DPC | October 1, 2007

Senate Oversight Highlights Week of September 17, 2007

“It is the proper duty of a representative body to look diligently into every affair of government and to talk much about what it sees. It is meant to be the eyes and the voice, and to embody the wisdom and will of its constituents…” — Woodrow Wilson

 

Congress has the Constitutional responsibility to perform oversight of the Executive Branch and matters of public interest. This report summarizes highlights from each week’s Senate oversight hearings. 

 

Tuesday, September 18, 2007: Senate Committee on Finance

“Breaking the Methamphetamine Supply Chain: Meeting Challenges at the Border”

• Senators and witnesses explained that methamphetamine addiction and importation are still severe problems despite the success of recent legislation in addressing domestic methamphetamine production. 
   
• Witnesses discussed how the Combat Methamphetamine Epidemic Act can be improved.
   
• Witnesses testified that combating methamphetamine requires the cooperation of local, state, and federal authorities and international cooperation.

 

Tuesday, September 18: Senate Judiciary Committee

“Examining Approaches to Corporate Fraud Prosecutions and the Attorney-Client Privilege under the McNulty Memorandum”

• Senators stated that the McNulty Memorandum is a step in the right direction, but it has not yet been determined whether the Memorandum balances aggressive prosecution of corporate fraud and the attorney-client privilege.
   
• Witnesses opposed to the Memorandum argued that the Memorandum and any policy allowing for waiver of the attorney-client privilege are inherently flawed.
   
• Proponents of the McNulty Memorandum argued that the Memorandum will be effective in preventing overreaching by the Department of Justice and that S. 186 should not be passed. 

Wednesday, September 19, 2007: Senate Environment and Public Works Committee

“Meeting America’s Water Infrastructure Needs in the 21st Century.”

• Senator Lautenberg spoke about the need to invest in water infrastructure and the environmental necessity of those investments. 
   
• Witnesses answered questions about the President’s nearly $400 million proposed cut to the State Revolving Fund. 
   
• Municipal water infrastructure leaders testified about the need for the federal government to meet its clean water responsibilities. 

 

Wednesday, September 19, 2007: Senate Judiciary Committee, Subcommittee on Human Rights and the Law

“The ‘Material Support’Bar: Denying Refuge to the Persecuted?”

• Witnesses testified that the provision that prevents the government from granting asylum to persons who have given “material support” to a terrorist organization was defined too broadly. 
   
• Witnesses recounted how many refugees are denied asylum on the basis of support they gave to a terrorist group under threat of being killed or seriously injured. 
   
• Witnesses testified that the Administration should process more quickly the applications of Iraqi refugees, many of whom risked their lives to help the United States in the war. 

Thursday, September 20, 2007: Senate Environment and Public Works Committee

“Oversight Hearing to Examine the Condition of Our Nation’s Bridges”

• Senator Boxer spoke about the need to invest in America’s bridges and maintain their safety. 
   
• Transportation Secretary Peters testified about the Department’s funding estimates and priorities needed for bridge infrastructure investments.
   
• Witnesses testified on the urgent need to address the solvency of the Highway Trust Fund. 

Thursday, September 20: Senate Finance Committee
“Bank Treatment of Social Security Benefits”

·Witnesses testified that despite federal laws protecting Social Security from garnishment, state laws permit banks to place a “freeze” on accounts holding Social Security and other federal benefits.

·Witnesses explained that this practice can cause great hardship for Social Security beneficiaries.

·Witnesses agreed that the problem could be solved if the beneficiary agencies issued a uniform, national interpretation confirming that there is a bar against freezing accounts that contain federal benefits that are exempt from garnishment. 

Thursday, September 20, 2007: Senate Small Business and Entrepreneurship Committee

“Expanding Opportunities for Women Entrepreneurs: The Future of Women’s Small Business Programs”

• Democratic Senators stated their commitment to ensuring that women entrepreneurs have an equal opportunity to do business with the federal government. 
   
• Witnesses testified that unclear guidelines combined with poor communication and coordination within the SBA led to delays in distributing funds to Women’s Business Centers. 
   
• Witnesses explained that fair and efficient running of both the Women’s Procurement Program and the Women’s Business Center grant program is essential to the success of women entrepreneurs across the country.

 

Friday, September 21, 2007: Senate Democratic Policy Committee

“Abuses in Private Security Contracting In Iraq: Ensuring Accountability, Protecting Whistleblowers”

• Witnesses explained that private military firms in Iraq, like Blackwater U.S.A., are subject to little or no oversight or accountability for their actions.
   
• Witnesses detailed the retaliation they suffered for blowing the whistle on waste, fraud, and abuse.
   
• Witnesses testified that the Bush Administration has not supported whistleblowers’ False Claims Act lawsuits to recover taxpayer money from conractors who committed waste and fraud in Iraq.

SEN. BAUCUS: It is one year after the enactment of the Combat Methamphetamine Epidemic Act. And there is evidence that we are making progress. The Combat Meth Act imposed limits on the sale of medicines containing ephedrine and pseudophedrine. Those are the most common chemicals that can be converted into meth. And the Act required that purchasers provide identification and sign a sales log. Starting last year, retail sellers have been required to keep these products behind the counter or in a locked case. And retailers have had to register online. And partly as a result, last year, meth lab seizures declined 42 percent nationwide. The Combat Meth Act is disrupting supply. I am proud to have co-sponsored the law. But we must do more. Meth is still the number one law enforcement problem. The National Association of Counties found that meth is the number one illegal drug problem for 47 percent of the counties in the country. Twenty-one percent said cocaine. Twenty-two percent said marijuana. More counties cited meth than cocaine and marijuana combined. 

PETER D. WOLFGRAM, PRESIDENT AND CHIEF EXECUTIVE OFFICER, BUNGALOW DRUG, INC.: We believe that the Combat Meth Act is helping significantly to reduce domestic methamphetamine production, that is, the numerous “mom-and-pop”methamphetamine labs that had become the scourge of rural America. Across the U.S., the DEA [Drug Enforcement Agency] recorded 17,170 meth lab incidents in 2004. By 2006, this number has dropped 57 percent to 7,347. Now that domestic methamphetamine production is being addressed, we support congressional efforts to focus more keenly on eradicating methamphetamine addiction and importation. With the recent, steep decline in domestic methamphetamine production and availability, foreign methamphetamine sources are filling the void. Despite the success of the Combat Meth Act in working to eliminate the methamphetamine lab problem, far too many people remain locked in deadly methamphetamine addiction. 

Witnesses discussed ways that the Combat Methamphetamine Epidemic Act can be improved.

JOSEPH T. RANNAZZISI, DEPUTY ASSISTANT ADMINISTRARTOR, OFFICE OF DIVERSION CONTROL, DRUG ENFORCEMENT ADMINISTRATION, UNITED STATES DEPARTMENT OF JUSTICE: Despite successes resulting from the passage of the CMEA [Combat Methamphetamine Epidemic Act] and related state-level legislation, some issues have arisen as a result of CMEA requirements. Though law enforcement can view the required logbooks, paper logbooks are difficult to effectively review and analyze. Electronic logbooks, though not required under CMEA, are easier to review but generally there is no connectivity between them with nay given state, and certainly not on an inter-state basis. Due to this lack of connectivity, law enforcement has reported several cases of “smurfing.” (“Smurfing” is defined as an individual or group of individuals traveling to multiple stores and purchasing quantities of pseudophedrine or ephedrine products at or under the legal limit per store.) Since there is no requirement for retail sellers of these products to have interconnectivity with their logbooks, individuals can circumvent the maximum sales limit under CMEA. Some states are attempting to establish connectivity between stores; however, these efforts are generally limited to only intra-state connectivity. Furthermore, even though there are several trial logbook interconnectivity programs being tested by different store chains, there is currently a lack of compatibility among these systems. Any future expansion of such monitoring programs will require an established standard format or program in order to effectively monitor the data on an intra or even inter-state basis. 

Witnesses testified that combating methamphetamine requires the cooperation of local, state, and federal authorities.

GARY W. KENDALL, DIRECTOR, STATE OF IOWA GOVERNOR’S OFFICE OF DRUG CONTROL POLICY: Iowa is an excellent example of exactly how vital federal funding is to the state and local drug enforcement efforts. A large percentage of the federal justice funding that is received by Iowa goes to support the multi-jurisdictional drug task force program in the State…. It is estimated that approximately 74 percent of cases opened by the Iowa Department of Public Safety Division of Narcotics Enforcement originated as investigations of a multi-jurisdictional task force. It is also a fact that the majority of cases opened by the Iowa Department of Public Safety Division of Narcotics Enforcement are adopted by a federal agency and prosecuted in federal court. My purpose in discussing this is to illustrate the integral role that each level of enforcement has on the overall drug enforcement effort in the United States. Federal drug enforcement would not be nearly as successful without the involvement and assistance of the state and local drug enforcement agents and vice versa. Similarly, while border-focused drug enforcement efforts are obviously important, drug enforcement efforts in the State of Iowa and every other state in the country are vital to the overall success of drug enforcement on the national level.

 

Witnesses testified that combating methamphetamine requires international cooperation.

CHRISTY A. MCCAMBELL, DEPUTY ASSISTANT SECRETARY, BUREAU FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, UNITED STATES DEPARTMENT OF STATE: Methamphetamine and similar synthetic drugs offer enormous profit margins, are relatively easy and inexpensive to produce, and can be manufactured virtually anywhere. Combating their spread requires broad, sustained international commitment, and U.S. leadership is essential in this regard…. In order to address international methamphetamine production and trafficking, the Department of State continues to play a role in executing the Administration’s Drug Control Strategy. We focus on two key areas: (1) securing greater international control and transparency in the production, sale, and transportation of methamphetamine’s precursor chemicals and the pharmaceutical preparations containing them; and (2) significantly expanding our support and cooperation with the Government of Mexico on precursor control and other methamphetamine specific initiatives. 

MATTHEW C. ALLEN, DEPUTY ASSISTANT DIRECTOR, FINANCIAL, NARCOTICS & PUBLIC SAFETY, UNITED STATES IMMIGRATION AND CUSTOMS ENFORECEMNET, DEPARTMENT OF HOMELAND SECURITY: ICE [Immigration and Customs Enforcement] has undertaken several bilateral and multilateral initiatives with our foreign counterparts to combat the smuggling of methamphetamine and precursor chemicals, as well as to track and seize the proceeds that are derived from this illicit trade. To target the illicit gains of those organizations that illegally import and distribute drugs and other unlawful items, ICE in conjunction with CBP [California Boarder Patrol] and officials in Mexico, Ecuador, Panama, and Columbia, implemented a joint strategic Bulk Cash Smuggling initiative, Operation Firewall. This operation targets illicit cash that has been successfully smuggled from the United States into Mexico and is often destined for Columbia and other Central or South American countries…. To address the threat of trade-based money laundering schemes, ICE has established Trade Transparency Units in Argentina, Brazil, Paraguay, and Columbia. ICE is also currently working to establish a Trade Transparency Unit in Mexico. These investigative units facilitate the exchange of intelligence and trade information and use that information to identify and dismantle trade-based money laundering organizations…. On August 13, 2007, ICE Assistant Secretary Myers and CBP Commissioner Basham signed a bilateral strategic plan with Mexico’s Administration General of Customs that will further enhance cooperation between our two countries. The agreement calls for the creation of four separate bilateral working groups that will increase the cooperation between DHS [Department of Homeland Security] agencies and our Mexican counterparts. 

Senators stated that the McNulty Memorandum is a step in the right direction, but it is yet undetermined whether the Memorandum balances aggressive prosecution of corporate fraud and the attorney-client privilege.

SEN. LEAHY: This memo added new safeguards and restrictions, including some that had been called for at this Committee’s hearing, on prosecutors’ ability to request the waiver of the attorney-client privilege. I said at the time that it was a step in the right direction. With this hearing we continue our consideration whether or not the Department has, in fact, found and is implementing the proper balance. The McNulty Memorandum has been in place for less than a year. We need to get a sense of whether and how it is working. We are evaluating whether the McNulty Memorandum and the Department’s implementation of it has reached the right balance between aggressive enforcement of corporate fraud statute and proper respect for the attorney-client privilege. I look to today’s witnesses for help in that analysis…. We must be careful not to overreact to the Department’s overreaching. This Administration has sought to immunize too much misconduct. Corporate misconduct should not be given a safe haven or immunized from accountability. Nor should the corporate bar, and its representatives in the American Bar Association, be allowed to use the legitimate concerns of overreaching we have identified to create favored status for corporate fraud defendants. 

Witnesses opposed to the Memorandum argued that the Memorandum and any policy allowing for waiver of the attorney-client privilege are inherently flawed. 

DICK THORNBURGH, COUNSEL, KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP: Let me state at the outset, that in my view, the McNulty Memorandum is so inherently problematic that there is nothing to be gained by continuing to wait and see how it is implemented. To the contrary, Congress should enact legislation such as S. 186 promptly to restore the attorney-client privilege, the work product doctrine and the Constitutional rights of individuals to their proper places in our system of justice…. No matter what its procedural requirements or how reasonably the Justice Department may promise to implement it, a waiver policy poses overwhelming temptations to target organizations, often desperate to save their very existence. Prosecutors do not need to issue express requests for privileged documents to receive them. The same insidious result arises from policies that offer credit to organizations if they take adverse actions against employees that prosecutors deem culpable…. S. 186 would forbid government lawyers from seeking waivers of privilege or work product and from coercing organizations to take specified adverse actions against their employees. Importantly, S. 186 would also forbid government lawyers from “condition[ing] treatment” of an organization on whether the organization waived the privilege or penalized its employees, and from otherwise “us[ing such actions] as a factor in determining whether [the] organization … is cooperating with the Government.” S. 186 thus address the fundamental flaw in the McNulty Memorandum. 

ANDREW WEISSMAN, PARTNER, JENNER & BLOCK: One of the main flaws in the McNulty Memorandum and the Holder Memorandum before it is that the DOJ [Department of Justice] does not require the decision to charge a corporation to be reviewed in Washington at Main Justice. Such a lack of national oversight is bewildering given the wide array of relatively minor decisions that are overseen by Main Justice and the enormity of the potential consequences of charging a corporation. This lack of oversight is unfortunate, since I know from personal experience that there is considerable expertise in the leadership of the Criminal Division and elsewhere at Main Justice in wrestling with these issues. That knowledge and guidance should be brought to bear on these difficult judgment calls regarding when and how to prosecute corporations…. The McNulty Memorandum, like the Thompson Memorandum before it, leaves completely intact the government’s ability to penalize a company that does not take punitive action against employees for asserting a constitutional right to remain silent, and reward those companies that do not take such action. Under the McNulty Memorandum companies may be deemed by the DOJ as uncooperative simply because they do not fire employees who refuse to speak with the government based on their assertion of the Fifth Amendment. By contrast, the bill introduced by Senator Specter in December 2006 and reintroduced this January would appropriately prohibit the government (not just the DOJ) from considering an employee’s assertion of the Fifth Amendment in evaluating whether to charge the individual’s employer. The Senate bill would uphold the finest traditions of the DOJ by allowing it to strike harsh blows but fair ones in combating corporate crime. The bill is a recognition that the issue raised by current DOJ policy is not about how “Big Business” behaves; it is about how the government does. 

Proponents of the McNulty Memorandum argued that the Memorandum will be effective in preventing overreaching by the Department of Justice and that S. 186 should not be passed.

MICHAEL L. SEIGEL, PROFESSOR, UNIVERSITY OF FLORIDA FREDERIC G. LEVIN COLLEGE OF LAW: I will demonstrate that, although waiver of such privilege should be sought by the government only as a last resort, sometimes waiver is the only means by which federal investigators and prosecutors can cut to the heart of the alleged criminality in an efficient and timely manner. That is why I believe that S. 186 is ill-advised. I believe, instead, that the McNulty Memorandum, perhaps with some tweaking around the edges, provides the proper balance between vigorous law enforcement and the prospect of governmental overreaching…. There is more to be gained from cooperation, however, than mere efficiency. By cooperating, those in charge of the company signal to the company’s workforce in no uncertain terms that illegal behavior is not acceptable. Cooperation lets the criminals in the organization know that, although the company may have tolerated their unscrupulous activities in the past, it will not be hospitable to such activities in the future. The company’s collaboration with law enforcement makes a statement to the outside world as well, effectively declaring that, when wrongdoing is found in its midst, the company will do the right thing by ousting those responsible and seeing to it that they are brought to justice. Certainly, a business environment in which companies consistently make clear that criminal behavior is unacceptable is in the public’s best interest. 

KARIN IMMERGUT, UNITED STATES ATTORNEY, DISTRICT OF OREGON, UNITED STATES DEPARTMENT OF JUSTICE: The McNulty Memorandum, in part, was created in response to concerns that prosecutors lacked uniform guidance on what factors to consider when deciding whether to charge a corporation. The Memorandum creates greater transparency and predictability in the investigation and prosecution arena. Furthermore, the charging analysis in the McNulty Memorandum presents no new concepts; the analysis memorializes what common sense leads a prosecutor to consider when making a charging decision and what prosecutors have been considering for decades. Indeed, the very concept of corporate liability is well founded in our legal system and is an important tool – both in the criminal and civil law contexts – in holding corporations responsible for their wrongdoing…. Threshold requirements and approvals now contained in the McNulty Memorandum prohibit federal prosecutors from requesting waivers of privilege in corporate fraud investigations absent a demonstrated legitimate need and approval by a senior Department official. The Memorandum adopts a tiered approach as to when prosecutors may request that a corporation provide protected materials. In order to address the perception that routine waivers were being sought, the new policy now makes clear that legal advice, mental impressions and conclusions and legal determinations by counsel are protected and should only be sought in rare circumstances. Any request for such materials must be in writing and “seek the least intrusive waiver necessary to conduct a complete and thorough investigation.” When prosecutors wish to seek privileged attorney-client communications – the materials generally considered to be the most sensitive of all protected materials – the United States Attorney must now obtain written approval directly from the second highest official in the Department – the Deputy Attorney General – before making the request.

Senator Lautenberg testified on the environmental benefits that come from water infrastructure investments.

SEN. LAUTENBERG: Since 1972, we have relied on the Clean Water Act to keep our waterways safe and clean. Part of the Clean Water Act helps us build new sewage treatment plants…. 

But the current funding level for the SRF [State Revolving Fund] falls far short of what we need. EPA [Environmental Protection Agency] estimates that there are between 23,000 and 75,000 sanitary sewer overflows each year. Those spills dump between three and ten billion gallons of untreated sewage into our rivers, lakes and coastal waters. In addition, Combined Sewer Overflows spill 850 billion gallons of contaminated storm water into our waterways each year. EPA estimates it will take $170 billion over the next 20 years to fix these sewer systems. But instead of making this important investment, the Administration proposed a nearly four hundred million dollar cut to the SRF for 2008…. 

Without more investment, people will get sick, beaches will close, and our marine-life will suffer. President Bush needs to fully fund the SRF, and we must reauthorize it so that money is available to cities and towns to keep their water clean. The federal government’s role in repairing our aging pipes, pumps and treatment plants must grow. 

Witnesses answered questions about the President’s nearly $400 million proposed cut to the State Revolving Fund.

SEN. LAUTENBERG: Is it possible that we can fulfill our wastewater needs for infrastructure while cutting the level of funding that much ($400 million)? 

BENJAMIN H. GRUMBLES, ASSISTANT ADMINISTRATOR FOR WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY: When the agency developed the needs survey and is working on the ongoing needs survey and when we also issued the 2002 gap report. We made it clear that the overall gap or needs are not the federal role. Some of those needs are operations and maintenance. So the answer is that we believe we can narrow that gap, over time, even close that gap, if we ensure that the State Revolving Funds are more sustainable not relying on continued or increased levels of federal seed money. That we reduce red-tape through the SRF program that we embrace water enterprise bonds. 

SEN. LAUTENBERG: Mr. Grumbles forgive me. Let’s not look back to what we thought might happen, but can we do the job we have to while we cut the funding for the State Revolving Fund in half? Do you really think that’s adequate to deal with the problems that we have now? 

ASST. ADMIN. GRUMBLES: I think we can make progress on that front. 

SEN. LAUTENBERG: That’s not making progress. The progress can be made an inch at a time and never getting to a point when we’ve done the work that we have to. 

ASST. ADMIN. GRUMBLES: Mr. Chairman I think the President’s budget request moves us in the continued direction where we will make progress. EPA’s budget request for the Clean Water SRF is a very important of the overall picture, but it’s not the only part of the picture. 

SEN. LAUTENBERG: The answer is no, thank you. Mr. Grumbles, I know you’re a very capable professional and we respect the work that you do but how we can find ways to justify reducing the funding available by half for this program. There are other things that can be done, but we are deep in trouble with contaminated, polluted water. Senator Voinovich who comes with the unique experience of having been a mayor and a governor and I have a bill to substantially add to wastewater improvement problem. We’re looking for far more funding. On the other hand I hear you justifying this cut and frankly it’s disappointing.

Municipal water infrastructure leaders testified on the need for the Federal government to meet its clean water responsibilities. 

CHRISTOPHER M. WESTHOFF, PRESIDENT, NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES: While the Clean Water Act has been hugely successful in helping us meet our clean water objectives, we must not stop and pat ourselves on the back for a job well done. Unfortunately, the job is far from finished…. 

Federal assistance simply has not kept pace with needs, declining more than 70 percent since 1980. The nation now faces a funding gap of $300 billion to $500 billion over 20 years between current levels of spending for wastewater infrastructure and total funding needs, according to the U.S. Environmental Protection Agency, the Congressional Budget Office, and WIN [Water Infrastructure Network]….

As a first step toward a long-term funding solution, however, NACWA [National Association of Clean Water Agencies] and WIN strongly recommend that the Senate introduce and pass legislation that mirrors the Water Quality Financing Act of 2007. This bill, which passed the House in an overwhelming 303-108 vote, would provide $14 billion over four years for the Clean Water State Revolving Fund (CWSRF) and would require a GAO [Government Accountability Office] study of revenue sources for a clean water trust fund…. 

The need for additional, viable revenue streams is even more important when considered in the context of the Administration’s approach for overcoming the funding gap. 

Although consensus still exists in the form of broad public support for federal action, the federal commitment to clean water investment continues to wane. This trend is inexplicable in light of the ever-increasing costs to comply with new federal requirements and enforcement actions. 

DOUGLAS H. PALMER, PRESIDENT, THE U.S. CONFERENCE OF MAYORS, MAYOR OF TRENTON, NEW JERSEY: 

In Fiscal Year 2005 alone, local government spent $82 billion to provide sewer and water services along with infrastructure, up from $45 billion in FY 1992. This translates that local government share of spending on sewer is over 95 percent and the state share is just under five percent. The local government share on spending on water supply is over 99 percent. Total spending on sewer and water from 1991-2005 was $841 billion.

The trend is for even greater spending levels. Factors contributing to the increased need for investment include: population growth and land use development; an aging water infrastructure that needs constant maintenance; changing environmental mandates; and climate change impacts that threaten water supplies from drought; reduced snow-pack; salt water intrusion on coastal aquifers; and increased storms, hurricanes and flooding that will require infrastructure hardening. 

The Conference of Mayors resolution adopted in June 2006 calls for Congress to annually approve recapitalization authorization to the CWSRF at $1.355 billion or more, and the DWSRF at $850 million or more. The resolution “…strongly urges the Congress to approve legislation to substantially increase the authorized levels for both Funds to help reverse the continuing decline of the federal share of financing these federally mandated improvements.” 

Witnesses testified that the provision that prevents the government from granting asylum to persons who have given “material support” to a terrorist organization was defined too broadly. 

SEN. DURBIN: Our nation receives more refugees than any other nation. The American people’s generosity has made the United States a symbol of freedom and liberty around the world and has given hundreds of thousands of refugees the chance for a new life. In the aftermath of the 9/11 terrorist attacks, security is an imperative. We must carefully scrutinize everyone seeking to enter our country, including refugees, to make sure that a wolf in sheep’s clothing doesn’t slip through. But at the same time, we must ensure that the golden door remains open to those who are fleeing oppression. Unfortunately, the so-called “material support bar” has prevented many victims of human rights violations and terrorism from obtaining refugee or asylum status. Under current law the government denies asylum and refugee claims to anyone who has provided what the law terms, quote, “material support to,”quote, “‘terrorist organizations.’“ These terms are defined very broadly, and the Department of Homeland Security has applied them in a manner that sweeps in conduct that no reasonable person would consider material support or terrorism.

… 

PAUL ROSENZWEIG, DEPUTY ASSISTANT SECRETARY FOR POLICY, DEPARTMENT OF HOMELAND SECURITY: Let me begin, if I may, by reiterating precisely why the material support provisions are so vital to our national security. One can define terrorism in two ways, either by listing an organization as a terrorist organization or by defining the conduct that makes an organization a terrorist one. With respect to listing, we must recall that this Congress, as well as the courts, has said that such organizations are, quote, “foreign organizations that engage in terrorist activity and are so tainted by their criminal conduct that any contribution to the organization is itself tainted.” With regard to a definition of terrorism by conduct, we must also remember that the listing process is cumbersome and slow, not nearly fast enough to keep up with the mutating terrorist groupings. Thus, while Al Qaeda is a listed terrorist organization, its many subsidiary groups, such as Al Qaeda in the Maghreb, are not. And thus, support for those organizations is only captured within the prohibition by broader conduct definitions. Thus, while I know this committee is focused on the barriers that the material support law presents to deserve refugees, it is in our judgment equally important to begin with the acknowledgement that this law provides absolutely vital protections to American national security… 

Now, all that having been said, we are well aware [sic] at the department that the material support bar has the potential to sweep too broadly and to prevent us from providing immigration benefits to those who are deserving of them and to whom the United States is and ought to be willing to provide refuge

.… 

ANWEN HUGHES, SENIOR COUNSEL, REFUGEE PROTECTION PROGRAM, HUMAN RIGHTS FIRST, NEW YORK CITY: If read literally, this definition covers everything from simple assault to ordinary warfare to what most people actually would consider to be terrorist activity. The essential elements of this definition have been on the books since 1990, but the passage of the USA Patriot Act and the Real ID Act compounded their effect. These pieces of legislation defined as a terrorist organization any group of people that engages in or has a subset that engages in terrorist activities as I just defined it. And there is no centralized government control over a decision that a group falls under that definition. 

They also provided that anyone who provides material support to a terrorist organization is held to have engaged in terrorist activity himself. Now, under the Refugee Convention, in order to be excluded from protection, a refugee must bear individual responsibility for serious wrongdoing, either because the refugee personally committed and excludable act, which would include acts of terrorism as that term is commonly understood, or because he or she contributed to the commission of such acts in a significant way and did so knowingly and voluntarily. 

What we now have under our immigration laws, unfortunately, is a situation where a person can be returned to persecution for giving support to a group without any showing that any member of the group even engaged in any wrongdoing that would justify exclusion of that person, much less of the refugee who gave to the group as a whole… DHS [Department of Homeland Security] has effectively read the material out of the term “material support,” excluding people from protection, based on minimal contributions or based on forms of assistance that bear no logical connection to terrorist activity. 

Witnesses recounted how many refugees are denied asylum on the basis of support they gave to a terrorist group under threat of being killed or seriously injured. 

BISHOP THOMAS G. WENSKI, CHAIRMAN, INTERNATIONAL POLICY COMMITTEE, UNITED STATES CONFERENCE OF CATHOLIC BISHOPS: I’ve included several examples of refugees who have been denied resettlement in the United States because of the material support bar. Their stories are horrific, but similar in at least one respect, they were forced to provide some sort of support to a terrorist organization as currently defined in law at the risk of their health or lives. In most cases they were providing this support under duress to groups who are resisting regimes our own country also opposes. Tragically, current law does not adequately take into account the circumstances by which an individual provides material support to a group, nor does it properly distinguish between groups that are actual threats to our nation and those who are not. 

“MARIANA,” COLOMBIAN REFUGEE: Thank you for allowing me to be here today. I was a nurse in Colombia, and my daughter and I are seeking asylum in the United States, because of my fear of the Revolutionary Armed Forces of Colombia, FARC… I am making this statement under the name “Mariana,”because I am terrified that if the FARC learns of my identity in the United States and that I am seeking asylum, they will harm my family, which is still back in Colombia… 

After completing my nursing degree, I worked for the Ministry of Health, organized conferences on health promotion, and directly served Bogota’s poor communities… In 1997, I was giving a presentation with a doctor for a health campaign. During the talk, an audience member collapsed, so the doctor and I attended to him while the other attendees left. But the fallen man suddenly began to laugh, and the two other men came over and identified themselves as members of FARC. The guerrillas kidnapped and physically assaulted me and took me to a FARC member who had been shot, forcing me at gunpoint to treat him. Before returning home, the guerrillas threatened my life and the lives of my family if I notified the authorities. In the following months, FARC members continued abducting me, forcing me to provide treatment and medicine to injured guerrillas. 

Eventually, I became certain that I was going to be killed by FARC because I was left with a condolence card at my doorstep, something which FARC did routinely before it killed someone. I was absolutely terrified for my safety and for my family’s safety. I knew that FARC would kill me and my family if I did not cooperate with them… The communications that they made showed me that they were watching my every move, and it is well known that FARC has infiltrated the Colombian government and there is no one that can protect you. For instance, shortly after the medical clinic where I worked was closed, FARC killed my cousin by beating him to death and then setting his taxi on fire. 

I fled to the United States with my daughter and immediately filed a request for asylum. On July 26, 2006, DHS rejected my claim for asylum, stating that “there are reasonable grounds for regarding you as a danger to the security of the United States in that you have provided material support to those who engage in terrorist activity.” DHS then initiated removal proceedings against my daughter and me. Our request for asylum is now pending before the U.S. immigration court, and our next hearing is scheduled early in 2008. 

I cannot believe that I was denied asylum based on supporting a terrorist organization. I never acted voluntarily. I only provided medical support because I was threatened at gunpoint and told that if I don’t help the FARC, both me and my family would be killed. I sincerely felt that I had no other option because I would have been killed if I had not done what they wanted. 

The asylum application has been pending for almost seven years, and I am still overwhelmed with the fear that I will be sent back home to Colombia, or that FARC will take action against my family. I have no sense of security, and it has been very difficult for me to raise my young daughter here with such uncertainty. Deportation back to Colombia would literally be a death sentence for us.
 

Witnesses explained that the Administration has created many exceptions; however, the exceptions have not been applied in great number, and are taking far too long to implement. 

SEN. DURBIN: There’s no question that efforts are under way to address the problem created by this material support bar. The administration has taken some positive steps, exercising its waiver authority in some cases. Congress has also taken some steps. Language negotiated by Senator Kyl and Leahy that would exclude some from the material support bar was included in the Foreign Operations appropriations bill the Senate recently passed. We’ll have an opportunity to discuss those measures today.

… 

SEN. COBURN: I’m especially encouraged by the duress waivers issued this year, which should provide relief to many who were forced to give material support to terrorist organizations against their will. These acts, though slow in issuance and implementation, demonstrate progress in our attempt to resolve these programs and problems. I remain concerned, however, that the progress we may have made has been insufficient. Former allies such as the Laotian Hmong and the Vietnamese Montagnards, who fought alongside U.S. soldiers in past conflicts, remain excluded from entering the United States as refugees by the material support bar. Additionally, it seems that the relief has been slow to reach bona fide refugees who should be covered by waivers that have not already been issued… I’m also interested in learning more about how we can expedite the waiver process and alleviate some of these issues more efficiently. 

SEN. DURBIN: You said that the Department of Homeland Security has issued over 3,000 exemptions to individuals who provided material support, and most of these were for refugees outside the country. You didn’t mention those who are already in the U.S. and seeking asylum. It’s my understanding at this point the government has granted waivers to only nine asylum seekers. Over 440 are pending. Is that correct? And if so, what’s the justification for delay in processing the waivers for these asylum seekers?

ASST. SEC. ROSENZWEIG: I believe your numbers are correct. There have only been nine grants within the asylum division, and there are approximately 440 that are on hold. There are a couple of reasons that lie behind that timeframe and sequencing. First, of course, is that we started the process in which we exploring how to exercise this waiver authority outside the United States, rather than inside… Then there comes a second order of delay, which is the first extension within the United States applied to asylum seekers and immigration benefit seekers other than those who sought support under duress. That, too, is a complicated issue that posed a series of intricate legal problems. Thus, since the issuance of the duress exemption for Tier III, we’ve processed eight Tier III duress cases in the asylum, and there are approximately 70 more left. There now are about 120 FARC duress exemption cases that have been on hold that are in train to be processed expeditiously, now that the administration has determined to move forward with processing of those cases following the national security analysis I alluded to. We will then in train add the Lord’s Resistance Army, the other opposition groups in Colombia, the AUC and ELM.

SEN. DURBIN: What’s the timeline on that?

ASST. SEC. ROSENZWEIG: Well, those determinations are out for within the national security community. I don’t know the timeframe for them coming back. 

Witnesses testified that the Administration should process more quickly the applications of Iraqi refugees, many of whom risked their lives to help the United States in the war. 

SEN. DURBIN: When I recently visited Iraq and learned that there were some four million displaced persons, two million internally and two million outside of Iraq – refugees – rough estimates of 600,000 or 700,000 in Jordan, over a million in Syria, some in Egypt and undoubtedly other countries. And I was also told at the time that the United States had accepted some 700 Iraqi refugees. And so you’ve said that material support, as I understand it, is not a general issue with these Iraqi refugees.

ASST. SEC. ROSENZWEIG: It hasn’t presented itself thus far.

SEN. DURBIN: I’m trying to figure out why it is taking so long, why they have to leave Iraq to apply for refugee status. This displaced population is causing great hardship in Jordan – I didn’t visit Syria, so I don’t know – but causing great hardship in a country that is not wealthy… Many of these people who are asking for refugee status literally risked their lives for us, for our soldiers, for our people, for our cause…

ASST. SEC. ROSENZWEIG: Yes, I can. Let me first, though, address the timeline question, and then the numbers, because though I know it seems a long time to you, the processing time for Iraqi refugees is now down to between four and six months, which is shorter than for any other refugee population anywhere else in the world. You saw the Than Hin camp where they’ve been waiting ten years. And that is precisely because the Department of State, the International Organization for Migration, and DHS have been investing substantial and significant resources in speeding up the process. To that end, the president’s report on refugees will set a target – one that I am confident we will meet –of accepting 12,000 refugees from Iraq next year, which will be roughly 12/70 of the total goal for the entire world. So that’s quite a substantial commitment. That having been said, if there are 600,000 in Jordan – and they are – the United States can’t possibly accept all of those. We have accepted more for referral from UNHCR than the rest of the world combined at this juncture. And we’re going to continue to move forward on that.

SEN. DURBIN: How many have we accepted?

ASST. SEC. ROSENZWEIG: We have accepted for referral to the USA RAP program 11,019 as of Monday. Of those 10,000 484 were referred to us by the UNHCR, 229 were referred by U.S. embassies, and 306 were what we call direct access referrals.

SEN. DURBIN: And how many have been accepted by the United States so far?

ASST. SEC. ROSENZWEIG: To date there are 942, I believe – that may be higher, because this is Monday’s number – who have actually been admitted. We have completed interviews on 4,309 of them, fully approved some 2,987. 

SEN. DURBIN: So how many DHS staff or employees are currently sent to Jordan, where you can go to process the 600,000 or 700,000 Iraqi refugees?

ASST. SEC. ROSENZWEIG: We send teams of four to six whenever there are individuals who are ready for an interview. That is a middle point in the process…

SEN. DURBIN: Since I was there a few weeks ago, I can tell you that the problem has overwhelmed Jordan. Sending six teams of six – I’m sure they would react by saying you have to do a lot more than that. And I hope we will. I understand that there is a security issue that we have to be sensitive to and mindful of. I also understand that currently we have 65,000 Iraqi civilians who are supporting our effort in Iraq, risking their lives for our cause and for theirs, a joint cause, I should say. So I hope that we will be more sensitive to the impact and the need for quick action… If you say that this started last February, that was four years into this war before we started dealing with this issue. And clearly, we’re long overdue in meeting an obligation here.

…

 

We can’t accept 600,000 or 700,000 and I wouldn’t suggest it. We certainly can accept some moral responsibility for helping Jordan and those other countries who are trying to provide humanitarian assistance to them.

ASST. SEC. ROSENZWEIG: That I would certainly agree with. That, of course, is in my colleague from the Department of State’s purview for providing humanitarian assistance.

SEN. COBURN: I just think the record needs to – a lot of these refugees don’t want to come here. They want to go home. And so we can’t use the number 600,00 or 700,000 because their real choice is to go home, and so that’s a whole other set of issues. But we need to be very clear. Those that have helped us, those that want to seek our help we ought to be ready and able and willing to help. 

Senator Boxer spoke on the need to invest in America’s bridges and maintain their safety. 

SEN. BOXER: Since its creation, the Highway Bridge Program has provided approximately $77.6 billion for bridge repair and replacement. The most recent highway authorization bill, SAFETEA-LU, included a total of $21.6 billion for the Highway Bridge Program, with an average of $4.3 billion provided per year.

Unfortunately, this amount of funding is nowhere near what is necessary to keep our bridges in good repair. According to the U.S. Department of Transportation’s 2006 Conditions and Performance Report, the average annual cost to maintain our nation’s bridges at their current level over the next 20 years would be $8.7 billion. The average annual cost to eliminate the repair backlog and fix other problems that are expected to develop between now and 2024 would be $12.4 billion annually.

The U.S. Department of Transportation “estimates that $65.2 billion could be invested immediately in a cost-beneficial fashion to replace or otherwise address current existing bridge deficiencies.” We need to invest more in our nation’s bridges. But we also need to insure that Federal funds dedicated to bridge repair and replacement are well spent and used as intended. 

What happened in Minnesota is a warning for our states, for Congress, and for the Administration. We have great challenges before us. But at the end of the day it’s a matter of setting priorities. If we are going to keep our people safe and our economy strong and healthy, we need to stop skirting the surface and make a serious investment in our transportation infrastructure.

 

Transportation Secretary Peters testified about the Department’s funding estimates and priorities needed for bridge infrastructure investments.

SEN. BOXER: As you mentioned in your testimony, the Department of Transportation has estimated that $65 billion could be invested right now in a cost effective way to repair current bridge deficiencies. Where do suggest we get that funding?

MARY E. PETERS, SECRETARY, DEPARTMENT OF TRANSPORTATION: That figure came from a report to Congress, the Condition and Performance Report, the 2006 Report, and it estimated that the investment backlog to be $65.2 billion for all levels of government. This estimate while it is our most current is based on data from 2004, stated in 2004 dollars, and both the backlog and bridge inventory has changed since that time. I would be happy to get you updated figures as near as we have them. 

Madam Chairman, I think what we need to do as I said in written testimony and in my oral statement is reprioritize where we are spending money today. Today, beyond the roughly six core programs that are devoted to highway bridge uses we have overall some 40 programs where monies are diverted away from these core needs. 

SEN. BOXER: I am asking you where we’re going to find the money. Your department said $65 billion, I assume you’re not attacking your own study. So if that’s accurate where do get the funding? Now the $65 billion is all sources so it’s not all Federal funds, so let’s assume its about 50 percent Federal funds or a little more than that. 

SECRETARY PETERS: Normally speaking overall funding is about 40 percent Federal. 

SEN. BOXER: Ok, so 40 percent is what we have to look at. Where would you get it? You talked about the gas tax, I don’t support raising the gas tax so I don’t know who you were aiming that at. If there is a way to fix our infrastructure without money, I would like to know what it is. Short of having a Jimmy Carter like organization come and get everybody together to do it, and even that would require contributions. I tell you something around this place that’s really extraordinary: to get money for Iraq (snaps finger), to get money for Iraq’s infrastructure (snaps finger), to get money for our infrastructure, for our people, so they don’t have to die on a road. Well we just have to really just prioritize. You can not prioritize your way out of a problem. We are growing, so it’s not just a question of a static situation.

 

Witnesses testified on the urgent need to address the solvency of the Highway Trust Fund

ANDY HERRMANN, MANAGING PARTNER, HARDESTY & HANOVER, ON BEHALF OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS: Funding programs for transportation systems, i.e., federal aviation, highways, harbors, inland waterways, and mass transit as documented by the U.S. Department of Transportation, need to be increased, to provide orderly, predictable, and sufficient allocations to meet current and future demand. The Highway Trust Fund is in danger of insolvency (as other trust funds may be in the future) and must receive an immediate boost in revenue to ensure success of multi-modal transportation programs. In fact, the Office of Management and Budget estimates that in FY 2009 the Highway Account of the Highway Trust Fund will be in the red by as much as $4.3 billion. 

The safety, functionality, and structural adequacy of bridges are key components

necessary to support and ensure the safe, reliable, and efficient operation of transportation infrastructure and systems which provide mobility of people and the movement of goods and services. Federal policy establishes the minimum bridge safety program components necessary for both public and private bridges to ensure an adequate and economical program for the inspection, evaluation, maintenance, rehabilitation, and replacement of our nation’s bridges. 

Continued neglect and lack of adequate maintenance will ultimately result in higher annual life-cycle costs of bridges due to shortened service life. Therefore, investment to improve the condition and functionality of the nation’s bridges will reduce the required investment in the future. 

SEN. BAUCUS: The Social Security law says, “None of the monies paid ... under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal purposes.” In other words, Social Security benefits are protected. No one can garnish your Social Security check. And that goes for Social Security benefits deposited electronically in bank accounts. Those benefits are protected, too…Five banking regulatory agencies regulate banks. These agencies have been working together to come up with a common guidance for their banks regarding freezes of federal benefits…The fundamental question is: Do banks have to follow court orders to freeze Social Security and other benefits, even though federal law says that garnishment of such funds is not permitted? The answer should be a resounding, “No, they do not have to follow those state court orders.” But the answer in the guidance [issued the day before] is, essentially, in many cases – most cases – “Go ahead and freeze the accounts.” 

… 

SARA KELSEY, GENERAL COUNSEL, FEDERAL DEPOSIT INSURANCE CORPORATION: It is clear that Congress intended that Social Security and other federal benefits not be garnished, except in certain specific circumstances. However, the garnishment process is primarily controlled by state law, as you have observed. In that process, a state garnishment order is served on a bank, requiring that funds to a customer canbe frozen while the process sorts out who is entitled to the money. 

… 

MONTRICE YAKIMOV, MANAGING DIRECTOR FOR COMPLIANCE AND CONSUMER PROTECTION, OFFICE OF THRIFT SUPERVISION, DEPARTMENT OF TREASURY: Federal law currently provides that such benefits are exempt from garnishment, apart from limited exceptions. However, state court garnishment orders often provide that financial institutions are liable for funds withdrawn by a customer after the institutions receive the garnishment order. And federal laws that protect federal benefits do not specifically prohibit an institution from freezing an individual’s account during the period when a garnishment order is challenged by the recipient of federal benefits. As a result, financial institutions receiving these orders often place holds on the account while the matter can be resolved. 

… 

JULIE WILLIAMS, CHIEF COUNSEL AND FIRST SENIOR DEPUTY COMPTROLLER OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY: Various federal laws exempt federal benefits payments from garnishment. But these laws do not exempt financial institutions from state judicial processes and court orders that require a freeze or hold to be placed on funds in an account while the claim of the creditor and the account holder’s defenses to that claim are resolved, pursuant to state law procedures. Thus, even if funds in the account ultimately are established to be federal benefits payments that are exempt from garnishment, until that occurs, the account holder loses access to some or all of the funds in the account for a period of time. 

Witnesses explained that this practice can cause great hardship for Social Security beneficiaries.

WAVERLY TALIAFERRO, SOCIAL SECURITY BENEFICIARY FROM NEW YORK WHOSE BANK FROZE HIS SOCIAL SECURITY BENEFITS: Our Citibank account was frozen…The account had only $47 in it, all of which was left over direct deposit Social Security from July. I learned of the freeze when my August check was electronically deposited into the frozen account… 

…

After our lawyer threatened to sue them, the creditor unfroze the account on day 23 of the freeze. I then discovered that Citibank had taken $45 for processing the restraint. While it wasn’t a huge amount of money, it seemed like Citibank owed me an apology, not a bank fee. Although I and my lawyer asked Citibank to return the fee, it never did. 

Getting by on no money for 23 days was quite difficult. We ate all of our staples, spent the silver dollars I had saved as keepsakes, and then survived off of a 10-pound bag of brown rice. Eating brown rice three times a day, Sunday through Saturday, is pretty tedious. Amazingly, neither Millie nor I got sick. Rather, we lost weight. I lost 40 pounds. Millie lost three dress sizes. 

During those 23 days we got used to being hungry. We got used to having no entertainment other than walking to the library or reading a book. We got used to the creditor’s delay tactics. But what we couldn’t and haven’t gotten used to is the fear that this dehumanizing experience could happen again. One morning we could find ourselves eating rice, scrounging for loose change in the sofa. 

… 

MARGOT SAUNDERS, COUNSEL, NATIONAL CONSUMER LAW CENTER: As you can see from the number of organizations, both national and state organizations, that have signed on to our testimony, this has become the most alarming issue legal services programs deal with on a daily basis after predatory lending…[T]here are dozens of cases from across the country where we have tried to illustrate the personal damage that has occurred when Social Security and other federal benefits have been attached. 

Because of EFT 99 [a law requiring that all federal payments, except tax refunds, be made electronically beginning January 2, 1999], many millions of low-income recipients of federal benefits now have their payments directly deposited in bank accounts, where they had previously received paper checks and been completely protected from these garnishment activities. Yet now, we estimate that on a monthly basis, thousands of low- income recipients of Social Security, SSI [Supplemental Security Income] and other federal payments, whose benefits are entirely exempt from claims of judgment creditors, are left temporarily destitute when banks allow the attachments and the garnishments. 

Witnesses agreed that the problem could be solved if the beneficiary agencies issued a uniform, national interpretation confirming that there is a bar against freezing accounts that contain federal benefits that are exempt from garnishment. 

SEN. BAUCUS: Ms. Saunders, if I may ask you, is it your view that the federal law is so clear, that you don’t have to wait for the guidance from the beneficiary agencies. Is that true or not true, in your view? 

MS. SAUNDERS: Well, Senator Baucus, the federal regulators of the banking agencies regulate the activities of the bank....And the distinction between a freeze and an attachment is hard for me to discern. The freeze is the first step of an attachment, and would not occur but for the attachment order. So, if money is exempt under federal law, it’s exempt from a freeze. 

… 

SEN. BAUCUS: Ms. Saunders, again, I’m looking for guidance from you, because, as you heard Ms. Williams state, she feels that her agency doesn’t have the power to issue regulations along the lines that you’re suggesting. 

…

MS. SAUNDERS: I think it would be fine for the benefit agencies to weigh in. It seems to me that this is an interpretation of bank practice, and that the federal regulators of banking have the authority and are simply choosing not to take it, because their constituents don’t really want them to take it. 

… 

SEN. BAUCUS: What’s the right thing to do here? 

MS. SAUNDERS: Senator, we would like to see the regulators – these regulators –come out with a simple rule that says something along the lines that banks should not freeze accounts which contain electronically deposited funds, except to the extent certain exceptions are met. 

One exception might be if the state court order specifically identified the judgment as being for child support or alimony. The other exception would be if the account includes commingled funds, in which case we would ask the federal regulators to take a step – a second step – and come up with a uniform rule – and there are several to choose from that’s been discussed here today – by which the banks should determine which funds are exempt and which funds are not exempt, when they’ve been commingled.

The last thing that we would want – and, I think, that the regulators or Congress would want – would be a rule that comes out that would encourage or discourage the use of these bank accounts for any other purpose. We don’t want Social Security recipients to have second class bank accounts. So that if they put –if they had protections from exemptions, so long as they had no other funds in them in the accounts, but they added one dollar, the entire account would be subject to attachment, would be a very flawed response. 

SEN. BAUCUS: Ms. Kelsey, what do you think about that suggestion? … I assume no freeze or attachment or anything, except for those exceptions that are in the law, like child support and alimony and so forth, and when there’s commingling, there are ways to deal with it. 

… 

MS. KELSEY: I think that the mechanism tying a bar to the electronic deposit is a good one. But the benefit agencies should be the ones to say that is the bar, because…they are the ones that possess the authority to say that. 

… 

MS. YAKIMOV: I think the benefit agencies have to be a part of the solution…I think it’s a valid suggestion that we ought to take back, we ought to explore…There are state laws, and in the state court order, failing to comply subjects the institution to some real risk, some liability. And I think that’s got to be a part of this conversation. So, if we were to come out with a rule that says you should not freeze except in these circumstances, that’s got to be part of the dialogue…I don’t disagree with Ms. Saunders’ suggestion. I think it’s something that we ought to take a look at. But again, the benefit agencies have to be a part of that discussion, and part of the solution. And this immunity, this liability issue has to be a part of it, as well. 

… 

MS. WILLIAMS: Mr. Chairman, I think this is an area that cries out for a clear, uniform solution. And so, I agree with what Ms. Saunders has said on that…I think where we disagree is how you get there.…We think we need to look to the benefit agencies, because they are the ones that administer and interpret the key statutes.

…

SEN. BAUCUS: So, in effect, we’re waiting for the SSA [Social Security Agency] and other benefit agencies….Now, there’s one little problem here, as I see it. And it’s easily a problem in life when you’re waiting on somebody else to do something that maybe you can do yourself. In this case we’re in some sense kind of waiting on the benefit agencies. The problem there is they may not do what we’re assuming they’re going to do. Why might they not? Because their recommendations have to be cleared by the Office of Management and Budget. And the Office of Management and Budget notoriously restricts advice, the primary advice that agencies have, or actions – restricts actions that the agencies might want to take.

…

So, I’m going back to all of you. You may just have to do what’s right on your own and not have to wait, because the benefit agencies may not be able to say what they think is right, because the Office of Management and Budget may not let them. This Congress runs across that continually – time and time and time again. It’s a problem….It’s my view that all of you and your agencies should go the extra mile to protect beneficiaries. You know, the law is pretty clear. The federal statute is pretty clear…[T]here are two points here…[L]et’s keep remembering Mr. Taliaferro…[and] driving toward the right solution and doing it very quickly.

Thursday, September 20: Senate Small Business and Entrepreneurship Committee
“Expanding Opportunities for Women Entrepreneurs: The Future of Women’s Small Business Programs”
 

 

Democratic Senators stated their commitment to ensuring that women entrepreneurs have an equal opportunity to do business with the federal government.

SEN. KERRY: Women-owned small businesses still continue to have lower revenue and fewer employees than firms owned by men. For instance, only 16 percent of firms with employees are owned by women. In addition, although six percent of businesses owned by men have revenues of one million dollars or more, only three percent of all women-owned firms do so. Women-owned firms also account for less than three percent of all federal contracts, even though they comprise 30 percent of all privately held firms. 

Witnesses testified that unclear guidelines combined with poor communication and coordination within the Small Business Administration led to delays in distributing funds to Women’s Business Centers.

DEBRA RITT, ASSISTANT INSPECTOR GENERAL FOR AUDITING, SMALL BUSINESS ADMINISTRATION: We found that SBA [Small Business Administration] was consistently late in disbursing grant funds, and that the percentage of late payments in Fiscal Year (FY) 2006 had increased from the previous year. In FY 2006, SBA disbursed over 500 payments to Women’s Business Centers for both new and sustainability grants, but only 25 percent of these payments were made within the Office of Management and Budget’s goal of 30 days. The remaining 75 percent were disbursed from 30 to 353 days following the receipt of payment requests.

… 

ROSEMARY BRATTON, EXECUTIVE DIRECTOR, WYOMING WOMEN’S BUSINESS CENTER: We submitted our grant application to grants.gov on May 22, 2007. To date I have heard nothing official about the status of our grant. In August…I was then told that Wyoming was not funded…I was left to believe that our grant did not rise to the top six based on the point system…I discussed…how helpful it would be to know where our proposal was weak. Last week, our liaison emailed the Office of Women’s Business Ownership…the response was that Wyoming’s grant was incomplete, that we had not submitted the technical proposal to grants.gov. After numerous phone conversations with grants.gov and much research on their part, it was determined that our complete grant proposal was received, reviewed, validated then submitted to the Office of Women’s Business Ownership where it was retrieved. 

Senator Kerry explained that the Bush Administration has failed to implement the Women’s Procurement Program, which in the last seven years resulted in women businesses receiving less than three percent of all federal contracts. 

SEN. KERRY: Failure to implement the Women’s Procurement Program has cost women business owners at least six billion dollars in lost contracts…. In a July hearing, SBA Associate Administrator said the program would be in place by the end of this fiscal year. September 30^th is just around the corner, and women small business owners deserve to know exactly what is happening with that program. 

… 

It’s disgraceful…Where’s the proactive, visionary leadership where you come up here and tell us, “here’s what we’re doing to make life easier for these folks?” 

Witnesses explained that fair and efficient running of both the Women’s Procurement Program and the Women’s Business Center grant program is essential to the success of women entrepreneurs across the country.

WENDI GOLDSMITH, PRESIDENT, BIOENGINEERING GROUP: In general, as a woman business owner I have faced constraints tied to access to working capital and dismissive treatment by bankers; the need to figure out how and why to tap a network of mentoring and advisory resources, then building one from scratch; and cultural challenges tied to recruiting and retaining male staff. 

… 

GALE KING, OWNER, TREATS BY GALE, LLC: When I started Treats by Gale, there was no way I could afford the services of a business consultant or a coach. Through the Women’s Business Center, I learned from insurance agents, lawyers, bankers, marketing specialists, and accountants. These people all shared their areas of expertise with us. I cannot imagine what I would have done without this resource. 

Witnesses explained that private military firms in Iraq, like Blackwater U.S.A., are subject to little or no oversight or accountability for their actions.

JEREMY SCAHILL, INVESTIGATIVE REPORTER: Right now the U.S. military is the junior partner in the coalition that is occupying Iraq. There are about 180,000 private contractors – about 170,000 – we don’t know with the surge – etcetera – U.S. troops. That is an extraordinary development. Instead of going to war or occupying a country with a coalition of willing nations, they have purchased a coalition of billing corporations. 

… 

SEN. REID: Who are these corporations accountable to? What laws apply to them? This is certainly seen in Iraq. They do not know if Iraqi law applies, American law applies – obviously, no law applies.

…

MR. SCAHILL: During its time in Iraq, Blackwater has regularly engaged in firefights and other deadly incidents – about 30 of its operatives have been killed in Iraq and these deaths are not included in the official U.S. death-toll. While the company’s operatives are indeed solders of fortune, their salaries are paid through hundreds of millions of dollars in taxpayer funds allocated to Blackwater. What they do in Iraq is done in the name of the American people and yet there has been no effective oversight of Blackwater’s activities and actions. U.S. contractors in Iraq reportedly have their own motto: “What happens here today stays here today.” 

SEN. MCCASKILL: At the highest levels, the people that are guarding are former military – many former Special Forces, they are making more than six figures a year, and there seems to be an almost a protectiveness about them with some of the high levels of the military. When I have discussed this with some of the generals there, well “they do a great job.” I don’t want to say it is cozy in terms of – you know – inappropriate, but cozy to the extent that they are defensive and protective of Blackwater. 

MR. BICANIC: The revolving door that people often talk about at the highest levels of insider beltway dealings exists on a lower level as well amongst the security contractors. For the sake of argument, if you are in a cafeteria and you are talking to a security contractor who, for the sake of argument, is making three or four times as much as you, but risking his life in the same way, on the one hand you might go well this sucks, why is this happening, this is not really very fair, what is he doing that I am not doing. But on the other hand you might go; I might not want to piss this guy off too much because this might be my career. 

Witnesses detailed the retaliation they suffered for blowing the whistle on waste, fraud, and abuse.

SEN. DORGAN: Mr. Vance, you were a navy veteran. 

DONALD VANCE, FORMER PRIVATE SECURITY CONTRACTOR: Yes, Sir. 

SEN. DORGAN: You worked for a security firm in Iraq… 

MR. VANCE: Yes, Sir. 

SEN. DORGAN: …as a civilian – an American citizen. 

MR. VANCE: Yes, Sir. 

SEN. DORGAN: …apprehended by the Americans and held in prison by the American government you believe… 

MR. VANCE: Yes, Sir. 

SEN. DORGAN: …for 97 days. 

MR. VANCE: Yes, Sir. 

SEN. DORGAN: Mr. Vance, you presumably were imprisoned, you believe, because you witnessed the sale of guns in Iraq… 

MR. VANCE: Yes, Sir. 

SEN. DORGAN: …illegal sale of guns. You were a whistleblower. You came forward and reported that to your government and your government, for that purpose, took you, and detained you, and imprisoned you for 97 days. When you were released after 97 days of interrogation with the things that you described: loud music, lights on 24 hours a day and so on, when you were released, what did they tell you upon your release? 

MR. VANCE: Senator, I was given a 20 dollar bill and dumped at Baghdad International Airport. 

SEN. DORGAN: By whom? 

MR. VANCE: By the United States military, Sir. 

SEN. DORGAN: You don’t know at this point why you were imprisoned? 

MR. VANCE: Sir, the only answer I was given was that we are detaining you because you are affiliated with Shield Group Security and of course, my immediate answer was, “Yes, I know of their illegal activities, I have been telling you for about seven or eight months.” 

… 

BUNNATINE GREENHOUSE, FORMER TOP-RANKING CIVILIAN CONTRACTING OFFICER U.S. ARMY CORP OF ENGINEERS: I was the United States Army Corp of Engineers top procurement executive. A career spanning over 23 years ended on August 27, 2005. I was removed after I raised concerns over the award of a seven billion dollar sole-source no-compete cost-plus contract to Halliburton subsidiary Kellogg, Brown, and Root, KBR, known as the Restore Iraqi Oil Rio contract. The award of this contract represents the worst contract abuse I witnessed during my professional career. I took an oath of office and under that oath of office was seeing that federal procurement of contracting must be conducted with the highest degree of integrity, the highest degree of impartiality, with preferential treatment toward none. 

Witnesses testified that as a result of this Administration’s failure, practically no legal protection exists for whistleblowers that come forward to expose waste, fraud, and abuse.

ROBERT ISAKSON, FORMER COALITION PROVISIONAL AUTHORITY CONTRACTOR: Deuteronomy 32:38 states, “Let us rise up and help you and be your protector.” No one in the government rose up to help us or provided any protection for us in this endeavor. Not only did we have to spend our own funds and time to prosecute this case, we also had to endure the unrelenting attacks and slander from our opponents. We were sued repeatedly. We have been the subject of anonymous blogs and lies on the internet and anonymous fraudulent emails and documents. 

…

 STEPHEN KOHN, EXECUTIVE DIRECTOR NATIONAL WHISTLEBLOWER CENTER: I could just as a lawyer and someone who studied every single whistleblower law in the United States, federal and state, I can tell you that under federal law the overwhelming majority of employees have no realistic protection. 

… 

ALAN GRAYSON, ATTORNEY GRAYSON & KUBLI: Contracting whistleblowers have a unique place in our legal system. Thanks to the wisdom of President Lincoln, whistleblowers who witness fraud by contractors are deputized as private Attorneys General. They are authorized to bring law suits in federal court against companies who cheat the government, the taxpayers, and the troops. Under the False Claims Act, the Attorney General is supposed to join with whistleblowers to prosecute and punish war profiteers. The sad truth is that the Bush administration has not even tried to do this, on the contrary, it’s done all it could to prevent this.

DPC