[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
FRAUDULENT LETTERS OPPOSING CLEAN ENERGY LEGISLATION
=======================================================================
HEARING
before the
SELECT COMMITTEE ON
ENERGY INDEPENDENCE
AND GLOBAL WARMING
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
OCTOBER 29, 2009
__________
Serial No. 111-12
Printed for the use of the Select Committee on
Energy Independence and Global Warming
globalwarming.house.gov
----------
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Washington, DC 20402-0001
SELECT COMMITTEE ON ENERGY INDEPENDENCE
AND GLOBAL WARMING
EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon F. JAMES SENSENBRENNER, Jr.,
JAY INSLEE, Washington Wisconsin, Ranking Member
JOHN B. LARSON, Connecticut JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California GREG WALDEN, Oregon
STEPHANIE HERSETH SANDLIN, CANDICE S. MILLER, Michigan
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
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Page
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
Witnesses
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
FRAUDULENT LETTERS OPPOSING CLEAN ENERGY LEGISLATION
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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
facts.
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-
Markey.
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
control.
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
wrong.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Sensenbrenner. Mr. Chairman, thank you for recognizing
me.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
witnesses.
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
public.
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
discussion.
Thank you.
The Chairman. The gentleman's time has expired.
[The prepared statement of Ms. Blackburn follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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.
STATEMENT OF THE HON. TOM PERRIELLO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF VIRGINIA
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
deserves.
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
representatives.
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
determine.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
apologize.
Mr. Blumenauer. And when did they track you down and
apologize?
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.
Inslee.
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
fraud?
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.
STATEMENTS OF HILARY O. SHELTON, DIRECTOR AND SENIOR VICE
PRESIDENT FOR ADVOCACY AND POLICY, NAACP WASHINGTON BUREAU;
STEVE MILLER, PRESIDENT AND CEO, AMERICAN COALITION FOR CLEAN
COAL ELECTRICITY; JACK BONNER, BONNER & ASSOCIATES; LISA M.
MAATZ, DIRECTOR OF PUBLIC POLICY AND GOVERNMENT RELATIONS,
AMERICAN ASSOCIATION OF UNIVERSITY WOMEN
STATEMENT OF HILARY O. SHELTON
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
Americans.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
organizations.
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
actions.
First, three senior ACCCE executives, including myself,
have been reprimanded and received substantial financial
penalties.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
Office.
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
offices.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
begin.
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
astroturf.
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
advocates.
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
insulting.''
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
amount.
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. We thank the witnesses for their testimony.
The Chair will recognize himself now for a round of
questions.
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
there.
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
contacted.
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
opposition?
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
legislation.
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
legislation.
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
Congress?
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
later.
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
done.
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
country.
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
notified?
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
occurred.
Mr. Bonner. Yes, sir.
The Chairman. Now, what do you have to respond to that, Mr.
Shelton?
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
vote.
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
voters.
Were you familiar with this text to be used in these phone
calls?
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
doubled?
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
it?
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
doubled.
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
electricity.
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
then?
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
it----
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
penance?
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
board.
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
cap-and-trade.
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
trouble?
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
advocated.
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
Congress.
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
misinterpretations.
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
followed.
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.
[Recess.]
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
letters.
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
astroturfing.
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
legislation.
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-
Markey.
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
allowances----
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
right.
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
responsibility.
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
changes.
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
Members.
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
misinformation?
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,
sir.
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
parsing.
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
submissions.
Mr. Inslee. So are you going to try to cure that
misrepresentation now with the people who were given that
misrepresentation?
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
calls.
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,
and----
Mr. Inslee. Mr. Miller, I am sorry to interrupt. I don't
like to interrupt witnesses. But you are just not answering the
question.
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
misinformation?
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
debate.
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.
Bonner.
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
responsibility?
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
hearing.
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
together.
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.]