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

       TIME AND ATTENDANCE ABUSE AT THE U.S. PATENT AND TRADEMARK OFFICE

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             GOVERNMENT OPERATIONS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                DECEMBER 7, 2016

                                   __________

                               Serial No. 114-128

                                   __________

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, 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
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
    CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
    THOMAS MASSIE, Kentucky              BRENDA L. LAWRENCE, Michigan
    MARK MEADOWS, North Carolina         TED LIEU, California
    RON DeSANTIS, Florida                BONNIE WATSON COLEMAN, New Jersey
    MICK MULVANEY, South Carolina        STACEY E. PLASKETT, Virgin Islands
    KEN BUCK, Colorado                   MARK DeSAULNIER, California
    MARK WALKER, North Carolina          BRENDAN F. BOYLE, Pennsylvania
    ROD BLUM, Iowa                       PETER WELCH, Vermont
    JODY B. HICE, Georgia                MICHELLE LUJAN GRISHAM, New Mexico
    STEVE RUSSELL, Oklahoma
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                       Jennifer Hemingway, Staff Director
                     David Rapallo, Minority Staff Director
                     Kevin Ortiz, Professional Staff Member
                               Willie Marx, Clerk
                                     ------

                     Subcommittee on Government Operations

                     MARK MEADOWS, North Carolina, Chairman
    JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia,
    TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
    TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
    THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of
    MICK MULVANEY, South Carolina            Columbia
    KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
    EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
    GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on December 7, 2016.................................     1

                                   WITNESSES

    The Hon. Russell Slifer, Deputy Under Secretary of Commerce for
      Intellectual Property and Deputy Director, U.S. Patent and
      Trademark Office
        Oral Statement...............................................     3
        Written Statement............................................     5
    Mr. David Smith, Acting Deputy Inspector General, U.S. Department
      of Commerce
        Oral Statement...............................................     8
        Written Statement............................................    10
    Ms. Pamela Schwartz, President, Patent Office Professional
      Association
        Oral Statement...............................................    15
        Written Statement............................................    17
    Mr. David Chu, Ph.D., Panel Chair, National Academy of Public
      Administration
        Oral Statement...............................................    25
        Written Statement............................................    27

                                    APPENDIX

    Questions for the record, submitted by Mr. Meadows...............    58
    Questions for the record, submitted by Mr. Connolly..............   102

       TIME AND ATTENDANCE ABUSE AT THE U.S. PATENT AND TRADEMARK OFFICE

                                  ----------

                          Wednesday, December 7, 2016

                      House of Representatives,
                 Subcommittee on Government Operations,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 2:22 p.m., in
    Room 2154, Rayburn House Office Building, Hon. Mark Meadows
    [chairman of the subcommittee] presiding.
        Present: Representatives Meadows, Jordan, Carter, Grothman,
    Connolly, Maloney, Norton, and Clay.
        Also Present: Representative Hice.
        Mr. Meadows. The Subcommittee on Government Operations will
    come to order. And, without objection, the chair is authorized
    to declare a recess at any time.
        I want to thank all of you for being here. It was in August
    of this year that the Commerce Department's Office of Inspector
    General released what I would say is an alarming report
    detailing the potential time and attendance abuses at the U.S.
    Patent and Trademark Office. The OIG compared hours certified
    as worked by nearly 8,400 patent examiners with data such as
    records from either virtual private networks or computer
    workstation records or the like. This comparison actually
    allowed the OIG to assess whether or not the hours claimed by
    examiners were backed up by quantifiable data.
        The results are shocking. The OIG identified some 288,479
    unsupported hours by patent examiners over a 15-month period.
    Now, these hours equate to $18.3 million in potential waste.
    415 of the examiners covered in the analysis had 10 percent or
    more of unsupported hours. And, indeed, 310 of these examiners
    received above-average annual performance ratings and accounted
    for nearly 98,000 of the unsupported hours. The unsupported
    hours could have been helped to reduce patent application
    backlog, which currently stands at 540,000 or by some 15,990
    cases.
        What is most troubling is the numbers provided by the OIG
    are a conservative estimate. The OIG wanted to make sure that
    everything was done in an appropriate manner, and actually
    received the benefit of the doubt when making their analysis.
    By some less conservative assumptions, we could push the amount
    of unsupported hours to be nearly twice as high as the OIG
    reported. And this, indeed, is unacceptable.
        The report comes on the heels of a previous OIG
    investigation into examiner A. This examiner would often leave
    work early to play golf, and overall, examiner A committed to
    at least 730 hours of time and attendance abuses. This resulted
    in nearly $25,500 for time not worked. And I want to add is,
    when we have this, it has a chilling effect on other people in
    the workforce. So, conveniently for examiner A, he or she
    resigned on the advice from the union before action could be
    taken against him or her. Now, when the OIG retroactively
    tested it's methodology for the new report on examiner A's
    unsupported hours, it received a similar unsupported hour
    total. This shows that the OIG's methodology accurately
    measures the unsupported hours.
        Now, while not necessarily widespread, the OIG's findings
    do show that, at the U.S. Patent and Trademark Office, internal
    controls for fighting time and attendance abuse are lacking.
    The OIG has six recommendations that would help safeguard
    taxpayers from fraud at that agency. They include a requirement
    that examiners provide their supervisors with work schedules;
    examiners use their ID badges to exit the agency in turnstile
    facilities; and all examiners log into the USPTO network during
    their working hours while teleworking. Now, these commonsense
    recommendations should be adopted now.
        Now, while some may argue that the total amount of
    unsupported hours is less than 2 percent of the total work
    hours logged in by patent examiners, even 1 unsupported hour is
    too many. The American people deserve better. And I look
    forward to hearing your testimony on how we can not only
    address this issue but make sure that we have an accountable
    workforce going forward.
        Mr. Meadows. I'm going to wait and recognize the gentleman
    from Virginia for his opening statements here in a few minutes.
    And I will hold the record open for 5 legislative days for any
    member who would like to submit a written statement.
        The chair notes that the gentleman from Georgia, Mr. Hice,
    will be attending today. He was here earlier. We appreciate his
    interest in this particular issue. He is here now. I ask
    unanimous consent that Representative Hice be allowed to fully
    participate in today's hearing.
        And, without objection, so ordered.
        In addition to that, I make a unanimous request that we
    enter into the record the investigative report of the U.S.
    Patent and Trademark Office which would actually be the IG's
    report, the investigative report.
        And, without objection, so ordered.
        [The information follows]:
        [This report can be found on The Department of Commerce
    website at: https://www.oig.doc.gov/oigpublications/14-
    0990.pdf]
        Mr. Meadows. I'm pleased to actually welcome here the
    Honorable Russell Slifer, Deputy Under Secretary of Commerce
    for Intellectual Property and Deputy Director at the U.S.
    Patent and Trademark Office. Welcome.
        Mr. David Smith, acting deputy inspector general at the
    U.S. Department of Commerce. Welcome, Mr. Smith.
        Ms. Pamela Schwartz, president of the Patent Office
    Professional Association. Welcome, Ms. Schwartz.
        And Dr. David Chu, panel chair of the National Academy of
    Public Administration.
        Welcome to you all.
        And pursuant to committee rules, all witnesses will be
    sworn in before they testify. So if you would please rise and
    raise your right hand.
        Do you solemnly swear or affirm that the testimony that
    you're about to give will be the truth, the whole truth, and
    nothing but the truth?
        Thank you. You may be seated. Please let the record reflect
    that all witnesses answered in the affirmative.
        In order to allow time for discussion, please limit your
    oral testimony to 5 minutes. However, your entire written
    statement will be made part of the record.
        And so, Mr. Slifer, we'll come to you for 5 minutes.

                           WITNESS STATEMENTS

               STATEMENT OF THE HONORABLE RUSSELL SLIFER

        Mr. Slifer. Chairman Meadows, Ranking Member Connolly, and
    members of the subcommittee, thank you for this opportunity to
    discuss the United States Patent and Trademark Office's
    management of employees' time and attendance.
        I am proud of the work that our nearly 13,000 employees,
    including more than 8,300 patent examiners, to help our
    Nation's innovators secure intellectual property rights. The
    overwhelming majority of these employees are hard-working,
    highly educated, and highly skilled professionals who perform
    their jobs with the utmost integrity and dedication. We take
    seriously any allegation of abuse in our workplace. Any abuse
    of time and attendance by an employee is unfair to our
    stakeholders who rely on our agency and to the employees who
    abide by the rules. It is unacceptable and will not be
    tolerated within the USPTO.
        In recent years, we have made workforce management a
    critical focus and have invested a significant time and effort
    in improving our overall management for all employees,
    including teleworking employees and those stationed at our
    physical facilities. We have taken a number of concrete steps,
    including requiring new training for employees and supervisors,
    updating policies, adding controls, and building tools for
    supervisors to enable our supervisors to engage and manage
    their employees more effectively.
        Today, at the USPTO, supervisors receive extensive
    training, and they have a variety of tools in place to help
    monitor employees' attendance and work levels, regardless of
    where the employees are working. We have addressed our
    workforce management issues by providing new tools, policies,
    and guidance. My written testimony provides more detail on our
    extensive efforts to date. In the interest of time, I'll
    highlight just a few of those now.
        We created an IT dashboard tool to review employee-specific
    data to monitor examiners' production and timeliness, which can
    show early signs of changes in performance and potential time
    and abuse--time and attendance issues. We implemented a policy
    requiring all USPTO employees, supervisors, and full-time
    teleworkers to remain logged into the USPTO's IT system during
    working hours. We updated the overtime policy for patent
    examiners, emphasizing that exceeding production goals does not
    excuse employees from actually working claimed hours.
        We appreciate the work of the office of inspector general
    in preparing the August 2016 analysis of patent examiners' time
    and attendance. The findings and recommendations in the report
    serve as a valuable resource as we further enhance the
    extensive measures we have already taken to focus on time and
    attendance compliance among USPTO employees.
        We also appreciate the work of the National Academy of
    Public Administration for their study of our telework programs
    and controls.
        The USPTO is committed to implementing additional
    improvements as necessary in response to the IG's report.
    Because the report identified overall trends and didn't examine
    individual employee's cases, our team has worked to rigorously
    analyze the data in detail to better identify the nature of the
    unsupported hours. This refined analysis is helping us make
    tailored improvements to our overall workforce management.
    While the USPTO is certainly unique among Federal agencies in
    our ability to quantify the productivity of a majority of our
    employees, striking the right balance between management tools
    and employee productivity is a challenge faced by all
    employers, both public and private sector, and something that
    we strive to achieve in an effort to ensure the effectiveness
    and efficiency of our agency in order to better promote
    American innovation. We have and will continue to work toward
    ensuring proper and accurate accounting of all time and
    attendance. Any hour of time claimed and not worked is
    unacceptable.
        In closing, I want to underscore our continuing commitment
    to detect and address all cases of abuse and hold any employee
    who commits that abuse accountable while also strengthening our
    overall management and operations. As we continue to support
    our Nation's innovators, we know that we owe nothing less to
    our hard working and dedicated employees, to the stakeholders,
    and to the public we serve. Thank you.
        [Prepared statement of Mr. Slifer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you.
        Mr. Smith, you're recognized for 5 minutes.

                        STATEMENT OF DAVID SMITH

        Mr. Smith. Chairman Meadows, Ranking Member Connolly, and
    members of the subcommittee, I appreciate the opportunity to
    testify today. First, it is important to mention that our
    investigation found the vast majority of patent examiners'
    claimed hours were supported by evidence contained in the
    various records of computer activity that we examined. Our
    findings do not indicate this is a widespread problem, which
    echoes the NAPA report.
        Second, I would like to thank the employees at USPTO who
    reviewed our analysis and findings and helped us achieve the
    more accurate results contained in our report. It's rare that
    such a collaborative effort on such an investigation occurs,
    which is testimony to the professionalism of those employees.
        Even though it may not be widespread, the data establishes
    that claiming hours not actually worked is a problem at USPTO.
    An earlier OIG investigation uncovered paralegals at the Patent
    Trial and Appeal Board being directed by management to falsify
    hours over several years, and totaled more than $5 million in
    waste.
        Next, OIG reported on patent examiner A, who falsely
    claimed to work at least 730 hours in 2014 alone, which
    amounted to more than $25,000 of waste.
        Lastly, in August 2016, my office issued a report that
    identified over a 15-month period approximately 288,000 hours
    not supported by the data, which equates to over $18 million in
    potential waste. The analysis compared the time examiners
    asserted as computer-related work on their time sheets against
    four sets of data that evidenced computer work. For the hours
    examiners claimed but lacked any supporting data, we considered
    those hours to be unsupported. Our analysis included a separate
    9-month period when a policy change required full-time
    teleworkers to be logged into the USPTO network for all the
    hours claimed as teleworking. Evidence of substantial abuse by
    some patent examiners is particularly troubling, especially
    considering my office analyzed the data in a light most
    favorable to the patent examiners. OIG assumed for examiners
    working on campus that all computer-related worktime claimed
    supported from the time of arrival until the time they left or
    10 p.m., whichever occurred first, regardless of when they
    actually left the office.
        I want to emphasize again that the vast majority of patent
    examiners had few, if any, unsupported hours, and appeared to
    be working the hours certified on their time sheets. However,
    our approach identified 415 examiners who accounted for
    approximately 124,000 unsupported hours over a 15-month period.
    That amounted to almost 45 percent of the total unsupported
    hours we found.
        Of additional concern, approximately three-quarters of
    those 415 examiners received above-average performance ratings,
    and 30 percent of the unsupported hours for these high
    performers was claimed as overtime. Fifty-six of the 415
    examiners averaged 24 or more unsupported hours per 80 hours of
    analyzed time, which equates to 3 or more days of work for
    every 2 weeks of analyzed time. Seventy other examiners
    averaged between 16 and 24 unsupported hours per 80 hours of
    analyzed time.
        Our methodology may have been actually overly generous.
    When we analyzed the data for examiners, we switched to a
    router that provided more precise indication of online
    activity, the OIG found that the total number of unsupported
    hours actually doubled. In addition, the use of a less
    conservative methodology for on-campus examiners, using
    computer logoffs and other activity to determine work stoppage,
    increased the total unsupported hours by an additional 327,000.
        The OIG recognizes that examiners could conceivably perform
    examiner-related work offline. However, that would mean that
    those examiners are working offline for the entire day without
    logging into the USPTO network, without logging any activity in
    the patent examining application, and without checking their
    email. However, during the initial 6-month period where there
    was no requirement for them to be logged on, we found almost
    1,300 days in which full-time teleworking examiners had zero
    computer activity, not even checking their email once for 2 or
    more days in a row. Therefore, we recognize that it's possible
    on an individual basis; we believe it's just not a plausible
    explanation for the volume of unsupported hours.
        While we acknowledge the changes USPTO management has
    implemented in response to the previous OIG reports, there's
    still a lot of work yet to be done to improve internal controls
    over time and attendance reporting. Some of those improvements
    include empowering supervisors with the tools needed to enable
    them to properly monitor work performed by employees, a
    recommendation also contained in the NAPA report.
        In closing, we note that the OIG interpreted the exceptions
    to the Computer Matching and Privacy Protection Act of 1988 to
    prohibit pursuing criminal prosecution or civil remedies in
    recommending that the agency take administrative action against
    those examiners engaged in misconduct. In a September 13, 2016,
    hearing, the question was asked if the OIG report would be more
    accurate if the OIG had interviewed individuals. And the
    correct answer was yes. Therefore, if POPA and the other unions
    would encourage their members to voluntarily be interviewed by
    the OIG, we would be happy to interview the examiners to
    determine if any evidence exists to support their claims of
    hours worked. This would be done with the understanding that
    those results of the interviews would be made available to the
    USPTO to take appropriate action against any examiners found to
    have claimed hours where there was no actual work performed.
        I want to thank the subcommittee for the opportunity to
    testify today. And I look forward to your questions.
        [Prepared statement of Mr. Smith follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you, Mr. Smith.
        Ms. Schwartz, you're recognized for 5 minutes.

                      STATEMENT OF PAMELA SCHWARTZ

        Ms. Schwartz. Chairman Meadows Ranking Member Connolly, and
    members of the subcommittee, thank you for inviting me to
    present the views of the Patent Office Professional
    Association, POPA, on the inspector general's report on patent
    examiners' time and attendance.
        The OIG's conclusions contradict those of the National
    Academy of Public Administration, which reported in 2015 that
    it is, quote, ``unlikely that time and attendance abuse is
    widespread or unique to teleworkers, and it does not appear to
    reflect the activity of the workforce as a whole. The USPTO has
    requisite procedures in place to monitor time and attendance,''
    closed quote.
        The OIG's analysis is based on flawed methodology and
    faulty assumptions. Reliance on turnstile, VPN, and workstation
    records does not reliably capture all the work performed by the
    examiners. The OIG did not account for unrecorded,
    uncompensated overtime regularly worked by examiners to meet
    their production goals, which far exceeds the 2 percent
    unsupported time. The GAO recently issued a report on patent
    quality in which it concluded that 70 percent of examiners must
    work extra uncompensated hours to meet their required
    production quota. A companion GAO report found that examiners
    worked between 5 to 10 hours of uncompensated overtime each pay
    period on average. Even the OIG's report acknowledges that
    there were, quote, ``many days where the evidence of computer-
    related work activity appeared to exceed the time claimed for
    the day,'' closed quote.
        Even if a teleworker was not connected to the agency's
    computer system, this doesn't mean that she wasn't working.
    Many aspects of an examiner's job can and are routinely done
    offline, like working from printed application documents and
    studying printed copies of prior art patent and nonpatent
    literature. Furthermore, there was no policy requiring
    teleworkers to be logged into the agency's servers during all
    their working hours for a substantial portion of the 15 months
    studied.
        The OIG acknowledges that there was a statistically
    significant reduction in the number of unsupported hours
    following the issuance of the agency's full-time teleworker
    policy in February 2015. To the extent that some teleworkers
    did not consistently log into the agency's servers in the 9
    months immediately following the issuance of the policy, it
    only means that they were not yet conscientious about complying
    with the new policy.
        Buried in the OIG's report on page 17, footnote 39, is this
    important concession that undermines the report's conclusions,
    quote: ``Since the OIG methodology uses VPN and workstation
    records to support worktime for teleworkers, this approach
    could incorrectly determine that certain hours were unsupported
    if the examiners were working but did not connect to the USPTO
    network,'' closed quote.
        Even assuming that the OIG's methodology was accurate, the
    ostensibly unsupported hours equal only 1.6 percent of overall
    time, less than 8 minutes a day on average. A 98.4-percent time
    accounting efficiency rate demonstrates an extraordinarily high
    level of productivity for any employer. As a result of this
    extraordinary productivity, the examining corps has reduced
    both the backlog of unexamined patent applications as well as
    the average time for completing examination by 25 percent in
    the last 5 years.
        While potential amount of loss estimated by the OIG was $18
    million over 15 months, the USPTO saves over $100 million a
    year due to its extensive telework program, including over $38
    million in real estate savings. According to the USPTO, in
    fiscal year 2015, the 2,000 full-time teleworkers who
    participate in the Telework Enhancement Act pilot program were
    actually 6 percent more productive than other examiners in
    terms of annual production units, resulting in a revenue gain
    of over $35 million, far more than the alleged potential loss
    estimated by the OIG.
        Nonetheless, POPA is in full accord with the agency's
    efforts to ensure that all employees work their full 80 hours
    each pay period. POPA has worked with our management regularly
    to achieve full compliance with time and attendance
    requirements, and we will continue to do so. Thank you.
        [Prepared statement of Ms. Schwartz follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you, Ms. Schwartz.
        Dr. Chu, you're recognized for 5 minutes.

                     STATEMENT OF DAVID CHU, PH.D.

        Mr. Chu. Thank you, Mr. Chairman. Members of the
    subcommittee, it is indeed a privilege to appear before you to
    summarize the report by the National Academy of Public
    Administration on the telework program of the United States
    Patent and Trademark Office.
        I should emphasize the report was undertaken in response to
    the issues you identified earlier in this time period, really
    work in the fall of 2014, the spring of 2015. I should also
    emphasize that I'm appearing today as a fellow of the academy
    and not in my position with the Institute for Defense Analyses.
        The National Academy effort comprised two parts, an
    internal controls review undertaken in partnership with Grant
    Thornton, an accounting firm, and a program review on the
    efficacy of the telework program. The conclusions of the
    internal controls review were generally positive in character.
    Several essentially small deficiencies were identified that
    could easily be corrected. Much of the report is focused on the
    program review: How well does this program actually perform?
    And it's our conclusion that it is a valuable program from the
    perspective of managing the United States Patent and Trademark
    Office. Indeed, it's a foundational element of its business
    model as we're all aware. We conclude there's no difference in
    productivity between those who telework and those who do not.
    And our further conclusion was the telework program at USPTO
    ought to continue.
        We did have a series of recommendations to strengthen the
    ability of the program to perform effectively. And I'd like to
    touch very briefly on four of those recommendations. First, we
    felt there should be stronger tools in the hands of supervisors
    with regard to their ability to manage the examiners for whom
    they are responsible. We did a survey of supervisors. An
    important minority reported that they thought they needed more
    instruments in order to be effective as managers. It's a very
    simple step and which I'm pleased to understand that the office
    has taken--at least up to a certain point--is requiring a
    presence indicator be used. And the office now requires that of
    full-time teleworkers. We recommend it be done for all PTO
    employees. It's valuable, not only for the purpose of time and
    attendance, but also from the perspective of encouraging a more
    collaborative approach to the patent process.
        Second, the one difference we found between the Patent and
    Trademark Office telework program and telework programs
    elsewhere, both in governmental units and the private sector,
    is, in most other programs, telework is emphasized as a
    privilege, not a right. And we thought it would be useful for
    the office to signal that important distinction by requiring
    employees to re-sign their agreements every 2 years. It's my
    understanding that the agency has undertaken that step.
        Third, we believed it was timely to begin reviewing what
    standards for productivity we expect by art unit. These art
    units differ significantly in terms of their complexity and
    nature of the applications. Many of these standards date back
    to the 1970s and have not been substantially reviewed since
    that time. And, again, I'm pleased to understand that that
    series of reviews has just started. That is not a short-term
    fix. It will take time to understand what kind of productivity
    standards should Patent and Trademark Office employees sustain.
        And, finally, we felt there should be more attention not
    just to the volume of output but the quality of the patents
    that are granted. Ultimately, as we all understand, the ability
    to protect intellectual property correctly is a foundational
    element for the success of the American economy. That turns on
    the quality of the patents that are granted.
        Much of our discussion is today about inputs and outputs in
    the terminology of the government performance community. What
    really counts here are, what are the outcomes? And that
    importantly does turn on the quality of the patents that are
    granted.
        Thank you, Mr. Chairman. I look forward to your questions.
        [Prepared statement of Mr. Chu follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you so much.
        The chair recognizes the gentleman from Virginia, Mr.
    Connolly, for his opening statement.
        Mr. Connolly. Thank you, Mr. Chairman. I thank you for
    holding this hearing on the penultimate day of the 114th
    Congress. There is no human problem that cannot be improved
    with another hearing.
        Looking at the findings in the recent Department of
    Commerce IG report on time and attendance issues of patent
    examiners at the U.S. Patent and Trademark Office--and I want
    to thank the IG for his report--who found that 1.6 percent of
    the total hours that PTO examiners claimed they worked during a
    9-month period in 2015 lacked supporting computer evidence of
    actual work activity. The IG concluded that this could have
    resulted in potential waste of $8.8 million. The IG also looked
    at an overlapping 15-month period and concluded that the
    unsupported hours could have resulted in potential waste of $18
    million. However, the IG has found no proof of actual
    misconduct in this latest report. Let me be clear about my
    views on time and attendance abuse. It's unacceptable. Any
    amount of fraud, whether it's 1.6 percent of total claimed
    hours cited in the IG report or twice that amount, is
    unacceptable if proved true. The IG found that, for about 10
    percent of the hours worked by a small fraction of patent
    examiners, apparently no evidence of work activity from an
    evaluation of their computer use could be found. The IG notes
    that this problem was not widespread. The National Academy of
    Public Administration conducted a review of PTO's internal
    controls and came to that same conclusion. The IG's audit is
    valuable but incomplete. The IG's approach does not reflect any
    offline work done by patent examiners. The Patent Office
    Professional Association has already testified that many
    examiners routinely spend a portion of their work hours working
    offline, and even work overtime without claiming it.
        I understand that the IG has provided its data and
    algorithms to PTO to allow the agency to determine whether
    there in fact were cases of actual abuse of the agency's time
    and attendance policy.
        Another question raised by the IG's findings was whether
    there is a reasonable explanation for why the most unsupported
    time is associated with PTO's highest performing examiners. Do
    the findings suggest an indication of a complex managerial
    problem? A conflict between an examiner's production goals and
    time and attendance requirements? How can we resolve these
    conflicts to incentivize the agency's most efficient examiners
    to take work beyond their production goals?
        Lastly, I'd like to know, Mr. Chairman, as an original
    cosponsor of the Telework Enhancement Act of 2010, I take a
    special interest in PTO's telework program, which many agencies
    have viewed as a model. I understand some of my colleagues may
    suggest that the IG's report indicates a problem with PTO's
    telework program. But the IG's analysis does not make a
    comparison between teleworkers and on-campus workers. However,
    NAPA's 2015 study of PTO's telework program found no difference
    in the performance or conduct between these two groups of
    employees.
        The benefits of telework are significant. PTO's telework
    program has saved the agency more than $7 million during
    government closures, and the agency avoided more than $38
    million in rent in this last fiscal year alone.
        In addition, there's potential for traffic congestion
    relief--and as somebody who represents this area, we need it--
    and widespread adoption of telework policies governmentwide.
        I want to thank the witnesses for being here today, and
    thank you for your indulgence in my being here a little bit
    late. Thank you, Mr. Chairman.
        Mr. Meadows. Thank you.
        The chair recognizes the gentleman from Ohio, Mr. Jordan,
    for a series of questions.
        Mr. Jordan. Thank you, Mr. Chairman.
        Dr. Chu, what does NAPA stand for again?
        Mr. Chu. The NAPA report was----
        Mr. Meadows. Hit your red button there. Or make it red.
        Mr. Chu. My apologies. That report was based on work----
        Mr. Jordan. What's the organization? What's the acronym
    stand for?
        Mr. Chu. I'm sorry?
        Mr. Jordan. What's the acronym stand for, NAPA? What's it--
    --
        Mr. Chu. Oh, National Academy of Public Administration.
        Mr. Jordan. National Academy of--okay. And you guys did a
    study that reaches a different conclusion than the IG's report.
    Is that right?
        Mr. Chu. Well, our study is for a period prior to the most
    recent IG report.
        Mr. Jordan. You reached a different conclusion, different--
    different--your report----
        Mr. Chu. I believe the IG testified that he did not think
    it was widespread, time and attendance abuse. That is also--was
    also our conclusion. We did not see it as a widespread issue.
        Mr. Jordan. Well, the USPTO cites it as showing that
    different conclusion than the IG's report. Is that fair?
        Mr. Chu. I think we're all agreed that the fraction of time
    that is believed to be abusive is small. A goal, as I think the
    chairman emphasized----
        Mr. Jordan. Is your report different--is your report
    different than the IG's report?
        Mr. Chu. Excuse me?
        Mr. Jordan. Is your report different than the IG's report?
        Mr. Chu. Our report is different from the IG report in the
    following sense: we did not do the kind of analysis the IG
    undertook. What we sought to do was two things: First, look at
    the internal controls structure. That seemed basically sound.
    There were some small tune ups that came out of that process.
    Second, look at, how well does the program as a whole work?
    Yes, there have been abuses. Those were the product of earlier
    controversy that led to the NAPA report. There are anecdotes
    that we recommended. I'm delighted that the IG found that one
    of those anecdotes, the use of the presence indicator, has had
    some helpful effect.
        Mr. Jordan. All right. Thank you.
        Mr. Chu. You could go further in that direction, and we did
    so recommend.
        Mr. Jordan. Okay. Let me change the direction. What's the
    Elliot Richardson Prize?
        Mr. Chu. I'm sorry?
        Mr. Jordan. What's the Elliot Richardson Prize?
        Mr. Chu. It's a prize given by the academy for
    extraordinary public service to the United States.
        Mr. Jordan. Your academy. Right? NAPA? The one you just
    told me about. Right?
        Mr. Chu. Right.
        Mr. Jordan.Okay. And who was the recipient of last year's
    Elliot Richardson Prize.
        Mr. Chu. I don't remember who last year's recipient was.
    But I do remember it was Bob Gates a couple years before that.
        Mr. Jordan. What about the 2016? Who won the 2016 prize?
        Mr. Chu. I apologize. I don't recall.
        Mr. Jordan. Do you know what the criteria is that is used
    in selecting who's going to win this Elliot Richardson Prize?
        Mr. Chu. It is sustained excellence to the service of the
    United States, essentially.
        Mr. Jordan. Okay. And you don't know who won last this
    current year, 2016.
        Mr. Chu. I should remember, but I don't remember.
        Mr. Jordan. Are you on the board who selects that person?
        Mr. Chu. No. I do not select.
        Mr. Jordan. Okay. But you're here representing today NAPA.
    Right?
        Mr. Chu. I'm here as chair of the panel that did the United
    States Patent and Trademark Office review of the telework
    program.
        Mr. Jordan. Are you of--and you're part of NAPA, correct?
        Mr. Chu. I'm a fellow of NAPA. Right.
        Mr. Jordan. You're a fellow at NAPA, and they have this
    award, the Elliot Richardson Prize, and last year's winner--and
    you don't know who this year's winner of that prize was.
        Mr. Chu. I don't, sir. I'm terribly sorry.
        Mr. Jordan. Would it surprise you if it's the IRS
    Commissioner, John Koskinen? Would you be surprised that that's
    the guy who was selected for outstanding public achievement?
        Mr. Chu. I think that was--I think you're right, sir. I
    think they did select Mr. Koskinen.
        Mr. Jordan. Oh, you can remember now, right? So it was Mr.
    Koskinen.
        Mr. Chu. You refreshed my memory.
        Mr. Jordan. I refreshed your memory. Good. And I look at
    the criteria for that award and it says ``significantly
    advancing the public good.'' You all felt that John Koskinen
    significantly advanced the public good last year?
        Mr. Chu. That was the conclusion of the selection panel.
    I'm not part of that process.
        Mr. Jordan. Do you know who else might have been considered
    for last year--for this year's 2016 award? Who else may have
    been in the running for that?
        Mr. Chu. I don't, sir.
        Mr. Jordan. I'd be curious to see who was turned down, who
    was not given that award and Mr. Koskinen was selected over
    them.
        Do you understand, Dr. Chu, that Mr. Koskinen gave false
    statements to this very committee? Do you understand that
    happened?
        Mr. Chu. I know there's been considerable exchange between
    this committee and Mr. Koskinen, yes, sir.
        Mr. Jordan. Do you understand, when Mr. Koskinen was
    brought in as Commissioner of the IRS, that 422 backup tapes
    containing 24,000 emails were destroyed under his watch? Do you
    understand that fact? Or did the folks at NAPA understand that
    fact? I'd be curious to know.
        Mr. Chu. I know the public discussion between this
    committee----
        Mr. Jordan. Do you know that he withheld information from
    Congress? After he learned in February, he waited 4 months
    before he told Congress about missing Lois Lerner emails. And
    you come in here and tell us your organization, which reaches
    different conclusions or slightly different conclusions than
    the inspector general, and last year, you gave the outstanding
    public achievement by--the achievement says significantly
    advancing the public good. You gave that award to John
    Koskinen?
        Mr. Chu. I didn't, sir. The----
        Mr. Jordan. No, the organization. But you're representing
    NAPA, right?
        Mr. Chu. I'm a fellow of the organization. That's correct.
    I'm not part of the award process. I would point out----
        Mr. Jordan. Do you know if John Koskinen was a contributor
    to NAPA? Do you know if he's given money to that organization?
        Mr. Chu. I don't know, sir.
        Mr. Jordan. Okay. Okay. All right. And you don't know who
    was passed over so that Mr. Koskinen could receive this
    outstanding public servant award last year.
        Mr. Chu. I'm sorry. What's this?
        Mr. Jordan. And you don't know who was passed over, who was
    not given the award, who was under consideration and not given
    the award so that Mr. Koskinen could----
        Mr. Chu. Sir, no, I have no insight into the process.
        Mr. Jordan. All right.
        Mr. Chairman, I yield back.
        Mr. Meadows. The chair recognizes the gentleman from
    Virginia, Mr. Connolly.
        Mr. Connolly. Well, Mr. Chu, for a different point of view,
    congratulations on naming an honorable public servant, Mr.
    Koskinen, as your outstanding awardee last year. And no amount
    of innuendo or smear is going to tarnish his reputation. I've
    known him for a long time. And I consider him one of the most
    honorable public servants I've known in a long time. So I guess
    we're all entitled to our point of view. But I wanted you to
    know right away there is a different point of view. And
    congratulations. He deserves it. And I thank you for doing it.
        Mr. Smith, I'm looking at your report. And I want to be
    real clear. You found potential waste in roughly 1.6 percent of
    the time and attendance records you looked at. Is that correct?
        Mr. Smith. Yes, sir. That is correct.
        Mr. Connolly. You did not in fact document actual waste.
    And I'm not--I mean, it's out there potentially, but there's no
    dollars or cents to actual documented waste. Is that correct?
        Mr. Smith. Well, Mr. Connolly, as I was mentioning in my
    opening statement--you might have missed it--that we would be
    more than happy to interview these employees with POPA
    encouraging their employees to come be interviewed. The problem
    is we ran against the Computer Matching Act, which does not
    allow the combination of information from various computer
    databases to then proceed and contain any kind of disciplinary
    reaction. However, I would like to read for you a quote that
    was in one of the IP Watchdog newspapers or articles. It says:
    Some patent examiners have contended on IP Watchdog and
    attempted to explain their actions are innocent but have
    actually admitted to committing fraud. These patent examiners
    have explained that, because of their superior talents, they're
    capable of doing their work in a fraction of the time the
    office thinks it should take them to do the work. Multiple
    examiners have said here on IP Watchdog that if they are, for
    example, allocated 3 hours to do a task and can do it in 2
    hours, then there's absolutely nothing wrong with them claiming
    all 3 hours on their timesheet. One examiner actually said that
    he or she is capable of doing work twice as fast, using an
    example where the office allocates 20 hours to complete a task,
    presumably an entire application, but the examiner's able to
    get it done in 10 hours. Of course, that examiner explained
    he's completely justified in claiming all 20 hours worked on
    his timesheet.
        So I have a confession here by at least one that they did
    fraudulently fill out their timesheet.
        Mr. Connolly. Well, are you contending, Mr. Smith, that
    that one so-called confession somehow characterizes widespread
    fraud within PTO?
        Mr. Smith. Sir, there is nowhere in our report that we use
    word ``widespread.'' And as I said in my opening----
        Mr. Connolly. I'm asking you, sir, a question on what you
    just said. What conclusion are you drawing from one person, one
    interview?
        Mr. Smith. That was not one person. The author cited
    multiple people----
        Mr. Connolly. Who admitted to fraud? Excuse me. Who
    admitted to fraud?
        Mr. Smith. Yes.
        Mr. Connolly. Multiple people?
        Mr. Smith. Multiple people.
        Mr. Connolly. What did you do with that? Did you refer it
    to legal authorities?
        Mr. Smith. As I mentioned, the Computer Matching Act does
    not allow us to go after these individuals. Now that the IP--
    Empowerment Act has been passed that exempts us from the
    Computer Matching Act, we can now go forward under this. But
    for right now, our hands are tied unless the individuals want
    to come in voluntarily for an interview.
        Mr. Connolly. Well, I think one needs to be a little bit
    careful about drawing broad conclusions from particular
    incidents. None of us want to see timecard fraud. And in fact,
    if you uncover it, we want to see it pursued. But I am
    concerned that it comes to characterize an agency where it may
    or may not in fact be at all characteristic of normal practice.
        Mr. Smith. And, sir, I stated that twice in my opening
    statement.
        Mr. Connolly. Good. But you know how this works, Mr. Smith.
    That's not what the story will be.
        Mr. Smith. Sir, I can't control what people do with the
    facts we've reported.
        Mr. Connolly. No. No, I know. You have no responsibility
    for that. I've seen a lot of IGs take the same position as they
    do damage to the reputations of individuals and agencies.
        Mr. Slifer, do you want to comment on that, that people
    apparently in your organization admitted to fraud, according to
    Mr. Smith?
        Mr. Slifer. Well, thank you. I certainly can't comment on
    the anecdotal article in a blog that was just quoted as being
    evidence or admission of a particular examiner.
        Our examiners have a very difficult job. Our examiners have
    got scientific, engineering, advanced degrees and have a very
    difficult job to examine patent applications and understand
    prior art, legal arguments, and synthesize all of that data
    into an examination for----
        Mr. Connolly. All right. All right. I got it. But you're
    sitting next to the acting deputy inspector general, who,
    through his words, is clearly making a statement about a
    practice, not widespread, but it's occurring, and it's fraud.
    That's the word he uses. I want you to respond to that. Is it
    in fact a big problem or a contained problem, but nonetheless a
    problem, from your point of view?
        Mr. Slifer. No. It's not a widespread problem.
        Mr. Connolly. I didn't say ``widespread.'' Mr. Smith
    corrected me properly. Their report doesn't say ``widespread,''
    nor do I. I'm asking you, is it a contained problem? Is it
    something you're worried about? Is it something you recognize
    as in fact a practice that has to be addressed by these
    examiners who are specialized and doing difficult work?
        Mr. Slifer. The Patent Office takes----
        Mr. Connolly. I can't hear you.
        Mr. Slifer. I'm sorry. The Patent Office takes any----
        Mr. Connolly. I know. Yes, yes. I know; we all take it
    seriously. But I'm asking you to comment on what Mr. Smith said
    in his findings. Is that consistent with what you know about
    your agency?
        Mr. Slifer. It is not consistent----
        Mr. Connolly. It is not consistent.
        Mr. Slifer. Yes.
        Mr. Connolly. Why is that?
        Mr. Slifer. Because I know that our examiners are working.
    I know, looking at their production requirements. I know,
    talking to our----
        Mr. Connolly. Would you take issue with Mr. Smith that
    people, according to him, self-admitted fraud, timecard fraud?
        Mr. Slifer. If we had an examiner who self-admitted--that
    admitted to fraud, we're certainly going to----
        Mr. Connolly. Well, he gave one example, but he claims
    there were more than one.
        Mr. Slifer. I'm not aware of any.
        Mr. Connolly. Thank you.
        Mr. Meadows. I thank the gentleman.
        The chair recognizes himself for a series of questions.
        Mr. Slifer, let me come to you, because I find this
    fascinating. You're saying that you do not have a problem, in
    spite of what the inspector general's report suggests, that you
    do not have a problem. That's your sworn testimony here today?
        Mr. Slifer. It is.
        Mr. Meadows. With 400--in at least 400 different cases, you
    don't have a problem?
        Mr. Slifer. The data that the inspector general looked at--
    --
        Mr. Meadows. That's not my question. You just testified
    that you do not have a problem. Is that your sworn testimony
    here today? Because I'm going to drill down on it if that's
    your sworn testimony.
        Mr. Slifer. It is.
        Mr. Meadows. So what you're suggesting, there is no time
    and abuse problems with regards to reporting?
        Mr. Slifer. I did not say there's no time and abuse
    problems. We have disciplined 30 people.
        Mr. Meadows. So how many people have you let go?
        Mr. Slifer. We have either----
        Mr. Meadows. Because of this.
        Mr. Slifer. We're not----
        Mr. Meadows. I know the answer. You go ahead. I mean, how
    many people have you let go because of this?
        Mr. Slifer. Because of the inspector general report?
        Mr. Meadows. Yes.
        Mr. Slifer. Zero.
        Mr. Meadows. Yes. That's the answer.
        Mr. Slifer. We're not allowed----
        Mr. Meadows. So how are you taking it seriously? So what
    other kind of punishment have--here's my problem, is I go to
    Federal agencies, and I find that we have some of the greatest
    Federal workers, truly, in not only just in the public sector
    but in the private sector. And so you've got over 8,000 great
    employees, and you've got 400 or so who are taking advantage of
    the system and perhaps giving a bad report because--and
    actually giving a bad taste to teleworking, which I don't know
    that that is a hypothesis that I would support, because of the
    400 that don't log in. Are you suggesting that it's okay to not
    log into their computer for 2 days and actually they're doing
    work? Because according to Mr. Smith, he said, even if they
    checked their email in a 2-day period, he'd give them the
    benefit of the doubt. So do you think that you can actually do
    your work without checking an email or actually going--do you
    think you can actually do that for 48 hours and actually be
    working, Mr. Slifer?
        Mr. Slifer. The nature of the examination process, yes,
    there can be.
        Mr. Meadows. For 2 days?
        Mr. Slifer. Yes. Is that the best practice? No. And we
    instituted a change----
        Mr. Meadows. So have you implemented all the
    recommendations there that the IG----
        Mr. Slifer. In the current report?
        Mr. Meadows. --recommended? Have you implemented all of
    those?
        Mr. Slifer. I'd be happy to walk through them with you,
    each one.
        Mr. Meadows. Just yes or no. Have you implemented all of
    them?
        Mr. Slifer. We have addressed each one, and we are close to
    implementing all of them.
        Mr. Meadows. When will you be done with implementing all of
    the recommendations?
        Mr. Slifer. There is a significant capital investment in
    some of the requirements. Our budget is not at this----
        Mr. Meadows. So you're saying this is a cashflow problem.
        Mr. Slifer. I'm not saying it's a cashflow, but some are
    multimillion dollar investments.
        Mr. Meadows. Okay. Because I'm going to allow you a little
    bit of flexibility here. But let me tell you the trouble that I
    have with some of your testimony. I read the report. And what I
    find in the report is, is there is no logical conclusion that
    you could come to, other than someone is gaming the system.
    There is no explanation for it. And what I'm going to do is, in
    support of the 8,000 good employees that you have, I'm not
    going to let the 300 or 400 get by with it. Do you follow me?
    And neither should you. Are you going to hold everybody
    accountable to the same standard? Because what I saw was that
    you gave bonuses, significant bonuses, to some of the people
    that actually were perhaps the most troublesome in this report.
    Would you agree with that, that you gave them above-average
    performance review and bonuses?
        Mr. Slifer. Some of the individuals identified in the top
    by the inspector general did both receive bonuses and have----
        Mr. Meadows. So what kind of message of giving a bonus and
    good reviews to someone who does not act the way that the other
    8,000 would act, what kind of message does that send to the
    good employees?
        Mr. Slifer. Well, I would prefer to dig into the data and
    find out exactly why there's a difference between the digital--
    --
        Mr. Meadows. I would prefer that you dig into the data too,
    Mr. Slifer, but it doesn't look like you're digging into it.
        Mr. Slifer. Well, we have been for several months working
    on this.
        Mr. Meadows. But you've fired no one. And what other
    disciplinary actions have you had?
        Mr. Slifer. I'm not allowed to fire anybody as a result of
    this.
        Mr. Meadows. What other--we have already established that
    you fired no one. What other disciplinary actions have you had?
        Mr. Slifer. We have actually disciplined and terminated 30
    of the individuals listed in the top 300. But that was done
    independent of the inspector general's report.
        Mr. Meadows. So you fired them for another reason.
        Mr. Slifer. No. We had fired them independent of the
    report. Our internal controls had already identified those
    individuals before the report was published.
        Mr. Meadows. So now you can't have it both ways, Mr.
    Slifer. Your testimony was that you didn't have a problem. And
    now you're saying that you do have a problem, that you got rid
    of 30 people. So which is it? Do you have a problem, or you
    don't have a problem?
        Mr. Slifer. Sir, 30 out of----
        Mr. Meadows. Because 30 people may have a grievance that
    you fired them for no problem. Do you follow me?
        Mr. Slifer. I understand that any agency of our size will
    have individuals that need to be disciplined. And we have
    policies and procedures to address that. I don't believe that
    it is systemic, as identified by NAPA and agreed to----
        Mr. Meadows. I'm saying it's systemic within 400-plus
    employees that the inspector general's report pointed out. I'm
    not saying the other 8,000. In fact, I give them great rewards
    for what they're doing. And if they're watching right now, let
    me just tell you, I'm telling them that I've got their back.
    I'm looking forward to whistleblowers telling me about other
    issues. And if they'll call, I promise you I will personally
    follow up on it because it's apparent that you're not willing
    to do that.
        Mr. Slifer. I disagree. The agency has taken substantial
    steps and continues. We don't take this lightly ourselves. But
    I will----
        Mr. Meadows. Okay. You don't take it lightly. So help me
    reconcile the two parts of testimony. You don't take it
    lightly, but you don't have a problem. So which is it? Because
    you just in the last 6 minutes you said you don't have a
    problem and now you're saying you don't take it lightly. So
    which is it?
        Mr. Slifer. I believe my testimony is that we don't take it
    lightly, while we recognize that there's always going to be
    individuals in an agency of 13,000 who don't follow our rules,
    don't follow our procedures, that are going to require
    discipline. We take it seriously, and we discipline those
    individuals.
        Mr. Meadows. So you do have a problem. All right.
        I'll recognize the gentlewoman from the District of
    Columbia, Ms. Norton.
        Ms. Norton. Thank you, Mr. Chairman.
        This is an important hearing because, of course, abuse of
    time and attendance is always unacceptable, whatever the
    amount. The amount here seems low, but it's worthy of some
    oversight.
        I do have to say something about what the chairman
    indicated. He wondered whether or not anyone had been let go
    because of the IG report. Of course, you cannot be let go
    because of a report, even of an IG. Under civil service law,
    it's an accusation, and you'd have to go through the process
    for independent substantiation. That is the law so that, of
    course, we do have to understand when you can take action and
    when you cannot, and of course, you couldn't take it, whatever
    the outcome of this report.
        And I also have to say, Mr. Chairman, that I was amazed in
    the wake of the recent report not to impeach Mr. Koskinen, that
    that issue would be raised in an effort to relitigate it at
    this hearing. There has just been an overwhelming vote. There
    was a privilege resolution on the floor to impeach Mr. Koskinen
    based on the findings, I might add, of this committee and
    overwhelmingly voted to send it back to committee, to the
    Judiciary Committee, which, of course, kills it. You can't kill
    some things. They just refuse to die.
        And if I may say, for the record, if Mr. Koskinen was given
    a reward, it probably had to do with the fact that he has been
    called in time and again by Democratic and Republican
    Presidents to straighten out troubled agencies, just as he was
    summoned to straighten out the IRS. And I'm sorry I had to take
    some of my time for that. It seemed to me that those two issues
    deserved a response.
        What intrigued me about Mr. Smith's report was the number
    of those with the best annual ratings who had these time and
    attendance issues. I think 81 percent of the unsupported hours,
    if I have the record correct----
        Mr. Smith. Forty-three percent of the hours, ma'am.
        Ms. Norton. Forty-three percent?
        Mr. Smith. Yes, ma'am.
        Ms. Norton. Thank you. Now, Mr. Smith, your testimony, your
    report says: The existence of highly rated examiners with large
    unsupported regular and overtime hours indicates that these
    examiners are likely exceeding their performance goals in less
    than the time allotted.
        I had staff get me your testimony, and they brought me your
    printed testimony. I appreciate it. And on page 3, because my
    first question was, when was the last time these performance
    goals were looked at? How timely is the data on which we are
    relying? And here I am quoting from your report on perhaps the
    most important recommendation: We recommended that the USPTO
    reevaluate its examiner production goals for each group of
    examiners and revise them to the extent necessary.
        And here's the operative sentence: Production goals were
    last set by art unit, as it is called, in 1976, and much has
    changed since then.
        I'm astonished. We're working off of goals that--when I
    wasn't even thinking of coming to Congress. Could this account
    for why so many of the highest performers--in fact, I must ask,
    what makes you a high performer? How are you even judged--who
    are high performers if 43 percent of the hours were from these
    high performers, how are they evaluated?
        Mr. Smith. I'd have to defer that to PTO, ma'am. It's a
    management issue.
        Mr. Slifer. I'd be happy to address that. While the time
    that is allocated for an examiner to spend examining an
    application based on either the technology or their seniority
    and experience hasn't been fully reviewed since the 1970s, we
    are undertaking that massive project right now.
        But the performance goals for each individual have been
    adjusted, and we have looked at it over the course of even the
    last couple of years to set those standards. And the GAO
    recently came out with a study that indicated that 70 percent
    of our employees don't have enough time to reach the production
    goals that they have.
        We understand that, on a bell curve of individuals, we'll
    have some that have the ability to understand the data,
    synthesize it, produce their work product faster than others.
    We still expect them to finish their full 80 hours. We expect
    them to put in all of their time, whether they've completed
    that or not. We even have an incentive program to incentivize
    them to produce additional work product for the agency to help
    us reduce our backlog in pendency, which I'm happy to say, over
    the course of the last 6 years, has dropped from over 700,000
    cases to the 500,000 we have now.
        Ms. Norton. So are these performers moving on to take on
    additional work?
        Mr. Slifer. That is what----
        Ms. Norton. These best annual performers----
        Mr. Slifer. Yes.
        Ms. Norton. Who apparently have some of the poor ratings
    time and attendance ratings.
        Mr. Slifer. I want to be careful and I believe----
        Mr. Meadows. The gentlewoman's time is expired, but please
    do answer the question.
        Mr. Slifer. The inspector general is looking at digital
    data, security data, security entering our building, security
    entering our IT, and looking at that to see if it provides a
    verification of an examiner's timecards that they filled out.
    Where there's a mismatch, there's a question because there's no
    way at that point to verify whether an examiner was or wasn't
    working. We have looked at that data and looked at other data
    in the agency, and I can say that, of some of those individuals
    that are highlighted, I can show that they worked Monday
    through Thursday, 10 hours a day but entered 8 hours a day on
    their timesheet, showing that they did not work on Friday,
    when, in fact, they worked the full 40 hours that week.
        So I know that the data is not 100 percent accurate as a
    verification of the veracity of the timesheet, and that's
    something that the agency is digging into so that we can make
    changes, not only reminding our employees of their requirements
    to abide by filling out the timesheet properly, putting in
    their full 80 hours, but narrowing up the gap between that data
    and their timesheet so that we can more accurately identify any
    areas in the agency where we do have time fraud, instead of
    losing it in a large analysis like this. Thank you.
        Mr. Meadows. I thank the gentlewoman.
        The chair recognizes the gentleman from Wisconsin, Mr.
    Grothman.
        Mr. Grothman. Sure. A couple questions for Mr. Smith. First
    of all, the information here says we have 415 patent examiners
    responsible for 93--or 43 percent of the unsupported hours. But
    I want you to talk a little bit about the methodology as to
    whether you think that's a hard number or what it takes to be
    considered, I guess, not showing up.
        If I come in and I stand there for 5 minutes and document
    that I'm there for 5 minutes a day and then I go out golfing
    for the day, how do you record that?
        Mr. Smith. We did not take an overly harsh look at the time
    records that were or the time periods that the employees
    actually claimed. If an employee swiped in and said they were
    there for 8 hours, then we gave them credit for 8 hours. If we
    were to take a more harsher view and go back and look at actual
    computer time spent, some type of activity on their computer,
    it would increase the number of unsupported hours for the on-
    campus employees by 327,000 unsupported hours.
        The PTO requires their employees to only swipe out between
    10 p.m. And 5:30 a.m., so the employee could go in, swipe his
    badge, claim 8 hours, not even turn on his computer at all, not
    even do any work. He could be another examiner A.
        Mr. Grothman. So this just means that you were basically in
    the building, not working?
        Mr. Smith. Yes, that is correct.
        Mr. Grothman. And only in the building for 5 or 10 minutes.
        Mr. Smith. But yet I affirmatively charged 8 hours, saying
    I was working on my computer.
        Mr. Grothman. And even then, if you checked that, could
    they be hardworking at their computer playing video games or
    something?
        Mr. Smith. Potentially.
        Mr. Grothman. Okay. Wow, it's shocking, shocking, shocking,
    shocking. Well, I don't know. I guess it confirms what a lot of
    people think about the Washington, D.C., work ethic for some
    people.
        We'll give you a question here. Now, how many of these
    people have been prosecuted, even under your relatively low
    standards? I realize you have time constraints yourself. Under
    the relatively low standards that you're laying out here, how
    many have been prosecuted?
        Mr. Smith. We have presented these time and attendance
    cases to U.S. Attorney's Office in the past, and they have
    declined because they say they have to actually go hour by hour
    and prove that the employee was not physically working, and
    that's a bit of a burden for them, so they deadline all the T&A
    cases we present to them. So the answer to your question: none.
        Mr. Grothman. If I had to just put a dollar amount, say on
    when some of the guys or gals don't show up, you know, you'd
    have to know how many hours they're not showing up, assuming
    they're working when they're in, but how many hours they're not
    showing up and what their salary is. Can you guess on some of
    the most egregious cases over the last few years how much
    they're taking the government for?
        Mr. Smith. We found that examiner A was taking the
    government, on a conservative estimate, for $25,000 just in
    2014 alone. And the total of these 415 individuals we figured
    was about $18 million just in pay and benefits.
        Mr. Grothman. Wow, I remember back home sometimes people
    would be caught stealing, some public officials, and they wound
    up going to prison for years. So how many of these that you
    mention of the golden 415 we have here, how many have been
    subject to administrative action?
        Mr. Smith. I would have to defer that to PTO, sir.
        Mr. Grothman. Okay. But nobody prosecuted. Why not? Can you
    tell us, are there any proposals out there that you're aware of
    floating through Congress that may do something to improve the
    environment a little bit?
        Mr. Smith. Yes, sir. As I mentioned earlier, we got word
    that both the House and the Senate have approved the IG
    Empowerment Act, which exempts the IGs from the Computer
    Matching Act so that if we were to do this exercise again, we
    would be able to turn that information over to the agency to
    take administrative discipline.
        Mr. Grothman. Do you have any reason why we wouldn't pass
    that bill?
        Mr. Smith. I don't currently see any reason. CIGI is in
    full support of that bill. However, I do understand there is a
    hold on that right now.
        Mr. Grothman. Okay--do we know who's putting the hold on
    it?
        Mr. Smith. I don't recall the person's name, sir.
        Mr. Grothman. Okay. We should talk about that a little bit
    and see who that is. Well, I have a little bit of time left,
    only a few seconds, and I know how much Chairman Meadows covets
    these seconds.
        So I yield them back to him.
        Mr. Meadows. I thank the gentleman from Wisconsin.
        The chair recognizes the gentleman from Georgia for 5
    minutes.
        Mr. Hice. Thank you, Mr. Chairman.
        Ms. Schwartz, how long have you worked at the USPTO?
        Ms. Schwartz. Thirty-four years.
        Mr. Hice. Thirty-four years. That's a long time. Your
    current pay grade, you're GS-14, ballpark $150,000?
        Ms. Schwartz. Yes.
        Mr. Hice. Okay. It's my understanding that your particular
    area of expertise is as a patent examiner for chemical
    engineering patents. Is that correct?
        Ms. Schwartz. Yes. But for full disclosure, as president of
    the union, I have worked for the union for several years
    without patent examining.
        Mr. Hice. Okay. So how long have you been doing that?
        Ms. Schwartz. This is not going to be accurate. I'm going
    to say approximately 8 years.
        Mr. Hice. Approximately 8 years. So, as an individual to be
    looking after chemical engineering patents, you've not been
    doing that for 8 years?
        Ms. Schwartz. For approximately 8 years, yes.
        Mr. Hice. Okay. So you're on official time. Is that
    correct?
        Ms. Schwartz. Yes.
        Mr. Hice. So official time means you were hired to work
    with patents and chemical engineering patents, but instead of
    doing the job for which you were hired, you're doing union
    work. Is that correct?
        Ms. Schwartz. I'm doing union work. That's correct.
        Mr. Hice. Okay. But that's not what you were hired to do.
    You were hired as a chemical engineer patent examiner?
        Ms. Schwartz. Yes.
        Mr. Hice. Okay. So the American people are paying you to do
    something that you were not hired to do. Was anyone hired in
    your place to do the work that you're not doing?
        Ms. Schwartz. I can't tell----
        Mr. Hice. Mr. Slifer, was anyone hired? Do you know?
        Mr. Slifer. I left private industry 2 years ago, so I can't
    speak to what happened 8 years ago.
        Mr. Hice. What's happening now? Has anyone been hired to do
    the job that Ms. Schwartz was hired to do that she's not doing?
        Mr. Slifer. I don't believe I can speak directly to that,
    but----
        Mr. Hice. Do you know how many people are doing official
    time who were hired to work at the Patent Office but they're
    doing union work?
        Mr. Slifer. I do not, but I would be happy to----
        Mr. Hice. Would it surprise you that there's 154 such
    individuals?
        Mr. Slifer. Again, I wasn't aware of how many.
        Mr. Hice. It would seem to me that being entrusted with the
    good faith of the American taxpayer, that you would have an
    understanding of how many people have been hired to do work
    that they're not doing. This just absolutely is astounding to
    me, Ms. Schwartz, that you are hired to work with folks seeking
    a patent, but you're not doing that. So the American people are
    subsidizing union work and paying you $150,000 to do union
    activity rather than to do the work you are hired to do.
        Ms. Schwartz. Congressman, a lot of the work I do is
    assisting the agency in implementing its----
        Mr. Hice. But that is not what you were hired to do. You
    were not hired to do union work.
        Ms. Schwartz. I am assisting the agency in meeting its
    mission by assisting them in developing and implementing
    programs. For example, last year----
        Mr. Hice. How many clients have you worked with in the last
    8 years?
        Ms. Schwartz. I'm sorry?
        Mr. Hice. How many people who are seeking a chemical
    engineering patent have you worked with?
        Ms. Schwartz. None in the last 8 years.
        Mr. Hice. But that's what you were hired to do. So I'm
    really curious about your daily schedule. What do you do on a
    daily basis?
        Ms. Schwartz. On a daily basis, I deal with a number of
    different issues. Many of them are assisting the agency in
    developing and implementing programs to meet the mission of
    reducing pendency and increasing quality. Over the last year,
    my organization has reached many agreements to help the agency
    with its----
        Mr. Hice. That's fine, Ms. Schwartz, and I'm glad your
    agency is doing it. I'm not attacking your union, nor am I
    attacking your union work. The problem I have is that you are
    using the time that the American taxpayer paid you to do as a
    patent examiner, and you're doing zero of that. You've done
    none of that in 8 years, and instead, you've been doing union
    work on the time that the taxpayers have asked you to be a
    patent examiner. You can do your union work, just not during
    this. I would like, I'm really curious about your daily
    schedule. I would like for you to provide this committee with a
    copy of your daily schedule, just your work hours--not
    interested in your personal time--but what you do from your
    clock-in official time for the last 6 months. Will you provide
    that for us?
        Ms. Schwartz. I will try to provide that.
        Mr. Hice. When can we expect to have that calendar?
        Ms. Schwartz. I can probably provide this--I'm going to
    have to--I can probably provide this in a reasonable time, but
    I can't assure that everything on this--I have a calendar that
    I keep. I can't assure that everything on it is accurate, and
    it won't have hour by hour because there are hours that are
    open that I have not written down every activity during those--
    --
        Mr. Hice. But everything that you have written down, I
    would like to have submitted to this committee for the last 6
    months.
        Ms. Schwartz. I will do that.
        Mr. Hice. Thank you very much.
        And, Mr. Chairman, I yield back.
        Mr. Meadows. I thank the gentleman.
        And we are going to go into our second round of questioning
    at this point, and so we will recognize the gentleman from Ohio
    for 5 minutes.
        Mr. Jordan. Thank you, Mr. Chairman.
        It seems to me if you could summarize, Mr. Smith does his
    investigation and finds there are folks cheating the timecard,
    415 of them to be exact, accounting for 43 percent of total
    unsupported hours. Mr. Slifer says that is not a problem
    because it wasn't everyone. And Ms. Schwartz agrees with him
    and cites the report done by Dr. Chu, a report that he co-
    authored and a report produced by an organization that this
    year gave its top public servant prize to a guy who was
    censured by this committee. Now if that's not a story line, I
    don't know what is. I mean, think about that. Think about that.
    Top public servant, they're citing as evidence that it's not a
    problem; cheating the timecard is not a problem. They're citing
    the NAPA report as evidence to support their claim it's not a
    problem, even though it was 43 percent of all unsupported
    hours, even though it was 415 individuals. They said an
    organization that gave an award to a guy who was censured by
    this very committee as support for their position. I just find
    this--if you wonder why people have had it with Washington,
    D.C., just look at that. Look at the fact pattern in front of
    us, Mr. Chairman. So I appreciate you having this hearing.
        One other question if I could for you, Dr. Chu. Are you a
    fellow at the organization at NAPA?
        Mr. Chu. Yes, I'm a fellow.
        Mr. Jordan. And who nominates people for consideration for
    the Eliot L. Richardson Prize?
        Mr. Chu. I don't know, sir.
        Mr. Jordan. It's my understanding that fellows nominate
    them, nominate those individuals who are considered by the
    organization to receive this prestigious award. You didn't
    nominate him?
        Mr. Chu. No, sir, I did not.
        Mr. Jordan. Do you know who did?
        Mr. Chu. I don't, sir.
        Mr. Jordan. Again, Mr. Chairman, I just find this
    remarkable. People cheating the timecard, 415 of them, almost
    half of all unsupported hours that accounts for. Mr. Slifer
    tells you in your round of questioning ``not a big deal because
    it wasn't everybody.'' And Ms. Schwartz says we're going to
    rely on this NAPA report co-authored by Dr. Chu, this report by
    an organization that gives its most prestigious award to a guy
    who's been censured by the very committee now looking at this
    issue. I think it's important that we had this hearing. I
    appreciate the chairman's indulgence. I yield back.
        Mr. Meadows. The chair recognizes the gentlewoman from the
    District of Columbia for 5 minutes.
        Ms. Norton. Thank you, Mr. Chairman.
        And one more clarification. When it comes to the use of
    official time by union representatives, like Ms. Schwartz, it's
    not a gift to the union. It's not a gift to the worker. If, in
    fact, these matters, which, of course, are recognized in our
    country, once there has been an election and a union has been
    certified and grievances are filed, if, in fact, these matters
    were not processed during official time, then they would have
    to be done, sir, during overtime, which would mean overtime to
    the government for all of those involved. So this is a
    carefully worked-out matter.
        Once you recognize that, in our country, there still is a
    right and certainly in Federal agencies to elect a union and to
    process grievances.
        I want to get further into the bottom of this matter
    involving--what is it?--43 percent of the hours from the best
    performers because that doesn't seem to belong together, that
    you found that the most unsupported work that the inspector
    general found was being claimed by what had otherwise been
    declared the most efficient workers. That just doesn't jibe.
    They don't fit together. And, of course, raises questions, I
    raised some of them about the way in which the Patent Office
    measures and rewards its workforce.
        Dr. Chu, do these highly efficient examiners have enough
    incentive, do you believe, to take on additional work beyond
    their productive goals? I'd ask that of Mr. Slifer as well? Are
    there enough incentives to take on additional work beyond their
    production goals?
        Mr. Chu. As Mr. Slifer has testified, the office does have
    a set of incentives to encourage staff members to produce more
    than is normal and uses those as a judgment for its award
    program.
        Ms. Norton. Mr. Slifer, what needs to be done about
    production incentives to encourage more output by patent
    examiners?
        Mr. Slifer. If I may, there's an interesting question to be
    asked when you look at the high performers that are on the
    list, and the first assumption is that they're not actually
    working. The other assumption can be that one reason those
    individuals are able to be such high producers is that they're
    putting in the extra effort. They're taking documents home.
    They're working on their--just like I take home a briefing book
    every weekend, individuals have different work habits, and
    they're putting in extra effort.
        Our incentive program that you're asking about has actually
    saved the agency over 1.1 million examiner hours a year. It's
    the equivalent of over 800 additional examiners that we would
    have to hire to meet the same production. So we do have
    incentives, and it is paying dividends for the agency without
    having to hire close to additional 1,500 additional examiners a
    year, and it provides us the flexibility when filing may drop,
    the revenue for the agency may, so that we can adjust our
    workforce without either having to hire more or fire more. So I
    am comfortable that our incentive program does incentivize
    those individuals who are capable of producing more work during
    their work hours to go ahead and produce more.
        Ms. Norton. So do you believe that your production goals,
    your production targets rather, and time and attendance
    requirements get the most work effort out of the patent
    examiners?
        Mr. Slifer. We work hard to optimize the balance between
    those, including the investment we are making over the last 2
    years and improving quality at the agency. The quality of the
    time the examiners are spending, the incentives that we put in
    place to get them to work harder, not only in quantity but the
    quality and the timeliness of their work, are working in
    harmony, and we are always tweaking it and trying to find ways
    to improve it. The inspector general's report and
    recommendations are very informative for us in helping us focus
    on additional improvements in areas that he's highlighted.
        Ms. Norton. There seems to be some suggestion that the
    system in use discourages highly efficient and effective
    workers rather than incentivizes them. I'm trying to resolve
    this tension between time and attendance and production records
    so it doesn't look like we're punishing some of the most
    efficient members of our Federal workforce.
        Mr. Slifer. It is a concern of mine to jump to the
    conclusion that unsupported hours looking at digital data
    equates to work that wasn't done. That's why we're digging in
    as an agency and trying to answer the question of, why is there
    a mismatch between digital data and the certified time records?
    When we look at production records for these individuals, the
    quality and the quantity of what they're producing doesn't
    point to the same result, and we want to get to the bottom of
    this so that third parties that are looking at our certified
    time and questioning whether our employees are actually working
    when they say they are and producing what they say they are is
    accurate so that we can resolve the question of whether we have
    any systemic problems or whether we have individual issues that
    any agency would have with individuals. So we are digging
    deeper and continue to work on this and have taken the
    recommendations to heart and will work with that and the
    inspector general to make improvements going forward.
        Ms. Norton. Mr. Chairman, I do want to thank you, but I do
    want to indicate that the indication of a systemic problem
    comes from these figures showing the best performers have the
    worst data. That has to be explained. Contraindicated, not what
    you'd expect as you look at the Federal workforce, and I hope
    we can get to the bottom of that dilemma.
        Thank you very much, Mr. Chairman.
        Mr. Meadows. I thank the gentlewoman. And so the best
    performers, according to what matrix? Their supervisor?
        Mr. Slifer. It's not just their supervisors. We have
    multiple levels of review for the work products that examiners
    provide. We do do audits. We do do quality checks, so it's not
    simply----
        Mr. Meadows. Okay. So here's I guess my--I was in the
    business world for a long time. If you did not change your
    goals and perspective since the 1970s, as my good friend from
    the District of Columbia mentioned, you've got a problem. Do
    you realize, in the 1970s, cutting-edge technology was a Texas
    Instrument little tiny computer that did nothing? Do you
    realize DOS was just being developed as an operating system? Do
    you realize that computers the way that we have it, we have got
    more computing power in my iPhone today than we had in a
    mainframe computer at that particular point, and yet you're
    saying your goals and objectives haven't changed since the
    1970s? Do you not see a problem with that?
        Mr. Slifer. As an electrical engineer who grew up through
    that time period, understand, I want to try to clarify if given
    a moment.
        Mr. Meadows. You're an engineer?
        Mr. Slifer. I am.
        Mr. Meadows. I love engineers because they've always got a
    matrix. What performance matrix would an engineer put forth in
    terms of helping the gentlewoman and I figure out this whole
    problem of productivity? Is there a rule matrix there, or is it
    just some guess on who the best performers are? Do you have a
    real matrix?
        Mr. Slifer. There are matrix, and with regard to the
    production requirement that hasn't been adjusted, shall we say,
    since the 1970s, the question is, how much time does it take an
    examiner in a particular art, let's say pacemakers, to read an
    application provided by the applicant, understand the
    invention, study the claims, do a prior art search for that
    particular invention, understand the art from their search, and
    apply it, and apply the laws to determine whether an
    application should be changed? A lot has changed over this
    time, including the accessibility using computers, the
    efficiencies of that.
        Mr. Meadows. So we would assume that, because on those
    efficiencies, that we would have a greater output from the
    1970s, wouldn't we?
        Mr. Slifer. The only flaw to that assumption would be that
    we also have billions of additional pieces of prior art that
    are now readily available, so the examiner now, while maybe
    more efficient in extracting that data, has much more data to--
    --
        Mr. Meadows. Okay. That is valid. I'll give you that one.
    So let me come back to you, Ms. Schwartz, to quote the
    Washington Post. And by the way, I want to give them a shout
    out because they've done some good work on this. I don't know
    that they're watching today, but to quote them: ``The Patent
    and Trademark Office has an unusually close relationship with
    its unions. Under its labor contracts, the agency does not
    require employees who work from home to log into their
    computers if they do telework full-time. It allows them to take
    up to 24 hours to respond to a call or email from their boss.''
    It really only requires poor performers to give a work
    schedule.
        So you were mentioning how you spend 100 percent of your
    time helping the agency implement things to make it more
    efficient. Is that correct? Did I understand you correct?
        Ms. Schwartz. Not 100 percent of my time, but----
        Mr. Meadows. But a lot of your time?
        Ms. Schwartz. A big portion of my time, yes.
        Mr. Meadows. So would you be willing to work with the
    agency on this strengthening of time and attendance
    requirements for its examiners?
        Ms. Schwartz. Yes.
        Mr. Meadows. So would you be willing to require all people
    to give their schedule to their supervisors?
        Ms. Schwartz. We would have to look at it terms of what the
    agency is asking for.
        Mr. Meadows. What do you mean? You're willing to give your
    schedule to us. Why would you not give a schedule--I can tell
    you that my scheduler knows almost every minute of where I am,
    and so do you not think that that would be a reasonable
    request, is to have the schedule given to their supervisors?
        Ms. Schwartz. It depends on what the requirements are for
    doing it. It's something we're willing to discuss and----
        Mr. Meadows. It's not the question. What is it--you say it
    depends. Depends on what, on how you feel on that given day, or
    what does it depend on?
        Ms. Schwartz. We would like to look at what it is they're
    actually asking for with respect to their work.
        Mr. Meadows. Their work schedule. Is it a ridiculous
    request to ask a supervisor to have access to a work schedule
    for someone who works for them?
        Ms. Schwartz. Are we talking about a minute-by-minute
    schedule? Because then we have a concern that employees are
    going to have to spend a lot of time----
        Mr. Meadows. I'm not asking them for a ``5-minute, I'm
    going to go get a cup of coffee.'' What I am saying is a real
    work schedule that they're accountable to that provides a good
    basis for where they are while they're working. Is that a
    reasonable request?
        Ms. Schwartz. It sounds like a reasonable request, yes.
        Mr. Meadows. Okay. So, since it's a reasonable request to
    you and me and since you're committed to making sure that the
    agency works well, is that something as the head of POPA, that
    you're willing to advocate on behalf, could that be an action
    item that we have coming out of this hearing that we're going
    to get the work schedules given to supervisors of all those
    people who do work?
        Ms. Schwartz. We're willing to work with the agency on what
    they ask.
        Mr. Meadows. Yes or no. Are you willing to do that or not?
    I mean, it's a pretty simple question.
        Ms. Schwartz. I would need to see the details of what we're
    being asked to----
        Mr. Meadows. Okay. Well, let me give you some details. How
    about a work schedule, between 8 and 5, if that's when they
    work, or between 10 and 7, if that's when they work, and saying
    that they're working on this case for this many hours and this
    case for this many hours or a full case for the full-time and
    that they took an hour off for lunch and whatever the
    appropriate breaks. I mean, is there any kind of a schedule
    that they keep?
        Ms. Schwartz. Not the kind of schedule you're talking about
    where they need to provide which applications they're working
    on.
        Mr. Meadows. So they could give us a schedule that says I
    was not golfing? Is that what you're telling me?
        Ms. Schwartz. They could give a schedule of----
        Mr. Meadows. The American people don't understand this, Ms.
    Schwartz. What they've seen is they've seen 400-plus people
    that an IG says has not actually accounted for their time
    according to computer and other logouts. We have got Mr. Slifer
    who says he's working on it, but he's not really sure what it
    is, and we have got you who says there's really not a problem,
    according to your written testimony and your oral testimony,
    and you're basing that on what?
        Ms. Schwartz. The IG report----
        Mr. Meadows. I didn't ask about the IG. You're basing, your
    assumption based on what, that you don't have a problem?
        Ms. Schwartz. I didn't represent that we don't have a
    problem----
        Mr. Meadows. So you do agree that we have some waste,
    fraud, and abuse with regards to time and attendance?
        Ms. Schwartz. There can always be improvements in time and
    attendance.
        Mr. Meadows. Do we have a problem with time and attendance
    reporting with some of your union employees? Yes or no?
        Ms. Schwartz. Are you asking if there are any employees for
    which there is an issue?
        Mr. Meadows. Sure. Let me give you a softball. Are there
    any employees that have a problem?
        Ms. Schwartz. I don't have personal knowledge of any right
    now, but we received proposals with evidence that----
        Mr. Meadows. Ms. Schwartz, so let me be a little bit more
    direct. Is it true when we found examiner A with a problem, is
    it true that your organization encouraged them to retire so
    that they couldn't have any kind of backlash or, quote,
    ``mark'' on their record? Did you recommend that to examiner A,
    you or anybody within your organization?
        Ms. Schwartz. Examiner A came to us and after discussing
    the issue with examiner A, it seemed that there was going to be
    significant evidence, which there was in the OIG report, about
    examiner A. And according to the way government protocol works,
    we suggested if examiner A wanted to keep their OPF cleaner,
    that examiner A could resign.
        Mr. Meadows. So answer the question. Did you recommend to
    examiner A that they resign in order to make it look better on
    their record?
        Ms. Schwartz. On their OPF, yes.
        Mr. Meadows. Do you think the American people would have a
    problem with that?
        Ms. Schwartz. I'm not sure. This employee should not have
    been working for the agency so having the employee resign was
    appropriate. There's no doubt that there was wrongdoing and
    losing----
        Mr. Meadows. Having them resign and face the consequences--
    and not face the consequences is not appropriate, Ms. Schwartz.
    Because here's the whole thing is, you had them resign so that
    the IG or anybody else investigating it couldn't follow that
    because they had resigned. You know this. You know it well. Was
    that not the motivation?
        Ms. Schwartz. The motivation was--the decision was the
    employee's decision. We were----
        Mr. Meadows. But you advised the employee.
        Ms. Schwartz. We advised the employee that their OPF would
    have less information in it if they resigned.
        Mr. Meadows. Mr. Slifer, is that something that you would
    recommend to the 30 people that you've taken action against?
        Mr. Slifer. From the agency's perspective, Chairman, we
    seek out to find the individuals that are taking advantage of
    their fellow employees and the agency and seek to discipline
    those individuals.
        Mr. Meadows. And you've disciplined, you said either
    terminated or disciplined 30 people. Is that correct?
        Mr. Slifer. That's correct.
        Mr. Meadows. And you will send to this committee a
    breakdown of who those 30 people are and what kind of
    disciplinary actions?
        Mr. Slifer. I'm not sure by law if I'm allowed to. If I am,
    I certainly will.
        Mr. Meadows. Well, we'll keep it confidential. And I can
    tell you from an oversight standpoint, here's what we need to
    see. So what you're saying is not based on an IG report, but
    based on your own internal investigation, you let 30 people go?
        Mr. Slifer. I'm not sure of the discipline for each of the
    30. I know it ranges anywhere from the whole suite of
    discipline up to termination.
        Mr. Meadows. All right. So how many other people are under
    investigation out of the 400?
        Mr. Slifer. I'm not sure at this moment sitting here what
    the nature of----
        Mr. Meadows. More than 10?
        Mr. Slifer. I can't speculate. I believe the inspector
    general and our internal investigation teams would have a
    better----
        Mr. Meadows. All right. Will you get to this committee the
    number of people that are currently under investigation,
    internal investigation?
        Mr. Slifer. We will.
        Mr. Meadows. All right. So, Ms. Schwartz, do I have your
    sworn testimony here today that you will be supportive of
    efforts to discipline anyone who has taken advantage of the
    situation, because in my mind, it's the other 8,000 good
    employees that we're not being fair to. Are you willing to work
    in a way that actually promotes some kind of disciplinary
    action?
        Ms. Schwartz. I'm not sure what POPA can do to support
    disciplinary action.
        Mr. Meadows. So it's your sworn testimony here today that
    you think that anybody that is not performing properly or are
    falsifying records, that they shouldn't be punished?
        Ms. Schwartz. We believe if people are falsifying records
    and the agency has the evidence of that and takes action
    against them, that that's appropriate.
        Mr. Meadows. So you would support their termination if they
    were falsifying records?
        Ms. Schwartz. If that's what the agency proposed to do and
    it was the appropriate level of discipline.
        Mr. Meadows. You added the little caveat on the end of
    that, and that wasn't the question. If they falsified records,
    are you willing to support their termination?
        Ms. Schwartz. Are we talking about falsifying their time
    and attendance? I would need clarification on that.
        Mr. Meadows. So it's okay to falsify some records, just not
    time and attendance?
        Ms. Schwartz. It's not necessarily okay, but it's possible
    that you could falsify some records and the correct discipline
    level would not be termination.
        Mr. Meadows. Okay. Valid. So if they falsified time and
    attendance records, would you support their termination?
        Ms. Schwartz. Once again, if it was the appropriate level
    of discipline----
        Mr. Meadows. If they falsified more than 8 hours, would you
    support their termination?
        Ms. Schwartz. I don't----
        Mr. Meadows. Give me a number then, Ms. Schwartz. I'm not
    going to keep guessing. What is appropriate?
        Ms. Schwartz. I don't have information on the correct
    number here.
        Mr. Meadows. Well, you're the expert witness.
        Ms. Schwartz. Well, we would want to be following the
    factors that are normally considered in making a determination
    of the correct----
        Mr. Meadows. I'm asking, from a union perspective, what
    would you support? Because I don't want to get sideways with
    you.
        Ms. Schwartz. I don't have the information here. I would
    have to go back and look.
        Mr. Meadows. So, within 30 days, can you get the
    information back to this committee?
        Ms. Schwartz. Yes.
        Mr. Meadows. Seeing that there is no further business
    before the committee, I want to thank each of our witnesses for
    being here today, and this subcommittee stands adjourned.
        [Whereupon, at 3:55 p.m., the subcommittee was adjourned.]

                                    APPENDIX

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