[Congressional Record Volume 146, Number 136 (Thursday, October 26, 2000)]
[Senate]
[Pages S11035-S11041]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE OLDER AMERICANS ACT AMENDMENTS OF 2000

  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (H.R. 782) to amend the Older Americans Act of 1965 
     to extend authorization of appropriations for programs under 
     the Act, to modernize programs and services for older 
     individuals, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, what is the regular order?
  The PRESIDING OFFICER. The Senator from New Hampshire is authorized 
to offer two amendments to the bill with 2 hours evenly divided on each 
amendment.
  Mr. GREGG. I yield such time as he may consume to the Senator from 
Vermont at this point.
  The PRESIDING OFFICER. The Senator from Vermont is recognized.
  Mr. JEFFORDS. Mr. President, it gives me great pleasure that the 
Senate is moving to pass the Older Americans Act Amendments of 2000. 
This year is the 35th anniversary of the Older Americans Program. Since 
1965, the act has provided a range of needed social services to our 
Nation's senior citizens.
  It is the major vehicle for the organization and delivery of 
supportive and nutrition services to older persons, and it has grown 
and changed to meet our citizens' needs. In 1972, we created the 
national nutrition program; in 1978, we established a separate title 
for Native Americans; and in 1987, we authorized programs to prevent 
elder abuse and neglect.
  The act has been reauthorized 12 times, most recently in 1992. 
Reauthorization legislation was considered in the 104th and 105th 
Congresses but did not pass due to controversy about a number of 
proposals. Now, we have the chance to pass this act and provide our 
elderly with desperately needed help.
  The Older Americans Act programs play a vital role in all our 
communities. Because of the Older Americans Act, millions of nutritious 
meals are delivered each year to the generation that served our country 
in World War II. It funds the operations of senior centers and other 
supportive services to enhance the dignity and independence of the 
Nation's elders; and it provides part-time employment opportunities to 
tens of thousands of senior citizens.

[[Page S11036]]

  Indeed, virtually all of our Nation's elderly are benefiting from the 
act. However, more could be done to help our senior citizens and their 
families. This is why we are here to pass the Older Americans Act 
Amendments of 2000. I want to commend all of the members of the 
Committee on Health, Education, Labor, and Pensions for their work and 
contributions in this effort. Senator DeWine and Senator Mikulski led 
the way on this reauthorization effort early in this Congress. The 
Subcommittee on Aging held a series of seven hearings, receiving 
testimony from over 30 witnesses. The hearings addressed important 
issues, including elder abuse, supportive services, State and local 
views, longevity in the workplace, and long-term family caregiver 
programs. In March, 1999, we were very fortunate to hear testimony from 
Ms. Reeve Lindbergh of St. Johnsbury, Vermont. She spoke to our 
committee about the unacceptable problem of elder abuse which confronts 
some of our most fragile elders.
  Then, in April, we heard from another Vermonter, Mr. John Barbour, 
who serves as the director of the Champlain Valley Agency on Aging, in 
Winooski, Vermont. He alerted the committee to changes needed in the 
nutritional programs outlined in title III of the act. This bill 
improves the Older Americans Act in several key areas. For example, it 
sets out specific policies objectives related to income, health, 
housing, long-term care, employment, retirement, and community services 
that will improve the lives of all older Americans. One of the most 
important aspects of this Act is the establishment of the Grassley-
Breaux, National Family Caregiver Support Program. According to the 
1994 National Long Term Care Survey, there are more than 7 million 
informal caregivers--including spouses, adult children, other 
relatives, and friends who provide day-to-day care for most of our 
Nation's elders.
  The National Family Caregiver Program authorizes $125 million in 
Federal assistance to help families care for their elderly by providing 
a multifaceted system of supportive services, including information, 
assistance, counseling, and respite services. Moreover, it will help 
older individuals who are caring for relative children, such as their 
grandchildren. This program will also extend to older folks who are 
caring for their adult children with mental retardation and 
developmental disabilities. Significant changes have been made to title 
V which authorizes community service employment for older Americans to 
provide part-time community service jobs for unemployed, low-income 
persons 55 years old and over.
  There will be 1.4 million more low-income persons over the age of 55 
in the year 2005 than there were a decade earlier, and many of them 
will continue working. Employment obtained through this program 
provides these workers with needed economic support. It keeps them 
active and involved in their communities, and it provides them with the 
opportunity to make important contributions to their communities, learn 
new skills, and enhance their sense of dignity and self-esteem. The 
changes made in title V by the bill are a critical part of this 
legislation, because they strengthen and modernize the Senior 
Employment Program.
  To begin, the program will now stress economic self-sufficiency and 
will increase the number of placements in public- and private-sector 
unsubsidized employment. The employment program is integrated with the 
Workforce Investment Act, including one-stop delivery systems and 
participant assessments and services, while the program itself and the 
administrative costs are codified. Also, under this title, a State 
Senior Employment Services Plan is established which provides Governors 
with greater influence and responsibility concerning the allocation of 
job slots. The newly established State plan ensures for the first time 
a planning process with broad participation by representatives from 
throughout the aging community.
  Other sections have also been strengthened. It authorizes the 
Assistant Secretary for Aging to award funds for training, research, 
and demonstration projects in the field of aging. This act consolidates 
the demonstration programs from 18 to 10 categories, including sections 
on violence against older Americans, rural health, computer training, 
and transportation. Title VI, grants to Native Americans, authorizes 
funds for social and nutrition services to older Indians and Native 
Hawaiians. It also adds a provision which authorizes funds for 
activities that protect the rights of the vulnerable elderly. I want to 
take this opportunity to acknowledge the many other individuals and 
organizations that have contributed to this effort. Senator Kennedy 
contributed his long experience to this effort. He helped us find the 
middle ground and solutions to many thorny issues. Senator Hutchinson 
was especially active on these efforts to address the employment and 
services needs of the rural elderly.
  Among the groups in the network of aging organizations, special 
recognition must go to the National Council of Older Americans and the 
National Association of State Units on Aging for their insight in 
proposing a compromise to the employment services program. AARP, with 
the leadership of Horace Deets, undertook the difficult task of seeking 
consensus among the many aging organizations. Green thumb tirelessly 
educated Members of Congress about the importance of these aging 
populations, especially those Members representing rural 
constituencies. The Leadership Council of Aging Organizations, 
currently being chaired by the Committee to Preserve Social Security 
and Medicare, provided a continuous forum for many issues to be 
addressed. Others contributing to this effort include the Southern 
Governors Association, the National Caucus on Black Aging, the National 
Association of Area Agencies on Aging, and Meals on Wheels. Finally, 
the Administration on Aging, headed by Jeanette Takamura, provided 
ongoing leadership and continuous expert support in strengthening these 
programs.
  Yesterday our colleagues in the House passed the Older Americans 
Reauthorization Act by an overwhelming majority. In summary, S. 1536 
goes a long way to improving supportive, employment, and nutritional 
services for the elderly. This legislation updates the Older Americans 
Act, making it more relevant and useful to our country's senior 
citizens. All of these individuals have worked hard to develop 
innovative strategies to strengthen and modernize the Older Americans 
Act, and I know that through these efforts our Nation's elders will be 
better served by this legislation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. As I understand, there are 2 hours under my control.
  The PRESIDING OFFICER. Both sides have 1 hour on each of the two 
amendments, so the Senator does have 2 hours.


                           Amendment No. 4343

  Mr. GREGG. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New Hampshire [Mr. Gregg] proposes an 
     amendment numbered 4343.

  Mr. GREGG. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Beginning on page 151, strike line 1 through line 23, page 
     153, and insert the following:
       ``(d) Responsibility Tests.--
       ``(1) In general.--Before final selection of a grantee, the 
     Secretary shall make an assessment of the applicant agency or 
     State's overall responsibility to administer Federal funds.
       ``(2) Review.--
       ``(A) In general.--As part of the assessment described in 
     paragraph (1), the Secretary shall conduct a review of the 
     available records to assess the applicant agency or State's 
     proven ability and history with regard to the management of 
     other grants, including Department of Labor grants, and may 
     consider any other information.
       ``(B) Existing grantees.--As part of the assessment 
     described in paragraph (1), any applicant agency or State who 
     in the prior year received funds under this title shall be 
     assessed in accordance with subparagraph (A), and particular 
     consideration shall be given to such agency or State's proven 
     ability to manage funds under this title.
       ``(C) Time for review.--The Secretary shall conduct the 
     review described in this paragraph in a timely manner to 
     ensure that, if such agency or State is determined

[[Page S11037]]

     to be not responsible and ineligible as a grantee, any 
     competition of funds from such agency or State who in the 
     prior year received funds under this title will be 
     accomplished without disruption to any employment of older 
     individuals provided under this title. Such competition shall 
     be performed in accordance with paragraph (7).
       ``(3) Failure to satisfy test.--The failure to satisfy any 
     1 responsibility test that is listed in paragraph (4), except 
     for those listed in subparagraphs (A), (B), and (C) of such 
     paragraph, does not establish that the organization is not 
     responsible unless such failure is substantial or persistent 
     (for 2 or more consecutive years).
       ``(4) Test.--The responsibility test shall include the 
     following factors:
       ``(A) Efforts by the Secretary to recover debts, after 3 
     demand letters have been sent, that are established by final 
     agency action and have been unsuccessful, or that there has 
     been failure to comply with an approved repayment plan.
       ``(B) Established fraud or criminal activity of a 
     significant nature within the organization.
       ``(C) Established misuse of funds, including the use of 
     funds to lobby or litigate against any Federal entity or 
     official or to provide compensation for any lobbying or 
     litigation activity identified by the Secretary, independent 
     Inspector General audits, or other official inquiries or 
     investigations by the Federal Government.
       ``(D) Serious administrative deficiencies identified by the 
     Secretary, such as failure to maintain a financial management 
     system as required by Federal regulations.
       ``(E) Willful obstruction of the audit process.
       ``(F) Failure to provide services to applicants as agreed 
     to in a current or recent grant or to meet applicable 
     performance measures.
       ``(G) Failure to correct deficiencies brought to the 
     grantee's attention in writing as a result of monitoring 
     activities, reviews, assessments, or other activities.
       ``(H) Failure to return a grant closeout package or 
     outstanding advances within 90 days of the grant expiration 
     date or receipt of closeout package, whichever is later, 
     unless an extension has been requested and granted.
       ``(I) Failure to submit required reports.
       ``(J) Failure to properly report and dispose of government 
     property as instructed by the Secretary.
       ``(K) Failure to have maintained effective cash management 
     or cost controls resulting in excess cash on hand.
       ``(L) Failure to ensure that a subrecipient complies with 
     its Office of Management and Budget Circular A-133 audit 
     requirements specified at section 667.200(b) of title 20, 
     Code of Federal Regulations.
       ``(M) Failure to audit a subrecipient within the required 
     period.
       ``(N) Final disallowed costs in excess of 2 percent of the 
     grant or contract award if, in the judgment of the grant 
     officer, the disallowances are egregious findings.
       ``(O) Failure to establish a mechanism to resolve a 
     subrecipient's audit in a timely fashion.
       ``(5) Determination.--Applicants that are determined to be 
     not responsible under paragraph (4), shall not be selected as 
     a grantee, and shall not receive a grant, or be allowed to 
     enter into a contract, to provide goods, services, or 
     employment with funds made available under this title.
       ``(6) Authority to bar providers.--If, after notice and an 
     opportunity for a hearing, the Secretary determines that an 
     applicant agency or State who in the prior year received 
     funds under this title, is not responsible under paragraph 
     (4), and that funds expended under such title by a recipient 
     of a grant, directly or indirectly, by a grant to or contract 
     with a provider to provide employment for older individuals, 
     have not been expended in compliance with this title or a 
     regulation issued to carry out this title, then the Secretary 
     shall issue an order barring such provider, for a period not 
     to exceed 5 years as specified in such order, from receiving 
     a grant, or entering into a contract, to provide goods, 
     services, or employment with funds made available under this 
     title.
       ``(7) Competition for funds.--
       ``(A) In general.--In the case of an applicant agency or 
     State, who has in the prior year received funds under this 
     title, and who has been determined to be not responsible 
     under paragraph (4), the Secretary shall establish procedures 
     to conduct a competition for the funds to carry out such 
     project among any and all eligible entities that meet the 
     responsibility test under paragraph (4), except that any 
     existing grantee that is the subject of the corrective action 
     under subsection (e) shall not be eligible to compete for 
     such funds.
       ``(B) Use of funds.--The eligible applicant or State that 
     receives the grant through the competition shall continue 
     service to the geographic areas formerly served by the 
     grantee that previously received the grant.
       ``(8) Disallowed costs.--Interest on disallowed costs shall 
     accrue in accordance with the Debt Collection Improvement Act 
     of 1996.
       ``(9) Additional audits.--With respect to unspent funds 
     under this title that are returned to the Department of Labor 
     at the end of the program year, the Secretary may use such 
     funds (not to exceed $1,000,000 annually) to provide for 
     additional auditing and oversight activities of grantees 
     receiving funds under this title.''.

  Mr. GREGG. Mr. President, I ask for the yeas and nays on my 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. GREGG. Mr. President, first, I congratulate the Senator from Ohio 
and the ranking member, the Senator from Maryland, for bringing this 
bill forward, the chairman and ranking members of the subcommittee, and 
also the chairman of the full committee and ranking member of the full 
committee, the Senators from Vermont and Massachusetts.
  The Older Americans Act is a significant piece of legislation. I had 
the good fortune to chair this subcommittee for a number of years and 
worked very hard on this piece of legislation. Regrettably, at that 
time we were unable to pass it all the way through the Congress. 
Certainly, the work of the Senator from Ohio and the Senator from 
Maryland in getting it to this point is significant and positive for 
senior citizens of America.
  This is a very important piece of legislation. There is no question 
about that. The changes made to this bill are extremely constructive to 
making the plan more flexible, more vibrant, more effective for our 
seniors and for the States in their ability to administer this program. 
Again, they have done an excellent job and I look forward to voting for 
final passage of the full bill.
  There is, however, one area where I have reservations about the 
mechanisms in the bill which are designed to protect the money and make 
sure the money flows to the benefit of senior citizens. The whole 
object of this piece of legislation is to benefit our seniors primarily 
in meals programs, employment programs, and a variety of other 
programs. It is extremely critical that the dollars that are spent not 
get tied up in bureaucracy and not get abused or misused, not be 
subject to fraudulent activity but, rather, actually flow through 
the system to the benefit of seniors; in the specific area of title V, 
which is the employment program of the bill, that the dollars flow for 
the purposes of employing seniors in jobs that can be constructive for 
them and give them a better lifestyle. That is the purpose of this 
bill.

  The problem, the concern, I have with the bill is that I do not 
believe it is strong enough in the area of enforcing the discipline in 
order to assure that the dollars flow through and end up benefiting the 
seniors of our country.
  I have suggested some changes to the bill which are part of this 
amendment. The bill has what is known as a responsibility test in title 
V which essentially lays out approximately 12 different areas where the 
Department must review the activities of grantees in order to determine 
whether or not they are delivering services correctly.
  Let me step back a minute and explain that there are a series of 
grantees under this title V proposal. One group is funded at the State 
level; another group is funded at the Federal level. The group funded 
at the Federal level is made up of a series of named agencies, specific 
agencies. Some of them are extraordinarily good at what they do. For 
example, Green Thumb does an extremely good job. Our parks department 
does an extremely good job. These agencies every year get what amounts 
to an entitlement, a specific amount of money to specifically grant to 
them $350 million in total which flows to each one of these agencies 
without any competition.
  With most Federal grants, most Federal contracts, if you want to 
build a road or you want to start a program of social service 
somewhere, you want to help people out in a day-care center, you have 
to usually compete, go through a system of applying to the proper 
Federal agency and competing for that money to see if the program you 
are proposing makes more sense that the program somebody else is 
proposing. That is called good government, creating that atmosphere of 
competition so that different ideas come to the table.
  In the area of these initiatives, I think nine agencies get the money 
independent of any competition. They get this money as an entitlement. 
It is simply a check written every year to them and they get it under 
the law. They don't have to compete for it.

[[Page S11038]]

They don't have to apply for it. All they have to do is go to the 
Department of Labor and pick up their check.
  Obviously, when you have that structure, you are bypassing one of the 
safeguards for making sure that the money is effectively spent and that 
it flows to the people who deserve it. You are bypassing the safeguard 
of annual competition for the funds--a fairly significant decision, by 
the way.
  When you do bypass that safeguard, you need to put into the law 
something that makes sense in the area of giving the Department of 
Labor oversight over those dollars so the Department of Labor has the 
authority and the capacity to look at a grantee who has an absolute 
right to this money and say: Well, even though you have an absolute 
right to this money, Mr. or Mrs. Grantee, you have to do a better job 
or we are going to have to question whether you should get the money. 
If you don't do a better job, we will have to put you through some 
disciplines to get you to do a better job or, alternatively--and this 
is where I am really concerned--if you happen to misuse this money, if 
you happen to use it in a way which is totally inappropriate to the 
purposes of assisting seniors in getting better employment, the 
Department of Labor should have the authority to go in and say you 
can't have that money any longer. I mean, that is just logical to me. 
This is pure logic, as far as I see; ``intuitively obvious through 
observation,'' as a professor of mine once said.

  If someone is abusing the money, the Department of Labor ought to 
have the right to go in and reduce that grant, or maybe even eliminate 
the grant, take the money back and redistribute it to people who are 
using it effectively, such as Green Thumb.
  But, under the present law, that is not the case. That type of 
authority really does not rest with the Department of Labor. There are 
procedures the Department of Labor can go through, but the 
complication, bureaucracy, and time limit involved in executing those 
procedures makes them virtually useless. As a result, there is no 
clear-cut way for the Department of Labor to, essentially, make 
accountable those agencies which presently have what amounts to an 
entitlement from the Department of Labor and from us, the Congress, for 
$350 million.
  What my legislation does is try to address that issue. It tries to 
add to the responsibility test which is in the bill. The present 
responsibility test in the bill has good language, but unfortunately it 
does not have good enforcement and does not have the language we need 
in order to accomplish enforcement in any sort of reasonable timeframe. 
It tries to add to that language tightening elements which will make it 
more effective for the Department of Labor.
  Let me run through it briefly. Essentially what it does is it says: 
First, the grantees have to have the proven ability to do what they say 
they are going to do. That is reasonable. You wouldn't want someone who 
cannot establish that. It says if they misuse the funds--including 
doing lobbying or litigation against the Federal Government, which is 
illegal, by the way; they are not allowed to do that--if they misuse 
the funds and the Secretary identifies that or an independent inspector 
general audit identifies that or there are official inquiries of the 
Federal Government that identify that, that misuse of funds is cause 
for the Department of Labor to move and take the money back from that 
grantee. It does not have to, but it creates a cause that allows the 
Department of Labor to do that. One would think they would because why 
would the Department of Labor want to fund somebody who had been found 
by, for example, the General Accounting Office or the inspector 
general, to have misused funds? So that only makes sense, in my 
opinion.
  It also tightens the disallowance. Under the present proceedings, you 
can have a 5-percent misuse of funds and still get away with it. There 
is law that says basically if you want to take 5 percent of your grant 
and misuse it, essentially you are going to get protection. We move 
that down to 2 percent, which I think seems a little more reasonable. 
Then what it says is, if there is a grantee who has misused funds, who 
has been found by the Department of Labor or the IG or the GAO, some 
group that has the imprimatur of authority of the Federal Government--
if that group determines there has been a misuse of funds and revokes 
the grant, then the dollars get rebid. The dollars flow back into the 
pool, the pot; they are not lost. They go back into title V and they 
get rebid.
  For example, if one of the nine grantees were found to be acting 
inappropriately, misusing funds--inappropriateness doesn't lose your 
funds but misusing funds, fraudulently using funds, that grantee loses 
its funds--that money would go back in the pool and logically somebody 
such as Green Thumb or some other agency which has a respectable track 
record and knows what they are doing and has not been using the money 
for inappropriate activities and has been getting the money out to the 
senior citizens would have the right to compete to get those dollars. 
That is the theme of this amendment: good government, it is called; a 
good government amendment.

  Why do we need it? We need it because we have an example of one of 
these agencies that gets an entitlement acting in a way which 
essentially has been a misuse of funds. Yet there has been no way to 
remove that agency from the list of those who get an entitlement. This 
agency is, today, called the National Senior Citizens Education and 
Research Center. It used to be known as the National Council of Senior 
Citizens. I think it is important to review the things this group has 
done with these tax dollars which have flowed to it for the purposes of 
helping seniors, and have turned out to be doing a lot less than that. 
In fact, they have been found by innumerable Federal reviews to have 
actually been misusing those funds in a way that is significant.
  This is not a small agency. This agency every year gets $64 million 
in tax money written to it as a check, as an entitlement--$64 million. 
That is a lot of money to be flowing to an agency without any 
competition, without any oversight in the sense it has to justify how 
it uses those dollars or, when it does have to justify them, actually 
has to produce a result, as we will see from what they have actually 
done as an agency. So it is not small dollars.
  The IG took a number of looks at this. I think it is important to 
review what the IG has found. The IG found this grantee has misused 
over $10 million of Federal taxes since 1992--$10 million. In an audit 
in 1992-1994--and remember, the IG does not audit every year, so it 
could have been more. Who knows? But from an audit in 1992-1994, they 
questioned $5.8 million of direct costs claimed by the National Council 
of Senior Citizens as not allowable under OMB regulations. These 
regulations are regulations the Department did not enforce: $3.8 
million for health insurance refunds that it received from insurers 
providing health coverage for seniors participating in the JOBS 
Program.
  This may seem to be a worthy endeavor, purchasing health insurance 
for seniors. It is. But the IG found the National Council of Senior 
Citizens paid premiums out of its DOL account but received refunds 
based on favorable claim experiences and, instead of using the refunds 
to offset the earlier charges to the DOL grant, the National Council of 
Senior Citizens essentially pocketed the money. Under the Federal 
regulation, Circular A-122 of the OMB, the refund should have been 
credited directly to the costs of the program. But they were not; $1.1 
million of direct costs were questioned in 1992 and 1994 because the 
National Council of Senior Citizens charged its DOL grant the cost of 
incurring the administration for this health insurance program on which 
they got the refunds.
  Here is a clever little scheme. They charged a fee to the insurer and 
claimed the fee for administering the plan was membership promotion 
income. The fee should have gone to reduce the DOL grant cost as 
required under the circular I just cited. But, instead, the money went 
into--where? The National Council of Senior Citizens' pockets. We will 
later get to what that money went to and, believe me, it was not senior 
citizens. It is very interesting where this money ended up. This trail 
leads down some very interesting roads.

  Mr. President, $580,000 of the $850,000 total general liability 
insurance cost was also questioned during the 1992-1994 audit as being 
an arm's length

[[Page S11039]]

transaction because the insurance company shared the same management as 
the personnel of the National Council of Senior Citizens, and it was 
not competitively bid. In other words, the National Council of Senior 
Citizens was hiring its leadership to run an insurance company to 
insure its programs. That has a very suspicious note to it, I would 
think, under any program. It is a very disturbing finding by the audit.
  This very disturbing finding by the audit was that the liability 
company, which was being run by the National Council of Senior 
Citizens, appeared to be related almost entirely to the National 
Council of Senior Citizens and its affiliated entities. Many of the 
insurance company board members were members of the National Council of 
Senior Citizens' executive management group.
  This is not my information, by the way. This is information found by 
the IG. The IG found this liability insurance to not be an arm's length 
transaction, and the DOL, Department of Labor, has even concluded that 
all of the costs of the policy should be disallowed.
  So you have what appears to be a sham contract, not an arm's length 
contract, for $850,000 that was not even competed out. The Department 
of Labor has agreed with the bulk of these findings from the 1992-1994 
audit and has issued a final determination that requires the National 
Council of Senior Citizens to repay millions of dollars in questionable 
funds. Has the agency repaid these funds? No, it has not. In fact, they 
have appealed the administrative law judge decision, and are currently 
in a discovery process.
  Then there is, of course, the fact that they will probably go to 
Federal court, all the time keeping these funds which are so clearly 
being misused.
  Believe me, they are not running to benefit any senior citizen who is 
trying to get a job under this program.
  All during this process, they have been running this sham operation--
that is my term; ``it is not an arm's length transaction'' was the IG's 
term--all during this process they have been receiving $64 million a 
year every year, just being paid out.
  There are other items about this organization that are working their 
way through the Department of Labor which are showing there are even 
more serious issues and significant problems.
  An IG report reviewing the 1995 funds--remember, the ones I was 
talking about reviewed 1992 to 1994--finds identical violations--
identical violations. In other words, after they have already been 
found to have violated the rules of the Department of Labor, the rules 
of the Office of Management and Budget, and the rules of objectivity, 
identical violations were committed in 1995, and it was recommended 
$2.8 million be disallowed.
  There are still other audits reviewing 1996 and part of 1997 that 
call into question approximately $2.7 million. This grantee has simply 
not, under any reasonable test, been administering these funds in a 
responsible way. It has been misusing these funds.
  As if these types of findings are not bad enough, there is another 
audit from the IG dated April 24, 1998--fairly recently--which exposes 
a $6.1 million slush fund at the National Council of Senior Citizens 
maintained for over 14 years. This fund, which they euphemistically 
call a contingency fund, was set up in 1984 with $3.7 million in 
Federal funds to provide financial assistance to enrollees ``in case 
the JOBS Program had been terminated by the Congress or the 
administration.'' In other words, they set up a slush fund, the purpose 
of which was to continue the program in case Congress, by some 
decision, decided the program was not any good. In other words, they 
were going to be an extraordinary form of government. We now do not 
have three branches of Government, we have a fourth over here. It is 
called the National Council of Senior Citizens which had decided even 
if Congress determined, which it has not and which it will not, that 
title V did not make sense, they were going to continue to run title V 
with tax dollars. That is a new form of government in our midst.
  The program was not terminated, of course. It has continued. It will 
continue as far as the eye can see because it is a program which, on 
balance, has worked extraordinarily well for our seniors.
  Has the slush fund been terminated which was set up in 1984 in case 
there was a contingency that this program might be terminated? Has that 
slush fund been terminated? No, it has not. The IG found it. After the 
IG discovered the fund, by then the money had been transferred to a 
trust fund. It recommended the money be returned to the Treasury, but 
the National Council of Senior Citizens filed a lawsuit in Federal 
court saying they should be able to keep the money.
  This is unacceptable. It should be unacceptable to all of us. Anybody 
who is interested in good government should say, on the face of it, 
this is an unacceptable action by somebody who is using our Federal 
dollars in trust for the purposes of helping seniors get jobs.
  Many of the grantees who participate in these programs, even the 
entitlement grantees--in fact, all the entitlement grantees--do so with 
the understanding that they have local and community organizations; 
they basically take the money from the Federal Government under this 
entitlement, and they funnel it out to the local community 
organizations which then manage the money and the people they 
administer. Green Thumb is a classic example of this. Urban League and 
ARP are other examples. This is a very legitimate, good way to do it. 
They have a national organization and send it out to the local 
organization. That is the concept behind this.

  This is why we had, I presume, although I do not know, the original 
nine grantees. I hope nine is right. Nine grantees were picked because 
they were national but they had local organizations or they at least 
represented they would.
  The National Council of Senior Citizens does not. It does not have 
local affiliates. Instead, they function exclusively as a middleman 
program. They subcontract the services and the job placement out to 
other nonprofit organizations in States. They do not have a unique 
expertise to bring to the table. They are simply an intermediary.
  In their case, they are an intermediary which takes a fair amount of 
the money and keeps it here in Washington, as it would appear, under 
their insurance program to benefit an insurance company with which it 
is affiliated, in the sense its membership is the same membership as 
the National Council of Senior Citizens group, and that it creates a 
slush fund with the money, and that the IG in 1992, 1993, 1994, 1995, 
1996, 1997, and 1998 found in violation of the rules of the Department 
of Labor and the Office of Management and Budget.
  One has to wonder why we need such a middleman. Would it not make 
more sense, if we are going to have these entitlement programs, if we 
at least send them to people who are using the money to benefit seniors 
and give them jobs, such as the Urban League, ARP, or Green Thumb, and 
let them compete for it.
  There is something equally disturbing about this organization 
because, as I said earlier, where did this money go? What were they 
doing? It is my understanding that at one point almost 90 percent of 
the money of this organization came from this entitlement, and even 
today this entitlement makes up a huge amount of their funds. So 
shouldn't they be basically working on senior citizens issues? You say, 
yes, that is right, of course.
  It turns out that a lawsuit in New York City involving the Teamsters 
Union and the illegal use of cash in the electoral process for the 
president of the Teamsters Union, which some may remember involved 
transferring money from the Democratic National Committee to the 
Teamsters Union and the Teamsters Union to the Democratic National 
Committee--back and forth and in and out--that in that lawsuit, lo and 
behold, the National Council of Senior Citizens ended up being named as 
an unindicted co-conspirator.
  According to the scheme outlined by the Federal prosecutors in the 
court documents, the Teamsters allegedly funneled money illegally into 
the National Council of Senior Citizens, which then arranged to hire 
direct mailing firms whose president applied a portion of the money 
received to the campaign for the presidency of the Teamsters Union.

[[Page S11040]]

  Money, of course, is fungible, but one has to presume that some of 
the operating dollars was being used by the National Council of Senior 
Citizens to float this exercise with the Teamsters Union. You explain 
to me why funds which are supposed to be flowing to benefit seniors 
getting jobs are flowing to get the president of the Teamsters Union 
elected president of the Teamsters Union. Explain that to us and tell 
us that we, as a Senate, justify allowing this to happen. It is pretty 
hard to explain.
  Is that their only illegal campaign activity? No, it is not. In yet 
another instance involving the same organization, the Federal Election 
Commission conducted an investigation of the National Council of Senior 
Citizens, and as part of the complaint filed relating to the 1994 
Virginia Senate race, that investigation resulted in the National 
Council of Senior Citizens admitting that they had violated the law, 
and I believe they actually paid a fine as a result of violating an 
election campaign law.
  These election violations involved paying for publications 
specifically endorsing candidates, making illegal corporate advances, 
and coordinating activities of political candidates.
  This, by the way, is an organization which gets a majority of its 
funding or has traditionally gotten a majority of its funding, as a 
result of an entitlement to tax dollars, the purpose of those tax 
dollars being to hire senior citizens to give them work so they can 
have a better lifestyle.
  So one would guess that maybe--this is only a guess or a projection--
maybe some of that contingency fund, otherwise known as a slush fund 
that the IG found was used at least potentially, because money is 
fungible, be exchanged with the dollars which were being used, in the 
FEC's opinion, in violation of campaign financing, and in opinion of 
the U.S. attorney for the district of New York for the purposes of 
being an unindicted co-conspirator in the election of the president of 
the Teamsters Union, who later lost his election. He won the election, 
but it was sort of one of those elections that was thrown out because 
there was so much inappropriateness about it; and he was found to have 
violated the law in that election as did a number of other individuals.
  So this organization has a pretty sour--and ``poor'' would be 
generous--track record on the management and use of the funds which 
flowed to it as an entitlement under title V.
  Does my language specifically say this organization gets defunded? 
No, it does not. I would certainly hope there would be a conclusion by 
the Department of Labor that this sort of action was intolerable and 
that tax dollars should not be used in this way. They should not be 
used to create slush funds. They should not be used to fund liability 
in health insurance corporations which are closely connected to the 
management of the group that is paying for them. They should not be 
used in a mismanaged way, as the IG has found. I would certainly hope 
that.
  But my amendment does not specifically say the National Council of 
Senior Citizens, which has now been renamed--I always forget its new 
name, but I guess it is changing its name again anyway. It changes its 
name a lot. I can't, quite honestly, understand why they did that. They 
are going to change its name again and are going to be absorbed into 
the AFL-CIO, which is the original creator of the organization.
  The National Senior Citizens Education and Research Center --the 
National Council of Senior Citizens--which will soon be an AFL arm, 
that the organization should lose its funding and that those funds 
should be made available to other agencies which are doing the job 
right, does my amendment say that has to happen? No, it does not.
  What my amendment says is this. I will run through it. Basically, it 
boils down to saying we should manage these Federal resources in the 
way they are intended; that we should manage them for the purposes of 
giving senior citizens jobs, and making sure the people who are 
responsible for giving them jobs are responsible organizations. That is 
essentially what my amendment does.
  Let me run through the specifics so people understand this is a 
reasonably benign amendment. I do not know why it has been resisted. I 
find the resistance, in light of what the National Council of Senior 
Citizens has done--in fact, we have a track record of an agency that 
has clearly misused funds-- highly inappropriate.

  But in the first part of my amendment, basically, I take the 
responsibility tests section of the present bill, and I add to them 
language which says, first, there must be proven ability of the agency 
which is getting these entitlement dollars from the Federal Government 
to do the job of delivering a senior citizen employment program. There 
is nothing unreasonable about that.
  Second, we say the Secretary must do a timely review of each agency 
to determine that they have the capacity to do the job they claim they 
are going to do.
  There is a problem here in that sometimes these----
  The PRESIDING OFFICER. Will the Senator suspend?
  We have an order to go to morning business until noon.
  Mr. GREGG. I ask unanimous consent----
  The PRESIDING OFFICER. What is the request?
  Mr. GREGG. I ask unanimous consent that I be allowed to continue 
under this bill.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Reserving the right to object, Mr. President, I say to my 
friend from New Hampshire, we have had a number of people lined up 
since yesterday to speak in this period of time.
  Does the Senator have an idea how long he wants to speak on his 
statement?
  Mr. GREGG. My statement will go for about another 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. I thank the Chair, and I especially thank the Senator from 
Nevada for his courtesy in allowing me to proceed.
  Anyway, the first section goes to requiring proven ability.
  The second section requires that there be timely reviews and that 
there be no disruption of service. In other words, I do not want 
seniors losing their jobs because the agency has come in and said that 
somebody has been misusing their funds.
  Thirdly, we make it clear that in three major areas if you are found 
to be in violation of the responsibility test, you lose your funding if 
the Department of Labor decides to do that.
  The first two are already in the bill: fraud and debts after three 
demand letters. The third one, which I am putting in, is:

       Established misuse of funds, including the use of funds to 
     lobby or litigate against any Federal entity or official or 
     to provide compensation for any lobbying or litigation 
     activity identified by the Secretary, independent Inspector 
     General audits, or other official inquiries or [audits] by 
     the Federal Government.

  In addition, as I mentioned earlier, we basically lower the hold 
harmless from 5 percent to 2 percent.
  Lastly--and I think equally importantly--we put in a competition 
clause so if it is determined that one of these agencies does not 
qualify, is misusing funds, or has acted fraudulently, then the funds 
can be competed out.
  We also make it clear that the Department of Labor can use some of 
the extra money which they retained from this program for the purposes 
of auditing programs to make sure they are being done correctly.
  The important point here is this. I am not suggesting anything 
radical. I am not suggesting anything even remotely outrageous or 
excessive. All I am saying is, let's, under this responsibility test, 
have some teeth. Let's make it possible for the Department of Labor to 
come in, and when they find that a group has been acting 
inappropriately with these funds, misusing these funds, let's give them 
the authority they need to take action. They may not take action, but 
let's at least give them the authority to do that.

  Under the present responsibility test, and the time constraints, and 
the bureaucracy, it is 3 years, at a minimum, before they could take 
action--3 years for the National Council of Senior Citizens; that is 
$64 million a year, almost $200 million of taxpayer money being 
misused.
  We have already had audits which establish beyond a question that one

[[Page S11041]]

agency has acted inappropriately and has misused the funds. It is 
appropriate we give the Department of Labor the authority to act, so if 
they determine that, they can take action to make sure the money ends 
up where it is supposed to be, which is in the pockets of seniors who 
deserve to have jobs and need those jobs for a better lifestyle.
  Mr. President, I yield the floor.
  Mr. JEFFORDS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. JEFFORDS. Mr. President, I ask my colleagues to bear with me. I 
have two unanimous consent requests that have been cleared on both 
sides.

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