[Senate Hearing 112-218]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 112-218
 
                    NOMINATION OF CAROLYN N. LERNER

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



                                HEARING

                               before the

                              COMMITTEE ON

               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE


                                 of the

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

   NOMINATION OF CAROLYN N. LERNER TO BE SPECIAL COUNSEL, OFFICE OF 
                            SPECIAL COUNSEL

                             MARCH 10, 2011

                               __________

        Available via the World Wide Web: http://www.fdsys.gov/

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        Committee on Homeland Security and Governmental Affairs




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20402-0001




        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  ROB PORTMAN, Ohio
MARK BEGICH, Alaska                  RAND PAUL, Kentucky

                  Michael L. Alexander, Staff Director
       Beth M. Grossman, Deputy Staff Director and Chief Counsel
               Kristine V. Lam, Professional Staff Member
Lisa M. Powell, Staff Director, Subcommittee on Oversight of Government 
                              Management,
          the Federal Workforce, and the District of Columbia
               Nicholas A. Rossi, Minority Staff Director
              Molly A. Wilkinson, Minority General Counsel
                   Jennifer L. Tarr, Minority Counsel
  Alan B. Elias, Legislative Assistant, Office of Senator Ron Johnson
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Akaka................................................     1
    Senator Johnson..............................................     2
Prepared statements:
    Senator Akaka................................................    15
    Senator Johnson..............................................    16

                                WITNESS
                        Thursday, March 10, 2011

Carolyn N. Lerner to be Special Counsel, Office of Special 
  Counsel:
    Testimony....................................................     4
    Prepared statement...........................................    17
    Biographical and financial information.......................    19
    Responses to pre-hearing questions...........................    28
    Letter from the Office of Government Ethics..................    43
    Responses to post-hearing questions for the Record...........    46


                    NOMINATION OF CAROLYN N. LERNER

                              ----------                              


                        THURSDAY, MARCH 10, 2011

                                     U.S. Senate,  
                       Committee on Homeland Security and  
                                      Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, presiding.
    Present: Senators Akaka and Johnson.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. This hearing will come to order.
    Aloha and good morning, everyone. This hearing is full of 
smiling faces, and we are delighted to be here today.
    The Committee on Homeland Security and Governmental Affairs 
meets to consider the nomination of Carolyn Lerner to serve as 
Special Counsel.
    I would like to extend a warm welcome to Ms. Lerner and 
also welcome her family and her friends who have joined us 
today for this nomination hearing.
    Ms. Lerner attended the University of Michigan, where she 
was selected to be a Truman Scholar, and studied at the London 
School of Economics. She received her law degree from New York 
University, where she was awarded a Root-Tilden-Snow 
Scholarship. After law school, Ms. Lerner clerked for a Federal 
judge and then began to practice law. In 1997, she became a 
founding partner in her law firm here in Washington, DC, where 
she represents individuals, including Federal employees, in 
employment matters. Ms. Lerner is also a visiting professor at 
George Washington University Law School.
    Ms. Lerner, I would like to congratulate you on your 
nomination. It is a pleasure to have such a well-qualified 
nominee before us today.
    I understand that your husband, Dwight, your son, Ben, and 
daughter, Anna, are here today, and I would like to give you 
the opportunity to introduce them and any other family members 
or friends who are here for this hearing. Would you please 
introduce them to the Committee, Ms. Lerner?
    Ms. Lerner. Thank you, Senator. My husband, Dwight 
Bostwick, is here, and my daughter, Anna, and my son, Ben. My 
family in Michigan, unfortunately, could not be with me today, 
but I believe they are watching on the Committee's remote 
access. My law partners are here, Rick Salzman, Steve Chertkof, 
and Doug Heron, and I have many other friends here, as well.
    Senator Akaka. Well, thank you, and all of you are welcome.
    We are delighted to have you and look forward to this 
hearing. But again, I want to say aloha to everyone. I can see 
that Ms. Lerner has a strong network of supporters here today.
    The Office of Special Counsel (OSC) was created in 1978 as 
part of the Civil Service Reform Act. Although it may not be 
the most well known Federal agency, the Office of Special 
Counsel serves a very important purpose, which is to safeguard 
the merit system by protecting Federal employees and applicants 
from prohibited personnel practices.
    Our dedicated Federal employees are among this country's 
greatest assets. I believe that civil servants must be able to 
serve their country without undue influence or fear of 
discrimination or retaliation. For almost a decade, I have 
worked to reform the protections for Federal whistleblowers, 
enacting the Whistleblower Protection Enhancement Act so that 
Federal employees may report waste, fraud, abuse, or illegal 
activity without fear of retaliation, and it is one of my top 
priorities in this Congress. Having a Special Counsel in office 
who understands the critical importance of Federal employee 
whistleblowers is a key aspect of restoring faith in 
whistleblower protections.
    In addition, the Office of Special Counsel protects the 
employment rights of our veterans by enforcing the Uniformed 
Services Employment and Reemployment Rights Act (USERRA). As a 
member of the Veterans Affairs and Armed Services Committees 
and as a veteran of World War II myself, I feel strongly that 
our service members' rights must be protected as they prepare 
to enter or return to the civilian workforce. This issue has 
become even more important in recent years with large numbers 
of veterans returning from overseas who want to continue their 
service in a civilian capacity. I understand that this 
essential office at the OSC is understaffed. I hope you will 
focus attention on veterans' protections when you are 
confirmed.
    Finally, the Office of Special Counsel is responsible for 
enforcing and providing advisory opinions on the Hatch Act. 
Because the presumptive penalty for violating the Hatch Act is 
removal from Federal employment, the OSC's advisory function is 
vital to helping employees understand what activity is 
permitted under the law.
    I want to tell you that I am happy that my new partner on 
the Oversight of Government Management, the Federal Workforce, 
and the District of Columbia Subcommittee, Senator Johnson, is 
here today for his first hearing serving as Ranking Member. I 
would like to take this opportunity to welcome him and to say 
that I look forward to working with him on these important 
issues here in the U.S. Senate.
    Senator Johnson, would you like to make any statement at 
this time?

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Yes, and thank you, Senator Akaka. Aloha.
    Senator Akaka. Aloha.
    Senator Johnson. I would imagine I will be saying that 
quite a few times, and I will enjoy that. I would rather be 
doing it in Hawaii, though, I think.
    Senator Akaka. Yes.
    Senator Johnson. But again, thank you, sir, for your kind 
introduction. I am really looking forward to working with you 
over the next couple of years. It is going to be an honor 
serving with you on this Committee and also on our Subcommittee 
on Oversight of Government Management, the Federal Workforce, 
and the District of Columbia.
    I guess I would like to begin by also welcoming you, Ms. 
Lerner, and your family and your friends and people who have 
come here to support you in this hearing. We share rookie 
status here. This is my first time as a Ranking Member and your 
first time testifying, so welcome.
    Rather than repeating what Senator Akaka talked about in 
terms of the importance of this office, I will second what he 
said. It is an extremely important office. I guess I would like 
to just give a brief opening remark, focus on the waste, fraud, 
abuse, mismanagement, duplication of service aspects, of how 
important it is to protect whistleblowers.
    I really do not want to turn this into a budget hearing, 
but as we discussed in my office a week ago, our Federal 
Government is facing a $1.65 trillion budget deficit this year. 
Our national debt exceeds $14 trillion. The President's budget 
lays out another $13 trillion of debt over the next 10 years. 
My concern is that at some point in time, we are going to face 
a debt crisis.
    So the financial pressure we put on agencies is going to be 
tremendous, and our Federal Government simply cannot afford to 
operate ineffectively and inefficiently, and I think the Office 
of Special Counsel will play a key role in allowing people to 
come forward--now, I agree with Senator Akaka. I think our 
Federal workforce is comprised of fine individuals who want to 
do the right thing, and the Office of Special Counsel gives 
them that outlet, gives them that assurance that they can step 
forward, report mismanagement, waste, fraud, and abuse, and I 
cannot imagine a time in our Nation's history where that is 
going to be more critical.
    As we talked in my office about a very cooperative 
relationship here, and the same thing that Senator Akaka and I 
talked about in our committee and subcommittee work, we want to 
cooperate with the agencies. I do not think negative works. I 
am not into ``gotcha'' politics. I want everybody in the 
Federal Government, at least from this Senator's perspective, 
to understand that I want to work with the agencies to help 
them become more effective and more efficient. I want to work 
with the Federal workforce, with the fine men and women who 
serve our Federal Government and who want to come forward and 
say, we can make things a little more effective. We can make 
things a little more efficient. I think it is just absolutely 
critical.
    So again, I want to thank you for stepping up to the plate. 
As we discussed earlier, there are going to be long hours. This 
is going to be hard work. It is a difficult challenge. This 
office has gone without a leader now for 2 years. So I am 
really pleased that we are holding this hearing because it is a 
very important office, and I am looking forward to your 
testimony.
    Senator Akaka. Thank you very much, Senator Johnson, for 
your statement.
    The nominee has filed responses to a biographical and 
financial questionnaire, answered prehearing questions 
submitted by this Committee, and had her financial statements 
reviewed by the Office of Government Ethics. Without objection, 
this information will be made a part of the hearing record, 
with the exception of the financial data. It is on file and 
available for public inspection at the Committee offices.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath. Therefore, 
I ask the nominee to please stand and raise your right hand to 
take this oath.
    Do you swear that the testimony you are about to give this 
Committee is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Ms. Lerner. I do.
    Senator Akaka. Thank you very much. Let it be noted in the 
record that the witness answered in the affirmative.
    Ms. Lerner, will you please proceed with your statement?

   TESTIMONY OF CAROLYN N. LERNER \1\ TO BE SPECIAL COUNSEL, 
                   OFFICE OF SPECIAL COUNSEL

    Ms. Lerner. Yes. Chairman Akaka and Ranking Member Johnson, 
thank you for the opportunity to appear before you today. It is 
a privilege to be considered for confirmation by this 
Committee. I am honored and humbled that the President has 
nominated me to serve as Special Counsel.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Lerner appears in the Appendix on 
page 17.
---------------------------------------------------------------------------
    I briefly introduced my family before. My husband, Dwight 
Bostwick, and our two children, Anna and Ben. I am very 
grateful to them for their unwavering love and support. A 
number of my friends and colleagues are also in the audience 
today, and I would like to thank them, as well, for being here.
    I also want to acknowledge my family in Michigan, who could 
not be here today, but who have encouraged me throughout my 
life. I would not be here but for the two people whose 
influence led me to pursue a career in the law. My mother and 
my father would have treasured this day. They were the children 
of immigrants who came to this country seeking a better life. 
My grandfather had been jailed in his country for speaking out 
against the government, and my parents taught me to appreciate 
the freedoms that we enjoy in the United States. They also 
impressed upon me the importance of standing up for those who 
cannot protect themselves.
    I began my career in Michigan, where I grew up, as a law 
clerk to U.S. District Court Chief Judge Julian Abele Cook, Jr. 
Judge Cook treats all those who appear before him with 
kindness, dignity, and respect. His approach set the standard I 
have tried to emulate as I have practiced law in the 20 years 
since my clerkship.
    Since 1991, I have represented both private sector and 
Federal employees, primarily in employment-related cases. I 
have advised employers about best workplace practices and 
employment issues. As a Federal court-appointed independent 
monitor, I managed and implemented a reform program for a large 
government agency. I have also served as both a mediator and a 
professor of mediation.
    These experiences have given me a broad perspective on how 
workplaces function and how best to protect employees from 
discrimination and retaliation. If confirmed, I would bring 
this expertise to the Office of Special Counsel.
    There are several employees from the Office of Special 
Counsel who are here today, and they deserve our appreciation 
for their ongoing commitment to the OSC.
    The Office of Special Counsel was created to protect 
Federal employees who report abuses in government. Employees 
need to have the courage to blow the whistle on waste, fraud, 
and abuse, and we need to provide them with the assurance that 
if they do, their careers and their livelihoods will not be at 
risk.
    Whistleblowers are essential to a well-functioning 
government. Federal employees have been described as the foot 
soldiers in the war on waste, fraud, and abuse. They not only 
protect public health and safety, they are guardians of 
taxpayer dollars, a role that has become more important than 
ever.
    Whistleblower disclosures under the False Claims Act have 
accounted for billions of dollars in recoveries for the U.S. 
Treasury. A recent private sector study found that employee 
disclosures detected more fraud than auditors, internal 
compliance officers, and law enforcement officials combined.
    To effectively protect the Federal Merit System, the Office 
of Special Counsel must be a highly functioning agency. I 
believe that the OSC can best succeed if its own employees are 
treated fairly and with respect.
    It will also take a strong partnership with all of the 
OSC's stakeholders to move the agency forward in a positive 
way. If confirmed, I am committed to building collaborative and 
constructive relationships with the Congress, Federal employee 
and agency management groups, and good government advocates. In 
particular, I look forward to working very closely with this 
Committee as you continue your important efforts to increase 
effectiveness and efficiency in the government.
    Thank you, and I would be very pleased to answer any 
questions that you may have.
    Senator Akaka. Thank you very much, Ms. Lerner.
    I will begin with the standard questions that the Committee 
asks of all nominees.
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Ms. Lerner. No, there is not.
    Senator Akaka. Second, do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Lerner. No, I do not.
    Senator Akaka. Third, do you agree, without reservation, to 
respond to any reasonable summons to appear and testify before 
any duly constituted committee of Congress if you are 
confirmed?
    Ms. Lerner. Yes, I do.
    Senator Akaka. Thank you very much.
    Ms. Lerner, the Special Counsel position has been vacant 
for over 2 years. In light of the extended vacancy, what do you 
believe are the major challenges facing the OSC and what will 
you do to address them if you are confirmed?
    Ms. Lerner. This agency, as you know, has been without 
permanent leadership for 2 years, and I do want to recognize 
the fact that the career employees of this agency have very 
honorably taken over the roles that are usually filled by 
people who are in the office of the immediate Special Counsel, 
and so they have been doing double-duty and they deserve our 
appreciation for having done that.
    In terms of the challenges facing the agency, obviously, if 
I am confirmed and I am in the agency, I will have a much 
better sense. But as of now, we know that without leadership, 
some long-term planning probably needs to be done. We need to 
look at the bottom line and how the agency is using its 
resources and whether it is using resources in the most 
efficient and effective way.
    I also think a challenge is going to be increasing 
communication. As you mentioned, I think it is very important 
that the Office of Special Counsel have good communication with 
the Senate and in particular with this Committee. 
Communications should not be limited to hearings, but there 
should be an ongoing dialogue. There also needs to be 
communication with all of the other stakeholders of the agency, 
including agencies and the good government advocates. So I 
think that those would certainly be priorities for me if I am 
confirmed.
    Senator Akaka. Thank you. Ms. Lerner, you have spent your 
career working in the private sector representing individuals, 
including Federal employees. How do you believe your experience 
has prepared you for this position, both in terms of managing 
the OSC and its employees and enforcing Federal Merit System 
principles?
    Ms. Lerner. In the 22 years since I graduated from law 
school, I have been privileged to have a very wide range of 
experiences. In addition to representing individuals in 
employment cases, I have also worked with organizations and 
small businesses on best employment practices and developing 
policies and procedures for them. I have represented 
organizations who were the subject of complaints from 
employees, both in mediation and in litigation.
    I have served as a court-appointed Special Inspector for 
the D.C. Department of Corrections, an agency with over 1,000 
employees, and managed a program there where I was responsible 
for recruiting, hiring, training, and supervising a team of 
lawyers, trainers, and mediators. I set up systems within the 
Department of Corrections, such as an Employee Advisory 
Committee, an ombudsman, and certainly representing individuals 
in employment cases has given me a lot of insight into what 
good management can do and the effect of both good and bad 
management.
    So I would bring those collective experiences to the Office 
of Special Counsel if I were confirmed.
    Senator Akaka. Ms. Lerner, I understand that employee 
morale in the OSC is low and that some employees complained of 
possible illegal retaliation in the past. If confirmed, what 
are your plans to improve the workplace environment?
    Ms. Lerner. As I mentioned, I do have experience with 
troubled workplaces, large and small, and I have counseled 
businesses on how to deal with troubled workplaces.
    The first thing that I think would be really important to 
do is to meet with people myself and determine if steps need to 
be taken to improve morale, and if so, what are they. I would 
like to learn by talking to people. I think I am a good 
listener. And that would be the first thing I would do if I am 
confirmed, is to listen to the people who are working there at 
the Office of Special Counsel.
    I also have a lot of experience doing mediation, and those 
skills as a mediator, I think, would stand me in good stead in 
trying to bring the agency forward, and I would assure you that 
I will take whatever steps are appropriate, including things 
like setting up or reinvigorating an Employee Advisory 
Committee, which I believe this agency may have had in the 
past. I am not sure what the status is now of that committee.
    But I think all those steps are things that can really help 
morale, and I would be prepared to do those things.
    Senator Akaka. Thank you, Ms. Lerner. Federal employees may 
lack confidence in the whistleblower protections because of 
weak enforcement of the Whistleblower Protection Act. Federal 
whistleblowers have told this Committee that they feel that 
they have no place to turn to disclose information without 
suffering retaliation. What steps will you take to restore 
confidence in the Office of Special Counsel and specifically to 
protect Federal whistleblowers?
    Ms. Lerner. Thank you for that question. I think you raise 
a really important issue, and I am very happy to be able to 
address it. I, too, have heard that advice is often given to 
people that the last place you want to go is the Office of 
Special Counsel. If I am confirmed, I would like to find out 
why that is and if that actually is the case.
    My goal, if I am confirmed as Special Counsel, is to have 
it be an agency where you feel comfortable referring your 
constituents. If they come to your offices with a problem, 
someone has a whistleblower complaint or a USERRA complaint or 
a disclosure or feels that they are being discriminated against 
because of a prohibited personnel practice, I want you to feel 
very confident in referring them to the Office of Special 
Counsel. I want the good government advocates and groups to 
feel like the Office of Special Counsel is the first place they 
would recommend that people come. And restoring the reputation, 
improving the reputation of the office will be a very important 
goal for me, if I am confirmed.
    Senator Akaka. Thank you very much. We will continue with 
questions. I would like to now call on my partner, Senator 
Johnson, for his questions.
    Senator Johnson. Thank you, Mr. Chairman.
    Let us continue that one vein of questioning. There was a 
study in 2010, an Office of Personnel Management Federal 
Employee Viewpoint Survey. It says 63 percent of the 
respondents felt they could disclose a suspected violation of 
law, which means that 37 percent thought they would not. What 
would be your theory in terms of your understanding of the 
office? Why would it be that low?
    Ms. Lerner. Well, first of all, I think it is very common 
for people to feel hesitant about coming forward. In my 
experience as a lawyer representing individuals with claims, 
and certainly as a Special Inspector for the D.C. Department of 
Corrections, I can tell you, it takes a lot of courage to come 
forward. If people are going to come forward, there has to be a 
safe and secure place for them to go where they feel like they 
will be listened to, respected, taken seriously, and if they 
request confidentiality, that confidentiality will be respected 
to the extent possible.
    So improving the perception of the Office of Special 
Counsel is going to be really important so that people feel 
comfortable coming there with a claim.
    Senator Johnson. Can you walk me through--again, I am new 
in town--the process of a whistleblower approaching the office 
and exactly what steps are taken for the four different areas 
that the office has responsibility for?
    Ms. Lerner. Sure. There are four different areas. There are 
people who have actual disclosures that they want to make of 
waste, fraud, and abuse or a health and safety problem, and 
those complaints would go to the Disclosure Unit.
    For individuals who have a complaint about a prohibited 
personnel practice, which includes retaliation for having been 
a whistleblower as well as any other prohibited personnel 
practice, their complaint would first go to the Complaint 
Examining Unit, and that unit does an initial screen to 
determine if there is enough there to have it referred to the 
Investigation and Prosecution Unit.
    For USERRA complaints, generally those come from the 
Department of Labor initially, and the Office of Special 
Counsel has the ability to bring a USERRA case to the Merit 
Systems Protection Board (MSPB) for prosecution.
    And the last category or last bucket of cases that the 
Office of Special Counsel gets are Hatch Act claims, and those 
claims or those complaints come in either directly from 
individuals who have a complaint to make about something or 
through an agency. Also, individuals may send an email or leave 
a voice mail message on the hotline with a question for 
clarification about how the Hatch Act actually works.
    So that gives you a little bit of an overview.
    Senator Johnson. So those are the complaints coming in. 
When a complaint comes into the Disclosure Office, what does 
the Disclosure Office do with that and how does the process 
continue?
    Ms. Lerner. I would like to be able to give you a full and 
complete answer to that question, and until I am actually in 
the agency, I am not sure I have all the right information to 
provide to you at this point.
    Senator Johnson. Fair enough. Do not worry about it.
    Ms. Lerner. I just do not want to misspeak on that issue.
    Senator Johnson. Sure. Let me ask you, how much time have 
you been able to spend inside the office talking to some of the 
managers who are there currently?
    Ms. Lerner. I have actually not been inside the agency yet. 
I have talked to the heads of some of the various units of the 
Office of Special Counsel to try to get a sense of what they 
are doing, what they think is working well, where improvements 
may need to be made. But these have just been introductory 
meetings.
    If confirmed, I would anticipate having much longer and 
more thorough conversations about the workings of each of those 
units.
    Senator Johnson. Do you have any sense right now, and this 
is not derogatory to any individual in the office, of some 
weaknesses there that need to be filled and do you have any 
game plan in terms of what you may want to do in terms of first 
actions?
    Ms. Lerner. I think that is going to be a tough question to 
answer until I am actually confirmed.
    One area that I do have some concerns about kind of 
prospectively is in the USERRA Unit because this unit is 
getting a second demonstration project. There was a 
demonstration project a few years ago where cases were divided 
between the Department of Labor and the Office of Special 
Counsel from the very beginning of a case so that odd-numbered 
cases go to the Department of Labor, or vice-versa, and even-
numbered go to one of the agencies. And the expectation is that 
there are going to be between 400 and 500 new matters for the 
USERRA Unit, and right now, that unit only has three full-time 
employees. So I am not exactly sure how that is going to work 
at this point.
    That is an area that I want to look at and figure out how 
we can effectively service those complaints because as you 
mentioned, Senator Akaka, under USERRA, we really need to 
protect our returning service members. It is a law that was 
enacted to make sure that there was not discrimination against 
people who want to serve in the military or who have served in 
the military, so that needs to be a very high priority.
    Senator Johnson. You bring up the issue of resourcing, and 
again, going back to a $1.65 trillion a year deficit, there is 
certainly talk of some fixes where you do across-the-board cuts 
in agencies. If presented with that situation, how would you 
handle something like that?
    Ms. Lerner. Obviously, every agency in the government right 
now is being asked to do more with less. This particular agency 
right now has an $18.5 million budget, which is kind of a speck 
of dust on the overall budget, and my view is that I think this 
is an agency that can save the government money. Just like you 
would not fire Internal Revenue Service auditors to do fewer 
audits of tax returns, I think cutting back on this particular 
agency would be ill-advised.
    There are studies that have been done, and I mentioned a 
couple briefly in my opening statement that show that 
whistleblowers can save the government money. I would like to 
pursue that a little bit more and perhaps have the Government 
Accountability Office (GAO) do a study about whether OSC 
whistleblowers are saving the government money, as well.
    So I think it is an investment that is well worth it for 
this government. If there have to be cutbacks, we will deal 
with them, and I am prepared to make the tough choices that may 
need to be made. But without actually being there, it is hard 
for me to tell you exactly how.
    Senator Johnson. Thanks.
    Senator Akaka. Thank you very much, Senator Johnson.
    Ms. Lerner, as you know, I have fought for veterans' 
protections, and I believe that enforcing the Uniformed 
Services Employment and Reemployment Rights Act is one of the 
OSC's most important responsibilities. I understand that this 
office in the OSC has only three full-time staff members. Under 
a three-year demonstration project, as you mentioned, the OSC 
will investigate most USERRA claims from the outset, as well as 
prosecuting them before the MSPB. How will you handle this 
heavy load with only three staff members at this time?
    Ms. Lerner. I believe the plan under this demonstration 
project is to have half of the cases still initially looked at 
by the Department of Labor and half of them will go to the 
Office of Special Counsel. But it is going to be a massive 
increase in workload for this unit.
    I understand that there is a request to increase the 
resources for this unit so that they can hire additional 
lawyers and investigators, as they were able to do with the 
last demonstration project, I believe. So I think, 
realistically, it is going to be really tough for three people 
to handle the expected number of claims--between 400 and 500. 
Now, it may be less than that, but we need to be prepared, and 
so as I mentioned earlier, that is going to be a very high 
priority for me if I am confirmed. I think protecting our 
service members is a vital responsibility of the Office of 
Special Counsel.
    Senator Akaka. The OSC also has an important responsibility 
to train Federal agencies on their responsibilities under this 
statute. Investing in this training may ultimately reduce the 
number of USERRA claims that are filed, we hope. How will you 
make sure agencies receive adequate training so they understand 
their responsibilities under the law?
    Ms. Lerner. I completely agree that training is a crucial 
part of getting enforcement of the law. My view is agencies 
want to be in compliance with the law, but they also need the 
training to know how to be in compliance. They need to be 
familiar with their responsibilities under USERRA.
    There are a few ways that the Office of Special Counsel can 
support the agencies in that effort. One is through the 
certification program. Right now, the Office of Special Counsel 
has a certification program that helps the agencies know what 
their responsibilities are. It is a very minor or limited 
process that the agencies need to go through to become 
certified, but my understanding is that not a lot of agencies 
have gone through it and are certified. But if they are, I 
think that will be one mechanism to increase outreach, and 
certainly USERRA would be an important part of that outreach.
    The other way to do it is to do online computer programs. 
That is a technology that exists that I think could be very 
useful. Increasing the access to information through written 
materials that go out, training materials, improving--I have 
not actually looked in detail at the Web site for USERRA, but 
the Office of Special Counsel could certainly provide a lot of 
information on its Web site for both employees and managers on 
USERRA.
    So I think that there are a wide range of avenues that are 
available, and I would be very interested in exploring it and 
also hearing from this Committee about any ideas that you may 
have to improve awareness about USERRA.
    Senator Akaka. Ms. Lerner, the Hatch Act was last amended 
by Congress in 1993. Since that time, there have been many 
changes in the workplace, including significant technological 
advances. Do you believe the Hatch Act should be reviewed in 
light of these developments?
    Ms. Lerner. Yes, Senator, I do believe it should be 
reviewed, just like the Whistleblower Protection Act has gone 
through reviews since it was initially enacted. Now that the 
Whistleblower Protection Enhancement Act is hopefully on its 
way to being enacted at some point, there should be changes, or 
at least a review of how effective the Hatch Act is or if 
changes need to be made given recent technologies. Things like 
BlackBerrys and laptop computers, telecommuting, and 
teleworking from home were not very common when the Hatch Act 
was first enacted. So while I do not know right now what 
recommendations I might want to make, I think it is worth a 
review, and I would again want to work with this Committee on 
that.
    Senator Akaka. Thank you. As you know, the Office of 
Special Counsel must work closely with the Merit Systems 
Protection Board, the Office of Personnel Management, and the 
Equal Employment Opportunity Commission (EEOC) to protect 
Federal employees' rights and ensure that the Federal civil 
service is free of prohibited personnel practices. What will 
you do to ensure cooperation between the OSC and these 
agencies?
    Ms. Lerner. I think communication and collaboration with 
these agencies will be very important. Starting with the MSPB, 
the relationship of the Office of Special Counsel to the MSPB 
is a little bit like a prosecutor to a judge because the OSC 
brings cases to the MSPB. So there is a limit to how much 
collaboration there can be, certainly on individual cases, with 
the MSPB. However, the MSPB does have the ability to do studies 
and outreach and education, and that is an area of overlap with 
the OSC, and that would be an area that I would be very 
interested in exploring.
    Similarly, the Office of Personnel Management has the 
ability to do outreach and education for the Federal workforce 
and develop policies and procedures, and so I think that there 
should be collaboration in those areas with the Office of 
Personnel Management.
    The EEOC handles prohibited personnel practices as well as 
the OSC, and generally, the types of prohibited personnel 
practices that go to the EEOC are things like race, sex, age, 
and national origin discrimination. And the Office of Special 
Counsel has to make sure that there is clear communication with 
both complainants and with the EEOC because those cases have to 
go to the EEOC, and there is no tolling arrangement so that the 
time that Federal employees have to bring a case does not stop 
if they come to the OSC first. So there needs to be 
communication in that area.
    Also, in terms of outreach and education, I think that the 
OSC and the EEOC should collaborate in terms of educating the 
workforce and trying to do whatever they can to make sure that 
agencies are in compliance with the law.
    Senator Akaka. Thank you very much for your responses.
    Let me call on Senator Johnson for his further questions.
    Senator Johnson. Well, Senator Akaka, you did a great job 
asking questions. I have been ticking off the same ones I was 
going to ask, but let me go back a little bit and talk about 
how tight the budget is. My follow-up was really going to be, 
so what case would you make in terms of securing your budget or 
possibly even increasing it, because this is an important area, 
and you answered that very well, quite honestly.
    Ms. Lerner. Thank you.
    Senator Johnson. You did mention studies that had been 
made.
    Ms. Lerner. Yes.
    Senator Johnson. Have you seen any dollar estimates of 
savings from whistleblowing?
    Ms. Lerner. The only studies I have been able to find that 
specifically address the dollar, bottom-line numbers are in the 
private sector and with the Federal False Claims Act. There 
have not been any studies that look at the OSC and what savings 
there might be. I would very much like to pursue that, and 
perhaps in partnership with the GAO, which does those types of 
studies. The MSPB also has a way to do those types of studies, 
and I am not sure right now which is the appropriate agency, 
but certainly GAO, I think, would be one possibility.
    We know that in the private sector, whistleblowers save a 
lot of money. As I mentioned in my opening statement, they save 
more than internal compliance officers, Federal law 
enforcement, and inspector generals combined. So I think the 
potential is really there.
    There is also a preventative effect. By having an agency 
like the Office of Special Counsel, it is hard to quantify how 
much we are saving just having an enforcement body there to 
prevent these kinds of things from happening. I think if we did 
not have this agency for enforcement and for whistleblowers to 
come to with waste, fraud, and abuse, there would not be any 
check on it. And that will be hard to quantify, but it is 
something to keep in mind.
    Senator Johnson. Let me just add, I would be happy to work 
with you in terms of developing that case and trying to get 
those studies out of GAO. I think that is extremely important.
    This is not a ``gotcha'' question, but in your answer to 
question 10 in the pre-hearing questionnaire, you were talking 
about respect for the OSC. Can you tell me what you were 
talking about, what you sensed, or what you know about respect 
or lack of respect for the OSC currently?
    Ms. Lerner. The kinds of things that I have heard are the 
sorts of things that Senator Akaka referred to in his opening 
statement, or perhaps it was one of your questions, Senator, 
that people are very hesitant to come to the Office of Special 
Counsel right now. And as I mentioned, there is often a 
hesitancy to come forward with a complaint anyway. People do 
not want to be viewed as complainers or whiners, and they know 
that if they do, there is often retaliation in the workplace. 
It is just a fact of life. And so we have to do everything we 
can to make sure that the Office of Special Counsel is a safe 
and secure place for people to come with whistleblower 
complaints, disclosures, and prohibited personnel practice 
complaints.
    Outreach to the agencies, outreach to the good government 
groups, outreach to the unions, all of those things, I think, 
will be important. I think strong leadership will help. If 
people see that the agency is willing to bring cases to the 
MSPB, if they feel like it is a vigorous law enforcement 
agency, I think that will certainly help its reputation. I am 
sure there are other steps, as well.
    Senator Johnson. You are kind of swerving into my next 
question here because when you were answering Senator Akaka's 
question on awareness for USERRA, what was going through my 
mind again is proactive versus reactive.
    Ms. Lerner. Yes.
    Senator Johnson. My guess is this agency is generally 
reactive. People come and they lodge a complaint and then they 
start acting on it. What steps could we take to make this 
office far more proactive? You were kind of addressing some of 
those, but do you have further comments on that?
    Ms. Lerner. One mechanism that is in place right now is the 
certification program, and I do not know how active it is right 
now. My sense is that--certainly not all the agencies are part 
of it. We might want to think about whether it makes sense to 
make that certification program mandatory because right now, it 
is a voluntary program. Agencies can choose to participate or 
not. And it is not really a very cumbersome program. I mean, it 
is really just about making sure that the agencies are getting 
the word out to their employees, that they are providing 
materials on the rights, how to file a complaint, doing 
education, and I think that is an area that would very easily 
lend itself to being proactive.
    I am sure that there are others, as well. More 
communication with the Federal employees. We send information 
out to Federal employees about the Thrift Savings Plan by mail. 
When people are hired, they get, I am sure, a packet of 
material about personnel issues. We should probably think about 
including in the packet of materials that employees get 
information on the Office of Special Counsel. I do not think a 
lot of employees know that the Office of Special Counsel even 
exists right now. So education and communication are going to 
be really important.
    Senator Johnson. Well, I am sure both Senator Akaka and I 
would love to work with you on that, which brings me, I guess, 
to my last question, which is you certainly expressed a desire 
to work with us cooperatively. Do you have some concept in your 
mind what type of regimen that would be, what that type of 
cooperation would look like?
    Ms. Lerner. Well, informal cooperation is always good. I do 
not think it should necessarily have to be through a hearing. I 
am happy to come back and testify if you feel the need to have 
hearings. That is certainly an important role for this 
Committee. But I would like there to be a more informal back 
and forth, and I am happy to communicate with the staff. I am 
happy to communicate directly with the Members of this 
Committee in any form or in any way that you believe would be 
appropriate.
    Senator Johnson. I appreciate that.
    Senator Akaka. Thank you very much, Senator Johnson, for 
your questions. I thank you for being so thorough with your 
questions.
    And thank you for your responses, Ms. Lerner. At this time, 
there are no further questions. There may be additional 
questions, however, from Members for the record, and we will 
submit them to you in writing.
    Ms. Lerner. Thank you.
    Senator Akaka. The hearing record will remain open until 
noon tomorrow for Members of this Committee to submit 
additional statements or questions.
    I want to thank you very much, and your family and your 
friends, Ms. Lerner, for being here. I am very pleased to be 
able to hold a hearing for such a well-qualified nominee.
    Ms. Lerner. Thank you.
    Senator Akaka. It is my hope that the Committee will vote 
soon and that your nomination will be considered by the full 
Senate very shortly. So thank you very much. I want to wish you 
well in your future work.
    This hearing is adjourned.
    [Whereupon, at 10:52 a.m., the Committee was adjourned.] 


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