DPC | September 4, 2007

Senate Oversight Highlights Week of July 30, 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, July 31, 2007: Senate Armed Services Committee

“Nomination of Admiral Mullen to be Chairman of the Joint Chiefs of Staff and General Cartwright to be Vice Chairman of the Joint Chiefs of Staff”

• Witnesses testified that the surge is not proving effective in the fight against al Qaeda or facilitating Iraqi political progress.
   
• Witnesses agreed that the Administration has relied too much on the military to implement its strategy. 
   
• Witnesses testified that the current strain on military forces cannot wait until the conflict is over to be resolved.

 

Tuesday, July 31, 2007: Senate Committee on Foreign Relations

“Safeguarding the Atom: Nuclear Energy and Nonproliferation Challenges”

• Senators explained that the creation of an international nuclear fuel authority could discourage nuclear proliferation. 
   
• Witnesses testified that the International Atomic Energy Agency needs more funding to modernize and expand their ability to combat nuclear proliferation. 
   
• Witnesses testified that a system of safeguards is the most effective way to regulate international atomic energy use.

  

Tuesday, July 31, 2007: Senate Committee on Veterans’ Affairs
“VA-DOD Cooperation and Collaboration”

• Witnesses testified that funding for veterans’ education programs is not keeping pace with the growing cost of education.
   
• Witnesses testified that the benefits of the Montgomery G.I. Bill far outweigh the funding costs.  
   
• Witnesses testified that reservists and National Guard soldiers face unique education benefits challenges.  
   

Tuesday, July 31, 2007: Senate Committee on Finance

“Carried Interest Part II”

· Witnesses testified that current tax codes give wealthy fund managers an unfair tax loophole.

 

· Witnesses testified that tax breaks for fund managers are inefficient or even harmful to the market.
 

Wednesday, August 1, 2007: Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia

“Building a Stronger Diplomatic Presence to Meet the Challenges of a Post 9 -11 World”
 

• Witnesses testified that Foreign Service positions created by the Diplomatic Readiness Initiative to address shortages around the world have been redirected to Afghanistan and Iraq.  
   
• Witnesses testified that there is a severe shortage of Foreign Service Officers proficient in “superhard” languages. 
   
• Witnesses testified that Americans are underrepresented at the United Nations (UN) and its specialized agencies.

  

Thursday, August 2, 2007: Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Security and International Trade and Finance
“Reforming Key International Institutions for the 21^st Century”

• Witnesses testified that the World Bank needs to downsize its bureaucracy and focus more on project development and oversight.
   
• Witnesses testified that both the World Bank and the International Monetary Fund need to broaden the base of countries that influence policy and management. 
   
• Witnesses testified that the World Bank must be in the development business not the lending business.

  

Tuesday, July 24, 2007: Senate Committee on the Judiciary

“Preserving ProsecutorialIndependence: Is the Department of Justice Politicizing the Hiring and Firing of U.S.Attorneys? – Part VII”

 

• Karl Rove, White House Deputy Chief of Staff, failed to appear before the Senate Judiciary Committee, even after being served a subpoena requiring him to do so. 
   
• Senators pointed out inconsistent assertions of executive privilege by White House officials. 
   
• Witnesses confirmed the use of Republican National Committee resources for official government activities.

 

Tuesday, July 24, 2007: Senate Commerce, Science, and Transportation Committee

“Oversight of Telemarketing Practices and the Credit Repair Organizations Act (CROA)”

· Witnesses testified that abuse by credit repair organizations (CROs) hurts both consumers and creditors. 

· Witnesses testified that telemarketing fraud disproportionably hurts America’s seniors.

· Witnesses testified that the “Do Not Call” Registry (DNCR) has been overwhelming successful, but loopholes still exist in the law.

 

Tuesday, August 1, 2007: Senate Commerce, Science, and Transportation Committee

“Oversight of the Department of Commerce”

• Senators and witnesses expressed concern about the Administration’s willingness to address global climate change.
   
• Democratic Senators demanded that the President appoint a permanent Inspector General for the Department of Commerce immediately. 
   
• Senators challenged the Commerce Department to better invest in the innovation and research.
   

 

Witnesses testified that the surge is not proving effective in the fight against al Qaeda or facilitating Iraqi political progress.

SEN. LEVIN: Admiral, do you agree that, given the purpose of the surge, which is to give the Iraqi government what you and the President call breathing space to make the political compromises needed for reconciliation and a political settlement, that there’s been very little or not progress in terms of political settlements?

ADMIRALMichael G. MULLEN, U.S.N.: Yes, sir, I agree. There does not appear to be much political progress.

…

SEN. GRAHAM: General, are we, through the surge, diminishing Al Qaeda’s presence and viability in Iraqor not?

GENERAL JAMES E. CARTWRIGHT, U.S.M.C.: We are challenging it. And in that challenge, in areas we are diminishing it, for sure. They are resilient. They have – they seem to have an unlimited pool from which to draw from if you’re on the battlefield. In other words, as we defeat, others come in behind. 

Witnesses agreed that the Administration has relied too much on the military to implement its strategy.

ADM. MULLEN: I believe the surge is giving our operational commanders the forces they needed to execute more effective tactics and improve security. That is happening. Security is better; not great, but better. I believe security is critical to providing the government of Iraq the breathing space it needs to work toward political national reconciliation and economic growth, which are themselves critical to a stable Iraq. Barring that, no amount of troops and no amount of time will make much of a difference. 

…

SEN. SESSIONS: Admiral Mullen, you mentioned something in one of the answers to your questions that you thought perhaps the most significant mistake we’ve made in this Iraq effort was that we did not fully integrate all elements of U.S. national power in Iraq. I think that is a big problem for us. For example, it’s not the military’s primary responsibility, is it, to work with the Iraqi government to deal with the political problems they’re facing? That’s not your primary –that’s the State Department’s primary responsibility...

ADM. MULLEN: Yes, sir, it is.

SEN. SESSIONS: Likewise, it’s not the military’s primary responsibility to get the water and electricity operating or the economy moving...or the agricultural products being produced better. So we’ve created a situation in which the military, in my way of thinking, is the one entity that works in Iraq. You’ve had to take over responsibilities that should not really be yours. Will you press that issue...

ADM. MULLEN: Yes, sir, I will. 
 

The current strain on military forces cannot wait until the conflict is over to be resolved.

ADM. MULLEN: My second challenge will be resetting, reconstituting and revitalizing our armed forces, particularly the ground forces. There is strain. We are stretched. Though recruiting and retention figures in general remain good and morale is still high, I do not take for granted the service of our people or their families, and I worry about the toll this pace of operations is taking on them, our equipment and on our ability to respond to other crises and contingencies… The U.S.military remains the strongest in all the world, but it is not unbreakable. Force reset, in all its forms, cannot wait until the war in Iraqis over.

 

 

Senators explained that the creation of an international nuclear fuel authority could discourage nuclear proliferation.

SEN. LUGAR: The threat posed by the spread of nuclear fuel cycle technology has been complicated by the growing attractiveness of nuclear power, both in developed and developing countries. As energy costs soar and concerns about global warming deepen, many states are considering investing in nuclear power as a way to expand their capacity to generate electricity. The United Statesmust help shape a response to this dilemma. We should be making clear that there is no technological or economic reason why the expansion of civilian nuclear power must be accompanied by the construction of enrichment or reprocessing facilities. Senator Bayh and I have proposed that the United States and like minded nations should establish a new international system whereby countries that give up their own enrichment and reprocessing programs will be rewarded with a guaranteed supply of reasonably priced fuel for nuclear power generation… The Lugar-Bayh bill embraces both bilateral and multilateral fuel supply mechanisms, and calls for a report on the establishment of an International Nuclear Fuel Authority. Our bill makes it the policy of the United Statesto discourage the development of enrichment and reprocessing capabilities in additional countries, to encourage the creation of bilateral and multilateral assurances of nuclear fuel supply, and to ensure that all supply mechanisms operate in strict accordance with the [International Atomic Energy Agency] safeguards system.

…

SEN. BIDEN: To address these risks while meeting a growing demand for nuclear fuel, several nuclear fuel supplier states, including the United States, along with the IAEA [International Atomic Energy Agency] and nongovernmental groups such as the Nuclear Threat Initiative, have proposed some type of guaranteed access to nuclear fuel for states that play by the rules and are looking to make peaceful use of nuclear power. With confidence in such fuel supply assurances, it is hoped, countries could forego the costly and risky pursuit of enrichment and reprocessing technology.

…

FRED MCGOLDRICK, FORMER INTERNATIONL AND EXPORT POLICY DIRECTOR, STATE DEPARTMENT: Enrichment and reprocessing technologies present risks of proliferation since they provide states with materials that are directly usable in a nuclear weapon or a nuclear explosive device…. In my view, a “credible cradle-to-grave” fuel supply program by the U.S. and other suppliers may prove far more effective than some other techniques in discouraging the spread of enrichment and reprocessing facilities since it would relieve states of the burden of disposing of their own nuclear wastes. However, none of the major fuel-cycle states, with the possible exception of Russia, appear to be in a position to offer such options to consumer states on any widespread basis… Most importantly, the inability of the U.S. Government to meet its responsibilities under Nuclear Waste Policy Act to take spent fuel off the hands of American utilities means that U.S. would have no credibility in offering a cradle-to-grave policy to foreign countries unless and until it can move to solve its own waste management problems

 

Witnesses testified that the International Atomic Energy Agency needs more funding to modernize and expand their ability to combat nuclear proliferation.

SEN. LUGAR: Nuclear samples from around the world are collected by IAEA inspectors and brought to this laboratory. There they are tested to determine if nations are complying with their obligations under the NPT [Nuclear Proliferation Treaty]. The laboratory is on the front lines in the struggle to prevent states from pursuing undeclared nuclear weapons research and development. Unfortunately, the laboratory’s aging equipment and dangerous working conditions hamper the important work that is done there. In addition, IAEA technicians are severely limited in the time they can spend analyzing evidence in the “hot” or nuclear part of the laboratory, because it is served by a dilapidated air purification system. The laboratory will become increasingly stressed as more states expand their nuclear power infrastructure…The IAEA is performing an absolutely indispensable security function for the global community. The scientists working there must have the state of the art equipment necessary to do their jobs.

…

HENRY SOKOLSK, EXECUTIVE DIRECTOR, NONPROLIFERATIONPOLICY EDUCATION CENTERI: Full support for the IAEA’senvironmental sampling activities would enable it to replace its aging Safeguards Analytical Laboratory and help the IAEA shorten the time needed to analyze samples from months to days or weeks. Much needed work to develop new safeguarding research capabilities and equipment could proceed much more quickly if more funds were made available. Similarly, with proper funding, the IAEA could muster reserve inspections staff and resources to meet unexpected demands and to provide the agency with a deployable wide-area surveillance capability.

…

DR. MCGOLDRICK: I strongly support the U.S.providing ten million dollars to the Safeguards Analytical Laboratory, and I hope the other Member States of the Agency will come forward with voluntary contributions to add another ten million dollars to bring the laboratory up to snuff. This laboratory has a lot of equipment that is antiquated, and the Agency must rely on a very small number of external laboratories for analyses of environmental samples. The IAEA needs additional as well as new types of equipment for conducting its safeguards activities. The IAEA does not have a state-of-the-art lab for particle analysis, which has become an indispensable tool in determining the existence of undeclared enrichment or reprocessing activities….I, therefore, hope that the U.S. willtake the lead again in urging Member States to provide the resources the IAEA needs to carry out its vital safeguards mission.

Witnesses testified that a system of safeguards is the most effective way to regulate international atomic energy use.

DR. ANDREW SEMMEL, ACTING DEPUTY ASSISTANT SECRETARTY FOR NUCLEAR NONPROLIFERATION POLICY AND NEGOTIATIONS, DEPARTMENT OF STATE: As pointed out in S. 1138, the array of challenges facing the IAEA safeguards system in recent years is likely to continue and require more safeguards resources in the future…. Third, the recent efforts to strengthen safeguards require new safeguards activities. As more states bring safeguards agreements and additional protocols into force, or adhere to strengthened versions of safeguards agreements, the Agency’s workload increases. Fourth, new safeguards activities require efficient, effective and state of the art technological, methodological, information and communication infrastructure in support of its verification regime. 

…

DR. LAWRENCE SCHEINMAN, DISTINGUISHED PROFESSOR, JAMES MARTIN CENTER FOR NONPROLIFERATION STUDIES: Safeguards are a central feature of the nuclear non-proliferation regime and of the era introduced with President Eisenhower’s December 1953 Atoms for Peace initiative at the United Nations. Their importance to a viable and effective international non-proliferation regime cannot be exaggerated. They are for all intents and purposes a conditionsine qua non for cooperative development of civil nuclear energy and practicable international nuclear commerce…. To summarize: the traditional comprehensive safeguards system focused on verification of state declarations using quantitative measures supported by containment and surveillance… The strengthened safeguarded system, which is state-wide rather than facility-specific, builds out from that base and focuses on verifying not only the correctness of state declarations regarding nuclear material but also the absence of undeclared nuclear material and activities. To build a state nuclear profile the strengthened safeguard system puts much greater emphasis on qualitative measures including export and import information, on expanded declarations of nuclear and nuclear-related activities in the state, and on information analysis supported by environmental sampling and quantitative indicators. As well, it provides broader access for inspections of declared and undeclared activities…. To ensure that we do not lose our influence and that the safeguards system remains credible and effective we should recapture our earlier role in developing safeguards technology.

 

 

Witnesses testified that the funding for veterans’ education programs is not keeping pace with the growing cost of education. 

RONALD F. CHAMRIN, ASSISTANT DIRECTOR ECONOMIC COMMISSION OF THE AMERICAN LEGION: One of the top priorities of any veteran education legislation is equity and portability of benefits. However, it is clear that the current dollar value of benefits must be increased to meet the demands of today’s higher education fees…. Today, approximately 40 percent of troops in Iraqare Guard personnel or Reservists. Despite this, both the MGIB-AD [Montgomery GI Bill – Active Duty] and the MGIB-SR [Select Reserve] fail to meet the actual cost of education in this country. 

PATRICK CAMBELL, LEGISLATIVE DIRECTOR, IRAQ & AFGHANISTAN VETERANS OF AMERICA: When I first returned home from Iraq I received harassing calls from my student loan lender, my roommate from Iraqwas denied reenrollment at his college and my coworker who was deployed weeks before his finals was given essentially no accommodations by his school. Those who fight for our rights abroad should not be forced to fight for their rights when they return home.

 

Witnesses testified that the benefits of the Montgomery G.I. Bill far outweigh the funding costs. 

MAJOR GENERAL RONALD YOUNG, DIRECTOR, MANPOWER AND PERSONNEL NATIONAL GUARD BUREAU: The Montgomery GI Bill- Selected Reserve (MGIB-SR) is instrumental in the National Guard’s effort to recruit, train and retain highly professional members in its force structure. The MGIB-SR, leveraged with innovative force management tools such as the Guard Recruiter Assistance Program (G-RAP), plays a major role in recruiting and retaining quality soldiers and airmen. These programs have improved the National Guard’s ability to recruit and retain highly qualified soldiers from all walks of the American landscape and furthered the Department’s effort to develop professional soldiers through formal education. The National Guard’s ability to meet its congressionally mandated end strength owes a great deal to these valuable programs.

TOM BUSH, PRINCIPAL DIRECTOR OF MANPOWER AND PERSONNEL, DEPARTMENT OF DEFENSE: The MGIB education benefit has been a major contributor to recruiting achievements for more than 20 years. As we move through the 21st Century, we must continue to build upon the remarkable legacy of the visionaries who crafted preceding versions and improvements in the GI Bill. 

G. KIM WINCUP, FORMER VICE CHAIRMAN, CONGRESSIONAL COMMISSION ON SERVICEMEMBERS AND VETERANS TRANSITION ASSISTANCE: Although Congress designed the World War II GI Bill for a different era, a different economy, a different society, a different technology, and indeed a different veteran, in the Commission’s view our Nation’s obligation to the veteran remains the same; especially in a current force comprised exclusively of military volunteers.

 

MR. CAMBELL: After World War II, nearly eight million service members (more than half of the entire American fighting force) took advantage of the education benefits afforded them by the Servicemen’s Readjustment Act of 1944…. Sixty years later, we are still reaping the benefits of one of the greatest social investment programs ever implemented. A 1988 Congressional study proved that every dollar spent on educational benefits under the original GI Bill added seven dollars to the national economy in terms of productivity, consumer spending and tax revenue.

 

COLONEL ROBERT F. NORTON (RET.), DEPUTY DIRECTOR, GOVERNMENT RELATIONS FOR THE MILITARY OFFICERS ASSOCIATION OF AMERICA: MOAA [The Military Officers Association of America] appreciates the growing Senate interest in Montgomery GI Bill reform and we look forward to working with the Members of the Committee and the full Senate to ensure that our 21st century warriors, including operational reservists from the National Guard and Reserve, are afforded benefits under the GI Bill that “give hope, dignity, training and skills to these folks coming back so they can reintegrate and become more productive [citizens]”.

 

Reservists and National Guard soldiers face unique education benefits challenges.

 

MR. CHAMRIN: Under current law, members of the Reserve component face many challenges in using the MGIB-SR benefits. Since September 11, 2001, the utilizations of the Reserve components to augment the Active Duty Force (ADF) presentscomplications for those members of the Guard and Reserves enrolled in college programs. The uncertainty associated with unit activations, lengthy activations, individual deactivations, and multiple unit activations makes utilization of educational benefits extremely difficult. Such decisions as whether to enroll for a semester, long-range planning for required courses, or whether to finish a semester are among the challenges confronted. Other factors include accrued student loan debt, falling behind peers in studies, and limbo status due solely to the military’s indecision. With the number of activations of the Reserve component since September 11, 2001, these same Reservists, who are attending colleges and universities around the country, are discovering that their actual graduation date may be extended well past their initial anticipated graduation date.

 

 

Witnesses testified that the current tax codes give wealthy fund managers an unfair tax loophole.

 

DR. Joseph Bankman, Ralph M. Parsons Professor of Law and Business, Stanford Law School: The lower rate of tax on fund managers would be justified by the importance of the work they do only if it could be shown that they perform more valuable work, relative to pay, than, say, surgeons, chief executive officers, or schoolteachers. No one has suggested this to be the case….

Everyone who testified in favor of capital gain treatment of carry… compared fund managers to entrepreneurs. One problem with this argument is that fund managers do not perform the same functions or face the same obstacles as entrepreneurs. An entrepreneur may work for years with little or no pay, betting her entire economic future on the success of her idea, invention or efforts. Fund managers perform intermediation and advisory services. They receive generous management fees and benefit from the performance of a portfolio of companies, the success of each of which is dependent on the inspiration and efforts of the entrepreneur…. 

[T]he capital gain preference here is being used to reduce taxes not on investment, but on the labor income of some of the most highly paid citizens in the nation. The primary efficiency rationale for low taxes on investment income—that it encourages savings over consumption—does not apply. In this case, the capital gain preference does simply serve as a reduction of tax on the wealthy….

 

Witnesses testified that the tax breaks for fund managers are inefficient or even harmful to the market. 

DR. Darryl Jones, Professor, Stetson University College of Law: [I]t is both unnecessary and unwise to provide a tax subsidy to her risk taking. The market will reward or punish her risk-taking as the case may be. When the market punishes risk, it disciplines investors to the benefit of society. Softening that potential punishment via a tax break encourages irrational risk-taking and ought to be tolerated only when there is a demonstrable societal benefit that is not otherwise provided via the market…. 

Thus, a tax subsidy – both via exemption or merely lower tax rates – was and is unnecessary because the rational hope of getting rich was sufficient to spur the behavior despite the lack of guarantee. 

…

DR. BANKMAN: In order for the current low rate to be efficient, it would have to be shown not just that fund managers will work less if the tax is increased, but that they are relatively more sensitive to tax than those in other occupations. As noted above, fund managers now pay tax at about half the maximum rate of doctors. This would be efficient (though still objectionable as unfair) only if it could be shown that doctors are relatively insensitive to tax, and so will continue to work notwithstanding the high rate, or that fund managers are extremely sensitive to tax, or that some combination of these two assumptions is true….

Reducing the taxes on persons who are hired by investors is an inefficient and expensive way of reducing taxes on investment. It is also completely unnecessary. If Congress wishes to reduce the tax rate on investment it can do so directly. 
 

 

Witnesses testified that the Foreign Service positions created by the Diplomatic Readiness Initiative to address shortages around the world have been redirected to Afghanistan and Iraq.

SEN. AKAKA: In 2002, following the tragic attacks of September 11th, 2001, former Secretary of State Colin Powell created the Diplomatic Readiness Initiative [DRI] to revitalize the Department and to bring in one thousand one hundred and fifty eight new skilled, committed, and well-trained foreign and civil service employees. Congress appropriated over one hundred million dollars for the DRI, which enabled State to hire 360 new employees and 1,700 new Foreign Service officers…. According to a report by the Foreign Affairs Council issued on June 1, 2007, between 2001 and 2005, 1,069 new positions and program funding increases were secured through the DRI. But since that time, all of these new positions have been redirected to assignments in Iraq, Afghanistan, and other hardship posts. Roughly 200 existing jobs remain unfilled and an additional nine hundred training slots necessary to provide language and other skills do not exist.

…

JESS FORD, DIRECTOR INTERNATIONAL AFFAIRS AND TRADE, GOVERNMENTACCOUNTABILITY OFFICE (GAO): From 2002 through 2004, the DRI enabled State to hire more than 1,000 employees above attrition to respond to emerging crises and allow staff time for critical job training. However, according to State officials, much of this increase was absorbed by the demand for personnel in Iraq and Afghanistan; and thus, the desired crises and training reserve was not achieved…. According to State officials, outside of the department’s consular program and worldwide security upgrade program, State has not received any additional authorized positions since 2004, and officials also told us that they now estimate State needs more than 1,000 new positions to support foreign language training needs and respond to rises and emerging priorities. 

…

AMBASSADOR THOMAS D. BOYATT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, FOREIGN AFFAIRS COUNCIL: During 2000-2004 Secretary Powell’s Diplomatic Readiness Initiative (DRI) gained over 1000 new positions/personnel and associated increases in support financing bringing the Service almost back to 1990 levels. Then, in the last two years the DRI increases have been vacuumed up by the requirements of Iraq, Afghanistanand other “difficult to fill” posts. We are right back to the low point of 1999-2000.

 

There is a severe shortage of Foreign Service Officers proficient in “superhard”languages.

MS. FORD: In our 2006 report, we compared the language proficiency of staff in all language-designated positions with the position’s requirements and our analysis showed that about 29 percent of all worldwide language-designated positions were filled by individuals who did not meet the position’s proficiency requirements. Language deficiencies exist worldwide but were among the greatest in the Middle East, where 37 percent of all language-designated positions were filled by staff without the language skills required of their positions. The skills gap was even greater at some critical posts – for example, 59 percent in Cairo, Egypt, and 60 percent in Sana’a, Yemen. In recent discussions with State officials, they told us these gaps have worsened since we reported on this issue in 2006…. Further analysis of Arabic and Chinese, two languages spoken in regions of strategic interest of the United States, showed that the percentage of staff did no meet language requirements for their positions varied by career tracks. For example, 100 percent of the staff filling positions in the management career track requiring Arabic and 89 percent of the staff filing positions in the management career track requiring Chinese did not meet the language requirements of their positions.

…

JOHN K. NALAND, PRESIDENT, AMERICANFOREIGN SERVICE ASSOCIATION: The truth is that, as a result of under staffing and under training, today’s Foreign Service does not have to a sufficient degree the knowledge, skills, and abilities that are needed for 21st Century U.S.diplomacy. The August 2006 GAO report focuses on gaps in language training. But the Foreign Service training shortfall is actually much broader…. With adequate resources, the State Department could sharply expand language training—especially hard languages in strategic regions such as Arabic and Chinese. For example, to ensure uninterrupted language capabilities at one-year Arabic posts such as Iraqand Saudi Arabia, three officers are required: one at post, one in the first year of language training, and one year in the second year of training.

…

AMBASSADOR BOYATT: The second reason that significant increases in personnel are vital is that the current situation does not permit adequate training, particularly in hard languages. The GAO report highlights the reality that State is not meeting existing foreign language requirements (in fact, GAO for over 30 years has reported the continuing shortage of language skills). Add to this deficit what will be needed in hard language and other functional training to achieve the goals of Secretary Rice’s“Transformational Diplomacy” and we calculate that 900 training slots are needed right now.

 

Americans are underrepresented at the United Nations and its specialized agencies.

SEN. AKAKA: Staffing at State is not the only problem we face in our ability to execute U.S.foreign policy. Despite the fact that the U.S. contributes the largest portion of the UN [United Nation’s] budget, Americans continue to be under represented at the United Nations and its specialized agencies. At my request, the GAO surveyed five UN organizations last year which comprise roughly 50 percent of total UN organizations’ professional staff. They found that three of them, the UNHCR [United Nation’s High Commissioner for Refugees], IAEA [International Atomic Energy Agency], UNESCO [United Nation’s Education, Science, and Cultural Organization], fell short of either formal or informal hiring targets agreed upon by the organizations and their member states which staffing levels for Americans and others. This means that, the U.S.is losing an opportunity to contribute important skills, perspectives, and experience to the UN. The September GAO report found that there are barriers keeping Americans from assuming positions at the UN. A critical finding in that report was that the State Department does not effectively support Americans who seek employment at these organizations and, when it does, tends to emphasize only director-level or higher posts.

…

JAMES B. WARLICK, PRINCIPAL DEPUTY ASSISTANT SECRETARTY, BUREAU OF INTERNATIONAL ORGANIZATIONS, DEPARTMENTOF STATE: A strong American presence in international organizations is in our nation’s best interests because it translates into influence and a greater likelihood of achieving our policy goals….As of the end of 2005, there were roughly 2,200 Americans serving in professional positions in the UN system, representing 8.2 percent of the professional work force. This is down from 2000 when Americans held 8.8 percent of the professional positions…. Many challenges are not primarily within the control of the United States—including restrictions on the number of positions open to external candidates, stiff competition from nationals of other countries, many of whom are multilingual, and limited job opportunities for spouses—a problem for many American families that are used to two incomes and spouses who want to work…. We acknowledge that more can be done to place American citizens in UN jobs and we welcome GAO’s report, issued in September 2006, on additional efforts needed to increase U.S.employees at UN agencies. We agree with each of the report’s recommendations and are in the process of implementing them

…

DEBORAH DERRICK, EXECUTIVE DIRECTOR, BETTER WORLD BANK CAMPAIGN: I believe that the under representation of Americans at the United Nations undermines the United States’global vision and its ability to conduct sound diplomacy in this key global institution. The UN is increasingly being asked to address the biggest problems in the world – from nuclear proliferation to global warming; from Darfur to Iraq. Having too few Americans in it ensures that the U.S.is operating at a disadvantage when it seeks to enact policies or reforms at the UN because it means that we do, and will, lack a cadre of experienced civil servants with solid insights in policy making within the UN. It forces the United Statesto use its biggest guns and the bluntest measures to get its way there –whether that is threatening to walk out of negotiations or standing alone in blocking budgets. In sum, the under representation of Americans within the UN system eliminates tools from the U.S.national security tool kit at a time when Americans are facing huge international security challenges.
  

 

Witnesses testified that the World Bank needs to downsize its bureaucracy and focus more on project development and oversight.

Daniel Tarullo, Professor of Law, GeorgetownUniversityLawCenter: I have been struck by the number of former Bank officials and staff – all committed to the Bank having a central role in promoting development – who believe that the Bank is too large to be effective. It has more than 10,000 employees, four times the number at the IMF. Despite some laudable recent steps to move more staff into the field, around 85 percent of these employees are based in Washington. The Bank has a lot of work, to be sure, but one invariably comes away with the impression that there are often just too many people in each meeting and on each project…. 

[T]he incentive structure for Bank employees still overvalues moving money (in the form of loans) out the door. If we want Bank staff to concentrate their energies on (a) what works and (b) the poorer countries with the greatest development needs, then they must be assured that their prospects for promotion will not be limited by spending time in a poor country carefully designing a project tailored to specific conditions in that country….

If there is agreement that the goal of the World Bank is to maximize the effectiveness of its lending and technical assistance activities in promoting development, then those activities should presumably be designed to maximize desired outcomes. If a project is designed to increase the availability of potable water, for example, then its success should be judged by how many additional people gain access to drinking water.

…

Adam Lerrick, Friends of Allan H. Meltzer Professor of Economics, Tepper School of Business, CarnegieMellonUniversity:We know that after 60 years and $600 billion, there is little to show for Bank efforts. Bank aid was not behind the impressive economic gains in China, India and Indonesiawhere all the progress in poverty reduction has been concentrated. We know that for two decades, the Bank continued to pour money into countries clearly unable to repay and concealed the truth by rolling over worthless loans with enough added to cover interest owed until the G-7 governments were forced to assume the debts and to make the Bank whole. We know that the Bank continues to tolerate corruption which, in Africaalone, has diverted between $100 and $500 billion into off-shore bank accounts. We know that the lack of effectiveness of Bank projects is startling. By the Bank’s own numbers, 59 percent of investment programs world-wide and 75 percent in Africafailed to achieve satisfactory sustainable results over the 1990-99 decade. There is a common thread. The overwhelming priority has been to ship off funds even when there is no deserving destination….

We want the answers to questions the Bank is afraid to ask. How many babies were vaccinated? How many miles of roads are functional? How many cubic meters of wastewater are treated? How many children can read? Transparency and accountability are close at hand on the internet. For every one of the 280 projects the Bank approves each year, there already exist detailed reports in electronic form ready to be delivered to a public website. Disclosure would not be a burden for the Bank. Exhaustive loan approvals set out objectives, technical specifications and estimated costs. Loan completion reports by lending officers are delivered to senior management. Complete audits on 25-30 percent of programs are executed by the internal evaluation group.

 

Witnesses testified that both the World Bank and the International Monetary Fund need to broaden the base of countries that influence policy and management.

DR.Tarullo: [A]ddtwo to four non-voting members to the Board [of the World Bank] in order to increase the involvement of smaller developing countries. If the Board gets itself out of the business of approving every loan and into the business of providing oversight and strategic direction, it will profit from additional recipient country voices on how to frame a set of effective policies and practices….

Quotas determine both the amount of capital that a member must pay in to the Fund and the voting rights that it will have in [International Monetary Fund] decision-making… [Q]uotas are symbolically important as an expression of a country’s economic standing and therefore…realignment of voting shares is central to preserving support of the Fund by all of its members and thereby to the Fund’s relevance and legitimacy in promoting global growth and economic and financial stability…. 

…

Karin Lissakers, Director, Revenue Watch Institute: The “convention” that Europe and the United Statesalone should decide the leadership of institutions with memberships of more than 180 countries each is an embarrassing anachronism. More importantly, it damages the effectiveness of the institutions and hurts the credibility of the West’s commitment to proper governance…. 

The other big – and related – change urgently needed is to redistribute quotas, voting shares and board seats to reflect global economic realities and to give the rapidly growing emerging market powerhouses like China, Korea, Brazil, Turkey, South Africathe influence and responsibilities in the global institutions commensurate with their economic standing.

 

Witnesses testified that the World Bank must be in the development business not the lending business.

Dr. Lerrick: While China buys a three-billion dollar stake in private equity giant Blackstone, with the expectation of a 25 percent annual return, the World Bank is busy lending to China at a five percent interest rate which does not even cover the Bank’s real cost of borrowing….While India’s corporate multinationals, many State-owned, acquire industrialized nation assets and invest in the developing world to fuel an economy exploding at ten percent per annum, the Bank has just doubled its annual lending to India to $3.8 billion, most at a zero interest rate that adds up to a built-in gift of $1.5 billion from industrialized nation taxpayers. In a country where foreign investment is massed on the doorstep, the Bank should not be subsidizing projects the government does not think worth financing at market rates.

While the world reached out at the Millennium to forgive the debt of 18 of the globe’s most impoverished economies, the Bank piled on another ten-billion dollars in net new loans, raising their Bank indebtedness by 50 percent....

At its very inception, the Bank was enjoined from competing with the private sector. Developing economies were to be nourished only until they had gained the financial credentials to attract private capital on their own. This was called “graduating”. But the Bank won’t let go. Eighty percent of loans flow to just 12 middle-income governments led by Turkey, Brazil, Mexico and China. If the Bank stopped lending tomorrow to its big borrowers, no one would notice. It provides only 3/10 of one percent of the funds sent by the private sector….

The Bank does not lend as it claims where the poor live. More than half of Bank loans since 2000 flowed to six upper middle-income nations where only ten per cent of the developing world lives---Turkey, Brazil, Mexico, Argentina, Colombia and Romaniaenjoy a per capita income of more than $8,000 on a purchasing power parity basis.  

 

Karl Rove, White House Deputy Chief of Staff, failed to appear before the Senate Judiciary Committee, even after being served a subpoena requiring him to do so.
 

SEN. LEAHY: Mr. Jennings, through his attorney, has informed the Committee he’ll refuse to answer questions falling within the President’s blanket claim of executive privilege… His appearance here today, though, does contrast with the failure to appear by Karl Rove, who was also served a subpoena to produce documents and testify today… Mr. Jennings’ appearance shows that the White House’s newly minted claim of immunity for White House employees is sham. It’s also sham this White House continues to act as though it’s above the law… The subpoenas authorized by this committee in connection with its investigation into the mass firings of U.S. Attorneys and the corrosion of federal law enforcement by White House political influence deserve respect and compliance.
 

For many months, I have sought the voluntary cooperation of the White House with our investigation. I sought voluntary cooperation; that’s been turned down. The President and his Counsel have conditioned any limited availability of information on their demand that whatever the White House provides initially must end the matter and the Senate Judiciary Committee must agree to stop its pursuit of the truth. They demand that the information they chose to provide be shared with a limited number of members of Congress, basically on their agenda, behind closed doors, not under oath and with no record of what the responses were. It’s all to me very clear that no matter what came out of those meetings, that’s the end of the matter and we have to agree there’ll be no follow-up. No member of Congress—Republican or Democratic—would agree to such a thing. And this matter is too important to the public’s trust in federal law enforcement to be left to a self-serving, one- time-only, secret interview on which there’s no follow-up…

…

SEN. DURBIN: [T]hank you, Mr. Jennings, for being here today. When I read your political resume, I see a very young man, 21, 22 years old, first involved in a Presidential campaign in Kentucky, then moving up through the ranks through a number of campaigns. At the ripe age of 29, you’ve had a lot of political experience under your belt and have reached, really, kind of, the height of the game, to be in the White House and in this political capacity. And I salute you for that, as I did Ms. Taylor. Our political parties are sustained by young, energetic, idealistic people like you, who work for people who’ve been around a lot longer. 

I first met Karl Rove 37 years ago. And he was about your age when you got started. And I’ve known his political ascent, and he’s now at the highest levels. And what I struggle with every time Karl Rove feeds another one of these young staffers into the Judiciary Committee is the obvious question: Where is Karl Rove? Why is he hiding? Why does he throw a young staffer like you into the line of fire while he hides behind the White House curtains?

 

Senators pointed out inconsistent assertions of executive privilege by White House officials. 

SEN. LEAHY: How can communications with the Justice Department, the Republican National Committee and others outside the White House be subject to executive privilege claims? How can White House employees like Karl Rove speak publicly about these matters one day in a political forum, but declare that he cannot in any way be accountable to the American people and the duly elected representatives in Congress in the same matter? Karl Rove, who refused to comply with Senate subpoenas, spoke publicly in sessions at Troy University in Alabama and at the Clinton School of Public Service in Arkansas about the U.S. Attorney firings when the scandal first became public. In March, he spoke about the reasons that were then being given for the firings of individual U.S. Attorneys; of course, reasons that have now been shown to be inaccurate, after-the-fact fabrications.
 

Yet[,] he doesn’t appear when he’s summoned before Congress to finally tell the truth. He refuses to tell this committee, with legislative oversight and advice-and-consent responsibility for the Department of Justice and the United Statesattorneys, about his role in targeting well-respected U.S. Attorneys for firing and then seeking to cover up his role and that of his staff in the scandal.

…

SEN. SCHUMER: According to Matt Friedrich, who was the Principal Deputy of the DOJ [Department of Justice] Criminal Division—and that’s who these gentlemen met with—Mr. Barnett and Rogers complained that David Iglesias in New Mexicowas not pursuing a voter fraud prosecution quickly enough for their taste. Friedrich also testified, quote, “It was clear to me that they did not want him to be the U.S. Attorney.” Now, can you confirm that after this White House meeting you set up a meeting for Messrs. Barnett and Rogers at DOJ? Can you confirm that?
 

SCOTT JENNINGS, WHITE HOUSE DEPUTY DIRECTOR OF POLITICAL AFFAIRS: Senator, pursuant to the President’s assertion of executive privilege, I must respectfully decline to answer that question.

SEN. SCHUMER: Sir, we have an e-mail that says you did. How can you—I mean, again, we are getting to be in Never Never Land here. The memo is not privileged, but your confirming what we all have read in the memo is privileged?

MR. JENNINGS: Senator, may I have one moment? 

SEN. SCHUMER: Yes.

MR. JENNINGS: Thank you. Senator, the President’s directive does not permit me to discuss at this time, so...

SCHUMER: Can you confirm that you wrote this e-mail?

JENNINGS: Yes.

SCHUMER: OK. Mr. Chairman, again, I just want to express my frustration with—it’s patently—you know, without any verifiable claim that once there is a memo that says something that the witness can’t confirm it. If the memo is privileged, then you can’t confirm it. If the memo is not privileged, then you can. 

And I think it shows what is going on here in the lack of desire of the White House to testify and to hide behind a false wall of privilege.

…

SEN. LEAHY: Since the 2004 election, did you speak with President Bush about replacing U.S. Attorneys?

MR. JENNINGS: Senator, pursuant to the President’s assertion of executive privilege, I must respectfully decline to answer your question at this time.

SEN. LEAHY: I’m not asking you what was said. Did you speak with him about these at all?

MR. JENNINGS: Senator, I understand and I’ve been...

SEN. LEAHY: Did you attend any meeting with the President since the 2004 election at which the removal and replacement of U.S. Attorneys was discussed?

MR. JENNINGS: Senator, pursuant to the President’s assertion of executive privilege, I must respectfully decline to answer your question.

SEN. LEAHY: Are you aware of any Presidential decision documents since the 2004 election in which President Bush decided to proceed with the replacement plan for U.S. Attorneys?

MR. JENNINGS: Senator, pursuant to the President’s assertion of executive privilege, I respectfully decline to answer at this time.

SEN. LEAHY: As special assistant to the President and Deputy Director of Political Affairs, what role do you have in the selection of nominees to be U.S. Attorneys?

MR. JENNINGS: Senator, I will decline to answer that question, pursuant to the President’s...

SEN. LEAHY: Whoa, whoa. Wait a minute. I’m just asking what role you have in the selection of nominees to be U.S. Attorneys. I’m just talking about what you do. Now, I mean, let’s not be too contemptuous of this Committee. I’m just asking you: What role do you have in the selection of nominees to be U.S. Attorneys? You work at the White House. You’re paid for by taxpayers. You work for the American people. I’m just asking what kind of work you do.

MR. JENNINGS: Sir, I understand. And based on my understanding of the letter I have from Mr. Fielding, this falls under the President’s assertion of executive privilege. And, therefore, I must respectfully decline to answer at this time.

SEN. LEAHY: It sounds to me like the American taxpayers are paying you to stonewall.

…
 

SEN. LEAHY: Let me give you a document here numbered OAG-1622. It’s a copy of a February 28th, 2007, e-mail from you to kr@georgewbush.com, White House Counsel Fred Fielding, Kevin Sullivan, Dana Perinoand Kyle Sampson. Are you familiar with that document?

MR. JENNINGS: Yes, Mr. Chairman.

SEN. LEAHY: Does this have the subject line, “NM USATTY Urgent Issue,” correct?

MR. JENNINGS: Yes, sir.

SEN. LEAHY: That’d be New Mexico U.S. Attorney urgent issue? Is that what it means?

MR. JENNINGS: Yes, sir.

SEN. LEAHY: And is kr@georgewbush.com, an RNC e-mail address for Karl Rove? …

JENNINGS: Yes, sir. As I understand it, it is, yes.

LEAHY: … Now, this e-mail describes a phone call you received from Senator Domenici’s chief of staff regarding David Iglesias’statement that two members of Congress contacted him before the election to urge him to bring indictments before the election. And one hung up on him angrily out of frustration over his answer. Is that correct?

MR. JENNINGS: Senator, I think discussion of this document is covered by the President’s assertion of executive privilege and I must respectfully decline to answer at this time.

LEAHY: We’ll put the document in the record. Was the information you received in this e-mail on February 28th of this year new to you?

JENNINGS: Senator, I’m going to have to decline to answer that question pursuant to the President’s assertion.

LEAHY: It’s interesting. Even if we do get documents, we’re told you can’t talk about the documents. This is—did you ever read “Catch-22” when you were younger?

 

MR. JENNINGS: I’m familiar with the phrase.

SEN. LEAHY: Did you read the book?

MR. JENNINGS: I did not. I have not. 
 

SEN. LEAHY: You might want to go back and read it. It’s very interesting…

 

Witnesses confirmed the use of Republican National Committee resources for official government activities.

 

SEN. LEAHY: Why did you send these e-mails setting up a conference call regarding Tim Griffin, later installed by the Attorney General as an interim U.S. Attorney to replace Bud Cummins in the Eastern District of Arkansas—why’d you send that from the RNC [Republican National Committee] mail account?

MR. JENNINGS: Senator, pursuant to the President’s assertion of executive privilege over consideration, deliberations or communications related to the U.S. Attorneys matter, I must respectfully decline to answer your question at this time.

SEN. LEAHY: That’s, sort of, a new way of taking the Fifth. But let me ask you this: This is not—I’m not asking about something where you communicated with the President. This is a Republican National Committee e-mail. I’m asking you why—not what you said or anything else—but why did you use this?

 

MR. JENNINGS: May I have a moment, Senator, to confer?
 

SEN. LEAHY: Of course, confer with your attorney.

MR. JENNINGS: I understand your question, Senator. I apologize. I want to answer it. I think it might be helpful to give...

SEN. LEAHY: Thought you might. Go ahead.

MR. JENNINGS: Yes, sir. I think it might be helpful to give a little context about the use of the e-mail accounts. I came to the White House, as you said, in 2005. And when I came I was given two e-mail accounts, as you know, and devices such as a BlackBerry and a laptop that were connected to my RNC e-mail account and only one device—a computer desktop—connected to my official account. So over the course of time, it became efficient and crucial for me to be able to respond to communications in a 24/7 manner.

SEN. LEAHY: But here we’re talking about official business that’s regarding Tim Griffin, later installed by the Attorney General as interim U.S. Attorney, replacing another U.S. Attorney. Why would you use a Republican National Committee account rather than your official account? Wouldn’t this be official business?

MR. JENNINGS: Senator, I understand your question. I would also like to say that it’s my understanding that out of an abundance of caution and to avoid possible Hatch Act violations, that’s why we were issued these accounts. And over the course of time...

SEN. LEAHY: Do you feel this was a Hatch Act violation, setting up this kind of a meeting?

MR. JENNINGS: No, sir.

SEN. LEAHY: Then why’d you use it?

MR. JENNINGS: As I said, Senator, I would like to give some context about the e-mail accounts. Over the course of time, the use of the Republican National Committee e-mail account became a matter of convenience and efficiency because I had access to it 24 hours a day, seven days a week, unlike my other e-mail account. And so...

 

…People knew they could reach me at any time, not just when I happened to be sitting at my desk, which some days is infrequent. So it became a default e-mail account, and we used it a lot, and I would submit that we were using it out of the interest of being efficient and responsive in our job duties. [Infra (excerpt from exchange with Senator Specter.]
 

SEN. LEAHY: Were there other occasions on which you used an RNC e- mail account in connection with the development of plans to replace U.S. Attorneys or the implementation of these plans or even the explanation of these plans? …
 

MR. JENNINGS: Senator, I use my RNC account for many matters, including that.

 

 

Witnesses testified that abuse by credit repair organizations (CROs) hurts both consumers and creditors. 

Joanne S. Faulkner, esq., on behalf ofNational Association of Consumer Advocates National Consumer Law Center (for its low income clients), U.S. PIRG, and Consumer Federation of America:“As Americans’ reliance on credit has increased, so-called ‘credit repair clinics‘ have emerged, preying on individuals desperate to improve their credit records. These organizations typically promise they can have any negative information removed permanently from any credit report . . . for a fee. FTC v. Gill, 265 F.3d 944, 947 (9th Cir. 2001) (sanctions against lawyer operating credit repair clinic in violation of CROA)…

CROs are designed to undermine accurate credit reporting. Despite the CROA, the CROs have established elaborate ruses to intentionally profit from obtaining payment before credit repair services are fully performed. Some intentionally solicit consumers on the representation that a law firm is involved, and that consumers will benefit by being represented by a law firm. CROs intentionally and systematically deceive credit bureaus about the source and nature of the dispute correspondence, and intentionally deceive consumers before and during the course of their representation…

The CROs‘ volume of mailings to the credit bureaus causes harm to the credit reporting system because of the resources of bureau staff and time devoted to responding to the volume of letters generated by CROs, as well as the dislocation of bureau efforts from the disputes of individuals who have legitimate accuracy complaints, such as victims of identity theft or of mixed files (similar names). The volume and spurious nature of the disputes sent by CROs intentionally interferes with the credit bureaus’ business of providing accurate reports. These practices ultimately cause creditors to extend credit in reliance on credit bureau reports that are not accurate because the CROs‘ dispute volume is intended to force bureaus to delete tradelines that they cannot investigate within thirty days. The CROs‘systematic deception of the credit bureaus and of consumers undermines the banking system and harms consumers and creditors alike…

[C]redit repair efforts most often end up in failure. But this failure is at a cost to our members and to consumers. Consumers spend money on a service that cannot deliver. Industry incurs costs as well when it has to dedicate resources which could be used to service legitimate disputes, to disputes that are not likely to be valid. Thus, consumers and credit bureaus alike are eager to strengthen the CROA.

 

National consumer-protection groups have asked Congress to strengthen CROA to better shield consumers and creditors from aggressive fraudulent practices by some credit repair organizations. 

Ms. Faulkner: Enforcing the CROA is frustrating, not because of what has been enacted, but because the targets of the law have devised methods of evasion. While the Federal Trade Commission has enforcement power, it does not have the resources to address the burgeoning and emboldened number of entities that prey on already financially overburdened consumers with false promises of credit repair. The law desperately needs to be strengthened to prevent evasive tactics. If Congress considers watering down the Act by exempting credit monitoring services, the exemption will simply provide a roadmap that will be exploited by those seeking to avoid CROA’sprotections against deceptive practices... CROA … needs:

1. An express prohibition on pre-dispute arbitration clauses, commonly inserted by credit repair organizations (CROs) both to insulate them from liability as well as to keep their deceptive practices out of the public eye and under the rug…

5. A prohibition on any contract provision that prevents class actions, particularly important here because an individual’s damages may not be sufficient to interest competent attorney representation.

6. An amendment to S.1679b(4) of the CROA to effectuate the intent of Congress to bar unfair and deceptive practices. Because the word “fraud“ is used in that subsection only, some courts are demanding a higher burden of proof and pleading than normally imposed for unfair or deceptive practices.

7. A provision preventing CROAsfrom evading S.1679b(b) by charging for discrete services “set up file“;“monthly report on progress“ and the like.

8. Non-profits should not be exempt. CROs have set up elaborate structures whereby the consumer contracts with a non-profit “educational“ entity but that entity outsources books and services to profit-making friends, relatives and associates.
 

Witnesses testified that telemarketing fraud disproportionably hurts America’s seniors.
 

Richard Johnson, Member, Board of Directors, AARP: Despite the success of the Registry, and the requirement that telemarketers review their lists against the DNCR [Don Not Call Registry] every month, telemarketing fraud- in particular, fraud targeting older Americans - remains a major problem. Thieves continue to evade the law to commit fraud that can potentially wipe out the lifetime savings of unsuspecting older Americans. According to the National Consumer League, 50 percent of telemarketing fraud victims were 50 or older and 32 percent were 60 or older. At the other end of the spectrum, people under 30 represented just 15 percent of all telemarketing fraud reports, and those under 20 just one percent. The NCL statistics also show that 46 percent of thieves initially target people by phone, suggesting that even in the age of the Internet, telemarketing fraud remains a significant problem. AARP research sheds light on part of the reason that seniors are targeted in telemarketing fraud schemes: most older victims do not realize that the voice on the phone could belong to someone who is trying to steal their money. In 2005, the average reported loss for telemarketing fraud was $2,892. The Federal Trade Commission estimates that consumers lose $40 billion a year in telemarketing fraud, and the FBI estimates that there are 14,000 illegal telephone sales operations active each day. But behind the statistics are real people who are scammed - sometimes out of their entire life savings.
 

The“Do Not Call” Registry (DNCR) has been overwhelming successful in reducing the numbers of unwanted telemarketing calls, but loopholes still exist in the law.
 

Lydia Parnes, Director, Bureau of Consumer Protection Federal Trade Commission: The National Registry is a comprehensive, automated system used by consumers, telemarketers, and law enforcement agencies. The Registry was built to accomplish four primary tasks:
 

(1) To allow consumers to register their preferences not to receive telemarketing calls at registered telephone numbers;
 

(2) To allow telemarketers and sellers to access the telephone numbers included in the National Registry and to pay the appropriate fees for such access;
 

(3) To gather consumer complaint information concerning alleged do not call violations automatically over the telephone and the Internet; and
 

(4) To allow FTC, state, and other law enforcement personnel access to consumer registration information, telemarketer access information, and complaint information maintained in the Registry.
 

Consumers can register their telephone numbers through two methods: by calling a toll-free [sic] number from the telephone number they wish to register, or over the Internet. The process is fully automated, takes only a few minutes, and requires consumers to provide minimal personally identifying information.
 

MR. JOHNSON: AARP‘s members are among the millions of Americans who have taken the initiative to place their phone numbers (over 132 million as of 2006) into the DNCR in an effort to reduce the number of unwanted telemarketing calls. Survey results show that the Registry has been very successful from the consumer standpoint. A December 2005 Harris Interactive survey found that 76 percent of respondents had signed up for the Registry, and 92 percent of them had received fewer telemarketing calls…

Notwithstanding the success of the DNCR, consumers still believe they receive too many telemarketing calls. For example, in a 2005 study conducted by AARP, 62 percent of respondents with telephone numbers registered with the DNCR indicated that they still received more telemarketing calls than they would like. In order to make the DNCR an even bigger success for consumers, the FTC should adopt additional rules to further decrease the number of telemarketing calls.
 

AARP is pleased that the FTC is considering changes in two areas that could help achieve this outcome: (1) prohibiting all unsolicited prerecorded telemarketing calls, including those from sellers to established business customers, and (2) retaining and strengthening call abandonment measures.

 

 

Senators and witnesses expressed concern about the Administration’s willingness to address global climate change.

SEN. INOUYE: [W]e have read the Intergovernmental Panel on Climate Change’s conclusions that human activities are influencing our planet’s climate. Scientists agree and have testified that we cannot defer any longer, and the time to act is now. But your department finds it difficult to address this fact, that critical weather and climate sensors have been eliminated from the next generation Polar-orbiting Operational Environmental Satellites. We’d like to help you on this.

…

SEN. BOXER: Last Friday [,] I flew to Greenland with nine other members of the United States Senate. It was a bipartisan delegation. And we went to see with our own eyes what the impacts are of global warming on some of our highly vulnerable Arctic areas and people. [W]e learned … that the warming of the Earth is having an effect on the massive Greenland ice sheet, which holds ten percent of the world’s fresh water, and which could raise sea levels by 23 feet, if it were to melt entirely. To put that into context, my understanding is that in Katrina, in some places, there was a 20-foot rise. So, you can see, just from Greenland, what this could mean. We saw, up close and personal, the effect of warming on the ice sheet and the acceleration in melting that has happened in recent years. …
 

Senators stated that it is imperative that the Bush Administration not mix politics with science.
 

SEN. BOXER: It’s essential that scientists be free from political interference and allowed to present their research to the public, whatever their views, so that the true facts about global warming are known. I was deeply disturbed by reports from earlier this year that the administration was interfering with the ability of NOAA [National Oceanic and Atmospheric Administration] and NASA scientists to present the results of their research to the public.
 

To me, any kind of muzzling of people—who we pay, the taxpayers pay their money to find out what they think—any kind of muzzling, whether direct or indirect, is unacceptable, I believe, to all of us on this committee, regardless of our political party.
 

NOAA scientists are among the best in the world. And we need to make sure they have the right tools to monitor our planet, watch our weather, protect our oceans and give us unbiased opinions.

…

SEN. KLOBUCHAR: … I think it was around the spring of 2006, when some of the NOAA scientists described repeated instances in which the administration had played down the threat of climate change in their documents and news releases. Can you comment on the concerns? And have you talked to these scientists? Just because we’re entering the rest of the year here … and I hope we’re going to be passing, some significant climate change legislation. And I have been concerned about those scientists being muzzled, and wondered what the follow-up is from what I have here, the April 6, 2006, “Washington Post” article where employees had talked about being chastised for speaking on policy questions, removal of references to global warming from reports, and other things.
 

SECRETARY OF COMMERCE, CARLOS GUTIERREZ: [W]e have a policy that allows scientists to communicate research, scientific research. We encourage them to use the help of a public affairs expert, but it is not required. Where we do require public affairs oversight is when it’s a policy question—not a scientific question, but a policy question. And if there is a disagreement on that, the scientist has the ability to appeal. So, we have a pretty, I would say a pretty progressive policy.
 

There have been incidences where we’re putting together a packet of information and there is a disagreement as to what should go into the packet of information. But that should not be taken as a sign that we are preventing the scientists from communicating. They have the ability, the right to go out and communicate scientific research as often as they want. That is a new policy, because it hadn’t been updated since the 1980s. But that’s the policy today in the...
 

SEN. KLOBUCHAR: So, a new policy went into place after this came out?

SEC. GUTIERREZ: Yes. We reviewed the policy. And we realized that our policy needed to be reviewed. 

Senators Stated that the Department of Commerce must also be armed with the tools needed to fight global warming.

SEN. BOXER: We are at a crucial time in our history. Global warming is the greatest challenge, in my opinion, faced by mankind. And we’re just beginning to understand the full effect it’s having on our planet. Satellites are essential for that task. So, my first message to you, sir, is please help us. Loss of satellites and sensing systems threaten to blind us—blind us—just at a time that we need the clearest vision.
 

One of the key points that was made by the IPCC, which was co- authored by NOAA scientist, Susan Solomon, was that we can expect increased intensity of hurricanes from future global warming… And the NOAA satellites are absolutely essential in monitoring weather patterns and tracking dangerous hurricanes…
 

So, you, sir, are on the front lines of fighting global warming. It’s essential that you have all the tools that you need.
 

TheU.S.has gone from a $128 billion surplus when President Bush took office to our present $240 billion deficit.
 

SEN. BOXER: … Mr. Secretary, you started off, you were saying about how great the economy is, the deficit and so. What’s the deficit now? …

SEC. GUTIERREZ: ... $240 billion, if you want dollars…But I believe it’s a trap to look at dollars.

SEN. BOXER: I totally get it.

SEC. GUTIERREZ: OK.

SEN. BOXER: That’s not my question...

SEN. BOXER: … Now, when the Bush administration took over, what was the deficit?

SEC. GUTIERREZ: The deficit climbed to about 4.1 percent of GDP [Gross Domestic Product].

SEN. BOXER: No, no. What was the yearly deficit? … The Budget Committee tells me $128 billion surplus.

SEC. GUTIERREZ: Right.

SEN. BOXER: OK. So, you now have a $240 billion deficit. It was [a $]128 surplus. So, I think when you talk about this, you should put it in context.
 

Democratic Senators demanded that the President appoint a permanent Inspector General for the Department of Commerce immediately.

SEN. MCCASKILL: I am concerned about the fact that you don’t have an I.G. [Inspector General] Have you sent a letter to the President requesting that an I.G. be appointed immediately?

SEC. GUTIERREZ: We have—yes, we have started that process. We’re going through that process. I have met a couple of candidates. Yes, I am very concerned, as well.

SEN. MCCASKILL: Are you aware that the deputy I.G. that is there, there are allegations that he was also involved in the retaliation that became such a controversy? In fact, really, your I.G. department has been a source of a management problem, I would assume for you, for some period of time now.

SEN. GUTIERREZ: I’m aware of the problems in the I.G. office, and we are paying very close attention, because, as you well know—and I can see that you understand—the politics and the tension and the human interaction that takes place in a place like that where you have those sorts of problems. So, yes, this is a big priority for us.

SEN. MCCASKILL: Well, I would appreciate being in the loop on the progress that you’re making there. I think it’s essential that you have a full-time I.G. on board as quickly as possible… 

[Also,] I have legislation that would mandate this, but this ought to be something we shouldn’t have to mandate—that you would put the I.G.’s homepage, the I.G.’slink on your homepage. I think any citizen who goes to an agency of the federal government ought to be able to immediately find the reports that have been done that are expensive to do, take a lot of man-hours to do. They ought to be easily accessible to the public. And I would appreciate your consideration of putting the I.G.’s website (sic) … link … on your homepage.

 

Senators identified ongoing abuse of taxpayer dollars at the Department of Commerce. 

SEN. MCCASKILL: As we talk about the I.G. and looking at some of the I.G. reports that Mr. Frazier did—and understanding that he left under a cloud, but some of his work remains—I’m curious about one that caught my eye. And I know this is like kind of majoring in the minors, but it’s one of those things that perception is very important. 

In 2002, he had a finding about the inability of the Commerce Department to monitor first class plane travel. Do you have the ability to communicate with all of your employees by e-mail? 

SEC. GUTIERREZ: Yes.

SEN. MCCASKILL: Would you mind in the next week putting out an e-mail that no one in Commerce should be taking a first class plane flight unless the limited exceptions under the federal travel regulations are observed? Because there was a finding back in 2002 that there was a lot of premium air flights taking place... 

I mean, this is pretty simple. You know, government should not be paying for first class plane tickets for people who work for the government, except under limited circumstances, where there’s not a coach (sic) class flight available, where it’s more than 14 hours, or where there’s a disability.

This is not rocket science. And you’ve got a lot of stuff you’ve got to manage that is close to rocket science. This to me seems pretty simple and straightforward. 

Would you mind doing that? 

SEC. GUTIERREZ: I will do that... and I will see if we’ve had any problems recently. 

SEN. MCCASKILL: Well, it’s in the report for March 2007 … that in 2002 they found that the guidelines were not being followed. And they went back to check, and it’s [still] no better…[W]ell, I shouldn’t say it’s no better, but the problem still exists. They did a sample of 74 travel[s] and found out [that] … only three [first class travels] … [were] under appropriate circumstances. I mean, I know it may be shooting fish in a barrel, but to me it’s...

SEC. GUTIERREZ: No, I agree. I agree.

SEN. MCCASKILL: It’s something that the people don’t get, and frankly, I don’t get. And if you would fix that simple problem, I would greatly appreciate it.

 

Senators challenged the Commerce Department to better invest in the innovation and research. 

SEN. KLOBUCHAR: We’ve had some great hearings in the Commerce Committee over the last few months. And one of them you’ve touched on, which is competitiveness.
 

And we had a number of Nobel Prize winners from the United Stateshere, and they talked about their concerns about innovation and about research. And they talked about how we have these great laboratories that used to be supported by AT&T and General Electric, IBM, and that these laboratories really no longer exist. And the funding has been so depleted that we really don’t have the research powerhouses that we once had. And at the same time, we’re competing on the world stage with other countries that are putting more money into research.

Do you believe that the government-supported laboratories we have now, like the National Institute of Standards and Technology laboratories, can serve as a replacement? And do you think we need to do more?
 

SEC. GUTIERREZ: Well … it’s a great question[;] I appreciate that[.] [U]nderthe President’s American Competitiveness Initiative, we have requested $136 billion over ten years for research, primarily in energy, NIST and the National Science Foundation. I believe we have a system that works. And the system is not just the U.S.government system, because we do about a third of all R&D in the country. And what we tend to do is mostly research, and the private sector does the development. And I think what makes our system so effective is that the research that the government does works very much hand-in-hand with the development that the private sector does and some of the research and development that takes place in universities. So, I think it’s a very good system, but we have to—you know, obviously, as you say, the world is getting more competitive—we need to ensure that our system is always getting better.

SEN. KLOBUCHAR: All right. And I’d just refer you to the testimony we had from the Nobel Prize winners, just because they were concerned, and not only about the research, but also about the education levels. 

Of course, we just passed the America COMPETES Actand are trying to focus more on math and science. But I think it’s something, when you look at the number of degrees coming out of other countries, that we should be watching out for.

DPC