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





                       BUDGET HEARING--THE OFFICE
                         OF FINANCIAL RESEARCH

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                      OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 19, 2012

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 112-118


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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                   SPENCER BACHUS, Alabama, Chairman

JEB HENSARLING, Texas, Vice          BARNEY FRANK, Massachusetts, 
    Chairman                             Ranking Member
PETER T. KING, New York              MAXINE WATERS, California
EDWARD R. ROYCE, California          CAROLYN B. MALONEY, New York
FRANK D. LUCAS, Oklahoma             LUIS V. GUTIERREZ, Illinois
RON PAUL, Texas                      NYDIA M. VELAZQUEZ, New York
DONALD A. MANZULLO, Illinois         MELVIN L. WATT, North Carolina
WALTER B. JONES, North Carolina      GARY L. ACKERMAN, New York
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
GARY G. MILLER, California           GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            JOE BACA, California
MICHELE BACHMANN, Minnesota          STEPHEN F. LYNCH, Massachusetts
THADDEUS G. McCOTTER, Michigan       BRAD MILLER, North Carolina
KEVIN McCARTHY, California           DAVID SCOTT, Georgia
STEVAN PEARCE, New Mexico            AL GREEN, Texas
BILL POSEY, Florida                  EMANUEL CLEAVER, Missouri
MICHAEL G. FITZPATRICK,              GWEN MOORE, Wisconsin
    Pennsylvania                     KEITH ELLISON, Minnesota
LYNN A. WESTMORELAND, Georgia        ED PERLMUTTER, Colorado
BLAINE LUETKEMEYER, Missouri         JOE DONNELLY, Indiana
BILL HUIZENGA, Michigan              ANDRE CARSON, Indiana
SEAN P. DUFFY, Wisconsin             JAMES A. HIMES, Connecticut
NAN A. S. HAYWORTH, New York         GARY C. PETERS, Michigan
JAMES B. RENACCI, Ohio               JOHN C. CARNEY, Jr., Delaware
ROBERT HURT, Virginia
ROBERT J. DOLD, Illinois
DAVID SCHWEIKERT, Arizona
MICHAEL G. GRIMM, New York
FRANCISCO ``QUICO'' CANSECO, Texas
STEVE STIVERS, Ohio
STEPHEN LEE FINCHER, Tennessee

           James H. Clinger, Staff Director and Chief Counsel
              Subcommittee on Oversight and Investigations

                   RANDY NEUGEBAUER, Texas, Chairman

MICHAEL G. FITZPATRICK,              MICHAEL E. CAPUANO, Massachusetts, 
    Pennsylvania, Vice Chairman          Ranking Member
PETER T. KING, New York              STEPHEN F. LYNCH, Massachusetts
MICHELE BACHMANN, Minnesota          MAXINE WATERS, California
STEVAN PEARCE, New Mexico            JOE BACA, California
BILL POSEY, Florida                  BRAD MILLER, North Carolina
NAN A. S. HAYWORTH, New York         KEITH ELLISON, Minnesota
JAMES B. RENACCI, Ohio               JAMES A. HIMES, Connecticut
FRANCISCO ``QUICO'' CANSECO, Texas   JOHN C. CARNEY, Jr., Delaware
STEPHEN LEE FINCHER, Tennessee























                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 19, 2012...............................................     1
Appendix:
    April 19, 2012...............................................    39

                               WITNESSES
                        Thursday, April 19, 2012

Shannon, Michele, Chief Operating Officer, Office of Financial 
  Research, U.S. Department of the Treasury......................     7

                                APPENDIX

Prepared statements:
    Neugebauer, Hon. Randy.......................................    40
    Shannon, Michele.............................................    43

              Additional Material Submitted for the Record

Neugebauer, Hon. Randy:
    Letter to Treasury Secretary Timothy F. Geithner, dated April 
      18, 2012...................................................    52
Capuano, Hon. Michael:
    ``Strategic Framework, Office of Financial Research, FY2012-
      FY2014,'' dated March 2012.................................    54

 
                       BUDGET HEARING--THE OFFICE
                         OF FINANCIAL RESEARCH

                              ----------                              


                        Thursday, April 19, 2012

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:01 a.m., in 
room 2128, Rayburn House Office Building, Hon. Randy Neugebauer 
[chairman of the subcommittee] presiding.
    Members present: Representatives Neugebauer, Fitzpatrick, 
Pearce, Posey, Renacci, Canseco, Fincher; Capuano, Waters, 
Ellison, and Carney.
    Ex officio present: Representative Bachus.
    Also present: Representative Green.
    Chairman Neugebauer. Good morning. This subcommittee will 
come to order. Today's hearing is on the Office of Financial 
Research (OFR).
    We will have opening statements by each side, as previously 
agreed, for 10 minutes per side, and I ask unanimous consent 
that the members of the Committee on Financial Services who are 
not members of the Subcommittee on Oversight and Investigations 
be permitted to sit with us for the purposes of delivering a 
statement, hearing testimony, and questioning witnesses today.
    We think we are going to have votes here shortly, so what 
we are going to try to do is get through the opening statements 
and maybe even Ms. Shannon's statement. As soon as the votes 
are over, we will reconvene the hearing.
    I want to start off by saying we are extremely disappointed 
that Dr. Berner was not allowed to come and testify this 
morning. We appreciate Ms. Shannon being here, but we think it 
was very appropriate for the person who has headed this agency 
for over a year to have been here, and this is extremely 
disappointing. I think this is somewhat contrary to what Dr. 
Berner said when he was here before, and I quote, ``to make 
sure this committee in particular understands that OFR wants to 
be accountable to Congress and that OFR wants to be completely 
transparent.'' I think the fact that Dr. Berner is not here 
today is contrary to that statement.
    One of the other things that we rolled out in our committee 
this week was the Dodd-Frank burden tracker, the purpose of 
which is to identify what it is going to cost to implement the 
Dodd-Frank Act. Certainly, one of the things we were hoping 
that many of the agencies were doing was some more detailed 
cost-benefit analysis. But one of the things we learned through 
this process is the fact that there are about 400 rulemaking 
requirements in Dodd-Frank, and we are about 185 of those rules 
into the process. We learned something that I think is 
disturbing, and it is a trend that I think has pretty big 
consequences, which is, we learned that 24 million manhours 
will be required to comply with the 185 rules that have been 
promulgated up to this point.
    You know, I had to kind of put that in perspective--what 
does that mean? Well, what we learned is it only took 20 
million manhours to build the Panama Canal, and so one of the 
things that somebody said was that instead of joining two 
bodies of water, what Dodd-Frank is doing is joining lawyers 
with billable hours. There is a cost and there is a burden to 
these regulations, and certainly that is just one part, one 
aspect of it. I think the CBO has estimated it is going to take 
about $27 billion of additional expense over 10 years to 
implement Dodd-Frank. So it is with consequence.
    Today, we are talking about the OFR, which is another 
agency created by Dodd-Frank, and quite honestly there is a 
trend here. We have seen two agencies created by Dodd-Frank 
that basically don't seem to have a lot of accountability, 
agencies that basically can either get money from the Treasury, 
or agencies that can get money from the Treasury and create 
fees and assessments without anybody really having to approve 
it. I think we find that troubling.
    I think some of the events that we have seen in the last 
few weeks of trips to Las Vegas bring to light that there needs 
to be accountability in government. The American people are 
demanding that kind of accountability. And so today, hopefully 
in this hearing, we are going to hear more about the internal 
structure of OFR, the goals and directives.
    We are still waiting to see a strategic plan for this 
organization, but what we do know is they are spending money 
and not small sums of money. We think obviously one of the 
requirements of this Oversight Subcommittee is to make sure 
that we shed light on those different areas.
    But, again, I have to close by saying I am extremely 
disappointed. I think when Secretary Geithner said we were 
going to start this process of Dodd-Frank, he said we are going 
to start it with a lot of transparency and openness. I guess 
transparency and openness to Secretary Geithner is not allowing 
the person who has been nominated and is currently heading up 
this very important agency to come and share his testimony with 
us today.
    So with that, I will yield to my good friend, the ranking 
member of the subcommittee, Mr. Capuano.
    Mr. Capuano. Thank you, Mr. Chairman. Ms. Shannon, I am 
looking forward to your testimony. I totally agree that 
accountability of all agencies, even those that are off budget, 
is our responsibility. Actually, this is why I wanted this 
subcommittee; I actually played a role in creating this 
subcommittee, and I am glad that I did. I think we have a 
responsibility, I think we are doing it, and I think we should 
continue to do it. I think the chairman has done a good job of 
making sure that this subcommittee fulfills that obligation.
    At the same time, I also do think that we have a 
responsibility to see both sides. When we have one side 
constantly saying we have to get a Dodd-Frank burden factor, 
that is a fair point, I agree with that, but I think we have to 
see what the non-Dodd-Frank burden factor was. We talk about 
hundreds of millions or billions of dollars it is costing us to 
do these things, but we continue to ignore the fact that it 
almost cost the entire economy many trillions of dollars 
because we didn't do these things previously.
    So as we do this, there are two sides of the ledger, and I 
would like to--I just think it is important to point that out 
on a regular basis. But that doesn't mean that we should just 
be throwing money away. That is the accountability factor.
    I will tell you that, honestly--I am going to hear this for 
the next 6 months, and I know it, and it is appropriate--I was 
probably one of the most angered people in America when I saw 
this GSA story last week, because I hate waste more than most 
people, believe it or not, and I hate it for two reasons. 
First, I hate it because I am a taxpayer, and I hate it for the 
exact same reason everybody else hates it. Second, I hate it 
because I think there is a responsibility and a good part of 
government that gets broad painted when you have one agency 
that goes rogue and does something incredibly stupid, 
probably--certainly unethical in my opinion, immoral, and 
possibly illegal.
    So, honestly, for those of us who actually think government 
has a positive role to play, believe it or not, I think we get 
more angry when we see a government agency go crazy than those 
people who never liked government in the first place, and 
therefore, if anyone at OFR or the Treasury or the Fed or 
anybody else you talk to on a regular basis is taking vacations 
in Vegas, maybe that should not happen.
    But be that as it may, on the presumption that no one at 
OFR has been out partying in Vegas lately--I guess I should ask 
that and maybe you will put that in your testimony--I still 
think that you have an important role to play, and that is what 
I am here to talk about today and going forward. I know that I 
am going to hear the GSA thing on every committee I serve on 
for the next 6 months. Honestly, if I was on the other side, I 
would be doing it, too, so I don't blame you, have some fun, 
and you are right. But when it comes time to line up the GSA 
guys and kind of take care of business, count me in. I will be 
at the front of that line.
    I am looking forward to seeing Dr. Berner when he finally 
does get confirmed. It is my understanding that the policy, 
which I don't like in the first place, but at least it is my 
understanding that it is not a new policy, it has been a long-
term policy followed by several Administrations, including the 
Bush Administration. I didn't like it then, I don't like it 
now, but at least I understand it. So although I join with my 
chairman in not appreciating the policy, I want to be clear 
that the policy is not new, it is not Mr. Geithner's policy; it 
is a policy that he is simply extending from previous 
Administrations. I guess that is a typical Administration 
versus Legislative Branch difference of opinion, but there will 
come a time when Dr. Berner hopefully will be confirmed, and 
when he does, I am sure he expects to be called here, and I 
look forward to that day. With that, I yield back.
    Chairman Neugebauer. I thank the gentleman. I have a letter 
that I sent yesterday to Treasury Secretary Geithner expressing 
my disappointment about Dr. Berner's failure to testify here 
today, and I ask unanimous consent that the letter be made a 
part of the record.
    Without objection, it is so ordered.
    I also want to say that without objection, all Members' 
opening statements will be made a part of the record, and at 
this particular point in time, I recognize the chairman of the 
full Financial Services Committee, Chairman Bachus, for 2 
minutes.
    Chairman Bachus. Thank you, Chairman Neugebauer, for 
convening this important hearing to examine the budget of the 
Office of Financial Research. The Oversight and Investigations 
Subcommittee held its first hearing on the OFR last July when 
we discussed concerns about how the Office will secure the vast 
amounts of personal and corporate financial data it will 
collect. If the OFR is going to stockpile sensitive financial 
information, then it needs to make sure the data stays out of 
the hands of hackers, criminals, and those who would do this 
country harm.
    Last July, we also examined whether the OFR's data 
collection efforts would burden American businesses. Our 
hearing today examines the OFR's budget. For the first 2 years 
after Dodd-Frank enactment, OFR is funded by the Federal 
Reserve. That 2-year period is about to end. Starting in July, 
the OFR will fund itself by leveling assessments on financial 
institutions, a process that is entirely removed from the 
appropriations process. In light of the fact that the OFR will 
impose direct costs on American businesses, and especially 
because the OFR has virtually complete autonomy in setting its 
yearly budget, it is critical that this committee examine 
whether the OFR is spending money in a way that promotes its 
mission in a cost-effective manner.
    In examining the OFR's budget, I especially look forward to 
hearing more about how the Office will fund itself by leveling 
assessments on financial institutions, how the OFR is going to 
collect data in a way that will minimize the burden on 
businesses and individuals, and the systems the OFR is putting 
in place to safeguard that data and prevent its unauthorized 
disclosure or use.
    It is very disappointing, however, that Treasury refused to 
make Dr. Berner available today to address these questions. 
They are important questions that need to be addressed, and it 
is especially troubling and amplifies the concerns that many of 
us already have that the OFR lacks accountability and 
transparency. I do thank Ms. Shannon for being here today as 
our witness, and I thank you, Chairman Neugebauer, for holding 
this hearing.
    Chairman Neugebauer. I thank the gentleman. Now, the vice 
chairman of the subcommittee, Mr. Fitzpatrick, is recognized 
for 1\1/2\ minutes.
    Mr. Fitzpatrick. Thank you, Mr. Chairman. We are here today 
to discuss the unprecedented powers of the Office of Financial 
Research. When this agency was created by the Dodd-Frank Act, a 
majority of the American public was unaware of the far-reaching 
access that the Federal Government would be granted in matters 
of personal and corporate finance. The OFR, charged with 
collecting information for regulators, was given the power to 
demand all data necessary, including sensitive, private 
information, information from banks, hedge funds, brokerages, 
and other financial companies, as well as information about 
individual loans. The vast amount of information would be a 
gold mine for anyone able to access it for nefarious purpose. 
As someone who is concerned with financial security and also 
personal privacy, the OFR approach to gathering and storing 
information is a major concern.
    I believe, Mr. Chairman, that there are also some serious 
questions regarding to the accountability and transparency at 
the OFR, two characteristics of vital importance for any 
government agency. For example, its budget is set by the agency 
itself, and the Office is not funded through the regular 
appropriations process, so that there is a lack of meaningful 
congressional oversight, and the American people are left 
without much of a say at all in its operations. The American 
people deserve to know that their information is protected and 
that this agency is acting in the best interests of the public 
trust.
    The most reasonable thing we can expect are clearly defined 
budgets, strategic plans, goals, and fully vetted policies and 
procedures. These are standard practices in the private sector, 
and they hold more importance when agencies are operating in 
the public sector. Thank you, Mr. Chairman.
    Chairman Neugebauer. I thank the gentleman. The gentleman 
from Texas, Mr. Canseco, is recognized for 2\1/2\ minutes.
    Mr. Canseco. Thank you, Mr. Chairman. This past Saturday 
marked the 100th anniversary of the sinking of the Titanic. In 
the aftermath of that disaster, government hearings on both 
sides of the Atlantic found plenty of blame to go around: an 
irresponsible captain; a faulty design; or an attitude of 
arrogance that the ship was unsinkable. All throughout it, 
though, very little blame was assigned to the iceberg itself, 
which at the end of the day is what sank the Titanic.
    In a similar vein, our economy in 2008 was sunk by its own 
iceberg, but unlike the Titanic, we had plenty of warning. For 
years, Congress and regulators heard warning after warning that 
government housing policies and the risks being built up by 
Fannie Mae and Freddie Mac were going to sink our economy. Way 
back in 2000 at the end of the Clinton Administration, Peter 
Wallison told Congress, ``If Fannie and Freddie are not 
restrained, it is no exaggeration to say that this is a threat 
to the private sector to the same degree it is a threat to the 
taxpayers.''
    In 2005, former Fed Chairman Alan Greenspan said, ``If 
Freddie and Fannie continue to grow, they potentially create 
ever-growing potential systemic risks down the road.''
    These weren't the only voices, but all of them were ignored 
by regulators and Members of Congress who continued to push for 
government intervention in the housing market. Of course, the 
house of cards came crashing down, and we are left today trying 
to dig ourselves out of it.
    Taking its cue from the post-Titanic inquiries, the last 
Congress gave us Dodd-Frank. This bill included the formation 
of the Office of Financial Research. I am profoundly confused 
by the logic behind all of this when the threats to our economy 
leading up to 2008 were so clear and so transparent. You didn't 
need an army of Ph.D.s to tell you that Fannie and Freddie were 
out of control or that even a meager drop in home prices would 
wipe out their capital and the capital of hundreds of other 
financial institutions, and I remain deeply concerned about 
this agency with its threat to sensitive information and its 
misguided mission. That is why I have introduced a bill to 
repeal it, which was adopted in amendment form by voice vote in 
this committee yesterday.
    We know what our iceberg was and what caused it to get so 
big, and we know more than ever that all the information in the 
world can't compete with a lack of will on behalf of 
politicians and regulators alike. I yield back.
    Chairman Neugebauer. I thank the gentleman, and now the 
gentlewoman from California, Ms. Waters, is recognized for 2 
minutes.
    Ms. Waters. Thank you very much, Mr. Chairman, for 
organizing this very important hearing to discuss the Office of 
Financial Research. I believe that OFR will serve as a vital 
role in supplying our regulators with critical data and 
analysis that will help them monitor systemic risk and ensure 
that our financial markets are sound.
    The OFR was created by Title 1 of Dodd-Frank for the 
purpose of collecting information for the Financial Stability 
Oversight Council (FSOC), developing tools for risk management, 
and monitoring and conducting research using complex data to 
inform how we can make our financial system more resilient and 
robust. Essentially, the Office of Financial Research is just 
like the National Oceanic and Atmospheric Administration 
(NOAA): monitoring gathering storms; assessing threats; and 
trying to coordinate actions that would minimize any collateral 
damage.
    Likewise, it is similar to the intelligence gathering 
agencies which attempt to aggregate and analyze data for the 
purpose of protecting the country. I think the OFR was a 
critical accomplishment under Dodd-Frank, and I hope that all 
my colleagues agree that consolidating and understanding this 
complex financial data will be a key to preventing another 
systemic risk like the one we experienced 4 years ago. Having 
this data is all the more important, in fact, given the 
lingering economic instability in the euro zone.
    So with that said, I was frankly dismayed by some of the 
activity in our budget reconciliation markup yesterday, 
including an amendment to repeal the Office of Financial 
Research. While I understand that congressional oversight of 
OFR is appropriate, I think that efforts to undermine it are 
extremely dangerous. I thank you, and I yield back the balance 
of my time.
    Chairman Bachus. Would the gentlelady--I am hard of 
hearing, you know. I have problems.
    Ms. Waters. Me, too.
    Chairman Bachus. But did you say that the Office of 
Financial Research, you compared them collecting private data 
of individual Americans that they have to file with 
institutions when they get a loan or their stock portfolios, 
that that is analogous to the Weather Bureau collecting 
temperature and rainfall data?
    Ms. Waters. I guess you do have a problem hearing. No, I 
did not say that.
    Chairman Bachus. Oh, okay.
    Ms. Waters. What I said was essentially the Office of 
Financial Research is just like the National Oceanic and 
Atmospheric Administration: monitoring gathering storms; 
assessing threats; and trying to coordinate actions that would 
minimize any collateral damage, and further, likewise, it is 
similar to the intelligence gathering agencies we have in 
national security which attempt to aggregate and analyze data 
for the purpose of protecting the country. That statement you 
interjected, collecting private data on individuals, etc., no, 
I did not say that.
    Chairman Bachus. So it is necessary to collect all this 
private financial information on American citizens to protect 
the country?
    Ms. Waters. You are making that up. I didn't say that.
    Chairman Bachus. Okay. All right. I don't want to 
mischaracterize what you said.
    Ms. Waters. Do you want me to read it again?
    Chairman Neugebauer. I thank the gentlewoman. At this time, 
I am going to recess the subcommittee until after votes, at 
which time we will hear Ms. Shannon's opening statement and 
begin our question period. So we are standing in recess.
    [recess]
    Chairman Neugebauer. The hearing is called back to order. 
Ms. Shannon, without objection, your written testimony will be 
made a part of the record, and you will now be recognized for 5 
minutes to summarize your testimony.

 STATEMENT OF MICHELE SHANNON, CHIEF OPERATING OFFICER, OFFICE 
     OF FINANCIAL RESEARCH, U.S. DEPARTMENT OF THE TREASURY

    Ms. Shannon. Chairman Neugebauer, Ranking Member Capuano, 
and other members of this subcommittee, thank you for the 
opportunity to be here today. Since this subcommittee's hearing 
on the OFR 9 months ago, the Office has made substantial 
progress in carrying out its statutory responsibilities. As we 
move through Fiscal Year 2012 and look toward Fiscal Year 2013, 
that progress is accelerating. My written testimony reports on 
steps we have taken to achieve our goals and provides details 
about the OFR's budget and financing. In my statement this 
morning, I will give some examples of the headway we have made.
    Last month, the OFR published the strategic framework that 
will guide our way forward. This framework establishes five 
goals. First, one of the primary responsibilities of the Office 
of Financial Research is to serve the Financial Stability 
Oversight Council and its member agencies. We have begun to 
provide data and analytical input to the Council and are 
implementing an inventory of data held by Council member 
agencies. We are also collaborating on data-related issues 
through the Council's data committee.
    A second important goal is to promote stronger data-related 
standards. The early centerpiece of this effort is our ongoing 
work with policymakers, regulators, and the private sector to 
establish a unique global standard for identifying parties to 
financial transactions. This legal entity identifier, or LEI, 
will allow for better understanding of true exposures and 
counterparty risks across the financial system. It will also 
create efficiencies for transactions and reporting.
    A third focus involves work to create a collaborative 
environment for research and analysis on risks to financial 
stability and best practices and risk management. Results of 
this initiative include publication of the first two entries in 
the OFR's working paper series, announcement of the 
establishment of a financial research advisory committee, and, 
looking forward, publication of the OFR's first annual report 
this summer.
    Under the fourth goal of the OFR, we are required not only 
to make nonsensitive data and information available to the 
public, but also to protect sensitive information. The OFR is 
committed to collecting data securely, safeguarding the data it 
holds, and being very thoughtful and judicious in fulfilling 
its data-related mandate. The OFR will collect data only when 
necessary to assess threats to financial stability and only 
when the data are not otherwise available.
    Under our final goal, we are making substantial progress in 
establishing the OFR as an efficient organization. We now have 
69 employees and plan to reach a steady state staffing level of 
275 to 300 employees in the next 2 to 3 years. To support good 
stewardship of our resources, we are installing sound planning 
and review protocols as well as rigorous controls. As we stand 
up the OFR, a key objective is to put in place the information 
technology and business systems needed to support the secure 
delivery of our data and research mandates. The OFR has 
established a foundational infrastructure to support the short-
term needs of researchers and analysts. We are taking all the 
time needed for robust planning and testing to determine the 
most secure, efficient, and cost-effective solutions for the 
longer term.
    The complex, highly specialized mission of the OFR and the 
scope of the task to establish the Office from the ground up 
both dictate that the OFR take a careful, prudent approach to 
its budget and funding. We also recognize the importance of 
moving forward as expeditiously as possible.
    As my written testimony details, the pace of our spending 
is projected to increase in the second half of this year, and 
next year we will continue to ramp up our efforts. Thank you 
again for the opportunity to be here today. I would be happy to 
answer your questions.
    [The prepared statement of Ms. Shannon can be found on page 
43 of the appendix.]
    Chairman Neugebauer. Thank you, Ms. Shannon. We will now go 
to questions from Members. Ms. Shannon, I want to better 
understand your role at OFR. OFR's Fiscal Year 2013 budget is 
$157 million. Are you in charge of finalizing and approving 
that budget?
    Ms. Shannon. Congressman, my role as the Chief Operating 
Officer is to oversee the resources of the Office, both the 
financial resources and the human capital resources of the 
Office. I am responsible for the work to prepare the budget, 
and ultimately, that budget is reviewed by the other parts of 
the Treasury, including the management team in financial 
management in Treasury, and ultimately approved by the 
Secretary of the Treasury, currently. When we have a confirmed 
Director of the OFR, it would also be approved by the Director.
    Chairman Neugebauer. I didn't hear you use Dr. Berner's 
name. So he is currently not required to--he didn't have 
anything to do with this budget?
    Ms. Shannon. Congressman, as you know, we do not have a 
confirmed Director of the OFR currently. Dr. Berner is the 
Counselor to the Secretary of the Treasury, and in that role 
has been asked by the Secretary to help support the stand-up of 
the OFR. In that context, we worked with him and other members 
of the Treasury to establish the budget and prepare the budget 
for the approval.
    Chairman Neugebauer. So you prepared the budget?
    Ms. Shannon. I have responsibilities for helping to prepare 
the budget. That process involves other members, other Treasury 
officials, but ultimately is approved by the Secretary.
    Chairman Neugebauer. And the Secretary of the Treasury 
approved it?
    Ms. Shannon. That is correct.
    Chairman Neugebauer. So Dr. Berner is just kind of on the 
sidelines right now until he is confirmed? He was not involved 
in that process?
    Ms. Shannon. Mr. Chairman, again, without a confirmed 
Director, the authorities of that Office sit with the Secretary 
of the Treasury, and the Counselor, Dr. Berner, is supporting 
the day-to-day stand-up of the Office, and in that context, he 
has been involved in the budgeting process.
    Chairman Neugebauer. I also noticed that you expect to have 
284 FTEs by next fall. Did you decide that was how many people 
the agency needed?
    Ms. Shannon. Congressman, in order to prepare our budget 
and our strategic plan, looking at issues such as the level of 
staffing that we would need, we, working with, again, members 
of Treasury's financial management team, looked at the specific 
mission of the OFR, what the specific needs would be to meet 
both the research mission and the data-related mission. We 
worked with managers that we brought into the OFR to look at 
what the specific needs would be and the particular functions, 
and from that basis, built up to the--
    Chairman Neugebauer. Okay. So who is hiring a number of 
senior members? Somebody hired you. Who is making those 
decisions?
    Ms. Shannon. Congressman, again, the OFR doesn't currently 
have a confirmed Director.
    Chairman Neugebauer. Okay, I see where we are going with 
that answer. So, you mentioned the strategic framework.
    Ms. Shannon. Yes.
    Chairman Neugebauer. I have reviewed that, and I didn't see 
anything to lead me to believe that there was anything 
strategic about the framework. It was pretty general. And yet 
you are going to have a budget of $157 million, you are going 
to have 284 full-time employees, but it really didn't give a 
lot of indication of the direction the agency was headed and 
how it was going to operate.
    When I look at some of the other documents that other 
agencies--this is the CFTC's and this is the SEC's submissions 
of their plans and budgets, and then I look at the budget for 
your agency, and obviously when you look at the difference 
between, these agencies have gone into much more detail about 
being strategic about how they are going to spend money, what 
these people are going to do. Would you say yours is adequate?
    Ms. Shannon. Congressman, as you know, the budget of the 
OFR was published as part of the President's budget. We are a 
start-up. We are--we did prepare information consistent with 
this stage of our stand-up. Of course, over time, as the 
institution continues to grow, we are going to be elaborating 
further details in the preparation of our budget and the 
publication of our budget.
    One thing I would emphasize, and I think it is a very 
important point that you raise, is that we do need to be very 
transparent about our operations. We are starting to do that, 
with the publication of our strategic framework, with the 
publication of our budget as part of the President's budget, 
and we are going to continue to do that, we are going to 
continue to be transparent about what we are doing. We want to 
be accountable for the way that we are spending money, and we 
are going to continue to elaborate those plans going forward.
    Chairman Neugebauer. My last question is, you are an 
independent agency, and so your budget for 2013 was projected 
to be at $157 million, 284 full-time employment units. Could 
that number have been $350 million?
    Ms. Shannon. Congressman, we, in preparing the budget, look 
to the needs of the organization as relates to--
    Chairman Neugebauer. This is a very simple question. Yes or 
no, could the budget have been $350 million?
    Ms. Shannon. Congressman, in preparing the budget--
    Chairman Neugebauer. Ms. Shannon, I know that they have 
coached you very well, and you are doing a great job, but we 
are here to get facts, and so the question is, could that 
budget have been $350 million, yes or no?
    Ms. Shannon. Congressman, I would like to give you a full 
answer to your question.
    Chairman Neugebauer. No. I want a yes-or-no answer because 
my time has expired. So it is yes, it could have been, or no, 
it couldn't have been. It is either one or the other. Could 
that budget have been $350 million?
    Ms. Shannon. Congressman, in preparing the budget--
    Chairman Neugebauer. Ms. Shannon, I want a yes-or-no 
answer, please. It is either yes, it could have been $350 
million, or no, it couldn't have. Does the agency have the 
authority to have a $350 million budget?
    Ms. Shannon. Congressman--
    Chairman Neugebauer. Ms. Shannon, I want a yes-or-no 
answer, please, ma'am. Yes, it could, or no, it couldn't. This 
is not rocket science.
    Mr. Ellison. Mr. Chairman, I have an objection.
    Ms. Waters. Regular order, please.
    Mr. Ellison. I think the witness is entitled to be treated 
with respect.
    Chairman Neugebauer. I am treating her with--
    Mr. Ellison. No, I believe this hearing is not proper 
respect.
    Chairman Neugebauer. I have the time, please.
    Ms. Waters. Regular order.
    Mr. Ellison. I want to interpose an objection to the manner 
in which you are conducting this hearing with this witness. 
This is disrespectful.
    Chairman Neugebauer. Ms. Shannon, I am looking for a yes-
or-no answer.
    Ms. Waters. Regular order, please. Regular order, please.
    Chairman Neugebauer. Ms. Shannon, yes or no?
    Mr. Ellison. Also, the red light is on; I think the 
chairman is beyond his time.
    Chairman Neugebauer. I am not yielding my time until Ms. 
Shannon answers my question. Ms. Shannon?
    Mr. Ellison. And I want to register an objection to the 
abusive nature of this hearing.
    Chairman Neugebauer. So noted.
    Ms. Waters. Regular order. The questioning time has passed.
    Chairman Neugebauer. So, Ms. Shannon, we are going to get 
back to the question. Could that budget have been $350 million?
    Ms. Shannon. Congressman, I fear--I want to be very 
responsive to your question.
    Chairman Neugebauer. You are not being responsive. I have 
asked for a yes-or-no answer.
    Ms. Waters. Mr. Chairman, Mr. Chairman, I think you have 
made your point, and I don't think that you can badger the 
witness into saying yes or no. Let's move on.
    Chairman Neugebauer. I am not trying to badger anybody. I 
am just trying to get an answer. With that, I yield back.
    Mr. Capuano. Mr. Chairman, if you would yield for just a 
question or comment. Pursuant to the law itself, it does say 
that they can collect assessments equal to the total expenses 
of the Office, that is all the law says. So they could collect 
it to the total expenses of the Office, and it may or may not 
be a yes-or-no answer, but that is the legislative requirement 
regardless of whether Ms. Shannon knows that or not.
    Chairman Neugebauer. And so, it could be $350 million if 
they decide to spend $350 million.
    Mr. Capuano. The expenses of the Office is the legislation.
    Chairman Neugebauer. With that, I yield to the gentleman 
from Massachusetts, Mr. Capuano.
    Mr. Capuano. I yield to Ms. Waters.
    Ms. Waters. Thank you very much. Ms. Shannon, earlier today 
one of my colleagues on the opposite side of the aisle I think 
attempted to ask me a question about whether or not information 
that is collected is protected, or whether or not this 
information could be used against some of the entities that I 
suppose you are doing research on or individuals, and I, even 
though he did not frame the question quite that way, I think 
that is what he was trying to get at, and I would like you to 
help us to understand, given the nature of what you will be 
doing and the research that you will be doing, how can you 
assure us that all of these entities that you will be 
interacting with and doing research on will be protected?
    Ms. Shannon. Congresswoman, thank you, this is a very 
important question. This is something that we are very focused 
on across the organization, protecting the data that we take 
in-house and making sure that it is available only to those who 
absolutely need to have it.
    First, the OFR has been established within the Treasury, 
and therefore, it inherits the security structures within the 
Treasury, the IT infrastructure of the Treasury, but also the 
security protocols and policies of the Treasury Department, and 
these are policies to which we are adhering closely.
    At the same time, we recognize that the OFR has a 
particular mission, and that in the context of that mission, we 
need to look at what additional policies and procedures we need 
to put in place within the OFR itself to make sure that we are 
protecting data, and so we are looking at that now. We are 
looking at how our data gathering mandate, what additional 
protections are required in that context, and also in the 
context of data sharing between agencies, what we need to do.
    One thing, again, that I want to emphasize is that we are 
only going to be collecting the data that we absolutely need to 
fulfill our mission. We are trying to fill data gaps. We are 
not going to be collecting for collections sake. We are going 
to be making sure that only those people who absolutely need to 
have access to sensitive data have that access through access 
control, both systems and in policies.
    Ms. Waters. But what concerns me a bit is that you will be 
collecting data and interacting with two other newly-
established entities, the Orderly Liquidation Authority you 
will be working with also; is that correct?
    Ms. Shannon. Congresswoman, we will be working with the--
    Mr. Pearce. Mr. Chairman, could you have the witness kind 
of pull the microphone over, she is talking to this side, and 
the microphone is on the other side.
    Ms. Shannon. Sure. Is this better?
    Congresswoman, we will be working with members across the 
Financial Stability Oversight Council.
    Ms. Waters. Oh, I see, so you don't have any direct 
interaction with the Orderly Liquidation Authority, either? You 
will not be supplying research at all for the Orderly 
Liquidation Authority?
    Ms. Shannon. Congresswoman, we will be working with 
regulators across the FSOC, and so in that context, we will be 
responding to requests from various parts of the system.
    Ms. Waters. I see. But there are no regulations that have 
been established for these particular new interactions that you 
will be having? You talk about the Treasury, of course. We know 
that there are established rules and regs, laws that relate to 
confidentiality and other kinds of things. Do there need to be 
new regs developed, new laws developed that would make sure 
that the data you are collecting that will be available to 
these new entities will be protected?
    Ms. Shannon. Congresswoman, thank you, this is also an 
important question in terms of how we go about sharing data 
that we may have and also how we go about the process of data 
dissemination that we may take in-house, and this is an issue 
that we are working on with other members of the regulatory 
community to set in place the kind of procedures and protocols, 
controls that you are mentioning, and one of the aspects of 
this that we are working on right now is looking at how to 
classify data within the OFR, obviously building upon systems 
that already exist for data classification, and how we can 
mount that classification that we have in-house at the OFR with 
the systems of other regulators so that we can make sure we are 
talking the same language and that we are protecting the data 
appropriately.
    Ms. Waters. So what is the timeframe? How long is it going 
to take you to put these protocols together?
    Ms. Shannon. Congresswoman, we already do have a set of 
protocols in place, again, as part of the Treasury 
infrastructure. We are working to expand those protocols. We 
are working on the classification system, that I mentioned, is 
going to be in place in the coming months, and other aspects of 
these enhancements should be coming online over the coming 
months as well.
    Ms. Waters. Thank you very much. I was just reminded by the 
staff that we are talking about process with the Orderly 
Liquidation Authority rather than an agency. Thank you.
    Chairman Neugebauer. Thank you. Now, I recognize the vice 
chairman of the subcommittee, Mr. Fitzpatrick for 5 minutes.
    Mr. Fitzpatrick. Thank you, Mr. Chairman. Ms. Shannon, I 
appreciate your testimony. Dr. Berner was here before the 
subcommittee on July 14th, over 9 months ago. At that point, I 
requested a strategic plan with specific goals and metrics for 
OFR's Fiscal Year 2012 be submitted to the subcommittee by fall 
of 2011, and Dr. Berner agreed at that time, that it would be a 
reasonable timeframe to submit it.
    Looking at the testimony from July 14th, I said it would be 
more comforting to hear a specific strategy plan with specific 
goals and metrics. So when might we see that plan? Berner said, 
``That is a good question, we are in the process of developing 
that.'' I asked, ``Will we see the plan perhaps by the fall of 
this year, 2011?'' He said, ``Perhaps by then; that seems like 
a reasonable date.''
    Thus far, Ms. Shannon, all we have received is a 9-page 
Fiscal Year 2013 financial research fund. I think it was 
released in February. As the chairman pointed out, we get 
documents over 200 pages from organizations like the CFTC, they 
are line-by-line budgets, they are specific, they have goals, 
they have objectives, they have metrics. So we were promised we 
would see something by the fall by Dr. Berner. When might we 
see a comprehensive strategic plan forthcoming from your 
agency?
    Ms. Shannon. Congressman, thank you for your question. As I 
mentioned, the OFR--
    Mr. Pearce. Ma'am, I hate to keep saying it, but you keep 
talking away from the microphone.
    Ms. Shannon. Better?
    Mr. Pearce. Yes. I am trying to read and listen, too, and 
that makes it much better.
    Ms. Shannon. Absolutely. Congressman, we published the 
strategic plan of the OFR in March of this year. Again, as I 
mentioned, the OFR is a start-up organization. That is the 
initial plan of the organization. We also have published our 
budget as part of the President's budget, and we are expecting 
over time, as the organization grows, as we bring on more 
staff, that these--that we will be expanding this kind of 
documentation.
    The other thing I would mention is that we are currently 
working on performance measures that we would include as part 
of the Fiscal Year 2014 budget to help us better measure how we 
are doing, how we are meeting our mission. Within the strategic 
framework that we recently published, we did establish specific 
goals for the organization, the work that we are doing to 
support the FSOC, the work that we are doing to strengthen data 
standards, to establish a research center and begin to publish 
research and analysis, also to make data available to the 
public, and to establish the organization as an effective--
    Mr. Fitzpatrick. Ms. Shannon, would you agree that this 
document you are referring to, the March document, contains no 
strategic--there are goals, but there are no deadlines, there 
are no performance measures at all in this document?
    Ms. Shannon. Congressman--
    Mr. Fitzpatrick. We are just wondering, how do you take a 
document like this and budget to an aspiration as opposed to a 
specific measurable outcome?
    Ms. Shannon. Congressman, we prepared that as our initial 
strategic plan to establish the goals of the organization, to 
establish the mission of the organization. We also established 
within that plan implementation priorities for the OFR, laying 
out in those implementation priorities the priorities that we 
saw for the current fiscal year as well as priorities looking 
out into the future. Again, we will be establishing performance 
measures, as we mentioned, in that strategic plan during the 
current period, and plan to have them in place for the next 
budgeting cycle.
    Mr. Fitzpatrick. We understand that the agency has goals, 
but we are just wondering about the measurable outcomes. I have 
worked with chambers and small businesses in my private 
practice. Small banks for small start-ups require greater 
measures, more specific measurable outcomes than we are seeing 
in a document for an agency that is spending over a hundred, a 
couple hundred million dollars.
    Ms. Shannon. Congressman, we published our budget. It is 
part of the President's budget. And, again, we are working to 
establish exactly the kind of measures that you are talking 
about. We fully agree on the importance of accountability, the 
importance of linking how we are spending money to achievement 
of our mission and fulfilling our statutory requirements, so I 
absolutely agree with you on the importance of this. This is 
something that we are working on right now, and we expect to 
have it in the next fiscal year cycle.
    Mr. Fitzpatrick. So we won't receive that before September 
30th of this year, is that what you are saying?
    Ms. Shannon. Congressman, we are working on it right now.
    Mr. Fitzpatrick. When might we receive it?
    Ms. Shannon. It is our intention to include those measures 
in the next year's budget, and they would be published as part 
of the President's budget.
    Mr. Fitzpatrick. Thank you, Mr. Chairman.
    Chairman Neugebauer. Mr. Ellison is recognized for 5 
minutes.
    Mr. Ellison. Thank you, Mr. Chairman, I also thank the 
ranking member. Yesterday, I believe action was taken in this 
committee that would potentially defund OFR. Are you aware of 
that?
    Ms. Shannon. Yes, sir.
    Mr. Ellison. If that were to happen, would the FSOC, which 
is tasked with monitoring the financial stability of the United 
States financial industry, be able to discharge its duty?
    Ms. Shannon. Congressman, the OFR has a specific mission to 
support the FSOC in the discharge of its duty. In particular, 
related to the data and research analysis that it might need to 
conduct its operations. And so that is the purpose of the OFR, 
and we are working to fulfill that mission.
    Mr. Ellison. So could the FSOC discharge its responsibility 
without financial information and analysis?
    Ms. Shannon. Congressman, I think in establishing the OFR 
there was a recognition that this kind of data, this kind of 
research would be important for understanding threats to 
financial stability, and that the data gaps that existed during 
the financial crisis had profound effects, and therefore that 
an organization like the OFR, with the mission of the OFR to 
collect data, to make that data available to the FSOC and its 
member agencies served a critical purpose in ensuring that they 
could carry out their function.
    Mr. Ellison. You are using terms like ``important'' and 
``critical purpose'' when the truth is that the OFR is 
essential to the FSOC functioning; isn't that right?
    Ms. Shannon. We do think that we have a very important 
mission and that it is a critical mission to ensure that that 
data and analysis is happening.
    Mr. Ellison. Okay, fair enough. So since 1930, has there 
ever been a financial crisis quite as bad as the one we just 
went through a few years ago?
    Ms. Shannon. Congressman, this obviously has been a very 
profound crisis, and it has had an effect obviously within the 
financial system and across the economy.
    Mr. Ellison. But I am asking for you to rank it in terms of 
other financial crises. We have had recessions and stuff in the 
last, since the 1930s. Has there been one as damaging to the 
U.S. economy since the Great Depression?
    Ms. Shannon. Congressman, the profound effects of this 
crisis, as you note, the effect--
    Mr. Ellison. To your knowledge, has there been a worse one?
    Ms. Shannon. No, sir.
    Mr. Ellison. Okay. So we saw giants of the financial 
services industry like Bear Stearns fall, Lehman Brothers fall, 
Merrill Lynch had to be bought. We saw catastrophic harm, and 
as a result, we did something to protect our economy from 
systemic damage, and what just happened yesterday is this 
committee voted to deprive the committee that is charged with 
watching systemic risks be deprived of their eyes basically. 
Can you respond to that if you choose?
    Ms. Shannon. Congressman, the OFR has an important mission 
to fill these data gaps, to perform the research and analysis 
functions that were established under statute. We are 
continuing to work to build the organization to fulfill that 
mission. We think it is an important mission, and we are going 
to continue to work to move forward.
    Mr. Ellison. There has been some focus today on your 
submission, and I think some might have expressed their 
personal opinion that it could be a little bit more robust, a 
little bit more detailed. In comparison, there has been some 
lavish praise heaped on the CFTC structure. However, the 
Majority underfunded this agency and ignored the warning of the 
impending fiscal crisis of former Commissioner Brooksley Born 
and slashed a number of the examiners.
    So I just find it quite remarkable that today CFTC is being 
looked upon as some sort of model agency when this very 
committee has underfunded that very agency.
    Do you feel that at the stage the OFR is at in its 
evolution since its founding, that the submission your office 
has provided to this committee is adequate to the moment under 
the conditions that you are in?
    Ms. Shannon. Congressman, we absolutely are doing our best 
to be transparent. We are dedicated to making sure that this 
committee and the public has the information that they need, 
that we can be held accountable for what we are doing, and that 
there is a good understanding of how we see our mission, and we 
think that initial strategic framework--
    Mr. Ellison. I just have to ask you a quick question about 
my own district if I have time. Minneapolis, my town, is a 
magnet for immigrants who actively participate and contribute 
to our local economy, and the vitality and security of other 
nations' financial markets is of deep concern to us. Could you 
tell me how the OFR effort to establish the global legal entity 
identifier, that is the LEI, for parties in financial 
transactions, what is the status on the proposals you hope to 
deliver to the G20 at the June 2012 summit?
    Ms. Shannon. Congressman, again, as I mentioned in my 
opening statement, this legal entity identifier is a very 
important initiative of the OFR and part of our broader mission 
to support better data standards. The LEI itself would create a 
specific identifier for every financial entity, and what this 
does is it lets us understand and lets data be collected to 
understand the position of institutions, the exposures of 
institutions. It will give us better understanding of 
counterparty risk, it will increase the ability of analysts, 
both regulators and in academia and in the markets themselves, 
to understand the interconnections within the system and better 
assess risks.
    It also is going to create important efficiencies for 
market participants, and having this identifier, it will 
improve data management, improve efficiencies in trading and in 
operations, and we think it is going to lead to important cost 
savings.
    Mr. Ellison. Thank you, ma'am. I yield back the balance of 
my time, and I thank the chairman.
    Chairman Neugebauer. I thank you. And now, we recognize the 
gentleman from Florida, Mr. Posey, for 5 minutes.
    Mr. Posey. Thank you, Mr. Chairman. Just as an edification 
of a question you asked a little while ago to Ms. Shannon, you 
asked about their budget. And I think you asked that same 
question in July to her boss, Dr. Berner, and he said, ``I am 
not aware that there is a statutory limit in the statute 
itself.'' So just for the record, your boss knows that there is 
not or apparently thinks there is not.
    Ms. Shannon, you seem like a very nice person, and I 
certainly hope you don't take personally the frustration 
expressed by members of this committee, and there is a lot of 
frustration over a lot of wrongdoing that has resulted in no 
consequences and no accountability. It says that one of the top 
five goals of your agency is to build a world-class workplace. 
Can you give me an example of an existing world-class workplace 
that you would like to emulate?
    Ms. Shannon. Congressman, what we are trying to do is make 
sure that we have in place the kind of HR policies, the kind of 
communication infrastructure--
    Mr. Posey. I know, but is there a model? We want to build--
are we going to reinvent the wheel or is there already another 
world-class workplace you could just emulate?
    Ms. Shannon. Congressman, we are trying to look at best 
practices across government and other organizations.
    Mr. Posey. Do you know that another one exists? Is there 
another one that you consider a world-class workplace that 
exists now?
    Ms. Shannon. Congressman, I am happy to get back to you on 
this. I don't have one currently.
    Mr. Posey. Okay. It sounds like we are going to build a 
world-class waste of taxpayers' money, quite frankly. What 
concerns a lot of us is that so many agencies now have just 
turned into lobbyist manufacturing machines, and with the 
information that your employees are going to have, the power 
that they are going to have to do good and do bad, we are 
really concerned about that. I have read the rules that you 
have laid out for your employees, that they shouldn't do this 
because it would be improper, but there are no consequences or 
accountability for that behavior, and that kind of concerns us.
    We know with Madoff, the SEC, hey, they did a great job, 
they had great intel, and they knew what Madoff was doing wrong 
for 10 years; they just refused to take any action. So, of 
course, we wonder, your agency, which seems to think it can 
outsmart Wall Street if they have enough extra people and 
enough software that they can see where the next problem is 
going to be, but everyone with half a brain in this country saw 
the last problem way before it burst.
    We knew there was a subprime crisis. It was just a matter 
of how long it would be before it burst. It was identified 
years in advance. But nobody took any action, just like 
Madoff--identified for 10 years, but nobody took any action. So 
I don't think we really have a problem finding out what goes 
wrong. The problem we have is holding people accountable for 
it. Madoff basically had to almost turn himself in. I don't 
know if he was scared of the other people that he scammed and 
felt he was safer in prison. So far, I am told Corzine hasn't 
even been interviewed yet by the Justice Department. Maybe he 
has since the last time I got an update. But we don't see 
anybody going to jail for this bad behavior, and that is the 
only thing that is going to fix the bad behavior.
    I just don't think we are ever going to have anybody who is 
smart enough to dream up the next wave of criminal behavior and 
prevent it from happening if there are not consequences for 
that bad behavior, and that is the frustration we all have.
    Can you identify what you might be able to point out to be 
the next type of crisis, give us an example of what that might 
look like?
    Ms. Shannon. Congressman, what we are trying to do is to 
gather data to fill gaps that existed in things like the shadow 
banking market in order to help regulators across the system to 
analyze what threats may exist. Now, this is a very complex 
mission, this is an issue that requires a certain amount of 
humility. It is a mission that requires that we continue to 
look forward because this is a dynamic market, and it is a 
dynamic system, and so what we are trying to do is to build the 
tools to allow for that analysis to happen, to build the 
process that will allow for both better analysis to help reduce 
the risk of a crisis but also--
    Mr. Posey. Okay. A lot of people are concerned with the 
proprietary information you will have, even the trade secrets 
to which you will have access. They are concerned about the 
security of it. We know some of our national defense agencies 
have been hacked, and I wonder whether or not you will be able 
to have a safer process than some of them did. We have people 
who are concerned. They knew people who had Chrysler 
dealerships that the government took away and gave it to 
somebody else that they liked better.
    We know people who had Jeep dealerships that the government 
took away and gave to somebody else that they liked better. And 
so virtually, you are empowering a bunch of bureaucrats with 
the absolute confidential total information of every business 
in the United States of America, and I think some of them are 
concerned with the ability to abuse that power, again 
notwithstanding the fact you have some guidelines set up for 
your employees of how they must behave, but there is absolutely 
no penalty, no prescription for what happens if they violate 
the law, like so many other people have. Again, our biggest 
fear it that it is going to be another lobbyist manufacturing 
machine. Thank you, Mr. Chairman.
    Chairman Neugebauer. I thank the gentleman. The gentleman 
from Delaware, Mr. Carney, is recognized for 5 minutes.
    Mr. Carney. Thank you, Mr. Chairman, for holding this 
hearing today, and thank you, Ms. Shannon, for coming in. I 
just really want to try to understand how you are going to 
achieve the objectives, which I think having an arm like yours, 
an agency like yours is an important thing. Clearly, there were 
things that were missed in the lead-up to 2008. I disagree a 
little bit with my colleague from the other side of the aisle 
that everybody saw this coming. I think if people saw it 
coming, there would have been a lot more people shorting the 
market, and that didn't happen to the extent that you would 
have expected.
    So tell me how you, as the Chief Operating Officer of this 
new agency, are going about putting together a work plan in 
terms of identifying data needs? You mentioned establishing 
data standards. What kind of data are we talking about and how 
are you going to use that to help identify these risks?
    And then, I would like to have you talk about what you 
might have done with some of the mortgage data and information 
and the concentration of risk at AIG and the derivatives 
markets, CDSs in particular. So tell me how you are going to 
approach this problem, what you are doing now, maybe what data 
you will be collecting this year and next, just so I have a 
better idea of how you are going to accomplish the charge that 
you have been given?
    Ms. Shannon. Congressman, thank you very much. Again, the 
purpose of the OFR, the mission of the OFR is to collect data 
and conduct research, and in that data collection, only the 
data that is necessary to assess threats to financial 
stability, only the data that is necessary to fill gaps--
    Mr. Carney. So what does that look like for me, who doesn't 
know the particulars that you are dealing with every day?
    Ms. Shannon. So going to the example that you mentioned, in 
the crisis there was not a very good understanding of some of 
the interconnections within the market, some of the risks in 
the market that were created through the securitization and 
through the use of CDS. The data that were available at the 
time to assess these risks and to see how those risks may be 
transmitted through different markets, from one financial 
institution to another, that data was not available in a form 
that was most effectively useful to policymakers, to market 
participants themselves to truly understand their own exposures 
and the exposures of their counterparties, and the work of the 
OFR, the work of the FSOC to try and better understand risks 
across the entire system. Individual regulators are looking at 
one part of the system. The FSOC is charged with making sure 
they are looking across the entire system, and the OFR has been 
established to help in that mission.
    Mr. Carney. My time is ticking off, so what are the top two 
or three priorities with respect to what you need to do between 
now and next year?
    Ms. Shannon. Congressman, let me point to two initiatives 
that we have under way. Right now, we are working with other 
FSOC agencies to conduct an inventory of the data that they 
have already. So, again, we see our mission only as filling 
gaps. We don't intend to collect data for datas sake. The first 
thing that we need--
    Mr. Carney. Does that mean you don't know what the gaps are 
yet or you are just identifying them?
    Ms. Shannon. We are working to find out what those gaps 
are, and the data inventory is going to help us do that. If we 
understand what information already exists within the 
regulatory community, make that information available to others 
within the regulatory community, within the FSOC, we are going 
to be better able to utilize the data that already exists, and 
we are also going to be able to understand where the data gaps 
exist that need to be addressed.
    Mr. Carney. So are you doing anything or have you done 
anything with respect to the risk associated with European 
sovereign debt issues?
    Ms. Shannon. Congressman, we are working with the FSOC, and 
this is obviously a very important issue in terms of the 
financial system. The OFR is supporting the FSOC on this and 
other issues. One issue or one example I would just point to, 
the OFR has money market fund data, and is looking at that data 
to look at the exposures of U.S. entities to Europe. So that is 
one way that we are helping the FSOC in its analysis of those 
threats.
    Mr. Carney. Those principal agencies, I guess, are the ones 
that transmit those findings or make those findings and then 
share them with us?
    Ms. Shannon. The analysis that might be conducted by the 
FSOC using those data--
    Mr. Carney. Would be done by you, but then the agencies 
themselves would issue those findings?
    Ms. Shannon. We would support the FSOC and the member 
agencies. We also are working to publish some of our research. 
That research is obviously informed by the work that we are 
doing to support the FSOC. Let me just point to one example.
    Mr. Carney. I see my time has expired, so unless I am given 
the okay from the Chair, you probably should--
    Chairman Neugebauer. I thank the gentleman. And now, 
someone who is doing a lot of good work on this issue of the 
OFR, Mr. Canseco from Texas. Thank you for the work you are 
doing.
    Mr. Canseco. Thank you, Mr. Chairman. Ms. Shannon, thank 
you for being here today. The Office of Financial Research was 
created by Dodd-Frank more than 20 months ago. Has the OFR 
helped to prevent a financial crisis since that time? And, if 
so, what was the nature of that potential crisis?
    Ms. Shannon. Congressman, we are working to stand up the 
OFR, and the mission of the OFR obviously is to help assess 
threats to financial stability.
    Mr. Canseco. But let me interrupt you a second, please. Has 
it prevented any crisis or any potential crisis in those 20 
months?
    Ms. Shannon. Congressman, it is very hard for me to answer 
the counterfactual. I think what we are doing is putting in 
place the tools that we need to achieve our mission, and we are 
already--
    Mr. Canseco. So then, your answer is no?
    Let me ask you this, how will the OFR know and, more 
importantly, how will the public know when the agency has 
played a hand in the prevention of an ongoing crisis? In other 
words, what is the measure of success for this agency?
    Ms. Shannon. Congressman, we have established the mission 
of the OFR to support the FSOC and to provide research and 
analysis on threats to financial stability. Our function is to 
provide information, to provide data, to provide analysis to 
support policymakers, to support market participants in 
understanding and addressing the public--
    Mr. Canseco. In other words, forgive me for interrupting 
you, but in other words, you are only a data-gathering 
institution, is that what I am hearing?
    Ms. Shannon. The mission of the OFR is to--
    Mr. Canseco. Gather data.
    Ms. Shannon. Gather data, provide that data to FSOC 
agencies, also to publish data and to perform research and 
analysis. So we are a research organization. We provide data 
services. Those are the key functions of the OFR.
    Mr. Canseco. Dr. Berner is not here with us today. So do 
you know if Dr. Berner has created any kind of performance 
goals for the OFR?
    Ms. Shannon. Congressman, we are working right now on 
establishing performance measures. As we mentioned in the 
strategic framework that was published last month, the OFR, in 
that strategic framework, established goals, established 
implementation priorities for the organization for this year 
and for the period ahead, and one of the things that we 
mentioned in that strategic framework that we are working on 
right now is performance measures.
    Mr. Canseco. Good.
    Ms. Shannon. We plan to have--
    Mr. Canseco. Would you please ask if you and Dr. Berner can 
directly report to my office--1339 Longworth--on how the OFR 
plans to measure its success, and if you could provide it to us 
in writing, please. And I would also like to offer it as part 
of the record, if I may, once it is provided.
    Chairman Neugebauer. Without objection, it is so ordered.
    Mr. Canseco. Thank you. Ms. Shannon, at the last hearing, I 
asked Dr. Berner about what the OFR is doing to implement a 
robust cost-benefit analysis on their proposed methods for 
collecting data. Unfortunately, he did not provide specifics, 
and as we have noted, the Treasury Department has refused to 
provide him as a witness today for me to question him further. 
So can you please elaborate on what specific methods are being 
implemented for data collection to ensure cost-effectiveness?
    Ms. Shannon. Congressman, I think the first priority is 
that the OFR will only collect data when it is absolutely 
necessary. The OFR recognizes and fully agrees with the 
principle that we need to focus that data collection on our 
mission. The only data that are necessary to assess threats to 
financial stability and only the data that is not otherwise 
available. And, again, I mentioned earlier that we are 
currently focused on establishing a data inventory of data 
available in FSOC agencies, purchased data, we have already 
completed this portion, collected data, and also derived data.
    And the intention there is to make sure that we don't 
collect data that is not absolutely necessary. We are also very 
focused on ensuring that whatever data we collect is tied to 
the analytical needs related to threats to financial stability. 
So I would just note that we agree fully with the notion that 
we have to be very parsimonious in our data collection and that 
that data collection needs to have a high benefit.
    Mr. Canseco. What kind of benefits have you identified as a 
result of these things that you just mentioned?
    Ms. Shannon. Congressman, we are still in the process of 
putting together the data inventory. What we are doing is 
making sure that we know what data exists. Another benefit of 
this is that it is allowing us to work with other FSOC member 
agencies so that they also are aware of what data is available. 
I would mention that in the FSOC's data committee, the OFR has 
been very actively working with other FSOC member agencies on 
what data needs they have.
    Mr. Canseco. I have one more question. My time is about to 
run out, Mr. Chairman.
    Chairman Neugebauer. Okay.
    Mr. Canseco. I want to know if the OFR has issued any 
subpoenas to compel a financial institution to give data to the 
OFR?
    Ms. Shannon. I don't believe so.
    Mr. Canseco. Thank you very much. I yield back my time.
    Chairman Neugebauer. I now recognize the ranking member, 
Mr. Capuano, for 5 minutes.
    Mr. Capuano. Thank you, Mr. Chairman. Ms. Shannon, do you 
drive a car? Do you drive?
    Ms. Shannon. Yes, sir.
    Mr. Capuano. The last time you drove, did you put your seat 
belt on?
    Ms. Shannon. Yes, sir.
    Mr. Capuano. Did it prevent you from having an accident? 
Did it prevent you from dying that day?
    Ms. Shannon. I can't answer that.
    Mr. Capuano. You don't know, right? But you put the seat 
belt on?
    Ms. Shannon. Yes.
    Mr. Capuano. Because you weren't sure you were going to get 
in an accident? The last time you flew, did you go through 
those metal detectors?
    Ms. Shannon. Yes, sir.
    Mr. Capuano. Did everybody go through those metal detectors 
on that flight? Did it absolutely stop a terrorist attack on 
that flight that day? You don't know, do you?
    Ms. Shannon. That is correct.
    Mr. Capuano. So what you do, you may never know. No one may 
ever know if you actually prevent a bad occurrence. No one can 
ever know if anybody ever prevents a bad occurrence; no police 
officer, no firefighter, no emergency technician. When you get 
asked an impossible question, it is impossible to answer it 
except with ridiculous analogies like I just did.
    I also wanted to submit for the record the strategic 
framework of the Office of Financial Research that is online. I 
know everybody has it, it has been referred to a bunch of 
times, but I would like to put it in the official record, 
without objection.
    Chairman Neugebauer. Without objection, it is so ordered.
    Mr. Capuano. I have read it--well, I didn't read it; I 
looked through it. It was very nice. I don't know, Ms. Shannon, 
next time you do one of these updates, maybe you would be 
better off putting more pages in, making it thicker, and 
putting a glossy cover on it. Maybe that would make some people 
satisfied. Maybe not. You would probably then get criticized 
for spending too much time and wasting too much paper, I am not 
sure of that, either.
    I will tell you, though, I agree with one of my colleagues 
when he said people who commit bad behavior should be jailed, 
and that I actually think in this instance I totally agree with 
his assessment, that not enough people have paid enough 
consequences for the actions that they participated in in 2008 
and other years. Do you have the authority under the statute to 
place anybody in jail?
    Ms. Shannon. Congressman, the OFR does not have that 
authority.
    Mr. Capuano. No, I didn't think so. That is the Justice 
Department that does that and others, and I would agree, I 
totally agree, that I don't think that they have been strong 
enough on their actions. I totally agree with that, but you are 
not the right agency to ask that question. I would hope that as 
you find, if you find wrongdoing, that you would submit it to 
the appropriate agencies for their review. Is that a fair 
assessment? Would that be in your responsibilities?
    Ms. Shannon. Congressman, absolutely, the OFR, as I said, 
we are very dedicated to the objective of protecting data, we 
think this is essential to achieving our mission, and we will 
do whatever it takes to--
    Mr. Capuano. So if you uncovered wrongdoing, you would send 
it along to the appropriate investigative agency?
    Ms. Shannon. Absolutely.
    Mr. Capuano. That is what I thought. I will tell you that--
look, you are a new agency, you are just getting started, I 
share the frustration of some that a lot of the things from 
Dodd-Frank have taken so long to get going, I share that 
frustration. Yet at the same time, it is impossible to blame 
you specifically because I actually think it is along the line 
and I would like to be further down the road as well. I am 
looking forward to you being up and running. I happen to think 
the collection and analysis of data is an important thing that 
we should be doing. I really don't care if it is OFR or 
somebody else doing it, but I do care deeply about the 
potential for excessive data collection.
    I think that is a very reasonable concern. I think that 
many--I think everybody here shares that. I would like to know 
from you, are you working on--do you already have a process if 
some business gets a thousand requests for information from you 
and more requests, the same requests from the Fed, and the same 
requests from the OCC, and the same requests from OFR, again, I 
think that is a very fair thing. I would like to know for a 
minute, are you working together with other agencies to make 
sure that the same questions, the same information is not 
gathered by each of you independently, thereby causing 
excessive cost and time to the private companies?
    Ms. Shannon. Congressman, thank you for asking. This is an 
important question, and I am glad to have the opportunity to 
address it. We do see an important part of our mission is to 
help to support greater efficiencies in data collection across 
FSOC agencies, including of the type that you mentioned. If we 
do find in the data inventory that there are overlaps, 
duplication of effort, this is something that we would work to 
address.
    Our work on data standards, I think, also is relevant to 
this point. If there are specific data standards about how 
certain items of data are reported, that would create 
efficiencies, both for the regulatory community and also for 
those reporting, and we are very focused on this, and we do 
think that mission of helping to create efficiencies for 
regulators, for financial market participants, is a crucial 
part of what the OFR was set up to do.
    Mr. Capuano. I thank you. As time goes on, I will tell you 
that I think a lot of us will be keeping a close eye on that, 
and we will be keeping a close eye on your budget, even though 
we don't technically have any role in the matter. Let's be very 
clear about it. But if you get to the point where we think you 
are excessive, we will say so, and I will join them if I agree 
with them even though I think your mission is important.
    We are not there yet, obviously. I know you know that, but 
I wanted to say it because so many people have been commenting 
on the lack of some budgetary magic number, and I understand 
that, but if you exceed some number that upsets us, that we 
think is excessive, we will call you on it. If I am one of 
them, I will join my colleagues in doing that. I know you know 
that.
    The same thing with the data collection. I guess I would 
like to know, assuming I am a major company for which you are 
seeking information, is there a process that I could follow to 
say, hey, I just gave the same exact information to this other 
agency, didn't you know that? And, by the way, I would like to 
make a complaint because you are killing me on this data 
request. Is there a process to follow by the companies or is it 
simply left up to your judgment that you have asked too many 
questions?
    Ms. Shannon. Congressman, this, again, is an important 
question. It is something that we are working to build within 
our organizational structure, resources within the OFR that are 
dedicated to working with all of our stakeholders, with the 
regulatory community, but also with the financial market 
participants who are providing data to the FSOC and to the OFR 
to help ensure that we understand their concerns, their needs, 
and that the way that we are going about data collection is as 
efficient as possible, and I think this is critical to what the 
OFR was set up to do.
    Mr. Capuano. I appreciate it, Ms. Shannon. When the time 
comes, when you finalize this, I would really appreciate an 
education, an update on it because I actually think it is 
critically important. It is going to happen, there is no 
question that somebody is going to say, we provided too much 
data to too many people, the same data, and they are going to 
come to us, and I would like to know that there is a process 
whereby they should be following internally before they come to 
us, and when that gets settled, not just your agency, it will 
be other agencies as well, I would like to be updated on that 
when it happens. Thank you very much, and thank you, Mr. 
Chairman, for being reasonable on time.
    Chairman Neugebauer. I thank the gentleman. The gentleman 
from Ohio, Mr. Renacci, is recognized for 5 minutes.
    Mr. Renacci. Thank you, Mr. Chairman, and thank you, Ms. 
Shannon, for being here today. I have been listening to you. I 
know you have said a couple things, and I am going to repeat 
them. You said that the OFR's role is--you have an important 
and critical mission. I have heard you say that 5 or 6 times. 
The other thing I heard you say was there is an importance of 
linking spending money to meet our goals, which are your goals, 
and the strategic plan. You mentioned that to Mr. Fitzpatrick.
    So I have a question for you, especially when it comes to 
that, because I think when it comes to spending money, when it 
is not your money it is a little easier, and one of our jobs up 
here is really oversight of money being spent, and I think that 
has to be a key to what we are talking about today. So you 
would admit, though, that if you were giving somebody money, 
you would want to know what it was being spent for, correct?
    Ms. Shannon. Congressman, it is absolutely essential that 
the OFR is accountable for how it is spending money. We 
completely agree with that.
    Mr. Renacci. Okay. I have an email that is dated November 
15th from Dr. Berner, and I wish he was here, although you were 
copied on it, and you may have a copy of it, but it is where 
your organization was asking for $29 million, and you basically 
say that these amounts include a payment for the period July 
10th through July 30th, we will continue to work with the board 
to provide them detail. So you are asking for money. There is 
not very much detail in that email.
    Then I have another email dated November 23rd which says, 
``Here is your $29 million.'' Now, it is kind of interesting 
because as a taxpayer, which I am, you are, and everybody in 
this room is, isn't it more important--shouldn't we know what 
that $29 million is being spent for? And can you give me some 
answers as to what--are we just asking for $29 million? Could 
it be a trip to Vegas, what could it be? What are the things 
that could be in that $29 million, and wouldn't it be better to 
have the detail for that? Can you kind of give me some details 
on that?
    Ms. Shannon. Congressman, thank you. The emails that you 
reference were part of the materials, or a discussion between 
the Treasury and the Federal Reserve about the transfer of 
funds from the Fed. As you know, under the statute, the OFR is 
financed through the Federal Reserve for--
    Mr. Renacci. I understand. I don't want to go into the 
details. I understand that. What are the details of the $29 
million? That is what I want to know. And are they expenditures 
you already made? Are they expenditures you are planning? Are 
they contractual obligations? Just tell me what the details are 
and how the process works to get $29 million because this 
seems--if I am a taxpayer, I am not very happy with just the 
process of asking without the details.
    Ms. Shannon. That is right, Congressman, and I absolutely 
agree, we need to have clear documentation on these requests, 
and we do. These emails are part of a discussion, but there is 
other documentation related to that request. There were also 
meetings between the Treasury and the Federal Reserve about 
these requests.
    Mr. Renacci. My time is running out. Is there any detail 
that supports the $29 million request?
    Ms. Shannon. There are details.
    Mr. Renacci. Specifically in writing?
    Ms. Shannon. There are details, and we would be happy to 
work with your office to provide you the information you need. 
We also did provide in the testimony some background details on 
this.
    Mr. Renacci. Would you be willing to send me in the next--
as soon as possible, the details of the $29 million and 
something that shows what the request was for?
    Ms. Shannon. Absolutely. And I should mention that the 
transfers are linked to the budget of the OFR, the published 
budget of the OFR and--
    Mr. Renacci. Look, I have been a business guy for 28 years, 
I understand what you are saying, but really, if you are going 
to ask for $29 million, that is not a drop in the bucket. We 
need to know what it is, and that is what this oversight panel 
is all about. We are trying to figure out what you are asking 
for. The concern I have is you asked--you told Mr. Fitzpatrick 
that you didn't even have a strategic plan. I understand you 
have goals and missions, but you have to have a plan, and then 
after you have a plan, you have a request for dollars to 
implement that plan. I hear you don't have the plan to 
implement, but yet you are asking for the dollars. It is 
problematic.
    Ms. Shannon. I just want to note that we do have a budget 
in place, and that is the basis for this request. We do have a 
strategic framework in place, and we are continuing to work to 
elaborate on that further.
    Mr. Renacci. All right. A number of us up here have talked 
about this financial research fund report that was put out. You 
are showing on October 1, 2012, that you are going to have 94 
million, 374 dollars of unobligated balances, so the start of 
the new year. Can you tell me a couple of answers to that? 
Where is that coming from? I also know that 2 years after the 
enactment of Dodd-Frank, you were supposed to refund the Fed 
and fund yourself through assessments. So let's talk a little 
bit about that. Where is the $94 million coming from in the 
report? Is it going to be refunded to the Fed? Did it come from 
assessments? There are a couple of questions there, if you 
could answer.
    Ms. Shannon. Congressman, I am happy to explain the process 
and how those numbers relate to the process. The OFR is funded 
by the Federal Reserve.
    Mr. Renacci. I understand the process. I am talking about 
the $94 million, where did it come from? It is a document. Is 
it Fed money that you are going to refund or is it assessments? 
These are pretty simple questions.
    Ms. Shannon. Congressman, we are collecting money from the 
Fed. We will utilize the funding that we have requested. Any 
funding that is not utilized by July will be returned to the 
Fed. Beginning in July we will be financed through 
assessments--
    Mr. Renacci. I understand that. How about the $94 million? 
The question is really simple, what are you going to do with 
the $94 million of, as you call it, unobligated balances?
    Ms. Shannon. At the end of this fiscal year?
    Mr. Renacci. End of this year, start of next year.
    Ms. Shannon. One important point I should make is that the 
fiscal year, the budget for the fiscal year does not align with 
the period for the assessments. The assessment period will 
begin in July of this year and cover a period--
    Mr. Renacci. I understand that. I do understand the 
process. I am just asking a really simple question about $94 
million and what are you going to do with the $94 million. Are 
there contractual obligations for it? You have not answered one 
of those questions. Is there a contractual obligation? Is it an 
amount you are going to refund? These are pretty simple 
questions.
    Ms. Shannon. The money that we collect through assessments 
that is not obligated in Fiscal Year 2012 will be going towards 
funding expenditures in Fiscal Year 2013. In that assessment 
period, if we don't utilize any of those resources, they would 
go to reduce the assessment in the period that follows. So in 
each period, we are collecting the funding that we think we 
need to cover, that we estimate we need to cover the expenses 
for that assessment period, and if we--
    Mr. Renacci. I have run so much out of time, and you are 
going in--it would have been a really simple answer to say, we 
know we have $94 million, we anticipate that so much is going 
to be given back to the Fed. Those are the kind of answers I 
think we are looking for. This is an oversight hearing. Tell us 
where you are spending the money. The taxpayers in this country 
want to hear those answers. They don't want to hear all the 
policy and issues you are talking about. Thank you. I yield 
back.
    Chairman Neugebauer. I thank the gentleman. And now the 
gentleman from New Mexico, Mr. Pearce, is recognized for 5 
minutes.
    Mr. Pearce. Thank you, Mr. Chairman. Ms. Shannon, I know 
you feel like we are all kind of a little scratchy, and maybe 
we are. Some of that scratchiness comes--I am reading an email 
from Scott Alvarez. Do you know Scott Alvarez? It doesn't 
matter if you know him or not. To George Madison from Scott 
Alvarez: ``George, as we discussed the other day I have 
authorized our payment folks to transfer $29 million to OFR to 
cover expenses OFR and FSOC incur with the next quarter, so in 
response to your request--it goes on down later--I appreciate 
and will take you up on your offer to assemble the OFR folks 
next week or so to help us get a better handle on it.''
    Mr. Capuano. Will the gentleman yield for one second? I 
apologize for interrupting.
    Mr. Pearce. No, I won't yield. I appreciate and will take 
you up on your offer to assemble OFR folks in the next week or 
so to help us get a better handle on what amount--
    Mr. Capuano. Mr. Chairman, if the gentleman won't yield, I 
would like to have a point of order.
    Mr. Pearce. No, I won't yield.
    Mr. Capuano. I am just curious as to what has shown up on 
the screen here. Is this something, is this a headline? It has 
nothing to do with Mr. Pearce's time.
    Mr. Pearce. This is a document that I have that I just want 
it to be advertised that the Treasury has refused to make Dr. 
Berner available. They refused to make him available. He is the 
one who ought to be at this hearing today.
    Mr. Capuano. So this is a commentary we can--
    Mr. Pearce. Mr. Chairman, it is my time. I feel if the 
gentleman will stand down, he can ask for his own time.
    Mr. Capuano. This is a point of information. This is not--
this is a point of information. I am trying to figure out how 
we use this.
    Mr. Pearce. No, I am asking for that document to be up 
here. It is one I had prepared, so I thank the gentleman, and I 
will take my time back.
    Mr. Capuano. This is a statement.
    Mr. Pearce. Mr. Chairman, if it is his time, let him speak. 
If it is not his time, then I would ask you to--
    Mr. Capuano. Point of information, Mr. Chairman. I am just 
curious about the rules of the committee.
    Chairman Neugebauer. I would ask both gentlemen to suspend 
a minute. This is an exhibit that Mr. Pearce has. The rules of 
the committee require that we distribute that.
    Mr. Capuano. And it has not been distributed.
    Chairman Neugebauer. It has not been distributed, but it is 
being displayed for the members of the committee via obviously 
the two screens there. So I guess in the spirit that we--
    Mr. Capuano. I don't mind, Mr. Chairman, that is all I was 
asking. I don't mind the gentleman making a point. I do mind, 
when I see something on the screen and I have no idea what it 
is, I do mind not having notice of it. I think that is fair and 
reasonable. That is all. Actually, I think the gentleman has--
    Mr. Pearce. I have no control of the screen.
    Mr. Capuano. I know you don't.
    Mr. Pearce. We asked for it to be displayed. I have no 
control of the screen.
    Mr. Capuano. That is why this wasn't directed at you.
    Mr. Pearce. If you are going to run an instant replay, we 
should put 4:07 back on the clock, that is when the gentleman's 
objection started.
    Chairman Neugebauer. I will give the gentleman time.
    Mr. Pearce. All right. If I may resume, I appreciate and 
will take you up on your offer to assemble the OFR folks in the 
next week or so to help us get a better handle on what the 
amount of those expenses are expected to be.
    So we have this nice little buddy relationship between 
George and Scott. By the way, enjoy the Thanksgiving holiday. 
We have George and Scott just talking over an email, and we are 
shifting taxpayer money around, you are able to tax 
corporations without any oversight by the U.S. Congress. Our 
Constitution is pretty clear, and so if we are a little 
scratchy on our side, just understand it is because you are 
conducting things that we feel like are completely 
unconstitutional, I feel like they are completely 
unconstitutional, and with a guy who has been parading around, 
GSA all around the world the last few years, taking his wife 
along at taxpayer expense, our constituents, you don't have to 
answer those questions, ma'am, because you don't run for 
office. You are sitting up here in this kind of isolated little 
space requesting 29 million bucks for the next quarter, and, 
yes, we will get everybody together and we will kind of run 
those expenses up here some day, and we are going to want to 
look at the way our Founding Fathers intended this to occur is 
this body to appropriate, and they would bring you in here and 
they would grill you across, and you would have to really prove 
up on those.
    Instead, we get about a quarter of a page email to transfer 
29 million bucks, and that is offensive to the American people 
because they see our Secret Service, GSA, they see the waste of 
the taxpayer dollars; they see it.
    So you ran a $122 million budget last year and then your 
budget is roughly $60 million for contract services. What if we 
are going to look at those, Ms. Shannon, what are those for? 
What are you contracting $60 million out for?
    Ms. Shannon. Congressman, thank you. First, we absolutely 
agree on the importance of accountability.
    Mr. Pearce. Can you pull the microphone up a little closer? 
We have a lot of people who would like to hear.
    Ms. Shannon. Absolutely. Can you hear me?
    Mr. Pearce. I just want to make sure everyone can hear you.
    Ms. Shannon. Absolutely. We absolutely agree on the 
importance of accountability.
    Mr. Pearce. So that is $60 million?
    Ms. Shannon. And just to clarify, the email exchange that 
you pointed to--
    Mr. Pearce. No, no, I am not asking about the email 
exchange, you can come back next week and talk about the email. 
I am asking about the $60 million that is in your budget for 
contract services.
    Ms. Shannon. And I am happy to answer that. The contracting 
that we are doing right now falls into two categories, two main 
categories. First, the OFR receives certain services from the 
Treasury, from the Bureau of Public Debt, and also from the 
OCC.
    Mr. Pearce. What kind of services?
    Ms. Shannon. On the implementation of our operational 
activities, human resources, financial management, procurement. 
These are obviously crucial issues for our stand-up. These are 
things that we expect to continue. We are using the efficiency 
of operations that are--
    Mr. Pearce. So you are contracting back with the 
government?
    Ms. Shannon. So we are contracting--
    Mr. Pearce. I really do need to move on if you don't mind. 
So you are assessing, you had said in your document in your 
presentation, that you are trying to assess the threats to 
financial stability. If you were going to give me the greatest 
threat to financial security, stability, I am sorry, what would 
you--you are the COO. What would you say the greatest threat 
is?
    Ms. Shannon. So, Congressman--
    Mr. Pearce. Yes, to the financial stability. You are the 
COO, you are the one who calls the plays. What is the greatest 
threat to financial stability that we face?
    Ms. Shannon. Congressman, in my position as COO, just to 
clarify, I am in charge of--
    Mr. Pearce. No, just give me a one-word answer. What is the 
greatest threat we face?
    Ms. Shannon. Congressman, I don't--I think it--
    Mr. Pearce. Okay, so we hired a COO who can't put it into 
one word. I think one of the greatest threats, for instance, if 
you had me drawing your salary and pulling your job, I think 
one of the greatest threats is that we have allowed some of the 
financial institutions to build up a 40-to-1 leverage ratio. 
That sunk Lehman Brothers, and it should have sunk several 
others. But we have a COO who can't call the plays.
    You can't tell me in one word what you think the greatest 
financial risk is, and you are hiring all the people who are 
supposed to be putting this in place. So you spent $122 million 
last year with no performance measure in place, and you are 
assembling a team without knowing exactly what the goal is. If 
a coach wants to have a team that is a passing team, he 
obviously needs a passer and some people to catch the ball. And 
if he hires all running backs, then he probably isn't going to 
do that, and you have--you can't tell me where the goal line 
is.
    I will guarantee you one of the greatest threats is that 
leverage ratio, and I wonder how we are building a team without 
a COO who can state in one word what she believes is the 
greatest risk to financial stability that we face.
    If you find a little bit of testiness coming from this side 
of the committee, understand it is because we think you are 
walking past the Constitution, whistling past the graveyard, 
and you are also putting a team in place without any 
understanding of where you want to go and without any 
performance measures in place, and you also, in your own words, 
you can't state, in your view, what the greatest risk to 
financial stability in the country is, and you are tasked with 
that job. That maybe is why some of us are just a little bit 
testy on this side. I yield back, Mr. Chairman.
    Chairman Neugebauer. I thank the gentleman, and now the 
gentleman from Tennessee, Mr. Fincher, is recognized for 5 
minutes.
    Mr. Fincher. Thank you, Mr. Chairman, and thank you, Ms. 
Shannon, for being here today. How long have you worked for the 
OFR? How long have you been with the Office?
    Ms. Shannon. I have been with the Office since July of last 
year.
    Mr. Fincher. Okay. What is your salary?
    Ms. Shannon. Congressman, I am paid within the pay bands of 
the OFR, I am in a management position within the OFR. I am 
paid within the pay band 8 of the OFR.
    Mr. Fincher. And what is that?
    Ms. Shannon. The band extends from $136,000 to $247,000. 
The bands in the OFR were established consistent with the 
statute to be FIRREA comparable, and so the way that the OFR 
set up its salary structure was to look at the salary 
structures within other organizations that are part of the 
FIRREA, the OCC specifically, and we worked on establishing 
bands that were consistent with the legislative requirements.
    Mr. Fincher. So it was $136,000 to $247,000. Would you be 
on the lower end or the higher end of that scale?
    Ms. Shannon. I am within that band, and, again, this is 
consistent with what the statute establishes for the way that 
the OFR is required to set its pay.
    Mr. Fincher. Okay. During the July 14th hearing of last 
year, I asked whether there is a cap on salaries within the 
OFR. Dr. Berner testified that OFR has set a salary guideline, 
a set of salary guidelines that are consistent with the pay 
scale for other Federal financial regulators, and he would 
provide the salary cap to the subcommittee. We haven't received 
that yet. And so, do you have the cap for the employees?
    Ms. Shannon. Congressman, we are happy to make that 
information available about the pay bands within the OFR and 
the pay scales within the OFR. I had understood that we had 
provided that information, but we would be happy to provide 
that information if you don't have it.
    Mr. Fincher. Okay. Following up with my colleague Mr. 
Pearce, when he was talking about the contractual services, 
have the contracts been subject to competitive bidding?
    Ms. Shannon. Congressman, we do follow Federal regulation, 
and in general, yes, the contracts have been subject to 
competitive bidding.
    Mr. Fincher. All of them?
    Ms. Shannon. There has been, I think, and I can check this, 
I think on some of the data procurement, we have done some sole 
source contracting, and in all cases, have been doing so 
consistent with Federal regulations for that kind of 
contracting.
    Mr. Fincher. Okay. Can you get us a detailed copy, the 
subcommittee, on all the contracts that have been bid, if all 
of them have?
    Ms. Shannon. Congressman, we are happy to provide you the 
information you need.
    Mr. Fincher. Thank you. And then another question: Have you 
ever owned your own business?
    Ms. Shannon. Congressman, no, I haven't.
    Mr. Fincher. Okay, all right. That is all. I yield back, 
Mr. Chairman. Thank you.
    Chairman Neugebauer. I thank the gentleman. Are there any 
other Members who would like a follow-up? Just Mr. Posey?
    Mr. Posey. Thank you, Mr. Chairman, just momentarily. Ms. 
Shannon, I am a little bit chagrined that when the Congressman 
asked you what your salary was, you refused to tell him.
    Ms. Shannon. Congressman, I didn't refuse. I am paid within 
the OFR salary band.
    Mr. Posey. He didn't ask you what your salary range or band 
was, he asked you how much you made. It is no big deal. It 
ought to be a matter of public record. I just think you would 
be straightforward enough to tell him exactly what it is.
    Ms. Shannon. Congressman, I am within the bands of the OFR, 
the band-aid of the OFR.
    Mr. Posey. I can understand dodging a lot of questions, but 
I don't see what the harm is in telling a Member of Congress 
who asks you how much you are paid just a straight answer. Do 
you not know how much you are paid?
    Ms. Shannon. Congressman, I am paid within that band, and--
    Mr. Posey. That is like the Fifth Amendment.
    Chairman Neugebauer. Ms. Shannon, would you be prepared to 
furnish that to--rather than doing it in a public space here--
Mr. Posey?
    Mr. Posey. Mr. Chairman, I don't even care about it. I just 
care that she refused to answer the gentleman's question.
    Ms. Shannon. Congressman, I believe I have answered the 
question. I am happy to provide any additional information 
about how we set salary structures within the OFR.
    Chairman Neugebauer. I think he asked you a direct 
question, and I think the pinch is that you didn't answer the 
question.
    Mr. Ellison?
    Mr. Ellison. Thank you, Mr. Chairman. I had a follow-up on 
the point raised by the gentleman from Florida, Mr. Posey, not 
this last round but the one before, and I agree that there must 
be consequences for bad behavior, and some people should go to 
jail if that rises to the level of criminal conduct for the 
subprime fraudulent activity. Today, there are about 325 FBI 
agents pursuing almost 100,000 cases of mortgage fraud, and 
that is why I am sort of wondering why--I am actually at a loss 
to see how the OFR can be defunded by this committee. It can be 
seen as just creating, I guess the term ``lobbying machine'' 
was used in connection with OFR. I can't really see that if our 
goal is to protect people.
    Here is my question: To assess the risk gaps you 
identified, do you have the appropriate level of independence 
to achieve your goals?
    Ms. Shannon. Congressman, under the statute, the OFR has 
certain authorities and certain responsibilities, a confirmed 
Director of the OFR will have certain authorities to conduct 
the mission of the Office. We are working very hard to build 
the operations of the Office, and we think that we have the 
tools we need to meet that mission, and we are continuing to 
make progress in doing so.
    Mr. Ellison. Just a quick follow-up. And I also just want 
to say that I can't escape the fact that our Nation was brought 
to the brink of financial collapse in October 2008. That is 
what brought us to the moment where we had to legislate to 
create your agency, and the fact that so much of the 
questioning has to do with how much you are paid, I am curious 
to know, I was waiting for somebody to ask you what kind of car 
you drive or what kind of seats you have on your bathroom 
toilets.
    It gets crazy after a point. The real issue is, how are we 
going to protect the American financial system and does the 
FSOC need accurate data or not, and is your agency positioning 
itself to provide the data and the analysis that is needed? 
That is the issue for me. I guess that is not really a 
question, it is just my reaction to some of the things that 
were offered in the hearing today.
    Chairman Neugebauer. Mr. Fincher?
    Mr. Fincher. Yes, let me just say something in response to 
my colleague, Mr. Ellison. I don't mean to offend you, Ms. 
Shannon, or my colleagues on the other side of the aisle, but 
this is taxpayer money, and when people back home see that this 
is happening and see that, with all due respect, you won't 
answer the question about how much money you make, 
specifically. When is the last time you had a pay raise, would 
you answer that?
    Ms. Shannon. Congressman, I have been in the OFR for 9 
months, and I haven't received a pay raise since I have been in 
the OFR.
    Mr. Fincher. Okay. The perception from the general public 
when they see this, it just upsets them, and with all due 
respect, I don't work for the President, for the Speaker, or 
for the Chairman. I work for my district back home, and they 
are really sick and tired of this, and so it is just 
frustrating. I don't understand why you won't just tell me how 
much money you make, but at the same time you see, no offense 
to my colleagues on the other side of the aisle, but this is 
their money, it is not ours. I yield back.
    Mr. Posey. Mr. Chairman?
    Chairman Neugebauer. Just a minute, I think Mr. Pearce--
    Mr. Pearce. Thank you, Mr. Chairman. If I could kind of 
follow along on that. The Treasury Secretary claims there is 
going to be transparency in accountability and transparency and 
says that we post all the salaries--you are government workers, 
aren't you? Are you a government agency?
    Ms. Shannon. Yes, Congressman.
    Mr. Pearce. That is what it comes down to. It has little to 
do with what you actually make; it has to do with the 
transparency. I know my friend from Minnesota really doesn't 
think that is a part of transparency, but maybe we do, and 
maybe it is just a different point of view there. Are you 
familiar with--let me go to another question. I will come to 
the familiarity with--
    So you said that you want to fill in the gaps of 
information. Isn't that kind of what you said, gaps of data?
    Ms. Shannon. Data gaps related to assessing--
    Mr. Pearce. Yes, data gaps related, that is your function, 
right? You have some data available and some gaps in the data. 
So what--can you identify those gaps in the data, what is not 
available?
    Ms. Shannon. Congressman, we are working now to--
    Mr. Pearce. So, again, you tell me the answer is no. It 
says in your first paragraph, we are beginning to deliver on 
our data- and research-related mandates, and yet you can't give 
me one specific. You can't tell me what the risks to financial 
security are, and you can't tell me what the gaps are, and you 
are building a team to measure stuff that you can't tell either 
component of, and we just sit up here and say we have no 
control, it is supposed to come through an appropriating 
committee who could defund you if you can't provide these 
things. So it does get a little bit scratchy.
    Are you familiar with long-term capital?
    Ms. Shannon. Congressman, to answer your question, we are 
beginning to deliver on our--
    Mr. Pearce. No, no, but you can't give me any of those 
specifics today. Could you provide them sometime in the next 
week or so?
    Ms. Shannon. Congressman, we are happy to answer your 
questions. I would be happy to answer your question as well if 
you would permit me.
    Mr. Pearce. So just itemize the data gaps that you see that 
we ought to be filling up. I don't want to hear that we are 
getting around to it, and I don't want to hear that because I 
have already heard that in every other answer, but if you have 
1, 2, 3, these are the data gaps that we are trying to figure 
out how to assess, that would be something I would consider 
significant, but if you can't answer 1, 2, 3, and fill in the 
blanks, then I am not much interested in hearing the circuitous 
discussion that you are having on every other question, ma'am. 
So if you have the 1, 2, 3, go. If you don't, then don't go.
    Ms. Shannon. Congressman, we are inventorying the data that 
is in the FSOC now, we are going to be looking at that data, 
and we are going to be looking at what additional data we need 
to assess threats to financial stability.
    Mr. Pearce. But I don't hear any gaps there, I don't hear 
you identifying any gaps. So thank you very much on that.
    Now I will go back to my other question, the last question 
is are you familiar with long-term capital?
    Ms. Shannon. Congressman, I am familiar with--
    Mr. Pearce. So long-term capital--Mr. Ellison says that we 
are trying to fill a gap that was created by 2008. Long-term 
capital almost broke our financial system about 5 years before, 
and so we didn't respond to long-term capital at all. We just 
bailed them out. Mr. Greenspan went and took a billion dollars 
from several of the different corporations and bought the 
assets up. So it is not like the government didn't know we were 
in deep distress long before 2008.
    And so, again, part of the friction from this side is that 
we see a bureaucracy that is created out of thin air to do 
something that really can't tell us much about what it is 
doing, it spent $122 million last year building a team without 
any performance specifics and without any taxpayer control and 
without any transparency, and people get a little frustrated 
with it. That is all that is going on here today.
    From my point, I am watching that seething anger toward the 
GSA people and towards the people who are running agencies who 
won't answer questions in front of committees, and I want that 
seething anger to continue because they are getting frustrated 
with agencies that are totally unresponsive and are killing 
businesses that are close to them, and they see no purpose in 
it. And so that is the reason I ask questions. I don't think I 
am going to get an answer when I come here, but I ask it so 
that the people out there watching feed that understanding of 
just how convoluted Washington has become. I will yield back, 
Mr. Chairman.
    Chairman Neugebauer. I thank the gentleman. Mr. Capuano is 
recognized.
    Mr. Capuano. Thank you, Mr. Chairman. I believe I have 
something I want to put up on the screen. There it is. That is 
my political statement for the week, Mr. Chairman. I only put 
that up because, look, I want to be very clear. I believe that 
our offices have worked very cooperatively together for the 
last year and a half, and I enjoy working with you. I think 
today's hearing asks some serious questions. I think most of 
the questions that have been asked are reasonable and fair, 
some tough, some not. I think some of them are kind of 
ridiculous, but in general, I think it is a good thing that we 
are having this hearing and keeping an eye on what they are 
doing.
    However--whoever is the technology can take that nonsense 
down because the truth is I only did it to make the point. The 
point is when you put something up on the screen that is 
unattributed, it looks like official policy of this committee, 
and all I want is if somebody wants to make a statement and 
publicize it, go ahead and do it, put your name on it so 
everybody knows it is your opinion, not the opinion of this 
committee. So that is point number one.
    Point number two, as far as your salary, Ms. Shannon, look, 
I don't really mind one way or the other. What I do mind is 
the, and I don't think it happened until later on, whenever we 
talk about our salaries in public life, nobody likes whatever 
we get paid, if you get paid 30 cents, some people think it is 
too much. If you don't-- I hope you do provide the information 
later on, the specific detail because, fine, if somebody wants 
to publicize your information, they can get it anyway, they can 
get mine. I don't like putting mine out there, either. I file a 
document every year to tell them my whole family's income, more 
stuff about me than my proctologist knows, but so be it.
    I chose to be here. It is public rule, and here we are. You 
have to do the same thing. At the same time in a public 
hearing, I do think it is inappropriate to necessarily ask that 
question.
    I guess what I am saying is, I want to be clear, the 
differences I have had with today's hearing are not a general 
thing. I actually think it is good. I share 95 percent of the 
questions that are here and the concerns about them. I do share 
the concerns about how much money you are spending, I do share 
the concerns about public disclosure of them, and I do think 
that that time will come, and if it is appropriate I may join 
my colleagues in saying it is too much.
    I might join them if I knew your salary saying you get paid 
too much. I don't know. But the bottom line is here, we are 
here today, and I think most of us have done it, to be 
responsible to our constituents, and our job in Congress is to 
oversee the things we have created. OFR is one of them. And I 
think that today has been a good opportunity to ask questions. 
There will be more as you go along, and you know that, I know 
that, we all know that, and I am looking forward to having a 
more thoughtful discussion in the future when we have more to 
ask, when Dr. Berner is confirmed, when you file the first 
annual report, when you have a more thorough strategic plan, 
and, again, I don't mind differences of opinion. I know some 
people don't like the creation of your agency, and as I said 
from the beginning, I don't think the creation of your agency 
was good, bad or indifferent, but somebody had to do it. If it 
wasn't going to be you, it could have been somebody else, but 
the way Congress decided in our convoluted way, and it is not 
newly convoluted, it has been convoluted since day one, so in 
our convoluted way, we came up with a new agency because 
whatever the thousand reasons were. So be it.
    You have an important job to do, you know it. I hope that 
your agency does it. I believe, I hope that you will take the 
job seriously, and as time goes forward, we will have you or 
Dr. Berner or whoever back at a later time to ask more 
detailed, thoughtful information, and I thank you for today, 
and I thank the chairman for his indulgences.
    Mr. Posey. Mr. Chairman?
    Chairman Neugebauer. One minute.
    Mr. Posey. Thank you, Mr. Chairman. When I got here, a 
senior Member told me, ``The thing that is going to frustrate 
you the most in committee is when the bureaucrats come in here 
and they will prove that they are smarter than you are and that 
they run this institution and you don't, they will refuse to 
give you a yes-or-no answer, they will dodge.'' And, you know, 
it is absolutely true; that has been my biggest disappointment.
    When the gentleman from Massachusetts asked the 10 biggest 
bankers in this country how much they made a year and what 
their bonuses were, they didn't have to tell him.
    Mr. Capuano. I didn't ask that question.
    Mr. Posey. But they did. They weren't under oath. They 
didn't have to tell him, but they did. A condescending attitude 
of evasiveness and arrogance and defiance is what fuels the 
public distrust in this process. Sure, Congress does a lot of 
things to prove they shouldn't be trusted, and so do others, 
but a blatant, arrogant, defiant, evasive attitude makes it 
even worse, and given the times that we are in, when we are 
seeing the excesses of the GSA, we are seeing the taxpayers' 
money squandered, I just don't think it is wise to refuse to 
answer the gentleman's simple question when the agency flag-
waving statement is, ``We recognize the need for 
transparency.''
    The President said something to the effect of on a YouTube 
video I saw recently that the only people who don't want 
transparency are people who have something to hide, and so when 
you refuse to answer a simple question, everybody up here has 
to immediately wonder why. We will have constituents say, why 
wouldn't that lady tell you how much she made? She is a Federal 
employee. We know how much you make, we know how much the 
President makes. Why would somebody refuse to answer the 
gentleman's simple question? We know how much members of the 
private sector who come in here make, and they are not that 
defiant, that arrogant, and that evasive, and so I am kind of 
at a loss as to what to tell them, and if any of the Members 
have any advice on how you would respond to something like 
that, I would kind of like to know it. Thank you, Mr. Chairman.
    Chairman Neugebauer. I thank the gentleman. I just have a 
quick follow-up. Ms. Shannon, you and I had a dialogue when I 
was asking questions, and then I believe Mr. Posey pointed out 
that Dr. Berner said when he testified in July, ``I am not 
aware that there is a statutory limit.'' Do you believe there 
is a statutory limit on how much the agency can spend? Dr. 
Berner said there wasn't. Do you agree with his statement?
    Ms. Shannon. Congressman, I understand there are controls 
established within the statute for the spending of the OFR. We 
are--under the budget of the OFR, it must be tied to achieving 
the mission, it has to be, we are accountable to oversight.
    Chairman Neugebauer. But basically, Dr. Berner said that 
there is no statutory limit. Do you agree with that statement, 
yes or no?
    Ms. Shannon. Congressman, again, I think there are controls 
within the statute.
    Chairman Neugebauer. Ms. Shannon, I want to say that your 
answer is no, that you don't agree with Dr. Berner's statement, 
then, all right? That is my assumption. I am going to assume 
that you disagree with Dr. Berner, that you don't believe there 
is, because obviously you are not answering the question, so I 
am going to assume it is no.
    I know you are going to be disappointed, but we are going 
to close out the hearing. We very much appreciate you coming 
and testifying. Again, I think we were extremely disappointed, 
obviously, that Dr. Berner did not come.
    The Chair notes that some Members may have additional 
questions for this witness, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 30 days for Members to submit written questions to this 
witness and to place her responses in the record.
    With that, the hearing is adjourned.
    [Whereupon, at 12:38 p.m., the hearing was adjourned.]





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                             April 19, 2012




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