[Senate Hearing 107-]
[From the U.S. Government Publishing Office]
S. Hrg. 107- 585
NOMINATIONS OF: SHEILA C. BAIR
MARK B. McCLELLAN, MELODY H. FENNEL
MICHAEL M.F. LIU, HENRIETTA HOLSMAN FORE
LINDA MYSLIWY CONLIN & MICHAEL J. GARCIA
=======================================================================
HEARINGS
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ON
NOMINATIONS OF:
SHEILA C. BAIR, OF KANSAS, TO BE ASSISTANT SECRETARY OF THE
TREASURY FOR FINANCIAL INSTITUTIONS
__________
MARK B. MCCLELLAN, OF CALIFORNIA, TO BE A MEMBER OF THE
COUNCIL OF ECONOMIC ADVISERS
__________
MELODY H. FENNEL, OF VIRGINIA, TO BE ASSISTANT SECRETARY
FOR CONGRESSIONAL AND INTERGOVERNMENTAL RELATIONS
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
__________
MICHAEL MINORU FAWN LIU, OF ILLINOIS, TO BE
ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
__________
HENRIETTA HOLSMAN FORE, OF NEVADA, TO BE DIRECTOR OF THE U.S. MINT
__________
LINDA MYSLIWY CONLIN, OF NEW JERSEY, TO BE ASSISTANT
SECRETARY OF COMMERCE FOR TRADE DEVELOPMENT
__________
MICHAEL J. GARCIA, OF NEW YORK, TO BE ASSISTANT SECRETARY OF
COMMERCE FOR EXPORT ENFORCEMENT
__________
JULY 12 AND 26, 2001
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
80-951 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2002
____________________________________________________________________________
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
PAUL S. SARBANES, Maryland, Chairman
CHRISTOPHER J. DODD, Connecticut PHIL GRAMM, Texas
JOHN F. KERRY, Massachusetts RICHARD C. SHELBY, Alabama
TIM JOHNSON, South Dakota ROBERT F. BENNETT, Utah
JACK REED, Rhode Island WAYNE ALLARD, Colorado
CHARLES E. SCHUMER, New York MICHAEL B. ENZI, Wyoming
EVAN BAYH, Indiana CHUCK HAGEL, Nebraska
JOHN EDWARDS, North Carolina RICK SANTORUM, Pennsylvania
ZELL MILLER, Georgia JIM BUNNING, Kentucky
MIKE CRAPO, Idaho
DON NICKLES, Oklahoma
Steven B. Harris, Staff Director and Chief Counsel
Wayne A. Abernathy, Republican Staff Director
Martin J. Gruenberg, Senior Counsel
Jonathan Miller, Professional Staff
Erin Hansen, Legislative Assistant
Jennifer Fogel-Bublick, Counsel
Brian J. Gross, Republican Deputy Staff Director and Counsel
Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
George E. Whittle, Editor
(ii)
C O N T E N T S
----------
THURSDAY, JULY 12, 2001
Page
Opening statement of Chairman Sarbanes........................... 1
Opening statements, comments, or prepared statements of:
Senator Dodd................................................. 4
Senator Enzi................................................. 5
Senator Stabenow............................................. 5
Senator Gramm................................................ 10
Senator Miller............................................... 11
Senator Carper............................................... 11
Senator Ensign............................................... 14
Senator Bennett.............................................. 16
WITNESS
Pat Roberts, a U.S. Senator from the State of Kansas............. 2
NOMINEES
Sheila C. Bair, of Kansas, to be Assistant Secretary of the
Treasury for Financial Institutions............................ 6
Prepared statement........................................... 19
Biographical sketch of nominee............................... 20
Mark B. McClellan, of California, to be a Member of the Council
of Economic Advisers........................................... 7
Biographical sketch of nominee............................... 28
Additional Material Supplied for the Record
Letter to Senator Paul S. Sarbanes from former Senator Bob Dole
in support of Sheila C. Bair, dated July 11, 2001.............. 39
----------
THURSDAY, JULY 26, 2001
Opening statement of Chairman Sarbanes........................... 41
Opening statements, comments, or prepared statements of:
Senator Akaka................................................ 43
Senator Reed................................................. 44
Senator Allard............................................... 48
Senator Corzine.............................................. 50
Senator Ensign............................................... 63
WITNESS
Kay Bailey Hutchison, a U.S. Senator from the State of Texas..... 46
NOMINEES
Melody H. Fennel, of Virginia, to be Assistant Secretary for
Congressional and Intergovernmental Relations, U.S. Department
of Housing and Urban Development............................... 45
Prepared statement........................................... 63
Biographical sketch of nominee............................... 64
Michael Minoru Fawn Liu, of Illinois, to be Assistant Secretary
for Public and Indian Housing, U.S. Department of Housing and
Urban Development.............................................. 46
Prepared statement........................................... 69
Biographical sketch of nominee............................... 70
Henrietta Holsman Fore, of Nevada, to be Director of the U.S.
Mint........................................................... 54
Prepared statement........................................... 78
Biographical sketch of nominee............................... 79
Linda Mysliwy Conlin, of New Jersey, to be Assistant Secretary of
Commerce for Trade Development................................. 55
Prepared statement........................................... 87
Biographical sketch of nominee............................... 89
Response to written questions of Senator Reed................ 105
Michael J. Garcia, of New York, to be Assistant Secretary of
Commerce for Export Enforcement................................ 56
Prepared statement........................................... 95
Biographical sketch of nominee............................... 96
NOMINATIONS OF:
SHEILA C. BAIR, OF KANSAS
TO BE ASSISTANT SECRETARY OF THE
TREASURY FOR FINANCIAL INSTITUTIONS
AND
MARK B. McCLELLAN, OF CALIFORNIA
TO BE A MEMBER OF THE
COUNCIL OF ECONOMIC ADVISERS
----------
THURSDAY, JULY 12, 2001
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10:05 a.m., in room SD-538 of the
Dirksen Senate Office Building, Senator Paul S. Sarbanes
(Chairman of the Committee) presiding.
OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES
Chairman Sarbanes. Let me call our hearing to order.
The Committee has two items of business. First, we have
five nominees that we want to report out to the floor of the
Senate. And once we have a quorum here, we will proceed to do
that. We are in the process of trying to gather a quorum and at
the appropriate time, I will make a motion with respect to
those nominees.
Second, we are going to begin our hearing this morning on
the additional nominations submitted by the President to the
Senate. Sheila Bair, to be the Assistant Secretary for
Financial Institutions in the Department of the Treasury; and
Mark McClellan, to be a Member of the Council of Economic
Advisers.
Before turning to that, I just want to take a moment to
welcome Senator Akaka to the Committee. We are very pleased
that he has come aboard as a Member of this Committee. He has
been a very distinguished Member of the Senate since 1990, and
I know he has had an interest in this Committee for some time
and we are very pleased, Dan, that you are joining us.
Welcome to the Committee.
I think before I make a statement, I would simply turn to
our colleague, Senator Roberts, who is here. I know he has some
other commitments and he wants to make an introduction.
Pat, we would be happy to receive your introduction at this
point.
STATEMENT OF PAT ROBERTS
A U.S. SENATOR FROM THE STATE OF KANSAS
Senator Roberts. Thank you, Mr. Chairman.
There is no other more important commitment that I have
than to be supportive and give testimony on behalf of my very
good friend and our nominee from Kansas, Sheila Bair.
Mr. Chairman, I am a poor but very proud substitute for
Senator Bob Dole, who is recuperating from surgery and doing
fine, thank you. I know that you will have some statements to
read from Bob's statement of support for Sheila as well.
Therefore, it is my very great pleasure to speak on behalf
of the nomination as Assistant Secretary of the Treasury for
Financial Institutions, Sheila Bair.
Sheila is a native Kansan. She, along with her mentor, and
mine, and I am speaking of Senator Dole, we think represent the
values of our home State. And those values are a strong work
ethic, which she certainly has, and a commitment to common
sense. We think her nomination really continues the Kansas
tradition of offering outstanding individuals to serve our
Government.
Many in Bob's office have certainly gone on to do that and
they have served all the Federal agencies and our country well.
Her career path is an ideal one for the position for which
she is nominated. She has a strong background in Government
service and an impressive resume in the financial services
industry.
After earning a law degree from the University of Kansas,
home of the fighting and optimistic Jayhawks, Sheila began her
civil service career as an attorney for the then-Department of
Health, Education and Welfare, now H2S. She later served as
Counsel to Senator Dole and as Commissioner for the Commodity
Futures Trading Commission. She did that job very well.
As Senior Vice President for Government Relations at the
New York Stock Exchange, Ms. Bair gained valuable experience
and understanding of our country's financial markets.
As Assistant Secretary, we think that she will oversee
policy development, as well as the coordination of the
Treasury's legislative and regulatory issues for our country's
financial institutions and the Federal agencies that certainly
regulate them.
We believe her wealth of experience in both Government and
the financial services industry makes her an excellent choice.
She has been a regulator. She has been a policymaker and a
member of the financial services industry.
Sheila has written extensively on financial, regulatory,
and policy issues and she understands the complexities of our
country's monetary system, as well as the challenges of
Government service.
So as we continue the implementation of what we call the
Gramm-Leach-Bliley and examine the issues such as financial
privacy and deposit insurance reform, it is critical, Mr.
Chairman, to have individuals like Sheila who can help develop
and implement the policies for our financial institutions and
our regulatory agencies that reflect the intent of Congress.
I am pleased to recommend her, a fellow Kansan, a friend,
as the Assistant Secretary of the Treasury for Financial
Institutions.
Sheila, I wish you the best. I encourage a speedy
confirmation, Mr. Chairman, of her nomination, and Bob and I
stand in full support of the nomination. I appreciate so much
the privilege and honor of being here.
Thank you, Mr. Chairman.
Chairman Sarbanes. Thank you very much, Senator Roberts. We
appreciate your coming and your statement. You certainly may be
excused because I know you have other commitments.
Following up on Senator Roberts' statement, I have received
a letter from Bob Dole indicating his regrets that he was not
actually able to be with us, although he is doing fine, I
understand. He submitted a statement which I will have included
in the record.
Without objection, it is so ordered.
I will just quote a couple of paragraphs from it:
In Sheila Bair, the President has chosen a talented and
dedicated individual, someone well-suited to lead the operation
and regulation of financial institutions, and the promotion of
consumer access and protection in financial services. I am
proud to offer my strong support for this nomination.
And later on, our former colleague says:
As I am sure many of you can recall, she was an
irreplaceable member of my staff, someone who I had every
confidence in, who I counted on for advice and analysis, and
she never failed me in this role.
For the sake of time, I will not go on and quote the
balance of it, but it is, as one can assume, a very laudatory
statement and we will include that in the record.
Let me just say at the outset that we are very pleased to
have these two nominees before us, one for a very important
position in the Treasury and the other to help round out the
membership of the Council of Economic Advisers.
Pat Roberts has given a lot of the resume of Sheila Bair,
but let me say that she has devoted a good deal of her
professional career to Federal Government service and the other
part of it, in a sense, working in the financial services
industry.
She was an attorney in the Department of Health, Education
and Welfare, the Department of Education. She worked with Bob
Dole on his Senate staff, as Counsel in the Senate Judiciary
Committee, later as Deputy Counsel to the Majority Leader.
Then, as one might anticipate, she worked on the Dole For
President campaign.
From 1991 to 1995, she served as a Commissioner on the
Commodities Future Trading Commission, including a period as
Acting Chairman.
From 1995 on, she has worked at the New York Stock
Exchange, first as Senior Vice President for Government
Regulations and currently, as a Consultant to the Chairman of
the Stock Exchange, Dick Grasso.
She has been active in a number of professional groups--the
American Bar Association, the Economic Club, Women in Housing
and Finance, on the Board of the National Women's Law Center,
and the Kansas University School of Law.
She has written extensively on a number of matters in the
financial field, including derivative products and their
regulation.
The position to which she has been nominated, of course,
plays a vital role in making quality financial services
available to all Americans and strengthening the financial
service systems.
She brings a very distinguished and varied background to
this nomination. As Senator Roberts has indicated, she is well
known and respected by Members, I think, on both sides of the
aisle.
Mr. McClellan has an exceptional background for nomination
as a Member of the Council of Economic Advisers. He received an
undergraduate degree from the University of Texas--a lot of
Texas flavor to these nominees that are coming through here
nowadays.
[Laughter.]
Senator Dodd. We have never seen that before.
Chairman Sarbanes. No.
[Laughter.]
A Master's of Public Affairs from Harvard in 1992; a
medical degree from Harvard in 1992; and, a Ph.D. in Economics
from MIT in 1993. So, Mr. McClellan comes with both medical
credentials and economic credentials.
He was a Research Associate at Harvard Medical School's
Department of Health Care Policy from 1991 to 1995. And since
then, he has been at Stanford University as a Professor in the
Department of Economics and in the Department of Medicine.
Actually, he took a leave from Stanford in 1998 and 1999,
to serve as Deputy Assistant Secretary for Economic Policy at
the Treasury Department.
As one would expect, he has written extensively on the
economics of health care, which I gather will be a prime
responsibility of his at the Council of Economic Advisers.
So, I am pleased to welcome both of these nominees before
us this morning. And before I turn to them, I will yield if
there are any other Members of the Committee who would like to
make a statement.
Senator Dodd.
COMMENTS OF SENATOR CHRISTOPHER J. DODD
Senator Dodd. Mr. Chairman, very, very briefly. First of
all, our congratulations to the nominees before us this
morning. But I wanted to commend you, Mr. Chairman. I note that
after we get a quorum here, we have five nominees who will be
voted on later this morning. And the two nominees here, the
pace at which we are moving, I know that Chairman Sarbanes
subscribes to the notion that the Executive Branch ought to
have its personnel in place.
As a matter of fact, all of us do here.
I know there has been some press recently about the pace of
the confirmation process. Occasionally, there are nominations
that cause some difficulties. That is not the case, obviously,
with our two nominees here, nor the ones we will be voting on
later this morning. We are going to move as quickly as we can.
I just commend you, Mr. Chairman, for the pace and the time
of all of this. I know that all of us on the Committee are
anxious to be here and to support you in that effort to get
these nominations through and to see to it that the
Administration has the people that they need to have in place
in order to get the job done. So, I wanted to make that point,
if I could, to you.
Chairman Sarbanes. Well, I appreciate that very much. I
might ask the staff if they could sort of get in touch with
their principals. We have seven. We need 11. If we can rustle
up four more. I am not sure that rustle up is the right
language.
[Laughter.]
Senator Dodd. We Democrats want to help this Republican
Administration get on with it and get going here.
[Laughter.]
I count six of us over here.
I want to commend our two nominees. Sheila Bair I knew
during her years with Bob Dole.
Let me just say, I thank both of you for doing this. We do
not thank people enough, in my view, for a willingness to be a
part of the public sector and go through a process such as this
where backgrounds are explored and examined microscopically. It
takes too long, in my view, it is too painful for people, in
many cases. I just have the highest admiration for people who
are willing to do this. Both of you have done it in the past.
You have served in the past, and your willingness to step up
again is to be commended.
You both have wonderful backgrounds and credentials. I know
that all of us up here will be looking forward to working with
you as these matters come before us.
I thank you both for your willingness to serve. It is
appreciated very, very much.
Thank you, Mr. Chairman.
Chairman Sarbanes. Senator Enzi.
COMMENTS OF SENATOR MICHAEL B. ENZI
Senator Enzi. I just want to thank you for holding this
hearing and for the way that you are conducting the
Chairmanship. I very much appreciate it. I have always enjoyed
working with you.
Chairman Sarbanes. Thank you very much.
Anybody else have any statements?
Senator Dodd. Welcome, Dan.
Chairman Sarbanes. I indicated that.
Senator Dodd. It is hard to see you down there.
[Laughter.]
It is almost like being in Hawaii down there.
[Laughter.]
Chairman Sarbanes. Jon Corzine really feels elevated,
though, by this development.
[Laughter.]
Senator Stabenow.
COMMENT OF SENATOR DEBBIE STABENOW
Senator Stabenow. Mr. Chairman, in fact, I was going to
add, I feel so much more senior today than I did last week.
[Laughter.]
Chairman Sarbanes. Could I ask the two nominees to stand
and take the oath?
Do you swear or affirm that the testimony that you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
Mr. McClellan. I do.
Ms. Bair. I do.
Chairman Sarbanes. Do you agree to appear and testify
before any duly-constituted committee of the U.S. Senate?
Mr. McClellan. I do.
Ms. Bair. I do.
Chairman Sarbanes. Thank you very much.
Ms. Bair, why don't we begin with your opening statement?
STATEMENT OF SHEILA C. BAIR, OF KANSAS
TO BE ASSISTANT SECRETARY OF THE
TREASURY FOR FINANCIAL INSTITUTIONS
Ms. Bair. Thank you, Chairman Sarbanes, and Members of the
Committee. I am very pleased to have this opportunity this
morning to discuss my nomination to be the new Assistant
Secretary for Financial Institutions at the Treasury
Department.
After hearing Senator Roberts' kind remarks and those
quoted from Senator Bob Dole, as well as your kind remarks,
Chairman Sarbanes, I am tempted to quit while I am ahead and
just leave it at that. But I do have a brief statement I would
like to make.
Before I do anything, I would like to introduce the members
of my family who are here with me--Scott Cooper, my husband,
and my 8-year-old son, Preston. I also have a 17-month-old
daughter, Colleen, who is roaming the halls with our au pair. I
am afraid that she did not quite make it through the
introductions, but I am very glad that they could all be here
with me today for this very special occasion.
Chairman Sarbanes. We are very pleased to have them here.
Ms. Bair. Thank you, Senator.
I would like to begin my statement by expressing my deep
appreciation to President Bush for nominating me to this
important position. I am honored by the confidence the White
House has shown in me by naming me to this post and I will work
hard to justify that confidence. I would also like to thank
Secretary O'Neill, Deputy Secretary-Designate Ken Dam, and
Under Secretary-Designate Peter Fisher for the support they
have provided for my nomination. I look forward to having the
privilege of working with them and the rest of the impressive
team that the President has assembled, and the career staff at
the Treasury Department.
Next, I would like to thank Senator Dole for his support
and help on this nomination, and all the support, advice, and
mentoring he has provided me over the past two decades. I know
he wanted to be here this morning and I wish him a full and
speedy recovery from his recent surgery, as I know we all do.
Working for Senator Dole early in my career, I was able to
learn all the best things about being in public service. In the
tradition of two other great Kansans, William Allen White and
Dwight D. Eisenhower, Senator Dole's leadership in the Senate
reflected the common sense values and pragmatic idealism so
steeped in the politics of Middle America. From him, I learned
that Government has a special obligation to use American
taxpayers' dollars wisely and sparingly, wisdom that will serve
me well at the Department of the Treasury, whose job I believe,
first and foremost, is to protect taxpayers' funds from
imprudent risk and wasteful expenditure. Senator Dole also
taught me, however, that Government has a special obligation to
help society's less fortunate and those programs to help the
poor and the disadvantaged, if carefully targeted and
efficiently managed, can constitute a wise and a noble use of
taxpayer's funds.
I come to you today with over a decade of experience
working in public service, ranging from my first job as a civil
rights attorney for the old Department of Health, Education and
Welfare, to my 5 years of service to this august body on the
staff of Senator Dole, to over 4 years as a Commissioner on the
Commodity Futures Trading Commission, where I served as
Chairman of the CFTC's Financial Products Advisory Committee,
and for a while, as Chairman Sarbanes has indicated, as the
Acting Chairman of the entire Commission.
I have nearly 12 years of experience working with the
financial markets, combining my years at the CFTC, with over 7
years with the New York Stock Exchange, and 5 years as Senior
Vice President of Government Relations. My blend of experiences
with the NYSE and CFTC has given me valuable insights into the
financial regulatory/policymaking process from the perspective
of both the regulator and the regulated. It has also given me a
broad-based understanding of the workings of financial markets
and the financial institutions, which participate in them.
I have a full statement I would like to submit for the
record, but, again, just let me thank President Bush and than
you, Chairman Sarbanes, for convening this hearing.
These are very exciting times in the financial services
industry and I very much look forward to working with this
Committee and others once confirmed by the Senate.
Thank you.
Chairman Sarbanes. We will include the full statement in
the record. Thank you very much for your opening statement.
Mr. McClellan.
STATEMENT OF MARK B. McCLELLAN
OF CALIFORNIA, TO BE A MEMBER OF THE
COUNCIL OF ECONOMIC ADVISERS
Mr. McClellan. Mr. Chairman, and Members of the Committee,
thank you very much for the opportunity and the honor of
appearing here today and for taking the time for the prompt
consideration of my nomination to the Council of Economic
Advisers.
I will start by introducing my wife, Stephanie McClellan.
She is in the second row here.
I am afraid to say that I was not quite as courageous as
Ms. Bair. Our 2-year-old twins, Ellie and Alex, are at home
instead of roaming the halls. But they have enjoyed the move to
Washington.
Chairman Sarbanes. I am sure you will tell them what they
missed.
[Laughter.]
Mr. McClellan. That is right, all the excitement.
[Laughter.]
I also want to thank the President for the honor and trust
he has put in me with this nomination and reaffirm my
commitment to upholding the standards of the Council of
Economic Advisers.
Mr. Chairman, as you well know, careful economic analysis
and the integration of the latest and best academic thinking
into policymaking only can be to the good for all of the
difficult issues that we confront in dealing with the economic
challenges facing the country. In that respect, the Council of
Economic Advisers has a critical role. It represents in the
Administration the interface of academic research and real-
world policymaking. And as such, it is not a responsibility to
be taken lightly.
Too often in many difficult political issues, it is easy to
take a political route rather than the often more thoughtful
and difficult course to make sound, long-range policy
decisions. But on the other side, too often, academics are
removed from the realities of policymaking and all of the
intricacies that must be considered in the difficult issues
that we face.
The Council of Economic Advisers has a long and storied
history of overcoming these barriers and providing the kind of
link between valuable policy insights from academia and the
opportunities to actually implement them in real-world
policymaking, as you well know, from your own background with
the Council of Economic Advisers.
It will be an honor and a pleasure if I have the
opportunity to continue that tradition by working on the broad
range of issues that come before the Council.
Thank you very much for the opportunity to appear here
today.
Chairman Sarbanes. Thank you very much.
Mr. McClellan, let me ask you. We are reading a tremendous
amount in the press nowadays about the state of the economy.
How do you see it? Where is it and where is it heading?
Mr. McClellan. Obviously, Mr. Chairman, the rate of
economic growth in the economy today is not as good as it
should be. We think that the economy is not in recession. I
think the consensus forecasts at this point are still for
growth in 2001 of approximately 1.6 percent and perhaps more.
We think that continued careful and sound monetary policy
decisions, as well as fiscal policy decisions, can help bring
the economic growth rate back up to a higher level that I know
we would all like to see.
To that end, the recent tax cut enacted by this Congress is
expected to have an effect on boosting economic growth this
year of about 1 percent of GDP and hopefully will have some
long-lasting effects beyond that.
The advice on helping to steward the economy is obviously
one of the most important roles of the Council of Economic
Advisers. Chairman Glenn Hubbard and all of the Members take
that responsibility very seriously and we will continue to
provide whatever advice we can to the President in making
policy to improve our economic function.
Chairman Sarbanes. Ms. Bair, Chairman Greenspan and former
Treasury Secretary Summers each have expressed a concern
regarding the issue of our Nation's financial literacy and
education. It is a concern of mine and Senator Corzine has
already undertaken a leadership role in attempting to promote
financial literacy. And I understand that it is also a high
priority of Senator Akaka, who has just joined our Committee
and, indeed, of many Members of this Committee.
Is this an area of interest to the Administration? And do
you have any thoughts on how we can work together and what
might be done to improve our Nation's financial literacy?
Ms. Bair. Thank you, Mr. Chairman, because I also have a
very strong commitment to financial education.
My personal view is that with more and better financial
education at much earlier ages, a lot of the regulatory
problems and consumer abuses that we see, unfortunately, from
time to time, could be eradicated. That is not to say that
financial literacy is an end-all, but it is an important
complement to any comprehensive regulatory policy to protect
consumers in the delivery of financial services.
Yes, my sense is, I have been a consultant for the past 4
weeks at the Treasury Department and I am not in an official
capacity to speak for the Administration, but sense certainly
that this is a very high priority, at the highest levels of the
Administration.
I think we need a comprehensive approach and I think that
those educational efforts must include, consistent with Senator
Corzine's leadership, more and better financial education
programs in the schools. Certainly at the high school level,
perhaps sooner.
As I think Chairman Alan Greenspan has suggested, even at
the elementary level, certain basic economic concepts, children
are capable of grasping and more aggressive efforts should be
made to introduce them to those concepts at an earlier age.
Chairman Sarbanes. A few weeks ago, The Washington Post ran
an article that said: ``Identity theft is one of the Nation's
fastest-growing white-collar crimes.'' What additional efforts
should be taken to prevent this practice and, more broadly, how
important an issue is the protection of an individual's
financial privacy to the Administration?
Ms. Bair. Well, again, I am not in a position to speak for
the Administration.
On the first question, on the question of identity theft, I
would agree. I think it is a growing problem. Technology has
brought wonderful innovations in the delivery of financial
services and wonderful enhancements in the services and the
products available to consumers. The downside is it has
provided the means for fairly widespread dangers of identity
theft to the detriment of the consumers that technology also
serves. So, we need a very concentrated effort, a very focused
effort. I think it should be a very high priority.
On the broader question of financial privacy, it is
interesting. To the extent that that debate involves the very
important issue of consumers' rights to access financial data
that is being held for them, I think we need to be careful to
balance that since it involved on-line access with the first
issue you raised, identity theft, and how we balance those two
issues.
On the broader issue of financial privacy, we have the
important provisions for the Gramm-Leach-Bliley bill. We need
to gather greater experience, I think, under those provisions.
I, for one, was somewhat disappointed in the quality of the
disclosures that some financial firms recently submitted
pursuant to those sent out to their consumers consistent with
the requirements of Gramm-Leach-Bliley. On the other hand, I
think a number of financial services firms did a very good job.
The statutory standard, however, is clear and conspicuous.
And I think that gives the regulators adequate authority to
deal with that discrete part of the problem.
There are obviously broader remaining issues. People of
goodwill still debate whether you should opt in or opt out in
terms of information sharing, the ability of a firm to share
information with unrelated third parties.
I know that this is of interest to you and I look forward
to continuing to work with you and Senator Gramm on those
important policy questions.
Chairman Sarbanes. Thank you very much. I see my time is
up.
Senator Gramm.
STATEMENT OF SENATOR PHIL GRAMM
Senator Gramm. Mr. Chairman, thank you. Let me apologize to
everybody for being late. I was at the White House with the
President when he announced his Medicare prescription drug
initiative. Mark McClellan has been very instrumental in
putting that together. Let me begin by congratulating him on
that.
Mr. Chairman, I know both of these nominees very well. I
knew Sheila Bair when she was Commissioner of the Commodity
Futures Trading Commission, from her work with the New York
Stock Exchange, and when she worked for Senator Dole. It is
hard to call up the name of anyone who has had as extensive
experience in the public and private sector as Sheila Bair.
I want to congratulate the President on nominating her, and
I strongly support her and look forward to working with her.
Ms. Bair. Thank you, Senator.
Senator Gramm. Let me say with regard to Mark McClellan,
that I think demonstratively he is one of the best-educated
people on the planet.
[Laughter.]
How many people have both an M.D. degree from Harvard and a
Ph.D. from MIT? My only sadness at his being here is that he
was going to Texas A&M on a joint appointment with the
Economics Department prior to President Bush convincing him to
come to Washington.
Chairman Sarbanes. He was leaving Stanford to go to Texas
A&M?
Senator Gramm. Yes. Of course.
[Laughter.]
I think I should, in all fairness, add that that is going
home. Mark's mama is one of my closest political allies. She is
the Comptroller in our State, and Mark is from one of our
State's most distinguished and talented families. It is
certainly encouraging, Mr. Chairman, when people with Mark
McClellan's ability are willing to take time out of their
career to come and serve the country in a position that gets
very little attention and that, in most cases, gives you a
marginal opportunity to have an input.
And again, as I have said on many occasions and I know, Mr.
Chairman, that you agree with me, it is a great testament to
our country that we have so many good people who are willing to
serve in so many different capacities. It is the greatest
strength of our system that we are able to call forth the best
and the brightest to serve the country--and they are willing to
do it. It is kind of amazing to me, but it is true. That is
certainly true with both of our nominees here today, and I want
to thank them for their willingness to serve.
Chairman Sarbanes. Senator Miller.
COMMENT OF SENATOR ZELL MILLER
Senator Miller. Thank you, Mr. Chairman, but I have no
questions at this time.
Chairman Sarbanes. Senator Enzi.
Senator Enzi. I also want to thank both of you for your
willingness to serve. I am a little bit more familiar now with
all of the paperwork that you have had to go through, including
the process and meeting all of the people. I am pleased that I
had an opportunity to look through some of the materials that
you provided. I have some questions for later about the Basel
capital standards rule and the know-your-customer regulation.
As you all know, the Senate soundly defeated the know-your-
customer rule the last time it came up because it conflicted
with personal rights that are guaranteed by the Constitution.
We will be exploring that with you later. But, again,
congratulations on your appointments and we look forward to
working with both of you.
Chairman Sarbanes. Thank you very much.
Senator Carper.
COMMENTS OF SENATOR THOMAS R. CARPER
Senator Carper. Dr. McClellan, I had been prepared to
support your nomination until I heard the disclosures about
your mom and Senator Gramm.
[Laughter.]
I will have to look at this one more closely.
[Laughter.]
I just want to thank you both for going through this
process and for your willingness to serve our country. Having
gone through a Senate nomination process myself when I was
Governor and nominated for the Amtrak Board of Directors, I
have some idea of what you had to go through in terms of
disclosures. It is just not much fun and I thank you for just
getting to this point.
Dr. McClellan, did you serve in the Clinton Administration?
Mr. McClellan. Yes, sir, that is correct.
Senator Carper. In what capacity?
Mr. McClellan. I was a Deputy Assistant Secretary of the
Treasury for Economic Policy. It is a position that is involved
in providing advice and policy guidance to the Secretary of the
Treasury on economic issues. My particular responsibilities
focused on microeconomic issues, including health care and
Social Security, issues like that.
Senator Carper. Did I understand that you have had your
hand in the development of the President's prescription drug
proposal?
Mr. McClellan. Yes. I have been advising the Administration
on economic issues related to health care for some time.
Senator Carper. All right. Well, that is good. You have had
a foot in both camps, sort of like Norm Mineta.
Mr. McClellan. Trying to get some bipartisanship enacted in
policy.
Senator Carper. That is what some of us are doing, too.
Terrific. We look forward to supporting your nomination.
Thank you both very much for being here. And maybe at
another time, we will have an opportunity to talk about
Medicare reform.
Thank you. Good luck.
Mr. McClellan. Thank you.
Chairman Sarbanes. I have just a couple of questions I want
to ask, and then I think we can probably draw the hearing to a
close.
Mr. McClellan, I had a talk with Secretary Evans, the
Secretary of Commerce, the other day about Federal statistics
and support for the various statistical agencies. It is an
issue in which he is quite interested, I am very pleased to
say.
I just want to get this on the Council's radar screen. The
Council of Economic Advisers on occasions in the past has
played a leading role in trying to ensure adequate resources
for the various Federal statistical agencies, recognizing, of
course, that we make lots of decisions on the basis of those
statistics and that, therefore, timely and relevant and
accurate statistical information is an important part of good
policy formulation.
Michael Boskin, interestingly enough, when he was Chairman
of the Council, had this as quite a high priority. He really
made a major effort. We would like to see the Council involve
itself in that and now that we have the Secretary of Commerce,
who has jurisdiction over some of the statistical agencies,
although, not all of them because the Bureau of Labor
Statistics is outside that jurisdiction, as are some of the
health and education statistics. Do you have any view on this
issue of the statistical information?
Mr. McClellan. Yes, sir. Good statistical information,
prepared in a timely and accurate fashion, is of crucial
importance to guiding policymaking on a whole host of economic
issues.
As you mentioned, getting better statistics is a high
priority of the Secretary of Commerce. I have had a number of
discussions with Kathleen Adams at the Commerce Department, who
oversees many of the statistical collection activities related
to productivity and industrial output.
I have also had the opportunity to participate in some
ongoing activities with the Bureau of Labor Statistics and the
Department of Labor to try to improve employment and other
statistics. And as a result of my background in health
economics, I have been long involved in the analysis and the
improvement of statistics in the health sector, everything from
hospital market baskets to the analysis of trends in
expenditures. One of the particular areas where I think we can
and need to do better is in the measurement of economic output
in the service sector.
The health care industry is a good example of the problems
there. It is fairly easy to measure how many visits people have
to the doctor and how much those visits cost. It is much harder
to measure the actual output of those kinds of services--what
is the contribution of a visit to the doctor or hospital stay
to the well-being of the population and to the productivity of
the economy?
These are areas where the CEA will be involved and I think
we can do better in delivering more useful statistics for your
use and those of the Congress in guiding policy analysis.
Chairman Sarbanes. We would appreciate it if you made sure
that this was fairly high up on the agenda of the CEA and let's
see if we cannot work at trying to get adequate resources and
review the statistical indices that are being kept to make sure
that they are still relevant to the modern economy.
And hopefully, working together, we take Federal
statistical information to a new plateau, which I think is a
win /win. I do not know anybody who is against it and there are
significant benefits to be gained from it.
I have one question to put again to you, Ms. Bair.
The Treasury Department and the Department of Housing and
Urban Development, in June 2000, just a year ago, issued a
joint report curbing predatory home mortgage lending. It was a
joint product of the two Departments. It had some very good
analysis and some very good recommendations in it, in my
opinion. That is an issue that this Committee intends to pursue
and to focus on.
I do not know whether you have had a chance to look at that
report. But I would hope that this Treasury Department would
carry along on the same path with respect to predatory lending
that was first charted out here by Secretary Summers and his
Department just over a year ago. Have you had a chance to look
at that report, or do you have any view on the issue generally?
Ms. Bair. I have had a chance to review it. I have not
studied it in detail. I thought that it was an excellent report
on my first reading. I would note that the Federal Reserve
Board has two rule proposals out now, one amending HOPA, the
other, the HMDA. And a number of those rule proposals were
consistent with recommendations included in the Treasury HUD
report. I know this is an area of deep concern to you. It is an
area of deep concern to me as well. I look forward to working
with you on it.
I requested that I have some briefing materials on what was
going on in Maryland, and Baltimore, specifically, with regard
to the flipping practices. It made me very angry. I share your
anger. I share your concern. And if there are additional things
that we can do, we should.
I think a distinction does need to be made between
predatory lending and legitimate sub-prime lending. Obviously,
we do not want to take measures that would have the unintended
consequence of providing disincentives for legitimate financial
service providers to serve economically distressed areas.
But, again, I appreciate your concern and your work in this
area and I look forward to working with you.
Chairman Sarbanes. Well, good. We look forward to doing
that.
I am pleased with your reference to the Federal Reserve
because they really have embarked, I think, on a very positive
and constructive endeavor there. And I know that they are now
in the process of formulating some regulations. We hope they
will come to finality and make an important contribution toward
dealing with this problem.
We have been joined by Senator Ensign. John, did you have
any comments?
COMMENT OF SENATOR JOHN ENSIGN
Senator Ensign. No, thank you very much, Mr. Chairman.
Chairman Sarbanes. Senator Carper.
Senator Carper. Mr. Chairman, I just cannot let this
opportunity pass without asking a question of Dr. McClellan.
I leaned over and said to Governor Miller here----
Chairman Sarbanes. It is just by chance that these two
Governors are sitting next to each other.
[Laughter.]
Senator Carper. We are joined at the hip.
[Laughter.]
Given the work that you did in the Clinton Administration
on Medicare, Medicare reform and, to some extent, prescription
drugs, the role that I understand you have played in helping to
shape the proposal of President Bush, I have been working with
Senator Bob Graham of Florida and others.
I have just become a cosponsor of not only his proposal,
but also that of Senator John Breaux and Senator Bill Frist.
One of the things that we have wrestled with in trying to
figure out how to hold down cost to the taxpayers, is how to
harness market forces in competition.
In the Graham proposal, we have called for dividing the
country into regions and inviting prescription drug benefit
managers to come and to compete for the business in those
various regions. And those who can negotiate the best prices
with the drug companies, pharmaceutical companies, will
presumably get more of the business in those respective
regions.
The President probably has a different proposal with
respect to competition and how do you harness it to help
contain our costs.
Would you just share some quick thoughts with us on how do
we not let this become just a runaway entitlement? How do we
make sure that we meet the needs that are greatest out there,
but in a way that is consistent with our budget resolution?
We set aside $300 billion in our budget resolution to cover
these costs. That is the forecast costs of the Graham proposal.
I think the President is under that a little bit. But just some
thoughts on competition, holding down our costs and providing
the benefit.
Mr. McClellan. Sure, I would be happy to make a few remarks
on that. And I hope we have more opportunities to discuss these
issues going forward.
Senator Carper. I expect some of our centrist Democrats are
going to try to get you to come and meet with us.
Mr. McClellan. That would be a terrific opportunity for me.
Senator Carper. Probably invite John Ensign, too.
Mr. McClellan. As you mentioned, I had a chance to work on
these issues as well in former President Clinton's
Administration. And there, too, there were fundamental concerns
about how we can best use competition to help seniors, to help
keep costs down, to give them better options, but not to take
away options that they depend on or disrupt services and
benefits that have been their lifeblood in getting the medical
care that they need.
Fortunately, at this point, I think there are a lot of good
ideas out there about how to do that. You mentioned that you
had recently signed on to the ``Breaux-Frist II'' bill. And I
think that is a good example of how we can start using
competition more effectively in giving seniors reliable and
good options for getting their guaranteed Medicare benefits.
With respect to prescription drugs, obviously, the increase
in costs of prescription drugs is an issue that is at the
absolute top of the national agenda and I know is a top concern
of the President, as well as many Democrats in this body.
Your ideas with Senator Graham for using the best tools of
the private sector--pharmacy benefit managers and similar
approaches that allow people and insurance groups to pool
together and use their buying power to negotiate competitive
discounts from drug manufacturers--have been very successful in
lowering costs in the private sector.
I think actually the President feels that using private
sector tools would be a very effective way to go. And if you
look at all the proposals for prescription drug benefits out
there, one of the things that they have in common is relying
more on the kinds of tools that have proven effective in the
private sector for getting lower cost drugs to people who have
private insurance and improving the quality of their
pharmaceutical use.
I think one of the announcements that the President made
today that Senator Gramm referenced was to try to take a step
now to get that process going for seniors. Obviously, it is
going to be a long and hard effort, despite all of the good
bipartisan groundwork that has been laid, to help provide a
prescription drug benefit in Medicare. It will take a lot of
work and all of us rolling up our sleeves and working together
to enact a prescription drug benefit as part of modernizing
Medicare and bringing the program up-to-date.
But the President believes, I think like you do, that
seniors should have access to the kinds of tools that have
proven so effective in private insurance plans for helping keep
drug costs down. I think part of his announcement today was on
that. And I know that he views that as hopefully a very useful
basis for moving forward on the kinds of legislation that we
need to help seniors.
Senator Carper. Thank you.
Yesterday, the House of Representatives passed, I think by
a wide margin, a measure that would enable people from our
country to buy their prescription drugs from other foreign
countries. Any thoughts on that legislation?
Mr. McClellan. That is an issue that I had an opportunity
to think about in the last Administration as well because, as
you know, similar bills passed Congress in the last
Administration. The big concerns there are maintaining the
safety of prescription drugs that people in this country are
using.
In the last Administration, Secretary Shalala and the FDA
made a determination that importation of drugs would be
virtually impossible to undertake in a substantial and
systematic way, while assuring high quality drug use. It is an
issue that bears on the Department of the Treasury as well.
The Administration, I think, has been conducting an
extensive review of all of the possibilities for drug
importation and all of the obstacles that exist to making sure
that the drugs coming back into the country are certified as
high-quality, unadulterated, and nonexpired products.
It is a real challenge. I think it just goes to the fact
that we need to work as hard as we can to find effective ways
to get lower-priced, safe, high-quality prescription drugs to
the American public.
Senator Carper. Mr. Chairman, it is unfortunate that
Senator Dole is not here, with this line of questioning. I am
sure that we can find something to talk about with him, too.
Chairman Sarbanes. Well, yes. He has just had some surgery,
but he is coming along fine. He did send a very laudatory
statement which I read before you arrived.
Senator Carper. I thank you for letting me pursue this line
of questioning. We look forward very much to further
discussions.
If time permitted, Ms. Bair, I would ask you to share with
me Treasury's thoughts on these matters, but I do not think it
does.
Thank you.
Chairman Sarbanes. Senator Bennett, did you have anything?
COMMENTS OF SENATOR ROBERT F. BENNETT
Senator Bennett. Mr. Chairman, I have been tied up down in
the Appropriations Committee, so I apologize for being late.
These two have my strong endorsement and I look forward to
the opportunity of voting for them and then working with them
after they take their positions.
Chairman Sarbanes. Thank you very much.
I want to commend the President. He sent us two nominees I
think of high quality. We look forward to acting in a favorable
way on your nominations.
I had hoped that we could draw this to a close before
Preston Bair's patience ran out.
[Laughter.]
But we did not accomplish that. Much to the relief of his
father, he left the room and has gone out into the hallway.
[Laughter.]
Let me say to the Members of the Committee, we were not
able to get a quorum to act on the five nominees that we wanted
to report out today: Angela Antonelli, Chief Financial Officer
of HUD; Jennifer Dorn, to be Federal Transit Administrator;
Roger Ferguson, to be on the Board of Governors of the FED;
Donald Powell, to be the Chairman of the FDIC; and Ron
Rosenfeld, to be President of the Government National Mortgage
Association.
What I am going to do, I am not going to adjourn the
Committee. I am just going to recess it. We will canvass then
and see if there is an opportune time in which we may draw the
Committee back together, have a quorum, and be able to report
these people out.
We have indicated that we want to try to cooperate with the
Administration as best we can. We presumably will differ on
occasions about some nominee, but to the extent we can, we will
move these people forward and get them into place so they can
start doing their jobs.
So with that, I want to thank the nominees and we will
recess. If we can work something out, we will let Members know.
Maybe we will do it off the floor of the Senate or something of
that sort.
The Committee stands in recess and I thank the nominees
very much for coming.
[Whereupon, at 10:52 a.m., the Committee was recessed, to
reconvene at 12:25 p.m. in room S-116 of the Capitol.]
Chairman Sarbanes. A quorum is now present to markup the
nominees that we had scheduled for this morning.
Very quickly, the nominees are: Angela Antonelli, to be
Chief Financial Officer of HUD; Jennifer Dorn, to be the
Federal Transit Administrator; Roger Ferguson, to be a Member
of the Board of Governors of the Federal Reserve; Donald
Powell, to be a Member and Chairman of the Board of Directors
of the Federal Deposit Insurance Corporation; and Ronald
Rosenfeld, to be President of the Government National Mortgage
Association, Ginnie Mae.
There is no controversy. I ask unanimous consent that we
consider all five nominations en bloc. Is that acceptable?
Senator Bunning. Mr. Chairman, I would like to be recorded
as voting no against one.
Chairman Sarbanes. Okay. We will consider them en bloc, but
register your negative vote with respect to one of the
nominees. Is that acceptable to everybody else?
Senator Dodd. Is there something we should know, Jim?
Senator Bunning. Well, there is someone who is so much like
Alan Greenspan that I cannot vote for him.
Chairman Sarbanes. All right. The Clerk will call the roll.
The Clerk. Chairman Sarbanes.
Chairman Sarbanes. Aye.
The Clerk. Mr. Dodd.
Senator Dodd. Aye.
The Clerk. Mr. Johnson.
Senator Johnson. Aye.
The Clerk. Mr. Reed.
Senator Reed. Aye.
The Clerk. Mr. Schumer.
Senator Schumer. Aye.
The Clerk. Mr. Bayh.
Senator Bayh. Aye.
The Clerk. Mr. Miller.
Senator Miller. Aye.
The Clerk. Mr. Carper.
Senator Carper. Aye.
The Clerk. Ms. Stabenow.
Senator Stabenow. Aye.
The Clerk. Mr. Corzine.
Senator Corzine. Aye.
The Clerk. Mr. Akaka.
Senator Akaka. Aye.
The Clerk. Mr. Gramm.
Senator Gramm. Aye.
The Clerk. Mr. Shelby.
Senator Shelby. Aye.
The Clerk. Mr. Bennett.
Senator Bennett. Aye.
The Clerk. Mr. Allard.
Senator Allard. Aye.
The Clerk. Mr. Enzi.
Senator Enzi. Aye.
The Clerk. Mr. Hagel.
Senator Hagel. Aye.
The Clerk. Mr. Santorum.
Senator Santorum. Aye.
The Clerk. Mr. Bunning.
Senator Bunning. Aye, with the exception of Roger W.
Ferguson, I vote no.
The Clerk. So noted.
Mr. Crapo.
Senator Crapo. Aye.
The Clerk. Mr. Ensign.
Senator Ensign. Aye.
The Clerk. The Ayes are 21, with the exception of Mr. Roger
W. Ferguson, where the Ayes are 20 and 1 no.
Chairman Sarbanes. Thank you all very much.
Senator Gramm. Thank you, Mr. Chairman, for doing this, and
Danny Akaka, welcome to our Committee.
Chairman Sarbanes. This hearing is adjourned.
[Whereupon, at 12:30 p.m., the hearing was adjourned.]
[Prepared statements, biographical sketches of the
nominees, and additional material supplied for the record
follow:]
PREPARED STATEMENT OF SHEILA C. BAIR
Assistant Secretary of the Treasury for
Financial Institutions-Designate
July 12, 2001
Chairman Sarbanes, Ranking Member Gramm, and Members of the
Committee, I am pleased to appear before you today to discuss my
nomination to become the Assistant Secretary of the Treasury for
Financial Institutions.
Before I begin my statement, it might be prudent to introduce my
family, since I think it unlikely our 17-month-old daughter, Colleen,
is going to make it through the entire hearing. With me today are my
husband, Scott Cooper, our 8-year-old son, Preston, Colleen, and our au
pair, Urarat Sukahrom. I am very happy that they could all be with me
this morning on this special occasion.
I would like to begin my statement by expressing my deep
appreciation to President Bush for nominating me for this important
position. I am honored by the confidence the White House has shown in
me by naming me to this post and I will work hard to justify that
confidence. I would also like to thank Secretary O'Neill, Deputy
Secretary-Designate Ken Dam, and Under Secretary-Designate Peter Fisher
for the support they have provided for my nomination. I look forward to
having the privilege of working with them, the rest of the impressive
team that the President has assembled, and the well regarded career
staff at the Treasury Department.
Next, I would like to thank Senator Robert Dole for his support and
help on this nomination, and all the support, advice, and mentoring he
has provided me over the past two decades. I know he wanted to be here
this morning and wish him a full and speedy recovery from his recent
surgery. Working for Senator Dole early in my career, I was able to
learn all the best things about being in public service. In the
tradition of two other great Kansans, William Allen White and Dwight D.
Eisenhower, Senator Dole's leadership in the Senate reflected the
common sense values and pragmatic idealism so steeped in the politics
of Middle America. From him, I learned that Government has a special
obligation to use American taxpayers' dollars wisely and sparingly,
wisdom that will serve me well at the Treasury Department whose job I
believe, first and foremost, is to protect taxpayers' funds from
imprudent risk and wasteful expenditure. Senator Dole also taught me,
however, that Government has a special obligation to help society's
less fortunate and those programs to help the poor and disadvantaged,
if carefully targeted and efficiently managed, can constitute a wise
and noble use of taxpayers' funds.
I come to you today with over a decade of experience working in
public service, ranging from my first job as a civil rights attorney
for the old Department of Health, Education and Welfare, to my 5 years
of service to this august body on the staff of Senator Robert Dole, to
over 4 years as a Commissioner on the Commodity Futures Trading
Commission, where I served as Chairman of the CFTC's Financial Products
Advisory Committee. I have nearly 12 years experience working with the
financial markets, combining my years at the CFTC, with over 7 years
with the New York Stock Exchange, and 5 years as Senior Vice President
for Government Relations. My blend of experiences with the NYSE and
CFTC has given me valuable insights into the financial regulatory/
policymaking process from the perspective of both the regulator and the
regulated. It has also given me a broad-based understanding of the
workings of financial markets and the financial institutions, which
participate in them.
My previous experience with financial derivatives and equities will
be helpful in dealing with the myriad public policy issues that are
arising as traditional lines demarcating banking products from other
types of financial products are blurring, and in some cases,
disappearing. With financial institutions forging into new product
lines and services in the wake of the Gramm-Leach-Bliley Act, the
ability of financial regulators and policymakers to coordinate and work
together cooperatively is being increasingly challenged, and I hope my
background will help me to contribute to the development of comity and
consistency in the regulation and oversight of our financial
institutions. These are exciting times in the making of financial
regulatory policy and once again, let me say how deeply grateful I am
to President Bush for giving me this opportunity to return to public
service. If confirmed by the Senate, I look forward to working closely
with Members of this Committee, the House Financial Services Committee,
and others as together we deal with the dynamic and momentous changes
occurring in the delivery of financial services.
Thank you very much. I would be very happy to respond to any
questions that you might have.
STATEMENT OF SENATOR BOB DOLE
July 12, 2001
Mr. Chairman, Members of the Committee, it is my honor and pleasure
to have the opportunity to introduce to you today Ms. Sheila Bair--
President Bush's nominee to be Assistant Secretary of the Treasury for
Financial Institutions.
In Sheila Bair, the President has chosen a talented and a dedicated
individual, someone well-suited to lead the operation and regulation of
financial institutions, and the promotion of consumer access and the
protection in financial services. I am proud to offer my strong support
for this nomination.
Sheila is a fellow Kansan, receiving her undergraduate and law
degrees from the University of Kansas. She has many other attributes
and I am confident you will agree with my assessment.
I have known Sheila for the better part of the last two decades.
Earlier in her career, she served as my Counsel on the Senate Judiciary
Committee, handling issues including Civil and Constitutional Rights,
Intellectual Property, and Judicial Reform. As I am sure many of you
can recall, she was an irreplaceable member of my staff, someone who I
had every confidence in, who I counted on for advice and analysis, and
she never failed me in this role.
After assisting my Presidential Campaign in 1988, she served as a
Legislative Counsel to the New York Stock Exchange. In 1990, she waged
a strong race as a Congressional candidate. She lost the Republican
nomination by less than 1 percent--a total of 760 votes.
In 1991, President Bush appointed her to the Commodities Futures
Trading Commission. In 1993, she served as Acting Chairman, where she
oversaw the completion of a major study on ``The Growth of Off-Exchange
Derivatives Instruments.'' In 1994, she was reappointed to the
Commission by President Clinton.
In 1995, Sheila was named the Senior Vice President of the New York
Stock Exchange, returning to Head the Government Relations Division,
representing the Exchange on Federal, State, and local matters. During
this time she had extensive relations with this Committee, as well as
the House Commerce Committee and the Securities and Exchange Committee.
Sheila remained a Consultant to the Exchange until early this year.
I had the pleasure of traveling up to New York with her to ring the
closing bell of the New York Stock Exchange in May of 1999. The Dow had
just passed 10,000. I am sure many of you have been there but it was
something I had never done before and it was a great experience.
We need someone in this position who has knowledge of financial
institutions and who has ``been there.'' Someone who can really add
value to this Administration's effectiveness in promoting the interests
of business, consumers, and ultimately the American people.
Our financial institutions are the finest in the world. They are
strong and dynamic and changing. Sheila's work history highlights her
unique qualifications for serving successfully in this post at the
Department of the Treasury. Her experience speaks for itself. Knowing
her as a staff member, a colleague, and a friend, I can assure you the
President has chosen a highly qualified candidate.
Mr. Chairman, I want to thank you and the Members of this Committee
again for affording me the opportunity to introduce Sheila and convey
to you my strong support for her confirmation.
NOMINATIONS OF:
MELODY H. FENNEL, OF VIRGINIA
TO BE ASSISTANT SECRETARY FOR
CONGRESSIONAL AND INTERGOVERNMENTAL
RELATIONS, U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
MICHAEL MINORU FAWN LIU, OF ILLINOIS
TO BE ASSISTANT SECRETARY FOR PUBLIC
AND INDIAN HOUSING, U.S. DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT
HENRIETTA HOLSMAN FORE, OF NEVADA
TO BE DIRECTOR OF THE U.S. MINT
LINDA MYSLIWY CONLIN, OF NEW JERSEY
TO BE ASSISTANT SECRETARY OF
COMMERCE FOR TRADE DEVELOPMENT
MICHAEL J. GARCIA, OF NEW YORK
TO BE ASSISTANT SECRETARY OF
COMMERCE FOR EXPORT ENFORCEMENT
----------
THURSDAY, JULY 26, 2001
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 2:35 p.m., in room SD-538 of the
Dirksen Senate Office Building, Senator Paul S. Sarbanes
(Chairman of the Committee) presiding.
OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES
Chairman Sarbanes. The Committee will come to order.
There is a vote on and we anticipate that other colleagues
will be joining us, and I know there were some Senators who
wished to introduce nominees that are before the Committee. We,
of course, will accommodate them when they arrive.
Today, the Senate Committee on Banking, Housing, and Urban
Affairs will be holding nomination hearings on five nominees
for positions in the Administration.
Linda Conlin to be Assistant Secretary for Trade
Development at the U.S. Department of Commerce; Melody Fennel
to be Assistant Secretary for Congressional and
Intergovernmental Relations at the U.S. Department of Housing
and Urban Development; Henrietta Fore to be the Director of the
U.S. Mint; Michael Garcia to be Assistant Secretary for Export
Enforcement at the U.S. Department of Commerce; Michael Liu to
be Assistant Secretary for Public and Indian Housing in the
U.S. Department of Housing and Urban Development.
I want to welcome all of the nominees before the Committee
and thank them for appearing today. We appreciate the
importance of the Administration being able to fill its top
positions and therefore we hope to be able to act on these
nominations in an expeditious manner. The Committee has been
trying to do that throughout the course of the new
Administration in an effort to help them get their people on
the job.
We are going to divide the five nominees into two panels.
Our first panel will consist of the two nominees for positions
at HUD. Afterwards, we will take the other three nominees on
the second panel, the Director of the Mint and the two nominees
for the Department of Commerce.
Why don't the two HUD nominees come forward and take seats
at the table.
[Pause.]
I, along with many Members of this Committee, have had the
pleasure of working directly with our first nominee, Melody
Fennel, who is well-known and well-respected by all Members of
this Committee. She has worked on housing issues for the
Committee for the past 5 years, both with Senator D'Amato and
with Senator Gramm. Her knowledge of Congress and her
impressive background in housing will, we believe, serve her
well in her capacity as Assistant Secretary for Congressional
and Intergovernmental Relations.
Melody Fennel has worked on affordable housing issues for
13 years in various capacities, because in addition to her time
on the staff of this Committee, she has held positions at the
National Council of State Housing Agencies and the National
Association of Home Builders.
Ms. Fennel has been a tremendous asset to this Committee
and the work we do on housing issues. She gave us invaluable
assistance a few years ago when we developed the Bipartisan
Public Housing Reform legislation and she has always worked
well with all Members of the Committee and their staffs in
addressing the difficult issues that arise regarding housing
and HUD.
I think it is fair to say we will certainly miss her
presence on the Committee, but we recognize the significant
responsibility and indeed honor for her to serve in the
Administration. I think we all wish her success in her new
position. I think the view on this side of the table is that
the Administration is very fortunate to get her.
And if people have not yet drawn the obvious conclusion, I
do not think this is going to be a difficult nomination.
[Laughter.]
Our other HUD nominee is Michael Liu, who has been
nominated to be the Assistant Secretary for Public and Indian
Housing. Mr. Liu also has an impressive background, having held
office in both the Hawaii State Senate and Hawaii House of
Representatives. He has held numerous positions in banking and
is currently Senior Vice President for Community Investment for
the Federal Home Loan Bank of Chicago. Prior to this position,
he served as a Community Builder Fellow at HUD for a year. He
previously has served in the first Bush Administration as a
Deputy Under Secretary and a Deputy Assistant Secretary at the
U.S. Department of Agriculture. He holds a B.A. from Stanford
University, and a law degree from the University of Hawaii.
Mr. Liu faces some serious challenges ahead. He will be
responsible for overseeing the Nation's largest housing
assistance programs, the very programs that address the needs
of the poorest Americans. The Public Housing and Section 8
programs are critical in meeting the needs of families who are
otherwise unable to afford decent and safe housing.
Both he and Ms. Fennel have their work cut out for them. I
have expressed to both of them the need to ensure that HUD's
programs are adequately funded. Regrettably, the
Administration's budget request this year had serious cuts in
the area of public housing, and I hope that with Mr. Liu's work
as Assistant Secretary, next year's budget request will not
underfund these necessary programs.
I look forward to working with both of the nominees to make
HUD's programs work more effectively, and to address the
significant housing crisis in this country.
Now, Senator Akaka, I know that you wanted to say a few
words of introduction with respect to Mr. Liu, and I yield to
you for that. Then Senator Reed, I do not know if you have any
opening comment. We will follow along before we turn to the
nominees.
Senator Akaka.
STATEMENT OF SENATOR DANIEL K. AKAKA
Senator Akaka. Thank you very much, Mr. Chairman.
Senator Sarbanes, Senator Gramm, Members of the Banking
Committee, it is a real pleasure for me to present to the
Committee Michael M.F. Liu and to present him for confirmation
as Assistant Secretary for Public and Indian Housing.
I would also like to welcome Susan, Mr. Liu's wife, and
their son, Nicholas. Hi, Nick.
[Laughter.]
They have traveled from their home in Illinois to attend
this hearing today, and I want to say to Mike Liu and the
family, aloha. Mike is well-qualified to be the Assistant
Secretary for Public and Indian Housing, and I want you to know
that I fully support his confirmation.
The Office of Public and Indian Housing is vital to many
families who benefit from housing programs. Based on Mike's
impressive credentials in housing, banking, and public policy,
I have every confidence in his ability to ensure that the
Office of Public and Indian Housing achieves its mission which
includes the implementation of public housing programs and
coordination of departmental housing and community development
programs for Native American Indians, Alaska Natives, and
Native Hawaiians.
In his current position as Senior Vice President and
Community Investment Group Head for the Federal Home Loan Bank
of Chicago, Mike is responsible for a number of housing
initiatives to assist families to purchase their first home,
build affordable housing, and help low- and moderate-income
residents improve their communities. Mike's experience in both
the public and in the private sectors has afforded him the
opportunity to address many public housing issues.
As a State legislator in Hawaii, Mike served as the Ranking
Member of the Housing Committees in both the State House of
Representatives and the State Senate. In addition, Mike has
served on boards of nonprofit organizations that build
affordable rental housing and serve tenants of public housing.
He also was a Community Builder Fellow at the U.S. Department
of Housing and Urban Development where he gained valuable
insight into the operations of HUD, and firsthand knowledge of
HUD's Section 8 voucher program.
While I have only touched on a few areas of Mike's
professional experience and capabilities, I believe that his
management, financial, and housing background clearly
illustrate his qualifications for this position. I believe he
is an excellent choice to be Assistant Secretary for the Office
of Public and Indian Housing. As such, I am pleased to give my
full support to Michael Liu's confirmation as the Assistant
Secretary, and urge the Committee to act favorably on his
nomination.
Thank you, Mr. Chairman and Members of the Committee.
Chairman Sarbanes. Thank you very much, Senator Akaka.
Senator Reed.
COMMENTS OF SENATOR JACK REED
Senator Reed. Thank you very much, Mr. Chairman.
Let me welcome Mr. Liu and Ms. Fennel. You are going into a
Department that is critical to the lives of so many Americans.
One of the basic obligations I believe that we have is to
provide safe, decent, affordable housing for all of our
citizens. Frankly, we have fallen behind in that obligation. I
know you are going to use your ingenuity and your creativity to
try to make the programs more efficient and the reach more
effective. But ultimately it will come down, as the Chairman
suggested, to appropriate resources.
I would hope, as you go forward, you would not be bashful
about asking, indeed demanding, within the Department, with
OMB, and the Congress for the resources that are necessary to
keep people well-housed in this country. I thank you both.
Thank you, Mr. Chairman.
Chairman Sarbanes. It is the standard procedure of the
Committee with respect to its nomination hearings to place the
nominees under oath, so I would ask you both now to please
stand.
[Witnesses sworn.]
Chairman Sarbanes. We would be happy to hear your opening
statement. If you have any members of your family here that you
wish to present, we would be very pleased for you to do that.
Why don't we start with Ms. Fennel.
STATEMENT OF MELODY H. FENNEL, OF VIRGINIA
TO BE ASSISTANT SECRETARY FOR CONGRESSIONAL
AND INTERGOVERNMENTAL RELATIONS
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Ms. Fennel. Thank you, Chairman Sarbanes, Subcommittee
Chairman Reed, and Senator Akaka. It is my pleasure to
introduce my mother, Mary Lee Fennel, and my brother, Mark
Fennel. I have been blessed with a family that has made many
told, and even more untold, sacrifices for me.
I am deeply grateful to President Bush and Secretary
Martinez for according me the honor of this nomination. I
anticipate the charge for which I have been nominated with
great humility. Chairman Sarbanes, I thank you for your
willingness to consider me for confirmation and for supporting
the nominations process during such a busy time. Over the last
6 years, I have staffed hearings in this very room with
approximately 200 witnesses. This has taught me many important
lessons. First and foremost, a witness should be brief.
[Laughter.]
Members of the Senate Banking Committee, I sit before you
with true admiration, as a staff aide that has witnessed
firsthand your steadfast dedication to your principles and the
pursuit of what you believe is right for our fine Nation. I sit
before my Staff Director and my colleagues on both sides of the
aisle with great respect for their ethics, their commitment to
public service, and their strength of spirit. I only hope that
I will continue my service with the courage Senator Gramm, my
wise leader, has entrusted in me.
In 1780, Abigail Adams wrote to her son, who later became
our sixth President, ``Justice, humanity, and benevolence are
the duties you owe to society.'' If confirmed, it would be my
duty to assist the President and the Secretary in providing
this justice--a justice that proffers help to our citizens who
are truly in need, and assures that the monies from those that
give are used honestly and efficiently. To ensure this, a close
relationship between the Executive and the Legislative Branches
is essential--and while there is a necessary separation between
the Administration and Congress, there also exists a symbiotic
relationship that I would endeavor to strengthen. If confirmed,
I personally pledge to you that the Administration's housing
and economic development proposals will be presented to
Congress in an open and forthright manner in order to ensure
the full opportunity for a comprehensive dialogue.
In closing, I offer my thanks to God, to His Name be the
glory.
Thank you.
Chairman Sarbanes. Thank you very much.
We have been joined by Senator Hutchison.
Kay, are you under some time pressure?
Senator Hutchison. Mr. Chairman, I am. I am sorry. I have a
3 o'clock commitment.
Chairman Sarbanes. Mr. Liu, I think that we will defer your
statement for the moment and we will give Senator Hutchison an
opportunity to introduce Ms. Fore.
STATEMENT OF KAY BAILEY HUTCHISON
A U.S. SENATOR FROM THE STATE OF TEXAS
Senator Hutchison. Thank you so much, Mr. Chairman. I
appreciate it very much because although I am not her Senator I
wish she were my constituent because I have known Henrietta
Holsman Fore quite a while.
Chairman Sarbanes. If she would be able to become your
constituent, we would all be in danger; we would be worried
that we would be losing all of our constituents.
[Laughter.]
Senator Hutchison. This is true. We want good people in
other States as well. As you know, she has been nominated to be
Director of the U.S. Mint. She comes to this office very
qualified. I have known her in an organization called ``The
Committee of 200'' which is a businesswomen's organization of
the leading businesswomen of our country of which Henrietta is
one. She is President and Chairman of Stockman Products which
manufactures and distributes steel products, cement additives,
and wire building materials, as well as CEO of Holsman
International, an investment and management firm.
She has the qualifications to be the Director of the Mint,
which I think is a management job and it is a manufacturing job
and one that I think she will take very seriously. How we can
be efficient and produce a quality product, and that is what we
all want.
She has served in several other Administration positions.
She has been a Senior Associate at the Center for Strategic and
International Studies, as well as being a leader in women's
business circles in our country.
I recommend her highly and I hope that you will look
favorably on her nomination and expedite it at your will.
Chairman Sarbanes. Thank you very much.
Senator Hutchison. Thank you.
Chairman Sarbanes. We certainly appreciate your coming and
speaking on her behalf. I know you have to leave. We are happy
to excuse you.
Mr. Liu, why don't we hear your statement now?
STATEMENT OF MICHAEL MINORU FAWN LIU, OF ILLINOIS
TO BE ASSISTANT SECRETARY FOR
PUBLIC AND INDIAN HOUSING
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Liu. Thank you, Chairman Sarbanes, and Senator Reed. It
is really a privilege to be able to appear before you today as
part of the confirmation process.
By way of reintroduction again, let me note that my wife,
Susan Orlando Liu, and my son, Nick, are here with us.
Chairman Sarbanes. Recording it for posterity.
Mr. Liu. Yes, for posterity, perhaps a budding Stephen
Spielberg in the making. But I would definitely not be here
without their support, and enduring patience.
My public and professional career has now spanned over 23
years, first as a Delegate to my home State's Constitutional
Convention, then as a State legislator, followed by work in
community development banking and law. My upbringing includes
living in public housing as a youngster; experiencing America's
post-World War II transformation into a more diverse and
tolerant society, much of that through the immigrant
experiences of my mother; and being provided the opportunity to
compete and to succeed in educational and career endeavors that
have linked me to various communities on the local, State, and
national levels.
I am no stranger to issues affected by Public and Indian
Housing policies as described so kindly by Senator Akaka. I
have spent many years in the State legislature dealing with
issues that relate to public housing. Many of my constituents
in the districts that I represented had a tie or were tenants
of public housing. It also included the well-established
Department of Hawaiian Home Lands Papakolea Homestead,
affording homeownership.
Affordable housing, both homeownership and rental, has been
a key area in which I have been involved for many years. While
with the U.S. Department of Agriculture as Deputy Under
Secretary for Small Community and Rural Development, I oversaw
implementation of new guaranteed loan programs for both single-
family and multifamily housing in rural America. At Bank of
America, I worked on a number of single-family mortgage and
multifamily grant programs to help address Hawaii's high-
housing costs. In my current role as Senior Vice President and
Community Investment Officer for the Federal Home Loan Bank of
Chicago, I have managed an affordable housing grant program
that allocates between $14 and $16 million annually, and a $600
million portfolio of community investment credit projects, most
of which are for housing. In all of these experiences, I have
had extensive contact with housing authorities both large and
small.
With fundamental adjustments occurring in how the clients
of public housing and communities at large are seeing issues
regarding housing, a plethora of program and regulatory changes
have been enacted. Most of these adjustments have been for the
better, giving local, State, and Federal authorities more
options in framing programs to match local conditions. I look
forward to the challenge of managing these changes in
collaboration with Public Housing's many partners. And in this
context, I see management as including attention to the nuts
and bolts of resource allocation for the support of Public and
Indian Housing within HUD.
The renewed interest in creative and efficient use of
public housing assistance is an integral part of housing goals
as described by Secretary Martinez before this Committee. For
example: The use of Section 8 vouchers for down payment
accumulation, and application of vouchers toward monthly
mortgage expense.
There have been great strides in addressing housing issues
related to Indian Housing, including the ability to secure
mortgages through an ever-growing variety of leases on tribal
lands. I will support the coordination of efforts between and
among the various Federal agencies with native peoples'
programs. And more can be done, especially in the educating of
private sector banking interests to the potential of markets
available under programs administered by Indian Housing and the
Office of Native American Programs.
If fortunate enough to be honored by confirmation by the
U.S. Senate, I will be a manager and an advocate for fair and
common sense delivery of Public and Indian Housing program
resources. I understand that it is important to recognize the
past in order to effectively move into the future. I also
understand that for the families affected by Public and Indian
Housing, the future is often very much on the near, rather than
on the far horizon, so that timely action must accompany
efforts at prudent planning.
Mr. Chairman and Members of the Committee, I appreciate
your indulgence. This concludes my testimony. I stand ready to
address any questions or comments you may have.
Thank you.
Chairman Sarbanes. Thank you very much.
We have been joined by Senator Allard. Wayne, do you have
an opening statement?
STATEMENT OF SENATOR WAYNE ALLARD
Senator Allard. Mr. Chairman, I do have a brief statement.
I would like to welcome our nominees here today and I look
forward to their testimony. I would also like to thank you, Mr.
Chairman, for moving the nominees so quickly through the
Banking Committee. As Ranking Member of the Housing
Subcommittee, I am particularly pleased to see us get nominees
confirmed at HUD.
I have met with most of the nominees here today. They all
strike me as very qualified. However, I must single out Melody
Fennel. Melody has been the Banking Committee's expert on
housing at HUD throughout my tenure as Chairman and now Ranking
Member of the Housing and Transportation Subcommittee. She has
been very helpful to me and I am going to miss her a great
deal.
I will say, however, that it will be very nice to have an
old hand in Congressional relations at HUD. While we will miss
her on the Committee, we will not lose her expertise and
talents. I look forward to continuing to work closely with her
in the years ahead.
Thank you, Mr. Chairman.
Chairman Sarbanes. Very good. I have a few questions I want
to put, first to Ms. Fennel.
Given your experience up here, tell us what qualities or
performances you think would be important in the Office of
Congressional Intergovernmental Relations. What have you
perceived from this vantage point that you can now put to work
when you go downtown into the Department?
Ms. Fennel. Thank you, Senator.
My first objective for HUD's Congressional Affairs Office
is to improve communications with the Hill. First and foremost,
the Office should be responsive to every Member of Congress
with accurate, complete, and timely information. That kind of
healthy dialogue is what we need to achieve the ultimate goal
for the Office--to work together with Congress and other
Government entities, as well as public and private interest
groups to improve housing and economic development situations
in our country.
Chairman Sarbanes. I was very much taken with the sentence
in your statement about pledging that the Administration's
Housing and Community Development proposals will be presented
to Congress in an open and forthright manner in order to ensure
the full opportunity for a comprehensive dialogue.
I definitely concur with that, and I think that is a very
important perception on your part, and we look forward to
having such an open and forthright dialogue. I think it is very
important. Obviously, anything you can do to encourage others
in the Department to take the same attitude, we would
appreciate.
I have not yet heard from House Members, but conceivably
they might get in touch with me with a concern that you might
show favoritism toward the Senate in terms of carrying out your
responsibilities.
[Laughter.]
Should they do that, what should I tell these concerned
House Members?
[Laughter.]
Ms. Fennel. I do have a great appreciation for the Senate
and it has been my home for 6 years. I am very sad in many ways
to leave it, but I think you can assure them that all Members
will be treated equally.
[Laughter.]
Chairman Sarbanes. What a good answer.
[Laughter.]
Mr. Liu, let me turn to you for just a couple of moments.
You worked as a Community Builder Fellow at HUD for a year. Do
you think that experience was beneficial and worthwhile?
Mr. Liu. For me personally it was, sir. In fact, I was able
to do some things specifically related to public housing. I was
able to actually go out into the field and do some housing
inspections under the Section 8 voucher program within the
District, and it was very valuable. In actually seeing what
inspectors do, I was also able to work with residents at the
Capitol View Plaza Project in Southeast that was undergoing
major changes because of safety issues and health issues at
that project, and our need to relocate the residents there. So
from that aspect, as well as from a larger sense in seeing some
of the programs, and how they interrelated at HUD, it was a
good experience.
Chairman Sarbanes. Did you feel that your work as a
Community Builder, and that of others who were there as
Community Builders was beneficial to HUD? You have said it was
beneficial to you. Do you feel it was of benefit to HUD?
Mr. Liu. Mr. Chairman, I really did not get to see enough
of the total panoply of how all of the builders were
interrelating in other offices, so it is very difficult for me
to say that, as a whole, it was good or bad.
Chairman Sarbanes. Did you meet enough of the other
Community Builders who had been appointed to form any opinion
about how qualified or competent they were? What was your
impression of your fellow Community Builders?
Mr. Liu. Those I had the most interaction with were very
committed and they were folks that had a lot of qualities and
could make them of value to HUD. The key issue at that point in
time was whether or not they would be provided the actual
training in the substantive programs where they could actually
add value, both in the field or back at headquarters.
Chairman Sarbanes. The Administration's budget request
proposes to reduce the Section 8 reserves from 2 months to 1
month. That is a proposal that was made. But during the
negotiated rulemaking on the Housing Certificate Fund, HUD
officials said that reducing their reserves to 1 month would
represent a serious threat to housing baseline families. Are
you familiar with HUD's position at all in terms of doing the
negotiated rulemaking?
Mr. Liu. In a general fashion, sir, but I am not informed
on the actual details of that.
Chairman Sarbanes. I would appreciate it if, in view of
that position, you take a very careful look at this when you go
back to the Department. Again, it is an easy way to pick up
some money, but it may run counter to the kind of standards we
want to apply. If you shorten it from 2 months to 1 month, you
are in a sense cutting the reserve you need in half. The
rationale earlier was they needed 2 months in order to
forestall any threat to this baseline housing, so if you would
take a look at that, I would appreciate it.
I see my time has expired. I yield to Senator Allard.
Senator Allard. Thank you, Mr. Chairman. I would just
reemphasize again that during my tenure with Melody on the
Housing and Transportation Subcommittee, my staff and I have
had the pleasure of working with you on a number of occasions.
I have always found you to be knowledgeable, dedicated,
conscientious, and hardworking, and I hope that we will be able
to continue to rely on you in your new capacity at HUD.
We will have the record show that she shook her head in a
positive manner.
[Laughter.]
Mr. Chairman, you so thoroughly grilled her unmercifully, I
do not think I can add any more to your line of questioning.
[Laughter.]
I do have one brief question for Mr. Liu. There are a
number of housing agencies, such as Puerto Rico, which have
serious problems and have not been officially designated by HUD
as troubled housing authorities. Does this concern you, and are
you going to work with this Committee to help identify and
clean up troubled housing authorities?
Mr. Liu. Senator, I assure you that I will work with all
Members of Congress, yourself, and others, and any who are
interested in those issues. I understand there are actions
going on right now to address some of the concerns there, and I
hope, if I am fortunate enough to be confirmed, to be able to
come back and report that we have made significant progress in
those areas.
Senator Allard. We look forward to hearing your report, and
look forward to working with you.
Thank you, Mr. Chairman.
Chairman Sarbanes. Senator Corzine.
COMMENTS OF SENATOR JON S. CORZINE
Senator Corzine. First of all, I want to congratulate the
nominees and look forward to working with you, if you are
confirmed, and I expect there is a good chance of that. Let me
actually pull in a lobbying word, something that is working its
way back into the process that was left out of the HUD budget
request. That is the Drug Elimination Program.
Mr. Liu, have you had a chance to examine the program? I
have heard from more public housing advocates and agencies in
New Jersey with regard to this than almost any other issue with
regard to housing. Have you had a chance to evaluate it? Do you
have an opinion yourself ? Can I count on you to be an inside
voice to support a program which I think, at least the
community thinks, is very important?
Mr. Liu. Senator, I am certainly aware that there is a lot
of concern over that issue. I believe that based on my
conversations with the folks over at HUD, as well as the
Administration, that clearly there is no disagreement, I think,
in the need to deal with the issue of drug elimination in
relation to public housing. To the extent that we can work
toward the common goal, certainly I will take a close look at
the issue of resources I think HUD will do what needs to be
done in order to address the issues of concern.
Senator Corzine. I will just comment that we asked
Secretary Martinez the same question at his confirmation
hearing, and got positive remarks and then the budget had it
eliminated, so I am somewhat insecure with regard to this
issue. And it is something I know, at least for those in New
Jersey, they feel very strongly about it being included as we
go forward.
Thank you, Mr. Chairman.
Chairman Sarbanes. That was a very good question. I want to
point out that the Senate Appropriations Committee has reported
out a bill that has virtually restored the cuts that were made
in the public housing area in the Administration's budget, both
on the Drug Elimination Program and on the Public Housing
Capital Fund. And the Committee, having done that, I hope the
Administration will now be supportive of that change.
I think one of your biggest challenges is to ensure that
you have sufficient resources for these programs. The Committee
has tried to provide them and I hope the Department will pick
up on that and carry it through.
Let me just ask you a couple of questions about the Capital
Fund. This money helps housing authorities repair and upgrade
their public housing stock. And as you noted, you have had such
stock in your districts when you were an elected member of the
Hawaii legislature, and of course you served on the committees
of the Hawaii legislature that dealt with housing in both the
House and in the State Senate, as I understand it.
The Administration, when they cut the $700 million in the
Capital Fund, uses a justification that the public housing
authority had unexpended capital funds. But are you familiar
with the data? Actually, it was provided by HUD itself, which
showed virtually all the public housing authorities are
expending capital funds well within their statutory timeframe?
In the Public Housing Reform Act, which I discussed earlier
with Ms. Fennel, we put in Senator Mack, who took the lead on
that, we worked out a provision to put the public housing
authorities within a statutory framework in terms of obligating
and then spending these funds so they do not spend them all at
once. We have sort of a pipeline that we have to continue as a
continuum. Are you familiar with the data that showed they
really were working within that framework and not outside of
it?
Mr. Liu. Senator, I have had a chance to look at the
information. I have not had a chance to digest all of the
implications of that information. I can assure that upon
confirmation, I will certainly be spending a significant
portion of time ensuring that the resources that are needed to
meet the capital requirements of public housing will be met,
both short and long term.
Chairman Sarbanes. Also on this very same point, the ABT
study, A-B-T, has been cited for the proposition that public
housing authorities are only capable of spending $2.3 billion
annually. They do not have a more stepped-up capacity.
Actually, the study did not say that they do not have the
capacity to spend additional capital funds. What it said was
that they accrue $2.3 billion in new capital needs each year.
That is what is added onto their needs, and that they had a
great need for additional capital funds, because they have a
backlog of capital needs of some $22 billion.
I hope when you go down there you will take a look. We have
this existing housing stock. It is providing very important
affordable housing. I think it is very important that we
maintain it, that we not allow it to deteriorate. We have
allowed too much of that to happen, the consequence of which
is, we end up tearing it down. We then have the problem of
replacing it, and the expense of replacing it. And I think it
simply behooves us to make sure that to the extent we can, we
keep this stock in usable condition in order to meet the
affordable housing needs of our people.
So the area that is within your jurisdiction is an area of
keen interest to Members of this Committee, as you can
appreciate yourself, having been a legislator confronting these
affordable housing needs. We look forward to a very close
interaction with you.
Are there any further questions?
[No response.]
We thank this panel very much. We would now like to excuse
you and ask the other three nominees to come forward.
[Pause.]
For our second panel this afternoon, I am pleased to
welcome before the Committee Ms. Henrietta Fore, who has been
nominated to be the Director of the U.S. Mint, and two nominees
for the Commerce Department, Linda Conlin, who has been
nominated to be Assistant Secretary for Trade Development, and
Michael Garcia, who has been nominated to be Assistant
Secretary of Commerce for Export Enforcement.
Ms. Fore is a graduate of Wellesley College, received a
master's degree in Public Administration from the University of
Northern Colorado, has studied both at Oxford and Stanford. She
is currently the Chairman and President of Stockton Products, a
manufacturer of steel products, cement additives, and wire
building materials in Las Vegas, Nevada, and is also Chairman
and CEO of Holsman International, a DC-based investment and
management company.
In addition to this extensive private sector experience,
Ms. Fore has held Presidential appointments at the U.S. Agency
for International Development as Assistant Administrator for
Asia and the Assistant Administrator for Private Enterprise and
has been confirmed in both of these positions previously by the
Senate. Actually, I sat on the Foreign Relations Committee when
we considered those nominations.
Since 1993, Ms. Fore has been a Senior Associate at the
Center for Strategic and International Studies in Washington.
She's a trustee of The Aspen Institute, The Asia Foundation,
and the National Public Radio Foundation.
She founded and served as first chair in the early 1990's
of the United States-Asia Environmental Partnership, a
coalition of business, Government, and community organizations
from the United States and 31 Asian countries.
Ms. Conlin received her undergraduate degree from the
University of Massachusetts. She spent the first 10 years of
her career serving as President of the Park-Main Travel Agency
in Massachusetts, which I understand was a family business,
then worked as Protocol Officer at the State Department, and as
Corporate Liaison at the U.S. Information Agency.
She previously served as an Assistant Secretary of Commerce
for Tourism Marketing from 1989 to 1993 under the first
President Bush, and then was the Executive Director for Travel
and Tourism of the New Jersey Commerce and Economic Growth
Commission for the balance of the 1990's. Recently, she has
been running her own consulting company.
Clearly, her prior service in the Commerce Department, as
well as her service in State government should be very useful
for overseeing the Office of Trade Development at the Commerce
Department. The Office of Trade Development is responsible for
conducting analysis of the different sectors of the U.S.
economy. It has a staff of 400, including a large number of
economists and experts on a range of U.S. industries.
The Office of Trade Development performs the sectoral
analysis that supports international trade negotiations carried
on by the U.S. Trade Representative. It also oversees the
Commerce Department's Advocacy Center, which assists U.S.
companies in competing for contracts for major capital projects
abroad. The Assistant Secretary for Trade Development is a very
important part of the Commerce Department's export promotion
efforts, something in which this Committee has taken a keen
interest, and I am hopeful Ms. Conlin will provide the strong
leadership which it requires.
Finally, Mr. Garcia received his undergraduate degree from
the State University of New York at Binghamton and his law
degree from the Albany Law School. After law school, he worked
for a year as an Associate Attorney in the law firm of Cahill
Gordon & Reindel in New York, then as a Law Clerk to the
Honorable Judith Kaye of the New York State Court of Appeals,
one of our country's most distinguished State court judges.
Since 1992, he served as Assistant United States Attorney
for the Southern District of New York, which is a training
ground--well, just let me say it seems to me to be a superb
training ground for lots of people in Government service. In
that capacity he has prosecuted a number of cases involving
terrorist attacks, including the bombing of the World Trade
Center in New York and the bombing of U.S. Embassies in Kenya
and Tanzania. These cases have obviously given Mr. Garcia
familiarity with the challenge of prosecuting cases in which
foreign citizens and foreign countries are involved, as well as
in dealing with the U.S. intelligence and national security
communities.
The nomination of a Federal prosecutor as Assistant
Secretary for Export Enforcement sends a strong message that
enforcement of our export control laws will be taken seriously
by the Department of Commerce. We hope soon to reauthorize the
Export Administration Act--we are working on that now in the
Congress--to provide stronger penalties and enforcement tools
for the very position to which Mr. Garcia has been nominated. I
hope we will be able to move that legislation through so it
won't be necessary for him to rely on the weaker penalties
which are available under the International Emergency Economic
Powers Act.
I just want to enter into the record that I have been
impressed thus far with the quality of people that Secretary
Evans, the Secretary of Commerce, has attracted to the Commerce
Department who have come before our Committee. I am very
hopeful that these nominees will become a very strong and
effective part of that team.
Before we turn to your opening statements, if you could
stand up, I will administer the oath.
[Witnesses sworn.]
Chairman Sarbanes. Thank you very much.
If any of you have family here that you wish to introduce,
we will be quite happy for you to do that.
Mrs. Fore, why don't we start with you as Director of the
Mint, then we will go to the Commerce Department.
STATEMENT OF HENRIETTA HOLSMAN FORE
OF NEVADA, TO BE DIRECTOR OF THE U.S. MINT
Ms. Fore. Mr. Chairman, I do have family here. May I
introduce my mother, Marta Holsman, directly behind me. She
started me on my first coin collection. My sister, Marta
Babson, daughter Rebecca Fore, and husband Richard Fore.
Chairman Sarbanes. Very good. Thank you. We are very
pleased to have you all with us.
Ms. Fore. Senator, mindful of your time, I have submitted a
written statement for the record, and I thought I would give
you a shorter oral version.
Chairman Sarbanes. That is just fine. We will include the
full statement.
Ms. Fore. It is a pleasure to be with you, Chairman
Sarbanes, Senator Allard, Senator Corzine. I am honored that
President Bush has nominated me to serve as Director of the
Mint. The President has outlined an Administration that is
business-like in its approach to Government. That is the
approach that I intend to take.
When the Senate and House assembled in 1792 in
Philadelphia, they passed the Coin Act to set the standards for
a mint to create the Nation's coinage and protect the Nation's
treasure. Americans have come to expect a safe and reliable
currency in our pockets and in our cash registers. Our currency
must be smart, with an electromagnetic signature, and it must
be durable, to last 30 years.
Our coinage must tell the story of our Nation, passing
along the chronicle of our rich heritage. I believe in the idea
that every American should serve our country. I was pleased to
see Senator Kay Bailey Hutchison, and I thank her for being
here.
I have served in business, Government, and nonprofit
sectors. These experiences have exposed me to many different
aspects of America's interests, and I believe they better
prepare me for the challenge at hand.
It would be an honor to again serve in Government, to work
with this Committee, with your staffs, the Senate, and the
House of Representatives.
Thank you.
Chairman Sarbanes. Thank you.
Ms. Conlin.
STATEMENT OF LINDA MYSLIWY CONLIN, OF NEW JERSEY
TO BE ASSISTANT SECRETARY OF COMMERCE
FOR TRADE DEVELOPMENT
Ms. Conlin. Thank you, Mr. Chairman.
I would like to introduce my friends and family that are
here with me today. My husband, Joe, in the second row, my
father-in-law, also Joe, my Aunt Clare, and my dear friends,
Louise Wheeler and Susan Rose.
Chairman Sarbanes. We are pleased to have them with us.
Ms. Conlin. Thank you, Mr. Chairman.
Mr. Chairman, Senator Allard, Senator Corzine, it is indeed
an honor and a privilege to appear before you today as
President Bush's nominee to be Assistant Secretary of Commerce
for Trade Development. I appreciate the confidence that
President Bush has placed in me and the support of Secretary
Don Evans and Under Secretary Grant Aldonas.
I thank you for scheduling this hearing during a very busy
time in the session. I appreciate your time and look forward,
if confirmed, to working with Members and the staff of this
Committee.
I have welcomed the opportunity I have had these past weeks
to visit with several of the Members who have shared their
recommendations, as well as some of their concerns. And if
confirmed, I would look forward to continuing the dialogue,
meeting with you and your staff on a regular basis.
The vision I would bring to this job, Mr. Chairman and
Members, reflects the underlying philosophy for trade and trade
development expressed by President Bush and Secretary Evans;
namely, that promoting trade, encouraging the free flow of
goods and services, capital and ideas, serves not only our
economic interests, but also the broader interests of political
freedom and a more stable and prosperous world.
I do believe, Mr. Chairman, that my private sector business
experience, as well as my 15 years in public service serving at
both the Federal and the State level, has prepared me to take
on this important challenge. I am, at heart, a businesswoman
with a profound respect and enthusiasm for the creativity and
courage it takes to own and operate your own business.
I was blessed with a bright and gifted father who gave me
my first job out of graduate school--the task of turning a
marginal business into a successful and profitable $4 million
business. In the process, I learned some very important
business lessons and some very important life lessons which I
hope will continue to serve me well as they have throughout my
career. For me, creating an environment for businesses to
succeed, as well as for the dedicated career professionals who
serve them, will indeed be a privilege.
If confirmed as Assistant Secretary for Trade Development,
I will focus on three broad areas: Concentrating Trade
Development's resources in ways that will best benefit American
exporters; expanding the benefits of trade to small- and
medium-sized businesses, minority-owned and women-owned
businesses; and strengthening Trade Development's relationships
with the business community and Government and nongovernment
organizations involved in export promotion.
If confirmed, therefore, I will focus the Trade Development
team, on the things they do best: Providing critical data and
economic analysis which represent the underpinnings of our
trade negotiations; managing industry participation in export
promotion events; advocating on behalf of U.S. companies
seeking foreign government contracts, and also utilizing our
wonderful and our marvelous Trade Information Center as the
single point of contact within the Government to provide export
information and counseling.
In all of these actions, Mr. Chairman and Members, the
Trade Development team is on the front-line of action to ensure
that U.S. firms have the best tools and the maximum opportunity
to compete effectively in world markets.
I will also work to support Under Secretary Aldonas'
commitment to extending the benefit of trade to all Americans,
for the medium- and small-sized businesses, for minority- and
women-owned firms. There is a tremendous opportunity here to
reach out to new exporters, as well as encouraging existing
exporters to enter new markets.
Last, if confirmed, I will look forward to strengthening
our outreach to U.S. industry, including our Industry Advisory
Committees, the President's Export Council, as well as the many
Federal and State departments and agencies involved in trade
development and promotion. And in this regard, I commend the
efforts of Chairman Sarbanes in working with Secretary Evans
and with Under Secretary Aldonas in focusing on the important
role of the Trade Promotion Coordinating Committee. If
confirmed, I look forward to supporting you, Mr. Chairman, in
maximizing the synergies of the TPCC. Helping businesses to
succeed in the global market means helping them to navigate
through and access the multitude of resources available.
Finally, on a personal note, I would like to once again
thank the important people in my life, my friends and my
family, who have created for me an environment to succeed, and
especially to my husband, Joe, for his love and his support
during this time.
I would like to once again thank President Bush, Secretary
Evans, and Grant Aldonas for their confidence and support and
take this opportunity to thank the Chairman and Members of the
Committee for your time and for your consideration this
afternoon.
Chairman Sarbanes. Thank you very much for your thoughtful
statement.
Mr. Garcia.
STATEMENT OF MICHAEL J. GARCIA, OF NEW YORK
TO BE ASSISTANT SECRETARY OF COMMERCE
FOR EXPORT ENFORCEMENT
Mr. Garcia. Thank you, Mr. Chairman.
I would like to introduce my family. I think you may have
heard from some of them already. This is my wife, Liana, and my
daughter, Liana Sofia. I think my son had another meeting in
the hallway and is no longer here, but maybe he will return.
Chairman Sarbanes. I know that Liana Sofia has been giving
us a running commentary.
Mr. Garcia. All positive.
Chairman Sarbanes. That is fine by us. Thank you.
Mr. Garcia. Chairman Sarbanes, Senator Allard, it is a
great honor for me to be here today as the President's nominee
for the position of Assistant Secretary of Commerce for Export
Enforcement. I thank both the President and Secretary Evans for
their confidence and trust in me. If confirmed, I look forward
to working closely with you and your staff.
Mr. Chairman, the Bureau of Export Administration, the BXA,
has a critical mission: Protecting, indeed, enhancing national
security, while preserving the right of American businesses to
export their products. I take this responsibility very, very
seriously. If confirmed, it will be my privilege to work with
the career law enforcement officials within BXA to fulfill our
national security and law enforcement mission.
As a former Federal prosecutor, I fully appreciate the
critical importance of protecting this country's national
security by ensuring that our sensitive technologies do not
fall into the wrong hands. I recently successfully prosecuted
individuals responsible for the bombings of our Embassies in
East Africa. I know firsthand the real danger of our
adversaries illegally obtaining U.S. products which can be used
against our citizens worldwide.
I look forward if confirmed to leading the enforcement arm
of BXA and working alongside Under Secretary Ken Juster and
Assistant Secretary Jim Jochum in advancing BXA's important
trade control mission. I will work hard to ensure that any
violations of U.S. dual-use exports are detected, investigated,
and sanctioned. Together with the special agents, intelligence
analysts, and other key enforcement staff at BXA, I will
dedicate my tenure in Washington to the protection of national
security through enforcement of the export laws and
regulations.
On a personal note, I want to again thank my wife, Liana,
and my children for agreeing to come to Washington with me to
serve in this Administration. I take my responsibilities
seriously but cannot succeed, and would not be here without
their support.
Let me conclude by thanking the Committee for its prompt
consideration of my nomination and by reiterating my commitment
to work closely and cooperative with you all.
Thank you.
Chairman Sarbanes. Thank you very much, Mr. Garcia.
I thank all of you for your statements.
Ms. Fore, let me chat with you for just a few minutes here.
Last September, Senator Gramm held a really, I thought,
outstanding symposium in this room--I do not know whether you
are familiar with it or not--on U.S. Coin Design. He mentioned
at the symposium that he wanted, and I am now quoting him: ``To
begin to look at American coinage and to begin the debate about
whether or not we should have a new age of American coinage in
which we seek to issue and mint coins that say something about
America today, something about America's values, about its
history.''
He went on to say that he wanted our U.S. coinage to be
representative of the greatest Nation in the history of the
world. I agree with him in those sentiments, and I really
applaud his efforts in trying to focus attention on the design
of American coinage and to discuss how to improve those
designs. In fact, I hope that you all noticed these coin
plaques that are up on the wall. These are the State quarters.
And as each quarter is added, a new one for a State, we add a
plaque. We are going to have to start down the side of the
Committee walls here. That was an idea of Senator Gramm's, and
it turned out just by chance that the Maryland quarter ended up
right here.
[Laughter.]
It was completely by chance. But that was another
initiative of his as well. We heard at that symposium, and we
should probably get--I presume there is still a transcript
available of it--a copy of it to you. We heard from members of
the numismatic community, the Smithsonian, the U.S. Mint, as
well as coin collectors. Do you have any views on this issue
and question of improving the design of our coins? You are in a
strategic position as the Director of the Mint now.
Ms. Fore. As are you, Senator. I read the 1792 Coin Act,
and in it it mentions that on one side of the coin we should
have an impression of an entity that is emblematic of liberty,
as well as the word liberty. Its purpose was to do just what
you are saying: To embody the values of this Nation. So, I like
that idea.
I have also noticed and have watched with interest how
Europe is addressing the Euro and its designs. They are going
to have bi-metallic coins, silver-and-gold, gold-and-red coins.
I think how Americans have approached the new Sacajawea
``Golden Dollar'' is very interesting. They are intrigued with
the weight, the size, the color. I think it is an area that we
should explore, and I would be very pleased to be a partner in
exploring what coin designs could look like with you and with
the American people.
Chairman Sarbanes. We look forward to that. You mentioned
the Sacajawea dollar coin that was released at the end of
January a year ago I think it was. USA Today reported that
fewer than half of Americans have encountered the coin, and
most who have are saving it rather than spending it. In fact,
they say that the Mint reported that over 800 million are in
circulation, yet 66 percent of people save the coin and do not
circulate it.
Now this is kind of a disconnect.
[Laughter.]
Of course, one of the reasons for doing it was the vending
machine business was quite interested in getting these dollar
coins and getting them out and working. What, if anything, can
be done about this? Or what is the future of this Sacajawea
dollar coin? Do you have any thoughts on that?
Ms. Fore. Well, I can only speculate, Senator. But I think
the Sacajawea will have a place in our currency. I know that a
lot of people have been collecting it. It is very shiny and
pretty when you get ahold of one, and you are tempted to just
put it aside, because it is different, it is unique, and the
coin collecting hobby has really increased with interest due to
the quarter program that you have just outlined, as well as to
the Sacajawea golden dollar.
So it is a good thing that people are tucking it away in
their drawers and pockets, but we would like to get it into
circulation. I think just as the American people, I find that I
can use both at one time. I want to use a nice golden coin for
a bus turnstile. It is simple, it is quick, but then at
another, I like that nice, light, flexible dollar bill to go
into my wallet. I suspect they can co-circulate, and we will
have to study more what the circulation patterns and usage
patterns are. But any suggestions by the Committee would be
most welcome.
Chairman Sarbanes. Thank you. I see my time is up.
Senator Allard.
Senator Allard. Mr. Chairman, once in a while a word is
mentioned that makes you flashback in some history aspects. My
State, for example, as soon as you mentioned bi-metallic, here
in the Banking Committee, we used to have a Senator Teller from
Colorado, known as the bi-metallic Senator, because he
allocated not only the gold standard but also the silver
standard, which was very important to the mineral industry in
the State of Colorado at that particular point in time.
I have a feeling that you may hear some industry concerns
if you talk about a bi-metallic coin, because it does present
some certain demands on certain minerals, and obviously it
would have an impact on what they may cost and their value. So
it is interesting how a term like that will make you flashback
on some history that might be pertinent to your State.
Another thing that is happening in Colorado right now that
I hope you are aware of, is that we have had some recent
problems with error coins leaving our Mint in Denver. While
there are questions about how and why these coins are occurring
as errors, the fact that they get out of the Mint I think
raises some very serious security issues and concerns. My
question is, what do you intend to do about security at our
Nation's Mints?
Ms. Fore. My goal for the U.S. Mint is that it is the best
mint in the world. To be the best mint in the world, errors
should be nonexistent. But given the enormous volume demands
that the Mint has had in recent years, 20 to 30 billion coins a
year, working 7 days, 24 hours, it has an enormous production
load.
So, I would like to address the prevention for error coins,
how they are currently being handled, and then how they get
into circulation both intentionally and unintentionally. I know
that the Mint has had a senior management group that has looked
at it. They have a study and they have an assessment. I would
like to take a look at it and see what they have found out. It
is an issue that I think is important, and I will certainly
look into it.
Senator Allard. Well, I would just reemphasize my feeling.
I think attitudes about security starts at the top, whether we
are talking about our military security or the State
Department, Defense Department, the President's own staff or
even here as head of the Mint, and I do think that you can play
a key role in how serious Federal employees take the security
measures. And so, I would hope that you would send a clear
message that security is of real concern to me and I suspect to
other Members on this Committee and hopefully yourself.
Mr. Chairman, that is all I have. Thank you.
Chairman Sarbanes. Thank you very much, Senator Allard.
Ms. Conlin, one of the challenges facing the International
Trade Administration, the ITA, is to make the bureaus
responsible for trade promotion coordinate better. You would be
the head of one of those bureaus, Trade Development. In
addition, you have the U.S. Foreign and Commercial Service and
the Market Access and Compliance people. Do you have any
thoughts at the moment about how better coordination might be
achieved? Not that you necessarily should. But it is a matter
of some interest to us, because we want to see a highly
effective, functioning Commerce Department, and I think this
challenge that the ITA is facing is a very real one.
Ms. Conlin. Yes, Mr. Chairman. Whether you are coordinating
or have the challenge of coordinating the work in export
development and promotion among Federal agencies and
departments, or whether you are trying to coordinate it within
a department itself, it is a challenge. And it is very
important to make sure that we are making the best use of our
resources.
At our ITA family, as you have just said, Mr. Chairman, we
have a number of units dedicated to trade development and to
export promotion. I feel that each unit has their distinct
strengths, as well as perhaps share some responsibilities.
In, as you pointed out earlier, Mr. Chairman, in trade
development, we have some very dedicated career professionals
who provide the economic analysis and data that are the
underpinnings for the strategies and priorities in our trade
negotiations, as well as having people that advocate on behalf
of businesses and help small- to medium- sized businesses.
My sister units also are involved in working on behalf of
American business, whether it is compliance in trade agreements
with market access and compliance or working with small- to
medium-sized businesses and helping them enter foreign markets
through the U.S. and Foreign Commercial Service. So, we all
work together. I think one of my goals in addressing Secretary
Aldonas' priorities in the best use of those resources is to
make sure that we as units are working very well together,
working on our strengths but also on our shared areas of
responsibility.
Chairman Sarbanes. Very good.
Mr. Garcia, have you had a chance to familiarize yourself
with these efforts now underway in the Congress to reauthorize
the Export Administration Act, which, of course, is very
relevant to you and your work?
Mr. Garcia. Yes, Senator, very briefly I have. I just
finished a trial in New York and I came down to Washington, and
I have been attempting to look into those things.
Chairman Sarbanes. Well, the Administration is strongly
supportive of the reauthorization of that Act that was reported
out of this Committee. Now, we have run into a little heavy
weather in the Senate, although we hope to be able to move
ahead with respect to that. But I, obviously, encourage you to
follow this very closely, because you will either get your
authority to control under the Export Administration Act, or
the Administration will have to put in a regime under the
IEEPA, the International Economic Emergency Powers Act.
The penalties under IEEPA are, in fact, less than the
penalties we would be providing in the legislation that we have
brought out of this Committee. And the regime is different. We
think that it is an improvement in the regime. But I would
think one of your first responsibilities once you get in down
there is going to be to really get right up to speed on this
legislation. Actually, we are operating under a 1 year
extension of the Export Administration Act which expires in
August.
If it expires and we have not replaced it, the President
will have to invoke IEEPA, put a regime into place, which
presumably you will be involved in helping to develop. That is
not as good a regime in my opinion, and I think in the opinion
of most of my colleagues. And the authorities that are
available to you under IEEPA would be less than what we are
trying to provide in the statute.
I think this is going to be an important item that is going
to be on the forefront of your agenda, because it is going to
establish the whole framework within which you operate so that
whatever the specific case is you are trying to deal with in
export control is going to relate back to this statutory
framework. So, I think it really behooves you to take an
interest to try to get it set right if you possibly can.
The Administration has reviewed this very carefully, and
they are supportive of our legislation. We have received
letters from the National Security Adviser. The President has
made public statements about it. The Secretary of Commerce is
very strongly in favor of it, and Senator Daschle has indicated
an intention to try to move it, so we will see how we can do up
here on it.
Mr. Garcia. Mr. Chairman.
Chairman Sarbanes. Go ahead.
Mr. Garcia. I have looked at those provisions on the
penalties in the new legislation. I understand the increases.
And it also would provide permanent law enforcement authority
for the agents in export enforcement, which I think is very
important, so that they do not go back to the position where
they have to be re-deputized as U.S. Marshals.
I think it is important for their law enforcement function
and for the morale of the unit and the important work they do
that they receive that permanent law enforcement certification.
Senator Allard. Mr. Chairman, I would just like to add on
to your comments a little bit. One thing that we consistently
hear from exporters, particularly those issues where it might
deal with dual-use items--they have a military purpose, as well
as domestic purpose--is the length of time it takes to get
approval. I know that from past studies, I think, for example,
on the Armed Services list, there are some 9,000 items. Some of
them, if you look that over, do not make a lot of sense. I am
not sure whether that is under your jurisdiction. But the thing
that I think that you ought to be aware of is that they are
concerned about the considerable length of time. You will have
to go through three separate agencies many times for approval--
Departments of State and Commerce, as well as the Department of
Defense. Sometimes when you are in a highly competitive in an
international market and you cannot give a specific indication
the businessman that you are dealing with in the foreign
country as to when you may be able to have a decision. Lots of
times that is all they ask for is a timeline so they can make
plans on the other end, it does make it very difficult to
compete internationally.
I do think I would agree with the Chairman it is an
important piece of legislation. It was reported out of
Committee here nearly unanimously. I know it had a lot of
support here in the Banking Committee.
Thank you, Mr. Chairman.
Chairman Sarbanes. Thank you.
Mr. Garcia, I would like to ask you, just for my own
personal curiosity, a couple of questions about the work you
have been doing. The bombings of the Embassy in Nairobi and in
Dar es Salaam were part of an Osama bin Laden enterprise. Is
that right?
Mr. Garcia. That is correct, Mr. Chairman.
Chairman Sarbanes. Now what about the World Trade Center in
Manhattan?
Mr. Garcia. Mr. Chairman, there is no public link between
the bombing of the World Trade Center that took place in 1993
and the 1998 bombings of our embassies in East Africa. What you
do see is a similar training path. People travel into training
camps, obtaining this type of training, of activity, bomb-
building, and using that in terrorist acts against the United
States. So while there is no direct link to the group, there
certainly is a link between the types of training that is
obtained.
Chairman Sarbanes. Okay. Well, as I said at the outset,
that is terrific training at the U.S. Attorney's Office for the
Southern District of New York. And we are pleased now you are
coming into Washington to put that expertise to work for us.
Mr. Garcia. Thank you, Mr. Chairman.
Chairman Sarbanes. We appreciate all three nominees coming
before the Committee. I am hopeful we can markup these nominees
in the Committee the first part of next week, which would
enable us to report them to the Senate floor in time, I would
hope, for action to be taken by the Senate with respect to your
nominations before the Senate goes out for the August recess,
so that your nominations would not carry over into September
and we could move ahead to get you on the job. I cannot
guarantee that outcome, but that is what we will try to
accomplish.
Thank you all very much for coming today. We appreciate it.
The hearing is adjourned.
[Whereupon, at 3:55 p.m., the hearing was adjourned.]
[Prepared statements, biographical sketches of the
nominees, and response to written questions supplied for the
record follow:]
PREPARED STATEMENT OF SENATOR JOHN ENSIGN
ON THE NOMINATION OF HENRIETTA HOLSMAN FORE
TO BE THE DIRECTOR OF THE U.S. MINT
Thank you, Mr. Chairman, for allowing me the opportunity to speak
before the Committee today. It is my pleasure to welcome Ms. Henrietta
Holsman Fore this afternoon before the Senate Banking Committee and to
offer my recommendation for her appointment to the position of Director
of the U.S. Mint.
Ms. Fore is a fellow Nevadan and a continual leader. Having held
previous Presidential appointments, Ms. Fore knows and surpasses the
requisite criteria. Her reputation and background as a leader are
beyond reproach. She has served since 1993 as Chairman of the Board and
President of an international corporation in Las Vegas, Nevada, and
also serves as the Chairman and Chief Executive Officer of Holsman
International in Washington, DC. From 1990 to 1993, she served as
Assistant Administrator in the Bureau for Private Enterprises and the
Assistant Administrator in the Bureau for Asia. Ms. Fore is a graduate
of Wellesley College and received a Master's in Public Administration
from the University of Northern Colorado. With her years of nationwide
experience, both in Government service and the private sector, she has
refined the ingenuity and expertise that will enable her to excel as
Director of the U.S. Mint.
I urge my colleagues on the Senate Banking Committee to support the
nomination of Ms. Henrietta Holsman Fore for Director of the U.S. Mint.
I am proud to introduce her today as both a leader of this community
and as a fellow Nevadan. I thank you, Mr. Chairman, for allowing me to
speak on her behalf today.
----------
PREPARED STATEMENT OF MELODY H. FENNEL
Assistant Secretary-Designate of Congressional and
Intergovernmental Relations
U.S. Department of Housing and Urban Development
July 26, 2001
Chairman Sarbanes, Senator Gramm, and Members of the Committee:
It is my pleasure to introduce my mother, Mary Lee Fennel, and my
brother Mark Fennel. I have been blessed with a family that has made
many told, and even more untold, sacrifices for me.
I am deeply grateful to President Bush and Secretary Martinez for
according me the honor of this nomination. I anticipate the charge for
which I have been nominated with great humility. Chairman Sarbanes, I
thank you for your willingness to consider me for confirmation and for
supporting the nominations process during such a busy time.
Members of the Committee, I sit before you with true admiration, as
a staff aide that has witnessed your steadfast dedication to your
principles and the pursuit of what you believe is right for our fine
Nation. I sit before my Staff Director and colleagues on both sides of
the aisle with great respect for their ethics, their commitment to
public service, and their strength of spirit. Senator Allard, it has
been a privilege to serve you as you presided over complex housing
issues with alacrity. Senator Gramm, my wise leader, I sit before you
with great appreciation for the honor of having represented you. Thank
you for allowing me the privilege of serving you and the American
people. I only hope that I will continue my service with your badge of
courage upon me.
In 1780, Abigail Adams wrote to her son, who later became our sixth
President, ``. . . Justice, humanity, and benevolence are the duties
you owe to society. . . .'' If confirmed, it would be my duty to assist
the President and the Secretary in the provision of this justice --a
justice that proffers help to our citizens whom are truly in need, and
assures that the monies from those that give are used honestly and
efficiently. To ensure this, a close relationship between the Executive
and Legislative Branches is essential--and while there is of course an
important separation between the two, there also exists a natural
concomitance. If confirmed, I personally pledge to you that the
Administration's housing and community development proposals will be
presented to Congress in an open and forthright manner--in order to
ensure the full opportunity for a comprehensive dialogue.
In closing, I offer my thanks to God, to his name be the glory.
Thank you.
PREPARED STATEMENT OF MICHAEL MINORU FAWN LIU
Assistant Secretary-Designate for Public and Indian Housing
U.S. Department of Housing and Urban Development
July 26, 2001
Chairman Sarbanes, Ranking Member Gramm, Distinguished Senators. It
is a privilege to be able to appear before you today as part of the
confirmation process for the position that I have been nominated.
By way of introduction, let me first note that my wife, Susan
Orlando Liu, and my 9-year-old son, Nicholas, join us in this hearing.
I would definitely not be here without their support, and enduring
patience.
My public and professional career has now spanned over 23 years,
first as a Delegate to my home State's Constitutional Convention, then
as a State legislator, followed by work in community development
banking and law. My upbringing includes living in public housing as a
youngster; experiencing America's post-World War II transformation into
a more diverse and tolerant society through the immigrant experiences
of my mother; and being provided the opportunity to compete and succeed
in educational and career endeavors that have linked me to various
communities on local, State, and national levels.
I am no stranger to issues affected by Public and Indian Housing
policies. As a State Representative in Hawaii, my district included one
of the largest subsidized housing projects in Honolulu (Kukui Gardens),
as well as one of the most distressed (Mayor WrightHousing). It
included the well-established Department of Hawaiian Home Lands
Papakolea Homestead. In recognition of constituent needs, I sought and
have retained membership on the Housing and Health and Human Services
Committee for 8 years, and another 2 years on the same committee in the
Hawaii State Senate.
Affordable housing, both homeownership and rental, has been a key
area in which I have been involved for many years. While with the U.S.
Department of Agriculture (USDA) as Deputy Under Secretary for Small
Community and Rural Development (1991-1993), I oversaw implementation
of new guaranteed loan programs for both single-family and multifamily
housing in rural America. At Bank of America (1993-1997), I worked on a
number of single-family mortgage and multifamily grant programs to help
address Hawaii's high housing costs. In my current role as Senior Vice
President and Community Investment Officer for the Federal Home Loan
Bank of Chicago, I have managed an affordable housing grant program
that allocates between $14 and $16 million annually, and a $600 million
portfolio of community investment credit projects, most of which are
for housing. In all of these experiences I have had extensive contact
with housing authorities both large and small.
With fundamental adjustments occurring in how the clients of public
housing and communities at large are seeing issues regarding housing, a
plethora of program and regulatory changes have been enacted. Most of
these adjustments have been for the better, giving local, State, and
Federal authorities more options in framing programs to match local
conditions. I look forward to the challenge of managing these changes
in collaboration with Public Housing's many partners. And in this
context, I see management as including attention to the nuts and bolts
of resource allocation for the support of Public and Indian Housing
within HUD.
The renewed interest in creative and efficient use of public
housing assistance is an integral part of housing goals as described by
Secretary Martinez before this Committee. For example: The use of
Section 8 vouchers for down payment accumulation, and application of
vouchers toward monthly mortgage expense.
There have been great strides in addressing housing issues related
to Indian Housing, including the ability to secure mortgages through an
ever-growing variety of leases on tribal lands. I will support the
coordination of efforts between and among the various Federal agencies
with native peoples' programs. And more can be done, especially in the
educating of private sector banking interests to the potential of
markets available under programs administered by Indian Housing and the
Office of Native American Programs.
If fortunate enough to be confirmed by the U.S. Senate, I will be a
manager and advocate for fair and common sense delivery of Public and
Indian Housing program resources. I understand that it is important to
recognize the past in order to effectively move into the future. I also
understand that for the families affected by Public and Indian Housing,
the future is often very much on the near, rather than on the far
horizon, so that timely action must accompany efforts at prudent
planning.
Mr. Chairman and Members of the Committee, I appreciate your
indulgence. I stand ready to address any questions or comments you may
have.
Thank you.
PREPARED STATEMENT OF HENRIETTA HOLSMAN FORE
Director-Designate of the U.S. Mint
July 26, 2001
Thank you, Chairman Sarbanes, Ranking Member Gramm, and Members of
the Committee on Banking, Housing, and Urban Affairs. I am honored that
President Bush has nominated me to serve as Director of the Mint and I
thank you for the privilege of appearing here today. If confirmed, I
will have the opportunity and the challenge to work with Treasury's
Secretary Paul O'Neill and to meet his high standards for operating a
world class production facility. I will work to deliver the benefits of
quality, efficiency, and worker safety. President Bush has outlined an
administration that is business-like in its approach to Government.
That is the approach I intend to take.
Americans have come to expect a safe and reliable currency in our
pockets, in our cash registers, in the vending machines, and in the
transit fare turnstiles across our Nation. Our currency must be smart,
with an electromagnetic signature; it must be durable to last through
30 years of trips to the beach, fast food counters, and through laundry
machines. And our coinage must tell the story of our Nation, passing
along the chronicle of our Nation's rich heritage. We have a
responsibility to educate the public about their history, for it was an
urgent, but not a simple matter when the Senate and the House assembled
in 1792, and set the standards for a Mint to create the Nation's
coinage. The Coin Act also required the Mint to protect and to account
for the Nation's treasure, which it still does today. And I will have a
challenge to encourage and to maintain the enthusiasm of the coin
collecting community.
If confirmed, I look forward to working closely with this
Committee, the Senate, and with members of the House of
Representatives. I have had the pleasure of working with you before and
look forward to doing so again. I believe in the idea that every
American should serve their Nation's interests and should bring with
them the ideas of other arenas. For me, those arenas are business and
nonprofit.
I was born in Chicago, Illinois, grew up in California, and in
1970, graduated from Wellesley College. I worked in General Services
Administration and received a Masters in Public Administration from the
University of Northern Colorado. For the past 24 years I have managed
and owned a wire and metal products manufacturing company servicing the
construction industry with factories in Nevada, Arizona, and
California. From 1989 -1993, I served in the U.S. Agency for
International Development and was confined twice by the Senate, once as
Assistant Administrator for Private Enterprise and once as Assistant
Administrator for Asia. Since that time, I have served on several
nonprofit and public corporate boards, traveled, and run my business.
These experiences have exposed me to different aspects of America's
interests that, I believe, better prepare me for the challenge at hand.
It would be an honor to again serve in Government.
Thank you, Mr. Chairman. I would be pleased to answer any
questions.
PREPARED STATEMENT OF LINDA MYSLIWY CONLIN
Assistant Secretary-Designate for Trade Development
U.S. Department of Commerce
July 26, 2001
Mr. Chairman, Senator Gramm, and Members of the Committee, it is an
honor and a privilege to appear before you today as President Bush's
nominee to be Assistant Secretary for Trade Development. I appreciate
the confidence President Bush has placed in me and the support of
Secretary Don Evans and Under Secretary Grant Aldonas. Thank you for
scheduling this hearing during a very busy time in the session. I
appreciate your time and look forward, if confirmed, to working with
the Members and staff of this Committee.
It is an honor to appear before the Committee this afternoon. I
have appreciated the opportunity I have had these past weeks to visit
with several of the Members who have shared their recommendations, as
well as some concerns. If confirmed, I would look forward to continuing
the dialogue, meeting with you and your staff on a regular basis. We
are all stakeholders who share common goals of a vibrant economy for
the American people and business community. It is only through
consistent communication, cooperation, and collaboration between all
that these goals can be achieved.
The vision I would bring to this job was best described by
Secretary Evans when he spoke of President Bush's trade policy goals:
``Free minds and free markets are essential to achieving a better and
brighter tomorrow. . . . Our economic, social, and political freedoms
are woven together into a single fabric that allows every human being
to pursue the visions and dreams they have in their hearts. That
understanding is the cornerstone for our trade policy.''
Secretary Evans went on to say, ``What Government can do is create
the environment for people to succeed.'' If reported favorably by this
Committee and confirmed by the Senate, as Assistant Secretary for Trade
Development, I will be committed to helping U.S. businesses succeed in
expanding exports and the jobs they create. I will also work to provide
an environment to succeed for the dedicated professionals of the Trade
Development staff at Commerce who serve as this Nation's day-to-day
link to U.S. industry for trade policy development and promotion.
I believe that my business experience, as well as my years in
public service, serving at both the Federal and State level, has
prepared me to take on this important challenge. I am, at heart, a
businesswoman with a profound respect and enthusiasm for the creativity
and courage it takes to own and to operate a successful business. I was
blessed with a bright and gifted father who gave me my first job out of
graduate school--the task of turning a small company into a four
million dollar business. In the process, I learned important business
and life lessons, which I hope, will continue to serve me well as they
have throughout my career.
My career in public service spans some 15 years, including 9 years
overseeing tourism trade development and promotion at the Department of
Commerce, and later at New Jersey's Commerce Department. I am pleased
to say that on both Federal and State levels, we created an innovative
and effective program to assist small- and medium-sized tourism
businesses in breaking new ground in key international markets.
If confirmed as Assistant Secretary for Trade Development, I will
focus on three specific areas: Concentrate Trade Development resources
to best benefit American exporters, expand the benefits of trade to
small- and medium-sized businesses, and strengthen Trade Development's
outreach programs to the business industry.
First, I will work with the Trade Development team to focus on
priorities outlined by Under Secretary Aldonas when he met before this
Committee, namely, ``to expand opportunities for American business (by)
concentrating resources in ways that are likely to provide the greatest
pay-off for American businesses trying to gain access to world markets.
. . identifying promising targets for our exporters and providing the
support to reach those markets.''
In this regard, the Trade Development area shares the
responsibility for export assistance and promotion with our sister
units within the International Trade Administration--the domestic and
foreign offices of the U.S. and Foreign Commercial Service, the Market
Access and Compliance team, and the Import Administration. Trade
Development's role in this family, however, is distinct. Trade
Development's industry sector offices devise export assistance
programs, export strategies and trade events tailored to the needs of
individual industries. Trade Development also serves as the principal
link for industry input, data, and economic analysis, which form the
foundation for the development of our trade agreements and monitoring
of their impact. The work of Trade Development's industry experts
provides the foundation for the President's trade negotiators in
multilateral or bilateral fora--both for trade liberalization and
retaliation. Finally, we work closely with our sister-offices in ITA to
ensure foreign countries' compliance with sector-specific international
trade agreements.
Whether it is providing critical data and economic analysis which
represent the underpinnings of these trade negotiations, managing
industry participation in trade missions, or advocating on behalf of
U.S. companies seeking foreign government contracts, the trade
development team is on the frontline of action to ensure that U.S.
firms have the maximum opportunity to compete effectively in world
markets. Trade Development's industry experts and trade specialists
span the gamut of U.S. business sectors--from basic manufacturing to
high-technology and service exports.
Trade Development is also home to the Trade Information Center
(TIC), which was established by the Trade Promotion Coordinating
Committee. The TIC provides a wealth of export information and a single
point of contact within Government for export assistance and
counseling. We have tremendous resources and talent within the Trade
Development program. If confirmed, I will work to marshall those
resources for the greatest benefit, working in concert and
collaboration with our ITA and USTR colleagues.
Second, I will work to support Under Secretary Aldonas' commitment
to ``expanding the benefits of trade to all Americans,'' for small- and
medium-sized businesses, including minority-owned businesses. There is
tremendous opportunity here when you consider that small- and medium-
sized businesses account for some 97 percent of all U.S. exporters, but
only 30 percent of U.S. merchandise exports. Nearly two-thirds of these
exporters, however, post sales to only one foreign market. Encouraging
these exporters to expand to other markets represents an enormous
growth opportunity.
Third, if confirmed, I will work toward further strengthening our
outreach to industry, including our industry advisory committees and
the President's Export Council, as well as the many Federal and State
departments and agencies involved in trade development and promotion.
In this regard, I commend the efforts of Chairman Sarbanes in working
with Secretary Evans and Under Secretary Aldonas in focusing on the
important role of the Trade Promotion Coordinating Committee (TPCC). If
confirmed, I look forward to supporting him in maximizing the synergies
of the TPCC. Helping businesses to succeed in the global market means
helping them navigate through and access the multitude of resources
available.
On a personal note, I would like to thank the important people in
my life who have created an environment for me to succeed. I would like
to take this opportunity to thank my family and friends, many of who
are here today. Without their support I would not be able to take on
this incredible responsibility. I would like to thank my mother, and my
father, who sadly is no longer with us. I will be forever grateful for
his trust and inspiration. I would like to thank my mother-in-law for
her confidence and her prayers. She was a true friend and was always
there for me. Two weeks ago, she lost her courageous battle with
multiple myeloma. I will be forever grateful to my father-in-law and
above all to my husband, Joe, for their love and support, especially
during this difficult period.
In closing, I would like to take this opportunity to thank the
Chairman, Senator Gramm, and other Members of the Committee for your
time and consideration this afternoon.
PREPARED STATEMENT OF MICHAEL J. GARCIA
Assistant Secretary-Designate for Export Enforcement
U.S. Department of Commerce
July 26, 2001
Chairman Sarbanes, Senator Gramm, and Members of the Committee: It
is a great honor for me to be here today as the President's nominee for
the position of Assistant Secretary of Commerce for Export Enforcement.
I thank the President and Secretary Evans for their confidence and
trust in me. If confirmed, I will look forward to working closely with
you and your staff.
Mr. Chairman, the Bureau of Export Administration (BXA) has a
critical mission: Protecting, and indeed enhancing, national security
while preserving the right of American businesses to export their
products. I take this responsibility very seriously. If confirmed, it
will be my privilege to work with the career law enforcement officials
within BXA to fulfill our national security and law enforcement
mission.
As a former Federal prosecutor, I fully appreciate the critical
importance of protecting this country's national security by ensuring
that our sensitive technologies do not fall into the wrong hands.
Recently, I successfully prosecuted individuals responsible for the
bombings of our Embassies in East Africa. I know firsthand the real
danger of our adversaries illegally obtaining U.S. products which can
be used against our citizens worldwide.
I look forward to leading the enforcement arm of BXA and working
alongside Under Secretary Ken Juster and Assistant Secretary Jim Jochum
in advancing BXA's important trade control mission. I will work hard to
ensure that any violations of U.S. dual-use exports are detected,
investigated, and sanctioned. Together with the special agents,
intelligence analysts, and other key enforcement staff in BXA, I will
dedicate my tenure in Washington to the protection of national security
through enforcement of the export laws and regulations.
On a personal note, I want to thank my wife, Liana, and my
children, Manuel Jose and Liana Sofia, who are in the audience today,
for agreeing to come to Washington with me to serve in this
Administration. I will take my responsibilities seriously but cannot
succeed, and would not be here, without their love and support.
Let me conclude by thanking the Committee for its prompt
consideration of my nomination and by reiterating my commitment to work
closely and cooperatively with you.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR JACK REED FROM LINDA
MYSLIWY CONLIN
As you may or may not know, the jewelry industry in the
past was fairly large and competitive in the State of Rhode
Island. Over the last couple of decades, competition from
abroad, specifically Asia, has had a decimating effect on the
industry as a whole.
Q.1. What do you think we can do to try to maintain the
competitiveness of this industry in this country?
A.1. In March 1997, the Department of Commerce published ``The
U.S. Jewelry Industry: Federal Interagency Report on U.S.
Jewelry Competitiveness Issues.'' The study found that many
competitive issues facing the U.S. jewelry industry stem from
broad economic trends over which neither the industry nor the
Federal Government has much control.
While this conclusion remains valid today, this study also
recommended a number of steps to improve the industry's
competitiveness. One of these was to expand sales through
increased exports, and Commerce has worked with the industry to
do just that. The Commerce Department to date sponsored four
U.S. Product Literature Centers to increase exports. In
addition, the study recommended that industry members work
through the Manufacturing Extension Partnership Centers to
improve productivity. Since these Centers are linked to the
Commerce Department's Technology Administration, I would be
pleased to put interested industry representatives in touch
with them. And if confirmed, I would also be pleased to work
with the industry on a third recommendation by putting industry
representatives in touch with the Small Business Administration
to make sure they are aware of assistance programs run by that
agency.
In addition, the study recommended actively pursuing a
policy of opening foreign markets. The President's trade agenda
includes negotiations on a Free Trade Area of the Americas, a
new negotiating round in the WTO, and Free Trade Agreement
talks with Chile and Singapore. If confirmed, I will look for
ways to enhance the competitive opportunities for the jewelry
industry in these negotiations as well. U.S. companies' exports
of jewelry increased more than 150 percent in the past decade,
and the NAFTA and WTO negotiations helped in this effort by
reducing or eliminating their tariffs on U.S. jewelry.
Be assured that, if confirmed, I will work closely with the
industry to help in implementing these and other
recommendations of the 1997 study.
Q.2. What other ideas do you have to encourage these
manufacturers to turn possibly to other industries that are
perhaps more profitable at this point?
A.2. Some U.S. jewelry manufacturers have achieved success,
despite intense foreign competition, by using their market
knowledge to find specific niche markets, by adopting improved
technologies, or by sourcing some especially labor-intensive
products and components from lower-wage countries. An
interagency study team visited a successful Rhode Island
company that had used its manufacturing expertise to
manufacture trophies and similar products. I believe our
Manufacturing Extension Partnership Centers may also be able to
help jewelry firms diversify into other, possibly more
profitable markets, and I would be pleased to put the jewelry
manufacturers in touch with them.
Q.3. I have for some time trumpeted potential regulations that
would mandate indelible country of origin labeling on jewelry
products and jewelry boxes from abroad. What are your thoughts
on this idea?
A.3. Many consumers prefer American-made products. Currently,
U.S. Customs allows country of origin to be labeled with a
gummed label or a hang tag, under certain circumstances. Some
jewelry manufacturers indicate that some importers and
retailers remove these tags illegally, making origin difficult
for consumers to identify. Customs has stated that it will
prosecute importers and retailers that illegally remove country
of origin labels or tags, but that it needs industry's help to
identify violators.
I recognize the concerns that the jewelry manufacturers
have on this issue. However, as I understand it, indelible
markings on jewelry products themselves frequently may be too
small to be legible or impair the value of the products. Again,
I understand your concerns on this issue and I will work with
the jewelry industry to determine if there can be an effective
solution to this problem.
Q.4. Do you think this is something we can do without it being
cost prohibitive or being unfair to our foreign competitors?
A.4. As I have noted, indelible marking on some jewelry
products can be difficult because of the small size and
intrinsic value of the products. Cost can also be an important
factor. Also, our trading partners may consider that such
marking would represent an unfair trade restriction by
potentially damaging the product, materially reducing its
value, or unreasonably increasing the cost. Again, if
confirmed, this is an area, which I will explore closely with
the industry to see if there is an effective way to meet their
concerns while addressing our international obligations.
I am also quite concerned about the state of our textile
manufacturing industry in Rhode Island, which has sustained
some heavy hits over the past two decades, similar to many
other parts of the country.
Q.5. What are your thoughts regarding the state of the textile
industry in the Nation as a whole?
A.5. There is no question that the textile industry is going
through one of its more difficult periods. The textile industry
has suffered significant losses in employment in recent years
and, although some of these losses may be explained by
productivity improvements, clearly imports and other economic
factors have played an important role. As you know, the
slowdown in the U.S. economy has also aggravated the situation.
A number of people in the industry have expressed their
strong concerns about current conditions, and I take those
concerns very seriously. I intend to examine carefully in what
ways we can work with the industry to help improve the
situation.
Q.6. Do you think that there are still ways that we can
effectively protect this industry before it completely
disappears, and without being overly protectionist?
A.6. Secretary Evans has indicated the strong priority he
places on ensuring compliance with our trade agreements, and I
intend to enforce these agreements with respect to textiles and
apparel. Commerce chairs the interagency Committee for the
Implementation of Textile Agreements (CITA), which enforces the
provisions of the WTO Agreement on Textiles and Clothing (ATC),
as well as our bilateral agreements with non-WTO countries.
This enforcement includes the undertaking of safeguards actions
in cases where there is a threat of serious damage to
particular sectors of our industry, and strong action to curb
illegal transshipment and attempts to circumvent U.S. quotas.
In this regard, the United States has adopted a new
transshipment policy which enables us to proscribe
transshipping companies from exporting to the U.S. market and
acts as an inducement to foreign governments to take stronger
action against transshippers. The Administration is also
working with U.S. industry to ensure that they achieve maximum
benefit from the Trade and Development Act of 2000.
If confirmed, I will work to ensure these agreements are
fully implemented and will press our trading partners to open
up their markets to our textile and apparel products.
Q.7. Do you have any other recommendations for States like my
own to deal with the decimation that this industry has
experienced at the hand of cheap competitors from abroad?
A.7. The Administration has strong concerns about current
conditions in the industry. The Commerce Department, through
Trade Development's Office of Textiles and Apparel, has a
multifaceted program in place designed to help the textile and
the apparel industries remain viable and competitive. The
Office administers the U.S. textile quotas, implements the
textile provisions of both the NAFTA and the Trade and
Development Act of 2000, administers textile and apparel
research grants for the National Textile Center and The
Textile/Clothing Technology Corporation, and has a special
export program in place specifically designed to assist this
industry.
The Department of Commerce is actively encouraging U.S.
companies to take advantage of legislation, such as the Trade
and Development Act of 2000, which encourages the use of U.S.
textile components in apparel manufactured in beneficiary
countries. This includes an active program of seminars and
outreach to advise U.S. manufacturers on the provisions of the
Act and how they can enter into effective commercial
relationships with companies in the Caribbean Basin and in
Africa.
In addition, the Commerce Department's Economic Development
Administration maintains a Trade Adjustment Assistance program
designed to help companies impacted by imports to obtain
financing on favorable terms, and the Labor Department
maintains a similar Trade Adjustment Assistance program to help
displaced workers find new jobs.