[Senate Hearing 115-602]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-602

                          NOMINATION HEARING:
                     GLEN SMITH, TO BE A MEMBER OF
                 THE FARM CREDIT ADMINISTRATION BOARD,
                         FARM CREDIT UNION, AND
                     STEPHEN ALEXANDER VADEN, TO BE
                           GENERAL COUNSEL OF
                     THE DEPARTMENT OF AGRICULTURE

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

                                HEARING

                               BEFORE THE

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION


                               __________

                            NOVEMBER 9, 2017

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry
           
           

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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                     PAT ROBERTS, Kansas, Chairman

THAD COCHRAN, Mississippi            DEBBIE STABENOW, Michigan
MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
JOHN BOOZMAN, Arkansas               SHERROD BROWN, Ohio
JOHN HOEVEN, North Dakota            AMY KLOBUCHAR, Minnesota
JONI ERNST, Iowa                     MICHAEL BENNET, Colorado
CHARLES GRASSLEY, Iowa               KIRSTEN GILLIBRAND, New York
JOHN THUNE, South Dakota             JOE DONNELLY, Indiana
STEVE DAINES, Montana                HEIDI HEITKAMP, North Dakota
DAVID PERDUE, Georgia                ROBERT P. CASEY, Jr., Pennsylvania
LUTHER STRANGE, Alabama              CHRIS VAN HOLLEN, Maryland

             James A. Glueck, Jr., Majority Staff Director

                DaNita M. Murray, Majority Chief Counsel

                    Jessica L. Williams, Chief Clerk

               Joseph A. Shultz, Minority Staff Director

               Mary Beth Schultz, Minority Chief Counsel

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing(s):

Nomination Hearing: Glen Smith, to be a Member of the Farm Credit 
  Administration Board, Farm Credit Union, and Stephen Alexander 
  Vaden, to be General Counsel of the Department of Agriculture..     1

                              ----------                              

                       Thursday, November 9, 2017
                    STATEMENTS PRESENTED BY SENATORS

Boozman, Hon. John, U.S. Senator from the State of Arkansas......     1
Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     2
Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee..     5
Corker, Hon. Bob, U.S. Senator from the State of Tennessee.......     6

                               Witnesses

Smith, Glen R., of Iowa, to be a Member of the Farm Credit 
  Administration Board, Farm Credit Association..................     7
Vaden, Stephen Alexander, of Tennessee, to be General Counsel of 
  the Department of Agriculture..................................     8
                              ----------                              

                                APPENDIX

Prepared Statements:
    Smith, Glen R................................................    24
    Vaden, Stephen Alexander.....................................    26
Document(s) Submitted for the Record:
    5-day letter, Committee questionnaire and Office of 
      Government Ethics Executive Branch Personnel Public 
      Financial Disclosure Report filed by Glen R. Smith......... 30-54
    5-day letter, Committee questionnaire and Office of 
      Government Ethics Executive Branch Personnel Public 
      Financial Disclosure Report filed by Stephen Alexander 
      Vaden...................................................... 55-95
Question and Answer:
Smith, Glen R.
    Written response to questions from Hon. Pat Roberts..........    98
    Written response to questions from Hon. Debbie Stabenow......    99
    Written response to questions from Hon. Amy Klobuchar........   102
Vaden, Stephen Alexander:
    Written response to questions from Hon. Pat Roberts..........   104
    Written response to questions from Hon. Debbie Stabenow......   106
    Written response to questions from Hon. Patrick J. Leahy.....   122
    Written response to questions from Hon. Sherrod Brown........   125
    Written response to questions from Hon. Michael Bennet.......   129
    Written response to questions from Hon. Chris Van Hollen.....   130


 
                          NOMINATION HEARING:
                     GLEN SMITH, TO BE A MEMBER OF
                 THE FARM CREDIT ADMINISTRATION BOARD,
                         FARM CREDIT UNION, AND
                     STEPHEN ALEXANDER VADEN, TO BE
                          GENERAL COUNSEL OF
                     THE DEPARTMENT OF AGRICULTURE

                              ----------                              


                       Thursday, November 9, 2017

                              United States Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Washington, DC
    The Committee met, pursuant to notice, at 9:33 a.m., in 
Room 328A, Russell Senate Office Building, Senator John 
Boozman, presiding.
    Present or submitting a statement: Senators Boozman, 
Hoeven, Ernst, Grassley, Thune, Daines, Perdue, Stabenow, 
Brown, Klobuchar, Bennet, Gillibrand, Donnelly, Heitkamp, 
Casey, and Van Hollen.

STATEMENT OF HON. JOHN BOOZMAN, U.S. SENATOR FROM THE STATE OF 
                            ARKANSAS

    Senator Boozman. I call this hearing of the Senate 
Agriculture, Nutrition, and Forestry Committee to order. 
Chairman Roberts has had a--just a routine outpatient procedure 
and as a result of that I am chairing today and offering a 
statement that I am about to present in his stead. He will 
return to the Senate on Monday.
    We are here today to review the nominations of the 
individuals before us today, Glen Smith, to be a Board member 
of the Farm Credit Administration, and Mr. Stephen Vaden for 
the position of General Counsel of the Department of 
Agriculture.
    For the last few months, this Committee has been reviewing 
and approving nominations for the agencies under its 
jurisdiction in order to help provide them with political 
leadership. It is crucial to have decision-makers tending to 
the important mission areas at the Department of Agriculture, 
the CFTC, and the Farm Credit Administration.
    Today we have an opportunity to review the nominations of 
two distinguished individuals, one to head USDA's Office of 
General Counsel, and the other to serve on the Farm Credit 
Administration Board, which is tasked with ensuring the safety 
and soundness of financial institutions comprising the Farm 
Credit System. Legal and financial issues are not only touching 
our stakeholders every day, but the people who benefit from the 
hard work of our farmers and ranchers, the consumers.
    We have talked about the challenging times farmers, 
ranchers, and their families are facing in rural America. Those 
challenges come not only from what Mother Nature throws at them 
but the regulations, the rules, and costly burdens placed upon 
the agriculture and forestry sector, including numerous and 
sometimes frivolous lawsuits. The FCA Board will also be faced 
with potential decisions regarding regulatory tools meant to 
enable the lending system to responsibly support producers 
during times such as these.
    During these uncertain times, we need these nominees to 
prioritize farmers and ranchers as they review legal questions 
or the ins and outs of how our Farm Credit System is 
functioning. We have two very qualified nominees before us 
today, and I am happy that the Committee has the opportunity to 
examine their credentials and experience as we endeavor to get 
them working in their new roles as soon as possible.
    Our first witness today is Mr. Glen Smith, who was 
nominated to serve as a member of the Farm Credit 
Administration. As noted, Mr. Smith is a native of Atlantic, 
Iowa, and a graduate of Iowa State University. He is President 
and Co-Owner of Smith Land Service, a company which specializes 
in farm management, land appraisal, and farm and brokerage 
services. Mr. Smith also owns and serves as President of Smith 
Generation Farms, Inc., a family farm operation that 
encompasses about 2,000 acres in western Iowa.
    Our next witness, Mr. Stephen Vaden, the President's 
nominee to serve as the Department of Agriculture's General 
Counsel, has a B.A. from Vanderbilt University and a J.D. from 
Yale Law School. He served as law clerk for Julia Smith Gibbons 
of the United States Court of Appeals for the Sixth Circuit, 
and for Samuel H. Mays, Jr., of the United States District 
Court for the Western District of Tennessee.
    Prior to his experience at USDA, he has practiced law at 
the law firms of Patton Boggs and Jones Day, where he gained 
significant experience in government regulations law, 
litigation, administrative law, and appellate work. He is 
licensed to practice law in Tennessee and the District of 
Columbia. Stephen has been serving in the Office of General 
Counsel in various way, acting in that capacity for the last 
few months.
    It is the Chairman's hope that the Committee consider and 
approve your nominations as quickly as possible so we can send 
them to the full Senate for consideration.
    I look forward to your testimony and I now turn to my 
colleague, Senator Stabenow, for opening remarks.

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE 
                          OF MICHIGAN

    Senator Stabenow. Well, thank you very much, Mister Acting 
Chairman, and it is always great to work with you. We worked 
together on forestry and paper issues, along with other issues 
that relate to the Agriculture Committee, and I know that 
Senator Roberts will be back in full form next week, so we are 
looking forward to that.
    I am pleased to be here today to consider the final two 
nominees that we currently have pending before our Committee, 
and welcome to our two distinguished colleagues, who I know are 
going to be involved in introductions as well.
    Mr. Vaden and Mr. Smith, congratulations to you and welcome 
to your families today. We are glad to have them here as well.
    Considering presidential nominations is a key 
responsibility of the Senate and one that this Committee takes 
very seriously. This Committee has worked hard to move nine 
USDA and CFTC nominees this year in an efficient and bipartisan 
manner. I am glad to see two more nominees before us today.
    Mr. Vaden, being the top lawyer at one of the largest 
Federal departments is a very important job. If confirmed as 
General Counsel, your work will touch every corner of the USDA, 
from advising the Secretary to enforcing civil rights and 
workplace protections for nearly 100,000 employees across the 
department. You will oversee the implementation of rules that 
protect our farmers and our families. Additionally, it will be 
up to you to ensure that USDA's own rulemaking is fair and 
transparent.
    Mr. Vaden, you have been a senior leader at the USDA since 
Inauguration Day. Today I look forward to learning more about 
the role that you have played in the last 10 months. I also 
have a few questions about your previous work as an associate 
at a law firm, handling voting access cases, which I hope you 
can address today. Overall, I am interested in hearing about 
your experience, qualifications, and vision for this very 
important position.
    Mr. Smith, while we have considered several USDA nominees 
this Congress, you are the first nominee before us for the Farm 
Credit Administration. Throughout this year I have underscored 
the importance of having qualified, dedicated leaders to serve 
our farmers and ranchers across the government and the Farm 
Credit Administration is no exception.
    The Farm Credit System ensures that rural communities and 
agricultural producers of all types and sizes have reliable 
access to credit. This is especially pressing given the recent 
slowdown in the farm economy and devastating natural disasters, 
as you and I have had a chance to talk about.
    We also know that new and beginning farmers face unique 
challenges in accessing capital as they look to start a career 
on the farm. In my home state of Michigan, Greenstone Farm 
Credit provides more than $6 billion in loans to producers, 
including more than 17,000 small, new, or beginning farmers, 
including our veterans. Now more than ever, it is critical that 
our farmers and rural communities have a dependable source of 
credit they can count on.
    I am very proud of how this Committee has worked together 
to consider qualified leaders as quickly as possible. These 
gentlemen are the last nominees pending before our Committee. 
In order for us to continue to fill vacant leadership 
positions, we need the administration to nominate qualified 
candidates to come before us. As of now, we are still waiting 
to receive nominees for almost half of the Senate-confirmed 
positions at the USDA. I urge the Trump Administration to 
nominate experienced and qualified people for these roles as 
soon as possible, so we can ensure the department is running at 
100 percent. Our farmers and ranchers in rural communities 
deserve no less, and I look forward to working with all the 
members in the Committee to make sure that happens.
    Thank you.
    Chairman Boozman. Thank you, Senator. As is our tradition 
at the Agriculture Committee, we like to recognize the family 
and the friends of the nominees who have gathered today. Please 
stand to be recognized.
    Very good.
    [Applause.]
    Senator Boozman. We do appreciate you being here. These 
things are certainly family affairs.
    It is also a privilege to welcome two distinguished members 
of the Tennessee delegation to the Committee, Senator Alexander 
and Representative David Kustoff, and Senator Corker. They are 
here to support their friend and colleague, Stephen Vaden. 
Thank you all for joining us at this important hearing.
    I now turn to Senator Ernst to introduce our first nominee, 
Glen Smith from Iowa.
    Senator Ernst. Thank you, Mr. Chair. It is my pleasure 
today to introduce Glen Smith. Glen Smith is President of Smith 
Land Service, a company he founded in 1982. The company 
specializes in farm management, land appraisal, and farmland 
brokerage services, working in about 30 of Iowa's counties. 
Glen also owns and serves as President of Smith Generation 
Farms, Inc., a family farm operation that encompasses about 
2,000 acres of corn and soybeans in western Iowa.
    Glen was raised on a diversified crop and livestock farm 
near Atlantic, Iowa, which is just down the road from my home 
in Red Oak, so thank you very much, Glen. When he graduated 
from Iowa State University, which is also my alma mater, in 
1979, with a B.S. in agricultural business, he went to work for 
Doane Agricultural Services as state manager of their real 
estate division.
    Glen and his wife Fauzan have four grown children and three 
grandchildren. Welcome to the Committee, Glen. We are glad to 
have you here, and welcome to your family as well. Thank you 
very much.
    Senator Boozman. Senator Grassley.
    Senator Grassley. I associate myself with the remarks of 
Senator Ernst and also add that there are good people coming 
out of Atlantic besides Mr. Smith. I had a press secretary of 
15 years, Beth Pellet, and Nancy Pellet, her mother, had a 
position similar to Mr.--or the same as Mr. Smith's a few years 
ago in a previous Republican administration.
    So I said I associate myself with the comments that are 
made by my colleague. I have known Glen for several years and 
know that he would do an outstanding job for farmers and 
ranchers at the Farm Credit Administration. He has worked in 
agriculture industry his whole career and will bring his 
Atlantic, Iowa, common sense and leadership to this Board. I 
look forward to working with him when he is confirmed, and we 
welcome you to the Committee, and I am going to be very rude 
because I have got to chair the Judiciary Committee in 12 
minutes, so I will be leaving.
    Senator Boozman. Thank you, Senator Grassley.
    Senator Alexander, it is an honor to have you with us 
today. Thank you for taking the time to introduce Mr. Vaden.

STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM THE STATE 
                          OF TENNESSEE

    Senator Alexander. Thank you, Mr. Chairman, and thanks for 
allowing me to come. First, I want to thank the Committee for 
supporting the Tennessee Wilderness Act this morning. Senator 
Corker and I have introduced that in five separate Congresses. 
This is the fifth one. I see Senator Stabenow smiling. She has 
helped us with that before. The legislation would preserve 
20,000 acres of Cherokee National Forest as wilderness. We hear 
about it from many, many Tennesseans.
    I wish to submit a statement on this legislation for the 
Committee record and express my hope that the Congress can 
enact on it while Senator Corker is still a member of the 
United State Senate, which means this year.
    Senator Alexander. Second, attending these always reminds 
me of the time, several years ago, when I came before a 
confirmation hearing and the Senator from Ohio's turn came and 
he looked at me and said, ``Governor Alexander, I have heard 
some very disturbing things about you, but I do not think I 
will bring them up now.'' Senator Kassebaum from Kansas looked 
over and said, ``Well, Howard, I think you just did.''
    I do not think any of that will happen to the two of you 
today because of your distinguished records, and I know the 
members of the Committee well.
    I am here to introduce Stephen Vaden. I am proud to do 
that. You mentioned his background, Mr. Chairman, so I will not 
go into extensive detail. He grew up on a family farm in Union 
City, Tennessee. His father was a farmer so he has hands-on 
experience for this job. He attended Vanderbilt University and 
Yale Law School, so he has some academic credentials for the 
job of legal counsel, which are strong. He has had two strong 
mentors, Julia Gibbons, a Sixth Circuit Court of Appeals member 
who was once my counsel when I was governor of Tennessee, and 
Hardy Mays of U.S. District Court for the Western District of 
Tennessee, and he has practiced law with two distinguished 
firms in Washington.
    So based on his hands-on experience, his strong academic 
credentials, his mentorships, his practice of law, and the time 
he has had here the last few months, he is very well qualified. 
Also, he is strongly supported by his Congressman, David 
Kustoff of West Tennessee, who is here today, and we are 
delighted to have him. The Tennessee Farm Bureau President says 
that Stephen ``has a passion for agriculture that cannot be 
taught but that is necessary in the role of General Counsel.''
    Congressman Kustoff said this year, ``I have had the 
pleasure of working with Stephen. I cannot think of anyone 
better equipped to champion our agriculture industries in West 
Tennessee and across the country.'' Secretary Perdue said, 
``Stephen has a firm grasp of the legal issues facing American 
agriculture and, more importantly, understands the breadth and 
complexity of the regulatory burden placed upon our 
producers.'' He finished by saying, ``Farmers, ranchers, 
foresters, and producers will be well served by his counsel.''
    So I am delighted to strongly recommend Stephen to this 
Committee. I urge the Committee members to support his 
nomination. I hope he can be quickly considered by the full 
Senate.
    Thank you for your time.
    Senator Boozman. Thank you, Senator Alexander, and thank 
you, Congressman Kustoff, for being here to show your support. 
We are also honored to have Senator Corker here.

 STATEMENT OF HON. BOB CORKER, U.S. SENATOR FROM THE STATE OF 
                           TENNESSEE

    Senator Corker. Mr. Chairman and Ranking Member Stabenow, 
thank you so much for letting me be here with Lamar, my good 
friend, and David Kustoff, my friend, to support this 
outstanding nominee. I want to also thank you for considering 
the Wilderness Bill this morning. It is something that I think 
matters greatly to our country, and we thank you for that.
    I want to also thank you. I have never been before the Ag 
Committee. I have been here 10 years and 10 months, and so my 
Senate bucket list is now narrowing, so thank you so much.
    [Laughter.]
    Senator Boozman. We are going to have you back.
    Senator Corker. Yes, thanks. I am pleased to be here with 
you today to introduce Stephen Vaden, who has been nominated to 
serve as General Counsel to the Department of Agriculture. I 
would like to extend a warm welcome to Stephen and those here 
supporting him, and I am sure he will introduce them shortly.
    He is a native of West Tennessee. Stephen attended 
Vanderbilt University as an undergraduate and obtained his law 
degree from Yale University. After serving as a clerk on the 
U.S. District Court of the Western District of Tennessee and 
the U.S. Court of Appeals for the Sixth Circuit, Stephen went 
on to practice law at Patton Boggs, most recently at Jones Day. 
At both firms, his practice centered on litigation, election 
law, and administrative law.
    This is pretty amazing. When not in Washington, Stephen 
returns home to Union City, Tennessee--it is very difficult to 
get to Union City, Tennessee--where his family-owned farm has 
operated for generations. Growing up and working on that farm 
has given him profound insight into the issues facing the 
agriculture community. I am confident Stephen understands the 
needs of farmers and will be an important asset as we work to 
help rural America prosper and grow, and I thank this Committee 
for focusing on that so much.
    I wholeheartedly support his nomination. I thank the 
Committee for holding this hearing, and encourage my colleagues 
to support his nomination. Again, thank you so much for the 
courtesy. It is great to be with all of you.
    Senator Boozman. Thank you, Senator Corker, for being here, 
very much.
    Senator Stabenow. Mr. Chairman, Senator Klobuchar had 
suggested that if we counted the two Senators that were at the 
end of the table, from Tennessee, as honorary members, we could 
actually vote out the bill. Just a thought.
    Senator Boozman. Whatever it takes.
    [Laughter.]
    Senator Boozman. Seeing a quorum is present now, this 
hearing stands in recess.
    [Whereupon, at 9:50 a.m., the Committee recessed and moved 
to executive session, and reconvened at 9:53 a.m.]
    Senator Boozman. I now reconvene the Nominations Hearing, 
and thank you both--thank all of you for your patience and 
thank you for your patience, particularly our witnesses.
    In following the tradition and custom of the Committee, 
before nominee witnesses are to provide testimony, I need to 
administer the oath. If you both could please stand and raise 
your right hands.
    First, do you swear that the testimony you are about to 
present is the truth, the whole truth, and nothing but the 
truth, so help you God?
    Mr. Smith. I do.
    Mr. Vaden. I do.
    Senator Boozman. Do you agree that if confirmed you will 
appear before any duly constituted committee of Congress if 
asked to appear?
    Mr. Smith. I do.
    Mr. Vaden. I do.
    Senator Boozman. Thank you. We look forward to your 
testimony.
    Mr. Smith.

TESTIMONY OF GLEN R. SMITH, OF IOWA, TO BE A MEMBER OF THE FARM 
     CREDIT ADMINISTRATION BOARD, FARM CREDIT ASSOCIATION.

    Mr. Smith. Mr. Chairman, Ranking Member Stabenow, and 
members of the Committee. My name is Glen R. Smith of Atlantic, 
Iowa. This past September, President Trump nominated me to 
serve on the Board of the Farm Credit Administration. I am 
truly humbled by the honor of this nomination, but also quite 
sobered by the huge responsibility, if confirmed, of having a 
role of ensuring that American agriculture continues to have a 
source for reliable, secure credit, which happens to be the 
mission of Farm Credit. I felt it was important for most of my 
family to be here to witness and experience the magnitude of 
that responsibility, and I thank you for the acknowledgment and 
the introduction. I might add that two of these, my son and my 
son-in-law, left a combine idle in the field back in Iowa, and 
if anybody is familiar with this time of year, I assured them 
that we would get them through just as soon as possible--not 
that I have anything to do with that, right?
    Anyway, as an active farmer, ag-businessman, and even 
dating back to my Ag-Finance days at Iowa State University, I 
have understood the important role of the Farm Credit 
Administration in setting policy, examining and regulating our 
nation's largest long-term agricultural lender, the Farm Credit 
System. I also understand that the health of American 
agriculture is critically dependent upon a healthy, viable Farm 
Credit System. Credit is truly the lifeblood of agriculture.
    What I would hope to bring to the Board is a keen sense of 
agricultural cycles throughout modern history, economic booms 
and busts, many of which I have lived through, the challenges 
those cycles place on dependable, safe source of credit. I 
lived through the boom '70s, my wife and I struggled to survive 
and raise a family in the mid '80s, only to prosper the last 
20-plus years, exponentially, in a good agricultural economy. 
We cannot afford to lose a generation of agriculturalists like 
we did in the '80s. Farm Credit can play a key role in 
supporting young farmers like my son behind me, who is 27, my 
son-in-law and daughter, in their early 30s, that are just 
entering their risk-prone susceptible stage in their 
agricultural production careers.
    As a life-long agriculturalist, I have always considered 
myself to be an optimist. As a farmer, you take on the weather, 
you take on pests, you take on the markets, and you have to be 
an optimist to survive. However, I do have to confess that I am 
very concerned about the current agricultural outlook, 
particular with younger, risk-prone producers. Land is 
typically the dominant asset on a farmer's balance sheet. In 
the Midwest alone, we have seen a 15 to 20 percent erosion in 
land values over the last several years, and I think it is very 
possible we could see another 15 to 20 percent erosion in 
values, which I feel would throw a lot of those financial 
ratios into a danger category.
    The economic prosperity that was enjoyed, roughly in 2006 
through 2013, has contributed to some spending habits that may 
not be sustainable or no longer supportable, and I truly 
believe that low interest rates have camouflaged the difficulty 
in paying back principle with after-tax dollars on high-priced 
machinery, land, and breeding livestock.
    Given the highly capitalized nature of agriculture, an 
uptick of only a few percentage points would significantly and 
negatively affect farm net operating income, and I believe we 
are a long ways away from crisis management, as experienced in 
the '80s. However, out of love for this wonderful industry, I 
would be a strong advocate for caution in the Farm Credit 
System.
    Being selected as a Board member would represent one of the 
greatest challenges of my life but also potentially the most 
rewarding. I feel I would be a reliable, honest representation 
of American agriculture and have a vision for its future that 
defined my own life. It will not be an easy transition, moving 
away from the land and community that has defined our life's 
work and love. Hopefully our positive contribution to public 
service can offset that severance.
    Again, thank you very much for this honor, and I look 
forward to your questions.
    [The prepared statement of Mr. Smith can be found on page 
24 in the appendix.]
    Senator Boozman. Thank you, Mr. Smith. Mr. Vaden.

   TESTIMONY OF STEPHEN ALEXANDER VADEN, OF TENNESSEE, TO BE 
        GENERAL COUNSEL OF THE DEPARTMENT OF AGRICULTURE

    Mr. Vaden. Thank you, Mr. Chairman, Ranking Member 
Stabenow, and members of this Committee. It is an honor to come 
before you today as the President's nominee to serve as General 
Counsel for the United States Department of Agriculture. I 
would like to thank Senator Alexander and Senator Corker for 
the very kind words they said about me in introduction, 
particularly Senator Corker's remark about getting to Union 
City. He is correct. Every Friday evening, I catch the last 
fight out of Reagan to Memphis, and then I have a two-hour 
drive north to Union City, which gets me home about 1:00 on 
Saturday morning, and I take the last flight out Sunday night 
to return to Washington, DC, and my work at the Agriculture 
Department.
    I would also like to thank Congressman Kustoff for being a 
supporter of mine since day one, as my hometown Congressman.
    Before I respond to your questions I wish to spend a few 
moments to tell you about my background and why the President's 
nomination, as well as Secretary Perdue's unwavering 
confidence, are so personally meaningful to me.
    I come from a farming family. My father, John Marshall 
Vaden, was born on a farm in rural Obion County, Tennessee, in 
April 1918, and engaged in farming his entire life. Following 
his death two years ago, my brother and I learned that one of 
the family farms that we have inherited has been in the family 
since the early 1800s, as it appears in exactly its current 
dimensions on the original map of Fulton County, Kentucky, with 
the name of my ancestor handwritten across the plat.
    It was the profits my father reaped that paved the way for 
me to come before you here today. Those profits, wisely 
invested over time, helped to pay for the exorbitant tuition 
charged by Vanderbilt University and Yale Law School.
    They made it possible for me to delay entering the private 
sector so that I could clerk for two of our nation's finest 
Federal judges, Judge Julia Smith Gibbons of the United States 
Court of Appeals for the Sixth Circuit, and Judge Samuel H. 
Mays, Jr., of the United States District Court for the Western 
District of Tennessee.
    They supported my move to the much more expensive 
Washington, DC, area, where I entered the private practice of 
law, first at the firm of Patton Boggs and later at the firm of 
Jones Day. I therefore understand why low commodity prices can 
be so harmful to the futures of those who come from rural 
communities, such as myself.
    As I am nominated for the role of General Counsel, it is 
important for me to spend a few moments reviewing my legal 
experience. My practice has focused primarily on three main 
areas: litigation, particularly appellate litigation; 
administrative law; and regulatory compliance. These happen to 
be three of the principal areas of concern for any department's 
general counsel.
    The briefs I have drafted and the cases I have argued have 
covered areas of law as diverse as the procedural requirements 
of the Administrative Procedure Act, the confines of the First 
Amendment's protections, the transparency requirements imposed 
upon Federal agencies by the Freedom of Information Act, the 
fiduciary duties of corporate officers, and the procedural 
protections provided to union members to safeguard their 
elections, to name just a few.
    My practice, thus, has focused on making certain the 
government and others in positions of power follow the legal 
guidelines meant to guarantee due process of law. Having been 
on the other side of the ``v'' from the government in 
litigation, I can understand the trepidation citizens feel when 
they must challenge the government's decision. It is the job of 
the General Counsel to keep the government to its word by 
requiring the Department to follow its constitutional, 
statutory, and regulatory responsibilities. I believe that a 
general counsel can be considered to have done well if 
producers can say that while they did not always agree with the 
Department's decisions, they felt their concerns were heard, 
and the Department treated them fairly. If confirmed, this is 
the goal I aim to meet.
    I would be remiss if I did not mention, for the past 11 
months, I have served in the Office of General Counsel, first 
as a senior advisor, and since the 17th of March, as the 
Principal Deputy General Counsel.
    Every day I have the high honor of working with 203 of the 
finest lawyers in America to perform the legal work necessary 
to allow rural America to thrive. We are joined by 54 support 
staff, without whom none of us attorneys could get anything 
done. As the members of this Committee know all too well, the 
men and women of the Office of the General Counsel are 
committed to providing legal advice in a timely and 
professional manner.
    Equally as important, the office provides that advice with 
the accumulated knowledge of the challenges that our producers 
face to grow the food and fiber that powers America. It is a 
charge that each and every member of that office takes 
seriously, including myself.
    As I mentioned in my opening remarks, my father was a 
farmer. Throughout his life he was a grocer, an investor, and a 
real estate developer. But it was the title of ``farmer'' of 
which he was most proud. I know this because he placed that 
title--``Farmer''--below his name on every check I ever saw him 
sign. The last three checks he ever signed hang on my wall, 
framed, as a reminder of the responsibilities I bear as 
Principal Deputy General Counsel, to ensure that America's 
producers are treated fairly, equitably, and in accordance with 
the law. Should the Senate confirm me to the position of 
General Counsel, I commit to you today to carry out the 
responsibilities of that office with the same very personal 
commitment represented by those checks.
    Thank you once again for the opportunity to come before you 
here today, and I look forward to answering your questions.
    [The prepared statement of Mr. Vaden can be found on page 
26 in the appendix.]
    Senator Boozman. Thank you, Mr. Vaden and Mr. Smith, very 
much, for your testimony.
    Mr. Smith, when we met prior to your confirmation hearing 
we discussed young and beginning farmers and the difficulties 
that they face. I hear often from Arkansans about the high 
barriers to enter into production agriculture, and this, as we 
all know, is a very serious issue. Like you noted in your 
testimony, with the average age of the American farmer now 
around 60 years of age, we must have the next generation ready 
to produce enough food and fiber to sustain an expected world 
population of 9 billion by 2050.
    The year 2050 is only 32 harvests away. Could you expand on 
what you see the Farm Credit System's role is in supporting and 
providing opportunities for these younger, riskier farmers and 
ranchers?
    Mr. Smith. Thank you, Senator. As I mentioned in my opening 
remarks, my concern over the advanced age of the American 
farmer, I am 61 and I think the average age of farmers in Iowa 
is 62. Sometimes we are still referred to as the young farmers 
in the neighborhood, after 35 years. But I think it is an acute 
problem and I think it is something that Farm Credit can 
address.
    As a lender you always have that balance between risk, and 
generally younger producers are riskier. There are programs 
within FSA that help mitigate that risk and also help eliminate 
those hurdles of capital investment up front, and I certainly 
would encourage partnerships with Farm Credit and FSA and the 
programs that would help beginning farmers get a start.
    In Iowa, I am quite proud that we do have some good 
programs that offer tax advantage to landlords that choose to 
rent their farms to beginning farmers through state tax 
credits, and I think it could serve as a good model for other 
states around the country. I think we've done some good jobs. 
There's also financing for land for livestock, for machinery 
also available through the state, to their beginning farmer.
    I think in my role with Farm Credit, I do plan to travel 
considerably, and I think we could share those ideas. Hopefully 
maybe Farm Credit could be a little bit of a clearing house. 
What my intention is not is to just have a nice, shiny brochure 
on the coffee table saying that we have a beginning farmer 
program. I think part of those travels would be to ask some 
very specific questions about numbers and about risk 
orientation, and success stories along with failure stories, 
because risk doesn't go without failure.
    Senator Boozman. Great. Very good. Thank you.
    Mr. Vaden, there is a longstanding history of USDA, 
generally, and specifically the Office of General Counsel, 
providing technical assistance to the Committee as we write the 
farm bill. This assistance ensures the workability of the 
legislation. Will you commit to continuing to provide OGC 
resources towards technical assistance for the upcoming farm 
bill, for other legislation that helps to ensure the 
workability of these programs so the USDA is better able to 
defend itself against potential lawsuits?
    Mr. Vaden. Absolutely, Mr. Chairman. Thank you for the 
question. As I remarked to you during our meeting in your 
office, regardless of whether or not the Department may support 
a particular bill, it can, of course, always become law. So 
it's important that bill be written well, because we are going 
to be the ones who are asked to interpret it once it is passed 
into law. So we will absolutely continue to provide the 
Committee, of both houses of Congress, with technical 
assistance when requested.
    Senator Boozman. Thank you very much. Senator Stabenow.
    Senator Stabenow. Thank very much, Mr. Chairman. First, Mr. 
Smith, just a follow-up on Senator Boozman's question on new 
and beginning farmers. You and I talked about that as well, and 
I know you share the commitment, as you have just spoken about. 
I wanted to remind the Committee that in the last farm bill we 
included veterans in that category, as you and I talked about, 
and there is an extra opportunity for support and assistance 
for both new and beginning farmers, but also for those who have 
served our country, in other ways that are incredibly 
important. We want to make sure we're providing them the same 
opportunities. So I appreciate your efforts on that front.
    Mr. Vaden, you talked a lot about areas of the law where 
you have argued cases, but I think it is important for me to 
indicate that there is one area of your past work that you did 
not talk about, and that was defending recent state efforts to 
restrict voting access for African Americans and other 
minorities. This is very troubling. Ensuring that citizens have 
access to the right to vote is a bedrock principle of our 
democracy. In fact, our democracy thrives when more citizens 
participate, and we should be in the business of increasing 
voter participation.
    If you are confirmed, I would expect you to ensure that 
USDA operates in a manner that is consistent with our laws, our 
values, our principles, and that all USDA customers and 
employees would be treated with dignity and respect.
    Let me further go into, just in the interest of time, what 
Senator Boozman talked about in terms of providing information 
to the Committee, because technical assistance, obviously, is 
very important. But it is also very important that we see the 
same prompt and full information, provided to myself as Ranking 
Member, on the minority side of the Committee, as well as the 
majority side.
    Earlier this year there was some question about whether or 
not that would happen, if there would be responses as we have 
always had to my questions as well as the Chairman's. Senator 
Roberts and I sent a joint letter, and talked with Secretary 
Perdue about this issue. He certainly indicated that he would 
work with us on that issue.
    But just for the record, will you commit to allowing and 
directing USDA officials, including yourself, to respond fully 
and promptly to information and requests from me and from all 
other members of the Committee, both sides of the aisle, and 
commit to providing us with the information that is requested?
    Mr. Vaden. Thank you very much for the question, Senator, 
and I enjoyed addressing this with you when we spoke in your 
office earlier this season.
    Yes, Senator, the Secretary has a very simple policy. When 
we receive a letter from a Member of Congress we respond.
    Senator Stabenow. Great. Thank you very much. Will you 
commit to providing the public with transparency about agency 
activity to the maximum extent permitted by law?
    Mr. Vaden. Senator, as I mentioned in my opening remarks, 
one of my past legal experiences has been suing the government 
for failing to follow the guidelines of the Freedom of 
Information Act, which guarantees citizens access to 
information for any reason whatsoever. So having worked on this 
issue in the private sector and having seen the frustration 
that clients have when they cannot get access to information, I 
feel very strongly that citizens should have access to 
information to which the law entitles them.
    Senator Stabenow. Then, finally, will you also commit to 
providing the public with a meaningful opportunity to comment 
on proposed agency actions, such as reorganization, and to 
considering these comments before making a final decision?
    Mr. Vaden. Well, Senator, as you are aware and as we 
discussed in your office, for each of the Secretary's moves 
that he has made regarding reorganization he has sought and 
accepted public comment, and as I think you have seen with the 
letters that he has sent to this Committee, as well as the 
House Committee, notifying them of the changes that he wants to 
make and then following up on that, he does take comments into 
account and changes have resulted as a result of comments 
received.
    Senator Stabenow. Thank you. Then, finally, one other 
question. This is a topic you and I have talked about 
extensively but it is important to raise because both Senator 
Roberts and I feel it is important that it be addressed before 
the next farm bill, to be able to help us successfully write a 
farm bill and address all the needs of all of our farmers and 
ranches in rural communities. In the 2014 Farm Bill, Congress 
provided authority to the Federal Crop Insurance Corporation 
Board to make decisions related to new insurance products and 
improvements to existing products.
    We know our dairy farmers are operating without an 
effective safety net. It is the one area where I feel we missed 
the mark, in terms of the last farm bill, and it needs to be 
corrected. There is a corrective mechanism. There is the 
authority within the USDA to independently make that decision. 
I know that there is ongoing consultation with OMB, but USDA 
has the capacity and responsibility to act on behalf of our 
dairy farmers.
    So I ask you, for the record, will you work to move this 
forward so that the issue can come before the next FCIC Board 
meeting for decision at the end of the month, so that we can 
actually make sure this is part of next year's baseline, as we 
go into the farm bill?
    Mr. Vaden. Senator, once again I thank you for the 
question. As we discussed, just before the hearing, as a matter 
of fact----
    Senator Stabenow. Right.
    Mr. Vaden. --on this very important issue to you, we have 
been working this issue, both internally and with the Office of 
Management and Budget, and we will continue to do so and make 
our points plain to them about what we feel that the law 
requires us to do.
    Senator Stabenow. Thank you. Just for the record, this is 
not only, as you know, of interest to dairy farmers but really 
does relate to our capacity to address all of the farm safety 
net issues that we need to within the farm bill. So I look 
forward to working with you on this. I think it is very 
important to our success with the next farm bill.
    Thank you, Mr. Chairman.
    Senator Boozman. No, thank you, Senator Stabenow, and I 
know that Senator Roberts and the entire Committee agree with 
you wholeheartedly regarding request and transparency, which is 
so, so very important.
    Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman, Madam Vice 
Chairman.
    Welcome to both of you. Mr. Smith, how can Farm Credit 
Service help our producers in this time of low commodity 
prices?
    Mr. Smith. I think the role of a lender maybe is a little 
similar to the role of a parent. Sometimes saying yes all the 
time is not correct. I think close analysis and projection and 
models, if we should continue with these low commodity prices, 
is essential in looking at new loans or expanding existing 
loans with existing customers.
    I mean it when I say we need to be cautious. We do not have 
the trifecta we did in the '80s with low prices, super-inflated 
interest rates, and the third factor would be price supports 
that were not relative to the market.
    Today, I believe due to crop insurance, we have got a good 
safety net there, and I think, particularly with the last farm 
bill, this Committee should be commended for that, and I think 
a lender should work very closely with the borrower on that 
safety net. We do not have high interest rates. That is not 
saying 5 or 10 years from now we will not.
    Senator Hoeven. So I have got legislation that would raise 
the direct loan--the FSA direct loan from $300,000 to $600,000, 
and the guarantee from $1.3 to $2.5 million. What is your sense 
of that? Is that a good idea, or not, and how would you respond 
to that?
    Mr. Smith. Well, it is a symptom of the times in that land, 
at least in the Midwest, has about tripled in value in the last 
12, 13 years. So we have had to stick some added zeroes to add 
relevancy to that. But it is debt, and it is debt that has to 
be paid back.
    Senator Hoeven. Do you think we need the higher limits or 
not?
    Mr. Smith. Yes, I do, because of the relevancy----
    Senator Hoeven. Because of the cost of----
    Mr. Smith. Yes.
    Senator Hoeven. --production agriculture----
    Mr. Smith. The cost of production agriculture.
    Senator Hoeven. --has gone up so much. Good.
    The average age of the--or the average farmer age now is 60 
years old. How do we help get the younger producers in there?
    Mr. Smith. Partnerships with lender and existing farmers I 
think is one way. Subsidized interest rates through FSA. I know 
our firm, we have tried to be a clearinghouse for information 
on beginning farmer loans through FSA that partners with local 
banks, that can partner with Farm Credit. It is surprising. 
There are some good programs out there but it does not seem 
like the word gets out a lot of times to the consumers.
    Senator Hoeven. But you would agree we need to find ways to 
bring--to help younger farmers get involved in production 
agriculture.
    Mr. Smith. Absolutely. I have got two sitting behind me, 
Senator.
    Senator Hoeven. Well, that is good.
    Mr. Smith. Yep.
    Senator Hoeven. Of course, the capital constraints, when 
you look at land and equipment, inputs, everything else, that 
is part of the challenge, is it not?
    Mr. Smith. It is, and I had the question raised earlier in 
the week, what difference we see between going into an 
uncertain economic time and now. The thing that is most 
concerning to me, where in 1981, average land values in our 
area was around $2,000. It sunk down to around $685, $700 an 
acre. Today we are $7,500, $8,000 an acre.
    Senator Hoeven. Right. Exactly.
    Mr. Smith. So it is the high cost of capitalization today 
that really does worry me.
    Senator Hoeven. Right. Right. So you have an important role 
to play.
    Mr. Vaden, regulatory burdens is an issue for our farmers 
now. I mean, it's an issue for all small businesses, so we have 
to find ways to reduce the regulatory burden on all small 
business. Talk about that in terms of farmers, and then, in 
particular, in my state of North Dakota we have a section line 
issue where we have had disputes with Forest Service on section 
lines, which is very important for our products that we are 
able to have those section lines for access. So I want you to 
talk about, one, would you be willing to work with me on the 
section line issue, and, two, in general, are you willing to 
reduce the regulatory burden on our producers, farmers and 
ranchers?
    Mr. Vaden. Absolutely, Senator. As you have correctly 
noted, the burden of regulations on all industries, and in 
particular, agriculture, is a very important issue to the 
current administration. I know you mentioned an issue regarding 
the Forest Service. As you know, we have a new Chief of the 
Forest Service, Chief Tooke. I have met with Chief Tooke and he 
is--one of the first things that he is engaging in is a look at 
how the Forest Service can use its regulatory authority, both 
more effectively but use it to reduce the burdens on producers.
    Regarding your question about working with you, as I said 
earlier in response to questions from both the Chairman and the 
Ranking Member, we absolutely will work on you--will work with 
you, rather, to help you craft whatever legislation you may 
need in order to fix the issue that you see.
    Senator Hoeven. Thanks to both of you. I appreciate it and 
look forward to working with you.
    Senator Boozman. The Chair recognizes Senator Brown for 
questions, and also wishes him a big happy birthday.
    Senator Brown. Thank you, Mr. Chairman.
    Senator Boozman. Show them your birthday cake.
    Senator Brown. This is from Senator Klobuchar, who claims 
to have made this.
    [Laughter.]
    Senator Brown. What is interesting is there are 35 others 
that look just like it out in the main room.
    Senator Stabenow. They are all for you.
    Senator Brown. I signed up for Medicare today, too, Mr. 
Chairman.
    Senator Boozman. Yes, let us cut the cake.
    Senator Brown. This is not off my time, is it? Thank you.
    Thanks, Mr. Chairman. Mr. Smith, thank you for joining. Mr. 
Vaden, thank you, and it was nice to meet you before the 
hearing, accompanied by your two Senators.
    Mr. Vaden, as you know, USDA's budget--annual budget is 
some $125 billion. Its mission is, of course, broad. You can 
imagine this Committee's concern that your legal experience, as 
listed on your resume, is in election law, Federal campaign 
finance law, and the Foreign Agents Registration Act. As far as 
I know, the USDA General Counsel does not deal with any of 
these matters.
    I am also concerned with your lack of managerial 
experience, and my question is this. In your testimony, you 
noted that the General Counsel's office employs about 250, 
including some 200 lawyers. You worked at law firms for six 
years prior to this job. What is the largest number of 
individuals you ever managed?
    Mr. Vaden. Thank you for the question, Senator. As I noted 
in response to questions from your staff, when you allowed me 
the opportunity to meet with them earlier, it varied by case. 
There were some cases where I was the sole attorney responsible 
for everything that was going on. There were other cases that 
involved litigators that could involve a dozen or more 
attorneys.
    Senator Brown. So this would be an office of 250, including 
200 lawyers, and I guess you are saying in the cases when you 
had a big management role it was maybe a dozen. Okay.
    Mr. Vaden. Senator, I think it is also important to point 
out that for the past 11 months, and beginning March 17th, I 
have served as Principal Deputy General Counsel, as the General 
Counsel's chair is currently vacant. I have had managerial 
responsibility for those 203 attorneys, as well as those 54 
support staff. I would respectfully submit to you, sir, that I 
think one of the reasons why the first time you heard my name 
was when the President announced my nomination is because I 
have spent the past 11 months in my office at the Department of 
Agriculture, competently carrying out the functions of my job, 
both its managerial and legal responsibilities.
    Senator Brown. Okay. Let me talk about something you have 
done in your practice. Last year you were part of two briefs 
that supported efforts by the states of Ohio and North Carolina 
to deprive citizens of their right to vote. Senator Stabenow, 
the Ranking Member, mentioned this and did not have time to ask 
a question. I would like to.
    In the North Carolina case, the court found the State 
Legislature targeted ``African Americans with almost surgical 
precision'' in its efforts to deny the right to vote. In the 
Ohio case, the lower court found Ohio's actions also targeted 
minorities.
    Mr. Vaden, I am deeply concerned you have been involved 
with efforts to deny minorities the right to vote and reduce 
access to the polls for everyone. I am concerned about what 
this might signal for USDA's approach to these issues. What can 
you tell me--what can you tell the Committee--I mean, that is 
fact, that you were part of that. I would like you to answer, 
what can you tell the Committee about your client? Your client 
is the Judicial Education Network, your client in both these 
cases. What can you tell us about the Judicial Education 
Network?
    Mr. Vaden. Well, Senator, as you are aware, as an attorney 
I am covered by Rule 1.6 of the Rules of Professional Conduct, 
which require me to guard client confidences, both of current 
clients and former clients. With regard to your question about 
the Judicial Education Project, the information on the public 
record that was required to be submitted to the Court of 
Appeals for the Fourth Circuit, as well as the Court of Appeals 
to the Sixth Circuit, in the two cases that you note, list the 
information about the background and membership of that 
organization. That is a matter----
    Senator Brown. But what can you tell----
    Mr. Vaden. --of public record.
    Senator Brown. --this Committee. Is the Judicial Education 
Network a nonprofit?
    Mr. Vaden. Senator, I do not have the information in front 
of me.
    Senator Brown. You do not know? They funded your actions 
and you do not know if they are a nonprofit?
    Mr. Vaden. Senator, while----
    Senator Brown. You, a moment ago, Mr. Vaden, illustrated--I 
was about to say bragged--but illustrated that you were a 
competent manager for the last number of months, and you do not 
know if the group that funded you is a nonprofit? Do you know 
who funds the organization? Do you not know any of those 
things?
    Mr. Vaden. Senator, as an associate at a law firm it was my 
job to do the legal work that was assigned to me. It was not 
the job of an associate at a law firm to take care of billing 
practices.
    Senator Brown. Well, I understand. You have such narrow 
intellectual curiosity that you were involved in a case that 
the court said--that targeted African Americans with surgical 
precision, affecting their right to vote, in Ohio the same kind 
of--the same kind of--roughly the same kind of language was 
used about targeting minorities--and you did not care enough or 
know enough. You are a smart guy. You are well educated. You 
are obviously a good lawyer. You did not have the--any of--you 
did not have any interest in knowing who was funding this and 
whether they were a not-for-profit?
    Mr. Vaden. Senator, first, thank you for the compliments. 
Second of all, as it refers to the Judicial Education Project, 
as you know, in both of those cases, its sole function was to 
file one amicus brief in each case, and I would note for the 
record that in the Ohio case the Sixth Circuit Court of Appeals 
disagreed with your characterization of the record----
    Senator Brown. Oh, I understand----
    Senator Brown. --the Sixth Circuit Court of Appeals. There 
is, coming out of the Federalist Society and others, a real 
effort to restrict the right to vote in this country. I know 
that. It is part of a political movement. I know that. I was 
Secretary of State of Ohio in the '80s, and I know how we 
expanded the right to vote, and we encouraged people to 
register to vote. I know we are in a different time period now, 
after the Shelby case, and I know what a lot of young lawyers 
are trained to do about targeting right to vote.
    But you, again, did--is--who funded this group? I mean, do 
you now--do you honestly not know who funds the Judicial 
Education Network? Do you honestly not know whether they are a 
not-for-profit?
    Mr. Vaden. Senator, I would have to refer you to the 
information that was filed with the court which explains, on 
the public record, who was providing funding for the lawsuit.
    Senator Brown. You cannot say to this Committee, yes, it is 
a not-for-profit, or no, it is not a not-for-profit? You cannot 
say--you cannot give me any indication in this hearing today 
who actually funds the Judicial Education Network?
    Mr. Vaden. Senator, I have not seen their organizational 
paperwork and I would not want to mislead you by speculating.
    Senator Brown. It is pretty troubling that you are--you 
seem so blissfully unaware of who funded that lawsuit that 
clearly was targeted to take people's right to vote away. I am 
just stunned by that.
    Thanks, Mr. Chairman.
    Senator Boozman. Thank you. Senator Ernst.
    Senator Ernst. Thank you, Mr. Chair. Thank you, gentlemen, 
for being here today.
    As both of you know, the ag economy is going through a bit 
of a slump, rivaled only by the farm crisis that we had in the 
1980s. While we know that, on average, farm balance sheets are 
stronger than they were in the '80s, decreasing land prices can 
change that in a hurry.
    I am especially concerned for some of the younger and 
smaller farmers who got their start in the past decade, 
veterans and other beginning farmers who have only known those 
good times of high commodity prices and they have not had a 
chance to pay off debt and build equity. I hear that all the 
time when I am out on my 99-county tour, as you would know, Mr. 
Smith.
    So I would like to start with you, Mr. Smith. If you are 
confirmed to the FCA Board, what do you believe must be done to 
ensure that young and beginning farmers are receiving the 
support they need to avoid going under?
    Mr. Smith. It is a frequent question that I have gotten in 
just about every Senate office that we have visited is how do 
we get young farmers involved, and as a lender, how do we stay 
secure and reliable and help mitigate that risk.
    One of the things I referred to a little earlier, and would 
refer to again, is partnerships with entities that are 
encouraging beginning farmers, FSA, for instance, that minimize 
capital requirements, that have lower interest rates, are ways 
of possibly Farm Credit partnering with other entities to make 
those loans and try to mitigate the risk at the same time.
    As you know, Iowa has been a very--has got some very good 
programs for beginning farmers, offering subsidies to owners 
that cooperate with renting land to beginning farmers, and also 
selling land to beginning farmers, if it is sold on a contract, 
anyway.
    So I think from the standpoint of Farm Credit, I think my 
role would be encouraging using additional programs to help 
mitigate risk, to help that risk with lower interest rates. But 
one thing, Senator Ernst, that does scare me--and again, not to 
be repetitive, but it is the high cost of capital--the land, 
the breeding livestock, the machinery, that does worry me, that 
we did not have in the '80s. You know, $30,000 financed, really 
my beginning machinery package to farm 500 acres. Today, you 
can ask my son because that is his department, but I think it 
barely financed our GPS equipment.
    Senator Ernst. Right.
    Mr. Smith. So a huge disparity in the amount of capital 
that is required today, and those beginning--just because you 
say yes to that loan does not mean it might be good for that 
young borrower. Diversification--and we talked in Senator 
Stabenow's office a lot about this--is diversification, small 
loans, getting people started in a small way I think should be 
encouraged, maybe is one answer to help mitigate that risk. 
Making $10,000 loans, 20, $15,000 loans, and getting people 
started maybe is better than that big loan that may be more 
efficient, but again, is it really serving the needs of those 
young farmers?
    Senator Ernst. That is a really great point, and in your 
testimony, you mentioned the economic prosperity of farming 
communities in 2006 to 2013, that time frame, and the spending 
habits it led to that may no longer be supportable. How 
concerned are you that too many farmers are over-leveraged if 
interest rates continue to rise?
    Mr. Smith. Very concerned. Very concerned. Even a minimal 
two-point rise in interest rates would significantly impact 
operating budgets, again, getting back to the high cost of 
capital that we are working with today.
    Again, getting back to the diversification part, back in my 
parents' generation, pigs, cattle, chickens--that was diversity 
on farms even I grew up with. Today I say an intelligent, 
working wife is the best diversification, hopefully with 
insurance benefits, right?
    But the point being--and you can ask Fauzan and I, and I 
know you have, because we lived with that, is taking care of 
those family living expenses and not having to serve those in 
addition to paying your loan obligations.
    So a lot of counseling. I think the opportunity in Farm 
Credit with beginning farmers would be a lot of counseling on 
different ideas to survive, not just making the loan.
    Senator Ernst. I appreciate that, and I do think that is 
essential, the counseling aspect of that. We were laughing 
about having a spouse that maybe works outside of the home, but 
that is truly how many of our farm families are able to 
survive, especially with the crisis that we are seeing with 
health insurance right now, especially in Iowa.
    Mr. Smith. Yes.
    Senator Ernst. So thank you, Mr. Smith, so much, for your 
time. Thank you, Mr. Vaden, for being here as well.
    Thank you, Mr. Chair.
    Senator Boozman. Thank you, and next is a former House 
colleague of mine, Senator Van Hollen.
    Senator Van Hollen. Thank you. Thank you, Mr. Chairman. 
Thank you and the Ranking Member, and welcome, Mr. Smith and 
Mr. Vaden.
    Mr. Vaden, I do want to follow up on some of the concerns 
that have been raised by Senator Stabenow and Senator Brown 
regarding your representation in some of these voting rights 
cases, because I think compared to many of your predecessors in 
this position, as General Counsel, who had experience in the 
agricultural law or natural resources area, you have not had 
that experience in that area. You have had, and done a lot of 
work in these voting rights cases.
    So my first question is, when it came to the North Carolina 
case, I know the Judicial Education Project was a party. Did 
they pay Jones Day in full for that, or was it taken on in part 
as a part--a discounted rate? Do you know whether or not they 
paid the firm in full?
    Mr. Vaden. Senator, as I mentioned in response to my 
question--to the question from Senator Brown, as an associate I 
did not have access, nor did I participate in the billing 
function of the firm. So that was solely with partners, so I do 
not know the rate they were charged and I do not know their 
payment status and am unable to comment.
    Senator Van Hollen. Okay. Now, so, you and I share the 
experience of having been associates in a law firm. Jones Day, 
of course, is a big law firm. It was my experience that in a 
case like these, that if an associate indicated that they did 
not want to participate, the firm would certainly defer to 
those associate wishes. Did you express any concern or--about 
participating in these cases to your partners at Jones Day?
    Mr. Vaden. Senator, my ethical responsibility as a lawyer 
is to represent every client with ethical propriety and 
zealousness.
    Senator Van Hollen. That was--Mr. Vaden, that is not my 
question. The firm--these were clients of the firm. The first 
has--like Jones Day has hundreds of associates. It happens that 
you were involved in cases on behalf of the Judicial Education 
Project in North Carolina, Ohio, and Virginia. Is that correct?
    Mr. Vaden. That is correct, Senator.
    Senator Van Hollen. So you, at no time, expressed to the 
partners the fact that you did not want to participate in these 
cases, I assume. Right?
    Mr. Vaden. I did not, just as I did not, Senator, express 
displeasure about representing multiple labor union to protect 
the rights of their members or any of the other cases for which 
I was----
    Senator Van Hollen. Are you familiar with the Judicial 
Crisis Project?
    Mr. Vaden. I am aware of the name but I cannot claim to be 
familiar with it.
    Senator Van Hollen. Okay. So you have had no kind of 
affiliation or participation in any way with that group.
    Mr. Vaden. The Judicial Crisis Project?
    Senator Van Hollen. Yes.
    Mr. Vaden. No, sir. I do not believe I have.
    Senator Van Hollen. So in the North Carolina case--and you 
mentioned a number of cases where you had, for example, 
defended clients' due process rights against the government--
    Mr. Vaden. Yes.
    Senator Van Hollen. --and I think that is a worthy thing. 
Now, of course, in the case of North Carolina, you were on the 
opposite side, right? You were defending the State of North 
Carolina and the Education Project as an amicus--amicus 
filing--against claims from the defendants that their due 
process rights had been violated. Right?
    Mr. Vaden. The job of an amicus is to make a legal point.
    Senator Van Hollen. I know. I know what the job of amicus 
is. I have got your amicus brief here. The North Carolina--the 
U.S. Court of Appeals in this case, in North Carolina, found, 
and I quote, ``The General Assembly enacted legislation that 
restricted voting and registration in five ways, all of which 
disproportionately affected African Americans.'' They went on 
to say, ``We can only conclude that the North Carolina General 
Assembly enacted the challenge provisions of the law with 
discriminatory intent.''
    You all wrote in your brief that ``North Carolina allows 
all its citizens to vote, although members of minority races 
may disproportionately choose, for socioeconomic or other 
reasons, not to take advantage of this equal opportunity. North 
Carolina's practices are not the proximate cause of this 
phenomenon.''
    Now clearly the court, both the District Court and the 
Court of Appeals concluded very differently. My question to you 
is, now, stepping back, given the full scope of this case, 
having now heard all the arguments and seen the decisions from 
the Circuit Court, do you agree with the finding of the Court 
of Appeals, that, in fact, the North Carolina law was 
discriminatory?
    Mr. Vaden. Senator, the ruling of the court is the final 
decision of the court, and that is what the law--that is what 
they----
    Senator Van Hollen. Mr. Vaden, I understand what the law 
is. The law of the land is citizens united. I disagree with the 
decision. I am asking you whether, in the full light of being 
able to look back, whether you agree with the finding of the 
Circuit Court, that the North Carolina law was discriminatory?
    Mr. Vaden. I respect the ruling of the court.
    Senator Van Hollen. So you choose not to answer that direct 
question.
    Mr. Vaden. Senator, I have a duty of fidelity to former 
clients, under Rule of Professional Conduct 1.6. I also have a 
duty to respect the final ruling of each and every court in 
which I am involved in litigation. I take both responsibilities 
very seriously.
    Senator Van Hollen. Thank you. Thank you, Mr. Chairman.
    Senator Boozman. Thank you, Senator. Our Senator from 
Michigan.
    Senator Stabenow. Thank you, Mr. Chairman. I welcome our 
guests again and I have completed my questions. Thank you.
    Senator Boozman. Thank you so much. That will conclude our 
hearing today. I thank the nominees for their thoughtful 
comments and their engagement with the members of this 
Committee. I also thank all of you for your willingness to 
advocate for American farmers and ranchers as USDA and Farm 
Credit.
    The answers you provide today will be considered as we move 
to approve your nominations in the near future. To that end, I 
would request that if my fellow members have any additional 
questions for the record that they may be submitted to the 
Committee Clerk by 2:00 p.m. Monday, November 13th. We look 
forward to receiving your responses in a timely fashion and to 
further consider your nominations.
    The Committee will be adjourned.
    [Whereupon, at 10:41 a.m., the Committee was adjourned.]

      
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                            A P P E N D I X

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                   DOCUMENTS SUBMITTED FOR THE RECORD

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                         QUESTIONS AND ANSWERS

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