[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



          FISCAL YEAR 2009 BUDGET: FEDERAL MARITIME COMMISSION

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

                               (110-115)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 15, 2008

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure


                  U.S. GOVERNMENT PRINTING OFFICE
41-960                    WASHINGTON : 2008
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gov Phone: toll free (866) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 20402-0001







             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York             VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida               STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California               FRANK A. LoBIONDO, New Jersey
EDDIE BERNICE JOHNSON, Texas         JERRY MORAN, Kansas
GENE TAYLOR, Mississippi             GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        HENRY E. BROWN, Jr., South 
LEONARD L. BOSWELL, Iowa             Carolina
TIM HOLDEN, Pennsylvania             TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington              TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington              SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts    BILL SHUSTER, Pennsylvania
TIMOTHY H. BISHOP, New York          JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine            SHELLEY MOORE CAPITO, West 
BRIAN HIGGINS, New York              Virginia
RUSS CARNAHAN, Missouri              JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado            MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            TED POE, Texas
DORIS O. MATSUI, California          DAVID G. REICHERT, Washington
NICK LAMPSON, Texas                  CONNIE MACK, Florida
ZACHARY T. SPACE, Ohio               JOHN R. `RANDY' KUHL, Jr., New 
MAZIE K. HIRONO, Hawaii              York
BRUCE L. BRALEY, Iowa                LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          CHARLES W. BOUSTANY, Jr., 
TIMOTHY J. WALZ, Minnesota           Louisiana
HEATH SHULER, North Carolina         JEAN SCHMIDT, Ohio
MICHAEL A. ACURI, New York           CANDICE S. MILLER, Michigan
HARRY E. MITCHELL, Arizona           THELMA D. DRAKE, Virginia
CHRISTOPHER P. CARNEY, Pennsylvania  MARY FALLIN, Oklahoma
JOHN J. HALL, New York               VERN BUCHANAN, Florida
STEVE KAGEN, Wisconsin               ROBERT E. LATTA, Ohio
STEVE COHEN, Tennessee
JERRY McNERNEY, California
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey

                                  (ii)









        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                 ELIJAH E. CUMMINGS, Maryland, Chairman

GENE TAYLOR, Mississippi             STEVEN C. LaTOURETTE, Ohio
RICK LARSEN, Washington              DON YOUNG, Alaska
CORRINE BROWN, Florida               HOWARD COBLE, North Carolina
BRIAN HIGGINS, New York              WAYNE T. GILCHREST, Maryland
BRIAN BAIRD, Washington              FRANK A. LoBIONDO, New Jersey
TIMOTHY H. BISHOP, New York, Vice    TED POE, Texas
Chair                                JOHN L. MICA, Florida
LAURA A. RICHARDSON, California        (Ex Officio)
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)








                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Anderson, Commissioner A. Paul, Federal Maritime Commission......     5
Brennan, Commissioner Joseph E., Federal Maritime Commission.....     5
Creel, Jr., Commissioner Harold J., Federal Maritime Commission..     5
Dye, Commissioner Rebecca F., Federal Maritime Commission........     5

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Bishop, Hon. Timothy H., of New York.............................    33

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Anderson, Hon. A. Paul...........................................    34



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


 
    HEARING ON FISCAL YEAR 2009 BUDGET: FEDERAL MARITIME COMMISSION

                              ----------                              


                        Tuesday, April 15, 2008

                  House of Representatives,
    Committee on Transportation and Infrastructure,
   Subcommittee on Coast Guard and Maritime Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2167, Rayburn House Office Building, the Honorable Elijah 
E. Cummings [Chairman of the Subcommittee] presiding.
    Mr. Cummings. This hearing is called to order.
    This morning's hearing is on the proposed fiscal year 2009 
budget and the institutional management of the Federal Maritime 
Commission which was created to regulate international 
shipping. The Commission has been operating under a five-year 
authorization of its budget which is due to expire on September 
30th of this year.
    This is the first opportunity the Subcommittee has had in 
several years to examine the activities of the Commission. I 
have heard many concerns about the management and programmatic 
direction of the Federal Maritime Commission.
    For the past year and a half, the Commission has been 
without a chairman. Mr. Anderson has been nominated by the 
President for an additional term on the Commission and will be 
the chairman if he is confirmed. However, at the present time, 
the four commissioners who are about to testify have been 
jointly responsible for the daily administration of the 
Commission as well as for establishing the Commission's policy 
positions.
    During their tenure, the 2006 Federal Human Capital Survey 
of FMC employees found alarmingly the following:
    Only 56 percent of the employees thought the FMC was a good 
place to work.
    Only 50.2 percent of the employees said they were able to 
recruit people with the right skills.
    Only 54 percent of the employees have high respect for the 
agency's senior leaders.
    Only 48 percent of the employees think that complaints, 
disputes and grievances are resolved fairly.
    Only 40 percent of the employees believe that the agency's 
leaders generate high levels of motivation and commitment in 
the workforce.
    Interestingly, only 27.3 percent of the employees think 
that pay raises are dependent on how well employees perform 
their jobs.
    These numbers are troubling. They are alarming and should 
cause all of us great concern as is the fact that the general 
counsel of the Commission has found it necessary to file EEO 
grievances against the Commission.
    The Subcommittee is also very concerned that despite the 
significant administrative responsibilities the four current 
commissioners are now exercising, the four commissioners do not 
regularly meet face to face to discuss either the management of 
the agency or its policy decisions.
    Similarly, the Subcommittee is concerned about the process 
of ghost voting through which a commissioner may apparently 
sign blank voting sheets in advance of the conduct of any vote 
and then through a phone call--through a phone call--direct 
staff on how they are to fill in the blanks on a voting sheet 
when a vote is called. Such a process does not indicate that 
votes are the result of the deliberative examinations that 
should be a hallmark of the Commission's consideration of any 
administrative or policy decision.
    The Subcommittee is further troubled by reports of 
excessive spending to renovate the chairman's office and the 
chairman's conference room particularly at a time when the 
Commission does not even have a chairman. There is something 
awfully wrong with this picture.
    The Subcommittee also understands that a commissioner may 
not be in the office for days or weeks at a time, though an FMC 
commissioner is among the highest paid employees in government. 
Civil servants in the FMC are required to come to work five 
days a week except for vacations and official travel, and the 
same standard should be kept by the commissioners who certainly 
cannot adequately manage a Federal agency and lead its 
employees when they are a thousand miles away.
    Today we no longer can tolerate the old patronage system 
that distributed benefits and goodies to people who are not 
expected to do any real work. That day is long gone.
    Perhaps because of the circumstances we have just outlined, 
an outside management consultant hired by the Commission in 
2005 and 2006 found the following:
    Lack of trust existed at all levels in the organization and 
especially in the leadership. Women and minorities felt 
disenfranchised, which is obviously a finding that is of great 
concern to me, and conflict abounded between and among 
individuals and groups of people including managers and the 
senior executives.
    No leadership team existed and managers did not know how to 
give or receive feedback to employees or customers. No staff 
meetings were being held, and there was little interaction with 
the maritime industry the FMC is expected to regulate. Further, 
no vision or operational values were exhibited.
    The agency was adverse to change. People were fearful to 
suggest improvements. Empowerment was not in the agency's 
vocabulary.
    These are the findings. These aren't my words; these are 
theirs.
    The organization operated in a ``command and control 
manner''.
    The executive director ruled with an iron hand. The culture 
was ``his way or the highway.''
    The Bureau of Enforcement, in particular, operated with a 
hammer mindset rather than with the goal of examining how the 
agency could work in partnership with industry and individuals.
    The automation of processes, both inside the agency and the 
processes that connected the industry it serves, were outdated 
and no plan existed to improve them.
    There was little interaction between the commissioners and 
their staff.
    The evidence we have before us presents a picture of an 
agency that appears to be broken and dysfunctional.
    I am eager to hear from the commissioners. I notice that 
they seem to be a little concerned about some of the things I 
just read, and I would love to hear your response. In 
particular, I would like to hear from Mr. Anderson who has been 
nominated to head this agency and what you are going to do to 
improve the management policies and strategic vision of the 
Federal Maritime Commission.
    With that, I recognize our distinguished Ranking Member, 
Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    Welcome to the commissioners.
    We are meeting to review the fiscal year 2009 budget 
request for the Federal Maritime Commission. The Commission has 
responsibilities to oversee U.S. interest in the maritime trade 
and to enforce international and domestic shipping regulations.
    The President has requested about $24 million for the 
Commission which is an increase of nearly 8 percent over the 
amounts appropriated for the current fiscal year. The 
Subcommittee is on record as being in support of the proposed 
levels, and I look forward to working with the Chairman to 
reauthorize the Commission later this year.
    I do want to bring up one matter of concern, and perhaps 
during testimony and questions this could be addressed, and 
that has to do with the Japanese Government.
    Ten years ago, the Japanese Government, pressured by our 
Administration and the Federal Maritime Commission, signed an 
agreement promising to open its port and stevedoring market to 
the U.S. and other foreign competition. However, the 
Administration has reported to the Congress just within the 
last month that the Japanese side has failed to live up to its 
commitments, and the Japanese market for port and stevedoring 
services remains closed.
    Meanwhile, the Japanese maritime companies, protected from 
competition at home, have continued to expand their port 
operations in the United States. Now one Japanese carrier has 
approached the FMC and demanded the right to stevedore its own 
vessels even in a privately owned maritime terminal owned and 
controlled by U.S. stevedoring companies.
    We continue to be concerned about the apparent imbalance 
and unfairness between the closed Japanese market for port 
services compared to the open U.S. stevedoring and terminal 
sector that we have. In my opinion, the FMC should not take 
actions that needlessly aggravate this imbalance or further 
undermine or harm U.S. maritime companies and their interests.
    Furthermore, I would ask that the FMC reexamine why the 
agreements to open Japan's port and stevedoring market did not 
produce results and to report to the Committee what steps could 
be and should be taken to encourage Japan to honor its 
commitments and to bring the two countries' port markets back 
into balance.
    I want to thank the Commissioners for appearing this 
morning, and I look forward to hearing your testimony.
    Thank you, Mr. Chairman. I yield back.
    Mr. Cummings. Thank you very much, Mr. LaTourette.
    We are very pleased to have been joined by the 
distinguished Chairman of the Transportation Committee, Mr. 
Oberstar.
    Mr. Oberstar.
    Mr. Oberstar. Well, thank you for the long hours you put 
in, Mr. Chairman, to prepare for this hearing and, Mr. 
LaTourette, as always, for your participation and splendid 
contribution to the work of the Subcommittee.
    We meet at a sad moment for me, a troubling moment in the 
history of the Federal Maritime Commission. I have served on 
the Merchant Marine and Fisheries Committee along with the then 
Public Works Committee for my very first term in Congress in 
1975 until the present, and I have never seen the FMC in such a 
state as it is today.
    First of all, it has been five years since we have had the 
FMC up here before the Committee to explain its budget. Over 
that time, there have been serious management problems. Outside 
observers have said, well, they don't have a chairman.
    They don't have a chairman. They have an acting chairman, 
but they have four commissioners. They all can carry on the 
work of the chairman. They ought to be doing oversight of the 
activities of the Commission.
    But what was troubling to me was the Federal Human Capital 
Survey of FMC employees found that 56 percent--that is a pretty 
low number--thought the FMC was a good place to work. Only 54 
percent had high respect for senior leaders.
    If any of us on this Committee had that kind of report, we 
would be back home, shoveling dirt and standing on street 
corners and knocking on doors and talking to people.
    There are reports of ghost voting. I have never had that 
happen before. Some of the commissioners aren't even in 
Washington when they vote. They call in their vote to staff and 
tell them how to fill in a pre-signed ballot.
    There are reports that some commissioners haven't been at 
the Commission in weeks, all the while getting paid to do the 
work of the Commission. Now the civil service employees have to 
put in 40 hours a week.
    I wonder what standard the commissioners have. These are 
presidential appointee jobs, but they are not feather-bedding 
jobs where you get paid but don't show up.
    The FMC's Inspector General issued a report finding that 
staff and attorneys at the Commission violated the Federal 
acquisition regulations when purchasing $36,000 worth of 
furniture for the chairman's suite, but commissioners told the 
IG they had no knowledge of that expenditure.
    Well, how can commissioners who have to vote to approve a 
travel request for a commission staff member not know about or 
not be asked to vote on $36,000 for furniture? That is a lot of 
furniture for a chairman's office. You could furnish a few 
houses with that.
    That money wasn't in the Commission's budget, and I expect 
an explanation from this panel of where the money was found.
    It is troubling when the general counsel of an agency finds 
it necessary to file an EEO complaint against her own agency. I 
have never seen that happen, not in this agency.
    And, the maritime industry is well aware of these problems. 
I hear about it wherever I travel from port communities to 
labor organizations to business groups who are saying, what is 
going on at the Commission? That is why we have hearings.
    Well, I think it is important for this Committee to conduct 
this hearing and to follow up on it and hear the responses we 
get from the commissioners and to ensure that we do, Mr. 
Chairman and Mr. LaTourette, whatever is necessary to make sure 
that the FMC is a place, once again, where people enjoy their 
jobs, respect their commissioners, respect their leadership and 
have a vision for the future.
    I look forward to the testimony.
    Thank you, Mr. Chairman.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Coble.
    Mr. Coble. No opening statement, Mr. Chairman.
    Mr. Cummings. Mr. Bishop.
    Mr. Bishop. I have an opening statement, Mr. Chairman, but 
in the interest of time I will submit it for the record.
    Mr. Cummings. Very well and thank you very much.
    At this time, we will now hear from our commissioners: 
Commissioner Paul Anderson, Commissioner Joseph E. Brennan, 
Commissioner Harold J. Creel, Jr. and Commissioner Rebecca F. 
Dye.
    Mr. Anderson.

 TESTIMONY OF COMMISSIONER A. PAUL ANDERSON, FEDERAL MARITIME 
 COMMISSION; COMMISSIONER JOSEPH E. BRENNAN, FEDERAL MARITIME 
COMMISSION; COMMISSIONER HAROLD J. CREEL, JR., FEDERAL MARITIME 
 COMMISSION; AND COMMISSIONER REBECCA F. DYE, FEDERAL MARITIME 
                          COMMISSION.

    Mr. Anderson. Thank you, Mr. Chairman, distinguished 
Members of the Subcommittee and the Committee.
    It is a pleasure to appear before you today to present the 
President's fiscal year 2009 budget for the Federal Maritime 
Commission. It is an honor to be here today with my colleagues: 
Joe Brennan, Hal Creel and Rebecca Dye.
    The President's budget for the Commission provides for 
$23,953,000 for fiscal year 2009. This represents a 7.8 percent 
increase or $1,881,000 over the fiscal year 2008 appropriation.
    Since our last budget hearing before the Committee in 2006, 
the Commission has witnessed several important changes in the 
U.S. foreign commerce, and the Commission has substantially 
revised and updated many of its internal processes. I would 
like to provide some of the highlights in the state of the U.S. 
trades over the last year as well as identify some of the 
significant current events, programs and initiatives at the 
Commission.
    Fiscal year 2007 was another year of growth in the U.S. 
liner trades. Total cargo volume in U.S. liner exports grew by 
12 percent, offsetting a slight decline in imports for the 
first time in years. Notably, cargo growth in imports from Asia 
slowed substantially this fiscal year, though China continued 
to be the leading trading partner in liner cargo with the 
United States.
    As you know, the European Commission has recently 
eliminated the block exemption from European Commission 
competition laws and is currently reviewing the exemption for 
non-ratemaking consortia agreements among liner carriers. The 
block exemption is set to expire on October 1st, 2008, and the 
consortia exemption is currently due to expire in April, 2010.
    The repeal of the block exemption in the E.U. will result 
in the elimination of rate discussion agreements in the 
European trades including the U.S.-E.U. trade lanes. It is 
estimated that approximately 6 out of the 227 carrier 
agreements currently filed with the Commission will need to be 
restructured or eliminated to ensure compliance with the E.U. 
guidelines.
    The Commission will monitor the transition very closely and 
will have a better indication of the immediate and long-term 
effects on the U.S.-European trades after the termination of 
the exemption in October of 2008.
    The Commission has also been monitoring significant 
developments in marine terminal operator agreements which 
address supply chain and operational issues including port 
congestion, security, air pollution and environmental concerns. 
The Ports of Los Angeles and Long Beach have filed an agreement 
with the Commission permitting them to discuss, consult and 
agree on the establishment and implementation of programs and 
strategies to improve port-related transportation 
infrastructure and to decrease port-related air pollution.
    The ports are currently in the process of developing a 
Clean Truck Program as a first initiative under the joint Clean 
Air Action Plan. The ports' goal is to significantly reduce air 
pollution from port drayage trucks by replacing or retrofitting 
an estimated 16,000 trucks servicing the ports over a five-year 
period.
    The Commission is actively monitoring the agreement's 
activities, and our staff has met with a variety of industry 
stakeholders concerning the implementation of this program. We 
will continue to remain engaged throughout the development and 
implementation of the Clean Truck Program.
    The Commission has continued its cooperation with other 
agencies to improve our enforcement capabilities and to assist 
maritime security efforts. Cooperation with U.S. Customs and 
Border Protection has expanded into joint field operations to 
investigate any suspected violating of both agency statutes or 
regulations.
    We are also in the process of assisting national maritime 
security efforts by working to share our informational 
resources with other Federal agencies including Customs and 
Border Patrol and the Department of Homeland Security through 
the International Trade Data System and the Automated 
Commercial Environment portal.
    These efforts will allow the Commission to provide access 
to its extensive informational resources containing background 
information on entities regulated by the Commission, some of 
the most complete resources identifying persons engaged in U.S. 
foreign commerce. Once completed, the ACE ITDS system will 
provide greater transparency of the Nation's supply chain.
    Over the last fiscal year, the Commission has streamlined 
access to our informational resources by automating our Ocean 
Transportation Intermediary Licensing process and by 
modernizing our databases containing extensive information on 
the entities we regulate. Completion of these projects ensures 
that the Commission is able to efficiently meet the needs of 
the industry.
    At this point, Mr. Chairman, we respectfully request 
favorable consideration of the President's budget and are more 
than happy to answer questions.
    Thank you.
    Mr. Cummings. Thank you very much.
    It is my understanding that the other commissioners will 
not be doing opening statements. Is that correct?
    Mr. Anderson. That is correct, Mr. Chairman.
    Mr. Cummings. Thank you very much.
    Mr. Anderson, how many management meetings, or let me go 
back and say this.
    Mr. Oberstar and I spoke about some of the concerns that we 
have, and this entire Congress, I think, have a few things we 
seem to all agree on, but one of them is that the taxpayers' 
money must be spent effectively and efficiently. It is quite 
appropriate that I make that statement on this day.
    To that end, I want to ask you a few questions about how 
you all manage the agency and how you all earn the money that 
the taxpayers work so hard to put into our Federal coffers.
    How many management meetings have the four of you held 
since Chairman Blust left in June of 2006? In other words, how 
many times have the four of you gotten together to actually 
discuss management of the agency and policy issues?
    Mr. Anderson. Mr. Chairman, as you may know, the Sunshine 
Act governs our ability to meet as a group. So the four of us 
getting together to meet has not happened on regular basis. 
However, in groups of two, which we are allowed to do, have 
happened quite frequently since Chairman Blust has left.
    Mr. Cummings. How many times, though, have you all met?
    Mr. Anderson. I would say dozens of times.
    Mr. Cummings. No, no, no, no. Let me go back to my 
question. How many times since Chairman Blust left have the 
four of you met together? Like if you put a circle and all of 
you were sitting there together like you are now, how many 
times have you all done that?
    Mr. Anderson. Two or three times and as well in two closed 
hearings as well to discuss management issues.
    Mr. Cummings. When was the last time that happened?
    Mr. Anderson. About six weeks ago.
    Mr. Cummings. In the past year, how many eight-hour days 
have you spent at the FMC headquarters?
    Mr. Anderson. I don't recall exactly how many days but in 
the past year, hundreds, 150. I don't have an exact number for 
you, Mr. Chairman.
    Mr. Cummings. Were you there last week?
    Mr. Anderson. I was not there last week.
    Mr. Cummings. Were you on vacation?
    Mr. Anderson. Yes.
    Mr. Cummings. And the week before that?
    Mr. Anderson. Yes, I was. I was there.
    Mr. Cummings. How many days were you there that week, do 
you know?
    Mr. Anderson. I believe I was there four days. Yes, four 
days.
    Mr. Cummings. Let me ask you this, would you submit for me 
over the last year how many times you have been there? You can 
submit that for the record. Would you do that?
    Mr. Anderson. Yes, I will, Mr. Chairman.
    Mr. Cummings. You said something that I just want to make 
sure I have some clarity on. You said the Sunshine Laws have 
certain effect on certain things. Can you explain that?
    Mr. Anderson. It is my understanding, Mr. Chairman, based 
on our counsel, that since I have been at the Commission we are 
limited to meeting with no more than two commissioners at any 
given time so that we don't have a violation of the Sunshine 
Law which would require us to notice a meeting.
    Mr. Cummings. So you understand you can meet, but you just 
have to have open meetings. You understand that, right?
    Mr. Anderson. Yes, I do.
    Mr. Cummings. Help me with this. Is it that you didn't want 
to have an open meeting? Is that what you are trying to say?
    That is the only reason of relevance I can see. Maybe I am 
missing something.
    Mr. Oberstar. Mr. Chairman?
    Mr. Cummings. Yes. I yield to you.
    Mr. Oberstar. What is wrong with an open meeting?
    Mr. Anderson. Nothing is wrong with an open meeting.
    Mr. Oberstar. Well, why don't you want to have them?
    Mr. Anderson. Well, we were. We were meeting on a regular 
basis with each other and in pairs of two, and then our 
counsels worked very closely together. We had day to day 
contact with each other on a regular basis.
    I can speak for myself. I speak to several of my colleagues 
on evenings, over the weekends, as I have been on vacation. We 
are in constant communication with each other since the time 
that we have been co-equally managing the Commission.
    Mr. Cummings. Have you signed blank notational voting 
sheets in advance and then had your staff fill in the blanks 
when you were not present at the Commission to participate in a 
vote? Have you ever done that?
    Mr. Anderson. Mr. Chairman, I have. I have voted through 
the notation process which allows for us to vote by notation. 
It is the process where we can do, and I have done where I have 
indicated my vote via, after comprehensive discussions and 
reading the material, with my counsel, yes.
    Mr. Cummings. Then you instructed your staff to fill in 
your voting card or whatever you use?
    Mr. Anderson. Mr. Chairman, since I have been at the 
Commission, that has been an accepted procedural way to vote at 
the Commission. I have voted, indicated my vote either verbally 
or via e-mail on occasion to my counsel.
    Mr. Cummings. For how many votes did you instruct your 
staff to fill in the blanks on the voting sheets?
    Mr. Anderson. I don't have a count for you.
    Mr. Cummings. Will you get that information for me, please?
    Mr. Anderson. Yes, I will, Mr. Chairman.
    Mr. Cummings. Who meets in the notational process? How does 
that work?
    Mr. Anderson. Generally--and I am happy to have my 
colleagues if they want to add any light to this--since I have 
been at the Commission and it is my understanding that for as 
long as the Commission has been under the current structure, it 
has voted through a notation process by which the purpose of 
these are for administrative or acknowledging. In many cases, 
you are not voting aye or nay. It is just noted that you 
received a piece of information or noting that we have received 
something from outside the agency, for the record that we have 
received that.
    So, in most cases, Mr. Chairman, the notation process, we 
are not actually voting, or in many of the cases. I could not 
give you a percentage. We are voting procedurally just to 
acknowledge some information that has been provided to our 
office by either staff or outside entities. So the notation 
process allows a very seamless functioning of the commissioners 
to vote.
    Generally, these are not on issues. So that I can be clear, 
these are not issues where we voted at hearings or we voted on 
issues where we took public testimony and things of that 
nature. These would be procedural notices to the Commission on 
items that are related to the Commission.
    Mr. Cummings. Is there any time devoted to group 
deliberation with regard to these?
    Mr. Anderson. No, not since I have been at the Commission. 
We have never had a group deliberation on a notation item. That 
is not how the notation process is worked.
    It has been set up. I have been there four years. I do not 
know how that was originally established, but that is the 
procedural way when I came to the Commission, it was identified 
to me as the process of voting at the Commission.
    Mr. Cummings. How much time is required before a vote is 
taken on a notational vote?
    Mr. Anderson. It depends on the item, sir. It could be that 
we have received an amendment to an agreement that just might 
be, for example, an agreement that we monitor. It might be 
adding one company to that liner agreement, and we are to note 
and vote that we have noted that the liner has been added to a 
long list of agreements.
    In other cases, it is again on informational notation that 
we have received a memorandum or something from an outside 
entity, and we are just voting noted that we received that 
information.
    Mr. Cummings. Do you think that notational voting should be 
reserved for emergencies perhaps or is it?
    Mr. Anderson. I believe that it has allowed the Commission, 
since I have been there, to operate in a way that we can 
respond very quickly. The process allows for, in most cases, 
Mr. Chairman, notations, and in some cases, a week before the 
vote is due. In some cases, it is a 24, 48 hours, depending on 
the urgency of the vote.
    Mr. Cummings. Can you give me an idea, and then I will turn 
it over to Mr. LaTourette? Can you give me an idea, just give 
me a range, of what you all earn?
    Mr. Anderson. I believe it is currently $146,000.
    Mr. Cummings. Very well.
    Mr. LaTourette.
    Mr. LaTourette. Thank you very much and thank you for 
coming here today.
    In my opening remarks, I talked a little bit about the 
situation with the Japanese Government. Mr. Anderson or any of 
the commissioners, if you could just talk to me a little bit 
about what some of us perceive to be unfair competition, and 
that is that terminal ownership and port service operations in 
our Country are generally free and open to foreign interests. 
In some foreign ports, however, U.S. individuals interested in 
owning port terminals----
    Mr. Cummings. Would the gentleman yield?
    Mr. LaTourette. Sure.
    Mr. Cummings. It seems like Mr. Creel might be having 
difficulty hearing you. Can you hear, Mr. Creel, sir?
    Mr. Creel. I can hear fine.
    Mr. Cummings. All right, fine.
    Mr. LaTourette. Can you discuss with me just a little bit, 
first of all, the Japanese situation and, second of all, how 
the FMC works with foreign governments to increase assets and 
opportunities for United States' interests abroad?
    Mr. Anderson. Thank you.
    On Japan, the staff of the general counsel has met with 
Department of State staff and a visiting delegation, and we are 
requested to remove the reporting requirements about the 
Japanese port practices. This predates my joining the 
Commission all the way back to 1996 when we first instituted 
the state-owned provisions with the Japanese Government.
    While the FMC is not prepared to do so at this time, I 
would think it would be fair also to hear from my colleagues on 
their points as well because it would be a joint consideration.
    Mr. LaTourette. Mr. Creel?
    Mr. Creel. Thank you, Mr. LaTourette.
    I can speak to this. I actually was around in 1996 and was 
chairman at the time. Mr. Chairman, when we took the action 
against Japan, the problems there, as you know, were a matter 
of access by U.S.-flag vessels or vessels calling in the U.S. 
Non-Japanese vessels were denied entry if they didn't comply 
with certain practices. In other words, there was 
discriminatory treatment for non-Japanese vessels.
    They were also subject to what was called a prior 
consultation process which was deemed by the vessel owners as 
being burdensome, and because that required prior consultation 
with the port authority before changing a port call which is 
not something that is normally done. That proceeding is 
actually still open.
    Just background, a little bit more on that particular 
issue, the Commission did take action and voted against all 
Japanese-flag vessels into the U.S. because of this unfair 
treatment being shown to vessels calling in the U.S.
    That issue, that immediate issue was resolved. There was 
$100,000 per vessel call levy that was posted on all Japanese 
vessel calls. That was addressed through negotiations between 
the State Department and the Japanese Government. Basically, as 
an independent agency, the FMC carries the big stick to be able 
to do this, yet the ultimate negotiations are up to the State 
Department to resolve this diplomatically, and that did happen.
    However, that proceeding is still open. It is my 
understanding that there are still some problems that have not 
been resolved under the agreement that was reached with the 
Japanese. I have just been hearing recently about that.
    As to the NYK terminal operator issue, I am aware of that 
problem or that issue in Florida. I don't want to prejudge 
that, but I will certainly look into that per your suggestion.
    Mr. LaTourette. Well, on that issue, am I correct that NYK 
has made a demand upon or has approached the FMC and demanded 
the right to stevedore its own vessels?
    Mr. Creel. I believe that is right, yes, sir.
    Mr. LaTourette. I would hope it would be the position of 
the Commission, until the Japanese Government lives up to its 
agreement of 10 years ago, that we not modify the agreement and 
give them more, right?
    Mr. Creel. I would just say that back in 1996 when we 
carried out the action that we did, there were a lot of people 
surprised about the agency and how small we are and the 
independent authority we have to address unfavorable treatment 
of U.S. vessels. So we will certainly look into that and do 
what we can do, and we will follow up with you on that as well.
    Mr. LaTourette. I appreciate that.
    Mr. Anderson, in your testimony, you talked about the Ports 
of Los Angeles and Long Beach. I understand you to say that 
they have forward to the Commission an agreement or a proposal, 
is that right?
    Mr. Anderson. That is correct.
    Mr. LaTourette. Does that proposal require action on behalf 
of the Commission, on the part of the Commission? Do you have 
to do something about it?
    Mr. Anderson. We would, yes. It is a marine terminal 
agreement as proposed by the Ports of L.A. and Long Beach which 
includes rate discussions and other areas, and they have made 
this as one of the areas of change of the dynamics of, I think, 
our U.S. intermodal operations between ports, rail, trucks that 
has had a profound impact on the way business is being done in 
ports around the Country.
    In the Ports of L.A. and Long Beach case, they have a Clean 
Air Action Plan that has been proposed by local government that 
the ports must meet over a period of many years. In an attempt 
to meet that, the ports have filed plans and changes in their 
agreements that would require trucking companies to be part of 
the agreement as employee-owned trucking companies. Some of 
these provisions will cause them to come under review by the 
Commission.
    Mr. LaTourette. Does the Commission have the authority to 
reject their proposal?
    Mr. Anderson. We would. Commissioner Creel, any help?
    I believe that they would have to go to Federal court if we 
did not allow the marine terminal agreement to go into effect.
    Mr. LaTourette. That is what I am asking. So they are 
asking for your approval of the agreement.
    My time is expired. Let me just say this. In looking at Los 
Angeles-Long Beach, the clean air goal is a laudable one, but 
in my observation they achieve it by limiting competition among 
who can use the terminal.
    So my question to whoever wants to answer it, one is--and I 
think you have answered it--that you actually have to approve 
it. If you don't approve it, they have additional recourse. But 
I am wondering whether or not what they have submitted to the 
Commission and what the Commission will look at in determining 
whether or not to approve their plan is how the decrease in 
competition or availability will affect the costs associated 
with transporting cargo in and out of the ports.
    I guess yes or no.
    Mr. Creel. Can I answer longer than yes or no?
    Mr. LaTourette. Sure, subject to what the Chairman allows.
    Mr. Creel. We do not have the authority to disapprove the 
agreement, any agreement. We have the authority to go to 
Federal district court to get an injunction to prevent, a 
preliminary injunction to prevent the agreement from going into 
effect. It is a pretty big step.
    We do have the authority to review the agreement for anti-
competitive effects, also to see if there is any prohibition, 
any of the Shipping Prohibitions Act that have been violated. 
We are doing that now.
    There are two agreements on file, one between the two 
ports, L.A. and Long Beach, the other between the two ports and 
the West Coast Marine Terminal Operators agreement. On the 
second agreement, we have asked for additional information. So, 
on that one, the parties have to come back to us with 
additional information. Then the agreement will go into effect 
within 45 days automatically after we receive that information.
    This is something I would like to talk to you about further 
in terms of potential legislative amendments to address that.
    Mr. LaTourette. I would appreciate that.
    Thank you, Mr. Chairman.
    Mr. Cummings. No problem.
    Mr. Oberstar.
    Mr. Oberstar. Mr. Anderson, I want to understand, as you 
are in sort of an acting position, how you manage the day to 
day business. How do you do this? Do you communicate long 
distance with staff when you are not actually at the 
Commission?
    Mr. Anderson. No, sir. Mr. Chairman, I am not acting. I am 
co-chairing.
    Mr. Oberstar. But you are the lead person on the 
Commission.
    Mr. Anderson. Well, no, sir, not actually. I have not been 
confirmed by the Senate. I have been designated as chairman if 
I am confirmed.
    I have taken great care and been very reserved in my 
approach to stepping forward and taking the lead at the agency. 
I think my colleagues and anybody in this industry would agree. 
I felt and many counseled to me was that you are not chairman, 
and I have not acted in that capacity by either projecting 
myself in that manner or have done anything that would lead 
anybody with any reasonable, objective observation to think 
that I was chairman.
    Mr. Oberstar. In the findings of the Inspector General and 
in response to questions from Mr. Cummings, there are long 
periods of time when you are actually physically not present at 
the Commission.
    Mr. Anderson. There are times where I think that, I am sure 
during times of vacation and other personal matters, I have not 
been actually at the Commission. However, I think that, like 
anybody in today's world, I am in constant touch with my staff, 
the staff of the Commission, my colleagues on the days that I 
am not physically sitting in the office.
    Mr. Oberstar. You have mentioned vacation a couple of times 
at least. How many days vacation are commissioners permitted?
    Mr. Anderson. Sir, I think.
    Mr. Oberstar. Who regulates that?
    Mr. Anderson. Presidential appointees are considered to be 
on all the time, and as such they do not have vacation.
    Mr. Oberstar. You don't have any statutory limitation on 
time for leave?
    Mr. Anderson. Sir, my understanding is that when we get a 
time report, that it would show zero hours vacation constantly.
    Mr. Oberstar. So you can be absent physically from the 
Commission but participate in the vote by filling out a sheet 
of paper or a voting sheet and then direct staff to indicate 
the vote, is that correct?
    Mr. Anderson. Mr. Chairman, I have.
    Mr. Oberstar. You and the other commissioners?
    Mr. Anderson. And other commissioners through the notation 
process which allows for that to happen, and there are many 
reasons.
    Again, I want to be clear, getting back to an earlier 
question as to why we do not meet face to face, and there are 
many reasons not to meet in an open meeting that I did not 
clarify in the earlier statement: personnel issues, for 
example, or protected agreement issues or contract and internal 
budget issues where we don't meet openly. Those are several 
reasons and there are others that would be the reason we use a 
notation process. That is my understanding of the Commission.
    Mr. Oberstar. On those kinds of issues, you meet two by 
two?
    Mr. Anderson. That is correct.
    Mr. Oberstar. Mr. Chairman and Mr. LaTourette, that is very 
much like proxy voting which we outlawed here during the very 
first Republican year of majority in the House, took away the 
proxy voting. Maybe we ought to do the same here.
    If you were considering financial issues regarding cruise 
lines or the laws and practices of foreign governments, 
wouldn't you consider that to be important enough to meet in 
Full Committee?
    I don't mean to load all the questions on you, Mr. 
Anderson, since you are a bank of four. Someone else can step 
up and answer.
    I think we have lost the air in this room, but that is all 
right.
    Mr. Creel. Yes, sir.
    Mr. Oberstar. You would meet as four. You would consider 
those in an open session. You would consider that to be 
appropriate.
    Mr. Creel. Yes, sir.
    Mr. Oberstar. Has the Commission taken time to review the 
U.S.-China maritime bilateral and observe whether it is working 
as intended, whether the dwindling American-flag fleet is 
getting a fair shake?
    Speak up. You are all before us. You are certainly not on 
vacation right now.
    Mr. Anderson. I will speak, Mr. Chairman. We regularly talk 
to our Bureau of Trade Analysis.
    I can speak for myself. Every opportunity I have to meet 
with an American executive who is in the foreign trades, 
operating liner vessels and doing business in China, I 
personally ask them how their business access is in China. I 
seek out not only the opinions of our staff, but I seek out the 
opinion of people that are in the business of operating ships 
in those trades because I feel it is very important to get a 
balanced view on what is going on.
    But, yes, we do regularly also as well get briefings on the 
status of that trade.
    Mr. Oberstar. I spent a fair amount of time in 1999, at 
request of the State Department, in negotiation. Members of 
Congress can't negotiate, but it was conversations with 
Minister Pung of the Maritime Administration of China in 
reopening the talks, formal negotiation talks between the U.S. 
and China. I am very happy that ultimately Secretary Mineta was 
able to sign an agreement.
    I think it is a very important matter for the Commission to 
follow up on, but if you are not meeting in open session and 
considering these issues, I wonder what kind of oversight you 
are actually conducting over the trade with this most important 
trade partner of ours.
    Ms. Dye. Mr. Oberstar?
    Mr. Oberstar. Yes.
    Ms. Dye. Before the agreement was signed, the Commission 
had a briefing from the Maritime Administration officials 
which, as you are aware, actually handled the talks.
    Mr. Oberstar. Yes, they actually did the negotiation, 
right?
    Ms. Dye. Yes, the FMC is very interested in providing ocean 
carriers access to the Chinese market.
    We were also concerned that American shipping 
intermediaries be able to do business in China, and I am very 
pleased that the Maritime Administration was able to negotiate 
some entryway for the shipping intermediaries and we were able 
to play a part in that. We continue to monitor that for which 
we are grateful.
    Thank you.
    Mr. Oberstar. I think Mr. Cummings has indicated an 
interest in holding a hearing at a later time on a broader 
range of issues of this nature.
    Let me come back to this matter of the former general 
counsel of the Commission filed an EEO complaint. I understand 
that the Commission hired outside counsel. Did you vote on the 
attorney to retain to defend the Commission?
    Mr. Cummings. Anybody want to answer?
    Mr. Anderson. Yes, Mr. Chairman. I believe we sought 
outside counsel. Under the sole contract provisions, we sought 
out through the Bureau of Public Debts Services. Since the 
Commission is a borderline small micro-agency, we sought their 
advice on seeking a sole-source contract on hiring outside 
counsel.
    At the time that we were informed of the informal filing of 
an EEO complaint by the general counsel, it was Wednesday of 
Thanksgiving. Prior to that, two days before, our only EEO 
employee, our director, since we are a small micro-agency had 
left to go to another agency to take another job at a larger 
agency. So we were without any counsel and advice to the 
Commission, Wednesday before Thanksgiving, and shortly 
thereafter I believe the Commission felt that we needed 
independent counsel to represent us.
    We sought counsel from the Bureau of Public Debts 
contracting process. They authorized us to hire an approved 
employment attorney to represent the Commission.
    Mr. Oberstar. Then the Commission hired an attorney based 
in Ohio. Were there no EEO case experienced attorneys in the 
Washington area? How did the Commission come to reach way out?
    That is not too far. Ohio is really not that far, but it is 
well beyond Washington.
    Mr. Anderson. Mr. Chairman, it was someone that had been 
referred to me, that I did not know at the time.
    Mr. Oberstar. You did not have a personal or professional 
relationship?
    Mr. Anderson. No. It was referred to me by somebody that 
knew this individual as an Ohio super lawyer, well respected 
and former deputy general counsel of the EEOC and referred to 
us. We contacted that person.
    Mr. Oberstar. That person made the reference to you of this 
attorney?
    Mr. Anderson. That is correct.
    Mr. Oberstar. It was not any personal relationship. Okay, 
that said, it is interesting to have that at variance with 
other information we have, but thank you for your response.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    We are very pleased to have with us the Ranking Member of 
the Full Committee, Mr. Mica.
    Mr. Mica. Thank you for yielding and I guess also for 
conducting this hearing.
    It is supposed, I guess, on the fiscal year 2009 budget of 
the Federal Maritime Commission. One of the things that 
concerns me in just listening to this is we find another agency 
without a chairman, the sort of situation we find ourselves in 
with other agencies. How long has the chairmanship been vacant, 
Ms. Dye?
    Ms. Dye. It has been vacant since November, 2006.
    Mr. Mica. So I read under your charter that I guess the 
agency operates by all the remaining members directing the 
business of the Commission, is that how it is?
    Ms. Dye. Yes, sir, that is correct. By statute, the 
authority devolves to the entire Commission.
    Mr. Mica. All the terms are five years. When does yours 
expire?
    Ms. Dye. Mine expires in June of 2005.
    Mr. Mica. What?
    Ms. Dye. In June of 2005.
    Mr. Mica. That is when you started. So it would be 2010?
    Ms. Dye. Oh, 2010. Thank you.
    Mr. Mica. A 2010 expiration.
    Ms. Dye. Yes.
    Mr. Mica. Yours, Mr. Creel?
    Mr. Creel. Mine is next June.
    Mr. Mica. Next June.
    Mr. Brennan. Mine is June 30, 2008.
    Mr. Mica. Okay. Mr. Anderson?
    Mr. Anderson. I am serving currently in an expired term 
after being renominated.
    Mr. Mica. So you still get to serve. The Commission 
positions have to be confirmed too by the Senate, don't they?
    Mr. Anderson. That is correct. I was renominated for 
another five-year term. My term expired June 30th of 2007. I 
was renominated in August of 2007, and I have had a hearing 
before the Senate Commerce, Science and Transportation 
Committee in October.
    Mr. Mica. But they still allow you to serve?
    Mr. Anderson. But it still allows you to serve in an 
expired term.
    Mr. Mica. There must be one vacant or somebody didn't want 
to show up today. One vacant?
    Mr. Anderson. There is one vacant.
    Mr. Mica. Well, it doesn't seem the way to run an aviation 
agency or a maritime agency without somebody designated and 
specifically in charge and confirmed by the Senate.
    I see you asked for a 7.8 percent increase. What is the 
bulk of the increase, Mr. Creel? Do you know?
    Mr. Creel. [Remarks off microphone.]
    Mr. Mica. This is a massive agency, 140 persons. What is 
it? An authorized FTE?
    Mr. Creel. A hundred and twenty-one currently.
    Mr. Mica. How many?
    Mr. Creel. We have about 121 currently onboard.
    Mr. Mica. You have more positions authorized. Then you have 
some vacancies?
    Mr. Creel. That is right. We have a number of vacancies now 
that we are in the process of filling.
    Mr. Mica. But the biggest increase would be in personnel 
costs?
    Mr. Creel. That is correct, the within grade promotions or 
within grade pay increases, the cost of living increases.
    Mr. Mica. You are authorized for 119 positions, and your 
budget asks for 131 and you don't have positions that are 
filled.
    Mr. Creel. That is right.
    Mr. Mica. So what are the new positions you are requiring?
    Mr. Creel. The 16 positions that we are recruiting for, 
they will be filled by the end of the fiscal year. But you 
asked for new positions, right?
    Mr. Mica. Yes. That is what this is about, I think, is 
trying to find out.
    Look at your budget request. It is a 7.8 percent increase. 
You have X number of positions, some not filled. You are 
authorized for 119. You want to go to 131. We want to see what 
you are going to use the money for.
    Mr. Creel. Right.
    Mr. Mica. Mr. Brennan, you are awfully quiet. Do you want 
to say something? We want to pick on everybody equally here.
    Mr. Brennan. If I could, I would like to comment on the 
issue of not having a chairman. I mean, it is like a four-
headed monster.
    Mr. Mica. He said that. Where is the press? He said a four-
headed monster. That was not Mica.
    Mr. Brennan. Well, to put it in perspective, it would be 
like the House of Representatives having four speakers with 
equal authority.
    Mr. Mica. Well, we have nobody in charge.
    Mr. Brennan. That is the position we are in. I mean, we 
need a chairman. I recognize the Chairman. I respect what you 
said on the basis----
    Mr. Mica. I would like to run the Committee without a 
Chairman for a while.
    [Laughter.]
    Mr. Oberstar. Not a chance.
    Mr. Mica. That would be strong.
    Mr. Brennan. But my point is this is one of the problems 
this agency has.
    Mr. Mica. I don't mean to make light of it. It is a serious 
situation.
    The other thing too I notice is it is a small operation.
    I have been very impressed with the Maritime 
Administration. What is his name? Connaughton, yes, he seems to 
be the only one with his act together from this Administration, 
with a vision for transportation.
    I asked the question. I guess at one time, before 1961, it 
was together, the Maritime Administration and your Commission, 
and separated off. Would you recommend any re-look at that and 
then is the Commission too big? Maybe we should go to three. It 
appears it is even difficult to operate with five.
    Any thoughts?
    We will start with Ms. Dye. All of you can respond: Ms. 
Dye, Mr. Creel, Mr. Brennan and Mr. Anderson.
    Ms. Dye. Mr. Mica, I would be delighted to talk with you 
about all those issues and several other policy issues as well 
when you are available. I do have my personal feelings on the 
best way to approach these issues. I am not sure they are 
shared by my colleagues.
    But, of course, there are all sorts of different 
administrative advantages to five-member or three-member 
boards.
    Mr. Mica. So you would keep the five-member board?
    Ms. Dye. Five-member commissions and three-member boards.
    Mr. Mica. You just need somebody?
    Ms. Dye. The Surf Board operates very well over in the 
Department of Transportation with its three members. So there 
are several alternatives.
    Mr. Mica. The question was raised about you not meeting 
enough. How often do you formally meet or did you meet like in 
2007? I have no idea.
    Ms. Dye. We met twice in 2007.
    Mr. Mica. Twice?
    Ms. Dye. Yes sir.
    Mr. Mica. Do you do the rest of the business, as was 
described, through sort of a proxy vote with nobody in charge?
    Ms. Dye. Our notation process actually is authorized under 
a Commission order, so there is a formalized way to proceed 
when we vote on paper by notation. It is employed frequently 
and, of course, much more frequently now that we have all been 
required to participate in each vote on administrative matters 
due to the absence of a chairman.
    Mr. Mica. So keep it the same number and somebody in 
charge. Then what about the question of re-looking at any 
combination of the administration, would the Commission now 
keep it the way it is?
    Ms. Dye. Yes, sir. I believe that the Federal Maritime 
Commission can operate to the advantage of the American citizen 
with some changes.
    Mr. Mica. Mr. Creel?
    Mr. Creel. Yes, sir. I agree, as well, with Commissioner 
Dye.
    Anyway, I believe that we should keep the Maritime 
Administration and the Federal Maritime Commission separate 
because they were separated for a reason and that still stands 
today.
    Mr. Mica. You are the regulators.
    Mr. Creel. We are the regulators. They are the promoters of 
the industry. And so, it would seem that those two things 
together were inconsistent. I think those reasons are still 
valid.
    I think it is also critically important to retain the FMC 
as an independent agency. As we were talking about earlier with 
Mr. LaTourette, it gives us the ability to take independent 
action against the vessels of foreign countries if they are 
doing something that is offensive to vessels that call in the 
U.S. or U.S.-flag vessels.
    That is a very unique authority, and I think that retaining 
that authority is essential, and I think that the shipping 
public would agree with that.
    Mr. Mica. Most of the goods coming into the United States 
are foreign-flagged and almost all the cruise ships, foreign-
flagged.
    Mr. Creel. Absolutely.
    Mr. Mica. Also, somebody said 90 percent of the imported 
goods that enter the United States are on those vessels.
    Mr. Creel. That is right. About everything you see around 
you, maybe not in here but that is in commerce today in the 
United States was brought on a ship, especially anything that 
is not extremely high value that would be on an airplane.
    Mr. Mica. You are the only agency then that is vested with 
the responsibility for regulation in that regime?
    Mr. Creel. That is correct from the trade aspect.
    Mr. Mica. Mr. Brennan, I don't want to take too much time.
    Mr. Brennan. I share much of what he said. I mean, I think 
we are meeting our principal responsibility, and that is 
oversight over the carriers who have an exemption from 
antitrust, meaning they can get together and talk about rates. 
I think we have been effectively meeting that responsibility.
    Mr. Mica. Mr. Anderson?
    Mr. Anderson. I believe too, Mr. Mica, that the Commission 
is fulfilling a very necessary responsibility.
    Coming from the maritime industry, as you may recall, 
working for a United States Jones Act company for 10 years in 
the operation of vessels, I have seen it from both sides, and I 
believe that the Commission fulfills a very important role, 
also consumer protection with the cruise lines and some of the 
other areas as well as a very unique niche that we have in the 
maritime security where we contribute to Customs and Border 
Patrol and Homeland Security efforts.
    Mr. Mica. Thank you.
    Mr. Cummings. Mr. Bishop.
    Mr. Bishop. Thank you, Mr. Chairman, and thank you very 
much for holding this hearing.
    I am struck by the juxtaposition of three things: one, a 
Federal Human Capital Survey that suggests very poor morale on 
the part of the workforce of the Commission; second, I guess an 
understanding buttressed by testimony this morning that the 8-
hour work day and the 40-hour week are exceptions rather than 
the norm for commissioners; and then, finally, a 10 percent 
increase in staff which I know the raw numbers are small, but 
we have precious few departments across the span of the Federal 
Government that are increasing their staff by 10 percent in any 
1 year outside of the Pentagon and perhaps the Department of 
Homeland Security.
    I think one of the basic precepts of management is if 
morale is poor, staff performance is less than optimal. I think 
another precept of management is that if the staff perceives 
that they are working harder than their leadership, that serves 
to be a disincentive for them to put out their maximum effort.
    And so, my question is: Is a 10 percent increase in staff 
absolutely essential or, with better leadership, with more 
commitment from the commissioners and better personnel 
management practices, would you have a more productive staff 
and thus not need to increase the staff by, as I say, what is a 
very generous percentage in this climate?
    I will put that to any one of the commissioners.
    Ms. Dye. Mr. Bishop, we are not actually asking for 
increases in staff levels. We have lost a lot of people, and so 
we are working hard right now to backfill and get those 
positions filled again.
    Mr. Bishop. If I may, my understanding is that the enacted 
budget for fiscal year 2007 authorized 119 full-time equivalent 
positions and the proposed budget authorizes 131 full-time 
equivalent positions. So that is where I get the number of the 
10 percent increase in staff.
    Ms. Dye. Staff tells me that 119 was our actual level, not 
the authorized level.
    Mr. Bishop. So the 131, you are saying, does not represent 
a growth, that that is the baseline and 119 represents 
attrition and vacancies that have not been filled?
    Ms. Dye. Yes, sir, I believe that is correct.
    Mr. Bishop. But would you believe that the Commission is 
functioning appropriately at the level of 119?
    Ms. Dye. No, sir.
    Mr. Bishop. I am sorry.
    Ms. Dye. No, sir. I believe that we do actually need to get 
back up to strength, to fill those positions.
    Mr. Bishop. Let me ask this question. The management study 
that was conducted spells out some pretty compelling 
challenges: lack of trust, lack of leadership, lack of vision, 
opposition to change, poor information management and lack of 
interaction between the commissioners and the staff. Do you 
agree that those findings are accurate and, if so, what do each 
of you intend to do about a condition that I think any 
reasonable person would consider to be unfortunate, if not 
extremely difficult?
    Ms. Dye. Unfortunately, Mr. Bishop, I do agree that many of 
those things are true, and I am ready and willing and anxious 
to change the work environment at the Commission, and I 
appreciate your question.
    Mr. Bishop. I thank you for that response, and I don't mean 
to put you on the spot, but are there impediments that 
constrain your readiness or your eagerness to put in place the 
kinds of changes that would need to be made?
    Ms. Dye. No, sir, not on my part. There are no impediments 
on my part.
    Mr. Bishop. So, may I ask then why it has not happened?
    Ms. Dye. I believe that the commissioners need to work 
together and make a conscious decision together with a focus to 
change that environment, and I believe that we can do that.
    Mr. Bishop. Do you believe that the commissioners need to 
be more physically present than they currently are in order for 
that focus to be realized?
    Ms. Dye. I believe that we can. Yes, sir, I do.
    Mr. Bishop. All right. How about the rest of your 
colleagues?
    Mr. Creel. Yes, sir, if I could just go back for one second 
to clarify a little bit on the numbers, the employee numbers.
    Mr. Bishop. Okay.
    Mr. Creel. One thing that I forgot to mention earlier to 
Mr. Mica was we don't have the chairman and the chairman's 
staff. That makes up some of the numbers. Also, we are a 
commissioner and a commissioner's counsel short too. So that 
also fits into the mix.
    Let me tell you. I have been at the Commission for 14 
years. I was the longest serving chairman, under President 
Clinton.
    I have a personal affinity for the place and the people 
there. I know the people individually. I know their personal 
stories. They come to me and talk to me about work issues and 
even about personal issues sometimes.
    The worst thing I have heard here today is the lack of 
confidence and the lack of happiness about the employees 
working there. When I first came on, I was really amazed at how 
dedicated the staff is there, and I mean that from the bottom 
of my heart.
    We have lost some people that were damn good employees and 
should not have gone and, yes, it is our fault.
    Granted, we have had an awkward situation. We don't have a 
chairman. We kept thinking we were going to get a chairman. 
That issue bled over into a lot of different areas including 
management and the perceived role of employees of the agency.
    I think we have turned a corner. I know that we are making 
an effort to do that. As Commissioner Dye said, it starts with 
us. Poison goes downhill, and people pick it up. If we are 
having issues, they pick it up, and that is not fair.
    We need to act like grownups, address our issues and do 
what is in the best interest of the government, of our 
constituents and the people that work there. I mean you look at 
the number of people that have been in the agency for 20, 30 
years. I mean it is phenomenal, and we have a responsibility to 
honor that and to make them enjoy where they work and to feel 
like what they do is worthwhile.
    And so, I am the first one to admit the problem starts here 
and it should stop here. Whatever we need to do to make it 
work, I am committed to doing that. I know the rest of us, of 
the commissioners are.
    We will report back to you on this. You are right in 
deserving an explanation on that capital survey. So anything we 
can do to address this, I will personally commit to.
    Mr. Bishop. Thank you.
    Mr. Chairman, I know my time is expired. I just want to say 
that my understanding of this very depressing survey is that it 
was taken at around the time the prior chairman left. So let me 
just caution all of you that we ought not to view the absence 
of the chairman as the principal reason why morale is as low at 
least as it appears to be. Whatever the reasons are, they go 
far beyond the absence of a chairman.
    Thank you, Mr. Chairman. I appreciate your indulgence.
    Mr. Cummings. Thank you, Mr. Bishop.
    Let me go back and just follow up on what Mr. Bishop said 
and was asking and go to you, Mr. Brennan and you, Mr. 
Anderson.
    Mr. Anderson, particularly you, since you are right in line 
to be the chairman, I am sure the findings of this survey must 
concern you. This survey has been out since 2006. When did you 
come on board?
    Mr. Anderson. In 2003, the end of 2003.
    Mr. Cummings. What are your plans?
    Ms. Dye and Mr. Creel have committed to trying to improve 
on this situation, and I am so glad that they did not pooh-pooh 
the feelings of employees, and I really appreciate that. These 
are human beings with families, who work hard every day and 
give the government their blood, their sweat, their tears, and 
they deserve to be able to come into a working environment that 
they feel good about.
    All of us know that no working environment is going to be 
perfect, but when you have pretty much half of your employees 
saying they don't like where they work or they feel that the 
leadership is not at all motivational or what have you, it 
should concern all of us.
    And so, Mr. Anderson, since the President wants you to be 
the chairman, I am just wondering what you plan to do. First of 
all, what do you think of the survey?
    Mr. Anderson. Mr. Chairman, I think that the survey is 
disappointing, but again I am not that familiar with the 
numbers. It did take place in 2006 when it was reported. I 
think there is obviously room for improvement.
    I come from, as you know, the private sector, and I have 
been so impressed with the quality of the people that I have 
been able to work with while in government. It has been an 
honor to serve with people that are dedicated. We have 30 and 
40-year employees at the agency.
    To clarify it, the reason a number of the vacancies that 
took place that we currently have are because of retirements 
which I think all government agencies are facing with the Baby 
Boomers starting to retire. We have lost some good people, but 
there is room for improvement.
    My philosophy in leading, Mr. Chairman, is very simple. 
First, any organization, whether it is private, public, your 
church or what have you is only as good as the people that work 
there. If they are not happy, it is hard to be a good, 
efficient, working operation in a government agency or a 
business.
    I also believe in continuous improvement. There is plenty 
of room for improvement to get where our people are happy. If 
you are happy where you work, it impacts every other area of 
your life, and that is my sincere belief. You are happy at 
home, and you are happy with your family. Work is very 
important.
    I would strive very hard to provide the necessary 
leadership by having management meetings on a regular basis, 
interacting with the employees. Something I learned from an old 
boss of mine, he was 78 and he used to call it management by 
walking around, talking to people, finding out. What is the 
clerk that you never see? What are they thinking?
    The other area that I would see is bringing in industry 
experts, which they are glad to do. I have recently spoken, of 
course with the permission of my colleagues, to the cruise 
industry president of CLIA to come up with his staff and have 
an all day meeting with the Commission to talk about industry 
trends.
    Also, I have talked to some other industry professionals 
from the World Shipping Council. Can we bring them in so that 
we are getting some of the best leading-edge people that are 
out there in the industry operating to help us better 
understand what is actually happening? It is very difficult to 
just read and understand what the industry is about.
    I also believe that I would foster people getting out and 
seeing the industry, where we could go out and visit ports, 
visit marine terminal operators and have industry professionals 
sort of share with us what they do on an ongoing basis in the 
all important area of trade for this Country. Intermodal trade 
is critical to the future of this Country.
    Mr. Cummings. Let me ask you this, can you all do some of 
those things now?
    See, what is happening is I don't know when the Senate is 
going to do their thing. I don't have a clue. In the meantime, 
we have people who have to come to work every day, and you 
mentioned some nice things.
    Let me tell you one of the things that concerns me and has 
always concerned me about hearings is that folks will come in 
here, they will make commitments, and then we may not hear from 
them for another two years. They know the players are going to 
change, and so the next thing you know it is the same old, same 
old over and over and over again.
    One of the things that the Chairman has emphasized to us 
and I have learned it from him is to try to stay on top of 
these issues. That is when the commitments are made, make sure 
commitments are kept.
    So I am going to ask you all since you all are acting 
jointly and you all do all this voting, however you may do it, 
that you do some the things that you just said. Will you do 
that, the four of you?
    Mr. Anderson. Mr. Chairman, I will give you my commitment. 
If your staff has the time, I will come back in, whether I am 
chairman or not, while I am at the Commission and meet with 
them and give them updates.
    Mr. Cummings. Why don't we do that? Why don't we get an 
update, say, in two months? How about that?
    Mr. Anderson. That is great.
    Mr. Cummings. From today.
    Mr. Anderson. That is great.
    Mr. Cummings. Let me ask you this. Let me tell you what 
really concerns me, though, Mr. Anderson. Then I will ask Mr. 
Oberstar if he has anything else.
    Let me tell you what concerns me, something you just said a 
moment ago. I asked you about this survey, and you--correct me 
if I am wrong--indicated that you were not that familiar with 
it. Is that what you indicated?
    Mr. Anderson. I am familiar with the capital survey. At 
first, when another member, forgive me.
    Mr. Cummings. Mr. Bishop.
    Mr. Anderson. Mr. Bishop mentioned a study, and I wasn't 
aware of a study.
    I am familiar with the capital survey that was done. I 
believe that was done Government-wide two, two and a half years 
ago, and I think the results that you are quoting from are from 
that capital survey. That was widely distributed through the 
agency, and we had numerous reminders of people to participate 
in the survey.
    However, we did not get, during that time, and I am not 
trying to project this onto the former chairman there, but we 
didn't get a lot of that kind of information back to us. That 
is one area where it would have been very helpful.
    A number of us and a big advantage to having co-managed 
here, Mr. Chairman, is that we have had the ability to learn a 
number of things within the agency that ordinarily 
commissioners were not getting the benefit of knowing about.
    Mr. Cummings. I want to yield to Mr. Bishop.
    Mr. Bishop. Thank you, Mr. Chairman.
    Mr. Anderson, you just said something that causes great 
alarm for me, and I just want to make sure I understood you 
correctly. I referred to a management study conducted by Don 
Cole. If I heard you correctly, you just testified that you 
were unfamiliar with that study. Is that correct?
    Mr. Anderson. Yes, I am.
    Mr. Bishop. Now it is my further understanding that Mr. 
Cole has a lawsuit pending against the Commission because he is 
alleging that he has not been fully paid over a three-year 
period.
    So, one, I am to understand that a management study was 
conducted of Commission staff about which commissioners or at 
least you, Mr. Anderson, are not aware and, secondly, that 
study has resulted in a lawsuit about which commissioners are 
also not aware. Am I correct in both of my understandings and, 
if I am correct, could you please tell me how this state of 
facts could come to be?
    Mr. Anderson. Mr. Chairman, I can answer for myself. I am 
not aware of the study you are referring to. It was in late 
2006. It came to our attention that a management consultant who 
had previously worked solely for the previous chairman wanted 
to meet with the Commission to extend a contract, a contract to 
which we had never known about nor previous knowledge because 
he worked solely at the discretion of the previous chairman.
    It was my understanding, as it was explained to me, that he 
was the chairman's personal consultant. Whatever that may mean, 
I was not privy to the management study that you are referring 
to.
    Mr. Bishop. If I may, is your understanding shared by your 
three colleagues? Do any of you have any knowledge of this 
study and of the lawsuit that goes beyond what Mr. Anderson has 
just said?
    Mr. Brennan. Mr. Congressman, if you are referring to a 
Cole study for which the government spent $200,000, to the best 
of my knowledge, there was no formal written report and, 
secondly, there is no pending lawsuit. There was some dispute, 
and I think, along with what Mr. Anderson said, this was pretty 
much done by the prior chairman on his own determination.
    I do not think there was anything in writing whatsoever. 
That is correct. There is nothing in writing, nothing, zero.
    Mr. Bishop. Mr. Creel?
    Mr. Creel. I have not seen a Cole report.
    I can give you a little background, and, again, I think we 
have to be a little careful here because there is the potential 
for litigation here. A little bit of history, this contractor 
started back in, I think it was, 2003. It was under the 
auspices of the chairman who did the hiring and hands-on 
administration of the contract.
    There were a couple of problems with the way the FMC 
handled that. I am not trying to put the blame, but we 
Commissioners weren't involved in this contracting, but the FMC 
did not handle that correctly according to our Inspector 
General who has done an audit of that contracting process or 
procedure.
    Again, to be a little careful here, so the agency did a 
couple of things wrong in the way it set up the contract. I 
think, first and foremost, there were no deliverables. This 
agreement, I mean this report, I am not familiar with.
    Mr. Bishop. I am going to interrupt you. I am told by staff 
that there is, in fact, a written report, that we in fact have 
a copy.
    Mr. Creel. I would like to see it.
    Mr. Bishop. I am sure the Chairman would be happy to share 
it.
    Mr. Cummings. We would be happy to get it to you.
    Mr. Creel. I am sorry.
    Mr. Bishop. I am taking too much of the Chairman's time, 
but let me just say that this, if nothing else, seems to me to 
underscore the necessity of the four of you meeting together, 
all four of you, much more frequently than is currently the 
case. If that requires compliance with Sunshine Laws, then so 
be it.
    I think the fact that there is so much going on that some 
of you seem to be hearing about for the first time today and 
some of you seem to have a level of knowledge that eclipses the 
level of knowledge that some of your colleagues have, and I 
find it just shocking, frankly, that the four of you don't all 
have the same level of knowledge. I think an easy way to help 
remedy that is to simply meet more often and share what you 
each know with one another and then share it with your staff.
    Thank you, Mr. Chairman. I yield back.
    Mr. Cummings. Thank you.
    Ms. Dye, have you seen the report, the Cole report?
    Ms. Dye. Mr. Chairman, I do remember a majority commission 
vote which actually suspended Mr. Cole's contract before he was 
able to come to Washington to deliver his final report to us.
    Mr. Cummings. Go ahead.
    Ms. Dye. If I remember correctly, that is why we didn't 
receive his final report on that.
    Mr. Cummings. Well, we do have the report.
    Ms. Dye. I would very much like to see it.
    Mr. Cummings. We will get it to you, get you a copy.
    Before going to Mr. Oberstar, I just want to echo what Mr. 
Bishop just said, and he basically went down the path that I 
was traveling.
    I think that, Mr. Anderson, the reason why it concerns me 
about this lack of knowledge of the report and whatever, if 
there is anything that has the ability to take the foundation 
out or effect my agency that I am about to head or I am 
interested in heading, I make it my business to know about it. 
I mean I don't think there is anybody in this room who would go 
into a situation where they did not have complete knowledge of 
what they were about to head. It doesn't make sense, and that 
concerns me. It also concerns me.
    I am not going to repeat what Mr. Bishop said because he 
said it eloquently, but we have to do better. We really do.
    Mr. Creel, you said you have been around for 14 years. If 
people saw this on C-SPAN, knowing that we have folks making 
140 some thousand dollars. I mean the people in my district, if 
you were making $80,000, they would think that was a lot of 
money.
    But to hear some of the testimony that we have heard today 
is quite concerning. It should concern all of us. It really 
should. I can understand, as Mr. Bishop has said, if you are 
not meeting, I think it just leads to this dysfunctional type 
situation.
    Mr. Oberstar.
    Mr. Oberstar. Excuse me, Mr. Chairman. I am a little 
distracted about a rather disturbing development. One of the 
presidential candidates is proposing to suspend the gas tax for 
this summer, and the tens of thousands of jobs that we will 
lose as a result of that makes $36,000 alterations on the 
chairman's office sound like peanuts.
    But that decision was made. Who made that decision if you 
commissioners didn't come together and vote on it? Mr. Creel?
    Mr. Creel. Yes, sir. That was made by or the decision was 
made by our Office of Administration, I think, as part of the 
normal replacement of furniture.
    Having sat in those chairs myself for a number of years, it 
was time to replace them. In fact, the conference table was 
former Chairman Helen Bentley's dining room table and some of 
the upholstered furniture was former Chairman Elaine Chao's.
    Mr. Oberstar. She wouldn't mind donating. She would get a 
pretty good tax break from that.
    Mr. Creel. We don't have a cook anymore, though.
    But no, seriously, it was my own personal belief that it 
probably would have been better to replace that furniture 
before getting a new chairman as was part of normal 
replacement. I mean it was on the schedule to be replaced 
anyway.
    Mr. Oberstar. But it is not that the commissioners didn't 
act on it. You knew about it. You just didn't vote on it or you 
didn't have a formal meeting to discuss this.
    You said this is normal procedure that the executive 
director, senior executive service person makes that decision 
without confirmation by the Commission?
    Mr. Creel. Well, it is part of a plan to replace furniture 
throughout the agency.
    Mr. Oberstar. Well, where did the money come from to do 
that?
    Mr. Creel. I believe that was from savings from attrition 
that we had over the course of the year and that there was no 
chairman.
    Mr. Oberstar. The loss of jobs and loss of personnel meant 
that the Commission wasn't paying that out in salary to staff. 
Therefore, you took that money to commit it to furniture 
upgrade or replacement.
    Mr. Creel. I believe so.
    Mr. Oberstar. I don't have any problem with upgrading 
furniture and you ought to have a decent place in which to 
work, but it is the process by which this is done.
    Mr. Creel. I agree with you, and this certainly brings it 
home that we have to start working together as a group and 
realizing that this is likely to be the scenario. I mean early 
on.
    Mr. Oberstar. That is a significant statement: working 
together as a group. You have four very intelligent people. I 
have known Ms. Dye since the time she served on the Merchant 
Marine and Fisheries Committee staff and then on the staff of 
this Committee.
    I have known Mr. Brennan from the time he served in 
Congress, all too briefly. He should have stayed. He would be 
on this panel, asking questions.
    Mr. Creel, I remember your previous service.
    You are very capable people. You ought to be able to get 
together and figure these things out and work as a Commission 
without a chairman. You have a headless horseman here, but you 
can do this work.
    Mr. Brennan?
    Mr. Brennan. If I might comment, we expected from month to 
month that there would be a chairman. The chairman does the 
administrative work.
    As I said before, you folks couldn't run the House of 
Representatives with four speakers. You know it is tough enough 
with one speaker. That is a problem, but it is no ongoing 
excuse. We have to address it.
    In regard to furniture, so the idea won't be there that we 
are going crazy, I have been there eight years. We have 
acquired one map. That is it.
    Mr. Oberstar. Well, it is a pretty sad state of affairs the 
way the Commission has to be run. But, look, just take hold of 
it. Will you? Take charge of this Commission. It is an 
important function.
    We are going to have a subsequent hearing on the 
substantive matters with which the Commission is entrusted, and 
Mr. Cummings is preparing for that. Mr. LaTourette, I am sure, 
relishes the opportunity. I do, and I look forward to having 
that hearing.
    Be prepared.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Creel, you look like you are getting ready to jump out 
of your seat. Did you want to say something?
    Mr. Creel. I am sorry. I didn't mean to look like that.
    Mr. Cummings. That is all right.
    Mr. Creel. Mr. Chairman, I just wanted to say, back to the 
personnel and their satisfaction, one thing that I have noticed 
over the course of the years there that is frustrating, both 
from this level and also from the level of those in the jobs, 
is that there is a lack of upward mobility. Some people that 
have been there for years and years and years, who are 
extremely capable and know the industry know their jobs, know 
the agency, but there are not necessarily positions for them to 
move into.
    That is something that I don't know how we address it, but 
I would like to address it. I can think of a handful of people 
right now that are extremely qualified for other jobs that 
aren't there.
    Mr. Cummings. I think that perhaps, going back to something 
Mr. Anderson said, maybe when you all bring in some of these 
outside experts. The cruise industry, I think you mentioned, 
people that seem to be doing it right. Perhaps they can give 
you some information that might be helpful.
    I think there are a lot of agencies, private and public, 
that have that problem. There are people that have studied this 
thing and found ways to keep people motivated and so forth and 
so on. I just hope that you will do the things that you said, 
Mr. Anderson.
    I was just telling Mr. LaTourette that I am sure it does 
create a problem when you are trying to operate with four 
people, but there is some kind of way that we still have to 
operate. And so, I hope you will take heed.
    Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman, and I want to 
thank you all for your testimony today.
    One of the reasons that I like working with Chairman 
Cummings is that he has taken Chairman Oberstar's observation 
that we shouldn't just have hearings and then everybody goes on 
their way and comes back a couple years later and we find 
ourselves in the same position. So I welcome his observation 
that we will get a report back within 60 days, and I look 
forward to the Commission embracing some of those changes.
    I am also cognizant of the fact and in my conversation with 
the Chairman that it is not unusual for a commission or a board 
or an agency in the Federal Government, at the wind-down of an 
administration, to be short some members. There aren't a lot of 
people that are jumping at the opportunity to get a six-month 
assignment before the new administration comes in.
    But I do want to focus on this Cole report for just a 
second because this hearing, I think, has indicated that the 
Commission can do better in its oversight just as the Congress 
can do better in its oversight, but I am not a big fan of 
coming to hearings and finding out something for the very first 
time.
    So my question to each of you, and I think you have 
answered it, but before coming to this hearing today and either 
hearing Mr. Bishop's questions or the Chairman's questions, 
were you any of you aware that this Mr. Cole, whomever he 
happens to be, had submitted something in writing?
    Mr. Anderson, did you know that?
    Mr. Anderson. No, I was not aware there was any report in 
writing.
    Mr. LaTourette. Mr. Brennan, I think you said.
    Mr. Brennan. I was not. The general counsel, he is not 
aware of it.
    Mr. LaTourette. Mr. Creel?
    Mr. Creel. No, I am not. I am not aware of that.
    If I could also make a point on the Cole contract, to make 
the other side of the point, I was saying the agency had some 
shortcomings in the way it handled the procurement. I feel very 
strongly about where the majority of the Commission is on this 
issue, and that is to seek $56,000 in reimbursement which is 
being very liberal and giving Mr. Cole a lot of leeway.
    There were no receipts for a number of things. There were 
invoices that said just professional fees and travel, no hotels 
or no airlines or some airlines, some hotel receipts. He would 
charge $2,000 a day when he did one thing as opposed to $250 an 
hour. It was always billed in increments of a half day at 
$1,000 or $2,000.
    Anyway, I feel very strongly that what we are doing is in 
the best interest of the government and the people to recover 
that money. So I want to make that clear.
    Mr. LaTourette. All right. Thank you.
    Ms. Dye, just the same question, before coming here today, 
were you aware that this Mr. Cole person had put something in 
writing?
    Ms. Dye. I was not aware of a specific report in writing, 
but I was aware that he had a final report that he was prepared 
to give to the Commission. As I said before, I wanted to see 
the work that he had, that the government had paid for at that 
time, and I look forward to seeing it from the Committee.
    Mr. LaTourette. But, basically, that report wasn't 
forwarded to the Commission because there was some dispute 
between the Commission and Mr. Cole as to whether he should be 
paid and how much he should be paid.
    Ms. Dye. Following an Inspector General audit of the 
contract, the contractual arrangements for his payment, the 
Commission voted to suspend the contract. Since his contract 
had already expired, the Commission's vote cancelled his final 
visit at which time he would have delivered a report. Whether 
or not that report had been formalized in writing at that time, 
how he would have delivered that, I am not aware.
    But, as I said, I wanted to see it then; I would be 
delighted to see it now.
    Mr. LaTourette. I think we would all want to see it.
    Mr. Chairman, I would just say that apparently the staff 
has a copy of Mr. Cole's report. You are going to give it to 
the Commission. I think we would all be anxious to take a look 
at it.
    I do have to say what I am hearing here is that you have a 
contractor who was hired by the former chairman outside of the 
normal way that somebody should have been hired. He has been 
paid a lot of money. Mr. Creel at least, the longest serving 
chairman in the history of the Commission, thinks that there is 
some discrepancies in the bill. Apparently, after his contract 
was not renewed and his report was not delivered, he is seeking 
payment and has delivered the report to the Committee and not 
the Commission.
    To me, that seems a little fishy, and I would just ask if 
we are going to have a follow-up hearing, perhaps we could ask 
Mr. Cole to join us and not only share his thoughts on the 
operation of the Commission but also his activities and how he 
chose to bill the government for the services that he has 
billed the government for.
    I thank you, and I yield back my time.
    Mr. Cummings. Thank you.
    Let me just say this, Mr. LaTourette, and I am glad you 
raise the issues that you did. I was just checking with the 
staff to find out how we got the report, and they tell me we 
got the report from the Senate staff because they had it 
connection with the confirmation of Mr. Anderson. So we will 
make sure you get it and the commissioners get it.
    Mr. Mica.
    Mr. Mica. When did you get nominated, Mr. Anderson, for 
chairman?
    Mr. Anderson. It was in August. I believe it was 15th of 
2007.
    Mr. Mica. In 2007, but there has been no chair since?
    Mr. Anderson. November of 2006.
    Mr. Mica. Unbelievable. I mean I can't blame the 
Commission, but imagine trying to run a Subcommittee without a 
Chairman. Imagine trying to run a Committee, an administration.
    It is a small operation that only has, what, 100 and 
whatever number of employees. People talk about having low 
morale and disgruntled employees when there is no one in 
charge. I just can't imagine. It is not your fault. There is 
something wrong with this process of not being able to have 
someone in charge.
    I won't get into that. I tried to find out a little bit 
about what you wanted to do with some of the additional money.
    One of the things that impresses me with your mission is 
you are responsible for an important role, and that is 
oversight and regulation primarily of the foreign shipping 
activity because, again, there are so many flagged vessels and 
cruise ships and others that are outside U.S. flagging.
    I would like to ask all four of you a question about how is 
there any possibility or any way or what could we do to 
increase U.S. employment, U.S. flagging, U.S. recapturing of 
some of this segment of the international maritime and shipping 
business. Are there any things that can be done or is this just 
something we have lost forever?
    I like to pick on Ms. Dye, and we will go south from there.
    Ms. Dye. Yes, Mr. Mica. One of the reasons that we reformed 
the Ocean Shipping Act in 1998 was to support and encourage 
greater U.S. exports.
    I have been talking recently to the staff and Commissioner 
Creel and I had a brief conversation about the fact that lately 
and ironically, because of the fall of the dollar, that U.S. 
exports have increased although imports still dwarf the 
percentage of exports, but that is very encouraging to us. I am 
interested to make sure that the Commission is doing everything 
it can to make sure that containers get where they need to be, 
so U.S. exporters can keep that sale and get their goods to 
their foreign markets as soon as possible.
    So, yes, I think that we are always on the lookout to make 
sure that our U.S. businesses get as great a share of the 
worldwide marketplace as possible.
    Mr. Mica. Mr. Creel, you have been around a while. Any hope 
of us getting back into the market and anything we can do?
    Mr. Creel. Mr. Mica, it is all a matter of dollars, of 
course. There are tax incentives for U.S. owner-operators. 
There is a U.S. build requirement. Talking about the Jones Act, 
it is just domestic, U.S. build, U.S. crew requirements. I know 
that even some of the U.S. maritime unions have offered to be 
competitive on wages, and I think that would be helpful.
    It is hard to compete on the shipbuilding issue with 
foreign countries that subsidize their shipbuilding so heavily 
or their ship operations as well since we don't subsidize that.
    Mr. Mica. One of the things I have tried to encourage--I 
will inject it since you didn't get a chance--is transit by 
short sea shipping because we have so much potential on the 
coast and waterways to increase the volume and take it off the 
highways. It certainly has to be much more fuel efficient when 
a trucker now spends $1,000 to fill up his or her tank and also 
the damage that is done.
    I am going to hold a little forum and try to get some more 
interest in short sea shipping which we might get a few more 
people involved. It might make sense, and it may be attractive.
    Mr. Brennan?
    Mr. Brennan. I would just say 20 years ago, when I was 
serving on the House Armed Services Committee, there was great 
discussion and concern about losing the capacity to have 
American ships, losing the skills. Twenty years later, I am not 
sure any progress has been made.
    What can you do about it? I don't know. Maybe some 
variation of the Jones Act. I think that spells protectionism 
and things of that sort and all the ramifications that take 
place from that.
    Mr. Mica. Okay. Mr. Anderson?
    Mr. Anderson. Yes, Mr. Mica. Coming from maritime 
operations, it has been part of my background and a Jones Act 
industry. The Jones Act has served a very necessary purpose 
over the last century for many reasons, but as we have seen at 
the Commission, global dynamics change the way some things 
should be looked.
    I believe, as some of my colleagues have indicated, it is 
all about the dollar of operating U.S.-flag ships versus 
foreign-flag ships. I think the tax incentives that have been 
in the past have been helpful.
    But I think looking at one possibility is looking at the 
consideration of allowing foreign-built ships to be U.S.-flag 
and operated by U.S. crews. I think that is an area that we 
could. I know our maritime academies are full. They can't 
handle any more capacity. That is something that I think is a 
good indication for the future for U.S.-flag.
    You mentioned short sea shipping on marine highways. Today, 
there is a conference for that in Norfolk, today and tomorrow, 
on short sea shipping. I know this Committee approved some 
funding. I think that is critical to the long-term 
infrastructure needs of the United States' transportation 
system as well as promoting more U.S. seaborne jobs for our 
union workers and for United States citizens.
    Mr. Mica. Well, I don't get to see a four-headed monster 
too often, Mr. Chairman. Actually, they don't look bad. 
Personally and individually, they are of fairly attractive 
countenance. But operationally, it is a nightmare as we heard 
described.
    I don't know what to do. We need to get somebody in charge 
and get the agency back on track.
    Thank you. I yield back.
    Mr. Cummings. Thank you very much, Mr. Mica.
    Let me just say this as we close. I want you to understand 
that one of the people that I have just gained a phenomenal 
amount of respect for is Sean Connaughton. I think he is one of 
the best things you all have going, seriously. He has been 
extremely responsive.
    I have listened to him talk about educating folk, our kids, 
so that they can move into the maritime industry, and he seems 
to be very, very committed.
    And so, when you all talk about people working in the 
agency that are committed, if he is an example of the type of 
people you are talking about, Mr. Creel, I got to tell you, you 
are talking about one of the finest people that I have met 
since I have been in the Congress, and I have been here now 
some 13 or 14 years.
    The other thing that I wanted to say is on the short sea 
shipping thing. I want to make sure. I agree with Mr. Mica. It 
is something that we definitely need. We have been pushing on 
this end, trying to do everything that we can, and I agree with 
Mr. Anderson that it would be a tremendous boost for all of us.
    I was just asking staff. We have some legislation in Ways 
and Means now on short sea shipping. We haven't been able to 
get it moved, but we understand that maybe they are waiting for 
a bigger vehicle to include it. It is something that just makes 
sense to me, a lot of sense.
    Did you want to say something, Mr. Creel?
    Mr. Creel. I like short sea shipping because I travel on I-
95 a lot.
    Mr. Cummings. Is that right?
    I made a mistake. Mr. Connaughton is the head of MARAD, and 
I just want you to know that he is a good man.
    This hearing is adjourned.
    [Whereupon, at 11:55 a.m., the Subcommittee was adjourned.]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




