[Senate Hearing 115-332]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-332

                   NOMINATIONS OF CLAIRE M. GRADY AND
                              HENRY KERNER

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             FIRST SESSION

                               __________

        NOMINATIONS OF CLAIRE M. GRADY TO BE UNDER SECRETARY FOR
          MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY AND
       KENRY KERNER TO SPECIAL COUNSEL, OFFICE OF SPECIAL COUNSEL

                               __________

                             JUNE 28, 2017

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
               Margaret E. Daum, Minority Staff Director
                  Anna Laitin, Minority Policy Adviser
                     Laura W. Kilbride, Chief Clerk
                    Bonni Dinerstein, Hearing Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator Heitkamp.............................................     2
    Senator Carper...............................................    11
    Senator McCaskill............................................    14
    Senator Hassan...............................................    16
    Senator Daines...............................................    18
Prepared statements:
    Senator Johnson..............................................    25
    Senator Heitkamp.............................................    27

                               WITNESSES
                        Wednesday, June 28, 2017

Claire M. Grady, to be Under Secretary for Management, U.S. 
  Department of Homeland Security
    Testimony....................................................     4
    Prepared statement...........................................    29
    Biographical and financial information.......................    31
    Letter from the Office of Government Ethics..................    50
    Responses to pre-hearing questions...........................    53
    Responses to post-hearing questions..........................    73
    Letter of support............................................    85
Henry Kerner to be Special Counsel, Office of Special Counsel
    Testimony....................................................     6
    Prepared statement...........................................    86
    Biographical and financial information.......................    89
    Letter from the Office of Government Ethics..................   108
    Responses to pre-hearing questions...........................   111
    Responses to post-hearing questions..........................   140

 
            NOMINATIONS OF CLAIRE M. GRADY AND HENRY KERNER

                              ----------                              


                        WEDNESDAY, JUNE 28, 2017

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:58 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Daines, McCaskill, Carper, 
Tester, Heitkamp, Peters, Hassan, and Harris.

            OPENING STATEMENT OF CHAIRMAN JOHNSON\1\

    Chairman Johnson. Good morning. This hearing will come to 
order.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 25.
---------------------------------------------------------------------------
    This hearing is the nomination hearing to consider Claire 
M. Grady to be Under Secretary for Management of the U.S. 
Department of Homeland Security (DHS), and Henry Kerner to be 
the Special Counsel, Office of Special Counsel (OSC).
    Today the Committee will consider two nominations within 
its jurisdiction that are integral to ensuring the Department 
of Homeland Security is efficient and effective, and that 
people who raise issues of waste, fraud, and abuse throughout 
the Federal Government are protected.
    The Under Secretary for Management for the Department of 
Homeland Security is responsible for ensuring that DHS' 
workforce has clearly defined responsibilities and the means to 
efficiently carry out the Department's mission. The Under 
Secretary of Management's office handles a budget of just under 
$1 million--I have to admit I am surprised at how small it is 
based on the responsibility--with approximately 1,800 full-time 
equivalents.
    More broadly, the Under Secretary of Management oversees 
the Department's budget of almost $66 billion, which is a whole 
lot larger, the appropriations associated with that budget, 
expenditure of funds, accounting, and finance; procurement 
processes; human resources (hr) and personnel of approximately 
240,000 employees; information technology (IT) systems, 
facilities, property, equipment, and other material resources; 
and if that is not quite enough, also performance measurements.
    Several programs that fall squarely under the Under 
Secretary of Management's responsibilities have been flagged by 
nonpartisan government watchdogs as being at high-risk for 
abuse, including the Department's management of human capital--
including employee morale and engagement, and cohesion among 
component leadership--management of its grant and acquisition 
programs, and the Department's cybersecurity.
    Let me just say, Ms. Grady, I appreciate your willingness 
to step up to the task. It is a big task, and we certainly wish 
you well.
    The Special Counsel of the Office of Special Counsel--that 
is quite the title--is the head of the Office of Special 
Counsel, an independent agency created by Congress in 1979. The 
Office of Special Counsel has over 100 employees and operates a 
budget of almost $25 million each year. The Office of Special 
Counsel is charged with: one, providing a safe haven for 
Federal employees to make protected disclosures--with the 
exception of certain intelligence agencies; and, two, 
investigating allegations of whistleblower retaliation or other 
prohibited personnel practices. Federal employees are protected 
when they disclose allegations of: a violation of law, rule, or 
regulation; gross mismanagement or waste; abuse of authority; 
or dangers to public health or safety.
    If the OSC reviews a protected disclosure and finds there 
is a ``substantial likelihood'' of wrongdoing by an agency, it 
transfers the matter to the agency for investigation and issues 
a report to Congress and the President. It cannot, however, 
force the agency to take other action. If the OSC finds that an 
individual faced retaliation for the disclosure, it may 
negotiate disciplinary action with the agency against the 
retaliating employee and prosecute when appropriate.
    The OSC also investigates Hatch Act violations and protects 
the employment and reemployment rights of civilian military 
members. Finally, it plays an important role in training 
agencies on how to handle whistleblowers and employees on their 
rights through its outreach and 2302(c) Certification Program.
    I have been on this Committee now 6\1/2\ years. Both of 
these positions, both of these offices, are integral to our 
oversight capability and our duty also to protect 
whistleblowers. So I take these nominations very seriously, and 
I truly do appreciate that the President has nominated two 
high-quality individuals to fill these positions, and I really 
appreciate your willingness to serve and want to thank you for 
your testimony today and coming before the Committee for your 
nomination hearing.
    With that, I will turn it over to Senator Heitkamp, who has 
her own opening statement.

            OPENING STATEMENT OF SENATOR HEITKAMP\1\

    Senator Heitkamp. Thank you, Mr. Chairman. First, I want to 
acknowledge that Ranking Member McCaskill wishes she could be 
here today. I know she appreciates the nominees' work with hers 
and Chairman Johnson's staff throughout this process. Claire 
sits on the Senate Armed Services Committee. One of the great 
roles is to do defense authorization. They are in that process 
right now, and so it is critical that she be there to make sure 
that she is participating in that process. So I expect to see 
her a little bit later on.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Heitkamp appears in the 
Appendix on page 27.
---------------------------------------------------------------------------
    I am honored that Ranking Member McCaskill asked me to step 
in for her this morning, and I am looking forward to hearing 
from both nominees regarding how they can best serve the 
American people through their roles in the Office of Special 
Counsel and the Department of Homeland Security, if confirmed.
    At the heart of the Office of Special Counsel is the 
mission to protect Federal employees from prohibited personnel 
practices, and specifically from illegal retaliation against 
whistleblowers.
    As the Ranking Member of the Homeland Security and 
Governmental Affairs Subcommittee with oversight over the 
Federal workforce, I cannot emphasize enough what a critical 
time it is to make sure that our Federal workforce knows that 
they have a safe and independent agency to turn to in the 
Office of Special Counsel.
    In 2016 alone, the Office of Special Counsel received over 
6,000 new matters. That was a 53-percent increase from 2010. 
That is a tremendous upturn, and it speaks not only to the 
large number of prohibited personnel practice complaints in 
general, but also to the trust that the Federal employees had 
in Special Counsel Lerner during her tenure at the OSC.
    At a time when our Federal workforce is undergoing a number 
of new challenges such as reorganization at the behest of the 
Office of Management and Budget (OMB), it is important that the 
Special Counsel remain an independent, just, fair, and unbiased 
voice when it comes to protecting Federal employees when they 
report any wrongdoing within their respective agencies.
    The DHS Under Secretary for Management plays also a 
critical role in achieving excellence in all areas of DHS 
mission support. While DHS has made considerable progress in 
recent years to unify its component agencies, major management 
challenges remain in the four key areas of human capital, 
acquisitions, fiscal management, and IT.
    Failure to address these challenges could have serious 
consequences for U.S. national and economic security, and that 
is why it is absolutely critical we have a qualified individual 
at the helm.
    Specifically, we need someone with demonstrated leadership 
and experience, a robust understanding of DHS and its various 
components, a willingness to engage with various stakeholders, 
and the ability to find opportunities to improve the way DHS 
functions.
    We appreciate the nominees' time today, and I am looking 
forward to hearing Ms. Grady's and Mr. Kerner's responses to 
the Committee. Welcome. We are grateful when we see candidates 
of the caliber that we have in front of us willing to offer 
their service to the people of our great country. And so, 
again, congratulations to you and your family for putting your 
name forward. I look forward to the discussion.
    Chairman Johnson. Thank you, Senator Heitkamp.
    It is the tradition of this Committee to swear in 
witnesses, so if you will both stand and raise your right hand? 
Do you swear that the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Ms. Grady. I do.
    Mr. Kerner. I do.
    Chairman Johnson. Please be seated.
    I was remiss, by the way, in not welcoming your families--I 
am sure you have some family members here, and I will let you 
introduce your family members, but welcome.
    Our first nominee, is the President's nominee to be the 
Under Secretary for Management of the U.S. Department of 
Homeland Security, Ms. Claire M. Grady. Ms. Grady has extensive 
experience in acquisitions and procurement. She is currently 
the Director of Defense Procurement and Acquisition Policy at 
the Department of Defense (DOD) and previously served as the 
Deputy Assistant Commandant for Acquisition and Director of 
Acquisition Services for the United States Coast Guard (USCG). 
Ms. Grady also has previously served at the Department of 
Homeland Security as the Director of Strategic Initiatives in 
the Office of the Chief Procurement Officer. Ms. Grady has an 
MBA degree from the University of Maryland, a Master of Science 
degree from the National Defense University's Industrial 
College of the Armed Forces, and a Bachelor of Arts degree from 
Trinity University. Ms. Grady.

  TESTIMONY OF CLAIRE M. GRADY,\1\ TO BE UNDER SECRETARY FOR 
        MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Grady. Good morning. Chairman Johnson, Ranking Member 
McCaskill, and distinguished Members of this Committee, it is 
an honor to appear before you today as the President's nominee 
to be the Under Secretary for Management for the Department of 
Homeland Security. I am grateful to the President, Secretary 
Kelly, and Deputy Secretary Duke for the trust and confidence 
they have placed in me.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Grady appears in the Appendix on 
page 29.
---------------------------------------------------------------------------
    I would like to thank the Members of this Committee and 
their staffs for the important work you do. I appreciated the 
opportunity to speak with several of you about your thoughts 
and priorities regarding management operations of the 
Department of Homeland Security. For those of you that I have 
not yet had the privilege to meet during this process, if 
confirmed, I look forward to the opportunity to do so in the 
future.
    I would also like to thank the many current and former 
employees of the Department who have contacted me throughout 
this process to offer their support and encouragement. It is 
truly the men and women of DHS who ensure mission success, 
frequently working very long hours and overcoming challenging 
circumstances to do so. There is no more dedicated or talented 
group of professionals anywhere in the world, and their 
outreach and expressions of support have been both humbling and 
inspiring.
    Before I speak further about the important work the 
Department of Homeland Security does to safeguard our Nation, I 
would like to express my gratitude to the friends and family 
who were able to attend in person to support me today, 
including: my mother, Mary Grady; my aunt and uncle, Helen and 
Vincent Walters; my son-in-law, Lieutenant Michael Berl; my 
oldest sister, Kelly Grady, and her husband, Michael Zuckerman; 
and Maggie Meisberger, the oldest of my five nieces--each of 
whom is amazing in their own right.
    I would also like to thank my husband, Colonel Rick 
Cornelio. I am so proud of him and his service to the country. 
He served our country 34 years in uniform in the Air Force and 
continues to serve now as a member of the civil service. His 
love and support are a tremendous source of strength for me.
    Senator Carper. Mr. Chairman, if I could? Could I ask the 
folks you just named just to raise your hand? Is that your mom 
over to the right?
    Ms. Grady. It is.
    Senator Carper. Good work, Mom. [Laughter.]
    Ms. Grady. Thank you, sir.
    More than 15 years after September 11, 2001, the threats to 
our Nation, our people, and our way of life remain. The world 
is a dangerous place, and the velocity of threats is ever 
changing and accelerating. Round the clock, whether at a 
computer, in our communities, at an airport, at a port of entry 
(POE), at a desk, in the air, in the classroom, on the border, 
in a command center, or in a lab, the professionals of DHS 
valiantly serve our Nation and keep us safe. They have 
committed themselves to thwarting our Nation's adversaries--
natural or man-made--in an environment where a single incident 
can have devastating consequences. And if tragedy were to 
befall our Nation, they are prepared to respond and aid in the 
recovery. I can think of no greater honor than to be considered 
for a position to help those dedicated men and women safeguard 
our Nation by strengthening and integrating the Department's 
management functions.
    Let me share some more information about my professional 
background. I am a career Federal civil servant and have had 
the privilege of supporting our Nation for more than 25 years. 
I started as a GS-7 intern, progressed through positions of 
increasing responsibility and scope, and have been a member of 
the Senior Executive Service (SES) for over a decade. I served 
in senior positions at the component and headquarters levels of 
two different agencies--the Departments of Defense and Homeland 
Security--leading large, diverse, and geographically dispersed 
workforces to deliver results.
    My parents raised me to value hard work, discipline, and 
perseverance. They instilled in me the expectation that when 
things get difficult, it is our obligation to help--to take on 
the tough challenges and make things better. I was never more 
aware of this responsibility than when approached to consider 
this position. I recognize the many challenges that DHS has: 
the diverse mission set, myriad stakeholders, complex 
oversight, and the urgency and criticality of the work itself. 
I know none of this is easy. But I am impressed by the progress 
that has been made through the efforts of not just a few, but a 
multitude of individuals throughout the Department at all 
levels.
    If confirmed, I would be committed to building on the great 
things that are underway throughout DHS, striving for 
excellence in all areas of mission support, and delivering 
maximum value for every dollar entrusted to the Department. I 
would welcome the opportunity to engage collaboratively with 
Members of this Committee and other Members of Congress to 
assist and inform their important work of oversight and support 
for the Department. Finally, I would be dedicated to ensuring a 
culture of respect and professionalism; the men and women of 
Homeland Security and our Nation deserve nothing less.
    Thank you for your consideration, and I look forward to 
answering your questions.
    Chairman Johnson. Thank you, Ms. Grady.
    Our second nominee is the President's nominee to be the 
Special Counsel of the Office of Special Counsel, Henry Kerner. 
Mr. Kerner is currently the assistant vice president of 
investigations at the Cause of Action Institute. Prior to that, 
he was the Deputy Director of Investigations of the House 
Oversight and Government Reform Committee and the Staff 
Director and Chief Counsel of this Committee's Permanent 
Subcommittee on Investigations (PSI) under then-Ranking Member 
McCain. Mr. Kerner also has years of litigation experience 
working as a deputy district attorney at the Los Angeles County 
District Attorney's Office. Mr. Kerner has a law degree from 
Harvard University and a master's and bachelor's degree from 
UCLA.
    Welcome, Mr. Kerner. You may want to introduce your family 
as well.

STATEMENT OF HENRY KERNER,\1\ TO BE SPECIAL COUNSEL, OFFICE OF 
                        SPECIAL COUNSEL

    Mr. Kerner. Thank you, Mr. Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Kerner appears in the Appendix on 
page 86.
---------------------------------------------------------------------------
    Chairman Johnson, Ranking Member McCaskill, and 
distinguished Members of this Committee, thank you for the 
honor to appear before you today and for the privilege of your 
consideration of my nomination. I am humbled and honored to 
have been nominated by the President to lead this important 
office that protects the whistleblowers so vital to holding our 
government accountable.
    I would like to start by thanking a few people. First and 
foremost, a big thank you to my family who are in California, 
so they are watching online. But I wanted to thank my parents 
in particular, Mark and Larissa. They have been tremendously 
supportive, and I appreciate their frequent encouragement and 
unconditional love.
    I would also like to thank Katherine and Nick Rossi, who 
are sitting behind me, who have been tremendous friends. And I 
am terrifically grateful to Senator John McCain, who gave me 
the opportunity to serve as his Staff Director on this 
Committee's Permanent Subcommittee on Investigations during the 
113th Congress, making today something of a homecoming to me--
although I must confess it is different sitting on this side of 
the dais.
    Additionally, I am heartened and touched by the attendance 
of so many current and former colleagues and friends of mine. 
They have come to support me, and they are here in the 
audience, and I really appreciate that support. I have learned 
so much from all of them, and I just appreciate their continued 
support and affection.
    A special thank you to John Vecchione and Julie Smith of 
Cause of Action Institute for being so accommodating with me 
during this confirmation process.
    Last, I would be remiss if I failed to express my 
appreciation to the outgoing OSC leadership. Special Counsel 
Carolyn Lerner, Acting Special Counsel Adam Miles, along with 
the career staff at OSC should be commended for dramatically 
increasing productivity at OSC and significantly advancing 
protections for whistleblowers. I am especially grateful that 
Mr. Miles, who is currently the Acting Special Counsel, decided 
to bring on Mr. Tristan Leavitt, also sitting directly behind 
me, as the new Principal Deputy Special Counsel to assist with 
the transition process. Mr. Leavitt is an 8-year Hill veteran, 
I have worked with him previously, and he is just exceptionally 
talented and completely committed to the mission of the agency. 
I am absolutely thrilled he chose to join OSC last week, and I 
look forward to working with him again, should I be confirmed.
    As for my own background, I have been a government lawyer 
and counsel for nearly my whole professional life. I served as 
a prosecutor in Los Angeles County for nearly two decades, most 
of which I spent in the city of Compton, California. That 
experience taught me how crucial it is for citizens to have 
confidence in the law and the legal system--to trust, and be 
given tangible reasons to believe, that government officials 
with integrity are striving to apply the law fairly to each and 
every person.
    Once I transitioned to the Hill, I was one of the primary 
congressional investigators of the Fast and Furious scandal, 
which involved allegations of ``gunwalking'' made by 
whistleblowers to Congress. My work with whistleblowers 
continued when I became the minority staff director on PSI and 
again when I returned to the House Oversight and Government 
Reform Committee in a leadership role. Through my interactions 
with whistleblowers, I have learned about what animates people 
to speak out when others may not and what a vital impact such 
brave civil servants can have on our country's policies.
    To that end, I am particularly pleased that this Committee 
has done so much to advance legislation to protect 
whistleblowers. Just last month, the Senate passed this 
Committee's Dr. Chris Kirkpatrick Whistleblower Protection Act. 
It was developed in response to the Committee's work with 
Department of Veterans Affairs (VA) whistleblowers, but it will 
also help Federal employees governmentwide once enacted.
    In addition, I know that Chairman Johnson and Ranking 
Member McCaskill and their staffs have put an immense amount of 
work into the Office of Special Counsel Reauthorization Act, 
which was reported to the Senate floor last month. I have 
already heard from staff at OSC about how beneficial that 
legislation is in clarifying Congress' longstanding intent to 
provide OSC with access to all materials necessary to carry out 
its responsibilities.
    These and other provisions like them, such as the Follow 
the Rules Act and S. 1083, which the President signed into law 
just yesterday, will greatly strengthen my capacity to protect 
whistleblowers should I be confirmed as Special Counsel. For 
that I am grateful.
    In closing, I would just like to highlight a few of my 
goals for OSC, should I be confirmed, based on my discussions 
to date with members and staff in Congress, stakeholders, and 
OSC employees.
    First, as I already mentioned, I want to continue to build 
on Ms. Lerner's successes at OSC.
    Second, I want to continue to implement the information 
technology system upgrades currently in progress, while paying 
special attention to cybersecurity and caseload efficiency 
gains.
    Third, I want to address how best to optimize intake of an 
ever-expanding caseload in order to provide appropriate 
response times to whistleblowers.
    Fourth, I want to increase education and outreach with 
agency and congressional staff, especially with regard to the 
Hatch Act and whistleblowers' rights.
    And, finally, I want to place an increased emphasis on 
litigation to promote accountability, deter future violations, 
and strengthen OSC's bargaining position when negotiating 
settlement agreements for whistleblowers.
    If confirmed, I look forward to the opportunity to work 
collaboratively with this Committee and other stakeholders to 
protect one of the Federal Government's most important assets: 
dedicated Federal employees who are willing to ``blow the 
whistle'' on misconduct and violations of the public trust.
    Thank you, and I would be happy to answer any questions the 
Committee may have.
    Chairman Johnson. Thank you, Mr. Kerner.
    There are three questions the Committee asks every nominee 
for the record, and I will ask the questions, and each of you 
answer separately in order.
    Is there anything you are aware of in your background that 
might present a conflict of interest with the duties of the 
office to which you have been nominated? Ms. Grady.
    Ms. Grady. No.
    Chairman Johnson. Mr. Kerner.
    Mr. Kerner. No.
    Chairman Johnson. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated? Ms. Grady.
    Ms. Grady. No.
    Chairman Johnson. Mr. Kerner.
    Mr. Kerner. No.
    Chairman Johnson. Do you agree without reservation to 
comply with any request or summons to appear and testify before 
any duly constituted committee of Congress if you are 
confirmed? Ms. Grady.
    Ms. Grady. Yes.
    Chairman Johnson. Mr. Kerner.
    Mr. Kerner. Yes.
    Chairman Johnson. Thank you. I just want to say I 
appreciate the Members' being here, and in the interest and 
being respectful of your time, I am going to delay my own 
questioning, and I will go right to Senator Heitkamp, if you 
are ready.
    Senator Heitkamp. I am. Thank you, Mr. Chairman.
    Obviously, I know that this role of being Special Counsel 
is absolutely critical to making sure that we have a role here 
in oversight. So for me, a lot of what you are going to be 
looking at is stuff that over the long haul is absolutely 
critical to us performing the oversight function and mission.
    And so I find it, rewarding and--not rewarding, but I find 
it, a very good fit that someone has been nominated with so 
much Hill experience, because I think you can appreciate and 
understand how critical that role is to the work that this 
Committee does, either in the Permanent Subcommittee on 
Investigations or certainly just oversight in agencies.
    One of the questions that we have been very concerned with 
on this Committee is the issue of whether requests from 
Committee Members, regardless of whether you sit in that chair 
or in any other chair, whether those requests will be 
fulfilled. The Office of Legal Counsel has issued an opinion. 
Are you both familiar with that opinion? Ms. Grady.
    Ms. Grady. Yes, I am.
    Senator Heitkamp. Mr. Kerner.
    Mr. Kerner. I am as well, yes.
    Senator Heitkamp. OK. Obviously, we believe that the 
opinion--I think the opinion is shortsighted and probably 
wrong, but the opinion does offer an opportunity to exercise 
some discretion.
    Ms. Grady, if I send you a letter and ask for information, 
would you respond to that letter?
    Ms. Grady. Absolutely.
    Senator Heitkamp. Thank you. Mr. Kerner.
    Mr. Kerner. Absolutely.
    Senator Heitkamp. Thank you. I will get that out of the 
way.
    Senator Carper. That was the right answer.
    Senator Heitkamp. Yes, that is the right answer. 
[Laughter.]
    Chairman Johnson. Yes. Thank you.
    Senator Heitkamp. Let us get to the personnel and resources 
at the Office of Special Counsel. I along with the Chairman are 
concerned about resources and whether you have enough resources 
to do the important work that you need to do. Can you tell me, 
have you looked at the resourcing issues? And what would be 
your intention if you believed you needed more resources? How 
would you approach getting that allocation or appropriation?
    Mr. Kerner. Yes, so Ms. Lerner talked a lot about how she 
has been able to manage more with less. There have been over 
6,000 cases. That is a huge record. Yet the agency has been 
able to get better and better results. The way they have done 
it is they have combined certain functions; they have become 
more efficient. For example, they have assigned one lawyer to 
four different functions as opposed to having four different 
people looking at it. So making those efficiencies, they have 
been able to utilize their resources better.
    I think one of the things that I would look to is in the 
OSC Reauthorization Act, it talks about--OSC has a mandate to 
investigate all complaints, but some of them are on their face 
not going to work. They are not in the right--they should not 
even be at OSC. They have passed the statute of limitations. 
There are other obvious disqualifiers. In the act, there is an 
opportunity for OSC to dispense with those without having even 
to conduct an investigation and go through a lot of staffing on 
that. So that would be, for example, very helpful.
    But in terms of other things, the IT system is going to be 
redone at OSC. Hopefully, it will be more efficient. Hopefully, 
the case intake is absolutely crucial because once you 
determine what cases go through the process, that requires an 
investment of resources. So once we have----
    Senator Heitkamp. Is the answer you think you are going to 
manage with what you have so far? But what happens if you get 
there and you get double the amount of complaints? How will you 
manage that?
    Mr. Kerner. Absolutely. If the resources are not enough and 
the work has to be done, we will come to the Congress and ask 
for resources, and the appropriation has gone up a little bit, 
so to the extent that the Congress funds OSC to a greater 
degree, that would obviously be very helpful.
    Senator Heitkamp. One of the concerns that I have is 
communication back to supervisors. How do you plan to 
communicate to supervisors that listening to their employees is 
in the best interest of their organization, might be, in fact, 
a way that they can see your face by actually encouraging them 
to listen, to reach out to employees, to actually use better 
management practices? What role can you play in improving that 
level of supervision?
    Mr. Kerner. Absolutely. One thing you have to set is you 
have to set a tone where that challenge process is respected. 
You have to allow people to bring concerns to their chains, to 
supervisors, and not be punished for it. It would be ultimately 
very ironic if an agency whose main task is to protect 
whistleblowers and protect the disclosures punishes its own 
people for disclosures. We are going to try not to do that.
    Senator Heitkamp. Ms. Grady, obviously personnel and 
recruitment is going to be a huge issue, especially if we see 
the level of plus-up that we are talking about. We have been 
doing some legislation here that we think will help streamline 
it, but I am deeply concerned about the lack of resources on 
the Northern Border and how discouraged staff gets on the 
Northern Border when they do not get any additional help.
    As Under Secretary for Management, what strategies can you 
use to address recruitment, retention, and morale challenges? 
How will you advocate for those internally?
    Ms. Grady. The human resources are the essential element of 
the Department, and filling critical vacancies is absolutely an 
essential part of the Department's success. So, if confirmed, I 
would work with the Chief Human Capital Officer (CHCO) to look 
at what is working and what is not working. Based on actual 
data, we would be able to develop and formulate a plan to 
better address those gaps, those vacancies as those were to 
occur, and look to take advantage of the flexibilities that 
this Committee has given to the Department.
    Senator Heitkamp. This is a really critical issue, and we 
hear the same answer. I think every year that I have been on 
this Committee, which has been my entire term in the Senate, we 
talk about morale at DHS; we talk about recruitment and 
retention; we talk about the lack of consolidated, visionary 
mission, understanding. And so, we need to quit talking about 
it, and we need to develop strategies that actually achieve the 
result.
    Ms. Grady. I fully agree, and I believe the Department has 
started to make progress and will continue to make progress 
because, instead of studying the problem, there are action 
plans that are resourced associated with furthering the efforts 
of employee engagement. Those action plans are based on 
analysis of data at a lower level, not looking at the 
Department in aggregate, which significantly masks the actual 
problems, because you want to go after the root cause, not the 
symptoms.
    Senator Heitkamp. Thank you.
    Chairman Johnson. Thank you, Senator Heitkamp. Senator 
Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Colleagues, this is a woman after my own 
heart. These guys up here have heard me talk about root causes 
for much of the last--I do not know how many years. It is a 
pleasure to hear it out of your lips.
    Mr. Kerner, did you say your parents might be tuned in from 
the west coast?
    Mr. Kerner. Yes. They are in Los Angeles.
    Senator Carper. Mark and, what is it, Larissa?
    Mr. Kerner. Larissa.
    Senator Carper. I do not know if they are watching, but if 
they are, just tell them one of the joys of this job is we get 
to nominate young men and women to attend the Naval Academy, 
West Point, Air Force Academy, and the Merchant Marine Academy. 
When our nominees win appointments to those academies, we have 
the chance to call them and congratulate them, and I always ask 
to talk to the parents of our nominees. I always tell them this 
message: ``Thank you for raising this young man or young woman 
and preparing them for this opportunity, this responsibility.'' 
I would say the same to Mark and Larissa.
    I would say, Claire, to your mom, ``Thank you for raising 
this kid. It looks like she has turned out pretty well.''
    I have had the privilege of serving on this Committee, this 
is my 17th year, and I have been very much involved, as some of 
you may know, in trying to work with my colleagues on making 
sure that the Department of Homeland Security has what it needs 
in order to be successful. One of those is excellent 
leadership, and we worked very closely--Claire and Ron and 
myself worked very closely with Jeh Johnson, with Ali Mayorkas, 
to make sure that they had top-tier Senate-confirmable 
positions filled with excellent people. One of those is 
following Russ Deyo, who headed up the management section, 
Under Secretary for Management, and I think you probably know 
him. Is that right? OK. And Rafael Borras. Did you know Rafael?
    One of the things I talked with Mr. Kerner about yesterday 
was making sure that he and Carolyn Lerner had a good ongoing 
conversation. I got to be Governor of Delaware and had the 
blessing in my life of having Mike Castle as my predecessor and 
a great colleague, mentor, Pete du Pont before that, others 
before that, and they served me as a great source of 
inspiration and terrific mentors, and I made good, full use of 
them. I would just ask how you might have that kind of 
relationship with Russell or Rafael. Could you? Would you?
    Ms. Grady. Absolutely. They have valuable insight, having 
been in the position and worked at some of the tough challenges 
and made progress. Both them, Paul Schneider, and Elaine Duke, 
there has been a tremendous source of wisdom from those 
predecessors.
    I have not yet had an opportunity to talk to either Russ or 
Rafael, but I have talked to Chris Cummiskey, Paul Schneider, 
and Elaine Duke in preparation for this and would solicit their 
advice and input in terms of their thoughts on what they wished 
they could have gotten done and what impediments they 
encountered.
    Senator Carper. What I would do from time to time as 
Governor, a new Governor, was invite them to come by the 
Governor's house and have lunch together, or breakfast, and 
just talk. I would say, ``Give me some good advice.'' And, boy, 
they would. I benefited enormously from that. You might want to 
keep that in mind.
    I first heard the words ``St. Elizabeths,'' I do not know, 
maybe 6 or 7 years ago, and I thought, Why would anybody want 
to go out there and create a headquarters for the Department of 
Homeland Security? That does not make any sense. Then I talked 
to Tom Ridge, who is a former Secretary; Judge Chertoff, former 
Secretary; Janet Napolitano, former Secretary; and then Jeh 
Johnson, and I said, ``Why do we need to spend all this money 
on St. Elizabeths? '' And they said, basically to a person, 
``This Department is scattered all over Hell's Half Acre. We 
have 40 or 50 entities that are spread all over the greater 
Washington area, into Virginia and Maryland and across D.C., 
and it is an almost impossible management task for us to get 
our hands around.''
    Would you speak to that?
    Ms. Grady. Certainly. I believe the consolidation of DHS at 
St. Elizabeths, creation of a DHS headquarters is absolutely 
essential in terms of furthering the unity of effort across the 
Department. I believe it will significantly help to strengthen 
and integrate the Department and accelerate decisionmaking.
    Senator Carper. Thank you. I agree. I am Tom Carper, and I 
approve that message.
    Does the name Jane Holl Lute mean anything to you.
    Ms. Grady. Yes, sir.
    Senator Carper. She was Deputy Secretary when Janet was our 
Secretary, and do you know what she used to do? She would take 
the High-Risk List from the Government Accountability Office 
(GAO) that comes out every 2 years, high-risk waste, wasted 
money, and the Department of Homeland Security figured most 
prominently every 2 years. It was released at the beginning of 
every Congress. Jane Holl Lute just started going to meet with 
the senior, the top people at GAO, and saying, ``How do we get 
off of your list?'' They worked it, they worked it, they worked 
it. The Department of Defense, as my colleagues know, is still 
looking for their first clean audit, and, lo and behold, the 
Department of Homeland Security in less than 10 years has 
gotten three, four, five of them. They really set a good 
example of how this can be done.
    Talk to us about the High-Risk List. I like to describe it 
as our--what do I call it, Claire? I call it our ``to-do 
list,'' our to-do list in this Committee. What do you think?
    Ms. Grady. Certainly. I very much respect GAO's role in 
strengthening government and coming up with better ways to 
govern and execute the functions across the agencies. The High-
Risk List is a very important look that they take across the 
Federal Government, and the work that DHS has done with GAO, 
not just in identifying those risks but looking at what 
corrective action plans and resources and sustained leadership 
commitment are necessary to start to address those. The 
Department has made tremendous progress in terms of working 
away at that list.
    There are still a number of significant challenges, but to 
me, what was impressive is the Department's leadership 
commitment to work through those, that they have resourced it, 
they have action plans to address it, and they are measuring 
progress against it to get to that sustained progress necessary 
to get off the list.
    I also think the continued engagement with GAO is 
absolutely essential to continue to work with that, and they 
are a very valuable resource to identify opportunities to 
improve.
    Senator Carper. Good. Sometimes I have heard the key to 
people being happy about the jobs that they do is that, first 
of all, they know that what they are doing is important, and 
the second key ingredient is that they feel like they are 
making progress. One of the ways to indicate and show people 
that we are making progress is actually through the GAO High-
Risk List and to involve your folks.
    You may want to take your new Deputy Secretary with you. 
Just take them and go meet with the folks at GAO. Do it on a 
regular basis, and they will be happy to help, and you will be 
glad you did.
    I will close with this: Colleagues, when Mr. Kerner was by 
to visit with me yesterday, we talked a bit about what I am 
just about to mention--I am almost done--and I reminded him 
that about 2,000 years ago, far away in the Middle East, a 
bunch of Pharisees confronted a young rabbi, and they said to 
him, ``What is the greatest commandment of all?'' And he said, 
``There is not one. There are actually two.'' And the second 
one was, ``Love thy neighbor as thyself,'' which we know as the 
Golden Rule: Treat other people the way we want to be treated.
    Very briefly, how might that apply in your job?
    Mr. Kerner. I think one of the most important parts is when 
you have a Federal workforce, you have to show that they are 
appreciated. You have to protect them. You have to safeguard 
them and make sure that when they blow the whistle, when they 
expose waste, fraud, abuse, and other violations, that they are 
going to do so safely, that we appreciate them for doing that, 
and that we are going to protect them to the best ability that 
we have.
    Senator Carper. Mr. Chairman, Ranking Member, to that I 
would say, ``Amen.''
    Chairman Johnson. Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Thank you, Mr. Chairman.
    Mr. Kerner, first of all, I have To tell you--and I know my 
colleague Kamala, who was here earlier, from California, would 
echo this--anybody who was a real prosecutor for almost 18 
years, it would be really hard for me ever not to be for you. I 
have particular sensitivity to the job you held for so long. 
You are the ones that--it is the local prosecutors, the State 
prosecutors, that handle 99 percent of the crime in this 
country, not U.S. Attorneys. They do not answer 911 calls. They 
get to pick and choose which crimes they go after. State 
prosecutors have to go after every crime that is committed, and 
so thank you for your years of service there.
    I think the most important thing I want to emphasize today 
is the independence of your office and the obligation you have 
to keep it independent. You spent many years as a local 
prosecutors, but you also have close ties to the Republican 
Party. I think it is important to point out that Carolyn 
Lerner, the previous Special Counsel, was the first Special 
Counsel to find sitting Cabinet Secretaries in violation of the 
Hatch Act. Both Julian Castro and Kathleen Sebelius were found 
in violation of the Hatch Act. That is an example of 
independence.
    How can you assure the current whistleblower community and 
the Members of this oversight Committee that you understand the 
independent role that you are stepping into, if you are 
confirmed?
    Mr. Kerner. Yes, thank you, Senator, and I appreciate the 
kind words about my background.
    For almost my entire career, I have not been really working 
in a partisan environment. When you said I am close to 
Republicans, I have worked for Republican office holders, but 
not on campaigns, not in the sort rough and tumble----
    Senator McCaskill. Right.
    Mr. Kerner. The prosecutor's office was obviously 
completely nonpartisan. When I was the Staff Director for 
Senator McCain on PSI, we had a tremendous relationship with 
Carl Levin, the Chairman. Throughout the 2 years, we joined 
many of the reports. We did a lot of hearings jointly. We had 
such a good relationship that at the end, when I got my picture 
with Senator McCain that he signed, I also got one from Senator 
Levin, just he and I, and he thanked me for all the hard work. 
I think I have shown that I am absolutely capable of working 
independently.
    As far as enforcement, and you mentioned the Hatch Act, I 
believe there are three pillars to the Hatch Act. Number one, 
you have to have clear guidelines and communicate those 
guidelines, make sure that people know what is required, make 
sure they know what the law is. The Hatch Act has some 
regulations that have not been updated in, apparently, 22 
years, and with the new media and all the new requirements, it 
is really important that people know what to do. Then you have 
to enforce it, nonpartisan, completely independent. Much like 
the prosecutor work I did, you go where the facts are, you go 
with what the law shows, and if people violate it and you have 
trained them, then you just hold them accountable.
    Senator McCaskill. In May, the Department of Health and 
Human Services (HHS) issued a memo to staff that any 
communication with Congress had to be cleared before it was 
made. Now, to me, this is in direct violation of the 
whistleblower laws, and I want to know what you are going to do 
to communicate to whistleblowers at HHS that the law does not 
allow HHS to gag them.
    Mr. Kerner. Absolutely. I understand that they have been 
called out on that, and I think there was a clarification 
issued. It was not as clear as a memo. It was more of an email 
that said, ``Of course, we are not imposing on your right.'' 
But I absolutely agree, whistleblowers must know that they 
cannot be chilled; their communications with Congress, with 
Inspectors General (IGs), with OSC are absolutely protected. 
The whistleblower law requires under Section 13 and 2302(b) to 
have language to that effect, and that language was missing. We 
would counsel and educate all the agencies, not just HHS, that 
they have to have the relevant language in order to comply with 
the law.
    Senator McCaskill. Will you ask HHS to rescind the memo 
with the required language? Because I believe that clarifying 
what the law is should be done in the same manner as the 
original directive. The fact that the latter--what they did was 
informal and through an email, will you direct them to, in 
fact, send out a memo correcting the previous memo and laying 
out the language that is required by law?
    Mr. Kerner. I will speak to them and tell them what is 
required by law, and we will have that conversation.
    Senator McCaskill. OK. Could you explain--in your policy 
questionnaire, you said there are serious flaws with the legal 
reasoning of the Department of Justice (DOJ) Office of Legal 
Counsel opinion that Executive Branches can ignore the Ranking 
Member of the main Senate oversight committee. As Senator 
Grassley said, I think he put it as eloquently as you possibly 
can, if you are from my part of the world. He called it 
``nonsense.''
    Could you explain what flaws you find in the OLC's legal 
opinion that they issued?
    Mr. Kerner. Yes. I believe in the policy questionnaire my 
reference was to Senator Grassley, who had criticized it, and I 
pointed out that there were issues with it.
    I think the biggest problem is that the Privacy Act does 
not talk about Chairmen, so it does not actually have that 
language. Instead, what it talks about is giving it to 
committees, and Ranking Members are as much a part of the 
committee as the Chairman is. You are both doing oversight. You 
both require information. And OSC I think has actually a long 
history of complying with providing information to both sides.
    Senator Heitkamp asked Ms. Grady and me as well whether we 
would make information available to both sides, and we both 
committed to that.
    Senator McCaskill. Thank you. Thank you very much.
    First of all, I like your name. In the old days there were 
not many of us. Now there are lots of Claires. I was the only 
Claire growing up, and now there are Claires everywhere.
    I would ask you, based on your role in management at DHS, 
are there any circumstances in which you would support a 
project that went ahead that would spend tens upon millions, 
hundreds of millions dollars, potentially, without a cost-
benefit analysis?
    Ms. Grady. I believe cost-benefit analyses are essential 
for major acquisitions. You need to look at the range of 
alternatives in terms of how to achieve the outcomes. So look 
at measures of effectiveness and cost of investment before you 
make any commitment to a major investment decision.
    Senator McCaskill. Do you believe there should be a cost-
benefit analysis done of a wall built for 2,000 miles along the 
Southern Border?
    Ms. Grady. I believe that there is an analysis that will be 
conducted or is being conducted, but I am not familiar with the 
details of that.
    Senator McCaskill. Well, I would depend on you as the 
management person there to exercise the kind of authority that 
you should have to make sure that there is a cost-benefit 
analysis being done on the proposal for a 2,000-mile wall, sea-
to-shining-sea wall, which the Secretary has said is not going 
to happen. Pretty much everybody acknowledges it is not going 
to happen except the President. If you would make sure a cost-
benefit analysis is done, I think that would go a long way to 
explain to the American public why there are other, more 
effective ways to utilize our resources to make sure we secure 
the border.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Hassan.

              OPENING STATEMENT OF SENATOR HASSAN

    Senator Hassan. Thank you very much, and good morning to 
you both. It is nice to see you. And thank you, Mr. Chairman 
and Ranking Member McCaskill, for the opportunity.
    Ms. Grady, it was very nice meeting with you--I think it 
was a couple of weeks ago--and I thank you for the time you 
took to do that.
    Last month, I introduced with Senator Portman the Hack DHS 
Act, which calls upon the Department of Homeland Security to 
establish a pilot program that would allow ethical and vetted 
hackers to probe DHS' network and public-facing website for 
potential cyber vulnerabilities. In exchange for this service, 
DHS would pay these ethical hackers a small monetary sum for 
each previously undiscovered vulnerability that he or she 
identifies for DHS. This effort was modeled on programs used by 
industry and specifically the Department of Defense's bug 
bounty program known as ``Hack the Pentagon.''
    If I recall from our meeting in my office, you were quite 
familiar with this Pentagon program. If you are confirmed and 
our bill becomes law, your office at DHS would likely be 
responsible for implementing the program. What are your 
thoughts on establishing a bug bounty pilot program at DHS?
    Ms. Grady. I think it is a very valuable tool that industry 
has found tremendous benefit for a relatively small return in 
terms of what is actually paid out for the bug bounties. I 
think the Department of Homeland Security can take advantage of 
the lessons learned from the Department of Defense, who did 
both Hack the Pentagon, Hack the Army, and Hack the Air Force. 
And a key element associated with that is working very closely 
not just from a procurement perspective but with the Chief 
Information Officers (CIOs) to ensure that it is conducted in 
an effective way and that we are prepared to respond to the 
findings that will result from a bug bounty.
    Senator Hassan. Thank you. Two weeks ago, we had a hearing 
in this Committee on the ideology of Islamic State of Iraq and 
Syria (ISIS) and al-Qaeda. One of the witnesses was the former 
Director of the National Counterterrorism Center (NCTC), Mike 
Leiter. Mr. Leiter, who is a veteran of both Republican and 
Democratic Administrations and an expert on stopping terrorism, 
repeatedly called out the work performed by the DHS Office for 
Community Partnerships and its Director, George Selim, as the 
only office in the government that focuses on trying to prevent 
ISIS and al-Qaeda from recruiting Americans into their ranks. 
Despite this, the President's budget eliminates the grant 
funding that Director Selim's office uses to try to prevent 
these homegrown attacks.
    What is your position on our government's role in 
preventing homegrown terrorist attacks? Do you support cutting 
off funding to the only office in the government that is 
dedicated to preventing young Americans from falling prey to 
these terrorist groups' recruitment propaganda?
    Ms. Grady. I believe our government's role and 
responsibility is to prevent threats, regardless of source, 
against our homeland and our homeland security. I am not 
familiar with the particular grant program that you referenced. 
I would need to look into that and study it and get back to you 
on the status and the future of that program.
    Senator Hassan. I thank you for that. I would encourage you 
to do that. Among other things, they found a real hunger for 
these grant dollars from local and State partners who were 
really trying to get at this recruitment issue and trying to 
prevent our young people from being recruited. I look forward 
to further conversations with you about that.
    To Mr. Kerner, I want to thank you for being here as well, 
and thank you for all your work as a public servant for many 
years. I know that you worked as a prosecutor for almost 20 
years, and that is really difficult work, and important, and I 
thank you.
    After that, you came to D.C. and worked under different 
circumstances, this time as a political staff member. As you 
know, that is more of a partisan role. While the investigative 
committees in Congress have a strong tradition of 
bipartisanship, I still think it is safe to say that being a 
committee staffer is more of a partisan job than being a 
prosecutor is.
    But the job you are nominated for now requires a truly 
strictly independent, nonpartisan approach, so I would like to 
just hear from you how you plan to transition from that more 
partisan work to this nonpartisan role and whether you agree 
that you will need to be independent of politics at the Office 
of Special Counsel.
    Mr. Kerner. Thank you, Senator, and thank you for the kind 
comments about my background. I appreciate that.
    I spent most of my time in a nonpartisan role. I was a 
prosecutor, and there is no politics at all. Then when I 
transitioned to the Hill, while it is true that I worked for 
Republican members, I was not in a campaign. I was not working 
out there campaigning for or against candidates. I was in an 
oversight role. When I was the Staff Director for Senator 
McCain on PSI especially, we were in a particularly bipartisan 
role. We worked very closely with our Chairman, who was Senator 
Carl Levin. We signed on and joined a number of joint staff 
reports. We had joint hearings. We worked so closely together 
that at the end of the tenure, I received pictures from both 
Senators separately, thanking me for the hard work.
    I realize and I recognize the fact that OSC is a 
nonpartisan office. It is supposed to safeguard the merit 
system. It is supposed to safeguard all Federal employees and 
have credibility with them, and I intend to be completely 
independent in that job.
    Senator Hassan. Thank you very much. And, again, thank you 
both for being here.
    I yield the remainder of my time, Mr. Chairman.
    Chairman Johnson. Senator Daines.

              OPENING STATEMENT OF SENATOR DAINES

    Senator Daines. Thank you, Mr. Chairman, Ranking Member 
McCaskill.
    Ms. Grady, Mr. Kerner, thank you both for your testimony 
and your willingness to serve. The positions you have been 
nominated for are critical to accountability. Without good 
people in these roles, the Federal Government is more 
susceptible to wasting taxpayer dollars and more susceptible to 
internal, unethical, corrupt, or illegal activities.
    I want to start with Ms. Grady. DHS spends over $7 billion 
annually on acquisition programs. According to a recent GAO 
report, last year's DHS acquisitions averaged a 6-month delay 
and cost overruns of nearly $1 billion. This is unacceptable to 
those on the front line keeping us safe as well as to the 
American people.
    I very much appreciated in your testimony your commitment 
to maximizing the value of every dollar entrusted to DHS. This 
is one issue largely devoid of politics, and we have, I think, 
some bipartisan solutions. Senator McCaskill and I have been 
working closely to develop legislation that would codify best 
practices, increase transparency, accountability, and, 
importantly, improve technology delivery to the front line.
    I have had a short career in politics but a long career in 
the private sector, including technology, and I like talking 
about accountability and quicker deployments, meeting schedules 
at or below cost.
    Ms. Grady, you currently serve on the Defense Acquisition 
Review Board. One of the bills I authored would codify an 
Acquisition Review Board within DHS ensuring uniformity and 
synergy across Department component acquisitions.
    Would you please expand on your experience on the DOD 
Review Board and how you would utilize and take this expertise 
to DHS?
    Ms. Grady. Certainly. I had the benefit of being part of 
the DHS Acquisition Review Board as well as the Defense 
Acquisition Board, so I have had the opportunity to see both 
systems at play. From a DOD perspective, the one lesson that I 
took away was one size does not fit all and that you really 
need to tailor both documentation and oversight appropriate to 
the investment, and there needs to be metrics and data and 
accountability associated with delivering results. That is 
definitely what I would take back to DHS from my experience on 
the Defense Acquisition Board.
    Senator Daines. One of the concerns, I think, for many of 
us who observe and work within the bureaucracies in the Federal 
Government is the duplicity that can occur when some of these 
departments who sit under the same header in terms of an agency 
might as well be working in separate countries, it seems, even 
though they may be a few feet apart in the same building.
    Would you also elaborate how DHS's acquisition is different 
than DOD's as well as ideas you might have to improve the 
overall efficacy of the DHS process?
    Ms. Grady. Certainly. I think one of the big differences 
between DHS and DOD is the requirements process. DOD has the 
joint staff. They can staff and validate requirements that 
cover across the Department. DHS has stood up a Joint 
Requirements Council, which I think is a tremendous step, 
because acquisitions live and die by getting the requirements 
right. By getting the requirements right, I mean meeting the 
needs and the mission gaps of the end users who are actually on 
the front line. So making that connection of the individuals 
who are going to utilize the capability or capacity that needs 
to be delivered to keep our homeland safe. I believe the Joint 
Requirements Council is a great step that DHS has taken to 
strengthen that requirements process. That has been a big 
focus, and I think that is really important in terms of 
delivering value through acquisition as well as unity of 
effort.
    Senator Daines. Thank you, Ms. Grady.
    Mr. Kerner, I want to shift gears and talk about VA 
accountability. One hurdle that we have seen to providing 
veterans the medical services that they deserve at the VA has 
been a fear of whistleblowing. This has stifled accountability, 
stifled internal reforms necessary to better serve those who 
served us. I am the son of a Marine. In your testimony, you 
touched on legislation that I cosponsored to strengthen the 
whistleblower protections.
    My question is this: As Special Counsel, how will you not 
only protect whistleblowers but get the facts to substantiate 
accusations and foster an environment where people feel safe to 
speak out against misconduct at the VA?
    Mr. Kerner. Yes, thank you, Senator. I think one of the 
important things--and, obviously, OSC has had a lot of VA 
cases. I think out of the 6,000 or so cases they had recently, 
about 35 to 40 percent are VA cases. So OSC has done a 
tremendous job of working with whistleblowers to get them 
reinstated, to counter that culture.
    But to the extent that culture still exists, the most 
important thing is you have to get accountability, and OSC is 
partly an investigative agency, but it also has a prosecutorial 
component. By utilizing prosecutorial tools and going in front 
of the board and holding managers who punish people for 
whistleblowing, holding managers accountable for their actions 
through discipline, I think you send a message that 
whistleblowers will be protected; people who bring protected 
disclosures forward will not be retaliated against. If you 
obtain this kind of accountability and discipline against 
managers, I think it is going to serve us well with all other 
whistleblowers as well.
    Senator Daines. I was struck by Secretary Kelly when he 
went through the confirmation process, one of the phrases that 
he used was ``the importance of speaking truth to power.'' I am 
grateful that we have a four-star Marine on top of the DHS 
organization. I think he is an outstanding Secretary.
    Mr. Kerner, the thoughts you had there, how can we scale 
this up and approve this accountability across the entire 
Federal Government? We talk about draining the swamp. This is 
about as swamp-like as it gets at times. There is change we 
need to make fundamentally within the Federal Government. How 
would we expand this?
    Mr. Kerner. I think it is important to set the tone and to 
let the entire Federal workforce know that we are behind them, 
we stand behind them. Congress is going to give us the tools--
and by ``us,'' I mean OSC, should I be confirmed. But it will 
give OSC the tools to protect whistleblowers, to make sure that 
whistleblowers have a safe place to go to make their 
disclosures where two things will happen:
    One, they will get the results. Back when I was the 
investigator on Fast and Furious, gunwalking, which was a crazy 
practice of essentially allowing high-grade weapons to go to 
Mexican drug cartels, we stopped that. Once the light was 
shined on it, that was going to stop.
    The second thing is the whistleblowers will be protected. 
And one of the things I am most proud of is that many of the 
Fast and Furious whistleblowers were, in fact, not punished. 
The leadership was. They were held accountable. But the people 
who blew the whistle are now in that leadership.
    Senator Daines. Well, that is the desired outcome--right?--
that you just described there. Thank you. Thank you both for 
your testimony, your thoughtful answers, your passion for the 
role. Very important.
    Chairman Johnson, thank you for holding this hearing, and I 
respectfully urge--I have some bipartisan acquisition reform 
bills--that we may consider those at the next markup.
    Chairman Johnson. OK. Thank you, Senator Daines.
    Mr. Kerner, as long as you were talking about Fast and 
Furious, I know it is somewhat off subject, but I just met with 
a delegation of Mexican senators yesterday, and that was their 
primary complaint. We have the drugs flowing in because of our 
insatiable demand for drugs. We have held multiple hearings on 
the lack of our border security. I certainly pointed that out 
as one of if not the root cause of our unsecured borders, our 
insatiable demand for drugs. And, they talked about, on the 
flip side of that, all that money flowing into Mexico is then 
used to purchase weapons coming out of America.
    Because you were so involved in Fast and Furious, what kind 
of information do you have in terms of the reality of the arms 
flow in Mexico? I have not really talked to our staff. I think 
this would be a good topic for a hearing in the future.
    Mr. Kerner. Absolutely, Mr. Chairman. So in Fast and 
Furious, of course, we talk about 2,000-plus AK-47 type guns, 
or AR-15s, going there because the Federal Government wanted 
them to go there.
    Chairman Johnson. Again, that was a Federal Government 
operation. What about the entire illegal flow? That was an 
attempt to really target the kingpins there. Do you have 
knowledge of the total illegal flow?
    Mr. Kerner. Yes. When we were looking at Fast and Furious, 
a lot of the times people would bring up the fact that they are 
legal. They call that, I think, ``the iron river.'' A lot of 
the guns are going there.
    I think that goes really more toward DOJ. They are going to 
have to do interdictions. One of the efforts that was attempted 
was to stop straw buyers, that that was where you stop it. You 
get people who go in and purchase guns for others. You follow 
them, and when they turn them over, you arrest the people 
higher up. That is obviously a law enforcement solution.
    There are various other solutions in terms of--the Bureau 
of Alcohol, Tobacco, Firearms and Explosives (ATF) obviously 
does also registration or do they give licenses to federally 
licensed firearms dealers. One of the things is close 
cooperation with them to make sure that the guns go to legal 
American citizens who are buying the guns for their purposes, 
legal purposes, and not to be trafficked.
    Chairman Johnson. OK. Before I start questioning Ms. Grady, 
I just want to again reinforce that this Committee will hold 
the Administration accountable. From my standpoint, the best 
way to deter wrongdoing or any kind of corruption is to let 
people realize we will hold them accountable. I think that is 
the strongest message certainly you can send in your new 
capacity, that there will be no partisanship here when it comes 
to enforcing the law and enforcing ethical standards.
    Ms. Grady, you spoke about your strong support for St. 
Elizabeths, and certainly as somebody who has managed 
operations, I can certainly understand that as well. I do not 
expect you to be up to speed in terms of all the specifics, but 
you have been so involved in appropriations and the procurement 
policies both in DHS and DOD, such a massive undertaking. I do 
not have a real strong understanding. What have been the 
impediments? What are we going to need to do to complete it? 
Can you just in general kind of describe your current 
understanding of that and what we need to move forward?
    Ms. Grady. My understanding is somewhat dated and primarily 
shaped by the fact that I was part of the Coast Guard that 
moved over to St. Elizabeths. There were challenges associated 
with consistent funding not just for the buildings themselves 
but for the infrastructure to accommodate the additional 
traffic flow into the area. The desire was not to disrupt the 
community but make sure that that happened.
    There are also additional challenges in that it is a 
historic property, so it is hard enough to do renovations on a 
building that is in good repair let alone the restrictions that 
are associated with a historic property. Those are challenges 
that I believe the Department has encountered as well as 
consistent funding streams.
    Chairman Johnson. So just a few bullet points: You have not 
had a consistent funding stream. Anytime you start doing 
construction in the neighborhood, that creates local, I guess, 
zoning issues or whatever. And then the historic nature of the 
buildings has also been a real impediment.
    Ms. Grady. The reference I was making to the local 
infrastructure is actually off ramps from the major highways so 
that you are not putting a large amount of traffic through 
neighborhoods.
    Chairman Johnson. OK. We held a hearing from the front 
lines, and we had union representatives from the primary people 
charged with enforcing immigration laws and securing our 
border. I think one of the highlights of that hearing was 
really understanding the lack of pay parity, employment policy 
parity, and the concern of some of the agencies, probably in 
the lower scale in terms of benefits and pay and policies, 
afraid that they are just going to lose their workforce to the 
other agencies that are doing the hiring.
    We have tried to, in, I think, a very bipartisan fashion, 
work with Elaine Duke and the Department to try and find out 
exactly what those issues are and give the support to the 
Department to fix that. Can you talk a little bit about that? 
Do you know what I am talking about? Can you give us certainly 
from your standpoint how you would be involved in coming to a 
rapid conclusion of creating parity or more parity?
    Ms. Grady. I am generally aware of the issue but have not 
been involved in specific discussions relative to the ongoing 
Department's efforts. I understand that the Deputy Secretary is 
leading efforts and is working closely with the Chief of Human 
Capital to look at harmonizing the pay and benefits across the 
Department to ensure that if there are differing pay scales or 
differing treatment, that those are commensurate with highly 
sought after skills, retention, that they are addressing a 
specific challenge and they are looking across the Department. 
But I am not aware of specific actions that they are taking in 
response to that.
    Chairman Johnson. OK. My final question just is a pretty 
simple one. As you are entering this new position, what will be 
your top priority? I will start with you, Mr. Kerner.
    Mr. Kerner. The top priority will be to make sure that the 
employees at OSC know that I believe in their mission, that I 
believe in what they are doing, and that it is our job to 
protect all the Federal employees and that we are going to do 
so independently, we are going to do so fairly, and we are 
going to do so aggressively. We are going to protect the 
workforce to the best of our ability.
    Chairman Johnson. That sounds pretty good. Ms. Grady.
    Ms. Grady. My top priority would also be workforce. DHS has 
tremendous folks who are doing amazing things every day, so 
ensuring that they understand just how valued their 
contributions are within and external to the Department, and 
reinforce the importance of the mission and that they realize 
that every single one of them is contributing to our Nation's 
safety every day.
    Chairman Johnson. OK. Let me just say what I have seen of 
Secretary Kelly being just an exceptional leader and the effect 
that has had on the workforce is really pretty amazing, quite 
honestly. I am glad to hear both of you list it as a top 
priority, particularly in an agency that has had problems with 
morale and that type of thing. It is good that you are going to 
be focusing on that.
    I truly appreciate your willingness to serve. The 
confirmation process is not particularly fun. The fact that you 
are willing to subject yourself to it, I appreciate. I 
appreciate your families' willingness to do that. I certainly 
want to thank your husband, Ms. Grady, for his service to this 
Nation, and both your families for the fact that they are 
probably going to be seeing both of you a little bit less, 
maybe a lot less. But the fact that you are patriots and you 
are willing to serve your Nation in this capacity in such 
important roles, this Committee truly appreciates.
    With that, the nominees have made financial disclosures and 
provided responses to biographical and prehearing questions 
submitted by the Committee.\1\ Without objection, this 
information will be made part of the hearing record with the 
exception of the financial data,\2\ which are on file and 
available for public inspection in the Committee offices.
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    \1\ The information of Ms. Grady appears in the Appendix on page 
31.
    \2\ The information of Mr. Kerner appears in the Appendix on page 
89.
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    Chairman Johnson. This hearing record will remain open 
until noon tomorrow, June 29th, for the submission of 
statements and questions for the record.
    Chairman Johnson. This hearing is adjourned.
    [Whereupon, at 11:04 a.m., the Committee was adjourned.]

                            A P P E N D I X

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