[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
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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
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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
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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
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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\
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\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.
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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.
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\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.
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(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.
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\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.
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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