[Senate Hearing 111-1208]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 111-1208

    HEARING ON THE NOMINATION OF JOHN R. FERNANDEZ TO BE ASSISTANT 
     SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT, UNITED STATES 
                         DEPARTMENT OF COMMERCE

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 29, 2009

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED ELEVENTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota             CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania

                    Bettina Poirier, Staff Director
                 Ruth Van Mark, Minority Staff Director
                            
                            
                            C O N T E N T S

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                                                                   Page

                             JULY 29, 2009
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     2
Lugar, Hon. Richard G., U.S. Senator from the State of Indiana...     4
Bayh, Hon. Evan, U.S. Senator from the State of Indiana..........     5
Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota....     6
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri, prepared statement...................................    19

                                WITNESS

Fernandez, John R., nominated to be the Assistant Secretary of 
  Commerce for Economic Development, U.S. Department of Commerce.     8
    Prepared statement...........................................    10
    Responses to additional questions from:
        Senator Vitter...........................................    12
        Senator Baucus...........................................    14
        Senator Voinovich........................................    16

 
    HEARING ON THE NOMINATION OF JOHN R. FERNANDEZ TO BE ASSISTANT 
     SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT, UNITED STATES 
                         DEPARTMENT OF COMMERCE

                              ----------                              


                        WEDNESDAY, JULY 29, 2009

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the full committee) presiding.
    Present: Senators Boxer, Inhofe, and Klobuchar.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Good morning everybody. Today we are holding 
a hearing on the nomination of John R. Fernandez to be 
Assistant Secretary of Commerce for Economic Development at the 
U.S. Department of Commerce.
    Mr. Fernandez comes to us today with a significant record 
of accomplishments. As the Mayor of Bloomington, Indiana from 
1996 to 2003, John Fernandez spearheaded innovative economic 
development plans that resulted in more than $400 million in 
private investment and created thousands of new jobs. I believe 
his experience will benefit EDA and the communities it serves.
    If confirmed for this position, he will be responsible for 
leading the Economic Development Administration, an agency 
whose mission is to help economically distressed communities 
create good jobs and build strong businesses.
    During this time of economic recession, we need a strong 
EDA more than ever. From providing funding for water and sewer 
improvements to helping manufacturers and producers become more 
competitive in a global marketplace, the EDA provides valuable 
assistance to communities across our nation.
    According to the EDA, the agency awarded over $1.2 billion 
in investments from 2004 to 2008. Those investments are 
expected to create more than 392,000 jobs at an average cost of 
$2,507 per job. Those Federal dollars--and this is important--
also spur large amounts of private sector investment. Over the 
same timeframe, each dollar of EDA funding attracted $33. Each 
dollar attracted $33 in private sector investment.
    In my own State of California, EDA has provided vital 
funding for several important projects that are creating jobs 
and revitalizing communities. For example, in 2007 EDA awarded 
a grant of $2 million to the city of Victorville to convert the 
former George Air Force Base into a multi-modal airport complex 
for light, medium and heavy industrial usage. This project is 
anticipated to create 1,000 jobs and leverage $10 million in 
private investment.
    In 2008, the EDA awarded a grant of $3 million to the city 
of Calexico, which is on the border of Mexico, to construct 
water and street improvements for the Town Center Plaza and an 
industrial site. These improvements are expected to create 
2,804 jobs and $395 million in private investment.
    Congress recognized the EDA's unique role in job creation 
and economic development by providing its Economic Development 
Assistance Program with $150 million in the American Recovery 
and Reinvestment Act. Strong leadership is needed at the EDA to 
ensure that those funds are wisely spent to help economically 
distressed communities create and sustain jobs.
    Mr. Fernandez, I believe your many years of work on 
economic development issues will serve you well as you take on 
this challenge and I certainly look forward to your testimony 
today.
    I am going to turn to the Ranking Member and, as soon as he 
is done, your two illustrious friends, Senator----
    Senator Inhofe. And we will look forward to that.
    Senator Boxer [continuing]. Senator Lugar and Senator Bayh 
will introduce you formally.
    Senator Inhofe.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Well, let me just identify with the 
statements of Chairman Boxer. I agree wholeheartedly with 
everything she said. In fact, I have a long, brilliant 
statement that I am going to spare you and enter it into the 
record without objection.
    Senator Boxer. Without objection. So ordered.
    Senator Inhofe. In my State of Oklahoma, this has been a 
real God-send. We have worked with Sandy Baruah and David 
Sampson. David Sampson used to come up there all the time. 
Every time we would start a program, he would actually come up 
and we would have a little ceremony together. And I hope that 
you would be doing the same thing and have the great pride in 
what you have done.
    In the State of Oklahoma, in the period of time that we had 
that authorization, we had $29 million that came in from 
Federal dollars. That was matched with $30 million of State 
money and $558 million of private funds. Now this is what 
Government is supposed to be doing, and we just desperately 
need to get back and get this thing authorized.
    I can tell you about down in Elgin, Oklahoma, where we have 
the Paladin PIM rebuild job next to Fort Sill. That thing--as 
we are speaking today, they are building a 100,000-square-foot 
building down there in a town, that town is less than 400 
people. So these are great success stories. Other places, 
Woodward, Oklahoma, certainly in the area of Southern Oklahoma 
that has always been somewhat of a depressed area down around 
Durant, we just totally changed all that.
    Now, one thing, Madam Chairman, that Mr. Fernandez brings 
is that he and I both had the hardest job in the world. We were 
mayors of major cities. And I tell my friends up here all the 
time, Mr. Fernandez, that if you want a hard job, become a 
mayor. There is no hiding place. If they don't like the trash 
system, it ends up in your front yard. And it did.
    So, we know it is tough and you have the right background 
for it. I am looking forward to this confirmation as quickly as 
possible so that we can get busy and get this thing 
reauthorized and get to work.
    Thank you.
    [The prepared statement of Senator Inhofe follows:]

                  Statement of Hon. James M. Inhofe, 
                U.S. Senator from the State of Oklahoma

    Good morning, Madam Chairman. I'd like to join you in 
welcoming John Fernandez and his family to our hearing today. I 
was able to meet with Mr. Fernandez last week, and I let him 
know that I am unaware of any objections to his nomination to 
be Assistant Secretary of Commerce for Economic Development. In 
that position, he will lead the Economic Development 
Administration, an agency over which this committee has 
jurisdiction. I am pleased to have worked closely with former 
Assistant Secretaries Sandy Baruah and Dr. David Sampson to 
assist numerous communities in Oklahoma, and I hope to have a 
similar experience working with Mr. Fernandez as Assistant 
Secretary.
    I have long been a strong supporter of EDA. I believe the 
agency does an outstanding job of providing relatively small 
grants that help secure significant amounts of private 
investment in distressed communities across the country. 
Contrary to what some people would say, the Government itself 
does not--cannot--expand the economy and create long term 
jobs--the private sector does.
    What the Government can do, however, is help provide the 
right conditions for private sector investments to flourish. 
EDA does this in a myriad of ways, but primarily through 
infrastructure investments. I only wish more of the so-called 
``stimulus'' bill had been dedicated to programs like EDA that 
are truly successful at spurring economic development.
    EDA has worked long and hard with economically distressed 
communities in my home State of Oklahoma to bring in private 
capital investment and jobs. In fact, over the past 6 years, 
EDA grants awarded in my home State have resulted in 
approximately 9,000 jobs being created. With an investment of 
about $29 million, we have leveraged another $30 million in 
State and local dollars and more than 
$558 million in private sector dollars. Specifically, since the 
fall of 2004 when we last reauthorized the agency, EDA 
investments in Oklahoma include:
     assistance for infrastructure to support a 75,000-square-
foot facility in Elgin for Paladin Integrated Management (PIM), 
which is a program that would accelerate modernization of the 
M109A6 Paladin artillery howitzer;
     assistance to help build the Woodward Community Campus, a 
multipurpose higher education and conference center campus;
     thousands of new jobs in Oklahoma City which paved the 
way to support the infrastructure necessary for a new Dell 
service center; and
     funds to create additional space to manufacture and 
assemble goods in an expanded Foreign Trade Zone in the Durant 
area.
    Mr. Fernandez has been nominated to lead this high 
performing agency, and I believe he has the background and 
experience to make it even stronger. As a former mayor, Mr. 
Fernandez knows first-hand the economic challenges local 
communities face, and his economic development accomplishments 
as mayor are impressive and instructive.
    Yet local elected experience is not all the nominee will 
bring to EDA. He also brings experience in private sector 
development. In fact, it is unique for a nominee to combine 
local and private sector experience, which, I should add, was 
highlighted in the letter of support we received from two 
recent Assistant Secretaries--Sandy Baruah and Phillip 
Singerman. Madam Chairman, I ask unanimous consent to include 
that letter in the record.
    Mr. Fernandez, I hope that once confirmed you will work 
with us to reauthorize EDA's primary programs. As I'm sure you 
know, EDA's authorization expired on September 30, 2008. I am 
concerned that the lapse in authorization may leave the agency 
vulnerable to funding cuts during this appropriations cycle and 
more generally result in uncertainty for the agency as well as 
the struggling communities that depend on its assistance.
    I introduced a reauthorization bill in July 2008, and this 
committee reported a bipartisan bill in September. 
Unfortunately the bill was never enacted. In February of this 
year, I again introduced a bill to reauthorize and improve 
EDA's programs. I think it is important that we complete 
reauthorization as quickly as possible, and I ask that, once 
confirmed, you work closely with us to do so.

    [The referenced letter was not received at time of print.]
    Senator Boxer. All right, we are going to now hear from our 
two Senators, then we will turn to Senator Klobuchar, and then 
we will turn to Mr. Fernandez.
    Senator Lugar, would you like to begin?

          OPENING STATEMENT OF HON. RICHARD G. LUGAR, 
             U.S. SENATOR FROM THE STATE OF INDIANA

    Senator Lugar. Thank you very much, Chairman Boxer, Ranking 
Member Inhofe and Senator Klobuchar.
    I really appreciate this opportunity introduce to the 
committee John Fernandez, whom the President has nominated to 
serve as the Assistant Secretary of Economic Development for 
the Economic Development Administration. John is joined here 
today by his wife, Karen, and a host of proud relatives in 
celebration of this important achievement.
    John Fernandez is a well known Hoosier leader, especially 
in the Bloomington area. He attended Indiana University, where 
he received his Bachelor of Science from the School of Public 
and Environmental Affairs. He followed this academic pursuit by 
adding a Master of Public Affairs degree and Doctorate of Law, 
both from Indiana University in Bloomington. During this time, 
he also ran successfully for the Bloomington City Counsel and 
served as its president in 1991.
    After clerking for Indiana Supreme Court Justice Roger 
DeBruler, John entered private practice, and from 1996 to 2003 
he served as the Mayor of Bloomington, Indiana. I enjoyed 
opportunities to visit with John during his annual trips to 
Washington, DC, with an esteemed delegation from the 
Bloomington area. I appreciated these opportunities to learn 
more about his activities and his leadership, and we worked 
together on projects of critical importance to that community.
    The EDA is an important asset to our local communities, 
especially today, given the exceptional challenges and stresses 
the current economic situation presents. The EDA works 
carefully with local and State organizations to revitalize 
infrastructure, provide technical and planning experience, and 
coordinate individual assistance for workers.
    In almost every instance where a community experiences 
considerable economic decline, shuttering factories, increasing 
rates of unemployment and a lack of investment for new 
business, there stands ready a tremendous collection of local 
talent, ability and resources that can be reinvigorated and 
retooled to new projects and new purposes.
    Identifying and securing the needed investments and 
expertise to kick start economic development projects are often 
a challenge. The Federal Government, through the EDA, can be an 
effective partner by providing guidance and an avenue for 
competitive funding. In turn, communities are able to attract 
private investments, foster growth in new and innovative 
industries and provide new employment opportunities.
    Many parts of our home State of Indiana have suffered heavy 
job losses during this difficult time. The Elkhart-Goshen Metro 
Area in the Third Congressional District, for example, has a 
17.5 percent unemployment rate according to the Bureau of Labor 
Statistics. Kokomo, Indiana has even a more severe labor 
problem.
    The Economic Development Administration will be a key 
player in assisting these communities. John's experience as a 
city council member and as a mayor is ideally suited for this 
type of leadership role.
    Chairman Boxer, it is my privilege to recommend a signal 
leader to address these critical challenges in Indiana and 
throughout our country.
    Senator Boxer. Senator Lugar, thank you so much for that 
wonderful introduction. We know you have a hectic schedule, so 
we really appreciate your being here. Feel free to leave 
whenever you need to.
    Senator Bayh, I was telling our friends that they all have 
on the same time this morning. I did not know whether that was 
planned----
    Senator Bayh. We are en message, Madam Chairman.
    [Laughter.]
    Senator Boxer. You really are en message. Go ahead, 
Senator.

             OPENING STATEMENT OF HON. EVAN BAYH, 
             U.S. SENATOR FROM THE STATE OF INDIANA

    Senator Bayh. Thank you, Madam Chairman, for your 
hospitality and leadership this morning. Ranking Member Inhofe, 
and my dear friend Senator Klobuchar, it is good to be with all 
of you this morning.
    It is also wonderful to be once again with my friend and 
colleague, Senator Lugar. As you can tell by our presence, 
Mayor Fernandez enjoys strong bipartisan support because he has 
worked with Democrats and Republicans to help meet the 
challenges that face the people of our State. I am confident 
that he will bring that same devotion to consensus building and 
pragmatism to the Federal Government for this important 
position for which the President has nominated him.
    I have known John for almost 20 years. We have worked 
together, first in my capacity as Governor and now in the U.S. 
Senate, and in a variety of capacities that he has been 
privileged to serve in over all of this time. He is a man of 
integrity, intelligence, and as I have said, he focuses on the 
bottom line--how do we work together to help people; the public 
sector cooperating with the private sector to get the job done.
    I will skip over the part of my statement that deals with 
his academic background and the different posts that he has 
held. I thought Senator Lugar touched upon that very well.
    Just to give you a couple of examples of the effectiveness 
that this individual will bring to the task of being Assistant 
Secretary of Commerce for Economic Development, I will just 
give a couple of those examples for the record.
    As mayor of Bloomington from 1996 to 2003, John played a 
critical role in revitalizing a town that serves as a major 
business center for our State, in addition to be the home of 
our mutual alma mater, Indiana University. Madam Chairman, we 
might call that the Berkeley of the Midwest.
    [Laughter.]
    Senator Bayh. During John's first term, Thompson Consumer 
Electronics, at the time the largest private employer in 
Bloomington, announced plans to close its plant. Knowing the 
devastating impact such a closure would have on Bloomington, 
John acted quickly to keep Thompson alive, marshalling 
resources to produce a redevelopment plan that eventually led 
to $200 million in private investments and created hundreds of 
new jobs. Those are the same sorts of results that I would 
expect from his service in the Department of Commerce.
    John also played a major role in revitalizing and 
strengthening the business community in Bloomington, a plan 
that led to $100 million of new investment in the city. This 
spirit of ingenuity and entrepreneurship that John so clearly 
possesses is exactly the approach that we need to get the 
economy moving once again today.
    Since leaving public service, as Senator Lugar pointed out, 
John has maintained a vibrant career in the private sector. He 
currently serves as of-counsel to the Indianapolis law firm of 
Krieg Devault, as well as Senior Vice President at First 
Capital Group in Bloomington.
    Despite the many demands on his time, John is a devoted 
husband to his wife, Karen, who is with us today, and the proud 
father of two children, Isabel and Ian.
    Madam Chairman, Senator Inhofe, Senator Klobuchar, I can 
without reservation recommend a fine public servant from our 
great Hoosier State, John Fernandez, for this important post. 
Thank you again for your courtesy this morning.
    Senator Boxer. Well, thanks to our two great Senators from 
Indiana, and you are free to leave. We are going to hear from 
Senator Klobuchar and then we will go to Mr. Fernandez.
    Senator Klobuchar, please proceed.

           OPENING STATEMENT OF HON. AMY KLOBUCHAR, 
            U.S. SENATOR FROM THE STATE OF MINNESOTA

    Senator Klobuchar. Thank you, Madam Chair.
    Thank you and congratulations, Mr. Fernandez. If you have 
kept two great Senators like that on either side of you, it is 
a good beginning for you in your role.
    I did note that you went to law school at IU. My husband 
did as well, and in fact his parents met at Ball State in a 
ballroom dance class. So, there you go. Those are my Indiana 
connections, right there.
    I just wanted to stress how important I think your job is 
with Economic Development, especially at this time. I actually 
became more aware of the EDA's programs just from going around 
my State. I visit all 87 counties every single year, so we 
visit a lot of new developments and new projects.
    Just to give you a sense, and I know that you know what you 
will be doing in your job, but with one State what it means. 
Last year, I visited Superior Thermowood in Brainerd, 
Minnesota, and they told me that they got an EDA loan from the 
Arrowhead Regional Development Commission to buy equipment to 
treat wood in a novel, new way. Without the loan, they would 
never have been able to afford the equipment that they needed 
from Finland, and also they would not have been able to hire 
three new employees. So, it just gives you an example of how 
one project can make a difference.
    The EDA's University Centers Program is another example of 
how EDA bridges the Federal Government and local resources. In 
my State, at the University of Minnesota-Crookston, which is 
kind of up near the Canadian border, they are home to an EDA 
University Center Program, and for 2009 they are focusing on a 
number of projects that my staff looked into including places 
that you probably never heard of, such as Tower, Minnesota, 
where they are establishing a new business incubator, and in 
Long Prairie, Minnesota, assistance for some recreational 
trails inventory. And tourism is very important to our economy 
in Northern Minnesota.
    EDA also helps communities recover after disasters. As you 
know, you heard about the floods in the Red River Basin, and 
there was a lot of focus on Fargo. Well, we like to call it the 
Moorhead-Fargo Area. Moorhead, Minnesota, had a lot of problems 
as well, and so we are hopeful that EDA officials will work 
with those communities as we go forward.
    I do not think it is any coincidence that $150 million were 
included in the American Recovery Act for EDA because the work 
is so important to our State, both in large urban areas but 
also in some of these smaller rural areas that I have talked 
about today. So I wanted to thank you for that.
    I am not going to be able to stay for questions. I have 
another committee hearing. But thank you, and congratulations. 
We look forward to working with you.
    Senator Boxer. Thank you, so much.
    And now we turn to you, Mr. Fernandez. And if you want to, 
once again, introduce your family. We would be honored to 
acknowledge them.
    Senator Inhofe. Yes, let them stand up. I want to see who 
all of these people are up there.
    [Laughter.]
    Mr. Fernandez. We have quite a crew.
    On my left, this is Karen Hull; she is my cousin, and she 
came in from Elyria, Ohio. This is my Aunt Nina, Consuelo 
Puffer; she is my father's sister, and she came in from Ohio as 
well. Next is my sister, Anamaria Shrock; she is here from 
Kokomo, Indiana. I think directly behind me is my cousin Jim 
Everhart, who is part of the Ohio group that is here. This is 
my--well I will save that for last.
    On my far right is Mary Clute. She is my brother-in-law's 
mother-in-law who happens to live here in Washington, DC. Next 
to her are my brother-in-law's wife, Christy, and my brother-
in-law, Gavin Howe. They both came in from Wilmington, North 
Carolina. Behind Gavin is Peter Clute, who is here from 
Washington, DC, too. He is Mary's husband and Christy's father.
    Senator Boxer. I love this.
    Mr. Fernandez. I do have a cheat sheet.
    [Laughter.]
    Mr. Fernandez. Last, but not least, is my wife, Karen Howe. 
She actually came in from--she needed to take a ferry and two 
airplanes to get there, but she made it. So, I am very happy to 
have them all here today.
    Senator Boxer. That is wonderful. It is nice to have that 
kind of back-up.
    Mr. Fernandez. You know, I missed a couple.
    Senator Boxer. You did?
    Mr. Fernandez. I knew if I did this I was going to get in 
trouble.
    [Laughter.]
    Senator Boxer. Go ahead, go ahead.
    Mr. Fernandez. I have eyes in the back of my head. I have 
two nieces here as well, Emily Shrock, she is from Kokomo, 
Indiana, and next to her is Elise Shrock, who is also from 
Kokomo. So, that is the family.
    Senator Boxer. So did he get everybody? Everybody's OK?
    Mr. Fernandez. And if there is anybody else, they can stand 
up who is not my family----
    [Laughter.]
    Senator Boxer. Everyone in the room will be family and 
friends, so that is it.
    So please, proceed, Mr. Fernandez.

 STATEMENT OF JOHN R. FERNANDEZ, NOMINATED TO BE THE ASSISTANT 
SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT, U.S. DEPARTMENT 
                          OF COMMERCE

    Mr. Fernandez. Thank you very much, Chairman Boxer, Ranking 
Member Inhofe, and Senator Klobuchar.
    I am honored to be here today as President Obama's nominee 
for Assistant Secretary of Commerce for Economic Development. I 
really appreciated Senator Lugar's and Senator Bayh's presence 
here today. During my tenure as mayor, I could not have asked 
for better Federal partners.
    I want to thank President Obama and Secretary Locke for the 
tremendous trust they placed in me with this nomination. I 
think we all fully appreciate the enormous challenges we face 
as we work to restore America's economy, and I share their 
sense of urgency.
    For 20 years I have been heavily involved in economic 
development. As an elected official, attorney and businessman, 
I have worked to create jobs and attract community investments. 
My extensive experience in the public and private sectors gives 
me a comprehensive understanding of how the Federal Government 
can play a meaningful role to help communities rebuild their 
economies and create a strong foundation for sustained economic 
growth.
    While I have been the mayor of Bloomington, Indiana, and 
spend my professional life grounded there, my roots are firmly 
planted elsewhere. I grew up in Kokomo, Indiana, in a 
relatively typical middle class family. I am a first generation 
American. My parents came to this country to escape fascism. 
Their families arrived in America with little more than hope 
for a better life.
    Through their sacrifices, they provided my generation with 
tremendous opportunities. My father is a retired auto worker 
and my mother a retired nurse. They still live in Kokomo.
    As Senator Lugar mentioned, Kokomo today is reeling from 
the collapse of the domestic auto industry. The most recent 
unemployment figures for the region hit 19.7 percent. Home 
foreclosures have skyrocketed, and families there are 
experiencing profound fear for their future.
    There are far too many Kokomos in nearly every State across 
America. Places like Merced, Toledo, St. Louis, Lincoln County, 
Hughes County. We all know families in these communities, good 
people who have worked hard all their lives and now, due to 
immense economic forces beyond their control, they are 
unemployed and struggle not only to make ends meet, but to 
sustain hope.
    It is my belief that the Economic Development 
Administration is as well positioned as any Federal agency to 
provide the critical support these communities need. EDA has a 
long history of doing just such work. Often EDA's work is very 
quiet and under the radar. Yet in the communities, large and 
small, where this agency has performed, the impacts have been 
significant and lasting.
    I was introduced to the EDA during my first term as mayor 
when RCA closed its Bloomington plant. One thousand two-hundred 
jobs were lost along with our largest property taxpayer. RCA's 
decision left Bloomington with a 200-acre brownfield site and 
over 2 million square feet of obsolete industrial buildings.
    Our community did pull together. We successfully applied 
for an EDA grant to fund a new road that significantly enhanced 
access to this intercity site. This modest Federal investment 
created the catalyst for transforming this obsolete industrial 
site into a thriving 21st century employment center.
    To date, the private sector has invested well over $200 
million in capital improvements. We have replaced over half of 
the RCA jobs and restored stability to this area of the city. 
This is a classic example of the good works that EDA has been 
doing for over 40 years all across America.
    These are truly challenging times for our country. I cannot 
imagine a more important calling than to be engaged in our 
economic recovery efforts. I am ready for this challenge.
    If I am fortunate enough to earn this committee's support, 
and if I am confirmed by the full Senate, I will look forward 
to working with you, your colleagues and your staff and the 
very dedicated staff of EDA to help EDA live up to the agency's 
mission, which is leading the Federal economic development 
agenda, promoting innovation, and preparing American 
communities for growth and success in our global economy.
    Chairman Boxer, I want to thank you again for the 
opportunity to address the committee. I look forward to your 
questions.
    [The prepared statement of Mr. Fernandez follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Senator Boxer. Thank you very much, Mr. Fernandez.
    I just want you to know that when Senator Inhofe and I--you 
know, when we differ, we differ. But when we agree, we strongly 
agree. And on this EDA program, we both believe it really is a 
transformational program.
    I think that we come out with very much the same attitude, 
that leveraging, leveraging other moneys with seed money from 
the Federal Government, is a very good way to go because you 
know then that it is like a check and balance on the program. 
It is not 100 percent Federal funding. It just starts you off, 
and if it is a smart idea, you are going to attract these other 
funds.
    So we are looking forward to a reauthorization soon of the 
program. I also want you to know that when the President put 
together the stimulus project, I phoned Larry Summers to talk 
about the importance of this particular program, as well as the 
COPS funding. Those were the two that I talked about.
    I hope that as soon as you get into your job--and I have a 
sense, because the lack of attendance means that people are 
happy with this nomination, if I might tell you that. That is 
my feeling about it. If you move quickly, will you commit to us 
to let us know how those stimulus funds are moving out of the 
door?
    Mr. Fernandez. Chairman Boxer, absolutely. From my 
perspective, I think working with EDA to effectively get the 
stimulus dollars out into our communities is job No. 1.
    Senator Boxer. OK. Now, I just was curious. As mayor or as 
a developer, was there ever a time when you sought help from 
the EDA and they were unable to assist? I worry about the 
small, relatively small funding. So, do you have any examples 
of that?
    Mr. Fernandez. Well, Chairman Boxer, my experience, the one 
opportunity that we did pursue assistance was with the Thompson 
closing, the RCA closing, and we did not have any problems. 
There are limited resources, but you have got a very dedicated 
staff there, and if I am confirmed, I will certainly do all I 
can to make sure we are working as effectively and efficiently 
as we can.
    Senator Boxer. Good. So my last question is, tell us about 
the importance of public-private partnerships in restoring the 
economic stability of communities throughout the country. I 
think that is what is so unique about this particular program.
    Mr. Fernandez. Well, I would agree with you that leveraging 
resources--that using public funds to leverage private 
investment is a critical component to a successful economic 
development strategy. You know, the Government can only do so 
much in terms of creating jobs and growing the economy. That 
partnership with the private sector is essential.
    That has been our experience at home, and there are 
examples all over the country of where these modest investments 
can really be a tremendous catalyst for further private 
investment and job creation. So, I think it is at the heart of 
EDA, and it is a very sound policy.
    Senator Boxer. Very good.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman, and I think that 
you and I should share with him that you and I are going to try 
to get this done a lot faster, getting the reauthorization 
done. So, we will be looking for you to help us in this 
respect.
    I want to tell you one thing to kind of look out for and 
try to get a commitment on this. Now and then--and this 
happened once in Oklahoma, so I am not pointing fingers outside 
of my own State--applications were made by a city for the use 
of these funds showing the leverage, showing the State 
commitment, showing the private sector. And when the funds got 
there, they used it for a different purpose. I personally went 
to--at that time it was Simpson, and I went to him, and I said 
I want this withdrawn.
    The commitment I would like to have from you is that you 
will not allow this to happen. If they go through this, any 
city, in Oklahoma, in California, or anyplace else goes through 
this, to make sure that the funds are used in the way that they 
are represented in the application. I think it is very, very 
important.
    Mr. Fernandez. Senator Inhofe, I would absolutely agree 
with that. Accountability is essential. Transparency is 
essential. If I am confirmed, I will certainly work with the 
EDA staff to ensure that is how we operate the agency.
    Senator Inhofe. That is good because in my State when this 
happened we had some of the other communities come and say, 
well, look, they did not do, you know, so that is the problem 
that you have.
    I want to correct something I said in the opening 
statement. I was talking about the 100,000-square-foot building 
in Elgin, Oklahoma. It is a 75,000-square-foot building, but 
still, in a population of 400, that is a lot of activity.
    I would only ask if there are any further examples that you 
would like to use, that you have dealt with this. We have many 
examples. I would say this. In Southern Oklahoma, in the city 
of Durant, that city has been totally revitalized. It is one 
that was looked upon as an impoverished area of the State. We 
have so many successful programs, almost all, three of them, 
that went through the EDA, that have just totally revised that 
city. And that is the kind of thing that can happen.
    Senator Boxer is right. She and I disagree, and we fight 
like cats and dogs on a lot of issues. On this, we are in 
unity. We want to get this done as soon as possible.
    So, I would only ask, Madam Chairman, if Mr. Fernandez has 
any other examples he wants to use, go ahead, this is your 
opportunity to do it. If not, I will get out of here, and we 
will try to get reauthorized.
    Mr. Fernandez. Thank you again, Senator Inhofe. I think 
there are a wealth of examples of where the EDA has been in 
small communities, been in large communities, investing and 
leveraging the kind of job creation and private investment that 
you are so supportive of.
    You know, my sense is that, if I am confirmed, one of the 
things that I would like to work with the staff to do is to 
make sure that we are telling that story. And in telling that 
story, not use it just as an opportunity to pat each other on 
the back, but rather to use it as an advertisement, if you 
will, of the tremendous potential that the EDA has to help Main 
Street businesses, to be a front door to the Department of 
Commerce and other initiatives that we can bring to bear to 
those small and mid-sized businesses on Main Street, help them 
with innovation, help them with strategic development goals, 
and in the process rebuild communities and really build a 
strong economy.
    Senator Inhofe. Good.
    Senator Boxer. Well, thank you, Senator Inhofe.
    I just have some required questions for you.
    Do you agree, if confirmed by the Senate, to appear before 
this committee or designated members of the committee and other 
appropriate committees of the Congress and provide information 
subject to appropriate and necessary security protection with 
respect to your responsibilities as Assistant Secretary of 
Commerce for Economic Development?
    Mr. Fernandez. I do.
    Senator Boxer. Two, do you agree to ensure that testimony, 
briefings, documents, and electronic and other forms of 
communication are provided to this committee and its staff and 
other appropriate committees in a timely manner?
    Mr. Fernandez. Yes, Madam Chairman.
    Senator Boxer. Does that include the minority members? 
Because I know that Senator Inhofe feels strongly about that as 
well.
    Mr. Fernandez. Absolutely.
    Senator Boxer. And do you know of any matters which you may 
or may not have disclosed that might place you in any conflict 
of interest if you are confirmed?
    Mr. Fernandez. I do not.
    Senator Boxer. Excellent.
    Well, if there are no further questions.
    Senator Inhofe.
    Senator Inhofe. No further questions.
    Senator Boxer. Then we will close this hearing. We wish you 
the best, and we are going to move this nomination as quickly 
as we can. Thank you very much.
    We stand adjourned.
    [Whereupon, at 10:32 a.m., the committee was adjourned.]
    [An additional statement submitted for the record follows:]

                Statement of Hon. Christopher S. Bond, 
                U.S. Senator from the State of Missouri

    Thank you, Chairman Boxer and Ranking Member Inhofe, and of 
course thank you to Mr. Fernandez for coming before us today.
    First, let me congratulate you on your nomination. It is an 
honor that is indicative of your hard work and dedication.
    Being a former Governor, I am always happy to see people in 
a Federal role that have a good understanding of the local 
perspective. And with your many years dedicated to the city of 
Bloomington, I appreciate the perspective that you would bring 
to the Economic Development Administration.
    Additionally, it is my hope that your years on the on 
business side of economic development will allow you to better 
shape the EDA in a manner that provides businesses the 
opportunity to provide long term economic growth and 
sustainability for their communities. Both of these unique 
perspectives will serve you well in taking on many of the 
challenges that lay ahead.
    That aside, your pending confirmation comes at a critical 
period in economic development. With unemployment nearing 
double digits and small businesses throughout the country 
struggling to access necessary credit, I can't overstate the 
importance of this position in moving the EDA and the country 
forward.
    As you know, the EDA is the only Federal agency that 
concentrates on private sector economic sustainability. While 
other agencies play an important role in helping communities on 
a short term basis, it is EDA that can provide immediate aid 
that can provide long term economic stability. So, if properly 
equipped and structured, EDA has a unique position to help this 
country reverse its economic direction.
    Missouri has numerous examples of how EDA can have an 
enormous impact on economic development. The EDA investment in 
initiatives across Missouri has worked to diversify our job 
base by focusing on high tech, high growth industries. This 
refocusing has allowed Missouri to compete globally for the 
private investment that attracts and maintain higher paying 
jobs in the area.
    For example, EDA awarded a $2.9 million grant as seed 
capital for the Center of Research, Technology and 
Entrepreneurial Expertise (CORTEX) in St. Louis. The Federal 
funds helped immediately leverage over $30 million to create a 
life science research and commercialization district that 
focuses on transforming scientific innovation into new 
companies to create jobs in the St. Louis urban core. In the 
long run, this research center is expected to encourage over 
$400 million in investment by concentrating the essential life 
science resources.
    Recently, the EDA also provided $1.7 million for the 
development of a Midwest-China air cargo hub in the St. Louis 
area. The development of this trade route will put St. Louis at 
the center of Chinese-U.S. commerce. By doing so, it will 
increase access for our U.S. exports, cultivate commercial 
opportunities, generate new jobs and provide sustainable 
economic development in a community that suffered the economic 
distress of a natural disaster.
    Under your leadership, I expect that success stories such 
as these will continue to add to the success of EDA. However, I 
expect you to lead EDA in a direction that will also allow the 
country to compete in an ever changing business climate.
    In the past, the symbol for economic growth and development 
was embodied in the bricks and mortar of buildings. They 
represented a place where people went to work and where 
business got done. However, while that ideal remains partially 
true, we are beginning to see a shift.
    The economic promise of this country is in the promise of 
ideas. It is in the patents being developed across the country 
in this nation's incubators and laboratories. It is the 
recognition and development of potential new trade routes.
    By supporting these types of ideas, EDA will be investing 
in the job creation of tomorrow. We must provide EDA with the 
ability to empower these ideas in order to grow our economy and 
offset the economic strain of disaster.
    Additionally, I expect you to work toward a reauthorization 
of EDA in order to give them the tools necessary to build and 
sustain jobs and development in this economic climate. Such a 
reauthorization must include providing flexibility on local 
match levels during this time of economic hardship, focus on 
the economic development needs in rural communities and EDA 
staffing in local offices, and improving an efficient 
accessible revolving loan fund.
    I look forward to your testimony and hearing your ideas in 
how to tackle many of the obstacles ahead. Again 
congratulations on your nomination, and I look forward to 
working with you throughout the confirmation process.

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