[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




                               before the
                          SELECT COMMITTEE ON
                          ENERGY INDEPENDENCE
                           AND GLOBAL WARMING
                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                            OCTOBER 29, 2009


                           Serial No. 111-12

             Printed for the use of the Select Committee on
                 Energy Independence and Global Warming


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                           AND GLOBAL WARMING

               EDWARD J. MARKEY, Massachusetts, Chairman
JAY INSLEE, Washington                   Wisconsin, Ranking Member
JOHN B. LARSON, Connecticut          JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California           GREG WALDEN, Oregon
  South Dakota                       JOHN SULLIVAN, Oklahoma
EMANUEL CLEAVER, Missouri            MARSHA BLACKBURN, Tennessee
JOHN J. HALL, New York
JERRY McNERNEY, California

                           Professional Staff

                   Gerard J. Waldron, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Bart Forsyth, Minority Staff Director

                            C O N T E N T S

Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............     1
    Prepared statement...........................................     4
Hon. F. James Sensenbrenner, Jr. a Representative in Congress 
  from the State of Wisconsin, opening statement.................     6
Hon. Earl Blumenauer, a Representative in Congress from the State 
  of Oregon, opening statement...................................    11
Hon. Candice Miller, a Representative in Congress from the State 
  of Michigan, opening statement.................................    11
Hon. Jay Inslee, a Representative in Congress from the State of 
  Washington, opening statement..................................    12
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, prepared statement.........................    14


Hon. Tom Perriello, a Representative in Congress From The State 
  of Virginia....................................................    16
    Prepared statement...........................................    19
Hilary O. Shelton, Director And Senior Vice President For 
  Advocacy And Policy, NAACP Washington Bureau...................    26
    Prepared statement...........................................    29
Steve Miller, President and CEO, American Coalition For Clean 
  Coal Electricity...............................................    32
    Prepared statement...........................................    34
Jack Bonner, Bonner & Associates.................................    41
    Prepared statement...........................................    44
Lisa M. Maatz, Director of Public Policy and Government 
  Relations, American Association of University Women............    49
    Prepared statement...........................................    52

                          Submitted Materials

Hon. F. James Sensenbrenner, Jr. a Representative in Congress 
  from the State of Wisconsin an article from the publication 
  BusinessWeek, entitled ``The Secret Side of David Axelrod.''...     8



                       THURSDAY, OCTOBER 29, 2009

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:38 a.m., in room 
1100, Longworth House Office Building, Hon. Edward J. Markey 
(chairman of the committee) presiding.
    Present: Representatives Markey, Blumenauer, Inslee, 
Sensenbrenner, Miller, Sullivan, and Blackburn.
    Staff present: Michael Goo and Jeffrey Sharp.
    The Chairman. Welcome, ladies and gentlemen, to the Select 
Committee on Energy Independence and Global Warming. Today we 
have a very important hearing, and we very much appreciate 
everyone who is here and their willingness to participate.
    The select committee has held more than 70 hearings over 
the last few years. Most of them have focused on the best of 
America: innovation, new technologies, American entrepreneurs 
working to create new, clean energy jobs. Unfortunately, today 
we must focus on a troubling issue, a fraud which has been 
committed on Congress. The subject matter of today's hearing is 
the fraudulent letters sent to Congress, letters that attempted 
to influence the vote on the Waxman-Markey clean energy 
legislation that passed the House in June.
    Our investigation has uncovered four main findings.
    Number one, more than a dozen fraudulent, manufactured 
letters were sent to Congress questioning the Waxman-Markey 
legislation, letters that featured text written by lobbyists, 
doctored on fake letterhead, and marked with forged signatures 
from civil rights, senior, women's, and veterans organizations.
    Two, some here today will claim these letters can be 
attributed to a temporary employee, when, in fact, this fraud 
chiefly resulted from a systematic lack of oversight and 
quality control mixed with a substantial disregard for the 
    Three, when the fraud was finally uncovered several days 
before the close affirmative vote for the Waxman-Markey bill, 
Members of Congress who had received these letters were not 
informed of the fraud until after the vote had occurred.
    These events occurred within the context of a multimillion-
dollar so-called ``shadow lobbying'' campaign launched by the 
coal industry to influence clean energy legislation. Our 
investigation uncovered millions of unreported dollars spent on 
shadow lobbying by the coal coalition.
    The story begins earlier this year, in June, as the Waxman-
Markey bill was headed to the floor. The American Coalition for 
Clean Coal Electricity, a trade association funded by coal 
giants like the Southern Company, Arch Coal, and Peabody Coal, 
directed its PR firm, the Hawthorn Group, to manufacture a 
grassroots campaign questioning the Waxman-Markey legislation.
    This was nothing new. The coal coalition had been paying 
the Hawthorn Group at least $1 million a year for lobbying and 
consulting activities since 2000. In the first 6 months of 
2009, Hawthorn was paid nearly $3 million by the coal companies 
for their work and more than $7 million last year alone.
    With 2 weeks left before the vote, Hawthorn was under the 
gun to produce results. They turned to Bonner & Associates, a 
firm with experience generating letters to support shadow 
lobbying efforts. Bonner & Associates, a firm that regularly 
hires temporary employees to generate these letters, 
immediately hired a temporary employee who, within his first 
few hours on the job, manufactured five letters from the 
Charlottesville chapter of the NAACP seeking changes to Waxman-
    How was this employee so successful? Simple: The letters 
were forged. Did Jack Bonner or any other longstanding employee 
ask, how could a brand-new employee get five letters in 1 day? 
Did they ask why these associations, like the NAACP, would 
suddenly be willing to oppose the clean energy legislation? Did 
they ask that question? No. No one seems to have cared. 
Instead, these letters were simply sent to the targeted 
congressional offices without further review by Bonner & 
Associates, Hawthorn, or the coal coalition.
    Bonner & Associates has admitted they did not confirm the 
authenticity of the letters before they were sent to Congress, 
and neither did Hawthorn, nor did the coal coalition. Indeed, 
Bonner & Associates does not recall any conversations with 
Hawthorn or the coal coalition about oversight or quality 
    But, even worse, although the fraud was uncovered days 
before the vote, neither Bonner nor Hawthorn nor the coal 
coalition took any steps to inform the affected 
Representatives. In fact, they were not told until weeks later. 
The coal coalition was willing to pay millions to peddle a 
point of view, but they were unwilling to spend a few cents to 
call the U.S. Capitol and clear the air.
    This point of view was based on scare tactics and 
misleading figures and had zero to do with educating the public 
on key issues. These subterranean lobbying campaigns, where 
millions of dollars are spent in the cynical attempt to buy the 
support ideas don't earn, have become a substitute for an 
honest exchange of views and distort the playing field away 
from other Americans longing to have their voices heard.
    Today's hearing examines how a process that takes place in 
the dark leads to fraudulent conduct. I have always believed 
that sunlight is the best disinfectant, and so we are here to 
see how this shadow campaign worked and why it went so terribly 
    That completes the opening statement of the Chair. I now 
turn to recognize the ranking member of the select committee, 
the gentleman from Wisconsin, Mr. Sensenbrenner.
    [The prepared statement of Mr. Markey follows:]

    Mr. Sensenbrenner. Mr. Chairman, thank you for recognizing 
    Let me say at the outset that no one appreciates frauds 
being perpetrated on them, whether it is the Congress and any 
of its Members, regardless of party; whether it is 
corporations; and whether it is the American public.
    In this case, there was a fraud that was perpetrated on 
Congress. And no one can stand up to defend it. However, I 
think we ought to look at this fraud in the context of other 
frauds that have come up.
    With Bonner & Associates, they have recognized that one of 
their temporary employees committed a fraud. This temporary 
employee worked for them for all of 6 days. When they found out 
that there was a fraud that was being perpetrated, they fired 
the person, which was the right thing to do. They were under a 
contract with the ACCCE, and they did not bill ACCCE or they 
did not receive any payment for the services that they 
rendered. So, when the boss found out what was going on, he did 
the right thing, and he also said that, because of this, we 
don't want to be paid or we will not accept any payment.
    Now, astroturfing, unfortunately, is an art that, 
apparently, has been really perfected, and it has been 
perfected on both sides of the aisle. I have a Business Week 
article from March 14th, 2008, that talks about the secret side 
of David Axelrod. The Obama campaign's chief strategist was a 
master of astroturfing and has a second firm that shapes public 
opinion for corporations.
    And I would like to ask unanimous consent that this article 
be included in the record following my opening statement.
    The Chairman. Without objection, so ordered.
    Mr. Sensenbrenner. Now, after the hearing that was first 
called by the chairman was correctly postponed because the 
rules were not followed--and I appreciate his recognizing that 
fact and postponing the hearing--there was another hoax that 
was perpetrated by people on the other side of the cap-and-tax 
issue, a group called ``Yes Men.'' And they perpetrated a hoax 
on the news media. They used the name of the U.S. Chamber of 
Commerce to get a room at the National Press Club. They got a 
press release out saying that the Chamber was changing its 
stand on the Waxman-Markey legislation.
    And it was only shortly before the press conference was 
supposed to start that the Chamber found out about it and went 
and cancelled the press conference. But the damage was already 
done, and there were a number of media outlets, including The 
Washington Post and Reuters, that ended up running the story 
based upon the hoax that was perpetrated on them.
    I hope that this hearing, which talks about a hoax where 
the perpetrators recognized that they had done something wrong, 
fired the employee, and didn't receive any payment, would set 
an example up to those like the Yes Men and other people that 
might be thinking about perpetrating hoaxes on important issues 
of public policy to think twice. And maybe the Yes Men are 
thinking twice because the Chamber has filed a civil action 
against them in the Federal courts here in Washington, D.C.
    So I think what I want to say is that we are all unanimous 
in condemnation of hoaxes. This is one hoax that ended up 
having the people responsible paying the price. The Yes Men 
hoax did not.
    And I would hope that, when we go forth from this, whether 
we are seated on this side of the dais, the other side of the 
dais, or those who are representing the news media covering 
this hearing would be equally vigilant and equally condemnatory 
of hoaxes, wherever they may come from, on whatever side of the 
issue they are, so that we can legislate based upon genuine 
public opinion.
    And, again, I ask unanimous consent that the Business Week 
article about Mr. Axelrod's money-making activities be included 
in the record at this point.
    The Chairman. So ordered.
    [The information follows:]

    The Chairman. The gentleman's time has expired. The Chair 
recognizes the gentleman from Oregon, Mr. Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman.
    This is a very busy morning. I appreciate our colleague 
from Virginia joining us. I just would like to get on with the 
    I would say that I--I do appreciate Congressman Perriello 
being an example of somebody who has the courage of his 
convictions, moving ahead, notwithstanding efforts like this to 
distort public opinion, and took a very courageous stand on a 
controversial issue and continues to be engaged deeply with the 
    And the best anecdote to cheating, I think, is a 
congressperson who is in touch with his constituents and his 
conscience. And I think our colleague is a great example of 
that. And I appreciate him being here to cast a little light on 
this unfortunate situation that he endured and hopefully assure 
that it is less likely to occur in the future.
    The Chairman. Great. The gentleman's time has expired. The 
Chair recognizes the gentlelady from Michigan.
    Mrs. Miller of Michigan. Thank you very much, Mr. Chairman. 
I appreciate you calling the hearing this morning.
    And I would want to associate myself with our ranking 
member's comments and just add this. Certainly, any time we 
have any fraud perpetrated, whether it is Members of Congress 
or at any level of government, it demeans the process, it 
demeans our democracy, our way of governing ourselves here.
    And I would just say, from a personal perspective, I have 
been involved in politics in an elected capacity probably for 
about 30 years. One of my jobs was I was a former Secretary of 
State in the State of Michigan for 8 years, and I was our chief 
elections officer. And I always thought then that transparency 
was best. And when I was trying to enforce campaign finance 
law, there were many times that we would find, you know, shadow 
organizations that were trying to drive a particular agenda or 
a particular issue.
    My favorite was always lots of money going to a group 
called ``Good Government,'' you know, and yet--so you didn't 
know where the money came from, you couldn't tell who was all 
involved in it, and yet they were trying to drive the 
legislature on a particular issue. I guess you certainly can't 
call that fraud, but yet it is not transparent, and it is 
trying to achieve an end without full transparency.
    And I think it is very important that all of us in 
government and in Congress or State legislatures or city 
council or county commission or what have you, we all find 
similar situations. We are always going to have the human 
element that goes overboard in trying to drive a particular 
outcome and an agenda and an issue. And transparency and 
letting the sun shine in is always the best antiseptic, I 
think, for making sure that our democracy continues to be 
strong and vibrant. And certainly calling attention to this 
issue today is just one in many, many things that happen and 
always happen and will continue to happen, but we need to 
always be ever-vigilant, and those of us involved in the 
process trying to shed the light, if you will, and sunshine on 
people who are trying to drive an agenda.
    And what has happened here is unfortunate. This is not the 
first; it won't be the last. And I think, as Members of 
Congress--I know on this particular issue, the cap-and-trade 
issue, my office received about 10,000 correspondence in 
various forms, whether that was letters or faxes or phone calls 
or e-mails or what have you. I would say about 70 percent of 
them were opposed to the cap-and-trade piece of legislation. 
But, you know, people have to speak. But a lot of times you 
would get things and you would wonder, you know, is this a 
fraudulent idea, who is this group, et cetera. And you just 
have to try to do your best to weed through these things.
    So, again, I look forward to the testimony by the witness. 
I appreciate, Mr. Chairman, you calling the hearing. And thank 
you very much.
    The Chairman. Thank you.
    The gentlelady's time has expired. The Chair recognizes the 
gentleman from Washington State, Mr. Inslee.
    Mr. Inslee. Thank you.
    Just a note. If there is ever a fellow who represents the 
kind of ``Mr. Smith Goes to Washington'' idealism and courage, 
it is the Representative who is before us today. And I really 
honor your work on this and other issues so far.
    I just want to make two comments.
    First, we have seen this movie before, and it was the 
exercise by the tobacco industry to try to hoodwink and cover 
up the science of the devastating toxicity that they were 
involved in for decades. And it actually worked for decades. 
And we have seen a similar effort to hoodwink and defraud and 
deceive the American public now to cover up the toxicity to the 
world environment and ultimately to our own health of carbon 
dioxide and other climate change gases. And they have used 
every trick in the book, including the ones that we will 
investigate today.
    But I just want to note that they are now failing. The 
tobacco industry got its comeuppance, if you will, and justice 
triumphed ultimately. And that is what is going on right now in 
the climate change debate, where you see in the U.S. Senate, 
Members of the U.S. Senate, on a bipartisan basis, finally 
coming out to move based on the science, which is now becoming 
dominant in the discussion.
    The second thing I want to note is that this is not the 
only continuing effort to deceive the American public. I want 
to note a book called ``Freakonomics'' or ``SuperFreakonomics'' 
some authors wrote that basically asserted, ``We don't have to 
control CO2. We will just pump sulphur dioxide up 
into the atmosphere, and that will solve the problem.''
    They purported to quote a scientist named Ken Caldeira from 
Stanford, who is one of the predominant researchers in ocean 
acidification to suggest that Dr. Caldeira didn't think we 
should control CO2, which is an absolute deception. 
Dr. Caldeira I have spoken to personally. He has told me we 
have to solve ocean acidification; you can't solve ocean 
acidification without controlling CO2.
    And yet people are still trying to write books to deceive 
the American public, and we have to blow the whistle on them. 
We are blowing the whistle on one today. We will continue to do 
it because, ultimately, science is going to triumph in this 
    Thank you.
    The Chairman. The gentleman's time has expired.
    [The prepared statement of Ms. Blackburn follows:]

    All time for opening statements has been completed, so we 
will turn to our first witness, who is Congressman Tom 
Perriello, representing Charlottesville and other communities 
in the Fifth District of Virginia.
    He is in his first term here in Congress. He has proven to 
be an outstanding freshman congressman. And in the energy 
debate, he clearly, as Congressman Inslee pointed out, has 
mastered this issue and has a true command of the subject 
material and an ability to explain these issues in a way that 
had enormous importance to the average citizen.
    So we welcome you, Representative Perriello. Whenever you 
are ready, please begin.


    Mr. Perriello. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner, and respected members of the committee, for 
providing this opportunity to speak today about the unfortunate 
tactics employed by opponents of the energy independence 
efforts here in the Congress.
    I will leave it to you and your committee to figure out 
where there are patterns of behavior, where there was deception 
of intent versus deception of omission. I can tell you simply 
my story of my experience with this and what I have seen, both 
in our congressional office here and in the district.
    It certainly has pained me to see so many upstanding 
groups, including senior advocacy groups and American Legion 
posts, misrepresented and dragged into this debate.
    Our Founding Fathers knew the importance of an elected 
representative body held responsible by the people and ensured 
that the right of the people to petition the government would 
be protected by the first amendment. While politics has never 
been pretty, there are certain lines you just don't cross, like 
the forging of letters. And this must be taken very seriously. 
You don't get into politics expecting a game of pinochle, but 
you do expect a basic ability to know the will of the people 
when they call your office, when they write, when they show up 
at meetings.
    And what I see here is a disservice not just to those who 
were advocating for the energy independence efforts but, also, 
those who are genuinely advocating against. At the point that 
we have to ask deeper and deeper questions about how valid the 
phone call is, how valid the letter is, how valid the meeting 
with constituents are, we are undermining the effort of those 
on either side of the issue who take the time on their own free 
will out of their busy schedule to allow our elected officials 
to know their feelings.
    So I thank the Chair for holding this hearing today to 
bring light to this important matter and give attention, as it 
    My office, like many others, received a very high volume of 
constituent calls, letters, e-mails, and faxes in the weeks and 
days leading up to the final vote on the clean energy bill. It 
is not only justified but admirable for citizens of this 
country to be so actively engaged in following such a piece of 
legislation, one that I believe will be one of the more 
transformative in a generation for rebuilding our competitive 
advantage and our national security.
    But while I hold strongly to the belief that this is key to 
the job creation and security of the next century, I also 
recognize that decent Americans can fundamentally disagree. 
Every Member of Congress, regardless of whether or not they 
supported the bill, should value hearing from those who have 
deep concerns about the energy strategy of this country. This 
is the solemn and sacred duty we have, as elected 
    As my office worked to sort through the piles of 
correspondence after the vote, we were contacted by the 
Charlottesville-based organization Creciendo Juntos, a 
nonprofit network that tackles issues related to the Hispanic 
community in my district.
    A letter from Tim Freilich, who sits on the executive 
committee, informed me that a partner with the lobbying firm 
Bonner & Associates had contacted Creciendo Juntos to inform 
them that an employee of Bonner & Associates had faked a letter 
claiming to be from them. This fake letter was said to be a 
mistake, but Freilich, exercising his right of the people to 
petition the government for a redress of grievances, contacted 
my office to pass along the information about the forgery.
    This was the first my office was told of this or any other 
fake letter, despite the fact that it now appears Bonner & 
Associates and the American Coalition for Clean Coal 
Electricity that had hired them knew about the forged letters 
before the final vote. I leave that to your committee to 
    After being notified about this letter, my office noticed 
similarities in the wording of the letter with others they had 
been sorting. Going back through the correspondences, my 
staffers found five more forged letters, these purportedly from 
the Albemarle-Charlottesville branch of the NAACP.
    I would point out that the national NAACP organization did 
support the ACCCE's legislation, stating that climate change 
disproportionately impacts communities of color and recognizing 
the economic and public health benefits of the legislation. 
Since the forged letters were revealed, the national NAACP has 
said it is diametrically opposed to the claims made in the 
forged correspondence.
    Since this time, other forged letters have been discovered 
claiming to be from other groups, including two wonderful 
seniors organizations in my district, the Jefferson Area Board 
for the Aging and the Senior Center, Incorporated, as well as a 
local American Legion post. Forged letters sent to other 
Members of Congress have also been uncovered.
    Forgery and identity theft and attempting to influence 
Members of Congress not only does a disservice to those who 
support the legislation but also to those who oppose it. If 
Members of Congress have to view voices of opposition with 
suspicion or doubt, it hurts the opposition's cause and our 
national debate on the whole.
    As for me, I will not change my dedication to listening to 
my constituents and treating their opinions legitimately. But, 
clearly, there are astroturf and other types of tactics that 
are expanding, in my mind, a corporate capture of government. 
As the ranking member mentioned, this can occur on both sides 
of the aisle.
    But as we see more and more influence of money and 
corporate influence in this decision-making process, the 
greatest antidote, the greatest counterweight is people power. 
Regardless of where the people are in the ideological spectrum, 
it is ultimately, in a democracy, their accountability that 
should matter the most. Where that is undermined through such 
deceitful tactics, we all lose, regardless of our position on 
this particular bill.
    Again, I leave it to your committee to know where this was 
patterns of behavior, where this was one outlier. But the 
important thing is that we get to the bottom of this so that we 
continue to have the most robust and democratic public debate, 
not only on issues of energy independence but all those that 
face us at this critical time.
    With that, thank you.
    [The statement of Mr. Perriello follows:]

    The Chairman. Thank you, Congressman Perriello, very much.
    The Chair will recognize himself and ask you, what was your 
reaction when you learned that fraudulent letters had been sent 
to your office, seeking to elicit a negative vote from you on 
the Waxman-Markey clean energy legislation as it was about to 
be voted on on the floor of Congress?
    Mr. Perriello. To be honest, at first there was very little 
shock. Nothing shocks me in this business anymore. I think we 
have all, probably on both sides of the aisle, had negative TV 
ads run about us that we think have no bearing in truth and 
other things, and we just learn to be a little bit numb to it.
    But it was actually the visual that shocked me, seeing the 
actual taking of the letterhead, and of such respected 
organizations, both nationally and locally, that really did 
shock me and say this is a conscious level of forgery that is 
very different from a lot of the manipulations that go on in 
our politics today.
    So, if someone thought this was okay, either this was a 
real really bad apple or there are some incentives that are 
very much in the wrong place here that is driving this process. 
And it seemed worthwhile to do our due diligence on the office 
side to see what else we could find.
    The Chairman. Well, in the short run, do you think that 
fraudulent activity as we have seen does help those who want to 
oppose legislation, clean energy legislation, as it moves 
through Congress?
    Mr. Perriello. I can't speak for other Members. I know for 
me, you know, when we try to figure out where folks are on the 
bill, there is never consensus in my district. You want to use 
every avenue you can. You use, obviously, the calls coming into 
the office. You proactively go and try to meet with groups. 
Many of the groups that are here are groups that I call on a 
regular basis to talk to and hear their opinions on things. So, 
some of it seemed a little naive, to think that we wouldn't 
actually eventually have those conversations.
    So, you know, each Member is going to make their decisions 
in their own way. I think most of us try to consult our 
constituents and consult our conscience, as Mr. Blumenauer 
said, and try to reach the right opinion on that. But it makes 
it that much more difficult to do it when, in addition to the 
normal due diligence, you are also trying to filter through 
things that are just outright forgeries.
    The Chairman. But you were not notified before the vote 
that NAACP did not, in fact, oppose the Waxman-Markey clean 
energy bill; is that correct?
    Mr. Perriello. That is correct.
    The Chairman. So, as far as your office was concerned, they 
were in opposition.
    Mr. Perriello. I would say that, if anyone knew that this 
was going on before the vote and didn't let us know, that is 
certainly an issue of concern and something worth asking some 
questions about.
    But for me, yes, they did not approach our office before 
the vote to correct the record on that.
    The Chairman. My time has expired. The Chair recognizes the 
gentleman from Oregon, Mr. Blumenauer.
    Mr. Blumenauer. What have you heard from the perpetrators 
of this fraud?
    Mr. Perriello. Several of the people involved in the chain 
have reached out to apologize personally and profusely, and I 
do appreciate that. And they have certainly let me know that 
they have conducted investigations internally. And, again, you 
know, I will leave that to your committee to figure out whether 
those have taken place, whether they are sufficient. But I did 
appreciate them reaching out to apologize.
    I said to them what I will say to you, which is, you know, 
to me, the really big picture here is a little bit of what Mr. 
Inslee was talking about, which is we know we are in a climate 
crisis. I think we have taken a genuine effort to work with all 
of the interested parties in this, to protect stakeholders with 
a very slow phase-in time, with a lot of efforts to invest, for 
example, in clean coal.
    And, to me, the most important thing is when you try to 
work together with all of the stakeholders to come up with a 
fair deal, it is then, you know, not entirely pleasing when the 
response to that is to be told it is Armageddon by the very 
groups that you are working with.
    But, in terms of the fraud itself, I will commend them for 
taking proactive efforts to track me down personally and 
    Mr. Blumenauer. And when did they track you down and 
    Mr. Perriello. I don't remember, but it was about the time 
this started to break in the Daily Progress, one of the top 
local papers in my district.
    Mr. Blumenauer. You had discovered it before they did.
    Mr. Perriello. Yes.
    Mr. Blumenauer. And it was in the press before.
    Mr. Perriello. My understanding is they had reached out to 
Creciendo Juntos on their own. That information had come to us. 
The newspaper--I don't remember the sequence between Creciendo 
Juntos talking to us versus the paper publishing it, but they 
broke that story. And it was subsequent to that that we were 
contacted about setting up a phone call for that.
    Mr. Blumenauer. So you were that contacted after this other 
stuff bubbled, you found out. And a significant period of time 
after the actual vote occurred?
    Mr. Perriello. That would probably have been, you know, a 
matter of weeks, not days, afterwards. But I can try to track 
down the exact time when those calls occurred.
    Mr. Blumenauer. And did they give any indication why they 
didn't tell you this before the vote, since they knew?
    Mr. Perriello. Well, I think different people knew at 
different times. And, again, I just--I haven't done the deepest 
due diligence on this. I know that is in your hands.
    But I think that, as these things are set up, often there 
are six or seven layers between the actual actors and the 
person who is forging the letter. So I don't think it is at all 
a stretch to say that some of the folks in that chain had no 
idea this was going on and didn't know until it broke in the 
papers, would be my guess.
    And I think there were probably some very decent and 
honorable people who got caught up in this and really regret it 
and were very serious about it. I think, you know, my best 
guess would be that there were others further down that chain 
who knew exactly what was going on.
    Mr. Blumenauer. You have an extensive background in working 
with people, advocacy, some community--I hate to use the term 
``community organization,'' but you have a background of 
working with groups like this to try and articulate concerns, 
communicate them, solve problems, long before you got involved 
in elective politics.
    So I would ask just maybe your judgment as a semi-informed 
professional, when you have groups that are tasked to try and 
create public demonstrations and it is outsourced--and you 
mentioned layers upon layers, and we are seeing this--doesn't 
it almost invite this sort of--it is just a matter of degree, 
in terms of--the more buffering is in it, the harder to 
actually give an honest expression of what people feel and what 
they need?
    Mr. Perriello. Well, at the risk of resorting to the ``you 
know it when you see it'' logic, I think that there is a 
blurring of that line.
    And, certainly, August was an example of that. As you know, 
I did over 100 hours of town hall meetings in my district 
during August. And the vast majority of people, constituents 
who attended that were there absolutely on their own free will. 
They genuinely had strong concerns either for or against the 
bill, against health care reform, about fiscal responsibility. 
There were other folks who were not even from the district or 
other things, and there was obviously a lot of orchestration on 
the talking-points level.
    So, how do you distinguish the genuine concern of people 
from some of these tactics? Where do you put, for example, 
things that just make it a lot easier for people to 
participate, such as calling and saying, ``Just press 1, and 
you will automatically be connected to your congressperson''? 
Well, in my mind, that is an absolute legitimate and positive 
thing to be getting people connected. Obviously, if the 
information before that ``Press number 1'' is false and scare 
tactics, then it sort of moves down that line.
    So, from an organizing perspective, I think getting--most 
people care deeply what is at stake in these debates, but most 
people are also extremely busy trying to find a way to provide 
for their families. And where we can do genuine efforts to 
bring people together, whether as an organizer or an official, 
I think that is a positive thing for promoting public debate.
    Mr. Blumenauer. Thank you.
    Thank you, Mr. Chairman.
    Thank you, Congressman Perriello. I think that the work 
that you have done in less than a year in office, sort of, is a 
fascinating experience in being connected with constituents, 
and even this unfortunate episode is useful. And I deeply 
appreciate your contributions.
    Mr. Perriello. Well, thank you.
    And, again, you know, I do think there are folks in the 
clean coal coalition who have been very active and positive and 
constructive in this debate. And I think, as we do look at 
this, we want to make sure we don't paint everyone with the 
same brush. I hope you will be able to get to the real core of, 
you know, what was at the base of this.
    The Chairman. Great. The gentleman's time has expired. The 
Chair recognizes the gentleman from Washington State, Mr. 
    Mr. Inslee. Thank you.
    You know, I really do consider this a serious thing because 
it affects not just you but all of us in Congress when this 
happens. It diminishes our confidence and our ability to 
communicate with our constituents. So I do consider it a 
serious thing.
    The research that I am looking at, as far as the staff 
investigation, suggests that not only, sort of, an underling of 
this organization sent these fraudulent letters on multiple 
occasions, not just one, but that supervisory personnel learned 
of this fraudulent activity several days before the vote took 
place on the Waxman-Markey bill. On June 22nd and 23rd it 
suggests that the supervisory people at Bonner & Associates 
became aware of this. Then the vote took place a few days later 
on June 26th. But there was not any attempt to notify you of 
the fraud until July 1st. It was not successful, effectively, 
until July 13th.
    Have the companies given you any explanation why, even when 
supervisory personnel was aware of the fraud before the vote, 
that they waited until after the vote to let you know about the 
    Mr. Perriello. The people who reached out to me were from 
the coal coalition itself. And I think their issue, if I 
recall--and I am sure you can ask them--was that the 
information had not reached them before the vote. But I don't 
want to put those words in their mouths. I think that is just a 
question you will have to ask them, in terms of when they knew 
and why they didn't let us know immediately. I think everyone 
would agree that that is there.
    And, also, you know, I used to do some war crimes 
prosecution work in West Africa, as you know. And the issue 
with command responsibility was always not just whether you 
ordered it but did you know or should you have known that 
certain things were going on.
    And I think, you know, part of the question here is 
whether--what concerns me is not just what people knew, but 
were there incentive structures set up in which there was a 
looking the other way to encourage or incent this sort of 
behavior that, I do agree with you, is extremely disruptive to 
our democratic process.
    Mr. Inslee. Well, the fact of the matter is that people who 
have been try to obfuscate and deceive Americans about the 
clear consensus on the science of climate change have created a 
climate where you could expect this type of thing to happen, 
because they have on multiple occasions tried to deceive 
Americans into thinking that there is not a consensus about 
climate change.
    And so, myself, I believe they have created that climate 
where this kind of thing can be tolerated and happen in their 
organizations. And, frankly, I just think this is just the tip 
of the iceberg on the deception that Americans have been 
subjected to.
    Let me just ask you this. Why did their efforts fail? Why 
did you move forward on this vote of conviction?
    Mr. Perriello. Well, I do think, for all of the, sort of, 
corporate capture and slick tactics that have taken over our 
democratic process, the voice of the people tends to emerge. 
And I think what you see overwhelmingly from the American 
people is an understanding that energy independence is one of 
the challenges of our generation.
    Our country is being made less safe. People don't like the 
idea that, every time they go to a gas station, they are 
essentially sending their hard-earned money straight overseas 
to countries that don't like us particularly. They understand 
that the energy is being produced elsewhere. The technology, we 
are being leapfrogged in these areas.
    The southern part of my district has very high 
unemployment, old manufacturing areas, textiles hubs, and 
furniture factories. And we are looking for the next thing. And 
I think that, for too long, we have had elites in both parties, 
quite honestly, pursue an economic strategy based almost 
entirely on the financial sector and banking and not on an 
industrial policy or an ag policy.
    I think, you know, when I started out in politics and took 
the step into this world, I conducted a couple hundred 
interviews with business leaders and others in these 
economically depressed areas and said, what can bring the jobs 
back? And people kept coming back to the energy economy over 
and over again--smart grid, decentralized power production, 
biofuel, biodiesel developments, all of these; as well as not 
only wanting wind and solar but wanting to manufacture it 
there; also an advocate of nuclear power and some of those 
efforts that I think can be part of the solution. So all of 
that is there.
    And, as you know, really good ideas often take 30 minutes 
to explain and only 30 seconds to destroy. We have seen that in 
other debates, as well. And I think, at the end of the day, the 
way you break through this is to just work that much harder to 
be able to make sure you find the time to have the 30-minute 
conversation and not just the 30-second conversation.
    If you look at--you know, not to be driven by polls, but 
the polling even in my district where I think folks on the 
other side assume this is going to be a very detrimental issue, 
people overwhelmingly support this and support a move in this 
direction. And I think the division people are going to see at 
the end of the day is the folks who had the courage to step up 
and solve a problem versus those who didn't.
    And I think it is the same courage issue, you know, that 
you get at with whether your company comes right out and says, 
``We don't believe this,'' or does the company create a 
coalition, the coalition hire a lobbying firm, the lobbying 
firm hire a sub-lobbying group that then hires a temp employee 
to do something.
    I think this is the time where, you know, if you believe 
something, stand up, put your name on it, and fight for it, 
wherever you come down on that issue. And I think that is the 
kind of leadership that the American people are looking for. 
They don't expect to agree with you every time, but they expect 
you to look them in the eye and tell you----
    Mr. Inslee. Well, it looks to me like they picked the wrong 
guy to bully.
    Mr. Perriello. Thank you.
    The Chairman. The gentleman's time has expired.
    And, Representative Perriello, thank you so much. And we 
appreciate the fact that you are willing to come forward and to 
make this presentation to the committee. I think it is a very 
important issue that we get out to the American people.
    And it is important, as well, as you are pointing out to 
the committee, that the public has a right to the facts. They 
have a right to know what the real truth is in the clean energy 
debate but also how that debate is being conducted. And your 
testimony here today is very much appreciated, and it reflects 
the excellent work that you have been doing here in Congress 
for your district and for the country.
    We thank you so much.
    Mr. Perriello. Thank you, Chairman.
    The Chairman. Now we would ask the next panel of witnesses 
to come forward. And we would ask the staff to put the names of 
the witnesses in front of the seats.
    We ask that you rise, please.
    [Witnesses sworn.]
    The Chairman. Our first witness is Mr. Hilary O. Shelton of 
the NAACP. The NAACP's name was used on five of the fraudulent 
letters. Mr. Shelton presently serves as the director to the 
NAACP's Washington Bureau and senior vice president for 
advocacy and policy. The NAACP's Washington Bureau is the 
Federal legislative and public policy division of the NAACP, 
which is the oldest and largest civil rights organization in 
the United States. He is the recipient of many awards and 
honors in the civil rights area.
    Mr. Shelton, we are pleased to have you with us here today. 
Whenever you are ready, please begin.



    Mr. Shelton. Thank you. Good morning, and thank you, 
Chairman Markey, Ranking Member Sensenbrenner, and other 
members of the committee, for holding this important hearing 
and for inviting us here to testify.
    The NAACP sincerely appreciates the efforts of the 
committee to investigate this attack on the very integrity in 
the democratically structured congressional legislative 
process. The NAACP takes our integrity very seriously. As such, 
we are outraged and appalled that anyone would fraudulently 
misrepresent our position as we pursue legislative 
opportunities to make our Nation greater still.
    Mr. Chairman, members of the committee, as we understand 
it, the facts are these: Just prior to debate on the final vote 
on H.R. 2454, the ``American Clean Energy and Security Act of 
2009,'' Congressman Tom Perriello received a number of letters 
purportedly from representatives of the Charlottesville, 
Virginia, branch of the NAACP in opposition to the legislation. 
These letters, which had the official NAACP seal at the top, 
asked that Congressman Perriello support provisions intended to 
weaken the legislation.
    After the vote on H.R. 2454, the Congressman Perriello 
office determined that at least five of these letters were 
forgeries, that they did not come from representatives of the 
NAACP Charlottesville branch, nor did they even represent the 
official policy position of the NAACP. Further investigation 
appears to indicate that the letters were sent out by a 
consultant group that had been hired to represent opponents of 
the legislation.
    Mr. Chairman, members of the committee, please allow me, 
for the record, to make one issue very clear. The NAACP 
supports many of the very important provisions in the 
``American Clean Energy and Security Act of 2009,'' and we 
oppose amendments that would weaken these provisions.
    Secondly, let me say that, for more than 100 years, the 
NAACP has fought for equal access to our political 
establishment. For too long, the NAACP represented people in 
this country whose voices were marginalized, to say the least. 
That is why it is particularly offensive and infuriating to us 
when our name and all that we have worked for is misused and 
distorted by others in an effort to misrepresent or deceive the 
United States Congress.
    Mr. Chairman, members of the committee, it has been my 
honor and privilege to serve in the capacity as director of the 
NAACP's Washington Bureau for more than 12 years. During this 
time, I have endeavored to build on the reputation of my 
predecessors and to dutifully and effectively represent the 
interests of the NAACP members from across the Nation.
    As you may all be aware, the NAACP is nonpartisan. We do 
not support, endorse, or oppose individuals or political 
parties. We do, however, fiercely advocate for our public 
policy agenda and legislative priorities as passed by our 
members. As such, it has been my pleasure to work with Members 
of the Congress from across the ideological spectrum on a 
myriad of public policy issues.
    For example, in the course of my tenure with the NAACP, I 
have worked with Chairman Markey on issues that include clean-
up after Hurricane Katrina, making the change to digital 
television, and closing the digital divide. It has also been my 
pleasure to work closely with Ranking Member Sensenbrenner as 
he played a key role in the reauthorization of the Voting 
Rights Act and his ongoing battle for the rights of disabled 
    In all of these legislative battles, as well as in many 
others that we have fought and that we continue to fight, the 
political strength of the NAACP lay not only in our reputation 
but also in the clarity and consistency of our policy agenda. 
To have somebody blatantly misrepresent the policy of the NAACP 
is, therefore, to threaten not only all that we have worked for 
for these past hundred years, but also to challenge our ability 
to continue to advocate effectively on behalf of our 
constituent members.
    Furthermore, because the NAACP has been working for the 
rights of disenfranchized and underserved communities for so 
long, our counsel is often sought by other organizations that 
represent similar groups of Americans. If our position is 
misrepresented, then it leads to confusion, weakens our 
position, and prevents our voices from being clearly heard on 
many crucial issues that affect our communities, our Nation, 
and even our world.
    So the NAACP is looking forward to a thorough investigation 
by this committee into what happened. We will be especially 
interested in knowing if the practice of sending fraudulent 
letters in any effort to give the appearance of a grassroots 
movement is a common one. We will also be interested in 
learning what is being done to correct the misinformation and 
to mitigate any damage a fraudulent campaign like this may very 
well cause.
    I will say that, from our experience, the first we heard of 
the misuse of our name was on July 31st, 2009, more than a 
month after the vote took place, and only then from a media 
outlet. I am also curious to know if this type of fraud has 
been perpetrated using the name of the NAACP or any other 
organization or individual in any other instances.
    I understand that it is not the scope of this hearing to 
make recommendations on how to avoid future problems such as 
this. And, frankly, I am not sure I have any solid response 
that we can give to help address this issue in the future.
    However, I do know that we are very interested in working 
with the committee and the rest of the Congress in finding a 
way to continue to encourage honest, democratically based 
political activism by constituents and grassroots 
organizations, as well as other stakeholders, including 
industry and corporations. At the same time, we must strive to 
ensure that dishonest communications which misrepresent the 
positions of one or more of these groups is stopped.
    And, indeed, Mr. Chairman, I thank you and the committee 
for the opportunity to testify today.
    [The statement of Mr. Shelton follows:]

    The Chairman. Thank you, Mr. Shelton, very much for being 
here today.
    Our next witness is Mr. Steve Miller. He is the president 
and CEO of the American Coalition for Clean Coal Electricity, a 
trade association of companies involved in the production, 
transportation, and use of coal.
    Thank you for being with us today, Mr. Miller. Whenever you 
are ready, please begin.

                   STATEMENT OF STEVE MILLER

    Mr. Miller. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner, and other distinguished committee members. I am 
Steve Miller, president and CEO of the American Coalition for 
Clean Coal Electricity, ACCCE. I appreciate the opportunity to 
further assist the committee with its investigation into this 
important matter.
    For more than 15 years, ACCCE has worked to advance a 
constructive public policy dialogue on issues related to energy 
and environmental policy. ACCCE has publicly stated our support 
for Federal carbon management legislation. And we recognize 
that a cap-and-trade program is one option for such 
legislation, as long as the program provides continued access 
to affordable, reliable, and domestically produced energy.
    ACCCE supported changes to the Waxman-Markey bill that 
would guarantee additional protections for consumers and the 
economy. We encouraged constituents to voice their support for 
measures that would limit the potential for significant 
electricity price increases.
    As a part of this overall effort, Bonner & Associates was 
contracted by the Hawthorn Group, our primary grassroots 
consultant for 10 years, to reach out to organizations in seven 
legislative districts. I am appalled that some of the letters 
sent to Members of Congress by Bonner & Associates were 
falsified. The sending of fraudulent letters to Members of 
Congress or any other policy-maker is simply unacceptable.
    Furthermore, it is inexcusable that Members of Congress and 
the affected organizations were not promptly notified about 
these letters, and we at ACCCE should have taken more timely 
action to make these notifications.
    That is why we have taken extensive steps to investigate 
and address the situation. Nearly 3 months ago, we launched a 
full examination, relying upon the considerable investigative 
experience of Venable LLP, our outside legal counsel. Former 
U.S. Attorney General Benjamin Civiletti oversaw this review as 
a senior partner of the firm, which led to three key findings.
    First, ACCCE did not play any role in the generation of the 
false letters and had absolutely no knowledge that Bonner had 
produced them until we were informed by the Hawthorn Group.
    Second, Venable examined the authenticity of all 58 letters 
submitted by Bonner. Bonner self-identified 12 as being 
falsified. Subsequently, our review questioned the authenticity 
of two additional letters. As soon as we identified concerns 
about these letters, Venable alerted select committee staff and 
ACCCE notified the Member's office.
    Third, Venable examined ACCCE's response after first being 
notified about the falsified letters in late June. At that 
time, ACCCE instructed Hawthorn that Bonner & Associates should 
immediately notify the affected Members of Congress and 
    But the investigation also showed that my colleagues and I 
at ACCCE should have acted faster to ensure that those affected 
had been notified before the June 26th vote on H.R. 2454. Our 
misplaced reliance on Mr. Bonner's firm to quickly make those 
contacts resulted in our own failure to act in a timely 
fashion. We have apologized to the affected Members of Congress 
and the local community organizations.
    Following the examination, Mr. Civiletti made 
recommendations to the ACCCE board of directors. Based on those 
recommendations, the board has taken or directed the following 
    First, three senior ACCCE executives, including myself, 
have been reprimanded and received substantial financial 
    Second, ACCCE staff have implemented a public policy 
activity code of ethics that our board will review next month. 
All ACCCE employees, contractors, and subcontractors must abide 
by that policy.
    Third, ACCCE has informed Bonner & Associates that it will 
not be paid for the work performed and it will never work for 
ACCCE again.
    Fourth, ACCCE will recompete its primary contract for 
grassroots outreach. Any contract or bidding must comply with 
our new standards of conduct.
    Finally, Mr. Chairman, your letter from last week raised 
issues about how ACCCE discloses its lobbying activities. We 
disclose our direct Federal lobbying expenses on the quarterly 
lobbying disclosure act filings, consistent with how many other 
organizations on all sides of these issues report. In addition, 
we disclose our grassroots Federal lobbying and State lobbying 
expenditures on our annual tax return. We will continue to 
accurately and completely disclose these activities, as 
required by law.
    As we move forward, ACCCE will strengthen our commitment to 
a constructive, transparent, and authentic public policy 
dialogue that supports environmental progress, greater energy 
independence, and access to affordable, reliable energy to 
promote economic growth and prosperity.
    I look forward to answering your questions.
    [The statement of Mr. Miller follows:]

    The Chairman. Thank you, Mr. Miller.
    Our next witness is Mr. Jack Bonner, president and founder 
of Bonner & Associates.
    Thank you for coming, Mr. Bonner. Whenever you are ready, 
please begin.

                    STATEMENT OF JACK BONNER

    Mr. Bonner. Good morning, and thank you, Chairman Markey 
and Ranking Member Sensenbrenner, for providing me an 
opportunity to set the record straight on what did and what did 
not happen during this most unfortunate matter.
    As founder and president of Bonner & Associates, I 
personally take full responsibility for what happened, for the 
improper actions of our temporary employee who fabricated more 
than a dozen letters to Congress in the names of organizations 
and individuals. While we certainly did not authorize or 
condone his actions, we also did not prevent them.
    I want to take this opportunity to publicly apologize to 
the three Members of Congress who received the fabricated 
letters and, perhaps most importantly, to those organizations 
who were fraudulently used by our former employee.
    I also want to apologize to Hawthorn and to ACCCE. What 
this individual did was wrong, and we should have caught him 
before he perpetrated his scheme.
    In hindsight, it is obvious that our firm and others would 
have been better served if we had avoided hiring this 
individual or prevented his fraudulent acts. But it is also 
clear that this incident was an anomaly, the result of an 
individual who, from the day he showed up, intentionally 
disregarded our procedures and instructions and was determined 
to engage in fraudulent activity. Although we still do not know 
what fully motivated him, due to the serious implications of 
his actions, we referred the matter to the U.S. Attorney's 
    But let one thing be very clear: This improper activity was 
undertaken without the knowledge of anyone at our firm. It was 
the actions of one rogue temporary employee acting on his own 
against our company's policies and without the knowledge of 
anyone else at Bonner & Associates.
    Once we discovered the fraud, we took prompt action to 
notify our client and to immediately reach out to the 
organizations whose names had been used to apologize and 
explain what had happened. While we did attempt to contact 
congressional offices to which the letters had been delivered, 
I should have personally taken immediate steps to contact those 
    While this was a fraud perpetrated against our firm, the 
manner in which it was done has demonstrated to me the need to 
develop and implement, in every instance, a more robust 
internal control system, and that is exactly what we are doing. 
We have developed and implemented a five-point action plan to 
earn back our reputation.
    All five corrective actions have already been implemented. 
And they include:
    Action one: 100 percent call-back verification of all 
groups that have signed statements of support to elected 
officials before any letter is delivered.
    Action two: All temporary employees review and sign an 
ethics policy before their employment begins.
    Action three: All resumes of prospective temporary 
employees are verified by permanent Bonner & Associates staff 
before temporary employment begins.
    Action four: All new employees must complete an ethics 
training course and must pass an examination administered by 
permanent B&A staff to ensure the full understanding of B&A's 
ethics policies.
    Action five: B&A has retained an independent ethics adviser 
who is well-regarded as maintaining the highest standards and 
independence. The ethical standards adviser will review our 
policies and work with us to continue to improve our internal 
quality control system to the highest standards. I am pleased 
to inform you, sir, that Professor Dr. James Thurber, a leading 
expert in the field, has agreed to serve in this capacity.
    Let me now take an opportunity to explain the events 
surrounding the fabrication of these letters.
    On approximately June 10th, we were retained under a 
contract for $43,500 by a public affairs firm, the Hawthorn 
Group, to identify and attempt to solicit the support of 
veteran, minority, and senior organizations.
    One of the temporary employees we hired for this project 
was an individual responsible for the fabricated letters. His 
resume had appeared impressive and demonstrated bipartisan 
political experience and extensive grassroots advocacy.
    However, it is now clear that, on his very first day on the 
job, June 12th, this employee used fictitious names of officers 
and employees to generate five fabricated letters. And, over 
the next several days, he fabricated additional letters.
    When we discovered what had happened, our immediate 
reaction to this fraud was to advise our client, as well as to 
reach out immediately and apologize to the organizations whose 
names were used without authorization.
    On July 1st, we contacted offices of two Members of 
Congress who received fabricated letters. After numerous 
attempts and the intervening congressional recess, it was not 
until July 13th that one of our staff finally succeeded in 
directly speaking with the congressional staff of 
Representative Perriello and Representative Dahlkemper about 
this matter, although it appears that Representative Carney's 
office, which received one letter, was not contacted. As I said 
earlier, we should have immediately contacted all three offices 
and immediately apologized in person.
    Finally, while we take full responsibility for what 
happened and recognize there were quality control and human 
resources improvements that need to be made, we have learned 
that it is difficult to defend against a person bent on 
committing fraud. I also know that all of us who play a role in 
facilitating public participation in the democratic process 
bear an important responsibility to ensure that process is free 
from unethical behavior. Because I recognize how important it 
is for people to be encouraged to express their views and 
participate in debate on public issues, I am committed to doing 
everything I can to make sure that something like this does not 
happen again.
    Thank you for this opportunity to answer any questions you 
may have.
    The Chairman. Thank you, Mr. Bonner.
    [The statement of Mr. Bonner follows:]

    The Chairman. And our last witness is Ms. Lisa Maatz. She 
has served as the Director of Public Policy and Government 
Relations at the American Association of University Women since 
2003. The name and the letterhead of the American Association 
of University Women was misappropriated and used on one of the 
fraudulent letters.
    We welcome you. And whenever you feel comfortable, please 

                    STATEMENT OF LISA MAATZ

    Ms. Maatz. Thank you, Chairman Markey and members of the 
committee. I would like to thank you for conducting this 
investigation into fraudulent letters sent to Members of 
Congress during debate over the Clean Energy and Security Act.
    I am glad to be here today to address the troubling 
practice of astroturfing. What is astroturfing, you may ask 
yourself. Simply put, it is politically motivated public 
relations campaigns that try to create the impression of 
spontaneous grassroots engagement. Hence, the reference to 
    The goal of these campaigns is to disguise the efforts of a 
corporation as an independent public relations action. These 
well-funded activities masquerade as people-driven movements 
when, in fact, they are anything but. I know because I work for 
a genuine grassroots organization complete with community-based 
    Founded in 1881, AAUW has approximately 100,000 dues-paying 
members and 1,000 branches nationwide. AAUW has recently been 
affected by the worst form of astroturfing. Bonner & 
Associates, a grassroots lobbying firm hired by ACCCE, has used 
AAUW's good name in fraudulent letters to Congress.
    Ironically, energy policy is not even an area in which AAUW 
advocates. A Bonner employee resurrected a now-defunct 
Charlottesville branch, used the AAUW logo, and faxed and hand-
delivered at least one letter to Representative Tom Perriello 
of Virginia, urging a vote against the energy bill.
    According to press accounts, Bonner, Hawthorn, and ACCCE 
knew of the fraudulent letters at least 2 days before the House 
voted on the energy bill, but neglected to inform the affected 
offices about the letters until weeks later, well after a very 
close vote.
    The scapegoating of one employee is not necessarily going 
to solve this problem. Not only does AAUW join in the call for 
an investigation by the Department of Justice; we also 
encourage Congress to reconsider legislation to address this 
shockingly legal but unreported practice of astroturfing.
    In 2007, there were attempts to include grassroots lobbying 
disclosures in the ethics bill which would have required 
grassroots firms, such as Bonner, to disclose their lobbying 
expenditures and identify their clients. Unfortunately, this 
section was removed. AAUW urges Congress to revisit this issue 
in the light of these revelations.
    Our members are a conscientious, persistent, and outspoken 
lot, as probably one or more members of this particular 
committee, can attest. Perhaps the most poignant response came 
from Willa Lawall of Virginia. She wrote, ``As a former 
president of the Charlottesville AAUW branch, I was shocked to 
learn from Gwen Dent, our past president, that the cited letter 
used her home address without her permission and cited the name 
of our dear, lamented, longtime historian, Anne Waldner, who 
died before the cap-and-trade issue ever came up. So not only 
were Bonner & Associates engaging brazenly in theft of the AAUW 
logo, their theft of address and identity was grossly 
    So they used the address of one AAUW member and the name of 
another AAUW member, who happened to be dead, also from a 
branch of AAUW that was no longer in existence.
    One of the more disturbing elements of this mess was that 
Bonner never contacted AAUW directly. We confirmed with our 
Virginia State affiliate that they had been contacted by ACCCE, 
but since there is no longer a Charlottesville branch, our 
members were confused as to what was actually happening. When 
it was clear that there was no branch and that they were 
dealing with grassroots advocates rather than paid staff, 
Bonner and ACCCE should have immediately called AAUW's national 
headquarters. Unfortunately, they did not. Instead, like the 
NAACP, AAUW found out about our involvement in this situation 
in a way no one wants to hear such a news, in a newspaper.
    Because of our active membership, AAUW is respected in 
Congress. Perhaps this is why corporate lobbyists used our good 
name to try to unfairly sway the outcome of the energy bill. 
AAUW has a small team of ethical professional lobbyists that 
fight for our issues on Capitol Hill and in the administration. 
We approach our policy challenges as good, clean fights.
    I would like to note, as well, that objections to the 
practice of astroturfing and the fraudulent letters that 
resulted is not about partisanship. It is about something much 
more fundamental. It is about who gets heard in the halls of 
power. This is about the fact that we, as a real grassroots 
group, don't necessarily have the astroturfers' resources and 
corporate funding.
    According to media accounts, ACCCE spent over $11 million 
in lobbying in the second quarter of this year alone. That is 
on pace to spend roughly $44 million for the year. AAUW and 
similarly affected nonprofit groups spend a fraction of this 
    But what groups like us have always had is the honest, 
earnest voices of our members. When Congress receives a letter 
from our members, it is critical that they feel confident that 
they are being contacted by real people, committed to the 
mission of AAUW, not a phony who is trying to undermine the 
principles of our representative democracy. If corporate-driven 
astroturf campaigns start corrupting the integrity of that 
commodity, the power of constituent voices, what tools are 
concerned citizens left with to improve our communities?
    Quite frankly, it is possible that other unrelated, but 
just as fraudulent letters have been sent to the House and the 
Senate over the years. That is not a partisan issue, it is the 
reality, and it undermines citizens' confidence in their 
elected officials and their government. AAUW believes it is 
important to call attention to these unscrupulous practices in 
addition to protecting our good name.
    Mr. Chairman, I have a great job at an organization that 
has a worthwhile mission. We have worked for more than a 
century to build our reputation and keep our name untarnished. 
AAUW members have used their collective voices to break through 
many barriers for women and girls. The notion that someone 
would come along and co-op that name or attempt to harness that 
collective voice under false pretenses is a breathtaking and 
very personal deceit.
    I am pleased to be here today and to add our voice to the 
call for reform. I welcome your questions.
    The Chairman. Thank you, Ms. Maatz, very much.
    [The statement of Ms. Maatz follows:]

    The Chairman. We thank the witnesses for their testimony.
    The Chair will recognize himself now for a round of 
    Mr. Bonner, you learned of the fraudulent activity on June 
22nd or 23rd of this year, 4 days before we actually had the 
vote on the floor of the House of Representatives on the 
Waxman-Markey bill.
    Why didn't you take action before June 26, before the vote 
on the floor of Congress to let the Members of Congress know 
that the NAACP, that the University Women, were not in 
opposition to the clean energy legislation?
    Mr. Bonner. Mr. Chairman, I am personally very sorry that I 
did not immediately go up to the three Members involved, sit in 
their office until I was able to talk to somebody and tell them 
directly what had happened.
    We have put in place measures to make sure this never 
happens again. But should it ever happen again, whether I was 
asked by the client or anyone else, I should have been up 
    We were wrong not to be up there. I should have sat there 
and made sure that the three Members knew. We reached out to 
the organizations where--that were victims of this fraud to 
make sure that they knew about this, and we started that 
immediately, but the Members of Congress should have been 
    I take responsibility, sir, for not doing that.
    The Chairman. Now, why was it so hard for anyone who worked 
at Bonner not to meet with the Members personally, but just to 
make a phone call to let them know that you had identified the 
fact that the NAACP, that the University Women were not in 
    Those are not insignificant organizations in our country. 
That really does put a thumb on the scale against clean energy 
technologies, and word would spread on the House floor as to 
why particular Members might be considering opposing the 
    Why could a phone call not have been made from Bonner to 
those three Members so that they and their staffs would not be 
representing that these very distinguished organizations were 
in opposition to the legislation?
    Mr. Bonner. Well, Mr. Chairman, we should have done that, 
and we should have gone beyond the call, and I should have 
personally sat there to make sure the message got through. 
Regardless of how little or how much effort that would have 
taken, it should have been done, sir.
    The Chairman. Did you personally know that the vote was 
taking place?
    Mr. Bonner. No. I didn't know when the vote was taking 
place. I do know when we discovered the fraud.
    The Chairman. And you are saying that you just didn't have 
processes in place at Bonner to notify people when a fraud was, 
in fact, being perpetrated; and as a result, those extra 3 or 4 
days, the critical days before the vote, there was no 
notification of the Members of Congress that the NAACP was not 
in opposition?
    Mr. Bonner. Mr. Chairman, we are a grassroots firm; we are 
not a lobbying firm.
    But having said that, we should have found a way to make 
sure that the Hill was notified promptly by us immediately. We 
have put in place these five steps to make sure that that can't 
happen in the future, because no letter will go up to the Hill 
until we have another person at Bonner & Associates, a 
permanent staff person, has verified that that letter is 
legitimate at the 100 percent level. No letter to any elected 
official, Mr. Chairman.
    The Chairman. So you say that you didn't know when the vote 
was going to occur. But that was about as well advertised a 
moment in legislative activity as could possibly exist. A 
deadline had been set, we were going to have the vote before we 
broke for the 4th of July; and earlier in that week Bonner did 
receive the information that would have made it possible for 
those Members of Congress to know that these very distinguished 
groups had not, in fact, issued statements in opposition to the 
    So when you say you didn't know, what were the processes 
that existed inside of your company to ensure that when 
fraudulent activity had been identified, it would trigger an 
immediate rectification because it could have a profound 
negative impact on historic legislation passing through 
    Mr. Bonner. As I said, we are a grassroots firm, not a 
lobbying firm, so we weren't following precisely when that vote 
would occur. However, regardless of whether the vote was in 24 
hours or 3 weeks away, or whatever point in the future, I feel 
I personally should have gone up to the Hill and made sure that 
Members knew that, whether the vote was the next day or 2 weeks 
    The Chairman. Well, we have a letter here, which had been 
sent from your organization, from the NAACP saying to the 
Member of Congress: You are about to vote on important 
environmental legislation, the Waxman-Markey bill. And it is 
signed here by Sheila Dow, NAACP, Charlottesville.
    Now, you knew by June 22nd or 23rd that this was not 
accurate, and that was internal information inside of Bonner. 
So what happened? Why didn't Bonner make this public? Why 
didn't they correct this mistake? Why didn't you let 
Congressman Perriello know that this was not accurate?
    This is no insignificant group in Virginia in terms of its 
impact on the decisions made by a Congressman in terms of how 
they should be voting.
    Mr. Bonner. When we found, through our own quality control 
checks, that the fraud had occurred, we immediately fired the 
person involved and we immediately informed the client. We 
should have also immediately informed the Member of Congress.
    The Chairman. And why didn't you?
    Mr. Bonner. The reason we didn't is, we felt our first 
responsibility, a responsibility of our firm as a grassroots 
firm, was to get to the organizations involved in a very open 
way and tell them that we, Bonner & Associates, had made this 
mistake and that we apologize to these groups directly, and 
that we, as soon as we had found that this fraud had been 
committed by this temporary employee, fire that employee.
    And we should have also, as I look back on it, sir, and as 
I look forward to the future, should have immediately informed 
Congress of it at that moment.
    The Chairman. Well, again, these letters were targeting 
some of the swing voters on this issue. And all reports for the 
preceding 2 weeks were that this was going to come down to a 
small handful of votes, determining whether or not success was 
possible in passing the legislation.
    So the information that these Members of Congress had in 
their offices on the day that the vote was cast, June 26, 
Friday of that week, was that the American Association of 
University Women, the NAACP, veterans groups, were opposed to 
the legislation which, if they relied upon that, could have 
actually resulted in the defeat of the legislation.
    So, again, it goes back to the question of why didn't 
Bonner notify the Members of Congress that this information was 
inaccurate, that it had been manufactured, and that they should 
not be casting their vote based upon these misrepresentations?
    Mr. Bonner. Mr. Chairman, we should have done that.
    It wasn't done for any other reason than we should have 
done it and that our responsibilities were to make sure that 
the third-party groups, the community organizations who had 
this awful fraud perpetrated upon them, were informed 
immediately by us, telling them our responsibility, and Bonner 
& Associates' responsibility alone. This was something we were 
responsible for; and our employee did that and he shouldn't 
have, and we should have caught it. And we fired him.
    But I would say, from this experience, Chairman Markey, we 
would, going forward, immediately inform the Members of 
Congress. I have no knowledge of whether the Members were swing 
votes or not. We don't lobby; we just go and get advocacy work 
    The Chairman. Well, the reality is that they were, and the 
reality was that this was going to come down to a small handful 
of votes. And so miscommunication of information to these 
Members went right to the heart of our ability to have a debate 
on the facts of whether or not this energy legislation was good 
for the country or not. And so, again, organizations of this 
nature have a very heavy moral and political influence in our 
    So, Mr. Shelton, Mr. Bonner said that your organization, 
the NAACP, was notified as soon as possible.
    When were you notified? The vote was on June 26th. The 
fraud was identified on June 22nd or 23rd. When was the NAACP 
    Mr. Shelton. My office first heard about this on July 31st, 
which--and I run the Government Affairs office for the NAACP 
that oversees all government interactions between the NAACP and 
the U.S. Congress, and we did not hear from any outside 
organization. We heard from news outlets asking us what we 
thought about the fraudulent activities that had occurred.
    The Chairman. So Mr. Bonner, what do you have to say to Mr. 
Shelton about that long delay in notifying them that the good 
name of the NAACP had been used to attempt to defeat this clean 
energy legislation?
    Mr. Bonner. Mr. Chairman, on June 29th, one of my staff 
people had a very lengthy conversation, of which we have a 
record that the conversation took place, with the vice 
president of the Charlottesville NAACP, at which time we 
apologized for what we did. We informed the vice president of 
what went on, that Bonner & Associates was responsible for 
this, and we told her all about this.
    The Chairman. On June 29th, 3 days after the vote had 
    Mr. Bonner. Yes, sir.
    The Chairman. Now, what do you have to respond to that, Mr. 
    Mr. Shelton. It is outrageous that they would wait that 
long to try to correct the record on a process that is so 
sacred to our very democracy, sir. Very well indeed it is 
outrageous, and they should be ashamed of themselves for 
carrying on this kind of fraudulent behavior.
    The Chairman. Ms. Maatz, when did you find out that the use 
of your organization's name has been misappropriated and used 
to attempt to defeat the Waxman-Markey clean energy bill?
    Ms. Maatz. We actually at national AAUW found out even 
later than the NAACP did. It was the first week of August. And 
we found out as a result of a newspaper article from 
Charlottesville; it was literally something that came up on a 
Google search, believe it or not.
    The Chairman. So, Mr. Bonner, what do you say to Ms. Maatz 
in terms of that long delay all the way from June 22nd to the 
first week of August, and this organization, the American 
Association of University Women, still don't know that their 
name has been used to defeat clean energy legislation?
    Mr. Bonner. Mr. Chairman, what I would say to her is, we 
should have found the national organization immediately. The 
person--this temporary employee that did the fraud had actually 
made up a chapter that was no longer there; and we attempted to 
find that chapter in Virginia, and we didn't. We should have 
contacted the national immediately.
    When we talked on the phone--because the AAUW contacted us 
and I personally spoke and apologized for what happened and 
explained that Bonner & Associates was responsible and that we 
fired the person involved. But we should have gotten ahold of 
the national organization right away, and I apologize for that.
    We wouldn't do that again.
    The Chairman. Ms. Maatz, what is your response?
    Ms. Maatz. Well, I found it regrettable that I had to be 
the one to reach out.
    I do appreciate the fact that when I did, there was a 
conversation that was held. But there are a couple of things 
that I would question.
    Number one, as a grassroots lobbying firm, I find it hard 
to believe that they were not involved in the targeting of 
Members, because grassroots folks worth their salt do targeting 
in terms of figuring out who they need to spend their time on 
to try to influence votes.
    The other thing I would say is that not knowing when the 
vote is seems also a little disingenuous, because how could you 
know when to stop doing your grassroots advocacy work if you 
didn't know when the vote was? So it seems, again, there is 
some disingenuousness going on here.
    And for our members, quite frankly, it is outrageous. The 
fact that they used the name of a dead member, the fact that 
this was someone who--that particular branch, when it used to 
be in existence, was very highly regarded. You know, our 
members are incredibly distressed.
    One of the things AAUW relies on is not only our good name, 
but the fact that we have women who come up to the Hill every 
week that Congress is in session to talk to Members of 
Congress. And the fact that they now are worried in some 
respects that when they go into an office that someone won't 
believe that this is actually our position is incredibly 
distressing to them.
    The Chairman. My time has expired.
    The Chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. Well, all I can say is, Give me a break. That 
senior executives know about this defrauding Congress, but 
somehow, despite the fact that you are hiring lobbyists by the 
army-full you can't tell us until after the vote that there has 
been this defrauding going on. Give me a break.
    Mr. Miller, would you agree that your organization, on 
behalf of a part of the coal industry, is partially responsible 
for defrauding Congress in this context?
    Mr. Miller. Mr. Inslee, the investigation, the internal 
review done by Venable and overseen by former Attorney General 
Civiletti found without question that we did not have any 
knowledge and did not in any way direct that fraudulent letters 
be done.
    The investigation further showed, however, that our 
reliance on Mr. Bonner's firm was misplaced. We relied on him 
for basically three reasons for our failure to act before the 
    Number one----
    Mr. Inslee. Let me just for a moment, I am just trying to 
get to kind of ``yes'' or ``no,'' and then I will allow an 
explanation at the end. Do you think that your organization was 
partially responsible for defrauding Congress in this context?
    Mr. Miller. Fraudulent activity? No, sir, I do not believe.
    Mr. Inslee. Do you think you are partially responsible for 
misleading Congress in this context?
    Mr. Miller. I believe that our organization had an 
obligation. And now, based on 3 months of thinking about this 
issue every day, clearly we had a responsibility to draw a line 
at a certain point before the vote.
    Mr. Inslee. So the answer is ``yes,'' you were partially 
responsible for misleading Congress? Say ``yes'' or ``no.''
    Mr. Miller. We are partially responsible for the failure of 
affected Members to not be notified.
    Mr. Inslee. Well, let me suggest that this really is, in a 
bit, the tip of the iceberg because I think you are responsible 
in a lot of other ways as well. I am holding the talking points 
for ACCCE of phone calls that I am told were made, and it is 
about what you advised people to call and tell potential 
    Were you familiar with this text to be used in these phone 
    Mr. Miller. Mr. Inslee, I don't have a copy of the 
particular item that you have. I would be glad to take a look 
at it.
    Mr. Inslee. Well, it talks about--this is from committee 
staff. I will just read it to you. Because this is a whole 
'nother issue of misleading Congress, frankly, that goes beyond 
even misidentifying who was calling, because you paid an outfit 
to call and say this:
    Have the caller call a citizen and say, ``How much do you 
pay for electricity? What would you cut out of your budget if 
your utility bill went from `X' to,'' parentheses, ``double,'' 
parentheses, ``every month? Would you write a letter to help 
stop that from happening?'' Close quote.
    You hired an agency that was apparently calling citizens. 
And I will hand this document to you, and I am sorry I don't 
have it for you right now; I will just give you the whole 
document in a minute. But apparently you hired an agency to 
call people and effectively tell them that something was going 
on in Congress that has the potential of doubling their 
electricity, which is just wholly wrong and fraudulent.
    And this goes beyond simple misidentification of who is 
calling; it goes to a deeper issue as to what you are telling 
the citizens. And it is consistent with all of your other ads 
you are running in all of these other newspapers, trying to 
scare the bejesus out of citizens thinking we are going to be 
doubling electric bills as a result of Waxman-Markey. And this 
is a deeper defrauding of the people in Congress beyond the 
simple misidentification.
    And I would ask you to respond to that. I am going to ask 
staff to give you this and ask you and ask Mr. Bonner to take a 
look at this script.
    And, first, Mr. Bonner, tell me, is this an accurate 
depiction of the script that your callers used as part of this 
contract? I will hand it to you in just a moment here. Is that 
basically the script, Mr. Bonner, that your callers worked off 
of when you called people?
    Mr. Bonner. No, it is not the script that we used.
    Mr. Inslee. Are you familiar with that document?
    Mr. Bonner. Yes, it is--I am sorry--it is original talking 
points that we used in our training. When we do calls, 
Congressman, we don't read a script to anybody.
    Mr. Inslee. Let me get to the heart of this. This is a 
training document. You told your callers what to tell citizens. 
And in that document and in that training, you told them to 
tell the citizens that there was something going on, or 
potentially going on, that would end up doubling their 
electrical rates. Isn't that right?
    Mr. Bonner. I am reading it right now, Congressman.
    Well, it says, What would happen if their utility bill 
    Mr. Inslee. Right. And it is real clear that what you 
wanted to do and what this industry wanted to do is to scare 
the dickens out of voters, thinking that some bill was 
percolating back here that would double their electrical rates. 
Am I right?
    Mr. Bonner. What we wanted to do was inform citizens their 
electrical rates could go up.
    Mr. Inslee. You want them to think they were going to 
double. That is why you put it in your training document, isn't 
    Mr. Bonner. We said----
    Mr. Inslee. Why did you put ``double'' in your training 
document if that is not what you wanted your people to say when 
they called?
    Mr. Bonner. The talking points supplied by ACCCE were what 
we used as the model to talk--or supplied by Hawthorn were used 
as talking points to do that, to communicate what was going on.
    Mr. Inslee. Right. And what happened here is, Hawthorn, 
after getting their instructions from the coal industry, wanted 
you to try to convince citizens that there was a potential 
their electrical rates were going to double as a result of some 
legislation back here. Now, isn't that what happened?
    And I would really like to short-circuit this. Isn't that 
what happened?
    Mr. Bonner. The talking points that we train from do have 
the line in it, what would happen if their utility bill 
    Mr. Inslee. Right. And that didn't come from a figment of 
your imagination; that came from information from Hawthorn that 
got their information from Mr. Miller's organization. Isn't 
that your understanding?
    Mr. Bonner. Yes. Well, my understanding is, Hawthorn----
    Mr. Inslee. Thank you.
    Now, Mr. Miller, did your organization suggest to the 
Hawthorn organization that in their calls or in other 
information given to citizens that it would be discussed, a 
potential doubling of people's electrical rates?
    Mr. Miller. Never, sir.
    Mr. Inslee. Okay. So your testimony is that the Hawthorn 
administration apparently imagined this. Is that what happened?
    Mr. Miller. I don't believe so either, sir.
    And I would like to cite you to----
    Mr. Inslee. Well, if you can help us, where did this 
doubling--whose idea was it to try to scare the citizens into 
believing there is doubling using your money?
    Mr. Miller. I believe that came from Bonner internally. And 
I would cite you, sir, to the filing that the Hawthorn group 
made with the Select Committee on August 27th. One of the 
attachments to it is a full-page document that was under 
penalty of perjury what the Hawthorn group says that they 
delivered to Bonner & Associates to develop their work.
    Mr. Inslee. So you believe Bonner & Associates came up with 
this doubling, using your money; but apparently you didn't have 
enough good quality control in what you were trying to scare 
the citizens about to know that you were spending millions of 
dollars to try to convince the American public that there was a 
potential to double electrical rates. Isn't that what happened?
    Mr. Miller. We have never in the debate about the Waxman-
Markey bill ever intimated directly, indirectly, that there 
would be a doubling of rates.
    Mr. Inslee. You remind me of the guy who hired a hit man 
and said, Just take care of the problem; don't tell me whether 
you are using the knife or the gun.
    That is wholly irresponsible on your part not to give them 
and confine the information they were giving to the public. 
Don't you agree? Don't you believe that was wholly 
irresponsible by your organization?
    Mr. Miller. We provided to the Hawthorn Group a very 
detailed list of talking points and suggested activity.
    And, Mr. Inslee, this is critically important. Our 
organization has never opposed the Waxman-Markey bill. And in 
the directions that we gave to Hawthorn to provide to Bonner 
and for the Hawthorn Group to use with phone calls that they 
also oversaw, that we were seeking changes to the bill, 
particularly a limit on the price of emission allowances that 
they would be sold in order to hold down the price of 
    We have never opposed the Waxman-Markey bill. We were 
seeking changes to it. And the record, I think, very clearly 
shows that in regards to our filings before this committee.
    Mr. Bonner. Congressman, if I could.
    Mr. Inslee. Excuse me, Mr. Bonner. I want to make sure I 
understand Mr. Miller's testimony.
    You are telling us that--is it our understanding that you 
hired the Hawthorn Group? And was there any information you 
gave to the Hawthorn Group that you authorized them to convey 
to the citizens as to the amount of potential increases of 
their electrical rates?
    Mr. Miller. No. All it said--and I can quote from our 
filing with the committee yesterday to your interrogatories 
from last week.
    Their script that the Hawthorn Group used for telephone 
calls, for example, stated that ``The U.S. House of 
Representatives is set to vote soon on a climate bill to 
change--to reduce carbon dioxide emissions. Most everyone 
agrees the bill will increase energy prices.''
    And I believe, Mr. Inslee, from almost every analysis that 
has been done by the EPA and EIA and other government sources, 
it is clear that effective, strong climate legislation will 
increase to some degree energy prices.
    Mr. Inslee. So you are telling me you don't believe, given 
the context of what happened here, that you spent millions of 
dollars both on lobbyists and on a public--I won't call it 
information; I think it is a disinformation--campaign, that 
they were telling citizens that it would potentially double 
their electrical rates.
    You are telling me that you don't believe that you were at 
least somewhat irresponsible in not confining the information 
that was purveyed to the public in this regard?
    Mr. Miller. I believe the information that we gave to 
Hawthorn to provide to any subcontractors they used was 
entirely responsible.
    Mr. Inslee. So you are telling me you would do it again?
    Mr. Miller. No, sir.
    Mr. Inslee. Well, I want to make sure I understand this. 
You are telling me that you don't think your group acted 
irresponsibly when it spent millions of dollars that ended up 
trying to scare people into believing their electrical rates 
could double without telling them, No, you need to tell the 
truth? You would do that again knowing what happened here and 
not make sure that the people were told to tell the truth, not 
to try to scare them into this thing that their electrical 
rates were going to double?
    Mr. Miller. Part of the new code of ethics that we put in 
place codifies the rationale that we used in providing this 
information to Hawthorn. We are going to require now contracts 
not only between ACCCE and Hawthorn, but any contracts we have 
with subcontractors that require that those subcontractors use 
only materials that have been prior approved by ACCCE.
    Mr. Inslee. So you are telling me you won't do it again 
    Mr. Miller. We are taking extra measures to make sure that 
the legitimate public policy items and information and requests 
to make changes to legislation, rather than to vote against 
    Mr. Inslee. So I want to try to understand. You are not 
going to go out and tell citizens or try to make them believe 
that their electrical rates are going to double as a result of 
this legislation. Is that correct?
    Mr. Miller. ACCCE has never done that, sir, in regards to 
this legislation. And I cannot imagine that we would do so 
again unless--unless a truly valid analysis showed that 
whatever proposal was in place would, in fact, do so. But that 
is not the case here.
    Mr. Inslee. Well, we agree that there was some wrongdoing 
here. And the question is, what is penance?
    And I want to make sure I understand it. On June 25th, as 
we were preparing to look for the 218th vote to pass the 
Waxman-Markey bill, did your organization have lobbyists 
working Capitol Hill?
    Mr. Miller. We did have lobbyists working Capitol Hill to 
seek changes to the legislation, particularly for a safety 
valve to try to put an upper limit on the price of emission 
allowances to hold down electricity prices.
    Mr. Inslee. And pending that change, were you advising 
Members how you wanted them to vote?
    Mr. Miller. We were seeking changes--we did not. Let me hit 
that question straight on.
    We did not seek members voting ``yes'' or ``no'' on this 
bill. It was the judgment of our board that we should be 
continuing to try to seek changes not only for a safety valve, 
but other aspects of the bill that we thought needed to be 
changed. And at no time did our contract lobbyists or did we 
direct anyone on staff or any consultants that work for us to 
seek votes to oppose the Waxman-Markey bill.
    Mr. Inslee. Mr. Miller, we do agree, I think, that there 
was misfeasance or malfeasance here. And, again, I want to just 
briefly ask you what you believe the appropriate penance is 
when an organization does something wrong.
    And you have agreed they have done something wrong; the 
question is, how do you make it right? What is the appropriate 
    Right now your organization is running millions of dollars 
of ads suggesting that the current Waxman-Markey bill, I think, 
is not to your liking--the best way I can categorize it. You 
still have lobbyists on the Hill.
    Let me just suggest, don't you think as a first step that 
you direct your lobbyists to talk to, for instance, Senator 
Inhofe and tell him, Look, Senator, this is a real problem in 
America. Climate change has real, potential cataclysmic 
consequences. Our industry believes that we have to deal with 
this. We need to limit carbon dioxide gas, and you are simply 
wrong in saying that this is some fiction of rogue scientists.
    Now, don't you think that is a penance that your 
organization should do? Let's start with Senator Inhofe.
    Mr. Miller. Our organization and our board have very 
clearly stated for 2 years that we support a Federal carbon 
management program as a matter of Federal law and that a cap-
and-trade provision could be--is one option for that.
    So we clearly recognize that carbon management legislation 
and Federal legislation in this area is a desirable action by 
this Congress, so long as it is reasonable. And we take that 
message, Mr. Inslee, to Democrats, Republicans across the 
    And so, whether it is Mr. Inhofe or whether it is Members 
of the House, we are methodically working through the Members 
of Congress to say that our organization supports Federal 
carbon management legislation that could include a mandatory 
    Mr. Inslee. So, Mr. Miller, do you think it would be proper 
partial penance for your organization, when you leave this 
hearing, to call your lobbyists and tell them to go talk to 
Senator Inhofe and tell him that your organization believes 
that we have to limit CO2 because it has potentially 
catastrophic impacts on America, number one?
    And, number two, maybe run one ad saying that, that we have 
got to have in fact CO2 limitation or we are in deep 
    Now, don't you think those are two things that you ought to 
do and will do? I will just ask you simply.
    Mr. Miller. Yes. If I may address this----
    Mr. Inslee. Is that a ``yes'' to both?
    Mr. Miller. We will speak to Mr. Inhofe, as we will all 100 
Members of the United States Senate, that our organization 
supports Federal carbon management legislation and that a 
mandatory cap-and-trade can be part of that. We will do that.
    You have that commitment that we will touch base with all 
100. We are well on the path.
    Mr. Inslee. That is one.
    Will you run some ads in the Hill rags talking about the 
fact that we need CO2 regulation in this country as 
a lead title? Will you do that?
    Mr. Miller. Sir, I would be happy to submit to this 
committee copies of advertisements, print advertisements.
    Mr. Inslee. That's great.
    I will ask you one more question and then I will let you 
go. I have gone well over time. Thank you, Mr. Chair.
    Will you run an ad as partial penance for this 
transgression a thing that says at the top, We need 
CO2 regulation in America and we need it fast? Will 
you do that?
    Mr. Miller. We will continue to run ads. And I would 
suggest, sir, that if you have the full rank of ads that we 
have run this year, we have said that our organization supports 
Federal carbon management legislation and that we are working 
to make that legislation be correct legislation.
    Mr. Inslee. I don't know if that is a ``yes'' or ``no.'' It 
is the best I am going to get. I suggest you think about that. 
I think it would be the responsible thing for you to do.
    Thank you very much.
    The Chairman. The gentleman's time has expired.
    Ms. Maatz. If I could jump in here real quickly. I think we 
need to be real clear what happened. Basically, it was an 
argument about increasing the rate, doubling the rate, that was 
targeted in the districts of swing members, that was then 
targeted in terms of the organizations that were affected, that 
were forged, to African Americans who are discriminated in all 
sectors of society, to seniors who were fixed incomes, to women 
who make 77 cents on the male dollar, groups who are absolutely 
going to be scared by an argument that their electric rates are 
going to be doubled. And then those letters from groups that 
represent those constituencies were forged and sent to Members 
of Congress who were on the fence about this particular bill.
    I think that is something that you really need to take into 
account in the sense that this was calculated and this was 
deliberate. This was a strategy employed to try to influence 
Members of Congress from the very people who--their particular 
fraudulent argument was going to be the most persuasive with.
    The Chairman. We thank you, Ms. Maatz, for that.
    To the gentleman from Washington State, there are two roll 
calls on the floor, but I intend on returning after those roll 
calls to continue this hearing.
    Let me just follow up with what Mr. Inslee just said.
    Mr. Miller, your organization is one that has been 
advocating for funding for technologies that can put the 
pollution which is created from the coal industry--and, by the 
way, 40 percent of all greenhouse gases, all of this pollution 
comes from the coal industry. So, actually, if we can't solve 
the problem of coal and the role that it plays in creating this 
climate change, then we can't solve the problem.
    And so you and your organization have advocated for funding 
to put this pollution underground, to find ways of keeping it 
from ever going into the atmosphere. And that underground 
strategy is something that--is something that you have 
    But at the same time, you have lobbying activities which 
you fund, which is similarly kept underground. There are 
organizations that you hire that hire other organizations that 
then result in Mr. Bonner hiring temporary employees who are 
sending out information that says that there will be a doubling 
of electricity rates if the legislation moves forward, that 
there will be great harm that comes to minority groups, to 
women, to seniors in our country if this legislation goes 
forward. And that is part of the campaign as well.
    Well, there is a big difference between advocating for 
modest changes in legislation and sending out information like 
that that is then repeated by Senators and other Members as 
though it is true, when in fact the information that is 
developed all emanates from the coal coalition that hires the 
contractor that hires the subcontractor that hires the 
temporary employee that is then spreading that information to 
individual members.
    As Mr. Inslee is saying, they don't get the message that 
you support clean coal technology, that you want legislation to 
pass that effects that goal. You are sending out just the 
opposite message. You are saying that if this strategy is 
adopted, it will double the rates of electricity users in our 
country, which is completely false. Your advertising doesn't 
reflect that.
    The message that you sent either using this methodology, 
this subterranean, this underground methodology that you use to 
lobby Congress doesn't tell Members that, doesn't tell the 
public that. And your ads that are in public don't say that at 
all, as well. It makes it seem as though it is a very scary, 
expensive, dangerous prospect for the American economy and for 
these consumers.
    And so if you are stepping back, Mr. Miller, and you are 
looking at what happened here, you are saying the average 
person would just say, Well, that is coming from a very 
reliable source, from the coal coalition of our country, the 
source of electricity in my home, they are saying to 
themselves. And unless that misinterpretation, that 
misrepresentation is corrected, then they are going to assume 
there must be some validity. And the proof in that is that 
Senators and Members of the House of Representatives repeat it 
as though it is true.
    And so that has a profoundly negative impact on the 
legislative process. And ultimately it comes back to you, Mr. 
Miller, because you are the funding source ultimately for this 
message as it is transmitted to the American public and to the 
    So this is your moment. This is your opportunity here to 
make it clear that you are going to ensure that the positive 
message is out there and that you will correct the 
    As Waxman-Markey is evaluated by the Congressional Budget 
Office, by the Environmental Protection Agency, it is clear 
that it costs no more than a postage stamp per day for the 
public in order to implement it. But if people hear it will 
double their electricity rates, if people hear that it will 
have a profound negative impact on the economy, then of 
course--and using organizations like the NAACP, like the 
American Association of University Women or veterans groups and 
senior groups across our country, well, they are going to 
believe that this is accurate.
    So what do you have to say to us, Mr. Miller? How do we 
correct this?
    Mr. Miller. We correct this in a number of ways. Number 
one, in exchanges that we are having right now, I am trying to 
be very clear and accurate in regards to what we have said in 
our advertising and requests that we made for contacts to be 
made and suggestions for contacts to be made with policymakers 
that we, our organization, supports Federal carbon management 
legislation that could include a mandatory cap-and-trade; that 
that legislation needs to have key components to it, one of 
which are very strong measures to make sure electricity prices 
do not surge because of this; and that our advertising has said 
that, the direction that we have given to our consultants that 
Mr. Bonner's firm apparently, from what I am reading here, did 
not follow.
    Even, Mr. Markey, I would cite that on the day that the 
Waxman-Markey legislation passed out of the House Energy 
Committee, we issued a press release in my name, which I 
approved, which said we look forward to working with the 
Members of the House of Representatives, going forward; and at 
the end, we want to commend Chairman Waxman, Chairman Markey, 
Chairman Dingell, and Chairman Boucher for their leadership in 
making important changes to the discussion draft of this bill. 
We have been publicly stating that the bill needed changes, and 
we still believe that, as it has been used as a basis for much 
of the Kerry-Boxer bill, that needs changes.
    But our organization supports Federal carbon management 
legislation, one of the reasons being, as you correctly stated 
a few minutes ago, we will not solve the challenge of climate 
change globally unless there is an effective carbon capture-
and-storage technology program that spreads for broad-based 
commercial use around the world. And the sooner we can get to 
that, the sooner we will be dealing with one of the major 
challenges for climate change.
    So we are speaking for aspects of this very clearly and we 
will continue to do so.
    One change though, one reform in our code of ethics that 
our board will formally act on in about 3 weeks and that we are 
implementing now as an interim measure: We are going to insist 
in all of the contracts that exist that our consultants, our 
contractors, their subcontractors only use scripts that we have 
seen and absolutely approve.
    The Chairman. Mr. Miller, are you ashamed of how the 
coalition has been represented by Hawthorn, by Bonner?
    Mr. Miller. I used the word ``outraged'' on Day One. And I 
am outraged here that the clear direction that we provided 
Hawthorn that was then--according to the documents filed to 
this committee, then passed on to Bonner & Associates were not 
    The Chairman. I am going to take a brief recess right now, 
and we will return, Mr. Miller, so we can continue to have this 
conversation about the way in which the coal industry 
represents this entire debate to clean up our air.
    The committee will stand in recess for 10 minutes.
    The Chairman. The committee is once again called to order. 
We apologize to all of you. We had, as Members, to run over to 
the House floor to cast three votes, but I think we can have an 
uninterrupted period of time now to move forward.
    So, Mr. Miller, let me ask you this, when--again, just to 
recap--the fraudulent letters were sent out early in the month 
of June, 2009, and--on June 22 or 23, it was clear that these 
letters were fraudulent. But the vote was on Friday of that 
week, on June 26, so there was a 3- or 4-day period on which 
the Members of Congress could have been notified that the 
NAACP, American Association of University Women, veterans and 
other groups were not, in fact, signatories to these letters 
that were in opposition to the Waxman-Markey clean energy bill.
    When you did you find out, Mr. Miller? When did the coal 
coalition find out that these letters, these fraudulent 
letters, had been sent out?
    Mr. Miller. In the evening of Wednesday the 24th, I 
believe, of June, the Hawthorn Group called our senior vice 
president for national affairs and informed him that Mr. Bonner 
had contacted Hawthorn to say that there were some fraudulent 
    The Chairman. Now is your senior vice president for 
national affairs, was he the person coordinating the campaign?
    Mr. Miller. No, he is not. That is our senior vice 
president for communications.
    So the Hawthorn folks--apparently the examination that 
Venable did showed that the Hawthorn Group tried to reach our 
senior vice president of communications first, then called our 
senior vice president of national affairs, who then called me 
the morning of Thursday, June 25--so the day before the vote.
    The Chairman. So--the vote occurred on Friday evening, so 
as of Thursday morning now you know personally----
    Mr. Miller. Yes, sir.
    The Chairman [continuing]. That these letters are 
fraudulent, that they had been sent to Members of Congress who 
had been identified as key swing votes on the bill.
    And what did you do at that time, Mr. Miller?
    Mr. Miller. I discussed this with our senior vice president 
of communications because the communication that came to us 
from Hawthorn was that the Bonner firm wanted to know if it was 
okay to contact the Members of Congress and the local 
organizations. And my direction to our senior vice president of 
communications, who then made that very clear to the Hawthorn 
Group, was, Absolutely, and in fact, that we demanded that they 
do so immediately.
    That has also been verified by the examination that the 
Venable firm did, that we were very clear in our instructions 
to Hawthorn; and, in fact, based on their discussions with the 
Hawthorn folks that they imparted those directions to Mr. 
Bonner that this notification of the Members of Congress and 
the local organizations needed to be made immediately.
    The Chairman. Now let me ask you this, Mr. Miller: On that 
Thursday, the day before we cast the vote, amongst your major 
funders are the Southern Company, Arch Coal, Peabody Coal. Were 
they told by any of your employees at the coal coalition that 
this fraud had been perpetrated?
    Mr. Miller. No, sir.
    The Chairman. So on the day before the vote, the Peabody 
Coal Company did not know about this?
    Mr. Miller. That is correct.
    The Chairman. And did your lobbyists for the coal coalition 
know about this?
    Mr. Miller. No, sir.
    The Chairman. So you did not tell your lobbyists, you did 
not tell your chief funders that this had occurred?
    Mr. Miller. That is correct.
    The Chairman. And did you do any follow-up to make sure 
that your instructions, that the Members of Congress be told 
that this fraud had been perpetrated, had occurred and that 
they should know that these letters were, in fact, fraudulent?
    Mr. Miller. Mr. Chairman, I was so convinced that because 
the Bonner folks had found the letters and had voluntarily come 
forward to say, We have found these, we found these letters, 
that it was in their personal interest, their company's 
reputational interest, to address this issue; and that they had 
volunteered to--``We will go deal with this immediately''--I 
was convinced that their voluntary actions coming to the 
Hawthorn Group and stating the problem and stating their desire 
to address that problem, that I was convinced that they would 
do so.
    The Chairman. But can you understand, Mr. Miller, how 
somebody looking at this might be a little bit incredulous?
    Mr. Bonner has testified that he was paid $43,000. The 
Hawthorn group, in turn, was paid millions of dollars and had 
been contracted by you for the preceding 8 years with millions 
and millions of additional dollars that you had paid them.
    And yet on top of that, the coal coalition was trying to 
kill the Waxman-Markey bill on Friday; and that this multi-
multi-million dollar effort to kill Waxman-Markey was funded by 
Peabody Coal, by Arch Coal, by the Southern Company, by other 
entities that were your principal funders, and it was all 
towards the goal of getting these swing votes on Friday to vote 
``no'' on the bill.
    So it seems hard to believe that being notified that this 
had happened, that this fraud had been perpetrated, was 
delegated, on the day before the vote, to Hawthorn; and then 
you assumed that Mr. Bonner, who had just been hired a couple 
of weeks before--this wasn't his issue, his passion, he was 
being, you know, basically, hired for $43,000 to do some 
    So it comes back to you, Mr. Miller. You are kind of giving 
us the Sergeant Schultz defense here, ``I see nothing, I know 
nothing. I instructed that Hawthorn move on, I assumed,'' you 
say, ``that Mr. Bonner then acted.''
    Well, you know, we are coming down--we are in a situation 
here where that is putting a lot of responsibility on someone 
that you had only hired 2 or 3 weeks beforehand who had, in 
turn, hired temporary employees.
    I think it comes back to you, Mr. Miller. I think it comes 
back to what the objective was on the most historic energy and 
environment bill ever on the floor of the House of 
Representatives, that your organization had raised millions and 
millions of dollars to try to defeat.
    And I think that your responsibility--I will put it right 
on your shoulders. Your responsibility was to ensure that the 
Members of Congress knew that this information was fraudulent, 
or other people in--your lobbyists, your communications people, 
these are the high-paid people. $43,000 to a subcontractor, it 
seems to me, is not the place where this responsibility reposes 
to ensure that--the NAACP, the American Association of 
University Women, veterans groups, senior organizations across 
the country have had their good reputations absconded with by 
your coalition.
    So what responsibility, Mr. Miller, do you think you 
shoulder now in retrospect? Because I am putting it on you, 
not--and I am not going to allow you to say, you assumed that 
it would be in Mr. Bonner's best interest to clarify this, 
because he is very far down this communications food chain.
    Have you had enough time here to examine whether or not, in 
your own opinion, you did not do the job you should have done 
to make sure that this was corrected in the minds of these key 
Members of Congress before they cast a vote?
    Mr. Miller. Mr. Chairman, I think there were two aspects of 
your question. One was, what was the motivation here, what was 
the goal? And let me reiterate.
    Our board has directed us to support Federal carbon 
management legislation and, in particular in regards to the 
Waxman-Markey bill, to make changes to it, not to defeat it. 
There is no accurate example anywhere, because it just doesn't 
exist, that our organization opposed the Waxman-Markey bill 
before this vote took place either before the committee or on 
the House floor.
    Now, as to my personal responsibility here, Mr. Chairman, I 
can tell you this literally, and not figuratively, a thousand 
times over the last 3 months I have thought about what I should 
have done differently, not just my colleagues at ACCCE or our 
consultants. And I will tell you that based on what I know now, 
I would have drawn a line on a particular hour if Mr. Bonner 
had wanted to make these contacts. I would have drawn a 
definite line that said, After this hour, if I don't have 
conclusive proof that these contacts have been made both to the 
Members of Congress and the local organizations, that I will go 
to the halls of Congress and I will go pass a note to whomever 
I have to at the staff level to make sure that the affected 
Members know this, that I send a fax or whatever I have to do 
to make sure that that happens.
    The Chairman. I don't accept, Mr. Miller--I don't accept 
the fact that you are arguing now that you did not oppose this 
    We have an e-mail here from Hawthorn to Bonner. And the e-
mail says, ``Okay, I now have the targets, and we're ready to 
go in the following districts with vets, seniors, 
minorities''--any combination you think you can get. ``Just 
need a few. You define for me, but I am thinking, you know, 
five''--I guess letters--``per district.''
    But then, as you look through the seven target Members, 
next to one of the names, Hawthorn is saying to Bonner here in 
the e-mail, ``He's a potential probable `no' vote on here, so 
we are doing a little more intel to determine whether or not to 
keep him on our target list.'' In other words, if he is already 
``no'' on the bill, then why spend money on him? Why spend 
millions of dollars from the coal coalition on him?
    So the very e-mail that is being used to target all these 
Members, seven Members there 2 weeks before the vote, is to get 
a ``no'' vote. And so that is what the coal coalition was 
doing. Peabody Coal, Arch Coal they didn't want a ``yes'' vote; 
they wanted a ``no'' vote on this bill.
    They are paying you your salary. They have got a coal 
coalition put together to defeat Waxman-Markey. Their e-mail 
makes it clear they are targeting Members that might 
potentially vote ``yes,'' but as soon as they go ``no,'' then 
take them off of the list.
    So I am having a hard time, Mr. Miller, in kind of parsing 
your sentences and understanding how you can possibly contend 
that this whole operation wasn't intended to defeat Waxman-
    Mr. Miller. Sir, I will be going back to the submission 
that the Hawthorn Group made on August 27 to this committee and 
the attachment to this, which has an exact copy of the 
information that we agreed to with the Hawthorn Group, that 
they say they passed on to Bonner, regarding our position here. 
And it states very clearly that we are here to--in this 
process, to make changes to the bill.
    And now, you specifically--and particularly in regards to a 
safety valve that would put an upper limit on the price of 
    The Chairman. Here is the problem we have, Mr. Miller. 
Hawthorn has been working for you for 8 years. You have given 
them millions and millions of dollars to be your principal wing 
of communication in order to affect legislation; and you are 
telling us that in the final week before the most important 
vote on energy legislation that could affect the coal industry 
that they are wrong in saying that trying to get a ``no'' vote 
is the key goal here and that, as the list is being sent on to 
Mr. Bonner, that is not the objective. And I just have a hard 
time believing it, Mr. Miller.
    It seems to me that you were trying to kill the bill, that 
Peabody wanted the bill killed, that Arch wanted the bill 
killed, and that this was the message that got sent out. And 
that is what translates into these letters over here that I 
have put up on the easel so that the people here in the hearing 
room can see it, that these letters reflect a desire to 
communicate with voters, with Congressmen, that their 
electricity rates will be doubled, that it will have other 
horrific consequences for our country.
    And they are invoking the names of groups that represent 
the poor people in our country, seniors in our country, 
minorities in our country; and it seems to me that the real 
goal that you had at the end of the day was to kill the bill 
and that what you are sitting here trying to argue is that you 
have plausible deniability because you assumed that when you 
told Hawthorn, that Hawthorn would tell Bonner--who only got 
hired 3 weeks before, and a day later is hiring a temporary to 
start to develop letters--that somehow or another that would 
get passed through, down through the food chain, beginning on 
Thursday, the day before the vote.
    So none of these people would be in trouble right now if it 
all had been corrected on Thursday. We wouldn't be here, huh?
    So it comes back to you. And what happened in headquarters 
as you are getting this information, the list is narrowing, 
it's getting smaller and smaller, the vote is obviously getting 
closer and closer. So these key Members will decide whether or 
not your agenda to defeat the legislation--because this e-mail 
makes it clear that was the goal--is going to be successful.
    And so, it comes back to you again, Mr. Miller, and the 
people who fund your organization. That was what you were 
trying to do; and this fraudulent activity was in your hands 2 
days before the vote. And you had a chance to clarify it, and 
you did not.
    Mr. Miller. Is there a question there, sir?
    The Chairman. I am giving you a chance to say, You are 
    Yes, I am giving you a chance to say, You are right, and I 
am ashamed that we did not correct it when it came to 
headquarters, since our whole goal in this effort was to affect 
swing Members of Congress that we knew that we had the 
responsibility, that we couldn't delegate it and then have it 
redelegated again and then have it redelegated down to a 
temporary employee; that we, as the coal coalition, as the 
organization representing all of these companies that were 
giving us millions and millions of dollars, that we had the 
    Yes, there is a question there.
    Mr. Miller. Yes, we definitely had the responsibility as I 
said in my opening statement and I have said a couple of times; 
and I am profoundly disappointed that we did not do that.
    And we have--in your new ethics code we have a requirement 
that any time we have anything that is untoward that we can't 
verify within 24 hours, we are required to notify the Member.
    But, Mr. Chairman, I must respectfully say again, these 58 
letters that were generated and sent in by Bonner to Hawthorn 
are a very, very small part of the grassroots, legitimate 
grassroots program we had.
    One of the things we filed with this committee in our 
submission to you yesterday was the telephone scripts that we 
used, and that we generated thousands--made opportunities 
available for thousands of constituents to touch base with 
their Members.
    And if I might just take a few seconds to quote, 
``America's power army supports the timely adoption of 
legislation that reduces carbon dioxide and other greenhouse 
gas emissions, protects consumers from unnecessary increases in 
energy costs, promotes energy independence and encourages the 
development and deployment of cleaner technologies''--
underlined in the text. ``This climate bill needs changes to 
make sure all that happens. One of the most important changes 
would be to protect consumers, is to put a limit on the price 
of emission allowances.''
    This is what thousands of telephone calls are--we encourage 
folks to say in thousands of telephone calls to targeted 
Members, never to just vote ``no'' on this bill, but to make 
    And Mr. Chairman, you and others, Mr. Waxman and others on 
the committee, were working diligently in the hours right up to 
the vote, seeking changes to the bill to secure votes, because 
it was not clear at all until the day of the vote that there 
would be enough votes to pass.
    And so we were very clear that the policy situation in 
place here made it possible for additional changes to be made 
in that legislation.
    The Chairman. I am going to recognize Mr. Inslee.
    All I can say to you, Mr. Miller, is that it was in the 
interests of the coal coalition for these Members to think that 
the NAACP, veterans, seniors and women's groups were opposed to 
the bill with 48 hours left to go; and that you had a chance to 
clarify it, but your goal was to defeat the legislation. And 
that is why one of these Members was taken off the list, 
because he was already a ``no'' vote on the bill on Waxman-
Markey, and so the targeting would go for the other six 
    And so all I am saying to you, Mr. Miller, is that when 
interests and opportunity coincide, you wind up in a situation 
where those who had an opportunity to stop and to clarify, 
create a delegation process that may or may not be completed 
before the vote would be taking place; and that you, as the 
head of this organization, and the companies that you are 
representing, had a responsibility to clarify--a far, far 
greater responsibility than the temporary employee, than Mr. 
Bonner, than the Hawthorn Group had.
    This was your plan. This was your organization. Everyone 
else was hired. And it is clear that the objective was to kill 
the bill. And that was what was in question at that time.
    So I just have a hard time in accepting your explanation, 
because I think that 24-hour, 48-hour delay was just enough to 
perhaps contribute to your victory in defeating the 
legislation. And therein lies the real problem here where it 
keeps coming back to you.
    Let me conclude there and turn to the gentleman from 
Washington State.
    Mr. Inslee. Well, it is clear after the chief executive 
officer of the clean coal coalition learned that the Congress 
had been defrauded that you knew you only needed to keep this 
silent for about another 48 hours to try to maybe pick up a 
couple more critical votes, because you were looking for votes 
under your designation to change the bill under the fact that 
it wasn't going to change to kill the bill, and all you had to 
do was keep this fraud quiet for about another 48 hours.
    So I want to ask about your participation. Your entire goal 
of your organization is to influence Congress; is that right?
    Mr. Miller? Your entire goal as an organization is to 
influence Congress; is that right?
    Mr. Miller. We do work at the State level. We do regulatory 
matters. We do general education to the public. So direct 
Federal lobbying has, in fact, only been part of our portfolio 
since April 2008 over the 16-year history of the organization.
    Mr. Inslee. What I want to get at is, this isn't some 
peripheral responsibility, this is the big enchilada, the major 
leagues of climate change legislation. And on June 25, you 
would describe it--your highest priority was to get Congress to 
do your bidding; wouldn't you say that is correct?
    Mr. Miller. Our clear direction from our board was to seek 
the adoption of Federal carbon management legislation that 
could include a mandatory cap-and-trade program so long as it 
adequately met a number of principles that we had publicly been 
articulating for well over a year.
    Mr. Inslee. I am just trying to get at your individual 
thinking on June 25. The hottest thing on your plate on June 25 
was trying to influence Congress on the Waxman-Markey bill. It 
wasn't worrying about the overhead of your computer system in 
Dubuque or something; isn't that right?
    This was the hottest thing on your personal agenda. It was 
your whole reason for getting up in the morning that day, 
wasn't it?
    Mr. Miller. The highest priority of that particular day was 
to continue to seek changes to the Waxman-Markey bill with a 
particular focus on trying to get----
    Mr. Inslee. That is where I am getting at. So that day you 
knew that Congress had been defrauded, you had paid lobbyists 
physically present on the Hill trying to influence this 
legislation; and instead of picking up the phone to call your 
lobbyist who is under your direct control or sending them an e-
mail telling them to get to Representative Perriello's office 
and everybody else that had been defrauded as their first order 
of business that morning, instead of doing that, your testimony 
is you passed it off to some subcontractor and told him maybe 
they should talk to the people.
    Is that your testimony?
    Mr. Miller. No. It is not my testimony.
    We didn't say ``may'' do this. We said----
    Mr. Inslee. You said ``do this''? Excuse me.
    Mr. Miller. We said ``do this now.''
    Mr. Inslee. Did you say tell them to do that by 10 o'clock 
that morning?
    Mr. Miller. We did not. We said to do it immediately and 
urgency was there.
    And also, again, Mr. Inslee, I would direct your attention 
to the submission of the Hawthorn Group on August 27 where they 
say and I quote, ``After discussions with ACCCE, Hawthorn 
directed Mr. Bonner on the morning of June 25 to immediately 
contact Members of Congress and organizations, and Mr. Bonner 
agreed to do that.''
    Mr. Inslee. And according to Ms. Hammelman of the Hawthorn 
company, the conversation with your agency did not include a 
specific discussion or instruction to make contacts before a 
day certain as the timing of the vote on the Waxman-Markey bill 
was uncertain. That was her testimony; I will just put that 
into the record.
    So, let me just ask you, if this were a criminal--if there 
were a criminal statute that says you can't defraud Congress by 
conveying information under a phony or fictitious name without 
authorization to do so, if that were a criminal statute, do you 
think that might have focused your mind a little more on making 
sure that you did not allow this fraud to continue?
    Mr. Miller. I am not sure, sir, whether it was a criminal 
statute or anything else.
    Mr. Inslee. We are trying to figure out how we stop this 
from happening again.
    If there were a criminal statute and you were aware of 
that, do you think you might have been a little more prompt in 
notifying the affected Congressman of this fraud?
    Mr. Miller. I don't know. I never, criminally, really 
considered that question since I don't think there is one.
    But in any regard, as I have said before, we--in 
retrospect, I clearly recognize the responsibility and would 
absolutely do it differently myself.
    Mr. Inslee. You still even as of this day haven't notified 
the victims of this fraud--of the fraud, have you?
    Mr. Miller. That is not true, sir.
    Mr. Inslee. Let's find out about that.
    Mr. Bonner, we have this telephone training memo of how you 
trained your telephone callers. And it basically instructed 
them to call people and tell them that your electrical rates 
could double because of some pending legislation in Congress. 
We went through that discussion a little bit later. You have 
that document in front of you.
    Have you called the people who were called as a result of 
that fraud and told them that they were the victims of 
    Mr. Bonner. First of all, Congressman, the document that 
you showed me was an early training document that we had used. 
It was subsequently not used, I believe, in what we actually 
talked to people about.
    The other thing, sir, is that if you look at the letters 
themselves, up on the board there that the chairman referred 
to, all of those letters talk about an increase in costs to 
consumers. It doesn't quantify it. And I might also add those 
letters don't urge opposition to the bill either.
    Mr. Inslee. So you are testifying that this document was 
never used, the one that you are looking at--or, by the way, 
Exhibit A?
    Mr. Bonner. The talking points was part of our early effort 
to refine what we were doing.
    Mr. Inslee. Did that document--was that used in training 
any of your callers ever?
    Mr. Bonner. I would have to check and get back to you with 
a precise answer on that.
    Mr. Inslee. So it may or may not have been; is that what 
you are telling me?
    Mr. Bonner. I am telling you I am not sure.
    Mr. Inslee. Okay. Well, then, it is clear then that if it 
was used, which you have not investigated, you haven't gone 
back to try to clarify that with the people that your folks may 
have called; is that correct?
    Mr. Bonner. What I do know is that when our people called 
and they had the discussion with constituents, they--if the 
constituent group was interested, we then sent them the letter 
that you have seen; and the letter itself has the information 
in it that I just referenced.
    Mr. Inslee. Okay. We have your answers to interrogatories 
that were posed to your organization; and an answer was 
prepared on Akin Gump stationery, and it said, Answer No. 6: 
One page of talking points was prepared to guide the temporary 
employees in their calls to third-party organizations. The 
talking points are attached here at Tab A.
    Now let's get this straight. Is the document before you, 
Tab A, which your interrogatories answered as saying being the 
talking points used to guide, quote, ``the temporary employees 
in their calls to third-party organizations,'' close quote? Is 
the document you are looking at Tab A?
    Mr. Bonner. I am sorry, sir?
    Mr. Inslee. Is the document that was handed to you Tab A? 
That is what you sent to us.
    Mr. Bonner. Right. That you handed me, right.
    Mr. Inslee. Right. So I want to make sure you understand, 
your organization, your counsel on your behalf----
    Mr. Bonner. Right.
    Mr. Inslee. We, the committee, asked you a question about 
this. And what you told us, you said, quote, ``One page of 
talking points was prepared to guide the temporary employees in 
their calls to third-party organizations.''
    The talking points are attached here at Tab A?
    Mr. Bonner. Yes, sir.
    Mr. Inslee. Now I want to make clear, so that everybody 
understands, you told the committee staff--and I don't know if 
this was under oath or not, but you told the committee staff--
that you had a talking point memo; you used it to train your 
employees in their conversations with third-party 
organizations. And that document makes reference to a doubling 
of electrical rates.
    Now isn't that the situation here?
    Mr. Bonner. Yes, sir. The submittal that I believe you are 
quoting from, the August 12th submittal from Akin Gump, our 
representative law firm, says that the talking points were 
prepared to guide temporary employees.
    And so, sir, what I am saying is, I don't know and we 
certainly will get back to you whether that was used or not.
    But what I do know as a matter of fact is, that went to all 
the groups, all the 50--all the 43 groups that wrote, that were 
legitimate, as well as the fraudulent letters, all did not 
contain--none of them contained any reference to a doubling----
    Mr. Inslee. That is great. I am not asking you about the 
letters. I am asking about the phone calls.
    We asked you what you used to train people. You sent us Tab 
A. It said--it made reference to doubling electricity. You 
haven't sent us any other, Tab B; you haven't sent us any other 
training document, have you?
    Mr. Bonner. Well----
    Mr. Inslee. Just answer it ``yes'' or ``no.'' We have 
limited time here.
    Mr. Bonner. I am trying to give you the best answer I can, 
    Mr. Inslee. Let me just ask you, did you send us any Tab B, 
C or D of any training documents?
    Mr. Ross. Mr. Chairman, if Mr. Inslee wants to ask----
    The Chairman. Could you identify yourself?
    Mr. Ross. Yes, I am Steven Ross from Akin Gump. If you are 
asking a question about the letter that we wrote, we will be 
happy to respond. I don't think it is fair to ask Mr. Bonner, 
who is not the author of that letter about that kind of 
    Mr. Inslee. Let me just ask you, you are Mr. Bonner's 
attorney, correct?
    Mr. Ross. Correct.
    Mr. Inslee. So let me ask you, did you send us any Tab A, 
B, C or D of any other training document, other than what was 
referenced in your letter of August 12, 2009?
    Mr. Ross. If you look at our letter, I think we describe it 
as a document we prepared----
    Mr. Inslee. You are a lawyer. You should know it helps to 
answer the question.
    Did you, sir, send us any Tab A, B, C or D of any other 
training document other than Tab A that made reference to 
doubling electrical rates? That is a simple ``yes'' or ``no.''
    Mr. Ross. No. There is no other tab.
    Mr. Inslee. Thank you. That is all we need, sir. I am going 
to ask Mr. Bonner a question.
    Mr. Bonner, your attorney, when we asked you--and it 
shouldn't take this long to get to the bottom of this; and if 
you could answer the questions, it would hurry it up.
    We asked you what you told people. You told us you had a 
training document. It made doubling electricity part of the 
discussion, and you did not provide us any other training 
document other than that one; is that correct?
    Mr. Bonner. What is correct is what Akin Gump submitted to 
you, as Steve Ross just told you. We are prepared to give you 
further information, as you would like.
    Mr. Inslee. Now, it appears from this, to me, highly likely 
under these circumstances that at least some of your employees 
called people up and tried to scare the dickens out of them, 
telling them that there was a potential that their electrical 
rates were going to double as a result of some legislation.
    Now, have you tried to find out who was called and told 
that so that you can make that right and let them know they 
were defrauded about that misstatement?
    Mr. Bonner. What I do know they were all told was--because 
it is what was put in front of them in writing so that is how I 
am sure that it happened--was that their cost of electricity 
could go up; and that they were, as I wrote in the letter, 
opposed to unaffordable increases in electricity.
    We--and that is what is in the letter.
    Mr. Inslee. So, Mr. Miller, having heard of this, that the 
people that you paid, according to their lawyer, used a 
training document to train their people to tell citizens of 
this country that their electrical rates were going to double 
potentially if this legislation passed.
    Have you taken any action to fix that misrepresentation 
that took place at least at your initiation?
    Mr. Miller. First of all, we didn't pay Hawthorn--Bonner, 
and we are not going to.
    But secondly to your question, the first week of August, 
after this story broke and we realized that perhaps not all of 
the local organizations had been contacted, but whether they 
had or hadn't, our staff contacted each one of these affected 
organizations, personally, with phone calls. The only one that 
we were not able to contact directly was the gentleman with the 
Albemarle Charlottesville chapter of the NAACP so we sent a 
Federal Express letter to him, a letter of apology, for which 
we have received that it was received.
    So we absolutely expressed our deep apology to them for 
what had happened. We couldn't apologize for the doubling 
number here because the first time that we knew about that--or 
we could have later on, I suppose, but we didn't know anything 
about the fact that the Bonner folks may have used this 
doubling thing until we just recently have seen the 
    Mr. Inslee. So are you going to try to cure that 
misrepresentation now with the people who were given that 
    Mr. Miller. I am absolutely happy to.
    Mr. Inslee. What are you going to do about that?
    Mr. Miller. Well, a second time, I am happy to communicate 
with them orally and/or in writing to say if they received from 
representatives of Bonner & Associates a representation that 
under the Waxman-Markey bill, the electricity rates will 
double, that is not our--that has never been----
    Mr. Inslee. I am not talking about just these people that 
wrote letters falsifying the NAACP. I am talking about the 
people, that could be thousands of people, that Mr. Bonner's 
organization called and tried to defraud them into thinking 
their electrical bills were going to double as a result of this 
legislation. I am talking about those people that got the 
    What are you going to do to tell those people that they got 
a load of bunk from this organization using your money? What 
are you going to do about that?
    Mr. Miller. The investigation that Venable did showed that 
of the 58 letters that Mr. Bonner's firm obtained, that 44 of 
those were legitimate letters that these entities submitted, 
    Mr. Inslee. Mr. Miller, I am sorry to interrupt. I don't 
like to interrupt witnesses. But you are just not answering the 
    I want you to listen to my question.
    Mr. Miller. Yes, sir.
    Mr. Inslee. What are you going to do about the people that 
Mr. Bonner's organization apparently--or probably, I believe--
or may have called and told that their electrical rates may 
double, fraudulently using money that in one way or another 
came from you? What are you going to do about that 
    Mr. Miller. I would be happy to send a letter to each 
organization that Bonner & Associates reached out to as a 
follow-up to this hearing to say to them that if, in fact, 
someone on behalf of Bonner & Associates said that their 
electricity rates would double here, that because of the 
Waxman-Markey bill, that that is not a position that ACCCE has 
ever taken.
    I am happy--all I know about are the 58 organizations where 
letters came from. I don't know how many others were called.
    Mr. Inslee. Would you favor me with a copy of those letters 
when they go out, please?
    Mr. Miller. Absolutely. Absolutely.
    Mr. Inslee. Thank you. Because I think you need to start 
sharing that information with Members of the U.S. Senate. And I 
will tell you why.
    Our Nation is involved in a great discussion about how to 
deal with this problem of CO2 in the atmosphere. I 
think there are some ways that the coal industry can play a 
productive and positive role in that discussion, including 
advocating for research for ways to sequester CO2, 
research that I have wholeheartedly supported and voted to put 
$1 billion a year in for research in the hope that we can find 
a way to sequester that CO2.
    But this participation of your organization while the 
Senate is debating this issue while you have let this stand, 
you should make a full court press to go over and tell every 
Member of the U.S. Senate, this is not going to double people's 
electrical rates, you know it is not going to double electrical 
rates, you are sorry that you attempted to defraud--you didn't 
attempt, but somebody using your money attempted to defraud 
people to that effect, and you don't want them making a 
decision based on that fraud.
    Now, I think you should do that with Members of the U.S. 
Senate very specifically and personally by you, the guy who is 
responsible for part of this. Now, will you do that?
    Mr. Miller. I am not certain that I can personally see all 
100 Members, but I will tell you and the other members of the 
committee that we will be extremely responsible; and any 
assertions that we make here in regards to costs that we will 
share with Members of the United States Senate and subsequent 
discussions with Members of the House that there is clearly a 
range of belief here on what these price increases may be.
    And, Mr. Inslee, the price increases that are going to take 
place here will widely vary depending on what kind of 
provisions are in the bills. Will there be a safety valve or a 
price collar? Will there be carbon capture and storage, not 
only funding, but the framework for how pipelines are going to 
be sited? And there are many, many aspects of this that, 
depending on the final details, the costs will vary greatly.
    And so we will, as we have in the past, make sure that 
people understand that under any rigorous climate change 
regime, energy prices will go up. Variance of that will be 
dependent upon about what the provisions of the final bill will 
look like.
    Mr. Inslee. I will look forward to evidence that you are 
broadly trying to tell the American public and the U.S. Senate 
that the CBO and EPA did an analysis of the bill and concluded 
that there would not be any significant increase in utility 
bills; in fact, low-income families could actually see a 
benefit because of the provisions we built into the bill to 
help low-income families; and that a cost estimate in total is 
less than a postage stamp a day for a family of four.
    I will look for public evidence that you are making that 
clear to the public. And, frankly, I think you got that 
obligation, given what went on here. And I hope that you will 
fulfill it. Thank you.
    The Chairman. The gentleman's time has expired.
    Let me say this to you, Mr. Miller. Here is a New York 
Times story in early August. What the New York Times is 
reporting here is that it says Duke Energy also left the 
American Coalition for Clean Coal Electricity, citing climate 
policy, quote, ``It was clear that many influential members 
could never support climate legislation in 2009 or 2010, no 
matter how it was written, Tom Williams, a Duke Energy 
spokesman said.''
    And so, again, I agree with the Duke Energy conclusion, I 
think it is very consistent with what happened on that Thursday 
and Friday before we cast the vote, at the coal coalition, that 
they were trying to defeat the legislation. I think the e-mails 
that we have been able to unearth and identify points in that 
direction as well; that once someone was committed to voting 
``no'' on final passage, that they could move on, and Mr. 
Bonner and the Hawthorn Group and all of the rest of your 
lobbyists who had been hired for this effort could continue to 
focus on obtaining the ``no'' votes.
    But I do believe that you were given notice. I mean, Mr. 
Bonner fired the temporary employee on the 23rd. The vote is on 
the 26th. You have notice by Wednesday night, 2 days before the 
vote, that this is information in the hands of Congressmen that 
could mislead them about whether or not they should vote for 
the Waxman-Markey bill.
    So I do believe it comes back to you. And I do believe that 
Duke Energy, in leaving your coalition, one of the largest 
southern utilities, is accurate in that assessment. And that is 
why, again, as we are looking at this, it comes back to you.
    It comes back to your organization, Mr.Miller; and going 
forward, I think it puts a real burden on you to prove that you 
do want legislation and that you--that you are not going to 
allow for this type of activity to continue, you are not going 
to allow for misinformation to be disseminated in your name, 
and that it will be a debate that will be based upon accurate 
representations of what is occurring.
    Because by far the greatest responsibility is on your 
shoulders, given the fact that you knew 2 days before the vote; 
because this was an agenda that I think--Duke Power and I at 
least believe--was aimed at killing the legislation; and that 
in 2009 and 2010 that, if that could be achieved, then that 
would be the goal.
    So that is my conclusion. I don't know, Mr. Inslee, if you 
have any concluding statements that you want to talk about at 
this time.
    Mr. Inslee. I guess my only statement would be this:
    Everyone is capable of making mistakes. There are gradients 
of whether it is negligence, carelessness, recklessness or 
intentional. I am just saying at how people look at 
organizations is how they respond after that happens. And I 
just have to say to Mr. Miller specifically, I have not seen 
evidence yet that you have tried to repair the disinformation 
campaign that associated here adequate to the nature of this 
    And I think you have an opportunity to do so. I just hope 
you take it. Thank you.
    The Chairman. Let me ask one final question of you, Mr. 
    Did you discipline, fire or place on administrative leave 
any permanent Bonner employee as a result of this incident?
    Mr. Bonner. No, sir.
    The Chairman. You did not?
    Mr. Bonner. No.
    But I will say to you, sir, that for me personally--my name 
is on the door; it was an awful experience, something I am very 
regretful happened, something I am going to do Herculean 
efforts, that I hopefully demonstrated at the beginning of 
which to the committee to make sure it never happens again.
    The biggest penalty was paid, is being paid by me 
personally; 25 years I have had this business, and I can't tell 
you how bad I feel personally about this. It is a small 
business, we are not a big corporation; and it is something 
that I want to be able to turn around, something that I want to 
earn a reputation as the best in the business from corrective 
action we have taken. And the penalties have been paid by me.
    The Chairman. Well, Mr. Bonner and Mr. Miller, I think here 
is what we learned today.
    We learned that the coal coalition learned 2 days in 
advance of the historic vote on the House floor that a fraud 
had been perpetrated. Mr. Bonner had sent that information to 
the coal coalition. But although the coal coalition knew of 
this, it took precious little effort to ensure that Members of 
Congress knew that this fraud had been perpetrated.
    My own feeling is that while you might point the finger 
back at a rogue subcontractor and a rogue temporary employee, 
that since you did have notice 2 days in advance that the 
responsibility rested on your shoulder to make sure that your 
coalition, the coal coalition, notified the NAACP, the American 
Association of University Women, who have built over 
generations their reputation, that this fraud had been 
perpetrated, that the responsibility was on your shoulder.
    They are outraged. So am I. You had a much higher 
responsibility than it appears you discharged in terms of 
ensuring that this was corrected before that historic vote.
    You know, the ultimate question framed by Senator Baker 35 
years ago is still relevant here: What did you know? When did 
you know it? And what did you do in order to correct what was 
obviously wrong that was occurring under the guise of your 
    And so that is what is really, in my opinion, what you have 
to conclude that occurred here.
    The goal from the record was that it was to obtain ``no'' 
votes, opposition votes to clean energy bill; and that as soon 
as that ``no'' vote was obtained, the focus went on other 
Members. It was clear that it was going to be a very close 
vote, and it was clear that it was also in the coal coalition's 
interest to not immediately correct the record. And there is 
little evidence that the kind of active effort that should have 
been made did occur.
    So we thank all of you, the witnesses, for being here 
today, and we thank especially the University Women and you, 
Mr. Shelton, representing the NAACP, for contributing to this 
    We are going to proceed now for the rest of the year in 
trying to develop legislation that truly goes to the heart of 
the responsibility that we have in order to protect our planet. 
It is running a fever; 40 percent of that fever has been 
created by coal that has been burnt in our country and around 
the world. We have a responsibility to put together legislation 
so that our country will be the leader.
    My hope, Mr. Miller, is that your coalition will decide 
that you want to work towards getting ``yes'' votes and to do 
so in a way that makes our country the leader; and that the 
impression that Duke Energy has--and, I think, many others--
that you do not want legislation under any circumstances in 
2009 and 2010 is wrong; and that we not hear again information 
about the science that is being questioned by your 
organization, the doubling of electricity rate, the outrageous 
information that is coming forward is repeated.
    And so that is the hope that we have that we can work 
    But this hearing, I think, has helped to illuminate the 
pathology that unfortunately existed in our political system in 
the first 6 months of this year in trying to debate this issue. 
And perhaps, in some way, this hearing is going to help going 
forward, to make sure that it does not occur again.
    This hearing is adjourned.
    [Whereupon, at 12:55 p.m., the committee was adjourned.]