[Senate Hearing 108-270]
[From the U.S. Government Publishing Office]
S. Hrg. 108-270
DETERIORATING BUILDINGS AND WASTED OPPORTUNITIES: THE NEED FOR FEDERAL
REAL PROPERTY REFORM
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HEARING
before the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
OCTOBER 1, 2003
__________
Printed for the use of the Committee on Governmental Affairs
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WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
James R. McKay, Counsel
Johanna L. Hardy, Counsel
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Donny R. Williams, Minority Professional Staff Member
Amy B. Newhouse, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Collins.............................................. 1
Senator Bennett.............................................. 16
Senator Coleman.............................................. 25
Senator Carper............................................... 26
Prepared statement:
Senator Lautenberg........................................... 31
WITNESSES
Wednesday, October 1, 2003
Hon. David M. Walker, Comptroller, U.S. General Accounting Office 3
Johanna L. Hardy, Senior Counsel, Committee on Governmental
Affairs........................................................ 9
James R. McKay, Counsel, Committee on Governmental Affairs....... 10
William C. Stamper, Deputy Assistant Secretary for Facilities
Management and Policy, U.S. Department of Health and Human
Services....................................................... 17
Martha B. Knisley, Director, Department of Mental Health,
Government of the District of Columbia, accompanied by David
Norman, Acting General Counsel, Department of Mental Health.... 20
Alphabetical List of Witnesses
Hardy, Johanna L.:
Testimony.................................................... 9
Prepared Statement........................................... 64
Knisley, Martha B.:
Testimony.................................................... 20
Prepared Statement........................................... 77
McKay, James R.:
Testimony.................................................... 10
Prepared Statement........................................... 65
Stamper, William C.:
Testimony.................................................... 17
Prepared Statement........................................... 67
Walker, Hon. David H.:
Testimony.................................................... 3
Prepared Statement........................................... 32
Appendix
Letter from William C. Stamper, dated Novermber 12, 2003, in
response to an article in The Washington Post.................. 82
Powerpoint presentation by Mr. McKay and Ms. Hardy consisting of
photographs of the West Campus................................. 83
DETERIORATING BUILDINGS AND WASTED OPPORTUNITIES: THE NEED FOR FEDERAL
REAL PROPERTY REFORM
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WEDNESDAY, OCTOBER 1, 2003
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:32 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Bennett, Coleman, and Carper.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. The Committee will come to order.
Good morning. Today the Committee on Governmental Affairs
will examine the challenges the Federal Government faces in
managing its real property. The government's real property
assets are worth an estimated $328 billion and include more
than 3 billion square feet of building space.
Some of the government's assets are historically
significant and valuable yet deteriorating and rundown. In
January of this year, the General Accounting Office added
Federal real property to its High-Risk List. The High-Risk List
is reserved for programs that are particularly vulnerable to
waste, fraud, abuse, or mismanagement.
The GAO's work in this area has shown that the Federal
portfolio is in an alarming state of deterioration, in large
part because of the Federal Government's ineffective management
of these assets.
The Federal Government also has considerable property that
it no longer needs. Just weeks ago, the General Accounting
Office released a report identifying 600 vacant properties and
327 underutilized properties owned by just three agencies--the
General Services Administration, the Department of Veterans'
Affairs, and the U.S. Postal Service.
These 927 properties represent more than 2,000 acres and
32.1 million square feet of vacant or underutilized space. By
way of comparison, the Pentagon consists of approximately 3.7
million square feet of office space. This means that the GSA
alone currently possesses the equivalent of almost five
Pentagons' worth of vacant or underutilized space, which is
costly to maintain and could be put to better use. We can and
must do better.
To see an example of underutilized Federal property, the
Committee staff visited the L. Mendel Rivers Federal Building
in South Carolina. It has sat vacant since it was damaged in a
hurricane in 1999, despite the fact that it is located on
valuable property on the edge of downtown Charleston.
Another example of underutilized Federal property is right
down Pennsylvania Avenue. Due to government inaction, the Old
Post Office Pavilion Annex has been empty for more than 10
years.
Adding insult to injury, the Federal Government spends
considerable money to maintain this empty space. This is
government waste, plain and simple.
Today I have asked David Walker, the Comptroller General of
the General Accounting Office, to report to this Committee on
the longstanding challenges facing the Federal Government in
this area. Federal property is, after all, the property of the
American people.
A disturbing example of the mismanagement of taxpayers'
property can be found right in the Capitol's backyard. St.
Elizabeths Hospital was founded in 1855 to provide for the
treatment of individuals suffering from mental illness. This
hospital served as the first and only national Federal mental
health facility. At its height in the early to mid-1960's, St.
Elizabeths had almost 4,000 employees who cared for
approximately 7,000 patients.
The deterioration of the West Campus of St. Elizabeths is a
particularly tragic example of how the Federal Government's
mismanagement of its real property can result in massive waste
of taxpayer dollars.
This hearing will examine how this once elegant, thriving
Federal property has deteriorated to the point that it could
cost nearly $500 million to rehabilitate its buildings.
Many people mistakenly believe that St. Elizabeths is owned
by the District of Columbia. In fact, that is only half right.
St. Elizabeths is fairly equally divided between an East and
West Campus, the former of which was given to the District of
Columbia by an act of Congress in 1984. The 182-acre West
Campus is still owned by the Department of Health and Human
Services but is currently occupied by the D.C. Department of
Mental Health under a use permit signed in 1987. As a result,
HHS and the D.C. Government share responsibility for its
deplorable condition.
Although the D.C. Government by agreement was responsible
for the upkeep of St. Elizabeths, HHS as owner and landlord
should never have allowed St. Elizabeths to reach such a
deteriorated state.
The poor oversight of St. Elizabeths by both HHS and the
D.C. Government is inexcusable. What was a valuable asset in
the mid-1980's today is a massive liability.
I have visited this historic property, and its condition is
truly deplorable. The Committee staff have documented the
extent of damage resulting from the neglect of this property
and will be presenting the results of that investigation at our
hearing today. I have also asked witnesses from the Department
of Health and Human Services and the D.C. Government to testify
today about the management of St. Elizabeths.
Although St. Elizabeths Hospital may be an extreme example
of mismanagement of federally-owned property, it is not an
isolated case. If a 182-acre historic landmark just 2 miles
away from the Capitol can be so mismanaged, what confidence can
we have that thousands of other Federal buildings scattered
across the country are being managed effectively, efficiently,
and properly to preserve their value and to ensure their best
use.
I look forward to hearing the testimony of all our
witnesses today as we tackle this issue.
As our first witness, I am very pleased to welcome back to
the Committee the Hon. David M. Walker, Comptroller General of
the General Accounting Office. Since assuming this
responsibility on November 9, 1998, Mr. Walker has done an
outstanding job as the Nation's chief accountability officer.
He has been a leader in improving the performance of the
Federal Government on behalf of the American taxpayer. This
Committee works very closely with Mr. Walker and with the GAO
on a wide variety of projects.
When Federal real property management was added to the
GAO's High-Risk List, I talked with Mr. Walker about working
with the Committee so that we do not keep adding programs and
agencies to the High-Risk List but actually try to identify the
problems that land them on the list and the steps that could be
taken to get them off the list.
So it is a pleasure to welcome Mr. Walker here today. You
may proceed.
TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL, U.S.
GENERAL ACCOUNTING OFFICE
Mr. Walker. Thank you, Madam Chairman. It is a pleasure to
be back before the Senate Governmental Affairs Committee.
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\1\ The prepared statement of Mr. Walker appears in the Appendix on
page 32.
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I would ask that my entire statement be included in the
record.
Chairman Collins. Without objection.
Mr. Walker. Thank you. I will now move to summarize it.
As you pointed out, Madam Chairman, the GAO added the area
of real property management to our High-Risk List in January
2003. This is a major challenge that crosses a number of
organizational boundaries within the Federal Government. It is
also a major multidimensional challenge involving billions of
dollars, with significant budget, safety, security,
environmental, and economic development implications.
Much of the government's current infrastructure is based
upon a 1950's environment and business model. The world has
changed significantly since then, yet our approach to
infrastructure has not kept pace. The result--billions in
excess property that is inadequately maintained and not
properly secured. Taxpayer dollars are being wasted on
maintaining excess properties, and asset recoveries are not
being achieved for the benefit of taxpayers. In addition, there
are significant opportunity costs associated with the failure
to act.
The excess property challenge spans numerous Federal
agencies, including DOD, the Postal Service, VA, GSA, the DOE,
and the State Department, just to name a few. Given current and
projected Federal budget deficits, we cannot afford to maintain
the status quo in this area.
We have boards just to illustrate four particular
properties, and I know that this Committee is going to have a
number of witnesses after me dealing with this first property,
which is St. Elizabeths here in the District of Columbia. But
these four examples are illustrative of a much larger problem.
The first one is St. Elizabeths Hospital, which is largely
a vacant property in the District of Columbia which, as you
noted, a portion of which is owned by the Department of Health
and Human Services.
The next one is a vacated postal facility in Chicago,
Illinois. It is downtown Chicago, Illinois, and yes, that is
the Sears Tower right down the street, so I would say that
property is worth a fair amount of money.
The next one represents an IRS Service Center in Andover,
Massachusetts up on the left. There is also a significant
amount of valuable real estate that is underutilized in that
area.
And the last one on the bottom right is a property in
Portland, Oregon.
These are just four examples of either vacant or
underutilized properties where we are spending money and we are
not recovering asset values in circumstances that could be of
benefit to the taxpayer.
What are some of the steps that need to be taken in order
to address this challenge?
First and foremost, we have to ask the question, who is in
charge? Who is responsible and accountable for making sure that
the billions and billions of dollars of vacant and
underutilized property that the taxpayers own is accounted for
and managed effectively and for the benefit of the taxpayer? It
is not clear right now who is in charge. We have individuals
within the various departments and agencies, but who has been
charged on a government-wide basis on this issue? It demands
that somebody be in charge, responsible and accountable on a
government-wide basis.
Second, how big is the problem? We need timely, accurate,
useful information to understand how many vacant and
underutilized properties we have. We do not have that right
now. There is no consolidated, government-wide list, it is my
understanding, and we need additional transparency over that
list to try to spur people to action.
Third, we need a plan to rationalize any excess
infrastructure.
We also need additional authorities and incentives for
people to act. In some cases, there is going to have to be
legislation to give people additional authorities or incentives
to act, and in some cases, we are going to have to look at our
scoring rules and who benefits from the savings in order to
make sure that actions are taken.
We also need to make sure that there are accountability
mechanisms in place if people do not act; so incentives to do
the right thing and accountability mechanisms if they do not do
the right thing.
And furthermore, given past history, competing stakeholder
claims and interests, and a variety of other considerations, we
may have to employ a government-wide task force or even a BRAC-
type approach in order to rationalize this excess
infrastructure, because there are a variety of stakeholder
interests, and we need to look at this on a consolidated basis
rather than a piecemeal basis in order to try to achieve timely
action.
Now, what type of action is it going to take in order to
get this area off the High-Risk List? There are four general
factors.
First, there has to be an overall transformation strategy
for Federal real property. There needs to be demonstrated
leadership, attention, and commitment to the strategy and
meaningful progress toward its implementation.
Second, there needs to be enactment of real property reform
legislation to give real property-holding agencies the tools
that they need to achieve better outcomes, to foster a more
businesslike real property environment, and to provide for
greater accountability for real property stewardship.
Third, there needs to be a successful implementation effort
of ongoing agency initiatives and adoption of key open GAO
recommendations, critical ones in the real property area.
And last but certainly not least, we need to use a set of
performance measures to assess results and demonstrate
sustained progress toward solving the larger problem over a
reasonable period of time--the larger problem meaning the
excess property, the repair backlogs, poor data, security
challenges, and over-reliance on leasing. Many times, what is
happening is we have this excess property or underutilized
property, yet we are still adding, and sometimes we are
entering into operating leases because of the budget-scoring
rules. Specifically, currently you may get better treatment
under budget-scoring rules and yet it may not be in the best
economic interest of the taxpayers, because there are other
methods that clearly would be less costly for the taxpayers;
yet the way we keep score sometimes causes people to either
take actions they should not take or not take actions that they
should take.
In closing, this subject--real property management--is
illustrative of one of many transformation challenges the
Federal Government faces. It is illustrative of a horizontal
challenge that crosses the various silos or stovepipes in
government, traditionally known as departments and agencies.
The base of government programs, policies, processes,
functions, and operations represents an amalgamation of past
actions that have taken place over decades. They may have made
sense and hopefully did make sense initially. However, given
the profound changes that have occurred in the world, and our
position in the world, and business practices and technological
advances, etc., just to name a few, the status quo is clearly
unacceptable. We have to fundamentally review, reassess, re-
engineer, reprioritize and in some cases eliminate things that
have accumulated over the years because they may have made
sense in the past, but they may not make sense today, and they
may make even less sense in the future.
We are talking about asking fundamental questions like what
the Federal Government should do, how it should do business,
and in some cases, who should do its business. The base is
unacceptable, the base is unsustainable. The clock is working
against us. We need to start acting now.
Thank you, Madam Chairman.
Chairman Collins. Thank you very much, Mr. Walker, for your
excellent overview of this problem.
The Federal Government clearly owns many more properties
than it needs. In a report that was released in August, the GAO
found that there were three agencies--the GSA, the VA, and the
Postal Service--that together held almost 1,000 vacant or
underutilized properties. Obviously, it is expensive to
maintain those properties. And as you point out, in some cases,
we have agencies with vacant buildings leasing space in other
buildings, so the taxpayer in essence is paying twice.
Can you explain why there are so many unused properties in
the Federal inventory? Is it just lack of proper management, or
is it that the system for disposing of those properties is too
cumbersome?
Mr. Walker. I think it is a multidimensional challenge.
First, there is not adequate accountability. We do not have a
person or persons who are put on the line, where their
responsibility is to deal with these issues and they are held
accountable for achieving results.
Second, we do not have a current inventory of how many of
these we have on a government-wide basis.
Third, in some cases, agencies do not have the authority to
enter into out-leasing arrangements or to enter into public-
private partnerships.
Fourth, there are circumstances in which the current budget
scoring rules discourage people from taking certain actions
that they otherwise should take, or encourage them to take
actions such as leasing rather than lease-purchase or purchase
decisions that might make more sense for the taxpayers.
So we do not have the right kinds of incentives and in some
cases the right kinds of authorities. We do not have adequate
transparency, and we do not have enough accountability
mechanisms for the failure to act. So I think we need to take
steps in all those three dimensions and along the lines of what
I articulated in my opening statement.
Chairman Collins. Since the GAO added real property
management to the High-Risk List, have you seen any improvement
in the management of Federal property? The reason I am asking
this question is that as you and I have discussed before, there
are certain agencies and programs that are on the High-Risk
List every 2 years when it is released--some have been on for
as long as a decade. And what I want to get into as Chairman of
this Committee is helping programs and agencies get off the
list.
Now that you have identified this area, are you seeing any
progress or any response to your findings?
Mr. Walker. The answer is yes, and it is from two
dimensions. The first dimension is a government-wide dimension.
As I mentioned, this is a government-wide challenge. It is more
acute in some departments and agencies than others, but it is a
government-wide challenge. I have had conversations with the
Director of OMB and the Deputy Director of OMB for Management
as well as other parties. They are taking this very seriously.
As you know, when we add something to the High-Risk List,
that is intended to bring light to an issue; with light, you
get heat, and with heat, hopefully, you get action. OMB is
looking at whether or not they are going to add this item to
the President's Management Agenda. They are taking it
seriously, and that is encouraging.
There are a number of other departments and agencies who
are starting to take additional actions in this area. But I
think we cannot underestimate the degree of difficulty and the
significance of this issue. It is going to take action by both
the Congress as well as the Executive Branch. It is going to
take the sustained attention of a variety of parties over an
extended period of time to get to where we need to be, but we
need to get started now.
Chairman Collins. One aspect that surprised me as our
Committee has been investigating this issue is the lack of
information that many agencies seem to have about their own
property. If you survey Federal agencies, you will find that it
is very difficult to get basic information about what they own,
what they occupy, what the condition is.
GAO has found that many agencies do not even have current
data about the property that they own, and even when they do,
that their inventories often lack key information needed to
make budgetary and other strategic decisions.
It seems basic to me that if agencies do not even know what
properties they own, they are not going to be doing an
effective job managing it.
Would you comment on that problem and how you see that
being addressed?
Mr. Walker. I think you put your finger on a key issue. You
manage what you measure, and if you do not have adequate
measurements here, you are not going to be able to effectively
manage it. We do not have adequate information with regard to
the nature and scope of this challenge in certain agencies, and
we clearly do not have it on a government-wide basis. We need
that. We need to have a currant inventory. We need to have
adequate information. We need to have transparency so the
Congress and other parties can monitor what is going on. So
that is one of the fundamental steps that I think we need to
take.
Chairman Collins. Today, as you know, we are looking at St.
Elizabeths Hospital as a case study of some of the problems,
and as you know from GAO's own extensive review of St.
Elizabeths, the West Campus has deteriorated significantly
during the 16 years that it has been used by the District of
Columbia.
There have been disagreements between the Federal
Department of Health and Human Services and the D.C. Government
as to who is responsible for the deterioration of St.
Elizabeths and who is responsible for many of the costs to
remedy the years of neglect and deterioration.
What can we do to make sure that when the Federal
Government is leasing a building to a non-Federal entity that
it is still being effectively managed, and how would you assess
responsibility for the deplorable state of St. Elizabeths?
Mr. Walker. Well, the fact of the matter is as you have
pointed out, the Department of Health and Human Services owns
about half the property, the West portion of that property.
Even if you enter into leasing arrangements or use arrangements
with a third party, whether that be a governmental party or a
private sector party, you still own it. You still have
stewardship responsibility and accountability. So part of it
comes back to making sure that we have the people responsible
and accountable for making sure that the right thing is done,
the right types of contractual arrangements are entered into,
that these issues are addressed up front as to who is
responsible for what.
I do think, however, that St. Elizabeths is an example of
why we are debating all these questions about who is
responsible and how much it is going to cost, but also the
question is what are we going to do with the property. In the
time that we are debating all of this, we are incurring
additional cost, there is additional deterioration, and we are
not recovering asset values.
One thing that I would like to raise, Madam Chairman--and I
do not know if they have considered this or not, but it is
something that we did at GAO, and it may make sense here--as
you know, the GAO building is a national historic property. The
GAO building had an asbestos problem. And we entered into an
arrangement--a public-public partnership, but it could easily
have been a public-private partnership. Specifically, in our
case, we entered an arrangement with the Army Corps of
Engineers where they agreed to work on remediation of our
asbestos problem. We then ended up leasing space to them and we
gave them rent concessions to pay for the remediation effort.
Some of these same factors exist for St. Elizabeths--so what if
anything is being done to try to work out either a public-
public or a public-private partnership to restore and redevelop
this area such that the parties who might want to use it and
who might benefit economically might end up incurring some of
the cost to deal with the remediation, to deal with the
restoration, and in a way that we can actually make some
progress. I am not so sure that has been considered, but I
think it is something that needs to be done.
Chairman Collins. When I toured St. Elizabeths, I was
struck by the lack of common sense maintenance of roofs, of
steam tunnels, for example, that would have prevented at least
a substantial part of the deterioration. How good a job does
the Federal Government do in maintaining its properties?
Mr. Walker. Well, it obviously varies by agency and by
location. The ``bottom line'' answer is ``Not good enough,''
and we need to do a better job. But in the aftermath of
September 11, 2001, we have got a new dimension that we need to
be concerned about. For so many years, we had extra money that
we were paying on maintenance, we had deferred maintenance
because of deteriorating properties, and we had asset recovery
values that we were not achieving because we were not taking
the right steps.
I would respectfully suggest that we have a new dimension
now. We need to rationalize our excess infrastructure. We need
to streamline it down to absolutely the minimum amount that we
need, because what we have to do is not only make sure that we
deal with the budgetary aspects; we have to deal with the
security aspects. We need to minimize our footprint. We need to
have as few Federal properties and facilities as possible in
order to save money and gain asset recovery values, so we can
properly secure those facilities. This is not just an issue in
the United States; it is also an overseas issue in connection
with our embassies. This is a real issue for the State
Department. We need to be rationalizing our presence overseas,
which many countries have already started to do, like the
United Kingdom and others, in light of recent world events and
changing circumstances.
Chairman Collins. Thank you. I want to thank you very much
for your testimony this morning. It has given us a very helpful
overview of this problem as we proceed.
We are looking at both legislative and other reforms, and
if GAO as your work continues, has some specific suggestions
for the Committee, we would very much welcome them.
Mr. Walker. Thank you, Madam Chairman.
Chairman Collins. Thank you.
For our next panel, I would like to welcome two members of
the Committee staff, Johanna Hardy, and James McKay. They are
both members of the Committee's legal and investigative staff.
They have conducted an extensive investigation of the property
at St. Elizabeths Hospital. They have also prepared a
powerpoint presentation consisting of photographs of the West
Campus that detail much of its deterioration.\1\
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\1\ The powerpoint presentation by Mr. McKay and Ms. Hardy
consisting of photographs of the West Campus appears in the Appendix on
page 83.
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I want to thank the staff for its investigation. I think
they did a terrific job.
I will ask Ms. Hardy to proceed.
TESTIMONY OF JOHANNA L. HARDY,\1\ SENIOR COUNSEL, COMMITTEE ON
GOVERNMENTAL AFFAIRS, U.S. SENATE
Ms. Hardy. Madam Chairman, my name is Johanna Hardy,
sitting to my left is James McKay. We are part of the
Governmental Affairs Committee's legal and investigative staff.
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\1\ The prepared statement of Ms. Hardy appears in the Appendix on
page 64.
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Over the last 8 months, the Committee has been conducting
an investigation into the management of Federal real property.
As part of the investigation, we looked at several Federal
buildings that were underutilized, vacant, or deteriorating.
St. Elizabeths Hospital was the most striking. The West
Campus of St. Elizabeths is owned by the Department of Health
and Human Services. St. Elizabeths, of course, is right here in
the Capitol's back yard. In fact, we are the same distance from
St. Elizabeths as we are from the Lincoln Memorial. Yet,
despite the proximity, what we found during our five visits to
St. Elizabeths could not contrast more from the well-maintained
Capitol complex.
The St. Elizabeths property includes over 300 acres of
land, 182 of which compose the federally-owned West Campus. The
television monitor shows an overhead picture of St. Elizabeths
which is bounded by the red. There are 61 buildings with
approximately 1.1 million square feet on the West Campus alone.
In addition, the campus contains a Civil War cemetery,
sweeping views of the downtown and monumental core of the city,
as well as a park-like landscape. In addition, the West Campus
of St. Elizabeths is designated as a National Historic
Landmark.
In 1987, pursuant to an act of Congress, the hospital's
East Campus was transferred to the District. Shortly
thereafter, HHS entered into various agreements with the
District to allow the District to use the federally-owned West
Campus.
St. Elizabeths Hospital, the first and only national
Federal mental health facility, began its operations in 1855.
For more than a century, the hospital was a world premier
mental health and research facility. Since the District assumed
responsibility for the D.C. mental health functions, St.
Elizabeths' patient population has significantly decreased, as
has the District's need for the facilities.
During the 1990's, the District began moving personnel and
property from the Federal West Campus to the East Campus. While
all personnel have been relocated to the East Campus,
considerable District property still remains in vacant West
Campus buildings owned by HHS.
Chairman Collins. Thank you. Mr. McKay.
TESTIMONY OF JAMES R. McKAY,\1\ COUNSEL, COMMITTEE ON
GOVERNMENTAL AFFAIRS, U.S. SENATE
Mr. McKay. Madam Chairman and Members of the Committee, I
would now like to explain the current situation at St.
Elizabeths and then begin a slide presentation.
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\1\ The prepared statement of Mr. McKay appears in the Appendix on
page 65.
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Although the District's personnel have vacated the West
Campus, a substantial amount of District property remains
including patient records, employment files, billing records,
personal items, and furniture.
Subsequent to the start of our investigation, the District,
GSA, and HHS signed an agreement to provide for the removal of
the District's remaining items. After the removal of all
District items from the West Campus is complete, HHS and GSA
plan to begin mothballing the buildings in compliance with
standards set by the Secretary of the Interior. ``Mothballing''
is the process by which a building is deactivated and
temporarily sealed to protect it from the elements and to
secure it from vandalism. It is not returning a building to
productive use.
Estimates of the cost to complete the mothballing of the
entire West Campus vary, but according to a February 2003
estimate provided to GSA, the cost will be at least $18
million, or approximately double an estimate found in a GAO
report from just 2 years earlier.
We would now like to begin a slide presentation that shows
the conditions in which we found St. Elizabeths during our five
visits to the West Campus. We have also provided a color copy
of the slide presentation to each Member of the Committee.
[Powerpoint presentation.]
The following slides were taken in and around the Center
Building, the most historic building on the West Campus.
Ms. Hardy. As we go through these slides, it is important
to highlight the Stabilization and Mothballing Study completed
this year by consultants hired by GSA, which highlighted the
problems that needed to be rectified on other buildings on the
West Campus prior to them being mothballed. It is interesting
to note that many of those problems, including furnishings and
debris still in the buildings, exist in the Center Building
even though it has supposedly already been mothballed.
Mr. McKay. The slides that we are looking at are photos of
various rooms in the Center Building. You will notice ceilings
and floors collapsing as well as furnishings and debris
remaining in the building.
Here is the room in which the poet Ezra Pound was confined
between 1946 and 1958. This further illustrates the historic
significance of the property.
Here are some good examples of how many of the floors in
the Center Building are collapsing. In many cases, the floor
below can clearly be seen through the collapsing floor.
In the Center Building's basement, many of the wooden
supports have rotted and have been replaced by these temporary
metal poles.
This picture and the next are of the last rooms the
District occupied in the Center Building. Besides the obvious
poor condition of the room, what this picture does not fully
capture is the sagging floor. An engineering firm that examined
this floor described it as having ``failed.'' As late as 1997,
District employees occupied this room, which was used for
photocopying. We understand that they complained to the
District about the floor to no avail, then to HHS. HHS did
write a letter to the District supporting the employees, but
nothing was done. We were told that eventually, the District
employees took matters into their own hands and moved from one
side of the room to the other.
This further highlights the deterioration of St.
Elizabeths, the District's lack of maintaining the buildings it
was occupying, and HHS's failure to preserve and protect its
own property.
The following two slides were taken in the gymnasium
located on the top floor of the Center Building. As you can
see, a portion of the roof has collapsed, and there has been
extensive water damage.
Here is a bathroom located off the gymnasium. Again, the
roof is collapsing, and there is water damage. On one visit to
the site, the water was actively streaming into the room.
In this slide and the next, you see an open door and a
tunnel leading directly into the Center Building.
The next several slides show some of the refuse that has
accumulated behind the Center Building. This slide shows
several barrels, some marked as containing chemicals.
Ms. Hardy. The next couple of slides not only show the
amount of trash and debris left outside the buildings, but on
one visit, we captured pictures of an individual who, according
to District representatives, engages in informal salvage work.
This person was allowed to enter the site in what is supposedly
the secure West Campus.
Mr. McKay. The bakery is another historic building. On one
visit, we could not even enter the bakery because the floor was
flooded with water.
And despite the fact that this picture was taken several
days after the last rainstorm, water damage is still clearly
visible, and in fact, standing water can still be seen on the
floor of this room.
Ms. Hardy. This is important to highlight because of the
potential consequences of standing water. In the study
completed by the GSA consultant that I referenced earlier, the
study highlighted a sprinkler accident in another building that
was never contained or mopped up. This caused rotting and
rusting of interior structural elements and resulted in a
massive infestation of termites that badly damaged that
building.
Mr. McKay. The remaining slides are taken of the
Administration Building, which was vacated by District
personnel in January. Many of you will recognize this building
from the movie ``A Few Good Men.''
According to GSA's Mothballing and Stabilization Report
from earlier this year, it will cost around $270,000 to
mothball this building.
The following slides are taken of the Administration
Building's interior. Notice paint peeling, mildew, open windows
that expose the interior of the building to the elements, and
items left by the District. It is our understanding that HHS
has repeatedly asked the District to remove their items.
Ms. Hardy. This slide shows damage to items left in the
building, including papers and records. We obtained this binder
from the Administration Building as an example of the condition
of many of the records left on the campus. The binder contains
travel and expense records, including names and Social Security
numbers of U.S. Department of Health and Human Services
employees. There appears to be some sort of growth on the
binder; the binder and its contents are clearly warped and
damaged, and even through the plastic bag storing it, there is
an odor emanating from this object.
This is indicative of the state in which we found a number
of records and items left in the building.
Mr. McKay. In this area of the Administration Building,
there was a strong odor of mildew, humidity from the steam
tunnels, and leaking water.
In this slide, you will notice extensive growth of mold on
the wall.
And this appears to be some sort of animal print, probably
from a raccoon, that we found on the stairway leading from the
main floor to the second floor of the Administration Building.
The following slides were taken in the basement of the
Administration Building. This slide shows water actively
streaming into the basement, and as you can see, items left in
the basement have suffered extensive damage from the water and
moisture and are now totally ruined.
Ms. Hardy. The last set of slides demonstrates the types of
files and records we found left in the Administration Building.
I am holding up an example of those files. According to
District officials, they are in the process of removing these
items and maintain that the building is secure and that there
is controlled access to the campus. However, on one visit, the
front door of this building was unlocked and, as mentioned
previously, on all of our visits, a number of windows were left
open.
Mr. McKay. This slide was taken in the basement of the
Administration Building. As you can see, due to the water
damage, the filing cabinets are warped and rotting. The filing
cabinets and several open shelves in this room contain what
appeared to be thousands of patient records going back decades
to when HHS still occupied the West Campus.
The types of records we found included a file with a
corporate credit card; boxes of documents labeled
``Confidential--Please Shred''; lab results containing patient
personal information. In one room of the Administration
Building, we found folders of patient records strewn on the
floor, and sitting on top of these records was medical
information for a 13-year-old girl. Here, we have redacted any
identifying information, but the information included her
Social Security number, her parents' names, her address and
birth date. We saw literally hundreds of records like this.
This information was found right next to this open window.
More information was found in the computer room, including
computer tapes containing Medicaid outpatient claims, some of
which were also strewn on the floor.
Moving the West Campus from a mothballed state to
productive use is likely to be extraordinarily expensive. As
discussed earlier, this property is a National Historic
Landmark, and most of the buildings have to be preserved.
The 1985 physical plant audit of St. Elizabeths estimated
the cost of renovating both campuses at between $66 and $69
million, plus the cost of hazardous materials removal. Later, a
1993 estimate, which assumed that 52 percent of the West Campus
would continue to be used for the District's mental health
services with the remainder adapted for other institutional-
type uses, assessed this cost to be as high as between $116 and
$128 million.
The current cost to renovate the West Campus is likely to
run much higher due to its accelerated deterioration. Nearly
every building on the West Campus has severely deteriorated,
and almost all of the buildings will require remediation of
lead and asbestos. They will also need to have their heating
and air conditioning systems completely replaced.
As a result, GSA has estimated that it will cost between
$400 and $450 per square foot to bring St. Elizabeths to normal
occupancy levels and in a manner that complies with the
Secretary of the Interior's Standard for Historic Properties.
If this estimate proves to be consistent across the West
Campus' 1.1 million square feet, restoring it can be expected
to cost between $440 and $495 million.
Ms. Hardy. Earlier this year, GSA hired a consultant to
conduct a Stabilization and Mothballing Study of St. Elizabeths
West Campus. The report concluded, and I quote: ``The current
deteriorating state of the West Campus is the unfortunate
result of the discontinuation of maintenance and repair,'' and
``minor maintenance problems have gone unrepaired long enough
to have had a major impact on the structural integrity of the
buildings.''
The bottom line is that this is not simply one or two
buildings that were lost in the bureaucracy of a large agency.
St. Elizabeths is 182 acres of Federal land, 61 buildings, and
1.1 million square feet of space with the highest historic
designation. The sad demise of this once stunning landmark
institution raises a real question of how other Federal
properties are being managed and maintained.
Thank you. This concludes the staff testimony.
Chairman Collins. Thank you very much for your excellent
presentation.
When I joined you at one point in visiting the West Campus,
I believe you told me that there were some 61 buildings; is
that correct?
Ms. Hardy. That is correct.
Chairman Collins. And I went into two of the major
buildings that we have featured today, but could you give us an
overview of the condition of the other buildings as well?
Ms. Hardy. The two other buildings that we went into
included the bakery, as you saw in the pictures, as well as the
firehouse. All of the buildings seemed to have some level of
decay and deterioration. As you saw with the bakery, there was
standing water and clearly a lot of water damage on the walls
and on the floors.
Chairman Collins. It is very troubling to see the
deterioration of these buildings in an area of the city with
beautiful views. This was once a spectacular campus. Many of
the buildings from the outside look beautiful as well as being
historically significant. But in addition to the deterioration
of the buildings, what I found most astounding and your
presentation amply documents was the number of personal
documents, psychiatric records, and other confidential
materials that had been left unattended.
Could you elaborate on the security of those materials?
Were they easily available to you? Were they open, or was there
any security evident?
Ms. Hardy. The documents inside the building were very
accessible. In terms of the security, we were told by District
officials that they believed that the West Campus was secure,
there was controlled access, and that the buildings remained
secure. But as we indicated in our presentation, on at least
one occasion when we visited the Administration Building where
most of the records were found, the front door was unlocked,
and as you noticed in a number of the slides, a number of
windows open. On at least one occasion, there was an individual
who did gain access to that side of the campus.
Chairman Collins. Did you inform District officials of the
personal records, the medical records in particular, that you
found during your tours of these buildings?
Ms. Hardy. Yes, we did.
Chairman Collins. And what was the reaction of the District
officials? Were they concerned?
Ms. Hardy. I think that they felt pretty confident that
there was controlled access and that the building was secure,
but there was some level of concern that we were able to gain
access to these files.
Chairman Collins. In your subsequent visits to these
buildings, did you still find personal files after you had
notified the District officials?
Ms. Hardy. Yes, we did.
Chairman Collins. So no one went in and cleaned out all of
those files in between your visits to the campus?
Ms. Hardy. No. While we did see some cleanup work that
apparently had occurred between visits, there was still a
significant amount of patient records and confidential records
still left in the building.
Chairman Collins. Did some of those records seem beyond
repair as you looked at them, because of water damage, mold, or
other problems?
Ms. Hardy. Yes, they did.
Chairman Collins. And again I want to emphasize for the
record that the records that you found had identifying
information about some of the patients who had been treated at
St. Elizabeths; is that correct?
Ms. Hardy. Yes.
Chairman Collins. Such as names, addresses, Social Security
numbers, and diagnoses.
Ms. Hardy. Exactly, including, as one slide showed, lab
results.
Chairman Collins. Mr. McKay, clearly the failure to
maintain St. Elizabeths has added to the cost of ultimately
renovating these buildings so that they can be returned to
productive use. Do you have any idea how much of the current
estimate of rehabilitating the West Campus, which you have
estimated based on GSA and other reports to be approximately
half a billion dollars, can be attributed to the poor
maintenance of the West Campus over the past 15 years?
Mr. McKay. While no definitive study has been done, it is
the case that in many of the buildings, there were some very
simple maintenance tasks that could have been done that would
have prevented more serious problems down the line. In many
cases--for example, in the Administration Building--there was a
tremendous amount of humidity as a result of steam still being
pumped into the building. In fact, we heard dripping water. The
damage was clearly extremely intense, and this was something
that would not necessarily have cost a lot of money to fix at
the beginning, but as things escalated, it became more and more
expensive.
Chairman Collins. Was the deterioration of St. Elizabeths
due to a lack of funds to do basic, essential maintenance?
Ms. McKay. Well, while more money always helps, much of the
damage that was done appears to be the result of unnecessary
neglect. As we said, during our visits to the campus, we
discovered wide open windows exposing the interior of the
building to the elements. In addition, there was still a large
amount of trash and personal property that was left in the
buildings. This is going to be expensive to remove, and it is
going to add to the overall price of mothballing. As you saw in
the Center Building, many of the floors that were collapsing
still had items on them, which is obviously going to increase
the likelihood that the floors will actually collapse.
Chairman Collins. Ms. Hardy, it is obvious that District
officials knew of the poor condition and the continuing
deterioration of these buildings, because after all, the D.C.
Government was essentially the tenant. In your review of
documents, did you come across any evidence that indicated that
the Federal owners, the Department of Health and Human
Services, were aware of the deterioration of conditions at St.
Elizabeths?
Ms. Hardy. Yes, we did. In fact, documents supplied to the
Committee by HHS which included correspondence from HHS to the
District dating back to 1992 clearly indicate that HHS was
fully aware of the deteriorated state of the property. The
letters are apparent attempts by HHS to notify the District of
these problems, but again, all we have is evidence of the
letters and no evidence of further action taken by HHS.
Chairman Collins. And did the General Accounting Office
also do a review of the condition of St. Elizabeths that would
have put the Federal Government on notice if there were a lack
of understanding of what was going on?
Ms. Hardy. Yes. In fact, a couple of years ago, there was a
GAO study done specifically on St. Elizabeths Hospital, and in
fact that report highlighted the deteriorated state of the
property. So again, HHS was fully aware of the problems with
St. Elizabeths.
Chairman Collins. Thank you. Senator Bennett.
OPENING STATEMENT OF SENATOR BENNETT
Senator Bennett. Thank you, Madam Chairman.
I do not have a lot of questions because you have been very
thorough in your analysis of this.
The thing that stuns me as I go through this material is
that I find photographs of dates--1999, 2000, and 2001. This is
very recent if the building was being used. To look through
these photographs, you would think this thing was abandoned in
the 1980's, and nothing had been done for 20 years.
To have it being used to the point where you have computer
printouts that are dated 2001 left on the floor indicates on
the face of it a very rapid and sudden abandonment and decline.
Is that accurate? That is my impression from looking at
this, but I could very easily be wrong.
Ms. Hardy. That is accurate. In fact, our understanding is
that the Administration Building was used as recently as
January of this year. The deterioration, as you can see, is
accelerated deterioration, and we are told it is from a number
of causes--water leaks, steam leaks, etc.--that clearly were
not dealt with when they occurred.
Senator Bennett. Well, I thank you for holding the hearing,
Madam Chairman, and going after this. My own experience would
dictate at this point, from a financial point of view, just
bulldoze the whole thing and start over. You could build new
buildings with better facilities than you could rehabilitate
this at this point.
I know the preservationists will not like that because they
love these old buildings, and certainly there are cases where
we have spent money on old buildings--the Library of Congress
Jefferson Building, Union Station--and we have gotten our
money's worth even though we could have created the same amount
of square footage for less money than we put into
rehabilitation. But I would view this one very carefully before
I would say let us go back and rehabilitate those buildings,
because the deterioration is so severe that it looks like you
could call out the Seabees and get their bulldozers and go to
work.
Thank you.
Chairman Collins. Thank you, Senator Bennett.
It is extraordinary the state of these buildings. The fact
that the Federal Government owns 61 buildings on a beautiful
campus so close to the Capitol, that is clearly very valuable
real estate, and as the Comptroller General said in his
testimony, one of the problems that they found is that Federal
agencies are not even clear about what they own in some cases,
and it is pretty hard to manage effectively what you do not
realize that you own.
So there is a lot of work to be done in this area.
I want to thank our witnesses for an excellent presentation
and for all of your hard work as we explore this important
area.
I would now like to welcome our third panel of witnesses to
the hearing.
William C. Stamper is Deputy Assistant Secretary for
Facilities at the U.S. Department of Health and Human Services.
He began his current position on July 1, 2002. Previously, he
served as Deputy Director of Facilities for the National
Aeronautics and Space Administration and as Director of the Air
National Guard Facility Requirements Branch.
Martha Knisley is Director of the District of Columbia's
Department of Mental Health which operates the East Campus of
St. Elizabeths Hospital. She began serving in her position last
November. Prior to that, she spent three decades as a mental
health clinician and administrator.
I want to thank you both for appearing today. I also want
to say for the record that both the Department of Health and
Human Services and the D.C. Government have been fully
cooperative with the Committee in its investigation of St.
Elizabeths as a case study of the Federal Government's
management of its real property.
Mr. Stamper, we are going to begin with you.
TESTIMONY OF WILLIAM C. STAMPER,\1\ DEPUTY ASSISTANT SECRETARY
FOR FACILITIES MANAGEMENT AND POLICY, U.S. DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Mr. Stamper. Thank you, Madam Chairman and Committee
Members. Good morning.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Stamper appears in the Appendix
on page 67.
---------------------------------------------------------------------------
Thank you for inviting me to testify today on behalf of the
Department of Health and Human Services. Secretary Thompson
sends his thanks to the Committee for addressing an issue that
many executive agencies are experiencing.
As stated in the GAO report on real property, many Federal
assets are no longer effectively aligned with or responsive to
agencies' changing missions and are therefore no longer needed.
I have been asked to speak about one such asset owned by
the Department of Health and Human Services. The West Campus of
St. Elizabeths Hospital in Southeast Washington, DC has been
excess to the Department's needs for many years. However, due
to a unique set of circumstances, we have been unable to
dispose of the property.
As testified to before, there are 61 buildings on the West
Campus, approximately 1.1 million square feet. In addition to
the historic buildings, the West Campus is the site of a Civil
War cemetery reported to be the only public cemetery containing
the remains of both Union and Confederate and black and white
soldiers.
In December 1990, St. Elizabeths was designated a National
Historic Landmark.
Congress adopted the St. Elizabeths Hospital and District
of Columbia Mental Health Services Act, otherwise known as the
Transfer Act, in 1984. The Act provided for the transition of
the District's mental health system to local control and gave
the District two opportunities to take title to the St.
Elizabeths Hospital grounds and buildings.
On October 1, 1987, those buildings identified by the
District as necessary for its mental health system were
transferred, including the entire East Campus except for one
building, five buildings on the West Campus, and approximately
$27 million to pay for repairs.
The Transfer Act also provided the District a right of
first refusal on the remaining property, which included most of
the West Campus. Although the District occupied about 34
buildings on the West Campus, the second transfer did not take
place.
In 1987, then Mayor Marion Barry signed a Use Permit with
HHS that specifically required the District to preserve,
maintain and repair the West Campus. The Use Permit was
extended indefinitely in 1997. Although HHS oversight was
minimal, our records show that we notified the city of various
violations throughout the years but took no action beyond the
notification.
The buildings have deteriorated significantly, as you have
seen. To prevent further damage to the large Center Building,
HHS spent $1 million on a new roof and gutter system in 1991
and spent another million dollars on mothballing and
stabilization projections in the year 2000. One million dollars
requested from Congress in 1998 was not appropriated.
Once we were notified by District officials in 2000 of
their intent to vacate personnel from the campus the following
year, we immediately began to take the steps necessary to
protect and dispose of the property. GSA instructed HHS on the
steps necessary to declare the property excess, and in
September 2000, we completed Phase I of the required
Environmental Assessment. In January 2001, HHS officially
notified GSA of its intent to declare the property as excess.
In April 2001, the GAO on behalf of the Committee on
Appropriations verified the need for funds associated with
property disposal, including fulfilling the requirements of the
National Environmental Policy Act and the National Historic
Preservation Act. Later in 2001, Congress provided $6.5 million
to begin the disposal process and mothballing.
In 2002, HHS awarded a contract for a building-by-building
mothballing assessment of Federal buildings on the West Campus
and completed the Phase II Environmental Survey. In May 2002,
the Urban Land Institute conducted a study to develop
suggestions on potential land use for the entire St. Elizabeths
campus, both East and West.
In late 2002, the District hired an architectural firm to
develop a framework plan for the campus, to identify
appropriate uses, and to establish implementation strategies.
To start off 2003, in January, Mayor Williams held a public
meeting to inform the community about the planning process for
St. Elizabeths. Also, at the beginning of this year, the
District vacated its last employees from the campus, and HHS
received a report on the building-by-building assessment.
GSA has arranged for bids on the mothballing and
stabilization, but it was immediately apparent that the project
was going to cost far more than the $6 million appropriated.
We plan to complete the project in three or more phases
depending on available funding. HHS recently contracted with
GSA to award the first phase, which will involve roofing,
boarding up windows, securing entrances, and pest control. That
should begin within the next 2 months.
Most of the buildings on the West Campus were constructed
from 1855 to the early 1900's. Nearly every building suffers
severe deterioration due to age and lack of maintenance. Our
estimate to finish the mothballing and stabilization is
approximately $20 million. This figure continues to rise with
natural events such as our recent Hurricane Isabel and last
year's severe winter.
The District is still removing furniture, files, and other
articles from the buildings and is required by the Use Permit
to give us written, 180-day notice that the property is no
longer needed. HHS will be responsible for security and
maintenance after the turnover by the District until GSA
assumes responsibility.
St. Elizabeths' West Campus is one of the largest
developable tracts in the District of Columbia and therefore an
extremely valuable asset to the Federal Government, the
community, and the future of Southeast Washington.
Redevelopment will have a positive impact on the city and will
promote economic growth in the area around St. Elizabeths. The
government can and should make every effort to ensure that the
property is redeveloped in such a way to preserve the historic
buildings and site.
With its rich heritage, St. Elizabeths Hospital offers a
wonderful look at an important aspect of our Nation's history.
Creativity must be a part of a negotiation process between the
Federal Government, the District and, if needed, private
entities to preserve this important cultural asset.
GSA has informed HHS that there may be other Federal uses
for the property. If a Federal transfer occurs, we believe it
will greatly benefit the immediate community and the city as a
whole. The continued mothballing and maintenance of the
property is costly, and decisions need to be made as soon as
possible.
At Secretary Thompson's initiative, HHS is redoubling our
efforts to work with GSA, the District, and the community to
make certain that the potential for St. Elizabeths Hospital is
realized.
Thank you for allowing me to speak with you today, and I
will try to answer any questions you might have.
Chairman Collins. Thank you very much.
Ms. Knisley, could you also introduce the person with you
as you begin your statement?
TESTIMONY OF MARTHA B. KNISLEY,\1\ DIRECTOR, DEPARTMENT OF
MENTAL HEALTH, GOVERNMENT OF THE DISTRICT OF COLUMBIA,
ACCOMPANIED BY DAVID NORMAN, ACTING GENERAL COUNSEL, DEPARTMENT
OF MENTAL HEALTH
Ms. Knisley. Yes. Senator Collins, Senator Coleman, with me
today is David Norman, who is our Acting General Counsel for
the Department of Mental Health. He worked on the St.
Elizabeths Campus for the Public Defender's Office in the
District for 17 years and has been a source of informal
information as we try to piece together these individual issues
and is going to assist me today.
---------------------------------------------------------------------------
\1\ The prepared statement of Ms. Knisley appears in the Appendix
on page 77.
---------------------------------------------------------------------------
Chairman Collins, Senator Coleman, my name is Martha
Knisley. I am Director of the District of Columbia Department
of Mental Health, and I thank you for inviting me to testify
before you on a subject of great importance to myself, my
Department, and the citizens of our Nation's Capital--the past,
the present, and the future of the West Campus of St.
Elizabeths Hospital.
Before I begin, I would like to divert from the text for a
moment and talk to you as a mental health professional who has
worked in over 40 States, including the State of Maine, working
at the Machias Campus and also in Bangor at that campus in my
career. I have worked in, as I said, 41 States. I have worked
in 77 State psychiatric hospitals during my career.
I have found personally and tragically, both as a young
woman in undergraduate school when I did work in a
deteriorating campus--it was hard to say ``a deteriorating
campus'' when it had never been very functional to begin with--
in Huntington, West Virginia, that as a Nation--and this goes
beyond the scope of today's discussion--but as a Nation, what I
found with our buildings, where we have placed our most
vulnerable citizens, is that what we have done as a Nation to
those people, to the people who work there, parallels the
history of this campus.
It is an unspeakable tragedy.
I came to the District of Columbia at the request of a
transitional receiver in the Dixon case that began in 1974.
This case was brought against the HHS at that time, which was
running St. Elizabeths, and the District of Columbia, which was
operating a few small community clinics.
That case was brought with the expressed purpose to develop
a system of care for people with mental illness in the
District. It is 2003, and that case has not been settled.
It just so happens that the transfer of this hospital came
at the time that the Federal Government wanted to exit the
case. The point in fact is that the deterioration of St.
Elizabeths Hospital began probably several decades before the
case was even brought. These buildings have been rotting away
for many decades. And as testified to earlier this morning by
your staff, who have done an excellent job, Senator Collins, I
found the same situation when I arrived that they found at St.
Elizabeths.
The situation got so bad with the city's operation--again,
all the time with HHS and the city operating not just for the
buildings but for the people--that Federal Judge Aubrey
Robinson in the Dixon case placed the mental health system in
the District in receivership in 1997. Mayor Williams
aggressively argued to bring this system out of court
receivership so that the city could begin to manage this
system--partly because of this valuable property, the people
who worked there, but the citizens in the District who need
mental health care.
We did that in April 2001. One of the first actions that I
had to take as director was to stop the renovation of the
William A. White Building, where the renovation had begun
before they had removed asbestos. They had not even removed the
asbestos. And today, we heard about the conditions continuing
this year.
There are two issues I would like to raise about those. One
is that while in receivership, the Commission on Mental Health
transferred all of the operations of their recordkeeping and
those files you saw to a private firm without sufficient
guarantees in that contract to manage those records that you
saw. We have had to discontinue that contract. But the
recordkeeping, Madam Chairman, was just as horrendous in terms
of the billing for the services, so we had a double problem
there. And we are rapidly trying to reconstruct what even went
on with the patients during that period of time.
So those were billing records that you saw in the pictures.
But even the other medical records, when we wanted to move them
to buildings on the East Campus, our medical records building
that we were using, where we wanted to use things, and that was
under our control was in just as bad shape, so we had to shore
up that building so we could move out of the other deteriorated
buildings over onto the East Campus where we operate.
We are also aggressively moving to build a new hospital on
that campus on the southwest corner of the East Campus so that
we can meet the basic safety and health concerns of our
patients whom you did not see on the East Campus but who are
living in some of the same conditions.
When I arrived, Madam Chairman, the Centers for Medicaid
and Medicare Services had placed this system on the endangered
species list, if you will, for just its care. In August, they
gave us a clean bill of health on active treatment at the
hospital, brought us out of the conditions that we were in and
said that at least our care for patients was on the upswing.
Madam Chairman, as you can see, we still have a lot of catching
up to do on the buildings themselves.
So I just wanted to give you that background, because we
need to develop a fully functioning community mental health
system here in the District. Mayor Williams is adamant that we
do that. We have exited the receivership, and we should be able
to exit that case in 2 years.
You have asked me to comment specifically on how the West
Campus arrived at its current state of deterioration, and let
me say that I have only secondhand knowledge of those events,
and I have been trying to patch them together as you have,
prior to my appointment.
It appears that there was very little institutional memory,
and I do believe that HHS has captured it very well, as have
your staff, so that we could begin to piece together who was
responsible for what and when. But beyond that, what are we
going to do next?
The Transfer Act that was initiated in 1987, as well as
basically the original version of that Transfer Act, was
charged with the responsibility for repairing and renovating
those buildings and support systems that the District indicated
it would need to use in its final system implementation plan,
which was a part of the delivery of mental health services.
Pursuant to that Act, HHS contracted for a physical plant
audit which was conducted by an architectural and engineering
firm, and this audit concluded that it would cost $55.8 million
to bring up to code those portions of the campus that the
District intended to use. Of that amount, $25.8 million was
attributed to renovation of the West Campus.
Unfortunately, this story, as you have heard this morning,
only goes downhill from there. I would have to say, knowing
what I have been going through, for example, just in the
cleanup that we had to do after the storm last week, that
probably every administrator in my seat before I became the
director--and by the way, as we came out of receivership, it
was the first time we actually created a Department of Mental
Health; I report directly to the Mayor, and that did not occur
before, either--but every year, they would have had to make the
decision on cleaning up a building or making it safe for people
living there today. And I myself personally have had to make
that decision at least two or three dozen times in my short
tenure--where am I going to place the resources that I have--in
this deteriorating building or in a location where patients are
actually living.
So in summary, yes, not enough money, promises probably not
kept, and when HHS did come to the District and request that
activity occur, that did not happen. And the challenges, as I
said, exist both for the care of the patients and with respect
to the care of the campus.
I can only say to you now, Senator Collins and Senator
Coleman, that we are moving rapidly out of the buildings on the
West Campus so that the mothballing can go ahead, and it has
been a challenge for us to even do that this year, as has been
evidenced here today, and we have been continuing even after
the time that your staff were on the campus.
I am available to answer questions, and I would like to ask
that my statement that I was going to read be put into the
record.
Chairman Collins. Without objection, your statement will be
entered in full.
Ms. Knisley, you have obviously spent your entire life
dedicated to serving those with mental illness, and I salute
you for that commitment. Since you have been a mental health
clinician for many years, I would like to get your reaction to
the fact that we found during our investigation patients'
medical records--not just billing records; I am talking about
actual patient files with full identifying information, with
diagnosis information--and not just one or two files, but
hundreds of files on each of five different visits to the West
Campus.
Ms. Knisley. Madam Chairman, the A Building, where I
believe that--again, from the pictures of where most of the
files were found--in that particular building during my tenure,
there were no staff offices or medical records offices. Those
were the offices of the firm that had been contracted with that
was located in that building, and it does appear, both from
what we have been trying to construct just for the billing as
well as for cleaning up the files and moving them, that many of
the files migrated over to this billing operation. So the
medical records--that is, the recordkeeping facility or
division for the hospital that is used by the clinicians is
actually located in a different building on the East Campus
where we were operating. So it is somewhat of a mystery how the
volume and those types of records found their way into the
offices of these staff.
Chairman Collins. Please understand--this is in a vacant
building with no staff, with virtually no security, with the
roof caving in, with water dripping on these confidential
medical records. And we informed your department the first time
we found these records, because we were so alarmed at what we
were seeing. We expected by our next visit that individuals
from your department would have come and immediately moved the
records or taken some steps to secure them. But that did not
occur.
Moreover, there were members of your department who
actually accompanied my staff on one of the visits and saw it
for themselves.
I assume the District of Columbia has patient
confidentiality laws, and I am just wondering why no action. It
is bad enough that the records were left there in the first
place, but after we informed your department, nothing was done.
Ms. Knisley. Madam Chairman, I am pleased to say that those
records have been removed. The length of time to remove them--
and this is not an excuse--but the length of time to remove
them is in part related to the fact that the place where we
were moving them, we were also cleaning up that building and
shoring up the wall there, so we were doing both activities at
the same time.
I might also add that the condition with the water coming
in was going on while people were working in those buildings. I
am not sure you were even aware--you went when they were
vacant, but I do not know if they had taken the tarp down or
not. They put a tarp up over the records and the computer
equipment instead of repairing the building.
So you are absolutely right. It has been a challenge for us
to remove those records, and they are removed now, and again,
we are doubly challenged by getting them into a place that
would be safe.
Chairman Collins. Mr. Stamper, in October 1996, the D.C.
Preservation League, which is an organization of District
historic preservationists, named St. Elizabeths Hospital to its
list of eight most endangered properties, and a story in The
Washington Post described the league as arguing that, ``A lack
of proper maintenance by the District Government has created a
desperate need for repair and has made the structure's long-
term fate uncertain.''
That was 7 years ago. What actions did HHS take when
alerted by outside groups to the deterioration of these
buildings?
Mr. Stamper. Madam Chairman, I am not familiar with that
particular report. I think I can go back to the advent of this
administration at least and say that we have been trying to be
much more proactive about dealing with the St. Elizabeths
problem. We are certainly aware of it.
There is some kind of a trail of correspondence that took
place in the nineties between the Department and the District.
I have not read up on the specific one that you are
referencing. I could get back to you with a written answer on
that.\1\
---------------------------------------------------------------------------
\1\ Letter from Mr. Stamper, dated November 12, 2003, in response
to the question of an article in The Washington Post appears in the
Appendix on page 82.
---------------------------------------------------------------------------
Chairman Collins. In your testimony and just now, you
referred to correspondence back and forth between HHS and the
District, but you also conceded that HHS oversight was minimal
and that HHS did nothing other than notify the District of its
violations.
Why didn't the Department take stronger actions to
safeguard the taxpayers' investment in these properties?
Mr. Stamper. I wish I knew the answer. I really--it is
difficult for me to speculate back that far as to what recourse
there was. There were certain things that probably could have
been done short of an eviction notice or something, I guess.
I would also like to add, though, that there is a context
here of a drawdown in the Department headquarters facilities
staff in HHS, and in the mid-90's, it was drawn down to, I
think, two people to oversee departmental facilities activities
in total, which is virtually nothing.
Secretary Thompson, when he came in, recognized that we had
a severe shortfall in the facilities function at Headquarters
and took action to establish a new office that I am in charge
of to establish an oversight presence at headquarters to try to
avoid these kinds of problems.
Chairman Collins. Well, before I turn to my colleague,
Senator Coleman, let me say in response to that that if HHS
only had two people at headquarters in charge of overseeing all
of the property--is that what you are saying----
Mr. Stamper. That is my understanding.
Chairman Collins [continuing]. I cannot think of a more
penny-wise and pound-foolish decision than to cut back on the
staff that is responsible for ensuring the quality of the
taxpayers' investment in real estate property that is valued in
the multiple millions--just this one property alone, not to
mention all the other HHS property.
Ms. Knisley. Madam Chairman, if I might, it is possible,
knowing the individuals involved at the time, that if HHS
attempted to pursue that with the District, the District
officials could have said, ``Well, this is our operating money;
it would take away from patient care.'' Again, that is not to
say that HHS should not have done more, but I think that the
responsibility for that maintenance during that period of time,
the District did need to step up to the plate, and I would
suspect that there was some hope that during that receivership
period, the District would in fact have done that.
So I am not trying to say that HHS should not have done
more, but it was very evident to individuals whom I have
interviewed that, because the city was taking the repair money
out of their operating budget, what people could see was that
that was taking away from the patients. So that may have been
going on. And again, that is not to at all say----
Chairman Collins. I would argue that it is not good care--
--
Ms. Knisley. No, it is not good.
Chairman Collins [continuing]. Of patients or fair
treatment of the staff----
Ms. Knisley. It was not, no.
Chairman Collins [continuing]. To allow this kind of
deterioration. Senator Coleman.
OPENING STATEMENT OF SENATOR COLEMAN
Senator Coleman. Thank you, Madam Chairman.
Madam Chairman, first let me thank you for your leadership
on this issue. This is important. You are always doing a public
service, but this is a public service. This is a public
service, and I appreciate it. I always and quite often, as you
know, reflect upon my experience as a mayor. I will have to
tell you that in my city, when we went through our list of
problem properties, the leading landlord of problem properties
was the Federal Government. So I think that what we are
exploring here in a very dramatic and almost beyond
comprehension way is perhaps symptomatic of a range of other
issues that deserve further exploration. Again, I saw that in
my city. We did not take this kind of action to deal with it;
we dealt with it one-on-one. But I hope that down the road, we
can kind of get our arms around this.
I am not even sure what question I want to ask here, but I
will tell you that I always have an appreciation for folks who
dedicate their lives to public service and what you have done,
Ms. Knisley, but as I listened and reading your testimony--I am
still, by the way, trying to figure out how files migrate over;
I am not sure what that means--but I would say that
particularly in regard to the issue of patient confidentiality,
that issue is one that folks are not being cared for if those
records are made available. I am trying to sort out what
happened here, and I think you are faced with what folks around
cities always face when you have ``x'' number of dollars, and
do you put them into patient care, or do you put them into
fixing something up. And the problem is that there is a
delicate balance, and when the balance is somehow not dealt
with appropriately, you have problems, and there are clearly
dramatic problems here.
In your testimony, you note that ``You asked me to address
the responsibility for this state of affairs,'' and you then
say ``The responsibility ultimately rests with HHS as a holding
agency of the property.'' I think I would have much preferred
both of you coming up here and saying, ``Do you know
something--we really messed up. We did not do what should have
been done, and we will do everything in our power from this day
forth to address that.''
From the HHS perspective, I hope that you are looking over
your list of 10 worst properties and taking a very close look
at what you are doing and not doing rather than waiting for the
Chairman to show up on the doorstep and figure out what has not
been done. I would hope that has been done already.
Mr. Stamper. Well, in fact, I think we had started the
process to look and fix this problem prior to the Committee's
interest. Maybe we could be criticized for the speed, but we
have been working on this very diligently.
Senator Coleman. My concern about working on it is that as
I am listening to the testimony, I hear a lot of discussion
about long-term plans, grand vision, land institute, future
use, but there is the more immediate need of did you get a
broom in there to pick up the garbage. I mean, I worry that
sometimes we are not seeing the forest for the trees here. And
the first step says we are going to make this safe. This is a
safety issue. I do not know if there are kids in the area,
Madam Chairman, but God forbid that there are, with these kinds
of conditions.
So, rather than ask a question, I would say that I hope the
Department is not getting caught up in what the long-term
vision is, but first saying ``We will make sure that these
properties are cleaned up. We will make sure that they are
secure.'' And then we can go beyond that.
And I would hope, Ms. Knisley, that you would go back and
figure out why it took so long for files that were sitting
around not to be picked up and have somebody responsible to act
on that.
Ms. Knisley. Yes, I totally agree, Senator Coleman. And let
me just say that even with the ultimate responsibility as the
landlord, we have the responsibility of the care of the
patients and the security of the records, absolutely.
The first is no longer working for us in part because of
this, and our staff have had to go in behind them and clean up
these records. And I cannot fathom, either, this migration of
that information to a company that was going to be doing
billing. I cannot fathom that, either.
I have the responsibility now, this is the shape I found it
in, but I totally agree that it is my responsibility to get it
cleaned up, and we are doing that as quickly as we can.
Senator Coleman. I appreciate that, but I will tell you
that it is hard for me to fathom when a Member of the U.S.
Senate or Congress raises an issue about something, and files
are lying around, that someone is going to come back and see
them still there ``x'' number of days later. I cannot fathom
that the next day, I do not have somebody there, figuring out
what is being done and taking care of it--and if it is not
done, figuring out who did not do it and deal with that,
because if you do not, the problem will still exist.
Ms. Knisley. Right. And Senator Coleman, yes, we did both.
We dealt with the people who were supposed to have done it, and
now we have dealt with the conditions themselves--or, I should
say with the files. The conditions themselves are along way
from being complete.
Senator Coleman. Thank you. Thank you, Madam Chairman.
Chairman Collins. Thank you, Senator Coleman. Senator
Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thanks, Madam Chairman, and to our
witnesses, thank you for joining us today.
I apologize for not being here during the time that you
were testifying, and what I am going to ask you to do is, if
you will, just take a minute or two apiece and, as we approach
the end of this hearing, just share with me what you would hope
the Members of this Committee would take from this hearing,
what we and our staff would take from this hearing as we go
forward.
Ms. Knisley. Senator Carper, and to the Members of the
Committee, if I could summarize for me personally, I would go
back and redo as much as we possibly can do. That is obviously
not going to happen, and I apologize to the Members of the
Committee and particularly, Madam Chairman, to you for the
amount of time that it has taken us to fulfill our
responsibilities to clean out these buildings.
The matter of St. Elizabeths Hospital, as I said in my
opening statement, is a very large and very personal concern.
It was the crown jewel of psychiatric hospitals in the United
States at one point in time, and since the 1960's, it has
become the worst example of our treatment and care of persons
with mental illness that I can imagine or that I have ever
seen. And the lack of follow-up and follow-through by the D.C.
Government during the last 20 years has been a tragedy.
Mayor Williams, who fought valiantly to get this Department
back under his control, has given us a very strong mandate to
clean up the mental health system and to make good use of the
hospital and to build a new hospital on this campus for the
care of our patients, and we are proceeding as vigorously as we
can to see that that occurs.
Again, in a way, this is about Federal property today in
the hearing, and it is a very important hearing, and we
understand our responsibilities as part of that and our
responsibilities to the care and treatment of the patients.
Senator Carper. Thank you. Mr. Stamper.
Mr. Stamper. Thank you, Senator.
Several points--the Department of Health and Human Services
has declared the property excess to our needs. Factually, we
have not needed it since mental health care was transferred to
the District in 1987. We are working with GSA to release the
property and are following the Federal process that we have to
follow to do that.
The District has been responsible for maintenance and
repair since the Use Agreement was signed in 1987. Our
oversight, admittedly, of that Use Agreement was not what it
should have been. The property is in bad shape, and we believe
it has a high potential for redevelopment in the right hands.
Senator Carper. Thanks very much. Madam Chairman, thank
you.
Chairman Collins. Thank you very much, Senator.
Mr. Stamper, you testified that it would take approximately
$20 million just to mothball the buildings. Is that the route
that HHS is now pursuing? Would it make sense since, as you
pointed out, this is one of the largest developmental tracts,
buildable tracts, left in the city to instead partner with the
private sector to try to develop this property instead of
investing $20 million just in mothballing it--or are the
buildings so far gone at this point that you have to mothball
them first before you can go on to try to find a developer who
might be interested?
Mr. Stamper. It is a difficult question to answer because
timing becomes important, and the rate of deterioration is so
rapid because of where we are now. What I can say, though, is
that, working through the Federal process, GSA has to determine
if there is a Federal need for the property, and it is really
going to be in their hands as the government's property
manager. The Department of Health and Human Services does not
have the legal authority to negotiate those kinds of
partnerships.
Chairman Collins. GSA would take over that responsibility?
Mr. Stamper. Yes, ma'am.
Chairman Collins. Another question that I want to ask you
comes from a comment that was made by Ms. Knisley, and that is
when she said that there was a concern about taking from
patient care. And your written statement makes a similar
comment. Didn't the Use Permit between the Department and the
District of Columbia call upon the District to be fully
responsible for all the maintenance, repairs, and operations of
the West Campus?
Mr. Stamper. Yes, it did.
Chairman Collins. So presumably, when the District agreed
to the Use Permit, it agreed to take over the maintenance of
the buildings in a way that should have been separate from the
money for patient care; is that not accurate?
Mr. Stamper. I do not know how the District would normally
run their budget, but certainly the Use Agreement requires them
to maintain and preserve the facilities.
Chairman Collins. Ms. Knisley, would you like to comment on
that? My point is that when the District agreed to these
conditions, it presumably knew what it was agreeing to.
Ms. Knisley. Madam Chairman, I think that is part of the
problem, and as a matter of fact, we are in litigation because
in the due diligence phase of turning over the land and, again,
an audit--and again, I was not here at the time--but an audit
revealed that there was a certain amount of money that was
required--I believe it was $55 million--but only $25 million
was forthcoming as part of that transfer at that time.
So the District took on this responsibility and agreed to
certain responsibilities without fully appreciating the repair
costs--not capital costs, but repair costs--that come out of
the operating budget. Since I have been director, I have asked
for--and Mayor Williams has granted and it is before Congress
as we speak--additional capital funds so that we are not
dipping into the operating funds, because in operating, you are
moving between the day-to-day maintenance and your staffing in
an operating budget. And what was happening was that they were
sucking up these daily operating funds, because they did not
have capital funds to do the kinds of repairs.
We had two dozen water main breaks this winter that cost us
about $2.7 million. I took that out of patient care. And I
believe that is what happened over this period of time, that
because there was not a capitalization of these repairs, it
then fell naturally to the operating budget.
Chairman Collins. Of course, one of the obvious problems
here is that very small maintenance problems were not attended
to which would have been inexpensive, relatively speaking, had
they been dealt with at the time that they occurred, and
because they did not, there is, for example, extensive water
damage, which produced a host of other problems.
It is just very troubling to see these buildings, this
extraordinary asset that the Federal Government owns, and today
the best estimate is that it will take $450 million to
rehabilitate these buildings.
Ms. Knisley. I would not like to have to buy the bottled
water--even though we get very good Poland water, Madam Chair--
I would not like to have to buy bottled water for our patients.
I would like to be able to use the water there. That is just an
example.
I have employees who have never had hot water in their
entire careers--or patients--30 years, because we made a
difference between hot water and fixing something else.
Chairman Collins. I just want to end my questioning with
one clarification. As I indicated to you, in each of the five
visits that my staff made to the buildings, we still found
confidential patient records, lab results, and during my visit,
a corporate credit card, an American Express card, all sorts of
materials that should not have been left there.
Are you testifying today that the District has now removed
and safeguarded all of those personnel and patient records that
we saw?
Ms. Knisley. Yes, Madam Chairman. There are two sets of
items in the Administration Building, and I believe we are
still removing material out of the basement and some items, but
the patient records have been removed.
The corporate credit card, by the way, was the firm that is
no longer working for us. Our agency has no credit cards. And
again, that just illustrates the fact that this whole operation
had been turned over to a private company with no oversight of
that company. The contract had no oversight even written into
the contract over the company.
Chairman Collins. That is also inexcusable but outside the
scope of this particular hearing.
Ms. Knisley. Absolutely. I understand, Madam Chairman.
Chairman Collins. I would like to ask my two colleagues if
they have any further comments or questions. Senator Coleman.
Senator Coleman. Madam Chairman, just one. Actually, in
reference or in follow-up to the question you asked Mr. Stamper
about the possibility of some kind of public-private
partnership for further development, those things do take time.
I would certainly urge the Department to get in there and clean
it up. Do that, and at the same time, you can be involved in
some long-term planning. But development takes a while--it is
great to have a long-term vision, but I think there are some
immediate needs. And whether it is this property, St.
Elizabeths, or others, I do hope the Department is looking to
say, OK, what are we going to get done today to make sure that
facilities are safe.
Thank you, Madam Chairman.
Chairman Collins. Thank you, Senator, and thank you for
your participation. Senator Carper.
Senator Carper. I would simply say to you, Madam Chairman,
that I look forward to taking a minute or so at the conclusion
of this hearing just to talk about what other steps we might
need to contemplate; if we could do that, I would appreciate
it.
Chairman Collins. Absolutely. Thank you.
I want to thank our witnesses today. As I said when I began
this hearing, St. Elizabeths was the most egregious example of
a deteriorated Federal real property asset that our Committee
has looked at, but there are many others that we found as part
of our review. As the GAO testified, the number of vacant and
underutilized Federal buildings or federally-owned buildings is
truly astonishing. We have a lot of work to do in this area to
make sure that the investment of Federal taxpayers in real
property is safeguarded. So we look forward to continuing this
investigation.
We will be keeping the record open for 15 days for the
submission of any additional statements or questions.
I thank our witnesses for their cooperation. We look
forward to working with you to ultimately produce a happy
outcome for the reuse of the West Campus of St. Elizabeths.
This hearing is now adjourned. Thank you.
[Whereupon, at 11:15 a.m., the Committee was adjourned.]
A P P E N D I X
----------
PREPARED STATEMENT OF SENATOR LAUTENBERG
Madam Chairman, this is an important hearing. The Federal
Government owns or leases 3.3 billion square feet of building floor
area and has real property assets worth nearly 330 billion dollars.
That's a lot of property and a lot of money.
I doubt anyone would argue that the Federal Government needs every
square foot of that space. Clearly, the Federal Government could get
rid of some of this property.
There are ``opportunity costs'' when the Federal Government holds
onto excess property: Taxpayers pay higher taxes to maintain the
property and it's not being put to a more beneficial use. Moreover, the
money used to maintain property we don't use isn't available to
refurbish the property we do use. According to the General Accounting
Office, the General Services Administration has a maintenance and
repair backlog of somewhere between 4.0 and 5.7 billion dollars.
Clearly, the time is ripe for real property reform.
There is another subject which I hope will be addressed to some
extent today: Terrorism and its impact on government buildings and
other property.
We have been told that we are winning the war against terrorism. It
sure doesn't look like it to me. Just drive down Constitution Avenue or
Pennsylvania Avenue. Barricades everywhere. Streets blocked off. It
looks like a war zone. As best as I can tell, there are concrete
barriers surrounding every government building in town except--
interestingly--the Internal Revenue Service! Putting flowers in these
things isn't a big improvement!
I realize much of this was done hastily, and is meant to be
temporary. Let's hope so. One of the important characteristics of our
democracy is openness. We have lost that since 9-11.
I don't mean to trivialize the very real threat that modern
terrorism poses but I would like to think that we have the creativity
and skill to protect our buildings and other property without making
Washington look like Berlin during the Cold War.
I look forward to hearing from our witnesses about this. Thank you,
Madam Chairman.
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