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93–843 2015

OVERSIGHT OF FCC BUDGET AND MANAGEMENT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 17, 2014 

Serial No. 113–175 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky7 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chairman 

ROBERT E. LATTA, Ohio 

Vice Chairman 

JOHN SHIMKUS, Illinois 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

ANNA G. ESHOO, California 

Ranking Member 

MICHAEL F. DOYLE, Pennsylvania 

DORIS O. MATSUI, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

JOHN D. DINGELL, Michigan 

FRANK PALLONE, JR., NEW JERSEY

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

HENRY A. WAXMAN, California, ex officio 

(III) 

C O N T E N T S 

Page 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 4 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 5 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 6 

WITNESSES

Jon Wilkins, Managing Director, Federal Communications Commission ........... 7 

Prepared statement .......................................................................................... 10 

Answers to submitted questions ...................................................................... 50 

David Hunt, Inspector General, Federal Communications Commission ............ 16 

Prepared statement .......................................................................................... 19 

Answers to submitted questions ...................................................................... 69 

(1) 

OVERSIGHT OF FCC BUDGET AND 

MANAGEMENT 

WEDNESDAY, SEPTEMBER 17, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:20 a.m., in room 

2123, Rayburn House Office Building, Hon. Greg Walden (chairman of the subcommittee) presiding. 

Present: Representatives Walden, Latta, Shimkus, Terry, 

Blackburn, Lance, Guthrie, Kinzinger, Long, Eshoo, Braley, and 

Waxman (ex oficio). 

Staff Present: Ray Baum, Senior Policy Advisor/Director of Coalitions; Sean Bonyun, Communications Director; Leighton Brown, 

Press Assistant; Andy Duberstein, Deputy Press Secretary; 

Graham Dufault, Policy Coordinator, CMT; Gene Fullano, Detailee, 

Telecom; Kelsey Guyselman, Counsel, Telecom; Grace Koh, Counsel 

Telecom; Tim Pataki, Professional Staff Member; David Redl, 

Counsel, Telecom; Charlotte Savercool, Legislative Clerk; Shawn 

Chang, Minority Chief Counsel for Communications and Technology Subcommittee; Margaret McCarthy, Minority Professional 

Staff Member; Ryan Skukowski, Minority Policy Analyst and Patrick Donovan, Minority FCC Detailee. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. We will call to order the subcommittee on Communications and Technology for our hearing on the oversight of the 

FCC budget and management. 

Today we continue the committee’s efforts to reform the FCC’s 

process. For the past two Congresses the House has passed the 

Federal Communications Commission Process Reform Act. The 

FCC Process Reform Act is bipartisan legislation that passed the 

House on March 11 of this year and would bring needed reforms 

to the commission’s processes to guarantee the transparency and 

accountability that is the hallmark of effective and legitimate government. 

Unfortunately, like so many really, really good pieces of bipartisan legislation, H.R. 3675 remains stuck and stalled in the Senate, without so much as a hearing to consider this much-needed 

legislation. While the FCC process reform continues to wait for the 

Senate the Energy and Commerce Committee has kept our foot on 

2 

the accelerator and continued with our oversight efforts of the Federal Communications Commission processes. 

In this time of transformative technological innovation and unprecedented private investment in the communication sector of our 

economy, we have to ensure that the FCC does remain vigilant in 

executing the duties prescribed by the Congress, operates within 

the bounds of the law, and does these things transparently, effectively, and efficiently. The American people deserve no less. 

When we last convened to discuss the oversight and FCC process 

reform, we met with Chairman Wheeler amid reports of fraud processes undermining the Commission’s decision-making. We voiced 

our concerns regarding reports of the chairman’s office withholding 

decision documents for other members of the commission until the 

eleventh hour and decisions by the chairman’s office used the delegated authority of the bureaus to circumvent debate and vote by 

the full Commission. 

While I am a firm believer that the buck stops with the chairman, the FCC is a complex organization with a myriad of levels of 

bureaucracy. So today we will take a closer look at the FCC below 

the commissioner suites of the eighth floor. 

Now, since our last hearing the subcommittee has examined additional aspects of the FCC’s operation, including management of 

backlog and current workload, staffing, its budget and operating 

expenses, as well as other related issues through inquiries and information requests to the agency. 

The FCC’s responses to our questions, reports, submitted by the 

Inspector General and reports in the media, raised some concerns, 

are pretty serious as to whether the FCC’s house is actually in 

order. In contrary to Chairman Wheeler’s oft touted remedy, the solution to the Commission’s woes is not simply to throw more money 

at the problem, but to use the money available to the Commission 

more effectively. 

Nowhere is this more evident than in the FCC’s IT expenditures. 

According to the FCC’s responses to our data requests, it spent 

more than $352 million in the last 5 years on IT. Now, how much 

of that money was wasted on the FCC’s disastrous revamp of its 

Web site? How much is now being spent to quote unquote ‘‘fix the 

Web site’’ that then FCC’s CIO Steve VanRoekel said would pay for 

itself in just 9 months? And how much was spent on the Commission’s public efforts to consolidate aging licensing systems only to 

have the project simply disappear; years of work apparently abandoned. 

Duplicative spending also seems to be a challenge for the Commission. While I applaud the FCC’s efforts to reduce waste, fraud, 

and abuse in Universal Service Fund it appears from Mr. Hunt’s 

testimony that the Commission now has two teams doing substantially similar work. I should note that Mr. Hunt’s raising of this 

issue is itself a profile in courage, as, unlike many other Inspectors 

General within the U.S. Government, the chairman can recommend 

his removal. So he is in a unique position, but we appreciate your 

thoughtful testimony. 

The FCC has big challenges to address and hopefully today’s 

hearing will put some light on those efforts. This morning, we will 

hear from Mr. Jon Wilkins, who is the FCC’s managing director, 

3 

whose office is responsible for the administration and management 

of the Commission, including such things as the Commission’s 

budget and financial programs, human resources, and communications and computer services. 

He is joined by David L. Hunt, the FCC’s Inspector General’s office provides investigations, audits, and reviews of the FCC’s programs and operations. It is my hope that their responses to our 

questions will provide us with a better understanding of the FCC’s 

challenges and how the FCC plans to return to the fundamentals 

of strong management and fiscal prudence. 

With that I yield the balance of my time to the Vice Chair of the 

committee, Mr. Latta. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Today we continue with the committee’s efforts to reform FCC process. For the 

past two congresses, the House has passed the Federal Communications Commission Process Reform Act. The FCC Process Reform Act is bipartisan legislation that 

passed the House on March 11 of this year and would bring needed reforms to the 

commission’s processes to guarantee the transparency and accountability that is the 

hallmark of effective and legitimate government. Unfortunately, like so many pieces 

of bipartisan legislation, H.R. 3675 remains stuck in the Senate, without so much 

as a hearing to consider this needed legislation. 

While FCC process reform continues to wait for the Senate, the Energy and Commerce Committee has kept our foot on the accelerator and continued with our oversight efforts to improve FCC processes. In this time of transformative technological 

innovation and unprecedented private investment in the communications sector of 

our economy, we must ensure that the FCC remains vigilant in executing the duties 

prescribed by Congress, operates within the bounds of the law, and does these 

things transparently, effectively, and efficiently. The American people deserve no 

less. 

When we last convened to discuss oversight and FCC process reform, we met with 

Chairman Wheeler amid reports of flawed processes undermining the commission’s 

decision-making. We voiced our concerns regarding reports of the chairman’s office 

withholding decision documents from other members of the commission until the 

eleventh hour, and decisions by the chairman’s office to use the delegated authority 

of the bureaus to circumvent debate and vote by the full commission. While I am 

a firm believer that the ‘‘buck stops’’ with the chairman, the FCC is a complex organization with myriad levels of bureaucracy. Today, we will take a closer look at the 

FCC below the commissioner’s suites of the ‘‘8th floor.’’ 

Since our last hearing with Chairman Wheeler, the subcommittee has examined 

additional aspects of the FCC’s operation including, management of backlog and 

current workload, staffing, its budget and operating expenses, as well as other related issues through inquires and information requests to the agency. The FCC’s responses to our questions, reports submitted by the Inspector General and reports 

in the media raise serious concerns as to whether the FCC’s house is in order. 

And contrary to Chairman Wheeler’s oft-touted remedy, the solution to the commission’s woes is not simply to throw more money at the problem, but to use the 

money available to the commission more effectively. Nowhere is this more evident 

than in the FCC’s IT expenditures. According to the FCC’s responses to our data 

requests, it has spent more than $352 million in the last five years on IT. How 

much of that was wasted on the FCC’s disastrous revamp of its Web site? How 

much is now being spent to ‘‘fix’’ the Web site that then-FCC CIO Steve Van Roekel 

said would pay for itself in just nine months? And, how much was spent on the commission’s public efforts to consolidate aging licensing systems, only to have the 

project simply disappear, years of work apparently abandoned? 

Duplicative spending also seems to be a challenge for the commission. While I applaud FCC efforts to reduce waste, fraud, and abuse in the Universal Service Fund, 

it appears from Mr. Hunt’s testimony that the commission now has two teams doing 

substantially similar work. I should note that Mr. Hunt’s raising of this issue is 

itself a profile in courage, as unlike many other inspectors general within the U.S. 

government, the chairman can recommend his removal. 

4 

The FCC has big challenges to address and hopefully today’s hearing will shed 

some light on those efforts. This morning, we will hear from Mr. Jon Wilkins the 

FCC’s Managing Director whose office is responsible for the administration and 

management of the commission including such things as the commission’s budget 

and financial programs, human resources, and communications and computer services. He is joined by David L. Hunt the FCC’s Inspector General whose office provides investigations, audits, and reviews of the FCC’s programs and operations. It 

is my hope that their responses to our questions will provide us a better understanding of the FCC’s challenges and how the FCC plans to return to the fundamentals of strong management and fiscal prudence. 

Mr. LATTA. I thank the chairman for yielding and I appreciate 

you holding this hearing today and I thank our witnesses for being 

with us today. 

Oversight of the FCC serves a critical function in maintaining efficiency, transparency, and accountability at the agency. Given the 

FCC’s integral role in the information and communications technology marketplace, and the growing online ecosystem, we have a 

responsibility to ensure that the processes and procedures at the 

FCC are not wasteful and reflect the capability that handles such 

significant parts of our Nation’s economy. 

To that end, today’s hearing represents a valuable opportunity to 

gather additional information about the FCC’s budget management, and spending practices and better understand challenges 

confronting the agency, its work, and other potential issues limiting the efficiency of its operations. 

I look forward to the testimony of our witnesses, Mr. Chairman. 

With that I yield back. 

Mr. WALDEN. The gentleman yields back. 

I now turn to my friend and colleague from California, Ms. Eshoo 

for an opening statement. 

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. ESHOO. Thank you, Mr. Chairman, for holding this hearing, 

and good morning to our witnesses and welcome. 

Connecting America, protecting and empowering consumers, and 

promoting competition, these are among the strategic goals outlined by the FCC in its fiscal year 2015 budget request. 

Now, to achieve these goals, the FCC has to be equipped with the 

necessary resources to effectively carry out its mission, including 

sufficient staffing, a modern IT system, which we will talk about, 

and improved collection of consumer complaint information so that 

the agency and its people really better understand the communication challenges facing the American people; not just the interests 

that come in the door, but what the American people are saying. 

And very recently, what the American people were saying, there 

were so many of them saying it that the system crashed. So I don’t 

think in my view that we were very well prepared for that. 

Now, the office of the Inspector General, I have a great deal of 

regard, a deep regard for IGs across our government because they 

play really a critical role in upholding the integrity of an agency. 

And so that the American public knows, you are the ones that are 

there for them to guard against any kind of abuse, any kind of 

fraud, any kind of waste and I think that we are all cognizant of 

5 

that, and that we have a regard for it, and the independence of IGs 

is very important. 

I have never understood why the system is the way it is because 

it establishes huge tensions immediately. I learned this when I was 

almost a 10-year member of the House Intelligence Committee. You 

know, the intelligence community didn’t want IGs to do a damn 

thing, but the head of the agency was the one that was calling the 

shots. I mean, go figure. 

So but that is the way it is set up. I don’t think it is the best 

way. But for decades, the audits and the investigations conducted 

by the IG’s office have, I think, complemented the FCC’s work. 

Now, in recent years, it has included the implementation of important programmatic reforms to strengthen and modernize the 

agency, but despite the dramatic increase in scope and breadth of 

issues being considered by the FCC over the past 30 years, today’s 

FCC has 200 fewer employees than it did in 1984. 

So we are charging the agency with executing the world’s most 

complex spectrum auction, evaluating two major, major mergers, 

and preparing for the IP transition. This all requires significant 

staff time and resources. And the agency funds the IG. And the IG 

has a considerable team of people in the agency sourced through 

their HR department; I think 39 or 40 employees, I have like 12 

in two offices. So you have a lot of people. 

And so I think today what I would like to know, and I hope that 

there are not personality conflicts in this. That is the mark of humanity. I really want to examine what you think you are not able 

to do that you should be doing. I don’t believe that we need criminal investigators relative to the E–Rate going into classrooms and 

libraries. I think that is the equivalent of having all of these Army 

tanks going into local PDs, they all don’t need that. 

I hope today that when the IG leaves, that he and his team will 

have a clear understanding from Members of Congress of what we 

want, we think is important that you keep your eye on in terms 

of investigation and all of that. 

So with that, Mr. Chairman, thank you for holding this hearing. 

It is always important for us to review the efficiency and the effectiveness of an agency and I think that is what today’s hearing 

is about. 

Thank you, and I yield back. 

Mr. WALDEN. I thank the gentlelady. 

I now turn to the vice chair of the full committee, Ms. Blackburn 

from Tennessee, for 5 minutes. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

And I thank you for your focus that you have put on FCC reform 

and the importance of that, especially as we look at being a knowledge economy, as we look at interactive technologies and the impacts that they have on every single sector of our economy. 

As we do the oversight and look at process and look at reforms 

with you all, we are interested to hear what you have to say and 

6 

the chairman said that well in his opening statement, and looking 

at what is happening throughout the bureaucracy of the FCC. 

One of the things that we will be looking for is how close are you 

to your core competencies and your core mission in delivering service to the American people? Where are you into areas where you 

should not be and what type of resources are you expending on 

those areas? The bureaucracy, and how that has grown, has 

changed, what has happened with that process? And we do this in 

the light as we seek to rid the agency of duplication. And by the 

way, the Inspector General’s office and the FCC strike force, that 

might be one of those areas of duplication where resources would 

be better used. 

We do this realizing that we have a responsibility to the taxpayer. Hard-working taxpayers send their money to Washington, 

D.C. Many taxpayers struggle to live within their means and pay 

taxes to the Federal Government for a government that refuses to 

live within its means. We are still borrowing $0.36 of every dollar 

we spend. 

So due diligence and making certain that the bureaucracy, via 

the use of technology continue to right size themselves and not duplicate programs, and not waste funds, and not have the attitude 

of, well, it is Federal money, if we need more, we can print more. 

Those are things that are important to our constituents, and we appreciate that you are willing to be here and help us answer those 

questions. 

I will be willing to yield time to any Member who would seek it. 

Mr. WALDEN. Anyone on our side want the rest of the time? 

Mrs. BLACKBURN. I yield back to the chairman. 

Mr. WALDEN. I thank the gentlelady for her work on these and 

other issues. 

And now we will turn to the gentleman from California with the 

bright purple tie, Mr. Waxman, for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman, you have Californians 

to the left of you. 

Mr. WALDEN. Usually always that is the case. 

Mr. WAXMAN. And we are pleased to be with you. 

Mrs. BLACKBURN. And Tennesseeans to the right. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Far right. 

This subcommittee has spent a substantial amount of time focused on the operations and processes of the Federal Communications Commission, and I support oversight of the FCC, which is a 

small but critical agency charged with overseeing industries that 

make up nearly 1⁄5 of our National economy. 

What we are learning is that the FCC is making significant 

progress in improving its operations and eliminating backlogs. 

Under former Chairman Genachowski and current Chairman 

Wheeler, the FCC has taken strides to improve transparency and 

efficiency in decisionmaking. Within the past 6 months alone, the 

agency has closed over 640 dormant proceedings and doubled the 

total number of media license applications resolved in all of 2013. 

7 

The Commission is also working hard to reduce the number of 

backlog across all of its bureaus and offices. And although contentious issues often grab headlines, the vast majority of decisions 

made by the chairman and commissioners are bipartisan and unanimous. 

Chairman Wheeler came into office at the end of last year and 

immediately took action to build on the momentum for process reform. On his first day in office, Chairman Wheeler appointed a senior advisor to examine FCC process reform and issue recommendations for agency action. 

One of our witnesses today, Mr. Wilkins, will be able to tell us 

about the progress that is being made to implement those recommendations as well as the barriers preventing the agency from 

making process improvements. Process reform is moving forward at 

the same time the FCC is implementing a significant new law and 

overhauling numerous programs for the broadband era. 

Congress has tasked the FCC with conducting the world’s first 

ever incentive spectrum auction. This is a complex task with many 

competing priorities that will impact competition and innovation 

for years to come. The FCC has also adopted reforms to all four of 

the Universal Service Fund programs, most recently in the E–Rate 

program. These reforms will enhance support for connectivity and 

capacity to schools and libraries across the Nation. 

And an unprecedented number of Americans have filed comments with the agency about the proposed open Internet rules. Despite the difficult budget climate, the dedicated and talented public 

servants at the FCC are ensuring the agency’s mission is being fulfilled. 

Today we will also hear from the FCC’s Office of Inspector General. Inspectors General were created by Congress to protect the integrity of agencies and programs funded with public resources. 

And I look forward to learning about the significant accomplishments of the Inspector General in combatting waste, fraud, and 

abuse. I take seriously the concerns that the IG has raised and I 

want to learn more about them. 

Thank you, Mr. Chairman. 

And then I yield back the balance of my time. 

Mr. WALDEN. The gentleman yields back the balance of his time. 

That concludes our opening statements from the committee members. We thank you all for your participation. 

We will go now to our first witness Mr. Jon Wilkins who is the 

managing director of the Federal Communications Commission. 

Mr. Wilkins, thank you for being here. Thanks for the work you do. 

Pull that microphone a little closer, and please go ahead. 

STATEMENTS OF JON WILKINS, MANAGING DIRECTOR, FEDERAL COMMUNICATIONS COMMISSION; AND DAVID HUNT, 

INSPECTOR GENERAL, FEDERAL COMMUNICATIONS COMMISSION 

STATEMENT OF JON WILKINS 

Mr. WILKINS. Thank you. Good morning Chairman Walden, 

Ranking Member Eshoo, members of the subcommittee. My name 

is Jon Wilkins, and since November—— 

8 

Mr. WALDEN. Yes, you actually have to be pretty close to these. 

That is better. 

Mr. WILKINS. OK. And since November last year I served as the 

FCC’s managing director. 

My testimony today will focus on our management activities, how 

they relate to our budget and especially to our process reform efforts. And I have already submitted my written testimony so I will 

just focus on a few points and then answer all of your questions. 

As managing director, my primary function is to support the efficient and effective management at the FCC. My staff of 208 employees includes areas including budget, IT, HR administration. As 

several members of the subcommittee have noted, immediately 

upon coming into office Chairman Wheeler identified process reform as a priority management objective. My staff was heavily involved in developing the recommendations that flowed into the 

February 14th staff report. 

From a management standpoint, process reform fundamentally is 

about measuring and tracking. When we can measure and track, 

we actually can simultaneously become more transparent and more 

efficient and that is the mission that my office has in process reform. 

Today we have delivered some early wins of available resources. 

Just a few examples by the end of this year, we will have a new 

consumer complaint process online that will be much better; online 

FOIA, and electronic filing; we are working on improving the Web 

site; we have also directly supported Commission bureau efforts to 

close both 1,500 stale dockets, and by our broadest measure of 

backlog we have reduced that about 29 percent since May. 

In addition to the process reform focus, we do do budget IT and 

human capital work commission wide, so just a few points of emphasis. First, the budget is the starting point for all of our management efforts. As I came in and began to develop forward-looking 

plans for the new chairman’s priorities, I pretty quickly did grapple 

with the reality that the flat funding the Commission has had since 

2009, despite the growth in some operational costs, and quite a few 

new mandates, it really has challenged our ability to maintain current service levels. 

Another factor, the impact of sequestration did introduce some 

real budget uncertainties that made it quite hard recently to be investing in any kind of long-term efficiency. So given that, our 2015 

budget request asks for an increase in three areas. 

First, we do have some uncontrollable cost increases, rent, utilities, pay increase, retirement plan, and support. 

Second, IT modernization, fundamentally, is about trying to improve our IT cost profile as well as better deliver mission objectives, including process reform. We have asked for a total of $18 

million in funds for several IT areas, but primarily for the enterprise modernization. That really will tackle head on the main problem we face in IT, which is our 207 legacy systems, over 40 percent 

of which are over 10 years old that really are just increasingly expensive for us to maintain and operate. 

And third, Chairman Wheeler made very clear to FCC management that he views USF oversight and enforcement as a top priority. Our 2015 budget request supports that by asking for 45 new 

9 

FTEs at a cost of $10.8 million, to be part of an interagency USF 

oversight task force that actually included several FTEs for the 

IG’s office; and the overall focus is to make sure that we are fully 

discharging our obligations to oversee universal service as it is 

going through a number of major changes. 

At this point I do just want to address a couple of quick points 

in the Inspector General’s written testimony. 

First, Commission management unequivocally respects, values, 

the independence of the Office of Inspector General. We do not 

interfere in the Inspector General’s mission. 

Second, specifically with regard to hiring activities, the Section 

1811 criminal investigators. We fully agree the IG has independence to hire whoever their office needs to fulfill their mission, my 

HR staff does have an obligation to ensure that we are complying 

with applicable civil service rules, and that is the only constraint 

that we have. 

And third, the Commission really does take seriously our management’s oversight obligation of universal service. We have always 

coordinated with the Inspector General’s office. We will do more of 

that in the future and we view it as a really top priority for management to make sure we are fully discharging our obligations over 

universal service. 

So just to conclude, I do have very clear marching orders in my 

office. Chairman Wheeler has directed me to improve our management practices to take all steps possible to implement process reform. We are fully funded by regulatory fees and so we are very 

mindful of making every dollar count. 

And I look forward to taking your questions, so thank you. 

Mr. WALDEN. Mr. Wilkins, thank you very much. 

[The prepared statement of Mr. Wilkins follows:] 

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Mr. WALDEN. We will now go to Mr. David L. Hunt, who is the 

Inspector General for the Federal Communications Commission. 

Thanks for the good independent work you do. 

Mr. Hunt, we look forward to your testimony. 

STATEMENT OF DAVID HUNT 

Mr. HUNT. OK, thank you, Mr. Chairman. 

Thank you again Chairman Walden, and Ranking Member 

Eshoo, and members of the subcommittee. 

Good morning. I appreciate the opportunity to come before you 

today to discuss issues pertaining to the management, operations, 

and budget of the Federal Communications Commission. I would 

like to take this opportunity to thank the committee for its continued support of our efforts, which has consistently been demonstrated by the approval of our budget. 

My testimony today will discuss our oversight and investigative 

activities related to the FCC’s major program areas. I will then discuss several areas of management and budget, and our oversight 

of these areas that merit attention and will conclude with a discussion of the challenges we face in providing efficient and effective 

oversight of the Commission. 

Our annual audits of the FCC’s financial statements have resulted in clean audit opinions for the past several years, and management has made improvements to the financial management of 

the FCC. However, our audits of the FCC’s financial statements 

and information security have disclosed findings and resulted in 

recommendations for improvement to management, many of which 

are duplicated every year. 

Lately we have conducted more audits of FCC’s internal processes and procedures. These audits have disclosed generally acceptable results, but several bring to light serious deficiencies in FCC’s 

practices. For example, we will soon issue a report on an audit of 

the FCC’s management of civil monetary penalties that disclosed 

that the FCC has not collected all of the penalties and the fines it 

could have, and uncollected penalties have been carried on the 

agency’s books for years, a few even for decades. 

However, this internal focus has not caused any detriment to the 

oversight of FCC’s programs, such as the Universal Service Fund 

and the Telecommunications Relay Service Fund because of increased efficiencies within OIG and support from other Federal 

agencies. 

OIG annually submits a statement summarizing our assessment 

of the most serious management challenges facing the FCC. OIG 

is currently developing the fiscal year 2014 statement and we anticipate the areas of challenge to be similar to fiscal year 2013. In 

fiscal 2013 we noted the challenges continue to exist in the USF 

program, the TRS fund, and overall innovation at the FCC. 

In the past 2 years, our investigatory staff has achieved impressive results securing numerous settlements and criminal convictions, thus protecting the integrity and quality of the programs the 

FCC oversees and generating hundreds of millions of dollars in 

savings and recoveries for the past several years. 

17 

The results of the investigative team’s work are even more impressive in light of the fact that my efforts to expand the capabilities of this team by hiring criminal investigators has not been allowed. I will return to that topic momentarily, but I would first like 

to discuss some of my investigative team’s accomplishments. 

Since I last appeared before you we have secured our very first 

indictments and guilty pleas in the low-income program of the Universal Service Fund. This was an issue mentioned to me last time 

when I appeared before the committee. We have also obtained additional convictions related to fraud in provision of Video Relay Service, a program we have focused on for years, frankly, with remarkable results. 

We are working alongside the FBI, DOJ, Department of Interior, 

Department of Education, in numerous criminal cases involving all 

of USF programs, but as these matters are ongoing, I cannot discuss too many in public at this time. 

On the civil side, the OIG investigation’s team is continuing its 

oversight of the E–Rate and other USF programs as well as Commission spectrum auctions to identify individuals and companies 

who may be engaged in activities to defraud these programs. In 

this regard we have initiated cases based on information developed 

in the first instance within the OIG as well as being assisted by 

the Department of Justice in numerous qui tam cases under the 

Federal False Claims Act. 

Lastly, in addition to our programmatic work, OIG has a team 

of investigators that deals with allegations involving Commission 

internal operations. Our efforts have led to discipline including the 

dismissal or retirement of a number of Commission employees. 

Over the years that I have been the IG, I have had generally a 

very good working relationship with agency management. However, 

there are several areas that still give me great concern. I have been 

trying for over 2 years to hire criminal investigators to continue to 

expand my ability to conduct criminal investigations and raised the 

issue with Chairman Wheeler. Management has so far refused to 

support these hires and precluded my ability to staff my office in 

the way that I see fit. I have already been informed that there is 

no support for OIG to hire criminal investigators. I continue a dialogue with OIG management, but to no avail. 

In addition, FCC human resources have for several years retained the right to approve every OIG hire. My deputy IG, or my 

assistant IG for management must e-mail the chief of HR and ask 

permission for each hire, be it an auditor or attorney or even for 

administrative support. We have asked many times why this is 

necessary, and for this practice to end, but have received neither 

an explanation for, nor relief from this restriction. 

The IG Act states that each Inspector General is authorized to 

select, appoint, and employ such officer employees as may be necessary for carrying out the functions, powers, and duties of the office. This statement is clear and unambiguous and authorizes IGs 

to make personnel determinations necessary for carrying out IG offices’ responsibilities. 

While in truth, with the exception of my request for criminal investigators, I have never been denied a hire, nonetheless manageVerDate Nov 24 2008 15:41 May 27, 2015 Jkt 037690 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-175 CHRIS
18 

ment’s involvement in OIG personnel matters appears to be a direct contravention of the IG Act. 

Further, every time one of my managers has to request permission from an FCC manager to hire someone, I believe our independence is impugned. This ongoing practice gives my office at the 

very least the appearance of a lack of independence from FCC management. 

I would like to address one final area of concern. In July, FCC 

Chairman Wheeler announced the creation of a strike force to combat fraud, waste, and abuse in the Universal Service program. 

Many in Congress, Chairman Walden included, I believe, approved 

the creation of the task force and I, too, am pleased to see the FCC 

become active in reducing fraud within USF. However, this action 

was taken with no coordination from OIG and complications 

abound. 

As my testimony this morning has demonstrated, FCC’s OIG in 

recent years has had unprecedented success. We have been instrumental in effecting significant savings on consumers’ telephone 

bills and significantly helped ferret out fraud from entire FCC programs such as the VRS. It might be best to expend FCC’s valuable 

yet limited resources to bolster the IG’s office, an entity with a 

proven track record that has established a track record with DOJ 

and the FBI, rather than one that is potentially encumbered by 

policymaking constraints and whose mission, as I understand it, is 

not limited to ascertaining rule violations. 

Our concern is that the strike force, which does not independently report to Congress as I do, has a potential for unnecessary 

overlap in the agency’s enforcement and investigatory efforts. That 

being said, we can all agree that expending additional resources to 

uncover fraud, waste and abuse may be a positive measure provided that the level of coordination between OIG and the strike 

force is extensive and delineated by each entity’s responsibilities. 

Because OIG is primarily engaged in law enforcement, all information gathered by the strike force should be provided to the OIG 

at the earliest possible opportunity. Failure to do so could negatively impact OIG’s law enforcement efforts and potentially waste 

resources. 

Thank you for the opportunity to address these important matters with this subcommittee. 

I will be happy to answer all of your questions. 

Mr. WALDEN. Mr. Hunt, thank you very much for your enlightening testimony. It sounds like there are some issues there that 

need to be prosecuted. 

[The prepared statement of Mr. Hunt follows:] 

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Mr. WALDEN. I am going to start with a question for Mr. Wilkins 

regarding the Web site because we have talked a lot about it. And 

frankly, as an old broadcaster, I found the FCC Web site to be 

worse than useless. You could never get the information out of it 

you were seeking. You had to hire somebody who could figure it out 

at a very high rate. I don’t know how all of that works, but it is 

a mess. I am not sure it has gotten any better. But we sure spent 

a lot of money. I saw that there was like a $400,000 contract issued 

for initial work. Is that right? I mean, how—— 

Mr. WILKINS. Yes. 

Mr. WALDEN. How much do you intend to spend in total on this 

overhaul? And when do you think it will be up and running? I 

mean, we have dealt with some other Web sites on this committee 

unrelated to the FCC. It doesn’t seem like the government has got 

a good track record on this. What can you tell me? 

Mr. WILKINS. OK. So the current plan for the Web site, as I actually mentioned in my oral statement, we do have work underway. 

We have got it divided into two phases. 

First phase has already started under that $400,000 contract. 

That work is to fundamentally improve the search function, which 

I think, if we have to fix one thing soon, it is that. The search function is how you find information. 

Mr. WALDEN. Yes, which doesn’t work worth a—— 

Mr. WILKINS. So we are going to improve the search function. 

Mr. WALDEN. Sorry. 

Mr. WILKINS. And redesign the user experience to work better. 

And we have heard loud and clear that despite some of the previous improvements that were made to the back end systems, to 

the users that was not working—— 

Mr. WALDEN. Worthless. 

Mr. WILKINS. So, phase one is to redesign that interface to improve the actual search capability that is live. 

And then phase two will be the first half of the next year that 

will make that a live new version of the Web site. 

Mr. WALDEN. All right. According to the OPM Web site the revising of Intergovernmental Personnel Act, IPA’s intended facilitate 

cooperation between the Federal Government and certain non-Federal entities. For example, State and local governments and institutions of higher education. Basically, this allows the Federal Government to borrow employees as long as the government reimburses the current employer for their costs. Isn’t that correct? 

Mr. WILKINS. Yes. 

Mr. WALDEN. So now, the FCC has utilized this mechanism as 

I understand it. In response to one of our inquiries it appears that 

there were two IPAs leading up to 2009. In 2009 that number 

jumped to 12, and the cost for IPAs starting in 2009, has been approximately $3 million for 12 people. 

The cost to the agency for some of these folks well exceeds the 

salary permitted for either traditional GS employees or those Federal employees in Senior Executive Service. For example, we found 

that the cost for one individual was $208,345.89 per year. But perhaps the most egregious was an economist we understand the FCC 

paid $396,878.68 for 8 months of work. Now, that appears to be an 

32 

annual salary of nearly $600,000 for an economist out of the academic world. 

Where do these funds come from to pay for the cost? Were any 

of these individuals from State or local government? And are these 

counted as FTEs, so that the agency actually has more FTEs than 

the number that it is reporting? 

Mr. WILKINS. Well, today we have three IPAs in place. 

Mr. WALDEN. That is it? 

Mr. WILKINS. Three. 

Mr. WALDEN. All right. 

Mr. WILKINS. One is for our chief technologist who just came on 

board very recently. One is for our chief economist, and one is a 

senior advisor to our rural healthcare task force that we have just 

launched. 

Mr. WALDEN. Right. 

Mr. WILKINS. I don’t have the exact figures, but the cost for those 

three is closer to, I think, $500,000 total for—— 

Mr. WALDEN. For all three? 

Mr. WILKINS. For three of them in total. 

Mr. WALDEN. All right. 

Mr. WILKINS. I think that our approach to those IPAs, we only 

want to do it where it really is external expertise, cutting edge—— 

Mr. WALDEN. Right. 

Mr. WILKINS [continuing]. That frankly is hard to bring into the 

government, especially—so our chief technologist is a good example. Federal Government can be a great career path, but if you are 

interested in being on the very cutting end of technology and academic research—— 

Mr. WALDEN. Right. 

Mr. WILKINS [continuing]. There may be better places in the academic sector, or the private sector. So the idea of the annual or 

maybe 2-year IPA to bring in that kind of talent we think works 

and we are trying to make only in the most focused way. 

Mr. WALDEN. Is the IPA process a sole-source contracting? Does 

somebody in the agency—does Mr. Wheeler or some other commissioner say I want Mr. Hunt to work for me, as opposed to the contracting process where it is more open and transparent? 

Mr. WILKINS. Yes, I mean, there is not a competitive bidding 

process in the same way. It is more akin to a senior talent recruitment and the IPA is the way that you can—— 

Mr. WALDEN. So you go pick somebody, pay them whatever—— 

Mr. WILKINS. Of course, we want to do that based on very legitimate—— 

Mr. WALDEN. One other question. What is the agency’s retention 

policy per e-mails? Has this come up in other agencies over time. 

I believe it is 90 days? 

Mr. WILKINS. We, right, so for a user, the user’s live e-mail account, and if you are just a user at your desktop, you can go back 

90 days. We certainly do have backup that is done by our IT organization and can go back longer as needed. 

Mr. WALDEN. So those are retrievable beyond 90 days back? Because some of the agencies, processes stretch over years. 

Mr. WILKINS. Yes. 

33 

Mr. WALDEN. And so we just want to make sure that those emails—— 

Mr. WILKINS. We have a backup capability that is essentially just 

limited by the funding that we have for our storage contract. It 

definitely goes back at least a year. 

Mr. WALDEN. A year. 

Mr. WILKINS. At least a year. Yes. 

Mr. WALDEN. Do you think it should go back as far as the proceedings are open? 

Mr. WILKINS. Well, I think we want to be sure that we are appropriately preserving government records. 

Mr. WALDEN. As required by law. 

Mr. WILKINS. Yes, and we, obviously, want to make good efficient 

use of, the cost to store them and just keep that balance right. 

Mr. WALDEN. And what is the policy for employees that use personal e-mails for official business, because this has come up elsewhere in the government? 

Mr. WILKINS. Oh, obviously your government FCC e-mail account 

should only be used for work. 

Mr. WALDEN. No, but the problem is personal accounts are being 

used by some in the agency to conduct official business, so it is not 

showing up in the—— 

Mr. WILKINS. I mean, obviously, if you are using—— 

Mr. WALDEN. Do you have a policy on that? 

Mr. WILKINS. Yes, if exigencies require you to use your personal 

e-mail for some reason, you need to make sure that you then retain 

it and bring it into the appropriate—— 

Mr. WALDEN. Mr. Hunt, is that something that you keep an eye 

on? 

Mr. HUNT. Yes, Congressman. Yes, Mr. Chairman, we do. 

And we actually did take a look—I don’t know if you have a 

question for me about, these sole source contracts, we did do an inspection, and the FCC has made some changes because we did find 

issues with the way they were retaining people; that they were not 

following FAR requirements to awarding sole-source contracts. The 

FCC concurred with our inspection report and our recommendations and now they have initiated corrective actions so we have 

looked at that in the past. 

Mr. WALDEN. All right. That was on sole source. With deference 

to the committee, can you answer the part about e-mails to personal? Because we are seeing this in other agencies where government officials, to keep it out of the public record, are using their 

personal e-mails. 

Mr. HUNT. We do look at, for instance, individuals who are doing 

business within the FCC, an individual business, and using it for 

personal e-mails. The issue is we don’t have as much access. 

Mr. WALDEN. I am flipping it around the other way. It is not that 

some individuals do an occasional e-mail using their official account for personal business. 

Mr. HUNT. I am sorry. 

Mr. WALDEN. On the other way around. Are they offline, in effect, using a personal e-mail account to conduct official business so 

that it gets around the rules of the—— 

34 

Mr. HUNT. Oh, I am sorry. I am sorry. No, we don’t—we haven’t 

looked—we have looked at that thing in the past. We haven’t 

looked at that lately. 

The problem is technology. Do we have the technology to look 

into that? The FCC—I am sorry, the FCC runs the network. We 

don’t have an independent network of our own to look into issues 

like that. 

Mr. WALDEN. Yes. I would just be interested in your formal policy if you could provide it. I know I am way over my time. 

Thank you, gentlemen, for the work that you do. 

I will turn now to my colleague from California Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. 

So that means I have 8 minutes, right? No, I am teasing. I know 

that won’t be the case and it doesn’t need to be. 

Thank you to both of you for your testimony. 

What I am interested in is what, actually, you are doing and how 

you are using your money, both of you. 

Mr. Wilkins, relative to being managing director and making 

sure that you are pushing things through that need to be done in 

an efficient, effective way. 

Mr. Hunt is saying that there needs to be more and I think that 

you are extraordinarily focused on criminal investigations. 

Now, I have stated before what I have, the critical role that IGs 

play across the government. Now, I understand that the OIG received $21 million, and $25 million directly from the Universal 

Service Fund in 2008, 2009 respectively, to fund investigations. 

That is a lot of money. That is a lot of money for—this is a relatively small agency. I mean, this is not a gigantic agency and 

those amounts were also exempt from sequestration cuts. So you 

come out very well in terms of, at least in my view, in terms of dollars. 

And unlike the Commission, you are permitted to carry forward 

these dollars year after year. That is my understanding. 

So my first question is, how much money do you have on hand? 

Mr. HUNT. Well—— 

Ms. ESHOO. And how many employees do you have? 

Mr. HUNT. We have 39 permanent employees. 

Ms. ESHOO. You have 39. And how much cash on hand do you 

have right now? 

Mr. HUNT. Well, first of all I have to correct something. 

Ms. ESHOO. Yes, do it fast, because I—— 

Mr. HUNT. OK, we have the $21 million. When I became the acting IG, I turned down the additional $25 million. I said, we don’t 

need it. We can’t spend it fast enough and that was—that money 

was—— 

Ms. ESHOO. So from 2008 through 2009 you operated on $21 million? 

Mr. HUNT. No, no, this is in addition to our regular budget. 

Ms. ESHOO. I understand. I understand. That is why I am raising 

it because I think the committee members need to understand this. 

But at any rate, so you turned back the 25, you operated on the 

21, plus the other dollars that you had to operate on. So—and you 

can roll money forward. 

That is why I was asking: How much do you have on hand? 

35 

Mr. HUNT. I think what we have left is maybe $5 million. 

Ms. ESHOO. OK. 

Mr. HUNT. Most of that way money was spent by the prior—— 

Ms. ESHOO. Given the recent increases in your funding, even 

though you turned some back—I don’t know why you did. 

You are saying you have a lot of work to do but you turned 

money back, I don’t get that, but that is what you did—what have 

you—can you describe what additional work you have conducted, 

for example, there has been a spike in criminal prosecutions during 

that time frame, or immediately following, and what I am really 

stuck on is where the agency has not done well at all. 

You have your eye on criminal investigations. You keep talking 

about it. It is like a broken record and you feel strongly about it. 

But I want to dissect that because we have huge agencies that do 

criminal investigations. The DOJ is very well funded. The FBI is 

well funded. What is it that you can’t partner with them to do that 

is leaving huge gaps and unaddressed investigations on your part? 

And as succinct as possible. Why does there have to be duplication 

in these agencies? 

Mr. HUNT. Right, I mean, let me say one thing really briefly so 

everybody understands. 

Ms. ESHOO. I just want you to answer my question because I 

have other questions. 

Mr. HUNT. OK. OK. To get FBI agents, DOJ agents, I mean, and 

Interior agents to help us out is very rare. They have a threshold. 

They have more people helping us out than before, but we have 

much more fraud and waste than we can tackle with the 39 people 

we have. 

You are talking about $20 billion that you are asking 39 people 

to try to monitor. And oftentimes, we can’t get support from the 

FBI because they simply don’t have enough agents out there to 

help us. So we end up dropping cases worth $1 million or less because we don’t have—— 

Ms. ESHOO. What are the cases worth, though? 

Mr. HUNT. Pardon? 

Ms. ESHOO. What are you cases worth? Are you talking about $20-, $40-, $50 million cases? Are you talking about $1 million? Are 

you talking about $35,000? What kind of dollar value do these 

cases have? 

Mr. HUNT. Of, the cases go—I mean, we have cases under $1 million, in which case, DOJ and FBI won’t touch them. 

Ms. ESHOO. Yes, and I don’t blame them. It is not worth it. 

Mr. HUNT. And then we have cases over $100 million and everything in between. 

Ms. ESHOO. Unfortunately my time is up. I have a lot of questions and maybe we can have another round. 

My point in pressing this with you is not to diminish what needs 

to be done in terms of investigations, but I think that there are 

other areas that are really essential for you to be putting the pedal 

to the metal on. And I mean, for a whole system to crash, an IT 

system at an agency that is in charge of communications, where 

are you on that? 

So both of you, but that is why I am pressing on this, and I don’t 

know if this is a well-sought avenue for you. I really think that you 

36 

should be working with the other agencies and not duplicating it 

and you have got the money too. 

So at any rate, thank you, Mr. Chairman. 

Mr. WALDEN. Mr. Hunt, did you have anything that you wanted 

to respond to that? 

Mr. HUNT. I appreciate everything that the chair—the Congresswoman is saying, but—— 

Ms. ESHOO. Be sincere. No. 

Mr. HUNT. No, I don’t think—I really have to disagree. I don’t 

think we are duplicating efforts. 

We are trying to get as much help as we possibly can. We go all 

the time. Sometimes we have to call local law enforcement to go 

with our agents so our agents don’t get hurt in the field. And if we 

can’t get local law enforcement to help us—we have had guns 

pulled on us before. 

Ms. ESHOO. If there are criminal threats to people in the OIG, 

we need to know that. We need to know that. I don’t know where 

you are going with this. It is either, what some attorneys would 

consider, in terms of money, kind of two-bit cases, or are people’s 

lives being threatened? That is a huge range, spectrum, so—— 

Mr. WALDEN. I think he was just saying they have had guns 

pulled on them. 

Ms. ESHOO [continuing]. Maybe you could answer that to the 

chairman. 

Mr. HUNT. So much money, like, it is $20 billion involved here, 

and we don’t have a single criminal investigator to help us look at 

them. 

So we have to—we do go to other agencies. We go to Interior. We 

go to FBI. We go to local law enforcement. We go to the Department of Education. We borrow their agents all the time because we 

don’t have any. But they don’t have enough to do all of the work 

that we have to do. We have got much more money, many more 

cases, than we possibly have the staff to handle right now. 

Mr. WALDEN. All right, Mr. Hunt, thank you. 

We are going to go now to the gentlelady from Tennessee, the 

vice chair of the full committee Ms. Blackburn for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

And I want to thank each of you for being here. 

Again, Mr. Wilkins, you are basically the chief operating officer, 

right? 

Mr. WILKINS. Yes, ma’am. 

Mrs. BLACKBURN. OK, well, let me ask you this: We will stay 

with the same of how you use the resources and the money, the 

taxpayer’s money that you are given to work on. 

And Mr. Hunt, I have to tell you, I like the fact that you sent 

money back and said we don’t need all of this. I appreciate that 

and I can guarantee you, my constituents like it when they hear 

that a Federal agency would send some money back; that they are 

just not out there willy-nilly spending money because they can. 

They get tired of that. 

Mr. Wilkins, let’s talk about this strike force because this is 

something that caught my attention and to me, it sounds like it is 

duplicative. So tell me why it would not be duplicative, and why 

you need a strike force when you have got the IG’s office? 

37 

Mr. WILKINS. We don’t see the strike force as an either/or with 

the IG. Oversight of Universal Service Funds involve the whole 

spectrum of issues from direct criminality, to egregious rule violations, to more pedestrian rule violations. 

I think that it has always been clear that there is an overlapping 

mission between the IG’s office and the enforcement bureau staff 

and I think Chairman Wheeler’s direction is, he wants the enforcement bureau doing more of its part. Absolutely, we need to coordinate duplication, I completely agree is not what we want. And I actually, what I have heard so far is that since the strike force is just 

really set up over the last couple of months, it only has three employees, there really has been quite good coordination so far. 

Mrs. BLACKBURN. OK, would you recommend eliminating the 

strike force? 

Mr. WILKINS. No, absolutely not. 

Mrs. BLACKBURN. Say you have a tight budget, would you say we 

can eliminate this? 

Mr. WILKINS. Well, most of the funding for the strike force is actually is dependent on our going-forward request. 

Mrs. BLACKBURN. OK, does Chairman Wheeler have a lack of 

confidence in the IG’s office? 

Mr. WILKINS. No. To the contrary, I think that the work the IG 

has done shows that there is—I think the Inspector General actually agreed, there is plenty of work to do. 

The most important thing is the Universal Service is going 

through so many changes, we think the challenges are going to 

grow. 

Mrs. BLACKBURN. Maybe we need to do away with it. 

Mr. Hunt, you want to weigh in on the strike force? 

Mr. HUNT. I think what I was just saying earlier kind of proves 

my point. There would not be a strike force except for there is so 

much fraud, waste, and abuse out there. 

But the strike force is not limited just to enforcement bureau actions. It is not limited to changing rules which is what we can’t do. 

What we are seeing in our office is that the FCC should focus on 

changing the rules and closing loopholes and then we will do the 

criminal enforcement part. 

But they have now created this new group which they will not 

say will not do criminal work, and—— 

Mrs. BLACKBURN. So they are using it. 

Mr. HUNT. I am sorry, but the Department of Justice has called 

our office up and they are concerned. They have gotten calls from 

the strike force. 

Mrs. BLACKBURN. OK, so, let me be sure we are clear on this. So 

the strike force is, in essence, usurping your authority and some 

DOJ authority, and there is a blurring of who is responsible for 

what? Is that a fair assessment? 

Mr. HUNT. That is the way the IG’s office feels—— 

Mrs. BLACKBURN. OK. 

Mr. HUNT [continuing]. Feels the way it is, because in DOJ’s concern—— 

Mrs. BLACKBURN. OK. 

Mr. HUNT [continuing].Because they are being contacted by the 

strike force and then calling us and saying, who is in charge here? 

38 

Mrs. BLACKBURN. OK, that helps. 

All right, Mr. Hunt, let’s talk about some of the waste, fraud, and 

abuse that is apparent that we all know exists. And that is this 

Lifeline program, or as it has become commonly known in the last 

few years, the ObamaPhone program. 

Consumers, telecommunication consumers pay for this. And we 

hear complaints about this all the time, and the growth of this program from $800 million in 2005 up to $2.2 billion now. And we 

have seen this program really become a symbol of mismanagement 

of USF and the FCC as a whole, kind of this picking and choosing 

what kind of mismanagement you are going to allow. 

Now, last year it was discovered that there were over 2 million 

fraudulent subscribers in this program. So will USF strike force 

focus on eliminating waste, fraud, and abuse from this failed welfare program? 

So Mr. Hunt I want to hear from you first, and then Mr. Wilkins. 

Mr. HUNT. Well, I have I—thank you for the question, Congresswoman. I have no control over the strike force so what they do or 

don’t do, I have no idea. 

I know we are working on low income. We not only do criminal 

law, but we do USF. We do every single program within the USF 

fund. And one of those is low income. And like I said in my opening 

statement, we have gotten our first criminal convictions. When you 

get criminal convictions, it helps quell, once people know they can 

go to jail for things, it helps stem the tide of more crime. 

But we have two people, two people in the entire office that are 

focused solely on low income, and for the numbers you are talking 

about, we don’t have that many people. We are doing what we can 

with the people that we have. 

Mrs. BLACKBURN. All right. 

Mr. HUNT. And part of the $21 million we had was spent to help 

that. 

Mrs. BLACKBURN. Mr. Wilkins, what are you going to do about 

it? 

Mr. WILKINS. The Lifeline example, I think, really demonstrates 

what the role of the strike force ideally would be. 

So the lifeline cases involve exactly that combination of direct 

criminality on fraudulent operators, but also a lot of rule violations 

that need to be aggressively enforced. I think that what I have 

been told for the coordination so far has been good. 

My understanding is that there are actually two cases that the 

strike force, the IG, and the Department of Justice are working on 

jointly as we speak; that there actually has been good coordination. 

If that is not true, I will definitely follow up on that. 

But Lifeline is the perfect example. It is a transition of that program to mobile communications, new rules, lots of opportunity for 

fraud, and a joint effort really is important to crack down on it. 

Mrs. BLACKBURN. All right, yield back. 

Mr. WALDEN. Thank the gentle lady. 

We turn now to the gentleman from Ohio, the vice chair of the 

subcommittee, Mr. Latta, for 5 minutes. 

Mr. LATTA. Thank you, Mr. Chairman. 

And, gentlemen, again, thanks very much for being with us this 

morning. 

39 

Mr. Hunt, if I could start my questions with you. In your most 

recent report to Congress, you identified two significant deficiencies 

related to the FCC’s new financial system, which was implemented 

in October of 2010. According to the report, functionality and integration issues continue to exist, and as a result, certain activity 

continues to be processed manually in order to maintain the accuracy of the system data. 

You also noted that there are security deficiencies in these IT 

systems. The report notes that these deficiencies have been identified by audits over the course of the last several years. 

Would you say it is fair to say that the new system didn’t fix the 

problems that it was intended to correct? 

Mr. HUNT. Congressman, we did have those findings. We believe 

they are trying to upgrade and fix, but to have, in this day and age, 

manual entries when so much money has been spent on computer 

technology and information technology, to have people have to look 

and hand write items in just does not seem like a fair use of time. 

Mr. LATTA. If I could follow up with that, then, how much money 

has been spent if it doesn’t sound like it has been corrected? 

Mr. HUNT. I would have to look that up for you. I can get that 

information. 

Mr. LATTA. If you could get that back to the subcommittee, that 

would be good. 

And in your audits that you have also continually flagged these 

problems. Is that correct? 

Mr. HUNT. Pardon, sir? 

Mr. LATTA. And with your audits that you have been conducting, 

you have continually flagged these problems that have been occurring? 

Mr. HUNT. There are several audit findings that the FCC agrees 

with that occur year after year. 

Mr. LATTA. Could you say when the first year was? 

Mr. HUNT. Oh, my goodness. 

Mr. LATTA. You say year after year. 

Mr. HUNT. We are asked every year by Congress to give a list 

of recommendations that haven’t been completed or fixed. I could 

find that list and give you—— 

Mr. LATTA. Yes. If you could get that to us, we would appreciate 

it. 

And also in one of your more recent reports you indicated the 

commission was not in compliance with the Federal Manager’s Financial Integrity Act because of these deficiencies. Is that correct? 

Mr. HUNT. Yes, sir. That is correct. 

Mr. LATTA. OK. And your office has also described these significant deficiencies as functionality and integration issues. 

How much has this new system cost so far? 

Mr. HUNT. Again, Congressman, I would have to look that up for 

you. 

Mr. LATTA. OK. 

Mr. HUNT. I don’t have the number off the top of my head. 

Mr. LATTA. And do you remember who the contractor was? 

Mr. HUNT. No, sir, I don’t. Not off the top of my head. 

Mr. LATTA. If you could get back to the—— 

Mr. HUNT. I will get you all that. 

40 

Mr. LATTA [continuing]. Committee on that. 

Let me go back to some questions the gentlelady from Tennessee 

had asked, especially with the Strike Force, you know, because in 

your testimony, on page 11 when you were talking—you were talking about the Strike Force, you say, ‘‘This action was taken with 

no coordination with either the OIG or the DOJ, and complications 

abound.’’ 

And I know the gentlelady brought up, should we even have the 

Strike Force? Should it even exist? But in your mind, since thereis 

no coordination and that you don’t have any, really, ability to, it 

sounds like, work within the system, how are you going to fix this? 

Mr. HUNT. Yes, sir, the Congresswoman from Tennessee, when 

she asked the question, Mr. Wilkins said there is coordination between the Strike Force, OIG, and DOJ. That in itself is a problem. 

There should be the DOJ and the IG office. 

The fact that there is coordination between the three supports 

the very problem that we are running into. DOJ is wondering who 

is really in charge here. Who is the criminal investigative team. Is 

it the IG shop or is it the Strike Force? 

If the Strike Force wants to focus on enforcement, if they want 

to focus on changing rules and regulations, we don’t object to that. 

It is when they step over into criminal law there will be—there 

have been coordination issues already. And we don’t see how that 

is ever going to end. 

Mr. LATTA. OK. And just before you had that in your testimony, 

you also said this. You said, ‘‘Further, every time one of my managers has to request permission from the FCC manager to hire 

someone, our independence is impugned. This ongoing practice 

gives my office the appearance of a lack of independence from FCC 

management.’’ 

When you say it looks like there is an appearance of a lack, is 

there a lack of appearance that there is something happening, or 

don’t you have that independence at all? 

Mr. HUNT. Let me just give you an example. The Strike Force 

now contains three people. Those people were hired in a matter of 

months. Sometimes it takes me 6 months to a year to hire people. 

I think it is an appearance of lack of independence if I have to 

go—well, let us just say this. I think it is a lack of independence 

if I have to go and contravene the IG Act by asking HR for permission to hire every single time. 

Now, 1811s, they will argue about that, but even for a paralegal, 

I have to ask permission to hire a paralegal. Now, eventually I will 

get that permission, and I know that they have rules and regulations, but they play with the PD, the position description, which is 

something that we have the capability of doing, and by modifying 

what the position will do is something else we don’t necessarily 

agree with. 

Now, we are working with the managing director’s office. We are 

trying to resolve these issues, but when they can hire people in the 

Strike Force almost instantaneously and it takes us months and 

even a year to do the same, I think that answers itself. 

Mr. LATTA. Thank you very much, Mr. Chairman. 

I see my time has expired, and I yield back. 

Mr. WALDEN. The gentleman yields back. 

41 

I turn now to the gentleman from Nebraska, Mr. Terry, for questions. 

Mr. TERRY. I guess I am next since I’m the last. 

Mr. Wilkins, somewhat related to the Web site issue, but in 2010 

the FCC launched an effort to develop a consolidated licensing system, and it seemed like, frankly, a common sense reform, given 

that the FCC has six different online databases for licenses. 

So if the issuance of low power FM licenses and several of my 

constituents have been provided licenses. I would imagine they 

have had a lot of difficulty if they are trying to find their own license application. 

So can you explain what happened to this initiative? Is it still on 

course? How much money have they spent? What is the timing of 

completion? 

Mr. WILKINS. Yep. So the consolidated licensing system is a great 

example of the overall IT modernization we are trying to accomplish, and so the fundamental need is how do we create a much 

more cohesive enterprise environment to manage efficiently and 

then allow all the users—they do have slightly different needs—to 

have those needs filled. 

You know, I was not the managing director when the specific 

project decisions about the CLS project were made, but we see absolutely the same need. Our modernization effort, a much more 

consolidated and consistent approach to licensing it would be one 

of our best reasons we think it needs to get done. 

Mr. TERRY. What is the time expectations that this could—the 

CLS would be completed and how much money has been spent on 

it so far? 

Mr. WILKINS. Yes, sir. So the timeline truly depends on our funding. The challenge is if we have the funding to commit to the systematic approach we want to take, our timeline will be about a 2- 

year timeline is what we put in place. If we are doing things piecemeal, the timeline could be quite a bit longer. That is a question 

we have to make as we assess. 

Mr. TERRY. Probably the right answer is—I am picking up reading between the lines—is I don’t know, but I will get back to you. 

Mr. WILKINS. Well, we could certainly follow up with specific information on the history—— 

Mr. TERRY. I would appreciate that. 

Mr. WILKINS [continuing]. On the CLS project. 

It is on hold now pending—— 

Mr. TERRY. OK. Well, that is new information. So it is on hold 

now. 

Now, Mr. Hunt, kind of dovetailing to the Intergovernmental 

Personnel Act and borrowed employees, of which Mr. Wilkins and 

the chairman had a discussion, reading some salacious newspaper 

articles regarding FCC and some of their employees, which is disturbing on so many different levels, first of all, that an employee 

is watching pornography, but viewing it at work with government 

taxpayer-owned equipment, but also giving the excuse that they 

are bored. 

If FCC employees have time to engage in that ugly activity, A, 

why do they exist there anyway? Doesn’t that tell us that they 

have more employees than they need? 

42 

Then I want to know is that a criminal act by watching that stuff 

on government-owned or taxpayer-owned equipment? And what’s 

your inspector general’s role in getting rid of that person? 

Mr. HUNT. OK. Thank you, Congressman. 

The IT department of the FCC, they screen for images. It is usually through, I think, a hash number. It is a crime to view child 

pornography. There are hash numbers for those. Normally we go 

to the department of mail—mail department because they are the 

repository of that information, but that is a crime. We have a hot 

line number to the FBI. Whenever child pornography is found, we 

call the FBI immediately. We screen and if—it just depends on the 

severity. If it is child pornography, yes, it is a crime. If it is not, 

no. 

I heard the report also. I think the report was wrong a bit because he said he was watching it 8 hours a day. It was actually 

8 hours a week. I know that doesn’t help. 

Mr. TERRY. Yes, that—— 

Mr. HUNT. But that person was—— 

Mr. TERRY [continuing]. Means really sick versus just sick. 

Mr. HUNT. Right. But it was referred to the IG office from—— 

Mr. TERRY. Should it have been? 

Mr. HUNT. It should have been referred to the IG office, and we 

got the person to resign before he was terminated. So that person 

is gone, but it is an ongoing thing to look for any type of pornography on the system. 

Mr. TERRY. All right. So I will submit a written question since 

my time is up to you, Mr. Wilkins, regarding if the employees are 

that bored why do you have that many employees. 

Mr. WALDEN. Thank the gentleman for his questions. 

We will turn now to Mr. Long for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And, Mr. Hunt, I want to follow up on that just for a minute. 

Speaking of this pornography situation, you said that the gentleman resigned before he was terminated. 

Mr. HUNT. Yes, sir. Yes, sir. 

Mr. LONG. What is the difference? 

Mr. HUNT. I would have to go to the—— 

Mr. LONG. Well, does he get his benefits? I mean, you are a lawyer. Does he get his benefits and things that—is that why he was 

able to resign instead of be terminated? 

Mr. HUNT. I assume he retained his benefits when he resigned, 

yes, sir. I assume that. I don’t know that for a fact, but I can find 

that out for you. 

Mr. LONG. Do. I would appreciate if you would find that out and 

let us know. 

Mr. HUNT. Yes, sir. 

Mr. LONG. Because I don’t get that. 

Mr. HUNT. Yes, sir. 

Mr. LONG. I apologize for my voice and my cold today. 

For both the witnesses, over the summer we heard a little bit 

about the FCC’s Web site crashing during the net neutrality comment period, and was the agency able to ensure that all the comments submitted were collected and accounted for or were some of 

them lost? Mr. Wilkins first. 

43 

Mr. WILKINS. Oh, yes. They were—yes, they were all collected, 

all accounted for. The actual current number as of today is about 

3.7 million total comments filed over that whole proceeding now. 

Mr. LONG. And you are confident none were lost during the 

crash—— 

Mr. HUNT. Yes. 

Mr. LONG. OK. And then what is the plan for the agency to ensure that this type of thing doesn’t happen again? 

Mr. WILKINS. Well, so that is our electronic comment filing system that is part of our external profile. It is different from the Web 

site. It is actually an 18-year-old system. It was developed in the 

late 1990s. 

The technology that underlies it is sort of long gone from the 

commercial world. That is a major focus of our IT modernization 

is that whole system needs to be basically brought into the 21st 

century, and that is what our IT modernization proposal actually 

focuses on. 

Mr. LONG. OK. Mr. Hunt, do you have any comment on the loss? 

Well, it was not lost, I guess, but the crash and whether anything 

was lost and what can be done about it in the future? 

Mr. HUNT. Actually, we haven’t had any complaints or comments 

on that yet. We have heard about it crashing and have the new 

technology—— 

Mr. LONG. You haven’t had any comments about what? I am 

sorry. I didn’t—— 

Mr. HUNT. No. About the Web site crashing. We get our work 

from complaints, and the Web site crashing is not anything we 

have ever been asked to look at yet. 

Mr. LONG. OK. 

Mr. HUNT. But it is one of many things we are considering looking into. 

Mr. LONG. And again for both of you, I will start with you, Mr. 

Wilkins, outside of anything special in your testimony, can you 

each tell me what Congress can do to help you carry out your duties more effectively other than just providing more money? If you 

had a wish list, if you had your druthers, what would you rather 

us do? 

Mr. WILKINS. Right. Well, I will say one thing that does come to 

mind, some of our employees are highly specialized professional 

staff, but we will lose very talented employees sometimes—especially to competing federal agencies that can pay slightly higher 

salaries. 

And, of course, that would not be relevant for most of our employees, but we do have a handful of very important employees who 

have been hired away from competing agencies, and it is still in the 

Federal Government. They can just pay a lot more, and it is sort 

of hard for us to retain that kind of talent. 

Mr. LONG. So that sounds like more money to me. Anything besides more money? 

Mr. WILKINS. You know, it almost—on that issue, I would be fine 

on a net neutral money basis with the ability to take a given employee who is really important and be able to make sure we are 

paying a market rate at least in the government to retain that talVerDate Nov 24 2008 15:41 May 27, 2015 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-175 CHRIS
44 

ent. Would actually add a lot separate from whatever the total 

budget was. 

Mr. LONG. OK. Mr. Hunt? 

Mr. HUNT. Thank you, Congressman. I just want to apologize. 

Sometimes I raise my voice too much because I am just very passionate about what we are doing and what my staff is doing. We 

work very—— 

Mr. LONG. I am hard of hearing. So I appreciate when you raise 

your voice. 

Mr. HUNT. OK. OK. Well, good. You are going to hear more of 

it because the things I mentioned before, letting us hire who we 

want to hire. If they want a Strike Force, tell us exactly what that 

Strike Force is going to do. 

Are they going to do criminal law? If they are going to do criminal law, how do we work that and how does that jibe with the IG 

Act? The IG Act was created to do exactly what the Strike Force 

apparently is intended to do. 

We report to Congress in the same way. We report twice a year 

and they don’t. And I am not saying this would ever, ever happen, 

but there is potential they could find things that we didn’t know 

about and cover them up. I am not saying it would ever happen, 

but there is potential there. 

So we would like to, A, hire who we want to hire when we want 

to hire them. Hire 1811s and get more definitive information on the 

Strike Force or have the Strike Force incorporated within the IG 

office. 

Mr. LONG. OK. Excuse me. OK. I appreciate that, and thank you 

both for your testimony. 

And I yield back with no time remaining. 

Mr. WALDEN. Well done. 

I now turn to the gentleman from California, Mr. Waxman, for 

5, minutes. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

Many questions have been raised concerning Mr. Hunt’s allegations about the Universal Service Fund Strike Force, and I would 

like Mr. Wilkins to respond. 

Could you describe the level of coordination between the IG and 

the Strike Force? 

Mr. WILKINS. So my understanding is that there has been an A, 

just a regular level of coordination since the Strike Force stood up 

its first employee, which was just a couple months ago. One of the 

main areas of activity for the Universal Service Fund, of course, is 

USAC, the administrative company that runs it. 

One of the ways that enforcement issues come from USAC is 

through whistleblower logs that come in to USAC. My understanding is there has been now an agreement that those logs will 

be shared between the enforcement bureau and the IG, and that 

compared to past practice, that is a much higher level of coordination than existed in the past. 

Now, it is very important to the chairman that is in fact what 

is happening, and so if there are issues where our enforcement bureau and staff are not doing that, I actually will go and follow up 

and make sure that it is happening, but that is my understanding. 

45 

Mr. WAXMAN. Well, how would they delineate the respective responsibilities of the IG and the Strike Force? 

Mr. WILKINS. So the IG clearly is the lead on criminal activity 

that relates to Universal Service. I think what we are seeing, 

though, especially as the programs change so much is that it is 

rarely one or the other. Any significant enforcement action very 

often will involve both egregious rule violations and some criminal 

activity. It is actually one very common thing, for example, that an 

enforcement bureau may get a matter, find criminal activity, and 

then refer it to the IG or vice versa. I mean, these are fairly common practices. 

We completely agree with the overall idea that as we add this 

additional enforcement oversight, it has to be closely coordinated to 

not be duplicative. We want nothing but a good coordinated relationship with the IG where needed, and sometimes it should be 

independent. Totally agree that there are areas where the IG 

should—we should not be involved in anything they are doing. 

As the Strike Force hopefully adds some more staff, we will just 

have to make sure all that coordination happens exactly as the 

chairman wants it to. 

Mr. WAXMAN. Mr. Hunt’s testimony asserts that, quote ‘‘FCC 

management retains a right to approve all OIG hires, a requirement which appears to contravene the IG Act and impugn the independence of the OIG,’’ end quote. 

Mr. Wilkins, can you explain the process the FCC uses to pass 

through all OIG hires to be posted by your human resources office? 

Mr. WILKINS. Yes. Thank you for that question. 

It is a passthrough. Whoever the IG wants to hire our HR team 

will put into the system. 

By the way, it is very different than hiring for other places in 

the commission. I personally actually involved in human capital 

planning for other parts of the commission for the IG. Whoever 

they want to put in there they can. 

And, actually, I would almost say that the issue is more about 

the performance of our HR function. So I agree, a 6-month delay 

to get the hire done is not acceptable, and that is actually an overall management issue that we want to work on. 

So I think that all we want to do is make sure that when something is posted, we have done our job on the HR side to make sure 

that whatever the civil service requirements are are complied with. 

They always are. No question. And, frankly, we could just do a better job processing those requests. 

I will say—I did just do a quick check. So just last week we had 

one where approval came in about I think 6 minutes was the email chain, and that probably is because we have really been focussing on it lately. 

So we absolutely can do better in the performance, but full stop. 

Whatever the IG—whoever he wants to hire, we will support it and 

want to do the best job we can. 

Mr. WAXMAN. In other words, the OIG could decline to use the 

FCC HR office for hiring and go to another agency as OIG did with 

procurement? 

Mr. WILKINS. We would love to try to keep their business, but 

they absolutely can, and, in fact, we have another situation where 

46 

our contracting organization earlier this year was really underperforming. We had a huge backlog. The IG’s management staff came 

and said: We are actually thinking about moving to the—the Interior Department has a shared service center, and I said: You know, 

based on the performance you are getting, I can’t argue with you. 

So they actually took that business to the Interior Department. 

We actually now have a new head of contracting that has made a 

lot of improvements, and I have told them—I said, ‘‘Keith, try to 

win back the IG’s business.’’ So they certainly could do that, although we, frankly, think we can do an efficient job supporting 

them, and want to do as good of a job as we can. 

Mr. WAXMAN. Yes, Mr. Hunt. What do you think? 

Mr. HUNT. No, I thank you for letting me respond. 

First of all, when there is evidence of crime, it is not that you 

should go to the IG, you have to go to the IG. There is no option 

there. To say that—I don’t mean to beat up on Mr. Wilkins too 

much. He hasn’t been there that long, but we have had instances 

where we have tried to hire people, like a paralegal, and HR has 

come back and say: You can’t hire a paralegal because the FCC 

doesn’t have any paralegals, which is exactly what we need. 

And this, yes, we did take part of our business—— 

Mr. WAXMAN. Can’t you work this out? 

Mr. HUNT. We took part of our business to the Department of Interior for contracting because we would get our contracts—our 

work to the managing director’s office first. We were first year after 

year after year, and every single year we would be up until midnight on the last second of the last day to get the work done. 

I have had people—last time I testified here I had people who 

pulled IVs out of their arm in a hospital to get back to work to get 

these contracts done. It is—— 

Mr. WAXMAN. Mr. Wilkins, what do you say about that? 

Mr. WILKINS. Well, obviously I can’t speak for past management. 

I absolutely agree our contracting performance was not up to snuff. 

We brought in a new head of contracting on—since he has come in 

in May, we have reduced our backlog from 300 acquisitions to 50. 

So we actually think we could do a much better job supporting the 

IG going forward. 

And on the hiring front—so, again, I can’t speak to anything before I was there. Absolutely, if the IG thinks a paralegal serves 

their mission, there is no reason in the world that we should not 

be able to support that, or, you know, anything else other than, as 

the IG said, the 1811 criminal investigator is a different civil service law question, but, you know, we are fundamentally there to 

make sure that the IG can hire who they want to hire to deliver 

their mission. 

Mr. WAXMAN. OK. 

Thank you, Mr. Chairman. 

Mr. WALDEN. Thank you, Mr. Waxman. 

I am sitting here trying to figure out how an agency that can’t 

quite get a Web site to work and has all these issues is going to 

effectively manage the entire Internet. 

We are going to go now to Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

47 

Happy Liberty Day. I just wanted to let you know I was—left the 

room. I got accosted by a bunch of—we used to call them broaching 

snatchers, little kids who then came to ask me a question about the 

Constitution. I passed the question. I got this sticker. 

Mr. WALDEN. Congratulations. 

Mr. SHIMKUS. So I am very proud. So I would call it Constitution 

Day, but they were calling it Liberty Day. So, first of all, I wanted 

start with that. 

Secondly, in the testimony, it does give us an opportunity just to 

pause, and we do have some very good committed civil service employees in the Federal Government throughout the agencies, and 

we want to make sure we pause and recognize that they are there 

and they are working hard and sometimes with not a lot of support 

from, you know, other folks like us sometimes. 

So having said that, and Congresswoman Eshoo is not here, but 

we serve and we have been working on 911 issues since I have 

been here and as a member of the House, and so, Mr. Wilkins, my 

question really deals with a policy issue that has been resolved policy-wise, and even in the agency it is just implementation of that, 

then I want to follow up on the question, and so it all deals from 

the Middle Class Tax Relief and Job Creation Act of 2012 where 

we required the commission to create the Do Not Call Registry for 

PSAPs, or public service answering points, to address the automatic dialing problem, which can tie up the safety lines, and safety 

lines are no good if they are tied up. 

The commission released a notice of proposed rule making in 

May 2012 and an order on October 17th, 2012. I have addressed 

this a couple times with the commission. Obviously it has not been 

enacted and we haven’t moved forward. So as a new man in charge 

of getting the commission to do, actually then implement, I wanted 

to make you put on record that we are watching and offer you any 

comments upon this issue if you have got anything to mention? 

Mr. WILKINS. Thank you, Congressman. Yes, we are absolutely 

on top of that issue. As you said, the rule making is finished. We 

have actually done the operational planning. I think, as you may 

know, that that system sort of originally it is the Federal Trade 

Commission and they have a contract. We have worked a lot to understand what the most efficient way we can fill the mandate. 

So we basically have a plan, 5-year plan to fulfill that mandate. 

It does require funding. In our 2015 requests, we have a $500,000 

line item to essentially launch that project, and then, of course, 

once you launch that kind of an effort, it does need to be sustained 

over the duration of the effort. 

So we are ready to go and just want to make sure we don’t get 

over our skis in terms of the resources being there to support it, 

but we absolutely are ready to go, and I have spent a lot of time 

looking at it. 

Mr. SHIMKUS. And then from our perspective, that is some of 

this—the IG’s report on who is spending what and how, then that 

allows us to say: Well, maybe we haven’t spent money well in one 

area and if we do have a program that is ready to go but is lacking 

authorization, I guess the question would come what is the internal 

flexibility to move stuff around inter-commission to get what some 

of us would consider a priority? 

48 

Mr. WILKINS. Right. So certainly to a point we can sort of optimize that last bit of the budget. I think the thing that we are cautious about with the PSAP project, it is a multi-year effort that 

does have, actually, several million dollars’ worth of obligation 

against it eventually, and I think we have actually looked at the 

question of well maybe we could find some current funds to start 

it, but then it starts to become fairly risky from a budget and planning standpoint, because then if there is not follow on funding, you 

really do start to cut in pretty deeply to what you have in subsequent years. So—— 

Mr. SHIMKUS. OK. And thank you for that, and let me just finish 

with this. 

Audit revenues are—some of it is allowed for internal operating 

processes, and you have to account for those and make sure that 

they are adequately and appropriately used. 

Do you think you have got plans and policies in place to do that? 

Mr. WILKINS. For options? 

Mr. SHIMKUS. Right. 

Mr. WILKINS. Yes. Absolutely. So obviously the longstanding 

issue at the commission, we use cost accounting method. Wherever 

possible we literally do direct accounting. So an employee has a 

time sheet ability to say: I spent time on options, and that is you 

know, that is as direct as you can get. 

For IT costs where there is varying degrees of sharing among IT 

systems, we actually take a e-system, try to really decide how 

much of it was for options, and then there is a small bit of overhead where we do use a ratio of time spent, options/not options, to 

allocate a small amount of overhead, and we have been audited 

many years on that and had auditors—— 

Mr. SHIMKUS. And you do a review. Is that review complete? 

Mr. WILKINS. Well, no. So we constantly want to make sure that 

we are treating those allocations correctly, and so that is just an 

ongoing effort, and when—our auditors always ask us to—— 

Mr. SHIMKUS. And if we followed up with a question on sharing 

some of the results—— 

Mr. WILKINS. Sure. We can do that. 

Mr. SHIMKUS [continuing]. You wouldn’t have any problem with 

that? 

Mr. WILKINS. Absolutely. 

Mr. SHIMKUS. All right. Thank you very much. 

Mr. WALDEN. Thank the gentleman for his questions. 

We turn now to the gentleman from New Jersey as our last questioner. 

Mr. LANCE. No questions. 

Mr. WALDEN. And then we are done. 

So thank you very much to our panel. We will have some questions for the record that we will be submitting to you in the due 

course of time, and I imagine there may be some other members 

who had conflicting hearings today that might also have questions. 

We appreciate your response to all of our inquiries, and I know 

sometimes there are a lot of inquiries, but we are trying to do our 

oversight job just as you are trying to make the agency run better 

from every perspective. 

49 

So thanks for sharing your thoughts with us, your investigations, 

and the progress that you are making I commend you for and we 

look forward to continuing this dialogue. 

The subcommittee is adjourned. 

[Whereupon, at 11:45 a.m., the subcommittee was adjourned.] 

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69 


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70 


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71 


93843.040
72 


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73 


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74 


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75 


93843.044
76 


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77 


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78 


93843.047
79 


93843.048
80 


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81 


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82 


93843.051
83 


93843.052
84 


93843.053
85 

Æ 


93843.054