[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
  EXAMINING GAO FINDINGS ON DEFICIENCIES AT THE BUREAU OF SAFETY AND 
                       ENVIRONMENTAL ENFORCEMENT

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                 THE INTERIOR, ENERGY, AND ENVIRONMENT

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 21, 2017

                               __________

                            Serial No. 115-3

                               __________

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              Committee on Oversight and Government Reform

                     Jason Chaffetz, Utah, Chairman
John J. Duncan, Jr., Tennessee       Elijah E. Cummings, Maryland, 
Darrell E. Issa, California              Ranking Minority Member
Jim Jordan, Ohio                     Carolyn B. Maloney, New York
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Justin Amash, Michigan                   Columbia
Paul A. Gosar, Arizona               Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee          Stephen F. Lynch, Massachusetts
Trey Gowdy, South Carolina           Jim Cooper, Tennessee
Blake Farenthold, Texas              Gerald E. Connolly, Virginia
Virginia Foxx, North Carolina        Robin L. Kelly, Illinois
Thomas Massie, Kentucky              Brenda L. Lawrence, Michigan
Mark Meadows, North Carolina         Bonnie Watson Coleman, New Jersey
Ron DeSantis, Florida                Stacey E. Plaskett, Virgin Islands
Dennis A. Ross, Florida              Val Butler Demings, Florida
Mark Walker, North Carolina          Raja Krishnamoorthi, Illinois
Rod Blum, Iowa                       Jamie Raskin, Maryland
Jody B. Hice, Georgia                Peter Welch, Vermont
Steve Russell, Oklahoma              Matt Cartwright, Pennsylvania
Glenn Grothman, Wisconsin            Mark DeSaulnier, California
Will Hurd, Texas                     John Sarbanes, Maryland
Gary J. Palmer, Alabama
James Comer, Kentucky
Paul Mitchell, Michigan

                                 ------                                

               Jonathan Skladany, Majority Staff Director
                  Rebecca Edgar, Deputy Staff Director
                    William McKenna, General Counsel
              Melissa Beaumont, Professional Staff Member
                         Kiley Bidelman, Clerk
                 David Rapallo, Minority Staff Director

                                 ------                                

         Subcommittee on the Interior, Energy, and Environment

                   Blake Farenthold, Texas, Chairman
Paul A. Gosar, Arizona, Vice Chair   Stacey E. Plaskett, Virgin Islands
Dennis Ross, Florida                 Jamie Raskin, Maryland
Gary J. Palmer, Alabama              (Vacancy)
James Comer, Kentucky                (Vacancy)


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 21, 2017...................................     1

                               WITNESSES

Mr. Richard T. Cardinale, Acting Assistant Secretary for Lands 
  and Mineral Management, U.S. Department of the Interior
    Oral Statement...............................................     4
    Written Statement............................................     6
Mr. Frank Rusco, Director, Natural Resources and Environment-
  Energy Issues, Government Accountability Office
    Oral Statement...............................................    10
    Written Statement............................................    12

                                APPENDIX

Questions for the Record for Mr. Richard Cardinale, submitted by 
  Mr. Farenthold and Ms. Plaskett................................    38
Questions for the Record for Mr. Frank Rusco, submitted by Mr. 
  Farenthold.....................................................    45


  EXAMINING GAO FINDINGS ON DEFICIENCIES AT THE BUREAU OF SAFETY AND 
                       ENVIRONMENTAL ENFORCEMENT

                              ----------                              


                        Tuesday, March 21, 2017

                  House of Representatives,
          Subcommittee on the Interior, Energy and 
                                        Environment
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 2:05 p.m., in 
Room 2154, Rayburn House Office Building, Hon. Blake Farenthold 
[chairman of the subcommittee] presiding.
    Present: Representatives Farenthold, Comer, Plaskett, and 
Raskin.
    Mr. Farenthold. The subcommittee on the Interior, Energy, 
and Environment will come to order.
    Without objection, the chair is authorized to declare a 
recess at any time.
    The chair notes the presence of our colleague--oh, we don't 
note the presence of anybody because there is not anybody else 
here--there we go.
    The chair notes the presence of our colleagues from the 
full Committee of Oversight and Government Reform. We 
appreciate your interest in the topic and welcome your 
participation today. I ask unanimous consent that all members 
of the Committee on Oversight and Government Reform be allowed 
to fully participate in today's hearing.
    Without objection, so ordered.
    Well, good afternoon. Today, our subcommittee is going to 
examine the management deficiencies that have led the 
Government Accountability Office, or GAO, to once again--and 
the Bureau of Safety and Environmental Enforcement, or BSEE as 
it's known, to its high risk list. While this report notes that 
BSEE has made an effort to resolve some of the issues 
previously outlined by GAO, there's still substantial room for 
improvement. And today we will explore the lingering issues in 
hopes that we can determine some comprehensive solutions.
    Before we got to these issues, I would like to thank the 
GAO and its staff for the hard work they've done in this issue 
area. And I'm especially glad to note that the GAO has a new 
report on the subject that it released just this morning. And I 
look forward to hearing more about that from Frank Rusco of the 
GAO appearing here today. Thank you for coming.
    I would also like to thank Mr. Richard Cardinale, the 
acting Secretary for Lands and Minerals at the Department of 
the Interior. Mr. Cardinale is a career employee who has 
extensive experience in the Office of Land and Minerals. I'm 
also thankful that he is here today as well to provide this 
perspective from the last several years and shed some light on 
what's going on at BSEE. Thank you for coming.
    Leadership seems to be a continual problem at BSEE since 
its formation after the Deepwater Horizon incident. Several 
whistleblowers, and now the GAO, have highlighted these issues. 
Data supports that GAO's conclusion as the 2016 Employee 
Viewpoint Survey found that regional personnel scored BSEE's 
leadership at 42.7 out of 100. Current acting director Margaret 
Schneider, who spent 30 years at the Environmental Protection 
Agency before joining BSEE in 2010, has been specifically 
mentioned as one of the problems.
    The GAO has found a disconnect and, more importantly, a 
distrust between BSEE headquarters and its region. BSEE 
leadership has consistently hired contractors to try to fix its 
problem rather than using its own knowledgeable and experienced 
personnel. This distrust has caused significant duplication and 
reduced the agency's efficiency. These problems are so deep 
that some regional staff were discouraged from talking with the 
GAO and some were even concerned about retaliation.
    Another problem facing BSEE is Integrity and Professional 
Responsibility Advisor, a group that exists to investigate 
allegations of misconduct and unethical behavior. This group 
follows unclear and inconsistent guidance, which appears to 
have undermined trust in its activities. Regional staff are 
concerned that this group is abusing its power and retaliating 
against employees, thereby deterring employees from speaking up 
and inhibiting agency transparency.
    These problems with leadership and trust have trickled down 
effects throughout BSEE's portfolio. The GAO found a number of 
duplicative measures that have been fruitlessly implemented, 
which have resulted in a loss of valuable time and revenue. For 
example, BSEE hired two separate contractors to conduct 
simultaneous environmental risk assessments. This, 
unfortunately, resulted in two uncoordinated reports lacking 
quality. Had the two groups communicated with one another 
during their assessments, the final reports could have been 
substantially improved. Not only is this an inefficient way to 
run an agency, it's a waste of taxpayers hard-earned dollars.
    Despite these problems, I'm hopeful Secretary Zinke will 
ride in and be able to take a good look at the Bureau staff and 
put in a leadership team at BSEE to fix the divide between 
headquarters and the region.
    I'll now recognize the ranking member, Ms. Plaskett, for 
her opening statement.
    Ms. Plaskett. Thank you so much, Chairman. And thank you, 
gentlemen, for being here this afternoon.
    Nearly 7 years ago, an explosion on Deepwater Horizon 
offshore oil rig caused 11 crewmen deaths and leaked 
approximately 4.9 million barrels of oil into the Gulf of 
Mexico. This spill caused immense environmental and economic 
damage to the Gulf region and its residents for which BP paid 
out nearly $62 billion.
    A special commission was formed to investigate the 
explosion. The Department of the Interior Inspector General 
also investigated, as did Interior's Outer Continental Shelf 
Safely Oversight Board. Each issued reports making a number of 
recommendations to Interior to ensure the safety of offshore 
rigs.
    The newly formed Bureau of Safety and Environmental 
Enforcement, or BSEE, was tasked with implementing these 
recommendations. Among other suggestions, the report 
recommended that Interior, quote, ``develop an inspection 
program with strong representation at all levels of the 
bureau,'' quote, ``identify sufficient inspection coverage, 
including reassessing the risk space and self-inspection 
approaches, and conduct advanced planning of inspections to 
allow inspectors time to prepare for each inspection and ensure 
efficient use of resources,'' end quote.
    Yet GAO, the Government Accountability Office, report 
released in 2016, 5 years after many of these recommendations 
were issued, found that BSEE continues to face deficiencies in 
its investigation, environmental compliance, safety enforcement 
capabilities, and that ``undermine its ability to effectively 
oversee offshore oil and gas development.''
    Now, a year later, GAO has issued another report indicating 
that BSEE is not doing everything it can to protect workers. 
The report found, for example, that BSEE halted pilot testing 
of risk-based inspection initiative, which was developed in 
2012, due to deficiencies that GAO attributed to mismanagement 
of initiatives from the beginning. Why? That's why we're here 
at this hearing to understand the why, what the problem is, and 
not merely just to state, for you to inform us of that, but 
also to give us recommendations to how we can help BSEE best 
carry out its mission.
    This initiative would have ensured the most dangerous rigs 
were inspected with more frequency and diligence, possibly 
saving lives. Workers lives are at risk, and BSEE must 
implement GAO's recommendations soon. The findings of the 
inspector general and Oversight Board reports point to the 
important role of the Federal Government in protecting the 
lives of offshore oil workers.
    As our new President fulfills his campaign promise to lift 
the restrictions on the production of shale, oil, natural gas, 
and clean oil, those restrictions must not be worker safety 
regulations. And government agencies like BSEE must properly 
inspect drilling sites and stringently enforce the rules. This 
is particularly important given the Interior Department's 
recent announcement that will offer 73 million acres offshore 
in the Gulf to new oil and gas developments later this year. We 
cannot afford BSEE not to do its job and ensure that American 
workers lives are safe.
    Thank you, Mr. Chairman.
    Mr. Farenthold. Thank you very much.
    We'll now recognize--first, I want to let you know that any 
member who would like to submit a written statement is welcome 
to do so in the next 5 legislative days for which I'll hold the 
record open.
    We'll now recognize our panel of witnesses. I'm pleased to 
welcome Mr. Richard Cardinale, acting Secretary for Lands and 
Mineral Management at the U.S. Department of Interior, and 
Frank Rusco from the GAO. Welcome to you both.
    Pursuant to our committee rules, all witnesses will be 
sworn in before they testify. Would you please rise and raise 
your right hands.
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth, and nothing 
but the truth, so help you God?
    Thank you. Please be seated.
    Let the record reflect that both witness answered in the 
affirmative.
    In order to allow time for discussion, we'd appreciate it 
if you'd limit your testimony to around 5 minutes. Your entire 
written statement will be made part of the record. You'll see a 
timer in front of you that will count for 5 minutes. Green 
light means you're good to go; the yellow light means hurry up, 
you're about out of time; and the red light means stop.
    So I guess we'll start with Mr. Cardinale. You're 
recognized for 5 minutes.

                       WITNESS STATEMENTS

               STATEMENT OF RICHARD T. CARDINALE

    Mr. Farenthold. You're going to need to turn on your 
microphone, please, sir, and get real close. We bought the 
budget mics in order to save the taxpayers some money.
    Mr. Cardinale. Can you here me?
    Mr. Farenthold. You're good now.
    Mr. Cardinale. Okay. Mr. Chairman and members of the of the 
subcommittee, thank you for the opportunity to discuss 
leadership and management at the Department of the Interior's 
Bureau of Safety and Environmental Enforcement. We appreciate 
the subcommittee's interest in the efficient and effective 
functioning of government and the valuable service the GAO 
provides to that end.
    My name is Richard Cardinale and I am currently the acting 
assistant Secretary for Land and Minerals Management at the 
Department, stepping into this role as chief of staff for the 
assistant Secretary's office. I have been the chief of staff to 
the assistant Secretary for Land and Minerals Management, the 
office that oversees BSEE, for the past 10-1/2 years. I was in 
my current position when the Bureau of Safety and Environmental 
Enforcement was established on October 1, 2011. We take 
seriously the insights and recommendations from the ten reports 
the GAO has issued concerning BSEE.
    BSEE has asked that the GAO consider the clarifications, 
updates, and new information the Bureau has provided in its 
response to the most recent draft report examining several of 
BSEE's programs for offshore oversight and internal management. 
We appreciate that BSEE still faces challenges internally and 
how it develops and communicates management initiatives. The 
assistant Secretary's office will continue to provide guidance 
to the Bureau to help address these challenges.
    Externally, we believe the Bureau has made great strides in 
effectively serving the American public and working 
productively with the industry that it regulates, as well as 
our many stakeholders. During the past 5-1/2 years, BSEE has 
taken many constructive steps toward creating a stable and 
mature organization, while continuing to carry out its mission-
critical goals of promoting safety, environmental 
responsibility, and resource conservation on the Outer 
Continental Shelf.
    In 2016, the Bureau approved over 700 permits and conducted 
over 20,000 offshore inspections. The Bureau also continues to 
have an unprecedented level of engagement with industry and 
other stakeholders to address the many recommendations made as 
a result of the investigation stemming from the Deepwater 
Horizon tragedy. Those investigations produced 11 reports, 
resulting in 353 recommendations for industry, government, and 
others to improve offshore safety. Two hundred seventy five of 
the recommendations dealt with reforms to Federal oversight of 
offshore oil and gas development.
    Due in part to the Bureau's hard work, the Department has 
addressed 217, or 80 percent of these recommendations. BSEE has 
also received a combined total of 93 recommendations, 37 from 
the GAO and 56 from the Department's Office of the Inspector 
General. BSEE has been successful in closing 80 of these 
recommendations, including 29 from the GAO and 39 from the 
OIG's New Horizon report.
    BSEE has also developed major safety and regulatory reforms 
that have contributed significantly to an improved safety 
culture in the offshore environment. BSEE is a relatively new 
agency with a critically important mission. It has been the 
subject of review by both the GAO and the OIG. Throughout these 
reviews, the Bureau has demonstrated a consistent commitment to 
responding thoughtfully to recommendations and to improving 
areas where--that were underdeveloped under its predecessor 
organizations.
    In an effort to assess its progress and address these and 
other challenges, in August 2016, BSEE engaged the National 
Academy of Public Administration to conduct an independent 
evaluation of the organization. The outcome of this study was 
made publicly available last Friday, and provides tangible 
steps that BSEE can take and has taken to improve its 
oversight, management, and communication capabilities.
    I thank the subcommittee for the opportunity to testify on 
behalf of the Department, and I'll be happy to answer your 
questions.
    [Prepared statement of Mr. Cardinale follows:]
    
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    Mr. Farenthold. Thank you very much.
    Mr. Rusco.

                    STATEMENT OF FRANK RUSCO

    Mr. Rusco. Thank you, Chairman Farenthold and Ranking 
Member Plaskett and members of the committee. I'm pleased to be 
here today to discuss our recent reports on the Bureau of 
Safety and Environmental Enforcement.
    Before I go into my formal written statement, I want to say 
that I agree with a lot of what Mr. Cardinale has just said, 
that over the years, BSEE has done a very good job of 
responding to numerous recommendations from a number of bodies, 
including GAO.
    Our most recent look at BSEE has been looking at their 
leadership initiatives and their restructuring process, and we 
have found serious deficiencies there, but that does not 
reflect a broad critique of what BSEE has been doing in the 
regions with its regional management and staff, who I think are 
doing, by and large, an excellent job. They're hampered, 
though, by leadership failures, and that's what I'm here to 
talk about today.
    In our last two reports looking at BSEE's restructuring 
efforts and its leadership effectiveness, we have found a 
longstanding deficiency in the leadership in BSEE headquarters 
that has hindered its ability to effectively and efficiently 
administer its mission. BSEE leadership's failure is primarily 
the result of its mistrust and poor communication with its 
knowledgeable regional managers and staff. Time and again, BSEE 
has chosen consultant studies and headquarters-led projects 
instead of in-house expertise and experience. This has cost the 
Bureau precious time and the taxpayer precious dollars to 
achieve very little of substance in the past 5 years.
    I have three examples from our past work that highlight 
BSEE's repeated efforts to restructure the Bureau without 
adequately obtaining input and advice from its regional 
management and staff.
    First, BSEE has taken a number of steps to strengthen the 
permitting and planning process to ensure better well-designed 
drilling practices and oil spill response capabilities. And 
Congress has appropriated additional funds to enable BSEE to 
hire more inspectors. However, while stating the Bureau's 
philosophy of creating national leadership of key BSEE 
missions, BSEE headquarters inexplicably moved its 
environmental compliance unit from a national to regional 
reporting structure and also left numerous congressionally 
funded environmental compliance positions unfilled for years, 
despite demonstrated need for these positions.
    These actions reduced the Bureau's ability to share 
expertise across offshore regions, and left the Gulf of Mexico 
region without the environmental compliance staff needed to 
perform its oversight responsibilities. Instead of acting to 
fix these deficiencies, BSEE leadership spent over $1 million 
on consultant studies to assess environmental risk, rather than 
using the in-house expertise resident in BSEE's regional 
offices.
    Second, in 2012, BSEE identified the need for performance 
measures to provide it with data, to evaluate the efficiency 
and efficacy of its programs and activities. Subsequently, BSEE 
began an initiative in 2014 to develop performance measures for 
its key programs by hiring a consultant to perform two 
sequential studies. These contracts generated 12 recommended 
performance measures, delivered in 2016, none of which were 
implemented.
    In 2016, BSEE began what they described as a multiyear 
internal effort to develop performance measures. In December 
2016, BSEE completed a report that identified 17 performance 
measures, but the Bureau has yet to finalize or implement these 
measures to inform management decisionmaking.
    What these three efforts have in common is a lack of 
implementable results and the fact that the efforts were done 
from headquarters largely without the benefit of the experience 
and talent within the BSEE regions.
    Third, starting in 2012, BSEE leadership sought to develop 
a risk-based inspection's regime, but they did so without 
appropriate input and in consultation with the regional 
managers and staff, who for many years have been involved in 
previous attempts to identify risk factors and implement risk-
based inspection practices.
    BSEE hired outside consultants to inform their approach to 
risk-based inspections.This 3 year contract led to a risk 
assessment model and inspection protocol that BSEE tried to 
implement in a pilot in 2015. However, the pilot failed to 
identify useful risk factors, and only after these deficiencies 
were identified did BSEE begin to involve the regional managers 
and staff. Even then, instead of working with regional managers 
and staff to develop a better model, BSEE leadership decided to 
change its focus and reduce expectations for its risk-based 
inspection approach.
    BSEE's leadership, lack of trust, and communication with 
regional managers and staff again led to waste of taxpayer 
money in a still deficient risk-based inspection regime.
    I'm going to end there, and I would be happy to answer any 
of the questions you may have.
    [Prepared statement of Mr. Rusco follows:]
    
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    Mr. Farenthold. Thank you very much.
    And I'll get started with a couple of questions. Mr. 
Cardinale, I'm kind of troubled by the number that--the 
leadership on a national level only scored a 42.7, based on 
what the people in the field actually doing the work said. I 
mean, that's an F minus. What's--what do you attribute that to 
and what's being done to fix it?
    Mr. Cardinale. We don't disagree with you on that score. I 
think part of the issue had been a lack of engagement with 
subject matter experts from the field. That, as I understand 
it, has changed. And specifically with Secretary Zinke's 
leadership, who wants to empower and engage, as he calls it, 
people on the front lines, those who are implementing policy 
decisions and carrying out operations, we are----
    Mr. Farenthold. It had to be more than, oh, heck, they just 
don't listen to me. What else have you found there?
    Mr. Cardinale. Well, I can't speak with any specificity to 
the reasons these employees gave, but I do feel that everything 
that I have seen suggests that we needed and we are now 
embarking on doing a better job of engaging employees and 
communicating with them, bringing them in early on in the 
effort. The Bureau has undertaken some leadership initiatives 
that are designed to bring people from the field into 
headquarters for detail opportunities, which we think will 
build trust and promote better communication.
    The Bureau is also in the process of developing a new 
intranet tool which is designed to post information more 
quickly and facilitate engagement sooner in the process.
    Mr. Farenthold. Mr. Rusco, did you all find anything in 
particular, besides--you pointed out the excessive use of 
outside consultants. I used to work in radio, the staff used to 
never like the consultants. But what else did you see in there 
besides the overuse of consultants? And what generated this 
lack of trust in communications?
    Mr. Rusco. Well, I think it just stems largely from just 
pure cultural differences and mistrust between the headquarters 
folks and the people in, particularly, the Gulf of Mexico. And 
the headquarters does not respect or trust them and does not 
listen to them. And when we 2 years ago started--or 2-1/2 years 
ago started doing this most recent work, we went and we said, 
well, we're going to look at your management initiatives. And 
the response was, well, you're going have to run through this 
liaison. Every piece of information you want has to be approved 
by the deputy director directly.
    Most of the things we asked for were deemed to be 
predecisional and not available to us to do our audit work. And 
these were things like years' old consultant reports.
    Whenever we went to the Gulf and did our field work and we 
talked to people, there was a minder with us that was reporting 
back to headquarters, and that really cut back on what people 
were willing to tell us. And they told us that in private, 
afterwards. But they would not speak frankly and openly.
    Mr. Farenthold. Was it a sense of a fear of retaliation and 
intimidation?
    Mr. Rusco. There was a concern about that.
    Mr. Farenthold. Because this committee is committed to 
making sure that whistleblowers have the opportunity to report 
their problems and, you know, has shown a strong support for 
things like your GAO reports and internal inspector general's--
it's pretty clear that the policy, at least of the government, 
at least coming out of this committee, is we want to hear from 
the rank and file folks that are doing the job.
    Mr. Rusco. And I will say that, over the years, when we 
have gone into the field and talked to the people on the front 
lines, doing the work, we get straight answers, we get good 
information, and they tell us what's working and what's not. 
And that's what most of our recommendations are based on.
    Mr. Farenthold. Mr. Cardinale, I'm about out of time, but 
we're talking a lot about the issues in the Gulf of Mexico 
region. I assume that's the largest of your regions based on 
the bulk of offshore oil and gas activity.
    Mr. Cardinale. That's correct, Mr. Chairman.
    Mr. Farenthold. Can you tell me about the basic sizes of 
your different--what your different regions are and the sizes?
    Mr. Cardinale. I don't have that information available to 
me. I do know that, in terms of specific number of employees, 
the organization numbers about 880 employees. About 140 of them 
are inspectors. Its largest region is in the Gulf of Mexico. 
There's also a regional office in Camarillo, California, and 
one in Anchorage, Alaska.
    Mr. Farenthold. Do you know how many of that 800 are in 
Washington, D.C.?
    Mr. Cardinale. I don't, but I'd be happy to----
    Mr. Farenthold. If you'd give me those numbers. I'd be 
interested. Again, it seems to me if your largest region only 
has, you know, 100 plus, we may be a little top heavy there 
too. It might be something worth looking at. But I don't want 
to get that without the numbers.
    So at this point we'll go to the gentlelady from the Virgin 
Islands for her line of questioning.
    Ms. Plaskett. Thank you.
    You know, it was very interesting reading the GAO's report, 
which paints still a troubling picture at BSEE of failing to 
properly implement programs. The report points to several 
instances where BSEE's leadership failed to implement several 
key strategic initiatives to improve its internal management. 
What's particularly troubling to read is that BSEE has not been 
able to make progress on approving its offshore safety and 
environmental oversight because of these deficiencies.
    Mr. Cardinale, in your written testimony, you state that 
BSEE is now fully staffed. If that's so, when did that occur?
    Mr. Cardinale. That's occurred over the last couple of 
years. I think there are a culmination of reasons for it. BSEE 
has improved its recruitment and retention practices and has 
benefited from a full suite of tools to help recruit and retain 
employees. I think also the downturn in the market has resulted 
in the closure of a number of companies, and as a result, a 
number of employees have migrated from the private sector to 
the Federal sector.
    Ms. Plaskett. And so you're also not maybe having the high 
turnover of employees leaving that you had previously?
    Mr. Cardinale. That's correct.
    Ms. Plaskett. When you talked about the other achievements, 
you talked about retaining that technical expertise in the 
suite of availability. I know earlier you talked about the 
intranet services that you used. What are some of the other 
accomplishments that you believe BSEE has been able to 
implement?
    Mr. Cardinale. I think BSEE is working to build its 
inspection force through investigating opportunities to create 
a certification program for training its inspectors. As I 
mentioned earlier, we are trying to foster engagement with the 
field at the earliest possible opportunities, including 
bringing people in from the field to get the benefit of their 
insight and expertise in the day-to-day operations of policy 
development.
    We are also just trying to foster better communication. At 
this time, there's an offshore inspector's conference going on 
in Lafayette, Louisiana, and the acting director is there now. 
This is the perfect opportunity to interact with the people in 
the field to get their perspectives, to better understand what 
challenges they are facing, and what we can do at headquarters 
to try to help address those challenges.
    Ms. Plaskett. So you talk about this better communication. 
Is there something that is just going to be--how is this going 
to be implemented if what we understand is there's a cultural 
difference between those at headquarters and those in the 
field? If you think that--you know, and I have great confidence 
in the charisma of our new Secretary of Interior, my former 
classmate, Secretary Zinke, but how do you believe that that is 
going to be able to drive it down into the regional levels?
    Mr. Cardinale. I think the perspective of the 
administration is, in fact, to ensure that we are more 
efficient and more effective. And in order to do that, I think 
we need to engage, at the earliest possible opportunities, with 
the people that are in the field and give them the resources 
and the tools they need to do their jobs and to carry them out 
effectively.
    Ms. Plaskett. And, you know, I'm sure this is something 
that you were trying to do 3 years ago. What is going to be 
different this time? Is it because of the new tools that you 
have? I really need to understand what has dynamically changed.
    Mr. Cardinale. I think the management focus is 
fundamentally outward facing towards the field, more engagement 
with the people that are actually implementing the policies, 
and more engagement with them in the development of the 
policies.
    Ms. Plaskett. Would that also be, Mr. Rusco, implementing 
risk-based inspections? Would that be part of the policies and 
procedures?
    Mr. Rusco. I hope so. And I hope that what Mr. Cardinale 
says is correct. What we have seen is not that. We have seen 
the headquarters leadership staying in D.C., not engaging with 
the field, and not trying to learn what their business is 
about. And I think that that's----
    Ms. Plaskett. So what kind of--you know, you give very 
concrete recommendations. Do you go as far as to say how many 
times a year individuals from the headquarters should be out in 
the regional offices?
    Mr. Rusco. No, we haven't made that kind of specificity.
    Ms. Plaskett. You did talk, though, in the risk-based 
inspection. How difficult should it be for BSEE to address the 
deficiencies that the report noted?
    Mr. Rusco. It shouldn't be that difficult. The BSEE 
inspectors and the management in the Gulf has been working on 
risk factors and on various iterations of risk-based 
inspections for years, since the 1990s. For a long time, they 
didn't have enough inspectors to even do their annual 
inspections, so they didn't have extra inspectors to go around 
and make additional risk-based inspections. But now that 
they're staffed up in inspectors, they have the ability to do 
that.
    So it was puzzling to us when BSEE turned around after the 
model built by their consultant failed. Instead of fixing that 
model, they changed their focus and reduced the scope of risk-
based inspections. We think that's a mistake.
    Ms. Plaskett. Okay. Thank you.
    I've run out of time. But, Mr. Chairman, I'm just hopeful 
that we will do an assessment of this in the months to come, 
and this will not be the only discussion we have with the 
witnesses today.
    Mr. Farenthold. All right. I see we've got Mr. Raskin here. 
We don't have anybody on our side.
    Do you have some questions you're ready to go with? If not, 
I can do my second round and come back to you.
    Mr. Raskin. Mr. Chair, if you would take your second round 
and come back to me, that would be great.
    Mr. Farenthold. All right. That will give you a little bit 
of time to get settled. I understand.
    So I'll toss this out to whichever one of you gentlemen 
wants to answer. BSEE was created in the wake of Deepwater 
Horizon to protect the Gulf from another environmental 
disaster. And risk-based inspection sounds like the way to go, 
and you have spent, in BSEE, a fair amount of money getting 
some expert input on what to do about risk based and what the 
risks are. I mean, it's a pretty highly technical field.I 
imagine you could go to the safety folks that work at various 
competing companies. I'm assuming that's how that was 
developed.
    Can you tell me a little bit about what's involved in risk-
based inspection and why--to me, it seems like the only way to 
go. Mr. Cardinale, do you want to take a stab at that?
    Mr. Cardinale. I'll be happy to respond, Mr. Chairman.
    Mr. Farenthold. You need to turn your mic on.
    Mr. Cardinale. I'll be happy to respond, Mr. Chairman. I 
think it's important to note that the risk-based inspection 
strategy is not designed to supplant or take the place of BSEE 
statutory obligations to inspect 100 percent of facilities in 
the offshore environment. It is----
    Mr. Farenthold. But I want you to go into the ones you're 
worried about twice a year instead of once a year, I mean, just 
in broad general terms.
    Mr. Cardinale. Understood. I think that it's important to 
point out that the risk-based model that was developed, we have 
found to have been very, very accurate. Over the past 3 years, 
that model has identified the top 20 percent of high-risk 
facilities that are out in the Gulf, and those have accounted 
anywhere from 80 to 89 percent of the major incidents that have 
taken place out there.
    I think it's also important to point out that the risk-
based inspection strategy was designed as a pilot tool, and as 
such, it is supposed to be iterative in nature.
    I recognize that when the team that identified the 
facilities in the first round put that list together, three of 
the facilities on the list were later determined to be shut in. 
Two of those were not inspected; one was because it was 
determined that even being a shut-in facility, there was merit 
to doing an inspection and gaining the information and insight 
that would come through the risk-based pilot. Subsequently, 
three additional facilities were identified, and the next phase 
of inspection is ongoing.
    Mr. Farenthold. And what about working with industry? We've 
seen a great success in OSHA through cooperative industry 
programs like VPP. Have you all--I mean, what's your 
relationship with industry? I imagine they're no more eager to 
have another problem than y'all are.
    Mr. Cardinale. I can't speak to the specific incidence of 
engagement, but I will tell you that, just generally, we view 
engagement with the industry to be of primary importance. I 
think it's critical that we get insight from industry about the 
policies that we're developing so that we can better understand 
what their challenges----
    Mr. Farenthold. Mr. Rusco, did you all look at all the 
interaction with industry?
    Mr. Rusco. Over the years, yes, we have. There is a lot of 
interaction in the inspection community between industry and 
the inspectors. We have some concerns about where that has gone 
in recent years with the addition of law enforcement 
inspections going--inspectors going along with those 
inspections. But for many years, the inspections have been 
along the lines of a safety culture perspective. So you go out, 
you have an incident, you find something, you try to figure out 
what the root cause is, you try to figure out what can we do to 
make that not happen. You communicate any serious problems to 
the industry from the regulator. And that's the way it goes. We 
are concerned about the effects of adding a law enforcement 
component to that, though.
    Mr. Farenthold. So by law enforcement, rather than working 
to fix something, you end up getting fined. Is that how that--
I'm just trying to narrow it.
    Mr. Rusco. Yeah. So I'm sorry, I'll be more clear. After 
the Deepwater Horizon, there was this inspection unit that you 
referred to in your opening remarks that was looking for 
internal conflicts of interest between BSEE employees and the 
industry. They did not find any to speak of. So instead of 
wrapping that up and sending that component off to do nothing, 
they transformed it. Now, they have inspectors who have a law 
enforcement background, who are hired to do that first 
function, who are now taking part in regular inspections of 
offshore facilities.
    Mr. Farenthold. So it's a different--rather than a safety 
culture, it's a law enforcement culture within that.
    Mr. Rusco. When we talked to one of the inspectors in the 
Gulf, I asked him point blank, I said, what happens when you go 
out there and, you know, you're a police officer, you go out 
there and you start questioning folks? And he said they lawyer 
up. That's the opposite of a safety culture.
    Mr. Farenthold. Right. And I appreciate that.
    BSEE is a relatively new organization, relatively small 
number of employees. So I guess the same issue with these 
former law enforcement folks--and we'll put some of the 
employees in--some of whom are management employees who seem to 
have some leadership issues. What issues do you face dealing 
with employees who either aren't good at their jobs or because 
of a change within the organization--looks like you're moving 
people into things that they may not be well suited for. Do you 
have an issue with having to relocate employees? Or what do you 
do about getting rid of people whose usefulness within the 
organization is not what it used to be? What do you do with 
your problem personnel, as a short answer to that question?
    Mr. Cardinale. Well, there are established policies and 
guidelines----
    Mr. Farenthold. Is your mic on?
    Mr. Cardinale. Yes.
    Mr. Farenthold. Okay. I'm sorry. Again, we have the budget 
mics. You need to really get close.
    Mr. Cardinale. There are established policies and practices 
for dealing with employees who are not performing. Employees 
are all under annual performance plans. They're all rated and 
reviewed to ensure that they are meeting all of the critical 
elements in their performance plans. And so the established 
practice is to follow the applicable HR guidelines when an 
employee is not meeting those standards.
    Mr. Farenthold. Do you have the ability to fire somebody?
    Mr. Cardinale. I think that ability exists, but, again, 
that has to happen through a process that may----
    Mr. Farenthold. It takes how long?
    Mr. Cardinale. It can take a while. It's designed to ensure 
that employees have due process.
    Mr. Farenthold. All right. The issue is always how much 
process is due.
    Mr. Raskin, I went a little bit long, but I will be 
generous with your time as well.
    Mr. Raskin. Mr. Chairman, thank you very much.
    And welcome, gentlemen.
    I want to take this opportunity to talk about challenges 
that BSEE has had in hiring and retaining the inspectors that 
it needs to ensure worker and environmental safety. The GAO has 
shown that hiring compliance staff has been a tough spot for 
BSEE that has undermined the Bureau's performance. In February 
2016, GAO reported, quote, BSEE has not met its goals for 
monitoring operator compliance with environmental standards, 
primarily because it does not have enough staff to accomplish 
its workload. GAO identified several sources, including BSEE's 
own annual compliance activity reports, that said it needs up 
to 30 compliance staff to effectively carry out its mission. 
And you had funding for 30 positions, but GAO reported that 
BSEE left 9 critical positions open as of November 2015, even 
with the funding to fill those positions, rolling over millions 
of dollars of environmental oversight funds from year to year.
    So, Mr. Cardinale, let me ask you, why did BSEE roll over 
millions of dollars in environmental oversight funds in fiscal 
years 2013, 2014, and 2015, rather than use them to hire the 
requisite environmental compliance staff?
    Mr. Cardinale. Thank you for your question, Congressman. I 
think that BSEE has, in fact, over the last year or so, managed 
to staff up as a result of a variety of factors, anticipating 
that it would need a full complement of inspectors. I think 
they were reticent to spend money that they knew they would 
need as they staffed up.
    As a result of changes in the market, as well as BSEE's use 
of a full suite of recruitment and retention tools, I'm pleased 
to say that the compliance inspection team is now fully 
staffed.
    Mr. Raskin. Okay. Well, let me shift over to you then, Mr. 
Rusco. Do you believe that BSEE is taking the steps that are 
needed to implement the GAO's recommendation that BSEE develop 
a plan to address the inadequacy of their staff?
    Mr. Rusco. Well, we'll be following up on that. A couple of 
things have happened in the last couple of years, in general, 
in the hiring front. BSEE was able to get special authority 
through OPM to pay closer to market salaries for certain key 
staff, and that has helped them hire people.
    The specific issue with the environmental compliance staff 
and the open positions, that was entirely a leadership decision 
not to hire those. Those were not staff that you would have had 
trouble hiring in previous years. I don't know the extent to 
which those positions have been filled because we haven't 
looked at it since the 2016 report.
    Mr. Raskin. Okay. So, Mr. Cardinale, let me come back to 
you. Was that a mistake to make that strategic decision 
originally not to hire that staff? And what's the plan now for 
making sure that there is sufficient staff through hiring and 
retention activity?
    Mr. Cardinale. Congressman, I can't speak to whether or not 
it was a mistake. It does appear that, in hindsight, those 
resources could have been utilized for that purpose. I think 
the plan now is to ensure that we are, in fact, fully staffed 
and that our people on the front lines have all the resources 
they need to do their jobs.
    Mr. Raskin. Are you subject to a hiring freeze, the general 
Federal hiring freeze now?
    Mr. Cardinale. Yes.
    Mr. Raskin. So does that freeze into place those original 
erroneous decisions that were made about not hiring a full 
complement?
    Mr. Cardinale. I don't know the specifics of the impacts of 
the hiring freeze. But I would imagine that, at least for the 
time being, we would be restrained from hiring additional 
personnel.
    Mr. Raskin. Okay. Let me just quickly shift over to talk 
about the future of Interior safety and environmental regs. In 
2012, BSEE implemented a new safety regulation for offshore 
rigs, the drilling safety rule which radically overhauled what 
were the radically inadequate regs that led to the Deepwater 
Horizon explosion. The new rule required secondary blowout 
preventers to ensure that one blowout preventer would not be 
there and just not be able to do the job, so it was a backup. 
This possibly would have prevented the Deepwater Horizon 
situation.
    However, President Trump has talked about easing 
regulations on oil, gas, and coal producers. Is the drilling 
safety rule one of the regs that President Trump plans to 
repeal, and do you have anything to say about that, Mr. 
Cardinale?
    Mr. Cardinale. I am not aware of any plans currently 
underway to repeal that rule. What I will say is that worker 
safety and the protection of the offshore environment and 
conservation of the resources have been and will continue to be 
our top priority.
    Mr. Raskin. Okay. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Farenthold. Thank you very much.
    We'll now go to the gentleman from Kentucky for 5 minutes.
    Mr. Comer. Thank you, Mr. Chairman.
    My first question is for Mr. Rusco. When GAO was conducting 
its previous investigation of the BSEE, what level of 
cooperation did you all receive from the Bureau?
    Mr. Rusco. During our first investigation along this line 
of restructuring and leadership initiatives, we found a very 
unusual degree of resistance from BSEE leadership. So we were 
kept from information that would have normally been given to us 
directly. And everywhere we went to talk to people, we were 
followed by a minder who reported directly back to headquarters 
what was said in the meetings.
    Mr. Comer. What was the source of the problem?
    Mr. Rusco. The minder reported directly to the deputy 
director. I don't know that that's the source of the problem, 
but I know that's where they reported. And I know that all the 
information we got had to go through the deputy director before 
it came to us.
    Mr. Comer. Is it correct that this level of cooperation 
improved for your most recent work?
    Mr. Rusco. Yes, it did. After that report, and after we 
raised this issue with access with our congressional clients, 
and there was some discussions behind the scenes, the then 
assistant Secretary for Lands and Minerals had a conversation 
with BSEE leadership and us in the room and said there will--
that this will not go on, and during our second investigation, 
it was much better.
    Mr. Comer. So who was it that made sure that happened?
    Mr. Rusco. That was the assistant secretary.
    Mr. Comer. Mr. Cardinale, you were chief of staff in the 
Office of the assistant Secretary for Land and Minerals, 
correct?
    Mr. Cardinale. That's correct.
    Mr. Comer. It appears your office was able to greatly 
improve cooperation with the GAO. What steps did you all take 
to make this happen?
    Mr. Cardinale. Thank you for your question, Congressman 
Comer. I think part of what happened, just generally, is 
beginning in the previous administration, and certainly 
continuing into this administration, there is a recognition 
that the work that GAO does is extremely valuable, and that it 
is important that we provide the GAO with the utmost 
cooperation in facilitating their reviews so that we can get 
the benefit of well-informed, thoughtful recommendations.
    Mr. Comer. Okay. Let me back up. The deputy director that 
you are referring to, is that Margaret Schneider?
    Mr. Rusco. Yes, that is.
    Mr. Comer. Okay. Mr. Cardinale, will the agency and BSEE 
leadership commit to giving this Congress and the GAO ready 
access to data information and staff it needs to interview to 
do its oversight work?
    Mr. Cardinale. Yes, Congressman.
    Mr. Comer. Okay. Well, thank you.
    Mr. Chairman, I yield back my time.
    Mr. Farenthold. Will the gentleman yield for just one 
second?
    Mr. Comer. Yes, sir.
    Mr. Farenthold. And, Mr. Cardinale, the minder that was 
talking to the assistant--or the deputy director, Ms. 
Schneider, what's her position now?
    Mr. Cardinale. She is currently serving as acting director. 
Like a number of senior career employees who are asked during 
the transition period, myself included, she is serving 
temporarily as the acting director.
    Mr. Farenthold. All right. Thank you very much.
    Mr. Raskin, did you have any more questions?
    Mr. Raskin. I did.
    Mr. Farenthold. You have another 5 minutes.
    Mr. Raskin. If I may. Thank you very much, Mr. Chairman.
    One general question I have is, the bottom line for most 
Americans is simply what are the chances of another Deepwater 
Horizon event? Have we been systematically reducing the 
prospects of another Deepwater Horizon?
    Mr. Cardinale. Yes, I think we have. I think the events of 
that tragedy have informed a better and more effective way of 
conducting our oversight. We've taken a hard look at some of 
the elements that led to that tragedy, and I think that we have 
done a better job.
    Mr. Raskin. And can you explain what that original 
bureaucratic resistance was to staffing up, hiring the 
requisite experts, and making the strongest approach?
    Mr. Cardinale. I think my initial response to that would be 
that we--the Bureau was, in fact, in its early days, seeking to 
develop a mission that in some areas had previously not been 
carried out by predecessor organizations. I can only speculate, 
and I wouldn't at this point speculate.
    Mr. Raskin. Okay. Let me go to another question then. 
According to the Outer Continental Shelf Lands Act, the Bureau 
of Ocean Energy Management is required to develop a 5-year oil 
and gas leasing plan. The current plan was finalized earlier 
this year by the Obama administration before leaving office, 
and it runs until 2022, and it struck a balance between the 
economic development and environmental imperatives.
    Does this administration intend to make changes to this 
plan? And if so, what would they be?
    Mr. Cardinale. At this point, I don't know the specifics, 
but I do know that the administration is, in fact, taking a 
look at the plan that was finalized at the end of the last 
administration.
    Mr. Raskin. Okay. Well, Mr. Chairman, obviously this is a 
President who said he wants to promote deregulation. What we 
don't know at this point is what specific regulatory changes 
might be forthcoming from the administration in this field and 
how they would affect the environment and affect workers. And I 
hope this subcommittee, under your leadership, will continue to 
use its oversight powers to evaluate the deregulatory actions 
in terms of their implications for the environment and for 
workers.
    With that, I yield back to you, Mr. Chair.
    Mr. Farenthold. Thank you very much.
    I just have a couple of quick questions to wrap it up. Mr. 
Rusco, after reviewing your work and hearing the testimony 
here, it appears that the leadership at BSEE has created a 
malfunctioning work environment, whether it's distrust between 
headquarters and regional personnel mismanagement, failed 
initiatives, wasted money, fear of retaliation. Would you agree 
with this characterization? And if so, what do you think--why 
do you think the environment has become so poor?
    Mr. Rusco. I do agree with that. Unfortunately, and in 
terms of the root cause, well, I think it lies squarely in the 
leadership of BSEE. I mean, I think that they created an 
environment where they did not seek the advice and counsel of 
the experts in the field, and instead they created a culture 
where there was a fear of retaliation for anyone who said 
something different than what they were trying to do. And that 
really stopped organizational change in its tracks.
    And as a result of that, we had cleared Interior from the 
high-risk list in terms of restructuring, but in this last 
year, we put them back on, and it's entirely for this 
leadership failure.
    Mr. Farenthold. And what effect do you think this 
environment and these problems are having on overall safety and 
oversight mission that BSEE has?
    Mr. Rusco. Well, I think that if BSEE, instead of spending 
3 years and a lot of money on a risk-based approach to 
inspections, had gone to the field and said, you know, you guys 
have a lot of experience in this, let's build a risk-based 
approach together, they would have had one that worked the 
first time and they'd have one right now up and running that 
worked.
    Mr. Farenthold. And have you seen any improvements in the 
work environment since the beginning of the new administration?
    Mr. Rusco. We haven't been doing any audits in there, so I 
can't----
    Mr. Farenthold. Mr. Cardinale, has anything started to 
change since the administration changed? Microphone, please.
    Mr. Cardinale. I think there's always been a strong 
commitment on the BSEE workforce, as there is with all Federal 
employees. I do think that, as Secretary Zinke assembles his 
management team, that there'll be a renewed focus on employee 
engagement and empowerment and ensuring that people on the 
front lines have the tools they need to get the job done and 
that we hear from them.
    Mr. Farenthold. All right. And, Mr. Rusco, do you believe 
leadership changes at BSEE could help address some of these 
issues?
    Mr. Rusco. Yes, I do.
    Mr. Farenthold. Anything else you think could help, that 
you haven't mentioned so far?
    Mr. Rusco. That it's not necessarily the case that every 
leader has to know everything about an organization to be an 
effective leader, but they have to want to learn. And they have 
to go out and find out what their mission is and they have to 
find out from the people who do it. So whoever takes over, 
that's what they have to do.
    Mr. Farenthold. All right. Finally, from a congressional 
standpoint, is there anything particular that you think 
Congress could or should do to improve this situation? And I'll 
let you both take a stab at that. Mr. Rusco?
    Mr. Rusco. At this point, I think the agency has the 
authority and the ability to make any changes it needs to make. 
If they don't make those changes, then I would have a different 
answer.
    Mr. Farenthold. And I'm always nervous asking somebody from 
an agency, because the answer is usually, ``give us more 
money.'' Other than money, Mr. Cardinale, what can we do for 
you?
    Mr. Cardinale. I'm in agreement with Mr. Rusco. I think 
BSEE has the authorities it needs to do its job, and I'm 
looking forward to the leadership coming in and charting the 
course ahead.
    Mr. Farenthold. All right. Great.
    Mr. Raskin, if you don't have anything else, I'd like to 
thank our witnesses for being here, and appreciate your service 
to our country.
    And with that, we are adjourned.
    [Whereupon, at 2:59 p.m., the subcommittee was adjourned.]


                                APPENDIX

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               Material Submitted for the Hearing Record
               
               
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