to its business activity 
has hindered the ability of Ginnie Mae to meet its mission? Do 
you believe it has met its mission?
    Mr. Couch. I do not believe that it has been hindered in 
meeting its mission, and I do believe that it is currently 
succeeding in that mission, yes, sir.
    Chairman Shelby. Thank you.
    Senator Sarbanes.
    Senator Sarbanes. Thank you very much, Mr. Chairman.
    Mr. Couch, why do we not continue along, and then, I will 
come back to Mr. Simpson.
    Mr. Couch. Yes, Senator.
    Senator Sarbanes. A couple of questions I am going to put 
to you are really directed more toward HUD procedures more 
broadly, and I just want some assurances of how you will be 
dealing with matters within your own particular bailiwick.
    We have had some history of difficulty in getting data from 
HUD. For instance, in the past, we have had to ask repeatedly 
for data regarding the Section 8 program, and of course, 
without the data, we cannot do our oversight or understand what 
is happening in the program. It seems now that finally, we have 
resolved that problem, and we are expecting some new Section 8 
data shortly. But we have had a lot of trouble in the past.
    So let me ask you right at the outset: Do we have your 
commitment to provide data on Ginnie Mae to the Committee or 
Members of the Committee on a timely basis?
    Mr. Couch. Yes, sir; if confirmed, that would be a 
priority, yes, sir.
    Senator Sarbanes. Yes; thank you very much.
    Just to give an example, when the Secretary was here and 
testified on Hurricane Katrina about a month ago, we submitted 
questions for the record the following week. We have not yet 
received answers to those questions, and they are relevant to 
the emergency supplemental with respect to the Gulf Coast. That 
is not a question. I am just making that observation.
    Now, I am looking here at the annual report of Ginnie Mae, 
and it says Ginnie Mae produced a net revenue in fiscal 2004 of 
$737 million. And they indicate they earned $815 million, some 
in fees, some in interest income, and then, they had operating 
expenses, they had some default advances, most of which were 
recovered. So the end result was a net revenue of $737 million.
    Despite this, the Administration in the 2007 budget just 
submitted to the Congress proposes to double the guarantee fee 
to Ginnie Mae lenders from 6 to 12 basis points. And they state 
that the purpose of this fee increase is to pay for Ginnie 
Mae's administrative costs. So obviously, the question that 
comes to mind is why increase the fees if the costs are already 
being met out of the very substantial profits of Ginnie Mae? 
And in fact, they are making, in effect, a contribution to the 
Treasury of well over $700 million.
    Now, you know, our concern is the fee increase will 
increase the cost of homeownership, maybe incrementally but 
nevertheless. So it is particularly puzzling that we have this 
request to, in effect, double the guarantee fee when Ginnie Mae 
is already producing far more than it is costing. How do you 
explain that? Do you have any observation on this issue?
    Mr. Couch. Yes, Senator, and at the outset, I would like to 
express appreciation for you pointing out that we do make a 
contribution to the tune of $730 million.
    It is a distinction that really is not much important, the 
proposal is not to double the guarantee fee, but it is to 
assess an additional fee of 6 basis points, as you point out, 
that would be designed to recoup the costs of Ginnie Mae, and 
it is a deficit reduction proposal. It would generate about $54 
million for the budget, reduce the deficit, and it is, in some 
ways, I guess, a recognition of the fact that in order to 
balance the budget, there are difficult decisions that have to 
be made.
    Now, I would be less than honest with you if I did not tell 
you that that 6 basis points will make the program less 
competitive in the marketplace, and it will make our challenge 
of reversing the market share decline that Ginnie has seen in 
the past few years, it will make that challenge a little more 
difficult. But there are going to need to be difficult 
decisions made in all areas of Government, I think.
    Senator Sarbanes. Well, that leads me to my next question. 
Actually, it is a very nice lead-in. Ginnie Mae guarantees 
pools of FHA and VA mortgages, correct?
    Mr. Couch. Yes, sir, and rural housing as well.
    Senator Sarbanes. Your securities carry the full faith and 
credit of the U.S. Government.
    Mr. Couch. Yes, sir.
    Senator Sarbanes. But FHA is a small and declining share of 
the marketplace. In 2003, FHA was 9.2 percent of the 
marketplace. In 2004, it dropped down to 4.1 percent. So, I 
mean, the obvious consequence of that is that Ginnie Mae's 
business is also declining. In 2004, Ginnie Mae helped support 
about 1.3 million housing units. In 2003, it was 2.4 million 
housing units.
    I mean, it is a drop of almost 50 percent. What is the 
explanation for this?
    Mr. Couch. Senator, I cannot speak for FHA Commissioner 
Montgomery, but I think he has publicly stated that it is his 
goal, and Secretary Jackson has stated publicly as well that it 
is his goal that FHA take the steps that are necessary to 
modernize the programs and try to reverse that slide in market 
share that you just referred to.
    Now, I am not suggesting that market share for market 
share's sake is important, but I do believe that there is an 
important role for FHA to play and that Ginnie Mae's fortunes, 
as you point out, are tied to FHA and VA's fortunes. It is 
interesting to note that African-American families, for 
instance, are twice as likely to choose FHA or VA programs over 
conventional programs, twice as likely as non-Hispanic whites.
    But the thing that is disturbing to me is that African-
American families are three times more likely to choose 
subprime programs than non-Hispanic whites. So there is 
clearly, in my view, a continuing role for FHA. If confirmed, 
my plan is to try and do everything to help, everything I can 
do to help Ginnie Mae provide support to FHA in turning that 
market share slide around.
    Senator Sarbanes. Yes; the added fees that we just 
discussed, though, will make that problem even more difficult, 
will they not?
    Mr. Couch. As I mentioned before, it will increase the 
challenge, yes, sir.
    Senator Sarbanes. Now, my time has run out, so I am going 
to defer and get to Mr. Simpson on the second round.
    If I could put one final point to you, Mr. Couch, and then, 
I have really concluded my questioning of you. This is not 
directly related to the Ginnie Mae program, but it is an 
indication of the importance that I attach to an open and 
transparent regulatory policy.
    Let me just tell you something that has happened at HUD. 
For a number of years, HUD has followed a policy articulated in 
a series of HUD notices issued from 2002 to 2005 establishing 
the subsidy amounts for project-based vouchers attached to tax 
credit projects. A proposed rule on project-based vouchers 
published in March 2004 adopted the policy put forth by these 
notices.
    Unfortunately, a final rule was published on October 2005 
reversing the longstanding policy. Now, putting the substance 
aside, I mean, which is very important obviously, but the 
concern I want to underscore is making a significant policy 
change without ever subjecting the new policy to a public 
review. In other words, we are going on along one path. That is 
where we have been; that is where we were continuing to go; 
that is what everyone's assumptions were, and then, all of a 
sudden, in the final rule, it completely switched.
    I have written the Secretary, asking him to withdraw this 
portion of the rule and to reissue it as a proposed rule, 
thereby subjecting it to full notice and comment in the 
rulemaking period. I mean, if you are going to turn at a sharp 
angle on this, it seems to me you should put it back out there 
and let all of the interested parties have an opportunity to 
comment on it. That is how we try to make good policy.
    I mean, this is not your issue, except I would hope that in 
conducting the affairs of Ginnie Mae, you are sensitive to the 
requirement of transparency, public notice, opportunity for 
people to have their input into the decisionmaking. I think the 
consequence of that is you get better decisions, and I 
certainly think you get more of a buy-in by all interested 
parties in terms of the end result. So, I commend that to you, 
and hopefully, the message will get back to the Department 
through you or through others present at the hearing.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Martinez.
    Senator Martinez. Mr. Couch, I just want to touch on a 
couple of issues. Certainly, the issue of homeownership that 
you mentioned, I think, in a very appropriate way in your 
opening remarks and the issue of affordability of housing, 
which continues to be a challenge. In Florida today, we have a 
situation which is even worse than it was a couple of years ago 
in terms of housing affordability, particularly in the 
aftermath of the recent storms that we have seen over the last 
couple of years, which has really taken out of the marketplace 
an awful lot of, frankly, marginal housing but which today is 
not available at all, particularly in rural areas, farm worker 
housing. And then, but just in general, just the affordability 
issue is a huge problem for Floridians.
    I wanted to ask you, and I know the role that Ginnie Mae 
plays in making housing more affordable, but I wanted to ask if 
there was any thought you had given to ways in which you might 
weigh in on this issue. One of the ways in which I attempted 
last year was by introducing a bill which would make employer-
assisted housing programs to be eligible for tax credits so we 
could generate more housing with the assistance of employers, 
talking about down payment assistance, closing cost assistance, 
things of this nature.
    What do you think you can do in the area of affordability? 
What can Ginnie Mae do to be more proactive in the area of 
housing affordability, bringing about homeownership to more 
Americans?
    Mr. Couch. Sure. Thank you, Senator, and I am well aware of 
your record as HUD Secretary and the efforts that you made to 
modernize programs and expand HUD's role in providing more 
affordable housing.
    As we discussed, Senator Sarbanes and I discussed, the 
fortunes of Ginnie Mae rest in large part with the fortunes of 
FHA. But the encouraging news on this front is that while the 
market share, Ginnie Mae's market share in the single family 
world has declined, our multifamily program has continued to 
grow, and if confirmed, it would be my intent that we continue 
to put emphasis, look for creative ways to bundle mortgages to 
make the flow of capital less costly and therefore make 
affordable housing more reachable.
    Senator Martinez. How have you shifted to more of the 
multifamily from the single family? And I recall that that was 
already a trend that we had seen in terms of Ginnie Mae 
financing. What do you think is responsible for that trend, and 
how can that continue?
    Mr. Couch. Senator, I am not really fully versed in the 
changes that have been made in the FHA programs. I am familiar 
with the fact that the FHA programs have become more attractive 
in the marketplace than they were, and naturally, Ginnie's 
business picks up as a result of that. I can tell you that we 
have looked at a number of new structures, financing 
structures, at Ginnie Mae to make the market more receptive to 
Ginnie Mae securities that are made up of multifamily loans.
    Senator Martinez. On the accounting issue, which I know 
Senator Sarbanes raised, I frankly do not think there are any 
parallels with what we have seen in the other GSE's with 
respect to the accounting irregularities that have been there. 
And you mentioned, I think, the use of derivatives as part of 
the portfolio as being one of the main distinctions, but also, 
I think the fact that you are not in the marketplace selling 
securities to individuals, do you not think that also makes a 
big difference in terms of how the two entities are marketed? 
And you know exactly the approach, which is quite different.
    Mr. Couch. Yes, it makes some difference, yes, Senator, but 
it is difficult to overstate how difficult the accounting 
issues are when you have large portfolios that are being hedged 
with derivatives. Coming from my background, we used 
derivatives to hedge our pipeline, our mortgage pipeline as 
well as some of the deposit products that we had. And the 
accounting world is in flux over--the policy is FAS 133; you 
have probably heard it in some of these hearings. The category 
is in flux.
    I remember when I went from being an accountant to being a 
lawyer, many years ago. At that time, in the accounting world, 
you always had a right answer. Every question had a right 
answer. You went to law school, all you had were good 
arguments. Used to be you had right answers in accounting. 
Increasingly in the accounting world, you have good arguments 
again, and that makes it difficult.
    As far as Ginnie Mae is concerned, Senator, I have not yet 
seen any issues that concern me, but if confirmed, I believe 
that vigilance is the watchword.
    Senator Martinez. Thank you.
    Mr. Simpson, my time is up, but I just--not a question, 
really, only a comment to you, and that is that in the State of 
Florida, we do not have a developed transit system like you 
have in your home State of New York, but I do hope in your 
tenure that you will take a good, hard look at what is a 
developing and a growing move toward transit. We have a many 
corridors in Florida which simply cannot handle any more normal 
expansion to the Interstates or vehicular traffic, and it 
really is incumbent upon us to look at ways in which we can 
partner with local governments, with the Federal participation, 
to create more transit opportunities in a fast growing State 
like the State of Florida, so I hope you will give that a very 
close look and a sympathetic look.
    Mr. Simpson. Senator, may I comment on that?
    Senator Martinez. Please.
    Mr. Simpson. I think you will be happy to know--I do not 
know if Senator Schumer would--I spent more time in Florida 
last year than I did in New York.
    Senator Martinez. Great.
    Mr. Simpson. I do have a home there.
    Senator Martinez. You were stuck in traffic, then.
    [Laughter.]
    Mr. Simpson. I-95 is atrocious. It is no different than 278 
in the morning. Not only am I stuck on it on a regular basis, 
but also once again, my vehicle is in the Florida corridor. It 
is just there is too much development, not enough public 
transit, and I am happy to say when I do drive in the Palm 
Beach County area that we do have that rapid transit system. I 
do not know how far south it goes to Miami, but we need more of 
that.
    And you can be sure that if confirmed, I would be more than 
happy to spend as much time with you as I could in the State of 
Florida, hopefully in the wintertime.
    [Laughter.]
    Senator Martinez. We welcome you. We would be glad to have 
you.
    Mr. Simpson. Thank you.
    Senator Martinez. Well, the I-4 corridor is another one 
that is equally dysfunctional, the Orlando to Tampa corridor, 
really the Daytona to Tampa corridor through Orlando but also 
the I-95 south of West Palm and south, it is really very 
difficult.
    Mr. Simpson. I-4, yes, the Orlando area.
    Senator Martinez. And, you know, that is only two 
highlighted areas, but I-75 South into Naples is a problem. Not 
all of them are amenable to transit, but the truth is that we 
have got to be looking at transit as a partial solution to the 
transportation problems.
    Mr. Simpson. Senator, I am very aware of Florida. I criss-
cross Florida regularly, all the cities with the exception of 
perhaps Jacksonville and Tallahassee. But I would enjoy the 
opportunity to work with you and your staff if confirmed.
    Senator Martinez. Thank you. That would be great.
    Chairman Shelby. Senator Reed.
    Senator Martinez. Thank you, Mr. Chairman.
    Senator Reed. Thank you very much, Mr. Chairman; thank you, 
gentlemen, for your testimony.
    Mr. Simpson, I associate myself with the Chairman's remarks 
about transit funding and transit security, and could you 
indicate what specific steps you could undertake with respect 
to transit security if you are confirmed?
    Mr. Simpson. I understand first of all that there is a 
memorandum of understanding between the Department of Homeland 
Security and the Federal Transit Administration. The first 
thing I would do if confirmed would be to take a look at that 
MOU and meet with my peers over at Homeland Security and 
Transportation Security Administration.
    And we are fortunate that the former Deputy Administrator 
of FTA is now, I believe, the Deputy at TSA, which I believe is 
a good thing for transit. But I think what I could bring to FTA 
in terms of transit security is my experience at an operating 
level for oversight. I am not a security expert, but I have 
been exposed to it on a regular basis. I can bring the insight 
of the day-to-day operator.
    And if you do not have a secure transit system, you will 
not have a ridership. After September 11, when we were quick to 
recover the system and get the trains rolling, we saw a big dip 
in ridership, and I think that was because of obviously the 
events of September 11. But ridership is at an all-time high in 
many areas, and my personal experience is in the New York area, 
where we are at 45 percent increase over 10 years in ridership.
    And that is because there is confidence that they system is 
safe and that the system is working effectively. There are a 
bunch of things that have been done in the area of prevention, 
in the area of deterrence, visible things like more police 
officers, dogs, just an awareness.
    And what FTA has brought to the table, and it has helped 
the New York City system so well, is programs like Transit 
Watch, see something, say something. There were early 
discussions at MTA, should we tell the ridership to be safe, be 
secure, and to look out for things? Because then, maybe, you 
are spooking the riders.
    And it is not so. It has worked out favorably, because as a 
pilot, I know myself, I have had a lot of experiences flying. 
Early on, when I did not have a lot of experience, I almost 
panicked. And then, with regular training, where you do not 
panic. And when people have an understanding of what the issues 
are and what the vulnerabilities are, I think they do feel at 
ease, and we have seen that at the MTA. We have a regular 
program where there are circulars that go out or any kind of 
media that we can see something, say something, and it is an 
ongoing process.
    I read that one system actually has auxiliary employees 
that if they get trained properly, they learn how to get on and 
off a train, cross the third rail; if they travel the route 
regularly, they are given some an ID so that it is known they 
are there in the event of an emergency.
    So if confirmed as FTA Administrator, I believe that with 
continued programs like that to work closely with the 
Department of Homeland Security, and if confirmed, then, to 
have an idea of, really, how far the Administrator of the FTA 
can actually go without overstepping the Administrator's 
bounds. And I think it is a job for everybody.
    Senator Reed. Thank you very much. Let me make just one 
point, and then, I want to address a question to Mr. Couch. And 
that is, you have pointed out ridership is increasing, and in 
my experience in Rhode Island to our public transportation 
system, bus RIPTA system; one of the fears I have with the 
underfunding you are seeing in the budget is just as ridership 
is going up, the resources to maintain the quality, maintain 
the schedule, maintain the training, maintain everything you 
have said is required will start evaporating, and you are going 
to be stuck with the problem of seeing those numbers go down.
    Mr. Simpson. Senator, I could not agree with you more. I 
think that the reason why New York and--I can only speak, 
really, for the New York experience, so pardon me if I 
continuously go back to New York, and I can assure you if 
confirmed, I am concerned about the entire country.
    Senator Reed. You will never go back again.
    Senator Sarbanes. New Yorkers always do that.
    [Laughter.]
    Chairman Shelby. What about Baltimore?
    Mr. Simpson. As you know, the New York system was falling 
apart, and I believe it was because of the efforts of this 
great Committee and ISTEA and TEA-21 and now SAFETEA-LU that we 
have had a continuous stream. We have seen a really big 
investment in capital. I mean, New York has--I do not know if 
you have been to New York City, but we have the greatest buses, 
the greatest subways, and it is a new system, and we have spent 
so much money on capital improvements. Without those capital 
improvements, you would not have the ridership.
    Senator Reed. Thank you very much, Mr. Simpson.
    Quickly, Mr. Couch, again, thank you for your testimony. 
And one of the points that you made is one I want to emphasize, 
and that is the affordable rental housing and what Ginnie Mae 
can do. Can you just, very quickly, because my time is all but 
gone, in 30 seconds, perhaps, just note what you might do to 
expand rental housing opportunities.
    Mr. Couch. Yes, Senator; again, we are somewhat at the 
mercy of the FHA. I know that the FHA Commissioner has plans to 
modernize several of the FHA programs.
    Within Ginnie itself, we are somewhat limited to tweaking 
the structures within the deals that are done with FHA and VA 
and rural housing under the multifamily program there, and I 
think the record is that Ginnie Mae has been pretty creative in 
coming up with new structures for those deals, and I would 
certainly, if confirmed, to continue that emphasis there.
    Senator Reed. Thank you very much, Mr. Couch.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you.
    Senator Allard.

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I have some opening remarks, 
and I ask unanimous consent that they be made part of the 
record.
    Chairman Shelby. They will be made part of the record 
without objection.
    Senator Allard. Welcome, Mr. Simpson and Mr. Couch.
    Let me start out with you, Mr. Simpson, and it has to do 
with having budgets or having projects started and completed on 
time and within budget. And I am one who writes my authorities 
in Colorado to say make sure that you get your budget, your 
figures are reasonable, and then make a firm commitment to get 
them done on time and on schedule. I do not think all Members 
of the Senate probably take that much interest in local 
projects, so we have to look to the Administrator.
    And so, my question to you, how important do you believe it 
is to keep projects on time and on budget, and what can the 
Federal Transit Administrator or Administration do to improve 
project performance?
    Mr. Simpson. Senator, first of all, I know that your 
project T-REX in Colorado is on time and on budget, and that is 
the way it should be. And I believe that the program will break 
down if you consistently have projects coming in over budget. 
You just cannot have that. You cannot budget; you cannot plan, 
and I do not know what mechanisms are in place now at the FTA, 
but I can assure you that if confirmed that I will work 
tirelessly to ensure that we are on time and on budget. And I 
do know that in reading the strategic plan of the FTA, they 
have a host of deliverables, and one of their deliverables is 
on time, on budget, or at least within 5 percent.
    So, I know that that is on the mark for the FTA leadership, 
and I can assure you that as in running a private business, you 
need to be on time. You need to be on budget, or else, you are 
not in business any longer. And I can assure you that I can 
bring my background as a businessman to the FTA to ensure that 
that does happen.
    Senator Allard. The other question I have also deals with 
performance, and I happen to be a strong believer in outcome-
based management, where you set specific goals and objectives, 
and then, you measure those. The Administration has instituted 
that program with what they call the PART program, and in what 
ways is FTA utilizing outcome-based management, both with the 
grantee, that is the one who is receiving the dollars, and as 
an institution? What are you doing within your own agency to 
meet those guidelines?
    Mr. Simpson. I am unfamiliar with that, Senator, but I do 
know that the President has a President's Management Agenda, 
the PMA. I do not know if that is what you are referring to 
where there are a host of deliverables and----
    Senator Allard. It probably is.
    Mr. Simpson. It is measurement. You know, as a businessman, 
I believe if you are not measuring, you are not managing.
    Senator Allard. Yes.
    Mr. Simpson. And you have to quantify things. When you can 
quantify things and express it in numbers, you know something 
about it, and if you do not, it is just nebulous. I mean, it is 
qualitative, and it is soft, and it is not accurate, and I 
think in an agency like the FTA, we need to be quantitative. It 
is about dollars and cents. The deliverables are pretty easy to 
see. The parameters should be easy, and if confirmed, I would 
spend as much time as I possibly can with the budget people and 
see how we were delivering these services, what measurement 
criteria we are using.
    I would also work with this Committee, because I am sure 
that your people have ideas on how this should be implemented 
and to see that we have a successful FTA.
    Senator Allard. I am a strong proponent. When we passed the 
legislation out of Congress, we had what was called the 
Government Performance and Results Act, and then, the 
Administration, I think has characterized it as PART; at least 
in the budget, that is what they describe as PART. And you may 
have another acronym that you are using within the agency, but 
basically, that is what we are talking about.
    And the President has gone and actually looked to see how 
various agencies are meeting these guidelines and in some cases 
not giving them the money that they think they should have, 
because they are not setting up their goals and objectives, and 
if they are, most generally, the agency does not bother to do 
it.
    And those agencies, actually, are getting a cut in the 
President's budget. So, I would encourage you to bring that 
kind of accountability if they are not doing it. And you can go 
into--there is a website, Expectmore.
    Mr. Simpson. Expectmore.gov, yes.
    Senator Allard. And they are listed on there, and I do not 
know whether you have any agencies that are listed under there. 
If you do, then, it would probably be a good idea to kind of 
get after them a little bit and say you need to get going on 
this program.
    Mr. Simpson. Well, in some of my readings, and it was in 
the material on the President's Management Agenda and also the 
management for or by results, it is a color-coded system by 
Department, all of the departments and their deliverables, 
where they are to date, going forward where they need 
improvement, and are they meeting those objectives? And it puts 
a lot of pressure on each--let us call it a business unit; each 
department is a business unit, and that is, I believe, that is 
how New York City turned around the crime in the City of New 
York. You had--I do not know how many precincts there were--
police precincts that were not managed.
    All of a sudden, under the Giuliani Administration, they 
decided to manage each precinct, and when each precinct was 
managed, everybody knew everybody else's score, and you saw the 
results in New York City. So, I think that same initiative 
should be carried forward here, and according to what I have 
read, it looks like a program, and I would like to be at the 
top of the heap with all--I believe it is green; if you have 
green dots, you are in good shape.
    Senator Allard. Good. I would like to move to Mr. Couch. My 
time has expired, Mr. Chairman. I wonder if I could have a 
little more time.
    Chairman Shelby. Go ahead. We are generous with you.
    Senator Allard. Thank you.
    Mr. Couch, I want to ask you the same thing on outcome-
based management for Ginnie Mae, if you are familiar with that 
and if you are utilizing that, and then, also in relation to 
that, I have heard from lenders that FHA's technology is 
extremely outdated, and various systems cannot communicate, and 
if you could also respond to that.
    Mr. Couch. Yes, Senator; since I have been a consultant to 
Ginnie Mae, I have learned several acronyms: GPRA, PART, PMA, 
they all, I have even learned that you can use them as verbs if 
you need to.
    [Laughter.]
    Ginnie Mae has not been PARTed yet. We think we will be 
PARTed this year. If confirmed, it would be my intent that 
outcome-based systems be stressed. That is my record from my 
previous job.
    Under my leadership, we put in place over a series of years 
programs where incentives were based on objective criteria. We 
came up with those plans at the beginning of the year. I sat 
down with my senior managers once a quarter and went through 
them. It was my hope that any one of my top managers could pull 
out his plan at any point in the year and figure out what his 
bonus would be at the end of the year if he kept on the track 
that he was on, so I am very much a fan of that.
    With respect to technology, Ginnie also has undertaken as 
part of that process or business improvement process, actually, 
a plan to wed all of its systems, update and wed all of its 
system into one comprehensive system that would talk--all 
pieces would talk to each other, and if confirmed, I would be a 
big proponent of making sure that that project continues. And I 
think the timeline has it complete, planned to be completed in 
June 2007, and I would hope that we could meet that deadline.
    Senator Allard. Mr. Chairman, thank you.
    Chairman Shelby. Thank you.
    Senator Allard. I thank the other Members of the Committee 
for their tolerance.
    Chairman Shelby. Senator Carper.

             STATEMENT OF SENATOR THOMAS R. CARPER

    Senator Carper. Thank you, Mr. Chairman.
    To our witnesses, welcome. We are delighted that you are 
here today, and thank you for your willingness to serve. I 
understand that you have each been joined by your spouses; is 
that correct? I understand each of you have been joined by at 
least one daughter; is that correct?
    Mr. Simpson. Not here. Listening.
    Senator Carper. And has one of you been joined by a sister? 
Okay; that is good. Daughter? And this young lady behind you, 
is she not a daughter?
    Mr. Simpson. That is my niece; I am sorry, Senator.
    Senator Carper. I just wanted to say to these young ladies, 
are you both students? I just wanted to say special thanks. We 
appreciate the spouses, especially your willingness to share 
your spouse with the people of America. But I would say to the 
young ladies that are here, thank you for your willingness to 
give up a day of school.
    [Laughter.]
    Ms. Couch. It was difficult.
    Senator Carper. Tough choice, I am sure.
    I am going to telegraph a pitch for Mr. Couch, the question 
I am going to ask you, and you can think about it. And then, I 
am going to ask Mr. Simpson a couple of questions relating to 
transit fees in the Northeast Corridor, capital improvements.
    But what I am going to ask you, Mr. Couch, if time permits, 
I wanted to ask you just to take, in a couple of sentences, 
explain the primary mission of Ginnie Mae, and then, just to 
tell me what you think they are doing particularly well and 
what Ginnie Mae is not doing so well and what you would do as 
its leader to get them back on the right track in those areas 
that they are deemed to be deficient by you. I believe 
everything I do, I can do better, and I think that is probably 
true of all of us, and it is true of the agencies that you have 
been nominated to lead.
    And just if you will think about that, Mr. Simpson, you 
have had a moment to think about capital improvements in the 
Northeast Corridor, and I understand that there was a notice in 
the Federal Register maybe earlier this month, and I think it 
provided for the FTA withholding transit funds from transit 
agencies that failed to pay any additional funds assessed by 
the Federal Railroad Administration for the maintenance of the 
Northeast Corridor.
    My part of the world, I actually rode the New York subways 
a couple of weeks ago, rode the Long Island Railroad; was very 
pleased with the service that we received. In my part of the 
world, we use SEPTA. We partner with Pennsylvania.
    Mr. Simpson. Right.
    Senator Carper. And trains runs right all the way from 
Newark, Delaware, right to the Maryland line. They go up 
through Delaware into Pennsylvania.
    And it is a partnership that is funded in part by the 
Federal Government and in part by the Commonwealth of 
Pennsylvania and in part by the great State of Delaware. And I 
just want to ask you to explain a little bit your understanding 
of this policy, and then, I want to ask you to think about 
whether this is an appropriate way to provide for greater 
capital funding in the Northeast Corridor. But what is your 
understanding of this policy?
    Mr. Simpson. I understand that this is from a 2006 
appropriations bill that instructed the DOT through the FRA to 
assess a fee for usage on track to help pay for capital and so 
on.
    Senator Carper. Yes.
    Mr. Simpson. And that the mechanism is still being worked 
out between the FRA and the FTA, and the FTA is a facilitator 
in the process and may withhold some funds, I believe, or may 
not grant the full funds if those amounts are not paid to, I 
believe, the FRA. That is the extent of my knowledge on that 
issue.
    Senator Carper. Okay; let me just share with you a 
situation we have got, and I will put on my hat as an old 
governor.
    We work on a fiscal year basis in Delaware, July 1 through 
June 30. A lot of States do that. SEPTA has a multiyear 
agreement with Amtrak to pay a cost for using the Northeast 
Corridor, I think through fiscal year 2011. And my concern, and 
I have not had extensive conversations with people from SEPTA 
or the Governor of Pennsylvania or Delaware, but my 
understanding is you have a situation with a multiyear contract 
between the commuter railroad, SEPTA, and with Amtrak where 
each year, the fee is set.
    The State of Delaware has passed a budget, Pennsylvania has 
passed a budget. They are providing support to SEPTA in 
accordance with the budget. And if the Feds step in, say the 
FRA steps in or the FTA steps in and says to SEPTA, by the way, 
you have to pay greater fees in order to cover this additional 
maintenance cost, even though you have a contract that goes 
through 2011 that says this is what your costs are, even though 
the States have already, through their budget process, 
allocated the money that they think SEPTA is going to need, it 
has the potential for creating, for lack of a better word, a 
train wreck, and I do not think that is what we want to do.
    Now that you have had a chance to think about this, my 
question of you is does this sound like a reasonable policy?
    Mr. Simpson. I am not certain, and I do not know enough 
about it, but if confirmed, I know that this is a high priority 
for the Northeast Corridor, not just with your State but all 
the way up the line, and budgets are very important to the 
authorities. They are working in tight budgets, the funding, 
all those issues. And now, to have this potential liability out 
there, it is a big issue.
    Once again, if confirmed, I would work with this Committee 
and the FRA and the other stakeholders to come to some 
resolution that would be appropriate for all parties involved.
    Senator Carper. All right; and Mr. Chairman, my time has 
expired; I do not know if I can go back to my original question 
to Mr. Couch and just ask him----
    Chairman Shelby. Go ahead.
    Senator Carper. Just give us a truncated version of a 
response: Primary mission of Ginnie Mae, let us just say what 
are they not doing as well as they might? Where do you see some 
area for improvement? How would you go about improving it?
    Mr. Couch. Sure, Senator, I will try to make it brief. 
Ginnie Mae's mission is to provide access to affordable housing 
by linking the global capital markets with the national housing 
markets. Overall, the program is running exceptionally well. 
There is a lot of respect for Ginnie Mae in the marketplace. It 
has a great team working over there to further that mission.
    I will give you two examples of things that I think, if 
confirmed, I could help on. One, I told you in the mission 
statement, it talks about the global capital markets. I do not 
think we have done a very good job internationally telling the 
central banks of other countries what great investment Ginnie 
Mae securities are, and we could perhaps improve the cost of 
capital in this country by making our case overseas.
    A second area which is, I think, illustrative of some of 
the demographic changes that are taking place in the country 
today, I spoke in my opening statement about how a home is the 
best vehicle today for building personal wealth. Well, that is 
great if you can get access to it. Ginnie Mae has an 
opportunity, the FHA has a great home equity conversion 
mortgage, a reverse mortgage that allows people who have built 
up a lot of equity in their home to extract that equity.
    Well, we at Ginnie Mae could do a better job, and this is 
underway, by the way; we are already having conversations about 
it, to securitize those mortgages and bring down the costs to 
Americans of extracting the equity back out of their home when 
they need it, generally after they are retired. So those are 
two examples.
    Senator Carper. Those are good examples. Thanks very much.
    And Mr. Simpson, we look forward to getting to know you 
better and really bearing down on the issue that I have raised.
    Thank you.
    Chairman Shelby. Thank you, Senator Carper.
    Senator Sarbanes.
    Senator Sarbanes. Thank you very much, Mr. Chairman.
    Mr. Simpson, in recent years, some members of the transit 
industry have raised concerns about program requirements being 
changed by the FTA without advance notice to stakeholders. This 
is a little bit along the lines of an issue I was discussing 
with Mr. Couch. For example, I understand this has happened on 
several occasions in the New Starts Program.
    Now, in response to that problem, the legislation we passed 
here in the Congress, the SAFETEA legislation last year, 
included language to encourage more transparency at FTA by 
requiring advance notice and an opportunity to comment on any 
FTA decision that imposes a binding obligation on grant 
recipients.
    If confirmed, what steps would you take to ensure that the 
substantive and procedural requirements of FTA's grant program 
are not changed in midstream without adequate notice to 
grantees?
    Mr. Simpson. Senator, if confirmed, I would ensure that we 
would not change the rules or the programs without adequate 
notice.
    My goal, if confirmed as Administrator, would be to 
implement SAFETEA-LU as written. And I would work with this 
Committee to make sure of that. Communication is very 
important. There are stakeholders, and this Committee is a very 
big part of that. You are the other side, and we are all in 
this together.
    And my personal philosophy would be to work with this 
Committee and inform them of everything I am doing before it is 
done, because we do not operate in a vacuum. It is very 
important that we all operate together.
    Senator Sarbanes. I am encouraged by that answer. I am even 
more encouraged by a statement you made in the course of it 
where you saw your responsibility as implementing--and these 
are your exact words--implementing SAFETEA-LU as written. It 
seems to me that that is your responsibility as the 
Administrator. I mean, your mandate is given to you by the 
legislation as passed by Congress, is that not true?
    Mr. Simpson. Yes, sir.
    Senator Sarbanes. Well, now, we are having some trouble 
down there with FTA, because there are a number of provisions 
in that legislation that they are not implementing. The 
Chairman and I brought that up at the hearing with the Deputy 
Administrator here. I hope you have had a chance to look at 
that transcript.
    Mr. Simpson. Yes, Senator, I took your advice, and I got my 
hands on the transcript, and I did read it.
    Senator Sarbanes. Okay.
    Mr. Simpson. Thank you.
    Senator Sarbanes. And we thought the agency would move in 
the interim to address those matters, but they have not yet 
done it.
    Now, this is a serious matter. I mean, you know, the agency 
people are not free to pick and choose what they want to 
implement out of the statute. And there, it seems to me, we are 
headed toward a real crisis and a confrontation if they do not 
carry out the provisions that were contained in that 
legislation. Otherwise, why do we pass this legislation? It 
cannot be ignored willy nilly.
    And the Executive Branch cannot pick and choose out of it. 
So this is quite a problem, and it really needs to be addressed 
or we are going to have a kind of stormy relationship here, Mr. 
Chairman. I just want to underscore that.
    Chairman Shelby. I agree with you, Senator Sarbanes.
    Mr. Simpson. I understand that, Senator. We have spoken 
about it. And I know this may not be the answer you want to 
hear, but if confirmed, I can assure you that I will work with 
you to see that things like that do not happen in the future.
    Senator Sarbanes. We can take care of this now. I mean, we 
are not quite to the future yet, so we can take care of the 
present, you see; that is what I am trying to get done.
    Well, Mr. Chairman, that, I think--oh, just one final 
point. I do want to commend to you the FTA's role in the Gulf 
Coast recovery. In New Orleans, the transit system was carrying 
125,000 people every day. They had a fleet of 375 buses and 65 
street cars. The Mississippi Coast Transportation Authority was 
carrying thousands, and these systems are in bad shape right 
now, and they need a lot of help.
    Now, you are working with FEMA, but FEMA's authority, 
apparently, to pay for operating subsidies is scheduled to 
expire. There is hardly any local tax base there to pick up, so 
we are going to have a real crisis coming in very short order, 
and I just commend that to your attention.
    Mr. Simpson. Thank you, Senator.
    Senator Sarbanes. Finally, Mr. Chairman, I would say both 
of these nominees have impressive records in the private 
sector, for which I commend them, not only in their businesses 
but also in terms of their community involvement, and you both 
now are going to positions in which there is a real opportunity 
to exercise some leadership. That is not the total picture, but 
within the big picture, you have a defined responsibility and a 
certain amount of authority to carry out that responsibility.
    And that can make a difference in the lives of our people, 
and I, for one wish you well, and I for one am prepared to move 
these nominees along, Mr. Chairman, and I thank both of you 
for----
    Chairman Shelby. As soon as we can.
    Mr. Simpson. Thank you, Senator; thank you, Mr. Chairman.
    Chairman Shelby. Thank you, Senator Sarbanes.
    I, too, want to thank you, Mr. Simpson, Mr. Couch, for your 
willingness to serve. We know you both have had great business 
careers, and we think you can use a lot of that talent and 
education that you have for the greater good.
    Thank you very much. We will move your nominations as soon 
as we can.
    Mr. Simpson. Thank you.
    Mr. Couch. Thank you.
    Chairman Shelby. The hearing is adjourned.
    [Whereupon, at 11:32 a.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of nominees, 
and response to written questions supplied for the record 
follow:]

                PREPARED STATEMENT OF SENATOR JACK REED

    Mr. Chairman, thank you for holding this hearing today. I want to 
welcome Mr. Simpson and Mr. Couch.
    Public transit is essential to millions of Americans who use it to 
commute to work and get to school, and it is a lifeline to many 
Americans who do not have access to a car. I look forward to hearing 
from Mr. Simpson about what he believes is the Federal Government and 
his role in working with Congress, public transportation organizations, 
and public transportation users.
    I briefly want to mention two issues that I believe need to be 
priorities for the Administration and Congress for transit--securing 
full funding for transit and increasing funding for transit security.
    In his State of the Union, President Bush said that America is 
addicted to oil. I could not agree more. In the United States, the 
transportation sector is the largest user of oil so transit is 
essential to ending our addiction and putting us on the road to energy 
independence. Unfortunately, the President's budget cuts the Federal 
Transit Administration's budget by $100 million below the level 
authorized in SAFETEA. With high gas prices facing Americans now and 
into the future, congestion on our roads, and more Americans riding 
transit, now is not the time to cut funding.
    I am also concerned with the Administration's funding for transit 
security. Subways, light rail, buses, and ferries are designed for easy 
access and to move large numbers of people. We know that transit 
systems and their riders are by their very nature prime terrorist 
targets.
    To date, the Federal Government has allocated only $250 million for 
transit security. We need a greater investment in transit security to 
protect the millions of hard-working Americans who take public 
transportation every single day. I urge FTA to work with the Department 
of Homeland Security to place a higher priority on increasing the 
security of our public transportation systems and work to ensure 
sufficient funds for this purpose.
    With respect to Mr. Couch's nomination to be President of Ginnie 
Mae, I would be remiss if I did not talk about the lack of affordable 
housing in this country.
    In my home of State of Rhode Island, a family must earn $18.42 per 
hour to afford an average two-bedroom apartment. For families to afford 
the average home, priced at $275,000 in Rhode Island, a family needs an 
income of $87,210 per year.
    In the last 6 years, home prices have more than doubled in Rhode 
Island, while incomes lagged, increasing a mere 6 percent. This 
situation is not unique to Rhode Island.
    For this reason, last year, I offered a proposal to create a 
National Affordable Housing Trust Fund. The Fund would be used to 
provide much-needed money for creative strategies to provide affordable 
housing.
    Indeed, at a time when we are debating a proposed cut of $622 
million to the HUD budget, and in an era where many teachers, 
firefighters, and police officers are paying more than half of their 
income on housing, we must use all available tools and innovative 
measures to increase the stock of affordable housing in this country.
    Ginnie Mae plays an integral role in this process. Acting as a 
guarantee for loans for low- and moderate-income families, Ginnie Mae 
enables many households to find and finance affordable housing. Without 
its guarantee behind FHA- and VA-insured loans, we would have an even 
greater affordable housing predicament.
    But, I believe Ginnie Mae could do more. I am anxious to hear Mr. 
Couch's proposals for increasing Ginnie Mae's affordable housing 
assistance, as well as the ways in which Ginnie Mae can increase 
affordable rental housing.
    Mr. Simpson and Mr. Couch, I look forward to hearing your remarks 
this morning. Thank you, Mr. Chairman.
                               ----------

                 PREPARED STATEMENT OF JAMES S. SIMPSON
        Administrator-Designate, Federal Transit Administration
                   U.S. Department of Transportation
                             March 14, 2006

    Mr. Chairman and Members of the Committee, I believe one of the 
highest honors bestowed upon an American citizen is to sit before a 
U.S. Senate Committee for a confirmation hearing. I am both humbled and 
honored for having the opportunity to come before you today.
    I want to thank President Bush for having the confidence in me and 
nominating me to another post within the Department of Transportation. 
As you may be aware, I currently serve the President as a Member of the 
St. Lawrence Seaway Development Corporation Advisory Board. I would 
also like to thank Secretary Mineta for his support of me as 
Administrator of the Federal Transit Administration.
    If confirmed, I would work tirelessly with this Committee, the 
Congress, and the other stakeholders to ensure that all people across 
this great Nation are well-served by a safe, cost effective, and 
reliable public transportation system.
    Many of my life's experiences have had a profound impact on me as 
an advocate for public transportation. As the oldest of four children 
growing up in New York City, I am keenly aware of how public transit 
impacts the lives of families and individuals. I have witnessed how 
public transit moves people who are economically disadvantaged from the 
home to the workplace. Transit made it possible for my mother to 
commute to Manhattan for employment, which enabled our family to move 
off welfare. Public transportation provided me with the opportunity to 
travel from home in Staten Island to school in Brooklyn and to work in 
Manhattan after school via five buses, one ferry, and a subway each 
day. Mobility through public transit contributed to the richness of my 
quality of life. Without a family automobile, I viewed affordable 
public transit as a necessity and as a vehicle that created a sense of 
freedom. Public transit opened a world of social and cultural 
diversity. It made summers possible at Coney Island, winters in Central 
Park, and it exposed me to Times Square, The Museum of Natural History, 
Yankee Stadium, The World's Fair, Chinatown, and Little Italy. It 
brought families together from diverse neighborhoods and communities. 
All of these influences, fostered by public transportation, account for 
much of the reason I stand before this Committee today.
    As a business owner in the motor carrier industry, I have 
experienced first hand the economic and social costs associated with 
insufficient public transportation. At my Staten Island, New York 
facility--a mere 15 miles from mid-town Manhattan--my vehicles and 
employees waste over 4 hours a day traveling to and from their job site 
during the morning and evening rush on Interstate 278, a commute that 
is only a half hour each way off peak. An expanded public transit 
system can help mitigate highway congestion, lower travel time and 
increase productivity and profitability for our Nation's businesses and 
individuals alike.
    If confirmed as FTA Administrator, I will work diligently with all 
the stakeholders to foster economic development, enhance mobility and 
accessibility in rural and urban communities alike, reduce traffic 
congestion, and strengthen the safety and security of the Nation's 
transit systems through cost effective spending on public 
transportation.
    My qualifications to serve as Administrator of the Federal Transit 
Administration derive from lifelong leadership roles in the 
transportation field, from my tenure at the Metropolitan Transportation 
Authority--the Nation's largest transit system--and from my experience 
as President of my own company, as well as from my personal interest in 
the aviation industry as a licensed jet and multiengine pilot.
    In 1995, I was appointed by Governor George E. Pataki as a 
Commissioner and Member of the Board of Directors of the New York State 
Metropolitan Transportation Authority, which exposed me to a decade of 
oversight of large-scale, extremely complex transit systems. For most 
of my two terms at the MTA, I simultaneously served as Chair of the 
Real Estate and Planning Committee, Chair of the Safety and Security 
Committee, Member of the New York City Transit Committee, Member of the 
Finance Committee, and Member of the Corporate Governance Committee. I 
have been exposed to a multitude of responsibilities and issues 
including oversight of MTA management and operations, budgets, 
financial plans, procurement contracts, capital programs, Federal and 
State grants, collective bargaining agreements, fare and toll changes, 
service changes, public hearings, disadvantaged business, and minority 
and women business enterprise plans and goals, corporate governance, 
conflict of interest issues, and safety and security issues.
    In the private sector, I have spent over 20 years running my own 
company. I believe my knowledge and experience in the realms of 
management, leadership, finance; planning and organization of my own 
company have prepared me for many of the challenges inherent in the 
administration of the Federal Transit Administration.
    I have made public service an integral part of my life, as I 
believe it should be an endeavor undertaken by all responsible business 
people. Serving our country and the President is an immense privilege 
and honor and, if confirmed, I would apply my knowledge and skills to 
the successful management and advancement of our Nation's transit 
systems.




        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 
                     FROM JAMES S. SIMPSON

Q.1. SAFETEA made a number of changes to the Capital Investment 
Grants program, including the creation of the Small Starts 
program. However, FTA has said that regulations are not ready 
to implement the new Small Starts program which was both an 
Administration and a Congressional priority. What is being done 
to ensure that regulations are issued in a timely fashion? 
Additionally, SAFETEA requires that the process of navigating 
the Small Starts process be simplified and streamlined, while 
still protecting the integrity of the process by maintaining 
the requirement that projects be cost-effective. Has the 
construction of a flexible process contributed to the delay in 
implementing the new program?

A.1. If confirmed by the Senate, I can assure you that I will 
make sure the process of issuing regulations is performed on a 
timely basis with adequate input from Congress, Members of this 
Committee, and other stakeholders. Additionally, I am not aware 
if creating a flexible process contributed to the delay in 
implementing the new Small Starts program, but can assure this 
Committee that, if confirmed, I will work to get the Small 
Starts program implemented as quickly as possible.

Q.2. A recent GAO report recommended that DHS and DOT work to 
evaluate the feasibility of maintaining an information 
clearinghouse of security best practices (both domestic and 
foreign) for U.S. transit agencies to learn from. Do you agree 
with the GAO's recommendations, and if so, how might FTA help 
facilitate the creation of a best practices transit security 
clearinghouse?

A.2. I believe DHS and DOT should work together to evaluate the 
feasibility of maintaining an information clearinghouse of 
security with best practices for U.S. transit agencies. I 
believe that by FTA assisting DHS, standards on transit 
security, some of which are recommended in the GAO report, 
could be established to benefit the entire public 
transportation system and its riders.

Q.3. If confirmed as the Federal Transit Administrator, what 
steps will you take to ensure that the safety and security of 
the transit-riding public from terrorist attacks? Would you 
advocate for a more active role for the FTA in carrying out the 
Federal responsibility of protecting riders and transit assets 
and infrastructure? Do you believe that the most appropriate 
Federal agency to handle transit security is the Department of 
Homeland Security or the Federal Transit Administration?

A.3. As I stated at my confirmation hearing, I look forward to 
learning more about how FTA can contribute to the fight against 
terrorism. It is my understanding that the TSA under DHS has 
the lead responsibility in the area of transit security. 
However, if confirmed, I pledge to work with this Committee, 
DHS, and other stakeholders to make public transportation as 
safe as possible from terrorist attacks.

Q.4. SAFETEA changed the funding of FTA's Job Access and 
Reverse Commute (JARC) from a discretionary grant program 
managed through FTA to a formula program providing funds to 
States and urbanized areas with a population of 200,000 or 
more. Given that the funds will be available to all States and 
urbanized areas with a population of 200,000 or more, how do 
you envision FTA will ensure that the States and urbanized 
areas provide grant funding at an appropriate level to help 
JARC projects be successful? And how do you anticipate FTA 
would evaluate the impact of this program? Will FTA make extra 
efforts to ensure that the projects funded with JARC monies go 
to those projects that have potential to be self-sustaining, as 
was Congressional intent when the program was first authored as 
part of TEA-21?

A.4. As a manager, I believe it is my goal to ensure all 
programs at FTA including JARC are successful. If confirmed, I 
would apply my past experiences to ensure successful 
implementation of FTA's plans and programs as intended in TEA-
21 and SAFETEA-LU.

Q.5. Administrator Dorn was strongly committed to improving the 
coordination of social services transportation provided by FTA 
grantees, and grantees of other Federal agencies like HHS and 
the Department of Labor. She created the ``United We Ride'' 
program to provide financial and programmatic support for this 
coordination. Subsequently, Presidential Executive Order 13330 
mandated that agencies work with the Interagency Transportation 
Coordinating Council to advance human service coordination.
    SAFETEA also contained a number of provisions designed to 
improve the ability of transportation providers to coordinate 
their services. These provisions include (1) allowing State and 
local grantees of DOT's Special Needs for Elderly Individuals 
and Individuals with Disabilities (5310), Job Access and 
Reverse Commute (5316), and New Freedom (5317) programs to use 
funds from other Federal programs for the required matching 
funds, thereby explicitly allowing and encouraging the 
coordination of Federal programs; and (2) requiring projects 
funded through the 5310 and 5317 programs to be developed 
through a coordinated transportation planning process that 
includes human service providers and the public.
    How successful have FTA's efforts been in improving 
coordination of social services transportation at the Federal, 
State, and local level? What challenges are service providers 
facing in using and complying with the SAFETEA provisions? If 
confirmed, what will you do to ensure that this important 
mandate is successfully carried out?

A.5. I am aware that FTA has been focused on improving 
coordination of social services transportation at the Federal, 
State, and local level. I am also aware that over 60 various 
governmental agencies are attempting to deliver various levels 
of specialized transit service to the riding public. With my 
background at the MTA and in managing my own interstate 
transportation company, I know firsthand the problems inherent 
in the transportation planning process for this important 
service. If confirmed, I will work with all the stakeholders to 
ensure this mandate is successfully carried out.

Q.6. The FTA is proposing in its fiscal year 2007 budget an 
increase in the Federal match for hybrid buses to 100 percent. 
Please explain this FTA policy, and the benefits to be derived 
from the introduction of hybrid buses for city transit systems.

A.6. I am not familiar with the development of FTA's policy on 
the Federal match for hybrid buses. I am, however, an advocate 
of hybrid and alternative fuel buses. Hybrid buses have been 
very successful in New York State in reducing emissions, saving 
fuel, and reducing noise pollution. If confirmed, I would work 
to encourage the use of hybrid and alternative fuel buses for 
our Nation's transit systems.

Q.7. I am concerned with the progress made to date on the 
Cooperative Bus Procurement Pilot Program. Congress passed this 
program to determine the benefits of encouraging cooperative 
procurement of major capital equipment under Sections 5307, 
5309, and 5311. As an added incentive to grantees to try this 
innovative approach, Congress authorized a 90 percent Federal 
share for this pilot program. The legislation called on the 
Department to conduct outreach to the transit industry for the 
purpose of educating grantees and others. To date, we have not 
seen FTA taking an active role in communicating with the 
industry regarding the potential for cost-savings associated 
with this approach. Can you report on the status of FTA's 
actions thus far and plans for the future to comply with this 
dictate?

A.7. If confirmed as Administrator of FTA, I would work to 
implement the Cooperative Bus Pilot Program as directed in 
SAFETEA-LU and would conduct outreach to the industry and 
report regularly to this Committee.

Q.8. Further, please report to the Committee on the FTA's 
compliance with the provisions requiring the establishment of 
the pilot programs and the current status.

A.8. I understand the importance of pilot programs and, if 
confirmed, I pledge to work toward compliance with requirements 
and regularly report the status to this Committee.

Q.9. In SAFETEA-LU, Congress enacted significant labor 
protection reforms. What actions will you take to fully and 
fairly implement those reforms in regulations to ensure that 
transit can move toward being as efficient as possible?

A.9. I am aware that SAFETEA-LU includes significant labor 
protection reforms and if confirmed, I would make certain that 
they are carried out fairly and as intended by Congress.

Q.10. Since 1964, there have been statutory provisions that 
mandate and encourage the utilization of private transportation 
operators to maximum extent feasible. From the mid-1980's 
through the mid-1990's such definitions and guidance existed to 
educate public transit planners and operators how to comply 
with these requirements. What actions will you take to again 
give meaning and guidance to the private operator participation 
portion of the Federal Transit Act, and when?

A.10. I believe there is an important role for the private 
operator in public transportation and if confirmed would 
advocate a role for private participation in public 
transportation and work to implement the law.

      RESPONSE TO A WRITTEN QUESTION OF SENATOR STABENOW 
                     FROM JAMES S. SIMPSON

Q.1. The FTA's background documents for the fiscal year 2007 
budget request notes that hybrid-electric drive bus 
technologies are recognized ``as an appealing clean fuel 
option, with good performance, low emissions, and lower fuel 
costs without costly infrastructure investments often required 
by other clean fuel technologies.'' Please outline the steps 
you plan to take to encourage more extensive use of this 
technology by transit agencies, particularly to address the 
difference in initial purchase cost between hybrid and 
traditional buses.

A.1. It is my understanding that FTA is taking several steps to 
encourage the use of hybrid-electric vehicles. Transit agencies 
are deploying hybrid electric buses into revenue service 
operations across the Nation in significant quantities. My 
experience is limited as a board member of the New York State 
Metropolitan Transportation Authority where we have purchased 
both CNG buses and hybrid electric buses. New York City Transit 
has been a leader in developing this technology. Although the 
addition cost of these buses is significant--I believe is about 
35 percent more than a traditional diesel bus--the benefits, 
however, are enormous. There is a fuel savings of about 30 to 
35 percent and there is less air pollution and noise pollution. 
I personally believe the environmental, social, and economic 
benefits of hybrid electric buses outweigh the costs and if 
confirmed, I would be an advocate of this technology.


                            NOMINATIONS OF:
                        CHRISTOPHER A. PADILLA,
                      OF THE DISTRICT OF COLUMBIA,
                       TO BE ASSISTANT SECRETARY,
                    U.S. DEPARTMENT OF COMMERCE AND
                    BIJAN RAFIEKIAN, OF CALIFORNIA,
                           TO BE A MEMBER OF
                        THE BOARD OF DIRECTORS,
                   EXPORT-IMPORT OF THE UNITED STATES

                              ----------                              


                     WEDNESDAY, SEPTEMBER 27, 2006

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

    The Committee met at 10:12 a.m., in room SD-538, Dirksen 
Senate Office Building, Senator Richard C. Shelby (Chairman of 
the Committee) presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The hearing will come to order.
    This morning, we are considering the nominations of Bijan 
Rafiekian to be a Member of the Board of Directors of the 
Export-Import Bank of the United States, and Christopher 
Padilla to be Assistant Secretary of Commerce for Export 
Administration.
    The Administration has placed a high priority on expanding 
exports to both facilitate economic growth and to help address 
our trade imbalance. The mission of the Export-Import Bank is 
to facilitate that goal. The nomination of Mr. Rafiekian to the 
Board of Directors of the Export-Import Bank will bring to that 
organization a unique background and perspective borne of his 
experience in the corporate world as a chief operating officer 
and chairman of the board. In addition, he has served as 
Director to the State of California's Office of Foreign 
Investment, a position whose title may not fully illuminate the 
scale of that position's importance given the magnitude of 
California's export industry.
    Despite early expectations that the end of the Cold War 
would allow for a dramatic loosening of this Nation's laws and 
regulations governing the export of technologies with both 
commercial and military applications, the opposite has proven 
true. Even in the age of globalization, controlling the export 
of certain technologies to specific countries and end-users 
remains as important as ever.
    The proliferation of technologies associated with the 
development of weapons of mass destruction and sophisticated 
conventional capabilities poses a threat to the security of the 
United States and to U.S. interests abroad. Therefore, 
administering this country's export control laws and 
regulations remains a vitally important responsibility. For 
this reason, the current absence of key officials at the 
Department of Commerce with responsibility for export controls 
represents a serious weakness in our regulatory regime. The 
nomination of Christopher Padilla to take over as Assistant 
Secretary of Commerce for Export Administration is intended to 
address this weakness.
    Mr. Padilla brings the experience in areas of international 
trade and corporate export licensing. Most importantly, his 
most recent position as Senior Adviser to the Deputy Secretary 
of State has given him a perspective on the nexus of trade and 
national security, as did his time as a Member of the 
President's Export Council Subcommittee on Export 
Administration.
    I look forward to hearing from both of the nominees, and we 
will try to move these nominations along because we are going 
to have a vote at 11:30.
    Senator Allard.

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, thank you for holding this 
hearing. As always, I appreciate the opportunity to hear from 
the nominees, and I would like to welcome both of them to the 
Banking Committee.
    First, I would like to comment on the nomination of 
Christopher Padilla to be the Assistant Secretary for Export 
Administration at the Department of Commerce. In this position, 
he will be responsible for an important component of national 
security and foreign policy through implementation of export 
controls. While there is a careful balance between commerce and 
security, national security must always be primary. Mr. 
Padilla's experience in both the private sector as well as at 
the State Department will help guide him in finding the 
appropriate balance.
    Next, I would like to turn to the nomination of Bijan 
Rafiekian to be a Member of the Board of Directors for the 
Export-Import Bank. I appreciated the opportunity to meet with 
Mr. Rafiekian yesterday. He is both personable and has strong 
credentials for the position.
    Unfortunately, I am unable to support his nomination at 
this time. As I outlined in last week's markup of the Export-
Import Bank Reauthorization Act, I am extremely disappointed 
and frustrated by the lack of an Inspector General at the 
Export-Import Bank. Creating the Office of Inspector General at 
the Bank was a high priority for me during the last 
reauthorization of the Bank 5 years ago. After repeated delays 
by the House, the IG funding has now been in place for nearly 1 
year, yet since that time, the White House has not even 
announced an intention to nominate, much less formally submit a 
nominee to the Senate. Until such time that the Senate receives 
a nomination for the Export-Import Bank Inspector General, I 
intend to place a hold on Mr. Rafiekian's nomination to the 
Board of Directors.
    I have allowed recent Board nominees to proceed so that the 
Bank will be able to maintain a quorum. However, I cannot allow 
additional Board members to move forward while another equally 
important position at the Bank remains vacant.
    As I indicated at the markup, I will also explore other 
options to further emphasize the importance of the Inspector 
General position. I intend to make further delays increasingly 
uncomfortable if a nominee for Inspector General is not quickly 
forthcoming. I am hopeful that an Inspector General nominee 
will be forthcoming, at which time I will be pleased to support 
Mr. Rafiekian's nomination to the Board of Directors for the 
Export-Import Bank.
    In closing, I would encourage both nominees to become 
familiar with the Government Performance and Results Act, the 
GPRA, which has been named as PART assessment by the 
Administration. The Results Act is a key tool in giving them 
the focus and vision to carry out effective and efficient 
programs. In both of your instances, I think this is extremely 
important. Whenever you show up before the Committee, you can 
usually expect me to bring up the PART Act and make sure that 
you are following it. As you know, it is at least on the 
intergovernmental intranet, and I think it is a very important 
program to bring accountability so those of us in the Congress 
know what the various agencies are doing. If you have not had 
an opportunity to familiarize yourself with it, I hope that you 
will take time to do that.
    I would exhort the nominees to become familiar with the 
appropriate strategic plans, the annual performance plans, 
annual accountability reports, and financial statements. If 
properly utilized, they can help you achieve success in meeting 
your mission.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you.
    Both of you, if you will stand and raise your right hand 
and be sworn. Do you swear or affirm that the testimony that 
you are about to give will be the truth, the whole truth, and 
nothing but the truth, so help you God?
    Mr. Padilla. I do.
    Mr. Rafiekian. I do.
    Chairman Shelby. Do you agree to appear and testify before 
any duly-constituted committee of the Senate?
    Mr. Padilla. I do.
    Mr. Rafiekian. I do.
    Chairman Shelby. Thank you.
    Mr. Padilla, we will start with you, if you want to 
introduce any members of your family. Your written testimony, 
both of you, will be made part of the record in its entirety, 
and if you would sum up, and if you have any family members 
here you want to introduce for the record.
    Mr. Padilla. Thank you, Mr. Chairman. I would like to 
introduce family and loved ones here today: Mario and Arlene 
Padilla and Christina Espinoza. And I would also like to 
mention, Senator Allard, my sister, Leslie, who lives in 
Colorado, happily so, I might add, for many years. She could 
not be here today.
    Chairman Shelby. And I will give him a chance to introduce 
any members of your family that you would like to here.
    Mr. Rafiekian. Yes, Senator, thank you very much. I have 
here today with me my wife, Gissou, my wife of 25 years; 
Christine, my daughter, who is attending American University; 
and Alexandra, my daughter, who is in eighth grade.
    Chairman Shelby. Great.
    Mr. Padilla, we will start with you.

              STATEMENT OF CHRISTOPHER A. PADILLA,

                  OF THE DISTRICT OF COLUMBIA,

                   TO BE ASSISTANT SECRETARY

                   FOR EXPORT ADMINISTRATION,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Padilla. Thank you, Mr. Chairman. Chairman Shelby, 
Senator Allard, Members of the Committee, I am deeply honored 
to appear before you today as the President's nominee to be 
Assistant Secretary of Commerce for Export Administration, and 
I would like to thank President Bush and Secretary Gutierrez 
for the trust that they have placed in me. I would also like to 
thank Senators and members of your staff who have taken time to 
meet with me prior to today's hearing. And if confirmed, I will 
work to build on the good cooperation that we have already 
started. Most importantly, I would like to thank my family and 
loved ones here for their support and encouragement.
    Mr. Chairman, my former boss, Ambassador Bob Zoellick, 
often said that America's future security and prosperity will 
depend on how we deal with four key questions: The threat of 
Islamic radical terrorism, the proliferation of weapons of mass 
destruction, the growing power and influence of China, and the 
economic and social challenges of globalization.
    The Commerce Department's Bureau of Industry and Security 
deals with all four of these issues, but the primary mission of 
BIS is to protect our national security by keeping sensitive 
technologies away from those who should not have them. And this 
would be my primary mission, if confirmed.
    The focus of our export control system continues to evolve. 
It was sufficient 20 years ago for our controls to focus on 
countries. But the 21st century demands that we also be able to 
focus on individual customers. During the Cold War, sales were 
broadly restricted to the Soviet Union and the Warsaw Pact, 
regardless of who the customer was. But today, as President 
Bush has said, and as you highlighted in your opening 
statement, Mr. Chairman, ``the gravest danger our Nation faces 
lies at the crossroads of radicalism and technology.'' In 
response to that threat, we must target our export controls 
increasingly against individuals and entities such as 
terrorists and proliferators who operate across borders or even 
within friendly countries.
    I think, we also, need to be able to differentiate between 
customers and end-users in large and diverse economies like 
China, where we are actively seeking to promote peaceful 
development and to encourage legitimate civilian trade, even as 
we hedge against the uncertainties created by that country's 
rapid military modernization.
    So to help focus export controls on today's new needs, if 
confirmed, I would work to provide information to exporters 
regarding who both the trusted and the suspect customers are, 
to identify countries or areas of trans-shipment concern, and 
to try to increase cooperation between BIS and the intelligence 
community, which provides us with valuable information on 
individual customers.
    To be most effective, export controls should be as 
multilateral as we can make them. If confirmed, I would work to 
support and strengthen the four major multilateral export 
regimes that are at the heart of our counterproliferation 
strategy. I would also seek to cooperate with other Nations, 
such as China and Russia, to try to strengthen their national 
export control systems to prevent onward proliferation.
    Effective multilateral controls protect our national 
security while also leveling the competitive playing field. 
But, importantly, just because someone else is selling 
something does not automatically mean that we should, too. In 
some cases, the United States may impose controls on its own, 
either for reasons of foreign policy or as a first step in 
building international coalitions and consensus.
    Clearly, technology is key to our economic competitiveness. 
I learned this when I worked in several high-technology 
companies. If confirmed, I would work to ensure that BIS stays 
up-to-date with new technology, monitors our defense industrial 
base, and is alert to emerging threats. I would also work to 
ensure that our licensing system and treaty compliance programs 
are transparent and efficient and that they operate with good 
performance metrics, as Senator Allard has suggested.
    To these important responsibilities I bring nearly 20 years 
of experience in international trade. Most recently at the 
State Department working for Deputy Secretary Zoellick, I 
worked on export control issues related to China, Sudan, and 
North Korea. From my days in the private sector, I know from 
personal experience what it is like to apply for an export 
license and run an internal control program. And during my 
years at USTR, I worked closely with Congress and appreciate 
your central role in regulating foreign commerce and trade.
    Mr. Chairman, in recent weeks I have had the opportunity to 
meet many of the people at BIS. I appreciate their patriotism, 
their dedication, and their professionalism, and I hope to have 
the opportunity to work with them in the near future. I thank 
you for holding this hearing today during what I know is a very 
busy time for the Congress. I appreciate your prompt 
consideration of my nomination, and I would be pleased to 
answer your questions.
    Yes, sir, Mr. Rafiekian.

          STATEMENT OF BIJAN RAFIEKIAN, OF CALIFORNIA,

                  MEMBER, BOARD OF DIRECTORS,

            EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Rafiekian. Thank you, Senator. Mr. Chairman, Senator 
Shelby, Senator Allard, it is my distinct honor and pleasure to 
testify before you this morning regarding my nomination to 
serve on the Board of the Export-Import Bank of the United 
States.
    I am deeply grateful to President Bush for nominating me 
for this position. It has been a wonderful and amazing journey 
from that sunny afternoon in October 1979 when I landed in Los 
Angeles 27 years ago, Senators, to serving some of the largest 
financial institutions, founding small companies, creating new 
jobs, and having the great honor of serving the people of the 
State of California. I have also had the pleasure of teaching 
great young minds at the California State University, 
Fullerton, but most importantly, I have served as a parent to 
my two daughters with my wife, Gissou.
    So my story, Senators, is the story of an immigrant who 
comes here with hope, works hard, and catches the amazing great 
American spirit. My story is the story of America. It is the 
greatness of this country. It keeps me humble and grateful and 
gives me the motivation to do more for my country, the United 
States of America.
    I came to the United States from England in 1979 after 
graduating from Brighton University, having left Iran, where I 
attended Tehran Industrial College. Shortly after my arrival in 
the United States, I started working for Great American Federal 
Savings, one of San Diego's oldest financial institutions, 
where I held various positions and was promoted to help run the 
Consumer Lending Division. I later held positions with American 
Express/Shearson Mortgage Corporation, and co-founded Lenders 
Technology, a small full-service banking, consulting, and risk 
management firm.
    In March 1994, I was appointed by the Governor of 
California to serve as an Economic Development Commissioner, 
and a Member of the Governor's Economic Development Advisory 
Council. I was reappointed to that position and later appointed 
to serve as the Director of Foreign Investment for the State of 
California, where my office was responsible for attraction, 
expansion, and retention of the State of California's foreign 
investment portfolio through offices around the world. Later 
on, the Governor appointed me to serve as a Member of the Board 
of Directors of California Housing Finance Agency.
    Mr. Chairman, Senator Allard, if confirmed, I will work 
hard to use my financial and management experience in 
aggressively serving the best interest of the Bank's customers 
with prudence, supporting and creating U.S. jobs, while 
exercising to the fullest extent a director's fiduciary duties 
to the Banks owners--the taxpayers of the United States.
    I thank you Senators, Mr. Chairman, for your time, for 
giving me an opportunity to be testifying at this hearing. I 
look forward to answering questions.
    Chairman Shelby. Both of you are well-qualified for your 
jobs by academic training and also the business community and 
your Government service. I just want to reiterate something 
that Senator Allard said, and I think he made it clear that he 
is not against your nomination per se. He is against a policy 
of the failure for them to bring an Inspector General forward. 
Is that correct?
    Senator Allard. That is correct, Mr. Chairman.
    Chairman Shelby. Because this is important, and we have to 
deal with the Administration. Although we support the 
Administration, we do not always agree. And I think he made 
that clear.
    Mr. Padilla, before his departure, former Under Secretary 
McCormick oversaw the drafting of a new control regime 
targeting military end-users in China. The intent is to 
eliminate licensing requirements for certified civilian end 
users while strengthening controls when the exporter knows the 
items in question are destined for the military.
    The Defense Department's latest report on the Chinese 
military emphasizes the PLA's increasing integration of the 
civil sector with the military procurement system. According to 
the report, ``Under this scheme, the People's Liberation Army 
in China will acquire common and dual-use items on the 
market.''
    The report goes on to note that despite its divestiture of 
many of its business enterprises, the People's Liberation Army 
in China still directly controls as many as 10,000 civilian 
firms. This is not new to you or to us.
    Given this, do you anticipate the Department being able to 
implement a system such as the one proposed, one intended to 
specifically target specific end users?
    Mr. Padilla. Yes, Mr. Chairman. I strongly support that 
policy that Under Secretary McCormick developed and worked 
interagency because I think it reflects our broader foreign 
policy toward China, which is to try to encourage legitimate 
civilian trade while hedging against the concerns about rapid 
military modernization. And as you said, China's military 
modernization has been growing at double-digit growth in real 
terms since 1996. The PLA is active in many sectors of the 
economy.
    I remember when I was in the private sector at AT&T, it was 
sometimes difficult for us to know, even in a big company 
whether your customer had links to the military because of the 
internecine nature of the economy there. So, I think we can 
help exporters in a number of key ways.
    First, I think we need to tell exporters more as Government 
who the trusted end-users are and who the suspect ones are. And 
this new rule will create the concept of a validated end-user 
where, if we have a good record of a customer selling only in 
the civilian sector and they are willing to open themselves up 
to inspection by U.S. Government officials on a periodic basis, 
then we are willing to allow them to have levels of technology 
under more expedited procedures.
    But we also need, I think, a robust program of end-use 
checks in China. There is an end-use visit understanding with 
the Chinese that was signed in 2004. If confirmed, I would work 
to try to improve it and expand that program. And then I think 
we also need, Mr. Chairman, to cooperate more with the 
intelligence community, and that is why I mentioned this in my 
opening statement. We need to be able to know, as Government, 
and to tell exporters as much as we can, without revealing 
sensitive information, who the trusted and suspect customers 
are.
    And then, finally, I hope we can give Chinese companies 
market-based incentives for good behavior. For example, if a 
Chinese company has a legitimate civilian record, they are 
willing to have U.S. Government officials visit them, then we 
give them a little bit better treatment. I am hoping that will 
be an incentive for more to sign up for such a program.
    Chairman Shelby. Mr. Padilla, controls on so-called 
``deemed exports'' represent one of the more difficult areas to 
regulate and to enforce. You know all this from your 
background. Both the academic and scientific communities are, 
by nature, generally loath to restrict the flow of information 
within those communities. You mentioned intelligence just a 
minute ago.
    Mr. Padilla. Yes.
    Chairman Shelby. That is a problem. Both the Government 
Accountability Office and the Commerce Department's Office of 
Inspector General have been highly critical of the Commerce 
Department's regulation of deemed exports.
    For instance, the GAO, the Government Accountability 
Office, concluded that the Department lacks an effective 
monitoring program to determine whether firms comply with 
licensing conditions designed to protect sensitive information 
from disclosure to nationals from problematic countries.
    In addition, both the GAO and the Inspector General have 
noted the recurring problem of licensing foreign nationals 
based upon current residency rather than country of origin. The 
Department of Commerce recently proposed reforms to the deemed 
export control process, as you know.
    Could you comment on the status of these reforms? Can you 
assure this Committee that, if confirmed, you will give the 
admittedly very complicated, and sometimes very sensitive, 
issue of deemed export controls the attention it deserves?
    Mr. Padilla. Mr. Chairman, if confirmed, I anticipate this 
will be one of my highest priorities, for exactly the reasons 
you mentioned. There is a clear threat to technology, the loss 
of sensitive technology from foreign nationals in U.S. 
companies or U.S. academic institutions. The National 
Counterintelligence Executive has identified more than 100 
countries that have sought to acquire sensitive or controlled 
U.S. technologies in this fashion.
    At the same time, Mr. Chairman, as you said, our openness 
to foreign researchers is a critical element of our R&D 
competitiveness, and universities typically want to have as 
open an environment as possible.
    The Secretary of Commerce has recently appointed a Deemed 
Exports Advisory Committee, co-chaired by former CIA Director 
Bob Gates. It has a number of former intelligence and military 
officials on it, as well as some business and academic people. 
I would, if confirmed, want to work closely with that Committee 
to look at this issue from an overall perspective and 
understand how we can better come to terms with it.
    For example, we certainly know about the concern of Chinese 
researchers coming to the United States, but as we have seen, 
Mr. Chairman, in recent months sometimes people with passports 
from friendly countries can pose a threat. And we have seen 
concerns about terrorism in the United Kingdom and Canada.
    Chairman Shelby. Absolutely.
    Mr. Padilla. How do we deal with that aspect of the threat?
    And so these are some of the questions that I would want to 
pose to this Committee and work with them and, of course, with 
the Congress as we seek to fashion a policy that addresses the 
clear threat that is there while maintaining our R&D 
competitiveness.
    Chairman Shelby. Mr. Padilla, as our experiences with Iran 
have illuminated, the United States sometimes takes a more 
proactive position with regard to economic sanctions than do 
other countries, including some of our allies. A major argument 
of those who oppose unilateral controls is that American 
companies lose business opportunities to other countries that 
market similar items but exercise fewer controls.
    A countervailing argument suggests that sometimes the 
United States has both a moral and practical obligation to 
block exports of sensitive items to certain destinations, 
irrespective of whether other countries follow suit.
    Clearly, the United States needs to continue to work 
closely with other countries under existing multilateral export 
control regimes to ensure that problematic entities are 
deprived of certain capabilities.
    Can you assure the Committee, however, that you will 
vigorously pursue controls when U.S. national security 
interests dictate that controls be in place irrespective of 
foreign cooperation?
    Mr. Padilla. Mr. Chairman, in my most recent time in the 
State Department, working for Deputy Secretary Zoellick, I had 
the opportunity to sit across the table in negotiations for the 
Darfur Peace Agreement with leaders of the Government of Sudan. 
And our export sanctions on Sudan are in some respects 
multilateral, but there are unilateral aspects to them.
    And I saw with my own eyes, Mr. Chairman, how important 
those sanctions are as a tool of foreign policy. And as I said 
in my opening statement, there are clearly costs to imposing 
controls unilaterally.
    What I would hope to do, if confirmed, is to have a good 
assessment of the costs and benefits so that we understand what 
the costs are before we undertake a policy decision. But simply 
the fact that there is a cost associated with it does not mean 
you do not do it. It may mean you decide to accept that cost 
for reasons of foreign policy, in the case of Sudan, or as a 
first step in leading international coalitions, as may become 
necessary with regard to other countries.
    Chairman Shelby. This will be my last question to you. 
Chemical and biological exports.
    Mr. Padilla. Yes, sir.
    Chairman Shelby. Application of dual-use export controls to 
prevent the proliferation of weapons of mass destruction and 
their means of delivery has been one of the Bureau of Industry 
and Security's most important missions. Even before September 
11, keeping such weapons out of the hands of terrorists was a 
widely recognized national security imperative.
    In its post-September 11 review, the Bureau identified 
controls on chemical and biological agents as a priority. Yet, 
according to a 2006 study by the General Accountability Office, 
GAO, the agency's watchlist did not include a large number of 
individuals and companies identified with past export control 
violations related to terrorist organizations and potential 
biological weapons.
    One case that was detected and that resulted in a fine 
involved Marine Biological Laboratories, a Maine company 
charged with the unlicensed export of vaccines to Syria, a 
terrorist-supporting state. There is, however, every reason to 
believe that the control regime remains deficient in this 
crucial area.
    If confirmed, can we be confident that this apparent 
shortcoming will be fully addressed, and quickly, by you?
    Mr. Padilla. If confirmed, yes, Mr. Chairman. I did read 
that report----
    Chairman Shelby. You will be confirmed, we want to assure 
you.
    Mr. Padilla. Thank you, Senator. I did read that GAO report 
and found it of great interest. I think the report found 
generally that the licensing system seems to be working well, 
but the GAO did identify this issue with regard to end-users, 
and that is why I highlighted this issue in my opening 
statement.
    Mr. Chairman, when I was in the private sector, I worked at 
the time for AT&T, one of the largest corporations in the 
world. We wanted the Government to tell us more about who the 
trusted and suspect end-users were, because even a company with 
our vast resources, we were sometimes confronted with customers 
where we were not exactly sure. And we do not have a separate 
intelligence capability. You are relying usually on the local 
salesperson to give you information about who the customer is. 
And that is why I think it is important--certainly, companies 
have a responsibility to know their customers. That is not 
going to change. But I do believe Government has a 
responsibility, if we are going to regulate, to tell people 
more about who the good guys and the bad guys are. That is why 
I support this concept of a validated end-user. If we can 
identify trusted customers, great.
    I also think we need to do more in telling people who the 
bad end-users are on the entity list, or who the entities are 
that are unverified, where there might be a red flag and 
perhaps some suspicious----
    Chairman Shelby. So you will be in a position to do that.
    Mr. Padilla. Yes, Mr. Chairman, if confirmed, I will. And 
that is why I highlighted in my statement that that would be 
one of my top priorities.
    Chairman Shelby. Thank you.
    Mr. Rafiekian, if confirmed, you will assume--and I believe 
you will be confirmed. I am hoping we work out this snafu with 
Senator Allard and the Administration. But if confirmed, you 
will assume significant responsibilities. Hundreds of American 
exporters depend on the Export-Import Bank to provide financing 
that the private sector is unable to offer. As a result, the 
Export-Import Bank plays an important part in preserving the 
competitiveness of U.S. exports in world markets. How you 
fulfill your duties as a Board member of Ex-Im will, therefore, 
have a significant impact on scores of U.S. businesses, hence, 
our economy, as you well know.
    Would you just discuss briefly how your unique background--
and it is unique--has prepared you to serve as a Member of the 
Board of Directors of the Export-Import Bank?
    Mr. Rafiekian. Thank you, Senator.
    Chairman Shelby. Great experience and education.
    Mr. Rafiekian. I will bring my experience; if confirmed, I 
will use all that experience that I have gained in the private 
sector, first as a small business owner and operator, 
understanding the challenges of the small business. I will do 
my best, if confirmed, to aggressively serve the needs of small 
business in creating new jobs.
    I will also bring my experience, if confirmed, to 
understand the importance of exports and understanding the 
relevance of new jobs as a result of U.S. companies exporting. 
While doing that, if confirmed, Senator, Mr. Chairman, I will 
also keep in mind the significance of the economic impact that 
the role of the Ex-Im Bank has in serving that purpose. And all 
of this experience will be dedicated, if confirmed, to those 
crucial goals. I am committed to that, Senator.
    Chairman Shelby. The Export-Import Bank is required by law 
to allocate 20 percent of its aggregate loan guarantee and 
insurance authority toward the financing of export by small 
businesses. Since this mandate was enacted, however, Ex-Im has 
never met that threshold of 20 percent.
    Since you have a long history working in small business, I 
would like to know what actions you think that the Export-
Import Bank should undertake to ensure that it meets the 20-
percent threshold of working with small business here? In other 
words, will you be an advocate for the small business sector, 
which is our economic engine?
    Mr. Rafiekian. Mr. Chairman, I had the great honor of 
serving as a Commissioner of Economic Development in the State 
of California in some not-so-easy times for my home State, 
California, and I learned more about the challenges with small 
business during that period. I will bring that experience, if 
confirmed, to serve the needs of small business aggressively by 
specifically making sure that there is more connection between 
the Bank and the small business community; that the small 
business community is aware of all of the facilities that the 
Bank has to offer; staying closer to the business community, 
who at times, I observe, do not have the resources to even 
obtain the necessary information that helps them fulfill their 
business goals for growth and job creation.
    If confirmed, Mr. Chairman, I will aggressively pursue that 
goal.
    Chairman Shelby. Thank you.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman.
    I just want to relate to Mr. Rafiekian that I sense a sense 
of pride in your accomplishments here in the United States as a 
new citizen. And I feel as strongly about it and I share your 
sense of pride. I am very delighted to see you be able to move 
on with more responsibility in this country. I think it speaks 
well for the system that we have here in this country where 
individuals can come in, no matter what their background or 
nationality, and become a citizen and become successful in our 
country.
    So, I do not relish the idea that I have to put a hold on 
your nomination at this particular point--temporary in nature, 
I hope. We are now in communication with the White House and 
hopefully we can get this resolved and get moving forward with 
an Inspector General. As you can tell from my comments, I think 
the Inspector General is very important because they are the 
eyes and ears of the Members of the Congress, and they help us 
know how well an agency like the Export-Import Bank, is 
performing. It helps us detect waste, fraud, and abuse.
    But there is another function. They also help foster 
efficiency in the Government, and maximum efficiency can only 
be achieved through a cooperative relationship, I think, 
between the agency and the Inspector General--in this case, the 
Export-Import Bank.
    What relationship would you foresee with the Inspector 
General for the Export-Import Bank?
    Mr. Rafiekian. Senator Allard, I would like to thank you 
for giving me the distinct honor and the opportunity to visit 
with you yesterday. I know how busy you are, sir, and how 
important your schedule is. I really appreciate that 
opportunity.
    Regarding the Inspector General position, as someone who 
has served in a regulated industry, the banking industry, I 
recognize the significance and the importance of that position 
and the service it provides not just to the Bank and its 
customers, not just to the shareholders and owners, but also in 
fostering a productive relationship between the oversight 
mechanism within our Government and the operators at the Bank, 
all in the service of the customers.
    If confirmed, Senator, I will pursue, advocate, and do all 
that I can, together with colleagues, if confirmed, on the 
Board of the Bank, working with the Chairman, all those 
involved to advocate for this position, and I look forward to 
the opportunity to work very closely with the Inspector 
General, on transparency, providing information, and helping 
the Inspector General's Office be informed so that the 
relationship between the operation of the Bank and the 
oversight, including Congress, is maintained at the highest, 
most productive, most transparent level, sir.
    As someone who has lived in the banking circles, sir, I 
follow a small but very clear motto for myself that principle 
always comes before interest. Without principle, there is no 
interest. I will follow that philosophy in working with the 
Inspector General, and I look forward to it.
    Senator Allard. Thank you very much, and I appreciate your 
support for the Inspector General and his responsibilities when 
we get him in that place. You know, it is good to have somebody 
with your background on the board, and I am very pleased that 
you will be very supportive with the idea of an Inspector 
General at the Export-Import Bank.
    You are a small business person. And I am a small business 
person. I am frustrated to some degree and I think you share 
that frustration that we do not do more for small business 
through the Export-Import Bank. I appreciate your response to 
the Chairman's question because I had the very same question, 
basically, that I was going to pose to you. I think you gave a 
very appropriate response to that.
    I just wish you well. I think we will get our differences 
worked out between the White House and the Export-Import Bank. 
And then you will have an opportunity, I believe, to serve on 
that Board. I think you are the kind of individual that we need 
to serve on that Board, so I want to give you my support in the 
strongest terms once we get this issue resolved between the 
White House and ourselves and the Export-Import Bank.
    Mr. Padilla, I served on the Intelligence Committee with my 
good friend and Chairman of this Committee, and I also share 
his concerns that we have a proper balance between the security 
issues and the free enterprise issues. I am a free trader, and 
so I am conflicted, I think like a lot of other people are. But 
I do believe that security has to be a prime, number one 
concern for this country. And so I was heartened by your 
comments, and I just wish you well in that regard.
    In 2001, Congress attempted to reauthorize the Export 
Administration Act but was unsuccessful in its attempt. In 
light of other related acts now pending, including a CFIUS 
reform bill and the Export-Import Bank Reauthorization Act, how 
important is it to revisit authorization of the Export 
Administration Act? And if so, what recommendations do you have 
to improve the Export Administration Act?
    Mr. Padilla. Senator, I think it is important that we have 
a clear legislative basis for our export control system. The 
statute expired in 1989 and has been renewed episodically since 
then. That statute is a Cold War statute. It reflects the 
threats that existed at the time that it was written, which 
were mainly focused on the countries of the Soviet Union and 
the Warsaw Pact. Now, the statute does not reflect the more 
recent threat of proliferation and terrorism.
    I think also it is important for us as a country when we 
ask other countries, particularly emerging economies, to 
establish strong export control laws to prevent proliferation, 
that we have a strong basis ourselves. And, of course, also, 
Senator, it is important to be able to have a law in place so 
that my hopeful future colleagues in export enforcement can 
apply meaningful penalties for those who violate the law.
    I know, Senator, the Administration has a longstanding view 
that the EAA needs to be modernized. I know that the 
Administration supported the bill in 2001. If confirmed, 
Senator, I would work within the Administration and with you, 
the Chairman, and members of your staff on modernization of the 
EAA.
    Senator Allard. Thank you.
    Mr. Chairman, that concludes any questions that I might 
have.
    Chairman Shelby. I just want to say on behalf of the 
Committee that we appreciate your willingness to serve. Mr. 
Padilla, your position is a very, very important position in 
Commerce, as you know.
    Mr. Padilla. Yes, sir.
    Chairman Shelby. You have got a brilliant academic record 
and great experience in the private sector.
    Mr. Padilla. Thank you.
    Chairman Shelby. Mr. Rafiekian, you bring a lot to the 
table, too. We are proud of your journey in life and where you 
are today, and we believe you will serve well on the Export-
Import Bank Board, and we will try to move your nomination as 
soon as possible. Thank you a lot.
    Mr. Rafiekian. Thank you very much, Mr. Chairman.
    Chairman Shelby. The hearing is adjourned.
    [Whereupon, at 10:55 a.m., the hearing was adjourned.]
    [Biographical sketches of nominees supplied for the record 
follow:]


