[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
[GRAPHIC NOT AVAVILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://judiciary.house.gov
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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
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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.]
[all]