[House Report 104-874]
[From the U.S. Government Publishing Office]
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
ONE HUNDRED FOURTH CONGRESS
FIRST AND SECOND SESSIONS
1995-1996
(Pursuant to House Rule XI, 1(d))
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES
of the
HOUSE COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
ONE HUNDRED FOURTH CONGRESS
FIRST AND SECOND SESSIONS
1995-1996
(Pursuant to House Rule XI, 1(d))
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, Jr.,
Pennsylvania, Chairman
CARDISS COLLINS, Illinois BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California DAN BURTON, Indiana
TOM LANTOS, California J. DENNIS HASTERT, Illinois \1\
ROBERT E. WISE, Jr., West Virginia CONSTANCE A. MORELLA, Maryland
MAJOR R. OWENS, New York CHRISTOPHER SHAYS, Connecticut
EDOLPHUS TOWNS, New York STEVEN SCHIFF, New Mexico
JOHN M. SPRATT, Jr., South Carolina ILEANA ROS-LEHTINEN, Florida
LOUISE McINTOSH SLAUGHTER, New York WILLIAM H. ZELIFF, Jr., New
PAUL E. KANJORSKI, Pennsylvania Hampshire
GARY A. CONDIT, California JOHN M. McHUGH, New York
COLLIN C. PETERSON, Minnesota STEPHEN HORN, California
KAREN L. THURMAN, Florida JOHN L. MICA, Florida
CAROLYN B. MALONEY, New York PETER BLUTE, Massachusetts
THOMAS M. BARRETT, Wisconsin THOMAS M. DAVIS, Virginia
GENE TAYLOR, Mississippi \5\ DAVID M. McINTOSH, Indiana
BARBARA-ROSE COLLINS, Michigan JON D. FOX, Pennsylvania \7\
ELEANOR HOLMES NORTON, District of ColumbiaTATE, Washington
JAMES P. MORAN, Virginia DICK CHRYSLER, Michigan
GENE GREEN, Texas GIL GUTKNECHT, Minnesota
CARRIE P. MEEK, Florida MARK E. SOUDER, Indiana
FRANK MASCARA, Pennsylvania \3\ WILLIAM J. MARTINI, New Jersey
CHAKA FATTAH, Pennsylvania JOE SCARBOROUGH, Florida
BILL K. BREWSTER, Oklahoma \2\ JOHN B. SHADEGG, Arizona
TIM HOLDEN, Pennsylvania \4\ MICHAEL PATRICK FLANAGAN, Illinois
ELIJAH CUMMINGS, Maryland \6\ CHARLES F. BASS, New Hampshire
------ STEVEN C. LaTOURETTE, Ohio
BERNARD SANDERS, Vermont (Independent)ARSHALL ``MARK'' SANFORD, South
Carolina
ROBERT L. EHRLICH, Jr., Maryland
SCOTT L. KLUG, Wisconsin \8\
James L. Clarke, Staff Director
Kevin M. Sabo, General Counsel
Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director
----------
\1\ Elected to Committee May 25, 1995 (H. Res. 157).
\2\ Elected to Committee June 13, 1995 (H. Res. 166).
\3\ Resigned from Committee July 11, 1995 (Communication to the
Speaker).
\4\ Elected to Committee July 18, 1995 (H. Res. 186).
\5\ Resigned from Committee February 28, 1996 (Communication to the
Speaker).
\6\ Elected to Committee April 25, 1996 (H. Res. 414).
\7\ Resigned from Committee June 25, 1996 (H. Res. 462).
\8\ Elected to Committee July 22, 1996 (H. Res. 485).
LETTER OF TRANSMITTAL
----------
House of Representatives,
Washington, DC, January 2, 1997.
Hon. Robin H. Carle,
Clerk of the House of Representatives
Washington, DC.
Dear Ms. Carle: I am pleased to submit the enclosed report
entitled ``Activities of the House Committee on Government
Reform and Oversight, 104th Congress, First and Second
Sessions.''
This report follows the committee's past practice of
publishing its activities report annually as an interim report
at the end of each first session of a Congress and as a
separate final report at the end of a full Congress.
The present report includes matters required by Rule XI,
1(d) to be reported to the House not later than January 2,
1997, on the activities of the committee and in carrying out
its duty under Rule X to ``review and study, on a continuing
basis, the application, administration, execution, and
effectiveness'' of laws whose subject matter is within the
jurisdiction of the committee.
The present report describes fully the committee's
jurisdiction and organization, and details its activities. Of
particular note, in an extraordinarily productive Congress are
committee efforts in Procurement Reform, the Line-Item Veto,
the Federal Government Management: Examining Government
Performance as We Near the Next Century investigative report,
and the committee investigations of the White House Travel
Office and FBI Background files matter.
Sincerely yours,
William F. Clinger, Jr., Chairman.
C O N T E N T S
----------
Page
Part One. General statement of organization and activities....... 1
I. Jurisdiction, authority, powers, duties..........................1
II. Historical background............................................9
III. Organization....................................................13
A. Subcommittees......................................... 13
B. Rules of the Committee on Government Reform and
Oversight............................................ 14
IV. Activities, 104th Congress......................................21
A. Investigative Reports................................. 21
B. Legislation........................................... 23
C. Reorganization plans.................................. 30
D. Committee Prints...................................... 30
E. Committee Action on Reports of the Comptroller General 31
Part Two. Report of Committee Activities......................... 33
I. Matters of Interest, Full Committee
A. General............................................... 33
1. Oversight plans of the committees of the U.S.
House of Representatives......................... 33
2. Views and Estimates for Fiscal Year 1997........ 35
3. Investigations.................................. 36
a. The Financial Holdings and Activities of
Secretary of Commerce Ronald H. Brown...... 36
b. The White House Travel Office Investigation. 37
c. The Security of FBI Background Investigation
Files...................................... 49
d. Questions Concerning Campaign Contributions
Made to or Solicited by Lippo Group, John
Huang and Others........................... 52
e. Misuse of Political Influence within the
Disciplinary Enforcement System at the
Department of Defense...................... 53
f. Health Care Task Force...................... 54
g. Labor Department Taxpayer Funded ``Toll-
Free'' Hotline............................. 54
h. National Reconnaissance Office.............. 54
i. Abuse of the American Express Government
Travel Payment Program..................... 54
j. Taxpayer Funded Trip to Disney World........ 55
4. Legislation..................................... 56
a. H.R. 5, the Unfunded Mandates Reform Act of
1995 (Public Law 104-4).................... 56
b. H.R. 2, Line Item Veto Act of 1995.......... 57
c. H.R. 1038, a bill to Revise and Streamline
the Acquisition Laws of the Federal
Government................................. 58
d. H.R. 1670, the Federal Acquisition Reform
Act of 1995................................ 59
e. H.R. 830, the Paperwork Reduction Act of
1995....................................... 60
f. S. 790, the Federal Reports Elimination and
Sunset Act of 1995......................... 63
g. H.R. 3864, General Accounting Office
Management Reform Act of 1996.............. 65
h. H.R. 3136, title III, subtitle E, the
``Congressional Review of Agency
Rulemaking,'' (Public Law No. 104-121,
title II, subtitle E)...................... 66
i. S. 1577, to Amend Title 44, United States
Code, to authorize appropriations for the
National Historical Publications and
Records Commission......................... 68
j. H.R. 2326, Health Care Fraud and Abuse
Prevention Act of 1995..................... 68
k. H.R. 3078, Federal Agency Anti-Lobbying Act. 69
l. ``Proceedings Against John M. Quinn, David
Watkins, and Matthew Moore (Pursuant to
Title 2, United States Code, Sections 192
and 194,'' House Report 104-598, May 29,
1996....................................... 70
B. Budget Process........................................ 72
C. Federal Procurement Policy--An Era of Reform.......... 74
1. Oversight of the Implementation of the Federal
Acquisition Streamlining Act of 1994 (FASA)
(Public Law 103-355)............................. 75
2. Review of the Federal Government's Acquisition
Strategy Regarding the Post Federal
Telecommunications System 2000 Program (Post-
FTS2000)......................................... 76
3. Review of the Department of Defense's
Acquisition of the Defense Information Systems
Network (DISN)................................... 77
4. Review of the General Services Administration's
(GSA) Management of the Multiple Award Schedule
(MAS) Program.................................... 78
5. Oversight of Reform of the Acquisition System of
the Federal Aviation Administration (FAA)........ 79
D. Government Performance and Results Act of 1993 (GPRA). 79
II. Investigations
a. investigations resulting in formal reports
Committee on Government Reform and Oversight, Hon. William F.
Clinger, Jr., Chairman......................................... 81
1. ``A Citizen's Guide on Using the Freedom of Information
Act and the Privacy Act of 1974 to Request Government
Records,'' House Report No. 104-156, June 22, 1995,
First Report by the Committee on Government Reform and
Oversight.............................................. 81
2. ``Creating a 21st Century Government,'' House Report No.
104-434, December 21, 1995, Second Report by the
Committee on Government Reform and Oversight, Together
with Additional Views.................................. 81
3. ``Laws Related to Federal Financial Management as
Amended Through December 31, 1995,'' House Report No.
104-745, August 2, 1996, Ninth Report by the Committee
on Government Reform and Oversight..................... 83
4. ``Sampling and Statistical Adjustment in the Decennial
Census: Fundamental Flaws,'' House Report No. 104-821,
September 24, 1996, Fourteenth Report by the Committee
on Government Reform and Oversight, Together with
Additional and Dissenting Views........................ 84
5. ``Investigation of the White House Travel Office Firings
and Related Matters,'' House Report No. 104-849,
September 26, 1996, Fifteenth Report by the Committee
on Government Reform and Oversight, Together with
Minority and Additional Views.......................... 86
6. ``Federal Government Management: Examining Government
Performance As We Near the Next Century,'' House Report
No. 104-861, September 28, 1996, Eighteenth Report by
the Committee on Government Reform and Oversight,
Together with Additional and Minority Views............ 90
7. ``Investigation into the White House and Department of
Justice on Security of FBI Background Investigation
Files,'' [Interim Report], House Report No. 104-862,
September 28, 1996, Nineteenth Report by the Committee
on Government Reform and Oversight, Together with
Additional Views....................................... 92
Government Management, Information, and Technology Subcommittee,
Hon. Stephen Horn, Chairman.................................... 97
1. ``Making Government Work: Fulfilling the Mandate for
Change,'' House Report No. 104-435, December 21, 1995,
Third Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 97
2. ``Year 2000 Computer Software Conversion: Summary of
Oversight Findings and Recommendations,'' House Report
No. 104-857, September 27, 1996, Sixteenth Report by
the Committee on Government Reform and Oversight....... 105
3. ``Crude Oil Undervaluation: The Ineffective Response of
the Minerals Management Service,'' House Report No.
104-858, September 27, 1996, Seventeenth Report by the
Committee on Government Reform and Oversight........... 109
Human Resources and Intergovernmental Relations Subcommittee,
Hon. Christopher Shays, Chairman............................... 113
1. ``The FDA Food Additive Review Process: Backlog and
Failure to Observe Statutory Deadline,'' House Report
No. 104-436, December 21, 1995, Fourth Report by the
Committee on Government Reform and Oversight, Together
with Additional Views.................................. 113
2. ``The Federal Takeover of the Chicago Housing
Authority--HUD Needs to Determine Long-Term
Implications,'' House Report No. 104-437, December 21,
1995, Fifth Report by the Committee on Government
Reform and Oversight, Together with Additional Views... 116
3. ``Fraud and Abuse in Medicare and Medicaid: Stronger
Enforcement and Better Management Could Save
Billions,'' House Report No. 104-641, June 27, 1996,
Eighth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 118
4. ``Health Care Fraud: All Public and Private Payers Need
Federal Criminal Anti-Fraud Protections,'' House Report
No. 104-747, August 2, 1996, Eleventh Report by the
Committee on Government Reform and Oversight........... 120
5. ``Protecting the Nation's Blood Supply From Infectious
Agents: The Need for New Standards to Meet New
Threats,'' House Report No. 104-746, August 2, 1996,
Tenth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.............. 121
National Security, International Affairs, and Criminal Justice
Subcommittee, Hon. William H. Zeliff, Jr., Chairman............ 124
1. ``National Drug Policy: A Review of the Status of the
Drug War,'' House Report No. 104-486, March 19, 1996,
Seventh Report by the Committee on Government Reform
and Oversight, Together with Additional Views.......... 124
2. ``A Two-Year Review of the White House Communications
Agency Reveals Major Mismanagement, Lack of
Accountability, and Significant Mission Creep,'' House
Report No. 104-748, August 2, 1996, Twelfth Report by
the Committee on Government Reform and Oversight,
Together with Dissenting Views......................... 131
3. ``Investigation into the Activities of Federal Law
Enforcement Agencies Toward the Branch Davidians,''
House Report No. 104-749, August 2, 1996, Thirteenth
Report by the Committee on Government Reform and
Oversight, prepared in conjunction with the Committee
on the Judiciary, Together with Additional and
Dissenting Views....................................... 135
Postal Service Subcommittee, Hon. John M. McHugh, Chairman....... 145
1. ``Voices for Change,'' House Report No. 104-438,
December 21, 1995, Sixth Report by the Committee on
Government Reform and Oversight........................ 145
b. other investigations
Civil Service Subcommittee....................................... 146
1. Restructuring of the Office of Personnel Management..... 146
2. Federal Workforce Restructuring Statistics.............. 147
3. Examining the Federal Retirement System................. 147
4. Contracting Out......................................... 148
5. Examination and review of the Federal Workforce
Restructuring Act of 1994.............................. 150
6. Review of the Ramspeck Act.............................. 151
7. Review of the Combined Federal Campaign................. 151
8. Contracting Federal Investigations--Policy and Oversight 152
9. Administration's AIDS Training Program.................. 153
10. Privatization of OPM Training Responsibilities......... 154
11. Review of Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS)........................... 155
12. Review of Current Civil Service Reform Initiatives..... 156
13. Continuation of Civil Service Reform Review:
Performance and Accountability......................... 156
14. Review of Federal Employee Appeals Procedures.......... 157
15. Shutdowns of Federal Agencies Due to Lapses in
Appropriations......................................... 158
16. Employee Benefits in the Context of Total Compensation. 159
17. Medical Savings Accounts (MSA's) in the Federal
Employees Health Benefits Plan......................... 160
18. Veterans' Preference................................... 161
19. Soft Landings to Enhance Federal Downsizing?........... 163
20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit
Comparison............................................. 166
21. Illegal Use of Buyouts................................. 169
22. Civil Service Reform Proposals......................... 171
23. Review of the Federal Employees Health Benefit (FEHB)
Program................................................ 173
24. Taxpayer Subsidy of Federal Unions..................... 176
25. Review of Federal Firefighters Pay and Benefits........ 177
26. Drug Testing Policies in the White House............... 180
27. Effects of Privatizing OPM Investigations.............. 183
District of Columbia Subcommittee................................ 184
1. Closing of Pennsylvania Avenue.......................... 184
2. Traffic Disruptions..................................... 186
3. District of Columbia Economic Recovery Act.............. 187
4. Public Law 104-8, District of Columbia Financial
Responsibility and Management Assistance Authority Act
of 1995................................................ 187
Government Management, Information, and Technology Subcommittee.. 189
1. Capital Budgeting....................................... 189
2. Integrity of Government Documents....................... 191
3. Federal Role in Privatization........................... 193
4. National Performance Review............................. 194
5. Strengthening Departmental Management................... 196
6. Consolidating Federal Programs and Organizations........ 197
7. Corporate Structures for Government Functions........... 199
8. Streamlining Federal Field Structures................... 201
9. Performance Measurement, Benchmarking, and Re-egineering 203
10. Agency Initiatives to Implement the Government
Performance and Results Act of 1993.................... 205
11. The General Services Administration's (GSA) Security
Measures at Federal Office Buildings................... 207
12. Controls Over Illegal Immigration--Along the Border and
Within the Interior.................................... 208
13. Budget and Financial Information--Annual Shareholders
Report: How Does the Citizen Know What is Going On?.... 209
14. The Inspector General Act of 1978...................... 211
15. Implementation of the Chief Financial Officers Act of
1990 and the Government Management Reform Act of 1994.. 213
16. Department of Defense's Financial Management Problems.. 215
17. Electronic Reporting Streamlining Act of 1995.......... 217
18. Use of Transportation by Senior Executive Branch
Officials in compliance with Federal Travel Guidelines. 218
19. The Government's Response to the Northridge Earthquake. 220
20. OMB 2000 Reforms: Where are they Heading?.............. 221
21. Using the Best Practices of Information Technology in
Government............................................. 223
22. Oversight of IRS Financial Management.................. 224
23. Is January 1, 2000 the Date for Computer Disaster?..... 226
24. Oversight of the General Accounting Office............. 228
25. Oversight of the General Services Administration....... 229
26. Federal Information Policy Oversight...................230230
27. Oil Royalties.......................................... 231
28. Field Hearing on the U.S. Border Patrol's Operation
Gatekeeper............................................. 232
29. Oversight of the Smithsonian Institution............... 234
Human Resources and Intergovernmental Relations Subcommittee..... 235
1. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Housing and
Urban Development (HUD)................................ 235
2. Efforts to Improve Program Performance and Efficiency at
the U.S. Department of Health and Human Services (HHS). 235
3. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Labor (DOL)... 236
4. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Education
(DOED)................................................. 237
5. Efforts to Reorganize and Improve Program Performance
and Efficiency at the U.S. Department of Veteran
Affairs (VA)........................................... 238
6. Examination of Programs and Operations of the
Corporation for National and Community Service......... 239
7. Revelations of Medicaid Fraud and Scams................. 240
8. Fraud and Abuse in Medicare and Medicaid................ 242
9. Lengthy FDA Delays in Reviewing Food Additive Petitions. 242
10. Bringing Health and Support Services to Women,
Minorities and Adolescents--Growing Segments of the
AIDS Population........................................ 243
11. Debating the Defining Federalism--the Sharing of Power
between the Federal Government and the States.......... 244
12. Joint Hearing on the FDA Regulation of Medical Devices,
including Silicone Gel Breast Implants................. 245
13. Federal Takeover of the Chicago Housing Authority...... 246
14. Management of Threats to the Nation's Blood Supply..... 247
15. The Occupational Safety and Health Administration's
(OSHA) New Strategy for Changing the Way it Does
Business............................................... 248
16. Management of U.S. Department of Housing and Urban
Development Funds in Public Housing Tenant Programs.... 249
17. Status of Major Computer System Development............ 250
18. Radioactive Contamination of 27 People, including
Researcher Dr. Maryann Ma, in June 1995 at the National
Institutes of Health (NIH)............................. 251
19. Unfunded Mandates in Medicaid.......................... 251
20. HUD Management of Tenant Initiative Programs........... 252
21. The Status of Efforts to Identify Persian Gulf War
Syndrome............................................... 253
22. Unfunded Mandates Reform Act of 1995: A One Year Review 256
23. Job Training That Works/Common Factors in Effective Job
Training Programs...................................... 257
24. Preventing Teen Pregnancy: Coordinating Community
Efforts................................................ 257
25. Food Safety: Oversight of the Food and Drug
Administration's Center for Veterinary Medicine........ 258
26. Food Safety: Monitoring of Food Borne Illnesses by the
Centers for Disease Control, Food and Drug
Administration and U.S. Department of Agriculture...... 259
27. The Development of Successful Public Housing Resident
Management (Field Hearing)............................. 260
28. Department of Education Oversight: Gatekeeping......... 260
29. Oversight of the Department of Labor's Efforts Against
Labor Racketeering..................................... 261
30. Oversight of the Department of Education and the
National Institute of Mental Health: Current Approaches
to Attention Deficit/Hyperactivity Disorders........... 262
31. Consumers and Health Informatics....................... 262
32. The Management of HUD's Section 8 Multi-Family Housing
Portfolio.............................................. 263
33. Off-Label Drug Use and FDA Review of Supplemental Drug
Applications........................................... 264
34. Investigation into Possible Misuse of ``New Age''
Training Programs by Federal Departments and Agencies.. 265
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 266
1. Grantee Lobbying........................................ 266
2. Investigation of Improper EPA Lobbying on Pending
Legislation............................................ 267
3. OSHA's Ergonomics Standards............................. 270
4. Improper FDA Rulemaking................................. 271
5. Regulatory Reform....................................... 273
6. Privatization of Sallie Mae and Connie Lee.............. 278
7. Mismanagement of Grants by the Environmental Protection
Agency................................................. 279
8. Investigation of the White House Database (WhoDB)....... 280
9. The Effects of a Minimum Wage Increase.................. 281
10. The Impact of Regulations on Employment................ 283
11. Travel Practices of Department of Transportation
Administrators......................................... 285
12. Travel Practices of SEC Chairman Arthur Levitt......... 287
13. Travel Practices of NTSB Chairman Jim Hall............. 288
14. Cleaning Up the Superfund Program...................... 288
15. Havertown Superfund Site............................... 292
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 294
1. Office of National Drug Control Policy.................. 294
2. Federal Law Enforcement Actions in Relation to the
Branch Davidian Compound in Waco, TX................... 318
3. The Bureau of Census and its planning for the 2000
Census................................................. 327
4. Counterterrorism Activities in the United States........ 329
5. Army Ranger Training Deaths of February 15, 1995........ 331
6. The Ballistic Missile Defense Program................... 332
7. National Drug Control Strategy.......................... 334
8. Department of Defense Bulk Fuel: Appropriations v. Usage 346
9. Oversight of the National Aeronautics and Space
Administration......................................... 348
10. INS.................................................... 350
Postal Service Subcommittee...................................... 358
1. General Oversight of the U.S. Postal Service: The
Postmaster General and the General Accounting Office... 358
2. General Oversight of the U.S. Postal Service: The Postal
Rate Commission........................................ 358
3. General Oversight of the U.S. Postal Service: The Board
of Governors........................................... 359
4. General Oversight of the U.S. Postal Service: Major
Mailing Customers...................................... 360
5. General Oversight of the U.S. Postal Service: Postal
Employee Unions and Organizations...................... 360
6. General Oversight of the U.S. Postal Service: Postal
Reliant Businesses and Competitors..................... 361
7. General Oversight Hearing on the Postal Service: Return
of the Postmaster General.............................. 361
8. General Oversight of the U.S. Postal Service: Postal
Service Inspector General.............................. 362
9. Review of International Mail Market..................... 362
10. General Oversight of the U.S. Postal Service: The Board
of Governors, the Postmaster General, the Postal Rate
Commission, the Chief Postal Inspector and the General
Accounting Office...................................... 363
11. Joint Hearing with the Senate Subcommittee on Post
Office and Civil Service, of the Committee on
Governmental Affairs on International Postal Reform.... 365
12. Postal Reform: H.R. 210, a bill to provide for the
Privatization of the United States Postal Service; H.R.
3717, the Postal Reform Act of 1996; H.R. 3690, the
Postal Service Core Business Act of 1996............... 366
13. Field Hearing on Chicago Mail Service and Postal
Operations............................................. 368
14. Qui Tam Provisions within the False Claims Act......... 369
15. USPS Contract for 8,879 Cargo Minivans................. 370
16. Review of Postal Service Bulk Business Mail Acceptance
Practices; Assessment of the Adequacy of the Postal
Service's Systems for Assessing, Collecting, and
Otherwise Protecting Revenue and/or Accountable Paper.. 371
17. Review of Selected Major Postal Service Procurements... 372
18. Evaluation of USPS Oversight of National Change of
Address Program Licensees.............................. 372
19. Final-Offer Arbitration as an Alternative Means of
Resolving Contract Disputes Between Postal Management
and Labor Unions....................................... 373
20. Review of the Quality and Quantity of Data Produced by
the Postal Service for the Rate Setting Process........ 374
21. Evaluation of the Management Practices, Working
Conditions, and Security at Postal facilities in
Southern California.................................... 374
22. Miscellaneous Investigative Issues..................... 375
23. Review of the Postal Service Board of Governors........ 376
24. Review of the Status of USPS Initiatives to Improve
Employee Working Conditions and Organizational
Performance............................................ 377
25. Continued Oversight of Internal Audits of the Existing
Inspector General...................................... 378
26. Oversight of the Implementation of the new Office of
Inspector General for the Postal Service as provided in
Public Law 104-208..................................... 379
27. Continued Oversight of Labor-Management Relations
within the Postal Service.............................. 380
28. Continuing Review of the Competitive Role of the U.S.
Postal Service......................................... 380
29. Continuing Review of Universal Mail Service and
Ratemaking in Canada................................... 381
30. Continuing Review of Mailing Costs for the Federal
Government............................................. 382
31. Continuing Review of Growth in Postal Service
Employment............................................. 382
32. Continuing Review of the Statutory Mail Box Restriction 383
33. Express Mail Accounts and Insufficient Controls for
Revenue Protection..................................... 383
34. Continuing Review of the role of the U.S. Postal
Service in the Electronic Information Age.............. 384
35. Review of Postal Inspection Service Investigations of
the Public Threat to the U.S. Mails in the Unabomber
Case................................................... 384
III. Legislation
a. new measures
Civil Service Subcommittee....................................... 385
1. H.R. 3586, Veterans' Employment Opportunities Act of
1996................................................... 385
2. H.R. 3481, Omnibus Civil Service Reform Act of 1996..... 385
3. S. 868, Federal Employees Emergency Leave Transfer Act.. 386
District of Columbia Subcommittee................................ 387
1. H.R. 1345, District of Columbia Financial Responsibility
and Management Assistance Act of 1995.................. 387
2. H.R. 2108, District of Columbia Convention Center and
Sports Arena Authorization Act of 1995................. 388
3. H.R. 2661, District of Columbia Fiscal Protection Act of
1995................................................... 389
4. H.R. 461, Closing of Lorton Correctional Complex........ 390
5. H.R. 1855, To amend Title 11, District of Columbia Code,
to restrict the authority of the Superior Court of the
District of Columbia over certain pending cases
involving child custody and visitation rights.......... 391
6. H.R. 3663, District of Columbia Water and Sewer
Authority Act of 1996.................................. 391
7. H.R. 3336, Bill granting the District of Columbia
temporary authority to waive reduction for early
retirement under the Civil Service Retirement System... 392
8. H.R. 3389, District of Columbia Pension Liability
Funding Reform Act of 1996............................. 393
9. H.R. 3664, District of Columbia Government Improvement
and Efficiency Act of 1996............................. 393
Government Management, Information, and Technology Subcommittee.. 393
1. H.R. 1271, Family Privacy Protection Act of 1995........ 393
2. H.R. 1756, The Department of Commerce Dismantling Act... 397
3. H.R. 2234, Debt Collection Improvement Act of 1995...... 399
4. H.R. 1162, Lockbox Deficit Reduction Proposals.......... 401
5. H.R. 1698, Mandatory Electronic Funds Transfer Expansion
Act of 1995............................................ 402
6. H.R. 1907, The Federal-aid Facility Privatization Act of
1995................................................... 402
7. H.R. 2521, the Statistical Consolidation Act of 1995.... 403
8. H.R. 3184, the Single Audit Act Amendments of 1996...... 405
9. H.R. 3869, the Electronic Reporting Streamlining Act of
1996................................................... 406
10. H.R. 3189, to delay privatization of the Office of
Federal Investigations of the Office of Personnel
Management............................................. 407
11. H.R. 1281, War Crimes Disclosure Act................... 408
12. H.R. 3802, Electronic Freedom of Information Amendments
of 1996................................................ 409
13. H.R. 3452, the Presidential and Executive Office
Accountability Act..................................... 410
14. H.R. 3872, the White House Inspector General Act of
1996................................................... 411
15. H.R. 3637, the Travel Reform and Savings Act of 1996... 412
16. S. 1130, Federal Financial Management Improvement Act
of 1996................................................ 413
17. Federal Budget Process Reform.......................... 414
18. Health Information Privacy Protection Act.............. 418
Human Resources and Intergovernmental Relations Subcommittee..... 419
1. H.R. 2086, the Local Empowerment and Flexibility Act of
1995................................................... 419
2. H.R. 2326, the Health Care Fraud and Abuse Prevention
Act of 1995 and H.R. 1850, the Health Care Fraud and
Abuse Act of 1995...................................... 420
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 421
1. H.R. 450, the Regulatory Transition Act of 1995......... 421
2. H.R. 994, the Regulatory Sunset and Review Act of 1995.. 423
3. Grantee Lobbying Legislation............................ 424
4. Corrections Day......................................... 424
Postal Service Subcommittee...................................... 424
1. H.R. 1026, To designate the United States Post Office
building located at 201 East Pikes Peak Avenue in
Colorado Springs, Colorado, as the ``Winfield Scott
Stratton Post Office''................................. 424
2. H.R. 2077, To designate the United States Post Office
building located at 33 College Avenue in Waterville,
Maine, as the ``George J. Mitchell Post Office
Building''............................................. 425
3. H.R. 1826, To repeal the authorization of transitional
appropriations for the United States Postal Service,
and for other purposes................................. 425
4. H.R. 210, A bill to provide for the privatization of the
United States Postal Service........................... 426
5. H.R. 1963, The Postmark Prompt Payment Act of 1995...... 426
6. H.R. 1398, To designate the United States Post Office
located at 1203 Lemay Ferry Road, St. Louis, Missouri
as the ``Charles J. Coyle Post Office Building''....... 427
7. H.R. 1606, To designate the United States Post Office
building located at 24 Corliss Street, Providence,
Rhode Island, as the ``Harry Kizirian Post Office
Building''............................................. 428
8. H.R. 1880, To designate the United States Post Office
located at 102 South McLean, Lincoln, Illinois as the
``Edward Madigan Post Office Building''................ 428
9. H.R. 2262, To designate the United States Post Office
located at 218 North Alston Street in Foley, Alabama as
the ``Holk Post Office Building''...................... 429
10. H.R. 2704, A bill to provide that the United States
Post Office building located on the 2600 block of East
75th Street in Chicago, Illinois shall be known as the
``Charles A. Hayes Post Office Building''.............. 429
11. H.R. 855, to designate the United States Post Office
Building located at 153 East 110th Street, New York,
New York, as the ``Oscar Garcia Rivera Post Office
Building''............................................. 430
12. H.R. 2700, a bill to designate the United States Post
Office Building located at 7980 FM 327, Elmendorf,
Texas, as the ``Amos F. Longoria Post Office Building'' 430
13. H.R. 3139, a bill to redesignate the United States Post
Office building located at 245 Centereach Mall on
Middle Country Road in Centereach, New York, as the
``Rose Y. Caracappa United States Post Office
Building''............................................. 431
14. H.R. 3768, a bill to designate a United States Post
Office to be located in Groton, Massachusetts, as the
``Augusta `Gusty' Hornblower United States Post
Office''............................................... 431
15. H.R. 3834, a bill to redesignate the Dunning Post
Office in Chicago, Illinois, as the ``Roger P.
McAuliffe Post Office''................................ 432
16. H.R. 3877, a bill to designate the United States Post
Office Building in Camden, Arkansas, as the ``Honorable
David H. Pryor Post Office Building''.................. 432
17. H.R. 3610, the Omnibus Appropriations Act of 1996...... 433
18. H.R. 3690, the Postal Service Core Business Act of 1996 433
19. H.R. 3717, the Postal Reform Act of 1996............... 434
b. review of laws within committee's jurisdiction
Full Committee................................................... 439
Civil Service Subcommittee....................................... 441
District of Columbia Subcommittee................................ 449
Government Management, Information, and Technology Subcommittee.. 450
Human Resources and Intergovernmental Relations Subcommittee..... 458
National Economic Growth, Natural Resources, and Regulatory
Affiars Subcommittee........................................... 459
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 461
Postal Service Subcommittee...................................... 462
IV. Other Current Activities
a. general accounting office reports
Civil Service Subcommittee....................................... 465
District of Columbia Subcommittee................................ 501
Government Management, Information, and Technology Subcommittee.. 503
Human Resources and Intergovernmental Relations Subcommittee..... 541
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 598
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 634
Postal Service Subcommittee...................................... 752
b. other reports and statements
District of Columbia Subcommittee................................ 759
Government Management, Information, and Technology Subcommittee.. 760
c. committee prints
Standing committee............................................... 764
Postal Service Subcommittee...................................... 764
V. Prior Activities of Current or Continuing Interest
District of Columbia Subcommittee................................ 767
Human Resources and Intergovernmental Relations Subcommittee..... 767
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee........................................... 768
National Security, International Affairs, and Criminal Justice
Subcommittee................................................... 769
Postal Service Subcommittee...................................... 770
Union Calendar No. 477
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-874
_______________________________________________________________________
ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
_______
January 2, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Clinger, from the Committee on Government Reform and Oversight,
submitted the following
REPORT
FINAL REPORT ON THE ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT, 104TH CONGRESS, 1ST AND 2D SESSIONS, 1995 AND
1996
PART ONE. GENERAL STATEMENT OF ORGANIZATION AND ACTIVITIES
I. Jurisdiction, Authority, Powers, and Duties
The Rules of the House of Representatives provide for
election by the House, at the commencement of each Congress, of
19 named standing committees, one of which is the Committee on
Government Reform and Oversight.\1\ Pursuant to House
Resolutions 11 and 12 (adopted January 5, 1995), and House
Resolution 13 (adopted January 5, 1995), House Resolution 31
(adopted January 9, 1995) the membership of the Committee on
Government Reform and Oversight was set at 50, including one
independent. Subsequently, the membership was increased to 51,
pursuant to House Resolution 157 (adopted May 25, 1995), on
June 13, 1995, membership increased to 52, pursuant to House
Resolution 166 (adopted June 13, 1995), on July 12, 1995,
membership was decreased to 51 pursuant to communication to
Speaker, and on July 12, 1995, membership was set at 52,
pursuant to House Resolution 186 (adopted July 12, 1995); on
February 28, 1996, membership was decreased to 51, pursuant to
communication to Speaker; on April 25, 1996, membership was
increased to 52, pursuant to House Resolution 414 (adopted
April 25, 1996); on June 25, 1996, membership was decreased to
51, pursuant to communication to Speaker; and on July 22, 1996,
membership was increased to 52, pursuant to House Resolution
485 (adopted July 22, 1996).
---------------------------------------------------------------------------
\1\ Rule X.
---------------------------------------------------------------------------
Rule X sets forth the committee's jurisdiction, functions,
and responsibilities as follows:
RULE X
Establishment and Jurisdiction of Standing Committees
the committees and their jurisdiction
1. There shall be in the House the following standing
committees, each of which shall have the jurisdiction and
related functions assigned to it by this clause and clauses 2,
3, and 4; and all bills, resolutions, and other matters
relating to subjects within the jurisdiction of any standing
committee as listed in this clause shall (in accordance with
and subject to clause 5) be referred to such committees, as
follows:
* * * * * * *
(g) Committee on Government Reform and Oversight
(1) The Federal Civil Service, including intergovernmental
personnel; the status of officers and employees of the United
States, including their compensation, classification, and
retirement.
(2) Measures relating to the municipal affairs of the
District of Columbia in general, other than appropriations.
(3) Federal paperwork reduction.
(4) Budget and accounting measures, other than
appropriations.
(5) Holidays and celebrations.
(6) The overall economy and efficiency of Government
operations and activities, including Federal procurement.
(7) National archives.
(8) Population and demography generally, including the
Census.
(9) Postal service generally, including the transportation
of the mails.
(10) Public information and records.
(11) Relationship of the Federal Government to the States
and municipalities generally.
(12) Reorganizations in the executive branch of the
Government.
In addition to its legislative jurisdiction under the
preceding provisions of this paragraph (and its oversight
functions under clause 2(b) (1) and (2)), the committee shall
have the function of performing the activities and conducting
the studies which are provided for in clause 4(c).
* * * * * * *
general oversight responsibilities
2. (a) In order to assist the House in--
(1) its analysis, appraisal, and evaluation of (A)
the application, administration, execution, and
effectiveness of the laws enacted by the Congress, or
(B) conditions and circumstances which may indicate the
necessity or desirability of enacting new or additional
legislation, and
(2) its formulation, consideration, and enactment of
such modifications of or changes in those laws, and of
such additional legislation, as may be necessary or
appropriate,
the various standing committees shall have oversight
responsibilities as provided in paragraph (b).
(b)(1) Each standing committee (other than the Committee on
Appropriations and the Committee on the Budget) shall review
and study, on a continuing basis, the application,
administration, execution, and effectiveness of those laws, or
parts of laws, the subject matter of which is within the
jurisdiction of that committee, and the organization and
operation of the Federal agencies and entities having
responsibilities in or for the administration and execution
thereof, in order to determine whether such laws and the
programs thereunder are being implemented and carried out in
accordance with the intent of the Congress and whether such
programs should be continued, curtailed, or eliminated. In
addition, each such committee shall review and study any
conditions or circumstances which may indicate the necessity or
desirability of enacting new or additional legislation within
the jurisdiction of that committee (whether or not any bill or
resolution has been introduced with respect thereto) and shall
on a continuing basis undertake future research and forecasting
on matters within the jurisdiction of that committee. Each such
committee having more than twenty members shall establish an
oversight subcommittee, or require its subcommittees, if any,
to conduct oversight in the area of their respective
jurisdiction, to assist in carrying out its responsibilities
under this subparagraph. The establishment of oversight
subcommittees shall in no way limit the responsibility of the
subcommittee with legislative jurisdiction from carrying out
their oversight responsibilities.
(2) The Committee on Government Reform and Oversight shall
review and study, on a continuing basis, the operation of
Government activities at all levels with a view to determining
their economy and efficiency.
* * * * * * *
(c) Each standing committee of the House shall have the
function of reviewing and studying on a continuing basis the
impact or probable impact of tax policies affecting subjects
within its jurisdiction as described in clauses 1 and 3.
* * * * * * *
additional functions of committees
4. * * *
(c)(1) The Committee on Government Reform and Oversight
shall have the general function of--
(A) receiving and examining reports of the
Comptroller General of the United States and of
submitting such recommendations to the House as it
deems necessary or desirable in connection with the
subject matter of such reports;
(B) evaluating the effects of laws enacted to
reorganize the legislative and executive branches of
the Government; and
(C) studying intergovernmental relationships between
the United States and the States, and municipalities,
and between the United States and international
organizations of which the United States is a member.
(2) In addition to its duties under subparagraph (1), the
Committee on Government Reform and Oversight may at any time
conduct investigations of any matter without regard to the
provisions of clause 1, 2, or 3 (or this clause) conferring
jurisdiction over such matter upon another standing committee.
The committee's findings and recommendations in any such
investigation shall be made available to the other standing
committee or committees having jurisdiction over the matter
involved (and included in the report of any such other
committee when required by clause 2(1)(3) of Rule XI).
* * * * * * *
Rule XI provides authority for investigations and studies,
as follows:
RULE XI
Rules of Procedure for Committees
in general
1. * * *
(b) Each committee is authorized at any time to consider
such investigations and studies as it may consider necessary or
appropriate in the exercise of its responsibilities under Rule
X, and (subject to the adoption of expense resolutions as
required by clause 5) to incur expenses (including travel
expenses) in connection therewith.
* * * * * * *
(d) Each committee shall submit to the House, not later
than January 2 of each odd-numbered year, a report on the
activities of that committee under this rule and Rule X during
the Congress ending at noon on January 3 of such year.
* * * * * * *
committee rules
* * * * * * *
Power to sit and act; subpoena power
(m)(1) For the purpose of carrying out any of its functions
and duties under this rule and Rule X (including any matters
referred to it under clause 5 of Rule X), any committee, or any
subcommittee thereof, is authorized (subject to subparagraph
(2)(A) of this paragraph)--
(A) to sit and act at such times and places within
the United States, whether the House is in session, has
recessed, or has adjourned, and to hold such hearings,
and
(B) to require, by subpoena or otherwise, the
attendance and testimony of such witnesses and the
production of such books, records, correspondence,
memorandums, papers, and documents as it deems
necessary.
The chairman of the committee, or any member designated by such
chairman, may administer oaths to any witness.
(2)(A) A subpoena may be authorized and issued by a
committee or subcommittee under subparagraph (1)(B) in the
conduct of any investigation or series of investigations or
activities, only when authorized by a majority of the members
voting, a majority being present. The power to authorize and
issue subpoenas under subparagraph (1)(B) may be delegated to
the chairman of the committee pursuant to such rules and under
such limitations as the committee may prescribe. Authorized
subpoenas shall be signed by the chairman of the committee or
by any member designated by the committee.
(B) Compliance with any subpoena issued by a committee or
subcommittee under subparagraph (1)(B) may be enforced only as
authorized or directed by the House.
Use of committee funds for travel
(n)(1) Funds authorized for a committee under clause 5 are
for expenses incurred in the committee's activities; however,
local currencies owned by the United States shall be made
available to the committee and its employees engaged in
carrying out their official duties outside the United States,
its territories or possessions. No appropriated funds,
including those authorized under clause 5, shall be expended
for the purpose of defraying expenses of members of the
committee or its employees in any country where local
currencies are available for this purpose; and the following
conditions shall apply with respect to travel outside the
United States or its territories or possessions:
(A) No Member or employee of the committee shall
receive or expend local currencies for subsistence in
any country for any day at a rate in excess of the
maximum per diem set forth in applicable Federal law,
or if the Member or employee is reimbursed for any
expenses for such day, then the lesser of the per diem
or the actual, unreimbursed expenses (other than for
transportation) incurred by the Member or employee
during that day.
(B) Each Member or employee of the committee shall
make to the chairman of the committee an itemized
report showing the dates each country was visited, the
amount of per diem furnished, the cost of
transportation furnished, any funds expended for any
other official purpose and shall summarize in these
categories the total foreign currencies and/or
appropriated funds expended. All such individual
reports shall be filed no later than sixty days
following the completion of travel with the chairman of
the committee for use in complying with reporting
requirements in applicable Federal law and shall be
open for public inspection.
(2) In carrying out the committee's activities outside of
the United States in any country where local currencies are
unavailable, a member or employee of the committee may not
receive reimbursement for expenses (other than for
transportation) in excess of the maximum per diem set forth in
applicable Federal law, or if the member or employee is
reimbursed for any expenses for such day, then the lesser of
the per diem or the actual, unreimbursed expenses (other than
for transportation) incurred, by the member or employee during
any day.
(3) A member or employee of a committee may not receive
reimbursement for the cost of any transportation in connection
with travel outside the United States unless the member or
employee has actually paid for the transportation.
(4) The restrictions respecting travel outside of the
United States set forth in subparagraphs (2) and (3) shall also
apply to travel outside of the United States by Members,
officers, and employees of the House authorized under clause 8
of rule I, clause 1(b) of this rule, or any other provision of
these Rules of the House of Representatives.
(5) No local currencies owned by the United States may be
made available under this paragraph for the use outside of the
United States for defraying the expenses of a member of any
committee after--
(A) the date of the general election of Members in
which the Member has not been elected to the succeeding
Congress; or
(B) in the case of a Member who is not a candidate in
such general election, the earlier of the date of such
general election or the adjournment sine die of the
last regular session of the Congress.
The committee also exercises authority under a number of
congressional mandates.\2\
---------------------------------------------------------------------------
\2\ For legislation imposing duties specifically on the committee,
see, for example, sec. 203(e)(6) of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 484(6)(e)), relating to
negotiated disposal of Federal surplus property. It requires that, with
limited exceptions, explanatory statements be sent ``to the appropriate
committees of the Congress'' in advance of negotiated disposal under
the act. It covers disposal of all real and personal property whose
estimated fair market is over $15,000 in the case of personal property
and over $100,000 in the case of real property. The current language
stems from a 1988 amendment (Public Law 100-612), which retained the
explanatory statement requirement but changed the dollar value
thresholds, which theretofore had been $1,000 for both personal
property and real property. The House and Senate Government Operations
Committees are expressly identified as the appropriate panels in House
Report 1763, 85th Congress, which accompanied the measure that
contained the 1958 amendment. See also GSA's Federal Property
Management Regulations at 41 CFR-47.304-12(d).
[N. B. The further examples given in the original footnote text
cover sections (section 414 of the 1969 Housing Act and section 304 of
the Intergovernmental Cooperation Act) have been repealed. The
reference to sections 191-194 of title 2, U.S.C., does not deem
pertinent here.]
---------------------------------------------------------------------------
5 U.S.C. sec. 2954
Information to committees of Congress on request
An Executive agency, on request of the Committee on
Government Operations of the House of Representatives or of any
seven members thereof, or on request of the Committee on
Government Operations of the Senate, or any five members
thereof, shall submit any information requested of it relating
to any matter within the jurisdiction of the committee.
18 U.S.C. sec. 1505
Obstruction of proceedings before departments, agencies, and committees
Whoever, with intent to avoid, evade, prevent, or obstruct
compliance, in whole or in part, with any civil investigation
demand duly and properly made under the Antitrust Civil Process
Act, willfully withholds, misrepresents, removes from any
place, conceals, covers up, destroys, mutilates, alters, or by
other means falsifies any documentary material, answers to
written interrogatories, or oral testimony, which is the
subject of such demand; or attempts to do so or solicits
another to do so; or
Whoever corruptly, or by threats or force, or by any
threatening letter or communication influences, obstructs, or
impedes or endeavors to influence, obstruct, or impede the due
and proper administration of the law under which any pending
proceeding is being had before any department or agency of the
United States, or the due and proper exercise of the power of
inquiry under which any inquiry or investigation is being had
by either House, or any committee of either House or any joint
committee of the Congress--
Shall be fined not more than $5,000 or imprisoned not more
than five years, or both.
31 U.S.C. sec. 712
Investigating the use of public money
The Comptroller General shall--
* * * * * * *
(3) analyze expenditures of each executive agency the
Comptroller General believes will help Congress decide whether
public money has been used and expended economically and
efficiently;
(4) make an investigation and report ordered by either
House of Congress or a committee of Congress having
jurisdiction over revenue, appropriations, or expenditures; and
(5) give a committee of Congress having jurisdiction over
revenue, appropriations, or expenditures the help and
information the committee requests.
31 U.S.C. sec. 719
Comptroller General reports
* * * * * * *
(e) The Comptroller General shall report on analyses
carried out under section 712(3) of this title to the
Committees on Governmental Affairs and Appropriations of the
Senate, the Committee on Government Operations and
Appropriations of the House, and the committees with
jurisdiction over legislation related to the operation of each
executive agency.\3\
---------------------------------------------------------------------------
\3\ For other requirements which relate to General Accounting
Office reports to Congress and which affect the committee, see secs.
232 and 236 of the Legislative Reorganization Act of 1970 (Public Law
91-510).
II. Historical Background
The committee was initially named the ``Committee on
Expenditures in the Executive Departments.'' Its antecedents
are summarized in Cannon's Precedents of the House of
Representatives, vol. VII, sec. 2041, p. 831 (1935), as
follows:
This committee was created, December 5, 1927, by the
consolidation of the eleven Committees on Expenditures
in the various Departments of the Government, the
earliest of which has been in existence since 1816. As
adopted in 1816, the rule did not include the
committees for the Departments of Interior, Justice,
Agriculture, Commerce, and Labor. The committees for
these Departments date, respectively, from 1860, 1874,
1889, 1905 and 1913.
The resolution providing for the adoption of the rules of
the 70th Congress discontinued the several committees on
expenditures and transferred their functions to the newly
created Committee on Expenditures in the Executive Departments:
On March 17, 1928, the jurisdiction of the committee
was further enlarged by the adoption of a resolution,
reported from the Committee on Rules, including within
its jurisdiction the independent establishments and
commissions of the Government.\4\
---------------------------------------------------------------------------
\4\ Examples of the wide-ranging scope of the committee's
jurisdiction may be found in Cannon's Precedents, supra VII, secs.
2042-2046, pp. 831-833 (1935).
---------------------------------------------------------------------------
From 1928 until January 2, 1947, when the Legislative
Reorganization Act of 1946 became effective, the committee's
jurisdiction was set forth in Rule XI, 34, of the House Rules
then in force (H. Doc. 810, 78th Cong., 2d Sess. (1945)), as
follows:
powers and duties of committees
* * * * * * *
34. The examination of the account and expenditures of the
several departments, independent establishments, and
commissions of the Government, and the manner of keeping the
same; the economy, justness, and correctness of such
expenditures; their conformity with appropriation laws; the
proper application of public moneys; the security of the
Government against unjust and extravagant demands;
retrenchment; and enforcement of the payment of moneys due the
United States; the economy and accountability of public
officers; the abolishment of useless offices, shall all be
subjects within the jurisdiction of the Committee on
Expenditures in the Executive Departments.
The Legislative Reorganization Act of 1946, section 121(b),
as adopted in paragraphs (a), (b), and (c) of Rule XI, 8, of
later Rules of the House (XI, 9, the 93d Congress), provided:
committee on government operations
(a) Budget and accounting measures, other than
appropriations.
(b) Reorganizations in the executive branch of Government.
(c) Such committee shall have the duty of--
(1) receiving and examining reports of the
Comptroller General of the United States and of
submitting such recommendations to the House as it
deems necessary or desirable in connection with the
subject matter of such reports;
(2) studying the operation of Government activities
at all levels with a view to determining the economy
and efficiency;
(3) evaluating the effects of laws enacted to
reorganize the legislative and executive branches of
the Government;
(4) studying intergovernmental relationships between
the United States and the States and municipalities,
and between the United States and international
organizations of which the United States is a member.
(d) For the purpose of performing such duties the
committee, or any subcommittee thereof when authorized by the
committee, is authorized to sit, hold hearings, and act at such
times and places within the United States, whether or not the
House is in session, is in recess, or has adjourned, to require
by subpoena or otherwise the attendance of such witnesses and
the production of such papers, documents, and books, and to
take such testimony as it deems necessary. Subpoenas may be
issued under the signature of the chairman of the committee or
of any subcommittee, or by any member designated by any such
chairman, and may be served by any person designated by any
such chairman or member.\5\
---------------------------------------------------------------------------
\5\ Paragraph (d) was adopted by the House Feb. 10, 1947.
---------------------------------------------------------------------------
Rule X, 1(h), of later Rules of the House, effective
January 3, 1975 (H. Res. 988, 93d Congress), added the
additional jurisdiction of general revenue sharing (formerly
within the jurisdiction of the Committee on Ways and Means),
and the National Archives (formerly within the jurisdiction of
the Committee on Post Office and Civil Service).
Rule X, 1(j)(6), of later Rules of the House listed the
additional jurisdiction of measures providing for off-budget
treatment of Federal agencies or programs, which was added by
sec. 225 of Public Law 99-177, the Balanced Budget and
Emergency Deficit Control Act of 1985 (December 12, 1985).
The 1946 act contained the following proviso:
Provided: That unless otherwise provided herein, any
matter within the jurisdiction of a standing committee
prior to January 2, 1947, shall remain subject to the
jurisdiction of that committee or of the consolidated
committee succeeding to the jurisdiction of that
committee.
This proviso was omitted from the Rules of the House adopted
January 3, 1954.\6\
---------------------------------------------------------------------------
\6\ H. Res. 5, 83d Cong. (99 Cong. Rec. 15). Cf. rules in H. Doc.
562, 82d Congress, 2d session p. 328 and in H. Doc. 739, 81st Congress,
2d session, p. 326.
---------------------------------------------------------------------------
Under the Constitution (Art. I, sec. 5, cl. 2), ``Each
House may determine the Rules of its Proceedings.'' Omission of
the proviso made no substantive change, since the scope of the
committee's jurisdiction prior to January 2, 1947, was embraced
within the committee's jurisdiction as stated in existing rules
and precedents.
The committee's membership, which was fixed at 21 when it
was consolidated on December 5, 1927, was increased to 25 when
the Legislative Reorganization Act of 1946 became effective on
January 2, 1947. In 1951, the committee's membership was
increased to 27.\7\ From 1953 until January 1963, the
committee's membership remained at 30.\8\
---------------------------------------------------------------------------
\7\ H. Res. 60, 83d Congress, 1st session (97 Cong. Rec. 194).
\8\ H. Res. 98, 83d Cong. (99 Cong. Rec. 436); H. Res. 94, 84th
Cong. (101 Cong. Rec. 484); H. Res. 89, 85th Cong. (103 Cong. Rec.
412); H. Res. 120, 86th Cong. (105 Cong. Rec. 841); H. Res. 137, 87th
Cong. (107 Cong. Rec. 1677).
---------------------------------------------------------------------------
Pursuant to H. Res. 108, 88th Congress, adopted January 17,
1963, the committee was enlarged to 31 members. In the 89th
Congress the membership of the committee was increased to 34
through passage of H. Res. 114, January 14, 1965. The committee
membership in the 90th and 91st Congresses of 35 was first
established by H. Res. 128, 90th Congress, approved January 16,
1967. The committee membership in the 92d Congress of 39 was
established by H. Res. 192, approved February 4, 1971. It was
raised to 41 by H. Res. 158, adopted January 24, 1973. The
committee membership of 42 was established by H. Res. 1238,
adopted July 17, 1974. It was increased to 43 by H. Res. 76 and
101, adopted January 20 and 28, 1975. Membership was maintained
at 43 in the 95th Congress by H. Res. 117 and 118, adopted
January 19, 1977. The committee membership was set at 39 in the
96th Congress by H. Res. 62 and 63, adopted January 24, 1979.
The committee membership was set at 40 in the 97th Congress by
H. Res. 44 and 45, adopted January 28, 1981. The committee size
was increased to 41 by the adoption of H. Res. 370 on February
24, 1982. Pursuant to House Res. 26 and 27, adopted January 6,
1983, the committee membership for the 98th Congress was set at
39.
In the 99th Congress, the membership of the committee was
set at 39, pursuant to House Res. 34 and 35, adopted January
30, 1985.
In the 100th Congress, the membership of the committee was
set at 39, pursuant to House Res. 45 and 54, adopted January 21
and 22, 1987, respectively.
The committee membership in the 101st Congress was
established at 39 by H. Res. 29 and H. Res. 45, adopted January
19 and 20, 1989. In the 102d Congress, the membership of the
committee was set at 41, pursuant to H. Res. 43, 44, and 45,
adopted January 24, 1991. The committee membership was set at
42 in the 103d Congress by adoption of H. Res. 8 and 9 on
January 5, 1993; H. Res. 34 on January 21, 1993; H. Res. 67 on
February 4, 1993; and H. Res. 92 and 93 on February 18, 1993.
The membership was increased to 44 by the adoption of H. Res.
185 on May 26, 1993 and H. Res. 219 on July 21, 1993. Beginning
September 28, 1949, the moneys appropriated to the committee
were, by House resolution in each session of Congress,
available for expenses incurred in conducting studies and
investigations authorized under Rule XI, whether made within or
without the United States.\9\ In the 103d Congress, these
matters are covered in paragraph (b) of clause 1 of Rule XI, as
set forth above and by clause 5 of Rule XI. The funds for the
committee's studies and oversight function during the first
session of the 103d Congress were provided by H. Res. 107
adopted March 30, 1993 (H. Rept. 103-38).
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\9\ See items under (1) in footnote 3, of the final calendar of the
committee for the 93d Congress (Dec. 31, 1974).
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The committee's name was changed to ``Committee on
Government Operations'' by House resolution adopted July 3,
1952.\10\ The Congressional Record indicates the reasons
underlying that change in name were, in part, as follows: \11\
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\10\ H. Res. 647, 82d Cong. (98 Cong. Rec. 9217). The Senate had
made a similar change of name on Mar. 3, 1952, after conference between
the chairman of the House and Senate Committees on Expenditures in the
Executive Departments to ensure both Houses would adopt the change in
name. S. Res. 280, 82d Cong. (98 Cong. Rec. 1701-1702). See also S.
Rept. No. 1231, 80th Congress, 2d Session, p. 3 (May 3, 1948).
\11\ Letter of Feb. 19, 1952, from the chairman, Senate Committee
on Expenditures in the Executive Departments, Senator McCellan to
Senator Hayden (98 Cong. Rec. 1702).
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This committee is proposing the indicated change in
the present title, in view of the fact that it is
misleading and the committees' functions and duties are
generally misunderstood by the public.
* * * * * * *
In suggesting the proposed change the committee based its
decision on what it considers to be the major or primary
function of the committee under the prescribed duties assigned
to it to study ``the operations of Government activities at all
levels with a view to determining its economy and efficiency.''
It was the unanimous view of the members of the committee that
the proposed new title would be more accurate in defining the
purposes for which the committee was created and in clearly
establishing the major purpose it serves.
On January 4, 1995, the 104th Congress opened with a
Republican majority for the first time in 40 years. The shift
in power from Democrats to Republicans has resulted in a
realignment of the legislative priorities and committee
structure of the House of Representatives. Perhaps more than
any other committee, the Government Reform and Oversight
Committee embodies the changes taking place in the House of
Representatives. The committee itself was created by
consolidating three committees into one, resulting in budget
and staff cuts of nearly 50 percent. The committees that were
merged include the Committee on Government Operations, the
Committee on the Post Office and Civil Service, and the
Committee on the District of Columbia.
In order to fulfill the Republican Contract with America,
the committee held a record number of hearings and mark-ups,
and members cast more votes during this 100 day period than in
any of the previous committees' histories. Over the course of
the first session, 295 bills and resolutions were referred to
the committee and its subcommittees, and 180 hearings and mark-
ups were held. Five of these measures have been signed into
law.
In addition to its greatly expanded legislative
jurisdiction, the Government Reform and Oversight Committee
serves as the chief investigative committee of the House, with
the authority to conduct governmentwide oversight. Because the
committee only authorizes money for a small number of Federal
agencies and programs, it is able to review government
activities with an independent eye.
III. Organization
A. SUBCOMMITTEES \12\
In the 104th Congress, significant steps were taken to
reduce the number of committees, subcommittees, and the number
of congressional staff. As a result, the Congress eliminated
the District of Columbia Committee and the Post Office and
Civil Service Committee. The jurisdiction of these committees
were merged into the Government Operations Committee and its
name was changed to the Committee on Government Reform and
Oversight.
---------------------------------------------------------------------------
\12\ The chairman and the ranking minority member of the committee
are ex-officio members of all subcommittees on which they do not hold a
regular assignment (committee Rule 9).
---------------------------------------------------------------------------
In order to perform its functions and to carry out its
duties as fully and as effectively as possible, the committee
under the leadership of its chairman, Hon. William F. Clinger,
Jr., of Pennsylvania, at the beginning of the 104th Congress,
established seven standing subcommittees, which cover the
entire field of executive expenditures and operations. The
names, chairpersons, and members of these subcommittees are as
follows:
Civil Service Subcommittee, John Mica, Chairman;
members: Charles Bass, Ben Gilman, Dan Burton, Connie
Morella, James Moran, Bernard Sanders, and Tim Holden.
District of Columbia Subcommittee, Tom Davis,
Chairman; members: Gil Gutknecht, John M. McHugh, Steve
LaTourette, Michael P. Flanagan, Eleanor Holmes Norton,
Barbara-Rose Collins, and Edolphus Towns.
Government Management, Information, and Technology
Subcommittee, Stephen Horn, Chairman; members: Michael
P. Flanagan, Peter Blute, Tom Davis, Jon Fox, Randy
Tate, Joe Scarborough, Charles Bass, Carolyn Maloney,
Major Owens, John Spratt, Paul Kanjorski, Collin
Peterson, and Tim Holden.
Human Resources and Intergovernmental Relations
Subcommittee, Christopher Shays, Chairman; members:
Mark Souder, Steven Schiff, Connie Morella, Tom Davis,
Dick Chrysler, Bill Martini, Joe Scarborough, Mark
Sanford, Edolphus Towns, Tom Lantos, Bernard Sanders,
Thomas Barrett, Gene Green, Chaka Fattah, and Henry
Waxman.
National Economic Growth, Natural Resources, and
Regulatory Affairs Subcommittee, David McIntosh,
Chairman; members: Jon Fox, J. Dennis Hastert, John M.
McHugh, Randy Tate, Gil Gutknecht, Joe Scarborough,
John Shadegg, Bob Ehrlich, Collin Peterson, Henry
Waxman, John Spratt, Louise M. Slaughter, Paul
Kanjorski, Gary Condit, and Carrie Meek.
National Security, International Affairs, and
Criminal Justice Subcommittee, William H. Zeliff, Jr.,
Chairman; members: Bob Ehrlich, Steven Schiff, Illeana
Ros-Lehtinen, John Mica, Peter Blute, Mark Souder, John
Shadegg, Karen Thurman, Robert Wise, Gene Taylor, Tom
Lantos, Louise M. Slaughter, Gary Condit, Bill K.
Brewster, and Elijah Cummings.
Postal Service Subcommittee, John M. McHugh,
Chairman; members: Mark Sanford, Ben Gilman,
Christopher Shays, David McIntosh, Bob Ehrlich,
Barbara-Rose Collins, Major Owens, Gene Green, and
Carrie Meek.
B. RULES OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
Rule XI, 1(a)(1) of the House of Representatives provides:
The Rules of the House are the rules of its
committees and subcommittees so far as applicable,
except that a motion to recess from day to day, and a
motion to dispense with the first reading (in full) of
a bill or resolution, if printed copies are available,
are nondebatable motions of high privilege in
committees and subcommittees.
Rule XI, 2(a) of the House of Representatives provides, in
part:
Each standing committee of the House shall adopt
written rules governing its procedures.
In accordance with the foregoing, the Committee on
Government Reform and Oversight, on January 10, 1995, adopted
the rules of the committee. The rules read as follows:
Rule 1.--Application of Rules
Except where the terms ``full committee'' and
``subcommittee'' are specifically referred to, the following
rules shall apply to the Committee on Government Reform and
Oversight and its subcommittees as well as to the respective
chairmen.
[See House Rule XI, 1.]
Rule 2.--Meetings
The regular meetings of the full committee shall be held on
the second Tuesday of each month at 10:00 a.m., unless when
Congress has adjourned. The chairman is authorized to dispense
with a regular meeting or to change the date thereof, and to
call and convene additional meetings, when circumstances
warrant. A special meeting of the committee may be requested by
members of the committee following the provisions of House Rule
XI, 2(c)(2). Subcommittees shall meet at the call of the
subcommittee chairmen. Every member of the committee or the
appropriate subcommittee, unless prevented by unusual
circumstances, shall be provided with a memorandum at least
three calendar days before each meeting or hearing explaining
(1) the purpose of the meeting or hearing; and (2) the names,
titles, background and reasons for appearance of any witnesses.
The ranking minority member shall be responsible for providing
the same information on witnesses whom the minority may
request.
[See House Rule XI, 2(b).]
Rule 3.--Quorums
A majority of the members of the committee shall form a
quorum, except that two members shall constitute a quorum for
taking testimony and receiving evidence, and one-third of the
members shall form a quorum for taking any action other than
the reporting of a measure or recommendation. If the chairman
is not present at any meeting of the committee or subcommittee,
the ranking member of the majority party on the committee or
subcommittee who is present shall preside at that meeting.
[See House Rule XI, 2(h).]
Rule 4.--Committee Reports
Bills and resolutions approved by the committee shall be
reported by the chairman following House Rule XI, 2(l).
Every investigative report shall be approved by a majority
vote of the committee at a meeting at which a quorum is
present. Supplemental, minority, or additional views may be
filed following House Rule XI, 2(l)(5). The time allowed for
filing such views shall be three calendar days (excluding
Saturdays, Sundays, and legal holidays) unless the committee
agrees to a different time, but agreement on a shorter time
shall require the concurrence of each member seeking to file
such views. A proposed report shall not be considered in
subcommittee or full committee unless the proposed report has
been available to the members of such subcommittee or full
committee for at least three calendar days (excluding
Saturdays, Sundays, and legal holidays) before the
consideration of such proposed report in subcommittee or full
committee. If hearings have been held on the matter reported
upon, every reasonable effort shall be made to have such
hearings available to the members of the subcommittee or full
committee before the consideration of the proposed report in
such subcommittee or full committee.
Only those reports approved by a majority vote of the
committee may be ordered printed, unless otherwise required by
the Rules of the House of Representatives.
Rule 5.--Proxy Votes
In accordance with the Rules of the House of
Representatives, members may not vote by proxy on any measure
or matter before the committee or any subcommittee.
[See House Rule XI, 2(f).]
Rule 6.--Roll Calls
A roll call of the members may be had upon the request of
any member upon approval of a one-fifth vote.
[See House Rule XI, 2(e).]
Rule 7.--Record of Committee Actions
The committee staff shall maintain in the committee offices
a complete record of committee actions from the current
Congress including a record of the rollcall votes taken at
committee business meetings. The original records, or true
copies thereof, as appropriate, shall be available for public
inspection whenever the committee offices are open for public
business. The staff shall assure that such original records are
preserved with no unauthorized alteration, additions, or
defacement.
[See House Rule XI, 2(e).]
Rule 8.--Subcommittees; Referrals
There shall be seven subcommittees with appropriate party
ratios that shall have fixed jurisdictions. Bills, resolutions,
and other matters shall be referred by the chairman to
subcommittees within two weeks for consideration or
investigation in accordance with their fixed jurisdictions.
Where the subject matter of the referral involves the
jurisdiction of more than one subcommittee or does not fall
within any previously assigned jurisdiction, the chairman shall
refer the matter as he may deem advisable. Bills, resolutions,
and other matters referred to subcommittees may be reassigned
by the chairman when, in his judgment, the subcommittee is not
able to complete its work or cannot reach agreement therein. In
a subcommittee having an even number of members, if there is a
tie vote with all members voting on any measure, the measure
shall be placed on the agenda for full committee consideration
as if it had been ordered reported by the subcommittee without
recommendation. This provision shall not preclude further
action on the measure by the subcommittee.
[See House Rule XI, 1(a)(2).]
Rule 9.--Ex Officio Members
The chairman and the ranking minority member of the
committee shall be ex officio members of all subcommittees.
They are authorized to vote on subcommittee matters; but,
unless they are regular members of the subcommittee, they shall
not be counted in determining a subcommittee quorum other than
a quorum for taking testimony.
Rule 10.--Staff
Except as otherwise provided by House Rule XI, 5 and 6, the
chairman of the full committee shall have the authority to hire
and discharge employees of the professional and clerical staff
of the full committee and of subcommittees.
Rule 11.--Staff Direction
Except as otherwise provided by House Rule XI, 5 and 6, the
staff of the committee shall be subject to the direction of the
chairman of the full committee and shall perform such duties as
he may assign.
Rule 12.--Hearing Dates and Witnesses
The chairman of the full committee will announce the date,
place, and subject matter of all hearings at least one week
before the commencement of any hearings, unless he determines
that there is good cause to begin such hearings sooner. So that
the chairman of the full committee may coordinate the committee
facilities and hearing plans, each subcommittee chairman shall
notify him of any hearing plans at least two weeks before the
date of commencement of hearings, including the date, place,
subject matter, and the names of witnesses, willing and
unwilling, who would be called to testify, including, to the
extent he is advised thereof, witnesses whom the minority
members may request. The minority members shall supply the
names of witnesses they intend to call to the chairman of the
full committee or subcommittee at the earliest possible date.
Witnesses appearing before the committee shall, so far as
practicable, submit written statements at least 24 hours before
their appearance.
[See House Rules XI, 2 (g)(3), (g)(4), (j), and (k).]
Rule 13.--Open Meetings
Meetings for the transaction of business and hearings of
the committee shall be open to the public or closed in
accordance with Rule XI of the House of Representatives.
[See House Rules XI, 2 (g) and (k).]
Rule 14.--Five-Minute Rule
A committee member may question a witness only when
recognized by the chairman for that purpose. In accordance with
House Rule XI, 2(j)(2), each committee member may request up to
five minutes to question a witness until each member who so
desires has had such opportunity. Until all such requests have
been satisfied, the chairman shall, so far as practicable,
recognize alternately based on seniority of those majority and
minority members present at the time the hearing was called to
order and others based on their arrival at the hearing. After
that, additional time may be extended at the direction of the
chairman.
Rule 15.--Investigative Hearings; Procedure
Investigative hearings shall be conducted according to the
procedures in House Rule XI, 2(k). All questions put to
witnesses before the committee shall be relevant to the subject
matter before the committee for consideration, and the chairman
shall rule on the relevance of any questions put to the
witness.
Rule 16.--Stenographic Record
A stenographic record of all testimony shall be kept of
public hearings and shall be made available on such conditions
as the chairman may prescribe.
Rule 17.--TV, Radio, and Photographs
An open meeting or hearing of the committee or a
subcommittee may be covered, in whole or in part, by television
broadcast, radio broadcast, and still photography, or by any of
such methods of coverage, unless closed subject to the
provisions of House Rule XI, 3.
Rule 18.--Additional Duties of Chairman
The chairman of the full committee shall:
(a) Make available to other committees the findings
and recommendations resulting from the investigations
of the committee or its subcommittees as required by
House Rule X, 4(c)(2);
(b) Direct such review and studies on the impact or
probable impact of tax policies affecting subjects
within the committee's jurisdiction as required by
House Rule X, 2(c);
(c) Submit to the Committee on the Budget views and
estimates required by House Rule X, 4(g), and to file
reports with the House as required by the Congressional
Budget Act;
(d) Authorize and issue subpoenas as provided in
House Rule XI, clause 2(m), in the conduct of any
investigation or activity or series of investigations
or activities within the jurisdiction of the committee;
and
(e) Prepare, after consultation with subcommittee
chairmen and the minority, a budget for the committee
which shall include an adequate budget for the
subcommittees to discharge their responsibilities.
(f) Make any necessary technical and conforming
changes to legislation reported by the committee upon
unanimous consent.
Rule 19.--Special Affidavits and Depositions
If the House provides the committee with authority to take
affidavits and depositions, the following rules apply:
(a) The Chairman, upon consultation with the ranking
minority member or the committee, may authorize the
taking of affidavits, and of depositions pursuant to
notice or subpoena. Such authorization may occur on a
case-by-case basis, or by instructions to take a series
of affidavits or depositions. Notices for the taking of
depositions shall specify a time and place for
examination. Affidavits and depositions shall be taken
under oath administered by a member or a person
otherwise authorized by law to administer oaths.
Consultation with the ranking minority member will
include three (3) business days written notice before
any deposition is taken, unless otherwise agreed to by
the ranking minority member or committee.
(b) The committee shall not initiate procedures
leading to contempt proceedings in the event a witness
fails to appear at a deposition unless the deposition
notice was accompanied by a committee subpoena
authorized and issued by the chairman. Notwithstanding
committee Rule 18(d), the chairman shall not authorize
and issue a subpoena for a deposition without the
concurrence of the ranking minority member or the
committee.
(c) Witnesses may be accompanied at a deposition by
counsel to advise them of their constitutional rights.
Absent special permission or instructions from the
chairman, no one may be present in depositions except
members, staff designated by the chairman or ranking
minority member, an official reporter, the witness and
any counsel; observers or counsel for other persons or
for the agencies under investigation may not attend.
(d) A deposition will be conducted by members or
jointly by--
(1) No more than two staff members of the
committee, of whom--
(A) One will be designated by the
chairman of the committee, and
(B) One will be designated by the
ranking minority party member of the
committee, unless such member elects
not to designate a staff member.
(2) Any member designated by the chairman.
Other staff designated by the chairman or
ranking minority member may attend, but are not
permitted to pose questions to the witness.
(e) Questions in the deposition will be propounded in
rounds. A round will include as much time as necessary
to ask all pending questions, but not more than one
hour. In each round, the member or staff member
designated by the chairman will ask questions first,
and the member or staff member designated by the
ranking minority member will ask questions second.
(f) Objections by the witness as to the form of
questions shall be noted for the record. If a witness
objects to a question and refuses to answer, the
members or staff may proceed with the deposition, or
may obtain, at that time or at a subsequent time, a
ruling on the objection by telephone or otherwise from
the chairman or his designee. The committee shall not
initiate procedures leading to contempt for refusals to
answer questions at a deposition unless the witness
refuses to testify after his objection has been
overruled and after he has been ordered and directed to
answer by the chairman or his designee upon a good
faith attempt to consult with the ranking minority
member or her designee.
(g) The committee staff shall insure that the
testimony is either transcribed or electronically
recorded, or both. If a witness' testimony is
transcribed, he shall be furnished with an opportunity
to review a copy. No later than five days thereafter,
the staff shall enter the changes, if any, requested by
the witness, with a statement of the witness' reasons
for the changes, and the witness shall be instructed to
sign the transcript. The individual administering the
oath, if other than a member, shall certify on the
transcript that the witness was duly sworn in his
presence, the transcriber shall certify that the
transcript is a true record of the testimony, and the
transcript shall be filed, together with any electronic
recording, with the clerk of the committee in
Washington, D.C. Affidavits and depositions shall be
deemed to have been taken in Washington, D.C. once
filed there with the clerk of the committee for the
committee's use. The ranking minority member will be
provided a copy of the transcripts of the deposition
once the procedures provided above have been completed.
(h) Unless otherwise directed by the committee, all
depositions and affidavits received in the
investigation shall be considered nonpublic until
received by the committee. Once received by the
committee, use of such materials shall be governed by
the committee rules. All such material shall unless
otherwise directed by the committee, be available for
use by the members of the committee in open session.
(i) A witness shall not be required to testify if
they have not been provided a copy of the House
Resolution and the amended committee Rules.
(j) Committee Rule 19 expires on July 8, 1996.
IV. Activities, 104th Congress
SUMMARY
1. In the 104th Congress, the committee approved and
submitted to the House of Representatives 19 investigative
reports. In addition, the committee issued 15 committee prints.
2. In the 104th Congress, 436 bills and resolutions were
referred to the committee and studied. Of these, the committee
reported 42. In addition, 14 Memorials, 4 Petitions, and 8
Presidential messages were referred to the committee.
3. Pursuant to its duty of studying reports of the
Comptroller General, the committee received officially and
studied 1,536 such reports during the 104th Congress. In
addition, 1,237 executive communications, were referred to the
committee under clause 2 of rule XXIV of the House of
Representatives.
4. The full committee met 43 days during the 104th
Congress, while the subcommittees met a total of 270 days in
public hearings, markups, and meetings.
The significant actions taken by the committee with respect
to these and a considerable number of other matters are
discussed in detail below.
A. INVESTIGATIVE REPORTS
During the 104th Congress, the Committee on Government
Reform and Oversight approved and submitted to the Congress 19
reports of an investigative nature.
For convenience, the published reports are listed here with
the names of the originating subcommittees. A more detailed
discussion of the material will be found in part two below in
the breakdown of the committee's activities by subcommittee:
First Report (H. Rept. 104-156): ``A Citizen's Guide
on Using the Freedom of Information Act and the Privacy
Act of 1974 to Request Government Records.''
Second Report (H. Rept. 104-434): ``Creating a 21st
Century Government.'' *
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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Third Report (H. Rept. 104-435): ``Making Government
Work; Fulfilling the Mandate for Change.'' *
(Subcommittee on Government Management, Information,
and Technology)
Fourth Report (H. Rept. 104-436): ``The FDA Food
Additive Review Process: Backlog and Failure to Observe
Statutory Deadlines.'' * (Subcommittee on Human
Resources and Intergovernmental Relations)
Fifth Report (H. Rept. 104-437): ``The Federal
Takeover of the Chicago Housing Authority--HUD Needs to
Determine Long-Term Implications.'' * (Subcommittee on
Human Resources and Intergovernmental Relations)
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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Sixth Report (H. Rept. 104-438): ``Voices for
Change.'' (Subcommittee on the Postal Service)
Seventh Report (H. Rept. 104-486): ``National Drug
Policy: A Review of the Status of the Drug War.''*
(Subcommittee on National Security, International
Affairs, and Criminal Justice)
Eighth Report (H. Rept. 104-641): ``Fraud and Abuse
in Medicare and Medicaid: Stronger Enforcement and
Better Management Could Save Billions.''* (Subcommittee
on Human Resources and Intergovernmental Relations)
Ninth Report (H. Rept. 104-745): ``Laws Related to
Federal Financial Management As Amended Through
December 31, 1995.''
Tenth Report (H. Rept. 104-746): ``Protecting the
Nation's Blood Supply From Infectious Agents: The Need
For New Standards to Meet New Threats''* (Subcommittee
on Human Resources and Intergovernmental Relations)
Eleventh Report (H. Rept. 104-747): ``Health Care
Fraud: All Public and Private Payers Need Federal
Criminal Anti-Fraud Protection.'' (Subcommittee on
Human Resources and Intergovernmental Relations)
Twelfth Report (H. Rept. 104-748): ``A Two-Year
Review of the White House Communications Agency Reveals
Major Mismanagement, Lack of Accountability, and
Significant Mission Creep.''* (Subcommittee on National
Security, International Affairs, and Criminal Justice)
Thirteenth Report (H. Rept. 104-749): ``Investigation
into the Activities of Federal Law Enforcement Agencies
Toward the Branch Davidians.''* (Subcommittee on
National Security, International Affairs, and Criminal
Justice prepared in conjunction with the Committee on
the Judiciary)
Fourteenth Report (H. Rept. 104-821): ``Sampling and
Statistical Adjustment in the Decennial Census:
Fundamental Flaws.''*
Fifteenth Report (H. Rept. 104-849): ``Investigation
of the White House Travel Office Firings and Related
Matters.''*
Sixteenth Report (H. Rept. 104-857): ``Year 2000
Computer Software Conversion: Summary of Oversight
Findings and Recommendations.'' (Subcommittee on
Government Management, Information, and Technology)
Seventeenth Report (H. Rept. 104-858): ``Crude Oil
Undervaluation: The Ineffective Response of the
Minerals Management Service.'' (Subcommittee on
Government Management, Information, and Technology)
Eighteenth Report (H. Rept. 104-861): ``Federal
Government Management: Examining Government Performance
as We Near the Next Century.''*
Nineteenth Report (H. Rept. 104-862): ``Investigation
into the White House and Department of Justice on
Security of FBI Background Investigation Files.''*
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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B. LEGISLATION
The legislative jurisdiction of the Committee on Government
Reform and Oversight covers a wide range of important
governmental operations. In accordance with jurisdiction
assumed from the former Committee on Government Operations, the
committee receives all budget and accounting measures other
than appropriations; all measures relating to the overall
economy and efficiency of Government operations and activities,
including Federal procurement, intergovernmental relationships,
general revenue sharing (the latter subject was formerly within
the jurisdiction of the Committee on Ways and Means), and the
National Archives (formerly within the jurisdiction of the
Committee on Post Office and Civil Service); all reorganization
plans and bills providing for the establishment of new
departments in the executive branch such as the Department of
Energy and the Department of Education; and most other
reorganization legislation, examples of which are legislation
to reorganize the intelligence community, international trade,
and regulatory agencies. Other legislation includes debt
collection and proposals relating to delinquent payments and
paperwork reduction. It also receives legislation dealing with
the General Services Administration, including the Federal
Property and Administrative Services Act of 1949 and special
bills authorizing the Administrator of General Services to make
specific transfers of property, plus legislation dealing with
the General Accounting Office, the Office of Management and
Budget, the Administrative Expenses Act, the Travel Expenses
Act, the Employment Act of 1946, and the Javits-Wagner-O'Day
Act relating to the sale of products and services of blind and
other handicapped persons. In addition, the committee has
jurisdiction over the Freedom of Information provisions of the
Administrative Procedure Act, the Privacy Act, the Government
in the Sunshine Act, and the Federal Advisory Committee as well
as the Inspector General Act.
Rule X, 2(b) of the standing Rules of the House, requires
the committee to see and review the administration of all laws
in the legislative jurisdiction, and Rule XI, 1(d) requires
that the committee report to the House thereon by the end of
each Congress. The present report outlines the extent and
nature of the committee and subcommittee activities
constituting the review.
On January 4, 1995, as the first session of the 104th
Congress convened, the new Republican House majority moved to
fulfill its promise of true government reform by implementing
its Contract with America. Pursuant to the Contract, 14 bills
were introduced as the opening bells rang to promote jobs,
enhance wages, take back our Nation's streets, and restore
openness, accountability, and fiscal responsibility in our
Federal Government. Of the Contract bills, four were referred
to the Committee on Government Reform and Oversight for
immediate review and action. They included: H.R. 2, the Line-
Item Veto Act; H.R. 5, the Unfunded Mandates Reform Act; H.R.
9, the Job Creation and Wage Enhancement Act; and H.R. 450,
(830) the Paperwork Reduction Act. The actions taken on each
are described below.
During the 104th Congress, as noted above, the committee
studied 436 bills and resolutions referred to it and reported
42 to the House. The measures reported or ordered reported are
discussed more fully in part two below. However, they are
listed here for convenience in the order of approval by the
committee and with the name of the subcommittee that initially
considered them:
H.R. 5, To curb the practice of imposing unfunded
Federal mandates on States and local governments, to
ensure that the Federal Government pays the costs
incurred by those governments in complying with certain
requirements under Federal statutes and regulations,
and to provide information on the cost of Federal
mandates on the private sector, and for other purposes.
(H. Rept. 104-1, Pt. 2, S. 1; Public Law 104-4.)
H.R. 2, To give the President item veto authority
over appropriation acts and targeted tax benefits in
revenue acts. (H. Rept. 104-11, Pt. 2, S. 4; Public Law
104-50.)
H.R. 830, To amend chapter 35 of title 44, United
States Code, to further the goals of the Paperwork
Reduction Act to have Federal agencies become more
responsible and publicly accountable for reducing the
burden of Federal paperwork on the public, and for
other purposes. (H. Rept. 104-37, S. 244; Public Law
104-13.)
H.R. 450, To ensure economy and efficiency of Federal
Government operations by establishing a moratorium on
regulatory rulemaking actions, and for other purposes.
(Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs, H. Rept. 104-39, Pt.
1, S. 219.)
H.R. 1271, To provide protection for family privacy.
(Subcommittee on Government Management, Information,
and Technology, H. Rept. 104-94.)
H.R. 1345, To eliminate budget deficits and
management inefficiencies in the government of the
District of Columbia through the establishment of the
District of Columbia Financial Responsibility and
Management Assistance Authority, and for other
purposes. (Subcommittee on the District of Columbia, H.
Rept. 104-96, Public Law 104-8.)
H.R. 1826, To repeal the authorization of
transitional appropriations for the United States
Postal Service, and for other purposes. (Subcommittee
on the Postal Service, H. Rept. 104-174.)
H.R. 1606, To designate the United States Post Office
building located at 24 Corliss Street, Providence,
Rhode Island, as the ``Harry Kiziran Post Office
Building.'' (Subcommittee on the Postal Service, Public
Law 104-100.)
H.R. 1026, To designate the United States Post Office
building located at 201 East Pikes Peak Avenue in
Colorado Springs, Colorado, as the ``Winfield Scott
Stratton Post Office.'' (Subcommittee on the Postal
Service, passed House and Senate as H.R. 1026; Public
Law 104-44.)
H.R. 1655, To authorize appropriations for fiscal
year 1996 for intelligence and intelligence-related
activities of the U.S. Government, the Community
Management Account, and the Central Intelligence Agency
Retirement and Disability System, and for other
purposes. (H. Rept. 104-138, Pt. 2, S. 922; Public Law
104-93.)
H.R. 1670, To revise and streamline the acquisition
laws of the Federal Government, to reorganize the
mechanisms for resolving Federal procurement disputes,
and for other purposes. (H. Rept. 104-222, Pt. 1.)
H.R. 2108, To permit the Washington Convention Center
Authority to expend revenues for the operation and
maintenance of the existing Washington Convention
Center and for preconstruction activities relating to a
new convention center in the District of Columbia, to
permit a designated authority of the District of
Columbia to borrow funds for the preconstruction
activities relating to a sports arena in the District
of Columbia and to permit certain revenues to be
pledged as security for the borrowing of such funds,
and for other purposes. (Subcommittee on the District
of Columbia, H. Rept. 104-227; Public Law 104-28.)
H.R. 1756, To abolish the Department of Commerce,
(Title 1.) (H. Rept. 104-260, Pt. 1, S. 929.)
S. 790, To provide for the modification or
elimination of Federal reporting requirements. (H.
Rept. 104-327; Public Law 104-66.)
H.R. 994, To require the periodic review and
automatic termination of Federal regulations.
(Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs, H. Rept. 104-284,
Pt. 1.)
H.R. 2661, To amend the District of Columbia Self-
Government and Government Reorganization Act to permit
the District of Columbia to expend its own funds during
any portion of a fiscal year for which Congress has not
enacted the budget of the District of Columbia for the
fiscal year, and to provide for the appropriation of a
monthly pro-rated portion of the annual Federal payment
to the District of Columbia for such fiscal year during
such portion of the year. (Subcommittee on the District
of Columbia, H. Rept. 104-408.)
H.R. 1398, To designate the United States Post Office
building located at 1203 Lemay Ferry Road, St. Louis,
Missouri, as the ``Charles J. Coyle Post Office
Building.'' (Subcommittee on the Postal Service, passed
House.)
H.R. 1880, To designate the United States Post Office
building located at 102 South McLean, Lincoln,
Illinois, as the ``Edward Madigan Post Office
Building.'' (Subcommittee on the Postal Service; Public
Law 104-157.)
H.R. 2262, To designate the United States Post Office
building located at 218 North Alston Street in Foley,
Alabama, as the ``Holk Post Office Building.''
(Subcommittee on the Postal Service, passed House.)
H.R. 2704, To provide that the United States Post
Office building that is to be located on the 2600 block
of East 75th Street in Chicago, Illinois, shall be
known and designated as the ``Charles A. Hayes Post
Office Building.'' (Subcommittee on the Postal Service,
passed House.)
H.R. 2202, Immigration in the Natural Interest Act of
1995. (Subcommittee on Civil Service, H. Rept. 104-469,
Pt. II.)
H.R. 2700, To designate the United States Post Office
building located at 7980 FM 327, Elmendorf, Texas, as
the ``Amos F. Longeria Post Office Building.''
(Subcommittee on the Post Office; Public Law 104-255.)
H.R. 3184, To streamline and improve the
effectiveness of chapter 75 of title 31, United States
Code (commonly referred to as the ``Single Audit
Act.'') (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-607; Public
Law 104-156.)
H.R. 2086, To increase the overall economy and
efficiency of Government operations and enable more
efficient use of Federal funding, by enabling local
governments and private, nonprofit organizations to use
amounts available under certain Federal assistance
programs in accordance with approved local flexibility
plans. (Subcommittee on Human Resources and
Intergovernmental Relations, H. Rept. 104-847.)
H.R. 885, To designate the United States Post Office
building located at 153 East 110th Street, New York,
New York, as the ``Oscar Garcia Rivera Post Office
Building.'' (Subcommittee on the Postal Service, passed
House.)
H.R. 3139, To redesignate the United States Post
Office building located at 245 Centereach Mall on
Middle Country Road in Centereach, New York, as the
``Rose Y. Caracappa United States Post Office
Building.'' (Subcommittee on the Postal Service; Public
Law 104-187.)
H.R. 3663, To amend the District of Columbia Self-
Government and Governmental Reorganization Act to
permit the Council of the District of Columbia to
authorize the issuance of revenue bonds with respect to
water and sewer facilities, and for other purposes.
(Subcommittee on the District of Columbia, H. Rept.
104-635; Public Law 104-184.)
H.R. 3664, To make miscellaneous and technical
corrections to improve the operations of the government
of the District of Columbia. (Subcommittee on the
District of Columbia.)
H.R. 3586, To amend title 5, United States Code, to
strengthen veterans' preference, to increase employment
opportunities for veterans, and other purposes.
(Subcommittee on Civil Service, H. Rept. 104-675.)
H.R. 3452, To make certain laws applicable to the
Executive Office of the President, and for other
purposes. (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-820, Pt. 1;
Public Law 104-331.)
H.R. 1281, To amend title 5, United States Code, and
the National Security Act of 1947 to require disclosure
under the Freedom of Information Act of information
regarding certain individuals who participated in Nazi
war crimes during the period in which the United States
was involved in World War II. (Subcommittee on
Government Management, Information, and Technology, H.
Rept. 104-819, Pt. 1; Public Law 104-309.)
H.R. 3841, To amend the civil service laws of the
United States, and for other purposes. (Subcommittee on
Civil Service, H. Rept. 104-831, passed House.)
H.R. 3864, To reform the management practices of the
General Accounting Office, and for the other purposes.
(Public Law 104-316.)
H.R. 3802, To amend section 552 of title 5, United
States Code, popularly known as the Freedom of
Information Act, to provide for public access to
information in an electronic format, and for other
purposes. (Subcommittee on Government Management,
Information, and Technology, H. Rept. 104-795; Public
Law 104-231.)
H.R. 3869, To amend the Federal Advisory Committee
Act to direct the Director of the Office of Management
and Budget to conduct a negotiated rulemaking for the
purpose of establishing electronic data reporting
standards for the electronic interchange of certain
data that is required to be reported under existing
Federal law. (Subcommittee on Government Management,
Information, and Technology.)
H.R. 3637, To amend chapter 57 of title 5, United
States Code, and title 31, United States Code, to
provide employees who transfer in the interest of the
Government more effective and efficient delivery of
relocation allowances by reducing administrative costs
and improving services, and for other purposes.
(Subcommittee on Government Management, Information,
and Technology.)
H.R. 3625 (S. 1577), To authorize appropriations for
the National Historical Publications and Records
Commission for fiscal years 1998, 1999, 2000, and 2001.
(Subcommittee on National Security, International
Affairs, and Criminal Justice, S. Rept. 104-283; Public
Law 104-274.)
H.R. 3768, To designate a United States Post Office
to be located in Groton, Massachusetts, as the
``Augusta `Gusty' Hornblower United States Post
Office.'' (Subcommittee on the Postal Service.)
H.R. 3834, To redesignate the Dunning Post Office in
Chicago, Illinois, as the ``Roger P. McAuliffe Post
Office.'' (Subcommittee on the Postal Service; Public
Law 104-189.)
H.R. 3877, To designate the United States Post Office
building in Camden, Arkansas, as the ``Honorable David
H. Pryor Post Office Building.'' (Subcommittee on the
Postal Service; Public Law 104-268.)
S. 868, To provide authority for leave transfer for
Federal employees who are adversely affected by
disasters or emergencies, and for other purposes.
(Subcommittee on Civil Service, S. Rept. 104-151;
passed House.)
OTHER LEGISLATIVE ACTION
The following bills were referred to the Committee on
Government Reform and Oversight, however, the committee was
discharged from further consideration, therefore, the bills
were not reported by the committee. Latest action is shown:
H.R. 9, to create jobs, enhance wages, strengthen
property rights, maintain certain economic liberties,
decentralized and reduce the power of the Federal
Government with respect to the States, localities, and
citizens of the United States, and to increase the
accountability of Federal officials. (Reported amended
by Committee on Commerce, H. Rept. 104-33, Pt. I;
amended from Committee on Science, Pt. II; passed House
amended and received in Senate and referred to
Governmental Affairs.)
H.R. 564, a bill to provide that receipts and
disbursements of the Highway Trust Fund, the Airport
and Airway Trust Fund, the Inland Waterways Trust Fund,
and the Harbor Maintenance Trust Fund shall not be
included in the totals of the budget of the U.S.
Government as submitted by the President or the
congressional budget. (Subcommittee on Government
Management, Information, and Technology.)
H.R. 842, a bill to provide off-budget treatment for
the Highway Trust Fund, the Airport and Airway Trust
Fund, the Inland Waterways Trust Fund, and the Harbor
Maintenance Trust Fund. (Subcommittee on Government
Management, Information, and Technology.)
H.R. 1022, a bill to provide regulatory reform and to
focus national economic resources on the greatest risks
to human health, safety, and the environment through
scientifically objective and unbiased risk assessments
and through the consideration of costs and benefits in
major rules, and for other purposes. (Subcommittee on
National Economic Growth, Natural Resources, and
Regulatory Affairs. Considered by House Unfinished
Business. Committee Amendment in the Nature of a
Substitute Considered as an Original Bill for the
Purpose of Amendment. House agreed to Amendments
Adopted by the Committee of the Whole. Motion to
Recommit with Instructions Failed in House by Yea-Nay
Vote: 174-250 (Record Vote No. 182). Passed House
(Amended) by Recorded Vote: 286-141 (Record Vote No.
183). Received in the Senate and referred to Senate
Committee on Governmental Affairs.)
H.R. 1182, a bill to permit certain Federal employees
who retired or became entitled to receive compensation
for work injury before December 9, 1980, to elect to
resume coverage under the Federal employees' group life
insurance program. (Subcommittee on Civil Service.)
H.R. 1508, a bill to require the transfer of title to
the District of Columbia of certain real property in
Anacostia Park to facilitate the construction of
National Children's Island, a cultural, educational,
and family oriented park. (Subcommittee on the District
of Columbia. Reported Amended by the Committee on
Resources, H. Rept. 104-277, Pt. I; called up by House
under Suspension of Rules and passed House. Received in
the Senate and referred to Governmental Affairs.)
H.R. 1530, to authorize appropriations for fiscal
year 1996 for military activities of the Department of
Defense, to prescribe military personnel strengths for
fiscal year 1996, and for other purposes. (Reported
amended by the Committee on National Security, H. Rept.
104-131; passed House amended; passed Senate amended;
House agreed to Conference Rept. 104-406; called up by
House as Privileged Matter. Public Law No. 104-106.)
H.R. 2017, to authorize an increased Federal share of
the costs of certain transportation projects in the
District of Columbia for fiscal years 1995 and 1996,
and for other purposes. (Subcommittee on the District
of Columbia. Reported Amended by the Committee on
Transportation and Infrastructure, H. Rept. 104-217,
Pt. 1; called up by House under Suspension of Rules and
passed House and Senate. Public Law 104-21.)
H.R. 2077, to designate the U.S. Post Office building
located at 33 College Avenue in Waterville, Maine, as
the ``George J. Mitchell Post Office Building.''
(Called up by House by Unanimous Consent. Passed House
and Senate by Voice Vote. Public Law No. 104-27.)
H.R. 2564, to provide for the disclosure of lobbying
activities to influence the Federal Government, and for
other purposes. (Reported by the Committee on
Judiciary, H. Rept. 104-339, Pt. 1; called up by House
by Suspension of Rules and passed House by Voice Vote.
Public Law 104-65.)
H.R. 2276, to establish the Federal Aviation
Administration as an independent establishment in the
executive branch, and for other purposes. (Reported
amended from the Committee on Transportation and
Infrastructure, H. Rept. 104-475, Pt. I. Passed House
amended March 12, 1996 and received in Senate and
referred to Commerce, Science and Transportation March
13, 1996.)
H.R. 2636, to transfer jurisdiction over certain
parcels of Federal real property located in the
District of Columbia, and for other purposes. (Reported
amended from the Committee on Transportation and
Infrastructure, H. Rept. 104-368, Pt. I. In addition,
it was reported amended from the Committee on
Resources, H. Rept. 104-368, Pt. II. Passed House
amended on July 31, 1996, and received in the Senate
and referred to the Committee on Energy and Natural
Resources on August 1, 1996, S. Rept. 104-391.)
H.R. 3107, to impose sanctions on persons exporting
certain goods or technology that would enhance Iran's
ability to explore for, extract, refine, or transport
by pipeline petroleum resources, and for other
purposes. (Reported amended from International
Relations Committee, H. Rept. 104-523, Pt. I; reported
amended from Ways and Means Committee, H. Rept. 104-
523, Pt. II. Passed House as amended, passed Senate
with amendments. Presented to the President July 24,
1996 became Public Law 104-172.)
H.R. 3235, to amend the Ethics in Government Act of
1978, to extend the authorization of appropriations for
the office of Government Ethics for 3 years, and for
other purposes. (Reported from the Committee on the
Judiciary, H. Rept. 104-595, Pt. I. Passed House under
suspension of rules and passed Senate on July 24, 1996.
Presented to the President July 26, 1996, became Public
Law 104-179.)
H.R. 3237, to provide for improved management and
operation of intelligence activities of the Government
by providing for a more corporate approach to
intelligence, to reorganize the agencies of the
Government engaged in the intelligence activities so as
to provide an improved Intelligence Community for the
21st century, and for other purposes. (Reported amended
from Intelligence Committee, H. Rept. 104-620, Pt. I,
and reported amended from National Security Committee,
H. Rept. 104-620, Pt. II.)
H.R. 3936, to encourage the development of a
commercial space industry in the United States, and for
other purposes. (Reported amended the Committee on
Science, H. Rept. 104-801, Pt. I, passed House under
suspension of rules and received in the Senate on
September 18, 1996.)
C. REORGANIZATION PLANS
The most recent authority of the President to transmit
reorganization plans to Congress was reestablished by Public
Law 98-614. Approved November 8, 1984, this authority expired
on December 31, 1984. Legislation extending executive
reorganization authority was not enacted during the first
session of the 104th Congress.
D. COMMITTEE PRINTS
Fifteen committee prints, resulting from work by the
committee staff, were issued during the 104th Congress, as
follows:
``Rules of the Committee on Government Reform and
Oversight, House of Representatives, Together with
Selected Rules of the House of Representatives
(Including Clause 2 of House Rule XI) and Selected
Statutes of Interest.'' (Full committee.) (January
1995.)
``Oversight Plans for all House Committees with
Accompanying Recommendations by the Committee on
Government Reform and Oversight, House of
Representatives (Required by Clause 2 of House Rule
XI).'' (Full committee.) (March 1995.)
``Mail Service in the United States: Exploring
Options for Improvement.'' Report of the U.S. Postal
Service and the Postal Rate Commission, to the
Committee on Government Reform and Oversight. (Full
committee.) (December 1995.)
``Legislative Manual (1st Edition) of the Committee
on Government Reform and Oversight.'' (Full committee.)
(February 1996.)
``The Federal Acquisition Reform Act of 1996 and the
Information Technology Management Reform Act of 1996--
Divisions D and E of the National Defense Authorization
Act of Fiscal Year 1996.'' (Full committee.) (February
1996.)
``Rules of the Committee on Government Reform and
Oversight, House of Representatives Together with
Selected Rules of the House of Representatives
(Including Clause 2 of House Rule XI) and Selected
Statutes of Interest.'' (Full committee.) (March 1996.)
``Correspondence Between the White House and Congress
in the Proceedings Against John M. Quinn, David
Watkins, and Matthew Moore As Part of the Committee
Investigation into the White House Travel Office
Matter.'' (Full committee.) (May 1996.)
``Interim Report of the Activities of the House
Committee on Government Reform and Oversight 104th
Congress, First Session.'' (Full committee.) (May
1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 1.'' (Full committee.) (May 1996.)
``Business Meeting in the Proceedings Against John M.
Quinn, David Watkins, and Matthew Moore As Part of the
Committee Investigation into the White House Travel
Office Matter.'' (Full committee.) (June 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 2.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 3.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 4.'' (Full committee.) (October 1996.)
``Deposition Transcripts from the Committee
Investigation into the White House Office Travel
Matter, Volume 5.'' (Full committee.) (October 1996.)
``United States Government Policy and Supporting
Positions (Plum Book).'' (Full committee.) (November
1996.)
E. COMMITTEE ACTION ON REPORTS OF THE COMPTROLLER GENERAL
Rule X, 4(c)(1)(A), of the rules of the House, imposes the
duty upon this committee to receive and examine reports of the
Comptroller General referred to and to make such
recommendations to the House as it deems necessary or desirable
in connection with the subject matter of the reports.
In discharging this responsibility, each report of the
Comptroller General received by the committee is studied and
analyzed by the staff and referred to the subcommittee of this
committee to which has been assigned general jurisdiction over
the subject matter involved.
The committee has received a total of 35 General Accounting
Office Reports to the Congress for processing during the 104th
Congress. After preliminary staff study, these reports were
referred to subcommittees of this committee as follows:
Civil Service Subcommittee........................................ 6
District of Columbia Subcommittee................................. 4
Government Management, Information, and Technology Subcommittee... 3
Human Resources and Intergovernmental Relations Subcommittee...... 7
National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee.......................................... 5
National Security, International Affairs, and Criminal Justice
Subcommittee.................................................. 4
Postal Service Subcommittee....................................... 6
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________________________________________________
Total....................................................... 35
Furthermore, in implementation of section 236 of the
Legislative Reorganization Act of 1970, the committee now
regularly receives GAO reports that are not addressed to
Congress but contain recommendations to heads of the Federal
agencies. These are generally reports to the agency heads their
written statements of actions taken with respect to such
recommendations, as required by section 236. The committee
received a total of 1,065 such GAO reports to Federal agencies
or other committees and Members within the legislative branch.
Periodic reports are received from the subcommittees on
actions taken with respect to individual reports, and monthly
reports are made to the chairman as to reports received. During
the 104th Congress, the committees used the reports to further
specific investigations and reviews. In most cases, additional
information concerning the findings and recommendations of the
Comptroller General was requested and received from the
administrative agency involved, as well as from the General
Accounting Office. More specific information on the actions
taken appears in part two below.
Complete files are maintained by the committee on all
Comptroller General's reports received. Detailed records are
kept showing the subcommittee to which the report is referred,
the date of referral, and the subsequent action taken.
The committee will review all of the Comptroller General's
reports received during the Congress in the light of additional
information obtained and actions taken by the subcommittees,
and determinations will be made whether specific
recommendations to the House are necessary or desirable under
rule X.
PART TWO. REPORT OF COMMITTEE ACTIVITIES
I. Matters of Interest, Full Committee
A. GENERAL
1. Oversight Plans of the Committees of the U.S. House of
Representatives.
The 104th Congress adopted a new Rule that provides for
each standing committee of the House to formally adopt
oversight plans at the beginning of each year. Specifically,
the Rule states in part:
Rule X, clause (2)(d)(1). Not later than February 15
of the first session of a Congress, each standing
committee of the House shall, in a meeting that is open
to the public and with a quorum present, adopt its
oversight plans for that Congress. Such plans shall be
submitted simultaneously to the Committee on Government
Reform and Oversight and to the Committee on House
Oversight.
On March 31, 1995, Committee Chairman William F. Clinger,
Jr., submitted the oversight plans of each committee together
with recommendations to ensure the most effective coordination
of such plans.
RECOMMENDATIONS OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
Oversight Plans of the Committees of the House
Collectively, the committee oversight plans cover a wide
array of Federal programs and management issues. The challenges
of dealing with the serious, pervasive problems that continue
to impede effective management and efficient program delivery
is formidable.
A major breakthrough in prospects for improving Federal
management, as well as congressional oversight of Federal
programs, has been provided by two recent laws: the Chief
Financial Officers Act and Government Performance and Results
Act. Together, these acts provide a framework necessary to help
achieve improved government accountability and stewardship and
to lower costs by focusing on results. The Congress framed it
this way: Set goals, operate programs, and measure results
using reliable financial and management information.
While these acts are still in the process of being
implemented, efforts already completed or underway in response
to both acts offer committees a valuable source of information
and insight into the management problems and issues. These
include issues that impact individual programs, as well as
those that cut across agency programs and organizational
boundaries.
The committees of the House should: (1) conduct oversight
to ensure that these statutes are being aggressively
implemented, and (2) use the information produced by the
implementation of these statutes and the General Accounting
Office's (GAO) high risk list to assess the management
weaknesses in the agencies within their jurisdiction.
Chief Financial Officers Act
One of the underlying historical impediments to better
management of government programs has been the lack of reliable
financial information. With passage of the CFO Act, the
Congress has said that this must change and change quickly. The
long-needed fiscal accountability that the act is designed to
bring about is essential to effective program management and
congressional oversight.
Agencies, which represent organizations larger than the
Nation's largest private corporations, have typically not been
able to perform even the most rudimentary bookkeeping
functions. Agency financial management systems are badly
deteriorated-OMB reports that most do not meet standards and
almost all agencies have been unable to pass the test of an
independent financial statement audit.
A primary element of the Chief Financial Officers Act, as
expanded by the Government Management Reform Act of 1994, is
the requirement for all 24 major agencies to have audited
financial statements. (The act also calls for governmentwide
financial statements, audited by GAO, by fiscal year 1997.)
Also, agencies must now have:
financial information that is linked with program
and budget data for use in both management control and
planning;
reports on program cost trends and other
performance indicators from which managers can make informed
decisions on running government operations effectively and
efficiently
Since passage of the initial legislation in 1990, the CFO
Act has already provided:
significantly more accurate information on the
government's financial status and operations, as well as an
understanding of how unreliable the financial information being
provided to the Congress and program managers has been;
a better understanding of the pervasiveness of
management control problems; and
substantial savings from recoveries and better use
of funds.
Annual financial statement audits, which are done by the
agency Inspectors General (IGS) or by GAO, continue to provide
valuable information on the results of program operations and
the current financial condition of agencies. This information
can be of great use to committees in their oversight efforts.
Audits, for example, have identified:
Despite over $400 billion in adjustments needed to
correct errors in Defense's financial data over the last 3
years, Defense is still unable to render an accurate accounting
of its hundreds of billions of dollars in assets. This
unreliable data has traditionally served as the basis for
Defense's reports to the Congress.
Duplicate, erroneous, and even fraudulent payments
to Defense contractors totaling billions of dollars.
Unneeded Defense inventories of almost $40
billion.
The IRS being unable to effectively collect or
accurately account for $1.25 in annual revenues; audits show
that only a fraction of over $100 billion in recorded tax
receivables was collectible.
GAO's ongoing financial audit work includes the IRS, the
Bank Insurance Fund, the Resolution Trust Corporation, and the
Pension Benefit Guaranty Corporation, all for fiscal year 1994,
and the Department of the Navy for fiscal year 1995. IG's are
conducting (in some instances with contracted assistance from
accounting firms) fiscal year 1994 audits in the Departments of
Education, HHS, Army, Air Force, NASA, Veterans Affairs, EPA,
Labor, Agriculture, HUD, Interior, and other agencies.
Government Performance and Results Act
Effective implementation of the Chief Financial Officers
Act is also a vital element to the success of the Government
Performance and Results Act (GPRA). GPRA seeks to change the
focus of Federal management and accountability from a
preoccupation with inputs, such as the amount of program
appropriations, to measured results and outcomes of Federal
programs. Successful implementation of the act will help
address the question: What are the American people getting for
their investment in the Federal Government? Information on
performance in relation to agency goals can also be helpful to
the Congress.
Experiences of State governments and foreign countries that
are leaders in public management show that GPRA's three key
elements: strategic planning; performance measurement; and
public reporting and accountability could influence the basic
culture of the government so that is more results-oriented.
Accurate results-oriented information will greatly assist the
Congress in its efforts to oversee current programs and in
making informed decisions for the future.
But making the major changes in the way Federal agencies
are managed and held accountable called for under GPRA will
require agencies to develop the capacity to manage for results.
This will not be accomplished quickly or easily. Therefore, the
act's provisions are being phased in with a series of pilot
projects over the next several years.
Already, 70 pilots have been designated ranging in size
from small programs to entire agencies, including the IRS, SSA,
and the Defense Logistics Agency. As agencies implement the
act, oversight committees should have opportunities to work
with agencies in improving performance by providing managers
freedom to experiment and find innovative ways to improve
program results, while increasing accountability for achieving
those results.
2. Views and Estimates for Fiscal Year 1997.
On February 27, 1996, pursuant to section 301(d) of the
Congressional Budget and Impoundment Control Act of 1974, as
amended by the Balanced Budget and Emergency Deficit Control
Act of 1985, the committee submitted its views and estimates to
the Committee on the Budget on matters that were included in
the President's fiscal year 1997 budget within the committee's
jurisdiction.
3. Investigations.
a. The Financial Holdings and Activities of Secretary of
Commerce Ronald H. Brown.--Beginning in February 1994,
Representative William F. Clinger, Jr., then-ranking member of
the Committee on Government Operations, wrote to Secretary of
Commerce, Ronald H. Brown, requesting that Secretary Brown
answer questions arising from his Financial Disclosure
Statement. The questions focused on appearances of a conflict
in Secretary Brown's holdings and/or role in such companies as
Harmon International, Inc., First International Communication,
Inc., Corridor Communication, Inc., Albimar Communications,
Inc., and Kellee Communications Inc., as well as his business
relationship with Ms. Nolanda Hill, the owner of First
International Communications and Corridor Communications.
Secretary Brown's responses, through intermediaries,
generated follow-up letters by Representative Clinger on March
23, 1994, July 11, 1994, July 20, 1994, and at least one
meeting between committee staff and Commerce Department
officials before Mr. Clinger requested that Mr. Stephen D.
Potts, Director of the U.S. Office of Government Ethics,
investigate the matter pursuant to 5 C.F.R. Section 2638.401
et. seq. on October 5, 1994. On that same day, Representative
Clinger asked Department of Commerce Inspector General, Frank
DeGeorge, to investigate Secretary Brown's relationship with
the aforementioned companies as well as Boston Bank of Commerce
and Boston Bank of Commerce Associates to determine whether it
raised any conflicts of interest with Secretary Brown's
official responsibilities.
In a December 21, 1994, letter, Inspector General DeGeorge
deferred to OGE Director Potts, stating, ``this office and OGE
agreed that if issues or problems arose during their review
which needed investigation, OGE, pursuant to their statutory
authority, would refer those matters to this office for
appropriate investigation. To date, we have not been asked by
OGE to look into any matter. At the end of the OGE review, we
will review their findings to determine whether there are any
indications of conflicts or other violations warranting further
investigation.''
In a letter dated December 29, 1994, Office of Government
Ethics Director Stephen D. Potts stated, ``We found that the
manner in which Commerce's ethics officials reviewed the
financial disclosure forms was consistent with the manner in
which we require and expect agencies to carry out these
responsibilities.'' Despite acknowledging in his letter
repeated discrepancies in Secretary Brown's disclosure reports,
Director Potts concluded that appearances of conflict had been
avoided due to Secretary Brown's divestiture of holdings,
resignation from managerial roles or receipt of waivers.
These responses, however, failed to address fully the
concerns of Representative Clinger who on January 4, 1995,
became chairman of the Government Reform and Oversight
Committee of the 104th Congress, thus necessitating further
investigation into Secretary Brown's activities.
Chairman Clinger noted in a January 23, 1995, letter to
Secretary Brown that Secretary Brown had failed to disclose
income he received during his Commerce tenure from First
International Communications Limited Partnership during 1993.
Furthermore, First International Communications Limited
Partnership's primary source of income was a debt instrument
payable by Corridor Broadcasting Corporation, an entity
controlled by Nolanda Hill, Secretary Brown's business
associate in First International. In addition, Corridor
Broadcasting Corporation had defaulted on a $26 million loan
held by the Federal Deposit Insurance Corporation, which
ultimately cost American taxpayers some $23 million.
Secretary Brown's failure to address the potential
conflicts of interest involving his business affiliations,
coupled with ongoing efforts by the committee's investigative
staff, led to Chairman Clinger's February 27, 1995, request
that Attorney General Janet Reno appoint an Independent
Counsel, under the Independent Counsel Act, 28 U.S.C. Sec. 591
et. seq., to investigate the holdings and activities of
Secretary Brown. Chairman Clinger raised allegations concerning
Secretary Brown's: (i) submission of incomplete, inaccurate and
misleading financial disclosure statements; (ii)
supplementation of salary; (iii) potential conflicts of
interest; (iv) misinformation to Congress; and (v) refusing to
respond to Congress.
In addition to questions raised concerning Secretary
Brown's affiliation with the business previously mentioned, the
February 27, 1995, request noted that Secretary Brown: (i)
failed to disclose either as a gift or loan, $108,000 used as a
down-payment for a townhouse purchased by Secretary Brown and
his son, Michael Brown, in Washington, DC; (ii) failed to
report future income of some $190,955, which he knew he would
receive in the wake of his divestiture of his interest in First
International; (iii) supplemented his Federal salary by
receiving some $412,000, in direct payments, loan forgiveness
and payments to his creditors by business partners; (iv)
undertook official actions which benefited his business
partners and associates; and (v) misled the Congress concerning
compensation paid by business partners to members of his
immediate family.
On July 6, 1995, a three-judge Federal appeals court panel
announced its selection of former Federal prosecutor Daniel S.
Pearson to serve as an independent counsel in the matter of
Secretary Ronald H. Brown.
No committee hearings were held during the first session of
the 104th Congress on the matter of Secretary of Commerce
Ronald H. Brown. In the wake of Secretary Brown's death in
April 1996, Independent Counsel Pearson suspended his
investigation and turned over matters remaining open--including
the Nolanda Hill inquiry--to the Justice Department, Criminal
Division.
b. The White House Travel Office Investigation.--At
approximately 10 a.m., on May 19, 1993, all seven members of
the White House Travel Office staff were fired and the five
Travel Office employees present in the White House that day
were ordered to vacate the White House compound within 2 hours.
Returning to the Travel Office by 10:30 a.m., the fired Travel
Office employees found their desks already occupied by
employees of World Wide Travel, the Arkansas travel agency
which arranged for press charters during the Clinton
Presidential campaign, Catherine Cornelius and others.
Two White House Travel Office employees were out of the
White House Travel Office on May 19, 1993, one on a White House
advance trip to South Korea, the other on vacation. They
learned of their firings, respectively, via CNN telecast and a
son who saw Tom Brokaw announce the firings on network news
that night. The seven White House Travel Office employees had
served from 9 to 32 years in the White House Travel Office.
The five Travel Office employees who were present in the
White House for their firings ultimately were given additional
time to complete their White House out-processing. By early
afternoon, they heard then-White House Press Secretary Dee Dee
Myers announce at a press briefing that they were subject of an
FBI criminal investigation. They had been given no such
indication at the time of their dismissals. After completing
out-processing, the five Travel Office employees present on May
19, 1993, were driven out of the White House compound in a
panel van with no passenger seats. They were seated on the
floor and wheel wells of the van along with boxes of their
gathered personal effects.
While the Travel Office employees served at the pleasure of
the President, their precipitous firings and replacement by the
Clinton campaign's primary travel agency immediately raised a
storm of criticism. Administration claims that it had acted in
order to save the press and taxpayers money were met with
skepticism by a White House press corps which responded with a
litany of complaints of over billing and undocumented billings
by World Wide itself throughout the 1992 campaign. In addition,
the Clinton administration's announcement that an FBI criminal
investigation had been launched was highly improper and, in
fact, questionable when it was announced. Furthermore, White
House contacts with the FBI in the days leading up to and
immediately following the Travel Office firings also were
considered improperly handled by Attorney General Janet Reno,
who publicly admonished the administration for them.
Members of the House and the Senate immediately raised
concerns about the manner in which the Travel Office firings
took place. In the face of press, public and congressional
outcry, the White House placed five of the seven Travel Office
employees on administrative leave with pay on May 25, 1993, and
announced that it would conduct a White House Management Review
of the Travel Office and the administration's role in the
Travel Office firings. The fired Travel Office director and
deputy director retired.
On June 1, 1993, William F. Clinger, Jr., the then-ranking
minority member of the House Government Operations Committee,
requested that then Chairman John Conyers, Jr., hold hearings
on the White House Travel Office firings.
Then-White House Chief Thomas F. (Mack) McLarty and then-
Office of Management and Budget Director Leon Panetta released
the White House Travel Office Management Review on July 2,
1993, and announced the reprimands of four White House
staffers. Reprimanded were: Associate Counsel to the President,
William H. Kennedy III; Assistant to the President for
Management and Administration, David Watkins; former Special
Assistant to the President for Management and Administration,
Catherine A. Cornelius; and Deputy Assistant to the President
and Director of Media Affairs, Jeff Eller. At least three of
the four first learned of the ``reprimands'' during their
televised announcement. None of the reprimands were documented
in the personnel files of any of the four.
Also on July 2, 1993, the Supplemental Appropriations Act
of 1993 (Public Law 103-50) required the U.S. General
Accounting Office (GAO) to ``conduct a review of the action
taken with respect to the White House Travel Office.''
In addition to the White House Management Review and the
GAO Report entitled White House Travel Office Operations
(released on May 2, 1994), at least three other reports were
prepared concerning various aspects of the White House Travel
Office firings. These reports were prepared by: the Office of
Professional Responsibility (OPR) of the U.S. Department of
Justice (dated March 18, 1994, and released by the committee on
October 24, 1995); a Federal Bureau of Investigation Internal
Review of FBI Contacts with the White House (dated June 1,
1993), and the Department of Treasury Inspector General Report
``Allegation of Misuse of IRS RE: ULTRAIR'' (dated June 11,
1993).
On September 23, 1993, after consultations with majority
staff of the Government Operations Committee, Mr. Clinger
withdrew his request for committee hearings on the White House
Travel Office firings, ``contingent upon the adequacy of the
GAO effort'' which had been mandated by Congress through Public
Law 103-50.
Individually and collectively, the five reports prepared
concerning the White House Travel Office left many questions
unanswered and, in fact, raised many more. Several Members of
Congress, including Mr. Clinger, sought to have these questions
answered through further investigation and congressional
hearings. In a letter dated October 7, 1994, Mr. Clinger and 16
other House Members again requested congressional hearings on
the White House Travel Office in order to ``address serious
questions arising from, or unanswered by, the General
Accounting Office (GAO) Report to Congress, White House Travel
Office Operations (GAO/GGD-94-132).''
Mr. Clinger's request was accompanied by a 71-page minority
analysis of issues unaddressed by any of the previous five
reports. This analysis reviewed contradictions concerning:
memoranda drafted by Catherine Cornelius outlining its new
organizational structure and placing her in charge; activities
of Harry Thomason and Darnell Martens; mismanagement by David
Watkins; White House reasons justifying the Travel Office
firings; contacts between Dee Dee Myers and Darnell Martens;
public disclosure of the FBI investigation; possible influence
on the FBI; the integrity of Travel Office records; the role of
the President; the reprimands, and inaccuracies and
insufficiencies in the GAO report on the White House Travel
Office.
Soon after the November 1994 congressional elections, Mr.
Clinger, chairman of the Government Reform and Oversight
Committee of the 104th Congress, announced that he would hold
hearings on the White House Travel Office firings. In December
1994, the Public Integrity Division of the U.S. Department of
Justice indicted former White House Travel Office Director
Billy R. Dale on one charge of embezzlement and one charge of
conversion.
The committee investigative staff conducted interviews and
gathered documents from various participants in the Travel
Office matter on a voluntary basis throughout the spring and
summer of 1995. White House document production, however,
proved problematic and led to numerous meetings and phone
conversations with Clinton administration representatives in
the White House Counsel's Office, the Department of Justice,
Department of the Treasury as well as the General Accounting
Office.
In the fall of 1995, Chairman Clinger scheduled the
committee's first hearing on the White House Travel Office for
October 24, 1995. The hearing focused on the accuracy and
completeness of the five White House Travel Office reports and
to consider whether further hearings were required to address
unanswered issues. The panel at the October 24, 1995, hearing
included authors of each of the five reports, respectively.
This hearing purposely avoided all areas that might have
impacted upon the trial of former Travel Office Director Billy
R. Dale which was to commence on October 26, 1995.
The committee reviewed which of seven key Travel Office
issues each report addressed. These issues were: the
completeness of the review of references to ``Highest Levels''
involvement at the White House in the Travel Office firings;
whether any assessment of White House Standards of Conduct was
performed and whether administration staffers had violated
those standards; whether inquiries were made into the role of
Hollywood producer Harry Thomason in the firings; the role of
Mr. Thomason's and his firm, Thomason, Richland and Martens
(TRM) in seeking contracts involving the Interagency Committee
on Aviation Policy (ICAP); whether the issue of competitive
bidding by the White House Travel Office and by the White House
itself in dealing with the Travel Office was reviewed; and
whether thorough investigations into FBI and IRS actions and
reactions to the White House inquiries had been undertaken.
The hearing made clear that, given limitations on their
scopes, none of the reports had addressed fully the issues
raised by the Travel Office firings. The Treasury Inspector
General IRS report redactions made it impossible to determine
whether the IRS addressed any of the seven issues. The OPR and
FBI reports only partially addressed two issues, ``FBI
actions'' and references to ``Highest Levels of the White
House'' and never addressed the other five. Despite its far
greater understanding of the participants and circumstances
leading to the Travel Office firings--or because of it--the
White House Travel Office Management Review only briefly and
superficially addressed Harry Thomason's role, FBI actions and
references to ``Highest Levels'' of the White House while
ignoring competitive bidding, IRS action, standards of conduct
and ICAP contracts. Similarly, the GAO relied on the White
House Management Review in its report on Mr. Thomason's role
and only partially addressed FBI actions and ``Highest Levels''
while leaving ICAP, competitive bidding and standards of
conduct unaddressed. IRS disclosure laws prevented the GAO from
publicly addressing IRS actions.
The October 24, 1995 hearing also made clear that the GAO
and OPR reports, the most independent of the five, were hobbled
by what their respective authors referred to as an
unprecedented lack of cooperation by the White House in their
investigations. It was determined in the hearing that the White
House had denied both GAO and OPR documents which were critical
to their investigations, documents which well might have
affected their conclusions. Accordingly, both GAO and OPR never
received any of the documents subsequently produced by the
White House.
The criminal trial of former Travel Office Director Billy
R. Dale began on October 26, 1995, and concluded on November
17, 1995, with Mr. Dale's acquittal of both charges. After the
acquittal was announced, Chairman Clinger requested that the
Public Integrity Section of the Department of Justice turn over
all documents related to the criminal prosecution for review by
the committee.
At year-end 1995, the committee planned hearings on: the
role of Mr. David Watkins in the Travel Office firings; the
experiences of the fired seven Travel Office employees; the
role of Mr. Harry Thomason; and the role of the FBI and IRS. In
January 1996, the committee subpoenaed all of Mr. Thomason's
documents related to the Travel Office and filed a ``6103
Waiver'' with the IRS in which representatives of UltrAir
authorized the IRS, Department of Treasury and others to
release all relevant documents concerning the IRS audit of
UltrAir in the wake of the Travel Office firings. The
Department of the Treasury had promised prompt delivery of all
documents pending receipt of the expanded 6103 waiver.
At 8:30 p.m. on January 3, 1996, the White House delivered
a document production to committee offices. Included in that
production was a 9-page, undated draft memorandum written by
David Watkins, a copy of which was simultaneously released to
the media. Mr. Watkins wrote in this memorandum, which he
characterized as a ``soul cleansing'' memorandum, that he had
made his ``first attempt to be sure the record is straight,
something I have not done in previous conversations with
investigators--where I have been as vague and protective as
possible.'' The Watkins draft memo ascribed a far greater
Travel Office role to First Lady Hillary Rodham Clinton than
the White House or Mrs. Clinton ever had admitted:
On Monday morning you [then-White House Chief of
Staff McLarty] came to my office and met with me and
Patsy Thomasson. At that meeting you explained that
this was on the First Lady's ``radar screen.'' I
explained to you that I had decided to terminate the
Travel Office employees and you expressed relief that
we were finally going to take action (to resolve the
situation in conformity with the First Lady's wishes).
We both knew there would be hell to pay if, after our
failure in the Secret Service situation earlier, we
failed to take swift and decisive action in conformity
with the First Lady's wishes.
Mr. Watkins concluded that his memo:
[Made] clear that the Travel Office incident was
driven by pressures for action originating outside my
Office. If I thought I could have resisted those
pressures, undertaken more considered action, and
remained in the White House, I certainly would have
done so. But after the Secret Service incident, it was
made clear that I must more forcefully and immediately
follow the direction of the First Family. I was
convinced that failure to take immediate action in this
case would have been directly contrary to the wishes of
the First Lady, something that would not have been
tolerated in light of the Secret Service incident
earlier in the year.
The Watkins draft memorandum was responsive to the
September 1995, document request by the committee. Moreover,
back in October 1995, the White House Counsel's Office had
informed the committee that it had produced most of the
substantive documents pursuant to that request.
The White House explained weeks afterwards that it first
discovered the Watkins draft memorandum on December 29, 1995.
The memorandum was reviewed by the White House Counsel's office
and copied to several administration officials as well as the
personal attorneys for Mack McLarty, Patsy Thomasson, Harry
Thomason, and the President and First Lady by January 2, 1996.
The White House released the Watkins draft memorandum to the
media on the evening of January 3, 1996, at the same time it
released the documents to the committee.
On January 5, 1996, Chairman Clinger issued subpoenas to
both David Watkins and Harry Thomason for all records
concerning the White House Travel Office and related matters.
On January 11, 1996, Chairman Clinger issued interrogatories
concerning the origin and chain-of-custody of the original and
all copies of the Watkins draft memorandum to be answered in
writing and under oath by:
Jane C. Sherburne, Special Counsel to the President.
Jon Yarowsky, Associate Counsel to the President.
Natalie Williams, Associate Counsel to the President.
Miriam R. Nemetz, Associate Counsel to the President.
Christopher D. Cerf, Associate Counsel to the
President.
Nelson Cunningham, General Counsel, Office of
Administration.
Patsy Thomasson, Deputy Director of White House
Personnel.
Also on January 11, 1996, the committee issued bipartisan
subpoenas for all relevant records to the White House Executive
Office of the President and the White House Office of
Administration as well as bipartisan personal subpoenas to Mack
McLarty, Bruce Lindsey, Todd Stern, Patsy Thomasson, Catherine
Cornelius and Margaret Williams. The documents subpoenaed were
due on January 22, 1996.
In the wake of the White House's release of the Watkins
draft memorandum, Clinton officials, attorneys and surrogates
launched attacks on the character and managerial skills of
former Travel Office Director Billy Dale. First Lady Hillary
Rodham Clinton also assailed Mr. Dale's management in various
interviews. As a result, Chairman Clinger wrote President
Clinton on January 16, 1996, requesting that the White House
cease its continued attack on Mr. Dale.
On January 17, 1996, the committee held its second hearing
on the Travel Office matter. David Watkins was the sole witness
at this hearing, at which he requested that no still or video
cameras be allowed to record his testimony, invoking a House
rule. In the hearing, he testified under oath regarding his
draft memorandum and other records he had turned over to the
committee pursuant to a personal subpoena. Watkins testified,
``Was there pressure? Did I feel pressure of the desires and
wishes of others? Yes, I did.'' Watkins testified he had felt,
``a lot of internal pressure,'' and was asked by whom. ``The
pressure that I felt was coming from the First Lady was
conveyed primarily through Harry Thomason and Vince Foster.''
Mr. Watkins' May 12, 1993, notes, first received by the
committee under personal subpoena, stated that Harry Thomason
told him on that day that the First Lady wanted the Travel
Office staff fired that day. In a May 14, 1993, telephone call
to the First Lady, Watkins testified, he was told, ``We should
get our people in and get those people out.''
In the wake of the discovery of the Watkins memorandum
where inconsistencies between Mr. Watkins' statements to the
GAO and his undated memorandum and contemporaneous notes became
clear, Chairman Clinger asked GAO to advise the committee
concerning what sanctions exist for intentionally providing
false information to GAO. GAO responded in a letter dated
January 17, 1996, which addressed the relevant statutes and
legal precedents. In a January 23, 1996, response to GAO,
Chairman Clinger asked that GAO compare and contrast the notes
of its interviews with Mr. Watkins with copies of interviews
conducted with Mr. Watkins by various investigative agencies,
Mr. Watkins' draft memorandum and contemporaneous notes and
other materials. Chairman Clinger asked that GAO identify all
of the material inconsistencies between the documents provided
and GAO's own interview notes and to determine whether they met
the materiality test required by any applicable statute.
The seven fired Travel Office employees testified on
January 24, 1996, when the committee held its third hearing on
the White House Travel Office firings. The seven fired Travel
Office employees testified about their work in the White House
Travel Office and the management of press charters, the events
leading to their firings on May 19, 1993, and their
investigation at the hands of the FBI and IRS. Individually,
they testified of the costs of their respective legal defenses
which, all told, amounted to some $700,000.
While all seven acknowledged that they served at the
pleasure of the President, they questioned the manner in which
the firings were undertaken. Mr. Dale testified:
If the President or the First Lady or anyone else
wanted us out in order to give the business to their
friends and supporters, that was their privilege. But
why can't they just admit that is what they wanted to
do rather than continue to make up accusations to hide
that fact?
Mr. Billy Dale testified in the hearing that records
disappeared from the Travel Office in the period immediately
preceding the firings and disputed allegations of Travel Office
mismanagement as a ``convenient excuse'' intended to justify
the firings. Five of the Travel Office employees testified
about being placed on administrative leave within a week of the
firings and subsequently finding employment elsewhere in the
Federal Government. Mr. Dale and former White House Travel
Office Deputy Director Gary Wright had retired from Federal
service in the aftermath of the firings in 1993.
In a letter to the committee dated January 23, 1996, Mr.
David L. Clark, Director of Audit Oversight and Liaison for the
General Accounting Office, evaluated current White House Travel
Office management using the 29 criteria identified in its May
1994, report on the Travel Office. The evaluation was based on
work performed by GAO in the Travel Office in the fall of 1995.
GAO stated:
We found that the Travel Office had developed
policies and implemented procedures during the period
January 1995 through August 1995 to address all but 3
of the 29 criteria. For those three, we found that the
Travel Office had not (1) billed customers within its
stated 15-day requirement, (2) paid vendors within its
stated 45-day requirement, and (3) performed bank
reconciliations regularly.
GAO also reported:
[T]he Travel Office had a policy requiring monthly
reconciliations of its checkbook with the cash balance
reported by its bank. As of April 1994, we found that
staff were performing the reconciliations as required.
However, from January 1995 through August 1995, Travel
Office staff performed no bank reconciliations because
other tasks were given a higher priority. Immediately
prior to our review, the Travel Office reconciled all
outstanding bank statements and found deposits totaling
$200,000 that had not been entered into its checkbook.
These funds were all owed to vendors who had previously
furnished goods and services for press trips. White
House officials informed us that future monthly
reconciliations will be performed as required.
GAO's discovery of a $200,000 discrepancy in White House
Travel Office deposits for calendar year 1995 is a matter of
some concern given that the White House alleged in May 1993,
that it had fired the entire Travel Office staff and launched
an FBI criminal investigation on the basis of a $18,200
discrepancy in Travel Office petty cash funds.
On January 30, 1996, General Counsel Robert P. Murphy of
the General Accounting Office wrote Chairman Clinger addressing
inconsistencies between statements made by David Watkins to GAO
and Watkins' undated draft memorandum and notes taken by
Watkins which were dated May 31, 1993, and Watkins' GAO
interview and other relevant documents.
On February 1, 1996, Chairman Clinger and Senate Judiciary
Committee Chairman Orrin Hatch (R-UT) introduced a bill to
reimburse the legal expenses of the seven fired White House
Travel Office employees. The bill would reimburse nearly
$500,000 spent by Mr. Billy Dale on his defense as well as the
Travel Office expenses still due by his six colleagues. In a
1994 appropriation, Congress previously reimbursed $150,000 in
their legal expenses.
On February 7, 1996, the committee issued additional
bipartisan personal subpoenas to a number of current and former
White House employees, volunteers, friends and others involved
in the Travel Office matter, including Matt Moore.
On February 13, 1996, following consultation with Chairman
Clinger, the GAO asked Federal prosecutors to investigate
possible false statements made to GAO by David Watkins, having
concluded that statements made or attributed to Mr. Watkins
were inconsistent with statements he made in his GAO interview.
Justice Department officials submitted the referral to the
Independent Counsel and asked the court to approve the
expansion of the scope of Independent Counsel Kenneth Starr to
include this referral.
The Government Reform and Oversight Committee submitted a
list of 26 interrogatories to First Lady Hillary Rodham Clinton
on February 15, 1996. These interrogatories were to be answered
in writing and under oath by the First Lady by February 29,
1996. The White House subsequently asked for an extension and
the chairman of the Committee on Government Reform and
Oversight agreed to a 3-week extension. The White House
provided the First Lady's sworn responses to the committee on
the second due date, March 21, 1996. Her responses were
released to the media at the same time. In the responses, the
First Lady insisted she had no decisionmaking role in the
Travel Office firings and that her statements to GAO were
accurate. As to conversations with Harry Thomason, Vince Foster
and David Watkins, the First Lady had very few specific
recollections.
Chairman Clinger submitted H. Res. 369, which was referred
to the Committee on Rules, on February 29, 1996. H. Res. 369
provided special authority to the Committee on Government
Reform and Oversight to obtain testimony for purposes of
investigation and study of the White House Travel Office
matter. The bill was limited, deliberately, to provide
deposition authority to the Committee on Government Reform and
Oversight only for its investigation of the Travel Office
matter. Deposition authority allowed the committee to obtain
sworn testimony from witnesses while minimizing the number of
hearings needed in order to complete the investigation.\13\
---------------------------------------------------------------------------
\13\ Precedents for such deposition authority have included: 1)
President Nixon Impeachment Proceedings (93d Congress, 1974, H. Res.
803); 2) Assassinations Investigation (95th Congress, 1977, H. Res.
222); 3) Koreagate (95th Congress, 1977, H. Res. 252 and H. Res. 752);
4) Abscam (97th Congress, 1981, H. Res. 67); 5) Iran-Contra (100th
Congress, 1987, H. Res. 12); 6) Judge Hastings Impeachment Proceedings
(100th Congress, 1987, H. Res. 320); 7) Judge Nixon Impeachment
Proceedings (100th Congress, 1988, H. Res. 562); and 8) October
Surprise (102d Congress, 1991, H. Res. 258.
---------------------------------------------------------------------------
The House approved H. Res. 369 on March 7, 1996. Thereupon,
the Committee on Government Reform and Oversight notified
witnesses it wished to testify under oath before the committee.
Depositions commenced in late March 1996. Initially, they were
expected to be completed by June 1996.\14\
---------------------------------------------------------------------------
\14\ With the subsequent revelation that the White House improperly
had obtained some 900 confidential FBI background files on former
officials of the Reagan and Bush administrations, the last of the
depositions in fact was conducted in mid-September 1996.
---------------------------------------------------------------------------
The White House made a March 15, 1996, production of
documents pursuant to the committee's January 11, 1996,
subpoena. That production contained yet another unproduced May
3, 1994, handwritten letter from David Watkins to Mrs. Clinton.
No explanation for the White House's failure to produce this
document for nearly 2 years during the course of numerous other
document requests was proffered until two requests for a chain-
of-custody were made. Mr. Quinn finally responded on April 8,
1996, stating only that the letter was located in a stack of
unsorted, miscellaneous papers and memorabilia in the Office of
Personal Correspondence having been forwarded to Carolyn Huber
from the First Lady. Ms. Huber forwarded the original letter to
the First Lady on March 4, 1996. Mr. Quinn stated that Mrs.
Clinton did not look at the letter until March 12, 1996, at
which time she immediately sent the only copy of the White
House document to her personal lawyer, David Kendall. Mr.
Kendall reviewed the original and returned a copy, and later
the original, to Special White House Counsel Jane Sherburne.
On March 22, 1996, the three-judge Federal appeals panel
which appointed Kenneth K. Starr Whitewater Independent Counsel
approved an expansion of Independent Counsel Starr's mandate to
include the issue of whether David Watkins lied about First
Lady Hillary Rodham Clinton's role in the Travel Office firings
and related matters. Attorney General Janet Reno referred the
Watkins matter to the three-judge panel after the Justice
Department had concluded the Watkins could be investigated by
an independent counsel.
By a vote of 350 to 43 on March 19, 1993, the House of
Representatives passed H.R. 2937, a bill to reimburse the legal
expenses and related fees incurred by former employees of the
White House Travel Office with respect to the termination of
their employment in that office on May 19, 1993.
In document productions from individuals subpoenaed, the
committee was provided with a copy of a February 15, 1996,
White House Memorandum from John M. Quinn, Counsel to the
President and Jane Sherburne, Special Counsel to the President,
to a witness who had been subpoenaed by the Committee on
Government Reform and Oversight to provide all records related
to the White House Travel Office matter in the witness'
possession to the committee. The memorandum from Mr. Quinn and
Ms. Sherburne stated, in part:
Last week, the Committee [on Government Reform and
Oversight] issued personal subpoenas to you and other
current and former White House employees. These
personal subpoenas call for personal as well as White
House records. The Counsel's Office will handle
production of your responsive White House records,
i.e., records created or obtained during the course of
your official duties. Accordingly, you should forward
any White House records you believe may be responsive
to the Counsel's Office and we will determine whether
they should be produced to the Committee. You should
provide any responsive personal records directly to the
Committee. [Emphasis in original.]
The existence of the February 15, 1996, memorandum from Mr.
Quinn and Ms. Sherburne greatly concerned the committee because
the February 7, 1996, subpoenas served were personal subpoenas.
Those subpoenaed to provide all relevant White House Travel
Office records in their possession remain personally
responsible for making a complete production, whether or not
the White House chooses to withhold any or all of their
documents from production to the committee. Given the White
House's continuing unwillingness to make a complete production
of records it has been subpoenaed to provide the committee, its
instructions in the February 15, 1996, memo by Mr. Quinn and
Ms. Sherburne to witnesses served personal subpoenas suggests
that the White House intends to play an intermediary role in
the case of current and former White House staffers, volunteers
and others in a manner which may lead to their being held
personally liable for a failure to produce all relevant
records.
In the wake of its discovery of the February 15, 1996,
memorandum by Mr. Quinn and Ms. Sherburne, the committee wrote
letters to each individual who had been issued a personal
subpoena informing them that all records responsive to the
committee's January and February 1996, subpoenas must be
produced by May 8, 1996. Chairman Clinger sent similar letters
to White House Counsel Quinn and Attorney General Reno
informing them that all records responsive to White House and
Justice Department subpoenas were to be produced by May 8,
1996.
Chairman Clinger also announced on May 2, 1996, that he had
scheduled a committee business meeting for Thursday, May 9,
1996, at 9 a.m. to consider a privileged resolution to compel
production of any subpoenaed records relating to the White
House Travel Office which were not provided to the committee by
May 8, 1996.
On May 9, 1996, the Government Reform and Oversight
Committee voted to hold White House Counsel Jack Quinn and
former White House aides David Watkins and Matthew Moore in
contempt of Congress for failing to turn over subpoenaed
documents. Also on May 9, 1996, White House Counsel Quinn wrote
Chairman Clinger a letter claiming blanket privilege on behalf
of President Clinton over 3,000 pages of documents being
withheld from the committee. Attached to this letter was a
letter from Attorney General Janet Reno endorsing the claim of
executive privilege. At that time, however, the Attorney
General had not reviewed any of the documents for which she had
approved the President's claim of executive privilege.
On May 30, 1996, the day on which the contempt resolution
against White House Counsel Quinn was scheduled for a vote on
the floor of the House, the White House delivered to the
committee 1,000 of the 3,000 pages responsive to the
committee's subpoenas over which it previously had claimed
executive privilege. Accompanying this production was a
privilege log of 2,000 documents which the White House
continued to withhold. In the wake of this production, the
committee postponed the contempt vote on the floor of the House
against White House Counsel Quinn in order to review the
records produced and the privilege log.
In reviewing the 1,000 pages of documents produced on May
30, 1996, the committee discovered Bernard W. Nussbaum's
December 20, 1993, request of Billy Dale's confidential FBI
background file from the FBI Liaison Office. Even though it was
dated 7 months after Mr. Dale's firing, the form indicated that
the White House was requesting Mr. Dale's confidential FBI file
because it was considering him for ``Access (S).'' Chairman
Clinger immediately called on the White House and the FBI to
explain why the Dale file had been requested by and provided to
the White House even as the Justice Department was undertaking
a criminal investigation of Mr. Dale. (See The Security of FBI
Background Investigation Files, below.)
In the wake of this development, Chairman Clinger called on
the White House to release the remaining 2,000 pages of
documents over which it had claimed executive privilege, as it
once had claimed executive privilege--inappropriately--over the
Billy Dale FBI file request memo. After the White House refused
this request, claiming that the remaining 2,000 pages were
``unquestionably within the scope of [executive] privilege,''
Ranking Member Cardiss Collins agreed to act as an intermediary
in a successful effort to allow the committee to review
documents it deemed essential to its investigation while having
the White House certify that no other documents remained
outstanding.
Chairman Clinger and committee staff began a review of the
remaining 2,000 pages of documents in the presence of White
House personnel on June 27, 1996. The chairman found these
documents heavily redacted and also found that the White House
privilege log released the previous month provided insufficient
detail of their contents. The chairman advised the White House
of these concerns in a June 28, 1996, letter to White House
Counsel Quinn.
After personally spending 6 hours reviewing redacted White
House documents, Chairman Clinger wrote a July 31, 1996, letter
to the White House requesting that it produce all responsive
documents, in unredacted form, in three categories: 1)
communications with outside attorneys relating to interviews,
depositions or Grand Jury appearances; 2) briefing materials
and questions prepared for Congress; and 3) the review of the
late Vince Foster's White House office. The White House
produced these documents, some 1,400 pages in all, on August
15, 1996.
Meanwhile, in response to a press inquiry on August 1,
1996, President Clinton angrily denied having made any pledge
to reimburse Billy Dale's legal expenses despite the fact that
White House spokesman Mike McCurry had said in January 1996,
that the President would sign such a bill if it came to his
desk and a second White House spokesman had repeated those
remarks the very morning of the President's outburst. In
addition, President Clinton improperly referred to Mr. Dale's
Justice Department plea bargain negotiations. The details of
those negotiations were leaked under highly questionable
circumstances by the Clinton Justice Department in the days
following Mr. Dale's November 1995, acquittal by a jury in less
than 2 hours of the two charges against him. Mr. Robert
Bennett, who is defending President Clinton against charges of
sexual harassment made by Ms. Paula Jones, first raised--and
mischaracterized--these plea negotiations in the days following
the Dale acquittal.
The provision to reimburse the Travel Office-related legal
expenses of Mr. Dale and his six colleagues was passed in the
Senate on September 28, 1996, as part of the Omnibus
Consolidated Appropriations Act of 1997, and signed into law by
President Clinton on September 30, 1996.
On September 18, 1996, the Committee on Government Reform
and Oversight approved the committee's report of its
``Investigation of the White House Travel Office Firings and
Related Matters'' by voice vote and submitted it to the full
House to be printed.
On October 15, 1996, Chairman Clinger wrote a letter to
Independent Counsel Kenneth W. Starr enclosing copies of the
committee's Travel Office Report and its interim report on the
FBI Background Investigation Files matter. This letter also
addressed Chairman Clinger's concerns about the internal
discrepancies in testimony, witnesses' lack of recall of
material events, and conflicts between the White House's
documentary evidence and the sworn accounts of Jane Sherburne,
Harry Thomason, Craig Livingstone, Anthony Marceca, William
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
c. The Security of FBI Background Investigation Files.--On
May 30, 1996, in the course of its Travel Office investigation,
the committee discovered a December 20, 1993, White House
request of Billy Dale's confidential FBI background file from
the FBI Liaison Office. Even though it was dated 7 months after
Mr. Dale's firing, the form indicated that the White House was
requesting Mr. Dale's confidential FBI file because it was
considering him for ``Access (S).'' The Billy Dale FBI
background file request memo was found in a White House
production of 1,000 pages of documents over which the White
House previously had claimed executive privilege. Chairman
Clinger immediately called on the White House and the FBI to
explain why the Dale file had been requested by and provided to
the White House even as the Justice Department was undertaking
a criminal investigation of Mr. Dale.
By June 5, 1996, the White House had claimed that the Billy
Dale FBI background file request was a routine request
mistakenly made by an unnamed file clerk. In response, Chairman
Clinger requested of the White House and Attorney General Janet
Reno a list of all such White House requests for confidential
FBI background reports on private citizens and government
employees not seeking employment by the Clinton administration
or access to the White House. The following day, the White
House claimed that the General Accounting Office had requested
the Dale Confidential FBI background file. The GAO denied this
immediately.
By June 7, 1996, the White House had acknowledged that it
obtained the FBI files of approximately 338 former White House
employees, including many former Reagan and Bush administration
employees but alleged that the files never were read. Then
Anthony Marceca, a former detailee hand-picked by White House
Office of Personnel Security Director Craig Livingstone to work
in that office, contradicted the White House when he told
Livingstone's attorney that he, Marceca, in fact had read all
the files and had passed on any derogatory information to
Livingstone.
The White House admitted to having an additional 71
improperly sought FBI background files by June 14, 1996, the
day that FBI Director Louis J. Freeh released the findings of
an FBI review of the matter. Freeh concluded that 408 files had
been sought and received by the White House ``without
justification.'' Director Freeh further stated, ``The prior
system of providing files to the White House relied on good
faith and honor. Unfortunately, the FBI and I were victimized.
I promise the American people that it will not happen again on
my watch.''
Also on June 14, 1996, Livingstone revealed problems in his
own background in a sworn deposition before the Committee on
Government Reform and Oversight, including problems with his
employment history and the use of illegal drugs. On June 15,
1996, the White House delivered a document production to the
committee which included letters from former Associate White
House Counsel William H. Kennedy III, to then-Defense Secretary
Les Aspin and others seeking the assignment of Army
investigator Anthony Marceca to a White House detail in the
Office of Personnel Security.
The committee held four hearings on the FBI files matter in
the summer of 1996. The first hearing on June 19 addressed the
issue of how confidential FBI background files were handled
during previous administrations. Among the witnesses were
former White House Counsels and Deputy White House Counsels,
the head of the Office of Personnel Security during the Reagan
and Bush administrations and her assistant of 12 years. These
witnesses testified that access to confidential FBI background
files historically had been strictly limited to at most the
White House Counsel, his Deputy and the Director of the Office
of Personnel Security. By contrast, the assistant to the former
Office of Personnel Security Director testified that during 7
months of service in the Clinton administration, White House
interns 18-20 years old--and without any security clearance--
had access to the confidential FBI background files.
On June 21, Attorney General Janet Reno turned over the
investigation of the White House requests for confidential FBI
background files to Independent Counsel Kenneth W. Starr.
General Reno stated, ``I have concluded it would constitute a
conflict of interest for the Department of Justice itself to
investigate the matter involving an interaction between the
White House and the FBI, a component of the Department of
Justice.''
The committee's second hearing on the FBI files matter was
held on June 26, with former White House Counsel Bernard
Nussbaum, former Associate White House Counsel Bill Kennedy,
Office of Personnel Security Director (then on administrative
leave) Craig Livingstone and former Army detailee Anthony
Marceca and Lisa Wetzl, a former assistant to Livingstone,
testifying as to the handling of these files during the Clinton
administration. While Livingstone announced his resignation
from this position at the June 26 hearing and the White House
immediately announced a replacement, the question, ``Who hired
Craig Livingstone?'' never was answered definitively by any of
the witnesses. Mr. Livingstone testified that it had been his
life-long dream to serve in the White House of a Democratic
administration yet most improbably could not recall who made
him the offer which made that dream come true. Nor was this
question answered in the months to follow.
It was learned during this hearing that whoever did hire
Livingstone was able to overrule or overcome Kennedy's concerns
about Livingstone's background. Mr. Livingstone admitted his
drug history in committee depositions and during the June 26
hearing. It had also been reported that he was fired from a
previous job for lying about his employment history and was
fired by a store which had employed him for improperly
returning merchandise.
Messrs. Livingstone and Marceca and Ms. Wetzl testified
that the improper request and receipt of hundreds of
confidential FBI background files of former Reagan and Bush
administration officials was undertaken due to their reliance
on a faulty White House access list provided by the Secret
Service.
In order to pursue the committee's investigation into the
FBI files matter, Chairman Clinger initially had sought to
depose FBI agents. Director Freeh recommended, instead, that
the committee be allowed to review relevant FBI background
files, and the chairman agreed to this. On July 16, committee
Chief Investigative Counsel Barbara Olson reviewed the FBI
background files of Livingstone and Marceca. In the Livingstone
FBI file, notes of a Nussbaum interview indicated Nussbaum's
understanding that Livingstone came highly recommended by Mrs.
Clinton, who knew Livingstone's mother. Summarizing an
interview with then-White House Counsel Nussbaum concerning
Livingstone, FBI Agent Sculimbrene wrote, in part, in a
memorandum:
Bernard Nussbaum, Counsel to the President, advised
that he has known [Livingstone] for the period of time
that he has been employed in the new administration.
[Livingstone] had come highly recommended to him by
HILLARY CLINTON, who has known his mother for a longer
period of time.
While the White House--and Livingstone's mother--subsequently
claimed that Mrs. Clinton did not know Livingstone's mother,
the factual accuracy of such a relationship was far less
important than the fact that, at the time of Livingstone's
hiring, Nussbaum understood him to come highly recommended to
the position by a First Lady who knew his mother, details he
had denied under oath.
No less troubling was the committee's subsequent discovery
of continuing FBI involvement in this matter despite General
Reno's obvious concern about the inherent conflict of interest
between the White House and the Department of Justice in the
FBI files investigation. The committee learned that despite the
Attorney General's concerns, FBI Counsel Howard Shapiro
provided the White House with a ``heads-up'' concerning Chief
Investigative Counsel Olson's visit to the FBI and review of
the Livingstone and Marceca files, including the Nussbaum
interview summary which contradicted Nussbaum's testimony to
the committee in a deposition and a hearing. Counsel Shapiro
called Deputy White House Counsel Kathleen Wallman with this
``heads-up.'' Ms. Wallman in turn contacted White House Special
Counsel Jane Sherburne who informed numerous others of the
Livingstone file, including Mr. Nussbaum in advance of his
grand jury appearance.
On July 17, 1996, two FBI agents appeared at the home of
Dennis Sculimbrene, the FBI agent whose interview summary
referred to the hiring of Livingstone, showed him the summary
and asked him for notes of the interview. FBI agents also
searched his work area for information related to Livingstone's
hiring and his background investigation. This, too, appeared to
violate General Reno's sentiments that such actions would,
``constitute a conflict of interest for the Department of
Justice itself to investigate the matter involving an
interaction between the White House and the FBI, a component of
the Department of Justice.''
The question of whether a faulty White House access list
could explain what the Clinton administration had called a
``bureaucratic snafu'' was addressed in the committee's third
hearing on the FBI files matter on July 17, 1996. Secret
Service Special Agents Arnold Cole, John Libonati and Jeffrey
Undercoffer testified at this hearing. Their testimony, based
on recovered lists, charted the transitions of nearly 500
former White House officials from ``Active'' to ``Inactive''
status from 1982 through 1993. The Secret Service agents also
testified the lists it provided the White House would indicate
``Active'' or ``Inactive'' status or ``A'' and ``I'' for those
listed unless a custom list had been requested. Special Agent
Cole also testified that, soon after the Clinton White House
blamed the FBI files ``snafu'' on a faulty Secret Service list,
Livingstone came to him and explained that the office knew
which lists to use even as it improperly requested hundreds of
confidential FBI background files.
Chairman Clinger reviewed Livingstone's file for the first
time on July 18, 1996, in the company of Chief Investigative
Counsel Olson. Chairman Clinger requested information
concerning any communication of information in Livingstone's
file to the White House. On July 19, 1996, FBI Counsel Howard
Shapiro wrote Chairman Clinger a letter informing him that the
FBI had advised the White House as to the contents of the
Livingstone file: ``because issues raised in Mr. Nussbaum's
interview [in Livingstone's FBI file] has been discussed in
connection with the committee's oversight investigation, it was
determined that the Bureau had a responsibility to advise
affected parties. Therefore, after arrangements were made for
your staff to review the files, the Department of Justice, and
then the White House, were advised of the results of this
review.''
On August 1, 1996, the committee held a hearing on
Shapiro's ``heads up'' to the White House on the Livingstone
matter. Shapiro not only admitted to the ``heads up;'' he also
acknowledged hand-carrying retired FBI Agent Gary Aldrich's
manuscript on the Clinton White House, ``Unlimited Access'' to
White House Counsel Quinn.
On October 15, 1996, Chairman Clinger wrote a letter to
Independent Counsel Kenneth W. Starr enclosing copies of the
committee's Travel Office Report and its interim report on the
FBI Background Investigation Files matter. This letter also
addressed Chairman Clinger's concerns about the internal
discrepancies in testimony, witnesses' lack of recall of
material events, and conflicts between the White House's
documentary evidence and the sworn accounts of Jane Sherburne,
Harry Thomason, Craig Livingstone, Anthony Marceca, William
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
d. Questions concerning campaign contributions made to or
solicited by Lippo Group, John Huang and others.--In September
and October 1996, it was reported that two former Department of
Commerce employees had been involved in political activities
while working at the Commerce Department. Former Deputy
Assistant Secretary for International Economic Policy John
Huang and Melinda Yee, former Special Assistant to the late
Secretary of Commerce Ron Brown, allegedly were involved in
fund raising and/or other political activities on behalf of the
Clinton campaign while on the Federal Government payroll.
Following his tenure at Commerce, Huang became a senior fund
raiser at the Democratic National Committee. Some of the
largest campaign contributions he solicited while there
allegedly were made in violation of Federal Election Commission
laws.
Prior to joining the Clinton administration, Mr. Huang was
a senior executive of the Lippo Group, an Indonesia-based
conglomerate which provided him an $800,000 bonus shortly
before he accepted a Commerce Department post where his work
raised conflict of interest issues with his former employer.
Mr. Huang and James Riady, whose family controls the Lippo
Group, had known President Clinton since the 1980's. Throughout
that period, Huang and Riady raised substantial sums of money
for Clinton's gubernatorial and Presidential campaigns.
Subsequently, it was reported that together they participated
in scores of meetings in the Clinton White House. Policy
matters were discussed at some of these meetings, possibly in
violation of Federal Election Commission campaign law. Follow-
up articles addressed a number of other campaign finance
irregularities arising during the course of the Clinton
campaign, including contributions made by individuals barred by
law from making them.
In October 1996, Chairman Clinger initiated a series of
document requests for materials relevant to this inquiry, which
is ongoing. The Democratic National Convention has refunded
$1.5 million in contributions from illegal or questionable
sources.
e. Misuse of political influence within the disciplinary
enforcement system at the Department of Defense.--On August 2,
1996, the committee received allegations that high-level White
House and Department of Defense (DOD) officials had misused
their positions and influence to circumvent the DOD
disciplinary enforcement system. The allegations charged that
White House officials had pressured the Deputy Under Secretary
of Defense to employ a former Air Force officer who had
recently been dismissed following confirmed charges of official
misconduct. The former officer was alleged to have been re-
hired to a senior Schedule-C political appointee position
within the Office of the Secretary of Defense (OSD).
Pursuing the allegations, the committee first confirmed
that the former officer had, in fact been re-hired within OSD,
then reviewed the charges of TDY fraud, government cell phone
fraud, government AMEX Travel Card abuse and sexual harassment
which had originally been lodged against the officer. The
committee examined the complete Defense Systems Information
Agency Inspector General (DISA IG) and Air Force Office of
Special Investigations (AFOSI) investigative files on the case.
Staff interviewed the DISA IG and AFOSI case investigators, the
reviewing Air Force Staff Judge Advocate and Deputy Staff Judge
Advocate, and the retired officer's former commanding officers.
All records and interviews substantiated the validity of the
initial charges. The Staff Judge Advocate confirmed that while
the evidence was sufficient to warrant administrative action,
the Air Force had agreed to forego disciplinary proceedings in
return for the officer's resignation.
Committee staff then met with the Deputy Under Secretary of
Defense and representatives of the Secretary of Defense to
discuss the decision to employ the dismissed officer as a high-
level political appointee at an annual salary of well over
$100,000. Although both the Deputy Under Secretary and the
Secretary's senior staff were made aware of the past misconduct
and the officer's forced resignation, the Secretary declined to
take action to remove the officer from his subsequent
employment.
The committee then referred the matter to the appropriate
House and Senate authorizing and appropriating committees for
additional action.
f. Health Care Task Force.--In February 1993,
Representative Clinger called into question the secretive
manner in which the administration's Health Care Task Force was
conducting business. After requesting information from an
unresponsive White House on whether the Task Force was meeting
in compliance with statutes concerning open meetings,
recordkeeping, conflict of interest requirements and costs,
Representative Clinger requested a GAO audit. In a required
charter, the Clinton administration claimed Task Force costs
would be less than $100,000. The GAO audit, however, placed the
total cost at $13.8 million.
g. Labor Department Taxpayer Funded ``Toll-Free''
Hotline.--Following reports of a telephone hotline set up by
the Department of Labor to gather support for increasing the
minimum wage from minimum wage earners, Chairman Clinger sent a
letter to Secretary Reich requesting information on the costs
and purpose of the telephone bank, and to ascertain whether the
Department was in compliance with appropriate information
collection laws. Shortly thereafter, the hotline was shut down.
After several delays, the Department reported that, although
total costs were not yet available, the Department had capped
the total cost of the politically inspired hotline at $25,000.
The minimum wage brings workers an annual salary of $8,840.
h. National Reconnaissance Office.--Chairman Clinger and
subcommittee Chairman Horn have asked the GAO to review reports
due from Defense Department and the Central Intelligence Agency
on revelations that the National Reconnaissance Office secretly
accumulated $1.7 billion in unspent appropriated funds. After
the GAO report has been completed and reviewed, the committee
will determine if further action, including possible financial
management reforms, is warranted.
i. Abuse of the American Express Government Travel Payment
Program.--In the fall of 1995, the Committee on Government
Reform and Oversight reviewed two audit reports, one from the
Commerce Department and the other from the U.S. Information
Agency. Each of these reports highlighted problems associated
with the American Express Government Travel Payment Program.
At the U.S. Information Agency, the audit report cited
$2,200,000 in delinquent funds for the Agency's centrally
billed credit card account, and $240,000 in delinquent funds
for the Agency employees' individually billed credit card
accounts. At the Commerce Department, delinquency was found
among 293 employees. The committee also learned from these
reports that American Express Travel Cards were being used for
personal expenditures on a large scale. At the Commerce
Department, 567 employees were found to have used the travel
cards for personal use. At the U.S. Information Agency,
employees were found to have charged $116,000 in retail
purchases, much of which was found to be for personal use.
As a result of these reports, the committee endeavored to
study the breadth of the problems associated with the American
Express Government Travel Payment Program throughout the
Federal Government. In March 1996, committee staff met with
members of the Office of Management and Budget and the General
Services Administration and agreed on parameters by which
agencies would submit records and/or analysis of the
irregularities in their offices.
The number and amount of delinquent charges on Government
employees' American Express cards is massive. At the Department
of Justice, the Inspector General reports that the sum of
Centrally Billed Accounts and Individually Billed Accounts
brings monthly delinquency to $1.1 million and identified 768
transactions as ``possible misuse.'' Upon investigation, the
Department of Justice Inspector General found charges to retail
establishments like Victoria's Secret and Gucci. One such
personal charge was to the Boston Red Sox.
The Environmental Protection Agency chose to examine only
its Region 5 office. In that region, misuse ranged from $10.40
to $21,281. Twenty-four Environmental Protection Agency
employees improperly charged $2,000 or more on their Government
credit cards.
Although the State Department Inspector General reported
only $82,000 in possible misuse over a 6 month period, of the
$6.4 million in retail charges, $3.2 million represents cash
transactions from automatic teller machines or traveler checks.
The State Department Inspector General reports total
delinquency among Government credit card holders at between
$847,805 and $1,093,034 each month.
On September 25, 1996, Chairman Clinger wrote to Franklin
D. Raines, the Director of the Office of Management and Budget,
for his assurance that these abuses are being corrected. In
addition, the chairman sought to ensure that provisions in a
new contract being negotiated by the General Services
Administration were designed to prevent the widespread abuse
discovered in the course of the committee's investigation. The
committee is awaiting a response from Director Raines.
j. Taxpayer Funded Trip to Disney World.--After learning of
a Disney World training seminar conducted at taxpayer expense
for as many as 400 Federal employees, Chairman Clinger wrote on
behalf of the committee to the Departments of Interior,
Agriculture, and Defense to obtain an accounting of the exact
costs of the trip, the number of employees involved, and an
explanation of how the training related to the Departments'
missions. The trip was taken just 1 week after the Federal
Government shut down as a result of disagreements on how to
achieve a balanced budget. Chairman Clinger spelled out his
concern that hundreds of thousands of dollars may have been
spent for what appears to be a lavish, taxpayer-funded
vacation.
4. Legislation.
a. H.R. 5, the Unfunded Mandates Reform Act of 1995 (Public
Law 104-4)
a. Report Number and Date.--House Report No. 104-1, Pt. 2;
January 13, 1995.
b. Summary of Measure.--The Unfunded Mandates Reform Act of
1995 was intended to relieve the burden of unfunded Federal
mandates on State, local and tribal governments and the private
sector. It was designed to ensure that Congress and the
executive branch (1) had information on the costs of unfunded
Federal mandates, and (2) were accountable to States and
localities, the private sector, and the public for imposing new
mandates without paying for them.
Title I of the Unfunded Mandates Reform Act (Public Law
104-4) amended Title IV of the Congressional Budget Act to
provide that Congress must have Congressional Budget Office
(CBO) estimates for the costs of mandates it would impose on
State and local governments and the private sector through
reported legislation. Intergovernmental mandates projected to
cost State, local or tribal governments over $50 million in the
aggregate must be funded. Legislation that does not meet these
requirements will be subject to a point of order on the House
and Senate floor, where a majority of members must vote to
waive the point of order before Congress can consider an
intergovernmental mandate without paying its costs.
Title II of the law requires Federal agencies to analyze
the effects of their rules on State and local governments and
the private sector, and prepare written statements detailing
the costs and benefits of rules expected to cost either State,
local and tribal governments or the private sector over $100
million in the aggregate. Agencies must consult with State and
local elected officials throughout the process. Agencies also
must select the least costly or most cost-effective rule where
possible.
Title III provides for a look back at existing mandates. It
requires the Advisory Commission on Intergovernmental Relations
to re-evaluate existing mandates and to make recommendations to
Congress and the President within 1 year as to whether some or
all should be changed or repealed.
Title IV provides for limited judicial review of agency
actions under Title II.
The differences between H.R. 5 as reported by the committee
and Public Law 104-4 are fairly technical in nature and do not
dramatically alter the purpose or effect of the legislation.
c. Legislative History/Status.--Government Reform and
Oversight Committee Chairman William F. Clinger, Jr., joined
with Representatives Rob Portman (R-OH), Gary Condit (D-CA) and
Tom Davis (R-VA) to introduce H.R. 5, the Unfunded Mandates
Reform Act, on January 4, 1995. The bill was referred to the
Committee on Government Reform and Oversight, with secondary
referrals given to the Committees on Rules, Budget, and
Judiciary.
d. Hearings and Committee Actions.--On January 10, 1995,
the committee voted to report H.R. 5 by a voice vote after a
mark up in which 18 amendments were offered and 4 were adopted.
Of those amendments adopted, three were offered by
Representative Steve Horn (R-CA) and one was offered by
Representative Paul Kanjorski (D-PA). The committee did not
consider sections 201, 202, or Title III of H.R. 5 based on
consultations with the Parliamentarian that those provisions
were not in the committee's jurisdiction.
S. 1, the companion bill in the Senate (also titled the
Unfunded Mandates Reform Act of 1995), moved through the Senate
Governmental Affairs Committee on a parallel track.
House floor consideration of H.R. 5 began on January 19,
1995, and concluded on February 1, 1995. The Conference Report
on S. 1 was passed by the House on March 16, 1995, and was
signed into law on March 22, 1995.
b. H.R. 2, Line Item Veto Act of 1995
a. Report Number and Date.--House Report No. 104-11, Pt.
II, January 30, 1995, together with minority and additional
views.
b. Summary of Measure.--H.R. 2, the House-passed Line Item
Veto Act of 1995, was designed to supplement the President's
existing impoundment authority by creating a new enhanced
rescission process for individual appropriations and targeted
tax benefits contained in Federal tax and spending bills. The
bill as sent to the President addresses not only individual
appropriations and limited tax benefits, but also provides
item-veto authority for increases in new direct spending.
Under the Line Item Veto Act, the President may strike any
whole dollar amount of discretionary spending in an
appropriations act, conference report, or joint explanatory
statement to accompany a conference report.
In the case of entitlements, the President is permitted to
cancel specific provisions of law which provide new direct
spending relative to the current budget baseline. Any new
direct spending program or legislative expansion of an existing
entitlement would therefore be subject to the line item veto.
For limited tax benefits, the act permits the Joint
Committee on Taxation to determine which provisions, if any, in
a revenue or reconciliation bill meet the definition of a
limited tax benefit. If the Joint Committee's determinations
are included in the revenue or reconciliation bill which is
sent to the President, its determinations are binding upon the
President's cancellation authority. If no Joint Committee
determinations are included in the bill, the President is
permitted to make his own determination of what qualifies as a
limited tax benefit using the definition contained in the Line
Item Veto Act.
Tax or spending items item-vetoed by the President are
automatically canceled and may only be reinstated if both
Houses of Congress vote to disapprove the President's
cancellations within a fixed time period. All moneys saved are
set aside in a lockbox account for the purposes of deficit
reduction. If both Houses disapprove the President's
recommendations by a bill or joint resolution, the President
retains his constitutional authority to veto the disapproval
measure, forcing the Congress to obtain a two-thirds vote in
each House to override. The Line Item Veto Act permits the
President to choose between using its new item-veto process or
the existing impoundment process contained in title X of the
Congressional Budget Act.
c. Legislative History/Status.--H.R. 2 was introduced on
January 4, 1995, and was approved and ordered reported, as
amended, by the Committee on Government Reform and Oversight on
January 25, 1995. On January 26, 1995, the Committee on Rules
asserted its sequential referral by marking-up the bill. The
Rules Committee ordered the bill reported with two amendments
which more closely defined the format of the President's
special disapproval message. An amendment in the nature of a
substitute to H.R. 2, incorporating both the Government Reform
and Oversight and Rules Committee amendments, passed the House
of Representatives on February 6, 1995.
On February 14, 1995, the Senate Budget Committee reported
two competing versions of S. 4 while the Senate Committee on
Governmental Affairs reported its version of the bill on March
7, 1995. The Senate approved the bill, as amended on March 23,
1995, and requested a conference. The bill S. 4 passed the
House on March 28, 1996 and was signed into law by the
President on April 9, 1996, to become Public Law 104-130.
d. Hearings and Committee Actions.--A joint hearing was
held on January 12, 1995, by the House Committee on Government
Reform and Oversight and the Senate Committee on Governmental
Affairs. In the first panel, testimony was received from
Senators John McCain and Dan Coats, and from Representatives
Gerald Solomon, Jack Quinn, Mark Neumann and Michael Castle.
All spoke in favor of the bill. Governor William Weld of
Massachusetts then testified to the effectiveness of the line-
item veto in controlling State expenditures. Dr. Alice Rivlin,
Director of the Office of Management and Budget, spoke on
behalf of the Clinton administration and expressed support for
the legislation as enhancing the President's authority to cut
spending. Dr. Robert Reischauer, Director of the Congressional
Budget Office, then cautioned that the bill would provide the
President with greater potential power than a constitutionally
approved item-veto. Judge Gilbert S. Merritt, Chief Judge of
the Sixth Circuit and chairman of the Executive Committee of
the Judicial Conference, expressed concern over applying the
line-item veto to appropriations acts for the judiciary. The
hearing ended with the final panel, which consisted of Joseph
Winkelmann of Citizens Against Government Waste, David Keating
of the National Taxpayers' Union, and Dr. Norman Ornstein of
the American Enterprise Institute, taking different views of
the bill. Mr. Winkelmann and Mr. Keating strongly supported
H.R. 2, while Dr. Ornstein regarded the bill as more of a
transfer of congressional power to the President than a process
for true spending restraint.
c. H.R. 1038, a bill to revise and streamline the
acquisition laws of the Federal Government.
a. Report Number and Date.--None.
b. Summary of Measure.--On February 24, 1995, Chairman
William F. Clinger, Jr., of the Committee on Government Reform
and Oversight, Chairman Floyd D. Spence of the Committee on
National Security, and Chairman Benjamin A. Gilman of the
Committee on International Relations, introduced H.R. 1038 to
revise and streamline the acquisition laws of the Federal
Government. The bill addressed two issues: repeal of the
recoupment of research and development costs, and a rewrite of
the Procurement Integrity laws.
c. Legislative History/Status.--Included as part of H.R.
1670, the Federal Acquisition Reform Act of 1995 in May 1995,
which subsequently was modified and included in the conference
report to S. 1124, the Fiscal Year 1996 Department of Defense
Authorization Act (Public Law 104-106).
d. Hearings and Committee Actions.--The bill was referred
to the Subcommittee on Government Management, Information, and
Technology, which met pursuant to notification on February 28,
1995, to solicit additional proposals for further simplifying
and streamlining the Federal procurement system. At the
hearing, testimony was received from various procurement
specialists in the contracting community representing
government and industry.
Generally, the comments of the witnesses were as follows:
those representing the government expressed the need for less
congressional micro-management and greater flexibility and
authority for agency contracting officers; those representing
businesses, both large and small, reiterated their long held
views about reducing government rules and regulations so they
could sell to government agencies like they do to private
sector buyers; and those representing other groups complained
that existing laws are too complicated and too confusing.
The various proposals for reform brought forward by the
witnesses ranged from minor technical corrections to a complete
overhaul of the system.
d. H.R. 1670, The Federal Acquisition Reform Act of 1995
a. Report Number and Date.--Report No. 104-222, Pt. 1,
together with additional minority views; August 1, 1995.
b. Summary of Measure.--During this time of declining
Federal budgets, Chairman Clinger and his colleagues sought to
eliminate the mass of requirements littering the current
Federal procurement system that has led to too much money being
spent for too little product. H.R. 1670 would remove from
statute many of these unnecessary government-unique
requirements which are often non-value added obstacles to doing
business with the Federal Government.
This legislation would make changes to the current
competition standard; increase the government's purchase of
commercial items; streamline current procurement integrity
statutes; provide that it is the policy of the Federal
Government to acquire goods and services from the private
sector; and consolidate current contract disputes and bid
protest forums into two streamlined entities, one for
Department of Defense acquisitions and the other for the
civilian agencies.
c. Legislative History/Status.--On June 14, 1995, a version
of H.R. 1670 was offered on the floor of the House of
Representatives as an amendment to the fiscal year 1996
Department of Defense Authorization Act; adopted and amended by
Congresswoman Cardiss Collins' second degree amendment to
remove Title I of H.R. 1670, and replace it with language which
would retain the current statutory competition standard and
include further statutory revisions.
An amendment in the nature of a substitute to H.R. 1670 was
developed prior to committee mark-up to reflect the views of
other Members of Congress (both Republican and Democrat),
industry associations, senior industry executives, the
administration, government contracting officials,
representatives of both large and small business, and from
other interested individuals. The Committee on Government
Reform and Oversight met on July 27, 1995, to consider H.R.
1670. The bill, as amended, was favorably reported to the House
by voice vote and without further amendment by the full
committee.
H.R. 1670 was passed on the floor of the House of
Representatives on September 14, 1995, by an overwhelming vote
of 423-0. The bill was sent to the Senate and referred to the
Committee on Governmental Affairs.
H.R. 1670 was included in a modified form as Division D in
the final conference report to accompany S. 1124, the
Department of Defense Authorization Act for Fiscal Year 1996.
S. 1124 was signed by the President on February 10, 1996, and
became Public Law 104-106.
Included in the Omnibus Consolidated Appropriations Act for
Fiscal Year 1997 (Public Law 104-208) was language to change
the short titles of both Division D and Division E (the
Information Technology Management Reform Act of 1996) of Public
Law 104-106 to the Clinger-Cohen Act of 1996.
d. Hearings and Committee Actions.--A joint hearing by the
Committee on Government Reform and Oversight and the Committee
on National Security was held on May 25, 1995, to solicit views
on H.R. 1670 as introduced on May 18, 1995. Procurement experts
representing both government and industry provided comment.
Statements presented by industry representatives emphasized
that H.R. 1670 would shift presumptions of private and public-
sector business interaction from a negative one to a positive
one, and would permit things to be done cheaper, faster, and
better than currently is being done today. These
representatives identified H.R. 1670 as clearly making a long-
term mark on the acquisition system to prepare it for the 21st
century.
e. H.R. 830, The Paperwork Reduction Act of 1995
a. Report Number and Date.--Report No. 104-37, February 15,
1995.
b. Summary of Measure.--The Paperwork Reduction Act is
intended to:
1. Reauthorize appropriations for the Office of
Management and Budget's (OMB) Office of Information and
Regulatory Affairs (OIRA) to carry out the provisions
of the Paperwork Reduction Act of 1980 as amended.
2. Strengthen OIRA and agency responsibilities for
the reduction of paperwork burdens on the public,
particularly through the inclusion of all federally
sponsored collections of information in a clearance
process involving public notice and comment, public
protection, and OIRA review.
3. Establish policies to promote the dissemination of
public information on a timely and equitable basis, and
in useful forms and formats.
4. Strengthen agency accountability for managing
information resources in support of efficient and
effective accomplishment of agency missions and
programs.
5. Improve OIRA and other central management agency
oversight of agency information resources management
(IRM) policies and practices.
The legislation was premised on the committee's continuing
belief in the principles and requirements of the Paperwork
Reduction Act of 1980. All of the legislation's amendments to
the 1980 act, as amended in 1986, are intended to further its
original purposes--to strengthen OMB and agency paperwork
reduction efforts, to improve OMB and agency information
resources management, including in specific functional areas
such as information dissemination, and to encourage and provide
for more meaningful public participation in paperwork reduction
and broader information resources management decisions.
With regard to the reduction of information collection
burdens the legislation increases the act's 1986 goal of an
annual 5 percent reduction in the public paperwork burdens to
10 percent during the first 2 years of authorization and 5
percent thereafter. OMB is required to include in its annual
report to Congress recommendations to revise statutory
paperwork burdens if this goal is not reached. The legislation
includes third-party disclosure requirements in the definition
of collection of information to overturn the Supreme Courts
decision, Dole v. United Steelworkers of America (494 U.S. 26
(1990)). This will ensure that collection and disclosure
requirements are covered by the OMB paperwork clearance
process. The act is also amended to require each agency to
develop a paperwork clearance process to review and solicit
public comment on proposed information collections before
submitting them to OMB for review. Public accountability is
also strengthened through requirements for public disclosure of
communications with OMB regarding information collections (with
protections for whistle blowers complaining of unauthorized
collections), and for OMB to review the status of any
collection upon public request. In combination with more
general requirements, such as encouraging data sharing between
the Federal Government and State, local and tribal governments,
the legislation strives to further the act's goals of
minimizing Government information collection burdens, while
maximizing the utility of Government information.
The legislation also adds further detail to strengthen
other functional areas such as statical policy and information
dissemination. The dissemination provisions, for example,
delineate clear policies that were not articulated in the act's
previous references to dissemination. The provisions require
OMB to develop governmentwide policies and guidelines for
information dissemination and to promote public access to
information maintained by Federal agencies. In turn, the
agencies are to: ensure that the public has timely and
equitable access to public information; solicit public input on
their information dissemination activities; and not establish
restrictions on dissemination or redissemination. Emphasis is
placed on efficient and effective use of new technology and a
reliance on a diversity of public private sources of
information to promote dissemination of Government information,
particularly in electronic formats.
With regard to over-arching information resources
management (IRM) policies, the legislation charges agency heads
with the responsibility to carry out agency IRM activities to
improve agency productivity, efficiency, and effectiveness. It
makes program officials responsible and accountable for those
information resources supporting their program. The IRM mandate
is strengthened by focusing on managing information resources
in order to improve program performance, including the delivery
of services to the public and the reduction of information
collection burdens on the public.
To improve accountability for agency IRM responsibilities,
as well as responsibilities for paperwork reduction, the agency
responsibilities provided in the act are amended to complement
and more directly parallel OMB's functional responsibilities.
Further, to prompt agencies to reform their management
practices, the bill requires each agency head to establish an
IRM steering committee, develop an IRM strategic planning
process, and develop IRM performance measures linked to program
performance. In these various pursuits, the goal is to
integrate the management of information resources with program
management and assure the use of the resources to achieve
agency missions. With the Federal Government spending
approximately $25 billion a year on information technology, the
stakes are too high not to press for the most efficient and
effective management of information resources. The reduction of
information collection burdens on the public and maximizing the
utility of Government information will not otherwise occur.
c. Legislative History/Status.--H.R. 830, the Paperwork
Reduction Act of 1995, was introduced on February 6, 1995, by
Government Reform and Oversight Committee Chairman William F.
Clinger, Jr., for himself, Congressmen Norman Sisky, David
McIntosh, chairman of the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs, and other
Members of Congress.
The President signed the bill on May 22, 1995, as Public
Law 104-13.
d. Hearings and Committee Actions.--After introduction,
H.R. 830 was referred to the Committee on Government Reform and
Oversight. On February 6, 1995, Chairman Clinger referred the
bill to the Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs for consideration. On
February 7, 1995, the subcommittee, under the direction of
Chairman McIntosh, held a hearing to consider reauthorization
of appropriations for the Paperwork Reduction Act, OIRA's
implementation of the act, and OIRA's conduct of regulatory
review under Presidential Executive order. Testimony included
comment and discussion of H.R. 830.
Witnesses at the February 8, 1995 hearing were: Sally
Katzen, Administrator, Office of Information and Regulatory
Affairs; Mr. James McIntyre, former Director of the Office of
Management and Budget and currently an attorney; Mr. James
Miller, former Director of the Office of Management and Budget
and current chairman of the Citizens for a Sound Economy; Mr.
Gene Dodaro, Assistant Comptroller General, General Accounting
Office accompanied by Mr. Chris Hoenig, also of GAO; Mr. Robert
Coakley, executive director, Council on Regulatory and
Information Management; Jack Sheehan, legislative director,
United Steelworkers of America; and Bob Stolmeier, president,
KLC Corp.
At the hearing, Clinton administration witness Sally Katzen
testified squarely in support of H.R. 830:
It is truly gratifying to be here today in what I
hope is the last phase of improving and strengthening
the Paperwork Reduction Act. For more than 2 years
Congress has had legislative proposals to update and
expand the Paperwork Reduction Act consistent with and
building upon its original purposes. My commendations
to the congressional staff who have worked
professionally and constructively to develop a
consensus, a bipartisan approach, which is contained in
H.R. 830 and in the Senate, 244, which the Senate
Governmental Affairs Committee reported out on February
1. We are pleased to report that the administration
supports those efforts.
After taking into consideration the testimony of the
witnesses at the February 7 hearing, and after further
consultation with the staff of the House Small Business
Committee, the Senate Committee on Governmental Affairs, and
with staff of the General Accounting Office and Office of
Management and Budget, the subcommittee held a mark-up of H.R.
830 on February 8, 1995. The full committee held its mark-up on
February 10, 1995, and voted, 40 in favor and 4 against, to
report H.R. 830, as amended, favorably to the full House.
f. S. 790, The Federal Reports Elimination and Sunset Act
of 1995
a. Report Number and Date.--Report No. 104-327, November 8,
1995.
b. Summary of Measure.--During consideration of S. 244 the
Paperwork Reduction Act of 1995 (PRA), the Senate adopted two
amendments which dealt with the elimination or modification of
certain congressionally mandated reporting requirements and
also placed a sunset on other similar reports. These amendments
were offered by Senators John McCain (R-AZ) and Carl Levin (D-
MI). Conferees meeting to resolve differences between the House
and Senate versions of the PRA agreed to offer the McCain and
Levin amendments as separate and freestanding legislation. The
PRA was signed into law on May 22, 1995, as Public Law 104-13
without the McCain and Levin amendments.
After the President signed the Paperwork Reduction Act of
1995 into law, House and Senate staffers in both the majority
and minority began meeting to initiate the work necessary to
present this bill to the House Government Reform and Oversight
Committee and the Senate Governmental Affairs Committee.
The Paperwork Reduction Act sets the standard by which
Congress can continue to alleviate the paperwork burden on
executive branch agencies. The Federal Report Elimination and
Sunset Act of 1995 continues that work. By mandate, executive
branch agencies annually produce thousands of reports to
Congress. Many are outdated and no longer necessary. This bill
eliminates or modifies nearly 200 such reporting requirements
and establishes a sunset on all others.
S. 790 was needed not merely to alleviate the burden on the
executive branch but to also allow the Government to focus its
energy on more important issues, thereby better utilizing their
time. On December 21, 1982, President Ronald Reagan signed the
Congressional Reports Elimination Act of 1982 into law (Public
Law 97-375) and 13 years later the Federal Reports Elimination
and Sunset Act continues, with the same strong bi-partisan
support that the 1982 act received, to relieve the Federal
Government of needless and burdensome paperwork. President
Reagan said in his statement that this was a, ``useful and
constructive step in reducing unnecessary paperwork and in
improving executive branch operations.'' Also, given increasing
costs of report production, this bill will help control costs
in keeping with this committee's efforts to increase the
efficiency of the Federal Government.
c. Legislative History/Status.--Senators McCain and Levin
introduced S. 790, the Federal Reports Elimination and Sunset
Act of 1995, on May 11, 1995. It was reported favorably by the
Senate Committee on Governmental Affairs and was approved by
the Senate by a unanimous voice vote on July 17, 1995.
In his floor speech, Senator Levin compared S. 790 to S.
2157, which he and Senator Cohen introduced in 1994. The
Senator explained that the list of reports included in S. 790
was first compiled by sending out letters asking all 89
executive and independent agencies to identify those reports
required by law which were no longer necessary or useful and
could be eliminated or modified. Agencies were asked to produce
a clear and substantiated justification for each recommendation
made.
Following Senate approval, S. 790 was sent to the U.S.
House of Representatives on July 18, 1995, and held at the
Clerk's desk. On September 12, 1995, S. 790 was referred to the
House Committee on Government Reform and Oversight. On
September 14, 1995, Congressman Robert Ehrlich (R-MD)
introduced the House companion to S. 790, H.R. 2331, with 9
additional co-sponsors. Congressman Ehrlich echoed the concerns
of the Paperwork Reduction Act conferees by urging his
colleagues to co-sponsor H.R. 2331 and, ``lighten the red tape
burden on executive branch agencies so that our government can
operate with fewer restrictions and greater efficiency.'' The
Congressman also stated that he has, ``the upmost confidence
that the President will want to sign this important piece of
legislation into law because it allows executive branch
agencies to focus more resources on important current issues as
opposed to focusing on outdated and unnecessary reporting
requirements.''
d. Hearings and Committee Actions.--The Government Reform
and Oversight Committee, working in cooperation with the Senate
Governmental Affairs Committee, distributed a copy of this
report to all the House and Senate full committee chairmen and
ranking minority members to elicit their views as to whether
the changes being made would impede their committees
legislative and oversight functions. Their responses were
incorporated into the final amendments to this bill.
On September 21, 1995, S. 790 was amended and reported by a
unanimous voice vote by the full Committee on Government Reform
and Oversight. Committee Chairman William F. Clinger, Jr. (R-
PA) praised the Reports Elimination and Sunset Act of 1995 by
stating, ``this legislation will continue the very positive
work this committee started with the Paperwork Reduction Act in
a continuing effort to eliminate Federal paperwork burdens.''
Congresswoman Cardiss Collins (D-IL), the committee's ranking
minority member, also expressed her support.
During the committee's September 21, 1995 consideration of
S. 790, two en-bloc amendments were offered and passed without
objection. The first, by Congresswoman Collins, modified the
bill as requested by the International Relations Committee,
deleting some of the reports that were slated for elimination
and making some minor technical changes. It was approved by a
voice vote.
The second amendment was offered by Congressman Ehrlich and
also passed by a voice vote. A portion of the Ehrlich amendment
reinstated the Estimated expenditures under the Food Stamp
Program report, at the request of the House Agriculture
Committee. The information contained in this report was
necessary to the committee as it prepared to vote on the Farm
bill.
Also included in this en-bloc amendment was a request from
the U.S. Railroad Retirement Board modifying a report dealing
with 5-year retirement fund projections to allow for greater
accuracy in projecting funds numbers. S. 790 was approved by
the Government Reform and Oversight Committee by a unanimous
voice vote.
g. H.R. 3864, General Accounting Office Management Reform
Act of 1996
a. Report Number and Date.--None.
b. Summary of Measure.--Title I eliminates over 100
existing statutory mandates affecting GAO that do not represent
the most efficient and effective use of GAO's limited
resources. Most of the provisions of title II fall into one of
the following two categories:
Elimination of ``executive'' type functions. These
provisions relieve GAO of statutory functions that do
not further GAO's current mission and are more
appropriate for performance by the executive branch.
Functions that are still relevant to government
operations are transferred to executive branch
agencies. Some of the functions are simply obsolete;
these functions are repealed.
Elimination of auditing and reporting mandates. These
provisions relieve GAO of statutory auditing and
reporting requirements, while preserving GAO's
authority to conduct the audit pursuant to a specific
Congressional request or at its own initiative. Thus,
the provisions give GAO flexibility to apply its
resources where they are most needed.
Title I includes a number of other provisions that will
enhance the efficiency of GAO's operations, and eliminate
paperwork requirements for GAO as well as executive branch
agencies.
Section 211 of the Legislative Branch Appropriations Act,
1996 (Public Law 104-53, 109 Stat. 535) transferred a number of
GAO's ``executive'' type functions to the OMB, effective on
June 30, 1996, and authorized the Director of OMB to delegate
those functions to other Federal agencies. In all but a few
cases, the Director has now delegated the functions.
Title II of the bill makes conforming amendments to the
statutes underlying the functions covered by section 211 of the
1996 Appropriations Act in order to reflect the transfers to
OMB and further delegations by OMB of those functions. For the
most part, the conforming amendments of title II delete
references to the Comptroller General or GAO in these
underlying statutes and substitute references to the officials
or agencies now vested with responsibility for the functions
pursuant to section 211 of the 1996 Appropriations Act. Where
the delegation of a function has not been completed, the
conforming amendment reflects the transfer to OMB and preserves
the OMB Director's authority to delegate further.
c. Legislative History/Status.--Government Reform and
Oversight Committee member, Representative Steve LaTourette (R-
OH), introduced H.R. 3864. The bill was referred to the
Committee on Government Reform and Oversight on July 22, 1996,
and was approved as amended on July 25, 1996. H.R. 3864 passed
the House of Representatives on September 4, 1996, by voice
vote. The bill was passed by unanimous consent of the Senate on
October 3, 1996. It was signed by the President on October 19,
1996 and became Public Law No. 104-316.
d. Hearings and Committee Actions.--On April 30, 1996, the
Subcommittee on Government Management, Information, and
Technology held hearings on the oversight of the General
Accounting Office. Subcommittee Chairman Stephen Horn presided
over the testimony of John A. Koskinen, Deputy Director for
Management, Office of Management and Budget; R. Scott Fosler,
president, National Academy of Public Administration; Thomas V.
Fritz, president and chief of Executive Officer, Private Sector
Council; Cornelius E. Tierney, professor of accountancy,
director, Center for Public Financial Management, School of
Business and Public Management, the George Washington
University; Charles A. Bowsher, Comptroller General of the
United States; and James F. Hinchman, Special Assistant to the
Comptroller General.
h. H.R. 3136, title III, subtitle E, the ``Congressional
Review of Agency Rulemaking,'' (Public Law No. 104-
121, title II, subtitle E)
a. Report Number and Date.--Although there was no committee
report on the ``Small Business Regulatory Enforcement Fairness
Act of 1996'' (title II) or the ``Congressional Review of
Agency Rulemaking'' (subtitle E), the Committees of
Jurisdiction in the House and Senate filed a joint statement in
the Congressional Record in lieu of a statement of managers.
See 142 Cong. Rec. E571, 574-79 (daily ed. April 19,1996)
(statement of March 28, 1996 by Chairman Hyde for the
committees of jurisdiction); 142 Cong. Rec. S3683-87 (daily ed.
April 18, 1996) (statement of Senator Nickles for himself and
for Senators Reid and Stevens).
b. Summary of Measure.--The Congressional Review Act (CRA)
adds a new chapter 8 to the Administrative Procedure Act that
requires executive branch agencies to submit their new rules to
Congress for congressional review. See 5 U.S.C. chapter 8
(Supp. 1996). The CRA allows Congress to review each new rule
and consider a joint resolution of disapproval to overrule it
under expedited House and Senate procedures. Under the
Congressional Review Act, no rule may go into effect until it
is delivered to the House, the Senate, and to GAO. Although the
CRA applies to almost all rules, ``major rules'' are delayed in
their effectiveness for 60 calender days to provide Congress
with a chance to reject problematic rules before they have an
adverse impact. Moreover, the term ``rule'' is defined very
broadly to include all general agency statements that affect
the public, including ``interpretive'' rules, agency ``policy
statements,'' ``guidelines,'' and ``staff manuals.'' In
addition to submitting the rules themselves, agencies will have
to submit a report to Congress on each rule stating whether
they have complied with the Unfunded Mandates Reform Act, the
Regulatory Flexibility Act, and whether they have conducted a
valid cost-benefit analysis, taking analysis, and federalism
assessment as set forth in the Reagan, Bush, and Clinton
Executive orders. If a resolution of disapproval is introduced
to overturn a problematic regulation, Congress may reject the
rule using expedited procedures that eliminate the Senate
filibuster and require only a simple majority in each House for
passage. If Congress does reject a rule, the rule may not be
reissued in substantially the same form without congressional
authorization.
The intent of the CRA is to bring increased accountability
to the rulemaking process. It is also expected that increased
congressional involvement will make the agencies more open and
responsive to comments from regulated entities during the
rulemaking process and during enforcement proceedings. This
will foster a more cooperative, less threatening, regulatory
environment. As a result, it is the committee's hope and
intention that agencies will issue more flexible and less
burdensome rules that achieve the same or superior level of
protection of health, safety, and the environment.
c. Legislative History/Status.--The Senate passed four
different versions of the ``Congressional Review Act'' (CRA)
and the House passed two different versions of it before the
act was incorporated in H.R. 3136 and became part of Public Law
104-121 (title II, subtitle E). Senator Don Nickles introduced
the first version of the CRA, S. 219, as a companion bill to
H.R. 450, the Regulatory Transition Act of 1995, which
originated in the House Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs. The Senate
passed S. 219 by a recorded vote of 100-0 on March 29, 1995. On
November 9, 1995, the House and Senate then passed an identical
version of the CRA as section 3006 of title III of H.R. 2586,
the first debt limit bill. Chairman Bob Walker included section
3006 in his amendment to the debt limit bill at the request of
Chairman William F. Clinger, Jr. and Representative David M.
McIntosh who were the principal House sponsors of the
legislation. The President vetoed H.R. 2586 for reasons
unrelated to section 3006. On March 19, 1996, the Senate passed
a third version of the CRA as part of S. 942, the Small
Business Regulatory Enforcement Fairness Act, by a recorded
vote of 100-0. The language of the final bill was the product
of informal discussions between the House and Senate sponsors
and committees of jurisdiction during March 1996. On March 28,
1996, the House and Senate passed H.R. 3136, the Contract with
America Advancement Act of 1996, which included the CRA. (The
CRA was originally subtitle E of title III, but was
redesignated as subtitle E of title II in Public Law 104-121.)
The President signed the act on March 29, 1996.
d. Hearings and Committee Actions.--None were held.
i. S. 1577, To amend Title 44 United States Code, to
authorize appropriations for the National
Historical Publications and Records Commission.
a. Report Number and Date.--No House report was filed.
b. Summary of Measure.--S. 1577 reauthorizes appropriations
for the National Historical Publications and Records Commission
at $10 million annually for Fiscal Years 1998, 1999, 2000, and
2001.
c. Legislative History/Status.--The Committee on Government
Reform and Oversight reported out H.R. 3625, the identical
companion bill to S. 1577. S. 1577 was reported from the Senate
Governmental Affairs Committee on June 19, 1996 (S. Rept. No.
104-283). S. 1577 passed the Senate on July 25, 1996 and was
received in the House on July 26, 1996 and held at the desk.
Rules were suspended and the measure passed the House on
September 27, 1996, and was signed into law by the President on
October 9, 1996, to become Public Law 104-274.
d. Hearings and Committee Actions.--None were held.
j. H.R. 2326, Health Care Fraud and Abuse Prevention Act of
1995
a. Report Number and Date.--None.
b. Summary of Measure.--The purpose of H.R. 2326 is to
prevent, detect, control and penalize fraud and abuse in the
provision of health care. The bill provides for improved
coordination and data sharing among Federal, State and local
law enforcement agencies and private insurers. It creates a new
source of funds comprised of fines, penalties, damages and
proceeds from forfeitures collected from those in violation of
Federal health care fraud and abuse provisions; such funds to
be used by Federal and State law enforcement agencies to
supplement regularly appropriated funds. The measure
establishes, recognizes and defines health care fraud and abuse
as a Federal crime and prescribes penalties for violation
thereof. Additionally, the legislation details initiatives to
be taken in control of fraud and abuse.
c. Legislative History/Status.--H.R. 2326 was introduced on
September 13, 1995, and referred to Government Reform and
Oversight, Commerce, and Ways and Means. On October 16, 1995,
Title II of H.R. 2326 was offered by Mr. Schiff as an amendment
to H.R. 2425 ``The Medicare Preservation Act of 1995,'' while
Mr. Shays offered Title III as an amendment to that measure.
The Rules Committee found the Schiff Amendment in order and it
was incorporated into H.R. 2425. The Shays amendment was not.
Following mark-up by Commerce, H.R. 2425, which included Title
II of H.R. 2326, was incorporated, as amended, into H.R. 2491,
``The Balanced Budget Act of 1995,'' which passed the House on
November 20, 1995. The bill was then passed by the Senate and
subsequently vetoed by the President.
d. Hearings and Committee Actions.--A hearing was held on
September 28, 1995, before the Subcommittee on Human Resources
and Intergovernmental Relations to consider both H.R. 2326 and
H.R. 1850 introduced by Mr. Towns. Testimony was heard from
Helen Smits, M.D., Deputy Administrator, Health Care Financing
Administration, accompanied by Bill Gould, Special Assistant to
the Administrator; Gerald Stern, Special Counsel for Health
Care Fraud, Department of Justice; Lovola Burgess, past
president, American Association of Retired Persons; William J.
Mahon, executive director, National Health Care Anti-Fraud
Association; and Thomas A. Schatz, president, Citizens Against
Government Waste. Dr. Smits was wholly in favor of the
legislation pointing out the benefits in coordination of law
enforcement. Mr. Stern also spoke in favor of the bill, but
voiced some concerns held by the Department of Justice
specifically regarding the proposed authority of the FBI to
issue administrative subpoenas. Ms. Burgess, Mr. Mahon, and Mr.
Schatz all spoke in support of both bills although the
provisions in H.R. 2326 are more far reaching than H.R. 1850.
The hearing ended with the panel members being encouraged by
the Members to speak to their own Members and urge co-
sponsorship of H.R. 2326.
k. H.R. 3078, Federal Agency Anti-Lobbying Act
a. Report Number and Date.--None.
b. Summary of Measure.--The purpose of the bill is to
prohibit the expenditure of appropriated funds in an attempt by
executive agencies to create public opposition to pending
legislation. Such actions clearly violate the provisions of 18
U.S.C. 1913, however the present and previous administrations
have interpreted this section narrowly in a fashion that limits
all restrictions. As a consequence, this bill expands and
clarifies the limitation on using public money for grassroots
lobbying designed to affect the legislative process.
This important legislation emanates from a series of
investigations conducted by several congressional committees.
The Government Reform and Oversight, Transportation and
Infrastructure, and Commerce Committees have all identified
instances where carefully designed public relations campaigns
have appealed for public support without directing citizens to
contact their Congressional representatives.
c. Legislative History/Status.--H.R. 3078, The Federal
Agency Anti-Lobbying Act was introduced on March 13, 1996 and
referred to the Committee on Government Reform and Oversight.
On May 15, 1996, a full committee hearing was conducted on the
issue.
d. Hearings and Committee Actions.--The Government Reform
and Oversight Committee held a hearing on this legislation on
May 15, 1996. Testimony was heard from Jonathan Cannon, General
Counsel, U.S. Environmental Protection Agency; Joseph B. Dial,
commissioner, Commodity Futures Trading Commission; Robert
Nordhaus, General Counsel, Department of Energy; J. Davitt
McAteer, Acting Solicitor General, Department of Labor; Al
Cors, Jr, director of government relations, National Taxpayers
Union; Robert P. Murphy, General Counsel, U.S. General
Accounting Office; Louis Fisher, Senior Specialist in American
National Government, Congressional Research Service; N. Jerold
Cohen, chairman, Section on Taxation, American Bar Association;
Hon. Senator Ted Stevens of Alaska; and Hon. Congressman W.J.
(Billy) Tauzin of Louisiana.
l. ``Proceedings Against John M. Quinn, David Watkins, and
Matthew Moore (Pursuant to Title 2, United States
Code, Sections 192 and 194,'' House Report 104-598,
May 29, 1996.
a. Summary.--Weeks after the Travel Office firings,
President Clinton staved off a congressional inquiry into the
controversy by committing to then-House Judiciary Committee
Chairman Jack Brooks in a July 13, 1993, letter: ``. . . you
can be assured that the Attorney General will have the
Administration's full cooperation in investigating those
matters which the Department wishes to review.'' In fact, that
cooperation was by no means forthcoming from the White House.
Not only was this established in the committee's October 24,
1995, hearing (see Part Two I.A.3.b. above), it was the
conclusion of the Clinton administration's own Justice
Department. In a September 8, 1994, memo to Acting Criminal
Division Chief Jack Keeney, Justice's Chief of the Public
Integrity Division, Lee Radek, wrote:
At this point we are not confident that the White
House has produced to us all documents in its
possession relating to the Thomason allegations . . .
the White House's incomplete production greatly
concerns us because the integrity of our review is
entirely dependent upon securing all relevant
documents.
In the course of its investigation, the committee came to
share in these concerns. Beginning in the fall of 1995, the
Clinton White House repeatedly assured the committee that it
had produced all documents relevant to the committee's
Travelgate investigation. Despite these assurances, White House
documents critical to the investigation continued to surface
throughout 1996 until August. White House delays, denials and
general obfuscation frustrated the committee's investigative
efforts throughout the 104th Congress.
One such document was an undated 9-page memo written by
David Watkins--likely drafted in the fall of 1993--in which
Watkins cited pressures by First Lady Hillary Rodham Clinton as
a major factor in his decision to fire the Travel Office
employees. Mr. Watkins wrote that this self-styled ``soul
cleansing'' memo represented his ``first attempt to be sure the
record is straight, something I have not done in previous
conversations with investigators--where I have been as vague
and protective as possible.''
The White House released this memo to the committee at 8:30
p.m. on January 3, 1996, after it had been released to the
press. Though it was responsive to subpoenas and document
requests made by several previous investigations, including
those of Independent Counsel Fiske, the General Accounting
Office and the Justice Department, this document was produced
to none of them.
The Watkins memo clearly contradicted repeated assertions
by the White House and First Lady Hillary Rodham Clinton that
the First Lady had had minimal involvement in the Travel Office
firings:
On Monday morning you [then-White House Chief of
Staff McLarty] came to my office and met with me and
Patsy Thomasson. At that meeting, you explained that
this was on the First Lady's ``radar screen.'' I
explained to you that I had decided to terminate the
Travel Office employees and you expressed relief that
we were finally going to take action (to resolve the
situation in conformity with the First Lady's wishes).
We both knew there would be hell to pay if, after our
failure to take swift and decisive action in conformity
with the First Lady's wishes.
Mr. Watkins concluded in this memo:
[Made] clear that the Travel Office incident was
driven by pressures for action originating outside my
Office. If I thought I could have resisted those
pressures, undertaken more considered action, and
remained in the White House, I certainly would have
done so. But after the Secret Service incident, it was
made clear that I must more forcefully and immediately
follow the direction of the First Family. I was
convinced that failure to take immediate action in this
case would have been directly contrary to the wishes of
the First Lady, something that would not have been
tolerated in light of the Secret Service incident
earlier in the year.
The apparent contradictions between Watkins' previous ``vague
and protective'' responses made to investigators looking into
the Travel Office matter and the ``soul cleansing'' memo led to
a criminal referral of the matter to Independent Counsel Starr
in early 1996.
In the wake of this memo's production, the committee issued
several subpoenas to the White House and current and former
White House officials and others to compel the production of
all relevant documents previously withheld. Months of
negotiations followed the failure of three parties in
particular to complete their productions in compliance with
their subpoenas: White House Counsel John M. Quinn, David
Watkins, and Matthew Moore, whom the committee learned had
copies of various drafts of the Watkins memo in his possession.
b. Hearings.--On May 8, 1996, the full committee voted to
hold Messrs. Quinn, Watkins and Moore in contempt for their
refusals to produce all documents responsive to the committee's
subpoenas.
c. Resolution.--The committee, in its May 8, 1996, vote:
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of John M. Quinn to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law; and be it further
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of David Watkins to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law; and be it further
Resolved, That pursuant to 2 U.S.C. 192 and 194, the
Speaker of the House certify the report of the
Committee on Government Reform and Oversight, detailing
the refusal of Matthew Moore to produce papers to the
Committee on Government Reform and Oversight, to the
United States Attorney for the District of Columbia,
for him to be proceeded against in the manner and form
provided by law.
d. Follow-up.--Mr. Moore eventually produced the documents
subpoenaed to the committee. Mr. Watkins, by now the subject of
an Independent Counsel investigation, declined to do so. Nor
had White House Counsel Quinn produced the documents required
as the May 30, 1996 date for a House vote on the contempt
resolution approached.
On May 30, 1996, the day on which the committee's contempt
resolution against White House Counsel Quinn was scheduled for
a vote on the floor of the House, the White House delivered
1,000 of the 3,000 pages of documents responsive to the
committee's subpoenas over which it previously had claimed
executive privilege. The White House also provided a privilege
log for documents it continued to withhold. As a result, the
committee postponed the contempt vote in order to review the
materials produced.
A critical document long-withheld from the committee under
unjustified claims of executive privilege was turned over in
the May 30 production. The committee previously had been
unaware of the existence of this document: the White House's
December 1993 request of Billy Dale's confidential FBI
background file--ostensibly made because Dale was being
considered for ``Access (S)''--7 months after Dale was fired
from the Travel Office. This request was made even as the
Justice Department was conducting a criminal investigation of
Dale and its discovery led to revelations that the Clinton
administration wrongly had requested and received hundreds of
confidential FBI background files of former Reagan and Bush
administration officials. (See Part Two I.A.3.c. above.)
After further discussion and correspondence, the White
House and the committee came to an agreement whereby the White
House produced to the committee some 1,400 of the remaining
2,000 pages of documents on August 15, 1996.
B. BUDGET PROCESS
House Rule X(1)(g) (4) and (6) confers upon the Committee
on Government Reform and Oversight jurisdiction over,
``[b]udget and accounting measures, generally,'' and ``[t]he
overall economy, efficiency and management of government
operations and activities.'' As explained in the Statement of
Understanding between the Committee on Government Reform and
Oversight and the Committee on the Budget, the Committee on
Government Reform and Oversight's jurisdiction includes,
``process changes in federal rescission or impoundment
authority; measures relating to Executive agency budgeting,
including the submission of agency performance reports or
plans, or agency regulatory plans, reports or reviews as part
of the budget process; measures relating to Executive agency
financial management; and process changes leading to the
required adoption of a Federal capital budget or joint capital/
operating budget which accounts for the fixed assets of the
United States.'' In addition, the committee enjoys jurisdiction
over ``special funds, accounts or spending set asides created
to reduce the deficit.''
The Committee on Government Reform and Oversight exercised
its budget jurisdiction extensively in the 104th Congress. In
addition to leading the campaign to enact the long-awaited line
item veto, the committee held hearings on performance-based
budgeting, financial and accounting improvements, entitlement
spending reductions, regulatory accountability and cost-benefit
comparisons, and biennial budgeting proposals.
The committee was extensively involved in the development
of the congressional budget resolutions for fiscal years 1996
and 1997, H. Con. Res. 67 and H. Con. Res. 178. Working with
the House and Senate Budget Committees, the Senate Committee on
Governmental Affairs, and the congressional leadership, the
committee developed a plan for mandatory spending reforms
within its jurisdiction totaling savings of more than $10
billion through fiscal year 2002. The committee's entitlement
spending reduction package included: Members and staff
congressional pension reforms to provide parity between the
congressional and civil service retirement systems; a
continuation of existing the 3 month cost of living increase
(COLA) delay for Federal retirees; a 0.5% increase in the
contribution Federal employees make to their own individual
retirement accounts; a 1.51% increase in the employing agency
contribution to the retirement accounts of their Civil Service
Retirement System (CSRS) employees; and a repeal of the
transitional appropriations currently provided to the U.S.
Postal Service. The committee package also included a proposal
to reform the McKinney Homeless Assistance Act to permit
homeless assistance organizations to obtain preferential access
to surplus Federal property. Pursuant to the directions of the
congressional budget resolution, the Government Reform and
Oversight Committee's reconciliation package was included in
H.R. 2491, the Balanced Budget Act of 1995. The bill was vetoed
by the President on December 6, 1995. It is the committee's
firm intent to pursue similar reforms in the 105th Congress.
The committee also considered legislation to require the
President to submit a Congressional Budget Office (CBO) scored
balanced budget for fiscal year 1997. The proposal was included
in H.J. Res. 134, which was signed into law on Jan. 6, 1996.
Public Law 104-94. Further attempts to require the permanent
submission of annual balanced budget plans by the President
were considered in conjunction with H.R. 4278, the Omnibus
Consolidate Appropriations Act of 1997, but were rejected by
the Senate.
Finally, the committee considered proposals to provide for
a deficit reduction ``lock box'' account, to set aside savings
gained through appropriation bill amendments for the purposes
of deficit reduction. The legislation, initially included in
H.R. 2127, the FY 1996 Labor, Health and Human Services, and
Education appropriations bill, was vetoed by the President. The
lockbox proposal was then attached by the House to H.R. 3019,
to provide further Omnibus Continuing Appropriations for 1996.
While the provision was dropped by the Senate, the committee
expects to revisit the measure in the 105th Congress.
C. FEDERAL PROCUREMENT POLICY--AN ERA OF REFORM
Each year the government spends about $200 billion on goods
and services, ranging from weapons systems to computer systems
to everyday commodities. Studies have shown that the current
system has cost too much, involved too much red tape, and ill-
served the taxpayer and industry.
In December 1994, a report prepared for the Secretary of
Defense found that, on average, the government pays an
additional 18 percent on what it buys solely because of
requirements it imposes on its contractors. That confirmed the
average estimate by major contractors surveyed by the General
Accounting Office that the additional costs incurred in selling
to the government are about 19 percent. While some of the
government's unique requirements certainly have been needed, we
clearly are paying an enormous premium for them--billions of
dollars annually.
And that has been only part of the government's inflated
cost of doing business--for it has included only what is paid
to contractors, not the cost of the government's own
administrative system. The government's contracting officials
have been confronted with a daunting array of mandates of their
own, often amounting to step-by-step prescriptions that
increase staff and equipment needs. This rigid, rule-based
process has left little room for the exercise of business
judgement, initiative, and creativity and often has forced the
professional staff to assume the role of box-checking robots.
These requirements have been well-intentioned. From the
time the Second Continental Congress established a Commissary
General in 1775, the procurement system commanded the attention
of both public officials and the American public. Unfortunately
and all too often, the attention has focused on individual
abuses rather than the operations of the system as a whole. In
response, Congress and the executive branch have maintained a
constant effort to correct wrongs or add particular
initiatives. Inevitably, after a while, often-uncoordinated
incremental efforts will tilt any system out of balance, until
the cost of requirements outweigh benefits. And, over the
years, that has become the state of our procurement system--an
unbalanced mass of requirements that lead, simply, to too much
money for too little product. Mr. Philip K. Howard in an
editorial on the government's procurement process in the Wall
Street Journal aptly described the state of the current process
as follows:
The rigid procedures designed to prevent squandering of
public money, as it turns out, function almost
perfectly to guarantee that the money gets squandered.
The committee recognized that it was critical in these
times of declining budgets to bring the government's
procurement system into balance.
The 103d Congress took a significant step toward
establishing a more commercial-like Federal contracting system
with the passage of the Federal Acquisition Streamlining Act of
1994 (FASA) (Public Law 103-355). FASA established a preference
for commercial items and simplified procedures for contracts
under $100,000, as well as addressing a wide spectrum of issues
regarding the administrative burden--on all sides--associated
with the government's specialized requirements. These ranged
from socio-economic laws to the government's oversight tools,
which over the years have resulted in major differences between
the government and commercial marketplaces.
But FASA went only part of the way, and as important as
that effort was, the committee recognized that more needed to
be done, particularly in these times of declining budgets, to
bring the government's procurement system into balance. In
addition to the fundamental legislative reforms made by the
Clinger-Cohen Act of 1996 (see Part Two I.A.4.d.), the
following issues were initiated/completed by the committee to
foster a procurement system which allows industry sellers and
government buyers to offer and acquire, respectively, maximum
value for the taxpayer.
1. Oversight of the Implementation of the Federal Acquisition
Streamlining Act of 1994 (FASA) (Public Law 103-355).
a. Summary.--At the time of its enactment, the Federal
Acquisition Streamlining Act of 1994 (FASA) (see House Report
103-884) was considered the most comprehensive procurement
reform effort in more than a decade. Yet, the committee
recognized that its true impact would not be realized fully
until the regulations were written to implement the new law.
The committee believed that much of the hard work was left to
the executive branch in seeing through the goals and purposes
of FASA. The committee expected that the regulation writers
would not only execute the letter of the law fully and
promptly, but would also carry out the spirit of what Congress
intended. This included not just writing and revising
regulations pursuant to the new law, but looking at and
attacking internal agency regulations and procedures which are
contrary to FASA's letter and spirit.
b. Hearings.--On February 21, 1995, the committee met to
review the Clinton administration's implementation plan for
FASA, begin the process of determining if the regulations will
carry out the spirit of what was intended by Congress, and
allow industry and other interested parties to comment on the
regulatory implementation for the record. The committee
received testimony from administration witnesses, Steven
Kelman, Administrator for Federal Procurement Policy at the
Office of Management and Budget; and Mrs. Colleen Preston, the
Deputy Under Secretary of Defense for Acquisition Reform,
regarding the progress-to-date on the implementation of FASA.
Industry representative submitted written testimony for the
record.
Dr. Kelman noted that the ``message of reform'' was being
heard by the administration and that the follow-on rules to
FASA were being written on an accelerated schedule. He stated
that 4 interim rules had been published, 15 proposed rules were
published, and 6 were expected to be released in the near
future. Mr. Kelman also discussed the establishment of Process
Action Teams, which were created by both he and Mrs. Preston in
order to expedite the regulatory writing process and FASA
implementation.
Mrs. Preston focused on the need for further reform so that
agencies such as the Department of Defense and others could be
``world class customers and suppliers.'' She emphasized the
need for continuing the effort to remove government-unique laws
and regulations from the acquisition of commercial products.
She also stated that the government must move from a risk
adverse system to one which understands and manages risk.
2. Review of the Federal Government's Acquisition Strategy Regarding
the Post Federal Telecommunications System 2000 Program (Post-
FTS2000).
a. Summary.--Currently the Federal Telecommunications
System 2000 (FTS 2000) is the government's long distance
telecommunications service. This multi-billion dollar program
provides telecommunications services to approximately 1.7
million users across the Federal Government. Through the hard
work of the General Services Administration (GSA) and an
interagency group of information resources management and
telecommunications professionals, the current FTS 2000 program
was largely successful in leveraging the emerging competition
in long-distance markets to save billions of dollars over GSA's
prior Federal Telecommunications Service network. The current
FTS 2000 contracts which were awarded in 1988 will expire in
December 1998, affording the government great opportunities and
challenges as it prepares to transition to a Post-FTS2000
environment.
Clearly, the telecommunications industry has changed
significantly since the initial contracts were awarded: the
array of available commercial services is broader; the number
of service providers has increased; and the availability and
nature of the underlying technologies themselves continue to
change. The government's appetite for communications services
has changed as well, with demand for more advanced data and
video services outdistancing growth in basic voice
communications services. Therefore, it is imperative that the
Post-FTS2000 program embrace a sensible acquisition approach
based on commercial practices and maximize the use of
commercially-available services to meet agency needs while
following an appropriate strategy for managing complex
government operations.
Monitoring the development of the next phase procurement
for the Federal Government's telecommunications system ensures
that the Federal Government receives technically-effective and
cost-efficient telecommunications services in a Post FTS2000
environment. It allows the government and the taxpayer to take
maximum advantage of the economies associated with increasing
competition in the new telecommunications environment and reap
the benefits for the best prices and excellent service quality
which helps the executive agencies to do their jobs of serving
the citizens more efficiently and effectively.
While GSA spent much time with the interagency group and a
broad cross-section of industry preparing an acquisition
strategy, initial proposals failed to take full advantage of
telecommunications reform along with today's rapidly changing
landscape of advancing technologies, new services, and emerging
service providers. Through months of working with this
committee, GSA ultimately developed a proposal which addressed
many of the issues raised by this committee and others and
which will enable the government to take full advantage of
rapid changes in the telecommunications services environment.
GSA is proceeding with this Post-FTS2000 acquisition strategy.
b. Hearings.--On March 21, 1995, the Subcommittee on
Government Management, Information, and Technology held a
hearing to solicit comment from the General Accounting Office,
the long distance carriers, system integrators and the Regional
Bell Operating Companies on the initial Post-FTS2000
acquisition strategy developed by the government. The General
Accounting Office raised several areas of concern and testified
that these concerns must be addressed before proceeding to the
next phase of the program. Other witnesses made reference to
the strategy as presented and gave comment according to the
particular segment of the industry.
3. Review of the Department of Defense's Acquisition of the Defense
Information Systems Network (DISN).
The Defense Information Systems Network (DISN) is the
Department of Defense's (DOD) worldwide telecommunications
infrastructure that provides the end-to-end information
transfer network for supporting military operations. DISN must
be transparent to its users, facilitate the management of
information resources, and be responsive to national security
and defense needs under all conditions in the most effective
manner. DOD has described its objective as being able to
provide military personnel with a secure, seamless, network
capable of operating across strategic and tactical
communications boundaries. Global interoperability and
information warfare-protection are two of DISN's key features
to deliver protected voice, video, data, and imagery services.
Since DISN will be the information transport vehicle for
the next century, its acquisition strategy was designed to
introduce new cost-effective technology, including space-based
capabilities, on a global basis over the life of the system.
This strategy will allow DOD to manage DISN services while
maintaining a balance in three areas: exploitation of leading-
edge technology opportunities, consolidation of geographically
disparate network, and operation within fiscal constraints.
Given the importance of consolidating and modernizing
defense telecommunications capabilities to meet the emerging
national security challenges facing the Nation, the committee
along with the Committee on National Security, was active in
urging DOD to move forward without delay on the DISN program.
The committees recognized that a multitude of providers now
compete to offer an increasingly broad array of commercially-
available telecommunications services and that competition
continues to drive the development and deployment of advances
in the underlying technologies used to deliver enhanced
performance and new capabilities. Therefore, in letters and
through a series of meetings, the committees urged DOD to
transition to DISN on schedule in order to ensure the
availability of state-of-the-art telecommunications to meet the
Nation's defense needs.
To date, DOD is proceeding and has awarded the contracts
for global support services (valued at $2 billion) and
switching services for the continental United States (valued at
$400 million). It is expected that in the early part of 1997,
DOD will award the contracts for transmission services for the
continental United States (valued at $5 billion) and global
video services (valued at $125 million).
4. Review of the General Services Administration's (GSA) Management of
the Multiple Award Schedule (MAS) Program.
The Multiple Award Schedule (MAS) Program is the primary
and simplified method to enable Federal agencies purchase
relatively small quantities of commercially-available, common
use, off-the-shelf items and services while securing the
benefits of the Federal Government's aggregate purchasing
volume. The General Services Administration (GSA) awards
contracts to multiple suppliers of similar items. Federal
agencies order products and services through the MAS Program at
prenegotiated prices commensurate with the vendors' commercial
discounts granted for comparable purchase volumes, given terms
and conditions, and pay vendors directly for their purchases.
There are 121 schedules which generate an annual market of $5-7
billion. The MAS program includes 4,000-5,000 contractors, two-
thirds of which are small businesses.
The efficiency and effectiveness of the MAS Program has
been debated since its inception. After many studies by GAO,
reviews by Congress, and input from industry, GSA made many
significant changes to the MAS Program. These changes will
allow the MAS Program to meet a broader range of customer
requirements at a time when agencies are looking for easy to
use, low cost procurement solutions. Among these were:
eliminating the contract-wide price reduction clause, changing
the price reduction clause to enable contractors to offer
reduced prices to Federal agencies on a spot basis; and
removing the ``maximum order limitation'' to permit agencies to
place large-scale orders through the schedule program. The
committee supported and urged changes like these to increase
the use of the MAS program as a governmentwide vehicle for the
acquisition of commercial products and services.
However, GSA also proposed to established some rules which
would permit post-award audits of commercial products under the
MAS program. The committee, along with the Committee on
National Security, concluded that this would be inappropriate
and contrary to the intent of the Clinger-Cohen Act. The
committees believed that, when Congress repealed the authority
of Federal agencies to perform post-award audits of suppliers
of commercial items in the Clinger-Cohen Act, Congress clearly
did not intend Federal agencies to subsequently determine
though agency supplements to the Federal Acquisition Regulation
whether and to what extent post award audit access is
appropriate on commercial item contracts. The committees'
opposition to the proposed rule was communicated to the Office
of Management and Budget through letters and meetings. A final
rule on this issue is pending at GSA.
5. Oversight of Reform of the Acquisition System of the Federal
Aviation Administration (FAA).
As a result of the steady growth in air traffic operations
and the failures of aging equipment in the air traffic control
system, the Federal Aviation Administration's (FAA) timely
acquisition of new equipment became increasingly critical for
aviation safety and efficiency. However, the procurement system
at FAA had many problems which raised questions about the
agency's ability to field new equipment within cost, schedule,
and performance parameters.
Thus, the reform of FAA's procurement system became the
focus of much debate. The FAA claimed it was choking from the
mandated governmentwide procurement laws and argued that its
failures in its procurements of high technology equipment could
be solved if only it could break clear of the Federal
procurement system. Some Members of Congress disagreed and
believed that FAA's failures in the past were due to its own
management problems and were not due to Federal procurement
laws.
Nonetheless, the Department of Transportation
Appropriations Act for Fiscal Year 1996 (Public Law 104-50)
included language which gave FAA the authority to establish a
completely new acquisition management system. The law exempted
the FAA from virtually all Federal procurement laws and
regulations. Prior to putting in place its new system by the
April 1, 1996 effective date, FAA met with the committee and
briefed the committee on its activities. Review of the new
acquisition management system continues.
In addition, H.R. 2276 which established FAA as an
independent agency exempted FAA from the same laws and
regulations as did Public Law 104-50. While H.R. 2276 was
passed by the House on March 12, 1996, it was never considered
by the Senate. However, during consideration of H.R. 2276 in
the House, the committee expressed its support for fundamental
government reforms generally and FAA procurement reform
specifically.
D. GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 (GPRA)
On March 6, 1996, the Senate Governmental Affairs Committee
joined the committee in holding an informational hearing on the
purpose and foundation for the Government Performance and
Results Act of 1993 (Public Law 103-62). The purpose of the
hearing was to explore the foundations of the act and draw
parallels between previous experiments with performance
measurement in foreign governments and at the State and
municipal level and its application at the Federal level.
The hearing consisted of two panels. The first witness was
Comptroller General of the General Accounting Office, Charles
Bowsher. Mr. Bowsher gave testimony on the Government
Performance and Results Act, its purpose and provisions. He
also emphasized the importance of continued Congressional
involvement to the long-term success of the act. Noting that
consultation with Congress is mandated by the statute, the
Comptroller General stressed that the act could become a
meaningless management exercise unless the information prepared
by agencies is a decisionmaking tool for members and
committees. Mr. Bowsher took numerous questions from the
Members of the House and Senate.
The second panel began with testimony from Dr. Donald F.
Kettl, senior fellow of the Brookings Institution and professor
of Public Policy and Political Science at the University of
Madison as Wisconsin. Dr. Kettl advised the committees that due
to the current fiscal constraints, government needs to increase
productivity in order to meet current service needs. One
promising way to meet increased demands with reduced, stable on
only slowly increasing resources is through managing for
performance. This technique has a very long time-horizon,
however, and the Federal Government is at least a decade behind
New Zealand, Australia and Great Britain, which have been
experimenting with performance measurement and management.
Reports from overseas indicate that those governments are still
working with great diligence to master this extremely complex
task. Finally the committees heard from the Commonwealth of
Virginia, the city of Phoenix, AZ and the government of
Australia each of which has been measuring government
performance as a means to increase government efficiency and
citizen satisfaction with government services.
The hearing was intended to be the first of three hearings
on GPRA. Two additional hearings were to have reviewed the
status of GPRA pilot projects and departmental progress in
implementing the act. The sequence of events involving the FBI
files scandal preempted the committees' planned follow-on
hearings.
II. Investigations
A. INVESTIGATIONS RESULTING IN FORMAL REPORTS
GOVERNMENT REFORM AND OVERSIGHT COMMITTEE
Hon. William F. Clinger, Jr., Chairman
1. ``A Citizen's Guide on Using the Freedom of Information Act and the
Privacy Act of 1974 To Request Government Records,'' House
Report No. 104-156, June 22, 1995, First Report by the
Committee on Government Reform and Oversight.
a. Summary.--The Freedom of Information Act (FOIA), enacted
in 1966, presumes those records of the executive branch of the
U.S. Government are accessible to the public. The Privacy Act
of 1974 is a companion to FOIA and regulates Government agency
recordkeeping and disclosure practices. The Freedom of
Information Act provides that citizens have access to Federal
Government files with certain restrictions. The Privacy Act
provides certain safeguards for individuals against an invasion
of privacy by Federal agencies and permits them to see most
records pertaining to them maintained by the Federal
Government.
A Citizen's Guide on Using the Freedom of Information Act
and Privacy Act of 1974 To Request Government Records, House
Report 104-156, dated June 22, 1995, and issued by the House
Committee on Government Reform and Oversight, explains how to
use the two laws and serves as a guide to obtaining information
from Federal agencies. The complete texts of the Freedom of
Information Act, as amended (5 U.S.C. 552), and the Privacy
Act, as amended (5 U.S.C. 552a), are reprinted in the committee
report.
b. Benefits.--Federal agencies use the Citizen's Guide in
training programs for government employees who are responsible
for administering the Freedom of Information Act and the
Privacy Act of 1974. The Guide enables those who are unfamiliar
with the laws to understand the process and to make requests.
In addition, the complete text of each law is included in an
appendix. The Government Printing Office and Federal agencies
subject to the Freedom of Information Act and the Privacy Act
of 1974, distribute this report widely. The availability of
these acts to all Americans allows executive branch information
to be widely available.
c. Hearings.--None.
2. ``Creating a 21st Century Government,'' House Report No. 104-434,
December 21, 1994, Second Report by the Committee on Government
Reform and Oversight, Together With Additional Views.
a. Summary.--The purpose of the Government Reform and
Oversight Committee field hearings on ``Creating a 21st Century
Government'' was to learn from the American public, State and
local government officials and the private sector their
suggestions and experiences on creating innovative,
streamlined, and cost effective organizations. The committee
intends that Congress learns from and adopt some of these
successful strategies in an effort to restructure the executive
branch and better meet the needs of Americans today and in the
21st century.
In its effort to hear from people outside Washington, DC,
the committee invited witnesses from State and local
government, the private sector, and the American public to
testify or participate in an open forum in which members could
hear their experiences and ideas with regard to organizational
downsizing. Members of the committee traveled to Parma Heights,
OH; Upper Montclair, NJ; Federal Way, WA; Long Beach, CA;
Albuquerque, NM; and Charlotte, NC. Each one of these cities
has recently challenged inefficient government by revitalizing
its main functions in order to survive, compete, prosper and
provide for the needs of its citizens. Identifying what has
worked, what has hindered their reorganization efforts and how
best to implement a plan will aid congressional initiatives to
revitalize government at the Federal level.
State and local government witnesses, business
representatives, and the public all advocate looking at each
Federal department and agency to determine which of the
functions it provides are vital to the service delivery needs
of Americans and which can be better carried out by State or
local governments or the private sector. The widely shared view
was that the Federal Government is not meeting the needs of it
customers, the American public, and is less effective, less
efficient and more costly than it should be. It must be fixed.
b. Benefits.--As a result of the nationwide field hearing
series and consultation with experts in the private and public
sectors, the committee was successful in identifying strategies
and principles used by corporate, State and local government
organizations in restructuring their entities, and learning how
their most successful and creative ideas might be applied to
the Federal Government. We now have a better understanding of
what States and local governments expect from the Federal
Government, what private business expects from the Federal
Government, and most importantly the American public's thoughts
and ideas for a more responsive Federal Government designed to
meet their needs.
Six fundamental points, or practices, were raised at all
six field hearings, each to promote the efficiency,
effectiveness, high quality and low cost of service delivery.
The first three of these common reorganization principles in
particular affect the culture of an organization, while the
other three are more practical in application. The committee
found--
(1) Clear missions and a solid organization mission
statement are necessary for establishing priorities and
goals and maintaining focus on established objectives.
(2) Open and honest communication with employees
about each step of the reorganization process is vital
to maintaining employee morale, as is affording
employees an opportunity to convey their views on
downsizing and reorganization.
(3) Innovative management techniques are enabling
States, localities and businesses to empower employees
and to strip layers of bureaucratic management in favor
of more streamlined structures. The result has been
more efficient, more responsive organizations with high
morale and greater productivity.
(4) Privatization is clearly one of the most
advocated means of taking government out of functions
which are not inherently governmental and which can be
performed more efficiently and cost-effectively by the
private sector.
(5) Competitive bidding will improve service while
saving money. The government should be forced to
compete with private business for effective, efficient
service delivery.
(6) The Federal Government must replace old and
outdated computer systems with advanced technology that
allows for open communication both internally and with
the public. Using such technology will facilitate
``one-stop shopping'' and other innovations in service
delivery.
The committee made the following recommendations as a
result of its oversight findings:
(1) Establish a citizens commission on 21st century
government.
(2) Identify and remove statutory and regulatory
barriers to reorganization and innovation.
(3) Increase privatization and competitive bidding.
(4) Enlist the aid of the private sector in
reorganization and innovation efforts.
(5) Restore responsibilities to the States and local
governments without imposing unfunded mandates.
(6) Establish, communicate and adhere to a clear
mission for Federal agencies.
(7) Maintain open lines of communication with agency
employees.
(8) Promote innovation by managers and employees.
(9) Use technology to improve service and increase
efficiency.
The committee intends that Congress learn from and adopt
some of these successful strategies and recommendations in an
effort to restructure the executive branch to better meet the
needs of Americans today and in the 21st century.
c. Hearings.--Members of the committee began the ``Creating
a 21st Century Government'' field hearing series on July 14,
1995, in Parma Heights, OH, and continued the series in Upper
Montclair, NJ, on September 9, 1995. The committee's following
three hearings were held over Columbus Day weekend traveling to
Federal Way, WA, on October 6, 1995; Long Beach, CA, on October
7, 1995; and Albuquerque, NM; on October 9, 1995. The final
hearing in the series was held on October 20, 1995, in
Charlotte, NC.
3. ``Laws Related to Federal Financial Management as Amended Through
December 31, 1995,'' House Report No. 104-745, August 2, 1996,
Ninth Report by the Committee on Government Reform and
Oversight.
a. Summary.--This report outlines the laws and procedure
related to Federal financial management. Included in the report
are sections related to money and finance (Title 31, U.S.C.);
general provisions (Title 1, U.S.C.); the Congress (Title 2,
U.S.C.); government organization and employees (Title 5,
U.S.C.); commerce and trade (Title 15, U.S.C.); Postal Service
(Title 39, U.S.C.); public buildings, property, and works
(Title 40, U.S.C.); public contracts (Title 41, U.S.C.); and
public printing and documents (Title 44, U.S.C.). Also included
in the report are the Debt Collection and Improvement Act of
1996, the Single Audit Act amendments of 1996 and other major
laws on financial management.
b. Benefits.--The Committee on Government Reform and
Oversight believes that effective financial management is
critically important in making worthwhile decisions on the use
of public resources in support of the well-being and security
of the American taxpayer. This report helps fulfill the
committee's oversight responsibility and serves as a valuable
reference guide in assisting Congress, Federal entities, and
all others interested in good stewardship of Federal resources.
c. Hearings.--None were held on this measure.
4. ``Sampling and Statistical Adjustment in the Decennial Census:
Fundamental Flaws,'' House Report No. 104-821, September 24,
1996, Fourteenth Report by the Committee on Government Reform
and Oversight, Together with Additional and Dissenting Views.
a. Summary.--Since 1994, the Subcommittee on National
Security, International Affairs, and Criminal Justice and the
full committee have been conducting an investigation into the
planning and preparation for the 2000 Decennial Census. Based
on this study and one subcommittee hearing and two full
committee hearings, the committee adopted its fourteenth report
to the 104th Congress on September 24, 1996.
The Decennial Census is mandated by the Constitution in
order to apportion the Congress. Census data are used by every
State for congressional and State redistricting. They are also
used to enforce the Voting Rights Act. Numerous Federal and
State programs, distributing billions of dollars each year, use
Decennial Census data, or the intercensal estimates derived
therefrom, for their implementation.
In 1995, the committee learned that the Census Bureau was
seriously considering dramatic changes to its approach in
taking the Decennial Census of the population. On February 28,
1996, the U.S. Department of Commerce and the Bureau of the
Census publicly announced their formal plans for a ``re-
engineered 2000 Census.'' The plans call for the use of
statistical methods in two separate instances: (1) to sample
and estimate the final 10 percent of the population failing to
respond in the actual enumeration (``sampling''), and (2) to
use a separate sample of houses to estimate those persons
missed in the actual enumeration and the sample for non-
response and revise it accordingly (``adjustment'').
Statistical techniques have been used by the Census Bureau
to assess the accuracy of census counts since 1950, but have
never been used to ``complete'' and/or ``correct'' the original
number for use in apportioning Congress.
After the Secretary of Commerce decided in July 1991 not to
make a statistical adjustment to the 1990 Census, over 50
lawsuits erupted, culminating in the 1995 case considered by
the Supreme Court, United States v. City of New York. The
Court's decision, handed down in March 1996, upheld the
Secretary's decision not to adjust the 1990 census.
The report finds that the problems that surrounded the
issue of statistical adjustment in the 1990 Census also plague
the plans for the 2000 Census. This is compounded by the plans
to incorporate sampling to complete the actual enumeration.
Specific findings include:
1. Sampling/statistical adjustment are inherently
problematic given the subjectivity in the various
decisions comprising the methodology.
2. The legal provisions that concern the use of
sampling for apportionment purposes, both in the
Constitution and in Federal law, are variously
interpreted.
3. The inherent uncertainties of sampling/statistical
adjustment may undermine public confidence in the
Decennial Census and reduce public participation.
4. The sampling method for nonresponse follow-up
introduces additional error into the process and may
compromise the accuracy of small-area data which are
important for congressional and State legislative
redistricting.
5. The complexity of the two different sampling
techniques being planned for the 2000 Census adds a
great deal of risk to the operational feasibility of
the Bureau's current approach.
Based on the committee's findings, the committee made the
following recommendations:
1. Congress should work to clarify existing Federal
statutes with regard to the use of sampling to make
statistical adjustments to the census for apportionment
purposes.
2. The Bureau should not use sampling methods to
complete or adjust the actual enumeration of the 2000
Census which is constitutionally mandated for purposes
of apportionment.
3. The Department of Commerce and the Bureau of the
Census should prioritize the constitutional mandate of
the Decennial Census--apportionment of the House of
Representatives.
4. The Bureau should emphasize and strengthen its
cooperative relationships with State and local elected
officials, as well as members of local organizations,
who are vital in helping increase response rates to the
Decennial Census.
5. The Bureau should strengthen its plans for a
thorough quality check of the 2000 Census and maintain
open access to all processes for internal and external
review and analysis.
b. Benefits.--The report sets aside political
considerations regarding the winners and losers in an
adjustment situation and addresses the problems with sampling
and adjustment on their technical merits. In laying important
groundwork regarding the technical problems with sampling and
statistical adjustment in the Decennial Census, the report
could provide the necessary basis and justification for taking
legislative action in future Congresses. The report also
represents an important marker in Federal legislative history
regarding the issues of sampling and statistical adjustment.
c. Hearings.--On October 25, 1995, Congressman William H.
Zeliff, Jr., chairman of the Subcommittee on National Security,
International Affairs, and Criminal Justice, held an oversight
hearing entitled, ``Oversight of the Census Bureau: Preparation
for the 2000 Census'' to examine testimony from Census Bureau
officials regarding their plans for conducting the 2000
Decennial Census. Witnesses included Dr. Martha Riche
(Director, Bureau of the Census, U.S. Department of Commerce),
Francis DeGeorge (Inspector General, U.S. Department of
Commerce), and Nye Stevens (Director of Federal Management and
Workforce Issues, U.S. General Accounting Office). At the
hearing, the Bureau announced a number of new initiatives,
including the use of statistical sampling to complete the
actual enumeration.
On February 29, 1996, the Committee on Government Reform
and Oversight held a hearing ``Census 2000: Putting Our Money
Where It Counts'' to gather testimony from Members of Congress
and outside experts regarding the Bureau's new methodology.
Witnesses included Senator Herb Kohl (D-WI), Congressman Thomas
Sawyer (D-OH), Congressman Thomas Petri (R-WI), Bruce Chapman
(president, Discovery Institute, Seattle, WA), Dr. Barbara
Bailar (vice president, Survey Research, National Opinion
Research Center), Dr. Steve Murdock (director, Department of
Rural Sociology, Texas A&M University), Dr. Kenneth Wachter
(professor of statistics and demography, University of
California at Berkeley), Dr. Charles Schultze (senior fellow,
the Brookings Institution, and Dr. James Trussell (director,
Office of Population Research, Princeton University).
On June 6, 1996, the Committee on Government Reform and
Oversight held another hearing, ``Census 2000: The Challenge of
the Count'' to air questions and concerns about statistical
methods planned for the Census 2000. The witnesses were Dr.
Everett Ehrlich (Undersecretary of Commerce for Economic
Affairs, U.S. Department of Commerce), and Dr. Martha Riche
(Director, Bureau of the Census, U.S. Department of Commerce).
Congressman Thomas Petri delivered a brief statement on his
bill, H.R. 3589, to prohibit the use of sampling in the 2000
Census. However, he did not receive questioning by members of
the committee.
5. ``Investigation of the White House Travel Office Firings and Related
Matters,'' House Report No. 104-849, September 26, 1996,
Fifteenth Report by the Committee on Government Reform and
Oversight, Together with Minority and Additional Views.
a. Summary.--On May 19, 1993, the Clinton administration
fired seven long-time employees of the White House Travel
Office and ordered them to depart the White House premises in 2
hours. Then-White House press secretary Dee Dee Myers
simultaneously--and inappropriately--announced a criminal
investigation of the Travel Office by the FBI. The Clinton
administration replaced the Travel Office employees with
employees of World Wide Travel, the Clinton/Gore '92 campaign
travel agency. World Wide Travel departed the White House
Travel Office within 2 days as a firestorm of press and public
criticism over the firings engulfed the White House. World Wide
was replaced by a combination of government workers and
American Express personnel.
Various aspects of the Travel Office matter were
investigated by the White House, the Justice Department Office
of Professional Responsibility and Public Integrity Division,
the FBI, the General Accounting Office and the Internal Revenue
Service. Individually and collectively, the resulting reports
raised more questions than they answered. For example, in an
October 7, 1994, letter to then-Chairman Conyers of the
Government Operations Committee, Ranking Minority Member
William F. Clinger, Jr., and 16 other House Members requested
hearings into the Travel Office matter. This request was
accompanied by a 71-page minority analysis of contradictions
arising from or issues unaddressed by any of the previous
reports. In response to this report, then-Chairman Conyers
wrote then-Ranking Minority Member Clinger, ``You have raised
serious questions about GAO's report to Congress'' and asked
that GAO provide ``a detailed response'' to those issues.
When Independent Counsel Fiske concluded in July 1994 that
the Travel Office matter had been a major factor in the late
Vince Foster's suicidal depression, it became all the more
important to have a full understanding of what transpired at
the White House Travel Office. Prior to Mr. Fiske's report,
little was known of Foster's role in the Travel Office firings.
In fact, the committee later learned that the White House had
withheld Foster's Travel Office notebook from previous Travel
Office investigations.
Soon after becoming chairman of the reconstituted
Government Reform and Oversight Committee, Mr. Clinger
announced that the committee would investigate the Travel
Office matter.
b. Benefits.--The committee resolved upon the following
findings and recommendations.
Findings
1.) Plans to fire the White House Travel Office employees
and replace them with campaign personnel were in place from the
earliest days of the Clinton administration;
2.) Harry Thomason, who had a financial stake in the travel
business, instigated the firings. Mr. Thomason's personal and
financial interests in the Travel Office made it clearly
inappropriate for him to have any involvement in the matter;
3.) President Clinton approved Harry Thomason's ``Image
Project'' at the White House, giving Thomason an ``Official
Status'' which facilitated Thomason's efforts to obtain
lucrative government contracts;
4.) Harry Thomason abused his official status and White
House access at a time when he had a financial stake in the
travel business. Mr. Thomason's activities at the White House
made him a special government employee to whom conflict of
interest laws applied;
5.) The White House Communications Office, in conjunction
with the White House Counsel's Office, publicly accused the
Travel Office employees of criminal conduct and misused and
manipulated the FBI to further their political agenda;
6.) President Clinton inappropriately allowed his cousin
Catherine Cornelius to remain in a position where she had a
clear conflict of interest. Cornelius pursued an investigation
of employees of an office in which she coveted the top job and
for which she planned a reorganization;
7.) Mrs. Clinton, acting on Harry Thomason's baseless
allegations of wrongdoing against the Travel Office employees,
exerted pressure on senior White House staff to fire the Travel
Office employees;
8.) Associate White House Counsel Bill Kennedy misused the
FBI by repeatedly invoking concerns at the ``Highest Levels''
of the White House in meetings with the FBI;
9.) White House officials covered-up the real reasons for
the Travel Office firings. The firings were not based on the
Peat Marwick review but rather were decided before Peat Marwick
examiners ever set foot inside the White House;
10.) The White House misrepresented the Peat Marwick
review. It was neither an audit nor independent and was
directed by a White House which did not want an audit to be
conducted;
11.) The FBI allowed the White House to control its
investigation;
12.) The FBI mishandled the Travel Office investigation
from the beginning, allowing the White House to control the
investigation. The FBI did not adequately secure Travel Office
records in a timely fashion;
13.) The White House engaged in a conspiracy of silence of
the true story behind the firings from the very beginning for
damage control purposes;
14.) President Clinton established a cover-up situation
when he inappropriately placed Mack McLarty, the person who had
approved the Travel Office firings, in charge of the White
House Management Review. McLarty withheld information during
the course of the investigation. It is inappropriate for the
White House to investigate itself in conflict-of-interest
matters;
15.) The internal White House Management Review was a
catalog of ``mistakes and deception'' which omitted
incriminating information about the President, Mrs. Clinton and
Harry Thomason. The White House chose to cover-up incriminating
information for political expediency;
16.) The White House Management Review reprimanded people
who were only following orders of the real instigators of the
Travel Office firings;
17.) The White House's obstruction of the review of Vince
Foster's documents was due in part to concerns about Travelgate
documents in Foster's custody;
18.) Mrs. Clinton instructed White House staff on the
handling of Foster documents and the Foster note found on July
26, 1993, and senior White House staff covered up this
information and withheld it from investigators;
19.) The Justice Department deferred to the White House
during its investigations of the White House Travel Office and
Harry Thomason. The Justice Department ignored the obstructive
behavior exhibited by the Counsel's Office;
20.) White House officials engaged in a pattern of delay,
deceit and obstruction over the course of 3 years of
investigations into the Travel Office and matters related to
Vince Foster's death;
21.) David Watkins' ``soul cleansing'' memo account of the
Travel Office is substantially corroborated by numerous records
and witness testimony; and
22.) President Clinton has engaged in an unprecedented
misuse of the executive power, abuse of executive privilege and
obstruction of numerous investigations into the Travel Office.
Recommendations
The committee recommends that:
1.) The ``special government employee'' provisions of the
United States Code should be reformed to prevent its
requirements from being ignored;
2.) The Executive Office of the President should establish
financial and internal review controls consistent with the
requirements of the Chief Financial Officers Act and the
Inspector General Act, including the development of annual,
audited financial statements of all business activities and the
establishment of an internal review system;
3.) The Presidential Records Act and the Federal Records
Act should be amended to provide for jurisdiction of Federal
courts to ensure that Government records are not unlawfully
destroyed, but are managed and preserved as required by law;
4.) The Office of Counsel to the President should return to
its traditional mission of providing traditional legal counsel
to the President and his immediate staff;
5.) Congress should consider the feasibility of prohibiting
the Executive Office of the President from procuring goods and
services through its own procurement operations and requiring
the Executive Office of the President, where possible, to
procure using existing contracts of other agencies, such as the
General Service Administration's Federal Supply Schedules; and
6.) Only individuals of the highest quality and ethics
should be employed by and volunteer services to the Government.
c. Hearings.--The committee held three hearings on the
White House Travel Office matter:
1.) October 24, 1995. Testifying before the committee were
representatives of the organizations which had prepared various
White House Travel Office reports: Mr. John Podesta (White
House Management Review); Ms. Nancy Kingsbury (GAO's White
House Travel Office Operations); Mr. Michael Shaheen
(Department of Justice Office of Professional Responsibility
Report); Inspector Ivian C. Smith (FBI Report) and Chief
Inspector Gary Bell (IRS Report). The committee learned in the
course of this hearing that the scopes of all five
investigations were limited and that the White House Management
Review, GAO and OPR Reports in particular were denied access to
witnesses and even knowledge of critical documents subsequently
obtained by the committee. As a result, none of the previous
investigations could claim to have fully accounted for the
actions leading up to and following the White House Travel
Office firings.
2.) January 17, 1996. Testifying before the committee was
former White House Director of Management and Administration
David Watkins. Mr. Watkins testified about his own undated
``soul cleansing'' memo, first released by the White House to
the committee in early January 1996. In this memo, which had
not been made available to any of the previous Travel Office
investigations, Watkins wrote that he had fired the Travel
Office employees in the wake of pressure by First Lady Hillary
Rodham Clinton. Mr. Watkins stood by that characterization
during his testimony before the committee. This appeared to
contradict Watkins' previous statements to GAO and other
investigators as well as Mrs. Clinton's own assertions that she
played no role in the firings. Subsequently, these
contradictions led to a criminal referral of Watkins to
Independent Counsel Starr.
3.) January 24, 1996. Testifying before the committee were:
former White House Travel Office Director Billy Dale and Deputy
Director Gary Wright, as well as Travel Office staffers Barney
Brasseux, John Dreylinger, Ralph Maughan, John McSweeney and
Bob Van Eimeren. The fired Travel Office employees addressed
such issues as their work in the Travel Office and management
of it, and the circumstances surrounding their firings and
subsequent investigations and audits--or threats of same--by
the FBI and IRS. Mr. Dale in particular addressed his 30-month
investigation by the Department of Justice, his indictment and
trial on two charges, and his acquittal by a jury of his peers
in only 2 hours. Mr. Dale also strongly challenged allegations
of mismanagement in the White House Travel Office and testified
to the disappearance of records which he claimed would have
exonerated him. Those records disappeared during the period
immediately preceding the firings when Clinton administration
staffer Catherine Cornelius was removing documents from the
office and taking them home. The FBI did not make any effort to
secure the Travel Office records until 3 weeks after the
firings and 3 weeks after its criminal investigation of the
Travel Office had begun.
In the wake of these three hearings and the continued
withholding of documents by the White House, it became clear
that the Travel Office investigation could not proceed without
the ability to depose witnesses under oath. As a result, on
March 7, 1996, the House of Representatives approved H. Res.
369, providing special authority to the Committee on Government
Reform and Oversight to obtain testimony for purposes of
investigation and study of the White House Travel Office
matter. The Resolution was limited to provide deposition
authority to the Committee on Government Reform and Oversight
only for its investigation of the Travel Office matter.
Committee investigative staff deposed more than 70 witnesses
under this authority in the course of the Travel Office and
related FBI background files investigations.
6. ``Federal Government Management: Examining Government Performance As
We Near the Next Century,'' House Report No. 104-861, September
28, 1996, Eighteenth Report by the Committee on Government
Reform and Oversight, Together with Additional and Minority
Views.
a. Summary.--In mid-1996 the committee undertook to prepare
a report that would update information available on the status
of overall government management, both in terms of cross-
cutting and governmentwide areas of management and in specific
programs. The report dispassionately examined mismanagement,
waste, fraud and abuse in Federal departments and programs.
What we found was truly alarming. The report focussed on actual
management and accomplishments, or lack thereof, rather than on
policy. By no means, however, should it be considered
comprehensive. Serious management deficiencies of the executive
branch of Government are too numerous to inventory in a single
report. Only some of the more obvious problems facing the
cabinet departments and several independent agencies were
reviewed.
Some of the problems reviewed were unique to their
departments, such as the failure of the Department of Labor to
focus sufficient management resources on eliminating organized
crime in labor unions, or the rising delinquency rates in
agricultural loans managed by the U.S. Department of
Agriculture. Other problems, such as mismanagement of
contracts, abuses of the personnel system and failure to
collect debts owed the Federal Government can be found in
almost all departments and agencies.
The report was initiated to raise the visibility of weak
management practices, the lack of oversight and inconsistency
in evaluating the effects of agency actions in the Federal
Government. It briefly reviewed the administration's highly
publicized National Performance Review (NPR), which was
developed to make government ``work better, and cost less.''
The NPR is clearly a laudable initiative, but to date, has
produced few concrete results.
On the positive side, the 104th Congress enacted
legislation that, if implemented effectively, should make
specific improvements in problem areas of the Federal sector.
For example, comprehensive procurement reform, the Unfunded
Mandates Reform Act, and the Line Item Veto are a but a few of
the refreshing management improvements enacted during the past
2 years.
The report concluded that public perceptions of pervasive
waste, fraud and mismanagement in the Federal Government are,
unfortunately, accurate. Other alarming developments in the
Federal Government which demonstrate the need for greater
accountability include the expansion of the General Accounting
Office's (GAO's) ``High Risk'' list of Federal program areas.
That catalog of government hot spots grew from 14 in 1990 to 20
today--a net increase of six areas.
Of the ``Twelve Worst Examples of Government Waste''
outlined for priority attention for this administration by a
1992 House Committee on Government Operations majority report,
11 are the same or worse now. Some, like the failure of the
Internal Revenue Service and the Department of Justice to
collect outstanding debt and the growth of health care fraud
and abuse are much worse now. Taken individually, these items
are cause for concern; taken in the aggregate, they are cause
for alarm and an indication that leadership, both at the
various agencies and at the helm of Government is lacking. With
some exceptions, key appointees apparently do not understand or
care to learn about effective management of their programs.
Bureaucrats cannot operate programs in the absence of strong
guidance and oversight at the highest levels of their
organizations.
Poor financial management, wasteful procurement and
inventory practices, sloppy contract management, personnel
abuses and manipulation of personnel rules, silly or even
harmful regulations are among the consequences of bad
management. Acts such as the Chief Financial Officers Act and
the Government Performance and Results Act were passed by
Congress in frustration over managerial anarchy and program
disaggregation. These acts are being implemented, and Congress
is overseeing their implementation, in an effort to counter the
tendency of management and budget to separate at the Federal
level, and of management to receive less and less attention
over time. As this report amply demonstrated, the Office of
Management and Budget exacerbated that problem by merging its
management and budget functions. Budget Officers at OMB have
now also been made responsible for management oversight.
The report's quick review of fraud, abuse and mismanagement
uncovered $350 billion in easy savings that could be achieved
if greater resources were devoted to good management practices.
Hundreds of billions more will be wasted in the near term on
cost over runs, programs delays, delinquent payments, loans,
grants and unfulfilled contracts. Additional costs for the
Department of Energy's nuclear waste cleanup alone is estimated
to cost as much as $350 billion.
Although the report is critical of the executive branch of
Government, it is not intended as an indictment of dedicated
career civil servants, including managers, who are functioning
in an increasingly complex and sometimes inflexible
environment. The committee recognized that Federal employees
are operating under greater, rather than fewer, constraints. It
was and is the committee's intent that the report serve as a
stimulus to discussion, an inducement to action and result in
positive reforms in Federal management, efficiency and
productivity.
b. Benefits.--The rules of the House of Representatives
give jurisdiction over general government management and
efficiency to the Committee on Government Reform and Oversight.
In accordance with that responsibility, the predecessor to this
committee produced an overview of government management in
1992. This report, entitled ``Federal Government Management:
Examining Government Performance As We Near the Next Century,''
continued the committee's tradition in reporting on
comprehensive government program efficiency and cost-
effectiveness. It is essentially a report card on the
management practices of the first Clinton administration and
also reviews the Vice President's National Performance Review
(NPR), which was intended to improve government efficiency and
morale.
c. Hearings.--None were held.
7. ``Investigation into the White House and Department of Justice on
Security of FBI Background Investigation Files,'' [Interim
Report], House Report No. 104-862, September 28, 1996,
Nineteenth Report by the Committee on Government Reform and
Oversight, Together with Additional Views.
a. Summary.--On May 30, 1996, in the course of its Travel
Office investigation, the committee discovered a December 20,
1993, White House request of Billy Dale's confidential FBI
background file from the FBI Liaison Office. Even though it was
dated 7 months after Dale's firing, the form indicated that the
White House was requesting Dale's confidential FBI file because
it was considering him for ``Access (S).'' The Dale FBI
background file request was found in a production of 1,000
pages of documents over which the White House previously had
claimed executive privilege. Chairman Clinger immediately
called on the White House and the FBI to explain why the Dale
file had been requested by and provided to the White House at a
time when the Justice Department was undertaking a criminal
investigation of Mr. Dale.
On June 5, 1996, the White House claimed the Dale request
was made mistakenly by an unnamed file clerk. On June 6, it
claimed that the General Accounting Office had requested the
Dale FBI background file. The GAO denied this immediately. By
June 7, 1996, the White House acknowledged obtaining some 338
FBI files of former White House employees, but alleged that
they never were read. Then Anthony Marceca, a former detailee
hand-picked by White House Office of Personnel Security
Director Craig Livingstone, contradicted the White House when
he told Livingstone's attorney that he in fact read all the
files and passed derogatory information on to Livingstone.
The White House admitted obtaining an additional 71
improperly sought FBI background files by June 14, 1996, as FBI
Director Louis J. Freeh released an FBI report indicating that
408 files were provided to the White House ``without
justification'' and were ``egregious violations of privacy.''
Director Freeh added, ``The prior system of providing files to
the White House relied on good faith and honor. Unfortunately,
the FBI and I were victimized. I promise the American people
that it will not happen again on my watch.''
Also on June 14, 1996, Livingstone admitted to problems of
his own background in a sworn deposition before the committee.
These included problems with his employment history and the use
of illegal drugs and gave added impetus to the still-unanswered
question, ``Who hired Craig Livingstone?'' On June 15, 1996,
the White House delivered a document production to the
committee which included letters from former Associate White
House Counsel William H. Kennedy, III, to then-Defense
Secretary Les Aspin and others seeking the assignment of Army
investigator Anthony Marceca to a White House detail in the
Office of Personnel Security.
b. Benefits.--The committee resolved upon the following
findings and recommendations.
Findings
1.) FBI background files often include the most sensitive
and confidential personal and financial information about the
individual being reviewed;
2.) The White House improperly requested hundreds of
confidential FBI background files without any justification.
This violated the constitutional rights and privacy of many
former Republican officials whose files improperly were
requisitioned and reviewed by Clinton White House employees;
3.) The White House Office of Personnel Security and the
FBI maintained a system which allowed low level staff to access
any file without question by the FBI. The Clinton
administration has, on a number of occasions, failed to
implement safeguards that would have prevented lapses in
security at the White House and in fact exploited the FBI's
longstanding policy of relying on the honor of White House
employees in turning over such files;
4.) FBI General Counsel Howard Shapiro provided
confidential FBI law enforcement information about Mrs.
Clinton's role in bringing Craig Livingstone into the White
House. When Shapiro realized that the information contained in
Livingstone's FBI background file could damage former White
House Counsel Bernard Nussbaum and Mrs. Clinton, he immediately
contacted the Office of White House Counsel and read verbatim
the incriminating contents of Livingstone's file;
5.) Once White House Special Counsel Jane Sherburne learned
that the information contained in Livingstone's file could
damage Nussbaum and Mrs. Clinton, Sherburne contacted Mrs.
Clinton regarding the information;
6.) Ms. Sherburne may have violated ethical standards by
informing private attorneys for Nussbaum and Livingstone about
confidential FBI law enforcement information. On the day before
reports of his testimony before a grand jury, lawyers for
Nussbaum were informed of evidence uncovered in a search of
Livingstone's file that contradicted Nussbaum's testimony
before the Committee on Government Reform and Oversight. Mr.
Livingstone's attorneys received the same information;
7.) White House Office of Personnel Security staff failed
to properly secure confidential FBI law enforcement files. The
committee was provided with testimony and evidence that staff
and interns without the necessary clearances had access to the
highly sensitive material in the FBI background files including
that of more than 400 Bush and Reagan administration officials;
8.) The FBI continued to involve itself in the
investigation of the FBI files matter even after receiving
notice from the Attorney General that a conflict of interest
existed between the FBI and the White House concerning this
matter. Mr. Shapiro notified the White House about the
incriminating contents of Livingstone's background file before
the committee was allowed to review it. Mr. Shapiro assisted
the White House in preparing correspondence for the FBI
regarding the FBI files matter and the committee's
investigation of it;
9.) Army detailee Anthony Marceca was given unfettered
access to confidential FBI law enforcement files and allowed to
remove confidential information from the White House despite
his own inability to receive White House clearance. Marceca's
removal of information in those files from the White House was
inappropriate;
10.) Without any valid basis for doing so, FBI General
Counsel Shapiro provided the White House Counsel a pre-
publication copy of Gary Aldrich's book which the former agent
had provided to the FBI under an employment agreement. There
was no apparent reason for providing the manuscript to the
White House; and
11.) The White House asserted executive privilege over
documents over which it had no basis for claiming privilege.
Thousands of pages of these documents contained routine
administrative information or communications, as opposed to
issues of national security or others for which a claim might
be appropriate.
Recommendations
Having undertaken a preliminary investigation, the
committee is not satisfied that the public has been provided
the answers to many of the concerns raised by the FBI
background files matter. This makes it imprudent to make
recommendations at this time. The committee feels those
individuals whose files were improperly obtained by the White
House deserve a complete explanation of the following
questions:
1.) Who hired Craig Livingstone?
2.) What list was used by the White House in requesting the
improperly-obtained FBI background files?
3.) Who reviewed the contents of the FBI background files
of former Reagan and Bush administration officials?
4.) Were the contents of the FBI background files ever
transmitted electronically to any computer data base within or
outside the White House complex?
5.) What effect have the new procedures implemented by the
Clinton administration had on the White House pass process and
FBI background checks?
6.) What standard procedures are in place to ensure that
those without proper clearances do not have access to materials
protected by the Privacy Act which are stored in the White
House?
7.) What policies should be implemented to ensure that FBI
officials do not interfere with ongoing investigations outside
the FBI's jurisdiction?
c. Hearings.--The committee held four hearings on the FBI
background files matter:
1.) June 19, 1996. Testifying before the committee were
former White House Counsels or Deputy Counsels A.B. Culvahouse
and Richard Houser (Reagan administration), C. Boyden Gray
(Bush administration), and former Office of Personnel Security
Director Jane Dannenhauer and her deputy, Ms. Nancy Gemmell.
Both Ms. Dannenhauer and Ms. Gemmell had served in the Reagan
and Bush administrations and briefly in the Clinton
administration. At this hearing, the care and discretion with
which FBI background investigation files were handled in the
Carter, Reagan and Bush administrations was established. For
example, access to these files was strictly limited to Ms.
Dannenhauer and one or two members of the White House Counsel's
Office. Those with access to these files themselves had been
cleared for such access after undergoing background
investigations of their own. By contrast, White House interns
were assigned to the White House Office of Personnel Security
for the first time during the Clinton administration. These
interns, aged 18 to 20 years old and without security
clearances or background investigations, nonetheless had access
to confidential FBI background files in the Clinton White
House.
2.) June 26, 1996. Testifying before the committee were:
former Clinton administration Director of Personnel Security D.
Craig Livingstone; former Clinton administration detailee
Anthony Marceca; former Office of Personnel Security staffer
Lisa Wetzl; former White House Counsel Bernard W. Nussbaum, and
former Associate White House Counsel William H. Kennedy, III.
At this hearing, Mr. Livingstone formally announced his
resignation from his position, from which he had been on leave
since the FBI files scandal broke. Witnesses also testified
that hundreds of FBI background files had been requested due to
faulty Secret Service lists. No one, including Mr. Livingstone,
could answer the question, ``Who hired Craig Livingstone?''
although Messrs. Nussbaum and Kennedy testified that the First
Lady had no role in Livingstone's hiring. Apparent
contradictions between Nussbaum's testimony and previous
statements he had made to an FBI agent in the course of an
interview subsequently led to a criminal referral of these
matters to Independent Counsel Starr.
3.) July 17, 1996. Testifying before the committee were
Secret Service Agents John Libonati, Jeffrey Undercoffer and
Arnold Cole. The Secret Service agents established in their
testimony that the Secret Service's own records properly
recorded as ``inactive'' passholders all but a handful of the
individuals whose FBI files were requested and that it thus
would have been difficult for the White House to mistakenly
request hundreds of FBI background investigation files of
former ``inactive'' Republican officials. Special Agent Cole
also testified that, when the FBI files matter first was
reported in the press, Livingstone told him he knew that the
Secret Service lists were indeed accurate and that his office
had used the wrong lists. The agents also testified at this
hearing about the incidence of recent drug usage among White
House staffers, 21 of whom were forced by recent extensive drug
usage to be tested twice a year in a special, individualized
random drug testing program.
4.) August 1, 1996. Testifying before the committee were:
Howard M. Shapiro, FBI General Counsel; Thomas Kelley, FBI
Deputy General Counsel; Vernon Thornton, retired former FBI
Unit Chief of Executive Agencies Dissemination and Personnel
Unit; and Peggy J. Larson, FBI Supervisory Research Analyst.
At this hearing, General Counsel Shapiro testified
concerning his ``heads-up'' warning to the White House
concerning materials in D. Craig Livingstone's FBI background
file. Mr. Shapiro acknowledged it was ``a horrific blunder''
warning the White House of the existence of an FBI report
stating the First Lady ``highly recommended'' Livingstone for
his White House position. In his opening statement and, later
while responding to questions, Shapiro acknowledged that the
substance of this ``heads-up'' in turn was widely disseminated
throughout the White House and beyond. (Former White House
Counsel Bernard Nussbaum, who reportedly told the FBI of the
First Lady's recommendation of Livingstone, was informed in
advance of an appearance before a grand jury.) Mr. Shapiro also
testified about his July 16, 1996, decision to send FBI agents
out to the home of the agent whose interview summary report
related the First Lady's recommendation. He testified that the
interview of the FBI agent was not intended to intimidate, as
some majority Members suspected. Mr. Shapiro also testified
about his delivery to White House Counsel Jack Quinn of retired
FBI agent Gary Aldrich's manuscript of a proposed book which
discussed activities at the White House. The other three
witnesses testified more generally on the handling of FBI
files.
GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE
Hon. Stephen Horn, Chairman
1. ``Making Government Work: Fulfilling the Mandate for Change,'' House
Report No. 104-435, December 21, 1995, Third Report by the
Committee on Government Reform and Oversight, Together With
Additional Views.
a. Summary.--On December 14, 1995, the Committee on
Government Reform and Oversight approved and adopted a report
entitled, ``Making Government Work: Fulfilling the Mandate for
Change.'' The committee's report is based on a series of
hearings conducted by the Subcommittee on Government
Management, Information, and Technology. The subcommittee
convened eight oversight hearings on various aspects of
government management to solicit advice and recommendations
for: (a) changing what the Federal Government does; (b)
improving the overall economy, efficiency, and management of
its operations and activities; and (c) effectively planning,
measuring, and reporting the results to the American public.
The inquiry reflected public expectation that provided a
mandate to the Congress to consider with care the various
Government functions, and to determine whether they should
continue to be performed, and, if retained, how they can be
made more effective.
The experience of American industry also influenced the
committee. In the past decade, corporations and other entities
have reexamined their roles and redefined their institutional
objectives and purposes. Many corporate changes have been
facilitated by technology that speeds information to
decisionmakers and thereby reduces the need for traditional
hierarchies. While such changes have been at times wrenching to
the people in these institutions, the result has been to make
American industry far more productive and competitive. The
Federal Government has yet to implement a similar
transformation on any appreciable scale. While the committee
recognizes fundamental differences between the purposes and the
cultures of business and Federal Government organizations, it
remains receptive to the suggestion that ``rethinking'' and
``re-engineering'' methods successfully used in the private
sector can be and should be adapted for use in the Federal
Government.
Because of the administration's management responsibilities
for the Federal Government, the point of reference for all
material reviewed was the National Performance Review, Phases I
and II.
Findings
Based upon the investigation and oversight hearings
conducted by the subcommittee, the committee found the
following:
1. The Management of the Federal Government Needs Improvement.
(a) The capacity of the President as the Chief Executive
Officer of the Federal Government and its principal manager has
been diminished over several administrations. The Executive
Office of the President has abrogated its responsibility to
oversee and improve the Government's management structure.
(b) The capacity available to the President in the Office
of Management and Budget [OMB] to reform or improve management
has steadily declined and now barely exists, despite a
competent Director of OMB and a Deputy Director of Management,
whose talents in this area are underutilized. Federal
management organization, oversight authority, and general
influence have been consistently overridden by recurring budget
crises and budget cycle demands, despite conscientious
intention to give ``Budget'' and ``Management'' equal voice
within OMB.
(c) The NPR, in its ad-hoc and episodic approach to
management issues, reveals the weakened state of management
capacity of the Executive Office of the President.
(d) The NPR-inspired announcement of a reduction of over a
quarter-million Federal jobs may have been warranted; however,
without first having a solid empirical rationale for doing so
and not knowing where or how, it reflected a lack of strategic
vision as to the Federal Government's role, and as such it
seriously eroded Federal workers' morale, productivity, and
planning for the future.
(e) The capacity of the Office of Personnel Management to
provide leadership to a revitalized career service has been
seriously impaired.
(f) Short-term political appointees have layered and
``thickened'' the Federal Government's upper echelons of
organization to a point where productivity, management, and
continuity of operation have become seriously affected.
(g) Some potential candidates for political appointment
believe that service on Federal organizations will hinder their
careers, imposing a protracted and intrusive nomination process
as well as numerous restrictions on financial and employment
activities during and following Federal Government assignments.
As a result, the pool of available talent qualified for
appointment and willing to serve has been diminished.
(h) Qualified people considering careers in public
administration are discouraged from Federal career employment
by layers of political appointees of uneven quality which
preclude advancement to positions of senior responsibility.
(i) Career Federal public administrators have a long record
of faithfully executing clearly established policy and
rendering effective political leadership. However, political
appointees as a group have tended to display more loyalty to
individual political sponsors and special interests than to the
President, who is elected by and ultimately accountable to the
people.
(j) Employee-buyout programs in Federal organizations have
not worked as well as intended, resulting in the loss of
employees with the most marketable skills, leaving in the
workplace many of the poorer performers.
(k) Programs for Federal-employee professional education,
training, and development are vital to a smaller workforce
adopting modern management methods and achieving desired
productivity improvements.
(l) The Federal Government must follow the best practices
of private and public organizations for exploiting information
technology in reforming management, reducing size, and raising
productivity and market competitiveness. A recent General
Accounting Office report provides valuable insights on how the
Federal Government can lower costs, improve productivity, and
provide better services to its citizens.
2. The Federal Intergovernmental Roles Are Poorly Defined.
(a) The Federal role has evolved in a patchwork manner. The
Federal Government lacks a clear and comprehensive statement of
its proper role. The result is similar redundant programs
throughout disparate departments and agencies.
(b) Many citizens view the Federal Government as having
overreached its proper role, by ``meddling'' in affairs such as
elementary and secondary education (better left to States and
communities), marketing and distribution of energy resources
(better left to market forces) and applied research and
development (better left to private investment and
competition).
(c) Many State governments are willing to risk accepting
large Federal block grants, with fewer dollars, in return for
greater flexibility and fewer restrictions. There is some
concern that any residual reporting burdens and controls from
Washington may interfere with States' roles and as such
constitute an ``unfunded mandate,'' contrary to a law sponsored
by this committee.
(d) In the current environment, many agencies and States
are trying to develop program partnerships. Federal-State
program partnership agreements reached a high point during the
Johnson and early Nixon administrations. State and Federal
leaders need to be aware that those intergovernmental
agreements later deteriorated because roles and
responsibilities were not clearly defined and accepted by all
interested parties. Another cause was that the Federal
Government seized a decisionmaking role disproportionate to the
resources it provided.
3. Organization of Federal Functions Is Uneven and Duplicative.
(a) No Cabinet-level department has been eliminated
outright in our Nation's history, although many have been
reorganized, renamed, combined, or split.
(b) Today's Federal Government is even more enmeshed in red
tape, replicated functions and controls than it was in 1971,
when President Nixon tried unsuccessfully to reorganize and
streamline Cabinet departments.
(c) The proposed ``Department of Commerce Dismantling Act
of 1995'' contains a model for dismantling any high-level
Federal organization using a traditional organization within
the Office of Management and Budget.
(d) Approximately a million Federal employees work in some
30,000 field offices outside of Washington, DC. Although some
field offices only have five or fewer staff, closing them has
consistently proven to be a difficult, almost intractable
political problem. The committee notes progress by the U.S.
Department of Agriculture in addressing the problem.
4. Public Accountability Is Weak.
(a) The National Performance Review [NPR] contributed to
identifying the need to improve the Federal Government and
lower its operating costs.
(b) By not establishing first what activities the Federal
Government should be performing, the NPR was flawed from the
outset and did not achieve enough progress.
(c) NPR neglected to place sufficient emphasis on fiscal
accountability by failing to address the Federal Government's
responsibility for stewardship of public resources.
(d) The ad-hoc, even disjointed, nature of NPR is a telling
sign of the disconnect between policy and management, evidence
of atrophy of the tools of management, and an admission that
the President has no organized capacity to manage the executive
branch.
(e) The NPR recommended a doubling of the existing 1-to-7
supervisory span of control to a 1-to-14 or 1-to-15 supervisor
to subordinate ration. This recommendation was without
appropriate foundation and ignored the Government's widely
varying missions, and threatens public accountability.
(f) With more Federal work being done under contract, with
private vendors, effective contract administration is
critically important in ensuring efficiency, effectiveness, and
accountability.
(g) The growth of ``contract government'' is a direct by-
product of the emphasis on personnel reduction. As successive
administrations have sought to limit or reduce the number of
Federal employees, more and more activities have been
contracted out.
(h) The experiences of other foreign and Federal, State and
local governments in carrying out significant management and
accountability reforms are valuable to Federal agency managers
as they implement the Government Performance and Results Act of
1993 [GPRA].
(i) Government corporations and other Government-sponsored
enterprises have assumed roles and responsibilities very
different from those for which the Government Corporation
Control Act of 1945 was intended. Today, a conceptual framework
is needed for setting up these kinds of enterprises and
centralized oversight of their management operations.
(j) Executive branch accountability is made more difficult
by the complex congressional budget process and by additional
legislative branch restrictions and controls placed on
Government agencies, such as prohibitions on closing outdated
Federal field offices.
Recommendations
Based on the foregoing findings, the committee recommends
as follows:
1. Strengthen the President's Role as Chief Executive Officer of the
Executive Branch.
(a) Management of the Federal Government should be a
Presidential priority. Among the President's many roles is the
responsibility to serve as Chief Executive Officer or general
manager of the Federal Government. Many broad initiatives
intended to make the Federal Government work better depend on
the commitment by the President and his staff in the Executive
Office of the President. By approaching the Federal Government
almost exclusively from a budget or policy perspective,
Presidents limit their capacity to reform management in the
Federal Government.
(b) The President, acting jointly with Congress through a
Federal management office, should establish intergovernmental
partnerships, with clearly defined Federal and State roles and
responsibilities, and allow local Federal managers the
authority and flexibility needed to assist State and local
officials in managing devolved programs, functions, and
resources.
(c) To make the President's executive office more
accountable to the public, Congress should establish an Office
of Inspector General in the Executive Office of the President.
2. Establish an Office of Management.
(a) To enhance the President's management capability
throughout the executive branch, Congress should establish, in
the Executive Office of the President, a top-level management
and organizational oversight office headed by an administrator
who has direct access to the President. Sustained attention to
management issues beyond recurring budget crises is vital to
ensure effectiveness. The new Federal management office would
combine the management functions of the OMB, the residual
policy and oversight functions of the Office of Personnel
Management, and the policy functions from the General Services
Administration into an entity separate from but equal in
stature to the remaining Office of the Budget.
(b) The executive branch is in serious need of an office
with responsibility for departmental reorganizations such as
the proposed dismantling of the Department of Commerce. The
current legislative initiative in that regard will be a model
for managing large-scale reductions in the Federal Government's
organizational structure and scope of work.
(c) An Office of Management could encourage the
implementation of the strategic information management and
technology practices increasingly common in high quality
private and public organizations. It could stress the need to
focus management attention on technology improvements that
attain goals; and assert senior management control over
technology investment decisions.
(d) Executive agencies should exploit, publicize, and
replicate successful private sector ventures in making Federal
Government organizations work more effectively by drawing upon
past successes.
3. Convene a Commission on Federal Reorganization.
(a) Congress should establish a blue-ribbon inquiry
commission of experts from the business, academic, and
nonprofit sectors and Federal, State and local government to
recommend to the President and Congress in early 1997: (i) ways
to organize more efficiently the functions that the Federal
Government performs; and (ii) changes in law that would reduce,
transfer or eliminate Federal functions. If resources permit,
such a commission should produce a reorganization plan.
(b) Such a commission should apply the guideline criteria
for agency elevation to Cabinet department status which were
developed in 1988 by the National Academy of Public
Administration [NAPA]. Such a review ought to result in a new
alignment and grouping of the tasks and functions of the
Federal role by major purpose.
(c) Congress should concurrently provide the President
broad authority, including optional fast-track authority, to
restructure executive branch departments and agencies, similar
to past (and now expired) Reorganization Acts.
(d) Congress should be fully involved in the consolidation
of the many Federal programs it enacts and funds; the proposed
commission should look for additional opportunities to
consolidate or combine Federal programs, and make
recommendations accordingly.
(e) Once changes have been made in the structure of the
executive branch, Congress should conform its own committee
organization and jurisdictions to parallel the executive branch
changes.
4. Reshape the Federal Civil Service.
(a) Congress should proceed with legislation that would
reduce the allowable number of political appointees to an
initial level of 2,000--aimed principally at Schedule C (not
subject to Senate confirmation) positions--and set lower
targets for future years as additional executive branch
organizations are consolidated or abolished.
(b) Congress should appropriate the professional education,
training, and development funds for executive agencies, not as
separate line items, but as an integral part of total personnel
costs. That would afford managers the flexibility to choose
between training and hiring to upgrade collective
organizational skills.
(c) Any future Federal employee ``buyout'' legislation
should be limited to serving the needs of the downsized Federal
Government by focusing agency buyouts on those with less-needed
skills, functions, and capabilities.
5. Strengthen Public Accountability.
(a) Both the President and Congress should complete the
work to implement the Government Performance and Results Act,
in order to make the executive branch both performance-driven
and accountable. The act's performance measurement provisions
ought to be used in all steps of the budget and management
process.
(b) To make public accountability in the executive branch
less cumbersome and counterproductive, Congress should simplify
the present complex structure of 13 separate appropriations
bills by combining them into a lesser number, possibly
comparable to the internal budget review structure in the
Office of Management and Budget. Congress should adjust its own
internal authorizing and appropriating committee structure
correspondingly.
(c) Congress should amend the Government Corporation
Control Act of 1945 to raise the efficiency and effectiveness
of the Federal Government's business-type operations and
organizations and to set standards consistent with today's
marketplace conditions.
(d) In its quest to attain the objective of balancing the
Federal budget by fiscal year 2002, Congress must recognize
three critical needs: (i) to preserve the Federal Government's
accountability to the governed throughout the transformation
process; (ii) to foster that objective by making investments in
human and technological development during that process; and
(iii) to accept the hard lessons learned by industry that
workforce strength is to be cut only after--not before or
while--the Federal roles have been determined and
organizational structures have been reduced or eliminated.
b. Benefits.--Implementing the recommendations in this
report will result in a Federal Government that is less
expensive, more efficient, and more accountable to the
taxpayer. Federal customers and partners in all program areas
will benefit from sharper definition of the roles and
relationships between levels of government, as well as between
the government and the private sector, elimination of
duplicative Federal organizations and activities, and
performance measures that facilitate public discussion and
decision about the ongoing value of government activities. A
strengthened career civil service, well trained and well tooled
in the best management practices of both the public and private
sector, and empowered to employ them, is vital to making these
benefits a reality.
c. Hearings.--The series of eight hearings began on May 2,
1995, with an overview of the NPR process. Testimony was
received from Alice M. Rivlin, Director, and John A. Koskinen,
Deputy Director for Management, Office of Management and Budget
(OMB); Charles A. Bowsher, Comptroller General of the United
States, General Accounting Office (GAO); Tony Dale, Budget
Manager of the New Zealand Treasury (in his capacity as
Harkness Fellow, 1994-5), the Commonwealth Fund of New York;
Duncan Wyse, executive director, Oregon Benchmarking Project;
Dwight A. Ink, president emeritus, Institute of Public
Administration and former Assistant Director for Management,
Bureau of the Budget and OMB; R. Scott Fosler, president,
National Academy of Public Administration; Donald F. Kettl,
nonresident senior fellow, Center for Public Management, The
Brookings Institution, and professor at the University of
Wisconsin, Madison; and Herbert N. Jasper, senior associate,
McManis Associates.
The subcommittee focused next, on May 9, on the appropriate
role of Federal executive leadership in strengthening the
management of Cabinet level departments, hearing testimony from
Thomas P. Glynn, Deputy Secretary of Labor; George Munoz,
Assistant Secretary for Management and Chief Financial Officer,
Department of the Treasury; Assistant Comptroller General
Johnny C. Finch, General Government Programs, and Gene L.
Dodaro, Accounting and Information Management Division, GAO;
Alan L. Dean, former Assistant Secretary of Transportation for
Management and coordinator of President Nixon's plan for
departmental reorganization; William D. Hansen, former
Assistant Secretary of Education for Management and Chief
Financial Officer under President Bush; and Roger L. Sperry,
director of management studies, National Academy of Public
Administration.
The third hearing, on May 16, turned to consolidating and
restructuring the executive branch, assessing alternative ideas
for rearranging or reducing several departments and agencies.
Witnesses were Representative Robert S. Walker of Pennsylvania,
chairman of the Committee on Science; Representative Sam
Brownback of Kansas; Representative Dick Chrysler of Michigan;
Representative Todd Tiahrt of Kansas; Robert A. Mosbacher,
Secretary of Commerce in the Bush administration; Scott A.
Hodge, Grover M. Hermann Fellow in Federal Budgetary Affairs,
the Heritage Foundation; Jerry Taylor, director, Natural
Resources Studies, Cato Institute; and Herbert N. Jasper,
senior associate, McManis Associates.
In its fourth session, on May 16 and 23, the subcommittee
examined the consolidation of a large number of Federal
programs and organizations. The subcommittee heard testimony
from Secretary of Energy Hazel R. O'Leary, Donald P. Hodel,
former Secretary of Energy under President Reagan; Admiral
James D. Watkins, U.S.N. (ret.) former Secretary of Energy
under President Bush; John S. Herrington, former Secretary of
Energy in the Reagan administration; Shelby T. Brewer, former
Under Secretary of Energy during the Reagan administration;
Donna R. Fitzpatrick, former Under Secretary of Energy during
the Bush administration; Marshall S. Smith, Under Secretary of
Education; Donald Wurtz, Chief Financial Officer, Department of
Education; Chester E. Finn, Jr., John Olin Fellow, the Hudson
Institute and former Assistant Secretary of Education during
the Reagan administration; William D. Hansen, executive
director of the nonprofit Education Finance Council and
Assistant Secretary of Education for Management in the Bush
administration; George Munoz, Assistant Secretary for
Management and Chief Financial Officer, Department of the
Treasury; and Paul Posner, Director, Budget Issues, Accounting
and Information Management Division, GAO.
Attention turned in June to the Federal Government's field
establishment. After reviewing several types of possible
corporate structures for Federal aviation, electric power, and
transportation on June 6, the subcommittee heard testimony from
several regional administrators on June 13 to understand their
roles and hear their suggestions, then returned to Chicago on
June 19 for a firsthand look at the Federal Government's
operations from the field perspective. Witnesses at the June 6
hearing were Donald H. Rumsfeld, former Secretary of Defense
under President Ford and chief executive officer of General
Instruments Corp.; Roger W. Johnson, Administrator of General
Services; Jack Robertson, Deputy Administrator and Paul Majkut,
general counsel, Bonneville Power Administration; Daniel V.
Flanagan, Jr., president, Flanagan Consulting Group; Harold
Seidman, senior fellow, National Academy of Public
Administration; Jack Johnson, president, Professional Airways
Systems Specialists; and Barry Krasner, president, National Air
Traffic Controllers Association. Witnesses at the hearing on
June 13 and 19 were Dwight A. Ink, president emeritus,
Institute of Public Administration; Alan L. Dean, senior
fellow, National Academy of Public Administration; Charles F.
Bingham, visiting professor of public administration, the
George Washington University; Wardell C. Townsend, Jr.,
Assistant Secretary of Agriculture for Administration; Shirley
Sears Chater, acting Commissioner, Social Security
Administration; Mary Barrett Chatel, president, National
Council of Social Security Management Associations; D. Lynn
Gordon, Miami District Director, U.S. Customs Service,
Department of the Treasury and George Rodriguez, Houston Area
Coordinator, Department of Housing and Urban Development;
William Burke, Great Lakes Regional Administrator, General
Services Administration and chair, Chicago Federal Executive
Board; Gretchen Schuster, Chicago Regional Director, Passport
Agency, Department of State and Federal Executive Board member;
Joseph A. Morris, former General Counsel, Office of Personnel
Management; Michael P. Huerta, Associate Deputy Secretary of
Transportation and Director, Office of Intermodalism,
Department of Transportation; Kenneth A. Perret, Garrome
Franklin, and Donald Gismondi, Federal Regional Administrators
in Chicago for highways (FHA), aviation (FAA), and transit
(FTA) respectively; and Colonel Richard Craig, North Central
Division Engineer, U.S. Army Corps of Engineers.
The seventh hearing, on June 20, in Washington, emphasized
improving government results through performance measurement,
benchmarking, and re-engineering, as many private corporations
have done. Witnesses providing testimony were Donald F. Kettl,
Center for Public Management, the Brookings Institution, and
professor at the University of Wisconsin, Madison; Harry P.
Hatry, Director of State and Local Government Research
Programs, the Urban Institute; Herbert N. Jasper, senior
associate, McManis Associates, Johnny C. Finch, Assistant
Comptroller General, General Government Programs, GAO; Linda
Kohl, director of Minnesota State Planning; Sheron K. Morgan,
North Carolina Office of State Planning; Joseph G. Kehoe,
Managing Partner for Government Services, Coopers and Lybrand,
LLP; and Laura Longmire, National Director, Benchmarking, KPMG
Peat Marwick LLP.
The series of hearings ended on June 27, 1995, focused on
agencies' preparation for compliance with the Government
Performance and Results Act of 1993 (GPRA).
Testifying at the final hearing were OMB Deputy Director
for Management John. A. Koskinen; Johnny C. Finch, Assistant
Comptroller General for General Government Programs, GAO; Paul
C. Light, director, Public Policy Programs, the Pew Charitable
Trusts; R. Scott Fosler, president, National Academy of Public
Administration; Anthony A. Williams, Chief Financial Officer,
Department of Agriculture; Vice Admiral A.E. (Gene) Henn, Vice
Commandant, U.S. Coast Guard, Department of Transportation;
Joseph Thompson, New York Regional Director, Department of
Veterans Affairs; and Colonel F. Edward Ward, Jr., Director,
Field Offices, Department of Defense Finance and Accounting
Service, formerly with the Air Force Air Combat Command.
2. ``Year 2000 Computer Software Conversion: Summary of Oversight
Findings and Recommendations,'' House Report No. 104-857,
September 27, 1996, Sixteenth Report by the Committee on
Government Reform and Oversight.
a. Summary.--After midnight, December 31, 1999, computer
systems throughout the world are at risk of failing by
confusing the year 2000 with the year 1900 on January 1, 2000,
and going backward in time instead of forward with the new
century. Congress has learned that if businesses and
governments continue to ignore this issue, disruption of
routine business operations and the inability of the Federal
Government to deliver services to the American public could
result.
According to an April 12, 1996, Congressional Research
Service (CRS) memorandum, ``Many people initially doubted the
seriousness of this problem, assuming that a technical fix will
be developed. Others suspect that the software services
industry may be attempting to overstate the problem to sell
their products and services. Most agencies and businesses,
however, have come to believe that the problem is real, that it
will cost billions of dollars to fix, and that it must be fixed
by January 1, 2000 to avoid a flood of erroneous automatic
transactions.''
On April 16, 1996, subcommittee Chairman Stephen Horn
convened a hearing of the Subcommittee on Government
Management, Information, and Technology to determine what steps
Federal agencies are taking to prevent a possible computer
disaster. Among the questions raised were whether agencies are
taking appropriate steps to identify the problem and mobilizing
the necessary human and capital resources to it.
As noted by Representative Tom Davis, ``think for a moment
how dates play a part in each one of our lives and how the
failure of a computer system or computer scanner to recognize
and understand a date can affect us. Our driver's license may
prematurely expire and the Social Security Administration may
recognize 25-year-olds as 75-year-olds, without conversion that
is needed for the year 2000.''
Examples of what could occur if industry and government
ignore this issue ranged from unexpected expiration of drivers'
licenses to erroneous dates for final mortgage payments if two-
digit date fields remain unable to recognize the year 2000.
Given that this information technology project has a fixed date
for completion, January 1, 2000, subcommittee Chairman Horn
asked hearing witness, Kevin Schick, research director, Gartner
Group, to estimate the cost of a solution. Mr. Schick estimated
$600 billion worldwide, including $300 billion in the United
States and $30 billion for the Federal Government. Subcommittee
Chairman Horn then asked Schick what the administration's and,
in particular, the Office of Management and Budget's was doing
to convey the urgency of the problem. Mr. Schick responded
``there is no sense of urgency . . . if [Federal agencies] are
not already well into this project by October of 1997, [the
Federal Government] will be doing a disservice to the very
constituents that depend on [it] to prevent something like this
from happening to them . . .''
On September 10, 1996, a joint hearing with the Committee
on Science was held to review the Year 2000 impact on personal
computers, States and the Federal Government. Larry Olson,
Pennsylvania's Deputy Secretary for Information, presented
Pennsylvania's plan and noted that the key to success of any
plan is senior level support. Mr. Olson testified that in his
first year as Governor, Tom Ridge recognized the implications
of the Year 2000 date field problem and acted to ensure
Pennsylvania businesses and governments will be prepared before
January 1, 2000.
Also at the hearing Harris Miller, the president of the
Information Technology Association of America, outlined three
problem areas for personal computer users in homes and
businesses nationwide: 1) the machines' BIOs--basic input/
output systems--chips; 2) their operating systems; and 3) their
commercial software. Most equipment manufacturers have modified
their products in the past 18 months. Operating system software
remains an issue but most operating systems can be fixed by a
simple procedure using the computer's mouse. Commercial
software may or may not be Year 2000 compliant. Another serious
concern is their increasing interconnectedness with other
systems. To ensure that computer systems are operational in
2000, most systems will need modification.
Miller also testified that personal computer users and
mainframe information technology managers need to be aware of
this issue and take appropriate corrective steps.
In her testimony, OMB's Office of Information and
Regulatory Affairs Administrator Sally Katzen outlined the
Clinton administration's strategy to resolve the problem: 1)
raise the awareness of the most senior managers in Federal
agencies to the problem; 2) promote the sharing of management
and technical expertise; and 3) remove barriers impeding
technicians fixing systems.
b. Benefits.--The subcommittee found the following:
1. The Year 2000 Problem Results From the Unanticipated Consequences of
Decisions Made Decades Ago.
Computer systems use the two-digit-year date field to
perform such functions as calculating the age of U.S. citizens,
sorting information by date, and comparing multiple dates.
Twenty years ago, disk storage was so expensive that a four-
digit-year date format was rejected. In addition to the cost
factor, many programmers assumed that the programs then using
two-digit-year date fields would be obsolete by the year 2000,
if not within 10 years. In fact, systems now in place nearly 30
years continuously were enhanced by technological developments
while remaining programmed for the 20th century. Given these
developments, many experts in the public and private sectors
were confident further advances would provide ``silver bullet''
solutions to such issues as this one. Others believed the
software services industry was overstating the problem to sell
products. While correcting the date field is technically
simple, the process of inventorying, correcting, testing and
integrating software and hardware among all interactive systems
(among industry and government) is very complex.
2. Senior Management Involvement Is Required To Address the Year 2000
Problem.
Various witnesses appearing before the subcommittee
emphasized the value of senior level support to fix the
systems. Many experts, aware of this issue for up to a decade,
were unable to take corrective action because the problem was
considered irrelevant to agencies' missions.
In the Federal Government, an ``Interagency Committee on
the Year 2000,'' established to raise awareness of the task
facing Federal information technology managers, has required
that vendor software in future procurement schedules be Year-
2000 compliant, among other things.
3. The Year 2000 Deadline Cannot Be Extended.
According to Mr. Schick, the crisis revolves around time,
cost and risk. Businesses, Federal agencies, and State and
local governments must understand that this information
technology project cannot be allowed to slip: Saturday, January
1, 2000 cannot be postponed. Mr. Schick added that all parties
may be required to shift resources from other projects to
complete this one.
4. Addressing The Year 2000 Problem Will Be Costly.
Estimates as high as $600 billion for systems worldwide,
$300 billion in the United States and $30 billion for the
Federal Government alone reflect the costs of: inventorying
current programs; analyzing the percentage of code affected;
implementing a fix, and testing to ensure the changes are
correct. All must be completed while current information
technology remain in use.
Only six agencies furnished any cost estimates for
resolving the problem in response to the April 29, 1996
oversight letter: the Departments of Agriculture, Education,
Health and Human Services and State, as well as the Office of
Personnel Management, and the Small Business Administration. In
fact, Agriculture and Health and Human Services only provided
partial estimates.
5. There Is a High Risk of System Failure if the Year 2000 Computer
Problem Is Not Corrected.
If, as suggested by CRS, it is too late to correct every
system nationwide before January 1, 2000, businesses need to
know how to minimize disruptions in their operations. Federal,
State and local governments must prioritize mission critical
systems and immediately correct systems with the greatest human
impact.
Federal, State and local governments, must ensure that
Americans are not at risk of losing government services.
Additionally, the Department of Defense, Federal Aviation
Administration and similar agencies must ensure that their
computers do not go haywire on January 1, 2000, causing severe
disruptions of a strategic nature.
On June 7, 1996, the CRS provided the House and Senate with
a memorandum discussing various issues complicating the Year
2000 project and potential consequences resulting from a
failure to address this problem at the Federal level,
including:
Social Security Administration miscalculation
of the ages of citizens, causing payments to be sent to
ineligible persons and/or denying payments to the
eligible;
IRS miscalculations of standard deductions on
income tax returns for persons over 65, causing
incorrect records of revenues and payments due;
Malfunctioning Department of Defense weapon
systems;
Erroneous flight schedules generated by the
FAA's air traffic controllers;
State and local systems being corrupted by
false records, resulting in errors in income and
property tax records, payroll, retirement systems,
motor vehicle registrations, and more;
Erroneous records by securities firms and
insurance companies; and
False billing by telephone or similar
companies resulting in billing errors or lapses in
service.
6. Potential Liability Issues Arise If the Year 2000 Computer Date
Conversion Is Not Completed.
Businesses--in particular banks, securities firms and
insurance companies, among others--face potential liability for
failing to provide Year 2000 compliant products or services and
must ensure that their data bases are not corrupted by bad data
from external sources. Governments and businesses also must
protect themselves from purchasing noncompliant software and
services through use of commercial market warranties.
c. Hearings.--The Subcommittee on Government Management,
Information, and Technology held a hearing on April 16, 1996,
entitled, ``Is January 1, 2000, the Date for Computer
Disaster?'' and on September 10, 1996, a joint hearing was held
with the Committee on Science, entitled, ``Solving the Year
2000 Computer Problems.''
3. ``Crude Oil Undervaluation: The Ineffective Response of the Minerals
Management Service,'' House Report No. 104-858, September 27,
1996, Seventeenth Report by the Committee on Government Reform
and Oversight.
a. Summary.--Between 1978 and 1993, oil companies underpaid
royalties on crude oil drilled on Federal lands by as much as
$2 billion nationwide. The Department of the Interior's
Minerals Management Service (MMS) has failed to seriously
address this problem.
California is our fourth largest oil-producing State with
1994 crude-oil production of 345 million barrels, a large
amount of which is produced on Federal lands. In 1975, the
State of California and the city of Long Beach sued seven major
oil companies operating in California alleging they had
conspired to keep posted oil prices low, thereby reducing
royalties to the litigants. Similarly, insofar as the posted
price was kept below fair market value, the Federal Government
lost royalties due it for oil production on Federal lands.
In 1986, MMS contacted California officials to assess the
appropriateness of posted prices as the royalty value basis.
MMS' conclusion that posted prices fairly represented market
value reflected the failure of California and Long Beach to
prove their antitrust claims in court. The Department of
Justice looked into the issue but declined to investigate.
In 1991, six companies (ARCO, Shell, Chevron, Mobil,
Texaco, and Unocal) settled with California and Long Beach for
some $345 million. Exxon, the seventh defendant, went to trial
and was exonerated of antitrust charges relating to State oil
leases. Exxon also won an appeal in January 1995. A separate
appeal covering a different time period is pending.
In the wake of the 1991 settlement, MMS attempted to
estimate royalty underpayments for oil produced on Federal
lands. However, since MMS lacked such crucial information as
internal oil company records, California urged it to begin a
more formal investigation. In 1994, MMS responded by creating
an interagency task force consisting of representatives from
MMS and the Departments of Interior, Commerce, Energy and
Justice.
The State of California assisted the Federal team in
obtaining court records which proved instrumental in
demonstrating the undervaluation of crude oil to the Federal
interagency team. In May 1996, the interagency team released a
report concluding that companies often received gross proceeds
higher than their posted prices.
The bulk of crude oil produced in California was not sold
in competitive markets but rather through intra-company
transfers; straight exchanges (where a company trades oil at
one location with another having oil at a second location,
thereby reducing transportation costs) and buy/sell contracts
including such costs as transportation in the cost of the oil.
It is difficult to determine a proxy for the market value of
oil when oil companies hide its true value via complex
contracts.
The interagency report estimated underpayments of Federal
oil royalties on California leases alone to be as high as $856
million from 1978 through 1993. It recommended:
That MMS focus collection efforts on some 10
companies producing 90 percent of Federal crude oil in
California;
That for the period beginning March 1, 1988,
Federal royalties be based on the premium paid on
competitive arm's length contracts for oil produced
from the same field or area;
The Assistant Secretary of the Interior issue
a royalty payor letter ordering targeted oil companies
to submit all relevant arm's length records to minimize
audit expenses;
That the Federal Government submit a bill for
1989 and 1993 to Texaco, since MMS audited those
records, and found royalty underpayments and/or crude
oil undervaluations;
That MMS's oil royalty valuation regulations
be revised to consider alternatives to reliance on
posted prices and improve clarity; and
That a method be chosen to determine royalties
owed.
MMS announced it would accept part of the task force's
recommendations and attempt to collect approximately $440
million. The $856 million figure was reduced due to global
settlements between Interior and the oil companies, payments-
in-kind, and other factors. These figures do not include
underpayments outside of California.
In August 1996, the subcommittee obtained a November 1995,
draft report by the Interior Department Inspector General from
various press sources. The report criticized Interior for
improper procedures during oil company negotiations which
reduced the estimated value of items being negotiated by more
than $350 million without documentation. A year after it was
written, the report has yet to be released.
FINDINGS
The subcommittee found:
1. The Minerals Management Service Has Delayed Collecting Royalty
Undervaluations.
In the June 17, 1996, subcommittee hearing, members
expressed concern that MMS delayed the release of the
interagency report: in a 1994 e-mail to his supervisor, task
force leader David Hubbard stated he had ``stalled long
enough.''
When it announced it would attempt to collect $440 million,
MMS set no timetable for the task. MMS will not simply bill the
oil companies based on Alaska North Slope crude prices but will
audit every contract. With scarce audit resources, this could
take many years. Nor does MMS' audit division appear committed
to collect: unpublished Interior notes quote the head of the
MMS audit division dismissing the interagency task force report
in November 1995 as ``a piece of [expletive deleted].'' Giving
control of the audit process to staff who disparage its results
appears unwise.
MMS also declined to outline interim steps to be taken. The
interagency task force audited Shell's California contracts for
1984 and Texaco's for 1989 and 1993 and recommended billing
those companies immediately for those periods. At the June 17
hearing, however, Interior's Assistant Secretary for Land and
Minerals Management stated that bills would be sent out within
4 to 6 weeks.
2. Global Settlements May Have Harmed U.S. Interests.
MMS' global settlements covering multiple of issues and
claims allowed two oil companies with large underpayments to
avoid payment despite full knowledge of substantial problems
with California underpayments. These agreements may have
extinguished the Federal Government's claim to amounts owed.
The Inspector General draft report concluded the royalty
settlements were not conducted in accordance with ``Minerals
Management Service Settlement Negotiation Procedures'' and
faulted MMS for including ``no documentation for the estimated
values of the issues concerning the underpayment of royalties
to be negotiated. . . .''
Prior to negotiations, an MMS Royalty Management Program
division estimated the value of a particular issue to be
negotiated in a global settlement as $439 million. A
negotiation team listing valued the same issue at $78.2
million. No documentation explained the $360.4 million
discrepancy.
3. The California Undervaluation Problem Exists In Other States.
During the June 17, 1996, subcommittee hearing, Robert
Berman, an economist in Interior's Office of Policy Analysis,
testified that the amount of the undervaluation of oil
extracted from Federal lands ranges from 3 to 10 percent
outside California or as much as $1.3 billion.
4. Royalty-In-Kind Transactions May Have Jeopardized U.S. Interests.
The May 1996 interagency task force report acknowledged it
had not ``investigated recoupment of additional revenues on
royalty-in-kind crude oil that might have been undervalued''
and recommended Interior, ``should consider the effects of RIK
[royalty-in-kind] volumes in its decisionmaking, including
potential collections where these volumes were undervalued.''
In theory, Interior sells RIK oil directly to a refiner. In
practice, it allows the Federal leaseholder and refiner-
purchaser to arrange the terms of sale and transfer. RIK
purchasers may in fact pay, through excessive transportation
charges, more for this oil than the government receives.
5. Pipelines Which Cross Federal Lands Harm Federal Interest By
Depressing Royalty Revenues and Preventing an Efficient Oil
Market.
The task force recognized the problem of proprietary
pipelines:
The market restrictions imposed by proprietary
pipelines operated by the major oil refiners had two
critical effects. First, it greatly restricted open-
market trading in California crude oil. Second, it
segregated the crude oil markets of the San Joaquin
Valley and Ventura Basin from the refining centers in
San Francisco and Los Angeles. The reports [of two
consultants employed by the task force] concluded that
the pipeline situation contributed to postings
substantially understating California crude oil values.
The Department of Energy also recognized this problem and
indicated that the administration's Domestic Natural Gas and
Oil Initiative included a pipeline reform plank. Energy
requested that Interior require pipelines crossing Federal
lands operate as common carriers. Interior has taken no action.
RECOMMENDATIONS
The subcommittee recommends:
1. The Minerals Management Service Should Establish a Timetable For
Collections.
The MMS and Interior should develop a timetable to collect
unpaid royalties. This would assist Congress in providing
oversight and commit the administration to taking action.
2. Audit Staff Must Advance the Management Agenda.
If the audit staff is unwilling to support program goals
determined by the administration, then MMS should contract out
the project. California took this approach and received a $345
million settlement. California now contracts with a certified
public accounting firm to manage its oil sales.
3. The Department of Justice Should Review Global Settlements.
Interior should ask Justice to prepare an opinion
concerning royalties negotiated away by MMS. Interior also
should review its compromise procedures, which are more
sweeping than almost any other Federal agency. Agencies are
limited in their authority to compromise debts under Federal
law. Interior, along with Justice and OMB, should examine
whether the persistent mismanagement of global settlements by
MMS warrants review by Justice.
4. The MMS Should Collect Underpayments in All States Where it is Owed.
Interior should develop a strategy to address this and
advise the committee of its plan.
5. The Department of the Interior Should Review Competition on Common
Carrier Pipelines.
Interior should alter its policy to comply with the
administration's recommendations regarding the Domestic Natural
Gas and Oil Initiative. It also should advise California
officials of problems arising from proprietary pipelines, and
the harm which unregulated pipelines can bring to consumers,
producers and royalty owners.
b. Benefits.--The report addresses a problem which is
costing the Federal Government up to $2 billion in lost
revenue. MMS has delayed the collection of oil royalties due.
c. Hearings.--On June 17, 1996, testimony was received
from: Hon. Ken Calvert, Member of Congress; Cynthia Quarterman,
Director, Minerals Management Service, Department of the
Interior; Robert Berman, Economist, Office of Policy Analysis,
Department of the Interior; Abraham Haspel, Acting Principal
Deputy Assistant Secretary for Policy and International
Affairs, Office of Policy and International Affairs, Department
of Energy; Robert Speir, Economist, Office of Oil and Natural
Gas Policy, Department of Energy; Hon. Robert Armstrong, the
Assistant Secretary of the Interior for Land and Minerals
Management, Department of the Interior; M. Brian McMahon,
attorney for the city of Long Beach, Trustee for the State of
California; Robert Shannon, assistant city attorney, city of
Long Beach; and James McCabe, deputy city attorney, city of
Long Beach.
HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE
Hon. Christopher Shays, Chairman
1. ``The FDA Food Additive Review Process: Backlog and Failure To
Observe Statutory Deadline,'' House Report No. 104-436,
December 21, 1995, Fourth Report by the Committee on Government
Reform and Oversight, Together With Additional Views.
a. Summary.--Since April 1995, the Human Resources and
Intergovernmental Relations Subcommittee has been conducting an
oversight investigation into the delays in the Food and Drug
Administration's (FDA) review and decisionmaking on food
additive petitions. This is the first comprehensive oversight
investigation into the FDA's management of the food additives
program since the food additive amendments were passed in 1958.
Based on this study and two subcommittee oversight hearings,
the committee adopted its fourth report to the 104th Congress
on December 14, 1995.
The Federal Food, Drug, and Cosmetic Act (FFDCA) of 1938
gave the FDA authority over food and food ingredients. The Food
Additive Amendments to the FFDCA were passed by Congress in
1958 to require FDA's pre-market approval for the use of an
additive prior to its inclusion in food. This authority is now
found in section 409 of the FFDCA. (21 U.S.C. 348) An
``additive'' is ``any substance the intended use of which
results or may reasonably be expected to result, directly or
indirectly, in its becoming a component or otherwise affecting
the characteristics of any food.'' This definition covers any
substance used in the production, processing, treatment,
packaging, transportation or storage of food such as colors,
packaging materials, artificial sweeteners and fat substitutes.
Food additives are commonly used to impart or maintain desired
consistency, improve or maintain nutritive value, maintain
palatability and wholesomeness, produce texture, control
acidity/alkalinity and enhance flavor or impart color.
Food additive petitions must be reviewed and acted upon by
the FDA ``not more than 180 days after the date of filing of
the petition.'' (21 U.S.C. 348(c)(2)). The regulatory scheme in
the United States for food additive review is dysfunctional,
and as a result, the American consumer and patient are deprived
of technologies that could increase the variety and nutritional
benefits of foods, improve diet and advance public health. The
statutory deadline is not being met. Statutory changes are
needed to establish more realistic and binding timeframes for
petition reviews.
On June 22 and June 29, 1995, the subcommittee held
oversight hearings to address these issues. At these hearings,
testimony was received from FDA officials with primary
responsibility for food safety and operation of the food
additive petition process, academicians, food manufacturers,
trade associations, food scientists, and consumer groups.
The committee report contained nine major oversight
findings:
1. FDA does not meet the 180 day statutory deadline
to review and make a decision on food additive
petitions.
2. As of June 1995, there were 295 pending food
additive petitions, some of which were filed in the
1970's.
3. The lack of fixed deadlines and the increased
scientific ability to detect and measure potential
hazards have resulted in a review process that is risk-
averse.
4. FDA is reluctant to decline incomplete or
inadequate petitions, and consequently, allows
incomplete and inadequate petitions to remain under
review at FDA for more than 180 days.
5. FDA has committed insufficient resources to its
food additive review responsibilities.
6. FDA does not set food additive petition review
priorities appropriately.
7. FDA's failure to expeditiously review food
additive petitions has stifled innovation and the
introduction of new ingredients by the food industry.
8. A petition review process with no fixed deadlines
can be manipulated for anti-competitive purposes.
9. FDA does not make sufficient use of independent
scientific resources for food additive petition review.
Based upon this investigation, the report made the
following detailed recommendations:
1. Congress should amend the Federal Food, Drug, and
Cosmetic Act review period for food additive petitions
from 180 days to 360 days for the most scientifically
complex reviews, and the deadline should be strictly
observed by FDA.
2. The FDA should recognize that the approval of
useful and safe new products can be as important to the
public health as preventing the marketing of harmful or
ineffective products.
3. The FDA should eliminate the backlog of pending
food additive petitions within 1 year by reallocating
the necessary agency resources.
4. The FDA should utilize outside expertise in its
evaluation of food additive petitions but retain
authority for petition approval.
5. The relevance of the ``Delaney clause'' should be
studied in view of modern scientific standards so that
better distinctions can be made between nominal hazards
and actual risks. The Delaney clause stipulates that no
food additive can be deemed safe if it has been found
to induce cancer when ingested by man or animal. The
FDA should establish a level of acceptable risk for
food additives, below which there is no hazard to
humans through consumption under normal or intended
use.
6. The FDA should amend the review process to
prohibit anonymous submissions of data or comments.
b. Benefits.--The investigation into delays in the food
additive petition review process allowed FDA officials, food
industry representatives, and others involved in the process of
approving or requesting the approval of food additive petitions
the opportunity to articulate their views of flaws in the
regulatory system. When fixed, FDA's food additive petition
review process could benefit the American public by providing a
vast new array of useful and safe products which could add to
or replace less effective products.
c. Hearings.--The subcommittee convened two hearings on
this subject, both entitled ``Delays in the FDA's Food Additive
Petition Process and GRAS Affirmation Process.'' These hearings
provided subcommittee members the opportunity to say directly
to those involved in FDA's food additive petition process that
Congress was not receptive to the agency's failure to meet its
statutory deadlines, but would consider amendments to FDA's
food additive petition review process to give the agency and
petitioners a more reasonable timeframe within which to work.
On Thursday, June 22, 1995, the subcommittee received
testimony from: Linda Suydam, Acting Deputy Commissioner for
Operations of the FDA; Dr. Fred Shank, Director of the Center
for Food Safety & Applied Nutrition of the FDA; Dr. Alan Rulis,
Acting Director of the Office of Premarket Review of the FDA;
Dr. Sanford Miller of the University of Texas Health Sciences
Center; Dr. Richard Hall, chairman of the Food Forum of the
National Academy of Sciences; Al Clausi of the Institute of
Food Technologists; Dr. Stephen Ziller of the Grocery
Manufacturers of America; Dr. Rhona Applebaum of the National
Food Processors Association; Robert Gelardi of the Calorie
Control Council; Dr. Stephen Saunders of Frito-Lay; Dr. C.
Wayne Callaway of the George Washington University School of
Medicine; and Dr. Michael Davidson of the Chicago Center for
Clinical Research, the Rush-Presbyterian-St. Luke's Medical
Center.
On Thursday, June 29, 1995, the subcommittee's second FDA
oversight hearing, testimony was received from: Dr. Kenneth
Fisher of the Federation of American Societies for Experimental
Biology; Jerome Heckman of the Society of the Plastics
Industry; Stuart Pape of the National Soft Drink Association;
Donald Farley of Pfizer, Inc.; and Dr. Michael Jacobson of the
Center for Science in the Public Interest.
2. ``The Federal Takeover of the Chicago Housing Authority--HUD Needs
to Determine Long-Term Implications,'' House Report No. 104-
437, December 21, 1995, Fifth Report by the Committee on
Government Reform and Oversight, Together With Additional
Views.
a. Summary.--On May 30, 1995, the U.S. Department of
Housing and Urban Development (HUD) assumed control over the
day to day operations of the ``troubled'' Chicago Housing
Authority (CHA). A declared breach of contract between CHA and
HUD signed by HUD Secretary Henry Cisneros on June 2, 1995,
made the takeover legally effective. Executed in the wake of
the resignation of CHA's Board of Commissioners on May 26,
1995, the takeover was an unprecedented HUD action.
Although HUD has authority to intervene in troubled housing
agency operations at any time, HUD has never before assumed
responsibility for the day-to-day operations of a housing
agency the size of CHA. CHA is the Nation's third largest
public housing authority and is surpassed in size only by those
of Puerto Rico and New York City. The CHA, created in 1937 by a
resolution of the city of Chicago pursuant to the Housing
Authorities Act of the State of Illinois, administers over
55,000 public and assisted housing units and serves over
150,000 residents.
On June 1, 1995, Congresswoman Cardiss Collins (D-IL),
ranking member of the Government Reform and Oversight
Committee, submitted a request to Committee Chairman William F.
Clinger, Jr. (R-PA) that hearings be conducted in Chicago on
the role of the U.S. Department of Housing and Urban
Development (HUD) in the operation of the Chicago Housing
Authority (CHA). Subsequent to this letter, the subcommittee
began an investigation into the Federal takeover at CHA.
The subcommittee submitted an initial inquiry and document
request to HUD on July 11, 1995, regarding HUD's role in the
takeover of the CHA. The July 11 letter requested information
concerning CHA's demolition and redevelopment initiatives,
HUD's previous efforts to reform CHA administration and the CHA
budget reconciliation for fiscal year 95.
HUD responded to the inquiry on August 1, 1995.
Additionally, Assistant Secretary Joseph Shuldiner and HUD
staff met with the subcommittee and Member staff on August 21,
1995, to address other issues raised regarding the takeover. On
August 28, 1995, the subcommittee directed another document
request and inquiry to HUD's Office of General Counsel. The
Office of General Counsel staff met with the subcommittee staff
the next day to provide a response and to answer staff
questions.
The subcommittee staff also conducted numerous interviews
with members of the Chicago community including: former CHA
Executive Director Vince Lane, Mayor Richard Daley, CHA
residents, former CHA staff and local housing and community
development experts. Further, on August 25, 1995, majority and
minority staff conducted onsite investigations and interviews
in the city of Chicago.
On September 5, 1995, the subcommittee held an oversight
hearing in Chicago to investigate the Federal takeover of the
Chicago Housing Authority. The hearing focused on HUD's
progress at CHA since the May 30 takeover, the agency's short
and long term strategies for reforming CHA and its plans for
installing new leadership and management at the CHA. At the
hearing, testimony was received from top level HUD officials,
including Henry Cisneros, HUD Secretary; the U.S. General
Accounting Office (GAO); panels of tenants; public housing
management experts; and representatives from the city of
Chicago and the private sector.
Based on the investigation and the oversight hearing, the
committee adopted its fifth report to the 104th Congress on
December 14, 1995.
The report contained seven major oversight findings:
1. HUD's takeover of CHA was a necessary response to
the resignation of the CHA Board of Commissioners.
2. HUD implemented a 120 day-plan to stabilize CHA
finances, management, security and physical inventory.
3. Three months following the takeover, HUD lacked a
long term strategy for reforming CHA, and extricating
itself from CHA management.
4. HUD's presence at CHA will be required beyond
January 1, 1996.
5. HUD lacks clear statutory or regulatory standards
to trigger intervention at troubled housing agencies.
6. HUD does not have the staff resources necessary to
run several troubled housing agencies at once.
7. The Resident Management Corp. at 1230 North
Burling, Cabrini Green in Chicago has improved living
conditions and economic opportunities for public
housing residents.
Based upon its investigation, the committee report made the
following detailed recommendations:
1. HUD should promptly secure strong, long term
leadership at CHA.
2. HUD and new CHA management should develop a long
term strategy for the recovery of CHA.
3. HUD should maintain a clear distinction between
its actions as a Federal agency and its actions as CHA
manager.
4. HUD's takeover of CHA should be evaluated as a
pilot program to determine the effectiveness of direct
HUD intervention at other troubled housing agencies.
5. Clear statutory or regulatory standards should be
established for HUD intervention at troubled housing
agencies.
6. HUD should do more to support viable Resident
Management Corp.'s, particularly those operating in
troubled public housing developments.
The report includes additional views by Mrs. Collins and
Mr. Towns expresssing general support for the report, and
noting that a briefing by HUD on December 5, 1995, provided
additional information, not reflected in the report, that some
of the subcommittee's recommendations have already been
adopoted by HUD. The additional views include references to
facts that can be found in the hearing record that provide a
more complete picture of the status of the intervention effort,
the rationale for the takeover, and the capacity of HUD to
intervene in other troubled housing authorities.
Mrs. Collins and Mr. Towns noted that HUD had acted on the
subcommittee's recommendation regarding hiring of CHA staff and
regarding formulation of a long range plan for the CHA. The
additional views also pointed out that HUD offered information
to support the conclusion that the Department does have the
capability to intervene in other troubled housing authorities.
Finally, the ranking members expressed the view that budget
constraints must be acknowledged in any evaluation of the HUD
intervention at CHA.
Mr. Shays' additional views concurred with those of Mrs.
Collins and Mr. Towns regarding HUD's action on the
subcommittee's recommendation.
b. Benefits.--The investigation found that HUD's takeover
of the day-to-day operations of the Chicago Housing Authority
(CHA) was necessary given the magnitude and severity of the
problems faced by the housing authority and its residents.
Significant investment of Federal funds are at risk as a result
of the mismanagement of the CHA. Taxpayers and residents will
benefit from this intervention by HUD. Moreover, the
subcommittee's continued oversight with respect to this matter
may spare the Chicago Housing Authority future years of
deferred maintenance, administrative waste and further
deterioration.
c. Hearings.--On Tuesday, September 5, 1995, the
subcommittee convened an oversight hearing entitled ``HUD's
Takeover of Chicago Housing Authority,'' to receive testimony
from: Hon. Henry Cisneros, Secretary of the Department of
Housing and Urban Development (HUD); Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing at HUD; Kevin
Marchman, Deputy Assistant Secretary for Distressed and
Troubled Housing at HUD; Artensia Randolph, president of the
Central Advisory Committee; Hattie Calvin, president of the
Cabrini Green Leadership Advisory Council; Cora Moore, 1230
North Burling, Cabrini Green, Resident Management Corp.;
Jeffrey Lines, a Kansas City receiver and president of TAG
Associates; Judy England-Joseph, Director of Housing and
Community Development Issues for the U.S. General Accounting
Office (GAO); Rosanna Marquez, director of programs for the
city of Chicago; George Murray, chief of the CHA Police
Department; and William Wallace, managing director of the
Housing Technology Corp.
3. ``Fraud and Abuse in Medicare and Medicaid: Stronger Enforcement and
Better Management Could Save Billions,'' House Report No. 104-
641, June 27, 1996, Eighth Report by the Committee on
Government Reform and Oversight, Together with Additional
Views.
a. Summary.--Fraud and abuse are serious drains on Medicare
and Medicaid programs. The General Accounting Office (GAO)
estimates that as much as 10 percent of annual Government
outlays in Federal health care programs are lost to fraudulent
and wasteful provider claims. If that estimate is correct, it
would mean almost $32 billion was lost in FY 95. Given that
Medicare and Medicaid together account for $269.16 billion in
Federal health care spending in FY 1995, Federal losses to
these programs associated with fraudulent and abusive practices
approached $27 billion. Finding new ways to curb these losses
has been a major bi-partisan concern in recent years.
Both the Medicare and Medicaid programs are vulnerable to
fraud and abuse. There are strong incentives to over provide
services; weak fraud and abuse controls to detect questionable
billing practices; few limits on those who can bill; and
ineffective enforcement tools. The Medicare program is
particularly vulnerable because the Department of Health and
Human Service's (HHS) Health Care Finance Administration (HCFA)
continues to pay higher than market rates for certain services
and supplies. This makes the program an attractive target for
increasingly sophisticated, multi-state or national fraud
schemes.
Medicare is also vulnerable because perpetrators know there
is little chance of being caught. Federal enforcement
activities have been uncoordinated and ineffectively carried
out, and HCFA's anti-fraud-and-abuse controls fail to
systematically prevent the unquestioned payment of claims.
Screening of claims for medical necessity and other criteria is
inconsistently applied. Vendors sanctioned for fraud or abuse
are not effectively barred from continued participation in
Federal health programs because the exclusion sanction is under
utilized. This points to insufficient coordination between
those charged with enforcing existing anti-fraud statutes.
HCFA, the HHS-OIG, and DOJ have outlined initiatives for
curtailing fraudulent and abusive practices in Medicare and
Medicaid programs. However, the extent to which these
initiatives will result in improvements to the Federal
Government's health care anti-fraud capabilities is uncertain.
HCFA has under development the Medicare Transaction System
(MTS) to centralize claims review and processing functions now
handled by 72 contractors.
The GAO characterized MTS a system ``at risk'' in terms of
cost and scheduling. Meanwhile, near-term opportunities for
more effective anti-fraud programs may be missed while HCFA
places most of its hopes on the far-off prospect of the MTS.
Waste, fraud and abuse in Medicare and Medicaid will never
be completely eliminated. However, billions could be saved by
stronger enforcement and better management--actions which would
not place excessive demands on available budgets.
The report contained the following findings:
1. There is insufficient coordination among
government agencies combating waste, fraud and abuse in
the Medicare and Medicaid programs.
2. HCFA does not require Medicare Part B contractors
to use software capable of screening out claims for
inappropriate medical services.
3. HCFA is reluctant to exercise its statutory
``inherent reasonableness'' authority to adjust
reimbursement rates for durable medical equipment and
supplies because the process is costly and cumbersome.
This makes Medicare an attractive target for fraud and
abuse. As a result, the Government too often pays more
than the market price for certain equipment and
supplies costing taxpayers billions of dollars.
4. HCFA's Medicare Transaction System (MTS) project
is vulnerable to cost overruns and schedule delays due
to the agency's lack of a disciplined management
process.
Based on these findings, the report contained the following
recommendations:
1. Congress should require HCFA, HHS IG, DOJ, State
Medicaid Fraud Control Units and other appropriate law
enforcement entities establish a joint program to
coordinate fraud detection and prevention activities,
and to apply the exclusion sanction against vendors
more effectively.
2. HCFA should require its contractors to use
autoadjudication prepayment screens to ensure that
Medicare does not continue to pay claims for medically
unnecessary services.
3. Congress should revise HCFA's ``inherent
reasonableness authority'' to require a price
adjustment for a Medicare item or service within 1 year
of initiating a review of that item or service through
the issuance of an interim final regulation.
4. HCFA should develop a comprehensive management
plan to address the cost and scheduling challenges
associated with the Medicare Transaction System (MTS).
Until that plan is developed, HCFA should focus greater
resources on effective, near-term anti-fraud efforts.
b. Benefits.--This report's detailed findings and
recommendations strengthened the bi-partisan consensus in
support of improved anti-fraud efforts in Federal health care
programs. Federal program administrators generally concur with,
and will be guided by, the recommendations to reduce
vulnerability to fraud, waste and abuse while increasing
preventive enforcement activities in order to limit the
unproductive ``pay and chase'' cycle of current enforcement
efforts.
c. Hearings.--A hearing entitled ``Waste in Human Service
Programs: Other Perspectives'' was held on May 23, 1995. A
hearing entitled, ``Keeping Fraudulent Providers Out of
Medicare and Medicaid'' was held on June 15, 1995. A hearing
entitled, ``Screening Medicare Claims for Medical Necessity''
was held on February 8, 1996. A hearing entitled, ``Excluding
Fraudulent Providers from Medicaid'' was held on September 5,
1996.
4. ``Health Care Fraud: All Public and Private Payers Need Federal
Criminal Anti-fraud Protections,'' House Report No. 104-747,
August 2, 1996, Eleventh Report by the Committee on Government
Reform and Oversight.
a. Summary.--Health care fraud, by some estimates a $100
billion problem, does not stay within the jurisdictional
boundaries that divide Federal, State and local health care
finance and law enforcement. Sophisticated patterns of fraud
and abuse have been detected operating simultaneously against
private insurers as well as Federal and State health programs.
These scams victimize patients and payers across multiple
States, even nationally.
Faced with increasing health care costs, and the growing
price of health care fraud, Congress and Federal policymakers
are aware of the need for a more coordinated, unified approach
to anti-fraud enforcement. One essential element of that
approach is the availability of Federal criminal health care
offenses to prosecute frauds against any and all payers
victimized by the same scheme.
Current Federal enforcement tools are inefficient and
inadequate against increasingly sophisticated patterns of fraud
and abuse. Health care fraud cases, prosecuted mainly under
mail and wire fraud statutes, money laundering and false claims
laws, are complex, costly and time-consuming.
Scarce enforcement resources are wasted when Federal
enforcement efforts to protect Medicare and Medicaid only
result in ``fraud shifting'' to private payers. In that event,
the general public continues to pay the price for health care
fraud in the form of higher insurance premiums and higher costs
for Government health programs.
Support for creation of Federal health care fraud crimes is
both longstanding and bi-partisan. The previous and current
administration endorsed making health care fraud a Federal
crime. Legislation in both the 103d and 104th Congress has
enjoyed bi-partisan sponsorship and support.
Based upon the product of investigative inquiries and
hearing testimony, the committee reported the following
findings:
1. Health care fraud schemes steal billions of
dollars from public and private payers each year.
2. The Department of Justice (DOJ) needs stronger and
more direct statutory authority to deter fraud and
abuse against public and private health care plans.
3. Scarce enforcement resources are wasted in pursuit
of the same fraudulent scheme against public and
private health care plans in multiple jurisdictions.
The report contains one recommendation: Congress should
enact legislation to make health care frauds against all public
and private payers Federal criminal offenses.
b. Benefits.--This report put a bi-partisan focus on the
need for new Federal criminal health care fraud offenses. It
provided Members of Congress and the administration with a
useful historical perspective and current policy rationale to
guide efforts to strengthen enforcement efforts, particularly
when frauds are committed against both public and private
health care payers. Federal ``all payer'' offenses were
included in the Health Care Portability and Accountability Act,
Public Law 104-191.
c. Hearings.--A joint hearing entitled H.R. 1850: Health
Fraud and Abuse Act of 1995, H.R. 2480: Inspector General for
Medicare and Medicaid Act of 1995, and H.R. 3224: The Health
Care Fraud and Abuse Prevention Act of 1996 (Joint Hearing) was
held on May 2, 1996.
5. ``Protecting the Nation's Blood Supply from Infectious Agents: The
Need for New Standards to Meet New Threats,'' House Report No.
104-746, August 2, 1996, Tenth Report by the Committee on
Government Reform and Oversight, Together with Additional
Views.
a. Summary.--In the early 1980's, 10,000 hemophiliacs and
12,000 other patients were infected with the human
immunodeficiency virus (HIV) through blood and blood products.
Approximately 300,000 people were infected with the Hepatitis C
virus (HCV), many of whom have never been told of their
exposure to infection.
The lessons of these tragedies compel greater vigilance and
higher regulatory standards to protect the Nation's blood
supply from emerging infectious agents and blood borne
pathogens. Threats to blood safety are both natural and man-
made, as aggressive new infectious agents emerge and blood
safety practices evolve. As a result, substantial improvements
are needed in coordination between the Public Health Service
(PHS) agencies within the Department of Health and Human
Services (HHS), particularly the Food and Drug Administration
(FDA), the Centers for Disease Control and Prevention (CDC) and
the National Institutes of Health (NIH).
At the first of two subcommittee hearings on blood safety
issues, HHS Secretary Donna Shalala announced that the
Department's focus on blood safety issues will be expanded and
elevated, with the Assistant Secretary for Health charged to
improve the coordination and effectiveness of blood safety
policy.
Current FDA and CDC regulatory systems are not adequate to
meet the aggressive nature of emerging threats to blood safety.
Product recalls and notification regarding possible exposure to
blood borne pathogens are not well communicated to physicians,
pharmacists, patients or the public. Regulation of blood
collection, testing and the production of blood-derived
therapeutics is not well coordinated or consistently managed to
minimize known risks.
The public is not well served if patients are permitted to
believe there is no risk in blood transfusions or in the use of
blood derived therapies. While such risks are extremely small,
and the U.S. blood supply is as safe as it has ever been,
greater efforts should be made to convey known risks to
consumers who may wish to minimize even those risks through the
use of alternative procedures or therapies.
After a year-long investigation of blood safety issues, the
Committee on Government Reform and Oversight issued House
Report 104-746 ``Protecting The Nation's Blood Supply From
Infectious Agents: The Need For New Standards To Meet New
Threats;'' which addressed the need for reform in the
regulation of blood products. The report's findings included:
1. The blood supply is safer than it has ever been.
2. The blood supply continues to face new infectious
disease challenges.
3. In response to the recommendations of the
Institute of Medicine (IOM), HHS has begun to implement
higher regulatory standards to protect the Nation's
blood supply from emerging infectious diseases and
blood borne pathogens.
4. The public is provided insufficient information on
the risks of blood and blood products.
5. The FDA has not effectively managed regulatory
review of blood issues, particularly its advisory
committee on blood safety issues, the Blood Products
Advisory Committee (BPAC).
6. Despite a BPAC recommendation to the contrary, the
FDA took the first step toward closing the ``window
period'' of possible HIV transmission by licensing the
p24 antigen test for screening of donated blood.
7. Fifteen years after the AIDS virus emerged as a
threat to the blood supply, FDA still has not developed
an effective system for communicating blood product
recalls to pharmacists, doctors or patients.
8. The size of plasma pools for fractionated products
can increase the risk of infectious disease
transmission.
The report recommended:
1. Congress should establish the Blood Safety Council
and the Advisory Committee on Blood Safety and
Availability in statute.
2. Congress should consider establishing an
indemnification system for individuals who suffer
adverse consequences from the use of blood and blood
products.
3. HHS should take steps to ensure that the estimated
300,000 living recipients of blood and blood products
who were infected with Hepatitis C virus before 1990
are notified of their potential infection so that they
might seek diagnosis and treatment.
4. HHS should disseminate more clinically useful
information to providers of care and to the public
regarding blood safety issues.
5. FDA should immediately develop an effective system
of recall notification for blood and plasma products.
6. FDA should immediately cease its practice of
providing advance notice of safety and compliance
inspections to some plasma fractionators.
7. Plasma fractionators should limit the size of
plasma pools, with pool sizes determined as much by
public health risk factors as by production economies
of scale.
During the 1980's, 10,000 hemophiliacs and 12,000 others
were infected with the Human Immunodeficiency Virus (HIV),
which causes Acquired Immune Deficiency Syndrome (AIDS),
through the use of blood and blood-derived therapies. The
report found that current scientific and regulatory standards
to detect and remove emerging blood borne pathogens lack both
consistency and vigor. The report recommended greater
cooperation and coordination between Federal public health
agencies, more effective communication of the risks of blood
products to consumers, and more effective recall of
contaminated blood and blood products.
b. Benefits.--The subcommittee's investigation and hearing
allowed FDA officials, patients, physicians, blood collection
industry representatives and plasma product manufacturers the
opportunity to articulate their concerns and solutions
regarding threats to the safety of the blood supply presented
by emerging pathogens, complacency and regulatory
mismanagement. The lessons of HIV and Hepatitis-C infections
compel greater vigilance and higher regulatory standards to
protect the Nation's blood supply from emerging infectious
agents and blood borne pathogens. This report provides an
outline of existing problems in the blood regulatory system as
well as recommendations for resolution of these issues.
c. Hearings.--Hearings entitled ``Protecting the Nation's
Blood Supply from Infectious Agents: The Need for New Standards
to Meet New Threats'' were held October 12 and November 2,
1995.
NATIONAL SECURITY, INTERNATIONAL AFFAIRS AND CRIMINAL JUSTICE
SUBCOMMITTEE
Hon. William H. Zeliff, Jr., Chairman
1. ``National Drug Policy: A Review of the Status of the Drug War,''
House Report No. 104-486, March 19, 1996, Seventh Report by the
Committee on Government Reform and Oversight, Together with
Additional Views.
a. Summary.--Pursuant to the National Narcotics Leadership
Act of 1988 (21 U.S.C. 1501 et seq.), the Director of the
Office of National Drug Control Policy (ONDCP) developed a
strategy and budget for anti-narcotics efforts, including both
supply and demand reduction. In order to evaluate the strategy
and find ways to both improve and supplement in the public and
private sector, the Subcommittee on National Security,
International Affairs, and Criminal Justice held five hearings
and conducted a fact-finding trip to the Caribbean drug transit
zone. The findings and recommendations of these activities are
detailed in the March 19, 1996 committee report.
The National Narcotics Leadership Acts requires that the
strategy: ``(A) include comprehensive, research based, long-
range goals for reducing drug abuse in the United States; (B)
include short-term measurable objectives which the Director
determines may be realistically achieved in the 2 year period
beginning on the date of the submission of the strategy; (C)
describe the balance between resources devoted to supply
reduction and demand reduction; and (D) review state and local
drug control activities to ensure the United States pursues
well-coordinated and effective drug control at all levels of
government.'' The subcommittee held five hearings in order to
determine whether the current strategy and its execution
continues to meet these statutory obligations.
The threats posed by illegal drug use, especially among the
Nation's youth, have continued to grow since the subcommittee
investigation began in January 1995. All national studies show
a rise in drug use among teenagers. Both minority and majority
members of the subcommittee have demonstrated a commitment to
enhancing the drug control strategy by their active
participation in these hearings.
b. Benefits.--As a result of its investigation into the use
of illegal drugs in America and the Nations fight against
drugs, the subcommittee confirmed the following facts:
(1) Casual teenage drug use trends have suffered a
marked reversal over the past 4 years, and are
dramatically up in virtually every age group and for
every illicit drug, including heroin, crack, cocaine
hydrochloride, LSD, non-LSD hallucinogens,
methamphetamine, inhalants, stimulants, and marijuana.
(2) Rising casual teenage drug use is closely
correlated with rising juvenile violent crime.
(3) If rising teenage drug use and the close
correlation with violent juvenile crime continue to
rise on their current path, the Nation will experience
a doubling of violent crime by 2010.\15\
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\15\ See Juvenile Offenders and Victims: A National Report, OJJDP,
Department of Justice, September 1995.
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(4) The nature of casual teenage drug use is
changing. Annual or infrequent teenage experimentation
with illegal drugs is being replaced by regular,
monthly or addictive teenage drug use.\16\
---------------------------------------------------------------------------
\16\ See 1995 surveys conducted by PRIDE, The National Household
Survey, and The University of Michigan's Monitoring the Future Survey.
---------------------------------------------------------------------------
(5) The nationwide street price for most illicit
drugs is lower than at any time in recent years, and
the potency of those same drugs, particularly heroin
and crack, is substantially higher.
(6) Nationwide, drug related emergencies have
steadily climbed and have now reached an all time high.
(7) The 1994, 1995, and 1996 White House ONDCP
strategies consciously shift resources away from
priorities set in the late 1980's, namely from
prevention and interdiction to treatment of ``hardcore
addicts'' and source country programs.
(8) During 1993, 1994 and most of 1995, the President
put little emphasis on, and manifested little interest
in, either the demand side war against illegal drug use
or the supply side war against international narcotics
traffickers. An objective look at the President's
public addresses and his actions including dramatic
cuts in ONDCP staffing, interactions with Congress, and
discussions with foreign leaders reveals that attention
to the rising tide of illegal drug use is a low
Presidential priority.
(9) The President's actual attention to this problem,
measured by other than the paucity of speeches and
proposed budget cuts, has been uniformly low. In
addition to the absence of direct Presidential
involvement in the drug war, the President produced no
1993 Annual Strategy, despite a statutory duty to do so
under the 1988 Antidrug Abuse Act; delayed appointment
of a White House Drug Czar, or ONDCP Director, until
half way through 1993; and produced only a terse
``interim'' 1993 Strategy.
(10) The Drug War appears also to have been expressly
reduced to a low national security priority early in
the administration, and not to have been formally
elevated at any time since.\17\
---------------------------------------------------------------------------
\17\ Reportedly, the drug war's national security priority during
the first 3 years of the Clinton administration was number 29 out of
29.
---------------------------------------------------------------------------
(11) While the position is contested by the
administration's ONDCP Director, a wide cross section
of drug policy experts inside and outside of the
administration concur that the absence of direct
Presidential involvement in foreign and domestic
counter narcotics efforts is one reason for the recent
reversal in youth drug use trends, reduced street
prices for most narcotics, and increased potency of
most illicit drugs.
(12) Prevention programs that teach a right-wrong
distinction in drug use, or ``no use,'' such as
D.A.R.E., G.R.E.A.T., the Nancy Reagan After School
Program, community-based efforts run by groups such as
C.A.D.C.A., PRIDE, the National Parents Foundation, and
Texans War on Drugs, as well as other local school and
workplace programs, have proven both successful and
popular where they have been well-managed and
accountable--despite the 1995 White House ONDCP
Strategy statement that ``[a]ntidrug messages are
losing their potency among the Nation's youth.''
(13) Federal drug prevention programs, such as Safe
and Drug Free Schools, while supporting successful
prevention programs in many parts of the country, have
also been subject to misapplication, waste and abuse.
(14) The Nation's law enforcement community needs
greater flexibility and support from the Federal
Government in addressing the rise in juvenile and drug
related crime. While certain developments are
promising, such as the $25 million increase in Byrne
Grant funding in fiscal 1996, a law enforcement block
grant to supersede the COPS program, and increased
reliance on joint interagency task forces, valuable
time has been lost in addressing this need. Renewed
attention to strengthening Local, County, State and
Federal law enforcement's counter narcotics efforts is
required.
(15) The Nation's interdiction effort has been
dramatically curtailed over the past 3 years, due to
lack of White House support for interdiction needs,
reduced funding, a tiny staff at the U.S. Interdiction
Coordinator's Office, the absence of an ONDCP Deputy
for Supply Reduction, reduced support for National
Guard container search days, the elimination of certain
cost effective assets in the Eastern Caribbean,
reassignment or absence of key intelligence gathering
assets, reluctance by the Department of State to
elevate counter narcotics to a top priority in certain
source and transit countries, unnecessary interagency
quarreling over asset management and personnel issues,
and the apparent inability or unwillingness of the
White House Drug Czar to bring essential interdiction
community concerns to the attention of the President or
to aid the President's Interdiction Coordinator in
doing so; and
(16) There has been poor management and interagency
coordination in source country counter-drug activities.
c. Hearings.--In 1995, the subcommittee held five days of
hearings in conjunction with its investigation of ONDCP. Those
hearings include the following: ``Effectiveness of the National
Drug Control Strategy and the Status of the Drug War'' on March
9 and April 6, 1995; ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?''
on June 27 and 28, 1995; and ``The Drug Problem in New
Hampshire: A Microcosm of America,'' September 25, 1995.
On March 9, 1995, the subcommittee investigation resulted
in its first hearing entitled, ``Effectiveness of the National
Drug Control Strategy and the Status of the Drug War.'' The
purpose of this hearing was to examine President Clinton's 1995
National Drug Control Strategy, and to begin an assessment of
how effectively the Nation is fighting illegal drug abuse,
domestically and internationally. Acknowledged components of
the Drug War under review include prevention, treatment,
interdiction, law enforcement, and source country programs.
At this hearing, testimony was received from four panels.
The subcommittee heard first from former First Lady of the
United States, Nancy Reagan. The second panel included William
J. Bennett, former Director of the Office of National Drug
Control Policy (ONDCP); Robert C. Bonner, former Administrator
of the Drug Enforcement Administration; and John Walters,
former Acting Director of ONDCP. The subcommittee also heard
testimony from Dr. Lee Brown, Director of ONDCP. Finally, the
subcommittee heard from Admiral Paul A. Yost, Jr., former Coast
Guard Commandant; and several nationally recognized drug abuse
prevention experts, including Thomas Hedrick, Jr., senior
representative of the Partnership for a Drug-Free America; G.
Bridget Ryan, executive director of California's BEST
Foundation; James Copple, national director of the Community
Antidrug Coalitions of America (CADCA); and Charles Robert
Heard, III, director of program services for Texans' War on
Drugs.
With varying degrees of emphasis, all panels acknowledged
that current Federal efforts are under strain from reduced
emphasis on certain components of the Drug War, budgetary
pressure, and in some cases accountability.
The panels also acknowledged that, over the past several
years, there has been a marked reversal in several important
national trends including most notably a rise in casual drug
use by juveniles, but also reaching to perceived drug
availability (up), perceived risk of use (down), average street
price (down), drug related medical emergencies (up), drug
related violent juvenile crime (up), total Federal drug
prosecutions (down), and parental attention to the drug issue
(down).\18\
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\18\ Press release, the University of Michigan, ``Drug Use Rises
Again in 1995 Among American Teens:'' December 15, 1995; press release,
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2,
1995; preliminary estimates from the Drug Abuse Warning Network, U.S.
Department of Health and Human Services, September 1995; James E.
Burke, ``Presentation: An Overview of Illegal Drugs in America,''
Partnership for a Drug-Free America, fall 1995. The subcommittee found
that these reversals have continued through the period 1993 to 1995,
although certain trend lines, including a shift from falling to rising
casual use, typically among juveniles, began in 1992. In addition, a
shift of certain interdiction resources, which were earlier a part of
the counter narcotics force structure, began in late 1991 with the
advent of the Persian Gulf War.
---------------------------------------------------------------------------
All panels agreed that renewed national leadership,
including both Presidential and congressional leadership, will
be necessary to combat these recent trend reversals, especially
the rise in juvenile drug abuse and drug related violent
juvenile crime.
The subcommittee continued its investigation into the
Nation's drug control strategy with a second hearing on April
6, 1995, which was a follow-up to the March 9 hearing.
Testimony was received only from Dr. Lee P. Brown, Director of
ONDCP, who continued testimony he gave the subcommittee on
March 9, 1995. Dr. Brown testified on a range of topics,
including treatment, prevention, law enforcement, interdiction
and source country programs.
On June 27 and June 28, 1995, the subcommittee held
hearings entitled, ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?''
to examine efforts to limit supply and availability by
interdicting drugs before they cross our borders. On June 27,
the subcommittee received testimony from a number of witnesses,
beginning with a technology and K-9 demonstration,\19\ and
proceeding through testimony from high school students. The
hearing continued with testimony from the Administrator of the
Drug Enforcement Administration and three investigators from
the General Accounting Office (GAO), who evaluated the
effectiveness of the Clinton administration's source country
programs.
---------------------------------------------------------------------------
\19\ The U.S. Customs Service Canine Training Center provided a
demonstration on the utilization of drug sniffing dogs in illicit
narcotic interdiction. Also, a representative from the U.S. Coast
Guard's Miami Law Enforcement Division demonstrated how an Ionscan and
the Compact Integrated Narcotic Detection Instrument (CINDI) operate to
detect and locate illicit narcotics.
---------------------------------------------------------------------------
The subcommittee first heard from four students affected by
drugs in their schools, including Michael Taylor of Browne
Junior High School, Natasha Surles of Roper Junior High School,
Willie Brown of McFarland Middle School, and Lan Bui of Bell
Multicultural School.
Subsequently, the subcommittee heard testimony by Thomas A.
Constantine, Administrator of the Drug Enforcement
Administration, and expert witnesses Joseph Kelley, Allan
Fleener and Ron Noyes of the General Accounting Office. Mr.
Kelley is Director-In-Charge of the International Affairs
Section and Mr. Fleener and Mr. Noyes are investigators who
principally assisted in producing a June 1995 GAO report on
source country anti-narcotics programs.
Finally, the subcommittee heard testimony from Jane E.
Becker, Acting Assistant Secretary of State for International
Narcotics and Law Enforcement Affairs, U.S. Department of
State; and Brian Sheridan, Deputy Assistant Secretary for Drug
Enforcement Policy and Support at the Department of Defense.
During this hearing, the subcommittee examined the current
drug interdiction efforts of the major Federal agencies engaged
in the national drug control strategy, namely DEA, the U.S.
Coast Guard, U.S. Customs, and the Departments of Defense and
State.
Collectively, the expert witnesses confirmed that on
November 3, 1993, President Clinton signed a Presidential
Decision Directive for Counter narcotics (PDD-14), which
instructed Federal agencies to shift the emphasis in U.S.
international antidrug programs from the transit zones such as
Mexico, Central America and the Caribbean to the source
countries such as Colombia, Peru, and Bolivia. PDD-14 provided
that the Director of the Office of National Drug Control Policy
(ONDCP) should appoint a Coordinator for Drug Interdiction ``to
ensure that assets dedicated by the Federal drug program
agencies for interdiction are sufficient and that their use is
properly integrated and optimized.'' [PDD-14, November 3,
1993.]
The aim of this hearing was to offer the administration's
principals on interdiction, those whose mission was affected by
PDD-14, an opportunity to assess their own efforts and explain
the impact on their agencies of PDD-14 and its concomitant
``controlled shift'' of resources.
Continuing these hearings on June 28, 1995, the
subcommittee received testimony on interdiction policy from
additional administration witnesses, including Admiral Robert
E. Kramek, Commandant of U.S. Coast Guard and U.S. Interdiction
Coordinator, and George Weise, Commissioner of the U.S. Customs
Service.
Admiral Robert E. Kramek, U.S. Interdiction Coordinator and
Commandant of the U.S. Coast Guard, serves a dual role in the
Nation's interdiction efforts. He testified before the
subcommittee in both capacities. He explained that the U.S.
Coast Guard serves as the lead agency for maritime interdiction
and as co-lead with Customs for air interdiction, adding that
drug interdiction takes only 9 percent of the Coast Guard
budget and emphasizing the important role intelligence plays in
drug interdiction. On this topic, he testified that 70 percent
of our operations are based on intelligence.
Admiral Kramek took particular note of the importance of
national leadership on this issue. Offering implicit criticism
of a reduced interdiction effort in the Clinton administration,
he testified that, when the smugglers see our foreign policy
priorities change and make drug interdiction much lower on the
priority list than other things, they're quick to take
advantage of that.
George Weise, Commissioner, U.S. Customs, testified
regarding efforts to interdict drugs at our Nation's borders.
Mr. Weise reiterated the importance of knocking out smuggling
by private plane into this country, and attributes the
increased shift to ground smuggling along the Southwest border
to the efforts against air transport. He believes that the
2,000 miles of the Nation's Southwest border has now emerged as
the primary entry point for cocaine, although he did not
contradict Admiral Kramek's assessment that Puerto Rico has
recently taken on new significance as a port of entry into the
United States.
The subcommittee's investigation also included an
examination of the fight against drugs on the streets of
America's cities. At the subcommittee's September 25, 1995
hearing on the drug problem in New Hampshire entitled ``The
Drug Problem in New Hampshire: A Microcosm of America,''
members received testimony from a number of witnesses fighting
on the front lines at the local levels.
The purpose of the field hearing was to continue an
examination of national drug control policy, focusing on the
successful drug fighting efforts of Manchester, NH, which had
recently participated in a joint interagency task force called
``Operation Streetsweeper.''
Collectively, the expert testimony confirmed the following
facts: Early in 1995, statistics showed that the overall crime
rate in Manchester, which is New Hampshire's largest city, had
declined. However, these statistics also showed that arrests
for drug offenses had increased dramatically, as they had for
other drug related crimes. After a number of murders were
linked to drug distribution and usage, the community came
together to rid their city of this scourge.
Manchester Police Chief Peter Favreau received a $100,000
grant to help pay for State Police Officers to patrol city
streets with city police, and a short time later Manchester
Police were joined by the Sheriff's Department, the State
Attorney General's Drug Task Force, the State Police Special
Investigations Unit, the Drug Enforcement Administration, the
Bureau of Alcohol, Tobacco and Firearms (ATF), and the
Immigration and Naturalization Service (INS). This Federal-
State-Local interagency task force put jurisdictional issues
aside and singularly pursued the aim of getting drug dealers
off the streets of Manchester.
As various panelists and community representatives
testified, the change on the streets of Manchester could be
felt immediately. As Chief Favreau testified, ``With as much
coverage as we have out there, I honestly feel [the criminals]
are going elsewhere. It's almost impossible not to have that
happen.''
In an effort to understand how the interagency task force
worked and what made it so effective, the principals in this
successful antidrug effort testified before the subcommittee.
Since illegal drugs and associated violent crime plague
virtually every city in America, the accounts these witnesses
told offer valuable insights into how best to tackle drugs and
violent crime in other cities around this country.
Witnesses included: Jeff Howard, attorney general for the
State of New Hampshire; Geraldine Sylvester, the director of
New Hampshire's Office of Alcohol and Drug Abuse Prevention;
Paul Brodeur, commissioner of New Hampshire Department of
Corrections; Neal Scott, assistant unit commander of the
Narcotics Investigation Unit with the New Hampshire State
Police; Billy Yout, Special Agent in Charge of Drug Enforcement
Administration; Ray Wieczorek, the mayor of Manchester; Peter
Favreau, chief of the Manchester Police Department (MPD); Paul
Gagnon, U.S. attorney for New Hampshire; Alice Sutphen, a
representative from the citizen's group Take Back Our
Neighborhoods; Dana Mitchell, captain, Dover Police; Michael
Plourde, executive director of the Nashua Youth Council; John
Ahman, regional program director for Marathon House, and; Dick
Tracy, sergeant, Crime Prevention Division, Manchester Police
Department.
d. Fact-finding Trip.--The subcommittee's investigation
included one fact finding trip to the Drug War's front line.
Subcommittee members, the United States Coast Guard and staff,
traveled to the Seventh Coast Guard District in the Caribbean
transit zone between June 16 and June 19, 1995. In the transit
zone, subcommittee members and staff attended briefings at
Seventh District Headquarters in Miami, Coast Guard
interdiction initiatives at sea, DEA activities in the Greater
Antilles, high level interagency briefings in Puerto Rico by
the FBI, DEA, Customs, Border Patrol, and local authorities,
and received in depth briefings by Admiral Granuzo and others
at Joint Interagency Task Force East (JIATF East) in Key West,
dedicated to drug interdiction in the transit zone.
This interdiction trip was arranged in coordination with
the U.S. Coast Guard, and invitations were extended to minority
and majority members.
In briefings, a number of interdiction facts became more
clear. Agents participating in OBAT (Operation Bahamas, Turks
and Caicos), a multi-agency, international operation based in
Nassau, Bahamas, made clear that they have lost major assets
over the past 2 years.
At the Greater Antilles Section Coast Guard Base (GANTSAC)
in Puerto Rico, which covers 1.3 million square miles, multi-
agency briefers expressed the view that, if 70 percent of the
cocaine coming into the United States comes over the Southwest
border, the rest comes through Puerto Rico, which has seen as
much as $40 million in money laundering in recent years. In
attendance at the briefing were representatives of the FBI,
DEA, Border Patrol, Coast Guard, INS, Customs, Department of
Defense and Puerto Rico.
Summarizing the briefing, the assets most needed are: more
radars (including a suggested radar in Belize); more Jayhawk
helicopters; more 378-foot Coast Guard Cutters; ion scanners
and CINDI's; air rights agreements with more Caribbean nations
(perhaps Cuba); and more senior level staff. The Coast Guard
also indicated that they have recently lost 4 of 10 HU-25
intercepter aircraft by re-deployment or demobilization.
At JIATF East, briefers included Rear Admiral Andrew A.
Granuzo, who admitted that the central obstacle to waging a
more effective drug war, particularly in interdiction, is that
``there is no one in charge.'' This assessment mirrored the
testimony of Admiral Yost, Bill Bennett, John Walters, and
Robert Bonner.
JIATF East was created by Presidential Decision Directive
14 (PDD 14), which ordered a review of the Nation's counter
narcotics command and control intelligence centers. Creation of
three joint interagency task forces and a domestic air
interdiction center was authorized by the White House Drug Czar
in April 1994. Accordingly, JIATF East is joined in its
interdiction mission by JIATF West in Alameda, CA; JIATF South
in Panama; the DAICC at March Air Force Base, CA; and JTF-6 in
El Paso, TX.
JIATF East is dedicated to supporting all counterdrug
activities in the transit zone. The command integrates
intelligence with operations, and coordinates the employment of
the U.S. Navy and U.S. Coast Guard ships and aircraft, U.S. Air
Force aircraft, and aircraft and ships from allied nations,
such as Great Britain and the Netherlands. The command's
mission boils down to maximizing the disruption of drug
transhipment, collecting, integrating and disseminating
intelligence, and guiding detection and monitoring forces for
tactical action.
Just as importantly, JIATF East integrates law enforcement
personnel, primarily from Customs, into the international
interdiction effort. For that reason, the command includes FBI,
DEA and State Department, in addition to the Department of
Defense.
2. ``A Two-Year Review of the White House Communications Agency Reveals
Major Mismanagement, Lack of Accountability, and Significant
Mission Creep,'' House Report No. 104-748, August 2, 1996,
Twelfth Report by the Committee on Government Reform and
Oversight, Together with Dissenting Views.
a. Summary.--In March 1994, alarmed by allegations of
waste, fraud and abuse within the White House Communications
Agency (WHCA), Chairman William F. Clinger, Jr., and
subcommittee Chairman William H. Zeliff, Jr., requested the
General Accounting Office to conduct a comprehensive audit of
the mission, functions and operations of that agency. WHCA, a
military unit within the Department of Defense (DOD), is
responsible for providing communications support to the White
House.
The committee's request was met with strong and consistent
opposition from the Clinton administration which argued that
any inspection of WHCA would create an extreme national
security risk and endanger the personal safety of the
President. Nevertheless, after blocking the investigation for
nearly a year, and as a result of continued pressure by
Chairmen Clinger and Zeliff, the administration agreed to
permit the DOD Inspector General (IG) to conduct the requested
review.
The IG audit resulted in a two-part report which confirmed
that WHCA was suffering from severe mission creep, internal
mismanagement, and a lack of oversight and accountability. The
IG concluded that WHCA had significantly expanded its original
mission of providing secure communications to the President,
and that the agency was now providing extensive unrelated
services to the President, First Lady, Vice-President, and to
White House staffers in general. The IG further concluded that
these extraneous services, which were provided and paid for by
DOD, should have been funded by the White House. Although the
IG did not provide a total dollar figure for inappropriate DOD-
WHCA spending, they identified specific services amounting to
more than $16 million in fiscal years 1994 and 1995 which were
improperly paid from DOD's budget.
The reports concluded that WHCA's mission creep had been
fostered primarily by vague and ambiguous mission statements
and the gradual transfer of operational control of WHCA from
DOD to the White House.
While WHCA and its predecessor agencies were initially
devoted solely to military, strategic and national security
support for the President, a broader mission statement was
adopted by DOD in 1962 and subsequently refined in the 1970's
and 1980's to, ``provide telecommunications and other related
support to the President of the United States and to other
elements related to the President. . . . Elements related to
the President are his staff, the First Family, the Vice
President, the U.S. Secret Service Protective Forces, and
others as directed.'' In other words, the DOD had allowed the
agency's mission to be broadened to include almost any task to
support almost any member of the President's family or staff.
The second factor contributing to WHCA's mission creep was
the transfer of operational control of WHCA from the Department
of Defense to the White House. Although WHCA exists as a DOD
agency under the command of the Defense Information Systems
Agency (DISA), DISA does not in fact direct the operations of
WHCA. Rather, WHCA receives its day-to-day orders and
directions from the White House Military Office (WHMO), which
is staffed by political appointees and is part of the Executive
Office of the President. The Director of WHMO--a civilian,
political appointee who holds the position of Deputy Assistant
to the President--directs the activities of WHCA and writes the
annual Officer Evaluation Report which determines the future
career prospects of the WHCA Commander. This Officer Evaluation
Report is reviewed, supplemented and signed by the White House
Chief of Staff.
Thus, although WHCA is technically a sub-command of DISA,
and is theoretically under the supervision of DISA, in practice
the power relationship is exactly reversed. Because of WHCA's
proximity and direct responsibility to the President, DISA has
generally taken a deferential and subservient attitude toward
WHCA, and has focused on ministering to the requirements of
WHCA rather than exercising effective supervision. In light of
that fact, WHCA was willing to expand its mission to
accommodate successive Presidents, even though many of the new
missions should have been funded and performed by other
agencies. This unique role reversal was fundamental to WHCA's
profound mission creep, as well as its parent agency's lack of
program oversight or operational control.
In addition to mission creep and a lack of effective
oversight, the subcommittee's investigation found significant
failings in the areas of procurement, disbursements, property
and inventory management, and obligation controls.
The IG audit revealed that WHCA has routinely avoided
statutorily required competitive bidding procedures for the
purchase of goods and services, relying instead on ``best
guesses'' in assessing the reasonableness of prices quoted. The
agency has frequently ignored fundamental contract law, using
unwritten oral agreements in lieu of clearly negotiated,
verifiable contracts. As a consequence, the agency has often
been held liable for questionable contracts with suspect terms.
WHCA has also habitually bypassed required independent DOD
review of major purchases. These contracting failures have
resulted in millions of dollars of wasted taxpayers' money.
Specific examples of procurement waste cited in the IG
reports included the $4.9 million purchase of two air-
transportable mobile communications systems that did not meet
WHCA's operational needs, and the agency's failed acquisition
of replacement satellite terminals. While WHCA had planned and
justified the purchase of 12 units at a cost of $269,000 each,
the belated discovery that the terminals cost more than twice
that amount, or $618,000 each, forced WHCA to reduce its
purchase by half, thus failing to achieve the needed upgrade.
Additional management difficulties uncovered by the
subcommittee included a lack of control over disbursements
leading to untold numbers of duplicate vendor payments, the
routine late payment of bills and invoices resulting interest
and penalty charges, and the agency's inability to determine
the validity of over $14.5 million in unliquidated payment
obligations.
In the area of property management, the IG audit unearthed
serious problems with WHCA's inventory controls. The reports
disclosed $555,000 worth of computers and $22,000 worth of
photographic equipment which was never recorded in the agency's
property book. In testimony before the subcommittee, the IG
conjectured that the total value of non-recorded property may
have been as high as $738,000. In addition, the auditors noted
that the lack of accountability often made it difficult for
WHCA managers to determine whether non-expendable property
which had been ordered and paid for had actually been received.
The subcommittee's investigation further disclosed that
WHCA failed to follow DOD regulations requiring the regular
inventory and re-validation of major equipment needs. As a
result, the agency was paying over $117,000 a year to lease
telecommunications circuits which were no longer required.
Upon completing its audit and in testimony before the
subcommittee, the IG stated that ``the Assistant Secretary of
Defense (Command, Control, Communications and Intelligence)
management control program needs improvement because a material
weakness exists in that administrative, financial and
operational oversight was not provided to the White House
Communication Agency.'' The IG identified the Assistant
Secretary of Defense for Command, Control, Communications and
Intelligence (the ASD/C3I) as the responsible entity because
the ASD/C3I is in charge of DISA, WHCA's commanding unit.
b. Benefits.--DOD's management response to the IG audit was
provided by Hon. Emmett Paige, Jr., the ASD/C3I, who submitted
joint comments on his own behalf and on behalf of the Director
of DISA and the Commander of WHCA. In response to the IG's
findings of mission creep, the ASD/C3I denied the existence of
any problem. However, the ASD/C3I did concur with almost all of
the IG's findings and recommendations regarding WHCA's lack of
accountability and internal controls. The ASD/C3I acknowledged
not only that each individual accountability problem needed to
be corrected, but also that the scope and nature of WHCA's
accountability problems, taken as a whole, demanded an over-
arching, systemic solution. To that end, the ASD/C3I entered
into negotiations with White House administrators to resolve
questions of WHCA's accountability. As a result of those
meetings, a Memorandum of Agreement (MOA) was executed between
the ASD/C3I and the White House to establish the terms and
conditions governing WHCA's future operations and DISA's
oversight responsibilities.
To address unresolved concerns over mission creep and
further define DISA's oversight responsibilities, the committee
issued a report, House Rept. 104-748, which recommended the
adoption of legislation to statutorily limit WHCA's mission to
providing national security-related telecommunications services
required by the President. The subcommittee recommended that
all other functions presently performed by WHCA either be
transferred to the Executive Office of the President (EOP) or
require EOP reimbursement. This recommendation was
substantially adopted as an amendment to the 1996 Department of
Defense Authorization Act.
The subcommittee further recommended that the WHCA
Commander be given annual performance evaluations by the
Director of DISA.
Finally, the subcommittee recommended the adoption of a 5
year period of annual reporting to monitor the agency's
progress in resolving the problems identified by the DOD IG and
by the subcommittee. This recommendation was also included in
the 1996 Defense Authorization Act.
c. Hearings.--On May 16, 1996, the subcommittee convened a
hearing to receive testimony from Hon. Emmett Paige, Jr., ASD/
C3I; Colonel Joseph J. Simmons, IV, the Commander of WHCA; Mr.
Robert J. Lieberman, Assistant Inspector General for Auditing
for the DOD IG; and Mr. Henry L. Hinton, Jr., Assistant
Comptroller General for the GAO's National Security and
International Affairs Division.
While testimony was received from Messrs. Hinton and
Lieberman, concerns over the submission of two differing sets
of testimony on behalf of Colonel Simmons caused subcommittee
Chairman Zeliff to adjourn the hearing to reconvene at a later
date. When the subcommittee reconvened on Jule 13, 1996,
testimony was received from Secretary Paige and Colonel
Simmons.
3. ``Investigation Into the Activities of Federal Law Enforcement
Agencies Toward the Branch Davidians,'' House Report No. 104-
749, August 2, 1996, Thirteenth Report by the Committee on
Government Reform and Oversight, Prepared in Conjunction with
the Committee on the Judiciary, Together with Additional and
Dissenting Views.
a. Summary.--The conduct of three executive branch
departments and subsidiary agencies came under intense scrutiny
following the raid and standoff at the Branch Davidian
residence in West Texas in 1993. Accordingly, the subcommittee
conducted a 5-month prehearing investigation into executive
branch conduct of these departments and agencies and accepted
testimony by 97 witnesses during 10 days of hearings in 1995.
In June 1992, the Austin, TX Office of the Bureau of
Alcohol, Tobacco and Firearms (ATF) opened a formal
investigation into allegations that members of a Waco, TX
religious group, the Branch Davidians, and in particular their
leader, Vernon Howell (a.k.a. David Koresh), possessed illegal
firearms and explosive devices. A Federal judge issued a
warrant for the search of the Branch Davidian residence and a
warrant for the arrest of David Koresh.
On February 28, 1993, a force of 76 ATF agents stormed the
Davidian residence to serve the arrest and search warrants.
Prior to the commencement of the raid, however, the Davidians
had learned of the ATF's plans. As the agents arrived at the
Davidians' residence, the Davidians engaged the ATF agents in a
gun battle which continued for almost 90 minutes. Four ATF
agents were killed in the battle and more than 20 agents
wounded. Two Davidians were killed by ATF agents and several
others, including Koresh, were wounded. After a cease-fire was
arranged, the Federal Bureau of Investigation dispatched
members of its Hostage Rescue Team to Waco to take control of
the situation at the request of the ATF. At 6 a.m. the next
morning, the FBI formally took control of the situation and a
51-day standoff with the Davidians ensued.
In addition to continual negotiations with the Davidians,
FBI officials took other steps to induce the Davidians to
surrender. These tactics included tightening the perimeter
around the Davidian residence, cutting off electricity to the
residence, and at one point, shining bright lights at the
residence and playing loud music and irritating sounds over
loudspeakers.
During the week of April 12, senior Justice Department
officials began considering a plan developed by the FBI to end
the standoff. Attorney General Janet Reno, other senior Justice
Department officials, and FBI officials held several meetings
concerning the plan. The proposed plan centered around the
injection of a chemical riot control agent through the walls of
the Davidian residence in order to induce the residents to
leave the structure. The plan provided for the methodical
insertion of the riot control agent into different parts of the
building over a 48 hour period. The plan also contained a
contingency clause which called for the insertion of the riot
control agent into all portions of the residence
simultaneously, if the Davidians failed to obey orders or
responded violently.
At approximately 6 a.m., on April 19, 1992, FBI agents
using unarmed military vehicles with mounted booms began to
insert the riot control agent into the compound by ramming
holes into the sides of the building and then spraying the riot
control agent into the holes in the walls. Almost immediately
the Davidians began to fire on the vehicles used by the FBI to
insert the agent. Shortly thereafter, the commander of the
Hostage Rescue Team ordered that the contingency provision of
the operations plan be implemented and that the riot control
agent be inserted in all portions of the residence at once.
At approximately 12:07 p.m., a fire was observed in one
portion of the residence. Within 2 minutes, two other fires
developed. Soon the three fires engulfed the entire structure,
destroying it completely. Nine persons escaped from the
structure during the course of the fire, but more than 70 other
residents remained inside and all of these persons died.
Pursuant to its oversight jurisdiction over the Federal law
enforcement community, the committee's National Security,
International Affairs, and Criminal Justice Subcommittee,
jointly with the Crime Subcommittee of the House Committee on
the Judiciary, conducted an investigation into the initial
raid, ensuing standoff, and eventual fire at the Branch
Davidian Compound near Waco, TX.
b. Benefits.--Throughout the investigation and the
hearings, the subcommittee had difficulty obtaining information
from certain agencies and offices under investigation.
Correspondence files attest to a constant battle for documents
and evidence relating to the situation at Waco. Nonetheless,
the investigation and the hearings brought to light a great
deal of new information, educated the public on a matter that
remained unsettling, and put to rest many errant theories about
the incident.
The central purpose of this investigation was to initiate
internal reforms that would prevent any such tragedy from
occurring again. As a result of this investigation, agencies
have begun to change their policies such that they will
approach future investigations and operations with less
likelihood of tragedy and greater opportunity for success.
Specifically, ATF has experienced an entire change of
leadership. Moreover, the FBI now has 30 Senior Agents
specially trained as ``crisis managers,'' who can be called on
at any time to assist in any similar crisis. The FBI's Hostage
Rescue Team (HRT) has increased personnel and equipment, as
well as the size and training of its negotiating team. Today,
there are nine FBI SWAT teams around the country to assist the
HRT in any similar emergency. The FBI has also established a
working relationship with the crisis resolution centers at
Michigan State University and George Mason University, and now
keeps a resource list of experts on marginal eclectic or
unusual religious groups. In addition, FBI Director Louis Freeh
has implemented a new policy regarding the use of force in
crisis situations that reinforces the FBI's standing policy in
favor of a negotiated solution, and has disposed of the prior
FBI policy permitting a barrage of unseemly noisemaking in
hostage or barricade situation.
Perhaps the most beneficial aspect of the investigation of
Waco was refutation of various conspiracy theories and
accusations of malfeasance on the part of particular government
agencies. The subcommittee made some of the following findings
and recommendations:
FINDINGS
1. But for the criminal conduct and aberrational behavior
of David Koresh and other Branch Davidians, the tragedies that
occurred in Waco would not have occurred. The ultimate
responsibility for the deaths of the Davidians and the four
Federal law enforcement agents lies with Koresh.
2. While not dispositive, the evidence presented to the
subcommittees indicates that some of the Davidians
intentionally set the fires inside the Davidian residence.
3. The gunshot wounds which were the cause of death of 19
of the Davidians on April 19 were either self-inflicted,
inflicted by other Davidians, or the result of the remote
possibility of accidental discharge from rounds exploding in
the fire.
4. Treasury Secretary Lloyd Bentsen and Deputy Secretary
Roger Altman acted highly irresponsibly and were derelict in
their duties in failing to even meet with the Director of the
ATF in the month or so they were in office prior to the
February 28 raid on the Davidians residence, in failing to
request any briefing on ATF operations during this time, and in
wholly failing to involve themselves with the activities of the
ATF.
5. Senior Treasury Department officials routinely failed in
their duty to monitor the actions of ATF officials, and as a
result were uninvolved in the planning of the February 28 raid.
This failure eliminated a layer of scrutiny of the plan during
which flaws in it might have been uncovered and corrected.
6. The ATF's investigation of the Branch Davidians was
grossly incompetent. It lacked the minimum professionalism
expected of a major Federal law enforcement agency.
7. David Koresh could have been arrested outside the
Davidian compound. The ATF chose not to arrest Koresh outside
the Davidian residence and instead were determined to use a
dynamic entry approach. In making this decision ATF agents
exercised extremely poor judgment, made erroneous assumptions,
and ignored the foreseeable perils of their course of action.
8. ATF agents misrepresented to Defense Department
officials that the Branch Davidians were involved in illegal
drug manufacturing. As a result of this deception, the ATF was
able to obtain some training from forces which would not have
otherwise provided it, and likely obtained other training
within a shorter period of time than might otherwise have been
available. Because of its deception, the ATF was able to obtain
the training without having to reimburse the Defense
Department, as otherwise would have been required had no drug
nexus been alleged.
9. The ATF's raid plan for February 28 was significantly
flawed. The plan was poorly conceived, utilized a high risk
tactical approach when other tactics could have been
successfully used, was drafted and commanded by ATF agents who
were less qualified than other available agents, and used
agents who were not sufficiently trained for the operation.
Additionally, ATF commanders did not take precautions to ensure
that the plan would not be discovered.
10. There was no justification for the rehiring of the two
senior ATF raid commanders after they were fired. The fact that
senior Clinton administration officials approved their rehiring
indicates a lack of sound judgment on their part.
11. The decision by Attorney General Janet Reno to approve
the FBI's plan to end the standoff on April 19 was premature,
wrong, and highly irresponsible. In authorizing the assault to
proceed Attorney General Reno was seriously negligent. The
Attorney General knew or should have known that the plan to end
the stand-off would endanger the lives of the Davidians inside
the residence, including the children. The Attorney General
knew or should have known that there was little risk to the FBI
agents, society as a whole, or to the Davidians from continuing
this standoff and that the possibility of a peaceful resolution
continued to exist.
12. The CS riot control agent insertion and assault plan
was fatally flawed. The Attorney General believed that it was
highly likely that the Davidians would open fire, and she knew
or should have known that the rapid insertion contingency would
be activated, that the Davidians would not react in the manner
suggested by the FBI, and that there was a possibility that a
violent and perhaps suicidal reaction would occur within the
residence. The Attorney General should have rejected the plan
and demanded the preparation of an alternative.
13. Following the FBI's April 19 assault on the Branch
Davidian compound, Attorney General Reno offered her
resignation. In light of her ultimate responsibility for the
disastrous assault and its resulting deaths the President
should have accepted it.
14. The FBI should have sought and accepted more expert
advice on the Branch Davidians and their religious views and
been more open-minded to the advice of the FBI's own experts.
15. While it cannot be concluded with certainty, it is
unlikely that the CS riot control agent, in the quantities used
by the FBI, reached lethal toxic levels. However, the presented
evidence does indicate that CS insertion into the enclosed
bunker, at a time when women and children were assembled inside
that enclosed space, could have been a proximate cause of or
directly resulted in some or all of the deaths attributed to
asphyxiation in the autopsy reports.
16. There is no evidence that the FBI intentionally or
inadvertently set the fires on April 19.
17. The activities of active duty military personnel in
training the ATF and in supporting the FBI's activities during
the standoff did not violate the Posse Comitatus Act because
their actions did not constitute direct participation in the
government's law enforcement activities.
RECOMMENDATIONS
1. Federal law enforcement agencies should verify the
credibility and the timeliness of the information on which it
relies in obtaining warrants to arrest or search the property
of an American citizen.
2. The ATF should revise its National Response Plan to
ensure that its best qualified agents are placed in command and
control positions in all operations.
3. Senior officials at ATF headquarters should assert
greater command and control over significant operations. The
ATF's most senior officials should be directly involved in the
planning and oversight of every significant operation.
4. The ATF should be constrained from independently
investigating drug-related crimes.
5. Congress should consider applying the Posse Comitatus
Act to the National Guard with respect to situations where a
Federal law enforcement entity serves as the lead agency.
6. The Department of Defense should streamline the approval
process for military support so that Posse Comitatus Act
conflicts and drug nexus controversies are avoided in the
future.
7. Federal law enforcement agencies should redesign their
negotiation policies and training to avoid the influence of
physical and emotional fatigue on the course of future
negotiations.
8. The government should further study and analyze the
effects of CS riot control agent on children, persons with
respiratory problems, pregnant women, and the elderly.
c. Hearings.--Oversight hearings on Federal Law Enforcement
Actions in Relation to the Branch Davidian Compound in Waco,
TX, July 19, 20, 21, 24, 25, 26, 27 28, 31, and August 1, 1995.
Witnesses testified regarding the involvement of different
agencies on ``agency days.'' Since several agencies were
investigated, the evidence collected at these hearings is
grouped under agency headings.
(i) The Bureau of Alcohol, Tobacco and Firearms.--The
initial investigation of Vernon Howell was conducted by ATF.
ATF's investigation began in late May 1992. A Federal judge
issued warrants based on evidence uncovered in that
investigation. The attempt to serve that warrant on February
28, 1993 went badly awry, resulting in an armed confrontation
which cost the lives of four Federal agents and several Branch
Davidians. Based on those facts, the subcommittee initiated an
investigation into ATF's actions leading to the raid. The
subcommittee submitted document requests to the Department of
the Treasury for all documents in its possession pertaining to
the initial investigation of Vernon Howell. The subcommittee
carefully analyzed the documents relating to the investigation
and interviewed numerous individuals involved in the
investigation and the raid. ATF agents, supervisors and
legislative affairs personnel briefed subcommittee staff on
events surrounding the investigation of Vernon Howell and
preparations for the initial raid on the Mt. Carmel complex.
Surviving Branch Davidians instructed the subcommittee about
conditions at Mt. Carmel and events surrounding the initial
raid. In addition to the defense attorneys for certain Branch
Davidians, representatives of the National Association of
Criminal Defense Lawyers gave their interpretation of the
sufficiency of the warrant that the ATF attempted to serve on
Vernon Howell.
July 19 marked the first day of hearings. On that day, the
subcommittee heard testimony from Dick Reavis, author of
``Ashes of Waco;'' Stuart Wright, contributor and editor of
``Armageddon in Waco;'' Ray Jahn, assistant U.S. attorney;
Gerald Goldstein, president of the National Association of
Criminal Defense Lawyers; Robert L. Descamps, president of the
National District Attorneys' Association; Henry McMahon,
firearms dealer; David Thibodeau, resident at Mt. Carmel; Kiri
Jewell, resident at Mt. Carmel; David Jewell, father of Kiri
Jewell; Lewis Gene Barber, former lieutenant with the McLennan
County Sheriff's Office; Bill Johnson, assistant U.S. attorney;
Davy Aguilera, ATF Special Agent; Chuck Sarabyn, former ATF
ASAC in Houston; Earl Dunagan, former ATF acting SAC in Austin;
Dan Hartnett, former ATF Deputy Director for Enforcement; Ed
Owens, ATF Firearms Expert; H. Geoffrey Moulton, Jr., Project
Director of Treasury Department Review Team; and Dr. Bruce
Perry, Associate Professor of Psychiatry and Behavioral
Sciences at Baylor College of Medicine.
During the first day of hearings, former ATF Special Agent
Davy Aguilera testified publicly for the first time in detail
the fact that ATF agents knew the Branch Davidians were
expecting the raid on Mt. Carmel. Aguilera testified about his
desperate attempts to inform ATF Supervisory Special Agents not
to go ahead with the raid, and tearfully recalled the results
of not being able to turn back the raid.
Chuck Sarabyn, former ATF Assistant Special-Agent-in-Charge
in Austin, testified before the subcommittee about his decision
to allow the raid to proceed in light of the fact that the
Branch Davidians knew the ATF was planning to raid Mt. Carmel.
Sarabyn defended his decision to go ahead with the raid and
maintained that the ATF was afraid of mass suicide among the
Branch Davidians.
This second day of testimony concentrated on the
investigation of Howell's collection of weapons and the alleged
or initially asserted existence of a methamphetamine laboratory
on the premises of Mt. Carmel. George Morrisson, of the Los
Angeles Police Department, testified that ATF should have
employed better investigative techniques and more organized
methods for case management. He told the subcommittee that
newspaper articles surfacing soon before the raid on Mt. Carmel
could have assisted ATF in gathering information. Wade
Ishomoto, of Sandia National Laboratories, told the
subcommittee that the team assembled in Waco to serve the
arrest warrant on Howell was inexperienced and that the raid
plan lacked the sophisticated procedures necessary for such an
operation. Several witnesses testified to the danger of
explosive devices in the presence of chemicals necessary for
the production of methamphetamine.
On this day the hearing consisted of testimony regarding
the actions of ATF and the subcommittee heard testimony from
former Secretary of Treasury Lloyd Bentsen. Secretary Bentsen
testified about the actions he took in response to ATF actions
at Waco. He told the subcommittee that, upon hearing of the
failure of the raid, he established an in-house review
commission that investigated the incident for 5 months and
compiled a report based on a number of interviews. Bentsen
listed those agencies involved in the Treasury investigation:
Secret Service, Customs, the IRS, and the Financial Crimes
Enforcement Network. Bentsen was unable to explain why a
warning from Mr. Altman, his aide at the time, was not viewed
with seriousness or passed on to the FBI; the Altman warning
indicated the possibility of ``tragedy'' if the Davidian
Compound was, as occurred on April 19, 1993, confronted with
what Davidians might perceive as an assault.
Secretary Bentsen also mentioned corrective actions taken
by ATF and Treasury in the wake of the incident at Waco.
According to Bentsen, ATF leadership was replaced, the
intelligence chief was demoted, and the two raid commanders
were relieved of their law enforcement duties. In addition,
Bentsen told the subcommittee that Treasury has enhanced the
formal and informal communication between the Office of
Enforcement and the bureaus within the department.
The final day of hearings regarding the actions of ATF were
held on July 24, 1995. The most compelling testimony this day
was delivered by Robert Rodriguez. Rodriguez recounted how he
warned Mr. Sarabyn and Mr. Chojnacki on the morning of the raid
that the Davidians had been tipped off about the assault.
Chojnacki and Sarabyn testified that Koresh often declared to
followers that the government was coming. ``We didn't know if
he meant in the physical sense or the metaphysical sense,''
Chojnacki said. ``These two men know what I told them,''
Rodriguez countered. ``They knew exactly what I meant . . .
They lied to the public, and in doing so destroyed a great
agency.'' Sarabyn and Chojnacki denied that they lied to the
public. They insisted that Rodriguez did not provide a clear
warning that Koresh knew the raid was imminent. Rodriguez's
version of the events was supported by Lewis Merletti.
(ii) The Federal Bureau of Investigation.--Almost
immediately after the raid on Mt. Carmel, the FBI was called in
to take over the operation of the standoff. The FBI Hostage
Rescue team was in place and FBI negotiators were on the phone
with Davidians almost continuously for the succeeding 51 days.
Jeffrey Jamar, FBI Special Agent-in-Charge in San Antonio,
commanded the FBI team and was charged with deciding which
tactics to employ. The subcommittee investigation produced
audiotapes and transcripts of these negotiations, as well as
contemporaneous memoranda from both inside and outside experts
attempting to explain the actions of Vernon Howell and the
Branch Davidians. After 51 days of standoff, the siege ended
tragically. The Branch Davidian compound burned to the ground
and resulted in the death of 22 children and more than 60
adults.
Regarding the investigation into the role of the Department
of Justice and the Federal Bureau of Investigation, the
hearings continued with testimony from Jack Zimmerman and Dick
DeGuerin, attorneys for Steve Schneider and Vernon Howell,
testified before the subcommittee about their dealings with the
Branch Davidians and explained in detail their attempts to
assist in negotiating a surrender. DeGuerin testified about
difficulties he personally encountered in brokering a potential
surrender. DeGuerin told the subcommittee about his trips into
Mt. Carmel and the breakthrough he had achieved upon receiving
Howell's final promise to surrender. DeGuerin obtained a letter
from Howell in which Howell promised to complete his
interpretation of the ``Seven Seals,'' contained in the Bible,
and then surrender with all the Branch Davidians.
Also testifying on that day were several of the local Texas
Rangers. The Texas Rangers were charged with investigating the
deaths of the four ATF agents killed on the day of the initial
raid. Captain Byrnes testified that the Texas Rangers had many
disagreements with FBI's Jamar and generally felt excluded.
Byrnes testified that, in addition to problems with destruction
of the crime scene by FBI tactical personnel, the Rangers were
disappointed about a lack of communication between FBI
personnel and local officials.
The sixth day of hearings, provided in greater detail, the
facts surrounding the Department of Justice and FBI involvement
in Waco. James Cavanaugh, although an ATF Special Agent,
testified before the subcommittee regarding negotiations with
the Branch Davidians and the transition from ATF control of the
operation to FBI control. Cavanaugh was the first person to
engage in serious negotiations with the Branch Davidians. He
recounted the planning of the initial raid, the ensuing
negotiations for a cease fire, the first surrender offer of the
Branch Davidians and the lengthy negotiations for a surrender.
Cavanaugh described the tension between negotiators and
tactical personnel. He expressed the view that negotiators
prefer to wait for a peaceful solution to a crisis and tactical
personnel generally prefer to intercede with tactical measures.
Peter Smerick was the Criminal Investigative Analyst the
FBI used to profile Howell for the FBI negotiators and the
FBI's Hostage Rescue Team. Smerick testified that his first
four memoranda urged the FBI to ``wait Koresh out'' and advised
against increasing the pressure from outside. Smerick told the
subcommittee that he changed his final memorandum based on his
knowledge that the FBI was not pleased with the tone of his
memoranda and that, although he felt no overt pressure to
change the approach of his memoranda, he knew that FBI agents
on the ground in Waco wanted a view that supported a more
clearly tactical approach.
Jeffrey Jamar, the FBI Special Agent-in-Charge in San
Antonio at the time, was the on-site commander of all forces in
Waco. Jamar testified before the subcommittee that he was
hopeful of a surrender based on Koresh's promise to come out of
Mt. Carmel, when he completed his interpretation of the Seven
Seals. In response to questions regarding the possibility of
the withdrawal of the FBI from Mt. Carmel, Jamar explained that
the danger of gun fire from the building, the risk to children
inside, and the sanitary conditions in Mt. Carmel made
withdrawal untenable. Jamar also testified regarding the
decision to implement the CS gas plan. Jamar said, ``I would
have waited a year if we had something to work with, if there
was just something there we could attach something to. We did
it from February 28 until a decision was made in late March
that we thought we were going nowhere.'' Jamar told the
subcommittee he was certain that Koresh would end the standoff
``his way.'' Jamar also testified that he knew with ``99
percent'' certainty that the Davidians would open fire on the
FBI's Bradley vehicles inserting CS gas, an eventuality that he
also knew would mean acceleration of the CS gas, under the
FBI's CS gas insertion plan.
The subcommittee heard compelling testimony from many
decisionmakers and received testimony of Webster Hubbell,
former Associate U.S. Attorney General; Mark Richard, Deputy
Assistant Attorney General; William Sessions, former Director
of the FBI; Floyd Clarke, former Deputy Director of the FBI;
Larry Potts, former Assistant Director of the FBI, Criminal
Investigations; Harry Salem, Ph.D., Defense Department
Toxicologist; Rick Sherrow, fire expert; Paul Gray, Houston
Fire Department and leader of the Fire Review Team; James
Quintere, arson expert, University of Maryland; and Clive
Doyle, former Branch Davidian.
Webster Hubbell testified on the decisionmaking process
that led to the implementation of the CS gas insertion plan.
According to Hubbell, the decision to implement the CS gas
insertion plan was based essentially on two facts: (1) a lack
of progress in negotiations; and (2) military personnel
assuring him that the inhabitants would exit the building upon
insertion of CS gas. Hubbell testified that President Clinton
wanted to be advised of any change in strategy from one of
negotiation to one of tactical maneuvers. Hubbell testified
before the subcommittee that he was told that Howell was
manipulating the attorneys. Howell's statement that he would
come out upon having interpreted the ``Seven Seals,'' according
to Hubbell, was a ruse. Hubbell told the members of the
subcommittee that Howell was responsible for the deaths of
those inside Mt. Carmel.
The assistant Director of the FBI at the time of the Waco
standoff was Larry Potts. Potts testified before the
subcommittee regarding the FBI's strategy for resolving the
standoff. Potts stated that the strategy was: ``(1) to verbally
negotiate a peaceful surrender of Koresh and his followers;
and, (2) to gradually increase the pressure on those inside the
compound by tightening the perimeter around the compound and
denying the Davidians certain comforts.'' Potts recounted how
this strategy was perceived as a failure, and he outlined the
roles that the FBI and the Department of Justice played in the
development of the CS gas insertion plan.
Potts testified that the FBI, in response to questions
about its conduct of the standoff at Waco, had improved three
aspects of FBI crisis management. ``Jurisdictional issues are
being clarified, crisis response operations have been
reorganized and expanded, including the availability and use of
outside experts; and research efforts have been enhanced,'' he
stated. Potts displayed a diagram of the crisis management
changes implemented as a result of the standoff at Waco.
On the final day of hearings, the subcommittee heard from
Attorney General Janet Reno. On August 1, 1995, Attorney
General Reno gave her reasons for what she termed her decision
to implement the plan to insert CS gas into Mt. Carmel. The
Attorney General described the 51-day standoff, the efforts to
negotiate a surrender, and the reasons that Howell was not
trusted by FBI negotiators. Reno stressed changes the FBI had
implemented since Waco. According to her testimony, the FBI now
has 30 Senior Agents specially trained as ``crisis managers''
to be called on at any time to assist in a crisis the magnitude
of Waco. These managers form an element of the Critical
Incident Response Group, a group formed to deal with crisis
situations. Reno told the subcommittee that the Hostage Rescue
Team will increase its personnel, equipment, and the size and
training of the negotiating team. Today, there are nine FBI
SWAT teams around the country to assist the Hostage Rescue Team
in an emergency. To assist the FBI in dealing with complex,
psychological hostage takers in the future, Reno testified that
the FBI will establish a working relationship with the crisis
resolution centers at Michigan State University and George
Mason University, and will keep a resource list of experts on
marginal religious groups.
Much of Reno's testimony involved her decision to implement
the CS Gas Insertion Plan. The Attorney General told the
subcommittee she thought she had all the information she needed
to make her decision. She indicated however, that someone
informed her of ongoing abuse in the compound; at no time could
she recall who that individual was. She believed that briefings
on CS gas were proper and complete. She did confirm that she
had not read all pre-fire briefing material and was not in the
command center when the tragedy occurred. In her statement to
the subcommittee, Reno assured the members that the FBI was
continuing its research into non-lethal technologies as
alternatives to deadly force.
(iii) The Department of Defense.--The subcommittee
investigated the participation of the Department of Defense
personnel in the events at Waco. Testimony was heard from
Ambassador H. Allen Holmes, Assistant Secretary of Defense for
Solic; Maj. Gen. John M. Pickler, U.S. Army, Commander Joint
Task Force 6; Brig. Gen. Walter B. Huffman, U.S. Army,
Assistant Judge Advocate General for Civil Law; Chris Crain,
Special Forces Group; Lt. Col. Philip Lindley, U.S. Army,
former Deputy Staff Judge Advocate for U.S. Army, Special
Forces Command; Maj. Mark Petree, U.S. Army, formerly of 3/3D
Special Forces Group; Staff Sgt. Steve Fitts, U.S. Army,
formerly of 3/3D Special Forces Group; Staff Sgt. Robert W.
Moreland, U.S. Army, formerly of 3/3D Special Forces Group; and
Sgt. Chris Dunn, U.S. Army, formerly of 3/3D Special Forces
Group.
Ambassador Holmes testified on the role of the military in
domestic law enforcement actions and about military
participation before Waco. Holmes told the subcommittee that,
in his opinion, the process developed to monitor military
involvement in domestic law enforcement was a sound process.
The Ambassador testified that, in his view, there were no
violations of the law regarding military assistance at Waco and
that the process regarding requests for military assistance had
worked effectively.
Staff Sgt. Steve Fitts testified regarding the military
preparations for involvement in methamphetamine laboratories.
He told the subcommittee that he conducted extensive research
on the dangers and precautions required to ``take-down''
methamphetamine laboratories. According to Staff Sergeant
Fitts, he wrote the paper at the instruction of Maj. Mark
Petree. Staff Sergeant Fitts testified that Major Petree then
presented the paper to ATF agents in Houston. According to
Staff Sergeant Fitts, it was clear to him from the reaction of
the ATF agents that these agents anticipated no actual
methamphetamine laboratory at Mt. Carmel. Indeed, based on the
lack of interest shown by ATF agents in the procedures
necessary to dismantle a methamphetamine laboratory, it was
Fitts' belief that ATF agents knew that no methamphetamine
laboratory existed at Mt. Carmel.
POSTAL SERVICE SUBCOMMITTEE
Hon. John M. McHugh, Chairman
1. ``Voices for Change,'' House Report No. 104-438, December 21, 1995,
Sixth Report by the Committee on Government Reform and
Oversight.
a. Summary.--``Voices for Change'' analyzes 10 hearings
held by the Subcommittee on the Postal Service during the first
session of the 104th Congress. Nearly 40 witnesses testified
regarding the problems and challenges facing the current postal
system. Witnesses urged members to consider fundamental reform
of the quarter-century old Postal Reorganization Act because of
the challenges confronting the Postal Service in a changing
communications environment. Four key reform issues emerged in
the hearings, including mail monopoly, labor-management
relations, ratemaking and new postal products. Although
witnesses raised a variety of issues and suggested a broad
range of proposals for improving mail delivery, no unanimity
appeared for any specific approach. However, the report notes
that ``maintenance of universal service and a need to either
strengthen or modify the postal ratesetting process were the
legislative-related issues consistently discussed by a large
majority of witnesses.''
b. Benefits.--The report provides Congress a concise record
of the testimony received by the subcommittee regarding the
operations of the Postal Service and its capacity to perform
its constitutional and statutory mandates. The eight general
oversight hearings highlighted by the report indicate the need
for Congress to review, systematically, the statutory structure
under which the Postal Service operates. An efficient and
fiscally sound Postal Service benefits the American people by
providing a cost-effective and reliable communications system.
In addition, the constitutional undergirding of the Postal
Service requires additional congressional attention in order to
preserve and ensure the future viability of the institution.
c. Hearings.--On February 23, 1995, testimony was received
from Marvin T. Runyon, U.S. Postmaster General, and Michael E.
Motley, General Accounting Office. On March 2, 1995, testimony
was received from the Postal Rate Commission: Edward J.
Gleiman; W.H. LeBlanc; George W. Haley; Edward Quick, Jr.; and
Wayne A. Schley. On March 8, 1995, the subcommittee heard
testimony from Postal Service Governors: Sam Winters, LeGree S.
Daniels, Einar V. Dyhrkopp, Susan E. Alvardo, Bert H. Mackie,
and Norma Pace. On May 23, 1995, the subcommittee received
testimony from Art Sackler, Mailers Council; Ian D. Volner,
Advertising Mail Marketing Association; Richard Barton, Direct
Marketing Association; David Todd, Mail Order Association of
America; Timothy May, Parcel Shippers Association; Tonda Rush,
National Newspaper Association; Cathleen P. Black, Newspaper
Association of America; George Gross, Magazine Publishers of
America; Steve Bair, Association of American Publisher; Alan
Kline, Alliance of Nonprofit Mailers; and Lee Cassidy, National
Federation of Nonprofits. The June 7, 1995, hearing testimony
was received from Moe Biller, American Postal Workers Union;
Vincent Sombrotto, National Association of Letter Carriers;
Scottie Hicks, National Rural Letter Carriers Association;
William Quinn, National Postal Mail Handlers Union; W. David
Games, National Association of Postmasters; Bill Brennen,
National League of Postmasters; and Vincent Palladino, National
Association of Postal Supervisors. On June 14, 1995, the
subcommittee received testimony from John V. Maraney, Nation
Star Route Mail Contractors Association; Randall Holleschau,
National Association of Presort Mailers; Don Harle, Mail
Advertising Service Association; Robert Muma, Envelope
Manufacturers Association of America; Anthony W. Desio, Mail
Boxes, Etc.; Kathleen Synnott, Pitney-Bowes; Neal Mahlstedt,
Ascom Hasler; George W. Gelfer, Postalia; James Rogers, United
Parcel Service; James Campbell, Federal Express; Peter N.
Hiebert, DHL Worldwide; and Harry Geller, Air Courier
Conference of America. On June 28, 1995, Postmaster General,
Marvin Runyon and Deputy Postmaster General, Michael Coughlin
testified before the subcommittee. On July 25, 1995, hearing
testimony was received from Kenneth J. Hunter, Inspector
General.
B. OTHER INVESTIGATIONS
CIVIL SERVICE SUBCOMMITTEE
1. Restructuring of the Office of Personnel Management.
a. Summary.--Vice President Gore's National Performance
Review of 1993 (NPR) ``challenged'' the Office of Personnel
Management (OPM) to become an agent for change. OPM, which
oversees 2.1 million people in the Federal Civil Service
System, announced it would meet this challenge by ``leading the
initiative to reinvent Federal human resource management by
working with all agencies to assess their needs in accepting
more responsibility in this area.'' Since the release of the
administration's NPR, OPM has focused on decentralizing many of
its functions.
OPM intends to concentrate on certain core functions and
devolve other activities. Accordingly, the agency has already
RIFed a large number of training staff and reduced its Federal
investigative program in anticipation of privatization. The
agency intends to cease all governmentwide training activities
before the end of the fiscal year and to divest itself of the
investigations function by the beginning of fiscal year 96.
OPM also intends to delegate all recruitment and staffing
responsibilities to Federal agencies. The functions the agency
will retain include retirement and health benefit programs,
compensation programs, testing and evaluation on a reimbursable
basis, and some policy and oversight responsibilities.
With deep reductions in its workforce, as well as the vast
changes that will occur from the decentralization initiatives,
concerns have been raised over what substantive role OPM will
retain in the future. Of particular concern was OPM's continued
ability to provide adequate oversight over and protection of
the Merit System.
b. Benefits.--The subcommittee will continue to monitor
OPM's restructuring process, and how this downsizing and
decentralization will effect its client agencies. Subcommittee
Chairman Mica voiced his commitment to instituting whatever
remedies necessary to unburden Federal employees from
unnecessary rules and regulation, while ensuring that the
process produces meaningful results that do not interfere with
OPM's ability to carry out core functions and responsibilities.
c. Hearings.--A hearing entitled, ``Restructuring Office of
Personnel Management'' was held on February 7, 1995.
2. Federal Workforce Restructuring Statistics.
a. Summary.--The Federal Workforce Restructuring Act of
1994 established personnel ceilings for fiscal years 1994
through 1996, while targeting 272,900 full-time-equivalent
positions for elimination by the end of 1999. To accomplish
this, without relying entirely on reductions-in-force (RIF's),
the act established temporary financial retirement incentive
programs to encourage voluntary separations from certain
Federal agencies. However, the act does not specify where the
cuts should occur, and preliminary figures indicate the
Department of Defense is bearing the brunt of the reductions.
All executive branch agencies were provided with detailed
guidance by OMB, including steps to be taken to flatten
hierarchies, reduce headquarters staff, and pare down
management control structures. However, nearly three-fourths of
the fiscal year 94 reductions were among civilian employees in
the Department of Defense, and DOD is expected to experience an
even larger share of the reductions in 1995--reportedly up to
98 percent. From 1993 through the middle of fiscal year 95 over
90 percent of total reductions can be attributed to defense
base closures and downsizing activities at the Department of
Defense. The chairman expressed concern over the
disproportionate distribution of workforce reductions and
raised questions about whether the administration's reinventing
government initiatives will result in meaningful government
restructuring or prove to be simply a reduction of the
Department of Defense civilian workforce.
b. Benefits.--This oversight review provided an early
examination of restructuring activities in the executive branch
and highlighted the disproportionate downsizing of the
Department of Defense. The planning and out placement programs
of the Department of Defense should serve as useful models for
workforce reductions in other government agencies.
c. Hearings.--A hearing entitled, ``Federal Workforce
Restructuring Statistics'' was held on March 2, 1995.
3. Examining the Federal Retirement System.
a. Summary.--The Federal pension system consists of two
programs: the Civil Service Retirement System (CSRS) covers
Federal employees hired prior to 1984, and the Federal
Employees Retirement System (FERS) covers those employees hired
after 1984. A total of 2.8 million active employees are
covered, with 1.5 million in CSRS and 1.3 million in FERS.
Currently, 2.3 million participants receive annuities. CSRS has
2.2 million retirees and survivors, FERS has 37,800.
Acccording to OPM's 1993 Annual Report on the Civil Service
Retirement and Disability Fund (CSRDF) in 1996, the outlay for
monthly payments for retirees of the Federal Government is
estimated to be $39.2 billion. The CSRDF is projected to take
in approximately $10 billion in cash receipts and payments from
employee payroll deductions and from cash contributions from
the U.S. Postal Service. Transfers from the General Treasury
will make up the difference between receipts and payments--
nearly $30 billion. The annuities are projected to grow, while
the cash receipts will stay relatively the same. In 2025, cash
coming in will total $3.6 billion, while outlays will total
$166.2 billion. And by 2035, cash receipts are estimated to be
$5.6 billion, while outlays will top $218.5 billion. This
increasing burden on the taxpayer and the overall financial
stability of the Federal retirement system is of utmost
importance to the chairman of the subcommittee.
The subcommittee is involved in an ongoing analysis
examining a host of various proposals concerning Federal
pension reform.
The subcommittee reviewed the retirement benefits available
for Members of Congress, congressional staff, and executive
branch employees under current law. In the 104th Congress a
number of Members pension reform bills have been introduced and
were reviewed by the subcommittee. Under current law, Members
and staff under CSRS accrue benefits at 2.5 percent of
preretirement pay for each year of service. Executive branch
employees with 10 or more years of CSRS service accrue benefits
at 2.0 percent per year. Members and staff under FERS accrue
benefits at 1.7 percent per year of service up to 20 years, and
1.0 percent per year over 20. Executive branch FERS employees
benefits accrue at 1.0 percent per year, or 1.1 percent if the
individual retires at age 62 or over. Members and staff
contribute a greater portion of payroll in exchange for the
greater benefit.
b. Benefits.--The investigation exposed growing reliance of
the Federal retirement system on general tax revenues. To
stabilize the Federal retirement system the subcommittee will
consider the creation of a new retirement system which would be
fully funded outside of the Federal budget and would be subject
to the same standards and requirements as private sector
pension plans. Such a system would assure Federal retirees full
payment of benefits without having to rely on the Treasury to
subsidize their annuities. This is a responsible approach to
financing the government's commitments to its employees and it
allows for the permanent elimination of one entitlement program
from the Federal budget.
The retirement reform of Members and congressional staff
was included in the Balanced Budget Act of 1995. Under this
reform Members and staff retirement benefits and payroll
contributions will conform to that available to executive
branch employees.
c. Hearings.--Hearings entitled ``Federal Retirement
Systems: Overview,'' ``Federal Retirement: Congressional
Pensions'' and ``Funding Civil Service Retirement'' were held
on March 7, 1995, March 10, 1995, and June 28, 1995.
4. Contracting Out.
a. Summary.--Federal policy, adopted during the Eisenhower
administration and endorsed on a bipartisan basis by all
subsequent Presidents, affirms that Federal agencies should not
be performing commercial activities in competition with private
sector businesses. Although Federal agencies contract for more
than $200 billion in goods and services each year, the Office
of Management and Budget estimated in a 1987 Report to the
President's Commission on Privatization that more than 900,000
civilian Federal employees were performing commercial
functions. In spite of this substantial commercial activity by
Federal agencies, previous hearings alleged that Federal
agencies were involved in ``arbitrary and perhaps ill-conceived
contracting out.''
OMB Circular A-76 provides administrative guidance to
agencies for conducting cost comparisons to evaluate the
efficiency of proposed contracts. In spite of the established
mechanism, few cost comparisons of commercial functions are
completed, in part because Federal agencies consider the
process itself costly and a disruption to the workforce, and in
part because Congress has included numerous provisions of law
that restrict agencies from conducting the studies and/or from
contracting after the studies are completed. In a June 16,
1995, release, the National Performance Review reported that 25
such obstacles to privatization remain in law.
Subcommittee Chairman Mica has routinely asserted his
belief that it could and should be possible to contract out
more than 50 percent of the services and activities of the
Federal Government as we know it today. If the widespread
contracting successes being achieved by State and local
governments do not move the Federal Government in the direction
of greater contracting for commercial services, inevitably
budget constraints will.
OMB's Circular A-76 maintains that the government should
use competition to reduce the costs of goods and services so
that it would pay no more than necessary for the quality
services that it needs. The subcommittee's analysis has shown
that the absence of competition results in excessive costs,
with the salaries and benefits of government employees
comprising approximately 60 percent of the cost of government
operations. Wendell Cox of the American Legislative Exchange
Council testified that between 1980 and 1991, Federal
employees' wages increased approximately $4.56 for each dollar
that private sector compensation increased. As a result,
average Federal employees make 45 percent more than private
sector employees and 30 percent more than State Government
employees. Over the course of a 40-year career, the expected
lifetime earnings of a Federal employee have been estimated to
be $600,000 greater than that of a comparable private sector
employee. Surveys of government managers have demonstrated
savings in 98 percent of the cases where functions have been
converted to contract, and that the mere fact of competition
has the effect of restraining cost increases. Although
government must retain full policy control of all its
operations, contracting could be used much more extensively to
minimize the costs of providing public services and performing
government activities.
b. Benefits.--The investigation highlighted the need to
update OMB Circular A-76, and OMB reissued the circular in
March 1996.
c. Hearings.--Hearings entitled ``Contracting Out: Summary
and Overview'' and ``Contracting Out: Current Issues'' were
held on March 29, 1995, and April 5, 1995.
5. Examination and Review of the Federal Workforce Restructuring Act of
1994.
a. Summary.--The Federal Workforce Restructuring Act of
1994 authorized Federal agencies to provide voluntary
separation incentives (``buyouts'') to Federal employees as one
means of reducing Federal employment by 272,900 by fiscal year
1999. Civilian agencies were authorized to offer buyout
incentives not to exceed $25,000 each during a period which
expired March 31, 1995, and the Department of Defense was
allowed to continue offering buyout opportunities through
September 30, 1999. By the end of fiscal year 1995, OPM
reported that more than 112,500 former Federal employees had
been paid buyouts and left their agencies, with more than
68,000 of them leaving the Department of Defense. An additional
50,000 are anticipated to accept Department of Defense offers
during the coming 4 years. Total costs to the government of
these incentive payments are expected to exceed $2.4 billion.
Former Federal employees who accept the buyouts may not
return to Federal employment for a 5-year period or are
required to repay the full amount of the incentive. By
encouraging voluntary separation, buyouts are intended to
reduce reliance on reduction in force (RIF) procedures and
enable agencies to retain relatively younger workers while
senior employees (those eligible or nearly eligible for
retirement) accept payments to leave. Separation rates,
however, are severely affected by rumors that a buyout might be
offered, as evidenced by the reduction in the number of
voluntary retirements from Federal agencies while the buyout
program was being authorized in legislation.
The General Accounting Office (GAO) has reported that 38
percent of buyout payments reported to date went to people in
the overhead/administrative positions that were targeted by the
National Performance Review. Nearly 70 percent went to
employees at or above the GS-11 level, and 62.9 percent went to
men. Minority members received 24 percent of the buyouts. The
average age of people accepting buyouts was 60--about 1 year
younger than regular retirement. Fifty-two percent of the
buyout payments reported so far went to employees who were
eligible for retirement. The GAO testified that there appears
to have been some use of contract personnel to replace departed
employees, but the absence, so far, of cost comparison studies
required by Section 5(g) of the Workforce Restructuring Act
makes difficult the tracking and analysis of buyout effects.
b. Benefits.--Buyout authority may be a beneficial tool in
downsizing and restructuring the Federal workforce, provided
certain procedures are followed: agencies must engage in long
range planning and know how they want the organization to look
at the end of the restructuring; buyout window should be short
to avoid generating rumors and behavior changes based upon
expectation of buyouts; buyouts should not be done in
successive waves; and buyouts should be effective early in the
fiscal year to maximize savings. Additionally, buyouts should
be targeted and never offered across the board to avoid
additional funds being used to hire and train people with
skills identical to those benefiting from buyouts. Downsizing
and reorganization are most successful when the importance of
directing restructuring efforts to a revised organizational
goal is recognized, and detailed planning strategies are
employed to achieve it. As a result, the committee has not
recommended extending executive branch buyout authority at this
time.
c. Hearings.--A hearing entitled ``Buyouts: Boon or
Boondoggle'' was held on May 17, 1995.
6. Review of the Ramspeck Act.
a. Summary.--The Ramspeck Act is a 1940 law that enables
members of congressional staffs who have served at least 3
years to gain noncompetitive appointment to the career civil
service if they lose their congressional positions through no
fault of their own; often as a result of the defeat of a Member
or a Member's choosing not to run again. GAO reported that more
than 80 percent of recent Ramspeck appointments have been in
offices of congressional affairs, public affairs, or policy and
strategic planning.
Congressman Porter Goss introduced legislation to repeal
the Ramspeck Act, H.R. 913, which was referred to the Civil
Service Subcommittee. Representative Goss recommended repeal of
the Ramspeck authority, arguing that constituents view this law
as merely another special privilege that Members of Congress
arrange for their staffs. Ramspeck procedures give former
congressional employees privileges that are not available to
other citizens, who must compete for positions in the Federal
service. He believes that Ramspeck authority is inconsistent
with the Congressional Accountability Act, adopted early in
this session, which holds Congress subject to the same laws
that affect other citizens.
b. Benefits.--Conditions have changed since the Ramspeck
law was enacted, and it is no longer difficult to attract
quality applicants to congressional staff positions. The
committee was concerned that continued use of Ramspeck
appointments creates situations where policies repudiated by
the electorate in recent elections may gain continuity in the
career civil service through non-competitive transfers of
staff.
Congress repealed the Ramspeck Act authority as part of the
Lobbying Disclosure Act (H.R. 1564). The repeal, which becomes
effective 2 years after the President signed the law, will
eliminate this end run around the merit system.
c. Hearings.--A hearing entitled ``Ramspeck: Repeal, Reform
or Retentions'' was held on May 24, 1995.
7. Review of the Combined Federal Campaign.
a. Summary.--The Combined Federal Campaign (CFC) is an
annual, taxpayer-subsidized solicitation drive in the Federal
workplace that began as an effort to aid genuine charities
while minimizing workforce disruption. However, many political
and ideological advocacy groups and others, who do not directly
provide or support human health and welfare, litigated and
lobbied their way into the CFC.
On February 23, 1995, subcommittee Chairman Mica wrote to
James B. King, the Director of the Office of Personnel
Management (OPM), asking for his support and cooperation in
restoring the Combined Federal Campaign to its rightful role of
aiding genuine human health and welfare charities. While the
chairman fully endorses and encourages supporting genuine
charities, the presence of advocacy groups raises questions
about requiring taxpayers to subsidize organizations with which
they disagree. A 1988 Task Force on the CFC established by OPM
estimated that the CFC costs taxpayers between $55-60 million a
year. (OPM's current leadership estimates the cost of the CFC
as $22.1 million.)
b. Benefits.--Examination of this issue revealed the extent
to which taxpayers are forced to subsidize numerous advocacy
groups and other organizations with political agendas that
participate in the CFC.
c. Hearings.--A hearing entitled ``Combined Federal
Campaign: Lawyers & Lobbyists v. People in Need?'' was held on
June 7, 1995.
8. Contracting Federal Investigations--Policy and Oversight.
a. Summary.--Since the Atomic Energy Act of 1954,
background investigations have been an important factor in
deciding the suitability, security, and public trust
qualifications of Federal employees. President Eisenhower
extended background investigation requirements through
Executive Order 10450, but such investigation centered
primarily around employee susceptibility to threats from
foreign governments. Some critics believe that several Supreme
Court decisions, the Freedom of Information Act, and the
Privacy Act combine to make it difficult to gather the
information essential to a meaningful adjudication of these
areas. As part of the administration's initiatives to reinvent
government, OPM abolished chapters of the Federal Personnel
Manual establishing criteria for security, suitability, and
public trust determinations required to oversee a diverse range
of agency requirements in a unified civil service.
The administration considers the transition of
investigations to the private sector an important component of
its effort to reinvent government. This reflects a
reorientation of the agency from providing services to
conducting policy direction and oversight. OPM proposed an
employee stock ownership program (ESOP) as the privatization
vehicle chosen for this transition. A sole source contract to
the ESOP is an essential ingredient to successful
implementation of this plan. Oversight of the investigation
function would remain a Federal responsibility under the
purview of OPM, but the bulk of the current workforce is
expected to shift to the ESOP. Data bases essential to the
system would remain government-owned but reside on contractor-
operated equipment. OMB testified that any savings from this
program would be realized only when agencies became able to
acquire investigative services competitively from private
firms, thereby reducing the costs of background investigations.
The ESOP would have to compete on an equal basis as a private
provider.
The committee is concerned that Federal agencies with
legitimate concerns about the security and suitability of
Federal employees have adequate access to investigative
services. Many agencies already obtain background
investigations through private contractors; work that amounts
to more than $20 million each year. Even agencies with
significant national security concerns, such as the Department
of Defense, contract for significant portions of their
background investigations. These agencies rely upon OPM's
Federal Investigations Processing Center at Boyers, PA, for
essential data and information to support their suitability
determinations. In the 6 months between announcement of the
privatization plan and the subcommittee's oversight hearing,
OPM witnesses were unable to describe systematic planning for
conversion, with most of the planning being contracted through
a trustee organization.
b. Benefits.--These hearings documented the deficiencies in
the administration's planning for the transition from a
government function to an ESOP operation. GAO and OPM testified
that the gathering of information for background investigations
is not an inherent function of the Government, the
administration demonstrated less-than-effective planning for
the proposed transition. Cost estimates included in OMB's
budget submissions suggested that these initiatives would save
4 percent per year. OPM awarded a trustee contract to develop a
business plan and negotiate a transition on June 9, 1995, only
a week before the hearing. These planning deficiencies
strengthened the argument to delay implementation from the
December 31, 1995, administration proposal to March 31, 1996,
as approved in the OPM appropriation for fiscal year 1996.
c. Hearings.--Hearings entitled ``Oversight of Federal
Investigations Policy'' and ``Outsourcing of OPM's
Investigations Program'' were held on June 14, 1995, and June
15, 1995.
9. Administration's AIDS Training Program.
a. Summary.--Title 5 authorizes training in the scientific,
professional, technical, mechanical, trade, clerical, fiscal,
administrative or other appropriate fields. Section 4101
requires workplace training to be a ``planned, prepared, and
coordinated program . . . which will improve individual and
organizational performance and assist in achieving the agency's
mission and performance goals.''
Department heads are required, at least once every 3 years,
to review training and other developmental needs essential to
meeting mission and performance requirements. This review is an
integral part of agency planning, the purpose of which is to
ensure that public funds used to develop an organization's
human resources have a direct relevance to (1) improving
productivity; (2) fulfilling the organizational mission; and
(3) providing quality products and services to the public.
On September 30th, 1993, President Clinton delivered a
memorandum to the heads of executive departments and agencies
directing full implementation of comprehensive HIV/AIDS
workplace policies and employee education and prevention
programs by World AIDS Day, 1994. The Office of the National
AIDS Policy Coordinator was authorized to implement the
directive, and in a follow-up memo, then-Director Kristine
Gebbie required mandatory employee attendance at HIV/AIDS
education and prevention training.
The HIV/AIDS mandatory training sessions received much
adverse attention, due to reports that inappropriate and
questionable materials were presented. The committee received
numerous letters and calls from Federal employees objecting to
being subjected to graphic talk about uncomfortable subjects in
the midst of fellow workers. These recent reports raised
questions as to whether the Federal HIV/AIDS education training
is designed to meet the statutory requirements designated in
Title 5: to improve individual and organizational performance,
and assist in achieving the agency's mission and performance
goals.
b. Benefits.--Witnesses testified that many aspects of the
administration's training program were not fit for the Federal
workplace, either in content or method of presentation. They
argued that Federal employees should not have to suffer
training programs that assail their fundamental religious and
moral principles on pain of losing their jobs, as was the case
with the administration's mandatory AIDS training program.
According to OPM's figures, Federal agencies spend more than $1
billion on training. In light of the controversy generated by
the administration's AIDS training, it is clear that closer
oversight of employee training is necessary in order to assure
that training is appropriate for the Federal workplace, both in
content and method of presentation. Legislation has been
proposed to protect Federal employees from improper training
and to ensure that taxpayers' dollars are used only for
appropriate workplace training.
c. Hearings.--A hearing entitled ``Administration AIDS
Training Program'' was held on June 22, 1995.
10. Privatization of OPM Training Responsibilities.
a. Summary.--On May 16, 1995, the Office of Personnel
Management and the U.S. Department of Agriculture Graduate
School signed a memorandum of understanding (MOU) transferring
OPM's Workforce Training Services, along with its office space,
training obligations, and student lists, to the Graduate
School, effective July 1, 1995. OPM separated 220 individuals
from the agency, 134 of whom were extended offers of employment
by the Graduate School. This transfer of functions moved a
service from OPM's revolving fund to a ``non-appropriated fund
instrumentality,'' a move that OPM Director James B. King
described as a ``seamless transition'' enabling many former
employees of the Workforce Training Services to retain
employment while continuing arrangements through which Federal
agencies could obtain training services without the burden of
Federal procurement regulations.
This initiative has been described among the
``privatization'' initiatives advanced through the National
Performance Review. Yet, by retaining authority to work through
interagency agreements, this transition strategy reduced the
exposure of the training services to competition--a critical
factor in improving quality and reducing prices. Witnesses
testified that full privatization--including the possibility of
a sale of assets to interested private bidders--might have
resulted in greater funds for the Treasury while increasing
competitive pressures for quality. Moreover, OPM retains
responsibility for oversight of training, even though the
transition does not provide explicit description of that role.
b. Benefits.--More direct privatization of training
activities could have resulted in substantial cost-savings to
the government. However, concerns have been raised that OPM is
choosing to compete unfairly with the private sector and
closing off an area that would thrive if full competition were
the result. Instead, the USDA Graduate School became eligible
to receive annually more than $72 million of noncompetitive
work funded by taxpayers, despite the fact that these training
activities are commercial services readily available from
private competitors.
c. Hearings.--A hearing entitled ``OPM Privatization
Initiatives Training'' was held on July 26, 1995.
11. Review of Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS).
a. Summary.--Beneficiaries of the military health care
system are eligible to receive medical care at military
facilities. However, depending upon the level of demand and
ready access to facilities, this care is not always assured. In
1995, 6.6 million non-active duty people are eligible for care
through the military health care system. The deficiencies of
the overall military health system, of which the Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS)
is a part, are identified by a July 1995 Congressional Budget
Office (CBO) study. In that study, CBO reported that a major
complaint among beneficiaries is that their access to health
care at military medical facilities is poor, and that CHAMPUS
is not a satisfactory alternative because of its high out-of-
pocket costs.
CHAMPUS costs grew dramatically after the program's
inception in 1966. Costs almost tripled from $1.2 billion in
fiscal year 1984 to $3.18 billion in fiscal year 1990. Many of
these costs were unanticipated and required supplemental
appropriations or transfer authority. In 1983, in an attempt to
put an end to the increasing costs of its health care system,
and uneven access to health care services, the Department of
Defense (DOD) began a managed care program, called TRICARE.
TRICARE offers beneficiaries an alternative to the current
CHAMPUS program. Beneficiaries are assigned a primary care
physician to manage their care. In administering TRICARE, DOD
has reorganized the military delivery system into 12 regions.
TRICARE is scheduled to be implemented nationwide by May 1997.
Four regional contracts have been awarded, all to the same
civilian health care company, and all bid awards have been
protested. However, while TRICARE is still in the early stages,
some have suggested that it is unlikely to result in giving
eligible military beneficiaries access to stable, high quality
health care benefits, nor will it improve the efficiency of the
military health care system.
The Federal Employees Health Benefit Plan (FEHBP) provides
voluntary health insurance coverage for over 9 million Federal
Government employees, annuitants, and their dependents, and has
long been considered the foremost health care plan in the
country. The Federal Government and enrollees jointly pay for
the cost, or premiums, of the FEHBP plans, according to a
statutory formula. The Government's portion of each enrollee's
premium is a fixed dollar amount equal to 60 percent of the
average of the high option premiums for what are commonly known
as the Big Six plans. The average premium contribution for both
nonpostal and USPS employees and all annuitants was 72 percent
in 1994, with the employees paying the remaining 28 percent.
Federal employees and annuitants enroll voluntarily in
FEHBP and may terminate their enrollment at any time. Employees
are allowed to enroll in FEHBP or change from one plan to
another during designated ``open season'' periods. In 1995,
over 9 million individuals were covered: 2.3 million active
employees, 1.8 million annuitants, and over 5 million
dependents. Approximately 5 percent of enrollees change plans
each year.
b. Benefits.--The government could benefit from an overall
reduction in the cost of medical services provided to military
families and access to services could be greatly improved by
moving to an FEHB type of program. However, the cost of
transition to such an alternative delivery system could be high
and disruptive of readiness requirements. Further study of this
issue is required.
c. Hearings.--A hearing entitled ``FEHB/CHAMPUS: Improving
Access to Health Benefits for Military Families'' was held on
September 12, 1995.
12. Review of Current Civil Service Reform Initiatives.
a. Summary.--The Civil Service Reform Act of 1978
reorganized the Civil Service Commission by creating the Office
of Personnel Management to perform policy, oversight, and
service functions; adding the Merit Systems Protection Board to
adjudicate personnel disputes; and formed an Office of Special
Counsel to investigate personnel management issues. In
addition, the 1978 law enacted measures intended to make
government more performance-oriented and to achieve greater
accountability.
Vice President Gore's National Performance Review (NPR) of
1993 promised a Civil Service Reform program package that would
be developed in conjunction with the President's Management
Council. However, initiatives of NPR could rescind many of the
Civil Service Reform Act's provisions. The administration's
package considered a comprehensive range of changes, from
hiring procedures through each phase of recruitment, retention,
management, labor-management relations, dispute resolution
procedures, termination, and Office of Personnel Management
operations.
Although this National Performance Review product was
initially presented as a comprehensive package for civil
service reform. The modifications included in the NPR package
were never formally submitted as legislation, and generated
limited support among five panels of witnesses. The committee
continues to analyze such civil service reform proposals.
b. Benefits.--Former OPM officials encouraged the
subcommittee to approach civil service reform issues
deliberatively, because the long-term effects of apparently
sound proposals only surface after extensive experience. The
normal constituencies share interests, especially increasing
pay and benefits, in ways that do not easily surface in complex
reviews of classification systems, performance evaluation
systems, appeals procedures, and other details.
c. Hearings.--A hearing entitled ``Civil Service Reform I:
NPR and the Case for Reform'' was held on October 12, 1995.
13. Continuation of Civil Service Reform Review: Performance and
Accountability.
a. Summary.--Federal agencies experience difficulties
linking the activities of their employees to results intended
when laws are enacted and policies implemented. The Civil
Service Reform Act of 1978 included provisions to improve
Federal personnel management, among them the creation of the
Senior Executive Service, the GM-13-15 management grades, and
greater incentives to better improved performance of agency
managers. Oversight agencies reported that these incentives
faced sustained resistance among the managers, who contended
that the system limited the number of bonuses available and
exacerbated the morale problems associated with performance
ratings.
Abundant evidence points to the failure of performance
management systems in Federal agencies. Most agencies use a
five-step scale where managers are asked to rate subordinates
as ``outstanding,'' ``exceeds fully successful,'' ``fully
successful,'' ``minimally successful,'' and ``unsuccessful.''
The Office of Personnel Management's report of fiscal year 1993
ratings shows that 99.6 percent of Federal employees who
received a rating were evaluated at least ``fully successful,''
and more than 73 percent were rated ``exceeds fully
successful'' or ``outstanding.'' OPM recently issued
regulations enabling agencies to replace these multi-step
evaluations with ``pass-fail'' rating systems.
Human resource professionals contend that performance
management systems which focus on results or ratings
concentrate attention on an end process and divert attention
from earlier stages in the employee management process. Private
sector consulting firms and corporations have testified before
the subcommittee asserting a more comprehensive approach to
personnel management can reduce the need for unsatisfactory
ratings and/or firings to strengthen performance. The Hay
Group, for example, encourages its clients to evaluate
potential employees not only in terms of ``knowledge, skills,
and abilities'' (factors identified on all Federal vacancy
announcements), but also ``values, attitudes, and motives,''
factors that are seldom (if ever) incorporated in Federal
hiring decisions.
The 103d Congress repealed the Performance Management and
Recognition System. With improved performance measures required
by both the Chief Financial Officers Act of 1990 and the
Government Performance and Results Act of 1993, Congress
reaffirmed its commitment to pursue improved performance by
attempting to shift attention to results rather than
procedures.
b. Benefits.--The Merit Systems Protection Board surveyed
Federal managers and learned that although 78 percent reported
managing a ``poor performer,'' only 23 percent of them
initiated demotion or removal actions to address the problems.
The hearing demonstrated that the challenges facing the Federal
managers are identical to those in the private sector. The
evaluation and management of poor performers must be linked to
recruitment, hiring, promotion, and development activities if
it is to be effective. This hearing provided additional
material for deliberation related to civil service reform
proposals.
c. Hearings.--A hearing entitled ``Civil Service Reform II:
NPR & the Case for Reform--Continuation'' was held on October
26, 1995.
14. Review of Federal Employee Appeals Procedures.
a. Summary.--Federal employees have at their disposal many
avenues through which they can appeal a variety of personnel
actions. The U.S. Merit Systems Protection Board (MSPB), the
independent quasi-judicial agency in the executive branch which
has a statutory mandate to adjudicate appeals of personnel
actions for the government and its employees, decided
approximately 8,500 cases in fiscal year 1994. Other agencies
involved in the Federal employment complaints process, include:
the Federal Labor Relations Authority (FLRA), the Office of
Special Counsel (OSC), and the Equal Employment Opportunity
Commission (EEOC). In addition, there are multiple levels of
reviews of actions within employing agencies, internal agency
grievance procedures, and negotiated grievance procedures in
collective bargaining agreements, as well as special agency
procedures for resolving discrimination claims.
The complicated, lengthy means of appeals available to
Federal employees led witnesses to testify that the maze of
multi-layer, multi-agency appeals processes deters managers
from disciplining poor performers or initiating action in
conduct cases. Due to the extraordinary amount of time and
unknown expense involved in a lengthy appeal, both GAO and the
National Academy of Public Administration have expressed the
need for consolidating the appeals process and adjudicatory
agencies. A recent Issue Paper published by the MSPB emphasized
that ``[t]he wide choice of review paths available to employees
serves to exacerbate'' the hesitancy of Federal managers to
take appropriate action against poor performers. That Issue
Paper concluded that the ``current multi-level, multi-agency
process should be reexamined,'' observing that the Federal
Government needs ``a system that ensures fairness, not one that
deters appropriate actions from being taken.''
b. Benefits.--The committee heard extensive testimony that
creating a simpler, more straightforward, less duplicative
mechanism for resolving disputes in the Federal workplace could
improve performance management in the executive branch. Some
components of the current system, most notably the
unnecessarily complex ``mixed case'' procedure, are simply
inefficient and needlessly burden American taxpayers with
unnecessary costs. Testimony before the subcommittee clearly
demonstrated that there are several attractive alternatives for
simplifying and consolidating the appeals process. Witnesses
also recommended greater use of alternative dispute resolution
methods, which will be the subject of a future subcommittee
hearing.
c. Hearings.--A hearing entitled ``Civil Service Reform IV:
Streamlining Appeals Procedures'' was held on November 29,
1995.
15. Shutdowns of Federal Agencies Due to Lapses in Appropriations.
a. Summary.--President Clinton vetoed a continuing
appropriations resolution on November 13, 1996, resulting in
the 10th shutdown of government due to a lapse in
appropriations since 1981. The first shutdown lasted from
November 14 to November 21, 1995. Subsequent vetoes resulted in
another shutdown of agencies covered by six appropriations
bills that had not been enacted, with the second shutdown
extending from December 16, 1995, to January 6, 1996.
The Office of Management and Budget documented that the
administration had been coordinating planning for a potential
shutdown beginning in August. Although all agencies were
required to submit shutdown plans to OMB, committee staff found
that the plans revealed little consistency in planning and an
absence of standards in assessing agency plans. Although the
initial reason for the shutdown was a lapse of appropriations
and fear of violating the Antideficiency Act, the President
proposed to modify shutdown guidelines after only a few days,
arguing that the shutdown had fostered conditions that would
meet the legal exception for ``emergency'' recall of selected
Federal employees. After hearing testimony from nine senior
agency officials, several committee members expressed concern
that many of the employees whose work could qualify as
``emergency'' in only a few days, probably should not have been
furloughed in the first place. The subcommittee also received
testimony from 14 members who were proposing a variety of
legislation to address disruptions caused by the shutdowns.
b. Benefits.--The subcommittee's first hearing on the
shutdown enabled members to identify functions that should not
have been interrupted during the first shutdown. Those views
were communicated to the President, and the designated
functions remained open during the second shutdown, even though
some of them still lacked appropriations.
c. Hearings.--Hearings entitled ``Government Shutdown:
What's Essential?'' and ``Government Shutdown II'' were held on
December 6, 1995, and December 14, 1995.
16. Employee Benefits in the Context of Total Compensation.
a. Summary.--Economic constraint is the primary factor that
guides the level and design of compensation and benefit
packages throughout the private sector. Some employment-based
benefits, such as pensions, life insurance, and health
insurance are provided voluntarily by employers. Employers and
employees often jointly make payments to fund these voluntary
employee benefit programs. Other benefits, including Social
Security, Medicare, workers' compensation and unemployment
insurance, are mandated by government. These mandatory programs
are jointly funded by employers and employees, and provide
retirement income and health care coverage for elderly and
disabled workers and their dependents. Whether mandatory or
voluntary, each of these programs is employment based and
financed primarily through employer and employee payroll
deductions. The government also promotes the granting of
additional benefits through favorable treatment under the tax
code.
Compensation packages can be tailored to achieve the
workforce goals of the employer while simultaneously
accommodating the needs and preferences of workers. The
integration of benefit policy, with both short and long range
personnel planning, is essential in the private sector.
Flexible benefits plans are growing in popularity in response
to the changing demographics of the American population, and
the dual income family. Within such arrangements, employees are
permitted choices among benefits and/or benefit levels.
Employees thus may exchange benefits that they consider less
valuable for others better suited to their needs. The level of
benefit provided can vary greatly, and tends to be directly
related to the size of the business. According to the Employee
Benefits Research Institute's Data Book on Employee Benefits,
less than half of all small employers provide a retirement
benefit for their workers.
b. Benefits.--The Federal Government could benefit from a
review of its compensation strategies to keep abreast of
changing workforce demographics. As the population ages, as
corporations face increasing competition in the global
marketplace, and as the needs of their employees change, the
private sector is adapting its human resource management
strategies. As Congress seeks to better allocate available
resources within realistic budget constraints, it makes sense
to reevaluate our Federal personnel management strategies.
c. Hearings.--A hearing entitled ``Civil Service Reform
III: Private Sector Compensation Practices'' was held on
October 31, 1995.
17. Medical Savings Accounts (MSA's) in the Federal Employees Health
Benefits Plan.
a. Summary.--A number of proposals have been introduced
during the 104th Congress to allow individuals and families to
establish tax-favored Medical Savings Accounts (MSA's) for
uninsured medical expenses. An MSA can be viewed as a savings
account for uninsured medical expenses. MSA's are primarily
designed to encourage workers to be more cost conscious in how
they spend their money on routine health care, and are also
aimed at controlling employer costs. An MSA allows the employer
to put aside a fixed amount of money into an account for each
employee to pay for his or her own health expenses. In lieu of
giving the employee first-dollar or low-deductible coverage,
the employer puts cash into a medical savings account and
insures or covers the employees' health care costs in full
above the amount in the MSA--often referred to as catastrophic
coverage. Whatever funds are not spent on health care can be
withdrawn at the end of the year and used for any other
purpose, or saved for future use.
MSA's make economic sense for the employee because out-of-
pocket spending can be substantially less with an MSA than
under the traditional health plans, and employees can keep any
money left in their account at the end of the year while still
retaining major medical coverage. In effect, MSA's permit
people to manage the spending of their own funds for non-
catastrophic health care.
b. Benefits.--In examining the utilization of MSA's in the
private sector and at the local government level, witnesses
testified that MSA's are an extremely attractive health care
option for all ages, and that they have not experienced the
``adverse selection'' attributed to MSA's testimony also
indicated that MSA's provided greater flexibility and freedom
to choose doctors and services than do current plans. Witnesses
also testified that with an MSA, an employee is less likely to
neglect necessary or preventive care than with a traditional
fee-for-service health care plan. Under conventional insurance,
individuals receive no reimbursement until they have met the
deductible. That places all the out-of-pocket spending on the
first expenditures; expenditures that are most likely to cover
preventive care. MSA's would actually provide a pool of money
that could be used to pay for preventive care.
c. Hearings.--A hearing entitled ``FEHB/MSA: Adding Medical
Savings Accounts--Broadening Employee Options'' was held on
December 13, 1995.
18. Veterans' Preference.
a. Summary.--In general, veterans' preference laws give
certain veterans preference in appointment to civilian
employment with the Federal Government based upon their
military service. The first such law was enacted in 1865. Until
1919, the hiring preference extended only to honorably
discharged disabled veterans. In 1919, the preference was
extended to nondisabled veterans, widows of veterans, and
spouses of injured veterans.
The statutory basis for today's veterans preference is the
Veterans Preference Act of 1944, as subsequently amended. Under
that act, veterans were to be given ``augmented scores'' of 5
or 10 points, (depending upon their status) in examinations for
employment, and retention preference in the event of a
reduction in force. The act also prohibited adverse actions
against veterans without ``cause'' and required certain due
process protection, such as notice and an opportunity to be
heard, as well as appeals.
The purpose of veterans preference has always been, as its
name implies, to give veterans a legal leg up in acquiring and
retaining civilian employment with the Federal Government.
Federal employment statistics, however, draw into question
whether this preference is having its intended effect.
As recently as 1984, veterans representation in the Federal
work force was nearly 38 percent. That number is now down to 28
percent. Veterans have borne a disproportionate brunt of the
government's downsizing. The number of veterans in the work
force declined at nearly seven times the rate of the overall
work force. In part, this reflects the concentration of
veterans in the very defense-related agencies that account for
the vast majority of the recent downsizing. OPM's figures show
that in September 1994, 47 percent of all veterans were
employed in one of the three military departments. It may also
reflect the greater average age of veterans, who have accounted
for over 50 percent of all retirements from Federal civil
service in the last 5 years. These figures also suggest that
veterans are under represented in many Federal agencies and
support the claims that we need to create additional
opportunities for veterans.
b. Benefits.--The subcommittee's investigation disclosed a
number of problems with the current application of veterans'
preference and laid the groundwork for the legislative remedies
proposed in H.R. 3586.
c. Hearings.--A hearing entitled ``Veterans' Preference: A
New Endangered Species?'' was held on April 30, 1996.
The subcommittee held a hearing to examine whether the
employment preferences accorded veterans by law are being
faithfully applied by the Federal Government and ways in which
opportunities can be improved.
The first panel consisted of Hon. Stephen E. Buyer,
chairman of the Subcommittee on Education, Training,
Employment, and Housing of the Committee on Veterans' Affairs,
and Hon. Jon D. Fox. Among other issues, Chairman Buyer
addressed the need to strengthen veterans' preference
protections during reductions in force and to provide veterans
with an effective redress system. In particular, he pointed to
the escalating use of single-position competitive levels in
RIFs as a threat to veterans' preference. He noted that it
allowed managers to ``effectively dictate who will retain
employment,'' and pointed to recent RIFs at the U.S. Geological
Survey, GAO, and the Army's Audit Agency as examples. Chairman
Buyer also stated that, ``There is simply no effective means by
which a veteran may air a preference grievance, especially if
the veteran is not hired.'' Establishing a redress system that
provides a reasonable remedy for veterans is, he testified, a
``primary concern.''
Congressman Fox testified in support of H.R. 2510, his bill
to extend veterans' preference to those who served in
connection with Operations Desert Shield and Desert Storm. In
his testimony, Congressman Fox pointed out that many reservists
and National Guard members were ordered to active duty during
the Persian Gulf War. Some were deployed to the theater of
operations. Others were ordered to serve outside the theater.
Those who served in the theater now qualify for veterans'
preference. But those who served elsewhere do not, even though
their contributions were also essential to the ultimate success
of our military operations in the Persian Gulf.
On the second panel were James Daub, John Davis, and John
Fales. Mr. Daub, a reservist who was called to active duty to
support Operations Desert Shield and Desert Storm. He pointed
out that his unit was split into two groups, one of which was
sent to the Desert and his group was sent to Rhein Mein Air
Force Base in Germany. The group in Germany performed aircraft
maintenance that could not be performed in the theater. This
was a task that was critical to the success of our combat
operations and a task they performed proudly and to the utmost
of their abilities. Those who served in Southwest Asia are now
entitled to veterans preference, whereas those such as Mr. Daub
who were uprooted from their families and their Federal jobs
enjoy no more job protections than ``the non-veteran who was
home with his family watching the war on CNN.'' This is a
matter of great concern to these veterans in this era of
government downsizing, particularly those employed at the
Department of Defense.
Mr. Davis, a Vietnam veteran who was awarded the
Distinguished Flying Cross, the Bronze Star, and multiple
awards of the Air Medal, described his experience during a RIF
at the Army Corps of Engineers. He testified that in March
1993, the Corps headquarters announced that it would conduct a
50-person RIF. Mr. Davis was placed in a single-position
competitive level. Consequently, Mr. Davis was the only
employee covered by the RIF who was actually downgraded. (None
were separated as a result of the RIF.) Moreover, Mr. Davis was
not permitted assignment rights to positions for which he
appeared capable of performing, including one job almost
identical to the position he held before the RIF. In contrast,
however, Mr. Davis testified that prior to the RIF, management
went to great lengths to place other individuals whose jobs
were to be abolished into positions at their current grade
levels. In some cases, the agency actually created positions
for these other employees that did not exist prior to the RIF.
Nevertheless, both the Merit Systems Protection Board and the
United States Court of Appeals for the Federal Circuit upheld
the agency's action.
Mr. Fales is a decorated blinded Vietnam veteran who is a
full-time Federal employee and president of the Blinded
American Veterans Foundation. In his testimony, Mr. Fales
emphasized the importance of recognizing the important service
of the hundreds of thousands of American troops supporting
America's military missions around the world. He pointed out
that in the past 5 years the military has released 800,000 men
and women from the armed forces, many of whom were not eligible
for veterans' preference, which made their transition and
pursuit of a Federal job much more difficult. Mr. Fales also
testified that there are many in the Federal bureaucracy who
actively seek to circumvent veterans' preference, and
emphasized the need for improved remedies to deter future
violations.
The subcommittee also heard testimony from Ronald W. Drach,
the national employment director for the Disabled Veterans of
America, and Emil Naschinski, assistant director, National
Economics Commission, of the American Legion. Both testified
that the lack of an effective redress system is the key defect
in current veterans' preference law. Mr. Drach stated that
``there has never been a meaningful appeal/ redress system
available to an individual or a veterans service organization .
. . if either thought veterans' preferences were being
violated,'' and he contended that the Office of Personnel
Management's ``less than aggressive enforcement of veterans'
preference'' persuaded agencies they were free to ignore
veterans' preference. Mr. Naschinski emphasized that, ``If
Congress is serious about improving veterans' preference, it
must provide a clear, independent and user friendly redress
mechanism that can be utilized by veterans who believe their
veterans' preference rights have been violated.'' Both
witnesses also testified to the importance of strengthening
protections for veterans during RIFs and warned of the
potential erosion of veterans' preference through the
proliferation of alternative personnel systems.
19. Soft Landings To Enhance Federal Downsizing?
a. Summary.--Under the Federal Workforce Restructuring Act
of 1994 and the Clinton administration's efforts to
``reinvent'' government, Federal agencies initiated efforts to
reduce the Federal workforce by 272,900 positions by 1999. The
Federal Workforce Restructuring Act authorized agencies to pay
``voluntary separation incentive payments,'' (buyouts) as a
means of increasing attrition through voluntary separations
rather than reductions-in-force. This buyout authority expired
for nondefense agencies on March 31, 1995. The subcommittee
conducted hearings on the buyout program on May 17, 1995, after
which subcommittee Chairman Mica communicated four criteria for
any future buyouts to Government Reform and Oversight Committee
Chairman William F. Clinger, Jr. These criteria reflected a
consensus of the General Accounting Office, the Congressional
Budget Office, and two private consulting firms with extensive
experience analyzing and managing corporate downsizing. They
included a requirement that any future buyouts be implemented
consistent with a strategic plan that describes the agency's
operation after downsizing, that buyouts be done early in the
fiscal year, that they be accomplished swiftly, and that they
be a one-time event wherever they are used.
Several agencies appear to have used previous buyout
authority in ways that are inconsistent with workforce
reduction objectives. The Environmental Protection Agency
bought out 485 employees while reducing 97 positions. The
Department of Education bought out 484 employees while reducing
only 146 positions. The Department of Justice reported 835
buyouts while increasing staff by 7,536 employees. Several
other agencies approached the subcommittee about renewed buyout
authority, but few of them had done the planning necessary to
prepare for their effective use. In light of the likelihood of
additional workforce reduction, and in the absence of effective
planning on the part of agencies, this hearing opened a series
that would assess the future of the Federal workforce and
review legislation proposed to ease the impact of reductions on
Federal employees who would be affected by them.
b. Benefits.--This investigation enabled the subcommittee
to review proposed legislation to ease the process of workforce
reductions for Federal agencies. It identified several measures
that were subsequently incorporated into H.R. 3841, the Omnibus
Civil Service Reform Act of 1996.
c. Hearings.--The subcommittee conducted a hearing on
proposed legislation, ``Downsizing/Soft-Landings, and Related
Legislation,'' on May 8, 1996.
Mr. Burton reaffirmed his commitment to reducing the size
of government while recognizing Congress' obligation to ease
the transition of current employees to positions in the private
sector. He noted the difficulties imposed on such transitions
by the lack of portability in current pension systems.
Mr. Moran lamented the lack of planning with which both
Federal agencies and Federal employees approached recent
workforce reductions. Although buyouts were available,
employees often took them without adequate preparation for
retirement or a different occupation, and agencies often
awarded them without adequate planning for future operations.
Mr. Wolf emphasized the he and his cosponsors of H.R. 2751
had placed a priority on the avoidance of RIFs as Federal
agencies reduce their workforces to implement either policy
changes or budget reductions. He claimed that RIFs are
disruptive, and asserted that Congress has a responsibility to
make sure that reductions are achieved with as little
disruption as possible. He sponsored the Federal Employee
Separation Incentive and Reemployment Act to assist agencies in
reducing workforces through attrition rather than RIFs. He
observed that, regardless of congressional action, the
legislation would have to be complemented with activities such
as job fairs to assist Federal employees facing workforce
reductions in finding new positions. He agreed with Mr. Mica
that buyouts should be used only to avoid RIFs and save the
government money, and observed that Federal agencies should be
on notice that the Congress will follow their use of buyout
authority closely.
Mrs. Morella endorsed Mr. Wolf's bill and testified in
support of complementary companion legislation that she
introduced. H.R. 2826, the Early Retirement Incentive Act,
would phase out the 2 percent per year reduction in annuities
that Federal employees face if they retire before the age of
55. Under her bill, this reduction would be adjusted annually
so that full pensions would be restored incrementally at age
55. She also recommended H.R. 2825, the Strategic Reemployment
Training Act, for the subcommittee's consideration. This
measure would foster partnerships with the private sector to
facilitate placement of Federal employees who could no longer
expect opportunities in other Federal agencies. The bill would
allow Federal agencies to retrain their employees in ways that
develop skills for private sector employment, a practice that
is beyond the authority of Title 5.
Mr. Hoyer claimed that Federal employees no longer face the
long-term employment security experienced in previous years. He
observed that the administration has beefed up priority
placement programs, but was uncertain whether these programs
would be adequate to serve the employees affected by
reductions. He supported Mr. Wolf's initiatives in training and
job fairs, and endorsed both of Mrs. Morella's bills. Although
he acknowledged the cost of buyouts, he commented that ``a
$25,000 payment up front may well be the cheapest incentive
that the government can adopt.'' He conceded that he had not
analyzed the fiscal note on any of the bills that he endorsed
in this testimony. In response to questions, he commented that
planning would be important to effective use of buyouts, but
noted that abolished agencies such as the Bureau of Mines and
the Interstate Commerce Commission were terminated through
relatively quick appropriations actions. All Members supported
provisions that would enable separated employees to extend
their life and health insurance coverage.
All Members also recognized that the workforce reduction
targets are often arbitrary, and that the 5,500 nondefense
workforce reductions proposed in the President's FY-1997 budget
should be achievable through normal attrition. Mr. Moran
observed that the workforce reductions to date have been done
exactly the reverse of the way that they should have been done,
by creating an arbitrary dollar reduction number and backing it
into personnel conclusions. Mr. Moran also expressed his
interest in developing a method of easing the transition to
retirement.
Mr. Shaw testified that the Senior Executives Association
had ardently supported H.R. 2751. He noted that current
reductions in the Federal workforce are targeted at middle and
upper layers of agencies, and these are difficult cuts to
achieve. He noted that public employees often face post-
employment restrictions that impede their ability to use their
professional skills in the private sector. He argued that the
most effective means of placing Federal employees during agency
reductions is to place the employees in other agencies. He
reported that, rather than accept separated Bureau of Mines
employees, other components of the Department of the Interior
canceled vacancy announcements. Such actions would vitiate
priority placement programs.
Ms. Chandler reported that the National Federation of
Federal Employees believes that voluntary separation incentives
are important to assist Federal agencies in downsizing.
Attrition rates are lower than any recent years, and she
believes that RIFs would be necessary without the buyouts.
Mr. Gable agreed with the criteria for new buyout authority
outlined by the chairman at the start of the hearing. He
contended that the phased reduction of the buyout amount
authorized by Mr. Wolf's bill might accelerate voluntary
separations, and ease requirements for subsequent reductions.
The Federal Managers Association recommends that buyout
authority in nondefense agencies be extended to the 1999
deadline for the Department of Defense. The testimony supported
every benefit increase proposed in legislation under
consideration by the subcommittee.
20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit Comparison.
a. Summary.--The subcommittee continued to monitor the
administration's implementation of the buyout program
authorized by the Federal Workforce Restructuring Act of 1994
and to assess the need for renewal of buyout authority, in
light of recommendations from Members who had sponsored H.R.
2751. Although the administration was well on its way to
meeting the 272,900 FTE workforce reduction required by the
act, most reductions to date had come from downsizing at the
Department of Defense rather than from efforts to ``Reinvent
Government.'' The administration's FY-1997 budget recommended
further Department of Defense downsizing--cutting 54,300 DOD
positions--and eliminating a total of only 5,500 positions from
nondefense agencies. This reduction in nondefense agencies is
well within the scope of normal attrition, so these positions
could be eliminated simply by exercising buyouts that were
deferred from 1995. The President's budget showed that while
downsizing discussions continued, the Departments of Justice,
Labor, Health and Human Services, and Treasury planned staff
increases during fiscal year 1997. Buyouts had cost the
government $2.8 billion, and half of these expenditures went to
employees eligible for full retirement benefits. GAO reported
that better management of normal attrition could have enabled
more cost-effective method of achieving workforce reductions.
In addition to extensive use of buyouts, several agencies had
used their authority to conduct ``reductions-in-force,'' (RIFs)
in ways that caused concern about fair and equitable treatment
of employees. As a result of provisions of the Legislative
Branch Appropriations Act of 1995, GAO had secured authority to
revise their RIF regulations, but the revisions that were
promulgated provided no substantial changes from RIF rules
governing other Federal agencies.
b. Benefits.--This investigation revealed that the
administration had allowed some agencies to use buyouts beyond
the authority granted under the Federal Workforce Restructuring
Act of 1994. It also demonstrated that, where an agency was
granted extensive authority to revise RIF rules, those
revisions were relatively minor, and did not jeopardize any of
the protections that are often deemed burdensome in
administering RIFs. The extensive use of single-person
competitive levels used by the U.S. Geological Survey in
conducting its RIF influenced the subcommittee's decision to
include additional protection for veterans in the Veterans
Employment Opportunities Act of 1996.
c. Hearings.--The subcommittee conducted a hearing,
``Reinventing Downsizing or Downsizing the Reinvention,'' on
May 23, 1996.
Mrs. Morella recognized that previous buyouts did not
necessarily achieve their intended results, and added that we
must ``avoid another situation whereby agencies pay the same
employees both separation incentives and retention,
recruitment, or relocation bonuses.''
Mr. Bowling reported that, as of September 30, 1995,
Federal agencies had paid buyouts to more than 112,000
employees, enabling the agencies to exceed the workforce
reduction targets required by law. Buyouts accounted for 48
percent of those reductions, with RIFs accounting for an
additional 6 percent. The balance was achieved through normal
attrition--retirements, resignations, and other terminations.
He observed, however, that these reductions have not
consistently targeted the management positions identified in
the National Performance Review. Instead, these positions have
actually increased as a portion of the Federal workforce in
some agencies, and the portion of supervisory personnel
diminished only slightly, even though the administration had
relied on questionable techniques, such as renaming supervisors
as ``team leaders'' without actually altering responsibilities,
to achieve these numbers. Although he saw no need for
governmentwide buyout authority, he admitted that some agencies
might have to reduce their workforces disproportionately and,
in such cases, targeted authority might be appropriate.
Mr. Koskinen contended that management of attrition through
hiring freezes or similar measures might not provide agency
managers the flexibility that they need to redesign their
agencies during further workforce reductions. The
administration submitted a proposed Federal Employment
Reduction Assistance Act of 1996 that would authorize
downsizing agencies to extend buyouts to employees at
decreasing payment rates over a 4-year period. He expressed
concern that, if distinct buyout legislation is approved for
different agencies, differences between programs would result,
and that some of these could be considered inequitable. He
endorsed other ``soft landing'' measures, such as extending
health and life insurance benefits for separated employees, but
reported that the administration opposed measures, such as the
so-called ``2 percent solution,'' that would exacerbate the
financial problems of Federal retirement funds.
Mr. King testified that buyouts had played an important
role in enabling Federal agencies to reduce positions with
minimal use of RIFs. He claimed that RIFs are much more
disruptive of the morale and productivity of the workforce than
voluntary reductions. He observed that future reduction
requirements might result from budget reductions, and that
renewed buyout authority could facilitate meeting future
requirements. Mr. King denied that OPM had promoted radical
changes in RIF policy during recent actions, and claimed that
the portion of veterans among new hires had increased during
the past 3 years.
Mr. Koskinen conceded that the President's budget
submission contains actual workforce levels from previous
years, but only projections for future years, and added that
the projections contained in the FY-1997 submission are at
least 30,000 persons higher than actual employment levels will
turn out to be. Mr. Bowling admitted that Federal personnel
data are unreliable at times, in part because of difficulties
in OPM's Central Personnel Data File. Mr. Bowling agreed that
normal attrition should be sufficient to manage planned
downsizing, but added that unanticipated budget reductions
might justify some targeted buyouts at affected agencies.
Mr. Mica questioned Mr. Koskinen about a Department of
Energy legal opinion that was used to rationalize ``renewed''
buyout offers after the March 31, 1995, deadline enacted in the
Federal Workforce Restructuring Act. Mr. Koskinen observed that
the OMB General Counsel had reviewed the Department of Energy
opinion, but had not issued its own opinion on the topic
because OMB concluded that the DoE opinion was appropriate. Mr.
Koskinen claimed that this authority was limited, and only
agencies that had previously offered deferred buyouts could
``recycle'' those buyouts if they were not used. Mr. Moran
emphasized that the Congress had never intended to give
employees a second chance at buyouts, and chastised OMB because
no effort had been made to contact the Congress before allowing
the Department of Energy to ``reoffer unused buyouts.'' Mr.
Moran observed that when information about such actions first
surfaces in unofficial channels, it establishes expectations
among Federal employees, with adverse consequences for normal
attrition rates. He requested GAO to provide a legal opinion
assessing the Department of Energy's views on the authority to
extend buyouts after the March 31, 1995, statutory deadline.
Mr. Koskinen argued that conditions had changed since his
testimony a year ago that buyouts would not be necessary. The
Workforce Restructuring Act reductions are being attained, but
some agencies are facing constraints on their spending, and
that is a different factor than previous conditions. He noted,
for examples, that OPM, GSA, and NASA had absorbed reductions
proportionately greater than the Department of Defense's 12
percent downsizing. Mr. Koskinen claimed that neither OMB nor
the subcommittee would want to go through a period of guerilla
warfare deciding on buyouts on an agency-by-agency basis
through the appropriations process.
Mr. King conceded that RIFs can be cheaper than buyouts
where units are eliminated, but claimed that the buyout offers
a ``more humane'' method of reducing the workforce. He claimed
that, with ``bump and retreat'' rights, an average RIF affects
2.5 other employees.
Mr. Luke reported that GAO experienced a 25 percent budget
reduction, with 15 percent in FY-1996 and 10 percent in FY-
1997. To reduce these expenditures while continuing to meet its
responsibilities, the agency had to reduce personnel beyond
rates that could be achieved through attrition. GAO offered
buyouts that were accepted by 393 employees, and closed
regional offices, which eliminated another 170 positions. A
hiring freeze first imposed in 1992 remains in effect. GAO
secured legislative authority to issue RIF regulations that
differed from executive branch agencies, but included no major
revisions in them. They did allow employees to volunteer for
RIF, but retained the tenure, veterans' preference,
performance, and length of service factors in conducting RIFs.
Veterans' employment at GAO reduced slightly, a change that Mr.
Luke attributed to more veterans taking advantage of buyouts.
Mr. Leahy recounted the extensive deliberations planning
for the RIF at the U.S. Geological Survey's Geologic Division.
He attributed the necessity of a RIF to a decade-long trend
during which payroll required an increasing portion of agency
appropriations. This high portion of the annual budget
allocated to salaries was increasingly constraining the
agency's ability to conduct quality scientific research. He
claimed that the planning was based on programmatic needs, and
submitted copies of extensive materials distributed to keep
agency personnel informed of this planning. The Survey began
briefing employees about RIF planning at its three regional
centers in March 1995. He testified that the Survey's old RIF
plans did not conform to either current OPM guidelines or the
Merit System Protection Board's standards, so revision of RIF
procedures was a necessary element of this RIF planning. Along
with this RIF, the Geologic Division engaged in a major
reorganization to adapt its mission to current statutory
authorities and to achieve savings by reducing managerial
layers. Mr. Leahy testified that the 250 people managerial
staff was cut nearly in half in the new organization. He
reported that only 9 veterans were separated of the 292
veterans on the Division's 2,192-member staff.
Under questioning, neither Mr. Luke nor Mr. Leahy thought
that their agencies needed additional buyout authority at this
time. They also did not have any recommendations for statutory
changes related to workforce downsizing. Under questioning from
Mrs. Morella, Mr. Leahy reported that the RIF had generated 123
appeals to the Merit Systems Protection Board, and that the
Office of Special Counsel was reviewing the actions. Mr. Leahy
noted that Representatives Davis and Wolf had sponsored a job
fair for affected employees in northern Virginia. USGS also
placed 110 of its employees in other divisions or within the
Department of the Interior.
21. Illegal Use of Buyouts.
a. Summary.--As a result of evidence presented at its May
23, 1996 hearing, the Subcommittee on Civil Service requested
the General Accounting Office to review a Department of Energy
legal opinion that the administration had used to support the
extension of buyout authority to several other agencies after
the Federal Workforce Restructuring Act of 1994's deadline had
expired. Although the Federal Workforce Restructuring Act
provided authority to offer employees buyouts to ease the
transition from the public sector, the administration had
continued to offer buyouts after the March 31, 1995, deadline
set by law. Documents submitted by OMB demonstrated that OMB
Deputy Director for Management John A. Koskinen had approved
the Department of Energy's plan to ``reoffer unused buyouts''
on October 4, 1995, even though the administration made no
effort to inform the Congress of the decision until after it
was publicized in a May 2, 1996, newspaper column. The
Department of Commerce had offered a new--1 day--round of
buyouts to some of its employees on the very day that the
subcommittee had conducted its previous hearing.
b. Benefits.--As a result of this oversight, the Office of
Management and Budget directed Federal agencies to discontinue
any further offers of buyouts to nondefense employees. These
hearings also resulted in the development of legislative
language to prevent repetition of the abuses revealed during
these hearings. Buyout authority granted under the Omnibus
Continuing Appropriations Act of 1996 prohibits employees from
receiving buyouts if they have received a relocation bonus
within the past 2 years, or if they received a retention bonus
within the last year. The new buyout authority omitted any
provision that might have allowed for deferred separation of
employees who accept voluntary separation incentive payments.
c. Hearings.--The subcommittee conducted a hearing,
``Reinventing Downsizing or Downsizing the Reinvention,'' on
June 11, 1996.
Mr. Mica commented, ``[The GAO opinion] means . . . that at
midnight on March 31, 1995, the Federal buyout window closed
for nondefense agencies. . . . That GAO opinion means that
neither OMB nor anyone else in the executive branch has the
authority to create an additional application window.'' The
subcommittee chairman concluded, ``I will entertain no further
discussion of new laws until the Clinton administration
demonstrates its compliance with the old law.''
Mr. Moran observed that the issue is important because it
sets a precedent in terms of the Federal workforce's
expectations and the question of who writes the laws. He
rejected the idea that this was an issue of conflicting legal
opinion, because the language in the Workforce Restructuring
Act is not even remotely ambiguous.
Mr. Wray reported that the General Accounting Office had
issued a legal opinion to the subcommittee on June 6, 1996,
which concluded that the Department of Energy policy is
inconsistent with the Federal Workforce Restructuring Act of
1994. GAO concluded that the clear language of the act and the
fundamental logic and context of the statute lead to the
conclusion that agencies could lawfully approve buyouts only
until March 31, 1995. The Secretary of Energy's decision to
extend buyout offers after that date was inconsistent with the
statute.
Mr. Koskinen admitted that, in spite of the
administration's claims about reinvention, ``No one has tracked
FTE declines for each of these [eliminated] activities, and
there is no efficient way to obtain that information at this
time.'' He reiterated that reductions in spending, rather than
any reinvention effort, is the driving factor behind any
further workforce reductions. In spite of the GAO opinion, he
denied that any member of the administration was operating
deliberately in contravention of the law.
Mrs. Morella concurred with the General Accounting Office's
legal opinion that the law restricted buyouts to end on March
31, 1995, and observed that this experience erects barriers to
enacting soft-landing measures for other employees.
Mr. Wray noted that the only practical corrective for the
Congress would be to pass additional legislation. Mr. Mica
explored options such as holding disbursing officers
accountable for funds expended in violation of the law, but Mr.
Wray did not view this remedy as effective. Mr. Moran argued
that the consequence of the deficient legal opinion was to
continue bad management practices, and Federal employees were
subject to recurring rumors about new buyout opportunities. The
fluctuations jeopardized the chance to bring stability to the
workforce.
Mr. Koskinen reported that OMB was in communication with
agencies that have offered renewed buyouts, and had requested
them to review their actions in light of the GAO opinion. Mr.
Mica and Mr. Moran emphasized that the subcommittee had
bipartisan agreement with the GAO opinion, a factor that OMB
should consider in requesting further review by the agencies.
Mr. King observed that OPM's recommendations had
consistently supported the GAO opinion.
22. Civil Service Reform Proposals.
a. Summary.--This oversight provided an opportunity to
review issues related to preparation of the Omnibus Civil
Service Reform Act of 1996 (H.R. 3841). This legislation drew
from topics covered in hearings conducted by the subcommittee
during October and November 1995 and legislation proposing soft
landings for Federal employees which were the focus of a May 8,
1996, hearing by the subcommittee. The legislation incorporated
provisions that reflected concerns widely shared among Members
and addressed pressing needs of a public service oriented
toward workforce reductions rather than expansion of agencies'
responsibilities and workforces.
b. Benefits.--This hearing provided an opportunity for
extensive discussion of issues related to H.R. 3841, and
assisted in the modification of provisions necessary to secure
House passage.
c. Hearings.--The subcommittee conducted a hearing on the
Omnibus Civil Service Reform Act of 1996 on July 16, 1996.
Mr. Mica observed, ``Just as the private sector has
adjusted to accommodate people changing career patterns, the
Federal workplace must adapt to accommodate new technologies,
changing agency missions, and eliminate old functions and
assume new roles that are so necessary in our dynamic and fluid
Federal workplace.'' Mr. Mica added, ``Throughout the past
year, I have been struck by the challenges that Federal
agencies face relating to managing poor performers. . . . We
have heard from many witnesses that the current Federal service
provides very limited incentives to our best employees while
erecting enormous hurdles when it comes to improving or
removing problem employees.'' The draft legislation included
provisions to strengthen performance management, to streamline
the Federal appeals processes, to expand benefits available
through the Federal Retirement Board's Thrift Savings Plan, to
provide soft-landings for Federal employees facing workforce
reductions and to provide agencies flexibility in reorganizing,
and several miscellaneous provisions to address technical and
administrative problems in administering the Federal civil
service.
Mr. Bowling reaffirmed testimony presented by GAO during
November 1995. That testimony described the appeals processes
available to Federal employees as ``inefficient, expensive, and
time consuming.'' He urged congressional action that would
reduce the inefficiencies in the system, shorten the time
involved, and save money. He contended that reforms needed to
sustain two fundamental principles: fair treatment for Federal
employees and efficient management of Federal agencies. He
recommended measures to eliminate the mixed cases (where
employees can appeal prohibited personnel practices to more
than one agency), movement toward a private sector model for
addressing employees' discrimination complaints, and increased
use of alternative dispute resolution (ADR). He reported that,
in FY-1994, agencies spent almost $34 million investigating
discrimination complaints, and awarded more than $7 million in
complainants' legal fees and discrimination settlements.
Bowling noted, ``The redress system's protracted processes and
requirements can divert Federal managers from more productive
activities and inhibit some of them from taking legitimate
actions in response to performance or conduct problems.'' He
noted that Federal employees file six times the per capita rate
of complaints as private sector employees, and that only 18
percent of Federal filings are related to terminations, where
47 percent of private sector discrimination complaints result
from terminations. Bowling reported that the Merit Systems
Protection Board and the Equal Employment Opportunity
Commission rarely differ in their findings, but employees have
little to lose by having both agencies review the issue.
Eliminating mixed cases would eliminate both the jurisdictional
overlap and the inefficiency that accompanies it. He cautioned,
however, that the modification of procedures would require the
EEOC to learn new approaches to its work.
Mr. Heuerman thanked the subcommittee for incorporating
several of the administration's recommendations in the
consensus package. He welcomed expanded authority for
demonstration projects, but the administration opposed allowing
demonstration projects to modify leave and benefit programs.
Although he welcomed the bill's inclusion of alternative
dispute resolution provisions, he recommended thorough
assessment of provisions consolidating appeals processes. The
administration recognized the bill's interest in strengthening
performance credit in developing RIF retention registers, but
argued that this objective could be accomplished through
regulation rather than statute.
Mr. Mehle observed that the bill would make important
improvements to the Thrift Savings Plan provisions of the
Federal Employees Retirement System Act (FERSA). FERSA
authorized the creation of three investment funds, and allowed
Congress to authorize additional investment vehicles. This bill
would create two additional funds: one a small capitalization
fund and the other an international stock index fund. The Board
had previously recommended both to the Congress, and could
implement them within 2 years. The Board also supported
allowing new Federal employees to begin contributing to their
accounts immediately and the elimination of restrictions on
withdrawals and borrowing from employees' accounts.
Mr. Moyer thanked the subcommittee for the provisions that
he saw as beneficial to members, especially expansion of the
Thrift Savings Plan, provisions to assist agencies in
reorganization, and soft landings for employees affected by
workforce reductions. FMA supported provisions to extend
liability insurance coverage to Federal employees acting in the
line of duty. He advocated limiting demonstration projects to
10 percent of the Federal workforce. Rather than retain EEOC
jurisdiction, FMA supports consolidating Federal appeals
through the MSPB, with appeal to the Federal Circuit. He
opposed linking performance management and RIF retention
criteria.
Ms. Olsen welcomed the expansion of agencies' transition
programs for Federal employees affected by downsizing. She
opposed, however, giving employees additional credit in RIF
processes for outstanding service. She also appreciated the
liability insurance protection afforded to Federal managers
under this bill, and supported to strengthened monitoring and
reporting requirements directed toward Federal training.
Mr. Sanders testified that the bill represents an important
step in the right direction, and expressed strong support for
swift passage. He commented that the bill addresses many of the
critical needs for reform--especially of the appeals
procedures--but questioned the benefits that might be derived
from additional demonstration projects. Rather than a single
solution to civil service problems, he argued that more
particularized, tailored answers to limited questions are the
most likely vehicle of future progress in managing Federal
employees. He recommended consideration of reforms instituted
in Australia and New Zealand, and also mentioned the private
sector's cafeteria compensation plans as an appropriate model
for future comparison. He strongly supported the bill's 90-day
alternative dispute resolution provisions.
Mr. Divine thanked the subcommittee for including the soft
landing provisions that would benefit employees separated
during agency workforce reductions. He would limit
demonstration projects, however, to agencies with partnership
agreements. Federal unions, in general, favored a 10 percent
cap on the number of employees who could be involved in a
demonstration project. They also opposed increasing the credit
given performance during a RIF, contending that employees could
be adversely affected by being under different rating systems.
Mr. Donnellan expressed strong reservations about
demonstration projects developed without the participation of
employees' unions, and argued for retention of current appeals
processes.
Mr. Tobias expressed general support of the bill, but
expressed reservations about the breadth of potential
demonstration projects.
Mr. Roth commented that several provisions in the bill do
not have the support of employees represented by Federal
employees' unions. He expressed concerns about waiver
provisions related to demonstration projects. He asserted that
Federal employee unions favor removing employees who do not
perform their jobs, and contended that a ``two-tiered'' system
(pass/fail) would enable agencies to remove those who fail. He
also objected to including the increased rewards for
outstanding performance in statute.
23. Review of the Federal Employees Health Benefit (FEHB) Program.
a. Summary.--The FEHB program is the largest employer-
sponsored health insurance system in the country. In 1996, the
$16 billion FEHB program will insure more than 9 million
Federal employees, retirees, and their dependents. Partial
portability, no preexisting conditions limitation, and an
annual open enrollment period are facets of the FEHB program
that make it an extremely attractive health care system. The
program is administered by only 134 employees, and it serves
more than 9 million enrollees.
Over the past 2 years, a number of FEHB-related issues have
arisen. Some effect the coverage and benefits provided to
Federal employees, others affect the costs borne by employees
and the government.
In January 1, 1996, Blue Cross & Blue Shield (BCBS) changed
their prescription drug benefit setting off a round of
intensive lobbying by the National Association of Retail
Druggists (NARD), the National Association of Chain Store
Druggists (NACSD), the American Pharmaceutical Association
(APHA), and by individual druggists and large chain stores.
BCBS for 1996 stopped waiving the 20 percent co-pay on
prescriptions purchased at preferred (network) pharmacies for
those retirees who also have Medicare Part B coverage. All
other BCBS standard contract holders have always been
responsible for paying the 20 percent co-pay and, accordingly,
are not affected by the 1996 benefit change. The benefit change
is expected to save $200 million in 1996. OPM has stated that
without the benefit change all 1996 monthly premiums for BCBS
Standard Option enrollees would have increased by $5.42/month
for self enrollments and $12.03/month for family enrollments.
The pharmacists maintain that the benefit change is unfair,
because the co-pay is still waived for prescriptions obtained
through the mail order program. They see the benefit design as
unfairly steering customers away from the community drug
stores. Since the FEHB program is a government health care
program, the pharmacists have sought to have Congress overturn
this benefit decision by BCBS. Many stores posted signs telling
all retirees that there is a new co-pay requirement and asking
them to sign petitions to Congress and OPM.
The controversy is really about the economic consequences
of retail store versus mail order prescription drug sales. The
pharmacists apparently hope to achieve a result similar to what
happened in Maryland when the State rescinded a prescription
drug contract in the wake of organized protests from Maryland
druggists. (The Federal Trade Commission and the Maryland
Attorney General are now investigating the possibility that the
organized campaign constitutes an antitrust violation).
Senators Pryor and Cohen, and Representatives Moran and
Gilman, requested a GAO review of the prescription drug
program. That request was narrowly drawn and could have
elicited a skewed response. Subcommittee Chairman Mica
requested the GAO conduct a more comprehensive and objective
analysis of the prescription drug program in the FEHB and
provide some external comparison with private sector programs.
The external review will provide a better base of information
to make a more informed judgement on the issue.
During the 104th Congress, a number of bills have been
introduced either mandating that health insurance carriers
provide coverage for certain benefits or that they provide
direct reimbursement for certain health care providers.
H.R. 1057, introduced by Representative Ben Gilman
(R-NY), would provide for hearing care services by
audiologists to Federal civilian employees.
H.R. 2009, introduced by Representative Lynn Woolsey
(D-CA), would include medical foods as a specific item
for which coverage may be provided under the FEHB
program; and
H.R. 3292, introduced by Representative Maurice
Hinchey (D-NY), would provide for coverage of qualified
acupuncturists services under the FEHB program.
b. Benefits.--The FEHB program is often cited as a model of
efficiency and effectiveness that other public and private
groups should seek to replicate. The free-enterprise-based FEHB
program has effectively contained costs through private sector
companies, with limited governmental intervention. The
investigation reinforced the importance of the private sector
competition that exists in the FEHB program, and that
legislative efforts to mandate benefit levels would undermine
the ability of health benefit carriers to contain costs. Any
additional benefit mandates serve to increase the overall costs
of the FEHB program, both to the government and the individual
employee.
c. Hearings.--A hearing entitled, ``FEHB Program Review and
Oversight'' was held on September 5, 1996.
The first panel was dedicated to examining the controversy
involving the prescription drug benefit for FEHB Blue Cross and
Blue Shield enrollees who also have Medicare. The panel
consisted of GAO, Blue Cross and Blue Shield Association,
Merck-Medco, and the National Association of Chain Drug Stores
and the National Association of Retail Druggists.
GAO testified that BCBS made the benefit change to try to
control an average annual 21-percent increase in its Federal
health plan's drug costs. In early 1996, the volume of
prescription the mail order pharmacy received was much greater
and occurred more quickly than anticipated. As a result, Medco
could not meet its customer-service performance measure for
prompt dispensing and delivery of prescriptions to enrollees
for several weeks during the benefit change's implementation.
NACDS and other critics of the benefit change are concerned
about its economic impact on retail pharmacies.
The second panel consisted of advocates for mandating that
health insurance carriers provide coverage for certain benefits
or that they provide direct reimbursement for certain health
care providers. The American Academy of Audiology, the
International Hearing Society, and the American Academy of
Otolaryngology--Head and Neck Surgery, commented on legislation
introduced by Representative Ben Gilman (R-NY) to mandate that
audiologists be given reimbursement by FEHB carriers. The
audiologists support the legislation, while both the Hearing
Society and the Otolaryngologists were strenuously opposed. A
professor from Florida International University testified on
behalf of legislation that would add medical foods as an item
for which coverage may be provided. The American Association of
Pastoral Counselors testified regarding the possible direct
reimbursement of their members by carriers. The issue of mental
health parity was discussed by the American Psychiatric
Association. The National Acupuncture Foundation testified on
legislation proposing to mandate coverage of qualified
acupuncture services.
An OPM official testified for the Clinton administration
that the FEHB program is flexible enough to address coverage
for those services and supplies and that mandating them ``is
contrary to the program's guiding philosophy of allowing
flexibility for plans to respond to changing health care
practices and individual enrollee needs.'' Regarding the
prescription drug issue, OPM said that high percentages of
enrollees in fee-for-service plans are satisfied with the mail-
order drug program.
24. Taxpayer Subsidy of Federal Unions.
a. Summary.--According to OPM data, as of September 1995,
approximately 54 percent of the Federal workforce was
unionized, encompassing some 1,0157,017 employees. Although
most Federal employees are ostensibly represented by a union,
it is widely acknowledged that union membership among Federal
employees is quite low. Data from 1994 show that 19.3 percent
of Federal employees belong to a union. (Hirsch and McPherson,
Union Membership and Earnings Data Book 1994.)
The subcommittee has been investigating the extent to which
taxpayers are forced to subsidize the activities of Federal
employee unions. Federal employee unions receive substantial
taxpayer subsidies. These come in the form of ``official
time,'' i.e., time on the payroll, for performing union
representational work and even lobbying Congress and the
executive branch. In addition, unions benefit from taxpayer
funds in other ways as well. Agencies often furnish the unions
that represent their employees with office space, office
equipment, meeting rooms, and the use of such agency facilities
as e-mail and other communication tools.
In addition, the Clinton administration has decided as a
matter of policy to release the home addresses of employees in
bargaining units to the unions representing those units. This
has been a long-sought goal of Federal employee unions.
Although ostensibly sought for the purposes of assisting
unions' in discharging their duties as exclusive
representatives, possession of these home addresses provides
unions with invaluable mailing lists they can use for
organizing and political activity.
b. Benefits.--The subcommittee's investigation has revealed
that substantial sums of taxpayer moneys are consumed to
finance the activities of Federal unions. However, further
investigation is necessary to adequately quantify the amount of
the subsidy Federal unions receive from taxpayers.
c. Hearings.--A hearing entitled ``Taxpayer Subsidies of
Federal Unions'' was held on September 11, 1996
In connection with its investigation, the subcommittee held
a hearing and has requested a GAO study of the use of official
time.
The first panel at the hearing consisted of Sally Katzen,
Administrator of the Office of Information and Regulatory
Affairs of OMB, and Hon. Lorraine Green, Deputy Director of
OPM. These witnesses focused primarily on the administration's
decision to release home addresses to Federal unions. Both
witnesses contended the decision to release home addresses was
made after President Clinton shut much of the Government down
as a result of his disagreement with congressional budget
proposals and was justified by the ``confusion'' those
shutdowns engendered among Government employees. However, they
also conceded that OMB began examining options for complying
with union requests for these addresses, at the request of Vice
President Gore months before the first shutdown. They also
conceded that despite these months of planning, there were no
written safeguards to protect employees from further invasions
of their privacy as a result of secondary disclosures.
The second panel consisted of Timothy Bowling of the
General Accounting Office (GAO), Michael P. Dolan, Deputy
Commissioner of the Internal Revenue Service (IRS), and Robert
Tobias, national president of the National Treasury Employees
Union. Based upon GAO's analysis of the use of official time at
the Social Security Administration and three other entities
(the Postal Service, Department of Veterans Affairs, the IRS),
Mr. Bowling testified there is insufficient data to estimate
the amount or cost of official time government wide. He
testified that these agencies either had no system for
accounting for the use of official time or their systems had
substantial limitations. Nevertheless, it is clear that these
expenditures are substantial. GAO estimated that in calendar
year 1995, the Social Security Administration alone spent about
$11.4 million on an estimated 413,000 hours of official time.
Both Deputy Commissioner Dolan and Mr. Tobias generally
testified that the use of official time contributes to
efficiency in the workplace and effective union-management
relations. In addition, Deputy Commissioner Dolan also
testified that the IRS has been required by the Federal Labor
Relations Authority to release home addresses to the union
since September 1995.
25. Review of Federal Firefighters Pay and Benefits.
a. Summary.--The Federal Government employs approximately
10,000 Federal structural firefighters. Structural firefighters
fight fires in buildings, on airfields, and 94 percent are
employed by the Department of Defense. Structural firefighters
are also employed by the Veterans Administration, Coast Guard,
Department of Interior, National Institutes of Health, and
National Aeronautics and Space Administration. Wildland
firefighters fight grass and forest fires and are employed by
the Department of Interior and the Department of Agriculture.
The subcommittee's investigation examined only the compensation
package for Federal structural firefighters.
The agency head establishes the work schedule or regular
tour of duty for firefighters. The most common work schedule or
tours of duty for these firefighters are 40 hours, 56 hours,
and 72 hours per week. For the most part the 40 and 56 hour
tours of duty are for supervisory positions. Generally, 8 hours
of actual work, 8 hours of standby duty, and 8 hours of sleep
time comprise each 24 hours of the 72-hour work schedule. Three
shifts are worked on a weekly basis for a total of 72 hours.
Six shifts are worked on a biweekly basis for a total of 144
hours.
Pay for firefighters consists of base General Schedule pay,
including locality-based comparability payments, premium pay
for standby duty, and the Fair Labor Standards Act (FLSA)
overtime. Standby duty premium pay is in lieu of Title 5
overtime pay for regularly scheduled overtime. The regular tour
of duty determines the amount of standby duty premium pay a
firefighter receives. Firefighters who work a 72-hour tour of
duty receive 25 percent standby duty premium pay. Firefighters
on these shifts receive 125 percent of base pay not to exceed
125 percent of GS-10, step 1. Firefighters who work a 56-hour
tour of duty receive 15 percent premium pay for standby duty.
Firefighters on these shifts receive 115 percent of base pay
not to exceed 115 percent of GS-10, step 1. Firefighters who
work a 40-hour tour of duty do not receive this premium pay.
Firefighters on a 72-hour tour of duty receive an
additional pay adjustment for 19 hours of ``overtime.'' The
``overtime'' rate is computed according to the formula:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 0.5
72 hours
Firefighters on a 56-hour tour of duty receive a pay
adjustment for three hours of ``overtime.'' The ``overtime''
rate is calculated as follows:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 0.5
56 hours
For overtime hours beyond the regular work schedule (72 or
56), the ``overtime'' rate is computed as follows:
(basic pay + 25% premium)
Overtime Rate = --------------------------------------------------------- x 1.5
(72 or 56 hours)
Overtime rates are capped at GS-10, step 1.
Nearly 80 percent of firefighters are in grades GS-5
through GS-7 of the General Schedule. A fire chief's grade may
range from GS-7 through GS-13 depending on the duties and
responsibilities of the position.
Firefighters, like law enforcement officers, have special
retirement provisions in the Federal retirement system.
Firefighters may retire voluntarily at an early age with a
special annuity computation if they are at least age 50 at the
time of retirement and have 20 years of service. Firefighters
are subject to mandatory separation at age 55. Firefighters pay
an extra one-half percent of salary into the retirement system
and in return they receive a higher accrual rate than other
employees of the executive branch. The ``normal cost'' of
retirement is the cost of the retirement benefit expressed as a
percentage of payroll. The ``normal cost'' is 40 percent for
firefighters, compared to the average 25.14 percent for all
employees of the Federal Government enrolled in the Civil
Service Retirement System (CSRS). The ``normal cost'' for
firefighters enrolled in the Federal Employees Retirement
System (FERS) is 25.6 percent, as opposed to the average 12.3
percent for all employees in FERS.
Under current law, DOD is prohibited from contracting out
the Federal firefighter function. Funds appropriated to the
Department of Defense may not be obligated or expended for the
purpose of entering into a contract for the performance of
firefighting or security guard functions at any military
installation or facility.
Federal structural firefighters and their unions have been
critical of the firefighter pay system for more than 20 years.
Legislation has been introduced to reform the pay system for
firefighters since the 86th Congress in 1959. While three
hearings were held on the issue over the years, only in 1978
did any legislation move through the House and Senate. In 1978,
President Jimmy Carter vetoed legislation to ``substantially
reduce the workweek of Federal firefighters while maintaining
their pay at nearly the present rate.'' In his veto measure,
President Carter outlined three principal objections to the
bill. First, the bill would reduce firefighters' workweek
without reducing the premium pay which was designed for a
longer standby schedule.
Second, the bill would impair the ability of agency heads
to manage the work force and regulate the workweek. Third, the
bill would require DOD alone to hire 4,600 additional
employees, at an annual cost of $46.7 million just to maintain
existing fire protection.
In the 104th Congress one proposal was introduced in the
House of Representatives to amend the pay system for Federal
structural firefighters. Representative Steny Hoyer (D-MD)
introduced H.R. 858, the Firefighters Pay Fairness Act of 1995.
The bill would pay firefighters the full General Schedule
hourly rate for all non-overtime duty hours, including standby
and sleep time. In addition, the FLSA overtime rate would be
1\1/2\ times the hourly rate of basic pay.
Under the bill firefighters annual base pay would be
calculated on up to 106 hours of work biweekly and overtime
would be paid at the rate of 1.5 times the hourly rate of pay
for hours above 106. The bill would cap the overtime at the GS-
10, step 1 hourly rate. The new hourly and overtime rates of
pay would be phased in.
A draft document from the Department of Defense indicated
that the legislation would provide a minimum of 44 percent pay
increase for a firefighter working a 72-hour schedule. The
Congressional Budget Office prepared a preliminary cost
estimate and projected that the bill would cost more than $61
million in the first year, and more than $723 million over 5
years.
b. Benefits.--The investigation revealed that the current
pay system for Federal firefighters is complex and somewhat
confusing. Nevertheless, it attempts to compensate for some of
the demands and hardships of the occupation. It is fair to say
that complex systems sometimes produce inequities. An
examination of pay for Federal and municipal firefighters shows
that in certain localities total compensation for Federal
firefighters may be higher than their municipal counterparts.
Employing agencies have refuted the claim that a recruitment
and retention problem for Federal firefighters exists. It may
be necessary to simplify the pay structure, while
simultaneously addressing concerns over the current 72-hour
tour of duty, of Federal firefighters. Enactment of H.R. 858 is
opposed by the government's central personnel agency OPM, and
the individual agencies employing firefighters. The bill is
prohibitively expensive and may have a number of unintended
consequences. The investigation found a legitimate need for pay
simplification. However, justification for an across-the-board
pay increase, similar to that contained in H.R. 858, does not
exist. The subcommittee chairman has asked OPM and DOD, in
cooperation with the unions representing Federal firefighters,
to present a thoughtful, cost effective, comprehensive pay
simplification proposal.
c. Hearings.--A hearing entitled, ``Firefighter Pay and
Benefits'' was held on September 17, 1996.
The first panel consisted of two officials of the
International Association of Fire Fighters; one from the
National office and one from a local in San Francisco.
Representatives from the OPM and the DOD made up the second
panel. The hearing revealed disagreement between the National
office of the IAFF and the OPM and DOD with regard to the pay
gap between Federal firefighters and other Federal employees
and the recruitment and retention issue. Brook Beesley,
representative of IAFF's Local F-15 and F-259, said that the
entry level pay gap for Federal firefighters in Northern
California measured 67 percent in 1995.
The IAFF National office testified that ``the pay rate of
other Federal workers currently is 44 percent higher than the
pay of a Federal firefighter at the exact same grade and
step.'' The IAFF testified that ``. . . municipal fire fighters
earn an astounding 86 percent more per hour than their Federal
counterparts.'' Regarding recruitment and retention the IAFF
testified that ``Turnover rates have been as high as 33 percent
in recent years, with agencies finding it nearly impossible to
retain entry-level firefighters. Reliable data show that the
Federal fire service has a turnover rate twelve times higher
than the industry norm.'' At the request of the subcommittee
the Congressional Research Service examined the testimony
presented at the hearing to resolve several inconsistent
statistics cited by witnesses. The IAFF National office did not
respond to the CRS request for documentation of its
calculations. Data presented by CRS and hearing witnesses
refuted the turnover claims and the claims of significant
underpayment of Federal firefighters.
26. Drug Testing Policies in the White House.
a. Summary.--In 1986, President Ronald Reagan issued
Executive Order 12564 directing Federal agencies to institute
drug free workplace policies. Congress enacted legislation that
slowed the implementation of this Executive order in the course
of providing a statutory foundation for these drug free
workplace programs in all Federal agencies. All Federal
employees are subject to pre-employment screening for use of
illegal drugs, and employees in national security, safety-
related, or otherwise sensitive positions (commonly called
``testing-designated positions'' or TDPs) are also subject to
periodic random drug testing programs administered by their
agencies. Nearly 40 percent of the Federal workforce is
included in such TDPs.
In spite of the White House's reassurances that it treated
national security concerns related to the use of illegal drugs
seriously, the General Accounting Office had reported extensive
delays in the submission of the forms needed to initiate
background investigations of new employees at the start of the
Clinton administration. Previous Senate hearings, as well as
hearings and Government Reform and Oversight Committee
depositions related to the firing of White House Travel Office
personnel had revealed not only that the White House operated a
``special drug testing'' program for employees whom the Secret
Service considered potential threats to the President, the Vice
President, and the White House complex, but that the White
House's Director of Personnel Security was one of the employees
who had admitted previous use of illegal drugs during his own
background investigation. The placement of a person with a
history of previous drug use in such a sensitive position
occasioned concern about the adequacy of the White House's drug
free workplace program.
b. Benefits.--This investigation provided an opportunity to
assess whether the institution of a ``special testing'' program
for the Executive Office of the President resulted in any
compromise of the personnel or physical security of the White
House, and allowed the subcommittee to assess the adequacy of
current testing standards and monitoring procedures. It also
enabled a comparison between the hiring and testing practices
of key agencies--the Department of Defense, the Secret Service,
and the Federal Bureau of Investigation--and the looser
procedures in place at the White House.
c. Hearings.--A hearing entitled, ``Drug Testing Policy:
White House Standards,'' was conducted on September 20, 1996.
Subcommittee Chairman Mica convened the hearing to reassure
the American people that abuses identified in previous hearings
did not compromise our country's national security interests,
to confirm that the White House has instituted effective
corrective measures, and to assess whether legislation might be
necessary to correct any of these problems. Mr. Mica noted that
the reports of illegal drug use by White House employees
included recent use, and more serious hallucinogens than would
be included in the experimental use of marijuana during college
years. In a letter to Senator Richard Shelby, former White
House Director of Administration Patsy Thomasson acknowledged
that as many as 21 White House employees had participated in
the ``special testing program.'' Mr. Mica denounced the Clinton
administration's partisan efforts to divert attention from
these concerns, and expressed his hope that the White House
would assist efforts to resolve these concerns.
Mr. Kanjorski reported that two White House employees had
tested positive in random drug tests, and that both were career
employees who were terminated as a result of these tests. He
asserted that White House personnel during the Clinton
administration have remained drug free, and he saw no reason to
believe that this would change.
Mr. Burton noted that much of the American people's concern
on this topic is derived from the example established by the
White House. The President's flippant perspective on his ``I
didn't inhale'' remarks and the loose handling of FBI
background checks for senior employees caused legitimate
concern that this administration was setting a poor example
that was resulting in a more relaxed approach to matters of
serious concern.
Mr. Nelson reported that the Security Policy Board was
working under the National Security Council and the Department
of Defense to implement President Clinton's Executive Order
12968, which had directed the development of common
adjudication guidelines for determining eligibility for access
to classified information. These new guidelines were not
completed, but would be submitted after approval.
Ms. Vezeris testified that the Secret Service maintains
strict standards for the selection of applicants for employment
and for ensuring that employees continue drug free during their
careers. The Service can continue employees who come forward
voluntarily and work through an employee assistance program to
resolve drug use problems, but even in such cases, there is no
bar against disciplinary procedures, up to the level of
dismissal. She emphasized under questioning that the Service
can be very selective because they have thousands of applicants
for relatively few positions.
Mr. Reeder described the White House's drug free workplace
program, and claimed that it had been the subject of regular
reports to the Congress. He noted that all White House
employees must pass pre-employment drug tests, that they are in
TDPs throughout their employment, and that no administration
employee has tested positive. Records of these tests are now
maintained by career employees of the Office of
Administration's Human Resource Division. He claimed that the
White House has never overruled the Secret Service on questions
of issuing a White House pass to an employee. He acknowledged
that 11 individuals began in the ``special testing program'' in
the spring of 1994. Under the terms of this program, these
employees are subject to random testing at least twice per
year, and can be included in other tests as well. Twenty-one
employees out of more than 3,000 have been involved in the
``special testing program'' during the administration, at a
cost of $1,500. Current enrollment in the program is eight. Mr.
Reeder, in response to questions, reported that the
modification of security policy under consideration in the
administration would restrict access to classified information
among employees who hold the blue White House passes. These
employees had previously been deemed eligible for access to all
classified information. In response to questions from Chairman
Clinger, Mr. Reeder acknowledged that employees could be in the
White House for up to 180 days without having a background
investigation completed. Similarly, contractors and
consultants, who serve the White House but remain on private
payrolls, are not subject to either the drug testing or the
background investigation requirements that affect full-time
employees. Mr. Reeder reaffirmed that the White House supports
language in the Presidential and Executive Office
Accountability Act that would clarify the status of special
government employees. Chairman Clinger emphasized that the
``special testing program'' was developed to address drug use
that applicants admitted having occurred in the past 1 to 2
years, not experimental use during college. He stressed the
importance of resolving these concerns and implementing
effective policies in these areas.
27. Effects of Privatizing OPM Investigations.
a. Summary.--In April 1996, the Office of Personnel
Management signed a sole source contract with U.S.
Investigations Services, Inc., (USIS) that authorized the new
company to conduct background investigations for Federal
employees. USIS was incorporated in Butler County, PA, as an
employee-owned corporation whose primary stockholders were to
be the personnel who had performed these functions as Federal
employees in OPM's Office of Federal Investigations. The
concept of privatizing Federal functions by coverting them to
employee ownership had been advanced by then-OPM Director
Constance Horner in 1987. Current OPM Director James B. King
embraced the concept when the President proposed to privatize
this function as part of the National Performance Review
initiatives recommended in his FY-1995 budget. The subcommittee
conducted oversight hearings of this proposal in June 1995, and
learned that the administration had not developed an adequate
cost analysis of the proposal. The General Accounting Office
conducted intensive review of the proposal, and had issued
letter reports raising questions about the financial plan of
the new corporation, the adequacy of its protections for
records subject to the Privacy Act, and whether the privatized
employees would have effective access to the Federal, State,
and local law enforcement records needed to complete these
investigations.
b. Benefits.--This oversight was conducted in Butler, PA,
which serves as the corporate headquarters for USIS and is the
site of the OPM records management center. It provided an
opportunity for the community most directly affected by this
transition to learn the plans of both OPM and USIS for
continued operation and development of new business
opportunities. This development would provide substantial
benefits to the community, where the firm is one of the largest
employers in the northern section of Butler County.
c. Hearings.--The subcommittee conducted a field hearing,
``OPM Privatization: Community Impact,'' in Butler, PA, on
October 17, 1996.
Mr. King described the sequence of events leading to OPM's
Office of Federal Investigations receiving RIF notices in early
May, and all of the employees received employment offers from
USIS the next day. On July 5, the employees were separated from
OPM, and 94 percent of them accepted the offers to begin work
with USIS on Monday, July 8. Rather than ease this transition,
some facilities operated by the Department of Energy had
revoked the security clearances of employees who were separated
from OPM. OPM Director King and USIS CEO Harper testified that
these transition problems were close to resolution.
Subcommittee Chairman Mica noted that this transition could
have been smoothed through more effective planning, and
indicated that the GAO monitoring would continue. Mr. Harper
indicated that the company had begun operations with some
success, and already had hired 27 employees in addition to
those inherited from OPM. In response to a petition from the
American Federation of Government Employees, USIS held an
election that allowed the employees to decide whether they
would be represented for collective bargaining purposes. With
94 percent of the employee-owners voting, USIS employees
rejected the union, 65 percent to 35 percent.
DISTRICT OF COLUMBIA SUBCOMMITTEE
1. Closing of Pennsylvania Avenue.
a. Summary.--The purpose of this subcommittee investigation
is to explore issues concerning the closure of Pennsylvania
Avenue. Called ``America's Main Street'', it is a major artery
connecting the Capitol Building and the White House, as well as
a major east-west connector for the city, and is part of the
original L'Enfant Plan for the District of Columbia. Any
closing of this historic street, whether temporary or
permanent, has enormous impact on the orderly flow of city
traffic. Existing law gives both the DC government and Congress
key roles in local street closings.
Subcommittee Chairman Davis convened a hearing on June 30,
1995, to gather information on the legal authority necessary to
make permanent changes to city streets in the District, and to
assess the consequences of taking such actions including lost
revenue, and disrupted traffic patterns. The need for
Presidential security was not questioned.
The subcommittee heard testimony from officials of the
Washington municipal government including the Office of the
City Administrator, the Departments of Public Works and Housing
and Urban Affairs as well as the DC Council. The Municipal
testimony stressed the loss of revenue from parking meters, and
the dislocation caused by disrupted traffic patterns, as well
as the cost of rerouting the transit system. The problem of
jurisdiction between the Municipal and Federal law enforcement
branches was discussed at length, and the matter of
reimbursement of the city by the Federal Government.
The Department of the Treasury was asked to present written
testimony to be included in the record. Following the hearing,
subcommittee Chairman Davis again wrote Secretary Rubin,
seeking additional information and clarification of points made
in the original written testimony. Information was also
requested from the Federal Bureau of Investigation regarding
the parking ban in effect around the perimeter of their
building.
The subcommittee also reviewed the Vulnerability Assessment
of Federal Facilities report dated June 28, 1995, prepared by
the U.S. Marshal Service of the Department of Justice in direct
response to the April 19, 1995, bombing in Oklahoma City.
Subcommittee Chairman Davis convened a second hearing on
June 7, 1996, to ascertain what effects the closing of
Pennsylvania Avenue was having upon the District, businesses,
visitors, and tourists a year after the initial closing.
Testimony was taken from municipal officials, civic and
business representatives, the U.S. Department of the Treasury,
and the United States Secret Service.
b. Benefits.--This investigation furnished critical
information to the Congress necessary to the formation of
public policy regarding both government and commercial
establishments in the effected area. The investigation,
including the hearings, correspondence and several meetings
with Treasury and Transportation officials, heightened the
administration's awareness of the impact the closure of
Pennsylvania Avenue has imposed on the District of Columbia and
increased its willingness to address those impacts. As a result
of the subcommittee investigation, the Federal Highway
Administration has contracted for a ``Transportation Needs
Assessment'' for the District of Columbia. Such a comprehensive
review of the District's transportation systems has not been
conducted in 30 years and is currently beyond the means of the
District to perform for itself. It is expected that the report
will provide useful information to the District, the Financial
Responsibility and Management Assistance Authority (control
board), FHA, the Washington Metropolitan Area Transit Authority
(Metro), and the Metropolitan Transportation Planning
Organization in their important work in transportation and
environmental planning.
c. Hearings.--On June 30, 1995, the subcommittee held an
informational hearing on the closing of Pennsylvania Avenue.
The hearing followed an order signed by Treasury Secretary
Robert E. Rubin on May 19, 1995, prohibiting vehicular traffic
on portions of Pennsylvania Avenue and certain other streets
adjacent to the White House. Secretary Rubin delegated to the
Director of the United States Secret Service ``all necessary
authority to carry out such street closings.'' Those testifying
at the June 30, 1995 hearing were, Michael C. Rogers, D.C. city
administrator; deputy mayor for operations Larry King, director
of Public Works; Hon. Frank Smith, chairman, Committee on
Housing and Urban Affairs, D.C. City Council; Hon. David A.
Clarke, chairman of the Council of D.C.; Gregory W. Fazakerley,
president, D.S. Building Industry Association; Dr. Henry L.
Fernandez, chairman, Advisory Neighborhood Commission 2B;
Millard Seay, director of planning, Washington Metro Area
Transit Authority; Margaret O. Jeffers, Esq., executive vice
president, Apartment and Office Building Association of
Metropolitan Washington; and Ken Hoeffer, executive director,
Washington, DC Area Trucking Association.
On June 7, 1996, the Subcommittee on the District of
Columbia held a second hearing to ascertain what impact the
closing of Pennsylvania Avenue has had on District residents,
commuters, visitors, and the greater Washington Metropolitan
area in general and administration actions or plans to deal
with those impacts. The following witnesses testified: Senator
Rod Gramms; Representative Jim Moran; James Johnson, Assistant
Secretary for Enforcement, U.S. Department of the Treasury;
Eljay Bowron, Director of the United States Secret Service;
John Strauchs, CEO, SYSTECH Group, Inc.; Mayor Marion Barry;
Larry King, director, DC Department of Public Works; Michael
Rogers, DC city administrator; Rodney Slater, Administrator,
Federal Highway Administration; William Lawson, Assistant
Regional Administrator, General Services Administration; Dennis
Galvin, Associate Director for Professional Services, National
Park Service; Timothy Coughlin, president, Riggs National
Corp.; Robert S. Krebs, vice president, Regional Affairs,
Greater Washington Board of Trade; Tom Wilbur, president, DC
Building Industry Association; Lon Anderson, staff director,
AAA Potomac; Christopher Reutershan, District of Columbia
Chamber of Commerce; Emily Vetter, president, Hotel Association
of Washington, DC; William Lecos, president, Restaurant
Association of Metropolitan Washington, and Jon P. Grove,
executive vice president, American Society of Association
Executives.
2. Traffic Disruptions.
a. Summary.--The subcommittee held an oversight hearing
into recent traffic disruptions in the District of Columbia
organized by a local labor organization. The group, ``Justice
for Janitors'' is organized and supported by the Service
Industry Employees Union (SIEU). A concerted effort has been
undertaken to pressure private companies to increase wages and
benfits for service personnel through public demonstrations.
The group repeatedly deliberately blocked major traffic
arteries in the Nation's Capitol and caused massive traffic
disruptions affecting both the public and private sectors. The
subcommittee sought information into the consequences of the
traffic disruption to area business, commuters, and police
procedure.
An incident on September 20, 1995, generated the hearing,
in which morning commuter traffic was brought to a standstill
on Interstate 66, Routes 50 and 110, the Theodore Roosevelt
Memorial Bridge, and the George Washington Memorial Parkway. An
estimated 100,000 motorists were affected. As part of the
disruption, a bus was pulled across the Roosevelt Bridge and
abandoned. Each of the 34 persons arrested was fined $50.
According to news reports, the traffic disruption ``impeded an
ambulance on call'' and caused ``neighboring small businesses
untold losses of normal revenue.''
Testimony at the hearing revealed the problems such
demonstrations cause the law enforcement officers, and traffic
management personnel. Additional testimony was heard that
outlined the difficulties generated by the traffic disruption
including a rise in the number of auto accidents. The impact on
area businesses and medical facilities was discussed at length.
Following a subsequent disruption on December 4, 1995,
which created a huge traffic jam in Northwest Washington in the
area of the DC Financial Control Board offices, the
subcommittee is reviewing legislative options to prevent and
control future non-permitted demonstrations.
b. Benefits.--The investigation provided information
critical to drafting legislation to discourage reoccurrence of
deliberate traffic interruptions in Washington, DC. The refusal
of the union instigating these disruptions to testify or
attempt to justify such behavior strongly indicates that the
objective of these incidents was publicity and maximum public
disruption in an attempt to gain an advantage over private
employers in labor negotiations. The subcommittee was able to
encourage various law enforcement agencies to cooperate and
plan for joint action to minimize the extent of any future
demonstrations of this type. It should be noted that no more
incidents of this nature have occurred since December 1995.
c. Hearings.--The subcommittee held an oversight hearing on
October 6, 1995, concerning the recent traffic disruptions in
the District of Columbia organized by a local labor
organization.
3. District of Columbia Economic Recovery Act.
a. Summary.--In the past 2 years, individuals have
suggested ways to help the District of Columbia improve its
financial status and grow its economy. Most of the proposals
that were brought contained various forms of tax reductions and
incentives. District Delegate Eleanor Holmes Norton introduced
H.R. 3244 to amend the DC Federal tax code to achieve some of
these objectives. The bill was referred the Committee on Ways
and Means. Due to the attention the District of Columbia's
financial condition has generated and the widening national
debate on the concept of the ``flat tax'' and other proposals,
subcommittee Chairman Davis convened a hearing on July 31, 1996
to obtain various points of view on the concepts the bill
sought to address. Joining the subcommittee in ex officio
capacity for the hearing were, Committee Chairman Clinger,
Representatives Morella, Moran, and Wynn.
b. Benefits.--This investigation furnished the
subcommittee, Congress, and interested citizens with
information that will assist them in considering tax and other
remedies that have thus far been advanced. Witnesses presented
statistical evidence in support of the plan and also indicating
that it would have little immediate impact on the District of
Columbia government or its performance. The hearing will give
Congress and other interested parties significant data on the
benefits and incentives of such tax reduction on individuals
and whether such benefits by themselves could overcome concerns
about safety, poor schools, and poor government services which
are causing so many people to leave the city.
c. Hearings.--On July 31, 1996, the subcommittee held an
informational hearing on H.R. 3244. The following witnesses
testified: Jack Kemp, co-director, Empower America; Senator
Joseph I. Lieberman; Speaker Newt Gingrich; Wade Henderson,
executive director, Leadership Conference on Civil Right; James
Prost, Basile Baumann Prost and Associates; Martin A. Sullivan,
tax analyst; Edwin Kee, George Washington University; Steven
Fuller, George Mason University; Thomas B. Ripy, Congressional
Research Service; Kenneth J. Kies, chief of staff, Joint
Committe on Taxation; James R. Atwood, Covington and Burling;
Diane Duff, Greater Washington Board of Trade; H. Hollister
Cantur, Fairfax County Chamber of Commerce; Kwasi Holman,
executive vice president, DC Chamber of Commerce; and Timothy
C. Coughlin, president, Riggs National Corp.
4. Public Law 104-8, District of Columbia Financial Responsibility and
Management Assistance Authority Act of 1995.
a. Summary.--The subcommittee held two oversight hearings
on the implementation of the legislation that established the
District of Columbia Financial Responsibility and Management
Assistance Authority (the control board). At the first hearing,
subcommittee Chairman Davis stressed the importance of the act
and called upon the parties working under it to state their
understanding of their respective roles and to give their view
on the state of the city's financial condition. At the second
hearing, subcommittee Chairman Davis reiterated the importance
of the positions of Chief Financial Officer and Inspector
General as essential parts of the District's government. He
also reviewed their relationship with the control board. The
rest of the hearing was devoted to the findings of an
independent audit by KPMG Peat-Marwick of deficiencies and lack
of controls in the District with regard to vender payments and
information gathering and dissemination. In addition to holding
public hearings on the implementation of Public Law 104-8, the
subcommittee exercised its powers of oversight of the statute
and the District of Columbia Financial Responsibility and
Management Assistance Authority (control board) it created in
several ways.
b. Benefits.--To assist the subcommittee to fulfill its
oversight responsibilities and to bring essential information
before Congress and the public, the subcommittee has initiated
monthly meetings and briefings between staff of the control
board and various congressional committees and subcommittees.
It established ongoing lines of communications with the Chief
Financial Officer and Inspector General, posts established by
the statute. It consulted with control board members and staff
about legislation affecting the District, such as H.R. 3663,
the District of Columbia Water and Sewer Authority Act of 1996
and other measures Congress considered. Subcommittee Chairman
Davis, Ranking Member Norton, and subcommittee staff met
periodically with control board Chairman Brimmer and staff to
ascertain the board's needs, assess its progress in meeting
them, and to assure that the parameters under which the board
operates conform to the letter and spirit of Public Law 104-
108. It will continue in these endeavors throughout the life of
the control board, as specified in the statute.
The benefits of Public Law 104-8 continue to mount as the
control board moves aggressively to improve the performance of
the District government, control its spending, and to improve
revenue collection. The Chief Financial Officer, created by the
legislation, has reformed the operation and personnel of the
entire financial cluster in the District and has implemented
firm control over financial management throughout the
government. The Inspector General, which was substantially
enhanced by the legislation, has initiated a number of
management audits and performance improvements as well
investigations of potential fraud, corruption, and waste.
The control board has disbanded the Lottery Board and
placed operation of the Lottery under the CFO. It has also
removed the Superintendent of the DC school system, replacing
him with a temporary Chief Executive Officer and has created a
Board of Trustees with most of the powers of the Board of
Education to revive and reform the entire operation of the DC
public schools.
Major financial reform has already taken place in the
District government with longer term improvements still being
worked on. The District was able to sell bonds on the private
market in October 1996 at an acceptable interest rate without
credit enhancements or other security instruments.
The benefits to Congress of better information on the
District of Columbia and its government cannot be
overemphasized because of its impact on appropriation
decisions. More and better information is critical to
Congressional efforts to improve and reform the District
government. In addition, placing an autonomous agency between
Congress and the District government has greatly benefited the
residents of the District and its government by providing much
more direct and immediate assistance than would be possible for
Congress as a body to provide while maintaining the home rule
government of the Nation's capital.
c. Hearings.--The subcommittee held hearings on March 19
and 28, 1996. Those who testified were: Dr. Andrew Brimmer,
chairman, District of Columbia Financial Responsibility and
Management Assistance Authority; Stephen D. Harlan, vice
chairman, DCFRMAA; DCFRMAA Members Dr. Joyce A. Ladner,
Constance Berry Newman, and Edward A. Singletary, Mayor Marion
Barry, DC City Council Chairman David Clark; Anthony Williams,
DC Chief Financial Officer, Angela Avant, DC Inspector General;
and John Hummel, KPMG Peat-Marwick, LLP.
GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE
1. Capital Budgeting.
a. Summary.--Since the imposition of ever-tightening caps
on discretionary spending in the 1990 Omnibus Budget
Reconciliation Act, committee members have been concerned that
long-term investments in capital have been neglected in favor
of current consumption. Borrowing funds to invest in capital
projects with long-term benefits is an appropriate activity, as
the future generations that enjoy the benefits of the assets
will also pay for them. However, the Federal Government lacks
experience with capital budgeting concepts and techniques.
Therefore, committee members were interested in examining the
practices of State and local jurisdictions, as well as that of
other nations.
The subcommittee examined H.R. 767, the Federal Budget
Structure Act, introduced on February 1, 1995, by Chairman
William Clinger. Two hearings were held to review various
proposals to implement a Federal capital budget and the manner
in which such budgets impacted other government operations. The
hearings examined the workings of capital budgets operated by
Fairfax County, VA, New York, NY, Philadelphia, PA, and the
government of New Zealand, as well as the work of scholars and
private sector financial experts in the area of investment
budgeting.
b. Benefits.--Implementing a Federal capital budget will
help rebuild the Nation's deteriorating capital stock, and will
help improve Federal planning, investment and budgeting
processes.
c. Hearings.--Subcommittee Chairman Horn convened the first
hearing on March 2, 1995, to examine the practices and
experience of local jurisdictions in the area of capital
budgeting. He opened the hearing by noting the importance of
planning capital projects, and that the Federal Government has
failed to adequately plan. Chairman Clinger noted his
endorsement of Federal capital budgeting and that his bill, the
Federal Budget Structure Act of 1995, H.R. 767, had been co-
sponsored by a number of committee members.
Representative Bob Wise also mentioned that he supports the
concept of capital budgeting and has introduced two bills on
the issue. Representative Norman Mineta testified that
borrowing funds to invest in capital projects with long-term
benefits was an appropriate activity, as the future generations
that enjoy the benefits of that asset will also pay for it.
Representative Ray Thornton noted that Arkansas had
successfully operated a capital budget for most of this
century. Representative Thornton also referred to his support
of a capital budget and his introduction of a bill to provide
for a Federal capital budget.
Katherine Hanley, chairwoman of the Fairfax County Board of
Supervisors, accompanied by William J. Leidinger, county
executive, Fairfax County, discussed Fairfax's capital budget.
Mr. Leidinger testified that the county is prohibited from
allowing capital costs to exceed 10 percent of total general
fund disbursements. This is the centerpiece of the county's Ten
Principles of Sound Financial Management, which has allowed
Fairfax to maintain a AAA bond rating, 1 of only 33 local
governments out of 30,000 jurisdictions to claim that honor.
Thomas McMahon, director of Finance Division, New York City
Council, testified on New York City's capital budget. Mr.
McMahon noted that Federal adoption of a capital budget would
help rebuild the Nation's deteriorating capital stock and
testified that New York City has witnessed a decline in the
quality and quantity of the city's capital stock.
Ted Sheridan, the president of Sheridan Management Corp.,
and former CFO of Fairchild, testified on behalf of the
Financial Executives Institute. Mr. Sheridan stressed that
capital budgeting was essential to efficiently plan the Federal
investment program. He proposed a pilot program for capital
budgeting based on three assets: a weapons system, an
information system, and a power generation station.
David Chu, a fellow at the National Academy of Public
Administration (NAPA), served on NAPA's expert panel on capital
budgeting. Dr. Chu believes that capital budgeting has many
strengths, including improving planning, investment and
identifying budget expenditures for investments. Dr. Chu also
mentioned technical problems with capital budgeting, such as
the treatment of capital equipment, and the treatment of tax
expenditures, government-sponsored enterprises.
On June 29, 1995, His Excellency John Wood, Ambassador of
New Zealand, described how government agencies in New Zealand
changed their accounting, budgeting, and management systems
beginning in 1984. These changes affected (1) the way
department heads were chosen; (2) the way in which agencies
define, measure and report performance; (3) delegation of input
control to departments or agencies; and (4) the way government
fiscal performance is measured and reported.
Government departments in New Zealand are assessed a charge
for capital controlled by the department, determined by
multiplying total capital times a market rate of interest. In
addition, agencies may sell surplus assets and use the proceeds
to upgrade computer systems. These features make explicit to
agencies the cost of owning assets.
Edward Rendell, mayor of Philadelphia, noted that capital
budgets are common to local and State governments, are
enforceable by a borrower's bond rating, and force long-range
prioritization and planning for capital projects.
Mr. Paul Posner, Director of Budget Issues, Accounting and
Information Management Division of the U.S. General Accounting
Office, testified that if the Federal budget were balanced, the
long-term boost to Gross Domestic Product would mean that GDP
would be 34 percent larger in the year 2025 than if no action
were taken to reduce the deficit. Similarly, Mr. Posner noted
that within the budget process, care is needed to be taken to
improve selection of investments to improve productivity.
Mr. Posner noted the temptation that lawmakers would face
to classify non-capital expenditures as capital in order to get
more favorable budget treatment for the asset. He also noted
that the Federal Government does not own many of the capital
assets it funds in the budget. Many are owned by States or
local governments and funded by subsidies or grants. In
addition, Mr. Posner noted the need to impose long-term control
over the obligation of public funds. Finally Mr. Posner noted
the importance of recognizing the full cost of a long-term
obligation up front in order to impose discipline on agencies.
2. Integrity of Government Documents.
a. Summary.--On September 30, 1994, former U.S.
Representative Barbara Jordan, as chair of the Commission on
Immigration Reform, released the Commission's first report to
the Congress on the status of the Nation's immigration policy.
The report was required by the Immigration Act of 1990, Public
Law 101-649. The Commission cited widespread counterfeiting of
documents that entitle people to gain public benefits or to be
hired for work as a major factor undermining current
immigration policy. It recommended development of a ``simpler,
more fraud-resistant system for verifying work authorization.''
In the President's Budget for fiscal year 1996, the
administration proposed to reform the Nation's immigration
process, in part through development of a nationally available
employment verification system. In that connection, the
subcommittee met to consider a range of views on the nature,
the role, the need, the cost, and the potential social
consequences of using fraud-resistant personal identification
documents as part of a national employment verification system.
b. Benefits.--The shortcomings with regard to the security
of government documents identified by the hearing will assist
the committee in advising relevant Federal agencies on the need
to develop more secure documents to verify work eligibility and
immigration status.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on March 7, 1995, to examine the situation regarding the
integrity of government documents with testimony from
representatives from the U.S. Commission on Immigration Reform
and the Immigration and Naturalization Service (INS).
Subcommittee Chairman Horn opened the hearing by describing
it as a fact-gathering effort toward fraud-proofing personal
identification documents. Congressman Becerra, the first
witness, cautioned all concerned to remain sensitive to the
considerations of personal privacy, data base accuracy, and
total public cost as major factors bearing on U.S. immigration
policy, ``big-brotherism,'' and perceptions of discrimination.
Mr. Robert C. Hill and Dr. Susan Martin, U.S. Commission on
Immigration Reform, summarized the Immigration Reform
Commission's published recommendation for electronic validation
of the Social Security number as the fairest, fastest, most
reliable, and most efficient way to guard against employment
authorization fraud. They advocated starting slow and small
with one or more alternative ``pilot programs'' prior to
constructing a nationwide employment verification registry, and
letting the Commission monitor preliminary results.
Mr. James A. Puleo, Executive Associate Commissioner for
Programs, INS, explained his agency's telephone verification
system (TVS) for checking identities of Los Angeles area
``green card'' holders (immigrants) applying for work. TVS
methodology is potentially usable in a national employment
verification system. INS data bases on non-citizen U.S.
residents need to be purified, reconciled, and integrated in
order to be usable in a national employment verification
system. The agency has taken some steps toward fraud-proofing
``green cards'' (resident alien registration cards), but the
current re-issuance program will take a year longer than
planned. INS is working with the Social Security Administration
(SSA) on a multi-stage plan that would ultimately lead to a
national employment verification registry.
Dr. Shirley S. Chater, Commissioner, Social Security
Administration, emphasized that Social Security cards have
never been intended to guarantee individual personal identity.
Nonetheless, the current counterfeit-resistant Social Security
card has been issued to 61 percent of active card holders. SSA
has a toll-free telephone number which employers can use to
verify Social Security numbers (SSN's) for payroll purposes,
but it is not used much, and it could not handle a large
nationwide verification workload at present. The agency's
``enumeration at birth'' program has nearly eliminated
fraudulent SSN's for infants and children. SSA's data base,
recently much improved, still needs more work in order to
support employment verification nationwide.
Mr. Richard W. Velde, former head of the Law Enforcement
Assistance Administration (LEAA), suggested that in today's
established electronic data base networks for exchanging health
and vital records, criminal history, and bad motor vehicle
driving records, we may already have a framework for the
proposed national employment registry. In addition,
sophisticated moderate-cost biometric identification technology
is available to produce encoded personal documents that
definitively establish the bearer as either the person
described on the document or as a different person. Several
States use such technology in issuing drivers' licenses. A
nationwide hookup of State motor-vehicle driver registries,
coupled with uniform issuance of biometric State drivers'
licenses, could serve as the functional equivalent of the
Immigration Reform Commission's employment verification
registry.
Mr. Frank W. Reilly, Ms. Hazel E. Edwards, and Mr. John
Chris Martin, Accounting and Information Management Division,
General Accounting Office, commented briefly on INS and SSA
data bases, TVS's, and plans for a two-step process to cross-
check each other's files for discrepant information. They
described a newly implemented statewide system for managing
public benefits eligibility in Connecticut. The system uses
state-of-the-art technology in providing a one-step application
for three Federal benefit programs that links nine separate
supporting data bases. Connecticut's experience could help in
developing the Federal employment verification registry.
Joseph Eaton, professor at the Graduate School of Public
and International Affairs, University of Pittsburgh, praised
the Immigration Reform Commission's work and summarized the
advantages and the ready availability of biometric
identification technology. The protection of publicly stored
private information can be assured and enhanced by (1) feedback
to the individual whenever a privacy-sensitive personal file is
accessed; (2) standards for data base matching; (3) bonding and
licensing of sensitive data bank owners and employees; and (4)
administrative and legal remedies.
Mr. Robert Rasor, Special Agent, United States Secret
Service, mentioned several different kinds of identification-
document fraud that the Secret Service pursues in conjunction
with the INS's Forensic Identification Laboratory. He described
his agency's role of coordinating and assisting the efforts of
State bureaus of health and vital statistics and departments of
motor vehicles to strengthen and standardize identification
media and documents.
Mr. Russell Meltzer, Head of Security, Schlumberger-Malco,
Inc., explained in concept how the credit card industry's
authorization system could be copied and retrofitted to serve
as a national employment registry and verification system. The
Federal Government would function analogously to a bank, an
employer to a retail merchant, and a job applicant to a
consumer. Inquiry terminals at work places would not allow
users (inquirers) to alter anything in the data bank. An
applicant's document would take the form of a ``smart
(computer-chip) card,'' biometrically encoded to match to the
individual bearer. Written testimony was provided by Mr. Lamar
Smith of Visa USA, which described how today's credit card
industry authorization process works.
3. Federal Role in Privatization.
a. Summary.--The Budget of the United States Government,
the President's budget request submitted on February 6, 1995,
contained numerous proposals for privatization of government
functions, assets, and agencies, including the helium program,
the National Weather Service, U.S. Enrichment Corporation, four
of the Power Marketing Administrations, and the Naval Petroleum
Reserve. The committee examined the history of privatization in
other countries and levels of government to determine lessons
to be derived from these sources.
b. Benefits.--This hearing demonstrated the necessity for
additional private sector capital being deployed to meet public
needs. From wastewater treatment to airports, many publicly
owned assets are not receiving sufficient levels of investment.
There are investors willing to provide this capital, and the
experience of other nations proves that such measures can
improve economic performance while increasing investment, and
reducing the role of the Government in the economy.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
by noting the historical increase in the number of
privatizations all over the world, with the exception of the
United States. Representative Klug, who chairs the Speaker's
task force on privatization, listed the types of Federal
agencies and activities which his task force has identified as
possible candidates for privatization. Roy Bernardi, mayor of
Syracuse, NY, testified about his city's plans for
privatization. Chief among the plans is a proposal to privatize
the airport. However, this sale is partially blocked by Federal
rules regarding grant repayment of assets constructed with
Federal dollars.
Andrew Jones, worldwide privatization coordinator at Arthur
Andersen Consulting, testified about privatizations in other
countries and lessons to be learned from those experiences.
Roger Leeds, managing director of Barents PLC, testified
about his experience directing privatization efforts abroad.
Mr. Leeds noted that the likeliest prospects for privatization
in the Federal Government were services (though Leeds did
mention the power marketing administrations).
Louis Albano, president of Civil Service Technical Guild in
New York City, testified about the dangers of contracting out
additional government services. Mr. Albano suggested that
government workers could do the same job cheaper and better
than a private contractor whose motive was profit.
Bert Concklin, president of Professional Services Council,
testified that the Federal Government should contract out more.
Mr. Concklin spoke against the system of cost comparison
whereby costs of private contractors are compared against the
cost of performing work in-house. He also testified that such
cost comparisons were misleading, since Federal costs usually
do not include many overhead items.
Ralph L. Stanley, a senior vice president with United
Infrastructure Corp., testified on the need for private
infrastructure finance initiatives. He proposed an
infrastructure bank which would take several billion Federal
dollars and leverage them with private investment.
Ronald Correll, president and CEO of United Water
Resources, testified about the need for private financing of
water system improvements.
Viggo Butler, president of Lockheed Air Terminal, testified
about the need for relief from the Federal grant repayment
requirement.
4. National Performance Review.
a. Summary.--On May 2, 1995, the subcommittee convened a
hearing to evaluate the accomplishments of the National
Performance Review. The National Performance Review (NPR) was
initiated by Vice President Gore in 1993 and consisted of two
phases. The purpose of the first phase was to make government
work better and cost less; the second phase required agencies
to fundamentally reevaluate their missions, goals, and
objectives.
b. Benefits.--Ongoing review of the National Performance
Review process will help Congress and the public assess what
the NPR has accomplished to date, and what can be expected from
the second phase of the NPR initiative. This effort will help
the Federal Government determine how to better serve the
Nation.
c. Hearings.--Witnesses were asked to give their opinions
on the mission and role of the NPR, whether benchmarks for
evaluating NPR's progress existed, whether NPR as implemented
met their expectations for improving government, and whether
NPR could achieve its stated objectives.
Dr. Alice Rivlin, Director, Office of Management and
Budget, supported NPR's effectiveness in improving executive
branch departments and agencies. She noted that Vice President
Gore, who spearheaded Phase I, encouraged the agencies to adopt
the 1,200 recommendations developed by NPR. In describing Phase
II, Ms. Rivlin stated that the focus switched from ``how''
government operates to ``what'' it should do. She urged
Congress to help NPR with funding.
Charles Bowsher, Comptroller General of the United States,
applauded the concept and aims of the NPR, but saw many
shortcomings. Two examples he cited were failing to address
many critical management problems in the agencies and ignoring
nearly three-fourths of other issues GAO had identified. He
felt that the goals should be stated more clearly, reliable
information should be available, and that the focus should be
on outcome-based management.
Tony Dale, budget manager of the New Zealand Treasury,
describes the public sector reform of New Zealand in the mid-
eighties. The corporatization, privatization, and public sector
reforms are the very reasons that New Zealand now has constant
economic growth, a low inflation, a shrinking percentage in
government expenditures, and instead of a 9 percent deficit,
the country now has a 7 percent surplus. He strongly supports
public sector reform.
Duncan Wyse, executive director, Oregon Benchmarking
Project, made three points: (1) most of the Federal agenda is
delivered by State and local governments, and improvement must
be made by taking this into consideration; (2) the system needs
to be reformed; and (3) Congress as well as the executive
branch needs to be reformed.
Dwight Ink, Institute of Public Administration, thought
that the implementation of NPR concepts has been very
disappointing and he hoped the situation will change in the
future. He pointed to the hiring process, the inconsistency
among NPR agencies, and the inability of leadership as examples
of NPR ineffectiveness. He blames the problems of organization
and execution in the NPR on too much restructuring without
establishing missions and roles.
R. Scott Fosler, National Academy of Public Administration
agreed with the scope and purpose of the NPR. He believed the
move from the ``how'' of government to ``what'' government does
is a positive step; however, NPR has to address key areas if it
wants to sustain its energy. Such key areas are accountability,
a coherent framework, and capacity within the agencies.
Donald Kettl, senior nonresident fellow, the Brookings
Institution, stated that NPR had made substantial progress, and
achieved substantial savings, but the progress of NPR is not
self-sustaining and that there are still many unanswered
questions.
Herbert Jasper, McManis Associates, lauded many of the
accomplishments of the NPR, while expressing some misgivings.
He cited as disappointing NPR's lack of analysis, statutory
promises that are not backed up with resources, the ``command''
or top-down philosophies of some recommendations, and the
``government bashing'' that permeates NPR reports.
5. Strengthening Departmental Management.
a. Summary.--In the past 30 years, there has been a
multiplication in the numbers of management functions, and a
diffusion of their responsibility among numerous centers. These
centers of management authority include Secretary, Chief of
Staff, Inspector General, Chief Financial Officer, Chief
Operating Officer, and Assistant Secretary for Management. The
number of employees in executive levels I through V totaled 249
in 1960 and 1626 in 1992. Similarly, occupants of the Senior
Executive Service (SES) also increased dramatically in number
during the same period. The larger number of management and
control personnel resulted in increased layers of management,
who delayed implementation of management program and distorted
information passing between levels of management.
b. Benefits.--The hearing demonstrated the need for a
government focus on management issues. This was part of the
subcommittee's ongoing interest in and oversight of the
management practices at Federal agencies.
c. Hearings.--On May 9, 1995, the subcommittee convened a
hearing entitled, ``Strengthening Departmental Management.''
Subcommittee Chairman Horn opened the hearing by noting the
framework of general management laws which exists to coordinate
management reform efforts. Chairman Horn described his intent
to bring together private and public sector experience to help
solve the problems of government management.
Tom Glynn, the Deputy Secretary of Labor, testified about
his experience as a Chief Operating Officer at the Department
of Labor. Mr. Glynn described his agency's reinvention efforts,
including reducing the steps it takes to hire a new worker from
120 to 41 steps. Chairman Horn and Glynn exchanged comments
concerning the diffused nature of management responsibilities
within the current organizational structure. The Chief
Operating Officer, the Secretary's Chief of Staff, the
Inspector General, the Assistant Secretary for Management and
the Chief Financial Officer each have large management
responsibilities. The proposed chief information officer would
diffuse management responsibilities further.
George Munoz, Assistant Secretary for Management and Chief
Financial Officer, Department of the Treasury, testified
concerning his agency's recent reinvention efforts. Mr. Munoz
described the principles which have guided Treasury's
management improvements: customer service, strategic planning
and streamlining. Representative Michael Flanagan and Mr. Munoz
gave their views on debt collection.
Johnny Finch, Assistant Comptroller, General Government
Division, and Gene Dodaro, Assistant Comptroller, Accounting
and Information Management Division, GAO, testified on GAO's
reviews of agency management improvement efforts. Mr. Finch
noted that the Government Performance and Results Act, the
Chief Financial Officers Act and the Paperwork Reduction Act
have formed the basis of the agency management improvement
efforts. Mr. Finch noted that agencies need to define their
mission, improve operational effectiveness by using information
technology to re-engineer, strengthen financial management, and
build the capacity to manage the Federal workforce.
Upon questioning, Mr. Dodaro outlined the problem areas in
information technology investment and described weaknesses in
financial management at the Department of Defense. Mr. Finch
detailed differences between the National Performance Review
and successful government reform efforts abroad.
In panel III, Alan Dean, senior fellow of the National
Academy of Public Administration, described recent changes in
the Federal workforce, such as the increasing numbers of non-
career officials. Mr. Dean also discussed reorganization
proposals, including the creation of an Office of Federal
Management and restructuring executive departments. William
Hansen, former Chief Financial Officer at the Department of
Education, outlined the reorganization of the Department in the
1980's, and the restructuring and block-granting of programs
that occurred in 1981-1983. Mr. Dean testified that OMB's
restructuring has denuded the agency of any expertise in
government corporations.
Roger Sperry, director of management studies of the
National Academy of Public Administration, identified the five
key areas to any efforts at government reform: strengthening
Federal leadership, automating, integrating and streamlining
government, focusing on performance, streamlining Federal field
structures and congressional-executive relations. Mr. Sperry
also commented on interagency and intergovernmental
coordination in a region responding to a critical situation.
6. Consolidating Federal Programs and Organizations.
a. Summary.--This is part of the Making Government Work
series described in Section II.A.1.
b. Benefits.--These are described in Section II.A.1.
c. Hearings.--On Tuesday, May 16, 1995, the subcommittee
began its third hearing in its ``Making Government Work''
series. The hearing was held in two parts and considered
proposals for restructuring the programs and functions of the
Departments of Energy and Education. The first part of the
hearing will be held on May 16th; the second session was on May
23rd.
Subcommittee Chairman Horn noted at the opening of the
hearing that a number of proposals recommended terminating the
Departments of Education and Energy. He offered a criterion to
be used when considering whether, if an agency or department
did not already exist, it would make sense to create it.
Ranking subcommittee member Mrs. Maloney noted that the
country had little experience with abolishing Cabinet
departments. She cautioned against not adequately providing for
the continuation of many of the activities of the Energy
Department that she regarded as important.
In her testimony, Secretary O'Leary presented her agency's
own plan to reduce its workforce by 27 percent and its budget
by $14 billion over the next 5 years. She stated that the
Department would still be required to perform its four critical
missions. The Secretary identified these missions as national
security protection and nuclear danger reduction, weapons site
clean up and environmental management, science and technology
management, and energy security enhancement. She concluded that
the Energy Department, smaller in size, was still the best
institutional vehicle to perform these tasks.
In response to questions from the subcommittee, the
Secretary stressed the advantages of maintaining civilian
control over the Nation's nuclear weapons program. She
criticized suggested alternatives to the Energy Department,
such as the proposed Department of Science, as unwieldy and
ill-advised. When asked by subcommittee Chairman Horn about the
opportunities for closer policy coordination that a ``Natural
Resources Department'' offered, as had been proposed by
President Nixon, she responded that regular meetings by
administration Cabinet members in related fields provided for
policy coordination and the resolution of disputes.
The subcommittee reconvened its hearing on ``Consolidating
Federal Programs and Organizations'' on May 23, 1995. Donald
Hodel, former Secretary of Energy told the subcommittee that in
a market economy, the Energy Department had little to do with
producing or generating energy. He concluded that the very
existence of a Department of Energy was undesirable, as ``it
suggests that the U.S. Government is doing or is going to do
something about energy beyond what I believe government should
do.''
Former Energy Secretary Admiral James Watkins indicated
that he appeared before the subcommittee neither as an advocate
nor an opponent of the Department's elimination. Rather the
Admiral stressed his concerns for the appropriate stewardship
of the Nation's nuclear energy program. He called upon Congress
to initiate a careful review, drawing upon outside experts, to
determine which of the Department's functions should be
retained, which ought to be transferred and which could be
privatized.
Former Energy Secretary John Herrington called for the
elimination of the Department. He advocated ending all energy
research and development and energy conservation programs. He
further supported the privatization of government owned
laboratories engaged in research, the five Power Marketing
Administrations and the naval petroleum reserves. He proposed
placing nuclear weapons functions under the jurisdiction of a
newly created Under Secretary of Defense.
Former Under Secretary of Energy Shelby T. Brewer observed
that the Energy Department had strayed from its original
mission of obtaining national energy security. He noted that as
the Nation's energy circumstance had changed, the Department
shifted its mission to become an environmental management
department, a basic science department, and a biological and
medical research department. As a result, according to Mr.
Brewer, energy development and demonstration now accounts for a
little over 10 percent of the total budget. Mr. Brewer also
testified that a substantial contributory factor to the
Department's lack of a clear mission was the multiplicity of
congressional committees, each of which has its own set of
interests, different from the others.
Former Under Secretary of Energy Donna R. Fitzpatrick
joined her former colleagues in calling for the elimination of
the Department, suggesting that it had outlived its usefulness.
She advocated placing weapons related activities into a sub-
cabinet agency independent of the Defense Department.
As the hearing shifted its attention to the Department of
Education, subcommittee Chairman Horn noted that several
proposals would either eliminate the subcommittee and transfer
its activities to the States, or else merge its functions into
another Cabinet subcommittee, such as Labor.
Under Secretary of Education Marshall S. Smith stressed in
his testimony the strong public support for the Department and
its programs. He commented that: Federal involvement in
education supports democracy and our economy. This is not just
a State and local interest; this is a national interest. He
claimed that administrative costs account for only 2 percent of
the budget, with the subcommittee having the smallest ratio of
employees to total budget in the Federal Government.
Accompanying Secretary Marshall was Donald Wurtz, Chief
Financial Officer of the Department. Subcommittee Chairman Horn
and Ranking Member Maloney engaged Wurtz in a discussion of the
Department's efforts to improve its debt collection efforts for
student loans.
Chester Finn, of the Hudson Institute, testified that the
Federal Government had become a meddlesome force in American
education. He advocated eliminating the Department and
transferring its grant programs into either strings-free block
grants to the States, or transferring all the Department's
functions to other Federal agencies.
William Hansen echoed the views of Mr. Finn, adding that
the number of the Department's categorical programs had grown
from 130 in 1981 to over 250. According to Mr. Hansen the
number of Federal employees and the extent of local intrusion
could be reduced by greater use of program consolidation and
block grants. Through program consolidation, he said, the
Department could greatly reduce its staff.
George Munoz, Assistant Secretary of Treasury and the
Department's Chief Financial Officer testified that the
Education Department has undertaken a number of management
reforms. In particular he noted improvements in the
Department's financial management practices.
Paul Posner, Director of Budget Issues in the Accounting
and Information Management Division of the General Accounting
Office, testified on his office's conclusions on duplicative
and overlapping Federal programs. Program consolidation, he
reported, held out promising opportunities for increasing the
efficiency of government operations and improving performance.
He noted that savings were possible when programs with similar
objectives and clients were brought together and conflicting
requirements, duplication and overlap were reduced.
7. Corporate Structures for Government Functions.
a. Summary.--As the Federal Government continues along the
road of structural change, the demand for more efficient
operations will become more evident. This hearing drew lessons
from effective private and public sector managers on how to
downsize institutions effectively. The hearing also probed
recent proposals to create additional Federal entities (such as
the Air Traffic Control Corporation, the Forrestal Corporation,
and the Bonneville Power Corporation).
b. Benefits.--Learning from the best practices in business
will assist lawmakers and Federal managers to downsize and
streamline institutions effectively, with the least detrimental
impact on vital public services.
c. Hearings.--On June 6, 1995, subcommittee Chairman Horn
called the hearing which focused on the use of corporate forms
of organization, examining various forms of government
corporations and determining what advantages each possesses.
Donald H. Rumsfeld, chief executive officer, General
Instrument Corp., testified about the general concept of using
corporate structure for government functions. Mr. Rumsfeld
testified that in a reorganization, it is essential to question
an agency's mission, and restructure based on that review. If
an agency restructures prior to this review, the effort is
wasted. Mr. Rumsfeld also described several of the successful
restructuring of corporations in which he had been involved.
Roger W. Johnson, Administrator, General Services
Administration, testified on the reorganization underway at the
General Services Administration. Mr. Johnson noted that the
National Performance Review needs to make more progress, but
this was blocked by risk aversion and governing by process
rather than results. He also suggested that executives with
profit-loss responsibility could be deployed in certain Federal
jobs involved in operations. Johnson also criticized the
capital planning and budget processes and the lack of
incentives to invest in long-term systems to improve operations
and the annual budget process.
Jack Robertson, Deputy Administrator, Bonneville Power
Administration, testified concerning the Bonneville Power
Administration's proposal to become a government corporation.
Mr. Robertson described the competitive forces driving
Bonneville toward a corporate structure, including increases in
compliance costs associated with the Endangered Species Act and
enhanced competition between local power producers.
Daniel V. Flanagan, the Flanagan Consulting Group, Inc.,
testified about the proposed Forrestal Corporation, which would
funnel private sector investments into Federal energy
improvement required by the 1990 Energy Act.
Harold Seidman, senior fellow, the National Academy of
Public Administration, explained the history of the Government
Corporation Control Act of 1945, and the need to update it to
reflect modern realities. Mr. Seidman outlined a ``Government
Enterprise Standards Act'' which would improve oversight over
government corporations. Mr. Seidman described the uses of a
government corporation and the need to have a central body of
expertise to govern the creation of such entities.
Barry Krasner, president, National Air Traffic Controllers
Association, and Jack Johnson, president, Professional Airways
Systems Specialists, testified concerning the proposals to
create an Air Traffic Control Corporation. Both endorsed the
concept of corporatization, but advocated a government
corporation rather than private ownership of such a
corporation.
8. Streamlining Federal Field Structures.
a. Summary.--These two hearings were part of the Making
Government Work Report, see section II.A.1.
b. Benefits.--See Section II.A.1. referenced above.
c. Hearings.--On Tuesday, June 13, 1995, the subcommittee
held its sixth hearing in its ``Making Government Work''
series. The hearing, entitled ``Streamlining Federal Field
Structures'' considered whether the Federal Government's
existing network of field offices is best suited for the
Government's current responsibilities. The hearing further
inquired into the impediments that hinder making field office
networks more efficient.
Subcommittee Chairman Horn noted at the opening of the
hearing that close to a million Federal employees carry out the
daily work of the Federal Government at some 30,000 filed
offices, of which 12,000 have five or fewer employees. He
observed that overlapping and conflicting agency
responsibilities, programs, jurisdictions, and separate offices
have often made an ordinary citizen's contact with the Federal
Government a frustrating experience.
Ranking subcommittee member Carolyn Maloney commented that
over the past 50 years the number of Federal field offices has
proliferated with the initiation of each new Federal program.
She observed that many were set up when transportation and
communications were quite different. She praised the reform
efforts of the National Performance Review recommendations for
field office service improvement.
Mr. Dwight Ink, president emeritus of the Institute of
Public Administration and a fellow of the National Academy of
Public Administration, noted that field structure reforms ought
to be the product of a comprehensive consideration of overall
agency missions and activities. This review should consider
three interdependent dimensions: structures, systems, and
people. The review should also begin with a careful
consideration of the agency's impact on the public. Mr. Ink
noted that agency personnel ought to be well trained and that
field employee grade levels should be increased relative to
headquarters staff.
Mr. Alan Dean, former chairman of the board of trustees and
currently senior fellow of the National Academy of Public
Administration, commented that no single model for field
structure could be applied to all department and agencies. Each
agency, consequently, should design its field offices at every
level to reflect its mission and impact upon the public. Mr.
Dean also testified that agencies needed to decentralize
management to the lowest practicable level in order to achieve
greater responsiveness and best use of resources.
Professor Charles Bingman, of George Washington University,
decried barriers to reform noting that once a program or
activity had been enacted or implemented, all the relevant
interests tend to resist efforts at change. The Federal
Government, as a result, tended to lack the flexibility to
accomplish reorganizations of operating structures.
Mr. Wardell C. Townsend, Assistant Secretary for
Administration for the Department of Agriculture Department,
testified both on the President's Management Council Federal
Field Office Study and the Agriculture Department's own
progress in field office restructuring. He proposed four
general guidelines for field office restructuring. First, where
face-to-face contact is necessary, government presence should
be maintained at the point of service delivery. Second, if
face-to-face contact is unnecessary, communication technology
should be used to upgrade service. Third, back-room operations
should be centralized for efficiency. Fourth, unnecessary
layers of control should be eliminated.
Social Security Commissioner Shirley Chater testified on
her agency's reappraisal of its own field structure. She
reported her intention to reduce the number of its regional
offices from 10 to 5. She also intends to reduce layers of
management and increase the numbers of employees to supervisors
from 1 to 7 to 1 to 15 by 1999. Commissioner Chater said that
the changes were made possible, in part, by a 5-year, $1.1
billion investment in automation.
The Commissioner was followed by Ms. Mary Chatel, the
president of the National Council of Social Security Management
Associations. She presented her organization's plan for
redeploying 30 percent of headquarters and regional office
staff resources into the field. The plan would go farther than
the Social Security Administration's own plan to reduce
management layers.
Lynn Gordon, District Director of the Bureau of Customs in
Miami, FL, and George Rodriguez, Area Coordinator, Department
of Housing and Urban Development presented their National
Performance Review stories. Each were involved in local
initiatives, highlighted by the National Performance Review, to
improve ``customer service'' through enhanced agency
administrative flexibility. Both initiatives also seek to
improve communications with affected individuals and
institutions that are in contact with the agencies.
On June 19, 1995, the subcommittee held the second part of
its ``Streamlining Federal Field Structures'' hearing in
Chicago, IL, at the Chicago Historical Society. Subcommittee
Chairman Stephen Horn, in his opening statement, noted that the
subcommittee had come to Chicago for firsthand answers to four
questions. How should agencies determine their most effective
field structure? How can the management of field offices be
improved? How can closer interagency cooperation in the field
be encouraged? What factors deter agency heads from changing
field structures?
In his opening statement, Representative Michael Flanagan
welcomed the subcommittee to his hometown and his district. He
noted that the hearing would focus on transportation and
infrastructure issues. Representative Flanagan recalled that
the Chicago area had long been a leader in this area, beginning
with its role as a railroad crossroads and extending through
the development of O'Hare as the world's busiest airport.
Mr. William Burke, the Regional Administrator of the
General Services Administration (GSA) for the Great Lakes
Region, reported both on GSA's and the Federal Government's
presence in the area. Mr. Burke also serves as chair of the
Chicago Federal Executive Board. This board coordinates certain
activities of Federal agencies in the region. Among the
initiatives that Mr. Burke described was the ``Cooperative
Administrative Support Unit'' (CASU) program. CASUs are an
effort to hold down administrative costs by sharing overhead
costs among different agencies. He also cited telecommuting
programs as another means to hold down administrative costs.
Gretchen Schuster, Regional Director of the Department of
State's Passport Agency testified on her involvement with the
Chicago Federal Executive Board. She described the board's
efforts in coordinating the work of 154 member agencies in the
Chicago area.
Mr. Joseph Morris, an attorney in private practice in
Chicago, drew upon his prior experience as General Counsel for
the Office of Personnel Management. In addition to recommending
moving more of the Federal Government's work outside
Washington, Mr. Morris advocated better coordination among
field offices through the Federal Executive Boards and more
reliance by the Federal Government on Federal managers in the
field.
A second panel of witnesses, led off by Michael Huerta,
Associate Deputy Secretary of Transportation, covered field
offices involved in transportation and infrastructure programs.
Mr. Huerta explained to the subcommittee his Department's
proposal to reorganize. The plan would combine several
functions into a new Intermodal Transportation Administration,
combining all surface transportation and civilian maritime
functions. In response to questions, he noted that the
Department had yet to determine how the reorganization would
affect regional offices.
Mr. Huerta was joined by Mr. Garrote Franklin, Regional
Administrator of the Federal Aviation Administration, Mr.
Kenneth Perret, acting Regional Administrator, Federal Highway
Administration, and Mr. Donald Gismondi, Deputy Regional
Administrator of the Federal Transit Administration. The
regional officials discussed the cooperation among the various
components of the Transportation Department located in Chicago.
They noted that changes in Federal transportation grant process
resulting from the Intermodal Surface Transportation Act of
1991 had necessitated even more cooperation than had been the
practice in the past.
Col. Richard Craig, Commander and Division Engineer, North
Central Division of the Army Corps of Engineers, described the
current distribution of responsibility within the Corps among
district, division and headquarters offices. The headquarters
is primarily responsible for budget and broad policy issues,
the division offices provide contact with State and local
officials, program management and quality assurance. In
response to questions, Col. Craig discussed the Corps'
coordination with local governments on environmental regulatory
issues.
9. Performance Measurement, Benchmarking, and Re-engineering.
a. Summary.--Performance measurement uses indicators and
measures to assess how well a program or organization is doing
in terms of its mission, goals, and objectives. It focuses on
results and outcomes, not processes or compliance. The
indicators used are inputs, outputs, and outcomes. Inputs are
dollars or time expended, outputs are the quantity and quality
of services delivered, and outcomes are the quality and
quantity of the results the outputs achieved. Measures are
benchmarks to evaluate the indicators, such as a percentage
increase or decrease.
Performance measurement is necessary for benchmarking,
which is the measuring of performance against some actual or
desired standard of achievement, to be successful. Re-
engineering involves examining how a program or organization
works, followed by improving performance by redesigning work
processes.
b. Benefits.--Developing strategic plans that include
performance goals, and measuring and monitoring performance on
an ongoing basis, improves the quality of the activities
performed or services rendered, contributes to greater
efficiency, and can help to offset reductions in funding.
Focusing on results rather than on inputs will lead to
improvement in managing government operations.
c. Hearings.--On June 20, 1995, the subcommittee convened a
hearing on performance measurement, benchmarking, and re-
engineering. It received testimony from witnesses representing
States and think tanks.
Representative Bass opened the hearing by stating that the
subcommittee would examine performance measurement, bench-
marking, and re-engineering and learn how the private sector,
other countries, and State governments are using these
techniques to respond to the needs of their customers, boost
the quality of their products and services and lower costs.
Mr. Donald Kettl, professor of public affairs and political
science, University of Wisconsin, and the LaFolette Institute
of Public Affairs, and nonresident senior fellow, the Brookings
Institute for Public Management, stressed that performance
measurement offers the potential to measure success in terms of
results produced. It requires a long-term view. Performance
measurement is about communication and management, not number
crunching. Citizens can find out how tax dollars are delivering
and Congress can find out how programs are producing. It is
very difficult to measure outcomes, easier to measure outputs.
Mr. Harry P. Hatry, director, State and local government
research programs, the Urban Institute, had three
recommendations for Congress: seek and use information on
program quality and outcomes; coordinate among authorizing,
appropriations and oversight committees to review agency
performance information; and encourage State and local
governments to measure performance in terms of quality and
service to the public.
Mr. Herbert N. Jasper, senior associate, McManis
Associates, Inc., cautioned that performance measurement is not
a panacea, there are pitfalls such as gaming by selecting safe
targets, selecting data because it is readily available, even
if irrelevant, and ignoring the fact that it is labor-
intensive. He indicated that performance budgeting seeks to
make budget decisionmaking more analytical and objective.
However, the budget process is highly political and decisions
will not always be made objectively. He called re-engineering
the systematic application of common sense and described its
basic steps.
Mr. Johnny C. Finch, Assistant Comptroller General, General
Government Division, GAO, reported that GAO studies on reform
efforts show four actions to be critical if performance
measurement is to be used effectively to improve programs:
focus on mission and desired results; involve key stakeholders;
develop performance measurement systems that have certain
characteristics to provide relevant performance information for
program managers, staff, and other decisionmakers; and use
performance information in the selection and use of process
improvement techniques that will further enhance performance.
He emphasized that the number of measures chosen should be
limited to significant ones.
Ms. Linda Kohl, director of Minnesota Planning, described
the comprehensive statewide benchmarking project known as
Minnesota Milestones. It involved three stages. The first asked
Minnesotans to decide on a long-term vision for the State. The
second saw the development of measurable indicators called
``milestones'' which are clear, valid, associated with
available data, accurate, and outcome-based. The third phase
involved soliciting feedback on the indicators. In her opinion,
benchmarking and the Milestones can be a tool to assure
accountability for block grants.
Ms. Sheron Morgan, Office of State Planning, North
Carolina, discussed North Carolina's use of performance
measurement, known as Performance/Program Planning and
Budgeting (P/PPB). It links policy and budgeting and shifts
accountability from efforts to results. She mentioned the need
for evaluation, analysis and agency buy-in for successful
implementation of P/PPB, and for senior management involvement.
Mr. Joseph G. Kehoe, managing partner, government services,
Coopers and Lybrand, LLP, described activity-based costing
(ABC). He explained how ABC can be used to determine how much a
service or activity truly costs and the usefulness of value
analysis in ABC. Significant savings can be found with no
associated reduction in quality when managers focus on
activities and processes and eliminate the ones which do not
add value.
Ms. Laura G. Longmire, national director of benchmarking,
KPMG Peat Marwick, LLP, in discussing benchmarking, performance
measurement, and business process re-engineering, made it clear
that the key issue in adopting these techniques is enhancing
accountability. She said that processes must be measurable to
be improved. In her opinion, all processes can be measured both
in terms of quality and response time. Successful projects
share common themes: long-term scope; management commitment;
investment in technologies and tools; and constant
communication. The culture has to become one focused on results
rather than compliance.
10. Agency Initiatives To Implement the Government Performance and
Results Act of 1993.
a. Summary.--The Government Performance and Results Act of
1993 required agencies to evaluate their missions, goals, and
objectives; develop strategic plans and performance measurement
systems, set goals, and then evaluate results in the context of
those goals. Strategic plans are due by September 1997, annual
performance plans beginning in fiscal year 1997, and annual
performance reports, beginning in the year 2000. The
performance plans must include performance goals for agency
program activities, and performance indicators that will be
used to measure performance. OMB designated a series of pilots
for fiscal years 1994 through 1996 in performance planning and
reporting. A second set of at least five pilots will focus on
managerial flexibility and accountability for fiscal years 1995
and 1996.
b. Benefits.--Using performance measurement will change the
focus of management from process and inputs to results and
outcomes, increase efficiency and reduce costs by eliminating
nonvalue-added activities.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
by summarizing the series of hearings on ``Making Government
Work''. This final hearing in the series focused on the
administration and its success in implementing the GPRA.
Mr. John A. Koskinen, Deputy Director for Management,
Office of Management and Budget, gave an update on the
administration's progress, saying that the pilot project stage
is valuable because it provides time for experimentation. There
are over 70 pilot projects in the first stage, none as yet in
the second. OMB's aim is to integrate GPRA information into the
budget and NPR processes.
Mr. Johnny C. Finch, Assistant Comptroller General, General
Government Division, GAO, suggested that there were five
challenges for agencies preparing to implement the GPRA:
developing and sustaining top management commitment; building
the capacity within the agencies to implement GPRA and use
performance information; creating incentives to implement GPRA
and change the focus of management and accountability;
integrating GPRA into daily operations; and building a more
effective congressional oversight approach. He thought the
hearing was an important first step in communicating to the
agencies the importance to Congress of performance-based
management.
Dr. Paul C. Light, director, public policy program, the Pew
Charitable Trusts, described the three types of accountability
system, compliance based, capacity based, and performance based
and these are not compatible, so changing from the compliance
based system predominant in the administration currently to a
performance based system will be difficult. He also discussed
``thickening'' of government, how it affects results, and how
it can be reversed. He suggested getting rid of one-to-one
spans of control and abolishing regional office layers.
Dr. R. Scott Fosler, president, National Academy of Public
Administration, thought GPRA could be a critical tool in
improving government performance, if properly understood and
effectively implemented. GPRA changes the focus from inputs to
results. Success of GPRA depends on leadership from the
executive branch and support from Congress. He questioned
whether the capacity was there in the agencies for GPRA
implementation and suggested that GPRA implementation may lag
behind schedule.
Mr. Anthony A. Williams, then-Chief Financial Officer of
the U.S. Department of Agriculture, is responsible for
coordinating GPRA implementation and testified on Forest
Service efforts which constitute one of eight USDA pilots. He
described how it had developed a set of 8-10 outcome-oriented
corporate performance measures and the All Resources Reporting
System, an integrated financial and reporting system which
tracks both output- and outcome-related accomplishments.
Performance measurement is achieved through a Management
Attainment Report. He mentioned that good cost accounting
systems are necessary to capture the cost of achieving
outcomes, and that it is important to provide incentives to
build management support for GPRA.
In his testimony, Vice Admiral Arthur E. (Gene) Henn
described the Coast Guard's pilot project which was distilled
from a business plan developed in the Vice Admiral's office. It
is one of four pilots in the Department of Transportation. He
described the process as using a simple formula to get the
desired outcomes, set goals, empower, manage risks, and measure
activities. He emphasized the need to get ``buy-in'' from
everyone involved in the project and encouraged the
subcommittee to review the reports sent to Congress by the
agencies.
Mr. Joseph Thompson, Director, New York Regional Office,
U.S. Department of Veterans Affairs, testified on the status of
the implementation of GPRA in the New York regional office of
the VA, which is also an NPR reinvention lab. Organization was
changed from a hierarchical model to a self-managed team
structure; the step process was reduced from 30 to 20. He
praised the GPRA as a tool for organizational improvement.
Colonel F. Edward Ward, director of field offices, Defense
Finance Accounting Service, reported on the Air Combat Command
(ACC) GPRA pilot. ACC is involved in the performance
measurement pilot now and hopes to take part in the performance
budgeting pilot in 1988. He described how ACC had developed a
cost accounting methodology to track costs per unit of output
and capture cost associated with performance measures, the Job
Order Cost Accounting System II. He stressed the need to link
goals and performance measures, for measures to be quantifiable
so that costs can be linked to the performance indicators, and
to track areas important to the ACC's mission, not just areas
that are easy to measure.
11. The General Services Administration's (GSA) Security Measures at
Federal Office Buildings.
a. Summary.--On April 19, 1995, a bomb destroyed the Murrah
Federal Office Building in Oklahoma City, killing 168 people,
including 19 children, and injuring over 600 people. As a
result of the bombing, security procedures were tightened and a
thorough review conducted of security at Federal office
buildings. In 1988, the Congress passed Public Law 100-440,
which mandated that officer strength of the Federal Protective
Service (FPS) be augmented by not less than 50 officers per
year until a strength of 1,000 was reached. Instead, FPS
personnel were reduced gradually to less than 400.
b. Benefits.--This hearing, part of the subcommittee's
ongoing activities relating to oversight of the GSA, revealed
that GSA had not complied with Public Law 100-440. By
identifying the barriers to improving workplace security,
including low pay, inadequate recruitment, and the extension of
buyouts to security personnel, the subcommittee pointed out
methods for remedying the situation.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on May 3, 1995, to examine GSA's security measures at Federal
office buildings in the aftermath of the terrorist attack on
the Oklahoma City Federal Building.
Mr. Roger Johnson, then-Administrator, General Services
Administration (GSA), testified as to GSA's initial response to
the Oklahoma City bombing, and spoke about follow-up security
measures to protect the Federal worker.
Mr. Kenneth Kimbrough, then-Commissioner, Public Buildings
Services, GSA, noted that Federal Protective Service officers
were understaffed at the time of Oklahoma City with only 409
positions filled. Mr. Kimbrough added that a 1988 law mandates
that the Federal Protective Service shall be not less than
1,000 officers. GSA under the current and previous
administrations were not in compliance with this law.
Mr. Gary Day, Assistant Commissioner for Federal Protective
Services, Public Building Service, GSA, echoed Mr. Kimbrough's
remarks and added that low pay and compensation have hindered
the Federal Protective Service's ability to hire and retain up
to its authorized complement of 1,000 officers.
Ms. Faith Wohl, Director, Family Workplace Institute, GSA,
testified that GSA has taken numerous preventive measures to
deter kidnaping and child abuse in Federal child care
facilities, but that it was not in GSA's experience to expect a
terrorist attack.
Ms. Julia Stasch, Deputy Administrator, GSA, testified as
to the competence of contract security officers. Ms. Stasch
noted that officers were well trained and worked in concert
with local law enforcement forces.
Ms. Emily Hewitt, General Counsel, GSA, was questioned
about whether she had performed a compliance audit to determine
which laws GSA was not complying with. Ms. Hewitt had not
performed such an audit. Subcommittee Chairman Horn recommended
that administration orientation for new agency heads include
such an audit.
12. Controls Over Illegal Immigration--Along the Border and Within the
Interior.
a. Summary.--In 1993 and 1994, Congress voted to increase
funds available to control immigration at the border, and
increase the numbers of Border Patrol officers by 6,000. As
these officers are deployed, the subcommittee remained
interested in determining how they were being used, and how
they were being divided amongst border duty and interior duty.
b. Benefits.--This hearing shed light on the problems faced
by State and local officials as a result of Federal policies on
illegal immigration. Moreover, the lack of intergovernmental
coordination and Federal agency attention to the concerns of
local government brought into relief the frustration of local
officials: They have neither the policy levers to stop
immigration, nor control of the Federal tools to minimize the
impact, but still must bear the cost of criminal justice,
health, and education related to illegal immigration.
c. Hearings.--On June 12, 1995, the subcommittee held a
hearing to explore the resources that should be used to control
illegal immigration at the border and within the interior of
the United States. Witnesses included California State and
county officials and officials from the Immigration and
Naturalization Service (INS). Subcommittee Chairman Horn called
the hearing to examine what resources should be deployed to
control illegal immigration at the border and the interior.
Mr. Daniel E. Lungren, attorney general, State of
California, testified on the impact of illegal immigration on
California's prison population and crime problem. Mr. Lungren
noted that the dramatic costs involved with illegal immigration
drains California tax dollars.
Mr. Bill Jones, secretary of State of California, noted
that the Motor-Voter Act increases the opportunity for a large
number of people to participate in the political system.
However, Mr. Jones voiced concern that a number of illegal
immigrants would also participate unless California is allowed
to take preventive steps.
Mr. Gustavo de la Vina, Director, Western Region, INS,
testified that the INS has developed a comprehensive
immigration enforcement strategy that consists of border
enforcement and management, work site enforcement and
verification, detention and removal of criminal and deportable
aliens, and customer service and assistance to States. Mr.
Richard K. Rogers, Western Region, Los Angeles District, INS,
testified on a new L.A. initiative which will enable employers
to become fraudulent document experts. Mr. Johnny N. Williams,
Chief Patrol Agent, INS Border Patrol Sector Headquarters (San
Diego), testified on the cooperation that his agency has
received from State and local law enforcement agencies. Mr.
Williams noted that the Border Patrol's interdiction rate has
steadily increased.
Mr. Frank Ricchiazzi, assistant director of research,
California Department of Motor Vehicles, testified on
California policy and technological initiatives designed to
improve their ability to provide secure, authentic and durable
driver's licenses and ID cards.
Mr. Timothy J. Staffel, chairman of the board of
supervisors, county of Santa Barbara, noted that local and
county governments bear the brunt of costs associated with
illegal aliens in California. For example, Mr. Staffel asserted
that one in five births in Santa Barbara County were to illegal
alien mothers whose deliveries were funded by Medicaid.
Mr. Jim Thomas, sheriff, county of Santa Barbara, voiced
concerns about the large number of illegal aliens in California
jails, the increase in the illegal criminal element in narcotic
and gang investigations, and the lack of effective illegal
employment investigations.
Mr. Thomas W. Sneddon, Jr., district attorney, county of
Santa Barbara, described the responsibilities of the
Immigration and Naturalization Service, the U.S. attorney's
office and the Social Security Administration and the level of
assistance given by those offices to local government. Mr.
Sneddon faulted the Social Security Administration for not
providing information to local government to assist in crime
control by identifying illegal aliens.
13. Budget and Financial Information--Annual Shareholders Report: How
Does the Citizen Know What Is Going On?
a. Summary.--Under the terms of the Congressional Budget
Act, Congress passes a budget resolution outlining aggregate
levels of discretionary spending and targets for
reconciliation. Lacking from the annual budget process is a
review of the total financial liabilities and assets of the
Federal Government. The hearing examined ways to improve
information to bring liabilities totaling trillions of dollars
under the discipline of an annual budget.
b. Benefits.--Increased public accessibility would enhance
the Federal Government's accountability and demonstrate that it
is fulfilling its stewardship duty to the American public. The
hearing gave attention to the absence of important financial
information in the budget process. It is important to regularly
review this additional financial information and begin
incorporating it into the annual budget process.
c. Hearings.--Subcommittee Chairman Horn called the hearing
on July 11, 1995. The hearing focused on information on the
financial health of the Federal Government available to private
citizens, and options for improving access to that information.
At the hearing, testimony was received from witnesses from the
General Accounting Office, the Office of Management and Budget,
Citizens for Budget Reform, and America Report.
Mr. Gene Dodaro, Assistant Comptroller General, Accounting
and Information Management Division, General Accounting Office
(GAO), noted the importance of having solid budgetary and
financial information when making crucial policy decisions. Mr.
Dodaro noted shortcomings in financial management, but asserted
that progress in improving financial reporting was occurring as
a result of the Chief Financial Officers Act and the creation
of the Federal Accounting Standards Advisory Board (FASAB).
Mr. Don Chapin, Chief Accountant, GAO, updated the
subcommittee on the activities of FASAB. According to Mr.
Chapin, FASAB is developing standards for reporting financial
information which will allow Congress to improve its ability to
provide oversight of Federal operations. Mr. Chapin noted the
possibility that agencies might not be able to make operational
the standards recommended by FASAB.
Mr. G. Edward DeSeve, Controller, Office of Federal
Financial Management, Office of Management and Budget, focused
on three areas: the integration of the budget formulation and
execution process with financial standards; the role of
performance and program integrity in budgeting and financial
management; and streamlining current reporting procedures.
Mr. Harrison Fox, president, Citizens for Budget Reform,
testified on the importance of including non-budgetary
financial information in the annual budget process, to give
greater attention to the deteriorating financial position of
the Federal Government, as measured by the USA Report published
by Citizens for Budget Reform. Mr. Fox advocated adoption of a
financial plan to improve accessibility of information, risk
assessment, and measuring outcomes and results.
Mr. Brecht, publisher, America Report, testified about his
project to make clear to citizens the financial health of the
government in America Report, which is modeled on corporate
annual reports. Mr. Brecht advocated a clearer vision of where
the United States is headed, the role the Federal Government
should play, and clarifying the core values which will guide
these efforts. He also suggests that every agency be required
to communicate its goals to citizens in an understandable
fashion.
14. The Inspector General Act of 1978.
a. Summary.--On Tuesday, August 1, 1995, the subcommittee
held an oversight hearing of the Inspector General Act of 1978.
Inspectors General (IG's) are charged with protecting the
integrity of Federal programs and resources. Through their
audits and investigations, Offices of Inspectors General
(OIG's) seek to determine whether program offices, contractors,
Federal workers, grantees and others are conforming with
regulations and laws.
Since the IG Act first established Inspectors General in
1978, the number of departments and agencies with IG's has
grown to 61. Of these, 29 IG's are Presidentially appointed and
subject to Senate confirmation. Another 32 IG's in smaller
agencies are appointed by their agency heads. Presidentially
appointed IG's have staffs totaling about 10,000 employees,
with budgets adding to $900 million. Last year IG's' findings
led to more than 14,000 successful criminal and civil
prosecutions, $1.9 billion in investigative recoveries, and $24
billion in recommendations that agency funds be better used.
Presidentially appointed IG's sit on the President's Council on
Integrity and Efficiency (PCIE), chaired by the Deputy Director
of the Office of Management and Budget; agency appointed IG's
are on the Executive Council on Integrity and Efficiency
(ECIE).
To assure their independence, the IG Act gives them
latitude in running their offices. They report directly to
agency heads when identifying serious shortcomings, and
directly to Congress in semiannual reports. IG's are
effectively the only executive branch officials reporting
directly to Congress without the need for clearance. They
historically have been vigilant in protecting their autonomy,
and this has led to differences with their bosses on issues of
resources, staffing, and priorities. Critics have argued that
IG autonomy has made them less responsive to management's
legitimate need to use its audit and program evaluation
function for managing agency operations. Also at issue is that
IG's ``compliance'' orientation may lead to adversarial
relationships between them and their agency managers.
The National Performance Review (NPR) has led to a
reappraisal of the IG mission. The NPR advocated that IG's
broaden their focus ``from strict compliance auditing to
evaluating management control systems.'' The NPR further argued
that the IG compliance focus stifled agency innovation. IG's
have answered, in part, with a vision statement that commits
them to greater cooperation with program managers to strengthen
operations.
The PCIE is working on procedures for acting on allegations
of OIG impropriety. The FBI would investigate criminal
complaints, but the process is less clear on how to address
non-criminal complaints, which might allege malfeasance or
equal employment opportunity violations. The Associate FBI
Director for Investigations usually serves as chair of the
PCIE's Integrity Committee.
The Federal Government's reliance on information technology
systems raises several issues for IG's. GAO, for example,
concluded that ``seriously inadequate automated financial
management systems are currently the greatest barrier to timely
and meaningful reporting'' at Federal agencies. Weak automated
systems are more vulnerable to fraud, and they reduce
management's ability to monitor operations.
IG's have a stake in developments affecting Federal
financial management. The Chief Financial Officer Act (CFOA)
requires agencies to have audited financial statements
beginning for fiscal year 1997. OIG's will perform most agency
audits. Under the Government Performance and Results Act (GPRA)
agencies will develop performance measures for agency
management and eventually use the measures for allocating
budgets.
b. Benefits.--The IG's work reduces fraud, waste, and abuse
in the Federal Government and contributes to improvement in
efficiency and effectiveness of agency operations. The
independent status of the IG's renders their opinions more
objective, and therefore of greater value to lawmakers and
other reviewers.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
on August 1, 1995, stating that Inspectors General must be
accountable. They should encourage improvement while not
stifling innovation. He noted that the IG Community is working
on increasing their cooperation with management.
June Gibbs Brown, Inspector General of the Department of
Health and Human Services and Vice Chair of the President's
Council on Integrity and Efficiency, noted that the IG's are in
a unique position to help program managers and the Congress
find ways to achieve a more effective and efficient government.
Hubert Sparks, the vice chair of the executive council on
integrity and efficiency and inspector general of the
Appalachian Regional Commission emphasized the unique role and
relationship between IG's and the rest of their organization.
IG's will always be in a position of balancing actions that
will fulfill the requirements of the IG Act and contribute
positively to improve government operations.
In response to a question from Mr. Bass, Ms. Brown disputed
the conclusion of Vice President Gore contained in a National
Performance Review report, from which Mr. Bass quoted, that
``At virtually every agency he visited, the Vice President
heard Federal employees complain that the IG's basic approach
inhibits innovation and risk-taking. Heavy-handed enforcement
with the IG watchfulness compelling employees to follow every
rule, document every decision, and fill out every form has had
a negative effect in some agencies.'' Ms. Brown stated that
very little of the IG resources are really directed internally
to people filling out forms or doing that last ``i''-dotting.
Ms. Valerie Lau, the chairman of the PCIE audit committee
and the Inspector General of the Department of the Treasury
testified on the ``substantial'' new audit responsibilities
imposed on the Inspectors General as a result of the Chief
Financial Officers Act. She commented on the inherent
difficulty of the audits.
Mr. Frank DeGeorge, Inspector General of the Commerce
Department, reported on his office's experience with
information technology evaluations. He testified that system
acquisitions at Commerce are often disorganized and ad hoc.
Mr. William Esposito, Deputy Assistant Director, Criminal
Investigative Division, Federal Bureau of Investigation and
chairman of the PCIE's integrity committee, reviewed the
process for considering allegations of wrongdoing against
Inspectors General. He noted that revisions to the policy were
currently under consideration.
Mr. Charles Dempsey, former vice-chair of the PCIE and
former Inspector General of the Department of Housing and Urban
Development thought the IG Act was the best piece of public
administration legislation in the last 20 years.
Mr. Sherman Funk, former Inspector General of the
Departments of State and Commerce, also commented on the
balancing act that the Inspectors General perform. He disputed
the contention, which he attributed to his fellow witness Paul
Light, that IG's are too often focused on peripheral issues
rather than concerned with the performance of the activities
for which they were responsible.
Dr. Paul Light, Pew Charitable Trusts, recalled the
observation from his book, Monitoring Government that the
Inspectors General were not sufficiently focused on prevention.
He was of the opinion that the IG's hide behind the Yellow Book
too frequently when it comes time to give meaningful advice to
their departments and agencies on how they might prevent
mistakes before they happen.
Mr. Dwight Ink, president emeritus, Institute of Public
Administration, observing that he testified from the
perspective of his experience as a program manager, urged a
narrower focus for the IG's. He testified that because program
managers are held accountable for program outcomes, they ought
to have their own resources for ensuring the integrity of the
programs for which they are responsible.
15. Implementation of the Chief Financial Officers Act of 1990 and the
Government Management Reform Act of 1994.
a. Summary.--The Chief Financial Officers (CFO) Act of 1990
required agencies to have audits of revolving funds, trust
funds and all funds that resembled commercial enterprises. The
1994 Government Management Reform Act (GMRA) extended the CFO
requirements to cover all agency resources, with agency-wide
audited financial statements due in March 1997, and Federal
Governmentwide audited financial statements due in March 1998.
b. Benefits.--Audited financial statements improve the
quantity and quality of information provided to users of
financial statements, allowing better decisionmaking concerning
the allocation of scarce resources. Requiring agencies to
prepare and have audited their financial statements requires
them to strengthen their internal controls over waste, fraud
and abuse, and enhances the reliability of the information
contained in the financial statements. In all, the result for
the executive branch will be greater efficiency and
effectiveness of agency operations.
c. Hearings.--Subcommittee Chairman Horn opened the hearing
held on July 25, 1995, by stating that audited agency financial
statements will minimize weak management controls, fraud and
waste. The goal of each agency must be to produce a full
statement on time and get an unqualified or ``clean'' opinion
on the statement.
Mrs. Maloney, in her statement, said that quick action was
necessary to ensure compliance with the laws and stressed that
there should be no delay in meeting the deadlines for audited
financial statements.
Mr. Charles A. Bowsher, Comptroller General of the United
States, described the progress made by the 24 agencies of the
executive branch in implementing the CFO Act and the GMRA and
stressed that proper accounting and financial reporting leads
to much better barriers against fraud, waste, and abuse.
Mr. G. Edward De Seve, Controller, Office of Federal
Financial Management (OFFM), Office of Management and Budget
(OMB), discussed the role of the Federal Accounting Standards
Advisory Board in developing Federal accounting standards. He
hopes these will be available in time to be used for the fiscal
year (FY) 1996 agency audited financial statements and the
fiscal year 1997 Governmentwide audited financial statements.
Mr. Gerald R. Riso, fellow of the National Academy of
Public Administration and former Associate Director for
Management and Chief Financial Officer, OMB, provided a
historical perspective of the development of the CFO Act. In
his view, the CFO Act has improved Federal financial management
in many agencies, although the rate of progress in system
improvement has slowed down.
Mr. Edward J. Mazur, vice president for administration and
finance, Virginia State University, and former Controller,
OFFM, OMB, had several recommendations to strengthen the CFO
Act, for instance the Controller of OFFM should report directly
to the OMB Director, and that agencies should establish audit
committees.
Mr. Harold I. Steinberg, former Deputy Controller, OFFM,
OMB, testified on four aspects of the CFO Act: its genesis and
initial funding; agency CFO structures and appointments,
financial management staffing; and the preparation of audited
financial statements. In his opinion, agencies derive the real
benefit from being audited from going through the process of
preparing the financial statements, because they learn about
and can correct weaknesses in their accounting and financial
reporting systems.
Mr. Buel T. Adams, vice president and treasurer, CBI
Industries, representing the Financial Executives Institute,
described the state of fiscal affairs of the Federal Government
as ``woefully inadequate'', especially with respect to
financial management systems. He said that management
accountability must be improved and that taxpayers should hold
Congress accountable for ensuring that their tax dollars are
being spent efficiently.
Mr. Thomas V. Fritz, president and chief executive officer
of the Private Sector Council, listed benefits from audits
required by the CFO Act: savings; knowledge about internal
control and information systems problems; and clearer, more
accurate and useful information about an agency's financial
condition.
Mr. Anthony A. Williams, then-Chief Financial Officer
(CFO), U.S. Department of Agriculture, described USDA's
accomplishments in financial management, including procurement
reform, developing cost management techniques, oversight of the
National Finance Center, and the Financial Vision and Strategy
project.
Mr. Alvin Tucker, Deputy CFO, Department of Defense,
described steps the Department of Defense is taking to try to
ensure that the goals of the CFO Act can be attained.
Mr. Dennis Fischer, CFO, General Services Administration,
described GSA's approach to CFO Act compliance. GSA is one of
only four agencies that routinely receive unqualified opinions
as a result of agency-wide audits. He credited GSA's success on
having implemented the fundamental aspects of good financial
management: CFO organization and responsibility well defined
and strong controllers in place in major program areas such as
the Public Buildings Service, Federal Supply Service, and
Information Technology Service.
Ms. Bonnie Cohen, Assistant Secretary for Administration
and CFO, Department of the Interior, stressed the advantages of
having responsibility for both budget and finance functions,
and predicted that, with increased use of performance
measurement, the link between budget and finance will become
even stronger.
16. Department of Defense's Financial Management Problems.
a. Summary.--The subcommittee has been examining certain
indications, as expressed in news articles and in congressional
hearings, of the Department's lack of ability to control
problem disbursements, specifically negative unliquidated
obligations and unmatched disbursements, as well as contractor
overpayments which the Department of the Navy took years to
recover. Additionally, as part of the ongoing subcommittee
review of the Chief Financial Officers Act of 1990 and the
Government Management Reform Act of 1994, it appears that the
Department of Defense (DOD) will be unable to comply with the
requirements of the GMRA for a considerable number of years,
until they implement modern accounting and financial systems
that currently they lack.
Recent articles in the national press and other hearings on
Capitol Hill have highlighted serious shortcomings in the
Defense Department's financial management systems. The
Washington Post reported that, in the past 10 years the
Department of Defense had spent $15 billion that it could not
account for. Contractors are routinely overpaid millions of
dollars and are sometimes stonewalled when they try to give the
money back. The systems are antiquated and make it difficult
for staff to do their work accurately. The CFO Act of 1990
required the preparation and audit of financial statements for
the Departments of the Army, the Air Force and 22 funds. Out of
24 parts of DOD examined in fiscal year (FY) 1994, only 1, a
minor fund, received an unqualified opinion. Most were either
not audited or received a disclaimer, meaning that the
statements were not auditable, and therefore not in compliance
with the CFO Act.
b. Benefits.--The hearing addressed areas of needed
improvement in financial management at the Department of
Defense. If the millions of dollars that have been reported as
overpayments to contractors had been used for necessary
expenses, the Department would have been able to improve its
readiness at a lesser cost than at present.
c. Hearings.--A hearing was convened on November 14, 1995,
to examine the Department of Defense's compliance with the
Chief Financial Officers (CFO) Act of 1990 and the Government
Management Reform Act of 1994. Subcommittee Chairman Horn
opened the hearing by saying that strong financial management
was needed and that the hearing would focus on what the
Department was doing to strengthen its management control.
Mrs. Maloney echoed Mr. Horn's statements and emphasized
the need to follow generally accepted accounting principles
(GAAP), citing the example of the improvement in the city of
New York's fiscal situation after it adopted GAAP.
Mr. John Hamre, Comptroller, Department of Defense,
responded to the criticisms in the May 14, 1995 Washington Post
article, and asked that the letter he had sent to Hon. Bill
Young, chairman, Subcommittee on National Security, Committee
on Appropriations, dated May 22, 1995, be included in the
record. He gave his perspective on how DOD was doing in reform
and improvement of financial management, and emphasized DOD's
commitment to consolidate its accounting systems, and resolve
the longstanding problem of unmatched disbursements.
Mr. Richard Keevey, director, Defense Finance Accounting
Systems, in answer to a question from subcommittee Chairman
Horn as to how he would rate the DOD, on a scale of 1 to 10,
with 10 being closest to getting clean audit opinions, he rated
the Department as a 3.
Mr. Alvin Tucker, Deputy CFO, DOD, discussed DOD problem
disbursements, specifically the unmatched disbursements problem
and overpayments to contractors. He then described DOD's plans
for financial management reform. He stated that the overarching
problem preventing an unqualified or qualified opinion on the
DOD's financial statements is that the accounting systems which
support the financial statements do not have an integrated
general ledger or produce account-oriented transaction files,
but gave no timetable for implementing a transaction-driven
general ledger system.
Mr. G. Edward DeSeve, Controller, Office of Federal
Management, Office of Management and Budget, testified that OMB
has been helping the Department of Defense move toward meeting
the requirements of the CFO Act as set out in OMB Circular A-
127, Financial Management Systems (the Circular). OMB has
recommended that DOD look outside of its own current financial
management structure for system solutions, rather than building
on the best of the in-house systems, since 76 percent of them
do not meet the Circular's requirement to be consistent with
the U.S. Standard General Ledger.
Mr. Gene Dodaro, Assistant Comptroller General, General
Accounting Office, gave the GAO's perspective on the challenges
facing the DOD in meeting the objectives of the CFO Act. He
stated that CFO Act audits have brought greater clarity to
DOD's financial management problems. Progress is slow.
According to a recent DOD IG report, general fund financial
statements will remain unadaptable until September 1998 and the
DOD IG will not be able to render an audit opinion on any of
the services until the year 2000 at the earliest. He suggested
the establishment of an independent, outside board of experts
to aid in reform efforts.
Ms. Helen T. McCoy, Assistant Secretary of the Army,
described the improvements the Department of the Army has made
in implementing the Chief Financial Officers (CFO) Act. The
Army has prepared agency-wide audited financial statements as a
pilot under the CFO Act since fiscal year (FY) 1991 but the
auditors have been unable to express an opinion on the
reliability of the financial statements because the accounting
systems that provide the information for the statements do not
have an integrated general ledger or produce account-oriented
transaction files. The audit opinions, however, did note
significant progress. The management control process has been
restructured, and there is a new performance assessment process
within Department of the Army headquarters.
Ms. Deborah P. Christie, Assistant Secretary of the Navy,
discussed the plans that the Department of the Navy has for
financial management improvement. She emphasized the role of
selection, upgrading, and deployment of financial systems. Four
key activities in improving Navy financial operations are:
organizing the Department, consolidating finance and accounting
services in DFAS, standardizing and upgrading accounting
systems, and improving the feeder systems and the quality of
the data they contain. The final step will be to ensure the
input of accurate data through modern feeder systems and a
system of internal controls to provide sound financial
information for internal decisionmaking and external reporting.
Mr. Robert F. Hale, Assistant Secretary of the Air Force,
discussed the progress the Department of the Air Force had made
under his leadership. He has set up the Financial Improvement
Policy Council, which works with senior Air Force and DOD
leaders, and with organizations within the DOD such as DFAS and
DBOF, the Financial Management Steering Committee, and the
Senior Financial Management Oversight Council. He has called on
the GAO and the Financial Executive Institute for advice and
guidance on how to improve financial management. As a result,
the Air Force has asked for assistance from Coopers and Lybrand
and Electronic Data Systems in the area of systems
certification and performance indicators. The Air Force is
concentrating its efforts in the critical areas of inventory
management, automated data processing security, internal
controls, and streamlining the financial management process.
Ms. Eleanor Hill, Inspector General, DOD, provided an
assessment of the Department's ability to improve its finance
and accounting operations and to comply with the acts. She also
discussed the audit approach devised by the DOD IG's office.
She stated that the financial statement data for the vast
majority of DOD funds remain essentially not in condition for
audit, because of a general lack of effective internal
management controls. Neither the OIG nor the Service audit
organizations were able to give audit opinions on the financial
statements for the largest DOD funds covered by the CFO Act
requirements for fiscal year 1994, funds totaling $715.5
billion. The most fundamental problem was that accounting
systems do not compile and report reliable audit information.
17. Electronic Reporting Streamlining Act of 1995.
a. Summary.--The Paperwork Reduction Act of 1995 included a
number of reforms designed to reduce the burden of government-
imposed paperwork on businesses and households. The Electronic
Reporting Streamlining Act of 1995 would reduce the burden of
regulatory reporting for business by allowing necessary data to
be reported in an electronic format.
b. Benefits.--This will improve the efficiency of Federal
Government operations by allowing electronic filing of the
necessary documents.
c. Hearings.--Subcommittee Chairman Horn held a hearing on
October 10, 1995, which focused on possibility of streamlining
Federal operations, and easing the burden on private firms of
reporting regulatory information, by adopting a scheme for
electronic reporting.
Mr. Thomas Kelly, Director, Regulatory Management and
Information, Office of Policy, Planning and Evaluation of the
U.S. Environmental Protection Agency (EPA) testified concerning
his agency's use of information technology and the various
initiatives related to electronic reporting and dissemination
of information. Many of these initiatives were associated with
the National Performance Review projects.
Mr. Stephen Hanna, assistant for information technology,
California EPA, explained his agency's pilot project for
reporting regulatory information on hazardous waste manifests
and other data required to be reported by private companies.
Mr. Brad W. Lamont, vice president, Romic Environmental
Technologies Corp., testified about his company's role in the
California pilot. Mr. Lamont noted the large number of pages of
data that Romic was required to submit to Cal-EPA, and that
this volume of data was transferred by modem in 45 seconds.
Upon questioning, Mr. Lamont noted the receptiveness of the
Cal-EPA to new electronic reporting initiatives.
Mr. David Roe, senior attorney, Environmental Defense Fund,
noted the role that increased information about toxic release
can play in improving enforcement and community information.
Rose explained the manner in which electronic data in
California eases the work of his organization in maintaining
oversight of environmental data.
Mr. Richard Ferguson, board member and executive director
of Environment and Safety Data Exchange, is a leading expert on
data exchange and standards issues. Mr. Ferguson explained the
rationale for moving toward increased electronic reporting.
According to Mr. Ferguson, the primary reason is that some will
benefit from a reduced reporting burden, and it is those who
must do the work to achieve the standards required for the plan
to work.
18. Use of Transportation by Senior Executive Branch Officials in
Compliance with Federal Travel Guidelines.
a. Summary.--Continuing its oversight investigation and
pursuant to Rules X and XI of the Rules of the House, the
subcommittee has reviewed more than 40,000 documents relating
to travel by senior executive branch officials. A pattern of
neglect, if not abuse, was discovered on the part of some
Federal agencies.
The Office of Management and Budget (OMB), in Circular A-
126, has developed standards for government aircraft use by
senior executive branch officials. These requirements have been
supplemented by a White House Memorandum (dated February 10,
1993) and by OMB Bulletin 93-11. As President Clinton stated in
the Memorandum: ``The taxpayers should pay no more than is
absolutely necessary to transport government officials. The
public should be asked to fund necessities, not luxuries, for
its public servants.''
In addition to covering the use of government aircraft, the
President's Memorandum contains limitations on the use of
regularly scheduled commercial aircraft. It further requires
that travel documentation ``be disclosed to the public upon
request, unless classified.'' The General Services
Administration (GSA) is charged with compiling a semiannual
``Senior Federal Travel Report,'' based on submissions from
Federal agencies. It is incumbent upon the agency to supply
full and accurate data in compliance with travel protocols and
requirements. However, this has not been the case. OMB Circular
A-126 requires the semi-annual publication of specific data in
the Senior Federal Travel Report, published by the General
Services Administration. Two problems exist in the reporting of
senior official travel. First, agencies are frequently late in
submitting completed reports to GSA. Second, agencies do not
always supply all the needed data (specifically, cost to the
government, reimbursable cost), intermediate destinations on
round trip flights are frequently not reported, and costs are
not pro-rated per individual.
Additionally, the published copies of the Senior Federal
Travel Reports are difficult to read and interpret. The
International Civil Aviation Organization (ICAO) codes as
listed in the text of the reports are not parallel to the ICAO
codes as listed in the index. Important data elements are
omitted from the final reports. There is no audit structure
that enables GSA to enforce compliance.
The subcommittee held two investigative hearings to examine
the travel practices of Cabinet Secretaries and other senior
executive branch officials. The first hearing was held on
December 29, 1995, to examine the abuse of travel by Energy
Secretary Hazel O'Leary, former White House staff official
David Watkins, General Joseph Ashy, and the incomplete
reporting by agencies such as NASA.
The subcommittee received testimony from Representative
Barlett regarding his 2 year involvement in examining the use
of government aircraft by senior Federal officials. He became
interested in the abuse of aircraft after David Watkins, at the
time a White House staffer, used a Presidential ``whitetop''
helicopter for transportation to play golf at a Frederick, MD
golf course.
Mr. David E. Williams, research director, Citizens Against
Government Waste, testified about the Citizens Against
Government Waste's longstanding examination of the travel of
Secretary O'Leary. Williams testified among other things that
Secretary O'Leary retains a staff of 14 to handle her
invitations and travel arrangements.
Mr. Peter B. Zuidema, Director, Aircraft Management
Division, Federal Supply Service, General Services
Administration, testified that Federal aircraft can be used
only for official purposes, and only when commercial airlines
are not reasonably available. A cost comparison must also be
performed.
Mr. Dabis B. Buckley, Special Assistant to the Inspector
General, Department of Defense, testified that as a result of
investigations by the Office of the IG, the Department of
Defense has taken steps to tighten its policy regarding the use
of its aircraft.
A second hearing was held on May 16, 1996, to investigate
practices at three executive branch agencies, the Department of
Interior, the Department of Veterans' Affairs, and the
Department of Labor. Testimony was received from Gregory
Walden, counsel, Mayer, Brown & Platt; Bonnie Cohen, Assistant
Secretary for Policy, Management and Budget/Chief Financial
Officer, the Department of Interior; Harold Gracey, Chief of
Staff, Department of Veterans' Affairs; and Patricia Lattimore,
Deputy Assistant Secretary for Administration and Management,
Department of Labor.
Mr. Walden testified that Government travel is something
that is often abused and overlooked. He reiterated subcommittee
Chairman Horn's point that the issues involved are not only
about Government waste, but rather, Government ethics. Walden
placed all travel violations discussed into an ethical context.
b. Benefits.--Misuse of government aircraft and poor
reporting of trips on government aircraft is a serious problem.
Because of the casual reporting standards on the part of most
Federal agencies it is difficult to determine which flights are
in violation of Federal travel requirements. Subsequently it is
difficult to determine how much money can be saved by
eliminating abuse of the aircraft by senior Federal officials.
With continuing congressional oversight, further hearings will
instil some awareness into Federal agency management practices
and that cost consciousness must be a factor in traveling on
Government aircraft.
c. Hearings.--December 29, 1995 a hearing was held
entitled, ``The Use of Government Aircraft by Senior Federal
Officials.'' May 16, 1996, a hearing was held entitled,
``Senior Executive Branch Officials Compliance with Federal
Travel Guidelines.''
19. The Government's Response to the Northridge Earthquake.
a. Summary.--On January 17, 1994, the Los Angeles area was
struck by one of the most damaging earthquakes in the Nation's
history. The earthquake, referred to as the ``Northridge
Earthquake'' resulted in more than 70 deaths, more than 18,000
injuries and caused 25,000 residents to become homeless
overnight. The General Accounting Office (GAO) estimated more
than 55,000 structures were damaged; 1,600 of these were deemed
uninhabitable. The area's freeway system sustained heavy damage
which resulted in closures in a number of locations. Of the
$25-$30 billion losses sustained, FEMA provided relief in the
amount of $3.4 billion, not counting assistance from 27 other
Federal agencies and the American Red Cross.
On January 19, 1996, the subcommittee held an oversight
hearing on the Federal Government's response to the 1994
Northridge earthquake. The focus of the hearing was to receive
testimony on preventive and cost-effective lessons that could
be learned from the earthquake. Testimony was received from
Hon. James Lee Witt, director, Federal Emergency Management
Agency; Hon. Richard Riordan, mayor, city of Los Angeles, CA;
Richard Andrews, director, Governor's Office of Emergency
Services, State of California; Constance Perett, manager,
Office of Emergency Services, County of Los Angeles; Maj. Gen.
Robert Brandt, Assistant Adjutant General and Commander,
California Army National Guard; Donald Jones, vice president
for disaster services, American Red Cross; James Haigwood, CEO,
American Red Cross, Los Angeles Chapter; Terri Jones, director
of special projects, California Community Foundation; John
Suggs, director of public policy and government affairs, United
Way of Greater Los Angeles; Blenda Wilson, president,
California State University, Northridge; Robert Maxson,
president, California State University, Long Beach; and J.
Richard Williams, dean of engineering, California State
University, Long Beach.
Mr. Witt outlined some of the steps FEMA took in the
aftermath of the earthquake and some of the problems
encountered with the recovery effort which included the
distribution of benefits to eligible recipients, errors of
mistakenly giving relief multiple times to the same people and
to ineligible people such as illegal aliens. He acknowledged
that FEMA needed to enhance its effort to work with State and
local governments to promote mitigation efforts.
Mayor Riordan described the efforts taken by the city of
Los Angeles to provide relief from the earthquake, and
suggested that in the future, the Federal Government could
bypass FEMA and the Small Business Administration (SBA) and
allocate disaster relief funds directly to local governments.
This, he argued, would allow for a ``real-time'' relief
process, expediting recovery efforts for victims. He added that
the relief mechanism was not designed to enable localities to
quickly provide assistance to multifamily apartment dwellings.
He noted that SBA loans did not provide relief for multifamily
apartments which sustained damage above the SBA limit of $1.5
million. In addition, FEMA should make a distinction between
commercial and residential units. He also pointed out that
instead of importing temporary relief workers from out-of-
state, FEMA should make a concerted effort to hire local
residents to provide assistance. In response to questioning,
Mayor Riordan proposed that the SBA consider restructuring
loans to allow for the decrease in value due to earthquake
damage.
b. Benefits.--This hearing enabled members of the
subcommittee to learn first-hand the impact of one of the most
damaging natural disasters to ever confront the United States,
and learn how the agencies designed to respond to such crises
fared in their response. The hearing also allowed members to
learn of the efforts underway or planned which would allow
manmade structures to withstand future disasters of this type.
One of the actions taken was the establishment of a 24-hour
disaster information network called the Recovery Channel which
was broadcast on 125 cable television outlets. Another was the
use of computer technology allowing for almost instantaneous
assessments of relief available to victims of the earthquake.
Donald Jones testified that more than 14,000 Red Cross
volunteers responded to the earthquake. The Red Cross has an
agreement with FEMA to provide emergency support services,
including food, shelter, and clothing and spent more than $38
million providing services to victims of the earthquake.
c. Hearings.--A field hearing entitled, ``The Government
Responses to the Northridge Earthquake,'' was held on January
19, 1996.
20. OMB 2000 Reforms: Where Are They Heading?
a. Summary.--In March 1994, the Office of Management and
Budget (OMB) commenced a reorganization intended to make OMB
more effective in serving the President and also how to achieve
the proper balance between its responsibilities for management
practices within the executive branch and its responsibilities
for budget formulation. This reorganization, dubbed OMB 2000,
fundamentally changed the organizational structure of OMB.
Former budget areas were recreated as resource management
offices (RMOs), and the Office of General Management was
abolished. Since the three statutorily required offices--the
Office of Federal Procurement Policy (OFPP), the Office of
Federal Financial Management (OFFM), and the Office of
Information and Regulatory Affairs (OIRA)--were unable to be
abolished, OMB reduced the staffs of these offices and
reallocated staff to the RMOs. In the case of the OFFM, over
half of the authorized staff positions were transferred out.
The subcommittee convened a hearing to review how a reform
initiative, known as OMB 2000, has impacted upon management
practices within the Office of Management and Budget and where
OMB is headed as a result of this reform initiative. The
subcommittee invited the following witnesses to testify at the
February 7, 1996 hearing: Hon. Alice M. Rivlin, Director, and
Hon. John A. Koskinen, Deputy Director for Management, Office
of Management and Budget; Paul L. Posner, Director, Federal
Budget Issues, General Accounting Office; L. Nye Stevens,
Director, Federal Management Issues, General Accounting Office;
Dwight A. Ink, president emeritus, Institute of Public
Administration and former Assistant Director for Management,
Bureau of the Budget and the Office of Management and Budget
(Nixon administration); and Edwin Harper, former Deputy
Director, Office of Management and Budget (Reagan
administration).
In his opening statement, subcommittee Chairman Horn stated
that some experts say that a proper balance between budget and
management has never been achieved at OMB. These experts
question whether it is feasible to integrate the two functions
in one organization, and suggest a solution is to set up a
separate office within the Executive Office of the President,
devoted entirely to management issues.
Ms. Rivlin testified that the premise of OMB was based upon
the notion that management is about using resources
effectively. She asserted that there is not a way to separate
resource management from other management. Prior to OMB 2000,
OMB used a disjointed approach to dealing with both
governmentwide and agency-specific management issues which was
counterproductive.
Dr. Ink testified that the potential for improvement in the
management function within OMB was low because of: the inherent
competition with the budget process; the budget not being
focussed on crosscutting issues; lack of expertise in OMB to
advise agencies on reorganization; lack of emphasis on long-
term investment; and financial management. Consolidation of
management and budget functions limits the capacity of OMB to
provide leadership for reform, and can hinder actions to
prevent abuse. He supported the idea of establishing an Office
of Federal Management within the Executive Office of the
President, but outside OMB.
Dr. Harper defined good management as the efficient use of
resources in pursuit of specific policy objectives, and said
that it would be impossible to deal with improving management
until we can measure government program outputs related to
policy objectives. He questioned whether the manpower resources
assigned to OMB were adequate and whether the statutorily
mandated offices were necessary. He would also approve of a
separate Office of Management, whose head should have cabinet
rank.
b. Benefits.--The new direction chosen for OMB, under the
OMB 2000 initiative, was to make all OMB activities part of a
comprehensive, integrating budget analysis, management review
and policy development. The resource management offices (RMOs)
were set up to implement this. These RMOs are responsible for
budget formulation, program analysis, implementation of
governmentwide policy as formulated by the three statutory
offices, and program effectiveness and efficiency.
Agencies depend on OMB for guidance on implementing
regulations required by new and existing legislation; it shares
responsibility with the Office of Personnel Management for
making sure that agency personnel are trained to perform new
functions, such as those required under the Government
Performance and Results Act. It should be a resource for the
President in management of the executive branch agencies,
drafting Executive orders as required or acting as a guide or
goad, whichever is necessary, to ensure that agencies follow
the administration's policies.
The intent of OMB 2000 was to increase the attention OMB
staff give to management issues. In the opinion of the
committee, as a result of its oversight activities, this has
not happened, and it seems that more drastic action is needed
to ensure that OMB has the capability to advise the executive
branch concerning the complex problems of management facing it.
c. Hearings.--A hearing entitled, ``OMB 2000 Reforms: Where
Are They Heading?'' was held on February 7, 1996.
21. Using the Best Practices of Information Technology in Government.
a. Summary.--Leading corporations use information systems
to remake their organizations and improve performance. Enhanced
communications let these organizations operate with a greatly
reduced hierarchical structure. Fewer middle managers are now
needed between line workers and senior management as
organizations become ``flatter'' and less bureaucratic.
Corporations are using more direct communications links with
customers, suppliers and transporters to shorten delivery
schedules and reduce expensive inventories. Use of cutting edge
information resources at these organizations is often central
to their core business strategies.
Despite the potential of information systems in
strengthening organizations, the Federal Government has lagged
behind in its successful application. Numerous reports have
identified weaknesses with specific Federal Government
information systems. The General Accounting Office has
previously placed many of the Federal Government's largest
information technology systems on its ``high risk series''
listing of specific programs most vulnerable to waste, fraud
and abuse. These have included the Federal Aviation
Administration's air traffic control modernization, the
Internal Revenue Service's tax systems modernization and the
Department of Defense's corporate information management
initiative. Other similar reports, such as the Office of
Management and Budget's high risk list, have identified
additional troubled information systems developments.
The subcommittee convened a hearing to address the problem
of examining how leading private institutions are using
information technology to improve their organizations and to
capitalize on the opportunities available from information
systems. Witnesses testifying were: Peter Huber, senior fellow,
Manhattan Institute, columnist, and author; Chris Hoenig,
Director, Information Management Policy and Issues, General
Accounting Office; Dr. Renato A. DiPentima, vice president &
chief information officer, SRA Corp.; C. Morgan Kinghorn, Jr.,
director, Coopers & Lybrand; John Kost, chief information
officer, State of Michigan; and David R. Brooks, vice
president, Health Care Technology Sector, Science Applications
International Corp.
b. Benefits.--Despite the expenditure of approximately $25
billion per year and $200 billion over the past decade on
information systems, the Federal Government lags behind the
private sector in the effectiveness of its use of new
technology. The Federal Government needs to draw upon the
experience of other organizations that have successfully
harnessed information technologies to be more efficient,
effective organizations. The recommendations made at the
hearing will improve the oversight activities conducted by the
subcommittee.
c. Hearings.--A hearing on ``Using the Best Practices of
Information Technology in Government'' was held on February 26,
1996.
22. Oversight of IRS Financial Management.
a. Summary.--Pursuing oversight issues designated in Public
Law 103-356, the Government Management Reform Act of 1994 and
Public Law 101-576, the Chief Financial Officers Act of 1990,
the subcommittee convened two oversight hearings regarding the
Internal Revenue Service's financial management. The first
hearing examined several aspects of financial management and
addressed the IRS' ability to produce financial statements, to
have these statements audited, and to obtain verification of
accuracy. Testimony was received from: Gene L. Dodaro,
Assistant Comptroller General, Accounting and Information
Management Division, General Accounting Office; Hon. Margaret
Milner Richardson, Commissioner, Internal Revenue Service;
Donald C. Alexander, former Commissioner of the Internal
Revenue Service from 1973 to 1977; Donald L. Korb, former
Assistant to the Commissioner of the Internal Revenue Service
from 1984 to 1986; and Shannon O'Toole, former Resolution Trust
Corporation Department Head and Section Chief of Real Estate
Disposition.
Subcommittee Chairman Horn emphasized in his opening
statement the importance of Congress receiving accurate
information to properly oversee and evaluate the IRS'
performance. In addition, he addressed concerns regarding the
General Accounting Office's inability to give an opinion on
audited IRS' financial statements, and weaknesses of internal
controls and lack of audit documentation.
When GAO auditors review the IRS statements and underlying
records, they were unable to reconcile these records and, thus,
were unable to give an opinion on the financial statements from
fiscal years 1992 through 1995. The audits have identified five
significant problems within the IRS' financial management,
which if not corrected, will preclude future auditors from
rendering an opinion on the IRS's financial statements. They
include the: (1) inability to verify total revenue of $1.4
trillion and the amount of tax returns; (2) unsubstantiation of
the amount of collection from Social Security, income and
excise tax; (3) reliability of reported estimate for FY 1995 of
$113 billion for valid accounts receivable and of $46 billion
for collectible receivable; (4) verficiation of the $3 billion
for non-payroll expenses that the IRS reports; and (5) amounts
the IRS reported as appropriations available for operating
expenditures which cannot be reconciled with Department of the
Treasury's records.
Commissioner Richardson claimed that the IRS has strong
systems and controls to ensure that the individual accounts are
accurate and that they work. She explained that the IRS has two
separate financial processes to track funds: the administrative
system that handles our appropriated funds, and the revenue
system that tracks tax collections. She stated that the current
system the IRS uses, designed in 1994 (2 years after the IRS
started doing service-wide audits as a pilot under the CFO
Act), is not designed to provide the detailed information that
is required by the CFO Act for financial statement
presentation.
Regarding accounts receivable, she described the
improvement in management of the receivables inventory that has
been undertaken by the IRS. They are also stepping up efforts
to increase collection yields. She provided an update on the
status of the private debt collection pilot project, in which
the IRS is contracting out debt collection activities to a
small number of debt collection agencies.
A follow-up oversight hearing was held on September 19,
1996, to further discuss the state of financial management in
the Internal Revenue Service. The hearing addressed whether
there had been any improvement since the first hearing
regarding the IRS' inability to produce reliable financial
statements and the internal controls or the accuracy of data
input. Witnesses testifying included Gene L. Dodaro, Assistant
Comptroller General, Accounting and Information Management
Division, GAO; Steven App, Deputy Chief Financial Officer,
Department of Treasury; and Anthony Musick, Chief Financial
Officer, Internal Revenue Service.
Gene Dodaro gave the subcommittee a status report about the
progress the IRS is making in addressing its financial
management problems. He explained that the IRS has two sets of
financial statements to account for: statements on its revenue
gathering function under its custodial responsibilities,
running at about $1.3 to $1.4 trillion currently; and
statements reporting on the administrative operations paid for
out of appropriations, running at about $8 billion currently.
The IRS has improved in this area, and the auditors were able
to verify the validity of about $5 billion of their $8 billion
in appropriations. However, two problems remain in the
administrative area: Documentation of receipts and acceptance
of goods and services is inadequate; and the cash accounts with
the Department of the Treasury cannot be properly reconciled.
b. Benefits.--IRS financial management impacts
congressional decisionmaking on many levels. The reliability of
revenue and other information gathered by the IRS is of concern
to Congress since the revenues collected by the IRS represent
more than 90 percent of all revenues available to the Federal
Government. The confidence taxpayers have in the IRS to collect
and account for the taxes they pay directly affects the degree
to which they comply with the tax code which in turn impacts
the taxes collected. The efficiency with which the IRS collects
the taxes and other receivables owing to the Federal Government
affects the cost of other Federal programs to the taxpayer.
Subcommittee Chairman Horn introduced H.R. 2234, which is
designed to improve debt collection efforts in the Federal
Government, to include provisions related to the IRS use of
private debt collection agencies.
c. Hearings.--On March 6, 1996, the subcommittee held an
oversight hearing entitled, ``Oversight of the Internal Revenue
Service Financial Management.'' On September 19, 1996, a
follow-up oversight hearing was held entitled, ``Internal
Revenue Service Financial Management: Has There Been Any
Improvement?''
23. Is January 1, 2000 the Date for Computer Disaster?
a. Summary.--After midnight, December 31, 1999, computer
systems throughout the world are at risk of failing. Computers
may confuse the year 2000 with the year 1900 on January 1,
2000, and go backward in time instead of forward when the new
century begins. The severity of the problem was raised when
Congress was told that if businesses and governments continue
to ignore this issue, disruption of routine business operations
and the inability of the Federal Government to deliver services
to the American people could result. According to a
Congressional Research Service Memorandum dated April 12, 1996,
``Many people initially doubted the seriousness of this
problem, assuming that a technical fix will be developed.
Others suspect that the software services industry may be
attempting to overstate the problem to sell their products and
services. Most agencies and businesses, however, have come to
believe that the problem is real, that it will cost billions of
dollars to fix, and that it must be fixed by January 1, 2000,
to avoid a flood of erroneous transactions.''
On April 16, 1996, the subcommittee convened a hearing to
collect the facts on the steps Federal agencies are taking to
prevent a possible computer disaster. Subcommittee Chairman
Horn raised the question whether agencies are taking the
necessary actions to identify where the problem lies and
whether they are providing the necessary human and capital
resources to correct the problem. In her opening statement,
Ranking Minority Member Maloney noted: ``The cost of failure is
high--systems that deliver services to individuals will not
work, and those services will not be delivered. Checks will not
arrive on time. Planes will be grounded, and ports will be
closed.''
Testimony was received from: Kevin Schick, research
director, the Gartner Group; Louis J. Marcoccia, director of
data administration and logistics, New York City Transit
Authority; Nicholas J. Magri, senior vice president, Securities
Industry Automation Corp.; Michael B. Tiernan, the First Boston
Corp. on behalf of the Securities Industry Association, Data
Management Division; D. Dean Mesterharm, Deputy Commissioner
for Systems, Social Security Administration; Hon. Emmett Paige,
Jr., Assistant Secretary for Defense Command, Control,
Communications and Intelligence, Department of Defense; and
Hon. George Munoz, Assistant Secretary for Management and Chief
Financial Officer, Department of the Treasury. The witnesses
testified to a number of examples of incidences that could
occur if industry and government continue to ignore this issue.
In fact everything from unexpected expiration of drivers'
licenses to erroneous dates for final mortgage payments could
occur if two-digit date fields remain unable to recognize the
year 2000.
On September 10, 1996, the subcommittee convened a joint
hearing with the Subcommittee on Technology of the Committee on
Science to review the impact on personal computers, on State
and local governments, and on Federal agencies. Testimony was
received from: Sally Katzen, Administrator, Office of
Information and Regulatory Affairs, Office of Management and
Budget; Larry Olson, deputy secretary, information technology
for the Commonwealth of Pennsylvania; Harris Miller, president,
Information Technology Association of America; and Daniel
Houlihan, first vice president and president elect, National
Association of State Information Resource Executives.
In her testimony, Sally Katzen provided an outline of the
administration's current strategy for solving the problem: 1)
raise the awareness of the most senior managers in Federal
agencies to the dimensions of the problem; 2) promote the
sharing of both management and technical expertise; and 3)
remove barriers that may slow down or impede technicians fixing
systems.
Larry Olson presented Pennsylvania's plan of action. As
noted by Olson, the key to success of the plan is senior level
support. Mr. Olson pointed out that during his first year as
Governor of Pennsylvania, Tom Ridge quickly recognized the
dramatic implications of the Year 2000 date field problem.
Subsequently the Governor took quick action to ensure that
Pennsylvania businesses and governments will be prepared before
January 1, 2000.
Harris Miller presented an outline of how the Year 2000
situation presents three problems for personal computer users
in homes and businesses across the country: 1) the BIOs chip of
individual machines; 2) the operating system that generally
comes bundled with new computers; and 3) the commercial
software purchased for those machines. Most equipment
manufacturers in the past 18 months have modified their
products. Operating systems in personal computers in most cases
can have their operating systems ``fixed'' through a simple
procedure using the computer's mouse. Commercial software
products may or may not be Year 2000 compliant. An issue of
great concern for personal computer users is the increasing
access with other systems. In order to ensure that computer
systems are operational in the year 2000, most systems will
need modification. Miller also testified further that personal
computer users as well as mainframe information technology
managers need to be aware of this issue and take appropriate
corrective steps.
b. Benefits.--According to Mr. Schick, the crisis revolves
around time, cost and risk. Businesses, Federal agencies, and
State and local governments must understand that this
information technology project cannot be allowed to slip:
Saturday, January 1, 2000 cannot be postponed. Prevention of
widespread disruption of services to citizens, breakdowns in
information processing, and compromising of computer security
controls must be kept to a minimum. The problem, although not
technically complex, is managerially challenging and will be
very time consuming for private and public sector
organizations. It is the Government's responsibility to ensure
that its constituents receive Federal services and that public
safety is available to all citizens. (See section II.A.2.)
c. Hearings.--Hearings entitled, ``Is January 1, 2000 the
Date for Computer Disaster?'' and ``Solving the Year 2000
Computer Problems'' were held on April 16, 1996 and September
10, 1996.
24. Oversight of the General Accounting Office.
a. Summary.--The primary mission of the General Accounting
Office (GAO) is to investigate all matters relating to the
receipt, disbursement, and application of public funds, which
includes the audit requirements under the Chief Financial
Officers Act of 1990. The scope of the GAO's authority has been
extended to include conducting commercial audits of
governmentwide operations; establishes principles and standards
for accounting in executive agencies and audit evaluations of
the adequacy of financial management and control; and to
conduct a governmentwide audit of the executive branch's
agencies in compliance with the Government Management and
Reform Act of 1994.
The subcommittee convened an oversight hearing on April 30,
1996, to review the growing concerns regarding the GAO's
operations and responsibilities; the efficiency of the GAO's
processes; and the prioritization of the functions which the
GAO performs. Testimony was received from Hon. Charles A.
Bowsher, Comptroller General of the United States, U.S. General
Accounting Office; Hon. John A. Koskinen, Deputy Director for
Management, Office of Management and Budget; Dr. R. Scott
Fosler, president, National Academy of Public Administration;
Thomas V. Fritz, president and CEO, the Private Sector Council;
and Dr. Cornelius (Neil) E. Tierney, accounting professor,
George Washington University.
Comptroller General Bowsher stated that since 1983, the GAO
had doubled its productivity. Some of GAO's accomplishment have
led to budget reductions, cost avoidance, appropriation
deferrals, and revenue collections that have provided financial
savings and other benefits in the billions of dollars. In
fiscal year 1995, this amounted to a return of $35 for every $1
appropriated for the GAO.
Dr. Tierney stated that, with respect to the GAO's
government auditing standards, two conditions exist that might
warrant assistance from Congress: the need to actually audit
and have auditors render an opinion on the adequacy of a
government's system of internal controls; and giving increased
emphasis within and possibly requiring the Inspectors General
community to periodically conduct the program performance
audits outlined and contemplated by the GAO in its government
auditing standards.
In addition, Tierney said that the concerns expressed about
certain aspects of the GAO operations, its working
relationships with individual Members of Congress and
committees, and its independence, had been examined over the
years. The GAO is continually concerned over the length of time
taken to issue reports of its reviews and audits. At times,
report preparation and delivery have exceeded a year or more.
Also he stated that the GAO workload includes various studies,
reports, audits, etc., that are legislatively mandated. Much of
what appears to be self-initiated, is, in fact, the result of
mandates in laws by earlier Congresses.
b. Benefits.--In fiscal 1995, the GAO prepared 1,322 audit
and evaluation reports, including 910 reports to Congress and
agency officials, 166 congressional briefings, and 246
congressional testimonies delivered by 72 GAO executives and
serves a valuable asset to the Congress in its oversight of the
executive branch.
Mr. Bowsher also described steps the GAO has taken to
improve its productivity and better serve Congress. It has
streamlined its headquarters and field operations. It has
improved its processes for conducting and reporting the results
of its work. It plans to capitalize on advances in information
resource technology and to enhance its methodological and
technical skills. In addition, the GAO's financial audit
division has successfully undergone an external peer review by
KPMG Peat Marwick.
c. Hearings.--On April 30, 1996, the subcommittee held an
oversight hearing entitled ``Oversight of the United States
General Accounting Office.''
25. Oversight of the General Services Administration.
a. Summary.--The General Services Administration (GSA) was
created to provide an economical and efficient system to supply
goods and services to the Federal Government. It has not been
reauthorized in the nearly 50 years of its existence.
The subcommittee held a hearing on May 10, 1996, to examine
GSA's authority over the Federal motor vehicle fleet, personal
property disposal, and leasing of Federal buildings. The
subcommittee heard testimony from: David Barram, Administrator
of General Services, GSA; G. Martin Wagner, Associate
Administrator, Office of Policy, Planning and Evaluation, GSA;
Frank Pugliese, Commissioner, Federal Supply Service, GSA;
David Bibb, Deputy Commissioner, Public Buildings Service, GSA;
Andrew Jones, senior manager, Arthur Andersen; John Dues,
partner and director, Arthur Andersen; Chris Butterworth,
president, National Association of State Agencies for Surplus
Property; and Bill Wilson, vice president, National Association
of State Agencies for Surplus Property.
Subcommittee Chairman Horn opened the hearing by noting
that GSA had not been reauthorized since 1949, and asserted
that this harmed GSA, since its programs do not have regular
congressional input aside from the $257 million in appropriated
funds. In addition to the lack of clear direction from
Congress, GSA is split between policy and oversight and the
provision of services. Chairman Clinger raised issues relating
to the Federal motor vehicle fleet and if GSA could effectively
operate a large fleet. Mr. Pugliese stated that the Federal
Supply Service would be responsible for operating the GSA
fleet, and the Office of Policy, Planning and Evaluation would
handle the policy aspects. Pugliese noted that 90 percent of
the dollars spent by the GSA fleet program are spent on private
sector contractors--so much of the program is already
privatized.
Mr. Wagner described the purpose of the surplus property
program, which is to put Federal property toward the highest
possible use, in a Federal agency or a State or local
government agency. Wagner agreed that GSA and other agencies
should take a look at the property management function, since
$30 billion in surplus personal property is declared excess
each year by Federal agencies.
Subcommittee Chairman Horn raised the issue of leases and
public buildings, describing how GSA was charging his
predecessor $80,000 for office space he obtained for $30,000,
with an increase in service for constituents. Administrator
Barram noted that GSA was required to locate, where possible,
in downtown city centers, which inflates the cost.
b. Benefits.--Administrator Barram noted that lease
renegotiation and ensuring that tax reductions are passed
through to the Federal Government will reduce office rate
charges over the next few years. David Bibb noted that every 5
years appraisers examine buildings to establish the market
rate. Several private real estate firms have approached GSA
offering to assist GSA in locating savings through
restructuring existing leases, challenging tax assessments, and
performing lease audits for free in exchange for some portion
of the savings. Some private firms say that $1 billion could be
saved annually, whereas Arthur Andersen notes show that GSA
could save $565 million annually.
c. Hearings.--On May 10, 1996, the subcommittee held a
hearing on ``Oversight of the General Services Administration
(GSA).''
26. Federal Information Policy Oversight.
a. Summary.--As part of its oversight responsibility, the
subcommittee has jurisdiction over the following aspects of the
Government's information policy: the Freedom of Information Act
(FOIA); the Privacy Act; Government in the Sunshine Act; and
Federal Advisory Committee Act.
The subcommittee conducted an oversight hearing on June 13,
1996, to receive testimony from witnesses regarding the
execution of these information policy laws. In his opening
statement subcommittee Chairman Horn expressed his frustration
upon learning that the Federal Bureau of Investigation (FBI)
has a 4-year backlog for responding to FOIA requests. In noting
the significance that the committee attaches to the Freedom of
Information Act, he observed that the first report issued by
the House Committee on Government Reform and Oversight was an
updated version of ``A Citizen's Guide on Using the Freedom of
Information and Privacy Act of 1974 to Request Government
Records.''
The subcommittee received testimony from Senator Patrick
Leahy who noted the role that FOIA requests had in uncovering
information about various Government actions. He stated that
the law needed to be updated to reflect the advancing use of
information technology in Government to maintain records,
adding ``access should be the same whether they are on a piece
of paper or a computer hard drive.'' The Senator also
criticized the failure of agencies to comply with the statutory
time limits for responding to requests.
Few agencies actually respond to FOIA requests within the
10-day limit required by law. Such routine failure to comply
with the statutory time limits is bad for morale in the
agencies and breeds contempt by citizens who expect Government
officials to abide by, not routinely break, the law.
Witnesses were Senator Patrick Leahy; J. Kevin O'Brien,
Section Chief of the Freedom of Information/Privacy Acts
Section, FBI; Roslyn Mazer, Deputy Assistant Attorney General,
Office of Policy Development, Department of Justice; Anthony
Passarella, Director, Directorate for Freedom of Information
and Security Review, Office of the Assistant Secretary of
Defense; Eileen Welsome, journalist; Larry Klayman, chairman
and general counsel of Judicial Watch; Jane Kirtley, executive
director, of the Reporter's Committee for Freedom of the Press;
Byron York, reporter for the American Spectator; Marty Wagner,
Associate Administrator, Office of Policy, Planning and
Evaluation, GSA; James L. Dean, Director, Committee Management
Secretariat Staff, GSA; Paul Kamenar, executive director,
Washington Legal Foundation; Randolph May, attorney,
Sutherland, Asbill & Brennan.
b. Benefits.--Access to government information, government
records about individuals, and the protection of personal
records from unwarranted disclosure are each important
protection in a democratic society. Technological developments
have the potential of dramatically enlarging the potential for
disclosure of this information. Legislative and oversight
initiatives are necessary to assure that these new developments
facilitate the release of information intended for disclosure
in a timely manner, while also better shielding those personal
records which the public expects to be kept private.
c. Hearings.--Hearing entitled, ``Federal Information
Policy Oversight,'' was held on June 13, 1996.
27. Oil Royalties.
a. Summary.--The subcommittee has legislative and oversight
jurisdiction with respect to the ``overall economy, efficiency
and management of government operations and activities,
including Federal procurement.'' In addition, the subcommittee
has the oversight responsibility to review and study on a
continuing basis, the operation of government activities at all
levels with a view to determining their economy and efficiency.
Pursuant to this authority, the subcommittee convened an
oversight hearing to examine whether companies under agreements
to extract oil from Federal lands in California undervalued the
oil and as a result, underpaid royalties to the Federal
Government.
In 1975, the State of California and the city of Long Beach
pursued litigation against seven major oil companies operating
in California alleging that these companies conspired to keep
posted oil prices low. The city and State claimed they had been
damaged because their oil revenues depended on posted prices
(posted prices are the announced prices at which crude oil
purchasers, generally major refiners, will buy oil from
producers at the wellhead) and the royalty thereon. If the
posted price is below fair market value, the Federal Government
loses tax and royalty revenue.
In 1986, the Minerals Management Service (MMS) of the
Department of the Interior contacted State officials to assess
the appropriateness of posted prices as the royalty value
basis. MMS concluded that the system of posted prices existing
at the time fairly represented market value. Also weighing
heavily in the MMS decision was the fact that the State and
city had been unsuccessful in their antitrust claims in court.
The Justice Department looked into the issue and chose not to
pursue an investigation.
In the mid-1980's, MMS, the General Accounting Office and
the Internal Revenue Service independently analyzed the issue,
but the information available to them was inconclusive in
proving that Federal oil was undervalued at posted prices. In
1991, six of the companies involved (ARCO, Shell, Chevron,
Mobil, Texaco, and Unocal) reached settlements totaling $345
million to end the court actions by the State and city alleging
undervaluation. A seventh defendant, Exxon, went to trial and
was exonerated. That decision was appealed, and Exxon won the
appeal in January 1995. A separate appeal covering a different
time period is still pending. Given the length and
circumstances of the litigation, it is not certain whether the
companies settled as a practical matter to cut off litigation,
or whether they were concerned about potential legal liability.
In light of the 1991 settlement, MMS performed a scoping
exercise to estimate the size of any potential Federal royalty
underpayment. In 1994, an interagency team consisting of MMS,
the Department of the Interior's Solicitor's Office and the
Departments of Energy, Commerce and Justice, investigated the
allegations. The Justice Department resigned from the team,
citing an inability to prove antitrust violations. The State of
California assisted the Federal team in obtaining court records
from the earlier litigation.
b. Benefits.--The Minerals Management Service has delayed
the collection of oil royalties which are owed. This hearing
was the first congressional hearing on the issue of
undervaluation of crude oil. As such, the hearing benefited the
Federal Government by focusing attention on the problem and
demonstrating that there was bipartisan congressional interest
in pursuing underpayment. (See section II.A.3.)
c. Hearings.--On June 17, 1996, the subcommittee held a
hearing entitled, ``Can the U.S. Increase Oil Royalties.''
28. Field Hearing on the U.S. Border Patrol's Operation Gatekeeper.
a. Summary.--The U.S. Border Patrol is a part of the
Immigration and Naturalization Service, the primary agency in
the Department of Justice responsible for enforcing the
Nation's immigration laws. The Border Patrol is responsible for
securing the international land and water borders between
ports-of-entry with the goal of preventing illegal entry into
the United States, interdicting drug smugglers, and compelling
those persons seeking admission to the country to present
themselves legally at ports-of-entry for inspection.
On October 1, 1994, the Department of Justice initiated
Operation Gatekeeper in an attempt to reduce illegal
immigration across the United States-Mexico border in the San
Diego region. Administered by the Border Patrol, Operation
Gatekeeper has as one of its goals the shifting of illegal
crossing routes to areas that are remote and difficult to
cross--areas where the Border Patrol presumably has a tactical
advantage. The operation has had the effect of moving the flow
of illegal alien traffic eastward, away from San Diego,
Imperial Beach and Chula Vista to Brown Field and beyond
eastern San Diego County.
A key objective of Operation Gatekeeper is providing a
deterrent to illegal aliens crossing the United States-Mexico
border. Accordingly, a measure of the operation's success is
the number of individuals apprehended for illegally crossing
the border. The fewer people caught, it is argued, the more
successful the operation, since its aim is to reduce the number
of illegal aliens arrested in the areas targeted by the
initiative by deterring their crossings. Figures provided by
the Immigration and Naturalization Service show reductions in
the number of apprehensions in the southwest border region.
Arrests in Imperial Beach have fallen to approximately 60,000
for the first 9 months of the current fiscal year versus 84,000
for the same period during the previous year. Arrests in Chula
Vista have dropped from 105,159 to 91,987 during the same
period. Arrests in Brown Field dropped from 109,141 to 94,206
during that time.
The subcommittee investigated allegations made by agents of
the Border Patrol that the reported drop in arrests was due to
falsification of the reports by officials within the Border
Patrol. At a hearing before the California State Assembly
Subcommittee on Border Crime, T.J. Bonner, president of the
National Border Patrol Council testified that the Border Patrol
has: ``[E]ngaged in a comprehensive campaign of deception
regarding the effectiveness of Operation Gatekeeper. In its
zeal to make good on its promise to replicate the reduction in
arrests that occurred in El Paso, the Border Patrol encouraged
and ordered agents to create the appearance that illegal
entries had declined dramatically in the westernmost fourteen
miles of the border.'' Mr. Bonner made a number of specific
allegations about the effectiveness of the operation.
In his opening statement, subcommittee Chairman Horn
questioned the use of the apprehension rate as a gauge to
assess the effectiveness of Operation Gatekeeper. He further
noted the concerns of residents in areas where the traffic flow
of illegal aliens has increased due to the operation. T.J.
Bonner testified that: ``[T]he Border Patrol has engaged in a
comprehensive campaign of deception regarding the effectiveness
of Operation Gatekeeper . . . Encourag[ing] and order[ing]
agents to create the appearance that illegal entries had
declined dramatically . . .'' He stated that Border Patrol
agents were ordered to remain in stationary positions and not
to leave their locations even if illegal aliens crossed on
either side of their stations. They were chastised and
threatened with disciplinary action when they arrested illegal
aliens. Illegal aliens were turned back without arresting them,
and in other instances, the apprehensions were not recorded or
reported. In addition, he testified that the Border Patrol
altered the location for returning illegal aliens to Mexico by
sending them hundreds of miles away from the San Diego area.
This was done, Bonner noted, to ensure that if the illegal
aliens attempted another crossing, the flow would not be felt
in the area covered by Operation Gatekeeper. ``The result of
all of these actions was an artificial decrease in the number
of apprehensions'' stated Bonner.
Mr. Bonner was joined by a Border Patrol agent whose
identity was shielded by the subcommittee from disclosure. This
was done at the agent's request for fear that if his identity
was known to his supervisors at the Border Patrol, reprisals
would occur against him for speaking publicly about allegations
about the operation. His testimony supported the allegations
raised in Mr. Bonner's statement. He added that quotas were set
to limit the number of apprehensions, and noted that he
witnessed the falsification of official reports on the number
of illegal aliens stopped. In response to a question from
subcommittee Chairman Horn, the agent noted that the order to
manipulate data came from Johnny Williams, Chief of the Border
Patrol's San Diego sector.
b. Benefits.--The testimony received during this hearing
enabled members of the subcommittee to hear firsthand the
impact of Operation Gatekeeper. The testimony leads to the
conclusion that Operation Gatekeeper is not a complete success;
it has had limited success in slowing the entry of illegal
aliens in a few miles of the border. The subcommittee will
continue its oversight of this initiative due to the findings
from the hearing.
c. Hearings.--On August 9, 1996, the subcommittee held a
field hearing on ``U.S. Border Patrol Implementation of
Operation Gatekeeper.''
29. Oversight of the Smithsonian Institution.
a. Summary.--The subcommittee convened an oversight hearing
with the Committee on House Oversight to review security and
procurement procedures of the Smithsonian. The subcommittees
heard testimony from I. Michael Heyman, secretary of the
Smithsonian Institution; Tom Blair, Inspector General of the
Smithsonian Institution, and Bill Gadsby, Director of
Governmental Business Operations, General Accounting Office.
The Smithsonian entered into a contract with Hughes
Aircraft Company to develop and build the Smithsonian
Institution Proprietary Security System (SIPPS). It took 12
years to complete from the initial award of the contract. The
SIPPS was handled in two phases. In spite of the facts that
there were significant problems with phase I of the project,
the Smithsonian proceeded with phase II. The SIPPS was a
complete failure, in that it was unable to protect the
collections of the Smithsonian. The procurement and the
performance of SIPPS was reviewed by Inspector General Blair
who recommended changes in the procurement system.
Secretary Heyman was in agreement with Mr. Blair regarding
the procurement practices of the Smithsonian as they relate to
the procurement of SIPPS. However, it was noted, many of the
problems that existed during the initial SIPPS procurement have
since been corrected. In addition, Secretary Heyman testified
that during the 150th anniversary year of the Smithsonian, it
has embarked on a program to enhance public exposure,
accessibility and education. One of the ways in which the
Smithsonian increased accessibility was to bring collections
and collective experts on-line.
b. Benefits.--This oversight hearing was the first in many
years. This was an opportunity for the subcommittee to exercise
its oversight authority over the Smithsonian.
c. Hearings.--The subcommittee held an oversight hearing on
September 25, 1996 on the Smithsonian Institution. The hearing
was held jointly with the House Oversight Committee.
HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE
1. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Housing and Urban Development (HUD).
a. Summary.--The Human Resources and Intergovernmental
Relations Subcommittee reviewed budget data, National
Performance Review recommendations, Inspector General audits
and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Housing and Urban Development
(HUD).
The subcommittee convened two oversight hearings with
respect to the agency. On February 13, 1995, the subcommittee
invited the HUD Secretary Henry Cisneros to testify about the
agency's core mission, management, plans, programs, and
potential cost savings. The Secretary was also asked to discuss
successes and challenges facing HUD in meeting its core
mission. Secretary Cisneros spoke about HUD's Blueprint for
Reinvention which focuses on the consolidation of several
programs, the Department's efforts to transform the Federal
Housing Administration (FHA) ``from a government bureau to a
government corporation,'' and the agency's sweeping efforts to
transform public housing throughout the country. Subcommittee
Chairman Shays congratulated Secretary Cisneros on the agency's
efforts to reorganize into a ``leaner and more efficient''
agency.
On February 22, 1995, the subcommittee held a second
hearing to receive information from HUD's Inspector General
(IG); the Director of Housing and Community Development Issues
of the U.S. General Accounting Office (GAO); a senior fellow
from the Hudson Institute; a former chairman of the Chicago
Housing Authority and president of American Community Housing
Associates; a private organization; and the founder of the
National Low Income Housing Coalition.
b. Benefits.--American taxpayers and public housing
residents, in particular, benefit from administrative savings,
greater flexibility, and more effective concentration of
limited HUD resources. The hearings demonstrated that there are
opportunities at HUD for cost reduction, improved efficiency
and reform and allowed HUD officials, former HUD officials, and
other Federal and private officials the opportunity to come
together to discuss what HUD is doing right as well as what the
agency might be doing wrong.
c. Hearings.--Hearings entitled ``Oversight Hearing on the
Department of Housing and Urban Development'' were held on
February 13 and 22, 1995.
2. Efforts To Improve Program Performance and Efficiency at the U.S.
Department of Health and Human Services (HHS).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Health and Human Services
(HHS).
On March 1, 1995, the subcommittee convened an oversight
hearing to receive testimony from HHS Secretary Donna E.
Shalala. The Secretary was invited to discuss the agency's core
mission, goals, programs, and plans for cost saving; to
indicate what HHS does well and describe what HHS programs
could possibly be better done by the States and localities; and
to address agency efforts to move Medicare and Medicaid into
managed care systems.
Secretary Shalala testified about HHS efforts to reinvent
the agency, and indicated that she continually asks the
following questions with respect to the duties and
responsibilities of HHS: Are the programs or functions critical
to the agency's mission and based on customer input? Can the
program or the function be done as well or better at the State
or local level? Is there a way to cut cost or improve
performance by introducing competition? Can the program be
improved by putting customers first, cutting red tape, and
empowering employees?
On March 22, 1995, the subcommittee convened a second
oversight hearing to receive testimony from public and private
sector witnesses, as well as testimony from the U.S. General
Accounting Office (GAO), HHS's Office of Inspector General
(OIG), and representatives from the Heritage Foundation and
Project HOPE.
GAO and OIG officials focused on the critical area of
losses due to waste, fraud and abuse in the Medicare and
Medicaid programs. Losses in national health care spending are
estimated by the GAO to be as high as 10 percent of total
spending. If these estimates are correct, losses due to waste,
fraud and abuse in Medicare and Medicaid in fiscal year 95
could be in excess of $24 billion.
b. Benefits.--Every American taxpayer benefits from a
Federal health care and human services delivery system operated
in the least costly manner with the needs of the customer given
great weight in the decisionmaking processes. The subcommittee
will continue to monitor waste, fraud and abuse in Medicare and
Medicaid programs. Recommendations made by the GAO, OIG and
others in the course of this hearing to reduce staggering and
unacceptable losses will be carefully examined and monitored.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Health and Human Services'' were held on March 1
and 22, 1995.
3. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Labor (DOL).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Labor (DOL).
On March 9, 1995, the subcommittee convened an oversight
hearing, DOL Secretary Robert B. Reich was asked to address
what DOL does well and to describe particular situations that
the agency was finding challenging in the accomplishment of its
core mission, goals, programs, and plans for cost saving.
Secretary Reich was questioned about Representative Steven
Gunderson's (IR-WI) proposal to combine the Departments of
Education and Labor. The Secretary disagreed with the proposal,
claiming that each agency has its own specialized and distinct
function.
Secretary Reich presented charts that showed the decline of
real wages for middle and lower income workers. The Secretary
advocated raising the minimum wage and increasing the level of
job training, which he defined as ``any vocational course of
instruction, directly related to gaining job skills, outside of
a formal degree program.'' The Secretary also testified about
efforts to consolidate job training programs and the agency's
plans regarding downsizing.
On April 4, 1995, the subcommittee convened a second
oversight hearing to identify other opportunities for cost
reduction, increased efficiency and reform in the $33.8 billion
Labor Department budget. Testimony was received from the U.S.
General Accounting Office (GAO), DOL's Office of Inspector
General (OIG), and a representative from the Urban Institute.
The GAO and OIG officials focused on consolidation and
termination of overlapping job training programs. The GAO told
the subcommittee that the Federal Government runs 163 job
training programs administered by 15 agencies. Secretary Reich
of DOL has proposed to consolidate 70 education and training
programs. Urban Institute officials testified about potential
administrative cost savings from Federal program consolidations
and about administrative savings that might be expected from
various program consolidation models.
b. Benefits.--The hearings provided an overview of the
policy issues presented by current DOL programs, particularly
as the issues relate to opportunities for consolidations and
terminations of ineffective and/or duplicative programs.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Labor'' were held on March 9 and April 4, 1995.
4. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Education (DOED).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Education (DOED).
On March 13, 1995, the subcommittee convened a hearing to
allow DOED Secretary Richard Riley to discuss the agency's core
mission, goals, programs, and plans for cost savings.
Subcommittee Chairman Shays opened the hearing by mentioning
the States' role in education and indicated his wish to
understand the changes taking place in the Department of
Education, especially in light of proposals to merge the
Departments of Labor and Education.
Secretary Richard Riley testified about the new and
controversial direct student loan program, training program
consolidations, and problems the agency had with block
granting. Secretary Riley also indicated that he did not agree
that combining the Departments of Labor and Education would
help to save money since the DOED was already consolidating
programs.
Deputy Secretary of Education Madeleine Kunin testified
that DOED had made significant managerial and attitudinal
changes that she believed would break down agency bureaucracy
and bring the DOED's philosophy in line with budget
constraints.
On April 6, 1995, the subcommittee convened a second
oversight hearing to discuss whether significant cost savings
could be achieved through a consolidation or elimination of
duplicative programs and improved efficiencies in DOED program
administration. Testimony was received from: the public and
private sectors; DOED's Office of Inspector General (OIG); the
U.S. General Accounting Office (GAO); and a former DOED
Assistant Secretary for Management and Budget.
GAO testified that according to Office of Management and
Budget data, fiscal year 95 spending on education is estimated
to be $70 billion. DOED spends less than half, $33.4 billion or
47 percent of the total. The Department of Labor spends $5.5
billion, or 7.9 percent of the total. Other Federal agencies
also manage numerous education-related programs, including the
Department of Health and Human Services with 129 programs, the
National Endowment for the Arts and Humanities with 27, and the
Department of Agriculture with 26. The OIG testified that,
since 1965, the Federal Family Education Loan program has
suffered $57 billion in defaults, with $4.7 billion in 1993
alone.
b. Benefits.--The hearings provided subcommittee oversight
of DOED, its core missions, goals, and efforts to downsize and
consolidate training and other programs. The hearings also
produced information on the potential and the limitations of
program consolidations in education and training.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Education'' were held on March 13 and April 6,
1995.
5. Efforts To Reorganize and Improve Program Performance and Efficiency
at the U.S. Department of Veterans Affairs (VA).
a. Summary.--The subcommittee reviewed budget data,
National Performance Review recommendations, Inspector General
audits and reports, and General Accounting Office studies and
recommendations to identify opportunities for cost savings,
improved efficiency and consolidations in the programs and
operations of the Department of Veterans Affairs (VA).
On March 13, 1995, the subcommittee convened a hearing to
allow VA Secretary Jesse Brown to discuss the agency's core
mission, goals, programs and plans for cost savings. Secretary
Brown was asked to testify about successes and challenges at
the VA and about agency efforts to reform the VA's vast health
care system. The Secretary testified that the agency's biggest
success so far had been evidenced in its ability to respond
more quickly to the needs of veterans. Secretary Brown also
discussed VA's continuing efforts to help veterans from the
Persian Gulf War, addressed questions relating to VA hospital
utilization rates and the accessibility of health services to
veterans.
On May 9, 1995, the subcommittee convened a second
oversight hearing to identify opportunities for improved
efficiency and management reforms in the $38.2 billion VA.
Testimony was received from the U.S. General Accounting Office
(GAO), the VA's Office of Inspector General (IG), and from
representatives of veterans organizations.
The subcommittee also probed the views of the witnesses on
VA's plans for reorganizing hospital and medical facilities.
Subcommittee Chairman Shays requested comments about plans to
improve the efficiency and quality of the VA's health care
service, and asked the witnesses for their views about how to
raise the level of management coordination and accountability
in VA programs and operations.
b. Benefits.--The VA health system is the largest centrally
managed health care delivery system in the Nation. Veterans and
every American taxpayer will benefit from cost effective VA
programs and services. If the VA health care system is to
remain viable, it must fundamentally change its approach to
providing care. The need for structural change is acute. By
holding these hearings, the subcommittee has benefited the
system by demonstrating congressional concern that the VA adapt
its health care delivery system to meet the changing demands of
the health care marketplace.
c. Hearings.--Hearings entitled ``Oversight Hearing on
Department of Veterans Affairs'' were held on March 13 and May
9, 1995.
6. Examination of Programs and Operations of the Corporation for
National and Community Service.
a. Summary.--On April 25, 1995, the subcommittee directed
an inquiry to the Corporation for National and Community
Service (Corporation) regarding the agency's AmeriCorps
program. The inquiry requested information on the per-
participant costs of the program, the quality and performance
standards applied to AmeriCorps grant applications and
programs, the amount of training received by AmeriCorps
participants and information on any AmeriCorps programs that
did not involve AmeriCorps participants.
On May 4, 1995, the Corporation responded to the
subcommittee's inquiry. The Corporation reported per
participant costs to be $17,600 for full time members. They
noted this figure was subject to change if their original
fiscal year 95 funding levels were rescinded. The Corporation
also provided a breakdown of the per-participant costs
indicating the percent of costs devoted to educational awards,
stipends, travel, training and benefits. Part-time participants
were reported to have a cost of $8,800. Again, this figure
would also be subject to change if the fiscal year 95
appropriations if rescissions were passed by Congress for that
fiscal year.
The Corporation also outlined the selection criteria
applied in the agency's evaluation of AmeriCorps program
applications. The criteria were set out under the headings of:
quality, sustainability, innovation, replicability and special
considerations (such as geographic diversity and start dates).
The Corporation further outlined the quality standards used at
both Federal and State levels in selecting grantees. These
standards are printed in the AmeriCorps grant application and
are reflected in the Corporation's ``Principles for High
Quality National Service Programs'' which include: strong
organization, excellent service projects, evaluation,
participant experience, community partnerships and diversity.
The Corporation also reported that the programs were made
subject to several levels of performance reviews conducted by
State commissions, national parent organizations, Corporation
staff and impartial national evaluators. According to the
Corporation, performance reviews include quarterly report
forms, financial status reports, site visits, and independent
evaluations. The Corporation stated that the performance
results are taken into consideration during the grant renewal
decisionmaking process.
In the response, the Corporation also described the
statutorily mandated ``planning grants'' that make up 1.5
percent of their grant budgets. Planning grants, such as one
awarded to the Northeastern University's Center for the Study
of Sports in Society, must be used for activities such as: site
selection, anticipating roadblocks, studying other AmeriCorps
programs, creating partnerships with businesses, non-profits,
police and school districts. The Corporation disputed
allegations that planning grants are used to help organizations
write grant applications.
The Corporation response indicated that AmeriCorps
participants must devote at least 80 percent of their hours to
direct service, with no more than 20 percent going to
education, training or community building activities during a
full-time or reduced term of service. The education or training
activities may include preparation for the GED.
To address questions raised by the Corporation response,
the subcommittee convened an oversight hearing to examine the
programs and operations of the Corporation for National and
Community Service. Testimony was received from Corporation
Chief Executive Officer Eli Segal, along with representatives
from AmeriCorps program sponsors, participants and critics of
the Corporation.
This was the first oversight hearing on the Corporation
since its creation in 1993, with the passage of the National
and Community Service Trust Act (Public Law 103-82). The act
consolidated responsibility for a number of community service
programs, including AmeriCorps, Volunteers in Service to
America (VISTA), the National Civilian Community Corps, Serve-
America, and the Retired Senior Volunteer Program (RSVP).
b. Benefits.--The subcommittee hearing provided a balanced
discussion of the costs and benefits of the national service
programs which became operational under the Corporation
umbrella in 1993.
c. Hearings.--A hearing entitled ``Oversight Hearing on the
Corporation for National and Community Service'' was held on
May 18, 1995.
7. Revelations of Medicaid Fraud and Scams.
a. Summary.--In 1992, the House Government Operations
Committee issued a report concluding that waste, fraud and
abuse ``cost the government $300 billion in recent years.''
\20\ The report added, ``Government waste has not only bilked
the taxpayer of billions of dollars, but it has created a
public cynicism about government at a time when effective
government is needed the most.'' After having received
testimony from the Secretaries of five cabinet departments, the
Human Resources and Intergovernmental Relations Subcommittee
convened an oversight hearing in order to seek the perspectives
and recommendations of commentators and investigators from
outside the government on ways to identify and reduce waste,
fraud and abuse in these departments. Testimony was received
from: Thomas Schatz, president of Citizens Against Government
Waste; Martin Gross, an author and commentator; James Bovard,
journalist and author; and Dr. Ronald Walters, chairman of the
political science department of Howard University.
---------------------------------------------------------------------------
\20\ ``Managing the Federal Government: A Decade of Decline,''
December 1992, Majority Staff Report to the Committee on Government
Operations.
---------------------------------------------------------------------------
Mr. Schatz testified about the Departments of Education and
Veterans Affairs. He discussed collection problems in Student
Financial Aid Programs, which he believes should be
unsubsidized and administered by the Treasury Department. He
testified that he believes that the VA frequently overpays
pension and compensation benefits and suggested forms of data
collection that he believes would fix problems of overpayment.
Mr. Gross testified about the Department of Health and
Human Services. He believes that to prevent the insolvency of
the Social Security system, the retirement age should be raised
to 70 years. Mr. Gross also discussed his views regarding how
Medicare and Medicaid could be run more efficiently.
Mr. Bovard discussed problems in the Section 8 housing
system. He cited several examples of incidences where he
belived that the government was paying for expensive housing
for the poor, and argued that Section 8 projects are linked to
many inner city problems.
Mr. Kennedy testified about his experience of going
undercover for 2 months on the streets of New York City to
expose scam artists--doctors, pharmacists and black
marketeers--who he says rip off the Medicaid program in New
York State for hundreds of millions of dollars. Mr. Kennedy
said that he was able to ``easily rent Medicaid cards'' from
unscrupulous people on the street and use the cards to obtain
thousands of dollars ``in unneeded tests, exams and services--
all at taxpayer expense.'' Mr. Kennedy further testified that
``after 30 years of existence, Medicaid has failed to require
ID photos or any other descriptive information on its cards,
allowing thousands of unscrupulous recipients to barter their
cards for quick cash or drugs.''
Dr. Walters lauded the efforts of the administration's
Reinventing Government initiative, and voiced concern about the
counterproductive outcomes of dismantling programs too quickly
or ill-advisely. Dr. Walters contended that the reason many of
the poverty programs do not work is because their operating
costs are under funded. Dr. Walters testified about his fear
that with further budget cuts to poverty programs and an
increasing number of people entering poverty, that the
situation would simply get worse.
b. Benefits.--It is the view of subcommittee Chairman Shays
that ``Even if it were possible to eliminate all losses to
waste, fraud and abuse, the savings would still not balance the
budget. However, Congressional action to produce a major
reduction in losses would go a long was toward restoring public
confidence in government.
c. Hearings.--A hearing entitled ``Waste in Human Service
Programs: Other Perspectives'' was held on May 23, 1995.
8. Fraud and Abuse in Medicare and Medicaid.
a. Summary.--Pursuing oversight issues identified in
previous general oversight hearings, the subcommittee requested
information from the Health Care Finance Administration (HCFA),
the HHS Inspector General and others concerning providers who
defraud the programs but continue to bill Medicare and
Medicaid. The effectiveness of legal and administrative
sanctions against abusive providers, and management controls
over provider access to Federal health care programs were
examined. In particular, the subcommittee focused on whether
more could be done to keep fraudulent providers out of those
important government programs.
Testimony was received from: the Administrator as well as
the Senior Advisor for Program Integrity of the Health Care
Financing Administration; the HHS Inspector General; the
Special Counsel for Financial Institutional Fraud of the U.S.
Department of Justice; the Assistant Director of the Agency for
Health Care Administration for the State of Florida; and the
executive director of the National Health Care Anti-Fraud
Association.
Federal health care programs will cost $262 billion this
year. According to the GAO, up to 10 percent of health care
spending is lost to fraud and abuse. That means Medicare and
Medicaid losses are perhaps as much as $26 billion, or $71
million each day!
b. Benefits.--Losses of this magnitude pose a real threat
to the solvency of Federal health care programs. The
subcommittee learned of the limited impact of penalties--such
as suspension or debarment--that can now be imposed on
providers who are consistently abusive, or are indicted or
convicted of defrauding the Government's health care systems.
c. Hearings.--A hearing entitled ``Keeping Fraudulent
Providers Out of Medicare and Medicaid'' was held on June 15,
1995.
9. Lengthy FDA Delays in Reviewing Food Additive Petitions.
a. Summary.--This hearing was the first oversight hearing
on the FDA's management of this premarket review program since
enactment of the food additive amendments of 1958. As
subcommittee Chairman Shays noted, a serious look at how the
FDA handles its responsibilities was long overdue. Thus, the
subcommittee convened an oversight hearing on this subject to
span a 2 day period, June 22 and 29, 1995, where testimony was
received from representatives of the FDA; the Grocery
Manufacturers of America; National Food Processors Association;
the University of Texas Graduate School of Biomedical Sciences;
the Institute of Food Technologists; the National Academy of
Sciences' Food Forum; the Calorie Control Council, the center
for Science in the Public Interest and the Federation of
American Societies of Experimental Biology and from others.
Under the Food Drug and Cosmetic Act, the FDA has up to 180
days to review and act on food additive petitions. The FDA has
a backlog of 295 food additive petitions under review. Among
the backlog of pending food additive petitions, 66 percent have
been pending since 1990, 27 percent since the 1980's, and 7
percent since the 1970's. More than 100 new petitions are
submitted each year to the FDA. Food additives affect the
characteristics of food. They are commonly used to impart or
maintain consistency, nutrition, texture, flavor, color or
wholesomeness.
b. Benefits.--The delays in the current food additive
petition review process impede food technology research and
delay benefits to the consumer. By convening these hearings,
the subcommittee sought to identify the causes of and solutions
to these lengthy FDA delays. According to subcommittee Chairman
Shays, from a public health standpoint, the public wants
minimum risk in food additives, but also wants the benefits of
the same nutritional and dietary advances available to
consumers in other nations. The current FDA review process
appears to allow endless studies with no definite deadlines for
action. The subcommittee will continue to explore the issue of
whether the delays are caused by bad management, inadequate
resources or a lack of confidence by the FDA in the agency's
scientific personnel who review food additive petitions.
Based on these subcommittee oversight hearings, the
committee adopted its fourth report to the 104th Congress on
December 14, 1995, entitled ``The FDA Food Additive Review
Process: Backlog and Failure to Observe Statutory Deadline,''
House Report No. 104-436, December 21, 1995, Fourth Report by
the Committee on Government Reform and Oversight, Together with
Additional Views.
c. Hearings.--Hearings entitled ``Delays in the FDA's Food
Additive Petition Process and GRAS Affirmation Process'' were
held on June 22 and 29, 1995.
10. Bringing Health and Support Services to Women, Minorities and
Adolescents--Growing Segments of the AIDS Population.
a. Summary.--On July 17, 1995, the subcommittee convened a
field hearing held in Brooklyn, NY, to examine how the U.S.
Department of Health and Human Services (HHS) and local health
care providers are preparing to bring health and support
services to women, minorities and adolescents--growing segments
of the AIDS population. Testimony was received from:
representatives from Deputy Inspector General for Evaluations
and Inspections, HHS; the Associate Director of Health Policy
of the U.S. General Accounting Office; the Director of the
Office of HIV/AIDS Policy, Assistant Secretary of Health, HHS;
the acting commissioner of health, New York City department of
health; the director of the AIDS Institute of the New York
State Title II grantee; the AIDS program coordinator of the
Stamford department of health of the Connecticut Title II
grantee; the vice president of institutional advancement of the
Brooklyn and Caledonian Hospitals; the executive director of
Brooklyn Housing Works; the chairman of the Stewart B. McKinney
Foundation; a board member of the LAMBDA Independent Democrats;
Senator Velmanette Montgomery, New York State Senator, 18th
Senate District in Brooklyn, NY; and the executive director of
the Corporation for Supportive Housing.
The subcommittee found that, in 1993 and 1994, over one-
half of the newly reported AIDS cases were in minority groups.
The United States has also seen a 17 percent yearly increase in
the number of women infected with AIDS. Fifty-four percent of
those women are between the ages of 13-19. HHS provides funding
to local service providers through the Ryan White CARE Act,
administered by the Health Resources and Services
Administration (HRSA). In fiscal year 95, HRSA will provide
$633 million in Ryan White CARE Act funds.
b. Benefits.--By holding the oversight hearing, the
subcommittee acknowledged the importance of slowing the spread
of AIDS and provided an opportunity for members to discuss how
available Federal funding can be effectively utilized to meet
the needs of the changing AIDS population.
c. Hearings.--A hearing entitled ``AIDS in the 90's:
Service Delivery to Emerging Populations (Field Hearing)'' was
held on July 17, 1995.
11. Debating and Defining Federalism--the Sharing of Power Between the
Federal Government and the States.
a. Summary.--The subcommittee is charged under the Rules of
the House with the responsibility of studying the
intergovernmental relationships between the United States and
the States and municipalities. Pursuant to this authority, the
subcommittee convened this oversight hearing in the form of a
debate regarding what principles should guide Congress in
balancing the relationship between the national government and
the States, counties, cities and towns. This debate,
essentially, a discussion of the meaning of federalism--the
unique system of shared sovereignty that unites the States into
one Nation--was actually launched by the ratification of the
Constitution, waged fiercely in the Civil War, reshaped by the
exigencies of the Depression and a World War.
Testimony at the hearing was received from: the director of
State-Federal relations of the National Governors Association;
a former regional EPA Administrator; an author and director for
the center for american political studies at Harvard
University; the director of the Center on Budget and Budget
Policy Priorities; a senior fellow from the Progressive Policy
Institute; a commissioner from the Advisory Commission on
Intergovernmental Affairs; the director for the center for
constitutional studies from the CATO Institute; and the
director for the Governors' forum for the Heritage Foundation.
Today, it is hardly debatable that modern federalism is
entirely out of balance. Federal powers and programs occupy,
and in many cases, pre-empt, virtually every area of public
concern. As subcommittee Chairman Shays explained, the legacy
of the conflict between States' rights and civil rights
continues to haunt efforts to empower State government. Any
``new federalism'' will have to overcome that historical
barrier and reassure all Americans that States can do what
needs to be done more effectively, more efficiency and more
fairly than a top-heavy, one-size-fits-all Federal bureaucracy.
b. Benefits.--The great national debate over the proper
distribution of the people's sovereign powers has raged since
the Founders wrote the Constitution. Today, as Congress moves
to implement a smaller Federal Government, it is beneficial to
continue that discourse over the responsibility and capacity of
each level of government to perform essential public functions.
c. Hearings.--A hearing entitled ``Federalism Debate: Why
Doesn't Washington Trust the States?'' was held on July 20,
1995.
12. Joint Hearing on the FDA Regulation of Medical Devices, Including
Silicone Gel Breast Implants.
a. Summary.--Continuing oversight conducted in previous
Congresses, the Human Resources and Intergovernmental Relations
Subcommittee and the National Economic Growth, Natural
Resources, and Regulatory Affairs Subcommittee investigated
FDA's approval process and enforcement standards for medical
devices, including silicone gel breast implants.
The subcommittees reviewed scientific and medical
literature on so-called ``silicone diseases,'' requested
extensive documents from the FDA on device review and
enforcement policies and interviewed physicians, researchers
and patients. These inquiries explored how the FDA, doctors and
scientists assess the risks of silicone and other materials
used in medical devices.
The subcommittees inquired how the FDA establishes
enforcement standards for medical device regulations, how
consistently those standards are enforced, and the appearance
of arbitrary or selective enforcement practices. In addition,
the subcommittees also explored formal and informal procedures
used by the FDA to promulgate enforcement standards.
Pursuant to the results of these inquiries, both
subcommittees became concerned that the FDA's evaluation
standards and enforcement procedures for medical devices may
create product shortages and inhibit innovation and technical
advances. In order to explore these issues further, the
subcommittees convened two oversight hearings.
At the first hearing, testimony was received from: Hon.
Marilyn Lloyd, a former Member of Congress; Hon. James A.
Traficant, Jr. (D-OH), a Member of Congress; Hon. Greg Ganske,
M.D. (R-IA), a Member of Congress; the Commissioner of the FDA;
the Director for the Center for Devices and Radiological Health
from the FDA; the chief medical officer from Vanderbilt
University Medical Center; an official from the department of
pathology from the University of Tennessee in Memphis; an
associate professor of medicine and epidemiology at the Mayo
Clinic; an official from the department of gynecology and
obstetrics from Emory University; medical device patients;
device industry representatives; clinicians; and scientists.
At the second hearing, testimony was received from the FDA
Deputy Commissioner, device industry representatives, and
device manufacturers. The witnesses testified about the
development and promulgation of FDA standards used in
enforcement of statutes and regulations governing the
manufacture and distribution of medical devices.
b. Benefits.--The investigation updated the status of FDA
review of silicone gel breast implants and the impact of that
protracted review on the development and availability of other
life-sustaining devices containing silicones. In addition,
there is a great need for the American public to know that
there is an open and predictable FDA process for promulgating
enforcement guidance. As a result of these hearings, the FDA
committed to more timely device review and a more open process
for the development and issuance of guidance.
c. Hearings.--A hearing entitled ``FDA Regulation of
Medical Devices (Joint Hearing)'' was held on August 1, 1995. A
hearing entitled ``FDA Enforcement Standards for Medical
Devices (Joint Hearing)'' was held on September 14, 1995.
13. Federal Takeover of the Chicago Housing Authority.
a. Summary.--The subcommittee convened an oversight
investigation into the Federal takeover of the Chicago Housing
Authority (CHA) after Congresswoman Cardiss Collins, ranking
member of the Government Reform and Oversight Committee (D-IL),
submitted a request to Committee Chairman William F. Clinger,
Jr., (R-PA) on June 1, 1995, that hearings be conducted in
Chicago on the role of U.S. Department of Housing and Urban
Development (HUD) in the operation of the CHA.
On May 30, 1995, HUD assumed control over the day to day
operations of the ``troubled'' CHA. A declared breach of
contract between CHA and HUD signed by HUD Secretary Henry
Cisneros on June 2, 1995, made the takeover legally effective.
Executed in the wake of the resignation of CHA's Board of
Commissioners on May 26, 1995, the takeover was an
unprecedented HUD action. Although HUD has authority to
intervene in troubled housing agency operations at any time,
HUD has never assumed responsibility for the day to day
operations of a housing agency the size of CHA.
CHA is the Nation's third largest public housing authority
(PHA), surpassed in size only by those of Puerto Rico and New
York city. CHA was created in 1937 by a resolution of the city
of Chicago pursuant to the Housing Authorities Act of the State
of Illinois, and administers over 55,000 public and assisted
housing units serving over 150,000 residents.
The socio-economic status of the resident population of CHA
creates particular challenges for the housing authority. Eleven
of the 15 poorest neighborhoods in the Nation are located in
CHA communities.
CHA is plagued by a poorly conceived and distressed housing
stock, an acutely poor resident population and a historically
mismanaged administrative bureaucracy. HUD's ability to carry
out the CHA takeover effectively has immediate impact on the
people of Chicago and broad implications for the 86 other
housing agencies presently listed as ``troubled'' by HUD. The
subcommittee's hearing focused on HUD's progress at CHA since
the May 30 takeover, the department's short and long term
strategies for reforming CHA and HUD's plans for installing new
leadership and management at the housing authority. At the
hearing, testimony was received from Hon. Henry Cisneros,
Secretary of HUD and other HUD officials; the U.S. General
Accounting Office; panels of tenants; public housing management
experts and city and private sector representatives.
b. Benefits.--Although HUD has not yet articulated a long
term plan to reform CHA and to extricate itself from CHA
management, if the takeover sets CHA on a course for recovery,
HUD's assumption of control of CHA operations may be validated
as an acceptable model of intervention at troubled housing
agencies.
In addition, based on this and the subcommittee's two other
oversight hearings of HUD (on February 13 and 22, 1995), the
committee adopted its fifth report to the 104th Congress on
December 14, 1995 entitled ``The Federal Takeover of the
Chicago Housing Authority--HUD Needs to Determine Long-Term
Implications,'' House Report No. 104-437, December 21, 1995,
Fifth Report by the Committee on Government Reform and
Oversight, Together with Additional Views. (See II.A.2.)
c. Hearings.--A hearing entitled ``HUD's Takeover of the
Chicago Housing Authority (Field Hearing)'' was held on
September 5, 1995.
14. Management of Threats to the Nation's Blood Supply.
a. Summary.--After infection with the HIV virus, there is a
period of time known as a ``window'' in which infection may be
present but antibodies to the virus have not been produced in
sufficient quantity for detection. This window can last up to 6
months in some individuals, but is usually about 20 days.
However, antigens appear and can be detected sooner than
antibodies, reducing the window by 10 days or more.
Subcommittee investigation discovered that on June 23,
1995, the FDA's Blood Products Advisory Committee (BPAC)
recommended against routine HIV-1 antigen screening of blood
donor units. On July 12, subcommittee Chairman Shays wrote to
FDA Commissioner David Kessler urging him not to accept the
BPAC's decision and to approve the immediate licensing of HIV-1
antigen tests for the screening of the Nation's blood supply.
Subcommittee Chairman Shays pointed out that antigen testing
would further close the window of potential infection in
recipients of blood and blood products, a goal which was
consistent with remarks made by Commissioner Kessler at a
September 26, 1994 FDA Conference. Kessler said, ``[The FDA
has] an obligation to foster the development of new
technologies, especially if these technologies hold the promise
of a blood supply that is even safer. This is especially true
for detecting HIV--the AIDS virus. We need to close the
window.''
On August 10, 1995, the FDA announced its recommendation
that, despite the BPAC recommendation, blood establishments
should test donors with new HIV-1 antigen test kits after the
tests become available. Under the new guidance, the FDA
recommended that blood establishments begin screening all blood
and plasma donors with newer test kits for HIV-1 antigen within
3 months after FDA approves one of the kits.
To examine this and other issues raised by the
subcommittee's inquiries, the Human Resources and
Intergovernmental Relations Subcommittee convened two oversight
hearings to discuss efforts by the U.S. Department of Health
and Human Services (HHS) and the blood products industry under
HHS jurisdiction to protect the Nation's blood supply from
emerging infectious agents.
At the October 12, 1995 oversight hearing, HHS Secretary
Donna Shalala provided the agency's response to a recent study
that was critical of past HHS efforts to protect the blood
supply from infectious agents. Secretary Shalala testified that
HHS accepted recommendations of the report released by the
Institute of Medicine (IOM)--HIV and the Blood Supply: An
Analysis of Crisis Decisionmaking (July 13, 1995)--which had
concluded that the medical and governmental response in the
early 1980's to blood-borne HIV infection strongly suggests the
need for greater coordination and more aggressive policies by
HHS to meet the threat of future infectious agents.
In addition, the Secretary named the Assistant Secretary
for Health to the newly created post of Blood Safety Director
and created a Blood Safety Committee which she indicated would
include the FDA Commissioner, the Director of the National
Institutes of Health (NIH), and the Director of the Centers for
Disease Control and Prevention (CDC).
Other hearing witnesses included representatives from the
Committee of 10,000, the National Hemophilia Foundation, the
Hemophilia Federation, the Oklahoma Blood Institute, and
Michigan State University.
A second oversight hearing on the subject was convened on
November 2, 1995, so the subcommittee could consider the blood
industry's response to the IOM report. In addition, the roles
of the CDC and NIH in protecting blood safety were discussed.
Witnesses included representatives from the CDC, NIH, the
American Association of Blood Banks, the Council of Community
Blood Centers, the American Red Cross, the American Blood
Resources Association, the Bayer Corp., the Baxter Healthcare
Corp. and the Armour Pharmaceutical Co.
b. Benefits.--With 4 million patients in the country
receiving transfusions of whole blood and blood components each
year, raising the standards for blood collection and processing
to meet new threats is a critical national priority. These
hearings brought together all the major governmental and
private sector players in the blood safety field and elicited a
new commitment to diligence in protecting against infectious
agents in the blood supply.
c. Hearings.--Hearings entitled ``Protecting the Blood
Supply from Infectious Agents: New Standards to Meet New
Threats'' were held on October 12 and November 2, 1995.
15. The Occupational Safety and Health Administration's (OSHA) New
Strategy for Changing the Way it Does Business.
a. Summary.--On October 17, 1995, the Human Resources and
Intergovernmental Relations Subcommittee convened an oversight
hearing to explore initiatives and programs claimed to have
been adopted by the Occupational Safety and Health
Administration (OSHA) as part of the agency's change in its
strategy for doing business in a technology-based workplace.
The agency had indicated in numerous publications and
announcements that it was seeking to form new partnerships of
employers, workers and OSHA to promote common sense
regulations, focus on results, and reduce red tape.
In the past the agency had earned a ``red tape
reputation.'' The agency was widely perceived as an agency with
a ``gotcha'' mentality, a preoccupation with small technical
violations and governed by confusing, outmoded rules.
OSHA's Assistant Secretary of Labor for Occupational Safety
and Health Joseph A. Dear discussed the innovative programs the
agency has developed to improve workplace protections for
America's working men and women. Assistant Secretary Dear fully
discussed what the agency refers to as the newly reinvented and
responsive--``New OSHA''--and promised that the agency would
continue to become more customer friendly and less driven by
adherence to red tape and technical rules.
In addition to Assistant Secretary Dear, testimony was also
received from: the Associate Director for the U.S. General
Accounting Office (GAO); the director of the Voluntary
Protection Programs Participants' Association; and
representatives from trade unions and the private industry.
b. Benefits.--Through this hearing, the subcommittee was
able to confirm that OSHA's efforts to re-engineer worker
safety standards and enforcement to meet the new realities of
the 21st century workplace are welcomed by business and
workers. Given that no amount of enforcement resources would
ever permit the agency to inspect all of America's workplaces,
cooperation as opposed to confrontation will permit OSHA to
better focus scarce budget resource and meet its core mission
of correcting the most serious hazards in the most dangerous
workplaces.
c. Hearings.--A hearing entitled ``OSHA: New Mission for a
New Workplace'' was held on October 17, 1995.
16. Management of U.S. Department of Housing and Urban Development
Funds in Public Housing Tenant Programs.
a. Summary.--In September 1995, Representative William
Martini (R-NJ), a member of the Human Resources and
Intergovernmental Relations Subcommittee, forwarded to the
subcommittee materials regarding a convention of public housing
tenants sponsored by the National Tenants Organization (NTO).
The subcommittee initiated inquiries to the Department of
Housing and Urban Development (HUD) and several local public
housing authorities regarding the use of HUD funds to attend
the NTO convention which was described as a ``vacation'' in the
promotional material.
The subcommittee also learned that public housing tenants
attended this and other training sessions using funds from
HUD's Tenant Opportunity Program (TOP). At least two tenant
groups obtained advances of anticipated TOP grant awards from
their public housing agencies.
As a result of these inquiries, the subcommittee also
learned that 6 TOP grants had been awarded then rescinded by
HUD in Delaware after questions were raised regarding the level
of consultant fees and the planned use of the funds.
On November 9, 1995, the subcommittee convened an oversight
hearing on possible waste and mismanagement of HUD grant funds
used in public housing tenant programs. Tenant programs support
training and leadership activities in order to empower tenants
for resident management purposes.
The subcommittee investigated whether HUD has appropriately
controlled or monitored TOP program results to ensure that
program objectives are met. Testimony at the hearing was
received from representatives from HUD, HUD's Inspector
General, and from tenant and public housing organizations.
b. Benefits.--Abuses of HUD's management of tenant training
funds suggest fundamental weaknesses that raise concerns about
the goals and effectiveness of certain TOP supported programs.
The subcommittee will continue to monitor TOP and other public
housing programs, as it does other Government programs within
its jurisdiction, so as to ensure that the mission and
integrity of HUD's tenant technical assistance grants and
resident management programs will remain true to their
principles and intended purposes.
c. Hearings.--A hearing entitled ``HUD's Management of
Tenant Empowerment Funds'' was held on November 9, 1995.
17. Status of Major Computer System Development.
a. Summary.--Testimony at earlier oversight hearings on
Medicare claims processing, and General Accounting Office (GAO)
reports on Health Care Finance Administration (HCFA)
acquisition and implementation of a centralized Medicare claims
system, presented troubling questions regarding whether HCFA
had the capacity to develop, procure and implement such a large
computer application. Earlier testimony by HCFA also indicated
the agency had foregone other claims management and program
integrity efforts in favor of placing all their emphasis on the
new Medicare Transaction System (MTS). Based on a GAO analysis,
the subcommittees were concerned that the use of available
claims screening software by HCFA contractors could yield
significant savings to the Medicare program immediately, while
the MTS system was being developed.
To answer these questions, the Subcommittee on Human
Resources and Intergovernmental Relations and the Subcommittee
on Government Management, Information, and Technology convened
a joint oversight hearing on HCFA's MTS project, a proposed
$127 million data system to process Medicare claims and enable
HCFA to detect and control fraud and abuse.
Witnesses at the hearing discussed the status of the MTS
computer programs which HCFA began planning in the early 1990's
and which the agency claims will curb the loss of billions of
dollars annually from fraud and abuse in Medicare claims. HCFA
Administrator Bruce Vladek appeared before the Human Resources
Subcommittee on June 15, and testified that the system would be
fully implemented by late 1999. The subcommittee chairmen and
other members wanted to know whether that schedule would be
kept and whether the system, with potential for significant
cost overruns, would be delivered on budget.
b. Benefits.--The hearing provided necessary oversight of
the MTS contract terms and milestones. The subcommittees
learned that HCFA's schedule and cost estimates for MTS were
neither reliable nor realistic, and that HCFA was using an
inconsistent approach to define current and future system
requirements. This information will be beneficial to those
guiding health care management and anti-fraud policy pending
the implementation of the MTS system.
c. Hearings.--A joint hearing entitled ``Oversight and
Review of Medicare's Transaction and Information Systems'' was
held on November 16, 1995.
18. Radioactive Contamination of 27 People, Including Researcher Dr.
Maryann Ma, in June 1995 at the National Institutes of Health
(NIH).
a. Summary.--A study by the Human Resources and
Intergovernmental Relations Subcommittee, requested by
Congresswoman Constance Morella (R-MD), was conducted over a 5-
month period to determine if the National Institutes of Health
(NIH) was negligent in conforming to safety regulations in its
handling of nuclear materials. On June 28, 1995, a
contamination of 27 people occurred at the NIH Main Campus in
Bethesda, MD, Building 37, Fifth Floor, Laboratory 5D18.
The subcommittee also studied the 3-year safety record of
NIH to see if there was a pattern of safety violations present
at the facility. These studies were aided through
documentation, meetings and conversations with the Nuclear
Regulatory Commission (NRC) and with the NIH.
b. Benefits.--The subcommittee study, in conjunction with
an NRC investigation, established that NIH's current handling
of nuclear materials at its Bethesda facilities are not a
threat to the safety of NIH employees, the community, or the
public at large.
c. Hearings.--None.
19. Unfunded Mandates in Medicaid.
a. Summary.--The subcommittee examined the cost of unfunded
Medicaid mandates and the inflexibility of the joint Federal/
State Medicaid program, which adds burdensome costs to the
States and prohibits them from taking full advantage of market
efficiencies which exist in the private sector.
Medicaid's enacting legislation and the subsequent
regulations dictate that every State provide specific services
to specific populations. Federal mandates in the Medicaid
program expanded rapidly between 1983 and 1993 to include such
requirements as catastrophic care provisions, mandated coverage
for families leaving the AFDC program, coverage for women and
children with incomes at 133 percent of the poverty line, and
mandated coverage for children up to age 18 at 100 percent of
the poverty line. Medicaid costs have more than tripled since
this expansion and program enrollment has grown by more than 50
percent. Viewed by States as the most burdensome mandate, the
1980 Boren Amendment was interpreted (through substantial
litigation) to require a cost-based payment standard, where all
costs incurred by providers must be reimbursed. Without program
modifications, CBO and GAO project Medicaid spending is likely
to double in the next 5 to 7 years, having serious fiscal and
human consequences in the States.
In response to this rapid growth of unfunded Federal
mandates, States have attempted Medicaid delivery reforms in
order to reduce their budgets. Governors are in agreement on
the need for more flexibility in the Medicaid program. Through
the waiver process, States (approximately half) have requested
greater flexibility to address issues related to financing and
delivery of care, arguing that if States are receiving less
money to meet the increased eligibility and services coverage
requirements then they must have the flexibility to operate
programs that can respond to cost efficiencies. In response to
the increased cost burden to State budgets, State reform
initiatives have resulted in 40 States now enrolling a portion
of their Medicaid population in some form of managed care.
To address the issue, the Clinton administration's FY 96
budget for Medicaid proposed a per capita cap on Federal
Medicaid spending to limit growth, control costs of per
beneficiary expenditures (keeping in place the mandated
eligibility and services), contribute savings to the Federal
budget, and provide States with additional flexibility. The
House Republicans proposed that Medicaid be turned into a block
grant program, called ``Medigrant.''
Those States testifying agreed they would like authority to
design effective, innovative health care programs responsive to
the special needs of their respective States, arguing that
changes are imperative because the current rate of growth in
State Medicaid spending will exceed the rate of total State
spending ability, at which point the States will be forced
either to increase taxes or to divert money from other
important State programs to Medicaid.
GAO reviewed for the panel those States that have been
involved with innovation and reform in their Medicaid programs,
elaborating on the States' experiences transitioning to new
delivery systems.
b. Benefits.--The hearing served as a forum to broaden the
discussion of unfunded mandates and as such, helped Members of
Congress and policymakers quantify and assess the cost of the
unfunded Medicaid mandates to the States in their delivery of
Medicaid services to beneficiaries. The Boren Amendment was
cited as the most costly expansion mandate, which State
officials feel should be repealed in order to help States
reduce the escalating cost of Medicaid services.
c. Hearings.--A hearing entitled, ``Unfunded Mandates in
Medicaid'' was held on January 18, 1996.
20. HUD Management of Tenant Initiative Programs.
a. Summary.--On November 9, 1995 the subcommittee held a
hearing to hear testimony about the Department of Housing and
Urban Development's (HUD) role in the National Tenants
Organization (NTO) August 1995 conference in Puerto Rico. At
that hearing the subcommittee received strong indications that
more than $330,000 in Federal taxes were inappropriately spent
on the conference and that there was little substantive
training offered. As a result, the subcommittee asked the
Inspector General to investigate HUD's active, visible and
taxpayer-funded support for a convention advertised as a
vacation.
At the February 29, 1996 hearing the Inspector General
testified among other things, that HUD officials played a key
role in planning and conduction the conference, the NTO cleared
an estimated $35,000 to $45,000 from the conference, little
substantive resident training was provided, there was
substantial lobbying and advocacy against Republican housing
proposals, and HUD's participation in the convention violated
department policies issued by HUD's Office of General Counsel
regarding participation in conferences sponsored by non-Federal
entities. The Inspector General also made a number of specific
recommendations on steps HUD needed to take to remedy the
problems and prevent future ones.
Kevin Marchman, the Acting Secretary for Public and Indian
Housing at HUD, told the subcommittee the steps HUD was taking
to implement the Inspector General's recommendations and to
strengthen HUD's internal controls and management. Also
testifying at the hearing were Maxine Green, president of the
NTO; Miguel Rodriguez, the executive director of the Puerto
Rican Housing Authority; Ed Moses, deputy executive director of
community relations and involvement for the Chicago Housing
Authority; and Patricia Arnaudo, Deputy Director for Program
Development at HUD.
b. Benefits.--Tenant empowerment programs, such as TOP, are
an important path out of isolation and dependence for those who
use them. The investigation and hearing identified the
weaknesses that led to the misuse of the TOP funds, ensured
that steps were being taken to rectify the problems, and
strengthened HUD's management and internal controls.
c. Hearings.--A hearing entitled, ``HUD Management of
Tenant Initiative Programs'' was held on February 29, 1996.
21. The Status of Efforts to Identify Persian Gulf War Syndrome.
a. Summary.--The subcommittee investigated issues related
to the Gulf War veterans' illnesses and convened four hearings
during 1996 as a result of those investigations. These hearings
began with a primary concern--how ongoing efforts to diagnose,
treat and compensate Gulf War veterans can be more sharply
focussed and urgently pursued.
The first two hearings, in March 1996, dealt with veterans'
symptoms and complaints about the handling of their health
problems by the VA, especially about inappropriate medical
treatment or denial of treatment, compensation issues, and lack
of funded research by the VA into causes of their illnesses.
The subcommittee also wanted to ensure that any research
programs conducted by the Departments of Defense (DOD), Health
& Human Services (HHS), and the Environmental Protection Agency
(EPA), were focussed and coordinated. Witnesses in these
hearings included sick veterans, veterans service
organizations, the VA, and non-government medical research
experts.
The third hearing in June dealt with coordination of Gulf
veterans issues between the DOD and VA, including medical
recordkeeping and compensation procedures. Witnesses included
DOD and VA health and compensation officials. The fourth
hearing in September covered typical symptoms of sick Gulf
veterans, studies of effects on humans and animals to low level
chemical exposures, and probable exposures of large numbers of
troops to chemical warfare agents and other toxins during the
war. Witnesses were from the VA, EPA, Central Intelligence
Agency (CIA), Gulf War Research Foundation, and non-government
experts from the field of neurology and toxicology.
The September hearing was critical and a turning point in
the subcommittee's investigation. It was established that the
typical complaints of Gulf veterans--chronic fatigue, flu-like
symptoms, rashes, joint pain, headaches, gastrointestinal
problems and other maladies--are similar to known effects on
humans who have been exposed to organophosphates, such as
pesticides and other chemical agents. Organophosphates are
chemically related to sarin and other chemical warfare agents.
Until recently, DOD had denied that chemical weapons were
deployed or used in the Gulf. They also denied that troops were
exposed to chemical agents, in spite of information to the
contrary available to the Pentagon from reliable sources such
as UN inspectors and Czech detection experts. Based on this DOD
position, the VA appears to have given little priority to the
possibility of low level chemical exposures in their diagnosis,
treatment and compensation of sick Gulf War veterans.
In the September hearing, Dr. Frances Murphy, Director of
the VA Environmental Health Service, conceded in testimony that
the VA research agenda through 1995 placed a low priority on
low level chemical warfare agent exposure ``because military
and intelligence sources had stated that U.S. troops had not
been exposed to chemical agents.''
In June, DOD finally admitted that 400 troops may have been
exposed to chemical agents. In August, DOD raised the exposure
estimate to 1,100 troops; in September to 5,000; and in October
to more than 20,000. And recently the Associated Press quoted a
high Pentagon official as conceding that ``big numbers'' of
130,000 troops could have been exposed. These probable
exposures came from fallout following the detonation of Iraqi
munitions bunkers at Khamisiyah and the air bombardment of
Iraqi chemical/biological weapons factories.
The health problems of some veterans may have come also
from other sources such as: the heavy use of pesticides and
insect repellants during the war, leaded diesel fuel used in
vehicles and for heating and dust mitigation, radioactivity
from depleted uranium shells fired at Iraqi tanks, dense smoke
from the oil well fires, parasites that cause a chronic
infection called leishmaniasis, and perhaps the side effects of
troop inoculations in combination with taking the experimental
anti-nerve gas drug, pyridostigmine bromide.
It is of major concern that many VA doctors have insisted
since the war's end that the veterans' symptoms are physical
manifestations of Post-Traumatic Stress Disorder (PTSD). While
this may be true in some cases, this may also indicate an over-
reliance on theories of psychological causation to the
exclusion of obvious physical toxins and stressors.
With DOD's admission of troop exposures to low level
chemical warfare agents, the next concern of the subcommittee
was the extent to which DOD and the VA acknowledge the effects
of those exposures.
In testimony before the subcommittee, Dr. Stephen Joseph,
DOD's Assistant Secretary for Health Affairs, stated that ``. .
. chronic symptoms or physical manifestations do not later
develop among persons exposed to low levels of chemical nerve
agents who did not first exhibit acute symptoms of toxicity.''
This statement was challenged at the September 1996 hearing.
A 1974 study of low level exposures (e.g. workers in
chemical weapons plants) entitled ``Delayed Toxic Effects of
Chemical Warfare Agents,'' by German scientist Dr. Karlheinz
Lohs, tends to refute Dr. Joseph's testimony. The study
concludes that ``. . . even in the case of exposure to very
slight amounts [of low level mustard agents] which do not
necessarily bring on acute symptoms, toxic reactions may later
set in.''
The question of whether delayed or chronic effects result
from exposure to low level chemical agents without first having
acute or immediate symptoms is critical to veterans. The answer
determines whether or not Gulf veterans will be compensated
appropriately for injuries suffered during the war. Many sick
veterans did not report acute symptoms during the war but later
developed chronic symptoms, thereby being denied higher
compensation for war-related injuries. On the other hand, many
veterans report that they may have had flu-like symptoms or
rashes in-theater which they ignored as part of serving in a
harsh, desert environment. These ``low-level'' symptoms could
be considered acute, but mild, reactions to low level chemical
agents.
In December, the subcommittee held two additional hearings
to discuss recent revelations about chemical detections and
exposures in the Gulf War, and to determine the extent to which
VA research and treatment protocols are being modified to take
these disclosures into account. A panel of active-duty military
officers testified regarding their experiences during Operation
Desert Shield. Two of the witnesses operated sophisticated
chemical detection equipment during the war. They testified
that positive readings for mustard and other chemical warfare
agents had been verified and recorded at locations other than
Khamisayah. The third veteran testified that he heard chemical
alarms and was told an Iraqi chemical mine had been detonated.
He believes his subsequent medical problems, including
Amyotrophic Lateral Sclerosis, or Lou Gherig's Disease, are the
direct result of his exposure to residual chemicals after the
``all clear'' was sounded and his unit proceeded through the
contaminated area.
A former Central Intelligence Agency analyst testified that
standard intelligence sources were not relied upon to reach the
conclusion that no chemical warfare agents were present in the
Gulf War. Instead, the analyst believes the agency relied
solely on representations made by the Department of Defense.
At the second hearing, veterans of the Gulf War testified
about the difficulty in getting the VA health system to
recognize war-related illnesses. The VA's Chief Public Health
and Environmental Hazards Officer testified that while the VA
``has always remained open to the possibility'' of chemical
exposures, no veteran had even been diagnosed as suffering from
the after-effects of such an exposure. She testified that the
VA health screening protocol for Gulf War veterans was modified
in late 1995 to ask specific questions about toxic exposures.
She also said epidemiological research into the effects of low-
dose chemical exposures was just beginning.
Two VA doctors who treat Gulf War veterans also testified.
They believe the various combinations of symptoms and illnesses
presented by Gulf War veterans are the result of exposures to
one or more environmental hazards present in the Gulf,
including chemical warfare agents.
b. Benefits.--The series of subcommittee hearings focused
attention on the Persian Gulf War veterans' illnesses and
helped produce admissions from the DOD that U.S. troops were
exposed to chemical warfare agents. The investigation and
hearings generated pressure on the VA to change their medical
protocol and compensation policies toward sick Gulf veterans.
The VA has also updated its research priorities and has
begun studies into the long term health effects of low-dose
exposures to chemical warfare agencts and other toxins. Also as
the result of increased congressional scrutiny, the Department
of Defense increased the size of its Gulf War Illnesses
Investigation Team from 12 to more than 100 investigators and
staff.
c. Hearings.--Hearings entitled, ``The Status of Efforts to
Identify Persian Gulf War Syndrome'' were held on March 11,
March 28, June 25, and September 19, 1996. Hearings entitled,
``Persian Gulf Veterans' Illnesses: Intelligence on Chemical/
Biological Exposures'' were held on December 10 and 11, 1996.
22. Unfunded Mandates Reform Act of 1995: A One Year Review.
a. Summary.--On March 22, 1996, exactly 1 year after the
bill was signed into law, the subcommittee convened a hearing
that focused on implementation and the impact of the Unfunded
Mandates Reform Act of 1995 (Public Law 104-4).
The act requires the legislative and executive branches to
identify and quantify implementation costs of statutory and
regulatory mandates on State and local governments. The
subcommittee has been monitoring Federal department compliance
with the requirements of Title II of the act regarding analysis
of mandates in proposed and final regulations.
Title II also requires the executive branch to conduct an
explicit analysis of proposed and final rules to quantify the
costs and benefits of mandates and identify the most cost
effective, least burdensome regulatory approach. Departments
and agencies are required to consult with State and local
governments, and the Office of Management and Budget (OMB) is
directed to collect those regulatory statements and forward
them ``periodically'' to the Congressional Budget Office (CBO).
OMB is required to submit a written report detailing compliance
by each agency during the preceding year.
The subcommittee also been monitored the design and
implementation of the study of existing mandates required under
Title III of the act. Title III required the Advisory
Commission on Intergovernmental Relations to (a) study issues
involving the calculation of costs and benefits of mandates on
State and local governments, (b) conduct a study and make
recommendations to the President and Congress concerning the
impact of existing mandates on intergovernmental (Federal-
State/local) relations, and (c) monitor and evaluate the
implementation of the act. Testimony was received from
representatives from Federal departments and agencies; State
and local governments; community organizations, and Members of
Congress.
b. Benefits.--As a result of the investigation and hearing,
the subcommittee found that OMB had concluded in the report
required by Title II that only 16 out of more than 3,000
proposed or final rules met the act's threshold for a detailed
cost/benefit analysis and review. Moreover, the subcommittee
found that OMB compliance with the requirement to share these
analyses with Congress had been minimal since enacted of the
act. Although reporting is required ``periodically,'' not one
of the required statements had been forwarded to CBO prior to a
day or two before the subcommittee's hearing convened. Then all
16 arrived at once, just in time to be included in the report.
The subcommittee was assured that future compliance would be
more periodic and less episodic.
Additionally, the subcommittee discovered that agencies had
``begun considering, but had not yet developed'' pilot programs
to reduce reporting and compliance requirements on small
governments, as required by the act.
c. Hearings.--A hearing entitled, ``Unfunded Mandates
Reform Act of 1995: A One Year Review'' was held on March 22,
1996.
23. Job Training That Works/Common factors in effective job training
programs.
a. Summary.--At the subcommittee's request, the General
Accounting Office (GAO) prepared a report on the common
features shared by effective job training programs. The GAO
studied six programs that successfully helped graduates attain
self-sufficiency. It was learned that the programs employed
four key features to ensure that participants were successful
in obtaining and maintaining employment. First, there was a
focus on ensuring that participants were committed to training
and getting a job. Second, the programs removed barriers that
could limit clients' ability to finish training and get and
keep a job. The third feature was improving participants'
employability skills as part of their training curriculum. This
included skills such as dependability, promptness, ability to
work effectively in groups, and the ability to resolve
conflicts appropriately. The fourth feature was linking
occupational skills training with the local labor market so
that the project could monitor the local labor market and make
adjustments in course offerings to meet employer demand.
At the hearing the GAO testified about its work and
findings. The subcommittee also heard from the directors and
graduates of two of the programs reviewed by the GAO, and two
additional successful job training programs.
b. Benefits.--As the GAO noted, in fiscal year 1995, the
Federal Government appropriated about $20 billion for about 163
employment training programs yet large numbers of individuals
remain unprepared for employment. The report and hearing form a
basis from which to start in redesigning the structure and
delivery of Federal job training so that it more successfully
helps disadvantaged adults acquire and maintain permanent
employment.
c. Hearings.--A hearing entitled, ``Job Training That
Works'' was held on April 18, 1996.
24. Preventing Teen Pregnancy: Coordinating Community Efforts.
a. Summary.--The subcommittee examined strategies at the
community level to prevent and reduce teen pregnancy in
America. The subcommittee found that teen pregnancy is a near
certain path to poverty, and that poverty is a major underlying
cause of teenage childbearing. More than 1 million American
teenagers become pregnant each year the rate of births per
1,000 teenagers (age 15-19) in the United States is six times
the rate of France and Italy, and twice the rate of Great
Britain. About half the pregnant teens in the United States
will go on to give birth, and of those, 72 percent will be
unmarried. Childbearing teens make up less than one-third of
out-of-wedlock births, but for a variety of reasons, they
represent a disproportionate economic and social burden to
society. Most teenage parents who drop out of school never
return. Teenage mothers have half the lifetime earnings of
women who postpone childbearing under age 20. Teen mothers are
at greater risk of developing complications in pregnancy and of
delivering low birth weight babies due to poor prenatal care.
Low birth weights in turn are associated with increased infant
mortality, illness and disabilities.
The subcommittee also found that adult men father more than
half the children born to 15 to 17 year old mothers. This
shocking finding, combined with information on the extent to
which initial sexual activity by teenage girls is involuntary,
shattered some of the myths surrounding teen pregnancy.
At on oversight hearing on Federal, State and private
sector programs to reduce teen pregnancy, testimony was
received from: Dr. Henry. W. Foster, Jr., senior advisor on
teenage pregnancy to President Clinton, and White House liaison
to the National Campaign to Prevent Teenage Pregnancy; the
National Campaign to Prevent Teen Pregnancy; U.S. Congress; the
U.S. Department of Health and Human Services; the Maryland
Lieutenant Governor; Child Trends; Advocates for Youth; the
Best Friends Foundation; and the Institute for Responsible
Fatherhood and Family Revitalization.
b. Benefits.--The subcommittee's investigation and hearing
into teen pregnancy prevention programs brought needed public
attention to the need for greater public/private collaboration
in the design and implementation of effective intervention
programs. This was the first examination of Federal, State and
private teen pregnancy prevention programs since publication of
new studies attributing the majority of under-age pregnancies
to have been caused by men over the age of 20. This finding
argues for a greater emphasis on enforcement of statutory rape
laws, along with traditional program focus on abstinence and
education about the results of early parenthood.
c. Hearings.--A hearing entitled, ``Preventing Teen
Pregnancy: Coordinating Community Efforts'' was held on April
30, 1996.
25. Food Safety: Oversight of the Food and Drug Administration's Center
for Veterinary Medicine.
a. Summary.--The subcommittee reviewed the performance of
the FDA's Center for Veterinary Medicine (CVM), particularly
regarding FDA's failure to issue a regulation prohibiting
feeding of ruminant protein to other ruminant animals. This was
a step recommended by the World Health Organization in
preventing the spread of Bovine Spongiform Encephalopathy (BSE)
or ``Mad Cow Disease'' in countries currently believed to be
free of the disease, such as the United States.
The subcommittee convened an oversight hearing into FDA's
management of the programs of the Center for Veterinary
Medicine on May 10, 1996. The hearing examined the lack of
adequate funding and program priority for veterinary medicine
issues overseen by FDA's Center for Veterinary Medicine as
evidenced by the lengthy review process for new animal drugs.
Testimony was provided by: FDA Deputy Commissioner Michael
Friedman; Dr. Frederick Murphy, University of California School
of Veterinary Medicine; Dr. Lester Crawford, Association of
American Veterinary Medical Colleges; Dr. Gary Weber, National
Cattlemen's Beef Association; Dr. Don Franco, National
Renderers Association; Robert Hahn, Public Voice for Food and
Health Policy; Dr. John Welser, Pharmacia and Upjohn; Dr.
Sherbyn Ostrich, American Veterinary Medical Association and
Dr. Cindy Wolf, American Sheep Industry Association.
b. Benefits.--Delays in the review of new and supplemental
animal drug applications were identified and corrective
measures were examined. At the hearing and during subsequent
meetings with the subcommittee, the FDA took further action on
the issuance of the regulation banning the feeding of ruminant
protein to other ruminant animals.
c. Hearings.--A hearing entitled, ``Food Safety: Oversight
of the Food and Drug Administration's Center for Veterinary
Medicine'' was held on May 10, 1996.
26. Food Safety: Monitoring of Food Borne Illnesses by the Centers for
Disease Control, Food and Drug Administration and U.S.
Department of Agriculture.
a. Summary.--Three of the four pathogens considered most
important by the Centers for Disease Control were unrecognized
as causes of food borne illnesses just 20 years ago. While the
food supply becomes more vulnerable to pathogens, the food
safety system on which we rely appears fragmented among three
different Federal agencies.
Therefore, subcommittee investigated issues affecting food
safety and convened an oversight hearing on the monitoring of
food borne illnesses by CDC, FDA and USDA. The oversight
hearing evaluated the need for closer coordination, better
surveillance and implementation of scientifically based hazard
control systems. Testimony was taken from: Dr. David Satcher,
Director, Centers for Disease Control; Dr. Fred Shank, Food and
Drug Administration; Dr. Glen Morris, USDA; Mr. Robert
Robinson, GAO; Dr. Ban Mishu Allos, Vanderbilt University
School of Medicine; and Dr. John Kobayashi, Washington State
Department of Health.
b. Benefits.--The growing threat to the public health posed
by food borne pathogens, such as Campylobacter jejuni which
causes over 40 percent of the Nation's cases of the paralytic
illness Guillaine-Barre Syndrome, was brought to the attention
of the public. The inadequate monitoring of food borne
illnesses by three different Federal agencies as well as State
governments was identified and corrective actions suggested.
c. Hearings.--A hearing entitled, ``Food Safety: Monitoring
of Food Borne Illnesses by the Center for Disease Control, Food
and Drug Administration and U.S. Department of Agriculture''
was held on May 23, 1996.
27. The Development of Successful Public Housing Resident Management
(Field Hearing).
a. Summary.--This hearing was the third oversight hearing
on resident management programs in public housing developments.
The field hearing examined the elements of success at Cochran
Gardens in St. Louis, MO. Cochran Gardens has operated one of
the best tenant management programs in the country and the
hearing examined the elements that make it, and other programs
a success. Effective resident programs can provide superior and
more cost effective site management than public housing
authority management.
At the hearing the subcommittee learned that the elements
of successful resident management programs include strong
tenant leadership, active housing authority support, and
effective Department of Housing and Urban Development
oversight.
The subcommittee heard from non-resident public housing
professionals as well as from residents engaged in resident
management.
b. Benefits.--The hearing demonstrated that resident
management programs can be effective and can build strong
communities and improve the lives of their residents. The
hearing identified the key elements of successful resident
management programs, challenges all programs to use those
elements to meet the same standards of success.
c. Hearings.--A hearing entitled, ``The Development of
Successful Public Housing Resident Management'' (Field Hearing)
was held on June 3, 1996.
28. Department of Education Oversight: Gatekeeping.
a. Summary.--Gatekeeping is the process for screening
higher education institutions for participation in Federal
student financial aid (SFA) programs. Institutions must meet
standards set by the triad of State licensing authority,
accrediting agencies, and the U.S. Department of Education.
Effective front-end controls are more efficient than back-end
institutional monitoring and enforcement. Gatekeeping is
particularly important in controlling non-degree-granting
vocational trade schools, which pose the greatest risk to SFA
programs in terms of fraud, waste, and abuse.
b. Benefits.--The Department of Education discussed plans
for a more focused oversight effort, including plans to realign
staffing toward a case-management approach to enforcement.
State government representatives made recommendations for a
strong State role in improving institutional integrity
following the elimination of State Postsecondary Review
Entities. State governments can be effective due to their
proximity to institutions within their borders, and because,
unlike accrediting bodies, State governments are independent
and accountable to the public. Also discussed were
institutional concerns about over reliance on student loan
default rates to determine institutional quality. High default
rates supersede other regulatory reviews that institutions must
pass to participate in Title IV.
c. Hearings.--A hearing entitled, ``Department of Education
Oversight: Gatekeeping'' was held on June 6, 1996.
29. Oversight of the Department of Labor's Efforts Against Labor
Racketeering.
a. Summary.--As a result of an oversight review of
Department of Labor Enforcement activities, the subcommittee
found that racketeering is costly to the interests of union
members in particular, and to society as a whole. Corrupt union
officials betray the trust bestowed upon them as elected
representatives of union workers and undermine the public
confidence and trust in the collective bargaining agreement
system. In some cases, millions of dollars of workers' dues and
benefit moneys have been siphoned off by organized crime
through outright embezzlement or more sophisticated devices,
such as loans or excessive fees paid to corrupt union and trust
fund service providers. Millions of consumers unknowingly pay
organized crime what amounts to a surcharge on a wide range of
goods and services due to organized crime's exercise of power
in the marketplace.
The subcommittee also examined the Department's current
anti-racketeering strategy in view of the administrative and
legislative recommendations made 10 years ago by the
President's Commission on Organized Crime (Report to the
President and Attorney General: ``The Edge: Organized Crime,
Business and Labor Unions,'' 1985). The subcommittee found that
despite the recommendations of the Presidential Report more
than 10 years ago, despite the work of the Labor Secretary's
1989 Task Force on Enforcement, despite a report in 1990 and
subsequent reports by the DOL Inspector General of ``material
weakness'' in DOL criminal enforcement efforts, and despite
more than 5 years of in-depth oversight by the Inspector
General, DOL enforcement activities ``remain inconsistent and
uncoordinated with no integrated approach to common criminal
enforcement issues.'' Moreover, the Report's call for ``New
directions for the Department of Justice and fundamental
changes in the structure and operation of the Department of
Labor, the two principal agencies charged with responsibilities
involving organized crime, labor organizations, and businesses'
had not been implemented. The Department continues to resist
repeated call to integrate and coordinate criminal and civil
enforcement efforts to provide a sharper focus on labor
racketeering. As a result, the Department appears to remain an
inattentive, at times unwilling, partner in the fight against
organized crime in labor unions.
The subcommittee convened an oversight hearing to assess
the Department of Labor's (DOL) strategies designed to detect,
prosecute and eliminate labor union corruption. Testimony was
received from representatives from the Office of Labor-
Management Standards, the Pension and Welfare Benefits
Administration, the Office of the Solicitor and the Division of
Labor Racketeering, a part of the Office of Inspector General--
all DOL operations responsible for the effectiveness and
efficiency of the agency's efforts against criminal labor
racketeering activity.
b. Benefits.--The investigation and hearing were the first
attempt in many years to resolve the issue of what it would
take to overcome the legal, political and bureaucratic barriers
that prevent the Department of Labor from playing a more
effective role in the detection of labor racketeering and the
protection of union members' rights and funds from exploitation
by organized crime. Testimony at the hearing exposed
bureaucratic resistance within DOL to a more unified, effective
assault on labor racketeering. Calls for uniform case
information, Department-wide outcome tracking, consistent
information sharing and cross-agency training cooperation were
pronounced too difficult, too complicated, too time-consuming,
too costly, not feasible, unnecessary, impractical or secondary
to the unique mission each enforcement entity within the DOL
responsible for preventing labor racketeering.
The Department of Labor and the Inspector General committed
to a review of longstanding recommendations and a resolution of
outstanding coordination issues.
c. Hearings.--A hearing entitled, ``Oversight of the
Department of Labor's Efforts Against Labor Racketeering'' was
held on July 13, 1996.
30. Oversight of the Department of Education and the National Institute
of Mental Health: Current Approaches to Attention Deficit/
Hyperactivity Disorders.
a. Summary.--Attention Deficit/Hyperactivity Disorder
(ADHD) has become the Nation's leading psychiatric disorder.
The Department of Education estimates that 3 to 5 percent, or
up to 2\1/2\ million school-aged children, have ADHD. As
measured by growth in the use of methylphenidate, or Ritalin,
the most commonly prescribed drug treatment for ADHD, the
number of children diagnosed with the disorder has grown two
and a half times since 1990. ADHD diagnoses in adults are also
increasing dramatically. These trends have profound
implications for health research and education policy.
The subcommittee review and hearing examined what
constitutes a proper diagnosis of the disorder, why there has
been an increase in the diagnosis of individuals with the
disorder, the appropriate treatment for the disorder, the role
of medications such as methyphenidate (Ritalin) in treatment,
the implications for Federal educational and health policies of
current information and planned research, and the appropriate
accommodations by schools to the diagnosis and treatment.
b. Benefits.--The hearing helped address the uncertainty
and controversy surrounding the proper definition, accurate
diagnosis and appropriate treatment of ADHD. It also identified
the significance of the problem and its implications on Federal
education policy and research priorities.
c. Hearings.--A hearing entitled, ``Oversight of the
Department of Education and the National Institute of Mental
Health: Current Approaches to Attention Deficit/Hyperactivity
Disorders'' was held on July 15, 1996.
31. Consumers and Health Informatics.
a. Summary.--With today's health care consumers demanding
more and more information at ever increasing speed in receiving
that information, the subcommittee explored the accessibility
of health care information to consumers through the use of
computers and other telecommunication tools. A report prepared
by GAO at the request of subcommittee Chairman Christopher
Shays, titled ``Consumer Health Informatics: Emerging Issues,''
was released at the hearing.
The GAO report stated that health informatic systems are
capable of providing many different types of health related
information to consumers, giving them additional information
resources to assist them in making more informed choices and
decisions as it relates to their health care. The information
benefits health care consumers in areas such as the pros and
cons of elective surgery, self-care techniques when
appropriate, preventative habits and life style choices,
training and practice patterns of physicians, medically
approved alternative types of treatments, et cetera. In
addition, medical practitioners have the benefit of easily
accessible patient records and updates on the latest medical
practice techniques.
HHS highlighted the growth in consumer interest in the data
sources available through their information programs, noting
that consumers are seeking more detailed health informatics,
but are limited in gaining access. HHS reported their primary
informatics efforts are coordinated in four main areas: (1) the
direct provision of information through these technologies; (2)
coordination to improve access to consumer health informatics;
(3) partnerships with other pubic and private organizations to
extend the reach and impact of consumer health informatics; and
(4) research and development and evaluation.
Witnesses from private sector organizations and medical
facilities presented testimony about their specific health
information projects which are providing health information
products, infrastructure, data bases and information banks to
help disseminate health care information more widely to health
care consumers in a variety of settings.
b. Benefits.--The hearing highlighted increased demand for
health care related information, the potential cost savings in
overall health care dollars spent and the benefit to consumers,
at the same time calling attention to the problems associated
with accessability, quality, privacy and availability of such
information.
c. Hearings.--A hearing entitled, ``Consumers and Health
Informatics'' was held on July 26, 1996.
32. The Management of HUD's Section-8 Multi-Family Housing Portfolio.
a. Summary.--The subcommittee examined this issue to begin
to address a potential multi-billion dollar housing problem.
The cost of rent subsidies on more than 700,000 units of low-
income, multi-family housing will soon be unsustainable. As a
result, the Federal Housing Administration (FHA) will be forced
to pay up to $18 billion on defaulted mortgages. Without
definitive administrative and legislative action, this will
mean that the place that 1 million Americans call home will be
left to decay, or be torn down.
At the hearing the subcommittee heard from the Department
of Housing and Urban Development (HUD) about its plans to
address this problem. The subcommittee also learned from the
General Accounting Office (GAO) that there are three main
factors that have caused this problem. These factors are high
subsidy costs, high exposure to mortgage insurance loss, and
the poor physical condition of many properties. These factors
can be attributed to program design flaws that inflate
subsidies above market rents and place all the risk of
financial loss on HUD. The GAO also told the subcommittee that
weakness in HUD's oversight and management of its multi-family
portfolio has permitted the physical and financial problems
facing these units to fester and grow.
In addition to hearing from the GAO, the subcommittee
learned what past efforts HUD took to address this problem and
why they failed, and HUD's current plans and why HUD expects
them to succeed.
b. Benefits.--The hearing began to identify the causes and
depth of a potentially multi-billion dollar problem. The
hearing also examined the management and information challenges
facing HUD so that any proposed solutions are made with a
complete understanding of the capacity to structure and manage
such an undertaking.
c. Hearings.--A hearing entitled, ``The Management of HUD's
Section-8 Multi-Family Housing Portfolio'' was held on July 30,
1996.
33. Off-Label Drug Use and FDA Review of Supplemental Drug
Applications.
a. Summary.--The subcommittee evaluated the extent of off-
label drug use in cancer, rare disease and pediatric
indications and the rate at which supplemental indications are
added by the FDA to the labeling of already marketed drugs. GAO
testified that approximately 90 percent of cancer drug use, 80
percent of pediatric use and 80-90 percent of drugs used to
treat rare diseases are used off-label. For 50 million
children, 40 million cancer patients and 20 million Americans
suffering from rare, or orphan, diseases, most of their
treatments are off-label. While perfectly legal, the widespread
off-label use of medicines raises significant public policy and
public health issues. Physicians need label information to
treat patients effectively. Patients need the same information
to make decisions about their own care. Both public and private
health care payers need safety and efficacy data upon which to
base reimbursement policies GAO and representatives of Tufts
University Center for Drug Development testified that FDA's
review of supplemental indications in the past was not timely.
Testimony was heard from: Sarah Jagger, GAO; Dr. Joseph
DiMasi, Tufts University Center for Drug Development; FDA
Deputy Commissioner Michael Friedman; Dr. Carolyn Runowicz,
American Society of Clinical Oncology; Dr. Ralph Kauffman,
American Academy of Pediatrics; Abbey Meyers, National
Organization for Rare Diseases and Dr. William Kennedy, Zeneca
Pharmaceuticals (representing the Pharmaceutical and Research
Manufacturers of America).
b. Benefits.--This hearing examined the impact of the
absence of up-to-date labeling for drugs used by nearly half of
America's patients and the adverse impact this lack of
information has on medical care. At the hearing, FDA, patient
groups, physicians and the pharmaceutical industry pledged to
address the problem of inadequate drug labeling and problems
with FDA's review of supplemental indications for already
marketed drugs.
c. Hearings.--A hearing entitled, ``Off Label Drug Use and
FDA Review of Supplemental Drug Applications'' was held on
September 12, 1996.
34. Investigation into Possible Misuse of ``New Age'' Training Programs
by Federal Departments and Agencies.
a. Summary.--On February 21, 1996, the subcommittee
directed an inquiry to the Equal Employment Opportunity
Commission (EEOC) regarding the number and type of objections
or complaints regarding training programs, including diversity,
management, motivation, ``new age,'' and other work training
programs.
On March 15, 1996, the EEOC reported a total of 22 charges
made against private sector employers and no charges made
against public sector employers. Of the 22 charges located, 8
had Letters of Determination issued citing a violation of Title
VII of the Civil Rights Act of 1964, as amended, on the basis
of religious discrimination. In addition, in seven of the cases
it is clear that the respondent conducted its own training.
The EEOC analysis indicated that 17 of the 22 charges
involved allegations that employees were inappropriately
required to participate in Church of Scientology training
sessions or religious practices and/or were told to utilize
Church of Scientology philosophies in conducting their work.
The other charges involved a diffuse set of ``new age''
practices that employees found objectionable.
On May 29, 1996, the subcommittee directed inquiries to the
Federal departments and agencies within its oversight
jurisdiction regarding the impact of ``new age'' training
programs, including the use of consultants for that purpose.
The inquiries sought: a list of all requests for proposals for
employee training issued; a list of all contracts for employee
training entered into; copies of not less than five of the
contracts; a tally of the number of objections or complaints
from any source involving training programs; an analysis of the
tally indicating the basis of each complaint; and an analysis
of the objections or complaints tallied indicating common
themes or trends.
The departments and agencies all responded between June 5,
1996 and August 2, 1996. Many of the agencies did not utilize
or rarely utilized training programs. All responses, however,
proved comprehensive. The responses were characterized by very
few or no objections or complaints concerning the violation of
individual civil rights.
b. Benefits.--As questionable, and often dubious, practices
falling under the category of ``new age'' training have gotten
more attention, it has become important to protect against such
explicit and implicit indoctrination and insure continued use
of proven and effective training practices. The department and
agency responses provided the subcommittee with a comprehensive
listing of training programs. Based on these responses, it was
concluded that Federal dollars were used responsibly in the
choosing of appropriate and sound diversity, management,
motivation, and other such employee training programs.
c. Hearings.--None.
NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND REGULATORY AFFAIRS
SUBCOMMITTEE
1. Grantee Lobbying.
a. Summary.--For decades, the Federal Government has
awarded billions of dollars in grants to organizations that
engage in lobbying and other forms of political advocacy. Much
of this money is given to non-profit organizations. According
to IRS figures, in 1992 alone, approximately 44,274 non-profit
groups received $42.6 billion in grants from the Federal
Government. Non-government sources put the figures even
higher.\21\ The Independent Sector, a coalition of some of the
largest non-profits in the country, reports that non-profits
received nearly $160 billion from all government sources in
1992; and OMB Watch's Gary Bass claims the Federal Government
granted approximately $226 billion in fiscal year 1994 to non-
profits, for-profits, and to State, local and tribal
governments.
---------------------------------------------------------------------------
\21\ Letter from the U.S. General Accounting Office, Associate
Director, Tax Policy and Administration Issues, Natwar M. Gandhi, to
Ernest Istook, 11/08/95, found in subcommittee files.
---------------------------------------------------------------------------
In many instances, government funding far exceeds donations
received directly from private citizens. For example, in 1994
Catholic Charities, one of the largest non-profit organization
in the country, obtained $1.2 billion or 65 percent of its
total annual revenue from government sources.
While much of the money given away by the government is
undoubtedly put to good use, too much of it is spent to
subsidize political advocacy--whether it be lobbying on pending
legislation, buying paid advertisements for political races, or
simple grass-roots organizing. Federal grantees naturally
develop a symbiotic relationship with their governmental
funding sources. Even where Federal funds are not directly used
for political advocacy, indirect support is inevitable--after
all, money is fungible. Several votes have clearly demonstrated
that Congress firmly believes the practice of giving grants to
politically active organizations, termed ``Welfare for
Lobbyists,'' must stop.
The subcommittee explored the issue of Welfare for
Lobbyists in great detail throughout the first session of the
104th Congress. A total of four hearings were held by the
subcommittee to investigate allegations that certain groups
receiving Federal grants were engaging in political advocacy;
to consider how Welfare for Lobbyists adversely affects both
government and charity; and to explore possible solutions to
the problem.
The subcommittee also worked in coordination with the
General Accounting Office to investigate the National Council
of Senior Citizens (NCSC). NCSC is a non-profit organization
that receives over 95 percent of its funding from the Federal
Government (ostensibly to provide housing and jobs to senior
citizens). Yet it is highly active in partisan politics. Half
of NCSC's annual report for 1994 was devoted to a description
of its political activities. As part of this investigation,
electronic copies of NCSC's financial records for fiscal year
1994 were requested. Those records are now being analyzed to
determine whether current restrictions on the use of Federal
funds were violated, and, if no violations took place, to
identify the loopholes that permit an organization so heavily
funded by the government to engage in significant political
activity.
In addition to investigatory hearings, the subcommittee and
other Members also proposed legislation to address some of the
problems associated with Welfare for Lobbyists. Ultimately,
language was added to section 18 of the Lobbying Disclosure Act
of 1995 to prohibit certain non-profit organizations (qualified
as tax-exempt under IRC section 501(c)(4)) from receiving
Federal funds in any form, if they engage in lobbying
activities. That bill was signed into law by President Clinton
on December 19, 1995, as Public Law No. 104-65. Those
restrictions have no effect on grantees other than 501(c)(4)'s,
nor do they prevent a 501(c)(4) grantee from creating shell
corporations to separate, on paper, the grant receipts from the
political activity.
b. Benefits.--There is a need to protect the taxpayers by
ensuring that Federal funds are not used to subsidize
legislative or political advocacy. To that end, the
subcommittee's hearings have exposed abuses of Federal grants.
Many Members believe that further reforms are needed to
increase accountability to the taxpayers and to prevent the
abuse of tax dollars. With at least $42 billion in government
grants each year, there is substantial room for waste, fraud,
and abuse by unscrupulous grantees. The subcommittee's efforts
will continue with an eye toward exposing existing abuses and
demonstrating the case for reform to protect the American
taxpayers.
c. Hearings.--As part of its investigatory work, the
subcommittee held four hearings on the question of Welfare for
Lobbyists. Hearings were held to investigate allegations that
certain groups receiving Federal grants were engaging in
political advocacy; to consider how Welfare for Lobbyists
adversely affects both government and charity; and to explore
possible solutions to the problem. On June 29, 1995, the
subcommittee heard from representatives from non-profits that
refuse to engage in political activity or take Federal grants;
General Accounting Office researchers and private scholars who
have studied Welfare for Lobbyists; and Congressmen and
Senators who are concerned about the problem as well. In
addition, the subcommittee questioned representatives of the
Nature Conservancy and the National Fish and Wildlife
Foundation about allegations of improper political activity in
connection with Federal grants they receive. Subsequent
hearings were held on July 28, August 2, and September 28,
1995.
2. Investigation of Improper EPA Lobbying on Pending Legislation.
a. Summary.--The Anti-Lobbying Act is a criminal statute
that prohibits executive branch agencies from using any
appropriated money directly or indirectly to influence a Member
of Congress on pending legislation, except through proper
official channels. (18 U.S.C. sec. 1913.) The dual purpose of
the act is to prevent agency officials from squandering public
money in attempts to increase their budgets or protect their
jobs, and to prevent executive branch agencies from using tax
dollars to disseminate propaganda about pending legislation.
Pursuant to this statute, and other Federal anti-publicity and
propaganda statutes, the executive branch is free to propose
such legislative measures as the President deems appropriate
and communicate its comments directly to Members of Congress on
any pending legislation. Executive branch officers and
employees are prohibited, however, from engaging in any grass-
roots lobbying, even indirect grass-roots lobbying, that is
intended to influence the legislative debate.
In late February 1995, the committee learned the following
facts regarding improper EPA lobbying: (1) EPA officials had
used taxpayer funds to create non-public advocacy material
strongly condemning pending regulatory reform legislation; (2)
the EPA used taxpayer funds to fax these documents to more than
150 grass-roots lobbying organizations and industry groups that
are active in lobbying Members of Congress on these legislative
proposals; (3) an objective reader would interpret these
documents as a call to action, or in the words of one
newspaper, ``a call to arms;'' (4) most of the documents,
including the strongest advocacy pieces, were not solicited;
(5) the mass-faxing of these documents was carefully timed to
coincide with important votes in the House of Representatives;
and (6) such action was consistent with a pattern of other EPA
contacts with grass-roots lobbying organizations to defeat the
reform legislation. These undisputed facts constituted strong
evidence that some EPA officials had violated the criminal
anti-lobbying laws. Indeed, the concerted EPA actions appeared
to precisely fit the accepted definition of prohibited grass-
roots lobbying.
On March 2, 1995, a written request for information was
submitted to EPA Administrator Carol Browner. The Administrator
initially responded that the EPA would cooperate with the
oversight investigation and provide answers to the questions.
However, EPA did not provide complete answers to any of the
questions that were posed after an extension of time was
granted. For example, EPA refused to say who approved the
content of the lobbying material and who was involved in the
decision to send it out. The EPA also refused to disclose
whether EPA officials had meetings or conversations with
outside lobbying groups to discuss lobbying Members of
Congress. Instead, EPA's response to the legitimate oversight
request was largely an argument why EPA need not provide
Congress information regarding potential wrongdoing and waste
of taxpayer resources.
On March 21, 1995, subcommittee Chairman McIntosh and
ranking subcommittee Member Peterson sent Administrator Browner
a letter insisting on complete responses to all of its
questions pursuant to its authority under Rules X and XI of the
U.S. House of Representatives. The March 21 letter explained
that the subcommittee knew of documents that EPA was refusing
to produce, which raised concerns about possible violations of
several Federal statutes besides the Anti-Lobbying Act,
including other appropriation laws, the Hatch Act prohibitions
against political activity by executive branch officials, the
conspiracy statute, and the statute prohibiting misprision of
felony. As the March 21 letter relayed:
EPA simply cannot pick and choose which of the
subcommittee's requests for information it will honor
and which it will reject. We insist on complete
responses to all of our requests. . . . It is
impossible for the subcommittee to discharge its
oversight duty without uncovering all of the facts.
Your position that the Congress is not entitled to the
information because no one at EPA violated the Anti-
Lobbying Act is troubling for two reasons. First, your
assertion that the act prohibits almost nothing is
unsupportable. The very opinions cited in the EPA
letter from the Department of Justice refute EPA's
interpretation of what the law allows and what it
prohibits.
Second, even if we accepted EPA's . . . construction
of the law and blindly accepted EPA's conclusion (based
on EPA interviews not provided to us) that no laws were
violated, the information we seek still would be highly
relevant to our core legislative duty. If current law
is as empty as you assert, then our oversight
investigation is necessary to determine whether to
propose new legislation, similar to that which exists
for many agencies, which prohibits an even broader
category of publicity and propaganda activities.
The March 21 letter also contained a four-page appendix that
refuted the agency's legal interpretation of the Anti-Lobbying
Act.
In the following months, EPA missed every agreed-upon
deadline to provide the requested information. Although EPA
eventually produced a significant number of documents, the
agency continued to stonewall on producing answers to the most
important questions and the most relevant documents and e-mail
messages. At the same time, the Department of Justice's Office
of Legal Counsel (OLC) issued new ``guidelines'' to executive
branch agencies on interpreting the Anti-Lobbying Act. The OLC
guidelines were substantially different from prior General
Accounting Office (GAO) and OLC guidelines and directly
contradicted the text of the Anti-Lobbying Act without
justification.
Despite the Department of Justice's refusal to investigate
the facts, committee Chairman William F. Clinger, Jr., and
subcommittee Chairman McIntosh reviewed the available evidence
of improper lobbying by EPA and a host of other executive
branch agencies. That evidence was more than sufficient to find
a widespread pattern of lobbying by executive agencies within
the Clinton administration, including the Departments of
Commerce, Interior, Housing and Urban Development, Labor, the
EPA, the Small Business Administration, and AmeriCorps.
Chairman Clinger introduced an amendment to H.R. 2564, the
``Lobbying Disclosure Act of 1995,'' which would clarify
existing prohibitions and create a civil enforcement mechanism
to prevent further improper lobbying activity. Although the
amendment was narrowly defeated, there was widespread
recognition that legislation of this type was needed to correct
executive branch abuses.
In early 1996, Chairman Clinger introduced H.R. 3078, ``The
Federal Agency Anti-Lobbying Act,'' to create a civil law
prohibiting agency grass-roots lobbying in support of or in
opposition to pending legislation. Although H.R. 3078 did not
move from committee, Chairman Clinger was able to have a
similar prohibition enacted as section 631 of the Treasury
Postal portion of the Omnibus Consolidated Appropriations Act
of 1997.
b. Benefits.--This investigation demonstrates the need for
additional civil legislation, and greater enforcement of
existing criminal laws regarding improper executive branch
lobbying. The investigation also laid the groundwork for the
consideration of civil legislation which was passed as part of
the Omnibus Consolidated Appropriations Act that creates a
civil enforcement mechanism to prevent further waste and abuse
of taxpayer resources.
c. Hearings.--The full committee conducted a hearing on
H.R. 3078, on May 15, 1996, (see Part Two I.A.4.k.)
3. OSHA's Ergonomics Standards.
a. Summary.--During the 104th Congress, the subcommittee
conducted oversight into the Occupational Safety and Health
Administration's (OSHA) rulemaking process for an ergonomics
standard. The term ``ergonomics'' originated in industrial
engineering to explain the idea that workplaces should be
designed around the people who use them. The recent attention
focused on ergonomics comes from its association with
repetitive strain injuries (RSI's), also known as cumulative
trauma disorders (CTD's). In spite of the lack of scientific
evidence to support either of these theories, OSHA has
proceeded aggressively with an ergonomics regulation.\22\
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\22\ Eugene Scalia, ``Ergonomics: OSHA's Strange Campaign to Run
American Business,'' White Paper, National Legal Center for the Public
Interest, Vol. 6, No. 3, August 1994, pp. 8-20.
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The regulatory moratorium bill (H.R. 450) would have
prevented further work by OSHA on an ergonomics standard. When
an OSHA official publicly indicated her intent to defy the
moratorium, Congress passed a ``Stop Work Order'' on this
rulemaking as part of H.R. 1158 and H.R. 1944, the 1995
Rescissions Bill. Press accounts in June 1995 reported that
OSHA had abandoned the ergonomics rulemaking. As Congress
continued to review comprehensive regulatory reform proposals,
the subcommittee held a hearing on July 12, 1995, with OSHA
Assistant Secretary Joseph Dear as a witness, to finally
establish the status of OSHA's regulatory activities on the
ergonomics issue.
The committee also examined whether a single, one-size-
fits-all rulemaking could ensure workplace safety and health,
especially when serious questions still existed about the
scientific basis of the regulation. The investigation brought
into light the fact that the sweeping regulation would require
that 96 million jobs across the Nation be formally reviewed for
ergonomic ``risk factors.'' These risk factors are inherent in
every job they include: repetitive motion; frequent or heavy
lifting; contact stress; unsupported or awkward postures for
long periods; and vibrating tools and equipment.\23\ Under this
standard, workers would be prohibited from repeatedly pinching
small binder clips or twisting their necks to cradle a
telephone receiver. The investigation revealed that many jobs
which include these risk factors would be abolished altogether
in favor of automation.\24\ As a result of this investigation,
the committee was able to establish that OSHA is continuing to
work on the promulgation of an ergonomics rulemaking. Prior to
the July 12, 1995 hearing, conflicting press reports were
written on the subject. In addition to establishing the status
of the ergonomics rulemaking, the hearing helped make a strong
case that the rulemaking was overreaching and the House showed
its agreement by passing a rider to deny funding DOL for
promulgation of the ergonomics regulation.
---------------------------------------------------------------------------
\23\ OSHA's Regulatory Process and Activities Regarding Ergonomics
before the Subcommittee on National Economic Growth, Natural Resources,
and Regulatory Affairs. Testimony of Joseph A. Dear, Assistant
Secretary of Labor for Occupational Safety and Health. (Original
transcript pp. 26-28, in subcommittee files.)
\24\ Ibid., pp. 36-40.
---------------------------------------------------------------------------
b. Benefits.--During the investigation, the committee
learned from Assistant Secretary Dear that the agency is
continuing to work on its proposed ergonomics regulation.
Assistant Secretary Dear also confirmed that the agency is
already enforcing the scientifically dubious ergonomics
principles under the general duty clause, without a regulation.
The airing of this information refuted press reports that the
agency had stopped work on the massive regulation and renewed
congressional scrutiny of the rulemaking process. A study
released in January 1995, conducted by experts in occupational
medicine, concludes that OSHA did not ground its proposed
ergonomic regulation in sound medicial science. Rather OSHA
selected research that supported its position and ignored or
minimized findings that did not. In the Labor-HHS
Appropriations bill to fund OSHA in 1996, Congress approved a
prohibition on funds for further work on the ergonomics
standard.
c. Hearings.--The subcommittee held a hearing on July 12,
1995, on ``OSHA's Regulatory Activities and Processes Regarding
Ergonomics.'' Testimony was received from: Joseph A. Dear,
Assistant Secretary of Labor for Occupational Safety and
Health, U.S. Department of Labor; Joseph M. Woodward, Esquire,
Associate Solicitor, Occupational Safety and Health Division,
Office of the Solicitor, U.S. Department of Labor; David
Sarvadi, attorney, Keller and Heckman; Howard M. Sandler, M.D.,
president, Sandler Occupational Medicine Associates, Inc.; C.
Boyden Gray, Esquire, chairman, Citizens for A Sound Economy;
Rick Treaster, president, Local 2400, Amalgamated Clothing and
Textile Workers Union; Deborah Berkowitz, director, office of
occupational health, United Food and Commercial Workers
International Union.
4. Improper FDA Rulemaking.
a. Summary.--The committee conducted an investigational
hearing on the improper use of informal rulemaking by the Food
and Drug Administration in cooperation with the Subcommittee on
Human Resources and Intergovernmental Relations. This
investigation resulted from a compelling Citizens' Petition
filed with the FDA pursuant to section 553 of the
Administrative Procedures Act by the Indiana Medical Device
Manufacturers Council and the law firm of Baker & Daniels on
May 2, 1995. That Citizens' Petition asked the FDA to add back
certain language that the agency had deleted from its
regulations in 1991 requiring notice and comment procedures for
most rules. The 1991 language deletion permitted the FDA to
issue guidance documents without subjecting them to notice and
comment rulemaking. The Petition also asked the FDA to
implement a consensus-based approach to the initiation,
development and issuance of guidance documents that do not
impose new rules, and to adopt greater internal controls over
its communications with the public. In support, the Petition
identified dozens of examples where informal guidance documents
had been used by the FDA to justify enforcement actions or
approval decisions that could not be otherwise justified by a
formal rule or statute.
Subcommittee Chairmen McIntosh and Shays submitted written
questions to the FDA, which resulted in the production of
hundreds of pages of documents and a number of instructive
answers. For example, the FDA revealed that its decision in
1991 to exempt guidance documents from notice and comment
rulemaking procedures was made despite criticism from an
independent government agency charged with improving government
regulations. In a September 24, 1990 letter, Marshall Breger,
chairman of the Administrative Conference of the United States,
advised the Acting Commissioner of the FDA, James Benson, ``FDA
should reconsider its seeming ``all-or-nothing'' approach with
regard to using notice-and-comment procedure in the
promulgation of interpretive rules.''
In addition to focusing on the Citizens' Petition, the
hearing also provided an opportunity for Members to consider a
briefing paper published by David Murray of the Hudson
Institute, entitled ``The Human Cost of Regulation: The Case of
Medical Devices and the FDA.'' In that paper, the Hudson
Institute concluded thousands of Americans had died as a result
of FDA delay in approving just four medical devices. As one
example from the paper indicates, nearly 1,100 Americans died
as a result of a 24-month delay in the FDA's approval of
endocardial leads.
On October 30, 1995, the FDA provided a preliminary written
response to the Citizen's Petition. Significantly, the FDA
granted the petitioners' request that the FDA improve its
guidance document procedures. In a letter signed by the Deputy
Commissioner for Policy, the FDA concluded:
``FDA believes that there is merit to your concern
about the initiation, development, and issuance of
guidance documents. FDA agrees that public
participation benefits the guidance document
development process. Moreover, FDA believes that the
Agency can do a better of [sic] job of communicating to
its employees and to the public the non-binding nature
of guidance documents.''
However, the FDA denied the petitioners' request for the
FDA to add back certain language that the agency had deleted
from its regulations in 1991 requiring notice and comment
procedures for most rules. The FDA ruled ``notice-and-comment
rulemaking would significantly delay the issuance of guidance
documents, or more likely, make it impracticable to issue them
at all. The Agency believes that the proper balance between the
need for public input and the need for timely guidance can be
struck if FDA modifies its guidance document procedures. This
approach addresses your concerns regarding adequate public
participation but does not make it impossible for FDA to
continue making guidance available.''
In that same letter, the FDA also announced plans to
publish by January 31, 1996, a Federal Register notice setting
forth its proposed ideas for revising guidance document
procedures and its intention to solicit comment on the issues
raised in the Citizens' Petition.
b. Benefits.--The investigation helped focus both the
public's and the FDA's attention on an issue that is of
significant importance to the regulated community. The extent
to which guidance documents and other informal statements
issued by a regulatory body are used by that body is a core
problem for any regulatory system. The Administrative
Conference of the United States has recognized this concern,
and has attempted to address solutions on a governmentwide
basis. This investigation helps to highlight this concern with
respect to the FDA. However, the FDA is not the only agency
that could benefit from considering its treatment of informal
rulemaking. The EPA, OSHA, and every other regulatory body
needs to voluntarily examine their current rulemaking
procedures. Failure to act voluntarily will inevitably lead
more private citizens to use the Citizens' Petition process as
a means of forcing the agencies to act responsibly. The
subcommittee encouraged the filing of such petitions, and
invites private citizens to bring them to its attention.
c. Hearings.--A hearing on this matter was held on
September 14, 1995. Witnesses included: William Schultz, Deputy
Commissioner for Policy, FDA; Brad Thompson of the law firm of
Baker & Daniels; Larry Pilot, counsel to the Medical Device
Manufacturers Association; Ed Kimmelman, regulatory affairs
director for Boehringer Mannheim Corp.; Thomas Lenard, Ph.D.,
director of regulatory studies at the Progress & Freedom
Foundation; David Murray of the Hudson Institute's
Competitiveness Center; and Jeff Brinker, M.D., director of
interventional cardiology, Johns Hopkins Hospital.
5. Regulatory Reform.
a. Summary.--The committee conducted an examination of the
impact of Federal regulations on average Americans across the
Nation. The subcommittee visited 17 cities and held hearings on
the need for regulatory reform. Testimony from the hearings
clearly showed that Government regulations place undue burdens
on small business and the American people--burdens that are not
outweighed by regulatory benefits.
In Washington, DC, Federal agency officials and some
Members of Congress make the case that more and more
regulations are needed. However, outside Washington, DC,
citizens plead for relief from the needless burden of
regulations that already exist. In some cases the burden of
regulations just makes it more difficult for these individuals
to do their jobs. In other cases, regulations threaten to drive
them out of business completely.
The subcommittee found that America's hard-working farmers,
who grow the food on which we all subsist, are heavily and
unnecessarily burdened by regulations. One farmer in Oklahoma,
Robert Ross, testified that Federal agencies issue so many
convoluted regulations that it is nearly impossible for farmers
not to break the law. Farmers are left with no other option but
to follow the rules to the best of their ability, knowing that
at any time, an agency inspector could fine them for a minor
violation or, worse, take their land away. Another Oklahoma
farmer, Ruby Henderson, testified that she can no longer farm
her own land because it has been classified as a wetland--
although it remains dry most of the year.
The subcommittee also found that regulations can be
counterproductive, hurting the very people our society and our
government should be trying to help. In Modesto, CA, a Laotian
immigrant farmer leased 20 acres of land between two major
roads which are good for only one thing--farming strawberries.
Two agencies, the Fish and Wildlife Service and the Army Corps
of Engineers, quickly stepped in to stop him from farming his
own land. After much headache and paperwork, which involved the
agencies first losing and then rejecting his forms because the
drawings were not quite to scale, this farmer is still in
limbo. He came to America because he thought it was the land of
opportunity, and he wanted to escape governmental abuse.
Unfortunately, he has not been able to do that here. His
American dream has become a personal nightmare.
Testimony from the field hearings also showed that
regulations can have a counterproductive impact on large
pockets of the American populace. For example, the small city
of Manson, IA was forced to reduce the level of fluoride in the
public drinking water--it was 4 to 5 milligrams per liter while
Federal regulations required only 4 milligrams per liter. Even
though the discrepancy between the actual level and the
mandated level was very small, and fluoride is a good thing,
the city was forced to install a reverse osmosis treatment
plant to remove 1 milligram or less of fluoride per liter of
water at a cost of more than $700,000. Water rates were
increased by 45 percent to cover the operational costs of the
plant. Property taxes were raised and now approximately 24
percent of these taxes are allocated to paying off the bonds
the city had to sell to build the plant. Some 50,000 gallons of
water are rejected by the plant daily.
In some cases, regulations aren't as much at fault as the
methods Federal agencies use to enforce them. According to Dr.
Jonathon Wright, on May 6, 1992, a group of flak-jacketed
police and FDA agents kicked in the front door of the Tahoma
Clinic, and with guns pointed at the staff demanded, among
other things, their B vitamins. The raid came without any prior
contact or inquiry from the FDA. In September 1995, the FDA's
``criminal investigation'' was dropped without as little
warning as it was started--and without any explanation, apology
or reimbursement of costs.
b. Benefits.--The field hearings have given private
citizens across the Nation the opportunity to participate in
the regulatory reform debate in Congress. By reaching outside
Washington, DC, and listening to those people who must comply
with Federal regulations on a daily basis, the subcommittee
learned about many of the problems that the Federal regulatory
system poses: use of excessive force by agencies, costly
regulations that threaten to drive farmers and small business
owners into bankruptcy, and counterproductive regulations that
burden the American consumer without providing the benefits of
protection for health and safety. The testimony of witnesses at
the field hearings has helped build the record for regulatory
reform, supporting the need for legislation to enact true,
common-sense reform. Such significant legislation was enacted
in the Small Business Regulatory Enforcement Fairness Act of
1996, which gives Congress veto power over agency regulations.
c. Hearings.--The subcommittee held the following field
hearings: ``The Regulatory Transition Act of 1995 (H.R. 450)
and Clean Air Act Regulations'' in Fairfax, VA, on February 2,
1995. Testimony was received from: Robert W. McGillicuddy,
AutoCare, Inc.; Dennis Dwyer, Potomac Mills Exxon; Ron Harrell,
Capital Services, Inc.; Becky Norton Dunlop, secretary of
natural resources, Commonwealth of Virginia; Robert E.
Martinez, secretary of transportation, Commonwealth of
Virginia; Robert B. Dix, Jr., Fairfax County board of
supervisors; Lorraine Lavet, Fairfax County chamber of
commerce; Stan Laskowski, Deputy Regional Administrator, Region
3, Environmental Protection Agency; Ellen Bosman, vice
chairman, Arlington County board; Sheryll Crosby, Shortness of
Breath Club, American Lung Association. ``The Need for
Regulatory Reform'' in Muncie and Indianapolis, IN, on April
17, 1995. In Muncie, testimony was received from: Betty Devoe,
executive director, Westminster Village; Joseph Russell,
farmer; Wayne Townsend, farmer; Tom Miller, vice president,
commercial lending, American National Bank; Lowell Williams,
senior vice president, First Merchants Bank; Eugene Roach,
M.D., medical director, Anderson Center of St. John's; James
Currier, M.D., radiation oncologist; Robert Brodhead,
president, Ball Hospital; George Brannum, M.D., Pathologists
Associated; G.W. Bartlett, president, G.W. Bartlett Co.;
Richard Brown, sales manager, Beckett Bronze; Robert Kersey,
president, Rochester Metal Products; Robert Anderson, plant
manager, Delphi Interior and Lighting Systems; Richard
Sullivan, vice president and division manager, New Venture
Gear; Mike Lunsford, realtor; Terri Quinter, supervisor, Rose
View Transit; Katherine Kleber, Abate of Indiana PAC; Dan
Conaway, Abate of Indiana PAC. In Indianapolis, testimony was
received from: Alan Kemper, farmer; Warren Baird, farmer; Bart
Dye, farmer; Jean Ann Harcourt, president, Harcourt Outlines;
Malcolm Applegate, president and general manager, Indianapolis
Newspapers; Jeff Bowe, president, Benham Press; John Keach,
Jr., president, Home Federal Savings Bank; Jerry Baumgartner,
president, Tri County Bank and Trust; Jeff Robinson, Indiana
American Water Co.; Myles Brand, president, Indiana University.
``Regulatory Problems Maine Citizens Face Under the Clean Air,
Clean Water, and Safe Drinking Water Acts'' in Portland, ME, on
May 26, 1995. Testimony was received from: Richard Verville,
Citizens for Sensible Emissions; Monte Sloan, United Bikers of
Maine; David Dixon, Earth Tech; Jinger Duryea, C.N. Brown Co.;
Edward F. Miller, American Lung Association of Maine; Everett
B. Carson, Natural Resources Council of Maine; Senator Jeffrey
H. Butland, president of the senate, Maine State Senate; David
Sweet, superintendent, Kennebunk, Kennebunkport and Wells Water
District; Delores Lymburner, Maine Peoples Alliance; Judy W.
Hayes, president, Consumers Maine Water Co.; Dale Glidden,
superintendent, Augusta Sanitary District. ``Regulatory Reform
and the FDA Drug Approval Process'' in Norristown, PA, on June
9, 1995. Testimony was received from: Beverly Zakarian,
president, Cancer Patients Action Alliance; David and Faith
Samowitz; Mariah Gladis; Kiyoshi Kuromiya; Dr. David Bios, vice
president, worldwide regulatory affairs, Merck & Co.; Dr. James
Molt, vice president, worldwide regulatory affairs, Rhone-
Poulence Rorer; Dr. Robert Powell, vice president, regulatory
affairs, SmithKline Beecham Co.; Bruce Carroll, manager,
government relations division, Centocor, Inc.; Dr. Robert
Larkin, director, registration & regulatory affairs,
agricultural chemicals business, Rohm & Haas Co.; Mike Lumpkin,
Deputy Director, Center for Drug Evaluation and Research, FDA.
``The Need for Regulatory Reform'' in Tampa, FL, on July 17,
1995. Testimony was received from: Juan Adriatico, farmer; Roy
Davis, nurseryman and president, Hillsborough County Farm
Bureau and president, Tampa Bay Chapter of the Florida
Nurserymen and Growers Association; Tommy Brock, farmer and
president, Hillsborough County Strawberry Growers Association;
David Boozer, executive director, Florida Tropical Fish Farms
Association; Charles E. Weeder, chairman and CEO, Homes of
Merit, Inc.; Bruce Congleton, president and CEO, Florida Food
Industry Association. ``Federal Regulatory Reform'' in St.
Cloud, MN, on August 7, 1995. Testimony was received from:
Harold Anderson, president, Anderson Trucking Service; Mike
Helfeson, CEO, Gold'n Plump Poultry; Bruce Gohman, president,
W. Gohman Construction Co.; Morrie Lanning, mayor, Moorhead,
MN; Don Adams, director, Stearns County Environmental Services;
David Volker, loss control manager, Berkley Administrators;
Peter Larsen, M.D., F.A.C.S., St. Cloud Eye Clinic; John
Solheim, CEO, St. Mary's regional health center, Detroit Lakes;
Ed Zapp, president, chairman and CEO, Zappco Inc. ``Federal
Regulatory Reform Pertaining to Federal Contracts'' in St.
Paul, MN, on August 8, 1995. Testimony was received from: Ron
Turner, president, Minnesota Federal Contractors Council, Joe
Weis, chairman, Weis Builders; Todd Goderstad, legal counsel,
Ames Construction Co.; Ted Arneson, president, Professional
Instruments; Donnovan Eaker, owner, Steve's Meat Market;
Charles McDuff, director of government and technical affairs,
Ecolab Inc.; Lyle Clemenson, president, CEI, Inc.; William D.
Smith, Jr., executive vice president, Brown & Bigelow. ``FDA
Medical Product Approvals'' in Rochester, MN, on August 8,
1995. Testimony was received from: Dr. Robert Schwartz,
cardiologist, the Mayo Clinic; Dr. Richard Geier, president,
Olmsted Medical Group; Dr. Mike Murray, president-elect,
Minnesota Medical Association; Paul Citron, vice president of
science and technology, Medtronic; Mike Gozola, president,
Rochester Prosthetic Laboratories. ``The Federal Regulatory
Climate in Maryland,'' in Towson, MD, on January 26, 1996.
Testimony was received from: Paul Abenante, president, American
Bakers Association; William Paterakis, H&S Bakery; John
Morrison, vice president of Human Resources, Schmidt Baking
Co.; Alvin Manger, president, Manger Packing Co.; Edward Lauer,
owner, Lauer's Super Thrift; Joseph DeFrancis, president,
chairman and CEO, Pimlico Race Course; Timothy Capps, Maryland
Horse Breeders Association; William A. Good, executive vice
president, National Roofing Contractors Association; Mark
Gaulin, president, Magco, Inc., and president, Associated
Roofing Contractors of Maryland; Calvin Coblentz, president,
Wimpey Minerals U.S.A., Inc., and president, Maryland
Associated General Contractors; William T. Popmaronis,
president, EPIC MD Professional Pharmacies and owner, Edwards
and Anthony Pharmacy; Hugh Brown, president, Safeguard
Maintenance Corp.; Michael Stappler, president, Overlea
Caterers, Inc.; Thomas Meighan, safety manager, Stromberg Metal
Works, Inc.; Rabbi Moshe Heinemann, Star-K Kosher
Certification; Joseph DiCara, GOW International, Inc. ``The
Need for Regulatory Reform,'' in Sioux City, IA, on February 8,
1996. Testimony was received from: Harold Higman, Higman Sand &
Gravel; David Calhoun, Wells Blue Bunny Dairy; Corky Bailey,
JEBRO; Ellen Prescott, Security National Bank; George
Valentine, Terra Industries, Inc.; Craig Davis, Davey & Jim's
Seed Store, Inc.; Ron Marr, Petroleum Marketers of Iowa; Bob
Hamilton, chief, Sioux City Fire Department; Linda Madison,
Sioux City Community School District; Stephen Brevig, Northwest
Iowa Power Cooperative; Don Meisner, Siouxland Interstate Metro
Planning Council. ``The Need for Regulatory Reform,'' on
February 9, 1996 in Des Moines, IA. Testimony was received
from: Wes Houston, human resources manager, Johnson Machine
Works, Inc.; Loren Duchman, consultant, James B. Meehan, PE,
PC; Don Beal, president, Beal Development Corp.; David Whiton,
owner, Whiton Feed and Milling Co.; Bill Willis, Soil
Conservation Consultant; Richard Seigel, farmer; Royal
``Curly'' Holtz, II, farmer; Howard Alff, farmer; Harvey
Johnson, farmer; Dean Torreson, city administrator, city of
Atlantic; Robert Layton, city manager, city of Urbandale;
Fletcher Reel, mayor, city of Missouri Valley; Tom Hanafan,
mayor, city of Council Bluffs; Joe A. Gray, mayor, city of
Manson; L.D. McMullen, CEO and general manager, Des Moines
Water Works. ``The Impact of Regulations on California's
Central Valley,'' in Modesto, CA, on April 1, 1996. Testimony
was received from: Shel Thompson, president, Charter Mortgage;
Robert Rucker, president, Rucker Construction; Ron West, Ron
West Consulting; John Roberts, CEO, California Rice Industry
Association; Norma Cordova, director, Sand Creek Flood Control
District; Dan Nelson, executive director, San Luis Delta
Mendota Water Authority; Allen Short, general manager, Modesto
Irrigation District; Roger Wood, corporate vice president, J.R.
Wood Co.; Manuel Cunha, president, NISEI Farmer's League;
Carolyn Richardson, director, Department of Environmental
Advocacy; Pat Paul, chair, Stanislaus County Board of
Supervisors. ``Creating an Employer-Friendly Regulatory
System,'' in Auburn, WA, on April 2, 1996. Testimony was
received from: Dr. Jonathon Wright, Tahoma Clinic; Timothy S.
Cooke, CEO, the Electrode Store; Ray Schow, State senator and
owner, All-Night Printery and ANP Publishers; Ann Anderson,
State senator; Suzette Cook, State representative; Pat Cattin,
owner, Cattin's Restaurant; Don Guthrie, vice president,
Wayne's Roofing; David Cornforth, co-owner, Cornforth-Campbell
Pontiac, Buick, GMC; Keith Shay, former employee, Cornforth-
Campbell Pontiac, Buick, GMC. ``Taxing Times: The Case for IRS
Reform,'' in Phoenix, AZ, on April 3, 1996. Testimony was
received from: Sybille Koberstein; Alma Davis; Marlan Walker,
Walker Ellsworth, P.L.C.; Yale Goldberg, Fraiser, Ryan,
Goldberg & Hunter, L.L.P.; Mike Pietzsch, Polese, Pietzsch,
Williams and Nolan; William Raby, the Raby Law Office; Natwar
Ghandi, Associate Director of Tax Policy, General Accounting
Office; Leigh Cheatham, deputy director, Arizona Department of
Revenue; Judith C. Dunn, Associate General Counsel (domestic),
Internal Revenue Service. ``The Impact of Regulations on the
Oil Industry,'' in Norman, OK, on May 20, 1996. Testimony was
received from: Frank McPherson, chairman of the Board, Kerr
McGee; Richard Bilas, John A. & Donnie Brock Chair in Energy
Economics & policy director, University of Oklahoma Energy
Center; Christine Hansen, Interstate Oil and Gas Compact
Commission; Terry Ross, executive vice president, Love's
Country Stores; Susie King, senior staff engineer, Conoco;
Barbara Price, vice president, Health, Environment and Safety,
Phillips Petroleum; Mike Cantrell, president, Oklahoma
Independent Petroleum Association; Troy Vickers, deputy
director of Regulatory Services, Amoco Corp.; Commissioner Ed
Apple, Oklahoma Corporation Commission. ``The Hidden Cost of
Government Regulations,'' in Claremore, OK, on May 20, 1996.
Testimony was received from: Wayne Francis, mayor of Henryetta;
Sam Wade, deputy CEO, National Rural Water Association; Gene
Whatley, executive director, Oklahoma Rural Water Association;
Ron Meadows, superintendent, Prue Public Schools; Sue Ann
Clayton, Cystic Fibrosis Patient; Joe Cox, president,
Hydrohoist International; Ted McGuire, president & CEO, RCB
Bank; Ruby Henderson, farmer; Robert Ross, farmer; Charles
Sloan, farmer, Sequoyah County Farm Bureau; Don Turner, Turner
Bros. Meats; Larry McFerron, McFerron's Quality Meats; James
Zangger, Greenleaf Nursery.
6. Privatization of Sallie Mae and Connie Lee.
a. Summary.--The Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs and the Subcommittee
on Postsecondary Education, Training and Life-Long Learning of
the House Committee on Economic and Educational Opportunities
held a joint hearing on the possible privatization of Sallie
Mae and Connie Lee, both of which were chartered under the
Higher Education Act. Sallie Mae was established in 1972 as a
shareholder-owned, for-profit corporation to help ensure
adequate private sector funding for federally guaranteed
education loans. Sallie Mae supports financing for higher
education loans primarily by making a secondary market in such
loans and providing related financial and operational support
to lending and educational institutions. Connie Lee was
established in 1986 as a Triple-A rated, for-profit municipal
bond insurance company which guarantees the repayment of bonds
issued by colleges, universities, and teaching hospitals for
the construction and renovation of facilities. Connie Lee helps
educational institutions with lower investment grades obtain
low cost, long-term capital.
Members were interested in hearing testimony on whether it
was in the public interest, and the interest of the
stockholders of Sallie Mae and Connie Lee, that they be
privatized because of changes in the secondary markets that
these government-sponsored enterprises (GSE's) serve, and other
changes in government policy.
b. Benefits.--The information gained by the hearing
provided valuable information on the following three questions:
(1) whether the markets served by Sallie Mae and Connie Lee
were mature enough to allow these GSE's to be privatized and
pursue other socially productive business opportunities; (2) if
the markets were mature enough, whether it was fundamentally
unfair to prevent the stockholders of these companies from
deciding for themselves the future of their companies; and (3)
if privatization of Sallie Mae and Connie Lee was in the public
and private interest, what general form the legislation should
take to accomplish this objective.
c. Hearings.--On May 3, 1995, the Subcommittee on National
Economic Growth, Natural Resources, and Regulatory Affairs and
the Subcommittee on Postsecondary Education, Training and Life-
Long Learning of the House Committee on Economic and
Educational Opportunities held the joint hearing. The first
panel of witnesses included Larry Hough, the president of
Sallie Mae; Oliver Stockwell, the president of Connie Lee;
along with representatives from the U.S. Department of
Education and the U.S. Department of the Treasury. These
witnesses testified about advantages of privatizing these GSE's
and the possible terms of such privatization arrangement. The
second panel of witnesses included experts on the financial
markets served by Sallie Mae and Connie Lee. These witnesses
discussed the typical life cycle of a GSE and explained that
the secondary markets served by Sallie Mae and Connie Lee were
sufficiently mature to make privatization appropriate.
7. Mismanagement of Grants by the Environmental Protection Agency.
a. Summary.--The subcommittee initiated an investigation of
the Environmental Protection Agency's grantmaking process. The
subcommittee's investigation, spurred by a September 28, 1995
report entitled ``Final Report of Audit on EPA's Controls Over
Assistance Agreements'' by the EPA's Inspector General, found
financial mismanagement that potentially places billions of tax
dollars at risk. Grants generally compose more than half of the
EPA's annual budget of approximately $6 billion.
The agency's Inspector General found violations of EPA
policies and procedures, destruction of critical grant
documents, and blatant disregard for sound management
practices.
The Inspector General's report stated that ``audits have
shown that the recipients of assistance agreements have at
times misspent and wasted millions of dollars.'' The report
attributes some of the abuse to the fact that EPA ``personnel
did not comply with EPA policies and procedures when
administering assistance agreements.''
The Inspector General's audit revealed that an examination
of agency grant records showed a ``disregard of basic
management techniques.'' For example, in many documents, the
grant agreement itself--the contract between the grantee and
the government--could not be found. In some cases, EPA
employees improperly destroyed grant documents, despite
``numerous directives prohibiting the destruction of records.''
The EPA has acknowledged the problems. In response to the
Inspector General's report, the official EPA response stated
flatly: ``The findings are consistent with the findings in
previous reports. Basically, no new issues are identified.''
\25\ A later agency response indicated that ``many of the
conditions which affect [EPA's] ability to administer and close
out assistance agreements are a result of Agency priorities and
lack of resources.''\26\
---------------------------------------------------------------------------
\25\ A memorandum from Sallyanne Harper, Acting Assistant
Administrator for Administration and Resource Management at EPA to
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits
dated September 19, 1995.
\26\ A memorandum from Al Pesachowitz, Acting Assistant
Administrator for Administration and Resource Management at EPA to
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits
dated March 25, 1996.
---------------------------------------------------------------------------
The EPA has clearly indicated what its priorities are.
Today, there are only 11 people in EPA headquarters in
Washington watching out for the billions of dollars in
taxpayer's money sent out each year in grants. To put that in
perspective, more than 13 people work in EPA's public relations
shop.
On July 30, 1996, the subcommittee held a hearing to hear
from Inspector General John Martin regarding the variety and
volume of abuses of the grantmaking process uncovered. EPA
Administrator Carol Browner was invited but refused to appear
before the subcommittee to respond to the concerns raised by
the Inspector General about half of the Agency's annual budget.
Instead, the subcommittee heard from Deputy Administrator Fred
Hansen.
The subcommittee heard from Inspector General Martin that
the Agency had not filed a formal response outlining proposed
corrective action related to the September 28, 1996 report
until just days before the subcommittee's hearing. Under the
EPA's own guidelines, this report should have been provided
months before the hearing.
Further, the subcommittee heard from Deputy Administrator
Hansen that it would take the EPA years in order to relieve the
backlog of unmonitored grants and to establish the policy,
procedures, and training necessary to adequately protect
taxpayer funds from abuse.
Mr. Hansen also testified that the EPA could not assure the
Congress that taxpayer funds are not being used for lobbying or
political purposes due to the EPA's lax management practices.
Inspector General Martin agreed to work with the subcommittee's
staff to initiate a review of potential abuse of taxpayer-
funded grants to subsidize lobbying and political activity.
b. Benefits.--The EPA Inspector General found that more
than $33 million in additional funds could have been spent
cleaning up the environment if EPA had properly closed out
completed grants. By failing to do so, grantees escaped a final
audit and the American public was cheated out of a cleaner,
safer environment.
The subcommittee and the Inspector General of the EPA both
intend to carefully monitor the Agency's ongoing corrective
actions in order to ensure that the taxpayer's money is
adequately protected while maintaining a cleaner, safer
environment.
c. Hearings.--``Mismanagement of Grants by the
Environmental Protection Agency,'' July 30, 1996.
8. Investigation of the White House Database (WhoDB).
a. Summary.--In response to press reports related to the
committee's investigation of the improper acquisition of FBI
files by the White House, the subcommittee undertook a review
of the White House Database.
The subcommittee has requested documents and information
from the White House, various Federal agencies, and outside
contractors with regard to their involvement with the WhoDB.
The White House has not cooperated with the subcommittee's
requests in a timely fashion.
The subcommittee's initial review of the WhoDB shows that
it is a computerized system of records that has information on
more than 350,000 individuals and 80,000 organizations. The
computer data base maintains sensitive personal and political
information on these individuals and organizations.
The subcommittee held an initial hearing on the WhoDB on
September 10, 1996 and heard from witnesses from the General
Accounting Office and legal experts on privacy and
appropriations law.
The General Accounting Office (GAO) testified that the
White House cannot ``ensure that users are properly accessing
and using'' the White House Database and that there is ``an
opportunity for misuse'' of the system. In testimony by GAO's
Director of Information Resources Management, Jack Brock, the
independent auditing agency stated that the WhoDB system lacks
basic security features, such as an access log and audit trail,
that would track whether the ``sensitive information'' was
being misused. He testified that the White House should assure
``accountability'' in the WhoDB by operating under the
``principles of [OMB Circular] A-130.''
OMB Circular A-130, the official guidance document for
computerized data bases, states that the government shall
``limit the collection of information which identifies
individuals to that which is legally authorized and necessary
for the proper performance of agency functions.'' It does not
appear that the White House's policy of keeping information on
the fact that individuals attended DNC functions or received
DNC or Re-election Committee Holiday Cards in 1995, as the
WhoDB does, complies with this standard.
b. Benefits.--The subcommittee's investigation of the WhoDB
is ongoing, as is the General Accounting Office's review of the
system. The investigation seeks to ensure that taxpayer funds
are protected from abuse and that the White House has properly
and legally spent appropriated funds.
The investigation also will determine whether new
safeguards or other restrictions need to be placed on the White
House Database specifically or on government information
systems generally.
Internal White House estimates show that more than $1.7
million of taxpayer money has been spent to design, develop and
maintain the WhoDB.
c. Hearings.--``Propriety of the White House Database,''
September 10, 1996.
9. The Effects of a Minimum Wage Increase.
a. Summary.--The subcommittee examined the consequences of
an increase in the minimum wage. The subcommittee held a
hearing at which it heard from economic experts on the wage
issue as well as employers and minimum wage employees. The
testimony presented to the subcommittee clearly showed that an
increase in the minimum wage would have a significant negative
effect on employment.
David Neumark, professor of economics at Michigan State
University, testified that a hike in the minimum wage would
have detrimental effects. Neumark has researched the minimum
wage issue with William Wascher of the Federal Reserve Board
for the past 6 years. In their first paper on the general
employment effects of a minimum wage increase, Neumark and
Wascher used data from the 50 States and Washington, DC between
1973 and 1989 to estimate the effects of a change in the
minimum wage on the employment of workers, aged 16 to 24. They
concluded from the data that a 10 percent increase in the
minimum wage results in a reduction of the employment rate of
young workers by 1 or 2 percent. Applied to the proposed
minimum wage increase of about 20 percent, their results
predict a decline in employment of 2 to 4 percent among young
workers. Neumark testified that, taking into account a rise in
nominal wages, he now estimates the proposed minimum wage hike
will result in a decline of 100,000 to 200,000 jobs among young
workers.
Given the fact that employment declines when the minimum
wage goes up, Neumark examined the question of whether minimum
wage increases are the best way to reduce poverty. He concluded
that minimum wage increases are an ineffective means of
reducing poverty because such increases do not target
individuals in poor families and they result in some low-wage
workers losing their jobs.
Neumark and Wascher's research went beyond employment
effects to examine the effects of minimum wage increases on
school enrollment. Their findings were compatible with economic
theory which suggests that minimum wage increases lead
employers to decrease the number of lowest-skilled workers, who
cost more to employ when the minimum wage goes up, and choose
more skilled workers. This leads to two results for teenagers:
those teenagers who have already left school and are employed
full time lose their jobs at a high rate; and those teenagers
who were enrolled in school and are more skilled have more
attractive job opportunities and leave school for full-time
work. Thus, increases in the minimum wage lead to increases in
the high school drop out rate.
Neumark and Wascher's most recent research has disproved
the study done by David Card and Alan Krueger, which is most
frequently cited in support of raising the minimum wage. The
Card and Krueger study looked at fast-food restaurants in New
Jersey before and after the minimum wage was increased from
$4.25 to $5.05. They concluded from their data that relative
employment rose in New Jersey as a result of the minimum wage
increase. Neumark and Wascher, however, point out that Card and
Krueger's data were obtained from a telephone survey and were
very imprecise measures of changes in employment. Neumark and
Wascher studied payroll data from the same restaurants and came
to the exact opposite conclusion--that New Jersey's minimum
wage increase led to a decline in employment in fast-food
restaurants in the State.
Several renowned economists also testified about the
negative consequences of an increase in the minimum wage,
particularly on employment. Finis Welch, Abell Professor of
Liberal Arts and Distinguished Professor of Economics, Texas
A&M University testified that his studies have shown that
increases in the minimum wage will cause significant
unemployment, particularly among teenagers. Kevin Murphy,
George Pratt Shultz Professor of Business Economics and
Industrial Relations, University of Chicago, testified that his
studies have shown that increases in the minimum wage will
cause significant unemployment among the least skilled workers.
His studies have also shown that the minimum wage is one of the
least effective means of helping poor wage earners. He
explained how the cost of goods and services will increase for
the poor under a hike in the minimum wage. William A. Niskanen,
Ph.D. economist, former Economic Adviser to President Reagan,
and chairman, Cato Institute, has studied what type of worker
earns the minimum wage. He testified that current minimum-wage
workers are not family breadwinners. He testified that other
anti-poverty approaches, such as EITC and other tax cuts, are
much more targeted to help family breadwinners.
In contrast to the other witnesses, Edward Montgomery,
Professor of Economics at the University of Maryland, testified
that the evidence suggests that the employment losses
associated with an increase in the minimum wage would be small.
He also stated that since the evidence points to small
employment losses, it would be short-sighted to ignore the
financial gains a minimum wage increase would offer to minimum
wage workers. All of the other expert and citizen witnesses
disputed Montgomery's conclusions.
b. Benefits.--The subcommittee learned that the unintended
consequences of raising the minimum wage would be felt most by
those least able to absorb them--seniors, the disabled and new
employees in the work force--because it would create higher
unemployment and higher prices for goods and services.
Subcommittee Chairman David McIntosh introduced legislation
proposing a minimum wage tax cut as an alternative to raising
the minimum wage. McIntosh's legislation would cut Federal
taxes for workers earning between $4.25 and $5.15 an hour, and
it would raise workers' take home pay to $4.57 an hour,
compared to the current $3.92 when Federal withholdings are
deducted.
c. Hearings.--The subcommittee held a hearing on May 14,
1996, on ``The Effects of a Minimum Wage Increase.'' Testimony
was received from: David Neumark, Ph.D., professor of
economics, Michigan State University; Melody Rane, Burger King
Franchisee; Don Baisch, manager, Burger King Franchise; Jim
Militello, Jr., Attorney, Militello, Zanck & Coen, owner,
Source Team, and Partner, Super Wash; Bernie Hellgeth, Source
Team; Taalib-Din Abdul Uqdah, co-owner, Cornrows & Co., and
president, Hairbraiders & Natural Haircare Association; Gail
Robbins, Pizza Inn Franchisee; Finis Welch, Ph.D., professor of
economics, Texas A&M University; Kevin Murphy, Ph.D., professor
of economics, University of Chicago; William A. Niskanen, Ph.D.
economist, chairman, Cato Institute; Edward Montgomery,
professor of economics, University of Maryland.
10. The Impact of Regulations on Employment.
a. Summary.--The subcommittee examined the impact of
Federal regulations on employment. Witnesses at many of the
subcommittee's field hearings testified that if they didn't
have to absorb the huge cost of complying with government red
tape, they would hire more workers, pay higher wages, or
otherwise expand their businesses. Testimony presented before
the subcommittee clearly showed that Federal regulations and
big government in general depress job and economic growth.
The subcommittee held a hearing on this issue at which
expert economists and policy analysts, who have studied how the
cost of big government depresses job, wage, and overall
national economic growth presented testimony. One witness,
Professor Lowell Gallaway from Ohio University, conducted a
recent study for the Joint Economic Committee which showed that
limiting big government spending is critical to raising the
average American worker's wages. In fact, it showed that if
Federal spending levels were held constant at their 1965 level
and Federal taxes were adjusted accordingly, the typical worker
would have taken home enough additional pay between 1973 and
1994 to buy a home. His study used historical data on Federal
regulatory costs from the Center for the Study of American
Business to determine the relationship between productivity
growth and regulation. One of the study's results showed that
rising regulatory activity is to blame for almost half of the
slowdown in long-run productivity growth from the last year of
the Kennedy administration (1963) to the first year of the
Clinton administration (1993). Therefore, if regulatory
activity had remained at its 1963 level, annual productivity
growth today would be nearly 1 percent higher. The cumulative
effect of this 30-year drag on productivity caused by
regulation has been to lower the Nation's output by 1993 by
$1.3 trillion a year.
Gallaway pointed to work by other economists supporting the
idea that growth in regulatory activity lowers productivity
growth. For example, Clark University Economist Wayne Gray has
studied EPA and OSHA regulations in 450 manufacturing
industries and found that increased regulatory activity
explained more than 30 percent of the growth slowdown from the
1960's to the 1973-78 period. In a National Bureau of Economic
Research study, Gray and Ronald J. Shadbegian concluded that
each dollar of regulatory compliance costs lowered total factor
productivity by $3 to $4 dollars.
Another witness, Professor Thomas D. Hopkins of the
Rochester Institute of Technology, has studied the effects of
regulations on the economy since he served in the Executive
Office of the President from 1975-1984, conducting regulatory
analysis. Hopkins has concluded that not only does Government
regulation impose burdens on those who are regulated, but
regulatory compliance costs are not distributed evenly and
burden small businesses disproportionately. His work has shown
that approximately $670 billion is spent each year to comply
with all Federal regulations. If all regulatory compliance
costs were shared evenly, every American household in 1995
would have paid $7,000. Although it is the household that
ultimately pays the price of regulation, initially business
pays the compliance costs. Ninety percent of all U.S. firms are
small businesses with fewer than 20 employees. In 1992, the
average small firm with under 20 employees spent some $5,500
per employee to comply with Federal regulations. The larger the
firm, the smaller the compliance cost per employee, with firms
of 500 or more spending about $3,000 per employee. Hopkins
points out that compliance costs alone do not capture the
decline in productivity that results from Government
regulation. Regulation forces businesses to change their
methods, giving up their most profitable and productive ways of
doing business. Regulation also limits innovation and growth.
Regulation makes it more expensive for businesses to hire
workers--particularly small businesses which account for more
than half the total employment in the United States. Mark
Wilson, labor policy analyst at the Heritage Foundation,
testified that the average cost of hiring an employee in
private industry is $17.10 per hour, 43 percent of which is due
to Government regulations, taxes and mandated benefits. For a
minimum wage worker the cost is $4.76 per hour, 22 percent of
which is due to Government regulations, taxes and mandated
benefits.
Several small business owners also presented testimony to
the subcommittee. Gary Bartlett, President, G.W. Bartlett & Co.
in Muncie, IN, testified that if it weren't for the huge
regulatory burden, he would be able to build a new facility and
create 100 new jobs in 18 months. Judi Moody, a small business
owner in Washington State testified that she wants to open a
small retail business. When she started investigating the
matter seriously, she discovered that she would have to comply
with myriad regulations and codes, hire a lawyer, and get
industrial insurance before she could even open the doors. Due
to this regulatory burden, she has decided not to open the
business. Her spirit of entrepreneurship has been squashed and
the jobs she would have created are lost.
b. Benefits.--The subcommittee learned that reducing the
cost of regulation, and big government in general, will promote
greater productivity and economic growth, creating new jobs and
enabling workers to take home more pay. Getting rid of
unnecessary and counterproductive regulations will lift some of
the disproportionate burden off small businesses, which
comprise 90 percent U.S. firms. As a result, small businesses
will have more money to expand, hire more workers and pay their
workers higher wages.
c. Hearings.--The subcommittee held a hearing on May 16,
1996, on ``The Impact of Regulations on Employment.'' Testimony
was received from: Gary Bartlett, president, G.W. Bartlett Co.;
Judi Moody, owner, CEG Northwest; Dick Walton, owner, Maroney's
Cleaners & Laundry; Lowell Gallaway, distinguished professor of
economics, Ohio University; Thomas D. Hopkins, Arthur J.
Gosnell professor of economics, Rochester Institute of
Technology; Mark Wilson, Rebecca Lukens Fellow in Labor Policy,
the Heritage Foundation.
11. Travel Practices of Department of Transportation Administrators.
a. Summary.--The subcommittee investigated the travel
practices of the Department of Transportation's administrators
to determine the cost and nature of senior executive travel in
the department. An initial letter was sent from subcommittee
Chairman McIntosh on April 26, 1996, to Administrator Rodney
Slater, Federal Highway Administration (FHWA); Administrator
Jolene Molitoris, Federal Railroad Administration (FRA);
Administrator David R. Hinson, Federal Aviation Administration
(FAA); and Admiral Robert E. Kramek, U.S. Coast Guard (USCG).
Subcommittee Chairman McIntosh sent an initial letter on May
23, 1996 to Administrator Albert J. Herberger, Maritime
Administration; Administrator Ricardo Martinez, National
Highway Traffic Safety Administration (NHTSA); Administrator
Gail McDonald, Saint Lawrence Seaway Development Corp. (SLSDC);
and Administrator Gordon Linton, Federal Transit Administration
(FTA). This letter requested information from each DOT
Administration about their travel budget for fiscal years 1991
through 1996 and about compliance with Federal travel
practices. The letter also requested each administrator to
disclose each time he or she traveled at government expense
since becoming administrator, the purpose of the trips, and the
cost to the Federal Government for the trips.
Based on each administrator's response to the
subcommittee's initial request for information, subcommittee
Chairman McIntosh sent follow-up letters to Administrators
Slater, Molitoris, Hinson, and Admiral Kramek.
b. Benefits.--The subcommittee learned that certain DOT
administrators traveled on frequent trips at great expense to
the taxpayer. FHWA Administrator Rodney Slater took 134 trips
totaling 328 travel days, between June 14, 1993 and January 17,
1996. His travel included 9 trips to 11 foreign cities: Moscow,
St. Petersburg, Berlin, Acapulco, Johannesburg, Calgary,
Budapest, Paris, San Juan, Montreal, and Tokyo. His total
travel (including accompanying staff) cost the taxpayer
$168,719. Among his domestic trips, Slater traveled at least 14
times to his home State of Arkansas at taxpayer expense. At
least one of these trips included political activity. On
October 29, 1994, Slater billed taxpayers for a trip to Austin,
TX, while he also participated in political events for then-
Governor Richards' re-election campaign. From June 16 to 26,
1996, Slater took a $20,000 cross-country trip to celebrate the
Federal highway system. This costly trip included stops at
several national landmarks and popular vacation spots, such as
the Lone Tree Gold Mine in Nevada and the Olympic Sports Park
in Utah.
FRA Administrator Jolene Molitoris traveled almost as
frequently as her colleague at the FHWA, taking 86 trips
between August 10, 1993 and April 10, 1996. Her total travel
(including accompanying staff) cost the taxpayer $116,567.79.
On 32 of these trips she had free, unscheduled days, some of
which she took as personal time. These trips included 12 visits
to Columbus, OH, her home town where she keeps a residence. On
most occasions her trips to Columbus did not coincide with any
official business in the city. She attached stops in Columbus
to other trips to Ohio. In one case, Molitoris attached a stop
in Columbus to a trip to San Francisco, spending five personal
days in Columbus when she had no official business in the city
or even in the State. Molitoris also took six international
trips to 21 foreign cities: Caracas, Vienna, Frankfurt, Calais,
Paris, Geneva, Lille, London, Berlin, Warsaw, Yokota, Bangkok,
Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Osaka, Tokyo, Manila,
Vancouver, and Victoria.
Coast Guard Commandant Robert Kramek, incurred especially
high travel costs relative to the number of trips he took due
to his frequent use of Government (USCG) aircraft. Between June
1994 and June 1996, Admiral Kramek took 62 trips. Five of these
trips were international, during which he visited England,
France, Cuba, Norway, Russia, Iceland, Japan, Panama,
Argentina, Bolivia, Peru, and Venezuela. His travel costs
(including accompanying staff and his wife) were $304,471.30.
Admiral Kramek's wife accompanied him on about half (30) of his
official trips. The USCG covered her transportation costs. The
USCG justifies Mrs. Kramek's travel because she ``plays a
critical representational role'' as a service chief's wife.
In response to the subcommittee's inquiry, the USCG noted
that Admiral Kramek ``will reduce his overall travel by 15%''
in 1996 and that ``Admiral Kramek has also mandated that all
other Coast Guard flag officers and SES's reduce their overall
travel by 15%.'' Admiral Kramek's seemingly sudden decision to
reduce travel in 1996 is curious because as of the second
quarter of the year, he had already spent more than half of his
total travel expenses for previous years. To achieve a 15
percent reduction in travel, he would have to sharply curtail
his travel for the remainder of the year.
FAA Administrator David Hinson took 90 trips between August
1993 and April 1996. His travels included eight international
trips to 15 foreign locales: Paris, Toulouse, Zurich,
Amsterdam, Brussels, Bejing, Tokyo, Geneva, Tel Aviv,
Frankfurt, London, Madrid, Santiago, Montreal, and Saudi
Arabia. His trips (including airfare for accompanying staff,
but not their per diem and lodging expenses) cost $320,963.53.
Like Admiral Kramek, Administrator Hinson incurred very high
travel costs because of his frequent use of Government (FAA)
aircraft. For many of the trips, the FAA did not report an
estimated cost for the FAA aircraft, so the subcommittee's
figure for Hinson's costs is an underestimate.
[NOTE: All the above data on each DOT administrator was
provided to the subcommittee by the respective DOT
Administrations at the subcommittee's request.]
c. Hearings.--None.
12. Travel Practices of SEC Chairman Arthur Levitt.
a. Summary.--The subcommittee investigated the travel
practices of the Securities and Exchange Commission's (SEC)
Chairman Arthur Levitt. An initial letter was sent from
subcommittee Chairman McIntosh to Chairman Levitt on March 8,
1996, requesting information about the SEC's travel budget for
fiscal years 1991 through 1996 and about compliance with
Federal travel practices. The letter also requested that Levitt
disclose each time he traveled at government expense since
becoming chairman, the purpose of his trips, and the cost to
the Federal Government for the trips. In subsequent letters
sent on April 23, April 29, May 6, June 4, November 13, and
December 6, 1996 as well as in meetings with Levitt's staff,
the subcommittee requested further information, including
copies of his schedule for all travel days, a complete list of
all days he took as personal leave, copies of vouchers for all
his trips, and a list of all the occasions on which Mrs. Levitt
accompanied him on official travel.
The period of Levitt's travel reviewed by the subcommittee
is August 1993 through November 1996 (approximately 3 years).
During that time, Levitt took numerous trips paid for or
subsidized by the U.S. taxpayer. The approximate total cost of
his international and domestic travel through October 1996 (not
including accompanying staff) was $104,758.
b. Benefits.--The subcommittee plans to continue its
inquiry into the travel practices of Chairman Levitt.
Particularly, the subcommittee will examine what internal
controls are in place at the SEC to prevent abuse of taxpayer
dollars and whether these controls are being properly
implemented by the comptroller and others.
[NOTE: All the above data on SEC Chairman Arthur Levitt's
travel was provided to the subcommittee by the SEC at the
subcommittee's request.]
c. Hearings.--None.
13. Travel Practices of NTSB Chairman Jim Hall.
a. Summary.--The subcommittee investigated the travel
practices of the National Transportation Safety Board (NTSB)
Chairman Jim Hall. An initial letter was sent from subcommittee
Chairman McIntosh to Chairman Hall on March 8, 1996, requesting
information about the NTSB's travel budget for fiscal years
1991 through 1996 and about compliance with Federal travel
practices. The letter also requested that Hall disclose each
time he traveled at Government expense since becoming chairman,
the purpose of his trips, and the cost to the Federal
Government for the trips. In subsequent letters on April 17 and
June 4 as well as in discussions with Hall's staff, the
subcommittee requested further information, including copies of
his schedule for all travel days, copies of vouchers for all
his trips, copies of NTSB trip reports filed for each of his
official trips, and information regarding the designation of
Chattanooga as an alternate home base.
b. Benefits.--The subcommittee learned that Chairman Hall
has traveled extensively since taking the position as acting
chairman in June 1994. (He was confirmed as chairman in October
1994.) He took 51 official trips between July 1994 and February
1996. His trips were largely domestic, but also included visits
to foreign locales, including London, Paris, Moscow, Australia,
Puerto Rico and Canada. The total cost to the taxpayer for his
travels (including accompanying staff) was $141,251.14.
In Hall's May 10 letter to the subcommittee, he wrote that,
``During the process of compiling the requested documents, a
few instances were discovered in which the complex and
confusing rules governing alternate home base appear to have
been unintentionally misinterpreted. For example, my
understanding that establishing Chattanooga as my alternate
home base allowed me to be reimbursed as if I were traveling
out of Washington was incorrect.'' Therefore, as a result of
the subcommittee's investigation into the matter, Hall was
forced to reimburse the Government $1,887, a direct savings to
the American taxpayer.
[NOTE: All the above data on NTSB Chairman Hall's travel
was provided to the subcommittee by the NTSB at the
subcommittee's request.]
c. Hearings.--None.
14. Cleaning Up the Superfund Program.
a. Summary.--On May 8, 1996, the subcommittee held a
hearing on the Federal Superfund program in order to continue
the oversight performed by its predecessor subcommittee and to
assist ongoing efforts to reauthorize this program. The
subcommittee's review focused on: the current state of the
Superfund program; how well the program is being managed under
the reforms initiated by the Environmental Protection Agency
(EPA); and on the limits to improving the cleanup process
without new legislation.
The Superfund program was created in 1980 when Congress
enacted the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) to identify and cleanup the Nation's
worst hazardous waste sites. Activity under the program
includes emergency cleanups (removal actions) and the
designation of sites on a National Priorities List (NPL) for
longer-term remedial actions. Since 1980, approximately $16
billion has been obligated by the EPA. For this investment,
EPA's program has cleaned up only 128 sites as of November,
1996, about 9 percent of the 1,387 sites on the NPL.\27\
Moreover, at least 40 percent of the deleted sites required no
remedial action at all.
---------------------------------------------------------------------------
\27\ 40 CFR Part 300, App. B, Table 1. Also, see the Federal
Register generally for NPL deletions.
---------------------------------------------------------------------------
On April 23, 1996, in testimony before the Senate Committee
on Environment and Public Works, EPA Administrator Carol
Browner claimed great strides in reforming Superfund. She
stated that ``the current program is fundamentally different
from the program as it existed just three years ago.'' Over the
past 3 years, the Agency has implemented three rounds of
Superfund reforms. Among other initiatives, the EPA has
established a remedy review board to consider costly remedies,
and drafted guidance to better control costs in remedy
selection, to increase the number of protected small
contributors, and to conduct national risk-based priority-
setting for funding cleanups. Administrator Browner maintained
that these initiatives have produced ``measurable benefits'' to
Superfund stakeholders and to public health and the environment
by providing significant resource savings, accelerating
cleanups, reducing transaction costs, and relieving small
businesses of liability.
About 11 million Americans live within one mile of the
Nation's Superfund sites.\28\ Nonetheless, the current pace of
cleanups has not accelerated at all. It still takes at least 12
years on average to clean up a Superfund site.\29\ The fact
that, within the last 3 years, sites are finally reaching the
construction completion stage is simply a function of the
Superfund pipeline and has nothing to do with the pace of
cleanup. Indeed, testimony from a wide array of witnesses who
appeared at the subcommittee's hearing indicated that EPA's
initiatives have done little as yet to reduce the inordinate
cleanup delays caused by interminable legal disputes over
liability issues and the remedy selection process. Moreover,
these disputes continue to generate enormous transaction costs.
Over 30 percent of the $28 billion that has been spent on
Superfund to date has gone to lawyers, consultants, and other
non-cleanup expenses, instead of to cleaning up the most
serious hazardous waste sites threatening the health and
environment of the American public.\30\
---------------------------------------------------------------------------
\28\ Agency for Toxic Substances and Disease Registry's ``Report to
Congress: 1993, 1994, 1995'' at 5 (Oct. 1996).
\29\ EPA, Office of Inspector General, ``Review of Barriers to
Superfund Cleanups,'' at 2 (Nov. 29, 1995).
\30\ See testimony of Jan Paul Acton, Assistant Director,
Congressional Budget Office, Superfund Reauthorization Hearings,
Committee on Transportation and Infrastructure, June 22, 1995, at 678.
---------------------------------------------------------------------------
In his testimony at the hearing, EPA's own Inspector
General identified negotiations over who pays for cleanup costs
as a major barrier to cleaning up Superfund sites. Based on an
audit of several highly toxic waste sites, the Inspector
General concluded that liability negotiations clearly consume a
lot of time and significantly delay completion of site
cleanups. Moreover, several witnesses observed that such
extended negotiations are inescapable due to the inherent
unfairness of the current liability scheme. In theory,
Superfund is supposed to enforce a ``polluter pays'' policy.
That is, if culpable parties can be linked to a polluted site,
these ``potentially responsible parties'' (PRPs) must pay for
cleanup efforts. However, these witnesses testified that, in
practice, Superfund's rule of ``retroactive, joint and several,
and strict liability'' has been used to force numerous parties
to pay for cleanup, even when they were not at fault. The
Superfund statute established a sweeping liability system that
declares that any person who contributed to contamination at a
Superfund site at any time can be held liable for all costs of
cleaning up that property, regardless of the degree of
involvement of that person with the site, or even if the person
fully complied with the laws at the time of disposal. As a
result, EPA's Inspector General found that cleanups have been
significantly delayed while PRPs and EPA negotiate the extent
of the total liability and the allocation of liability among
the PRP's.
Several witnesses also pointed out the disproportionate
impact that this unjust liability scheme has had on small
businesses. Indeed, Mr. Leon Dixon testified that his family
bronze foundry business, Beckett Bronze, is now facing a third
party liability suit seeking a contribution of about $26,000
for cleanup costs. The only evidence of Beckett Bronze's
contribution to the contamination is a dump receipt for $16.l5,
dated January 3, 1972. Furthermore, as Mr. James Nerger
testified, persons are frequently named as PRP's even when they
had no control over where their wastes were sent for disposal,
and even though they were not required at the time to keep
detailed records. His small family-owned solvent recycling
business, Marisol, Inc., is potentially liable for $3-$10
million. This is a business with $12 million in total annual
sales that recently received its fifth consecutive E.I.
Digest's Regulatory Compliance Award.
Remedy selection, when based on unrealistic land-use
assumptions, also can be viewed as a barrier to cleanups. By
making cleanups unnecessarily expensive, such remedies reduce
the cost-effectiveness of the Superfund program. As
Representative Lincoln stated in written testimony, ``Sites
that are located in industrial areas should not meet soil
eating standards that are required for land used for day care
centers.'' Stated differently by the representatives of the
General Accounting Office (GAO), using realistic land-use
assumptions will help to maximize Superfund resources for the
protection of public health and the environment. GAO reviewed
the sites contained in an EPA data base on health risks from
Superfund sites to evaluate the significance of land-use
assumptions. About half of the sites (119) in the data base did
not pose health risks serious enough to justify their cleanup
under current land-use assumptions. However, EPA nonetheless
judged cleanup necessary because the agency assumed the sites'
uses would change in a way that would increase human exposure
to contaminants in the future. (The sites studied represent
most of the sites where EPA made cleanup decisions between 1991
and mid-1993.)
Both GAO and Mr. Jeffrey Rosmarin, whose company is the
current owner of the Liberty Industrial Finishing Superfund
Site, testified that EPA has often assumed a site will be used
for residential purposes and used residential exposure
scenarios when calculating risks, even when the planned future
use of a site was commercial or industrial redevelopment. Mr.
Rosmarin testified that, although the Liberty Site has been
zoned light industrial and used for that purpose for over 80
years, EPA Region II did not even include light industrial use
as a possible future use at this site in the Remedial
Investigation report, issued in January 1994. According to one
EPA estimate, the commercial level cleanup would be in the $6
million range, while the residential level cleanup would be
approximately $60 million. Moreover, Mr. Rosmarin noted that an
EPA toxicologist has stated that the commercial industrial
level cleanup would have the same health benefits for the
surrounding community as the residential cleanup.
In addition, GAO testified that EPA can reduce the risks at
sites more quickly and economically by using its removal
authority, where appropriate, instead of its more expensive and
time-consuming traditional remedial techniques. If the
accelerated cleanup techniques were used more consistently, GAO
estimated that the Federal Government's and private sector's
Superfund costs could be reduced by as much as $1.7 billion
over the life of the program. However, GAO also noted that
restrictions in CERCLA on the cost and time allowed for removal
actions and inflexible funding arrangements have limited EPA's
use of non-time-critical removals (where removal action in
response to threats to human health or the environment can be
delayed for at least 6 months in order to adequately plan for
cleanup.)
Finally, Representative Lincoln pointed out that ``one size
does not fit all'' when it comes to cleanup remedies. Today, a
large amount of cleanup spending is devoted to meeting cleanup
criteria under other statutes and regulations that were not
developed for remediation waste and/or complying with
Superfund's current statutory preference for treatment--whether
or not such standards are, in fact, necessary to protect human
health and the environment at a specific site. The
Congresswoman believes that, given the truly local impacts of
the Superfund program, States should be given the flexibility
to design site-specific, risk-based remedies that are tailored
to their particular environmental make-ups.
Witnesses also testified regarding significant management
inefficiencies in the implementation of the Superfund program.
GAO observed that the estimated cost of cleaning up the
Nation's hazardous waste problem has grown to $75 billion for
nonfederal Superfund sites. GAO maintains that, in this time of
fiscal constraint, EPA could achieve more cost-effective
cleanups by basing its priorities for funding cleanups on the
principle of risk reduction. However, GAO has found that, to
date, although one of the EPA's key policy objectives is to
address the ``worst sites first,'' relative risk plays little
role in the agency's determinations of priorities. EPA
headquarters leaves the task of setting priorities to the
regions, yet the regions do not rank sites by risk. As a
result, the risks most dangerous to human health are not
necessarily those that are addressed first.
Commissioner Charles Williams of the Minnesota Pollution
Control Agency stated that while the national average cost for
cleaning up Federal Superfund sites is $31 million, the average
cost to the State of Minnesota for cleaning up its sites is $3
million.
Finally, Mrs. Helena Tielmann testified that the
``cleanup'' of her property by EPA contractors represents a
prime example of gross mismanagement; a case where the property
was left in far worse environmental condition than before
remediation. Mrs. Tielmann lives with her husband and three
children on a Superfund hazardous waste site, a 30-acre farm
that had been the dumping ground for asbestos 25 years ago.
After excavating the asbestos throughout their property and
solidifying the flaky substance into a concrete monolith in
their backyard, EPA's contractor backfilled the excavated soil
with more than 100,000 tons of untested industrial fill from a
contaminated industrial site. When later tested, the industrial
fill, which, in fact, contained asbestos, exceeded New Jersey's
residential use criteria. There is now more asbestos on the
surface of the Tielmann's yard than there was before EPA
implemented its remedy. Mrs. Tielmann maintains that this
nightmare would never have occurred if there had been proper
management, supervision, and controls; if EPA had used
competent contractors; and if the Agency had been responsive to
the property owner and the local community.
b. Benefits.--This hearing has served to document further
Superfund's fundamental flaws. Once again, testimony reflects a
rigid statutory process that does not provide the flexibility
to address effectively the wide variety of circumstances
encountered at sites. It also is clear from the testimony that
this program continues to wreak havoc on the lives of hard-
working and law-abiding citizens. Overall, the program
continues to fall far short of protecting human health and the
environment.
Moreover, the record developed in the subcommittee's
hearing stands in sharp contrast to Administrator Browner's
recent assertion that the current program is fundamentally
different from the one in years past. This subcommittee has
heard testimony that shows that EPA's initiatives to improve
the pace, cost, and fairness of the Superfund program within
the constraints of the law are not really being implemented.
Clearly, these reforms have not received sustained management
attention and follow-through.
Most importantly, the testimony given in this hearing
reflects a dire need for legislative reform of this wasteful
and expensive program. As J. Lawrence Wilson, chairman and
chief executive of Rohm & Haas Co, stated before the Senate
Environment and Public Works Committee on April 23, 1996:
``Every month that continues to go by without reauthorization
means more delays in cleanups, more litigation resulting from
an inequitable liability scheme, more controversy between the
public and EPA, and more wasteful spending by both the
government and the private sector.''
c. Hearings.--The subcommittee held a hearing entitled,
``Cleaning up the Superfund Program,'' on May 8, 1996.
15. Havertown Superfund Site.
a. Summary.--The subcommittee is examining the process that
the Environmental Protection Agency has followed in developing
a cleanup plan for the Havertown PCP Superfund site (NPL No.
542; CERCLIS No. PAD 002338010). This investigation was
prompted by complaints from township citizens. Residents of the
local community expressed difficulty in obtaining information
about EPA's technical and economic analyses and raised concerns
about whether the Agency has properly evaluated all viable
remediation options. In addition, the subcommittee undertook
this inquiry because this case involves issues that are the
focus of EPA's Superfund administrative reforms.
The Havertown PCP site is a National Priorities List
Superfund site in Havertown, PA. The site, which has been on
the NPL since 1983, is surrounded by a mixture of commercial
establishments, industries, parks, schools and residential
homes. The site covers 12 to 15 acres, including a wood
treatment facility. From 1947 to 1963, National Wood Preservers
disposed of wood treatment waste materials into a 25 to 35 foot
deep well that entered the groundwater under the plant. These
wastes generally consisted of spent wood-treatment solutions
containing pentachlorophenol (PCP) and diesel-type oil. The
Agency also has found arsenic and dioxins on the site. The
liquid wastes leached into a nearby small stream that flows
through a residential area and eventually into the Delaware
River.
EPA has taken various steps, such as conducting an
emergency removal action, fencing the site, and installing an
oil/water separator, in order to stem the further spread of
site contamination and, thus, to reduce the potential of
exposure to contamination. Recently, to respond to soil and
ground water contamination, EPA began the preparatory work for
placing a protective cap over areas of the site. The cap is
part of EPA's response action at the site and will be used to
prevent contact with contaminated soil and prevent rain water
from trickling down through the soil and moving additional
contamination into the groundwater.
On July 26, 1996, the subcommittee sent a letter of inquiry
to EPA requesting information about its remedy decisions. The
letter called upon EPA to provide the studies and analyses on
which the Agency has relied for remedy selection at the
Havertown site. On August 15, 1996, the subcommittee received
from EPA Region III information and documentation in response
to the inquiry. In reviewing these documents, the subcommittee
has focused particularly on the following matters:
1. Re-evaluation of the Remedy Decision. Whether material
changes in site conditions and/or technological developments
have occurred since the Havertown site was listed on the NPL
that justify an alternative or modified remedy. Has EPA
performed a coordinated current review of the site to determine
the potential effectiveness of the selected remedy, including
collecting and analyzing updated site information, re-
appraising the remedy's expected performance and costs, and
evaluating currently available alternatives.
2. Community Participation. Whether the community has had
the opportunity to play a meaningful role in the selection of
the cleanup remedy. Has EPA provided the local community with
the material information needed for informed participation.
3. Consideration of Future Land Use. To what extent has EPA
conferred with local officials and other interested parties in
developing a land use plan to guide decisionmaking on remedy
selection.
4. Economic Redevelopment of Contaminated Property. To what
extent will the selected remedy inhibit productive use of the
property. To what extent will this remedy keep the source areas
under control so that the contamination will not continue to
migrate.
5. National Risk-Based Priority Setting. Whether the
Havertown site is truly 1 of the 10 worst sites in this
country, based on the criteria that EPA used to set national
risk-based priorities for funding cleanups.
Finally, the subcommittee's review of EPA's responses has
raised additional questions that the subcommittee plans to
probe further.
b. Benefits.--In this Superfund case, the issues that are
in dispute between the local community and EPA are the focus of
the Agency's administrative reforms. The subcommittee is
reviewing the Agency's implementation of such reforms at this
site. Also, the Agency has listed this site as 1 of the 10
worst sites in the country on its national risk-based
priorities list for funding. After reviewing the Havertown
Superfund documentation, this designation appears inappropriate
based on the criteria that the Agency applied in developing the
list.
c. Hearings.--None were held.
NATIONAL SECURITY, INTERNATIONAL AFFAIRS, AND CRIMINAL JUSTICE
SUBCOMMITTEE
1. Office of National Drug Control Policy.
a. Summary.--The National Narcotics Leadership Act of 1988
(21 U.S.C. 1501 et seq.) established the Office of National
Drug Control Policy (ONDCP). The act also provided for
appointment of a Director of ONDCP, and required that the
Director develop an overall strategy and budget for Federal
anti-narcotics efforts, including both supply and reduction.
Specifically, the statute provides that ONDCP: ``(A) include
comprehensive, research based, long-range goals for reducing
drug abuse in the United States; (B) include short-term
measurable objectives which the Director determines may be
realistically achieved in the 2 year period beginning on the
date of the submission of the strategy; (C) describe the
balance between resources devoted to supply reduction and
demand reduction; and (D) review State and local drug control
activities to ensure that the United States pursues well-
coordinated and effective drug control at all levels of
government.'' Pursuant to the Government Reform and Oversight
Committee's jurisdiction over ONDCP, the Subcommittee on
National Security, International Affairs, and Criminal Justice
convened five indepth oversight hearings during 1995 to assess
the status and effectiveness of the Nation's Federal drug
control strategy and the strategy's implementation. The
subcommittee zeroed in on the interdiction program, source
country, law enforcement, prevention and treatment components
as prescribed by the Federal strategy.
Before, during and after these hearings, expert advice and
recommendations were sought from top administration officials
and preeminent outside experts. The subcommittee's twin aims
were to (a) identify strategic and implementation problems, and
(b) identify sound recommendations for achieving measurable
improvement in combating illegal drug importation and use.
As a backdrop for this investigation, the committee
recognized that the impact of illegal drugs on our society has
been a growing concern since the early 1970's. For example, in
June 1971, President Nixon told Congress that a national
response to drug addiction was needed since ``the problem has
assumed the dimensions of a national emergency.'' \31\
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\31\ Musto, David F. The American Disease: Origins of Narcotic
Control, at 256 (1987).
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Moreover, by 1980, illegal drug use was so widespread that
antidrug parent groups such as Pride and National Family
Partnership began to take root in America's heartland; in fact,
by 1979 more than half of all minors surveyed acknowledged
illegal drug use.\32\
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\32\ In 1979, 54 percent of youth respondents to the Monitoring the
Future Survey indicated drug use. See the 1995 Pride Report, Executive
Summary, at 1.
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During the early 1980's, the Nation awakened to the
enormity of the incursion being made by illegal drugs. Former
First Lady Nancy Reagan became a leader in the anti-drug, or
drug abuse prevention, movement. Mrs. Reagan effectively led
the campaign to educate our Nation's youth and stem rising
youth drug abuse. Her most famous statement, ``Just Say No,''
the answer to a child's question about how to respond if
pressed to take drugs, became a guiding phrase in the
prevention movement. Unrivaled in her energy and commitment,
Nancy Reagan became the movement's chief spokesperson for much
of the decade.
Finally, as indicated earlier, during the mid-1980's,
President Reagan showed unprecedented leadership in what soon
became known as a war against illegal drug use and those who
trafficked in illegal drugs.\33\
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\33\ See ``Testimony of Admiral Paul Yost,'' supra.
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In 1988, Congress passed the Anti-Drug Abuse Act of 1988
(Public Law 100-690, Title I, Subtitle A), which established
the Office of National Drug Control Policy (ONDCP) and created
the new position of ``White House Drug Czar'' or ONDCP
Director. In recognition of the threat posed to our society by
the menace of illegal drug use, the act required the White
House ONDCP Director to present an annual strategy with
measurable goals and a Federal drug control budget to the
President and Congress.\34\
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\34\ Public Law 100-690, Title I, Subtitle A.
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The 1988 act has been tinkered with in the years since. In
1994, pursuant to the Violent Crime Control and Law Enforcement
Act of 1994 (Public Law 103-322, Title X), the ``Drug Czar''
was authorized to make recommendations to agencies during
budget formulation. The aim of this 1994 change was to improve
resource targeting and policy consistency at Federal agencies
involved in implementing the National Drug Control Strategy, as
well as to heighten overall counternarcotics coordination
throughout the Federal Government. In addition, the ``Drug
Czar'' was authorized under the 1994 act to exercise discretion
over 2 percent of the overall drug budget. While some have
suggested that this provision achieved little, the ``Drug
Czar'' could theoretically transfer up to 2 percent of the
budget among National Drug Control Program accounts, upon
approval by the appropriations committees.\35\
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\35\ In fact, this 2 percent measure has proved more theoretical
than actual, as particular agency heads have resisted the transfers and
prevailed in those efforts. For example, FBI Director Louis Freeh
reportedly blocked resource allocations by ONDCP in 1994.
---------------------------------------------------------------------------
Beyond these hallmark 1995 hearings, during recent prior
sessions of Congress, legislative and oversight hearings have
been held on various aspects of national drug policy. However,
these hearings have focused on particular aspects of the ONDCP
Strategy and have been conducted against the backdrop of
falling drug use or general support by the minority-controlled
Congress for the overall White House Strategy.
This subcommittee's 1995 oversight hearings, proposed and
supported by both minority and majority subcommittee members,
were the result of recent developments, including the steep
rise in juvenile and overall drug use (including both rising
casual drug use, and increasing regularity of use); the growing
awareness that increased juvenile drug use is linked to rising
juvenile crime; \36\ the absence of a long-promised White House
Heroin Strategy; \37\ an objective reduction in interdiction
efforts; \38\ an apparent lack of progress in source countries
toward goals set forth for so-called source country programs;
\39\ reports of lagging accountability in certain drug
prevention programs; \40\ deemphasis by the media on drug
abuse; \41\ overall rise in drug related juvenile violence;
\42\ and general concerns about interagency coordination of the
Federal counternarcotics effort.\43\
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\36\ 1995 OJJDP Report, pp. 58-65.
\37\ The President promised a Heroin Strategy within 120 days of
taking office. Without any White House announcement, he signed a Heroin
Strategy in late November 1995. The signed Strategy offers little
detail, and was promulgated without Implementing Guidelines, which has
so far made it a nullity.
\38\ See ``Interdiction Policy Oversight'' section, below.
\39\ See ``Source Country Program Oversight'' section, below.
\40\ In particular, reports of waste and misapplication of funds
have been associated with certain States' administration of Safe and
Drug Free Schools moneys, and these allegations are under continuing
investigation by the Department of Education Inspector General's Office
and the General Accounting Office.
\41\ See ``prevention Policy Oversight'' section, below.
\42\ See ``Background'' section, below.
\43\ See, e.g., Yost Testimony, below.
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The intent to examine National Drug Control Strategy was
set forth in the February 6, 1995 subcommittee Strategic Plan
in accord with both the majority and minority view that the
area required oversight.\44\
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\44\ The topic was discussed at a meeting of the full subcommittee
in early February, views were solicited by the subcommittee chairman,
and both minority and majority members indicated a desire to conduct
oversight in this area.
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In the course of investigating the status of the National
Drug Control Strategy, the Strategy's implementation and the
need for improvement, the subcommittee engaged in extensive
correspondence with the administration, including direct
correspondence with the President; the Vice President; Anthony
Lake, the President's National Security Advisor; Dr. Lee P.
Brown, Director of ONDCP; Admiral Robert E. Kramek, U.S.
Interdiction Coordinator and Coast Guard Commandant; Thomas A.
Constantine, Administrator of the Drug Enforcement
Administration; George Weise, Commissioner of the U.S. Customs
Service; Brian Sheridan, Department of Defense Deputy Assistant
for Drug Enforcement Policy; Ambassador Jane E. Becker,
Department of State Deputy Assistant Secretary for
International Narcotics and Law Enforcement; and others at the
Departments of Justice, Defense, State, ONDCP and elsewhere in
the administration.
The committee investigation included one fact finding trip.
Subcommittee members, and members of the United States Coast
Guard traveled to the Seventh Coast Guard District in the
Caribbean transit zone. There, they attended briefings at
Seventh District Headquarters in Miami, Coast Guard
interdiction initiatives at sea, Drug Enforcement
Administration (DEA) activities in the Greater Antilles, high
level interagency briefings in Puerto Rico by the FBI, DEA,
Customs, Border Patrol, and local authorities, and received
indepth briefings by Admiral Granuzo and others at Joint Task
Force Six in Key West, dedicated to Eastern Caribbean Drug
Interdiction. This trip was arranged in coordination with the
U.S. Coast Guard, and invitations were extended to majority and
minority members. The trip occurred on June 16 through 19,
1995. Additionally, in coordination with ONDCP, subcommittee
Chairman Zeliff traveled with the White House Director of ONDCP
to see prevention and treatment programs first-hand in
Massachusetts.
Throughout 1995, the subcommittee met extensively with the
agencies involved in the counternarcotics effort, and
endeavored to collect directly and indirectly both statistical
and anecdotal evidence on the effectiveness and accountability
of the current National Drug Control Strategy and programs.
These efforts spanned the key areas of interdiction, law
enforcement, prevention, treatment, and source country
initiatives. The subcommittee sought further insight from GAO
investigators, agents in the field, and departmental inspectors
general.
b. Benefits.--As a result of its investigation into the use
of illegal drugs in America and the Nations fight against
drugs, the committee uncovered the following basic facts:
(1) Casual teenage drug use trends have suffered a
marked reversal over the past 3 years, and are
dramatically up in virtually every age group and for
every illicit drug, including heroin, crack, cocaine
hydrochloride, LSD, non-LSD hallucinogens,
methamphetamine, inhalants, stimulants, and marijuana.
(2) Rising casual teenage drug use is closely
correlated with rising juvenile violent crime.
(3) If rising teenage drug use and the close
correlation with violent juvenile crime continue to
rise on their current path, the Nation will experience
a doubling of violent crime by 2010.\45\
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\45\ See Juvenile Offenders and Victims: A National Report, OJJDP,
Department of Justice, September 1995.
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(4) The nature of casual teenage drug use is
changing. Annual or infrequent teenage experimentation
with illegal drugs is being replaced by regular,
monthly or addictive teenage drug use.\46\
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\46\ See 1995 surveys conducted by PRIDE, The National Household
Survey, and The University of Michigan's Monitoring the Future Survey.
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(5) The nationwide street price for most illicit
drugs is lower than at any time in recent years, and
the potency of those same drugs, particularly heroin
and crack, is higher.\47\
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\47\ See ``Interdiction Policy Oversight'' section, below.
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(6) Nationwide, drug related emergencies are at an
all time high.\48\
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\48\ See ``Background'' section, below.
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(7) The 1994 and 1995 White House ONDCP strategies
consciously shift resources away from priorities set in
the late 1980's, namely from prevention and
interdiction to treatment of ``hardcore addicts'' and
source country programs.
(8) During 1993, 1994, and most of 1995, the
President put little emphasis on, and manifested little
interest in, either the demand side war against illegal
drug use or the supply side war against international
narcotics traffickers. An objective look at the
President's public addresses and his actions regarding
gutting the ONDCP when he became President,
interactions with Congress, and discussions with
foreign leaders reveals that attention to the rising
tide of illegal drug use is a low Presidential
priority.\49\
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\49\ See ``Background,'' ``Interdiction Policy Oversight'' and
``Prevention Policy Oversight'' sections, below.
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(9) The President's actual attention to this problem,
measured by other than the paucity of speeches and
proposed budget cuts, has been uniformly low. In
addition to the absence of direct Presidential
involvement in the drug war, the President produced no
1993 Annual Strategy, despite a statutory duty to do so
under the 1988 Antidrug Abuse Act; delayed appointment
of a White House Drug Czar, or ONDCP Director, until
half way through 1993; and produced only a terse
``interim'' 1993 Strategy.
(10) The Drug War appears also to have been expressly
reduced to a low national security priority early in
the administration, and not to have been formally
elevated at any time since.\50\
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\50\ See ``Interdiction Policy Oversight'' section, below.
Reportedly, the drug war's national security priority during the first
3 years of the Clinton administration was number 29 out of 29.
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(11) While the position is contested by the
administration's ONDCP Director, a wide cross section
of drug policy experts inside and outside of the
administration concur that the absence of direct
Presidential involvement in foreign and domestic
counternarcotics efforts is one reason for the recent
reversal in youth drug use trends, reduced street
prices for most narcotics, and increased potency of
most illicit drugs.
(12) Prevention programs that teach a right-wrong
distinction in drug use, or ``no use,'' such as
D.A.R.E., G.R.E.A.T., the Nancy Reagan After School
Program, community-based efforts run by groups such as
C.A.D.C.A., PRIDE, the National Parents Foundation, and
Texans War on Drugs, as well as other local school and
workplace programs, have proven both successful and
popular where they have been well-managed and
accountable--despite the 1995 White House ONDCP
Strategy statement that ``[a]ntidrug messages are
losing their potency among the Nation's youth;''.\51\
---------------------------------------------------------------------------
\51\ See ``Prevention Oversight'' section, below.
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(13) Federal drug prevention programs, such as Safe
and Drug Free Schools, while supporting successful
prevention programs in many parts of the country, have
also been subject to misapplication, waste and abuse.
\52\
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\52\ See ``Prevention Oversight'' section, below.
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(14) The Nation's law enforcement community needs
greater flexibility and support from the Federal
Government in addressing the rise in juvenile and drug
related crime. While certain developments are
promising, such as the $25 million increase in Byrne
Grant funding in fiscal 1996, a law enforcement block
grant to supersede the COPS program, and increased
reliance on joint interagency task forces, valuable
time has been lost in addressing this need. Renewed
attention to strengthening Local, County, State and
Federal law enforcement's counternarcotics efforts is
required.
(15) The Nation's interdiction effort has been
dramatically curtailed over the past 3 years, due to
lack of White House support for interdiction needs,
reduced funding, a tiny staff at the United States
Interdiction Coordinator's Office, the absence of an
ONDCP Deputy for Supply Reduction, reduced support for
National Guard container search days, the elimination
of certain cost effective assets in the Eastern
Caribbean, reassignment or absence of key intelligence
gathering assets, reluctance by the Department of State
to elevate counternarcotics to a top priority in
certain source and transit countries, unnecessary
interagency quarreling over asset management and
personnel issues, and the apparent inability or
unwillingness of the White House Drug Czar to bring
essential interdiction community concerns to the
attention of the President or to aid the President's
Interdiction Coordinator in doing so; and
(16) Poor management and interagency coordination in
source countries.
c. Hearings.--The subcommittee held five hearings in
conjunction with its investigation of ONDCP. Those hearings
include the following: (1) ``Effectiveness of the National Drug
Control Strategy and the Status of the Drug War,'' March 9 and
April 6, 1995. (2) ``Illicit Drug Availability: Are
Interdiction Efforts Hampered by a Lack of Agency Resources?,''
June 27 and 28, 1995. (3) ``The Drug Problem in New Hampshire:
A Microcosm of America,'' September 25, 1995.
On March 9, 1995, the subcommittee investigation resulted
in its first hearing. The purpose of this hearing was to
examine President Clinton's 1995 National Drug Control
Strategy, and to begin an assessment of how effectively the
Nation is fighting illegal drug abuse, domestically and
internationally. Acknowledged components of the Drug War under
review include prevention, treatment, interdiction, law
enforcement, and source country programs.
At this hearing, testimony was received from four panels.
The subcommittee heard first from former First Lady of the
United States, Nancy Reagan.
Testimony was received from William J. Bennett, former
Director of the Office of National Drug Control Policy (ONDCP);
Robert C. Bonner, former Administrator of the Drug Enforcement
Administration; and John Walters, former Acting Director of
ONDCP.
The subcommittee also heard testimony from Dr. Lee Brown,
Director of ONDCP. Finally, the subcommittee heard from Admiral
Paul A. Yost, Jr., former Coast Guard Commandant; and several
nationally recognized drug abuse prevention experts, including
Thomas Hedrick, Jr., senior representative of the Partnership
for a Drug-Free America; G. Bridget Ryan, executive director of
California's BEST Foundation; James Copple, national director
of the Community Antidrug Coalitions of America (CADCA); and
Charles Robert Heard III, director of program services for
Texans' War on Drugs.
With varying degrees of emphasis, all panels acknowledged
that current Federal efforts are under strain from reduced
emphasis on certain components of the Drug War, budgetary
pressure, and in some cases accountability.
The panels also acknowledged that, over the past several
years, there has been a marked reversal in several important
national trends including most notably a rise in casual drug
use by juveniles, but also reaching to perceived drug
availability (up), perceived risk of use (down), average street
price (down), drug related medical emergencies (up), drug
related violent juvenile crime (up), total Federal drug
prosecutions (down), and parental attention to the drug issue
(down).\53\
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\53\ Press Release, the University of Michigan, ``Drug Use Rises
Again in 1995 Among American Teens,'' December 15, 1995; Press Release,
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2,
1995; Preliminary Estimates from the Drug Abuse Warning Network, U.S.
Department of Health and Human Services, September 1995; James E.
Burke, ``Presentation: An Overview of Illegal Drugs in America,''
Partnership for a Drug-Free America, Fall 1995.
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The subcommittee found that these reversals have continued
through the period 1993 to 1995, although certain trend lines,
including a shift from falling to rising casual use, typically
among juveniles, began in 1992. In addition, a shift of certain
interdiction resources, which were earlier a part of the
counter narcotics force structure, began in late 1991 with the
advent of the Persian Gulf War.
All panels agreed, albeit with differing emphases, that
renewed national leadership, including both Presidential and
congressional leadership, will be necessary to combat these
recent trend reversals, especially the rise in juvenile drug
abuse and drug related violent juvenile crime.
Subcommittee Chairman Zeliff initiated the hearing by
noting that Mrs. Reagan ``woke the Nation up to this [juvenile
drug abuse] problem and its pervasiveness in the early
1980's.'' Subcommittee Chairman Zeliff observed that the former
First Lady's ``Just Say No'' campaign effectively launched a
``national crusade'' for drug abuse prevention.
Subcommittee Chairman Zeliff also noted that, in April
1985, Mrs. Reagan held the first International Drug Conference
for the world's First Ladies. In 1988, she held the second such
conference and became the first American First Lady to speak
before the United Nations; and after leaving the White House,
she founded the Nancy Reagan Foundation, which has since
``awarded grants in excess of $5 million to drug prevention and
education programs . . .''
Appearing before the subcommittee, First Lady Nancy Reagan
testified that America has forgotten the dangers of drug use,
that America's children are at increased risk in 1995, that
there is an absence of national leadership on the drug issue,
and that a national strategy focused on treatment of so-called
hardcore addicts misses the largest at-risk population, namely
children participating in casual use. Specifically, Mrs. Reagan
explained that she had ``decided to speak [before Congress on
the drug issue] only after a lot of soul searching . . .
because my husband and everything he stands for calls for me to
be here.''
She then explained that the Nation ``is forgetting how
endangered our children are by drugs,'' that societal
``tolerance for drugs'' is up, and that ``the psychological
momentum we had against drug use [in the late 1980's and early
1990's] has been lost.'' In short, she asked, ``How could we
have forgotten so quickly?''
Directing herself to national policy, Mrs. Reagan quoted
from President Clinton's 1995 National Drug Control Strategy,
which states that ``[a]nti-drug messages have lost their
potency.'' Mrs. Reagan disagreed, testifying: ``That's not my
experience. If there's a clear and forceful `no use' message
coming from strong, outspoken leadership, it is potent . . .
Half-hearted commitment doesn't work. This drift, this
complacency, is what led me to accept your invitation to be in
Washington today . . . [W]e have lost a sense of priority on
this problem, we have lost all sense of national urgency and
leadership.''
John P. Walters, president of the New Citizenship Project
and former Acting Director of ONDCP, testified that President
Clinton has promoted policies that reversed or accelerated the
reversal of nearly a decade of falling drug use. Mr. Walters
tagged President Clinton as the source of major reversals in:
the cultural aversion to drug use, falling drug availability,
falling drug purities and rising drug prices. He sees these
trends as significant and dangerous.
Mr. Walters pointed to the President's 80 percent reduction
of ONDCP staff,\54\ the Attorney General's stated goal of
reducing mandatory minimum sentences for drug trafficking,\55\
and a Presidential directive reducing Department of Defense
support to drug interdiction efforts as damaging to the drug
control program. Further, Walters testified, the reduction in
resources to transit and source countries by 33 percent (from
$523.4 million in fiscal year 1993 to $351.4 million in fiscal
year 1994),\56\ a reduction in Federal domestic marijuana
eradication efforts, a call by the President's Surgeon General
for study of drug legalization,\57\ and ``no moral leadership
or encouragement'' from President Clinton himself as
significant factors in the Nation's rising drug problems.
---------------------------------------------------------------------------
\54\ On February 9, 1993, the White House announced that ONDCP
would have its personnel cut from 146 to 25.
\55\ See also Isikoff, the Washington Post (November 26, 1993),
pps. A1, A10-A11.
\56\ See also, ONDCP, National Drug Control Strategy: Budget
Summary (February 1994), pp. 184.
\57\ See also, Reuter, ``Elders Reiterates Her Support for Study of
Drug Legalization,'' the Washington Post (January 15, 1994), pp. A8.
---------------------------------------------------------------------------
In short, Mr. Walters testified, ``the drug problem is
simply not a part of the foreign policy agenda of the United
States under President Clinton--there is no carrot and no stick
facing countries from which the poison destroying American
lives every day comes.'' Finally, he noted that this de-
emphasis on international efforts ``fuels calls in other
countries for abandoning antidrug cooperation.'' [See also the
New York Times (February 20, 1994), pp. A6; the New York Times
(February 27, 1994), Section 4, pp. 15.]
In Mr. Walter's view, ``if these trends continue, by 1996,
the Clinton administration will have presided over the greatest
increase in drug use in modern American history.''
William J. Bennett, current Co-Director of Empower America
and former Director of ONDCP, testified that there has been a
``sharp rise in drug use,'' citing many of the same studies
cited by subcommittee Chairman Zeliff, Mrs. Reagan, Mr. Walters
and others.
According to Mr. Bennett, this rise should have ``mobilized
the Federal Government to forcefully state the case against
drug use, enforce the law and provide safety and security to
its citizens.'' Instead, ``the Clinton administration has
abdicated its responsibility'' and ``has been AWOL in the War
on Drugs,'' said the former White House Drug Czar.
Widely regarded as the most effective White House Drug Czar
to date, Mr. Bennett denounced the 80 percent cut by President
Clinton in the ONDCP staff, and the willingness of Clinton's
Attorney General to endorse reductions in mandatory minimum
sentences for drug traffickers.
Mr. Bennett introduced new facts into the national dialog
when he observed that, ``last year, the Clinton administration
directed the U.S. Military to stop providing radar tracking of
cocaine-trafficker aircraft to Colombia and Peru,'' a policy
``Congress again had to reverse,'' and noted that ``last month,
for the first time in history, the nation's drug control
strategy was introduced without the participation of the
President.'' He also believes that, if present trends continue,
by 1996 the Clinton administration will have presided over the
greatest increase in drug use ``in modern American history.''
Expanding his analysis beyond the failure of public policy,
Mr. Bennett testified that ``the Clinton administration suffers
from moral torpor on the issue'' and that, as a general matter,
``policy follows attitude.'' In support of this statement, Mr.
Bennett quoted several statements by the President on his own
prior use of drugs, in particular, President Clinton's 1991
statement that he had never ``broken any drug law,'' followed
by the 1992 statement that he had used marijuana in England but
``didn't inhale it,'' followed in turn, when asked if he would
inhale if he had it to do over, by: ``Sure, if I could, I tried
before.''
Mr. Bennett noted, on closing, that ``success in the drug
war depends above all on the efforts of parents and schools and
churches and police chiefs and judges and community leaders.''
Giving examples from more than 100 cities visited when
President Bush's Drug Czar, Mr. Bennett urged renewed
leadership.
Robert C. Bonner, former Administrator of the Drug
Enforcement Administration (DEA) under both Presidents Bush and
Clinton, a former Federal judge, and currently a partner at
Gibson, Dunn and Crutcher, testified forcefully for renewed
leadership in the Drug War: ``The bottom line is unmistakable--
during the past two years, drug use among the youth of America
has soared in nearly every category of illegal drug . . . When
juxtaposed against the immediately preceding period and nearly
a decade of declining drug use, there can be only one
conclusion--the Clinton administration's National Drug Strategy
has failed miserably, and indeed it is a tragedy.''
Crediting Mrs. Reagan's ``Just Say No'' campaign and the
Antidrug Abuse Act of 1988, Mr. Bonner noted that the onslaught
of direct and indirect damage from illegal drugs was turned
back in the mid-1980's and early 1990's. In Mr. Bonner's view,
national will and a combination of ``strong law enforcement,''
a strong ``educational and moral message,'' and effective
treatment programs for hardcore users made the difference.
However, he warns that drug treatment programs should not be
``oversold.''
Bluntly, Mr. Bonner concluded, ``there has been a near
total absence of presidential leadership by President Clinton
in the fight to turn back illegal drug use . . .'' and his
Surgeon General's remarks on legalization ``arguably encourages
it'' by further reducing perceived risk; Mr. Bonner called
Surgeon General Jocelyn Elders' statement on legalization
``dead wrong and flagrantly irresponsible for a national public
health official.''
Dr. Lee P. Brown, Director of ONDCP, testified defending
the 1995 National Drug Control Strategy. Dr. Brown testified
that President Clinton's fiscal 1996 budget sought $14.6
billion in funding across the Federal Government for drug
related Federal programs.
For context, the President's 1995 National Drug Control
Strategy lists the total ``Drug Budget'' as $14,550.4
(millions). This figure is somewhat misleading, however, since
it contains funding for a variety of programs mixed purposes,
such as the Federal Court System, Food and Drug Administration,
Social Security Administration, Department of Agriculture's
Agricultural Research Service and U.S. Forest Service,
Department of Interior's Bureau of Indian Affairs, Bureau of
Land Management, Fish and Wildlife Service, and National Park
Service, Department of Justice's Community Policy, Immigration
and Naturalization Service, U.S. Marshal's Service and Tax
Division, an unidentified grant to the Department of Labor,
ONDCP's ``gift fund'' (zeroed out in fiscal 1996), the Small
Business Administration, the Agency for International
Development (AID), the Department of Treasury's Internal
Revenue Service, and United States Secret Service, the U.S.
Information Agency (USIA), and a range of other disparate
Federal initiatives.\58\
---------------------------------------------------------------------------
\58\ See National Drug Control Strategy, February 1995, the White
House, pp. 120-121.
---------------------------------------------------------------------------
A dual concern raised by some members of the subcommittee
was how these funds are actually spent and who coordinates the
spending. The latter concern boiled down to accountability,
avoiding duplication, and assuring interagency coordination.
Seeking to justify the administration's acknowledged shift
to treatment of hardcore drug users and the President's request
for ``$2.8 billion for treatment'' in fiscal 1996, Dr. Brown
noted that ``chronic hardcore drug users comprise 20 percent of
the drug user population but consume two-thirds of the drugs .
. .'' From this, he argued that ``past strategy [sic] ignore
this inextricable part of the drug problem.''
In fact, while the 1995 National Drug Control Strategy does
increase the proportion of overall spending devoted to
treatment, past strategies have included--and have steadily
increased--funding for treatment. In fact, Federal treatment
funding has increased every year from 1982 to 1995.\59\
---------------------------------------------------------------------------
\59\ Fiscal year 1992, Federal treatment spending stood at $505.6
million. Fiscal year 1995, Federal treatment spending stood at $2.65
billion. National Drug Control Strategy: Budget Summary, Office of
National Drug Control Policy, February 1995, pp. 238.
---------------------------------------------------------------------------
Dr. Brown acknowledged that ``drug use among adolescents is
rising,'' but attributed the trend to the final year of the
Bush administration. Dr. Brown offered the view that Safe and
Drug Free Schools moneys are ``the cornerstone of this nation's
efforts to educate our children about drug use'' and are
currently disbursed to ``94 percent of the school districts in
this country.''
Dr. Brown confirmed a shift in trafficking patterns toward
greater use of container cargo and noted that ``over 70 percent
of the cocaine entering our country crosses the border with
Mexico,'' but was unable to explain reduced emphasis in the
current strategy on National Guard Container Search Workdays
along the United States-Mexican border. Specifically, Dr. Brown
had no answer for the question why National Guard Container
Search Workdays fell from 227,827 in 1994 to a 1996 projection
of 209,000, as described in ONDCP's own 1995 Strategy at page
41.
Generally, Dr. Brown condemned ``Congress'' for having
``failed to fulfill [the President's] budget request.''
However, Dr. Brown made no attempt to provide specific answers
to Members' questions concerning (1) the President's own
proposed deep cuts in interdiction and international program
funding; (2) accountability; (3) shifting interdiction
resources to source countries, (4) a reduction of Customs
agents at the Southwest border; or (5) the shift in resources
from prevention of casual use (80 percent of total users) by
juveniles to treatment for older, chronic, hardcore users (20
percent of total).
Subcommittee Chairman Zeliff introduced an unclassified
piece of correspondence dated December 1994 between the
Interdiction Coordinator, Admiral Kramek, and the Director of
ONDCP, Dr. Brown, which stated that a consensus of agency heads
believed ``we need to restore assets to the interdiction force
structure . . .'' and ``we must return to the 1992-1993 levels
of effort.''
The Kramek letter also indicated that the source country
programs were not yet ``producing necessary results.''
Addressing drugs as a national security threat, the Kramek
letter specifically asked for a meeting with the President. The
letter read, ``I believe it appropriate that we meet with the
President and National Security Advisor as soon as possible to
brief them on the results of our conference and discuss the
current state of implementation and national strategy . . . Of
key importance to this meeting is the determination of priority
of counting narcotics trafficking as a threat to national
security of the United States as evaluated against other
threats to our security that compete for resources.''
Subcommittee Chairman Zeliff asked Dr. Brown if he had
followed the Interdiction Coordinator's and agency heads'
consensus that drug interdiction resources be returned to the
``1992-1993 levels.'' Dr. Brown indicated that he held a view
different from that of the Interdiction Coordinator and had,
apparently, not followed that recommendation. Similarly,
subcommittee Chairman Zeliff asked Dr. Brown if he had taken
the Interdiction Coordinator's request to the President or
National Security Advisor. Dr. Brown indicated that he had not,
and apparently also had not set up the requested meetings
between Kramek and the President, or between Kramek and the
National Security Advisor to ``determin[e] [the] priority of
counting narcotics trafficking as a threat to national security
. . .''
Admiral Paul Yost, former 18th Commandant of the U.S. Coast
Guard and presently president of the non-partisan James Madison
Fellowship Foundation, testified on the topics of interdiction
and interagency coordination. He testified that the Nation
witnessed a ``major build-up in drug interdiction in the at-sea
war on drugs from 1984 through 1990,'' with the result that
this interdiction effort ``successfully interrupted the flow of
bulk marijuana by sea and cocaine by air over the water routes
[of the Caribbean].''
In Admiral Yost's view, ``strong interdiction and law
enforcement were providing a climate [from 1984 through 1990]
that made it clear to the [drug] trafficker that `this is
wrong, and your chances of being intercepted are very high.' ''
Since that time, he testified, there has been a ``tragic
dismantling'' of the at-sea interdiction effort, so that today
``there are several orders of magnitude less effort spent on
drug interdiction.''
Calling the resultant increase in drug availability and
drug use predictable, Yost testified that the Nation ``will
never stop drug use without a solid interdiction foundation for
. . . education and treatment programs.''
Accordingly, Admiral Yost favored a return to
``emphasiz[ing] the interdiction prong of the drug strategy''
and increased budget authority for the Coast Guard.
Finally, Admiral Yost discussed the need for better
interagency coordination. He supports greater ``authority'' for
the White House Drug Czar and President's Interdiction
Coordinator. Without the ability, specifically, to ``direct
cabinet-level officers regarding budget allocation, personnel
allocation, or forced deployments'' on this issue, both
positions are ``largely ceremonial,'' he said.
Thomas Hedrick, Jr., vice chairman of the Partnership for a
Drug-Free America, testified that prevention and interdiction
advocates must begin to work together, and that ``preventing
drug use by young people'' is essential ``if we are to have
prayer of building safe and healthy families and communities.''
As a prevention expert with 10 years of experience, Mr.
Hedrick testified that, ``quite frankly, I am frightened
because after nearly a decade of progress, drug use is rapidly
increasing. The issue has `overarching importance.' `Crisis' is
not an overly dramatic or inappropriate description,
particularly when you consider that drug use among our youngest
kids, 13 and 14, has more than doubled in the last three
years,'' observed Mr. Hedrick.
Mr. Hedrick favors increased parental involvement in
setting a ``clear expectation of no use,'' better in-school
education, and reduced exposure of children to ``pro-drug
information,'' especially exposure to the ``recent re-
glamorization of drug use in some of the media.''
Significantly, Mr. Hedrick reported that the Partnership
has received--since inception--``over $2 billion in time and
space'' from the media. In 1990 and 1991, this produced roughly
one antidrug message per household per day.
However, Mr. Hedrick testified that ``support for these
messages has declined 20 percent in the past three years,''
apparently ``because the media is not as convinced that the
drug issue is as important as it was.''
Media coverage is also down, from 600 antidrug stories on
the three major networks in 1989 to 65 last year, which Mr.
Hedrick said is tantamount to ``zero'' from a communications
point of view.
Mr. Hedrick expressed the view that ``Federal support and
Federal leadership in making drugs a critical national priority
is essential, if we are to help convince the media that this is
an important issue.'' National leaders must also tell those
community leaders involved in this fight that what they are
doing is important.
Mr. Hedrick's 14-year-old son, Todd, testified briefly that
his generation is surrounded by drugs. He said that ``parents
need a serious wake-up call'' and that all kids now know where
to get drugs in their schools. ``This entire country needs a
huge turn-around in how it deals with drugs,'' since ``the fact
that drugs aren't a prominent issue anymore tells kids that
adults don't care about it.'' The younger Hedrick said,
``that's suicide to my generation . . .'' He proposed starting
prevention earlier, in elementary school, having parents talk
more with their kids, increasing media attention to the
problem, and stopping the legalization movement.
Bridget Ryan, former program director for the Charles
Stuart Mott Foundation and presently executive director of the
BEST Foundation for a Drug-Free Tomorrow, testified that a
recent RAND study advocated drug prevention as ``the first
priority'' in curbing drug abuse. Ms. Ryan distinguished
between ``validated'' and ``unvalidated'' drug prevention
programs, and urged that the former be adequately funded.
The best ``validated'' prevention programs build, Ms. Ryan
testified, on three propositions: first, ``target[ing]
substances used first and most widely by young people;''
second, ``helping students develop the motivation to resist
using drugs;'' and third, teaching effectively.
Ms. Ryan described a recent RAND study on the effectiveness
of prevention as one ``conducted with methodological
exactitude'' and ``one of the most rigorous ever undertaken.''
Ms. Ryan testified that the RAND prevention study disproves
three common criticisms of prevention--``first, that it works
only for middle class, largely white, suburban situations;
second, that the programs work only for kids who need them
least; and finally, that prevention programs prevent only
trivial levels of use.''
RAND found that a properly designed prevention program,
such as Project Alert, ``works well in urban, suburban, and
rural areas, in middle- and low-income communities, and in
schools with high and low minority populations.'' Project Alert
is one of the prevention programs made available to ``schools
across America'' by the BEST Foundation.
James Copple, national director of the Community Anti-Drug
Coalitions of America (CADCA), testified that CADCA is a non-
partisan group with approximately 2,500 community coalition
members in every State and two U.S. territories. He noted that
CADCA was founded in 1992 by the President's Drug Advisory
Council, a creation of President Bush, and is privately funded.
Expressing support for the Safe and Drug Free Schools
Program, Mr. Copple retold a moving story of a young child that
``made her stand'' against drugs, while forced to live in a
crack house. During a law enforcement raid of the house, this
child was found in her room, surrounded by antidrug posters and
``a workbook on drug refusal skills;'' the posters and workbook
were funded by Safe and Drug Free Schools moneys.
In closing, Mr. Copple cited Peter Drucker's recommendation
that budget cutting be conducted without imperiling the Federal
Government's ability to conduct some ``national crusades.'' Mr.
Copple noted that Drucker identified the war on drugs as one
such crusade, and Mr. Copple urged the Congress to ``embrace a
national strategy that is comprehensive, balanced and directs
the majority of the resources to local communities to address
local problems.''
Charles Robert ``Bobby'' Heard III, director of program
services at the Texans' War on Drugs, testified that ``parents,
community leaders, and elected officials don't realize how easy
it is for kids to get involved in drugs.'' He credited the
precipitous drop in drug use ``between 1979 and 1992'' to
substance abuse prevention, and noted that ``no other social
issue can claim that kind of success.''
Mr. Heard sees the primary solution to drug abuse in demand
reduction. He testified that ``prisons alone will not break the
cycle,'' and ``we can't treat our way out of this problem.'' He
also noted that prevention is not a one-time mission, but an
ongoing duty that must continue ``from generation to
generation.''
The subcommittee continued it's investigation into the
Natio