[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




                               before the

                           PROCUREMENT REFORM

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION


                             MARCH 27, 2012


                           Serial No. 112-137


Printed for the use of the Committee on Oversight and Government Reform

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                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

   Subcommittee on Technology, Information Policy, Intergovernmental 
                    Relations and Procurement Reform

                   JAMES LANKFORD, Oklahoma, Chairman
MIKE KELLY, Pennsylvania, Vice       GERALD E. CONNOLLY, Virginia, 
    Chairman                             Ranking Minority Member
JASON CHAFFETZ, Utah                 CHRISTOPHER S. MURPHY, Connecticut
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
PATRICK MEEHAN, Pennsylvania

                            C O N T E N T S

Hearing held on March 27, 2012...................................     1


Richard Blumenthal, A U.S. Senator from the State of Connecticut
        Oral statement...........................................     2
Rob Portman, A U.S Senator from the State of Ohio
        Oral statement...........................................     3
Ambassador Luis Cdebaca, Ambassador at Large, U.S. Department of 
        Oral statement...........................................     9
        Written statement........................................    11
Cathy J. Read, Director, Office of Acquisitions Management, U.S. 
  Department of State
        Oral statement...........................................    13
        Written statement........................................    15
Evelyn R. Klemstine, Assistant Inspector General for Audits, U.S. 
  Department of State
        Oral statement...........................................    18
        Written statement........................................    20
Richard T. Ginman, Director, Defense Procurement and Acquisition 
  Policy, U.S. Department of Defense
        Oral statement...........................................    29
        Written statement........................................    30
Sharon Cooper, Director, Defense Human Resources Activity, U.S. 
  Department of Defense
        Oral statement...........................................    34
        Written statement........................................    36
Ambassador Kenneth P. Moorefield, Deputy Inspector General, 
  Special Plans and Operations, U.S. Department of Defense
        Oral statement...........................................    38
        Written statement........................................    40



                        Tuesday, March 27, 2012

                  House of Representatives,
   Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and Procurement Reform,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:08 a.m. in 
room 2247, Rayburn House Office Building, the Honorable James 
Lankford [chairman of the subcommittee], presiding.
    Present: Representatives Lankford, Chaffetz, Kelly, Issa 
(ex officio) and Connolly.
    Staff Present: Alexia Ardolina, Majority Staff Assistant; 
Kurt Bardella, Majority Senior Policy Advisor; Richard A. 
Beutel, Majority Senior Counsel; Molly Boyl, Majority 
Parliamentarian; Gwen D'Luzansky, Majority Assistant Clerk; 
Adam P. Fromm, Majority Director of Member Services and 
Committee Operations; Justin LoFranco, Majority Deputy Director 
of Digital Strategy; Mark D. Marin, Majority Director of 
Oversight; Peter Warren, Majority Legislative Policy Director; 
Jaron Bourke, Minority Director of Administration; Devon Hill, 
Minority Staff Assistant; Rory Sheehan, Minority New Media 
Press Secretary; and Cecelia Thomas, Minority Counsel.
    Mr. Lankford. The Committee will come to order.
    Just a quick housekeeping piece on the order on how we're 
going to go. We are grateful to have the two Senators here to 
speak on this same topic that is happening over in the Senate 
and the good work that is already happening there.
    I am going to open this up with a brief statement, just the 
overarching feel of what we are trying to accomplish today. I 
will ask the two Senators to make a statement and then Mr. 
Connolly, Chairman Issa and I will make a quick opening 
statement after the Senators have spoken. Then we will set up 
for the next panel.
    The Senators are welcome to stay. You probably have a few 
things to do as well today. If you would like to be dismissed, 
you could, whatever is your pleasure. I am sure our opening 
statements will be riveting to you, so I assume you want to be 
able to stay as well.
    This hearing is on Labor Abuses, Human Trafficking and 
Government Contracts: Is the Government Doing Enough to Protect 
Vulnerable Workers?
    We are a part of the Oversight and Government Reform 
Committee. We exist to secure two fundamental principles. 
First, Americans have the right to know that the money 
Washington takes from them is well spent. Second, Americans 
deserve an efficient and effective government that works for 
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers because taxpayers have 
a right to know what they are getting from the government.
    We will work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
them genuine reform to the Federal bureaucracy. This is the 
mission of the Oversight and Government Reform Committee and 
obviously, this subcommittee as well.
    With that, Senator Blumenthal, we would be pleased to 
receive a statement from you on your work.


    Senator Blumenthal. Thank you, Chairman Lankford, Chairman 
Issa and Ranking Member Connolly, for your leadership and your 
staffs, and for your very helpful work on this issue. I want to 
particularly thank my very distinguished colleague, Senator 
Portman, for joining me today and for his leadership in helping 
to craft this very, very important initiative.
    I also want to say that this effort on the Senate side is 
really a very bipartisan one as it is here. We have been joined 
by Senators Franken, Rubio, Lieberman and Collins in 
introducing the End Trafficking Government in Contracting Act 
in 2012.
    I have a statement which I will submit for the record and 
it will condense the remarks I have to make this morning.
    This Senate bill is a companion to your legislation and it 
is the conclusion of months of bipartisan work between our 
members and our staff across the ideological spectrum as it 
should be because this problem really is not a partisan one in 
any sense of the word. It basically is to say to the American 
public and the world that we will no longer tolerate the stain 
of human trafficking to taint federal grants and contracts 
    You will hear this morning from witnesses who will tell you 
about this problem firsthand, what is happening on the ground 
and also indicate that our government has zero tolerance for 
human trafficking, but in practice, on the ground, in the real 
world, it is happening. It is prevalent, pervasive, insidious, 
a serious problem across the globe.
    The Bipartisan Commission on Wartime Contracting recently 
completed an exhaustive review of contracting practices in Iraq 
and Afghanistan and bluntly concluded ``Existing prohibitions 
on trafficking have failed to suppress it.'' That is a searing 
indictment of our contracting and our contractors. We need to 
take strong action to stop it.
    This conclusion was echoed last October in hearing 
testimony before the Senate Armed Services Committee when the 
DOD Comptroller, Dov Zakheim, said that it was quite clear in 
his words, that fixing this problem ``will require 
legislation'' and that is why we are here.
    This activity is unconscionable and intolerable and to the 
observations that you will hear this morning, and that have 
been made already, I would just add my own ongoing human 
trafficking on federal contracts is fraudulent, it is immoral 
and it is a particular threat to the security and welfare of 
our deployed service members.
    We can't guarantee that people interacting with them every 
day, and I know you have been on the bases as I have in 
Afghanistan and seen how close and intimate the contact is 
between those people working on the bases on contracting, 
whether it is construction or anything else, and the security 
of the members of our Armed Services really depends on this 
kind of effort.
    Our military relies heavily on foreign contractors to 
provide logistical support on those bases and I would suggest 
that this objective ought to be pursued as quickly as possible. 
The objective is really threefold: prevention, accountability 
and enforcement. The legislation accomplishes those goals with 
a number of strong steps that begin at their core with making 
clear that this activity is criminal and is punishable 
    I say that as an Attorney General who was a law enforcer 
for 20 years. Clear, strong penalties are at the heart of this 
effort, but so is prevention. By expanding the scope of current 
language that requires plans and practices specified in 
advance, stopping the kind of related fraudulent activity, 
whether it is destruction of documents or misuse of credentials 
and so forth, misrepresenting wages on work location, using 
labor brokers who charge exorbitant recruiting fees, the 
procurement of commercial sex acts, all of those related acts 
also ought to be prevented.
    The bill improves accountability by requiring contractors 
to notify the Inspector General of any credible evidence of 
trafficking occurring on the contract or any subcontracts. The 
Inspector General has to investigate such instances and report 
any findings to the contract administrators to consider swift, 
remedial action against the contractor. That can include 
throwing them off the job, debarment and other measures that 
have real meaning to a contractor who wishes to do business 
with the Federal Government.
    Those are the important measures and again, there are 
others that are part of the bill. I would just emphasize how 
important my colleagues and I regard this measure and how 
grateful we are for your prompt and very constructive work.
    Thank you very much.
    Mr. Lankford. Senator Portman.


    Senator Portman. Thank you, Chairman Lankford.
    Thanks for your personal commitment to this issue and your 
leadership on it.
    It is great to be here with my colleague, Senator 
Blumenthal. I appreciate his leadership on this in the Senate.
    It is always good to be with my friend, Darrell Issa, 
Senator Chaffetz and Ranking Member Connolly. We have a number 
of House members who have done great work on this including the 
members here today, and of course Ranking Member Cummings and 
Congressman Chris Smith. It seems to me this is a great 
opportunity in a bipartisan way for us to make progress on a 
critical issue.
    In the Senate, we also have a great team. Senators Rubio, 
Franken, Collins, McCaskill and Joe Lieberman have all signed 
on to the bill. We have other colleagues who are very 
interested in pursuing this. Even in times when it seems 
difficult to achieve reasonable and commonsense objectives, 
this seems to be one we can move forward on.
    I appreciate the leadership you have shown. This cuts 
across all party lines and philosophical lines because it is 
really about something much more fundamental and that is who we 
are as a people. It is about respecting and protecting human 
dignity. I think this legislation, as my colleague talked 
about, is designed to ensure that the contracting dollars that 
come from our taxpayers after all are spent in a manner that is 
consistent with our deeply held values as a Nation.
    It is a lot of money, over $20 billion a year in 
Afghanistan and Iraq alone. Those contracting dollars are 
significant and it requires clear rules and oversight.
    Despite the existing protections including the Trafficking 
Victims Protection Act of 2000, reports have made it very clear 
that human trafficking practices in connection with U.S. 
overseas contracts remains a very significant problem. To put 
this in some context, there are over 70,000 third country 
nationals who now work for contractors and subcontractors of 
the U.S. military again in Iraq and Afghanistan alone.
    In most cases, this work provides valued job opportunities, 
but it is not hard to see also how these workers recruited for 
low wage jobs often thousands of miles from their home country 
can find themselves vulnerable to illegal or fraudulent 
employment practices. We have heard this most recently from the 
Wartime Contracting Commission. I know you all looked at that 
report and also the Inspectors General of the State Department 
and the Defense Department, each of which have reported the 
trafficking remains an issue and that existing protections in 
connection with such trafficking are insufficient.
    Broadly defined, as Senator Blumenthal said, it means 
forced labor and severely coercive labor practices including 
the practice of recruiting workers who leave home based on 
fraudulent promises about working conditions or wages and 
including confiscating passports, charging workers recruitment 
fees that consume more than a month's salary, and creating 
indentured, servitude type conditions.
    It includes unlawful restrictions on the ability of workers 
to return home and sometimes failure to assist in the 
repatriation when jobs are over.
    The oversight is limited. The Wartime Contracting 
Commission, for example, reported that ``Some prime 
contractors, although not themselves knowingly violate the 
prohibitions on trafficking, have not proactively used all 
their capacities to supervise their labor brokers or subs.'' 
The State Department Inspector General's Report similarly 
stated ``Since contracting regulations do not specify how to 
monitor contractors for trafficking in persons, the IG could 
not conclude that trafficking of persons monitoring is 
effective.'' The Inspector General likewise observed that 
``Contracting-initiated reporting was the only means by which 
DOD could obtain timely and relevant information regarding 
actual or alleged violations.'' That is what we are providing 
for in this legislation.
    I think we should be clear here today that the overwhelming 
majority of the U.S. contractors and subcontractors are 
honorable, they are law-abiding and have made it a priority to 
ensure that abusive labor practices play no role in the very 
challenging work they are doing for all of us in Iraq, 
Afghanistan and elsewhere around the world, but there are 
problems obviously.
    Many of the contractors we consulted with already have in 
place some internal policies designed to prevent, detect and 
stop human trafficking in connection with their own operations 
and some of their subcontractors. I think our proposal 
basically is to ensure that those best practices are adopted by 
other contractors and they become the standard practices on all 
significant U.S. contracts broad.
    Senator Blumenthal has done a great job laying out the 
legislation. I think he is right to put it into three 
categories: prevention, accountability and enforcement. It 
strengthens current legal safeguards requiring contractors to 
have these proactive prevention plans. It is a compliance plan 
to ensure that there is no activity that directly supports 
human trafficking.
    It also gives contracting officers the ability to impose 
appropriate penalties, very important, including referring a 
contractor for disbarment for the most serious violations. It 
beefs up reporting and monitoring requirements to ensure that 
federal evidence of human trafficking immediately triggers an 
investigation to uncover the facts. Again, that comes right out 
of these reports.
    The bill closes a loophole in federal criminal law by 
extending to overseas contracts the same prohibition against 
fraudulent employment practices they would have here in the 
United States.
    Again, I think these common sense reforms will ensure that 
the performance of overseas contracts paid for by our 
constituents, American taxpayers, are consistent with the 
values that we all hold dear as Americans.
    Gentlemen, I look forward to working with you all and my 
colleagues in the Senate. This Committee will play a central 
role, of course, to make progress on this important reform 
effort this year.
    Thank you, Mr. Chairman.
    Mr. Lankford. Senators, thank you for being here. Thanks 
for your work.
    Mr. Issa. Briefly, if I could, just for one second?
    Mr. Lankford. Absolutely. Without objection.
    Mr. Issa. I want to thank you for coming here. The fact is 
that when we show people that we are bipartisan and bicameral, 
we show people that legislation is possible even in an election 
year. Both your legislation, the Data Act and some of the other 
tools that are going to allow us to more efficiently track and 
inform people when there is, in fact, the possibility of an 
honest day's pay and an honest day's work not being linked 
together, which certainly is often the case where we pay the 
full dollar and much of it never gets to the recipient who is 
supposed to get it for doing the work.
    Mr. Chairman, thank you for what you are doing, but 
Senators, I am particularly thankful for your coming here and 
showing the world that this is an important enough issue to get 
it done and get it done this year.
    Thank you. I yield back.
    Mr. Lankford. Absolutely.
    Gentlemen, thank you for being here. Hopefully, this will 
grease the wheels for a transportation bill and the budget yet 
to come. We will get all these things worked out between us.
    Senator Blumenthal. Hope springs eternal.
    Mr. Lankford. It does.
    Gentlemen, thank you very much.
    With that, we will take a short recess to reset the panel. 
I would like our witness to come and have a seat. Then we will 
do opening statements and begin the second panel.
    Mr. Lankford. On November 2, this same Subcommittee and the 
same panel held a hearing entitled Are Government Contractors 
Exploiting Workers Overseas. Examining Enforcement of the 
Trafficking in Victims Protection Act.
    At the hearing, we were distressed to learn that several 
U.S. government contracts had used specific labor practices 
that can only be characterized as involuntary servitude. I said 
in that hearing, as a Nation, we have certain values that 
characterize us. We believe that each person has been endowed 
by their Creator with certain rights, including life, liberty 
and the pursuit of happiness. These are not rights given by men 
or confined to our national boundary. They are unique to each 
person. They are God given rights.
    The passion for freedom and our national security has taken 
us across the globe and in the process of doing the right 
thing, we must also be careful to do it the right way. Our 
November hearing determined that within the confusing maize of 
contractors and subcontractors who support our operations, as 
already stated, many of them are ethically doing an excellent 
    There appear to be some with a less than reputable job, 
foreign companies sometimes that engage in labor brokers who 
apparently, accountable to no one, exploit unskilled workers 
from impoverished backgrounds, called Third Country Nationals 
or TCNs. These are the workers who tend the gardens, wash the 
dishes, prepare fast food meals, do the laundry for American 
embassy workers, military personnel and others stationed in the 
Middle East, Iraq and Afghanistan.
    They come from countries such as India, Nepal, Bosnia, 
Pakistan, Bangladesh, Sri Lank, the Philippines, and others. We 
heard testimony that established that some of these workers 
have been robbed of wages, injured without compensation, 
subjected to sexual assaults or held in deplorable conditions 
resembling indentured servitude by their subcontractor bosses.
    Some have paid illegal job broker fees equal to or greater 
than their final pay. Reports have suggested they are deceived 
about their work location or conditions when they are 
recruited. These unsavory labor practices, collectively called 
trafficking in persons, is immoral, it is inappropriate and un-
    The purpose of this hearing is to follow up on our November 
hearing, to explore whether we are doing enough to stop this 
abhorrent practice. There are numerous laws and policies 
already in place but they have not fully stopped trafficking in 
persons through our contracts.
    I asked the witnesses to send us their best ideas about how 
to address this problem and they have done so. Thank you. We 
will ask them further to describe these ideas and action plans 
they intend to follow in the weeks and months ahead and so will 
    In addition, I am pleased to announce that yesterday in a 
rare display of both bipartisanship and bicameral cooperation, 
similar legislation was released in both the House and the 
Senate that should significantly curtail human trafficking in 
U.S. Government contracting. Our goal in this legislation is to 
deploy unprecedented economic and purchasing power of the 
United States Government, the single largest consumer of goods 
and services in the world, to drive accountability, to 
establish a higher labor standard than exists in many parts of 
the world.
    We are still the beacon of liberty in the world. We should 
shine through every relationship worldwide. Our End Trafficking 
and Government Contracting Act addresses the problem of 
enhancing prevention, accountability and enforcement. Our 
proposal prevents trafficking abuses by requiring contractors 
with contracts over $1 million to implement compliance plans to 
prevent trafficking, including destroying or confiscating 
passports, misrepresenting wages or work locations or using 
labor brokers who charge exorbitant recruiting fees.
    The bill improves accountability by requiring that a 
contractor notify the Inspector General if he or she receives 
credible evidence that a subcontractor has engaged in 
prohibitive conduct, requiring the Inspector General to 
investigate such instances and requiring the Inspector General 
to investigate all those instances and with that require swift 
remedial action against the contractor. The bill improves 
enforcement of anti-trafficking requirements by extending the 
criminal prohibitions that prevent fraudulent labor practices 
typically associated with trafficking.
    To examine these issues and discuss our legislation, we 
have two panels today, obviously the Senators who have already 
spoken, the first panel; and our second panel seated now from 
the State Department consists of program contracting oversight 
experts along with programming, contracting and oversight 
experts from the Department of Defense.
    I do look forward to receiving answers on this issue. There 
is no good explanation of why we would still have contractors 
using illegal recruiting fees, providing inadequate living 
conditions for TCNs or violating a multitude of other clear 
human dignity issues. Ranking Member Connolly and I have worked 
closely from the start on this. This is truly a bipartisan 
piece on which we have absolute cooperation and we look forward 
to a chance to work together all the way through to the end on 
this and finding resolution.
    Mr. Lankford. With that, I would like to recognize the 
distinguished Ranking Member, Mr. Connolly, for his opening 
    Mr. Connolly. Thank you so much, Mr. Chairman.
    Let me echo what you just said. This is a bipartisan 
effort. This is not going to be an issue that is going to 
divide us along party lines at all. I have very much 
appreciated working with the Chairman of the subcommittee and 
his staff.
    When we had this hearing in November, I think our reaction 
honestly was utter shock at the reality we are talking about. 
We had a witness who had responsibility for this subject, I 
believe at the Pentagon, who had never been to Iraq and 
Afghanistan. It was an academic subject sitting on the desk in 
Washington in terms of what the nature of the problem in terms 
of contractors.
    We noted that there virtually had never been a prosecution 
on this charge even though it was a widespread practice in both 
Iraq and Afghanistan with contractors or subcontractors. Very 
few debarments or suspensions of contractors even though it was 
again well known as a widespread practice.
    I think that is what prompted the legislation. This is 
unacceptable. If America is about anything, it is about a value 
system. At the very essence of that value system is the 
enshrinement of human autonomy. We haven't always lived that 
goal. We fought a Civil War to make sure that goal proceeded, 
but it is a value we assert. It is certainly not a value we can 
ever sit back and accept to be compromised, especially by 
somebody in our employ.
    I just want to say to all the panelists today, we must show 
utter and complete passion for this subject. We must stamp it 
out so that it never even comes close to an association with an 
American enterprise at a contractor level, subcontractor level 
or, God forbid, a federal agency. It is unacceptable and must 
be snuffed out with all of the passion and all of the ability 
we have. That is what is behind this legislation in both the 
Senate and the House.
    This is not just any housekeeping matter. This is about the 
preservation of human autonomy, about making sure the people in 
our employ follow American norms. Otherwise, why are we in 
places like Iraq and Afghanistan. I just wanted to share that 
with you because I wouldn't want anyone to think this is just 
routine legislation. It is not. It has brought us together on a 
bicameral basis, as the Chairman said, and on a bipartisan 
basis, fiercely.
    We need your help to make sure that the passion we feel and 
we experience and the disgust and shock we felt at our first 
hearing you share and that you will go back to the State 
Department, to the Pentagon and other federal agencies 
understanding that is what drives and hopefully sharing in the 
mission to make sure we put an end to this practice as soon as 
    Thank you for being here.
    Mr. Chairman, thank you for your leadership and your 
bipartisan cooperation. I am privileged to join you as an 
original co-sponsor in this legislation.
    Mr. Lankford. Thank you, Mr. Connolly.
    All the members will have seven days to submit opening 
statements and extraneous materials for the record.
    Let me welcome our panel of witnesses. We look forward to 
hearing the conversation from them.
    The Honorable Luis CdeBaca is the Ambassador at Large at 
the U.S. Department of State. Ms. Cathy Read is Director, 
Office of Acquisitions Management at the Department of State. 
Ms. Evelyn Klemstine is Assistant Inspector General for Audits 
at the U.S. Department of State. Mr. Richard Ginman is the 
Director of Defense Procurement and Acquisition Policy at DOD. 
Ms. Sharon Cooper is Director, Defense Human Resources Activity 
at DOD. The Honorable Kenneth Moorefield is Deputy Inspector 
General for Special Plans & Operations at the U.S. Department 
of Defense. Thank you all for being here.
    Pursuant to Committee rules, all witnesses are sworn before 
they testify. Please rise and raise your right hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Lankford. May the record reflect that all witnesses 
answered in the affirmative. You may be seated.
    In order to allow time for discussion, I would like you to 
limit your testimony to five minutes. We will not be absolutely 
rigid on that, but as close as you can. Your entire written 
statement will be made a part of the record. Thank you for 
working hard to pull that written statement together for all of 
    I would like to recognize Ambassador CdeBaca to begin with 
five minutes.


    Ambassador CdeBaca. Thank you, Mr. Chairman and Mr. 
Connolly. It is an honor to be here today.
    I appreciate the series of hearings as an important part of 
the fight against trafficking in persons.
    As we know, the bipartisan Trafficking in Victims 
Protection of Act of 2000 and its subsequent reauthorizations 
continue to serve as a touchstone for all of our efforts to 
combat this crime both here and around the world.
    One of the tools that Congress gave us through the TVPA is 
the annual Trafficking in Persons Report. That report 
rigorously researched by my office and colleagues in the 
embassies and regional bureaus has become an unparalleled 
resource for determining how well governments are responding to 
modern slavery. It plays a critical role in our diplomacy and 
development priorities.
    Through the years, Congress has sharpened its analysis by 
adding several different things including an analysis of to 
what degree peacekeeping operations are driven by human 
    Today, we come together for another issue which is very 
similar. Reflected in what we have seen in the report over the 
last ten years, we have come to understand that the role of 
government need not be limited solely to law enforcement and 
victim services. As the report reflects, over the last decade 
we now know more about the market forces that drive modern 
    The forced labor taints the supply chain of products that 
consumers rely on every day. The labor recruiters profit 
through the use of unscrupulous and non-transparent practices 
that saddle workers with debts that they will never be able to 
repay. We know that a global market for cheap goods and 
commercial sex fuels the demand that the traffickers exploit. 
Concerned consumers are pushing more and more companies to do 
something about modern slavery in their corporate policies.
    As Secretary Clinton said earlier this month to her 
colleagues in the Cabinet, that knowledge becomes particularly 
important when you think about the government as a consumer, 
the government buying power. We conduct business on a global 
scale with a massive roster of suppliers and subcontractors and 
supply chain monitoring is not simply something for the 
business community.
    What we have learned about supply chain company responsible 
labor recruitment practices and honorable conduct, if we apply 
those lessons to government procurement, we feel there would be 
a ripple effect far and wide out into the private sector as 
    Using government's reach as consumers as a tool to combat 
modern slavery has been, for far too long, the missing link in 
this fight. All governments must do more to arrest traffickers 
and assist victims. When governments take up the cause of 
fighting modern slavery, their credibility is undermined if 
their own policies, procurement and personnel practices are 
inadvertently making the problem worse.
    Today's hearing comes at a critical time. At the recent 
Cabinet meeting, Deputy National Security Advisor Denis 
McDonough perhaps said it best, ``We recognize that across the 
government, there is still an awful lot to do to improve on 
this in terms of procurement of goods and labor, and the 
President is demanding that we do more in exactly this area.'' 
Indeed, the President that day issued a challenge to all of us 
to ``find ways to strengthen our current work.''
    We take his call to action very seriously at the State 
Department. For instance, to demonstrate our commitment, we are 
putting place new prohibitions on our contractors that will no 
longer allow them to charge recruitment fees to the workers. 
You will hear about that from my colleague Cathy Read from the 
Bureau of Administration.
    Through a subcommittee of the Senior Policy Operating 
Group, the interagency anti-trafficking organization, we are 
driving out anti-trafficking training for the federal 
acquisitions workforce. This is the sort of innovation that 
will be critical to the future of this struggle and as in some 
many other aspects of this important work, we must work with 
you, our partners in Congress, to keep delivering on the 
promise of freedom.
    I have been blessed to be able to help victims as they come 
out of trafficking when I was a federal prosecutor. I was lucky 
enough to be able to work on the Judiciary Committee in 2008 
when we reauthorized the Trafficking Victims Act, and now have 
the opportunity to help deliver on your work.
    During the Civil War, making it to the lines of the U.S. 
Army meant freedom for so many. We need to make sure that 
remains the case.
    Thank you and I am happy to take questions.
    [Prepared statement of Ambassador CdeBaca follows:]

    Mr. Lankford. Thank you, Ambassador.
    Ms. Read.

                   STATEMENT OF CATHY J. READ

    Ms. Read. Good morning, Chairman Lankford, Ranking Member 
Connolly and distinguished members.
    Thank you for the opportunity to testify on the Department 
of State's continued efforts to combat human trafficking and 
abusive labor practices involving third country nationals hired 
to perform services overseas and under contracts.
    My shop is responsible for 98 percent of the dollars that 
are obligated by the Department of State and I have 
approximately 200 acquisition professionals, both in 
Washington, Florida, Frankfurt and Antwerp who help support 
    Embassies, as you well know, have limited authority to 
procure supplies and local services. Generally, our most 
complex and largest contracts are issued from Washington, D.C. 
and monitored formally by our trained Contracting Officer 
Representatives who are actually on the ground.
    The subject of today's hearing is central to the Department 
of State's mission and also as a steward to the taxpayer. The 
Department has been vigorous in its efforts to ensure none of 
the contracts written by the Department are with contractors 
that would abuse their employees. We have identified programs 
which may result in the hiring of unskilled or semi-skilled 
labor from third world countries and TIP focus is on 
construction and renovation contracts for new embassy compounds 
for our Overseas Buildings Offices and Diplomatic Security 
    I would like to focus on some of the major initiatives and 
approaches we have undertaken at State to address the issues.
    Training, which is a big thing for us, we have implemented 
training on trafficking in persons in several areas at the 
Foreign Service Institute and in the training of our 
professional acquisition workforce. I have dedicated a senior 
contracting officer at FSI to help with the day to day COR 
training and TIP is part of that training. In fact, we utilize 
the DHS video which has been very successful and every 
graduating corps gets the ICE card to carry with them which 
notes indications that could happen under TIP.
    Our classroom COR training has a module on managing 
contracts in the difficult environments. CORs are instructed to 
work with both political and economic sections at post to learn 
labor practices and TIP and how they apply at their post. Other 
FSI training includes regional studies, political and counselor 
    We have implemented many of the CWC recommendations for 
oversight in Iraq and Afghanistan in our program. We developed 
a clear working relationship with the program offices, we have 
contracting officers embedded with our program managers at some 
of our senior program offices.
    We travel consistently all the time to Iraq and Afghanistan 
at various levels. When a CO goes out, they stay longer and 
they look at every program, not just their particular line of 
business. We have a direct hire project manager at many of the 
difficult posts with instruction or security staff to oversee 
housing areas. We have unannounced diplomatic security 
Diplomatic Security Regional Security Officers visits to 
compounds for all our local guards.
    Our Procurement Information Bulletin issued by our 
Procurement Executive, as you well know, came out last March 
2011 and just yesterday, our Procurement Executive initiated an 
released the new Procurement Information Bulletin which 
addresses housing and recruitment fees and is mandated. That is 
set for implementation now that it has been issued.
    In closing, I would like to note that our experience in 
recent years has reconfirmed the importance of hiring an 
updated, well trained, on the ground acquisition workforce in 
adequate numbers and ensuring that everyone is trained to the 
highest levels and that we have total collaboration among the 
    Contract administration, worldwide and especially in 
conflicted-affected states can be strengthened only through the 
hiring of personnel to provide additional governmental 
oversight of contractors and more importantly, their 
    Thank you very much for the opportunity and we welcome your 
    [Prepared statement of Ms. Read follows:]

    Mr. Lankford. Thank you, Ms. Read.
    Ms. Klemstine.


    Ms. Klemstine. Thank you, Chairman Lankford, Ranking Member 
Connolly and members of the Subcommittee, for the opportunity 
to discuss our views on strengthening enforcement of traffic in 
persons or TIP in government contracts.
    Our Office of Inspector General or OIG commends the 
subcommittee for its leadership in developing critical 
legislation on TIP enforcement.
    Mr. Chairman, OIG believes that TIP compliance can be 
better monitored by strengthening the legal framework for 
enforcing TIP compliance and prosecuting TIP violators by 
establishing requirements in future contracts and the Federal 
Acquisition Regulation or FAR and by holding Contracting 
Officers and Contracting Officer Representatives accountable 
for TIP compliance. In addition, the OIG will continue to 
vigorously perform its oversight role on this important issue.
    First, strengthen the legal framework. OIG supports a 
robust and comprehensive Civilian Extraterritorial Jurisdiction 
Act CEJA also the proposed Blumenthal Amendment to 18 U.S.C. 
Section 1351. CEJA would provide clear jurisdiction to 
prosecute non-Department of Defense employees and contractors 
for a broad range of overseas misconduct, some of which are TIP 
    We do, however, suggest CEJA use the same approach as the 
Military Extraterritorial Act and provide jurisdiction over all 
18 U.S.C. felony offenses. This provides the greatest 
flexibility for fighting crime associated with U.S. overseas 
    Second, establish specific requirements in future 
contracts. OIG supports the proposed amendments to the 
Trafficking Victims Protection Reauthorization Act, Section 
111, which would mandate the inclusion of certain TIP related 
provisions and contracts.
    In addition, future contracts solicitations, which include 
third country nationals, at a minimum, should require the 
following provisions: one, the contractor shall provide the 
agency a detailed description of housing accommodations it 
intends to provide for its foreign workers; two, provide 
workers with standard contracts in English and their native 
languages and include policies on wages, overtime rates, 
allowances and other personnel matters; three, provide workers 
with written information about labor laws, including the U.S. 
Government's zero tolerance policy about TIP in English and 
their native languages; four, provide written assurance that it 
violates no U.S., host country or third country labor laws; and 
five, provide the contracting agency a repatriation plan 120 
days prior to completion of the contract.
    All future contracts that use third country nationals 
should include penalties for TIP noncompliance. In addition, 
incentives should be used in the contracts that motivate 
contractors to police themselves and their subcontractors.
    In addition, we believe that modifying the FAR so that 
Combating Trafficking in Persons clause includes the same 
language found in the Contractor Code of Business Ethics and 
Conduct clause. This would require timely reporting of possible 
TIP violations to the OIG which is not currently required.
    Third, hold COs and CORs responsible for TIP oversight. COs 
and CORs are at the front lines around the world and must 
effectively monitor and enforce standards as well as report 
violations. The quality, quantity and location of the federal 
agency CORs are key to combating TIP.
    At all federal agencies, COR experience should be made as a 
desirable and sought after qualification. CORs should be made 
aware of the importance of their role and they should receive 
specific, regularly updated training on TIP.
    In March 2011, the Department issued Procurement 
Information Bulletin 2011-09 which provides COs and CORs with 
suggested actions to minimize the risk of TIP violations in 
government contracts.
    Although the PIB is a good starting point, much of the 
content of the guidance is not mandated within the Department 
and is not applicable to other federal agencies. Federal 
agencies should require their CORs to make at least semi-
annual, unannounced visits to the contractor-provided housing 
site and interview contract employees to ensure they have been 
briefed on the TIP clause and obtain copies of TIP-related 
training materials.
    The agency should also require that COs and CORs document 
TIP monitoring programs in their contract files.
    OIG will continue to perform audits, inspections and 
investigations in areas vulnerable to TIP abuses. Since the 
November 2011 hearing, OIG is conducting a follow-up review of 
its January 2011 report on TIP for the Arab States of the Gulf. 
OIG inspections will continue to review TIP-related contract 
provisions and oversight in the course of post inspections.
    Our Office of Investigations has been engaging other 
federal investigative organizations on ways to broaden 
involvement in combating TIP abroad. Since November 2011, 
Investigations has received two TIP-related allegations and one 
TIP-related investigation remains open.
    Once again, thank you and I am pleased to answer any 
questions you may have.
    [Prepared statement of Ms. Klemstine follows:]

    Mr. Lankford. Thank you.
    Mr. Ginman.


    Mr. Ginman. Chairman Lankford, Ranking Member Connolly, 
thank you for the opportunity to appear before you today to 
discuss our efforts to combat trafficking in persons.
    I commend the Subcommittee for the work that it has done to 
identify trafficking in persons issues affecting government 
contracts and in searching for solutions to these issues. A 
commitment to combating trafficking in persons is an essential 
requirement in any U.S. Government contract.
    At the end of the 1990s, the Department of Defense 
implemented a deliberate strategy to reduce reliance on organic 
forces for combating service support in favor of contracted 
support. During Operation Iraqi Freedom and Operation Enduring 
Freedom, the rate of growth of contracted support challenged 
DOD to put a framework necessary to properly manage and control 
contractors in forward contingency areas, including aspects 
related to the personnel on the battlefield.
    The growth of contracted combat service support resulted in 
an expansion of contractor personnel working and residing on 
forward operating bases including many personnel from third 
country nations and local nationals. Department policies and 
doctrine associated with managing these contractor personnel 
continues to evolve.
    The Department takes seriously its responsibilities in 
combating trafficking in persons and we need to ensure we 
properly manage and oversee all contractor personnel authorized 
to accompany the force regardless of origin.
    Like the Committee, Defense is committed to finding 
solutions that improve our ability to eliminate trafficking in 
persons. As the Director of Defense Procurement and Acquisition 
Policy, I am responsible for promulgating contracting guidance 
to the Department's entire contracting workforce.
    With regard to trafficking in persons, my top priority is 
supporting the Federal Government's and Defense Department's 
zero tolerance policy. We support the Office of Under Secretary 
of Defense for Personnel Readiness and their efforts to manage 
the DOD Trafficking in Persons Program required by the Traffic 
and Victims Protection Act of 2000 and subsequent 
    The Department is determined to identify, correct and 
prevent contracting efforts not in consonance with our 
government's and Department's zero tolerance policy and to work 
to identify and implement new policies and procedures that will 
reduce and/or eliminate trafficking in persons. We will 
continue to aggressively pursue addressing trafficking in 
persons challenges associated with the Department's contracts 
executed worldwide.
    I thank you for the opportunity to speak today about the 
Trafficking in Persons Program at the Department. This 
concludes my remarks and I ask that my statement be inserted in 
the record.
    [Prepared statement of Mr. Ginman follows:]

    Mr. Lankford. Absolutely, without objection.
    Ms. Cooper.


    Ms. Cooper. Thank you, Mr. Chairman.
    Good morning, Mr. Chairman and Ranking Member Connolly.
    My name is Sharon Cooper and I am Director of the Defense 
Human Resources Activity. It is a field activity in the Under 
Secretary of Defense for Personnel and Readiness.
    It is an honor to be with you this morning to discuss the 
Department of Defense Combating Trafficking in Persons policy, 
procedures and the way ahead. Trafficking in persons is a 
violation of human rights. It is both dehumanizing and cruel 
and has no place in the defense environment. The Department of 
Defense has been working to bring an end to this injustice 
since 2002 through training, education and regulation.
    The Department requires all personnel to receive training 
on combating trafficking in persons. In 2011, over 1.2 million 
Defense personnel were trained. The Deputy Secretary of 
Defense, Ash Carter, just last week announced that we will 
begin training all contractors. The Program Office will begin 
working with AT&L, Mr. Ginman's office and also the Defense 
Acquisition University to start this training immediately.
    The training is also supplemented through anti-traffic 
public service announcements over the Department's television/
radio spots and the most recently designed mobile applications 
through iPhones and Blackberrys.
    The Department's TIP Program office is manned by two 
dedicated personnel supported by 53 service and agency contacts 
with administrative support from the field activity. I am 
pleased to report that in the coming weeks, a Defense Contract 
Management Agency representative will be onboard to assist the 
Program Office in its outreach to all personnel to include 
contractor employees.
    The Department is in the beginning stages of a strategic 
plan designed to implement practices to ensure contractor 
compliance and measures to protect workers under appropriate 
law. The details of this plan, which is a working document, 
were sent to the subcommittee last month. To work on the plan 
and to ensure its relevancy, a multiagency, multidisciplinary 
CONUS and OCONUS Task Force has been established. This task 
force will provide recommendations for improving the 
Department's current TIP practices to include more robust data 
collection, increased oversight and strengthen contract 
procedures. The first meeting of the task force is schedule for 
next week on April 4.
    I have had the opportunity to read the legislation recently 
introduced, the End Trafficking in Government Contracting Act 
of 2012. To the best of my knowledge, the bill has not been 
reviewed by the Department. My view, however, is that many of 
these areas we are targeting in the strategic plan and that Mr. 
Ginman and I have been discussing can be found in the 
legislation. I am certainly supportive of all efforts to 
strengthen our ability to hold appropriately accountable all 
who allow or engage in TIP-related offenses and conduct.
    In addition to the Strategic Plan, the TIP Program Office 
is working with DCMA to facilitate a visit to overseas 
locations to discuss with contractors and contractor employees. 
DCMA is our responsible body that is on the ground to oversee 
the Department's contract compliance.
    There is more to do. I look forward to continuing to work 
with my partners in the Department of Defense and throughout 
the Federal Government to strengthen the Department's oversight 
and enforcement mechanism in support of the U.S. Government's 
zero tolerance policy against trafficking in persons.
    Thank you again for the opportunity to update you on this 
important issue.
    [Prepared statement of Ms. Cooper follows:]

    Mr. Lankford. Thank you, Ms. Cooper.
    Ambassador Moorefield.


    Ambassador Moorefield. Good morning, Chairman Lankford, 
Ranking Member Connolly and distinguished members of the 
    Thank you for this opportunity to again discuss oversight 
reporting on combating trafficking in persons by the Department 
of Defense Office of Inspector General, a goal to which we all 
are vigorously committed.
    Previous DOD IG assessment reports have resulted in the 
Secretary of Defense Policy Instructions that set forth clear 
DOD opposition to any activities promoting, supporting or 
sanctioning human trafficking and also provided guidance that 
assigned CTIP Program responsibilities across the Department. 
In addition, CTIP awareness training, which remains an annual 
requirement, was established for all service members and DOD 
    Most recently, in January 2012, DOD IG issued the last of 
three annual reports requested by the Congress on a sample of 
contracts or subcontracts under which there is a heightened 
risk the contractor may engage in acts related to trafficking 
in persons. These assessments covered, in annual sequence, the 
Pacific, Central and European and Africa Commands, areas of 
contracting operations.
    One key observation from these reports was that the most 
current FAR clause was not properly included in a significant 
number of the contracts reviewed. Although some form of the 
CTIP clause was present in most contracts. We also observed the 
contract quality assurance plans did not always include reviews 
of contractor CTIP compliance, although the Defense Contract 
Management Agency had included CTIP in quality assurance 
inspections of contracts in the Central Command theater of 
    Finally, we reported that DOD contracting officers were not 
being advised about TIP related criminal investigations once 
they were concluded by DOD law enforcement organizations, thus 
precluding subsequent consideration of administrative 
contractual remedies. The Department has taken or is taking 
corrective actions in each of these areas.
    During this latter review, we identified best practices as 
well, such as the post contract award orientation reviews of 
FAR, CTIP clause requirements held by European Command 
contracting personnel.
    In addition to the combat and command contract reviews, DOD 
has initiated an assessment of CTIP Program compliance and 
performance by DOD components. This review will also 
incorporate best practices and lessons learned for application 
by DOD worldwide, especially as they would apply to contingency 
contracting environments. We expect to issue that report in the 
April time frame.
    Also, DOD IG has been conducting an assessment of the DOD 
CTIP Program in Afghanistan. Our team has examined 240 
contracts administered by Army, Navy, Air Force and Defense 
agencies performed in Afghanistan. It found the current 
mandatory CTIP clause in 93 percent of the contracts reviewed, 
a significant improvement when compared to previous 
    During its Afghanistan field work this February, the team 
visited nine separate military installations, conducted 110 
interviews with military commanders and contracting personnel, 
met with representatives from 10 U.S. and foreign contracting 
firms, and with 145 contractor employees, both Afghan and third 
country nationals.
    The team learned of several incidents of alleged or 
confirmed contractor TIP violations. A DOD criminal 
investigation into a report of DOD contractor abuse is still 
ongoing. The team also was informed that an Afghan company 
under DOD contract had committed trafficking violations and as 
a result, the U.S. military contracting officer has recommended 
    Additionally, the team received information from third 
country nationals working on a DOD contract at a U.S. military 
base alleging they were living there in unsanitary conditions. 
The complaint was referred to DOD contracting authorities and 
the military base commander who initiated an immediate 
    The team also found that third country national personnel 
value the pocket-sized workers rights cards recently issued by 
DOD in their own languages and the public service announcements 
on TIP were regularly transmitted to DOD personnel by the Armed 
Forces Network and via social networking sites. However, the 
CTIP oversight challenge continues, particularly given the 
extent of reliance on contractors and TCN labor in Iraq and 
Afghanistan and even as that reliance begins to diminish.
    The House and Senate CTIP legislation proposed recently 
will, I believe, enhance oversight, investigative capability 
and sanctions of violations.
    In closing this morning, let me emphasize that the DOD 
Office of Inspector General remains committed to providing 
oversight support of the U.S. Government's zero tolerance 
policy against trafficking in persons. In this regard, we will 
continue to evaluate DOD's CTIP performance and compliance and 
report the results to the Congress and the Department of 
    I thank you again for this opportunity to discuss DOD IG 
CTIP oversight work.
    Thank you.
    [Prepared statement of Ambassador Moorefield follows:]

    Mr. Lankford. I thank all of you for the work and the focus 
on this. In our conversation before this hearing started, I 
told you this is not combative, this is trying to get all our 
heads together to figure out how to solve this. There are 19 
different policies and procedures that previously exist and in 
our hearing in November, the conversation was though we have 
many policies in place, it continued still. We are still 
discovering it and where it is popping up.
    Though we have zero tolerance, it has been a rare moment to 
see a suspension or debarment. I am glad to hear about that 
already moving forward at this point. It has been rare to get a 
chance to see the actual engagement. We seem to be zero 
tolerance in word but not always in action as we go through it.
    Let me ask a quick question. The legislation that is being 
proposed, some of these ideas that came directly from some of 
you, things you saw to be strengthened. Where the gaps are is 
one of the thing we asked before with 19 different policies and 
procedures, what are we missing? Let me run through some of 
these things quickly and see if there is any one that would say 
there is an issue with this.
    I understand you are not speaking somewhat in your official 
capacity though you are in a hearing because the agencies 
haven't made any official statement on this one way or the 
other, but just your personal perspective on it: certification 
for contractors, they have to certify they do have a process in 
place to prevent trafficking in persons; IG reporting, clarity 
of defining what trafficking includes instead of a broad 
definition, trying to get some specifics in it; penalty options 
and laying those out in greater clarity; and also extending 
legal protections to overseas contracts as it would be in the 
United States, extending that to the United States operations 
    Does anyone have a problem with any of those? That is the 
core of this piece of legislation. Do you want to make a 
comment on any of those?
    Mr. Ginman?
    Mr. Ginman. I have no issues at all with the legislation 
that I read.
    Mr. Lankford. Any questions, observations or anything on 
    Ms. Cooper. I would just like to reiterate that we welcome 
the legislation and that it seems like it will strengthen our 
ability to hold accountable those who engage in these acts.
    Mr. Lankford. Accountability seems to be a big issue. As we 
discussed in the previous hearing as well, we are sending third 
country nationals back to their home country bitter at America 
rather than speaking of American values. That is the exact 
opposite of what we want to occur. We want goodwill spread 
across the world that they know if they come and work for 
Americans, they will be treated fairly, treated with honor and 
will take that same passion for liberty back into countries 
that struggle with the issues we can provide to them as a 
beacon of light. This is a very big issue for all of us and how 
we are going to take this on.
    Mr. Ginman, let me comment on the zero tolerance connection 
because this is a common statement that everyone has mentioned. 
There as been a historic issue on that. Ambassador Moorefield 
mentioned that we have a debarment that is in process that has 
been recommended. Do we know of other debarments for 
trafficking in persons that have existed? This has been 
something we have tried to investigate. How many suspensions 
and debarments are out there based on trafficking in persons 
that we know of, even in the last several years?
    Mr. Ginman. We have identified two referred to the 
suspension an debarment official in the Army. One was dropped 
for lack of evidence, so it was not substantiated, I think is 
the correct phrase. The other, the company was, in fact, 
    Mr. Lankford. That was recently?
    Mr. Ginman. I want to say it was in 2011.
    Mr. Lankford. Ambassador Moorefield, this is another one 
you are discussing that is even more recent than that?
    Ambassador Moorefield. Yes, it is. Because it is an Afghan 
company, regardless whether or not it is an Afghan company, 
there is an appeals process which is apparently going to be 
triggered, so that is why we don't have a final determination. 
Frankly, the evidence seemed pretty clear to our team on the 
    Mr. Lankford. That is a positive thing for us because one 
of the frustrations that Mr. Connolly and I both mentioned as 
we went through the previous hearing was there was a lot of 
conversation about it, there was a lot of sense of this is 
occurring, but we are not taking the next step to say, what do 
we do on just the very low threshold of suspension and 
debarment and start moving on that.
    The training you mentioned as well, especially on the DOD 
side and State, let me again bring up something. I spoke with a 
United States Marine MP coming back from Afghanistan in October 
of last year. I asked them specifically about trafficking in 
persons and third country nationals, living conditions, and 
some of the dynamics. They spoke very frankly and honestly 
about the things happening in Afghanistan at their particular 
base. This was an MP who know what was happening, that knew the 
dynamics on the ground, who was very aware that many of these 
people had been trafficked.
    My question to them was do you know where to report this? 
That MP said no. He was aware of it happening, but an MP on the 
ground in Afghanistan at one of our bases did not know where to 
report that. While training does need to accelerate, finding 
the people like the MPs, people who will notice it and see it 
so it is not just a broad brush of all employees and of all 
staff, people have a sense of feeling responsibility for that, 
to say it is my responsibility if I see to turn that in, not 
just I see, I don't know what to do about it, but that is still 
ongoing in that work. Ms. Cooper?
    Ms. Cooper. Mr. Chairman, if I may, on training, we do have 
specific law enforcement training we are updating now to do 
exactly that. It is something we hope to get out very, very 
quickly. There are three types of training: the general 
training, a supervisor leadership training which is 
supplemental to the general training,; and then there is the 
law enforcement training that we are working on and now we will 
be having contractor training.
    Mr. Lankford. That is terrific. Obviously that is an area 
we can get a chance to step up on then.
    You also mentioned the task force that is meeting April 4. 
Ms. Cooper, can you give me more detail on that?
    Ms. Cooper. The task force with the Strategic Plan, we 
decided rather than created something in a vacuum, we would 
have something that would be made up of different parts from 
the Department: AT&L, Policy, PNR and DCMA. We would also be 
working with the other people in the Federal Government to work 
both overseas and CONUS in the United States to look at 
contract policies, to look at best practices, to look at is 
what is in the DOD regulations now.
    I have been working with Mr. Ginman and his staff to decide 
what it is and this task force will actually look at the thing 
we are doing. It really is a blueprint of what we want to do, 
it is a working document. Just since we sent the information to 
you in February, I have decided that data collection is 
something. I was reading what the IG said and the data 
collection is something we really need to focus on more so that 
we not only collect it but actually take the data we know and 
the cases we know and put them out to the law enforcement 
agencies and to the contracting offices so they know what is 
out there.
    We are going to get a subcommittee working on the Defense 
Manpower Data Center that holds all of this data and how has 
the overseas contracting data which was just transferred to 
them earlier this year and they will be working with us on 
that. That is what we are trying to do with the Strategic Plan.
    Mr. Lankford. I would like to recognize Mr. Connolly for 
    Mr. Connolly. Thank you, Mr. Chairman, and thank you all 
for being here.
    Listening to the testimony, it sounds like we have made a 
lot of progress on getting the policies in place that are 
right, upgrading the training so that the awareness is 
hopefully universal, and helping people understand what 
constitutes compliance.
    I am still focused on implementation because frankly, if 
the message doesn't get out on the field, if people kind of 
turn a blind eye and it is enforcement by complaint rather than 
proactive enforcement, if people knew the United States 
Government is going to be the scourge of God, the one thing you 
don't want to do ever, is even look like there could be an 
instance of human trafficking because we will come down on you, 
like I don't sense that is yet the standard.
    That has to do with implementation. It also, of course, is 
a function of resources. For example, are we randomly and 
routinely checking housing for people who have been hired by 
contractors and subcontractors in our overseas operations to 
satisfy ourselves that bad things are not going on, that it is 
not substandard housing, but also oh, by the way, the more 
pernicious aspects particularly of this subject are not 
occurring? Let me start with you, Ambassador Moorefield.
    Ambassador Moorefield. The Defense Contract Management 
Agency has included housing inspections as part of their 
regular, periodic inspections of third country national living 
conditions. We are reasonably confident that it is, both in 
Iraq and Afghanistan, getting an overview.
    One of the things we noted in the recent Afghanistan 
assessment is you have an estimated 35,000 employees spread 
across a very large country in many different sites. Moreover, 
there is regular turnover of those employees, so I think one of 
the things we deduced from this is that you need to step up 
probably the periodicity of that oversight because things may 
be kosher right now and six months from now, the situation may 
have changed, contractors change and turnover.
    You have Afghan contractors also now in the mix using third 
country national employees, so the challenge has not 
diminished. If anything it has slightly stepped up, so we will 
make sure we share anything we have learned that could be of 
constructive value to the Department in this respect.
    Mr. Connolly. These are unannounced inspections?
    Ambassador Moorefield. Frankly, I don't know the answer to 
that question.
    Mr. Connolly. Wouldn't you agree that sort of would be 
important so that we are all on our toes?
    Ambassador Moorefield. Yes, I would agree. They are 
    Mr. Connolly. Okay, they are unannounced. What about the 
State Department in this respect?
    Ms. Klemstine. I can address that on two points. First of 
all, our recent follow up of last year's 2011 report where we 
had indications of TIP violations, we have gone back to those 
Arab States and we found that in some cases, the housing had 
improved, but in other cases, the housing got worse. We are 
going to report on that and expect to issue a report in May, 
but we were kind of dismayed to find out that conditions in 
some places had, in fact deteriorated.
    In addition to that, we have an ongoing effort where we are 
doing what we call surprise spot checks. This has also been 
agreed to by the Ambassador in Afghanistan and he 
wholeheartedly has supported this idea. We have run into some 
roadblocks lately because of travel restrictions within the 
country but our plan is to go and do spot checks. We have a 
list of contractors and as soon as we have clearance to get to 
some of the sites, we plan on doing that.
    Mr. Connolly. Let me ask both of you while I have a little 
time, both the Pentagon and the State Department, you can 
decide who wants to answer, in our previous hearing, the 
inference was drawn that when look you at metrics, how many 
cases have been referred for criminal prosecution? I think the 
State Department was zero and not much better for the Defense 
    When you look at the recommendations for debarment or 
suspension, we are celebrating one. We have thousands, tens of 
thousands of contractors and subcontractors. I don't want an 
arbitrary metric, make sure your number is up, but the fact it 
would be close to zero suggests we are not taking 
implementation and enforcement as seriously as we could because 
that is the ultimate hammer we control, prosecution and status 
of ability to affect contract or subcontract with the Federal 
    In the brief period we have, I would be interested in 
hearing from this panel what can we, what must we do to toughen 
up that enforcement and to have more rigorous metrics so the 
word gets out that we mean what we are saying?
    Mr. Ginman. On Ambassador Moorefield's comment, in the 
theater, they are done on an unannounced basis. On our LOGCAP 
contracts, it is done bimonthly and on our other contracts, it 
is done monthly. DCMA, in fact, looks at all contractors and 
all subcontractors if they are within what we call the wire, 
inside the bounds, of a FOB.
    In February of last year, DCMA expanded their costs to 
expressly go ask the questions and take a look at what is the 
housing and where it is. It is the Department's preference that 
when we find issues, we want them corrected. They have a 
process within the Contract Management Agency called Corrective 
Action Reports that if something is identified rather than to 
immediately throw it into prosecution, we would much prefer 
whatever the issue is be corrected and move on as opposed to 
looking to do that.
    Mr. Connolly. Mr. Ginman, if I could just interrupt, if the 
Chair will indulge.
    Mr. Lankford. Absolutely.
    Mr. Connolly. I understand that as a modus operandi and it 
is a preferable modus operandi, of course, but when you are 
talking about human trafficking, if you stumble upon a 
situation where a contractor or subcontractor working for us is 
running a brothel and has lured women from a third country 
under false pretenses and, by the way, made them pay for the 
privilege of it, that to me isn't corrective action, that is 
you are out of here. We are going to help liberate these women 
and we are going to make sure you can never do business with or 
for the United States Government again.
    Mr. Ginman. In every circumstance, it would be as you just 
described, I would absolutely agree it should be passed to the 
Criminal Investigative Division.
    Mr. Connolly. Has it been?
    Mr. Ginman. To my knowledge, when things are found that 
are, in fact, illegal, they are passed to the investigative 
groups, either NCIS to CID, to the Air Force or to the Defense 
Criminal Investigative Division.
    Mr. Connolly. I would just remind you that in our previous 
hearing in November, the undisputed testimony we received 
undisputed was that almost never happens.
    Mr. Ginman. What I don't have insight to, to Ms. Cooper's 
comment on collecting of data, how many have been referred. 
That is not data we do have. I don't have insight into the 
investigative arms as to the outcome, did they investigate, did 
they find something or not. On the policy side, we don't have 
insight to what goes on.
    Mr. Connolly. All right, but I hope you understand where I 
am coming from. I am all for getting the policy right and it 
sounds like we are doing that but it has to be backed up top 
enforcement. Otherwise, it is meaningless.
    Mr. Ginman. I agree with that. The Chairman asked me before 
the hearing started about things we looked at recently that 
were not addressed before. The certification requirement you 
have in your legislation I think goes a long way to have 
certification. In looking at what was our first opportunity, at 
least from a contracts perspective, to determine where the 
hiring practice is inappropriate to start with.
    We have a requirement before U.S. contract personnel or TCM 
contract personnel go into theater to go through what we call a 
reception center. We have not been asking the question at the 
reception centers specifically as third country nationals are 
coming in, how were they hired and where were they and ensuring 
they are given the brochure we filled out, ensuring they have a 
labor contract.
    In talking with DCMA, we are going to look to now make that 
a requirement so we have a better opportunity but I don't have 
insight, and what we haven't been able to think through as an 
approach, is if somebody is hiring in India, in Malaysia or in 
an overseas environment, how do we look at that hiring practice 
and how that is done? Our first real opportunity to touch will 
be when the third country national shows up at a reception 
center and asks at that point in time. We intend to go down and 
add that to our bag of tricks to be able to do that.
    Mr. Connolly. Thank you. Thank you, Mr. Chairman, for your 
    Mr. Lankford. Absolutely.
    Let me just ask a couple questions of State as well.
    One of the things we have pursued, and we talked about it 
at length in the November hearing, was the recruiter fees. That 
seems to be where we are running into people in debt bondage. 
Basically, no matter what you ask when they arrive, they know 
they have to stay here, they have to work this off because they 
have a tremendous debt back home and can't afford to mess up 
because they are trapped at this point.
    State is recommending, if I am picking up from your 
recommendations, no recruiter fees at all. Several countries 
allow some minimal amount of recruiter fee in their law or 
maybe up to one month of their salary. You are recommending a 
no recruiter fee at all at that point, did I hear that 
    Ms. Read. Yes, and in the procurement PIB that just came 
out yesterday from our procurement executive, he notes that 
contractor and subcontractors shall only use bona fide, 
licensed recruitment companies. All that has to be submitted in 
writing and it would state in the offer, this would be the 
recruited employee, would not be charged recruitment or any 
similar fee.
    Mr. Lankford. Licensed by the country of origin or licensed 
by us?
    Ms. Read. It must be by the country of origin. We just got 
this yesterday, so we are just going through this. Any contract 
exceeding $150,000 where performance will require the 
recruitment of non-professional, third country nationals, any 
offeror is required to submit a recruitment plan as part of the 
proposal. This isn't suggested, this is a shall, which we are 
very pleased about, and also a housing plan which is also one 
of the difficult areas.
    Mr. Lankford. The housing plan, basic stipulation for space 
or for availability? What is the basic criteria on the housing 
    Ms. Read. Submitting acceptable plans as appropriate and 
living conditions, we are going to our overseas building 
operations inspection protocol for inspection of temporary 
labor camps. Inspections shall be coordinated with the RSO, 
should include a commonsense living evaluation into conditions 
taking into account local standards.
    Mr. Lankford. What about the contracts and rights in their 
native language as well as English?
    Ms. Read. That is there as well. There is the whole housing 
plan. Contractors shall provide all employees with a ``Know 
Your Rights'' brochure and document that employees have been 
briefed, here is the English version and contractor shall 
provide employees with signed copies of their employment 
contracts in English and the employee's native language.
    Mr. Lankford. That is new as well?
    Ms. Read. That is brand new.
    Mr. Lankford. Because there was some consideration, DOD has 
tried to take that on as well; State seems to be fairly recent 
in trying to add that, in their native language as well as in 
English. That is good to hear.
    Tell me about the role of the course and the follow up. 
That came from everyone at this point, to try to do the follow 
up on that because I agree with Mr. Connolly, it is great to 
have the policy on that, it goes back to our zero tolerance 
policy, but it doesn't matter if we actually never prosecute 
and go through the process, if we don't have someone to follow 
up on it.
    Again, when I was in Afghanistan back in December, I asked 
some contract officers on the ground, who is following up on 
this to try to get the process and see what is happening with 
it for the CORs who were there, how is this happening in real 
    Ms. Read. I will take that one. For State, it is a three-
prong approach. It is the contracting officer at the COR, then 
we also consider it a management initiative. The contracting 
officers travel frequently all the time to Iraq and 
Afghanistan. For Iraq specifically, for the Diplomatic Security 
Corps and also the overseas building operations, we have the 
COR, before they go out in theater, meet with the respective 
contracting officer and also at a higher level, one of my 
division directors.
    Before they are ever nominated for COR, these are our top 
notch CORs that go in the field, they all meet together. We go 
over trafficking in persons, we assist whatever questions they 
may have. They also are updated with COR training if they so 
need it, they may actually be up to date and don't need a 
refresher, and they actually live on the man camps, both in the 
Afghanistan diplomatic security end and also in the Iraq man 
    We implemented all contracts, we double check, they all 
have the TIP clause in them and then when my contracting 
officers go on travel, which there are no real announcements 
but everyone knows with the country clearance they are coming 
in, they hit all of those posts, all those places in Iraq, so 
Diplomatic Security CO can visit an OBO man camp and in fact, 
that is how we discovered the one problem in Iraq that we had. 
COR came back, said we have substandard living conditions, not 
necessarily a TIP but substandard living conditions.
    Mr. Lankford. Ms. Klemstine, is this the one you are 
referring to or a different one?
    Ms. Klemstine. No, the one I am referring to is in neither 
Afghanistan nor Iraq, it is another Middle East country.
    Mr. Lankford. We will come back to that. I am going to let 
you finish.
    Ms. Read. The COR came back to the one of my COs and said, 
we have a living condition issue here, it is substandard. We 
reached out to the vendor, who was an American prime who had a 
subcontract in-theater, and we said, fix it now. My CO was 
having to travel two days later. The CO got on the ground, it 
wasn't fixed and we shut down the man camp. We referred it and 
right now, it is pending with our suspension and debarment 
official. They can revisit it to look at contingencies there.
    Unrelated to that but somewhat similarly related, we ended 
up TforD'ing that prime contract because they could not 
proceed. They had failure to make any sort of forward movement. 
That one is not suspended or in debarment yet. We issued the 
note from the procurement shop and that one is ongoing.
    What I believe is only because the COR knew what to look 
for and related back immediately to the CO back here and then 
that CO traveled out, that was our two prong. What I do at my 
level, and I think it is very important, is we bring in all the 
vendors, all of our IDIQ contractors for diplomatic security, 
we did this a month ago, at the highest levels, they are CEOs 
and COOs, and we discussed issues.
    We discussed how often they have compliance officers come 
into their corporation and they are visiting, so they come in 
quarterly; we talked about TIP on the field and we warned them 
in a nice, firm manner that if there are any issues, they will 
not be around.
    Mr. Lankford. We would appreciate that in a nice, kind 
manner as well, that you would pass that on because this is not 
something we need to export, people bitter at the United States 
of America back to their third world countries. It just doesn't 
share our values.
    Ms. Klemstine, you mentioned and I want you to give more 
detail, you said it is not in our contingency theater at all.
    Ms. Klemstine. No. During our follow up review, one of the 
countries we went to was Saudi Arabia. Previously reported on 
living conditions in Riyadh and time, we found the conditions 
had improved in Riyadh but had deteriorated in Dammam.
    Mr. Lankford. Are there things you would want to be able to 
respond to from your report, give us an advance on it?
    Ms. Klemstine. I would rather wait a little bit because the 
report is still in the process of being reviewed.
    Mr. Lankford. Okay, so you are going to leave us out there 
in suspense?
    Ms. Klemstine. Yes.
    Mr. Lankford. We will take that. Are there other comments 
from other folks here?
    Ambassador Moorefield. I would just add one thing, Mr. 
Chairman. We looked at some recent statistics regarding 
investigations conducted by our Defense Criminal Investigative 
Service, which is part of DOD IG, and out of 21 investigations 
they have conducted, 16 were in OCO countries. Of those 16, 3 
were presented to the Department of Justice.
    I can't respond to what happened to them at Justice, that 
is of course, internal to them, but 16 cases investigated in 
OCO countries out of 21 and 3 referred to the Department of 
    Mr. Lankford. Mr. Connolly?
    Mr. Connolly. Thank you, Mr. Chairman.
    I am just going to ask one question but Mr. Chairman, we 
are going to work up some questions about metrics and I would 
like to do it jointly with you, if you like, and would ask the 
witnesses to get back to the Committee in writing or by email 
with respect to those questions with a little more depth on 
metrics so we are creating a baseline.
    Ambassador CdeBaca, other than your testimony, you have not 
said anything in this panel. Your portfolio is in human 
    Ambassador CdeBaca. It is, sir, although I think since our 
contracting professionals are carrying a lot of the weight, I 
am content to wait to be called on.
    Mr. Connolly. Well, I am calling on you. My one and only 
question is to give you an opportunity to share your insights 
with us in light of what you have heard and the questions 
coming from us in terms of the nature of the concerns we, in 
Congress, have and I am very gratified at the testimony today 
in terms of we clearly share common objectives and that is good 
but I want to give you an opportunity and that is my one and 
only question, Mr. Chairman.
    Ambassador CdeBaca. Thank you, Mr. Connolly.
    One of the things that struck me as I was listening to the 
other panelists was in last year's trafficking report, we 
actually had a sidebar on optimal regulatory approaches for 
labor recruiting, not specific to government contracting, but 
labor recruiting in general. That can be the folks that are 
building those high rises in the Gulf, those could be folks 
coming to work for folks as a nanny in another country.
    Ticking those off, not only do I hear a lot of that from 
the other panelists in reviewing the draft legislation, with 
the caveat that we don't have official positions on it, that 
notion of the recruitment fees being dealt with, that there is 
actual competition among the recruitment agencies so that it 
has better services offered to the workers, enacting criminal 
laws that penalize fraudulent recruitment, imposing sanctions 
on private recruitment agencies that break the law, have 
compensation mechanisms for the workers, vigorous 
investigation, and adequate complaint procedures to actually 
identify and examine allegations of violations.
    That is not only the optimal approach we are suggesting for 
the rest of the world, but in the legislation that has now been 
introduced, I think it is something hopefully will bring the 
United States to the level we are suggesting to other 
countries. We very much appreciate that.
    As a former prosecutor that did human trafficking cases, I 
think the expansion of the exterritorial jurisdiction to make 
it clear that the fraud and labor recruiting provision of the 
2008 Trafficking Act, which was such an important addition to 
the arsenal of the federal prosecutors, making sure that is 
available because it does get a bit murky when you are talking 
about the TCNs, especially if they are on a military base in a 
place where there are restrictions of movement applied to 
everyone. Things we would normally use as evidence of 
enslavement, were that to happen in the United States, may be 
present for everyone on that base, as far as not being able to 
come and go.
    This opportunity to also use the fraudulent recruiting and 
take that step back and really have the protections in there 
seems to be a good one. I will defer our colleagues at the 
Department of Justice as to what their official response is to 
that provision, but I would have very much appreciated having 
that when I was a prosecutor.
    Mr. Lankford. Mr. Kelly is recognized.
    Mr. Kelly. Thank you, Mr. Chairman.
    I really would just like to take this opportunity, first of 
all, to thank you for H.R. 4259. I think one of the things in 
being elected and coming to Congress is that you start to find 
out about things you never would have known about in your 
private life. I thank the panel for being here today too.
    These hearings really give us an opportunity to present a 
picture that most of our fellow citizens have absolutely no 
idea even exists, almost to a point that we have become naive 
or believe that the rest of the world really operates at a much 
higher level of decency than what I have come to know. I know 
we share a lot of these same concerns.
    I-90 in the upper part of the district that I represent is 
one of the areas where a lot of this trafficking takes place. I 
know we are talking now about DOD and labor people being 
brought in but the frequency and the overwhelming number of 
people involved in this is so appalling to me and the fact that 
it has become such a huge part of a business model where people 
are used as chattel property throughout the world is appalling, 
appalling to most of us as Americans and yet it happens with 
such great frequency and has such a cost in the human 
    I applaud you for what you are doing, I thank you for 
having this hearing and Mr. Connolly, these are the things that 
we really can make a difference in, and what you are doing 
really makes a difference to the rest of the world. Those the 
United States is taking a lead in, we are starting to talk 
about these things in such an open forum and from a platform 
that really needs to be spoken from much more often.
    Again, I just wanted to take the opportunity to thank you, 
Mr. Chairman, for your piece of legislation and Mr. Connolly, 
thank you, and to say this is something that keeps you up at 
night. It is one of those things where you get really tired and 
fall asleep but you wake up in the middle of the night and say, 
we have to be able to fix this, we have to be able to do 
something. It is not just something we need to do, it is 
something we absolutely have to do.
    I thank you all for being here and for being on the panel 
and making more Americans aware of what is going on.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Lankford. Thank you.
    It is a reminder that the American value is not the same as 
the rest of the world so when we hire a foreign contractor or 
subcontractor to be able to come in and provide labor, we have 
to be diligent to make sure they share our values and how they 
bring in a workforce. I do appreciate that.
    Talk is cheap and we have had multiple moments of 
discussing it to death. I am glad to be able to hear the 
actions you all have already taken and will continue to take. 
We are looking for a partnership from you to say you are going 
on the ground working on this all the time, you are face to 
face with the people and have the accountability for it. I 
appreciate your diligence and focus on it.
    We need to know what we can do to help to continue to send 
the message and also provide legislation that says we do want 
to help support this and make sure we are exporting our values 
around the world when we interact with people from around the 
world who work with us.
    With that, thank you very much for your testimony and your 
    We are adjourned.
    [Whereupon, at 11:34 a.m., the subcommittee was adjourned.]