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[Senate Hearing 107-1088]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 107-1088
 
  NOMINATIONS OF SAMUEL W. BODMAN TO BE DEPUTY SECRETARY OF COMMERCE 
                    (DOC); ELLEN G. ENGLEMAN TO BE 
                   ADMINISTRATOR OF THE RESEARCH AND 
  SPECIAL PROGRAMS ADMINISTRATION AT THE DEPARTMENT OF TRANSPORTATION 
  (DOT); JON ALLAN RUTTER TO BE ADMINISTRATOR OF THE FEDERAL RAILROAD 
   ADMINISTRATION (FRA); AND KIRK K. VAN TINE TO BE GENERAL COUNSEL, 
                   DEPARTMENT OF TRANSPORTATION (DOT)

=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 26, 2001

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

                 U.S. GOVERNMENT PRINTING OFFICE

87-007                WASHINGTON : 2004
_________________________________________________________________
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Washington, DC 20402-0001

           COMMITTEE ON COMMERCE, SCIENCE AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida

               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                  Mark Buse, Republican Staff Director
               Ann Choiniere, Republican General Counsel

                            C O N T E N T S

                              ----------                              

                                                                   Page
Hearing held on June 26, 2001....................................     1
Statement of Senator Hollings....................................     1
    Prepared statement...........................................     1
Prepared statement of Senator Rockefeller........................     3

                               Witnesses

Bodman, Samuel W., nominee to be Deputy Secretary of Commerce....     4
    Prepared statement...........................................     5
    Biographical information.....................................     6
Engleman, Ellen G., nominee to be Administrator of the Research 
  and Special Programs Administration............................    17
    Prepared statement...........................................    19
    Biographical information.....................................    21
Rutter, Jon Allan, nominee to be Administrator of the Federal 
  Railroad 
  Administration.................................................    36
    Prepared statement...........................................    37
    Biographical information.....................................    37
Van Tine, Kirk K., nominee to be General Counsel, Department of 
  Transportation.................................................    28
    Prepared statement...........................................    29
    Biographical information.....................................    30

                                Appendix

Article from the New York Times,  dated June 24, 2001, entitled 
  ``The World: Free Trade's Promise in Latin America; The Poor 
  Survive It All. Even Boom Times''..............................    75
Lugar, Hon. Richard G., U.S. Senator from Indiana, prepared 
  statement......................................................    47
McCain, Hon. John, U.S. Senator from Arizona, prepared statement.    77
Response to written questions submitted by Hon. Ernest F. 
  Hollings to:
    Samuel W. Bodman.............................................    47
    Ellen G. Engleman............................................    54
    Jon Allan Rutter.............................................    57
    Kirk K. Van Tine.............................................    64
Response to written questions submitted by Hon. John McCain to:
    Samuel W. Bodman.............................................    50
    Ellen G. Engleman............................................    55
    Jon Allan Rutter.............................................    60
    Kirk K. Van Tine.............................................    70

  NOMINATIONS OF SAMUEL W. BODMAN TO BE DEPUTY SECRETARY OF COMMERCE 
                    (DOC); ELLEN G. ENGLEMAN TO BE 
 ADMINISTRATOR OF THE RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION AT 
    THE DEPARTMENT OF TRANSPORTATION (DOT); JON ALLAN RUTTER TO BE 
                     ADMINISTRATOR OF THE FEDERAL 
   RAILROAD ADMINISTRATION (FRA); AND KIRK K. VAN TINE TO BE GENERAL 
                        COUNSEL, DEPARTMENT OF 
                          TRANSPORTATION (DOT)

                              ----------                              

                         TUESDAY, JUNE 26, 2001

                               U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:33 a.m. in room 
SR-253, Russell Senate Office Building, Hon. Ernest F. 
Hollings, Chairman of the Committee, presiding.

           OPENING STATEMENT OF ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    The Chairman. The Committee will please come to order. We 
are pleased this morning to have Mr. Sam Bodman to be the 
Deputy Secretary of Commerce. We have our distinguished 
Secretary here. Please come and have a seat with your Deputy. 
You are going to be working closely with him. We will not ask 
you any questions.
    [The prepared statement of Senator Hollings follows:]
            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina
Nomination of Samuel W. Bodman
    Mr. Samuel W. Bodman, III is the nominee for Deputy Secretary of 
Commerce. He is joined today by his wife, Dianne Bodman, and his 
stepson Terry Barbar. Mr. Bodman is a chemical engineer by training and 
has had a long, distinguished career in business, most recently as 
Chairman and Chief Executive Officer of the Cabot Corporation.
    I enjoyed meeting Mr. Bodman, and, like Secretary of Commerce Don 
Evans, I am expecting great things of this nominee. The Secretary has 
said more than once that he is anxious to have you at the Department. 
He is expecting you to play a major role in two agencies that are very 
important to me, the National Oceanic and Atmospheric Administration 
(NOAA) and the National Institute of Standards and Technology (NIST).
    With regard to NIST, as you know, Mr. Bodman, I am looking forward 
to working with you and the Secretary on making improvements to the 
Advanced Technology Program for fiscal year 2002 and beyond. But make 
no mistake, the ATP contracts with firms, on a cost-shared basis, for 
long-term research to develop new breakthrough technologies with broad 
economic promise--and it's working. No matter what changes are made for 
the future, I hope that, if confirmed, you can ensure that the 
foolishness stops and that the Department begins to issue the fiscal 
year 2001 awards in a timely manner.
    NOAA was just provided with its largest budget in history, so, as 
the person who is responsible for the day-to-day operations of the 
Department, you will have at your disposal the appropriate resources 
for improving the management capabilities of NOAA. This Committee will 
be closely following the new Administration on its plans for improving 
the management and integration of the various NOAA line offices, and 
strongly believes that NOAA urgently needs high level focus to improve 
upon its mission to conserve our Nation's coastal and marine resources. 
One of the critical needs is modernizing our management and stewardship 
of living marine resources and reducing the need for fisheries-related 
litigation, especially suits brought under the Endangered Species Act 
and the National Environmental Policy Act. It is my strong desire, that 
if nominated, you will provide the leadership and support necessary to 
improve the management of NOAA.
    Finally, I also wanted to mention the Department's role in 
enforcing our Nation's unfair trade laws. I am confident that you will 
apply these rules vigorously.
Nominations of Kirk Van Tine, Allan Rutter and Ellen Engleman
    The Department of Transportation performs many vital national 
functions in promoting safe and efficient travel. From the safety 
functions of providing oversight of our highways, airways, waterways, 
and railroad network, to promoting our transportation system so that 
all U.S. citizens can travel efficiently and economically, the 
Department of Transportation has many important responsibilities.
    The role of the General Counsel at DOT is one of stewardship, and 
provides the agency with legal representation and advice, as well as 
the important function of monitoring and approving regulations 
implementing the laws passed by Congress. Mr. Kirk Van Tine has been 
nominated for the position of General Counsel of the Department of 
Transportation. He is a graduate of the U.S. Naval Academy, and served 
as a submariner. In addition he graduated from the University of 
Virginia School of Law with distinction. Before hearing from the 
nominee I would like to comment on a couple of issues of particular 
concern to me, and would hope that you, Mr. Van Tine could help move 
these issues forward at the Department.
    In aviation, DOT is the protector of the public interest when it 
comes to aviation competition. You get to look at the broad picture and 
make decisions. DOT has an enormous amount of underutilized authority 
to look at competition issues. Section 155 of AIR 21 mandates that 
airports focus on how to increase competition. DOT's authority to 
review ``unfair methods of competition,'' a broader standard than the 
traditional antitrust laws, gives you the ability to issue predatory 
pricing guidelines and take enforcement action. DOT also has authority 
to review alliances ``or any other cooperative working arrangement'' 
involving two carriers that affects 15 percent of the industry. You 
have got to use this authority. You have got to focus on the lack of 
competition in the airline industry. We have a choice--either force 
more competition, as S. 415 would do, or somehow prevent monopoly 
pricing.
    I am also concerned about the state of security at our seaports. 
When we move passengers and freight through airports the FAA has 
implemented a system of security in order to protect the public, 
however, when cargo or freight moves through a seaport we have no 
Federal system in place to try to protect the population from threats 
of terrorism, drugs, or criminal acts. I know that the Coast Guard, 
which is already overextended, has been working to come up with 
policies to try to address these issues. I intend to introduce 
legislation to create a security program at our sea borders and, I 
would hope that, if confirmed, you could help us address these issues.
    Today we will also hear about the nomination of Allan Rutter, of 
Texas, to be Administrator of the Federal Railroad Administration (FRA) 
within the Department of Transportation. This position is an important 
one, and I am pleased to have before us a nominee of evident 
professional qualifications and experience with rail transportation 
policy issues.
    If confirmed as FRA Administrator, Mr. Rutter will be responsible 
for administering and enforcing the railroad safety laws of the United 
States. The FRA plays a critical role in implementing Federal policies 
intended to ensure the vitality and economic health of the Nation's 
railroads, rail labor, and the railroad supply industry. In addition, 
if confirmed, Mr. Rutter will be confronted with decisions regarding 
many important rail issues, including the appropriate role and mission 
of the National Railroad Passenger Corporation (Amtrak), as well as 
proposals for an increased Federal role in promoting the development of 
new high-speed ground transportation systems in this country. These 
challenges will require significant effort and commitment on the part 
of the FRA Administrator. Mr. Rutter brings strong experience in rail 
transportation and working with different groups at the State level to 
the tasks which lie ahead at the FRA.
    The Committee will also be hearing from Ellen Engleman of Indiana, 
to be Administrator of the Research and Special Programs Administration 
(RSPA) within the Department of Transportation. RSPA is one of the 
Department's most important components and one of the youngest. It was 
established in 1977 and is responsible for hazardous materials 
transportation and pipeline safety, transportation emergency 
preparedness, safety training, multi-modal transportation research and 
development activities, and collection and dissemination of air carrier 
economic data. Two of the more important offices within RSPA are the 
Office of Hazardous Materials Safety and the Office of Pipeline Safety, 
which establishes and provides for compliance with standards that 
assure public safety and environmental protection in the transportation 
ofgas and hazardous liquids by pipeline.
    In the too recent past there have been several pipeline accidents 
across the Nation which have resulted in loss of life and serious 
property damage. In fact, the Office of Pipeline Safety recently 
proposed the largest ever fine against a natural gas pipeline carrier 
last week. These accidents call for a vigorous response on the part of 
RSPA, and a focus on improving safety. The nominee for the position of 
RSPA Administrator is Ellen Engleman, and she is coming to us with good 
amount of experience in the business arena. I am pleased to welcome Ms. 
Engleman, and all of the DOT nominees to this Committee, and look 
forward to hearing from them.

    [The prepared statement of Senator Rockefeller follows:]
          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia
Nominations of Bodman, Rutter, Van Tine, and Engleman.
    Thank you Mr. Chairman. I appreciate the opportunity to make a 
brief statement on the nominations of these four highly qualified 
individuals.
                      deputy secretary of commerce
    As he assumes the role of Deputy Secretary of Commerce, I expect to 
have a close working relationship with Mr. Bodman on a variety of 
science and technology programs. I was impressed by his strong 
technology and R&D background, and I believe that his nomination bodes 
well for many programs, such as EPSCoT and the research ``doubling'' 
bill, that are Commerce Department priorities for me and the nation.
    As you know, I have more than a passing interest in the state of 
the U.S. steel industry. I look forward to working with Mr. Bodman on 
steel issues, particularly in dealing with the root causes of the 
current steel crisis, namely foreign over-capacity and market-
distorting foreign subsidies.
          administrator of the federal railroad administration
    I hope that Mr. Rutter will take the time early in his tenure as 
Administrator to examine the roles and responsibilities of the Surface 
Transportation Board and the FRA, to see where they overlap, and to see 
where he can be active in helping to create a more competitive freight 
rail market. As part of this analysis, I expect Mr. Rutter to carefully 
consider the current division of labor between the STB and the FRA, and 
to recommend to Congress changes that should be made to help the FRA to 
better perform its functions.
    I don't know how closely Mr. Rutter monitored the work of the FRA 
under the Clinton Administration, but candidly, I believe it stayed too 
much on the sideline. I think the current State of the freight rail 
industry may be partly blamed on their unwillingness to engage on many 
of the issues in the industry.
    In general, I look forward to working with Mr. Rutter on the full 
range of responsibilities as Administrator of the FRA.
          general counsel of the department of transportation
    I will look to the General Counsel at the Department of 
Transportation for assistance with my two major transportation 
priorities--aviation, especially small community service, and 
competition in the freight rail industry.
    The General Counsel plays a crucial role in aviation policy 
matters. He will be involved in overseeing the FAA's safety authority 
and also directly involved in domestic and international aviation 
economic issues. For instance, I would expect Mr. Van Tine to clearly 
indicate that neither the Port Authority of New York and New Jersey, 
nor other airports have the authority to impose congestion pricing 
schemes.
    I hope that Mr. Van Tine will work with Congress to improve air 
service to small communities. In the role of General Counsel, you will 
hear a lot of complaints about air service, prices and competition, and 
no comments will mean more to me than those about small and rural 
community service. There are two programs--the essential air service 
program and the small community pilot program--that can be a lifeline 
to small towns in need of air service.
    Finally, DOT plays a crucial role in international aviation issues. 
I expect a litigator of Mr. Van Tine's talents to help the Secretary 
and the Administration make persuasive arguments about some recent 
unfortunate aviation decisions by the European Union on behalf of 
American industry and consumers.
    In the area of railroads, as I have said, I will look to the 
Department of Transportation to take an active and supportive role in 
the efforts of this Congress to achieve true competition for both the 
shipper community and the railroads themselves.
    administrator, research and special programs administration, dot
    Finally, I look forward to working with Ms. Engelman in her role as 
Administrator of RSPA. I trust that she will take her responsibility 
for ensuring the public safety very seriously. As the person in charge 
of a regulatory agency charged with securing the transportation of 
hazardous materials, she is no doubt aware that few people, perhaps no 
one, in government has a more pervasive day-to-day oversight of 
potential human health and environmental risks.
    I hope that in this role she will always look to the public welfare 
first and foremost. I expect her to have constructive suggestions about 
how this Congress can improve the safety of the highways and pipelines 
that carry our most potentially dangerous chemicals.

    Secretary Evans. He does not need any help, believe me. He 
is fine.
    The Chairman. Very good.
    Mr. Bodman, would you like to present your wife, whom I 
believe is present, and any other members of your family?

 STATEMENT OF SAMUEL W. BODMAN, NOMINEE TO BE DEPUTY SECRETARY 
                          OF COMMERCE

    Mr. Bodman. Thank you, Mr. Chairman. My wife Diane is here 
and my stepson Perry Barber is here as well.
    The Chairman. We welcome them to the Committee. We are glad 
to have them with you. We would be delighted to hear from you, 
sir.
    Mr. Bodman. Mr. Chairman, I have prepared a formal 
statement which I think has been distributed to the Committee.
    The Chairman. It will be included in its entirety, and you 
may summarize it.
    Mr. Bodman. Thank you. I will not burden you with going 
through it. I would first want to tell you and the Committee 
Members how pleased I am to be here. I am particularly 
appreciative of the Committee holding this hearing so promptly 
following my nomination. I think my colleague Mr. Evans, 
prospective colleague Mr. Evans, is anxious to put me in 
harness, so I know he is very pleased and thankful that you 
have attended to this as promptly as you have, and I wanted to 
express my gratitude for that.
    The overview that I would give you is quite brief. I am a 
chemical engineer. I went to Boston to be a student 40 years 
ago and I never left. I held four jobs while I was there. I was 
a teacher of engineering for 8 years and during that time I 
consulted what we believe to be the premium venture capital 
company of its type, so I spent many years engaged in that 
activity.
    I left both jobs and went to what was then a small company 
called Fidelity. There were 50 people there at the time and we 
built it up to a company of some substance that is now, I 
believe, an important global investment manager. Then last, I 
spent the last 14 years as the manager of a globally deployed 
specialty chemical company where we worked hard on such issues 
as new product innovation and the sorts of things that I think 
will be on our agenda in the Commerce Department.
    Secretary Evans asked me to consider this assignment and I 
have been very pleased to do so. I have been studying some of 
the records of the things that he agreed to undertake and I 
read his transcript of his testimony here and I just thought I 
would comment that the major thrust, as I read his comments to 
you were thrusts and major objectives of the Commerce 
Department that I certainly subscribe to.
    First, we would view ourselves as a partner with the U.S. 
Trade Representative in expanding our trade agreements and 
making sure that we enforce all of our trade agreements that 
are in place.
    Second, we are committed to managing all aspects of NOAA's 
portfolio of responsibilities. It is quite broad, as I know you 
are aware, and we will have particular focus on preserving our 
environment and of managing the regulatory environment of the 
various aspects of NOAA's portfolio of duties.
    We intend to enhance America's technology leadership by 
fostering invention and creativity through a variety of the 
agencies that the Department is responsible for.
    Last, we are committed to improving the performance and the 
operation of the Patent and Trademark Office, because without a 
well-managed intellectual property protection we really cannot 
have the kind of creativity and invention that we need.
    So those are the four focuses that we expect to pursue, and 
I am very supportive of all of those. I would conclude by 
reiterating how pleased and proud I am to be here. I am very 
grateful to my family and my friends for their support in my 
undertaking this responsibility, and I am grateful again that 
the Committee has been as prompt as it has in undertaking this 
hearing.
    With that, I thank you, sir.
    [The prepared statement and biographical information of Mr. 
Bodman follow:]

Prepared Statement of Samuel W. Bodman, Nominee to be Deputy Secretary 
                              of Commerce
    Mr. Chairman, Senator McCain and Members of the Committee, I am 
very proud to have this opportunity to come before you today. I wish to 
thank the President for nominating me to this position. I also 
appreciate the courtesies shown to me during my visits with the 
Committee members last month. I want to summarize briefly my own 
professional background and how those experiences will affect my 
approach to the responsibilities of the Deputy Secretary of Commerce.
    Having been born and raised in a small Illinois community, my 
education was entirely in the field of chemical engineering, and my 
final degree was the ScD completed at MIT in 1965. I taught chemical 
engineering for 8 years at MIT while also consulting with Boston's 
leading firm in the emerging field of venture capital. I left both jobs 
to join a then-fledgling investment firm called Fidelity. I spent 17 
years there, served the last 10 years as president of Fidelity, and 
helped orchestrate the transformation of that tiny company into a 
powerful financial service enterprise.
    Finally, for the past 14 years, I have served as Chief Executive 
Officer of Cabot Corporation, one of Boston's oldest industrial 
companies. Cabot is a specialty chemical manufacturer with forty 
manufacturing plants in twenty-five countries. During my tenure we 
transformed Cabot from a mundane old-line company into a technology 
driven business, and we achieved outstanding results for our 
shareowners, employees, and customers.
    Through all these experiences I have come to revere the genius of 
the American free enterprise system. Our country's ability to create 
and commercialize new products is unmatched, and that ability has led 
to unsurpassed economic growth. On the other hand, our approach is far 
from perfect. We have environmental problems; we have not always 
implemented reciprocal free trade arrangements with our trading 
partners; and the fruits of America's economic system have not always 
been distributed among all members of our society in an effective 
manner. Confronting these problem while retaining our greatness and 
growing our economy will require that, in the words of Don Evans, ``we 
create an environment in which the (entrepreneurial) spirit flourishes, 
an environment that promotes innovation, risk-taking, and equal 
opportunity.'' Secretary Evans has already described to you his 
priorities in managing the Department, and I subscribe to them:

        1. First we expect to play an important role as a partner of 
        the U.S. Trade Representative in expanding our trade agreements 
        and enforcing all agreements that are in place;

        2. We expect to manage effectively all aspects of NOAA's 
        portfolio of responsibilities. Our environment must be 
        preserved, and regulations must be based on sound science. I am 
        well aware of President Bush's recent directive to the Commerce 
        Department related to the U.S. Climate Charge Research 
        Initiative, and I am prepared to assist Secretary Evans in 
        creating and carrying out that program;

        3. We intend to enhance American technology leadership by 
        fostering invention and creativity both in the government and 
        the private sector. That leadership will be augmented by 
        establishing appropriate industrial standards, by funding 
        directly new research initiatives, and by the pragmatic 
        administration of export controls over strategic technology; 
        and

        4. We will proactively seek continued improvement in the 
        operations the Patent and Trademark Office. Creativity and 
        invention cannot be institutionalized without adequate 
        intellectual property protection.

    I have been pleased and privileged to receive a wide range of 
comment and input during my personal visits with the Committee members. 
Those remarks have been highly educational and helpful--particularly 
for a person whose entire career has been in the private sector--and I 
am grateful for this. As we go forward, if I am fortunate enough to be 
confirmed by this Committee and the Senate, I pledge to make myself 
available to the Committee to personally deal with any and all 
challenges that confront us jointly in the future.
    In closing, I would like to thank my family and friends, and most 
particularly my wife Diane, for their support of my decision to take on 
this assignment in public service. I am proud to be here. I am proud to 
serve this President, this Secretary of Commerce, and this Committee. 
Mostly, I am proud to be an American and to play a small role in 
serving our great country.
                                 ______
                                 
                      A. Biographical Information
    1. Name: Samuel W. Bodman.
    2. Position to which nominated: Deputy Secretary of Commerce.
    3. Date of nomination: March 16, 2001
    4. Address: Not released to the public.
    5. Date and place of birth: November 26, 1938, Chicago, Illinois.
    6. Marital status: Married to Mary Diane Petrella Bodman.
    7. Names and ages of children: Children: Elizabeth Bodman Mott, 38; 
Andrew Morgan Bodman, 36; Sarah Bodman Greenhill, 33; Stepchildren: 
Perry Oscar Barber III, 24; Caroline Killough Barber, 21.
    8. Education: Secondary: Glenbard Township High School, Glen Ellyn, 
Illinois, 1952-1956; High School Diploma, June, 1956. College: Cornell 
University, Ithaca, New York, 1956-1961, B. Ch. E., June, 1961. 
Graduate School: Massachusetts Institute of Techonolgy, Cambridge, 
Massachusetts, 1961-1965, Sc.D., June 1965.
    9. Employment record: (a) Massachusetts Institute of Technology, 
Cambridge, MA, Professor of Chemical Engineering, 1964-1970. (b) 
American Research and Development Corporation; Boston, MA, Venture 
capital investing, Technical Director, 1964-1970. (c) Fidelity 
Investments, Boston, MA, Investment management, President and Chief 
Operating Officer, 1970-1986. (d) Cabot Corporation, Boston, MA, 
Diversified, global chemical manufacturer, Chairman and Chief Executive 
Officer, 1987-2001.
    10. Government experience: In 1993 I served on an advisory 
committee to Governor William Weld on developing strategies for new 
business development in Massachusetts.
    11. Business relationships: Directorships: Cabot Corporation; John 
Hancock Financial Services; Thermo Electron Corporation; Cabot 
Microelectronics Corporation; Cabot Oil and Gas Corporation; Security 
Capital Group, Inc.; Westvaco, Inc.; Apco Oil and Gas Company; Steam 
Engine Systems Corporation; Marathon Manufacturing Company; Haemonetics 
Corporation; Rixson-Firemark Corporation; Environmental Research & 
Technology Corporation; Mardrill, Inc.; Guardian Oil Company; 
Respiratory Care, Inc.; Continental Cablevision, Inc.; Skok Systems, 
Inc.; Well Tech, Inc.; Fidelity Group of Mutual Funds; FMR Corporation; 
Industrial Research, Inc.; Aspen Technology, Inc.; MCI New England, 
Inc.; France Drilling Company; Amata Gas, Inc.; Index Technology, Inc.
    Trusteeships of Non-Profit Organizations: Massachusetts Institute 
of Technology; Isabella Stewart Gardner Museum; New England Aquarium; 
French Library and Cultural Center; MITRE Corporation; Babson College; 
Northeastern University; Massachusetts General Hospital Physicians 
Organization.
    Employment: Massachusetts Institute of Technology, Professor of 
Chemical Engineering, 1964-1970; American Research and Development 
Corporation, Technical Director, 1964-1970; Fidelity Investments, 
President and Chief Operating Officer, 1970-1986; Cabot Corporation, 
Chairman and Chief Executive Officer, 1987-2001.
    12. Memberships: Scholarly Memberships: American Academy of Arts 
and Sciences.
    Social Memberships: The Country Club, Brookline, Massachusetts; 
Somerset Club, Boston, Massachusetts; West Chop Club, Martha's 
Vineyard, Massachusetts; Houston Country Club, Houston, Texas; Lost 
Tree Club, North Palm Beach, Florida; Coronado Club, Houston, Texas.
    13. Political affiliations and activities: (a) List all offices 
with a political party which you have held or any public office for 
which you have been a candidate. None.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. None.
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years. The Committee for Tim 
Wirth, 10/16/91, $500; The Weld Committee, 09/16/93, $1,000; The Menino 
Committee, 10/12/93, $500; The Harshbarger Committee, 05/18/94, $500; 
George W. Bush for Governor, 06/07/94, $500; The Senator Chafee 
Committee, 10/04/94, $500; No On 6&7 Committee, 10/14/94, $2,500; Scott 
Harshbarger Committee, 03/25/96, $500; Weld for Senate, 09/09/96, 
$1,000; Harshbarger Committee, 01/20/98, $500; RNC Presidential Trust, 
06/15/00, $20,000; Bush-Cheney Fund, 11/14/00, $5,000.
    14. Honors and awards: McMullen Scholar--Cornell University; Alfred 
P. Sloan Scholar--Cornell University; National Science Foundation 
Fellowship--Massachusetts Institute of Technology; Eastman Kodak 
Award--Massachusetts Institute of Technology; Tau Beta Pi--Cornell 
University.
    15. Published writings: The Industrial Practice of Chemical Process 
Design, textbook published by MIT Press, 1968.
    16. Speeches: None.
    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President? I was, recommended to the President by 
Secretary Donald Evans.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment?
    I believe my experience as a Professor of Chemical Engineering at 
MIT will provide an excellent background in dealing with the issues 
confronting NOAA, the Technology Administration, and the National 
Telecommunications and Information Administration. I believe my 
experience as a creator of new business opportunities at American 
Research and Development Corporation, Fidelity Investments, and Cabot 
Corporation, will produce valuable insights in managing the Patent and 
Trademark Office. I believe my experiences in managing Fidelity's 
worldwide investment activities will allow me to contribute to the 
Department's understanding of global economics and international trade 
issues. These issues are central to the management of the Bureau of 
Export Administration, Economics and Statistics Administration, and the 
International Trade Administration. Finally, my recent experiences in 
managing Cabot Corporation's worldwide manufacturing enterprise--40 
plants in 25 countries--will provide valuable perspective on the 
challenges and opportunities confronting American business leaders as 
they seek to participate in and benefit from global opportunities.
                  B. Future Employmnent Relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate?
    Yes, although certain employee benefit arrangements, including 
stock option grants established prior to my consideration for 
government service will continue pursuant to their terms as described 
in my Form SF278.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain.
    I have no plans, commitments or agreements to pursue outside 
employment during my government service.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization?
    I have no plans, commitments or agreements to resume any employment 
or affiliation with any corporation or organization.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service?
    No one has committed to employ me after my government service.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable?
    If confirmed, I expect to serve a full term in this office--
presumably until the next Presidential election.
                   C. Potential Conflicts of Interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers.
    See Exhibits A and B attached, which are portions of exhibits to my 
Form SF278.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    None, because my ethics agreement addresses all potential conflicts 
and creates a mechanism with which to deal with them.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    I don't believe that I have had any business relationship or 
transaction during the past 10 years that in any way could cause a 
conflict of interest with respect to my responsibilities in the 
Department of Commerce.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy.
    I have never engaged in any effort to influence any legislation or 
affect any public policy.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    I will consult with ethics officials in the Office of the General 
Counsel for the Department of Commerce to resolve any potential 
conflict of interest.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position?
    Yes, I do.
                            D. Legal Matters
    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a complaint to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details.
    No.
    2. Have you ever been investigated, arrested, charged or held by 
any Federal, State or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details.
    No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details.
    I, personally, have not been the subject of any administrative 
agency proceeding or civil litigation at either Fidelity Investments or 
Cabot Corporation, my two principal employers for the past 30 years. 
However, both companies have, of course, been involved with a wide 
variety of litigation. I have asked the General Counsels of each 
company to summarize the most significant litigation issues confronting 
them at this time. Their responses are appended to this report (see 
Appendices A and B).
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense?
    No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.
    I know of no relevant additional information.
                     E. Relationship With Committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information?
    I will ensure, to the best of my ability, that the Commerce 
Department complies with deadlines set by congressional committees.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosure?
    I will ensure, to the best of my ability, that the Commerce 
Department will protect congressional witnesses and whistle blowers 
from reprisal.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee?
    I will cooperate, to the best of my ability, in providing 
congressional committees with requested witnesses which will include 
technical experts and career employees.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress.
    The Department of Commerce, as the voice of business within the 
Administration, has long been a leader in advocating and using market-
oriented regulatory approaches in lieu of traditional command-and-
control regulations when such approaches offer a better alternative. 
While not principally a regulatory agency, all regulations of the 
Department are designed and implemented to maximize societal benefits 
while placing the smallest possible burden on those being regulated.
    The Deputy Secretary does not issue regulations and is not 
typically involved in the review of individual regulations issued by 
agencies of the Department. However, I intend to work closely with the 
General Counsel, who serves as the Regulatory Policy Officer for the 
Commerce Department and whose office does review each regulatory action 
to be issued by the Department, to ensure that I am briefed on and 
participate in the review of any controversial and/or important 
regulation. In this manner, I will ensure that regulations issued by 
the Department comply not only with the letter, but also with the 
spirit of the laws passed by Congress.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives.
    As the strategic plan of the Department sets out, the current 
mission of the Department of Commerce calls for the promotion of job 
creation and the improvement of living standards for all Americans by 
growing the economy and contributing to technological advancement.
    The Department's first strategic goal is to provide the information 
and framework to enhance economic performance. Programs supporting this 
goal are those to broaden the participation in economic growth, to 
promote growth and trade while protecting our security, and to support 
decisionmaking in our society.
    The second strategic goal is to enhance innovation in our society. 
Programs supporting this goal are those to create technical knowledge 
and capability to protect intellectual property, and to provide 
infrastructure as America transitions to a digital economy.
    Third, the Department seeks to learn more about our environment so 
as to permit sustainable economic growth. Related programs and 
objectives include the promotion of conservation of our natural 
resources and the understanding and prediction of natural phenomenon.
    6. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so?
    I am willing to appear and testify before congressional committees 
as requested by those committees.
                  F. General Qualifications and Views
    1. How have your previous professional experience and education 
qualify you for the position for which you have been nominated?
    As mentioned in my answer to Question A. 17(b), I believe that my 
previous professional experience qualifies me to be Deputy Secretary of 
Commerce. I have taught engineering at MIT. I have invested venture 
capital in new companies for American Research and Fidelity. I have 
managed a global investment operation for Fidelity Investments which is 
responsible for organizing and deploying the assets of millions of 
American citizens. Last, for the past 14 years, I have reorganized and 
rebuilt the operating assets of Cabot Corporation. Cabot manages 40 
manufacturing facilities in 25 countries. We have been a leader in 
managing our safety and environmental responsibilities, have developed 
a competent diverse organization with high morale and enthusiasm, and 
also have produced superior financial returns.
    I believe that all of these experiences qualify me for a leadership 
position in the Commerce Department. My technical background should 
qualify me to deal with the environmental issues, the atmospheric and 
oceanic research, and the advanced technology that form a large part of 
the Department's portfolio. Having dealt with intellectual property 
issues as an academician, venture capitalist, and industrialist gives 
me unique perspective on the nation's copyright and patent functions. 
My work as an investment manager and industrialist helps me understand 
the global economy and deal with complex global trade issues.
    All in all, I believe that these experiences provide me with a very 
broad background with which to confront the complex portfolio of 
activities in the Commerce Department.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    I wish to serve in order to give something back to the United 
States of America. My family and I have benefited greatly by our 
participation in the American economy. If confirmed, I would view it a 
privilege to give something back to the U.S. commercial enterprise.
    3. What goals have you established for your first 2 years in this 
position, if confirmed?
    If confirmed, my first goal will be to develop an in-depth 
understanding of the people, the organizations, and the programs that 
constitute the Department of Commerce. Following that, I expect to 
devote most of my time in the first 2 years to working with those 
programs which are most directly related to the highest priorities of 
the Administration, of Congress, and of American business. For example, 
the Department should be a leading resource in studying and forecasting 
changes in our natural environment on earth--both oceanic and 
atmospheric. I expect to be active in encouraging these efforts and 
integrating them with work in other Departments and agencies. Many fast 
growing business segments depend on an effective patent system for 
their economic health. Understanding these needs and the Department's 
response to them will be a major objective. The management of our 
fisheries is a controversial subject and one for which scientific 
understanding is difficult to come by. A third objective will be to 
improve my understanding of this issue and the various approaches that 
are being used in managing our fisheries. Last, I have had considerable 
experience in international trade. I hope I can help expand the markets 
for American exports and investment.
    4. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills?
    The only lacked skills of which I am aware are those that derive 
explicitly from serving in the Federal Government--those related to 
``knowing how the system works.'' I believe that I will learn those 
skills as I pass through the confirmation process and in the first few 
months of my formal service.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sctor, when should society's 
problems be left to the private sector, and what standards should be 
used to determine when a government program is no longer necessary.
    I believe that the United States Government is charged with the 
responsibilities enumerated in the Constitution. These include 
providing for national defense and the safety of our citizens, carrying 
out foreign policy and maintaining an economic system conducive to the 
growth of our economy. Government is also responsible for encouraging 
American business in the global marketplace, supporting fundamental 
research to preserve the health and technical advancement of our 
society, managing our natural resources, and protecting our 
environment.
    Specifically, with respect to activities in the Commerce 
Department, government should play the role of encouraging the great 
American economic system to operate at full efficiency to the benefit 
of all citizens. Government regulation should provide appropriate 
limits on private sector activity, but should be utilized sparingly. 
Environmental standards, workplace safety, anti-competitive behavior, 
proper financial reporting, and the like should be governed bo 
appropriate regulatory standards. Such regulation should ensure the 
safety, fair treatment, and sense of well-being for all our citizens. I 
believe it also important that all our regulations be constructed and 
updated so as to recognize the tremendous changes that have occurred 
and are likely to occur in society at large. For example, many of our 
regulations and laws were developed at a time when American commerce 
dominated the world. With rare exception, such dominance no longer 
exists. Global competition dominates the world landscape, and U.S. 
regulations and law should recognize that. Similarly, the rapid speed 
of technological change is breathtaking in speed and grandeur. 
Legislation and regulation will be hard-pressed to keep pace, but every 
effort must be made to do so.
    To the extent possible, regulation and law should remain removed 
from the creative process of inventing new technology and developing 
new products. The American genius for innovation and creativity is 
unsurpassed globally; regulation and legislation can only serve to 
stifle that process, and should be administered sparingly.
    Lastly it must be noted that some of our citizens have not fully 
participated in America's tremendous economic progress of the last 
decades. Government can and should play an active role in supporting, 
encouraging, educating, and liberating less fortunate members of our 
society. To the extent humanly possible, no one should be left behind. 
In this instance education is the key, and government should take the 
lead and provide the resources.
    6. In your own words, please describe the agency's current 
missions, major programs, and major operational objectives.
    The Commerce Department, as I see it, has the most diverse set of 
missions of any department or agency in the Federal Government. In 
thinking about this question, I would bifurcate the missions of the 
various parts of the Department. First are those Administrations whose 
primary responsibility is professional and their tasks require the 
delivery of the highest quality of service to the American public. 
Second are those Administrations that are primarily advocates for the 
development, expansion, and success of American business both at home 
and abroad. The following paragraphs deal with each of these mission 
categories.
    Most of the employees and the majority of the Department's budget 
are devoted to Administrations which are charged with the 
responsibility of delivery of professional services. In my mind, these 
include NOAA, Patent and Trademark Office, Technology Administration, 
and the Economics and Statistics Administration. All of these 
organizations are charged with the responsibility of collecting data, 
distilling and sifting those data in order to create information, and 
correlating and analyzing that information in order to produce various 
forms of knowledge. That knowledge--be it a fisheries population model, 
a specific patent issuance, or an informed census report--needs to be 
effectively communicated to the American people and their governmental 
representatives. In most instances the quality and value of such 
knowledge can only be judged by a professional peer review. The 
practical implications of such knowledge are often expressed in the 
form of regulation or legislation.
    The second group of Administrations, in my judgment, have a more 
easily defined and easily measured set of missions. In sum, these 
missions involve the continuous improvement and global expansion of 
American business. The Bureau of Export Administration, Economic 
Development Administration, and International Trade Administration all 
are charged with the expansion of the American free enterprise system 
domestically and especially abroad. Freeing up markets so that U.S. 
business can effectively export has to be a lead objective of the 
entire Department. The American enterprise system is the greatest 
economic development in history. Making that system operate throughout 
the world will not only improve opportunities in America, but can 
literally change the state of world prosperity.
    7. In reference to question No. 6, what forces are likely to result 
in changes to the mission of this agency over the coming 5 years?
    I see no forces that are likely to produce wholesale changes in the 
missions of the various Administrations of the Department. However, 
there are two types of forces that will change the priority or 
importance of these missions. The first of these are economic forces 
can and will affect the trade and export functions of the Department. 
More difficult economic conditions are likely to produce greater focus 
on trade issues. The rapid development of one part of the economy--for 
example biotechnology or venture capital--may necessitate a shift in 
emphasis and priority from those responsible for managing the 
Department of Commerce. The second set of forces are those of a 
physical or chemical nature--natural forces you might call them. 
Everything from changes of weather patterns to technical developments 
in understanding global warming can and should change priorities and 
allocation of appropriate resources.
    8. In further reference to question No. 6, what are the likely 
outside forces which may prevent the agency from accomplishing its 
mission? What do you believe to be the top three challenges facing the 
department/agency and why?
    As I described in the answer to Question F.7, outside economic 
forces and external physical or natural phenomenon affect the 
Department's ability to achieve its various missions.
    The three top challenges to the Department's success are enumerated 
below:
    (i) First is the economy. A neutral or recessionary economic 
environment could require budgetary reductions and consequent 
impairment of the Department's ability to function.
    (ii) Second is the pace and nature of technological change. So much 
of the Department's mission is scientifically based that an unexpected 
scientific finding could call into question and call for a redirection 
of programs and mission definitions. Specific examples of this 
phenomenon could develop from research efforts in biotechnology, 
internet-based systems, or oceanic physics and chemistry.
    (iii) The third challenge results from the Department's 
responsibility to encourage a broad distribution of the benefits of the 
country's economic growth. The tremendous growth of the internet and 
related computer sciences is occurring just as the great deficiencies 
in American education are becoming increasingly apparent. Participation 
in economic growth requires education which is lacking in some regions 
of the country and sectors of our society. Rationalizing that disparity 
is an enormous challenge.
    9. In further reference to question No. 6, what factors in your 
opinion have kept the department/agency from achieving its missions 
over the past several years?
    In many respects the Department has been quite successful over the 
past few years. The economy has been strong and funding has been 
adequate. However, there are a few areas where improvement can be 
sought. The development of trade partnerships in Southern Asia has been 
impaired by the economic turmoil in that region over the past few 
years. Commercial relations with China have moved only haltingly 
because of domestic disagreements as to the appropriate policy for 
dealing with the Chinese. On the scientific front, uncertainty over the 
causes or even the existence of global warming seems to have interfered 
with the responsiveness of our government in dealing with that issue. 
Similarly an uncertain scientific foundation in understanding our 
fisheries and their evolution seems to have hindered the development 
and dissemination of effective and widely accepted plans for managing 
those natural resources. Last, very little progress has been made in an 
equitable distribution of the benefits of America's economy. Great 
efforts and resources have been expended; however, the problem 
continues to be glaringly apparent. Education is a big part of the 
solution, and the Department can and should contribute to that effort.
    10. Who are the stakeholders in the work of this agency?
    Ultimately the stakeholders in the work of the Department of 
Commerce are the citizens of the United States. As proxies for the 
citizens, the local, State, and Federal Governments must be thought of 
as intermediaries or representative stakeholders.
    11. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 10?
    As Deputy Secretary of Commerce, I am responsible first to the 
Secretary of Commerce and with him to all American citizens and then 
intermediaries or representative stakeholders. First, we are 
responsible to the President and the Executive Branch of the Federal 
Government for carrying out the President's policies to the best of our 
abilities. Second, we are responsible to Congress and its various 
committees from whom we receive financial support and legislative 
requirements and to whom we are obliged to report our progress and to 
respond to suggestions and criticisms.
    12. Question 12. (was not available at the time this hearing went 
to press)
    13. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and report on your progress in achieving 
those goals.
    Identifying performance goals and measuring progress against those 
goals is a widely accepted approach to managing and improving the 
performance of a complex enterprise. The most important benefit derived 
from this approach is the identification of areas of shortfall at an 
early enough time to permit timely response. It also provides an 
effective means of recognizing individuals and groups that are 
performing at a superior level.
    (b) What steps should Congress consider taking when an agency fails 
to achieve its performance goals? Should these steps include the 
elimination, privatization, downsizing or consolidation of departments 
and/or programs?
    If the Commerce Department is failing to achieve any of its 
objectives, I presume that the Department leadership would be asked for 
an explanation and a remedial plan. If failure persists after a 
reasonable period for management response, I presume that Congress 
would and should institute responses up to the limit of its powers. I 
further presume that these responses would include some or all of the 
remedies mentioned in framing the question.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    First I should be held accountable for all legislated requirements 
for managing the Department. These would include the Chief Financial 
Officers Act of 1990 and the Government Performance and Results Act of 
1993 (GPRA). In addition the Annual Performance Plan for the 
Department, as required by the GRPA, will set forth a series of 
tactical and strategic goals. The Secretary of Commerce and I should be 
held accountable to these goals and our progress measured against these 
goals.
    14. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    I follow the philosophy of setting goals and expectations for each 
employee, of periodic meetings and/or reports to assess progress, and 
an annual review to agree with the employee as to his or her cumulative 
performance. I pride myself on maintaining an informal atmosphere and 
make myself available for frequent unscheduled interaction. Most 
colleagues who have worked under my supervision over the years tell me 
that they have learned a good deal and have personally benefited from 
the interaction. I have had no employee complaints against me.
    15. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe.
    I have had no prior working relationship with Congress or its 
committees.
    16. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    As I understand it, the Inspector General has a role of 
investigating any instances of fraud, waste and abuse that are thought 
to exist within the Department. The Inspector General then has an 
obligation to report his/her findings to the Secretary and to Congress.
    Over time I would hope to develop a relationship with the Inspector 
General of the Commerce Department such that he/she would communicate 
frequently and freely with the Secretary's office so that, if 
warranted, prompt remedial action could be implemented.
    17. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
    If confirmed, I would expect to have frequent personal interaction 
with the Senate Committee on Commerce, Science and Transportation and 
other stakeholders as to the progress we are making on various missions 
of the Department. I am certain those meetings will afford ample 
opportunity for appropriate suggestions and criticisms to be offered. 
Further, we will be obliged to prepare and submit an Annual Performance 
Plan which will enumerate our objectives. I would expect frequent 
discussions related to our progress on these objectives to take place 
between Commerce staff (including myself), and all stakeholders. I 
believe I would have the affirmative obligation to alert affected 
stakeholders, including the committee, if I anticipate significant 
shortfall from any of our objectives.
    18. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities: Please 
state your personal views.
    Because of the highly diverse nature of the Department's 
activities, I find it impossible to give the Committee a meaningful set 
of priorities. However I would offer a few suggestions: (i) First we 
will need approval for a FY '02 budget for the Department. This budget 
should be consistent with the President's priorities and objectives. 
(ii) We should seek a reauthorization of the legislation for the 
regulation of our fisheries. (iii) I believe that ``fast track'' 
authority for the President to negotiate international trade agreements 
is very high priority.
    19. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation.
    I do pledge to work with the Secretary to organize a management 
system to allocate discretionary spending based on national priorities 
as determined in an open forum. I am aware that Congress will have 
views on these matters and will express them from time to time. These 
views, as well as views within the Department and other parts of the 
Executive Branch, will form the basis for spending allocation.

    The Chairman. The Committee is very pleased to have you 
willing to come and sacrifice in order to serve the government.
    You say you are going to foster technology, and yet I am 
reading in the papers that you are going to get rid of the 
Advanced Technology Program (ATP). What do you mean you are 
going to foster it, but then get rid of it?
    Mr. Bodman. Well, there are all aspects of technology 
fostering, if you will, that go on within the Commerce 
Department. The Advanced Technology Program is one of them.
    The Chairman. What do you think of it?
    Mr. Bodman. Well, I have to say, sir, that first I would 
tell you that you are looking at a product of the Federal 
funding of research. I was funded during my graduate years at 
MIT by a National Science Foundation fellowship and the works 
that I depended upon were projects and programs that had been 
funded by the Office of Naval Research and by DARPA.
    I am a great believer in the effectiveness and the power of 
the Federal Government funding research. I think the question, 
at least as I understand it, and I would reiterate I have not 
been involved in this, because whatever discussions have gone 
on and decisionmaking I have been excluded from, but if I am 
confirmed, I would expect that this is one of the areas that 
the Secretary would expect me to focus my time and attention on 
because I have a good deal of experience in understanding and 
managing the process of commercializing technology, 
commercializing new ideas.
    The Chairman. Well, that said, it is not fostering 
research--you came in finally and made a safe landing by the 
last comment--by commercializing. What we found in our 
experiences some 20 years ago was that we were fostering the 
research. There is not any question that the United States of 
America is a leader in technology research. But we were not the 
leader by any manner or means in the commercialization, the 
actual development and the commercialization of it. We have got 
hundreds of examples.
    We saw that we were losing out, and we had all of this 
research proved, but not developed and not commercialized, in 
the old Bureau of Standards that you had in the Department of 
Commerce. So we developed the Bureau of Standards into the 
National Institute of Standards and Technology, launched the 
Advanced Technology Program, and then supplemented it with the 
Manufacturing Extension Partnership program for the small 
businesses and otherwise to gear up and compete.
    Now, getting right to the Advanced Technology Program, the 
projects that are funded have been vetted and re-vetted. The 
decision is made by a non-political panel not influenced by me 
or the Secretary, or by calls from the White House. Senator 
Danforth of Missouri was the chair at that time, and we went 
over it thoroughly in a bipartisan fashion.
    One, the particular research that has been found first must 
be financed to the tune of 50 percent of those making 
application for participation in the ATP. Second, it must be 
found to be a unique particular research that needs to be 
developed. Then they have to stand in line on a limited funding 
basis to see whether or not they ought to be funded, and that 
comes through the National Institute of Standards and 
Technology within the Department, which is a group of 
professionals, and not calls from the Senator and the Commerce 
Committee or from the Secretary calling down and saying, I want 
to fund this, or from the White House saying, we have got a 
campaign going and we would like to take and beef up that vote 
in New Jersey, so let us get that New Jersey program going.
    So we went about it very, very carefully, and it has 
weathered the storms, in fact, first opposed by the executive 
branch and then enthusiastically supported. So that is why I am 
somewhat dismayed. When you said you were fostering research I 
said, well, maybe you have got the wrong idea. It is not the 
research at all. It is actually the development and 
commercialization of the research.
    We have the Academy of Sciences and everything else. We 
have got tax write offs and things galore going on that we all 
favor with respect to fostering research. But this is the one 
program in government that commercializes and develops the 
research.
    Let me just ask one question about trade. What do you think 
is the Commerce Department's role fostering trade? What do you 
intend to do about trade? You mentioned NOAA, you mentioned the 
Census, you mentioned all these other things, including NIST. 
But, you did not mention trade. You have got a Secretary who is 
interested in that for a change, and I was wondering if you 
were interested.
    Mr. Bodman. Yes, sir, I am interested in that. Having spent 
the bulk of my time during the last 14 years engaged in 
international trade, it seems to me the responsibility of the 
Department is twofold: One, to expand our trade agreements, 
which will expand markets for American business abroad; and 
second, to enforce the agreements that are in place. We expect 
to do both.
    The Chairman. Well, we got a break in Sunday's New York 
Times. I will not read the entire article entitled ``Free 
Trade's Promise in Latin America: The Poor Survive It All.'' 
However, I will read the following:

        Their debate barely touches a far more fundamental 
        question: Does the combination of democracy and free 
        enterprise guarantee achievement of the larger goal--
        higher living standards? In Latin America, the answer 
        often is no.

    [Full article is included in the Appendix.]
    I testified 40 years ago before the old International 
Tariff Commission, and at that time they said, Senator--
incidentally, I had Tom Dewey representing Japan. Excuse me, 
they said,

        Governor, what do you expect these emerging countries 
        from World War II and the Third World countries to 
        make? Let them make the shoes and the clothing; we will 
        make the airplanes and the computers.

    Now fast-forward 40 years. They are making the shoes, the 
clothing, the airplanes, the computers, and by way of 
production, we are going out of business. We had 42 percent of 
the work force at the end of World War II in production and 
manufacturing. By 1965, it was down to 29 percent, and it is 
now down to 12 percent. So we are not making anything.
    Otherwise, the competition in trade is competition with 
ourselves. America's industry has given up on the government. 
For example, let us go right straight to Japan. They say: ``You 
do the research,'' which bothers me. Secretary Evans has 
already sent Dr. Kosmetski over to Japan to set up all of their 
research. So they are doing the research, and they are doing 
the manufacturing, and we are doing the sales and promotion and 
sales in country.
    So you do not find--when I used to come 30 years ago, the 
first fellow on the trade bill was the downtown lawyer for 
Japan. Now it is the downtown lawyer for the Fortune 500. They 
are gone. It caused the Wall Street Journal to headline right 
after we had the vote on PNTR that it was not really a trade 
measure, it was an investment measure. It was to allow 
America's industry to invest in China. We have got an $83 
billion deficit in the balance of trade with China. Europe does 
not have that, but we are going out of business there.
    We found, of course, with NAFTA that that is exactly what 
it was, an investment agreement with Mexico. Rather than 
gaining 200,000 jobs, we have lost 600,000. So it is an 800,000 
swing that we know about.
    So as you work as the Deputy Secretary of this auspicious 
Department of government, commerce and trade--and I would like 
to change the name to ``Trade and Commerce'' and emphasize it--
in essence, you are running around worried about fisheries, you 
are worried about the Census, you are worried about all these 
other tidbits, while the economic strength of the nation is 
being drained.
    So if you do not mind, please talk to the Secretary and 
tell him you are enthused about doing something about trade.
    Mr. Bodman. I have the feeling you have already 
communicated that, sir.
    [Laughter.]
    The Chairman. We welcome you and we appreciate it. We are 
looking forward to working with you. The Committee will be at 
ease to submit questions from a couple of other Senators that I 
believe had some questions for you. As soon as we solve this 
organizational problem that we have here in the U.S. Senate, we 
will be voting on your confirmation.
    Thank you very much, Mr. Bodman.
    Mr. Bodman. Thank you very much, sir. We appreciate the 
help.
    The Chairman. Yes, sir.
    Our second panel is: Allan Rutter, nominated as 
Administrator--our second panel, if they will come forward, 
please: Mr. Allan Rutter, he is nominated to be Administrator 
of the Federal Railroad Administration; Kirk Van Tine, who is 
nominated as the General Counsel at the Department of 
Transportation; and Ellen Engleman, who has been nominated to 
be Administrator of the Research and Special Programs in the 
Department of Transportation.
    Mr. Rutter, you have, I believe, your wife with you?
    Mr. Rutter. Yes, sir, my wife, Melanie.
    The Chairman. We welcome you to the Committee. We are glad 
to have you.
    Mr. Van Tine, you have your wife and daughter, I believe.
    Mr. Van Tine. Yes, Mr. Chairman, my wife Barbara and my 
younger daughter, Meredith, who is 17. My older daughter 
Lindsay is away at college, and she could not be here today.
    The Chairman. Very good.
    Ms. Engleman, you have--whoa, boy, you have got a good 
group here. You have got your mother, your stepfather, your 
nephew, and me as your friend. Go ahead. Would you introduce 
your mother and relatives, please.
    Ms. Engleman. Thank you, sir. My mother, Beatrice Engleman 
Johnson; my nephew, Kyle Andrew Kewis; my stepfather, Robert 
Johnson.
    The Chairman. We are very glad to have them. Thank you very 
much.
    Let us start with you, Ms. Engleman. The statements of the 
witnesses in their entirety will be included in the record. You 
can highlight it as you wish.

         STATEMENT OF ELLEN G. ENGLEMAN, NOMINEE TO BE 
           ADMINISTRATOR OF THE RESEARCH AND SPECIAL 
                    PROGRAMS ADMINISTRATION

    Ms. Engleman. Thank you, sir. There was a slight flood 
here. I believe that is my first Office of Emergency 
Preparedness action.
    [Laughter.]
    Mr. Chairman, Members of the Committee, and staff: It is 
with great humility and appreciation I sit before you today as 
President Bush's nominee for the position of Administrator for 
the Research and Special Programs Administration within the 
U.S. Department of Transportation. If confirmed by the Senate, 
I look forward to the opportunity to work with Secretary Mineta 
and the Members of this Committee, and I thank you in advance 
for your time and consideration.
    My professional work experience has focused on a mix of 
public policy, law, and communications. As an attorney, I 
understand and support the legislative and regulatory process. 
As a public policy professional, I understand and support the 
need for successful communication and coordination among the 
modes within the Department of Transportation and legislative, 
executive, and judicial branches of government, as well as key 
stakeholders, constituents, and/or employees.
    As current president and CEO, I bring a business 
perspective with advanced managerial skills and a focus on 
achieving a return on investment for Federal dollars and 
programs and creating and managing efficient and effective 
projects.
    If confirmed as Administrator for RSPA, I would focus on 
identifying, supporting, and developing when necessary 
programs, rules, and regulations that support the goals of 
increasing safety for the American people. As an attorney, 
regulatory matters are of considerable importance to me. As a 
citizen, I believe that regulations are intended to be 
supportive of my health and safety. As Administrator of RSPA, 
regulatory issues for pipeline safety and hazardous materials 
are an important part of the overall role and responsibility of 
the RSPA mission.
    As such, it would be a key priority to act with the utmost 
diligence to ensure that duly enacted laws are enforced, that 
regulations comply with the letter and spirit of the law, and 
that timely implementation and responsiveness by RSPA is 
carried out in all areas. This includes a commitment to working 
closely with Congress to deliver successful pipeline safety 
reauthorization.
    If confirmed, I will work to ensure that a firm commitment 
to efficient and effective use of Federal funds is universally 
understood and accepted by all within RSPA. I wholeheartedly 
agree with President Bush in his statement that it is the 
people's money and anyone associated with the governance, 
issuance, and responsibility of Federal funds should share in 
this belief. In practical terms, this means that programs and 
projects within RSPA should be held to a high standard, seeking 
to develop and create efficiency and effectiveness in all 
tasks.
    I will support partnership solutions and innovative 
programs and projects that address our national energy goals. I 
believe that RSPA program goals should seek synergy among the 
transportation modes and other agencies within the Federal 
Government. I would focus on inter-agency, intermodal, and 
departmental cooperation and coordination whenever possible to 
lower costs, focus on avoiding duplication of effort and 
responsibility, and developing partnering opportunities.
    This includes review of regulatory, contractual, and 
procurement standards to remove unnecessary requirements, 
procedures, or regulations that discourage innovation, restrict 
or limit efficiency and effectiveness, and negate incentives.
    I believe that all professionals can improve their 
capability and ability to learn, to manage, to develop 
professionally and personally. I know that I will face new 
challenges in my role as a senior government official if 
confirmed. I am willing to listen and learn and dedicate that 
which I do know through my professional career and educational 
background to do my best each and every day. I will seek out 
detailed knowledge of RSPA senior staff and ask Congress and 
key transportation constituents and stakeholders to share their 
opinions and views to support my education and my understanding 
of the other critical issues facing RSPA and the Department of 
Transportation.
    Honesty, integrity, commitment, ethical behavior, and 
perseverance are the core values and performance goals that 
would form my responsibilities as RSPA Administrator. It would 
be my responsibility to build bridges of communication, enhance 
relationships, and fulfill my official responsibilities in a 
dutiful, honorable, and responsible manner. In addition, I hope 
to offer measurable results via improved efficiency, 
effectiveness, awareness, cost versus return on investment, and 
responsiveness.
    I believe that we work as individuals, but are most 
effective when we come together as a team. I believe in 
rewarding individual performance, supporting individual 
professional growth, and establishing clear direction, goals, 
and advertised rewards and consequences. In short, I believe in 
open and honest communication with respect to the individual, 
his work, his work ethic, and his ethic.
    I believe in leading by example and would provide 
motivation and enthusiasm and hold myself accountable for 
failures. If confirmed, I will work as closely and regularly 
with Congress as possible.
    As a daughter of a Federal employee who is in her forty-
sixth year of government service, I am proud to share her 
belief that public service is both an honor and a 
responsibility. As an officer of the U.S. Naval Reserve, I am 
proud to serve this country. As the president and CEO of 
Electricore, a public-private partnership, I have had the 
responsibility to protect Federal investment, to ensure 
successful program management, and develop winning strategies 
to support our national goals of education, economic 
development, environment, and energy independence. As a 
community volunteer, I know what a difference a single person 
can make when the heart is committed to a larger goal than 
oneself. As a proud Hoosier, I believe in the American dream 
and the American spirit.
    To serve as the Administrator for RSPA would be the 
greatest honor and responsibility that would call upon my 
professional and personal knowledge and skills in a unique role 
of public service. I believe that we as a nation are on the 
critical edge of decisionmaking that will affect our country 
and our world for generations to come. It would be my honor and 
privilege to dedicate my heart and my mind to supporting 
President Bush, Secretary Mineta, and the American people in 
this mutual effort, and to serve all Americans who rely on safe 
and secure transportation enforcement and a safe and effective 
national transportation system for goods and services.
    Thank you again for your time and consideration.
    [The prepared statement and biographical information of Ms. 
Engleman follow:]

Prepared Statement of Ellen G. Engleman, Nominee to be Administrator of 
            the Research and Special Programs Administration
    Mr. Chairman and Members of the Committee: It is with great 
humility and appreciation that I sit before you today as President 
Bush's nominee for the position of Administrator for Research and 
Special Programs Administration within the Department of 
Transportation. If confirmed by the Senate, I look forward to the 
opportunity to work with Secretary Mineta and the Members of this 
Committee. I thank you in advance for your time and consideration.
    My professional work experience has focused on a mix of public 
policy, law and communication. As an attorney, I understand and support 
the legislative and regulatory process. As a public policy 
professional, I understand and support the need for successful 
communication and coordination among the modes within the Department of 
Transportation and the Legislative, Executive and Judicial branches of 
government as well as key stakeholders, constituents and employees. As 
a current President and CEO, I bring a business perspective with 
advanced managerial skills and a focus on achieving a return on 
investment for Federal dollars and programs and creating and managing 
efficient and effective programs.
    If confirmed as Administrator for RSPA, I would focus on 
identifying, supporting and developing, when necessary, programs, rules 
and regulations that support goals of increasing safety for the 
American people.
    As an attorney, regulatory matters are of considerable importance 
to me. As a citizen, I believe that regulations are intended to be 
supportive of my health and safety. As Administrator of RSPA, 
regulatory issues for pipeline safety and hazardous materials are an 
important part of the overall role and responsibility of the RSPA 
mission. As such, it would be a key priority to act with the utmost 
diligence to ensure that duly enacted laws are enforced, that 
regulations comply with the letter and spirit of the law and that 
timely implementation and responsiveness by RSPA is carried out in all 
areas. This includes a commitment to working closely with Congress to 
deliver successful Pipeline Safety Reauthorization.
    If confirmed, I will work to ensure that a firm commitment to 
efficient and effective use of Federal funds is universally understood 
and accepted by all within RSPA. I wholeheartedly agree with President 
Bush in his statement that it is the ``people's money'' and anyone 
associated with the governance, issuance and responsibility of Federal 
funds should share in this belief. In practical terms this means that 
programs and projects within RSPA should be held to a high standard, 
seeking to develop and create efficiency and effectiveness in all 
tasks. I will support partnership solutions in innovative programs and 
projects that address our national energy goals. I believe that RSPA 
program goals should seek synergy among the transportation modes and 
other agencies within the Federal Government. I would focus on 
interagency, inter-modal and departmental cooperation and coordination 
whenever possible to lower costs, focus on avoiding duplication of 
effort or responsibility and develop partnering opportunities. This 
includes review of regulatory, contractual and procurement standards to 
remove unnecessary requirements, procedures or regulations that 
discourage innovation, restrict or limit efficiency and effectiveness 
and negate incentives.
    I believe that all professionals can improve their capability and 
ability to learn, to manage, to develop professionally and personally. 
I know that I will face new challenges in my role as a senior 
government official. I am willing to learn and listen and to dedicate 
that which I do know through my professional career and educational 
background to do my best, each and every day. I will seek out detailed 
knowledge of RSPA senior staff and would ask the Congress and key 
transportation constituents and stakeholders to share their opinions 
and views to support my education and my understanding of the other 
critical issues facing RSPA and the Department of Transportation.
    Honesty, integrity, commitment, ethical behavior and perseverance 
are the core values and performance goals that would form my 
responsibilities as RSPA Administrator. It would be my responsibility 
to build bridges of communication, enhance relationships, and fulfill 
my official responsibilities and duties in a responsible and honorable 
manner. In addition, I hope to offer measurable results via improved 
efficiency, effectiveness, and awareness, cost versus ROI and 
responsiveness.
    I believe that we work as individuals, but are most effective when 
we can come together as a team. I believe in rewarding individual 
performance, supporting individual professional growth and establishing 
clear direction, goals and advertised rewards and consequences. In 
short, I believe in open and honest communication with respect to the 
individual, his work efforts and ethic. I believe in leading by 
example, and would provide motivation and enthusiasm and hold myself 
accountable for failures. If confirmed, I will work as closely and 
regularly with Congress as is possible.
    As the daughter of a Federal employee who is in her 46th year of 
government service, I am proud to share her belief that public service 
is both an honor and a responsibility. As an officer in the U.S. Naval 
Reserve, I am proud to serve this country. As the President and CEO of 
Electricore, a public/private partnership, I have had the 
responsibility to protect Federal investment to ensure successful 
project management and develop winning strategies to support national 
goals of education, economic development, environment and energy 
independence. As a community volunteer, I know what a difference a 
single person can make when the heart is committed to a larger goal 
than oneself. And as a proud Hoosier, I believe in the American dream 
and the American spirit.
    To serve as Administrator for RSPA would be the greatest honor and 
responsibility that would call upon my professional and personal 
knowledge and skills in a unique role of public service. I believe that 
we are, as a nation, on the critical edge of decisionmaking that will 
affect our country and our world for generations to come. It would be 
my honor and privilege to dedicate my heart and mind to supporting 
President Bush, Secretary Mineta and the American people in this mutual 
effort and to serve all Americans who rely on safe and secure 
transportation infrastructure and a safe and effective national 
transportation system for goods and services.
    Thank you again for your time and consideration.
                                 ______
                                 
                      A. Biographical Information
    1. Name: Ellen Gayle Engleman.
    2. Position to which nominated: Administrator--Research and Special 
Programs Administration, Department of Transportation.
    3. Date of nomination: June 7, 2001.
    4. Address: Not released to the public.
    5. Date and place of birth: September 21, 1959, Beech Grove, 
Indiana.
    6. Marital status: Single.
    7. Names and ages of children: None.
    8. Education: John F. Kennedy School of Government, Harvard 
University, 1992-1993; Master of Public Administration, 1993; Indiana 
University School of Law, 1984-1987, Juris Doctorate, 1987; Indiana 
University, 1979-1983, Bachelor of Arts, 1983.
    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)
    President & CEO, Electricore, Inc. President and Chief Executive 
Officer for non-profit public/private research and development 
consortium dedicated to advanced transportation and energy 
technologies. Responsible for all operations, management and 
administrative duties, business development activities, communication, 
negotiation, program management and contractual administration, for 
$160 million in total R&D contracts. Also responsible for governmental 
and community affairs with university and private sector participants 
and Federal agencies including Departments of Defense, Energy and 
Transportation. Responsible for organizational development and 
internal/extemal communication, public relations. Office located in 
Indianapolis, Indiana, 1993 to present.
    Director, Corporate and Government Affairs, Direct Relief 
International. Responsible for corporate and government relations for 
non-profit international medical relief organization. Responsible for 
$25+ million in-kind contribution budget and development of community 
governmental affairs outreach programs, designed corporate giving 
relationships and standards, supervised in-kind contributions team and 
served as liaison with almost 100 pharmaceutical and medical supply 
manufacturers, distributors. Located in Santa Barbara, California, 
1993-1994.
    Public Affairs, Corporate Communications Manager, GTE North, Inc. 
Responsible for corporate communications, public affairs and 
governmental affairs for 10-State regional headquarters for GTE 
Telecommunications company. Developed, produced and evaluated strategic 
communications programs/plans for 20,0000 employees within a 10-State 
area operations with special emphasis on telecommunications, quality 
management and labor issues. Led inter- and intra-departmental teams 
within 10-State operations for special projects including task force on 
environmental efforts. Served as special assistant to the President. 
Served as EEO coordinator. Included executive speech writing and 
conference planning/design. Editor of employee newspaper responsible 
for all articles on telecommunications issues. Office headquartered in 
Westfield, Indiana, 1989-1992.
    Public Affairs, Governmental Affairs Executive, GTE North, Inc. 
Responsible for initial review and analysis of proposed legislation for 
10 States. Developed strategic plans and corporate responsive 
positions, coordinated lobbying efforts in support of GTE North 
telecommunications and business objectives in legislative arena for 10 
States. Developed network of State and Federal legislative contacts. 
Developed political action committee membership recruitment and support 
activities, constituency relations and special events for 10 States. 
Developed legal guidelines for lobbying/PACs for 10 States. Office 
headquartered in Westfield, Indiana, 1987-1989.
    Legislative Analyst, Indiana Judicial Study Commission, State of 
Indiana. Legislative Analyst for State of Indiana, responsible for 
studies of State courts to determine necessity for new court creation. 
Researched and investigated effectiveness and evaluation of proposed 
court creation within State of Indiana. On-site investigation, 
interviews, statistical analysis provided for testimony and 
documentation issued to General Assembly. Office located in State 
House, Indianapolis, Indiana 1985-1987.
    Law Clerk, Marion County Prosecutor's Office, State of Indiana.  
Law Clerk for Marion County Prosecutor Stephen Goldsmith, responsible 
for legal research and other assignments. Special assignments included 
Governor's Task Force to Reduce Drunk Driving: designed major media 
event for and organized Hoosiers Against Drunk Driving 2 day conference 
for over 800 high school students. Marion County Medical Society: 
authored and coordinated production for booklet concerning mandatory 
reporting requirements issued to 2,000 physicians in Marion County, 
Indiana. Office located in City County Building, Indianapolis, Indiana, 
1985.
    Development Associate for Indianapolis Symphony Orchestra. 
Responsible for fund-raising support to development director. 
Researched and authored grant applications assisted with corporate and 
private fundraising campaigns, organized and coordinated special 
events. Managed major donor base. Office located in Indianapolis, 
Indiana, 1984.
    Sales Manager, L.S. Ayres and Company. Selected from field of 600 
applications for one of ten positions. Completed 12 week intensive 
training course, then assigned responsibility for $1,000,000 area with 
sales forecasting and tracking for weekly, monthly projections, trend 
analysis. Supervised 16 full-time, 7 part-time employees. Responsible 
for multi-million sales area at Glenbrook store, located in 
Indianapolis, Indiana, 1983.
    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)
    Congressional Fellow, office of Senator Richard G. Lugar, U.S. 
Senate, 1992.
    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.)
    President & CEO, Electricore Inc. Corporate Officer, 1999-present; 
Board of Directors, Direct Relief International 1997-2001, (resigned 
June 2001); Board of Directors, Vitamin Angel Alliance, 1999-2001, 
(resigned June 2001).
    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.)
    Current Memberships: Indiana State Bar Association, Member; 
Indianapolis Bar Association; Columbia Club, Indianapolis, Indiana; 
Indianapolis Athletic Club, Indianapolis, Indiana.
    Past Memberships: Indianapolis Opera Guild; Santa Barbara Grand 
Opera Association; Indianapolis Symphony North Group; Public Relations 
Society of America; Indianapolis Council on World Affairs; Indianapolis 
Committee on Foreign Relations; Junior League of Indianapolis; Heritage 
Place, Senior Citizens Center; Indianapolis Shakespeare Festival; 
Indianapolis Phoenix Theater; Kiwanis International.
    13. Political affiliations and activities: (a) List all offices 
with a political party which you have held or any public office for 
which you have been a candidate. None.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. General campaign support for: Kerns for Congress, 2000; Indiana 
State Republican Committee, general support for 2000 election; Richard 
G. Lugar for President, 1995; Lugar Senate Race, 1994; Dan Quayle, U.S. 
Senate, 1980; Republicans for Indiana, member of executive board, 1992-
1992; 10 district Congressional Races, 1984, 1990, 1992; Marion County 
Prosecutor Race, 1986; Sue Anne Gilroy, mayoral race, Indianapolis; 
Goldsmith Governor's Race; Indianapolis County Council Republican 
support, 1986, 1990; William Hudnut mayoral race for Indianapolis, 
1986; Victory 1990 State legislative race support, 1991-92.
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years. 1996, Richard G. Lugar 
Presidential Campaign, $1,000; 2000 Congressional Campaign for Brian 
Kerns, $1,000.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognition for outstanding service or achievements.) 
``Top Forty under 40'' Indianapolis Business Journal, 1997; Richard G. 
Lugar Excellence in Public Service Series, 1992; Stanley K. Lacy 
Executive Leadership Series, Class XII, 1987; Columbia Club Chairman's 
Recognition Award for Exemplary Service, 1985.
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated. None.
    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President?
    I believe that I was chosen for nomination for the position of 
Administrator for Research and Special Programs in the Department of 
Transportation due to my almost 20 years experience and background in 
private sector corporate management and public affairs (a combination 
of law, public policy and public and governmental relations) with 
specific emphasis on my experience at Electricore, Inc. As President 
and CEO of Electricore, I have had the privilege of creating a 
successful public/private partnership among universities, small and 
large businesses and the Federal Government. Using a non-profit 
organization as a basis to create a partnership focus among disparate 
groups, allowed for a unique and ultimately successful ``way of doing 
business'' to be developed and evolve. Our successes include:
    Serving as program manager for Federal R&D partnerships of $160 
million for over 70 projects. Key R&D program development with 
Department of Energy (Office of Transportation Technologies OTT, Energy 
Efficiency and Renewable Energy EERE), Department of Transportation 
Research Special Programs Administration (RSPA), the Defense Advanced 
Research Projects Agency (DARPA), Tank Automotive Command (TACOM--
Department of Army), U.S. Air Force and Naval Surface Warfare Center, 
Crane Division.
    Consortium recognized by a Hudson Institute assessment report as a 
``model for defense acquisition reform.''
    Designed, developed, and implemented the establishment of the 
Battery Evaluation and Testing Center at the Naval Surface Warfare 
Center, Crane Division. Created public/private partnership to allow 
private industry access to testing facilities at NSWCC. This ``seed'' 
of privatization provides for independent revenue to support 1100 
engineering jobs at NSWCC.
    Established Hawaii as first Electric Vehicle-ready State. In less 
than 12 months, designed, developed and implemented Federally-funded 
project to install electric vehicle infrastructure throughout State on 
three islands.
    Successful consortium R&D projects include: design and delivery of 
first all-electric vehicle to the National Parks System; design and 
delivery of first advanced series hybrid transit bus to New York City; 
design and development of first advanced fast charging infrastructure; 
design and development of first heavy hybrid power train cycler; design 
and development of national fuel cell center for NSWCC; advanced power 
electronics and electric motor development.
    Design, development and management of national Federal program 
reviews, conferences, program creation and planning sessions between 
industry and Federal agencies.
    Representing industry leaders, decisionmakers and government to 
develop Federal programs. Monitor technology development, serve as 
liaison between industry and government to develop, create public/
private partnerships.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment?
    My experience as President & CEO of Electricore is of primary focus 
on my ability to serve as Administrator of Research and Special 
Programs at the Department of Transportation. Also, I have a unique 
professional background with almost 20 years experience and background 
in private sector corporate management and public affairs (a 
combination of law, public policy and public governmental relations). 
Through this tripartite set of skills, I have focused on building 
bridges of communication among disparate entities, creating new 
partnerships and entrepreneurial programs, developed successful 
governmental affairs, public relations and public outreach programs and 
focused on creating cost-effective, efficient and successful public/
private projects and programs. This ability to communicate, coordinate, 
supervise, and manage governmental and community affairs projects with 
universities, small and large businesses and State and Federal 
Government uniquely supports my nomination as Administrator of RSPA.
    RSPA is also uniquely positioned as an agency with a broad base of 
interests and responsibilities. As a professional ``communicator'' I 
can serve the needs of RSPA in supporting safety and educational 
outreach for pipeline safety, transportation of hazardous materials, 
negotiation of Federal and State relationships, and support the overall 
goals of the Department of Transportation. As an attorney, I offer 
support and understanding of the regulations and contractual 
negotiations necessary to support Research and Development, pipeline, 
HAZMAT and safety reporting regulations and standards. As someone 
experienced in program management of Federal research and development 
projects, public outreach and recruitment of universities and private 
companies to work together in partnerships, I offer support to the 
Volpe National Transportation Systems Center, the university 
partnerships, and the Transportation Safety Institute. Last, as someone 
experienced in disaster relief and medical relief, I will support the 
RSPA responsibilities of emergency management and disaster 
coordination.
                   B. Future Employment Relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? Yes.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.
                   C. Potential Conflicts of Interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers.
    Please refer to the Acting General Counsel opinion letter.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    Please refer to the Acting General Counsel opinion letter.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    Electricore, Inc. has been and is currently under contract for R&D 
projects with the Federal Government. As part of my ethics agreement, I 
will recuse myself from direct involvement with any Electricore 
activities for 1 year.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy.
    Electricore, Inc. is one of the Advanced Vehicle Program consortia 
members. I have acted in concert with my fellow consortia members to 
support the Advanced Vehicle Program.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    As part of my ethics agreement I will recuse myself from direct 
involvement with any Electricore activities for 1 year.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.
                            D. Legal Matters
    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a compliant to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any Federal, State, or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any businesses of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. None.
                     E. Relationship With Committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? Yes, to the 
best of my ability.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes, to the best of my ability.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? Yes, to 
the best of my ability.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress.
    I will work closely with RSPA staff to ensure that proposed 
regulations meet and do not exceed the statutory intent expressed in 
legislation. I will do my best to keep Congress informed of the 
timetable and substance of proposed legislation under the guidelines of 
and in adherence to the Administrative Procedure Act. I will focus on 
procedures and processes that will expedite the rulemaking process and 
support improvements in accountability and efficiency.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives.
    First and foremost, RSPA is inter-modal and supports and 
coordinates with all other modes within DOT on matters such as 
hazardous material regulation. Second RSPA is a network of programs 
that share an underlying focus--that of safety. Third, RSPA has a 
leadership role in research and development, public education, 
emergency and disaster coordination and management.
    RSPA is unique in terms of its multi-modal mandate and 
organizational history and has a mission to support safety, inter-
modalism, cost effective regulation, compliance training and research. 
Strategic goals include: Safety of people and property through the 
reduction of transportation related deaths, injuries and property 
damage via pipeline safety, hazardous materials, and emergency disaster 
management; Protection of the environment through the reduction of 
transportation related events and incidents that pose a threat to or 
inflict harm upon the environment; Support of the nation's economic 
health through research and development activities that foster 
innovation through science and technology to support national 
transportation goals including safety, mobility, economic growth and 
trade, and national security; Support of education and training through 
innovative partnerships with universities, support of the Volpe 
National Transportation Systems Center and the Transportation Safety 
Institute; Support of emergency management through coordination within 
DOT and with FEMA and other agencies to secure and minimize the harmful 
impact on people, property and environment by providing and ensuring 
transportation readiness in time of crisis.
    6. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                  F. General Qualifications and Views
    1. How have your previous professional experience and education 
qualified you for the position for which you have been nominated?
    As discussed above, my professional work experience has focused on 
an interrelated mix of public policy, governmental and public 
relations, law and communication. As an attorney I understand and 
support the legislative and regulatory process. As a public relations 
professional I understand and support the need for successful 
communication and coordination among and between modes within the 
Department of Transportation and Legislative, Executive and Judicial 
branches of government as well as key stakeholders, constituents and 
employees. As a current President and CEO, I bring a business 
perspective with advanced managerial skills and a focus on achieving a 
return on investment for Federal dollars and programs and creating and 
managing efficient and effective programs.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    First and foremost, as the daughter of a Federal employee who is in 
her 46th year of government service, I am proud to share her belief 
that public service is both an honor and a responsibility. As an 
officer in the U.S. Naval Reserve, I am proud to serve this country. As 
the President and CEO of Electricore, a public/private partnership, I 
have the responsibility to protect Federal investment to ensure 
successful project management and develop winning strategies to support 
national goals of education, economic development, environment and 
energy independence. As a community volunteer, I know what a difference 
a single person can make when the heart is committed to a larger goal 
than oneself. And as a proud Hoosier, I believe in the American dream 
and the American spirit.
    To serve as Administrator for RSPA would be the greatest honor and 
responsibility that would call upon my professional and personal 
knowledge and skills in a unique role of public service. I believe that 
we are, as a nation, on the critical edge of decisionmaking that will 
affect our country and our world for generations to come. It would be 
my honor and privilege to dedicate my heart and mind to supporting 
President Bush, Secretary Mineta and the American people in this mutual 
effort.
    3. What goals have you established for your first 2 years in this 
position, if confirmed?
    I would focus on identifying, supporting and developing, when 
necessary, programs and projects that support goals of increasing 
safety for the American people. I would further address issues 
affecting the environment; issues supporting economic development 
through efforts to mitigate traffic congestion, and issues that 
increase fuel efficiency and emissions reduction through our research 
and development efforts. I would look to develop or create new public/
private partnerships that seek out the best in government, universities 
and the private sector to improve our transportation systems.
    I will work to ensure that a firm commitment to efficient and 
effective use of Federal funds is universally understood and accepted 
by all within RSPA. I wholeheartedly agree with President Bush in his 
statement that it is the ``people's money'' and anyone associated with 
the governance, issuance and responsibility of Federal funds should 
share in this belief. In practical terms, this means that programs and 
projects within RSPA should be held to a high standard, seeking to 
develop and create efficiency and effectiveness in all tasks.
    I believe that RSPA program goals should seek synergy among the 
modes and other agencies within the Federal Government. I would focus 
on interagency, inter-modal and departmental cooperation and 
coordination whenever possible to lower costs, focus on avoiding 
duplication of effort or responsibility and develop partnering 
opportunities.
    4. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills?
    I believe that all professionals can improve their capability and 
ability to learn, to manage, to develop professionally and personally. 
As such, I know that I will face new challenges in my role as a senior 
government official. I am willing to learn and listen and to dedicate 
that which I do know through my professional career and educational 
background to do my best, each and every day.
    As with any new position, I would need to seek out additional 
information and detailed knowledge of key issues support from RSPA 
senior staff. I would also ask administration officials, the Congress 
and key transportation constituents and stakeholders to share their 
opinions and views to support my education and my understanding of the 
issues facing RSPA and the Department of Transportation.
    5. Who are the stakeholders in the work of this agency?
    The stakeholders for RSPA are the Congress, State and local 
officials, private sector entities involved in the transportation of 
hazardous materials and in pipeline transport, the general public who 
rely on safe and secure transportation infrastructure and virtually all 
other Americans who rely on a safe and effective national 
transportation system for goods and services.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 5?
    My role as Administrator for Research and Special Programs at the 
Department of Transportation would be to listen, learn, communicate, 
and support efforts for mutual benefit among the identified 
stakeholders. It would be my responsibility to build bridges of 
communication, enhance relationships, and fulfill my official 
responsibilities and duties in a responsible and honorable manner. I 
would be particularly conscious of my role in rulemaking and observe ex 
parte communication requirements if confirmed as Administrator.
    7. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls?
    My first responsibility is to ensure that I am aware of and 
knowledgeable about the RSPA budget, the roles and responsibilities of 
its departments, its internal financial controls and processes.
    Second, it would be my responsibility to monitor and review RSPA 
departmental spending.
    Third, I would encourage and motivate all employees to do ``more 
with less.''
    Fourth, I would lead by example and seek ways and means to more 
efficiently administer any direct budget items and programs under the 
Administrator's direct control.
    (b) What experience do you have in managing a large organization?
    I have managed programs affecting 20,000 employees at GTE, 
coordinated and served as liaison with over 100 large companies when at 
Direct Relief International and currently am responsible for a research 
and development consortium consisting of over 50 universities and 
businesses in 17 States for Electricore, Inc. I am responsible for 
program management for a total of $160 million in Federal R&D contracts 
involving over 75 projects.
    8. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals.
    I strongly support the goals and requirements of the Government 
Performance and Results Act. This legislation requires the development 
of measurable program targets and thus ensures that mission and vision 
are developed. I believe that a strategic plan carefully crafted and 
responsibly implemented is at the core of successful management.
    (b) What steps should Congress consider taking when an agency fails 
to achieve its performance goals? Should these steps include the 
elimination, privatization, downsizing or consolidation of departments 
and/or programs?
    Congress has a right to anticipate and expect that a Department 
will meet its stated goals and core performance objectives. If this 
does not occur, then an analysis and evaluation of this failure should 
be conducted. If exceptional or extraordinary circumstances occurred 
which affected the outcome or limited goals, then this should be 
documented and utilized as part of the lesson's learned analysis. It is 
important to try to identify if limited or individual success was 
achieved even if overall objectives were not met. That which is 
``good'' or successful should be acknowledged and continue. That which 
was ``negative'' or a failure should be equally acknowledged and 
consequential actions may include eliminating, privatizing, downsizing 
or consolidating programs.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    Honesty, integrity, commitment, ethical behavior and perseverance 
are the core values and performance goals that would form my 
responsibilities as RSPA Administrator. In addition, I hope to offer 
measurable results via improved efficiency, effectiveness, and 
awareness, cost versus ROI and responsiveness.
    My role as Administrator for Research and Special Programs at the 
Department of Transportation would be to listen, learn, communicate, 
and partner in support of efforts for mutual benefit among the 
identified stakeholders. It would be my responsibility to build bridges 
of communication, enhance relationships, and fulfill my official 
responsibilities and duties in a responsible and honorable manner.
    9. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    I believe that we work as individuals, but are most effective when 
we can come together as a team. I believe in rewarding individual 
performance, supporting individual professional growth and establishing 
clear direction, goals and advertised rewards and consequences. In 
short, I believe in open and honest communication with respect to the 
individual, his work efforts and ethic. I believe in leading by 
example, and would provide motivation and enthusiasm and hold myself 
accountable for failures. I am not aware of having an employee 
complaint brought against me as a supervisor or fellow employee.
    10. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe.
    If confirmed, I will work as closely and regularly with Congress as 
is possible. In my professional life I have worked successfully with 
individual congressional offices on a bi-partisan basis and with 
Federal agencies.
    11. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    I would work closely with the Inspector General and anticipate that 
any and all oversight that is brought to the department from the IG is 
of value to the success of the department. I believe that the IG's 
oversight and inspection is an important part of the checks and 
balances we have within the American system of government and will meet 
all required responsibilities of my office to support and cooperate 
with the IG.
    12. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
    As an attorney, regulatory matters are of considerable importance 
to me. As a citizen, I believe that regulations are supportive of my 
health and safety. As Administrator of RSPA, regulatory issues are an 
important part of the overall role and responsibility of the RSPA 
mission, especially in pipeline safety and hazardous material areas. As 
such, it would be a key priority to act with the utmost diligence to 
ensure that duly-enacted laws are enforced, that regulations comply 
with the letter and spirit of the law and that timely implementation 
and responsiveness by RSPA is carried out in all areas.
    13. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views.
    I believe that legislative action which is directed to supporting 
transportation safety, effectiveness, and efficiency would be first 
priorities. Second, I believe that legislative actions supporting 
critical research and development activities to support national energy 
needs and development, economic development (and related congestion 
mitigation) and energy security and national defense should be 
addressed.
    Although I have not studied all the major policy and management 
issues involved with RSPA, I believe that the following areas are 
appropriate for specific discussion: Reauthorization of TEA-21 to 
include enhancement of R&D programs which support the national goals of 
economic development, clean air, and energy independence; Support for 
coordination of interagency programs and policies for increased 
efficiency and effectiveness of Federal programs; Support for and 
development of public private partnerships to develop solutions in 
innovative programs and projects that address our national goals; 
Review of regulatory, contractual and procurement standards to remove 
unnecessary requirements, procedures or regulations that discourage 
innovation, restrict or limit efficiency and effectiveness and negate 
incentives.
    14. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation.
    Yes. I believe that discretionary spending should be allocated in a 
manner that is fixed, fair and include an open and acknowledged 
standard or criteria. Funding should reflect the statutory intent of 
authorized programs.

    The Chairman. Thank you very much.
    Mr. Van Tine.

 STATEMENT OF KIRK K. VAN TINE, NOMINEE TO BE GENERAL COUNSEL, 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Van Tine. Thank you, Mr. Chairman. It is a great honor 
to appear before the Committee today as the President's nominee 
to serve as the General Counsel of the Department of 
Transportation. I deeply appreciate Secretary Mineta's 
confidence in my ability to assist in this role and, if 
confirmed, I look forward to working with you and the other 
Members of the Committee and all of your staffs to address the 
pressing transportation issues that affect all Americans today.
    Secretary Mineta has emphasized that the transportation 
challenges we face today can only be resolved through 
consultation, cooperation, and coordination among all of the 
governmental and private sector stakeholders, and that new 
challenges require new ideas. I believe my background equips me 
well to contribute to the development of a more innovative, 
responsive Department of Transportation.
    I have had experience working with large government 
organizations. I served in the Navy as a submarine officer and 
I have represented the FDIC, a government corporation, in 
litigation matters for a number of years. I agree with the 
Secretary's view that the Department's success depends 
ultimately on having highly motivated and well-trained 
employees.
    While no private sector experience compares with the 
challenges of government service, I believe my years as a 
partner with management responsibilities in a large law firm 
have given me the necessary preparation for the responsibility 
of guiding the legal staff of the Department of Transportation 
and coordinating the work of the chief counsels' offices in the 
operating administrations.
    The Department is very fortunate to have an outstanding, 
highly experienced career legal staff, not only in the Office 
of General Counsel, but in all the operating administrations as 
well. I look forward to working with them and learning from 
them.
    The fundamental responsibility of the Office of General 
Counsel is to provide dependable and timely legal advice to the 
Secretary and other departmental employees. While I have a lot 
to learn regarding the particular statutes under which the 
Department operates, my background and experience as a lawyer 
is in using the law to solve practical problems. From what I 
have learned so far, it appears the major challenges facing the 
Department are fundamentally practical problems, such as 
ensuring safety, relieving congestion, and protecting 
consumers. I know those issues and many others are of the 
utmost importance to Congress and I commit that if I am 
confirmed, I will apply all my legal skills and energy to help 
find workable solutions to the challenges that face the 
Department of Transportation.
    I know that all the Members of the Committee and the 
Committee staffs are extremely busy right now and I would like 
to thank the Committee for scheduling today's hearing. I would 
be pleased to respond to any questions you may have.
    [The prepared statement and biological information of Mr. 
Van Tine follow:]

Prepared Statement of Kirk K. Van Tine, Nominee to be General Counsel, 
                      Department of Transportation
    Thank you, Mr. Chairman and Members of the Committee:
    It is a great honor to appear before the Committee today as the 
President's nominee to serve as General Counsel of the Department of 
Transportation. I deeply appreciate Secretary Mineta's confidence in my 
ability to assist in this role, and if confirmed, I look forward to 
working with all of you and your staffs in addressing the pressing 
transportation issues that affect all Americans today.
    Secretary Mineta has emphasized that the transportation challenges 
we face today can only be resolved through consultation, cooperation 
and coordination among all of the governmental and private sector 
stakeholders, and that new challenges require new ideas. I believe my 
background equips me well to contribute to the development of a more 
innovative, responsive Department of Transportation.
    I have had experience in working with large government 
organizations--I served in the Navy as a submarine officer, and have 
represented the FDIC--a governmental corporation--in litigation matters 
for a number of years--and I agree with the Secretary's view that the 
Department's success depends ultimately on having highly motivated and 
well trained employees. While no private sector experience compares 
with the challenges of government service, I believe my years as a 
partner with management responsibilities in a large law firm have given 
me the necessary preparation for the responsibility of leading the 
legal staff in the Department of Transportation, and coordinating the 
work of the Chief Counsels' Offices in the operating administrations. 
The Department is very fortunate to have an outstanding, highly 
experienced career legal staff, in the Office of General Counsel, and 
in all the operating administrations. If confirmed, I look forward to 
working with them and learning from them.
    The fundamental responsibility of the Office of General Counsel is 
to provide dependable and timely legal advice to the Secretary and 
other Departmental employees. While I have a lot to learn regarding the 
particular statutes under which the Department operates, my background 
and experience as a lawyer is in using the law to solve practical 
problems. And from what I have learned so far, it appears that the 
major challenges facing the Department are, fundamentally, practical 
problems, such as ensuring safety, relieving congestion and protecting 
consumers. I know those issues, and many others, are of the utmost 
importance to Congress, and I commit that--if I am confirmed--will 
apply all my legal skills and energy to help find workable solutions to 
the challenges that face the Department of Transportation.
    I know that all the members of the Committee, and the Committee 
staffs, are extremely busy right now, and I would like to thank the 
Committee for scheduling today's hearing. I would be pleased to respond 
to any questions you may have.
                                 ______
                                 
                      A. Biographical Information
    1. Name: Kirk K. Van Tine.
    2. Position to which nominated: General Counsel, U.S. Department of 
Transportation.
    3. Date of nomination: June 13, 2001.
    4. Address: Not released to the public.
    5. Date and place of birth: August 30, 1948; Syracuse, New York.
    6. Marital status: Married to Barbara B. Van Tine, maiden name 
Barbara A. Byers.
    7. Names and ages of children: Mary Lindsay Van Tine, 20; Meredith 
Leigh Van Tine, 17.
    8. Education: 1966 to 1970, U.S. Naval Academy, Annapolis, MD; 
B.S., June 1970; 1975 to 1978, University of Virginia School of Law, 
Charlottesville, VA; J.D. 1978.
    9. Employment record: 1970-1975, Officer, U.S. Navy, various 
locations; 1975-1978 Student, U.Va. School of Law, Charlottesville, VA; 
Summer 1976, Summer Associate, Law Offices of Northcutt Ely, 
Washington, DC; Summer 1977, Summer Associate, Baker & Botts, 
Washington, DC; Summer 1977, Summer Associate, Hunton & Williams, 
Richmond, VA; 1978-Present, Attorney, Baker Botts, L.L.P., Washington, 
DC, (Associate 1978-1986; Partner 1987-Present).
    10. Government experience: U.S. Navy 1966-1970.
    11. Business relationships: Partner, Baker Botts, L.L.P.; Partner, 
Boterlove (Baker Botts real estate partnership in Houston office 
building where firm offices are located).
    12. Memberships: Member, D.C. Bar Association; Co-Chair, D.C. Bar 
Litigation Section; Co-Chair, D.C. Bar Law Practice Management Section; 
Chair, D.C. Bar Election Board; Member, D.C. Bar Special Committee on 
Implementation of Civility Guidelines; Member, City Club of Washington.
    13. Political affiliations and activities: (a) List all offices 
with a political party which you have held or any public office for. 
None.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. 11/17/00 to 12/13/00, Provided legal services in support of 
George W. Bush in connection with 2000 Presidential Election litigation 
in Tallahassee, Florida.
    Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years. 1999, The Bluebonnet Fund 
(Baker Botts Political Action Committee, $522; 2000, The Bluebonnet 
Fund (Baker Botts Political Action Committee, $522; 2001, The 
Bluebonnet Fund (Baker Botts Political Action Committee, $540; 1999, 
George W. Bush, Republican Presidential Primary Campaign, $1000.
    14. Honors and awards: Competitive Appointment to U.S. Naval 
Academy; National Defense Service Medal, U.S. Navy; Virginia Law 
Review; Order of the Coif (top 10 percent of law school class); D.C. 
Bar Best Section Award, Litigation Section Co-Chair, 1999-2000.
    15. Published writings: ``Financial Services Modernization: A Cure 
for Problem Banks?,'' 69 Wash. U.L.Q. 809 (1991).
    ``Enforcement Issues Under the Natural Gas Act of 1938 and the 
Natural Gas Act of 1978,'' 16 Hous. L. Rev. 1025 (1979).
    16. Speeches: None.
    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President?
    I believe I was chosen as a result of my background and experience 
as a lawyer practicing in Washington, DC since 1978. While I have very 
little experience with the substantive issues presently before the 
Department of Transportation, I have substantial experience in the 
principles of administrative law, which establish the legal framework 
within which the Department acts. The majority of my practice has 
consisted of litigation involving the Federal Government, and in the 
course of that practice, I have become familiar with the procedural 
requirements governing executive branch actions, and with the 
Congressional oversight process. Also, for a number of years, I have 
served as outside counsel to the FDIC in a variety of litigation 
matters, and through that representation, I have gained an 
understanding of the unique policy and legal constraints under which 
governmental entities operate.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment?
    In a general sense, my experience and training to date have been 
directed toward solving practical problems through the legal process. 
The skills that I have developed in listening, analyzing and creative 
problem solving seem to be useful skills for the position to which I 
have been nominated. I have learned to handle substantial matters, 
under considerable pressure, to understand and respect opposing points 
of view, and to set and keep deadlines. As a result of my litigation 
experience, I am also accustomed to mastering new substantive topics 
quickly, and to isolating the essential points and achieving results. 
More specifically, since 1986, I have represented the FSLIC, the RTC, 
and the FDIC in various types of litigation matters, and through that 
experience I have become familiar with many of the generic legal issues 
facing governmental entities, such as FOIA, Privacy Act and Sunshine 
Act matters, Federal employee EEO matters, government contracting 
disputes, interpretation of statutes and regulations, enforcement 
issues, Federal Tort Claims Act matters, and interagency issues. 
Through my representation of the FDIC, I have also learned to 
understand and respect the special ethical and policy considerations 
that government attorneys must take into account in everything they do. 
In the course of my practice, I have also assumed various management 
responsibilities, and currently serve as the head of the Litigation 
Practice Group, consisting of 40 lawyers and 7 legal assistants, in my 
firm's Washington, DC office.
                   B. Future Employment Relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? Yes.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm; association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.
                   C. Potential Conflicts of Interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers.
    I have no such arrangements or agreements with any entity except 
those described in my answer to Part G, item 7, below.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    Please refer to Acting General Counsel Opinion Letter.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    Please refer to Acting General Counsel Opinion Letter. In addition, 
during 1995-1996, I served as lead counsel in one case against the 
Department of Transportation, Mesa Air Group, Inc. v. Department of 
Transportation, 87 F.3d 498 (D.C. Cir. 1996). That case concluded in 
1996, and I have had no relationship with either Mesa Air Group or the 
Department of Transportation since that date, until my nomination to be 
the General Counsel.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy. None.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    Please refer to the Acting General Counsel Opinion Letter.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.
                            D. Legal Matters
    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a compliant to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any Federal, State, or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details. No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. None.
                     E. Relationship With Committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? Yes, to the 
best of my ability.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes, to the best of my ability.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? Yes, to 
the best of my ability.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress.
    If confirmed, I expect that one of my primary responsibilities as 
General Counsel would be to supervise and if necessary improve the 
rulemaking process within the Department. I would expect that I would 
be closely involved in all major rulemaking efforts, with the goal of 
ensuring that all rules issued by the Department comply with the letter 
and the spirit of the laws passed by Congress. As part of that process, 
I would expect to receive and consider communications from Congress, to 
the extent permitted by law.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives.
    The Department's No. 1 mission with respect to every mode is to 
promote safety. Other missions include, in general, the need to 
maintain and improve the transportation infrastructure, increasing 
transportation efficiency and capacity, thereby relieving 
transportation congestion, the regulation of transportation modes as 
necessary to maintain safety and protect the public interest, and the 
appropriate balancing between development of transportation systems and 
the protection of the environment. Additionally, the Coast Guard 
patrols our borders and interdicts illegal drug shipments and conducts 
migrant interdiction activities. The Maritime Administration promotes a 
healthy merchant marine in support of the defense posture of the United 
States.
    6. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                  F. General Qualifications and Views
    1. How have your previous professional experience and education 
qualified you for the position for which you have been nominated?
    See response to Part A, items 17 (a) and (b) above.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    First and foremost, I have a genuine desire to be of service to the 
United States. The actions of the Department of Transportation have a 
direct impact on the daily lives of the American people, and I would be 
honored to play a role in helping to shape those actions. In addition, 
I enjoy new challenges, and I believe that the position of General 
Counsel would be both intellectually challenging and professionally 
stimulating.
    3. What goals have you established for your first 2 years in this 
position, if confirmed?
    If confirmed, my immediate short term goal will be to learn the 
basic statutory and regulatory requirements applicable to the 
operations of each of the operating administrations, and to master the 
legal requirements that relate to the most important current issues in 
each mode, to enable me to provide meaningful and helpful legal advice 
to the Secretary and other officials within the Department. Longer 
term, I expect to devote substantial time and attention to the 
Department's process for developing and promulgating regulations 
implementing the intent of Congress, with the goal of reducing the 
delays in that process to the maximum extent possible, consistent with 
all requirements of existing law. I also hope to assist in the process 
of reducing congestion in all of the transportation modes, with an 
immediate focus on air travel congestion, while maintaining the highest 
standards of safety. Associated with the problem of air travel 
congestion is the problem of consumer complaints, and I would hope to 
investigate and work out measures that would alleviate the root causes 
of the increasing numbers of complaints received by the Department.
    4. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills?
    The most significant area in which I currently feel deficient is in 
my knowledge of the substantive law governing the operations of the 
Department and its operating administrations. While I feel that I have 
sufficient knowledge of the general procedural requirements applicable 
to governmental action, I presently have little knowledge of the 
detailed statutes that set forth the intent of Congress with respect to 
the specific programs administered by the Department, and the 
regulations the Department has issued to implement those statutes. Over 
the past month, I have begun to address that deficiency by studying, 
asking questions and listening, and if confirmed, I intend to devote a 
portion of each day to the process of learning the applicable law.
    5. Who are the stakeholders in the work of this agency?
    Based on my current understanding of the work of the Department, 
the primary stakeholders are the American people, virtually all of whom 
have significant personal and economic interests in the safety and 
efficiency of our transportation systems. Other stakeholders, all of 
whom have major roles in improving the overall quality of our 
transportation systems include Congress, the States, local governments, 
commercial businesses that provide transportation goods and services, 
and those who are involved in construction and operation of the various 
parts of our transportation network.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 5?
    If confirmed, my role as General Counsel would be to ensure that 
officials of the Department observe all applicable legal requirements 
in considering the views of the stakeholders identified above, and give 
those views appropriate weight in making decisions affecting the 
operations of the Department. In balancing the views of various 
stakeholders, the Department should be guided by the intent of Congress 
as expressed in the statutes applicable to the Department's operations.
    7. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls?
    If confirmed, I would be responsible as General Counsel for 
ensuring the Department's compliance with all Acts of Congress, 
including the Chief Financial Officers Act. While my authority and 
ability to direct specific actions in areas of management and 
accounting would be limited, I would be responsible for advising 
Departmental officials of the requirements of the Act and for assisting 
in the development of any necessary measures to ensure compliance. I 
would do so to the best of my ability.
    (b) What experience do you have in managing a large organization?
    My management training and experience began, in a very small way, 
on my first day at the U.S. Naval Academy, and my primary roles during 
my subsequent service as an officer in the Navy were to lead and 
manage. While I did not manage large numbers of people, I learned to 
lead by example, to instill a sense of common purpose and pride in the 
organization, to earn the respect of my subordinates by learning the 
details of their work, and to value the contributions of all.
    I have practiced law since 1978 at the law firm of Baker Botts, 
L.L.P., where I am currently the head of the Litigation Practice Group 
in the Washington, DC office. The Litigation Practice Group consists of 
approximately 40 lawyers and seven legal assistants. Over the course of 
the past 20 years, I have had various other management responsibilities 
within the firm, serving as hiring partner for the Washington office 
for 9 years, serving on the firm-wide strategic planning committee, 
serving on the firm-wide compensation committee, and serving on various 
ad hoc budget and marketing committees. I have a strong interest in law 
firm management, and I have served on the Steering Committee of the Law 
Practice Management Section of the D.C. Bar for several years, serving 
as Co-Chair of the Section during 2000-01. While no law firm experience 
can compare to the management challenges presented by government 
service, I believe that I am adequately prepared to assume the 
management responsibilities associated with the position of General 
Counsel of the Department.
    8. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals.
    Performance goals and required reports are a valuable tool for both 
Congress and the Department. For Congress, the requirement to establish 
goals and report results provides a concrete way to assess an agency's 
effectiveness in carrying out its missions. The required reports also 
provide a way for Congress to identify specific problem areas at an 
early stage. For the Department, the establishment of performance goals 
is beneficial because the process of developing those goals requires 
the Department to consider, discuss and decide among competing 
priorities and possible policy choices and formulate an integrated and 
coherent plan for achieving its objectives. In addition, the 
requirement to submit reports is useful as a catalyst for establishing 
internal deadlines in the organization and ensuring that necessary 
actions move forward as expeditiously as possible. The preparation of 
required reports also serves as a focus for a periodic internal 
evaluation of the Department's performance, and as an additional 
incentive to maintain proper management and supervision over the 
Department's activities.
    (b) What steps should Congress consider taking when an agency fails 
to achieve its performance goals? Should these steps include the 
elimination, privatization, downsizing or consolidation of departments 
and/or programs?
    Congress has an important oversight role in reviewing the 
performance of executive branch agencies. Where an agency has failed to 
achieve its goals, an important first question should be whether the 
agency has sufficient resources to achieve those goals. If so, then the 
focus should be on whether the agency has been granted, and has 
exercised, the necessary legal authority to carry out its missions and 
achieve its goals. If so, then the agency's operations should be 
reviewed to determine the fundamental causes of the agency's inability 
to perform satisfactorily. While it is beneficial to review 
periodically the need for and nature of government programs, 
elimination, downsizing, privatization or consolidation would seem to 
be solutions of last resort, to be undertaken only where there is 
sufficient consensus that the original purposes of the agency are no 
longer necessary in the public interest, or that the agency no longer 
has the ability to perform its assigned mission.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    The performance of the General Counsel should be evaluated in at 
least three areas. First, as Chief Legal Officer of the Department, the 
General Counsel should give sound, clear and timely legal advice to the 
Secretary and other Departmental employees, helping the Department to 
achieve its operational and policy goals in implementing the statutes 
adopted by Congress. Second, as a manager within the Office of the 
Secretary, the General Counsel has a responsibility to monitor the 
professional training, advancement and recruitment of the legal staff. 
Third, as the officer within the Department who has the final 
responsibility for legal interpretations, the General Counsel should 
ensure that, to the best of his or her ability, the actions of the 
Department in interpreting its statutory authority are consistent with 
both the letter and the spirit of the intent of Congress.
    9. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    I believe that supervisor/employee relationships should be 
professional, but as informal as possible while maintaining a 
businesslike atmosphere. I have always tried to treat others as I would 
like to be treated, with respect and consideration. I follow a 
supervisory model that stresses teamwork, open and frequent 
communications, and inclusion and consideration of all views and ideas 
in the decisionmaking process. I give credit for successes to my 
subordinates, and assume responsibility for problems myself. No 
employee complaints have ever been brought against me.
    10. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe.
    I have no past experience in working with Congress. If confirmed, I 
would hope to develop a cooperative and professional working 
relationship, to ensure that the concerns of the committees and of 
individual Members are promptly and effectively addressed.
    11. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    I believe that the proper relationship between the General Counsel 
of the Department and the Inspector General is one of independence and 
mutual respect. While the General Counsel is the final authority on 
legal issues within the Department, the Inspector General is free to 
disagree, and is expressly authorized to investigate and make 
recommendations. As a matter of course, I believe the General Counsel 
should cooperate fully with the Inspector General at all times, and 
should make every effort to implement recommendations of the Inspector 
General regarding matters within the scope of the General Counsel's 
authority. If confirmed, I would hope to establish a close working 
relationship with the Inspector General and work cooperatively with the 
common goal of improving the operations of the Department.
    12. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
    As the Chief Legal Officer of the Department, one of the General 
Counsel's primary responsibilities is to ensure that all of the 
Department's actions are authorized by law, and consistent with both 
the letter and the spirit of the statutes passed by Congress. If 
confirmed, I will work closely with Members of the Committee and other 
stakeholders to ensure that their views as to the intent of Congress 
are given appropriate weight.
    13. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views.
    With respect to the Department of Transportation, I believe that 
safety issues should always be the highest priority. Presently, issues 
relating to congestion, particularly with respect to automobile and air 
travel, also are extremely significant, and modernization of the 
transportation infrastructure is a long term goal. Finally, to achieve 
those priorities, Congress should ensure that sufficient funding levels 
are appropriated and authorized.
    14. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation.
    Yes, to the extent such matters are within my authority as General 
Counsel. If confirmed, my primary role in this area will be to advise 
the senior staff of the Department. I would begin to do so immediately, 
to the extent I am involved in decisionmaking regarding discretionary 
spending.

    The Chairman. Very good.
    Mr. Rutter.

         STATEMENT OF JON ALLAN RUTTER, NOMINEE TO BE 
             ADMINISTRATOR OF THE FEDERAL RAILROAD 
                         ADMINISTRATION

    Mr. Rutter. Thank you, Mr. Chairman. I am incredibly 
honored to have the confidence of the President in being 
nominated to this important position. I worked for him as his 
Transportation Policy Director for 6 years when he was Governor 
and it was the most rewarding period of my career. He is a good 
boss and a great man.
    I am also grateful to be part of the exceptionally capable 
team being assembled at the Department by Secretary Mineta. My 
professional career has always been about transportation and I 
was eager to accept a position that would allow me to work 
alongside someone who has such a passion for better 
transportation. I am looking forward to building on my 
experiences in Texas with freight and passenger rail issues.
    I am honored to be associated with the hard-working 
professionals at the Federal Railroad Administration. I have 
met many of them in the past few weeks and am impressed with 
their devotion to their work. Should I be given the chance, I 
look forward to working with such talented individuals and to 
meeting many more of them throughout the country.
    I am happy that my wife, Melanie, is here with me this 
morning. When I talk about my better half, I refer to the 
second half of my life that I have spent with her, for she has 
made me a better person. She is a gifted school teacher and a 
blessing to our daughters Sarah and Elizabeth.
    I am proud to have been chosen by the President and the 
Secretary, but I am even more proud to be a husband and father 
to my family, for they have been willing to join me on this new 
adventure in their lives.
    Well, by the time most speakers say ``I will be brief'' it 
is usually too late, and so I will simply mention three things 
that will be important to me should I be given the honor of 
being confirmed.
    First, I want to continue the work of rail labor, rail 
management, and the FRA in making railroads safer for those who 
work on them and for the communities through which railroads 
travel. While progress has been made, there remains work to be 
done. Safety is going to be my most important priority if 
confirmed in this position.
    Second, I want to be an advocate for the value of freight 
railroads in the nation's transportation system. As highway 
capacity remains constrained, I hope to work with railroads to 
see that they take advantage of market opportunities to grow 
their business, which will benefit our nation's transportation 
network and our economy.
    Third, I look forward to being given a chance to work with 
Secretary Mineta, the Bush Administration, and Congress in 
developing a national passenger rail policy as this Committee's 
1997 Amtrak reform legislation reaches its conclusion.
    I have been a public employee all my life and I know, 
though this job is going to be important, but it is not as 
important as yours. I respect the fact that you are elected and 
I am not. I hope to have the confidence of this Committee and 
also hope this morning can be the beginning of a productive 
working relationship with Committee Members and staff.
    I have enjoyed visiting with many of the Committee Members 
and will, if confirmed, be responsive to each of you whenever 
you need me.
    Thank you.
    [The prepared statement and biological information of Mr. 
Rutter follow:]

Prepared Statement of Jon Allan Rutter, Nominee to be Administrator of 
                  the Federal Railroad Administration
    Thank you Senator Hutchison, for the kind introduction and thank 
you Chairman Hollings for giving me the opportunity to visit with the 
Committee this morning.
    I am incredibly honored to have the confidence of the President of 
the United States in being nominated to this important position. I 
worked for our President as his transportation policy director for 6 
years when he was Governor of Texas, and it was the most rewarding 
period of my career. He's a great boss and a great man.
    I am also grateful to be part of the exceptionally capable team 
being assembled at the Department of Transportation by Secretary Norm 
Mineta. My professional career has always been about transportation, so 
I was eager to accept a position that would allow me to work alongside 
someone who has such a passion for better transportation. I am looking 
forward to building on my experiences in Texas with freight and 
passenger rail issues.
    I am honored to be associated with the hard-working professionals 
at the Federal Railroad Administration. I have met many of them in the 
past few weeks. I am impressed with their devotion to their important 
work. Should I be given the chance, I look forward to working with such 
talented individuals and to meeting many more of them throughout the 
country.
    I am happy that my wife Melanie is here with me this morning. When 
I talk about my ``better half,'' I refer to the second half of my life 
that I have spent with this wonderful woman, for she has made me a 
better person. She is a gifted elementary school teacher and a blessing 
to our beautiful daughters, Sarah and Elizabeth. I am proud to have 
been chosen by President Bush and Secretary Mineta, but I am even more 
proud to be a husband and a father for my family, for they have been 
willing to join me on this new adventure in all of our lives.
    By the time most speakers say, ``I'll be brief,'' it's usually too 
late, so I will simply mention three things that will be most important 
to me should I be given the honor of being confirmed as Federal 
Railroad Administrator.
    1. I want to continue the good work of rail labor, rail management, 
and the FRA in making railroads safer for those who work on them and 
for the communities through which the railroads travel. While progress 
has been made, there remains important work to be done. Safety will be 
my most important priority if confirmed to this position.
    2. I want to be an advocate for the value of freight railroads in 
the nation's transportation system. As highway capacity remains 
constrained, I hope to work with railroads to see that they take 
advantage of market opportunities to grow their business, which will 
benefit our nation's transportation network and our economy.
    3. I look forward to being given a chance to work with Secretary 
Mineta's team, the Bush Administration and the Congress in developing a 
national passenger rail policy as this committee's 1997 Amtrak 
legislation reaches its conclusion this coming year.
    I've been a public employee all my life, and while this job I hope 
to have is important, it is not as important as yours. Please know that 
I respect the fact that you are elected and I am not.
    I hope to have the confidence of this committee and also hope this 
morning can be the beginning of a productive working relationship for 
us all. I have enjoyed visiting with many of you on this committee and 
will, if confirmed, be responsive to each of you whenever you need me 
in the future. Thank you.
                                 ______
                                 
                      A. Biographical Information
    1. Name: Jon Allan Rutter.
    2. Position to which nominated: Federal Railroad Administrator.
    3. Date of nomination: May 14, 2001.
    4. Address: Not released to the public.
    5. Date and place of birth: 11/19/58, Austin, Travis County, Texas.
    6. Marital status: Married. Melanie Kaye Moore, May 28, 1983.
    7. Names and ages of children: Sarah Michele Rutter, 15; Elizabeth 
Francis Rutter, 13.
    8. Education: (List secondary and higher education institutions, 
dates attended, degree received and date degree granted.)
    Lyndon B. Johnson School of Public Affairs, University of Texas at 
Austin, attended August 1981 to May 1983, graduated with a Master of 
Public Affairs, December, 1985; University of Texas at Austin, attended 
August 1997 to May 1981, awarded Bachelor of Arts, May 1981; Westlake 
High School, Austin, Texas, attended August 1972 to May 1977, graduated 
May 1977.
    9. Employment record: Transportation Policy Director, Governor's 
Policy Office, Austin, Texas, March 1995 to April 2001; Deputy 
Executive Director, Texas High-Speed Rail Authority, Austin, Texas, 
March 1990 to February 1995; Senior Budget Analyst, Governor's Office 
of Budget and Planning, Austin, Texas, November 1985 to March 1990; 
Assistant Committee Clerk, Texas House Committee on Transportation, 
Austin, Texas, October 1984 to November 1985; Warehouse/Sales, Import 
Building Products (tile retailer) Austin, Texas, January 1984 to 
October 1984; Delivery Driver/Sales, Sheridan, Inc. (delivery company) 
Austin, Texas, September 1983 to January 1984.
    10. Government experience: Legislative Intern, Texas House 
Committee on Transportation, Spring, 1983; Texas State Senate 
Messenger, Texas State Senate, Spring 1981; Clerk, Texas Health 
Department, Bureau of Vital Statistics, Summers, 1978-1980.
    11. Business relationships: None.
    12. Memberships: I belong to a Southern Baptist Church, Hyde Park 
Baptist Church, Austin, Texas, and have been a member since May 1998. I 
currently teach an Eighth Grade Boys Sunday School Class, and have 
worked in the Eighth Grade department for 2 years. Prior to moving my 
membership to Hyde Park, I belonged to First Baptist Church, Austin. At 
First Baptist, I was a deacon, Chairman of the Board of Deacons in 
1994. I had also served as a Sunday School Teacher (College Department, 
Adult Couples VI Department) and member of various committees 
(Committees: Budget Preparation (Vice-Chair), Health and Safety Policy 
Task Force (Chairman), Personnel, Worship). No other memberships.
    13. Political affiliations and activities: (a) List all offices 
with a political party which you have held or any public office for 
which you have been a candidate. None.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. None.
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years. None.
    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognitions for outstanding service or achievements.) 
None.
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) None.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated.

------------------------------------------------------------------------
                                                       Group Requesting
         Date of Speech                Location             Speech
------------------------------------------------------------------------
February 2001...................  Austin, TX........  Southwest Movers
                                                       Association
                                                       Quarterly
                                                       meeting.
October 2000....................  Laredo, TX........  Camino Colombia
                                                       Toll Road
                                                       Corporation
                                                       groundbreaking.
September 1998..................  Kerrville, TX.....  Texas Motor
                                                       Transportation
                                                       Association
                                                       Safety Management
                                                       Council Fall
                                                       meeting.
September 1998..................  San Antonio, TX...  San Antonio
                                                       Transportation
                                                       Association
                                                       monthly meeting.
July 1998.......................  Austin, TX........  Texas Good Roads/
                                                       Transportation
                                                       Association
                                                       Annual Meeting.
April 1998......................  Houston, TX.......  Texas Public
                                                       Transportation
                                                       Conference.
April 1997......................  Austin, TX........  Welfare to Work
                                                       Summit
------------------------------------------------------------------------

    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President?
    I was chosen for this position: (1) Because the President was aware 
of my professional abilities when I worked for him as Governor of 
Texas; (2) Because of my interest in rail transportation; and (3) 
Because of my ability to work effectively with elected officials, 
administrative officials and constituents.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment?
    Most of my professional career has been spent studying and 
implementing transportation policy. My experiences with passenger and 
freight rail issues will help me address challenges facing the Federal 
Railroad Administration. My other experiences with other modes of 
transportation will give me a balanced perspective in considering the 
impacts of rail policies on the transportation system as a whole.
                   B. Future Employment Relationships
    Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? Yes.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes, to the 
best of my ability.
                   C. Potential Conflicts of Interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. None.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    Please refer to the Assistant General Counsel Opinion letter.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated. None.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy. None, other than 
the exercise of my duties as Policy Advisor to the Governor, in which I 
have been expected to offer information for State legislators and 
Members of Congress regarding the Governor's agenda.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.)
    Please refer to the Asistant General Counsel Opinion letter.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.
                            D. Legal Matters
    Have you ever been disciplined or cited for a breach of ethics for 
unprofessional conduct by, or been the subject of a compliant to any 
court, administrative agency, professional association, disciplinary 
committee, or other professional group? If so, provide details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any Federal, State, or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details.
    In 1991-2, I was a member of the staff of the Texas High-Speed Rail 
Authority, and in that capacity, testified in a State district court 
proceeding brought by Southwest Airlines to rescind the award of a 
franchise to finance, construct, maintain and operate a high-speed 
passenger rail system in Texas.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. None.
                     E. Relationship With Committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information?
    Yes, to the best of my ability. In the event such requests are 
difficult to meet (for any number of reasons), I pledge to work with 
the Committee staff to discuss means by which to respond appropriately 
to the Committee's requests.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures?
    Yes, I will ensure that the Federal Railroad Administration 
complies with its legal obligations to protect those who testify from 
any subsequent discrimination or treatment related to that testimony.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee?
    Yes, I will work with Committee staff to arrange for witnesses from 
the FRA who can provide expertise for the Committee.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress.
    I will do my best to ensure that FRA staff carefully considers the 
full legislative record of laws that require promulgation of rules by 
the agency. While the Administrative Procedures Act may limit the 
amount of direct communication about the rules, I will do my best to 
provide Congress with information on the timing and substance of 
rulemaking proceedings begun in response to legislation. I will also 
work with Secretary of Transportation to apply best practices in 
administrative procedures in other Federal agencies in quickening the 
completion of FRA rules.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives.
    The agency's current mission statement is: The Federal Railroad 
Administration promotes safe, environmentally sound, successful 
railroad transportation to meet current and future needs of all 
customers. We encourage policies and investment in infrastructure and 
technology to enable rail to realize its full potential.
    The agency has the following major programs: Promulgation of rules 
and regulations to promote safe operations of the nation's railroads; 
Inspection and enforcement of those regulations; Providing financial 
and technical assistance for high-speed passenger rail systems; 
Providing financial assistance to Amtrak; Administrative and managerial 
support of these programs.
    6. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes, to the best of my ability.
                  F. General Qualifications and Views
    1. How have your previous professional experience and education 
qualified you for the position for which you have been nominated?
    (a) Working in the Governor's office has prepared me to work with 
all governmental levels. This helps me realize that solving problems 
usually requires cooperation among government agencies. (b) My 
education helps me understand public sector bureaucracy--its culture, 
its language, its mores. That will help me get things done. (c) Working 
in Texas has exposed me to a wide scope of transportation--tens of 
thousands of miles of highways, rail lines and pipelines, deep water 
ports, international ports of entry. This will help me understand the 
role rail plays in an efficient multimodal transportation system. (d) 
My experience involves an appreciation for safety. I have worked 
closely with legislators, agency officials, and private sector groups 
to carefully consider State policies to improve safety of the surface 
transportation network. My experience in State worker's compensation 
administration also helps me understand the personal consequences of 
safety practices. This will make transportation safety a paramount 
personal concern.
    2. Why do you wish to serve in the position for which you have been 
nominated?
    (a) I want to serve the President. After working for him for 6 
years, I enjoyed working for him and look forward to doing so again. I 
consider this nomination the most important thing I've ever been asked 
to do. (b) I want to work with the team the President has assembled at 
USDOT. Given the reputation of the Secretary and Deputy Secretary, I 
know that my professional stature would be enhanced just by being 
associated with them. Having met with them, I know that I will be a 
better person for getting the chance to work alongside them. (c) I want 
to work with the freight rail industry. Freight railroads, along with 
pipelines, are the segment of the nation's transportation system that 
we fully entrust to the private sector. I have enjoyed working with the 
people involved in this business (the ones who run the companies and 
the ones who work for them) and look forward to making a positive 
difference for the movement of goods through maximizing the 
effectiveness of our rail system. (d) I look forward to contributing to 
the significant change in national passenger rail policy that will come 
in the next 2 years. Amtrak's looming financial deadlines and the 
increasing interest by States in pursuing incremental higher speed rail 
operations will lead to fundamental choices about the role of the 
Federal Government in passenger rail systems.
    3. What goals have you established for your first 2 years in this 
position, if confirmed?
    (a) Maintain the momentum of the previous 5 years in keeping rail 
accidents and fatalities to a minimum. (b) Improve the efficiency of 
the freight rail network. (c) Reauthorize the rail safety program. (d) 
Participate in the development of a national passenger rail policy. (e) 
Accelerate the FRA's rulemaking cycle.
    4. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills?
    I will work with experienced managers within the agency and within 
the department to accelerate my understanding of the particular 
financial and administrative practices of the Federal Government.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when should society's 
problems be left to the private sector, and what standards should be 
used to determine when a government program is no longer necessary.
    Governments serve best when they enforce democratically enacted 
laws to provide justice in personal and contractual relationships, to 
promote safety of persons and communities, and to offer persons 
educational opportunities to choose their own destinies. We can choose 
to exercise compassion for those in need through governments and other 
social organizations.
    Governments should exercise healthy humility and creativity. 
Governments should realize that problems are usually more complicated 
than they seem, and that some solutions may cause unintended negative 
consequences. Governments should freely innovate and experiment in 
small steps, much like planting perennials rather than redwoods, so 
that good results can be replicated and mistakes easily erased.
    I close with some observations about some of the characteristics of 
government programs that may no longer be necessary: No one can say 
when the program was started, who was responsible for starting it, what 
the program's goals were when started, or whether the program has ever 
accomplished or is close to accomplishing those goals; A program may 
have been authorized but never funded; The beneficiaries of the program 
have independent resources to accomplish the program's objectives by 
their own actions; A program may manipulate individual behavior in a 
manner that subverts other public policy goals.
    6. In your own words, please describe the agency's current 
missions, major programs, and major operational objectives.
    The agency's most important mission is to protect the safety of the 
nation's rail system. This means to enhance the safety of goods 
transport for communities and environments through which railroads 
pass, the safety of rail passengers, the safety of those who work on 
and around railroads, and the safety of those who come into contact 
with the rail system.
    The agency's major safety mission is carried out by the hundreds of 
Federal employees who inspect and support the inspection of the rail 
system. The agency works with stakeholders to graft common-sense 
regulations to advance the interests of public safety. The agency 
explores technologies and strategies to reduce crashes at highway-rail 
grade crossings. The agency also works with states interested in 
implementing improvements to their passenger rail systems, leading to 
higher speed rail passenger services. The agency also provides 
financial assistance to Amtrak and to freight railroads.
    Objectives: The FRA seeks to reduce the frequency and severity of 
accidents on the rail system; The agency encourages increased 
efficiency of the rail system for those who use into transport people 
and goods; The administration will work to make further progress on 
reducing crashes at grade crossings and reducing tresspassing on rail 
properties; The agency will provide technical and policy assistance to 
persons and governments wishing to implement passenger rail 
improvements.
    7. In reference to question No. 6, what forces are likely to result 
in changes to the mission of this agency over the coming 5 years?
    Events in the short term are likely to affect the FRA's mission by 
offering opportunities for Congress and the Administration to alter its 
mission: Reauthorization of the Federal rail safety program; Amtrak's 
impending financial self-sufficiency deadlines; State pressure for 
higher speed passenger rail services; Surface transportation program 
reauthorization.
    8. In further reference to question No. 6, what are the likely 
outside forces which may prevent the agency from accomplishing its 
mission? What do you believe to be the top three challenges facing the 
department/agency and why?
    In a competitive job market, it will be difficult to attract and 
retain highly competent employees to accomplish the agency's mission. 
Agencies with higher turnover suffer productivity and financial losses.
    Rail safety results will depend on financial investments by rail 
companies and on infrastructure investments by State and local 
governments (grade crossing protection).
    The FRA must plan for the consequences of an aging workforce at the 
agency. Losing competencies and history may affect the agency's ability 
to accomplish its mission with available staffing allocations.
    The agency needs to marshal sufficient intellectual firepower to 
address serious issues on improving freight railroad financial strength 
and in considering alternatives in passenger rail policy. Either within 
the agency or under contract to the agency, the FRA needs resources to 
conduct research to support the agency's mission.
    9. In further reference to question No. 6, what factors in your 
opinion have kept the department/agency from achieving its missions 
over the past several years?
    By most measures, the FRA has been doing a good job of reducing 
frequency and severity of rail accidents. While I reserve the ability 
to correct problems where I might see them, I am more concerned about 
improving agency operations and meeting organizational objectives.
    10. Who are the stakeholders in the work of this agency?
    Please refer to No. 11 below.
    11. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 10?

------------------------------------------------------------------------
                                                 FRA Administrator's
      Stakeholders in the work of FRA             relationship with
                                                    stakeholders
------------------------------------------------------------------------
The administration and Members of Congress  Advise when requested or
                                             when I think it is
                                             relevant; and follow
                                             instructions, particularly
                                             those enacted in law.
FRA's management and employees............  Lead, coach, advocate and
                                             listen.
Management and stockholders of rail         Partner in bringing about a
 companies.                                  healthy, vibrant rail
                                             industry; lead in
                                             accomplishing safety
                                             objectives.
Employees of rail companies and the         Listen to concerns and
 organizations that represent them.          foster cooperative efforts
                                             to work for jobs and
                                             workplace safety.
State and local governments who invest in   Partner and assist, rather
 rail passenger services and in grade        than dictate and control.
 crossing protection.
Citizens throughout the country who live    Listen, educate and respond.
 near or travel across rail lines.
Consumers and businesses whose goods are    Consider the implications of
 delivered in whole or in part by rail.      policies on users of the
                                             rail system.
------------------------------------------------------------------------

    12. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls?
    I will work closely with the USDOT's Chief Financial Officer to 
ensure that FRA is complying with agency financial plans and with 
statutory requirements. As Administrator, I would be responsible for 
ensuring that taxpayers can clearly see that their tax dollars are 
being used carefully, prudently and efficiently in carrying out the 
missions of the agency.
    (b) What experience do you have in managing a large organization?
    In advising four Governors on transportation issues, I worked 
closely with the executive management and appointed leadership of the 
Texas Department of Transportation. Many times, it was my job to get 
the Department to do something the Governor wanted done. In this 
capacity, I exercised management discretion to: Discern which level of 
management was appropriate to engage; Delegate tasks for someone else 
to accomplish (and follow up on that delegation); Decide when an issue 
required agency-wide action or policies and when an issue could be 
resolved independently; and Discover relevant information on 
identification of a problem and exercise judgment in deciding whether 
the solution required action within or outside the agency.
    13. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals.
    I think the goal-setting and reporting process offers benefits both 
to the Congress and to the FRA. For Congress, this offers 
accountability on the issues that matter most. For the agency, this 
provides a clear direction to follow and a clear standard by which to 
measure progress.
    (b) What steps should Congress consider taking when an agency fails 
to achieve its performance goals? Should these steps include the 
elimination, privatization, downsizing or consolidation of departments 
and/or programs?
    This is obviously a matter of Congressional discretion. However, I 
would work with the FRA's authorizing and appropriating committees in 
both the House and Senate to work together to diagnose the problems and 
prescribe solutions. Consistent failure to achieve goals would require 
longer-term solutions, such as change in management, outsourcing or 
consolidation of functions.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed?
    I will do my best to ensure that agency performance goals are met; 
Be responsive and helpful to the Administration and to Members of 
Congress; Maintain high standards of ethical probity and personal 
integrity; Be available to stakeholders; Strive to learn about the 
agency and the issues we address by seeing firsthand (to the extent 
possible and financially feasible) how things work.
    14. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you?
    I will strive to learn enough about persons under my direct 
supervision to know how they will function best--who needs degrees of 
freedom and who needs closer supervision. I recognize that all people 
are individuals and will work to provide a working environment that 
allows people the freedom to achieve and create. I will instill a sense 
of professionalism among every layer of the organization, and will try 
to create opportunities for personal advancement and growth.
    I am not aware of any employee complaints that have been brought 
against me directly.
    15. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe.
    As Transportation Policy Director for Governor Bush, I worked with 
the Texas congressional delegation (mainly at the staff level, and with 
the assistance of Washington-based State employees from the Texas 
Office of State-Federal Relations and the Texas Department of 
Transportation). During the 6 years I worked for Governor Bush, I spent 
the most hours providing congressional staff with information on the 
Governor's ISTEA/TEA-21 reauthorization priorities. I also worked with 
congressional offices on NAFTA trade corridors, border crossing issues, 
and port and waterway matters.
    I have worked closely with members of the Texas Legislature for 
most of my professional life. While I recognize the vast difference in 
responsibilities between that body and Congress, I also realize there 
are similarities. I have experience helping legislators resolve 
problems for their constituents, and will work to help Members of 
Congress similarly in FRA matters. I understand that you have been 
elected and I have not.
    16. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency.
    I will work with the Secretary and Deputy Secretary to cooperate 
with the Inspector General's investigations and to solve problems he 
identifies. The Inspector General has prepared some valuable reports on 
matters under the jurisdiction of FRA, and I will strive to work 
closely with him and his staff to take advantage of their expertise and 
seek their advice.
    17. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
    The title ``Administrator'' implies that I will respond to 
direction given to me by others (those who administer give feet to the 
ideas and direction of others). In this case, I would be responding to 
instructions from the Executive branch and from the Legislative branch. 
I would also seek to instill an organizational culture within the FRA 
that sought and valued contributions from all stakeholders.
    18. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views.
    Reauthorization of the Federal rail safety programs; Development of 
a national passenger rail policy and identification of organizational 
and intergovernmental structures to achieve those policy objectives; 
Consideration of rail issues during surface transportation 
reauthorization in 2003.
    19. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation.
    Yes, I will to best of my ability. Some of my ability to distribute 
program funds in an open fashion based on established criteria will 
depend on the actual freedom afforded me by the annual appropriations 
process.

    The Chairman. Thank you.
    Ms. Engleman, relative to pipeline safety, a recent 
article, a report last year by the General Accounting Office 
found that the number of major pipeline accidents, defined as 
those involving death, injury, or property damage, rose by 4 
percent a year during the 1990s. Then it goes on to relate: 
``In recent years, Federal regulators have sharply curtailed 
the use of fines as an enforcement tool.'' What are your 
thoughts relative to fines?
    Ms. Engleman. Well, sir, I believe also in that GAO report 
it indicated the 4 percent increase in pipeline accidents and, 
while it was to some degree augmented by the fact that there 
was a 10 percent increase in overall pipeline mileage and 
population growth near the pipelines, that does not change the 
fact that the accidents are increasing.
    I think it is incredibly important to enforce the rules and 
regulations that we have in place stringently. When we create 
rules and regulations, there should be open communication. Once 
they are in place, they should be strictly enforced. I am 
inspired by the fact that RSPA just 2 days ago announced a 
$2.52 million fine against El Paso Pipeline in Texas for the 
Carlsbad, New Mexico, accident, which you know occurred in 
2000. That was a natural gas explosion that took over 12 lives 
in an extended family, including 2 6-year-old twins.
    This cannot occur, and when we have these problems we 
should use every possible means of enforcement, education, and 
have people understand that when accidents happen consequences 
will follow.
    The Chairman. Very good.
    Mr. Van Tine, prior to Secretary Mineta coming on board, we 
had a hearing relative to this fracas going on between Ford and 
Firestone on tires and safety. We looked up and found at the 
Committee level over at NHTSA, the National Highway 
Transportation Safety Administration, that in the last 5 years, 
for example, on vehicles there had been some 99 million 
recalls. Quite a figure. Yet at the same time, all were 
voluntary, none directed by NHTSA itself.
    See if you can help wake up that organization, because 
right now they are arguing whether the tires are safe or not 
safe being replaced, and it is taking weeks to find out and 
everything else. They ought to have that on the record 
immediately, right now.
    I do not know what they do, just eat and sleep and run out 
and investigate and then eat and sleep some more and wait for 
other things to happen, and then run out again and investigate. 
This crowd is crazy up here about investigations, but nothing 
about doing their work.
    Mr. Van Tine. Mr. Chairman, within the past couple of weeks 
I have gotten around to the Chief Counsels' offices in each of 
the operating administrations and I have met all of the lawyers 
who work at NHTSA and I have a sense of what they do, and they 
do do a little more than eat and sleep.
    But Dr. Runge has been nominated to be the new 
Administrator of NHTSA, and I will commit to you that I will 
work with him and his Chief Counsel to ensure that NHTSA 
carries out its responsibilities in a forceful manner.
    The Chairman. Then on one other score, predatory pricing. 
You are familiar with the recent American Airlines decision, 
and it appears to this Senator if there ever was predatory 
pricing, in that case it was just that. There is a technicality 
in antitrust law, Robinson-Patman, in pricing, and we do not 
have that technicality with the Department of Transportation. 
You have got the authority to issue guidelines on what the 
Department constitutes as predatory pricing.
    Will you get onto that immediately, if you do not mind, 
because in addition to controlling all the hubs, where no one 
can get in because they can engage technically in predatory 
pricing, and de facto--I mean, there is not any question about 
it--run out all the competition and continue with the lack of 
service and high pricing and everything else of that kind. It 
is a real job at the committee level here in government to try 
to develop competition in the airline service. But that is one 
of the little things that we need to get onto, and the 
Department has that authority and I hope you will get behind 
that one also.
    Mr. Van Tine. Yes, sir. I know that ensuring and 
maintaining competition is a priority of this Secretary and the 
Deputy Secretary. I have again met the attorneys in the Office 
of General Counsel who specialize in antitrust issues and I 
have spoken with them. I have also met the enforcement 
attorneys in the Office of General Counsel and I can assure you 
again that I will actively pursue the predatory pricing issue 
and look forward to working with you on that, sir.
    The Chairman. Very good. We appreciate the appearance of 
each of you this morning. The record will stay open for further 
questions by the Committee, and we will try our best to move 
your confirmation as quickly as possible.
    Thank you very much. The hearing will be in recess subject 
to the call of the chair.
    [Whereupon, at 10:10 a.m., the hearing was adjourned.]
                            A P P E N D I X

             Prepared Statement of Hon. Richard G. Lugar, 
                       U.S. Senator from Indiana

    I am pleased to have this opportunity to introduce Ms. Ellen G. 
Engleman to the members of the Senate Committee on Commerce, Science 
and Transportation.
    I have known Ellen Engleman since 1990, when she was selected as a 
distinguished member of the first class of the Richard G. Lugar 
Excellence in Public Service Series. This program selects 15 women in 
the State of Indiana each year for leadership training for elected and 
appointed positions in public service.
    After serving as a public affairs executive at GTE in Indianapolis, 
Indiana, Ellen served as a Congressional fellow in my Washington office 
in 1992 where she utilized her excellent research capabilities, 
organizational skills, and writing to make her a vital part of my 
legislative and administrative operation.
    Most recently Ellen has been the President and Chief Executive 
Officer of Electricore, Inc. This is a non-profit research and 
development consortium located in Indiana which develops advanced 
transportation and energy technologies through Federal private/public 
partnerships. Through this consortium Ellen has established herself as 
a thoughtful strategic planner and resourceful director and liaison to 
Federal, private, and academic organizations.
    Ellen's unique background blends experiences from the fields of 
business, transportation, legislation and law. She has used her talents 
and intellect to bring people together for a common cause in order to 
effect positive change. I have always been impressed by her high level 
of dedication and commitment to public service.
    Mr. Chairman, I thank you for this opportunity to introduce Ellen 
G. Engleman to the Committee on Commerce, Science and Transportation.

                               __________

 Response to Written Questions Submitted by Hon. Ernest F. Hollings to 
                            Samuel W. Bodman

    The Advanced Technology Program (ATP) is an industry-led, 
competitive, and cost-shared program to help the U.S. develop the next 
generation of breakthrough technologies in advance of its foreign 
competitors. ATP contracts encourage companies to undertake initial 
high-risk research that promises significant widespread economic 
benefits, although the program does not support product development. 
The National Academy of Sciences' comprehensive report on ATP issued 
earlier this month is the most recent study of this program. Mr. 
Bodman, the Department of Commerce asked to reprogram this year's 
funding for new ATP awards and use that funding in FY 2002. That 
request was denied.
    Question 1. Will you be able to issue the full amount currently 
available for new awards this year?
    Answer. It is my understanding that the Advanced Technology Program 
(ATP) intends to evaluate each batch of applications independently. I 
have been told that fourteen potential awards (Batch 1) are currently 
being reviewed by the ATP selecting official. Unfortunately, it is 
premature to speculate how much money will be spent this fiscal year 
since the Program is conducting its first rolling applications process.
    Question 2. When will you begin to issue new awards?
    Answer. The ATP expects to make its recommendations for Batch 1 to 
the Acting Director of NIST by mid-July. The recommended proposals will 
then be subject to review by Secretary Evans. Finally, these proposals 
will require review by both the legal and grants offices prior to the 
commitment of the funds.
    Question 3. How many rounds of competition will there be and what 
is your timeline for completing the awards process for each round prior 
to the end of the fiscal year?
    Answer. I understand that ATP is conducting technical and business 
reviews for Batch 2 and 3 and it is expected that recommendations to 
the Acting Director of NIST will occur by August 31st. Since the 
rolling submission competition remains open through September, as 
published in the Federal Register, those proposals which are submitted 
after July 10th, Batch 4, will not be evaluated in time to make awards 
during this fiscal year.
    Question 4. Is the United States in danger of losing its ability to 
conduct longer-term research in job-creating technologies, and is this 
a problem in a world where other governments consider it not only 
acceptable but essential to support their industrial technologies?
    Answer. Historically, much of the corporate research and 
development (R&D) funding in the United States focused on longer-term 
technologies. Often, working with universities and the government, in 
the less competitive world economy of the past, American companies 
could afford the research that led to the transistor, fiber optics, 
modern integrated circuits, and biotechnology. In today's very 
competitive economy and very demanding stock market environment, 
however, both large companies and even many venture capitalists must 
focus their limited research dollar on safer, short-term projects that 
will pay off quickly.
    Industry continues to focus more on downstream process and product 
development and away from basic and applied research. Private investors 
are becoming more critical of technically risky research ventures. The 
United States spent $37.9 billion on the performance of basic research 
in 1998, $51.2 billion on applied research, and $138.1 billion on 
development. These totals are the result of incremental increases over 
several years.
    The United States cannot remain complacent while most of our 
industrial competitors, including the European Union, the United 
Kingdom, France, Japan, and Canada have industrial programs designed to 
promote technological development and are increasing their financial 
commitment to them. All of these programs are viewed as appropriate 
vehicles to promote innovation.
    As you are well aware, there is an on-going debate on whether a 
funding gap exists in the United States between basic research and 
innovation. According to Dr. Lewis Branscomb of Harvard University, we 
do not know whether such a gap exists in the conventional sense of the 
word. Yet I believe that in order to remain competitive, it is 
necessary to ensure critical technologies are not lost. To make this 
happen, the United States government should be prepared to utilize 
various partnerships with industry, universities, and its national 
laboratories to conduct the longer-term research vital to U.S. economic 
growth.
    Question 5. Do we need programs such as DOC's Advanced Technology 
Program (ATP) to help American industry stay at the cutting edge?
    Answer. The private sector is facing a set of challenges that did 
not exist when current federal R&D priorities were set: an increasingly 
competitive global economy; shorter product life cycles; and advanced 
technologies being created and adopted by competitors worldwide. For 
example, funding for total research rates the U.S. sixth behind the 
other G-7 industrialized nations. Private investors are, increasingly, 
viewing early stage technology as too risky for investment. Government 
continues its significant and strong support of basic research, and the 
private sector backs downstream developments.
    ATP can fill a critical gap in bringing advanced technologies to 
market, since it cost-shares funding of early stage, applied research 
that companies and private investors consider too risky for captive 
investment. In addition, the ATP catalyzes the formation of strategic 
alliances between industry, universities, and states; partnerships are 
a promising mechanism for competitive growth.
    Question 6. How can you help Secretary Evans and me build support 
for the program?
    Answer. As you know, the Secretary is currently evaluating ATP and 
believes that certain changes could enhance the Program to better serve 
the Nation's needs. If confirmed, I intend to support the Secretary in 
his review and to offer my expertise as a chemical engineer and a 
former chief executive officer to help reform and reshape this valuable 
program.
    Question 7. What should the role of the States be in supporting 
innovation?
    Answer. States currently support innovation in a variety of ways. 
They support technology incubators housed at their universities, 
provide tax relief to companies who choose to locate or relocate to a 
particular state, and often provide seed money for promising 
technologies. Certainly, these efforts are necessary and should be 
encouraged to continue.
    Yet, from a national perspective, this is not enough. Because state 
governments tend to be interested in regional economic development and 
tend to invest in close-to-market solutions, they often miss 
investments in the truly revolutionary technologies that will keep the 
United States at the leading edge. They often ignore possible solutions 
that can only be provided by a national program such as the Advanced 
Technology Program.
                                 carcon
    Question 1. What was Carcon? How did you become involved with the 
company? When did you buy stock in the company and how much stock did 
you purchase? Did you know the other investors in Carcon? Did you ever 
serve as a director of Carcon, or did you ever attend any meetings of 
the Board of Directors?
    Answer. Carcon was a private corporation formed as an investment 
vehicle under the leadership of David Carmichael and William Connors of 
Houston, Texas. I participated in a private offering and purchased 
$50,000 worth of stock in 1985. As I recall, I was one of twenty or 
more investors who participated in the offering. I personally knew 
Carmichael, Connors, and Thad Hutcheson, then a partner of Baker and 
Botts in Houston, who founded the company. I do not know who the other 
investors were although I believe many of them were in the Houston 
business community and I probably knew a few of them. I did not serve 
as a director of Carcon, nor did I attend any meetings of Carcon's 
Board.
    Question 2. Did you ever have knowledge of any connection between 
Carcon, a Delaware Corporation, and Tokai Carcon Corporation of Japan?
    Answer. I have no knowledge of any connection between Carcon and 
Tokai Carcon Corporation.
    Question 3. What was Harkon and what was your involvement with 
Harkon?
    Answer. I have no knowledge of Harkon.
    Question 4. Were you ever aware that Harkon was an investor in 
Carcon? If so, when did you gain this knowledge? Were you ever aware of 
who were the beneficial owners of Harkon?
    Answer. I have no knowledge of Harkon and am unaware that Harkon 
was an investor in Carcon.
    Question 5. What was American Oil and Gas Company and what was your 
involvement with American Oil and Gas Company?
    Answer. American Oil and Gas Corporation (AOG) was an operator of 
small intrastate gas transmission lines in Texas. When Carcon merged 
with AOG, I became a share owner of AOG. I had no other involvement 
with AOG until Cabot's transaction with AOG in 1988, at which time I 
became a director of AOG.
    Question 6. At the time that American Oil and Gas merged with 
Carcon, what was your understanding of who the principal investors were 
in American Oil and Gas? When did you become aware that American Oil 
and Gas would acquire Carcon?
    Answer. At the time of the Carcon-AOG merger, AOG was a publicly-
owned corporation with its shares traded on the American Stock 
Exchange. To the best of my recollection the General Electric Company 
was a major shareholder of AOG. I would estimate that I became aware of 
the AOG-Carcon merger in late 1985. In any case, it was well before my 
joining Cabot in 1987.
    Question 7. Please describe the process by which Cabot Corporation 
invested in convertible preferred stock and stock warrants in American 
Oil and Gas Company.
    Answer. Prior to my arrival at Cabot Corporation in 1987, Cabot had 
purchased Westar, an Amarillo-based operator of gas transmission 
properties. After my arrival and after about a year's study, Cabot's 
management concluded that Cabot should withdraw from the gas 
transmission industry and initiated an auction process under the 
leadership of Goldman Sachs to sell Westar. AOG was the winning bidder 
in the auction, Westar was sold to AOG, and Cabot Corporation received 
convertible preferred stock and warrants in AOG.
    Because I, as Chairman of Cabot, had owned shares of AOG prior to 
my employment at Cabot, a Special Committee of Cabot's Board, 
consisting of three outside Directors, reviewed the auction process and 
any potential conflicts caused by my ownership in AOG. They concluded 
that the sale of Westar to AOG was in the best interest of Cabot's 
shareholders. Over time, that judgment proved to be correct.
    Question 8. Have you ever met, or have you ever had any businesses 
dealing with any of the following individuals: Haroon R. Kahlon, Khalid 
Bin Mafouz or James R. Bath? If so, please provide dates and places of 
meetings.
    Answer. To the best of my knowledge, I have never met Messrs. 
Kahlon, Mafouz, or Bath. I have never had any business dealings with 
any of them.
    Question 9. During the period that you were shareholder in Carcon, 
what, if any, was your understanding of Khalid Bin Mafouz' involvement 
with each of the companies listed above? (Carcon, Harkon, and American 
Oil and Gas).
    Answer. I had and have no knowledge of Mafouz' involvement with 
Carcon, Harkon, or AOG.
    Question 10. Did you ever become aware of the dissolution of 
Harkon? If so, at the time of Harkon's dissolution, were you aware that 
Khalid Bin Mafouz was under indictment by law enforcement authorities 
with the United States? Were you ever aware that a restraining order 
had been placed on the movement of his funds in the United States?
    Answer. I was and am unaware of Harkon's existence or its 
dissolution. I know nothing about Mr. Mafouz, his indictment, or 
anything related to his financial dealings.
    Question 11. Did you ever have any contact with or involvement with 
any officer or director of the Bank of Credit and Commerce 
International?
    Answer. To the best of my knowledge, I have never had contact or 
involvement with any officer or director of the Bank of Credit and 
Commerce International.
                               __________
    Response to Written Questions Submitted by Hon. John McCain to 
                            Samuel W. Bodman
    Question 1. The Cabot Corporation has 40 manufacturing facilities 
in 25 countries. As its Chairman and CEO, you are very familiar with 
the international environmental regulations. The President has 
indicated that the U.S. will not sign the Kyoto Protocol. Several other 
countries have indicated a desire to proceed with ratifying the 
protocol. What impact will the absence of the U.S. in the final 
negotiations have on the ability of U.S. industries ability to compete 
in those countries which may sign the Protocol?
    Answer. From what I understand, one cannot reasonably predict the 
possible impact of the Kyoto Protocol on U.S. industries if the United 
States does not become a party, because one can only speculate if in 
fact the Protocol will become effective and if so, what its obligations 
would entail and which countries would be party to it. In general, 
however, it does not seem likely that U.S. multinational companies 
would incur any competitive disadvantage concerning their operations in 
countries that implement the Protocol. Companies choose to invest in 
particular countries for a variety of reasons, including such factors 
as market access, availability of natural resources, labor, and 
technology, and general business climate. Environmental regulations may 
or may not be a significant factor in an investment decision. In 
addition, new regulatory requirements flowing from the Protocol in a 
particular country presumably would affect only companies generating 
greenhouse gas emissions, and would apply to all such companies 
regardless of the nationality of their ownership. Thus, it would seem 
that within Protocol countries the relative competitive impact of the 
Protocol on U.S. companies would not likely be great. Operations in a 
Protocol country--regardless of ownership--might be competitively 
disadvantaged compared to operations in a non-Protocol country that 
does not have similar obligations (such as China or India), but this 
would depend also on a variety of factors, including the nature of the 
obligations in the Protocol country and the presence or absence of 
similar obligations in those non-Protocol countries where competitors 
to the company are located.
    Question 2. Given your experience as an investment banker and an 
industrialist, what changes would propose to the government's patenting 
and licensing process? How can we improve the technology transfer 
process to get more of federally sponsored research results into the 
marketplace?
    Answer. The Office of Technology Policy within the Department's 
Technology Administration issued a report last year (Tech Transfer 
2000) that highlighted many ways to improve the process of moving 
federally sponsored research results into the marketplace. The ideas 
identified in that report are important; they include providing 
companies with better information management tools to more quickly and 
efficiently identify particular areas of Federal lab knowledge and 
expertise, and streamlining the intellectual property protection rules, 
contractual mechanisms, and management policies to reduce the potential 
for friction among collaborating parties. If confirmed, I intend to 
explore further the merits of these ideas and others, and how to put 
them into practice.
    Question 3. Over the years, we have heard claims of how some 
countries have used technology standards as trade barriers. In your 
experience, have you seen any attempts at this? As Deputy Secretary of 
Commerce, do you have any plans to investigate this issue further?
    Answer. It has indeed been commonplace for nations to use the 
standards setting process as a trade barrier to foreign competition. 
From wireless technologies to aircraft, American companies and 
inventors face the constant challenge of building products to a variety 
of specifications. The U.S. Trade Representative's 2001 National Trade 
Estimate Report provides many examples of other nations' using 
technology standards as barriers to trade. If confirmed, I would hope 
to leverage the Department's many assets and resources in standards and 
trade to assist American businesses in addressing this challenge.
    Question 4. The Secretary of Defense has placed a high priority on 
space as a future national security interest. What impact will this 
increased emphasis have on the emerging commercial space industry?
    Answer. The high priority on space emphasized by Secretary Rumsfeld 
presents an opportunity for the U.S. commercial space industry. As 
noted in the Rumsfeld Commission report, a robust commercial industry 
is critical for our national security. For example, the Commission 
stressed the need for our commercial remote sensing industry to be one 
generation ahead of the rest of the world; that is a strategy that both 
NOAA and TA's Office of Space Commercialization are working to 
implement. The DoD's commitment to space also can benefit commercial 
sectors in other related areas, by assuring, for example, that our 
launch base and range infrastructure is the best in the world and that 
our satellite navigation systems are without peer. In addition, DoD's 
need for a highly reliable launch-on-demand capability could present 
another area of opportunity for the commercial sector.
    Question 5. In your response to earlier Committee questions, you 
stated ``. . . many of the U.S. regulations and laws were developed at 
a time when American commerce dominated the world. With rare exception, 
this dominance no longer exists. Global competition dominates the world 
landscape, and U.S. regulations and laws should recognize that.'' What 
are some examples of regulations and laws that should be changed to 
reflect this reality?
    Answer. The Export Administration Act (EAA) is an example of a law 
that needs to be modified to reflect the fact that American goods and 
technology no longer dominate the world. The EAA has not been 
substantially revised since before the end of the cold war. The Senate 
Banking Committee recently reported out legislation (S. 149) that 
would, among other matters, remove export restrictions on technology 
that is widely available in foreign markets, and delete the provision 
in the National Defense Authorization Act that uses MTOPS (millions of 
theoretical operations per second) as the measure for controlling 
exports of computers to certain destinations. These improvements, and 
others, will allow American businesses to enhance their competitiveness 
overseas. The Administration has expressed support for S. 149, as 
reported from the Senate Banking Committee.
    Additionally, I believe that the antitrust laws should be re-
examined in light of changes brought about by broader global 
competition. Many of our ``old economy'' industries would probably be 
more competitive globally if they were permitted/encouraged to 
consolidate.
    Question 6. Mr. Bodman, the 2001 Department of Commerce budget is 
$5.1 billion. The NOAA budget comprises over half of that funding. The 
National Marine Fisheries Service, the NOAA agency responsible for 
fisheries, will receive approximately $519 million. Of that, $377 
million was earmarked for special projects. While much of this funding 
will go to worthwhile fisheries programs, other equally important 
research and management programs will not be funded because a fair and 
equitable allocation process was circumvented.
    Mr. Bodman, sustainable and competent management of our nations 
fisheries is extremely difficult. It is made unnecessarily more 
difficult when the routine, merit-based prioritization spending process 
is ignored. How do you plan to address this growing problem at the 
National Marine Fisheries Service and throughout the rest of the 
Department?
    Answer. The President's fiscal year 2002 Budget Request for NOAA is 
$3.15 billion, which includes $598 million for the National Marine 
Fisheries Service (NMFS). The Presidents fiscal year 2002 Budget 
Request for NMFS follows Congressionally enacted levels in fiscal year 
2001 and invests in core programs needed for NMFS to meet its mission 
to manage fisheries, rebuild stocks, and protect endangered species. If 
confirmed, I intend to work closely with the Congress to focus spending 
priorities on improving science, management, and enforcement programs 
at NMFS and core missions throughout the rest of the Department.
    Question 7. A recent Senate report identified the lack of 
experienced staff as limiting the ability of the Commerce Department 
and other agencies to monitor and enforce trade agreements and to 
obtain favorable resolutions of compliance problems. The report also 
states that increasing applications and inexperienced staff at the 
Patent and Trademark Office result in undeserving patents slipping 
through which in turn poses a critical threat to an economy that runs 
on intellectual property. With the upcoming wave of retirement in 
government personnel, how would propose to address these significant 
workforce management problems?
    Answer. Workforce management issues are clearly of deep concern to 
the President and to Secretary Evans. I share their concern. Your 
question underscores the challenges we will face within the Department, 
specifically, our ability to recruit key talent, retain our most 
skilled workforce, and prepare for what appears to be a potentially 
significant drain of experience through retirement losses.
    To recruit key talent, we must pay attention to the marketplace and 
to what is needed to attract recent college graduates to our workforce. 
I have been told that Commerce has some initial efforts underway, 
having recently established Memoranda of Understanding with nine 
selected universities regarding recruitment of their graduates. It is 
also my understanding that Commerce has deployed an automated hiring 
process which allows people interested in Commerce jobs to apply over 
the Internet. These are good first steps, but I am sure there is much 
more we can do. I will be particularly focused on ways we can foster 
recruitment of scientists and engineers, skill sets critical to the 
Department.
    To make certain that we have a skilled workforce, we must ensure 
that appropriate, timely training is provided. I understand that 
several of Commerce=s bureaus have implemented sound training 
approaches that meet this objective. For instance, both Census and PTO 
have onsite corporate universities to upgrade the skills of their 
employees. We need to examine how to do better in this area, especially 
if we turn our attention to using innovative, Internet-based approaches 
that enable us to reduce costs while training large numbers of 
employees.
    The retirement wave that may be coming appears to be both a threat, 
and an opportunity. I have been told that within the next 4 years, 
close to 1 out of 3 Commerce employees will be eligible for retirement, 
and that current models predict that we are likely to lose 20 percent 
of our workforce to retirement by fiscal year 2005. Should this happen, 
we will face a serious loss of experienced staff, most likely at the 
highest senior levels. We will need stronger approaches to managing the 
overlap of new and seasoned workers. On the other hand, the large 
number of potential vacancies is a superb opportunity to re-think both 
the number and types of jobs we need to deliver service to the public. 
We can undertake considerable restructuring while minimizing any 
negative impact on our workforce.
    I have not had a chance yet to read the report you are citing, but 
I will do so. I can assure you that Secretary Evans and I are fully 
committed to examining and addressing the human capital challenges we 
will face in the Department.
    Question 8. One of the major functions of the Department of 
Commerce is to ensure the global competitiveness of U.S. companies. One 
of the major administrations that help to achieve this goal is the 
Technology Administration. Based on your experience in the private 
sector, could you please describe how the Technology Administration's 
processes and functions can be improved to further help American 
businesses?
    Answer. The Technology Administration is indeed well-positioned to 
help ensure the global competitiveness of U.S. companies, and I am 
confident it will live up to this mission under Secretary Evans. I 
believe the Technology Administration should focus its resources on 
several key areas including: Global Technology Strategies: comparing 
U.S. science and technology strategies to those of other global 
leaders; Emerging Technology Policies: anticipating barriers to the 
future success of critical emerging technologies and recommending 
policy solutions; Technology-Led Economic Development: assisting state, 
regional and local efforts to leverage technology strengths and 
innovation assets to drive economic opportunity and job growth; 
Technology Transfer: continuing to advise policymakers on ways to 
maximize commercialization of technologies developed by or in 
partnership with the Federal Government; Critical Current Issues: 
working with policymakers in Congress and throughout the Administration 
to address current policy challenges including workforce supply and 
demand, barriers to e-commerce and the growth of critical 
infrastructure platforms, such as broadband networks.
    Within these broad areas, the Technology Administration will need 
to identify specific activities or efforts where it can make the 
maximum impact with its limited resources. TA leaders will need to 
define clear and achievable projects with measurable goals.
    Question 9. In your answer to the Committee's pre-hearing 
questionnaire, you emphasize the importance of education in a number of 
answers. One great threat to American competitiveness is that the 
average American student is scoring much lower than foreign students on 
math and science tests, and that America is not turning out enough 
scientists and engineers. Based on your experience, what should the 
Department of Commerce do to help improve the scientific and 
technological aptitude of American students, and get more American 
students interested in math, science, and engineering degrees?
    Answer. The science and mathematics achievements of American 
students have increased in the last two decades. Nevertheless, the math 
and science performance of many American students remains below that of 
global competitors, and improvements are needed. While states and 
localities must shoulder most of the burden for improving our students' 
math and science performance, the Federal Government is supporting 
their efforts through initiatives focused on improving teacher quality, 
upgrading curricula, increasing accountability, providing learning 
support for students who need extra assistance, and integrating 
technology into the classroom.
    In nearly every job field, the demand for technological expertise 
is growing, and skilled jobs involving science and technology are some 
of the best paying jobs our economy offers. The Commerce Department can 
play a role in helping prepare young Americans for these opportunities. 
For example, many young people lack knowledge of and interest in 
technical careers, and fail to stay with the math and science courses 
needed to prepare them for these jobs. In response, the Commerce 
Department is working with the National Association of Manufacturers in 
a national campaign to provide information on technical careers to 
students in middle school, the time when many young people form their 
opinions about careers. We have also led a multi-year initiative to 
focus national attention on meeting the Nation's demand for information 
technology (IT) workers. This year, we are conducting a review of IT 
worker training programs to help identify the types of programs that 
provide workers with the marketable IT skills employers want. Finally, 
business leaders have made it clear to us that improving workforce 
quality is among their highest priorities. In response, the Commerce 
Department is working to expand its role as an advocate for business 
concerns in Federal education and training efforts.
    Question 10. The Secretary of Commerce, following the President's 
budget outline, has suspended new funding for the Advanced Technology 
Program, pending a reevaluation of the program. What steps should the 
Secretary take in order to thoroughly review and assess the 
effectiveness of this program?
    Answer. It is my understanding that the Secretary has not suspended 
the ``rolling'' Advanced Technology Program competition this year. The 
Secretary has, however, initiated a thorough review of the program to 
ensure that it is fulfilling its original goal of funding the 
development of high-risk technologies. Areas of concern include the 
participation of large companies as single applicants and the 
restricted role of universities, among others. If confirmed, I intend 
to support the Secretary in this review and to offer my expertise as a 
chemical engineer and a former chief executive officer to help reform 
and reshape this program.
    Question 11. A few members have recently suggested establishing a 
Department of Trade within the Department of Commerce, to oversee and 
coordinate all trade policy and address all trade-related concerns. I 
don't believe the Department has been consulted regarding this matter. 
What is your take on such a suggestion?
    Answer. I am not aware of the specifics of this proposal, and at 
present I do not have sufficient information to have an opinion on the 
best way to organize the trade responsibilities of the executive 
branch. I do know that we work closely with U.S.TR and the other trade 
policy agencies through the National Economic Council process. On the 
trade promotion side, I share Secretary Evans' desire to strengthen 
coordination among the trade promotion agencies. In that regard, one of 
his goals is to reinvigorate the Trade Promotion Coordinating Committee 
(TPCC), so that it can provide recommendations to improve customer 
satisfaction and increase coordination. Since the Department of 
Commerce chairs the TPCC, Secretary Evans and I have a strong interest 
in strengthening coordination across the government and are interested 
in your thoughts as to how we can do a better job.
    Question 12. The Administration seems to be walking a fine line 
between enforcing current anti-dumping and countervailing duty laws and 
abiding by WTO and other trade agreements. Does the Department plan to 
develop an overall strategy to coordinate between these often opposing 
forces?
    Answer. The Bush Administration policy is to administer U.S. 
antidumping and countervailing duty laws fairly, impartially, and in 
accordance with U.S. law and our obligations under the WTO Agreements. 
I see no reason for implementation of that policy to conflict with U.S. 
obligations under WTO Agreements.
    Question 13. Recent news report highlight how problems with voting 
machine reliability have created public uncertainty regarding our 
election system. Considering the National Institute of Standards and 
Technology's role in establishing technical standards, what role should 
NIST play in establishing rigorous standards for voting systems and the 
election process to ensure public confidence in the American election 
system?
    Answer. If the Congress determines that the Federal Government 
should play a role in the development of standards for voting systems, 
NIST has expertise that could be helpful in implementing that role. 
Specifically, and probably most relevant to voting system standards, 
NIST has extensive experience in working with non-governmental 
standards development organizations (SDO's) in their development of 
standards. Although NIST itself promulgates technical standards for 
Federal agencies to use in connection with their computer systems that 
handle sensitive but unclassified information, it would not be 
appropriate for a Federal agency unilaterally to promulgate standards 
for voting systems, because State and local governments are in the best 
position to determine what works best for their communities.
                               __________
 Response to Written Questions Submitted by Hon. Ernest F. Hollings to 
                           Ellen G. Engleman
                               pipelines
    Question 1. As you know, the Senate passed a pipeline safety 
reauthorization bill earlier this year. There is a great deal of 
interest in improving the oversight and enforcement activities of the 
Office of Pipeline Safety. What are your plans for working with both 
the House and Senate to advance this legislation?
    Answer. I know the Department looks forward to working with the 
Congress to complete this important work this year, and has established 
it as a priority element in our National Energy Policy, reflected in 
the Administration's recent call for legislative action. Critical to 
these mutual efforts are statutory mandates for pipeline integrity 
management programs and programs that promote safety, including public 
education and training. Reauthorization must include funding levels 
sufficient to strengthen the Office of Pipeline Safety and its State 
pipeline safety partners. RSPA must remain committed to using all the 
incentives at its disposal--preventative education and training 
activities as well as penalties to ensure the safety and reliability of 
the Nation's pipeline network. RSPA will work with the pipeline 
industry and all other affected stakeholders to improve safety and 
reliability, but must maintain its independence and will take strong 
action whenever warranted.
    Question 2. There are a number of pending rules that need to be 
finalized. In addition there are a number of rules that are long 
overdue. What commitment can you make about moving this process ahead?
    Answer. The Office of Pipeline Safety is attacking the huge task of 
improving the safety of our nation's pipelines on several fronts 
simultaneously, including completing rulemakings, strengthening our 
enforcement efforts, rebuilding state partnerships, and building a 
collaborative research and development efforts. In the FY 2002 budget, 
the Administration seeks to increase significantly the resources 
available to address the pipeline safety mission. In the past year, OPS 
has completed a number of mandates. OPS developed a national integrity 
management program, finalized integrity requirements for large oil 
pipeline operators, proposed integrity requirements for small oil 
pipeline operators, and outlined regulatory integrity concepts for gas 
operators. OPS finalized rules defining unusually environmentally 
sensitive areas. OPS proposed improvements to corrosion standards, and 
also proposed rules for improving accident reporting, including 
lowering the reporting threshold for spills to five gallons, which is 
critical to improve analysis of safety problems that cause pipelines to 
fail. I am committed to maintaining this progress and, with additional 
resources, taking bold steps to complete any outstanding mandate as 
well as addressing other pressing communications, education, and damage 
prevention needs.
    Question 3. The Office of Pipeline Safety recently assessed a $2.52 
million fine, the largest civil penalty ever sought by a safety agency, 
against a natural gas transmission pipeline operator for its role in 
the explosion last year in New Mexico that killed 12 people. Last year 
the agency assessed a record $3 million fine against a liquid-pipeline 
operator for safety violations that led to the June 1999 explosion in 
Bellingham that killed 3 boys. In recent years, federal regulators have 
curtailed the use of fines as an enforcement tool. The agency says it 
is now reconsidering that approach. Do you believe these penalties are 
an effective tool in preventing accidents and encouraging safer 
pipeline operations?
    Answer. Yes, I think the Office of Pipeline Safety (OPS) has to 
make full use of all enforcement tools available. As I discussed in my 
response to question number one, RSPA must remain committed to using 
all the incentives at its disposal--preventative education and training 
activities as well as penalties to ensure the safety and reliability of 
the Nation's pipeline network. RSPA will work with the pipeline 
industry and all other affected stakeholders to improve safety and 
reliability, but must maintain its independence and will take strong 
action whenever warranted.
    Question 4. A report last year by the U.S. General Accounting 
Office found that the number of major pipeline accidents rose by about 
4 percent a year during the 1990s. With the introduction of President 
Bush's energy plan which calls for faster federal reviews of pipeline 
projects and the construction of 38,000 miles of new natural-gas 
transmission lines, do you think that the Office of Pipeline safety 
should be playing an increased role?
    Answer. Yes, the Office of Pipeline Safety currently has an 
important role to play in evaluating the safety of the design and 
construction of these projects, along with their state agency partners. 
To better serve the safety goals of the Department, I believe that more 
activity should be accomplished--especially in the role of public 
safety education and outreach.
                          hazardous materials
    Question 1. RSPA estimates that 800,000 shipments of hazardous 
materials make their way through the national transportation system 
each day. The Hazardous Materials Transportation Act was last amended 
in 1994. The legislation which regulates the transportation of 
hazardous materials including packaging and shipping requirements, 
safety features and placement of rail tank cars, safety performance of 
truck drivers and training and education for local emergency 
responders, expired in FY 1997. There were no hearings during the 106th 
Congress on this issue. What plans do you have for moving this 
reauthorization forward? Are there specific areas of hazardous 
materials transportation that you believe need to be addressed?
    Answer. I believe that the Administration and Congress should work 
together on reauthorizing and strengthening this law in order to 
improve the good safety record of hazardous materials transportation, 
and I am committed to doing so.
    Question 2. Pursuant to Title 49 CFR Part 107, Subpart G (107.601-
107.620), certain offerors and transporters of hazardous materials, 
including hazardous waste, are required to file an annual registration 
statement with the U.S. Department of Transportation and to pay a fee. 
The fee provides funds for grants distributed to States and Indian 
tribes for hazardous materials emergency response planning and 
training. DOT changed the fee assessment for haulers of hazardous 
transportation from a flat rate per carrier to $1975 annually for large 
carriers and $275 for small carriers. In December 2000, the RSPA 
announced a proposal to temporarily reduce registration fees since the 
registration fees collected were more than the amount anticipated when 
the fee schedule was established. However the Bush Administration's 
budget request required full funding for RSPA through user fees, so 
eliminating the proposal to reduce the user fees. Can you please 
comment on the issue of user fees?
    Answer. It is Administration policy that industries that benefit 
from government programs pay for those programs. The Hazardous 
Materials Safety Program benefits shippers and transporters of 
hazardous materials by helping ensure the safety of hazardous materials 
in transportation. Consistent with Administration policy, the RSPA 
budget request proposes to charge the hazardous materials industry for 
the costs associated with assuring the safe transportation of hazardous 
materials. This would ensure that industry pays part of the cost of the 
program that facilitates its operations receiving those benefits.
    Question 3. I have reviewed your credentials, which are impressive 
and clearly show a wealth of experience in the business sector and in 
managing people and budgets. However, given that you do not have the 
same depth of experience in the areas of pipeline and hazardous 
materials safety, what actions will you take to familiarize yourself 
with your new regulatory responsibilities? What qualifications will you 
look for as you fill out your staff?
    Answer. RSPA is a very diverse agency. Based on my previous 
contacts and through my more recent direct experience with the RSPA 
senior staff, I know that RSPA is staffed with highly skilled and 
professional individuals. I am confident that, irrespective of my 
direct in-depth knowledge of these two programs, the management skills 
that I bring to the position will be relevant and that the combination 
of my skills and those that are available through the career staff will 
enable RSPA to flourish.
                               __________
  Response to Written Questions Submitted by Hon. Senator John McCain 
                          to Ellen G. Engleman
    Question 1. As you may be aware, this Committee has worked at 
length to develop comprehensive pipeline safety improvement 
legislation. As a result of our bipartisan efforts, the Senate approved 
S. 235, the Pipeline Safety Improvement Act of 2001, on February 8th. 
We remain hopeful the House will take a similar course of timely 
action. While the Senate has acted, we are certainly interested in 
working with the Administration and will consider its recommendations 
to further promote pipeline safety. When can we expect to receive input 
from the Department on proposals to strengthen our pipeline safety 
policies?
    Answer. I know the Department looks forward to working with the 
Congress to complete this important work this year, and have 
established it as a priority element in our National Energy Policy, 
reflected in the Administration's recent call for legislative action. 
Critical to these mutual efforts are statutory mandates for pipeline 
integrity management programs and programs that promote safety, 
including public education and training. Reauthorization must include 
funding levels sufficient to strengthen the Office of Pipeline Safety 
and its State pipeline safety partners.
    Question 2. I recently contacted Chairman Young of the House 
Transportation and Infrastructure Committee to urge him to move forward 
with action on pipeline safety improvement legislation. If confirmed, 
what actions would you take to help move a pipeline safety bill through 
the legislative process?
    Answer. If confirmed, I will commit myself to pipeline safety 
reauthorization and to provide recommendations or proposals to Congress 
in time for decisive action during this session.
    Question 3. Last week, RSPA announced it would be seeking the 
largest civil penalty ever proposed against a gas transmission pipeline 
operator in the history of the federal pipeline safety program. 
Specifically, RSPA would be imposing a $2.52 million civil penalty 
against El Paso Energy Pipeline Group for safety violations related to 
the August 2000 pipeline failure in Carlsbad, N.M., which lead to the 
deaths of 12 people. Please comment on the Department's action in this 
manner. Can we expect RSPA to take similar punitive actions in the 
future?
    Answer. I am aware of, and support, RSPA's decision to levy civil 
penalties in this tragic case. RSPA must remain committed to using all 
the incentives at its disposal-- preventative education and training 
activities as well as penalties to ensure the safety and reliability of 
the Nation's pipeline network. RSPA must maintain its independence and 
will take strong action, whenever warranted, yet work with the pipeline 
industry and all other affected stakeholders to improve safety and 
reliability.
    Question 4. In the past, the National Transportation Safety Board 
(NTSB) has indicated that RSPA has the worst record of all 
transportation agencies in responding to its recommendations. What will 
you do to improve RSPA's responsiveness to NTSB safety recommendations?
    Answer. I am aware that RSPA has taken important steps over the 
past several years to improve its responsiveness to NTSB safety 
recommendations and that its recent record has, in fact, been much 
improved. RSPA and NTSB will not always agree on specific responses to 
each recommendation, but should consistently agree on safety as the 
highest priority. However, I assure the Committee that I will 
personally place the highest priority on prompt and complete replies to 
all NTSB recommendations. I also commit to early and frequent 
coordination with the Board leadership and members.
    A recent example of RSPA placing a higher priority on working with 
the NTSB involves RSPA working directly with the Department's newly 
created Intermodal Hazardous Materials Program Office. A safety 
recommendation had been issued to another Operating Administration that 
directly involved RSPA, and by working jointly with the two offices, 
the recommendation was immediately acted upon and addressed. The end 
result was that the recommendation was effectively and efficiently 
responded to, which improved transportation safety.
    Question 5. If confirmed, what policies would you initiate to 
promote the safe and efficient transportation of hazardous materials?
    Answer. I will encourage regulations that enhance intermodalism and 
international harmonization to promote the efficient movement of 
hazardous materials across borders while maximizing safety to the 
public. I will stress compliance assistance, including training and 
outreach to educate the regulated industries (e.g., carriers, shippers) 
on the regulations, and enforcement to address violations of hazmat 
regulations. I will encourage more extensive use of data analysis to 
identify threats to safety not yet addressed in our program. I will 
foster an environment that strives to enhance customer service.
    Question 6. In 1990, Congress authorized an emergency preparedness 
grant program (EPGP) for states and Indian tribes to be funded from 
fees collected annually from the hazardous materials industry through a 
registration program. At the same time, Congress directed the 
Department to adjust the amount of the fees being collected to reflect 
any unexpended balance in the EPGP.
    This current registration year--2000-2001--is the first time the 
Department has collected an unexpended balance in the EPGP. As required 
by law, the Department proposed in December 2000 to adjust the fees 
downward to reduce the unexpended EPGP balance. However, the 
President's budget request proposes to use this unexpended balance--
currently in excess of $7 million--to partially fund the federal 
hazardous materials transportation regulatory program, and further, 
requires the Department to withdraw its proposal to reduce the hazmat 
registration fees so that the Department will continue to have access 
to an unexpended reserve of funds, and finally, that you would propose 
another rulemaking to raise the fees so that by FY 2003 there will be 
funds in the EPGP account to fully fund the federal hazardous materials 
transportation regulatory program and the EPGP--a total of at least 
$36.5 million.
    (a) Does the Department currently have authority to divert hazmat 
registration fees for the purpose of funding the Department's hazardous 
materials regulatory program? (b) Is the Department is violating 
current law by refusing to adjust the unexpended balance in the EPGP? 
(c) Would you agree that the Department's hazardous materials 
transportation regulatory program is critical to ensuring the safe 
transportation of these materials? (d) Do you believe that a safety 
program should be dependent on whether or not sufficient fees have been 
collected to accomplish necessary inspections, enforcement, and 
regulatory efforts?
    Answer. I understand that RSPA does not have authority to use 
hazmat registration fees to fund the hazardous materials safety program 
without statutory change. On April 9, 2001 the President submitted his 
fiscal year 2002 budget request to Congress. In that budget request, 
the President proposes to fund a portion of RSPA's hazardous materials 
safety program budget from fees collected through the Hazardous 
Materials Registration program. Consistent with the President's budget 
request to Congress, RSPA is delaying final action on this rulemaking 
pending enactment of the authority to provide the authorization to fund 
part of the hazardous materials program with registration fees. I am 
told the Department's legislative proposal on this subject is currently 
in clearance.
    The delay in action to reduce registration fees would not appear to 
violate laws, especially because the President has not proposed changes 
to Congress to implement the use of these funds in a new way. The 
President's FY 2002 budget proposes the use of fees to partially cover 
the costs of the hazardous materials program. If the proposal is 
adopted, it will establish the legal basis for spending those funds to 
partially fund RSPA's hazardous materials safety program. Otherwise, I 
am told that RSPA intends to adjust fees significantly to reduce the 
surplus over a number of years.
    I do agree that the hazardous materials safety program is critical 
to the safe transportation of hazardous materials. The program also 
yields substantial benefits to industry in providing a consistent set 
of national standards to efficiently transport hazardous materials 
throughout the U.S. We are confident that the industries that benefit 
from the program can provide sufficient funds to cover the program 
costs without imposing any net economic disadvantage. I am confident 
that Secretary Mineta would not allow any reduction in safety effort 
due to reduced user fee revenues.
    Question 7. The United States benefits greatly from the 
international commerce of hazardous materials. We are told that no 
other country funds their hazardous materials regulatory program 
through user fees. Has the Department assessed the competitive 
disadvantages that US industry may face as a result of these fees?
    Answer. I understand that the Department has not specifically 
analyzed competitive disadvantages that could result from the 
application of user fees. However, it is also my understanding that 
RSPA anticipates that an additional fee would have a negligible 
economic impact on companies engaged in foreign commerce.
                               __________
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                          to Jon Allan Rutter
                           passenger service
    Question 1. Many experts believe that it is long past the time for 
the United States to develop an integrated high speed rail network, 
similar to those in Europe and Japan, in an effort to develop a more 
balanced transportation system, improve air quality and spur economic 
growth in our downtown business centers. Can you comment on your plans 
for the high speed corridor program?
    Answer. Before answering about the plans for high-speed rail in the 
U.S., I want to address the international comparisons in the question. 
The Department of Transportation's Bureau of Transportation Statistics 
compiled an informative set of transportation statistics about the G-7 
countries, available at http://www.bts.gov/itt/G7HighlightsNov99/G-
7book.pdf. These statistics seem to illustrate that each nation's 
transportation system usage statistics reflect its relative modal 
transportation infrastructure investments. Western European nations and 
Japan have more rail passenger travel (passenger-kilometers) than the 
United States, but the U.S. has significantly more travel by air. These 
statistics illustrate the national investment choices made in each of 
these countries. Our aviation system and extensive highway and road 
networks offer Americans much more personal mobility than other G-7 
nations, as measured by passenger-kilometers per capita.
    However, highway and aviation congestion has pressed many state 
transportation planners to advocate higher speed intercity passenger 
rail services that would offer competitive travel times to commercial 
aviation and automobiles. One of the tasks of the Department of 
Transportation will be to work with the Congress and the States to 
figure out the right kinds of incentives to bring about more of this 
type of development. Given my experiences in Texas, I have unique 
perspectives in working with other states in these high-speed 
corridors. I plan to give priority consideration to this effort in the 
context of the broader issue of the Federal role in the management and 
improvement of rail passenger service in this country.
    Question 2. Some people advocate the ``privatization'' of Amtrak, 
but don't agree on what that means. We, in fact, have mandated that it 
become ``operationally self-sufficient'' by 2003, even though no other 
railroad in the world operates without federal support. Do you think 
that privatization means the elimination of operating support, and/or 
the elimination of capital support (which means the end of the system), 
or just that it should not be a federal entity operating it?
    Answer. There is currently no legislative mandate for the 
privatization of Amtrak or, more generally, of rail passenger service 
in the U.S. I believe the sentiment for ``privatization'' is motivated 
by a desire that the provision of rail passenger service be less 
dependent on the public sector for financial support and that it be 
managed by an organization with strong incentives to offer good 
customer service and operate efficiently. It can be argued that, given 
the degree of public investment in other competing modes of intercity 
transportation, rail passenger service will require substantial and 
continuing public investment, and that Amtrak will also have great 
difficulty shedding its dependence on operating support. I welcome the 
suggestions by Members of Congress that there be a debate on ways to 
improve upon the provision of rail passenger service while decreasing 
the need for public and, specifically, Federal support.
    Question 3. As you will hear, some people on this committee will 
say that a passenger railroad should be funded only in the most 
congested areas of the nation--the East and West coasts. Others feel 
very passionately that it must be a national system--that covers the 
whole country--otherwise they are unwilling to pay for it. What is your 
opinion? Do you ascribe to the theory that it is only for congestion 
relief in overcrowded urban areas where you just can't drive, or do you 
think it also necessary as an alternative in more rural areas, where 
people already have less choices--served by fewer airlines, etc?
    Answer. Certainly the purely economic case for the provision of 
rail passenger service is stronger in those types of services that 
represent attractive travel alternatives to air and auto trips, where 
the revenue recovered exceeds or comes close to exceeding the operating 
cost, and where there are substantial public benefits such as 
congestion relief. These circumstances tend to be more likely in short 
distance ``corridor'' services. States also appear more likely to share 
in financial support for these types of services. Service to more 
isolated communities may be justified on other grounds. In any case the 
extent of rail passenger service should not be static. The provider of 
these services needs to continue to examine the route structure.
      railroad rehabilitation and improvement financing act (rrif)
    Question 1. How is the FRA implementing the RRIF program? Have any 
awards been made?
    Answer. I understand that FRA has designed an interactive 
application process that provides technical assistance to prospective 
applicants. Applications may be submitted at any time. Pre-application 
meetings are encouraged, but not required. If sufficient historic 
financial information is provided, FRA calculates a preliminary 
estimate of the Credit Risk Premium for a prospective applicant prior 
to completion of an application.
    Since the Final Rule was effective on September 5, 2000, FRA has 
had 20 pre-application meetings. A total of 4 applications have been 
submitted. FRA has approved the first RRIF loan, for the I&M Rail Link. 
The $100 million loan will be used to refinance existing debt as part 
of a re-capitalization plan that will enable the railroad to undertake 
a 5-year major track rehabilitation program. I&M Rail Link is a 1,400 
mile regional railroad operating in the States of Iowa, Illinois, 
Minnesota, Missouri, and Wisconsin, serving 907 shippers. The term of 
the loan is 25 years.
    FRA currently is evaluating the creditworthiness of the other 3 
applications.
    Question 2. This is a new program that requires financial 
expertise. Do you believe that the agency is adequately staffed to 
advise applicants, review applications and process and monitor awards?
    Answer. The RRIF statutory provisions amended Title V of the 
Railroad Revitalization and Regulatory Reform Act of 1976. The staff 
assigned to the RRIF Program has experience managing the prior Title V 
Program. FRA also is strategically allocating available resources to 
the RRIF Program. Even so, if confirmed, I will work with our budget 
office (and the Secretary's Office and the OMB) to consider whether 
additional staff and contractor support would help expedite review and 
processing of RRIF applications.
                          high speed corridors
    Question 1. Amtrak recently introduced high-speed rail service 
between Boston and Washington D.C. The Department has designated nine 
other high-speed rail corridors. As Secretary, what will be your 
position on expanding high-speed rail service? And if supportive, what 
steps will you pursue?
    Answer. If confirmed, I will have FRA continue to work with the 
State sponsors of corridor service and with Amtrak to encourage 
investment and service development in the designated high-speed 
corridors. Given my experiences in Texas, I believe the strong state 
leadership and commitment shown in many of these corridors will be one 
of the keys to the success of these efforts. I will also want FRA to be 
fully engaged with other parts of the Administration in developing the 
right mix of federal policies and programs that will lead to beneficial 
development.
                                 safety
    Question 1. Administrator Molotoris established the Safety 
Assurance and Compliance Program (SACP) to address systemic safety 
concerns in the railroad industry. Do you believe that this program has 
been a success and do you plan on continuing to use it to address 
safety issues? Please explain what role it would play.
    Answer. I believe this program has helped foster a cooperative, 
system-based safety approach to safety issues outside the typical realm 
of regulation, and I am told most rail management and rail labor 
officials believe the program has been successful. I agree with them, 
and look forward to discussing improvements to the program they believe 
will build upon these successes, should I be confirmed. SACP is one 
tool available to the FRA as it works to improve rail safety, another 
is enforcement focused on the issues that present the greatest risk to 
the public, railroad workers and rail operations. Future progress in 
increasing rail safety will depend on using all tools available, a 
sound and effective safety inspection and enforcement program, as well 
as programs that encourage meaningful safety partnerships.
    Question 2. The last eight years have produced the lowest numbers 
of fatalities in railroad history. What do you attribute this decline 
to? How do you plan to further improve those numbers during your 
tenure?
    Answer. This decline has been due to hard work by the FRA, rail 
management and rail labor in a concerted attempt to improve rail 
safety. There are a number of factors at work, not the least of which 
is the FRA's recent efforts to create cooperative approaches to rail 
safety, such as the Safety and Compliance Program and the Rail Safety 
Advisory Committee. The FRA also supports an ambitious research agenda, 
much of which is aimed at new technologies and practices to make 
railroads safer. Future actions will likely focus on addressing 
fatigue-related accidents, improving track inspection and maintenance 
practices and technologies, and testing and developing cost-effective 
collision avoidance technologies.
    While no rail passenger fatalities were reported in 2000, and the 
24 railroad workers killed on the job was the lowest number ever, FRA 
is working to reduce the number of citizens killed in highway-rail 
crossing crashes or killed while trespassing on railroad property. 
These incidents represent 95 percent of the rail-related deaths for 
last year, and pose the greatest challenge in meeting the agency's GPRA 
safety performance goals. In addition to working to assess the full 
range of education and outreach programs aimed at reducing these 
fatalities, I would also pursue a range of other initiatives, if 
confirmed: Encourage states to use TEA-21 safety incentive grants 
(Sections 1403 and 1404 of TEA-21) to augment grade crossing formula 
funding; Work with states and railroads to complete work on grade 
crossing protection projects in less time; Work with states and the 
Congress to improve the accuracy of the National Highway-Rail Grade 
Crossing inventory database; Encourage states to include rail-
pedestrian accident prevention in their state traffic safety plans; 
Work with community leaders to develop more effective public service 
campaigns and education programs to caution citizens about the dangers 
of walking along increasingly busy, multiple track rail corridors.
    Question 3. There have been concerns in recent years that the 
accident reporting information is not accurate. How will you ensure 
that data the FRA receives is verifiable?
    Answer. Timely and accurate accident reporting is critical to the 
FRA being able to achieve our GPRA goals by reducing accidents and 
injuries. I understand FRA extensively revised their accident/incident 
reporting regulations in 1997, and these rules require railroads to 
maintain accurate reporting on accidents, incidents, injuries, and 
occupational injuries. These rules also require a complaint procedure 
for employees who believe they have been intimidated or harassed for 
reporting an injury (these employees and their representatives can also 
communicate this information directly to the FRA). If confirmed, I will 
work with FRA staff as they continue to inspect and audit railroad 
records to ensure their accuracy.
    Question 4. For many years now, rail labor and management have not 
agreed to the Department's proposals to reauthorize the federal 
railroad safety program. As Administrator, what will you do to forge 
the consensus that would accelerate the enactment of some improvements 
to current law?
    Answer. The authorization of appropriations for the Federal rail 
safety program expired at the end of fiscal year 1998. Since then, the 
program has functioned on the basis of annual appropriations and the 
use of the significant rail safety regulatory powers that Congress has 
already conferred on the Secretary of Transportation. The U.S. 
Department of Transportation is hopeful that the program will be 
reauthorized and is working to develop a reauthorization proposal. A 
draft bill is currently in review in the executive branch. If 
confirmed, I will make every effort to bring the parties together to 
reach a consensus on rail safety reauthorization.
                               __________
    Response to Written Questions Submitted by Hon. John McCain to 
                            Jon Allan Rutter
                                 amtrak
    Question 1a. Since enactment of the Amtrak Reform and 
Accountability Act of 1997, Amtrak has received nearly $4.5 billion in 
federal assistance, yet its debt load has more than tripled over that 
same period from about $1 billion to $3.3 billion. Further, Amtrak's 
own data shows that almost all of its 41 routes operate at a loss, with 
about 25 percent of those routes losing over $100 per passenger. One 
route lost as much as $512 per passenger. What are your views on 
Amtrak's current route structure?
    Answer. Amtrak's current route structure is significantly similar 
to the network created thirty years ago at Amtrak's inception. However, 
without knowing more about the interrelationships among routes and how 
they relate to the system's overall financial performance, I cannot yet 
estimate the direct and indirect effects of changes to specific routes 
or services. If confirmed, I would work to see that a more 
sophisticated understanding of these complicated issues would be used 
in developing a national passenger rail policy.
    Question 1b. What is your understanding of how Amtrak chooses 
routes and what role, if any, should the FRA play in route selection?
    Answer. My understanding is that Amtrak has used a number of 
methods, some less analytical than others, to determine which routes it 
will serve. Amtrak's latest ``market-based network analysis'' 
methodology is not well known outside the company. But, for me, the 
question of how routes are chosen, expanded or terminated should be 
determined in large part by principles laid out in a national passenger 
rail policy. In a recent speech before the National Press Club, Amtrak 
President George Warrington talked about ``mission conflict'' saying 
that it was unrealistic to expect Amtrak to meet a mandate to run a 
national network and also to perform in a true commercial sense. He 
called on Congress and the Administration to define the mission of 
intercity passenger rail in this country and to align capital resources 
with that mission. He stated that he believed the major questions for 
such a rail policy should be (and I paraphrase): (1) What would a 
national passenger rail system look like? (2) Should a national system 
have routes that don't pay for themselves? (3) How much capital will be 
provided to support this system, and where will it come from?
    I agree that these questions begin the discussion of a national 
passenger rail policy, although such a policy should address more 
fundamental issues than routes. If confirmed, I would work with 
Secretary Mineta, the Administration and interested members of Congress 
to develop a policy that answers these three questions and much more. 
Once that policy is developed, I would foresee that FRA would not 
choose routes, but rather ensure that the passenger rail network is 
consistent with the policy.
    Question 2a. As you are likely aware, last week Amtrak executed a 
transaction to mortgage a portion of New York's Penn Station in order 
to secure a loan for $300 million. Apparently, Amtrak's financial 
condition is so severe that without an emergency infusion of cash 
provided by this deal, it would face immediate bankruptcy. More 
troubling, I have recently learned this deal is one in series of 
transactions over the last several years in which Amtrak has mortgaged 
billions of dollars in assets to which the federal government holds a 
lien. In each case, the federal government had to subordinate its lien 
to enable the deal to go forward. It is my understanding that the 
Federal Railroad Administration (FRA) was primarily responsible for 
overseeing the federal government's interest in these deals. Can you 
explain how you view the FRA's responsibility in such oversight 
matters?
    Answer. It is my understanding that the Secretary has delegated to 
the Federal Railroad Administrator the responsibility for actions 
associated with the mortgage and liens on Amtrak assets held by the 
Department. Before acting, FRA assures that any proposed transaction is 
consistent with the Secretary's views on the management of Amtrak's 
assets, with the interests of American taxpayers and passenger rail 
customers in mind.
    Question 2b. If confirmed, what will you do to insure that the 
American taxpayer's interest are fully protected? Please provide for 
the Record a list of all financial transactions in which the Department 
of Transportation has acted to subordinate its rights in regard to 
Amtrak financial transactions.
    Answer. To the best of my ability, I will carefully review Amtrak 
transactions, particularly looking at whether such transactions 
constrain future decisions of either the executive or legislative 
branches about Amtrak. A list of such transactions is attached.
    Question 2c. What will you do to increase the FRA's awareness of 
Amtrak's current financial and operational situation and how will you 
insure that future actions by Amtrak do not result in unanticipated 
transportation disruptions?
    Answer. If confirmed, I would assist Secretary Mineta as he 
performs his fiduciary duties as a member of Amtrak's Board of 
Directors. Passenger rail policy development will depend on an 
understanding of Amtrak's current financial status, and we will be 
working with Secretary's office to develop that information. I would 
also expect that FRA staff will carefully monitor Amtrak's finances and 
trends, so that the Secretary can anticipate the likely service 
implications of Amtrak actions and act accordingly as a Board member.
    Question 3. What is your understanding on whether Amtrak will meet 
the statutory requirement that it operate free of federal assistance by 
2003?
    Answer. I concur with Secretary Mineta's assessment and that of the 
DOT Inspector General, who have opined that Amtrak is unlikely to meet 
those deadlines specified in the 1997 legislation. Amtrak's need to 
conclude the Pennsylvania Station mortgage raises serious concerns 
about the company's ability to meet its operating and capital needs. 
Passenger rail service is a vital link in the American transportation 
network, and this most recent fiscal crisis highlights the need to 
identify structural reforms and develop solutions that improve its 
long-term financial health. Formal consideration of what that rail 
transportation network should be, what we can afford, the reforms that 
may be necessary, and how they will be implemented should take place 
soon, well in advance of the expiration of the current Amtrak 
authorization.
    Question 4. Given your previous employment as an advocate for High 
Speed Rail, what actions do you intend to initiate in this area? Can we 
expect you to be a strong advocate of federal involvement in High Speed 
Rail development?
    Answer. My prior experience in Texas involved implementing the 
Texas Legislature's vision for a privately funded, constructed and 
maintained high-speed rail system. If confirmed, I look forward to 
leading FRA as it provides assistance to states that are planning 
higher speed passenger rail service as part of their overall state 
transportation planning mandated by TEA-21. My own involvement in high-
speed rail in Texas has given me first-hand knowledge of the practical 
difficulties of implementing high-speed rail, and I would be able to 
share those lessons with interested states.I
    Question 5a. Amtrak and some of its supporters in Congress have 
crafted a plan to provide Amtrak with $12 billion in bonding authority 
that would be supported through a federal income tax credit for the 
holders of the Amtrak-issued bonds. In light of Amtrak's financial 
situation as I mentioned above, the Congress will be very interested in 
the Administration's position concerning this proposal. Have you had an 
opportunity to review the Amtrak bonding proposal, S. 250, and if so, 
what are your views on the proposed legislation?
    Answer. The Administration has not developed a position on 
currently proposed legislation to provide federal financial assistance 
for high-speed rail development, so I will defer any comments on this 
legislation or on the appropriate role the federal government should 
play in high-speed rail development.
    Question 5b. In light of the recent disclosure of Amtrak's 
financial problems, would you support the proposed bonding plan?
    Answer. I see the question of capital financing tools as another 
implementation issue that first depends on the development and 
articulation of a national passenger rail policy. Once that policy is 
developed, then alternatives can be examined for public financing of 
capital expenses of passenger rail.
    Question 5c. Based on your past experience as an advocate for high-
speed rail, can you tell us what improvements the American taxpayer 
could expect to see if the proposed bonding plan were to become law? 
How many miles of high speed rail can be built for $12 billion dollars?
    Answer. I am not familiar with the precise details of S. 250, and 
do not know how or where the funds raised through these bonds would be 
expended. I know that states and regions are planning different types 
of passenger rail service operating at different speeds, and that these 
differences will affect the answers to your question. The answer on 
miles per dollar depends upon, among other things, the trains chosen 
and the speeds desired and permitted over a chosen infrastructure.
    Question 5d. I am concerned that there has been little study or 
reporting on the true cost of implementing high speed rail on a 
national basis. Can we expect the Administration to conduct a cost 
assessment on high speed rail?
    Answer. In 1997, FRA produced a report to Congress assessing the 
commercial feasibility of high-speed ground transportation. A copy of 
the report is available at http://www.fra.dot.gov/doc/hsgt/cfs/
index.htm.
    Question 6. In 2000, there were 928 deaths attributable to rail 
operations, of which approximately 50 percent were trespasser-related 
and more than 40 percent occurred at highway rail grade crossings. What 
actions will you initiate to help reduce rail fatalities?
    Answer. If confirmed, I will work with the FRA staff to assess the 
full range of safety education and outreach programs. I would also like 
to explore the feasibility of other initiatives, such as: Encourage 
states to use TEA-21 safety incentive grants (Sections 1403 and 1404 of 
TEA-21) to augment grade crossing formula funding; Work with states and 
railroads to complete work on grade crossing protection projects in 
less time. Work with states and the Congress to improve the accuracy of 
the National Highway-Rail Grade Crossing inventory database; Encourage 
states to include rail-pedestrian accident prevention in their state 
traffic safety plans; Work with community leaders to develop more 
effective public service campaigns and education programs to caution 
citizens about the dangers of walking along increasingly busy, multiple 
track rail corridors.
                           freight railroads
    Question 1a. In recent testimony before this Committee, the 
Chairman of two of our nation's largest freight railroads stated that 
in some cases, recent mergers have led to increased competition that 
has resulted in smaller profit margins. In follow up discussions with 
Committee staff, representatives of one of the railroads stated that as 
a result of the smaller profit margins, they will have to seriously cut 
back on capital investment and possibly cut shorter small volume routes 
in order to maximize earnings. One possible alternative suggested to 
avert service disruptions was to provide increased federal funding for 
public-private partnerships to support and build railroad 
infrastructure. What are your views on such partnerships?
    Answer. There are a number of examples of such partnerships 
providing public benefits as well as expanding freight rail capacity: 
Oregon-Washington passenger rail service was improved by public 
investment in stations, grade crossing improvements and private 
expansion of freight rail lines. This resulted in higher frequency, 
higher speed passenger rail service, and more reliable, higher-speed 
freight service; The Alameda Rail Corridor is an example of providing 
safety and environmental benefits for the public and speeding freight 
operations for the railroads; The Alliance development in Fort Worth, 
Texas combines public investment in a cargo airport and ground 
transportation infrastructure with private investments in rail 
intermodal facilities to attract hundreds of businesses and thousands 
of jobs based on these transportation facilities.
    Question 1b. Do you support public financing of railroad 
infrastructure?
    Answer. Most of the railroads considering partnerships with public 
investment seem to be aiming at including rail investment provisions in 
the successor legislation to TEA-21. If confirmed, I would work with 
the Secretary and the Administration to consider these kinds of multi-
modal transportation investments with public benefits as surface 
transportation reauthorization legislation is developed within the 
Department.
    Question 1c. Should railroads be allowed limited immunity to 
discuss rates in order to set them at a level sufficient to cover their 
cost of capital?
    Answer. I am concerned about the ability of freight railroads to 
attract sufficient capital. This affects the ability of railroads to 
provide better service to customers, to expand their infrastructure to 
move customers' freight, to make necessary maintenance investments to 
operate safely, and to provide good paying jobs to hundreds of 
thousands of Americans who either work for the railroads or work for 
companies that depend on the railroads. However, collective ratemaking 
may not be the most effective means of addressing the capital shortfall 
issue, particularly in a marketplace concerned with carrier 
competition.
                      surface transportation board
    Question 1. What are your views regarding the role of the Surface 
Transportation Board and what type of relationship do you hope to 
establish between the FRA and the Board?
    Answer. The FRA and STB have duties assigned to them by Congress by 
law. If confirmed, I would work closely with STB members to understand 
their views on the railroad industry (to the extent possible under ex 
parte rules) and to advise on safety implications of STB decisions.
    Question 2. What are your views on the STB's new railroad merger 
rules?
    Answer. I have not had time to thoroughly examine the full 
decision, but am encouraged about the following aspects of the rules: 
Requirement for integrated safety plans for post-merger operations; 
More detailed planning for post-merger service, so that past merger 
service problems do not occur; Consideration of future effects of a 
particular merger.
    Question 3. What is your general philosophy concerning the proper 
role for the FRA in regard to addressing concerns raised by captive 
rail shippers?
    Answer. Many captive rail shipper issues deal with economic 
regulations of the Surface Transportation Board, and statutory remedies 
granted to the STB by Congress. The FRA is the principal advisor to the 
Secretary on issues related to railroad economics, including rates, 
service and infrastructure capacity and condition. The proper role for 
FRA regarding the concerns of captive shippers is to develop 
recommendations to the Secretary for DOT's position in relevant STB 
proceedings and on proposed changes in law.
                                 ______
                                 
                               Attachment
        Amtrak Transactions Requiring FRA Subordination/Release
    Amtrak has undertaken a number of actions requiring FRA to 
subordinate or release the Department's rights under the Amtrak lien. 
These actions can be viewed as falling into three general categories:
     Actions to permit Amtrak to mortgage existing Amtrak 
assets to raise cash for operating needs.
     Actions to permit Amtrak to mortgage existing Amtrak 
assets to raise cash to make capital improvements to these or other 
assets and, hence, increase the assets' ability to meet Amtrak's 
service needs.
     Actions to permit Amtrak to acquire new equipment. These 
represent the large majority of transactions involving subordinations/
releases by FRA and are necessitated by the ``after acquired'' clause 
in the lien. That clause extends the lien to any equipment acquired by 
Amtrak. The equipment proposed for acquisition had never been 
encumbered by the Department's lien and potential lenders required as a 
condition of the financing that they have the first lien on the 
equipment. But for FRA's subordination/release of the lien on this new 
equipment, Amtrak would never have had access to it--indeed it would 
never had been built in the first place.

------------------------------------------------------------------------
                                                    Dollar value  [In
         Transactions                Date          millions of dollars]
------------------------------------------------------------------------
Transactions that permitted
 Amtrak to raise cash from
 existing assets for
 operating needs:
    Certain rights at Penn     June 2001.......             $300,000,000
     Station, NYC.
Transactions that permitted
 Amtrak to raise cash from
 existing assets for capital
 investment:
    30th Street Station        December 1987...               30,000,000
     Philadelphia.
    624 Superliner 1 and       Dec. 99-Aug. 00.              928,000,000
     Amfleet 1 (four
     transactions)*.
    10 AEM-7 electric          Oct. 00-Apr. 01.               40,000,000
     locomotives (two
     transactions).
Subordination/Release to
 permit acquisition of new
 assets:
    7 AEM-7 locomotives......  December 1988...               25,777,800
    103 Horizon passenger      September 1989..              108,150,462
     cars.
    70 Thrall material         June 1990.......               22,197,000
     handling cars.
    9 F40 locomotives........  June 1990.......               16,200,000
    18 GE Dash 8 locomotives.  June 1990.......               31,872,604
    Emeryville, CA lease.....  August 1993.....                1,248,000
    43 GE 8-40 locomotives (4  Sept 93-Dec. 93.              111,800,000
     transactions).
    Chicago Union Station      December 1993...               20,000,000
     garage.
    83 Superliners passenger   Mar 94-Dec. 94..              159,790,709
     cars (12 transactions).
    10 GE dual mode            December 1995...               34,159,605
     locomotives.
    98 GE P42 locomotives (6   Sept 96-Jun 97..              254,800,000
     transactions).
    8 GE dual mode             March 1997......               32,000,000
     locomotives.
    22 GE P42 locomotives (2   Jun 97-Oct 97...               57,200,000
     transactions).
    50 remanufactured          November 1997...                3,802,700
     Greenbrier MHCs.
    200 materials handling     November 1997...               16,681,400
     cars.
    National Operations        November 1997...                6,833,000
     Center.
    50 Viewliners low level    December 1997...               96,534,529
     sleeping cars.
    Acela high-speed trainset  December 1997...              120,000,000
     maintenance facilities.
    21 EMD (GM) F59            Aug 98-Nov 98...               47,210,034
     locomotives (2
     transactions).
    8 Alsthom Surfliner        Sep 00-Mar 01...              106,000,000
     trainsets (3
     transactions).
    Bombardier/Alsthom Acela   Nov 00-May 01...              400,064,800
     equipment (11
     transactions) 10
     trainsets, 11 high
     horsepower locomotives.
    30 GE P42 locomotives (2   Dec 00-Mar 01...               78,000,000
     transactions).
------------------------------------------------------------------------
* Frequently, large orders of equipment are divided into several
  transactions. This is because the financing commitment, and hence the
  need for FRA's subordination/release, occurs when equipment is
  accepted by Amtrak.

                               __________
 Response to Written Questions Submitted by Hon. Ernest F. Hollings to
                            Kirk K. Van Tine
                               rulemaking
    Question 1. According to the DOT Inspector General, it takes on 
average 3.8 years to complete aviation rulemakings. How will you seek 
to expedite key safety regulations?
    Answer. First, if confirmed, I will make the timely completion of 
key safety regulations one of my highest priorities, and will 
communicate that priority to the senior officials of the operating 
administrations. Second, I will personally review the status of 
rulemakings that are significantly behind schedule and make every 
effort to ensure their completion in a timely manner. In addition, it 
is my understanding that the Department has already taken a number of 
steps to help expedite rulemakings. For example, language has been 
added to the Department's Strategic Plan and the FY 2001 Performance 
Plan to stress the need to complete rulemaking actions in a timely 
manner. The heads of rulemaking agencies or offices will be expected to 
make rulemaking a priority and establish schedules for each important 
step for their significant rulemakings. All of the significant 
rulemakings will be tracked as part of a Department-wide tracking 
system that the General Counsel's Office is developing. The tracking 
system should help to identify unreasonable delays in specific 
rulemakings as well as general problems in the process, so that 
remedial steps can be taken. The General Counsel's Office has also 
developed a training course on the rulemaking process, which will 
stress the importance of completing the process in a timely manner, and 
attendance by new political appointees has been required. Finally, the 
Department will continue to explore new and innovative ways to improve 
its rulemaking process. The Department's internet-accessible rulemaking 
docket is but one example of its efforts in this regard.
    Question 2. The coordination process for rulemakings requires each 
of the modal administrations to draft rules, submit them to the General 
Counsel's office for coordination and solicitation of views of other 
offices and modes. All too often other offices and modes do not place a 
priority on the process, despite the efforts of the General Counsel's 
Office. What changes do you believe are needed to ensure that other 
offices place a high priority on critical rulemakings?
    Answer. The personal attention of the General Counsel and, where 
necessary, of the Deputy Secretary, combined with the tracking system 
described in the answer to the prior question will help ensure that 
other offices and modes give the proper priority to the clearance of 
critical rulemakings.
    Question 3. The Office of Management and Budget also reviews DOT 
rulemakings. OMB does not have statutory time constraints on its 
review. Would such limits aid in having critical rulemakings issued? 
Should critical safety rules be exempted from OMB review? Can you 
detail the types of changes the OMB has sought in rulemakings and 
determine if they have made substantive changes to the various 
significant FAA safety rules?
    Answer. If confirmed, I believe it will be important for me to 
continue the critical role of the General Counsel in dealing with OMB. 
I believe that responsible senior officials should be able to ensure 
that the deadlines established in Executive Order 12866 are met. I do 
not believe that statutory time constraints are necessary.
    Exemptions are not necessary for critical safety rules. E.O. 12866 
already provides exceptions for emergency situations or legal time 
constraints. OMB returns rules with which it has concerns for further 
consideration by the agency. Generally those concerns involve such 
things as the assumptions made or the methodologies used in economic 
analyses. OMB also will often question why other alternatives were not 
considered appropriate.
    Question 4a. Under the Wendell H. Ford Aviation Investment and 
Reform Act, Congress mandated that the FAA establish an Aircraft Repair 
and Maintenance Advisory Panel. Can you tell us the status of this 
panel? Should the time for the panel's work be extended past the 
December 31, 2001 deadline? Have they begun to meet the challenges 
mandated in Section 734 delineating their responsibilities?
    Answer. The FAA Aircraft Repair and Maintenance Advisory Committee 
has been established and is meeting monthly through the end of the 
year. However, due to the length of time required to establish the 
committee under the Federal Advisory Committee Act, the first meeting 
did not occur until June 12, 2001.
    The Committee has determined that its work centers on determining 
the amount and type of work performed by aircraft repair facilities, 
then providing recommendations to the Secretary in four areas: ``work 
performed,'' ``staffing needs,'' ``balance of trade issues,'' and 
``safety issues.''
    The general sense of the Committee is that it will be impossible to 
complete all its work properly by December 31, 2001.
    Question 4b. The FAA drafted, and had approved by DOT and OMB, a 
rule concerning foreign Repair Stations. The rule, however, was never 
issued. Can you tell us when the entire rule will be published? Can you 
also provide for the Committee the views of OMB on the rule to 
illuminate why the rule has not yet been issued?
    Answer. The FAA rulemaking action on repair stations had been 
submitted to OMB and objections had been raised by other agencies 
before the change in Administrations. It was still pending at OMB at 
the time of the change. In accordance with directives issued by the new 
Administration applying to all pending rulemakings, this rule was 
withdrawn from OMB and re-reviewed within the Department to determine 
whether changes were appropriate. The rule was re-submitted to OMB on 
July 2. I understand that DOT does not yet know OMB's views.
    Question 5. The FAA and DOT recently issued a request for comments 
on congestion pricing options for LaGuardia's airport. While the notice 
specifically acknowledges that ``grant-funded airports be available for 
public use on fair and reasonable terms and without unjust 
discrimination could continue to make it difficult for airports to 
design workable market-based pricing regimes'' and also notes that 
Federal laws ``may restrict'' pricing options, nowhere does the 
document categorically state that airports are preempted from 
interfering with routes, rates and service under the Airline 
Deregulation Act, and that efforts to use price to affect such items 
would be specifically preempted. What role will you play in reviewing 
the comments and views on this matter? While existing law is clear, 
will the General Counsel state that airports are preempted from 
deploying such pricing schemes?
    Answer. If confirmed as General Counsel, I will work closely with 
the FAA on identifying those options that represent the best public 
policy solutions for controlling congestion at LaGuardia. We will then 
address whether they may be implemented in accordance with existing 
legal and international requirements or whether changes might be 
advisable.
    While Federal law is clear that a State or airport owner may not 
enact or enforce laws related to air carrier rates, routes, or 
services, this prohibition does not limit a State or an airport from 
carrying out its proprietary powers and rights. 49 U.S.C. 47173(b)(1) 
and (3). An airport operator, therefore, may impose fees, terms and 
conditions on air carriers that are reasonable, nonarbitrary, 
nondiscriminatory, intended to advance a local interest, and that do 
not impose an undue burden on interstate commerce. 49 U.S.C. 41713(b). 
It is possible that a properly structured peak pricing program whose 
objective is to align the number of aircraft operations with airport 
capacity could be reasonable and not unjustly discriminatory under 49 
U.S.C. 47107(a)(1) and 47129 as well as under the U.S. international 
air services obligations and the International Civil Aviation 
Organization's policies.
    However, the Department has the legal authority and obligation to 
review and carefully consider such programs, and I would ensure that 
the Department exercises that authority with respect to any plan. As 
stated in its June 12 Federal Register notice on LaGuardia options,

        [T]he FAA does not propose nor endorse the Port Authority's 
        options at this time. Federal laws, regulations, and U.S. 
        international obligations presently in place may, in fact, 
        prevent PANYNJ from imposing these proposals. In this notice we 
        seek suggestions on effective, comprehensive solutions that 
        represent the best public policy for controlling congestion and 
        allocating operating rights at LGA, and we will consider 
        pertinent legal issues in any policy options ultimately put 
        forward for adoption. 66 FR 31736.

    I will ensure that, if confirmed as General Counsel, the 
Department's actions on this matter are based on sound legal analysis.
    Question 6. Recently Secretary Mineta indicated that the 
Performance Based Organization work should be stopped until a Chief 
Operating Officer is selected. Disputes over what offices should be 
included in the PBO continue. The ATC system is at its basic function a 
safety responsibility of the Federal government, as former President 
Clinton indicated in forming the PBO, specifically recognizing the 
inherently Governmental nature of the ATC system. Can you tell us the 
status of the hiring of the COO?
    Answer. It is possible that there may be some confusion about the 
Performance Based Organization (PBO) due to media reports. It is my 
understanding the FAA's work on establishing the air traffic PBO is 
ongoing and has not been delayed because of the search to fill the 
position of the Chief Operating Officer (COO). With respect to that 
selection effort, I am told the FAA has contracted with an executive 
recruiting firm to conduct the search for the COO. Internal and 
external sources are being canvassed to identify potential candidates 
for the position. Several potential candidates have already been 
identified and they are being approached to determine their interest in 
the position. The Administrator will conduct interviews and Secretary 
Mineta will be involved in approving the final selection of the COO.
    Question 7a. Many members of this Committee have called for action 
on a number of Department of Transportation regulatory initiatives. 
Unfortunately, many new or revised rules have never been acted and have 
dragged on too long. Below are questions on a few of those regulatory 
issues. When can we expect completion of a final rule requiring the 
safety certification of small airports?
    Answer. The agency expects to issue the final rule not later than 
November 3, 2001. Issuance by that date will ensure that the FAA 
complies with requirements of the Wendell H. Ford Aviation Investment 
and Reform Act of the 21st Century. Among other things, the Act 
requires issuance of the rule within one year of the close of comment 
period on the Notice of Proposed Rulemaking.
    Question 7b. What is the status of requiring the deployment of 
collision avoidance technology on all-cargo aircraft?
    Answer. The document is currently in executive level coordination 
and should be issued sometime this summer.
    Question 8. The safety of Mexico-domiciled cross-border truck and 
bus operators is a growing concern in this Congress. Please explain how 
the Department intends to address the myriad unresolved safety issues 
associated with opening our border to Mexican carriers. This is 
especially important to the Committee in light of recent criticism 
directed at Federal Motor Carrier Safety Administration proposals.
    Also regarding cross-border transportation, is there a Memorandum 
of Understanding between the DOT and the Department of Labor to ensure 
that all Mexico-domiciled truck and bus carriers also comply with all 
U.S. federal labor requirements?
    Please provide the Committee with a list of all the DOT and DOL 
regulations that must be complied with by Mexico domiciled truck and 
bus carriers. Also provide the Committee with a status report on 
regulatory harmonization talks between the United States and Mexico. 
Specifically, include the status of those discussions concerning 
commercial drivers licenses, hours of service, computerized tracking of 
driver records, environmental regulations, vehicle inspections, driver 
training, drug and alcohol testing and insurance.
    Answer. I understand that the Department is developing a 
comprehensive plan to ensure that the NAFTA cross-border provisions are 
implemented effectively and on time without compromising highway 
safety. To guide the development and implementation of the plan, the 
Federal Motor Carrier Safety Administration (FMCSA) has established 
several teams to identify and implement the various near- and long-term 
program activities necessary to fully integrate Mexican operations into 
our operating, safety, and enforcement programs. The activities 
encompassed within the plan include very specific screening and 
monitoring procedures to ensure safe carrier, vehicle and driver 
operations in the U.S. The Department's plan continues to be refined as 
it analyzes comments on rules that have been proposed and circulated 
for public comment. I believe the Department recognizes that this is a 
matter of great concern to Congress, and it intends to work in the 
weeks and months ahead to assure that implementation can take place 
while fully addressing any existing safety concerns.
    Mexican trucks and drivers operating in the United States must 
comply with the full range of Federal and State safety and operating 
requirements applicable to U.S. carriers. These include requirements 
concerning driver qualifications; vehicle inspection, maintenance and 
repair; driver hours of service; drug and alcohol testing; and 
insurance. Mexican carriers operating in the U.S. must maintain 
insurance on file with the FMCSA. The companies providing insurance 
must be licensed or admitted to issue bonds or underlying insurance 
policies in a U.S. State.
    The North America Free Trade Agreement (NAFTA) assures a high level 
of safety in land transportation by encouraging the upward 
harmonization of the safety standards in effect in all three countries. 
Harmonization of motor carrier safety standards between the United 
States and Canada and the United States and Mexico is an ongoing 
process that pre-dates the NAFTA. The United States and Canada have 
worked through the U.S.-Canada Motor Carrier Consultative Mechanism, 
established in 1982. The United States and Mexico have cooperated 
through the U.S.-Mexico Transportation Working Group, established in 
1989. A major accomplishment of these efforts is the establishment of a 
memorandum of understanding (MOU) between the United States and Mexico 
on the mutual recognition of commercial driver's licenses. The MOU 
ensures that drivers of trucks and buses from both countries have 
comparable safety and operating knowledge and skills and do not have 
more than one license. The United States has a similar reciprocity 
agreement with Canada.
    The U.S.-Mexico Transportation Working Group, with Canadian 
participation already occurring on as-needed bases, evolved into the 
Land Transportation Standards Subcommittee (LTSS) established in the 
NAFTA to attempt to make the safety regulations of all three countries 
as compatible as possible. The NAFTA established working groups to 
address vehicle and driver standards, vehicle weights and dimensions, 
traffic control devices, rail safety, and transportation of hazardous 
materials. To address issues not specifically assigned to the LTSS by 
NAFTA, the three NAFTA parties have created a related group, the 
Transportation Consultative Group (TCG). This group (comprised of five 
separate working groups) has been working in cooperation with the LTSS 
to address issues related to cross-border facilitation, rail 
operations, electronic data exchange, application and exchange of 
information on advanced technologies and maritime and port policies.
    The majority of the discussions related to commercial motor vehicle 
safety regulations and programs fall under LTSS #1, Commercial Motor 
Vehicle and Driver Standards and Motor Carrier Compliance, and TCG #3, 
Automated Data Exchange. As part of the work accomplished under LTSS 
#1, the three countries reached agreement in the following areas 
critical to our mutual efforts to ensure cross border safety:
    1. Vehicle and driver safety. To adopt the out-of-service criteria 
promulgated by the Commercial Vehicle Safety Alliance as the minimum 
level of mechanical fitness to be sustained by all commercial vehicles 
engaged in interstate or foreign commerce.
    2. Age. To establish 21 years of age as the threshold requirement 
to operate a commercial motor vehicle in international commerce among 
the NAFTA countries.
    3. Language. In recognition of three countries language differences 
it is the responsibility of the driver and the motor carrier to be able 
to communicate in the country in which the driver/carrier is operating 
so that safety is not compromised, and
    4. Information systems. To develop and implement an electronic 
exchange of commercial driver information commencing initially with 
driver status, with the ultimate objective of including conviction 
information and driver records.
    The harmonization efforts have resulted in major improvements to 
Mexico's commercial motor vehicle compliance and enforcement program. 
Mexico has trained inspectors and instructors in U.S. safety inspection 
techniques; developed electronic safety databases to help monitor the 
safety compliance of carriers and drivers and facilitate exchange of 
safety information between Mexico and the United States; and published 
regulations that establish safety, operating, and logbook requirements 
for carriers and drivers.
    As a member of the Commercial Vehicle Safety Alliance (CVSA), 
Mexico has adopted inspection procedures similar to procedures that 
will be used to inspect Mexican vehicles while they are in the United 
States. Mexico will enforce them with respect to Mexican and U.S. motor 
carriers operating south of the border and help ensure that the 
majority of vehicles and drivers are in compliance with the safety 
standards even before they reach the border.
    Mexico has developed a comprehensive safety information system to 
monitor the compliance of its commercial carriers, vehicles, and 
drivers. The FMCSA has provided technical assistance in the design, 
development and implementation of these systems, in part, to ensure 
that they are comparable to U.S. systems and U.S. enforcement personnel 
have access to license, registration, and safety performance 
information on carriers and drivers that operate or plan to operate in 
the U.S. These systems include a driver's license module containing a 
centralized database of all Licencia Federal holders that includes 
license class and status information, driver identification data, and 
medical examination information; a centralized registration database of 
carriers and vehicles that contains carrier and vehicle identification 
and Mexican operating authority information; and a centralized safety 
performance database that includes information on vehicle inspections, 
carrier compliance reviews, convictions, and accident reports. 
Currently, U.S. enforcement personnel have on-line access to the 
driver's license and carrier and vehicle registration databases. Access 
to the safety performance information should be available by August 
2001.
    I am told that there is no DOT-Labor Department (DOL) Memorandum of 
Understanding on NAFTA's implementation. Rather, DOL administers 
Federal labor laws that apply to foreign commercial vehicle operators 
and their helpers who work in U.S. territory. Important statutes that 
directly apply to these persons include the Fair Labor Standards Act 29 
U.S.C. 201 et seq., the Occupational Safety and Health Act of 1970 29 
U.S.C. 651 et seq., and the whistleblower provision of the Surface 
Transportation Assistance Act of 1982, 49 U.S.C. 31105.
    DOL applies the minimum wage (which currently requires wages of 
$5.15 per hour) and child labor provisions of the Fair Labor Standards 
Act to foreign truck drivers and their helpers working in the United 
States for a substantial period of time. Wages for all hours worked 
must be paid free and clear of impermissible deductions or expenses for 
the costs of operating the truck or traveling on the road. The child 
labor provisions restrict persons under age 18 from working as drivers 
or helpers on trucks. The U.S. Department of Transportation (DOT) 
regulates hours of service and age requirements for commercial drivers.
    The Occupational Safety and Health Act (OSHA) applies to the 
working conditions of foreign truck drivers when they are in the United 
States. In general, OSHA requirements apply only to smaller trucks, 
since DOT administers laws with respect to the safety of commercial 
motor vehicles (which include vehicles with a gross vehicle weight 
rating exceeding 10,001 pounds). OSHA's hazardous materials 
requirements apply to any vehicle designed to transport hazardous 
materials that require placarding under DOT regulations.
    The whistleblower provision of the Surface Transportation 
Assistance Act (STAA) prohibits retaliatory discharge or other 
discrimination against drivers of commercial motor vehicles, and other 
employees whose work affects the safety of such vehicles, because they 
complain about unsafe vehicles, testify in proceedings related to 
safety violations, or refuse to drive in violation of safety 
regulations or when conditions create a reasonable apprehension of 
serious injury.
    While there is no formal Memorandum of Understanding between DOT 
and DOL regarding Mexican carrier compliance with U.S. labor laws, I 
understand that the two departments are working cooperatively on this 
important issue. For example, in a Notice of Proposed Rulemaking 
published on May 3, 2001, DOT proposes to require Mexican motor 
carriers to certify on their applications that they will provide 
information requested by DOL within 72 hours of the request. The 
Department will continue to work with DOL, and consider the possibility 
of a formal arrangement if necessary.
    Question 9. Rail safety reauthorization has been stalled in the 
last several years. Please update the Committee on the Department's 
work to address rail safety issues such as: harassment and intimidation 
against workers who report safety problems and violations; improving 
accident and incident reporting systems; fatigue management; employee 
training and certification; and increased inspector staffing.
    Answer. Based on limited exposure to the activities of the 
Department's Federal Railroad Administration (FRA), I can provide some 
information about the rail safety issues you raise. To prevent 
harassment and intimidation of employees for reporting safety hazards, 
FRA actively employs the partnership methodology of the Safety 
Assurance and Compliance Program (SACP) in an effort to foster a 
positive safety culture in the railroad environment. These efforts are 
intended to encourage the free flow of information within the railroad 
to ensure proper attention to safety problems.
    I am told that, to improve accident and incident reporting systems, 
a working group of FRA's Railroad Safety Advisory Committee (RSAC) is 
preparing a draft of a proposed rule to conform FRA's accident 
reporting regulations (49 CFR Part 225) to revised regulations of the 
Occupational Safety and Health Administration. The working group will 
also recommend appropriate revisions to the FRA Guide for Preparing 
Accident/Incident Reports. Furthermore, FRA routinely audits railroad 
accident and injury records, reports, and procedures. In some cases, 
the agency has cited a railroad for hundreds of thousands of dollars in 
penalties for failure to report accidents and injuries properly.
    To deal with the fatigue of safety-sensitive employees, FRA is 
utilizing SACP to encourage cooperative efforts on specific railroads, 
exchanging information on best practices through the North American 
Rail Alertness Partnership, and funding related research and 
development projects. Still, the National Transportation Safety Board 
has estimated that fatigue may be a contributing factor in nearly one-
third of all accidents caused by human factors. It may be that the rail 
industry's voluntary efforts to manage fatigue have not been fully 
successful.
    To deal with employee training and certification issues, I 
understand that FRA is enforcing existing regulations, such as 49 CFR 
Part 240 on locomotive engineer certification, and FRA has incorporated 
additional training requirements not yet in effect in (i) the Passenger 
Train Emergency Preparedness rules issued in 1998, (ii) the Passenger 
Equipment Safety Standards published in 1999, and (iii) the revised 
power brake standards for freight and other non-passenger service that 
were published January 17, 2001. In addition, FRA regularly monitors 
railroads' training and testing on their operating rules. Also, the 
issue of training for safety-sensitive railroad workers is being 
debated in the RSAC. FRA is considering the merits of initiating a 
rulemaking in that area.
    As for increased inspector staffing, I understand that the 
Department is seeking 12 additional rail safety inspector positions in 
its Fiscal Year 2002 budget. FRA must intensify railroad inspection 
efforts in order to reverse the trend of increasing train accident 
rates. The additional field inspector positions will primarily support 
FRA's track safety program, with a particular focus on rail lines that 
carry high passenger traffic. Furthermore, the General Accounting 
Office (GAO) has called on FRA to increase the number of site-specific 
railroad inspections. In a report entitled, Rail Transportation: 
Federal Railroad Administration's New Approach to Railroad Safety (GAO/
RCED-97-142), GAO urged FRA to assign additional resources to railroad 
bridge integrity, standards for new railroad control and high-speed 
technology, and efforts to reduce levels of railroad employee workplace 
injuries. If FRA receives the additional inspector positions, FRA will 
have a greater ability to address the growing track safety problem and 
meet some of GAO's additional expectations.
    Question 10. The future of Amtrak is obviously a major concern to 
this Committee. Not a single passenger rail system in the world can 
operate without some form of public financing. What are your thoughts 
on ensuring that we maintain a national passenger railroad that is 
adequately financed and able to keep up with growing capital needs? 
Also, what are your thoughts on the pending Amtrak bonding legislation?
    Answer. I agree with Secretary Mineta's assessment and that of the 
DOT Inspector General, who has stated that Amtrak is unlikely to meet 
the deadlines for self-sufficiency specified in 1997 legislation. 
Amtrak's need to conclude the recent Pennsylvania Station mortgage 
raises serious concerns about the company's ability to meet its 
operating and capital needs. Passenger rail service is a vital link in 
the American transportation network, and the Pennsylvania Station 
mortgage incident highlights the need to identify structural reforms 
and develop solutions that improve its long-term financial health. 
Formal consideration of what that rail transportation network should 
be, what we can afford, the reforms that may be necessary, and how they 
will be implemented should take place soon, well in advance of the 
expiration of the current Amtrak authorization. As for the pending 
Amtrak bonding legislation (S. 250), the Administration has not 
developed a position on currently proposed legislation to provide 
federal financial assistance for high-speed rail development, so I must 
defer any comments on this legislation or on the appropriate role the 
federal government should play in high-speed rail development. My view 
is that the question of capital financing tools is just one more 
implementation issue that first depends on the development and 
articulation of a national passenger rail policy. Once that policy is 
developed, then alternatives can be examined for public financing of 
capital expenses of passenger rail.
    Question 11. We continue to be concerned with the safety of 
commercial passenger vans carrying 15 or more passengers. A rulemaking 
is still pending before the Department as mandated by TEA-21. When will 
a Final Rule be completed and published?
    Answer. I am told that the Department expects that a final rule 
will be issued in the Fall of 2001. A Notice of Proposed Rulemaking was 
published January 11, 2001, with comments due April 11. The Federal 
Motor Carrier Safety Administration received 25 comments to review.
    Question 12. There is an ongoing effort by the DOT and the 
Department of Labor to ensure the safety of flight attendants. In fact, 
last year a Memorandum of Understanding was signed committing the two 
agencies to identify and apply, as appropriate, Labor Department (OSHA) 
requirements to the flight attendant workplace. The first phase of this 
joint effort was completed last December. Please update the Committee 
on when this initiative will be completed.
    Answer. Current activity involves the FAA and the Department of 
Labor holding joint meetings. The Department of Labor's continuing 
input forms an important part of the process. Another step is the 
review of the final document by general counsel of both agencies. The 
report is due December 2001.
    Question 13. Section 725 of AIR-21 required a study on cabin air 
quality to be initiated within 60 days of enactment (April 5, 2000). 
What is the status of this study?
    Answer. The cabin air quality study was initiated within 60 days of 
the enactment of the AIR-21 legislation, as required by section 725. 
The study is nearing completion, with the final report due by September 
25, 2001.
                               __________
    Response to Written Questions Submitted by Hon. John McCain to 
                            Kirk K. Van Tine
                                surface
    Question 1. As you know, the Administration has announced its 
intention to fulfill the cross-border traffic requirements of NAFTA and 
will open the Border by the end of the year. What is the Department 
doing to prepare for the anticipated opening of the border? Will the 
Administration submit a proposal to Congress to authorize additional 
funding for border-related activities or seek other related authority?
    Answer. I am aware that the Federal Motor Carrier Safety 
Administration has prepared a comprehensive plan to ensure that the 
NAFTA cross-border provisions are implemented safely and on time. The 
plan sets forth specific screening and monitoring procedures to ensure 
that Mexican vehicles and drivers comply with Federal Motor Carrier 
Safety Regulations when they operate in the U.S. The Administration has 
sought a significant increase in resources for FY2002 activities to 
prepare for the safe entry of cross-border commercial traffic.
    Some of the major program strategies, activities, and milestones 
planned or undertaken to prepare for the opening of the Southern border 
to commercial traffic follow:
    1. Rulemaking. On May 3, 2001, DOT proposed regulations governing 
the application process for Mexican-domiciled carriers that wish to 
operate in the U.S. and the process by which DOT will review the safety 
records of carriers during the first 18 months of their U.S. 
operations. The new requirements will ensure that carriers understand 
and are able to comply with U.S. requirements. Final regulations will 
be published by November 2001.
    2. Resources. To support comprehensive State and Federal safety 
enforcement activities at the Southern border, the Department requested 
$88.2 million in additional funds in its FY 2002 budget. The request 
includes $13.9 million to hire 85 additional Federal staff to perform 
safety inspections and conduct safety audits of Mexican carriers. The 
Department also requested $54 million to provide the Federal share for 
the construction and improvement of State commercial vehicle inspection 
facilities. Currently 23 border crossings with truck traffic do not 
have permanent inspection facilities. In addition, the Department 
requested $2.3 million for immediate construction of areas to park 
commercial vehicles placed out-of-service for safety violations. The 
Department is also proposing that an additional $18 million be made 
available to support the staffing of State facilities and increase 
State motor carrier border inspection activities. All Federal 
enforcement personnel will be hired and trained by December 2001.
    3. Education and Outreach. The FMCSA, in concert with the border 
States, will be conducting a series of safety compliance seminars to 
educate Mexican carriers and drivers on compliance with Federal and 
State regulations. The seminars will include a detailed explanation of 
new application requirements. These seminars will supplement ongoing 
efforts to translate and distribute educational materials to Mexican 
carriers and drivers. The seminars will be conducted from August to 
November 2001.
    4. Application Processing Procedures. Procedures are being 
developed to ensure that all applications are evaluated thoroughly, 
accurately, and consistently, and that only qualified carriers are 
approved to operate. Procedures will be developed by September 2001. An 
application-processing center will also be established by September 
2001.
    5. Safety Audit Procedures. To ensure Mexican carriers operate 
safely, the FMCSA rulemaking requires that an audit of each carrier's 
safety performance be conducted. Within 18 months of receiving 
authority, all Mexican carriers must submit to a safety audit by 
providing records to a Federal safety investigator and participating in 
a thorough review of their operating procedures. Procedures for 
conducting the review will be in place by August 2001.
    6. Safety Databases. The FMCSA will focus on improving the safety 
information systems available to Federal and State enforcement 
officials in order to verify application information directly with 
Mexican transportation officials, automate the review of applications, 
provide real-time safety performance and other data to Federal and 
State inspectors and effectively monitor the safety performance of 
Mexican motor carriers operating in the United States. All inspectors 
will have access to available U.S. and Mexican driver licensing, 
carrier, and other safety databases by January 1, 2002.
    7. NAFTA Coordination. The Department of Transportation will 
continue to work with Mexico to increase regulatory compatibility 
between our countries, establish cooperative agreements on the exchange 
of safety information, and provide technical assistance to build 
compatible compliance and enforcement programs in Mexico. The adoption 
and implementation of comparable programs in Mexico will provide 
greater assurance that vehicles entering the U.S. are already in 
compliance with safety standards.
    Question 2. The astronomical costs of transportation projects 
should be a top concern to the Department. The cost overruns associated 
with the Boston Central Artery Tunnel Project have risen to over $14 
billion, and those costs will likely continue to rise before the 
project is completed. The Big Dig project must serve as an example for 
all of us on the critical importance of federal oversight of federally 
funded transportation projects.
    In addition to the Big Dig, the DOT is overseeing 41 other 
megaprojects. What actions will you take to ensure greater federal 
oversight on all federally-funded transportation projects--from 
airports to shipyards to highway projects?
    Answer. I believe it is critical that the Department be a careful 
steward of federal funds. Recipients of DOT funds and DOT internal 
managers must be held accountable for meeting cost and schedule goals. 
Since projects will not always proceed as planned, the Department 
should have early warning of problems with these large projects and 
should play an active role in developing solutions for those problems.
    I understand that the Department created a Task Force to strengthen 
the oversight process and that several recommendations have been 
developed regarding improvements in the quality of the oversight 
process and selection of the managers who perform the oversight. If 
confirmed, I would expect to work with other members of Secretary 
Mineta's management team to ensure that DOT oversight is strengthened.
    Several of the operating administrations within DOT have processes 
in place to oversee additional infrastructure projects that are not 
categorized as mega-projects. Strengthening the process for mega-
projects will also serve as a model for strengthening the oversight of 
these smaller projects.
                             administrative
    Question 3. Over the last several years, it has become apparent 
that it is difficult, at best, to get reports and regulations cleared 
for release by DOT. Reports to Congress are regularly late and 
regulations are often held up for months as they make there way through 
the various agencies within DOT. Apparently even DOT agencies that have 
no role in the development, oversight, or enforcement of regulations 
are routinely required to review and sign off on regulations and 
reports before clearance. (a) What action would you take to improve 
interagency communication and cooperation within DOT and streamline the 
review process for regulations and reports? (b) What will you do to 
help ensure that reports to Congress are completed and submitted in a 
timely manner?
    Answer. Secretary Mineta has committed the Department to moving as 
expeditiously as possible in rulemakings, consistent with its 
obligation to ensure that DOT agencies comply with all statutory 
requirements for rulemaking. As General Counsel, I would play a 
significant role in accomplishing this management objective. On the 
recommendation of the DOT Inspector General, the Department has 
instituted a new tracking system for regulations. That system became 
operational on May 1. It is capable of generating a basic set of needed 
reports, and the Department intends to expand its capabilities over the 
coming months.
    Secretary Mineta's frustration with delinquent reports from the 
Department while serving as a Member of Congress clearly demonstrated 
to him the need for accurate, timely information as a key component for 
decision-making by Congress. Additionally, the Deputy Secretary has 
made timely regulatory action by the Department and its modes a very 
high priority, in line with recent recommendations of the Inspector 
General. The DOT Inspector General (IG) studied delay in DOT rulemaking 
(report issued July 20, 2000), and its recommendations form the basis 
for improved interagency communication and cooperation. The IG found 
areas where there were clear opportunities for improving efficiency and 
effectiveness and made several recommendations, all of which the 
Department has implemented or is implementing. If confirmed as General 
Counsel, I commit to make a sustained effort in this area one of my 
highest priorities.
    It is my understanding that the various administrations within DOT 
are not routinely asked to review the rulemaking actions of other 
administrations within DOT unless the rule making could directly affect 
programs within their immediate jurisdiction. For example, FRA may be 
asked to review an FMCSA rulemaking on railroad crossings, and NHTSA 
may review an FAA rulemaking on child seats. In addition, it is my 
understanding that the Office of the Secretary now limits the review of 
proposed regulations and reports only to those offices within the 
Department that could be affected. In coordinating the regulatory 
process for all the modes, I would attempt to ensure that the process 
works efficiently, and that regulations are developed and cleared in a 
timely manner.
    Question 4. I trust that you clearly understand the difference 
between statutory and report language. What steps will you take at the 
Department to ensure that the modal administrations treat report 
language as it is intended, an expression of Congressional interest, 
rather than having it be treated as a Congressional mandate?
    Answer. I can assure you that I clearly understand the difference 
between statutory and report language, particularly when it comes to 
the naming of specific projects in report language. In such instances, 
only statutory language is law; report language is not law but simply 
an expression of Congressional interest. If confirmed, I will be sure 
that the Chief Counsel offices in the modal administrations understand 
this as well.
                                maritime
    Question 5. The President has proposed as part of the 
Administration's FY 2002 budget to zero out funding for Title XI 
maritime loan guarantee program. Private maritime interests who support 
the program recently published a report which argues that the program 
has been a net revenue raiser for the federal government? I am 
concerned the findings in the report have not been subjected to any 
outside independent analysis. If confirmed, what will you do in order 
to insure that such reports, which clearly counter the Department's 
position, are responded to fully and in a timely manner?
    Answer. If confirmed, I will attempt to ensure that, when the 
Department is requested to evaluate a private report, it will perform 
an objective, independent, and balanced evaluation, and that the 
Department's analysis will be completed in a timely manner. My 
understanding is that an evaluation of the report mentioned is underway 
at this time in the Office of the Assistant Secretary for Budget and 
Programs.
                                aviation
    Question 6. The FAA recently published several options for managing 
excessive demand at LaGuardia airport. Two of the options were 
developed by the Port Authority of New York and New Jersey, which 
operates the airport. Those options involved market-based solutions 
wherein the Port Authority would charge congestion fees or hold an 
auction for take off and landing ``reservations.'' I believe that any 
attempt to manage demand at LaGuardia must be done under the authority 
of the federal government because local authorities are legal preempted 
from imposing such solutions. Do you agree that airports do not, under 
federal law, have authority to establish their own remedies, such as 
congestion fees, for managing demand for air services?
    Answer. The extent of an airport proprietor's powers to set fees to 
manage demand for air services raises complex legal issues as well as 
difficult issues with regard to our international aviation obligations. 
The FAA has the statutory authority to regulate navigable airspace and 
to assure efficient air traffic management. 49 U.S.C. 40103. An airport 
proprietor has the right to impose fees, terms and conditions on 
operators at its airport that are reasonable, nonarbitrary, 
nondiscriminatory, intended to advance a local interest, and do not 
impose an undue burden on interstate commerce. 49 U.S.C. 41713(b). It 
is possible that a properly structured peak pricing program whose 
objective is to align the number of aircraft operations with airport 
capacity could be reasonable and not unjustly discriminatory under 49 
U.S.C. 47107(a)(1) and 47129 as well as under the U.S. international 
air services obligations and the International Civil Aviation 
Organization's policies.
    However, the Department has the legal authority and obligation to 
review and carefully consider such programs, and I would ensure that 
the Department exercises that authority with respect to any plan. As 
stated in its June 12 Federal Register notice on LaGuardia options,

        [T]he FAA does not propose nor endorse the Port Authority's 
        options at this time. Federal laws, regulations, and U.S. 
        international obligations presently in place may, in fact, 
        prevent PANYNJ from imposing these proposals. In this notice we 
        seek suggestions on effective, comprehensive solutions that 
        represent the best public policy for controlling congestion and 
        allocating operating rights at LGA, and we will consider 
        pertinent legal issues in any policy options ultimately put 
        forward for adoption. 66 FR 31736.

    I understand that, at present, FAA is working with the Port 
Authority in seeking solutions to the congestion at LaGuardia; the Port 
Authority has not acted to impose congestion pricing or other market-
based options on its own. The FAA's current effort is to attempt to 
identify those options that represent the best public policy solutions 
for controlling congestion at LaGuardia, and then address whether they 
might be implemented in accordance with existing legal and 
international requirements or whether changes might be advisable. I 
would ensure that I am kept informed as this subject develops, and that 
the Department's actions are based on sound legal analysis.
    Question 7a. As you may know, the bilateral air services agreement 
between the United States and United Kingdom, known as Bermuda 2, 
restricts competition and is heavily slanted in favor of British air 
carriers. The U.S. has tried unsuccessfully for many years to 
liberalize the relationship. In recent weeks, there has been some talk 
that negotiations may be back on track as American Airlines and British 
Airways may make another attempt to obtain antitrust immunity for it 
international alliance. What is your position with regard to the U.S./
U.K. bilateral, and what will you do to ensure that the United States 
is not put at a disadvantage with respect to access at Heathrow?
    Answer. I understand that replacing the restrictive U.S.-U.K. 
aviation agreement with an ``Open-Skies'' agreement is a U.S. aviation 
priority. DOT met informally with the British on June 26 and 27 to 
discuss a possible resumption of talks, and it was agreed that the 
parties would not fix dates at this point, but would be flexible and 
prepared to meet as and when circumstances develop further. Meanwhile, 
DOT continues to concentrate its efforts on partners that are ready for 
liberalization.
    I recognize the importance to U.S. carriers of access to Heathrow. 
I also recognize that Heathrow is a highly congested airport and that 
it is critical for the slot allocation system to continue to be 
transparent and non-discriminatory. In a liberalized environment, the 
ability of U.S. carriers to establish a competitively effective 
presence at Heathrow will be a key consideration if British Airways 
seeks antitrust immunity.
    Question 7b. What are the chances that the U.S. will be able to get 
a more liberalized agreement, or even ``open skies,'' with regard to 
the British?
    Answer. Although I do not at present have access to full 
information on this topic, it appears unclear whether the U.K. 
government is ready to engage in serious talks leading to open skies.
    Question 7c. What is your position on changing the 25-percent 
limitation on foreign investment in U.S. airlines?
    Answer. The current 25-percent limit on foreign voting interest in 
U.S. air carriers is of course a part of U.S. aviation law, so any 
possible change would entail close consultation between the 
Administration and interested members of Congress. I am aware that 
there is a divergence of opinion on this issue. Proponents cite the 
existing limit as an obstacle to further liberalizing U.S. carriers' 
access to foreign markets, while others raise concerns about possible 
impact on our defense posture and other adverse effects. If confirmed, 
I would form an opinion on this important question only after I have 
had an opportunity to make a thorough study of all the relevant issues, 
in consultation with governmental and private-sector stakeholders.
    Question 7d. What are your views on cabotage, and do you believe 
U.S. air carriers would be at an advantage or disadvantage if the 
Congress changed the cabotage laws?
    Answer. This is a fundamental issue for both domestic and foreign 
aviation policy, as well as for the transportation parties concerned. I 
am familiar with the divergence of views in this area. Globalization of 
the airline industry, the growing number of carrier alliances, and 
consolidation concerns, for different reasons, have all spurred calls 
to reevaluate constraints that limit the markets that airlines can 
enter.
    Modifying or removing the cabotage prohibition could result in new 
sources of competition for U.S. aviation consumers and if adopted 
globally, contribute to a more open international aviation regime on a 
worldwide basis. However, there are also important competing factors, 
such as our defense posture, that argue against any change in the 
cabotage prohibition.
    I believe that U.S. airlines have shown both domestically and 
internationally that they are effective, adaptable competitors. I would 
expect such U.S. carrier competition to continue if the cabotage laws 
were changed. However, the specifics of any ``advantage or 
disadvantage'' would also depend on how Congress changed the cabotage 
laws and the international Response to the change.
    Question 8a. In its January 2001 report on airline competition, the 
Department of Transportation discussed taking aggressive action to open 
up airport facilities to make possible new and increased airlines 
services, and thereby promote competition. What actions to open airport 
facilities do you believe DOT could take in order to promote 
competition?
    Answer. Beginning with Fiscal Year 2001, certain large- and medium-
hub airports must submit competition plans in order for the FAA to 
approve the collection of a new Passenger Facility Charge (PFC) or for 
a grant to be issued under the Airport Improvement Program (AIP). The 
underlying purpose of this statutory requirement--contained in AIR 21 
and based on our report ``Airport Business Practices and their Impact 
on Airline Competition''--is for those airports that are dominated by 
one or two carriers to demonstrate how they will provide for new-
entrant access and expansion of incumbent air carriers.
    To date, DOT has reviewed and provided extensive comments on 38 
competition plans, resulting in airport officials adopting business 
practices that are more ``entry friendly.'' DOT has met with airports 
that have deficient plans to provide them with detailed comments as to 
what actions they need to take to meet their statutory obligations 
regarding the content of the competition plan. Finally, DOT developed 
an ``implementation audit plan,'' required by AIR 21, in light of the 
possible need to take more stringent legal/regulatory actions against 
those airports not meeting their legal obligations.
    Question 8b. In your view, is the perimeter rule at Reagan National 
Airport an anticompetitive barrier to competition?
    Answer. While a principal tenet of airline deregulation is open 
competition and the elimination of economic restrictions such as the 
perimeter rule, the Department's position has been that modification to 
the perimeter rule at Reagan National Airport should be handled by 
Congress and the local authorities. I agree with that position.
    Question 9a. For each of the past four years, DOT has extended the 
current Computer Reservation System (CRS) rules for a year without 
addressing the concerns that it raised about the rules' applicability 
to Internet sales and other issues. Do you believe the CRS rules should 
apply to Internet distribution of airline tickets?
    Answer. Because the Department recognizes the importance of the 
question of whether the CRS rules should be applied to the Internet 
sale of airline tickets, the Department asked the parties in its 
pending CRS rulemaking to comment on this issue. I understand that many 
parties submitted comments on this issue which disagree on whether 
regulation is necessary. I have not yet had an opportunity to review 
those comments but would carefully do so before I would advise the 
Secretary on the rulemaking issues.
    Question 9b. When will DOT act to finalize changes to the CRS 
rules?
    Answer. The Secretary fully recognizes the importance of completing 
the CRS rulemaking. He has instructed the staff to move forward on the 
rulemaking and develop a rulemaking proposal that can be forwarded to 
OMB. If confirmed, I intend to ensure that the staff promptly carries 
out the Secretary's directions.

                               __________

                [From the New York Times, June 24, 2001]

 The World: Free Trade's Promise In Latin America; The Poor Survive It 
                          All. Even Boom Times

                          (By Anthony DePalma)

    For months now, President Bush has been asking Congress for 
something really big: authority to negotiate the largest free trade 
agreement the world has ever seen, one that would create a market of 
800 million people in the Americas, from the Arctic to Antarctica. In 
exchange, he has promised that the trade zone will not only create 
markets for the United States, but will fortify democracy in Latin 
America and spread the economic benefits equitably.
    Last week, it became clear he has a big fight ahead. The capital 
was flooded with critics who fear the deal's impact on workers' rights 
and environmental standards, and supporters eager for bigger markets 
and increased economic opportunities.
    But their debate barely touches a far more fundamental question: 
does the combination of democracy and free enterprise guarantee 
achievement of the larger goal--higher living standards? In Latin 
America, the answer often is no.
    On the surface, descriptions of trade, democracy and shared 
prosperity as inevitably linked represent a logical bind for the Bush 
administration. The Western Hemisphere already is more politically 
democratic than ever; excluding Cuba, every nation has an elected 
government. And the markets have never been more open; most governments 
have sold state-owned businesses, cut tariffs and torn down other walls 
that protected national industries.
    What has this produced? According to the United Nations Economic 
Commission for Latin America and the Caribbean, an enormous number of 
Latin Americans--224 million of them--live in poverty. They represent 
roughly 36 percent of the population--an improvement from the 41 
percent who were considered poor in 1990, but higher than the 35 
percent so defined in 1980.
    More perilous for social peace, Latin America maintains the 
broadest gap between rich and poor in the world, and the gap has 
narrowed only marginally, if at all, from what it was under the 
generals, dictators and caudillos.
    To some Latin American scholars, the linking of democracy, trade 
and shared prosperity suggest that Mr. Bush and many Latin American 
leaders are out of touch with reality. ``These guys are just whistling 
Dixie,'' said Riordan Roett, director of the Western Hemisphere program 
at the Johns Hopkins University School of Advanced International 
Studies. ``They're ignoring the basic issues that everyone's been 
pointing out to them for a decade.''
    The most effective way to ensure a fairer distribution of the 
economic benefits of market openings, according to Professor Roett and 
many other experts, is by improving education. Greater skills translate 
directly into higher wages. But only 15 percent of Latin American 
children make it to the ninth grade, even though spending on education 
has increased in at least 13 nations.
    The increases tend to be less effective than they might be because 
Latin American governments spend disproportionately on universities--a 
strategy aimed at mollifying politically active middle class students.
    And that kind of spending decision underlines a basic problem 
throughout Latin America: the way to fairer distribution of wealth is 
known, but the will to make the necessary changes gets waylaid between 
the people and their governments.
    Nobody expects miracles overnight. Economic ministers in Latin 
America always counter reports of current problems with references to 
how bad things were before, and they usually are right. But their 
critics say they miss a crucial point. The region's rigid social 
structure isn't equipped to equitably distribute wealth, and this has 
been true whether a society was a democracy or an autocracy, 
protectionist or free-trading.
    As Mexico learned when it abandoned protectionism in the 1980's and 
90's, capitalism unbound puts lower-wage people at the mercy of global 
market forces. In order to counteract those forces and create more 
winners than losers, a nation needs strong democratic institutions--a 
sound judiciary, free media and officials who are responsive to voters.
    Far too often, however, Latin America's fledgling democracies have 
been too weak to effectively defend against such elite forces. For 
example, the elected governments of countries like Guatemala did little 
to stand in the way as the rich amassed tremendous wealth, allowing a 
coalition of agricultural growers and financial groups to block tax 
reforms. In Ecuador several years ago, so many rich people were evading 
income taxes that the government just abolished them, putting a tax on 
financial transactions instead.
    In such cases, checks and balances intended to hold officials 
accountable don't function; policy decisions are based on their impact 
on the powerful few, not on the poor majority.
    And so, even after decades of market opening and democratic 
elections, the richest 10 percent of Guatemalans and Brazilians control 
almost half of their national incomes, while the bottom 50 percent have 
access to just 10 percent of the wealth. Chile, Uruguay and, until 
recently, Argentina have had fairly sophisticated and stable economies, 
but they too have barely narrowed the wealth gap.
    In fact, over the last 40 years, the most effective efforts to 
bridge the gap took place under populist authoritarian governments that 
rejected both democracy and free trade. They erected protectionist 
barriers that kept vast numbers of people employed, but not 
productively. The governments made up for shortfalls by borrowing 
heavily from foreigners. The system worked, but only for a while. It 
led to the debt crisis of the 1980's, which worsened income inequity. 
The region recovered in the early 90's but most of the progress was 
wiped out by Mexico's debt crisis of 1994-95.
    The region's economies climbed back again, but as they did 
something else occurred. The economic restructuring intersected with 
democratic opening in many countries, creating unforeseen new 
pressures. Competing globally meant becoming more productive, which 
brought layoffs. New standards of openness forced the governments to 
reveal economic data on once-guarded items like foreign cash reserves. 
This cleared the way for newly liberated news outlets to investigate 
corruption on every level.
    The result? ``People now see the corruption and the problems with 
education, health and judicial impunity, and they think that is 
democracy,'' said Cesar Gaviria, a former president of Colombia who is 
secretary general of the Organization of American States. ``All of that 
has created a sense of skepticism about democracy.''
    That disenchantment has put democracy itself at risk, and some 
Latin American intellectuals fear that the door has opened for the 
region to return to what the Mexican writer Carlos Fuentes has called 
the area's ``oldest and most deeply rooted tradition--
authoritarianism.''
    The stirrings of such a shift are already evident. Using resentment 
against the maldistribution of wealth in Venezuela, Hugo Chavez led an 
unsuccessful coup attempt in 1991. A few years later, he won the 
presidential election and began dismantling parts of Venezuela's 
constitutional system that he said were unresponsive to the masses.
    A coup in Ecuador last year was a backlash, in part, against the 
country's economic morass and a decision to adopt the American dollar 
as Ecuador's currency. After international pressure forced the generals 
to surrender control, the new president promised to work to distribute 
economic benefits equitably. But one of his first moves was to complete 
dollarization, which helped businesses but not the poor.
    And in last year's historic election in Mexico, perceptions that 
economic opening had enriched a few families while leaving most 
Mexicans in poverty helped to oust the ruling party that had controlled 
the presidency for seven decades. This victory for democracy could 
prove a tenuous one; sustaining the victory may well depend on 
President Vicente Fox's ability to persuade most Mexicans that they too 
are benefiting from free trade.
    Mexico, Ecuador and Venezuela were among the 34 nations at the 
recent Summit of the Americas in Quebec, which voted to limit 
participation in future summits--and perhaps the proposed Free Trade 
Area of the Americas that the Bush administration supports--to 
democracies.
    But critics of such a simple linkage say it is not merely a 
democratic constitution and elections that determine the fairness of a 
society, but how deeply democratic understandings reach into the 
culture. Hernando De Soto, the Peruvian economist whose ideas have 
influenced public policy in the region, believes that raw capitalism 
has trumped principles of fairness in Latin America because many of the 
region's democracies haven't developed completely.
    ``LATIN Americans get to choose their leaders, but once they are in 
place, it's the old cliques that make the bottom-line decisions that 
are suitable to their own needs, not the people's needs,'' said Mr. De 
Soto. Latin American newspapers commonly refer to ``the arrival of 
democracy'' after elections, but the process doesn't end there.
    ``These nations may look like democracies and sound like 
democracies,'' said Mr. DeSoto, ``but they certainly do not function in 
the same way that true democracies function.''
                                 ______
                                 
                Prepared Statement of Hon. John McCain, 
                       U.S. Senator from Arizona
    Good Morning. I want to thank Chairman Hollings for moving swiftly 
in scheduling this nominations hearing so early in his reinstated role 
as Chairman of the Committee. I know the Administration and in 
particular, the pending nominees, are very appreciative of his 
leadership, and am hopeful the Committee and full Senate can work to 
move your nominations quickly.
    We will be considering the nominations of three individuals who are 
being considered for positions with the Department of Transportation 
(DOT). They are Mr. Kirk Van Tine to be General Counsel of the DOT, Mr. 
J. Allan Rutter, to be Administrator of the Federal Railroad 
Administration (FRA), Ms. Ellen Engleman, to be Administrator of the 
Research and Special Programs Administration (RSPA). We will also 
consider the nomination of Mr. Samuel Bodman to be Deputy Secretary of 
the Department of Commerce.
    The positions for which these individuals have been nominated are 
important. For example, one only needs to see a telecast of a run-away 
train or hear about a tragic pipeline explosion to understand the 
importance of ensuring the Administrators of the FRA and RSPA are 
highly capable. While times of tragedy most often reminds us of these 
modal agencies, they are responsible for carrying our important safety 
missions at all times.
    The DOT General Counsel position is essential to assisting the 
Secretary in carrying out our nation's federal transportation policies 
and ensuring the Department's actions are in full compliance with the 
law. The General Counsel's duties are far-reaching, overseeing the 
Department's entire legal department, aiding in the sound development 
of legislative submissions and fulfilling statutory intent through the 
timely completion of Departmental rules and regulations.
    And finally, the Deputy Secretary of the Department of Commerce 
plays a key role the day-to-day management of that Department. In 
addition to the management of approximately 40,000 Federal employees, 
the Deputy is responsible for the policy implementation of a wide range 
of issues, including international trade, economic growth, scientific 
research and development, patents and trademarks, telecommunications, 
weather forecasting, fisheries, and the census.
    I would like to take this opportunity to thank the nominees for 
being here today. I know your nomination is a great honor, and that 
your families are very proud.
  

                                  
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