[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
__________
Printed for the use of the Committee on Oversight and Government Reform
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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
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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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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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