[Senate Report 110-524]
[From the U.S. Government Publishing Office]



110th Congress 
 2d Session                      SENATE                          Report
                                                                110-524
_______________________________________________________________________

                     ACTIVITIES OF THE COMMITTEE ON

                         HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS


                               __________

                              R E P O R T

                                 of the

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                                and its

                             SUBCOMMITTEES

                                for the

                       ONE HUNDRED NINTH CONGRESS


           [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                November 19, 2008--Ordered to be printed
                                 ------
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk
  COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS DURING THE 
                             109TH CONGRESS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

                                 ------                                

                  SUBCOMMITTEES OF THE 109TH CONGRESS
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND INTERNATIONAL 
                                SECURITY

                     TOM COBURN, Oklahoma, Chairman
TED STEVENS, Alaska                  THOMAS R. CARPER, Delaware
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
LINCOLN D. CHAFEE, Rhode Island      DANIEL AKAKA, Hawaii
ROBERT F. BENNETT, Utah              MARK DAYTON, Minnesota
PETE V. DOMENICI, New Mexico         FRANK LAUTENBERG, New Jersey
JOHN W. WARNER, Virginia

                                 ------                                

  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                          DISTRICT OF COLUMBIA

                  GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota              CARL LEVIN, Michigan
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                   NORM COLEMAN, Minnesota, Chairman
TED STEVENS, Alaska                  CARL LEVIN, Michigan
TOM COBURN, Oklahoma                 DANIEL K. AKAKA, Hawaii
LINCOLN D. CHAFEE, Rhode Island      THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              MARK DAYTON, Minnesota
PETE V. DOMENICI, New Mexico         FRANK LAUTENBERG, New Jersey
JOHN W. WARNER, Virginia             MARK PRYOR, Arkansas







                                CONTENTS

                                 ------                                
                                                                   Page
  I. Highlights of Activities.........................................1
       Emergency-Management Reform...............................     1
       Extended Jobless Benefits for Hurricane Victims...........     5
       Port Security.............................................     5
       Chemical Security.........................................     7
       Postal Service Reform.....................................     8
       Funding Transparency......................................     8
       Iraq Reconstruction.......................................     9
 II. Committee Jurisdiction..........................................10
III. Bills and Resolutions Referred and Considered...................13
 IV. Hearings........................................................13
  V. Reports, Prints, and GAO Reports................................17
 VI. Official Communications.........................................25
VII. Legislative Actions.............................................25
       Measures Enacted Into Law.................................    26
       Postal Naming Bills.......................................    30
VIII.Presidential Nominations........................................37

 IX. Activities of the Subcommittees.................................42

Federal Financial Management, Government Information, and International 
                         Security Subcommittee

  I. Hearings........................................................42
 II. Legislation.....................................................66
III. GAO Reports.....................................................67

  Oversight of Government Management, the Federal Workforce, and the 
                   District of Columbia Subcommittee

  I. Hearings........................................................68
 II. Legislation.....................................................85
       Measures Enacted Into Law.................................    85
       Measures Favorably Reported by the Subcommittee and Passed 
        by the Senate............................................    86
       Measures Referred to the Subcommittee on which Hearings 
        were held or other Legislative Action was taken..........    86
       Measures which did not advance beyond referral to 
        Subcommittee.............................................    88
III. GAO Reports.....................................................93

                Permanent Subcommittee on Investigations

  I. Historical Background...........................................95
       A. Subcommittee Jurisdiction..............................    95
       B. Past Investigations....................................    96
 II. Subcommittee Hearings during the 109th Congress................101
III. Legislation Activities during the 109th Congress...............120
 IV. Reports and Prints.............................................122
  V. Requested and sponsored GAO Reports............................142
110th Congress
                                 SENATE
                                                                 Report
 2d Session                                                     110-524

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



 
                ACTIVITIES OF THE COMMITTEE ON HOMELAND
                   SECURITY AND GOVERNMENTAL AFFAIRS
                       DURING THE 109TH CONGRESS

                                _______
                                

               November 19, 2008.--Ordered to be printed

                                _______
                                

Mr. Lieberman, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                                 REPORT

    This report reviews the legislative and oversight 
activities of the Committee on Homeland Security and 
Governmental Affairs and its Subcommittees during the 109th 
Congress. These activities were conducted pursuant to the 
Legislative Reorganization Act of 1946, as amended; by Rule 
XXV(k) of the Standing Rules of the Senate; and by additional 
authorizing resolutions of the Senate. See Section II, 
``Committee Jurisdiction,'' for details.
    Senator Collins was Chairman of the Committee throughout 
the 109th Congress; Senator Lieberman was the Ranking Member.
    Major activities of the Committee during the 109th Congress 
included investigations, oversight, and legislation involving 
emergency preparedness and response, security improvements for 
ports and chemical facilities, Postal Service reform, the 
reconstruction effort in Iraq, and accessibility of legislative 
information. Discussion of these major activities appears in 
Section I, below; additional information on these and other 
measures appears in Section VII, ``Legislative Actions.''
    Extensive information about the Committee's history, 
hearings, legislation, documents, Subcommittees, and other 
matters is available at the Web site, http://hsgac.senate.gov/.

                      I. Highlights of Activities


                      EMERGENCY-MANAGEMENT REFORM

    Hurricane Katrina's assault on the Gulf Coast in late 
August 2005 revealed serious defects at all levels of 
government in plans and systems to prepare for and respond to 
major disasters. The Hurricane Katrina disaster led to one of 
the Committee's biggest investigations and to sweeping reform 
legislation.
    Having emerged as a tropical depression southeast of the 
Bahamas on August 23, 2005, the storm developed sustained 
speeds of 74 miles per hour on August 25, establishing it as a 
Category 1 hurricane on the standard, five-step Saffir-Simpson 
Scale used to describe hurricane severity. It was assigned the 
name ``Katrina.''
    The hurricane crossed Florida, rose to Category 2 strength 
in the Gulf of Mexico on August 26, and was forecast to strike 
the coast as an extremely powerful Category 4 storm. On 
Saturday, August 27, the National Hurricane Center refined its 
forecast, saying Hurricane Katrina would strike New Orleans as 
a Category 3 storm on Monday, 29, 2005. That Saturday saw the 
start of 24-hour operations at Federal Emergency Management 
Agency (FEMA) headquarters in Washington, the triggering of 
Louisiana's evacuation plan, and a presidential declaration of 
a Federal state of emergency in Louisiana.
    On Sunday, August 28, states of emergency were declared in 
Mississippi and Alabama. The National Hurricane Center revised 
its analysis again, warning that Hurricane Katrina could reach 
top-of-the-scale Category 5 status, with sustained winds of 
about 160 miles per hour and a storm surge of wind-driven 
seawater 18 to 22 feet above normal high tides. New Orleans--a 
city that stood, on average, six feet below sea level and was 
ringed by levees and flood walls said to be adequate for a 
Category 3 storm--remained the projected primary target.
    Hurricane Katrina made landfall as Category 3 storm on the 
Louisiana coast Monday morning, August 29, then moved into 
Mississippi before drifting north and dissipating over the next 
few days. It caused more than 1,500 deaths, displaced hundreds 
of thousands of people in a 90,000-square-mile area, and 
inflicted as much as $150 billion in economic damages. Katrina 
left the Mississippi coast in ruins, and overtopped or broke 
through the engineering defenses of New Orleans, flooding much 
of the city. The breach left thousands of people sweltering in 
an ill-prepared refuge, the New Orleans Superdome. Others died 
as filthy waters rose in houses and nursing homes, or as 
blacked-out hospitals ran out of essential medications and 
supplies. Some 300,000 homes were destroyed or made 
uninhabitable. Additional but less intense damage followed the 
next week as Hurricane Rita dealt the devastated Gulf Coast a 
fresh blow.
    The Hurricane Katrina catastrophe saw many acts of heroism 
and some outstanding organizational responses by the U.S. Coast 
Guard and the Louisiana Department of Wildlife and Fisheries, 
to name two conspicuous examples. In general, however, 
government officials, emergency-management experts, and the 
general public could agree that the preparations and response 
to Hurricane Katrina at all levels of government revealed a 
host of systemic and operational failures in evacuations, 
communications, situational awareness, coordination of effort, 
medical assistance, logistics, law enforcement, military 
operations, medical assistance, sheltering, housing, family 
reunification, and other areas.
    Because much of the dissatisfaction focused on FEMA and on 
aspects of the National Response Plan--both responsibilities of 
the Department of Homeland Security, overseen by the 
Committee--and because many of the problems revealed by 
Hurricane Katrina would occur in response to a man-made 
catastrophe as well, Senators Collins and Lieberman determined 
that the episode required a full investigation by the Committee 
and a collaborative, bipartisan report on its findings and 
recommendations.
    The Senators announced the planned investigation on 
September 2, 2005, even as disaster-recovery work continued on 
the Gulf Coast. Noting in a joint statement the Committee's 
role as oversight body for FEMA, they pledged assistance for 
the agency's response efforts along the Gulf Coast, but added, 
``It is also our responsibility to investigate the lack of 
preparedness and inadequate response to this terrible storm. 
While it is too early to reach conclusions on the response of 
government to this catastrophe, it is increasingly clear that 
serious shortcomings in preparedness and response have hampered 
relief efforts at a critical time.'' Committee staff of both 
parties, reinforced by duration-of-project new hires, 
cooperated to conduct interviews, obtain and examine documents, 
and carry out research to sharpen lines of inquiry and prepare 
for hearings. The investigation entailed detailed inquiries 
into topics ranging from levee engineering and radio networks, 
to command systems and the constitutional issues of control and 
roles of military units. Between September 2005 and April 2006, 
the Committee interviewed or took testimony from more than 400 
people, conducted 22 public hearings, and examined more than 
838,000 pages of documents.
    The White House and a committee of the U.S. House of 
Representatives conducted their own probes of the Hurricane 
Katrina disaster, but the Committee's investigation was the 
only one carried out and reported in bipartisan fashion. 
Following adoption in a business meeting on May 2, 2006, the 
Committee report was published as Senate Special Report (S. 
Rept. 109-322), ``Hurricane Katrina: A Nation Still 
Unprepared'' (U.S. Government Printing Office, 2006; ISBN 0-16-
076749-0). (The special report is not included in the 109th 
binding as it was printed in an 8\1/2\"x11" format.) The 
illustrated, 732-page book caps its narrative and analysis with 
24 general conclusions, 186 specific findings, and 88 
recommendations for action to improve disaster preparation and 
response by governments, non-governmental organizations, the 
private sector, and individual citizens. Ten sections of 
additional views from Committee Members appear as appendices. 
Printed copies of the report are available for purchase from 
the GPO, and are on deposit at many libraries.
    Copies are posted for reading or free download at the Web 
sites of the Committee (http://hsgac.senate.gov) and the GPO 
(http://www.gpoaccess.gov/serialset/creports/
katrinanation.html), which has individual sections as PDF files 
and a compressed file holding the entire report.
    The report's ``Overview'' section begins with a sweeping 
conclusion:

   1. Four overarching factors contributed to the failures of 
Hurricane Katrina:

       (i) long-term warnings went unheeded and government 
officials neglected their duties to prepare for a forewarned 
catastrophe;
       (ii) government officials took insufficient actions or 
made poor decisions in the days immediately before and after 
landfall;
       (iii) systems on which officials relied to support their 
response efforts failed; and
       (iv) government officials at all levels failed to 
provide effective leadership.

These individual failures, moreover, occurred against a 
backdrop of failure, over time, to develop the capacity for a 
coordinated, national response to a truly catastrophic event, 
whether caused by nature or man-made.
    Key recommendations from the Committee's report made their 
way into law as the Post-Katrina Emergency Management Reform 
Act of 2006, added as an amendment to become Title VI of H.R. 
5441, the Department of Homeland Security Appropriations Act 
for fiscal year 2007 (Public Law 109-295, signed October 4, 
2006). The original Senate bill, S. 3721, had been introduced 
by Senator Collins on July 25, 2006, with Senators Lieberman 
and Salazar as cosponsors, and was reported by the Committee on 
August 3, 2006.
    The first of the many provisions of the Title VI: 
``National Emergency Management'' language in the Act amended 
the Homeland Security Act of 2002 to provide that FEMA's 
primary mission is to reduce loss of life and property in 
disasters by taking the lead and supporting an all-hazards, 
risk-based, comprehensive emergency-management system of 
preparedness, protection, response, recovery, and mitigation. 
The language affirmed FEMA's place within the Department of 
Homeland Security and protected it from departmental 
reorganizations. The FEMA Administrator was officially named as 
emergency-management advisor to the President, the Secretary of 
Homeland Security, and the Homeland Security Council. The 
President was authorized to designate the FEMA Administrator to 
serve as a member of the Cabinet in the event of a disaster.
    To improve FEMA's familiarity and coordination with the 
different areas it serves, the Act required FEMA to establish 
10 regional offices plus area offices for the Pacific, the 
Caribbean, and Alaska. Each regional administrator was directed 
to establish a multi-agency strike team to ensure rapid 
response to disasters.
    The Act also provided for a National Integration Center, a 
National Operations Center, and a Chief Medical Officer within 
FEMA; required greater clarity in the National Response Plan; 
made new provisions for evacuation plans and exercises; 
directed FEMA to appoint a Disability Coordinator; required new 
human-capital measures by FEMA; established an Urban Search and 
Rescue Response System in FEMA and reestablished the 
Metropolitan Medical Response Program; required new systems for 
prepositioning and managing commodities; authorized FEMA to 
develop national planning scenarios reflecting all-hazards, 
risk-based analysis as guides for preparation, standards, and 
training; established an Office of Emergency Communications in 
DHS to promote interoperable emergency-communications systems; 
amended the Stafford Act, enabling the President to authorize 
precautionary evacuations in the face of a major disaster and 
to provide accelerated Federal support without a specific 
request; directed FEMA to develop a national disaster-recovery 
strategy; authorized the President to appoint a single Federal 
coordinating officer and deputies for the entire affected area 
when a disaster extends across State borders; made provisions 
to assist child location and family reunification; required 
FEMA to take into account population groups with limited 
English proficiency; set requirements to reduce the risk of 
waste, fraud, and abuse in disaster contracting and assistance; 
authorized appropriations for purposes of the Act; and made 
numerous other provisions to reform and improve the national 
emergency-management system.
    The Hurricane Katrina investigation took its place 
alongside the campaign-finance reform and intelligence reform 
investigations in earlier Congresses as one of the most intense 
and extensive undertakings in the Committee's history. Like 
those other efforts, it culminated in landmark legislation.

            EXTENDED JOBLESS BENEFITS FOR HURRICANE VICTIMS

    Hurricanes Katrina and Rita dealt a catastrophic blow to 
the economic life of the Gulf Coast. In Louisiana, for example, 
the unemployment rate nearly doubled after the hurricanes, 
reaching 12.1 percent in September 2005--worse than New York 
City's unemployment rate in the months following the September 
11, 2001, terrorist attacks. The widespread destruction of Gulf 
Coast homes, businesses, and public infrastructure made it 
clear that for many thousands of people, the standard 26 weeks' 
duration of unemployment benefits would be inadequate.
    On September 27, 2005, Senator Collins introduced S. 1777, 
the Katrina Emergency Assistance Act to extend the duration of 
benefits by 50 percent. The bill directed the President to make 
unemployment assistance available for 39 weeks to individuals 
eligible for such assistance under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act as a result of a 
disaster declaration made for Hurricanes Katrina or Rita on or 
after August 29, 2005, for 39 weeks after the date of that 
declaration.
    The measure passed the Senate by unanimous consent on 
February 15, 2006, and passed the House by voice vote on March 
2, 2006. The President signed the Act into law 4 days later--in 
time to provide continued benefits for unemployed victims of 
the hurricanes. (Public Law 109-176)

                             PORT SECURITY

    The National Commission on Terrorist Attacks Upon the 
United States (the ``9/11 Commission''), created by Congress 
after the September 11, 2001, mass murders with hijacked 
aircraft, warned in its 2004 official report: ``While 
commercial aviation remains a possible target, terrorists may 
turn their attention to other modes. Opportunities to do harm 
are as great, or greater, in maritime or surface 
transportation. Initiatives to secure shipping containers have 
just begun. Surface transportation systems such as railroads 
and mass transit remain hard to protect because they are so 
accessible and extensive.''
    Shipping containers--the large, lockable metal cargo boxes 
that can be stacked on ships or carried on trucks and railroad 
cars--emerged as a special security concern because more than 
11 million enter U.S. ports every year, because they can then 
be dispersed across the country, and because tampering or false 
documentation could turn them into transport devices for 
terrorists or weapons--or into bombs. Addressing such concerns 
would require new and improved security measures not only at 
U.S. ports but at foreign ports as well: A container rigged for 
a biohazard or radioactive ``dirty bomb'' attack in a U.S. port 
needs to be detected before it reaches its destination. Apart 
from local consequences, a container-borne attack on a U.S. 
port and the resulting security clamp-down could have 
devastating economic repercussions. America's 361 seaports move 
more than 95 percent of the country's overseas trade, including 
essential raw materials and just-in-time components for 
manufacturing operations.
    The 9/11 Commission's warnings on cargo security 
underscored the results of a 2003 Committee hearing that 
focused on shipping containers as a possible medium of 
terrorism. Four subsequent hearings by the Committee or its 
Permanent Subcommittee on Investigations, chaired by Senator 
Coleman, further explored concerns about cargo and port 
security.
    The government had taken several steps toward better cargo 
and port security following the September 11, 2001 attacks, 
including requiring improved notice of ship arrivals, a 
Container Security Initiative, and the Customs-Trade 
Partnership Against Terrorism (C-TPAT) program that offered 
foreign shippers expedited processing in return for enhanced 
cargo security. The Committee heard evidence, however, that the 
various initiatives were proceeding unevenly and that they 
lacked the guiding discipline of a comprehensive and strategic 
security plan.
    On March 27, 2006, Senator Collins introduced the GreenLane 
Maritime Cargo Security Act--S. 2459, in the Senate as a 
companion bill to a House measure, H.R. 4954, backed by 
Representatives Lungren and Harman, both of California. The 
Senate measure was originally cosponsored by Senators Coleman, 
Lieberman, and Murray.
    The Committee conducted a hearing, ``The Future of Port 
Security: The GreenLane Maritime Cargo Security Act,'' on April 
5, 2006. Witnesses included Representatives Harman and Lungren, 
the Deputy Secretary of Homeland Security, and several experts 
on port operations.
    The House version of the bill passed on a 421-2 vote on May 
4, 2006. The Committee reported an amended version on May, 5, 
2006, and the Senate adopted the measure by a 98-0 vote on 
September 14, 2006. After a Conference Report was accepted by 
both the House and the Senate on September 30, 2006, the Act 
was presented to the President, who signed it into law on 
October 13, 2006 (Public Law 109-347).
    The new law, now known as the SAFE (``Security and 
Accountability for Every'') Port Act of 2006, is a wide-ranging 
measure. Major provisions include: Amending the Maritime 
Transportation Security Act of 2002 (MTSA) to require area 
maritime transportation security plans to include a salvage 
response plan to identify equipment capable of restoring 
operational trade capacity and to ensure that waterways are 
cleared as quickly as possible after a security incident; 
requiring plans under MTSA to regulate access by persons 
transporting intermodal containers in or out of a facility; 
requiring the Secretary of Homeland Security to verify the 
effectiveness of vessel and facility security plans; 
strengthening requirements for transportation security cards; 
requiring development of a long-range vessel tracking system; 
requiring interagency operational centers for port security at 
all high-risk priority ports; requiring use of a risk-
assessment tool with standardized criteria for updating area 
maritime security plans and applying for port-security grants; 
requiring live or full-scale exercises to test and evaluate 
Federal, State, and local capabilities to respond to and 
recover from threats at commercial seaports at least every 2 
years; requiring a radiation-scanning program for all 
containers entering high-volume U.S. ports; requiring a 
strategic plan to enhance the security of the international 
supply chain; requiring DHS to develop and update protocols for 
resuming trade after a transportation security incident; 
requiring rules for data collection to improve high-risk 
targeting of U.S.-bound cargo prior to loading at foreign 
seaports; requiring new standards for container security; 
authorizing U.S. Customs and Border Protection to establish the 
Customs-Trade Partnership Against Terrorism (C-TPAT), as a 
voluntary government-private sector program to strengthen and 
improve the overall security of the international supply chain 
and U.S. border security and to facilitate the movement of 
secure cargo; requiring screening of all incoming cargo 
containers and search or scanning for those identified as high-
risk; establishing an Office of Cargo Security Policy within 
DHS; establishing a Domestic Nuclear Detection Office within 
DHS; and authorizing funds for these and other purposes in the 
Act.

                           CHEMICAL SECURITY

    During the 109th Congress, the Committee devoted 
considerable time and effort to examining America's 
vulnerability to attacks on or criminal use of materials from 
facilities that produce, store, or use potentially dangerous 
chemicals.
    The Committee held four hearings on anti-terrorism issues 
relating to chemical facilities in the spring and summer of 
2005, and concluded that increased Federal safeguards were 
required. On December 19, 2005, Senator Collins introduced S. 
2145, the Chemical Facility Anti-Terrorism Act of 2006, with 
Senators Lieberman, Carper, Coleman, and Levin as original 
cosponsors. The Committee reported the bill to the Senate in 
June 2006, and issued S. Rept. 109-332 on the measure on 
September 11, 2006.
    The bill took an integrated approach to security, 
comprehensively addressing vulnerabilities, threats, and 
consequences of a terrorist attack on a chemical facility. It 
gave the Department of Homeland Security discretion to regulate 
at-risk chemical facilities after consideration of the 
potential extent and likelihood of death or injury, 
environmental harm, and economic loss that could result from a 
terrorist attack on the facility. All covered facilities must 
complete or update vulnerability assessments, security plans, 
and emergency response plans, and must submit these assessments 
and plans to DHS for approval. If DHS determines that a covered 
facility has not complied with the regulations or with an order 
issued under the bill, DHS may enforce those regulations and 
orders through a variety of mechanisms, including civil and 
criminal penalties, and issuing an order to a facility to cease 
operations.
    S. 2145 was not enacted by the Senate, but it and related 
House measures were instrumental in laying the groundwork for a 
Conference Report mandate in the 2006 DHS Appropriations Bill, 
H.R. 2360, directing the Secretary of DHS to ``submit a report 
. . . on the resources needed to implement mandatory security 
requirements for the Nation's chemical sector and to create a 
system for auditing and ensuring compliance with the security 
standards.''

                         POSTAL SERVICE REFORM

    The Committee's work in the 109th Congress helped produce 
the first modernization of the U.S. Postal Service in more than 
30 years. As a free-standing, although federally assisted 
enterprise, the USPS faced serious challenges from the rise of 
electronic mail, competing delivery services, rising costs and 
a nationwide service mandate, and a pattern of repeated and 
unpredictable rate increases.
    On March 17, 2005, Senator Collins introduced S. 662, the 
Postal Accountability and Enhancement Act, with 26 bipartisan 
cosponsors including Senators Carper and Voinovich as original 
cosponsors. The Committee reported the bill, amended, on July 
14, 2005.
    Among other provisions, the bill directed the Postal 
Regulatory Commission, created by the bill, to establish a 
modern ratemaking system with an annual price-change limit, 
cost-based discounts for mailers' presorting or barcoding work, 
and notice and public comment on USPS proposals for rate 
changes; directed the PRC to avoid cross-subsidizing 
competitive services from market-dominant products; required 
annual reports from the USPS, audited by its Inspector General; 
directed the USPS to establish and update service standards for 
market-dominant products to enhance the quality and value of 
postal services and preserve access to postal services in all 
communities; revised qualification requirements for members of 
the USPS Board of Governors; and provided for changes to 
strengthen USPS retirement-benefits finances.
    The key provisions of the Committee-reported bill were 
reflected in H.R. 6407, also titled the Postal Accountability 
and Enhancement Act, which passed the House by voice vote and 
the Senate by unanimous consent, and became Public Law 109-435 
on December 20, 2006.

                          FUNDING TRANSPARENCY

    The approach of the 2007 fiscal year saw annual Federal 
expenditures climbing toward the $3 trillion mark, but with the 
details largely hidden from public view. ``The public's ability 
to track how their tax dollars are used remains a monumental 
task,'' the Committee declared in S. Rept. 109-329. ``There is 
currently no comprehensive, publicly-available source of 
detailed, accurate, complete and timely information on Federal 
Government spending. Even within the Federal Government, 
information on all spending decisions is not compiled in one 
place.''
    A bipartisan effort to change that situation was launched 
on April 6, 2006, when Senator Coburn introduced S. 2590, the 
Federal Funding Accountability and Transparency Act, ``A bill 
to require full disclosure of all entities and organizations 
receiving Federal funds.'' The measure drew 47 cosponsors, 
including the Chairman and Ranking Member of the Committee on 
Homeland Security and Governmental Affairs, to which it was 
referred.
    An amended version of the bill won unanimous approval from 
the Committee and was reported on August 2, 2006. In September, 
the full Senate passed the bill by unanimous consent and the 
House passed it on a voice vote. Signed by the President on 
September 26, 2006, the Act became Public Law 109-282.
    The Committee's report (S. Rept. 109-329) on the measure 
explained the rationale:
    Without a rigorous and transparent accountability system in 
place to provide visibility into who is receiving Federal funds 
through contracts and grants, and for what purpose, there is a 
greater potential for fraud and abuse. One goal of S. 2590 is 
to mitigate the potential for fraud and abuse by allowing 
citizens to see how their tax dollars are spent. Greater 
transparency allows taxpayers to judge whether government funds 
are being used for purposes they consider valuable, or whether 
spending in certain areas is excessive or wasteful. It also 
allows the public to better understand, assess, and appreciate 
the scope and value of Federal investments in their communities 
and to more fully participate in shaping priorities for Federal 
spending. The Web site will also allow State governments to 
better evaluate what funds flow to their States, what needs are 
or are not being met through Federal funding, and may foster 
greater coordination between the Federal Government and States, 
and between States and their subawardees.
    The law directs the Office of Management and Budget to 
establish a free, searchable, public Web site by January 1, 
2008, to document the amount, transaction type, name and 
location of each recipient of Federal financial assistance and 
expenditures. Individual transactions below $25,000 and credit-
card transactions before October 1, 2008, are excluded, as is 
classified information.
    By January 1, 2009, the law also requires the single Web 
site to provide information on Federal subgrants and 
subcontracts. Entities whose gross income did not exceed 
$300,000 in the previous tax year are exempted from subawards 
reporting until the Director of OMB determines that the 
reporting would not be an undue burden; the Director can also 
extend the deadline for the start of subaward reporting up to 
18 months. Annual reports to Congress on Web site 
implementation are required.
    S. 2590 could be the impetus for further steps toward 
transparency. Senators Lautenberg and Coburn said in their 
``Additional Views'' appendix to the Committee's report, 
``Transparency in government decision-making should not be 
limited simply to spending; it should also be extended to the 
decisions Congress makes about the tax code. The tax code is 
currently over 60,000 pages long, and it is filled with obscure 
and little-known tax breaks. Because we believe that 
transparency is one of the best tools we have to curb wasteful 
behavior, we look forward to working together and with the 
Committee to develop bipartisan legislation like S. 2590 that 
will bring increased transparency to the tax code.''

                          IRAQ RECONSTRUCTION

    Committee oversight hearings on Federal contracting 
relating to the reconstruction effort following the 2003 U.S. 
and Allied overthrow of Saddam Hussein's Baathist regime in 
Iraq had confirmed the valuable services of the Special 
Inspector General for Iraq Reconstruction (SIGIR)--a post 
created through bipartisan cooperation led by Senators Collins 
and Feingold.
    SIGIR audits and reports had identified nearly $2 billion 
of waste, fraud, abuse, and other problems among more than $30 
billion of U.S. contracts for goods and services in Iraq. 
Issues ranged from simple disappearance of funds to delays and 
cost overruns at a childrens' hospital and a $94 million 
Bagdadh police-barracks project that was structurally unsafe 
and contaminated by defective plumbing work.
    Concerned that the SIGIR's authority was set to expire on 
October 1, 2007, while the United States would still be heavily 
involved in Iraq, Senators Collins and Feingold developed the 
Iraq Reconstruction Accountability Act, S. 4046. The bill 
removed the arbitrary sunset date for the SIGIR and provided 
that the SIGIR would operate until 10 months after 80 percent 
of Iraq reconstruction funds were expended, and that the SIGIR 
would issue a final, forensic audit of the reconstruction 
program.
    The bill, introduced by Senator Collins with cosponsorship 
from Senators Lieberman, Feingold, and 27 other Senators of 
both parties, was reported from the Committee on November 16, 
2006. It passed the Senate by unanimous consent on December 6 
and the House by voice vote on December 8, and was signed by 
the President on December 20, 2006, becoming Public Law 109-
440.

                       II. Committee Jurisdiction

    The jurisdiction of the Committee (which was renamed the 
Committee on Homeland Security and Governmental Affairs when 
the 109th Congress convened) derives from the Rules of the 
Senate and from Senate Resolutions:

                                RULE XXV

                            * * * * * * * *

    (k)(1) Committee on Governmental Affairs, to which 
committee shall be referred all proposed legislation, messages, 
petitions, memorials, and other matters relating to the 
following subjects:

     1. Archives of the United States.
     2. Budget and accounting measures, other than 
appropriations, except as provided in the Congressional Budget 
Act of 1974.
     3. Census and collection of statistics, including economic 
and social statistics.
     4. Congressional organization, except for any part of the 
matter that amends the rules or orders of the Senate.
     5. Federal Civil Service.
     6. Government information.
     7. Intergovernmental relations.
     8. Municipal affairs of the District of Columbia, except 
appropriations therefore.
     9. Organization and management of United States nuclear 
export policy.
    10. Organization and reorganization of the executive branch 
of the Government.
    11. Postal Service.
    12. Status of officers and employees of the United States, 
including their classification, compensation, and benefits.

    (2) Such committee shall have the duty of--
    (A) receiving and examining reports of the Comptroller 
General of the United States and of submitting such 
recommendations to the Senate as it deems necessary or 
desirable in connection with the subject matter of such 
reports;
    (B) studying the efficiency, economy, and effectiveness of 
all agencies and departments of the Government;
    (C) evaluating the effects of laws enacted to reorganize 
the legislative and executive branches of the Government; and
    (D) studying the 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.
    [Note: The Senate changed the name to the Committee on 
Homeland Security and Governmental Affairs at the start of the 
109th Congress. See following item.]

                  SENATE RESOLUTION 50, 109TH CONGRESS

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS.

    Sec. 11. (a) * * *

                            * * * * * * * *

    (e) INVESTIGATIONS----
    (1) In General--The committee, or any duly authorized 
subcommittee of the committee, is authorized to study or 
investigate----
    (A) the efficiency and economy of operations of all 
branches of the Government including the possible existence of 
fraud, misfeasance, malfeasance, collusion, mismanagement, 
incompetence, corruption, or unethical practices, waste, 
extravagance, conflicts of interest, and the improper 
expenditure of Government funds in transactions, contracts, and 
activities of the Government or of Government officials and 
employees and any and all such improper practices between 
Government personnel and corporations, individuals, companies, 
or persons affiliated therewith, doing business with the 
Government; and the compliance or noncompliance of such 
corporations, companies, or individuals or other entities with 
the rules, regulations, and laws governing the various 
governmental agencies and its relationships with the public;
    (B) the extent to which criminal or other improper 
practices or activities are, or have been, engaged in the field 
of labor-management relations or in groups or organizations of 
employees or employers, to the detriment of interests of the 
public, employers, or employees, and to determine whether any 
changes are required in the laws of the United States in order 
to protect such interests against the occurrence of such 
practices or activities;
    (C) organized criminal activity which may operate in or 
otherwise utilize the facilities of interstate or international 
commerce in furtherance of any transactions and the manner and 
extent to which, and the identity of the persons, firms, or 
corporations, or other entities by whom such utilization is 
being made, and further, to study and investigate the manner in 
which and the extent to which persons engaged in organized 
criminal activity have infiltrated lawful business enterprise, 
and to study the adequacy of Federal laws to prevent the 
operations of organized crime in interstate or international 
commerce; and to determine whether any changes are required in 
the laws of the United States in order to protect the public 
against such practices or activities;
    (D) all other aspects of crime and lawlessness within the 
United States which have an impact upon or affect the national 
health, welfare, and safety; including but not limited to 
investment fraud schemes, commodity and security fraud, 
computer fraud, and the use of offshore banking and corporate 
facilities to carry out criminal objectives;
    (E) the efficiency and economy of operations of all 
branches and functions of the Government with particular 
reference to--
    (i) the effectiveness of present national security methods, 
staffing, and processes as tested against the requirements 
imposed by the rapidly mounting complexity of national security 
problems;
    (ii) the capacity of present national security staffing, 
methods, and processes to make full use of the Nation's 
resources of knowledge and talents;
    (iii) the adequacy of present intergovernmental relations 
between the United States and international organizations 
principally concerned with national security of which the 
United States is a member; and
    (iv) legislative and other proposals to improve these 
methods, processes, and relationships;
    (F) the efficiency, economy, and effectiveness of all 
agencies and departments of the Government involved in the 
control and management of energy shortages including, but not 
limited to, their performance with respect to----
    (i) the collection and dissemination of accurate statistics 
on fuel demand and supply;
    (ii) the implementation of effective energy conservation 
measures;
    (iii) the pricing of energy in all forms;
    (iv) coordination of energy programs with State and local 
government;
    (v) control of exports of scarce fuels;
    (vi) the management of tax, import, pricing, and other 
policies affecting energy supplies;
    (vii) maintenance of the independent sector of the 
petroleum industry as a strong competitive force;
    (viii) the allocation of fuels in short supply by public 
and private entities;
    (ix) the management of energy supplies owned or controlled 
by the Government;
    (x) relations with other oil producing and consuming 
countries;
    (xi) the monitoring of compliance by governments, 
corporations, or individuals with the laws and regulations 
governing the allocation, conservation, or pricing of energy 
supplies; and
    (xii) research into the discovery and development of 
alternative energy supplies; and
    (G) the efficiency and economy of all branches and 
functions of Government with particular references to the 
operations and management of Federal regulatory policies and 
programs.
    (2) EXTENT OF INQUIRIES--In carrying out the duties 
provided in paragraph (1), the inquiries of this committee or 
any subcommittee of the committee shall not be construed to be 
limited to the records, functions, and operations of any 
particular branch of the Government and may extend to the 
records and activities of any persons, corporation, or other 
entity.
    (3) SPECIAL COMMITTEE AUTHORITY--For the purposes of this 
subsection, the committee, or any duly authorized subcommittee 
of the committee, or its chairman, or any other member of the 
committee or subcommittee designated by the chairman, from 
March 1, 2005, through February 28, 2007, is authorized, in 
its, his, or their discretion----
    (A) to require by subpoena or otherwise the attendance of 
witnesses and production of correspondence, books, papers, and 
documents;
    (B) to hold hearings;
    (C) to sit and act at any time or place during the 
sessions, recess, and adjournment periods of the Senate;
    (D) to administer oaths; and
    (E) to take testimony, either orally or by sworn statement, 
or, in the case of staff members of the Committee and the 
Permanent Subcommittee on Investigations, by deposition in 
accordance with the Committee Rules of Procedure.
    (4) AUTHORITY OF OTHER COMMITTEES--Nothing contained in 
this subsection shall affect or impair the exercise of any 
other standing committee of the Senate of any power, or the 
discharge by such committee of any duty, conferred or imposed 
upon it by the Standing Rules of the Senate or by the 
Legislative Reorganization Act of 1946.
    (5) SUBPOENA AUTHORITY--All subpoenas and related legal 
processes of the committee and its subcommittee authorized 
under S. Res. 66, agreed to February 26, 2003 (108th Congress) 
are authorized to continue.

           III. Bills and Resolutions Referred and Considered

    During the 109th Congress, 211 Senate bills and 98 House 
bills were referred to the Committee for consideration. In 
addition, 9 Senate Resolutions and 5 Senate Concurrent 
Resolutions were referred to the Committee.
    The Committee reported 75 bills; an additional 74 measures 
were discharged.
    Of the legislation received by the Committee, 106 measures 
became public laws, including 91 postal naming bills.

                              IV. Hearings

    During the 109th Congress, the Committee held 75 hearings 
on legislation, oversight issues, and nominations including one 
joint hearing with the Veterans Affairs Committee. Hearing 
titles and dates follow.
    The Committee also held 16 scheduled business meetings.
    Lists of hearings with copies of statements by Members and 
witnesses, with archives going back to 1997, are online at the 
Committee's Web site, http://hsgac.senate.gov/.
    Department of Homeland Security: The Road Ahead. January 
26, 2005. (332 pp. S. Hrg. 109-15.)
    Nomination of Hon. Michael Chertoff to be Secretary of 
Homeland Security, U.S. Department of Homeland Security. 
February 2, 2005. (334 pp. S. Hrg. 109-6.)
    Transforming Government for the 21st Century. February 16, 
2005. (75 pp. S. Hrg. 109-7.)
    Nomination of Hon. Michael P. Jackson to be Deputy 
Secretary of the Department of Homeland Security. March 7, 
2005. (144 pp. S. Hrg. 109-44.)
    Department of Homeland Security's Budget Submission for 
Fiscal Year 2006. March 9, 2005. (79 pp. S. Hrg. 109-8.)
    U.S. Postal Service: What Is Needed To Ensure Its Future 
Viability? April 14, 2005. (115 pp. S. Hrg. 109-198.)
    Chemical Attack on America: How Vulnerable Are We? April 
27, 2005. (110 pp. S. Hrg. 109-62.)
    FEMA's Response to the 2004 Florida Hurricanes. May 18, 
2005. (106 pp. S. Hrg. 109-161.)
    Nominations of Carolyn Lewis Gallagher to be Governor of 
the U.S. Postal Service, Louis J. Giuliano to be Governor of 
the U.S. Postal Service, and Tony Hammond to be Commissioner of 
the Postal Rate Commission. May 19, 2005. (90 pp. S. Hrg. 109-
63.) Star Print.
    Nomination of Hon. Philip J. Perry, to be General Counsel 
of the U.S. Department of Homeland Security. May 19, 2005. (73 
pp. S. Hrg. 109-197.)
    Counterfeit Goods: Easy Cash for Criminals and Terrorists. 
May 25, 2005. (64 pp. S. Hrg. 109-202.)
    Nomination of Hon. Linda M. Combs to be Controller, Office 
of Federal Financial Management, Office of Management and 
Budget. May 25, 2005. (41 pp. S. Hrg. 109-113.)
    Is the Federal Government Doing Enough To Secure Chemical 
Facilities and Is More Authority Needed? June 15, 2005. (63 pp. 
S. Hrg. 109-175.)
    Nomination of Hon. Linda M. Springer to be Director, Office 
of Personnel Management; Hon. Laura A. Condero to be Associate 
Judge, Superior Court of the District of Columbia; and Hon. 
Noel Anketell Kramer to be Associate Judge, District of 
Columbia Court of Appeals. June 15, 2005. (133 pp. S. Hrg. 109-
156.)
    Juvenile Diabetes: Examining the Personal Toll on Families, 
Financial Costs to the Federal Health Care System, and Research 
Progress Toward a Cure. June 21, 2005. (71 pp. S. Hrg. 109-
225.)
    Vulnerabilities in the U.S. Passport System Can Be 
Exploited By Criminals and Terrorists. June 29, 2005. (98 pp. 
S. Hrg. 109-304.)
    Chemical Facility Security: What Is the Appropriate Federal 
Role? July 13 and July 29, 2005. (632 pp. S. Hrg. 109-382.)
    U.S. Department of Homeland Security: Second Stage Review. 
July 14, 2005. (79 pp. S. Hrg. 109-359.)
    Nominations of Richard L. Skinner to be Inspector General 
of the Department of Homeland Security, and Brian D. Miller to 
be Inspector General of the General Services Administration. 
July 18, 2005. (99 pp. S. Hrg. 109-199.)
    Nomination of Edmund S. ``Kip'' Hawley to be the Assistant 
Secretary of Homeland Security for the Transportation Security 
Administration, Department of Homeland Security. July 18, 2005. 
(86 pp. S. Hrg. 109-310.)
    Nominations of Colleen Duffy Kiko to be General Counsel, 
Federal Labor Relations Authority, Mary M. Rose to be Member, 
Merit Systems Protection Board, Hon. Juliet J. McKenna to be 
Associate Judge, District of Columbia Superior Court, and Hon. 
John R. Fisher to be Associate Judge, District of Columbia 
Court of Appeals. September 13, 2005. (138 pp. S. Hrg. 109-
200.)
    Recovering From Hurricane Katrina: The Next Phase. 
September 14, 2005. (121 pp. S. Hrg. 109-399.)
    Nominations of Stewart A. Baker to be Assistant Secretary 
for Policy, Department of Homeland Security, and Julie L. Myers 
to be Assistant Secretary for U.S. Immigration and Customs 
Enforcement, Department of Homeland Security. September 15, 
2005. (177 pp. S. Hrg. 109-327.)
    After London Attacks: What Lessons Have Been Learned to 
Secure U.S. Transit Systems? September 21, 2005. (78 pp. S. 
Hrg. 109-481.)
    Recovering from Hurricane Katrina: Responding To the 
Immediate Needs of Its Victims. September 28, 2005. (115 pp. S. 
Hrg. 109-445.)
    Hurricane Katrina: How Is FEMA Performing Its Mission at 
This Stage of Recovery? October 6, 2005. (106 pp. S. Hrg. 109-
467.)
    Hurricane Katrina in New Orleans: A Flooded City, A Chaotic 
Response. October 20, 2005. (69 pp. S. Hrg. 109-482.)
    Hurricane Katrina: Why Did the Levees Fail? November 2, 
2005. (357 pp. S. Hrg. 109-526.)
    Always Ready: The Coast Guard's Response to Hurricane 
Katrina. November 9, 2005. (49 pp. S. Hrg. 109-527.)
    Hurricane Katrina: What Can the Government Learn From the 
Private Sector's Response? November 16, 2005. (67 pp. S. Hrg. 
109-538.)
    From Proposed to Final: Evaluating the Regulations for the 
National Security Personnel System. November 17, 2005. (243 pp. 
S. Hrg. 109-575.)
    Hurricane Katrina: Perspectives of FEMA's Operations 
Professionals. December 8, 2005. (105 pp. S. Hrg. 109-591.)
    Nominations of George W. Foresman to be Under Secretary for 
Preparedness, U.S. Department of Homeland Security, and Tracy 
A. Henke to be Executive Director of the Office of State and 
Local Government Coordination and Preparedness, U.S. Department 
of Homeland Security. December 8, 2005. (255 pp. S. Hrg. 109-
513.)
    Hurricane Katrina: Who's In Charge of the New Orleans 
Levees? December 15, 2005. (115 pp. S. Hrg. 109-616.)
    Hurricane Katrina: Mississippi's Recovery. January 17, 
2006. (68 pp. S. Hrg. 109-711.)
    Preparing For a Catastrophe: The Hurricane PAM Exercise. 
January 24, 2006. (109 pp. S. Hrg. 109-403.)
    Lobbying Reform: Proposals and Issues. January 25, 2006. 
(142 pp. S. Hrg. 109-428.)
    Hurricane Katrina: Urban Search and Rescue in a 
Catastrophe. January 30, 2006. (81 pp. S. Hrg. 109-757.)
    Challenges In A Catastrophe: Evacuating New Orleans In 
Advance of Hurricane Katrina. January 31, 2006. (167 pp. S. 
Hrg. 109-735.)
    Hurricane Katrina: Managing the Crisis and Evacuating New 
Orleans. February 1, 2006. (135 pp. S. Hrg. 109-793.)
    Hurricane Katrina: The Role of the Governors in Managing 
the Catastrophe. February 2, 2006. (168 pp. S. Hrg. 109-804.)
    Hurricane Katrina: Managing Law Enforcement and 
Communications in a Catastrophe. February 6, 2006. (116 pp. S. 
Hrg. 109-656.)
    Hurricane Katrina: The Defense Department's Role in the 
Response. February 9, 2006. (294 pp. S. Hrg. 109-813.)
    Hurricane Katrina: The Roles of U.S. Department of Homeland 
Security and Federal Emergency Management Agency Leadership. 
February 10, 2006. (340 pp. S. Hrg. 109-829.)
    Hurricane Katrina: Waste, Fraud, and Abuse Worsen the 
Disaster. February 13, 2006, 2006. (165 pp. S. Hrg. 109-731.)
    Hurricane Katrina: The Homeland Security Department's 
Preparation and Response. February 15, 2006. (175 pp. S. Hrg. 
109-848.)
    The Department of Homeland Security's Budget Submission for 
Fiscal Year 2007. March 1, 2006. (120 pp. S. Hrg. 109-849.)
    Hurricane Katrina: Recommendations for Reform. March 8, 
2006. (240 pp. S. Hrg. 109-863.)
    Nomination of Uttam Dhillon to be Director, Office of 
Counternarcotics Enforcement, U.S. Department of Homeland 
Security. March 31, 2006. (53 pp. S. Hrg. 109-542.)
    Nomination of Mark D. Acton to be Commissioner, Postal Rate 
Commission. March 31, 2006. (32 pp. S. Hrg. 109-549.)
    The Future of Port Security: The GreenLane Maritime Cargo 
Security Act. April 5, 2006. (115 pp. S. Hrg. 109-877.)
    Rhode Island Homeland Security Priorities: Preparation for 
the 2006 Hurricane Season. (Field hearing in Providence, Rhode 
Island. April 20, 2006. (Not Yet Printed, 00 pp. S. Hrg. 109-
932.)
    FEMA's Manufactured Housing Program: Haste Makes Waste. 
(Field hearing in Hope, Arkansas. April 21, 2006. (95 pp. S. 
Hrg. 109-962.)
    Nomination of David L. Norquist to be Chief Financial 
Officer for the U.S. Department of Homeland Security. May 8, 
2006. (143 pp. S. Hrg. 109-520.)
    Nomination of Hon. Robert J. Portman to be Director, Office 
of Management and Budget. May 17, 2006. (118 pp. S. Hrg. 109-
657.)
    Nomination of Robert I. Cusick to be Director, Office of 
Government Ethics. May 18, 2006. (40 pp. S. Hrg. 109-617.)
    Nomination of Lurita Alexis Doan to be Administrator, U.S. 
General Services Administration. May 22, 2006. (71 pp. S. Hrg. 
109-618.)
    Nomination of R. David Paulison to be Under Secretary for 
Federal Emergency Management, U.S. Department of Homeland 
Security. May 24, 2006. (149 pp. S. Hrg. 109-673.)
    Veterans Affairs Data Privacy Breach: Twenty-Six Million 
People Deserve Answers. Joint hearing with the Veterans' 
Affairs Committee. May 25, 2006. (Printed by the Veterans 
Affairs Committee. 55 pp. S. Hrg. 109-577)
    National Emergency Management: Where Does FEMA Belong? June 
8, 2006. (108 pp. S. Hrg. 109-974.)
    Nomination of Paul A. Denett to be Administrator of the 
Office of Federal Procurement Policy, Office of Management and 
Budget. June 20, 2006. (78 pp. S. Hrg. 109-873.)
    Nominations of Hon. Mickey D. Barnett, Katherine C. Tobin, 
and Ellen C. Williams, to be Governors of the U.S. Postal 
Service. June 28, 2006. (130 pp. S. Hrg. 109-870.)
    Nominations of Hon. Anne Blackburne-Rigsby and Phyllis D. 
Thompson, to be Associate Judges, District of Columbia Court of 
Appeals; and Jennifer M. Anderson, to be Associate Judge, 
Superior Court of the District of Columbia. July 11, 2006. (90 
pp. S. Hrg. 109-907.)
    Nomination of Stephen S. McMillin to be Deputy Director of 
the Office of Management and Budget. July 13, 2006. (60 pp. S. 
Hrg. 109-908.)
    Department of Homeland Security Purchase Cards: Credit 
Without Accountability. July 19, 2006. (120 pp. S. Hrg. 109-
889.)
    Iraq Reconstruction: Lessons Learned in Contracting. August 
2, 2006. (76 pp. S. Hrg. 109-966.)
    Homeland Security: The Next 5 Years. September 12, 2006. 
(57 pp. S. Hrg. 109-938.)
    Nominations of Wayne C. Beyer to be Member, Federal Labor 
Relations Authority, and Stephen T. Conboy to be U.S. Marshal, 
Superior Court of the District of Columbia. September 13, 2006. 
(58 pp. S. Hrg. 109-902.)
    Prison Radicalization: Are Terrorist Cells Forming in U.S. 
Cell Blocks? September 19, 2006. (159 pp. S. Hrg. 109-954.)
    Critical Mission: Assessing Spiral 1.1 of the National 
Security Personnel System. September 20, 2006. (66 pp. S. Hrg. 
109-927.)
    The Potential of an Artificial Pancreas: Improving Care for 
People With Diabetes. September 27, 2006. (61 pp. S. Hrg. 109-
961.)
    Nomination of Susan E. Dudley, to be Administrator, Office 
of Information and Regulatory Affairs, Office of Management and 
Budget. November 13, 2006. (246 pp. S. Hrg. 109-955.)
    Nominations of Hon. James H. Bilbray, Thurgood Marshall, 
Jr., to be Governors, U.S. Postal Services, and Hon. Dan G. 
Blair, to be Chairman, Postal Rate Commission. November 14, 
2006. (87 pp. S. Hrg. 109-924.)
    Hurricane Katrina: Stopping the Flood of Fraud, Waste, and 
Abuse. December 6, 2006. (66 pp. S. Hrg. 109-930.)
    Nomination of Paul A. Schneider to be Under Secretary for 
Management, U.S. Department of Homeland Security. December 6, 
2006. (67 pp. S. Hrg. 109-871.)

                  V. Reports, Prints, and GAO Reports

    During the 109th Congress, the Committee prepared and 
issued 16 reports, including one Special Report, and five 
Committee Prints on the following topics. Reports issued by the 
Subcommittees are listed in their respective sections of this 
document.

                           Committee Reports

    Homeland Security Grant Enhancement Act of 2005. S. Rept. 
109-71, re. S. 21.
    Federal Employee Protection of Disclosures Act. S. Rept. 
109-72, re. S. 494.
    Congressional Award Act. S. Rept. 109-87, re. S. 335.
    National Women's History Museum Act of 2005. S. Rept. 109-
104, re. S. 501.
    Extending the Special Postage Stamp for Breast Cancer. S. 
Rept. 109-140, re. S. 37.
    Providing for the participation of employees in the 
Judicial Branch in the Federal leave transfer program for 
disasters and emergencies. S. Rept. 109-158, re. S. 1736.
    Homeland Security Food and Agriculture Act of 2005. S. 
Rept. 109-209, re. S. 572.
    General Services Administration Modernization Act. S. Rept. 
109-257, re. H.R. 2066.
    To extend relocation expenses test programs for Federal 
employees. S. Rept. 109-289, re. S. 2146.
    To preserve existing judgeships on the Superior Court of 
the District of Columbia. S. Rept. 109-316, re. S. 2068.
    Debris Removal Act of 2005. S. Rept. 109-320, re. S. 939.
    Hurricane Katrina: A Nation Still Unprepared. S. Rept. 109-
322. Special Report.
    Federal Funding Accountability and Transparency Act of 
2006. S. Rept. 109-329, re. S. 2590.
    Chemical Facility Anti-Terrorism Act of 2006. S. Rept. 109-
332, re. S. 2145.
    Federal and District of Columbia Government Real Property 
Act of 2005. S. Rept. 109-359, re. S. 1838.
    Activities of the Committee on Governmental Affairs for the 
108th Congress. S. Rept. 109-368.

                            Committee Prints

    The committee issued the following Committee Prints during 
the 109th Congress:
    Organization of Federal Executive Departments and Agencies. 
Agencies and Functions of the Federal Government Established, 
Abolished, Continued, Modified, Reorganized, Extended, 
Transferred, or Changed in Name by Legislative or Executive 
Action During Calendar Years 2003 and 2004. (Prepared by the 
Office of the Federal Register, National Archives and Records 
Administration for the Committee on Homeland Security and 
Governmental Affairs.) (Printed. 29 pp. S. Prt. 109-16)
    Rules of Procedure. Permanent Subcommittee on 
Investigations. (Printed. 18 pp. S. Prt. 109-20.)
    Rules of Procedure. Committee on Homeland Security and 
Governmental Affairs. (Printed. 36 pp. S. Prt. 109-21.)
    Legislative Calendar for the 109th Congress. (164 pp. S. 
Prt. 109-76)

                              GAO Reports

    Also during the 109th Congress, the Government 
Accountability Office (GAO) issued 130 reports at the request 
of the Committee. GAO reports requested by Subcommittees appear 
in their respective sections. Reports are listed here by title, 
GAO number, and release date.
    Diversity Management: Expert-Identified Leading Practices 
and Agency Examples. GAO-05-90. January 14, 2005.
    Federal Thrift Savings Plan: Customer Service Practices 
Adopted by Private Sector Plan Managers Should Be Considered. 
GAO-05-38. January 18, 2005.
    Gun Control and Terrorism: FBI Could Better Manage Firearm-
Related Background Checks Involving Terrorist Watch List 
Records. GAO-05-127. January 19, 2005.
    Federal Procurement: International Agreements Result in 
Waivers of Some U.S. Domestic Source Restrictions. GAO-05-188. 
January 26, 2005.
    Tax Shelters: Services Provided by External Auditors. GAO-
05-171. February 1, 2005.
    Contract Management: Opportunities to Improve Pricing of 
GSA Multiple Award Schedules Contracts. GAO-05-229. February 
11, 2005.
    Food Safety: Experiences of Seven Countries in 
Consolidating Their Food Safety Systems. GAO-05-212. February 
22, 2005.
    Bioterrorism: Information on Jurisdictions' Expenditure and 
Reported Obligation of Program Funds. GAO-05-239. February 28, 
2005.
    Performance Budgeting: States' Experiences Can Inform 
Federal Efforts. GAO-05-215. February 28, 2005.
    Homeland Security: Much Is Being Done to Protect 
Agriculture from a Terrorist Attack, but Important Challenges 
Remain. GAO-05-214. March 8, 2005.
    Cargo Security: Partnership Program Grants Importers 
Reduced Scrutiny with Limited Assurance of Improved Security. 
GAO-05-404. March 11, 2005.
    Homeland Security: Successes and Challenges in DHS's 
Efforts to Create an Effective Acquisition Organization. GAO-
05-179. March 29, 2005.
    Oversight of Food Safety Activities: Federal Agencies 
Should Pursue Opportunities to Reduce Overlap and Better 
Leverage Resources. GAO-05-213. March 30, 2005.
    Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended September 30, 2004. GAO-
05-359. March 31, 2005.
    Preventing Nuclear Smuggling: DOE Has Made Limited Progress 
in Installing Radiation Detection Equipment at Highest Priority 
Foreign Seaports. GAO-05-375. March 31, 2005.
    Unfunded Mandates: Views Vary About Reform Act's Strengths, 
Weaknesses, and Options for Improvement. GAO-05-454. March 31, 
2005.
    Grants Management: Additional Actions Needed to Streamline 
and Simplify Processes. GAO-05-335. April 18, 2005.
    Container Security: A Flexible Staffing Model and Minimum 
Equipment Requirements Would Improve Overseas Targeting and 
Inspection Efforts. GAO-05-557. April 26, 2005.
    Equal Employment Opportunity: The Policy Framework in the 
Federal Workplace and the Roles of EEOC and OPM. GAO-05-195. 
April 29, 2005.
    DOD Excess Property: Management Control Breakdowns Result 
in Substantial Waste and Inefficiency. GAO-05-277. May 13, 
2005.
    State Department: Improvements Needed to Strengthen U.S. 
Passport Fraud Detection Efforts. GAO-05-477. May 20, 2005.
    Critical Infrastructure Protection: Department of Homeland 
Security Faces Challenges in Fulfilling Cybersecurity 
Responsibilities. GAO-05-434. May 26, 2005.
    Clean Air Act: Emerging Mercury Control Technologies Have 
Shown Promising Results, but Data on Long-Term Performance Are 
Limited. GAO-05-612. May 31, 2005.
    Federal Disability Assistance: Wide Array of Programs Needs 
to be Examined in Light of 21st Century Challenges. GAO-05-626. 
June 2, 2005.
    Financial Management: Thousands of Civilian Agency 
Contractors Abuse the Federal Tax System with Little 
Consequence. GAO-05-637. June 16, 2005.
    Information Security: Department of Homeland Security Needs 
to Fully Implement Its Security Program. GAO-05-700. June 17, 
2005.
    Oil And Gas Development: Increased Permitting Activity Has 
Lessened BLM's Ability to Meet Its Environmental Protection 
Responsibilities. GAO-05-418. June 17, 2005.
    Hardrock Mining: BLM Needs to Better Manage Financial 
Assurances to Guarantee Coverage of Reclamation Costs. GAO-05-
377. June 20, 2005.
    Human Capital: Selected Agencies Have Opportunities to 
Enhance Existing Succession Planning and Management Efforts. 
GAO-05-585. June 30, 2005.
    Human Capital: DOD's National Security Personnel System 
Faces Implementation Challenges. GAO-05-730. July 14, 2005.
    Information Security: Weaknesses Persist at Federal 
Agencies Despite Progress Made in Implementing Related 
Statutory Requirements. GAO-05-552. July 15, 2005.
    U.S. Postal Service: Guidance on Suspicious Mail Needs 
Further Refinement. GAO-05-716. July 19, 2005.
    Federal Student Loan Repayment Program: OPM Could Build on 
Its Efforts to Help Agencies Administer the Program and Measure 
Results. GAO-05-762. July 22, 2005.
    Federal Contracting: Share-in-Savings Initiative Not Yet 
Tested. GAO-05-736. July 26, 2005.
    Rebuilding Iraq: Status of Funding and Reconstruction 
Efforts. GAO-05-876. July 28, 2005.
    Border Security: Actions Needed to Strengthen Management of 
Department of Homeland Security's Visa Security Program. GAO-
05-801. July 29, 2005.
    Federal Procurement: Additional Data Reporting Could 
Improve the Suspension and Debarment Process. GAO-05-479. July 
29, 2005.
    Data Mining: Agencies Have Taken Key Steps to Protect 
Privacy in Selected Efforts, but Significant Compliance Issues 
Remain. GAO-05-866. August 15, 2005.
    NASA Travel: Passenger Aircraft Services Annually Cost 
Taxpayers Millions More Than Commercial Airlines. GAO-05-818. 
August 26, 2005.
    Rebuilding Iraq: U.S. Water and Sanitation Efforts Need 
Improved Measures for Assessing Impact and Sustained Resources 
for Maintaning Facilities. GAO-05-872. September 7, 2005.
    Prescription Drugs: Strategic Framework Would Promote 
Accountability and Enhance Efforts to Enforce the Prohibitions 
on Personal Importation. GAO-05-372. September 8, 2005.
    Chief Information Officers: Responsibilities and 
Information Technology Governance at Leading Private-Sector 
Companies. GAO-05-986. September 9, 2005.
    Electronic Rulemaking: Progress Made in Developing 
Centralized E-Rulemaking System. GAO-05-777. September 9, 2005.
    Waters and Wetlands: Corps of Engineers Needs to Better 
Support Its Decisions for Not Asserting Jurisdiction. GAO-05-
870. September 9, 2005.
    Border Security: Strengthened Visa Process Would Benefit 
from Improvements in Staffing and Information Sharing. GAO-05-
859. September 13, 2005.
    International Affairs: Information on U.S. Agencies' 
Efforts to Address Islamic Extremism. GAO-05-852. September 16, 
2005.
    Financial Management: Achieving FFMIA Compliance Continues 
to Challenge Agencies. GAO-05-881. September 20, 2005.
    Department of Homeland Security: Strategic Management of 
Training Important for Successful Transformation. GAO-05-888. 
September 23, 2005.
    Elections: Views of Selected Local Election Officials on 
Managing Voter Registration and Ensuring Eligible Citizens Can 
Vote. GAO-05-997. September 27, 2005.
    Crop Insurance: Actions Needed to Reduce Program's 
Vulnerability to Fraud, Waste, and Abuse. GAO-05-528. September 
30, 2005.
    Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended March 31, 2005. GAO-05-
961. September 30, 2005.
    Influenza Vaccine: Shortages in 2004-05 Season Underscore 
Need for Better Preparation. GAO-05-984. September 30, 2005.
    U.S. Postal Service: Factors Affecting Fund-Raising Stamp 
Sales Suggest Lessons Learned. GAO-05-953. September 30, 2005.
    Nuclear Nonproliferation: IAEA Has Strengthened Its 
Safeguards and Nuclear Security Programs, but Weaknesses Need 
to Be Addressed. GAO-06-93. October 7, 2005.
    Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies. GAO-
06-15. October 21, 2005.
    Terrorist Financing: Better Strategic Planning Needed to 
Coordinate U.S. Efforts to Deliver Counter-Terrorism Financing 
Training and Technical Assistance Abroad. GAO-06-19. October 
24, 2005.
    International Trade: U.S. and India Data on Offshoring Show 
Significant Differences. GAO-06-116. October 27, 2005.
    Food and Drug Administration: Decision Process to Deny 
Initial Application for Over-the-Counter Marketing of the 
Emergency Contraceptive Drug Plan B Was Unusual. GAO-06-109. 
November 14, 2005.
    Environmental Protection: More Complete Data and Continued 
Emphasis on Leak Prevention Could Improve EPA's Underground 
Storage Tank Program. GAO-06-45. November 30, 2005.
    International Trade: USTR Would Benefit from Greater Use of 
Strategic Human Capital Management Principles. GAO-06-167. 
December 6, 2005.
    U.S. Postal Service: Purchasing Changes Seem Promising, but 
Ombudsman Revisions and Continued Oversight Are Needed. GAO-06-
190. December 15, 2005.
    Homeland Security: DHS Needs to Improve Ethics-Related 
Management Controls for the Science and Technology Directorate. 
GAO-06-206. December 22, 2005.
    DOD Business Transformation: Defense Travel System 
Continues to Face Implementation Challenges. GAO-06-18. January 
18, 2006.
    Homeland Security: DHS Is Taking Steps to Enhance Security 
at Chemical Facilities, but Additional Authority Is Needed. 
GAO-06-150. January 27, 2006.
    State's Centrally Billed Foreign Affairs Travel: Internal 
Control Breakdowns and Ineffective Oversight Lost Taxpayers 
Tens of Millions of Dollars. GAO-06-298. March 10, 2006.
    Combating Nuclear Smuggling: Corruption, Maintenance, and 
Coordination Problems Challenge U.S. Efforts to Provide 
Radiation Detection Equipment to Other Countries. GAO-06-311. 
March 14, 2006.
    Information Sharing: The Federal Government Needs to 
Establish Policies and Processes for Sharing Terrorism-Related 
and Sensitive but Unclassified Information. GAO-06-385. March 
17, 2006.
    Combating Nuclear Smuggling: DHS Has Made Progress 
Deploying Radiation Detection Equipment at U.S. Ports-of-Entry, 
but Concerns Remain. GAO-06-389. March 22, 2006.
    Offshoring in Six Human Services Programs: Offshoring 
Occurs in Most States, Primarily in Customer Service and 
Software Development. GAO-06-342. March 28, 2006.
    Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended September 30, 2005. GAO-
06-485. March 31, 2006.
    Human Capital: Agencies Are Using Buyouts and Early Outs 
with Increasing Frequency to Help Reshape Their Workforces. 
GAO-06-324. March 31, 2006.
    Information Technology: Near-Term Effort to Automate Paper-
Based Immigration Files Needs Planning Improvements. GAO-06-
375. March 31, 2006.
    Long-Term Care Insurance: Federal Program Compared 
Favorably with Other Products, and Analysis of Claims Trend 
Could Inform Future Decisions. GAO-06-401. March 31, 2006.
    Hurricane Katrina: Comprehensive Policies and Procedures 
Are Needed to Ensure Appropriate Use of and Accountability for 
International Assistance. GAO-06-460. April 6, 2006.
    Company Formations: Minimal Ownership Information Is 
Collected and Available. GAO-06-376. April 7, 2006.
    Elections: Absentee Voting Assistance to Military and 
Overseas Citizens Increased for the 2004 General Election, but 
Challenges Remain. GAO-06-521. April 7, 2006.
    United Nations: Funding Arrangement Impede Independence of 
Internal Auditors. GAO-06-575. April 25, 2006.
    United Nations: Lessons Learned from Oil for Food Program 
Indicate the Need to Strengthen UN Internal Controls and 
Oversight Activities. GAO-06-330. April 25, 2006.
    United Nations: Procurement Internal Controls Are Weak. 
GAO-06-577. April 25, 2006.
    Hurricane Katrina: Army Corps of Engineers Contract for 
Mississippi Classrooms. GAO-06-454. May 1, 2006.
    Equal Employment Opportunity: DOD's EEO Pilot Program Under 
Way, but Improvements Needed to DOD's Evaluation Plan. GAO-06-
538. May 5, 2006.
    Hurricane Katrina: Better Plans and Exercises Needed to 
Guide the Military's Response to Catastrophic Natural 
Disasters. GAO-06-643. May 15, 2006.
    2010 Census: Census Bureau Generally Follows Selected 
Leading Acquisition Planning Practices, but Continued 
Management Attention Is Needed to Help Ensure Success. GAO-06-
277. May 18, 2006.
    Cooperative Threat Reduction: DOD Needs More Reliable Data 
to Better Estimate the Cost and Schedule of the Shchuch'ye 
Facility. GAO-06-692. May 31, 2006.
    Elections: The Nation's Evolving Election System as 
Reflected in the November 2004 General Election. GAO-06-450. 
June 6, 2006.
    Hurricanes Katrina and Rita: Coordination between FEMA and 
the Red Cross Should Be Improved for the 2006 Hurricane Season. 
GAO-06-712. June 8, 2006.
    2010 Census: Census Bureau Needs to Take Prompt Actions to 
Resolve Long-standing and Emerging Address and Mapping 
Challenges. GAO-06-272. June 15, 2006.
    Equal Employment Opportunity: Improved Coordination Needed 
between EEOC and OPM in Leading Federal Workplace EEO. GAO-06-
214. June 16, 2006.
    Expedited Assistance for Victims of Hurricanes Katrina and 
Rita: FEMA's Control Weaknesses Exposed the Government to 
Significant Fraud and Abuse. GAO-06-655. June 16, 2006.
    Internet Infrastructure: DHS Faces Challenges in Developing 
a Joint Public/Private Recovery Plan. GAO-06-672. June 16, 
2006.
    Rebuilding Iraq: More Comprehensive National Strategy 
Needed to Help Achieve U.S. Goals. GAO-06-788. July 11, 2006.
    Disaster Preparedness: Limitations in Federal Evacuation 
Assistance for Health Facilities Should be Addressed. GAO-06-
826. July 20, 2006.
    U.S. Postal Service: Delivery Performance Standards, 
Measurement, and Reporting Need Improvement. GAO-06-733. July 
27, 2006.
    Baby Boom Generation: Retirement of Baby Boomers Is 
Unlikely to Precipitate Dramatic Decline in Market Returns, but 
Broader Risks Threaten Retirement Security. GAO-06-718. July 
28, 2006.
    Community Development Block Grants: Program Offers 
Recipients Flexibility but Oversight Can Be Improved. GAO-06-
732. July 28, 2006.
    Grants Management: Grantees' Concerns with Efforts to 
Streamline and Simplify Processes. GAO-06-566. July 28, 2006.
    Small Business Administration: Actions Needed to Provide 
More Timely Disaster Assistance. GAO-06-860. July 28, 2006.
    Coast Guard: Observations on the Preparation, Response, and 
Recovery Missions Related to Hurricane Katrina. GAO-06-903. 
July 31, 2006.
    Security Assistance: Lapses in Human Rights Screening in 
North African Countries Indicate Need for Further Oversight. 
GAO-06-850. July 31, 2006.
    Strategic Petroleum Reserve: Available Oil Can Provide 
Significant Benefits, but Many Factors Should Influence Future 
Decisions about Fill, Use, and Expansion. GAO-06-872. August 
24, 2006.
    Privacy: Domestic and Offshore Outsourcing of Personal 
Information in Medicare, Medicaid, and TRICARE. GAO-06-676. 
September 5, 2006.
    Catastrophic Disasters: Enhanced Leadership, Capabilities, 
and Accountability Controls Will Improve the Effectiveness of 
the Nation's Preparedness, Response, and Recovery System. GAO-
06-618. September 6, 2006.
    Disaster Relief: Governmentwide Framework Needed to Collect 
and Consolidate Information to Report on Billions in Federal 
Funding for the 2005 Gulf Coast Hurricanes. GAO-06-834. 
September 6, 2006.
    Hurricane Katrina: Strategic Planning Needed to Guide 
Future Enhancements Beyond Interim Levee Repairs. GAO-06-934. 
September 6, 2006.
    United Nations: Additional Efforts Needed to Increase U.S. 
Employment at U.N. Agencies. GAO-06-988. September 6, 2006.
    Natural Gas: Roles of Federal and State Regulators in 
Overseeing Prices. GAO-06-968. September 8, 2006.
    Credit Cards: Increased Complexity in Rates and Fees 
Heightens Need for More Effective Disclosures to Consumers. 
GAO-06-929. September 12, 2006.
    Mail Security: Incidents at DOD Mail Facilities Exposed 
Problems That Require Further Actions. GAO-06-757. September 
15, 2006.
    Defense Travel System: Reported Savings Questionable and 
Implementation Challenges Remain. GAO-06-980. September 26, 
2006.
    Financial Management: Improvements Under Way but Serious 
Financial Systems Problems Persist. GAO-06-970. September 26, 
2006.
    Hurricanes Katrina and Rita: Unprecedented Challenges 
Exposed the Individuals and Households Program to Fraud and 
Abuse; Actions Needed to Reduce Such Problems in Future. GAO-
06-1013. September 27, 2006.
    Interagency Contracting: Improved Guidance, Planning, and 
Oversight Would Enable the Department of Homeland Security to 
Address Risks. GAO-06-996. September 27, 2006.
    DOD Personnel Clearances: Additional OMB Actions Are Needed 
to Improve the Security Clearance Process. GAO-06-1070. 
September 28, 2006.
    Purchase Cards: Control Weaknesses Leave DHS Highly 
Vulnerable to Fraudulent, Improper, and Abusive Activity. GAO-
06-1117. September 28, 2006.
    Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended March 31, 2006. GAO-06-
1054. September 29, 2006.
    Hurricane Katrina: Status of Hospital Inpatient and 
Emergency Departments in the Greater New Orleans Area. GAO-06-
1003. September 29, 2006.
    Transportation Security: DHS Should Address Key Challenges 
before Implementing the Transportation Worker Identification 
Credential Program. GAO-06-982. September 29, 2006.
    United Nations: Management Reforms Progressing Slowly with 
Many Awaiting General Assembly Review. GAO-07-14. October 5, 
2006.
    Medicaid: Strategies to Help States Address Increased 
Expenditures during Economic Downturns. GAO-07-97. October 18, 
2006.
    Homeland Security: Opportunities Exist to Enhance 
Collaboration at 2April 7 Operations Centers Staffed by 
Multiple DHS Agencies. GAO-07-89. October 20, 2006.
    Immigration Benefits: Additional Efforts Needed to Help 
Ensure Alien Files Are Located when Needed. GAO-07-85. October 
27, 2006.
    Improper Payments: Agencies' Fiscal Year 2005 Reporting 
under the Improper Payments Information Act Remains Incomplete. 
GAO-07-92. November 14, 2006.
    Internal Revenue Service: Procedural Changes Could Enhance 
Tax Collections. GAO-07-26. November 15, 2006.
    Information Technology: DOD Needs to Ensure That Navy 
Marine Corps Intranet Program Is Meeting Goals and Satisfying 
Customers. GAO-07-51. December 8, 2006.
    Information Technology: Status and Challenges of Employee 
Exchange Program. GAO-07-216. December 15, 2006.
    National Flood Insurance Program: New Processes Aided 
Hurricane Katrina Claims Handling, but FEMA's Oversight Should 
Be Improved. GAO-07-169. December 15, 2006.
    Federal Employees Health Benefits Program: Premium Growth 
Has Recently Slowed, and Varies among Participating Plans. GAO-
07-141. December 22, 2006.
    Homeland Security First Responder Grants: Cash Management 
Improvement Act Exemption and Cash Advance Funding Require 
Additional DHS Oversight. GAO-07-68. December 22, 2006.
    Transportation-Disadvantaged Populations: Actions Needed to 
Clarify Responsibilities and Increase Preparedness for 
Evacuations. GAO-07-44. December 22, 2006.
    Long-Term Care Insurance: Federal Program Has a Unique 
Profit Structure and Faced a Significant Marketing Challenge. 
GAO-07-202. December 29, 2006.

                      VI. Official Communications

    During the 109th Congress, 1,023 official communications 
were referred to the Committee. Of these, 1,005 were Executive 
Communications, 16 were Petitions or Memorials, and 2 were 
Presidential Messages. Of the official communications, 390 
dealt with the District of Columbia.
    (Note: Due to a transposition error, incorrect totals were 
reported in the Activities of the Committee on Governmental 
Affairs for the 108th Congress, S. Rept. 109-368, for official 
communications sent to the Committee in the 108th Congress. The 
correct totals for the 108th Congress were 1,064 Executive 
Communications, 10 Petitions or Memorials, and 2 Presidential 
Messages.)

                        VII. Legislative Actions

    During the 109th Congress, the Committee reported 
significant legislation that was approved by Congress and 
signed into law by the President.
    The following are brief legislative histories of measures 
referred to the Committee and, in some cases, drafted by the 
Committee, which (1) became public law or (2) were favorably 
reported from the Committee and passed by the Senate, but did 
not become law. In addition to the measures listed below, the 
Committee received during the 109th Congress numerous 
legislative proposals that were not considered or reported, or 
that were reported but not passed by the Senate. Additional 
information on these measures appears in the Committee's 
Legislative Calendar for the 109th Congress, S. Prt. 109-76, 
Government Printing Office (December 31, 2006).

                       MEASURES ENACTED INTO LAW

    The following measures considered by the Committee were 
enacted into Public Law. The descriptions following the signing 
date of each measure note selected provisions of the text, and 
are not intended to serve as section-by-section summaries.

H.R. 2385--To extend by 10 years the authority of the Secretary of 
        Commerce to conduct the quarterly financial report program. 
        (Public Law 109-79). September 30, 2005.

    Transfers responsibility for the quarterly financial report 
from the Federal Trade Commission to the Secretary of Commerce, 
and extends the Secretary's authority to 2015.

S. 37--To extend the special postage stamp for breast cancer research 
        for 2 years. (Public Law 109-100). November 11, 2005.

    Extends the U.S. Postal Service's authority to issue 
special postage stamps to support breast cancer research 
through December 31, 2007.

H.R. 4324--To amend the Report T. Stafford Disaster Relief and 
        Emergency Assistance Act to reauthorize the predisaster 
        mitigation program, and for other purposes. (Public Law 109-
        139). December 22, 2005.

    Amends the Stafford Act to reauthorize through FY2008 the 
program of technical and financial assistance to States and 
local governments for cost-effective predisaster hazard-
mitigation measures.

S. 335--To reauthorize the Congressional Award Act. (Public Law 109-
        143). December 22, 2005.

    Amends the Congressional Award Act to extend through 
calendar 2009 the requirement that the Comptroller General 
determine, and report to Congress, whether the Director of the 
Congressional Award Board is complying with requirements for 
financial operations of the Congressional Award Program. 
Extends authorization of the Board to October 1, 2009, and 
confirms Board actions and functions during the months 
preceding the extension.

S. 1777--To provide relief for the victims of Hurricane Katrina. 
        (Public Law 109-176). March 6, 2006.

    Directs the President to make unemployment assistance 
available to individuals eligible for such assistance under the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
as a result of a disaster declaration made for Hurricane 
Katrina or Hurricane Rita on or after August 29, 2005, for 39 
weeks from the date of that declaration.

S. 1736--To provide for the participation of employees in the judicial 
        branch in the Federal leave transfer program for disasters and 
        emergencies. (Public Law 109-229). May 31, 2006.

    Amends Federal civil-service law to require the Office of 
Personnel Management, after consulting with the Administrative 
Office of the U.S. Courts, to allow Federal judicial branch 
employees to participate in any emergency-leave transfer 
programs for disasters and emergencies.

S. 2590--Federal Funding Accountability and Transparency Act of 2006. 
        (Public Law 109-282). September 26, 2006.

    Directs the Office of Management and Budget by January 1, 
2008, to ensure the existence and operation of a single, 
searchable, and free Web site accessible by the public that 
includes for each Federal award of Federal financial assistance 
and expenditures (excluding individual transactions below 
$25,000 and credit card transactions before October 1, 2008): 
(1) the amount; (2) information including transaction type, 
funding agency, the North American Industry Classification 
System code or Catalog of Federal Domestic Assistance number, 
program source, and an award title descriptive of the purpose 
of each funding action; (3) the name and location of the 
recipient and the primary location of performance; and (4) a 
unique identifier of the recipient and any parent entity. 
Requires the website to include data for FY2007 and each fiscal 
year thereafter.

H.R. 3858--Pets Evacuation and Transportation Standards Act of 2005. 
        (Public Law 109-308). October 6, 2006.

    Amends the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act to require the Director of the Federal Emergency 
Management Agency to ensure that State and local emergency 
preparedness operational plans address the needs of individuals 
with household pets and service animals prior to, during, and 
following a major disaster or emergency. Authorizes the 
Director to: (1) study and develop plans that take into account 
the needs of individuals with pets and service animals prior 
to, during, and following a major disaster or emergency; and 
(2) make financial contributions, on the basis of programs or 
projects approved by the Director, to the States and local 
authorities for animal emergency preparedness purposes, 
including the procurement, construction, leasing, or renovating 
of emergency shelter facilities and materials that will 
accommodate people with pets and service animals. Authorizes 
Federal agencies to provide, as assistance essential to meeting 
threats to life and property resulting from a major disaster, 
rescue, care, shelter, and essential needs to individuals with 
household pets and service animals and to such pets and 
animals.

H.R. 2066--General Services Administration Modernization Act. (Public 
        Law 109-313). October 6, 2006.

    Establishes a Federal Acquisition Service in the General 
Services Administration. Authorizes the Administrator to 
appoint Regional Executives in the Federal Acquisition Service. 
Abolishes the General Supply Fund and the Information 
Technology Fund in the Treasury. Transfers remaining capital 
assets and balances in such Funds to the Acquisition Services 
Fund to be merged with, and be available for, the purposes of 
such Fund. Amends the Office of Federal Procurement Policy Act 
to direct the head of each executive agency to establish 
policies and procedures under which the agency head may 
reemploy in an acquisition-related position an individual 
receiving an annuity from the Civil Service Retirement and 
Disability Fund without discontinuing such annuity, if unique 
needs exist.

S. 2146--To extend relocation expenses test programs for Federal 
        employees. (Public Law 109-325). October 11, 2006.

    Extends authority for four years for relocation expenses 
associated with test programs for Federal employees. Eliminates 
the limitation on the period of time under which payment of 
relocation expenses under such programs may be paid.

H.R. 3508--2005 District of Columbia Omnibus Authorization Act. (Public 
        Law 109-356). October 16, 2006.

    Amends the District of Columbia Home Rule Act to allow an 
increase in the amount appropriated as District of Columbia 
funds under a budget approved by an Act of Congress by a 
maximum aggregate amount of: (1) 25%, in the case of amounts 
allocated as ``Other-Type Funds''; and (2) 6%, in the case of 
any other amounts allocated under the budget. Authorizes the 
District to enter into an interstate compact to establish a 
joint State commission as an instrumentality of the District to 
establish uniform insurance product regulations among the 
participating States. Requires the District to require all 
taxicabs licensed in the District to charge fares by a metered 
system; authorizes the Mayor to exempt the District from such 
requirement by issuing an executive order that specifically 
States that the District opts out of it. Amends the District of 
Columbia Code to modify the duties of the Register of Wills to 
require that all wills proved before the Register or the court 
and other matters required by law be recorded in electronic or 
other format. Increases the cap on rates of pay for nonjudicial 
employees of the DC courts. Authorizes the DC courts, subject 
to specified conditions, to conduct proceedings outside of the 
District during emergencies. Extends Federal enhanced dental 
and vision benefits to DC court employees. Amends the District 
of Columbia Code to treat nonjudicial and judicial DC court 
personnel as Federal personnel for purposes of such benefits. 
Revises requirements for the CFO, and the CFO's duties and term 
of office. Amends the General Legislative Procedures Act of 
1975 to require, except for emergency declaration, ceremonial, 
confirmation, and sense of the Council resolutions, all 
permanent bills and resolutions to be accompanied by a fiscal 
impact statement before final adoption by the Council.

H.R. 3699--To provide for the sale, acquisition, conveyance, and 
        exchange of certain real property in the District of Columbia 
        to facilitate the utilization, development, and redevelopment 
        of such property, and for other purposes. (Public Law 109-396). 
        Dec. 15, 2006.

    Directs the General Services Administration to convey to 
the District of Columbia U.S. Reservation 13, subject to 
specified conditions, and the Old Naval Hospital, on the day on 
which the District conveys to GSA certain real property on the 
West Campus of Saint Elizabeths Hospital. Transfers 
administrative jurisdiction over certain conveyed properties 
from the District to the Secretary of the Interior for 
administration by the Director of the National Park Service; 
retains for the District administrative jurisdiction over the 
subsurface area beneath a specified parcel; transfers 
administrative jurisdiction over other specified properties 
from the United States to the District. Requires certain 
property to be used as the site for the establishment of a 
memorial to honor disabled veterans of the U.S. armed forces. 
Requires the Secretary to convey U.S. Reservation 174 to the 
District upon the District's enactment of a final plan that 
meets specified requirements for the development of the former 
Convention Center Site. Requires NPS to convey Poplar Point to 
the District after the District adopts a land-use plan for it 
meeting specified requirements.

H.R. 4057--To provide that attorneys employed by the Department of 
        Justice shall be eligible for compensatory time off for travel 
        under section 5550b of title 5, United States Code. (Public Law 
        109-425). Dec. 20, 2006.

    Makes attorneys employed by the Department of Justice 
(including assistant U.S. attorneys) eligible for compensatory 
time off for travel.

H.R. 4416--To reauthorize permanently the use of penalty and franked 
        mail in efforts relating to the location and recovery of 
        missing children. (Public Law 109-426). Dec. 20, 2006.

    Makes permanent the authority to use official (penalty and 
franked) mail in efforts relating to the location and recovery 
of missing children.

S. 4046--To extend oversight and accountability related to United 
        States reconstruction funds and efforts in Iraq by extending 
        the termination date of the Office of the Special Inspector 
        General for Iraq Reconstruction. (Public Law 109-440). Dec. 20, 
        2006.

    Amends the John Warner National Defense Authorization Act 
for Fiscal Year 2007 to change the date for termination of the 
Office of the Special Inspector General for Iraq 
Reconstruction. Provides that the Office shall terminate 10 
months after 80% of the funds appropriated or made available 
for the Iraq Relief and Reconstruction Fund have been expended. 
Requires the Special Inspector General to prepare a final 
forensic audit report on all funds appropriated or made 
available to the Iraq Relief and Reconstruction Fund.

                          Postal Naming Bills

    H.R. 1760--To designate the facility of the United States 
Postal Service located at 215 Martin Luther King, Jr. Boulevard 
in Madison, Wisconsin, as the ``Robert M. La Follette, Sr. Post 
Office Building.'' (Public Law 109-15). June 17, 2005.
    H.R. 120--To designate the facility of the United States 
Postal Service located at 30777 Rancho California Road in 
Temecula, California, as the ``Dalip Singh Saund Post Office 
Building.'' (Public Law 109-22). June 17, 2005.
    H.R. 289--To designate the facility of the United States 
Postal Service located at 8200 South Vermont Avenue in Los 
Angeles, California, as the ``Sergeant First Class John 
Marshall Post Office Building.'' (Public Law 109-23). June 17, 
2005.
    H.R. 324--To designate the facility of the United States 
Postal Service located at 321 Montgomery Road in Altamonte 
Springs, Florida, as the ``Arthur Stacey Mastrapa Post Office 
Building.'' (Public Law 109-24). June 17, 2005.
    H.R. 504--To designate the facility of the United States 
Postal Service located at 4960 West Washington Boulevard in Los 
Angeles, California, as the ``Ray Charles Post Office 
Building.'' (Public Law 109-25). June 17, 2005.
    H.R. 627--To designate the facility of the United States 
Postal Service located at 40 Putnam Avenue in Hamden, 
Connecticut, as the ``Linda White-Epps Post Office.'' (Public 
Law 109-26). June 17, 2005.
    H.R. 1072--To designate the facility of the United States 
Postal Service located at 151 West End Street in Goliad, Texas, 
as the ``Judge Emilio Vargas Post Office Building.'' (Public 
Law 109-27). June 17, 2005.
    H.R. 1082--To designate the facility of the United States 
Postal Service located at 120 East Illinois Avenue in Vinita, 
Oklahoma, as the ``Francis C. Goodpaster Post Office 
Building.'' (Public Law 109-28). June 17, 2005.
    H.R. 1236--To designate the facility of the United States 
Postal Service located at 750 4th Street in Sparks, Nevada, as 
the ``Mayor Tony Armstrong Memorial Post Office.'' (Public Law 
109-29). June 17, 2005.
    H.R. 1460--To designate the facility of the United States 
Postal Service located at 6200 Rolling Road in Springfield, 
Virginia, as the ``Captain Mark Stubenhofer Post Office 
Building.'' (Public Law 109-30). June 17, 2005.
    H.R. 1524--To designate the facility of the United States 
Postal Service located at 12433 Antioch Road in Overland Park, 
Kansas, as the ``Ed Eilert Post Office Building.'' (Public Law 
109-31). June 17, 2005.
    H.R. 1542--To designate the facility of the United States 
Postal Service located at 695 Pleasant Street in New Bedford, 
Massachusetts, as the ``Honorable Judge George N. Leighton Post 
Office Building.'' (Public Law 109-32). June 17, 2005.
    H.R. 2326--To designate the facility of the United States 
Postal Service located at 614 West Old County Road in Belhaven, 
North Carolina, as the ``Floyd Lupton Post Office.'' (Public 
Law 109-33). June 17, 2005.
    H.R. 1001--To designate the facility of the United States 
Postal Service located at 301 South Heatherwilde Boulevard in 
Pflugerville, Texas, as the ``Sergeant Byron W. Norwood Post 
Office Building.'' (Public Law 109-36). July 21, 2005.
    S. 571--To designate the facility of the United States 
Postal Service located at 1915 Fulton Street in Brooklyn, New 
York, as the ``Congresswoman Shirley A. Chisholm Post Office 
Building.'' (Public Law 109-50). August 2, 2005.
    S. 775--To designate the facility of the United States 
Postal Service located at 123 W. 7th Street in Holdenville, 
Oklahoma, as the ``Boone Pickens Post Office.'' (Public Law 
109-51). August 2, 2005.
    S. 904--To designate the facility of the United States 
Postal Service located at 1560 Union Valley Road in West 
Milford, New Jersey, as the ``Brian P. Parrello Post Office 
Building.'' (Public Law 109-52). August 2, 2005.
    H.R. 3667--To designate the facility of the United States 
Postal Service located at 200 South Barrington Street in Los 
Angeles, California, as the ``Karl Malden Station.'' (Public 
Law 109-84). October 4, 2005.
    H.R. 2490--To designate the facility of the United States 
Postal Service located at 442 West Hamilton Street, Allentown, 
Pennsylvania, as the ``Mayor Joseph S. Daddona Memorial Post 
Office.'' (Public Law 109-107). November 22, 2005.
    H.R. 3339--To designate the facility of the United States 
Postal Service located at 2061 South Park Avenue in Buffalo, 
New York, as the ``James T. Molloy Post Office Building.'' 
(Public Law 109-109). November 22, 2005.
    H.R. 2062--To designate the facility of the United States 
Postal Service located at 57 West Street in Newville, 
Pennsylvania, as the ``Randall D. Shughart Post Office 
Building.'' (Public Law 109-122). December 1, 2005.
    H.R. 2183--To designate the facility of the United States 
Postal Service located at 567 Tompkins Avenue in Staten Island, 
New York, as the ``Vincent Palladino Post Office.'' (Public Law 
109-123). December 1, 2005.
    H.R. 3853--To designate the facility of the United States 
Postal Service located at 208 South Main Street in Parkdale, 
Arkansas, as the ``Willie Vaughn Post Office.'' (Public Law 
109-124). December 1, 2005.
    S. 1989--To designate the facility of the United States 
Postal Service located at 57 Rolfe Square in Cranston, Rhode 
Island, shall be known and designated as the ``Holly A. 
Charette Post Office.'' (Public Law 109-175). February 27, 
2006.
    H.R. 2113--To designate the facility of the United States 
Postal Service located at 2000 McDonough Street in Joliet, 
Illinois, as the ``John F. Whiteside Joliet Post Office 
Building.'' (Public Law 109-185). March 20, 2006.
    H.R. 2346--To designate the facility of the United States 
Postal Service located at 105 NW Railroad Avenue in Hammond, 
Louisiana, as the ``John J. Hainkel Post Office Building.'' 
(Public Law 109-186). March 20, 2006.
    H.R. 2413--To designate the facility of the United States 
Postal Service located at 1202 1st Street in Humble, Texas, as 
the ``Lillian McKay Post Office Building.'' (Public Law 109-
187). March 20, 2006.
    H.R. 2630--To redesignate the facility of the United States 
Postal Service located at 1927 Sangamon Avenue in Springfield, 
Illinois, as the ``J.M. Dietrich Northeast Annex.'' (Public Law 
109-188). March 20, 2006.
    H.R. 2894--To designate the facility of the United States 
Postal Service located at 102 South Walters Avenue in 
Hodgenville, Kentucky, as the ``Abraham Lincoln Birthplace Post 
Office Building.'' (Public Law 109-189). March 20, 2006.
    H.R. 3256--To designate the facility of the United States 
Postal Service located at 3038 West Liberty Avenue in 
Pittsburgh, Pennsylvania, as the ``Congressman James Grove 
Fulton Memorial Post Office Building.'' (Public Law 109-190). 
March 20, 2006.
    H.R. 3368--To designate the facility of the United States 
Postal Service located at 6483 Lincoln Street in Gagetown, 
Michigan, as the ``Gagetown Veterans Memorial Post Office.'' 
(Public Law 109-191). March 20, 2006.
    H.R. 3439--To designate the facility of the United States 
Postal Service located at 201 North 3rd Street in Smithfield, 
North Carolina, as the ``Ava Gardner Post Office.'' (Public Law 
109-192). March 20, 2006.
    H.R. 3548--To designate the facility of the United States 
Postal Service located on Franklin Avenue in Pearl River, New 
York, as the ``Heinz Ahlmeyer, Jr. Post Office Building.'' 
(Public Law 109-193). March 20, 2006.
    H.R. 3703--To designate the facility of the United States 
Postal Service located at 8501 Philatelic Drive in Spring Hill, 
Florida, as the ``Staff Sergeant Michael Schafer Post Office 
Building.'' (Public Law 109-194). March 20, 2006.
    H.R. 3770--To designate the facility of the United States 
Postal Service located at 205 West Washington Street in Knox, 
Indiana, as the ``Grant W. Green Post Office Building.'' 
(Public Law 109-195). March 20, 2006.
    H.R. 3825--To designate the facility of the United States 
Postal Service located at 770 Trumbull Drive in Pittsburgh, 
Pennsylvania, as the ``Clayton J. Smith Memorial Post Office 
Building.'' (Public Law 109-196). March 20, 2006.
    H.R. 3830--To designate the facility of the United States 
Postal Service located at 130 East Marion Avenue in Punta 
Gorda, Florida, as the ``U.S. Cleveland Post Office Building.'' 
(Public Law 109-197). March 20, 2006.
    H.R. 3989--To designate the facility of the United States 
Postal Service located at 37598 Goodhue Avenue in Dennison, 
Minnesota, as the ``Albert H. Quie Post Office.'' (as amended) 
(Public Law 109-198). March 20, 2006.
    H.R. 4053--To designate the facility of the United States 
Postal Service located at 545 North Rimsdale Avenue in Covina, 
California, as the ``Lillian Kinkella Keil Post Office.'' 
(Public Law 109-199). March 20, 2006.
    H.R. 4107--To designate the facility of the United States 
Postal Service located at 1826 Pennsylvania Avenue in 
Baltimore, Maryland, as the ``Maryland State Delegate Lena K. 
Lee Post Office Building.'' (Public Law 109-200). March 20, 
2006.
    H.R. 4295--To designate the facility of the United States 
Postal Service located at 12760 South Park Avenue in Riverton, 
Utah, as the ``Mont and Mark Stephensen Veterans Memorial Post 
Office Building.'' (Public Law 109-202). March 20, 2006.
    S. 2089--To designate the facility of the United States 
Postal Service located at 1271 North King Street in Honolulu, 
Oahu, Hawaii, as the ``Hiram L. Fong Post Office Building.'' 
(Public Law 109-203). March 20, 2006.
    S. 2064--To designate the facility of the United States 
Postal Service located at 122 South Bill Street in 
Francesville, Indiana, as the Malcolm Melville ``Mac'' Lawrence 
Post Office. (Public Law 109-207). March 23, 2006.
    S. 1445--To designate the facility of the United States 
Postal Service located at 520 Colorado Avenue in Arriba, 
Colorado, as the ``William H. Emery Post Office.'' (Public Law 
109-237). June 23, 2006.
    H.R. 2977--To designate the facility of the United States 
Postal Service located at 306 2nd Avenue in Brockway, Montana, 
as the ``Paul Kasten Post Office Building.'' (Public Law 109-
252). August 1, 2006.
    H.R. 3440--To designate the facility of the United States 
Postal Service located at 100 Avenida RL Rodriguez in Bayamon, 
Puerto Rico, as the ``Dr. Jose Celso Barbosa Post Office 
Building.'' (Public Law 109-253). August 1, 2006.
    H.R. 3549--To designate the facility of the United States 
Postal Service located at 210 West 3rd Avenue in Warren, 
Pennsylvania, as the ``William F. Clinger, Jr. Post Office 
Building.'' (Public Law 109-254). August 1, 2006.
    H.R. 3934--To designate the facility of the United States 
Postal Service located at 80 Killian Road in Massapequa, New 
York, as the ``Gerard A. Fiorenza Post Office Building.'' 
(Public Law 109-255). August 1, 2006.
    H.R. 4101--To designate the facility of the United States 
Postal Service located at 170 East Main Street in Patchogue, 
New York, as the ``Lieutenant Michael P. Murphy Post Office 
Building.'' (Public Law 109-256). August 1, 2006.
    H.R. 4108--To designate the facility of the United States 
Postal Service located at 3000 Homewood Avenue in Baltimore, 
Maryland, as the ``State Senator Verda Welcome and Dr. Henry 
Welcome Post Office Building.'' (Public Law 109-257). August 1, 
2006.
    H.R. 4456--To designate the facility of the United States 
Postal Service located at 2404 Race Street in Jonesboro, 
Arkansas, as the ``Hattie W. Caraway Station.'' (Public Law 
109-258). August 2, 2006.
    H.R. 4561--To designate the facility of the United States 
Postal Service located at 8624 Ferguson Road in Dallas, Texas, 
as the ``Francisco `Pancho' Medrano Post Office Building.'' 
(Public Law 109-259). August 2, 2006.
    H.R. 4688--To designate the facility of the United States 
Postal Service located at 1 Boyden Street in Badin, North 
Carolina, as the ``Mayor John Thompson `Tom' Garrison Memorial 
Post Office.'' (Public Law 109-260). August 2, 2006.
    H.R. 4786--To designate the facility of the United States 
Postal Service located at 535 Wood Street in Bethlehem, 
Pennsylvania, as the ``H. Gordon Payrow Post Office Building.'' 
(Public Law 109-261). August 2, 2006.
    H.R. 4995--To designate the facility of the United States 
Postal Service located at 7 Columbus Avenue in Tuckahoe, New 
York, as the ``Ronald Bucca Post Office.'' (Public Law 109-
262). August 2, 2006.
    H.R. 5245--To designate the facility of the United States 
Postal Service located at 1 Marble Street in Fair Haven, 
Vermont, as the ``Matthew Lyon Post Office Building.'' (Public 
Law 109-263). August 2, 2006.
    H.R. 4646--To designate the facility of the United States 
Postal Service located at 7320 Reseda Boulevard in Reseda, 
California, as the ``Coach John Wooden Post Office Building.'' 
(Public Law 109-273). August 17, 2006.
    H.R. 4811--To designate the facility of the United States 
Postal Service located at 215 West Industrial Park Road in 
Harrison, Arkansas, as the ``John Paul Hammerschmidt Post 
Office Building.'' (Public Law 109-274). August 17, 2006.
    H.R. 4962--To designate the facility of the United States 
Postal Service located at 100 Pitcher Street in Utica, New 
York, as the ``Captain George A. Wood Post Office Building.'' 
(Public Law 109-275). August 17, 2006.
    H.R. 5104--To designate the facility of the United States 
Postal Service located at 1750 16th Street South in St. 
Petersburg, Florida, as the ``Morris W. Milton Post Office.'' 
(Public Law 109-276). August 17, 2006.
    H.R. 5107--To designate the facility of the United States 
Postal Service located at 1400 West Jordan Street in Pensacola, 
Florida, as the ``Earl D. Hutto Post Office Building.'' (Public 
Law 109-277). August 17, 2006.
    H.R. 5169--To designate the facility of the United States 
Postal Service located at 1310 Highway 64 NW in Ramsey, 
Indiana, as the ``Wilfred Edward `Cousin Willie' Sieg, Sr. Post 
Office.'' (Public Law 109-278). August 17, 2006.
    H.R. 5540--To designate the facility of the United States 
Postal Service located at 217 Southeast 2nd Street in Dimmitt, 
Texas, as the ``Sergeant Jacob Dan Dones Post Office.'' (Public 
Law 109-279). August 17, 2006.
    S. 1275--To designate the facility of the United States 
Postal Service located at 7172 North Tongass Highway, Ward 
Cove, Alaska, as the ``Alice R. Brusich Post Office Building.'' 
(Public Law 109-300). October 5, 2006.
    S. 1323--To designate the facility of the United States 
Postal Service located on Lindbald Avenue, Girdwood, Alaska, as 
the ``Dorothy and Connie Hibbs Post Office Building.'' (Public 
Law 109-301). October 5, 2006.
    S. 2690--To designate the facility of the United States 
Postal Service located at 8801 Sudley Road in Manassas, 
Virginia, as the ``Harry J. Parrish Post Office.'' (Public Law 
109-302). October 5, 2006.S. 3187--To designate the Post Office 
located at 5755 Post Road, East Greenwich, Rhode Island, as the 
``Richard L. Cevoli Post Office.'' (Public Law 109-310). 
October 6, 2006.
    S. 3613--To designate the facility of the United States 
Postal Service located at 2951 New York Highway 43 in Averill 
Park, New York, as the ``Major George Quamo Post Office 
Building.'' (Public Law 109-311). October 6, 2006.
    H.R. 5664--To designate the facility of the United States 
Postal Service located at 110 Cooper Street in Babylon, New 
York, as the ``Jacob Samuel Fletcher Post Office Building.'' 
(Public Law 109-315). October 10, 2006.
    H.R. 4109--To designate the facility of the United States 
Postal Service located at 6101 Liberty Road in Baltimore, 
Maryland, as the ``United States Representative Parren J. 
Mitchell Post Office.'' (Public Law 109-327). October 12, 2006.
    H.R. 4674--To designate the facility of the United States 
Postal Service located at 110 North Chestnut Street in Olathe, 
Kansas, as the ``Governor John Anderson, Jr. Post Office 
Building.'' (Public Law 109-328). October 12, 2006.
    H.R. 5504--To designate the facility of the United States 
Postal Service located at 6029 Broadmoor Street in Mission, 
Kansas, as the ``Larry Winn, Jr. Post Office Building.'' 
(Public Law 109-330). October 12, 2006.
    H.R. 6033--To designate the facility of the United States 
Postal Service located at 39-25 61st Street in Woodside, New 
York, as the ``Thomas J. Manton Post Office Building.'' (Public 
Law 109-334). October 12, 2006.
    H.R. 4768--To designate the facility of the United States 
Postal Service located at 777 Corporation Street in Beaver, 
Pennsylvania, as the ``Robert Linn Memorial Post Office 
Building.'' (Public Law 109-345). October 13, 2006.
    H.R. 4805--To designate the facility of the United States 
Postal Service located at 105 North Quincy Street in Clinton, 
Illinois, as the ``Gene Vance Post Office Building.'' (Public 
Law 109-346). October 13, 2006.
    H.R. 5428--To designate the facility of the United States 
Postal Service located at 202 East Washington Street in Morris, 
Illinois, as the ``Joshua A. Terando Morris Post Office 
Building.'' (Public Law 109-349). October 13, 2006.
    H.R. 5434--To designate the facility of the United States 
Postal Service located at 40 South Walnut Street in 
Chillicothe, Ohio, as the ``Larry Cox Post Office.'' (Public 
Law 109-350). October 13, 2006.
    H.R. 4768--To designate the facility of the United States 
Postal Service located at 777 Corporation Street in Beaver, 
Pennsylvania, as the ``Robert Linn Memorial Post Office 
Building.'' (Public Law 109-345). Oct. 13, 2006.
    H.R. 4805--To designate the facility of the United States 
Postal Service located at 105 North Quincy Street in Clinton, 
Illinois, as the ``Gene Vance Post Office Building.'' (Public 
Law 109-346). Oct. 13, 2006.
    H.R. 5428--To designate the facility of the United States 
Postal Service located at 202 East Washington Street in Morris, 
Illinois, as the ``Joshua A. Terando Morris Post Office 
Building.'' (Public Law 109-349). Oct. 13, 2006.
    H.R. 5434--To designate the facility of the United States 
Postal Service located at 40 South Walnut Street in 
Chillicothe, Ohio, as the ``Larry Cox Post Office.'' (Public 
Law 109-350). Oct. 13, 2006.
    H.R. 1472--To designate the facility of the United States 
Postal Service located at 167 East 124th Street in New York, 
New York, as the ``Tito Puente Post Office Building.'' (Public 
Law 109-397). Dec. 18, 2006.
    H.R. 4246--To designate the facility of the United States 
Postal Service located at 8135 Forest Lane in Dallas, Texas, as 
the ``Dr. Robert E. Price Post Office Building.'' (Public Law 
109-398). Dec. 18, 2006.
    H.R. 4720--To designate the facility of the United States 
Postal Service located at 200 Gateway Drive in Lincoln, 
California, as the ``Beverly J. Wilson Post Office Building.'' 
(Public Law 109-399). Dec. 18, 2006.
    H.R. 5108--To designate the facility of the United States 
Postal Service located at 1213 East Houston Street in 
Cleveland, Texas, as the ``Lance Corporal Robert A. Martinez 
Post Office Building.'' (Public Law 109-400). Dec. 18, 2006.
    H.R. 5736--To designate the facility of the United States 
Postal Service located at 101 Palafox Place in Pensacola, 
Florida, as the ``Vincent J. Whibbs, Sr. Post Office 
Building.'' (Public Law 109-402). Dec. 18, 2006.
    H.R. 5857--To designate the facility of the United States 
Postal Service located at 1501 South Cherrybell Avenue in 
Tucson, Arizona, as the ``Morris K. `Mo' Udall Post Office 
Building.'' (Public Law 109-403). Dec. 18, 2006.
    H.R. 5923--To designate the facility of the United States 
Postal Service located at 29-50 Union Street in Flushing, New 
York, as the ``Dr. Leonard Price Stavisky Post Office.'' 
(Public Law 109-404). Dec. 18, 2006.
    H.R. 5989--To designate the facility of the United States 
Postal Service located at 10240 Roosevelt Road in Westchester, 
Illinois, as the ``John J. Sinde Post Office Building.'' 
(Public Law 109-405). Dec. 18, 2006.
    H.R. 5990--To designate the facility of the United States 
Postal Service located at 415 South 5th Avenue in Maywood, 
Illinois, as the ``Wallace W. Sykes Post Office Building.'' 
(Public Law 109-406). Dec. 18, 2006.
    H.R. 6078--To designate the facility of the United States 
Postal Service located at 307 West Wheat Street in Woodville, 
Texas, as the ``Chuck Fortenberry Post Office Building.'' 
(Public Law 109-407). Dec. 18, 2006.
    H.R. 6102--To designate the facility of the United States 
Postal Service located at 200 Lawyers Road, NW in Vienna, 
Virginia, as the ``Captain Christopher Petty Post Office 
Building.'' (Public Law 109-408). Dec. 18, 2006.
    H.R. 6151--To designate the facility of the United States 
Postal Service located at 216 Oak Street in Farmington, 
Minnesota, as the ``Hamilton H. Judson Post Office.'' (Public 
Law 109-409). Dec. 18, 2006.
    S. 1820--To designate the facility of the United States 
Postal Service located at 6110 East 51st Place in Tulsa, 
Oklahoma, shall be known and designated as the ``Dewey F. 
Barlett Post Office.'' (Public Law 109-411). Dec. 18, 2006.
    S. 4050--To designate the facility of the United States 
Postal Service located at 103 East Thompson Street in 
Thomaston, Georgia, as the ``Sergeant First Class Robert Lee 
'Bobby' Hollar, Jr. Post Office Building.'' (Public Law 109-
413). Dec. 18, 2006.

                     VIII. Presidential Nominations

    The committeee received a total of 65 Presidential 
nominations during the 109th Congress. Of these, 49 were 
reported favorably and confirmed by the Senate, 2 were 
discharged from Committee and confirmed, 2 were withdrawn by 
the President, and 12 were not acted upon by the Committee. 
Hearing dates and reports on these nominations appear in 
Section IV. Hearings.

    The following 49 nominations were favorably reported by the 
Committee and confirmed by the Senate:

      Louis J. Giuliano, of New York, to be a Governor of the 
United States Postal Service, United States Postal Service; for 
a term expiring December 8, 2014 (Reappointment). Confirmed 
June 15, 2005.
      Tony Hammond, of Virginia, to be a Commissioner of the 
Postal Rate Commission, Postal Rate Commission, for a term 
expiring October 14, 2010 (Reappointment). Confirmed May 26, 
2005.
      Louis J. Giuliano, of New York, to be a Governor of the 
United States Postal Service, United States Postal Service; for 
a term expiring December 8, 2005; vice Carolyn L. Gallagher. 
Confirmed June 15, 2005.
      Carolyn L. Gallagher, of Texas, to be a Governor of the 
United States Postal Service, United States Postal Service; for 
the remainder of the term expiring December 8, 2009; vice Louis 
J. Giuliano, resigned. Confirmed June 15, 2005.
      Allen Weinstein, of Maryland, to be Archivist of the 
United States, National Archives and Records Administration; 
vice John W. Carlin. Confirmed February 10, 2005.
      Brian David Miller, of Virginia, to be Inspector General, 
General Services Administration; vice Daniel R. Levinson. 
Confirmed July 22, 2005.
      Stephen Thomas Conboy, of Virginia, to be United States 
Marshal for the Superior Court of the District of Columbia for 
a term of four years, vice Todd Walther Dillard. Confirmed 
November 16, 2006.
      Harold Damelin, of Virginia, to be Inspector General, 
Department of the Treasury; vice Jeffrey Rush, Jr., resigned. 
Confirmed March 17, 2005.
      Howard J. Krongard, of New Jersey, to be Inspector 
General, Department of State; vice Clark Kent Ervin, resigned. 
Confirmed April 27, 2005.
      Daniel R. Levinson, of Maryland, to be Inspector General, 
Department of Health and Human Service; vice Janet Rehnquist, 
resigned. Confirmed June 8, 2005.
      Michael Chertoff, of New Jersey, to be Secretary of 
Homeland Security, Department of Homeland Security; vice Thomas 
J. Ridge, resigned. Confirmed February 15, 2005.
      Jennifer M. Anderson, of the District of Columbia, to be 
an Associate Judge of the Superior Court of the District of 
Columbia for the term of fifteen years, The Judiciary; vice 
Steffen W. Graae, retired. Confirmed August 3, 2006.
      Laura A. Cordero, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for the term of fifteen years, The Judiciary; vice 
Shellie Fountain Bowers, retired. Confirmed June 22, 2005.
      Juliet JoAnn McKenna, of the District of Columbia, to be 
an Associate Judge of the Superior Court of the District of 
Columbia, for the term of fifteen years, The Judiciary; vice 
Nan R. Shuker, retired. Confirmed October 7, 2005.
      A. Noel Anketell Kramer, of the District of Columbia, to 
be an Associate Judge of the District of Columbia Court of 
Appeals for the term of fifteen years, The Judiciary; vice John 
Montague Steadman, retired. Confirmed June 22, 2005.
      Jon T. Rymer, to be Inspector General, Federal Deposit 
Insurance Corporation, Federal Deposit Insurance Corporation; 
vice Gaston L. Gianni, Jr. Confirmed June 22, 2006.
      Hon. Michael P. Jackson, of Virginia, to be Deputy 
Secretary of Homeland Security, Department of Homeland 
Security; vice James M. Loy, resigned. Confirmed March 10, 
2005.
      Linda Morrison Combs, of North Carolina, to be 
Controller, Office of Federal Financial Management, Office of 
Management and Budget, Executive Office of the President; vice 
Linda M. Springer.Confirmed June 24, 2005.
      Linda M. Springer, of Pennsylvania, to be Director of the 
Office of Personnel Management for a term of four years, 
Executive Office of the President; vice Kay Coles James, 
resigned. Confirmed June 24, 2005.
      Philip J. Perry, of Virginia, to be General Counsel, 
Department of Homeland Security; vice Joe D. Whitley, resigned. 
Confirmed June 8, 2005.
      Richard L. Skinner, of Virginia, to be Inspector General, 
Department of Homeland Security; vice Clark Kent Ervin. 
Confirmed July 28, 2005.
      Edmund S. ``Skip'' Hawley, of California, to be an 
Assistant Secretary of Homeland Security, Department of 
Homeland Security; vice David M. Stone, resigned. Confirmed 
July 22, 2005.
      John R. Fisher, of the District of Columbia, to be an 
Associate Judge of the District of Columbia Court of Appeals, 
for the term of fifteen years, The Judiciary; vice Annice M. 
Wagner, retired. Confirmed October 7, 2005.
      Mary M. Rose, of North Carolina, to be a Member of the 
Merit Systems Protection Board, Merit Systems Protection Board, 
for a term of seven years expiring March 1, 2011; vice Susanne 
T. Marshall, term expired. Confirmed December 17, 2005.
      Colleen Duffy Kiko, of Virginia, to be General Counsel of 
the Federal Labor Relations Authority, Federal Labor Relations 
Authority for a term of five years; vice Peter Eide. Confirmed 
October 7, 2005.
      Eric M. Thorson, of Virginia, to be Inspector General, 
Small Business Administration, vice Harold Damelin, resigned. 
Confirmed March 31, 2006.
       Stewart A. Baker, of Virginia, to be an Assistant 
Secretary of Homeland Security (New Position). Confirmed 
October 7, 2005.
      George J. Opfer, of Virginia, to be Inspector General, 
Department of Veterans Affairs; vice Richard J. Griffin. 
Confirmed November 10, 2005.
      Donald A. Gambatesa, of Virginia, to be Inspector 
General, United States Agency for International Development; 
vice Everett L. Mosley. Confirmed December 17, 2005.
      George W. Foresman, to be Under Secretary for 
Preparedness, Department of Homeland Security; vice Frank 
Libutti, resigned. Confirmed December 17, 2005.
      Mark D. Acton, of Kentucky, to be Commissioner of the 
Postal Rate Commission, Postal Rate Commission for a term 
expiring October 14, 2010, vice Dana Bruce Covington, Sr., term 
expired. Confirmed August 3, 2006.
      Uttam Dhillon, of California, to be Director of the 
Office of Counternarcotics Enforcement, Department of Homeland 
Security. Confirmed May 12, 2006.
      David L. Norquist, to be Chief Financial Officer, 
Department of Homeland Security, Department of Homeland 
Security; vice Andrew B. Maner. Confirmed May 26, 2006.
      Robert Irwin Cusick, Jr., of Kentucky, to be Director of 
the Office of Government Ethics, Office of Personnel Management 
for a term of five years, vice Amy L. Comstock, resigned. 
Confirmed May 26, 2006.
      Katherine C. Tobin, of New York, to be a Governor of the 
United States Postal Service for a term expiring December 8, 
2012, vice S. David Fineman, term expired. Confirmed August 3, 
2006.
      Mickey D. Barnett, to be Governor of the United States 
Postal Service, United States Postal Service; vice for a term 
expiring December 8, 2013, vice Robert F. Rider, term expired. 
Confirmed August 3, 2006.
      R. David Paulison, to be Under Secretary for Federal 
Emergency Management, Department of Homeland Security; vice 
Michael D. Brown, resigned. Confirmed May 26, 2006.
      Lurita Alexis Doan, of Virginia, to be Administrator of 
General Services, vice Stephen A. Perry, resigned. Confirmed 
May 26, 2006.
      Paul A. Denett, to be Administrator for Federal 
Procurement Policy, Executive Office of the President; vice 
David Safavian. Confirmed August 3, 2006.
      Robert J. Portman, of Ohio, to be Director of the Office 
of Management and Budget, vice Joshua B. Bolten. Confirmed May 
26, 2006.
      Ellen C. Williams, of Kentucky, to be a Governor of the 
United States Postal Service, vice for the remainder of the 
term expiring December 8, 2007, vice John S. Gardner. Confirmed 
August 3, 2006.
      Phyllis D. Thompson, to be Associate Judge of the 
District of Columbia Court of Appeals, The Judiciary; vice John 
A. Terry, retired. Confirmed August 3, 2006.
      Anna Blackburne-Rigsby, to be Associate Judge of the 
District of Columbia Court of Appeals, The Judiciary; vice 
Frank Ernest Schwelb, retiring. Confirmed August 3, 2006.
      Stephen S. McMillin, to be Deputy Director of the Office 
of Management and Budget, Executive Office of the President; 
vice Joel David Kaplan. Confirmed July 28, 2006.
      James H. Bilbray, of Nevada, to be a Governor of the 
United States Postal Service for a term expiring December 8, 
2015 (Reappointment). Confirmed December 9, 2006.
      Gerald Walpin, of New York, to be Inspector General, 
Corporation for National and Community Service, vice J. Russell 
George. Confirmed December 9, 2006.
      Thurgood Marshall, Jr., of Virginia, to be Governor of 
the United States Postal Service for a term expiring December 
8, 2011, vice Ned R. McWherter, term expired. Confirmed 
December. 9, 2006.
      Dan Gregory Blair, of the District of Columbia, to be 
Commissioner, Postal Rate Commission for a term expiring 
October 14, 2012, vice George A. Omas, term expired. Confirmed 
December 9, 2006.
      Paul A. Schneider, of Maryland, to be Under Secretary for 
Management, Department of Homeland Security, vice Janet Hale, 
resigned. Confirmed December 9, 2006.

    The following two nominations were discharged from 
Committee:

      James H. Bilbray, of Nevada, to be a Governor of the 
United States Postal Service for the remainder of the term 
expiring December 8, 2006, vice John F. Walsh, resigned. 
Discharged August 3, 2006.
      Calvin L. Scovel, to be Inspector General, Department of 
Transportation; vice Kenneth M. Mead, resigned. Discharged 
September 29, 2006.

    The following two nominations were withdrawn by the 
President:

      Edward L. Flippen, of Virginia, to be Inspector General, 
Corporation for National and Community Service; vice J. Russell 
George. Nomination withdrawn December 13, 2005.
      Tracy A. Henke, of Missouri, to be Executive Director of 
the Office of State and Local Government Coordination and 
Preparedness, Department of Homeland Security, vice C. Suzanne 
Mencer, resigned. Withdrawn December 6, 2006.

    The following 12 nominations were not acted upon by the 
Committee. Each was returned to the President under provisions 
of Senate Rule XXXI, paragraph 6, of the Standing rules of the 
Senate:

      Tracy A. Henke, of Missouri, to be Executive Director of 
the Office of State and Local Government Coordination and 
Preparedness, Department of Homeland Security, vice C. Suzanne 
Mencer, resigned. Returned August 3, 2006.
      Tracy A. Henke, of Missouri, to be Executive Director of 
the Office of State and Local Government Coordination and 
Preparedness, Department of Homeland Security; vice C. Suzanne 
Mencer, resigned, to which position she was appointed during 
the last recess of the Senate. Returned August 3, 2006.
      Alex A. Beehler, of Maryland, to be Inspector General, 
Environmental Protection Agency, vice Nikki Rush Tinsley, 
resigned. Returned December 9, 2006.
      Wayne Cartwright Beyer, of New Hampshire, to be a Member 
of the Federal Labor Relations Authority for a term of five 
years expiring July 1, 2010, vice Othoniel Armendariz. Returned 
December 9, 2006.
      Gregory B. Cade, of Virginia, to be Administrator of the 
United States Fire Administration, Department of Homeland 
Security, vice R. David Paulison, resigned. Returned December 
9, 2006.
      Carol A. Dalton, of the District of Columbia, to be 
Associate Judge of the Superior Court of the District of 
Columbia for the term of fifteen years, vice A. Noel Anketell 
Kramer, elevated. Returned December 9, 2006.
      Susan E. Dudley, of Virginia, to be Administrator of the 
Office of Information and Regulatory Affairs, Office of 
Management and Budget, vice John D. Graham, resigned. Returned 
December 9, 2006.
      S. Pamela Gray, of the District of Columbia, to be 
Associate Judge of the Superior Court of the District of 
Columbia for the term of fifteen years, vice Susan Rebecca 
Holmes, retired. Returned December 9, 2006.
      Julie L. Myers, of Kansas, to be an Assistant Secretary 
of Homeland Security, Department of Homeland Security; vice 
Michael J. Garcia. Returned December 9, 2006.
      Julie L. Myers, of Kansas, to be an Assistant Secretary 
of Homeland Security, vice Michael J. Garcia, resigned, to 
which position she was appointed during the last recess of the 
Senate. Returned December 9, 2006.
      Heidi M. Pasichow, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for the term of fifteen years, vice Anna Blackburne-
Rigsby, elevated. Returned December 9, 2006.
      Ellen C. Williams, of Kentucky, to be a Governor of the 
United States Postal Service for a term expiring December 8, 
2016 (Reappointment). Returned December 9, 2006.

                  IX. ACTIVITIES OF THE SUBCOMMITTEES

             SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

               GOVERNMENT INFORMATION, AND INTERNATIONAL

                                SECURITY

                          Chairman: Tom Coburn

               Ranking Minority Member: Thomas R. Carper

                              I. Hearings

    The Subcommittee on Financial Management, the Budget, and 
International Security held the following 49 hearings during 
the 109th Congress:
An Assessment of the President's Management Agenda (April 21, 2005)
    The purpose of this hearing was to discuss current efforts 
by the Administration to strengthen the management and 
accountability of Federal programs. The Subcommittee is hoping 
to ensure that taxpayer dollars are spent wisely and 
efficiently. This year the Federal Government is expected to 
spend almost $2.5 trillion, making our Federal budget larger 
than the economies of Canada, Mexico, and Australia combined. 
Washington will spend more than $22,000 per American household. 
The American public has entrusted both Congress and the 
President with ensuring that those dollars are spent wisely. 
The Office of Management and Budget reported how they intend to 
meet the President's goals of reducing improper payments.
    Witnesses: Hon. Clay Johnson, III, Deputy Director for 
Management, Office of Management and Budget; and Hon. David M. 
Walker, Comptroller General of the United States, U.S. 
Government Accountability Office.
Examining USAID's Anti-Malaria Policies (May 12, 2005)
    The purpose of this hearing is to review USAID's policies 
and spending to fight malaria around the world. Despite a sharp 
increase in USAID funds to fight malaria over the last 7 years, 
there has been an increase in the number of deaths from the 
disease. Nearly 3,000 people a day die from malaria, and women 
and children are the most susceptible. USAID does not have a 
centralized data system to track how money is spent. While 
malaria treatment is simple and inexpensive ($1.20 per child) 
most of USAID's malaria budget goes to conferences and 
technical assistance to talk about disease. Resources should go 
toward saving lives rather than bureaucratic programs related 
costs.
    Witnesses: Hon. Sam Brownback, a U.S. Senator from the 
State of Kansas; Michael Miller, Deputy Assistant 
Administrator, Bureau of Global Health, U.S. Agency for 
International Development; Roger Bate, Ph.D., Resident Fellow, 
American Enterprise Institute, and U.S. Director, Africa 
Fighting Malaria; Amir Attaran, Associate Fellow, Royal 
Institute of International Affairs, London, England, and Canada 
Research Chair, Institute of Population Health and Faculty of 
Law, University of Ottawa, Canada; and Carlos C. ``Kent'' 
Campbell, M.D., Program Director, Malaria Control and 
Evaluation Program in Africa.
Overview of the Competitive Effects of Specialty Hospitals (May 24, 
        2005)
    The hearing focused on the financial benefits that accrue 
to Medicare from the presence of specialty hospitals. The 
Subcommittee discussed whether or not the moratorium imposed 
upon specialty hospitals by the Medicare Modernization Act 
should be made permanent. The prohibition against specialty 
hospitals impedes competition which then results in lower 
quality of care at a higher cost. Two studies have shown 
specialty hospitals pose no threat to community hospitals and 
result in high quality care and patient satisfaction. If 
Medicare and Medicaid are to remain viable their payment 
systems must be fixed. Community hospitals routinely use 
overpayments on some cases to ``cross-subsidize'' less 
profitable cases. The issue is whether or not Congress will 
allow true competition by permitting specialty hospitals to 
participate in Federal health programs.
    Witnesses: John Graubert, Principal Deputy General Counsel, 
Federal Trade Commission; Mark E. Miller, Executive Director, 
Medicare Payment Advisory Commission; Regina E. Herzligner, 
Ph.D., Nancy R. McPherson Professor of Business Administration, 
Harvard Business School, Boston, Massachusetts; Stan Pelofsky, 
M.D., President, Neuroscience Specialists, and Physician Owner, 
Oklahoma Spine Hospital, Oklahoma City, Oklahoma; John T. 
Thomas, Senior Vice President and General Counsel, Baylor 
Health Care System, Dallas-Fort Worth, Texas; James E. Cain, 
M.D., Practice in Family Medicine, Lampasas County, Texas; Ed 
Jungbluth, Heart Patient, Heart Hospital of New Mexico, 
Albuquerque, New Mexico; and William G. Pleseted, III, M.D., 
Immediate Past Chair, Board of Trustees, American Medical 
Association.
An Assessment of Federal Funding for Private Research and Development 
        (May 26, 2005)
    The purpose of this hearing was to focus on the 
effectiveness of Federal financing of private research and 
development. Other issues discussed included whether some 
Federal programs such as the advanced technology programs 
result in the development of new technologies or merely 
displace private investment. Since 1990, Fortune 500 companies 
who do not need Federal subsidies have received over $730 
million from the Advanced Technology Program (ATP). Taxpayers 
are being forced to pay for research conducted by billion 
dollar corporations. The U.S. Government Accountability Office 
(GAO) found it unlikely that ATP can ``avoid funding research 
already being pursued by the private sector in the same time 
period.'' The Office of Management and Budget (OMB) found that 
ATP does not address a specific need and is not designed to 
make a unique contribution. The elimination of this Federal 
handout would allow taxpayer money to go to more necessary and 
beneficial programs.
    Witnesses: Charles W. Wessner, Ph.D., Director of 
Technology and Innovation, Board on Sciences, Technology and 
Economic Policy, The National Academies; Robin Nazarro, 
Director, Natural Resources and Environment Team, U.S. 
Government Accountability Office; and Brian Reidl, Grover M. 
Hermann Fellow for Federal Budgetary Affairs, The Heritage 
Foundation.
Accountability and Results In Federal Budgeting (June 14, 2005)
    The hearing focused on the specific metrics and tools ( 
e.g., the Program Assessment Rating Tool, or PART) used by the 
Office of Management and Budget (OMB) to determine the 
effectiveness of Federal programs, the advantages and 
disadvantages of using these metrics, and how information 
provided by these metrics is being used to increase 
effectiveness and accountability in Federal budgeting. We must 
ensure the American taxpayer is spared wasteful and redundant 
Federal programs. According to the Office of Management and 
Budget, nearly one-third of all Federal programs have failed to 
demonstrate any results and only 15 percent have been shown to 
be effective. The Program Assessment Rating Tool can be used to 
rate the performance of Federal programs, but the lack of 
Congressional interest thus far has hampered its effectiveness. 
Only eight agencies out of 26 have achieved ``green,'' or 
successful, ratings on the Scorecard for budget and performance 
integration. Out of five ``current status'' rating, OMB itself 
received four unsatisfactory scores. The elimination of 
improper payments continues to be an area of concern among 
agencies.
    Witnesses: Hon. David M. Walker, Comptroller General of the 
United States, U.S. Government Accountability Office; Hon. Clay 
Johnson, III, Deputy Director for Management, Office of 
Management and Budget; Eileen Norcross, M.A., Research Fellow, 
Government Accountability Project, The Mercatus Center of 
George Mason University; and Beryl A. Radin, Ph.D., Professor 
of Government and Public Administration, University of 
Baltimore.
Addressing Disparities in the Federal HIV/AIDS Care Programs (June 23, 
        2005)
    The hearing examined the effectiveness of the Ryan White 
CARE Act funding allocations in ensuring that all Americans 
living with HIV are provided access to core medical services 
and life saving AIDS medications. Nearly 2,000 Americans living 
with HIV are on AIDS Drug Assistance Program (ADAP) waiting 
lists despite the fact that Congress appropriated over $2 
billion for CARE Act services this year. Large sums of Title I 
and Title II funding are not spent at all on ``planning'' and 
other non-essential services. Existing funding structures have 
created geographical disadvantages and disparities: San 
Francisco captured 92 percent of ``hold harmless'' funding in 
2004. The city receives twice the amount per AIDS cases as 
every other EMA and continues to receive funding for dead 
people. While San Francisco must find ways to spend excess 
money on nonessentials, other cities face dire financial 
problems despite growing populations affected by HIV/AIDS. 
Congress must ensure that funding more closely follows the 
epidemic and some States must improve their ability to ensure 
reliable HIV data collection.
    Witnesses: Robert S. Janssen, M.D., Director, Divisions of 
HIV/AIDS Prevention, National Center for HIV, STD, and TB 
Prevention, Coordinating Center for Infectious Diseases, 
Centers for Disease Control and Prevention, U.S. Department of 
Health and Human Services; Deborah Parham Hopson, Ph.D., 
Associate Administrator, HIV/AIDS Bureau, Health Resources and 
Services Administration, U.S. Department of Health and Human 
Services; Michael Montgomery, Chief, Office of AIDS, California 
Department of Health Services, and Chair, National Alliance of 
State and Territorial AIDS Directors; and Marcia G. Crosse, 
Ph.D., Director, Health Care, U.S. Government Accountability 
Office.
Improper Payments: Where Are Truth and Transparency In Federal 
        Financial Reporting? (July 12, 2005)
    The purpose of the hearing was to examine challenges 
Federal agencies face in meeting the requirements of the 
Improper Payments Information Act of 2002, as well as 
incentives for improved reporting, and elimination of, improper 
payments in the Federal Government.
    The magnitude of the problem is still being calculated 
because not all agencies have reported, even though all are 
required to under the Act. Fourteen of 29 Federal agencies are 
reporting $45.1 billion annually in improper payments under the 
Improper Payments Information Act of 2002. Medicare improper 
payments accounts for almost half--$21.7 billion--of the $45.1 
billion agency-wide improper payments estimated. Medicaid is 
still not reporting Improper Payments estimates.
    Witnesses: McCoy Williams, Director, Financial Management 
and Assurance Team, U.S. Government Accountability Office; Hon. 
Linda M. Combs, Controller, Office of Federal Financial 
Management, U.S. Office of Management and Budget; Timothy Hill, 
Director, Office of Financial Management, Centers for Medicare 
and Medicaid Services, U.S. Department of Health and Human 
Services; and Kate Coler, Deputy Under Secretary, Food, 
Nutrition, and Consumer Services, U.S. Department of 
Agriculture.
Securing American Sovereignty: A Review of the United States' 
        Relationship With the WTO (July 15, 2005)
    The purpose of this hearing was to examine the role of the 
World Trade Organization and its impact on national sovereignty 
and economic security. Since the inception of the World Trade 
Organization (WTO), the United States has lost half the cases 
brought against it by other WTO members. To date, two 
unfavorable WTO rulings led to the repealing of U.S. laws that 
were designed to protect U.S. interests, (U.S. tax code's 
Foreign Sales Corporation (FSC) and the Anti Dumping Act of 
1969). Some States have indicated that adverse WTO rulings have 
constitutional implicates on State laws. The national 
association for State legislatures wrote to the U.S. Trade 
Representative in March 2005 to express concern about the legal 
implications of adverse WTO rulings against State laws. As a 
condition of membership to the WTO, the U.S. is beholden to the 
WTO norms of trade. The benefit is that U.S has recourse when 
member nations, such as China, violate those norms at the 
expense of U.S. companies. One wonders why the United States 
has not taken full advantage of this membership to pretext our 
United States interests when it comes to stopping U.S. 
intellectual property from being vandalized in China.
    Witnesses: James E. Mendenhall, Ph.D., Acting General 
Counsel, Office of United States Trade Representative; Claude 
Barfield, Resident Scholar, and Director, Science and 
Technology Policy Studies, American Enterprise Institute; 
Robert Stumberg, Professor of Law, Harrison Institute for 
Public Law, Georgetown University Law School; and Robert 
Vastine, President, Coalition of Service Industries.
Securing Cyberspace: Efforts To Protect National Information 
        Infrastructures Continue to Face Challenges (July 19, 2005)
    The hearing focused on challenges in protecting our 
Nation's critical infrastructures from cyber security threats. 
The United States does not currently have a robust ability to 
detect a coordinated cyber attack on our critical 
infrastructures. Nor does it have a measurable recovery and 
reconstitution plan for the key mechanisms of the Internet and 
telecommunications systems. Department of Homeland Security is 
responsible for protecting the Nation's critical 
infrastructures; however, 85 percent of all critical 
infrastructures are controlled by the private sector. There is 
a lack of stable leadership at the National Cyber Security 
Division which has hurt its ability to maintain trusted 
relationships with the private sector and hindered its ability 
to adequately plan and execute activities.
    Witnesses: Donald (Andy) Purdy, Jr., Acting Director, 
National Cyber Security Division, Information Analysis and 
Infrastructure Protection Directorate, U.S. Department of 
Homeland Security; David A. Powner, Director, Information 
Technology Management Issues, U.S. Government Accountability 
Office; Paul M. Skare, Product Manager, Siemens Power 
Transmission and Distribution Inc., Energy Management and 
Automation; and Thomas M. Jarrett, Secretary and Chief 
Information Officer, Department of Technology and Information, 
State of Delaware.
U.S. Financial Involvement in Renovation of U.N. Headquarters (July 21, 
        2005)
    The purpose of the hearing was to examine the United 
Nations' Capital Master Plan to renovate the U.N. headquarters 
in New York City. The U.N. renovation project is one more 
example of U.N. spending out of control. The U.N.'s purported 
$1.2 billion renovation price tag was challenged by world 
renowned developer, Donald Trump, as overly costly and 
inconsistent with fair market construction costs. The U.N. 
procurement officer in charge of contracting the architecture 
design firm had to resign from the United Nations due to 
allegations of impropriety. It was the work of the architecture 
design firm (contracted and overseen by this U.N. officer) that 
calculated the $1.2 billion figure cost assessment. Fifty 
percent of that figure includes the costs of padding for 
``contingencies.'' A recent poll showed that 69 percent of 
Americans opposed the United States offering this loan.
    Witnesses: Hon. James Inhofe, a U.S. Senator from the State 
of Oklahoma; Hon. Jeff Sessions, a U.S. Senator from the State 
of Alabama; Christopher B. Burnham, Under Secretary General 
Department of Management, United Nations; Anne W. Patterson, 
Deputy Permanent Representative of the United States to the 
United Nations, U.S. Department of State; Martin J. Golden, New 
York State Senator; and Donald J. Trump, Chairman and 
President, The Trump Organization.
GSA: Is the Taxpayer Getting the Best Deal? (July 26, 2005)
    The hearing examined the spending and use of the General 
Services Administration (GSA). By taking a closer look at the 
products being bought by Federal agencies through GSA and 
ensuring that the best prices are available. Recent reports 
issued by the Government Accountability Office and the GSA 
Office of Inspector General concerning GSA's contract 
management point to many existing problems that may account for 
why the taxpayers may not be getting the best deal. The goal 
was for GSA to learn from some of the open market and 
competitive free enterprise firms.
    Witnesses: David E. Cooper, Director, Acquisition and 
Sourcing Management, U.S. Government Accountability Office; 
Emily W. Murphy, Chief Acquisition Officer, U.S General 
Services Administration; David Safavian, Administrator, Office 
of Federal Procurement Policy, U.S. Office of Management and 
Budget; Kathleen S. Tighe, Counsel to the Inspector General, 
U.S. General Services Administration; John B. Ames, Director, 
Contract Review and Evaluation Division, Office of Inspector 
General, U.S. Department of Veterans Affairs; and Thomas 
Graham, Chief Operating Office, Networld Exchange.
Who's Watching the Watchdog? Examining Financial Management at the SEC 
        (July 27, 2005)
    This hearing was convened to examine the recent and ongoing 
financial management challenges at the Securities and Exchange 
Commission (SEC). As of September 30, 2004, SEC had no 
implanted formalized accounting polices and procedures. SEC 
lacks formal polices and procedures in several major areas 
related to financial management. An overhaul of the financial 
management system and development of formal procedures is 
necessary to eliminate material internal control weaknesses 
related to penalties and discouragements (e.g. errors where SEC 
staff entered information into the accounting system that 
conflicted with information in the files), and financial 
reporting (e.g. accounting staff could not provide supporting 
documentation for certain account balances). SEC has no 
comprehensive agency information security program. The original 
FY 2005 estimate for the total cost of three new SEC buildings 
was $22.2 million. The Revised Fiscal Year estimate totaled 
$40.5 billion; and the current total estimate is $69 million.
    Witnesses: Hon. David M. Walker, Comptroller General of the 
United States, U.S. Government Accountability Office; and James 
M. McConnell, Executive Director, U.S. Securities and Exchange 
Commission.
Cost and Payment Plans of Medicare Part D (September 22, 2005)
    This hearing examined the cost and payment plans for the 
Medicare Modernization Act and whether the new legislation is 
meeting the needs of seniors. Part D has transferred a massive 
cost shift from the private sector to taxpayers as employers 
and unions will drop health plans for workers and retirees who 
can be covered by Medicare. Medicare's total unfounded 
liability through 2078 is $29.7 trillion, of which Part D 
accounts for $8.7 trillion. Its 2005 unfunded liability alone 
is $126 billion. The true cost of Part D was grossly 
underestimated--10-year cost projections have doubled from $400 
billion to over $800 billion. With the Federal Government 
taking an increased share of the drug market local drug plan 
costs will shift to the Federal Government. Currently, Medicare 
is unsustainable and requires broad reforms with increased 
competition.
    Witnesses: Leslie Norwalk, Deputy Administrator, Centers 
for Medicare and Medicaid Services; Joseph R. Antos, Ph.D., 
Wilson H. Taylor Scholar in Health Care and Retirement Policy, 
The American Enterprise Institute; Marilyn Moon, Vice President 
and Director, American Institutes for Research; and Jagadeesh 
Gokhale, Senior Fellow, Cato Institute.
Housing-Related Programs for the Poor: Can We Be Sure That Federal 
        Assistance Is Getting To Those Who Need It Most? (September 27, 
        2005)
    The purpose of this hearing was to examine existing 
challenges in measuring improper rent subsidy payments in the 
housing assistance programs at HUD, as well as Federal 
oversight of the Low-Income Home Energy Assistance Program. HUD 
has not yet effectively implemented a system to find improper 
payments in its housing assistance programs. In FY 2003, GAO 
reports that the amount of net overpayments in FY 2003 ($377 
million) could have subsidized another 56,000 households with 
vouchers. HUD uses complex formulas to determine eligibility. 
Although the agency acknowledges the critical need for program 
simplifications in order to prevent payment terrors, HUD has 
not pushed for its legislative recommendations to be 
implemented by Congress. HHS' Low Income Heating and Energy 
Assistance Program (LIHEAP) is not in compliance with the 
Single Audit Act requirements and is, therefore, unable to 
effectively ensure that LIHEAP money is going to people who 
need it most. There are no performance measures for LIHEAP's 
Residential Energy Assistance Challenge (REACH) Option Program. 
This ``demonstration'' project is continuing in perpetuity 
without any assessment of effectiveness of relevance.
    Witnesses: James M. Martin, Assistant Chief Financial 
Officer for Financial Management, U.S. Department of Housing 
and Urban Development; David G. Wood, Director, Financial 
Markets and Community Investment, U.S. Government 
Accountability Office; Josephine Bias Robinson, Director, 
Office of Community Services, Administration for Children and 
Families, U.S. Department of Health and Human Services; and Jim 
Wells, Director, Natural Resources and Environment, U.S. 
Government Accountability Office.
GSA: The Procurement Process From Start To Finish (September 29, 2005)
    The purpose of this hearing was to shed light on how the 
GSA procurement process works in plain English, so that every 
American taxpayer can understand how Federal money is spent 
using GSA facilitation. The Federal Government does not know 
what agencies buy, at what price, and for what purpose, nor 
does it have automated system that can provide this 
information. The data collection systems the government does 
use the Federal Procurement Data System (FPDS) only provides 
minimal information, and not all government agencies are even 
using this system. The price GSA obtains for goods and services 
on their schedule (catalog) is only a ceiling. It is up to the 
purchasing agency to seek lower prices.
    Witness: Stephen A. Perry, Administrator, U.S. General 
Services Administration.
How Does the Federal Government Lease Needed Space? (October 6, 2005)
    This hearing was convened to examine the various ways 
Federal agencies lease needed space. There is currently no 
inventory of the Federal Government's leased space. The lack of 
data enables a lack of strategic and intelligent approach to 
managing the government's leased assets. Costly leasing 
arrangements have risen dramatically over the past decade due 
to scoring rules adopted in the Budget Enforcement Act of 1990. 
``Operating leases'' are almost more costly than purchasing or 
construction. For example, in 1995, GAO reported that GSA had 
entered into 55 operating leases for long-term needs that were 
estimated to cost $700 million more than construction. 
Department of Transportation headquarters reduced the term of a 
20-year lease to a 15-year lease so that it could meet the 
definition of an operating lease. GSA's FY 1999 prospectus of 
constructing a new facility for this need showed the cost of 
construction was estimated to be $190 million less than an 
operating lease. Agencies rely on these types of leases because 
they look cheaper on an agency's annual appropriation and the 
Nation's annual budget. Scoring requirements in the Budget 
Enforcement Act of 1990 and OMB's definition of ``operating 
lease'' perpetuate the problem.
    Witnesses: William H. Matthews, Assistant Commissioner, 
Office of Real Property Asset Management Public Building 
Service, U.S. General Services Administration; Robert L. Neary, 
Jr., Acting Chief Facilities Management Officer, U.S. 
Department of Veterans Affairs; and Mark L. Goldstein, 
Director, Physical Infrastructure Issues, U.S. Government 
Accountability Office.
Guns and Butter: Setting Priorities in Federal Spending in the Context 
        of Natural Disaster, Deficits and War (October 25, 2005)
    The purpose of this hearing was to set priorities during a 
time of war and the worst natural disaster in our Nation's 
history. Since 2001, the non-defense, non-defense, non-homeland 
security government spending has increased 32 percent. Since 
1998, it has grown 70 percent. The American people are aware 
that unrestrained government growth is endangering the future 
quality of life for their children and grandchildren. The 
constitution could not be clearer about the finite powers of 
the Federal Government. When the Founders wrote Article I, 
Section 8 that the government is to ``provide for the common 
defense and general welfare of the United States,'' they were 
not intending to create a State that controls the lives of 
citizens, but a State that is responsible for its citizens. 
This is accomplished my setting priorities and being fiscally 
responsible.
    Witnesses: Hon. John Shadegg, a Representative in Congress 
from the State of Arizona; Hon. Charlie Stenholm, Government 
Affairs Advisor, Olsson, Frank and Weeda, P.C., and Former 
Member of Congress from the State of Texas; Roger Pilon, Vice 
President for Legal Affairs, B. Kenneth Simon Chair in 
Constitutional Studies, and Director, Center for Constitutional 
Studies, Cato Institute; and Daniel J. Mitchell, McKenna Senior 
Fellow in Political Economy, The Heritage Foundation.
Uncollected Taxes: Can We Reduce the $300 Billion Tax Gap? (October 26, 
        2005)
    This hearing examined the components that make up the $300 
billion tax gap; the magnitude of the problem; and approaches 
to ensuring that honest American taxpayers are not bearing the 
financial burdens of those who are not complying with the law. 
The ``tax gap'' is the gap between revenues that should have 
been collected and those that actually were collected in a 
given year. IRS estimates the tax gap to be between $311 and 
$353 billion for the 2001 tax year annually. IRS can not report 
more recent data. IRS tax gap estimates are unreliable because 
of outdated methodologies and lack of reliable data. IRS has no 
specific plans to regularly measure tax compliance. When 
taxpayers fail to comply with tax laws, the burden of funding 
the nation's commitments, including funding growing budget 
deficits, falls more heavily on taxpayers who voluntarily and 
accurately pay their taxes.
    Witnesses: Hon. Mark W. Everson, Commissioner, Internal 
Revenue Service; Bart L. Graham, Commissioner, Georgia State 
Department of Revenue; and Colleen M. Kelley, National 
President, National Treasury Employees Union.
Medicaid: Creative Improvements From the Field (October 28, 2005)
    The purpose of this hearing was to examine Medicaid 
spending and South Carolina's Section 115 Waiver Proposal as a 
creative solution to the significant increases in spending and 
quality of care issues. Nationally, Medicaid spending grew 97.8 
percent between 1995 and 2004. The program will cost taxpayers 
$338 billion this year. One in four south Carolinians receive 
Medicaid benefits--consuming more then $4 billion annually (19 
percent of the State's budget-projected to be 50 percent in 
2005). South Carolina ranks near the bottom in overall health 
outcomes, including rates of diabetes, stroke, and lung cancer. 
Fewer physicians will accept Medicaid patients due to low 
reimbursement. There must be a way to derive more value from 
healthcare dollars. The current Medicaid system forces States 
to shrink budgets for other critical State functions, e.g. 
Medicaid has surpassed education in consuming the largest piece 
of States' budgets nationally. Given the traditional options of 
cutting services, beneficiaries, or substantially raising 
taxes--South Carolina should be allowed to use market place 
principles in Medicaid.
    Witnesses: Hon. Mark Sanford, Governor, State of South 
Carolina; Hon. Tracy E. Edge, a Representative in Congress from 
the State of South Carolina; Judith Solomon, Senior Fellow, 
Center on Budget and Policy Priorities; Donald Tice, D.O., 
Member South Carolina Board of Medical Examiners; Professor 
Regina E. Herzlinger, Nancy R. McPherson, Professor of Business 
Administration, Chair, Harvard Business School; and Ed 
McMullen, President, South Carolina Policy Council Education 
Foundation.
Iran: Teheran's Nuclear Recklessness and the U.S. Response--The 
        Experts' Perspective (November 15, 2005)
    The purpose of the hearing was to examine the relationship 
between Iran's pursuit of nuclear weapons and its status as a 
State-sponsor of terrorism. The intelligence community 
estimates that Iran could possess a nuclear weapon within the 
decade. Shortly after ascending the presidency, Iran's 
President Mahmoud Ahmadinejad called for the destruction of the 
United States and Israel. The country is consistently listed by 
the U.S. State Department as one of the most active State 
sponsors of terrorism. The current Iran regime is the most 
dangerous in the world and is the single most urgent threat to 
American national security. The Iranian regime created the 
dangerous terrorist organization, Hezbollah, and it actively 
supports Hamas and Islamic Jihad. U.S. efforts to stabilize 
Iraq are essential to efforts to deter Iran from obtaining a 
nuclear weapon. The International Atomic Energy Agency (IAEA) 
has been unwilling to pass a resolution to refer Iran to the 
U.N. Security Council for possible sanction and Russia has been 
working with Iran to provide nuclear power reactors to the 
current terrorist regime and has revolved to not support the 
IAEA from referring Iran to the Security Council.
    Witnesses: Hon. R. James Wolsey, Former Director of Central 
Intelligence Agency; Hon. Alfonse D'Amato, Former U.S. Senator 
from the State of New York; Hon. Newt Gingrich, Former Speaker, 
U.S. House of Representatives; Gary S. Samore, Vice President, 
Program on Global Security and Sustainability, John D. and 
Catherine T. MacArthur Foundation; Ray Takeyh, Senior Fellow, 
Middle East Studies, Council on Foreign Relations; Ilan Berman, 
Vice President for Policy, American Foreign Policy Council; and 
Hon. Rick Santorum, a U.S. Senator from the State of 
Pennsylvania.
Ensuring Protection of American Intellectual Property Rights For 
        American Industries In China (November, 21 2005)
    The purpose of this hearing was to examine the importance 
of protecting intellectual property rights of all Americans and 
how copyright infringement and patent violations against 
industries affects American innovators, entrepreneurs and 
consumers. The U.S. Department of Commerce estimates that 
counterfeit trade in China is worth $19 to $80 billion a year. 
This means the U.S. is losing between 240,000-960,000 jobs, is 
applying the general rule of thumb that $1 billion in economic 
activity equates to 12,000-14,000 jobs. The U.S. Chamber of 
Commerce has reported that intellectual property rights (IPR) 
violations in China now severely affect virtually all 
industries, from consumer and industrial goods--including 
medicines, autos and auto parts, food and beverages, and 
cosmetics--to copyright works. These current trends in the 
U.S.-China relationship have negative implication for the long-
term economic and security interest of the United States. The 
U.S. film industry estimates that 90 percent of DVDs sold in 
China are pirated versions of and offered evidence linking 
Chinese counterfeiters of DVDs to organized crime. The U.S. 
recording industry estimates that it lost over $200 million in 
China to pirate sales in 2004.
    Witnesses: Hon. Dan Glickman, Chairman and Chief Executive 
Officer, Motion Picture Association of America, Inc. (MPAA); 
Gary Burr, Nashville Songwriter, on behalf of himself and the 
Recording Industry Association of American (RIAA); Jack Sabo, 
Vice President, Market Data Services, New York Board of Trade 
(NYBOT); Loren E. Hillberg, Executive Vice President, General 
Counsel, on behalf of the Macrovision Corporation; Timothy 
Minor, Vice President of Government Relations, Commins-Allison 
Corporation; Ted C. Fishman, Author, ``China, Inc., and How the 
Rise of the Next Superpower Challenges America and the World''; 
and Patrick A. Mulloy, Commissioner, U.S.-China Economic and 
Security Review Commission.
Bilateral Malaria Assistance: Progress and Prognosis (January 19, 2006)
    The purpose of this hearing is to examine the following: 
Progress on President's Malaria Initiative, malaria program 
reforms at USAID, lessons on malaria control from the field, 
and what the experts say about indoor residual spraying. 
Follow-up from the May 12 hearing on the same subject led to 
the discovery that less than 8 percent of the USAID malaria 
budget went toward life-saving commodities. But things are 
changing in two ways: The President's Malaria Initiative 
commits $1.2 billion/5 years to a commodity-based effort to 
save lives, starting in three focus countries (expanding to 15 
percent over 5 years). In non-focus countries, USAID is now 
implementing radical programmatic reforms to save lives. By FY 
2007, 50 percent of funding will go to commodities in countries 
not under the President's Malaria Initiative, 25 percent will 
go to indoor insecticide spraying programs. Resources will be 
focused by eliminating country programs too small to have a 
major impact (under $1.5 million this year, $2.5 million next 
year).
    Historically, indoor residual spraying with DDT eradicated 
malaria in all endemic developed nations. Despite the unfair 
and life-threatening stigma, DDT is still the cheapest (by 
far!) and most effective (by far!) insecticide for indoor 
spraying programs. No scientific evidence suggests it is unsafe 
for humans or the environment when used for indoor spraying 
programs. Evidence was presented that demonstrates DDT is still 
effective through its repellency action even when resistance to 
its mosquito-killing action is present.
    Witnesses: Michael Miller, Deputy Assistant Administrator 
for Global Health, U.S. Agency for International Development; 
Simon Kunene, Malaria Program Manager, Swaziland Ministry of 
Health; Donald R. Roberts, Ph.D., Professor, Division of 
Tropical Public Health, Department of Preventive Medicine and 
Biometrics, Uniformed Services University of Health Sciences, 
Bethesda, Maryland; and Andy Arata, Vector Control Specialist.
Big Ticket Waste: Are Empty Federal Buildings Emptying the Taxpayers' 
        Wallets? (February 6, 2006)
    This hearing will examine the money wasted in abandoned, 
Federal buildings. Did you know that more than 30 Federal 
agencies are wasting--at the very least--$15 billion in unused 
real property assets worldwide? We don't even know how big the 
number is because there is no definitive inventory of federally 
owned facilities and land, let alone an inventory of buildings 
and land that go unused.
    The Federal Government has no comprehensive database of 
properties that it owns and leases; how much space it needs and 
doesn't need. President Bush issued Executive Order 13327 in 
February 2004 to improve real property asset management, and 
this EO requires an inventory; yet many agencies have still not 
reported their inventories of real property (both used and 
unused). The Federal Government owns about $328 billion in real 
estate assets worldwide (GAO, 2003) and 2.8 billion square feet 
of building space. This means that the Federal Government 
maintains 683 square feet of space per Federal employee.
    Witnesses: Hon. Barack Obama, a U.S. Senator from the State 
of Illinois; Mark L. Goldstein, Director, Physical 
Infrastructure Team, U.S. Government Accountability Office; 
William H. Matthews, Assistant Commissioner, Office of Real 
Property Asset Management, U.S. General Services 
Administration; James M. Sullivan, Deputy Director, Office of 
Asset and Enterprise Management, U.S. Department of Veterans 
Affairs; Tom Samra, Vice President, Facilities, U.S. Postal 
Service; and Dr. Get W. Moy, Director, Installations 
Requirements and Management Directorate, Office of the Deputy 
Under Secretary of Defense (Installations and Environment), 
U.S. Department of Defense.
Federal Agencies and Conference Spending (February 7, 2006)
    The hearing explores agency approval process and budget 
ceilings for conference spending, cost, number of staff sent, 
conference topics, etc. The Federal Government has spent over 
$2 billion on meetings and travel since 2000. Overall 
department spending on meetings and travel has increased over 
60 percent since 2000 (down from 70+ percent using FY05 
levels). The majority of agencies assume annual increases in 
meetings and travel spending, a nonessential activity, and have 
been spending accordingly. Only three agencies spent less on 
conference travel in 2006 than they did in 2005 (HUD, USAID, 
and the Treasury). There is evidence that bureaucrats allow the 
destination to drive the decision to attend a conference rather 
than the agency mission. Many meetings and conferences are set 
in beach, resort, or casino areas.
    Witnesses: Scott Evertz, Former Director of the White House 
Office of National AIDS Policy; Charles Johnson, Assistant 
Secretary for Budget, Technology and Finance, U.S. Department 
of Health and Human Services; Sid Kaplan, Acting Chief 
Financial Officer, U.S. Department of State; James M. Martin, 
Acting Chief Financial Officer, U.S. Department of Housing and 
Urban Development; and Michael W.S. Ryan, Deputy Chief 
Financial Officer, U.S. Environmental Protection Agency.
Crime Victims Fund Rescission: Real Savings or Budget Gimmick? (March 
        8, 2006)
    The President's FY07 Budget proposes to raid the self-
funded Crime Victims Fund and drain the Fund of its money. The 
Fund utilizes criminal fines, fees, and forfeitures in order to 
pay for victims' services and compensation--making criminals 
pay for the system they create. The Crime Victims Fund ensures 
justice through restitution and is a rare example of a Federal 
program that funds itself. The Administration suggests the Fund 
is a gimmick, and this hearing will determine whether the Fund 
or the proposed raid of the Fund is the real budget gimmick.
    The Administration's Crime Victims Fund rescission takes 
the non-discretionary funds derived from criminal fines, fees, 
and forfeitures and puts them in the general treasury. This 
would terminate the program supported by the criminals to help 
the victims. The proposed rescission violates the authorizing 
statute (P.L. 98-473 and P.L. 100-690) regarding how the 
programs are supposed to be funded, but the Administration has 
not sent the required legislative changes to Congress along 
with the budget.
    Witnesses: Hon. Ed Meese, Ronald Reagan Distinguished 
Fellow in Public Policy, and Chairman of the Center for Legal 
and Judicial Studies, The Heritage Foundation; Hon. Paul Corts, 
Assistant Attorney General for Administration, U.S. Department 
of Justice; Steve Derene, Executive Director of the National 
Association for VOCA Assistance Administrators; and Marsha 
Kimble, victim of the Oklahoma City Bombing, Victim Advocate, 
and founder of Families and Survivors United.
Reporting Improper Payments: A Report Card on Agencies' Progress (March 
        9, 2006)
    Last June, the Subcommittee held a hearing to assess 
agencies' compliance with the reporting requirements of the 
Improper Payments Information Act of 2002 (agencies were 
required by the Act to begin reporting in FY 2004). The purpose 
of this hearing is to discuss the success or failure of 
agencies' to report and/or reduce improper payments in their FY 
2005 Performance and Accountability Reports; and to discuss 
whether or not the various ways in which agencies measure 
improper payments is accurately depicting the magnitude of the 
problem.
    Witnesses: Hon. Linda M. Combs, Controller, Office of 
Management and Budget; McCoy Williams, Director, Financial 
Management and Assurance Team, U.S. Government Accountability 
Office; Hon. Mark Everson, Commissioner, Internal Revenue 
Service; Hon. James B. Lockhart, III, Deputy Commissioner, 
Social Security Administration; Samuel T. Mok, Chief Financial 
Officer, U.S. Department of Labor; and Charles Johnson, 
Assistant Secretary for Budget, Technology and Finance, U.S. 
Department of Health and Human Services.
Earmark Reform: Understanding the Obligation of Funds Transparency Act 
        (March 16, 2006)
    The purpose of the hearing was to provide a public 
discussion on Senator John McCain's earmark reform bill 
submitted to the Homeland Security and Governmental Affairs 
Committee while shedding more light on the dangerous effect 
rampant earmarking has on the legislative process, Washington's 
culture, and our Nation's financial well-being. Earmarks need 
transparency and time for debate to make sure each item is 
considered on its own merits and in light of competing 
priorities. Tucking earmarks into conference reports prevents 
taxpayers from the benefit of debate and disclosure about how 
their money is being spent. Requiring earmarked projects to be 
part of actual legislation would also make it easier for 
legislators to challenge them by offering amendments to change 
or strike them.
    Witnesses: Hon. Jeff Flake, a Representative in Congress 
from the State of Arizona; Hon. John McCain, a U.S. Senator 
from the State of Arizona; Thomas A. Schatz, President, 
Citizens Against Governmental Waste; Steve Ellis, Vice 
President of Programs, Taxpayers for Common Sense Action; and 
Scott Lilly, Senior Fellow, Center for American Progress.
Bolstering the Safety Net: Eliminating Medicaid Fraud (March 28, 2006)
    This hearing convened to examine the current infrastructure 
for Medicaid program integrity at the State and Federal levels. 
Recent challenges to the current system--as well as some recent 
progress in these areas--necessitates a review of the current 
system for tracking improper spending and fraud at the State 
and Federal levels.
    Medicaid, the uncapped partnership between States and the 
Federal Government providing a ``safety-net of last resort'' to 
America's poor, elderly, disabled (one in five Americans), cost 
an estimated $330 billion in 2005. The Federal investment in 
Medicaid is only growing--between 2004 and 2005, the program 
grew by 12 percent and by 2016, it is estimated that Medicaid 
and Medicare alone will make up almost half the Federal budget 
for mandatory spending. CMS testified at the hearing that a 
strategic fraud control plan would be in place in 6 weeks.
    Witnesses: Hon. Daniel Levinson, Inspector General, U.S. 
Department of Health and Human Services, accompanied by Michael 
Little, Deputy Inspector General for Investigations, U.S. 
Department of Health and Human Services; Dennis Smith, 
Director, Center for Medicaid and State Operations, Centers for 
Medicaid and Medicare Services; Leslie Aronovits, Health Care 
Director, Program Administration and Integrity Issues, U.S. 
Government Accountability Office; and Brian Flood, Inspector 
General, Health and Human Services, State of Texas.
Federal Funding of Museums (April 5, 2006)
    This hearing examined the various avenues of Federal 
funding for museums including authorized programs, grantmaking 
agencies and earmarks. Since 2001 the Federal Government has 
spent over $7 billion on museums, zoos, arboretums, science 
centers, halls of fame, and cultural centers. The 
Administration has requested at least $1.45 billion in FY 2007 
funds for the arts, cultural, and learning activities, and the 
buildings themselves. This type of funding has increased almost 
25 percent in the past 5 years.
    Three types of Federal funding for these activities: 
Authorizations, grants, and earmarks. Museums rely on 
government (local, State, Federal) for one-fourth of their 
operating income according to the American Association of 
Museums. Museums spend a median of $21 for every visitor, while 
earning only $5.50 in revenue per visitor.
    There are competitive grants available for museums to apply 
for through the Institute of Museum and Library Services and 
the National Science Foundation which include peer reviews and 
financial management requirements. There has been 863 museum 
earmarks handed out since 2001.
    Witnesses: Anne-Imelda Radice, Director, Institute of 
Museum and Library Services; David A. Ucko, Ph.D., Program 
Head, Informal Science Education Program (ISEP), National 
Science Foundation; Thomas A. Schatz, President, Citizens 
Against Government Waste; and Edward H. Able, Jr., President 
and CEO, American Association of Museums.
The Effectiveness of the Small Business Administration (April 6, 2006)
    This hearing examined the effectiveness of SBA programs and 
the financial impact of them on the budget and economy. The 
Small Business Administration (SBA) does little, if any, 
measuring of the impact its programs have upon the small 
business sector or the national economy. It primarily measures 
outputs such as number of loans made rather than outcomes such 
as the success of businesses helped, or the impact of the loans 
on the credit industry and small business sector growth. SBA 
Office of Advocacy estimates that compliance with Federal 
regulations cost small businesses (which make up more than 90 
percent of all businesses) over $2,000 more per employee per 
year to comply with Federal regulations than the national 
average, which is already $5,633 ($1 trillion annually). 
Nevertheless, SBA dedicates less than 2 percent of its budget 
toward efforts to reduce regulatory burden for small business. 
In addition, it has lowered its FY 2007 goals below the amount 
of achieved savings in the 2 previous years. The SBA Inspector 
General reports that large companies may often be awarded small 
business contracts simply by working within the rules in place, 
demonstrating a need for change.
    Witnesses: Hon. Sue Kelly, a Representative in Congress 
from the State of New York; Hon. Hector Barreto, Administrator, 
U.S. Small Business Administration; William B. Shear, Director, 
Financial Markets and Community Investment, U.S. Government 
Accountability Office; Veronique de Rugy, Resident Fellow, 
American Enterprise Institute; Jonathan J. Bean, Professor of 
History, Southern Illinois University; David Bartram, Chairman, 
National Association of Government Guaranteed Lenders; and John 
Pointer, Small Business Owner.
Katrina and Contracting: Blue Roof, Debris Removal, Travel Trailer Case 
        Studies (April 10, 2006)
    This field hearing, in New Orleans, focused on the blue 
roof, debris removal, and travel trailer programs and 
unreasonable costs and excessive multi-layered contracts. 
Neither the Federal Emergency Management Agency (FEMA) nor the 
U.S. Army Corps of Engineers were able to confirm or deny 
direct allegations of unreasonable costs and overhead for the 
blue roof program, debris removal, and the use of travel 
trailers for temporary housing as reported by local media and 
initial government analysis. The Federal Gulf Coast recovery is 
fraught with waste due to lack of pre-planning and oversight. 
Processes to apply cost controls and reasonability analysis 
before a contract was signed were either not used or were not 
in place. Prices paid under contracts (both prime contracts and 
all their sub-contracts) are not available to the public or to 
Congress. This is by policy, not by statute. FEMA and the U.S. 
Army Corps of Engineers are unable to justify the excessive 
number of layers utilized in the current method of vertical 
contracting.
    Witnesses: Tina Burnette, Deputy Director Acquisitions for 
Katrina, U.S. Department of Homeland Security; Lieutenant 
General Carl A. Strock, Chief of Engineers, U.S. Army Corps of 
Engineers; Matthew Jadacki, Inspector General of Hurricane 
Katrina Oversight, U.S. Department of Homeland Security; 
Patrick J. Fitzgerald, Auditor General, U.S. Army Audit Agency; 
Thomas F. Gimble, Principal Deputy Inspector General, U.S. 
Department of Defense; Hon. David Vitter, a U.S. Senator from 
the State of Louisiana; Hon. Mary L. Landrieu, a U.S. Senator 
from the State of Louisiana; Hon. Bobby Jindal, a 
Representative in Congress from the State of Louisiana; Hon. 
Steve Scalise, Representative, Louisiana State Legislature; 
Bill Woods, Director of Acquisition and Sourcing Management 
Team, U.S. Government Accountability Office; Derrell Cohoon, 
Chief Executive Officer, Louisiana Association of General 
Contractors; and Kevin Davis, President, St. Tammary Parish.
North Korea: Illicit Activity Funding the Regime (April 25, 2006)
    North Korea is under the iron grip of Kim Jong-Il and his 
ruling elite. From the little we know about this secretive 
dictatorship, it's clear that there is little the regime won't 
do in order to increase its stranglehold of power and its 
threat to the world. A significant source of income that is 
keeping this malevolent empire solvent derives from a vast 
criminal network involved in counterfeiting currency and 
commercial goods, illegal drug production and trafficking, and 
slave labor. The purpose of this hearing is to expose these 
illicit activities to public scrutiny and connect the dots 
between this ``moonshine'' economy and the regime's ability to 
continue weapon proliferation while avoiding the full 
consequences of sanctions and isolationism.
    Witnesses: Peter A. Prahar, Director, Office of Africa, 
Asia, and Europe Programs, Bureau for International Narcotics 
and Law Enforcement Affairs, U.S. Department of State; Michael 
Merritt, Deputy Assistant Director, Office of Investigations, 
U.S. Secret Service, U.S. Department of Homeland Security; 
Seong Min Kim, Vice Chairman of the Exile Committee for North 
Korea Democracy, and President, Free North Korea Radio; David 
L. Asher, Institute for Defense Analyses; Chuck Downs, Author, 
``Over the Line: North Korea's Negotiating Strategy''; and 
Marcus Noland, Senior Fellow, Institute for International 
Economics.
Ensuring Early Diagnosis and Access to Treatment for HIV/AIDS: Can 
        Federal Resources Be More Effectively Targeted? (April 26, 
        2006)
    Dr. Coburn held a hearing to examine how Federal funding is 
being distributed to provide AIDS drugs and HIV testing 
opportunities in the United States. The Government 
Accountability Office presented the findings of a just 
completed 3 year examination of these efforts, and the Health 
Resources and Services Administration (HRSA) and the Centers 
for Disease Control and Prevention (CDC) testified on current 
HIV/AIDS treatment and prevention programs.
    Hundreds of patients in 14 States are on waiting lists for 
AIDS drugs, while HRSA's HIV/AIDS Bureau does not even have 
guidance on what conditions should trigger an AIDS Drug 
Assistance Program (ADAP) to establish a waiting list. In 
addition, a recent GAO report found that ``ADAPs with waiting 
lists may not represent all eligible individuals who are not 
being served.''
    As many as 45 percent of persons testing positive for HIV 
received a positive test result less than a year before AIDS 
was diagnosed (a process taking up to 10 years in some cases), 
suggesting that people are living with HIV for many years 
before they are aware of their infection and may be unknowingly 
spreading the virus to others.
    Witnesses: Kevin Fenton, M.D., Director, National Center 
for HIV, STD and TB Prevention, Centers for Disease Control and 
Prevention, U.S. Department of Health and Human Services; 
Deborah Parham Hopson, Associate Administrator, HIV/AIDS 
Bureau, Health Resources and Services Administration, U.S. 
Department of Health and Human Services; Marcia Crosse, 
Director, Health Care, U.S. Government Accountability Office; 
M. Beth Scalco, Director, HIV/AIDS Program, Louisiana Office of 
Public Health, and Past Chair, National Alliance of State and 
Territorial AIDS Directors; and Michael Weinstein, President, 
AIDS Healthcare Foundation
Unobligated Balances: Freeing up Funds, Setting Priorities and Untying 
        Agency Hands (May 18, 2006)
    The hearing examined the billions of unspent dollars 
sitting in government carryover accounts, also known as ``un-
obligated balances.''
    Most programs carry over balances year to year. A cursory 
investigation revealed there are at least $420 billion of 
unspent dollars sitting in government carryover accounts, also 
known as ``un-obligated balances.'' ``Un-obligated balances'' 
refers to money that has been appropriated but not obligated 
during a fiscal year. According to the U.S. Treasury, at the 
very least, $54 billion in carryover funds sat in government 
accounts at the end of FY 2005. Despite money going unspent, 
Congress and the Administration continue to request budget 
increases for agencies and Federal programs.
    Witnesses: Phyllis F. Scheinburg, Assistant Secretary for 
Budget and Programs, Chief Financial Officer, U.S. Department 
of Transportation; Lee J. Lofthus, Deputy Assistant Attorney 
General and Controller, U.S. Department of Justice; John P. 
Roth, Deputy Comptroller, Office of the Under Secretary of 
Defense, U.S. Department of Defense; Charles E. Johnson, 
Assistant Secretary for Budget, Technology and Finance, U.S. 
Department of Health and Human Services; and Robert J. Henke, 
Assistant Secretary for Management, U.S. Department of Veterans 
Affairs.
Congress' Role In Federal Financial Management: Is It Efficient, 
        Accountable, and Transparent In the Way It Appropriates Funds? 
        (May 25, 2006)
    The hearing examined the complicated, broken and 
inefficient system Congress uses to budget and spend taxpayers 
money. Congress has a history of setting its own spending 
limitations and repeatedly breaking them. The implications of 
that behavior on the economy and the American taxpayer were 
confirmed by Comptroller General of the United States, David 
Walker: ``We face large and growing structural deficits . . . 
most of which have nothing to do with Iraq, Afghanistan, and 
incremental Homeland Security costs. This must change.''
    The Federal budget process is broken: Congress has 
abandoned all spending restraint and violates its own spending 
limits with no second thought. In just 3 years, from 2003 to 
2005, the budget deficit increased by 23.8 percent. According 
to the Congressional Research Service, the use of supplemental 
spending from 1991 to 2002 increased the budget deficit by 5.3 
percent. The current Congressional budget process lacks 
transparency. Congress caters to narrow constituencies by 
inserting pork projects into omnibus and ``emergency'' 
supplemental bills that Congress and the public never see.
    Witnesses: Hon. David M. Walker, Comptroller General of the 
United States, U.S. Government Accountability Office; Hon. 
James C. Miller III, Former Director, Office of Management and 
Budget; Hon. Timothy J. Penny, Former Congressman, Senior 
Fellow, University of Minnesota Humphrey Institute; Douglas 
Holtz-Eakin, Former Director, Congressional Budget Office, 
Director, Maurice R. Greenberg Center for Geoeconomic Studies, 
Paul A. Volcker Chair in International Economics Council on 
Foreign Relations; Chris Edwards, Director of Tax Policy 
Studies, Cato Institute; and Maya C. MacGuineas, President, 
Committee for a Responsible Federal Budget and Director, Fiscal 
Policy Program, New America Foundation.
Census 2010, Off-Line and Off-Budget: The High Cost of Low-Tech 
        Counting (June 6, 2006)
    Chairman Coburn convened a hearing on June 6: ``2010 
Census, Off-Line and Off-Budget: The High Cost of Low-Tech 
Counting'' to examine why cost projections for the 2010 Census 
have risen so dramatically over the 2000 Census despite massive 
financial investments in technology.
    Currently, the Census Bureau estimates that the 2010 Census 
will cost $11.3 billion, which is $5 billion more than the cost 
of the 2000 Census. On average, the cost of the census 
increases by 100 percent every 10 years. The Census Bureau has 
blamed these cost increases largely on inflation and population 
growth, yet inflation is estimated to increase by only 30 
percent and population is projected to increase by less than 10 
percent.
    Witnesses: Hon. Louis Kincannon, Director, U.S. Census 
Bureau, and Brenda S. Farrell, Acting Director, Strategic 
Issues, U.S. Government Accountability Office.
Autopilot Budgeting: Will Congress Ever Respond to Government 
        Performance Data? (June 13, 2006)
    This hearing was held to examine the disconnect between the 
funding levels Congress dispenses to government programs and 
the performance data of those programs. A third of all programs 
rated by OMB have been scored ``ineffective'' or ``results not 
demonstrated.'' These programs spend $152 billion of taxpayer 
money--dollars that could be spent on more vital priorities or 
used to pay down the national debt. Yet, Congress routinely 
ignores this information and automatically funds these programs 
at the same levels or increase.
    The Performance Assessment Rating Tool (PART) was first 
introduced in 2002 as a tool to review the strengths and 
weaknesses of government programs to inform budgeting 
decisions. By 2008, OMB will have applied PART to the entire 
government. In the last 4 years OMB has reviewed 793 programs 
which account for $1.47 trillion in taxpayer money and rated 15 
percent ``effective''; 29 percent ``moderately effective''; 28 
percent ``adequate''; 4 percent ``ineffective''; and 24 percent 
cannot demonstrate results to even get a rating. Programs rated 
``ineffective'' or ``results not demonstrated'' account for 
$152 billion in budget authority and one-third of all programs 
reviewed thus far.
    Witnesses: Hon. Clay Johnson, III, Deputy Director for 
Management, U.S. Office of Management and Budget; Eileen 
Norcross, Government Accountability Project, Mercartus Center 
at George Mason University; and Adam Hughes, Director for 
Federal Fiscal Policy, OMB Watch.
U.N. Headquarters Renovation: No Accountability Without Transparency 
        (June 20, 2006)
    Chairman Coburn held a hearing June 20 on the continuing 
lack of transparency for the massive U.N. renovation project in 
Turtle Bay, Manhattan. This is a follow up to last year's 
hearing, where the United Nations was called to account for 
wasted design money and a flawed and over-priced ($1.2 billion) 
plan. Now the plan's cost projection has sky-rocketed to $1.7 
billion, millions more have been spent on new designs and an 
itemized cost projection is still not available. The lack of 
transparency is a case study in the larger lack of 
transparency, accountability, financial and ethical integrity 
at the international body. Although reforming the agency would 
be almost overwhelmingly difficult, the Chairman is asking for 
a small first step--transparency in the Capital Master Plan.
    The U.N. renovation project, the Capital Master Plan, 
operates within the unaccountable and corrupt U.N. procurement 
system. Not a single U.N. employee has been fired, indicted, or 
even censured for his or her involvement in the Oil-For-Food 
procurement scandal. Despite recent reports of ongoing 
corruption in the peacekeeping procurement system and the 
indictments of low-level procurement officers, the United 
Nations continues to utilize contractors suspected of fraud, 
sustain tainted contracts, and employ individuals suspected of 
corruption.
    Witnesses: Hon. John R. Bolton, U.S. Permanent 
Representative to the United Nations; Anne Bayefsky, Senior 
Fellow, Hudson Institute, Professor, Touro Law Center, and 
Editor, www.EYEontheUN.org; Claudia Rosett, Journalist-in-
Residence, The Foundation for the Defense of Democracies; and 
Thomas Melito, Director, International Affairs and Trade, U.S. 
Government Accountability Office.
Lessons Learned? Assuring Healthy Initiatives in Health Information 
        Technology (June 22, 2006)
    As most industries move online and are fully digitized, one 
industry is lagging woefully behind healthcare. Chairman Coburn 
held a hearing June 22, entitled, ``Lessons Learned? Assuring 
Healthy Initiatives in Health Information Technology (HIT)'' 
which considered:
    Joint digital health systems at Veterans' Affairs and 
Department of Defense, additional Federal initiatives in health 
technology, efforts to standardize health information 
technology in several Federal agencies, including Veterans' 
Affairs (VA), the Department of Defense (DOD), and the 
Department of Health and Human Services (HHS).
    Witnesses: Jodi G. Daniel, J.D., M.P.H., Director, Policy 
and Research, Office of the National Coordinator for Health 
Information Technology, U.S. Department of Health and Human 
Services; Linda D. Koontz, Director, Information Management 
Issues, U.S. Government Accountability Office; Carl E. 
Hendricks, Military Health System Chief Information Officer, 
U.S. Department of Defense; Michael Kussman, M.D., Deputy Under 
Secretary for Health, U.S. Department of Veterans' Affairs 
accompanied by Robert Howard, Supervisor, Office of Information 
and Technology, U.S. Department of Veterans' Affairs; and Ross 
Fletcher, M.D., Chief of Staff, Veterans Medical Center.
Community Development Block Grants: The Case For Reform (June 29, 2006)
    The Community Development Block Grants program is a multi-
billion dollar program that has exceptional flexibility 
compared to most other grant programs. Operated out of the 
Department of Housing and Urban Development, Community 
Development Block Grants give local officials broad discretion 
on the use of the funds for housing, economic development 
activities, social services, and infrastructure.
    Grantee and sub-grantee level spending information is not 
available to Congress, the Administration, or the public, 
making it difficult to accurately gauge the effectiveness of 
the Community Development Block Grants (CDBG) program. In 2006, 
HUD has started to collect new performance measurements for the 
CDBG program, but according to the Inspector General's office, 
performance measures will likely be undermined by vague 
criteria and a failure to improve deficient enforcement tools. 
The CDBG formulas have not been updated since the late 1970's. 
As a result, many wealthy communities receive three to four 
times more CDBG funds per capita than many poor communities.
    Witnesses: Hon. Pamela H. Patenuade, Assistant Secretary, 
Office of Community Planning and Development, U.S. Department 
of Housing and Urban Development, accompanied by Todd 
Richardson; Hon. Kenneth M. Donohue, Inspector General, 
Department of Housing and Urban Development; Eileen Norcross, 
M.A., Senior Research Fellow for the Government Accountability 
Project, Mercatus Center, George Mason University; and Cardell 
Cooper, Executive Director, National Community Development 
Association.
What You Don't Know Can Hurt You: S. 2590, the Federal Funding 
        Accountability and Transparency Act of 2006 (July 18, 2006)
    The July 18 hearing highlighted the lack of transparency in 
Federal spending decisions as well as the merits of legislation 
to create a website disclosing the recipients of all Federal 
funding. As the quote from Thomas Jefferson says, ``the 
government's finances should be available and understandable to 
the average citizen in order to bring transparency and 
accountability to the Federal Government.'' Thus far, the 
legislation has garnered the support of more than 100 
organizations from all ideological perspectives, including 
Federal watchdog associations, newspaper editorial boards and 
academic think tanks.
    As Federal spending approaches $3 trillion this fiscal 
year, the public's ability to track how it is spent remains a 
monumental task. There is currently no single source of 
accurate, complete, and timely information on Federal 
Government spending.
    Grants, contracts and loans account for nearly $1 trillion 
in Federal spending annually, yet both areas lack enough 
transparency to allow taxpayers to know where that money goes.
    The two primary sources for data on grants (Federal 
Assistance Awards Data System--FAADS) and contracts (Federal 
Procurement Data System--FPDS) are incompatible, hard to 
search, and lack basic information on what purpose tax money 
was spent to accomplish.
    Witnesses: Hon. John McCain, a U.S. Senator from the State 
of Arizona; Hon. Barack Obama, a U.S. Senator from the State of 
Illinois; Gary D. Bass, Ph.D., Executive Director, OMB Watch; 
Eric Brenner, Director, Maryland Governor's Grants Office; and 
Mark Tapscott, Editorial Page Editor, The Washington Examiner 
Proprietor.
Iran's Nuclear Impasse: Next Steps (July 20, 2006)
    The purpose of the hearing was to look at the status on 
Iran's nuclear weapons capabilities, European negotiations and 
the U.N. Security Council, and the feasibility of further 
negotiations, democracy promotion, sanctions, and/or military 
options.
    Iran does not need a nuclear weapon in order to be a 
threat. The regime has been funding terrorist groups and 
killing citizens of the United States and its allies for 27 
years. Iran poses a grave threat to the world but an even 
graver threat to Iranians who are beaten, imprisoned, and 
killed by the regime in order to keep the mullahs in power.
    Hassan Rowhani, the Iranian regime's representative at the 
failed E.U.-3 (Germany, France and Britain) negotiations, 
admitted that Teheran played along with the negotiations for a 
time. This permitted the regime to successfully dupe the West 
while continuing to develop nuclear weapon technology.
    Witness: Amir Abbas Fakhravar, Chairman, Independent 
Student Movement; Ilan Berman, Vice President for Policy, 
American Foreign Policy Council; Michael A. Leeden, Freedom 
Scholar, American Enterprise Institute; Ray Takeyh, Senior 
Fellow, Middle East Studies, Council on Foreign Relations; and 
Jim Walsh, Security Studies Program, Massachusetts Institute of 
Technology.
Responsible Resource Management at the Nation's Health Access Agency 
        (July 27, 2006)
    The Health Resources and Services Administration (HRSA) 
spends about $6 billion per year on over a hundred programs 
(including the Ryan White CARE Act, Healthy Start, and National 
Hospital Bioterrorism Preparedness, among many others) intended 
to increase access to and quality of health care. Given the 
recent release and priorities of the President's FY 2007 
budget, the hearing examined the agency's financial management 
of its budget in carrying out its mission.
    Witnesses: Peter C. Van Dyck, M.D., M.P.H., Associate 
Administrator, Maternal and Child Health Bureau, Health 
Resources and Services Administration, U.S. Department of 
Health and Human Services; and Joyce Somsak, M.A., Associate 
Administrator, Healthcare Systems Bureau, Health Resources and 
Services Administration, U.S. Department of Health and Human 
Services.
Cyber Security: Recovery and Reconstruction of Critical Networks (July 
        28, 2006)
    Senator Coburn held the second hearing in a series on cyber 
security in the Federal Government. Today, despite spending 
millions of dollars over the past year, the Department of 
Homeland Security (DHS) continues to struggle with how to 
effectively form and maintain effective public/private 
partnerships in support of cybersecurity--including how to 
protect Internet infrastructure and how to recover it in the 
case of a major disruption. The public/private partnership 
necessary to accomplish the goals of DHS in securing computer 
networks continues to remain a public/private divide. 
Interested in making progress on a public/private partnership 
for cyber security of our Nation's critical infrastructures, 
the hearing highlighted the immediate steps that DHS and the 
private sector can take to formalize a partnership and to 
ensure effective response and recovery to major cyber network 
disruptions.
    Witnesses: George Foresman, Under Secretary for 
Preparedness, U.S. Department of Homeland Security; Richard C. 
Schaeffer, Jr., Director of Information Assurance, National 
Security Agency; Karen Evans, Administrator for Electronic 
Government and Information Technology, Office of Management and 
Budget; Keith Rhodes, Chief Technologist and Director, Center 
for Technology and Engineering, U.S. Government Accountability 
Office; Thomas E. Noonan, President and Chief Executive 
Officer, Internet Security Systems; Roberta A. Bienfait, Senior 
Vice President Global Network Operations, AT&T Michael A. 
Aisenberg, Director of Government Relations, VeriSign, Inc. and 
Vice Chair, IT Sector Coordinating Council; and Karl Brondell, 
State Farm Insurance Companies, on behalf of the Business 
Roundtable.
Financial Management at the Department of Defense (August 3, 2006)
    Since FY 2005 DOD has become more focused on financial 
management as a critical area for reform. In GAO's words, ``DOD 
has finally come to the realization that all of their `business 
systems' whether payroll, logistics, supplies, personnel, etc., 
must be viewed as financial in nature, because they all involve 
a cost.''
    The Department of Defense has never gotten a financial 
audit. In fact, DOD has never produced auditable financial 
statements--in other words, they can't undergo an audit, much 
less pass one. Of the 26 ``high-risk'' areas designated by GAO, 
14 are at DOD. GAO has been reporting to Congress that DOD is 
at the top of its ``high-risk'' list for years. In 2004, the 
Department set the goal of undergoing a full audit by 2007. 
That deadline has not been met, and in fact, has been moved to 
the year 2016.
    Witnesses: Hon. David M. Walker, Comptroller General of the 
United States, U.S. Government Accountability Office; J. David 
Patterson, Principal Deputy Under Secretary of Defense 
(Controller), U.S. Department of Defense; Teresa McKay, Deputy 
Chief Financial Officer, U.S. Department of Defense; and Thomas 
F. Gimble, Acting Inspector General, Office of the Inspector 
General, U.S. Department of Defense.
IT Projects At Risk: Is It Too Late to Save $12 Billion? (September 7, 
        2006)
    In FY 2007, the Federal Government will spend $64 billion 
on more than 850 information technology (IT) projects ranging 
from e-payroll and human resources to weather satellites and 
defense systems. The Office of Management and Budget is 
responsible for overseeing the use of IT throughout the 
government, and keeps close track of the most at-risk projects 
through its High-Risk List and Management Watch List. The U.S. 
Government Accountability Office (GAO) has determined that, 
between projects on both lists, more than $12 billion is in 
serious risk of being wasted due to performance or planning 
problems. The hearing focused on why $12 billion in potentially 
wasteful projects is being funded and what OMB is doing to make 
sure this money is not wasted.
    In FY 2007, the Federal Government will spend $64 billion 
on information technology (IT), of which $7-$12 billion may be 
wasted through cost overruns, schedule delays and poor 
management. The Office of Management and Budget (OMB) monitors 
questionable and high-risk IT projects through two lists it 
created: The High-Risk List and the Management Watch List. The 
High-Risk List monitors projects that may perform poorly, while 
the Management Watch List monitors programs that OMB has 
decided are ``not well planned,'' yet funds anyway. The 
President's FY 2007 budget submission included 226 projects 
worth $6.4 billion on the High-Risk List and 263 projects worth 
$9.9 billion on the Management Watch List.
    Witnesses: Hon. Karen Evans, Administrator for Electronic 
Government and Information Technology, U.S. Office of 
Management and Budget; and David A. Powner, Director, 
Information Technology Management Issues, U.S. Government 
Accountability Office.
Round Two: Federal Agencies and Conference Spending (September 14, 
        2006)
    Chairman Coburn convened a hearing to examine the amount of 
money Federal agencies spend on meetings and travel. ``During a 
time of war, there's no excuse for agencies to spend excessive 
amounts of money to attend conferences in exotic locations,'' 
Dr. Coburn said. ``Throughout our history, presidents and 
lawmakers cut back non-defense spending during times of war. 
Today, Congress must follow that precedent and begin to curb 
the increase in spending on nonessential activities.''
    Since 2000, the Federal Government has spent almost $1.5 
billion to underwrite conferences or to send Federal employees 
to meetings. Some of the more dubious examples include:
    The Department of Labor sending employees to the New York 
State Fair (more details in the hearing). The Department of 
Agriculture is sending people to an elephant training 
conference in Florida. The Department of Interior spending 
$722,000 to send 125 staff to a conference 70 miles outside of 
Washington, D.C. USAID has increased its conference spending by 
147 percent since 2001. The Department of Education has 
increased such spending 261 percent in 6 years.
    Witnesses: Lisa Fiely, Chief Financial Officer, U.S. Agency 
for International Development; Nina Rose Hatfield, Deputy 
Assistant Secretary, Policy, Management, and Budget, U.S. 
Department of the Interior; Lee J. Lofthus, Acting Assistant 
Attorney General for Administration, U.S. Department of 
Justice; Michell Clark, Assistant Secretary for Management, 
U.S. Department of Education; Edward C. Hugler, Deputy 
Assistant Secretary for Operations, Office of the Assistant 
Secretary for Administration and Management, U.S. Department of 
Labor; Clarence C. Crawford, Chief Financial Officer, U.S. 
Office of Personal Management; Eugene Schied, Deputy Chief 
Financial Officer, U.S. Department of Homeland Security; 
Jeffery K. Nulf, Deputy Assistant Secretary for Administration, 
U.S. Department of Commerce; Richard Holcomb, Deputy Chief 
Financial Officer, and Acting Deputy Assistant Secretary for 
Headquarters Operations, U.S. Department of the Treasury; and 
Charles R. Christopherson, Jr., Chief Financial Officer, U.S. 
Department of Agriculture.
Deconstructing the Tax Code: Uncollected Taxes and Issues of 
        Transparency (September 26, 2006)
    The hearing examined the latest ``tax gap'' estimate which 
IRS has priced at $345 billion for tax year 2001. The tax gap 
is the difference between the amount of tax imposed on 
taxpayers for a given year and the amount that is paid 
voluntarily and timely. At 11 a.m. that day, the Treasury 
Department released their strategy for reducing the tax gap.
    The Internal Revenue Service's (IRS) most recent updates 
issued in February 2006 estimate the tax gap for the 2001 tax 
year to be $345 billion. The tax gap estimate is unreliable: 
The IRS itself has concerns with the overall tax gap estimate 
they have come up with because some areas of the estimate rely 
on old data; and it excludes many components of the tax gap. 
Due to antiquated methodologies and systems, IRS cannot report 
more recent data than tax year 2001.
    Witnesses: Hon. Mark Everson, Commissioner, Internal 
Revenue Service; Hon. J. Russell George, Treasury Inspector 
General for Tax Administration (TIGTA), U.S. Department of the 
Treasury; Nina E. Olson, National Taxpayer Advocate; Jay A. 
Soled, Professor of Taxation, Rutgers University; Stephen J. 
Entin, President and Executive Director, Institute for Research 
on the Economics of Taxation; Jason Furman, Non-Resident Senior 
Fellow, Center on Budget and Policy Priorities, and Visiting 
Scholar, New York University Wagner Graduate School of Public 
Service; and Neal Boortz, Co-Author, ``The Fair-Tax Act.''
An Assessment of the Improper Payments Information Act of 2002 
        (December 5, 2006)
    The Subcommittee held a hearing to review and assess the 
Improper Payments Information Act (IPIA) of 2002. This was the 
fourth oversight hearing the Subcommittee held on payment 
errors made by the Federal Government. However, while previous 
hearings focused on which agencies were out of compliance with 
the Act, the purpose of this hearing was to assess the 
successes and shortcomings with the statute and its 
corresponding guidance issued by the Office of Management and 
Budget (OMB).
    Witnesses: Hon. David M. Walker, Comptroller General of the 
United States, U.S. Government Accountability Office; and Hon. 
Clay Johnson, III, Deputy Director for Management, U.S. Office 
of Management and Budget.

                            II. Legislation

    The following bills were considered by the Subcommittee on 
Federal Financial Management, Government Information, and 
International Security during the 109th Congress:
Measures referred to the Subcommittee upon which hearings were held or 
        other action was taken
    S. 1495, Obligation of Funds Transparency Act of 2005. This 
bill would prohibit a Federal agency from obligating funds made 
available in an appropriation Act to implement an earmark that 
is included in a congressional report accompanying such Act, 
unless the earmark is also included in that Act. Senator John 
McCain and cosponsor Senator Tom Coburn introduced S. 1495 on 
July 26, 2005. Senator Jon Kyl was later added as a cosponsor. 
On January 27, 2006, the bill was referred to the Subcommittee 
on Federal Financial Management, Government Information, and 
International Security. The Subcommittee held a hearing 
regarding legislation on March 16, 2006.
Measures which did not advance beyond referral to the Subcommittee
    S. 2695, Federal Research Public, Access Act of 2006. This 
bill requires each Federal agency with extramural research 
expenditures of over $100 million to develop a specified 
Federal research public access policy that is consistent with 
and advances the purposes of the agency. Making each Federal 
research public access policy applicable to: (1) researchers 
employed by the Federal agency whose works remain in the public 
domain; and (2) researchers funded by the agency with specific 
exclusions, requiring the submission of annual reports by each 
Federal agency on its Federal research public access policy. 
The bill was introduced by Senator John Cornyn and cosponsor 
Senator Joseph I. Lieberman on May 2, 2006. Senator Jeff 
Sessions was later added as a cosponsor on May 8, 2006. The 
bill was referred to the Subcommittee on Federal Financial 
Management, Government Information, and International Security 
on May 26, 2006.
    S. 2718, Website for American Taxpayers to Check and Help 
Deter Out-of-control Government Spending Act or ``WATCHDOGS 
Act.'' This Act defines: (1) a ``contractor entity'' as any 
entity that receives Federal funds as a general contractor or 
subcontractor at any tier in connection with Federal contracts; 
and (2) ``covered entity'' as any entity that receives Federal 
funds through a grant or loan, with exception. Requires each 
contractor entity and covered entity to: (1) apply to the 
Office of Management and Budget (OMB) for a Federal funds 
application number; and (2) annually provide OMB with specified 
information. The bill was introduced by Senator John Ensign on 
May 4, 2006. The bill was referred to the Subcommittee on 
Federal Financial Management, Government Information, and 
International Security on May 26, 2006.

                            III. GAO Reports

    The following reports were issued by the Government 
Accountability Office at the request of the Chairman and/or 
Ranking Member of the Subcommittee on Federal Financial 
Management, Government Information, and International Security 
during the 109th Congress:
    DOD Business Transformation: Defense Travel system 
Continues to Face Implementation Challenges. GAO-06-18 (January 
18, 2006)
    Cooperative Threat Reduction: DOD Needs More Reliable Data 
to Better Estimate the Cost and Schedule of the Schuch'ye 
Facility. GAO-06-692 (May 31, 2006)
    2010 Census: Census Bureau Needs to Take Prompt actions to 
Resolve Long-standing and Emerging Address and Mapping 
Challenges. GAO-06-272 (June 15, 2006)
    Internet Infrastructure: DHS Faces Challenges in Developing 
a Joint Public/Private Recovery Plan. GAO-06-672 (June 16, 2006
    Community Development Black Grants: Program Offers 
Recipients Flexibility but Oversight Can Be Improved. GAO-06-
732 (July 28, 2006)
    Security Assistance: Lapses in Human Rights Screening in 
North African Countries Indicate Need for Further Oversight. 
GAO-06-850 (July 31, 2006)
    Disaster Relief: Governmentwide Framework Needed to Collect 
and Consolidate Information to Report on Billions in Federal 
Funding for the 2005 Gulf Coast Hurricanes. GAO-06-834 
(September 6, 2006)
    Defense Travel System: Reported Savings Questionable and 
Implementation Challenges Remain. GAO-06-980 (September 26, 
2006)
    Improper Payments: Agencies' Fiscal Year 2005 Reporting 
under the Improper Payments Information Act Remains Incomplete. 
GAO-07-92 (November 14, 2006)

                SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

                   MANAGEMENT, THE FEDERAL WORKFORCE,

                      AND THE DISTRICT OF COLUMBIA

                     Chairman: George V. Voinovich

                Ranking Minority Member: Daniel K. Akaka

                              I. Hearings

    The Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia held the 
following 27 hearings during the 109th Congress:
Unlocking the Potential Within Homeland Security: The New Human 
        Resources System, February 10, 2005)
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
Government Accountability Office; Ronald J. James, Chief Human 
Capital Officer, U.S. Department of Homeland Security; Ronald 
P. SandersAssociate Director for Strategic Human Resources 
Policy, U.S. Office of Personnel Management; Darryl A. 
Perkinson, National Vice President, Federal Managers 
Association; Colleen M. Kelley, President, National Treasury 
Employees Union; John Gage, National President, American 
Federation of Government Employees; Richard N. Brown, 
President, National Federation of Federal Employees; andKim 
Mann, on behalf of the National Association of Agriculture 
Employees.
    The hearing examined the new human resource management 
system that was designed jointly by the Department of Homeland 
Security and the Office of Personnel Management.
    The first panel discussed the methods used to create the 
new regulation, including a meet and confer process with labor 
unions. Comptroller General David Walker outlined three 
potential weaknesses in the plan: (1) a limited collective 
bargaining process; (2) unclear core competencies; and (3) 
permitting the use of a pass/fail rating scale. Mr. James 
stated that the unions concerns about the new pay-for-
performance system led to a longer implementation time frame 
and expanded training for managers. The panel expressed an 
overall feeling of success with the process, which they believe 
creates a modern and flexible personnel system, and thanked the 
unions for their input; noting that it improved the 
regulations.
    The second panel outlined the concerns of the labor unions 
regarding the new regulations. The witnesses argued that the 
regulations did not meet statutory mandates. Ms. Kelley and Mr. 
Gage expressed concerns on behalf of the unions regarding 
changes to the collective bargaining and pay systems.
Programs in Peril: An Overview of the GAO High-Risk List (February 17, 
        2005)
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
Government Accountability Office; and Hon. Clay Johnson, III, 
Deputy Director for Management, Office of Management and 
Budget.
    The hearing focused on the Government Accountability 
Office's (GAO) 2005 High-Risk Report. Comptroller General 
Walker provided an overview of the 2005 high-risk report. He 
summarized actions that had been taken or were underway to 
address high-risk areas. Mr. Walker stated, ``Our objective for 
the high-risk list is to bring `light' to these areas as well 
as `heat' to prompt needed actions.'' Mr. Walker also mentioned 
that, in the past, high-risk areas were identified because of 
their increased susceptibility to waste, fraud, abuse, and 
mismanagement. However, in order to promote greater 
effectiveness and accountability of key programs and 
operations, GAO expanded their high-risk designation to 
encompass government-wide areas.
    Deputy Director Johnson offered the Administration's 
perspective on the report. He pointed out that those agencies 
which have resolved their management problems have done so 
because they have had four key elements in place: (1) a top 
management commitment to resolving the problem; (2) a clear 
picture of what needs to be accomplished; (3) a clear, 
aggressive action plan for solving the problem; (4) a clear 
definition of who is responsible. Mr. Johnson promised to work 
with Congress to develop a clear strategy to address management 
deficiencies highlighted by GAO's high-risk list.
Critical Mission: Ensuring the Success of the National Security 
        Personnel System (March 15, 2005)
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
Government Accountability Office; Hon. Charles S. Abell, 
Principal Deputy Under Secretary for Personnel and Readiness, 
U.S. Department of Defense; George Nesterczuk, Senior Advisor 
to the Director on the Department of Defense, U.S. Office of 
Personnel Management; Richard Oppedisano, National Secretary, 
Federal Managers Association; John Gage, National President, 
American Federation of Government Employees (AFL-CIO); and 
Gregory J. Junemann, President, International Federation of 
Professional and Technical Engineers AFL-CIO.
    The hearing examined the proposed regulations for the 
National Security Personnel System, which were jointly 
published by the Department of Defense and Office of Personnel 
Management on February 14, 2005, for the National Security 
Personnel System. The reforms underway at the Department of 
Defense will affect not just the Department of Defense, but 
also the workforce of the Federal Government as a whole.
    The Department of Defense and the Office of Personnel 
Management presented testimony to describe the new system and 
summarized the process utilized to develop it, including 
establishing a program executive office, conducting a series of 
town hall meetings, and engaging in a meet and confer process 
with the unions of the Department. Comptroller General David 
Walker identified several areas of concern, including the lack 
of information on the details of implementation, which the 
Department will publish in subsequent implementing issuances, 
as well as the absence of a formalized process to keep 
employees involved in the implementation process. The second 
panel of witnesses was representative of employee 
organizations. The witnesses expressed numerous, serious 
concerns with the National Security Personnel System and with 
the process used to develop it.
Monitoring CMS' Vital Signs: Implementation of the Medicare 
        Prescription Drug Benefit (April 5, 2005)
    Witnesses: Mark McClellan, M.D., Ph.D., Administrator, 
Centers for Medicare and Medicaid Services; Marcia Marsh, Vice 
President for Agency Partnerships, Partnership for Public 
Service; and Ann Womer Benjamin, Director, Ohio Department of 
Insurance.
    The hearing reviewed the ability of the Centers for 
Medicare and Medicaid Services (CMS) to implement the Medicare 
Prescription Drug Benefit, authorized by the Medicare 
Modernization Act (MMA), Public Law 108-173.
    Dr. McClellan testified that CMS had done a significant 
amount of work to implement all of the provisions of the MMA in 
such a way that the new benefits are easily understood and 
accessed by beneficiaries. Dr. McClellan also explained the 
challenges that lay ahead as the agency rolls out drug coverage 
to the 42 million Medicare beneficiaries on January 1, 2006. He 
explained how the agency was developing and implementing a 
comprehensive education and outreach campaign, including 
grassroots participation, to ensure beneficiaries have the 
support they need to select a plan that is best for them. CMS 
has also worked with potential drug plan sponsors and providers 
to ensure the agency has been responsive to their concerns 
through regulations and guidance. In addition, to ensure that 
CMS has the right people to carry out the new programs required 
by MMA, the agency has revamped its human capital management 
plans and hiring processes.
    On the second panel, Ms. Marsh discussed the Partnership 
for Public Service's work with CMS to reform its human capital 
strategies, specifically their work on the ``Extreme Hiring 
Makeover.'' Ms. Marsh testified that CMS was an ideal candidate 
for the makeover in terms of its (1) leadership commitment; (2) 
strategic need; (3) recognition of the need for change; and (4) 
willingness to put together a talented project team to work 
through the process. The Partnership has been able to map the 
hiring process and improve the agency's workforce, in light of 
the additional staff required to effectively implement the new 
benefit.
    Ms. Benjamin testified that since the passage of the MMA, 
CMS has been instrumental in helping the Ohio Seniors Health 
Insurance Information Program (OSHIIP) with information and 
resources to prepare and respond to the many changes that are 
coming to Medicare. Ms. Benjamin indicated that outreach and 
educational efforts have increased at the State and local 
levels with the support and coordination of CMS.
Passing the Buck: A Review of the Unfunded Mandates Reform Act (April 
        14, 2005)
    Witnesses: Orice M. Williams, Director, Strategic Issues, 
U.S. Government Accountability Office;Hon. John D. Graham, 
Administrator, Office of Information and Regulatory Affairs, 
Office of Management and Budget; Elizabeth Robinson, Deputy 
Director, Congressional Budget Office; Hon. John Hurson, 
Delegate, Maryland House of Delegates, and President, National 
Conference of State Legislatures; Hon. Colleen Landkamer, 
Commissioner; Blue Earth County, Minnesota, and First Vice 
President, National Association of Counties; and Hon. Nick 
Licata, City Council Member, Seattle, Washington, on behalf of 
the National League of Cities.
    The hearing reviewed the impact that the Unfunded Mandates 
Reform Act (UMRA) has had on Federal, State, and local 
governments, and explored whether or not changes are necessary 
to strengthen the statute. The hearing was held to mark the 10-
year anniversary of the enactment of UMRA, P.L. 104-4. To 
coincide with this anniversary, Senator Voinovich requested 
that the Government Accountability Office (GAO) undertake a 
two-part review of UMRA. The first report provided a general 
overview of UMRA. The second GAO report, released publicly in 
conjunction with this hearing, explored the strengths and 
weaknesses of UMRA and out-lined options for enhancing current 
law.
    During the first panel, Ms. Williams discussed the findings 
of both reports. GAO found that, although UMRA has discouraged 
and limited Federal mandates, the law's procedures for the 
identification and analysis of intergovernmental and private 
sector mandates are very complex. Moreover, some potential 
mandates are enacted through procedures that do not subject 
them to UMRA. For example, GAO noted that UMRA does not require 
automatic review of potential mandates contained in 
appropriation bills.
    As the Federal agency responsible for reviewing UMRA 
statements and regulations issued by Executive Branch agencies, 
OMB plays a key role in the process for identifying unfunded 
mandates. Dr. Graham said that 0MB works to ensure that Federal 
rulemaking complies with UMRA's consultation and analysis 
requirements. Dr. Robinson discussed the Congressional Budget 
Office's (CBO) role in the UMRA process, which is to provide 
automatic UMRA statements for bills reported by authorizing 
committees. The UMRA statements specify whether the bill 
contains any intergovernmental or private sector mandates at or 
above UMRA thresholds. Dr. Robinson testified that since UMRA 
was enacted, CBO has conducted more than 5,200 UMRA reviews.
    The second panel, consisting of State and local elected 
officials, discussed the impact that UMRA has had on their 
ability to govern. State and local representatives provided a 
favorable review of UMRA, but were concerned that the law's 
definitions, exceptions, exclusions, and thresholds still 
allowed unfunded mandates to be passed from the Federal 
Government to State and local governments. Delegate John Hurson 
testified on behalf of the National Conference of State 
Legislatures (NCSL). Delegate Hurson said that NCSL has 
identified a $51 billion cost shift in Federal funding to 
States for fiscal years 2004 and 2005. County Commissioner 
Colleen Landkamer testified on behalf of the National 
Association of Counties (NACO). Commissioner Landkamer stressed 
the importance of strengthening UMRA. She said that nearly $7 
out of every $10 that Minnesota counties spend are for programs 
that have been mandated by the Federal and State governments. 
Councilmember Nick Licata, from the city of Seattle, 
Washington, testified on behalf of the National League of 
Cities. Mr. Licata discussed several ways to strengthen UMRA, 
including reconsidering the threshold amount in UMRA and 
enhancing the existing statutory language requiring Federal 
agency consultation with State and local governments in the 
development of Federal regulations.
Employing Federal Workforce Flexibilities: A Progress Report (April 21, 
        2005)
    Witnesses: Marta Brito Perez, Associate Director for Human 
Capital Leadership and Merit System Accountability, U.S. Office 
of Personnel Management; Eileen R. Larence, Director, Strategic 
Issues, U.S. Government Accountability Office; Evelyn M. White, 
Principle Deputy and Acting Assistant Secretary for 
Administration and Management, Department of Health and Human 
Services; Hon. Jeffery K. Nulf, Deputy Assistant Secretary for 
Administration, U.S. Department of Commerce; Rafael DeLeon, 
Director, Office of Human Resources, Environmental Protection 
Agency; and Vicki A. Novak,Assistant Administrator for Human 
Capital Management and Chief Human Capital Officer, National 
Aeronautics and Space Administration.
    The hearing continued a Subcommittee's oversight of the 
government's human capital practices by conducting an oversight 
hearing of recently enacted government-wide workforce 
flexibilities available to Federal agencies. Witnesses' 
testimony demonstrated significant progress by Federal 
departments and agencies in implementation, understanding, and 
the use of the flexibilities, as well as identified areas of 
continued concern. The Office of Personnel Management has 
improved its guidance and training programs for the human 
resources professionals of Federal departments and agencies. 
The Subcommittee determined that agencies have progressed in 
utilizing the flexibilities in a strategic manner; however, 
there are many opportunities for improvement and coordination 
throughout the government.
Waging War on Waste: An Examination of DOD's Business Practices (April 
        28, 2005)
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
Government Accountability Office (GAO); Hon. Clay Johnson, III, 
Deputy Director for Management, Office of Management and 
Budget; and Bradley M. Berkson, Acting Deputy Under Secretary 
of Defense for Logistics and Materiel Readiness, U.S. 
Department of Defense.
    The hearing focused on the Department of Defense's (DOD) 
business transformation efforts, which is considered by the 
Government Accountability Office (GAO) to be DOD's overarching 
high-risk area. For years, GAO has reported that DOD wastes 
billions of dollars due to programmatic and management 
inefficiencies resulting in a lack of transparency and 
accountability.
    The hearing reviewed the Department's plans to improve and 
streamline the current business practices, given the more than 
4,100 business systems within DOD. Comptroller General Walker 
testified that DOD continues to confront pervasive, decades-old 
management problems related to its business operations. To make 
the necessary improvements, GAO recommended that DOD: (1) draft 
an integrated strategic business plan coupled with a well-
defined business enterprise architecture, in order to guide 
their modernization efforts; (2) establish central control of 
systems investments; and (3) establish a centralized leadership 
position called a Chief Management Officer (CMO), created by 
Congress, to provide sustained leadership for the Department's 
transformation efforts.
    OMB's Deputy Director for Management, Clay Johnson, 
testified that 0MB is working with DOD and GAO to establish a 
comprehensive plan for improving the Department's supply chain 
management process. He stated that 0MB will ensure that DOD 
establishes a business plan complete with action items and 
approximate dates for meeting these milestones. Bradley 
Berkson, Acting Deputy Under Secretary of Defense for Logistics 
and Materiel Readiness, stated that the creation of a CMO would 
complicate the Department's existing management balance, 
reporting requirements, and chain of command. He said that the 
Department truly needs high-performing employees with the 
background necessary for helping to transform the business 
operations of one of the most complex organizations in the 
world.
Safeguarding the Merit System: A Review of the U.S. Office of Special 
        Counsel (May 24, 2005)
    Witness: Hon. Scott J. Bloch, Special Counsel, U.S. Office 
of Special Counsel.
    The purpose of the hearing was to review several of Special 
Counsel Scott Bloch's policy and management decisions. 
Specifically, Mr. Bloch was questioned on the methods his 
agency employed to reduce the backlog of whistleblower 
disclosure, prohibited personnel practice, and Hatch Act cases 
at the Office of Special Counsel (OSC).
    Mr. Bloch was also asked about the January 2005 OSC 
restructuring plan, which established a Midwest field office in 
Detroit, Michigan. To open the new field office, Mr. Bloch 
proposed to transfer 12 employees from Washington, DC, to the 
Detroit, San Francisco, and Dallas field offices through a 
process known as a directed reassignment. The Subcommittee 
questioned Mr. Bloch's timeline for implementing the 
restructuring, including the time permitted to employees for 
deciding to accept the directed reassignment. Finally, Mr. 
Bloch faced questions on 0SC's handling of sexual orientation 
discrimination complaints. In April 2004, after a 2-month 
review, OSC affirmed its jurisdiction over discrimination on 
the basis of sexual orientation and continued accepting claims 
from affected individuals.
Finding and Fighting Fakes: Reviewing the Strategy Targeting Organized 
        Piracy (June 14, 2005)
    Witnesses: Jeffrey O. Evans, President and Chief Executive 
Officer, The Will-Burt Company, Orrville, Ohio; John W. Dudas, 
Under Secretary of Commerce for Intellectual Property, and 
Director, U.S. Patent and Trademark Office; Victoria Espinel, 
Acting Assistant, U.S. Trade Representative; Daniel Baldwin, 
Acting Assistant Commissioner, Office of Strategic Trade, U.S. 
Customs and Border Protection, Department of Homeland Security; 
Laura H. Parsky, Deputy Assistant Attorney General, Criminal 
Division, Department of Justice; Loren Yeager, Director, 
International Affairs and Trade, U.S. Government Accountability 
Office; Brad Huther, Director, U.S. Counterfeiting and Piracy 
Initiative, U.S. Chamber of Commerce; and Franklin J. Vargo, 
Vice President, International Economic Affairs, National 
Association of Manufacturers.
    The purpose of the hearing was to evaluate the 
Administration's Strategy Targeting Organized Piracy (STOP!), 
which was announced in October 2004, to address the growing 
problem of intellectual property theft and to help protect 
American businesses and consumers from counterfeit and pirated 
goods. This was the fourth in a series of trade-related 
hearings held by OGM dating back to the 107th Congress.
    During the first panel, Mr. Evans testified about the 
problems the Will-Burt Company has had with intellectual 
property theft in China. The company develops, manufactures, 
and distributes a mast that sets atop police and rescue 
vehicles called a ``Night-Scan.'' It has secured patent and 
trademark protection in China for its Night-Scan products. The 
company entered into an exclusive licensing agreement with 
Shenzhen Superway, pursuant to which Shenzhen Superway would be 
Will-Burt's sole distributor in China. The contract contained a 
non-compete clause. Nevertheless, within a year of signing the 
agreement, Will-Burt learned that Shenzhen Supeway had reverse 
engineered its products and was selling them outside its 
agreement with Will-Burt. Due to the sales of these pirated 
Night-Scan products, Will-Burt's sales in China have fallen by 
approximately 50 percent. The company also has incurred 
significant cost in seeking to regain its market share.
    During the second panel, representatives from Federal 
Government discussed their roles in implementing the STOP! 
initiative. As part of the initiative, the Patent and Trademark 
Office manages a hotline to help businesses obtain the 
information they need to protect their intellectual property, 
and to enforce their intellectual property rights in the United 
States and abroad. There also is a website for STOP!, 
www.stopfakes.gov. The Commerce Department is conducting a 
series of road shows to educate businesses, especially small 
and medium-sized businesses, on how to protect their IPR 
rights, including by registering their trademarks with U.S. 
Customs and Border Protection at the Department of Homeland 
Security, which provides a means to stop the importation of 
counterfeit goods at the U.S. border. Under STOP!, the 
Administration is providing a variety of intellectual property 
enforcement training and technical assistance activities within 
the government. The Department of Justice established a Task 
Force on Intellectual Property to study ways the Department 
could improve and enhance its protection of intellectual 
property. The Task Force reported its recommendations this year 
and the Department is currently implementing many of them. The 
Administration is working to improve the cooperation between 
the Federal Government and the private sector on IP protection 
and enforcement. The Administration is also working to build an 
international coalition to fight the trade in fake products by 
reaching out to members of the G-8, the Organization for 
Economic Cooperation and Development and the Asia-Pacific 
Economic Cooperation Forum. GAO testified that its review of 
STOP! found that it has resulted in several new actions and 
emphasized other ongoing efforts, but that intellectual 
property enforcement in many countries remains weak.
    During the third panel, Mr. Huther and Mr. Vargo praised 
STOP! and indicated that their organizations, the Chamber of 
Commerce and the National Association of Manufacturers, 
respectively, applauded the Administration's efforts to improve 
IP enforcement. They also discussed their organizations' 
efforts to build private sector coalitions to fight IP theft. 
Mr. Vargo urged Congress to pass H.R. 32, the ``Stop 
Counterfeiting in Manufactured Goods Act.''
Assess Delayed: Fixing the Security Clearance Process (June 28, 2005)
    Witnesses: Derek B. Stewart, Director, Defense Capabilities 
and Management, U.S. Government Accountability Office; Kathy L. 
Dillaman, Deputy Associate Director for Human Resource Products 
and Services, Center for Federal Investigative Services; U.S. 
Office of Personnel Management; and Heather Anderson, Director, 
Strategic Integration, Office of the Deputy Under Secretary of 
Defense, Counterintelligence and Security, and Acting Director, 
Defense Security Service, U.S. Department of Defense.
    This is the third in a series of hearings that the 
Subcommittee has held in the 109th Congress on DOD programs 
designated as high-risk by the Government Accountability Office 
(GAO).
    This hearing examined the security clearance process, which 
was designated by GAO as one of DOD's high-risk areas in 
January 2005. The hearing also explored the transfer of 
investigative responsibilities from DOD to the Office of 
Personnel Management (OPM), including the impact that this 
shift is having on the ability to investigate and adjudicate 
security clearances in a thorough and expeditious manner. In 
addition, the hearing allowed DOD and OPM to discuss the steps 
they are taking to remove the personnel security clearance 
program from the high-risk list.
    Mr. Stewart began the testimony by outlining the problems 
with the security clearance process. Mr. Stewart said that DOD 
is uncertain about the number and level of clearances that it 
requires and has experienced problems submitting investigation 
requests. However, he noted that the Department has taken steps 
to address these problems. Ms. Dillaman and Ms. Anderson 
detailed the actions taken by their respective agencies to 
transfer DOD's security clearance investigations process from 
the Department to OPM. In addition, Ms. Dillaman said that OPM 
is working to ensure that adequate resources are available to 
better manage the current backlog of investigations. Ms. 
Anderson said that the transfer of DOD's security clearance 
investigation process to OPM would provide for a more efficient 
and effective use of trained, experienced, and available staff 
to conduct the necessary background investigations.
    Overall, each witness recognized that DOD and OPM have made 
significant progress in streamlining and improving the security 
clearance process,but that a great deal of work needs to be 
completed before this issue can be removed from the GAO high-
risk list.
The War on Terrorism: How Prepared Is the Nation's Capital? (July 14, 
        2005)
    Witnesses: William O. Jenkins, Jr., Director, Homeland 
Security and Justice Issues, U.S. Government Accountability 
Office (GAO); George W. Foresman, Assistant to the Governor of 
Virginia for Commonwealth Preparedness, Commonwealth of 
Virginia; Dennis R. Schrader, Director of the Governor's Office 
of Homeland Security in the State of Maryland; Thomas J. 
Lockwood, Director, Office of National Capital Region 
Coordination, U.S. Department of Homeland Security; and Edward 
D. Reiskin, Deputy Mayor for Public Safety and Justice for the 
District of Columbia.
    The hearing addressed the progress that has been made 
within the National Capital Region (NCR) regarding terrorism 
preparedness, emergency training and planning, the spending of 
homeland security grant funding, and whether the NCR can be 
used as a model for homeland security coordination in other 
regions of the country.
    During the hearing, GAO testified that is was important 
that the NCR have a strategic plan and gave recommendations of 
what should be included in such a plan. NCR officials stated 
that they were in the process of finalizing a strategic plan 
and expected that it would be released in September 2005. In 
addition, GAO stated that the NCR faces several challenges in 
managing Federal funds in a way that maximizes first responder 
capacity an preparedness while minimizing duplicative 
expenditures. To address some of GAO's concerns, the District 
of Columbia Office of Homeland Security developed an online 
database that tracks Urban Areas Security Initiative (UASI) 
grants. However, the database does not track State Homeland 
Security Grant Program (SHSGP) grants. GAO has recommended that 
the NCR region develop a system that tracks all grants to 
maximize preparedness and minimize duplicative programs.
Alternative Personnel Systems: Assessing Progress in the Federal 
        Government (September 27, 2005)
    Witnesses:Hon. Dan G. Blair, Deputy Director, U.S. Office 
of Personnel Management; Hon. David M. Walker, Comptroller 
General, U.S. Government Accountability Office; Jeffery K. 
Nulf, Deputy Assistant Secretary for Administration, U.S. 
Department of Commerce; Arleas Upton Kea, Director, Division of 
Administration, Federal Deposit Insurance Corporation; Dr. 
Hratch G. Semerjian, Deputy Director, National Institute of 
Standards and Technology, Technology Administration, U.S. 
Department of Commerce; C. Morgan Kinghorn, Jr., President, 
National Academy of Public Administration; Colleen M. Kelley, 
National President, National Treasury Employees Union; and John 
Gage, National President, American Federation of Government 
Employees.
    This hearing identified the broad principles of lessons 
learned through Federal departments and agencies that have 
developed personnel systems different from the traditional 
Title 5 General Schedule. The first of the three panels of 
witnesses described the broad principles of lessons learned, 
and attempted to make the case for government-wide reform.
    The second panel of witnesses provided specific experiences 
of implementing alternative personnel systems at the Department 
of Commerce, the Federal Deposit Insurance Corporation, and the 
National Institute of Standards and Technology, and how the 
principles identified have been incorporated.
    The third panel of witnesses provided an alternative 
perspective from a think tank and two Federal employee unions. 
The National Academy of Public Administration echoed the 
sentiments of the first panel in arguing for government-wide 
reform based upon what has been learned in more than 20 years 
of alternative systems in the Federal Government. However, the 
National Treasury Employees Union and the American Federation 
of Government Employees expressed the opposite opinion. Their 
testimonies identified the experiences of the unions working 
with agencies under such systems. In the experience of NTEU and 
AFGE, performance based pay systems do not work and employees 
are unhappy under these systems.
From Factory to Foxhole: Improving DOD Logistics (October 6, 2005)
    Witnesses:Ken Krieg, Under Secretary of Defense for 
Acquisition, Technology, and Logistics, U.S. Department of 
Defense; Hon. Clay Johnson, III, Deputy Director for 
Management, Office of Management and Budget; and William M. 
Solis, Director, Defense Capabilities and Management, U.S. 
Government Accountability Office
    This was the fourth in a series of hearings that the 
Subcommittee held in the 109th Congress on programs deemed to 
be high-risk by the Government Accountability Office (GAO) and 
the third specifically on the Department of Defense (DOD). This 
hearing examined DOD's supply chain management process, which 
was first designated by GAO as high-risk in 1990.
    The hearing explored the steps DOD has taken to implement 
its high-risk plan on the supply chain management program, how 
the departments will measure success, and what strategies the 
Office of Management and Budget (OMB) and GAO will employ to 
ensure that the Department is meeting its goals.During the 
hearing, Mr. Krieg provided an overview of the current 
logistics structure at the Department, which encompasses a 
workforce of more than one million people, including active 
duty and reserve military, and civilians who manage an 
inventory valued at approximately $77 billion. In addition, Mr. 
Krieg summarized DOD's ongoing efforts to improve and enhance 
the efficiency and accountability of the supply chain, 
including the placement of active Radio Frequency 
Identification tags on all loaded ocean containers and air 
pallets shipped by the Defense Logistics Agency into Iraq and 
Afghanistan. Mr. Krieg also outlined the Department's next 
steps, which include the development of metrics and benchmarks 
to measure DOD's supply chain management progress.
    To ensure successful implementation of the DOD supply chain 
plan, Mr. Johnson and Mr. Solis testified that OMB and GAO 
would continue to closely monitor this important issue. Mr. 
Johnson also said that 0MB is working with the Department and 
other agencies with high-risk areas to improve the performance 
of those programs. Mr. Solis said that GAO would take a three-
step approach to evaluate DOD's supply chain performance. 
First, GAOwill assess DOD's progress in implementing 
recommendations made prior to GAO reports. Second, GAO 
anticipates evaluating several of DOD's supply chain management 
activities as part of their planned engagements over the next 2 
years. And third, GAO expects to work with other audit agencies 
to coordinate audit coverage of the initiatives, metrics, and 
data system validity.
Access Delayed: Fixing the Security Clearance Process, Part II 
        (November 9, 2005)
    Witnesses: Hon. Linda M. Springer, Director, U.S. Office of 
Personnel Management, accompanied by Kathy Dillaman, Associate 
Director, Federal Investigative Services division, U.S. Office 
of Personnel Management; Hon. Clay Johnson, III, Deputy 
Director for Management, U.S. Office of Management and Budget; 
and Derek B. Stewart, Director, Defense Capabilities and 
Management, U.S. Government Accountability Office.
    This was the second in a series of hearings held by the 
Subcommittee to examine the Federal Government's security 
clearance process during the 109th Congress. The hearing 
examined two critical components of reforming this process. 
First, it reviewed Executive Order No. 13381, issued by 
President Bush on June 27, and the steps that the Office of 
Management and Budget (0MB) has taken to implement the policy. 
Second, it examined the Office of Personnel Management's (OPM) 
plan to address the long-standing backlog of security clearance 
investigations, released on November 8, 2005.
    During the hearing, OPM Director Springer unveiled a 
strategic plan that includes actions the agency will take to 
meet the timeliness standards for investigating security 
clearances, as required by the Intelligence Reform and 
Terrorism Prevention Act of 2004, P.L. 108-796. The strategic 
plan, which was developed jointly with OPM, OMB, and major 
clearance granting agencies across the government, presents 
five reports containing benchmarks, measures, and desired 
outcomes that will track progress on the security clearance 
process. The reports are: The reports are: (1) Clearance 
Granting Agency Reports; (2) OPM Investigation Workloads and 
Processing Timeliness; (3) National Agency Record Repository 
Timeliness; (4) Agencies with Delegated Investigative 
Authority; and (5) Clearance Granting Agencies use of E-
Clearance Tools.
    Mr. Johnson outlined the steps the Administration is taking 
to improve the security clearance process, including the 
establishment of a Reciprocity Working Group to hold agencies 
countable for honoring an employee's security clearance among 
Federal agencies. He also stressed the overwhelming level of 
government-wide support for, and involvement in, streamlining 
the security clearance process.
    Mr. Stewart testified that GAO was encouraged by the level 
of commitment demonstrated by 0MB and OPM in the preparation of 
the government's strategic plan. He also characterized the plan 
as an important first step toward removing the security 
clearance process from the GAO high-risk list. However, Mr. 
Stewart discussed some concerns with the plan, including the 
inherent short-comings for measuring the quality of the 
security clearance process. In response, OPM explained its 
methods for measuring quality.
Enhancing Educational and Economic Opportunity In the District of 
        Columbia (February 28, 2006)
    Witnesses: Hon. Anthony Williams, Mayor, District of 
Columbia, Hon. Sally L. Stroup, Assistant Secretary for Post-
Secondary Education, U.S. Department of Education; and Paul 
Hoffman, Deputy Assistant Secretary for Fish and wildlife and 
Parks, U.S. Department of the Interior.
    The purpose of this hearing was to examine three pieces of 
legislation that would impact the District of Columbia. The 
bills are S. 2060. a bill to extend the District of Columbia 
College Access Act of 1999, S. 1838, Federal and District of 
Columbia Government Real Property Act of 2005, and H.R. 3508, 
2005 District of Columbia Omnibus Authorization Act.
    During the hearing, Mayor Williams expressed support for 
the legislation. In his written testimony, Mayor Williams 
stated, ``these bills will have a profound impact on the 
District of Columbia over the long term.'' Mr. Hoffman 
expressed the Administration's support of S. 1838, noting 
several amendments to the legislation that the District has 
agreed to. Ms. Stroup testified on behalf of the Administration 
in support of S. 2060. Ms. Stroup stated that the 
``Administration shares Mayor Williams' goal of bettering the 
lives of the residents of the District of Columbia through 
improved educational opportunities,'' such as the District of 
Columbia Tuition Assistance Grant program, noting the 
Administration has proposed $35.1 million in funding for the 
TAG program in its FY07 budget request.
Programs In Peril: An Overview of the GAO High-Risk List--Part II 
        (March 15, 2006)
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
Government Accountability Office; and Hon. Clay Johnson, III, 
Deputy Director for Management, U.S. Office of Management and 
Budget.
    The purpose of this hearing was to conduct a mid-course 
review of the Government Accountability Office's (GAO) 2005 
high-risk series.
    During the hearing, the sixth before the Subcommittee in 
the 109th Congress on the high-risk series, both Comptroller 
General Walker and Deputy Director Johnson provided their 
assessment of the progress on improving the performance of 
programs on GAO's high-risk list. Comptroller General Walker 
noted marked improvement in several high-risk related 
activities, including the Federal Government's security 
clearance process. In addition, he praised the Administration 
on developing strategic plans, in collaboration with GAO, to 
address each high-risk area. While praising the Administration, 
Comptroller General Walker stated that sustained reform would 
only occur if the Executive Branch and Congress continued with 
stringent oversight of the high-risk program areas. Comptroller 
General also stated that some agencies, namely the Departments 
of Defense and Homeland Security, would benefit from the 
establishment of a Chief Management Officer to manage and 
oversee large-scale transformation efforts. In addition, 
Comptroller General Walker announced the designation of the 
National Flood Insurance Program as a high-risk item.
    Deputy Director Johnson, testified that OMB is currently 
ensuring that key management concepts are established Federal 
agencies with high-risk program areas. These concepts 
include:(1) top management commitment; (2) a clear picture of 
what needs to be accomplished; (3) an aggressive action plan; 
and (4) a clear definition of who is responsible. Mr. Johnson 
outlined a number of positive actions taken by the 
Administration to improve the performance of high-risk program 
areas. For example, he noted that the Department of Defense is 
enhancing its supply chain management capabilities by 
implementing a series of business practices to reduce inventory 
levels, increase the availability of supplies, and eliminate 
duplicative warehouse facilities.
The War on Terrorism: How Prepared Is the Nation's Capital--Part II 
        (March 29, 2006)
    Witnesses: Thomas Lockwood, Director, Office of National 
Capital Region Coordination, U.S. Department of Homeland 
Security; Dennis R. Schrader, Director, Governor's Office of 
Homeland Security, State of Maryland; Edward D. Reiskin, Deputy 
Mayor, Public Safety and Justice, District of Columbia; Robert 
P. Crouch, Jr., Assistant to the Governor for Commonwealth 
Preparedness, Office of Commonwealth Preparedness, Commonwealth 
of Virginia; and William O. Jenkins, Jr., Director, Homeland 
Security and Justice Issues, U.S. Government Accountability 
Office.
    This hearing was the second Subcommittee hearing during the 
109th Congress examining the National Capital Region (NCR). The 
hearing focused on the progress that the National Capital 
Region has made regarding terrorism preparedness, emergency 
training and planning, and the expenditure of homeland security 
grant funding, as well as the status of the NCR's strategic 
plan.
    Senators Voinovich, Akaka, and Warner highlighted the 
urgent need for the region to develop a strategic plan to guide 
preparedness and to effectively spend hundreds of millions of 
dollars of homeland security grant funding. NCR officials 
stated that a final strategic plan will be released in August 
2006. Furthermore, due to the poor response to Hurricane 
Katrina and the multiple entities involved with the security of 
the NCR, the Subcommittee also discussed the importance of 
establishing a clear chain of command before a catastrophic 
event happens. Finally, the Subcommittee discussed the 
importance of tracking all homeland security grants in the NCR, 
including the Urban Areas Security Initiative (UASI) grants.
Fulfilling the Promise? A Review of Veterans' Preference in the Federal 
        Government (March 30, 2006)
    Witnesses:Hon. Dan G. Blair, Deputy Director, Office of 
Personnel Management; Hon. Charles S. Ciccolella, Assistant 
Secretary for Veterans Employment and Training, U.S. Department 
of Labor; James McVay, Deputy Special Counsel, U.S. Office of 
Special Counsel. Richard Weidman, Director of Government 
Relations, Vietnam Veterans of America; Joseph C. Sharpe, Jr., 
Deputy Director, National Economics Commission, The American 
Legion; and Brian E. Lawrence, Assistant National Legislative 
Director, Disabled American Veterans.
    The hearing evaluated the Federal Government's commitment 
to its veterans through preference in hiring practices, as well 
as the impact recently enacted hiring flexibilities have had on 
the adherence to veterans' preference. As the number of 
veterans continues to increase, the Subcommittee recognizes it 
is important to ensure the Federal Government maintains its 
promise. During the hearing, the Subcommittee stressed to the 
Office of Personnel Management, the agency charged with 
responsibility for ensuring government-wide compliance with 
this merit principle, the need for it to work more closely with 
various veteran service organizations to improve communication 
between Federal agencies and our Nation's veterans to ensure 
they understand the opportunities and rights available in 
Federal employment.
Preparing for Transition: Implementation of the National Security 
        Personnel System (April 12, 2006)
    Witnesses:Maureen U. Kleintop, Deputy Chief of Staff for 
Total Fleet Force Manpower and Personnel, Commander, U.S. 
Pacific Fleet; Jeffrey T. Wataoka, Director, Human Resources 
Service Center Pacific, Department of the Navy, Michael L. 
Vajda, Director, Civilian Human Resources Agency, U.S. Army, 
Aberdeen Proving Ground, Maryland; John C. Priolo, Retired 
President, Chapter 19 Pearl Harbor Naval Shipyard, Federal 
Managers Association; Benjamin T. Toyama, International Vice 
President, Western Federal Area, International Federation of 
Professional and Technical Engineers (IFPTE) AFL-CIO CLC and 
Vice President of IFPTE Local 121, Pearl Harbor Naval Shipyard; 
and Don Bongo, Vice President, Hawaii Federal Employees Metal 
Trades Council, AFL-CIO CLC and Sergeant First Class, E-7, 
Hawaii National Guard, 227th Engineer Company (combat), 29th 
Brigade.
    The Subcommittee conducted its second oversight hearing of 
the National Security Personnel System (NSPS) during a field 
hearing at Fort DeRussy Military Reservation in Honolulu, 
Hawaii.
    The Subcommittee evaluated the training and communications 
strategy utilized in the field in preparation for 
implementation of Spiral 1.1 of the National Security Personnel 
System; approximately 254 Defense employees in Hawaii are 
scheduled to transition into NSPS in Spiral 1.1.
    The two panels of witnesses provided the Subcommittee 
contrasting testimony. The first panel of the Department of 
Defense officials detailed the intensive planning and 
preparation commands have undertaken on the local level to 
prepare for NSPS.
    The witnesses described the training that has been provided 
to the employees, including: The technical aspects of the new 
personnel system and the soft skills necessary to effectively 
implement the new performance management system; the 
communication and coordination the NSPS Program Executive 
Office; and the communication strategy used by the Department 
to keep employees involved in the development implementation 
plan.
    However, representatives from Federal employee 
organizations identified significant problems with the system. 
The Federal Managers Association identified gaps in 
communication between the Program Executive Office in 
Washington, DC, and the local command, and encouraged the 
Department to continue its commitment to managerial training. 
The International Federation of Professional and Technical 
Engineers and Federal Area Metal Trades Council disagreed with 
the assessment provided by Department of Defense officials; 
their testimony expressed the feeling that the Department has 
not involved employees sufficiently in the process.
    The testimony asserted that employees felt the intent of 
the new system was not to benefit the employee, rather to 
eliminate employee collective bargaining rights.
Progress or More Problems: Assessing the Federal Government's Security 
        Clearance Process (May 17, 2006)
    Witnesses: Hon. Clay Johnson, III, Deputy Director for 
Management, Office of Management and Budget; Kathy Dillaman, 
Associate Director, Federal Investigative Services Division, 
Office of Personnel Management; Robert Andrews, Deputy Under 
Secretary for Counterintelligence and Security, U.S. Department 
of Defense; Robert Rogalski, Special Assistant, Office of the 
Under Secretary for Intelligence, accompanied by Janice Haith, 
Acting Director for Defense Security Service, U.S. Department 
of Defense; and Derek Stewart, Director, Defense Capabilities 
and Management, U.S. Government Accountability Office.
    This was the third Subcommittee hearing held during the 
109th Congress on the Federal Government's security clearance 
process. The hearing assessed the progress of the Office of 
Personnel Management (OPM) in implementing its plan to address 
the long-standing backlog of security clearance investigations.
    In addition, the hearing examined the next steps by the 
Office of Management and Budget (OMB), once Executive Order 
13381 that expired on June 28, 2006. Mr. Johnson stated that it 
is likely OMB will continue its role of oversight on the issue 
with the intention of eventually moving ownership over to the 
Director of National Intelligence (DNI). Finally, the hearing 
addressed the temporary halt by the Defense Security Service 
(DSS) in processing industry contractor security clearances.
The Right People? Oversight of the Office of Personnel Management (June 
        27, 2006)
    Witnesses: Hon. Linda M. Springer, Director, Office of 
Personnel Management; and Hon. David M. Walker, Comptroller 
General, U.S. Government Accountability Office.
    This oversight hearing evaluated whether the Office of 
Personnel Management (OPM) is positioned to be the Federal 
Government's leader in personnel policy. OPM personnel are the 
senior advisors to the President on civil service matters, and 
its leadership is imperative to ensuring the Federal Government 
recruits and retains a talented 21st Century workforce, 
especially following the retirement of the Baby Boomer 
generation. Furthermore, the role and responsibility of OPM 
continues to increase as flexibilities in personnel policies 
must be regulated and overseen. The Government Accountability 
Office has been conducting a management review of OPM and 
identified a number of areas of concern; however, Comptroller 
General David Walker acknowledged the new OPM Director has 
begun taking the appropriate steps to correct identified 
problems.
Enhancing Employee Performance: A Hearing on Pending Legislation (June 
        29, 2006)
    Witnesses: Hon. Dan G. Blair, Deputy Director, Office of 
Personnel Management; Darryl Perkinson, National President, 
Federal Managers Association, on behalf of the Government 
Managers Coalition; Colleen M. Kelley, National President, 
National Treasury Employees Union; Jacqueline Simon, Public 
Policy Director, American Federation of Government Employees; 
and Patricia McGinnis, President and Chief Executive Officer, 
Council for Excellence in Government.
    The legislative hearing examined two bills pending before 
the Subcommittee: S. 3492, The Federal Workforce Performance 
Appraisal and Management Improvement Act, and S. 3584, The 
Federal Supervisor Training Act. The Office of Personnel 
Management (OPM) Deputy Director Dan Blair testified in support 
of both bills. The second panel of four witnesses unanimously 
supported the Federal Supervisor Training Act, but was divided 
in its support for the Federal Workforce Performance Appraisal 
and Management Improvement Act. The witness representing the 
Council for Excellence in Government expressed strong support 
of S. 3492, while witnesses for the National Treasury Employees 
Union and American Federation of Government Employees expressed 
opposition to the concept of withholding raises from employees 
and the potential for managers to use favoritism, rather than 
merit, to reward employees. The witness for the Federal 
Managers Association expressed support for the bill; however, 
he underscored his concern that in order for the changes to be 
implemented properly, agencies would need to devote significant 
resources to training the managers who would be responsible for 
executing the rigorous performance management systems required 
by the bill.
Examining the Challenges the District will Face Today, Tomorrow, and in 
        the Future (July 18, 2006)
    Witnesses: Hon. Anthony A. Williams, Mayor, District of 
Columbia; Natwar M. Gandhi, Chief Financial Officer, District 
of Columbia; Clifford B. Janey Superintendent and Chief State 
School Officer, District of Columbia Public Schools; and Alice 
M. Rivlin, Director, Greater Washington Research Program, The 
Brookings Institution.
    The hearing was a general oversight hearing on District of 
Columbia's government operations examining the successes and 
challenges the District has experienced during Mayor Williams' 
two terms. The hearing also looked ahead to the challenges that 
the new mayor will face.
    During the hearing, Mayor Williams discussed several 
challenges that arose during his 8 years which he has had to 
address, including restoring, financial stability and integrity 
to the District government and spurring economic development in 
the city. Mayor Williams went on to discuss challenges that the 
District faces now and in the future, including public safety, 
structural imbalance, and voting rights for the residents of 
the District.
Supporting the Warfighter: Assessing the DOD Supply Chain Management 
        Plan (July 25, 2006)
    Witnesses: Alan F. Estevez, Assistant Deputy Under 
Secretary of Defense, Supply Chain Integration, U.S. Department 
of Defense; and William M. Solis, Director, Defense 
CapabilitiesManagement, U.S. Government Accountability Office.
    This was the second hearing held by the Subcommittee to 
examine the Department of Defense's (DOD) supply chain 
management improvement plan and the eight hearing held by the 
Subcommittee on the Government Accountability Office's (GAO) 
high-risk list. Mr. Estevez discussed the Department's supply 
chain management improvement plan, and Mr. Solis provided an 
assessment of the plan's implementation.
    The hearing focused on the progress that DOD has made in 
developing and implementing the supply chain management 
improvement plan since the Subcommittee's October 6, 2005 
hearing. The hearing also examined the extent to which the 
supply chain management improvement plan is integrated with 
other DOD logistics strategies, concepts, and plans, such as 
the Quadrennial Defense Review, the Logistics Transformation 
Strategy, the Focused Logistics Roadmap, and the Enterprise 
Transition Plan. Finally, the hearing explored whether DOD has 
identified valid performance metrics and data to monitor its 
initiatives and measure progress.
STOP!: A Progress Report on Protecting and Enforcing Intellectual 
        Property Rights Here and Abroad (July 26, 2006)
    Witnesses: Chris Israel, Coordinator for International 
Intellectual Property Enforcement, U.S. Department of Commerce; 
Stephen M. Pinkos, Deputy Under Secretary of Commerce for 
Intellectual Property, and Deputy Director, U.S. Patent and 
Trademark Office; Arif Alikhan, U.S. Department of Justice's 
Task Force on Intellectual Property, and Deputy Director, 
National Intellectual Property Law Enforcement Coordination 
Council; Anthony C. LaPlaca, Vice President and General 
Counsel, Bendix Commercial Vehicle Systems, LLC; and Loren 
Yager, Director, International Affairs and Trade, U.S. 
Government Accountability Office.
    This was the sixth hearing the Subcommittee has held on 
trade and intellectual property enforcement issues. The hearing 
focused on the progress that the Administration has made in 
developing and implementing a coordinated effort to combat 
intellectual property theft since the Subcommittee's hearing in 
June 2005. In particular, the hearing focused on examining the 
progress made in the year since Chris Israel was named the 
Administration's Intellectual Property (IP) Coordinator. The 
hearing also focused on the impact that counterfeiting has had 
on private companies, such as Bendix, with regard to both 
financial and safety issues. The hearing examined the efforts 
undertaken to educate businesses, particularly small and medium 
sized businesses, about the intellectual property issues 
related to conducting business in the global economy. Finally, 
the hearing discussed S. 1984, The Intellectual Property Rights 
Enforcement Act, which Senators Voinovich and Bayh introduced 
to increase domestic intellectual property coordination, 
seeking input from the IP Coordinator as well as from the other 
witnesses.
Senior Executives: Leading the Way in Federal Workforce Reforms 
        (September 26, 2006)
    Witnesses: Hon. Linda M. Springer, Director, Office of 
Personnel Management; Brenda S. Farrell, Acting Director, 
Strategic Issues, U.S. Government Accountability Office; and 
Carol A. Bonosaro, President, Senior Executives Association.
    The Subcommittee conducted an oversight hearing of the 
implementation of performance-based pay for members of the 
Senior Executive Service (SES). The current performance 
management and pay systems for the SES were enacted as part of 
the Homeland Security Act of 2002, which established the new 
performance management system, and the National Defense 
Authorization Act for Fiscal Year 2004, which established the 
new pay system. Subsequently, the Senior Executives Association 
(SEA) conducted a survey of its members. The survey 
demonstrated that while the SEA supports the concept of pay-
for-performance, the implementation has not had the intended 
results. The Subcommittee is unsatisfied with the findings and 
requested that the Office of Personnel Management work with 
Federal agencies and the Senior Executives Association to make 
the changes necessary in order to improve the system.
Securing the National Capital Region: An Examination of the NCR's 
        Strategic Plan (September 28, 2006)
    Witnesses: Anthony Griffin, County Executive, Fairfax 
County, Virginia, and Chairman, Chief Administrative Officers 
Committee, Washington Metropolitan Council of Governments; 
Edward D. Reiskin, Deputy Mayor, Public Safety and Justice, 
District of Columbia; Hon. Robert P. Crouch, Assistant to the 
Governor for Commonwealth Preparedness, Commonwealth of 
Virginia; Hon. Dennis R. Schrader, Director, of the Governor's 
Office of Homeland Security, State of Maryland; Thomas 
Lockwood, Director, Office of National Capital Region 
Coordination, U.S. Department of Homeland Security; and William 
O. Jenkins, Jr., Director, Homeland Security and Justice 
Issues, U.S. Government Accountability Office
    This was the third Subcommittee hearing examining the 
ability of the responsible Federal, State, and local government 
agencies of the National Capital Region (NCR) to respond to a 
terrorist attack or natural disaster. The hearing focused on 
the NCR's strategic plan, which was released on September 13, 
2006, and coordination efforts within the NCR.
    During the hearing, representatives from the NCR provided 
an overview of the strategic plan, including the plan for 
implementation and performance measures. In addition, NCR 
representatives discussed that status of the region's 
interoperable communications, indicating that NCR is able to 
communicate across the region. GAO commended the NCR for 
producing a strategic plan, while offering several suggestions 
for improvement.

                            II. Legislation

    The following bills were considered by the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia during the 109th Congress:

                       MEASURES ENACTED INTO LAW

    P.L. 109-325, S. 2146--This bill extends the authority, for 
an additional four years, relocation expenses test programs for 
federal employees. S. 2146 also eliminates the limitation on 
the period of time under which payment of relocation expenses 
under such programs may be paid. S. 2146 was introduced on 
December 20, 2005, by Senator Collins and was referred to the 
Homeland Security and Governmental Affairs Committee. The bill 
was cosponsored by Senators Akaka and Lieberman. On January 27, 
2006, S. 2146 was referred to the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia, and polled favorably by the Subcommittee on April 
25, 2006. The bill was reported to the Senate by the Homeland 
Security and Governmental Affairs Committee, without amendment, 
on July 21, 2006 (S. Rept. 109-289). On August 1, 2006, S. 2146 
was passed by the Senate by unanimous consent, without 
amendment. S. 2146 was received in the House of Representatives 
and referred to the House Committee on Government Reform on 
August 2, 2006. S. 2146 was passed by the House on September 
28, 2006 by voice vote under suspension of the rules. S. 2146 
was enacted on October 11, 2006.
    P.L. 109-356, H.R. 3508--The 2005 District of Columbia 
Omnibus Authorization Act authorizes improvements in the 
operation of the government of the District of Columbia, and 
for other purposes. On July 28, 2005, H.R. 3508 was introduced 
by Representative Tom Davis and Delegate Norton and was 
referred to the House Committee on Government Reform. On 
November 3, 2006, H.R. 3508 was reported favorably, with 
amendment, by the House Committee on Government Reform and 
passed the House on November 14, 2005, under suspension of the 
rules by voice vote. On December 15, 2005, the measure was 
received in the Senate and on January 27, 2006, was referred to 
the Senate Committee on Homeland Security and Governmental 
Affairs. The Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia 
held a legislative hearing to examine H.R. 3508 on February 28, 
2006, entitled ``Enhancing Educational and Economic Opportunity 
in the District of Columbia.'' H.R. 3508 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia on March 28, 2006, and 
was polled favorably by the Subcommittee on April 25, 2006. 
H.R. 3508 was reported favorably, with an amendment in the 
nature of a substitute, by the Homeland Security and 
Governmental Affairs Committee on July 25, 2006, without a 
written report. On August 3, 2006, H.R. 3508, with an amendment 
in the nature of a substitute, passed the Senate by unanimous 
consent. On September 25, 2006, the House passed H.R. 3508, as 
amended by the Senate, by voice vote under suspension of the 
rules. The bill was enacted on October 16, 2006.

   MEASURES FAVORABLY REPORTED BY THE SUBCOMMITTEE AND PASSED BY THE 
                                 SENATE

    S. 2068--The legislation would preserve existing judgeships 
on the Superior Court of the District of Columbia by amending 
the District of Columbia Code to increase from 58 to 61 the 
number of associate judges on the Superior Court of the 
District of Columbia. S. 2068 was introduced on November 28, 
2005, by Senator Collins and co-sponsored by Senators Akaka, 
Lieberman and Voinovich, and was referred to the Homeland 
Security and Governmental Affairs Committee. S. 2068 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia 
on January 27, 2006, which polled favorably the bill on April 
25, 2006. S. 2068 was reported by the Homeland Security and 
Governmental Affairs Committee, without amendment, on July 31, 
2006 (S. Rept. 109-316). On August 8, 2006, the Senate passed 
S. 2068 by unanimous consent. The bill was received in the 
House of Representatives on September 6, 2006, and referred to 
the House Government Reform Committee.

MEASURES REFERRED TO THE SUBCOMMITTEE UPON WHICH HEARINGS WERE HELD OR 
                   OTHER LEGISLATIVE ACTION WAS TAKEN

    S. 494--The Federal Employee Protection of Disclosures Act 
would clarify the disclosure of information protected from 
prohibited personnel practices, require a statement in 
nondisclosure policies, forms, and agreements that such 
policies, forms, and agreements conform with certain disclosure 
protections, provide certain authority for the Special Counsel, 
and for other purposes. S. 494 was introduced by Senator Akaka 
on March 2, 2005, and referred to the Homeland Security and 
Governmental Affairs Committee. Senators Carper, Chafee, 
Coleman, Collins, Dayton, Durbin, Grassley, Johnson, 
Lautenberg, Leahy, Levin, Lieberman, Pryor, and Voinovich are 
co-sponsors of the bill. S. 494 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia on March 9, 2005, and 
was polled favorably by the Subcommittee on March 29, 2005. S. 
494 was reported, without amendment, by the Homeland Security 
and Governmental Affairs Committee on April 13, 2005 (S. Rept. 
109-72).
    S. 1149--The Improving Access to Workers' Compensation for 
Injured Federal Workers Act would amend the Federal Employees' 
Compensation Act to cover services provided to injured federal 
workers by physician assistants and nurse practitioners, and 
for other purposes. On May 26, 2005, Senators Isakson and 
Kennedy introduced S. 1149 to the Senate, and it was referred 
to the Homeland Security and Governmental Affairs Committee. On 
June 9, 2005, S. 1149 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia, which favorably polled the 
legislation on July 21, 2006.
    S. 1838--The Federal and District of Columbia Government 
Real Property Act of 2005 is a bill to provide for the sale, 
acquisition, conveyance, and exchange of certain real property 
in the District of Columbia, in order to facilitate the 
utilization, development, and redevelopment of such property.
    S. 1838 was introduced by Senator Voinovich, co-sponsored 
by Senator Collins, on October 6, 2005, and referred to the 
Homeland Security and Governmental Affairs Committee. On 
January 27, 2006, S. 1838 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia. A Subcommittee hearing on S. 1838 was 
held on February 28, 2006. The hearing was entitled ``Enhancing 
Educational and Economic Opportunity in the District of 
Columbia.'' On April 25, 2006, the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia reported the measure, without amendment, favorably 
to the Homeland Security and Governmental Affairs Committee. S. 
1838 was reported to the Senate, without amendment, on July 27, 
2006, by the Homeland Security and Governmental Affairs 
Committee, and filed on November 13, 2006 as written report S. 
Rept. 109-359. A similar bill, H.R. 3699, P.L. 109-396, passed 
the Senate, without amendment, by unanimous consent on November 
16, 2006, and was enacted on December 15, 2006.
    S. 1876--This bill would provide that attorneys employed by 
the Department of Justice are eligible for compensatory time 
off for travel under section 5550b of title 5, United States 
Code. This bill was introduced by Senator Akaka and referred to 
the Homeland Security and Governmental Affairs Committee on 
November 17, 2005. On January 27, 2006, S. 1876 was referred to 
the Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia, which favorably 
polled on April 25, 2006. The measure passed the Senate, with 
an amendment, by unanimous consent on December 6, 2006, along 
with its companion bill, H.R. 4057. H.R. 4057 was enacted on 
December 22, 2006 as P.L. 109-425.
    S. 2060--The bill would amend the District of Columbia 
Access Act of 1999 to authorize, through FY 2011, its public 
and private school tuition assistance programs. S. 2060 would 
also redefine the statutory term ``eligible institution'' to 
include any private school located in the United States. 
Further, the measure would limit federal funding for such 
public school and private school programs for FY2006 and each 
succeeding fiscal year. In addition, S. 2060 would require an 
annual report requirement to Congress by the Mayor of the 
District of Columbia to be fulfilled by August 1 each year, 
including of the number of students applying for the program 
and the number graduating from it. On November 18, 2005, 
Senator Voinovich introduced S. 2060, and the measure was 
referred to the Homeland Security and Governmental Affairs 
Committee. On January 27, 2006, S. 2060 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia. On February 28, 2006, 
hearings were held by the Subcommittee. The legislation was 
polled favorably, without amendment, by the Subcommittee on 
April 25, 2006.
    S. 3492--The Federal Workforce Appraisal and Management 
Improvement Act of 2006 would strengthen performance management 
in the Federal Government and make the annual general pay 
increase for Federal employees contingent on performance. S. 
3492 was introduced by Senator Voinovich on June 13, 2006, and 
referred to Homeland Security and Governmental Affairs 
Committee. On June 29, 2006, the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia held a legislative hearing to discuss S. 3492. S. 
3492 was referred to the Subcommittee on August 2, 2006.
    S. 3584--The Federal Supervisor Training Act of 2006 would 
amend chapter 41 of title 5, United States Code, to provide for 
the establishment and authorization of funding for certain 
training programs for supervisors of Federal employees. S. 3584 
was introduced by Senator Akaka and referred to the Homeland 
Security and Governmental Affairs Committee on June 27, 2006. 
On June 29, 2006, the Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia 
held a legislative hearing. S. 3584 was referred to the 
Subcommittee on August 2, 2006.

     MEASURES WHICH DID NOT ADVANCE BEYOND REFERRAL TO SUBCOMMITTEE

    S. Con. Res. 8--A concurrent resolution expressing the 
sense of Congress that there should continue to be parity 
between the adjustments in pay of the members of the uniformed 
services and the adjustments in the pay of civilian employees 
of the United States. S. Con. Res. 8 was introduced by Senator 
Sarbanes and referred to the Homeland Security and Governmental 
Affairs Committee on February 1, 2005. The bill has 20 co-
sponsors, including, Senators Akaka, Allen, Bingaman, Collins, 
Corzine, Dayton, Durbin, Johnson, Kennedy, Kerry, Landrieu, 
Lautenberg, Leahy, Lieberman, Mikulski, Murray, Nelson, Snowe, 
Warner and Wyden. On March 9, 2005, the measure was referred to 
the Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia.
    S. 60--A bill to amend the Legislative Reorganization Act 
of 1946 to eliminate automatic pay adjustments for Members of 
Congress. S. 60 was introduced by Senator Feingold on January 
24, 2005, and was referred to the Homeland Security and 
Governmental Affairs Committee. On March 9, 2005, S. 60 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia.
    S. 72--A bill to amend title 5, United States Code, and to 
provide for the issuance by the President of a prisoner-of-war 
medal to civilian employees of the Federal Government who are 
forcibly detained or interned by an enemy government, a hostile 
force during war, by a foreign government, or by a hostile 
force during periods determined comparable to wartime 
conditions. On January 24, 2005, Senator Inouye introduced the 
bill, and it was referred to the Homeland Security and 
Governmental Affairs Committee. On March 9, 2005, S. 72 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia.
    S. 82--A private bill to provide for the relief of Robert 
J. Bancroft, of Newport Washington, by permitting the payment 
of back pay for overtime incurred in missions with the Drug 
Enforcement Agency. S. 82 was introduced in the Senate by 
Senator Craig on January 24, 2005, and referred to the Homeland 
Security and Governmental Affairs Committee. The Subcommittee 
on Oversight of Government Management, the Federal Workforce 
and the District of Columbia received the bill, upon referral, 
on March 9, 2005.
    S. 127--The Clinical Social Workers' Recognition Act of 
2005 would amend chapter 81 of title 5, United States Code, to 
authorize the use of clinical social workers to conduct 
evaluations to determine work-related emotional and mental 
illnesses. S. 127 was introduced by Senator Inouye and referred 
to the Homeland Security and Governmental Affairs Committee on 
January 24, 2005. On March 9, 2005, S. 127 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia.
    S. 143--The Taste of Our Own Medicine Act of 2005 would 
ensure that Members of Congress do not receive better 
prescription drug benefits than Medicare beneficiaries. On 
January 24, 2005, S. 143 was introduced by Senator Dayton and 
referred to the Homeland Security and Governmental Affairs 
Committee. On March 9, 2005, S. 143 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia.
    S. 195--The No Taxation Without Representation Act of 2005 
would provide for full voting representation in Congress for 
the citizens of the District of Columbia. On January 26, 2005, 
S. 195 was introduced by Senator Lieberman and referred to the 
Homeland Security and Governmental Affairs Committee. The 
legislation has 15 co-sponsors, including Senators Boxer, 
Clinton, Corzine, Dayton, Dodd, Durbin, Feingold, Jeffords, 
Kennedy, Kerry, Leahy, Mikulski, Obama, Sarbanes, and Schumer. 
The bill was referred to the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia on March 9, 2005.
    S. 968--The Federal Public Safety Officer Surviving Spouse 
Protection Act would amend chapters 83 and 84 of title 5, 
United States Code, to provide that spouses of Federal public 
safety officers who are killed in the line of duty, may remarry 
and continue to receive a survivor annuity. The measure was 
introduced by Senator Clinton, co-sponsored by Senators Corzine 
and Leahy, on April 28, 2005, and referred to Homeland Security 
and Governmental Affairs Committee. On June 9, 2005, S. 968 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia.
    S. 981--The Reservists Pay Security Act of 2005 would 
ensure that a Federal employee who takes leave without pay in 
order to perform services as a member of the uniformed services 
or member of the National Guard shall continue to receive pay 
in an amount which, when taken together with the pay and 
allowances such individual is receiving for such service, will 
be no less than the basic pay such individual would then be 
receiving if no interruption in employment had occurred. S. 981 
was introduced by Senator Durbin on May 9, 2005 and co-
sponsored by Senators Allen, Bingaman, Graham, Isakson, Kerry, 
Landrieu, Lautenberg, Leahy, Mikulski and Sarbanes. The measure 
was referred to the Homeland Security and Governmental Affairs 
Committee on May 10, 2005, and subsequently referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia on June 9, 2005.
    S. 1018--The Federal Employee Commuter Benefits Act of 2005 
would provide that transit pass transportation fringe benefits 
be made available to all qualified Federal employees in the 
National Capital Region. S. 1018 would allow passenger carriers 
owned or released by the Federal Government to be used to 
transport its employees between their place of employment and 
mass transit facilities. S. 1018 was introduced by Senator 
Sarbanes, with Senators Allen, Mikulski and Warner co-
sponsoring, on May 19, 2005, and referred to the Homeland 
Security and Governmental Affairs Committee. On June 9, 2005, 
the bill was referred to the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia.
    S. 1082--The District of Columbia Personal Protection Act 
would restore Second Amendment rights in the District of 
Columbia. On May 19, 2005, S. 1082 was introduced by Senator 
Hutchinson and referred to the Homeland Security and 
Governmental Affairs. S. 1082 has 38 co-sponsors, including 
Senators Allard, Allen, Baucus, Bond, Brownback, Bunning, 
Burns, Burr, Byrd, Chambliss, Coburn, Cochran, Cornyn, Craig, 
Crapo, DeMint, Dole, Ensign, Enzi, Graham, Grassley, Hagel, 
Hatch, Inhofe, Isakson, Kyl, Lott, Martinez, Murkowski, Nelson, 
Sessions, Shelby, Stevens, Sununu, Talent, Thomas, Thune and 
Vitter. On June 9, 2005, the measure was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia.
    S. 1221--The Federal Firefighters Fairness Act of 2005 
would amend chapter 81 of title 5, United States Code to create 
a presumption that a disability or death of a Federal employee 
in fire protection activities caused by certain diseases 
results from the performance of such employee's duty. Senator 
Dayton introduced S. 1221 on June 9, 2006, where it was then 
referred to the Homeland Security and Governmental Affairs 
Committee. Senators Allen, Boxer, Carper, DeWine and Kerry are 
co-sponsors of the bill. On January 27, 2006, S. 1221 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia.
    S. 1888--The Military Family Support Act of 2005 would 
authorize two programs for the use of federal leave by 
caregivers for family members of certain individual performing 
military service, and for other purposes. Senator Jeffords 
introduced, with Senators Dayton, Feingold and Lautenberg co-
sponsoring, S. 1888 on October 19, 2005, and it was referred to 
the Homeland Security and Governmental Affairs Committee. The 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia received S. 1888 on 
referral on January 27, 2006.
    S. 2040--The Department of Homeland Security Qualified 
Leaders Act of 2005 would amend The Homeland Security Act of 
2002 (6 U.S.C. 101 et seq.) to ensure that the Department of 
Homeland Security is led by qualified, experience personnel. S. 
2040 was introduced by Senator Akaka and referred to the 
Homeland Security and Governmental Affairs Committee on 
November 17, 2005. S. 2040 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia on January 27, 2006.
    S. 2076--The Assistant United States Attorney Retirement 
Benefit Equity Act of 2005 would amend title 5, United States 
Code, to provide to assistant United States attorneys the same 
retirement benefits as are afforded to Federal law enforcement 
officers. Senator Leahy introduced the bill, which was referred 
to the Homeland Security and Governmental Affairs Committee on 
November 18, 2005. The measure was co-sponsored by Senators 
Biden, Boxer, Chambliss, Cochran, Corzine, DeWine, Dodd, 
Durbin, Feingold, Feinstein, Hatch, Lieberman, Mikulski, 
Nelson, Rockefeller, Salazar, Smith, Stabenow and Wyden. On 
January 27, 2006, S. 2076 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia.
    S. 2247--A bill to promote greater use of information 
technology in the Federal Employees Health Benefits Program 
under chapter 89 of title 5, United States code, in order to 
increase efficiency and reduce costs. Senator Obama introduced 
the bill on February 6, 2006, and it was referred to Homeland 
Security and Governmental Affairs Committee. S. 2247 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia 
on March 28, 2006.
    S. 2262--A bill to provide that pay may not be disbursed to 
Members of Congress after October 1 of any fiscal year in which 
all appropriations acts are not passed by Congress. This bill 
was introduced by Senator Allen, and referred to the Homeland 
Security and Governmental Affairs Committee, on February 9, 
2006. On March 28, 2006, S. 2262 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia.
    S. 2268--This bill would amend title 5, United States Code, 
to deny Federal retirement benefits to individual convicted of 
certain offenses, and for other purposes. S. 2268 was 
introduced by Senators Kerry and Salazar, and was referred to 
the Homeland Security and Governmental Affairs Committee on 
February 9, 2006. S. 2268 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia on March 28, 2006.
    S. 2285--The Whistleblower Empowerment, Security, and 
Taxpayer Protection Act of 2006 would modify federal criminal 
law provisions relating to tampering with or retaliating 
against a witness, victim, or an informant. Further, S. 2285 
would allow a victim of a prohibited personnel practice to 
bring a civil action against a covered entity and to recover 
damages. S. 2285 was introduced by Senator Lautenberg and 
referred to the Homeland Security and Governmental Affairs 
Committee on February 14, 2006. On March 28, 2006, S. 2285 was 
referred to the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia.
    S. 2490--The Real Estate Investment Thrift Savings Act of 
2006 would amend title 5, United States Code, to provide for a 
real estate stock index investment option under the Thrift 
Savings Plan. S. 2490 was introduced by Senator Coleman on 
April 3, 2006, and referred to the Homeland Security and 
Governmental Affairs Committee. Senator Bennett co-sponsored 
the bill. On May 26, 2006, S. 2490 was referred to the 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia.
    S. 2801--A bill to amend chapters 83 and 84 of title 5, 
United States Code, to authorize payments to certain trusts 
under the Social Security Act, and for other purposes. Senators 
Allard and Salazar introduced S. 2801 on May 15, 2006, and it 
was referred to the Homeland Security and Governmental Affairs 
Committee. S. 2801 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia on May 26, 2006, and again on July 19, 
2006.
    S. 3652--The Law Enforcement Officers Retirement Equity Act 
would amend the definition of a law enforcement officer under 
subchapter III of chapter 83 and chapter 84 of title 5, United 
States Code, respectively, to ensure the inclusion of certain 
federal positions. S. 3652 was introduced by Senator Mikulski 
and referred to the Homeland Security and Governmental Affairs 
Committee on July 13, 2006. S. 3652 is co-sponsored by Senators 
Clinton and Sarbanes. On July 19, 2006, S. 3652 was referred to 
the Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia.
    S. 3653--The Federal Law Enforcement Pension Adjustment 
Equity Act of 2006 would amend the Law Enforcement Pay Equity 
Act of 2000 to permit certain annuitants of the retirement 
programs of the United States Park Police and United States 
Secret Service Uniformed Division to receive the adjustments in 
pension benefits to which such annuitants would otherwise be 
entitled as a result of the conversion of members of the United 
States Park Police and United States Secret Service Uniformed 
Division to a new salary schedule under the amendments made by 
that Act. Senator Mikulski introduced S. 3653, and it was 
referred to the Homeland Security and Governmental Affairs 
Committee, on July 13, 2006. S. 3653 was co-sponsored by 
Senators Allan, Clinton, Sarbanes and Warner. On July 19, 2006, 
S. 3653 was referred to the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia.
    S. 3676--A bill to amend the Congressional Accountability 
Act of 1995 to apply whistleblower protections available to 
certain executive branch employees to legislative branch 
employees, and for other purposes. On July 17, 2006, Senator 
Grassley introduced S. 3676, which was subsequently referred to 
the Homeland Security and Governmental Affairs Committee. S. 
3676 was referred to the Subcommittee on Oversight of 
Government Management, the Federal Workforce and the District 
of Columbia on July 29, 2006
    S. 3692--A bill to extend the date on which the National 
Security Personnel System would first apply to certain defense 
laboratories. On July 19, 2006, Senator Voinovich introduced S. 
3692, and it was referred to the Homeland Security and 
Governmental Affairs Committee. The bill has nine cosponsors, 
including Senators Bingaman, DeWine, Kennedy, Lott, Sessions, 
Clinton, Domenici, Lieberman and Reed. S. 3692 was referred to 
the Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia on August 2, 
2006.
    H.R. 3496--The National Capital Transportation Amendments 
Act of 2005 would amend the National Capital Transportation Act 
of 1969 to authorize additional Federal contributions for 
maintaining and improving the transit system of the Washington 
Metropolitan Area Transit Authority, and for other purposes. 
Congressman Tom Davis introduced H.R. 3496 on July 28, 2005, 
and it was referred to the House Committee on Governmental 
Reform. On April 26, 2006, H.R. 3496, as amended, was ordered 
favorably by the Committee on Governmental Reform (H. Rept. 
109-440). On July 17, 2006, the House passed H.R. 3496, as 
amended, by a vote of 242-120 under suspension of the rules. On 
July 18, 2006, H. R. 3496 was received in the Senate and 
referred to the Homeland Security and Governmental Affairs 
Committee. H.R. 3496 was referred to the Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia on July 19, 2006.

                            III. GAO Reports

    The following reports were issued by the Government 
Accountability Office at the request of the Chairman and/or 
Ranking Member of the Subcommittee on Oversight of Government 
Management, the Federal Workforce and the District of Columbia 
during the 109th Congress:
    Experience of Foreign Countries Consolidating Their Food 
Safety Systems, GAO-05-0389 (2/22/2005)
    Federal Student Loan Repayment Program, GAO-05-0865 (7/22/ 
2005)
    DOD National Security Personnel System (NSPS): Costs 
Associated With Design, Implementation and Training, GAO-06-
0016 (11/ 12/2005): No report
    Agencies' Use of Voluntary Separation Incentive Payment 
(VSIP) Authority and Voluntary Early Retirement Authority 
(VERA) Under the Homeland Security Act of 2002, GAO-05-1032 (3/
31/ 2006)
    UN Employment of U.S. Citizens, GAO-05-0802 (9/6/2006) 
Department of Homeland Security Interagency Contracting: 
Planning and Evaluation, GAO-06-0262 (9/27/2006)
    DOD Personnel Clearances: Additional OMB Actions Needed to 
Improve the Security Clearance Process, GAO-05-1146 (9/28/2006)
    U.S. Efforts to Help Other Countries Secure Radioactive 
Sources, GAO-06-0030 (11/20/2006)
    Office of Personnel Management's Management Capacity and 
Ability to Lead and Implement Human Capital Reform in the 21ST 
Century, GAO-05-0943 (11/30/2006)
    The Nuclear Regulatory Commission's Efforts to Recruit and 
Retain a Critically Skilled Workforce, GAO-06-0045 (12/14/2006)
    Premium Growth in Federal Employees Health Benefit Program, 
GAO-06-0286 (12/22/2006)
    Privacy Protection for Health Information and the National 
Health Information Technology (IT) Strategy, GAO-06-0018 (1/10/ 
2007)
    U.S. Efforts to Enforce Intellectual Property Rights at 
U.S. Boarders, GAO-05-1055 (1/12/2007)
    Global Cooperation to Prevent or Delay Onset of Pandemic 
Influenza, GAO-06-0884 (2/15/2007)
    U.S. Department of Homeland Security's Reliance on 
Contractors, GAO-06-0262 (5/25/2007)
    Review of the U.S. Department of Homeland Security's One 
Face at the Boarder Initiative, GAO-06-0259 (No date set)
    Implementation of Chief Operating Officer (COO) Chief 
Management Official (CMO) Positions, GAO-06-0692 (No date set)
    U.S. Efforts to Improve Global Disease Surveillance, GAO-
06-0885
    NASA'S Efforts to Recruit, Manage, and Retain its 
Engineering, Science, and Technology Workforce, GAO-06-145 (No 
date set)
    Pending Request: Corps if Engineers Human Capital 
Challenges, GAO-06-0145
    Pending Request: Department of Homeland Security's (DHS) 
Major Information Technology Systems Contracting Review, GAO-
06-0262
    Pending Request: DOD Decision to Reimburse Halliburton 
Subsidiary Kellogg, Brown & Root (KBR): Fuel Delivery /Repair 
of Oil Equipment Contract in Iraq, GAO-06-0555
    Pending Request: Review Department of Homeland Security 
(DHS) National Telecommunications System, GAO-06-0831
    Pending Request: DOD Supply Chain Management Process: 
Review DOD'S Progress toward Instituting Joint Theatre 
Logistics, GAO-06-1169

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                         Chairman: Norm Coleman

                  Ranking Minority Member: Carl Levin

    The following is the Activities Report of the Permanent 
Subcommittee on Investigations during the 109th Congress:

                        I. Historical Background

                      A. Subcommittee Jurisdiction

    The Permanent Subcommittee on Investigations was originally 
authorized by Senate Resolution 189 on January 28, 1948. At its 
creation in 1948, the Subcommittee was part of the Committee on 
Expenditures in the Executive Departments. The Subcommittee's 
records and broad investigative jurisdiction over government 
operations and national security issues, however, actually 
antedate its creation, since it was given custody of the 
jurisdiction of the former Special Committee to Investigate the 
National Defense Program (the so-called ``War Investigating 
Committee'' or ``Truman Committee''), chaired by Senator Harry 
S Truman during the Second World War. Today, the Subcommittee 
is part of the Committee on Homeland Security and Governmental 
Affairs.\1\
---------------------------------------------------------------------------
    \1\ In 1952, the parent committee's name was changed to the 
Committee on Government Operations. It was changed again in early 1977, 
to the Committee on Governmental Affairs, and again in 2005, to the 
Committee on Homeland Security and Governmental Affairs, its present 
title.
---------------------------------------------------------------------------
    The Subcommittee has had nine Chairmen: Senators Homer 
Ferguson of Michigan (1948), Clyde R. Hoey of North Carolina 
(1949-1952), Joseph R. McCarthy of Wisconsin (1953-1954), John 
L. McClellan of Arkansas (1955-1972), Henry M. Jackson of 
Washington (1973-1978), Sam Nunn of Georgia (1979-1980 and 
1987-1994), William V. Roth of Delaware (1981-1986 and 1995-
1996), Susan M. Collins of Maine (1997-2001); Carl Levin of 
Michigan (2001-2002); and Norm Coleman of Minnesota (2003-
present).
    Until 1957, the Subcommittee's jurisdiction focused 
principally on waste, inefficiency, impropriety, and illegality 
in government operations. Its jurisdiction has expanded 
considerably since then, however, today encompassing 
investigations within the broad ambit of the parent committee's 
responsibility for matters relating to the efficiency and 
economy of operations of all branches of the government, 
including matters related to: (a) waste, fraud, abuse, 
malfeasance, and unethical practices in government contracting 
and operations; (b) criminality or improper practices in labor-
management relations; (c) organized criminal activities 
affecting interstate or international commerce; (d) criminal 
activity affecting the national health, welfare, or safety, 
including investment fraud, commodity and securities fraud, 
computer fraud, and use of offshore banking and corporate 
facilities to carry out criminal objectives; (e) the 
effectiveness of present national security methods, staffing 
and procedures, and U.S. relationships with international 
organizations concerned with national security; (f) energy 
shortages, energy pricing, management of government-owned or 
controlled energy supplies; and relationships with oil 
producing and consuming countries; and (g) the operations and 
management of Federal regulatory policies and programs. While 
technically reduced to a subcommittee of a standing committee, 
the Subcommittee has long exercised its authority on an 
independent basis, selecting its own staff, issuing its own 
subpoenas, and determining its own investigatory agenda.
    The Subcommittee acquired its sweeping jurisdiction in 
several successive stages. In 1957--based on information 
developed by the Subcommittee--the Senate passed a Resolution 
establishing a Select Committee on Improper Activities in the 
Labor or Management Field. Chaired by Senator McClellan, who 
also chaired the Subcommittee at that time, the Select 
Committee was composed of eight Senators--four of whom were 
drawn from the Subcommittee on Investigations and four from the 
Committee on Labor and Public Welfare. The Select Committee 
operated for 3 years, sharing office space, personnel, and 
other facilities with the Permanent Subcommittee. Upon its 
expiration in early 1960, the Select Committee's jurisdiction 
and files were transferred to the Subcommittee on 
Investigations, greatly enlarging the latter body's 
investigative authority in the labor-management area.
    The Subcommittee's jurisdiction expanded further during the 
1960s and 1970s. In 1961, for example, it received authority to 
make inquiries into matters pertaining to organized crime and, 
in 1963, held the famous Valachi hearings described below, 
examining the inner workings of the Italian Mafia. In 1967, 
following a summer of riots and other civil disturbances, the 
Senate approved a Resolution directing the Subcommittee to 
investigate the causes of this disorder and to recommend 
corrective action. In January 1973, the Subcommittee acquired 
its national security mandate when it merged with the National 
Security Subcommittee. With this merger, the Subcommittee's 
jurisdiction was broadened to include inquiries concerning the 
adequacy of national security staffing and procedures, 
relations with international organizations, technology transfer 
issues, and related matters. In 1974, in reaction to the 
gasoline shortages precipitated by the Arab-Israeli war of 
October 1973, the Subcommittee acquired jurisdiction to 
investigate government operations involving the control and 
management of energy resources and supplies.
    In 1997, the full Committee on Governmental Affairs was 
charged by the Senate to conduct a special examination into 
illegal or improper activities in connection with Federal 
election campaigns during the 1996 election cycle. The 
Permanent Subcommittee provided substantial resources and 
assistance to this investigation, contributing to a greater 
public understanding of what happened, to subsequent criminal 
and civil legal actions taken against wrongdoers, and to 
enactment of campaign finance reforms in 2001.

                         B. Past Investigations

    Armed with its broad jurisdictional mandate, the 
Subcommittee has in recent years conducted investigations into 
a wide variety of topics of public concern, ranging from 
corporate misconduct, including the Senate's most in-depth 
investigation of the collapse of the Enron Corporation, to 
unfair energy prices, predatory lending, and tax evasion. The 
Subcommittee has also conducted investigations into numerous 
aspects of criminal wrongdoing, including money laundering, the 
narcotics trade, child pornography, labor racketeering, and 
organized crime activities. In addition, the Subcommittee has 
investigated a wide range of allegations of waste, fraud, and 
abuse in government programs and consumer protection issues, 
addressing problems ranging from food safety to Medicare fraud 
to mortgage ``flipping.''
    Most recently, under the leadership of Senator Coleman, the 
Subcommittee has focused on exposing corruption problems in the 
United Nations' Oil-for-Food Program, port and supply-chain 
security, credit counseling abuses, and Federal contractors 
with billions of dollars in unpaid taxes. At Senator Levin's 
request, the Subcommittee has also examined offshore tax 
abuses, the role of tax professionals in promoting abusive tax 
shelters, transparency and pricing problems in U.S. crude oil 
markets, abusive credit card practices, and the failure of U.S. 
bank regulators to crack down on possible money laundering 
practices at financial institutions like Riggs Bank.
    In 1998, the Subcommittee marked the fiftieth anniversary 
of the Truman Committee's conversion into a permanent 
subcommittee of the U.S. Senate.\2\ In the half-century of its 
existence, the Subcommittee's many successes have made clear to 
the Senate the importance of retaining a standing investigatory 
body devoted to keeping government not only efficient and 
effective, but also honest and accountable.
---------------------------------------------------------------------------
    \2\ This anniversary also marked the first date upon which internal 
Subcommittee records generally began to become available to the public. 
Unlike most standing committees of the Senate whose previously 
unpublished records open after a period of 20 years has elapsed, the 
Permanent Subcommittee on Investigations, as an investigatory body, may 
close its records for 50 years to protect personal privacy and the 
integrity of the investigatory process. With this 50th anniversary, the 
Subcommittee's earliest records, housed in the Center for Legislative 
Archives at the National Archives and Records Administration, began to 
open seriatim. The records of the predecessor committee--the Truman 
Committee--were opened by Senator Nunn in 1980.
---------------------------------------------------------------------------
(1) Historical Highlights
    The Subcommittee's investigatory record as a permanent 
Senate body began under the Chairmanship of Republican Senator 
Homer Ferguson and his Chief Counsel (and future Attorney 
General and Secretary of State) William P. Rogers, as the 
Subcommittee inherited the Truman Committee's role in 
investigating fraud and waste in U.S. Government operations. 
This investigative work became particularly colorful under the 
chairmanship of Senator Clyde Hoey, a North Carolina Democrat 
who took the chair from Senator Ferguson after the 1948 
elections. The last U.S. Senator to wear a long frock coat and 
wing-tipped collar, Mr. Hoey was a distinguished southern 
gentleman of the old school. Under his leadership, the 
Subcommittee won national attention for its investigation of 
the so-called ``five percenters,'' notorious Washington 
lobbyists who charged their clients 5 percent of the profits 
from any Federal contracts they obtained on the client's 
behalf. Given the Subcommittee's jurisdictional inheritance 
from the Truman Committee, it is perhaps ironic that the ``five 
percenters'' investigation raised allegations of bribery and 
influence-peddling that reached right into the White House and 
implicated members of President Harry Truman's staff. In any 
event, the fledgling Subcommittee was off to a rapid start.
    What began colorful soon became contentious. When 
Republicans returned to the Majority in the Senate in 1953, 
Wisconsin's junior Senator, Joseph R. McCarthy, became the 
Subcommittee's Chairman. Two years earlier, as Ranking Minority 
Member, Senator McCarthy had arranged for another Republican 
Senator, Margaret Chase Smith of Maine, to be removed from the 
Subcommittee. Senator Smith's offense, in Senator McCarthy's 
eyes, was her issuance of a ``Declaration of Conscience'' 
repudiating those who made unfounded charges and used character 
assassination against their political opponents. Although 
Senator Smith had carefully declined to name any specific 
offender, her remarks were universally recognized as criticism 
of Senator McCarthy's accusations that communists had 
infiltrated the State Department and other government agencies. 
Senator McCarthy retaliated by engineering Senator Smith's 
removal from the Subcommittee, replacing her with the newly-
elected Senator from California, Richard M. Nixon.
    Upon becoming Subcommittee Chairman, Senator McCarthy 
staged a series of highly publicized anti-communist 
investigations, culminating in an inquiry into communism within 
the U.S. Army, which became known as the Army-McCarthy 
hearings. During the latter portion of these hearings, in which 
the parent Committee examined the Wisconsin Senator's attacks 
on the Army, Senator McCarthy recused himself, leaving South 
Dakota Senator Karl Mundt to serve as Acting Chairman of the 
Subcommittee. Gavel-to-gavel television coverage of the 
hearings helped turn the tide against Senator McCarthy by 
raising public concern about his treatment of witnesses and 
cavalier use of evidence. In December 1954, in fact, the Senate 
censured Senator McCarthy for unbecoming conduct; in the 
following year, the Subcommittee adopted new rules of procedure 
that better protected the rights of witnesses. The Subcommittee 
also strengthened the rules ensuring the right of both parties 
on the Subcommittee to appoint staff, initiate and approve 
investigations, and review all information in the 
Subcommittee's possession.
    In 1955, Senator John McClellan of Arkansas began 18 years 
of service as Chairman of the Permanent Subcommittee on 
Investigations. Senator McClellan appointed the young Robert F. 
Kennedy as the Subcommittee's Chief Counsel. That same year, 
Members of the Subcommittee were joined by Members of the 
Senate Labor and Public Welfare Committee on a special 
committee to investigate labor racketeering. Chaired by Senator 
McClellan and staffed by Robert Kennedy and other Subcommittee 
staff members, this special committee directed much of its 
attention to criminal influence over the Teamsters Union, most 
famously calling Teamsters' leaders Dave Beck and Jimmy Hoffa 
to testify. The televised hearings of the special committee 
also introduced Senators Barry Goldwater and John F. Kennedy to 
the Nation, as well as leading to passage of the Landrum-
Griffin Labor Act.
    After the special committee completed its work, the 
Permanent Subcommittee on Investigations continued to 
investigate organized crime. In 1962, the Subcommittee held 
hearings during which Joseph Valachi outlined the activities of 
La Cosa Nostra, or the Mafia. Former Subcommittee staffer 
Robert Kennedy--who had by now become Attorney General in his 
brother's Administration--used this information to prosecute 
prominent mob leaders and their accomplices. The Subcommittee's 
investigations also led to passage of major legislation against 
organized crime, most notably the Racketeer Influenced and 
Corrupt Organizations (RICO) provision of the Crime Control Act 
of 1970. Under Chairman McClellan, the Subcommittee also 
investigated fraud in the purchase of military uniforms, 
corruption in the Department of Agriculture's grain storage 
program, securities fraud, and civil disorders and acts of 
terrorism. From 1962 to 1970, the Permanent Subcommittee on 
Investigations conducted an extensive probe of political 
interference in the awarding of government contracts for the 
Pentagon's ill-fated TFX (``tactical fighter, experimental''). 
In 1968, the Subcommittee also examined charges of corruption 
in U.S. servicemen's clubs in Vietnam and elsewhere around the 
world.
    In 1973, Senator Henry ``Scoop'' Jackson, a Democrat from 
Washington, replaced Senator McClellan as the Subcommittee's 
Chairman. During these years, recalled Chief Clerk Ruth Young 
Watt--who served in this position from the Subcommittee's 
founding until her retirement in 1979--Ranking Minority Member 
Charles Percy, an Illinois Republican, was more active on the 
Committee than Chairman Jackson, who was often distracted by 
his Chairmanship of the Interior Committee and his active role 
on the Armed Services Committee. 3 Senator Percy 
worked closely in this regard with Georgia Democrat Sam Nunn, 
who subsequently succeeded Senator Jackson as Chairman in 1979. 
As Chairman, Senator Nunn continued the Subcommittee's 
investigations into the role of organized crime in labor-
management relations and also investigated pension frauds.
---------------------------------------------------------------------------
    \3\ It had not been uncommon in the Subcommittee's history for the 
Chairman and Ranking Minority Member to work together closely despite 
their partisan differences, but Senator Percy was unusually active in 
the Minority--a role that included chairing one investigation of the 
hearing aid industry.
---------------------------------------------------------------------------
    The regular reversals of political fortunes in the Senate 
of the 1980s and 1990s saw Senator Nunn trade chairmanship 
three times with Delaware Republican William Roth. Senator Nunn 
served from 1979 to 1980 and again from 1987 to 1995, while 
Senator Roth served from 1981 to 1986, and again from 1995 to 
1996. These 15 years saw a strengthening of the Subcommittee's 
bipartisan tradition in which investigations were initiated by 
either the Majority or Minority and fully supported by the 
entire Subcommittee. For his part, Senator Roth led a wide 
range of investigations into commodity investment fraud, 
offshore banking schemes, money laundering, and child 
pornography. Senator Nunn led inquiries into Federal drug 
policy, the global spread of chemical and biological weapons, 
abuses in Federal student aid programs, computer security, 
airline safety, and health care fraud. Senator Nunn also 
appointed the Subcommittee's first female counsel, Eleanore 
Hill, who served as Chief Counsel to the Minority from 1982 to 
1986 and then as Chief Counsel from 1987 to 1995. Ms. Hill 
subsequently served as Inspector General at the Department of 
Defense.
(2) Recent Investigations
    In January 1997, Republican Senator Susan Collins of Maine, 
became the first woman to Chair the Permanent Subcommittee on 
Investigations. Senator John Glenn of Ohio became the Ranking 
Minority Member. After Senator Glenn's retirement, Michigan 
Democrat Carl Levin succeeded him in January 1999, as the 
Ranking Minority Member. During Senator Collins' chairmanship, 
the Subcommittee conducted a number of investigations affecting 
Americans in their day-to-day lives, including investigations 
into mortgage fraud, phony credentials obtained through the 
Internet, deceptive mailings and sweepstakes promotions, day 
trading of securities, and securities fraud on the Internet. 
Senator Levin, while Ranking Minority Member, initiated an 
investigation into money laundering. At his request, the 
Subcommittee held hearings in 1999 on money laundering issues 
affecting private banking services provided to wealthy 
individuals, and in 2001 on how major U.S. banks providing 
correspondent accounts to offshore banks were being used to 
advance money laundering and other criminal schemes. Senator 
Collins chaired the Subcommittee until June 2001, when the 
Senate Majority party changed hands, and Senator Levin assumed 
the chairmanship. Senator Collins, in turn, became the Ranking 
Minority Member.
    During the 107th Congress, both Senator Collins and Senator 
Levin chaired the Subcommittee. In her 6 months chairing the 
Subcommittee at the start of the 107th Congress, Senator 
Collins held hearings examining issues related to cross border 
fraud, the improper operation of tissue banks, and Federal 
programs designed to fight diabetes. Over the following 18 
months, Senator Levin led a bipartisan investigation into Enron 
Corporation, which had collapsed into bankruptcy just before he 
became Chairman. The Subcommittee reviewed over 2 million pages 
of documents, conducted more than 100 interviews, held four 
hearings, and issued three bipartisan reports on the role 
played by Enron's Board of Directors, Enron's use of tax 
shelters, and how major U.S. financial institutions had 
contributed to Enron's accounting deceptions, corporate abuses, 
and ultimate collapse. The Subcommittee's investigative work 
contributed to passage of the Sarbanes-Oxley Act which enacted 
accounting and corporate reforms in July 2002. Senator Levin 
also advanced the money laundering investigation initiated 
while he was Ranking Minority Member and opened new 
investigations into offshore tax abuses, border security, and 
the pricing of gasoline and other fuels.
    In January 2003, Senator Collins became Chairman of the 
full Committee on Governmental Affairs, and Republican Senator 
Norm Coleman of Minnesota became Subcommittee Chairman. During 
the 108th Congress, Senator Coleman held 15 hearings on topics 
of national and global concern including illegal file sharing 
on peer-to-peer networks, abusive practices in the credit 
counseling industry, the dangers of purchasing pharmaceuticals 
over the Internet, Federal contractors with billions of dollars 
in unpaid taxes, SARS preparedness, border security, and how 
Saddam Hussein abused the United Nations Oil-for-Food Program. 
At the request of Senator Levin, then Ranking Minority Member, 
the Subcommittee examined how some U.S. accounting firms, 
banks, investment firms, and tax lawyers were designing, 
promoting, and implementing abusive tax shelters across the 
country; and how some U.S. financial institutions were failing 
to comply with anti-money laundering controls mandated by the 
Patriot Act, using as a case history Riggs Bank accounts 
involving Augusto Pinochet, former President of Chile, and 
Equatorial Guinea, an oil-rich country in Africa.
    During the 109th Congress, Chairman Coleman held 13 
hearings on a wide range of topics, including three additional 
hearings on abuses associated with the United Nation's Oil-for-
Food Program, two hearings on Federal contractors who failed to 
pay billions of dollars in taxes, additional border security 
hearings focused on securing the global supply chain, two 
hearings on DOD travel abuses, and two field hearings on 
consumers hurt by abusive tax refund loans or unfair energy 
pricing. At Senator Levin's request, the Subcommittee also held 
hearings on offshore tax abuses, which are responsible for $100 
billion in unpaid taxes each year, and on U.S. money laundering 
vulnerabilities due to the failure of the States to obtain 
ownership information for the 2 million companies formed within 
their jurisdictions each year. The following pages describe the 
Subcommittee's work during the 109th Congress.

          II. Subcommittee Hearings During the 109th Congress

A. The United Nations' Management and Oversight of the Oil-for-Food 
        Program (February 15, 2005)
    On February 15, 2005, the Subcommittee held the second in a 
series of Subcommittee hearings on abuses related to the United 
Nations Oil-for-Food (OFF) Program. The Subcommittee's first 
hearing on this topic was held in November 2004, and detailed 
some of the methods employed by the Hussein regime to 
manipulate the Oil-for-Food Program to its own political 
advantage.
    The February hearing examined the United Nations' 
management of the OFF Program. In particular, the Subcommittee 
introduced evidence that Benon Sevan, the U.N. official who 
managed the Program for the U.N. Secretariat as the Executive 
Director of the Office of the Iraq Programme, received 
lucrative oil allocations from the Hussein regime. The 
Subcommittee also presented evidence that one of the U.N. oil 
inspectors--the agents retained by the United Nations to 
inspect the oil exports from Iraq under the OFF Program--may 
have taken a bribe of roughly $105,000 and helped Iraq generate 
$9 million in illegal, under-the-table revenue.
    The Subcommittee also examined the performance of Cotecna 
Inspection S.A., a company retained by the United Nations to 
inspect and authenticate humanitarian goods imported into Iraq 
under the OFF Program. The Subcommittee reviewed evidence that 
raised questions about the United Nations' award of the multi-
million dollar contract to Cotecna during a time when Kojo 
Annan, the son of Secretary-General Kofi Annan, was employed by 
Cotecna as a paid consultant. To assist in the Subcommittee's 
examination of these issues, the Subcommittee heard testimony 
from Cotecna's CEO Robert Massey, former Vice President Andre 
Pruniaux, and former inspector in Iraq Arthur Ventham. Messrs. 
Massey and Pruniaux testified that Cotecna had been awarded the 
contract on objective grounds and had met and exceeded its 
obligations under the U.N. contract. Mr. Ventham, a Cotecna 
inspector during the OFF Program, testified about the 
inadequacy and ineffectiveness of the inspection procedures 
utilized by Cotecna in connection with the OFF Program. The 
Subcommittee also heard testimony from Vernon P. Kulyk, a 
former Deputy Customs Expert for the Office of the Iraq 
Programme and former Cotecna employee, who testified about the 
efficacy of inspections of humanitarian goods under the 
Program.
    The Subcommittee also examined evidence raising questions 
about the performance of Saybolt, a company retained by the 
United Nations as its oil inspection agent. Specifically, the 
Subcommittee questioned John Denson, General Counsel of the 
Saybolt Group, concerning evidence suggesting that Saybolt had 
been granted a lucrative oil allocation by the Hussein regime. 
Moreover, the Subcommittee heard Mr. Denson's testimony 
concerning the evidence that one of Saybolt's oil inspectors 
may have received the $105,000 bribe to facilitate an illegal 
oil transaction for the benefit of Iraq.
    On the second panel of witnesses, the Subcommittee heard 
testimony from Joseph A. Christoff, Director of the 
International Affairs and Trade Team at the Government 
Accountability Office. Mr. Christoff testified about GAO's 
analysis of 58 audits of OFF Program operations conducted by 
the U.N. Office of Internal Oversight Services.
    The Subcommittee also heard from Stafford Clarry, a former 
Humanitarian Affairs Advisor for the OFF Program, concerning 
the Program's impact in the Kurdistan Regional Government in 
Northern Iraq. Mr. Clarry testified that the Kurdistan region 
had received substantially lower funding--amounting to an 
estimated $4 to $5 billion--than what had been allocated during 
the life of the Program and emphasized that the loss of funding 
had a substantial detrimental impact on Kurdistan. Mr. Clarry 
also testified about the lack of financial transparency 
concerning the Program's operations and finances. He concluded 
by emphasizing the need for greater transparency in U.N. audits 
and investigations to ensure proper management, minimize waste, 
and improve relations between local governments and the United 
Nations.
    The final witness was Patrick F. Kennedy, Ambassador to the 
United Nations for Management and Reform. Ambassador Kennedy's 
testimony outlined the formation and purpose of the OFF Program 
as a way to provide funds to an Iraqi economy under sanctions, 
while attempting to focus those funds on humanitarian efforts 
and not military agendas. Ambassador Kennedy stated that some 
U.N. member states had failed to honor their obligations and 
either directly or indirectly facilitated the Hussein regime's 
abuses of the OFF Program, including the manipulation of oil 
prices and receipt of kickbacks on humanitarian goods. 
Ambassador Kennedy described U.S. efforts to prevent or 
mitigate these abuses and stressed the difficulties the United 
States and the United Kingdom faced at the 661 Committee to 
pass any policy regarding Iraqi sanctions, including policy 
attempts to counter improper smuggling, price controls, and 
kickback activities of the Hussein regime. The Ambassador also 
criticized U.N. oversight of the OFF Program and the lack of 
transparency.
B. Tax Related Financial Products Can Be Costly (April 15, 2005)
    In 2005, the Subcommittee initiated an investigation into 
abusive practices associated with refund anticipation loans 
(RALs) and other tax-related products marketed to U.S. 
taxpayers. RALs are high-cost, short-term loans issued by 
companies and financial institutions to taxpayers, secured by 
the taxpayers' anticipated Federal tax refund. These loans are 
sold to taxpayers as a way to provide immediate access to their 
tax refunds, often without full disclosure of the high costs 
involved or the likely availability of the refund on a cost-
free basis in a matter of days or weeks. Estimates are that as 
many as 12 million RALs are issued each year, with interest 
rates ranging from 28 to 700 percent, depending upon whether 
the fees paid to obtain the RAL are included in the 
calculation. Consumers are estimated to pay RAL bank fees 
totaling from $790 million to $1.1 billion per year, plus 
additional tax preparer application fees totaling an estimated 
$282 million to $389 million.
    On April 15, 2005, the Subcommittee held a hearing in St. 
Paul, Minnesota on the marketing and sale of RALs, refund 
anticipation checks, audit insurance, and other tax-related 
products by tax preparers to their clients, especially 
unsophisticated taxpayers filing returns to qualify for the 
Earned Income Tax Credit. Among other issues, the hearing 
examined whether tax preparers who sold such products were 
acting in the best interest of their clients, or were motivated 
by their own financial gain. The hearing took testimony from 
three panels of witnesses.
    The first panel consisted of former clients and employees 
of H&R Block and Jackson Hewitt, which are the two largest U.S. 
tax preparation companies and both of which market RALs and 
other tax-related products to their clients. Julie Burbach, a 
former H&R Block client, testified that her tax preparer did 
not fully disclose the cost of the RAL that was sold to her or 
the availability of less costly options for obtaining her 
refund. She said that if she had fully understood her options 
she would not have taken a refund anticipation loan. She said 
that she was charged $322.90 for the RAL, which included $203 
for tax preparation fees and $119.90 for bank fees on her loan.
    Pat Eickelberry, a former H&R Block tax preparer, testified 
that H&R Block management pushed very hard for tax preparers to 
use the client-preparer trust relationship to sell the clients 
tax-related financial products such as refund anticipation 
loans and tax preparation guarantees. He testified that the 
sales emphasis was on refund speed rather than client cost. He 
testified that RALs were often sold to clients who could least 
afford it, did not understand they were applying for a loan, 
and did not understand the true costs. He further testified 
that H&R Block used financial incentives and performance 
evaluations to encourage its employees to sell financial 
products to the company's clients.
    Nila Grant, a former Jackson Hewitt tax preparer, testified 
that there was no management pressure or suggestive sales 
tactics used to sell financial products to clients, and the 
company did not offer incentives or use performance evaluations 
to sell its financial products. She also testified that most of 
her clients wanted their refund as soon as they could get it, 
which is why they purchased RALs. She testified that she 
believed her clients understood that they were receiving a 
loan.
    The second panel consisted of representatives from 
Minnesota consumer rights groups including Beth Haney, Director 
of Research for the Children's Defense Fund in Minnesota, and 
Bonnie Esposito, Executive Director for AccountAbility in 
Minnesota. Ms. Haney testified about the broader impact of RALs 
on Minnesota's low-income workers. She stated that, during the 
2003 tax filing season, an estimated $5.1 million of 
Minnesota's earned income tax credit funds were diverted from 
families to pay for RALs. She noted that the earned income tax 
credit is generally available to taxpayers who work and earn 
less that $30,000 per year. Further, according to Ms. Haney's 
testimony, RALs are expensive and many families do not 
understand that they are taking out a loan. She testified that 
research has shown that tax preparers target their services to 
low income neighborhoods where financial literacy is limited. 
Ms. Esposito testified that free tax preparation services at 40 
sites statewide had returned $10.9 million in tax refunds to 
9,500 low income taxpayers. However, Ms Esposito said that 
these sites are filled to capacity and they have to turn away 
taxpayers.
    The Subcommittee also received testimony that, in 
Minnesota, to obtain a RAL for an anticipated tax refund of 
$3,500, a client typically paid tax preparation fees, finance 
charges, account setup, and administrative fees totaling about 
$300. Despite this hefty payment, most RAL loans were repaid 
quickly with funds from the client's tax refund which is sent 
directly to the lender, with the loan itself often lasting less 
than 2 weeks.
    The third panel of witnesses consisted of representatives 
from H&R Block and Jackson Hewitt. H&R Block is the largest tax 
preparer in the Nation with 11,000 offices, while Jackson 
Hewitt operates about 3,800 franchises in 47 States. In 2004, 
H&R Block prepared about 15.9 million tax returns, representing 
15.6 percent of the individual income tax returns filed with 
IRS, and originated about 4.27 million RALs. In 2004, Jackson 
Hewitt prepared about 3.1 million tax returns and originated 
about 1.1 million RALs. The Subcommittee learned that the sale 
of tax-related products generated significant revenues for both 
firms, including about $200 million in 2004 revenues alone for 
H&R Block and Jackson Hewitt.
    Testifying for H&R Block, Robert A. Weiberger, Vice 
President for Government Relations, testified that RALs are 
extensively regulated by Federal lending laws and IRS rules 
that require full disclosure. He also discounted the cost to 
consumers, explaining that the interest rates are calculated on 
an annual basis, whereas RALs typically last an 11-day period. 
He said that, in Minnesota, for example, a $3,000 RAL costs 
$99.95 which is 3.3 percent of the refund amount, but 
annualizes as a 114 percent APR.
    Testifying for Jackson Hewitt, Gary P. Weinstein, Vice 
President for Legal and Government Affairs, announced five 
actions it was taking for the 2006 tax filing season on RALs 
after discussions with Senator Coleman. These actions included 
elimination of the tax preparer application fee for tax related 
products, elimination of a $10 finance fee imposed on earned 
income tax credit applicants, creation of a customer right to 
cancel a RAL within 48 hours, preparation of a comprehensive 
code of ethics, and creation of a customer bill of rights. He 
estimated that elimination of the $10 finance fee would save 
low income taxpayers $5 million for the 2006 tax filing season. 
Mr. Weinstein also testified that some customers needed and 
wanted RALs or other tax-related products, but that the company 
would make full disclosure in all instances where tax related 
financial products are elected by their customers.
C. Oil For Influence: How Saddam Used Oil to Reward Politicians Under 
        the United Nations Oil-for-Food Program (May 17, 2005)
    On May 17, 2005, the Subcommittee held a third hearing on 
the Oil-for-Food Program, entitled ``Oil For Influence: How 
Saddam Used Oil to Reward Politicians Under the United Nations 
Oil-for-Food Program.'' At that hearing, the Subcommittee 
examined evidence of how the Iraqi government under Saddam 
Hussein exploited the Oil-for-Food (OFF) Program for its own 
political purposes. The Subcommittee introduced evidence and 
released three staff reports showing that the Hussein regime 
had granted lucrative allocations of oil to foreign officials, 
political parties, companies, and journalists in an effort to 
engender international opposition to U.N. sanctions. The 
evidence also showed that the recipients had sold their oil 
allocations to oil traders for sizeable commissions. The 
Subcommittee examined how Saddam Hussein and his regime used 
OFF oil allocations in an effort to buy political influence in 
particular, steering a large portion of the oil allocations 
toward U.N. Security Council members, Russia, France, and 
China.
    The hearing heard from two panels of witnesses. The first 
panel consisted of Subcommittee investigators who had compiled 
and analyzed the evidence. Mark L. Greenblatt, Subcommittee 
Counsel, testified about the Subcommittee's investigation into 
how the Hussein regime had granted oil allocations to political 
figures around the world. First, Mr. Greenblatt examined 
evidence obtained by the Subcommittee that the Hussein regime 
granted allocations of 75 million barrels of oil to Vladimir 
Zhirinovsky, a prominent Russian official. According to one 
Iraqi government document introduced at the hearing, those 
allocations were valued at a profit of approximately $8.6 
million. Mr. Greenblatt also presented evidence that Bayoil, a 
U.S. oil company, had bought some of Mr. Zhirinovsky's oil 
allocations and that Mr. Zhirinovsky used the resulting funds 
to pay the Hussein regime millions of dollars in illegal, 
under-the-table surcharges. In addition, Mr. Greenblatt 
introduced evidence that French official Charles Pasqua and 
U.K. Parliament Member George Galloway had been granted oil 
allocations from the Hussein regime. The evidence obtained by 
the Subcommittee included documents from the Hussein regime 
listing the assigned oil allocations and testimony from former 
Hussein regime officials that Mr. Pasqua and Mr. Galloway had 
received allocations of Iraqi oil under the OFF Program.
    Steven A. Groves, Subcommittee Counsel, introduced evidence 
establishing that the Hussein regime attempted to exert 
influence at the highest levels of the Russian government by 
awarding oil allocations to officials, political parties, 
government ministries, and major oil companies in that country, 
based upon their good standing with the regime and their 
opposition to U.N. sanctions. For example, Mr. Groves 
introduced evidence that the Hussein regime awarded a large 
number of allocations to the Russian Presidential Council. The 
evidence obtained by the Subcommittee established that these 
transactions involved Bayoil. Those transactions showed that 
$9.2 million had been wired into different bank accounts in 
Cyprus, Greece, and Switzerland. The evidence also established 
that contracts allocated to the Russian Presidential Council 
resulted in illegal surcharge payments of about $5.6 million to 
the Hussein regime.
    Dan Berkovitz, Minority Counsel to the Subcommittee, 
testified regarding a report issued by the Subcommittee's 
Minority staff and released in conjunction with the hearing. 
That report described the Hussein regime's demand that all 
purchasers of Iraqi oil pay an illegal, per-barrel surcharge to 
bank accounts outside of the control of the OFF Program; how 
Iraqi records showed purchasers paid the regime about $228 
million in illegal surcharges from September 2000 to September 
2002; and how $118 million of those illegal surcharges, about 
52 percent, were paid to the Hussein regime on Iraqi barrels of 
oil sent to the United States. The report used Bayoil USA, the 
largest importer of Iraqi oil into the United States during the 
surcharge period, as a case history to illustrate how the 
surcharges were assessed and paid. The report also described 
the efforts of the U.S. and U.K. governments to put an end to 
the illegal surcharges. In addition, Mr. Berkovitz testified 
about the evidence in the report related to the so-called Khor 
al-Amaya shipments, which represented the largest incident of 
oil exported from Iraq in violation of U.N. sanctions. Mr. 
Berkovitz testified that oil tankers chartered by a company 
acting on behalf of the Jordanian government wired $53 million 
to the Iraqi government in exchange for 7.7 million barrels of 
oil illegal loaded onto the ships at the Khor al-Amaya port. 
That money went into bank accounts under the control of the 
Hussein regime just before the start of Iraqi invasion, 
providing the regime with hard currency. The report also 
presented evidence that the U.N. Maritime Interdiction Force, 
then under the command of a U.S. naval force, was aware of the 
illegal shipments but did nothing to stop them.
    On the second witness panel, George Galloway, a Member of 
the U.K. Parliament for Bethnal Green and Bow, testified 
concerning evidence obtained by the Subcommittee that he had 
been granted oil allocations from the Hussein regime, including 
testimony by multiple regime officials, documents from the 
Hussein-era Iraqi government, and documents from the post-
Hussein Iraqi government. Mr. Galloway vigorously denied that 
he had been granted such allocations or that he had benefited 
from any Iraqi oil deals.
    Thomas A. Schweich, Chief of Staff to the Mission to the 
United Nations, submitted written testimony discussing the U.N. 
Security Council's oversight of the Oil-for-Food Program and 
the difficulty the United States and the United Kingdom had in 
trying to maintain the effectiveness of OFF restrictions. Mr. 
Schweich stated this difficulty was due to both Saddam's 
efforts to avoid compliance with sanctions, and also certain 
governments' willingness to facilitate the Hussein regime's 
manipulations and abuses of the Program. Mr. Schweich stated 
that members of the U.N. Security Council that were benefiting 
economically from relationships with the Hussein regime were 
resistant toward attempts to achieve compliance with sanctions.
    Peter Reddaway, Professor Emeritus of Political Science and 
International Affairs at George Washington University, 
submitted written testimony discussing the Russian government 
and private oil sector, the corruption in government-business 
relations, and the Russian recipients of Iraqi oil allocations. 
Mr. Reddaway explained that, because the Russian Constitution 
gives extensive powers to the Executive Branch, the Legislative 
and Judicial Branches become dominated by the President and the 
Presidential Administration. The Executive Branch, according to 
Mr. Reddaway's testimony, also intervenes in the business 
world, indirectly mediating major disputes, and indirectly 
granting favors to some companies, while penalizing others. Mr. 
Reddaway stated that Russian oil companies that benefited from 
Iraq oil allocations were ``oligarchs'' with a reputation for 
demonstrating ruthless business tactics. These oligarchs 
possessed a net worth of more than $10 billion and had long and 
intimate ties to the highest levels of the Russian government. 
Mr. Reddaway also gave accounts of the recipients of the Iraqi 
oil allocations in the government and in the business sector.
D. The Container Security Initiative and the Customs-Trade Partnership 
        Against Terrorism: Securing the Global Supply Chain or Trojan 
        Horse? (May 26, 2005) and Neutralizing the Nuclear and 
        Radiological Threat: Securing the Global Supply Chain (March 28 
        and 30, 2006)
    Following the terrorist attacks of September 11, 2001, 
concern increased that terrorists could smuggle weapons of mass 
destruction in the approximately 11 million ocean-going 
containers that arrive in the United States every year. 
Maritime trade is one of the foundations of the global economy. 
Seaports are critical gateways for international trade, and 
shipping containers play a vital role in the movement of cargo 
between global trading partners. Approximately 90 percent of 
the world's trade is shipped in containers. Effectively 
securing cargo and ensuring the viability of the global supply 
chain is critical to homeland security and the global economy. 
To that end, the U.S. Government has established numerous 
programs to address global supply chain security.
    Since 2003, the Subcommittee has conducted an ongoing 
investigation into border security issues and Federal 
Government programs designed to secure the global supply chain. 
The Subcommittee's efforts culminated in three hearings during 
the 109th Congress. Many of the findings and recommendations of 
the Subcommittee were utilized in the drafting of S. 2459, the 
GreenLane Maritime Cargo Security Act and Public Law 109-347, 
the Security and Accountability for Every (SAFE) Port Act.
    The Subcommittee's bipartisan investigation included 
document requests to numerous Federal agencies, numerous 
meetings with the U.S. Department of Homeland Security (DHS) 
and Department of Energy (DOE), staff assessments of 10 
Container Security Initiative ports, staff examinations of 
eight U.S. ports of entry, a staff trip to the Nevada detection 
equipment test site, and a staff inspection of the National 
Targeting Center (NTC). Subcommittee staff have also met with 
Customs and Border Protection (CBP), Immigration and Customs 
Enforcement (ICE), the Domestic Nuclear Detection Office 
(DNDO), and the National Nuclear Security Administration 
(NNSA).
    In early 2002, the U.S. Customs Service launched both the 
Container Security Initiative (CSI) and the Customs-Trade 
Partnership Against Terrorism (C-TPAT) to address the threat of 
terrorism and the security of the global supply chain. CSI 
extends U.S. borders by stationing CBP officers at major 
international ports to pre-screen containers prior to their 
shipment to the United States. C-TPAT represents a public-
private partnership because private-sector applicants 
voluntarily commit to making security improvements in their 
supply chain in exchange for benefits from CBP. In addition to 
these programs, CBP established the Radiation Portal Monitor 
Project to install radiation detection equipment at U.S. Ports 
of Entry to screen cargo, mail, and vehicles for radioactive 
materials upon arrival in the United States.
    Another program to screen containers for radiation is the 
National Nuclear Security Administration Megaports Initiative, 
through which radiation detection equipment is provided to 
foreign governments and installed at major international 
seaports. Containers transiting these ports are screened by 
radiation detection equipment, effectively providing an 
additional layer of screening prior to the containers' arrival 
at a U.S. port. Collectively, these programs represent the 
Federal Government's efforts to secure the global supply chain 
and have been examined thoroughly in the Subcommittee's 
oversight investigation.
    Shortly after the inception of CSI and C-TPAT, the 
Subcommittee commenced its oversight of these critical 
programs. During the course of its oversight investigation, the 
Subcommittee raised significant concerns about the 
effectiveness of these programs. The Subcommittee discovered 
that, while these programs were positive initiatives, both CSI 
and C-TPAT face a number of compelling challenges that impact 
their ability to safeguard our Nation from terrorism.
    On May 26, 2005, the Subcommittee held its first hearing to 
examine the requirements for and challenges involved in 
transitioning CSI and C-TPAT from promising risk management 
concepts into effective and sustained enforcement operations. 
This hearing, entitled ``The Container Security Initiative and 
the Customs-Trade Partnership Against Terrorism: Securing the 
Global Supply Chain or Trojan Horse?,'' included the following 
witnesses: Hon. Robert C. Bonner, Commissioner, U.S. Customs 
and Border Protection; Richard M. Stana, Director, Homeland 
Security and Justice Team, Government Accountability Office; 
Commander Stephen E. Flynn (USCG, Retired), Jeane J. 
Kirkpatrick Senior Fellow for National Security Studies, 
Council on Foreign Relations; and Hon. C. Stewart Verdery, Jr., 
Principal, Mehlman Vogel Castagnetti, Inc.
    Following this hearing, the Subcommittee continued its 
investigation into the security of the global supply chain, 
culminating in a staff report and 2 days of hearings in March 
2006, entitled ``Neutralizing the Nuclear and Radiological 
Threat: Securing the Global Supply Chain.''
    On March 28, 2006, the first day of the hearing, the 
Subcommittee focused on the domestic and international 
deployment of radiation detection equipment, as well as U.S. 
Government efforts to prevent radiological and nuclear 
terrorism. The Government Accountability Office (GAO) released 
three reports at this hearing. These reports include: (1) U.S. 
Customs and Border Protection Radiation Portal Monitor Program 
(RPMP) to Install Radiation Portal Monitors (RPMs) at U.S Ports 
of Entry; (2) The Department of Energy Second Line of Defense 
Program to Install RPMs at Key International Border Crossings 
and Ports; and (3) The Successful Importation of Radiological 
Sources Across the Northern and Southern Border. Witnesses 
during part one of the hearing included: Hon. Thomas Kean, 
Former Governor of New Jersey and Chairman of the 9/11 
Commission; Commander Stephen E. Flynn (USCG, Retired), Jeane 
J. Kirkpatrick Senior Fellow for National Security Studies, 
Council on Foreign Relations; Eugene E. Aloise, Director, 
Nuclear and Nonproliferation Issues, Natural Resources and 
Environment, GAO; Gregory D. Kutz, Managing Director, Forensic 
Audits and Special Investigations, Financial Management and 
Assurance, GAO; Keith A. Rhodes, Chief Technologist, Center for 
Technology and Engineering, GAO; David G. Huizenga, Deputy 
Assistant Secretary, National Nuclear Security Administration; 
Vayl Oxford, Director, Domestic Nuclear Detection Office, 
Department of Homeland Security; and Jayson P. Ahern, Assistant 
Commissioner, U.S. Customs and Border Protection.
    The Subcommittee's second day of hearings, on March 30, 
2006, focused on the security of the global supply chain and 
updated the May 2005 hearing. In addition, the Subcommittee 
released a staff report on global supply chain security. The 
March 30 hearing examined the programs that form America's 
layered defense against nuclear terrorism, including CSI, the 
Megaports Initiative, and C-TPAT. The hearing also examined the 
role of the Domestic Nuclear Detection Office, a new office 
created within DHS to coordinate global nuclear detection 
architecture. Witnesses at this hearing included: Senator 
Lindsey Graham (R-SC); Senator Charles E. Schumer (D-NY); Hon. 
Michael P. Jackson, Deputy Secretary, Department of Homeland 
Security; Christopher L. Koch, President and CEO, World 
Shipping Council; Gary D. Gilbert, Senior Vice President, 
Hutchinson Port Holdings; and John P. Clancey, Chairman, Maersk 
Inc.
E. Civilian Contractors Who Cheat on Their Taxes and What Should Be 
        Done About It (June 16, 2005)
    The Permanent Subcommittee on Investigations continued its 
inquiry into Federal contractors who cheat on their taxes by 
examining the extent to which civilian contractors holding 
Federal contracts have outstanding tax debt. The Subcommittee's 
first hearing on this topic, in February 2004, looked at 
defense contractors and, based on a GAO report, found that 
27,100 companies holding Department of Defense contracts owed 
roughly $3 billion in unpaid taxes.
    On June 16, 2005, the Subcommittee held its second hearing, 
``Civilian Contractors Who Cheat on Their Taxes and What Should 
Be Done About It.'' Greg Kutz, the Director of Financial 
Management and Assurance at GAO, testified that 33,000 Federal 
contractors working for civilian departments and agencies owed 
$3.3 billion in unpaid Federal taxes. John J. Ryan, GAO 
Assistant Director of the Office of Special Investigations, 
identified 50 egregious cases of apparent tax evasion by 
civilian contractors, detailing potential fraud or criminal 
activity.
    GAO also testified that the U.S. Government's procedures 
for recouping unpaid taxes from Federal contractors are 
seriously flawed and mismanaged. Specifically, the Department 
of the Treasury's Financial Management Service (FMS) is not 
matching all contractor payments against outstanding tax debt 
to determine whether levies should be imposed on contractors' 
payments. This is occurring because (1) agency payment 
documentation is inaccurate or incomplete, (2) the FMS did not 
maintain current information on agency locations that are 
authorized to make payments, and (3) some FMS payment processes 
bypass the Treasury Offset Program (TOP) that is used to 
identify payments that should be levied.
    At the hearing, Richard L. Gregg, the Commissioner of FMS, 
acknowledged the problems identified by GAO and agreed to begin 
working to ensure that all payments are reviewed for possible 
levy under TOP. The Subcommittee also took testimony from 
Internal Revenue Service Commissioner Mark Everson.
F. The Defense Travel System: Boon or Boondoggle? (September 29, 2005)
    Between November 6, 2003 and May 27, 2005, the Chairman 
sent a series of questions about the Defense Travel System 
(DTS) to the Department of Defense (DOD). Prior hearings had 
addressed issues related to DOD's improper use of premium class 
travel and the failure to reclaim the costs of unused airline 
tickets. The questions were principally designed to determine 
whether DTS would resolve the issues that had been raised in 
previous hearings. Due to unsatisfactory responses from DOD, 
the Subcommittee initiated an investigation of DTS as part of 
its ongoing investigation of Federal travel abuse.
    The Defense Travel System was created to facilitate DOD 
travel and reduce travel costs. However, the Subcommittee's 
investigation revealed that reports by the DOD Inspector 
General, the DOD's Office of Program Analysis and Evaluation, 
the Government Accountability Office (GAO), and Citizens 
Against Government Waste questioned whether DTS was the most 
effective travel system for DOD and whether any actual savings 
would be realized by the implementation of DTS. Some of these 
reports also raised questions about restructuring the DTS 
contract following DTS' failure to pass its operational test.
    On September 29, 2005, the Subcommittee held a hearing to 
explore issues related to DTS.
    Thomas F. Gimble, Acting Inspector General (IG) for DOD 
testified about its DTS report issued July 1, 2002. That report 
found that DTS was at high risk for not being an effective 
solution to streamlining the DOD travel process. Mr. Gimble 
testified that, in response to the IG report, the DOD 
Comptroller had directed the Office of Program Analysis and 
Evaluation (PA&E) to undertake a cost effectiveness study of 
DTS. The PA&E report questioned whether DTS was the most cost 
effective travel solution to DOD's travel needs.
    Testifying for GAO, McCoy Williams stated that DOD had 
implemented changes to DTS without adequately testing them 
first. Further, DOD had no assurance that DTS properly 
displayed flight and airfare information. He also testified 
that DOD was incurring costs for operating duplicative travel 
systems that eroded the cost savings DTS planned to achieve.
    Robert Langsfeld, a partner in the Corporate Solutions 
Group was hired by the General Services Administration to audit 
the functionality of DTS. He testified that DTS did not display 
all available flights, the lowest cost flights, or all of the 
government rate flights that are required to be displayed. 
Thomas Schatz, President of Citizens Against Government Waste, 
testified that DTS was over budget, behind schedule, and was a 
waste of taxpayer dollars. Moreover, Mr. Schatz criticized 
DOD's renegotiation of the DTS contract because the risk of 
developing DTS was transferred from the contractor to the 
taxpayer.
    The Subcommittee also heard testimony from Zack Gaddy, 
Director of the Defense Finance and Accounting Service, 
Department of Defense. He testified that in 2002, the 
Department designated DTS as a Major Automated Information 
System, which meant greater scrutiny of DTS's progress and 
problems by the Department's senior leaders. Mr. Gaddy stated 
that at the present time, DTS does not accommodate all DOD 
travel requirements, such as processing permanent change of 
station, group, or mobilization travel, but he said these 
requirements would be addressed by the end of fiscal year 2006. 
Further he estimated that DTS would save DOD more than $35 
million in fiscal year 2006, with system total acquisition 
costs for the program expected to be $474 million through 
fiscal year 2006. Mr. Gaddy said that department-wide usage of 
DTS was expected by fiscal year 2009.
G. Corruption in the United Nations Oil-for-Food Program: Reaching a 
        Consensus on United Nations Reform (October 31, 2005)
    On October 31, 2005, the Subcommittee held its fourth and 
final hearing on its inquiry into abuses related to the Oil-
for-Food Program, entitled ``Corruption in the United Nations 
Oil-for-Food Program: Reaching a Consensus on United Nations 
Reform.''
    This hearing examined the Oil-for-Food (OFF) Program in the 
context of U.N. reform, including the extent and nature of 
reform needed, as well as specific recommendations. The 
evidence presented in the Subcommittee's earlier hearings 
showed that the OFF Program collected more than $64 billion in 
Iraqi oil proceeds, spent $34 billion on the Iraqi people's 
humanitarian needs, and spent another $18 billion on Kuwaiti 
reparations. The program was also the victim of kickback 
schemes that generated $229 million in illegal surcharges on 
contracts to buy Iraqi oil, and roughly $1.5 billion in payoffs 
on contracts selling humanitarian goods. In addition, the 
Hussein regime obtained $10 billion in illicit income from 
making sales of Iraqi oil outside of the OFF Program, primarily 
to Turkey, Jordan, and Syria, with the acquiescence of the 
world community, including the United States. Beyond Iraq's 
abuses of the program, there were significant management 
failures and outright corruption by U.N. officials. The October 
hearing examined how the mismanagement of the OFF Program 
allowed the abuses to take place and what management reforms 
were needed to prevent future failures and restore the United 
Nations' credibility.
    At the hearing, the Subcommittee heard from four experts on 
the OFF Program and U.N. management. Paul Volcker, Chairman of 
the Independent Inquiry Committee (IIC) into the United 
Nation's Oil-for-Food Program, briefed the Subcommittee on the 
IIC's final report describing the ways and means by which the 
Hussein regime manipulated the OFF Program. Mr. Volcker 
emphasized that the corruption of the program would not have 
been so pervasive if there had been more disciplined management 
by the United Nations and its agencies. According to Mr. 
Volcker, the IIC's report reinforced the need for wide-ranging 
administrative reform, emphasized in four areas: (1) the need 
for the Security Council to clarify the purpose and criteria in 
initiating and improving U.N. intervention in critical and 
administratively complex areas; (2) the Secretary General 
should create the position of Chief Operating Officer, who 
would have clear authority for planning and personnel 
practices; (3) internal control, auditing, and investigator 
functions must be strongly reinforced; and (4) the Security 
Council and Secretary General must demand coordination of large 
programs, like the Oil-for-Food Program, from the start.
    On the second panel, Newt Gingrich, Co-Chair of the Task 
Force on the United Nations at the United States Institute of 
Peace, testified about a June 2005 consensus report on U.N. 
reform, entitled ``American Interests and U.N. Reform.'' The 
report focuses on six key areas: (1) American interests and the 
United Nations; (2) saving lives, safeguarding human rights, 
and ending genocide; (3) repairing and reforming the management 
and operations of the United Nations; (4) deterring death and 
destruction, catastrophic terrorism and the proliferation of 
nuclear, chemical, and biological weapons; (5) war and peace: 
preventing and ending conflicts; and (6) helping people and 
nations: development and humanitarian assistance. Mr. Gingrich 
stressed his belief that the United States must work with other 
countries to move toward a voluntary dues paying model for the 
entire U.N. system. He testified that the problem of an 
ineffective U.N. bureaucracy lies not only in corruption, but 
also in incompetence and an inability to get things done, and 
warned that corruption will continue unless substantial reform 
takes place.
    Thomas Melito, Director of the International Affairs and 
Trade Team at the Government Accountability Office (GAO), 
testified about the need for internal oversight and procurement 
reform in the United Nations. Mr. Melito's statement reflected 
a GAO investigation into the United Nations' procurement 
process and its Office of Internal Oversight Services. The 
investigation focused on two main findings: (1) how effective 
oversight of U.N. organizations is hindered by the United 
Nations' budgeting processes, and (2) the United Nations' 
failure to fully address previously identified problems 
affecting the openness and professionalism of its procurement 
system.
    Robert Werner, Director of the Office of Foreign Assets 
Control (OFAC) at the U.S. Department of the Treasury, 
testified on OFAC's role in the Oil-for-Food Program in 
relation to Bayoil Inc., an American oil company whose 
executives were indicted in April 2005 for violating Iraqi 
sanctions in connection with the Program. OFAC is responsible 
for administering and enforcing U.S. economic sanctions 
programs against government entities and individuals. In 1996, 
OFAC determined that Bayoil violated Iraqi sanctions on two 
separate occasions when purchasing oil from Iraq without first 
obtaining licensing authorization.
    The Subcommittee also released two staff reports in 
connection with the hearing. The first, ``Testimony of George 
Galloway Before the Permanent Subcommittee on Investigations,'' 
by the Majority staff, examined evidence that Mr. Galloway may 
have provided misleading testimony at the prior Subcommittee 
hearing on the OFF Program. The second, ``Bayoil Diversions of 
Iraqi Oil and Related Oversight Failures,'' by the Minority 
staff, examined actions taken by Bayoil USA to sell Iraqi oil 
in unapproved markets and reap millions of dollars of illicit 
revenue in violation of the U.N. sanctions program and U.S. 
regulations. The report also examined in more detail inadequate 
U.S. and U.N. oversight efforts and failure to stop Bayoil's 
illicit activities.
H. Volatility In the Natural Gas Market: The Impact of High Natural Gas 
        Prices on American Consumers (February 13, 2006)
    On February 13, 2006, the Subcommittee held a field hearing 
in Minnesota entitled, ``Volatility in the Natural Gas Market: 
The Impact on High Natural Gas Prices on American Consumers.'' 
This hearing examined why natural gas prices had become 
increasingly high and volatile, the impact higher prices have 
had on the economy, businesses, and families, and the 
government's role on the State and Federal level to provide 
affordable natural gas.
    Natural gas is an essential contributor to U.S. energy 
needs, heating more than 63 million homes, powering industrial 
and agricultural production, and providing a substantial amount 
of the Nation's electricity needs. For decades the average 
price of natural gas was $2.30 to $2.50 per million btu. Since 
2000, however, natural gas prices have increased, fluctuating 
generally between $2 and $10 per million btu. In December 2005, 
however, NYMEX natural gas futures closed above $14 per million 
btu. The evidence also indicates that the United States pays 
significantly higher prices for natural gas than the rest of 
the world. Even countries like Japan that produce no natural 
gas have lower natural gas prices than the United States.
    These increased energy costs are taking a toll on the 
American economy, businesses, consumers, and families. In 
Minnesota, rising costs have hurt many families that heat their 
homes with natural gas. Between 1999 and 2004, residential 
heating prices have risen 73 percent according to the Energy 
Information Administration, forcing families to spend more 
money on their heating bills, and requiring some to choose 
between paying for heat, medicine, food, and clothing. Natural 
gas prices paid by Minnesota's manufacturers have increased 
nearly 150 percent since 1999, which is especially challenging 
for businesses competing with countries where energy costs far 
less.
    Allegations of price manipulation and charges that 
suppliers are withholding gas supplies from the market have 
increased in frequency. At the same time, oil industry profits 
have nearly tripled over the last 3 years to $87 billion last 
year. In the first 9 months of 2005, the five largest oil 
companies made $84 billion in profits. In fact, Exxon Mobil 
Corp. reported that its 2005 earnings totaled $36.13 billion, 
the largest annual profit ever for a U.S. company. The 
company's annual profit was up 43 percent from the year before.
    Energy market projections estimate record natural gas 
prices for the 2005-2006 winter season. Data also indicates 
that the balance between supply and demand for natural gas in 
North America has been tightening for the last decade as 
production has increased only slightly while the economy has 
significantly increased demand. In addition, record natural gas 
prices last winter were attributable to an unusually warm 
summer, the hottest on record according to the National 
Climatic Data Center, which reduced natural gas inventories due 
to increased use of natural gas-fired electric generation to 
cool homes during the summer months. Hurricanes Rita and 
Katrina also had a significant effect on the natural gas 
industry, with over a dozen natural gas processing plants going 
off-line resulting in the loss of 10 Bcf of production, almost 
one-fifth of the U.S. average daily production. While high 
prices last winter were largely a result of these three 
factors, market manipulation is also a concern.
    The February 13, 2006, Subcommittee hearing heard testimony 
from a variety of witness about the impact of higher natural 
gas prices on Minnesota and the U.S. economy. Two Minnesota 
residents, Lucille Olson and Deidre Jackson, discussed the 
impact of higher prices on their families. LaRaye Osborne, Vice 
President of Environment, Health and Safety at Cargill, 
testified about the effect that higher prices have had on 
profitability and global competitiveness as well as the 
company's energy initiatives, including the use of renewable 
fuels to conserve energy. Kathleen O'Brien, Vice President of 
University Services at the University of Minnesota, testified 
about the effect of higher natural gas prices for the 
University, indicating that, as recently as June 2003, the 
University purchased natural gas for $3.12 per million btu 
while projections last winter indicated prices as high as $15 
per million btu. In addition, Ms. O'Brien also discussed the 
University's research and development initiatives for using 
alternative fuels, including wind energy, which is providing 60 
percent of the electricity needs at the Morris campus.
    LeRoy Koppendrayer, Chairman of the Minnesota Public 
Utilities Commission, and Edward Garvey, Deputy Commissioner 
for Energy and Telecommunications of the Minnesota Department 
of Commerce, testified about recent pricing trends that are 
affecting residents as well as the State's efforts for ensuring 
low natural gas prices. Susan Court, Director of the Office of 
Market Oversight and Investigations at the Federal Energy 
Regulatory Commission, testified about the factors driving up 
natural gas prices as well as the Commission's oversight 
efforts to ensure just and reasonable wholesale prices. Last, 
James Wells, Managing Director of the Minnesota Natural 
Resources and Environment Department, testified on the factors 
affecting price, market manipulation, and recommendations to 
ensure prices are determined in a competitive and informed 
marketplace.
I. GSA Contractors Who Cheat on Their Taxes and What Should Be Done 
        About It (March 14, 2006)
    As part of its continuing investigation into Federal 
contractors that cheat on their taxes, the Subcommittee held a 
third hearing examining the extent to which the General 
Services Administration (GSA) had issued contracts to companies 
that were tax delinquent. The Subcommittee also sought to 
determine whether there were any mechanisms to bar tax-
delinquent Federal contractors from receiving new Federal 
contracts.
    On March 14, 2006, Greg Kutz, GAO Director of Financial 
Management and Assurance, testified that 3,800 GSA contractors 
have outstanding tax debts amounting to $1.4 billion as of June 
30, 2005. Many of these contractors were on GSA's Master Award 
Schedule, which permits a contractor to provide goods and 
services to any Federal agency without the need to have 
contracts with each agency. GAO also identified 25 instances of 
abusive or potentially criminal activity related to the Federal 
tax system. These 25 contractors provided a variety of goods 
and services, including building maintenance, security 
services, and computer services. Finally, GAO testified that 
neither Federal law as implemented by the Federal Acquisition 
Regulations, nor GSA policies require contracting officers to 
specifically consider tax debts in making contract decisions 
either at the initial award or when considering options to 
extend the contract.
    The Subcommittee's investigation determined that Federal 
contractors with tax debts are not identified prior to being 
awarded government contracts because the government is asking 
the wrong questions. Federal contractors and potential 
contractors must disclose on a Representations and 
Certifications Application whether they have been indicted for 
or convicted of tax evasion in the last 3 years. However, in 97 
cases of egregious tax abuse identified by GAO, none of the 
contractors had been indicted for or convicted of tax evasion. 
This was confirmed by Kathleen Turco, the Acting Deputy 
Administrator for GSA, in her testimony before the 
Subcommittee. Commissioner Mark Everson testified on the 
progress of the Federal Contractor Tax Compliance Task Force's 
efforts to improve the Federal Payment Levy Program. Among the 
improvements he cited were the validation of all Federal 
contractors taxpayer identification numbers, a $23 million 
increase in Federal contractor collections, and the inclusion 
of Federal contractors who file their tax returns as 
individuals and have outstanding tax debts.
    The Subcommittee also took testimony from Steve Sebastian, 
Director of GAO's Financial Management and Assurance Team, and 
John J. Ryan, Assistant Director of GAO's Office of Special 
Investigations.
J. Tax Haven Abuses: The Enablers, the Tools and Secrecy (August 1, 
        2006)
    In 2006, the Subcommittee held a hearing in its ongoing 
investigation to combat offshore tax abuses and abusive tax 
shelters. Offshore tax havens today hold trillions of dollars 
in assets, including an estimated $1 trillion belonging to U.S. 
taxpayers. While these jurisdictions claim to offer clients 
financial privacy, limited regulation, and low taxes, too often 
these jurisdictions have instead become havens for tax evasion, 
financial fraud, and money laundering. A sophisticated offshore 
industry, with an armada of professionals including tax 
attorneys, accountants, bankers, brokers, corporate service 
providers, and trust administrators, aggressively promotes 
offshore jurisdictions to U.S. citizens as a means to avoid 
taxes and creditors in their home jurisdictions. These 
professionals, many of whom are located or do business in the 
United States, help U.S. citizens open offshore accounts, 
establish sham trusts and shell corporations, hide assets 
offshore, and enable them to make secret use of offshore assets 
here at home. Experts estimate that Americans use offshore tax 
dodges to evade between $40 and $70 billion in U.S. taxes each 
year, while U.S. corporations use them to evade another $30 to 
$60 billion in taxes each year. The resulting $100 billion tax 
gap each year due to offshore tax abuse increases the tax 
burden on America's working families.
    The Subcommittee has held a series of hearings examining 
different aspects of offshore and tax shelter abuses. A 2001 
hearing examined, for example, the historic and ongoing lack of 
cooperation by some offshore tax havens with international tax 
enforcement efforts, and their resistance to divulging 
information needed to detect, stop, and prosecute U.S. tax 
evasion. A 2002 hearing examined an international tax shelter 
used by Enron to escape taxes and artificially strengthen its 
balance sheet. In 2003, 2 days of Subcommittee hearings and a 
staff report disclosed how respected accounting firms, banks, 
investment advisors, and lawyers had become high-powered 
engines behind the design and sale of abusive tax shelters. The 
hearings featured a case history on abusive tax shelters that 
had been developed, promoted, and implemented in whole or in 
part by KPMG, one of the largest accounting firms in the world.
    In April 2005, as a followup to its 2003 investigation, the 
Subcommittee issued a bipartisan report, ``The Role of 
Professional Firms in the U.S. Tax Shelter Industry,'' with 
additional information on the mass marketing of abusive tax 
shelters; specific tax shelters that had been promoted by KPMG, 
Ernst and Young, or PricewaterhouseCoopers; and the role played 
by other professional firms in helping to spread those abusive 
tax shelters across the country, including actions taken by 
Sidley Austin Brown and Wood, Deutsche Bank, HVB, Wachovia 
Bank, Presidio, and Quellos. The report provided 10 
recommendations to combat abusive tax shelters and the 
professionals promoting them.
    In August 2006, the Subcommittee held hearings and issued a 
bipartisan, 370-page staff report entitled, ``Tax Haven Abuses: 
The Enablers, the Tools and Secrecy,'' focusing on offshore 
abuses. This investigation featured six case histories 
illustrating how the offshore industry enabled U.S. taxpayers 
to undermine, circumvent, and violate U.S. tax, securities, and 
anti-money laundering laws. In one case history, for example, 
two brothers from Texas, Sam and Charles Wyly, built a network 
of 58 offshore trusts and corporations over 13 years to avoid 
paying taxes on most of the $190 million in stock options sent 
offshore and $600 million in income generated by investing the 
offshore funds. The brothers used the offshore funds to finance 
U.S. business ventures, acquire U.S. real estate, and buy art, 
furnishings, and jewelry for the personal use of Wyly family 
members in the United States. In another case history, a U.S. 
securities firm designed, sold, and helped implement an 
abusive, offshore tax shelter known as the POINT Strategy to 
help five U.S. clients dodge payment of U.S. taxes on more than 
$2 billion in capital gains. A third case history showed how a 
one-man U.S. company, EDG, recruited clients through the 
Internet and helped them create offshore structures and open 
offshore bank accounts. The remaining case histories detailed 
how U.S. businessmen used offshore schemes to hide assets and 
dodge U.S. taxes.
    The report recommended a number of reforms to rein in tax 
haven abuses, including provisions to simplify proof of 
beneficial ownership of offshore entities, strengthen SEC 
disclosure requirements for officers and directors with 
offshore holdings, strengthen 1099 reporting of U.S. accounts 
that are opened in the name of offshore entities but secretly 
benefit U.S. persons, strengthen foreign trust distribution 
rules, require hedge fund anti-money laundering programs, bar 
tax shelters involving stock option-annuity swaps, and impose 
sanctions on uncooperative offshore tax havens.
    At the 2006 hearing, the Subcommittee heard testimony from 
five panels of witnesses. The single witness on the first panel 
was IRS Commissioner Mark Everson, who described the scope of 
offshore tax abuses confronting his agency and the difficulties 
associated with investigating and proving offshore tax cases.
    The second panel of witnesses consisted of an international 
tax expert, Reuven S. Avi-Yonah, Irwin I. Cohen Professor of 
Law at the University of Michigan School of Law, and a 
securities expert, Gary M. Brown, from the law firm of Baker, 
Donelson, Bearman, Caldwell and Berkowitz. These experts 
discussed offshore transactions that undermine U.S. tax and 
securities law, including transactions associated with two of 
the case histories featured in the Subcommittee's 
investigation, involving the Wylys and the POINT Strategy.
    The third panel presented testimony from individuals with 
first-hand information about the Wyly case history and the 
POINT Strategy. Michael C. French, former Trust Protector for 
the offshore trusts established by Sam and Charles Wyly, 
described how the brothers' offshore network of trusts and 
corporations operated and how they used offshore funds in the 
United States. Haim Saban of the Saban Capital Group, Inc. in 
Los Angeles, California, and Robert Wood Johnson IV of New 
York, discussed their respective use of the POINT Strategy and 
failure to pay taxes on substantial capital gains.
    The fourth panel presented testimony from securities and 
bank personnel involved in the Wyly offshore network and the 
POINT Strategy. Louis J. Schaufele III, a securities broker, 
testified about his handling of securities transactions and 
accounts at multiple U.S. financial institutions on behalf of 
the Wyly-related offshore trust and corporations. Michael Conn, 
Private Bank Northwest Region President of Bank of America, 
discussed his bank's handling of some of these transactions. 
Jeffrey Greenstein, Chief Executive Officer of the Quellos 
Group, LLC of Seattle, Washington, testified about how his 
company developed, sold, and implemented the POINT Strategy. 
George T. Wendler, Senior Executive Vice President and Chief 
Credit Officer of HSBC Bank USA, testified about his bank's 
involvement with carrying out various aspects of the POINT 
Strategy.
    The fifth panel presented testimony from lawyers who were 
involved with the Wyly case history and POINT Strategy. Michael 
G. Chatzky of Chatzky and Associates in San Diego testified 
about how he designed transactions to enable the Wylys to move 
$190 million in stock option compensation offshore without 
paying any taxes on that compensation. Charles W. Blau, of 
Meadows, Owens, Collier, Reed, Cousins and Blau in Dallas, 
testified about how his law firm designed transactions that 
allowed the Wylys to purchase real estate using offshore funds, 
and to engage in other matters involving their offshore 
holdings, again without paying taxes on the funds brought into 
the United States. Lewis R. Steinberg, former tax partner at 
Cravath, Swaine and Moore LLP in New York, testified about his 
role in writing a legal opinion letter affirming the validity 
of the POINT Strategy. John P. Barrie, partner at Bryan Cave 
LLP, provided similar testimony.
    After the hearing, Senators Levin, Coleman, and Obama 
introduced legislation to stop abusive tax shelters and 
offshore tax dodges.
K. Failure To Identify Company Owners Impedes Law Enforcement (November 
        14, 2006)
    As part of its ongoing efforts to examine money laundering 
and tax evasion problems in the United States, on November 14, 
2006, the Subcommittee held a hearing on how the 50 States 
currently do not obtain the names of the beneficial owners of 
the corporations formed in their jurisdictions, how the lack of 
this ownership information impedes law enforcement, and how the 
absence of legal requirements for ownership information 
violates the United States' commitment to comply with 
international standards for strong anti-money laundering laws.
    Nationwide, the 50 States form nearly two million 
corporations and limited liability companies each year without 
obtaining the names of the companies' owners. Many of these 
corporations are formed over the Internet, at minimal cost, 
within 24 hours of a request. A small percentage of these 
companies become involved with terrorist financing, money 
laundering, tax evasion, securities fraud, or other misconduct. 
The Subcommittee has long been concerned about the legal 
difficulties associated with investigating and prosecuting 
anonymous U.S. corporations involved in wrongdoing.
    In November 2000, for example, at the request of the 
Subcommittee, GAO conducted an investigation and released a 
report entitled, ``Suspicious Banking Activities: Possible 
Money Laundering by U.S. Corporations Formed for Russian 
Entities.'' This report revealed that a Russian immigrant 
living in the United States was able to set up more than 2,000 
Delaware shell corporations, open bank accounts for these 
corporations, and ultimately move $1.4 billion through the 
accounts, without knowing the owners of the corporations.
    In April 2006, again at the Subcommittee's request, GAO 
reviewed the corporate formation laws in all 50 states and 
issued a report entitled, ``Company Formations: Minimal 
Ownership Information Is Collected and Available.'' GAO found 
that most States do not collect, nor do they possess, any 
information on the beneficial owners or controlling persons 
associated with the legal entities formed in their 
jurisdictions. GAO also determined that the lack of ownership 
information impeded law enforcement efforts.
    The Subcommittee's November 2006 hearing explored these 
matters further by taking testimony from three panels of 
witnesses. The first panel consisted of Federal law enforcement 
officials from the Department of Justice, IRS, and the Treasury 
Department, each of whom testified that the absence of 
corporate ownership information hindered their efforts to 
investigate and prosecute misconduct by U.S. companies. The law 
enforcement witnesses were Stuart G. Nash, Associate Deputy 
Attorney General and Director of the Organized Crime Drug 
Enforcement Task Force at the U.S. Department of Justice; K. 
Steven Burgess, Director of Examinations at the Small Business/
Self Employed Division of the IRS; Robert Northcutt, Acting 
Director of the Abusive Transactions Office at the Small 
Business/Self Employed Division of the IRS; and Jamal El-hindi, 
Associate Director for Regulatory Policy and Programs at the 
Financial Crimes Enforcement Network (FinCEN) in the U.S. 
Department of the Treasury. Mr. Nash testified, for example, 
that the Department ``had allegations of corrupt foreign 
officials using [U.S.] shell accounts to launder money, but 
were unable--due to lack of identifying information in the 
corporate records--to fully investigate this area.'' They also 
testified that the leading international body fighting money 
laundering, the Financial Action Task Force on Money Laundering 
(FATF), has formally cited the United States for failing to 
obtain beneficial ownership information when companies are 
formed and directed the United States to remedy this deficiency 
in its laws by June 2008.
    The second panel presented testimony from Yvonne Jones, 
Director of Financial Markets and Community Investment Team at 
GAO, about GAO's investigation and report. Among other 
testimony, she provided several examples of cases in which law 
enforcement was unable to investigate misconduct due to 
inadequate company ownership information. For example, U.S. 
Immigration and Customs Enforcement officials told GAO that a 
Nevada-based corporation received more than 3,700 suspicious 
wire transfers totaling $81 million over 2 years, but the case 
was not pursued, because the agency was unable to identify the 
corporation's owners. The FBI told GAO that anonymously-held 
U.S. shell companies were being used to launder as much as $36 
billion from the former Soviet Union. The FBI also reported 
that it had 103 open cases investigating stock market 
manipulation, most of which involved anonymously-held U.S. 
shell companies. FinCEN reported that, between April 1996 and 
January 2004, financial institutions had filed 397 suspicious 
activity reports involving a total of almost $4 billion 
deposited in or wired through U.S. financial institutions by 
anonymously-held U.S. shell companies. A Department of Justice 
report revealed that Russian officials used anonymously-held 
shell companies in Pennsylvania and Delaware to unlawfully 
divert $15 million in international aid intended to upgrade the 
safety of former Soviet nuclear power plants.
    The third panel presented testimony from State officials 
representing Delaware, Nevada, and Massachusetts. The State 
officials were Richard J. Geisenberger, Assistant Secretary of 
State, State of Delaware; Scott W. Anderson, Deputy Secretary 
of State for Commercial Recordings, Office of the Secretary of 
State, State of Nevada; and Laurie Flynn, Chief Legal Counsel, 
Office of the Secretary of the Commonwealth of Massachusetts. 
All three discussed their existing requirements to obtain 
company ownership information, the competitive pressures to 
minimize incorporation requirements, and the issues related to 
requiring ownership information.
    As a consequence of the hearing, in the next Congress, 
Senators Levin, Coleman, and Obama introduced legislation to 
require States that receive funding from the U.S. Department of 
Homeland Security to obtain beneficial ownership information 
for the companies formed in their jurisdictions.
L. The Defense Travel System: Boon or Boondoggle? (Part 2) (November 
        16, 2006)
    Following the September 29, 2005, hearing on the Defense 
Travel System (DTS), the Chairman sent letters to the DOD 
Inspector General (IG) and GAO requesting an evaluation of DTS. 
The DOD IG was asked to perform a cost-benefit analysis to 
determine whether DTS was the best and most cost-effective 
solution to DOD's travel needs. GAO was asked to assess the 
reliability of DOD's projected cost savings for DTS. On 
November 16, 2006, the Subcommittee convened a hearing to 
obtain the results of the DOD IG and GAO evaluations.
    Thomas F. Gimble, Acting IG for DOD, testified that the IG 
could not perform a cost-benefit evaluation because DOD had 
failed to maintain the required travel records. He also 
testified that DOD continued to pay for duplicate travel 
systems. McCoy Williams of GAO testified that DOD's projected 
$56 million in DTS savings was not justified. Further, Mr. 
Williams testified that 87 of 246 airline flights that are 
required to be listed on DTS were not displayed, and DOD did 
not know the extent to which DTS was being used. A Subcommittee 
inquiry had determined that, in 2006, at 42 locations DTS was 
used only 17 percent of the time.
    Dr. David Chu, Under Secretary of Defense for Personnel and 
Readiness, testified that he was aware of the problems, and 
that DOD was working to resolve them.

         III. Legislative Activities During the 109th Congress

    The Permanent Subcommittee on Investigations does not have 
legislative authority, but because its investigations play an 
important role in bringing issues to the attention of Congress 
and the public, the Subcommittee's work frequently contributes 
to the development of significant legislative initiatives. The 
Subcommittee's activity during the 109th Congress was no 
exception, with Subcommittee hearings and Members playing 
prominent roles in the development of a number of legislative 
initiatives.
A. SAFE Port Act (Public Law 109-347)
    The SAFE Port Act provides an international, layered, and 
risk-based approach to improving maritime security. The 
legislation strengthens U.S. seaport security by providing 
additional resources, grants, and training programs for port 
personnel. The legislation requires radiation scanning of all 
containers at the top 22 U.S. seaports, covering 98 percent of 
containers entering the United States, and requires the 
Department of Homeland Security (DHS) to develop clear response 
and recovery plans in the event of a terrorist attack in a 
seaport. Additionally, the legislation sets firm deadlines for 
the implementation of the Transportation Worker Identification 
Credential (TWIC), and requires a pilot program to ensure that 
card readers installed at port facilities and vessels are 
reliable and effective.
    The legislation also seeks to improve maritime security 
through strengthening the supply chain. Additional advanced 
data on cargo entering the United States will be required prior 
to loading at foreign seaports to allow for more accurate 
security targeting. Three pilots are required to evaluate the 
feasibility of conducting 100 percent scanning of containers at 
foreign seaports for nuclear and radiological material. The 
legislation requires detailed evaluation of the pilots prior to 
full-scale implementation, including an assessment of 
effectiveness in detecting a shielded nuclear weapon, and 
regular reporting to Congress. The Customs-Trade Partnership 
Against Terrorism (C-TPAT) is authorized and enhanced by 
requiring on-site validations of all participants, hiring of 
100 additional Customs and Border Protection Supply Chain 
Security Specialists, and establishing a pilot program to test 
the use of third-party validators.
    To ensure that DHS programs and policies on cargo and 
maritime security are coordinated and accountable and to ensure 
that policies balance the need to facilitate legitimate 
commerce, the legislation establishes an Office of Cargo 
Security Policy and designates a Director of International 
Trade to be a senior advisor to the Secretary.
    The legislation also establishes the Domestic Nuclear 
Detection Office (DNDO) within the Department, authorizing it 
to develop and maintain a global nuclear detection 
architecture, of which the domestic portion will be implemented 
by DNDO. To improve the effectiveness of the architecture in 
detecting nuclear and radiological material or devices over 
time, the legislation directs DNDO to conduct a robust research 
and development program to include rigorous testing and 
evaluation of detection technologies.
    The legislation also modernizes our Nation's Emergency 
Alert System (EAS) by permitting commercial mobile service 
providers to transmit geographically-targeted emergency alerts 
and warnings to the American public through cell phones, 
pagers, blackberries, and other mobile technologies. The use of 
such devices and other advanced technologies will facilitate 
the development of an effective, reliable, integrated, 
flexible, and comprehensive system to alert and warn people in 
situations of war, terrorist attack, natural disaster, or other 
hazards to public safety and well-being.
B. Strategic Petroleum Reserve Amendment to the Energy Policy Act 
        (Amendment 864 to H.R. 6--by Senators Levin, Collins, Wyden, 
        and Schumer)
    On June 22, 2005, Senators Levin, Collins, Wyden, and 
Schumer amended the Energy Policy Act to require the U.S. 
Energy Department to fill the Strategic Petroleum Reserve (SPR) 
in a cost-effective manner, taking into account the effect on 
oil prices. The SPR is the United States' emergency oil 
stockpile that stores crude oil. Since 2001, DOE has been 
steadily adding oil to the SPR, which now holds about 695 
million barrels out of a maximum physical capacity of about 700 
million barrels. A 2003 Subcommittee Minority staff report, 
issued by Senator Levin, found that a major factor in rising 
U.S. oil prices was the Administration's break from the past 
practice of filling the SPR only when oil supplies were 
plentiful and prices low--instead filling it continuously 
without regard to price or supplies. The report found that the 
continuous filling of the SPR took oil off the commercial 
market and put upward pressure on U.S. oil prices. The Levin-
Collins amendment, which is nearly identical to a Levin-Collins 
amendment that was approved by the Senate in 2003, but later 
dropped from final legislation, restores the prior SPR fill 
policy. The amendment, which was enacted into law in August 
2005, as part of the Energy Policy Act, requires DOE to develop 
procedures for obtaining oil for the SPR that take into account 
the effect on U.S. oil prices and supplies.
C. Tax Shelter and Tax Haven Reform Act (S. 1565--by Senators Levin, 
        Coleman, and Obama)
    On July 29, 2005, Senators Levin, Coleman, and Obama 
introduced the Tax Shelter and Tax Haven Reform Act. This bill, 
which was a revised and improved version of S. 2210 from the 
last Congress, was intended to combat abusive tax shelters and 
uncooperative offshore tax havens. Among other provisions, this 
bill sought to increase penalties on tax shelter promoters and 
persons who knowingly aid or abet tax evasion; allow the IRS to 
share information with other civil law enforcement agencies; 
strengthen standards for issuing tax shelter legal opinion 
letters; strengthen rules barring unethical conduct by tax 
practitioners; codify the economic substance doctrine which 
requires transactions to have economic substance apart from tax 
avoidance; and impose penalties on offshore tax havens which 
the U.S. Treasury Secretary determined were uncooperative with 
U.S. tax enforcement. The bill was referred to the Finance 
Committee, which took no further action on it.
D. Transportation, Treasury, Housing and Urban Development, the 
        Judiciary, the District of Columbia, and Independent Agencies 
        Appropriations Act, 2006 (H.R. 3058)
    Based on a July 14, 2005, colloquy with Senator Bond, the 
Chairman of the Appropriations Subcommittee on Transportation, 
Treasury, the Judiciary, Housing and Urban Development, and 
Related Agencies, Senators Coleman, Levin, Wyden, Akaka and 
Coburn added an amendment to the Transportation, Treasury, 
Housing and Urban Development, the Judiciary, the District of 
Columbia, and Independent Agencies Appropriations Act, 2006, 
that would have required the addition of business class travel 
to the annual Federal travel report. The language was 
subsequently removed in conference.
E. Purchase Card Waste Elimination Act of 2005 (S. 457--by Senators 
        Collins, Coleman, Levin, and Akaka)
    On June 22, 2005, Senators Coleman, Levin, and Akaka 
amended the Purchase Card Waste Elimination Act of 2005 (S. 
457) introduced by Senator Collins, to require the addition of 
business class travel to the annual Federal travel report.

                         IV. Reports and Prints

A. Money Laundering and Foreign Corruption: Enforcement and 
        Effectiveness of the Patriot Act, Supplemental Staff Report on 
        U.S. Accounts Used by Augusto Pinochet, March 17, 2005 (Report 
        Prepared by Majority and Minority Staffs) (S. Prt. 109-25)
    During the last Congress, the Subcommittee conducted a 
year-long investigation into whether U.S. financial 
institutions were complying with the stronger anti-money 
laundering controls enacted into law in the Patriot Act. In 
2004, a Subcommittee hearing and Minority staff report on this 
investigation disclosed that Riggs Bank had opened accounts, 
helped create offshore corporations, and performed suspect 
financial transactions on behalf of the former President of 
Chile, Augusto Pinochet involving millions of dollars. 
Following the hearing, Riggs identified additional documents 
and accounts that should have been provided in response to 
Subcommittee subpoenas. Using these documents and additional 
information, the Subcommittee uncovered a secret web of at 
least 125 U.S. bank and securities accounts at Riggs and other 
financial institutions operating in the United States that were 
used by Mr. Pinochet, his family members, and associates to 
move millions of dollars. On March 17, 2005, the Subcommittee 
released a supplemental staff report describing these 
additional accounts.
    The new information showed that the web of Pinochet 
accounts in the United States was far more extensive, went on 
far longer, and involved more banks than previously disclosed. 
It also showed that some banks had actively helped Mr. Pinochet 
to hide his funds, while others had failed to comply with U.S. 
regulations requiring banks to know their customers.
    The report provided four key findings. First, the 
relationship between Riggs Bank and Augusto Pinochet was more 
extensive than previously disclosed, encompassing 28 accounts 
instead of nine, spanning 25 years instead of eight, including 
secret accounts opened under misleading names, and involving 
more personal, high-level contact between Riggs officials and 
Pinochet than previously described. Second, from 1981 to 2004, 
eight Riggs accounts, opened in the names of Chilean military 
officers, served as conduits for Pinochet funds and transmitted 
more than $1.7 million to Pinochet-related accounts. Third, 
over a 25-year period, multiple financial institutions 
operating in the United States, including Riggs Bank, 
Citigroup, Banco de Chile-United States, Espirito Santo Bank in 
Miami, and others, had enabled Pinochet to construct a web of 
at least 125 U.S. bank and securities accounts--often using 
aliases, offshore corporations, or names of third parties--that 
he used to move millions of dollars in funds and conduct 
business. Finally, after U.S. bank regulators raised money 
laundering concerns about the Pinochet funds at Riggs Bank, the 
bank closed the accounts and transferred the funds to another 
financial institution operating in the United States, without 
notice that the funds were suspect. The U.S. regulators failed 
to follow the suspect funds when they left Riggs to determine 
whether they went to another U.S. financial institution.
    The report contained several recommendations to address 
these concerns. First, it recommended that financial 
institutions that close an account due to money laundering 
concerns should, before transferring the suspect funds to 
another financial institution, warn that financial institution 
under Section 314(b) of the Patriot Act that the transfer is 
the result of an account closure due to suspect funds. Second, 
U.S. regulators should take steps to prevent suspect funds from 
being transferred to another U.S. financial institution and 
should identify and dismantle any network of related U.S. 
accounts. Third, U.S. regulators should clarify Section 314(b) 
to make clear that its legal protections permit financial 
institutions to respond to requests for information, including 
by offering information that may help to expose or prevent 
money laundering or terrorist activities. Finally, the United 
States should work with the European Union to enable financial 
institutions with U.S. and E.U. affiliates to exchange 
information about clients and accounts across international 
lines to guard against money laundering and terrorist 
financing.
    As a result of the Subcommittee's initial and supplemental 
reports, the Chilean government arrested Mr. Pinochet and 
certain family members on charges related to tax evasion, money 
laundering, and other misconduct. In January 2005, Riggs Bank 
entered a guilty plea and paid a $16 million fine to the U.S. 
Treasury related to its failure to report suspicious activity 
in connection with the Pinochet accounts as well as accounts 
opened for the Governments of Equatorial Guinea and Saudi 
Arabia. In February 2005, Riggs Bank and its owners paid about 
$9 million to Spanish authorities for violating a court order 
directing financial institutions to freeze Pinochet assets. In 
May 2005, Riggs Bank was sold to PNC Financial Services Group 
Inc. which subsequently paid $5.25 million to settle a 
shareholder lawsuit related to the money-laundering scandal.
B. The Role of Professional Firms in the U.S. Tax Shelter Industry, 
        April 13, 2005 (S. Rept. 109-54)
    In 2003, the Subcommittee held 2 days of hearings and 
released a Minority staff report on how respected accounting 
firms, banks, investment advisors, and lawyers were involved in 
the design, sale, and implementation of abusive tax shelters. 
The hearings and report featured abusive tax shelters that had 
been promoted by KPMG, one of the largest accounting firms in 
the world. As a followup to this effort, the Subcommittee 
issued a second report with additional information on the mass 
marketing of abusive tax shelters; specific tax shelters 
promoted by KPMG, Ernst and Young, or PricewaterhouseCoopers; 
and the role played by other professional firms to promote 
abusive tax shelters across the country.
    The second report entitled, ``The Role of Professional 
Firms in the U.S. Tax Shelter Industry,'' was formally approved 
by Subcommittee vote in February 2005. In April 2005, the full 
Committee approved the Subcommittee report and formally 
reported it to the full Senate. This Subcommittee report 
incorporated the findings and text of the earlier Minority 
staff report regarding KPMG and detailed additional 
transactions involving Ernst and Young and 
PricewaterhouseCoopers, two other leading accounting firms. The 
report examined, for example, Ernst and Young tax products 
known as CDS and COBRA, and a PricewaterhouseCooper tax product 
called BOSS, each of which was a ``loss generator'' whose 
purpose was to create artificial paper losses that could be 
used to offset other income and shelter it from taxation. Each 
used complex, orchestrated transactions, structured finance, 
and investments with little or no profit potential to 
accomplish their ends. The report also provided additional 
information about the participation of major banks, investment 
advisory firms, and law firms in the development, marketing, 
and implementation of these abusive tax shelters in return for 
substantial fees. including actions taken by Sidley Austin 
Brown and Wood, Deutsche Bank, HVB, Wachovia Bank, Presidio, 
and Quellos.
    The Subcommittee report contained a number of findings and 
recommendations. It found, for example, that the sale of 
potentially abusive and illegal tax shelters had become a 
lucrative business in the United States. It found that KPMG, 
Ernst and Young, and PricewaterhouseCoopers had sold generic 
tax products to multiple clients despite evidence that some 
were potentially abusive or illegal tax shelters. The report 
also found that major banks and investment advisory firms had 
provided critical lending and brokerage services in return for 
substantial fees, while law firms had provided KPMG clients 
with allegedly ``independent'' opinion letters claiming that a 
tax product would withstand an IRS challenge, also in return 
for substantial fees. To address these problems, the report 
recommended that Congress strengthen the penalties on 
promoters, aiders, and abettors of abusive tax shelters; 
increase IRS enforcement dollars; and codify the economic 
substance doctrine. It also recommended that Federal regulators 
and professional organizations undertake reviews of accounting 
firms, banks, securities firms, and law firms to stop their 
participation in tax shelter activities. These and other 
measures were included in the Tax Shelter and Tax Haven Reform 
Act, S. 1565, introduced by Senators Levin and Coleman during 
the 109th Congress.
C. Profiteering in a Non-Profit Industry: Abusive Practices in Credit 
        Counseling, April 13, 2005 (S. Rept. 109-55)
    Since 1996, more than one million consumers have filed for 
bankruptcy each year, with a record 1.66 million filings in 
2003. The Nation's credit card debt--$735 billion in 2003--has 
skyrocketed over the past several years, and consumer debt has 
more than doubled in the past 10 years. To manage that debt, 
consumers regularly turned to the non-profit credit counseling 
industry for advice, financial education, and debt 
consolidation. Consumers who could not afford to make all of 
their credit card payments often enrolled in a debt management 
program, which allowed them to consolidate their debts from 
several credit cards, reduce their monthly payments, and lower 
their interest rates.
    The non-profit credit counseling industry often provided a 
last chance for heavily indebted consumers to repair their 
finances. Over the past several years, however, the credit 
counseling industry has undergone significant changes. The 
behavior of many new entrants into the industry resulted in 
increased consumer complaints, which, in 2003, led the 
Subcommittee, under the chairmanship of Senator Coleman, to 
open an investigation into the credit counseling industry.
    The Subcommittee investigated the practices of credit 
counseling agencies, the for-profit service providers that 
performed ``back room'' services for those agencies, and the 
creditor banks. The enforcement policies and practices of the 
Internal Revenue Service and the Federal Trade Commission were 
also examined. The Subcommittee investigation revealed that the 
consumer complaints were due to new entrants into the credit 
counseling industry--entrants that pressured consumers into 
debt management plans, charged excessive fees, provided little 
or no financial counseling or education, promised results that 
never came about, ruined credit ratings, provided poor service, 
and in many cases, left consumers in worse debt than before 
they initiated their debt management plan.
    On March 24, 2004, the Subcommittee held a hearing and 
released a bipartisan staff report presenting the findings of 
its investigation. Two consumers who had been victimized by 
credit counseling agencies appeared as witnesses, and two 
former credit counseling employees testified about the 
operations of credit counseling agencies from the inside. The 
Subcommittee also heard from three major credit counseling 
``conglomerates''--the DebtWorks-AmeriDebt conglomerate, the 
Cambridge-Brighton conglomerate, and the Ascend One-Amerix 
conglomerate. IRS Commissioner Mark Everson and FTC 
Commissioner Thomas Leary also testified regarding their 
agencies' efforts to regulate the industry and enforce consumer 
protection laws.
    As a result of the Subcommittee's investigation, several of 
the largest credit counseling agencies in the industry took 
major steps to bring themselves into compliance with the tax 
code and consumer protection law. For instance, Cambridge 
Credit implemented a major corporate restructuring that placed 
all of affiliated entities under the control of a non-profit 
holding company, so that all of its activities are subject to 
IRS oversight and must be reported to the IRS. Similarly, the 
Ballenger Group required its credit counseling agencies to sign 
amendments to their contracts to adhere to stricter consumer-
friendly practices. Amerix instituted a $5 million financial 
education program and dropped the provisions of its contracts 
that gave improper control over its member agencies. Later, 
AmeriDebt declared bankruptcy and closed down.
    In addition, the Subcommittee's investigation prompted the 
relevant government agencies to step up their enforcement 
efforts. For instance, the IRS continued its audits of the 
industry and issued an opinion outlining what is expected of a 
credit counseling agency if it is to receive non-profit status 
under Section 501(c)(3). The FTC continued its enforcement 
actions and effectively shut down AmeriDebt, one of the largest 
and most abusive credit counseling agencies in the country.
    On April 13, 2005, the Subcommittee issued a supplemental, 
bipartisan report that was officially approved by its parent 
Committee on Homeland Security and Governmental Affairs and 
filed with the full Senate. This report updated the 
Subcommittee's findings, highlighted changes that had occurred 
in the credit counseling industry since the Subcommittee's 
hearing, and offered a number of recommendations to reform the 
credit counseling industry. The Subcommittee recommendations 
included the following.
    (1) The IRS and FTC should complete their ongoing reviews 
of the industry to eliminate abusive conduct by agencies that 
have been operating in violation of restrictions on non-profit 
charities or using unfair or deceptive trade practices;
    (2) The IRS should require each agency to submit every 5 
years, for IRS review, return information establishing its 
charitable activities and a certification that the agency is 
not providing a private benefit to any individual or entity;
    (3) To address rising consumer debt and bankruptcy rates, 
each agency should provide affirmative financial counseling and 
educational programs designed to reduce excessive indebtedness 
within the populations they serve, and should evaluate, 
improve, and document the effectiveness of these programs;
    (4) Major creditors should continue to provide financial 
support to appropriate, non-profit credit counseling agencies, 
conditioned upon the agencies' achieving specified standards 
that contribute to the public good. Creditors should carefully 
screen agencies to ensure they provide funds only to reputable 
agencies that comply with their standards; and
    (5) The IRS and FTC should work together to clarify the 
standards that agencies must meet to maintain tax exempt status 
and avoid deceptive or unfair trade practices, including by 
making it clear that a non-profit credit counseling agency 
must: (a) maintain good standing and accreditation status 
within the industry, such as by meeting the accreditation 
standards of the Council on Accreditation for Children and 
Family Services; (b) maintain an independent Board of Directors 
that includes representatives of the community served by the 
agency and that includes no more than a minority of directors 
who are employed by the agency, a related entity, or any other 
person who stands to gain direct or indirect financial benefit 
from the agency's activities; (c) avoid conduct or transactions 
that generate or create the appearance of generating a private 
benefit for any individual or entity; (d) disclose to each 
consumer the existence and nature of any financial relationship 
that the agency has with a creditor of the consumer or with a 
for-profit entity that provides data processing, marketing, or 
financial services to the agency or the consumer; (e) assess 
reasonable fees that are based upon the agency's actual costs 
and are charged as services are provided, rather than in 
advance of such services; and (f) refrain from accepting 
compensation for referring consumers to any service or 
organization, and refrain from paying compensation to any 
employee based upon the number of consumers enrolled in debt 
management plans.
D. Oil Allocations Granted To Charles Pasqua and George Galloway, May 
        17, 2005 (Report Prepared by Majority and Minority Staffs and 
        released in conjunction with the Subcommittee Hearing on May 
        17, 2005) (Printed in the May 17th hearing record.)
    On May 17, 2005, the Permanent Subcommittee on 
Investigations held a hearing entitled, ``Oil for Influence: 
How Saddam Used Oil to Reward Politicians Under the United 
Nations Oil-for-Food Program.'' The Subcommittee examined 
evidence of Iraqi government abuses of the United Nations Oil-
for-Food Program.
    In conjunction with that hearing, the Subcommittee issued a 
bipartisan staff report that presented evidence gathered by the 
Subcommittee that the Hussein regime granted allocations of oil 
under the Oil-for-Food Program to Charles Pasqua, the former 
French Minister of the Interior, and George Galloway, a Member 
of the British Parliament. In particular, the Subcommittee 
staff report examined documents created by the Iraqi Ministry 
of Oil during the reign of Saddam Hussein, interviews by 
Subcommittee staff of senior officials of the Hussein regime, 
and interviews of Hussein regime officials conducted by the 
U.S. Treasury Iraqi Financial Asset Team.
    The Subcommittee's staff report presented evidence that the 
Hussein regime granted allocations totaling 11 million barrels 
of oil to Charles Pasqua. According to Iraqi Ministry of Oil 
documents, those oil allocations for Mr. Pasqua occurred in 
Phases VI, VII and VIII of the Oil-for-Food Program, stretching 
from May 1999 to December 2000. In addition to the 11 million 
barrels of oil granted to Mr. Pasqua, Iraqi records indicate 
that the Hussein regime allocated 5 million barrels of oil to 
Mr. Pasqua's representative and foreign affairs advisor, 
Bernard Guillet, in Phases X, XI and XIII of the Program. Iraqi 
Ministry of Oil records indicate that Saddam Hussein had 
personally approved some of the Pasqua oil allocations. One 
Iraqi government document stated that Mr. Pasqua attempted to 
hide his activities for ``political reasons'' and because he 
``fear[ed] political scandals.''
    The Subcommittee staff report also presented evidence that 
the Hussein regime granted allocations of 20 million barrels of 
oil to George Galloway under the Oil-for-Food Program. 
According to the evidence obtained by the Subcommittee, those 
allocations started in Phase VIII of the Program (June 2000) 
and continued through Phase XIII (June 2003). Senior officials 
of the Hussein regime confirmed in interviews with the 
Subcommittee that Mr. Galloway had received oil allocations 
under the Oil-for-Food Program. For instance, the former Vice 
President of Iraq, Taha Yassin Ramadan, verified that Mr. 
Galloway was granted allocations and stated that the Hussein 
regime awarded Mr. Galloway with oil ``because of his opinions 
about Iraq'' and because he ``want[ed] to lift the embargo 
against Iraq.'' Another Hussein regime official stated to the 
U.S. Treasury Department that ``a member of the British 
Parliament benefited tremendously from the illegal trade of oil 
by Iraq,'' and specifically identified Mr. Galloway. Evidence 
obtained by the Subcommittee also indicated that, in one of the 
transactions involving oil allocated to Mr. Galloway, 
surcharges of more than $300,000 were paid to the Hussein 
regime.
    The Subcommittee staff report indicates that both Mr. 
Pasqua and Mr. Galloway denied that they had received any 
benefits, including allocations of oil, from the Hussein 
regime.
E. Oil Allocations Granted to Vladimir Zhirinovsky, May 17, 2005 
        (Report Prepared by Majority and Minority Staffs and released 
        in conjunction with the Subcommittee Hearing on May 17, 2005) 
        (Printed in the May 17th hearing record.)
    On May 17, 2005, the Permanent Subcommittee on 
Investigations held a hearing entitled, ``Oil for Influence: 
How Saddam Used Oil to Reward Politicians Under the United 
Nations Oil-for-Food Program.'' At that hearing, the 
Subcommittee examined evidence of Iraqi government abuses of 
the United Nations Oil-for-Food Program.
    In conjunction with the hearing, the Subcommittee issued a 
bipartisan staff report that presented evidence gathered by the 
Subcommittee that the Hussein regime granted allocations of oil 
under the Oil-for-Food Program to Vladimir Zhirinovsky, a 
member of the Russian legislature and founder of the Liberal 
Democratic Party of Russia (LDPR). The report introduced 
evidence, including records of the Iraqi Ministry of Oil and 
the State Oil Management Organization and testimony of key 
officials of the Hussein government, indicating that the 
Hussein regime granted allocations of 75.8 million barrels of 
oil to Mr. Zhirinovsky and his political party, the LDPR. Iraqi 
documents indicate that Saddam Hussein personally approved at 
least one of the allocations to Mr. Zhirinovsky and that 
Hussein's deputy Tariq Aziz was intimately involved in Mr. 
Zhirinovsky's allocations. According to the evidence obtained 
by the Subcommittee, these oil allocations started in Phase II 
(June 1997) of the Program and continued through Phase XII 
(December 2002). Of the 75.8 million allocated to Mr. 
Zhirinovsky and the LDPR, roughly 60 million barrels of oil 
were ultimately lifted. The Iraqi Ministry of Oil estimated 
that oil allocations granted to Mr. Zhirinovsky and the LDPR 
were worth $8,679,000.
    The former Vice President of Iraq, Taha Yassin Ramadan, 
confirmed to the Subcommittee that Mr. Zhirinovsky was awarded 
oil allocations from the Hussein regime. Another senior 
official of the Hussein regime interviewed by the Subcommittee 
confirmed not only that Mr. Zhirinovsky received oil 
allocations, but that he profited from the transactions, 
saying: ``Of course Zhirinovsky would make a profit. That's the 
whole point.'' Among the evidence obtained by the Subcommittee 
are six letters that openly discuss the allocations and that 
appear to be signed by Mr. Zhirinovsky himself and more than 30 
documents of the Iraqi Ministry of Oil that expressly identify 
Mr. Zhirinovsky and his political party, the LDPR, in 
connection with oil allocations.
    Additional evidence obtained by the Subcommittee indicated 
that Zhirinovsky transferred or assigned some of the 
allocations to an American oil company called Bayoil Supply and 
Trading Limited, in exchange for significant commissions. The 
evidence presented in the report also indicated that under-the-
table payments were made in connection with the Zhirinovsky/
LDPR oil contracts. On September 1, 2000, in Phase VIII of the 
Program, the Hussein regime began imposing surcharges on Iraqi 
exports. Those surcharges, which generally ranged from 10 to 30 
cents per barrel of oil, were in direct violation of U.N. 
sanctions and Oil-for-Food Program rules. According to a 
memorandum written by the Iraqi Ministry of Oil, illegal 
surcharges amounting to more than $4 million were paid to the 
Hussein regime in connection with the oil allocated to Mr. 
Zhirinovsky and his political party. The evidence indicated 
that Bayoil was involved in at least three of those 
transactions and facilitated surcharge payments of more than $2 
million. The evidence showed that, in one transaction, Bayoil 
paid $1,122,548.70 to an unknown entity called Plasco Shipping, 
and Iraqi Ministry of Oil records indicated that the surcharge 
owed for that transaction was exactly $1,122,548.70. The 
records also indicated that the surcharge was paid in full.
F. Oil Allocations Granted to the Russian Presidential Council, May 17, 
        2005 (Report Prepared by Majority and Minority Staffs and 
        released in conjunction with the Subcommittee Hearing on May 
        17, 2005) (Printed in the May 17th hearing record.)
    On May 17, 2005, the Permanent Subcommittee on 
Investigations held a hearing entitled, ``Oil for Influence: 
How Saddam Used Oil to Reward Politicians Under the United 
Nations Oil-for-Food Program.'' At that hearing, the 
Subcommittee examined evidence of Iraqi government abuses of 
the United Nations Oil-for-Food Program.
    In conjunction with the hearing, the Subcommittee issued a 
bipartisan staff report that presented evidence gathered by the 
Subcommittee that the Hussein regime granted allocations of oil 
under the Oil-for-Food Program to the Russian Presidential 
Council. The Council, headed by Alexander Salevich Voloshin, 
carries significant power within the Russian government and 
therefore could affect Russian international policy, especially 
regarding votes in the U.N. Security Council.
    The evidence obtained by the Subcommittee indicated that 
the Hussein regime allocated a total of 90 million barrels of 
oil to the Russian Presidential Council, Voloshin (the head of 
the Council), and a Russian named Sergey Issakov. The report 
also introduced several contracts for the allocated quantities 
of oil that appear to have been signed by Mr. Issakov, as well 
as internal documents from the Iraqi Ministry of Oil that 
identify the Council, Mr. Voloshin, and Mr. Issakov as 
beneficiaries of the oil allocations. Additionally, the 
Subcommittee obtained a letter from the Iraqi Ministry of Oil 
to ``Mr. A. Voloshin'' of Impexoil regarding an oil transaction 
relating to one of his oil allocations.
    One Iraqi Ministry of Oil document obtained by the 
Subcommittee estimated that the Council's allocations were 
worth in excess of $16 million. According to Iraqi records, 
these oil allocations started in Phase VI (1999) of the Program 
and continued through the final phase, Phase XIII (2002-2003).
    In addition to the Iraqi records of these transactions, 
testimony from senior Hussein regime officials further 
confirmed these allocations of oil. According to Tariq Aziz, 
Saddam Hussein specifically ordered that the Russians be 
rewarded for their threatened use of a veto at the Security 
Council. In 2001, the United States and the United Kingdom 
circulated a Resolution at the U.N. Security Council to 
restrict the illicit trade occurring at Iraq's borders. The 
Russian delegation threatened to use its veto to block any such 
resolution, effectively killing it before it began. As a 
result, according to Mr. Aziz, the Hussein regime rewarded 
numerous Russian officials and entities, such as the RPC and 
Mr. Voloshin, with a higher percentage of oil allocations and 
contracts for humanitarian goods under the Oil-for-Food 
Program. Moreover, Iraqi Vice President Taha Yassin Ramadan 
informed the Subcommittee that he recognized Mr. Voloshin as 
the head of Russia's presidential administration and stated 
that the oil allocations awarded to Mr. Voloshin had been 
approved by Saddam Hussein. Other regime officials stated that 
the allocations given to Mr. Voloshin were a show of support 
for him and were granted to him because of his relationships 
with ``very important characters.''
    The evidence presented in the report also showed that the 
Hussein regime profited from these transactions by demanding 
that the parties pay under-the-table ``surcharges'' to the 
regime as a condition of the sale. Allocations given to the 
Russian Presidential Council in Phases VIII and IX, for 
example, resulted in payments that were routed back to the Iraq 
government. The Subcommittee report estimated that more than 
$5.6 million in surcharge payments were made to the Iraqi 
government in connection with those transactions.
    The evidence showed that an American oil company named 
Bayoil Supply and Trading Limited was involved in several of 
the transactions involving these allocations of oil, including 
some of the transactions involving illegal surcharge payments 
to the Hussein regime. According to documents obtained by the 
Subcommittee, Bayoil performed 20 liftings of oil relating to 
allocations granted to the Russian Presidential Office. For 
each of those liftings, Bayoil made payments to bank accounts 
in Switzerland and Cyprus for ``premiums'' and ``commissions.'' 
In total, Bayoil paid over $9.2 million into those bank 
accounts. The evidence suggests that those payments included 
surcharge payments to the Iraqi government and commission 
payments to the recipients of the oil allocations.
G. Report Concerning the Testimony of George Galloway Before the 
        Permanent Subcommittee on Investigations, October 31, 2005 
        (Report Prepared by Majority Staff and released in conjunction 
        with the Subcommittee Hearing on October 31, 2005) (Printed in 
        the October 31st hearing record.)
    On May 17, 2005, the Subcommittee held a hearing entitled, 
``Oil for Influence: How Saddam Used Oil to Reward Politicians 
Under the United Nations Oil-for-Food Program.'' In conjunction 
with that hearing, the Subcommittee issued a bipartisan staff 
report presenting evidence that the Hussein regime had granted 
lucrative allocations of oil under the United Nations Oil-for-
Food (OFF) Program to George Galloway, a Member of the British 
Parliament. Mr. Galloway appeared at the May hearing and denied 
under oath that he had solicited or was granted allocations of 
Iraqi oil and denied that anyone else had done so on his 
behalf. He also denied that he or anyone else solicited oil 
allocations from the Hussein regime as a means of raising funds 
for the Mariam Appeal, Mr. Galloway's political campaign 
opposing U.N. sanctions imposed upon Iraq.
    Several months after the May hearing, the Subcommittee 
issued a report by the Majority Staff entitled, ``Report 
Concerning the Testimony of George Galloway, before the 
Permanent Subcommittee on Investigations.'' That report 
presented additional evidence that:
    1. Mr. Galloway personally solicited and was granted oil 
allocations from the Government of Iraq during the reign of 
Saddam Hussein. The Hussein regime granted Mr. Galloway and the 
Mariam Appeal eight allocations totaling 23 million barrels 
from 1999 through 2003.
    2. Mr. Galloway's wife, Dr. Amineh Abu-Zayyad, received 
approximately $150,000 in connection with one of those oil 
allocations.
    3. Mr. Galloway's political campaign, the Mariam Appeal, 
received at least $446,000 in connection with the oil 
allocations granted to Mr. Galloway and the Mariam Appeal under 
the OFF Program.
    4. The Hussein regime received improper ``surcharge'' 
payments amounting to $1,642,000 in connection with the oil 
allocations granted to Mr. Galloway and the Mariam Appeal.
    5. Mr. Galloway knowingly made false or misleading 
statements under oath before the Subcommittee at its hearing on 
May 17, 2005.
    The evidence presented in the report included: (a) 
documents, including bank account and wire transfer records, 
establishing that Fawaz Zureikat, a Jordanian businessman and 
close friend of Mr. Galloway, received money in connection with 
an oil allocation under the OFF Program and transferred a 
significant portion of that money to Mr. Galloway's wife and 
Mr. Galloway's political campaign, the Mariam Appeal; (b) 
testimony from Tariq Aziz in which Mr. Aziz describes in detail 
his discussions with Mr. Galloway concerning oil allocations, 
including Mr. Galloway's request for allocations and his 
subsequent request to increase the amount of oil allocated to 
him and his political organization, the Mariam Appeal; (c) 
records of the Iraqi Ministry of Oil, including documents 
created during the Hussein regime that were authenticated by 
the Minister of Oil; (4) documents created by senior Hussein 
officials detailing Mr. Galloway's efforts to obtain financial 
support from the Hussein regime for his political campaign, 
including documents that were authenticated by Tariq Aziz and 
Ali Hasan al-Majid; (5) interviews with an oil trader stating 
that he discussed the oil allocation process with Mr. Galloway, 
and that ``[Mr. Galloway] told me that, if he were to obtain an 
oil allocation, he would contact us directly or indirectly'' 
and that ``[Mr. Galloway] said he or his representative in Iraq 
would contact [me] in connection with the sale of an 
allocation;'' and (6) written affirmation from a second oil 
trader who negotiated with Mr. Galloway's agent for the 
purchase of a Galloway oil allocation.
    Shortly after the release of the Majority staff report, the 
United Nations entity investigating the OFF Program, called the 
Independent Inquiry Committee (IIC) for the U.N. Oil-for-Food 
Program, issued a report that corroborated many of the findings 
of the Majority staff report. In addition, the IIC report 
presented evidence that Mr. Galloway's wife had received an 
additional $120,000 in connection with an oil transaction under 
the OFF Program and that the Mariam Appeal had received 
hundreds of thousands of dollars from other deals stemming from 
the Program.
    In June 2007, the U.K. Charity Commission issued a report 
concerning the activities of the Mariam Appeal, finding, among 
other things, that the donations to the Appeal stemming from 
oil transactions related to the Oil-for-Food Program came from 
``improper sources.'' In July 2007, the U.K. House of Commons 
Committee on Standards and Privileges issued a report 
concerning Mr. Galloway's activities and the Oil-for-Food 
Program. The Parliament report was highly critical of Mr. 
Galloway's activities related to the Program, ruling that he 
violated the House of Commons Code of Conduct on numerous 
different counts: failing to properly register his relationship 
with the Mariam Appeal; improperly using House resources and 
facilities for the Mariam Appeal; and breaching the House's so-
called ``advocacy rule.'' The parliamentary committee also 
concluded that Mr. Galloway, through his extensive misconduct, 
brought the House into ``disrepute.'' As a result of its 
investigation and findings, the U.K. committee recommended that 
Mr. Galloway be suspended for one month and that he be ordered 
to apologize to the House of Commons. During the House of 
Commons debate concerning Mr. Galloway's activities, Mr. 
Galloway was ejected from the House during the debate for 
inappropriate statements. The House ultimately suspended Mr. 
Galloway for one month for his misconduct related to the Oil-
for-Food Program.
H. Illegal Surcharges on Oil-for-Food Contracts and Illegal Oil 
        Shipments From Khor al-Amaya, May 17, 2005 (Report Prepared by 
        Minority Staff and released in conjunction with the 
        Subcommittee Hearing on May 17, 2005) (Printed in the May 17th 
        hearing record), and Bayoil Diversions of Iraqi Oil and Related 
        Oversight Failures, October 31, 2005 (Report Prepared by 
        Minority Staff and released in conjunction with the 
        Subcommittee Hearing on October 31, 2005) (Printed in the 
        October 31st hearing record.)
    In connection with the Subcommittee's three hearings on 
abuses associated with the United Nations' Oil-for-Food 
Program, the Subcommittee released two reports prepared by the 
Minority staff under the direction of Senator Levin. The first, 
``Illegal Surcharges on Oil-for-Food Contracts and Illegal Oil 
Shipments From Khor al-Amaya,'' was released in conjunction 
with the Subcommittee hearing on May 17, 2005. It complemented 
the other Subcommittee staff reports released in connection 
with that hearing by examining, not how the oil was allocated, 
but how the oil entered the United States and what the United 
States did to attempt to stop the illegal surcharge payments 
being demanded by Saddam Hussein. In addition, the report 
examined the largest single incident of oil being exported from 
Iraq by ship in violation of the U.N. sanctions, sometimes 
referred to as the Khor al-Amaya shipments, in reference to the 
Iraqi port where these shipments originated.
    The report disclosed that, from September 2000 until 
September 2002, the Iraqi government demanded that purchasers 
of Iraqi oil under the Oil-for-Food Program pay an illegal, 
per-barrel surcharge to the Iraqi regime. These surcharges were 
above the Official Sales Price for Iraqi oil approved by the 
United Nations and were to be paid into accounts outside U.N. 
control. The surcharge amount varied, from a low of 10 cents 
per barrel to a high of 30 cents per barrel. Detailed internal 
records kept by the Iraqi Oil Ministry's State Oil Marketing 
Organization (SOMO) show that, during this period, Iraq 
collected about $228 million in illegal surcharges. Throughout 
this period, the United States was one of the largest customers 
of Iraqi crude oil, importing an average of about 660,000 
barrels of oil per day, for a total of about 525 million 
barrels.
    The report disclosed that U.S. companies did not buy this 
oil directly from Iraq, but rather from oil traders, allocation 
holders, and other intermediaries unique to the Iraqi oil 
trade. Using SOMO records on surcharge amounts assessed and 
collected, and U.S. Energy Information Administration data on 
U.S. oil imports, the report estimated that about $118 million 
in illegal surcharges were paid on Iraqi barrels of oil sent to 
the United States, which means that oil imported into the 
United States financed about 52 percent of the illegal 
surcharges paid to the Hussein regime. Oil destined for other 
countries accounted for about $110 million in illegal 
surcharges, or about 48 percent of the total illegal surcharges 
paid.
    The report also provided a detailed examination of the 
actions taken by one U.S. company, Bayoil USA, which was 
headquartered in Texas, had affiliates in the Bahamas, 
Switzerland, and Luxembourg, and during the surcharge period 
was the largest provider of Iraqi oil to the United States. The 
report presented evidence indicating that Bayoil paid or 
financed at least $37 million in illegal surcharges on about 
102 cargoes of Iraqi oil imported into the United States. The 
report also presented evidence that Bayoil persistently and 
openly lobbied U.S. and U.N. officials to influence the pricing 
of Iraqi oil and oppose U.S. efforts to address the surcharge 
problem by raising the official sales price. In addition, the 
report presented evidence that Bayoil had helped Iraq and 
Russia devise objections to U.S. and U.K. pricing proposals to 
stop the surcharges, and even on occasion drafted documents for 
Russian companies to send to U.N. officials. The report also 
found that the United States took minimal steps to ensure that 
U.S. companies were not paying surcharges and failed to respond 
to U.N. requests for information about Bayoil.
    In addition to examining the surcharge problem, the Levin 
report presented detailed information about the Khor al-Amaya 
shipments. Over several weeks in February and March 2003, Iraq 
loaded seven large oil tankers with a total of more than 7.7 
million barrels of oil at the port of Khor al-Amaya in southern 
Iraq, at the entrance to the Persian Gulf. These were the first 
loadings at Khor al-Amaya since the port had been damaged 
during the Iran-Iraq war in 1980. Iraqi oil exports from Khor 
al-Amaya were not authorized under the Oil-for-Food Program and 
did not have U.N. approval. They constituted the largest single 
instance of an illicit oil shipment out of Iraq by ship during 
the sanctions period.
    The report detailed how the oil tankers had been chartered 
by a Jordanian company acting on behalf of the Jordanian 
government, and, in exchange for the 7.7 million barrels, the 
Government of Jordan wired more than $53 million to the 
Government of Iraq. Subcommittee interviews with high-ranking 
Iraqis then in detention, including former Vice President Taha 
Yasin Ramadan, confirmed that these shipments had been 
authorized at the highest levels of the Iraqi government, and 
the oil proceeds went to bank accounts under the control of the 
Hussein regime. Shipping interests that saw the oil tankers 
characterized the shipments as blatant violations of U.N. 
sanctions, and press reports raised questions about how the 
ships were able to travel the Persian Gulf with impunity. The 
report presented evidence that U.S. personnel appeared to have 
had advance warning of the shipments, and the ships traveled 
with the full knowledge and acquiescence of the Maritime 
Interdiction Force (MIF), the naval force patrolling the 
Persian Gulf to prevent smuggling of oil from Iraq. The MIF was 
then under the command of a U.S. naval officer. The report was 
unable to determine who within the State Department or the 
Department of Defense had instructed the MIF commander not to 
object to the Khor al-Amaya shipments, even though the 
shipments provided tens of millions of dollars in hard currency 
to the Hussein regime just before the start of the Iraq 
invasion.
    The second Levin report entitled, ``Bayoil Diversions of 
Iraqi Oil and Related Oversight Failures,'' was released in 
conjunction with the Subcommittee hearing on October 31, 2005. 
This report examined actions taken by Bayoil USA to sell Iraqi 
oil in unapproved markets and reap millions of dollars of 
illicit revenue in violation of the U.N. sanctions program and 
U.S. regulations. The report also examined inadequate U.S. and 
U.N. oversight efforts and failure to stop Bayoil's illicit 
activities.
    The report presented evidence indicating that, in 2001, 
Bayoil diverted 4 million barrels of Iraqi oil to unapproved 
markets in violation of the relevant U.N. contracts, OFF 
Program requirements, and U.S. regulations. As a result of 
these diversions, Bayoil appeared to have obtained at least 
$7.5 million in illicit revenue that may have been used to 
finance illegal surcharges paid to the Hussein regime. The 
report showed that U.N. oil experts repeatedly sought specific 
information about these suspect Bayoil shipments, but Bayoil 
refused to cooperate and the United States failed to obtain the 
information in response to U.N. requests. The U.S. Government 
also failed to exercise any independent oversight of Bayoil, 
despite the company's significance as an Iraqi oil importer and 
U.N. concerns about suspect Bayoil shipments. Additionally, the 
report presented evidence that the head of the U.N. Office of 
Iraq Programme, Benon Sevan, rejected without explanation a 
request by U.N. oil experts to present the facts about Bayoil 
to the U.N. 661 Committee responsible for U.N. sanctions on 
Iraq.
    The Justice Department later obtained convictions of Bayoil 
and some of its officers for crimes relating to the payment of 
illegal surcharges to Iraq.
I. An Assessment of U.S. Efforts to Secure the Global Supply Chain, 
        March 30, 2006 (Report Prepared by Majority and Minority Staffs 
        and released in conjunction with the Subcommittee Hearing on 
        March 30, 2006) (Printed in the March 30th hearing record.)
    Since early 2003, the Subcommittee has conducted an 
oversight investigation into U.S. Government programs designed 
to secure the global supply chain. This effort has been 
thoroughly bipartisan and bicameral. The Subcommittee's efforts 
have included: document requests and letters from the 
Subcommittee, numerous meetings with officials from the U.S. 
Department of Homeland Security (DHS) and the Department of 
Energy (DOE), staff assessments of 10 Container Security 
Initiative ports, staff examinations of eight U.S. ports of 
entry, a staff trip to the Nevada detection equipment test 
site, and a staff inspection of the National Targeting Center 
(NTC). Subcommittee staff has also met with officials from 
Customs and Border Protection (CBP), Immigration and Customs 
Enforcement (ICE), the Domestic Nuclear Detection Office 
(DNDO), and the National Nuclear Security Administration 
(NNSA). This report detailed the findings from the 
Subcommittee's investigation, outlined areas of concern, and 
made recommendations for improving and enhancing the security 
of the global supply chain.
    The report provided an unvarnished assessment of the state 
of global supply chain security. The Subcommittee staff's 
findings were troubling. In short, America's supply chain 
security remains vulnerable to the proverbial Trojan Horse--
America's enemies could compromise the global supply chain to 
smuggle a Weapon of Mass Destruction (WMD), or even terrorists, 
into this country.
    These frightening scenarios are not the work of Hollywood 
writers. Last year, on two separate occasions, dozens of 
Chinese immigrants were smuggled through the Port of Hong Kong 
into Los Angeles using maritime shipping containers. These 
incidents, coupled with similar episodes abroad, demonstrate 
the vulnerability of the global supply chain. The 9/11 
Commission confirmed these vulnerabilities, stating: 
``opportunities to do harm are as great, or greater, in 
maritime or surface transportation.''
    Over the course of its 3-year investigation, Subcommittee 
staff has identified numerous weaknesses in America's programs 
that secure the global supply chain. A brief overview of these 
problems illustrates the challenges confronting these efforts:

   LIn the Container Security Initiative (CSI), a 
critical program designed to inspect high-risk shipping 
containers before they enter U.S. ports, the Subcommittee found 
that only a de minimus number of such high-risk containers are 
actually inspected. In fact, the vast majority of high-risk 
containers are simply not inspected overseas. To make matters 
worse, the U.S. Government has not established minimum 
standards for these inspections.
   LUnder the Customs-Trade Partnership Against 
Terrorism (C-TPAT), the U.S. Government grants benefits to 
private-sector companies that make specific security 
commitments. The Subcommittee found, however, that an 
overwhelming proportion of participating companies receive 
benefits prior to having their security profile validated. Only 
27 percent of the participating companies have been subjected 
to a validation. Therefore, 73 percent of companies have not 
been subjected to any legitimate, on-site review to ensure that 
their security practices pass muster.
   LThe targeting system employed by the U.S. 
Government to identify high-risk shipping containers entering 
U.S. ports is largely dependent on ``the least reliable'' form 
of data for targeting purposes. Moreover, the Subcommittee has 
found that this targeting system has never been tested or 
validated, and may not discern actual, realistic risks.
   LLess than 40 percent of cargo containers entering 
U.S. ports are screened for nuclear or radiological materials. 
One part of the problem is that the deployment of radiation 
detection equipment is woefully behind schedule. As of March 
2006, the Department of Homeland Security has deployed only 
30.8 percent of the necessary radiation monitors.

    Although these findings are alarming, there are some silver 
linings. For instance, the creation of the Domestic Nuclear 
Detection Office (DNDO) has already addressed some of the 
problems surrounding the deployment of radiation detectors. 
DNDO has created a centralized, global architecture for the 
deployment of these radiation detectors, so that the process is 
no longer diffused among several disconnected agencies. DNDO 
has begun to address the concerns of numerous private-sector 
port operators, which had reservations about the safety and 
impact of radiation monitors upon their operations. DNDO has 
also facilitated the installation of numerous radiation 
detectors.
    The good news is not limited to DNDO. While the U.S. 
currently screens approximately 5 percent of all maritime 
containers, there is a promising pilot project in the Port of 
Hong Kong that demonstrates the potential to screen 100 percent 
of all shipping containers. Each container in the Hong Kong 
port flows through an integrated system featuring an imaging 
machine, a radiation scan, and a system to identify the 
container. Coupling these technologies together allows for the 
most complete scan of a container currently available. The Hong 
Kong concept or similar technology, which is described in 
detail in this report, holds great promise and could lead to a 
dramatic improvement in the efficacy of our supply chain 
security. These improvements would help ensure that the threat 
of Trojan Horse infiltration by terrorists never becomes a 
reality.
    Many of the findings of this report were utilized in the 
discussions and floor debate of and eventually incorporated 
into provisions of the SAFE Port Act, Public Law 109-347, 
signed into law on October 13, 2006.
J. The Role of Market Speculation in Rising Oil and Gas Prices: A Need 
        To Put the Cop Back On the Beat, June 27, 2006 (Report Prepared 
        by Majority and Minority Staffs) (S. Prt. 109-65)
    For the past 5 years, the Subcommittee has investigated 
rising energy prices, including the prices of gasoline, crude 
oil, and natural gas. In 2002, the Subcommittee held hearings 
and issued a 400-page Majority staff report, prepared at the 
request of Senator Levin, examining how U.S. retail gasoline 
prices are set, including examining such factors as oil 
industry mergers, refinery closings, tight gasoline supplies, 
and regional pipeline limitations. In 2003, the Subcommittee 
released a Minority staff report, prepared at the request of 
Senator Levin, detailing how crude oil markets affect the price 
of gasoline and other key energy commodities such as home 
heating oil, jet fuel, and diesel fuel. The report warned that 
the crude oil markets were vulnerable to price manipulation and 
needed additional oversight. The report also warned that 
ongoing large deposits of oil into the Strategic Petroleum 
Reserve, while oil prices were high and oil supplies were 
tight, were contributing to higher energy prices. In February 
2006, at the request of Senator Coleman, the Subcommittee held 
a field hearing in Minnesota on why natural gas prices were 
increasingly high and volatile, the impact of higher prices on 
the economy, businesses, and working families, and the 
government's role on the State and Federal level to provide 
affordable natural gas.
    On June 27, 2006, the Subcommittee released a bipartisan 
staff report entitled, ``The Role of Market Speculation in 
Rising Oil and Gas Prices: A Need To Put the Cop Back On the 
Beat.'' This report found that the traditional forces of supply 
and demand no longer fully accounted for rising prices and 
price volatility in the oil and gasoline markets. The report 
also determined that, in 2006, market speculation contributed 
to rising oil and gasoline prices, perhaps accounting for $20 
out of a $70 barrel of oil, and that too many energy trades 
were occurring without regulatory oversight. The report made a 
number of recommendations to increase market oversight and stop 
market manipulation and excessive speculation.
    The report noted that, in April 2006, the price of crude 
oil on the New York Mercantile Exchange (NYMEX) hit a record of 
$75.17 per barrel. In mid-May, the average retail price for 
gasoline reached $2.99 per gallon, just a few cents short of 
the record set after Hurricane Katrina shut down oil and 
gasoline production along the Gulf Coast in September 2005. 
Although these high prices were often attributed to the forces 
of supply and demand, the report demonstrated that oil supplies 
were more than adequate to meet demand. It presented evidence, 
for example, that, since late 2004, the amount of stored oil in 
the United States had been increasing. It showed that oil 
inventories had recently reached 347 million barrels--an 8-year 
high and the largest U.S. inventory since 1998, when oil was 
$15 per barrel. Similarly, oil inventories in the Organisation 
for Economic Co-operation and Development (OECD) countries had 
recently reached a 20-year high.
    The report also presented evidence that, over the past few 
years, for the first time, market speculators had poured tens 
of billions of dollars into energy commodity markets. It 
showed, for example, that the International Monetary Fund had 
reported that over the past 3 years approximately $100 to $120 
billion had been invested in energy markets worldwide. Over 
this same period about $60 billion had been invested in oil 
futures on the NYMEX. The report cited a number of analysts who 
had concluded that these speculative investments had 
significantly raised the price of oil futures. In addition, the 
report stated that, while it was not possible to determine the 
precise dollar increase in the price of oil attributable to 
market speculation, some analysts had estimated that 
speculation had added as much as $20 to $25 to the price of 
each barrel of oil, thereby pushing up oil from about $50 to 
around $70 per barrel. The report noted that former Federal 
Reserve Chairman Alan Greenspan had recently stated: ``With the 
demand from the investment community, oil prices have moved up 
sooner than they would have otherwise.''
    The report noted that, at the same time that oil and gas 
traders were spending billions of dollars on energy 
commodities, those traders were increasingly able to trade 
without any oversight by the key Federal regulator, the 
Commodity Futures Trading Commission (CFTC). The CFTC is 
charged with preventing fraud, manipulation, and excessive 
speculation in U.S. commodity markets. Under a provision 
slipped into the Commodity Futures Modernization Act of 2000 at 
the behest of Enron and other energy traders, however, large 
oil and gas traders were allowed to trade energy commodities in 
``over-the-counter'' (OTC) electronic markets without any 
ongoing oversight by the CFTC. Additionally, oil and gas 
traders in these markets were not required to file any large 
trader reports with the CFTC, even though large trader reports 
are the cornerstone of CFTC oversight of commodity markets to 
detect, prevent, and punish price manipulation and excessive 
speculation. Traders in these electronic markets were also 
exempted from speculative trading limits imposed by the CFTC to 
prevent excessive speculation.
    The report pointed out further that, due to past regulatory 
actions by the CFTC, oil and gasoline traders located in the 
United States had gained the ability to engage in electronic 
trades of U.S. energy commodities on a London futures exchange, 
called ``ICE Futures.'' ICE Futures is regulated by the United 
Kingdom Financial Services Authority, but not the CFTC. The 
report stated that, as a result, persons within the United 
States seeking to trade key U.S. energy commodities--U.S. crude 
oil, gasoline, and heating oil futures--were able to avoid all 
CFTC oversight and reporting requirements simply by routing 
their trades through the ICE Futures exchange in London instead 
of the NYMEX in New York.
    To address these regulatory gaps and curb excessive 
speculation in U.S. energy commodities, the report offered a 
number of recommendations to strengthen U.S. commodity laws, 
including by requiring all U.S. traders of energy futures to 
report large trades to the CFTC, regardless of where the trades 
take place--on the NYMEX, on an over-the-counter electronic 
exchange, or on a foreign exchange. The report also recommended 
that Congress close the Enron loophole by enacting legislation 
to make electronic exchanges for large energy traders subject 
to CFTC oversight.
    Specifically, the report contained the following findings 
and recommendations:
Findings
    (1) Rise in Speculation. Over the past few years 
speculators have expended tens of billions of dollars in U.S. 
energy commodity markets.
    (2) Speculation Has Increased Prices. Speculation has 
contributed to rising U.S. energy prices, but gaps in available 
market data currently impede analysis of the specific amount of 
speculation, the commodity trades involved, the markets 
affected, and the extent of price impacts.
    (3) Price-Inventory Relationship Altered. With respect to 
crude oil, the influx of speculative dollars appears to have 
altered the historical relationship between price and 
inventory, leading the current oil market to be characterized 
by both large inventories and high prices.
    (4) Large Trader Reports Essential. CFTC access to daily 
reports of large trades of energy commodities is essential to 
its ability to detect and deter price manipulation. The CFTC's 
ability to detect and deter energy price manipulation is 
suffering from critical information gaps because traders on OTC 
electronic exchanges and the London ICE Futures are currently 
exempt from CFTC reporting requirements. Large trader reporting 
is also essential to analyze the effect of speculation on 
energy prices.
    (5) ICE Impact on Energy Prices. ICE's filings with the 
Securities and Exchange Commission and other evidence indicate 
that its over-the-counter electronic exchange performs a price 
discovery function--and thereby affects U.S. energy prices--in 
the cash market for the energy commodities traded on that 
exchange.
Recommendations
    (1) Eliminate Enron Loophole. Congress should eliminate the 
Enron loophole that currently limits CFTC oversight of key U.S. 
energy commodity markets, and put the CFTC back on the beat 
policing these markets.
    (2) Require Large Trader Reports. Congress should enact 
legislation to provide that persons trading energy futures 
``look-alike'' contracts on over-the-counter electronic 
exchanges are subject to the CFTC's large trader reporting 
requirements.
    (3) Monitor U.S. Energy Trades on Foreign Exchanges. 
Congress should enact legislation to ensure that U.S. persons 
trading U.S. energy commodities on foreign exchanges are 
subject to the CFTC's large trader reporting requirements.
    (4) Increase U.S.-U.K. Cooperation. The CFTC should work 
with the United Kingdom Financial Services Authority to ensure 
it has information about all large trades in U.S. energy 
commodities on the ICE Futures exchange in London.
    (5) Make ICE Determination. The CFTC should immediately 
conduct the hearing required by its regulations to examine the 
price discovery function of the ICE OTC electronic exchange and 
the need for ICE to publish daily trading data as required by 
the Commodity Exchange Act.
K. Tax Haven Abuses: The Enablers, the Tools and Secrecy, August 1, 
        2006 (Report Prepared by Minority and Majority Staffs and 
        released in conjunction with the Subcommittee Hearing on August 
        1, 2006) (Printed in the August 1st hearing record.)
    On August 1, 2006, after a year-long investigation, the 
Subcommittee released a 370-page bipartisan staff report 
entitled, ``Tax Haven Abuses: The Enablers, the Tools and 
Secrecy.'' This report was released in conjunction with a 
hearing held on the same date. The report presented six case 
histories on how offshore and U.S. professionals were helping 
U.S. citizens to hide assets offshore and dodge U.S. taxes, 
contributing to an offshore tax abuse problem that costs U.S. 
taxpayers an estimated $100 billion dollars each year.
    The report described the following case histories to 
illustrate how the offshore industry operates, the roles played 
by U.S. and offshore tax professionals and service providers, 
and the ways in which offshore abuses undermine, circumvent, 
and violate U.S. tax, securities, and anti-money laundering 
laws.
    (1) EDG. This case history described how a one-person U.S. 
corporation recruited clients through the Internet and helped 
them create offshore structures.
    (2) Turpen-Holliday. This case history described an 
offshore promoter who developed a how-to manual for going 
offshore and showed how one of his U.S. clients who used that 
manual to move his assets to several tax havens.
    (3) Greaves-Neal. This case history presented information 
on a U.S. businessman who, with the guidance of a prominent 
offshore promoter, moved between $400,000 and $500,000 in 
untaxed business income offshore.
    (4) Anderson. This case history presented information on a 
wealthy American facing criminal charges for allegedly hiding 
$450 million in stock and cash offshore and disguising his 
ownership of the offshore corporations that held the assets.
    (5) POINT Strategy. This case history described an abusive 
tax shelter sold to five U.S. clients, including Haim Saban and 
Robert Wood Johnson IV, to erase $2 billion in capital gains 
and about $300 million in U.S. taxes. The case history detailed 
how a U.S. company designed, sold, and implemented the abusive 
tax shelter which used a phony stock portfolio held by two 
offshore shell corporations, operating in the Isle of Man under 
offshore secrecy protections, to generate fake securities 
losses to offset real capital gains of U.S. taxpayers.
    (6) Wylys. This case history presented information on two 
brothers, Sam and Charles Wyly, who moved about $190 million in 
stock option compensation offshore to a complex array of 58 
offshore trusts and corporations, without paying taxes on most 
of the compensation. It then described how the brothers 
secretly directed the exercise of the stock options, used the 
stock to generate at least $600 million in untaxed investment 
income, and used the offshore funds to finance business 
ventures, acquire real estate, and buy art, furnishings and 
jewelry for the personal use of Wyly family members in the 
United States.
    The report contained the following findings and 
recommendations.
Findings
    (1) Control of Offshore Assets. Offshore ``service 
providers'' in tax havens use trustees, directors, and officers 
who comply with client directions when managing offshore trusts 
or shell corporations established by those clients; the 
offshore trusts and shell corporations do not act 
independently.
    (2) Tax Haven Secrecy. Corporate and financial secrecy laws 
and practices in offshore tax havens make it easy to conceal 
and obscure the economic realities underlying a great number of 
financial transactions with unfair results unintended under 
U.S. tax and securities laws.
    (3) Ascertaining Control and Beneficial Ownership. 
Corporate and financial secrecy laws and practices in offshore 
tax havens are intended to make it difficult for U.S. law 
enforcement, creditors, and others to learn whether a U.S. 
person owns or controls an allegedly independent offshore trust 
or corporation. They also intentionally make it difficult to 
identify the beneficial owners of offshore entities.
    (4) Offshore Tax Haven Abuses. U.S. persons, with the 
assistance of lawyers, brokers, bankers, offshore service 
providers, and others, are using offshore trusts and shell 
corporations in offshore tax havens to circumvent U.S. tax, 
securities, and anti-money laundering requirements.
    (5) Anti-Money Laundering Abuses. U.S. financial 
institutions have failed to identify the beneficial owners of 
offshore trusts and corporations that opened U.S. securities 
accounts, and have accepted W-8 forms in which offshore 
entities represented that they beneficially owned the account 
assets, even when the financial institutions knew the offshore 
entities were being directed by or were closely associated with 
U.S. taxpayers.
    (6) Securities Abuses. Corporate insiders at U.S. publicly 
traded corporations have used offshore entities to trade in the 
company's stock, and these offshore entities have taken actions 
to circumvent U.S. securities safeguards and disclosure and 
trading requirements.
    (7) Stock Option Abuses. Because stock option compensation 
is taxed when exercised, and not when granted, stock options 
have been used in potentially abusive transactions to defer and 
in some cases avoid U.S. taxes.
    (8) Hedge Fund Transfers. U.S. persons who transferred 
assets to allegedly independent offshore entities in a tax 
haven have then directed those offshore entities to invest the 
assets in a hedge fund controlled by the same U.S. persons, 
thereby regaining investment control of the assets.
Recommendations
    (1) Presumption of Control. U.S. tax, securities, and anti-
money laundering laws should include a presumption that 
offshore trusts and shell corporations are under the control of 
the U.S. persons supplying or directing the use of the offshore 
assets, where those trusts or shell corporations are located in 
a jurisdiction designated as a tax haven by the U.S. Treasury 
Secretary.
    (2) Disclosure of U.S. Stock Holdings. U.S. publicly traded 
corporations should be required to disclose in their SEC 
filings company stock held by an offshore trust or shell 
corporation related to a company director, officer, or large 
shareholder, even if the offshore entity is allegedly 
independent. Corporate insiders should be required to make the 
same disclosure in their SEC filings.
    (3) Offshore Entities as Affiliates. An offshore trust or 
shell corporation related to a director, officer, or large 
shareholder of a U.S. publicly traded corporation should be 
required to be treated as an affiliate of that corporation, 
even if the offshore entity is allegedly independent.
    (4) 1099 Reporting. Congress and the IRS should make it 
clear that a U.S. financial institution that opens an account 
for a foreign trust or shell corporation and determines, as 
part of its anti-money laundering duties, that the beneficial 
owner of the account is a U.S. taxpayer, must file a 1099 form 
with respect to that beneficial owner.
    (5) Real Estate and Personal Property. Loans that are 
treated as trust distributions under U.S. tax law should be 
expanded to include, not just cash and securities as under 
present law, but also loans of real estate and personal 
property of any kind including artwork, furnishings, and 
jewelry. Receipt of cash or other property from a foreign 
trust, other than in an exchange for fair market value, should 
also result in treatment of the U.S. person as a U.S. 
beneficiary.
    (6) Hedge Fund AML Duties. The Treasury Secretary should 
finalize a proposed regulation requiring hedge funds to 
establish anti-money laundering (AML) programs and report 
suspicious transactions to U.S. law enforcement. This 
regulation should apply to foreign-based hedge funds that are 
affiliated with U.S. hedge funds and invest in the United 
States.
    (7) Stock Option-Annuity Swaps. Congress and the IRS should 
make it clear that taxes on stock option compensation cannot be 
avoided or deferred by exchanging stock options for other 
assets of equivalent value such as private annuities.
    (8) Sanctions on Uncooperative Tax Havens. Congress should 
authorize the U.S. Treasury Secretary to identify tax havens 
that do not cooperate with U.S. tax enforcement efforts and 
eliminate U.S. tax benefits for income attributed to those 
jurisdictions.

                   V. Requested and Sponsored Reports

    In connection with its investigations, the Subcommittee 
makes extensive use of the resources and expertise of the 
Government Accountability Office (GAO), the Offices of 
Inspectors General (OIGs) at various Federal agencies, and 
other entities. During the 109th Congress, the Subcommittee 
requested a number of reports and studies on issues of 
importance to Congress and to U.S. consumers. Most of these 
reports have already been described in connection with 
Subcommittee hearings. Several additional reports that were of 
particular interest, and that were not covered by Subcommittee 
hearings, are detailed here.
A. Credit Cards: Increased Complexity in Rates and Fees Heightens Need 
        for More Effective Disclosures to Consumers (GAO-06-929), 
        September 12, 2006
    In response to a 2005 request by the Subcommittee's Ranking 
Minority Member, Senator Levin, the U.S. Government 
Accountability Office (GAO) conducted a year-long investigation 
and issued a 2006 report entitled, ``Credit Cards: Increased 
Complexity in Rates and Fees Heightens Need for More Effective 
Disclosures to Consumers.'' This GAO report was the first 
Federal study in years to provide recent, comprehensive data on 
the credit card fees, interest rates, and disclosure practices 
of major credit card issuers in the United States.
    The report examined 28 popular credit cards issued by the 
six largest credit card issuers of 2004: Citibank (South 
Dakota), N.A.; Chase Bank USA, N.A.; Bank of America; MBNA 
America Bank, N.A.; Capital One Bank; and Discover Financial 
Services. GAO calculated that the credit card accounts provided 
by these six credit card issuers made up 80 percent of credit 
card lending in the United States. Key report findings included 
the following:

   LIncreased Credit Card Use. GAO reported that, in 
2005, U.S. consumers had about 690 million credit cards, and 
the amount charged on them between 1980 and 2005 had grown from 
approximately $69 billion to more than $1.8 trillion.
   LHigher Late Fees. GAO reported that the average 
penalty in 2005 for making a late payment was $34, which was a 
115 percent increase from the average late fee of $13 in 1995. 
It reported that the highest late fee was $39 per occurrence. 
GAO reported that, in 2005, about 35 percent--over one-third--
of active U.S. accounts were assessed a late fee at least once.
   LUnfair Interest Charges on Timely Payments. GAO 
reported that one-third of the credit card issuers it studied 
used a billing method that charged interest on credit card debt 
that had already been repaid by the consumer. The example 
outlined by GAO assumed that a consumer starts a billing cycle 
with a zero balance and charges $1,000 on the credit card. The 
cardholder makes a timely payment of $990, reasonably expecting 
to pay interest on the remaining $10. Instead, some credit card 
issuers charged interest on the full $1,000, even though the 
cardholder had already paid 99 percent of the balance on time. 
While the consumer only owed the credit card company $10 for 30 
days or less in GAO's example, the interest charge was $11.02.
   LHidden Fees. GAO found that some credit card fees 
were not disclosed in the materials provided to cardholders. 
For example, some issuers charged cardholders a $5 to $15 fee 
to make a single bill payment by telephone; others charged a $2 
to $13 fee for obtaining a single copy of a billing statement 
or other record.
   LPenalty Interest Rates Exceed 30 Percent. Some of 
the credit cards analyzed by GAO imposed penalty interest rates 
of over 30 percent on cardholders who paid late or exceeded a 
credit limit. In one instance reported to GAO, consumers 
complained to a Federal banking regulator about being charged 
an over-the-limit fee when their account balances exceeded 
their credit limits due solely to a late fee charged by their 
card issuer.
   LInadequate Fee Disclosure. GAO found that credit 
card fee disclosures were difficult to understand, buried 
important information, and often failed to convey to 
cardholders when late fees would be charged and what actions 
could result in penalty interest rates.
   LCredit Card Interest Rate and Fee Revenues. GAO 
determined that interest rate charges generated about 70 
percent of the credit card issuers' revenues, while cardholder 
fees provided about 10 percent, and interchange fees charged to 
merchants provided the remaining 20 percent. GAO also 
determined that credit card penalty interest rates and fees had 
increased over time as a portion of credit card issuer 
revenues. In addition, GAO reported that, from 1986 to 2004, 
the average profitability of large credit card-issuing banks 
was more than double that of all commercial banks.

    As part of its analysis, GAO examined information supplied 
by the six credit card issuers; employed a usability consultant 
to analyze and test disclosures; interviewed a sample of 112 
consumers selected to represent a range of education and income 
levels; and analyzed academic and regulatory studies on 
bankruptcy and card issuer revenues.
B. Tax Shelters: Services Provided by External Auditors (GAO-05-171), 
        February 1, 2005
    On February 1, 2005, GAO issued a report entitled, ``Tax 
Shelters: Services Provided by External Auditors,'' which was 
provided in response to a request by the Subcommittee's Ranking 
Minority Member Senator Levin. This report compiled data 
related to when the auditor of a publicly traded corporation 
also provided the corporation or its directors or officers with 
services related to the U.S. tax obligations, including advice 
on the design, validity, or implementation of tax shelters to 
minimize or eliminate payment of U.S. taxes. GAO was asked to 
determine: (1) How many Fortune 500 companies obtained tax 
shelter services from their external auditor; (2) for how many 
Fortune 500 companies did the auditor provide tax shelter 
services to individual company officers or directors; and (3) 
whether in recent years selected Fortune 500 case study 
companies had changed how they obtained tax services from their 
external auditors.
    Using IRS data, GAO found that 61 Fortune 500 companies had 
obtained tax shelter services from their external auditor 
during the period, 1998 through 2003, for transactions 
generally reportable on tax returns sent to IRS. GAO stated 
that the IRS considered some of these reportable transactions 
abusive, with tax benefits subject to disallowance under 
existing law, and other transactions to possibly have some 
traits of abuse. GAO reported that estimated multi-year 
potential tax revenue lost to the Federal Government from the 
61 companies' auditor-related transactions was about $3.4 
billion, including $1.8 billion in categories the IRS 
considered abusive. GAO also found that, in 17 companies, at 
least one officer or director had used the company's auditor to 
obtain individual tax shelter services. In reporting this data, 
GAO explained that the numbers had important limitations and 
that the IRS was working to address the data limitations.
    The GAO investigation also examined eight case studies to 
evaluate the extent to which companies had changed their 
procedures for obtaining tax services from their external 
auditors. The GAO report stated that all eight companies had 
reported using their auditor for tax services during 2000 
through 2003. In addition, two of the companies had reported 
using their auditor to obtain tax shelter services, but one 
said it had obtained those services before the covered period. 
GAO reported that six of the eight companies had indicated that 
company officers or directors had obtained individual tax 
services from the company auditor at some time since 2000, with 
four disallowing the practice later. GAO stated that none of 
the eight reported officers or directors using the company 
auditor to obtain individual tax shelter services. GAO reported 
that, according to the company representatives, all eight case 
study companies had adopted or refined policies or practices in 
2002 or 2003, to pre-approve the tax services or govern the tax 
services provided by their auditor.
C. United Nations: Procurement Internal Controls Are Weak (GAO-06-577), 
        April 25, 2006
    For more than a decade, experts have called on the United 
Nations (UN) Secretariat to correct serious deficiencies in its 
procurement process. Recent evidence of corruption and 
mismanagement in procurement suggests that millions of dollars 
contributed to the U.N. by the United States and other member 
states are at risk of fraud, waste and abuse. During the last 
decade, U.N. procurement has more than tripled to more than 
$1.6 billion in 2005, largely due to expanding U.N. 
peacekeeping operations. More than a third of that amount is 
procured by U.N. peacekeeping field missions. To review the 
U.N.'s internal controls over procurement, GAO assessed key 
control elements, including (1) the overall control environment 
and (2) specific control activities aimed at providing 
reasonable assurance that staff are complying with directives. 
GAO found that weak internal controls over U.N. headquarters 
and peacekeeping procurement operations expose U.N. resources 
to significant risk of waste, fraud, and abuse. GAO determined 
that the U.N.'s overall control environment for procurement is 
weakened by the absence of (1) an effective organizational 
structure, (2) a commitment to a professional workforce, and 
(3) specific ethics guidance for procurement staff. GAO found 
that leadership responsibilities for U.N. procurement are 
highly diffused. While the U.N. Department of Management is 
responsible for U.N. procurement, field procurement staff are 
instead supervised by the U.N. Department of Peacekeeping 
Operations, which currently lacks the expertise and capacities 
needed to manage field procurement activities. GAO also found 
that the U.N. has not demonstrated a commitment to maintaining 
a qualified, professional procurement workforce. It has not 
established training requirements or a procurement career path. 
In addition, GAO found that the U.N. has yet to establish 
specific ethics guidance for procurement staff in response to 
long-standing mandates by the U.N. General Assembly, despite 
recent findings of unethical behavior. GAO also found 
weaknesses in key control activities. For example, it found 
that the U.N. has not addressed workload and resource problems 
that are impeding the ability of a key committee to review 
high-value contracts. Also, GAO found the U.N. has yet to 
establish an independent process to review vendor complaints, 
despite long-standing recommendations that it do so. In 
addition, the U.N. has not updated its procurement manual since 
2004. As a result of these and other weaknesses, GAO concluded 
that many millions of dollars in U.S. and other member state 
contributions were vulnerable to fraud, waste, and abuse.
D. United Nations: Funding Arrangements Impede Independence of Internal 
        Auditors (GAO-06-575), April 25, 2006
    With contributions to United Nations (U.N.) organizations 
totaling more than $1.6 billion in 2006-2007, the United States 
has advocated strong U.N. oversight. In 1994, the United States 
provided support to establish the U.N. Office of Internal 
Oversight Services (OIOS). The findings of the Independent 
Inquiry Committee (IIC) into the Oil-for-Food Program renewed 
concerns about U.N. oversight, and the 2005 World Summit 
proposed actions to improve OIOS. GAO examined (1) the extent 
to which U.N. funding arrangements for OIOS ensure independent 
oversight, and (2) the consistency of OIOS practices with key 
international auditing standards. GAO found that U.N. funding 
arrangements constrain OIOS's ability to operate independently 
as mandated by the General Assembly and required by 
international auditing standards that OIOS has adopted. First, 
while OIOS is funded by a regular budget and 12 other revenue 
streams, U.N. financial rules severely limit OIOS's ability to 
reallocate resources among revenue streams, locations, and 
operating divisions. Thus, OIOS cannot always direct resources 
at high-risk areas when they arise. Second, OIOS is dependent 
on the funds, programs, and other entities it audits for 
reimbursement for its services. GAO found that the managers of 
the programs OIOS intends to examine can deny OIOS permission 
to perform work or not pay OIOS for services. U.N. entities 
could thus avoid OIOS audits or investigations, and high-risk 
areas can be and have been excluded from examination. GAO also 
found that OIOS has begun to implement key measures for 
effective oversight, but some of its practices fall short of 
applicable international auditing standards. For example, GAO 
determined that OIOS develops an annual work plan, but the risk 
management framework on which the work plans are based is not 
fully implemented. Moreover, OIOS annual reports do not assess 
risk and control issues facing the U.N. organization or the 
consequences if these are not addressed. OIOS officials report 
that the office does not have adequate resources, but they also 
do not have a mechanism to determine appropriate staffing 
levels. In addition, OIOS has no mandatory training curriculum 
for staff or systematic procedures for ensuring the reliability 
of data used for their audits. OIOS also does not require all 
staff to document their independence. GAO found that, although 
two OIOS divisions have recently undergone external reviews, 
the other two have not undergone such a review within the last 
5 years. OIOS monitors and reports on the status of its 
recommendations and is making efforts to improve followup on 
oversight recommendations.
E. Internal Revenue Service: Procedural Changes Could Enhance Tax 
        Collections (GAO-07-26), November 15, 2006
    GAO has previously testified that Federal contractors have 
abused the tax system with little consequence. While performing 
those audits, GAO noted that the Internal Revenue Service (IRS) 
records sometimes contained inaccurate or outdated tax 
information that prevented IRS from taking appropriate 
collection actions against those contractors, including 
submitting their tax debt to the Federal Payment Levy Program 
(FPLP) for collection. As a result, GAO was asked to review 
IRS's coding of tax debt excluded from the FPLP to determine 
whether: (1) IRS tax records contain inaccurate status or 
transaction codes that exclude tax debt from the FPLP, (2) IRS 
monitoring could be strengthened to ensure the accuracy of its 
status and transaction codes, and (3) other opportunities exist 
to increase the amount of tax debt included in the FPLP. GAO 
found that IRS tax records had inaccurate information that 
resulted in it erroneously excluding cases from the FPLP and 
other tax collection actions. The FPLP is a cost-effective 
automated system used to collect unpaid taxes from certain 
Federal payments. GAO estimated that as of September 30, 2005, 
over 500,000 tax records equating to about $2.4 billion in tax 
debt contained inaccurate codes that IRS systems used to 
exclude tax debt. GAO also found that IRS monitoring of cases 
was insufficient to identify and correct the coding errors GAO 
identified. Additionally, IRS monitoring of financial hardship 
cases was not sufficient to ensure their ongoing accuracy. IRS 
grants tax debtors experiencing financial difficulty a hardship 
designation that excludes them from the FPLP and other tax 
collection activities until their income increases. GAO found 
that the IRS solely uses the income reported on the tax 
debtor's annual tax returns. However, IRS does not monitor 
those tax debtors to ensure they are filing and paying current 
taxes. For 31 financial hardship cases GAO examined, 24 had 
ceased to file tax returns. GAO determined that, although the 
IRS had increased the amount of tax debt it submits to the 
FPLP, additional policy changes could further improve the 
program's effectiveness. Since 1992, IRS has almost tripled the 
maximum income it allows tax debtors in financial hardship to 
earn; raising it to $84,000 in 2004--almost double the national 
median income. As a result, whereas in 1992, no one earning 
above the median income was considered to be in financial 
hardship (and therefore excluded from the FPLP), in 2005 almost 
two-thirds of the tax debt in financial hardship was owed by 
individuals earning over the median income. Although a 
financial hardship designation may be appropriate in many 
situations, allowing relatively high-income tax debtors to 
avoid tax collection action, including the FPLP, calls into 
question the fair application of the tax system and may 
contribute to noncompliance. GAO also found that IRS policy 
also limits the amount of tax debt in the FPLP by excluding $5 
billion in tax debt from the program while IRS is pursuing 
levies from other assets or income sources. Additionally, 
during notification IRS excludes individuals' tax debt from the 
FPLP about twice as long as legally necessary.
F. Additional GAO reports that assisted the Subcommittee during the 
        109th Congress include the following, many of which have 
        already been described in connection with the Subcommittee's 
        hearings.
    (1) GAO report related to the United Nations Oil-for-Food 
Program:

   LUnited Nations: Management Reforms Progressing 
Slowly with Many Awaiting General Assembly Review (GAO-07-14), 
October 5, 2006

    (2) GAO reports related to border security:

   LCargo Security: Partnership Program Grants 
Importers Reduced Scrutiny With Limited Assurance of Improved 
Security (GAO-05-404), March 11, 2005
   LPreventing Nuclear Smuggling: DOE Has Made Limited 
Progress in Installing Radiation Detection Equipment at Highest 
Priority Foreign Seaports (GAO-05-375), March 31, 2005
   LContainer Security: A Flexible Staffing Model and 
Minimum Equipment Requirements Would Improve Overseas Targeting 
and Inspection Efforts (GAO-05-557), April 26, 2005
   LNuclear Nonproliferation: IAEA Has Strengthened Its 
Safeguards and Nuclear Security Programs, But Weaknesses Need 
to Be Addressed (GAO-06-93), October 7, 2005
   LCombating Nuclear Smuggling: Corruption, 
Maintenance, and Coordination Problems Challenge U.S. Efforts 
to Provide Radiation Detection Equipment to Other Countries 
(GAO-06-311), March 14, 2006
   LCombating Nuclear Smuggling: DHS Has Made Progress 
Deploying Radiation Detection Equipment at U.S. Ports-of-Entry, 
But Concerns Remain (GAO-06-389), March 22, 2006
   LBorder Security: Investigators Successfully 
Transported Radioactive Sources Across Our Nation's Borders at 
Selected Locations (GAO-06-545R), March 28, 2006

    (3) GAO reports related to Federal contractors who cheat on 
their taxes:

   LFinancial Management: Thousands of Civilian Agency 
Contractors Abuse the Federal Tax System With Little 
Consequence (GAO-05-637), June 16, 2005
   LFinancial Management: State and Federal Governments 
Are Not Taking Action to Collect Unpaid Debt Through Reciprocal 
Agreements (GAO-05-697R), July 26, 2005

    (4) GAO report related to money laundering issues:

   LCompany Formations: Minimal Ownership Information 
Is Collected and Available (GAO-06-376), April 7, 2006

    (5) GAO reports related to energy pricing issues and the 
Strategic Petroleum Reserve:

   LRoyalty Revenues: Total Revenues Have Not Increased 
at the Same Pace as Rising Oil and Natural Gas Prices Due to 
Decreasing Production Sold (GAO-06-786R), June 21, 2006
   LStrategic Petroleum Reserve: Available Oil Can 
Provide Significant Benefits, But Many Factors Should Influence 
Future Decisions about Fill, Use, and Expansion (GAO-06-872), 
August 24, 2006
   LNatural Gas: Roles of Federal and State Regulators 
in Overseeing Prices (GAO-06-968), September 8, 2006

    (6) GAO reports related to DOD travel issues:

   LDOD Business Transformation: Defense Travel System 
Continues to Face Implementation Challenges (GAO-06-18), 
January 18, 2006
   LDefense Travel System: Reported Savings 
Questionable and Implementation Challenges Remain (GAO-06-980), 
September 26, 2006

    (7) GAO report related to homeland security issues:

   LHomeland Security: Opportunities Exist to Enhance 
Collaboration at 24/7 Operations Centers Staffed by Multiple 
DHS Agencies (GAO-07-89), October 20, 2006

    (8) GAO report related to Internet pharmacy issues:

   LPrescription Drugs: Strategic Framework Would 
Promote Accountability and Enhance Efforts to Enforce the 
Prohibitions on Personal Importation (GAO-05-372), September 8, 
2005

                                  
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