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



 
  SUCCESSES AND CHALLENGES OF THE INTERAGENCY GROUP ON INSULAR AREAS

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


                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON INSULAR AFFAIRS

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                        Thursday, July 17, 2008

                               __________

                           Serial No. 110-81

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

              NICK J. RAHALL, II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Chris Cannon, Utah
Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin         Jeff Flake, Arizona
    Islands                          Stevan Pearce, New Mexico
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
Jim Costa, California                Louie Gohmert, Texas
Dan Boren, Oklahoma                  Tom Cole, Oklahoma
John P. Sarbanes, Maryland           Rob Bishop, Utah
George Miller, California            Bill Shuster, Pennsylvania
Edward J. Markey, Massachusetts      Bill Sali, Idaho
Peter A. DeFazio, Oregon             Doug Lamborn, Colorado
Maurice D. Hinchey, New York         Mary Fallin, Oklahoma
Patrick J. Kennedy, Rhode Island     Adrian Smith, Nebraska
Ron Kind, Wisconsin                  Robert J. Wittman, Virginia
Lois Capps, California               Steve Scalise, Louisiana
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South 
    Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                       Rick Healy, Chief Counsel
            Christopher N. Fluhr, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON INSULAR AFFAIRS

            DONNA M. CHRISTENSEN, Virgin Islands, Chairwoman
        LUIS G. FORTUNO, Puerto Rico, Ranking Republican Member

Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            Jeff Flake, Arizona
Raul M. Grijalva, Arizona            Don Young, Alaska, ex officio
Madeleine Z. Bordallo, Guam
Nick J. Rahall, II, West Virginia, 
    ex officio
                                 ------                                


                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, July 17, 2008..........................     1

Statement of Members:
    Christensen, Hon. Donna M., a Delegate in Congress from the 
      Virgin Islands.............................................     1
        Prepared statement of....................................     2
    Faleomavaega, Hon. Eni F.H., a Delegate in Congress from 
      American Samoa.............................................    12

Statement of Witnesses:
    Domenech, Hon. Douglas W., Acting Deputy Assistant Secretary 
      on Insular Affairs, U.S. Department of the Interior........     5
        Prepared statement of....................................     6
    Farrow, Jeffrey, Former Co-Chair of the White House 
      Interagency Group on Insular Areas, (Clinton 
      Administration)............................................     8
        Prepared statement of....................................    10
    Tenorio, Hon. Pedro A., Resident Representative, Commonwealth 
      of the Northern Mariana Islands............................     3
        Prepared statement of....................................     4

Additional materials supplied:
    de Jongh, Hon. John P., Jr., Governor of the U.S. Virgin 
      Islands, Statement submitted for the record................    29


   SUCCESSES AND CHALLENGES OF THE INTERAGENCY GROUP ON INSULAR AREAS

                              ----------                              


                        Thursday, July 17, 2008

                     U.S. House of Representatives

                    Subcommittee on Insular Affairs

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 2:00 p.m., in 
Room 1324, Longworth House Office Building, Hon. Donna 
Christensen [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Christensen, Faleomavaega, and 
Flake.

STATEMENT OF THE HON. DONNA CHRISTENSEN, A DELEGATE IN CONGRESS 
         FROM THE TERRITORY OF THE U.S. VIRGIN ISLANDS

    Mrs. Christensen. Good afternoon. The oversight hearing by 
the Subcommittee on Insular Affairs will come to order. The 
Subcommittee is meeting today to hear testimony on the 
Successes and Challenges of the Interagency Group on Insular 
Affairs. Under Committee Rule 4(g), the Chairwoman, myself, and 
the Ranking Minority Member, who could not be here today, would 
make opening statements. If any members join us and have other 
statements, they will be included in the hearing record under 
unanimous consent.
    As I said this afternoon, the Subcommittee is meeting to 
hear from witnesses representing some of the U.S. insular 
areas, as well as officials from the Department of the Interior 
and the former Clinton Administration. The subject of our 
attention is the Interagency Group on Insular Affairs.
    As many of us here know, traveling to D.C. from islands 
involves great preparation both in time and resources, and the 
Subcommittee had hoped to have the participation of the 
Governors of Guam, the U.S. Virgin Islands, American Samoa, and 
the Northern Mariana Islands by piggybacking on the National 
Governors' Association summer session which is being held in 
Pennsylvania, or was held in Pennsylvania earlier this week. 
But due to prior commitments and some pressing business for our 
own Governor back at home, the majority of Governors were not 
able to attend the NGA session or this hearing. But written 
testimony has been submitted to the Subcommittee in lieu of 
their being here, and it will be entered into the record 
accordingly.
    I will leave it to our witnesses then to provide the 
Subcommittee a more in-depth accounting and history of the IGIA 
in their testimony. However, as a brief background, the IGIA is 
an outgrowth of efforts taken by my predecessor, Insular 
Subcommittee Chair Ron de Lugo. Chairman de Lugo, along with 
Senator Bennett Johnston, both recognized the existence of a 
policy gap in the way the Federal Government interacted with 
U.S. insular areas. Chairman de Lugo and Senator Johnston, who 
chaired the Energy and Natural Resources Committee, introduced 
similar measures to bridge this gap in the 103rd Congress.
    Chairman de Lugo's legislation would have established a 
Council on Insular Affairs comprised of policy level officials 
from all Federal agencies chaired by the President's chief 
domestic and foreign policy advisers and assisted by a staff in 
the President's Executive Office. The IGIA was born out of this 
legislation and the continuing dialogue and compromise between 
Congress, the Department of the Interior and the White House.
    The IGIA, as originally established under President Clinton 
and reconstituted in 2003 by President Bush, is nearing its 
10th anniversary as a working group. The Department of the 
Interior holds at least one annual meeting which coincides with 
the Governors traveling to D.C. in February. As it has 
seasoned, the IGIA has proven to be a regular activity of the 
Department of the Interior with occasional success.
    The Subcommittee looks forward to the testimony being 
offered this afternoon and hopes that the interaction we have 
with our witnesses will assist in strengthening the efforts of 
the IGIA to address the very unique challenges faced by the 
insular areas.
    So the Chair would now recognize the panel of witnesses, 
and will have you speak in this order: Resident Representative 
of the Commonwealth of the Northern Mariana Islands, The 
Honorable Pete Tenorio, Mr. Douglas Domenech, Acting Deputy 
Assistant Secretary for Insular Affairs at the U.S. Department 
of the Interior, and Mr. Jeffrey Farrow, Former Co-Chair of the 
White House Interagency Group on Insular Affairs during the 
Clinton Administration.
    And I now recognize Mr. Pete Tenorio from the Northern 
Mariana Islands to testify for 5 minutes. And we would ask you 
to summarize your testimony, and all statements, the full 
statement, will be submitted into the record. You may begin.
    [The prepared statement of Mrs. Christensen follows:]

     Statement of The Honorable Donna M. Christensen, Chairwoman, 
                    Subcommittee on Insular Affairs

    This afternoon the Subcommittee is meeting to hear from witnesses 
representing some of our U.S. insular areas, as well as officials from 
the Department of the Interior and the former Clinton Administration. 
The subject of our attention is the Interagency Group on Insular Areas
    As many of us here know, traveling to DC from the islands involves 
great preparation in both time and resources The Subcommittee had hoped 
to have the participation of the Governors of Guam, Virgin Islands, 
American Samoa, and the Northern Mariana Islands by ``piggybacking'' on 
the National Governors Association summer session held in Pennsylvania 
earlier this week. Due to prior commitments, the majority of Governors 
were not even able to attend the NGA session or this hearing. However, 
written testimony has been submitted to the Subcommittee in lieu of 
their absence and it will be entered into the record accordingly.
    I will leave it to our witnesses to provide the Subcommittee a more 
in depth accounting and history of the IGIA in their testimony. However 
as brief background, the IGIA is an outgrowth of efforts taken by my 
predecessor--Insular Subcommittee Chairman Ron de Lugo. Chairman de 
Lugo, along with Senator Bennet Johnston, both recognized the existence 
of a policy gap in the way the Federal Government interacted with U.S. 
Insular Areas. Chairman de Lugo and Senator Johnston, who chaired the 
Senate Energy and Natural Resources Committee, introduced similar 
measures to bridge this gap in the 103rd Congress.
    Chairman de Lugo's legislation would have established a Council on 
Insular Affairs, comprised on policy level officials from all Federal 
agencies, chaired by the President's chief domestic and foreign policy 
advisors, and assisted by a staff in the President's Executive Office.
    The IGIA was born out of this legislation and the continuing 
dialogue and compromise between Congress, the Department of the 
Interior, and the White House.
    The IGIA, as originally established under President Clinton and 
reconstituted in 2003 by President Bush is nearing its tenth year 
anniversary as a working group. The Department of the Interior holds at 
least an annual meeting which coincides with Governors traveling to DC 
in February.
    As it has seasoned, the IGIA has proven to be a regular activity of 
the Department of the Interior with occasional success.
    The Subcommittee looks forward to the testimony being offered this 
afternoon and hopes that the interaction we have with our witnesses 
will assist in strengthening the efforts of the IGIA to address the 
very unique challenges faced by U.S. insular areas.
                                 ______
                                 

       STATEMENT OF THE HON. PEDRO A. TENORIO, RESIDENT 
  REPRESENTATIVE, COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

    Mr. Tenorio. Thank you, Madam Chairwoman. I would make my 
testimony very brief. But before I do that I do want to extend 
to you the greetings from the people of the Commonwealth of the 
Northern Mariana Islands, and to also thank you and your 
committee for your recent visit to our islands, indeed a very 
historic visit when you conducted a public hearing on the 
Island of Saipan.
    We also want to thank your Committee on Insular Affairs, 
and also the Committee on Natural Resources, for their very 
special initiative to pass U.S. Public Law 110-229, which 
contains the initiative for framing of a new immigration for 
the Commonwealth, as well as creating a Delegate position to 
represent the people of the Commonwealth in the U.S. Congress. 
We certainly appreciate this very, very important gesture and 
consideration on the part of Congress to finally provide 
representation to the people of the Commonwealth who have not 
been represented since 1986, when they were granted by a 
Presidential proclamation U.S. citizenship pursuant to the 
provision of the Covenant.
    We look forward to working with this committee in improving 
our political relationship with the United States, and we feel 
very confident that with the kind of cooperation and 
consideration provided by this committee we will definitely 
have a much better relationship and a new beginning in our 
overall role as part of the American political family.
    Chairwoman Christensen, members of this committee, I 
remember with great anticipation the signing of the Executive 
order that created the Interagency Group on Insular Areas. I 
was hoping that IGIA would move the territories from the realm 
of, forgive me for these words, forgotten stepchild into the 
mainstream where we would finally have powerful advocates on 
our side.
    Since its inception twice I have been hopeful that the IGIA 
could help the CNMI address its critical infrastructure needs. 
Included in the Fiscal Year 2005 Omnibus Appropriations Act was 
a mandate by Congress calling for the Secretary of the Interior 
to develop a comprehensive, coordinated and detailed 
implementation program for the CNMI water system plans 
developed by the Corps of Engineers.
    The Appropriations Act conference report noted that the 
magnitude of the funding needs to improve the CNMI water system 
far exceeds any possible resolution from funds made available 
to the Interior and Related Agencies Subcommittee on 
Appropriations, and that existing programmatic expertise of 
other Federal agencies is not being used fully.
    The report required the Secretary of the Interior to 
provide the House and Senate Committees on Appropriations with 
an implementation plan that fully utilized and coordinated 
those authorities to ensure that the goals of the plans are 
achieved in a timely and cost effective manner. The report was 
to contain an implementation plan to identify projects, 
responsible agencies, funding needs, implementation schedule, 
any statutory or other changes necessary to implement the 
program, and a specific timetable for full completion.
    This task was assigned to the IGIA, which acted very 
quickly. But even though various funding sources were 
identified, no funding for CNMI water system improvements were 
included in the following year's submission by the President or 
included in the appropriation. While water volume production 
has increased due to appropriations made by Congress in Fiscal 
Year 2004 and 2005 budgets, I can tell you that not a drop of 
water from the Saipan water system is potable at this point in 
time. We cannot drink our water from the households provided by 
our government.
    Saipan's water system is unhealthy, causing residents to 
purchase expensive bottled water for drinking and cooking. It 
also greatly increases the cost of doing business by investors. 
I am sure everyone here remembers the Territorial Bank Bond 
Initiative developed under the auspices of IGIA. Congresswoman 
Bordallo generously introduced a bill to implement a plan, but 
unfortunately the bill was derailed by a lack of OMB support.
    In concept, I believe the IGIA is crucial to increasing the 
communication about and the advocacy for insular areas within 
the Federal Government. I would like to see our next President 
again form the IGIA. I will recommend that it include a greater 
involvement by the Office of Management and Budget.
    Finally, as I recommended in a past IGIA meeting, I would 
like very much that this group conduct its first meeting next 
year in one of the territories of the United States.
    Thank you very much.
    [The prepared statement of Mr. Tenorio follows:]

 Statement of The Honorable Pedro A. Tenorio, Resident Representative, 
              Commonwealth of the Northern Mariana Islands

    Madam Chairwoman, members of the Committee. I remember with great 
anticipation the signing of the Executive Order that created the 
Interagency Group on Insular Areas. I was hoping that IGIA would move 
the territories from the realm of forgotten stepchild into the 
mainstream where we would finally have powerful advocates on our side.
    But that was not to be. I am sure everyone here remembers the 
Territorial Bond Bank, developed under the auspices of IGIA, only to be 
cut down in its prime by OMB.
    At the direction of Congress IGIA did form a working group to 
update the Army Corps of Engineers report on the Water Infrastructure 
Development Plans for the islands of Saipan, Tinian and Rota. The CNMI 
is America's only jurisdiction where the residents are unable to drink 
the water. The working group did an excellent job, unfortunately there 
was no follow through, and we have yet another report sitting on a 
shelf gathering dust.
    The CNMI has real problems and unless our governor becomes a 
superhero, they are not going to be resolved anytime soon. Whether it 
is the nature of the bureaucratic beast or not, the problems facing the 
CNMI and the other territories must be resolved. I am not just talking 
about money, which does comes in handy, but also expertise.
                                 ______
                                 
    Mrs. Christensen. Well, you know I like that idea, Mr. 
Tenorio, and of course we are the closest one, the one most 
nearby. But I think that is a good idea.
    The Chair now recognizes Mr. Douglas Domenech to testify.

   STATEMENT OF THE HON. DOUGLAS W. DOMENECH, ACTING DEPUTY 
ASSISTANT SECRETARY FOR INSULAR AFFAIRS, U.S. DEPARTMENT OF THE 
                            INTERIOR

    Mr. Domenech. Thank you, Madam Chair. I would just say 
before I start it was good seeing you at the Energy hearing in 
St. Croix and again at the Guam Wreath Laying earlier this 
week, and I appreciate the opportunity to be here today.
    Madam Chair and Subcommittee on Insular Affairs, thank you 
for the opportunity to discuss the activities of the 
Interagency Group on Insular Areas, or IGIA, which deals with 
the issues of concern in the United States Territories of Guam, 
American Samoa, the U.S. Virgin Islands, and the Commonwealth 
of the Northern Mariana Islands. I would like to make a brief 
opening statement and submit my testimony for the record.
    As you know, Secretary Kempthorne has shown great personal 
interest in the needs and concerns of our insular areas and 
affiliated island communities since his trip to the Pacific 
last summer. A little over 2 months ago, upon the departure of 
David Cohen, the Secretary named me Acting Deputy Assistant 
Secretary for Insular Affairs. One reason was to have the 
issues of the islands managed directly out of the Secretary's 
Office, since I also continue to serve as his Deputy Chief of 
Staff.
    Over the last few months I have had the opportunity to 
travel to the Virgin Islands, Guam, and CNMI to see issues on 
the ground and visit with island leaders directly. As you know, 
the U.S. insular areas are uniquely beautiful and yet uniquely 
challenged. They have limited land resources, small populations 
and generally limited pools of experts, especially in 
professional, technical and scientific fields. And because 
these areas are not States, a number of legal issues often set 
a territory or all territories apart from the 50 States or from 
one another. This has resulted in different applications of 
issues like minimum wage requirements, customs and border 
regulations, census enumerations, trade policy and Medicaid 
treatment, to name a few, on the islands.
    The previous administration created the IGIA to assist the 
territories with these unique challenges. President Bush on May 
8, 2003, signed Executive Order 13299 to establish the IGIA and 
provide for deliberation within the executive branch on issues 
of consequence to the territories. The Secretary of the 
Interior serves as the Chairman. The IGIA consists of the heads 
of the executive departments and heads of such agencies as the 
Secretary of the Interior may designate. The IGIA is a 
consultative and collaborative body with a task of obtaining 
advice and information on policy issues that the insular areas 
face individually and as a group.
    Since 2003 the IGIA has met annually. The last meeting of 
the IGIA was in February of 2008 in the Secretary's conference 
room at the Interior Department. Secretary Kempthorne chaired 
most of the meeting. The Governors of Guam, American Samoa and 
CNMI were present, along with Delegates to Congress from Guam 
and the USVI, as well as the distinguished CNMI Washington 
representative.
    Executive branch agencies represented in the room, in 
addition to Interior, were Defense, Justice, State, Homeland 
Security, Labor, Transportation, Education, Agriculture, 
Energy, HHS, OMB, Treasury, the Office of the U.S. Trade 
Representative, OPIC, EPA, Postal Service, HUD, Small Business, 
CEQ and Social Security Administration. All present expressed 
appreciation for the productive nature of the meeting.
    The IGIA is intended to act as a deliberative body and does 
not make executive, legislative or judicial decisions. It does 
not take positions on proposed legislation or policy on behalf 
of the Administration, and cannot compel any member agency to 
take any action or adopt any particular position. Instead, the 
goal of the IGIA is to provide a forum and mechanism for the 
elected leaders of the insular areas to frame issues for and 
participate in IGIA discussions leading to the formulation of 
Federal policy and work with Federal agencies that in turn work 
with them. Thus, island leaders have a channel of communication 
for voicing their concerns. We have always looked for ways to 
improve the operations of the IGIA and look forward to working 
with Congress to do that.
    This concludes my opening statement and I am happy to take 
any questions.
    [The prepared statement of Mr. Domenech follows:]

  Statement of Douglas W. Domenech, Acting Deputy Assistant Secretary 
  of the Interior for Insular Affairs, U.S. Department of the Interior

    Madam Chair and members of the Subcommittee on Insular Affairs, 
thank you for the opportunity to discuss the activities of the Inter-
Agency Group on Insular Areas (IGIA), which deals with issues of 
concern in the United States territories of Guam, American Samoa, the 
U.S. Virgin Islands (USVI), and the Commonwealth of the Northern 
Mariana Islands (CNMI).
    The Commonwealth of Puerto Rico is not included in the activities 
of the IGIA and is not included under the administrative authority of 
the Department of the Interior.
    The Unique Circumstances of the Insular Areas and the IGIA
    As you know, the United States insular areas, or territories, of 
Guam, American Samoa, the U.S. Virgin Islands (USVI), and the 
Commonwealth of the Northern Mariana Islands (CNMI) are beautiful 
isolated island communities, remote from the mainland United States. 
They are also unique in that they have limited land resources, small 
populations and, generally, limited pools of experts, especially in 
professional, technical and scientific fields. They are generally 
located in areas prone to typhoons, cyclones or hurricanes. They are 
relatively new to United States-style traditions of democracy and 
institutions of self-government.
    In addition, because these areas are not states, a number of legal 
issues often set a territory or all territories apart from the 50 
states and from one another. This has resulted in different 
applications of issues like minimum wage requirements, customs and 
border regulations, census enumerations, trade policy, and Medicaid 
treatment, to name a few, on the islands. I would add that people born 
in American Samoa are U.S. nationals, not U.S. citizens.
    Insular areas do share common factors as well. For instance, 
residents of the insular areas do not pay Federal income taxes, cannot 
vote for President, and do not have full voting rights in the Congress. 
However, now with the CNMI added in 2009, all four territories will 
have non-voting delegates to the United States House of 
Representatives.
    The factors I have just enumerated and others relating to the 
disparate histories and traditions of the territories show that there 
are important differences among the four territories and with the 50 
states. It follows then that there may be unintended consequences when 
policies designed for the 50 states are applied to the insular areas. 
Just as Federal policy may produce unintended results, so too the 
territories may be excluded from Federal policies because they are not 
states. In addition, the special circumstances faced by the insular 
areas will sometimes merit policy initiatives designed especially for 
one or more of them. In view of the peculiar circumstances of the 
territories, it is important that the various Federal departments and 
agencies coordinate their activities that affect the insular areas, 
avoiding the incoherence of policy that may result when different parts 
of the Federal Government work at cross purposes or do not consider 
insular issues.
Executive Order--Interagency Group on Insular Areas
    It is for these reasons that President Bush, on May 8, 2003, signed 
Executive Order No. 13299 to establish the IGIA and provide for 
deliberation within the Executive branch on issues of consequence for 
our four territories. The Secretary of the Interior is the chairman. 
The IGIA consists of the heads of the executive departments and the 
heads of such agencies as the Secretary of the Interior may designate. 
The Executive Order directs that the IGIA shall:
      provide advice on establishment or implementation of 
policies concerning the four U.S. territories to the President (through 
the Office of Inter-Governmental Affairs in the White House) and the 
Secretary of the Interior,
      obtain information and advice concerning insular areas 
from governors and other elected officials in the insular areas through 
meetings, at least annually, in a manner that seeks their individual 
advice and does not involve collective judgment or consensus advice or 
deliberation,
      obtain information and advice concerning insular areas, 
as the IGIA determines appropriate, from representatives of entities or 
other individuals in a manner that seeks their individual advice and 
does not involve collective judgment or consensus or deliberation, and
      at the request of the head of any agency who is a member 
of the IGIA, unless the Secretary of the Interior declines the request, 
promptly review and provide advice on a policy or policy implementation 
action affecting one of the insular areas proposed by the agency.
The IGIA as a Consultative Body
    The Interagency Group on Insular Areas is a consultative and 
collaborative body with the task of obtaining advice and information on 
policy issues that the insular areas face individually and as a group. 
The Executive Order states:
      Nothing in this order shall be construed to impair or 
otherwise affect the functions of the Director of the Office of 
Management and Budget relating to budget, administrative, or 
legislative proposals.
    The IGIA was intended to act as a deliberative body and does not 
make executive, legislative or judicial decisions. It does not take 
positions on proposed legislation or policy on behalf of the 
Administration and cannot compel any member agency to take any action 
or adopt any particular position.
    Instead, the IGIA provides a forum and mechanism for the elected 
leaders of the insular areas to frame issues for and participate in 
IGIA discussions leading to the formulation of Federal policy and work 
with Federal agencies that, in turn, work with them. Thus, island 
leaders have a channel of communication for voicing their concerns.
    The provisions of the Executive Order and the fact that the IGIA 
has no dedicated budget or staff make it clear that the IGIA is 
intended to be a consultative and collaborative body, not a decision-
making body.
Recent Meeting of the IGIA
    The last meeting of the IGIA was held on February 26, 2008, in the 
Secretary's conference room at the Interior Department. Secretary 
Kempthorne, who has taken great and personal interest in the concerns 
of the islands, chaired most of the meeting. The Governors of Guam, 
American Samoa, and CMNI were present along with Delegates to Congress 
from Guam and the USVI, including the CNMI Washington Representative.
    Executive Branch agencies represented, in addition to the 
Department of the Interior, were the Department of Defense, Department 
of Justice, State Department, Department of Homeland Security, 
Department of Labor, Department of Transportation, Department of 
Education, Department of Agriculture, Department of Energy, Department 
of Health and Human Services, Office of Management and Budget, 
Department of the Treasury, Office of the United States Trade 
Representative, Overseas Private Investment Corporation, Environmental 
Protection Agency, United States Postal Service, Department of Housing 
and Urban Development, Small Business Administration, Council on 
Environmental Quality, and Social Security Administration.
    All present expressed appreciation for the productive nature of the 
meeting.
IGIA Issues
    Numerous issues have been the subject of IGIA discussion with the 
island governors and representatives to Congress. The IGIA meetings 
have provided a forum for federal agencies to hear directly from 
elected leaders and, in some cases, provide answers to these issues.
    For many of our colleagues across the Federal government, their 
first encounter with these issues came in an IGIA meeting. Federal 
agencies address their challenges in the territories as appropriate to 
its respective agency.
IGIA Working Groups
    The IGIA has the flexibility to form working groups on special 
issues as needed.
    One example is related to the planned military build-up on Guam. 
Working with DOD, other Federal agencies, and the Government of Guam, 
the IGIA is addressing as many civilian issues as we can so the buildup 
proceeds in an efficient way.
    The IGIA has provided a framework to discuss the many issues and 
challenges arising from these developments. Recently, the Government of 
Guam raised concerns about the adequacy of civilian infrastructure to 
support the many components of the military buildup. Many of these 
concerns were aired at the November 2007 and February 2008 meetings of 
the IGIA Working group dealing with the build-up, and were raised in 
Congressional hearings before this Committee.
    One result of these discussions came recently, when OIA staff 
traveled to Guam with Janet Creighton, Deputy Assistant to the 
President for Intergovernmental Affairs to meet with Governor Camacho 
and other leaders and learn first hand the challenges facing Guam 
related to the buildup.
Conclusion
    We believe the IGIA is a useful forum for the leaders of the 
territories to speak directly and frankly to the leaders of Federal 
agencies. One of the main advantages of this dialogue is educational. 
As both the Federal agencies and the territories learn more about each 
other's issues and how things work in the other's domain, they will be 
able to develop deeper understanding of each other's needs and how to 
resolve common problems. The IGIA members have taken on some big 
issues, and we hope this work will continue.
                                 ______
                                 
    Mrs. Christensen. Thank you, Acting Assistant Secretary. 
And now the Chair recognizes Mr. Jeffrey Farrow for his 
testimony.

STATEMENT OF JEFFREY FARROW, FORMER CO-CHAIR OF THE WHITE HOUSE 
 INTERAGENCY GROUP ON INSULAR AFFAIRS (CLINTON ADMINISTRATION)

    Mr. Farrow. Madam Chair and distinguished members, I am 
honored to have been invited to testify to the Subcommittee 
which I was privileged to serve during most of my years on the 
committee staff, and I am delighted to do regarding the 
Interagency Group on Insular Areas which I helped establish and 
co-chaired during the Clinton Administration.
    Let me begin by complimenting you, Madam Chair, for this 
hearing. The Interagency Group should be a needed means for 
addressing problems concerning American Samoa, Guam, the 
Northern Mariana Islands, and our home of the U.S. Virgin 
Islands. In establishing it, President Clinton noted that the 
situations of unincorporated territories are sometimes 
different from those of the States. This creates issues. The 
issues span the range of agencies, and Federal officials have a 
special responsibility to consider territories' issues because 
the areas lack the representation that a State has in the 
Federal process.
    Regrettably, the Interagency Group has not fulfilled its 
potential during the Bush Administration, despite the best 
efforts of its leadership. The reason is a fundamental change 
that the Administration made in the Interagency Group. 
Originally it was co-chaired by designees of the Secretary of 
the Interior and the Director of the White House Office of 
Intergovernmental Affairs. As reconstituted, it is presided 
over by an Interior Department official alone. White House co-
leadership was an essential element of the Interagency Group 
and a reason for its establishment. Although Interior has 
responsibility for relations with the areas, its responsibility 
does not extend to programs within the jurisdiction of other 
agencies.
    Most issues are within the jurisdiction of other agencies. 
Agencies rarely defer on matters within their jurisdiction to 
other agencies. Many decisions are made above the agency level 
by the Office of Management and Budget. Secretaries of the 
Interior can sometimes overcome opposition at other agencies 
but cannot do so on a regular basis. The issues are generally 
relatively small in the national and even interior context, and 
it is difficult to get high level attention to such matters. 
And White House influence is often needed to move agencies and 
OMB.
    The Interagency Group was established after the Interior 
Department failed to convince the Department of Justice to 
support application of immigration laws to the Northern Marian 
Islands, and from the White House, at Interior's request, I got 
the Clinton Administration to advocate application. It also 
came after the President's Interagency Group on Puerto Rico had 
obtained changes in policy, including some benefiting the other 
insular areas. Interior Deputy Assistant Secretary Allen 
Stayman then convinced the Department of the Interior to 
support a compromise in the earlier proposed Interagency Group 
on Insular Areas that involved joint Interior and White House 
leadership. Interior had previously opposed White House 
leadership.
    In fact, the Interagency Group was established years later 
than it would have been otherwise due to this opposition and 
opposition in the Senate comfortable with Interior and 
concerned unnecessarily about jurisdiction over an interagency 
group with White House co-leadership. As the Clinton 
Administration took office, members of this Subcommittee, 
including the Chair's predecessor, Ron de Lugo, Delegate 
Faleomavaega, and Chairman Miller, had promoted Executive 
Office of the President leadership of an interagency group but 
were rebuffed by Interior. Chairman de Lugo obtained White 
House staff commitment to the idea of White House co-
leadership, but the agreement was not implemented because of 
the Senate objection.
    The change in the Interagency Group's leadership in 2003 
came after the Bush Administration did not fulfill the position 
that I held at the White House dealing with all insular areas 
matters. Puerto Rico's Commonwealth Party Governor and Resident 
Commissioner, shortsightedly, did not want it filled, fearing 
my replacement would be someone whom they believed favored the 
Statehood Party. In addition to my position, the Interagency 
Group on Puerto Rico was not continued. The Interagency Group 
on the less populous territories continued to exist only on 
paper and the work it had begun languished. The disengagement 
from Puerto Rican issues Puerto Rican officials sought has cost 
Puerto Ricans a lot. Another consequence was the virtual 
elimination of White House assistance on issues of the other 
territories. Executive Office of the President's attention 
could be assured by statute. You could also try to obtain White 
House involvement by asking the next President to restore White 
House co-leadership of the Interagency Group and staffing.
    I note in this regard that Chairman Bingaman and Senators 
Akaka and Murkowski recently suggested that this Administration 
consider White House staffing and co-chairing. You may run into 
resistance, but I recommend that you press for White House 
involvement to have territories' issues more successfully 
addressed. This may be the most beneficial measure that you can 
initiate regarding the territories.
    Madam Chair, I request that you include in the record a 
progress report of the Interagency Group on Insular Areas 
issued within months of its establishment and a list of 
accomplishments of the Interagency Group on Puerto Rico. These 
documents will help members evaluate the Interagency Group on 
Insular Areas without White House co-leadership.
    I will be happy to answer questions.
    [NOTE: The information submitted for the record by Mr. 
Farrow has been retained in the Committee's official files.]
    [The prepared statement of Mr. Farrow follows:]

  Statement of Jeffrey L. Farrow, Former Co-Chair of the White House 
      Interagency Group on Insular Areas (Clinton Administration)

    Madame Chair and Distinguished Members,
    I am honored to have been invited to testify to the subcommittee 
which I was privileged to serve as Staff Director during most of my 
nearly 13 years on the Committee Staff. And I am delighted to do so 
regarding the Interagency Group on Insular Areas, which I helped 
establish and co-chaired during the Clinton Administration.
    Let me begin by complimenting you, Madame Chair, for calling this 
hearing. The Interagency Group was intended to--and should--be a needed 
means within the Executive Branch for addressing problems in policy 
concerning American Samoa, Guam, the Northern Mariana Islands, and our 
mutual home of the U.S. Virgin Islands. In establishing it, President 
Clinton noted, as he had earlier in the case of Puerto Rico, that the 
situations of unincorporated territories are sometimes different than 
those of the States, this creates issues, the issues span the range of 
federal agencies, and federal officials have a special responsibility 
to consider territories issues because the areas ``lack the 
representation that a State has in the Federal process.''
    Regrettably, however, the Interagency Group has not fulfilled its 
potential during the Bush Administration, despite what I trust have 
been the best efforts of its leadership.
    The reason is a fundamental change that the Administration made in 
the Interagency Group. As originally established, it was co-chaired by 
designees of the Secretary of the Interior and the Director of the 
White House Office of Intergovernmental Affairs. As reconstituted, it 
is presided over solely by an Interior Department official.
    White House co-leadership was an essential element of the 
Interagency Group and a reason for its establishment. It was recognized 
that:
      although the Department of the Interior has 
responsibility for relations with the areas in addition to some 
specific assistance functions, its responsibility does not extend to 
programs within the jurisdiction of other agencies;
      most of the issues are within the jurisdiction of other 
agencies;
      agencies rarely defer on matters within their 
jurisdiction to other agencies;
      many decisions are made above the line agency level by 
the Executive Office of the President's Office of Management and 
Budget;
      secretaries of the Interior can sometimes overcome lower-
level opposition at other agencies and OMB with personal intervention 
but cannot do so on a regular basis;
      the issues generally are relatively small in the national 
and, even, Interior Department contexts and it is difficult to get 
high-level attention to such matters; and
      White House influence is often needed to move agencies 
and OMB.
    The Interagency Group was established after the Interior Department 
failed to convince the Department of Justice to support application of 
immigration laws to the Northern Mariana Islands and, at Interior's 
request, from the White House I got the Clinton Administration to 
advocate application. It also came after the President's Interagency 
Group on Puerto Rico had obtained a number of changes in policy, 
including some benefiting other insular areas. Interior Deputy 
Assistant Secretary for Insular Affairs Allen Stayman then convinced 
his department to support a compromise in the leadership of the 
earlier-proposed Interagency Group on Insular Areas that involved joint 
Interior and White House leadership. Interior had previously opposed 
White House leadership.
    In fact, the Interagency Group was established at least five years 
later than it would have been otherwise due to this opposition and 
opposition in the Senate comfortable with exercising jurisdiction over 
the Interior Department and concerned--unnecessarily as the Interagency 
Group on Puerto Rico later demonstrated--about jurisdiction over an 
interagency group with White House co-leadership. As the Clinton 
Administration took office, Members of this Subcommittee, including the 
Chair's predecessor--Ron de Lugo, Delegate Eni Faleomavaega, and 
Chairman George Miller had promoted Executive Office of the President 
leadership of an insular affairs interagency group but were rebuffed by 
the Interior Department. In 1994, Chairman de Lugo obtained White House 
staff commitment to the idea of White House co-leadership--but the 
agreement was not implemented because of the Senate objection.
    The change in the Interagency Group's leadership in 2003 came after 
the Bush Administration in 2001 did not fill the position that I had 
held at the White House handling all insular areas matters. Puerto 
Rico's then ``commonwealth'' party governor and resident commissioner 
shortsightedly did not want it filled fearing that my replacement would 
be someone whom they believed favored the statehood party. The White 
House is inundated with requests for action on issues, and its staff 
routinely tries to shift responsibility for matters considered lesser 
in scope to agencies so that they can concentrate on priorities: The 
request for inattention was not a hard sell. In addition to my 
position, the Interagency Group on Puerto Rico was not continued. The 
Interagency Group on the less-populous territories continued to exist 
only on paper and the work it had begun languished. The broad 
disengagement from Puerto Rican issues that Puerto Rico officials 
sought has cost Puerto Ricans a lot. Another consequence, however, was 
the virtual elimination of White House assistance on issues of the 
other territory areas.
    Madame Chair and Distinguished Members, Executive Office of the 
President attention to territory issues--and probably greater success 
in resolving issues--could be assured by statute. You can also try to 
obtain the White House involvement needed by asking the next president 
to restore White House co-leadership of the Interagency Group and 
staffing on territories matters. I note in this regard that Chairman 
Bingaman and Senators Akaka and Murkowski of the Senate Committee on 
Energy and Natural Resources recently suggested that this 
Administration consider White House staffing and co-chairing. You may 
run into resistance from Interior and from a White House staff consumed 
by existing responsibilities but I recommend that you press for White 
House involvement to have territories issues more successfully 
addressed.
    Madame Chair, thank you for the invitation to testify. I request 
that you include in the record a progress report of the Interagency 
Group on Insular Areas issued in 2000 within months of its 
establishment and a list of accomplishments of the Interagency Group on 
Puerto Rico to help Members evaluate the Interagency Group on Insular 
Areas without White House co-leadership. I will now be happy to answer 
questions.
                                 ______
                                 
    Mrs. Christensen. I would like to thank everyone for their 
testimony. We have been joined by Congressman Eni Faleomavaega 
of American Samoa and Congressman Jeff Flake of Arizona. And I 
was wondering if either of you had an opening statement that 
you would like to make.
    Mr. Faleomavaega.

  STATEMENT OF THE HON. ENI F.H. FALEOMAVAEGA, A DELEGATE IN 
         CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA

    Mr. Faleomavaega. Madam Chair, I would like to personally 
welcome our witnesses this afternoon. Our Acting Deputy 
Assistant Secretary, and forgive me, sir, in pronouncing your 
name. Shall I just say Dennis--Doug. I can't even pronounce 
Dennis or Doug or whatever. And my good friend, the 
Representative from CNMI, Mr. Tenorio, and of course my long-
term friend, and certainly I consider one of the few experts 
that we have left when it comes to insular affairs, Mr. Jeff 
Farrow.
    I will wait for the questioning aspects of this, Madam 
Chair, but I do want to thank you for calling this hearing. I 
think it is important, and we need to pursue this issue a 
little more and hopefully that we can come up with some 
practical solutions whether or not interagency groupings that 
we have done for all these years has really been a help or a 
detriment to the needs of our territories.
    Thank you, Madam Chair.
    Mrs. Christensen. Thank you, Mr. Faleomavaega.
    Mr. Flake, would you like to make an opening statement.
    Mr. Flake. No.
    Mrs. Christensen. Thank you. I now recognize myself for 5 
minutes of questions. And I guess I would start with Mr. 
Tenorio and Mr. Farrow, just to follow up on the last part of 
your statement about comparing the outcome of the Interagency 
Working Group under the Clinton Administration, not just 
because it was under the Clinton Administration but because it 
was co-chaired by the White House and the Department as opposed 
to being co-chaired just by Interior at this point. And Mr. 
Tenorio, you mentioned one issue, at least the water issue.
    Are there issues that you felt were adequately addressed 
that you had taken to the Interagency Working Group other than 
the water, which apparently was not?
    Mr. Tenorio. There was another issue that I thought was 
handled very well through the Interagency Group, and that was 
the change on the taxation problem, the taxation issue on 
residency. And I thought that that particular issue was 
addressed very shortly, and the Northern Marianas was requested 
to participate in that discussion. I remember it, and believe 
that there was a final resolution to that in the form of 
amending the regulations to provide for an appropriate 
residence definition for the Northern Marianas for taxpayers 
there.
    I couldn't recall any other issue because my primary issue, 
Madam Chairperson, has always been improving the water system 
as something that is so basic to us. Because being a 
hydrologist by profession and having worked in the Commonwealth 
for a long time developing privately owned water sources, I was 
very familiar with the weaknesses of the system since the trust 
territory time. Knowing that, you know, we are subject under 
the United States public health drinking water standards, we 
were always in violation of the standards in terms of drinking 
water because of the weak infrastructure, the dilapidated 
infrastructure on water, and the lack of funding to address the 
water issue once and for all.
    We received a very, very strong report, very comprehensive 
report from the United States Corps of Engineers as to how best 
to deal with the water problem there. Those recommendations of 
course encompasses a huge amount of funding requirements, to 
the tune of about $400 million, to fix the water systems 
throughout the populated islands of the Northern Marianas. 
Unfortunately, as I said in my statement, not much was done in 
that respect. Although we were thankful that the Congress 
appropriated $3 million of over ceiling, a request from my 
office to enable us to at least drill some of the wells, some 
more wells to add volumes. And I am talking just volume of 
water to be able to provide and sustain the livelihood of our 
population in terms of convenience, washing and cooking. But 
nothing to speak of about drinkable water that ever happened.
    Thank you.
    Mrs. Christensen. Mr. Farrow, do you feel that you can 
answer in terms of product outcome?
    Mr. Farrow. Well, I hesitate to comment on specifics of 
what the IGIA has done.
    Mrs. Christensen. Let me re-ask the question, and I will 
direct it to both you and the Deputy Assistant Secretary. One 
of the biggest criticisms of the current IGIA process as it is 
currently constructed is that it lacks its ability to 
effectively achieve results on behalf of the insular areas. Do 
you believe that the current IGIA, which was set up as a 
consultative and deliberate body, has enough clout to get 
Federal agencies to respond to the issues of concerns brought 
by the island leaders?
    Mr. Farrow. No, I do not. As I mentioned in my statement, a 
reason for the creation of the IGIA in the first place was to 
have the involvement of the White House to ensure that the 
territories were considered as policy was developed at the 
highest level and to address issues that are decided by 
agencies within the Executive Office of the President, such as 
OMB. Line agencies can't effectively direct OMB. It is the 
other way around. The Secretary of the Interior can personally 
sometimes go to the Director of OMB, sometimes personally go to 
the President to raise an issue. The Secretary cannot do that 
every day. He would not have credibility if he did. He has got 
his own department to mind. So it was recognized in the 
original creation of the IGIA that you needed higher level 
authority.
    The purpose, as Mr. Domenech has described it of the IGIA, 
is a little different from that of the original IGIA, and I 
think it is great that the Administration has continued the 
IGIA to the extent it has and that it is a consultative and 
deliberative body and that there is communication between 
agencies and some issues are resolved. But there are issues 
that cannot be resolved by communication alone among the 
agencies. You need policy guidance from the White House, you 
need budgetary guidance from the White House, you need to be 
able to say to the Secretary of the Treasury that the President 
wants to have X done as opposed to the Secretary of another 
department wants to have something done.
    So I do not think it has been as effective as it should 
have been and was intended to be, and its current purpose is 
not all that the original purpose was intended to be. As I have 
communicated with--you mentioned the Governors in your opening 
statement--with Governors and others who represent the insular 
areas, I think there is a level of dissatisfaction with the 
IGIA, not that it has not accomplished some things, but it 
should be accomplishing more. It was meant to fill a gap in the 
policy process that is only partially filled, and that relates 
to the areas in particular not having voting representation in 
the Federal process and the full voting representation in the 
Congress, representation in the Senate, or electoral votes that 
get policy attention at the highest levels.
    This is no criticism in particular of the current 
leadership of the IGIA. I think they have done the best that 
they could within the structure that they have been allowed to 
operate.
    Mrs. Christensen. Deputy Assistant Secretary.
    Mr. Domenech. Thank you, Madam Chairman. And I also want to 
thank Mr. Farrow for the background and history on the IGIA, 
some of which I had not heard. So it is very helpful to hear 
that and I mean that sincerely.
    There are a number of successes I think we can point to in 
the way the IGIA is currently established. That doesn't mean 
that it can't be improved certainly and that these problems 
aren't ongoing.
    If I could use the example as a matter of fact that The 
Honorable Tenorio has said, in 2003 when the water situation on 
Saipan was initially brought up to the IGIA, we formed a 
working group. That working group was made up of EPA, USDA, 
HUD, DOI and the Army Corps. And the working group tried to 
establish essentially what was the situation there, made a 
request in the President's 2006 budget of $1 million to do that 
infrastructure assessment, and continued to meet to try to 
solve that. Meanwhile, Interior itself in 2005 provided $6.4 
million, in 2006, $5.6 million, 2007, $1.4 million, 2008, $2.3 
million specifically on the issue of potable water in Saipan.
    So I think there are accomplishments to be pointed to. That 
doesn't mean the problem still doesn't exist, and it is a 
problem that we are very concerned about, along with a power 
situation in the CNMI. In some ways they go hand in hand, as 
you well know.
    There are other issues that we can point to as having some 
sort of success, whether that is the visa waiver situation or 
the work that is being done on the Guam military buildup, which 
of course again is another working group established to try to 
coordinate between what DOD and the Federal agencies are doing.
    We have had a substantial amount of work through the IGIA 
related to economic development. That has resulted in trade 
missions to the USVI and other places to the business 
opportunity conferences we have held, as well as other 
activities. So there are some successes to point there.
    On cabotage, which has been an issue of course for many of 
the islands, that was brought up at the IGIA, and DOT responded 
by providing some emergency exemptions for American Samoa and 
for Guam. So there are a number of these. And as Mr. Farrow 
said often, maybe they are small things in the big scheme of 
the Federal Government, but it does provide an opportunity for 
the leaders to give us their priority list and then for us to 
get that in front of all the Federal agencies.
    Mrs. Christensen. Thank you. The Chair now recognizes Mr. 
Flake for any questions he might have.
    Mr. Flake. Let me go back to the water issue. Would that 
have happened because it was a pressing issue? You are saying 
the IGIA was helpful. But would it have happened anyway, the 
solution or the actions that were taken, without the IGIA 
simply because it was a pressing issue, or was the IGIA 
actually helpful in resolving that?
    Mr. Domenech. I think probably both. Obviously the water 
situation on CNMI is something Interior knew about, but the 
IGIA gave us an opportunity to have the leaders from CNMI 
explain that to the other Federal agencies who can be helpful 
on the water situation, the Corps and other people. So that is 
the advantage.
    Mr. Flake. Without that forum, is it tough to have them 
return your calls or is it just easier coordination?
    Mr. Domenech. I think they will return our calls. But it 
probably is just more of a communication opportunity. I think, 
as others have said, often, too often, people in the Federal 
Government don't think about the territories. And of course we 
think about them all the time and continue to try that drum 
beat of telling other people about them. So that we find that 
is the most valuable part of the IGIA, is getting these people 
in the same room with the leaders so that they can see these 
and hear about these problems firsthand.
    Mr. Flake. Mr. Farrow, you are quite critical in your 
testimony. I am sorry I didn't hear that, but I did read it, 
about the IGIA and what has not happened in particular. Do you 
think it is a structural problem or has it just been 
personalities that haven't seen a need, or was it simply when 
it went from one administration to another it didn't have the 
importance in the new administration? Would you scrap the 
organization and start anew or just revive it?
    Mr. Farrow. I think, Mr. Flake, it is a structural problem; 
it is not the personalities involved. I think they have done 
the best they could within the structure that they had to 
operate. I would not scrap the organization at all, but I would 
go back to the original organization to have White House co-
chairmanship of the Interagency Group. You know, when Puerto 
Rico obtained local self-government, the responsibility for 
issues regarding Puerto Rico were shifted to the White House. 
When the other territories achieved the equivalent self-
government, that did not occur. And the White House is in a 
position to relate to other agencies the way that an agency 
like Interior cannot.
    Mr. Flake. Right, and your testimony basically says that 
Interior plays too, or just still all meaningful activity is 
centered at Interior and not in the other agencies.
    Mr. Farrow. I think other agencies are meaningfully engaged 
by Interior. But what they don't get is when there are disputes 
between the agencies on taxes, on--when a budget request is 
made for CNMI water and it goes to OMB, the direction is not 
being given to OMB that this is something that we need to 
attend to and this is a priority. OMB can get that direction 
from the White House but not from Interior. They can get a 
request from Interior.
    Mr. Flake. Mr. Tenorio, is there a structural change you 
would seek to have to the IGIA?
    Mr. Tenorio. Well, I believe that the organization as is 
structured should continue on. But I want to be very specific 
about what the role is of the responsible Federal person in 
each of the agencies. And this was what was lacking, I thought. 
We had meetings over here in Washington, D.C. and, after the 
meeting and after having made a statement and declared our 
issues to the group, not much follow-up really took place. And 
what I would recommend as part of the reforming the structure 
is to specifically assign a person from each of these relevant 
agencies to be in charge of the issues that the territorial 
governments bring up and have a follow through by visitation or 
communication with the people back home so that there is a 
continuity in the process of addressing the issue.
    I found this to be completely lacking. We communicated and 
we thought that, you know, finally we got somebody that would 
deal with us on a more prompt basis, but we found ourselves 
having to wait for a response to our letter, sometimes 6 months 
late. And issues like power generation or the lack of power in 
the Commonwealth is one huge issue that we feel has reached a 
critical level. And I would like to see that issue addressed 
and provide a plan that is doable and get our people engaged in 
how to go about helping them--you know, to the Federal 
initiatives to get the job done.
    I could go on and on and talk about how bad the power 
situation is, but I know this is not the forum to address it, 
Madam Chairperson. That is one area where not only should the 
Congress and the Administration collaborate to help us, but we 
need to have some solid plan flexibility in how the Federal 
policies should be handled with respect to this critical issue. 
I am not talking about all issues, just basically power 
generation problem, because it is an issue that encompasses 
every single aspect of our life back home.
    Thank you.
    Mrs. Christensen. Thank you. And if I could just interject 
before I recognize Mr. Faleomavaega. A simpler issue, and you 
have heard, all of us have heard testimony from the GAO and 
from the Department itself and the problems in financial 
management that the territories have. And in several years, 
over several years, I have some of my statements going back to 
2002, my suggestion was that each of the agencies that send 
funding to the territory set aside a part of that funding to 
set up financial management systems over and over and over 
again. In the Virgin Islands we are on our way to setting up 
our own at this point. To me infrastructure is a major issue, 
and I think that that is something that you really need the 
White House clout to be brought to bear on it. But a simple 
issue such as setting aside funding for financial management 
from each agency was never addressed.
    Let me recognize Mr. Faleomavaega for his questions.
    Mr. Faleomavaega. Thank you, Madam Chair. And Madam Chair, 
I would like to ask unanimous consent, and I notice that one of 
our--I will say not only an institutional memory, but someone 
who really understands the insular areas well, and especially 
our good friend Mr. Jeff Farrow, is Mr. Al Stayman who is there 
in the audience, and we would welcome his presence and have him 
sit there because I do have some extra questions that I want to 
address to him directly. And I just think is that possible? I 
ask unanimous consent. I think with unanimous consent anything 
is possible, if the Chair does not object. But I see no reason 
why Mr. Stayman cannot come and share with us the benefit of 
his historical activities in the things that he has done for 
the insular areas more than anybody that I can perceive. Is 
there any objection to that? He works for the Senate.
    Mrs. Christensen. Let me get a clarification from the 
staff.
    Mr. Faleomavaega. All right. Can we get a clarification?
    Mrs. Christensen. Can you go ahead in the meantime?
    Mr. Faleomavaega. Yes, Madam Chair.
    I have always said with tremendous hesitancy about the 
establishment of the IGIA. And I do want to thank my good 
friend Mr. Farrow for giving us a real historical summary of 
exactly how this whole concept of an IGIA came about. It wasn't 
because of any interest in the insular areas, it was an 
interest toward Puerto Rico. And the fact that we have 4.4 
million U.S. citizens living in Puerto Rico, the fact that 
Puerto Rico being a highly charged political issue because it 
has its potential of being a State, if it ever becomes a State 
with seven Members of Congress and two new senators, that is 
why Puerto Rico has always been part of the White House 
collaboration in making sure whatever Puerto Rico's future will 
be or has been or hopes to be. This is a never-ending issue 
that has been ongoing now for the last 50 years. And Mr. Farrow 
is smiling because he knows what I am talking about.
    Madam Chair, historically we all know this, for the last 50 
years, insular areas are not even on the map in any way or form 
as far as Washington, D.C. is concerned. Not because the 
Senators or Members of Congress don't like insular areas, 
simply because when you put it in terms of priorities insular 
areas were never a high priority in the minds of the Members of 
the Congress as well as the Administration.
    So what has happened over the last 30 or 40 years perhaps, 
Congress decided to authorize providing these insular areas 
with congressional Delegates. And now we have the completion of 
this cycle now that finally Congress has said we want a 
congressional Delegate from the Commonwealth of the Northern 
Mariana Islands. So there it is. The picture is now completed. 
We have five congressional Delegates that will begin. I don't 
know if Mr. Tenorio is going to run for that office come this 
November. And I know that it is very unpolitical about this 
hearing, and what we are discussing is nonpartisan, whether 
Republican Or Democrat.
    But the point I am making here is that that was the very 
reason why we have congressional Delegates elected. And if you 
really want to be realistic about the IGIA, with all due 
respect, Mr. Domenech, you were not there in the hearings that 
I have attended. You cited about 15 different agencies. As far 
as any real policymakers coming up from those departments, come 
on, let us be serious. They were not policymakers. And if they 
were good for taking notes or for whatever reasons, my biggest 
criticism is that we have so many agency representatives each 
time we have this IGIA hearing or meeting. But in terms of--we 
ended up having to deal with 30 separate issues. And all cross-
wired in the terms of it may relate to that territory's need 
and totally irrelevant to another territory.
    So I would like to suggest that maybe we can do this a 
little better. And the fact that these congressional Delegates 
are supposed to be the mouthpiece, the liaison, or whatever you 
want to do in connection with any Federal issue in Washington 
now that CNMI is in the picture, I really don't see the 
relevance of why we should have to continue the IGIA the way it 
is currently structured. But in having a liaison, let us face 
the facts, the Interior Department's real administration is 
with the FSM, with Palau and the Marshall, administration of 
those funds, and American Samoa. But as to any other real 
policy in terms of any serious funding coming out of Interior 
appropriations going into these insular areas, I don't see it, 
with the exception of the Federated States that we are having 
to deal with now, right now, and even in the years to come.
    So what I am saying, Madam Chair, is that I am seriously 
questioning whether there is any real relevance in having the 
presence of an IGIA. The way it is currently structured it just 
to me is totally overly cumbersome. And I think that is the 
very essence of what we are trying to eliminate here, is 
Federal layers of bureaucracy, so that we can cut right into 
the chase and get results of the issues and the questions that 
these territories have in relation to the Federal Government. 
It seems that we have a problem here even dealing with the 
Interior Department.
    American Samoa is very unique and very different from all 
the other insular areas. We are an unincorporated and 
unorganized territory of the United States. And interestingly 
enough, even Puerto Rico is an unincorporated territory of the 
United States. So there is another gray area that we still have 
not really made a decision in terms of what is the future of 
American Samoa's relationship to the United States.
    Have we found out from the counsel if we can invite Mr.--
still waiting? Sorry, Al, I really wanted you to come and 
participate because I really think it is good. And Madam Chair, 
I want to say that this is great that we finally have this 
chance to hold this hearing.
    I think it was Mr. Farrow that mentioned the whole essence 
of the IGIA is to give more clout, if it was Mr. Farrow or Mr. 
Domenech that made this statement, more clout to what? And the 
fact that there are avenues, there are procedures, there are 
ways that we can go about, I guess, trying to put a thread 
through the camel's eye--what do you call it, camel's--I don't 
know, the eye of a camel, the eye of a camel?
    Mrs. Christensen. The eye of a needle?
    Mr. Faleomavaega. Yeah, threading the camel, the eye of a 
needle or something like that.
    The point is that I really think that maybe another way to 
suggest in how we can better--the whole idea is how we can 
better streamline, how we can better produce results of the 
issues affecting the insular areas. I feel that now with Saipan 
now coming into the picture, maybe we should have an 
interagency of the congressional Delegates, regardless of party 
affiliation, and then work together with the Governors directly 
of each insular area and leave the interagency with Puerto Rico 
and the White House. And of course we would like to have a 
White House linkage in terms of what we are doing, because they 
have a domestic assistant to the President, they also have 
assistant to the President in other major areas that Mr. Farrow 
is very familiar with.
    So in essence what I am suggesting here, Madam Chair, is 
that the way it is now structured I just don't see the 
practicality of having 15 or 20 subagency representatives that 
don't even make decisions. And when we talk about issues that 
in many instances doesn't relate to my needs, I am wasting my 
time being there.
    So I think if we want to talk about an interagency 
organization, I see that now that Saipan is into the fold, we 
now complete the role of what congressional Delegates should be 
doing on behalf of their territories and making sure the 
information or the needs are brought to the attention of the 
Congress and that relevant Federal agency.
    And so my time is up. I will wait for the second round, 
Madam Chair.
    Mrs. Christensen. While we wait for the legal counsel to 
get back to us, I will go ahead with my questions.
    Acting Assistant Secretary Domenech, I have asked this 
question before, too, and I really have never gotten a good 
answer. It is a two-part question. Who within the Federal 
Government has the responsibility for setting the Federal 
policy for the territories and, more fundamentally, can you 
tell us what that Federal policy is?
    Mr. Domenech. That is a very broad question, Madam 
Chairman. I believe the correct answer for that is every 
Federal department has its own piece of that pie. I think, 
shorthand, a nonlawyer's answer to that is the Secretary of the 
Interior retains the administrative authority over the 
territories in the areas essentially that no other department 
is involved in. So our piece of the pie is, we have one piece, 
and to the extent that the Department of Education is involved 
in each of the territories, they do their own thing, HUD, 
Labor, et cetera. And so there is not a single policy point for 
the territories per se, as you construct the question.
    Mrs. Christensen. It just seems to me that--I don't know if 
anyone else at the table wants to take a stab at answering or 
making a suggestion or if you want to make a suggestion as to 
how that policy is going to be set. Because I have not sensed 
in my 12 years here an overarching policy with regard, from the 
Federal Government, from the White House, the Administration, 
let me say, to the territories. So I don't know if anyone else 
wants to take a stab at answering that. Did one exist before 
that I missed?
    Mr. Farrow. Madam Chair, I think that there has never been 
a clear, consistent policy in a simplified fashion with respect 
to the territories. President Carter submitted to the Congress 
a comprehensive policy, maybe 1979, 1980, I think it was. But I 
don't recall that since that time there has been a 
comprehensive policy proposal, either administratively or 
legislatively proposed.
    And policy, I think if you look at it, as Mr. Domenech 
said, there is education policy and energy policy and tax 
policy, all of which have separate responsibilities and 
missions. One of the reasons for the Interagency Group was to 
coordinate those policies as they affect the insular areas, 
since the insular areas don't have the same representation that 
States have in the Federal process to get their concerns heard 
and their issues attended to. To the extent that there is a 
policy direction of an administration, it is set by the 
President and his office. And for that reason I think it is 
ineffective to have one agency try to assume that role.
    Mr. Domenech I think correctly described the responsibility 
of Interior with respect to policy making in the territories 
and the other agencies. But there has been a change in the 
status of the territories since that arrangement was enacted 
into law, and it is law, with respect to all of the territories 
in the Revised Organic Act, I believe, of the Virgin Islands 
and other statutes. And that changes now that the insular areas 
all have local self-government and set their own priorities and 
chart their own direction. Prior to that time Governors were 
appointed by the President and reported to the Secretary of the 
Interior. The territories had limited self-government. So it 
made sense for the Secretary to be that preeminent authority. 
The Interior Department was local government, even in places 
like Samoa. Samoa now has substantial autonomy. As much as the 
Secretary may provide funding for the territory, Congress 
provided that the Constitution of American Samoa, written under 
the authority of the Secretary of the Interior, can only be 
amended with the approval of act of Congress.
    So there is a great deal of autonomy that the territories 
now have, and they can relate to other agencies that in the 
past few decades they have been included in most Federal 
programs. At one point most of the budgetary support, 
programmatic support, even on education matters or health care 
matters, came through the Department of the Interior and now 
comes through HHS and Education, and so forth. And that is why 
you need a leadership and guidance on policy and budgets within 
the Executive Office of the President and not in any particular 
agency. Interior has tried, but can only do so much.
    I would point out that it was Interior--Mr. Stayman, who is 
with the Senate committee staff now, who came to me in the 
Clinton Administration and said let us revive this idea of an 
Interagency Group on Insular Affairs when he was at the 
Department of the Interior, the Interior Department recognized 
that it did not have, to use Congressman Faleomavaega's words, 
the clout to have many decisions made on budgets and on 
fundamental policies, tax policies and others, that the 
territories were interested in. Most issues are not within this 
jurisdiction of Interior.
    Mrs. Christensen. Let me ask Mr. Flake if he might have 
another line of questioning, because I know a vote is on and he 
might have to leave.
    Mr. Flake. No.
    Mrs. Christensen. Thank you. Then the Chair now recognizes 
Mr. Faleomavaega for any further questions he might have.
    Mr. Flake. Let me just, to Mr. Faleomavaega's point, now 
that the Commonwealth is going to be represented, is it past 
time for this, can we make do now that all the territories are 
now represented in Congress? I know it is not full 
representation of the Senate and what not. But, Mr. Tenorio, I 
would be interested in your response to that. Do you think that 
that would suffice or is it still useful or productive to have 
this body?
    Mr. Tenorio. I always view the relationship between the 
United States and the Commonwealth of the Northern Mariana 
Islands with having in mind as a term of reference the 
Covenant. The Covenant of course is a very special document and 
it was entered into between two entities, and that was when the 
Northern Marianas was part of the trust territories. So we were 
able to fortunately negotiate an agreement that is unique and 
other jurisdictions just don't have it. And that is why I feel 
that the term of reference insofar as developing a policy to 
guide the Northern Marianas should be the Covenant. The 
Covenant is very specific on all of its 10 chapters; the 
political relationship, how we are to deal with citizenship and 
nationality, the provision on immigration and minimum wage, and 
other aspects that were spelled out.
    So I feel that applying a common territorial policy to 
encompass all jurisdictions may be the wrong approach to 
addressing issues in the territories. There may be some 
similarities, some problems that all share, but there are also 
unique situations that each of the territories have that would 
not be addressed by having a common territorial policy 
throughout.
    Mrs. Christensen. Thank you. The Chair now recognizes Mr. 
Faleomavaega.
    Mr. Faleomavaega. As I said earlier, we have such a mixed 
stew here among the different insular areas, you cannot make 
all of us in the same status because we are not. American Samoa 
does not even have an organic act; and we don't even have a 
government, technically, if you want to put it in those terms.
    We have never--we had several attempts in the 1930s that--
there were proposed bills to have an organic act for American 
Samoa, but it never came through. As Mr. Tenorio said earlier, 
CNMI has a covenant relationship which is very unlike the other 
insular areas, and to me it is a treaty relationship, very 
unique.
    Then when we start talking about the Federated States of 
Micronesia--Palau and the Marshalls--then we really get into 
grey areas that are not very well addressed, in my opinion; but 
it is there, and we have to deal with that reality.
    As Mr. Farrow has said earlier about the fact that now 
there is a provision as an amendment in the law that says that 
the local constitution--which, by the way, was never approved 
by the Congress; it is American Samoa's constitution. It was 
approved only by the Secretary of the Interior because of the 
preliminary authority that the Congress has under the Federal 
Constitution. In 1929, the Congress just simply said, all 
judicial, military, administrative authority of this island's 
territories is given to the President. And then the President, 
by executive order, now to this day has given it to the 
Secretary of the Interior.
    My point here, when we had electing our Governor, it did 
not even require congressional approval, unlike other 
territories. It just required the executive authority of the 
Secretary of the Interior. To this day, this is how we end up 
electing our Governor through an executive authority of the 
Secretary of the Interior and not because the Congress voted.
    This is very weird, but that is the reality that we are 
faced with.
    Now, a classic example where the stimulus package is an 
example, thanks to Donna, myself, and Madeleine Bordallo and 
Mr. Fortuno, we bound together and this is how the territories 
ended up in getting the benefits of the stimulus package. 
Ironically, too, there were serious questions raised: Because 
we don't pay Federal income taxes, why should these territories 
get the same benefit? But somehow friends like Charlie Rangel 
and all the others in the House supported this effort.
    So I would say that I think, as has been stated earlier--I 
hate to say this, but sometimes our friends in the Interior 
Department make selective decisions. When they feel like 
getting involved in an insular area issue, they will be 
involved; otherwise, just let the territories swim on their 
own. if they can't make it, that is their tough luck.
    And I don't know if that is really what we want to achieve 
here as far as getting a better, streamlined procedure in how 
to deal with the insular areas, as I am sure that this is not a 
personal attack on any of our friends who are working their 
darnedest.
    And the Interior Department should try to provide 
assistance to the insular areas. As you said, Mr. Tenorio, the 
covenant relationship is the foundation in the standard that--
however, CNMI has to deal with its issues.
    You have mentioned about the fact that you had potable 
water issues. This is 4 years ago. We have 200 inches of rain 
in American Samoa. I wish we could give you some of our water, 
which is never our problem and our issue.
    But sometimes I think this is something that I feel that 
the IGIA--I feel, as an issue, is totally irrelevant to my 
needs. But I am happy to sit there and listen to the problems 
that other territories have that does not pertain to me 
directly. So this is why I am a little fuzzy when it comes to 
IGIA continuance of putting some 15 or 20 representatives of 
the different Federal agencies, all meeting in this one room in 
the Interior Department, talking about some issues for only 1 
hour. And then after that everybody goes back, and it seems 
like we have really accomplished something, and we ended up 
really accomplishing almost nothing.
    Now, I hate to make that point in being critical about the 
issue, but I just feel that maybe there is a better way that we 
can streamline the IGIA in concept, as well as structurally, on 
how we can make this more forthcoming--or producing results is 
what we are trying to achieve here.
    As Mr. Domenech has said earlier, some things we have done. 
But I think--by and large, I don't think our batting average 
has been very high, in my humble opinion, of all the things 
that we went through, discussing about twenty different issues 
and only accomplishing about one or two.
    And that is not the reason why I didn't come to the 
February meeting, by the way. I think I was sick on that day, 
OK?
    But I really do want to say that I think it is an important 
issue, Madam Chair, in the coming year or this season when we 
have a new administration, new policy--assuming I get 
reelected; I don't know if I am still going to be around.
    But this issue I think we need to address more seriously, 
and hopefully it will make a better structure out of it, 
because I really--in my personal opinion, Madam Chair, it is 
not working.
    And, by the way, as Mr. Farrow said earlier, there was a 
policy--there was even a policy of getting rid of the entire 
agency of insular affairs altogether. So we have some 
structural challenges ahead of us, and hopefully we will 
continue this dialogue and see what--we need to make some good 
decisions to make this thing a go if we are going to continue 
it.
    Thank you, Madam Chair.
    Mrs. Christensen. OK. I do have a--thank you, Mr. 
Faleomavaega. I share some of your concerns, but I think they 
can be fixed moving forward.
    I want to ask about two particular issues that came up in 
the 2000 IGIA. Among the 15 action plans of phase one items 
that were listed in the progress--2000 IGIA progress report, 
that you asked to be made a part of the hearing record, was a 
question of applying U.S. statistical programs in insular 
areas.
    And you may be aware that we recently held a joint hearing 
with the Subcommittee on Census to raise the issue of the lack 
of available data in the territories--something that again I 
have raised, I think, at every IGIA that I have attended--and 
the impact, in this case the impact it was having most recently 
preventing the U.S. Labor Department from being able to 
determine the likely impact of an additional 50 cent increase 
in the minimum wage on the economy of American Samoa.
    In applying U.S. fiscal programs in the insular areas, do 
you recall what the outcome of the IGIA was on that issue?
    I know I am asking a lot.
    Mr. Farrow. Well, a little bit. There was an agreement that 
the Census Bureau and the Office of Insular Affairs would 
identify statistical programs, such as the American Community 
Survey, that did not apply in the insular areas and clarify the 
cost and other issues surrounding the application of the areas. 
And by ``other issues surrounding the application,'' they were 
talking about different forms of addresses that are used in 
some areas versus others that are different from the standard 
in the States and the complexity that that added to the process 
of fact gathering, the different information that the local 
governments themselves had available. So that was agreed to.
    I know that, as well, we agreed with the Census Bureau, 
obtained an agreement that they would include information 
regarding Puerto Rico, at least in the 2000 census, equally 
with the States. I don't know what the implementation was after 
that, after 2000 when the administration changed. The 
Interagency Group on Insular Areas wasn't active for the next 
few years until 2003, so I don't think there was follow-up at 
that level. There wasn't--as I said, my position at the White 
House wasn't filled. So no one from the White House was 
following up with the Census Bureau.
    I can't say for sure that nothing was done for the next few 
years, but I am not aware of it being done and maybe the 
Interior Department is.
    Mrs. Christensen. I think the Puerto Rico--the issue you 
raised about Puerto Rico was done. We are back to square one, 
but I think we are making some progress now on the American 
Community Survey, based on the responses we got from Census 
during our hearing.
    Mr. Farrow. One of the issues that we dealt with was that 
I--was the economic census in the territories. And the 
Department of Commerce had sent up legislation to discontinue 
the economic census in the territories because of these same 
types of issues--budget was going to cost $5 million and the 
different forms of address--and we successfully reversed and 
had the Administration actually recall that legislation that 
had been submitted by the Department of Commerce.
    And I think that is an example of what I am talking about 
with the need for some White House direction, because OMB was 
sympathetic to the position of Commerce that this is a way to 
save $5 million: On a per capita basis, it was going to cost a 
lot more to do the economic census in the territories than the 
States, so get the White House to push OMB to go along with the 
$5 million.
    Mrs. Christensen. Let me ask a question on another issue 
that came up in the 2000 IGIA progress report.
    One of the phase 2 issues by island was a question of the 
Virgin Islands' desire to receive a cover-over of taxes on 
gasoline. The report indicated that a working group meeting was 
held with the Department of Treasury in February of 2000, 
resulting in an action plan statement that said the Supreme 
Court ruled against the V.I. Gasoline tax claim, and there is 
no interest in the part--and this is a quote--``there is no 
interest on the part of the Federal Government to revisit this 
issue.''
    While that statement--the quote is fairly straightforward 
because this issue comes up over and over again at home. Can 
you elaborate a bit on the analysis that led to the conclusion 
of the lack of interest of revisiting this issue?
    Mr. Farrow. I recall this more specifically because it is 
an issue that has come from my home territory, and it has come 
up over the years so often. And there are three elements of the 
analysis and they are simple and straightforward.
    One you stated in the question, and I guess was stated in 
the report, which was, the Supreme Court of the United States 
had ruled that the Virgin Islands did not have a legal claim to 
the money, so as a matter of law, that argument from the 
territory was not valid.
    Number two, the Congress and the President had agreed and a 
couple of administrations had agreed upon legislation that 
limited the cover-over provision of the revised organic act of 
the Virgin Islands, which provided the Federal taxes on 
products of the Virgin Islands transported to the United States 
and consumed in the United States would be covered into or 
transferred or granted into the Treasury of the Virgin Islands.
    The Congress and the President had agreed that those--that 
would be amended to only provide to the product of rum. So 
Congress and the President had all reached this decision, and 
the Supreme Court had reached this decision before.
    There was an effort to negotiate a settlement of the Virgin 
Islands' claim before the Supreme Court ruled, and the 
administration at the time, as part of that decision, offered 
to give the Virgin Islands $30 million a year. This was, I 
believe, in the late 1970s. And the Virgin Islands turned down 
that offer.
    But subsequent to that, as I said, the Supreme Court ruled, 
Congress and the President changed the law. So there is no 
legal basis and there is a policy decision. When the 
provision--and the third element, when the provision of the 
revised organic act was enacted in 1954, it was clear that 
everybody was talking about returning taxes on rum. The Virgin 
Islands sought--this same provision of law applied to Puerto 
Rico; it also applied to the Philippines before that. And the 
product used in Puerto Rico was rum, and the product that was 
intended in the Virgin Islands was rum.
    Congress did not intend in enacting the cover-over to begin 
with that it would apply to gasoline. So because there was not 
congressional intent in the beginning and the law was not 
intended to cover gasoline, because the Supreme Court ruled 
that the Virgin Islands didn't have a valid legal claim because 
the Congress and the President had recently determined that not 
only--not gasoline, but not only other alcoholic beverages 
would not provide taxes that would be covered over, there was--
the decision was made as it was.
    Mrs. Christensen. I have one last question, and then I will 
turn it over to Mr. Faleomavaega if he has any other questions.
    There has been discussion this afternoon about the 
importance of the White House involvement in insular area 
issues being essential to assuring success. I am not sure if 
everybody agreed to that, but Mr. Farrow does, and I tend to 
agree.
    So I would ask the panel, really, if you believe--if we 
were to propose putting the Executive Office of the President 
attendant to territorial issues in statute, would we encounter, 
do you think, the same opposition that Congressman de Lugo did 
when he proposed something similar in 1992 and 1993, or do you 
think the environment is more accepting of that type of a 
proposal?
    I am asking everyone.
    Mr. Farrow. I think you quite likely may encounter 
opposition as well. The opposition would come from an Interior 
Department, and I am not now talking about the current 
officials, but the officials of the next administration.
    You may encounter an Interior Department that wants to keep 
as much responsibility and jurisdiction as it can. You may 
encounter a White House that has--or Executive Office of the 
President, in a broader context, that is overwhelmed with the 
new responsibilities it is facing; and every White House wants 
to shift responsibility for agencies to departments so it can 
concentrate on what it considers priorities.
    You will also encounter, likely, a White House and OMB that 
will want to limit the staffing and budget within the Executive 
Office of the President. Every President has come in wanting to 
do that. And so they will not be anxious to assume 
responsibilities that will require additional staffing.
    But I still think you need to go ahead in the interest of 
the insular areas and the interest of the Federal Government 
dealing with the insular areas and press for it.
    I would note that the opposition that Chairman de Lugo 
encountered to this concept was not so much putting this in 
statute, although that will be an issue. Presidents don't like 
to be restricted more than they have to be, and they will try 
to resist that. But it really was the view of the Secretary of 
the Interior in 1993, who was an extraordinarily capable 
Secretary who thought that he could address and handle these 
issues himself. And he was very successful Secretary in a lot 
of ways and very capable.
    But with the advice of Mr. Stayman, as I mentioned and with 
experience over the years, by 1999, the Secretary realized he 
was not in a position to successfully lead the administration 
on every issue involving the territories that needed leadership 
and policy guidance.
    So I think you may have a new Secretary who thinks, I can 
do this; but I think experience will tell you and you should 
impress upon the new administration that the change needs to be 
made.
    Mrs. Christensen. Mr. Tenorio, do you have to be excused at 
this time or did you want to speak before you leave? I know you 
had a time constraint.
    Mr. Tenorio. Yes, Madam Chairperson. I feel that there is 
always a need to have contact in the administration, whether it 
is IGIA as an official group or a smaller subgroup of IGIA. The 
main thing, at least from my own experience, is that we need to 
continue to have dialogue. We need to have an open channel of 
communication with the agencies that we feel can help us out. 
Not having a group like this or not having a formalized way of 
discussing things with them would just leave us in the dark in 
many cases, as I said before.
    So I really do not have any major recommendations on how to 
structure. My main concern is that we need to have the Federal 
folks communicating with the local government folks as much as 
possible so that issues can be discussed timely and that 
possible solutions could be offered quickly.
    Thank you.
    Mrs. Christensen. I want to thank you for being here and 
for your testimony and answering the questions, and you are 
excused if you need----
    Mr. Faleomavaega. If I could, Madam Chair, I would like to 
have Representative Tenorio stay for half a minute, 30 seconds, 
45 or so.
    The reason for my saying this, one question--and, Madam 
Chair, you had raised the issue of minimum wages. Secretary 
Kempthorne went to CNMI. Secretary Kempthorne also went to 
American Samoa. As you know, we authorized an economic study 
report through the Bureau of Labor Statistics that came out, 
and both Chairman Miller and Chairman Kennedy were very 
critical because the report was not comprehensive enough to 
really tell us whether or not to justify a raising the minimum 
wage to the 50 cent criteria that the law provided.
    And what I want to ask you, Secretary Domenech--I would 
like to make this as an official request, because going through 
the legislative process is almost nearly impossible 3 months 
before--we are out of session in September. And I would very 
much appreciate it Secretary Kempthorne to take the initiative, 
using technical assistance funds, and come out with funding 
some kind of a comprehensive economic report study--now, as 
soon as possible--so that we don't have to wait for another 
period of how many months before we come up in addressing this 
issue.
    Because to all the efforts that we have made, our Members 
even on the Senate side, and Mr. Stayman's terrific help, and 
also with Governor Fitial and Mr. Tenorio, the problem that we 
are faced with, and rightly so, is the fact that even in our 
own situation, the report was not comprehensive enough, even 
though they made general statements to the effect that the 
economies of these territories will be affected negatively if 
the 50-cent increase was to be made.
    Well, lo and behold, when Chairwoman Christensen and I went 
to American Samoa, we conducted the oversight hearing. And one 
of the first questions I asked the managers of our local two 
canneries, Were there any layoffs when we instituted the 50-
cent increase? They said, No.
    So if that does not encourage Chairman Miller and Chairman 
Kennedy says, we really don't have an economic problem here. It 
is a sense of honesty and being a little more forthright in 
telling us exactly--and this is the thing that really has 
bothered me so much. We really don't know what the economic 
status is of both CNMI, as well as American Samoa, and that is 
why we requested the Department of Labor to conduct this study, 
especially as it relates to the minimum wage issue, which was 
never properly addressed.
    So I am making this as a formal request, Secretary 
Domenech, if you could take this issue quickly to Secretary 
Kempthorne, to see if an initiative could be taken by the 
Interior Department, which you have the authority--you don't 
need the authority from us--to use your technical assistance 
funds to conduct a comprehensive economic study as soon as 
possible and not have to wait for the next Congress to come out 
next year.
    It will be too late. In May of next year, the next increase 
comes up. And I really, really--and I think this is what the 
Congress is trying to get.
    Unfortunately, your Department of Labor was not very 
cooperative when questions were given--I don't know how it is 
with CNMI, but certainly with American Samoa--for follow-up 
questions on some of the economic study reports coming from our 
two main companies that do business there, was not very 
forthcoming.
    So I would like to ask if there is any way possible that 
Secretary Kempthorne can take the initiative and see if we can 
do this, as soon as possible and not have to wait. Because, 
unfortunately, we have done everything we can from this end.
    But the fact of the matter is, we still have not received a 
comprehensive economic report for both CNMI and American Samoa. 
And at this time, I would like to ask, Mr. Secretary, if the 
Interior Department can do this for us. And you can do it 
administratively, we can consult and find out exactly how we 
can go about doing it. But I really think this is something 
that the Interior Department should help us with as soon as 
possible.
    And the second issue that I want to raise--and I am sorry, 
Ped, I didn't mean to delay your stay here, but I wanted you to 
hear that this is coming from the horse's mouth and making this 
as an official request to our good friend here, Secretary 
Domenech, and see if we can get some results on this request.
    The COLA issue, Mr. Secretary, has been a real--for some 
reason or another, American Samoa has simply been overlooked 
for all these years. And why we have never been part--of 
course, the Census Bureau has not been very cooperative either 
in going about and conducting possible surveys and whatever is 
necessary to give us better data and information.
    And, by the way, this has been the complaint of all the 
insular areas. Census Bureau simply does not have the 
appropriate data information to give us a better understanding 
of what not only our economic status is, but just simply as it 
will relate to whether or not we have become beneficiaries to 
some of these--for several Federal grants programs simply 
because we don't have the proper information.
    But I think my first request, Mr. Secretary, will--I really 
would appreciate it if you could take that immediately to 
Secretary Kempthorne. And I will develop a letter in support of 
this request with Madam Chair, and hopefully, she will accept 
this verbal request from me.
    And with that, Madam Chair, I thank Ped--I am sorry, I 
didn't mean to delay you--and Secretary Domenech and Jeff and--
sorry, Al; there is a House rule that we cannot allow Senate 
staffers to testify here.
    So with that, Madam Chair, I actually withdraw my earlier 
request for you--to have you appear.
    Mrs. Christensen. Without objection.
    Mr. Faleomavaega. Thank you, Madam Chair.
    Thank you so much for coming here and to testify.
    And, Madam Chair, again, thank you for your leadership and 
initiative in conducting this oversight hearing. And I look 
forward in working closely with our friends here from the 
Interior Department.
    And to Jeff and Mr. Secretary and Mr. Tenorio, thank you 
again for your testimonies.
    Thank you, Madam Chair.
    Mrs. Christensen. Thank you, Mr. Faleomavaega. I also want 
to thank Mr. Flake for attending.
    I thank the witnesses also for their valuable testimony and 
members for their questions. Members of the Subcommittee may 
have some additional questions for the witnesses. I will ask 
that you respond to those in writing, and the hearing record 
will be held open for 10 days.
    Mrs. Christensen. I also, in thanking the witnesses, I want 
to say that the personal experiences and the expertise from the 
standpoint of how the IGIA operates internally and the history 
of the IGIA has helped us to better understand where flaws may 
exist. In the past year and a half, the Subcommittee has held 
hearings on a number of issues important to our fellow 
Americans residing in American Samoa, Guam, the Northern 
Mariana Islands, Puerto Rico and my home--our home, Jeff--the 
U.S. Virgin Islands. Some of our work resulted in the House 
considering and passing legislation addressing outstanding war 
claims, the construction of schools, the repeal of taxes, final 
financial accountability and the extension of U.S. immigration 
laws.
    Our hearings have also built upon previous congressional 
efforts to resolve political status for our largest territory 
of Puerto Rico and to understand the challenges faced by U.S. 
territories in financial management accountability and 
implementing alternative energy, diversifying economies and 
raising the standards of living.
    I am certain that we can all agree that because of the 
territories' unique status within the American family, there is 
a special obligation resting with the Federal Government to 
resolve issues and make policy recommendations reflecting the 
islands' distinct circumstances. This responsibility holds true 
for both unresolved problems of the past and challenges of the 
future.
    The differences between the IGIA approaches of the Clinton 
and the Bush Administrations are clear and speak to the insular 
legacies one President has left behind and the other will soon 
follow. The Subcommittee is interested in building upon the 
lessons learned from two very different approaches to 
leadership; and what is clear to me is that the Federal 
Government should, at the very least, provide continuity for a 
group which can have a very serious impact for Americans 
residing in the U.S. territories.
    In the near future, we hope to collaborate with you and 
other island leaders in putting something together that would 
offer the kind of continuity and reliability needed to move our 
islands forward.
    And, again, I thank the witnesses and the members of the 
Subcommittee and the staff for their work on this hearing. If 
there is no further business, the hearing of the Subcommittee 
on Insular Affairs now stands adjourned.
    [Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    [A statement submitted for the record by The Honorable John 
P. de Jongh, Jr., Governor, U.S. Virgin Islands, follows:]

           Statement of The Honorable John P. de Jongh, Jr., 
                  Governor of the U.S. Virgin Islands

    Madam Chairwoman and Distinguished Members of the House Resources 
Committee, I am honored to present the views of the Government of the 
U.S. Virgin Islands (``GVI'') on the effectiveness of the current 
interagency process for developing federal territorial policy under the 
mandate of the Interagency Group on Insular Areas (``IGIA''). For the 
reasons discussed below, the GVI believes that the IGIA process, while 
well-intentioned, is structurally deficient and unable to achieve its 
objective of ensuring fair consideration of territorial interests and 
proper coordination between federal agencies in the development of the 
federal-territorial policy.
    Before describing these structural deficiencies and offering 
prescriptive remedies, I believe it would be useful to review the 
history leading to the formation of the IGIA, which history should 
inform the Committee in legislating, or making recommendations for, 
changes in the structure and mission of the IGIA.
    The insular territories of the United States, including the U.S. 
Virgin Islands, historically were administered as agencies of the 
federal government. Acquired by war and by purchase, the territories in 
the beginning lacked sovereignty, self-government and representation in 
the policy-making processes of the administering departments of the 
U.S. government. Indeed, the U.S. Virgin Islands were initially 
administered by the U.S. Department of the Navy in 1917 and only later 
transferred to the Department of the Interior. With the enactment of 
the Revised Organic Act of 1954, the Virgin Islands assumed increasing 
powers of self-government, culminating in the popular right to elect 
the Governor of the Virgin Islands in 1968 and a non-voting Delegate to 
Congress in 1972. Today, the GVI exhibits, as the courts have affirmed, 
the attributes of sovereignty similar to a state government, full 
autonomy in matters of local self-government (including the right to 
determine the size, form and powers of the local government pursuant to 
a constitution of its own making), but still lacks full voting 
representation in the Congress of the United States and the right to 
vote for President of the United States.
    As an unincorporated territory of the United States, the Virgin 
Islands is subject to the plenary power of Congress pursuant to the 
Territorial Clause of the Constitution. Indeed, the Congress has 
authority, and exercises such authority, over such critical areas of 
territorial development as the income tax laws, customs regulations and 
trade policy, federal programs and appropriations. To the extent that 
federal policy towards the territories often originates in the 
Executive Branch, it is essential that the U.S. territories have full 
and fair access to the federal policy-making process, particularly in 
view of their lack of full voting representation in the Congress.
    The Department of the Interior was chosen as the lead agency, first 
for administering, and later for developing, federal policy towards the 
territories because of its traditional role as the steward over the 
public lands and territories within the continental United States. With 
the tremendous expansion of the federal role in the national economy 
over the last 40-odd years, including in such vital areas as federal 
tax policy, trade policy and health care policy, the Department of the 
Interior is ill-equipped and ill-suited to properly represent the 
interests of the insular territories in those areas in which it has no 
jurisdiction or even expertise. Indeed, as former Chairman of the 
Senate Interior Committee, J. Bennett Johnston, observed over a decade 
and a half ago, the Department of the Interior often finds itself ``in 
a weak and isolated position when advocating special treatment for the 
[territories]. Other agencies generally discount Interior's views 
regarding non-Interior programs, and they often give the [territories] 
a low priority when allocating program resources.''
    This structural weakness was most recently exhibited in the 
development of Treasury regulations implementing the provisions of the 
American Jobs Creation Act of 2004 (``Jobs Act'') which has had a 
devastating impact on the Virgin Islands Economic Development 
Commission (``EDC'') Program. The Department of the Interior supported 
the reasoned and balanced approach developed by the GVI to the 
implementing regulations, but the Department was unable to effectively 
engage Treasury or otherwise advance our cause on this critical issue.
    Recognizing these structural weaknesses, the Chairmen of the House 
and Senate Insular Affairs Committees separately introduced legislation 
in the early 1990's to coordinate and centralize federal policymaking 
for the insular areas. Then-Chairman of the House Subcommittee on 
Territorial and Insular Affairs Ron de Lugo introduced a bill in 1992 
entitled the ``Insular Areas Policy Act'' which would have established 
a Cabinet Council on Insular Affairs to ``develop, coordinate, and 
oversee the implementation of [federal] policies regarding the U.S. 
insular areas.'' The Council would include representatives of the heads 
of all federal departments and agencies, chaired by the President's 
chief foreign policy and domestic advisors and would be located within 
the Office of the President.
    Then-Chairman Johnston of the Senate Interior Committee in the same 
year introduced his own bill which would have established an 
interagency ``Insular Areas Policy Council,'' which was also charged 
with coordinating ``the activities of federal agencies'' in the 
Territories, determining the ``appropriate role of the [territories] in 
U.S. domestic and foreign policy,'' ``considering'' the policy 
recommendations of Council members and ``proposing'' policies to the 
President and the Congress. Significantly, the Senate bill would have 
retained the primary role of the Secretary of the Interior in federal-
territorial policy by establishing the Secretary as Chairman of the 
Council.
    Neither the House nor the Senate bill was enacted into law, 
primarily as a result of opposition at the time in both the Congress 
and the Administration. The need for some interagency mechanism to 
ensure greater coordination of federal-territorial policy persisted, 
and President Clinton, by executive memorandum, established the 
predecessor to the current IGIA on August 9, 1999. The IGIA, consisting 
of ``senior officials selected by the heads of executive departments, 
agencies and offices,'' was mandated to ``give guidance on policy 
concerning [the] insular jurisdictions.'' The White House memorandum 
established the Secretary of the Interior and the White House Director 
of Intergovernmental Affairs as the co-chairs of the IGIA.
    The IGIA held its initial organizational meeting in January 2000 
and a series of internal issues meetings in the months thereafter. The 
IGIA produced a draft report outlining major issues affecting the 
territories and a ``roadmap'' of follow-up and action items. Because 
the 1999 executive memorandum had no legal effect upon the expiration 
of the Clinton Administration, the IGIA did not automatically continue 
with the advent of the Bush Administration and the momentum of the 
first year died. The IGIA was not reconstituted until nearly three 
years later when President Bush signed a Executive Order on May 8, 2003 
reviving the interagency process. Importantly, the 2003 Executive Order 
established the IGIA ``within the Department of the Interior,'' 
altering in our view both the architecture and potential effectiveness 
of the IGIA process.
The Effectiveness of the Current IGIA Process
    The subject matter of the present hearing is the ``Successes and 
Challenges of the IGIA.'' The IGIA, even under its current structure, 
offers an important opportunity for the governments of the U.S. 
territories to raise issues of concern directly to the attention of the 
Secretary of the Interior and the representatives of the federal 
departments and agencies. The ability of the IGIA, in its current form, 
to effect needed change and to develop fair and equitable policies 
towards the off-shore territories, however, is a different matter.
    For example, at the February 26, 2008 annual meeting of the IGIA, 
the GVI presented a list of critical federal issues affecting the U.S. 
Virgin Islands, including recommendations for (1) support for 
legislation ensuring equal treatment of the territories in individual 
benefit programs, including Medicaid funding, S-CHIP funding and the 
Low Income Home Energy Assistance Program, (2) providing a reasonable 
cost-sharing formula for the administration of the Earned Income Credit 
(``EIC'') program in mirror tax code jurisdictions, and (3) support for 
legislation to remove the unfair cap limiting the amount of rum excise 
taxes returned to the Virgin Islands under long-established tax 
principles governing the relationship between the United States and the 
Virgin Islands. Many of the issues were previously raised by the GVI in 
earlier IGIA meetings. To date, there has been no significant 
reportable progress in resolving any of these long-standing critical 
issues. As previously noted, the GVI requested the Secretary of the 
Interior over three years ago to invoke the IGIA process to resolve the 
economically critical issue of the Jobs Act implementing regulations; 
the Secretary, however, was unable to persuade the Secretary of the 
Treasury to submit this issue to the IGIA process.
    While there have been some modest advances and policy ``successes'' 
as a result of the IGIA process, it appears, at least from our 
perspective, that the larger and more important the issue, the more 
``territorial'' and protective of its jurisdiction becomes the federal 
agency and the less effective becomes the IGIA. Indeed, it is our view 
that this record is reflective of the systemic or structural weaknesses 
of the IGIA itself. Pursuant to the terms of the 2003 Executive Order 
itself, the Secretary of the Interior has the power to ``chair'' a 
consultative body and to make ``recommendations'' to the President or 
to other agency heads, but lacks authority to effectively coordinate 
the policies emanating from the federal agencies themselves. It is our 
view that the IGIA process can only be effective if all agencies submit 
their policy-making, insofar as it relates to the territories, to the 
IGIA process. Unfortunately, the political realities are that that can 
be assured only if the IGIA chair is organizationally superior to the 
agency head itself. That is, in order to be effective, the IGIA must 
operate with the cloak of authority of, and be located within, the 
Office of the President.
Recommendations
    Madam Chairwoman, I believe the interagency process, first proposed 
by your distinguished predecessor in 1992, offers an enlightened and 
thoughtful blueprint for this Committee. An effective interagency 
process should reflect the following important principles;
    1.  The IGIA process should be authorized by statute and 
administered according to criteria established by Congress exercising 
its constitutional function. The process cannot be left to the 
discretion of an executive memorandum or order.
    2.  The IGIA chair must be established within the Office of the 
President, rather than at the agency level. The IGIA chair must report 
to, and operate with the color of the authority of, the President of 
the United States in order to effectively coordinate the interests of 
competing agencies. And,
    3.  The IGIA must have independent staff and sufficient resources 
to be able to effectively carry out its mission.
    Madam Chairwoman and Distinguished Members of the Committee, I look 
forward to working with you to elaborate on these thoughts and to 
strengthen the IGIA process. The welfare of all of our citizens in our 
offshore territories depends on it. Thank you very much.

                                 
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