[Congressional Record (Bound Edition), Volume 153 (2007), Part 21]
[Extensions of Remarks]
[Page 30254]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 SMITHSONIAN MODERNIZATION ACT OF 2007

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                       HON. ELEANOR HOLMES NORTON

                      of the district of columbia

                    in the house of representatives

                       Tuesday, November 6, 2007

  Ms. NORTON. Madam Speaker, the Smithsonian Institution is a unique 
and irreplaceable cultural, historical, educational and artistic 
complex without any public or private counterpart in the world. Since 
its founding, the Smithsonian has become an extraordinary array of 
world class museums, galleries, educational showplaces and unique 
research centers including 19 museums and galleries, 9 research 
facilities, the National Zoo, and a National Museum of African American 
History and Culture, approved by Congress, now seeking funding from the 
private sector for construction. The Smithsonian has grown with trust 
funds, donations from American culture and life, and other financial 
contributions. However, most of its funding continues to come from 
federal appropriations. Despite receiving 70 percent of its support 
from the federal government, the Smithsonian has long had serious and 
mounting unmet infrastructure and other financial needs. Infrastructure 
needs have increased to $2.5 billion, and continuing deterioration 
threatens exhibits and restricts access. Congress must help the 
Smithsonian Institution strengthen its ability to build resources 
beyond what taxpayers are able to provide. The most important step that 
Congress could take today is to finally rescue the Smithsonian from the 
19th century governance structure that keeps it from accessing needed 
available private resources and limits close and critical internal 
oversight similar to what public and private facilities receive today. 
This bill provides a structure befitting an agency of the unique 
complexity of the Smithsonian's, without which these goals cannot be 
reached.
  In no small part, the difficulty the Smithsonian has faced results 
from limitations inherent to its antiquated governance structure. The 
existing structure may have fit the Smithsonian 160 years ago, but 
today, the structure has proven to be a relic that has disserved the 
Institution. The present governance places immense responsibility on 
dedicated but overextended members of the House and Senate, the Vice 
President of the United States and Chief Justice of the United States 
Supreme Court, fully half of the board, who must perform their 
fiduciary duties as board members while giving first priority to their 
sworn responsibilities as important Federal officials.
  The need for new revenue streams and for a modern governance 
structure has been clear for years but can no longer be avoided 
following unprecedented controversies and irresponsible risks taken by 
Smithsonian management. The Smithsonian's first full-blown scandal in 
its 160 year history, replete with embarrassing coverage, has damaged 
the Smithsonian's reputation and perhaps the confidence of potential 
contributors. The poor judgment and overreaching of Smithsonian 
personnel require new and concentrated oversight by citizens from whom 
the Smithsonian can command priority attention. The Regents, of course, 
have taken some important action on their own. After irregularities 
were uncovered by the media, the Regents responded to the controversies 
by creating a Governance Committee, chaired by Patty Stonesifer, a 
Regent who is chief executive officer of the Bill & Melinda Gates 
Foundation, with a mandate to comprehensively review the policies and 
practices of the Smithsonian and how the Board conducts its oversight 
of the Institution. The Board also established an Independent Review 
Committee (IRC), chaired by Charles A. Bowsher, former Comptroller 
General of the United States, to review the issues arising from the 
Inspector General's reports, the Regents' response, and related 
Smithsonian practices.
  The Independent Review was forthright in its investigation and 
recommendations. The IRC stated explicitly in its report that the root 
cause of the current problems at the Smithsonian was an antiquated 
governance structure that led to failures in governance and management. 
According to the IRC, the Board of Regents for the Smithsonian must 
recognize a fiduciary responsibility that carries a ``major commitment 
of time and effort, a reputational risk and potentially, financial 
liability.'' The IRC further found that the Smithsonian, with a budget 
of over $1 billion a year, must have a Board of Regents who ``act as 
true fiduciaries and who have both the time and the experience to 
assume the responsibilities of setting strategy and providing 
oversight. Time is a major factor.'' The IRC cited lack of clarity of 
the roles of the Vice President and Chief Justice on the Board, and 
said that ``it is not feasible to expect the Chief Justice to devote 
the hours necessary to serve as a fiduciary agent.'' The same might be 
said of members of the House and Senate who serve. The IRC recommends 
expanding the level of expertise and number of board members and 
ensuring that Regents who are appointed have sufficient time and 
attention to dedicate to the Smithsonian.
  The Smithsonian's own Governance Committee identified several board 
weaknesses and concluded that the Regents did not receive or demand the 
reports necessary for competent decision making, that staff whom the 
Regents depended upon for oversight inquiries, did not have direct 
access or the relationships necessary to bring forward important 
issues, and that the inability of staff to communicate red flag issues 
``crippled'' internal compliance and oversight mechanisms.

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