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42–916—PDF 2008

S. HRG. 110–415

NOMINATIONS OF DEANNA TANNER OKUN,

RICHARD T. MORRISON, DAVID D. GUSTAFSON,

ELIZABETH CREWSON PARIS, ERIC M. THORSON,

AND EDWIN ECK

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

ON THE

NOMINATIONS OF

DEANNA TANNER OKUN, TO BE DEPUTY U.S. TRADE REPRESENTATIVE,

EXECUTIVE OFFICE OF THE PRESIDENT; RICHARD T. MORRISON,

DAVID D. GUSTAFSON, AND ELIZABETH CREWSON PARIS, TO BE

JUDGES ON THE U.S. TAX COURT; ERIC M. THORSON, TO BE INSPECTOR GENERAL, U.S. DEPARTMENT OF THE TREASURY; AND EDWIN

ECK, TO BE A MEMBER OF THE INTERNAL REVENUE SERVICE OVERSIGHT BOARD, U.S. DEPARTMENT OF THE TREASURY

APRIL 17, 2008

(

Printed for the use of the Committee on Finance
COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

JOHN E. SUNUNU, New Hampshire

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)
(III)

C O N T E N T S

OPENING STATEMENTS

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 4

Crapo, Hon. Mike, a U.S. Senator from Idaho ...................................................... 6

Roberts, Hon. Pat, a U.S. Senator from Kansas ................................................... 7

ADMINISTRATION WITNESSES

Okun, Hon. Deanna Tanner, nominated to be Deputy U.S. Trade Representative, Executive Office of the President, Washington, DC ................................. 10

Morrison, Richard T., nominated to be a judge on the U.S. Tax Court, Washington, DC ............................................................................................................. 11

Gustafson, David D., nominated to be a judge on the U.S. Tax Court, Washington, DC ............................................................................................................. 12

Paris, Elizabeth Crewson, nominated to be a judge on the U.S. Tax Court,

Washington, DC ................................................................................................... 13

Thorson, Hon. Eric M., nominated to be Inspector General, U.S. Department

of the Treasury, Washington, DC ....................................................................... 15

Eck, Edwin, nominated to be a member of the Internal Revenue Service

Oversight Board, U.S. Department of the Treasury, Washington, DC ........... 16

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

Opening statement ........................................................................................... 1

Cantwell, Hon. Maria:

Prepared statement .......................................................................................... 25

Crapo, Hon. Mike:

Opening statement ........................................................................................... 6

Eck, Edwin:

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 26

Biographical information ................................................................................. 27

Responses to questions from committee members ......................................... 36

Grassley, Hon. Chuck:

Opening statement ........................................................................................... 4

Letter from Max V. Kidalov, Esquire, dated April 16, 2008 ......................... 38

Gustafson, David D.:

Testimony .......................................................................................................... 12

Prepared statement .......................................................................................... 40

Biographical information ................................................................................. 41

Responses to questions from committee members ......................................... 50

Morrison, Richard T.:

Testimony .......................................................................................................... 11

Prepared statement .......................................................................................... 52

Biographical information ................................................................................. 53

Responses to questions from committee members ......................................... 57

Okun, Hon. Deanna Tanner:

Testimony .......................................................................................................... 10

Prepared statement .......................................................................................... 61

Biographical information ................................................................................. 63
Page

IV

Paris, Elizabeth Crewson:

Testimony .......................................................................................................... 13

Prepared statement .......................................................................................... 76

Biographical information ................................................................................. 78

Roberts, Hon. Pat:

Opening statement ........................................................................................... 7

Snowe, Hon. Olympia:

Prepared statement .......................................................................................... 87

Thorson, Hon. Eric M.:

Testimony .......................................................................................................... 15

Prepared statement .......................................................................................... 89

Biographical information ................................................................................. 91
(1)

NOMINATIONS OF DEANNA TANNER OKUN,

TO BE DEPUTY U.S. TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT; RICHARD T. MORRISON, DAVID D.

GUSTAFSON, AND ELIZABETH CREWSON

PARIS, TO BE JUDGES ON THE U.S. TAX

COURT; ERIC M. THORSON, TO BE INSPECTOR GENERAL, U.S. DEPARTMENT OF THE

TREASURY; AND EDWIN ECK, TO BE A MEMBER OF THE INTERNAL REVENUE SERVICE

OVERSIGHT BOARD, U.S. DEPARTMENT OF

THE TREASURY

THURSDAY, APRIL 17, 2008

U.S. SENATE,

COMMITTEE ON FINANCE,

Washington, DC.

The hearing was convened, pursuant to notice, at 10:08 a.m., in

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus

(chairman of the committee) presiding.

Present: Senators Stabenow, Salazar, Grassley, Crapo, and Roberts.

Also present: Democratic staff: Russ Sullivan, Staff Director; Bill

Dauster, Deputy Staff Director and General Counsel; John Angell,

Senior Advisor; Demetrios Marantis, Chief International Trade

Counsel; and Rebecca Baxter, Tax Counsel. Republican staff: Kolan

Davis, Staff Director and Chief Counsel; Mark Prater, Deputy

Chief of Staff and Chief Tax Counsel; Stephen Schaefer, Chief

International Trade Counsel; David Ross, International Trade

Counsel; Ellen McCarthy, Tax Counsel; Theresa Pattara, Tax

Counsel; Chris Condeluci, Tax and Benefits Counsel; and Nick

Wyatt, Tax Assistant.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The hearing will come to order.

Emerson called adaptability the best bulwark against hard economic times. He wrote, ‘‘The best political economy is the care and

culture of men.’’ Today we would say ‘‘human capital.’’ Emerson

wrote that the ones to succeed would be ‘‘proper individuals capa-
2

ble of thought and of new choice in the application of their talent

to new labor.’’

Today we will consider the nominations of several individuals appointed to important jobs in the economy. And as Emerson counseled, these positions will all require propriety, thought, and the

ability to apply their talents to new situations.

Today we will consider the nominations of Deanna Okun to be

Deputy U.S. Trade Representative; Richard Morrison, David Gustafson, and Elizabeth Paris to be judges on the U.S. Tax Court;

Eric Thorson to be Treasury Inspector General; and Ed Eck to be

a Member of the Internal Revenue Service Oversight Board.

First, the President has nominated Deanna Okun to be Deputy

U.S. Trade Representative. She would handle many critical issues

in regions including Asia. The Deputy USTR job is an important

one. The person who fills this role must seek not just to expand

trade, she must also ensure that our trade agreements are enforced. The Deputy USTR must engage in the art of diplomacy. She

must act simultaneously as a negotiator and an enforcer, and she

must, first and foremost, represent the interests of the United

States.

This is no easy task. But Ms. Okun brings with her years of experience in trade, first as a congressional aide to former Senator

and Finance Committee member Frank Murkowski, and also in

many other areas. Most recently, she has served as Commissioner

of the International Trade Commission. In that role she oversaw

the enforcement of U.S. trade laws as they relate to antidumping,

countervailing duties, and safeguards.

Ms. Okun’s nomination raises questions under a statutory provision that bars appointments of Deputy USTRs who represented a

foreign government in a trade dispute with the United States. In

the mid-1990s, Congress responded to a similar issue with a joint

resolution waiving application of the statute. Additionally, some

Senators have indicated that they may have concerns and want to

meet with Ms. Okun. Plainly, these concerns will have to be addressed before Ms. Okun’s nomination can proceed.

If she is confirmed, I hope that Ms. Okun will bring a commitment to enforcement with her to USTR, and I hope she will pursue

her duties with America’s interests at the forefront of her heart

and mind.

Next, three of our nominees today are headed for the Tax Court.

The Tax Court plays a central role in the maintenance of our tax

laws. Congress created the court in 1969 to be the Federal Judiciary’s resident tax law experts. The increasing complexity of the

tax laws demands the appointment of highly skilled judges to the

bench. Every day we hear about new shelters developed that require the expertise to understand the issues and perspective from

years of tax practice to analyze and accurately apply tax laws.

The Finance Committee takes seriously its role as the gatekeeper

for this court. It is the committee’s duty to ensure that judges nominated to serve on the Tax Court are prepared to tackle complex

tax issues. All of our nominees bring with them a combination of

government and private sector work in the tax field. Their experience and extensive knowledge make them well-suited to be judges

on the Tax Court.
3

Richard Morrison has spent a number of years with the Department of Justice. He is the Deputy Assistant Attorney General of

Review and Appellate. He has also practiced with a law firm in

Chicago, concentrating on tax law.

David Gustafson has also spent a number of years in the Department of Justice, currently serving as a chief of the Court of Federal

Claims Section with the Tax Division. Mr. Gustafson has held a

number of positions with the Department of Justice and has also

practiced with a firm here in Washington, DC.

And Elizabeth Paris is a very familiar face to this committee. Ms.

Paris has spent the past 8 years with the Senate Finance Committee staff, helping to shepherd through several significant pieces

of tax legislation. In addition to her years of government service,

Ms. Paris also has extensive experience practicing law in the private sector.

I am confident that all of our Tax Court nominees possess the

knowledge and experience necessary to help ensure that our tax

laws are administered fairly.

Next is the Treasury’s Inspector General. At the birth of our Nation, the Continental Congress appointed an Inspector General to

oversee the Army. The Continental Congress charged that Inspector General with ensuring that scarce resources were spent wisely

during times of war. There are reports that the then-General

George Washington resented the presence of someone questioning

his decisions. Plainly, not much has changed.

Mr. Thorson, like the first Inspector General, will be dealing with

some strong personalities. The Treasury Department has responsibility for critical economic, international, and tax issues and attracts talented staff with expertise in these complex matters.

But like any department when it comes to management, there

are bumps in the road. During the Bush administration there have

been Treasury Inspector General investigations involving two of

the three Secretaries of Treasury.

This committee will also rely on the IG to be our eyes and ears

at the Treasury. For example, this committee has been looking

closely at the Treasury’s Office of Terrorism and Financial Intelligence, or TFI. The Treasury’s IG Office has briefed us on the

management challenge facing them with the TFI, that is—and

some would call it a failure—the inability to get up and running

a computer system that connects Treasury to the other intelligence

agencies.

I will be counting on Mr. Thorson to monitor this issue and ensure that the professional level of work at the IG Office continues.

Mr. Thorson brings with him wide-ranging experience from his current position as Inspector General of the Small Business Administration, and I hope that his previous government service for both

the Senate Finance Committee and the Senate Permanent Subcommittee on Investigations has also given him the tools that he

can use as the Treasury Inspector General.

There are still bruised feelings in the tax community regarding

the IRS oversight hearings that Mr. Thorson coordinated in the

late 1990s. We will not re-litigate those today because good reports

have generally been received on Mr. Thorson’s efforts as IG at the

Small Business Administration, but I want to emphasize how crit-
4

ical it is for Mr. Thorson to be fair and impartial as he carries out

his duties at the Treasury Department.

Finally, I am very pleased that a fellow Montanan, Ed Eck, has

been nominated to be a Member of the Internal Revenue Service

Oversight Board. The Oversight Board is an independent body responsible for overseeing all aspects of IRS strategy and operations.

The IRS Oversight Board was created to improve the IRS so that

it may better serve the public and meet the needs of the taxpayers.

Ed was born and raised in Lewistown, MT. He currently lives in

Missoula, and there in Missoula he is a dean of the University of

Montana Law School. I might add, he has done a great job as dean.

Ed brings with him 30 years of experience with tax laws as a

practitioner, as an Assistant U.S. Attorney in Billings, and as an

academic. Over the last 30 years, Ed Eck has looked at the tax

laws from all sides, and his vast array of experience will serve him

well as he takes on a new role: assisting the IRS Oversight Board

in evaluating the IRS’s strategies and operations.

So I hope that all the nominees before us today will be able to

serve the country in these difficult economic times. I hope they will

exercise propriety, thought, and the ability to apply their talents to

these new situations. I hope that, thereby, they will all be able to

succeed.

Senator Grassley?

OPENING STATEMENT OF HON. CHUCK GRASSLEY,

A U.S. SENATOR FROM IOWA

Senator GRASSLEY. Thank you very much, Mr. Chairman.

Thanks, each of you, for your public service and your desire to continue that public service.

Ms. Okun comes with the broad background that Senator Baucus

has referred to, working for Senator Frank Murkowski, being on

the International Trade Commission, obviously extremely wellqualified to assume these new duties as Deputy U.S. Trade Representative. I hope to see this nomination proceed expeditiously, because negotiations on international trade are so very, very important.

Then we hear from Richard Morrison, a nominee to the U.S. Tax

Court. He has done extensive work in the private sector, as well

as more than 6 years working at the Department of Justice.

David Gustafson, nominated for the Tax Court, boasts extensive

experience from the Justice Department that is going to serve him

well in that area.

I have had the honor of working with Elizabeth Paris, because

she worked for the committee even before I took over the chairmanship of it, and she has served me, the committee, and eventually,

one way or another, all Senators very well. I am glad that Elizabeth’s father, Joel, and sister, Martha, are able to be with us today.

There is a great deal of clarity and intelligence in what Elizabeth

does, so she has brought great talent to the Senate Finance Committee that benefitted many people, and probably without most of

these people she contacted and worked with and worked for even

realizing it.

In leaving her position as a partner of a major law firm, taking

on relentless pressures that we all know about here on the Hill,
5

crafting tax legislation, she has grappled with issues as diverse as

estate tax, highway and energy issues, and agricultural issues. Numerous sections of the Internal Revenue Code that she has worked

on touch the lives of millions of people. Those provisions are better,

in my judgment, for her involvement.

She attended the University of Tulsa, and Elizabeth earned beyond that an LLM in taxation at the University of Denver. Senator

Baucus has already referred to her private practice. She brings a

great deal of experience to her work for the Senate Finance Committee, and now will take that to the Tax Court.

She also has the personal qualities necessary to succeed in the

tough and changing environment that tax law is. Elizabeth treats

everyone with the greatest respect and makes herself available to

listen to anyone who wants to share information with her, regardless of what side of an issue they may be approaching her on.

Working in a truly bipartisan manner, she knows that nothing gets

done in the Senate that is not done in a bipartisan way, so she consequently never hesitates to offer her guidance to any staffer or

member, regardless of political affiliation.

These are not skills that you learn in law school or pick up in

a continuing education seminar, but are nonetheless vital for this

committee’s work. That experience will benefit the Tax Court.

Now, obviously I am sorry, Elizabeth, that you are leaving the

work of the committee, but I know that taxpayers will continue to

benefit from your judgment. This nomination marks the next step

in a meaningful and successful career.

Elizabeth can cite chapter and verse from the Internal Revenue

Code, and you hardly ever see her walking the halls of Congress

without that code being under her arm—and it is light for as small

a girl as she is. [Laughter.]

She is a person who can talk aggie talk. That is beneficial for

those of us who are farmers. People had to learn what a cow/calf

unit was from her. Whether we are talking crops, animals, or soil

of the farm itself, Elizabeth understands the practical, legal, economic, and political implications of proposals she is considering. I

am very grateful for that resource.

I move on to another person I consider a friend, Eric Thorson,

nominated to be Inspector General, coming from that same position

at the Small Business Administration. Before he ever became Inspector General, I found Eric very helpful in my doing my job of

oversight, whether it was as an individual Senator or using the resources of committees to help with that oversight work. He has

been a wonderful resource and a person that digs, and digs, and

digs.

I think, Mr. Chairman, that you will find him to be a person who

will do exactly what you expected, to do it without any political

predilections about getting the job done. As law enforcement officers, IGs and their staffs must, in fact, investigate fraud, waste,

and abuse within government without any political predilections.

As citizens, we depend upon these Inspectors General to ensure

that government agencies are good stewards of the resources we

entrust to them. We also depend upon IGs to make sure that government officials do not abuse the authority that we give them and

engage in inappropriate and sometimes criminal activity.
6

Mr. Thorson has continued to demonstrate that he is a man of

integrity and character. He has what it takes to protect the public

interest at the Treasury Department. Before working at the Small

Business Administration, Eric was Chief Investigator for this committee and for the Senate Permanent Subcommittee on Investigations. As Treasury’s top cop, I am confident that Eric will prove

himself to be a champion of the taxpayers, and most importantly,

a tireless investigator of corruption.

Our final nominee, Mr. Eck, nominated to the IRS Oversight

Board, is currently dean of the University of Montana School of

Law. Mr. Eck’s experience in private practice and as a law professor will be of great help in assisting the IRS in implementing

our tax laws, while respecting the taxpayers.

Thank you all for your willingness to serve.

The CHAIRMAN. Thank you, Senator.

Now I would like to introduce the witnesses. I understand that

Senator Crapo would like to introduce Ms. Okun, and Senator Roberts, Mr. Morrison.

So, gentlemen, why don’t you proceed?

OPENING STATEMENT OF HON. MIKE CRAPO,

A U.S. SENATOR FROM IDAHO

Senator CRAPO. Thank you very much, Mr. Chairman. Thank you

for holding this hearing. Thank you to all of our nominees who are

here with us today for your willingness to serve our country.

Those who submit themselves to the confirmation process deserve our respect, and we owe it to them and to the public to consider their nominations in a fair and timely manner.

I especially appreciate the opportunity today to introduce

Deanna Tanner Okun, who has been nominated to serve as Deputy

U.S. Trade Representative. As Deputy U.S. Trade Representative,

Commissioner Okun will have responsibilities with Asia and Africa.

The President and Ambassador Schwab have made a great choice

in selecting Deanna for this position.

Commissioner Okun is well-qualified. She has significant experience as Commissioner with the U.S. International Trade Commission, years as Senate staff, and as a trade lawyer. She has a deep

understanding of essential industries to this Nation: agricultural,

manufacturing, and services.

Additionally, Deanna’s background and work with trade laws

and regulations, trade remedy cases, dispute resolution, and tariff

and non-tariff barriers demonstrate that she has the tools necessary to be an effective Deputy U.S. Trade Representative.

In this position she will be engaged in a number of trade issues

of great importance to the communities and people of this great

Nation. Idaho has been cited by the International Trade Commission as the sixth highest State in the Nation in terms of export

growth from 2006 to 2007. Expanding trade opportunities is an essential part of our efforts to increase our Nation’s global competitiveness.

When she is confirmed, Commissioner Okun will also bring to

this position the valuable perspective of being from a rural farming

community in Idaho. She is originally from Paul, ID. Paul is an
7

area located in a part of Idaho known as the ‘‘Magic Valley,’’ which

is home to a thriving agriculture industry.

Commissioner Okun’s roots in this part of Idaho will serve her

well as she works on the trade policy that is so important to our

Nation’s farm families and communities across this country like

Paul, ID. It is important that our Trade Representatives understand rural America and recognize that it is not just about large

farms and industries, but it also about the small farmers who also

need trade opportunities and market access.

Commissioner Okun has the valuable perspective of understanding the challenges of small towns across America and the differing roles that trade plays in their viability. I am confident that

Commissioner Okun’s education and experience in both the public

and private sectors will be a great asset to the USTR. I support her

nomination and look forward to its expeditious handling, and working with my colleagues to confirm her.

And Mr. Chairman, before I give up the mic I also would be remiss if I didn’t say something about Elizabeth Paris, whom we

have all worked with already. In the interest of time, I would just

say that I join with the comments that both the Chairman and our

Ranking Member have already made about Elizabeth. Congratulations, Elizabeth, for this important step in your career.

The CHAIRMAN. Senator Roberts?

OPENING STATEMENT OF HON. PAT ROBERTS,

A U.S. SENATOR FROM KANSAS

Senator ROBERTS. Mr. Chairman, what an impressive group of

nominees. I feel very, very good about this, that we have these

folks who are willing to serve us in public service and climb up the

ladder in doing so.

Before I get to Richard Morrison’s introduction, I would like to

quickly express my strong support, along with my colleague and

friend from Idaho, for Deanna Okun’s nomination for Deputy U.S.

Trade Representative. If she’s from Magic Valley, she can work

magic there at the USTR. We need a little magic over at the USTR.

We need a little magic here in the Congress to figure out our challenges in regards to trade.

But Deanna’s extensive background and experience make her a

strong match for the responsibilities of the position, and I am

pleased to support her nomination. If any Senator, Mr. Chairman,

has any reservations about Deanna, Mike, myself, and Bob Dole,

who had the amendment that you referred to where we have to

waive it, we three can go right along with her and I am sure that

we three could certainly vouch for all of her talents and why we

need her on board, as of yesterday.

I also want to recognize Ms. Paris and thank her for her work

as Tax Counsel for this committee and her extensive work on behalf of every member. I am not going to repeat what the Ranking

Member has said; he pretty well summed it up. Elizabeth said one

of her first issues when she came to the committee in 2000 was

working on the estate tax; so, Mr. Chairman, I would like to ask

unanimous consent that we simply repeal the estate tax today, so

Ms. Paris can move into her new career knowing that we have addressed her issue. [Laughter.] Without objection, it is so ordered.
8

[Laughter.] I do not think I have the Chairman’s attention. [Laughter.]

The CHAIRMAN. But you are getting it, Senator. [Laughter.]

Senator ROBERTS. Senator Grassley mentioned ‘‘clarity’’ and ‘‘talent.’’ Basically, Elizabeth has that and so much more; always

friendly, always pleasant, always with the extensive background,

always with the right answer. As everybody knows, we are in a

briar patch—we are Br’er Rabbit, if you will—with the farm bill.

If there is a thicket before us, one of the few people I know around

here who can show us the way out of the thicket is Elizabeth. So

she is going to do just an outstanding job, and many thanks for

what you have done.

It is my great pleasure to offer for nomination as judge on the

U.S. Tax Court Richard Morrison. Richard is a native Kansan. He

represents the values of our State: a strong ethic and a commitment to common sense. Growing up in Hutchinson, KS, America,

where he attained the rank of Eagle Scout, Mr. Morrison has long

had an interest in public service. His nomination continues our

State’s tradition of offering outstanding individuals to serve our

government.

His career path is an ideal one for the position for which he is

nominated. I think Senator Grassley already went over this. He

has a strong background in government and an impressive resume

in the legal field. After completing his undergraduate degree at the

University of Kansas, he earned his law degree at the University

of Chicago.

Following law school, Richard served as law clerk for Judge Jerry

E. Smith of the U.S. Court of Appeals for the Fifth Circuit. Before

practicing law in Chicago, he held the position of Deputy Attorney

General for the Review and Appellate Division, and most recently

served as the Acting Assistant Attorney General for the Tax Division. I am sure that these positions did provide him with valuable

experience and an in-depth understanding of our country’s tax system and the appellate process.

His experience in both government and the legal field makes him

an excellent choice to serve as judge on the U.S. Tax Court. I am

very pleased—it is a personal privilege—to recommend Mr. Morrison, a fellow Kansan, as judge for the U.S. Tax Court.

So, Richard, I wish you the very best. I encourage the speedy

confirmation of your nomination by this committee and the U.S.

Senate.

Thank you, Mr. Chairman. I am also very happy that his dad,

Bob, is in the audience. He is blessed with two great parents who

have been great friends of mine. Thank you very much, sir.

The CHAIRMAN. Thank you, Senator.

Let me introduce the rest. David Gustafson, as I mentioned before, is nominated to be judge of the Tax Court; Elizabeth Paris,

about whom we have heard very much—all accurate—nominated to

be a judge of the U.S. Tax Court; Ed Thorson, Inspector General;

and Ed Eck, IRS Oversight Board. Thank you for coming.

Frankly, at this point I would like to maybe go down the line

here. Some of you may have family you want to introduce. So, we

would like to be introduced to your family if you have some family

here.
9

Ms. Okun, why don’t you begin?

Ms. OKUN. Thank you, Chairman Baucus, for the opportunity to

introduce my family. I am joined here today by my husband, Bob

Okun; by my daughter Kelsi, who turned 10 on Monday; my daughter Rachel, who is 12; and my mother, Beverly Morgan, who is visiting.

The CHAIRMAN. Could you all just stand? This is a big day. Could

you all stand up? Thank you very much for, together, doing all this.

[Applause.]

Ms. OKUN. Thank you, Mr. Chairman.

The CHAIRMAN. This is a common effort, a team effort.

Mr. Morrison?

Mr. MORRISON. Thank you, Mr. Chairman. I am happy to be

joined here today by my wife, Rebecca and my father, Dr. Robert

Morrison.

The CHAIRMAN. Why don’t you both stand, too? That is great.

Thank you very much. Thank you.

[Applause.]

The CHAIRMAN. Mr. Gustafson?

Mr. GUSTAFSON. Thank you, Mr. Chairman. My wife, Sharon

Fast Gustafson is here, along with eight of my children.

The CHAIRMAN. Wow.

Mr. GUSTAFSON. My son Adam and his wife Catherine; my

daughter Story; my son Ansel; my daughter Susan; my son Gray;

another son, Garrett; and two daughters, Sara and Sonnet; and

also my sister, Gail Maynard, are here today.

The CHAIRMAN. You said eight of your children. Do you have

more?

Mr. GUSTAFSON. Sigrid is 22 months old and does not really have

a proper interest in civic matters. [Laughter.]

The CHAIRMAN. All right. Would you all stand, please, the whole

family?

[Applause.]

The CHAIRMAN. Thank you all very much.

Ms. Paris?

Ms. PARIS. Thank you, Mr. Chairman. My father, Joel Crewson,

is here from Tulsa, OK, and my sister, Martha Mitchell, is here

from Fayetteville, AR.

The CHAIRMAN. Super. Stand up, please.

[Applause.]

The CHAIRMAN. Mr. Thorson?

Mr. THORSON. Mr. Chairman, I would like to introduce my wife,

Susan, and my father-in-law, Arthur White.

The CHAIRMAN. Good. Stand please. Thank you.

[Applause.]

Mr. ECK. Mr. Chairman, I would like to introduce my wife, Joyce,

and my sister Elaine, and I have two nephews, Noam and Steiff

Wiggs, who are in the back of the hearing chamber.

The CHAIRMAN. Great. All four of you stand.

[Applause.]

The CHAIRMAN. All right.

Why don’t you begin, Ms. Okun?

I might say, Ms. Paris, Senator Grassley deeply apologized that

he cannot be here for the rest of the hearing. He said he is very
10

embarrassed. ‘‘I should be here for her testimony,’’ he said. But he

has to leave to go to another meeting. He wanted me to tell you

that.

Ms. PARIS. I appreciate that. The farm bill. I understand.

The CHAIRMAN. All right. Thank you.

Ms. Okun?

STATEMENT OF HON. DEANNA TANNER OKUN, NOMINATED TO

BE DEPUTY U.S. TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, DC

Ms. OKUN. Thank you, Mr. Chairman and members of the committee. I am honored to appear before you today as President

Bush’s nominee for Deputy U.S. Trade Representative. I am grateful to the President for nominating me for a position central to pursuing America’s pro-growth trade agenda. I also want to say thank

you to Senator Crapo, my home State Senator, for your words of

support this morning.

I last appeared before this committee 8 years ago when I was a

nominee for my current position as Commissioner with the U.S.

International Trade Commission. I know this committee places a

strong emphasis on nominees who will open overseas markets by

defending America’s trade interests and enforcing our trade agreements.

If confirmed, I look forward to representing the United States in

the international trade arena by enforcing and defending U.S.

trade laws, breaking down barriers to trade and investment, and

pursuing market-opening opportunities that benefit America’s manufacturers, ranchers, farmers, service providers, and workers.

I pledge to vigorously pursue every avenue, both bilaterally and

multilaterally, to enforce our trade laws. USTR is tasked with

opening markets and ensuring they stay open. As Ambassador

Schwab has said, negotiation and enforcement are ‘‘both equally

important tools in our fight to keep American workers competitive

in the international market.’’ Absent effective enforcement, a trade

agreement can become just another piece of paper. Every single negotiator who works for USTR understands that a core part of his

or her job is holding other governments to their word.

Mr. Chairman, I want to reassure this committee that, if confirmed, my top priority will be to ensure that our trading partners

live up to their trade obligations.

America’s trade policy ultimately depends on a partnership between Congress and the President, and this in turn is dependent

on a level of trust between members of Congress, the President,

and his team. If I am confirmed by the Senate, I will strive to establish a strong working relationship with members of this committee. I will seek your advice, and I would welcome the opportunity to meet with you, to travel to your States to hear firsthand

from your constituents about trade issues important to them.

I have served the public for 15 years, first as a legislative aide

in the U.S. Senate, and for the last 8 years as a Commissioner on

the International Trade Commission. My public service, combined

with my private sector experience as a lawyer, has provided a

unique perspective on the tangible effects of trade in our economy.
11

I have a deep appreciation for the importance of enforcing our

trade laws and holding our trade partners accountable to their

commitments. If confirmed, I will put my experience to work on behalf of America’s workers, farmers, and ranchers.

As a Commissioner, I have developed extensive knowledge about

the challenges faced by U.S. manufacturers, service providers, and

agriculture in today’s global marketplace. I have participated in

more than 1,000 antidumping, countervailing duty, safeguard, and

other types of cases brought by the domestic industry under U.S.

trade laws.

Through adjudicating trade remedy cases at the Commission, I

have gained insight into the importance of enforcing trade laws.

Much of my experience is hands-on learning, where I have had the

opportunity to travel across the United States and to other countries to visit factories and farms.

As noted, I am also a former Senate staffer. I served as an aide

to Senator Frank Murkowski, who sat on this committee, advising

him on trade and foreign policy issues. I want to assure the committee that I understand the critical role that Congress plays in developing U.S. trade policy and the importance of a healthy working

relationship between the administration and Congress, and with

members of this committee in particular. If confirmed as a member

of the President’s trade team, I pledge to continue to work closely

with the Congress.

On a personal note, as Senator Crapo noted, I grew up in the

Magic Valley in Southern Idaho. I know firsthand the issues facing

our farming communities, which are the backbone of our trade exporting community. If confirmed, I will bring this knowledge, my

public and private sector experience, as well as my education and

background to effectively serve our country as Deputy USTR.

Let me close by again thanking the President for nominating me

to be the Deputy U.S. Trade Representative. I would also like to

reiterate my appreciation to you, Mr. Chairman, to Senator Grassley, and to the other members of the committee for allowing me to

appear before you today.

Last, and most importantly, I want to thank my husband Bob,

my children, Rachel and Kelsi, and my parents and sister for their

support for me while I have been in public service.

Mr. Chairman and members of the committee, I would be pleased

to answer any questions you have, and of course to respond to any

Senator’s written inquiries.

Thank you.

The CHAIRMAN. Thank you, Ms. Okun.

[The prepared statement of Ms. Okun appears in the appendix.]

The CHAIRMAN. Mr. Morrison?

STATEMENT OF RICHARD T. MORRISON, NOMINATED TO BE A

JUDGE OF THE U.S. TAX COURT, WASHINGTON, DC

Mr. MORRISON. Thank you, Mr. Chairman, and thank you, members of the committee. Thanks for holding this hearing and considering these nominations. I appreciate the kind remarks of Senator

Pat Roberts of Kansas. I wish to thank President Bush for putting

forward my nomination to the Tax Court.
12

The Tax Court assures taxpayers that they can challenge the determinations of the Internal Revenue Service before an independent and impartial decision maker. If I am confirmed, I look

forward to participating in this important work.

Currently, I serve as Deputy Assistant Attorney General in the

Department of Justice’s Tax Division. In the course of my work, I

participated in several trials of complex tax cases, I have helped

represent the government in over 100 tax cases heard by the U.S.

Court of Appeals—many of which were on appeal from the Tax

Court—and I have helped to resolve over 100 civil tax cases

through settlement or through concession.

One of my first duties upon joining the Department in 2001 was

not a tax litigation matter, it was to provide assistance to the September 11th Victims Compensation Fund and in resolving the

fund’s tax issues. From July, 2007 to January, 2008, I was privileged to serve as Acting Assistant Attorney General for the Tax Division.

Among the many rewards of my job is the opportunity to work

with dedicated lawyers like David Gustafson, sitting directly to my

left, a fellow nominee for the Tax Court bench, and the head of the

Tax Division’s representation before the Court of Federal Claims.

I have also had the honor of working with two excellent leaders

of the Tax Division: Eileen O’Connor, a former Assistant Attorney

General of the Tax Division who is here today, and Nathan

Hochman, who is our current Assistant Attorney General for the

Tax Division, who is arguing a case before the Ninth Circuit today.

Before my tenure at the Department of Justice, I represented

taxpayers before the U.S. Tax Court, and therefore I have experience seeing both sides of tax controversies, both from the taxpayers’ view and from the government’s view.

On a personal side, I wish to thank my family for their support.

My wife Rebecca, who is here today, has been wonderful and is the

mother of my two boys; and my father, Robert Morrison, and my

mother, Wanda Morrison.

Finally, I owe a special debt to the person who first hired me in

my first legal job, and that is my brother, Robert Morrison. He

hired me as a tax clerk in his bankruptcy practice 20 years ago.

Finally, thank you again for the opportunity to testify, Mr.

Chairman. I look forward to any questions the committee might

have.

The CHAIRMAN. Thank you, Mr. Morrison.

[The prepared statement of Mr. Morrison appears in the appendix.]

The CHAIRMAN. Mr. Gustafson?

STATEMENT OF DAVID D. GUSTAFSON, NOMINATED TO BE A

JUDGE OF THE U.S. TAX COURT, WASHINGTON, DC

Mr. GUSTAFSON. Thank you, Mr. Chairman. It is an honor to appear before this committee of the U.S. Senate, having been nominated by the President to be a judge on the U.S. Tax Court. I

thank this committee for its consideration of my nomination.

I am also grateful to the Tax Division of the Department of Justice for allowing me, over the last 24 years, to learn, practice, and

supervise tax litigation. In 1989, I became an Assistant Chief, and
13

in 2005 the Chief, of a litigating section in which I supervised a

staff of 20 tax litigators who handle a docket of some 500 cases,

representing about $3 billion in tax claims against the United

States.

Our cases run the gamut from the small and simple to the complex and enormous. My section defends small-dollar refund suits

brought by indigent taxpayers and multi-million-dollar claims by

Fortune 500 and multinational corporations. We answer tax

protestor arguments on the one hand, and on the other we address

sophisticated issues involving complicated provisions of the Internal Revenue Code, Treasury regulations, and tax treaties. The

broad range of our subject matter includes tax exemption, life insurance taxation, excise taxes, partnerships, interest computation,

and a myriad of other issues.

In addition, for 4 years I had the privilege of serving as the coordinator of tax shelter litigation for the entire Tax Division, and in

that post I had a wide exposure to some of the government’s most

important tax controversies. In that context, it was my great good

fortune to work with then-Assistant Attorney General Eileen

O’Connor, who, as Rich Morrison noted, is here today.

An attorney who has been especially encouraging and inspiring

to me, both professionally and personally, is Sharon Fast Gustafson, my wife of 27 years and the mother of my 9 children. I am

grateful that she could be here today with 8 of them.

In the United States, the tax law is the creature of Congress, a

fact of which I am keenly aware as I appear before this congressional committee that plays a key role in the legislative process.

The tax collector does not make the tax law, but administers it.

Judges in tax cases do not make the tax law, but apply it in deciding the cases before them. I am committed to that distinction, and

if I am confirmed as a judge I will do my best to faithfully and honestly interpret and apply the law.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Gustafson.

[The prepared statement of Mr. Gustafson appears in the appendix.]

The CHAIRMAN. Ms. Paris, you have a lot to live up to here.

[Laughter.]

STATEMENT OF ELIZABETH CREWSON PARIS, NOMINATED TO

BE A JUDGE OF THE U.S. TAX COURT, WASHINGTON, DC

Ms. PARIS. Thank you, Mr. Chairman.

The CHAIRMAN. I might add, I agree with everything that has

been said here. You have done a terrific job in helping the committee, and therefore the country. It just amazes.

Ms. PARIS. Thank you, Mr. Chairman. I truly appreciate it. It

has been a wonderful 8 years.

In addition, I want to say thanks to all the Senators of the Finance Committee, and also to all of their very hardworking tax

staff.

Even though I have had the opportunity to sit at this table many

times over the past 8 years, today is very different. Today I appear

before the Finance Committee for your consideration of my nomination to be a judge on the U.S. Tax Court. I am honored and hum-
14

bled that President Bush has given me the opportunity to continue

to serve this great country in this new capacity, but I truly believe

that this nomination is a continuation of my government service

and the privilege of serving this Senate committee as Tax Counsel

since the 106th Congress.

Previous to joining the Finance Committee staff in 2000, I enjoyed the experience of practicing, publishing, and teaching tax

law. I was active in my professional organizations through the

American Bar Association, and both the Colorado and Oklahoma

Bar Associations. In addition, I previously held leadership positions

in both the American and the Colorado Bar Associations.

Although all of these prior experiences have been valuable attributes, it is actually the experiences gained working for the Senate that best exemplify the qualifications I could offer if I am confirmed as a judge to the U.S. Tax Court.

During that time, I have served this committee as Tax Counsel

on important tax policy issues that I passionately care about, to include energy, agriculture, rural America issues, estate tax reform,

and highway trust fund issues. Those 12 original bills were initiated by this committee, then approved by Congress and signed into

law by the President.

With that knowledge, I realize that every word, comma, and

cross-reference in title 26 of the U.S. Code has a very specific and

defined purpose. The Internal Revenue Code has been structured

a bit like the Periodic Table of Elements. Much like the numbers

assigned to the elements, the very location of the code section reflects the defined purpose and meaning behind the concept. Each

provision in those 12 bills had very specific congressional intent,

and all of the professional and technical staff involved in a bipartisan and bicameral manner attempted to draft legislative language to accomplish that intent.

In doing so, congressional staff reviewed and coordinated thousands of pages of the Internal Revenue Code so that inconsistencies

were eliminated and definitions were clarified. So with that detailed background and education in the tax code, I believe the duty

of a Tax Court judge is to view the facts and the law of each case

and determine if the controversy is based on some confusing inconsistency that could be misinterpreted either by the government or

the taxpayer, or could it possibly be a situation where, in spite of

all congressional intent, there are those who specifically manipulated the complexity of the code to obtain results that are not appropriate.

In front of me are the Internal Revenue Codes from January of

2001 and January of 2008, and you can see there is a substantial

difference in size. As new provisions and policies have been added,

the code has grown in complexity. Every case that appears in front

of the U.S. Tax Court can be found intertwined somewhere within

these codes. Given the opportunity of confirmation as judge, it will

continue to be my responsibility to try to help make that determination of consistency and clarification.

In closing, I want to especially thank my mother and father, Joel

and Judy Crewson, and my sister Martha, who is here with me

today. So many times over the past few decades my family has graciously coordinated functions around tax deadlines or Senate sched-
15

ules. Ironically, a copy of the Internal Revenue Code has attended

many a family occasion just in case someone happened to call.

[Laughter.]

In addition, I also want to thank Senator Grassley and Senator

Baucus for allowing me to spend many hours as their Tax Counsel,

working on important tax policy issues that many members of this

committee passionately care about. It has been an honor to help accomplish the policy goals of the U.S. Senate Finance Committee.

Thank you again, and thank you for your time today.

The CHAIRMAN. Thank you, Ms. Paris. It is also very impressive

that both the 2001 and 2007, they are both dog-eared.

Ms. PARIS. Yes, they are. [Laughter.] With love.

The CHAIRMAN. With love. All right.

[The prepared statement of Ms. Paris appears in the appendix.]

The CHAIRMAN. Mr. Thorson?

STATEMENT OF HON. ERIC M. THORSON, NOMINATED TO BE

INSPECTOR GENERAL, U.S. DEPARTMENT OF THE TREASURY, WASHINGTON, DC

Mr. THORSON. Chairman Baucus, members of the committee,

thank you for the opportunity to appear before you as the nominee

to serve as the Inspector General of the Department of the Treasury.

As someone who believes strongly in oversight and accountability, it is especially gratifying to be given the chance to serve in

two different agencies as an Inspector General. I am at present the

IG of the Small Business Administration. That experience for nearly the last 2 years has prepared me well for the new challenges

that I can expect, if confirmed for the position at Treasury.

As a bit of background, I am a graduate of the U.S. Air Force

Academy and served as an Air Force pilot for approximately 7

years. I was fortunate to be offered the chance to return to the

military as a member of the Air Force Secretariat in 1985. After

4 years in the Pentagon, I began a number of years as a congressional investigator, culminating in serving as the Chief Investigator for both the Senate Permanent Subcommittee on Investigations and the Senate Finance Committee.

Both of those positions were under the chairmanship of a very

fine man, the late Senator William Roth. He set a very high standard for the integrity of the investigations that we conducted, and

that is a standard that I strive to maintain today.

In the spring of 2006, I was confirmed as the IG of the SBA. This

was during the aftermath of Hurricanes Katrina and Rita, with

substantial challenges to the Agency in its recovery assistance role.

Within 90 days of my appointment, we had established an IG Office in New Orleans with a staff of both auditors and investigators

that would serve as the headquarters for a region extending from

Florida to the Texas border. These are specialists who can assess

the disaster work of the Agency and provide assistance in getting

help to victims in a more efficient and timely way.

Our criminal investigators have been very highly effective in

bringing to justice those individuals who have attempted to illegally receive vital funds that were meant for victims. We are also
16

a very active member of the Katrina Fraud Task Force, led by the

Department of Justice

The role of Inspector General is challenging, if for no other reason than the dual reporting requirement to both the department

the IG oversees, and to the Congress. I believe that my time at

SBA has proven that one can fairly and respectfully interact with

the Agency leadership and yet still remain independent in its findings. In reporting to the Congress through the appropriate oversight committees, I believe that it is imperative to be absolutely

nonpartisan in responding to congressional requests and inquiries.

It has been a pleasure to work with the staffs of both sides of

the Senate and House Committees on Small Business, partly because I believe they recognized we made a true effort to be fair and

impartial in every interaction.

I made a promise to Senator Kerry in my last confirmation hearing, and I will make the same promise to this committee: there will

never be any politics to the work that we do.

Like my appointment to SBA after the hurricanes, this appointment comes at a critical time for the Department of the Treasury

and our economy. The very words spoken by the Secretary can affect financial markets worldwide, and ultimately affect each American’s financial well-being. I will make every effort, if confirmed, to

ensure that the Office of Inspector General is a positive aspect of

that work, seeking to improve the efficiency and operations of the

many various offices within the Department.

I do not expect the leadership to always like what we may write

in our reports, but it is my hope that they will recognize the fairness, impartiality, and positive motivation with which the Office of

Inspector General will do its work.

Thank you again for considering me for confirmation in this important position, and I will be happy to answer any questions you

might have.

The CHAIRMAN. Thank you, Mr. Thorson, very much.

[The prepared statement of Mr. Thorson appears in the appendix.]

The CHAIRMAN. Now, Mr. Eck?

STATEMENT OF EDWIN ECK, NOMINATED TO BE A MEMBER

OF THE INTERNAL REVENUE SERVICE OVERSIGHT BOARD,

U.S. DEPARTMENT OF THE TREASURY, WASHINGTON, DC

Mr. ECK. Mr. Chairman, members of the committee, thank you

for the opportunity to be with you today. I thank the President for

nominating me, and, Mr. Chairman, I thank you for recommending

me to him.

I have served as dean of the University School of Law for approximately 12 years. It is the only law school in our State. As

dean, I have had the responsibility for ensuring that the school provides the services that are reasonably expected by our students,

faculty, staff, and alumni.

Because we are the only law school in the State, we also have

responsibilities to the State judiciary and other State officers, the

State’s Attorneys, and most importantly, the public who are served

by our graduates. During my service as dean, we have developed

two strategic plans and we have had 13 annual budgets that have
17

been balanced. Our teaching, learning technology, and other informational and technological services have been greatly expanded.

Prior to my administrative work, I taught courses on trusts, estates, estate planning, and Federal estate and gift taxation. I also

practiced law, tax law, with an emphasis on Federal estate and gift

taxation. Most of my clients were small business people; some were

farmers, some were ranchers.

As you know, they all desire a system of taxation which is understandable, where all of our citizens pay what is owed under the

code. They want access to websites, pamphlets, and Internal Revenue Service employees who will help them report their taxes as

required by law. They look to me to help them plan some of their

business affairs, and, though I no longer practice law, I remain acquainted with many of these small business people and with the

tax professionals who serve them.

Serving others has given me my greatest satisfaction. In addition

to serving clients and the school’s many constituents, I have been

fortunate to co-chair a committee that gave rise to a new trust code

for our State. Also, as a Uniform Law Commissioner I have been

fortunate to advocate to our State legislature that it adopt many

uniform laws.

I desire to undertake public service at a national level, and I believe my experience will contribute to the work of the Oversight

Board and the Internal Revenue Service’s administration of our

country’s tax laws and regulations. If confirmed, I look forward to

working with the board members and with the members of this

committee on the challenges that face the administration of our tax

system, and I pledge to work on behalf of the American people to

fulfill my responsibilities on the Oversight Board, if I am confirmed.

Thank you, Mr. Chairman, members of the committee. I would

be pleased to respond to your questions.

The CHAIRMAN. Thank you, Mr. Eck, very much. We appreciate

your dedication, as well as everyone else here, to public service. I

think service is the most noble human endeavor. Each of us serves

in different capacities: friends, relatives, church, synagogue, public

service, whatnot, and just thank you very much for spending so

much of your time now in the service of other people. We are all

deeply appreciative.

[The prepared statement of Mr. Eck appears in the appendix.]

I have some basic questions I have to ask each of you before we

get to the substance of the matter. Before beginning, I will ask

each of you the question and I just need some kind of a response,

and hopefully affirmative.

I will begin with you, Ms. Okun. Is there anything that you are

aware of in your background that might present a conflict of interest with the duties of office to which you have been nominated?

Ms. OKUN. No.

The CHAIRMAN. Mr. Morrison?

Mr. MORRISON. No.

The CHAIRMAN. Mr. Gustafson?

Mr. GUSTAFSON. No.

The CHAIRMAN. Ms. Paris?

Ms. PARIS. No, Mr. Chairman.
18

Mr. THORSON. No, sir.

Mr. ECK. No.

The CHAIRMAN. Thank you.

Do you know of any reason, personal or otherwise, that would in

any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated?

Ms. OKUN. No, Mr. Chairman.

Mr. MORRISON. No, sir.

Mr. GUSTAFSON. No, sir.

Ms. PARIS. No, Mr. Chairman.

Mr. THORSON. No, sir.

Mr. ECK. No.

The CHAIRMAN. Thank you.

Do you agree, without reservation, to respond to any reasonable

summons to appear and testify before any duly constituted committee of Congress, if you are confirmed?

Ms. OKUN. Yes, sir.

Mr. MORRISON. Yes, sir.

Mr. GUSTAFSON. Yes, sir.

Ms. PARIS. Yes, Mr. Chairman.

Mr. THORSON. Yes, sir.

Mr. ECK. Yes, Mr. Chairman.

The CHAIRMAN. Thank you.

I would now like to turn to Senator Stabenow. I am going to have

to leave, and Senator Salazar will chair the rest of the hearing. We

are right in the middle of negotiations on a farm bill, and I have

to be there, partly because the Finance Committee and the House

Ways and Means Committee have to come up with about $10 billion in revenue to get a farm bill. So we are hopefully in the final

days and can get this wrapped up, but I have to attend to help

make that happen. Thank you very much.

Senator Stabenow, you are next.

Senator STABENOW. Thank you, Mr. Chairman. I will be following very quickly after to join you at that meeting.

The CHAIRMAN. And I am going to need your assistance, so I

hope you come quickly.

Senator STABENOW. Thank you. Thank you, Mr. Chairman.

Thank all of you for your willingness to serve. I particularly want

to thank Elizabeth Paris, and join in the chorus, for all of your help

and assistance and professionalism. I think this is a spot for you

where you will do an excellent job, so we just want to thank you

for working with myself and my staff on so many issues. We have

accomplished many things. So, thank you. Thank you to each of

you.

My questions specifically are for Ms. Okun because of the incredibly important role that you are being nominated for and the impact of that on the people I represent in Michigan, the impact on

businesses, on workers.

I find myself in a situation where we have been, unfortunately,

the epicenter of what happens in a global economy when our trade

laws are not enforced. Three-quarters of the staff focus of the efforts at the USTR are focused on negotiating agreements. Twentyfive percent, from what we can tell and what information has been

given to us, is put on enforcement, which frankly right now, given
19

the impact and the loss of jobs in this country, I think is probably

the opposite of what ought to be happening and is of deep, deep

concern to me.

So I have a couple of questions. By the way, I am remiss in not

starting out and saying that it is wonderful to see your family and

having had the chance to meet Rachel and Kelsi and your husband,

and I know you are very, very proud of them and their personal

efforts as well. So, it is wonderful that they are here.

Ms. OKUN. Thank you.

Senator STABENOW. But I find myself in a situation with very

deep concerns, both in terms of what I know you are being tasked

with if you are in that position, in terms of working out issues that

would allow trade agreements like South Korea to go forward when

the people I represent do not want that trade agreement to go forward.

In fact, I will be helping to lead the effort to stop that trade

agreement if the President sends it forward. People I represent are

not interested in having more work done at this point to resolve

outstanding issues because of the fact of the impact of that agreement on the people that I represent.

I will just give you an example. There are certainly many issues,

but we have three in Michigan. The ever-changing standards that

have shut out U.S. auto companies. While in the last year there

were 770,000 South Korean vehicles that were brought into this

country, allowed to come in, there were only 6,300 American-made

autos that were allowed to be sold in South Korea. They have the

most closed market of any developed country.

It is hard to believe the trade agreement will change that, considering the fact that we have had two Memorandums of Understanding that have failed to do so. Given the history, I find it

amazing that the USTR agreed to tariff cuts on auto imports into

the United States without first having South Korea prove that they

would abide by past agreements or the current agreement.

I also have very esteemed and distinguished and successful appliance makers in Michigan who are very frustrated because South

Korea refuses to publicize their standard test results. There is

nothing in there that guarantees, by the way, that that would

change.

This new agreement would also require U.S. growers of specialty

crops—of which I have been proud to be the leader in addressing

in the farm bill—the new agreement would require U.S. growers of

apples, pears, and other fruits to continue suffering under doubledigit tariffs for decades. Adding insult to injury, the phyto-sanitary

standards that South Korea uses to block imports of these fruits

are not going to change under the agreement.

So in short, unfortunately, contrary to other interests certainly

of distinguished members of the committee, my interest is not proceeding to work out other areas of an agreement that has damaged

the people of Michigan, the businesses of Michigan and America,

and that is of great concern to me.

So I am wondering if you might address, from your perspective,

on that particular issue, given the fact that you would, in fact, be

overseeing this agreement, Asian markets, and so on, how you

might respond to the concerns that we have.
20

Ms. OKUN. Thank you, Senator Stabenow, for allowing me the

opportunity to respond to that.

Let me start on the enforcement side, because I am not sure

about the statistics you cited of enforcement versus what else

USTR does. Let me assure you that in preparing for this hearing

I have met with the members of all the teams at USTR, I have met

with Ambassador Schwab, and if I heard anything from them it

was, here is the list of the issues we have out there where we need

enforcement, where we need compliance. That is going to be my

job, my job to drive that.

I had also, in addition to reading and reviewing the list of barriers in the countries around the world, the subsidy report on

China, WTO compliance—the ITC just finished a big study on Chinese practices and procedures. I look at all that and say, my priority has to be in looking at those things. I look forward to the opportunity of sitting down with you further to talk about what our

priority should be in enforcement in those areas, and there are

many. We have to decide, what is the best avenue? Do we have allies who have concerns? On China, certainly we do. That might

provide an opportunity for better enforcement.

So I also had an opportunity to review your legislation, the Trade

Enforcement Act. I read the provision in there, the section in there

about identifying priorities. I looked at that and thought, Senator,

that is what I am there to do. I want to sit down with you and

have you tell me what your priorities are. Let me, if I am confirmed, sit down with the team, find out where things are, and

move forward on those, travel to Michigan to see what their priority areas are. Obviously it is a big region. We have issues with

beef that needs to flow into Asia that was shut out. To me, that

is enforcement. They are not living up to OIE standards. I am

going to work on that.

So I see the ability, if I am confirmed, that I add to the enforcement. Not having a deputy there, I mean, some of these things do

not get done because you do not have the right person to travel to

Asia. Ambassador Schwab cannot be everywhere. Ambassador

Veroneau is now spread over the entire world as opposed to his

portfolio.

So I hope that I would, in fact, be another weapon in our arsenal,

another tool, whichever analogy works for you, to do more on enforcement, not less.

Senator STABENOW. I appreciate your saying that. The challenge

for me is that, having been involved prior to the U.S.-Korea agreement being completed, having traveled to Seoul, Korea, to have

been involved, literally in the hours before that agreement was

completed, to try to address the issues of millions of Americans

who work in manufacturing and the other areas that I mentioned—

these things were not addressed. They were not addressed in the

trade agreement in a way that was satisfactory. So it is difficult

for me then to assume there is a commitment from those whom you

will be working for to, in fact, proceed. That is just difficult for me.

That is not my experience. Certainly we want to continue to work

with you to do that.

Let me just add one other thing. I do apologize—we will have

other opportunities to speak, and in the interest of also going to the
21

conference committee on the farm bill—I do want to say, though,

despite what I am sure of in regard to your knowledge, competency,

and so on, my concern in terms of, again, sort of looking at the

record, not looking at what we hear from the administration but

looking at the record, in the end we are exporting jobs as well as

products, and way too many jobs.

Knowing that some middle-class Americans are losing their jobs

right now because we have put forward trade deals that have not

worked and are not enforced—they might have worked if they were

enforced, but they have not been enforced—for years, for me to go

forward without tougher trade enforcement laws, trade adjustment

assistance, dealing with what families and businesses in America

are dealing with, is just not something I can do.

But I also have to say that, when we look at the important role

of the International Trade Commission and the fact that companies

come to the Trade Commission, they put forward cases of injury,

and to see that, on final determinations—not the initial, because

your voting has been on a majority of cases to allow it to move forward; it is kind of like a motion to proceed in the Senate—but on

the final determinations, 78 percent of the time, between January

of 2005 and January of this year, on final injury determinations or

second remands, you have voted 78 percent of the time that there

was not injury to an American company. That is difficult for me.

In the cases when voting affirmatively, those were essentially

slam-dunk cases where it was unanimous, or 5 to 1. So I am, with

all due respect, at a point of watching what has happened in Michigan and in this country to the manufacturing base of our country

and the words that have not reflected the actions that need to be

taking place to fight for American interests, American businesses,

American workers. I am at a point now where just more reassurances, with all due respect, are not enough for me.

So, I certainly would welcome your comments in terms of your

reluctance to find injury when other fellow Commissioners have, on

cases—I do not have specific cases but I do have the record. It is

just, from my perspective on what is happening to this country and

the economy, we need to be standing up for American interests,

American businesses.

Ms. OKUN. Senator, I hope I have an opportunity to respond.

Senator STABENOW. Yes.

Senator SALAZAR. Why don’t you take about 2, 3 minutes to respond, because I have to wrap this up as well.

Ms. OKUN. Well, I am certainly very happy to share with the

committee all of my vote records, including my decisions, so that

you can read them.

Senator STABENOW. Yes.

Ms. OKUN. I am not sure the statistic you cite—I have looked

back. I had 215 final injury investigations that I voted on, finals.

I voted 133 times in the affirmative, again, finding relief for the domestic industry, and 92 times in the negative. It is a 59.1 percent

affirmance rate. The Commission as a whole, during that period,

was 63.1 percent.

Senator, I have never viewed my record at the ITC simply by the

percentages, and I hope that is not how I am judged. When I was

confirmed by this committee 8 years ago, it was to go to the Com-
22

mission to be fair and objective, to approach each case on the merits of that case. These investigations, as you know—you have appeared before the committee during the 201 cases that I voted in

favor of—are very fact-intensive.

At the end of the day, I hope what I have done is approached

each case, applied the statute to the facts, and issued the best decision that I can. I believe if you look at my record as a whole—and

I am happy to go through that in more detail with you in another

setting—I have been, I think, the mainstream of the Commission.

I believe the Commission overall—I am very proud of it.

As you know, there are three Democrats, three Republicans on

the ITC. One of the things that I think is the greatest about that

Commission, it is never a political vote. If you look at our votes,

you will see very few that have ever split 3:3, Republicans and

Democrats. If they do, it is an oddity and it has nothing to do with

politics. The Commissioners up there look at the cases. They are

tough. I mean, it is not easy. So I am very proud of my record. I

would like to go over that because I do not think that those are

accurate percentages of what I know. I can also show you the

China-specific voting. I think the Commission is now at about an

80 percent affirmance rate. So, I hope I have the opportunity to go

through that, and I appreciate your comments.

Senator STABENOW. I would appreciate having the opportunity to

receive more information.

Ms. OKUN. All right.

Senator STABENOW. And my concern is not that votes are political, it is the view of trade, the world view. There has been a view

that America should not stand up and fight for American businesses and American workers. That has gone on too long. We are

seeing an economy that is devastated in many parts of the country

and becoming worse in others because we have had a foolish view

that has not been shared by any other country in the world, that

we should not be having American business interests and worker

and family interests first. My saying that does not go just to you.

This is a broader question for me. This is a broader question of seeing us not act, or act in ways that are costing jobs and families and

the economy in this country. For me, I cannot do it anymore.

So I would welcome the opportunity to talk with you more about

your record. My comments are not about partisanship or politics,

it is about not understanding what is happening to Americans and

whose side we ought to be on when it comes to a world economy,

where every other country gets whose side they are on except us.

So, thank you, Mr. Chairman.

Senator SALAZAR. Thank you, Senator Stabenow. Ms. Okun and

others, there will be oral questions, and perhaps written questions

that will be submitted to each of you, and we would expect that

each of you respond to those written questions before the committee’s consideration on your nominations. I am certain Senator

Stabenow will have some additional questions to you, Ms. Okun.

I have one question on behalf of the Chairman for you, Ms.

Okun, and that has to do with involvement that you had from 1991

to 1993 with the government of Ontario. Under a provision of U.S.

law enacted in 1995, a person who has represented a foreign gov-
23

ernment in a trade dispute with the United States cannot be appointed as Deputy USTR.

I understand that from 1991 to 1993 you represented the government of Ontario in a softwood lumber dispute against the United

States, and I know it is something that members of this committee

are aware of. For our purposes in terms of how we move forward,

it would be important for us to know, number one, what was the

extent of your involvement in this dispute, and number two, will

your past representation of Ontario affect your ability to enforce

our softwood lumber agreement with Canada.

Ms. OKUN. Thank you, Senator Salazar. I appreciate the opportunity to provide further information for the committee. After leaving law school in May of 1990, I went to the DC law firm of Hogan

& Hartson. In reviewing the billing records in 1991, as a secondyear associate, I was assigned by various partners to work on matters for 31 clients of the firm, including, as you reference, a countervailing duty investigation involving lumber imports from Canada.

In this investigation, the billing partner was Mark McConnell,

who is still at Hogan & Hartson, and his client was the government of the Province of Ontario. As a very junior associate, all of

my duties and work product were subject to the supervision, direction, and control of Mark McConnell. I was assigned to research

and prepare legal memoranda. My name appears with the other

firm associates and partner as counsel for Ontario on pleadings

submitted in the course of these proceedings; however, I did not

present oral arguments on behalf of Ontario and I did not personally advise Ontario government officials regarding these proceedings.

My work in 1992 and 1993 also involved legal research and writing in connection with filings to Binational Panels reviewing the

decisions of the Department of Commerce and the International

Trade Commission in these investigations. As in the underlying

proceeding, my name appears on the brief but I did not present

oral arguments.

In May of 1993, and prior to the Binational Panel decisions being

issued, I left Hogan & Hartson to come work in the Senate as a

legislative aide for Senator Frank Murkowski, and that was the

last of my involvement.

Senator SALAZAR. Would you say then your involvement was a

minor involvement as a junior associate in the firm?

Ms. OKUN. In my view it was, Senator.

Senator SALAZAR. All right.

And on the second question in terms of it affecting your ability

to enforce the agreement with Canada?

Ms. OKUN. Yes. Thank you. I look at the work that I did at

Hogan & Hartson as a lawyer as informing me about trade laws

and how one argues them. However, I do not believe it influences

at all my ability to represent the U.S. Government in our interests,

and I believe I have demonstrated that in my service, both on the

International Trade Commission and serving as a Senate aide.

I would note that at the International Trade Commission, for 6

of the 8 years I have been there as a Commissioner, the Commission has been involved in the subsequent investigations of softwood
24

lumber. There is no conflict of interest. As a Commissioner, I voted

on those cases in favor of the domestic industry in 5 out of 6 times.

In one instance, the Commission was forced by the Binational

Panels to change our vote. So, no, Senator, I do not believe that it

would influence how I would approach—even though softwood lumber is not in my portfolio, it would not influence how I would approach any issue involving any foreign government, including the

government of Canada.

Senator SALAZAR. Thank you, Ms. Okun.

Let me, first of all, congratulate each and every one of you for

your nominations. I echo what Senator Baucus said to all of you,

and that is, it is a privilege to serve and to have an appointment

by the President and to now be before the Finance Committee and

the U.S. Senate under the advice-and-consent clause for these confirmation proceedings. They are major milestones, I am sure, in

your personal lives, but also they stand for the proposition that

great people are still ready to serve in our government at its highest levels, and for each of your positions they are very important

positions.

So, I congratulate you, and I congratulate all of your family who

have filled this room here to come and witness this historic confirmation hearing before the Finance Committee.

To you, Elizabeth Paris, I just want to say we are very, very

proud of you. You exemplify what I have come to know in my very

short time on this committee, which is now less than a year, the

very best that there is among our U.S. Senate staffers. If we could

only take what we do here in the Finance Committee and clone it

across the entire U.S. Senate and the U.S. House of Representatives, we might end up having a whole new spirit of results and

success here.

I just want to say, I have very much enjoyed our work together

on energy issues, on farm bill issues, and a whole host of other

issues, and look forward to very much supporting you in your confirmation.

With that, I believe we have done what we have to do in this

hearing, and I look forward to the further consideration.

The hearing is adjourned. Thank you.

[Whereupon, at 11:23 a.m., the hearing was concluded.]
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