[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                   EXECUTIVE OVERREACH IN REGULATORY 
                     ENFORCEMENT AND INFRASTRUCTURE

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

                                 HEARING

                               BEFORE THE

                     EXECUTIVE OVERREACH TASK FORCE

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 12, 2016

                               __________

                           Serial No. 114-86

                               __________

         Printed for the use of the Committee on the Judiciary
         
         
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                       COMMITTEE ON THE JUDICIARY

                   BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        JERROLD NADLER, New York
LAMAR S. SMITH, Texas                ZOE LOFGREN, California
STEVE CHABOT, Ohio                   SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California          STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa                       Georgia
TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas                 JUDY CHU, California
JIM JORDAN, Ohio                     TED DEUTCH, Florida
TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah                 KAREN BASS, California
TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho                 HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas              DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia                SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan

           Shelley Husband, Chief of Staff & General Counsel
        Perry Apelbaum, Minority Staff Director & Chief Counsel
                                 
                                 
                                 ------                                

                     Executive Overreach Task Force

                       STEVE KING, Iowa, Chairman

F. JAMES SENSENBRENNER, Jr.,         STEVE COHEN, Tennessee
Wisconsin                            JERROLD NADLER, New York
DARRELL E. ISSA, California          ZOE LOFGREN, California
LOUIE GOHMERT, Texas                 SHEILA JACKSON LEE, Texas
JIM JORDAN, Ohio                     HENRY C. ``HANK'' JOHNSON, Jr.,
TED POE, Texas                         Georgia
JASON CHAFFETZ, Utah                 JUDY CHU, California
TREY GOWDY, South Carolina           TED DEUTCH, Florida
RAUL LABRADOR, Idaho                 CEDRIC RICHMOND, Louisiana
RON DeSANTIS, Florida                SCOTT PETERS, California
KEN BUCK, Colorado
MIKE BISHOP, Michigan

                     Paul B. Taylor, Chief Counsel

                    James J. Park, Minority Counsel
                            
                            
                            C O N T E N T S

                              ----------                              

                             JULY 12, 2016

                                                                   Page

                           OPENING STATEMENTS

The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Chairman, Executive Overreach Task Force....     1
The Honorable Steve Cohen, a Representative in Congress from the 
  State of Tennessee, and Ranking Member, Executive Overreach 
  Task Force.....................................................     3

                               WITNESSES

The Honorable Michael B. Mukasey, Of Counsel, Debevoise & 
  Plimpton LLP
  Oral Testimony.................................................    11
  Prepared Statement.............................................    13
David Min, Assistant Professor of Law, University of California, 
  Irvine School of Law
  Oral Testimony.................................................    24
  Prepared Statement.............................................    26
The Honorable Gary Ridley, State of Oklahoma, Secretary of 
  Transportation
  Oral Testimony.................................................    39
  Prepared Statement.............................................    41

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Executive Overreach Task Force.................................     5

 
    EXECUTIVE OVERREACH IN REGULATORY ENFORCEMENT AND INFRASTRUCTURE

                              ----------                              


                         TUESDAY, JULY 12, 2016

                        House of Representatives

                     Executive Overreach Task Force

                       Committee on the Judiciary

                            Washington, DC.

    The Task Force met, pursuant to call, at 4:38 p.m., in room 
2237, Rayburn House Office Building, the Honorable Steve King 
(Chairman of the Task Force) presiding.
    Present: Representatives King and Cohen.
    Staff Present: (Majority) Paul Taylor, Chief Counsel; 
Zachary Somers, Parliamentarian & General Counsel, Committee on 
the Judiciary; Tricia White, Clerk; (Minority) James Park, 
Minority Counsel; Veronica Eligan, Professional Staff Member.
    Mr. King. The Executive Overreach Task Force will come to 
order. Without objection, the Chair is authorized to declare a 
recess of the Task Force at any time. I will now recognize 
myself for my opening statement.
    Today's hearing of the Executive Overreach Task Force will 
focus on executive overreach in the areas of regulatory 
enforcement and infrastructure. I will use my time today to 
focus on executive overreach as it adversely affects our 
Nation's vital infrastructure.
    Federal mandates and untimely regulatory actions can often 
limit the efficient investment of the Nation's core 
infrastructure funds. One prominent example that comes to mind 
is the misuse of the Highway Trust Fund to pay for liberal 
policy goals rather than to build and maintain our roads and 
bridges.
    The Highway Trust Fund is primarily funded through the 
Federal gas tax, a user's fee, which is 18.4 cents per gallon 
on gasoline and 24.4 cents per gallon on diesel fuel. Rather 
than spending every penny directly to build, maintain, and 
repair our roads and bridges, the Highway Trust Fund is being 
diverted to pay for Davis-Bacon wages, bike trails, squirrel 
sanctuaries, and environmental and archaeological studies and 
compliance.
    Davis-Bacon wages, for example, make highway construction 
projects 20 percent more expensive than they would otherwise be 
if competitive, market-driven wages were paid. And by the way, 
those would be my numbers that come from our construction 
company that has been busy doing this kind of work for 41 
years.
    The reason for these inefficiencies in the Highway Trust 
Fund largely lay that the feet of a dormant Congress that 
delegated funding decision to the unaccountable bureaucrats in 
the executive branch. Without their elected representatives to 
fight for them with earmarks to fund direct needs, our 
constituents and their direct transportation needs are often 
ignored.
    Furthermore, Federal executive branch demands for 
dedicating transportation funds to secondary activities, such 
as bicycle and pedestrian trails and landscaping, often 
interfere with the funding mechanisms and list of priorities 
for core infrastructure programs as understood by the States 
involved.
    Without these formulaic prescriptions, we could build five 
miles of road instead of four, or build five new bridges 
instead of four. New layers of process upon process imposed in 
the name of protecting the environment can also significantly 
delay infrastructure improvements, even when many such 
improvements are known to have no significant environmental 
impacts.
    Researchers have laid out a variety of Federal regulations 
that make building transportation infrastructure to rural areas 
much more difficult today, including environmental reviews that 
can cause the approval process for some projects to extend 10 
to 15 years.
    A September 2015 study by Philip K. Howard at Common Good 
concluded that the cumulative effect of 6 year delays in 
starting construction on public projects costs the Nation a 
cumulative total of over $3.7 trillion, and that including the 
costs of prolonged inefficiencies and unnecessary pollution 
during the period of legal review. That waste amounts to more 
than double the $1.7 trillion needed through the end of this 
decade to modernize America's infrastructure.
    As the author of that report noted, no one deliberately 
designed America's infrastructure approval systems. It is an 
accident of legal accretion over the past 50 years. 
Environmental review was supposed to highlight major issues in 
300 pages or less on complex projects so that officials can 
make an informed decision.
    As practiced today, environmental review often harms the 
environment. America's antiquated power grid, for example, 
wastes the equivalent of 200 coal-burning power plants. Federal 
agencies, such as the Environmental Protection Agency and Corps 
of Engineers, also often seek to expand their jurisdiction over 
new waters through the issuance of guidelines like WOTUS--as we 
call it--or Waters of the United States--that interpret Federal 
laws in new ways that put things like drainage ditches and 
minor tributaries under Federal jurisdiction.
    In fact, some of this goes all the way up the dry waterway 
to the top of the hill or to the kitchen sink, and it has been 
years of facing that kind of overregulation.
    All the while, Congress has largely abandoned its power to 
direct Federal funds to the infrastructure and other priorities 
of the people under the name of earmark reform. While some 
criticize how Members of Congress sought to direct Federal 
funds to some projects rather than others, the alternative now 
is that unelected bureaucrats who are not beholden to the 
people through regular elections are directing Federal taxpayer 
dollars to their own infrastructure priorities, or rather to 
their own ideological pursuits, that may or may not have 
anything to do with core infrastructure priorities.
    In other words, they had the earmarking that was done by 
individual Members of Congress in the interests of their 
constituents in the light of day that was focused on those 
priorities of infrastructure, now has been handed over to the 
executive branch of government for them to select those earmark 
priorities as opposed to Members of Congress who are up for 
election and reelection.
    Members of Congress are uniquely positioned to better 
understand the need of their constituents and their districts. 
Renewing the use of earmarks is an important method to restore 
Article I authority in Congress and to exercise the powers of 
the purse. Prudent and authorized earmarks are an appropriate 
use of Congressional spending authority and ensure that 
Congress controls the purse strings rather than continuing to 
improperly delegate authority to unelected, unaccountable 
bureaucrats.
    I look forward to hearing from all our witnesses today, and 
exploring how the people's elected representatives might regain 
more of the power to direct infrastructure priorities to the 
people's will instead of the will of unelected bureaucracies. I 
conclude my opening statement, and now I would recognize the 
Ranking Member from Tennessee, Mr. Cohen, for his opening 
statement.
    Mr. Cohen. Thank you. I could read my opening statement, 
which is a very well-written opening statement. Staff did a 
great job. James, stand and take a bow. Great job, but I am not 
going to read it because it has things that I think my Chairman 
probably would not like. It suggests that we should be doing 
other things like voting rights and police minority problems 
that we have, and gun violence, and dealing with those issues, 
and the disparity in wealth, rather than this.
    So, I am just going to ask to enter this in the record, and 
I am going to just say that I think the Chairman is great, and 
he has done a great job today in talking about earmarks, and he 
is right about earmarks.
    We ought to have earmarks, and it is not just because it is 
in Article 1 and the unelected bureaucrats, but it is the oil 
that makes the machine run, and that is one of the reasons why 
we have not done much here in the last few years, is because we 
do not have earmarks. Where everybody has got a piece of the 
pie, and everybody has a reason to vote for a bill, and the 
speaker has got a little clout, and some other people have a 
little clout, and people can conform their conducts to what 
makes things happen, gets infrastructure projects funded, and 
gets money back home, which is real important.
    And the taking away of earmarks was a real mistake, and it 
is something Congress has--it hurt Congress. It has hurt the 
power of the Speaker, and it has hurt the power of us to create 
legislation and get things past.
    There should have been some reforms, and there were some 
reforms. There could be some reforms, but you do not just throw 
it out. You mend it, and that is what we ought to do, and we 
should do.
    So, I want to hear from people about how good earmarks are. 
It is just music to my ears because I think it works. It is 
good to bring home the bacon, but it is also good to make this 
place get together, work with bipartisan support for bills, 
which we used to have in transportation, and we used to have on 
highway bills and we had on military defense spending and other 
areas, veterans bills.
    Everybody had something in the pie, and so everybody wanted 
to get something done, and it did not come to more than one or 
one and a half percent of the total budget, and otherwise it is 
unelected folks. It is bureaucrats making the decisions, or 
people in the State where the money goes to, and they decide 
where to spend projects. And it is ridiculous to think that 
they do not their politics when they make their decision.
    I am not even sure we consider politics in our decision. 
Some people may, but in my first few years when we had 
earmarks, I let the city mayors--who maybe had politics, but I 
wanted to make sure that their proposals were good government--
the roads they chose were important to the development of 
downtown, and they would get people moving around, or there 
were projects that were important to the universities and 
medical school--University of Tennessee or the University of 
Memphis, and I let the leaders decide what was important, and I 
came up here and worked for them, and that is the way it ought 
to work.
    So, with that, I yield back the balance of my time. I thank 
Mr. King for being the voice of Mr. Young and others who 
understand the importance of earmarks.
    Mr. King. I thank the gentleman from Tennessee for his 
remarks, his opening statement, as it will be introduced into 
the record.
    [The prepared statement of Mr. Cohen follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mr. King. Without objection, other Members' opening 
statements will be made part of the record as well. And let me 
now introduce the witnesses.
    Our first witness is the Honorable Michael Mukasey, former 
Attorney General, Federal judge, and now a counselor at the 
firm of Debevoise & Plimpton.
    Our second witness is David Min, assistant professor of law 
at the University of California, Irvine School of Law; and our 
third witness is the Honorable Gary Ridley, the secretary of 
transportation for the State of Oklahoma.
    We welcome you all here today and look forward to your 
testimony. Each of the witnesses' written statements will be 
entered into the record in its entirety. I ask that each 
witness summarize their testimony in 5 minutes or less, and 
there is a clock in front of you with a green light, amber 
light, and a red light, which will be pretty obvious, I think.
    Before I recognize the witnesses, it is the tradition of 
the Task Force that they be sworn in. I would ask the 
witnesses, would you please stand and raise your right hand? 
Thank you. Do you solemnly swear that the testimony that you 
are about to give will be the truth, the whole truth, and 
nothing but the truth, so help you God?
    Let the record reflect that the witnesses have attested in 
the affirmative--you may be seated--testified in the 
affirmative.
    And I now recognize our first witness, Mr. Mukasey, and 
look forward to hearing your testimony, Mr. Mukasey--General 
Mukasey.

        TESTIMONY OF THE HONORABLE MICHAEL B. MUKASEY, 
              OF COUNSEL, DEBEVOISE & PLIMPTON LLP

    Mr. Mukasey. I think actually mister is better. I prefer 
it. But thank you very much, Mr. Chairman, and Ranking Member 
Cohen. I appreciate the opportunity to appear here in relation 
to what I think is an enormously important issue, and that 
relates to how our laws and regulations are enforced.
    And I am not going to read my statement into the record, 
not for the reasons that the Ranking Member mentioned, but 
rather because I think it is already in the record, and I think 
it is better simply to summarize and point out what the point 
is I am trying to make, which is that if--when enforcing laws 
and regulations stops being about simply the neutral 
application of neutral principles, and get incentives built 
into it that either permit regulators or enforcers to further 
their own agendas--which may include the public interest, or 
may include perpetuating their own activities, or further the 
agendas of others--then you create perverse incentives, and in 
that situation, it is not surprising that you often get 
perverse results.
    There are numerous cases that one could point to. The 
Vascular Solutions case involving a company that was selling a 
licensed-by-the-FDA device that was useful in treating vein 
disorders was able to--through results that it became aware of 
through physicians--found out that that device could also treat 
related vein disorders and so advised doctors.
    They were prosecuted for 2 years for promoting an off-label 
use of the device, and it took them 2 years and millions of 
dollars to get cleared until acquittal was returned by a jury. 
That should not happen. That is an example of creating and 
permitting perverse results in law enforcement.
    There are other examples. Gibson Guitar case is probably a 
museum-quality example. The company was prosecuted for 
importing wood that was gathered in violation, not of the laws 
of the United States, but in violation of the laws of a South 
American country. They had no idea that those laws were 
violated, but there was a provision in the regulations that 
made it unlawful to import wood that was harvested in violation 
of foreign law. Not only did they get prosecuted, but there 
were fines extracted from them that were then used to 
contribute to the National Fish and Wildlife Foundation, even 
though that had absolutely nothing to do with the claimed 
violation that they had committed.
    There are a lot of other examples. The U.S. Department of 
Justice has an asset forfeiture--an equitable sharing program 
that it has entered into with the State, in which State police 
in essence have an incentive to stop people and seize money, 
which they then share with the Federal Government.
    Again, they share it supposedly for law enforcement uses, 
but the unregulated seizure and sharing of money is something 
that has gotten completely outside the control of the Congress, 
which is supposed to be in charge of allocating money, in 
charge of dispersing money, and instead leaves it to the 
discretion of people in the agencies. That is not the way, I 
think, the Constitution was written. It is not, I think, the 
way the founders envisioned the system would work, and it is 
not the way, I think, the system should work. Thank you.
    [The prepared statement of Mr. Mukasey follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. King. I thank our Attorney General for his testimony, 
and now recognize Mr. Min for his 5 minutes.

TESTIMONY OF DAVID MIN, ASSISTANT PROFESSOR OF LAW, UNIVERSITY 
              OF CALIFORNIA, IRVINE SCHOOL OF LAW

    Mr. Min. Thank you for inviting me here to testify on this 
important topic of potential executive branch overreach. As I 
discuss in my written testimony, the scope of today's hearing 
is quite sprawling, spreading a broad array of complex and 
highly technical legal and constitutional issues.
    Obviously, I do not have the time to get into all of these 
today, but I would like to make one general observation. 
Today's hearing assumes that there is executive branch 
overreach, and this assumption is based in large part on the 
claim that there is a so-called swarm of litigation that DOJ 
and other governmental agencies have initiated in recent years. 
But this claim largely ignores the context of these various DOJ 
investigations.
    Lest we forget, we are still recovering from the largest 
financial crisis in the history of the world, one which caused 
$22 trillion in total damages to the American people.
    Similarly, the BP Deepwater Horizon oil spill was the 
largest environmental disaster we have ever seen, one whose 
effects will be enormous and felt for generations.
    Given the magnitude of harm resulting from these and other 
recent incidents of business misconduct, it would be highly 
unusual if DOJ had not launched a wave of major prosecutions in 
recent years.
    My testimony today, however, focuses on one discrete issue 
related to executive overreach, which is this: When the Federal 
Government settlement of litigation claims includes provisions 
allowing or acquiring charitable donations to be made to third 
parties, to what extent do these charitable payment provisions 
encroach on Congress' power of appropriations, and should we 
take measures to curb or eliminate this practice?
    Of course, H.R. 5063, the Stop Settlement Slush Funds Act 
of 2016, would expressly prohibit the DOJ and other Federal 
agencies for negotiating for such charitable payment provisions 
unless they were specifically directed toward actual victims of 
the alleged misconduct.
    While I appreciate all the hard work that has gone into 
H.R. 5063, I think it is a solution in search of problem, as 
there is a marked lack of evidence, other than anecdotal 
evidence, that charitable payment provisions actually pose any 
sort of problem, either from the standpoint of law or policy.
    Legally, it is well settled that charitable payment 
provisions are permissible and enforceable under current law, 
so long as they meet certain conditions. They should be 
executed prior to an admission or finding of liability. The 
government should not retain any post-settlement control over 
the donated funds, and there should be some nexus between the 
donations and the underlying legal violation.
    Charitable payment provisions that meet these criteria are 
clearly enforceable. Indeed, it is worth mentioning that the 
White House Office of Legal Counsel, the GAO, which advises and 
supports Congress, and the Federal courts are all in agreement 
on this point, as a describe in greater detail in my written 
testimony.
    Indeed, this very body has implicitly acknowledged the 
legality of charitable payment provisions by passing H.R. 5063 
out of Committee. If these types of provisions were legal, of 
course there would be no need to pass legislation prohibiting 
them.
    There is also no evidence that charitable payment 
provisions pose a policy problem. This Committee has spent 
significant time investigating the charitable payment 
provisions negotiated by DOJ in recent settlements, but while 
there has been a flood of incendiary rhetoric accusing DOJ of 
various nefarious deeds around this, there has been a notable 
lack of any evidence behind these claims.
    The recent RMBS settlements negotiated by DOJ with the 
largest investment banks illustrates this point rather well, I 
think. These settlements, which include provisions for 
donations to be made to housing counseling groups, have been 
described by some as ``liberal slush funds'' because the list 
of approved donees includes groups like NeighborWorks or La 
Raza.
    But this characterization of these settlements is highly 
misleading. The charitable payment provisions in question allow 
the banks to choose from among hundreds of different HUD-
approved housing counselling groups, including ones that might 
fairly be characterized as conservative. These groups were not 
chosen on the basis of their ideological postures, but rather 
because of their proven effectiveness in prevent foreclosures.
    Thus, H.R. 5063, in my view, does not actually solve any 
problems, but is likely to create a number of vexing problems. 
H.R. 5063 weakens the Federal Government's ability to pursue 
the best tailored remedies for civil and criminal violations. 
It is of course a first principle of negotiations that 
negotiators should have flexible and open-ended authority so as 
to be able to negotiation for Pareto optimal deals. H.R. 5063 
would detract from that.
    Moreover, limiting DOJ settlement authority is likely to 
drive it toward a more aggressive litigative posture. That, in 
turn, is likely to stunt capital formation and economic growth 
by shifting prosecutorial resources away from negotiation and 
toward litigation, thus increasing the uncertainty of the 
business community around litigation.
    In my view, one of the key problems underlying H.R. 5063 is 
that it embodies a flawed view of the purpose of regulatory 
enforcement. Proponents of H.R. 5063 have expressed the view 
that civil penalties should serve a specific restitutionary 
function, providing compensation to injured individuals, but 
this view flies in the face of long-standing theory and basic 
logic. Civil penalties by their very nature are inefficient 
means of providing redress to injured parties.
    The long-standing goal of civil penalties has contrarily 
been to survey deterrents and general compensation function. 
Charitable payment provisions help to facilitate the public 
policy goals.
    If this Task Force is concerned about ensuring that victims 
of crime are compensated, it should create more private causes 
of action for these victims. Private litigation is, from both a 
theoretical and empirical perspective, a far more efficient 
vehicle for providing specific restitution. I thank you again 
for the opportunity to testify and look forward to your 
questions. Thank you.
    [The prepared statement of Mr. Min follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. King. Thank you, Mr. Min. The Chair now recognizes the 
Honorable Mr. Ridley for his testimony.

  TESTIMONY OF THE HONORABLE GARY RIDLEY, STATE OF OKLAHOMA, 
                  SECRETARY OF TRANSPORTATION

    Mr. Ridley. Thank you, Mr. Chairman, Ranking Member Cohen, 
Members of the Task Force for the opportunity to testify 
related to the benefits of congressionally identified 
transportation improvement projects, more commonly referred to 
as earmarks.
    We also appreciate the critical charge and the important 
work of the Task Force, and strongly encourage all possible 
action, in responsible limit, to reduce and eliminate Federal 
regulatory burden on citizens, business, and government 
entities.
    The deficiency of a long-underfunded national 
transportation system cannot be resolved by States alone. They 
require increasing a congressionally influenced Federal 
investment level and a long-term improvement strategy. Scarce 
Federal transportation discretionary dollars should not be 
unduly influenced by other fringe or completely unrelated 
initiatives, and should instead by wholly focused on critically 
needed transportation improvements.
    The resolution of our ongoing transportation funding crisis 
and cracking of new, more efficient project and program 
delivery protocols must be jointly developed by a renewed State 
and Federal partnership. Such a partnership must be based on 
trust and alliance between the State, local leaders, and our 
congressional Members, along with the clear and mutual 
understanding of the critical and growing needs of the 
infrastructure system.
    Oklahoma has had a long history of successfully 
communicating the State's transportation system needs to our 
congressional delegation and, in turn, receiving congressional 
support for critically needed investments.
    Interstate 40 through downtown Oklahoma City and Interstate 
44 east of the Arkansas River in Tulsa are two tremendously 
important examples of dramatic improvements to the national 
transportation linkage that simply would not have been possible 
for Oklahoma to complete without the congressionally-directed 
Federal support. Oklahoma utilizes an 8 year construction work 
program to develop and deliver many of our federally funded 
projects.
    This plan is based on identified needs deficiency and is 
highly publicized around the State to ensure our transparency 
efforts. All projects in this plan have been fully vetted, are 
considered a priority, and are being actively advanced through 
the development process.
    The encompassed projects are inherently a topic of constant 
conversation and focus of the Oklahoma Congressional 
Delegation. Our delegation was always quick to try and help 
with Federal funding for our 8 year plan projects when 
opportunities were presented.
    It is important to recognize that any new addition of 
congressionally-identified project funding simply extended the 
planned investment and targeted projection, and enhanced the 
reach of the overall plan. While some earmarks were doomed to 
failure in some State, because there was never enough 
congressionally-identified directed funding to complete the 
initiative as conceived, conversely our 8 year construction 
work plan projects are typically well into development, enjoy 
solid mix of resource commitments, multifaceted resource 
availability provided by a high degree of flexibility, and 
offer the greatest opportunity for success.
    Make no mistake, transportation infrastructure earmarks 
still exist today, such as the TIGER program, FASTLANE grants, 
but are largely directed through funding pools left to the 
discretion of the executive branch and the administration of 
the associated jurisdictional agencies. Oklahoma has been 
successful in garnering discretionary participation in 
improvement projects under these competitive programs.
    However, the projects are sometimes developed to include 
additional elements that divert a percentage of the funding 
away from the more direct transportation infrastructure 
investments and toward fringe enhancements to garner favor with 
perceived executive priorities.
    I believe that there is an inherent need for a methodology 
to facilitate congressionally identified projects that can 
assist with transportation infrastructure improvements of 
national significance and that clearly and undeniably support 
our national transportation network.
    Opportunities that encourage State leaders' and officials' 
interaction with their congressional delegations that require 
detailed explanations of the need of the national 
transportation network can only have positive outcomes. A 
carefully direct, transparent project vetting process is 
paramount and should be mandated before any congressionally 
identified funding is committed.
    In addition, the responsible congressional Committee 
leadership and Committee Members should be provided with 
greater influence to shape and direct all facets of the Federal 
program. Discretionary transportation funding programs should 
be utilized to encourage a greater understanding of the 
critical needs of the national transportation system, and 
should require the broad support of Congress, rather than to be 
styled to pursue a narrowly defined agenda almost entirely by 
the executive branch.
    I might make mention also, Mr. Chairman, that a couple of 
earmarks that come to light are the inland waterway system was 
an earmark, and so was our National System of Highways or the 
interstate system was both earmarks.
    Mr. Chairman, Members, thank you again for the opportunity 
to visit with you today. I will be happy to answer any 
questions.
    [The prepared statement of Mr. Ridley follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. King. And I thank you, Secretary Ridley, for your 
testimony--all the witnesses for your testimony, and I will now 
recognize myself for 5 minutes.
    And I would turn first to you, Mr. Ridley, and ask you, if 
we were to repeal the Davis-Bacon Act, how much impact would 
that have on your ability to develop transportation in the 
State of Oklahoma?
    Mr. Ridley. Well, if I may, Mr. Chairman, give you just an 
example. Prior to 2010, Oklahoma had six zones that were 
covered under the Davis-Bacon Act. In 2010, for whatever 
reason, the Labor Department decided to do an audit and look at 
ours--and ours is a rural State, has two metropolitan areas, an 
Oklahoma City area and Tulsa area, but relatively a rural State 
other than that--and they came up with 66 zones.
    Now, an average highway project can be six to eight miles 
long. Therefore, many times, these projects fall within two or 
three zones. So, if you can imagine a contractor trying to keep 
track of a dozer operator's wages as he passes through the 
total project or even a truck driver as he passes through the 
project, it makes it extremely difficult for a contractor to 
not only bid their job, but also to be able to keep track of 
it. Therefore, that causes risk, and any time you have risk in 
a highway project, that increases the cost.
    It is also difficult to administer by the DOTs--difficult 
and almost impossible to audit. So, it is a huge cost. The 
dollar amount I do not know, Mr. Chairman. I do not know that I 
can grasp it, but you had made mention of the 15 to 20 percent. 
I think that is probably fairly close. It is an unbelievable 
cost, again, because of the time that it takes to do it, but 
more importantly, the risk that a contractor has in trying to 
develop a bid document and be able to progress the project.
    Mr. King. Thank you, Mr. Ridley, and those numbers I have 
estimated it back to 20 percent, but our numbers range in 
auditing our projects between 8 percent increase and 35 percent 
increase. The range varies depending on how much materials, how 
much labor, and what their relative competitive wage is in the 
area. Thank you.
    I turn to Attorney General Mukasey, and I want to pose a 
question here that you probably have not had an opportunity to 
digest.
    So, it has to do with some legislation that I proposed 
sometime back--in trying to figure out how we could get back to 
constitutional, authorized, and responsible earmarks. And so I 
had introduced in a previous Congress or two--it is called the 
Cut Act, and as I said, I want to be constitutional about this.
    I think it is the constitutional responsibility that we 
have here in Congress. We should not abdicate this 
responsibility over to the executive branch of government. And 
yet, there is a political question also to go back to earmarks 
in the face of the pressure that is there that is focused on 
the idea that earmarks were out of control, there were too 
many, and they were growing pretty fast; means that we want to 
have public scrutiny.
    So, I put it together in this way, that we would set up a 
bill that any Member of Congress could call up once a quarter, 
and only once a quarter, that would be a rescissions bill, that 
could call back earmarks after they had left the President's 
desk, but before they were expenditures that were obligated. 
And it would be under an open rule that would allow only for 
those earmarks to be struck by a majority vote of Congress, and 
then any Member could bring an amendment to the floor to strike 
those earmarks.
    And so, for example, I was just thinking of one, that maybe 
it comes out of the Army side--the Cowgirls Hall of Fame--that 
was an Oklahoma earmark as I remember, so I am teasing our 
witness just a little. But say there is an amendment to strike 
the funding for the Cowgirls Hall of Fame. That gets brought up 
on the floor, it gets voted--the strike of that. The rescission 
of that funding would be successful, and then a whole series of 
others: the Bridge to Nowhere, and on and on and on, until 
there was public scrutiny, public focus, and we had the 
judgement of Congress always with recorded votes on those 
things that would strike the earmarks that were irresponsible 
in the majority of Congress.
    Would that be, Mr. Mukasey--or General Mukasey--a method by 
which we could restore integrity in the constitutional process 
and also maintain an integrity in fiscal responsibility?
    Mr. Mukasey. You are correct that I did not have an 
opportunity to mull that over, except during the period that 
you were asking the question. However, my understanding of what 
you have suggested is that in essence, a law gets passed 
providing for an earmark, it goes to the President's desk, gets 
signed, but that a superseding law can then undo the initial 
law and--when it is appropriate. I see no problem with that, 
and obviously each house has the power to set its own rules. 
That is right in the Constitution. The House of Representative 
is supposed to initiate all bills having to do with raising and 
disbursement. That is in the Constitution. So I see nothing to 
impede that kind of procedure, and as a matter of policy, it 
sounds very wise, because it allows people initially to put 
forward earmarks. The ones that can survive scrutiny will 
survive. The ones that cannot will not, and all in all, I think 
it makes perfectly good sense.
    Mr. King. I thank you, General Mukasey, and if the Ranking 
Member will indulge me, I would like to offer that also up to 
Mr. Min and see if he would care to comment.
    Mr. Min. I think I would echo the general's comments. It 
seems like this is your house. You set the rules of how you 
appropriate the funds.
    Mr. King. And so it sounds to me that we are relatively 
universal among the witnesses that restoring responsible 
earmarks would be a constitutional thing to do that would also 
restore authority back to Article I and in the legislative 
branch of government. And would you agree, Secretary Ridley?
    Mr. Ridley. Certainly on the legal aspects. I would not 
have a comment certainly on Article I of the Constitution. My 
understanding is that Congress is the one that decides where 
the money is spent.
    Mr. King. I thank you, Mr. Ridley. And I would ask 
unanimous consent to introduce the Cut Act into the record. And 
hearing no objection, so ordered.*
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    *Note: The material referred to was not available at the time this 
hearing record was finalized.
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    Mr. King. Now, I recognize the gentleman from Tennessee, 
our Ranking Member, for his opportunity to question the 
witnesses.
    Mr. Cohen. Thank you, Mr. Chair. General Mukasey, you were 
talking about, I guess, civil asset forfeiture?
    Mr. Mukasey. As reflected in the particular program that I 
was referring to.
    Mr. Cohen. Yeah.
    Mr. Mukasey. That is the division of spoils between the DOJ 
and State.
    Mr. Cohen. Right, that is what you were referring to, was 
it not?
    Mr. Mukasey. Correct.
    Mr. Cohen. I think maybe I got it. I do not know, but there 
was some official with Justice who helped create that program, 
and then had an epiphany and sought to be forgiven for his 
misdeeds and has now come out strongly against, and saw how 
awful it was. And maybe there two of them. Do you know who I am 
speaking of?
    Mr. Mukasey. I do not.
    Mr. Cohen. Well, I will find it eventually. It is the power 
of Google, but they said it would just--and it is awful, and I 
saw where the----
    Mr. Mukasey. I am sorry to interrupt. It is one of those 
bright ideas that sounds bright when you first think of it, and 
may have advantages, but then when it goes into practice, some 
things that are not so right about it emerge.
    Mr. Cohen. Was it in the early 1980's that it started?
    Mr. Mukasey. Not sure when it started. I know that there 
was a Washington Post series back in 2014, I think that exposed 
it, and it has been cut back substantially. Of course, the 
cutback is entirely voluntary by the Justice Department, and it 
is self-policed. I hope it is policed well, but, you know, one 
never knows.
    Mr. Cohen. There is a Mr. Seth wrote a piece, and maybe 
that is--but anyway, regardless, all those programs and the--
Holder started to cut it back for some reason, and then the 
President, Attorney General, has reinstituted it, and it is 
just to take money from folks without a conviction; it is the 
antithesis of what you would think of as due process and 
government intrusion.
    Mr. Mukasey. It is, and I mean, they will take the money 
immediately. You may get it back at some point, but it is not 
going to be until you have spilled a whole lot of blood and 
money in order--trying to get it done.
    Mr. Cohen. And does it not shift the burden on the citizen 
to prove it is their money?
    Mr. Mukasey. In some instances, it does. You have people 
who have businesses that are high-cash businesses that wind up 
transporting cash, get pulled over, and they are accused of 
planning structuring, or money laundering. The money is seized, 
and it is sometimes years before they get it back.
    Mr. Cohen. Well, it is cash-registered justice is what it 
is. That happens a lot with drug laws, and a lot of these are 
drug cases. But in drug laws, the police get to keep cars and 
all kind of goods that they take, and we have really no choice 
in the matter.
    Mr. Mukasey. Back in my youth, when I was assistant U.S. 
attorney, we prosecuted a bunch of police officers who started 
out that way, seizing assets, using them for public purposes, 
and wound up seizing assets and using them for their own 
purposes and keeping the money and selling the drugs. So, you 
really create a slippery slope.
    Mr. Cohen. Yeah, we had a lot of that back in Tennessee 
when I was a police attorney and--after that I was a police 
attorney, but most of the drug agents were convicted of taking 
monies and taking--sometimes, it was not through the asset 
forfeiture program. They just took it, but neither here nor 
there. What do you know about deferred prosecution agreements? 
Those come through your office, too, do they not?
    Mr. Mukasey. Well, they come through our firm. We have----
    Mr. Cohen. But they used to come through your office.
    Mr. Mukasey. Right, they did.
    Mr. Cohen. Do you think there should be a different method 
in choosing the monitors, so that there is no politics involved 
in it, and having some time of ombudsman or something?
    Mr. Mukasey. I think that that whole system needs a whole 
lot of reform. You start out with the fact that many 
corporations--and I am not here to, you know, as a bleeding 
heart for corporations--but many corporations cannot take 
defending themselves against charges. Drug companies, for 
example----
    Mr. Cohen. Medical device.
    Mr. Mukasey [continuing]. Will suffer--pardon?
    Mr. Cohen. Medical device companies, too.
    Mr. Mukasey. Medical device companies will suffer debarment 
if they are even charged, so they do not fight. It is cheaper 
for them as a business matter to settle, and they do, and 
permit a deferred prosecution agreement in which they state 
certain things that may or may not be true, and then are barred 
by the terms of the agreement from ever challenging them 
publically.
    In fact, those agreements sometimes provide that if anybody 
at the company issues a statement that is contrary to the 
statement of facts to which the company agreed in the deferred 
prosecution agreement, the government can go back and prosecute 
them.
    Mr. Cohen. Aare you familiar with Chris Christie's 
adventures in those areas?
    Mr. Mukasey. I mean, the contribution to his alma mater?
    Mr. Cohen. That was the one I was getting to, yeah.
    Mr. Mukasey. That is kind of legendary in the department.
    Mr. Cohen. Yeah, that was just awful. It required this 
company to make--was it $100,000 or a quarter of a million 
dollars--to have a chair in ethics at some school in New 
Jersey, that was his school.
    Mr. Mukasey. Well, it was his alma mater.
    Mr. Cohen. Yeah, right, it was not, yeah. But anyway, those 
things happen.
    Mr. Mukasey. Not his best moment.
    Mr. Cohen. No, it was not. I wish we could do some things 
on civil forfeiture and get some--maybe Mr. King and I can work 
together on that and pass a bill.
    Mr. King. So, we can have our conversation on the sidebar.
    Mr. Cohen. Thank you, sir.
    Mr. King. I thank the gentleman from Tennessee, who has 
yielded back, and I thank the witnesses. This concludes today's 
hearing, and without objection, all Members will have 5 
legislative days to submit additional written questions for the 
witnesses or additional materials for the record.
    I thank the witnesses, and I thank the Members and the 
audience. This hearing is now adjourned.
    [Whereupon, at 5:17 p.m., the Task Force was adjourned 
subject to the call of the Chair.]

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