[Senate Report 112-11]
[From the U.S. Government Publishing Office]
112th Congress
1st Session SENATE Report
112-11
_______________________________________________________________________
R E P O R T
ON THE ACTIVITIES
of the
COMMITTEE ON FINANCE
of the
UNITED STATES SENATE
during the
111th CONGRESS
pursuant to
Rule XXVI of the Standing Rules
of the
UNITED STATES SENATE
March 31, 2011.--Ordered to be printed
?
[111th Congress--Committee Membership]
COMMITTEE ON FINANCE
MAX BAUCUS, Montana, Chairman
JOHN D. ROCKEFELLER IV, West CHUCK GRASSLEY, Iowa
Virginia ORRIN G. HATCH, Utah
KENT CONRAD, North Dakota OLYMPIA J. SNOWE, Maine
JEFF BINGAMAN, New Mexico JON KYL, Arizona
JOHN F. KERRY, Massachusetts JIM BUNNING, Kentucky
BLANCHE L. LINCOLN, Arkansas MIKE CRAPO, Idaho
RON WYDEN, Oregon PAT ROBERTS, Kansas
CHARLES E. SCHUMER, New York JOHN ENSIGN, Nevada
DEBBIE STABENOW, Michigan MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington JOHN CORNYN, Texas
BILL NELSON, Florida
ROBERT MENENDEZ, New Jersey
THOMAS R. CARPER, Delaware
Russell Sullivan, Staff Director
Kolan Davis, Republican Staff Director and Chief Counsel
SUBCOMMITTEES
______
HEALTH CARE
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
JEFF BINGAMAN, New Mexico ORRIN G. HATCH, Utah
JOHN F. KERRY, Massachusetts OLYMPIA J. SNOWE, Maine
BLANCHE L. LINCOLN, Arkansas JOHN ENSIGN, Nevada
RON WYDEN, Oregon MICHAEL B. ENZI, Wyoming
CHARLES E. SCHUMER, New York JOHN CORNYN, Texas
DEBBIE STABENOW, Michigan JON KYL, Arizona
MARIA CANTWELL, Washington JIM BUNNING, Kentucky
BILL NELSON, Florida MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey
THOMAS R. CARPER, Delaware
______
TAXATION, IRS OVERSIGHT, AND LONG-TERM GROWTH
KENT CONRAD, North Dakota, Chairman
MAX BAUCUS, Montana JON KYL, Arizona
JOHN D. ROCKEFELLER IV, West ORRIN G. HATCH, Utah
Virginia OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon PAT ROBERTS, Kansas
CHARLES E. SCHUMER, New York JOHN ENSIGN, Nevada
DEBBIE STABENOW, Michigan MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington JOHN CORNYN, Texas
ROBERT MENENDEZ, New Jersey
THOMAS R. CARPER, Delaware
(ii)
?
ENERGY, NATURAL RESOURCES, AND INFRASTRUCTURE
JEFF BINGAMAN, New Mexico, Chairman
KENT CONRAD, North Dakota JIM BUNNING, Kentucky
JOHN F. KERRY, Massachusetts MIKE CRAPO, Idaho
BLANCHE L. LINCOLN, Arkansas JOHN CORNYN, Texas
DEBBIE STABENOW, Michigan ORRIN G. HATCH, Utah
MARIA CANTWELL, Washington MICHAEL B. ENZI, Wyoming
BILL NELSON, Florida
THOMAS R. CARPER, Delaware
______
SOCIAL SECURITY, PENSIONS, AND FAMILY POLICY
BLANCHE L. LINCOLN, Arkansas, Chairman
JOHN D. ROCKEFELLER IV, West PAT ROBERTS, Kansas
Virginia JON KYL, Arizona
KENT CONRAD, North Dakota JOHN ENSIGN, Nevada
CHARLES E. SCHUMER, New York
BILL NELSON, Florida
______
INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS
RON WYDEN, Oregon, Chairman
JOHN D. ROCKEFELLER IV, West MIKE CRAPO, Idaho
Virginia OLYMPIA J. SNOWE, Maine
JEFF BINGAMAN, New Mexico JIM BUNNING, Kentucky
JOHN F. KERRY, Massachusetts PAT ROBERTS, Kansas
DEBBIE STABENOW, Michigan
MARIA CANTWELL, Washington
ROBERT MENENDEZ, New Jersey
(iii)
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LETTER OF TRANSMITTAL
----------
U.S. Senate,
Committee on Finance,
Washington, DC, March 31, 2011.
Hon. Nancy Erickson,
Secretary, U.S. Senate,
Washington, DC.
Dear Madam Secretary: In accordance with rule XXVI of the
Standing Rules of the United States Senate and the pertinent
unanimous consent order pertaining to this rule, I am
transmitting herewith a report on the activities of the
Committee on Finance of the United States Senate for the 111th
Congress.
Sincerely,
Max Baucus, Chairman.
(v)
C O N T E N T S
__________
Page
111th Congress--Committee Membership............................. ii
Letter of Transmittal............................................ v
Committee Jurisdiction........................................... 1
Rules of Procedure............................................... 2
Tax--Summary of Activities....................................... 5
Committee Hearings and Member Meetings....................... 6
Full Committee Executive Meetings............................ 10
Senators' Only Meetings...................................... 10
Subcommittee on Energy, Natural Resources, and Infrastructure 10
Trade--Summary of Activities..................................... 13
Full Committee Hearings...................................... 15
Full Committee Executive Meetings............................ 16
Subcommittee on International Trade, Customs, and Global
Competitiveness............................................ 16
Health--Summary of Activities.................................... 19
Committee Hearings and Member Meetings....................... 21
Full Committee Executive Meetings............................ 23
Senators' Only Meetings...................................... 23
Subcommittee on Health Care.................................. 24
Social Security--Summary of Activities........................... 25
Full Committee Hearings...................................... 25
Oversight and Investigations..................................... 27
Overview..................................................... 27
Full Committee Hearings...................................... 27
Oversight Activities......................................... 29
Department of Health and Human Services...................... 33
Food and Drug Administration................................. 35
Centers for Medicare and Medicaid Services................... 41
National Institutes of Health................................ 47
Centers for Disease Control and Prevention................... 50
Department of Treasury/FRBNY................................. 51
Securities and Exchange Commission........................... 54
Social Security Administration............................... 56
American Recovery and Reinvestment Act....................... 57
GAO and OIG Access and Independence.......................... 62
Pharmaceuticals and Devices: Conflicts of Interest........... 65
Department of Homeland Security.............................. 67
Federal Bureau of Investigation.............................. 68
OIG Oversight................................................ 71
GAO Requests................................................. 73
Other Oversight Activities................................... 75
Legislation.................................................. 83
Nominations...................................................... 87
Bills and Resolutions Referred to the Committee.................. 103
Reports, Prints, and Studies..................................... 105
Official Communications.......................................... 107
(vii)
112th Congress Report
SENATE
1st Session 112-11
======================================================================
REPORT ON THE ACTIVITIES OF THE COMMITTEE ON FINANCE DURING THE 111TH
CONGRESS
_______
March 31, 2011.--Ordered to be printed
_______
Mr. Baucus, from the Committee on Finance, submitted the following
REPORT
This report reviews the legislative and oversight
activities of the Committee on Finance during the 111th
Congress. These activities parallel the broad scope of
responsibilities vested in the committee by the Legislative
Reorganization Act of 1946, as amended, rule XXV(k) of the
Standing Rules of the Senate, and additional authorizing
resolutions.
COMMITTEE JURISDICTION
Rule XXV(i) of the Standing Rules of the Senate requires
reference to this committee of all proposed legislation, and
other matters, dealing with (i) Committee on Finance, to which
committee shall be referred all proposed legislation, messages,
petitions, memorials, and other matters relating to the
following subjects:
1. Bonded debt of the United States, except as
provided in the Congressional Budget Act of 1974.
2. Customs, collection districts, and ports of entry
and delivery.
3. Deposit of public moneys.
4. General revenue sharing.
5. Health programs under the Social Security Act and
health programs financed by a specific tax or trust
fund.
6. National social security.
7. Reciprocal trade agreements.
8. Revenue measures generally, except as provided in
the Congressional Budget Act of 1974.
9. Revenue measures relating to the insular
possessions.
10. Tariffs and import quotas, and matters related
thereto.
11. Transportation of dutiable goods.
(1)
COMMITTEE RULES
I. RULES OF PROCEDURE
Rule 1. Regular Meeting Days.--The regular meeting day of the
committee shall be the second and fourth Tuesday of each month, except
that if there be no business before the committee the regular meeting
shall be omitted.
Rule 2. Committee Meetings.--(a) Except as provided by paragraph 3
of Rule XXVI of the Standing Rules of the Senate (relating to special
meetings called by a majority of the committee) and subsection (b) of
this rule, committee meetings, for the conduct of business, for the
purpose of holding hearings, or for any other purpose, shall be called
by the chairman. Members will be notified of committee meetings at
least 48 hours in advance, unless the chairman determines that an
emergency situation requires a meeting on shorter notice. The
notification will include a written agenda together with materials
prepared by the staff relating to that agenda. After the agenda for a
committee meeting is published and distributed, no nongermane items may
be brought up during that meeting unless at least two-thirds of the
members present agree to consider those items.
(b) In the absence of the chairman, meetings of the committee may
be called by the ranking majority member of the committee who is
present, provided authority to call meetings has been delegated to such
member by the chairman.
Rule 3. Presiding Officer.--(a) The chairman shall preside at all
meetings and hearings of the committee except that in his absence the
ranking majority member who is present at the meeting shall preside.
(b) Notwithstanding the rule prescribed by subsection (a) any
member of the committee may preside over the conduct of a hearing.
Rule 4. Quorums.--(a) Except as provided in subsection (b) one-
third of the membership of the committee, including not less than one
member of the majority party and one member of the minority party,
shall constitute a quorum for the conduct of business.
(b) Notwithstanding the rule prescribed by subsection (a) one
member shall constitute a quorum for the purpose of conducting a
hearing.
Rule 5. Reporting of Measures or Recommendations.--No measure or
recommendation shall be reported from the committee unless a majority
of the committee is actually present and a majority of those present
concur.
Rule 6. Proxy Voting; Polling.--(a) Except as provided by
paragraph 7(a)(3) of Rule XXVI of the Standing Rules of the Senate
(relating to limitation on use of proxy voting to report a measure or
matter), members who are unable to be present may have their vote
recorded by proxy.
(b) At the discretion of the committee, members who are unable to
be present and whose vote has not been cast by proxy may be polled for
the purpose of recording their vote on any rollcall taken by the
committee.
Rule 7. Order of Motions.--When several motions are before the
committee dealing with related or overlapping matters, the chairman may
specify the order in which the motions shall be voted upon.
Rule 8. Bringing a Matter to a Vote.--If the chairman determines
that a motion or amendment has been adequately debated, he may call for
a vote on such motion or amendment, and the vote shall then be taken,
unless the committee votes to continue debate on such motion or
amendment, as the case may be. The vote on a motion to continue debate
on any motion or amendment shall be taken without debate.
Rule 9. Public Announcement of Committee Votes.--Pursuant to
paragraph 7(b) of Rule XXVI of the Standing Rules of the Senate
(relating to public announcement of votes), the results of rollcall
votes taken by the committee on any measure (or amendment thereto) or
matter shall be announced publicly not later than the day on which such
measure or matter is ordered reported from the committee.
Rule 10. Subpoenas.--Subpoenas for attendance of witnesses and the
production of memoranda, documents, and records shall be issued by the
chairman, or by any other member of the committee designated by him.
Rule 11. Nominations.--In considering a nomination, the committee
may conduct an investigation or review of the nominee's experience,
qualifications, and suitability, to serve in the position to which he
or she has been nominated. To aid in such investigation or review, each
nominee may be required to submit a sworn detailed statement including
biographical, financial, policy, and other information which the
committee may request. The committee may specify which items in such
statement are to be received on a confidential basis. Witnesses called
to testify on the nomination may be required to testify under oath.
Rule 12. Open Committee Hearings.--To the extent required by
paragraph 5 of Rule XXVI of the Standing Rules of the Senate (relating
to limitations on open hearings), each hearing conducted by the
committee shall be open to the public.
Rule 13. Announcement of Hearings.--The committee shall undertake
consistent with the provisions of paragraph 4(a) of Rule XXVI of the
Standing Rules of the Senate (relating to public notice of committee
hearings) to issue public announcements of hearings it intends to hold
at least one week prior to the commencement of such hearings.
Rule 14. Witnesses at Hearings.--(a) Each witness who is scheduled
to testify at any hearing must submit his written testimony to the
staff director not later than noon of the business day immediately
before the last business day preceding the day on which he is scheduled
to appear. Such written testimony shall be accompanied by a brief
summary of the principal points covered in the written testimony.
Having submitted his written testimony, the witness shall be allowed
not more than 10 minutes for oral presentation of his statement.
(b) Witnesses may not read their entire written testimony, but
must confine their oral presentation to a summarization of their
arguments.
(c) Witnesses shall observe proper standards of dignity, decorum
and propriety while presenting their views to the committee. Any
witness who violates this rule shall be dismissed, and his testimony
(both oral and written) shall not appear in the record of the hearing.
(d) In scheduling witnesses for hearings, the staff shall attempt
to schedule witnesses so as to attain a balance of views early in the
hearings. Every member of the committee may designate witnesses who
will appear before the committee to testify. To the extent that a
witness designated by a member cannot be scheduled to testify during
the time set aside for the hearing, a special time will be set aside
for the witness to testify if the member designating that witness is
available at that time to chair the hearing.
Rule 15. Audiences.--Persons admitted into the audience for open
hearings of the committee shall conduct themselves with the dignity,
decorum, courtesy and propriety traditionally observed by the Senate.
Demonstrations of approval or disapproval of any statement or act by
any member or witness are not allowed. Persons creating confusion or
distractions or otherwise disrupting the orderly proceeding of the
hearing shall be expelled from the hearing.
Rule 16. Broadcasting of Hearings.--(a) Broadcasting of open
hearings by television or radio coverage shall be allowed upon approval
by the chairman of a request filed with the staff director not later
than noon of the day before the day on which such coverage is desired.
(b) If such approval is granted, broadcasting coverage of the
hearing shall be conducted unobtrusively and in accordance with the
standards of dignity, propriety, courtesy and decorum traditionally
observed by the Senate.
(c) Equipment necessary for coverage by television and radio
media shall not be installed in, or removed from, the hearing room
while the committee is in session.
(d) Additional lighting may be installed in the hearing room by
the media in order to raise the ambient lighting level to the lowest
level necessary to provide adequate television coverage of the hearing
at the then current state of the art of television coverage.
(e) The additional lighting authorized by subsection (d) of this
rule shall not be directed into the eyes of any members of the
committee or of any witness, and at the request of any such member or
witness, offending lighting shall be extinguished.
Rule 17. Subcommittees.--(a) The chairman, subject to the approval
of the committee, shall appoint legislative subcommittees. All
legislation shall be kept on the full committee calendar unless a
majority of the members present and voting agree to refer specific
legislation to an appropriate subcommittee.
(b) The chairman may limit the period during which House-passed
legislation referred to a subcommittee under paragraph (a) will remain
in that subcommittee. At the end of that period, the legislation will
be restored to the full committee calendar. The period referred to in
the preceding sentences should be 6 weeks, but may be extended in the
event that adjournment or a long recess is imminent.
(c) All decisions of the chairman are subject to approval or
modification by a majority vote of the committee.
(d) The full committee may at any time by majority vote of those
members present discharge a subcommittee from further consideration of
a specific piece of legislation.
(e) Because the Senate is constitutionally prohibited from
passing revenue legislation originating in the Senate, subcommittees
may mark up legislation originating in the Senate and referred to them
under Rule 16(a) to develop specific proposals for full committee
consideration but may not report such legislation to the full
committee. The preceding sentence does not apply to nonrevenue
legislation originating in the Senate.
(f) The chairman and ranking minority member shall serve as
nonvoting ex officio members of the subcommittees on which they do not
serve as voting members.
(g) Any member of the committee may attend hearings held by any
subcommittee and question witnesses testifying before that
subcommittee.
(h) Subcommittee meeting times shall be coordinated by the staff
director to insure that--
(1) no subcommittee meeting will be held when the committee
is in executive session, except by unanimous consent;
(2) no more than one subcommittee will meet when the full
committee is holding hearings; and
(3) not more than two subcommittees will meet at the same
time.
Notwithstanding paragraphs (2) and (3), a subcommittee may meet
when the full committee is holding hearings and two subcommittees may
meet at the same time only upon the approval of the chairman and the
ranking minority member of the committee and subcommittees involved.
(i) All nominations shall be considered by the full committee.
(j) The chairman will attempt to schedule reasonably frequent
meetings of the full committee to permit consideration of legislation
reported favorably to the committee by the subcommittees.
Rule 18. Transcripts of Committee Meetings.--An accurate record
shall be kept of all markups of the committee, whether they be open or
closed to the public. A transcript, marked as ``uncorrected,'' shall be
available for inspection by Members of the Senate, or members of the
committee together with their staffs, at any time. Not later than 21
business days after the meeting occurs, the committee shall make
publicly available through the Internet--
(a) a video recording;
(b) an audio recording; or
(c) after all members of the committee have had a reasonable
opportunity to correct their remarks for grammatical errors or to
accurately reflect statements, a corrected transcript;
and such record shall remain available until the end of the Congress
following the date of the meeting.
Notwithstanding the above, in the case of the record of an
executive session of the committee that is closed to the public
pursuant to Rule XXVI of the Standing Rules of the Senate, the record
shall not be published or made public in any way except by majority
vote of the committee after all members of the committee have had a
reasonable opportunity to correct their remarks for grammatical errors
or to accurately reflect statements made.
Rule 19. Amendment of Rules.--The foregoing rules may be added to,
modified, amended or suspended at any time.
TAX
SUMMARY OF ACTIVITIES
During the 111th Congress, the Senate Finance Committee
played a critical role in passing economic stimulus
legislation, reforming the nation's health care system and
addressing the expiration of the 2001 and 2003 tax cuts. The
committee held hearings to support its legislation and to
explore such issues as climate change, middle-class tax relief,
small business job creation and comprehensive tax reform.
2009 Legislation
On February 10, 2009, H.R. 1, the ``American Recovery and
Reinvestment Act of 2009,'' passed in the Senate. The act
contained numerous tax cuts designed to help families and small
businesses through the financial crisis and spur economic
growth. It became law on February 17, 2009 (Pub. L. No. 111-5).
On November 4, 2009, H.R. 3548, the ``Worker,
Homeownership, and Business Assistance Act of 2009,'' passed in
the Senate. The act extended unemployment benefits and the
homebuyer tax credit and expanded the net operating loss
carryback provision. It was signed into law on November 6, 2009
(Pub. L. No. 111-92).
On December 24, 2009, H.R. 3590, the ``Patient Protection
and Affordable Care Act,'' which provided tax credits to small
businesses and individuals for the purchase of health care and
made other tax changes related to the nation's health care
system, was passed by the Senate. It was signed into law on
March 23, 2010 (Pub. L. No. 111-148).
2010 Legislation
On January 21, 2010, H.R. 4462, the ``Haiti Assistance
Income Tax Incentive Act'' was passed in the Senate. The act
altered, for purposes of the tax deduction for charitable
contributions, the date for which taxpayers can account for
cash contributions for the relief of victims of the earthquake
in Haiti. It became law on January 22, 2010 (Pub. L. No. 111-
126).
On March 17, 2010, H.R. 2847, the ``Hiring Incentives to
Restore Employment Act,'' passed in the Senate. The act
contained tax incentives designed to encourage hiring and lower
unemployment. It was signed into law on March 18, 2010 (Pub. L.
No. 111-147).
On March 25, 2010, H.R. 4872, the ``Health Care and
Education Reconciliation Act of 2010,'' passed in the Senate.
The act made a number of health-related financing and revenue
changes to the Patient Protection and Affordable Care Act. It
was signed into law on March 30, 2010 (Pub. L. No. 111-152).
On June 18, 2010, H.R. 3962, the ``Preservation of Access
to Care for Medicare Beneficiaries and Pension Relief Act of
2010,'' was passed in the Senate. The act provided temporary
funding relief for pension plans. It became law on June 25,
2010 (Pub. L. No. 111-192).
On August 5, 2010, H.R. 1586, the ``Education Jobs and
Medicaid Assistance Act,'' which made a number of changes
relating to the taxation of foreign income, passed in the
Senate. It became law on August 10, 2010 (Pub. L. No. 111-226).
On September 16, 2010, H.R. 5297, the ``Small Business Jobs
Act of 2010,'' was passed in the Senate. The act provided tax
incentives to help small businesses access capital, stimulate
investment and promote entrepreneurship and tax equity. It
became law on September 27, 2010 (Pub. L. No. 111-240).
On December 15, 2010, H.R. 4853, the ``Tax Relief,
Unemployment Insurance Reauthorization and Job Creation Act of
2010,'' was passed in the Senate. The act extended for two
years the tax cuts enacted in 2001 and 2003 and certain other
tax cuts expiring in 2009 and 2010, provided 2 years of AMT
relief, enacted a temporary payroll tax reduction for employees
and expanded and extended bonus depreciation for businesses. It
became law on December 17, 2010 (Pub. L. No. 111-312).
Committee Hearings and Member Meetings
2009
March 4, 2009--``The President's Fiscal Year 2010 Budget
Proposal: Part One.'' The purpose of this hearing was to
introduce to the committee the administration's FY2010
proposed budget. Testimony was received from the Honorable
Timothy Geithner, Secretary of the Treasury, United States
Department of the Treasury, Washington, DC.
March 17, 2009--``Tax Issues Related to Ponzi Schemes and an
Update on Offshore Tax Evasion Legislation.'' The purpose
of this hearing was to discuss the effects of Ponzi schemes
on the American taxpayers, as well as their effects on
charitable contributions. The hearing also examined the
overseas tax gap. Testimony was received from Doug Shulman,
Internal Revenue Service Commissioner; Michael Brostek,
Director of Tax Issues, Strategic Issues Team of the US
Government Accountability Office; and William Josephson of
Fried, Frank, Harris, Shriver & Jacobson, LLP.
March 26, 2009--``The Middle Income Tax Relief Question:
Extend, Modify, or Expire?'' This hearing focused on the
potential options for extension of the middle-class tax
cuts and other tax provisions set to expire at the end of
2010. Testimony was heard from Paul Taylor, Executive Vice
President, Pew Research Center, Washington, DC; George Yin,
Edwin S. Cohen Distinguished Professor of Law and Taxation,
University of Virginia, School of Law, Charlottesville, VA;
Robert Greenstein, Ph.D., Executive Director, Center on
Budget and Policy Priorities, Washington, DC; and Alan
Viard, Ph.D., Resident Scholar, American Enterprise
Institute for Public Policy Research, Washington, DC.
April 23, 2009--``Technology Neutrality in Energy Tax: Issues
and Options.'' The purpose of this hearing was to discuss
technology neutrality with respect to energy tax
incentives. Testimony was received from Gilbert Metcalf,
Ph.D., Professor of Economics, Tufts University, Medford,
MA; David Greene, Ph.D., Corporate Fellow, Oak Ridge
National Laboratory, Center for Transportation Analysis,
National Transportation Research Center, Knoxville, TN; and
John Urbanchuk, Ph.D., Director, LECG, LLC, Wayne, PA.
May 7, 2009--``Auctioning under Cap and Trade: Design,
Participation and Distribution of Revenues.'' The purpose
of this hearing was to understand the effects of a cap and
trade program on the economy and to discuss how cap and
trade legislation should be structured. Testimony was heard
from the Honorable Alan Krueger, Assistant Secretary for
Economic Policy, United States Department of the Treasury,
Washington, DC; Dr. Douglas Elmendorf, Ph.D., Director,
Congressional Budget Office, Washington, DC; Dr. Jos
Delbeke, Deputy Director-General, European Commission
Directorate-General for the Environment, Brussels, Belgium;
and Dr. Anne Smith, Ph.D., Vice President, Practice Leader
of Climate & Sustainability, CRA International, Washington,
DC.
June 16, 2009--``Climate Change Legislation: Tax
Considerations.'' This hearing was held to discuss how tax
law should treat emission allowances under a cap and trade
program. Testimony was received from Gary Hufbauer,
Reginald Jones Senior Fellow, Peterson Institute for
International Economics, Washington, DC; Mark Price,
Principal-in-Charge, Financial Institutions and Products,
Washington National Tax, KPMG LLP, Washington, DC; and
Keith Butler, Senior Vice President of Tax, Duke Energy,
Charlotte, NC.
August 4, 2009--``Climate Change Legislation: Allowance and
Revenue Distribution.'' The purpose of this hearing was to
discuss ways to distribute emission allowances and revenues
under a cap and trade program. Testimony was received from
John Stephenson, Director, Environmental Protection Issues,
National Resources and Environment Team, United States
Government Accountability Office, Washington, DC; Dallas
Burtraw, Ph.D., Senior Fellow, Resources for the Future,
Washington, DC; Alan Viard, Ph.D., Resident Scholar,
American Enterprise Institute for Public Policy Research,
Washington, DC; and Nathaniel Keohane, Ph.D., Director of
Economic Policy and Analysis, Environmental Defense Fund,
New York, NY.
November 10, 2009--``Climate Change Legislation: Considerations
for Future Jobs.'' The purpose of this hearing was to
discuss the effects climate change legislation may have on
employment and the economy. The hearing also considered the
role of the Senate Finance Committee with respect to
climate change legislation. Testimony was heard from
Abraham Breehey, Director, Legislative Affairs,
International Brotherhood of Boilermakers, Iron
Shipbuilders, Blacksmiths, Forgers and Helpers, Department
of Government Affairs, Fairfax, VA; Carol Berrigan,
Director, Industry Infrastructure, Nuclear Energy
Institute, Washington, DC; Dr. Kenneth P. Green, Resident
Scholar, American Enterprise Institute for Public Policy
Research, Washington, DC; Dr. Margo Thorning, Senior Vice
President and Chief Economist, American Council for Capitol
Formation, Washington, DC; and Van Ton-Quinlivan, Director,
Workforce Development and Strategic Programs, Pacific Gas
and Electric Company, San Francisco, CA.
2010
February 2, 2010--``The President's Fiscal Year 2011 Budget.''
This hearing was held to discuss the President's budget for
FY 2011 and the President's tax cut proposals for job
creation. Testimony was received from the Honorable Timothy
Geithner, Secretary of the Treasury, United States
Department of the Treasury, Washington, DC.
February 4, 2010--``The President's Fiscal Year 2011 Budget.''
The purpose of this hearing was to discuss the President's
FY 2011 budget proposal and its proposed temporary economic
recovery measures. Testimony was received from the
Honorable Peter Orszag, Ph.D., Director, Office of
Management and Budget, Washington, DC.
February 23, 2010--``Trade and Tax Issues Relating to Small
Business Job Creation.'' The purpose of this hearing was to
discuss the impact small businesses have on job creation
and to consider various policy options to increase
employment. Testimony was heard from Jim Sanford, Assistant
United States Trade Representative for Small Business,
Market Access and Industrial Competitiveness, Washington,
DC; Spencer Williams, President, West Paw Design, Bozeman,
MT; Dr. Eric Toder, Institute Fellow, Urban Institute,
Washington, DC; Chris Edwards, Director, Tax Policy
Studies, Cato Institute, Washington, DC; and Bill Rys, Tax
Counsel, National Federation of Independent Business,
Washington, DC.
April 20, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 1.'' This hearing was
held to discuss potential options to recover the losses
resulting from the Troubled Asset Relief Program. Testimony
was heard from the Honorable Neil Barofsky, Special
Inspector General for the Troubled Asset Relief Program
(SIGTARP), United States Department of Treasury,
Washington, DC.
May 4, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 2.'' The purpose of this
hearing was to discuss the administration's proposed fee on
financial institutions and understand what effect the fee
would have on businesses and the economy. Testimony was
received from the Honorable Timothy Geithner, Secretary of
the Treasury, United States Department of the Treasury,
Washington, DC; the Honorable Steve Bartlett, President and
CEO, Financial Services Roundtable, Washington, DC; John K.
Sorensen, President and CEO, Iowa Bankers Association,
Johnston, IA; James Chessen, Chief Economist, American
Bankers Association, Washington, DC; and Patrick S. Baird,
Chairman, AEGON, USA, LLC, Cedar Rapids, IA.
May 11, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 3.'' The third and final
hearing on the President's proposed fee on financial
institutions was held to discuss the extent of the economic
effects of the financial crisis, and how best to structure
a financial institutions fee. Testimony was received from
David C. John, Senior Research Fellow, The Heritage
Foundation, Washington, DC; Douglas Elliott, Economic
Studies, Brookings Institution, New York, NY; Edward
DeMarco, Acting Director, Federal Housing Finance Agency,
Washington, DC; and Nancy McLernon, President and CEO,
Organization for International Investment, Washington, DC.
July 14, 2010--``The Future of Individual Tax Rates: Effects on
Economic Growth and Distribution.'' The purpose of this
hearing was to discuss the expiration of the 2001 and 2003
tax cuts and the implications of extending the tax cuts on
the national deficit. Testimony was received from Carol
Markman, Certified Public Accountant, Feldman, Meinberg and
Co. LLP, Syosset, NY; David Marzahl, President, Center for
Economic Progress, Chicago, IL; Dr. Donald Marron,
Director, Tax Policy Center, Urban Institute, Washington,
DC; Dr. Douglas Holtz-Eakin, President, American Action
Forum, Washington, DC; and Dr. Leonard Burman, Daniel
Patrick Moynihan Professor of Public Affairs, Maxwell
School, University of Syracuse, Syracuse, NY.
September 22, 2010--``Tax and Fiscal Policy: Effects on the
Military and Veterans Community.'' The purpose of this
hearing was to discuss the impact that current tax and
fiscal policies have on military personnel, their families,
and the veteran community. Testimony was heard from
Specialist Dan Dobyns, Director, State Family Programs for
Montana National Guard Family Programs, Helena, MT; Staff
Sergeant Michael Noyce-Merino, Montana National Guard,
former ``Noncommissioned Officer (NCO) of the Year'' for
2008, and winner of the U.S. Army's 2008 ``Best Warrior''
competition, Fort Harrison, MT; Dr. Mark Darrah, President
and Chief Executive Officer, Athena GTX, Inc., Des Moines,
IA; Captain Marshall Hanson USNR (Retired), Director of
Legislative and Military Policy, Reserve Officers
Association of the United States, also representing The
Military Coalition (TMC), Washington, DC; and Timothy
Embree, Legislative Associate, Iraq and Afghanistan
Veterans of America (IAVA), Washington, DC.
September 23, 2010--``Tax Reform: Lessons from the Tax Reform
Act of 1986.'' The purpose of this hearing was to discuss
lessons learned from the Tax Reform Act of 1986. Testimony
was received from The Honorable Richard A. Gephardt,
President and CEO, Gephardt Group, Washington, DC; The
Honorable William R. Archer, Jr, Senior Policy Advisor,
PricewaterhouseCoopers, Washington, DC; The Honorable John
E. Chapoton, Strategic Advisor, Brown Advisory, Washington,
DC; and Randall D. Weiss, Ph.D, Managing Director, Economic
Research, The Conference Board, New York, NY.
December 2, 2010--``Tax Reform: Historical Trends in Income and
Revenue.'' The purpose of this hearing, the second in a
series on tax reform, was to look at historical trends in
income and in taxes as background for tax reform. Testimony
was received from Dr. Douglas Elmendorf, Director,
Congressional Budget Office, Washington, DC; Mr. Thomas A.
Barthold, Chief of Staff, Joint Committee on Taxation,
Washington, DC; and Dr. Mark J. Mazur, Deputy Assistant
Secretary for Tax Analysis, United States Department of
Treasury, Washington, DC.
Full Committee Executive Meetings
2009
January 27, 2009--Open Executive Session to Consider an
Original Bill Titled, ``The American Recovery and
Reinvestment Act.''
Senators' Only Meetings
2009
January 8, 2009--Senators' Only Meeting to discuss the
committee agenda for the month of January.
January 14, 2009--Senators' Only Meeting to meet with Douglas
Elmendorf, Director-designate of the Congressional Budget
Office to discuss economic recovery legislation.
2010
March 4, 2010--Senators' Only Meeting to discuss the committee
agenda.
March 17, 2010--Senators' Only Meeting to discuss the economic
policy with Federal Reserve Board Chairman Ben Bernanke.
July 22, 2010--Senators' Only Meeting to discuss the committee
agenda.
Subcommittee on Energy, Natural Resources,
and Infrastructure Hearing
2009
September 10, 2009--Subcommittee on Energy, Natural Resources,
and Infrastructure of the Committee on Finance: ``Oil and
Gas Tax Provisions: A Consideration of the President's FY
2010 Budget Proposal.'' This hearing was held to discuss
the modifications of the taxation of domestic oil and gas
activities contained within the President's FY 2010 budget
proposal. Testimony was heard from the Honorable Alan
Krueger, Assistant Secretary for Economic Policy, United
States Department of the Treasury, Washington, DC; Dr.
Stephen P.A. Brown, Nonresident Fellow, Resources for the
Future, Arlington, TX; Calvin Johnson, Andrews and Kurth
Centennial Professor of Law, The University of Texas School
of Law, Austin, TX; Larry Nichols, Chairman, American
Petroleum Institute, Oklahoma City, OK; Kevin Book,
Managing Director, ClearView Energy Partners, LLC,
Washington, DC; and Henry Kleemeier, Chairman, Independent
Petroleum Association of America, Tulsa, OK.
2010
May 20, 2010--``Clean Technology Manufacturing Competitiveness:
The Role of Tax Incentives.'' The purpose of this hearing
was to discuss the role of tax incentives with regard to
competitiveness in clean technology manufacturing.
Testimony was heard from Mark Mazur, Deputy Assistant
Secretary for Tax Analysis, United States Department of
Treasury, Washington, DC; Henry Kelly, Principal Deputy
Assistant Secretary for Energy Efficiency and Renewable
Energy, United States Department of Energy, Washington, DC;
Robert Atkinson, President, Information Technology and
Innovation Foundation, Washington, DC; Jon Sakoda, Partner,
New Enterprise Associates, Chevy Chase, MD; Douglas Parks,
Senior Vice President for Business Development and
Attraction, Michigan Economic Development Corporation,
Lansing, MI; Kevin Book, Managing Director, ClearView
Energy Partners, LLC, Washington, DC; Karen Alderman
Harbert, President and CEO, Institute for 21st Century
Energy, United States Chamber of Commerce, Washington, DC;
and J.D. Foster, Norman B. Ture Senior Fellow, Economics of
Fiscal Policy, The Heritage Foundation, Washington, DC.
TRADE
SUMMARY OF ACTIVITIES
During the 111th Congress, the committee exercised its
oversight responsibilities and acted upon many important issues
related to international trade and customs law and the American
economy. A brief summary of the committee's activity is
provided below.
During the first session, the committee held several
hearings. The committee convened a hearing on the U.S.-Panama
Trade Promotion Agreement, receiving testimony from the Office
of the United States Trade Representative and key stakeholders,
including agriculture, manufacturing, and labor union
representatives. The committee also held a hearing on the
international trade aspects of climate change legislation,
focusing on the findings of a Government Accountability Office
report commissioned by the Chairman. The committee also
convened a hearing on S. 1631, the Customs Facilitation and
Trade Enforcement Act of 2009, introduced by the Chairman and
Ranking Member, to strengthen trade facilitation and
enforcement.
The committee convened an open executive session to
consider S.J. Res. 17, a joint resolution approving the
reauthorization and renewal of import restrictions contained in
the Burmese Freedom and Democracy Act of 2003. The committee
also convened hearings and met in open executive sessions to
consider the nominations of Ronald Kirk, to be U.S. Trade
Representative; Miriam Sapiro to be a Deputy U.S. Trade
Representative; Demetrios Marantis, to be a Deputy U.S. Trade
Representative; Michael Punke, to be a Deputy U.S. Trade
Representative; Islam Siddiqui, to be Chief Agricultural
Negotiator in the Office of the U.S. Trade Representative; Lael
Brainard, to be Under Secretary of the Treasury for
International Affairs; and Charles Collyns, to be Assistant
Secretary of the Treasury for International Finance.
The Chairman and Ranking Member also worked together to
reauthorize and expand Trade Adjustment Assistance (TAA)
programs in the American Recovery and Reinvestment Act of 2009
(H.R. 1). H.R. 1, which the Senate approved on February 13,
2009, expanded TAA coverage to both workers and firms in the
services sector and to workers whose jobs have been off-shored
to any country; increased training, health coverage, and other
benefits available for TAA certified workers; and increased
flexibility in program requirements to allow more workers,
firms, farmers, and fishermen to participate in TAA (Pub. L.
111-5).
The Chairman and Ranking Member also worked together to
extend trade preference programs. On December 22, 2009, the
Senate passed H.R. 4284, which extended the Generalized System
of Preferences and the Andean Trade Promotion Act (ATPA) until
December 31, 2010 (Pub. L. 111-124). The bill also required the
U.S. Trade Representative to evaluate the compliance of ATPA
beneficiary countries with the program's eligibility criteria
and to submit a report on the results of that evaluation to
Congress by June 30, 2010.
In the second session, the committee held a hearing on
trade and tax issues relating to small business job creation,
hearing testimony from the Assistant U.S. Trade Representative
for Small Business, Market Access, and Industrial
Competitiveness and a small business owner from Bozeman, MT.
The committee also held a hearing on the 2010 trade agenda,
hearing testimony from U.S. Trade Representative Ronald Kirk.
The committee also convened a hearing to consider options for
reforming U.S. trade preference programs, with witnesses
representing major U.S. importers. And the committee convened a
hearing on the U.S.-China economic relationship with Secretary
of the Treasury Tim Geithner and a separate hearing on the
U.S.-China trade relationship with Secretary of Commerce Gary
Locke and U.S. Trade Representative Ronald Kirk.
The committee convened in open executive session to
consider S.J. Res. 29, a joint resolution approving the
reauthorization and renewal of import restrictions contained in
the Burmese Freedom and Democracy Act of 2003. The committee
also convened hearings and met in open executive session to
consider the nominations of Francisco Sanchez, to be Under
Secretary of Commerce for International Trade, and Michael
Camunez, to be Assistant Secretary of Commerce for Market
Access and Compliance. The committee also held a nomination
hearing for Alan Bersin, to be Commissioner of Customs for U.S.
Customs and Border Protection.
In response to the devastating earthquake that struck Haiti
in January 2010, the Chairman and Ranking Member worked
together to expand Haiti's duty-free access to the U.S. market.
In May 2010, the Senate passed H.R. 5160, the Haiti Economic
Lift Program Act, which expanded duty-free access to the U.S.
market for certain products produced in Haiti and extended the
Caribbean Basin Trade Partnership Act and the Haitian
Hemispheric Opportunity through Partnership Encouragement Act
through September 30, 2020 (Pub. L. 111-171).
The Chairman and Ranking Member also worked together to
enact the U.S. Manufacturing Enhancement Act, H.R. 4380, which
suspended or reduced the duty rates on hundreds of
manufacturing inputs not available in the United States. The
bill passed the Senate by unanimous consent on July 27, 2010
(Pub. L. 111-227). The Chairman and Ranking Member also worked
together to extend trade preference and TAA programs. On
December 22, 2010, the Senate passed H.R. 6517, which extended
the TAA and ATPA programs for six weeks (Pub. L. 111-344). In
addition, the Chairman and Ranking Member worked together to
extend the U.S. import surcharge on ethyl alcohol (ethanol). On
December 15, 2010, the Senate passed H.R. 4853, which extended
the import surcharge through December 31, 2011 (Pub. L. 111-
312).
Full Committee Hearings
2009
May 21, 2009--``The U.S.-Panama Trade Promotion Agreement.''
Received testimony from Everett Eissenstat, Assistant U.S.
Trade Representative for the Americas; Jim Owens, Chairman
and Chief Executive Officer of Caterpillar, Inc; Thea Lee,
Policy Director and Chief International Economist at the
AFL-CIO; and Sam Carney, President-elect of the National
Pork Producers Association.
July 8, 2009--``Climate Change Legislation: International Trade
Considerations.'' Received testimony from Loren Yager, the
Director of the International Affairs and Trade Team at the
U.S. Government Accountability Office; Eileen Claussen, the
President of the Pew Center on Global Climate Change; and
Gary Horlick, an international trade attorney.
October 20, 2009--``S. 1631, the Customs Facilitation and Trade
Enforcement Act of 2009.'' Received testimony from Mr.
Jerry Cook, Vice President of Government and Trade
Relations of Hanesbrand, Inc.; Mr. Rick Cotton, Executive
Vice President and General Counsel of NBC Universal; Mr.
Ted Sherman, Director of Global Trade Services of Target
Corporation; and Ms. Mary Ann Comstock, Brokerage
Compliance Manager for UPS Supply Chain Solutions.
2010
February 23, 2010--``Trade and Tax Issues Relating to Small
Business Job Creation.'' Received testimony from Jim
Sanford, Assistant U.S. Trade Representative for Small
Business, Market Access, and Industrial Competitiveness;
Spencer Williams, President, West Paw Design; Dr. Eric
Toder, Institute Fellow, The Urban Institute; Chris
Edwards, Director, Tax Policy Studies, Cato Institute; and
Bill Rys, Tax Counsel, National Federation of Independent
Business.
March 3, 2010--``The 2010 Trade Agenda.'' Received testimony
from Ambassador Ronald Kirk, U.S. Trade Representative.
March 9, 2010--``U.S. Preference Programs: Options for
Reform.'' Received testimony from Eric Norris, Executive
Director of Global Marketing, FMC Lithium Division; Edward
Gresser, Senior Fellow and Director, Trade and Global
Markets Project, Democratic Leadership Council; Jeff Vogt,
Global Economic Policy Specialist, Policy Department, AFL-
CIO; and Gregory Simpkins, Vice President of Policy and
Programs, Leon H. Sullivan Foundation.
June 10, 2010--``The U.S.-China Economic Relationship: A New
Approach for a New China.'' Received testimony from the
Hon. Timothy Geithner, Secretary of the Treasury.
June 23, 2010--``The U.S.-China Trade Relationship: Finding a
New Path Forward.'' Received testimony from the Hon. Gary
Locke, Secretary of Commerce; and Ambassador Ronald Kirk,
U.S. Trade Representative.
Full Committee Executive Meetings
2009
July 23, 2009--Open Executive Session to consider S.J. Res. 17,
a joint resolution approving the reauthorization and
renewal of import restrictions contained in the Burmese
Freedom and Democracy Act of 2003.
2010
June 30, 2010--Open Executive Session to consider S.J. Res. 29,
a joint resolution approving the renewal of import
restrictions contained in the Burmese Freedom and Democracy
Act of 2003.
Subcommittee on International Trade, Customs,
and Global Competitiveness Hearings
2009
December 9, 2009--``Exports Place on the Path of Economic
Recovery.'' Received testimony from the Honorable Amy
Klobuchar, Senator from Minnesota; the Honorable George
LeMieux, Senator from Florida; Rochelle Lipsitz, Deputy
Director General of the United States Foreign and Commerce
Service, U.S. Department of Commerce; Alexandre Mas, Chief
Economist, U.S. Department of Labor; Dr. Loren Yager,
Director of International Affairs and Trade, U.S.
Government Accountability Office; Howard Rosen, Visiting
Fellow, Peterson Institute for International Economics; Bob
Beisner, Vice President, SolarWorld Industries America; and
Tamara Harney, HMI Worldwide.
2010
April 29, 2010--``Doubling U.S. Exports: Are U.S. Sea Ports
Ready for the Challenge?'' Received testimony from Polly
Trottenberg, Assistant Secretary for Transportation Policy,
U.S. Department of Transportation; Nicole Lamb-Hale,
Assistant Secretary for Manufacturing and Services, U.S.
Department of Commerce; Leal Sundet, Coast Committeeman,
International Longshore and Warehouse Union; Steve Larson,
Chairman and President of Cat Logistics and Vice President
of Caterpillar Inc.; Errol Rice, Executive Vice President,
Montana Stockgrowers Association; Bill Wyatt, Executive
Director, Port of Portland; Phil Lutes, Deputy Managing
Director, Seaport Division, Port of Seattle; Larry Paulson,
Executive Director, Port of Vancouver; and Jeff Bishop,
Executive Director, Oregon International Ports of Coos Bay.
July 14, 2010--``Marine Wealth: Promoting Conservation and
Advancing American Exports.'' Received testimony from Ted
Danson, Board Member, Oceana; David Schorr, Fellow, World
Wildlife Fund; Rod Moore, President, West Coast Seafood
Processors; Tom Bastoni, Vice President (Scallop Division),
American Pride Seafoods; Eric Schwab, Assistant
Administrator for Fisheries, National Oceanic and
Atmospheric Administration (NOAA); and Mark Linscott,
Assistant U.S. Trade Representative for Environment and
National Resources, Office the United States Trade
Representative.
November 18, 2010--``International Trade in the Digital
Economy.'' Received testimony from Dr. Catherine Mann,
Professor of Economics, Brandeis University; Ed Black,
President and CEO, Computer and Communications Industry
Association; Daniel Burton, Senior Vice President for
Global Public Policy, Salesforce.com; Mike Sax, Board
President, Association for Competitive Technology (ACT);
and Greg Slater, Director of Trade and Competition Policy,
Intel Corporation.
HEALTH
SUMMARY OF ACTIVITIES
Health Care Programs--During the 111th Congress, the
committee focused its efforts to reauthorize the Children's
Health Insurance Program (CHIP), pass the American Recovery and
Reinvestment Act, and enact comprehensive health care reform.
In January of the first session, Chairman Baucus worked to
pass the Children's Health Insurance Program Reauthorization
Act of 2009 (CHIPRA). CHIPRA, S.275, was successfully reported
out of the Senate Finance Committee by a vote of 12 to 7 on
January 15, 2009. The Senate debated the measure as a
substitute to H.R. 2. The bill passed the Senate by a vote of
66 to 32 on January 29, 2009. The House passed the identical
bill on February 4, 2009. CHIPRA extended CHIP through
September 30, 2013 and made changes to the program, such as
offering states outreach and enrollment incentives, provisions
intended to strengthen quality of care and health outcomes, and
increase access to benefits.
Also during the first session, the Finance Committee marked
up S. 350, the American Recovery and Reinvestment Act (ARRA).
ARRA was successfully reported out of the Senate Finance
Committee by a vote of 14 to 9 on January 27, 2009. S. 350 was
combined with S.336, a bill reported out of the Senate
Committee on Appropriations, and sent to the Senate for debate
as a substitute to H.R. 1. The bill passed the Senate by a vote
of 61 to 37 on February 10, 2009. A bill resolving the
differences between the House and the Senate was subsequently
passed by a vote of 60 to 38 on February 13, 2009. Health
provisions in ARRA included an increase in states' Medicaid
match in order to relieve budgetary strains due to the
recession, an expansion of eligibility for COBRA to provide
insurance to those who lost their jobs, and a significant
investment in health information technology. ARRA also included
provisions to provide child support incentive payments to
states as well as a new TANF Emergency Contingency Fund to
assist states with rising welfare caseloads.
The committee also played an integral role during the 111th
Congress in the passage of health care reform. The Finance
Committee marked up the America's Healthy Future Act, which was
reported by the committee on October 13, 2009 by a vote of 14
to 9. The America's Healthy Future Act was merged with the
health reform legislation reported out of the Senate Committee
on Health, Education, Labor and Pensions to form the Patient
Protection and Affordable Care Act (PPACA). The Senate debated
the bill as a substitute to H.R. 3590. On December 24, 2009,
the bill passed the Senate by a vote of 60 to 39. The House
passed the identical bill on March 21, 2010.
The Senate, through the reconciliation process, also passed
health care reform legislation, entitled the Health Care and
Education Reconciliation Act of 2010 (HCERA) that amended
PPACA. The full Senate debated this bill as a substitute to
H.R. 4872. The Senate passed the bill on March 25, 2010 by a
vote of 56 to 43. The House passed the identical bill the same
day.
Throughout the 111th Congress, the committee also acted
several times to prevent significant reductions in Medicare
physician payments. After several shorter extensions, Chairman
Baucus and Ranking Member Grassley, working with Majority
Leader Reid and Minority Leader McConnell, worked to extend all
expiring Medicare and Medicaid provisions by introducing H.R.
4994, the Medicare and Medicaid Extenders Act of 2010. The bill
included an extension of the Section 508 hospital program, a
provision extending the 1.0 floor in the Work Geographic Index
for any locality in which the Index is less than 1.0, an
extension of the exceptions process for therapy caps, a
provision continuing direct payments to independent
laboratories for physician pathology services, an extension of
ambulance and mental health add-on payments, an extension of
the outpatient hold harmless provision, an extension of the
Transitional Medical Assistance program, an extension of the
Qualified Individual program, and a two-year extension of
special diabetes programs. The bill also prevented, for one
year, a schedule reduction in Medicare physician payments. H.R.
4994 passed the Senate by unanimous consent on December 8,
2010. The House passed the identical bill on December 9, 2010.
The committee also achieved an extension of the Temporary
Assistance to Needy Families (TANF) program. H.R. 4783, the
Claims Resolution Act of 2010, included an extension of TANF
and related programs, as well as, improved data collection
provisions through the end of FY 2011. These new data
collection provisions are intended to provide information on
welfare client participation in work readiness activities and
program expenditures to Congress in a timely manner to assist
Members in making decisions on welfare reauthorization. H.R.
4783 passed the Senate by unanimous consent on November 19,
2010. The House passed the identical bill on November 30, 2010.
In addition, the committee was very active on Unemployment
Insurance during the 111th Congress. The committee was integral
in the design and continuation of the federally funded
emergency benefits program.
H.R. 1, the American Recovery and Reinvestment Act of 2009,
extended the two tier Emergency Unemployment Compensation (EUC)
program through December 26, 2009 and included several other
initiatives. Those were: (1) the Federal Additional
Compensation (FAC) benefit of an additional $25 per week for
those receiving unemployment benefits, (2) 100 percent federal
financing of the EB program, and (3) the first $2,400 of
unemployment benefits excluded from income tax in 2009.
H.R. 3548, the Worker, Homeowner, and Business Assistance
Act of 2009, changed the EUC tier structure from two tiers to
four tiers and reallocated the number of weeks previously
allotted. Tier I: 20 weeks for all states, Tier II: 14
additional weeks (all states), Tier III: 13 additional weeks
(if a state's unemployment rate is 6 percent or higher), and
Tier IV: 6 additional weeks (if a state's unemployment rate is
8.5 percent or higher). The bill also continued the FAC
additional benefit, the EB changes, and the tax exclusion of
the first $2,400 of benefits. The authorization remained
through December 26, 2009.
The UI program was reauthorized two more times without
change. First, the H.R. 3326, the Department of Defense
Appropriations Act, 2010, extended the program through February
27, 2010. Then, H.R. 4691, the Temporary Extension Act of 2010,
extended the program through March 2, 2010.
H.R. 4851, the Continuing Extension Act of 2010,
reauthorized the program through November 30, 2010 with one
change--the removal of the FAC benefit, so there is no longer
an additional $25 in weekly benefits.
The last reauthorization of the federally funded emergency
benefits program was provided by H.R. 4853, the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of
2010. The bill provides a 13-month reauthorization of the
program through January 3, 2012.
Committee Hearings and Member Meetings
2009
February 25, 2009--``Scoring Health Care Reform: CBO's Budget
Options.'' CBO Director, Dr. Douglas Elmendorf, testified
about opportunities identified by CBO to expand affordable
health insurance options to more Americans and to make the
health care system more efficient and affordable for
families, employers, and governments. Dr. Elmendorf spoke
to committee members about two recently-published CBO
reports that included scores for specific provisions aimed
at expanded coverage or health care affordability.
March 10, 2009--``The President's Fiscal Year 2010 Health Care
Proposals.'' This hearing focused on the Department of
Health and Human Services (HHS) provisions in the
President's 2010 budget. The Witness was The Honorable
Peter Orszag, Ph.D., Director, Office of Management and
Budget, Washington, DC.
March 12, 2009--``Workforce Issues in Health Care Reform:
Assessing the Present and Preparing for the Future.'' The
Finance Committee held a hearing to focus on health care
workforce issues facing the nation in the context the
committee's efforts to enact comprehensives health reform.
The hearing highlighted the nation's health care workforce
needs, including a shortage of primary care providers, and
discussed various reform proposals to prepare our workforce
to deliver high quality, cost-effective medical care for
all Americans.
April 21, 2009--Roundtable to Discuss ``Reforming America's
Health Care Delivery System.'' The discussion was designed
to inform the committee's deliberations regarding
comprehensive health care reform, thirteen representatives
from various fields within the health care sector--
including providers, patient advocates, health plans,
employers, and policy experts--presented the committee with
the challenges and opportunities facing the health care
delivery system. Witnesses proposed specific ideas for
ensuring that the delivery of health care services is more
patient-centered, of consistently higher quality, and at a
cost that is lower than currently projected. Concepts
presented included the medical home, accountable care
organizations, and avoiding preventable hospital
readmissions.
May 5, 2009--Roundtable Discussion on ``Expanding Health Care
Coverage.'' The Finance Committee held a public Roundtable
Discussion on Expanding Health Care Coverage with fifteen
witnesses testifying to the committee members about health
care coverage levels and sources today, as well as options
to expand health care coverage to more Americans. The
witnesses included economists, health services researchers,
health insurers, business leaders, consumer organizations,
and other health policy experts. The options discussed
included ways to expand both public and private sources of
coverage as well as changes to private insurance market
regulations.
May 12, 2009--Roundtable Discussion on ``Financing
Comprehensive Health Care Reform.'' The roundtable was
intended to facilitate a discussion between Finance
Committee Members, tax experts, health care policy experts,
and industry representatives to explore options to finance
comprehensive health care reform. Three general categories
were explored including; finding savings within the health
system, reevaluating current health care tax subsidies, and
making changes to more general tax provisions.
September 15, 2009--``Unemployment Insurance Benefits: Where Do
We Go From Here?'' The Finance Committee held a hearing to
highlight the effects of the recession on the unemployment
system. The hearing had four witnesses who spoke about the
benefits of reauthorizing the federally funded emergency
unemployment benefits program. The hearing also focused on
the strain the recession caused on state unemployment
system solvency. The witnesses identified areas for
improvement, including addressing workforce training needs,
and addressing state insolvency.
2010
February 3, 2010--``The President's Fiscal Year 2011 Health
Care Proposals.'' This hearing focused on the Department of
Health and Human Services (HHS) provisions in the
President's 2010 budget. The Witness was the Honorable
Kathleen Sebelius, Secretary of Health and Human Services.
April 14, 2010--``Using Unemployment Insurance to Help
Americans Get Back to Work: Creating Opportunities and
Overcoming Challenges.'' The Finance Committee held a
hearing to highlight state innovation in unemployment
systems. The hearing had four witnesses who spoke about the
training and education programs adopted by different states
to address job shortages. The witnesses presented ideas for
expanding workforce training opportunities. However, the
witnesses cautioned on the need for balance in the system
between training and existing jobs.
September 21, 2010--``Welfare Reform: A New Conversation on
Women and Poverty.'' The Finance Committee held a hearing
to highlight the current challenges faced by the Temporary
Assistance for Needy Families (TANF) program. The hearing
had four witnesses who spoke about the need to reauthorize
the TANF program. The witnesses also pointed out that
poverty levels have risen in the last five years and that
special attention needs to be paid to TANF's ability to
prevent families from failing into poverty and to serve
women and children at or below the Federal poverty level.
The witnesses identified areas for improvement including;
access to education, the involvement of fathers,
interconnectedness with other Federal systems like juvenile
justice and the need for better data, and accountability
from states.
November 17, 2010--``Strengthening Medicare and Medicaid:
Taking Steps to Modernize America's Health Care System.''
The hearing focused on key delivery system reforms included
in the Affordable Care Act and CMS's progress in
implementing those provisions. Dr. Donald Berwick, the
Administrator of the Centers for Medicare and Medicaid
Services (CMS), was the witness before the committee.
Full Committee Executive Meetings
2009
January 15, 2009--Open Executive Session to consider adoption
of the committee's rules for the 111th Congress, and an
original bill reauthorizing the Children's Health Insurance
Program. The Finance Committee marked up legislation to
reauthorize the Children's Health Insurance Program (CHIP).
The reauthorization bill extended CHIP through September
30, 2013 and made improvements to the program like offering
states outreach and enrollment incentives, strengthening
quality of care and health outcomes, and increasing access
to benefits. The Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA) became P.L. 111-3.
September 22, 2009--Open Executive Session to consider an
original bill providing for health care reform.
September 23, 2009; September 24, 2009; September 25, 2009;
September 29, 2009; September 30, 2009; October 1, 2009;
and October 13, 2009--Continuation of the Open Executive
Session to consider an original bill providing for health
care reform. The committee met to consider the ``America's
Healthy Future Act of 2009,'' an original bill providing
for health care reform. The bill provided for access to
health insurance for all Americans and put in place
policies to decrease the cost of health care and improve
the quality of the health care delivery system. On October
13th, 2009, the committee voted to report the bill by a
vote of 14
to 9.
Senators' Only Meetings
2009
March 5, 2009; May 5, 2009; June 4, 2009; June 11, 2009; June
17, 2009; June 25, 2009; July 9, 2009; and September 17,
2009. Senators' Only Meetings to discuss Comprehensive
Health Reform: Members of the Finance Committee met to
discuss comprehensive health care reform, including topics
related to providing health insurance to all Americans,
lowering the cost of health care, and improving the quality
of the health care delivery system.
Subcommittee on Health Care Hearings
2009
March 18, 2009--``What is Health Care Quality and Who
Decides?'' The Finance Health Subcommittee held a hearing
to highlight quality of care and delivery system reform
issues to be addressed in the health reform debate. The
hearing had three witnesses (Dr. Carolyn Clancy, Dr. Brent
James, and Dr. Marjorie Kanof), who spoke about the current
status of health care quality efforts, how to better align
financial incentives to improve health outcomes, how the
federal government defines quality measures, and
coordination between public and private-sector quality
improvement efforts.
March 25, 2009--``The Role of Long-Term Care in Health
Reform.'' The Finance Health Subcommittee held a hearing to
highlight long-term care issues for inclusion in the
comprehensive health reform debate. The hearing had four
witnesses who spoke about the long-term health care options
today, states' cost of providing and paying for long-term
care services, and opportunities to improve long-term care
services. The witnesses identified areas for improvement,
including expanding home and community-based services,
addressing workforce shortages, and reducing states' costs
while improving quality.
SOCIAL SECURITY
SUMMARY OF ACTIVITIES
During the 111th Congress, the committee held hearings on
policy options and potential benefits of making it easier for
individuals to voluntarily work during retirement, and on how
court interpretations of federal law have affected the
protections provided by private disability insurance policies.
Full Committee Hearings
July 15, 2010--``Choosing to Work During Retirement and the
Impact on Social Security.'' This hearing featured the
testimony of Stephen Goss, Chief Actuary, Social Security
Administration, Washington, DC; Marc Freedman, CEO and
Founder, Civic Ventures, San Francisco, CA; Marcia Brown,
Chief Operating Officer, National Center for Appropriate
Technology, Butte, MT; Nicole Maestas, Economist and Group
Manager, RAND Corporation, Santa Monica, CA; Bonnie Shelor,
Senior Vice President for Human Resources, Bon Secours
Richmond Health Systems, Richmond, VA. The testimony
focused on the growing trend of more Americans choosing to
phase into retirement or return to work after retiring, and
the impediments to these choices and the ways in which
Congress could reduce these barriers. The hearing also
examined how a greater share of workers choosing to
continue working voluntarily after they have retired from
their principal job could have a modest but positive effect
on the long-term solvency of the Social Security trust
fund.
September 28, 2010--``Do Private Long-Term Disability Policies
Provide the Protection They Promise?'' This hearing
featured the testimony of Ron Leebove, C.R.C., DABFC,
Scottsdale, AZ; Mark DeBofsky, Attorney, Daley, DeBofsky
and Bryant, Chicago, IL; The Honorable William M. Aker,
Jr., Senior United States District Court Judge, Northern
District of Alabama, Birmingham, AL; David Rust, Deputy
Commissioner for Retirement and Disability Policy, Social
Security Administration, Baltimore, MD; Paul Graham, Senior
Vice President, Insurance Regulation and Chief Actuary,
American Council of Life Insurers, Washington, DC. The
hearing focused on the problems that employees experience
when filing for disability benefits under private long-term
disability insurance policies covered under the Employee
Retirement Income Security Act (ERISA). Testimony from the
Social Security Administration detailed current regulations
for Social Security which ensure a transparent disability
adjudication process, and a due process appeals hearing
before an Administrative Law Judge, if needed. Additional
testimony at the hearing revealed that these same
protections do not currently exist for private employer-
provided long-term disability benefits. While Congress
enacted ERISA with the stated intention to protect
employees, according to the witnesses, its subsequent
interpretation by the courts has complicated the claims
review process and resulted in a systemic failure of due
process protections. The witnesses described instances of
how private long-term disability insurance companies avoid
paying claims by creating long procedural delays, hiring or
paying for their own doctors as experts, and using other
unfair tactics. The witnesses also discussed the
legislative action necessary to ensure a fair process for
individuals filing for employer-provided private long-term
disability benefits.
OVERSIGHT AND INVESTIGATIONS
Overview
The Constitution granted to Congress the important
responsibility of conducting oversight of the Executive Branch.
Congressional authority to conduct oversight is both extensive
and powerful. Oversight is critically important in helping to
make government more transparent, more accountable, and more
effective for the taxpayers, program participants, and
beneficiaries. Taxpayers deserve transparency because they
finance the government. Government truly is the people's
business, and the people have a right to know what their
government is doing and how it spends their money. To this end,
Chairman Baucus and Senator Charles E. Grassley, Ranking Member
of the Committee on Finance, take seriously their
constitutional oversight responsibilities and work to keep the
Federal Government effective, transparent, and accountable.
One of the best means for achieving transparency and
accountability is through consistent Congressional oversight.
In conjunction with a curious media, the vigilance of the
public, and brave whistleblowers who speak-up about the
problems they see--Congressional oversight seeks to ensure
ethics, morality, and honesty in government. As former Supreme
Court Justice Louis D. Brandeis once said, ``Sunshine is the
best disinfectant.''
Full Committee Hearings
2009
March 17, 2009--``Tax Issues Related to Ponzi Schemes and an
Update on Offshore Tax Evasion Legislation.'' The purpose
of this hearing was to discuss options for curbing offshore
tax evasion. Testimony was received from the Honorable
Douglas Shulman, Commissioner, Internal Revenue Service,
Washington, DC; Michael Brostek, Director, Tax Issues,
Strategic Issues Team, United States Government
Accountability Office, Washington, DC; and William
Josephson, Esq., Fried, Frank, Harris, Shriver & Jacobson,
LLP, New York, NY.
March 21, 2009--``Corporate Tax Shelters: Looking Under the
Roof.'' The purpose of this hearing was to discuss tax
reform options related to corporate taxation. Testimony was
received from the Honorable Mark Weinberger, Assistant
Secretary of the Treasury for Tax Policy, United States
Department of the Treasury, Washington, DC; the Honorable
B. John Williams, Jr., Chief Counsel/Assistant General
Counsel, United States Department of Treasury, Washington,
DC; and the Honorable Larry Langdon, Commissioner of Large
and Medium Business Division, Internal Revenue Service,
Washington, DC.
March 31, 2009--``TARP Oversight: A 6-Month Update.'' The
purpose of this hearing was to discuss the Special IG's
efforts to provide transparency to and prevent fraud in the
TARP program. Testimony was received from the Honorable
Neil Barofsky, Special Inspector General for the Troubled
Asset Relief Program (SIGTARP), United States Department of
Treasury, Washington, DC; Elizabeth Warren, Chair,
Congressional Oversight Panel, Boston, MA; and Gene Dodaro,
Acting Comptroller General, United States Government
Accountability Office, Washington, DC.
2010
April 15, 2010--``Filing Season Update: Current IRS Issues.''
The purpose of this hearing was to update the committee on
the 2010 tax filing season and to discuss other matters
affecting tax administration. Testimony was received from
Steven T. Miller, Deputy Commissioner for Services and
Enforcement, Internal Revenue Service, Washington, DC; and
Nina Olson, National Taxpayer Advocate, Internal Revenue
Service, Washington, DC.
April 20, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 1.'' The purpose of this
hearing was to discuss the merits of the President's
proposal. Testimony was received from the Honorable Neil
Barofsky, Special Inspector General for the Troubled Asset
Relief Program (SIGTARP), United States Department of
Treasury, Washington, DC.
May 4, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 2.'' Testimony was
received from the Honorable Timothy Geithner, Secretary of
the Treasury, United States Department of the Treasury,
Washington, DC; the Honorable Steve Bartlett, President and
CEO, Financial Services Roundtable, Washington, DC; John K.
Sorensen, President and CEO, Iowa Bankers Association,
Johnston, IA; James Chessen, Chief Economist, American
Bankers Association, Washington, DC; and Patrick S. Baird,
Chairman, AEGON, USA, LLC, Cedar Rapids, IA.
May 11, 2010--``The President's Proposed Fee on Financial
Institutions Regarding TARP: Part 3.'' Testimony was
received from David C. John, Senior Research Fellow, The
Heritage Foundation, Washington, DC; Douglas Elliott,
Economic Studies, Brookings Institute, New York, NY; Edward
DeMarco, Acting Director, Federal Housing Finance Agency,
Washington, DC; and Nancy McLernon, President and CEO,
Organization for International Investment, Washington, DC.
May 25, 2010--``Reducing Overpayments and Increasing Quality in
the Unemployment System.'' The Finance Committee held a
hearing to highlight the need for program integrity in the
unemployment system. The hearing had three witnesses who
spoke about the need to control overpayments and fraud in
the unemployment system. The hearing focused on the need to
hold local and national government, employers, and
beneficiaries accountable for controlling waste and
increasing quality in the unemployment insurance system.
The witnesses identified areas for improvement, including
updating state administrative systems, and improving the
sharing of information between states and employers.
July 21, 2010--``An Update on the TARP Program.'' The purpose
of this hearing was to discuss continuing efforts by the
Special IG to monitor the TARP program. Testimony was
received from the Honorable Neil Barofsky, Special
Inspector General for the Troubled Asset Relief Program
(SIGTARP), United States Department of Treasury,
Washington, DC; Elizabeth Warren, Chair, Congressional
Oversight Panel, Boston, MA; Richard Hillman, Managing
Director Financial Markets and Community Investment Team,
United States Government Accountability Office, Washington,
DC.
Oversight Activities
TARP Oversight
Chairman Baucus fought to include the Special Inspector
General for TARP requirement in the Emergency Economic
Stabilization Act of 2008 to protect taxpayer interests and
guard against waste, fraud and abuse in the Treasury's
financial rescue program.
The committee held two hearings on the TARP program and the
oversight efforts of the Special IG. Both hearings were
organized around quarterly reports issued by the Special IG
Neil Barofsky.
Barofsky outlined the following requirements that he
insisted on for TARP transactions, including:
Lestablishing internal controls and reporting to
TARP on the implementation of those controls
Laccounting for the use of TARP funds and
certifying that information to the TARP
The Special IG also outlined conditions he has insisted on
for the funding provided to Citigroup by TARP, including:
Laccess by the Special IG to Citigroup personnel
and records
Lestablishing internal controls on corporate
expenses, executive compensation, and dividend and stock
repurchase conditions
Ltracking of the funds invested by TARP
During the first hearing, the Special Inspector General for
the Troubled Assets Relief Program calculated that, in the TARP
and associated programs, taxpayers were potentially at risk for
about $2.9 trillion.
The key TARP areas discussed included: the capital
investment program for large banks, the capital investment
program for small banks, Citigroup, Bank of America, A.I.G.,
the Term Asset-Backed Securities Loan Facility, or TALF, G.M.,
G.M.A.C., Chrysler, the mortgage relief program, the small
business program, and the ``bad assets'' program.
Office of Terrorism and Financial Intelligence
At the request of Chairman Baucus and Senator Grassley, the
Government Accountability Office (GAO) reported on the Treasury
Department's Office of Terrorism and Financial Intelligence
(TFI). The TFI, created in March 2004, is primarily focused on
freezing and seizing funds suspected to be used for terrorist
activities, enforcing economic sanctions against ``rogue''
nations, protecting the integrity of the financial system and
fighting financial crime. Within the TFI are the Office of
Foreign Assets Control (OFAC) and the Financial Crimes
Enforcement Network (FinCEN).
The Office of Foreign Assets Control has the power to
designate a person or organization as a sponsor of terrorism.
Subsequent to this designation, the target's assets are frozen
indefinitely and/or seized, and a request is made to the United
Nations for similar action on a world-wide basis. FinCEN uses
the Bank Secrecy Act to investigate money laundering and
counterfeiting, and issues regulations governing U.S. financial
institutions. The Office of Intelligence and Analysis within
the TFI provides information supporting OFAC's designations of
individuals and organizations.
The GAO report noted that TFI Under Secretary Levey
concluded that Al Qaida is `in its worst financial position in
at least three years'. It also described the TFI applying
lessons learned from using financial tools in the terrorism
context to advance counter proliferation finance strategy to
isolate banks, companies and individuals with ties to North
Korean, Iranian and Syrian proliferation. The report expressed
concern about declining collaboration between the Treasury
Department and the State and Justice Departments on terrorism
financing issues, and the GAO found that the TFI is at a
competitive disadvantage in hiring intelligence analysts. The
Chairman also expressed concern that OFAC continued to spend an
inordinate amount of resources enforcing the embargo with Cuba,
despite the national security imperative of enforcing the U.S.
embargos with North Korea and Iran.
Indian Health Service Payment Collection
Chairman Baucus requested a GAO report on the Indian Health
Service's payment collection process. The GAO found that the
IHS did not have adequate procedures in place to maximize its
collection of payments owed to the agency by private insurers.
Chairman Baucus requested that GAO conduct the report as part
of an ongoing effort to improve IHS collection from private
insurers, which could free up resources to improve health care
for Native Americans and Alaskan Natives.
According to the report, IHS does have procedures in place
for billing and collecting revenue from private insurers, but
those procedures are not in line with the agency's current
financial management system, making it difficult to maximize
collection of payments.
In discussions with IHS offices, GAO found that none had
well-defined debt management plans to enhance collections and
that IHS headquarters did not properly oversee its Area and
Service Unit offices. Additionally, the Office of Resource
Access and Partnerships, whose responsibility it is to perform
policy compliance reviews, was understaffed.
Among its recommendations, GAO called for IHS to develop
tools for managing and monitoring its business cycle, including
payment collection and debt management.
IHS took steps to ensure the accuracy of its reports and
debt management procedures by increasing its oversight
capabilities, implementing a new web-based monitoring service
and giving direct line authority to a new position entitled the
Deputy Director of Field Operations.
Premium Increases at Wellpoint
In February 2010 Chairman Baucus and Senator Grassley sent
a letter calling on WellPoint's CEO to explain the company's
proposed health insurance rate increases after it was reported
that increases of up to 39% were planned. In April, an
independent actuarial report identified troubling
miscalculations by WellPoint and raised serious concerns about
the assumptions the company used to support its rate increases.
Medicare payments of $2.5 billion recovered
Chairman Max Baucus commented on a report released by the
Health Care Fraud and Abuse Control Program, a program within
the Department of Health and Human Services that funds efforts
to prevent health care fraud, waste and abuse, including
prevention, audits and investigations. The program's report
indicated that $2.5 billion in Medicare overpayments were
recovered in 2009 and can be returned to the Medicare trust
fund.
Tax Practices of Gulf Oil Rig Owner
Chairman Baucus conducted an investigation into the tax
practices of Transocean Ltd., owner of the offshore drilling
rig that exploded in the Gulf of Mexico in April of 2010
leading to a disastrous oil spill. Chairman Baucus continues to
examine U.S. tax implications resulting from Transocean
relocating its headquarters to the Cayman Islands and
Switzerland.
Transocean moved its headquarters to the Cayman Islands in
1999 then relocated the headquarters to Switzerland. Baucus led
the fight in the Senate to shut down this practice, known as
corporate inversion, and successfully passed the American Jobs
Creation Act of 2004, which closed loopholes in the tax code
that made corporate inversion possible.
Baucus sent a letter calling on Transocean to provide
detailed documents and explanations relating to the company's
tax practices. This information was requested to help the
Finance Committee discern the tax benefits Transocean received
by exploiting the loopholes closed by the American Jobs
Creation Act of 2004 and to determine whether further
legislative action is necessary to prevent erosion of the U.S.
tax base through corporate inversions.
The Transocean investigation is part of a longstanding
committee effort to fight offshore tax avoidance and evasion,
which deprive American taxpayers of thousands of jobs and
billions of dollars.
Involvement of Tax-Exempt Groups in Political Activity
In September of 2010 Chairman Baucus sent a letter to IRS
Commissioner Doug Shulman requesting an investigation into the
use of tax-exempt groups for political advocacy. Baucus asked
for the investigation after recent media reports uncovered
instances of political activity by non-profit organizations
secretly backed by individuals advancing personal interests and
organizations supporting political campaigns. Under the tax
code, political campaign activity cannot be the main purpose of
a tax-exempt organization and limits exist on political
campaign activities in which these organizations can
participate. Tax-exempt organizations also cannot serve private
interests. Baucus expressed serious concern that if political
groups are able to take advantage of tax-exempt organizations,
these groups could curtail transparency in America's elections
because non-profit organizations do not have to disclose any
information regarding their donors.
Baucus asked Commissioner Shulman to review major
501(c)(4), (c)(5) and (c)(6) organizations involved in
political campaign activity. He asked the Commissioner to
determine if these organizations are operating for the
organization's intended tax exempt purpose, to ensure that
political activity is not the organization's primary activity
and to determine if they are acting as conduits for major
donors advancing their own private interests regarding
legislation or political campaigns, or are providing major
donors with excess benefits.
Bulk Cash Smuggling
Chairman Max Baucus and Finance Committee member Senator
Jeff Bingaman requested a report by the Government
Accountability Office (GAO) on the problem of cross-border
currency smuggling. The Senators asked the GAO to examine the
problem of currency smuggling--the transportation of bulk cash
proceeds from drug sales in the United States to Mexico or
Canada. In GAO's subsequent report, the National Drug
Intelligence Center estimated that criminals smuggle between
$18 billion to $39 billion each year across the southwest
border alone.
The report found that since March 2009, when the Secretary
of Homeland Security called on Customs and Border Protection
(CBP) to step up efforts to stem the flow of bulk cash, through
June 2010, CBP agents seized about $41 million in illicit bulk
cash leaving our country at land ports of entry. While this
represents a significant increase in seizures compared to
previous years, because CBP currently does not conduct full-
time inspections of outbound traffic, shortcomings in our
nation's infrastructure, and a lack of technology deployed at
ports of entry, only a fraction of the illicit cash flow is
seized.
The report also pointed to emerging money laundering
concerns, made possible by advancing technology. For instance,
it highlighted the problem of using ``stored value cards''--
prepaid cards loaded with value or currency--to move illegal
proceeds across the border and to countries around the world.
It also pointed to the ability of making monetary transactions
via mobile phone technology. The report explored various
regulatory gaps under federal anti-money laundering laws that
allow criminals to move funds without detection and reviews
efforts to address this issue.
The Senators pledged to work to keep resources flowing to
the CBP bulk cash seizure program and to support efforts to
make the program more effective.
Department of Health and Human Services
Abuse of Mental Health Prescriptions
Documents provided by the Florida Agency for Health Care
Administration list the top Medicaid prescribers of mental
health drugs. One Medicaid prescriber wrote 96,685
prescriptions for the second half of 2007, all of 2008 and
first quarter of 2009. This is 153 prescriptions each day. The
committee asked: (1) whether HHS has a system in place to
monitor this activity, (2) whether any investigations have been
conducted and what the outcomes were, and (3) what information
States share with the HHS regarding any overutilization.
HHS responded that Florida Medicaid has been scrutinizing
billings for problem providers for quite some time, and
provided documentation to that affect. Further HHS pointed out
that in the Presidents fiscal year 2011 Budget new resources
were authorized to more aggressively pursue inappropriate
prescribing practices of providers in both Medicare and
Medicaid.
On October 20, 2010, Senator Grassley responded to HHS
Secretary Sebelius' letter as well as the information provided
by HHS in reply to previous letters. This letter addressed two
major topics: The March 15, 2010 HHS Letter Regarding
Overutilization and State Medicaid Data Regarding
Overutilization. The letter also requested, among other things,
details of guidelines HHS gives contractors and how the agency
ensures that they are conducting complete analyses of Medicare
and Medicaid data. The committee is awaiting the agency's
response.
Health Information Technology
In the 111th Congress, Senator Grassley sent letters to
Health Information Technology (HIT) manufacturers in response
to complaints from patients and medical practitioners regarding
difficulties they encountered with HIT use and implementation
in medical facilities. In October 2009, letters were sent to
3M, Allscripts, Cerner Corporation, Cognizant Technology
Solutions, Computer Sciences Corporation, Eclipsys, Epic
Systems Corporation, McKesson Corporation, Perot Systems
Corporation, and Philips Healthcare. In January 2010, the
Senator also sent letters to 31 letters to hospitals to gather
information on their perspective and experiences with HIT.
Review of the responses is ongoing.
In February 2010, Senator Grassley also sent a letter to
the HHS expressing his concerns regarding safety issues
associated with HIT. The Senator asked what HHS was doing to
address potential safety concerns and inquired about the role
FDA should play in the review of HIT devices. In response, HHS
stated that it shared his concerns and reiterated its
commitment to making sure that HIT is safe.
Federal Health Information Technology Programs
In the 109th Congress, the Government Accountability Office
(GAO) issued two reports requested by Senator Grassley on
information technology at HHS. The first GAO audit examined
concerns regarding the coordination of funding and oversight
for information technology projects within HHS at the
Department level. The second audit requested an assessment of
information technology programs at CMS. Senator Grassley has
also been concerned about the Food and Drug Administration's
(FDA) Adverse Events Reporting System, FDA's post-marketing
safety surveillance program for all approved drugs and biologic
products. In the 110th Congress, Senator Grassley and Chairman
Baucus asked the HHS Office of Inspector General to examine the
management and contracting practices of the Office of
Information Technology within FDA's Center for Drug Evaluation
and Research. In the 111th Congress, Senator Grassley asked the
HHS Secretary to increase the level of communication between
the various systems between agencies within the Department.
H1N1 Storage and Potency
Responding to questions raised by patients and some health
care providers regarding the safety, potency, and efficacy of
the H1N1 vaccine, Senator Grassley sent a letter to HHS, FDA,
and the Centers for Disease Control and Prevention in January
2010, asking them to respond to a number of questions on how
they were addressing these issues. In particular, Senator
Grassley asked about the shelf life of the 2009 H1N1 influenza
virus vaccines, how many doses of the vaccine had been
purchased by HHS, any additional findings regarding the adverse
event profiles of the vaccines, and what oversight was in place
to ensure that the individuals and entities authorized to
manufacture, distribute and/or administer the vaccines do so as
intended and as legally authorized.
HHS responded to the Senator's letter by illustrating the
steps and precautions that the agency has taken to ensure the
safety, potency, and efficacy of the vaccine. In May 2010, the
Senator sent a follow-up request to HHS regarding his concerns
that a number of the doses may be nearing the end of their
shelf life and may have to be destroyed, wasting the taxpayer
money that was used to secure them. The Senator also inquired
about HHS's plans for the 2010 flu season. HHS responded on May
11, 2010 stating that about 40 million doses would expire on
June 30, 2010. The agency also stated that it would monitor
demand for the remaining supply. For the 2010-2011 flu season,
protection against the H1N1 flu virus was included in the
seasonal flu vaccine rather than administered separately. In
addition, HHS reported that less fiscal year 2009 supplemental
funding was needed than projected for the purchase of H1N1
vaccines so the balance of that funding would be used to
support future preparedness activities.
``State Your Support'' Link on HHS Website
On the HHS.GOV website is a link titled, ``State Your
Support.'' This link takes the visitor to the HEALTHREFORM.GOV
website, which indicates that it is ``an official U.S.
Government website managed by the U.S. Department of Health and
Human Services.'' The visitor is presented with a pre-written
letter to the President in support of enactment of reform in
2009. By signing the statement, visitors affirm their
commitment to work with the President and their Congressional
leaders ``to enact legislation this year which provides
affordable, high quality coverage for all Americans.'' Also, in
order to ``show their support,'' visitors are required to
submit their names, zip codes and email addresses.
On October 20, 2009, Senator Grassley asked whose idea this
was, who gave the instructions to include it on the HHS.GOV
website, who paid for the implementation and upkeep of this
website, what role did the White House have in creating this
website, where is the personal information stored, who has
access to this information, has anyone been given access to the
information and have any of the visitors been contacted?
The Department of Health and Human Services (HHS) responded
that current law states that the government is prohibited from
covertly producing materials for public dissemination that hide
any evidence of government involvement. HHS says since the link
was prominently displayed it is not secretive so therefore
nothing improper was done. HHS did not respond to the question
of what they did with the stored names, zip codes, and email
information.
Food and Drug Administration
Foreign Inspections and Heparin
In August 2007, Senator Grassley focused attention on the
Food and Drug Administration's (FDA) ability to ensure the
safety of foreign-manufactured pharmaceuticals, in particular
the inadequacy of the Agency's inspections of foreign
pharmaceutical manufacturing facilities. Senator Grassley
sought information on what inspection measures the FDA has in
place and how it intends to improve its operations in the
future. Based on the FDA's response, Senator Grassley learned
of further concerning issues regarding the safety of foreign-
based manufacturing facilities. Specifically, while China
remains the world's largest producer of active pharmaceutical
ingredients, the FDA conducted a mere 11 inspections of Chinese
manufacturing facilities in 2007. Meanwhile, the FDA conducted
58 inspections of already highly-regulated Swiss, German and
French manufacturing facilities during the same time period.
This seeming misplacement of the FDA's limited resources led
Senator Grassley to suggest the implementation of registration
fees for pharmaceutical manufacturers. According to the
Senator, such a fee, which would mimic the existing scheme
already in place for foreign device manufacturers, would
augment FDA's budget and help pay for more comprehensive
foreign inspections.
The discovery of contaminated heparin, a blood thinning
drug, in early 2008 raised concerns about the FDA's inspection
capabilities. According to the FDA, the Chinese facility that
produced the tainted heparin was supposed to be inspected, but
because of ``human error and inadequate information technology
systems,'' it was not. Senator Grassley wrote a letter to the
FDA to find out how such an oversight could have happened, and
inquired from the U.S. heparin producer about its own
inspection activities of their foreign counterparts.
FDA identified additional vulnerabilities, such as its lack
of foreign language speaking inspectors which leaves the agency
reliant on translators provided by the very facility being
inspected. Taken as a whole, Senator Grassley remains troubled
that the agency charged with ensuring the safety and efficacy
of America's pharmaceuticals is grossly under-resourced at a
time when foreign production of drugs is growing at record
rates.
This concern led the Senator to join his colleagues in
requesting the Government Accountability Office audit of the
FDA's foreign inspections operations. The resulting report
concluded that: (1) the FDA databases containing information on
foreign pharmaceutical manufacturers are incomplete and
inaccurate, (2) the FDA inspects a far smaller percentage of
foreign facilities than it does U.S. facilities, and (3) while
the FDA has issued notices of deficiencies to foreign
facilities, its follow-up to determine their continued
compliance is not always done in a timely manner.
In addition, the Senator co-sponsored a bill, the Drug and
Device Accountability Act, with the late Senator Edward M.
Kennedy to enhance registration and inspection of domestic and
foreign manufacturing facilities.
In response to the heparin contamination, the FDA opened
field offices in China, India and Latin America, and announced
that it would pursue international agreements to augment its
foreign inspection program. In February 2010, Senator Grassley
sent a follow-up to the FDA asking that the agency provide a
status on FDA's initiatives to improve its foreign drug
inspection program. FDA responded with examples of some of its
efforts, including improving testing methods to ensure drug
purity, switching to an electronic drug registration and
listing system, and examining over 1,000 active pharmaceutical
ingredients (API) to identify API at greater risk of being
adulterated.
The findings regarding FDA's inspection program, however,
remain troubling. In the 112th Congress, the Senator will work
to get legislation passed that would bolster FDA's ability to
protect the safety of the U.S. drug and medical device supply.
Unapproved Drugs
Throughout the 111th Congress, Senator Grassley continued
his inquiry into reports that thousands of prescription drugs
sold in the United States contain active ingredients that are
not approved by FDA. While FDA recognized its gravity, the
situation highlighted weaknesses in communication and
coordination between the FDA, which approves prescription drugs
for marketing to the American public, and the Centers for
Medicare and Medicaid Services (CMS), which pays billions of
dollars per year for prescription drugs under the Medicare and
Medicaid programs. Unapproved drugs may pose heightened risks
to consumers because their safety, efficacy, labeling, and
quality have not been reviewed by FDA. Furthermore, the
continued prescribing of, and reimbursement by CMS for such
unapproved drugs wastes taxpayer money and may potentially harm
patients. The Senator is concerned not only about the safety of
these unapproved drugs, but also by the breakdown in
communication between the agencies that may have led to
millions in over-reimbursement by the Federal Government.
The Senator sent several letters to CMS and FDA in his
attempt to better understand why drugs that have not been
reviewed by FDA continue to be covered by Medicare and/or
Medicaid. He continues to ask why FDA has not compiled a
working list of unapproved drugs that could be made available
to the public. In addition, Senator Grassley has raised
questions about CMS's Medicaid state drug utilization database,
which summarizes drug use and reimbursement by state. While CMS
warned that the database cannot be relied upon due to its
dynamic nature and because CMS does not audit the information
that is submitted by individual states, the database remains
available to the public without any disclosure of its potential
inaccuracies.
In the 111th Congress, Senator Grassley introduced the
``Strengthening Program Integrity and Accountability in Health
Care Act,'' which would require, among other things, that
states first verify with the FDA that a drug has been approved
for marketing before paying for it. The Senator plans to re-
introduce the bill in the 112th Congress.
Menaflex and CDRH
In 2009, Senator Grassley obtained documents that suggested
FDA's handling of the review of the Collagen Scaffold, a knee
repair device now called Menaflex, may have been influenced by
the manufacturer, ReGen Biologics, Inc. (ReGen). The Senator's
Committee on Finance staff conducted numerous interviews with
FDA officials regarding FDA's review of this device. In the
course of the inquiry, it was discovered that ReGen may not
have provided complete information to the FDA for purposes of
the 510(k) review of its product.
In September 2009, FDA reported problems in the agency's
review of Menaflex and announced that it would conduct a re-
evaluation of the scientific evidence. The findings about how
FDA handled the review of Menaflex tracked what Senator
Grassley had found in his own review. The agency failed to
follow procedures, excluded the FDA review team from speaking
before an advisory panel, and was too quick to accommodate
demands made by the device manufacturer. On October 14, 2010,
FDA announced that Menaflex should not have been cleared for
marketing in the United States.
In August 2009, CMS initiated a national coverage
determination for Menaflex to decide if the device should be
covered by Medicare. Senator Grassley had shared some of his
findings regarding the review of that device with CMS. CMS
determined that as of May 25, 2010, ``evidence was adequate to
conclude that the collagen meniscus implant does not improve
health outcomes and, therefore, is not reasonable and necessary
for the treatment of meniscal injury/tear under section
1862(a)(1)(A) of the Social Security Act. Thus, the collagen
meniscus implant is non-covered by Medicare.''
In addition, as a result of this matter and other
allegations the Senator received regarding FDA's Center for
Devices and Radiological Health (CDRH), Senator Grassley asked
the Government Accountability Office (GAO) to conduct a review
of CDRH procedures for approving and clearing medical devices
for marketing in the U.S.
FDA Office of Criminal Investigations
The Food and Drug Administration's Office of Criminal
Investigations (OCI) was created in 1992 to conduct and
coordinate investigations of suspected criminal violations of
the Federal Food, Drug, and Cosmetic Act, and other laws
enforced by the FDA. After receiving complaints regarding the
improper removal of an FDA safety officer, Senator Grassley
identified concerns regarding the operation and activities of
OCI. The complaints were received from various sources alleging
that, at times, OCI used improper investigative techniques,
including abusive tactics.
The Senator asked GAO to perform an audit of OCI's budget
and activities and to review OCI's investigative standards and
techniques.
In January 2010, the GAO provided a preliminary report to
Senator Grassley detailing its findings regarding OCI; shortly
thereafter, a briefing was held with FDA discussing a number of
recommendations for improving OCI.
dETlogix Annuloplasty Ring and 510(k) Submissions for Modifications to
Devices on the U.S. Market
Senator Grassley sent a letter to the FDA on December 18,
2008, regarding the marketing and use of the dETlogix
Annuloplasty Ring, formerly called the Myxo ETlogix ring. The
ring was being implanted in patients for heart-valve repair
before it was cleared for marketing by the FDA. The FDA told
Senator Grassley that its current policy was inadequate and
that an update was underway. In February 2010, the Senator
asked FDA for an update on the implementation of new guidelines
for medical device makers on when they need to file new
information with the agency and seek clearance for the
marketing and use of modified devices under the 510(k) system.
The FDA responded that it considers this policy a high priority
and plans to complete the clarification within the year.
Senator Grassley was concerned with the lack of
transparency about when modifications to a device already
cleared for marketing would require a new 510(k) submission.
Based on FDA's existing guidelines, if a device maker believes
a change to its device is insignificant, it can make the
determination that its device does not require a new 510(k)
submission. In the case of the dETlogix ring, however, FDA
concluded that the company made the incorrect determination,
when the agency was informed of the device 2 years after it had
already been in use.
Senator Grassley asked FDA if the agency would be informing
patients that they had been implanted with the device before it
was cleared. The FDA responded that it did not require patients
who had the dETlogix ring implanted be notified since the FDA
ultimately cleared the device for marketing.
Conflicts of Interest (Clinical Investigators)
On October 22, 2010, Senator Grassley sent a letter to FDA
Commissioner Margaret Hamburg inquiring about FDA's policies
and procedures regarding the financial relationship between
clinical investigators and product manufacturers. In
particular, the Senator was interested in how the agency
handles reports of medical device companies' payments to
physicians who participate in clinical studies of the
companies' products. In 2006, the Association of American
Medical Colleges (AAMC) and Association of American
Universities (AAU) asked an advisory committee of senior
officials at major research universities and medical schools to
review 2001 AAMC issued guidelines governing the oversight of
financial interests in human subjects research and provide
further guidance on the subject. In February 2008, the advisory
committee issued its report, which reiterated the 2001
rebuttable presumption that an individual who holds a
significant financial interest in research involving human
subjects may not conduct such research and clarified the
compelling circumstances exception. In light of the
recommendations presented this 2008 report, Senator Grassley
asked the FDA to explain how it treats financial interests that
may present a conflict of interest for clinical researchers and
describe guidance provided to product manufacturers to minimize
and manage potential conflicts.
Erythropoiesis-Stimulating Agents (ESA)
The developments surrounding erythropoiesis-stimulating
agents (ESAs) underscored Senator Grassley's ongoing concern
over the need for greater transparency in the financial
relationships between drug makers and doctors. According to a
government report, the Medicare system had created incentives
for using more doses of ESAs than what are necessary for the
treatment of anemia. Press reports described how doctors were
profiting through rebates and discounts they received from
purchasing ESAs from pharmaceutical companies and then
collecting payments from Medicare and private insurers, often
above the price they paid for the drugs. An FDA advisory
committee recommended new restrictions on prescribing
information for ESAs. As a result, the drug labeling for ESAs
was revised to restrict their use in treating patients with
cancer. In addition, CMS modified its coverage policies to
limit Medicare reimbursement for ESAs. Congress also passed
legislation that requires that the costs of ESAs be bundled
into payments for all other dialysis-related services rather
than be reimbursed separately starting 2011.
As part of his inquiry, Senator Grassley sent letters to
CMS, FDA, Amgen Inc., Johnson & Johnson, and Ortho Biotech. In
addition to requesting information on the payment for, and
safety and use of ESAs, the Senator asked the FDA to identify
any new tools it might need to gain access to necessary
information from drug makers. CMS and FDA have public meetings
scheduled to further discuss safety of ESAs.
In 2010, FDA called for more clinical trials to establish
the optimal hemoglobin target for use of ESAs in treating
anemia in patients with chronic kidney disease (CKD). On
October 18, 2010, the FDA convened an advisory committee for
advice on the appropriate use of ESAs for patients with CKD, in
light of concerns about whether the drugs increase risks of
strokes and other cardiovascular problems.
In June 2010, CMS also opened a national coverage
determination (NCD) analysis on ESA use for the treatment of
anemia for patients with CKD. A proposed decision will be
issued by March 16, 2011 and a final decision is expected by
June 16, 2011.
PolyHeme
In the 109th Congress, the committee led an inquiry into
the FDA's handling of a large clinical trial for PolyHeme, a
synthetic blood substitute that was being tested in major
metropolitan areas across the country. Unconscious trauma
patients were given PolyHeme in the ambulance, where real blood
was not available, and afterward in the hospital, when real
blood became available. The Food and Drug Administration allows
an experimental product to be given to patients without prior
informed consent if a study meets the requirements for
emergency research. Thus, those who did not want to be subjects
in the PolyHeme experiment had to opt out by wearing hospital-
like bracelets to convey their wishes to medical professionals.
Northfield Laboratories Inc. presented the results of its
study in 2007 and sought FDA approval for its product. On April
30, 2009, the FDA issued a complete response letter to
Northfield, communicating to the company that in its present
form, FDA will not approve the company's application to market
PolyHeme.
In August 2010, the American Journal of Bioethics invited
Senator Grassley to submit an op-ed regarding the PolyHeme
matter for the journal's 10th Anniversary edition. Senator
Grassley's op-ed titled, ``Americans Should Not Be on a Game
Show in U.S. Emergency Rooms and Ambulances,'' was published in
October 2010.
Accuracy of Glucometers
Nearly 24 million Americans have Type 2 diabetes and rely
on self-monitoring devices to control their blood-glucose
levels. The Centers for Medicare and Medicaid Services
reimburses nearly $1.3 billion every year for diabetic
supplies. Recent findings by Consumer Reports found that some
glucometers are inaccurate and inconsistent. The American
Association of Clinical Endocrinologists (AACE) wrote to the
FDA regarding the accuracy standards set by the agency. In
light of these concerns Senator Grassley asked for a briefing
by FDA regarding any complaints concerning glucometers and/or
test strips, when the agency first became aware of any problems
and its concerns regarding the reliability of the glucometers.
FDA informed the Senator that the United States is one of a
few countries in the world that reviews the performance of in
vitro diagnostic devices before they can be marketed. The
standards for the way glucometer performance is established are
set forth in the International Standard Organization (ISO)
document 15197 titled, ``In vitro diagnostic test systems-
Requirements for blood-glucose monitoring systems for self-
testing in managing diabetes mellitus.'' FDA stated that the
document was drafted 7 years ago. At that time, FDA had argued
in support of stricter criteria and even considered voting
against the standard but ``determined that we needed to balance
our recommendations with those from the international community
and the available scientific evidence to support the
recommendation.'' When FDA briefed Senator Grassley's staff,
the agency stated that ISO 15197 was being reviewed to
determine if revisions were necessary. The agency added that it
was recommending the revision of the current standards of
accuracy in light of new technological advancements.
Furthermore, FDA also said that if the ISO standard for
accuracy is not revised, it would consider recognizing other
higher performance standards for glucometers.
Gardasil
In response to a study conducted by the National Research
Center for Women and families (NRC), Senator Grassley became
concerned that young girls and their parents and women who have
received Gardasil may have a false sense of security about the
extent of protection provided by Gardasil under the current
three-dose regimen. Gardasil is used to combat the HPV virus
that can lead to cervical, penile, and anal cancer. Senator
Grassley asked that studies be conducted by the FDA to further
examine the long-term efficacy of Gardasil vaccination and the
possibility that a booster shot may be needed. In its response,
the FDA stated that the manufacturer of Gardasil is continuing
to study the long-term effectiveness of the drug, but that at
this time, there is no data that supports the need for a
booster shot.
Centers for Medicare and Medicaid Services
Medicare Pays Dead Doctors
Following a report in the New York Times that Medicare had
been paying out tens of millions of dollars to suppliers who
were improperly using identification numbers of doctors who
were dead, Senator Grassley asked the Department of Health and
Human Services (HHS), the Centers for Medicare and Medicaid
Services (CMS), and the HHS Office of Inspector General (OIG) a
series of questions regarding how they were addressing that
issue. The request included statistics concerning the Medicare
Fraud Hotline. HHS responded to the request, detailing a number
of steps the agency has taken and is planning to take in order
to mitigate this problem. It also provided a chart regarding
the calls the OIG hotline has received over the last 2 years.
Home Health Agencies
Senator Grassley has long been concerned with the quality
of home health care. According to a 2006 report released by the
Medicare Payment Advisory Commission (MedPAC), spending on home
health care grew more than 10% the prior year, and that 70% of
new home health providers were concentrated in Florida and
Texas. Such increases in both spending and the number of
facilities raised questions by the Senator about the quality of
care being provided and the transparency of reimbursements made
by Medicare and Medicaid. Accordingly, Senator Grassley
requested that the Government Accountability Office (GAO)
conduct a review of home health care to address the oversight
and accountability of providers, the transparency of Medicare
reimbursements, and the extent of home health compliance
programs. On February 27, 2009, GAO released its report and
issued four recommendations to CMS to help improve the agency's
oversight in this area.
Fire Safety in Nursing Homes
In the 111th Congress, Senator Grassley continued his
vigorous oversight of the nursing home industry to ensure that
Medicaid and Medicare beneficiaries receive the quality of care
that they deserve. The Senator also continued to monitor CMS's
efforts to address fire safety issues identified by the GAO.
Following the Senator's involvement, CMS issued a new
regulation requiring nursing homes to install smoke detectors
in patient rooms and public areas of nursing homes that do not
have sprinkler systems or hardwired smoke detection systems.
CMS has taken additional steps to address other GAO
recommendations.
Physician-Owned Hospitals
Following the death of a patient in a physician-owned
hospital in Colorado, Senators Baucus and Grassley sent a
letter to CMS requesting the agency to keep them apprised of
the investigation into the patient's death. CMS responded that
the State of Colorado investigated and determined that the
hospital was out of compliance with five Medicare Hospital
Conditions of Participation. The hospital was ordered to
immediately suspend all surgical services and all new
admissions.
Phantom Pharmacies
A private insurer contacted Senator Grassley to report its
concerns over the lack of responsiveness from CMS to the
insurer's attempts to communicate information regarding phantom
pharmacies defrauding Medicare. The insurer provided to the
committee information about pharmacies that did not exist or
had no customers that may have been billing Medicare for
millions of dollars. Senator Grassley asked HHS the following
questions: (1) describe in detail how HHS interacts with
private insurers who report cases of possible health care
fraud; (2) specify whether or not HHS has a formal system in
place to deal with private insurers reporting allegations of
fraud; (3) explain the lack of responsiveness by CMS; and (4)
describe any changes being made to ensure that CMS is taking
allegations of fraud from insurers seriously.
HHS responded on June 18, 2010, that the eight pharmacies
alleged to be conducting fraud are presently under
investigation. For that reason, HHS declined to provide further
information to the committee.
Management Implication Reports (MIRs)
Since 2006 the Committee on Finance has requested 35
Management Implication Reports (MIRs) from CMS. A MIR is a
document the HHS OIG produces, identifying systematic
weaknesses or vulnerabilities in Federal programs to fraud,
waste or abuse, and recommending ways to correct or minimize
them. CMS responded to nine, was unresponsive to three,
provided no response to 21 and had two with responses that were
not yet due. Senator Grassley requested information as to why
not all requested information was provided, wanted a timeline
committing CMS to when they would respond and wanted a
commitment that CMS will respond to all future MIRs within a
60-day timeline.
The Secretary of Health and Human Services, Kathleen
Sebelius, responded that CMS is establishing a formal agency-
wide process to track the MIRs and ensure that the Agency
remains responsive to concerns expressed by the OIG. In January
2010, Senator Grassley introduced S. 2964, Strengthening
Program Integrity and Accountability Act, which included a
requirement that OIG inform Congress when it transmits MIRs to
CMS and a requirement that CMS respond to OIG within 90 days.
Effectiveness of Quality Improvement Organizations
The committee started receiving allegations in 2005
concerning the integrity, effectiveness and administration of
various state and regional Quality Improvement Organizations
(QIO). In addition to allegations at the individual QIOs, the
committee also received allegations concerning problems with
the Federal officials tasked with overseeing QIOs. Senators
Baucus and Grassley requested information from CMS, the
American Health Quality Association, and various state and
regional QIOs on a broad range of matters. Senator Grassley
also requested that GAO and HHS OIG evaluate the fiscal
integrity, beneficiary complaint process, and quality of
nursing home care of QIOs.
The HHS OIG conducted nine audits of QIOs across the
country, and found problems such as conflicts of interest,
lavish severance packages, and improper travel, among other
things.
In addition, GAO determined that the Defense Contract Audit
Agency (DCAA) did not meet the Generally Accepted Government
Auditing Standards (GAGAS) for the 37 audit reports the GAO
reviewed. The Senator followed up his initial letter to CMS
with a question on how it can accept the QIO findings that DCAA
submitted given that DCAA did not meet the GAGAS.
On October 2, 2009, CMS responded by saying it has been
using DCAA since 1998, when OIG and DCAA entered into a
Memorandum of Understanding (MOU). Under the MOU, DCAA performs
a defined set of priced audits to support the QIO program.
Every year, the OIG and CMS have executed an Inter-Agency
Agreement that authorizes the DCAA to perform audits for the
QIOs. The DCAA issues a copy of all QIO audits to the OIG
External Audit Center in Kansas City, which reviews these audit
reports under the MOU.
On May 28, 2010, Senator Grassley sent a follow-up letter
to CMS asking why it continues to use DCAA in light of GAO's
concerns. He asked what other entity within CMS uses DCAA and
what independent validation and verification is being conducted
by CMS to ensure that its audits are accurate and
representative of the QIOs.
CMS responded on July 18, 2010 by explaining that DCAA is
the primary cost-audit entity across the entire Federal
Government. However, in light of all the recent GAO findings,
CMS is reassessing whether to continue using DCAA.
Group Purchasing Organizations
Since group purchasing organizations (GPO) play a role in
the cost and availability of drugs, medical devices, and
medical supplies, Senator Grassley, in conjunction with the
Special Committee on Aging and the Subcommittee on Antitrust,
Competition Policy, and Consumer Rights, sent letters to
Amerinet, Broadlane, Consorta, MedAssets, Novation, Premier,
and HealthTrust Purchasing Group inquiring about their policies
and practices. He also asked that GAO examine the impact of
GPOs' codes of conduct on GPO contracting practices, contract
administrative fees, potential conflicts of interest, and the
transparency and accountability of GPO business practices.
In 1986, Congress passed legislation that provided a
statutory safe harbor for GPOs under the Anti-Kickback Statute,
42 U.S.C. 1320a-7b. This safe harbor allows GPOs to receive
fees from manufacturers without violating antitrust and anti-
kickback laws. The purpose of GPOs is to contain health care
costs and save money for hospitals and other health care
providers by negotiating better prices with manufacturers. The
question of interest to the committee was whether or not GPOs
successfully achieve that purpose, since GPO activities have
implications for Federal health care spending. In addition, it
is the responsibility of the committee to conduct oversight
into entities and activities that could affect the quality of
care received by Medicare and Medicaid beneficiaries. GPOs
determine what medical products are on GPO contracts for
purchase by GPO hospitals and other members and customers.
Thus, they play a significant role in the availability and cost
of the medical products to their members and customers, which
in turn can impact the quality of care delivered to Medicare
and Medicaid beneficiaries.
In September 2010, the Senator released a Minority staff
report on GPOs. The findings in that report are based on (1) a
review of documents provided to the committee by the seven
GPOs; (2) a review of publications the staff received and
collected through literature searches; (3) a review of GAO and
HHS OIG reports on GPOs; and (4) interviews with device
companies, distributors, trade associations, and attorneys
examining group purchasing practices. The report concluded that
there is limited data available on whether GPOs achieve cost
savings. The report recommended that Congress consider
legislation to provide HHS OIG with greater oversight authority
so that HHS OIG could conduct an independent analysis and
assess the true value provided by GPOs to hospitals, Medicare,
and Medicaid.
CERT
Senator Grassley scrutinized improper payment rate
estimates involving claims submitted to Medicare. Improper
payments cost American taxpayers billions of dollars per year.
Estimates are calculated by CMS's Comprehensive Error Rate
Testing (CERT) program, and are reported annually to Congress.
In 2008, the Senator received allegations that CMS did not
conduct appropriate medical record reviews when it calculated
its 2006 error rate for durable medical equipment (DME) claims.
In response, the Senator requested the HHS OIG investigate
CERT and re-examine the DME error rate. The OIG determined that
the DME error rate was not 7.5%, as originally reported to
Congress. Instead it was closer to 30%. According to the
report, CMS may have deliberately instructed its CERT
contractor to undertake a limited review of the available data
from suppliers rather than the full medical records from
physicians. This deviation from CERT policy may have resulted
in the much lower estimate of the error rate, specifically for
DME.
Senator Grassley asked the HHS OIG to expand its inquiry to
examine the methodology used to determine the 2007 DME error
rate and to investigate who at CMS directed the contractor,
AdvanceMed, to deviate from the established policies. The
Senator also requested a 5-year review of all contracts between
CMS and AdvanceMed, which allegedly received $5 million for its
work on CERT. The OIG audited the 2008 error rate and found
that the similar error reporting problems continued.
In November 2009, HHS announced that CMS had revised and
improved its calculations of Medicare fee-for-service (FFS)
error rates in 2009 to reflect a more complete accounting of
Medicare's improper payments than in past years. In December
2009, Senator Grassley sent a letter to HHS and CMS expressing
his continued concerns that CMS had not released its detailed
2009 CERT report or the 2008 report with a breakdown of error
rates by provider types. In November 2010, CMS reported the
annual Medicare FFS error rate without the breakdowns. The
agency stated that the detailed report would be released
publicly at a later date, although officials informed Congress
that rates remained high, for example, more than 70% for
durable medical equipment claims.
Zone Program Integrity Contractors and Program Safeguard Contractors
Zone Program Integrity Contractors (ZPIC) and Program
Safeguard Contractors (PSC) are tasked with providing Medicare
benefit integrity functions for CMS, such as conducting fraud
investigations, referring suspected fraud to law enforcement,
and performing data analysis to identify trends and billing
patterns that indicate fraudulent billing.
HHS OIG found in 2007 that PSCs failed to adequately open
new investigations or refer cases to law enforcement. There
were a number of allegations regarding the effectiveness,
performance, and operation of the ZPICs and the PSCs. Senator
Grassley asked CMS about the fees, including awards and
bonuses, paid to ZPICs and PSCs as well as the number of fraud
referrals made to law enforcement.
In its response, CMS stated it does not pay awards and
bonuses based on contractor performance. CMS referred 384 cases
to law enforcement in 2006, 444 in 2007, 574 in 2008 and 560
for the first ten months of 2009. Additionally, it has received
5,894 requests for assistance from law enforcement from January
2008 to October 2009.
On August 5, 2010, Senator Grassley sent a follow-up letter
to CMS regarding these programs. He's concerned that referrals
to law enforcement sometimes take more than a year to be made.
Furthermore in 2007, contractors referred 4,239 overpayments
totaling $825 million. As of June 2008, claims processers had
collected only 7% of these payments, totaling $55 million. The
processors sent 53% of the identified overpayments to the
Department of the Treasury's cross-service program, which has
never collected more than 2% of all debt referred to it. Some
contractors are identifying many more overpayments than other
contractors, yet taxpayer dollars continue to flow to
underperforming contractors.
On October 15, 2010, Senator Grassley also sent a follow-up
letter to CMS requesting financial information for PSCs and
ZPICs from January 2006 to the present. The same information
had been requested on November 5, 2009. However, the CMS reply
was incomplete. CMS cited the Trade Secrets Act, the Privacy
Act, and the Freedom of Information Act (FOIA) as reasons for
not providing all requested information. The request was
forwarded by CMS to its FOIA office for processing.
Oversight of CMS Medicare Contractors
In October 2009, the HHS OIG issued a report titled,
``Medicare Drug Integrity Contractors' Identification of
Potential Part D Fraud and Abuse.'' The OIG sought to determine
the extent to which Medicare Drug Integrity Contractors (MEDIC)
identified and investigated potential Part D fraud and abuse
and whether the incidents were identified through external
sources or proactive measures, and (2) describe any issues or
barriers MEDICs encountered in identifying or investigating
fraud and abuse.
The OIG report made a number of recommendations to CMS that
would assist the MEDICs in discharging their contractual
obligations, and indicated that CMS concurred with three of the
four recommendations. Senator Grassley wrote to CMS requesting
an update on CMS's efforts to implement the HHS OIG's report
recommendations.
On October 6, 2010, Senator Grassley sent a letter to HHS
and CMS to reiterate his concerns over inadequate management
and oversight of CMS contractors. An OIG audit in early 2010
found that CMS contractors, including Medicare Administrative
Contractors (MAC), Program Safeguard Contractors (PSC), and
Quality Improvement Organizations (QIO), were not fulfilling
their responsibilities pursuant to the contracts.
In addition, in response to a letter from the House of
Representatives, Senators Grassley and Kohl investigated CMS's
lack of proper oversight during the transition from National
Health Insurance Company to Palmetto as the Medicare Affiliated
Contractor in Region J1. The lack of oversight resulted in
significant delays in Medicare contractors being paid for their
services. As a result of the inquiry by the Senators, CMS
accepted responsibility for the many problems and stated that
it has taken steps to make sure these issues are avoided in
future transitions.
Medicare and Medicaid Payments for Unnecessary Use of GA and GZ
Modifiers
GA and GZ modifiers are pressure reducing support surfaces
used to prevent bedsores or decubitus ulcers, which can occur
when a person remains in one position without shifting his or
her weight for long periods of time. Data provided by CMS show
that in 2009, Medicare Part A and Part B paid more than $35
million and $490 million, respectively, for claims with GA
modifiers. Part A and Part B also paid more than $265,000 and
$20 million, respectively, for claims with GZ modifiers. A
contractor for CMS's CERT program reviewed claims with GA
modifiers. The CERT contractor did not find a single claim for
an item or service that was medically necessary, yet CMS paid
most of these claims anyway. Senator Grassley was told that CMS
recently changed its reimbursement policy so that Medicare Part
A claims with GA and GZ modifiers are automatically denied but
did not make a similar change for Part B claims.
CMS Five-Star Nursing Home Rating
In response to concerns raised by a group of nursing home
administrators, Senator Grassley inquired into CMS's
implementation of the Five-Star Quality Rating System. This
rating system ranks nursing homes from one to five stars on the
basis of (1) Federal quality standards from surveys and
complaint investigations, (2) nursing home staffing levels, and
(3) ratings of quality of care measures. Concerns were raised
that low ratings could hurt a company's ability to obtain
funding and increase its liability in civil lawsuits, among
other things. While CMS acknowledged some problems with the
rating system and committed to reevaluating it, none of the
concerns had yet materialized.
Health Care Procedure Coding System
Senator Grassley sent a letter to the GAO asking it to look
into medical billing codes the Centers for Medicare and
Medicaid Services is maintaining under the Health Care
Procedure Coding System (HCPCS). Some have raised concerns that
the HCPCS has produced a growing number of broadly defined
codes that are unduly ambiguous and imprecise. This could have
an adverse impact on payers and payment systems. Without
sufficiently detailed and precise coding, a wide range of
products may become indistinguishable to payers, including
Medicare and Medicaid. Furthermore, imprecise coding might have
an adverse impact on patients and providers. An overly-broad
code could impede access to clinically needed items and
services.
National Institutes of Health
NIH Extramural Program and Payments to Doctors
Beginning May 2007, Senator Grassley began asking questions
about the financial disclosures filed with the University of
Cincinnati by Dr. Melissa DelBello, a psychiatrist. The Senator
found that Dr. DelBello received tens of thousands of dollars
from a pharmaceutical company after doing a study which found
that the company's drug should be used to treat children with
psychiatric disorders. The Senator then wrote the company and
discovered tens of thousands of dollars in payments that Dr.
DelBello did not report to her university, as required. In
addition, Dr. DelBello was the primary investigator on several
grants from the National Institutes of Health (NIH). Senator
Grassley notified the NIH that this failure to report outside
payments violated NIH regulations on financial disclosure.
Senator Grassley then sent letters to about 20 universities
asking about the financial disclosure forms filed by almost 30
different doctors. Letters were also sent to several top drug
companies asking about the payments they made to these doctors.
Beginning in the summer of 2008, letters were sent to Harvard,
Stanford, the University of Texas, and Emory University about
discrepancies in their doctors' financial disclosures. The NIH
was also notified about these discrepancies. It removed a
Stanford professor from a grant and stopped a grant that was
going to Emory.
In 2009 Senator Grassley continued seeking more information
regarding the $24 billion the NIH spends annually for
extramural grants. One of the cases involved Emory University
chair of the department of psychiatry, Dr. Charles Nemeroff.
Reportedly, Dr. Nemeroff may have violated NIH conflict of
interest rules for several agency grants. One instance in
particular was the nature of Dr. Nemeroff's promotional talks
with GlaxoSmithKline and Paxil.
Senator Grassley also learned that Dr. Christie Ballantyne
of Baylor College of Medicine (BCM) received over $34,000 for
consulting work for Merck. Baylor responded in a news article
that it was ``confident that its rules guard against any
financial conflict of interest, saw no need to tell the NIH of
payments by Merck to Dr. Ballantyne.'' Senator Grassley asked
for the NIH's response to this statement.
The NIH responded in writing and appeared before the
committee to address this issue. The NIH had serious concerns
regarding BCM's compliance with the Federal Financial Conflict
of interest (FCOI) regulation. To that end the NIH has imposed
special award conditions on all BCM grant awards until BCM can
assure the NIH that the detected deficiencies noted in their
response have been appropriately addressed and BCM can
demonstrate compliance with the FCOI regulation to the NIH's
satisfaction.
The NIH is expected to enact new policies on conflicts of
interest for the extramural program in spring 2011.
Physician Payments from Pharmaceutical Companies
Senator Grassley continued to examine physician-industry
relationships, including the failure of physicians to disclose
payments from industry while receiving grants from the National
Institutes of Health (NIH) or while serving at institutions
that make decisions affecting medical research and practices.
Past investigations have revealed that physicians are failing
to disclose the money they receive from companies as required
by university and Federal regulations governing the NIH.
In April 2009, Senator Grassley sent letters to eight
pharmaceutical companies including Bristol-Myers Squib Company,
Eli Lilly & Company, Forest Laboratories, GlaxoSmithKline,
Johnson & Johnson, Novartis Corporation, Pfizer, and Schering-
Plough Corporation relating to the payments of four physicians.
Responses from the companies were received and helped shape the
Physician Payments Act bill.
Ghostwriting
In 2004, Senator Grassley held a Finance Committee hearing
on (1) the withdrawal from the U.S. market of the painkiller
Vioxx, (2) the relationship between the drug industry and the
Food and Drug Administration (FDA), and (3) the shortcomings in
the drug safety system. In 2008, the Senator raised concerns
about allegations that Merck, the manufacturer of Vioxx,
selectively reported mortality data from clinical trials of
Vioxx that had been conducted in patients with Alzheimer
disease or cognitive impairment. Researchers had reviewed
documents from recent litigation against Merck and published
their findings in the Journal of the American Medical
Association. According to the authors, Merck misled the FDA by
initially submitting mortality data that minimized the
appearance of an increased risk of death. The researchers also
reported that Merck hired a medical publishing company,
Scientific Therapeutics Information, Inc., to draft manuscripts
for the company's Vioxx studies and seek academic investigators
to sign on as the primary author(s), even though the academic
investigators may not be intimately familiar with the
underlying data and/or relevant documentation. This is a
practice known as ghostwriting. Information in scientific
journals can have a significant impact on doctors' prescribing
behavior and, in turn, on the taxpayer because Medicare and
Medicaid pay billions of dollars for prescription drugs.
Patients may be harmed if doctors are being misled to prescribe
drugs that may not work or are unsafe.
During the 111th Congress, Senator Grassley sent letters to
Wyeth, American Journal of Medicine, Annual Review of Medicine,
Archives of Internal Medicine, Journal of the American Medical
Association, Nature Medicine, New England Journal of Medicine,
PLoS Medicine, and Annals of Internal Medicine inquiring about
their ghostwriting practices. In addition, in November 2009,
Senator Grassley sent 10 additional letters to various medical
academic institutions inquiring about their policies regarding
the ghostwriting practice. Response to these 10 letters were
received in December 2009.
On June 24, 2010, a staff report was issued based on (1) a
review of documents provided to the committee by the medical
schools, the medical journals, Merck, Wyeth and the medical
education and communications companies; (2) a review of court
documents and publications the staff collected online and
through literature search; and (3) interviews with published
academic researchers, physicians, and attorneys examining
conflicts of interest or the practice of ghostwriting.
The report found that (1) despite acknowledgment of medical
writers for ``editorial assistance,'' the role of
pharmaceutical companies in medical publications remains veiled
or undisclosed; (2) some medical schools explicitly prohibit
ghostwriting in their policies; (3) detection of ghostwriting
by medical schools is limited; (4) strengthening journal
authorship policies appears to have limited effect on
ghostwriting and disclosure of industry financing of medical
articles; and (5) NIH does not have explicit policies on
disclosure of industry financing of ghostwritten articles.
NIH Proposed Rule on Promoting Objectivity in Research
In May 2010, the NIH issued a Proposed Rule on the
Responsibility of Applications for Promoting Objectivity in
Research for Which Public Health Service Funding Is Sought
(Proposed Rule). The purpose of the rule is to strengthen
existing financial conflict of interest rules to improve
transparency and accountability. Senators Grassley and Kohl,
who championed the passage of the Physician Payments Sunshine
Act submitted their recommendations. These recommendations
include requiring (1) researchers in an NIH grant to report
outside income to the nearest $1000, (2) academic institutions
to complete a plan to manage their researcher's potential
conflicts of interest and (3) the NIH to make that information
available to the public on NIH's website. The Senators believe
these are reasonable initial steps to provide more transparency
to the billions of dollars that the government spends on
biomedical research.
In addition, Senator Grassley wrote to the NIH to urge the
agency to take into consideration the findings outlined in a
report prepared by his committee staff on ghostwriting in
medical literature in finalizing its Proposed Rule. In
particular, the Senator urged NIH to ensure that the final rule
defines the term ``significant financial interest'' to include
company financing or other material contributions to develop
medical literature. The definition should include: (1)
conceiving and designing the underlying paper, (2) collecting
or analyzing the data, and (3) drafting, reviewing or revising
the manuscript.
Senator Grassley also told NIH that it should require
institutions that receive NIH grants to maintain up-to-date,
written and enforced policies on (1) the authorship of
articles, such as those established by the International
Committee of Medical Journal Editors, and (2) the disclosure of
any financial or material support, contribution or other item
or service of value provided by a drug or device company to any
articles written by or attributed to the institution, including
any faculty member or researcher affiliated with the
institution, that are published in a medical journal or other
publication. The Senator further recommended that NIH consider
requiring that articles based on research funded by NIH are
published in a medical journal or other publication that has
written, enforced policies on the authorship and the disclosure
of any financial or material support provided by a drug or
device company.
On September 1, 2010, NIH responded to Senator Grassley's
letter, advising that it does not condone ghostwriting and
recognized that this practice may contribute to conflicts of
interest and bias in research. The NIH has proposed to broaden
Significant Financial Interest guidelines, which will require
investigators to disclose more information to their
institutions to combat the possibility of conflicts of interest
and bias. The NIH has not yet finalized the Proposed Rule.
Centers for Disease Control and Prevention
Conditions of Drug Storage at the CDC
In January 2010, Senator Grassley requested that the
Department of Health and Human Services' (HHS) Centers for
Disease Control and Prevention (CDC) keep him informed of the
agency's progress in addressing drug storage concerns. The CDC,
as a result of an HHS Office of Inspector General (OIG) review,
had agreed to initiate an independent review of its quality
system and other procedures relative to CHEMPACK containers and
the rest of the Strategic National Stockpile assets to ensure
compliance with Food and Drug Administration (FDA)
requirements. The OIG found that the CDC had not complied with
those requirements in its storage of CHEMPACK.
On May 10, 2010, the CDC provided a letter to update
Senator Grassley on its efforts to improve storage and the
quality control in its CHEMPACK program. The CDC advised the
Senator of the implementation of quarantine procedures and
improvements in standard operating procedures involving
temperature monitoring, documentation, staff training, and
quality management. Further, the CDC has begun steps to allow
for ``an independent review to ensure that the CHEMPACK
program's quality procedures and policies are consistent with
relevant statutes and FDA guidance for the storage of
pharmaceuticals.''
Follow-up on Office of Inspector General Audit of Centers for Disease
Control and Prevention Ethics Programs
In December 2009, the HHS OIG released a report detailing
the CDC ethics program for Special Government Employees (SGE)
on Federal Advisory Committees. This report found an error rate
of 97% on financial disclosure forms submitted by SGEs.
Furthermore, the CDC certified these forms without being able
to identify and/or resolve 64% of SGEs' potential conflicts of
interest. Additionally 41% of SGEs did not receive ethics
training from CDC in 2007.
Senator Grassley requested an update on CDC's
implementation of all seven HHS OIG recommendations, what steps
the CDC has taken to ensure the proper completion of forms and
an explanation of the consequences of not filling out a form
correctly. Senator Grassley also sought a listing of all
Federal Advisory members from January 2008 to the present with
potential conflicts of interest, which CDC provided.
The CDC responded that it immediately concurred with the
recommendations the HHS OIG put forth. CDC stated in February
2010 that the Army Financial Disclosure Management System
became fully operational to process SGE forms. This should
increase timeliness, consistency, and accuracy of the financial
disclosure program. In the 2009 OIG report, no SGE was found to
be in violation of conflict of interest laws or regulations. If
issues of ethical behavior arise, an SGE may be subject to
disqualification, recusal, divestiture, 18 USC section
208(b)(3) waiver, and authorization under 5 C.F.R. section
2635.502[a].
Department of Treasury/FRBNY
Treasury's Failure to Recover AIG Bonuses
In December 2009, Senator Grassley sent a letter to the
Department of Treasury regarding the Treasury Department's
failure to prevent the payment of exorbitant bonuses to AIG
executives, despite the extraordinary level of taxpayer support
for the company. Although the public outrage at the bonuses had
led at least 18 top AIG executives to pledge to return the
money, only $19 million of the $165 million in bonuses had been
repaid. Therefore, the Senator asked Treasury to respond to a
number of questions regarding how it planned to address the
issue and enforce repayment.
The Office of the Special Master for TARP Executive
Compensation responded that he engaged in negotiations for the
return of the bonuses and that failure to return bonuses
voluntarily would be taken into consideration in his 2010
compensation determinations.
Federal Reserve Bank of New York (FRBNY) Exposes Taxpayers to
Unknowable Levels of Risk
The Office of the Special Inspector General for the
Troubled Asset Relief Program (SIGTARP) conducted a study
titled, ``Factors Affecting Efforts to Limit Payments to AIG
Counterparties.'' This study found that the Federal Reserve
Bank of New York (FRBNY) potentially exposed the U.S. taxpayers
to unknowable levels of risk, and failed to use its leverage to
obtain concessions from counterparties at the height of the
financial crisis. Senator Grassley asked whether Goldman Sachs
would have incurred economic loss without the support to AIG
and plans for 2009 bonuses. Goldman claimed to be fully hedged
against the possibility of an AIG failure, which raises the
question of why the FRBNY did not require Goldman to take
losses on its credit default swaps with AIG and pass those
losses on to the counterparties with which it was hedged. The
Assistant Secretary of the Department of Treasury responded
that it was implementing many of the recommendations of SIGTARP
and the Government Accountability Office (GAO). Treasury failed
to specifically address the Goldman Sachs and AIG questions.
Executive Pay and Bonuses to Employees of Bailed Out Corporations
Following reports that employees of American International
Group (AIG) received $160 million in bonuses and knowing that
AIG had received over $170 billion in taxpayer funds to support
its operations after suffering massive losses due to poor
management decisions, Senator Grassley asked the Treasury
Inspector General and the SIGTARP to look into the role, if
any, and actions of the Department of the Treasury in the
decision to pay those bonuses. In addition, the Senator asked
Fannie Mae and Freddie Mac to provide information regarding
executive compensation and bonuses to assure that they, too,
were not using taxpayer funds for excessive compensation. In
regards to AIG, the response was that the bonuses were actually
retention payments intended to keep the employees who had
helped build the company. These payments were allegedly
contractually obligated because they existed before the Federal
Government became involved with AIG. In regards to Fannie Mae
and Freddie Mac, they too responded that they intended to pay
retention bonuses in an attempt to keep their staffing levels
up and operating ``at full speed,'' which they believed was in
the best interest of the American taxpayer.
Federal Home Loan Modification Programs
After reviewing a report from the Office of the Comptroller
of the Currency (OCC) and the Office of Thrift Supervision
(OTS), Senator Grassley questioned the long-term success of the
FDIC's IndyMac loan modification program. In January 2009, he
requested that the FDIC provide summary statistics of the
status of IndyMac's loans modified under the FDIC's current
program. The response from the FDIC showed that less than 1
percent of the loans are more than 30 days past due, though
they acknowledged that deteriorating economic conditions could
affect that figure.
Due to concerns that a large percentage of mortgage loans
issued just prior to the financial crisis were obtained
fraudulently, Senator Grassley asked the Treasury Department to
take steps to minimize rewarding such fraud through its Federal
loan modification program, the Homeowner Stability Initiative.
Treasury responded that it is taking steps to minimize exposure
to fraud in the initiative and will work with other entities in
furtherance of that goal.
SIGTARP Delayed from Collecting Information
In January 2009, Senator Grassley sent a letter to the
Director of the Office of Management and Budget (OMB) asking
for an explanation of the facts and circumstances surrounding
OMB's intervention to delay the SIGTARP's collection of
information from TARP recipients. Specifically, OMB had ruled
that SIGTARP was bound by the Paperwork Reduction Act in its
attempt to gather information from TARP recipients. The Senator
asked OMB to provide documentation as to how it arrived at this
decision. While OMB did not provide the documentation
requested, it did resolve the Paperwork Reduction Act issues in
a way that eventually allowed SIGTARP to gather the information
that it sought from TARP recipients.
Repayment of GM's Government Loan
In April 2010, General Motors (GM) announced that it repaid
``in full'' loans it had received under the Troubled Asset
Relief Program (TARP). Senator Grassley asked the Department of
the Treasury to explain how GM could have ``repaid'' those
loans, given that it did so with other government funds being
held in a Treasury escrow account. Those funds were originally
proceeds from a larger loan to GM before it entered bankruptcy.
However, the debt was converted in the transaction that
resulted in the taxpayers' acquisition of 61% of GM stock and a
smaller loan. The new GM repaid that smaller remaining loan
after the bankruptcy with funds originally from the
government's larger loan. GM and Treasury's claim that GM had
repaid the taxpayer ``in full'' was, therefore, misleading. In
fact, the taxpayer will only be made whole when and if the
government is able to sell its entire ownership stake in the
company for a profit.
Special Master for Compensation Conflict of Interest
In March 2010, Senator Grassley asked the SIGTARP to
investigate the apparent conflict of interest for an employee
in the Office of the Special Master for Compensation under
TARP. The employee joined Treasury in May 2009 and participated
in drafting the Treasury regulations regarding executive
compensation at TARP recipients like AIG and Bank of America.
He had previously worked for the Wall Street law firm Wachtell,
Lipton, Rosen & Katz. While at Wachtell, he represented Bank of
America during its acquisition of Merrill Lynch in the fall of
2008. Also, the Wachtell firm represents the former CEO and
former CFO of AIG on executive compensation matters, including
severance. Those executives may still be planning to make
claims against AIG for millions of dollars of severance pay.
SIGTARP agreed to examine the conflict of interest issue.
OIG Recommendations to Treasury
In November 2009, Senator Grassley asked the Treasury
Department to provide him with an update on the status of a
recommendation made by the SIGTARP that Treasury require all
TARP recipients to report on the actual use of TARP funds. This
recommendation had been made before, but Treasury had failed to
adopt this recommendation for all but three TARP recipients.
Treasury responded that beginning in late November 2009 it
would issue expanded reports that should address the Senator's
concerns. It committed to continuing to implement new ways to
report this information.
Special Considerations Given to Some Banks
The government's extraordinary interventions in the economy
during the financial crisis raised concerns about the basis on
which it would pick winners and losers. Decisions about which
institutions received Federal money may have been influenced by
political considerations, such as interventions by elected,
appointed, or other officials. Objective criteria should
outweigh such considerations. Therefore, in February 2009
Senator Grassley asked the Treasury Department's Inspector
General and SIGTARP to investigate the Treasury Department's
decisions to provide billions of taxpayer dollars to private
financial institutions through the Troubled Assets Relief
Program, the Capital Purchase Program, or through any other
means. On July 20, 2009, SIGTARP released its use of funds
audit, which addressed these issues.
Securities and Exchange Commission
SEC Implementation of OIG Recommendations
In December 2009, Senator Grassley sent a letter to the
Chairman of the Securities and Exchange Commission (SEC)
regarding dozens of recommendations from the Office of
Inspector General (OIG) that had received ``no action'' or
remain pending. In the letter, Senator Grassley asked the SEC
to provide a detailed explanation for each OIG recommendation
as to why the SEC has taken no action and, for those
recommendations that remain pending, to provide a timeframe
within which implementation is expected to be complete. The SEC
responded that it had concurred with all 37 recommendations. Of
those, 14 had been implemented, one is partially implemented,
and 22 are pending. Of the 22 pending, 18 will be completed by
the end of fiscal year 2010, two during fiscal year 2011, and
the remaining two require additional funding to implement. SEC
stated that it has developed a corrected action plan to assure
that all recommendations are implemented.
Pequot Capital Management Report Recommendations
As a follow-up to a previous investigation into the
failings of the SEC during its investigation of Pequot Capital
Management, Senator Grassley asked the SEC Chairman about
recommendations from the joint Finance and Judiciary Committee
staff report. Chairman Shapiro responded that the Commission
plans to have all recommendations implemented by May 8, 2009.
Improper Trading by SEC Employees
In March 2009, Senator Grassley asked the SEC Inspector
General to provide the committee with information regarding his
investigations into improper trading by employees of the SEC.
Upon receipt of that information, Senator Grassley asked the
Chairman a series of questions regarding how she planned on
implementing the recommendations in the OIG report and how she
planned on preventing future violations. The Chairman responded
with a letter illustrating numerous steps the SEC is
implementing to prevent violations. The SEC responded to the
Senator's letter on May 4, 2009, and provided a copy of the OIG
investigative report.
Whistleblower Retaliation
In May 2010, the committee received reports that the SEC
OIG conducted investigations that substantiated claims that SEC
management engaged in whistleblower retaliation. Yet the SEC
failed to take remedial action even though the OIG
substantiated the allegation. Therefore, the Senator requested
the OIG provide the committee with descriptions and copies of
any investigative reports where the OIG substantiated
whistleblower retaliation for the period of January 2007 to the
present. He asked that OIG include any comments made or actions
that were taken by the SEC in response to the OIG's reports.
On May 26, 2010, Eric Spitler from the SEC Office of
Legislative and Intergovernmental Affairs provided a response
to the request. A redacted copy of the SEC OIG report entitled,
``Allegations of Retaliatory Personnel Actions'' (Case Number
OIG 494-A, involving the Fort Worth Office) was attached. The
report stated that on July 24, 2008, the SEC OIG initiated an
investigation involving two employees' complaints of
retaliation. The OIG found that retaliation occurred against
both employees by supervisors. However, due to the nature of
the disclosures, only one employee could be considered to have
been retaliated against as a whistleblower. The OIG recommended
disciplinary action of the supervisors for their actions of
retaliation against their subordinates and submitted their
recommendations to the Director of OCIE, the Associate
Executive Director for Human Resources, the Associate General
Counsel for Litigation and Administrative Practice, and the
Ethics counsel. The SEC took no disciplinary action against the
supervisors.
SEC Accessing Pornographic Materials from Government Computers
Senator Grassley requested the Securities and Exchange
Commission's Office of Inspector General (OIG) to provide a
detailed, comprehensive summary of pornography cases the OIG
had investigated over the last 5 years. The OIG had reported in
the last three reports that at least 18 employees and
contractors had been investigated for using their government
computers to access pornographic materials.
The OIG responded that over the last 5 years its
investigations determined that of the 33 subjects who had
engaged in inappropriate conduct, five contractors have been
removed from their SEC contract, eight employees resigned from
the Commission, six employees were suspended (with the
suspensions ranging in length from 1 day to 14 days), five
employees were issued formal reprimands, six employees were
issued informal counseling or warning letters, and three
employees are currently facing disciplinary action.
Social Security Administration
Fraudulent Social Security Disability Insurance (SSDI) Claims Filed
An issue Senator Grassley has closely monitored is the
filing of false claims of Social Security Disability Insurance
(SSDI) benefits by insurance companies. It is to the benefit of
a private insurance company that a policy holder files for
SSDI; for if a policy holder obtains SSDI, the private
insurance company reduces a claimant's benefit by the amount of
the SSDI benefit. In some cases, private insurers may be
allowed to reduce their reserves when the SSDI claim is filed,
regardless of whether the Social Security Administration
approves or denies the claim. What this creates is thousands of
unnecessary and meritless claims submitted for the Social
Security Administration (SSA) to process.
Senator Grassley recommended that individuals applying for
SSA benefits must disclose if they have private or other non-
SSA disability coverage, require SSDI and SSI applicants and
claimant representatives to attest to the accuracy and
truthfulness of SSDI or SSI claim information, and arrange an
information sharing network among private and other non-SSA
disability programs regarding the status or disposition of
disability claims. Further Senator Grassley recommended that
SSA coordinate with the SSA Office of Inspector General to
prosecute and penalize individuals responsible for filing false
disability claims.
SSA responded on April 23, 2009 by saying it is studying
the issue. SSA said the Federal Trade Commission was conducting
a study on the alleged practices of long-term disability
insurance providers. Once SSA receives the results of the study
it said it would act accordingly.
Disability Insurance Review
Senator Grassley sent letters to nine insurers (Aetna,
Cigna, Hartford, Lincoln, MetLife, Prudential, Reliance
Standard, Standard, and Unum) requesting detailed information
about their handling of disability claims. The Senator asked
the insurers to report on how many of their claimants they had
compelled to apply for Social Security in the last 5 years; how
many appeals they had required people to file; and what methods
they had used to screen the people beforehand to ensure that
they were indeed eligible for benefits. Additionally, Senator
Grassley asked the nine insurers to explain how their
claimants' Social Security applications affected their reserves
and to ``describe the timing and financial flows resulting from
these adjustments.''
SSA Representative Payees
After recent media reports on SSA beneficiaries with
representative payees falling prey to mistreatment from others,
Senator Grassley asked the OIG for SSA to answer a number of
questions regarding the SSA's representative payee program. One
article highlighted a situation where a Texas-based business
``paid mentally disabled men a pittance to work for an Iowa
meat processing plant.'' The Senator wanted to ensure that SSA
exerts adequate oversight of and has the commitment to
continuously improve its management of representative payees.
The OIG responded that it is committed to ensuring that SSA
exerts adequate oversight and continuously improves its
management of representative payees. In addition, the OIG
provided a list of unimplemented recommendations from prior
representative payee audits and evaluations.
Operations of the EAA at the Social Security Administration
After receiving documents outlining a number of concerns
regarding the activities of the Social Security Administration
(SSA) Employees Activity Association (EAA), Senator Grassley
began an inquiry into the operations of the EAA and its
relationship to the SSA. The documents suggested that the EAA
may have violated a number of Federal laws. In addition, it was
relayed that the EAA refused to permit an independent audit of
its books and records. For instance, MOUs between SSA and EAA
may have violated the Federal Competitive Contracting Act,
which requires contracts to be awarded through a competitive
process and prohibits the award of contracts to organizations
owned or controlled by Federal employees. In addition,
questions were raised about possible conflicts of interest with
EAA management, and at least two of the organizations
established and controlled by the EAA Board appeared to be
``for-profit'' organizations. In July 2009, the Senator asked
the OIG for SSA to conduct a review and audit of the EAA. The
OIG responded that it will conduct the review and will provide
the results to the committee.
SSA Training Conferences
After troubling media reports regarding a SSA training
conference at the Arizona Biltmore, Senator Grassley requested
that the Office of the Inspector General (OIG) for the SSA
conduct an audit of the conference. In addition, the Senator
asked that the OIG provide information on all past audits it
had performed on conferences held within the past 5 years. In
October 2009, the Senator, along with Senator Baucus, also
requested a copy of the investigation of the Diversity
Conference that was held in Atlanta, GA in 2006. The OIG
provided the requested information and the report stated that
the SSA had complied with all procurement rules.
American Recovery and Reinvestment Act
CARS
In August 2009, Senator Grassley asked the Office Inspector
General (OIG) of the Department of Transportation (DOT) to pay
particular attention to the Department's ability to assure
program integrity of the Consumer Assistance to Recycle and
Save program (CARS). CARS was intended to help consumers pay
for new, more fuel efficient cars or trucks from participating
dealers when they trade in less fuel efficient vehicles.
Additionally, he requested that the OIG give serious
consideration to sampling a number of transactions and examine
whether or not the parties involved complied with all
applicable law. He asked that the OIG consider such issues as
the level of compliance with applicable Federal requirements,
the accuracy and reliability of data on which transactions are
based, actions the DOT has underway to safeguard the program
against fraud, waste, and abuse and overall accountability for
those found in non-compliance.
On March 11, 2010, Senator Grassley sent a follow-up letter
to the DOT questioning the numbers provided. Senator Grassley
also had questions regarding the 32 companies and governmental
entities that received Federal contracts or executed inter-
agency agreements to administer the CARS program. He had
further questions regarding the awarding of contracts to former
department officials and the payment of award fees to at least
two contractors.
In April 2010, GAO and DOT OIG released their reports on
CARS. In general, many of the claims related to jobs and impact
on GDP cannot be determined because it is not possible to
quantify the exact impact this program had on vehicle
purchases.
In May 2010, the Senator requested the DOT provide all
final payments made to the contractors utilized by the
Department, the scheduled date for any and all close-out
audits, and information regarding who will be conducting the
close-out audits. The Senator also asked for a copy of the
close-out audits once they were completed.
On July 26, 2010 DOT provided accounting reports for all
CARS contractors. Two contracts, those of Oracle and Citibank,
contained provisions for award fees. By the end of fiscal year
2010 NHTSA expects to determine how the CARS program will be
closed out.
Concerns on ARRA Implementation at GSA
Following the release of a General Services Administration
(GSA) Office of Inspector General (OIG) report on the topic, in
April 2010 Senator Grassley asked the GSA to explain the
safeguards GSA developed to limit fraud, waste, or abuse of
American Recovery and Reinvestment Act (ARRA) funds. The
Senator was concerned because the increased workload for
construction projects, nearly four times greater than a typical
construction budget for a year, combined with the short
timeframe in which to obligate ARRA funds, creates ``an
environment that provides more opportunities for fraud, waste,
and abuse to occur,'' according to the OIG.
On July 26, 2010, the GSA sent a letter referencing reports
from Defense Contract Audit Agency (DCAA) relating to GSA
stimulus funding, which were provided to Senator Grassley's
office per request. GSA advised that a recent internal quality
assurance review of DCAA has found that 10 out of 17 selected
audit reports for review failed to comply with generally
accepted government auditing standards (GAGAS). Consequently,
the 10 reports have been rescinded and DCAA must qualify any
and all work covered by GAGAS until a current peer review is
completed. Once the peer review is completed, GSA will re-
evaluate whether to resume using DCAA as a subcontractor for
audit services.
ARRA Funds to be Used for Off-Campus SSA National Computer Center
The SSA planned on using a portion of the $500 million
Recovery Act funds to purchase land for a new National Computer
Center. This would have been a new land purchase even though
SSA had federally owned land at the Baltimore campus location.
The Senator was concerned that the SSA and the GSA had not
conducted a cost-benefit analysis to make sure the off-campus
location planned for the new facility was in the best interest
of the American taxpayer. As a result, GSA performed a study of
the issue that claimed to justify the off-campus option.
Request of Office of Management and Budget to Explain How to Prevent
ARRA Fraud
Estimates are that $55 billion of ARRA money will be lost
through fraud, waste, and abuse. Senator Grassley asked the
Office of Management and Budget (OMB) what it is doing to keep
this from happening. Over 3,500 recipients failed to file as
recipients of award money and failed to provide receipts for
work performed. There are several reasons: outright fraud, the
lack of penalties for failure to file, and a cumbersome filing
process. The Excluded Parties List System (EPLS) is meant to
exclude individuals and firms from receiving Federal contracts
or subcontracts due to statutory exclusions. However, once
individuals and firms received ARRA funds, they keep receiving
funds even if they were on the EPLS. OMB responded that the
overwhelming majority of recipients are complying with ARRA
requirements and that the Federal Acquisition Regulation gives
contracting officers the discretion to continue an existing
contract with companies or individuals on the EPLS in order to
minimize unnecessary disruption to the agency mission.
Department of Energy Weatherization Assistance Program
The Department of Energy (DOE) received over $32.7 billion
in ARRA funds, which have to be obligated by September 30,
2010. To meet this requirement the DOE had to obligate $55
million a day. One of the programs the DOE funded was the
Weatherization Assistance Program (WAP), which is a program to
improve energy efficiency of homes owned or occupied by low
income persons. The DOE Office of Inspector General reported
that less than 8% of the $4.73 billion allocated for the
Weatherization Assistance Program has been drawn. 156,118 homes
were planned to be upgraded but only 677 were actually
completed. The desire to spend the weatherization funds on a
catch-up basis may lead to an environment conductive to
wasteful, inefficient, and perhaps even abusive practices.
Senator Grassley requested that the DOE answer several
questions as to the oversight of the weatherization program.
The DOE responded that in February 2010 it weatherized
18,091 homes. It expects to weatherize 20,000 to 30,000 homes
per month to reach the President's goal of 593,000 homes
weatherized by March 31, 2012. As of April 12, 2010, the WAP
expended $724.7 million and was spending more than $100 million
monthly.
On July 21, 2010, Senator Grassley sent a follow-up letter
to DOE asking why its staff spent a disproportionate amount of
time ``monitoring'' weatherization efforts in the Pacific
Territories (Guam, Northern Marianas Islands and American
Samoa) rather than in New York, Texas and Michigan. The Senator
further wanted to know how DOE was ensuring the accuracy of
weatherization data. He requested the identification of any
Stimulus funds that have been re-captured by DOE relating to
WAP.
On October 19, 2010, Senator Grassley sent a letter to DOE
Secretary Chu regarding the latest OIG audit of the Illinois
WAP. The OIG report found significant substandard performance
in areas of workmanship, initial home assessments, and
contractor billing for labor costs not incurred and materials
that had not been installed. The OIG found widespread
deficiencies in weatherization work and home inspections and
erroneous billing.
Housing and Urban Development Disbursement of Funds
Housing and Urban Development (HUD) received nearly $14
billion of taxpayer money pursuant to the American Recovery and
Reinvestment Act of 2009. Some of these funds went to areas
noted by the HUD Office of Inspector General to be troublesome
areas where there were instances of fraud, waste, and abuse.
Senator Grassley asked if HUD took into consideration whether
those housing authorities slated to get large sums of money
could handle these funds. HUD maintains a list of troubled
housing authorities and Senator Grassley wanted to know if
anyone on this list received ARRA money. Senator Grassley also
wanted to know what safeguards HUD had in place to limit fraud,
waste, and abuse of Recovery Act funds at housing authorities.
Finally, Senator Grassley requested information on all action
taken against any and all housing authorities found to have
misspent ARRA funds or otherwise not complied with their
obligations.
HUD responded that all troubled housing authorities
received ARRA funds. HUD agreed that troubled Housing
Authorities would require enhanced monitoring and oversight.
There was no publically available listing of troubled housing
authorities. It was only available to the public through a
Freedom of Information Act request. However, HUD agreed to post
Public Housing Assessment System scores on its website.
On June 16, 2010, Senators Grassley and Bond sent a follow-
up letter to HUD seeking additional information on troubled
Public Housing Authorities (PHA). The Senators asked whether
the Puerto Rico Housing Authority was going to pay back $32.1
million of stimulus funds after HUD found the money to be
inappropriately obligated. The Senators wanted to know how a
PHA is placed on a troubled housing list, how one is removed,
and how a PHA is placed in or removed from receivership.
On July 23, 2010, HUD responded in a 15-page letter that
provided summary data about the Recovery Act monitoring
reviews, listed troubled housing authorities, and described the
actions being taken to get them back in order.
On August 23, 2010, Senator Grassley sent a follow-up
letter to HUD regarding issues with the PHAs in Philadelphia,
Pennsylvania and Lakeland, Florida. The Philadelphia Executive
Director was receiving annual compensation of over $350,000,
more than the Philadelphia mayor and Pennsylvania Governor
combined. The Lakeland Executive Director enjoyed an annual
salary of over $182,000, as well as a benefits package,
including an $18,000 car allowance and 8 weeks of paid
vacation. The Senator was concerned that Stimulus dollars were
being spent on exorbitant salaries rather than caring for the
needy. The Senator requested: (1) the annual compensation
packages of all executive directors of troubled PHAs, (2) the
compensation packages at the top 20 PHAs, (3) a justification
for all the annual bonuses paid to executive directors, and (4)
an explanation of who determines executive compensation at
PHAs.
On September 17, 2010, Senator Grassley sent another letter
to HUD continuing to seek information insights into HUD's
oversight of PHAs and in particular Philadelphia, involving
areas such as conflicts of interest and allegations of sexual
harassment against senior PHA staff.
On October 5, 2010, HUD responded to the Senator's August
23rd letter, indicating that no questionable financial
activities at the Philadelphia PHA had been uncovered by HUD's
independent auditor. HUD dispatched a team of CPAs with
extensive Public Housing experience to audit PHA's financial
and management operations. HUD further conducted a remote
review of the grants that the Philadelphia PHA received.
Regarding employee complaints, HUD advised that there were two
complaints during fiscal year 2008 to date, neither of which
apparently impacted Recovery Act functions. HUD said it does
not regulate compensation for PHA Executive Directors, but that
in light of events, the agency would work to reassess that
policy.
Small Business Administration--Funds Received from Recovery Act
The Small Business Administration (SBA) received $585
million of Recovery Act funds. Senator Grassley asked a series
of questions addressing efforts to prevent waste, fraud, and
abuse. On June 15, 2010, the SBA responded that it had used the
money to establish several new programs to facilitate lending
and other benefits to small businesses. SBA explained that
loans are monitored through the use of the Form 1502 reporting
system. Each month, the lenders report the status of each
guaranteed loan. The agency developed a risk mitigation plan to
identify potential areas of vulnerability for each Recovery Act
initiative.
Department of Energy Grant Being Used to Import Wind Turbines
The Department of Energy was awarded $3.08 billion for
fiscal year (FY) 2010 with another $4.46 billion for fiscal
year 2011 for renewable energy programs. It has been reported
that grants have gone to foreign suppliers for renewable
energy, for example to China for wind turbines. Senator
Grassley pointed out that ARRA was for the creation of U.S.
jobs, not to spend on imports. He requested a summary of the
total amount of Recovery Act funds that were spent on products
manufactured in foreign countries. Additionally Senator
Grassley asked what safeguards were in place to ensure Recovery
Act recipients and sub-recipients only hire individuals legally
authorized to be in the United States.
The OMB responded that the U.S. has a relatively small
share of worldwide manufacturing capacity for clean energy-
related industries, such as wind, solar and advanced battery
technologies. Heads of Federal Departments waive the Buy
America provision if certain conditions are met, and many
agencies elected to use this waiver provision.
Department of Labor and ``Green Jobs''
The Department of Labor (DOL) received $58 billion in
Recovery Act funding to provide worker training for jobs and
ease the burden of the recession on workers and employers. The
Obama Administration focused on the development of ``green
jobs,'' which includes job training, technology investment, and
promoting energy efficiency. DOL distributed millions of
dollars before actually adopting a definition for ``green
job.'' Senator Grassley asked DOL how it could distribute
millions of taxpayer dollars for ``green jobs'' without
defining them.
DOL responded that it designated $490 million in Recovery
Act money for green jobs training. DOL said it consulted
definitions in the Energy Policy Act of 2005, the Workforce
Investment Act, and the Occupational Information Network. It
indicated that the Bureau of Labor Statistics was still working
to develop a definition of green sectors and jobs for the
purposes of counting employment.
On September 23, 2010, Senator Grassley sent a follow-up
letter to DOL seeking additional assurances that, among other
things, stimulus money provided to DOL would not be squandered
on programs that produced few, if any, employment results. On
October 6, 2010, Senator Grassley sent a letter to DOL Acting
Inspector General Daniel Petrole requesting a programmatic
review of the stimulus program expenditures.
National Endowment of the Arts
Senator Grassley sent a letter to the National Endowments
of the Arts (NEA) OIG asking that it look into allegations that
the NEA was using American Recovery and Reinvestment Act (ARRA)
funds to subsidize pornographic performances. The Senator asked
that the NEA OIG staff keep him apprised of its work on this
topic. There were three organizations in question regarding the
presentation of obscene material. The NEA stated it had found
no prior cases involving obscenity issues for these
organizations. The NEA further stated that until all NEA ARRA
funds are drawn down it cannot determine whether expenditures
are in compliance with NEA and ARRA guidelines.
GAO and OIG Access and Independence
Access Issues Limiting GAO's Ability to Conduct Its Mission
In September 2009, Senator Grassley asked the Government
Accountability Office (GAO) for information regarding any
access issues that hinder its ability to provide to Congress
timely and thorough reports about executive branch agencies and
programs. He also asked whether or not the GAO needed any other
authorities or legislative changes that would enhance its
ability to fulfill its mission. GAO responded that, generally,
most departments and agencies are quick to comply with requests
and supply the requested information. However, GAO did
specifically single out problems it has had with delays at HHS
and FDA, extreme delays for information from DHS, and outright
refusal for information from DOJ, including the FBI. GAO stated
that it could benefit from legislation related to its ability
to audit the Federal Reserve.
In May 2010, Senator Grassley sent a follow-up letter to
GAO requesting a description of all instances where a Federal
or private entity impeded, delayed, or refused a GAO request
for information. Additionally the Senator requested the GAO
provide his office with notification of any refusal to provide
information as they happen and any failures to provide
information upon completion of the project.
On June 15, 2010 the GAO responded with certain instances
of agencies or departments not cooperating with its requests.
The GAO sought adoption of S. 2991, The Government
Accountability Office Improvement Act of 2010.
State Department Fails to Cooperate with GAO
In July 2009, Senator Grassley sent a letter to the
Department of State (State) regarding the lack of cooperation
the GAO was receiving from State. Specifically, the GAO was
working on a request from the Senator regarding the number of
passport recipients who owed Federal taxes or were registered
sex offenders. State was not providing the GAO with the
information it needed to complete its review. Senator Grassley,
along with Senator Baucus, requested that State fully cooperate
with GAO, which it eventually did following a long and
unnecessary delay.
Removal of AmeriCorps IG
President Bush signed the Inspector General Reform Act
(P.L. 110-409) into law which was designed to strengthen the
independence and integrity of the Inspectors General. One of
the most important provisions of the legislation was Section 3,
which amended the procedures for the removal of Inspectors
General. Specifically, Section 3 requires that, ``the President
shall communicate in writing the reasons for any such removal
or transfer to both Houses of Congress, not later than 30 days
before the removal or transfer.'' In June 2009, Senator
Grassley began an inquiry into the removal of the Corporation
for National and Community Service (CNCS) Inspector General
Gerald Walpin without the required notice to Congress. As a
U.S. Senator, the President had co-sponsored the Inspector
General Reform Act with Senator Grassley. However, without
providing any notice to Congress, an administration official
gave the watchdog an ultimatum to resign within an hour or be
terminated. Complete findings from the investigation are
detailed in two joint staff reports completed in conjunction
with staff from the House Committee on Oversight and Government
Reform.
ITC OIG Access to Agency Information
In June 2009, Senator Grassley requested information from
the International Trade Commission (ITC) regarding an incident
where documents were forcibly taken from an OIG employee by an
ITC employee. In addition, the Senator asked why the IG had a
limited-term six-month appointment contrary to the provisions
of the IG Act. Subsequent to Senator Grassley's request, the
ITC IG was told that she would be transferred from the
position. As a result, the Senator asked the ITC for the notice
and reasons for the transfer, as required by law, along with an
explanation of why it has not yet been provided. The ITC then
provided the official notice as required by law.
In addition, Senator Grassley asked the GAO to conduct a
study into the ITC IG's ability to function effectively and
independently. In August 2009, Senator Grassley, along with
Senators Lieberman and Collins of the Committee on Homeland
Security and Governmental Affairs, sent a letter to the ITC
asking that ITC appoint a permanent Inspector General within a
reasonable amount of time.
Amtrak OIG
During the 111th Congress, Senator Grassley received
reports that Amtrak was interfering with the independence of
its Inspector General, Fred Weiderhold. At the IG's request,
the law firm of Willkie Farr & Gallagher, LLP drafted a
``Report on Matters Impairing the Effectiveness and
Independence of the Office of Inspector General.'' The Report
suggests a long-term and unrelenting interference with the
activities and operation of the OIG. The Chairman of Amtrak's
Board of Directors gave the IG an ultimatum to retire within 48
hours or a notice of his removal would be provided to Congress.
The IG chose to accept a generous severance agreement with a
non-disclosure provision that did not contain an exception for
speaking with Congress about his removal. The circumstances of
the IG's removal raised concerns that Amtrak had circumvented
the IG Reform Act's requirement to notify Congress 30 days in
advance. The complete findings of a comprehensive investigation
of what amounts to a constructive removal of the IG are
detailed in a joint staff report prepared with the staff of the
House Committee on Oversight and Government Reform. Both DOT
OIG and the Postal OIG are conducting additional follow-up
related to the controversy.
Request for Removal of NASA IG
In March 2009, Senator Grassley and Senators McCaskill and
Rockefeller asked President Obama to immediately remove the
Inspector General (IG) of the National Aeronautics and Space
Administration (NASA). The Senators found that since his
appointment, the IG had repeatedly stifled investigations,
retaliated against whistleblowers, and prioritized his social
relationships with top NASA officials over proper Federal
oversight. On April 2, 2009, the IG resigned from his position.
Improved Financial and Commodity Markets Oversight and Accountability
Act
In July 2009, Senator Grassley sent a letter to the
Chairman and Ranking Member of the Homeland Security and
Governmental Affairs Committee requesting that they reconsider
a provision in the Improved Financial and Commodity Markets
Oversight and Accountability Act that would make the Inspectors
General of five designated Federal entities Presidential
appointees. The Senator was concerned that this change would
introduce partisan politics into these positions. The
provisions were inserted into the Dodd-Frank Wall Street Reform
bill. However, the Senate adopted an amendment by Senators
Grassley and McCaskill to enhance independence in other ways
for those five inspectors general, as well as all designated
Federal entity inspectors general.
Freedom of Information Act Requests--Letters Sent to OIG's to See if
FOIA Requests Are Receiving Political Reviews
Senator Grassley sent letters to 28 Inspectors General
requesting that they conduct an inquiry into their agency's
FOIA office to determine whether, and if so, the extent to
which political appointees are made aware of information
requests and have a role in request reviews or decision-making.
Pharmaceuticals and Devices: Conflicts of Interest
Vytorin
Following reports that Schering-Plough and Merck failed to
release the results of a study called ENHANCE that evaluated
their drug Vytorin, Senator Grassley sent letters to both
companies. Vytorin, a cholesterol-lowering drug, is a joint
venture of Merck and Schering-Plough.
The New York Times reported that the ENHANCE trial was
completed in 2006, but had never been published. When the
results were later published in early 2008, it was found that
Vytorin did not appear to provide cardiac protection. The
Senator asked for all studies published on Vytorin and for
payments made to independent physicians who had advised the
companies on the drug.
Senator Grassley first sent the companies a letter
discussing the companies' internal emails which implied that
officials from the companies may have been interfering with the
ENHANCE trial, which was being conducted by academics in
Europe. The Federal Government spent hundreds of millions of
dollars on Vytorin after the ENHANCE trial was complete, but
before it was published.
On December 9, 2010, the FDA responded to Senator
Grassley's November 14th letter regarding the ENHANCE study
involving Vytorin, an FDA approved drug in 2004 that is a
combination of the statin simvastatin and ezetimibe. The FDA
acknowledged, as noted in its public communication of the final
clinical study report of ENHANCE on January 8, 2009, that the
difference in changes in carotid artery thickness between the
Vytorin group and the simvastatin-only group was not
statistically significant.
An ongoing trial, Improved Reduction of Outcomes: Vytorin
Efficacy International Trial (IMPROVE-IT), is studying the
effect of Vytorin vs. simvastatin alone in approximately 18,000
patients. Results are expected in 2012.
Vytorin's current labeling states, ``No incremental benefit
of Vytorin on cardiovascular morbidity and mortality over and
above that demonstrated for simvastatin has been established.''
Pharmaceutical Industry Funding of National Alliance on Mental Illness
(NAMI)
Reports in the New York Times claim that money from the
pharmaceutical industry shapes the practices of non-profit
organizations which purport to be independent in their
viewpoints and actions. It is alleged that pharmaceutical
companies give money to non-profits in an attempt to garner
favor in ways that increase sales of their products. Senator
Grassley wanted to know if the National Alliance on Mental
Illness (NAMI) accepted pharmaceutical funding and what kind of
influence this funding had on its operations.
Senator Grassley received a response from NAMI National,
which reported that it received $28,659,300 from pharmaceutical
companies from 2005 to 2008. It also stated that there are
approximately 1,000 NAMI affiliates throughout the country.
NAMI National stated it could not detail the financial
relationships affiliates may have with pharmaceutical
companies. Senator Grassley then sent letters to 51 various
NAMI affiliates requesting financial records on monies received
from pharmaceutical companies and from NAMI National.
All but three (Alabama, Arizona, Connecticut) of the NAMI
affiliates responded. All stated they accept unrestricted
contributions from pharmaceutical companies.
Senator Grassley sent another letter to NAMI National to
ask what steps it was taking to help state chapters make their
sources of funding transparent. He asked what NAMI National was
doing to ensure that NAMI state chapters use money properly.
Finally, Senator Grassley inquired if NAMI state chapter
leaders were required to complete and file conflict of interest
forms.
NAMI National responded that NAMI's chartered state
organizations are independently incorporated and that NAMI
National does not have direct oversight on the operations.
However, for the last 2 years NAMI has undertaken a Standards
of Excellence process that will include expectations for
maintenance of independence, conflict of interest procedures,
and transparency.
Industry Funding of Non-Profit Medical Organizations
Senators Grassley and Kohl wrote to the American Academy of
Orthopedic Surgeons (AAOS) regarding reports in the New York
Times of the lack of transparency in payments from medical
companies to non-profit organizations that purport to be
independent. The Senators requested policies for accepting
industry funding and whether the AAOS allows companies to place
restrictions on industry funding.
The AAOS responded on July 28, 2009 that no money was
received from foundations established by medical device or
pharmaceutical companies. It also reported that it did not
accept support from commercial entities that place restrictions
on support. The Academy retains complete responsibility,
control, and decision-making authority for all of its programs.
In addition, Senator Grassley wrote to 33 nonprofit medical
organizations for information about the financial support they
get from the pharmaceutical, medical device and insurance
industries. The Senator stated that the organizations have a
lot of influence over public policy. Transparency in industry
payments would lead to accountability.
Department of Homeland Security
Naturalization of Times Square Bomber Faisal Shahzad
After learning the alleged Times Square bomber and
terrorist Faisal Shahzad had become a naturalized U.S. citizen
in 2009 even though he had been under suspicion by the Joint
Terrorism task Force, Senator Grassley asked the Department of
Homeland Security (DHS) to answer a number of questions and
provide certain documents regarding his naturalization. He
stated that Shahzad's recent naturalization raises questions
about how thoroughly potential citizens are being vetted before
being granted the privileges of U.S. citizenship.
On July 7, 2010, the Office of Legislative Affairs at DHS
responded to Senator Grassley's inquiry. Citing an exemption
under the Freedom of Information Act (FOIA) and the Privacy
Act, DHS asserted incorrectly that it cannot provide answers to
the Senator's questions absent a written request from the
Chairman of a committee or subcommittee. However, 552a(b)(9)
of the Privacy Act permits the Executive Branch to provide
information that would otherwise be protected by the Act to
Congress or a ``committee or subcommittee thereof.'' The
Executive Branch interprets this exemption to only apply if
there is a ``request'' from the Chairman. However, the one-and-
a-half page DOJ/OLC opinion to that effect cites no legal
authority to support its conclusion. By contrast, the Second
Circuit has held that information sent to a Congressman in his
official capacity as a member of a subcommittee fell ``squarely
within the ambit of 552a(b)(9).'' See Devine v. United
States, 202 F.3d 547, 551 (2nd Cir. 2000).
Lack of Progress in Establishing Visa Security Units
The Homeland Security Act of 2002 required that DHS
personnel be physically stationed at every visa-issuing post to
screen applications for security concerns. This requirement
grew out of the lax visa processing safeguards that allowed the
9/11 hijackers to come to the United States despite their
suspicious and incomplete visa applications. Congress seriously
considered taking the visa issuance function away from the
State Department entirely. However, establishing a DHS presence
through Visa Security Units (VSUs) was the compromise position
adopted.
After learning that DHS had established only 14 of the
approximately 40 VSUs in overseas posts identified as high
risk, Senator Grassley asked Secretary Clinton of the
Department of State (State) to provide a briefing on the steps
that it will take to speed the process of establishing the
VSUs. Additionally, he asked the Secretary to answer a series
of questions regarding Umar Farouk Abdulmutallab's entry into
the U.S.
The Senator followed that letter with a request on February
18, 2010, for State to reverse its decision to deny a VSU in
Jerusalem. State responded that it is actively working to
improve the Visa issuance process and that it had plans to open
three VSUs, including Jerusalem, soon. Though State did not
provide the requested documents, it did allow staff members to
review them during a subsequent meeting.
Allegations of Deficiencies in CBP's Revenue Collection Program
In November 2009, Senator Grassley sent a letter to the DHS
regarding allegations of deficiencies in Customs and Border
Protection's (CBP) revenue collection program. Specifically, a
former auditor with CBP contacted Senator Grassley and reported
that employees of the CBP were not effectively performing the
functions of their jobs, leading to loss of substantial revenue
for the United States. In addition, CBP was routinely reducing
fines and interest payments, and auditors lack the independence
from politicization to effectively perform their jobs. Since
these allegations had previously been provided to the
Secretary, the Senator requested an update on the current
status of DHS's review of the allegations and requested that
the DHS Office of Inspector General (OIG) conduct an audit of
all trade compliance and revenue collection programs. The OIG
responded that it planned to address the issues raised by the
Senator with a series of audits set to begin in December 2009.
Federal Bureau of Investigation
Cheating on DIOG Exam
The Federal Bureau of Investigations (FBI) required all
Special Agents, Task Force Officers, Intelligence Analysts,
Investigative Assistants, and all relevant individuals take the
Domestic Investigations and Operations Guide (DIOG)
examination. This exam required 16 hours of instructions
followed by an open book exam that a typical agent required 2
to 5 hours to take. To pass this exam, a score of 80 percent or
better was needed. The test taker was not allowed to consult
with anyone regarding the test. The last question on the test,
question 51, asked if the examiner had consulted with anyone
while taking the test. Many of the individuals did not get the
required 80 percent the first time they took the exam.
Senator Grassley learned that high ranking FBI officials
cheated on the DIOG exam and asked what the Director of the FBI
was doing about these allegations, since historically there has
been a disparity of punishment between the rank and file FBI
agents and top management.
The FBI responded to Senator Grassley that its
investigation determined that four top ranking individuals did
cheat on the exam. One of the individuals retired before any
punishment could be meted. The other three individuals are
pursuing their options of requesting a hearing to review the
proposed penalties.
On August 12, 2010, Senator Grassley sent a letter to the
Department of Justice (DOJ) OIG requesting a briefing on the
investigation that it was conducting regarding this matter. He
wanted to know why and when OIG took over the investigation.
The Senator was concerned that the OIG deferred the case
regarding Assistant Director Joseph Perichini and two Special
Agents in Charge.
Mismanagement of Resources Available for Counterterrorism Investigation
and Retaliation Against FBI Whistleblower
Senator Grassley testified at a House Judiciary Committee
hearing along with the FBI's highest-ranking Arab American
agent, Bassem Youssef, in May 2008. At that hearing, Youssef
revealed that the FBI's International Terrorism Operations
Section (ITOS) was staffed at only 62% of the funded staffing
level. Following the hearing, Senator Grassley requested, along
with the Chairmen of the House and Senate Judiciary Committees,
that GAO conduct a review of the FBI's human capital strategy
in order to verify and explain the reasons for the severe
understaffing of critical FBI units such as ITOS. The GAO is
working on that assessment. However, GAO encountered
significant obstacles from the FBI in conducting its review.
The FBI refused to provide information necessary for GAO to
conduct its work on the grounds that its functions are funded
from the National Intelligence Program budget and are allegedly
not subject to GAO review. The Congressional co-requestors of
GAO's work have explained to DOJ and FBI representatives that
GAO's authority is sufficient and that the agency's objections
to the information requests have no legal basis.
Preferential Treatment Wrongfully Being Afforded to Supervisory FBI
Personnel in Disciplinary Matters
In May 2009, the DOJ OIG released an audit report that
described a perceived double standard in the FBI's disciplinary
system. In general, the OIG found that: (1) allegations against
supervisors were found to be unsubstantiated at a higher rate
than that of non-supervisors; (2) almost all penalties against
Senior Executive Service (SES) supervisors were mitigated; and
(3) most of the reasons for the mitigation of the penalties
were unreasonable.
Mishandling of Anthrax Investigation
Senator Grassley has closely followed the FBI investigation
of the mailings of letters laced with anthrax to several
targets in the United States, including members of Congress and
the national media. Until late 2008, the investigation had
yielded no criminal charges. Senator Grassley expressed
dissatisfaction with the FBI's refusal to provide Congress with
periodic briefings on the status of the investigation. He
requested both a briefing on the status of the investigation
and a number of documents and records relating to the case. The
Attorney General responded with an initial refusal to provide
either the requested documents or a briefing, citing the DOJ's
policy against disclosing non-public information concerning
pending law enforcement activities and prosecutions. However,
following additional negotiations, the FBI Director provided a
briefing to Judiciary Committee Chairman Patrick Leahy, Ranking
Member Arlen Specter, Senator Grassley, and their staff.
In July 2008, Dr. Bruce Ivins died from an apparent
overdose of acetaminophen. Following his death, the FBI
announced that Dr. Ivins had been their lead suspect and they
were about to arrest him for the anthrax killings. However,
with his death, the FBI said it would begin the process of
closing the anthrax investigation.
Since Dr. Ivins's death, the FBI has provided several
briefings Congressional staff. However, significant questions
remain unanswered about the scientific evidence relied upon by
the FBI, why that evidence failed to lead them to Dr. Ivins
much earlier in the investigation, why the FBI entrusted Dr.
Ivins with samples of the attack material during the
investigation, and why Dr. Ivin's mental health issues did not
preclude him from working with Anthrax professionally in a
government laboratory. Senator Grassley has called for an
independent inquiry to assure the public that the FBI's
decision to close its investigation is appropriate.
In July 2009, the National Academy of Sciences (NAS) began
an independent review of the FBI's scientific evidence. NAS
released its report on February 15, 2011. The report found that
the scientific evidence did not conclusively support the FBI's
claim that the anthrax found in the letters ``matched'' the
anthrax found in Dr. Ivins's lab.
Passport Availability for Delinquent Taxpayers and Sex Offenders
Senators Baucus and Grassley requested that the GAO examine
passport issuance procedures at the State Department to assess
their effectiveness in preventing certain classes of passport
applicants from receiving travel documents, including those
with tax debts and sex offenses. Initially, the State
Department refused to provide GAO with access to the data
needed to conduct its audit. Resistance from the State
Department caused significant and unreasonable delays in GAO's
work. However, GAO eventually obtained enough information to
conduct its review and the report of its findings was released
on June 15, 2010, report number GAO-10-643.
National Security Letters
On March 9, 2007, the DOJ OIG released a report entitled,
``A Review of the Federal Bureau of Investigations' Use of
National Security Letters.'' The OIG report detailed the FBI's
use of so-called ``exigent letters'' to circumvent the National
Security Letter statutes. Under a statutory provision, phone
companies are allowed to voluntarily provide phone records in
an emergency situation when requested by the FBI via a National
Security Letter. However, the OIG report highlighted that the
exigent letters issued by the FBI did not cite that provision
and implied that production of the records was compulsory.
The Inspector General's report describes how an FBI
headquarters division known as the Communications Analysis Unit
(CAU) obtained information on about 3,000 telephone numbers by
issuing 739 of these ``exigent letters.'' According to the
report, the letters ``contained factual misstatements,''
claiming that the FBI had submitted a subpoena to a U.S.
Attorney's office when, in fact, no subpoena had been filed.
Moreover, the FBI often issued those letters even though there
was no emergency. The FBI promised to deliver the subpoenas
later but never did so.
In March 2008, the OIG completed a follow-up of the FBI's
use of NSLs and found that the FBI had made significant
progress in addressing the concerns raised in the earlier
report. In addition, the OIG is conducting a follow-up review
jointly with the FBI's Inspection Division to determine who
should be held accountable for issuing the improper exigent
letters. In April 2009, Senator Grassley sent a follow-up to
the OIG asking for the status of that report. The final report
was released on January 20, 2010, and contained a number of
recommendations for the FBI. The report also stated that the
FBI has not issued any exigent letters since the first OIG
report in March 2007.
Unimplemented OIG Recommendations from Robert Hanssen Investigation
In May 2010, Senator Grassley asked the DOJ OIG to provide
the status of FBI's implementation of recommendations that came
out of the OIG's review of the Robert Hanssen spy case. The OIG
concluded in its 2003 review of this case that, ``Robert
Hanssen did not escape detection because he was a `master spy'
who was extraordinarily clever and crafty, but because of
longstanding systemic problems in the FBI's counterintelligence
program and a deeply flawed internal security program.'' As a
result, the OIG made 21 recommendations to improve the FBI's
internal security and its ability to deter and detect espionage
by its own employees. On July 26, 2010, the DOJ OIG responded
to Senator Grassley's letter and advised that the FBI has
closed seventeen of the twenty-one OIG recommendations.
OIG Oversight
Department of Housing and Urban Development--Lifetime Sex Offenders
Living in Public Housing
The Housing and Urban Development (HUD), Office of
Inspector General (OIG) released an audit report which stated
that approximately 2,094 to 3,046 lifetime registered sex
offenders are being subsidized by HUD, which is illegal
according to a provision in the Quality Housing and Work
Responsibility Act of 1998. Senator Grassley wanted to know
what HUD was doing to address this concern. He also wanted a
listing of all Public Housing Authorities where these sex
offenders reside. Finally, the Senator wanted to know what HUD
intended to do with the sex offenders residing on their
properties.
HUD replied to the Senator's letter on October 1, 2010,
stating that it was currently exploring options to address the
issue of lifetime registered sex offenders residing in
federally assisted housing. The options noted were working with
Congress on legislation to address the issue and partnering
with the National Crime Information Center (NCIC) to conduct
database matching between NCIC's and HUD's tenant information
databases. Additional steps being taken by HUD include
development and implementation of Lease Addendum that
strengthen the language concerning lifetime registered sex
offenders who were wrongly admitted or committed the crime
after admission to federally assisted housing. HUD is also
considering a self-certify requirement for new applicants and
current tenants.
Employees of U.S. Postal Service Filing False Health and Injury Claims
A former U.S. Postal Service (USPS) employee reported to
Senator Grassley inaccurate injury and illness recordkeeping
submissions by USPS employees in Des Moines, IA to the
Department of Labor. The former USPS employee provided
documents from the Occupational Safety and Health
Administration (OSHA) that showed significant violations of law
by the USPS. The Senator had earlier written OSHA regarding the
Des Moines issues and received a response from OSHA staff in
Washington, DC that there were no violations of law. Letters
were sent to the Department of Labor and to U.S. Postal Service
Office of Inspector General. USPS OIG replied June 8, 2010,
stating that it would examine the circumstances described in
Senator Grassley's letter.
Library of Congress OIG
On October 6, 2010, Senator Grassley sent a letter to Dr.
James Billington, Librarian of Congress, in response to OIG
oversight work involving the Library of Congress. The Inspector
General reported the following interference from the Library of
Congress Office of General Counsel (OGC): (1) the OGC told
Library of Congress employees that reporting certain activities
to the OIG is optional but the same activities require
mandatory reporting to OGC; (2) OGC unwillingness to change
agency regulation requiring employees to report thefts of
library property to U.S. Capitol Police rather than to OIG; and
(3) the OGC erroneously stated that management does not have to
report employee misconduct to the OIG unless it is potentially
criminal in nature.
The OGC and OIG have since worked together to fashion
language to afford OIG the necessary law enforcement authority
to perform its mandated duties. This language was sent to the
Senate Rules Committee Chairman Schumer and House
Administration Committee Chairman Brady in August 2009 for
their consideration.
DOI OIG--Cooperative Agreements and Cost Sharing Programs
On September 22, 2010, Senator Grassley wrote to the Acting
Inspector General for the Department of Interior (DOI)
regarding three separate reports the OIG published on the DOI's
use of cooperative agreements and cost sharing programs, and
the issues that these reports raised. The Senator sent the
letter after a staff briefing by OIG, which disclosed that
cooperative agreements have less stringent rules than grants or
contracts and participants do not have to meet Federal
Acquisition Regulation (FAR) requirements. The OIG reports also
documented that matching funds were poorly documented and that
for every dollar spent, only 12 cents in matching contributions
could be adequately supported. Questionable relationships and
funding activities were noted by the OIG, as well as, concerns
about the ``lack of competition'' for funding awards, the lack
of program documentation and ``inadequate training'' for grants
administrators.
As a result, Grassley's letter requests, among other
things, for fiscal years 2008-2010, the total amount of DOI
funding distributed through cost sharing and cooperative
agreements, a listing of all cost sharing programs and
cooperative agreements within DOI, and any and all
documentation requiring that Stimulus funding be distributed
through cooperative agreements.
Oversight of USDA Programs
In January 2009, Senator Grassley asked the Inspector
General for the Department of Agriculture to look into
allegations involving abuse, wasteful and excessive spending,
and mismanagement surrounding the United Soybean Board (USB)
and the United States Soybean Export Council (USSEC). In
addition, the Senator asked the OIG to conduct a complete and
thorough review of the Agricultural Marketing Service (AMS)
oversight activities involving check-off funds and the
administration of these funds by the USB. He also asked the OIG
to review Foreign Agricultural Service (FAS) controls over
funds provided for increasing soybean export activities. This
request resulted from growing concerns about internal controls
and agency oversight of the FAS and the AMS. These are two
critical entities representing U.S. farmers and the food and
agricultural industry of which the USDA has oversight. The OIG
agreed to conduct an in-depth review of the allegations.
GAO Requests
Review of Issues Related to Oversight of LTCHs
In March 2010, Senators Baucus and Grassley asked the
Government Accountability Office (GAO) to examine the level and
type of oversight that is conducted with respect to patient
care provided at long-term care hospitals (LTCHs) compared to
other facilities and long-term care settings, including
hospitals and skilled nursing facilities. As part of this, the
Senators requested information on what types of quality and
patient safety information the Centers for Medicare & Medicaid
Services (CMS) collects regarding LTCHs. Finally, they
requested an examination of the coordination between CMS, state
survey and certification agencies, and private accrediting
entities to ensure that LTCHs are providing quality care to
Medicare beneficiaries. This request was in response to an
article in the New York Times that stated that these facilities
face little scrutiny, and the lack of scrutiny has led to
patient injury and death. The Senators also sent a request for
information to Select Medical Corporation, as it was
specifically mentioned as a LTCH in the article that provided
substandard care.
Request for GAO Examination of DOJ
In December 2009, Senator Grassley asked GAO to evaluate
Department of Justice (DOJ) actions for implementing its
internal control assessment over Recovery Act funded programs.
The Senator expressed concerns regarding the implementation of
DOJ's agency plan and internal control activities established
to mitigate the risk of improper payments or mismanagement of
Recovery Act dollars. Senator Grassley asked the GAO to: (1)
determine the actions DOJ has taken to evaluate the
effectiveness of its internal control assessment over Recovery
Act activities; (2) identify the corrective actions DOJ has
implemented to address weaknesses identified; and (3) review
the effectiveness of DOJ's internal control activities to
prevent, detect, and recoup the misuse of Recovery Act funds.
Request for GAO Examination of HCFAC
In December 2009, Senator Grassley asked GAO to update its
April 2005 Health Care Fraud and Abuse Control (HCFAC) report.
That report had identified several weaknesses including: (1)
some expenditure data was not properly captured in agency
information systems, (2) non-adherence to accounting policy for
select HCFAC expenditures, and (3) lack of supervisory review
procedures for deposits. Specifically, the Senator wanted to
know the reliability of fiscal year 2008 amounts reported as
deposits to the trust fund and appropriations from the trust
fund. He also sought information about what accountability
mechanisms, if any, the Department of Health and Human Services
and Department of Justice had implemented to improve internal
controls over HCFAC program expenditures since GAO's April 2005
report. GAO expects to issue the report in Spring 2011.
Request for GAO Examination of FBI Protocols
In December 2009, Senator Grassley asked GAO to review the
status of FBI's corrective actions to determine whether or not
they have been appropriately implemented to address the issues
identified in the GAO's 2006 report on the FBI's Trilogy
project. That report found that the FBI's review and approval
process for contractor invoices was inadequate and that the FBI
did not maintain accountability over computer equipment
purchased for the Trilogy project. The GAO suggested numerous
recommendations for the FBI and General Services Administration
to improve the process.
PBGC Strategic Planning
Acting on concerns about the Pension Benefit Guaranty
Corporation's (PBGC) preparedness to manage a potentially
daunting workload with contractors, Senator Grassley asked the
GAO to conduct a study that addresses the issue. This was of
particular concern because the PBGC was expected to receive a
large influx of pension plan terminations due to the economic
downturn.
Administrative Controls at NARA
In response to the loss of a hard drive containing data
from the Clinton Administration, Senator Grassley asked GAO to
undertake a review to assess how effectively and efficiently
the National Archives and Records Administration (NARA) is
carrying out its mission to ensure that Federal and classified
records and information are managed, secured, and preserved.
The Senator was interested in both its information security
program and the larger picture of NARA's organization and
management, including the internal controls and activities
(i.e., policies, procedures, and mechanisms), that NARA has in
place to carry out its mission and address program risk in an
age of rapid change.
SSA's Ticket to Work Program
In July 2009 Senator Grassley asked GAO to examine the
Social Security Administration's (SSA) Ticket to Work program.
The program is intended to help transition disability
recipients to self-sufficiency through temporary training
assistance. However, there were concerns that the program had
become merely a little-known way to supplement disability
payments by working while maintaining disability benefits
indefinitely.
Other Oversight Activities
Nonpayment of Taxes by Medicare Contractors
Acting on a Government Accountability Office (GAO) report
that stated that thousands of health care providers who receive
Federal monies through the Medicare and/or Medicaid program owe
billions of dollars in unpaid taxes, Senator Grassley asked the
Internal Revenue Service (IRS) to describe all of the
collection activities and other actions taken by the agency
subsequent to the GAO referral. On January 20, 2010, President
Obama issued a memorandum directing the IRS to review the
certifications firms submit when bidding for Federal contracts,
showing they are up-to-date on their taxes. IRS was instructed
to report to the White House within 90 days on the accuracy of
those certifications. The memorandum further requires other
agencies to evaluate how their contracting officers deal with
companies who are delinquent on their taxes. The Office of
Management and Budget is directed to make contractor tax
certifications available in a government-wide procurement
database. The IRS responded that it has taken action or is in
the process of some sort of enforcement action on all of the
providers listed in the GAO report.
International Trade Commission, Unauditable Financial Statements for
Fiscal Year 2009
The accounting firm of Castro and Company attempted to
conduct an audit of the International Trade Commission (ITC)
but the financial statements for fiscal year 2009 were not
auditable. According to the ITC, it migrated to a new financial
system that did not account for resources to monitor internal
controls. This caused the ITC to fail to detect errors which
resulted in the auditor's inability to render an opinion on its
financial statements. The ITC responded to Senator Grassley's
inquiries by letter on January 11, 2010, and a briefing was
held on January 15, 2010. The ITC stated the change to a new
financial system caused the auditor not to be able to render an
opinion. The ITC intends to return to good standing in fiscal
year 2010 and to ensure that its future financial statements
are timely and accurate. In the meantime, it does not intend to
destroy any fiscal year 2009 financial documents.
On March 17, 2010, the ITC provided a copy of memorandum
CO80-HH-004, dated March 3, 2010, from the Commission to the
Commission's Inspector General titled, ``Management Decisions
on Recommendations Found in the Independent Auditor's Auditor
Audit Report and Management Letter Concerning the Audit of the
U.S. International Trade Commission's Financial Statements for
Fiscal Year 2009.'' The Chairman also stated that while the
audit reports did identify a number of shortcomings, in no
instance did they find any waste, fraud, or abuse.
Avandia
The committee initiated an inquiry into the diabetes drug,
Avandia, and the FDA's response to reports that the drug poses
serious patient health risks. According to a study based on a
review of 42 clinical trials and published in the New England
Journal of Medicine, Dr. Steve Nissen of the Cleveland Clinic
found that Avandia increases the likelihood of heart attacks
(Nissen Study). As a result of this determination, the
committee sent letters to the FDA and to Avandia's sponsor,
GlaxoSmithKline (GSK), to determine why it did not conduct
long-term safety studies, instead favoring small, short-term
trials. Additionally, the committee wanted to know what the FDA
and GSK knew about potential adverse events related to the
drug. The FDA later hosted a safety panel on Avandia, which
recommended keeping the drug on the market.
The committee also examined the unauthorized release of the
Nissen Study to GSK by Dr. Steven Haffner. Dr. Haffner was
contracted by the New England Journal of Medicine to peer
review Dr. Nissen's study for quality. However, Dr. Haffner
faxed a copy of the draft study to GSK weeks before its
official release. Senators Baucus and Grassley sent a letter to
GSK asking the company what it did once it received the study.
Senators Baucus and Grassley also sent a letter to the Food
and Drug Administration to report the response received from
GSK regarding Avandia. The Senators learned that GSK apparently
failed to publish studies that found problems with Avandia. In
internal emails, executives expressed concern that their
product did not stack up well with its competitor, ACTOS, and
GSK told committee investigators that it failed to provide the
FDA a document describing heart attack risks while using
Avandia.
BBG and the Middle East Broadcasting Networks
In December 2009, Senator Grassley began an inquiry into
the Broadcasting Board of Governors (BBG) and its relationship
with the Middle East Broadcasting Networks (MEBN). A previous
employee of MBN stated that he was fired after exposing
corruption and mismanagement to the Department of State Office
of Inspector General. He alleged that a number of MBN
journalistic code of ethics violations occurred at its
satellite company, Radio Sawa, because there was a lack of
management on site. However, the most serious of these ethical
violations seems to have occurred in March 2008, when Radio
Sawa aired an interview with an unknown Iraqi who called for
the killing of more Americans in Iraq. According to a
transcript of the March 24, 2008 broadcast, provided by Dr.
Awadh, an unknown Iraqi stated on air that, ``Occupation is
occupation of Iraq. We must resist them and kill more of them,
more than 4,000, more than 4,000. Had they stayed in their
country, they wouldn't have sustained 4,000 death toll.'' He
also raised allegations of financial irregularities and
mismanagement within Radio Sawa's bureau in Baghdad. Senator
Grassley sent a letter to the BBG and the Department of State
OIG asking these organizations to respond to these allegations.
On December 22, 2009, Harold Geisel, Deputy Inspector
General, responded in a letter to Senator Grassley. The letter
addressed the Senator's concerns and provided previous OIG
reports concerning MBN. On March 2, 2010, Senator Grassley sent
another request to the Department of State OIG after reviewing
its response to his previous letter. The Senator was concerned
that the allegations had not been fully investigated and the
investigation left many issues unresolved. On March 5, 2010,
the OIG provided a reply that addressed the Senator's concerns
and included copies of OIG letters to the Department of State,
outlining its recommendations.
Assisted Living Facilities Evicting Medicaid Residents
In recent years the long-term care community has
experienced significant shifts from nursing home care to
alternatives such as assisted living facilities (ALFs). A
number of companies that operate ALFs have begun terminating
their Medicaid provider agreements and evicting Medicaid
residents. Senator Grassley sent a letter to Assisted Living
Concepts, Inc., a leading provider of assisted living care,
requesting information on how many ALFs it owns or operates and
how many Medicaid beneficiaries have been evicted or had their
residency agreements terminated. Assisted Living Concepts
responded that due to the inadequate level of reimbursement
provided, it canceled Medicaid contracts with some states and
stopped accepting new Medicaid agreements.
False Claims Act Letters
Senator Grassley sent letters to 16 pharmaceutical
companies requesting information on their current policies and
procedures regarding the False Claims Act and how they educate
their employees about it. The letters were a follow-up to
letters the Senator sent to the companies in 2005 after
convening a two-day hearing titled, ``Medicaid Waste, Fraud and
Abuse: Threatening the Healthcare Safety Net.'' In the follow-
up request, the Senator also wanted to know how the companies
handled False Claims Act allegations.
MIT Professor Dr. Jonathan Gruber Testimony on Health Care While
Receiving Money from HHS
On January 26, 2010, Senators Grassley and Enzi wrote
Massachusetts Institute of Technology (MIT) regarding the
testimony of Dr. Jonathan Gruber. Dr. Gruber testified before
Congress promoting and defending the Administration's preferred
health care reform policies, while receiving nearly $400,000
from the Department of Health and Human Services for various
services. The economic interest he was receiving should have
been disclosed prior to the testimony, so that Congress could
give his testimony the proper weight.
In the February 23, 2010 response to the request, Dr.
Gruber failed to answer any of the questions posed. The
Senators wrote to MIT again on March 17, 2010. They requested
meaningful responses from Dr. Gruber. They also requested that
MIT provide information regarding whether, and if so, how the
institution monitors the financial interests of its faculty and
how it manages conflicts of interest that may arise.
On April 8, 2010, MIT responded that MIT's faculty members
annually submit an ``MIT Faculty Report on Outside Professional
Activities and Interests,'' which is reviewed on all levels,
including the University president. With respect to Professor
Gruber, MIT stated he engaged in consulting work for the
Department of Health and Human Services during the past year as
part of his outside professional activities. He has disclosed
this activity on his most recent ``Faculty Report on Outside
Professional Activities and Interests.''
On June 15, 2010, Senators Grassley and Enzi sent another
letter to MIT regarding Dr. Gruber and his failure to respond
to an earlier letter. In this letter, the Senators requested
every ``Faculty Report on Outside Professional Activities and
Interests'' Professor Gruber had submitted from January 1, 2008
to the present, any communications regarding potential
conflicts of interest or outside activities submitted, and a
detailed description of MIT's efforts to monitor faculty
conflicts of interest.
Office of Personnel Management and the Excessive Costs of Higher
Education for Executive Training
Senator Grassley examined the high cost of executive
leadership training provided to Federal Government employees
and the failure of the Office of Personnel Management (OPM) to
track these costs. For example, a 4-week program titled,
``Leadership for a Democratic Society,'' at the Federal
Executive Institute costs $18,375. A 4-week course at the
Harvard Kennedy School's Senior Executive Fellows program costs
$18,300. And, a five-day course by the Center for Creative
Leadership costs between $6,200 and $10,600. These costs are
much higher than what a student attending a public college
would pay. The Senator requested information on how many
government executives participated in these programs and who
paid for the training. Letters went to OPM, the Center for
Creative Leadership, the John F. Kennedy School of Business,
and the Federal Executive Institute.
OPM responded that since December 31, 2006, in response to
5 CFR 410.601, agencies have been required to submit
information monthly on all training events, including executive
training. This information will be public and placed on the
website: www.data.gov. OPM stated it is up to agencies to
determine how much to spend on training. On October 7, 2010,
Senator Grassley wrote a letter to Director John Berry of OPM
regarding the Harvard University John F. Kennedy School of
Government's ``Senior Executive Fellows'' program and the OPM
Federal Executive Institute (FEI) flagship ``Leadership for a
Democratic Society'' (LDS) program. The Senator requested
information regarding faculty credentials, specific course
descriptions, and comprehensive breakdowns of expenses.
Department of Justice, Civil Rights Division Fund Settlements
Senator Grassley learned that leftover funds garnered
through settlements by the Civil Rights Division (CRD) have
been diverted to third parties not affiliated with the
settlement. The payments are made from money remaining in
victim compensation funds after no more victims can be
identified. Rather than returning the remainder to the
defendant, it is paid to ``qualified organizations'' who serve
the ``victim group.'' Senator Grassley asked who decides what a
``qualified organization'' is, how many settlements have used
this new policy, and whether the Association of Community
Organizations for Reform Now (ACORN) received any such funds.
The Justice Department replied on August 10, 2010. It
indicated that from May 2004 to the Fall of 2009 the Division
required any unclaimed settlement funds to revert to the
defendants. However, under its current practice, the defendants
propose the organization that would receive any unclaimed
funds. If the United States approves, the parties jointly
submit the defendant's proposal to the court for final
approval. Under the current practice, the Division identified
three settlements that utilized the practice, and ACORN was not
identified.
Association of Community Organizations for Reform Now (ACORN)--Using
Grant Money to Support Their Headquarters
The Association of Community Organizations for Reform Now
(ACORN) has received over $40 million in grants and sub-awards
from nine Federal agencies. Internal documents reveal that 20%
of taxpayer funded Federal grants are siphoned away from
grantees and paid to ACORN's national headquarters, independent
of any assistance provided on the grant in question. From 2005-
2009, ACORN national was paid $8 million, money that was taken
away from Federal grants intended to provide assistance to
victims of housing discrimination and to promote fire safety
and other legitimate purposes. Senator Grassley and
Representative Darrell Issa requested that the Departments of
Justice, Homeland Security and Housing and Urban Development
look into this matter and take whatever action deemed
necessary.
AARP Indemnity Health Plans
As a follow-up to an investigation begun during the 110th
Congress, in April 2009 Senator Grassley sent a letter to the
AARP about a number of concerns he had regarding its indemnity
health plans. The Senator expressed concerns that the AARP was
misleading people to believe that this was a full-coverage
health plan or a bridge plan to be used until the person was
eligible for Medicare. He asked AARP a number of questions
regarding how it was addressing those concerns and requested a
follow-up every 6 months.
PBGC Misconduct
After receiving a report that former Pension Benefit
Guaranty Corporation (PBGC) Director Charles E.F. Millard may
have engaged in inappropriate behavior relating to several
potential PBGC contractors, Senator Grassley, along with
Senators Kennedy and Baucus, requested that the Office of
Inspector General of the PBGC provide to them a briefing on the
matter. The OIG agreed to look into the matter and later
provided a report of investigation that confirmed the
allegations. The PBGC agreed to implement a number of
recommendations in an effort to avoid similar problems in the
future.
However, in May 2010, PBGC sent a follow-up letter to the
Senator to more fully explain its previous response. The OIG
had reviewed PBGC's previous response and stated that the
response was both misleading and inaccurate. Senator Grassley
requested that the PBGC inform him of any other information it
provided that was misleading or inaccurate, and requested that
PBGC take whatever administrative action necessary to make sure
it did not happen again in the future.
Director of Pension Benefit Guaranty Corporation's Executive Contacts
After Implementation of its Investment Policy
Committee on Finance Chairman Max Baucus, Ranking Member
Charles E. Grassley along with HELP Committee Chairman Edward
M. Kennedy and Ranking Member Michael Enzi signed a letter to
the Inspector General of the Pension Benefit Guaranty
Corporation (PBGC) requesting further investigation into
Director Charles E.F. Millard's contacts with executives at
companies that were awarded strategic partnership contracts.
Particular concern is contacts the Director sought with
executives of Goldman Sachs following its award of $700 million
of PBGC assets for private equity investments. A response by
the PBGC Inspector General on March 15, 2010, advised that the
investigation has concluded and no charges will be filed.
Legal Services Corporation
Continuing with an investigation that he and Senator Pete
Domenici started in the 110th Congress, in January 2009,
Senator Grassley asked the Office of Inspector General (OIG)
for the Legal Services Corporation (LSC) to review a number of
matters at the LSC including: (1) the LSC president's new
contract, (2) account for the LSC's spending practices, and (3)
management of resources, as LSC faced a possible budget
shortfall and Federal tax dollars provided about 99 percent of
LSC's resources. A December 2007, report by the Government
Accountability Office (GAO) had documented spending by the LSC
on interest-free loans for employees of LSC grantees, late-fee
payments on overdue accounts, questionable contracts for
computer services and lobbyist registration fees. The OIG also
determined that the LSC spent public tax dollars on $14
cookies, limousine rides, premium travel and expensive hotels
for board meetings.
In August 2009, Senator Grassley asked the LSC to provide
all reports, evaluations, and audits (drafts and finals)
conducted by the LSC for Neighborhood Legal Services of Los
Angeles County (NLSLSA) and Philadelphia Legal Assistance
Center (PLAC) for the period of January 1, 2003 through July
31, 2009. He further requested that LSC identify the date(s)
that each such report was completed in draft, completed in
final, made available to the program and made available to the
public. The Senator also asked that LSC advise him of the
amount of Federal funds expended to conduct each on-site review
for NLSLSA and PLAC. On August 28, 2009, the LSC provided the
requested information with a follow-up letter on October 27,
2009. Total expenditures of on-site reviews, which include
travel costs and consultant fees are: NLSLSA--$55,412.98,
PLAC--$7,559.93.
In furtherance of the committee's duty to ensure that the
Legal Services Corporation (LSC) is fulfilling its mission and
responsibilities while safeguarding taxpayer dollars authorized
by Congress for these programs, in July 2009 Senator Grassley
sent a letter to the Senate's Committee on Appropriations
asking that LSC must implement all the outstanding
recommendations made by the LSC OIG and the GAO before it
receives any additional funds. In addition, in October 2009,
the Senator asked the LSC OIG to look into allegations of
various forms of mismanagement at LSC and to verify the
information previously submitted to the committee by LSC.
In addition, Senator Grassley is concerned about reports of
waste, fraud, and abuse occurring at the LSC. There have been
reports of theft of funds within the organization, misuse of
funds, and lack of controls over grants received. GAO found
that the ``LSC has not kept up with evolving reforms aimed at
strengthening internal control over an organization's financial
reporting process and systems.'' They also found ``weaknesses
in LSC's internal controls over grant management and oversight
of grantees that negatively affect LSC's ability to provide
assurance that grant funds are being used for their intended
purposes in compliance with applicable laws and regulations.''
The LSC OIG has also reviewed the LSC and discovered some
unfavorable issues, such as few compliance visits and weak
controls over consultant contract actions. Sources have alleged
that various LSC offices are currently and systematically
destroying Corporation documents, including emails in an
attempt to cover up current and past indiscretions among and
between LSC staff members.
On October 5, 2010, Senator Grassley and Congressman Issa
sent a letter to Chairman Levi and President Fortuno of the LSC
requesting an update on the implementation of GAO
recommendations and corrective actions initiated by LSC that
resulted from previous OIG reports. LSC indicated in a July 21,
2010 letter that the LSC has approved the creation of an
independent task force to review and make recommendations
regarding LSC's fiscal oversight responsibilities. The Senator
and Congressman wanted to know the extent of this oversight
responsibility, specifically if it was limited to ``fiscal''
oversight, and requested copies of the resumes of those serving
on the task force. Secondly, the Senator and Congressman
requested information related to the method LSC employs to
ensure that hired consultants are not collecting both a salary
from their underlying grantee and from the LSC, thereby
creating a potential conflict of interest. Finally, they asked
whether the LSC intends to conduct its meetings in public view
by subjecting its meeting to Sunshine Act provisions.
On October 14, 2010, LSC Chairman, John Levi, responded to
Senator Grassley and Congressman Issa's letter. Levi stated
that in the previous letter LSC ``affirmed our belief in doing
all that we reasonably can to eliminate any possible fraud,
waste and abuse, and affirmed our commitment to ensuring that
Federal funds are used in compliance with the law.'' Chairman
Levi attached a copy of a memorandum outlining all OIG
recommendations and LSC management actions taken in response to
those recommendations.
Aetna's Limited Major Medical Plan
Senator Grassley learned of a health insurance plan offered
by Aetna titled, ``Affordable Health Choices, Limited Major
Medical Plan.'' This plan was purported to provide $150,000 in
coverage. The PPO MAX plan is described as covering 70% in
network ``for covered inpatient and most covered Outpatient
expenses up to $150,000 per person per Coverage Year.'' Further
review of the policy seems to indicate that coverage is limited
to $10,000 for both inpatient and outpatient care. The
insurance buying public could easily be fooled into thinking
the plan covers $150,000 in medical expenses.
Senator Grassley requested a written response by Aetna
detailing how the $150,000 maximum works in conjunction with
the $10,000 limits, how this insurance plan was marketed and
how many plans were sold since 2005. On July 23, 2009, Aetna
responded with the requested information. Aetna claimed that it
was possible to recover $150,000 in medical expenses. It
indicated that some members did have claims of over $100,000
paid and that the marketing materials were not prepared by
Aetna, but rather by the employer's broker.
Waste and Abuse of Resources at NARA
In response to an OIG semiannual report that over 2,400
items had been reported missing during fiscal year 2002-2006,
including servers, tape drives, desktop computers, and laptop
computers with the capability to store personally identifiable
information (PII) and classified information of National
Archives and Records Administration (NARA) property--all with
an acquisition value of approximately $6 million--Senator
Grassley began an inquiry into the operations of the NARA. In
addition, based on acquisition cost, over $540,000 of NARA
property was stolen from NARA's warehouse space in College
Park, MD, before being put into service. Senator Grassley asked
the acting administrator of NARA to respond to a set of
questions regarding how NARA was addressing these problems. At
first, NARA responded with statistical data and vague answers.
So, in June 2009, Senator Grassley sent a follow-up request to
NARA for the information. NARA responded only partially to that
request, prompting another follow-up by Senator Grassley in
August 2009. Finally, in September 2009, NARA responded more
fully to the inquiry and provided the requested information. In
addition, the acting administrator pledged better safeguard of
the records in NARA's custody.
Mishandling of Passports at DOI
In response to a Department of Interior (DOI) Inspector
General Inspection Report that detailed widespread mishandling
and erratic tracking of diplomatic and official passports,
Senator Grassley began an inquiry into the DOI's handling of
such information. The Office of Inspector General (OIG) also
could not account for at least 49 expired passports of former
employees, including former Secretary Gale Norton's diplomatic
passport. Since the OIG estimated that there were over 3,000
official or diplomatic passports issued to DOI employees, the
DOI's gross mismanagement of expired passports and records
poses a great risk for fraud, identity theft, and national
security. In June 2009, Senator Grassley asked the DOI to
respond to a number of questions on the issue, including its
plans on implementing the OIG's recommendations to address the
issue. DOI responded by stating that it takes seriously the
reports issued by the OIG and the findings reported in the May
2009 report on passport offices. As a result, DOI instituted
changes in the operation of its offices immediately after the
OIG conducted the inspection in January 2009. Since that time
DOI completed many of the actions that were recommended by the
OIG to address problems. All of the passports and associated
paperwork have been secured. Expired passports have been
returned to the Department of State to be destroyed, cancelled
or otherwise invalidated. DOI has cancelled the passport of
former Secretary Gale Norton.
OMB Waivers and the LDA
In February 2009, Senator Grassley began an inquiry into
Office of Management and Budget (OMB) implementation of the
President's Ethics Executive Order. Certain political
appointees received waivers allowing them to participate in
matters despite having been involved in the matter as a
lobbyist. Senator Grassley was concerned as it was unclear
exactly how these requirements were being interpreted and
enforced by various agencies, how they interact with the
disclosure requirements in the Lobbying Disclosure Act (LDA),
and how public disclosure of recusals and waivers will be
handled consistently across the government. In response, the
White House Counsel said the Office of Government Ethics (OGE)
would provide guidance across the Executive Branch on the
implementation of the executive order. On March 3, 2009, OMB
failed to address the Senator's questions about publicly
disclosing any future waivers granted to political appointees
with respect to their prior lobbying activities. The remainder
of OMB's response advises that OGE continues to work on
guidance on how LDA filings will be utilized in the wavier and
recusal process for political appointees.
Legislation
S. 882, Drug and Device Accountability Act, Formerly S. 3409
In April 2009, Senator Grassley introduced a bill with the
late Senator Kennedy to improve the Food and Drug
Administration's (FDA) oversight of pharmaceutical drugs and
medical devices. This bill, known as the Drug and Device
Accountability Act of 2009, (DADAA), S. 882, was part of the
Senator's efforts to ensure that America's increasingly
foreign-produced drug and device supply is both safe and
effective.
DADAA would enhance registration of both domestic and
foreign drug and medical device establishments, so that the FDA
knows how many foreign facilities are exporting to the United
States and thus subject to inspection. It would also increase
resources through the collection of user fees so that FDA can
conduct more inspections of overseas facilities. FDA officials
estimated that the agency inspected foreign class II device
makers every 27 years and foreign class III device makers every
6 years. Class III devices are devices that support or sustain
human life, or which present a potentially unreasonable risk of
illness or injury, such as pacemakers and heart defibrillators.
In addition to the provisions related to the registration
and inspection of domestic and foreign drug and device
manufacturers, DADAA included more general authorities and
requirements to enhance FDA's oversight of drugs and devices.
One requirement was for senior officers in drug and device
companies to certify to the FDA that none of the information
and data that is submitted to the agency is false or
misleading. False or misleading certifications could be subject
to civil, as well as, criminal penalties. Another provision was
subpoena authority to facilitate FDA's investigation of safety
violations and other violations of the Federal Food, Drug and
Cosmetic Act.
DADAA also included whistleblower protection for employees
providing information regarding a drug, biological product, or
device.
S. 344, Hedge Fund Transparency Act
As a result of oversight of the Securities and Exchange
Commission's mishandling of a major hedge fund insider trading
case, Senator Grassley introduced the Hedge Fund Transparency
Act in January 2009. The bill would amend section 203(b)(3) of
the Investment Advisers Act of 1940. It would narrow the
current exemption from registration for certain investment
advisers. This exemption is used by large, private pooled
investment vehicles, commonly referred to as ``hedge funds.''
With passage of the Dodd-Frank Wall Street Reform bill,
Congress eliminated the 15 client rule and replaced it with a
test that requires registration of investment advisors who have
more than $150 million in assets under management.
S. 647, The Nursing Home Transparency and Improvement Act of 2009,
Formerly S. 2641
In March 2009, Senator Grassley introduced The Nursing Home
Transparency and Improvement Act of 2009. The driving force
behind this bill was to increase the accountability of owners
and operators of nursing homes that receive billions of dollars
of Medicare and Medicaid funding annually. The legislation
requires nursing homes to disclose their owners, operators and
financiers, as well as undergo annual independent audits. The
bill also calls for the Department of Health and Human Services
to monitor facilities with chronic poor performance and oversee
corrective action. Additionally, the bill would create a
mechanism whereby monetary fines could be levied upon
facilities in cases of deficiencies of care or cause of death
to residents. This bill was incorporated into the Patient
Protection and Affordable Care Act, which was signed into law
on March 23, 2010.
S. 301, The Physician Payments Sunshine Act, Formerly S. 2029
In January 2009, Senators Grassley and Kohl introduced The
Physician Payments Sunshine Act (Sunshine Act). The legislation
requires companies to report payments they make to physicians--
such as gifts, honoraria, and travel--to the Secretary of
Health and Human Services, who is required to post the
information online in a user-friendly format. By working with
advocacy groups, physician organizations, and drug and device
companies, Senator Grassley was able to garner the endorsement
of groups such as the American Medical Association and the
Pharmaceutical Research and Manufacturers of America. Sunshine
Act was incorporated into the Patient Protection and Affordable
Care Act, which was signed into law on March 23, 2010.
NOMINATIONS
Maurice B. Foley, of Maryland, to be a Judge of the United
States Tax Court for a term of 15 years.
Dec. 6, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Richard Sorian, of New York, to be an Assistant Secretary of
Health and Human Services, vice Christina H. Pearson,
resigned, to which position he was appointed during the
last recess of the Senate.
Sept. 13, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Jeffrey Alan Goldstein, of New York, to be an Under Secretary
of the Treasury, vice Robert K. Steel, resigned.
Sept. 13, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Donald M. Berwick, of Massachusetts, to be Administrator of
the Centers for Medicare and Medicaid Services, vice
Mark B. McClellan.
Sept. 13, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Alan D. Bersin, of California, to be Commissioner of Customs,
Department of Homeland Security, vice W. Ralph Basham.
Sept. 13, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Juan F. Vasquez, of Texas, to be a Judge of the United States
Tax Court for a term of 15 years. (Reappointment)
Aug. 5, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Timothy Charles Scheve, of Pennsylvania, to be a Member of the
Internal Revenue Service Oversight Board for a term
expiring Sept. 14, 2015. (Reappointment)
Aug. 3, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Timothy Charles Scheve, of Pennsylvania, to be a Member of the
Internal Revenue Service Oversight Board for a term
expiring Sept. 14, 2010, vice Nancy Killefer, term
expired.
Aug. 3, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Joshua Gotbaum, of the District of Columbia, to be Director of
the Pension Benefit Guaranty Corporation, vice Charles
E. F. Millard, to which position he was appointed
during the last recess of the Senate.
July 19, 2010--Received in the Senate and referred jointly to
the Committees on Finance and Health, Education,
Labor, and Pensions pursuant to Sec. 411(c) of P.L.
109-280.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Donald M. Berwick, of Massachusetts, to be Administrator of
the Centers for Medicare and Medicaid Services, vice
Mark B. McClellan, to which position he was appointed
during the last recess of the Senate.
July 19, 2010--Received in the Senate and referred to the
Committee on Finance.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Alan D. Bersin, of California, to be Commissioner of Customs,
Department of Homeland Security, vice W. Ralph Basham,
to which position he was appointed during the last
recess of the Senate.
Apr. 21, 2010--Received in the Senate and referred to the
Committee on Finance.
May 13, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Jeffrey Alan Goldstein, of New York, to be an Under Secretary
of the Treasury, vice Robert K. Steel, resigned, to
which position he was appointed during the last recess
of the Senate.
Apr. 21, 2010--Received in the Senate and referred to the
Committee on Finance.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Islam A. Siddiqui, of Virginia, to be Chief Agricultural
Negotiator, Office of the United States Trade
Representative, with the rank of Ambassador, vice
Richard T. Crowder, to which position he was appointed
during the last recess of the Senate.
Apr. 21, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Michael F. Mundaca, of New York, to be an Assistant Secretary
of the Treasury, vice Eric Solomon, resigned, to which
position he was appointed during the last recess of the
Senate.
Apr. 21, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Michael W. Punke, of Montana, to be a Deputy United States
Trade Representative, with the rank of Ambassador, vice
Peter F. Allgeier, resigned, to which position he was
appointed during the last recess of the Senate.
Apr. 21, 2010--Received in the Senate and referred to the
Committee on Finance.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Francisco J. Sanchez, of Florida, to be Under Secretary of
Commerce for International Trade, vice Christopher A.
Padilla, resigned, to which position he was appointed
during the last recess of the Senate.
Apr. 21, 2010--Received in the Senate and referred jointly to
the Committees on Finance and Banking, Housing, and
Urban Affairs under authority of the order of the
Senate of Apr. 21, 2009.
June 30, 2010--Committee on Finance. Ordered to be reported
favorably.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Donald M. Berwick, of Massachusetts, to be Administrator of
the Centers for Medicare and Medicaid Services, vice
Mark B. McClellan.
Apr. 19, 2010--Received in the Senate and referred to the
Committee on Finance.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Michael C. Camunez, of California, to be an Assistant
Secretary of Commerce, vice David Steele Bohigian,
resigned.
Mar. 2, 2010--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1082. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Joshua Gotbaum, of the District of Columbia, to be Director of
the Pension Benefit Guaranty Corporation, vice Charles
E. F. Millard.
Nov. 9, 2009--Received in the Senate and referred jointly to
the Committees on Finance and Health, Education,
Labor, and Pensions pursuant to Sec. 411(c) of P.L.
109-280.
May 26, 2010--Committee on Finance. Hearings held.
Jan. 20, 2010--Committee on Health, Education, Labor, and
Pensions. Hearings held. Hearings printed: S. Hrg.
111-685.
May 5, 2010--Committee on Health, Education, Labor, and
Pensions. Ordered to be reported favorably.
May 5, 2010--Reported by Senator Harkin, Committee on Health,
Education, Labor, and Pensions, without printed
report.
June 7, 2010--Senate Committee on Finance discharged pursuant
to Sec. 411(c) of P.L. 109-280 and placed on the
Executive Calendar.
June 7, 2010--Placed on Senate Executive Calendar. Calendar
No. 929. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Robert D. Reischauer, of Maryland, to be a Member of the Board
of Trustees of the Federal Supplementary Medical
Insurance Trust Fund for a term of 4 years, vice John
L. Palmer.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1088. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Robert D. Reischauer, of Maryland, to be a Member of the Board
of Trustees of the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability
Insurance Trust Fund for a term of 4 years, vice John
L. Palmer.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1086. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Robert D. Reischauer, of Maryland, to be a Member of the Board
of Trustees of the Federal Hospital Insurance Trust
Fund for a term of 4 years, vice John L. Palmer.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1084. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Charles P. Blahous, III, of Maryland, to be a Member of the
Board of Trustees of the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability
Insurance Trust Fund for a term of 4 years, vice Thomas
R. Saving.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1085. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Charles P. Blahous, III, of Maryland, to be a Member of the
Board of Trustees of the Federal Supplementary Medical
Insurance Trust Fund for a term of 4 years, vice Thomas
R. Saving.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1087. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Charles P. Blahous, III, of Maryland, to be a Member of the
Board of Trustees of the Federal Hospital Insurance
Trust Fund for a term of 4 years, vice Thomas R.
Saving.
Oct. 15, 2009--Received in the Senate and referred to the
Committee on Finance.
July 29, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Committee on Finance. Ordered to be reported
favorably.
Aug. 5, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Aug. 5, 2010--Placed on Senate Executive Calendar. Calendar
No. 1083. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Michael F. Mundaca, of New York, to be an Assistant Secretary
of the Treasury, vice Eric Solomon, resigned.
Oct. 6, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 4, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 652. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Mary John Miller, of Maryland, to be an Assistant Secretary of
the Treasury, vice Anthony W. Ryan, resigned.
Oct. 6, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 20, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 651. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Feb. 11, 2010--Confirmed by the Senate by Voice Vote.
Richard Sorian, of New York, to be an Assistant Secretary of
Health and Human Services, vice Christina H. Pearson,
resigned.
Oct. 5, 2009--Received in the Senate and referred to the
Committee on Finance.
May 26, 2010--Committee on Finance. Hearings held.
June 30, 2010--Committee on Finance. Ordered to be reported
favorably.
June 30, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
June 30, 2010--Placed on Senate Executive Calendar. Calendar
No. 999. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Charles Collyns, of Maryland, to be a Deputy Under Secretary
of the Treasury, vice Clay Lowery, resigned.
Oct. 5, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 20, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 650. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Feb. 11, 2010--Confirmed by the Senate by Voice Vote.
Carolyn W. Colvin, of Maryland, to be Deputy Commissioner of
Social Security for the term expiring Jan. 19, 2013,
vice Andrew G. Biggs, resigned.
Oct. 1, 2009--Received in the Senate and referred to the
Committee on Finance.
Dec. 9, 2010--Committee on Finance. Hearings held.
Dec. 15, 2010--Committee on Finance. Ordered to be reported
favorably.
Dec. 15, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 15, 2010--Placed on Senate Executive Calendar. Calendar
No. 1229. Subject to nominee's commitment to
respond to requests to appear and testify before
any duly constituted committee of the Senate.
Dec. 22, 2010--Confirmed by the Senate by Voice Vote.
Alan D. Bersin, of California, to be Commissioner of Customs,
Department of Homeland Security, vice W. Ralph Basham.
Sept. 29, 2009--Received in the Senate and referred to the
Committee on Finance.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Islam A. Siddiqui, of Virginia, to be Chief Agricultural
Negotiator, Office of the United States Trade
Representative, with the rank of Ambassador, vice
Richard T. Crowder.
Sept. 24, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 4, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 649. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Michael W. Punke, of Montana, to be a Deputy United States
Trade Representative, with the rank of Ambassador, vice
Peter F. Allgeier, resigned.
Sept. 14, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 4, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 648. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Dec. 22, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Jim R. Esquea, of New York, to be an Assistant Secretary of
Health and Human Services, vice Vincent J. Ventimiglia,
Jr., resigned.
Aug. 6, 2009--Received in the Senate and referred to the
Committee on Finance.
Oct. 15, 2009--Committee on Finance. Hearings held. Hearings
printed: S. Hrg. 111-451.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 647. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
June 22, 2010--Confirmed by the Senate by Voice Vote.
Jeffrey Alan Goldstein, of New York, to be an Under Secretary
of the Treasury, vice Robert K. Steel, resigned.
July 22, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 2, 2010--Committee on Finance. Hearings held.
Aug. 5, 2010--Returned to the President under the provisions
of Senate Rule XXXI, paragraph 6 of the Standing
Rules of the Senate.
Bryan Hayes Samuels, of Illinois, to be Commissioner on
Children, Youth, and Families, Department of Health and
Human Services, vice Joan E. Ohl, resigned.
July 13, 2009--Received in the Senate and referred to the
Committee on Finance.
Oct. 15, 2009--Committee on Finance. Hearings held. Hearings
printed: S. Hrg. 111-451.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 646. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Feb. 11, 2010--Confirmed by the Senate by Voice Vote.
Sherry Glied, of New York, to be an Assistant Secretary of
Health and Human Services, vice Benjamin Eric Sasse,
resigned.
July 9, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 2, 2010--Committee on Finance. Hearings held.
May 27, 2010--Committee on Finance. Ordered to be reported
favorably.
May 27, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
May 27, 2010--Placed on Senate Executive Calendar. Calendar
No. 916. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
June 22, 2010--Confirmed by the Senate by Voice Vote.
Daniel M. Tangherlini, of the District of Columbia, to be
Chief Financial Officer, Department of the Treasury,
vice Peter B. McCarthy, resigned.
June 3, 2009--Received in the Senate and referred to the
Committee on Finance.
July 14, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 308. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
July 24, 2009--Confirmed by the Senate by Voice Vote.
Daniel M. Tangherlini, of the District of Columbia, to be an
Assistant Secretary of the Treasury, vice Peter B.
McCarthy, resigned.
June 3, 2009--Received in the Senate and referred to the
Committee on Finance.
July 14, 2009--Committee on Finance. Hearings held.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 307. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
July 24, 2009--Confirmed by the Senate by Voice Vote.
Ellen Gloninger Murray, of Virginia, to be an Assistant
Secretary of Health and Human Services, vice Charles E.
Johnson, resigned.
June 1, 2009--Received in the Senate and referred to the
Committee on Finance.
Oct. 15, 2009--Committee on Finance. Hearings held. Hearings
printed: S. Hrg. 111-451.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 645. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Feb. 11, 2010--Confirmed by the Senate by Voice Vote.
Rosa Gumataotao Rios, of California, to be Treasurer of the
United States, vice Anna Escobedo Cabral, resigned.
May 18, 2009--Received in the Senate and referred to the
Committee on Finance.
July 14, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 306. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
July 24, 2009--Confirmed by the Senate by Voice Vote.
William J. Wilkins, of the District of Columbia, to be Chief
Counsel for the Internal Revenue Service and an
Assistant General Counsel in the Department of the
Treasury, vice Donald Korb, resigned.
May 12, 2009--Received in the Senate and referred to the
Committee on Finance.
July 14, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 305. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
July 24, 2009--Confirmed by the Senate by Voice Vote.
Carmen R. Nazario, of Puerto Rico, to be Assistant Secretary
for Family Support, Department of Health and Human
Services, vice Wade F. Horn.
May 6, 2009--Received in the Senate and referred to the
Committee on Finance.
July 14, 2009--Committee on Finance. Hearings held.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 304. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Sept. 22, 2009--Confirmed by the Senate by Voice Vote.
Miriam E. Sapiro, of the District of Columbia, to be a Deputy
United States Trade Representative, with the rank of
Ambassador, vice John K. Veroneau, resigned.
Apr. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
June 5, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 303. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Dec. 24, 2009--Confirmed by the Senate by Voice Vote.
Neal S. Wolin, of Illinois, to be Deputy Secretary of the
Treasury, vice Robert M. Kimmitt, resigned.
Apr. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
May 8, 2009--Committee on Finance. Hearings held.
May 12, 2009--Committee on Finance. Ordered to be reported
favorably.
May 12, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
May 12, 2009--Placed on Senate Executive Calendar. Calendar
No. 134. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
May 18, 2009--Confirmed by the Senate by Voice Vote.
George Wheeler Madison, of Connecticut, to be General Counsel
for the Department of the Treasury, vice Robert F.
Hoyt, resigned.
Apr. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
June 5, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 302. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Sept. 8, 2009--Confirmed by the Senate by Voice Vote.
Francisco J. Sanchez, of Florida, to be Under Secretary of
Commerce for International Trade, vice Christopher A.
Padilla, resigned.
Apr. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 2, 2010--Committee on Finance. Hearings held.
Apr. 21, 2009--By unanimous consent agreement, for joint
referral to Committees on Finance and Banking,
Housing, and Urban Affairs.
Apr. 21, 2009--Referred to the Committee on Banking, Housing,
and Urban Affairs pursuant to unanimous consent
agreement to refer jointly to Finance and Banking,
Housing, and Urban Affairs.
May 13, 2009--Committee on Banking, Housing, and Urban
Affairs. Hearings held. Hearings printed: S. Hrg.
111-234.
May 21, 2009--Committee on Banking, Housing, and Urban
Affairs. Ordered to be reported favorably.
May 21, 2009--Reported by Senator Dodd, Committee on Banking,
Housing, and Urban Affairs, without printed report.
June 30, 2010--Reported by Senator Baucus, Committee on
Finance, without printed report.
June 30, 2010--Placed on Senate Executive Calendar. Calendar
No. 998. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Sept. 16, 2010--Confirmed by the Senate by Voice Vote.
Lael Brainard, of the District of Columbia, to be an Under
Secretary of the Treasury, vice David H. McCormick,
resigned.
Mar. 23, 2009--Received in the Senate and referred to the
Committee on Finance.
Nov. 20, 2009--Committee on Finance. Hearings held.
Dec. 23, 2009--Committee on Finance. Ordered to be reported
favorably.
Dec. 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Dec. 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 644. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Apr. 15, 2010--By unanimous consent agreement, the Senate to
proceed to executive session to consider
nomination.
Apr. 15, 2010--Cloture motion presented in Senate.
Apr. 15, 2010--By unanimous consent agreement, debate and
cloture vote to occur on Apr. 19, 2010.
Apr. 19, 2010--Considered by Senate pursuant to an order of
the Senate of Apr. 15, 2010.
Apr. 19, 2010--Cloture invoked in Senate by Yea-Nay Vote. 84-
10. Record Vote Number: 118.
Apr. 19, 2010--By unanimous consent agreement, debate and
vote Apr. 20, 2010.
Apr. 20, 2010--Considered by Senate pursuant to an order of
Apr. 19, 2010.
Apr. 20, 2010--Confirmed by the Senate by Yea-Nay Vote. 78-
19. Record Vote Number: 119.
Demetrios J. Marantis, of the District of Columbia, to be a
Deputy United States Trade Representative, with the
rank of Ambassador, vice Karan K. Bhatia, resigned.
Mar. 17, 2009--Received in the Senate and referred to the
Committee on Finance.
Apr. 30, 2009--Committee on Finance. Hearings held.
May 5, 2009--Committee on Finance. Ordered to be reported
favorably.
May 5, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
May 5, 2009--Placed on Senate Executive Calendar. Calendar
No. 104. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
May 6, 2009--Confirmed by the Senate by Voice Vote.
William V. Corr, of Virginia, to be Deputy Secretary of Health
and Human Services, vice Tevi David Troy, resigned.
Mar. 17, 2009--Received in the Senate and referred to the
Committee on Finance.
Apr. 30, 2009--Committee on Finance. Hearings held.
May 5, 2009--Committee on Finance. Ordered to be reported
favorably.
May 5, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
May 5, 2009--Placed on Senate Executive Calendar. Calendar
No. 103. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
May 6, 2009--Confirmed by the Senate by Voice Vote.
Kathleen Sebelius, of Kansas, to be Secretary of Health and
Human Services.
Mar. 17, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 31, 2009--Committee on Health, Education, Labor, and
Pensions. Hearings held.
Apr. 2, 2009--Committee on Finance. Hearings held.
Apr. 21, 2009--Committee on Finance. Ordered to be reported
favorably.
Apr. 21, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Apr. 21, 2009--Placed on Senate Executive Calendar. Calendar
No. 62. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Apr. 23, 2009--By unanimous consent agreement, debate and
vote on Tuesday, Apr. 28, 2009 with confirmation
subject to an affirmative 60-vote threshold.
Apr. 28, 2009--Considered by Senate pursuant to unanimous
consent agreement of Apr. 23, 2009.
Apr. 28, 2009--Confirmed by the Senate by Yea-Nay Vote. 65-
31. Record Vote Number: 172.
Demetrios J. Marantis, of the District of Columbia, to be a
Deputy United States Trade Representative, with the
rank of Ambassador, vice Peter F. Allgeier, resigned.
Mar. 16, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 17, 2009--Received message of withdrawal of nomination
from the President.
Kim N. Wallace, of Texas, to be a Deputy Under Secretary of
the Treasury, vice Kevin I. Fromer, resigned.
Mar. 16, 2009--Received in the Senate and referred to the
Committee on Finance.
June 5, 2009--Committee on Finance. Hearings held.
July 23, 2009--Committee on Finance. Ordered to be reported
favorably.
July 23, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
July 23, 2009--Placed on Senate Executive Calendar. Calendar
No. 301. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
July 24, 2009--Confirmed by the Senate by Voice Vote.
Alan B. Krueger, of New Jersey, to be an Assistant Secretary
of the Treasury, vice Phillip L. Swagel, resigned.
Mar. 10, 2009--Received in the Senate and referred to the
Committee on Finance.
Apr. 30, 2009--Committee on Finance. Hearings held.
May 5, 2009--Committee on Finance. Ordered to be reported
favorably.
May 5, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
May 5, 2009--Placed on Senate Executive Calendar. Calendar
No. 102. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
May 6, 2009--Confirmed by the Senate by Voice Vote.
Ronald Kirk, of Texas, to be United States Trade
Representative, with the rank of Ambassador
Extraordinary and Plenipotentiary.
Jan. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
Mar. 9, 2009--Committee on Finance. Hearings held.
Mar. 12, 2009--Committee on Finance. Ordered to be reported
favorably.
Mar. 12, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Mar. 12, 2009--Placed on Senate Executive Calendar. Calendar
No. 24. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Mar. 17, 2009--By unanimous consent agreement, debate and
vote Mar. 18, 2009.
Mar. 18, 2009--Considered by Senate pursuant to unanimous
consent agreement of Mar. 17, 2009.
Mar. 18, 2009--By unanimous consent agreement, vote following
debate at 2:00 today.
Mar. 18, 2009--Confirmed by the Senate by Yea-Nay Vote. 92-5.
Record Vote Number: 100.
Timothy F. Geithner, of New York, to be Secretary of the
Treasury.
Jan. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
Jan. 21, 2009--Committee on Finance. Hearings held.
Jan. 22, 2009--Committee on Finance. Ordered to be reported
favorably.
Jan. 22, 2009--Reported by Senator Baucus, Committee on
Finance, without printed report.
Jan. 22, 2009--Placed on Senate Executive Calendar. Calendar
No. 3. Subject to nominee's commitment to respond
to requests to appear and testify before any duly
constituted committee of the Senate.
Jan. 22, 2009--By unanimous consent agreement, debate and
vote Jan. 26, 2009.
Jan. 26, 2009--Considered by Senate per unanimous consent
agreement of Jan. 22, 2009.
Jan. 26, 2009--Confirmed by the Senate by Yea-Nay Vote. 60-
34. Record Vote Number: 15.
Thomas Andrew Daschle, of South Dakota, to be Secretary of
Health and Human Services.
Jan. 8, 2009--Senate Committee on Health, Education, Labor,
and Pensions. Hearings held prior to introduction
and/or referral. Hearings printed: S. Hrg. 111-469.
Jan. 20, 2009--Received in the Senate and referred to the
Committee on Finance.
Feb. 9, 2009--Received message of withdrawal of nomination
from the President.
BILLS AND RESOLUTIONS REFERRED
TO THE COMMITTEE
There were 1532 Senate bills and 15 House bills referred to
the committee for consideration during the 111th Congress. In
addition, 16 Senate and House resolutions (joint, concurrent or
simple resolutions) were referred to the committee.
REPORTS, PRINTS, AND STUDIES
During the 111th Congress, the committee and supporting
joint committees, prepared and issued 6 reports, special
prints, and studies on the following topics:
------------------------------------------------------------------------
Title Document no. To accompany
------------------------------------------------------------------------
APPROVING THE RENEWAL OF IMPORT 111-279........... S.J. Res. 29
RESTRICTIONS CONTAINED IN THE
BURMESE FREEDOM AND DEMOCRACY
ACT OF 2003.
AMERICA'S HEALTHY FUTURE ACT OF 111-89............ S. 1796
2009.
APPROVING THE RENEWAL OF IMPORT 111-63............ S.J. Res. 17
RESTRICTIONS CONTAINED IN THE
BURMESE FREEDOM AND DEMOCRACY
ACT OF 2003.
STAFF REPORT ON CARDIAC STENT 111-57............ ..................
USAGE AT ST. JOSEPH MEDICAL
CENTER.
STAFF REPORT ON GLAXOSMITHKLINE 111-41............ ..................
AND THE DIABETES DRUG AVANDIA.
REPORT ON THE ACTIVITIES OF THE 111-13............ ..................
COMMITTEE ON FINANCE OF THE
UNITED STATES SENATE DURING THE
111TH CONGRESS PURSUANT TO RULE
XXVI OF THE STANDING RULES OF
THE UNITED STATES SENATE.
RULES OF PROCEDURE, SENATE 111-2............. ..................
COMMITTEE ON FINANCE.
------------------------------------------------------------------------
OFFICIAL COMMUNICATIONS
During the 111th Congress, a total of 644 official
communications were submitted to the committee. Of these, 3
were Presidential Messages; 625 were Executive Communications--
these communications include reports to advise and inform the
Congress, required annual or semi-annual agency budget and
activities summaries, and requests for legislative action. The
committee also received 16 Petitions and Memorials.