[Senate Hearing 110-914]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-914
 
                    NOMINATIONS OF: DAVID G. NASON, 
                    MARIO MANCUSO, ROBERT M. COUCH, 
     MICHAEL W. TANKERSLEY, NGUYEN VAN HANH, AND JANIS HERSCHKOWITZ 

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

                                HEARING

                               before the

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

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

                            nominations of:

 David G. Nason, of Virginia, to be Assistant Secretary for Financial 
               Institutions of the Department of Treasury
and to be a Member of the Board of Directors for the National Consumer 
                            Cooperative Bank

                               __________

     Mario Mancuso, of New York, to be Under Secretary for Export 
              Administration of the Department of Commerce

                               __________

 Robert M. Couch, of Alabama, to be General Counsel for the Department 
                    of Housing and Urban Development

                               __________

   Michael W. Tankersley, of Texas, to be Inspector General for the 
                Export-Import Bank of the United States

                               __________

    Nguyen Van Hanh, of California, to be a Member of the Board of 
          Directors for the National Consumer Cooperative Bank

                               __________

  Janis Herschkowitz, of Pennsylvania, to be a Member of the Board of 
          Directors for the National Consumer Cooperative Bank

                               __________

                         THURSDAY, MAY 10, 2007

                               __________

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


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

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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
THOMAS R. CARPER, Delaware           CHUCK HAGEL, Nebraska
ROBERT MENENDEZ, New Jersey          JIM BUNNING, Kentucky
DANIEL K. AKAKA, Hawaii              MIKE CRAPO, Idaho
SHERROD BROWN, Ohio                  JOHN E. SUNUNU, New Hampshire
ROBERT P. CASEY, Pennsylvania        ELIZABETH DOLE, North Carolina
JON TESTER, Montana                  MEL MARTINEZ, Florida

                      Shawn Maher, Staff Director
        William D. Duhnke, Republican Staff Director and Counsel
              Jonathan Miller,  Professional Staff Member
               Joseph L. Hepp, Professional Staff Member
                Didem Nisanci, Professional Staff Member
     Mark A. Calabria, Republican Senior Professional Staff Member
                    Andrew Olmem, Republican Counsel
                    Jim Johnson, Republican Counsel
   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
                         George Whittle, Editor
















                            C O N T E N T S

                              ----------                              

                         THURSDAY, MAY 10, 2007

                                                                   Page

Opening statements, comments, or prepared statements of:
    Senator Reed.................................................     1
    Senator Casey................................................    11

                                WITNESS

Tim Holden, U.S. Representative from the State of Pennsylvania...    15

                                NOMINEES

David G. Nason, of Virginia, to be Assistant Secretary for 
  Financial Institutions of the Department of Treasury and to be 
  a Member of the Board of Directors for the National Consumer 
  Cooperative Bank...............................................     4
    Prepared statement...........................................    26
Mario Mancuso, of New York, to be Under Secretary for Export 
  Administration of the Department of Commerce...................     5
    Prepared statement...........................................    28
    Response to written questions of:
        Senator Dodd.............................................    51
Robert M. Couch, of Alabama, to be General Counsel for the 
  Department of Housing and Urban Development....................     7
    Prepared statement...........................................    32
Michael W. Tankersley, of Texas, to be Inspector General for the 
  Export-Import Bank of the United States........................     8
    Prepared statement...........................................    35
Nguyen Van Hanh, of California, to be a Member of the Board of 
  Directors for the National Consumer Cooperative Bank...........     9
    Prepared statement...........................................    37
Janis Herschkowitz, of Pennsylvania, to be a Member of the Board 
  of Directors for the National Consumer Cooperative Bank........    12
    Prepared statement...........................................    45


                            NOMINATIONS OF:

                      DAVID G. NASON, OF VIRGINIA,

         TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS,

                         DEPARTMENT OF TREASURY

              AND TO BE A MEMBER OF THE BOARD OF DIRECTORS

                THE NATIONAL CONSUMER COOPERATIVE BANK;

                      MARIO MANCUSO, OF NEW YORK,

            TO BE UNDER SECRETARY FOR EXPORT ADMINISTRATION,

                        DEPARTMENT OF COMMERCE;

                      ROBERT M. COUCH, OF ALABAMA,

                         TO BE GENERAL COUNSEL,

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;

                    MICHAEL W. TANKERSLEY, OF TEXAS,

                        TO BE INSPECTOR GENERAL,

                EXPORT-IMPORT BANK OF THE UNITED STATES;

                    NGUYEN VAN HANH, OF CALIFORNIA,

               TO BE A MEMBER OF THE BOARD OF DIRECTORS,

                THE NATIONAL CONSUMER COOPERATIVE BANK;

                  JANIS HERSCHKOWITZ, OF PENNSYLVANIA,

               TO BE A MEMBER OF THE BOARD OF DIRECTORS,

                 THE NATIONAL CONSUMER COOPERATIVE BANK

                              ----------                              


                         THURSDAY, MAY 10, 2007

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 3:05 p.m., in room SD-538, Dirksen 
Senate Office Building, Senator Jack Reed, presiding.

               OPENING STATEMENT OF SENATOR REED

    Senator Reed. This hearing will come to order. Thank you, 
ladies and gentlemen.
    Let me begin by saying that Senator Dodd very much wanted 
to not only be here but to obviously chair the hearing. He is 
unable to attend. He has asked me to conduct the hearing. This 
is an important constitutional process that we are engaged in. 
I appreciate the fact that the nominees would all come forward, 
and not only appear but respond to our questions, both 
questions here today and questions that may be submitted in 
writing.
    First let me introduce Mr. David George Nason of Rhode 
Island. Mr. Nason already has something to commend him to this 
Committee. He has been nominated to serve as Assistant 
Secretary of the Treasury for Financial Institutions and to 
serve as a Member of the Board of Directors of the National 
Consumer Cooperative Bank, as the designated Federal official 
in the Bank's charter. Mr. Nason currently serves as Acting 
Assistant Secretary of the Treasury for Financial Institutions, 
and until recently served as Deputy Assistant Secretary for 
Financial Institutions. Should he be confirmed, Mr. Nason would 
be responsible for managing a number of Treasury officials, 
including the agency's Office of Financial Institutions Policy 
and Government-Sponsored Enterprise Policy Office.
    Prior to coming to the Treasury, Mr. Nason worked at the 
Securities and Exchange Commission where he served as counsel. 
Mr. Nason also worked as an attorney at Covington & Burling in 
Washington, D.C. Mr. Nason received a Bachelor of Science in 
finance from the American University and a J.D. summa cum laude 
from the Washington College of law at the American University.
    I am particularly pleased to welcome Mr. Nason. I have had 
a chance to talk to him, and he not only ably represents the 
administration, but he able represents Rhode Island, and he 
does not forget his family and friends back there.
    Next we have Mr. Mario Mancuso of New York. Mr. Mancuso has 
been nominated to serve as Under Secretary of Commerce for 
Export Administration. If confirmed, Mr. Mancuso would serve as 
head of the Commerce Department's Bureau of Industry and 
Security, and his primary duties would focus on enforcing our 
Nation's export controls of dual-use products, items with both 
civilian and military applications, including items that 
contribute to the proliferation of nuclear, biological, and 
chemical weaponry. Additionally, he would be tasked with 
coordinating Defense Production Act policies for delivering 
emergency supplies to the Government during a national 
emergency.
    Since August 2005, Mr. Mancuso has served as Deputy 
Assistant Secretary of Defense for Special Operations in 
Combating Terrorism. From January 2005 to July 2005, Mr. 
Mancuso served as Special Counsel to the General Counsel of the 
Department of Defense where he worked on numerous matters 
involving international law, national security policy, and 
international affairs.
    The next nominee is Mr. Robert Couch of Alabama, and 
Senator Shelby particularly wanted to be here, Mr. Couch, and 
introduce you in person, and I will do my best in that regard.
    Mr. Couch has been nominated to serve as General Counsel at 
HUD. The General Counsel provides legal opinions in regard to 
all departmental activities. The Office of General Counsel is 
also responsible for enforcing fair housing laws, which is a 
critical function of the Department of Housing and Urban 
Development. Mr. Couch has an extensive legal and professional 
background. After graduating from law school at Washington and 
Lee University, Mr. Couch served as a law clerk on the United 
States Fifth Circuit; then he served as a law clerk to United 
States Supreme Court Justice Lewis Powell.
    In addition to practicing law at a number of firms, Mr. 
Couch was President of Collateral Mortgage, Limited, a firm in 
Birmingham, Alabama, and was President and CEO of New South 
Federal Savings Bank, also in Birmingham, Alabama. Currently, 
Mr. Couch is President of the Government National Mortgage 
Association.
    Mr. Michael W. Tankersley, of Texas, has been nominated to 
serve as Inspector General of the Export-Import Bank of the 
United States. Mr. Tankersley is a partner with the firm 
Bracewell & Giuliani in Texas, where he counsels corporate 
boards and committees regarding fiduciary duty, conflicts of 
interest, disclosure, and securities law compliance. Mr. 
Tankersley has served as Chairman of the Business Law Section 
of the State Bar of Texas, and he is a former adjunct professor 
at the University of Texas Law School. Additionally, Mr. 
Tankersley received a bachelor's degree and master's of 
accounting from Rice University and his law degree from the 
University of Texas, where he served as editor of the Law 
Review and chancellor.
    The Inspector General position is a newly created position 
at the Eximbank, and I would like to recognize the important 
leadership of Senator Allard in creating this position. Without 
his efforts, this nomination would not be possible today. I 
look forward to hearing from Mr. Tankersley regarding his 
thoughts on how this new office will operate.
    The next nominee is Ms. Janis Herschkowitz, and I think 
Congressman Holden is due to introduce you. As soon as he 
arrives, I will let him do that, but suffice to mention that 
Ms. Herschkowitz has been nominated to be a Member of the Board 
of Directors of the National Consumer Cooperative Bank.
    And, finally, Dr. Nguyen Van Hanh, of California, has been 
nominated to be a Member of the Board of Directors of the 
National Consumer Cooperative Bank. Dr. Van Hanh has served as 
Director of the Office of Refugee Resettlement since September 
2001. In this capacity, he is a national leader in domestic 
refugee resettlement. Dr. Van Hanh was a part-time faculty 
member of California State University in Sacramento and in 1990 
served as a representative of California Governor Deukmejian on 
community relations and managed various programs as senior 
economist on water resources for the State of California. Dr. 
Van Hanh holds a Ph.D. in economics from the University of 
California at Davis, and earlier he received a Bachelor of 
Science degree with high honors from the University of Florida 
and a Master's of Science degree in agricultural science from 
the same university. Welcome, Doctor. Thank you very much.
    At this juncture I would now ask the nominees to stand so 
that I might administer the oath, which is required in these 
proceedings. Would you please raise your right hand? Do you 
swear or affirm that the testimony you are about to give is the 
truth, the whole truth, and nothing but the truth, so help you 
God?
    Mr. Nason. I do.
    Mr. Mancuso. I do.
    Mr. Couch. I do.
    Mr. Tankersley. I do.
    Ms. Herschkowitz. I do.
    Mr. Van Hanh. I do.
    Senator Reed. Do you agree to appear and testify before any 
duly constituted committee of the Senate?
    Mr. Nason. I do.
    Mr. Mancuso. I do.
    Mr. Couch. I do.
    Mr. Tankersley. I do.
    Ms. Herschkowitz. I do.
    Mr. Van Hanh. I do.
    Senator Reed. Thank you very much. Please be seated. I am 
used to that. I have a 4-month-old child, and she is trying to 
communicate with me, I know. And Senator Dodd also is used to 
it, so feel right at home, please.
    Let me say that before we begin your statements, your 
entire written statements will be included in the record. We 
would like to confine remarks to 5 minutes because of the 
number of nominees before us today. And please also note that 
Members of the Committee could submit written questions to you 
for your consideration and prompt response. Chairman Dodd has a 
series of questions, I believe, for Mr. Mancuso which will be 
part of the record and will be forwarded to you for response, 
Mr. Mancuso, and other questions might be forthcoming from 
other members.
    Now I would like to proceed to your statements, so let me 
first recognize Mr. Nason. Thank you for joining us today, and 
if you have family or others that are accompanying you, please 
feel free to introduce my constituents.
    [Laughter.]

   STATEMENT OF DAVID GEORGE NASON, ASSISTANT SECRETARY FOR 
 FINANCIAL INSTITUTIONS-DESIGNATE, DEPARTMENT OF TREASURY, AND 
 MEMBER OF THE BOARD OF DIRECTORS-DESIGNATE, NATIONAL CONSUMER 
                        COOPERATIVE BANK

    Ms. Nason. Thank you very much. Chairman Reed, Ranking 
Member Shelby, and Members of the Committee, thank you for 
inviting me to appear before you today. I am grateful to 
President Bush and Secretary Paulson for their trust and 
confidence in me. I am honored to be here today as the 
President's nominee to be Assistant Secretary for Financial 
Institutions at the Treasury Department and to be a Member of 
the Board of Directors of the National Consumer Cooperative 
Bank, an organization established to assist underserved 
communities across the Nation.
    I would like to thank my family for their unyielding 
support of my decision to continue in public service. I would 
like to introduce my wife, Nicole, right there, my best friend, 
who is a dedicated public servant; and our daughters--Alexandra 
is 6, Abigail is 2--and is 2 in every sense of the word but 
asleep so I will keep my voice quiet. It will make this hearing 
go a lot faster. And my parents, George and Ann Nason, are also 
here today.
    Chairman Reed, you would be interested in knowing that my 
parents have been commuting from Providence to Washington, 
D.C., weekly to take care of our daughters for a period of 
years, so certainly above and beyond the call of duty for 
parents and grandparents.
    If confirmed, I look forward to working with Secretary 
Paulson, Under Secretary Steel, and the rest of the Treasury 
team, along with others in the administration and Congress, on 
a variety of important issues impacting our financial 
institutions. In my current role as Deputy Assistant Secretary, 
I have had the opportunity to engage on numerous important 
issues that affect our capital markets and financial 
institutions, including Treasury's position on banking and 
insurance regulation. I also serve as an adviser to Secretary 
Paulson in his capacity as Chair of the President's Working 
Group on Financial Markets.
    If confirmed, I will work constructively in my role as 
Assistant Secretary for Financial Institutions to ensure that 
the Department faithfully carries out its responsibilities 
related to financial institutions policy, critical 
infrastructure protection, and financial education. These 
topics are diverse, complex, and have a direct impact on the 
lives of Americans.
    The legal and regulatory structure imposed on our financial 
institutions must guard against systemic risk, must protect 
consumers, and must enhance their confidence. If confirmed, I 
will help Secretary Paulson shape and implement his agenda on 
capital markets competitiveness. I share the Secretary's view 
that robust and vibrant capital markets are directly tied to 
future economic prosperity for all Americans.
    I believe that my prior professional experience has 
prepared me for this important responsibility. Before coming to 
Treasury, I served at the Securities and Exchange Commission as 
counsel to a Commissioner. I was there at a critical moment in 
the SEC's history when the agency implemented the Sarbanes-
Oxley act of 2002, the most comprehensive piece of securities 
legislation in decades. My experience there has contributed 
significantly in preparing me for this next challenge at the 
Treasury Department.
    Prior to the SEC, I spent time in the private sector as an 
attorney at Covington & Burling where I focused on securities 
offerings, mergers and acquisitions, and Federal tax planning. 
If confirmed, I would seek to ensure a constructive dialog with 
Members of Congress and their staffs, and I appreciate the time 
that Members of the Committee have taken to consider my 
nomination, and I would be happy to answer any questions.
    Senator Reed. Thank you very much, Mr. Nason.
    Mr. Mancuso, if you have friends or family here you would 
like to introduce, please do so and the floor is yours.

    STATEMENT OF MARIO MANCUSO, UNDER SECRETARY-DESIGNATE, 
                     DEPARTMENT OF COMMERCE

    Mr. Mancuso. Thank you very much, Mr. Chairman.
    Mr. Chairman, Senator Shelby, and other distinguished 
Members of the Committee, it is a great honor to be before you 
today as the President's nominee to be Under Secretary of 
Commerce for Export Administration. I want to thank the 
President and Secretary Gutierrez for their trust and 
confidence in me and for the privilege to be considered to lead 
and serve alongside the dedicated and talented men and women of 
the Bureau of Industry and Security.
    I would also like to thank my wife, Leesa, and our 
daughter, Maia--who do not live in Rhode Island, but are open 
to the opportunity--for their love and support, and my family 
and friends who are here today, I think filling half the room: 
my Mom and Dad, Giacinto and Francesca Mancuso; my uncle, 
Anthony Modika; my in-laws, Marty and Arlene Klepper; Abby 
Golden and Bill Posner; Brother Dominic Quigley; and Tara and 
Tim Kelly. Thank you.
    Finally, I want to thank you and your respective staffs. I 
appreciate the time you have taken to meet with me and to share 
your perspectives on the issues facing the Bureau of Industry 
and Security. I look forward, if confirmed, to working closely 
with you and them in the future.
    In late summer 2001, I was in the private sector practicing 
corporate law at Ropes and Gray, much as I had done for the 
better part of the previous decade. I represented U.S. 
companies and investment banks as they made their way in the 
competitive, fast-moving, and dynamic new international 
business environment. It was the best of times. Then 9/11 
happened and everything changed.
    Soon after Johnny ``Mike'' Spann, a friend and jump school 
classmate, was identified as the first combat fatality in 
Afghanistan, I volunteered to serve a combat tour of duty in 
Afghanistan. Despite my best efforts, I did not have the 
opportunity to serve in Afghanistan. However, I would later 
have the great privilege of leading U.S. troops like Tim Kelly 
in Operation Iraqi Freedom.
    The personal details of my service are less important than 
the lesson I learned in Iraq and as a senior official at the 
Department of Defense; that is, while we are fortunate to have 
the world's most vaunted military, national security does not 
rest upon military power alone. Instead, our national security 
depends upon preserving our military capabilities and 
advantages and integrating these with all elements of national 
power, including the economic power of U.S. workers and 
companies.
    As this Committee knows well, the Bureau of Industry and 
Security advances U.S. national security, foreign policy, and 
economic objectives by ensuring an efficient and effective 
dual-use export control system and by promoting continued U.S. 
strategic leadership and technology. BIS uses two primary tools 
to do this: issuing regulations and enforcing them. These 
functions are synergistic and both are vitally important. If 
confirmed, I will work diligently to ensure that these tools 
are used fully and judiciously. If confirmed, I will also work 
with this Committee in support of the reauthorization of the 
Export Administration Act pending long-term fundamental reform 
of the dual-use export control system.
    For many years, the unrivaled position of the U.S. as the 
economic and technology leader of the world made it possible 
for the United States to generally administer export controls 
without the need to give equal weight to economic tradeoffs of 
reduced exports, particularly since our closest competitors 
were also our allies and they agreed with export controls 
designed to keep sensitive items outside of the hands of the 
Soviet Union and its satellites.
    Today, investment capital, technology, and intellectual 
talent are more widely distributed, while national perceptions 
of security risk are no longer universally shared. In light of 
these tectonic changes, the decisions BIS makes every day 
affect the bottom line of U.S. workers and U.S. companies. If 
confirmed, I will never forget that. Moreover, I will use my 
executive experience in the private and public sectors to help 
U.S. businesses sell their products internationally, create 
jobs for U.S. workers, and enhance our national security.
    Should I be confirmed, I will take a multifaceted approach 
to export controls and energetically strive to make our 
controls as targeted and as multilateral as possible, whenever 
possible. In every instance, I will seek maximum possible input 
from this Committee, interested members of the executive 
branch, and industry to ensure that our export control system 
is smart, efficient, and effective and takes into account the 
real bottom-line impacts on U.S. workers and companies.
    Mr. Chairman, thank you for this hearing and for 
considering my nomination. I would be delighted to take your 
questions.
    Senator Reed. Thank you very much, Mr. Mancuso.
    Mr. Couch, if you have anyone you would like to introduce, 
please do so, then proceed with your statement.

   STATEMENT OF ROBERT M. COUCH, GENERAL COUNSEL-DESIGNATE, 
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Couch. Chairman Reed, I want to thank you for the 
opportunity to appear before you today. I would also like to 
thank Ranking Member Shelby for the kind words he has entered 
into the record. And thank you to all of the staff who have met 
with me over the last month. Those meetings have helped me gain 
important insights into the position for which I have been 
nominated.
    I would also like to express my sincere appreciation to 
President Bush and Secretary Jackson for their confidence in 
asking me to not only be part of the administration, but to 
have the confidence in me to serve both as the President of 
Ginnie Mae and as HUD's Acting General Counsel. I am certainly 
honored to be nominated to serve as the General Counsel of HUD.
    If my appearance today seems like deja vu to you, it was a 
little more than a year ago that I came before this Committee 
as the need to serve as President of Ginnie Mae. I appreciate 
the confidence you put in me then, and I can assure you that 
over the last year, Ginnie Mae has continued to fulfill its 
mission of expanding access to affordable housing in America by 
linking the global capital markets to the Nation's housing 
markets. I am grateful for the opportunity the President, 
Secretary Jackson, and the U.S. Senate gave me when I was 
confirmed last year. I have been extremely impressed with the 
professional staff at Ginnie Mae, and I strongly believe the 
organization will continue to be successful and effective in 
meeting its goals.
    Today I am before you as the nominee for the position of 
General Counsel of HUD. Just this past weekend, I was in 
Lexington, Virginia, celebrating my 25th law school reunion at 
Washington and Lee University. Since I graduated, I have been 
proud of the opportunities I have had both as a lawyer and as a 
banker, and I believe my previous occupations have provided me 
with the skills necessary to serve as HUD's chief legal 
officer. In addition, I have served as the Acting General 
Counsel for approximately 6 months, and I have become very 
familiar with the operations of the agency and the Office of 
General Counsel.
    The Office of General Counsel is a legal organization of 
approximately 400 lawyers with offices spread throughout the 
Nation. I have already visited several of our regional offices 
and have gotten to know many of the very talented and dedicated 
attorneys in the field and at headquarters here in Washington, 
D.C. Let me just say that I have been extremely impressed.
    If confirmed, I am committed to working with our clients 
within the agency to provide the best legal counsel possible to 
further HUD's mission--that is, to increase homeownership, 
support community development, and increase access to 
affordable housing, free from discrimination.
    I would also like to thank my wife, Anne--who is here today 
in the second row--and my family for the love and support they 
have given me, especially during the move from Birmingham to 
D.C. And, Senator I am afraid I cannot take this accent to 
Rhode Island. This has been a challenging, exciting, and 
rewarding time for me, and for them as well.
    Mr. Chairman, I am very appreciative of the trust that the 
President and Secretary Jackson have placed in me by nominating 
me for the post of General Counsel. I am grateful for the 
Banking Committee's consideration today, and I would be pleased 
to answer any questions you might have.
    Senator Reed. Thank you very much, Mr. Couch.
    Mr. Tankersley, if you would make your statement and 
introduce anyone who might be accompanying you.

     STATEMENT OF MICHAEL W. TANKERSLEY, INSPECTOR GENERAL-
       DESIGNATE, EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Tankersley. I will do that. Thank you, Mr. Chairman. I 
am Mike Tankersley of Dallas. It is an honor to appear here 
today as the President's nominee to become the first Inspector 
General at the Export-Import Bank of the United States. I come 
here today having spent 25 years as a practicing lawyer working 
for clients that have included numerous small and growing 
businesses, a very important constituency of the Export-Import 
Bank, also working with public companies, banks, and insurance 
companies. Most of them have been U.S. based; some have been 
foreign.
    I have helped these clients in a variety of commercial 
transactions--lending, raising capital, addressing their legal 
compliance challenges. In recent years, I have spent a lot of 
time advising boards on governance matters, including the 
demands of the Sarbanes-Oxley act and guiding them through 
special investigations of allegations of fraud and illegality.
    Before graduating from law school, I was at the business 
school at Rice University, which, interestingly, is named for 
Jesse Jones, the second Chairman of Export-Import Bank, a 
fellow Texan who was a key adviser to President Roosevelt in 
establishing the Bank. I have had a CPA certificate for a 
number of years, and while I do not hold myself out as being an 
expert in accounting, I believe that background will be 
helpful, and, if confirmed, it will prove valuable in serving 
the Bank as well.
    My investigation of the Export-Import Bank since my 
nomination has confirmed that it is well regarded here and 
abroad and that its leadership and staff are highly expert and 
motivated in carrying out the Bank's mission and the policy 
directives of the Congress as reflected in its statute. The 
Bank's reauthorization last fall in the final days of that 
Congress is, I think, a testament to the regard and bipartisan 
support the Bank enjoys with this Committee and the Congress as 
a whole.
    My conversations with Chairman Lambright and General 
Counsel Schweitzer have confirmed that they are supportive of 
the job I am going to be doing, if confirmed, and that they are 
looking forward to working together to advance the quality and 
the responsiveness of the Bank's compliance and other functions 
that I will be responsible.
    The chance to serve as the first Inspector General at the 
Bank represents a unique chance to bring together all of my 
varied experiences and training to create a new and very 
important function. I am committed to and comfortable 
maintaining the degree of independence that that position 
requires and that Senator Allard and Senator Martinez and 
others have encouraged me to maintain. At the same time I hope, 
if confirmed, to be the sort of approachable Inspector General 
that I have been counseled is often the most effective.
    I believe my background is a good fit with the varied 
responsibilities of the position as an independent voice in the 
agency with responsibility for audits, investigations, and 
charged with preventing fraud, waste, abuse, and promoting 
economy and effectiveness and efficiency. If confirmed, I will 
particularly look forward to working with this Committee as an 
independent point of communication and with other interested 
Members of Congress.
    I am grateful that the President has offered me this 
opportunity to serve our Nation. I considered public service 
when I was getting out of law school in 1980, and I have 
harbored lingering regret that I did not do it at that time. My 
family, friends, and loved ones have been very supportive of my 
decision to seek out this opportunity, and if confirmed, I 
expect that will continue. In that regard, I would like to 
introduce to the group my very good friend, Karen Cornell, who 
is here with me today. The rest of my family were otherwise 
committed.
    I appreciate you considering my nomination today, and if 
you have any questions for me now or in the future, I would 
look forward to answering them. Thank you.
    Senator Reed. Thank you very much, Mr. Tankersley.
    Dr. Van Hanh, if there is anyone you would like to 
introduce, please do so and then proceed to your statement.

STATEMENT OF NGUYEN VAN HANH, MEMBER OF THE BOARD OF DIRECTORS-
         DESIGNATE, NATIONAL CONSUMER COOPERATIVE BANK

    Mr. Van Hanh. Thank you, Mr. Chairman.
    Mr. Chairman, I am honored to appear here today as the 
nominee to become a Member of the Board of Directors of the 
National Consumer Cooperative Bank. I would like to thank 
President Bush for this very special nomination.
    To my parents and my family goes my deep appreciation for 
their love and support, for my education and involvement with 
the community for many decades. Mr. Chairman, I am here because 
I believe my combined experience as an economic development 
professional and a community leader is consistent with the 
mission of the National Consumer Cooperative Bank, also known 
as NCB.
    NCB was established to serve the needs of the underserved 
communities across the Nation, primarily through user-owned 
cooperatives. From its founding and continuing through today, 
an important element of its mission has been assisting low-
income persons and communities.
    I was born in Vietnam, and I was naturalized as a U.S. 
citizen. My professional experience includes many years working 
with refugee and low-income populations. Currently, I am 
teaching economics at the California State University in 
Sacramento and working on international programs in financial 
education as an affiliate professor at George Mason University. 
I received my Ph.D. degree in economics from the University of 
California, Davis.
    In the late 1970's, when thousands of refugees from 
Southeast Asia arrived in the U.S., I helped found the Bach 
Viet Association in collaboration with a group of local 
community leaders to provide socioeconomic assistance to 
Southeast Asian and Russian refugees. My work continued in the 
subsequent years at the national level. The refugees, 
immigrants, and minorities share the same common barriers in 
gaining access to investment capital as they were often 
perceived collectively as high-risk borrowers without track 
records or collateral.
    Most recently, from 2001 through early 2006, as Director of 
the Office of Refugee Resettlement, I had the unique 
opportunity to expand existing programs and to initiate new 
ones to address the financial needs of the growing community. 
For example, funds were allocated to the microenterprise and 
the individual development account, or IDA, programs, as well 
as the newly established Refugee Rural Initiative.
    I was very encouraged to learn that NCB has successfully 
provided effective banking and financial services to many 
communities across the Nation, the type of financial resources 
necessary to address the needs of the minorities I was working 
with. NCB has directly provided over $3 billion in specialized 
lending, investment, and technical assistance to underserved 
communities across the country, especially benefiting those in 
need of help in health care, education, affordable housing, and 
small business development. These needs are similar to those 
experienced by the growing population of new Americans.
    Problems created by poverty in America are being addressed 
by innovative community lending and expert technical assistance 
which has been built into NCB's nonprofit affiliate NCB Capital 
Impact. NCB Capital Impact is designed to empower the 
underserved communities through self-help, democratic control, 
and community participation. In the past 3 years alone, NCB 
Capital Impact has financed over 4,700 units of affordable 
housing, 14,800 school seats, 8,700 affordable assisted living 
units for seniors and persons with disabilities.
    Being trained as an economist with extensive experience 
working with the low-income communities, I believe I am 
qualified to serve on the Board of Directors of NCB. If 
confirmed, I intend to promote the best practices of NCB in 
developing access to investment capital and financial services 
to the low-income, to expand the partnership between the 
cooperative banking sector and the communities across the 
Nation, and to make a substantive contribution to the Board of 
Directors of NCB.
    Your consideration is very much appreciated, and thank you 
for the honor to be here. Please allow me to respond to any 
questions you may have at this time. Thank you.
    Senator Reed. Thank you very much, Dr. Van Hanh.
    We have been joined by my colleague, Senator Bob Casey of 
Pennsylvania, and although we expect Representative Holden to 
come and make some comments, Ms. Herschkowitz, there is an 
opportunity for Senator Casey to make his comments and also 
introduce you, and then you can present your friends and family 
and your statement.
    Ms. Herschkowitz. Thank you.
    Senator Reed. Senator Casey.

              STATEMENT OF SENATOR ROBERT P. CASEY

    Senator Casey. Mr. Chairman, thank you very much.
    I want to thank Senator Reed for bringing us together today 
and thank all those who are in attendance for the time you are 
taking and the service that you are providing to the country. I 
have a particular honor today to introduce someone from my home 
State, Janis Herschkowitz from Lebanon County, Pennsylvania, 
which is a place that actually I know where it is and I have 
been there.
    Ms. Herschkowitz. Very good.
    Senator Casey. We will not get into campaigns and 
elections, but I have been to that county, and it is a great 
community. But I did want to say a few words about Janis and 
also about the importance of this hearing.
    First of all, Janis is President and CEO of PRL, 
Incorporated, which consists of four manufacturing companies, 
including a foundry and a machine shop, and she also serves on 
the Pennsylvania Chamber of Business and Industry, on the board 
of that organization. She has been a strong advocate for small 
business for a number of years. She has also helped to remove 
obstacles from the path of Pennsylvanians, especially small 
business owners when they try to redevelop brownfields. She has 
been named one of the top 50 Best Pennsylvania Women in 
Business by the Pennsylvania Department of Economic 
Development, and she has been nominated to the Board of the 
National Cooperative Bank, and we are honored that a 
Pennsylvanian has been so nominated. And I happy to be here 
today to support her nomination. Maybe I can ask you just in 
the short period I have right now if you would introduce your 
family or just tell us if they are here and if you could 
identify them.
    Ms. Herschkowitz. I would love to introduce my family, and 
also thank you very much for those kinds words.
    I would like to introduce my mother, Barbara Herschkowitz; 
my sister, Pat Herschkowitz; and my boyfriend, Lieutenant 
Colonel Wallace Vitez who managed to get out of Fort Dix to be 
here today.
    Senator Casey. Wow. Thank you very much. We are honored 
that your family is here.
    Ms. Herschkowitz. I would also like to thank them for their 
ongoing support.
    Senator Casey. Well, thank you. We especially appreciate 
when a member of the armed services is here. We are honored.
    This gentleman on my left, Senator Reed, has a proud 
service record, and we are honored to be in his presence all 
the time, but especially when he is educating fellow members of 
the caucus about defense issues and national security issues. 
And I am also indebted to him today in a very special personal 
way because, as you noticed, when I came in this room, I went 
all the way down to my seat, and Senator Reed was so kind to a 
first-year Senator. He instructed the staff to bring me closer 
to the Chair. I am only inches away from the gavel.
    [Laughter.]
    But I do not want to get my hopes up.
    I am grateful for Senator Reed's leadership on this 
Committee and in so many other capacities, and I will wait 
until a little later to get some questions in. Thank you very 
much.
    Senator Reed. Thank you, Senator Casey, for those very kind 
words and for your introduction of Ms. Herschkowitz.
    Ms. Herschkowitz, if you would like to make your statement 
now, please.

    STATEMENT OF JANIS HERSCHKOWITZ, MEMBER OF THE BOARD OF 
    DIRECTORS-DESIGNATE, NATIONAL CONSUMER COOPERATIVE BANK

    Ms. Herschkowitz. Yes. Mr. Chairman and Senator Casey, I am 
honored to appear before you today on my nomination as the 
Small Business Representative to the Board of Directors of the 
National Consumer Cooperative Bank. I am President and CEO of 
PRL, Inc. I became President of PRL, Inc., in 1989 upon the 
death of my father. Prior to joining the company, I was 
financial manager of a $186 million division of Zenith 
Financial Corporation.
    Despite PRL's small size and the fact that we only have 122 
employees, PRL is a proud supplier of high-specification 
castings. As an example, we manufacture pumps and valve bodies 
which are currently used in nuclear submarines and power plants 
around the world. We have a highly skilled labor force, feel we 
have the most vertically integrated foundry in the country, and 
play a critical role in our Nation's defense.
    Our team's dedication to quality is reflected in our 
customer base, which includes such important military suppliers 
as Electric Boat, Northrop Grumman, and Curtiss-Wright. Under 
my leadership, PRL has overcome many challenges, including 
opening a foundry, being highly leveraged while losing the 
majority of our customer base due to defense cuts, and 
surviving the onslaught of foreign outsourcing. I know the 
stress of trying to cover cash-flow while still meeting payroll 
obligations. I also know what it takes to borrow money as, at 
the age of 29, I was able to obtain a bank loan to open a 
foundry.
    One of our proudest accomplishments is that as a small 
manufacturer, PRL has managed to thrive in an environment where 
the vast majority of our competitors have been forced to close 
their doors. I feel this business experience, coupled with my 
strong financial and board background, makes me an ideal 
candidate as the Small Business Representative for the Board of 
Directors for NCB.
    I have an MBA in finance from the University of Texas and 
was fortunate enough to serve as Chairman of the Business 
Advisory Council for the Federal Reserve Board of Philadelphia. 
I have also served on numerous other State and local boards in 
leadership positions, including community service organizations 
as well as chambers. In addition, I have a very diverse 
background. I have a Bachelor of Arts in international 
relations from Penn State University, grew up in Bolivia, speak 
Spanish, and started my career working at Maquiladoras and 
Matamoros in Juarez, Mexico, as a financial analyst for Zenith 
Corporation. This provides me with a unique perspective which 
helps me to better understand other cultures and enhances my 
decisionmaking abilities.
    However, what truly makes me particularly qualified to be a 
Member of the Board of Directors is my newly found passion for 
NCB and what they are able to do. Having undergone an extensive 
briefing process, I now understand NCB represents what a 
lending institution can accomplish when it enables people to 
help themselves and as a role model of public and private 
sector cooperation.
    In the small business market, NCB leverages relationships 
it builds with cooperatives to provide the best possible 
products to its consumers. NCB is also an SBA National 
Preferred Lender and has provided almost $30 million in loans 
to small businesses. In addition, the Bank is also preferred 
lender to Ace Hardware, which is one of the largest 
cooperatives in the country.
    The bottom line is NCB understands--and it is an issue I am 
very passionate about--that small business is the engine that 
runs today's economy and that NCB provides a mechanism for 
small business to not only survive but also prosper. Given my 
business and life experiences, I feel I can play a significant 
role in further realizing the Bank's mission.
    In closing, I would be proud to serve as a Board Member to 
the National Consumer Cooperative Bank, appreciate your 
consideration, and would welcome the opportunity to answer any 
questions.
    Senator Reed. Thank you very much, Ms. Herschkowitz. Thank 
you all for your very excellent testimony.
    We will begin a round of 7 minutes of questioning. As I 
indicated previously, Chairman Dodd has submitted questions in 
writing, and those questions and your responses will be made 
part of the record, as well as any additional questions 
submitted by my colleagues.
    Let me start with Mr. Nason, and thank you again for your 
service as you go forward. One of the issues that this 
Committee and the Nation are struggling with is the 
competitiveness in a global economy of our financial markets, 
and in your position, you are going to have a critical role in 
that review. I wonder if you might comment on any of the 
proposed reforms that Treasury is contemplating in terms of 
this competitiveness between, for want of better terms, Wall 
Street and many other financial markets?
    Mr. Nason. Thank you for that question, Senator. That is 
something that I will be focused on very closely with Secretary 
Paulson on this. As you know, we recently had a large 
conference where a series of ideas were provided to dealing 
with this, and there are three baskets of issue that the 
Secretary has identified that he would like me to focus on, if 
confirmed.
    The first is our regulatory structure in the United States 
as to whether or not our regulatory structure for financial 
institutions and capital markets is optimal for changing and 
more dynamic capital markets.
    The second basket of issues that he would like me to focus 
on specifically is the challenges facing the auditing 
profession. The auditing profession has developed and has 
changed dramatically in the last few years. There is a greater 
amount of concentration among the accounting firms, and it is 
an issue, and the accounting profession is critically important 
to our capital markets, and they deserve more attention and 
more analysis from the Treasury Department.
    And the third issue that we will be focusing on is the 
corporate governance issue and legal reform issues within the 
FIRN because there are a lot of changing dynamics going on 
right there, so we will be studying that as well.
    Senator Reed. Thank you very much. Let me follow up with 
another question. One of the burning issues at the moment are 
hedge funds, their operations, their activities. There is 
concern lately about the leverage that hedge funds are 
deploying in the marketplace. And I know the President's 
Working Group has looked at this very closely. Can you talk to 
us about what further steps they might be taking, what further 
advice they might have for the Congress?
    Mr. Nason. Certainly. I am glad you raise the issue.
    As you refer to, the President's Working Group on Capital 
Markets recently released a Statement of Principles and 
Guidelines regarding private pools of capital and hedge funds, 
and these were an opportunity for the members of the 
President's Working Group, which is the Treasury Secretary and 
the other financial regulators, to speak with one voice about 
what needs to occur to reflect a changing marketplace that 
hedge funds are participating in. These principles and 
guidelines are not a reflection or an endorsement of the status 
quo. They are a reflection of all the regulators suggesting 
that each of them needs to do more and heightened vigilance 
within the current regulatory structure.
    So what the Secretary has asked me to do and other members 
of the domestic finance team is to reach out to the regulators, 
reach out to the community and the constituents that are 
involved in the private pools of capital space, the managers, 
the people that lend private pools of capital money, and the 
regulators to ensure that people are taking these guidelines 
seriously, that people are following up on them, and if there 
is more that we need to do on the Government side, that we 
should do it.
    Senator Reed. Thank you very much, Mr. Nason.
    Let me suspend my questions right now and recognize 
Representative Tim Holden of Pennsylvania. I had the privilege 
of serving with Tim in the House of Representatives. He is a 
remarkable Representative not only for Pennsylvania but for the 
Nation, and we are respectful of the busy schedule of House 
Members, Tim, so please take your opportunity to make your 
comments about Ms. Herschkowitz.

STATEMENT OF TIM HOLDEN, U.S. REPRESENTATIVE FROM THE STATE OF 
                          PENNSYLVANIA

    Representative Holden. Thank you, Mr. Chairman, Senator 
Casey. I apologize for being a little bit late, but, Mr. 
Chairman, you remember in the House days that the schedule 
cannot really be predicted.
    But I just wanted to take a moment really to recommend my 
constituent, Jan Herschkowitz, who has been nominated to serve 
on the Board of Directors for the National Consumer Cooperative 
Bank. I have had the privilege of knowing Jan over the last 5 
years when redistricting occurred in Pennsylvania and Lebanon 
County became part of the 17th Congressional District, which I 
represent.
    She is a remarkable woman, a tremendous business person, 
served as CEO for her company, since the passing of her father, 
for 19 years. It is a company, PRL Industries, which is a very 
successful company, does a lot of defense work, does a lot of 
submarine work, Mr. Chairman, which I know is near and dear to 
Rhode Island. And Jan is also very, very active in our 
community. She is a Past Chairman of the Lebanon Valley Chamber 
of Commerce, appointee of the White House Conference on Small 
Business, recipient of the Pennsylvania Top 50 Best 
Businesswomen Business Award, and Chairman of the Reserve Bank 
of Philadelphia.
    Mr. Chairman, I have to admit I did not know a heck of a 
lot about the National Consumer Cooperative Bank until Jan was 
nominated for this position, but I have had a chance to review 
what their mission is and what their goals are, and I would 
just take this opportunity to highly recommend Jan. I think she 
would be a successful and very, very positive Board Member.
    So thank you, Mr. Chairman, and thank you, Senator Casey.
    Senator Reed. Thank you.
    Senator Casey, do you have a comment?
    Senator Casey. Well, I just want to reiterate what I had 
said earlier, first of all, to commend the work of Congressman 
Tim Holden. I have known him a long time as well, and, by the 
way, I should say he does better in Lebanon County than I do.
    [Laughter.]
    But I am grateful for his presence here and his knowledge 
of your work, and it is critically important that we have 
Members of the House of Representatives and the Senate who 
understand all of our constituents, those we have known a long 
time and those we are just getting to know. So we are honored 
to second what Congressman Tim Holden just said.
    Senator Reed. Thank you very much, and I know how hectic it 
is in the house, and thank you so much for coming by, 
Congressman.
    Representative Holden. Thank you, Mr. Chairman, Senator 
Casey.
    Senator Reed. Let me resume my questioning.
    Mr. Mancuso, in your role you have significant 
responsibilities about the export control system, and there is 
an inherent tension between trade and security. I would be 
curious about your reflections about those close calls between 
security and trade. Are we in balance? Are we not doing enough 
to protect security in order to encourage trade? Or are we 
restricting trade unnecessarily? Do you have some initial 
thoughts at least?
    Mr. Mancuso. Yes, I do, Mr. Chairman. What I would like to 
say is that, to some extent--I would not say that those values 
are contradictory. I think sometimes they are divergent and 
they just have to be balanced very, very carefully, which is 
why the efficient administration of the export control regime 
is so important, which is why it is important to reach out to 
industry, to reach out to the interagency to make them as 
multilateral as possible.
    What I would say is that this position is a national 
security position, but as I mentioned in my opening comments, 
it really depends on your definition of ``national security.'' 
We do not have the luxury of defining it narrowly. Economic 
power is critically important. The contributions of industry 
are critically important.
    What I would say, sir, is that in the challenges as I 
understand the challenges that BIS is facing right now, it is 
this careful balance. How do you participate in a globalizing 
and very complex economy while at the same time minimizing the 
risks that come with that? The balance is difficult to strike, 
but what I would say, sir, is this: The Under Secretary for BIS 
must be mindful of national security; however, at all times the 
export control regime has to balance these sometimes divergent 
interests, has to balance them carefully, with full 
consultation with the private sector, with members of the 
interagency, obviously with this Committee, so that it fulfills 
its mandate.
    Senator Reed. Thank you. Recently, Secretary Gutierrez 
submitted a proposal for reauthorizing the Export 
Administration Act, and I presume you have had a chance at 
least to take a look at that. Your role, if you are confirmed, 
would be to help move that legislation through the Congress, 
and in that regard, are there any specific issues there that 
you think are most critical to focus on?
    Mr. Mancuso. Mr. Chairman, well, I would start by saying it 
is critically important to have it reauthorized, for a variety 
of, frankly, independently sufficient reasons.
    One is that what the Act would do, as I understand it, is 
expand the authorities under which BIS' enforcement agents 
would operate, which are key to its mission.
    Second, it would heighten penalties, so create a better 
incentive structure for BIS to carry out its enforcement 
function. But I think I would like to take a step back and talk 
about the BIS mission holistically.
    BIS, as I mentioned in my statement, has a policy function; 
it issues regulations. And it also has this enforcement 
function. Both of those two are synergistic, which is why it is 
critically important to pass this legislation. And if I would 
be confirmed, I would look forward to working with this 
Committee and working with Congress to try to get it passed.
    Senator Reed. Thank you, Mr. Mancuso.
    I have questions for all the panel, but let me at this 
moment recognize Senator Casey for his round of questioning, 
and then we will have a second round, at least.
    Thank you, Senator.
    Senator Casey. Thank you, Mr. Chairman.
    Janis, I think I will start with you and leave it open to 
others as well. But one of the things that we are struggling 
with in the Senate today--and it has been a challenge for many 
years now, but especially in the last couple of years--and I 
have only been here a couple of months, but I heard about this 
everywhere across our State. It is the issue of health care. I 
think most people, even though who believe we could have, that 
we should have health care for all Americans, the 47 million--
and that number keeps going up--who do not have health 
insurance, that that is not going to happen anytime soon, but 
we should take substantial steps in that direction.
    One of the ways we are going to do that this year, that we 
must do--we cannot fail in this, and I think the administration 
is--to say they are shortsighted on this is an understatement. 
I have to say that in all candor. But it is the State 
Children's Health Insurance Program, to make sure that gets 
reauthorized so we can have it in place for the millions of 
children across the country who benefit from that.
    After that, after children's health insurance, there is 
very little consensus on what we should do next in terms of 
taking a positive step or a substantial step in the right 
direction.
    I want to ask you, as someone who has not only run a 
business under difficult circumstances, but also someone who 
has been part of groups that deal with all kinds of business 
issues across the State and across central Pennsylvania: What 
do you think this Senate, this Congress could do to help in 
terms of taking a positive step on creating opportunities for 
small businesses to have the benefit of expanded health care or 
other steps that would help you insure more of your employees 
or to give other businesses the opportunity to do that?
    Ms. Herschkowitz. Well, it is obviously a very sticky 
issue, and we have put up, particularly with our workforce, 
because they tend to be older and primarily men, because it is 
the foundry industry, and they tend to be in the worst 
demographics because they really do not take care of their 
health when they are younger and tend to go to the doctor at 
the last moment, so it becomes very costly at later ages.
    I think small business can play a role in this. I strongly 
believe that small business and sole proprietors should be 
allowed to deduct their health insurance. I think that would 
help. I am a huge mandate for health competition. I also 
believe in health savings accounts, and very similar to 
cooperatives such as the National Consumer Cooperative Bank, 
where small businesses can pull together to gather their 
resources together in order to have more purchasing power. But 
it is probably one of the top three issues that we are 
confronted with.
    I also think if you want to take a look at Governor 
Rendell's plan, he has an awful lot of good advice on the cost 
side in terms of cutting health care costs so it can be more 
competitive. And then once we determine the cost savings that 
can be realized, we can get a budget to decide if the other 
part of it becomes applicable.
    Senator Casey. Can you tell us, just in the last--I am 
trying to give some good boundaries here. Just within the last 
year, if you compare, let's say, the calendar years 2005 to 
2006--we are in the middle of 2007, but 2005 to 2006, a 1-year 
increase in health care costs in terms of your business, and 
then maybe look back 5 years. Can you give us a ball park 
number in terms of how that has gone up or whether it has gone 
up substantially?
    Ms. Herschkowitz. It has gone up significantly. I tend to 
not have a broker and I negotiate it myself, and I have found 
that if you take it to the end, you can get a further 
reduction. But I do know 1 year the initial increase was 32 
percent, and we managed to get it down to 8 percent. This past 
year, we had a better experience. Because we are experience-
rated with 122 employees, we were able to--I think last year's 
increase was around 5 percent. And it is sort of ironic in our 
business where you are not allowed to increase costs when you 
are happy when you have a 5-percent increase. But it is truly a 
problem that we grapple with every day, and it has become a 
higher percentage of our benefit costs.
    Senator Casey. Well, you have figured out something that 
Washington has not figured out by keeping those costs down, so 
we may have to have you back.
    But I also want to direct at least one question, or two, to 
other members of this panel, and in particular, I know that 
this issue of health care is pervasive. It is in every agency 
and every business. And I am just wondering if anyone else has 
a point of view in terms of what you think this Congress must 
do on this issue. Anyone who wants to chime in? No volunteers?
     [Laughter.]
    Well, we got a consensus on that.
    The other question that I wanted to ask was--and if you 
have comments that you want to submit in writing, that is fine. 
We will try to keep them, not make them as public. But in terms 
of HUD, the Community Development Block Grants, that has been 
slated to be cut back. That program has been slated to be cut 
back. I think it is a big mistake. It has a particularly 
adverse impact on Pennsylvania in a lot of our communities, and 
not just some cities. A lot of town will benefit from that. So 
I would ask you if you could comment on where we are with that 
proposal and what your perspective is from the administration's 
point of view.
    Mr. Couch. Yes, Senator, I would be glad to comment on it, 
but it is really nothing that is within my purview. It falls 
with the Community Planning and Development Office within HUD, 
and I can certainly get to you a response in writing about 
that.

        The Administration's FY 2008 budget request for the CDBG 
        program represents the fact that difficult choices must be made 
        with respect to discretionary domestic spending. Nonetheless, 
        the Administration is seeking slightly more than $3 billion for 
        CDBG in FY 2008, similar to the prior fiscal year.

        The Administration's FY 2008 budget also proposes several 
        significant reforms to the CDBG program. Enactment of the 
        Administration's CDBG reform proposal would replace the 
        existing dual formula approach with a single formula, which 
        better reflects existing community development needs. While 
        some Pennsylvania CDBG grantees would experience a funding 
        reduction, other grantees such as Allentown, Lancaster, 
        Philadelphia and Reading would see funding increases under the 
        revised formula when appropriation levels are held constant. 
        CDBG grantees would also be eligible to seek additional funding 
        through the proposed CDBG Challenge Fund, which would serve as 
        an incentive to grantees to target development resources to the 
        neediest neighborhoods in their communities.

    I did sit in on the budget hearings last week before the 
Appropriations Committee and heard the Secretary remark on the 
difficult situation that we have. You know, it is a tight 
budget and difficult decisions have to be made.
    I know that I also overheard the discussion about trying to 
make the CDBG process more equitable so that formulas that may 
have gotten somewhat outdated can be revisited. But I really 
would defer to the Assistant Secretary for CPD on that 
question.
    Senator Casey. I would ask if you would make sure you 
submit an answer to that question.
    Mr. Couch. I will make sure she does.
    Senator Casey. And, Mr. Mancuso, I wanted to ask you a 
question about trade. We have seen our trade deficit spiral out 
of control, especially in the last couple of years, and we are 
forever told that trade agreements that this country has 
already entered into and those that we are planning to debate 
in the years ahead will solve some of our major trade problems 
and the tremendous deficit that we have right now.
    Upon confirmation, you will be playing a role in this, and 
I want to get your sense of where we are in terms of a strategy 
from this administration to lower that trade deficit.
    Mr. Mancuso. Thank you, sir. Thank you, Senator.
    You know, I was struck by the testimony that was given by 
Ms. Herschkowitz on the plight of PRL Industries and how it 
struggles, in her case, with health care, and I am sure with 
other issues. But it is precisely those kinds of companies, 
those kinds of stories, that kind of input that is critical, I 
think, to a Government official, in my instance, should I be 
confirmed as an Under Secretary, in thinking about the export 
control regime specifically, but also in thinking about trade.
    As I understand it from my briefings at Commerce, Commerce 
has taken the position, which is the administration position, 
that as these trade agreements are negotiated--which, of 
course, are larger than BIS' purview--dual-use export control 
regimes--that the elements of export control, having effective 
export controls have been integrated into those trade 
administrations.
    That is the extent to which Commerce would be involved from 
a trade perspective, but I would just underscore what I think 
is the nub of your question, that the impacts on American 
workers and jobs and companies are critically important, and 
should I be confirmed, to the extent that the dual-use export 
control system implicates those interests, which it does a 
tremendous amount, I as Under Secretary working with the men 
and women of BIS, working with our interagency colleagues, 
working with industries, companies like Ms. Herschkowitz's 
company, will take that into account as best we can, balancing 
the equities.
    Senator Casey. Thank you.
    Mr. Mancuso. Thank you.
    Senator Casey. Thank you, Mr. Chairman.
    Senator Reed. Thank you very much, Senator Casey.
    Mr. Couch, this is another question which is not under your 
purview as nominee for legal counsel, but you might indicate to 
Secretary Jackson that I for one--and I think I am not alone--
am concerned about the fact that in the Section 8 housing 
program, it is my understanding that HUD has not yet told State 
housing agencies and local housing agencies what level of 
funding they are getting for fiscal year 2007 and we are 
halfway through. I know there are some technical issues here, 
but the faster they can notify people about what they can 
expect, the better off we will be. And we will communicate in 
writing to the Secretary, but you might see him sooner than he 
gets the note, and let him know that is coming.
    On an issue that is within your responsibilities 
prospectively as the legal counsel, on April 30th HUD issued a 
notice that it will no longer provide vouchers to replace each 
unit of public housing that is being demolished or sold. This 
is a tremendous potential loss of support for people who 
desperately need it. They lose their public housing, there is 
no voucher, they are sometimes literally out in the cold.
    It is interesting that this proposal was made but rejected 
by Congress just 2 months previously. It was not incorporated 
in the continuing resolution for fiscal year 2007. So that 
raises a legal issue. To what extent do you think it is wise to 
essentially by policy announce a decision that was proposed for 
a legislative change that was rejected, if you can follow that 
tortured logic, Mr. Couch.
    Mr. Couch. Senator Reed, in all honesty this is the first 
time that this has come to my attention from a legal 
standpoint. The Office of General Counsel, I do not believe, 
was asked nor offered an opinion. But I can certainly go back 
and look at it and submit to you in writing a policy stand.
    Senator Reed. I understand that, you know, as someone 
awaiting appointment to the job, all these details might not be 
immediately available. But as you go forward, this is a 
situation that happens all too often, where legislative 
proposals are made, effectively rejected, and suddenly there is 
an administrative policy. I would hope you would be very 
sensitive to the effect that has and also whether or not it 
would be your advice to do that.
    Mr. Couch. Yes, sir, I will be very sensitive to that.
    Senator Reed. Well, excuse me. You are currently acting, so 
that you were not consulted?
    Mr. Couch. No, sir, I was not.
    Senator Reed. That might be another thing you could bring 
up with the Secretary. Why weren't you consulted? I would think 
that would call for a legal, if not opinion, at least some 
informal advice about the proprietary of doing that.
    Mr. Couch. Normally, yes, Senator, I think you would be 
correct. In this case, I do not know what the timing was of 
that particular issue. It may have preceded my involvement with 
the Office of General Counsel.
    Senator Reed. And let me raise another issue that is 
somewhat analogous, and that is, in the 2006 Appropriations 
Act, Congress directed HUD to extend moving-to-work contracts 
that were expiring that year for a period of 3 additional 
years. Now we understand that HUD may soon be offering all MTW 
agencies 10-year contract extensions. And, again, taking those 
actions seems to be contradictory to what legislatively we were 
proposing. And this is an area that we very well might be 
examining in the next several months in Congress.
    It raises the question of what is the legal basis for the 
10-year contract extension. Do you have an ability to comment 
on that?
    Mr. Couch. No, sir. This is, once again, an issue that I am 
unaware of. To the best of my knowledge, under the legislation 
there would not be a restriction in extending the contract for 
a longer period of time, but I would have to go back and do the 
research.
    Senator Reed. Well, thank you, Mr. Couch. I have had the 
opportunity to work with you and you bring a superb background 
to a very challenging job. I look forward to going forward to 
working with you. But, again, there is a certain sensitivity to 
administrative actions that appear, at least on the surface, to 
contradict the specific intent of the Congress, and we should 
be sensitive to that.
    Mr. Couch. I pledge to you, Chairman Reed, to be sensitive 
to that issue.
    Senator Reed. Thank you, Mr. Couch.
    Mr. Tankersley, again, you are the first Inspector General 
of the Export-Import Bank, if you are confirmed, and I am just 
curious. How do you see this new role? You have really the 
ability to kind of write the script, if you will.
    Mr. Tankersley. It is a unique opportunity to do that. I 
have taken the opportunity to, you know, read the Inspector 
Generals Act, and there is a wealth of material available among 
the Inspector General community. I had a chance to speak to at 
least one of them about their views of how to startup an 
office. The Inspector Generals have only been in business 
since, I believe, 1978, so it is still within living memory of 
most agencies, the work they had to do to get one in place.
    The Export-Import Bank is a little bit unusual when you 
look at the range of Inspector Generals. It is much closer to a 
private sector financial institution than an agency that makes 
regulations or distributes grants, and because it is in the 
business of, you know, putting money out and bringing it back 
and assisting business, my preliminary thoughts are that 
something closer to what you would find in a well-run 
compliance function of an international financial institution 
is what will be called for. And I am expecting, if confirmed, 
to approach it in that way, which would be to analyze where the 
risks are in the agency, both financial fraud risks as well as 
policy compliance risks, and address those constructively as 
they appear, including with input from this Committee in the 
areas of policy implementation, particularly that the members 
and the staff are concerned about.
    I have not wanted to get ahead of myself, anticipating this 
hearing and the confirmation process to come, but assuming 
things go well, you can expect I am going to be spending quite 
a lot of time working up the learning curve and developing that 
function.
    Perhaps the one piece of advice I got that was the most 
interesting from a fellow who is serving as a compliance 
officer for an international financial institution, he said, 
``Well, how many people work at the agency?'' And I said, 
``About 400.'' He said, ``Well, that is a good number to have 
in your compliance group.'' He emphasized that it really is the 
responsibility of everybody at the agency to carry forward the 
objectives of the Office of IG, and I think I am looking 
forward to my role of helping them do things that they are 
already doing.
    Senator Reed. One of the things that strikes me about 
Inspector Generals--and this comes more from my experience in 
the military--is that the executive you work with is not your 
client. In fact, sometimes you have to tell him or her some 
very difficult facts and truths. The real client is the public, 
and to maintain not only organizationally but also kind of 
intellectually that separation is challenging. I am sure you 
have thought about that.
    Mr. Tankersley. It is something I have thought about. My 
father was an auditor his entire career, very highly regarded 
among his clients. I think my partners would tell you that I am 
perhaps more independently minded than I need to be sometimes. 
And so I think I am prepared to engage in the intellectual and 
the emotional aspects of balancing that independence, and 
delivering difficult news at times if that is what needs to 
happen.
    I will say my impression from speaking with Chairman 
Lambright and with General Counsel Schweitzer is that they are 
very mature, confident people, and their attitude expressed to 
me is that if there is a problem, we want to be the first to 
know about it and we want to be the first on the job to fix it. 
And I think with that attitude, the job of the Inspector 
General should be not overly difficult to implement.
    Senator Reed. Thank you very much, Mr. Tankersley.
    Senator Casey, if you have questions.
    Senator Casey. Yes, thank you, Mr. Chairman.
    I wanted to follow up on that, Mr. Tankersley, the question 
of the role you play and the independence that you must 
exercise. I was happy to hear what you just said. I had a 
position, an elected position, in State government in 
Harrisburg, Pennsylvania, by the name of Auditor General. In 
some States it is called State Auditor. But that is a position 
where you have to maintain independence, and I was struck by--
and I was not here for the testimony you provided initially, 
but I was reading your statement where it says in part, on page 
2, ``Preventing fraud, waste, and abuse and promoting economy, 
effectiveness, and efficiency.'' It is music to the ears of any 
auditor, but also to, I think, the public. And it is a 
significant responsibility that you will take on upon 
confirmation, and I know you will discharge that with the 
integrity you have brought to your other work. But it is very 
important because the one thing that crumbles very quickly in a 
public agency or in an administration or any public office or 
agency, if trust takes a hit, almost like a piece of China 
dropping on the ground, you cannot recover. And I think you 
have a significant responsibility that you are taking on, and I 
appreciate you doing that. It is critically important.
    I know we are limited on time, but I did want to move to 
Mr. Nason with regard to Treasury. I was looking at your 
statement as well, and at the bottom of the page 1, when you 
are talking about some of the responsibilities that you would 
have, you list carrying out the responsibilities relating to 
financial institutions' policy, critical infrastructure 
protection, and financial education. We could talk a long time 
about all of those, but financial education especially in this 
era not just of complex financing arrangements or in some cases 
schemes, but also in the context of this predatory lending mess 
and scandal that we have seen across the country about which we 
need to have a lot of crackdowns, and maybe some cracked 
heads--figuratively speaking, of course. But I think financial 
education is going to be critically important in that dynamic 
for consumers who--and it could happen to any one of us, and 
those of us who talk about this cannot talk about it in a 
pejorative way, that somehow there are people out there who do 
not understand what they are doing and we here in Washington 
have to help them. That is pejorative. This could happen to any 
one of us, what we have seen.
    But I want to have you talk for a couple of minutes about 
what your--two parts, really. First of all, what you think your 
job, your main job is upon confirmation, but specifically about 
this issue of financial education.
    Mr. Nason. Thank you for that question, and I share your 
views about the importance of financial education. The reason 
that my statement had those three segments is that those are 
the direct lines that will report to me, so they are the three 
formal baskets of issues that I will have to cover if confirmed 
as the Assistant Secretary for Financial Institutions.
    But I am very dedicated and very interested in pursuing 
financial education, and although this was not part of my 
specific job, right now my current job as the Deputy Assistant 
Secretary one of the more rewarding experiences I had while in 
my last year and a half at Treasury was on the financial 
education front.
    Chairman Reed, I went back to the home State of Rhode 
Island, taught a class at Warrick Vets High School, and it was 
part of Treasury's outreach for ``Get Smart About Credit Day.'' 
And so you go into a high school, and, you know, a bunch of 
teenagers, and you are trying to reach out to them and talk to 
them about credit card policy and debit cards. And it is hard. 
It is hard to talk to teenagers about this issue, and you 
wonder whether or not you are connecting, and I tried a variety 
of different techniques to connect with these individuals. And 
I thought I was moderately successful.
    But when I came back to Washington a couple of days later, 
I got a stack of letters. It turns out that the kids were 
listening, and they had a lot of specific points and comments 
about some of the things that we were talking about. And I 
thought it was very rewarding.
    So what I would like to do on financial education, if 
confirmed, is two things: first, I think we need to push a 
literacy agenda in the schools in education, and it needs to be 
part of the things that teachers talk about; and, second, it 
needs to be more part of the fabric of the workplace, because 
people are busy, people are overextended. If you can get 
employers to participate in financial education programs on 
company time, show a commitment to it, then I think you will 
have a lot of progress on those fronts.
    So those are the two areas where I think financial 
education would be very beneficial, and I think it would be 
very helpful in terms of dealing with some of the predatory 
lending practices that you referred to. And I look forward to 
working with you and your staff on these issues, if confirmed.
    Senator Casey. Thank you.
    Senator Reed. Thank you very much, Senator Casey.
    I would like to first commend Dr. Van Hanh and Ms. 
Herschkowitz because they bring extraordinary experience to 
this very important organization, and your work, Dr. Van Hanh, 
with refugees, with issues particularly affecting the rural 
communities, and then, Ms. Herschkowitz, your business acumen 
and your experiences, I think will add a lot.
    Let me address the same question. Given your review of NCB 
activities, what would you say right now is the strength and 
the weakness of the operation as you approach these tasks? Dr. 
Van Hanh, which you please proceed?
    Mr. Van Hanh. Senator, first of all, thank you very much 
for your remark. I would like to say that the strength as far 
as I see NCB is, the model that NCB offers in terms of 
provision of financial resources for investment to the 
communities, not only for just any single group of people, but 
for very diverse communities in need, for the elderly, for 
those in need of housing, education, and so on. That would be 
one of the strengths by itself.
    The other strength is that this banking institution has 
managed to operate first-class activities and programs that 
clearly have quality of services provided to the underserved.
    Adding to that remark, my view is that not necessarily in 
terms of weaknesses but in terms of effectively meeting the 
needs of the low-income population, I would like to mention 
that the low-income population here in my view would constitute 
not only the low-income in any ethnic group, but it covers all 
of the minorities as well as any groups that would need 
financial assistance.
    The problem I could see is that there is a challenge ahead 
of us to look into the real needs of certain communities in 
areas whereby income distribution may not be at optimum as 
there is a considerable level of disparity in income, and the 
access to investment capital may not be currently available to 
all.
    So matching the supply, which is an excellent model of 
banking services by NCB, and the demand from the local folks 
especially where the needs are unmet in certain communities. I 
would like to see the opportunity and the challenge to bring 
the two together.
    Senator Reed. Thank you very much, Doctor.
    And, Ms. Herschkowitz, your assessment after reviewing the 
goals, objectives, and programs, the strengths and weaknesses?
    Ms. Herschkowitz. Yes, what strikes me with the National 
Cooperative Bank is--and I think particularly as you start 
having the big-box stores and other larger commercial entities 
move into communities, and you sort of see the small business 
decimated, I think the big strength of NCB is the opportunity 
to be able to utilize a cooperative to get small businesses to 
band together not only to survive but compete against the 
larger stores. I think the opportunity and probably what I 
could bring to the table with my entrepreneurial background is 
there is a huge opportunity to exploit this even further in 
terms of it is a large-scale, untapped opportunity in my view. 
They do an awful lot of business. They do millions of dollars. 
But I think compared to the whole small business economy, there 
is a huge opportunity there to help them to be able to compete.
    Senator Reed. Thank you.
    Senator Casey, do you have additional questions?
    Senator Casey. Just by way of conclusion, Senator, I want 
to thank you for bringing us together today for this hearing, 
and thank everyone who testified today, and also to not only 
wish you luck on your confirmations, but also to thank you for 
your willingness to serve. It is not easy to serve in any 
governmental position, and we appreciate you putting yourselves 
forward and bringing your talents and your experiences to these 
important offices.
    Thank you very much.
    Senator Reed. Thank you, Senator Casey.
    Let me associate myself with your remarks, Senator, and 
thank you all for your commitment to public service, your 
demonstrated commitment already to public service, and for your 
excellent testimony and response today.
    Let me again remind you that some of my colleagues may 
submit written questions, and we ask you to respond to these 
questions as promptly as possible in order that we may proceed 
further with your nomination. There is a certain self-interest 
in responding.
    The witnesses are excused, and the hearing is now 
adjourned. Thank you.
    [Whereupon, at 4:20 p.m., the hearing was adjourned.]
    [Prepared statements and response to written questions 
supplied for the record follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR DODD 
                       FROM MARIO MANCUSO

Q.1. Export Administration Act. Mr. Mancuso, Secretary of 
Commerce Gutierrez recently submitted to Congress a proposal 
for reauthorizing the Export Administration Act, which expired 
in 2001 and has yet to be reauthorized. Would you describe the 
importance of enacting this legislation and explain your 
specific qualifications for shepherding through U.S. efforts to 
improve enforcement of export controls?

A.1. Mr. Chairman, the reauthorization of the Export 
Administration Act (EAA) is a top priority for Secretary 
Gutierrez and, if I am confirmed, it will be a top priority for 
me. I believe the reauthorization of the EAA will enhance the 
Bureau of Industry and Security's (BIS) ability to perform its 
core mission: to keep the most sensitive dual-use items away 
from the most dangerous countries, organizations, and 
individuals.
    With the EAA in lapse, BIS's enforcement authority rests 
upon the authorities contained in the International Emergency 
Economic Powers Act and certain executive orders. This legal 
foundation is not optimally suited to investigate, prosecute 
and deter violations of the EAA. As I understand the 
Administration's proposal, it would reauthorize the EAA for 
five years, provide certain enhanced authorities to BIS 
criminal investigators, and increase the criminal and 
administrative penalties for those who violate our export 
control laws. If confirmed, I look forward to working closely 
with this Committee and the Congress to see that the EAA is 
reauthorized.
    In light of my extensive private sector experience as a 
corporate lawyer, my recent experience as a senior national 
security official, and my management and leadership experience 
generally, I am well-prepared to lead BIS's efforts to 
administer and enforce an efficient and effective dual-use 
export control regime.

Q.2. Irregular Warfare. Mr. Mancuso, as Deputy Assistant 
Secretary of Defense for Special Operations, you have overseen 
the ``Irregular Warfare Roadmap,'' a strategy to apparently 
enlist indigenous people overseas in certain covert counter-
terrorism operations. According to some accounts, these 
operations may now be conducted without explicit concurrence 
from the U.S. Chiefs of Mission in the corresponding countries. 
Would you explain the justification for such a policy? Were 
concerns raised by the State Department on behalf of Chiefs of 
Mission at the beginning that they were left in the dark about 
potentially highly controversial activities? How were concerns 
by State dealt with? Wouldn't such a unilaterally pursued 
strategy appear to harm inter-agency cooperation which is so 
critical for U.S. foreign policy in a variety of areas, 
including export controls? What are the legal ramifications of 
excluding the State Department from this strategy, particularly 
as it relates to our obligation to uphold and comply with 
universal norms and international law?

A.2. Mr. Chairman, I would like to affirmatively state that I 
believe it is essential that all organs of the U.S. government 
work in as close and coordinated a way as possible to achieve 
the policies our government may wish to pursue, whether those 
policies relate to counterterrorism or export controls. In most 
instances, our laws require it; in every case, good government 
demands it. For counterterrorism operations, this close 
coordination between the Departments of State and Defense is 
absolutely critical, especially since these operations often 
have significant political dimensions which are best assessed 
by--and implicate the lawful authorities of--the Chiefs of 
Mission.
    Sir, I want to emphasize that there are numerous 
authorities that clearly define the extent of a Chief of 
Mission's legal prerogatives, including the President's Letter 
of Instruction to Chiefs of Mission. In my view, any 
infringement of those authorities would be highly improper and 
counterproductive in the near-term (especially with respect to 
our ability to execute counterterrorism operations), but also 
to the long-term institutional ability of the State Department 
to conduct foreign policy for our country.
    In my personal experience during my tenure as Deputy 
Assistant Secretary of Defense, there has always been close 
coordination and consultation between the Departments of State 
and Defense (and the interagency generally) on all matters, 
operational or otherwise, in which my office was directly 
involved. In the course of such close coordination and 
consultation, there have been occasional disagreements. Such 
disagreements, however, have been few in number and good faith 
executive branch disagreements on complex policy questions that 
were resolved in the ordinary course during the interagency 
process.
    With respect to export controls, I share your view that 
interagency consultation is necessary. I would also 
respectfully suggest that, in light of the salience of export 
controls and the complexity of the global economy, similar 
cooperation and consultation must extend to all stakeholders, 
including industry, and to our friends and allies around the 
world.
    Sir, in closing I would add that that the Irregular Warfare 
Roadmap (the ``Roadmap'') is a capabilities-centric document, 
and does not touch upon the conduct of current operations, as 
is implied by your question. Most importantly, I did not 
oversee, help draft or otherwise meaningfully participate in 
the Roadmap. The Roadmap was a product of the Quadrennial 
Defense Review, which was overseen by the Deputy Secretary of 
Defense and the most senior members of the Department of 
Defense leadership. To the limited extent I was involved in the 
Roadmap, it was to support the Assistant Secretary of Defense 
for Special Operations and Low Intensity Conflict in 
facilitating the implementation of the Roadmap's long-term 
capability development recommendations, and then only as they 
related to special operations forces. In September 2006, I 
described the Department's vision for Irregular Warfare in my 
testimony before the House Armed Services Committee. A copy of 
this testimony is respectfully attached for your information.

Q.3. Enemy Combatant Status. Mr. Mancuso, you have been widely 
quoted championing the Administration's ``enemy combatant''/
detainee policies. In an interview with an official Pentagon 
publication, the American Forces Press Service in March 2005, 
you voiced adamant objections both to abiding by the Geneva 
Conventions and to granting POW status to detainees at 
Guantanamo Bay. POW status is ``sort of like earning `Gold 
Card' status on a credit card,'' you said, ``You have to earn 
it.'' What did you mean by these comments? Would you agree that 
by ratifying the Geneva Conventions, they now have the weight 
of domestic law? Please explain how you interpret Common 
Article 3 of the Geneva Conventions and what obligations it 
imposes on the United States?

A.3. Mr. Chairman, I conducted two interviews in March 2005 
with the Armed Forces Press Service, an internal Department of 
Defense news service, at the request of the Department of 
Defense's public affairs office. At the request of your staff, 
I previously provided to your office a copy of the public 
affairs guidance that I used to prepare for these interviews.
    During these interviews, I was asked to describe the 
government's legal framework for the war on terror. I was asked 
these questions in my capacity as a non-political appointee, 
GS15 government lawyer.
    I used the metaphor of a ``Gold Card'' to illustrate two 
aspects of the government's view of the operation of the Geneva 
Conventions: (i) that formal POW status must be conferred to an 
individual when certain specified criteria are met (e.g., wear 
uniforms); and (ii) once these specified criteria are met, 
certain rights automatically follow--over and above dignified 
and humane treatment. At no time did I mean to obscure one very 
important point: whether formally designated a POW or not, all 
captured battlefield persons are entitled to humane and 
dignified treatment.
    Mr. Chairman, I am a corporate lawyer by training, not a 
litigator and much less a public international law expert. 
During my almost two and a half years at the Department of 
Defense, I have spent the past 20 months on policy matters 
relating to our special operations forces, and not the very 
important legal issues you raise. Moreover, during my six and a 
half months as a staff attorney in the Office of the General 
Counsel of the Department of Defense from late January to mid-
August 2005, I worked on legal matters unrelated to detainees. 
Detainee issues were (and still are) handled by a separate 
office within the Department of Defense.
    While I do not have an informed personal opinion about 
either the weight of the Geneva Conventions in our domestic law 
or the operation of Common Article 3, I am generally aware that 
the U.S. Supreme Court recently addressed both of these issues 
in the Hamdan decision. It is my understanding that these 
issues have been settled as a matter of law. In any event, I 
recognize these are critically important issues for our 
country, and appreciate that you care a great deal about them.

Q.4. International Law. Would you explain your commitment to 
promoting international norms, standards and customary law in 
the implementation of U.S. foreign policy. How might upholding 
such standards actually strengthen our efforts to protect U.S. 
dual-use technologies from falling into the wrong hands?

A.4. Mr. Chairman, it is my belief that the U.S. should set the 
example for the world by adhering to international law and 
promoting the highest norms and standards of responsible global 
citizenship in all of our activities, including in the conduct 
of our foreign policy. I believe this approach is most 
consistent with our core values as a country, is critical to 
our ability to exercise national leadership on a wide variety 
of matters, including export controls, and most likely to 
contribute to the peace and security of our country over the 
long-term.
    On a professional level, I have sought to embody the same 
high standards in my work as a U.S. government official. And, I 
can personally attest, that in my dealings with senior 
officials from allied and partner governments throughout the 
world, it was their personal trust and confidence in my 
judgment, integrity, and leadership that secured favorable 
outcomes for our country, even from those governments which had 
sharp disagreements with certain of our policies.
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