[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
               MANAGEMENT FAILURES: OVERSIGHT OF THE EPA

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 25, 2014

                               __________

                           Serial No. 113-138

                               __________

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


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


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

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


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 25, 2014....................................     1

                               WITNESSES

The Hon. Sheldon Whitehouse, a U.S. Senator from the State of 
  Rhode Island
    Oral Statement...............................................     6
    Written Statement............................................     8
The Hon. David Vitter, a U.S. Senator from the State of Louisiana
    Oral Statement...............................................    10
    Written Statement............................................    13
The Hon. Gina McCarthy, Administrator, U.S. Environmental 
  Protection Agency
    Oral Statement...............................................    17
    Written Statement............................................    19

                                APPENDIX

June 13, 2014 letter to EPA from Rep. Issa and Sen. Vitter 
  submitted by Rep. Chaffetz.....................................    70
Questions for the Record from Chairman Issa......................    72
Questions for Administrator McCarthy, U.S. EPA, from Reps. 
  McHenry and Meadows............................................    74
Additional questions regarding EPA negligence in responding to 
  Beale Fraud....................................................    86


               MANAGEMENT FAILURES: OVERSIGHT OF THE EPA

                              ----------                              


                       Wednesday, June 25, 2014,

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 9:35 a.m., in Room 
2154, Rayburn House Office Building, the Honorable Darrell E. 
Issa [chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Turner, Duncan, 
McHenry, Jordan, Chaffetz, Walberg, Amash, Gosar, DesJarlais, 
Gowdy, Lummis, Woodall, Collins, Meadows, Bentivolio, Cummings, 
Maloney, Tierney, Clay, Connolly, Speier, and Lujan Grisham.
    Staff Present: Melissa Beaumont, Majority Assistant Clerk; 
Will L. Boyington, Majority Deputy Press Secretary; Molly Boyl, 
Majority Deputy General Counsel and Parliamentarian; Lawrence 
J. Brady, Majority Staff Director; Joseph A. Brazauskas, 
Majority Counsel; David Brewer, Majority Senior Counsel; 
Caitlin Carroll, Majority Press Secretary; Drew Colliatie, 
Majority Professional Staff Member; John Cuaderes, Majority 
Deputy Staff Director; Adam P. Fromm, Majority Director of 
Member Services and Committee Operations; Linda Good, Majority 
Chief Clerk; Tyler Grimm, Majority Professional Staff Member; 
Ryan M. Hambleton, Majority Professional Staff Member; Erin 
Hass, Majority Senior Professional Staff Member; Christopher 
Hixon, Majority Chief Counsel for Oversight; Michael R. Kiko, 
Majority Legislative Assistant; Mark D. Marin, Majority Deputy 
Staff Director for Oversight; Katy Rother, Majority Counsel; 
Laura L. Rush, Majority Deputy Chief Clerk; Jessica Seale, 
Majority Digital Director; Andrew Shult, Majority Deputy 
Digital Director; Katy Summerlin, Majority Press Assistant; 
Sarah Vance, Majority Assistant Clerk; Rebecca Watkins, 
Majority Communications Director; Jaron Bourke, Minority 
Director of Administration; Krista Boyd, Minority Deputy 
Director of Legislation/Counsel; Beverly Britton Fraser, 
Minority Counsel; Jennifer Hoffman, Minority Communications 
Director; Chris Knauer, Minority Senior Investigator; Julia 
Krieger, Minority New Media Press Secretary; Una Lee, Minority 
Counsel; Juan McCullum, Minority Clerk; Dave Rapallo, Minority 
Staff Director; and Ilga Semeiks, Minority GAO Detailee.
    Chairman Issa. Good morning. This hearing will come to 
order.
    Without objection, the chair is authorized to declare a 
recess of the committee at any time. Without objection, so 
ordered.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know that the 
money Washington takes from them is well spent and, second, 
Americans deserve an efficient, effective Government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights. Our solemn responsibility 
is to hold Government accountable to taxpayers, because 
taxpayers have a right to know what they get from their 
Government. It is our job to work tirelessly in partnership 
with citizen watchdogs to deliver the facts to the American 
people and bring genuine reform to the Federal bureaucracy.
    Today's hearing is in fact critical to our core oversight 
responsibility. The Environmental Protection Agency is a 
massive Federal bureaucracy that employs thousands of people 
and regulates approximately 11 percent of the economy directly, 
but its impact on energy effectively regulates the prospect for 
competitiveness of our entire economy. It is an agency with far 
reaching influence impacting the largest and the smallest 
corporations in America.
    While the vast majority of EPA employees are honest and 
follow the rules, a troubling trend has emerged: a lack of 
overall supervision and accountability for those employees who 
cheat the taxpayers. Let's consider some examples.
    For years, the top EPA official masqueraded as a secret 
agent. Can't write this in a script. As a secret agent, a CIA 
man, while running up bogus vacations and other charges, 
airline tickets and the like, on taxpayers. In order to do 
that, he had to have the willing cooperation of many people, 
including the EPA administrator herself.
    Another top former EPA official received a discount on a 
new Mercedes worth thousands of dollars from a lobbyist with 
business before the EPA.
    EPA employees have been found watching mind-boggling 
amounts of pornography while in the office. EPA supervisors 
signed off on clearly fraudulent time claims for years. And I 
repeat, EPA supervisors knowingly signed off on time sheets for 
people they knew could not work, did not work, and in fact 
never even logged into their computers.
    Critical evidence about possible employee wrongdoing often 
goes missing and investigators lack the necessary cooperation 
and, in fact, find a hostile environment when they try to do 
their job.
    Even top EPA leadership has, in too many cases, 
demonstrated a willingness to turn a blind eye to egregious 
wrongdoing rather than confront the problem.
    I appreciate the administrator appearing here today to 
discuss the committee's concerns. We are already dealing with 
one agency, the IRS, that has suffered a devastating loss of 
confidence of and from the American people. My fear is the EPA, 
without major changes, and those changes include how 
supervisors deal with responsibility for the money and the core 
rights of the American people, will suffer a similar loss of 
confidence that hinders their ability to carry out their 
mission.
    I am also concerned that these problems, which the 
committee has detailed in numerous letters and hearings, are 
not being related to top officials with whom the responsibility 
ultimately lies. Just last week, under oath in a transcribed 
interview with our staff, an EPA top congressional affairs 
person told us that not all letters sent by members or even 
committee chairmen and ranking members actually are seen by the 
administrator herself.
    It is troubling to me that with the well documented 
concerns raised by this committee and others may not even reach 
the eyes and ears of the person who in fact was nominated by 
the President and confirmed to have that responsibility. If 
problems known by this committee cannot reach the person with 
the statutory authority, then clearly there is a problem at the 
very top. Moreover, the more we learn about the internal 
workings of the EPA, the more it needs oversight, and an 
abundance of it.
    Our committee is not the only watchdog that has faced 
obstruction tactics from employees of the EPA. At a hearing 
last month, the Office of Inspector General described the 
dysfunctional relationship they are experiencing with the EPA's 
Office of Homeland Security. And I want to make sure I say this 
correctly. The EPA's Office of Homeland Security has absolutely 
no statutory relationship with Homeland Security and in fact is 
a creation within EPA that does not have statutory authority in 
any way, shape, or form that exceeds or preempts the Inspector 
General's Office. And yet Homeland Security has disrupted and 
prevented the IG from fully investigating employee malfeasance 
at the Agency.
    The administrator, in response, sent a letter to the Office 
of Inspector General that further complicates the relationship 
between the offices and allows the Office of Homeland Security 
to continue conducting investigations without OIG involvement. 
They don't have the statutory authority, they will not quit, 
and the administrator herself has blessed the reduction in the 
lawful rights and responsibility of her own inspector general.
    With or without the administrator's knowledge, the EPA has 
continued to obstruct congressional investigation by refusing 
to provide subpoenaed documents.
    During a hearing last month, I made a very simple request 
to Deputy Administrator Bob Perciasepe with respect to a 
subpoena I served to you, Administrator McCarthy, in November 
of 2013. Comply with it. The failure to comply has illustrated 
an apparent disregard for congressional oversight and an 
unwillingness to accept responsibility for the problems 
currently plaguing the EPA. As chairman of this committee, I 
intend to use every tool at my disposal to ensure that 
accountability and credibility is restored.
    Administrator McCarthy, you are here to tell us what the 
EPA can and should be doing to aid in this effort and prevent 
the waste, fraud, and abuse that threaten the Agency's 
reputation.
    Additionally, we are joined today, and I am very pleased to 
be joined by Senator Vitter and Senator Whitehouse. We welcome 
them today and we look forward to their testimony.
    We are going to run just a short video to kick this off. I 
know Senator Whitehouse has one too.
    [Video shown.]
    Chairman Issa. I now recognize the distinguished ranking 
member, Mr. Cummings, for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. I want to 
remind everyone that this is our watch. We are on the earth 
today. The question is whether we will guard our environment so 
that, when our children's children's children inherit it, it 
will be a better environment than the one that was in existence 
when we lived upon this earth.
    Mr. Chairman, today's hearing is significant because it 
marks the first time that the administrator of the 
Environmental Protection Agency, Ms. McCarthy, will testify 
before any committee of Congress since the EPA issued its 
proposed rule to limit carbon pollution from power plants.
    The rule, which is part of the President's Climate Action 
Plan, is a landmark step towards addressing climate change. The 
time for our Nation to take action on climate change is right 
now; not tomorrow, not next week, but now. The science is 
abundantly clear and the evidence is simply overwhelming. This 
is our watch.
    So I welcome Administrator McCarthy and I look forward to 
hearing more about the Agency's action on this very critical 
issue.
    I also welcome Senator Whitehouse and Senator Vitter. It is 
good to have you both here today. Just last week Senator 
Whitehouse, who chairs the Senate Subcommittee on Clean Air and 
Nuclear Safety, held a remarkable hearing with testimony from 
our four previous EPA administrators. They were all appointed 
by Republican presidents. Let me say that again. They were all 
appointed by Republican presidents. And they all, all four of 
them, testified about the urgent need for the United States to 
act on climate change right now; not tomorrow, not next year, 
now.
    These four Republican administrators wrote an op ed in the 
New York Times on August 1st, 2013, and let me tell you what 
they said. I didn't say this, they said it. ``Each of us took 
turns over the past 43 years running the Environmental 
Protection Agency. We served Republican presidents, but we have 
a message that transcends political affiliation: the United 
States must move now on substantive steps to curb climate 
change at home and internationally.''
    These four Republican administrators endorsed President 
Obama's Climate Action Plan, and here is what they also wrote: 
``A market-based approach, like a carbon tax, would be the best 
path to reducing greenhouse gas emissions, but that is 
unachievable in the current political gridlock in Washington. 
Dealing with this political reality, President Obama's June 
Climate Action Plan lays out achievable actions that would 
deliver real progress.''
    This is our watch. These words came from officials who 
served in the Nixon Administration, the Reagan Administrations, 
and both Bush Administrations. But the question is is Congress 
listening. Are we listening? Are we hearing the urgent 
warnings? Unfortunately, it appears that the answer is no. 
Republicans have designated this week in the House of 
Representatives as Energy Week. Yet they refuse to consider any 
legislation to address climate change. This is our watch. 
Instead, they vote over and over and over and over again to 
protect the interest of the fossil fuel industry.
    This is our watch. We have a duty to pass on a cleaner 
environment than the one we found when we came upon this earth. 
As a result, this week the House of Representatives will take 
its 500th anti-environment vote since Republicans took the 
majority in the 112th Congress. Unfortunately, the actions of 
this committee seem to reflect the same priorities. The 
official purpose of today's hearing is not to address climate 
change or the response of Federal agencies to one of the most 
enormous challenges facing our Nation and our entire world. 
Instead, the committee will focus on what appears to be an 
effort to block EPA at every turn and to prevent the Agency 
from getting anything done.
    Since 2011, Chairman Issa has launched an unprecedented 18 
separate investigations into EPA activities. He has sent 49 
letters, issued two subpoenas, and held 15 hearings, including 
this one. Today some committee members will accuse 
Administrator McCarthy of obstructing congressional oversight. 
But the facts show this simply is not true. The EPA employees 
have testified at more than a dozen hearings; they have 
participated in numerous transcribed interviews, depositions, 
and briefings; and they have produced more than 200,000 pages 
of documents to the committee since 2011.
    This is our watch. So I want to be clear that some of these 
investigations are worthwhile. The actions by John Beale, for 
example, of pretending to be a CIA agent while working at EPA 
are criminal, and they deserve to be investigated and 
prosecuted, and he should be brought to justice. But eventually 
I believe the committee must turn from oversight to reform, 
because this is our watch. At some point history calls on us to 
take on the greatest challenge of our generation, the greatest 
challenge our generation has ever faced in global warming. 
Ladies and gentlemen, we simply do not have the right to remain 
silent.
    Mr. Chairman, you said in your opening that the EPA 
regulates businesses and affects the economy. I don't think you 
mentioned its core mission. Its core mission: to protect the 
human health and the environment. I just wanted to make that 
clear.
    Finally, EPA must fulfill its mission of protecting human 
health and our environment, and Congress should do everything 
in our power during our watch to make sure that they have the 
resources and the tools necessary to do so.
    With that, I yield back.
    Chairman Issa. I thank the gentleman.
    As we go to our witnesses, I might remind the witnesses 
that the hearing has been designated as Management Failures: 
Oversight of the EPA, which is within our jurisdiction, not 
global warming.
    Members may have seven days to submit opening statements 
for the record.
    We now welcome our distinguished first panel. As is the 
usual practice of the committee, the Senators will be excused 
immediately following the testimony and will not be sworn.
    The Honorable David Vitter from Louisiana is the Ranking 
Member of the Senate Committee on Environmental and Public 
Works, and has been highly involved in the oversight process 
with this committee.
    The Honorable Sheldon Whitehouse, from Rhode Island, is a 
member of the Senate Committee on Environment and Public Works.
    Senator Whitehouse, I think you won the straw. You get to 
go first.

                       WITNESS STATEMENTS

         STATEMENT OF THE HONORABLE SHELDON WHITEHOUSE

    Senator Whitehouse. Thank you, Chairman, Ranking Member 
Cummings.
    The Environmental Protection Agency is far more popular 
than Congress, and its mission, to protect human health and the 
environment, is one of the most fundamental and popular 
responsibilities of the Federal Government. Bad actors like 
John Beale can be found in large institutions, and should be 
dealt with by the proper authorities. But we don't, in America, 
impugn the integrity of an entire agency and its thousands of 
public servants. That is a disservice to the American people 
who rely on the EPA to protect public health.
    Earlier this month, EPA used its Clean Air Act authority, 
as established by Congress and affirmed by the Supreme Court, 
to propose carbon pollution standards for the Country's 
existing power plants. The approach taken in the standards was 
based on unprecedented public engagement. The EPA held more 
than 300 public meetings, working with stakeholders of all 
kinds and all across the political spectrum.
    EPA has put States in the driver's seat to come up with 
their own best plan to meet State-specific targets. States and 
power companies will have a wide variety of options to achieve 
carbon reductions, like boosting renewable energy, establishing 
energy savings targets, investing in efficiency, or joining one 
of the existing cap and trade programs, each of which 
strategies has been proven successful in our States. States can 
develop plans that create jobs, plans that cut electricity 
costs by boosting efficiency, plans that achieve major 
pollution reduction. As proposed, the rule will reduce carbon 
pollution while providing as much as $93 billion in public 
benefit per year by 2030.
    A recent Washington Post ABC News poll found that 70 
percent of the public supports Federal standards to limit 
greenhouse gas pollution. And just last week the Wall Street 
Journal and NBC News released a poll showing that two-thirds of 
Americans support President Obama's new carbon pollution 
standard. More than half say the U.S. should address climate 
change even if it means higher electricity bills for them.
    EPA's proposal is also supported by major utilities like 
National Grid, faith organizations like the U.S. Conference of 
Catholic Bishops, and nameplate corporations like Mars, Nike, 
Starbucks, and countless others.
    As the ranking member indicated, four former EPA 
administrators who served under Presidents Nixon, Reagan, 
George H.W. Bush, and George W. Bush testified recently before 
my Senate Environment and Public Works Subcommittee on clean 
air and nuclear safety. They explained that carbon pollution 
needs to be addressed immediately, that EPA's rule is a 
reasonable way to reduce carbon pollution, and that industry 
has a history of developing innovative ways to comply with 
environmental regulations in ways that cost significantly less 
than industry's initial estimates. Indeed, some say that those 
initial estimates are often exaggerated.
    The Clean Air Act, according to a 2011 EPA assessment, will 
benefit Americans more than its costs by a ratio of 30 to 1, 
$30 of value in the lives of regular Americans for every $1 the 
polluters had to pay in cleanup costs. That is a good deal for 
America.
    I am grateful to Administrator McCarthy for working 
diligently to do what Congress and the Supreme Court told EPA 
to do, and what the American people want EPA to do, to reduce 
harmful carbon pollution in accordance with the law and the 
vast preponderance of the best available science. Whatever 
questions may need to be answered, it does not serve the public 
to interfere with the EPA in its performance of this vital, 
popular, and beneficial task. Indeed, it would be a dereliction 
of duty on, as the ranking member said, our watch.
    Thank you very much, Mr. Chairman. Thank you, Ranking 
Member Cummings.
    [Prepared statement of Senator Whitehouse follows:]

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    Mr. Walberg. [Presiding.] Thank you, Senator Whitehouse.
    Now, Senator Vitter, we look forward to your comments.

            STATEMENT OF THE HONORABLE DAVID VITTER

    Senator Vitter. Thank you, Mr. Chairman and Ranking Member 
Cummings and all members, for inviting me to testify before 
your committee today. And I am going to break from the previous 
two speakers. I am going to actually talk about the topic of 
this hearing; ``entitled Management Failures: Oversight of the 
EPA.''
    As the ranking member of the Senate Environment and Public 
Works Committee, I have a responsibility to oversee the EPA. 
Unfortunately, under the current majority in the Senate, our 
committee has yet to hold a single oversight hearing on this 
important matter, contending instead that a perfunctory 
member's briefing was sufficient. That is why your work and 
your effort is so incredibly important.
    Now, while there are certainly serious policy debates about 
the Agency and its role in regulating our energy supply, that 
is not what I am here to discuss. That is not what the hearing 
is about. Rather, my testimony will focus on my work over the 
last year that has uncovered what appears to be a systematic 
breakdown in EPA operations that have wasted millions of 
taxpayer dollars.
    Now, at the very beginning let me emphasize three key 
points. First of all, I am not saying I have never said that 
all or most EPA employees are dishonest or incompetent. I have 
never said that and I have never impugned their integrity. 
Secondly, I have never said that these problems started under 
this Administration and existed under this Administration 
alone. I have never said that; I am not saying that today. But 
number three, the statement by others, including the head of 
the EPA, that John Beale was a lone wolf and a completely 
isolated incident, is clearly not true; and the facts clearly 
contradict that. The Beale saga has uncovered major systemic 
management failures at EPA and has also led to the uncovering 
of other significant time and attendance fraud, other unrelated 
cases that you have heard about, including in your May 7th 
hearing.
    Let me give you the history of my work on this matter. In 
July 2013, I was contacted by a whistleblower who described 
serious and systemic time and attendance fraud at the EPA. Some 
of these problems involved situations where senior EPA managers 
discouraged remedial action against chronic offenders because 
it was easier to ignore the problem than to fix it. Based on 
this information, I requested EPA's Office of Inspector General 
to brief me on the time and attendance problems they were 
investigating at the Agency. I was expecting an account of the 
instances reported by the whistleblower, but instead I learned 
of another case, the bizarre tale of John Beale, the fake CIA 
agent who pled the Fifth in this hearing room.
    When we made the Beale saga public, I was aware of the 
underlying symptoms of abuse going on at the Agency. Therefore, 
it was immediately apparent to me that the Agency's claim that 
Beale was a lone wolf or an isolated case was just flat out 
completely false, and anybody who argued that he was a solo 
actor was just flat out distorting the truth.
    Since then, I have been focused on uncovering the 
circumstances and management weaknesses that allowed Beale's 
fraud to continue for so long, literally for decades. These 
management failures have facilitated wasting millions upon 
millions of taxpayer dollars and undermine congressional 
oversight.
    In August 2013, I requested the OIG to immediately launch 
an investigation into the Agency's policies and process that 
facilitated Beale's fraud and to make recommendations to ensure 
this never happens again. When the OIG issued its report in 
December 2013 on Beale's travel and pay issues, the findings 
were, in my opinion, rather scant and prompted more questions, 
such as who knew or should have known what Beale was up to and 
when did they first reason to believe that Beale was defrauding 
the Agency. So I asked the OIG to show me their work. My staff 
then poured through all of the OIG's documents and interview 
notes in hopes of answering these key questions. The results of 
our review were the subject of a series of reports issued in 
February and March of this year, which are attached to my 
testimony today.
    The key findings of these reports include, one, Beale could 
not have accomplished his massive fraud without assistance, 
knowingly or unknowingly, from former and current EPA officials 
who have in no way been held accountable; two, one of the key 
facilitators of Beale's fraud was Deputy Administrator 
Perciasepe, who signed key documents and contributed to the 
delay in reporting Beale to the OIG; three, the time line 
offered by the EPA and the OIG that concluded Administrator 
McCarthy was the first person to report suspicions of Beale is 
highly suspect; and, four, other EPA employees had an 
opportunity to be proactive and should have done more to 
prevent the fraud, but chose to defer to senior officials 
rather than report their concerns to the OIG.
    Now, as I said at the beginning, and I want to emphasize, 
Beale's fraud stretched through several administrations, 
Republican and Democrat, so it is easy to second guess their 
actions with the benefit of hindsight. But this does not change 
the fact that many individuals at EPA had knowledge or were 
woefully ignorant of Beale's ongoing fraud. These individuals 
have never been held accountable.
    I also emphasize that certainly most EPA employees are not 
bad apples, are not incompetent, are not defrauding the public; 
they are dedicated public servants. However, when an agency is 
in the process of aggressively expanding its jurisdiction, 
regulating something as significant as our energy supply, they 
have a key responsibility to make sure that their own house is 
in order, and EPA's is clearly not.
    Aside from the Beale case, I have learned more about the 
dysfunction of the EPA, again, thanks to courageous 
whistleblowers, and this has made it abundantly clear again 
that John Beale was not a lone wolf and his case is not an 
isolated instance. You heard about other significant cases of 
time and attendance fraud at your May 7th hearing. In addition, 
a whistleblower has informed my staff that there was a dispute 
between the Office of Homeland Security and the OIG. When I 
learned of the dispute, I was immediately struck by the 
coincidence that the same actors who delayed providing the OIG 
with critical information about Beale were the same individuals 
involved in an altercation with an OIG investigator. We now 
know there are additional instances where EPA employees refused 
to cooperate with OIG investigations and received no reprimand. 
And I understand that as recently as yesterday, this issue is 
completely unresolved in the eyes of the OIG.
    Because of our joint efforts, a veil has been pulled back 
revealing that wasted taxpayer resources and mismanagement 
permeates the Agency. Given that much of our efforts to uncover 
waste, fraud, and abuse at the Agency derive from the voice of 
undaunted whistleblowers, I encourage additional concerned EPA 
staff to come forward at any juncture. We can work together to 
reform and rehabilitate the troubled agency.
    As my testimony today demonstrates, representatives in 
Congress do listen and do take action based on information 
whistleblowers provide.
    In closing, I want to commend this committee for taking the 
issue of waste, fraud, and abuse at the EPA seriously and for 
holding today's hearing. It is important that this story come 
out and, because of your work, additional stories of this 
systematic problem have come out and it has demonstrated that 
John Beale and his crimes were just, unfortunately, the tip of 
the iceberg.
    Thank you very much.
    [Prepared statement of Senator Vitter follows:]

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    Chairman Issa. [Presiding.] Thank you, Senator. We 
appreciate your coming here to give us testimony, and once 
again I want to thank you for your entire team's effort in this 
joint investigation.
    We will now take a very short recess in place for the 
administrator to be seated.
    [Pause.]
    Chairman Issa. Our second panel today is Administrator of 
the United States Environmental Protection Agency, the 
Honorable Gina McCarthy. Pursuant to the committee rules, Madam 
Administrator, would you please rise to take the oath?
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witness responds in the affirmative.]
    Chairman Issa. Thank you very much. Please be seated.
    As you know after so long doing this job as a deputy and as 
the administrator, your entire prepared statement will be in 
the record. You may choose to read it or use your five minutes 
in any way you choose. The gentlelady is recognized.

 STATEMENT OF THE HONORABLE GINA MCCARTHY, ADMINISTRATOR, U.S. 
                ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCarthy. Thank you very much, Chairman Issa, Ranking 
Member Cummings, and members of the committee. I appreciate the 
opportunity to testify today.
    The EPA's mission is to protect public health and the 
environment. It is important to every one of us, and I 
understand and appreciate this committee's keen interest in the 
EPA's work. In order to best achieve EPA's mission, one of the 
themes for my tenure as administrator has been to embrace EPA 
as a high performing organization. This means using our limited 
resources effectively so that EPA employees have the tools they 
need to do the important work that we ask of them every day.
    Effective oversight is an important assurance that the 
Agency's work remains faithful to its mission and its mandates. 
In support of congressional oversight, the EPA works daily to 
respond to letters and various requests for information from 
this committee and others. Over the last six months, the EPA 
has produced thousands of documents, tens of thousands of pages 
to this committee alone. Cooperation with our overseers is not 
just EPA's policy, but it has and has always been part of EPA's 
culture.
    EPA employees have always provided extensive information 
and support to facilitate the oversight work of EPA's inspector 
general. The inspector general plays a special role in helping 
me to ensure that the Agency is operating at its best, and I, 
along with my entire leadership team, remain committed to 
supporting the important work of that office.
    The responsible and accurate reporting of time and 
attendance agency-wide has been a significant focus for both 
the EPA, as well as our inspector general. Through 
investigations of the conduct of John Beale, the former EPA 
employee who defrauded the agency and is now serving time in 
jail, we identified several weaknesses in Agency systems that 
allowed that fraud to occur and persist. Based on those 
findings, EPA has taken extensive steps to ensure this type of 
fraud cannot be repeated.
    It is also important to note that even though John Beale 
has been criminally prosecuted and is currently serving time in 
jail, the Agency continues to seek restitution for the fraud 
that he perpetrated. In addition to the $1.4 million already 
recovered from Mr. Beale during the criminal process, the 
Agency is seeking to recover costs related to unwarranted 
retention incentives and fraudulent travel costs, and we are 
working to lower his retirement annuity.
    Eliminating waste, fraud, and abuse is critically important 
to me for two reasons: first, as administrator, I believe it is 
my obligation to provide the leadership and stewardship needed 
to ensure the kind of organization that the public servants at 
EPA deserve; and, second, because the work at EPA is so 
important, the health and environmental protections we 
administer benefit every person in the United States. We do 
this work with public trust and public resources, and we simply 
cannot afford to fail.
    Nowhere is that more true than in our work to address 
climate change. Climate change is one of the greatest 
challenges that we face. The science is clear, the risks are 
clear, and the high costs of climate inaction are clear: we 
must act, which is why President Obama laid out a Climate 
Action Plan. And why on June 2nd I signed the proposed Clean 
Power Plan to cut carbon pollution, build a more resilient 
Nation, and lead the world in our global climate fight.
    EPA's proposed Clean Power Plant is a critical step 
forward. It will cut hundreds of millions of tons of carbon 
pollution and hundreds of thousands of tons of other harmful 
air pollutants. Together, these reductions will provide 
important health benefits to our most vulnerable citizens, 
including our children.
    All told, in 2030, when States meet their individual goals 
through their own flexible compliance path, our proposal will 
result in a 30 percent reduction in carbon pollution compared 
to our levels in 2005. In 2030, the Clean Power Plan will 
deliver climate and health benefits of up to $90 billion. And 
because energy efficiency is such a smart cost-effective 
strategy, we predict that in 2030 average electricity bills for 
American families will actually be 8 percent cheaper.
    This is the kind of remarkable progress we can make when we 
have forward-looking policy, when we have engaged stakeholders, 
and when EPA is a high performing, high functioning agency.
    I look forward to answering the questions you may have. 
Thank you, Mr. Chairman.
    [Prepared statement of Ms. McCarthy follows:]

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    Chairman Issa. Thank you.
    Before I ask my round of questioning, your assistant was 
asked this question more than 30 days ago. I made it clear--you 
were in the back; hopefully you saw the video--that I would 
hold you in contempt if I did not receive one of the two events 
within 30 days, either compliance with the November 2013 
subpoena lawfully served on you or item by item privilege logs 
claiming executive privilege from the President. Are you 
prepared to deliver those documents here today?
    Ms. McCarthy. Mr. Chairman, EPA remains interested in 
working with the committee on the accommodation we have put 
forward----
    Chairman Issa. Ma'am, that is a yes or no.
    Ms. McCarthy. I am answering the question, sir, as best I 
can.
    Chairman Issa. No, ma'am. You are talking about the same 
things you did in your opening statement. You are talking about 
your commitment to comply. I will let you answer fully, but I 
caution you you have been threatened with contempt for not 
complying with a subpoena from November of 2013. Your deputy 
was warned. You are back here today because in fact no 
compliance with this has happened and no executive privilege 
has been claimed and no log has been produced. So I ask you 
again are you prepared today to deliver the documents 
consistent with the subpoena of November 7th, 2013.
    Ms. McCarthy. Mr. Chairman, it is my understanding that the 
staff have had discussions as early as just a short time ago 
about this issue. You know we have worked hard to recognize the 
interests of this committee in ensuring that there is no White 
House interference in the work between us and delivering 
documents that you require. We have provided an accommodation 
which we actually shared with your staff this morning, and we 
are looking to make sure that that addresses your needs so that 
we can avoid institution problems with the request that you 
made and hopefully move on to continue our work together.
    Chairman Issa. Ma'am, this morning an in camera review of a 
document we knew existed, demanded, was shown. It changes 
nothing. The subpoena calls for you to deliver the document and 
documents. You have not done so. Are you prepared, not to 
negotiate with Minority staff or Majority staff, are you 
prepared to deliver the documents or provide an item-by-item 
privilege log with an executive privilege?
    Ms. McCarthy. Mr. Chairman, EPA has made no decision to not 
work with you on this issue. In fact, we have been trying very 
hard to do just that, which we know is your responsibility.
    Chairman Issa. Could you imagine if I just went ahead and 
set up a coal energy plant without a permit and started burning 
raw coal to produce electricity, and then told you for month 
after month after month that I look forward to working with 
you? The fact is this was a lawfully served subpoena. I am 
informing you today that it is my intention to hold the 
Environmental Protection Agency in contempt and to schedule a 
business meeting to do so at the first business day available 
to this committee, which will be after next week.
    Ms. McCarthy. Mr. Chairman, I think our accommodation 
addressed the interests of the committee. I would like to just 
make sure that we can continue these discussions and get a 
final look at that document. Minority staff have looked at it, 
nor the Majority have.
    Chairman Issa. Ma'am, the President of the United States 
said elections have consequences. During the Minority's time in 
the majority under President Obama, no oversight was done. This 
is my watch. This is my time. Elections have consequences. You 
have not complied with the subpoena I am telling you the time 
to comply is now. If it is not complied with, I will, today, 
schedule a business meeting. I will hold that business meeting. 
This committee will consider and vote on contempt at that 
business meeting unless we have full compliance by that time. 
And, ma'am, there is no negotiation. Negotiation time has 
expired long ago. It is contemptible for months to pass and 
have you say that you are negotiating. That in camera offer, 
quite frankly, was insufficient.
    Ms. McCarthy. I am sorry, Mr. Chairman, I didn't say I was 
negotiating. What I am trying to indicate is I certainly 
respect the important interests that your committee has put on 
the table that led to that subpoena being issued. You were very 
clear. I am trying to indicate that there is clear 
documentation that there was no White House interference. And 
if that can be agreed, then I think we can all agree that the 
important institutional considerations at EPA and of the 
Executive Branch should also be considered and hopefully 
resolved through this process.
    Chairman Issa. Ma'am, I appreciate that. It is not clear 
that there was no White House interference, so your statement 
is, in fact, your position. It is not clear. So we will have no 
preconditions that there was no White House interference. There 
is a large office at the White House that was formed to, in 
fact, handle it. The legislative liaisons that we deal with 
every day work for the White House more than they work for you, 
and that is true of all the cabinet positions.
    So I want to get past that. Obviously we are not going to 
see those documents today.
    Does the ranking member have any comment on the----
    Mr. Cummings. I do.
    Chairman Issa. Please.
    Mr. Cummings. In all fairness, I just want to make sure. 
So, I understand the chairman is saying no negotiations and you 
said you understand that. Why don't we have the documents 
today? Why don't we? They were available in camera, is that 
right?
    Ms. McCarthy. Well, actually, you have----
    Mr. Cummings. Well, hold on. I am asking her.
    Ms. McCarthy. The entire request that started this process 
and raised concerns, all of those documents have been provided 
to the committee. The question that was raised to us was 
related to a separate email exchange between EPA and the White 
House. We have certainly shared that in camera with now both 
sides of the committee, and that clearly shows there was no 
White House intervention.
    And that was the sole reason for the subpoena, which 
requires five years of any communication between the Executive 
Branch, the Executive Office of the President and EPA relative 
to any congressional inquiries, which, to me, is a very large 
task, significant taxpayer dollars. And if we have accommodated 
this request by showing that the reason the concern was raised 
is no longer justified or appropriate and we have addressed 
that concern, we see no reason why we would want to expend 
significant taxpayer dollars on that search.
    Mr. Cummings. Well, obviously the chairman doesn't feel the 
same way you feel, is that right?
    I yield to the chairman. You don't agree with what she just 
said?
    Chairman Issa. The in camera document indicated I left you 
a voicemail. That is certainly not something we can further 
verify. And this investigation has everything to do with White 
House interference with the discovery process. When we issue a 
subpoena, the 106 documents that we became aware of because of 
a whistleblower, when we issue a subpoena, to then go into a 
series of negotiations, what is going to be redacted and so on, 
with people at the White House is, in fact, now part of the 
subpoena request. We are requesting the communications that 
went into the production.
    Now, if the President wishes to say that every time he 
micro manages whether we get our documents pursuant to our 
oversight, and he wants to claim executive privilege, he may do 
so.
    Ms. McCarthy. Mr. Chairman, this is a longstanding 
practice, and I am more than happy----
    Chairman Issa. Ma'am, ma'am, practices are written in the 
Constitution. There is no precedent for this. And, quite 
frankly, the longstanding practice that you speak of is a 
longstanding practice that I inherited because for two years 
the Minority, when they were in the majority, did no oversight. 
My first request for documents was greeted with a please submit 
a FOIA, as though we were the public or a newspaper and had no 
further constitutional oversight. So we have issued a subpoena. 
It has been lawfully issued; it has been out there for a long 
time. My folks want to get to other questions as to your 
failure to manage those limited resources----
    Ms. McCarthy. Well, Mr. Chairman, I am more than----
    Chairman Issa.--so I would like to get past it.
    Mr. Cummings, did you have any other questions?
    Mr. Cummings. She was about to say something.
    Ms. McCarthy. I was just going to say I am more than happy, 
if the concern is that we just showed it to you and didn't 
provide it, I am more than happy to provide this email if that 
addresses the accommodation that we need to protect both of our 
institutional considerations.
    Chairman Issa. You certainly could make an in camera 
presentation of all the emails, all of them. And that would 
allow for staff to fully evaluate whether or not the production 
of all of the emails or some of the emails would be necessary. 
One chosen email is not in fact sufficient to take care of it. 
There has been multiple correspondence. I will never get the 
voicemail left, but I certainly am entitled for my staff to 
look at all the correspondence with the White House related to 
the production of these 106 documents. If that can be done, 
then we can make an evaluation. We can't do it based on one 
selected document. I am sure you understand.
    Ms. McCarthy. Well, it is just my understanding that this 
was the document that raised the committee's concern. We 
addressed this----
    Chairman Issa. No, ma'am. This was the document that we had 
an advanced copy of that we knew existed that we asked for 
because we found out it existed because of a whistleblower. The 
fact is there were many more. We want all the documents that 
exist. Now, if there has been hard drive crashes, laptop 
disappearances or other failures or losses, we also want to 
know about those immediately since, pursuant to the subpoena, 
there was a requirement to preserve documents. And we have done 
a lot of that this week.
    With that----
    Mr. Cummings. One last thing.
    Chairman Issa. Of course.
    Mr. Cummings. It is my understanding that your staff 
offered, months ago, to show these documents to the Majority 
staff. What happened, do you know?
    Ms. McCarthy. They did not take us up on that offer, sir. 
And the concern I have is obvious. There are balance of power 
issues here. I am trying to address the issue that was raised 
to us tat raised concern. If this is a larger concern than EPA, 
I doubt that any production we can provide you would quell that 
concern. And I think there are legitimate issues that the 
Constitution recognizes on balance of power, and the 
appropriation we have offered is what we are supposed to do and 
what we are supposed to have a good discussion about and try to 
reach an accommodation to not tip the balance there, because we 
believe that we need to have confidential communications with 
the White House in a way that allows us to be efficient and 
effective. This would quell that.
    Chairman Issa. I appreciate that. My staff indicates that 
no such offer to see all the documents was ever given.
    Ms. McCarthy. I am sorry, let me clarify. The offer was to 
show you the document you indicated that raised your concern.
    Mr. Cummings. Not the 106.
    Chairman Issa. Right. And that document raises my questions 
than answers, and it was only shown today in camera. I asked 
for them to look at it in camera, but we never presupposed that 
we see one document; and if it raises more questions than 
answers, we won't want to see more.
    I am going to go to the ranking member and let him ask his 
questions, but the fact is, Madam Administrator, your entire 
power base, everything you do is in fact a power of the House 
and Senate that has been essentially loaned to the Executive 
Branch. The decision to decide a new ruling on any part of 
Clean Air or Clean Water, to grant permits, these are all 
powers of law. So I appreciate you talking about balance of 
power, but you only exist because a power of this branch has 
been loaned to the Executive Branch. EPA is not an inherent 
power of the second article branch.
    But I am going to take a break and not ask my own line of 
questions yet. Mr. Cummings, please ask yours.
    Mr. Cummings. Thank you very much.
    Administrator McCarthy, I want to pick up on this. I have 
listened to the chairman and I simply disagree with his 
characterization, but I do not believe you are obstructing 
anything. I do not believe there is a conspiracy with the White 
House. I believe that the EPA has been responsive. You produced 
more than 208,000 pages of documents and the Agency has been 
trying in good faith to cooperate in all 18 of the committee 
investigations. However, I would like to give you a chance 
again to respond to any question you may not have been able to 
fully address. Would you like to raise any additional points?
    Ms. McCarthy. Well, the only thing I would like to mention 
is that this issue arose significantly through an earlier 
request for information. We spent considerable time and effort 
to respond to a variety of information requests that were made 
of us. These 106 emails were produced within seven days of us 
receiving the subpoena. The one issue that is outstanding was 
the committee's concern about whether or not there was White 
House intervention on the basis of this one email exchange, 
which we have now shown the staff.
    So we think this should alleviate the concern and allow us 
to get to our operation, our business at hand. And if we do 
that, we work very hard with this committee; we take every 
request seriously. We work with staff to prioritize as best we 
can so we meet the most immediate needs. We have produced 
hundreds of thousands of pages of information over the past few 
years, and I think we will continue to try to do that as best 
we can and hopefully work with the committee through this 
process as well.
    Mr. Cummings. Well, thank you. With that, I want to ask you 
about a much more important issue. As we heard last week, 
Senator Whitehouse held an amazing hearing with four of your 
predecessors, all Republican administrators, testifying about 
climate change. They all agreed that our Nation needs to act 
now. One former administrator, William Ruckelshaus, was 
appointed by President Nixon. He said, ``The four former EPA 
administrators sitting in front of you found that we were 
convinced by the overwhelming verdict of scientists that the 
earth was warming and that the humans were the only 
controllable contributor to that phenomenon.''
    Ms. McCarthy, how significant is it that all of the 
administrators came together to advocate for action on climate 
change?
    Ms. McCarthy. I think it is very significant, sir, and I 
also am not surprised by it, frankly, because the science has 
been clear for quite some time. I think the best thing about it 
was in hopes of getting partisan politics out of the science 
debate and moving forward to take a look at actions. Clearly, 
Republicans were some of the first conservationists in the U.S. 
We had Teddy Roosevelt that created the national park system. 
President Nixon is actually the father of EPA. The first 
President Bush actually signed the Clean Air Act amendments.
    So we have worked together for years to find out how we can 
preserve and protect both public health and the natural 
resources, and continue to grow the economy. We are going to do 
exactly the same with the challenge of carbon pollution and 
climate change, and, indeed, the time is now to take action. 
And the best part of the action, sir, is that they will benefit 
the economy; they will spark American innovation; they will 
continue to keep us in a leadership position on clean energy. 
And I am very much looking forward to having this discussion on 
our comment period of the proposal we released a few weeks ago.
    Mr. Cummings. Now, all four of these Republican 
administrators endorsed the President's Climate Action Plan. 
They said, ``President Obama's June Climate Action Plan lays 
out achievable actions that would deliver real progress.'' Your 
proposed rule has also received praise from State governors. 
For example, Rhode Island Governor Lincoln Chafee said this, 
``Thank you to the President and the EPA for taking a step 
forward to reduce pollution from power plants, which nationally 
is a large source of carbon emissions.''
    Why is it that States, in particular, favor the approach 
you have taken in the proposed rule and what work have you done 
with States to ensure that their concerns are addressed?
    Ms. McCarthy. Well, as many of you may know, I actually 
worked for State government for a number of years under both 
Republican, actually, mostly Republican administrations. So 
when we started down this venture of trying to respond to the 
commitment that the President asked us to fulfill for the 
American public, which is to develop rules for existing power 
plants, we actually did unprecedented outreach. We spent 
considerable amount of time with the States and, as a result, 
we have a proposal that is as respectful of States as it 
possibly can. It has maximum flexibility and actually sets 
standards for those States that are practicable and affordable 
and achievable, but it allows them to create their own path 
forward so that it is done in a way that is most respectful of 
their own economies and their own energy needs, and where they 
are today and what they can do moving forward.
    So I am excited about moving forward with this. We are 
going to continue that spirit of outreach during this 120-day 
comment period and will continue to work with States, who are 
our greatest ally, in bringing these carbon pollution 
reductions to the table and ensuring that our communities stay 
safe and our public is protected.
    Mr. Cummings. Chairman, just one more question.
    Another Republican former Bush Administration Treasury 
Secretary, Hank Paulson, wrote an op ed this week asserting 
that the climate crisis we now face rivals the global economic 
crisis of 2008. He said this: ``This is a crisis we can't 
afford to ignore. I feel as if I am watching as we fly in slow 
motion on a collision course toward a giant mountain. We can 
see the crash coming and yet we are sitting on our hands rather 
than altering our course.'' He went on to say, ``We need to act 
now. Even though there is much disagreement, including from 
members of my own Republican party, we must not lose sight of 
the profound economic risks of doing nothing.''
    So my last question, Ms. McCarthy, is his argument to this 
Republican colleagues is that the economic costs of inaction 
far outweigh the costs of acting now. Do you agree with that?
    Ms. McCarthy. I do, sir. And President Obama, I think, was 
very wise in developing this comprehensive plan and bringing 
together the entire Administration. He knew that climate change 
wasn't just an environmental issue. It is a significant 
economic issue for this Country that we need to face, as well 
as a national security challenge. And when this body is asked 
to figure out how to pay $110 billion in costs associated with 
national disasters in 2012 alone that is not accommodated 
through the budget process, then we have a problem here that we 
need to address; and the great thing is we can do it in actions 
that are actually going to grow the economy and keep our 
communities safer.
    Mr. Cummings. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    If you will put up the IG's statement.
    Administrator, we received an email after this attempt, 
supposed attempt to accommodate the IG. In a nutshell, your IG 
is not satisfied that in fact the continued use of your Office 
of Homeland Security undermines the Office of Inspector 
General, statutorily responsible to both this body and to the 
President. Will you commit today to fully allow the IG to do 
their job and cease having this investigative process going on 
by your Office of Homeland Security?
    Ms. McCarthy. Mr. Chairman, I listened very closely to the 
hearing earlier that you had on this and I thank you for that. 
It became very clear that I needed to intervene personally on 
this issue and I have. Since you last met on this issue, we 
have made tremendous progress. We actually have staff in the 
OIG and OHS working together. The memo that he is talking about 
is our first step forward in this process----
    Chairman Issa. Ma'am, ma'am, the email from the inspector 
general says the progress has not been made. Homeland Security, 
this creation of your department----
    Ms. McCarthy. Actually, I am not sure that is what that 
said, sir. We have made tremendous progress, but clearly we 
have not completely resolved all of our issues.
    Chairman Issa. But nothing has changed to me means nothing 
has changed, and that is what it says.
    Here is the problem, administrator. You cannot, in my 
understanding, have failures, particularly human resource 
failures, abusive work environment, sexual harassment, fraud, 
you cannot have it investigated by your Homeland Security 
people who work for you. The IG exists to be independent.
    Now, if you choose to have some of your own investigations 
going on, I can't take away your ability to do it. I can tell 
you that taking away the IG's authority, or in any way having 
the IG not know about it, which has been testified before this 
committee that under your watch that happens and happens 
regularly, including the Beale situation, where, when you 
discovered that for years you had been duped, you had gone to 
lunch with Mr. Beale, he had been a pal of yours from all 
indications, this is somebody you regularly have optional 
meetings with.
    He fooled you. When you discovered, after his supposed 
retirement and non-retirement, that you and your agency had 
been fooled, and we are not holding you responsible for that 
kind of a failure; this man apparently was very good at his con 
work, he probably should have worked for the CIA instead of the 
EPA, but the fact is, when you discovered it, you did not 
immediately go to the IG; you went and did additional work.
    That policy flies in the face of the reason the IG Act was 
passed by Congress and signed by the President.
    Ms. McCarthy. Mr. Chairman, I would do nothing to interfere 
with the ability of the OIG to do their jobs. The OIG actually 
requested that we take a look at defining roles and 
responsibilities between the OIG and OHS. And if you look at 
the memo that transferred this new process, where we were 
trying to work these issues diligently together as one EPA, it 
will verify that I have strongly supported this, and my process 
changes are exactly to ensure that the OIG can do its job while 
our national security issues are resolved.
    Chairman Issa. Ma'am, this comment is related to the memo. 
So I guess we are going to ask the OIG to come back again, 
because he just doesn't agree with you.
    Ms. McCarthy. Well, we haven't had a chance to fully 
discuss it, Mr. Chairman. It was presented as a work in 
progress. It was presented to address some issues, and not all. 
I am very confident that if you give us the ability to work 
these issues, we clearly will.
    Chairman Issa. Did the inspector general tell you, when you 
gave him the memo, that it was unacceptable?
    Ms. McCarthy. No. He told me it had not fully resolved his 
issues. I totally agreed with him and I understood that.
    Chairman Issa. Okay, we will consider those to be 
synonymous.
    Let me go through a couple of things. Do you remember Mr. 
Martin Townsend?
    Ms. McCarthy. I do not know a Martin Townsend personally. I 
am familiar with his name, yes.
    Chairman Issa. Okay. And you know who Susan Strassman-Sundy 
was?
    Ms. McCarthy. I do not know that person personally, no.
    Chairman Issa. Well, for many years Martin Townsend falsely 
signed and claimed that Susan Strassman-Sundy was in fact 
working when she was in a nursing home. She wasn't working. 
Now, we can understand the sad situation that Susan Strassman-
Sundy might be in, but what have you done to ensure that there 
is zero tolerance for falsifying and claiming--you say you have 
limited resources. These people were squandering your 
resources, and doing so as a practice that repeated itself. 
What have you done to make sure it never happens again?
    Ms. McCarthy. In general, sir, we have taken steps to make 
sure that our time and attendance is handled differently so it 
can be better monitored. We are also pursuing administrative 
action against Mr. Townsend and diligently pursuing that as 
well. We are trying to systematically make sure that our system 
is in place to catch these issues earlier and to work through 
these processes. I am very committed to making sure that waste, 
fraud, and abuse is pursued as diligently as we can, and I have 
in no way tolerated any lack of accountability or these types 
of issues. It is a disservice to the vast majority of people at 
my agency who work very hard----
    Chairman Issa. And you realize that the IG's strongest 
point is, in fact, if you stay out of his way and let him do 
this, even if your Homeland Security people think that they 
should be doing the investigations.
    Obviously, we could deal with the people who are on 
administrative leave being paid full-time because of their 
addiction to pornography being too much for you to allow them 
to be on the job. I would hope that the EPA and other 
Government agencies would try to come to us with a request for 
authority to more quickly sever people who are so flagrantly 
flaunting good judgment and law.
    Ms. McCarthy. Anything that we can do to expedite these 
resolutions would be great.
    Chairman Issa. Lastly, although I chastised you, and will 
continue to, for your failure to comply with the November 
subpoena, I want to thank you or thank your people on behalf of 
some cooperation we received on the Pebble Mine issue. It is 
clear, though, that as long as individuals who were part of the 
process that caused your agency to unilaterally attempt to 
preempt the application for a mine to comply with clean water, 
that we will find it unacceptable.
    We have tried to serve a subpoena on your former employee 
and we have asked for the failed hard drive from this Alaskan 
individual, who now is in New Zealand and seems to never be 
returning. We might strongly suggest that without the 
underlying science that you used to support your unprecedented, 
or nearly unprecedented, preemption of somebody's ability to 
apply for a permit to your agency, that you reconsider and 
allow the application to go forward, since the underlying 
science now is not just in question, it is unavailable. If you 
would respond, and then we will go to the----
    Ms. McCarthy. Just to make it clear, sir, I believe that 
our science assessment has been out in the public for quite 
some time; it was properly peer reviewed a couple of times. But 
I would also caution that the decision to move forward under 
404(c) is not preempting that project from moving forward; it 
is creating a very public process to discuss this issue, and no 
decision has been made whatsoever as to whether or not EPA is 
going to utilize this authority under the Clean Water Act.
    Relative to the failed hard drive, I am happy to have our 
staff talk. I did not realize that that was being requested, 
but I am sure we can talk about that and work through these 
issues as we have on the other issues.
    Chairman Issa. We have new appreciation for failed hard 
drives.
    I will say that since the people requested the 404 action 
before they did the science to support their conclusion, and 
which they did the request for 404 before, that, in fact, that 
prejudging that it was not going to be ever able to happen is a 
little bit like somebody holding their finger in the air and 
saying I understand there is a tornado coming. A tornado hasn't 
come, but they are now asking us all to go to the shelters. The 
reality is that the documents indicate they made a decision and 
asked for the 404, and then did the science.
    Ms. McCarthy. I am sorry, sir, I don't know who would have 
made that decision, but my understanding is----
    Chairman Issa. We will provide you the documents.
    Ms. McCarthy. My understanding is that the petitions came 
in, EPA chose to do the science assessment before they 
responded to the petitions, and then the decision was made to 
move together.
    Chairman Issa. Ranking member.
    Mr. Cummings. Just a friendly follow-up. Probably one of 
the most important things to be answered here today the 
chairman asked, and I just want to make sure we get a clear 
answer on this. The Beale situation, what has been put in place 
to make sure--the chairman asked that but I didn't hear the 
answer--to make sure that doesn't happen again? Because I think 
every single member of this committee was very upset about it. 
I just want to know what now is in place to make sure somebody 
isn't able to dupe an agency out of that kind of money for so 
long.
    Thank you, Mr. Chairman.
    Chairman Issa. Sure.
    Ms. McCarthy. Thank you for asking. We have put in place a 
number of significant changes to the way we look at time and 
attendance, the way in which we approve travel. We actually now 
have a system that we switched to that is going to provide a 
hard stop for retention bonuses. We are requiring different 
levels of approval in requirements for approval of time and 
attendance. I am happy to provide a full documentation of all 
the steps we have taken to make sure that human error can't 
happen and that managers don't have an ability and a 
responsibility to hold their employees accountable.
    Chairman Issa. Thank you.
    I am delighted to call on the gentleman from Missouri, who 
was here before the gavel, Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman.
    Administrator McCarthy, I want to ask about the case of 
John Beale, a former senior policy advisor who worked for you 
when you were assistant administrator of EPA's Office of Air 
and Radiation. As you know, this man lied to his friends, 
family, and EPA colleagues for 13 years by claiming that he 
worked for the CIA in order to avoid doing work for the EPA and 
to steal time from the Government.
    Mr. Beale got away with this for years under both 
Republican and Democratic administrations until you started the 
process of investigating his supposed CIA assignment. This man 
is now sitting in a Federal prison serving 32 months and has 
been required to pay nearly $1.4 million in restitution and 
forfeiture. Mr. Beale claimed that he was able to deceive 
colleagues at the EPA because he earned their trust and respect 
over the years, and they did not think to question him.
    Ms. McCarthy, when you first joined the EPA, did senior 
officials tell you that Mr. Beale worked for the CIA?
    Ms. McCarthy. I was led to believe that he did, yes.
    Mr. Clay. And during your tenure as assistant administrator 
of Air and Radiation, were you unhappy with the fact that Mr. 
Beale was spending so much time supposedly working for the CIA?
    Ms. McCarthy. I was, sir. I did my best to get him back to 
EPA so we could utilize our Federal funds as appropriately as 
we could, recognizing at that point that I thought he had 
obligations to another agency as well.
    Mr. Clay. During this committee's deposition of Mr. Beale 
in December 2013, Mr. Beale stated that you halted his work on 
a project he started in 2005 under one previous assistant 
administrator and supported by two more after that. Mr. Beale 
stated during his deposition that you asked him to stop working 
on that project, come back to working full-time, and resume his 
position at the Office of Air and Radiation. Is that true?
    Ms. McCarthy. My main goal was to get him back to EPA for 
as many hours as I possibly could, and I think his deposition 
might indicate that I was a bit of a pest about that. But I am 
glad I was; it led to a referral to the OIG and they did a 
great job with DOJ in putting him in jail and getting back 
Federal funds that belonged to the public.
    Mr. Clay. And just for the committee's sake, Beale said 
that you told him things were so busy that we just cannot 
afford having somebody out there doing an academic project, and 
we need all hands on deck. Is that accurate?
    Ms. McCarthy. That is correct.
    Mr. Clay. Administrator McCarthy, the plea agreement that 
Mr. Beale signed with the U.S. Attorney's Office only covered 
his fraudulent actions from 2000 to 2013. I believe there must 
be unauthorized bonuses and travel expenses that the Federal 
Government and American taxpayers paid which Mr. Beale has not 
given back. Do you agree?
    Ms. McCarthy. Yes, I do.
    Mr. Clay. And is EPA making efforts to collect these 
additional monies from Mr. Beale?
    Ms. McCarthy. EPA is continuing to seek additional 
reimbursement and restitution, as well as taking steps to 
reduce his retirement annuity. We are attempting to get back 
everything that this convicted felon fraudulently took from the 
United States of America.
    Mr. Clay. And he is still eligible for his retirement?
    Ms. McCarthy. Well, he is. As far as I know, that is what 
the law indicates. Even if we had successfully fired him, he 
would still be eligible for retirement.
    Mr. Clay. I wonder if he gets one from the CIA.
    Ms. McCarthy. I am not sure he is spending it in the place 
where he would choose, but he has it.
    Mr. Clay. You know, during this committee's interview in 
March with Mr. Hooks, the assistant administrator for the 
Office of Administration Resources Management, he told us that 
you sought his assistance with Mr. Beale in December of 2010 or 
January of 2011. I understand that personnel issues are within 
Mr. Hooks's portfolio, is that correct?
    Ms. McCarthy. I did, yes.
    Mr. Clay. And he stated that you were frustrated that EPA 
was paying for Mr. Beale's salary when he was supposedly 
working 100 percent for the CIA. He said you wanted Mr. Beale 
back doing work for you. He also said you were concerned that 
his retention bonuses were not recertified and he was being 
paid over the statutory limit. Is that correct?
    Ms. McCarthy. That is correct.
    Mr. Clay. Mr. Chairman, I see my time has expired, and I 
yield back.
    Mr. Chaffetz. [Presiding.] I thank the gentleman.
    I will now recognize myself for five minutes.
    Thank you for being here. Madam Administrator, you say that 
you are cooperating with the Office of Inspector General, yet 
in July of 2013 they highlighted to Congress that you had not 
issued an all-hands memorandum to your employees encouraging 
them to participate. Why not do that?
    Ms. McCarthy. I actually was a bit appalled to think that I 
had to send out a memo on one particular legal obligation of my 
expectations to staff, and I knew that there were a lot of 
challenges they were facing in terms of updating our systems.
    Mr. Chaffetz. Are you doing to do that? Are you going to 
issue an all-hands memorandum to your employees?
    Ms. McCarthy. I am sorry, I will answer more quickly. I 
actually, instead of doing a memo, I did an all-hands video and 
speech where we talked about both accountability where I 
confirmed my expectation that people would be accountable and 
that the OIG was important and should be fully brought in to 
any issues of waste, fraud, and abuse.
    Mr. Chaffetz. I think to satisfy the OIG's concerns, to 
issue a memorandum to make it clear to employees to help 
participate would be much appreciated.
    I ask unanimous consent to enter into the record the June 
13th, 2014 letter from Chairman Issa and Senator Vitter to this 
effect.
    Ms. McCarthy. Sir, can I just point out that I send a lot 
of mass mailers out? I do very full town hall meetings----
    Mr. Chaffetz. Without objection, so ordered.
    Ms. McCarthy.--and that is what I did this town hall 
meeting to actually impress upon it.
    Mr. Chaffetz. It obviously didn't satisfy their concerns.
    Let me ask you. Prior to your being named the 
administrator, you were, my understanding is, the assistant 
administrator of the Office of Air and Radiation from 2009 to 
2013, correct?
    Ms. McCarthy. Yes.
    Mr. Chaffetz. And during that time it is my understanding 
that you had three people that were direct reports to you, 
correct?
    Ms. McCarthy. I actually had quite a few more than that, 
sir.
    Mr. Chaffetz. How many direct reports to you?
    Ms. McCarthy. Let me look. I had probably 10 or so. 
Actually, 11, 12, something like that.
    Mr. Chaffetz. A dozen or slightly less than. Is it against 
department policy to view pornography on official work 
computers during official time?
    Ms. McCarthy. Yes.
    Mr. Chaffetz. What is the consequence if you get caught 
doing that?
    Ms. McCarthy. You either take criminal or administrative 
action, or both.
    Mr. Chaffetz. Can you be fired?
    Ms. McCarthy. Yes, you can.
    Mr. Chaffetz. We have three instances here. For instance, 
we have a GS-14 EPA employee within the Office of Air and 
Radiation, something that you oversaw, who had been accused of 
viewing pornography two to six hours a day since 2010. This 
person is on administrative leave with pay. Why didn't you fire 
this person?
    Ms. McCarthy. I actually have to work through the 
administrative process, as you know, and there is still an 
ongoing OIG criminal investigation, is my understanding. We 
have actually banned him from the building. He no longer has 
access to any EPA equipment. But administrative leave----
    Mr. Chaffetz. We have another person at the EPA within the 
Office of Policy who admitted, they have admitted, viewing 
pornography while at work for at least two hours at a time. You 
have another person, an EPA employee at the Chicago Regional 
Office, who had child pornography files on his work computer 
and viewed them on a regular basis.
    Ms. McCarthy. Actually, that gentleman was fired and was 
actually put in prison.
    Mr. Chaffetz. I just don't understand why--at one point the 
OIG walks into the office, they are actually viewing 
pornography when they walk into the office, and that person has 
not been fired. I don't understand.
    Ms. McCarthy. Well, we just had an exchange with the 
chairman that I would like to point out, which is any way that 
we can make these processes move more quickly, I am all for it. 
But there is an administrative process we must follow, because 
it is one thing to get upset; it is a second thing to 
successfully go through both criminal and administrative 
procedures to address the issue----
    Mr. Chaffetz. And I think that is something we are going to 
have to address, because why these people aren't fired on the 
spot I just do not know.
    Ms. McCarthy. I would welcome Congress taking up some of 
those challenges; it would be great.
    Mr. Chaffetz. And I also, with all due respect, need to 
understand why you had issued a memo. This is an email that you 
sent on March 29th of 2012. This gets into knowing when John 
Beale was a problem. I mean, at one point you say, ``I thought 
he had already retired,'' and yet he continued on the payroll 
for some time. You knew about his issues with his payroll 
problems and his other things for years, and you didn't do 
anything about it.
    In fact, your own agency department here issued this report 
saying from the beginning of 2001 it appears Mr. Beale began 
not to appear in the office as much as one day per week, 
although he was not approved to leave. Second, beginning in the 
mid-2000s, Mr. Beale began not to appear in the office for more 
lengthy periods of time. According to the EPA's Office of 
Inspector General, those abuses ranged from weeks to several 
months in the mid-2000s to the end of Mr. Beale's career. He 
didn't even appear at work. He is one of your less than 12 
employees. Why wasn't he fired at that point? If he doesn't 
show up to work for months, did you not know that?
    Ms. McCarthy. I think that we have discussed the fact that 
it was my understanding from day one that he had obligations to 
other agencies as well. I did the best that I could to try to 
keep track of him and to bring him to justice and, frankly, I 
am very appreciative of the work of the OIG and DOJ to 
actually----
    Mr. Chaffetz. Why did it take you so long? The OIG said it 
took him one week to figure it out. You knew it was a problem 
for years and you didn't think to call or ask anybody? Why is 
it that the OIG could find it out in one week?
    Ms. McCarthy. Actually, I did refer it to the OIG when I 
had the information available to me that I had been requesting 
for quite some time and working diligently to----
    Mr. Chaffetz. You referred it to the general counsel; you 
did not refer it to the OIG, which you were supposed to do. And 
you got promoted because of all this.
    Ms. McCarthy. I am sorry, sir, that is not correct. That is 
not correct. I actually referred it as a human resources issue 
to OARM, which is our office that handles that. It became clear 
that there were other issues involved. They referred it to OHS 
to do some communication through the intelligence agencies 
because they are our liaison. When information was understood 
that this was more than a time and attendance issue, then it 
was referred to the OIG appropriately. This was a time and 
attendance issue and other things.
    Mr. Chaffetz. We will spend some more time on this issue. 
My time is well passed and expired.
    I believe we now go to Mr. Tierney now, from Massachusetts, 
for five minutes.
    Mr. Tierney. Thank you, Mr. Chairman.
    I think perhaps you wanted to go somebody else? I am fine 
with that.
    [Pause.]
    Mr. Tierney. Ms. McCarthy, how are you?
    Ms. McCarthy. I like the way you say my name, sir.
    Mr. Connolly. Hey, I can do it too.
    [Laughter.]
    Mr. Tierney. So, look, thanks for throwing out the first 
pitch to the Red Sox this year. We have some more work to go on 
that, but----
    Ms. McCarthy. I did better than Fitty Cent.
    Mr. Tierney. You did. You did.
    [Laughter.]
    Ms. McCarthy. You like the way I said that?
    Mr. Tierney. I like the way you said that as well.
    I want to shift gears a little bit here because I think 
there are some important things being done that we have to talk 
about here. One is the clean power plan that EPA put out. It 
really has the potential to drive technological innovation and 
the clean energy and energy efficient technologies. I think 
that is critical on that and I am sure you will agree. It is 
going to be a huge benefit to our economy, especially in the 
long-term, but also in the more recent term.
    So one of the elements of that proposal is the option for 
States to use electricity more efficiently. You base and the 
Agency based its proposal on what States are already doing to 
implement energy efficiency measures. I want to ask you to tell 
us a little bit more about the best performing measures that 
States are already using to improve energy efficiency and 
reduce electricity demand.
    Ms. McCarthy. Well, what is most exciting about this is the 
fact that States and cities--I was just at the U.S. Conference 
of Mayors, and they know they have been dealing with these for 
a while and they have developed a bunch of different techniques 
that can address carbon pollution and put money in people's 
pocketbooks. So they are pretty excited, as am I.
    There are energy efficiency initiatives that can be brought 
to the table. I think you will know from Massachusetts they 
have a robust energy efficiency program. They also have a 
renewable fuel standard program. They have been a leader in 
energy efficiency, I am proud to say, for years, and they also 
are participating in the regional greenhouse gas initiative, 
because the other flexibility that we allowed in this proposal 
to States is not just go it alone, but if you want to join with 
other States or work on regional initiatives so that you get 
better reductions for your money, that is wide open to you.
    So I think this will indeed spark innovation in renewables 
and energy efficiency technologies. It will be a leader in 21st 
century energy generation and I am pretty pumped.
    Mr. Tierney. And are you working to make sure that other 
States have the advantage of knowing what the best practices 
are in those States that are really aggressive in those areas?
    Ms. McCarthy. We are. Actually, if you take a look at this 
proposal, we give examples of State leadership here that others 
can work from. We also are meeting with States and energy 
officials and environmental officials from those States so that 
everybody gets to see what the best practices are that they can 
take advantage of, especially the efficiency ones, which pay 
off for everybody consistently. It is just a way of getting 
pollution reduction that is sustainable, and that is what we 
are really looking for here because you can continue to grow 
the economy while you cut those pollution levels down. That is 
what EPA does.
    Mr. Tierney. Look, in my district I know people are talking 
about jobs, and I suspect it is not different elsewhere on 
that. So talk to us a little bit about the number of jobs that 
could be created by making these kind of investments on that 
and just how we are going to boost the economy that way.
    Ms. McCarthy. Well, we know that this will actually create 
thousands of jobs, and those jobs are going to be created in 
the clean energy economy. We are talking about jobs related to 
both renewable energy, as well as a wealth of energy efficiency 
programs. If you are heavily reliant on coal, it also can be 
expenditures that you make at those facilities to deliver that 
energy more efficiently. So there is a lot of choices that 
States get to make here. We wanted to take each State where 
they were so that this wasn't an attempt to preclude any 
generation from being utilized effectively. But it is to open 
up the table to all kinds of new choices to States that would 
continue to grow jobs.
    Mr. Tierney. Did you find any parts of the Country that 
didn't have a potential to boost their use of clean energy?
    Ms. McCarthy. Well, one of the reasons we did individual 
State standards and then allowed the States to develop their 
own plans as a proposal was because we recognized that each 
State was in a different place. So some have looked at that 
kind of funny. If you look at percentages, you will see that 
West Virginia, which emits a considerable amount of carbon from 
their coal-based system, they have a little bit less percentage 
reduction because their opportunities aren't as great for 
inexpensive reductions.
    Where you have the State of Washington that does very well, 
we are asking a large percentage. We just looked at what they 
were doing anyways, where they were. This is not a stretch goal 
for any State; it is an opportunity to turn climate risk into 
business opportunity, job growth, and economic growth.
    Mr. Tierney. It seems pretty clear that you are giving 
incentive to States to put in more solar panels, to erect more 
wind turbines, weatherize more homes, install more energy-
efficient appliances and machinery. I mean, this is the 
direction that we are heading. These are jobs that pay well. 
They can't be exported. They are here to stay, is that right?
    Ms. McCarthy. That is exactly right.
    Mr. Tierney. So I just think that you are heading in the 
right direction I think not only for the clean air aspect of it 
and all the other economic and even national security issues we 
are talking about, but the jobs, jobs, jobs part of it on that 
and the allowance of States with the flexibility to innovate 
and do it in the way that makes more sense to them. I thank you 
and the Agency for your hard work in that regard and I yield 
back my time.
    Ms. McCarthy. Thank you, sir.
    Mr. Meadows. [Presiding.] I thank the gentleman from 
Massachusetts. The chair recognizes the gentleman from North 
Carolina, Mr. McHenry.
    Mr. McHenry. I thank the gentleman from North Carolina.
    Administrator McCarthy, I thank you for being here today 
and I certainly appreciate your willingness to answer 
questions. I want to ask you about a Superfund site in my 
district, in Buncombe County, Region 4. And there is TCE 
contamination, and TCE is often called sinker, right? And what 
we found with studies, and what I have been told from the 
experts, is that this TCE contamination is also a floater, 
because there is a petroleum element to it, so it is on the 
surface of the groundwater. So, therefore, finding that out is 
a positive thing because it makes the cleanup easier and means 
that we can actually take action now. So that is what I want to 
ask you about, is about that very issue.
    The EPA can require CTS, which is the company that did the 
polluting, to move forward immediately to address the floating 
contamination while it continues to investigate the sinker 
contamination. Will the EPA urge CTS and direct them to do 
that?
    Ms. McCarthy. Well, I don't know, sir, what the next step 
is. I do know that progress is being made, and I really 
appreciate your interest in this site. This is actually a site 
that can significantly impact public health. So I think it is 
important that we keep moving this forward. I am glad it has 
been listed on the Superfund list, finally, so that we can move 
it forward, and our next steps are actually to conduct some 
follow-up air sampling studies to define the extent of the 
contamination in the air and in nearby homes, which is 
something that I think you have been very focused on. And the 
study will expand and move away from the site so we can 
identify the full extent of the release of the volatile organic 
compounds and we can properly address both the immediate public 
health challenge, as well as the environmental cleanup 
challenges.
    Mr. McHenry. So this has been 20 years in the making, long 
before you and I had our current roles and long before 
Congressman Meadows and I represented this county. We have only 
represented this county for 18 months. But what we need is 
action from you. And from what we understand from CTS 
officials, and my constituents have heard from board members of 
that company, they said they have asked and the quote is they 
are doing everything that EPA has asked them to do. Right? So 
there is a credibility problem for the EPA at stake here, both 
on the time frame it took to get this site on the national 
priorities list, as well as that type of message coming from 
the company.
    We also know that administrative orders of consent in 2004 
and 2012 say that the EPA has the authority to direct the 
company in very extraordinary ways. So I ask you to do that. 
There is immediate action that can take place that would be 
good for the public health of my constituents and Congressman 
Meadows' constituents, good for western North Carolina, and is 
a meaningful step that can be taken in the short-term to clean 
up what we know is achievable, even though the more difficult 
issue may still remain.
    So what I ask you to do, what I urge you to do is to work 
through these issues and deal with that and take action.
    Ms. McCarthy. I would be happy to take a look at this. Why 
don't I make sure that your staff and ours talk about this? And 
I will do the very best I can to make sure that this cleanup 
addresses both the immediate concerns, as well as the long-term 
pollution issues that we are trying to address.
    Mr. McHenry. Thank you. I thank you. We have worked 
extensively with Region 4 staff. Look, we all want clean water. 
We all want clean air. And what my families that I represent in 
western North Carolina want is action taken.
    So, with that, I would like to yield the balance of my time 
to Congressman Meadows on this issue, because he has worked 
extensively on this matter as well.
    Mr. Meadows. I thank the gentleman. I thank the gentleman 
from North Carolina. Congressman Mica would like me to yield 
just a couple minutes.
    Mr. Mica. Well, thank you. I will be very brief. I came 
late and I am leaving early.
    I would just like if you could provide to the committee, 
since it is such an important issue, any changes in the 
definition of wetland. I know by regulation you are changing 
the rules. It is going to have a huge impact. I have not been 
happy with any changes from either this committee or the 
Transportation Committee. If you could provide that timeline to 
the chair and the committee, I would appreciate it.
    I yield back.
    Mr. McHenry. Reclaiming my time. I ask unanimous consent 
that Congressman Meadows be yielded 50 seconds, since that 
subject matter didn't have anything to do with the water 
pollution issue we have in our district.
    Mr. Meadows. Without objection.
    Ms. McCarthy, I have worked extensively with Congressman 
McHenry and your office in Region 4. The frustration that I 
have experienced, if I was to be as passionate as the people 
that I represent this morning, it wouldn't be something that C-
Span could cover. Truly, the inaction of the EPA to protect the 
health and well-being of the citizens of Buncombe County at 
best has been thwarted and at worst has been ignored, and it is 
incumbent upon the EPA, if the mission is the health and well-
being of the citizens, that we get an action plan that not only 
talks about the short-term, but that cleans it up. This is a 
25-year problem that still exists today and cleanup hasn't 
started.
    So, with that, I would recognize Mr. Connolly, the 
gentleman from Virginia.
    Mr. Connolly. I thank my friend from North Carolina.
    You know, Ms. McCarthy, I thought I heard you say earlier 
to the chairman that the subpoena in question subpoenaed all 
communications regarding congressional inquiries between the 
White House and the EPA for a five-year period?
    Ms. McCarthy. That is correct.
    Mr. Connolly. And I think you said that was a pretty wide 
net.
    Ms. McCarthy. It is a pretty broad search.
    Mr. Connolly. Generally, when nets are that wide, what is 
going on is called a fishing expedition. Do I also understand 
that what is at dispute and why you were threatened with 
contempt at the beginning of this hearing, which, by the way, 
makes for an awfully nice headline, and I am sure the press at 
the press table will be once again accommodating and provide 
such a headline and, of course, substance with respect to EPA 
will be set aside or lost in the noise. It is kind of a pattern 
around here; get a witness, pillory the witness, interrupt the 
witness, threaten the witness, tell the witness she or he is 
not cooperating, interrupt the witness when the witness 
actually starts to have a relevant answer to a question, and 
focus often on the extraneous to make sure, however important 
that extraneous might be in its own right, but to make sure 
that we are not actually talking about something of substance 
like global warming. In fact, a warning at the beginning of 
this hearing that it is not about global warming, after one of 
the most momentous regulatory decisions in the history of the 
EPA and after a very interesting Supreme Court ruling which I 
want to talk to you about this week.
    So I am sorry you are getting the treatment; it is par for 
the course. We have done it, unfortunately, with a lot of 
consistency for the last four years. It is not pretty. My 
friend, Jackie Speier, read into the record yesterday even the 
speaker, Speaker Boehner, warning that witnesses coming before 
committees here in Congress need to be treated with respect. I 
find it really interesting, by the way, that we would also, 
some of us, apparently, would focus on people who have 
obviously abused or misused their position at the EPA by 
watching pornography or engaging in other things that are 
illegal or certainly inappropriate.
    It was just announced yesterday that a chief of staff to a 
member of Congress, Republican member, had to resign after it 
was revealed he had had a long-term affair with a porn star and 
had inappropriate pictures of his physique posted. And we have 
members of Congress who have been in the books of madames of 
brothels. We have had members of Congress selling or buying 
cocaine. We have our own peccadillos and we can focus on those 
too, and maybe we need a special prosecutor or maybe we need to 
be investigated as to how long did we know and whether 
Government property was used, and whether, when somebody 
learned of it, they appropriately responded in a relevant 
period of time.
    I say Congress itself is hardly clean here. And that 
doesn't mean we want to, in any way, shape or form, condone 
inappropriate activity, but to somehow pretend in our 
questioning that it is unique to you and to the EPA is really a 
bit much.
    If I may ask, in the time limited, about Justice Scalia's 
opinion this last week. Is it fair to say that the endangerment 
finding is now settled law after that ruling?
    Ms. McCarthy. I don't want to speak as a lawyer, sir, but 
it seems pretty settled to me, yes.
    Mr. Connolly. The court did nothing to roll back the 
landmark decision in 2007 that EPA has the authority to 
regulate greenhouse gas emissions. Would we maybe agree that 
EPA's authority to regulate greenhouse gas emissions is now 
settled law based on that opinion?
    Ms. McCarthy. It certainly appears that way to me, sir.
    Mr. Connolly. The court was looking specifically at EPA's 
program for regulating carbon pollution for large new 
industrial facilities. The court took issue with the EPA's 
legal approach but basically came very near to the same result 
in terms of which facilities could be regulated. Is that your 
understanding?
    Ms. McCarthy. It basically confirmed what we are already 
doing, yes.
    Mr. Connolly. Justice Scalia reportedly said, in announcing 
the opinion, it bears mention that EPA is getting almost 
everything it wanted in the case; it sought to regulate sources 
that it said were responsible for 86 percent of all greenhouse 
gases emitted from stationary sources. Under our holdings, EPA 
will be able to regulate sources responsible for 83 percent. Do 
you believe the Supreme Court's decision validates your efforts 
to responsibly regulate carbon emissions from large new 
facilities?
    Ms. McCarthy. Oh, very much so.
    Mr. Connolly. Does anything in the court's decision last 
week, or this week, really, impact your authority to cut carbon 
emissions from existing power plants?
    Ms. McCarthy. No, sir. It is a confirmation that EPA has 
been on the right track and that the Clean Air Act is an 
appropriate tool and that we can use it wisely and effectively.
    Mr. Connolly. And how many members of the Supreme Court 
joined Justice Scalia's opinion in that ruling?
    Ms. McCarthy. Seven to two, sir.
    Mr. Connolly. Seven to two. So a decisive opinion by the 
Supreme Court validating your role and the regulation just 
issued.
    I thank the chair and I thank you, Ms. McCarthy, for your 
service to your Country. By the way, where in Boston do you 
come from?
    Ms. McCarthy. I actually live in Jamaica Plain.
    Mr. Connolly. Jamaica Plain.
    Ms. McCarthy. Yes. I was born and brought up in Kenton.
    Mr. Connolly. All right. My family is in West Roxbury, and 
I can talk like that too. And I love the Red Sox; they are 
working good and I am hoping they win.
    Mr. Meadows. I thank the gentleman from Virginia.
    [Laughter.]
    Mr. Meadows. Needing no translator, we will go to the 
gentleman from Ohio.
    Mr. Jordan. I thank the chairman.
    Ms. McCarthy, I understand your agency is not the agency 
that ultimately decides, although you are pretty heavily 
involved. When do you think the American people can expect a 
decision on the Keystone pipeline?
    Ms. McCarthy. My understanding is that there are certain 
issues with the location of the pipeline that needs to be 
resolved, so I cannot anticipate that.
    Mr. Jordan. Do you know when the application for the 
Keystone pipeline was first submitted?
    Ms. McCarthy. No, I do not.
    Mr. Jordan. September 2008. Almost six years ago. You are 
familiar with the fact that the governor of Nebraska said he is 
fine with the new proposed route?
    Ms. McCarthy. It is not my decision, sir.
    Mr. Jordan. But don't you have a critical part in the 
ultimate decision? Didn't you guys do an environmental impact 
report from your agency which said there are no significant 
impacts to have this pipeline come through the United States?
    Ms. McCarthy. Actually, EPA's role is to comment on that 
impact reported. It actually was developed by the Department of 
State.
    Mr. Jordan. And you guys gave it a thumbs up, isn't that 
correct?
    Ms. McCarthy. EPA has just provided comments. We have no 
authority to do up or down on this one.
    Mr. Jordan. And your comments were clear back in 2011. It 
is my understanding August 2011 is when you gave the comments 
that there are no significant impact, no significant 
environmental impact.
    Ms. McCarthy. It is not clear to me that that was a comment 
from EPA.
    Mr. Jordan. Have you had any conversations with the State 
Department since that August 26, 2011 report, where you said no 
significant environmental impacts? Have you had conversation 
with the State Department about the Keystone pipeline? Do you 
know if your agency has?
    Ms. McCarthy. I personally have not. We have staff that----
    Mr. Jordan. In your time at the agency, have you had 
conversations with the State Department about the Keystone 
pipeline?
    Ms. McCarthy. I may have.
    Mr. Jordan. Have you had conversations with the White House 
about the Keystone pipeline?
    Ms. McCarthy. Yes.
    Mr. Jordan. How recently?
    Ms. McCarthy. Oh, we received information on the Keystone 
pipeline when the pipeline issue and the route question arose, 
and they actually sent a memo to us indicating that we should 
hold off on submitting our comments. I think that was probably 
four months ago or so.
    Mr. Jordan. So in the past four months. Since that time 
have you had any conversation with the White House and/or the 
State Department regarding the Keystone pipeline?
    Ms. McCarthy. Not that I can recall.
    Mr. Jordan. No conversation in the last four months with 
either the White House or the State Department?
    Ms. McCarthy. Not that I can recall.
    Mr. Jordan. How long do you think is appropriate for a 
decision to take? Is six years too long, too short? Can you 
hazard a guess at what point the Administration is going to 
say, okay, six years is long enough, we have to make a 
decision? How long do you think is an appropriate time frame?
    Ms. McCarthy. There is no timeline, sir.
    Mr. Jordan. There is no timeline?
    Ms. McCarthy. Not that I am aware of.
    Mr. Jordan. Do you think it is okay if it took eight years?
    Ms. McCarthy. It is not a project that I am proposing.
    Mr. Jordan. I am asking your opinion, though. The whole 
issue has been the environmental concerns. You head the 
Environmental Protection Agency. I am saying is eight years 
okay to wait after an application has been submitted?
    Ms. McCarthy. There is no timeline, sir.
    Mr. Jordan. Ten years would be okay?
    Ms. McCarthy. There is no timeline.
    Mr. Jordan. So forever. It could take 20, 30 years, and 
that would be fine.
    Ms. McCarthy. It is a project that goes through its own 
work to get the project developed. It goes through an impact 
statement development, EPA comments. We have nothing more to do 
with it other than a commenter on somebody else's project that 
is being evaluated by another agency.
    Mr. Jordan. And you said there is no significant 
environmental impact, and what I am trying to get at is----
    Ms. McCarthy. I do not believe that was actually what we 
said. We raised issues relative to the analysis that we thought 
could be improved. I think work has been done since then, but 
we have not seen----
    Mr. Jordan. One last thing. Just for the record, so in the 
last four months you have had no conversations, there has been 
no input from the EPA to the White House and/or the State 
Department regarding the approval or some kind of decision made 
on the Keystone pipeline application.
    Ms. McCarthy. I think you asked me about my own personal 
communication since we received the memo that we should hold 
off.
    Mr. Jordan. Right.
    Ms. McCarthy. I have not had personal conversations about 
this.
    Mr. Jordan. Well, then let's ask. Has your agency had any 
conversations with the White House? To your knowledge, has your 
agency had any conversation with the White House or the State 
Department in the last four months?
    Ms. McCarthy. I do not know the answer to that question, 
sir.
    Mr. Jordan. Okay.
    Mr. Chairman, I yield back.
    Mr. McHenry. I thank the gentleman from Ohio and we go to 
the gentlewoman from California, Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you.
    And thank you, Administrator McCarthy, for being here. I 
would like to, at the outset, point out that this committee has 
made 18 separate committee investigations of the EPA; that in 
making requests of the EPA, your office has provided 208,000 
documents; that you have testified three times; and that you 
have sat for a transcribed hearing. So I believe all of that 
suggests that you are a very compliant witness, that you have 
been very accommodating to this committee, and that for members 
to throw around the threat of contempt, when there has been 
this much attention paid by you and your agency to this 
committee, is without merit.
    Now, your clean power plan has gotten some rave reviews 
recently, none the least of which is from The Wall Street 
Journal, which says it strikes a balance between 
environmentalists and utilities in terms of what they all want. 
Nike and Levi and Starbucks have all commented on how they saw 
it as valuable.
    In California, unlike some of my colleagues on the other 
side of the aisle that suggest that curbing carbon dioxide 
emissions kills jobs, California, as you know, has a cap and 
trade environment in which we are operating, and in the last 
couple of years we boasted some of the greatest economic 
turnarounds ever. As long as cap and trade has been in effect, 
California now ranks in the top 10 States in employment growth 
and 4 of the top 20 U.S. regions for job growth. So I think in 
California we believe that you can have a healthy economy and a 
healthy environment, as well.
    So my question to you, with the understanding that the 
Government Accountability Office considers climate change to be 
high risk to taxpayers, it appears we have just an outstanding 
responsibility to address it. Would you tell us what you 
believe the relative costs and benefits of the EPA's proposed 
rule on existing power plants is?
    Ms. McCarthy. I am happy to do that. And I think I will 
just point out that the President indicates that this is a 
moral obligation to act, and I couldn't agree with him more.
    Ms. Speier. So does the Pope.
    Ms. McCarthy. The power plant rule that we put out, the 
proposal, looks at a $55 billion to $93 billion a year in 
benefits in 2030 alone, which far outweighs the costs that are 
estimated at $7.3 billion to $8.8 billion. This is clearly a 
winning opportunity, not just in terms of a cost benefit 
analysis for today, but in terms of the future it will provide 
for our children. And this is all about public health. It is 
all about protecting our children and keeping our communities 
safe today.
    Ms. Speier. In fact, your reference to public health is 
worth restating. I am told that anywhere between 2700 people to 
6600, on the high end, are not going to be subject to dying 
prematurely because of this plan, and that between 140,000 and 
150,000 children will not have asthma attacks as a result.
    Let me shift gears for a minute. In an interchange with one 
of my colleagues, who somehow objected to the fact that you 
didn't go immediately to the inspector general on the Beale 
case, you indicated that you went first to the Office of 
General Counsel. Can you explain to us why you did that?
    Ms. McCarthy. Well, originally my understanding and my goal 
was to make sure that he was appropriately utilizing his time, 
whether it was with us or with another agency. When I had 
concerns about him not being at EPA, as well as concerns about 
whether or not he was effectively working for another agency, I 
brought it to the----
    Ms. Speier. Can we say what the other agency is? I think it 
is----
    Ms. McCarthy. I believe it is the Central Intelligence 
Agency.
    Ms. Speier. All right. So that is why there was some 
mystery.
    Ms. McCarthy. But at that point in time I did not know that 
that arrangement wasn't real. I knew I had a problem. I went to 
the correct agency. That agency themselves brought in our 
Office of General Counsel and they also made a decision to go 
to our Office of Homeland Security because, programmatically, 
it is our liaison with the intelligence community. And the 
first question was did he have a relationship and an obligation 
to another entity, and when that progressed far enough for us 
to know that we had bigger problems than we originally 
anticipated, I brought to the issue to the inspector general 
and asked them to do a thorough investigation.
    And I have to say as much as there are questions about 
whether we support the OIG, is that clearly I do; the agency 
does. There is a culture of embracing the Office of the 
Inspector General, knowing that EPA needs to be high-
performing. Anything less wouldn't do service to the public and 
to protecting public health and the environment, which is 
clearly our mission, as well as our passion.
    Ms. Speier. Thank you for your leadership.
    I yield back.
    Mr. McHenry. I thank the gentlewoman from California.
    The chair recognizes the gentleman from Michigan, Mr. 
Walberg.
    Mr. Walberg. Thank you, Mr. Chair.
    Ms. McCarthy, in EPA's recent proposed rule to reduce 
greenhouse gas emissions, each State has a different target for 
emission reductions. That is right?
    Ms. McCarthy. That is correct.
    Mr. Walberg. The target was determined by analyzing four 
criteria, as I understand it, one of which was demand-side 
energy efficiency programs. What does demand-side energy 
efficient program mean?
    Ms. McCarthy. Well, basically it means looking at 
opportunities for consumers to retrofit their homes, to buy 
more energy-efficient appliances. It is everything you can do 
to reduce energy demand, which reduces draw on fossil fuel 
energy, which in turn reduces carbon pollution.
    Mr. Walberg. But my follow-up would be EPA does not, does 
not have authority to directly regulate demand-side efficiency 
programs, does it?
    Ms. McCarthy. Well, actually, we are not doing that with 
this rule, sir. We are actually regulating the pollution from 
the fossil fuel----
    Mr. Walberg. It doesn't appear that way. The fact is in 
establishing those subjective criteria for each State, you are 
attempting to regulate demand-side. I mean, the facts are the 
facts.
    Ms. McCarthy. I can understand where you would look at it 
that way, and actually we have specifically called out this 
issue in the rule itself. We are doing here what States 
actually asked us to do, was to allow them maximum flexibility 
to design their own plans on the basis of what they could do to 
reduce carbon pollution at the source, which is what we are 
regulating.
    Mr. Walberg. But directly pushing demand-side.
    Ms. McCarthy. No.
    Mr. Walberg. Let me go on. EPA has said the rule not 
increase the cost of electricity, but under this proposed rule 
the cost of electricity per kilowatt hour will actually 
increase. Isn't that correct?
    Ms. McCarthy. Well, we have indicated that the monthly cost 
of electricity at its peak will be somewhere around a gallon of 
milk cost. But we also recognize that when demand-side 
reduction is used, which is the easiest, quickest, and usually 
the preferred approach of States, that it actually reduces the 
bill itself, because while the rates go up slightly----
    Mr. Walberg. But it reduces it based upon Americans using 
less electricity; not the fact that the cost of electricity 
goes down, but making it impossible for Americans to use 
electricity as they ought to be allowed to use electricity.
    Ms. McCarthy. Actually, the amount of increase in the rates 
is well within the range of fluctuation that we have been 
seeing. So we are quite convinced----
    Mr. Walberg. Through scarcity. Through scarcity. That is 
happening in my district.
    Ms. McCarthy. I am sorry?
    Mr. Walberg. That is through scarcity. The push is to 
reduce electricity by saying to the consumer don't use 
electricity.
    Ms. McCarthy. Actually, no.
    Mr. Walberg. It is not by reducing the cost of production 
of it.
    Ms. McCarthy. It is actually by providing them more 
opportunities to reduce waste, which I think----
    Mr. Walberg. Well, does the Clean Air Act give EPA the 
authority to regulate American electricity consumption?
    Ms. McCarthy. We are not suggesting that we do regulate 
that. We are regulating pollution at the source.
    Mr. Walberg. Well, now that I got that off my chest, 
because we are entitled to our opinion, but not to the facts, 
and the facts are very much different than that when we are 
pushing consumption as the issue; and in America that isn't the 
normal way of doing it.
    Let me go back to some of the Administration questions that 
I have concern with.
    Does Beth Craig, who served as former deputy assistant 
administrator in the EPA's Office of Air and Radiation, still 
work and receive salary from the EPA?
    Ms. McCarthy. Yes, she does.
    Mr. Walberg. You, of course, we already know from 
testimony, are aware that she cost the Government by not 
overseeing the special agent man, Mr. Beale, at least $200,000 
of cost to the taxpayers that were fraudulent. In your agency's 
website it says, To meet our mission as a high-performing 
organization, EPA must maintain and attract the workforce of 
the future, modernize our business practices, and take 
advantage of new tools and technologies.
    Can you explain how Beth Craig, a current EPA director who 
has cost the Government nearly $200,000, is part of the 
workforce of the future?
    Ms. McCarthy. Well, I want to first point out, sir, that 
there is no indication, and the OIG has confirmed this, there 
is no evidence that she actually contributed to any fraudulent 
activity or she was involved in any. Now, clearly Beth Craig is 
now being looked at in terms of whether or not she diligently 
looked at time and attendance sheets and travel. That 
administrative process is proceeding.
    Mr. Walberg. The OIG confirmed $200,000, and her management 
of that, her administration of that allowed that to happen over 
the course of a decade.
    Ms. McCarthy. Whether or not Beth did----
    Mr. Walberg. And she is still being paid by the taxpayer. 
And if that is the workforce of the future----
    Ms. McCarthy. Well, she has not been accused of any 
fraudulent activity. The question was whether she was diligent 
enough----
    Mr. Walberg. And I am over time, I yield back, but the 
question is why not.
    Mr. Meadows. I thank the gentleman from Michigan.
    The chair recognizes the gentleman from Arizona, Dr. Gosar.
    Mr. Gosar. Thank you very much.
    Administrator McCarthy, in August 2011, President Obama 
acknowledged in a letter to Speaker Boehner that seven new 
proposed regulations would each cost the economy at least a 
billion dollars annually. In fact, out of those seven, four of 
those regulations were put forth by the EPA. I repeat, four. 
How many new regulations has the EPA proposed this year that 
will cost the economy at least a billion dollars annually?
    Ms. McCarthy. I don't have that figure, sir.
    Mr. Gosar. Can you provide those names and those numbers 
and estimates to the committee?
    Ms. McCarthy. Of course.
    Mr. Gosar. Now, as you know, Congress has repeatedly 
rejected previous cap and tax energy plans proposed by the 
President and his big government allies, knowing he can 
lawfully enact a carbon tax plan, he can't, he has instructed 
you to circumvent Congress and to impose these new regulations 
by fiat. Do you believe the EPA should follow the intent of 
Congress when implementing new regulations?
    Ms. McCarthy. I believe that EPA is actually following the 
law that Congress enacted in a way that we are supposed to 
implement it, and I think that has been confirmed by the 
Supreme Court every time it has been asked of them relative to 
carbon pollution.
    Mr. Gosar. Well, 83 percent, so remember that carefully 
here. And I am glad you bring that up. So will you return the 
new waters of the U.S. proposed rule to your agency in order to 
address the legal, scientific, and economic deficiencies of 
that proposal?
    Ms. McCarthy. I am sorry, I didn't understand the question.
    Mr. Gosar. So citing the Supreme Court again, I want to 
just give you a little background. The Supreme Court has issued 
four decisions that reinforce the limits of the EPA's 
jurisdiction on waters of the U.S.
    Ms. McCarthy. Yes.
    Mr. Gosar. Yet you seem to have another effect that you 
want to violate this with this current set of rules. So I am 
asking you will you return the new waters of the U.S. proposed 
rule to your agency to address the legal, the scientific, and 
economic deficiencies of your proposal?
    Ms. McCarthy. Well, it is out for public comment now, sir, 
and it was specifically put out in order to address the 
concerns raised by the Supreme Court in terms of the 
jurisdiction of the Clean Water Act.
    Mr. Gosar. Once again, it has been identified legally with 
economic deficiencies and scientific deficiencies, yes it has. 
There are four Supreme Court rulings. You just acknowledged the 
gentleman from Virginia that the Supreme Court had the rule of 
the land. There are four jurisdictions from the Supreme Court 
that limit the EPA and its jurisdiction of the waters of the 
U.S. Will you return it to your agency?
    Ms. McCarthy. I am happy to have more discussions about 
this, sir, but the reason we put out the waters of the U.S. was 
exactly to address the issues that the Supreme Court has put 
squarely in front of us.
    Mr. Gosar. I don't think that is true.
    Ms. McCarthy. Okay.
    Mr. Gosar. Furthermore, David Sundling, the founding 
director of the Berkeley Water Center and professor in the 
College of Natural Resources of the University of California, 
Berkeley, found major flaws in your agency's economic analysis 
of the waters of the U.S. proposed rule and claimed the errors 
in the study are so extensive as to render it unusable for 
determining the true costs of the proposed rule. Once again, 
does your agency have any plans to correct this flawed economic 
analysis? When you put stuff out, you have to cede proper 
information to the public, and you are not.
    Ms. McCarthy. Certainly we are in a comment period where we 
will take a look at that criticism and whether or not it is 
substantive and how we would address it. We have recently 
extended the comment period 90 days exactly because we know 
that there are concerns raised about the proposal and we want 
to provide clear public opportunity to comment on this so we 
can understand the issues that have been raised.
    Mr. Gosar. It is interesting that you keep doing that, but 
you have to provide the public proper information, and this is 
completely flawed.
    Now, I have limited time.
    Ms. McCarthy. Okay.
    Mr. Gosar. Your greenhouse gas rule proposed to threaten 
the close of the Navaho Generating Station and kill 1,000 jobs 
in Page, Arizona. Approximately 80 percent of those positions 
are good paying jobs for Native Americans in a very rural area. 
Besides being a critical employer, the Navaho Generating 
Station provides the power that delivers more than 500 billion 
gallons of Colorado River water to more than 80 percent of 
Arizona's population. Do you believe, yes or no, that the 
Navaho Generating Station should be closed?
    Ms. McCarthy. I have no such belief, no.
    Mr. Gosar. Okay. Do you share my belief that this power 
plant is a special situation due to the Tribal Indian 
Congressional Dialogue Trust obligations that were constituted 
by Congress in directing the construction, the direction, the 
obligations, water settlements, labor law directives associated 
with that plant?
    Ms. McCarthy. My understanding of that plant is it is one 
of the most complicated situations that we have to deal with, 
so it is fairly unique, yes.
    Mr. Gosar. It is very unique because of where it sits on 
tribal land and congressional oversight.
    Ms. McCarthy. I agree. Yes.
    Mr. Gosar. So it deserves special attention instead of what 
it has been getting lately.
    Ms. McCarthy. Actually, sir, we have been giving it special 
attention because the proposal that we put out on our clean 
power plan actually didn't speak to the Navaho Generating 
Station. We actually left the tribal units so that we could do 
a much more extensive analysis. There are three, one of which 
is Navaho.
    Mr. Gosar. I understand. And in the trust obligations the 
jurisdiction over the tribes in those contracts is this body 
here, Congress. Have you directed those conversations with 
Congress as well?
    Ms. McCarthy. Actually, I don't know what conversations you 
are referring to. EPA definitely has been given the obligation 
to regulate pollution from that facility if we feel like it is 
necessary for public health. We have actually worked through a 
lot of tough issues with Navaho Generating Station, working 
with the Navajos, working with the other tribes that have an 
interest, the Hopi and the Healer River. We have actually 
worked very closely with the State, Salt River project. I 
understand how complicated this issue is. We have worked 
through some pretty big challenges in creative ways and I am 
sure we can work through this when the time comes. But we have 
not yet proposed any regulation of carbon pollution from that 
facility.
    Mr. Gosar. Well, I would caution the lady that there is 
also another jurisdictional aptitude, and that is this body, 
this body of Congress that oversees the trust obligations of 
the tribal entities, and that has not occurred. So, fyi, 
include us.
    I yield back the balance of my time.
    Mr. Duncan. [Presiding.] Thank you very much.
    Mr. Collins is next.
    Mr. Collins. Thank you, Mr. Chairman.
    Thank you for being here this morning. I know there are a 
lot of management issues at EPA, which has been discussed, and 
I know there is a lot more of oversight from basically John 
Beale to Pebble Mine to employees not being fired for watching 
pornography, all these other issues. But I want to really take 
another step, take my five minutes and sort of continue some of 
the conversation you just had, but from a different 
perspective, from the northeast order perspective about the 
Clean Water Act and affecting the waters of the United States.
    The rule would vastly expand EPA's regulatory jurisdiction 
and in turn would impugn businesses and families in Georgia's 
9th Congressional District and across the Country. If this rule 
is allowed to go into effect, basically dry ditches, rainwater 
runoffs, low lying areas, and seemingly any area that would 
hold water would be subject to EPA's jurisdiction. This would 
force northeast storages, cattle ranchers to move their herds, 
chicken farmers to move their chicken houses, and average 
citizens to sell to the EPA for permission to build on their 
land.
    Actually, it takes it a step further, and I think this is 
the concern that I have. Not just the production being done 
now, but in many of my areas, my farmers, my grandparents, who 
dairy farm, and I know there is an example just down the road 
from where I live, where a gentleman has 100 acres of land. 
Most of it grew up in dry gulches like we most know. But under 
these kind of rules basically would make his land unsellable 
because of this process. And this is a very real concern to 
what we have.
    So just a question, administrator. Do you have a dollar 
value on the impact this proposed rule would have? Any kind of 
a guess?
    Ms. McCarthy. Actually, I do not believe there was an 
economic analysis associated with this because it is a 
jurisdictional question. But I would point out--and I am happy 
to have further conversations in Georgia about this--we have 
done, I think, a very good job at trying to not just recognize 
the exemptions that exist in the Clean Water Act relative to 
agriculture, but to try to expand those in this, and to not 
write this in a way that would expand the jurisdiction of the 
Clean Water Act and, in fact, try to make it narrower on the 
basis of real science. So I do think there is a large gap 
between our intent and I think how we wrote it and how it is 
being perceived; and EPA has a big job to do to close that gap.
    Mr. Collins. And I think what you have stated here is the 
dialogue that goes on that I have all the time with our 
constituents that I have been facing myself, and I think it 
goes back also to an issue here of and you talked about it is a 
jurisdictional issue, not a cost issue. Well, I think that is 
the problem that we are having right now, is that there is 
regulation after regulation or jurisdictional fights, whatever 
you want to call it, but the bottom line is it affects the 
taxpayers, it affects the people who fund the Government who 
want to say why is the Government so affecting in my life, 
especially in areas in which they, frankly, for some of our 
even given some of the Supreme Court rulings, there is an 
overreach here. I do believe there is a balance between 
carrying out your role as an administrator and then also 
balancing the intent of Congress, and I think it goes to 
Congress being not very good at giving you direction.
    Ms. McCarthy. I appreciate your concerns, and the more that 
we can actually talk and even meet with your constituents to 
understand where it feels like two ships passing in the night, 
and I need to bring those together and we have to have a better 
understanding. And I am entirely open to comment on this. That 
is why we extended the comment period.
    Mr. Collins. I have a couple of quick questions I would 
like to get in.
    Under the proposed rule, it is understood that farmers will 
only qualify for Section 404 exemptions if they meet national 
resources conservation and NRCS standards that are currently 
optional. Yes or no, is that true or false?
    Ms. McCarthy. No, it is not.
    Mr. Collins. It is false. Okay, under current law would a 
farmer be required to the NRCS compliant in order to be 
exempted? Do they have to currently?
    Ms. McCarthy. No.
    Mr. Collins. So no. If a farmer or rancher has questions on 
how this rule would affect their property or operation, how 
does the EPA respond to these questions?
    Ms. McCarthy. We work collaboratively usually with USDA and 
the farmer to understand what their concerns are and to address 
them so they can continue to farm appropriately.
    Mr. Collins. What is the average response time?
    Ms. McCarthy. I don't have an answer to that, sir.
    Mr. Collins. If you don't respond in a timely manner, is 
that farmer or rancher protected from fines or punitive actions 
by the EPA if they are not in compliance?
    Ms. McCarthy. Could I just clarify one thing?
    Mr. Collins. Go ahead.
    Ms. McCarthy. EPA is often not the permitting entity here, 
so it is very often a State or Army Corps.
    Mr. Collins. Well, you have hit something for me perfectly. 
I believe this is more of a State issue, and not a national EPA 
issue. We have just probably a fundamental difference in 
national; in fact, EPA exposure and States are doing some of 
this. I think you perfectly hit it for me, but we just honestly 
disagree.
    Ms. McCarthy. I actually don't think we have any 
disagreement in hopefully how we do this rule.
    Mr. Collins. Except maybe in the fact that I don't believe 
your position should even exist. I think the States can do it 
now.
    Ms. McCarthy. Well, that may be a difference between us.
    Mr. Collins. Now we have an interesting issue. But I just 
want you to know----
    Ms. McCarthy. It might be a fundamental difference as well.
    Mr. Collins. That is a fundamental difference at that 
point. But I have already commented in opposition to this 
proposal. I know that many in Georgia in my district are. But I 
have one quick question, and maybe you can clarify this for me. 
In your conversation with my good colleague, Ms. Speier, just a 
moment ago, did I hear you say that you went to the CIA first?
    Ms. McCarthy. No, I never talked to the CIA about anything, 
not directly, no.
    Mr. Collins. Okay. I believe I heard you say in discussion 
on the bill that you went to the CIA first.
    Ms. McCarthy. No. What I indicated was I went to our office 
that deals with our human resource issues. They actually 
brought in our Office of General Counsel. They referred this to 
our Homeland Security Office, which is the liaison with the 
intelligence community. They actually communicated with the CIA 
in seeking verification of whether or not John Beale worked for 
them in some way and under what circumstances that occurred.
    Mr. Collins. Just wanted to make sure for the record that I 
heard you correctly.
    Mr. Chairman, I yield back.
    Ms. McCarthy. Could I just answer one question? I want to 
make sure----
    Mr. Meadows. [Presiding.] The time has expired, but, yes, 
you can answer.
    Ms. McCarthy. I just want to clarify. When we were talking 
about the Clean Water Act exemptions, I want to make sure that 
I understood your questions, because the Clean Water Act 
exemptions clearly indicate where there is agricultural 
exemptions, the additional work that we tried to do with USDA 
to identify other work that was exempted, as long as it is 
conservation efforts working with USDA, was in addition to 
those exemptions. And I just wanted to make sure I answered you 
correctly.
    Mr. Collins. And I appreciate that.
    Mr. Chairman, if I can have just a moment.
    Because this is the problem, and it exists, because you 
have people who have real issues and real problems, they see 
EPA from State level or national level. They can't get the 
answers, and I think this is the problem that develops around 
this whole thing. Again, we forget the end result is not about 
a building up here in Washington that turns out rules; it is 
about the people that get up every day and want to have their 
own way to do their living and make their life, and do with as 
least interference in the way that they can.
    Mr. Chairman, I appreciate it.
    Ms. McCarthy. And I also understand that there was an 
economic analysis done with this rule, so I apologize. We will 
get that to you.
    Mr. Meadows. Okay, the time has expired. I thank the 
gentleman from Georgia.
    The chair recognizes the gentleman from Michigan, Mr. 
Bentivolio.
    Mr. Bentivolio. Thank you very much, Mr. Chairman.
    Administrator McCarthy, thank you for being here today. Do 
you know the current location former EPA employee Phil North?
    Ms. McCarthy. No, I do not, sir.
    Mr. Bentivolio. Administrator McCarthy, are you aware that 
Mr. North left the country, traveling to New Zealand, when this 
committee had a pending request to voluntarily attend a 
transcribed interview?
    Ms. McCarthy. No, sir, I don't know that.
    Mr. Bentivolio. Has the EPA produced to the committee all 
of Mr. North's emails since 2002 regarding his work on the 
Pebble Mine in Bristol Bay?
    Ms. McCarthy. We have submitted all that we have 
identified, and we continue to search.
    Mr. Bentivolio. Okay. Are you aware that the EPA cannot 
produce all of Mr. North's emails to the committee because his 
hard drive crashed and the EPA did not back up Mr. North's 
emails?
    Ms. McCarthy. I am aware that Mr. North was stationed 
actually in a pretty remote area of Alaska. We are aware and we 
notified the committee as soon as we were aware that there are 
some gaps, but we have already submitted a significant amount. 
So it is not clear how much we might have missed, but we are 
looking at it.
    Mr. Bentivolio. Let's see, I got the IRS and the EPA. What 
is it with bureaucrats and Government agencies when this 
committee is investigating, trying to find out about their 
personal emails or emails on an EPA or Government computer, the 
hard drives crash?
    Is the EPA in possession of Mr. North's failed hard drive?
    Ms. McCarthy. I am not aware. I don't know, sir, but I can 
find out.
    Mr. Bentivolio. Did Mr. North ever receive a bonus?
    Ms. McCarthy. I don't know the answer to that question.
    Mr. Bentivolio. Did John Beale, fraudulent CIA, EPA 
employee get a bonus?
    Ms. McCarthy. Not under my watch. I don't know what 
happened prior to that.
    Mr. Bentivolio. Ever?
    Ms. McCarthy. I don't know.
    Mr. Bentivolio. Okay. Did Beth Craig, who lied to special 
agents investigating John Beale, get a bonus?
    Ms. McCarthy. I don't know exactly.
    Mr. Bentivolio. How about the employee who had 7,000 
pornography files on his EPA computer ever receive a bonus?
    Ms. McCarthy. I don't know, sir.
    Mr. Bentivolio. Susan Strassman-Sundy, who produced no work 
in the last five years working from her home, did she ever 
receive a bonus?
    Ms. McCarthy. I do not know her or the facts of that.
    Mr. Bentivolio. Ms. Renee Page, selling jewelry and weight 
loss products from her EPA office, get a bonus?
    Ms. McCarthy. I do not know the answer to that.
    Mr. Bentivolio. Unnamed EPA employee receiving paychecks 
while in a nursing home for two years. By the way, is he still 
getting paid?
    Ms. McCarthy. I do not know the answer to that question, 
sir. I don't know the issue you are referring to.
    Mr. Bentivolio. I have working middle-class Americans in my 
district who are struggling to make ends meet, and employees at 
the EPA are playing James Bond, watching porno movies on EPA 
computers at EPA time. Nothing is getting done. They are 
struggling and you don't know where your money is being spent.
    Thank you very much, Mr. Chairman. I yield back.
    Mr. Meadows. The gentleman yields back.
    The chair recognizes the gentleman from Tennessee, Mr. 
Duncan.
    Mr. Duncan. Well, thank you very much, Mr. Chairman. Mr. 
Chairman, I think most of us, at least on this side, realize 
that there is more anger and resentment and disgust with the 
Federal Government probably today than any time in our history 
because almost every day people are reading stories or hearing 
stories about tremendous, ridiculous waste, inefficiency, over-
regulation by the Federal Government. Also, I think they resent 
the fact that almost nobody or very few in the bureaucracy have 
ever spent any time running a small or medium-sized business, 
and they have no idea or understanding of the pressures, how 
hurtful it can be to have to lay off people during slow times, 
and things of that nature.
    But the disgust I think probably hit its height when they 
heard and read about a high EPA up official receiving $900,000 
over a several year period for doing no work and even taking 
paid vacations on the taxpayer dollar; and I want to get back 
into that in just a moment. We were given background material 
that says before the President nominated McCarthy to head the 
EPA, she served as assistant administrator of the Office of Air 
and Radiation from 2009 to 2013. While McCarthy was aware of 
Beale's frequent absences and lack of work product, she never 
adjusted Beale's pay or discontinued the unauthorized retention 
incentive bonuses which made Beale the highest paid employee in 
OAR during her tenure.
    And then it goes on, In fact, EPA officials wrote an entire 
report entitled John Beale Pay Issues in July 2010, which 
McCarthy was aware of by at least January 2011. Despite 
recommendations to cancel Beale's bonuses, McCarthy halted the 
internal revenue and permitted the unauthorized bonuses to 
continue. Both McCarthy and Bob Perciasepe attended Brenner and 
Beale's joint retirement cruise in 2011.
    And now we hear Ms. McCarthy say that Mr. Beale received no 
bonuses. But we have an email here, and I think they put up on 
the board there, in which this was Ms. McCarthy's response to 
an OAR official asking, ``Has Craig''--that is Craig Hooks--
``gotten back to you about the pay issue yet? I am eager to 
move ahead with canceling the bonus.'' McCarthy replied, No, he 
hasn't. It is now in his hands, as far as I am concerned, 
showing, really, a hands off attitude about bonuses for this 
man who did no work and who defrauded the taxpayers out of 
$900,000. And the title of this hearing is Management Failures: 
Oversight of the EPA.
    And that, I think, shows why this hearing was necessary. 
But I will tell you, Ms. McCarthy, as concerned as I am about 
that, I am more concerned about something else. President Obama 
said, a few years ago, he said, Under my plan of a cap and 
trade system, electricity rates would necessarily skyrocket, 
regardless of what I say about whether coal is good or bad, 
because I am capping greenhouse gases.
    The problem with that is, and we don't have enough people 
at the EPA because they have these high-paying jobs, they don't 
understand that a lot of people in my district and around the 
Country have trouble paying their utility bills And if we 
triple or quadruple these utility bills, it is going to hurt a 
lot of poor and lower income and working people; and I don't 
think the people at the EPA keep that in mind and I don't think 
they realize, too, that if you come out with more and more 
regulations, it helps the big giants. It helps the big, big 
companies, but it hurts the little guys.
    Overregulation by the Federal Government, not only by the 
EPA, but a lot of it by the EPA, a lot of it has run small and 
medium-sized businesses out of business or forced them to merge 
or forced them to go to other countries. We have sent millions 
of good jobs to other countries. For the last 40 or 50 years, 
we have ended up now with the highest paid waiters and 
waitresses in the world, and a lot of it, in fact, I think the 
majority of it is because of environmental overregulation and 
red tape.
    That is all I have to say, Mr. Chair.
    Ms. McCarthy. Might I clarify something?
    Mr. Duncan. Yes, ma'am.
    Ms. McCarthy. I just wanted to clarify that the bonus issue 
I was answering I didn't realize that they were talking about a 
retention bonus. And that bonus I did not give; it was actually 
awarded earlier. It continued to be on the payroll. I sought 
that to be off the payroll on numerous occasions. And that is 
one of the issues we are trying to get compensation back.
    Mr. Duncan. Well, you were the head of this OAR in 2009, 
right?
    Ms. McCarthy. I did, and I alerted----
    Mr. Duncan. And 2010?
    Ms. McCarthy. My understanding----
    Mr. Duncan. And 2011.
    Ms. McCarthy. My understanding at that point----
    Mr. Duncan. And Mr. Beale was employed by that agency, the 
highest paid employee of that agency----
    Ms. McCarthy. Right.
    Mr. Duncan.--during 2009, 2010, and 2011.
    Ms. McCarthy. It was just my recollection that when I 
brought this to his attention, he advised me not to take action 
because he needed to communicate it to the Office of Inspector 
General, and that I should not alert Mr. Beale to any potential 
investigation. That is what that email reflected.
    Mr. Duncan. If the chairman would allow me just one other 
thing, though. I will tell you this. Johnny Pesky was a real 
close friend of mine, and he has had me in the dugout at Fenway 
Park.
    Ms. McCarthy. Really?
    Mr. Duncan. And I was glad a few times, and I am sure if 
are a Red Sox fan you have heard of Johnny Pesky.
    Ms. McCarthy. I sure have.
    Mr. Duncan. He was a great man. You and I can at least 
agree on that.
    Ms. McCarthy. He is spoken in the same breath as Ted 
Williams, and it is great. Thank you.
    Mr. Meadows. The gentleman from Tennessee's time has 
expired.
    The chair would recognize the gentlewoman from Wyoming, 
Mrs. Lummis.
    Mrs. Lummis. Thank you, and welcome, Ms. McCarthy.
    Ms. McCarthy. Thank you.
    Mrs. Lummis. We have been waiting, as I understand it, for 
about seven months for a response about the scientific and 
other bases for regulations that will increase energy costs on 
low and middle income Americans, as well as the cost of doing 
business, and will lead to some job losses, certainly; and I am 
curious. You received a set of science committee questions for 
the record, after you testified last November. When will you be 
responding to those?
    Ms. McCarthy. Actually, if this has to do with House 
Science and Technology, we did receive a subpoena. We did 
respond to that and we believe that issue has been closed out.
    Mrs. Lummis. And could you tell me when that was? Because I 
am on the Science Committee, as well as this committee. These 
were questions for the record submitted to you on December 17th 
regarding the peer review process behind the new source 
performance standard, the integrity of the EPA's ongoing 
hydraulic fracturing study, revisions to ozone regulations, sue 
and settle, lack of data transparency, and some other----
    Ms. McCarthy. I am sorry, I didn't realize that you were 
asking about questions for the record, which they are in the 
process now. I will get back to you in terms of the timing on 
responding to those.
    Mrs. Lummis. Okay.
    Ms. McCarthy. I apologize, I didn't realize what you were 
referring to.
    Mrs. Lummis. And I apologize, I am just sort of breezing in 
from another committee.
    Ms. McCarthy. That is okay.
    Mrs. Lummis. These were given to you on December 17th of 
2013 and were questions for the record. I am the Energy 
Subcommittee chair----
    Ms. McCarthy. Thank you. I will look into it and we will 
get right back.
    Mrs. Lummis. That would be great. Any chance we could hear 
back by July 14th, about three weeks from now?
    Ms. McCarthy. Let me see what the status is and we will get 
back to you by the end of the day in terms of what we think our 
timeline might be. I have certainly noted that you are 
interested in having it by then.
    Mrs. Lummis. Thank you very, very much.
    Another question. Under the EPA's proposed rule to restrict 
carbon emissions from existing power plants, does the cost per 
kilowatt hour go up or down?
    Ms. McCarthy. The cost per kilowatt hour by 2030 is 
estimated to go up slightly in some areas.
    Mrs. Lummis. Okay. And those areas are areas that are 
currently----
    Ms. McCarthy. Actually, it depends. What we do is we look 
at what kind of response we anticipate States to take, but one 
of the issues that we are looking at, and clearly reliability 
and affordability of the energy supply is one reason why we did 
this as flexibly as possible with individual State standards 
and individual plans, was to hear back during the comment 
period on what States thought was their path forward so we 
could do a good job on the final in estimating those costs.
    Mrs. Lummis. Now, is it true that in order to make the 
claim that the rule lowers energy cost, the EPA has to rely on 
an assumption that, overall, electricity consumption will be 
reduced?
    Ms. McCarthy. It is actually recognizing that over that 
period of time the most cost-effective strategy to achieve the 
reductions at these fossil fuel plants is to actually look at 
demand reduction; and that provides an opportunity not just for 
reduced carbon, but also continued opportunity for economic 
growth. This is not a cap program; this is an intensity goal. 
So it doesn't limit the ability to grow economically; it looks 
at how you produce energy in a way that says low carbon, less 
waste, better use of low carbon sources.
    Mrs. Lummis. So in order to say that the rule lowers energy 
costs, you have to assume that consumers will be paying more 
for electricity per kilowatt hour, but using less power 
overall, is that true?
    Ms. McCarthy. We don't have to make those assumptions. We 
are recognizing that there will be some fluctuation in cost; it 
will be fairly minor over time. But we also recognize that this 
concern about affordability, and if you balance the way in 
which States have to achieve these standards, they could do it 
in a way that actually lowered bills for people and consumers 
in the end of this process.
    Mrs. Lummis. Well, I am terribly concerned about how this 
rule is going to affect consumers in Wyoming. There are so many 
middle and lower income people just trying to make ends meet, 
and when the cost of electricity goes up over our current coal-
fired power plants, most of which are fully depreciated and are 
being retired prior to the end of their useful life.
    For example, because of these rules, the Neal Simpson Plant 
in Campbell County, Wyoming, its Unit 1 was recently retired 
fully 10 years before its useful life had expired. And had it 
been able to carry on for the entirety of its useful life, the 
consumers in Wyoming would have been able to enjoy lower 
utility rates. Now it will be replaced by a higher cost brand 
new plant and, hence, my concern about the average American 
consumer.
    Thank you, Mr. Chairman. I yield back. I apologize for 
running over.
    Mr. Meadows. I thank the gentlewoman from Wyoming.
    The chair recognizes himself to ask a few questions, Ms. 
McCarthy.
    As I stated earlier, I could go on and on CTS and we would 
be here long after. It has been a long morning, so I am going 
to abbreviate some of those. Dot Rice and CTS have become a 
household name over the last 13 or 14 months for me. It didn't 
start on your watch, it didn't start on my watch, but it will 
finish on our watch; and I need your assurances that not only 
will we do additional testing, but that we will get the site 
cleaned up. Can I have your assurances of that today?
    Ms. McCarthy. Well, that will be our shared goal, sir.
    Mr. Meadows. I know that is your goal, but it has been your 
goal for 25 years that it would be cleaned up, and nothing has 
started. Do we have your assurances that it will get cleaned 
up?
    Ms. McCarthy. I can't give you a timeline for that, sir. It 
would be something totally out of my control.
    Mr. Meadows. So let me ask you what is a reasonable amount 
of time? Knowing that the public health is your central focus.
    Ms. McCarthy. It is.
    Mr. Meadows. And this has been 25 years contaminating the 
groundwater and air of people that I represent. How long does 
it take to come up with an action plan?
    Ms. McCarthy. I don't know in this instance. I understand 
it is complicated, but I also understand your frustration. Why 
don't we just get together and figure out how you can be 
confident that we are moving with as much speed and as 
diligently as we can?
    Mr. Meadows. Okay. Ms. Rice has given me 10 questions that 
I need answered. If I submit those to you, can you have those 
back to this committee within the next 30 days?
    Ms. McCarthy. I will do the very best I can.
    Mr. Meadows. So let me go on a little bit further. Today we 
have talked about the EPA mission and how important it is. So 
let's look at Superfund sites. There are currently 1,164 sites 
on the Superfund priority list. Eighty-one percent of those 
have been there over 20 years. Eight-one percent of them. So we 
have been dealing with most of those sites for over 20 years. 
If the EPA is very effective of cleaning up what we know are a 
priority because it is a priority list, and it is toxic, many 
of them toxic, is it not hypocritical that we continue to pass 
new rules trying to do something and clean up the air and water 
when we have known areas that we are not cleaning up? What is 
the issue?
    Ms. McCarthy. Well, I think we try to address the 
priorities as they come up. I don't want folks to think that 
Superfund sites have made no progress that have been in the 
system for a long time.
    Mr. Meadows. Well, I have the records. Three hundred sixty-
three of them have come off of the list out of 1527.
    Ms. McCarthy. Right. That is a complete cleanup.
    Mr. Meadows. So that is a batting average of 237. Even the 
Boston Red Sox wouldn't trade a draft pick for that.
    Ms. McCarthy. Well, one of the challenges we face is to 
make sure that we take care of the immediate impacts on public 
health. One of the first things----
    Mr. Meadows. But you haven't done that in my district.
    Ms. McCarthy. Well, we need to talk about that. But one of 
the first things we do at these Superfund sites is to ensure 
that they are not continuing to pose a health threat----
    Mr. Meadows. But you didn't do that in my district.
    Ms. McCarthy.--while we work long-term to clean it up.
    Mr. Meadows. You know. You have been briefed on mine 
because they have told me in Region 4 they briefed you before 
you were coming here today.
    Ms. McCarthy. Well, they sent me a couple pages, yes.
    Mr. Meadows. You know that that didn't happen, is that 
correct?
    Ms. McCarthy. I know that there has been some immediate 
effort to take care of some vapor intrusion issues, and I think 
that was a long process.
    Mr. Meadows. Only in the last 60 days.
    Ms. McCarthy. We will work together. I don't know what to 
tell you.
    Mr. Meadows. Do I have your commitment today that you will 
work with me and keep my office informed before you inform the 
WLOS or any of the others? Because I am learning about it from 
the news media, and I have been working on this for 13 months. 
Do I have your commitment today?
    Ms. McCarthy. We will do our best job to have no surprises 
for you, sir.
    Mr. Meadows. Do I have your commitment, yes or no?
    Ms. McCarthy. We will do the best job we can.
    Mr. Meadows. Okay, so I would take that as a no.
    Ms. McCarthy. No. In the issue that you are referring to, 
it had to do with some private information----
    Mr. Meadows. No it did not, Ms. McCarthy.
    Ms. McCarthy. That was my understanding.
    Mr. Meadows. I know that is what they are telling you. What 
is private about the EPA going to do a test? It has nothing to 
do with tax records; it has nothing to do with health. It has 
to do with our actions. There is no constitutional right to 
privacy for that, Ms. McCarthy.
    Ms. McCarthy. We do everything we can to not surprise the 
folks that represent the people----
    Mr. Meadows. Well, I would disagree with you. So let me go 
on a little bit further.
    Ms. McCarthy. Let me tell you we will do better.
    Mr. Meadows. Okay.
    Ms. McCarthy. I mean, I will work hard to do better. I 
don't want surprises because I know this is an issue----
    Mr. Meadows. Well, it will continue to come up until we get 
it cleaned up.
    Ms. McCarthy. Okay.
    Mr. Meadows. Okay. So let me go back to the public mines 
that Mr. Bentivolio brought up. He brought up this thing about 
Pebble Mine in terms of--it sounds like we have another missing 
hard drive, is that correct, Ms. McCarthy?
    Ms. McCarthy. I do not know whether that is the case.
    Mr. Meadows. Does your counsel behind you? I think he is 
shaking his head yes. Do we have a missing hard drive?
    Ms. McCarthy. I don't believe this is a missing hard drive 
issue. There is a challenge getting access to the data on it--
--
    Mr. Meadows. So is it a crushed hard drive? What does your 
counsel tell you? I mean, you brought your counsel here. I 
assume he is here to tell you.
    Ms. McCarthy. He just told me we are having trouble getting 
the data off of it and we are trying other sources to actually 
supplement that, but we are working through the issue.
    Mr. Meadows. So do you believe you can get the data?
    Ms. McCarthy. We are increasingly getting information in 
different ways and we are taking a look at it.
    Mr. Meadows. All right, so the Federal Records Act came up 
yesterday in a hearing.
    Ms. McCarthy. Yes.
    Mr. Meadows. I noticed it didn't get brought up today, but 
it looks like the Federal Records Act has been violated by the 
EPA. Did the gentleman that was involved from Alaska, did he 
print out his emails?
    Ms. McCarthy. That is not required, sir.
    Mr. Meadows. Did he preserve his emails? That is required 
by the Federal Records Act.
    Ms. McCarthy. I can't know where the failure occurred. We 
are talking about a series of emails where it is not one 
particular incident, it is an individual that is located in the 
Kenai Peninsula.
    Mr. Meadows. So you are saying you can't collect stuff 
because it is a long ways away?
    Ms. McCarthy. No, no. I am just saying that we are 
challenged in terms of trying to figure out where those small 
failures might have occurred and what caused them to occur. But 
we have produced a lot of information. These are pretty old 
documents----
    Mr. Meadows. I understand. I heard very similar testimony 
yesterday that a lot of documents had been produced. You gave a 
great answer to a question I didn't ask.
    Ms. McCarthy. Okay, what is your question, then?
    Mr. Meadows. My question is were all his emails preserved 
according to the Federal Records Act? Were they all preserved 
or was a law violated?
    Ms. McCarthy. Originally you asked me if he preserved them. 
That is what I was----
    Mr. Meadows. Were they all preserved?
    Ms. McCarthy. I think we have notified the appropriate 
authorities that we may have some emails that we cannot produce 
that we should have kept, and we have notified----
    Mr. Meadows. So I am not aware that you----
    Ms. McCarthy.--whether we can recover all these or not.
    Mr. Meadows. So did you notify the National Archives?
    Ms. McCarthy. Yes, we did.
    Mr. Meadows. When did you do that?
    Ms. McCarthy. Yesterday.
    Mr. Meadows. After the hearing.
    Ms. McCarthy. Well, it became clear that----
    Mr. Meadows. So yesterday it became clear that you didn't 
have emails?
    Ms. McCarthy. Actually, no. We informed the committee when 
we identified this problem, and we kept them abreast; and I, in 
the end, am not sure whether or not we won't recover all of it. 
The question I understood you might ask was whether we have 
already identified, and we did and we are where I think we need 
to be, but I am still hoping that we recover all those emails. 
And this is not a broad swath of emails over a series of years; 
these are very selective failures that we haven't yet 
understood why those records weren't kept, but it appears that 
people did what they were supposed to do.
    Mr. Meadows. Okay, so yesterday you informed the National 
Archivist.
    Ms. McCarthy. That is correct.
    Mr. Meadows. The Federal Records Act actually requires that 
you would notify them at the time that you noticed that you had 
a problem. So it was either that you violated the law or 
yesterday you notified them because you saw it on a hearing and 
you said, oops.
    Ms. McCarthy. No, we notified them without telling them 
that we have confirmed that there is a problem, but there is a 
suspicion that we may not be able to locate all of them. And we 
have properly identified that information.
    Mr. Meadows. And that happened yesterday.
    Ms. McCarthy. It did.
    Mr. Meadows. Wow. Okay, let me go on a little bit further.
    Really, as we start to look at this, you do know that the 
IG has an investigation looking into all this.
    Ms. McCarthy. I do, yes.
    Mr. Meadows. All right. And do you also know that the 
committee has been asking for over two years for these 
documents?
    Ms. McCarthy. Which?
    Mr. Meadows. Many of the documents, requesting additional 
during the subpoenas investigation during that.
    Ms. McCarthy. We actually have complied with some earlier 
request for information, and we continue to respond as the 
committee looks for additional information.
    Mr. Meadows. Okay. Are you aware that with the EPA with 
regards to a recommended 404 action, kind of the preemptive 404 
veto, are you aware that there might have been some collusion 
that was going on?
    Ms. McCarthy. I am aware that people have expressed concern 
about that and it has been referred to the inspector general 
and he is looking into it.
    Mr. Meadows. Does that concern you, that there might be 
collusion?
    Ms. McCarthy. I have seen no evidence of it so far, but 
certainly----
    Mr. Meadows. I didn't ask you that. I just said would it 
concern you if there was collusion.
    Ms. McCarthy. I am actually happy the inspector general is 
looking at this, and I look forward to his report when it is 
produced.
    Mr. Meadows. All right. So if you have a crushed hard 
drive, are you willing to produce that and give that to the 
committee as well?
    Ms. McCarthy. I will be happy to get back to you on that. I 
just want to make sure that I have this right, because the 
challenge we have been having is, again, that this is--we are 
not sure where the failure came from and what it is attributed 
to, but we will be happy to share whatever we have available to 
the committee.
    Mr. Meadows. All right, so it sounds like we just have a 
whole lot of unknowns here as it relates to Pebble Mine, right? 
I mean, with all of this going back and forth and 
investigation, it sounds like there is just a whole lot of 
uncertainty.
    Ms. McCarthy. Actually, what you have expressed----
    Mr. Meadows. Or are you certain what is going to happen?
    Ms. McCarthy.--uncertainty about a fish biologist who 
provided input into his expertise on Bristol Bay. I think the 
thing I want to make sure that everybody understands was he is 
not a decision maker in this process; he inputted into the 
science assessment. That has been fully peer reviewed. We have 
not made any decision on Bristol Bay; we have just taken a 
first step, and it will be a fully engaged public process.
    Mr. Meadows. But he could have been one of the ones that 
colluded on this. In fact, there have been innuendos made that 
he may very well have been the one.
    Ms. McCarthy. Which is why it is important that the 
inspector general conduct their investigation and that we be 
mindful of the report and we take appropriate action.
    Mr. Meadows. Well, in light of that, then, wouldn't you 
think that it would be prudent to cease the 404(c) action at 
this point, until we get all the facts?
    Ms. McCarthy. Well, there is no----
    Mr. Meadows. Are you willing to cease that 404(c) action 
until we get the facts?
    Ms. McCarthy. No, sir. I don't see any evidence that there 
was collusion here. And I want to again point out that he is a 
fish biologist, he is not a decision maker for the Agency.
    Mr. Meadows. Well, but collusion by this biologist is still 
collusion.
    Ms. McCarthy. That decision is made on the basis of the 
science.
    Mr. Meadows. All right, so let me close with this. What 
about the money that we are spending there on Pebble Mine? What 
if we took that money and we brought it over and cleaned up the 
CTS site? Don't you think that would be a great idea?
    Ms. McCarthy. We all have our priorities, sir.
    Mr. Meadows. And CTS is mine.
    Ms. McCarthy. That has been made abundantly clear.
    Mr. Meadows. I want to be sympathetic to Mr. Cummings, if 
he has some additional questions he would like to ask.
    Mr. Cummings. I promise you I won't take 12 minutes.
    But let me say this, Ms. McCarthy, as I close, because I 
have to get to a meeting. You have a tough job. You have a 
tough job. And when you are trying to protect the health and 
the safety of all Americans and keep the environment and the 
water clean, you have a tough job. On the one hand we hear 
folks say don't regulate us too much, but I keep thinking about 
that situation in West Virginia with the water, and they had to 
bring in bottled water. And I ask myself the question if that 
happened in various districts throughout the Country, that 
would be a major, major, major problem. So I just want to leave 
you with two things.
    One, I don't know if you heard my opening statement when I 
said that this is our watch. And it is our watch to make sure 
that we keep our environment clean, safe, all the things that 
you try to do; our water; all the things you do, the mission of 
the EPA. But at the same time, you know, sometimes if an 
organization has problems within itself, it is kind of hard for 
it to carry out its mission. When I hire people, I always check 
with them to make sure they are not drama people, because a 
drama person can mess up a whole office. And when you have a 
drama person, it takes away from the ability to accomplish what 
you set out to do.
    At the same time, when we hear about situations like Beale, 
it really just rubs everybody the wrong way. And the reason why 
I had asked Chairman Issa to let me interject my questions 
earlier, and I have been here for 99 percent of this hearing, 
is because I wanted to make sure that you all, in this moment, 
this is a critical moment, had gotten the wake-up call or calls 
to take action to make sure that we did every single thing in 
our power to make sure another Beale did not happen. And I 
remember, as I was raising my kids, I used to tell them you are 
going to be punished today because I realized that if I allow 
this moment to come and you did something improper and I don't 
correct it, it is usually going to get worse. And what I am 
saying to you is those critical moments come along, and Beale 
is the poster child for a critical moment. The question is 
whether we will take that moment, learn from it, correct it, 
and put in all the safeguards that are necessary so that it 
does not happen again; but, just as significantly, so that it 
doesn't get worse.
    So while it is our watch, it is our watch to guard our 
environment, to take care of our water, to do all those things 
to keep our people safe, but it is also our watch to make,to 
help the Agency be the very, very, very best that it can be.
    The other thing that happens is this: that takes away from 
that is when we have hearings and legitimate questions, but the 
time that we spend dealing with those kinds of issues also 
takes away. But we have to do that. You understand that. This 
is not personal. We have to look into the Beales. We have to do 
those things. You have to ask the critical questions like the 
chairman was just asking. But we have to also make sure that we 
do all that we can to minimize the problems within so that we 
can address the problems that we are supposed to be addressing. 
Does that make sense?
    Ms. McCarthy. Everything you say is absolutely on target, 
and I want to just verify that I understand the importance of 
this committee and the work that you do. I understand the 
importance of the Office of Inspector General at EPA. We have 
challenges to keep up with modern times in terms of our systems 
of accountability. We are working through those.
    I was handed a John Beale when I got in there. While I 
would have loved to have corrected that situation and known 
right out of the gate. He is sitting in a jail right now; we 
got money back and I am getting more. I had a town hall just in 
May on this very issue. Two reasons: one is to enforce 
accountability in our Agency, but, secondly, to let my Agency 
know that I know what we are dealing with here is out of 16,000 
people I am dealing with a handful; and I cannot let that 
handful of people destroy the morale of my Agency and our 
ability to get done what the public expects us to do. I am 
surrounded by incredibly dedicated, talented people, and I want 
them to be rewarded for what they do and know that when there 
is a bad apple there it is coming out. I am finding it and it 
is coming out as quickly as I can get it.
    Mr. Cummings. And as I close, in your town hall meeting I 
hope that you addressed the issue of whistleblowing, because I 
think that is the way we can get to some of this. Somebody has 
to know something. So I think that is important.
    But the last thing you said, and I have to end on this, is 
a lot of times we criticize Federal employees, but I have often 
said that when I talk to Federal employees, particularly I have 
talked to people in your Agency and others, and a lot of these 
folks, most of them, as a matter of fact, they come in and they 
do these jobs. They could make a lot more money outside of 
Government, but they come because it feeds their souls, because 
they see something greater than them. And I see that over and 
over again with EPA employees. So I just want to--and others. 
But we are talking about your Agency today. And I want to thank 
them because a lot of them have sacrificed a lot because they 
know that it is our watch and they are good watch persons 
trying to make a difference for the future.
    Ms. McCarthy. Thank you. And it is an honor for me to 
represent them.
    Mr. Cummings. Thank you.
    Thank you, Mr. Chairman.
    Chairman Issa. [Presiding.] Thank you.
    Administrator, by our standards, you have done well, and 
quickly. As we bring it to a close for today, we began with the 
question of the outstanding subpoena. Clearly, I hope that over 
the next few days that our folks and your folks can resolve 
this with all the emails being known and understood. If we 
can't, we have already had that discussion. But I hope that we 
can. I am sure that when you mentioned in your dialogue at the 
opening, that you talked about the balance of power, that you 
appreciate that we too have an obligation, as Article I, to do 
that balance fully and freely; that the documents we are asking 
for a court under FOIA would undoubtedly order. And that is 
really what we are asking for, is to be as never less than a 
FOIA discovery would arrive at, and this committee has a recent 
history in the case of Benghazi investigation of knowing that 
in fact correspondence from the White House is often protected, 
shielded, and not disclosed to the committee, but ultimately a 
Federal judge seems to be respected.
    As I look at Article I, Article II, and Article III, and I 
have just been over in my other role at Judiciary, I realize 
that Article I and II need to resolve as many things as they 
can before we go to Article III, before we go to the courts. 
That is my goal; that is the reason that I would like to have 
you seriously relook at the issue of all of the documents, not 
just one, since that document, I think if you relook at it, you 
will realize if you have a suspicious nature, as my 
investigators are required to, they could say it asks more 
questions than it answers and it leads to their wanting to see 
more for that reason. So I hope we are able to do this.
    Obviously, we are still trying to get the Pebble Mine 
question of the documentation, the order, and individuals who 
are not available to us resolved, and we will continue to do 
that with other committees.
    Lastly, the committee has begun doing interrogatories, 
whenever possible, in order to not need to bring witnesses 
back. This allows you to use a vast portion of your staff to 
get us answers to questions. There were a number of questions 
asked today that, by nature, you can't fully answer, so what we 
will do is we are going to recess. We will present you 
interrogatories that are consistent either with the discovery 
questions that we mentioned, and call them just questions to 
EPA, they are either related to today's hearing or they are 
related to the outstanding subpoenas, and we would ask that you 
respond to them in a timely fashion. Then, once they are 
responded to, we will close the record on this.
    So we will stand in recess on this hearing pending the 
response to all of those. And again I want to thank you for 
your presence.
    Ms. McCarthy. Thank you very much for the hearing and the 
courteous way in which you have run it, and we certainly hope 
we can resolve these issues together. Thank you.
    Chairman Issa. I do too. Thank you.
    [Whereupon, at 12:28 p.m., the committee was recessed.]


                                APPENDIX

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               Material Submitted for the Hearing Record

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