tv U.S. Senate CSPAN April 19, 2010 12:00pm-5:00pm EDT
i'm not convinced by what i've heard today that the culture will change. i'm not convinced that we will, in fact, institutionalize these things we have talked about so that they continue well beyond your 10 years, and certainly my 10 years. sure, we've, you know, we've bumped up the force structure. we will see some additional spaces. we may see some additional faces, five years from now will both be filled lex will there be a different priority? will change regulations, we would change policies. will even change the laws. but will it really continue?
as i said earlier, we are going to go to war with a lot of contractors. and we are going a lot of folks to oversee them, to take care of them, either that or we're going to go to war in a much more austere way then we are going currently. i know you guys understand it, because you're in this business. you are in the business to provide support, contracting, acquisition. but how do we get the warfighter to appreciate it, long-term? and how do we get the leaders to say i want and harrington to have 10 bodies tomorrow. you folks may not be old enough, i certainly am, to remember the very early early discussions of
goldwater-nichols. and it was a tough slog. but i think it's fair to say that, to large degree, it is worse. what i would like you to think about, you don't have to answer, but what i would like you to think about, do we need a goldwater-nichols for the contracting acquisition business? if you have comments right now, feel free. if you don't, we will ask you for them later. >> sir, a couple of comments. i can't answer your question that i don't know if we need a goldwater-nichols for contracting. i think the cancer report on what came out of iraq and a particular kuwait in terms of what occurred with army contracting was an eye-opening experience for us but it was a significant emotional event. we can never go back to those days. so it's up to ed harrington and bill phillips in the sport of
mr. assad and many others in congress to make sure that we never go back to those days that if we don't institutionalize this within our army would've missed an opportunity. and for my three years or whatever my tenure is here, i will work hard on that and i'll make sure that it doesn't fall off the ears of our army leadership. i would also like to say that we're getting tremendous support from the army leadership. general gorelick, as mr. assad as much in a couple times. general casey, secretary mchugh, who is asked me and ed harrington and others to make sure that we go around and we talk contracting. another point, general casey asked me to go talk to the division commanders and assistant division commanders in north carolina about three weeks after i came back from iraq. i did that. we now have division commanders talking about contracting. i do think we would have had that four or five years ago. sir, your point is well taken. we cannot miss this opportunity to make sure that we push this forward. and we continue to fix
contracting and never go backwards that i will work hard on that during my tenure, sir. >> i'm not worried about general casey or secretary mchugh or any of the other folks sitting there today. i'm worried about is five years from now, seven years from now, 10 years now, when you have a new cast of characters and they say harrington or your successor, you're going to lose 50 spaces because i'm going to stand up a new stryker brigade. that's what i'm worried about. and that's simplistic, but a concept so thank you very much. >> thank you, commissioner. commissioner tiefer, please. >> thank you, mr. chairman. mr. harrington, and i want to preface this by saying actually our job is to ask hard questions that you have a reputation as a straight shooter. you were a straight shooter and all of my expenses with you and i believe you have been a straight shooter today. so the fact i ask hard questions
doesn't change that in the slightest. as to your procurement management review, which look at army contracting programs. i would put it as where the contractors may be getting away with too much that i want to take a particular example which is the huge $5.5 billion linguists, translators. specifically, is that your thought, would you agree, that the contractor where we held a hearing on chile us, for lack of a pmr got away without a tough cure notice, that he should have gotten a notice saying, as i explained, the university of baltimore, gls, you screwed up, now fix this or you are out. might a pmr like this every dues the millions if not hundreds of millions of dollars of deal is
waste sharply? >> there, our procurement management you process has been building over the last two years. we have defended the necessary resources right now, but we are going after more resources to increase the number of procurement management reviews we conduct. >> i'm not criticizing, i'm just asking. would that have saved millions of dollars spent was very likely, sir, yes. >> now, return to our favorite question, although it's not our favorite aspect on the business case analysis, and our initial invitation to review it. general pillsbury, when he told us two weeks ago in public that we were invited to review it, turned out to mean 10 to review, said that would be subject to assistant secretary o'neill. and i know you have still been involved in the. obviously, a higher official
than general pillsbury had to be involved in radically changing his view of whether we should be invited. and i assume that's secretary on you. do you disagree? >> so, i don't know that. >> he is my boss and i have no knowledge of that. >> okay. you have no knowledge of anyone higher than him being involved, do you, mr. harrington? >> no, sir. , i do not. >> and the business case analysis, you discuss, we had very full talks with commissioner schinasi and i were in the theater talking to generals about this, am i correct that the type of assumptions as to work on necessary are what they say the percentage would be if there's a competition, and what the scale of contracting will be on this contract, that would be competed but otherwise we'll just go sole source to kbr? i will say that again.
percentage of savings, scale of contract. >> sir, i have to say at this point, this is what the army calls to what we call sensitive information. that's the reason this is going forth to the army leadership. unable to comment on some of this because it is procurement of sensitive information right now. >> we haven't been disinvited because it's procurement sensitive information, happily? shirley general pillsbury -- nevermind. it was general pillsbury decision. >> past performance, of the contractors, or the contractor, was that a heavy consideration in the presentation? and any corrective action plans or things like that. >> sir, i do not recall that it was. >> okay. maybe for the record, can you answer that as best you can when you go back to? yes, sir. i will. >> mr. chairman, you know where i was going. i was going to ask
mr. harrington about past performance, but not on that. what was going to ask was, you know as far as what the past performance was being faithfully record in the appropriate database by army contracting officials, the general account office, general accountability office and the ig of defense department have had reports on the inadequacy of the placement of the number of past performance reports and their lack of narrative that should be in there. and very crucial is that these are not only going at the end of a contract with annually during it, because otherwise, we are not finding fees when we look for them. especially for kbr, for which you would think there would be seven or eight annual report in the database. we are still looking for any, any. now, would you like to be doing annual reviews of whether the contracting officers are making these past performance reports?
is that sun expire if you have sufficient manpower? >> yes, sir. >> what is that i that we are losing, by not having those annual pass performs reviews, both in terms of discipline for the current big contractors like kbr, and in terms of informing future buys like logcap iv, which kbr got despite its electrocutions. >> you just described, we don't have the relevant diagnostic information in some cases to be able to evaluate potential offers on future procurement. we want to determine whether or not their performance first of all was relevant, and then was it at and a profit level performance that would make them and responsible. so absolutely agree with everything you say. we understand that. we have work going on to improve it, to resources that we need will help enable us to improve that overtime. >> in terms of chairman thibault's question, you would remember if there were a mysterious appearance of years and years of kbr past
performance reports at this briefing, wouldn't you? >> yes, sir i would. >> one more question? >> please, one more question. >> mr. phillips, general, excuse me, general phillips. this should be an easy one because when i was in iraq, you put four hours nonstop into educating me about the successful innovations there. one thing that hasn't been done is that logcap and most big army service contracts in the theater 10 to compete for one pays, sometimes too, but basically one. and then the rest are option years. and our experience of talking to contractor officers is that they just reflexively okay the option years, meaning there will be competition and less the contractor has screwed up courageously. we're not in our ninth rubberstamp option year for kbr.
will you come in your post, increase the competition levels for the option years, woul whics supporters in the recommendation of considering option nonrenewal more serious than the current rubberstamping? >> sir, i would like to take a deeper look at that, but what i can promise you that we will do is we will work hard on competition across the board. many of the id iq contract to we put in place for jcc-i/a, i'm not that someone with logcap, but were based upon the first year as well as the option years being costed in the executioner to the end of you execute the option for that contract, the basis of that is to competition and debating on how the contractor performs, during that first period gives the government the right to execute the option or to not an to see competition for the next follow along. >> communing any big contract you non-renewed that you can take option years on? >> sir, can recall in at this
point. the theater wide installation security services is a form of an id to that we did. where i believe we had five contractors that competed with a base and option years on that as well as every time that we went to execute an option that option was competed so this there's opportunities i think for us to look at the way we orchestrate idq contract and limit competition within. >> thank you, commissioner. commissioner henke, please. >> thank you, mr. chairman. we had a discussion earlier about whether its a sense of urgency or it is sheer workload. and i take your point, mr. akin. i heard you loud and clear that sometimes it's just an innocent out of work whether you're trying to put across your staff. i've been there. we have been there in different positions in the executive
branch where you realize i don't have enough resources to get my day today activity done, much less new innovative ahead of the problem. can you, for the benefit of our understanding, is average on a couple of points in your joint testimony. sir, mr. harrington, i believe you are the armies senior procurement executive? >> oatmeal is in his position at this moment. >> you are dysfunctional lead and expertise to? yes, sir. >> you and the on have delegate in terms of the acquisition authority, that those out of your different command, the army corps of engineers, what are known as heads of contracting activities? >> yes, sir. >> how many hca's to have? >> with 17, sir? >> and to recruit -- refer to something in our briefing known
as buying activities? >> yes, sir. >> what are they? >> we have three major ones. aviation and missile command, and communication electronics command. we've got the research and develop an engineering and also that is a buy-in for our anti-services. so some other slightly smaller activities but take on and seek out our largest what we call buying command. >> the largest three, but don't have something like 200 buying offices or buying activities that are referred to? >> yes, sir. we have 272 sides that do army contracting for us. worldwide. >> and those are all designed to some of the hca's is that correct? >> yes, sir. >> you have to their 72 places doing buying for the army, different levels, different thresholds, services and hardware. you perform from a headquarters, from a policy oversight standpoint, you perform one or
call performance management refused? >> procurement management refused. >> is basically your staff come your senior staff, expertise go to a place, command inspections biggest yes, sir. >> is focused into areas. it's an inspection, and evaluation of the health of the contracting activity and how he performs its functions that it's an assessment by us and the resources they need, policies, processes, tools they need. it's also an evaluation of do they have good best practices, and can we take those in proliferate them across the rest of the community by taking advantage of someone else's innovative ideas that are working. >> at the end of that review do you certify them to continue to operate, or what's the nature of the ss but? >> sir, we review the findings. we do a risk rating of those contracting activities. we provide our report to them.
they provide, it's a corrective action plan that they can provide a protective -- corrective action plan back to his. >> how many due to? >> right now we target 28. there are p. r. a c. that work ahead of contracting activities, there are 27 of those, we target another one just on an ad hoc random basis. we welcome these activities. and again just assess their health specs are you able to get to all of those at least once a year? >> we're not, sir. know, we were able to do 14 at the most right now. we want -- >> okay. >> let me correct myself. we want to do 20 because we feel that's an important sampling of each on a yearly pace. right now we have the resources to do 14. speckle camp you'd like to do 28 of the 270, is that it compares to? >> these 28 p.a.r.c.'s have
numbers of those 272 so we would go to the p.a.r.c. office at different times. we go out to a contracting site in one of the two under 72 and actually look at the contracting files to look at their internal controls, look at the train, the qualifications, their certifications, things like that. >> the point is, what i'm taking away as you would like to do 28 of them. you're able to do 14 with the current resource is? >> yes, sir. >> obviously that is risk that you're accepting that the army is excepting in its system. >> we don't want to accept it all right now we have to accept some of that. >> i understand. your testimony, general phillips, and mr. had to mention using the workforce improvement funds, has hired 700 people in about five in of them are contracting officers. did your office hired any of those? >> we have not in my office.
those are into level contracting personnel. we require senior level contractors. >> so you wouldn't be appropriate if i. we should be surprised that your office did because you require more skill people. >> that's right it would have been hiring, but the available pool for senior contracting experts is immensely competitive pool because many of our both army, department of defense and federal contracting activities are pursuing the same level of mid-and upper level expertise. >> thank you very much. >> yes, sir. >> quick question. you said you are not resourced enough to do 28 of these reviews but how many people would take to be able to do 28 reviews? i would talk about 5000 more people to? >> no, sir. we're talking 26th to 28 more. >> so you can find 26th to 20 people speak was right now we're using people from the field.
you are exactly right. we can find to grab a a tough time competing. these are senior level contracting experts. at one point, 12 years ago we had 11 of them in my office. i have been able to hire one of those to come back. we have spoken with seven others, and they frankly refuse to come back. they just don't want to. >> thank you, commissioner. my coach or. >> thank you, mr. chairman, and my colleagues. and again, thank you to our three witnesses. i am struck by the fact i'm a mr. assad, you were in the private sector, able to support your family and a lot different way than you're able to support them now. head of marine procurement and the job you're doing up to you to tremendous sacrifice and we think you. general, both of you have made a career of the military, and you continue to proceed in a very important way. mr. harrington, you in the military, and rather than going in the private sector and being
able to support your family in a much more significant way, you come back here. so we are incredibly grateful for that service. and i mentioned that because i don't want this chart, which we're done differently, is so small, mr. assad, you basically have this job you have right now from 2007. and mr. harrington, 2009. my understanding, general, you were involved in argument before. but not necessary a position to have the impact you have now, and the same for you, general phillips, your impact now is much greater. so we are starting to see things happened that we didn't see earlier, and what did happen in 2002 doesn't rest on your shoulders. but it's still part of the record that i want to establish. in the national authorization act of 2002, congress said
establish service contract management structure and increased competition. and are reading is there is no structure, survey not like the air force. you know, you for people. you don't have the 20 plus the army happens to have a much more significant workload. in 23he natnal fens authorization act set performance goals for service contractors, and we don't see any of the mentation of any metrics regulations for metrics on that. so we're kind of sing congress early on when they do this and not seeing it have. in '04 the national defense authorization act established the center of excellence that is going back to the request of '02 that was made. and we don't see that established in '06. and management structure reforms for services. and we see partial implementation but not a yearly review in '08 it says provide congress
inventory and review of these contracts. and we are seeing this happen, but we are seeing you gather the data but we're not sure the data issues. and, finally, and 2010, science board conduct indiana review of w that what happens way back, not on your shoulders, but would you agree with basically, you know, would you take issue with anything that i just put on the record? serving not about my comment about you, but i'm talking about -- >> sir, i wouldn't take issue except that we do have policies and processes in place to address service contract that an absolutely we started maybe five months ago to take a look at how can we can manage larger service commodities in a more comprehensive fashion. so yes, we are looking at the air force model.
we're looking to learn about what the pluses of that have been and what the expense they have had that haven't been contributed. >> how long they think that would take? >> sir, it's going to take another year at least. with a group of people we have to be able to formulate that. but we do what we call acquisition services strategy panels. for services contract between 500 a billion dollar. we have done about 43 of them over the last seven years. i conduct those. they are very vigorous review and 10 peer review process that department of defense conducted we require that that would require the report to us. we have those processes in place. it really comes down to having enough senior level skill folks to be able to make sure, we rely on that. >> i get the sense that some of the expense people are in the private sector and not doing what you have done. candidly. let me conclude then by this
comment. i guess when i say this the urgency, we're asking you to sprint they made is that humanly possible to sprint all the time but in a way that's what we're asking because this, i mean, we are transitioning in iraq. we are moving forward in afghanistan, and we don't know where that takes us. so i don't see the sense of urgency, and i don't know how we do it. i don't see the integration of contracting get into the military. and, therefore, i don't see the institutionalization of it. ash carter said we're all on the same page. i agree with it. so we've got to find a way to see that institutionalization before we are no longer here a year from now. the gentleman, frankly, you all will be moving on. and i left with the conclusion that really was grant green's
comment, and that is, that if we don't see it in the qdr as an enthusiastic part, we haven't yet seen it. that's kind of our i am at. >> thank you. >> them ago. i can even push the buttons right. this is the opportunity were i would like to give each of you a couple of minutes if you have something you'd want to say to sort of wrap this panel. no, no. and then we can move on to our next panel. spectrum one. i very much appreciate the constructive criticism that we have received from your commission as we move forward. there's a lot of work to do here. i do want though to reenter size, particularly sensitive to
the concerned about the sense of urgency. there is a great sense of urgency with regard to the. we now have insight into, talks about the inventory of the services. we now know how we're spending our services money in a very, very detailed way by command such that we can take action to make significant change so that we can save the taxpayers money. if we figure out a way to save three to 4% in the world of services, we can buy a multi-years worth of, you know, mrap's every year. we can buy ddts every year at no cost to the taxpayers. so the mandate that you pressed upon us in terms of becoming more efficient and effective is absolutely taken with the utmost serious. i can usher you that i look forward to reporting back to this commission on the progress that we're making the. >> into, mr. assad.
general phillips? >> sir, thank you and thanks to the distinguished members of the panel. just a couple of comments. i would like to go on record that lieutenant colonel bill phelps work for colonel and brigadier general ed harrington many years ago. so we've been in this business together for many, many years. and he has been so eloquent and answering the questions, but i'm now his boss and i'm responsible for those actions associated with getting him more resources so that he can execute the mission that we have described here so eloquently over the last couple of hours. so i can promise you that we will work hard on the. we have a pushback on any of the concept plans that mr. harrington has pulled forward. we are pushing him forward. if a change is that i mentioned in my opening statement to over 2000, they will push that over 2000 ask for army and osd and congressional support of doing so. you have my promise on that. so, i would just echo what
mr. assad just said that there is a sense of urgency. and i would also, i would argue that we are in in our unit and i hear division command talk about contracting in a way that they never have before. and all that is positive. but you're right. and we don't get the insight are rules our rags and institutionalize it and did it inside our thought processes, and into the our and other documents, they will have missed an opportunity. so sir, your point is well taken. for that peace. we are getting, sir, back to your, dr. zakheim, we are getting tremendous support honor funding as much as we might add that dialogue here. general casey, secretary mchugh and the entire army leadership has supported us to include, i can't go into detail, the process that we have now through 2017 contracting workforce is a key discussion topic. and expected to be fully funded with our army.
so there is good news at there as well. i've seen many of you in iraq come and visit us. so i want to thank you for what you have done to help our contracting mission, and to also support our contracting warriors that it has been an honor for me to be here with mr. assad, brigadier general retired harrington and to see all of you not interactive but here in washington, d.c., i thank you for your service to our contracting warfighters. . .
that lays out the doctrine for of this operational contracting function we perform. we have challenges of getting regulations but, but those regulations are going to be in place and they're going to govern us and with the resource support we get and i enjoy a very good support for the resources we're only going to continue to improve our ability to oversee what our contracting function does and then to insure that the broader spectrum of requirements generators becomes more and more. when you say the army field commanders out there have reduced cor transition time from two weeks to two hours, two days to two hours, excuse me, that's a tremendous emphasis on the army by the army chain of command. general casey spoke at our contracting stand downday. general corelli has been briefed on our contract closeout. he signed memos out. i think it is indicative of
the secretary and undersecretaries and the chief's commitment they actually sit down and say we want to address the analysis of alternatives in this business case that represents, do we compete or do we not and just exactly why do either function. those types of functions exactly. that senior leadership, oversight, that senior leadership spotlight on this is just absolutely essential . we've got that effort started, momentum has begun. now our obligations my obligations of my boss, general phillips to continue do my role with our contracting workforce. >> sir, thank you very much. i personally very much appreciate your involvement in this. i have spent time with you in afghanistan. i think what you're doing is extremely constructive and very helpful to us. so we look forward to it. hard questions or no, that's what we're here for. >> thank you, gentlemen. much appreciated. we'll move on now to our second panel at about, 25 to
[inaudible conversations] >> the commission on wartime contracting in iraq and afghanistan is taking a break before hearing from the next panel about 1:00 p.m. eastern. we'll have live coverage contui hern c-span2. the house and senate in for business this week. the senate comes to order about 2:00 p.m. eastern for general speeches with legislative work starting an hour later. on the floor today, consideration of a nominee to be treasury undersecretary and later this week, the senate hopes to begin work on a financial
regulations bill. follow live senate coverage on c-span2. the house starts its week tomorrow. among its issues on the calendar in the house, a bill granting the delegate from the district of columbia full voting privileges. that bill would grant utah an additional house seat that gets underway tomorrow. live coverage on c-span. coming up on c-span today at bunn p.m. eastern, representative sander levin will talk about agendas ahead for the ways and means committee. live coverage from the "national press club". >> part of why internet freedom is so complicated it is a security issue. it's an economic issue, and it's a human rights issue. it is all of those things wound into one.
>> following last week's nuclear security summit in washington king abdullah traveled to chicago where he addressed the arab-american business communities he addressed jordanian security following withdrawal of u.s. troops in iraq and future of u.s. relations with his country. this is about 25 minutes. >> speak to large crowds. in fact, if we could properly gotten a large auditorium we would have filled that as we have every time. as marshall said you just finished two days of attending the summit with 40
some other countries. would you tell us from what, as much as you can about the summit and what you derived from it? and especially in relation to iran, if there was anything that was said about it. >> well, actually this is the first event of this kind i've ever attended. i think, what was a pleasant surprise to all the world leaders to come together on a very important subject. and from what i saw was the body language and the positive atmosphere from the day that, the minute that president obama opened the summit. it was very clear to everybody what president obama and medvedev did in prague last week had a profound effect on all the countries that were there and how everybody was moved by the commitment of the united states and russia to deal with this major issue. to the point that everybody
started to come in saying, look, we all bear this responsibility. we all have to work together and more importantly, as a suggestion was made to hold the next summit in two years time by south korea. i think all the delegates started to butt in saying look, we can't afford to wait two years. if anything let's have a meeting next year and have the take all the points out on the table and move as quickly as possible. there was a sense of your again system for the first time in my limited experience of being an at an international gathering i very positive, healthy atmosphere this is so important we need to get it done as quickly as possible. from that point of view, a great success. obviously, at the press statement, the final communique is limited because what we were doing in the past two days is vetting out objectives that needed to be done and everybody had their homework how to proceed.
there were a lot of good points creating the right architecture, the right international course to be able to deal with countries or non-state actors getting away with trying to bring nuclear material together to create mischief. and i think all the legislations, the best practices put out there were a very good idea. what we suggested in jordan was discussions to be prepared by next summit is extremely necessary but one of the areas we're now talking about is how to be more preemptive. when you have international try booneal and all the other things being discussed, we're dealing god forbid, after the fact. to make sure we don't have a calamity internationally. i think every country represented at the summit, we all have intelligence organizations. for countries that don't have it such as our countries, each intelligence
agency has to have a department that specifically looks at the transfer of nuclear material, for example. but then there needs to be a nation, probably a g8 nation to give some gravitas to the issue. that is a clearing house. because intelligence organizations are not very good at sharing information. a lot better after 9/11 but we still sometimes don't think everything is relevant. so if something was to go missing in southeast asia we need all of us to know right away so everybody starts to look on the radar. i was just mentioning, to in the united states, you are working extremely hard to make sure none of this material comes into the united states. but let's something happened in south america? if none of us know about it and we don't start putting our ears to the ground then there's a good chance the bad people out there will do something about it. i think we have to be far more proactive on intelligence part of the game to be able to
preseptember. so these are ideas that we have worked at the summit, i think quickly as possible, these proposals will be articulated and i hope by the next time, we meet, as part of the international community, there will be standards that will be set and adhered to. so i am very excited and thought, great job on the president. he did very well. >> was there any talk of a clearing house, of an international clearing house so you knew what other people did and did not do? >> yes. and again, as president obama mentioned inside the summit, obviously every country has, there are a lot of countries that have known military programs and obviously there is civilian one. there may be sensitivities on countries giving out too much information. i'm talking about more sort of the nato countries. we have to come up with a mechanism where people are comfortable sharing information that actually allows us to make sure terror does not succeed. again i think the sherpas of each individual country has
got specific instructions on how to move on these issues. so as they come together and put the proposals forward, again, the atmosphere that i saw at the summit was a very positive one and i think everybody will be on board. >> that's wonderful to hear. can we go back to iran for just a moment. was there any discussion about iran and what their position was, and was there, any position by the other countries at that time that you met? >> well this is the first meeting of its kind. i'm specifically, not, raul countries -- all countries were invited and not all countries should have been invited to the summit but again i think the president wanted to make it manageable. what the president rightly we didn't want for two days at the summit was finger-pointing which could easily happen with a lot of people from our part of the world. so, so i think what we're looking at is what are the challenges, how do we deal with things. there were indirect references to iran obviously
and to north korea. but for the most part i think we're looking at positives, what we needed to do as opposed to spending a lot of time, sort of doing -- at the summit. i think it was summit looking at the glass half full as opposed to half empty. but obviously, the undertones there were we are worried and what we need to do to protect ourselves in the future. >> if you were going to advise president obama as to how he should, what he should be doing differently in the middle east as to what the present policies are, what else would you recommend that he do and what would you recommend that he not do? >> on the record? [laughter] >> your majesty, in this room this is completely off the record [laughing] >> the president from day one has been 100% committed
to resolve be the israeli-palestinian issue and i am convinced today more than ever of his commitment to do that. but again america over the past 12 months was dealing with a lot of issues internationally and nationally. so to an extent there may have been other priorities ahead of the administration. we were fully aware of those issues. so, there has been stagnation when it comes to the israeli-palestinian process. the challenge that we're all facing is, trying to get active engagement, initially through senator mitchell but eventually through the administration. there's a lack of active engagement by israelis or the americans and with the palestinians and americans for a lot of reasons. and, one of, i think the discussions that i've had with the administration, how do we kick-start that? senator mitchell, i hope will be back out to the
we need to get the engagement of both israelis and palestinians very quickly. if we don't, whenever there is status quo or whenever there is a lull in the peace process, then there are others out there that take advantage of that to create mischief. what we don't want is the possibility of a crisis happening between gaza and israel, between lebanon and israel. or, iran, israel. these things do happen when there's an absence of a process moving forward. so i think, the responsibility that we have today is, keeping hope alive. that's what i think we've been trying to do for the past six or seven months. there has not been the strong engagement that we need. and, make sure that the israelis and palestinians are engaging effectively with the americans in the very near future. meantime hoping there is not going to be another war which is very strong possibility if we keep things as they are.
and, one of the red flags that we have is the arab peace proposal. you have to understand that there are countries in our part of the world that don't believe the peace proposal because they're saying listen, you moderates have had the past several years of using your argument which is dialogue and communications and that is not getting you anywhere. so why keep the arab peace proposal on the table? on the past two arab summits there has been a lot of pressure to pull the arab peace proposal off the table. we worked very effectively as moderate countries to keep that on the table. one of the compromises we had to do recently because there is a feeling the process is not moving forward the arab peace proposal has been given an extension only another three or four months. the arab peace proposal committee meets in july, in the middle east. and, we will have a hard time arguing if the israelis
and palestinians are not sitting at the table why we should keep the proposal on the table. so the clock is ticking and, the moderate countries are feeling weaker and weaker, when there's a lack of process. but, it is a very challenging and possibly maybe, depressing time for all of us at this stage. unless, israel and palestinians are motivated to engage effectively with the united states next couple months, it is going to be a tough summer. >> without a unity government between fatah and hamas, can, what, where would a dialogue lead to at the present time? it would would just be with fatah and israelies. >> but you have to understand, abu mazen represents the pna, which is the legitimate government of the palestinians and therefore that the main group. when we look to any other countries, obviously if
there's a political party that is in power or out of power, you deal with that government, not necessarily the party that is out of power. so if you're looking at reference of the palestinians, ity2kx is the pna which is led by fatah at this stage. the challenge of the reconciliation talks are extremely tough. but, abu mazen has mandate on behalf of palestinians to negotiate with israelis. there is palestinian government led by very able prime minister and that is what we need to focus on. if we're starting to use the excuse of reconciliation, that is an excuse not to get to the peace table which something i don't think we can afford at this time. >> do you think hamas would follow a, let's say they came to the peace table and talked and came to a resolution. do you think that resolution could be implemented. >> first i think that's a big if, but more importantly, there's, you know, there is sometimes differences, there are different types of
hamas. hamas as west bank and hamas external. and, i don't know you they, how witting hamas external is to get people to the peace table. the people living in the territories are living with a crisis on a daily basis, i think far more realistic with challenges that palestinian people are facing. i hope reconciliation can happen, between hamas and fatah. i just don't see it happening soon enough to have a major impact on the critical issues facing israelis and palestinians today. >> i know how much you want it because you always said that anything that happens bad in the region, anything that happens to israel, that is bad in the region affects jordan dramatically, you're right there at the same time. so, just as bad for you as it is for them? >> it is bad for all of us. i think that's, there has to be understanding, when, it was president bush that outlined the necessity of a
two-state solution which is something that america believes in. and obama took it one step further which is something that is of vital importance to understanding of americans. this has been, i think under stood by the american military and intelligence for many decades. the two-state solution and solving israeli-palestinian problem is national security interest of the united states. as this problem continues we're all paying the price. you are committed to iraq at this stage. you're committed to, to afghanistan. there are other hot spots coming out. a lot is related to the core issue which is israeli-palestinian one. so, if this problem continues, none of us are safe from it. and, the threat to jordan i think as much as to the united states and other parts of the world. >> all right. your other border is iraq. are you concerned about americans withdrawing their
troops from iraq under the present timetable? >> well, the iraqi government is working this out with the united states and i believe you have to have faith in the iraqi people. i think they have come a long way in the past couple years. i think election has been a major step in the right direction. the ballot box really had impact on iraqi society. you're seeing far greater understanding of iraqi nationalism that wasn't there a year or two ago. it is work in progress. whether iraq gets to where we all want it in year's time or 10-year's time is another story. but they are moving towards the light. what is interesting with the elections is, you have two very major blocks that have done very well in the polls and it would be very interesting to see how they work together to create a government. and i believe in iraq. i believe in iraqi people.
and i think this is a new phase in their life that will have a major impact on, on iraq's stability and therefore, the role that america has to play. so i think we've got a good story happening here. and at end of the day it is iraqis will be ones that will be realistic in their appraisal what is the american role inside of iraq. >> i think that is very encouraging. i think for all of us to hear, because from this side of the water, we think that is happening. and, but there's a concern that there would be a fallback afterwards, after american troops leave and there is no question that they are going to be leaving. >> i was in congress for six hours today and nobody ask me a question about iraq so i think that is pretty good sign. [laughter] >> i don't believe there was not a question that they didn't ask you. [laughter] you know this year, marks the 60th anniversary of the united states-jordanian
diplomatic ties. perhaps anniversaries are a very useful time to rolly to look back what has happened. how would you assess the jordanian-u.s. relationship as it stands now, as it was, let's say 10 years ago or five years ago? >> well, you know, again, the relationship between our two countries was built by his late majesty king hussein and many american presidents. it started very strongly and today it's, as strong, if not stronger than it's ever beeni=ñ. we are partners in bringing peace and stability to the middle east. we are partners in harm's way in different parts of the world. and, i think that the confidence in the relationship is unique. you know, military, intelligence, politically, it is something that i think my father were looking today,
would be very, very proud of. and i think, 60 years on, we have a very good story to tell and one that i think should be an example to others in our part of the world. >> that is wonderful, really to hear. in the 60 years, this is, close to your 10th anniversary, that you have been the head of the kingdom. in looking back, what do you think is, your, the accomplishment that you're most proud of, and what is it in looking forward that you want to accomplish in jordan? >> well, the accomplishment that both escaped my father and escaped me so far is, resolving the most important issue in the middle east which is israeli-palestinian one. so we still have a lot of work ahead of us. and, that is. the ultimate goal.
i think that the challenges that face my country and the rest of the middle east is that 50% of the middle east is under the age of 18. we're the largest youth cohort in history. these are young men and women looking for opportunities and looking for jobs in the middle east and if we don't solve the political problems of the region, that's a time bomb waiting to go off. luckily jordan is a small country. we have a vibrant, young generation which i personally think is a plus. but stability is needed to create opportunities for young people and their future. the future of jordan is based, simply put, on building and strengthening the middle class. political, social, economic reform, in my limited experience, will only really
move jordan forward when the middle class is large and vibrant and capable of taking jordan in the right direction. that's difficult when there's a lot of instability in our area. but when there is peace, the economic dividends for all of us is huge. and, we need that peace if we're going to take care of this large, growing younger generation that is looking for, like all people around the world, a chance at a good life and a chance to have an opportunity. and i think if my work, over the past 10 years is on anything, is, i said initially i think in first interview i ever had, putting food on the table. what i meant by that, is making, people comfortable that they have full stomachs and they could have a chance at life. and i think that's a challenge for all leaders in >> do the, other countries
say in the gulf, you meet with, obviously, the heads of all the countries, agree with your, both with your concern and, what you would like to accomplish as far as the region is concerned. >> peace and stability, definitely. because, we all suffer from any conflict zone. i think that is the same the world over. and again, i think younger generation of leadership really understands that empowerment of the middle class, and tool for that, comes down to education, education, education. and, you know, my wife has been such an advocate of giving young boys and girls an opportunity at really moving their countries forward. her work in education and what jordan is trying to do in education, really i think is secret of being able to move forward. and other countries are making up on that.
>> we really want to thank you for really speaking out the way you have. you've been a voice of reason and reasonableness, we from this side of the water just wish the other countries would do, say the kind of things that you say, and do and join with you because, your effort to bring calm and prosperity to the entire region, as like your dad has been tremendous. >> thank you. >> and it is greatly appreciated. and after the kind of day that you have had, we're just thrilled that you came and spent some time with us. >> not at all. i don't know chicago all that well. i think this is my third or fourth time here. but, chicago reminds me of when i was teenager in boston. just, a vibrant city. beautiful city. the people are very, very warm. and i'm always delighted to be here. >> this is the best city in the united states. [laughter]
they took a short lunch break. they started this morning at 9:30 eastern and will continue this afternoon looking at the oversight of contracts in iraq and afghanistan. we will continue with our live coverage as the commission gavels in. >> we want to go ahead and get started on time. we really do appreciate the two of you, we're a little bit over but i think this panel will take a little less time. what we're going to do in this panel try to do one round and then if folks, any of the commissioners have a question we'll go ahead and do it and that will facilitate our schedule and gentlemen, maybe yours also. i would first like you to stand up, if you both might. mr. ward and dr. raney. put your right hand up please. do you swear to tell the truth the whole truth and nothing but the truth so help you god? please be seated.
let the record show that both of them answered in the affirmative. and, i guess the order in which we're going to do this, we have mr. terry raney and mr. jay ward, chief operating officer for, you will tell me in a second with you prefer aecom or ecom. government services. dr. terry rainy, who is is, now i'm smiling again because i know the answer. if you ask caci whether it is caci or caci you can call us either one. so we've been calling you both. but welcome to both of you for the contract representation portion of this and if we might go in order, mr. ward, please. . .
>> including facilities, transportation, environmental, energy and power. the company has a line into three operative units. the government segment serves both the united states government and non-us government clients. the business unit that performs the service contract under review by the commission is a gs. which is headquartered in fort
worth, texas. ags has annual revenue of approximate $1 billion from all of its diverse operations. and has performed, contracts in iraq and afghanistan just since 2005. revenue from iraq and afghanistan in 2009 was approximately 30% of our company's revenue. we currently manage approximate 27 people between the two aor to our business footprint in iraq is markedly different than many of our competitors. virtually all of our work has been awarded competitively. like our competition, we have operated in iraq on u.s. government contracts, but the majority of our work has been primarily in support of the iraqi people resulting in capacity building on either iraqi military or civil facilities, rather than on u.s. government installation. are as they say we operate outside the wire. we consider much of our work is
socioeconomic for the iraqi people in that we predominately utilize iraqi citizens to perform traditional logistic operations and maintenance, as well as institutional strengthening programs benefiting peacekeeping and quality of life within iraq. at rp, we managed over 2000 people in iraq. we're working our way out of the job and manage around 200 or 350 today. on our programs we have shia, sunni and kurds working peacefully together. because we didn't economic opportunity and a safe working and living environment. in afghanistan under competitively awarded contracts, we have provided fundamental logistics maintenance and supply support capabilities to the arnies sustainment commences 2005. and currently support president obama's served as our footprint expands. we operate from main bases at the back of their field in the hotspot in addition to being to put at 27 forward operating bases.
on the humanitarian side of our projects with company falters teaching english as a second language to our staff to help them build their verbal skills. we acknowledge the commission public release findings that contracting oversight has indeed been adequate in the past. we believe that independent review of the contractor operations is essential, and it is good in the long run for responsible service contractors. what improvements are evident, there continues to be an issue that i see with turnover of oversight personnel and the lack of continuity due to the frequent rotation. regardless of which agency they represent. to reach back to vision as a rock on contracting center is a noteworthy initiative to me, and it offers great potential as they become fully staffed as that organization matures. the reach back team has the promise of providing improved continuity for contract administration of ward in
management that simply cannot be achieved by deployed forces supporting contingency ops. inherently, government operations the other topic for today, are not a major issue to aecom. the nature of our business demands that we avoid any conflict of interest or any contract requirements the places in the can't of interest. we review this possibly in a business process to ensure that we're not conflict without future requirement or worse, new requirements that could replace us in the conflict of interest on an existing contract. in conclusion, aecom takes great pride in its support to medical missions and continues the operations that are operational and management philosophy is to learn from our mistakes. we hold ourselves accountable. we continuously improve our processes, and we strive for excellence support for the warfighter. soldiers lives are at stake because of what we do, and we take this responsibility quite serious it. this concludes my oral statement. i look forward to the commission's questions. thank you.
>> thank you, mr. ward, and aecom it is, sir. dr. raney? >> chairman thibault, chairman shays, distinguished members of -- >> button, please. >> you need to point the mike down. >> got it. i need training. chairman thibault, chairman shays and distinguished members of the commission on wartime contracting. thank you for the opportunity testified before the commission today. my name is terry raney and i'm a senior vice president of caci international that i'm the manager of caci that provides acquisition for the joint contracting command, jcc-i/a. to contracting acquisition and program officers and the department of defense and civilian agencies that i'm a retired air force colonel spent much of my toys and plush and the contracting acquisition workforce. as a contracting officer at the operation of major systems plant
represented an secretary level that i was the air force policy member of the acquisition council and also served as the acting associate deputy assistant secretary for contracting in the air force. i was the department chair and course director of the advance program course at defense acquisition university and was also the deputy department had at the air force academy. on behalf of caci, i look for to answering the questions and assisting the commission and a support of four including identifying of improvements to the contingency and expeditionary contracting and program management processes in a wartime environment. caci provides professional services and information technology solutions that are defense intelligence homeland security and federal suffering government customers need that we are headquartered in arlington, virginia, with approximately 1000 -- 12,800 employees and 120 offices worldwide. we support our customers.
these are contrary areas of expertise and solutions including command control and communications, computer surveillance and reconnaissance services, information and management, integrated security and intelligence and program management. caci is a very small number of personnel providing support in iraq and afghanistan. less than 2% of our employee population. other than the jcc-i/a contractor acquisition management services, which well i will talk about later, caci is private when they're a that employs providing service to department of defense in iraq and afghanistan include technical support for reconnaissance and surveillance system, operational support, improvised explosive device targeting and linguistic support for exploitation. none of the contract is being under it were solicited or awarded by the jcc-i/a. caci is worth the jcc-i/a and his predecessor organization since march 2004 with acquisition management supported
we're currently on our third contract having won all three in full and open competition. we have approximately 15 employees providing acquisition management support that jcc-i/a officers and manage that our personal provide assistance support including conducting helping conduct market research company system in the documentation of requirements in a format for solicitations so they are clear and understandable. document acquisition strategy options, preparing solicitation and supporting contract administration and contract closing. we understand the need to ensure that our employers provide acquisition management support do not perform inherently governmental function to our employees support the jcc-i/a are trying, of being able to commit the government and that they have no authority make requirements for determination to obligate the government in any way. and must also protect government and third party proprietary at
all time. our employees are dressed identify themselves and represent themselves as contract employees at all times and documentations including e-mails and written correspondence. caci personnel do not make contracting decisions and do not operate a pseudo-contracting officers are as contracting officer representative dick we fully understand the importance of avoiding and preventing actual and conflicts of interest in performance of support and in a context board the jcc-i/a with commit to not begun any solicitations issued by the jci a. in addition, caci support is firewalls and other caci groups. the commission has decided to ask for our thoughts and observations on how the government can improve its management of contract in support roles. caci provides advisory and assistant supervisors to many different government agencies that there are two key factors to ensuring that contract employees do not cross the line
during importance, during performance into inherently governmental roles. first, the contractor must have clear internal policies, frequently mitigations with his employees, constant management attention and open to mitigation with the government customers include the contracting officer. second, we also believe that it is incumbent upon the government to have clear policies process is an understanding and training for government personnel in this area into clergy meeting those requirements to the contractor. caci strip out of the work we do in supporting the troops in iraq and afghanistan and our warfighter our employees perform their responsibility in dangerous and uncertain environments, and they are often at risk if we strive at caci to provide the best possible support to assist them in their support of the customers vision. thank you again for this opportunity to provide and discussed with the commission our thoughts and observations on how contingency and expeditionary contracting systems and processes may be
improve so that we can all better serve our nation's men and women in uniform. i look for to answering your questions. >> thank you, dr. raney and mr. ward. i'm going to start the process off. mr. wharton, on your largest contract, you had mentioned that they were competitive it is that correct? competitive awards? all of your significant awards are competitive awards? >> yes, sir, that's true. >> and the type of contracts that the largest contracts are, what type of contract? >> our contracts have been primarily cost plus fixed contracts that cost plus fixed fee contracts competitively awarded. you say that you have about 2300 afghanistan employees. >> yes, sir. >> and out of that about how many are subcontractors that are part of those contract? >> is a very, very small
percentage. we're just starting a new contract that were subject to recompute and there's only 20 people out of about 2300 authorized. >> okay. and acidity that you have in place, you mention in there somewhere that you have 27 forward operating base locations for the employees in afghanistan. who arranges these security? >> sir, we work at the forward operating bases, and we are service and security is provided by the army. >> completely reliant on the army for both life support and security? >> yes, sir. in all cases. does the company in any case have to, for other purposes are the contracts, employs your own security? >> yes, in iraq we've had security subcontractors provide transportation, primarily from bagram or the green zone out to the other different location.
and because we work on iraqi military installations as opposed inside the wire at taji, iraq we will have a security service provide perimeter security at the gate into our living compounds. >> and that is -- those are contractors that are awarded by the site security -- are those jcc-i/a contracts or your own? >> they are subcontracting us. >> that are your own? >> yes, sir. >> okay. how do you go about, because -- is a unit 2300 employees. about how many are, when i say ex-pats are either local all don't speaking this as a first language. >> in afghanistan, i don't believe i've got all of the exact numbers, the split out, but it's probably because of the nature of afghanistan and how we are deployed, probably about 60% ex-pat, and the remainder is 40%
tc and their primary from our biggest operation base. and then do you have an english-speaking requirement for those? >> yes. so you don't have a situation where substantial numbers of linguists are required? >> no, sir. we don't have any interpreters at all on our contracts. there is the basic english requirement in order to qualify for employment with us, and i think i mentioned in my opening statement that we offer -- with a volunteer group that teaches a must as a second language to help them improve their verbal skills. >> okay. and you said your types of contracts are principally -- how long have you been a contractor in iraq and afghanistan speakers since 2005. >> in iraq. and also in afghanistan? >> in afghanistan as well. we started both contracts at nearly the same time. >> is this the concept of having
business systems that would make the requirements for things like encourage cost submissions and billing systems and, you know, the like, accounting systems that meet the criteria for reimbursable cause? was this a new experts for aecom when you move into that work? >> no, sir. we had systems that were adequate and compliant with the contracting requirements. i'm i still out a little bit in further detail about the contracts that we have. they were awarded as part of the competitively awarded idiq, and there were three contract holders for the idg. and each task order that was awarded under the contracts early for our afghan and iraq work, those were computed between the three of us, much like logcap iv is working out. where you have to compete for the work. we have to win afghanistan and we win some task orders and
iraq. >> so without getting too arcane i took that getting because of the competition that drives do most of your work, is it a case where you don't have cost accounting standards coverage, but you do have everything else that goes with reimbursable type contracts, is that a -- >> we are quickly getting out of my lane of accounting. i make it a policy to not do math or accounting and public. but in this case, i believe all of our contracts are subject to caps. and all those requirements. we do have one fixed price. >> and so my question would be, as it is the simplest way, how do you get along with your local, from the defense contract management agency and defense contract audit agency? when i say get along, i mean do you have any outstanding issues that they believe are significant that they're continuing a dialogue with you on? >> we are in the process -- were not declared as but i know you
will understand this terminology that to better myself even, we're not declared as a major in dcaa's terminology. and so we are asking and trying to position ourselves to get the kind of clients reviews and on his that are necessary to have all the systems deemed approved. >> so you're taking a pro active approach, you can go to customers and said we've got it together. >> absolutely. >> okay. this is really for both of you. i guess i feel, kerry, or dr. raney, that you will probably, they'll ask a lot of questions so i'm trying to spend time trying to understand the contracting environment that but i have a question for both of you. both of you talk about, as you just did, mr. ward, the importance of internal controls and business systems and demonstrate to the government, that they can place reliance on both your aggressive action and oversight, and the like that i will start with you, mr. ward. as chief operating officer, are
you exposed to enter the reviews, not the government's review, such as income on its or other compliance audits that you used to specifically give you insight to an visibility on whether your systems are operating independent? nor did not just rely on the government oversight, for example, your internal audit program can visit focus on government systems at aecom? >> yes, sir aecom has a very proactive approach. we have outside indy pendant on a to c. as well as internally on it in an aggressive compliance program. that ensures that major government contractor, regardless of dcaa standings, then we have incomplete compliance. >> yet, to pin you down, you are the chief operating officer. you are serving a key player. are you willing, for example,
would you be willing to breathe, demonstrate, share to the extent we can get every good understanding of what the internal control, internal and internal audit function is? is that something you would entertain? >> yes, sir. >> for example, just to be up front with this commission can we're working with a company where we went through the list of internal audits and downsized it to three very significant internal audits and put a request in. after some back and forth, they said they would provide it for us. still going through back and forth because there is sensitivity and the like. but this commission, you do, you pay a substantial amount of money for those kinds of controls. and we the government are interested in you having that. therefore, we pay, reverse per the regulation for that. so i think us understand that, not only does to a customer ability to place confidence in you, but also to demonstrate the
use of those funds that are built on contracts through some kind of indirect cost. >> not a problem. >> mr. raney, do you want to give that one up as best you can recall all the words i put out there? >> the answer is yes, sir. [laughter] >> okay. so if we were to send staff out and explain that structure, which he do extra become internally, how you go about it, that's something that you stand ready to demonstrate to the commission staff statement we will certainly whether internal audit department to show you what we do, what they do with each of our programs. >> how they plan, where they put their emphasis, we auditor's might call, which neither of you are, but you all understand risk, a risk assessment. okay, great. >> our contracts according is a fixed-price contracts they don't have the controls are the kinds
of questions don't come across. is make at one point. but as far as meeting with our internal audit, and compliance, training, absolute expect thank you. that's an important clarification. commissioner schinasi? >> thank you. good afternoon. i have a question for each of you about policy propose policy letter that was issued by the office of management and budget, ostp office. and it deals with three parts of the government, business relationship. one has to do with inherently governmental function. but two, i think even more importantly, are those functions closely associated with inherently governmental. and critical function. this is a policy letter for the government but i just want to ask you, mr. ward, are you for money with the proposed policy letter?
>> yes, in a broad sense. i don't study it intensely because of the nature of our business just doesn't put us in that position. it's more of a defending posture for us. >> so my question to you then is, i can assume the answer, but it would be, do you find that this might change the way you do business with the government in any way? did how you market your services, or your operations. >> the changes already partially effective and put out a policy from the federal services group last week or the week before. to raise awareness internally to the company. people to develop contracting about the new policy, the proposals and things that are happening, to make our company people aware of this. so that, you know, as we evaluate new opportunities, our internal relationships with the government and operate that we don't cross the line.
we understand where the line may be drawn in the future. >> dr. raney, the same question to you. are you aware of the proposed policy letter? >> yes, i am quite aware. as you know, we are a member of the council and there will be able for public input on it. and the answer to the many questions it as any proposed rule, and we're certainly playing a role in the. having said that, clearly what we do for jcc-i/a follows to the category of the close associated with there'll inherently governmental function. without you having to ask the question, that accounts for a lot of what we do pick we are closely looking at that. i think the policy letter is a really -- i really like the way it started off by recognizing the fundamental issue here, much
of what you talked about this mark of this is a resource issue. this is about capital plaintiff is have the right people in the right place to do the work that needs to be done. and i recognize that there are inherently governmental functions but it is based on the fair, federal inventory act, commercial inventory activities definition, which is a relatively narrow one. there are plenty of things that just need to be done by government personnel. got plenty of reasons to use contractors as well. that's in the area of close associate with inherently governmental function. of course, there's another proposed other on a personal conflicts of interest that is associate with the whole area. very aware of that. the critical thing is that this rule gets off the resource issue. its human capital planning issued and i think that's absolutely true. the second part is critical function, the critical function to some degree come and idea we kicked around, making input
recognizing the real issue here is not using contractors but in having government personnel in a position and in a place with the understanding to manage those organizations. and that really is a key. i think the policy letter takes a great step towards that. this is far from done. i think as we all know because the public process will go on. but in terms of how we perhaps deal with the organizations that we deal with in providing this, in my statement i said we'd go out of our way to make sure our people do not cross that line. that's not just with the jcc-i/a, that's of any of our customers because we know that this is in. any of us are retired from the government had been in a business you have to be careful. there is a way to do it that there is a way to manage, and it requires both the government and the industry to be prepared to do it, take the measures necessary in terms of training,
commitment, et cetera. >> dr. raney, think you. i think someone colleagues will follow up on this. but in terms of whether you see this as changing the way you operate, yes or no answer, for now would be much appreciated. >> it would change the we operate, perhaps as some of our customers. more cocaine and think that we will provide, but not a fundamental change, no. >> i want to switch topics a minute to ask, mr. ward, you indicated you have both commercial customers and government customers? >> yes, ma'am. >> can i ask you to talk a little bit about characterize how you deal, how you see those customers and i want you to talk about how the weakness is necessary, but for example, do you use -- were kind of contact be use with your cancer? >> i should codify that the business unit i am in, mostly with, is the aecom government
services. so virtually 99.9% i think i can't even think of a commercial contract that we have in my business. so all of our work is with the government. whether his state department, obviously army oriented. we have contracts with department of energy as well. i focus by merely on u.s. government contracts so i don't have a big commercial client-based. >> what does your customer do that gives you problems that make your job easier? >> i think i will focus on the easy part. is highly regulated. we understand the rules of engagement. like the far or not, it lays out everybody's roles and responsibilities from cast and is, when it comes to payment. you know, the government, sometimes we have slow payment
issues perhaps, but the government is good for you. that's a big contrast with a commercial business. >> dr. raney, i will ask you, i assume that your customers are all government customers. so difference between those customers, what is it? >> our customers are, at least in the business group that i manage, are all roughly similar. their contracting our program is organizations, that are relying upon contractor support to do certain things that they don't have the staff, capability. so in many ways there are problems and issues are pretty much the same. so really when you say what's the difference, you'd almost be asking is there a difference between different agencies or things like that. there really is a whole lot of difference. they all need about the same thing. they have a mission to perform. the issues around that in terms of the doing that mission and it's our job to assist them in
doing that within the rules and regulations. so not really that much different. >> thank you. >> thank you, commissioner. commissioner zakheim, please expect that you. personal i want to thank both of you for coming, and i want to we emphasize what cochairmen shea said at the very beginning of history. there is an empty chair here. and i'm very, very unhappy about it. certainly understand if any individual could not fill the chair. but for an entire company not to fill the chair, we have taken notice and we are not happy. having said that, dr. raney, what's the average tenure of khaki employees in the theater? >> the average tenure, you me -- >> how long are they out there, on average? >> on average it probably runs like maybe a year to a year and for five months. we encourage them and incentivize them to stay for at
least a year because our customers doesn't need that turnover. we have several actually who worked for you, a year and a half, come back and gone fishing, done other jobs, what of the project ran and then go back or so. we have been there since 2004. so normally it turns over about a year or so and they go and do something else, kind of decompress. but that's about right, about a year and three or four months. >> is it safe to say that by and large, your folks who are supporting the contrast, the program management or contract management offices, cor is in effect, have more experience than the government folks you're working with? >> they certainly have -- our contract part requires us to the people with experienced. >> to the all have to be with level two or three. we have a lot every time military and civilians.
many of whom have been deployed before. so as a general to a very experienced and we take pride in that. >> so it would be natural, i guess, for some relatively freshfaced cor to come in and turn to your people, and could, on occasion perhaps, create a dilemma for your folks. and i see that you, caci was third in the epic survey. so you kind of our up there in term of ethics. have you had situations where your employees call back to headquarters and said, bryant is asking me to do things i really shouldn't be doing? >> i'm not aware of any situation that they call back and asked, either myself or our program manager. certainly, the question you posed is a challenge in our entire. okay? i will answer you in two ways. the first and we do have training. we reinforce that and we try very hard to make sure that our people are aware of the. many of our people are retired
military. so those have been contracting officers, and to recognize that line and they know where it is and not to blurt it. i would say there's one more aspect in this, and many of us that are retired or contracting officers once, we take very susie being a contracting officer. i think that's true of the government people that are in fear today whether military or so later to get a contracting officer warned just by showing up. that's something that comes with experience, study and hardware. i don't think you want to abdicate that either. they may come to recognize some of our people have good advice to give. but i don't think anyway that means they just turn things over. >> thank you. mr. ward, for aecom have you ever walked away from a bid because you perceive to some kind of an organizational conflict of interest? have you ever had that situation? >> yes, sir. >> good. how often? >> well, if you would ask me
which bit i couldn't tell you. >> i'm not asking which bit. >> but i can recall to. this could set this up for a conflict of interest. >> actually, both of you, what is your sense of the expertise of the seal ours that you have to do with? do you feel that they need more training and more oversight from them? do you feel generally better kind of left out there in the cold and something will go wrong and you will get dumped on? i would like to both of you on that. >> since my microphone is on i will go first. it's kind of an evolving story, sir. >> i expected it would be. >> in 2005 when we started up both in iraq and afghanistan, cors, there was a formal process to even appoint them. so they will just kind of evolved into the. it was a learning express for me. this morning to do the armies
tell about the initiatives that they've had since 2005, or before that. >> what you mean by learning experience? quick you are to where? >> no, i was able to pick out, as they said in 2007 they start doing this training, and i've been able to anecdotally perhaps, but i've been able to see the result of what the army has done in the field to improve the level of cors. not only the training of the cors but the sheer numbers of cors. >> are you satisfied that you have -- and a sense can have a good government oversight potential. >> absolutely. >> i think anybody in the business knows that. do you feel you are sufficiently well protected right to? >> yes, sir i am. because of two things. one, with the army has done and what we have done as the company. >> dr. raney? >> well, we'll have a problem with our cor.
it is the deputy park pics with a very good contracting officer representative that is generally been the case. savannas and what they're doing and we had a great, yes, we feel protected from that standpoint. understand on a day-to-day basis what we're doing. the challenge of contracting officer representative's and the training of them and avoiding too much of return that happens with the operation give is a huge challenge. you heard that this morning in terms of all the folks here as to how, how that happens that i really want to get your sense, you are on the receiving end. >> in our case we feel protected, but i've been aware of any situation of where other caci folks have had an issue. i think of the new emphasis on an edit, and yet, i think we'll find. >> i just got a note, i will thank the staff for the. the aor all contracting personnel board that ethos and to get an award for showing up.
no testing et cetera. so maybe you're just been lucky with the cors that you have. last point, this is for mr. ward. your guys are brave. they're outside the wire. and you have some subcontracted. one of the issues we've looked at over the past year and a half or so is how do we get accountability and control over subs? tell us how you do it. >> well, we deal with subcontractors that we know. we that the subcontractors. because our contracts are awarded on competitive basis, we have to get -- we have to be competitive with the subcontractors, especially the larger the content of the subcontractor is, if they are not competitive that just makes us less competitive. we are very cognizant of that and worked at the then when we
subcontract a large portion of her work, we look for the value added where we are, as prime contractor. you know, where our systems come into effect, our manager, our relationship with a contracting agency. the kind of quality assurance we provide to the subcontractor effort to make sure that, it doesn't matter whether it's a subcontractor or an aecom person doing that job, we are responsible as prime contractor for execution. all the regulations, so that's the control that we put into it from a subcontract administration, start the selection process all the way to execution. >> thank you very much. >> thank you, commissioner. commissioner ervin, please. >> thank you, mr. chairman, like my college i want to thank both you've been here today. i applaud your companies for sending you here, and i also want to stress that i've heard it said by some that the
commission is biased against contractors. that's not the case. certainly i am not biased against contractors. i'm way too happy to give kudos to to companies that i think have done exemplary work and that have gone to extraordinary lengths to make sure that you don't run afoul of the various apical laws and regulations. so i want to preface my questions with that statement. that said, i want to go into some details that most of my question offer you, mr. ward. with regard to aecom one of the thank you doctor in a written statement that she's there for the record on page 51 is the instance where there were over buildings on aecom's part. and you quite rightly into programming and commendably brought us over the to the governments attention. you did line by line as i understand, on its went sigurd looked at a subsequent they didn't find any more over billings venue brought to the government attention. that's all commend to as i say. could you give us a sense of
what the magnitude of these over billings were, .1? and two, have these over those occurred in the first place and in three what is been done everything to ensure that it doesn't happen again with regard to aecom contact? >> as dramatic and expect as sigir was, it was a great success for as far as i'm concerned. and there are some lessons learned that came out of that. first, i considered document $4 million, we as a company identified the over billings, approximately two years before the sigir report. as you point out and i appreciate, we self-discovery those and self-reported those. our customer in this case was the rock on contracting center in rock on. it was a gruesome detail, we provide to sigir almost 400,000 pages of documentation.
30 gigabytes storage space for all of the. >> but using it as a consequence limited time, how much money are we talking about? >> we credited back to the government in excess of $2 million. and since that time, after sigurd was settle down, we took, took the case if you will to the army's procurement fraud group to make sure that they were a where can we have nothing to hide and if they want to, and follow-up, you, if they wanted to do it prior to contract close, the contract had been close to a jet, that we would welcome that type of oversight as well. >> great. thank you. a couple of other questions. i'm sorry. also on page 51, you say that you have developed proactively management performance such as
production health and safety, other indicators. has "dod buzz" into those metrics? i'm sure you have shared them with d.o.d. and his d.o.d. pleased with those metrics? >> i believe they are. each one is developed specifically for the worker grabbed a different set of metrics that we track and monitor in afghanistan and what we do in iraq. for afghanistan, it's not first time pass rates production control, there are a whole series of metrics that are driven out of army regulations that relate to supply performance and things like that. we share those with the army, and we continually develop those. it's good for us as the ceo of our business, i felt very uncomfortable when we first started working on these contracts, the color project and and say how we doing come and he says great.
i needed to know how. i needed some metrics that could measure that. so that was with one of the first initiatives that brought us in as management by metrics, if you will. and the army helped us develop those our meaningful to the brigade commander. we didn't want to have a bunch of metrics that were important to jay ward if they were important to the commander. >> precisely. and the one final question to you. you say also that aecom employees have to assist others in making sure that they don't violate the code and have to report any instances of violations. how many reports have event over the course of your time in iraq and afghanistan, just ballpark? >> we have a very open and robust hotline. it's monitored by an outside independent agency, complete
anonymity as to who is calling and. you know, if the caller wants that. >> but how many reports, approximately? are we talking a handful or about a hundred? >> since inception, between iraq and afghanistan, i would have to guess 20 to 30. they vary, not from necessary contract performance, but supervisors bad behavior or another employees bad behavior. or things that occasionally get hotline about a good event. >> now, i want to move to a brief discussion of the inherently governmental issues that we talked about before and were close associate with. my couple of questionable to for you, dr. raney, but let me start with you, mr. were. let me just pick out two or three examples, as you can tell me what do you think they are characterized present in these guidelines as inherently
governmental are closely associate with it. one is services that involve our relate to the if i wish of another contractors performance. would you just guess that that is characterized as inherently governmental our closely associated? >> i would break that down into two steps. that data collection and developing metrics and reports, i don't see that as inherently government. but i would say that any action on that, feedback with a contractor about their performance, i would call that inherently governmental. >> and assistance in the development? >> again, not our line of business, but i don't see an inherently government function of drafting performance that are the result -- i don't how that process a divorce, but assume interviews and developing requirements which help to qualify those, the drafting of the statement will work would not be nearly government that
determined the government requirements. >> finally, if i wish of contract proposals. >> that's a little bit tougher for me to say yes or no. i think that is something that's been reserved for the government. >> okay. so, dr. raney, to close this with you. one of the questions of this policy document that omb has put off poses, as you know, is whether close the associated and inherently governmental are to be conflated and it should be one standard. what's your judgment about that? these are all listed pleasantly, the ones just mentioned, and there are others that makes a point he seems to be as closely also you. i have great difficulty with regard to the last and as you do, mr. ward, often in distinction between the two. >> i think you can be a clue difference between the two. in many cases, if the government
had the personnel, capability, many organizations depend upon the evaluators in the technical areas because that's what they can get the expertise. they provide technical evaluation. those are was often used by program officers, things like that are as long as there are controls around the conflict of interest, both personal and organizational conflicts of interest, protection of information, et cetera, i think they can be maintained separate capability. i don't have a problem with it because we do it. and i think we can do it and do it well, and for those places that we support, i'm not aware of any case would've been a a protest or anything. never been associated with the work with we have done that because when those controls in place. but you have to be want to put those in place as a company. >> thank you very much. >> may i ask one question, mr. chairman? >> dr. raney, has ever been a protest that involves your
support of the contracting officer decisions? >> of our support? >> well, just talking about that particular instance where, you know, technical, the technical review of the technical proposal. he said there's never been a case. has ever been a case in which you are involved in supporting, you know, proposal decisions, decisions that was protested that you were involved in? >> we have support organizations that have protest of awards they made that our people provide contract administration. >> but your activity never came up speak is no serve. >> thank you. >> thank you, commissioner. commissioner greene, please? >> thank you. dr. raney, and a clever one point there? there was a protest, one time we been of some and what did they protest that was winning, and the issue was whether we had a conflict of interest. and a government determined
that, in fact, a government adequately considered our mitigation plan and the protest was denied. i just want to make sure i clarify that. >> okay. dr. raney, let me follow up very quickly on comment that commissioner zakheim had made, or questioned to let me commend, first of all, what i think are some good players, some good ethics, as a piece, mitigation plans, internal honest and so forth. you have how many people, about 50 or so providing support to jcc-i/a? >> we have 40 in iraq and 12 in afghanistan. >> and these people are providing acquisition management services. they're providing program management advice, acquisition advice to contracting officers and other managers, to? >> yes or. >> you mention in response to
commissioner zakheim's question, has anyone ever called, i've got a problem, my boss is asking the something and it crosses the line. and you said no, they never have. >> not that i received that call. i believe. >> i just find it hard to believe, human nature being what it is, and you acknowledge this and issuing, that your people are probably more experienced in the workings of jcc-i/a contracting that is the new civilian or military contracting officer walking in the door to a new assignment. it's just hard for me to believe since 2004 there has not, in any discussion that crosses this line. so i guess my question to you is, what is your level of confidence, percentages, that nothing like this has ever
happened? >> i will come at a question from two ways. the first is, the requirement we have for jcc-i/a since day one has been to bring very experienced people. that make people better for the acquisition process and recognize these things. we talked about that before. so i guess i would say that i ensure, likely, that there've been conversations between some of our people that are very experienced with somebody that is not, you know, this is the way that i see this, but i'm providing advice. that's a we are required to do. you have your responsibilities as well to do, and that's awarding the contract and making those decisions. so i suspect and i would guess we have more of our express people had let on a person-to-person basis. that's what we expect the people at that time and experience. >> the whole definition is so
much, okay. dr. raney come you mentioned that deputy parc is your corporate mr. work on would you characterize that oversee your work, how many are assigned to your activity? >> we are very blue collar organization out in the field that we provide mechanics and supply guys. we have the same type of course, you know. pfc, or a colonel or a lieutenant colonel, or all right, depending on what it is. in afghanistan we have i think it is 35 course of side two is on our contract. they have day jobs i'm sure. not just to watch us. and that is an increase from prior years. as we have grown, so has the core staff. >> are any of them contracted
personal? >> no. they are all either army civilians or green. >> how would you characterize their skill level to oversee whatever contractor overseas? >> is a bit of a mixed bag, not every corner is assigned is a superior humvee mechanic, or as we go into -- we are the largest repair of ms and afghanistan bigger come along, and the core functions they have been trained to get also have a technical expertise that is required to allow them to do the job. so there is just a mixed story by and large that they work for, as the core, they also worked for a branch or a supervisor that has the expertise or maturity and fit or. >> okay. there has been some initial
concern expressed by dcaa that enteral control activities related to your subcontractor billings were not adequate. it was further reported that a gsi was not able to manage the billing of its largest subcontractor, and ags is not sufficiently review subcontractor billing records. would you comment on those, albeit, preliminary observatio observations? >> i believe you're referring to the sigir report. and i would say ground truth there. we took those lessons learned, and we have up to our game in terms of monitoring subcontractor billings. the way, it's really important
to understand how we got into the situation of over billings in the first place, if you would like to hear the cliff notes version of that sort because it really is important to what led to the corrective actions. >> well, i would just caution you, or suggest, if i might, that this whole issue with subcontractor billing, with workforce, international, the panama law firm, i would just, and the mixture and relationship with some of your officers and directors of agsi, i would just suggest that the government understands that whole concept because it is a tangled web, if
what i read in only part, probably partially only understand. at the end of the day, as aecom is trying to build its reputation, i think it's terribly important that the government understand all of these nuances that have gone into some of these questions that sigir has raised. >> may i respond? >> please. >> you mention fiber workforce because a company that was proposed as a subcontractor on a major bid. a series of major bid action. and any if i wasn't process when the government pushed back, if you will. asked the questions, it became clear that that was not a direction that the government wanted to go. and so we dropped that. would've never done business with fabra in that context. and we modified our whole method of execution in order to
accommodate those concerned. >> okay. thank you. nothing further. >> thank you, commission. the process we're going to use here is that commissioner tiefer has a few extra questions, so he's going to be given 10 minutes to process his question. commission, please. >> thank you very much, mr. chairman. i appreciate that. dr. raney, general field said you had at least one of your contacts off of the gsa schedule. is that ron? >> that's correct. the current one. >> so when you took it, it wasn't put out for separate competitive proposals do? it was open competition. >> i'm sure, was it taken off the gsa schedules because it was a warrant under the gsa schedule. >> thank you. my question. listen carefully. the way the public, they would
like to know the answer, wasn't put out for competitive proposals? wasn't put out for public bidding speak was yes, it was put out for competitive proposals. >> separately from the gsa schedule? >> no, under the gsa schedule. >> you did the gsa schedule process, right? that's separate from the competitive proposal process. >> anyone who has the schedule could have been on that contract. >> was at the same exact thing as the full and open competition process by which, i talked to all my students all the time. >> no, it was not. >> thank you. thank you. it wasn't the same thing. >> you are correct. >> thank you. otherwise i would have had to change the grades. >> we will live our life coach of the senate at this point as the u.s. senate is about to gavel in to begin the week. first up general speeches with legislative work start in about
an hour. consideration of a nomination of the treasury undersecretary and later this week the senate begins work on a financial regulation bill. live senate coverage right now here on c-span2. awareness of your presence. open their eyes to the things that threaten our democracy and give them the wisdom to guard our freedom. remind them that beyond the appraisal of humanity resides the searching light of your judgment. lord, widen their sympathies, expand their understanding, override their mistakes until
your will is done on earth even as it is done in heaven. we pray in your wonderful name. amend. the presiding officer: please join me in reciting the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, aprl 19, 2010, to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby
appoint the honorable mark warner, a senator from the commonwealth of virginia, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. mr. reid: mr. president? the presiding officer: the senator the majority leader. mr. reid: 15 years ago today 168 americans died in a despicable act on a federal building in oklahoma city. i would therefore ask the president of the senate to declare a moment of silence in memory of those who were there that day and many other victims and survivors of terrorism at home and abroad. the presiding officer: without objection, the moment of silence will be observed for any and all victims of terrorism both at home and abroad.
thpresiding officer: thank you. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: following leader remarks, the senate will be in a period of morning business until 3:00 p.m. today. senators will be allowed to peek up to 10 minutes each during that time. following the closing of morning business, the senate will turning to an executive session to debate the nomination of lael brainard to be undersecretary of the treasury. at 5:30 there will be a cloture vote on that nomination. last week i filed cloture on five nominations. it is my hope that we will be able to work out time agreements on each of these nominations. if we're unable to do so, we'll be in session around the clock until we have votes on all these nominations with speeches an votes taking place -- and votes taking place during that time. upon disposition of the nomination, we'll return to
legislation reform for wall street. mr. president, holding these huge banks accountable for the enormous economic crisis is about more dollars an cents. -- and cents. it's about fairness and justice. it's also about learning lessons from the mistakes of the past so we're not bound to repeat them. those who cared only to boost their own holdings and accounts must be held accountable. to those who have gamed the system, the game is over. wall street's ability to recklessly risk a family's future must be a thing of the past. those who dealt with deception and benefited from the cover of darkness must be called out and brought into the detail light. that's why the bill we'll bring to the floor will include the strongest protections against wall street greed wsm we'll give families more control over their own finances and give consumers more clarity so they can make the right financial consists. our bill will not -- decisions.
owl bill will not end taxpayer bailouts. -- our bill will not end taxpayer bailouts. that's what some say, mr. president. but the fact is, that's what it's all about. it will end taxpayer bailouts. it will wall street accountable, the excess and the harm it does and it will ensure that banks fully disclose what they're betting on. and, for once, make it more clear, mr. president, what people are allowing these banks to do. our bill creates an independent agency to protect consumers and stops banks from take excessive risks with families' hard-earned savings. we're cracking down on the subprime mortgage scams an forcing big banks and credit card companies to deal more banks to deal honestly with their consumers. i support accountability and economic security. those oppose to it favor
secrecy,er responsibility and reckless risk taking. i'm sure my counterpart, the distinguished republican leader, have some thoughts to share on this reform as well. when the senate hears from him, i assume they will continue to make the case, a very weak case he's made for the past week or so here in the chamber and over the airwaves. this bill is about accountability and honesty. so let's hold the legislator to the same standard when they talk about it. reform, my republican friends, repeat false claims. let's repeat basic facts. the bill that will come on the floor will protect taxpayers. will not leave taxpayers with the tab as the other side pretends. this bill is not a bailout. republicans know that, though they refuse to say it. and the presiding officer has done remarkably good work in going to that end.
afterall, if this is such a good deal for wall street bankers, were are they lobbying so hard against it. this is a bipartisan product and it includes many republican ideas that were proposed during months -- i repeat -- months of negotiations with republican senators. chairman dodd has worked for months with ranking member shelby and senator corker. senator dodd has led bipartisan working groups and held bipartisan meetings. all of these meetings produce solid bipartisan ideas that will be in the legislation that we bring to the floor. last november senator shelby said democrats and republicans agreed on at least 70% of the bill. last month senator shelby said negotiators agreed on 80%. senator corker said the negotiations were constructive and said consensus is in sight. so the republican leadership's claim that this is a one-sided effort doesn't pass the lab test. this plan is not partisan, as
the other side pretends. republicans know that though, again, they receive to say it. republicans also refuse to admit whose side they're on. earlier this month the republican leader and the head of the republican senate campaign committee went to wall street. they met with the bankers and hedge fun managers and ben -- who benefited more than anyone from the broken system and, of course, are trying harder than anyone to try to stop us from fixing it. that is, the hedge fund managers and the bankers. so every time republicans make these false claims at this late stage of the process, they're really saying they want to protect their special interest friends on wall street. rather than stand up for taxpayers an shareholders -- and shareholders, they want to stand with the same banksers who cost eight million americans their jobs. devastated so many families in economic security and jeopardized our nation's
economic stability. when republicans talk about the talking points they want to stop reform. those who beared burden of wall street's greed couldn't disagree more. we learned that the s.e.c. is investigating goldman sachs for its role in the financial meltdown. i'm glad that the government is looking into goldman and other firms involved in this disaster. but this is not just about executives or the traders. it's not just about familiar faces and bold names. this is about our ability to trust in our financial system. it's about families keeping their homes an knowing their savings -- an knowing their savings will be say it's about right anening wrong -- and wrong. again, it's our job to get to the root of the problem. their greed, deception and responsibility. wall street looked out for only their immediate gain. so far the same is guiding our republican colleagues. wall street concerned itself with short-term success rather
than to think about what is right for the economy in the long run. so far republicans in the senate have shown -- share their same concern, that callous concern. wall street had myths and misinformation and disregard for hard-working families. so far republican senators are following the same game plan. wall street sees no need to ensure this kind of crisis ever happens again. so far neither do our republican friends. wall street ran wild because there was no transparency. well, the senate republican strategy has been transparent as can be. all they want is to stop necessary reform in its tracks. i agree with paul kudman who called the republican tactics a shameless performance. we've seen and run these plays before in health care and other issues. it didn't work then and won't work now. the system is broken and
consumers need better protection, taxpayers need our guarantee that they will never again be called on to bail out a big bank. that's plain to see. you can draw a straight line from the oversight to the collapse of the housing market on main street throughout nevada and all across america. here's the difference, we want to change the rules. republicans want to change the subject. mr. president, as i indicated, we now have five nominations before us. i wish i could say that wall street reform is the only arena in which republicans are playing partisan games, but that's not true. as a matter of -- it's a matter of fact, not opinion. democrats treated president bush's nominations far better than republicans are treating president obama's. in fact, no president has been treated like president obama's been treated as far as nominations. no president. president obama has 99
administration nominees awaiting confirmation by the full senate. at this point president bush's first term, take that as an example, the senate confirmed all but five. we've confirmed all but 99. 99 to 5. many americans have never heard these nominations' names before, but that doesn't make their jobs any less critical to our country. it's about one party deciding that government should not work and deciding they shouldn't have to work either. they're preventing people from going to work to make our country better. they're outright abdicating their constitutional responsibility to confirm or deny the president's nominees. their decisions are grounded in flected partisanship. republicans are treating judicial nominees the paper say. president obama had 22 nominees
awaiting confirmation. 22 are waiting right now. at this point in president bush's first term the senate confirmed all but seven. 22 to 7. that means republicans have stalled more judicial nominations than they've allowed have us vote. many of these nominees reported by the judicial committee have been pending more months and months. every time the republicans stand in the way to do its judicial job, the public pace the price. this is not how the senate operated in the past. this is unique. it is unprecedented and indefensible. mr. mcconnell: mr. president? the presiding officer: the republican leader. mr. mcconnell: i want to join the majority leader in
recognizing the 15th anniversary of the oklahoma city bombing and add my voice to the others that have remembered the loss of life we suffered on that are terrible day. i also extend my sympathy to the survivors and to the families of the lost. it's impossible for most of us to understand how someone who could commit such a terrible act. it's impossible for most of us who appreciate the pain of losing a loved one to such a violent, senseless act. but we can try to console them and we can work tirelessly to prevent other terrorist acts against other innocent men and women both here and abroad. so on this solemn anniversary, we resolve once again to fight terrorism wherever we find it, and to never forget the people who suffered from it. we will never forget oklahoma city or the people who lost their lives on that day. now, mr. president, turning my attention to the financial
services bill. it came out of the banking committee on a party line vote without any republican support. so where are we? the debate over financial regulatory reform continues this week. so let me just recap where we are, the progress we're making, as well as some of the most unhelpful things we've seen. over the past year or so, democrats and republicans alike worked long and hard to construct a bill aimed at preventing the kind of financial crisis we saw in the fall of 2008 and, just as crucially, to prevent any future bailouts of the biggest wall street firms. that was the goal. progress was made. but then in a rush to get the bill to the floor, these talks stopped. so last week, i came to the floor to point out the flaws that resulted from this partisan approach. one of the biggest of these was the creation of a $50 billion
bailout fund. it seemed to me and many others that the very existence of this fund would perpetuate the same kind of risky behavior that said to the last -- that led to the last crisis. that wasn't just my take on it. that was the take of the "washington post," the "wall street journal," former clinton secretary of labor robert reich said it would lead to another bailout. and on this point, there seemed to be fairly broad consensus from senate republicans, who, interestingly enough -- to, interestingly enough, secretary geithner himself. a member of the president's cabinet also thought the fund was ill-advised. so the reaction i got was somewhat amusing. some of our friends on the other side raised voices of protest because i'd spoken up about the flaws in the bill. others ginned up the press with some inside washington line about talking points and pollsters. and over at the white house, the president criticized me in his weekly radio address, even as his deputies worked to strip the
very provision i had called into question a few days before. well, they can't have it both ways. so my advice at the beginning of this week is that we focus not on personal attacks or questioning each other's motives but on fixing the problems in this bill, and that means doing everything we can to make sure the final product doesn't allow for future wall street bailouts. now, both parties agree on this point. no bailouts. in my view, that's a pretty good start. so let's come together and direct our energies toward making sure we achieve that goal and leave out all the namecalling and second-guessing. what last week showed me is that we have two options as this debate moves forward. either we let the people who know this legislation bet get back to the negotiating table and work out a solution that's acceptable to both parties and to the american people or i can come down to the floor, identify some of the flaws in the bill,
watch as people come down to scream and yell about my suggestions and my motives, and then wait for the white house to agree with me at the end of the week. i'm perfectly happy to do the latter if it means we get a better bill in the end. but it seems to me that a far more efficient way of proceeding is to just skip the character attacks on anyone who dares point out the flaws with the bill, be they provisions that expose taxpayers to wall street bailouts or those that would further worsen the job situation, and work out those problems now. forget the theatrics and get to work. again, i'm happy to come down and identify additional problems. i could mention, for instance, my worry that the current bill would drive credit -- dry up credit even more for small businesses and community banks. the experts know that this and other problems exist in this bill. if the administration wants to continue to pretend that it doesn't, then you'll see me down
here every single day. but my preference would be to let the experts work through these problems on a bipartisan basis. so let's go back to the negotiating table and work out these problems and then come together and have a bipartisan vote that will give the american people confidence that this bill isn't just one party's way of solving this problem. these problems are not insurmountable. this bill is not unfixable. we can reform wall street without making taxpayers pick up the tab. let's do that, then give the american people a strong bipartisan bill that an issue like this deserves. mr. president, i yield the floor. the presiding officer: the majority leadership time is reserved. there will now be a period of morning business until 3:00 p.m. with senators permitted to speak thern for up to ten minutes each.
mr. alexander: mr. president? the presiding officer: the senator from tenssee mr. alexander: i ask unanimous consent the quorum call be vitiated. the presiding officer: without objection. mr. alexander: mr. president, on april 15, benjamin hooks died in the city where he was born 85 years ago, the city of memphis. later this afternoon, i and senator burris and senator corker will introduce a resolution honoring the life and achievement of dr. benjamin l.
hooks. that the text of that resolution be included in the record following my remarks now. the presiding officer: without objection. mr. alexander: benjamin hooks was certainly one of tennessee's most distinguished citizens and one of america's leaders in this last half century. he was a patriot, a family man, a visionary, a lawyer, a storyteller, a preacher. and for my wife and i, he and his wife francis were close and good friends. it's hard to start talking -- i -- there will be a funeral service in memphis on wednesday. i will attend it, will make remarks there, but i wanted to say just a few words about my friend, dr. hooks, on the floor of the senate today. ben hooks was born april 15, 85 years ago. he leaves his wife francis and
his daughter, patricia gray and two grandsons. he was the fifth of seven children born to robert b. and bessie hooks. and right from the beginning, he was part of a pioneering family. he was the grandson of julia hooks, the second black woman in the united states to graduate from college. young ben hooks went on to la lamoines in memphis and graduated from howard. he served in the united states army. he was a patriot. and while in the army, he learned something more about injustice when he found that some of the prisoners of war that he guarded had more rights than he did to eat in a restaurant. his pioneering continued when he went back home to memphis after the war. first he had to get a law degree, and at that time, no
tennessee law school would accept an african-american law student. it was the same in arkansas. i remember george haley, the brother of alex haley -- that's another tennessee family, the haleys. george haley was able to go to university of arkansas at about this same time and was required to sit by himself in a separate room because they simply didn't know what to do with an african-american student. ben hooks chose to go to depaw university in chicago, where he received his law degree in 1948 and came back to memphis. he kept pioneering. he was one of the few, if not the first, african-american lawyer to set up his own practice in memphis. he was appointed to the shelby county criminal court by governor frank clement of tennessee in 1965, making him the first black criminal court judge in the history of our state.
he and dr. martin luther king worked together, and he lived to see dr. king go from being someone who was reviled to someone who was honored by having a national holiday in his name. in 1972, benjamin hooks became the first black appointed to the federal communications commission. that was at the recommendation of senator howard baker, a republican senator, and a republican president, richard nixon. ben hooks was able to support leaders of both parties. he supported the 1972 presidential republican ticket. he supported senator baker in his races, and his wife francis supported me every time i ran for public office in tennessee, which has been a lot -- five different times -- and everybody knew that francis hooks wouldn't have been supporting me if ben hooks didn't know about it.
in fact, it's hard to think of ben hooks without francis. i can't think of a time that i talked with him that i didn't start with her. she was his sweetheart, his ally, his secretary, his assistant, his advisor, and all of us send to her and to her family our -- our thoughts during these days. i talked with her for a few minutes just awhile ago. benjamin hooks became best known in this country when he was elected executive director of the national association for the advancement of colored people, naacp, in 1976, and he served in that role until 1992. during that time, the naacp grew by hundreds of thousands of members due to ben hooks' leadership. ben hooks was an ordained minister and he delivered sermons for more than a half century, and they were sermons well worth hearing. ben hooks had the combined gifts
of a southern preacher, a southern lawyer, and a southern politician, and he could turn a phrase and turn the audience inside-out and upside-down with his phrases just as well as one of his most touching speeches was his eulogy at the funeral of a former senator, albert goa h. gore sr., which i they renewed their wedding vows after almost 50 years of marriage. in november of 2007, just about 2 1/2 years ago, benjamin hooks was awarded the presidential metal of freedom, a high civilian honor in the united states, by president george w. bush. he has helped to establish in his hometown of memphis the benjamin l. hooks institute for social change at the university of memphis.
in talking with some of the faculty members at this institute a few years ago, one of them said that ben hooks understands that our country was a work in progress. he'd seen the hard parts of it. he'd seen the injustice of it. when he -- before he died, he was still sad and angry about some of the injustice that exists today. but he had also seen the promise of it as well. and through his lifetime, he lived through the king days, the sit-ins, the days of the first black criminal court justice, where it was commonplace for african-americans to graduate from law school, the election of the first african-american president, the rise of the national -- of the naacp, ben hooks saw the great promise of american life. after he was awarded the medal of freedom in 2007 by the president, i hosted a -- a lunch for him in the senate dining
room downstairs. those who come to the senators dining room are accustomed to seeing distinguished visitors. in fact, that's why most people go to the senators dining room, to be seen. but that day ben hooks took over the dik dining room. he was by far the most distinguished visitor there. some very well-known people came to pay respect to him. one of those was the late jack kemp who worked with dr. hooks on civil rights issues for many years. but the greatest commotion was caused by the people who work in the senators dining room, those who serve, those who wait tables, those who cook in the kitchen. they all wanted to shake ben hooks' hand. they wanted to say hello to him. they wanted his autograph. and most wanted his picture. we'll miss ben hooks leadership. we'll miss his vision. we'll miss his capacity to work with both republicans as well as democrats. tennessee has lost one of its
most distinguished citizens but we're grateful for that life. and many memphis on wednesday, we will celebrate the life of dr. benjamin l. hooks. mr. president, i thank the cha air. i yield the floor. i notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
senator from new mexico. mr. udall: mr. president, i ask unanimous consent to vitiate the quorum call. the presiding officer: without objection. yew yew i rise -- mr. udall -- i rise to discuss rica, first introduced in this body 21 years ago today, proposed by the senator from utah, orrin hatch, this original legislation was a monumental step in recognizing some of the unheralded victims of the cold war era. as the united states government built up its cold war nuclear arsenal during the mid20th century, many americans paid the price with their health. some were sickened through exposure to above-ground atomic weapons tests. others were exposed to heavy doses of radiation from working in the uranium mining industry.
all the while the government was slow to implement federal protections. as a result, a generation of americans who worked in the mines or lived near testing sites became sick with serious diseases like lung cancer and kidney disease and many others. much of the united states uranium development occurred on the navajo nation. that's where jobs in the mines and mills drew workers from the surrounding rural areas. these workers and much of the country were unaware of the dangers of radiation exposure, and this was despite reports from the european mining industry indicating that uranium mining led to high rates of lung cancer. there should have been a warning call. there should have been a wake-up call but there wasn't. in the ensuing years, rates of
lung cancer among navajo indians went from disproportionately low to disproportionately high compared with the rest of the u.s. population. this was clearly a result of uranium development and the related radiation exposure. in addition to lung cancer, numerous other illnesses began to emerge in the men and women who worked in the uranium mining industry. these individuals were not limited to the navajo nation. in my home state of new mexico, the pueblo of laguna was home to the nation's largest open-pit uranium mine. workers from across the state came to the mines, especially from the economically struggling communities of rural new mexico. in the late 1970, my father, stewart udall, took up the fight for these workers. the in 1979 my father filed 32
claims against the department of energy on behalf of widows of deceased navajo uranium miners. in many ways this marked the beginning of the fight for compensation for all uranium workers. i remember working those years with my whole family to collect information and push for recognition. it was a family effort to fight for justice. and for me, it continues to be a family priority. ten years later the original rica legislation was introduced in the united states senate. it passed in 1990, giving a level of restitution to sick miners and mills as well as -- miners and millers as well as individuals living downwind of nuclear tests. amendments to rica have occurred over the ensuing decades, most significantly in 2000. that's when the act was expanded to include mill workers and/ore
transporters and expand downwind counties, among other things. today with senators jeff bingaman, my crapo, michael bennet and james risch, i introduce a piece of legislation that takes the next step that addresses the remaining shortfalls in the uranium exposure compensation act. i would like to highlight some of the provisions of our bill. first the inclusion of post1971 uranium miners and workers as qualified claimants. while the federal government ceased purchase of domestic uranium in 1971, implementation of federal work safety standards was slow and regulation of mines was poor. as a result, thousands of miners and millers were never made aware of the dangers of the yellowcake they handled on a regular basis. in recent surveys, the majority
of uranium workers from this period report that they did not have showers or wash basins in the mines where they worked. they often took contaminated clothing home for laundry, unaware of the hazards and with no other option for cleaning. many also report that ventilation to prevent unnecessary exposure was not provided in their work areas. today these workers continue to suffer and die from ill innocences related -- from illnesses related to radiation exposure. but because their employment dates began after 1971, they have no opportunity for compensation. our bill changes that. if the measure passes, individuals working from 1971 until 1990 will qualify to claim compensation for exposure-related diseases. the bill we're introducing today would also expand the geographic
areas that qualify for downwind compensation to include new mexico, idaho, montana, colorado, and guam. and for the first time bill recognizes downwind exposure from the trinity site in new mexico. this legislation would raise compensation levels for those exposed as a result of above-ground weapons tests. this would make their compensation consistent with their counterparts who worked in the mines and mills. the bill would also facilitate epidemiological research on the impacts of uranium development on communities and families of ewing rain up-- uranium workers. it authorizes funding fortunate institute of environmental health sciences to award grants to universities and nonprofits to carry out such research. we are seeking to broaden the use of affidavits to
substantiate employment history in residents in an aaffected area. many who have suffered as a result of uranium development not have the documentation to prove their exposure. often miles and mills did not keep -- often mines and mills did not keep proper documentation of their workers. the bill would allow individuals to combine their time worked in multiple positions to meet the work time requirements for compensation in the original rica legislation. finally, this legislation would allow miners to be compensated for kidney disease, and it would allow core drillers to join miners, millers and ore transporters on the list of yew rain yam workers who qualify for compensation under the act.
uranium development under the cold ore era left a gruesome legacy in the community. for two decades the united states has tried to compensate in some way for the sickness and loss of life. today we're taking the next step to close this sad chapter in history and to improve the reach of compassion and compensation to those americans who have suffered but have not qualified under rica in its current form. in introducing this legislation, i'd like to honor all those who continue to suffer from deadly illnesses as a result of radiation exposure, but do not qualify for compensation. especially those uranium workers who began employment after 1971 and thus did not qualify for rica. i look forward to working with my colleagues to recognize these individuals and expand rica to
include all who are justified in receiving radiation exposure compensation. and i thank you, mr. president, and i yield the floor. the presiding officer: the senator from iowa. mr. grassley: first of all, i need to make an inquiry. i don't know what the order is for the senate, but i was going to speak on one of the nominations that's going to be before the senate shortly. i'd like to do that if that's appropriate. the presiding officer: the senate is in morning business until 3:00. mr. grassley: it is now 3:00. the presiding officer: under the previous order, morning business is closed. the senate will proceed to executive session to consider the following nomination which
the clerk will nomination, department of the treasury, lael brainard of the district of columbia to be under secretary. mr. grassley: mr. president? mr. dorgan: mr. president, will the senator from iowa yield for a question or unanimous consent request? mr. grassley: yes. mr. dorgan: let me ask that i be recognized following the presentation by the senator from iowa. the presiding officer: without objection. mr. grassley: mr. president, i want to speak on the nomination of the person just announced. in the process of doing that, i'm going to speak about some other people that have similar issues. tax collection is meant to reflect shared benefits and appeal to equality as a fundamental value. however, to paraphrase george
orwell, some people are more equal than others. more specifically, several recent presidential nominees have apparently set themselves would have above the typical american citizen in the lack of the importance that they play -- that they place on complying with their tax obligations. this certainly seems to be the case with dr. brainard, nominated to be under secretary of treasury for international affairs. as a nominee, dr. brainard was treated the same as any other nominee to come through the finance committee in the nine years that i have been either chairman or ranking member. for the past nine years and likely much longer, the finance committee has vetted all presidential nominees referred to the committee, and that vetting includes a tax review.
the tax review of dr. brainard uncovered three basic issues. these issues have been described in much detail in a bipartisan finance committee memo released november 18, 2009. i also discussed them in a statement that was printed in the congressional record december 23 last year. i would ask unanimous consent that the finance committee memo be printed in the record. the presiding officer: without objection. mr. grassley: those seeking to criticize the finance committee's vetting process are quick to mention the length of time dr. brainard has been a nominee. she was nominated march 23, 2009. her hearing was held on november 20, 2009. the reason for the passage of
nearly eight months was that the nominee persisted in being evasive and nonresponsive to very basic questions arising from the routine review of tax returns. there are still questions that were not clearly or consistently answered despite multiple rounds of questions. other questions necessitated multiple answers as new information came to light. example. the committee learned on october 12, 2009, nearly seven months after the nomination, that the nominee failed to timely pay 2008 property taxes for rappahannock county, virginia, and that the nominee was delinquent while the tax vetting was going on. i've said this before, but the reason the review of dr. brainard took several months
was that she was not forthcoming in her answers. as the committee memo details, some of her answers contradicted each other. i would like to ask those in the committee critical of this nominee if there are some things it is okay to be evasive about to the congress of the united states. is there a point where congress should exep vague and unclear statements and decide that its some sort of big deal. supporters of the nominees find themselves in the position of having to extort the facts in order to make their case. they say that dr. brainard's tax problems involve small amounts of money and some mistakes like late payment of property taxes could happen to anyone. while these statements may be true, they do not deal with the
nom -- nominee's real problem, which as i have said is her unwillingness to fully and completely answer questions for the finance committee. the finance committee's vetting process has uncovered tax irregularities with many past and current presidential nominees. what the committee requires is that the nominee acknowledge and fix these irregularities. unless these tax issues involve substantial dollar amounts or there is information suggesting the nominee deliberately avoided fulfilling their tax liabilities, this issue is not -- this information is not made public and the nominee is allowed to move forward. the finance committee is not trying to embarrass people for making simple mistakes, and neither the committee nor this senator benefit from a lengthy
vetting process. in the case of nominees where difficulties arise to the point where our committee must release information publicly, the committee completes its review so that all information is released all at once, and the nominee is allowed to review information to be released by the committee before the committee ever would release it, so that the nominee would know exactly where we're coming from. dr. brainard was allowed to review the finance committee memo before it was released, and if she had withdrawn her nomination, that information would have remained confidential. it wouldn't have been out there for anybody to know anything about. but we're moving forward with this nomination, so hence any sort of information is public.
dr. brainard is the third senior treasury department nom knee either the finance committee or this senator have taken issue with. secretary geithner's failure to pay his self-employment tax as an international monetary fund employee is well known. just a few weeks ago, jeffrey goldstein was recess appointed to the post of under secretary for domestic finance. while i do not believe that dr. goldstein failed to satisfy his tax liabilities, i do have questions regarding offshore activities of private equity fund engaged in while dr. goldstein was managing director. i was in the process of asking more questions as to the business purpose of these activities and was prepared to let the nominee advance towards confirmation once these
questions were answered. dr. goldstein was be a solved of the need to respond to my questions by the recess appointment made under law by president obama. dr. brainard and secretary geithner both had personal issues the committee released information on in a bipartisan way, and i have unresolved questions regarding offshore activities engaged in by dr. goldstein's previous employer. as concerned as i am with the issues involving this specific nominee, i'm even more concerned by the reaction by some to the information released by the finance committee on this and other nominees. dr. brainard was a fifth nominee of the current administration to run into personal tax issues
during the finance committee's vetting process. with the exception of one nominee who voluntarily withdrew his nomination, all of these nominations -- nominees were confirmed or will be confirmed as i expect dr. brainard to be confirmed. it is not clear that the finance committee vetting of nominees has served a youthful purpose and information released by the finance committee on problematic issues surrounding nominees doesn't seem to have decreased support for their confirmation. i'm not saying that every nominee who runs into trouble should be automatically rejected. i myself voted for one of the five nominees that i just mentioned. however, it does not appear that the information released by the committee on the nominee in this current congress has given much
consideration. the issues involving dr. brainard should have no bearing on political parties, issue positions, or who is friend with whom. the only basic issue should be that everyone needs to pay their taxes as required by law and the nominee should be fully responsive to the congress. in looking at the first of these issues, the nominee showed that she was deficient in the second for the reasons i have laid out here in earlier statements, i will vote against this nominee. however, i do not plan to vote for cloture, and i want to explain that. i do plan to vote for cloture, and an explanation is -- my colleagues should have. despite my own opposition to the nominee, i do not want to prevent other senators from
considering the nominee. i am not attempting to prevent the nominee from receiving an up-or-down vote. i hope other senators consider the information the finance committee has released and will consider what i have said and will come to their own decisions as to which way to vote. and i have a unanimous consent request on another matter. i ask unanimous consent that william storm of my finance committee staff be granted privileges of the floor for the duration of the 111th congress. the presiding officer: without objection. mr. grassley: i yield the floor. mr. doan: mr. pdent? the presiding officer: the senator from north dakota. mr. dorgan: mr. president, we are in executive session, is that correct? the presiding officer: that is correct. mr. dorgan: mr. president, i have the calendar, executive calendar of the senate in front of me. it's on every desk in the senate. it has the pending nominations
that have yet to be acted upon by the senate, and i would note the large number of nominations that have been made on which there are holds, there is delay, there is stalling, and you wonder. here's a may 20, 2009. this is a nomination reported out of the homeland security committee of marisa demeo of the district of columbia to be an associate judge of the superior court of the district of columbia for 15 years. that was may of last year. still pending. john sullivan of maryland, a member of the federal election commission. that was reported out last june. it's still pending. stuart gordon nash, district of columbia, associate judge of the superior court, reported out july 29, still pending. and i'll go through a rather
lengthy list in just a bit, but nominations that have been stalled, delayed, foot dragging, all held up. there are i think nearly 100 of them on the executive calendar that's on every desk. i specifically want to talk about one and then i'm going to ask unanimous consent. the one is about general michael walsh. i know general walsh. i've known him for a long, long time. he's the commander of the mississippi valley corps of engineers. he's been to war for his country. he's a one hch star general. -- one-star general. he served 30 years in uniform for this country. he received his -- he is to receive his second star. to receive a second star for general walsh went through the relevant committee, the armed services committee of the united states senate, chaired by mr. levin, senator levin. the ranking member is senator
mccain. it was unanimously reported out by the committee. by all republicans and all democrats. it is a nomination supported by senator levin, senator mccain, the chairman and the ranking member. and, yet, that nomination was sent to the floor of the senate nearly six months ago and has yet to be acted upon because there is a hold on it. what is called a hold. i have spoken about this before last week. we have a member of the senate who said to the corps of engineers, i'm going to stop this general's promotion to major general until the corps of engineers does the following things that i demand from the corps of engineers in my home state in louisiana. this is senator vitter of louisiana. i did say to senator vitter, i would not come and speak of another senator until i told him i would do that. i told senator vitter i would be critical on the floor of the
senate to what he was doing to general walsh. a patriot, someone who served 30 years for his country in the united states army. someone who has gone to war for his country. he's had a unanimous vote in the armed services committee to become a major general. and now after all of these months, his promotion has not yet moved. why? because of one u.s. senator demanding something that this general cannot do. this general executes policy. he does not make policy. and the demands by senator vitter in two letters that he has sent to the corps and the response from the corps of engineers are four letters i put in the senate record last week. i think it's unbelievable that the career of a distinguished general in the united states army is handled this way by one member of the united states senate. it's unfair to him. it's unfair to the army, in my judgment. and it's the last thing in the
world we ought to be doing, singling out one person and putting their career and their advancement on hold. prohibiting this one star general from receiving a second star because one person in the senate is demanding the agency from which this -- this general works do things that the agency says it cannot do in any event. so i'm going to ask unanimous consent and then i'm going to say a few more words about it. i'm going to ask unanimous consent, and i notified the minority, that the senate proceed to executive calendar 526, the nomination of michael walsh to be major general. that the nomination be confirmed and the motion to reconfirm be laid upon the table, that no further motions be in order and the president be immediately notified of the senate's action. the presiding officer: is there objection? mr. grassley: mr. president, reserving the right to object. the presiding officer: the senator from iowa. mr. grassley: i want to make clear, i do not oppose this
nominee. my friend senator dorgan have no problem with what is he doing. i have been asked on part of senator vitter to object. and so i must object. the presiding officer: objection is heard. mr. dorgan: i understand that senator grassley is acting upon the senator of louisiana. i think the rules at this point are kerr electric in terms of -- derelect in terms of this circumstance. we have a general in the united states army who served this country well whose career is on hold. it's on hold because one person is demanding the corps of engineers is to do certain projects for new orleans an state of louisiana. and, in any event, this person can't do that. i chairman that funds the water programs. as the chairman that funds the water programs, can i tell the presiding officer that billions and billions and billions of
dollars have been sent to louisiana and to new orleans. and i have supported all of that because they were hit with a devastating hurricane called katrina. it had -- it caused dramatic injury to life and limb that no area of the country has been hit harder. i conclude myself among all of those who say that we have a responsibility andy begun to meet that -- and have begun to meet that responsibility in a significant way that has done anything for any state at any time. what the senator from louisiana, senator vitter, is demanding from the corps of engineers, in many cases the corps cannot legally do. in other cases the corps will not do because the appropriations committee voted against that in a recorded vote. and to hold up the nomination to major general of a distinguished army general for all of these months because one united states senator is -- is upset is -- is horribly unfair to this general, michael walsh. i know him. i like him.
he deserves his second star. the armed services committee unanimously has said he deserves a second star. he doesn't have it now many months later. month after month after month after month, one member of the uniteunited states senate, senar vitter, has decided to extract from the career of this officer some penalty because he won't do something he can't do. it's unbelievable to me. and i would -- i would ask my colleague if -- if he wishes to object, i'll come tomorrow. i'll set a time. i wish that he would come to the floor and object to my amendment or to my request and tell us why he believes this general can do that which the general does not have the authority to do. and if he finally understands that this general cannot do what senator vitter wishes him to do, i wish senator vitter would stand aside and decide not to interrupt the fine career of this military general.
so, you know, i won't speak more about this. but i will come to the floor tomorrow and i will notify his office whenly be here and perhaps -- i will be here and perhaps he won't have others object for him. and perhaps he will explain to this general, the united states army and the american people why this general who served 30 years and served in war time has not been able to get his second star and has had to wait month after month after month after month and more. it is unfair and it is wrong and it needs to be corrected. now, mr. president, let me, again, say this has 90 -- i believe it's 93 to 100. i'm not sure of the number today. last week it was 93. but all of these nominations, winslowe sergeant to be chief counsel for advocacy of the small business administration reported out of the committee september 16th, last year. not acted on. brian hayes, national labor relations board, reported out
october 21st, last year. well, the list goes on and on and on. i guess just a strategy, not just on this, but virtually on everything to object. in fact, there was one person on this list who is coincidentally from my home state. and that person was a -- was a nominee for the general services administration. her name was martha johnson. well, martha johnson was nominated to be the head of g.s.a. g.s.a. is the federal agency that manages more property than any agency in the world. it manages all of the federal property. one senator put a hold on martha johnson's nomination. the result was there wasn't someone to run the general services administration for almost a year. almost -- i believe it was 10 months. and then when, finally, we invoked cloture at -- after great length, then the vote on this nomination was 96-0.
not even the person that put the hold on for almost a year voted no. everybody voted yes. so the result was a federal agency that desperately needed leadership didn't have leadership for almost a year. why? one senator said, well, i'm going to put a hold on this. they were upset about something and the result was everybody pace. all american taxpayers pay because he don't have the leadership in an agency that desperately needed the leadership. that's just an example. but it has been so unbelievably disappointing to see what's going on the floor on almost all of these things. i'm inclined to think that we should go through one by one and have 93 unanimous requests and i will do that tomorrow and perhaps others will as well. i guess if you object to everything, including have government work the way it's spoasd to work effect ily and efficiently on behalf of the agencies in these agency that's need leadership i don't quite
understand why you come to the senate if you believe the only answer is no. it doesn't need to be someone who thinks who decides the answer is no in every circumstance. well, mr. president, let me ask consent to speak for five minutes in morning business. the presiding officer: without objection. mr. dorgan: mr. president, i was looking this morning at something i've had on my desk for a long, long while. and i was thinking about words and words that matter because there have been a lot of words recently about the issue of financial reform or wall street reform. how it's done, when it's done, whether it's done. and i was thinking about the loose use of words and that words don't mean what they used to mean. and i went back, because i kept this on my desk for a long time. i went back to something that was sent out widely across the
country. and it was from something called go back. i think it was kind of the start or at least the genesis of the collapse of comity or the use of good language. this was sent out widely around the country to several people who said we heard all these candidates across the country who said, i wish i could speak like newt. meaninmeaning newt gingrich. it was sent out, you can speak like newt gingrich. it said, we've actually done a lot of work developing polling on contrasting words. and if you'd like to speak like newt gingrich, here's some help for you. here are words. and then they sent this out. it says, apply these words to your opponent to their record, to their proposal, their party. they have a long list of words, sick, lie, betray, traitors,
pathetic, threaten, corruption, punish, corrupt, cheat, steal, abuse of power. news these words -- use these words when you describe your opponents, they said. they said these are the positive words you should use when you use yourself, pro flag, pro children, pro environment, liberal -- liberty, excuse me, liberty, principle, pioneer, truth, moral, courage, family. and the list goes on. and i thought when i -- when i received this a long, long while ago how unbelievably pathetic it was that we're merchants of destructive politics marketing this trash around the country. and yet they were and have for a long, long time. it is the case that they use pollsters to do this, tell everyone what kind of words exist that will motivate both negatively and describe your opponent, sick, pathetic, lie,
betray and what will motivate your support erts. and i dug that -- supporters. i dug that out because in recent days and weeks we've seen examples of language that matters an instruction -- and instruction on how to use language to describe your position. and i was interested in -- in seeing the results of a pollster who described the way to attack financial reform. and, again, it wasn't in the same way of the go pack polling to find the most destructive way you could describe something. but it was similar in the sense, how would you construct something -- notwithstanding the facts, how would you construct something no matter what the facts might be? and this is polling work done, it says frankly the single best way to kill any legislation is
to link it to the big bank bailout. so the words that would matter no matter what the circumstances are the single best way to kill any legislation is to link it to the big bank bailout. words that work: taxpayer funded bailouts reward bad behavior. tax pairs should not be -- taxpayers should not be held responsible if a business is big, no matter how big, let it fail. if these words sound familiar, it's because you've heard them all on the floor of the senate in recent days and you've heard them on television a lot fleent days. it is the issue of how do you develop language that motivates people. notwithstanding the set of facts. it's not reform. again, quoting from the polling work. it's the stop the big bank bailout bill. that's important. this is not a reform bill. it's a stop the big bank bailout. so what we have here is the battle of polling. so how can you describe words that work, language that works,
notwithstanding the set offing facts that you might be -- set of facts that you might be discussing? effectively if we're going to deal with wall street reform, reforming our financial system, it r it's not going to be -- it's not going to be with the battle of pollsters. it is not going to be here's how you motivate someone using these words. it is to think through what happened and how to make sure it can't and doesn't happen again. i hear a lot of talk there needs to be bipartisanship. i agree with that. love to see bapship on specifically the -- bipartisanship on specifically the things that have teeth and will prohibit that from happening in this country ever again that. won't be done in my judgment by stepping back aways or use the right touch. i'm not for a light touch i'm for the right touch. i've seen the light touch for the last decade now, at least a substantial portion of the last decade. we've had significant agencies,
s.e.c. among others, that were in a deep rip va van winkel sle. we've had the s.e.c. go without notice on what companies were doing to bilk taxpayers and nobody was doing anything. i was here when new regulators came to town and said, do you know what, we're going to be willfully blind here for a little while. it's a new day. the fact is regulation is not a four-letter word. the free market system works but it works when you have a referee. the referee with the striped shirts and the whistle is needed to call the fouls because there are from time to time fouls that occur in the free market system and that's why we have regulatory capability and authority. so the question of what kind of financial reform or wall street reform is developed is not going to be about the language of financial reform, which is what this is about, a document that's been distributed. and i've heard it -- i've heard it quoted many times now in recent days. it's not going to be about the language. it's going to be about the specific set of policies that
will prevent what happened to this country from ever happening again. and i -- i'm going to come and talk about some of that but i department to say i was thinking about the issue of the use of words and i find it pretty interesting to -- to listen to the use of specific words and to listen to the menu of the language of financial reform that comes from the pollster and then comes straight out of the mouths of others very, very quickly. mr. president, i yield the floor, and i make -- i'll withhold a point of order. a senator: mr. president? the presiding officer: the senator from tennessee. mr. corker: i wish to speak as if in morning business. the presiding officer: without objection. mr. corkerer::er: mr. presidenti thank you. i thank my friend from north dakota. i too have been very distressed about the conversations around financial reform. and i don't think any side -- either side of the aisle deserves a badge of honor as it relates to the way this has been
discussed. and i agree with him that this is something way beyond using poll-tested language and should, in fact, be dealt with in a serious manner. so i share -- i didn't hear all your comments but i certainly agree with you that we ought to deal with this in a serious way. if i could just one moment, i do want to say that tennessee's lost a great human being, dr. benjamin hooks, and i want to join with my friend from -- alexander from tennessee, senator alexander, in being part of a resolution to talk about his wonderful life. i know that we're going to be having ceremonies in tennessee this wednesday, but certainly he was a wonderful individual who -- who did much to benefit our country and we all are saddened with his passing. mr. president, you and i have had a number of conversations over the last weekend regarding financial reform.
we've had a lot of conversations over the last year regarding financial reform. and as i've watched the public discussions over the last several days, i've been greatly distressed. as a matter of fact, i spoke this morning to a large number of businessmen in nashville, tennessee, and, candidly, became so angry thinking about the way this debate has evolved that i had to think about coming up here today and controlling that and using that in a productive way. i noticed throughout the day maybe the temper of the rhetoric has changed a little bit throughout the day, and i know that my friend from virginia and my friend from connecticut had a press conference earlier today to talk about some of the issues that are being talked about rhetorically. and let's face it, what's happening right now -- and it's unfortunate for the american people -- what's happening right now is both sides of the aisle are trying to herd up folks with
language that really in many ways i don't think does justice to this issue which is very important, very difficult, and something that's very much needed in our country. there's been a lot of discussion about this -- this funding mechanism, this $50 billion bailout fund, if you will. that's somebody else's words, by the way, not mine. but the fact is -- let's just talk about this. and i know the american people are probably tuning in in some cases and wondering how we're jumping into the middle of this on the senate floor without a -- without a lot of predialogue, but the fact is that we have a financial reg bill that i hope is going to come before us soon that will deal with something called orderly liquidation so that when a large institution fails, it actually fails. i mean, i think that's what the american people would like to see happen. and so there has to be a mechanism in place, if a -- if a firm is systemically important
to our country, there need to be the tools in place to make sure that it actually goes out of business. i don't think people in tennessee like to see that when a community bank fails, it actually goes out of business but when a large wall street firm fails, we prop it up. and i think that the senator from virginia, who happens to be presiding today -- i wish he was on the floor with me so we could have a colloquy over this -- but the fact is that that is something that is important to address in a bill. a bill certainly needs to deal with derivatives. we need to understand -- we need to know that we can have a process where derivatives are cleared and we don't have anybody building up a lot of money bad instead of just doing it on a daily basis, they end up in a situation where there are huge obligations. and we need to deal with some of the issues of consumer protection. so, mr. president, there's been a lot of discussion about how we create something called debtor in possession financing so that
when the fdic comes in and seizes one of these large firms that fails, it has the money to -- to keep the lights on and to pay payroll and those kind of things while it's selling off the assets of a firm like this. the fund that's been discussed in this bill that's going to be changed i know -- and i'm fine with that, and i think that's perfectly, perfectly good -- but this fund that's been set up is anything but a bailout. it's been set up to, in essence, provide upfront funding by the industry so that when these companies are seized, there's money available to make payroll and to wind it down while the pieces are being sold off. now, a lot of people have said this is a republican idea. there's no question that this is something sheila bair has
proposed. the fdic wants to see a prefund. the treasury would like to see a postfund. they'd like to see it come after the fact. i want to digress for a second and say that i hope the reason that treasury wants a post-fund is not because in lieu of having a pre-fund of $50 billion from these large institutions, they want to see a bank tax. as a matter of fact, i'm going to be surprised if, after republicans argue against a pre-fund and it's changed and the administration comes back and chairman dodd comes back and we end up with post-funding, both of which do the same thing, i might add, and both of them work, it's going to be interesting to me to see if whether that argument basically has led to treasury then having the ability to come back and -- and do a bank tax. i think at the end of the day, that's something that they've been wanting to achieve, and
it's interesting how this debate is evolving. but -- but let me go back to this -- let me go back to this pre-fund. at the end of the day, i think what all of us would like to see happen is to see these funds, these institutions go out of business. and so do you put the money up upfront to take them out of business or do you put it up on the back end where, in essence, what's happening is you're borrowing money from the taxpayers? so would you rather the industry put the money up so the taxpayers are not at risk or would you rather that not happen and during a down time, when it's procyclical, you actually get the firms to put the money up after the fact? i think both of those, by the way, are nice arguments to have and i think they should have been debated in the committee and we can debate it on the floor, but at the end of the day, to make the total debate
about whether it's pre or post, neither of which are central to the argument -- both work, it doesn't matter -- it really doesn't matter. either way, you've got to have some moneys available as working capital to shut a firm down. you can borrow it from the taxpayers -- i don't know if the taxpayers would like that much, and you can do that after the fact, as i've said -- or you can put it up upfront by the industry. either way it's going to be paid back by industry. i will say that in the dodd bill today, there's a post-funding, that if there's any shortfalls, the industry will pay that back. so, again, it's kind of a debate that ends up being silly. in fact -- the fact of the matter is, i know it's going to be changed. the essence of the bill, though, is the fact that you want to make sure that -- that these firms unwind and they go out of business. so let me just -- some of the arguments that are being made,
pre-funding of resolution creates a system where certain participants are effectively designated as a protected class as a result of them paying into the fund. i think it's ludicrous. that's -- that's a ludicrous argument. now, what we could do, if it would make everybody happy, is instead of getting the large firms to pay, we could get community banks to pay too. i don't think there would be many people that would be interested in that, but if we want to get everybody in the country and get the community banks in tennessee -- i'm not interested in that, i don't think the senator from virginia is interested in that -- but if we want to do that, we can ensure that nobody's part of the protected class. so i find that to be a ludicrous argument. here's another argument. "this allows such firms competitive funding advantage over smaller institutions, like community banks.
banks." so in other words, if you're saying that these large firms, if they fail, they're going to go out of business and it's going to be more painful than bankruptcy, that somehow they're protected. i find that -- or have a competitive advantage. i find that to be kind of ludicrous and i hope that argument is not used. it probably will be but i won'te it won't. then there's one i've read recently. the fund is a signal to credit markets that the u.s. government stands ready to prop up, bail out and insulate large financial firms. that's an interesting one. i mean, the fact of the matter is that the -- we're talking about orderly liquidation. the existence of the fund allows managers of large financial institutions to conduct riskier practices and, therefore, counterparties will not feel obliged to perform due diligence because, in the event of stress,
there's such a financial slush fund available to bail out unsecured and short-term creditors. you've got to be kidding me? i mean, that is absolutely the opposite of what is intended. now, let me -- let me say this before somebody tunes out. i think this bill has problems. okay? and i think there are issues that need to be resolved around orderly liquidation. the senator from virginia and i both know what they are, and there are some flexibilities that have been granted to the fdic, to the federal reserve and others that need to be tiented because -- tightened, because there are just some words that should say -- instead of saying "shall" "say "may," when you're telling an agency what they have to do or what they may do. so there's much in this bill that needs to be fixed. and i want to say, as the dodd bill sits today, i could not vote for it. i absolutely cannot support the bill. but what concerns me is 9 rhetoric -- but what concerns me is the
rhetoric, the rhetoric that's being used to talk about something that is very important to our country. and it's being used on both sides, i might add. on one side saying they're, you know, the republicans want to protect wall street firms. i can tell you this. i think there is very few republicans that do not want to see financial regulation take place. and i think there are very few republicans that don't want to see it done the right way. and, candidly, i think most republicans and democrats are listening to community bankers. they're not listening to wall street, would be my guess. so that rhetoric to me is -- is off base. the rhetoric on my side of the aisle saying that -- that this orderly liquidation title basically keeps too-big-to-fail in place, the central pieces of it, that's not true.are there some things around the edge that need to be fixed? yes. and my sense is, as i've said on the floor before, we could fix those in about five minutes if we'd just sit down and do it. and i don't understand, i do not
understand why the rhetoric has gotten where it is. i'd like to see us pass -- pass a bill that makes sense. now, the kind of things we should be talking about, okay, not the fact that -- that this is a bailout fund. and, by the way, whether it's pre or post, that debate -- it doesn't matter to me. the fact is, we've got to have some debtor in possession financing available to wind down these firms, sell off the assets, make sure the stockholders are absolute toast, make sure the unsecured creditors are toast, make sure that it's so painful -- so painful -- that nobody ever wants to go through this. we absolutely need to do that. the american people need to know that we in congress are not going to prop up a failed institution. that they're going to live the same life and capitalism that everybody else has to live. people in tennessee when they fail, they fail. the kind of things we ought to be talking about and have been
talking about -- and i think can solve -- is -- i think we ought to have more judicial involvement in the process. i think we ought to improve the bankruptcy process so that -- so that these large institutions have a more viable route through bankruptcy. i think we ought to deal with the disparate treatment of similarly situated creditors and the fact is, the way the post funding in this bill is now set up, we don't -- if a creditor receives more money than they should, that money is not recouped. we know how to fix that. i know the senator from virginia and i both know how to fix that. those are the kinds of things we need to be talking about. creditor prioritization -- prioritization. there's no question that right now in the bill certain creditors can be treated differently by the fdic than others. we need to be looking at bankruptcy stacks so that people
understand how much they're going to be paid back and they're going to be in the same order that they anticipate being in. we need to be tightening the definition of a financial firm. right now in the bill, the way it reads, an auto company can end up being part of this. i mean, right now it's not tight enough. auto company may be a stretch, but something other than a financial firm could be dealt with the way the language is now reading. and certainly for shiewrks fannie and freddie need to be treated the same as any other financial firm. we need to have a solvescy test to make sure that regulators that do not allow regulators the flexibility to protect firms in crisis. we need to make sure that there's a duration. in other words, if the fdic comes in and has to take over, after due process, tangs takes over one of these firms that has
posed systemic risks, we need to know that there is an end date. the senator from virginia and i agree that conservativeship should not be on the table. this is not a receivership. these firms should not go out of business. language is not in there right. there are a number of things like this. i could go on and on. i'm probably boring much of the watching audience if there is any, with some of these technical issues. but those are the kinds of things that we in this body ought to be talking bflt and, they're important and they matter, but to use up time -- rhetoric, rhetoric that in essence is used to sort of brand something in a way that really
isn't the way that it is, to me, is not productive, and i didn't come here to do that. and i think, again, i think both sides of the aisle have tried to cast the characters in certain ways. it's sort of this herd process that happens around here, right? i mean, everybody wants to get everybody on the same femme so what we do is use rhetoric. it sort of quharnlings people up and gets everybody -- everybody on the same team. i don't like that process, mr. president. i don't want to be a part of that process, mr. president. i have joined in with other republicans to try to make sure that this bill gets in the middle of the road. i've done that on the basis that both sides, both sides are going to deal with good faith. i know that the senator from virginia knows that we went through a process with this bill where we voted it out of committee in 21 minutes.
1,326-page bill we voted out of committee in 21 minutes with no amendments. the stated goal was to make sure that both sides didn't harden against each other and that we could negotiator a bill before it came to the floor -- came to the floor. we'd negotiator a bipartisan bill. that's why it was stated that we did that. i mean, how can responsible senators, 23 senators, both of which -- all of which have problems with this bill, how can you vote something out of committee in 21 minutes with no amendments unless you know that a negotiation process is going to take place afterwards to create a bipartisan bill? nobody in their right mind would have agreed to do that. and so what i would say to my friends on the other side of the aisle, what i would say to the folks on the other end of pennsylvania that seem to be -- turn the rhetoric up, i take it as a commitment, as a
commitment, from my friends on the other side of the aisle that we're going to negotiator a bipartisan bill. and we're going to do that in good faith. but i also -- also expect the same on my side of the aisle. that we're going to negotiator in good faith to get a bill and before it comes to the floor -- before it comes to the floor, before it comes to the floor, the major template pieces will be worked out. the issues around consumer, the issues around orderlily orderly liquidation. there are a number of issues that we need to debate here on the floor that to me are outside the realm of the template itself. i hope that this body -- another senator from virginia -- i know the senator from virginia and i
have quarked together a great deal. we both came from a world that was different from this. i've become greatly distressed. i get distressed at both sides of the aisle when we have an important issue like this & we turn it into sound bites. and, mr. president -- mr. president, i hope that again over the next several days this bill has been through so many et reagan administrations. everybody understands what's in it that's worked on it. everybody understands what the points are that we disagree on. as a matter of fact, if we don't end up -- if we don't end up with a bipartisan bill, it's not going to be over philosophical issues. it's going to be over the fact that the two sides just decided they didn't want to do it. it's going to be over the fact that the -- it takes both sides.
the fact is that the white house can make an issue out of it. i know that things aren't going particularly well in the polling areas. i know that my friend from north dakota, talk about polling data and testing things and all that dish realize that things aren't going particularly well. maybe this financial reform bill can be something that changes that. maybe if you push the bill as far to the left as you can and you dare republicans to vote against it, maybe that's a good thing. that's not what i came here to do. i don't think that's what the senator from virginia came here to do. i know if republicans, you know, ran this bill as prolonging too big to fail -- that's what we're doing -- then we mitt be able to keep the bill from passing that way, too. i hope that -- i hope that all of us will sit down and do what we came here to do, and that is to -- that is to create good
policy for the american people. i'm very distressed, very distressed, about where we are today. what i hope is happening is that this is just a bunch of buzz and that our committee staffs and the chairman and rank member are actually sitting down having serious discussions and that very soon we're going to come forth with a bill that is bipartisan, where we can debate it on the edges, end up passing legislation that stands the test of time, and i hope that bill will deal with the very core issue that got us into this crisis, and we can castigate all kinds of people. there's enough blame to go around. you almost couldn't find a regulator, credit rating agency, a firm, management that wasn't in some way involved in helping this crisis be created. there's lot of blame to go around. but i hope the bill at the end of the day will also address, as
i've stotted every time i come up to the floor on this bill, a whole issue of underwrite. the fact that at the end of the day, at the bottom of this, whether you read what happened with goldman's supposedly accident happened with goldman on friday. you read all about these synthetic c.d.o.'s. where there weren't really underlining mortgageds there. they were just doing something that reflect what had certain mortgages would do. at the end of the day it still was about the fact that in this country, in this country, we wrote a bunch of mortgages that couldn't be paid back. i mean, you can talk about this all you want, but the underwriting, the bad loans that were written, at the end of the day are what created much of this crisis and candidly, i don't think this bill addresses that. i hope we will address that more fully before the bill comes to the floor. with that, mr. president, i think i've taken up my allotted
time. i thank members of this body for their patience. er i hope that we will do the work needs to be done here. as i mentioned, at this point, i don't think either side of the aisle deserves a badge of honor ukes but i hope over the next several days that will change. i hope our rhetoric will be tempered. i hope our discussions will center around those things that really matter and will noted be used to basically get people in the public off on rabbit trails or try to herd our teams together. mr. president, again, i thank you and i look forward to working with you, as we try to complete thisill. i yield the floor. mr. baucus: mr. president? the presiding officer: the senator montana. mr. baucus: i'd like to return to the nomination of dr. lael brainaired for under secretary
of treasury for international affairs. president obama nominated dr. brainard more than a year ago, in march 2009. after an extensive vetting process, the finance committee held a hearing on her nomination november of last year. the finance committee reported favorably her nomination. a bipartisan majority. that was december of last year. ththe path to her senate confirmation has been neither short nor easy. she has democrat strategied persistence and determination. these vital qualities supported her well as a nominee. and these qualities will support her well as she assumes the responsibilities as under secretary of treasury. the world economy is emerging from a deep economic recession. america must lead the way to recovery. we're, after all, looked at by
other countries to lead. we must do so by creating jobs, reducing unemployment, encourage smart, balanced growth here at home. but the health of the global economy does not rest solely on our shoal ters shoulders. the recent crisis has democrat strategied how interconnected the world s the world's many national economies have the potential to rise together and they have the potential to fall together as well. to ensure a stable, prosperous economic future, countries must work together to support balanced economic growth. no country can rely solely on on export-driven growth, such as no country can rely solely on its domestic consumption. but this economic rebalance willing not happen overnight. the global economic overturn has been powerful because of its
strength, its resilience, its breadth. we must be just as determined in our efforts to overcome the effect of this crisis. as under secretary of treasury for international affairs, dr. brainard will lead our bipartisan and multilateral efforts on these issues. she'll work with comien and the european union and she must help to guide our country from an economic recovery to economic growth. dr. brainard has demonstrated that she has the knowledge. she has the skills and she has the abilities to confront the tasks that lie ahead. she is brilliant. she is har hard- hard-working. and she has revealed that she has the persistence and determination to address the vital issues facing america in the global economy today. i might add, mr. president, i've
worked with dr. brainard during the clinton administration. a very key question is what will the united states' economic relationship by with china. the united states had annual extension of m.f.n. for china. they have contentious, caused more problems than they sovmentd i spent some time with the president, with others in the clinton white house, and then later worked with dr. brainard as we moved away from these annual extensions of m.f.n. and pntr with china. it was a hallmark change in u.su.s.-american economic relations. i think it's worked out very, very well for our country's best interests. i must say it has also helped china. we pursued that objective because at that meant china could then be a member of the w.t.o. once they became a member of the w.t.o., the world trade organization that would help
china live up to world standards that other countries were living up to in the w.t.o. again, dr. brainard throughout this confirmation process has shown her dedication to serving the treasury department, the president and the american people. i'm confident, and i'm confident because she has deep experience, that she's very talented, she's very good. i'm confident she is up to the task for which she has been nominated, and i urge the senate to approve the nomination. mr. president, i now ask consent that the assistant majority leader, the senator from illinois, be recognized to speak on whatever topic he chooses. the presiding officer: the senator from illinois. mr. durbin: mr. president, i know that several of my colleagues -- the presiding officer: without objection. mr. durbin: i'd ask consent to speak for ten minutes. the presiding officer: without objection. mr. durbin: thank you very much. i thank the chairman of the finance committee. mr. president, this is the executive calendar. it contains the names of the
nominations that the president of the united states sent to the senate for confirmation. it's an orderly process, an historic process. it's happened thousands and thousands and thousands of times. very few times do we have a lot of controversy associated with these names. and if there is a controversy, ultimately there's a vote. a debate and then a vote. but now there is a new approach being used by the minority side, and that approach is to basically use one of three options: stall, stop, and kill. what they're trying to do for the 104 nominations sent by president obama is to hold them on the calendar as long as possible so that it's difficult for him to organize his administration and move forward. there are some key positions, one that the senator from montana just spoke of is a nominee for under secretary of the treasury for international affairs. we're concerned about the state of the american economy. our competition in the world, how we stack up against
countries like china. there is an allegation, which i think is valid, that the chinese are manipulating their curbs is i so that they continue -- currency so they continue to take jobs away from the united states, gives them too big of a competitive advantage. here is the under secretary for international affairs who would be tasked with looking into that issue to try to help american businesses small and large and to save american jobs and this nomination sits on the calendar. what you find with those 104 nominations is most of them went through the committees on the way to the senate floor with unanimous votes. there's no controversy associated with it. a senator: mr. president, would the senator yield for a question? mr. durbin: i would be happy to yield. mr. dorgan: i wonder if the senator from illinois knows who has a hold on that nomination? mr. durbin: i don't know. mr. dorgan: the reason i ask the question is these holds are in some cases anonymous. i spoke earlier today about a hold on a nomination, a promotion for a, one of the
generals in the army to be a major general that has been held up for now nearly six months, seven months by senator vitter. i used his name because i told him i was going to. because he's demanding of this general something the general can't do. that's an example. we happen to know where that hold is from. but of these other 100-plus nominations, they sit here day after day, month after month. and someone has put a hold on them for some reason. i might mention one other, the woman who is to head the g.s.a., that was vacant for nearly a year. and then because of a hold of one senator, and when we finally got around to voting for her, it was 94-0. even the senator who held up up for nearly a year voted for her. that is the game being played and it is unfair. mr. durbin: i agree with the senator from north dakota. i would say to the senators who have hold on nominees, come to the floor and explain to the american people why you think these people should not be serving in our government. if you think there's something wrong with them, if you think
they're unqualified or there's some issue involving their character, integrity, don't you owe it to these nominees to step forward and say so? i've held nominees in the past but was open and public about it, for a specific purpose. recently under the bush administration, i was looking for a report under the department of justice, the hold was lifted as quickly as it was sent. those things, i understand. but to hold these people up indefinitely in secret holds and never state the reason why is fundamentally unfair. it is unfair to the nominee who is going through this process of f.b.i. checks, background checks, questions about their personal lives most americans would not want to face. they get through the nomination process, the president sends their name and now they're held up on the calendar indefinitely. 104 different people. now i think we owe it to them, we owe it to the president and the country to do this in an
orderly way. during this week the senators are going to come to the floor and ask to move these nominees forward. i hope those on the other side who have the courage to hold them will have the courage to stand up here and explain why. that, i think is critical. there is another issue involving a hold which goes to a much larger issue. we have a bill before us soon reported from the banking committee that is long overdue. this bill is wall street reform. our country has been through one of the toughest economic downturns in modern memory. for 80 years we've never seen anything like what we're going through now. some 8 million to 14 million americans lost their jobs. $17 trillion in value was taken out of the economy. and virtually every one of us with a savings account or retirement account knows what that meant. we lost value in our nest eggs, the money we put away for our future. we know businesses failed and a lot of people lost in that process, losing their jobs,
health insurance. investors lost when the stock market went down to 6500 on the dow jones industrial average. it is now back up. but with all of that downturn in the economy, people stood back and said what happened? what did we do wrong? well, mistakes were made. many mistakes were made in washington. i will concede that point. but a lot of mistakes were made on wall street and with the biggest financial institutions. and the worst part of it was when these financial institutions were about to take a dive and go down, who do they turn to? the american treasury, the taxpayers of this country. and they said under the bush administration, we need a bailout. $700 billion in taxpayers' money to wall street to overcome the mistakes that we made and keep our banks afloat and insurance companies in some cases because of the big problems that we have, problems many times of their own creation. and they received the money. many of us had a stark choice.
we were told by the secretary of the treasury and chairman of the federal reserve, if you don't send this money to wall street and these banks and insurance companies go down, the economy will follow them. so we voted for this bailout money, and i didn't want to do it but i thought it was the responsible thing to do. it turns out that some of these banks and other institutions are paying back the money with interest, and the taxpayers are okay. but by and large a lot of others are not. and we have to ask ourselves: do we want to run through this script again? do we want to see this movie all over again, happen next year or the year after? and the obvious answer is no. so the banking committee sat down and said let's rewrite the rules. if they're going to act like a bank and be protected like a bank, they should have the oversight of a bank. if they want to loan money on a bad loan and they don't have a reserve, don't ask the taxpayers to stand up and make up the difference. that's part of what we're doing with this financial reform bill.
to try to create the rules and oversight from organizations and agencies in washington to make sure that the taxpayers don't end up footing the bill again. secondly, this whole world of derivatives, which i thought was explained very ably by the secretary of the treasury over the weekend, is basically either an insurance policy that someone buys to make sure if they're entering into a contract on a premise that they're going to make some money and they don't make money, they're protected. or it's a basic bet, where they're basically betting on something that's going to occur even if they don't have a personal interest in it. these derivatives got out of hand, so out of hand that there was a lot of gaming that went on. we tried to clean this up. i of course am partial to the chicago model where on the board of trade and america till exchange we've had trance panty for -- transparency for decades. i think that's the answer. let's put this in front of the public so they know what's going on. stop the back room deals on wall
street. the third thing is to create a consumer protection agency so average consumers across america have a fighting chance when banks and credit card companies dream up new ways to fleece us. and it happens with regularity. we know it does. so this agency would be there to make sure that these financial institutions are honest with consumers. you know, we do have agencies of government that make sure that toasters that you buy don't explode in your kitchen. you expect as much, don't you? some agency is going to make sure that product is safe. what about your mortgage? shouldn't you have the same peace of mind when you walk out of closing, you haven't fall into some trick or trap that is going to catch you later on. the banking committee had a regulatory reform bill. senator dodd of connecticut went to senator shelby of alabama and said let's make it bipartisan. he worked with senator shelby for several months and ultimately senator shelby said we cannot reach agreement. then he sat down -- senator dodd
did -- with senator corker of tennessee, who just spoke. senator corker is a man i respect very much, and they tried to work together. they spent about a month at it. led to nothing. so senator dodd said let's move it to committee, let's have the amendment process. let's find out what this bill is going to look like. let's have a debate. brought it to the banking committee with over 400 amendments pending and the republicans decided at the committee they would not offer one amendment to the bill. instead the republican ranking member said just vote it in or out. they voted, partisan roll call, democrats voted it out. it's now on the floor and will be up next in consideration. now the republican minority leader, senator mcconnell of kentucky, comes to the floor last week and says we're going to oppose the bill because it's another taxpayer bailout. he fails to mention that what has been built into the bill with republican input is not a taxpayer bailout at all.
it says to the banks who would be protected, you've got to create your own liquidation fund so if you get in trouble, the taxpayers don't end up holding the bag. this has to be bankers' money, not taxpayers' money. so if there's any bailout, it's a bailout of, by, and for bankers for their institutions. so the taxpayers don't end up holding the bag again. so senator mcconnell's characterization of what this bill does is not accurate. it charges up people. you hear about another bailout as you would expect. but it doesn't tell the story. then comes the decision by the republicans -- 41 of them -- to sign a letter to say that they oppose this bill. they didn't participate in creating it. they oppose it. and one of the republican senators said that means we're going to vote against your even bringing it up. we're going to start a filibuster against this bill to try to stop it. well, i would ask my republican colleagues, all 41 of them, to pause and reflect for a moment.
when senator mcconnell was selling to his republican caucus tickets on this pleasure cruise to end financial reform, to end this reform of wall street, there were pretty calm seas. but last friday something happened that changed the picture. the securities and exchange commission filed a civil action against goldman sachs and said that they had been engaged in conduct which was literally reprehensible. they were basically misleading the people who were investing in their investment products and steering the business for an outcome. it really was the worst, at least the allegations in the complaint, are the worst in corporate greed at the wall street level. i would urge my colleagues on the republican side to think twice about the letter you sign that said you don't want to be part of a reform effort. most of america is fed up with what's going on on wall street. and this latest action by the s.e.c. is clear evidence of the problems.
those who signed the letter for this pleasure cruise trip have come on to some rough seas now with this s.e.c. action. i would think if they look closely at that ticket that they have for this pleasure cruise with wall street, would find they're on the s.s. titanic. they're about to hit an iceberg because the american people are fed up with what's happened on wall street. taking taxpayers' money for a bailout, using the money for bonuses for c.e.o.'s who made these boneheaded mistakes, taking it out on investors and savers across america and then saying to congress, whatever you do, our friends in congress, don't let them change the laws and make it more difficult. the american people want us to have laws that will protect them in their investments, in their savings, that will guarantee transparency. they don't want us to continue down this path where we're allowing the financial institutions on wall street to engage in practices that are ultimately going to harm the economy. we don't want to see a rerun of this recession. we need to move to this financial regulatory reform bill
after we consider nominations. and i hope, i just hope a few of the republican senators who are genuinely committed to reform will not get on a pleasure cruise with wall street. we'd rather have them roll up their sleeves and join us, go to work to bring real reform. mr. president, i yield the floor. mr. nelson: will the senator yield for a question? mr. durbin: i will be happy to yield. mr. nelson: would the senator yield that the latest iteration of objection by the other side to this wall street reform effort is what i heard this morning, that they now say that this legislation should not be rushed through the senate. my question to the distinguished assistant majority leader is how many months have we been working and working in a bipartisan fashion on this legislation? mr. durbin: well, i can say to my knowledge six, eight months, maybe longer that this has been
in the process. it passed over in the house of representatives, came over here, and i know it's been under active consideration. we did have health care reform going, but i know that senator dodd and the banking committee at least for the last several months have been working with the republicans, trying to engage them in this process. so to say that this is being sprung on them without notice, i don't think that's accurate. mr. nelson: does it seem to the senator, mr. president, if i may continue a question, does it seem to the senator that there is something early symmetrical here in the way that there is always the cry that it's being rushed through the senate chamber? did we hear echoes of that over the course of the last year with regard to health care legislation? mr. durbin: in response to the chair, the senator from florida, after the senate on the "help" committee adopted 150 republican amendments to the health care bill, every single republican on the committee voted against it. and you know what happened the same, of course, in the senate finance committee.
and then the complaints were made that after 14 months of active consideration of this measure, we were somehow rushing it through. it's the same story. it's the same script being played over and over again. as i said, i don't know if the senator from florida was on the floor. the basic policy on the other side of the aisle is stall, stop and kill. and this approach, saying no to everything, refusing to engage in even writing a bill, is not serving our nation. there are things we need to do, and this is one of them. mr. nelson: mr. president, i ask consent to speak up to 15 minutes. the presiding officer: without objection. mr. nelson: and, mr. president, i want to speak on this legislation as well. this legislation that we're finding is strongly opposed by the wall street banks which have fared so very well at taxpayers' expense and now do not want any kind of legislation that will
recall -- that will call them to have any kind of transparency and checks and balances on what has been an intolerable situation. if this motion to proceed to the financial reform bill fails, obviously it's going to be the american taxpayer that is going to suffer. when we get around to considering the motion to proceed, if it is denied, it is a vote in favor of keeping the status quo. it's a vote in favor of of $700 billion bailouts, reckless financial risk taking and all the other problems that come with our current financial regulatory system. is anybody satisfied with what we have been through over the
past couple of years? i don't think a vast majority of the american people are satisfied. to the contrary, i think they are outraged on what they have seen on wall street, and thus the need for wall street regulatory reform. mr. president, last week i had spoken on the need to reform compensation practices on wall street. i have put forth a specific proposal that will tie future tax deductions for huge executive compensation at big financial institutions to the adoption of responsible performance-oriented compensation standards, and what i had suggested are standards that have been developed already by the federal reserve system
and the financial stability board, which is the council of major central banks. some financial institutions have already begun to implement these standards, but we need them to apply to all those major financial institutions. it only takes one reckless and irresponsible institution to wreak the havoc on our financial system. so by requiring the very largest banks to tie the pay of their highest paid executives to the long-term performance of that financial institution, that's sound, responsible reform that we should be able to agree on. and remember, it's already been adopted by the federal reserve board and the financial stability board, which is the
council of major central banks. but today i want to address another important aspect of financial reform that's related to this complicated thing called derivatives regulation and energy speculation. let's take derivatives. it's arcane, it's abstract. it's something that folks don't understand. it's very difficult to understand. in essence, some of the examples i'm going to give are you can think of it as an insurance policy, a derivative. it's a derivation of normal financial instruments, and some derivatives provide companies with legitimate backup
insurance. it's a way to hedge against the risk in the marketplace, but the market for derivatives has gotten out of control. many of those derivatives today are simply bets. basically, gambling bets between banks that do little, if anything, to benefit the nation's economy. they help create financially speculative bubbles that increase prices, whether it's the prices at the gas purpose or in the checkout line at the supermarket, but also the experience that we have had that increase the prices in our
housing market. in the area of derivatives regulation, the banking committee bill creates some commonsense safeguards to improve accountability and transparency. over the last two decades, much of the activity on wall street has moved away from traditional investment banking and asset management and into this speculation on derivatives trading. for example, in the ten-year period between 1998 and 2008, the value of derivatives, outstanding derivatives, grew from less than $100 trillion to nearly $600 trillion. now, they can play an important function in managing risk,
whether it's an interest rate, foreign exchange or energy price risk. but when you allow investors to leverage all of their investment , derivatives allow speculators to take on much more risk with much less capital, because the trading of derivatives is largely conducted in unregulated over-the-counter markets, this reckless speculative position is taken by companies such as a.i.g. and others nearly brought down the financial system. and because derivatives are used to speculate on all types of goods, not just securities, they can have significant consequences in other parts of
the economy. in early 2008, we saw the price of oil hit stratospheric heights, largely because of excessive speculation in oil and energy derivatives. there are a number of us here in the senate who have worked to close the so-called enron loophole and clarify that energy derivatives should be traded on a regulated exchange and treated just like other commodities derivatives, and the financial reform bill that comes to the floor addresses problems in derivatives in the marketplace by requiring that derivatives be traded through clearing houses and public exchanges. it authorizes the commodities futures trading commission to establish speculative position
limits on the amount of exposure that any one investor can take. for example, if you're going to be buying and selling these things on the exchanges, that the person buying it instead of turning right around and trading it, they are going to have to buy and keep and hold a certain percentage of the acquisition. well, these are important first steps, but the bill coming here from the committee should do more to protect the taxpayers, and it should do more to stop the excessive speculation that can drive up prices and take, for example, gas prices. and i'm going to be offering an amendment to do just that. it's going to require that regulators set hard caps on the
positions taken by energy traders. in other words, there would be only a certain amount that they could buy of all that particular speculative product. it would eliminate -- my amendment would eliminate the loopholes in the bill that's coming to the floor that would allow these unwarranted exemptions from those limits, and the amendment would require that these limits be put in place by a date later this year. i'm concerned that the committee bill coming retains current rules in the bankruptcy code that gives the so-called counter parties in derivative contracts special preferred treatment when
a firm becomes insolvent. this special treatment ensures that wall street banks and other large traders are put at the front of the line over an insolvent firm's customers. i want to give you an example there. it was most apparent in late 2008 when billions of taxpayer dollars were given to a.i.g. which was deemed too large to fail, and then those taxpayer dollars in the bailout through the tarp funds actually flowed through two counter parties which were people that had bought these derivatives like insurance policies, and they paid them off. goldman sachs received
received $13 billion from the taxpayers through the federal bailout of a.i.g. do you think that goes over well on the american main street when they see wall street saving -- having the federal government saving a firm like a.i.g. and then it turns around and pays off on those speculative derivatives, in this case to goldman sachs for $13 billion? that doesn't go over very well, and it's not fair. well, we just simply need to eliminate the special treatment that wall street banks and other financial firms that hold large derivative positions, we need to eliminate that special position that they receive in bankruptcy and liquidation process. and i'm going to offer an
amendment to clarify that those derivative counter parties like that insurance policy that i just gave the example that a.i.g. paid off goldman sachs, that those kinds of speculative ventures are never again going to jump to the front of the line in the bankruptcy process ahead of whom? ahead of taxpayers, creditors. mr. president, it's time for us to move ahead with financial reform. and so when we get around to just whether or not we're going to take up this bill, a vote against the motion to proceed to get to the bill is a vote against reform. it's a vote in favor of continued bailout bailouts.
the banking committee is a strong committee bill. and i hope out here on the floor with amendments we're going to make it even stronger. i hope our colleagues will join us in this effort. mr. president, i yield the floor, and i suggest the absence of a quorum. the presiding offir: t clerk will call the roll. quorum call:
mrs. feinstein: i'd ask the quorum call be vitiated. the presiding officer: without objection. mrs. feinstein: thank you very much, mr. president. i trust it's appropriate to speak on a nominee at this time? the presiding officer: a nomination is pending. mrs. feinstein: thank you very much. mr. president, i come to the floor to support the nomination of dr. lael brainard to be the next under secretary of treasury for international affairs. and before i proceed, let me say that i have known lael brainard for some time. we've participated together in a strategy group held by the aspen institute i think for more than a decade now, and i found her there to be very incisive and bright. additionally, in the course of her work at the brookings institution's global economy and development program, she has worked with my husband over a period of some six years now,
and so he has gotten to know her well as well. on march 23, 2009, president obama nominated dr. brainard to be the under secretary of the treasury for international affairs. now, this is an especially important position in the executive branch and never more so than during this very critical time for the domestic and global economies. her nomination has, in fact, languished for more than a year, another casualty of obstructionist behavior i believe from our colleagues across the aisle. the under secretary position for which dr. brainard has been nominated focuses on three primary objectives. first, fostering u.s. economic prosperity by pursuing international policies and programs that help strengthen and grow our very own economy,
to create job opportunities for americans and to keep global markets open for american exports. secondly, ensuring united states economic stability by promoting the american economy and working to prevent and mitigate financial instability abroad. and, thirdly, strengthening united states economic security by supporting the administration's foreign engagement through the multilateral development banks to manage global challenges. the treasury department needs a qualified person like dr. brainard in this vital leadership position, especially at a time when the department is continuing its efforts to ensure economic growth, engage china on economic issues, and advance our global recovery agenda following the financial crisis. as a matter of fact, the secretary of treasury himself
has called about this position simply to say how important it is that she get confirmed at this time. i had the privilege to talk to senator kyl about it yesterday by phone and i am hopeful that this confirmation will take place this evening without further delay. let me speak for a few moments on her track record of service. i see her as a devoted public servant, someone who has spent most of her career serving our people. she's held several senior positions in the administration and in the nonprofit and academic sector, including deputy national economic advisor for president clinton, vice president and founding director of the brookings institution global me and development program. this is where my husband has worked with her for the six
years i mentioned. and associate professor for applied economics at m.i.t.'s sloan school. she has also served as a white house fellow and a national science foundation fellow, among numerous other professional achievements. in short, she is eminently qualified for this senior administration position for which she has been nominated. now, despite these excellent qualifications and her impressive resume, her nomination has languished in the senate for more than a year. it is time to get it done this afternoon. she was nominated by president obama on march 23 of last year. she was favorably reported by our colleagues in the senate finance committee in december of last year. however, a hold was placed on
her nomination as well as that of two other senior treasury nominees. now, many questions have been raised about her personal income tax returns, business partnerships, the hiring of household employees, all of which are done jointly with her husband, kurt campbell. mr. campbell, whom i've also known because he has participated in this same aspen strategy group for more than a decade, mr. campbell is currently the assistant secretary of state for east asian and pacific affairs, a position to which he was unanimously confirmed on june 25, 2009. so the same questions were asked of him as were asked of lael brainard. she has responded to questions in multiple rounds for majority and minority staff. she has answered every question
asked of her and provided hundreds of pages of submissions in a forthcoming, honest and direct manner. now, clearly at some point there were some differences of opinion for some members, but that has been settled to the best of my knowledge. paperwork has been submitted about taxes, about hiring of household employees. and during this time, neither the foreign relations committee nor any member of the full senate has raised any concern regarding this information. so as the united states is entering a particularly intense period of international engagements this spring and summer, i believe dr. brainard's confirmation is essential to ensuring effective united states policy coordination and implementation.
i want to point out that she has broad bipartisan support as well as the support of a multitude of nongovernmental organizations and businesses. she is supported by the united states chamber of commerce, the business roundtable, united states counsel on international business, the business counsel for international understanding, the counsel of the americas, the coalition of service industries, the american -- excuse me, the emergency committee for american trade, the national foreign trade council, and the national association of manufacturers n. my opinio -- of manufacturers. in my opinion, she is a woman of strong common sense, of integrity, of credibility and of sound judgment. she is exceptionally well qualified and i urge my colleagues to approve her nomination without further del delay. thank you very much, mr. president. i yield the floor and i note the