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41–960 PDF 2008

FISCAL YEAR 2009 BUDGET: FEDERAL 

MARITIME COMMISSION 

(110–115) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

APRIL 15, 2008 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

(II) 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION 

ELIJAH E. CUMMINGS, Maryland, Chairman 

GENE TAYLOR, Mississippi 

RICK LARSEN, Washington 

CORRINE BROWN, Florida 

BRIAN HIGGINS, New York 

BRIAN BAIRD, Washington 

TIMOTHY H. BISHOP, New York, Vice Chair 

LAURA A. RICHARDSON, California 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

STEVEN C. LATOURETTE, Ohio 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

WAYNE T. GILCHREST, Maryland 

FRANK A. LOBIONDO, New Jersey 

TED POE, Texas 

JOHN L. MICA, Florida 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Anderson, Commissioner A. Paul, Federal Maritime Commission ...................... 5 

Brennan, Commissioner Joseph E., Federal Maritime Commission ................... 5 

Creel, Jr., Commissioner Harold J., Federal Maritime Commission ................... 5 

Dye, Commissioner Rebecca F., Federal Maritime Commission ......................... 5 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Bishop, Hon. Timothy H., of New York ................................................................. 33 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Anderson, Hon. A. Paul ........................................................................................... 34 

vi 


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41960.002
viii 


41960.003
ix 


41960.004
(1) 

HEARING ON FISCAL YEAR 2009 BUDGET: 

FEDERAL MARITIME COMMISSION 

Tuesday, April 15, 2008 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON COAST GUARD AND MARITIME

TRANSPORTATION, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Elijah E. 

Cummings [Chairman of the Subcommittee] presiding. 

Mr. CUMMINGS. This hearing is called to order. 

This morning’s hearing is on the proposed fiscal year 2009 budget and the institutional management of the Federal Maritime Commission which was created to regulate international shipping. The 

Commission has been operating under a five-year authorization of 

its budget which is due to expire on September 30th of this year. 

This is the first opportunity the Subcommittee has had in several 

years to examine the activities of the Commission. I have heard 

many concerns about the management and programmatic direction 

of the Federal Maritime Commission. 

For the past year and a half, the Commission has been without 

a chairman. Mr. Anderson has been nominated by the President for 

an additional term on the Commission and will be the chairman if 

he is confirmed. However, at the present time, the four commissioners who are about to testify have been jointly responsible for 

the daily administration of the Commission as well as for establishing the Commission’s policy positions. 

During their tenure, the 2006 Federal Human Capital Survey of 

FMC employees found alarmingly the following: 

Only 56 percent of the employees thought the FMC was a good 

place to work. 

Only 50.2 percent of the employees said they were able to recruit 

people with the right skills. 

Only 54 percent of the employees have high respect for the agency’s senior leaders. 

Only 48 percent of the employees think that complaints, disputes 

and grievances are resolved fairly. 

Only 40 percent of the employees believe that the agency’s leaders generate high levels of motivation and commitment in the 

workforce. 

Interestingly, only 27.3 percent of the employees think that pay 

raises are dependent on how well employees perform their jobs. 

2 

These numbers are troubling. They are alarming and should 

cause all of us great concern as is the fact that the general counsel 

of the Commission has found it necessary to file EEO grievances 

against the Commission. 

The Subcommittee is also very concerned that despite the significant administrative responsibilities the four current commissioners 

are now exercising, the four commissioners do not regularly meet 

face to face to discuss either the management of the agency or its 

policy decisions. 

Similarly, the Subcommittee is concerned about the process of 

ghost voting through which a commissioner may apparently sign 

blank voting sheets in advance of the conduct of any vote and then 

through a phone call—through a phone call—direct staff on how 

they are to fill in the blanks on a voting sheet when a vote is 

called. Such a process does not indicate that votes are the result 

of the deliberative examinations that should be a hallmark of the 

Commission’s consideration of any administrative or policy decision. 

The Subcommittee is further troubled by reports of excessive 

spending to renovate the chairman’s office and the chairman’s conference room particularly at a time when the Commission does not 

even have a chairman. There is something awfully wrong with this 

picture. 

The Subcommittee also understands that a commissioner may 

not be in the office for days or weeks at a time, though an FMC 

commissioner is among the highest paid employees in government. 

Civil servants in the FMC are required to come to work five days 

a week except for vacations and official travel, and the same standard should be kept by the commissioners who certainly cannot adequately manage a Federal agency and lead its employees when 

they are a thousand miles away. 

Today we no longer can tolerate the old patronage system that 

distributed benefits and goodies to people who are not expected to 

do any real work. That day is long gone. 

Perhaps because of the circumstances we have just outlined, an 

outside management consultant hired by the Commission in 2005 

and 2006 found the following: 

Lack of trust existed at all levels in the organization and especially in the leadership. Women and minorities felt disenfranchised, 

which is obviously a finding that is of great concern to me, and conflict abounded between and among individuals and groups of people 

including managers and the senior executives. 

No leadership team existed and managers did not know how to 

give or receive feedback to employees or customers. No staff meetings were being held, and there was little interaction with the maritime industry the FMC is expected to regulate. Further, no vision 

or operational values were exhibited. 

The agency was adverse to change. People were fearful to suggest improvements. Empowerment was not in the agency’s vocabulary. 

These are the findings. These aren’t my words; these are theirs. 

The organization operated in a ‘‘command and control manner’’. 

The executive director ruled with an iron hand. The culture was 

‘‘his way or the highway.’’ 

3 

The Bureau of Enforcement, in particular, operated with a hammer mindset rather than with the goal of examining how the agency could work in partnership with industry and individuals. 

The automation of processes, both inside the agency and the 

processes that connected the industry it serves, were outdated and 

no plan existed to improve them. 

There was little interaction between the commissioners and their 

staff. 

The evidence we have before us presents a picture of an agency 

that appears to be broken and dysfunctional. 

I am eager to hear from the commissioners. I notice that they 

seem to be a little concerned about some of the things I just read, 

and I would love to hear your response. In particular, I would like 

to hear from Mr. Anderson who has been nominated to head this 

agency and what you are going to do to improve the management 

policies and strategic vision of the Federal Maritime Commission. 

With that, I recognize our distinguished Ranking Member, Mr. 

LaTourette. 

Mr. LATOURETTE. Thank you, Mr. Chairman, and thank you for 

holding this hearing. 

Welcome to the commissioners. 

We are meeting to review the fiscal year 2009 budget request for 

the Federal Maritime Commission. The Commission has responsibilities to oversee U.S. interest in the maritime trade and to enforce international and domestic shipping regulations. 

The President has requested about $24 million for the Commission which is an increase of nearly 8 percent over the amounts appropriated for the current fiscal year. The Subcommittee is on 

record as being in support of the proposed levels, and I look forward to working with the Chairman to reauthorize the Commission 

later this year. 

I do want to bring up one matter of concern, and perhaps during 

testimony and questions this could be addressed, and that has to 

do with the Japanese Government. 

Ten years ago, the Japanese Government, pressured by our Administration and the Federal Maritime Commission, signed an 

agreement promising to open its port and stevedoring market to 

the U.S. and other foreign competition. However, the Administration has reported to the Congress just within the last month that 

the Japanese side has failed to live up to its commitments, and the 

Japanese market for port and stevedoring services remains closed. 

Meanwhile, the Japanese maritime companies, protected from 

competition at home, have continued to expand their port operations in the United States. Now one Japanese carrier has approached the FMC and demanded the right to stevedore its own 

vessels even in a privately owned maritime terminal owned and 

controlled by U.S. stevedoring companies. 

We continue to be concerned about the apparent imbalance and 

unfairness between the closed Japanese market for port services 

compared to the open U.S. stevedoring and terminal sector that we 

have. In my opinion, the FMC should not take actions that needlessly aggravate this imbalance or further undermine or harm U.S. 

maritime companies and their interests. 

4 

Furthermore, I would ask that the FMC reexamine why the 

agreements to open Japan’s port and stevedoring market did not 

produce results and to report to the Committee what steps could 

be and should be taken to encourage Japan to honor its commitments and to bring the two countries’ port markets back into balance. 

I want to thank the Commissioners for appearing this morning, 

and I look forward to hearing your testimony. 

Thank you, Mr. Chairman. I yield back. 

Mr. CUMMINGS. Thank you very much, Mr. LaTourette. 

We are very pleased to have been joined by the distinguished 

Chairman of the Transportation Committee, Mr. Oberstar. 

Mr. Oberstar. 

Mr. OBERSTAR. Well, thank you for the long hours you put in, 

Mr. Chairman, to prepare for this hearing and, Mr. LaTourette, as 

always, for your participation and splendid contribution to the 

work of the Subcommittee. 

We meet at a sad moment for me, a troubling moment in the history of the Federal Maritime Commission. I have served on the 

Merchant Marine and Fisheries Committee along with the then 

Public Works Committee for my very first term in Congress in 

1975 until the present, and I have never seen the FMC in such a 

state as it is today. 

First of all, it has been five years since we have had the FMC 

up here before the Committee to explain its budget. Over that time, 

there have been serious management problems. Outside observers 

have said, well, they don’t have a chairman. 

They don’t have a chairman. They have an acting chairman, but 

they have four commissioners. They all can carry on the work of 

the chairman. They ought to be doing oversight of the activities of 

the Commission. 

But what was troubling to me was the Federal Human Capital 

Survey of FMC employees found that 56 percent—that is a pretty 

low number—thought the FMC was a good place to work. Only 54 

percent had high respect for senior leaders. 

If any of us on this Committee had that kind of report, we would 

be back home, shoveling dirt and standing on street corners and 

knocking on doors and talking to people. 

There are reports of ghost voting. I have never had that happen 

before. Some of the commissioners aren’t even in Washington when 

they vote. They call in their vote to staff and tell them how to fill 

in a pre-signed ballot. 

There are reports that some commissioners haven’t been at the 

Commission in weeks, all the while getting paid to do the work of 

the Commission. Now the civil service employees have to put in 40 

hours a week. 

I wonder what standard the commissioners have. These are presidential appointee jobs, but they are not feather-bedding jobs where 

you get paid but don’t show up. 

The FMC’s Inspector General issued a report finding that staff 

and attorneys at the Commission violated the Federal acquisition 

regulations when purchasing $36,000 worth of furniture for the 

chairman’s suite, but commissioners told the IG they had no knowledge of that expenditure. 

5 

Well, how can commissioners who have to vote to approve a travel request for a commission staff member not know about or not 

be asked to vote on $36,000 for furniture? That is a lot of furniture 

for a chairman’s office. You could furnish a few houses with that. 

That money wasn’t in the Commission’s budget, and I expect an 

explanation from this panel of where the money was found. 

It is troubling when the general counsel of an agency finds it necessary to file an EEO complaint against her own agency. I have 

never seen that happen, not in this agency. 

And, the maritime industry is well aware of these problems. I 

hear about it wherever I travel from port communities to labor organizations to business groups who are saying, what is going on at 

the Commission? That is why we have hearings. 

Well, I think it is important for this Committee to conduct this 

hearing and to follow up on it and hear the responses we get from 

the commissioners and to ensure that we do, Mr. Chairman and 

Mr. LaTourette, whatever is necessary to make sure that the FMC 

is a place, once again, where people enjoy their jobs, respect their 

commissioners, respect their leadership and have a vision for the 

future. 

I look forward to the testimony. 

Thank you, Mr. Chairman. 

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

Mr. Coble. 

Mr. COBLE. No opening statement, Mr. Chairman. 

Mr. CUMMINGS. Mr. Bishop. 

Mr. BISHOP. I have an opening statement, Mr. Chairman, but in 

the interest of time I will submit it for the record. 

Mr. CUMMINGS. Very well and thank you very much. 

At this time, we will now hear from our commissioners: Commissioner Paul Anderson, Commissioner Joseph E. Brennan, Commissioner Harold J. Creel, Jr. and Commissioner Rebecca F. Dye. 

Mr. Anderson. 

TESTIMONY OF COMMISSIONER A. PAUL ANDERSON, FEDERAL 

MARITIME COMMISSION; COMMISSIONER JOSEPH E. BRENNAN, FEDERAL MARITIME COMMISSION; COMMISSIONER 

HAROLD J. CREEL, JR., FEDERAL MARITIME COMMISSION; 

AND COMMISSIONER REBECCA F. DYE, FEDERAL MARITIME 

COMMISSION. 

Mr. ANDERSON. Thank you, Mr. Chairman, distinguished Members of the Subcommittee and the Committee. 

It is a pleasure to appear before you today to present the President’s fiscal year 2009 budget for the Federal Maritime Commission. It is an honor to be here today with my colleagues: Joe Brennan, Hal Creel and Rebecca Dye. 

The President’s budget for the Commission provides for 

$23,953,000 for fiscal year 2009. This represents a 7.8 percent increase or $1,881,000 over the fiscal year 2008 appropriation. 

Since our last budget hearing before the Committee in 2006, the 

Commission has witnessed several important changes in the U.S. 

foreign commerce, and the Commission has substantially revised 

and updated many of its internal processes. I would like to provide 

some of the highlights in the state of the U.S. trades over the last 

6 

year as well as identify some of the significant current events, programs and initiatives at the Commission. 

Fiscal year 2007 was another year of growth in the U.S. liner 

trades. Total cargo volume in U.S. liner exports grew by 12 percent, offsetting a slight decline in imports for the first time in 

years. Notably, cargo growth in imports from Asia slowed substantially this fiscal year, though China continued to be the leading 

trading partner in liner cargo with the United States. 

As you know, the European Commission has recently eliminated 

the block exemption from European Commission competition laws 

and is currently reviewing the exemption for non-ratemaking consortia agreements among liner carriers. The block exemption is set 

to expire on October 1st, 2008, and the consortia exemption is currently due to expire in April, 2010. 

The repeal of the block exemption in the E.U. will result in the 

elimination of rate discussion agreements in the European trades 

including the U.S.-E.U. trade lanes. It is estimated that approximately 6 out of the 227 carrier agreements currently filed with the 

Commission will need to be restructured or eliminated to ensure 

compliance with the E.U. guidelines. 

The Commission will monitor the transition very closely and will 

have a better indication of the immediate and long-term effects on 

the U.S.-European trades after the termination of the exemption in 

October of 2008. 

The Commission has also been monitoring significant developments in marine terminal operator agreements which address supply chain and operational issues including port congestion, security, 

air pollution and environmental concerns. The Ports of Los Angeles 

and Long Beach have filed an agreement with the Commission permitting them to discuss, consult and agree on the establishment 

and implementation of programs and strategies to improve port-related transportation infrastructure and to decrease port-related air 

pollution. 

The ports are currently in the process of developing a Clean 

Truck Program as a first initiative under the joint Clean Air Action 

Plan. The ports’ goal is to significantly reduce air pollution from 

port drayage trucks by replacing or retrofitting an estimated 

16,000 trucks servicing the ports over a five-year period. 

The Commission is actively monitoring the agreement’s activities, and our staff has met with a variety of industry stakeholders 

concerning the implementation of this program. We will continue 

to remain engaged throughout the development and implementation of the Clean Truck Program. 

The Commission has continued its cooperation with other agencies to improve our enforcement capabilities and to assist maritime 

security efforts. Cooperation with U.S. Customs and Border Protection has expanded into joint field operations to investigate any suspected violating of both agency statutes or regulations. 

We are also in the process of assisting national maritime security 

efforts by working to share our informational resources with other 

Federal agencies including Customs and Border Patrol and the Department of Homeland Security through the International Trade 

Data System and the Automated Commercial Environment portal. 

7 

These efforts will allow the Commission to provide access to its 

extensive informational resources containing background information on entities regulated by the Commission, some of the most 

complete resources identifying persons engaged in U.S. foreign 

commerce. Once completed, the ACE ITDS system will provide 

greater transparency of the Nation’s supply chain. 

Over the last fiscal year, the Commission has streamlined access 

to our informational resources by automating our Ocean Transportation Intermediary Licensing process and by modernizing our 

databases containing extensive information on the entities we regulate. Completion of these projects ensures that the Commission is 

able to efficiently meet the needs of the industry. 

At this point, Mr. Chairman, we respectfully request favorable 

consideration of the President’s budget and are more than happy 

to answer questions. 

Thank you. 

Mr. CUMMINGS. Thank you very much. 

It is my understanding that the other commissioners will not be 

doing opening statements. Is that correct? 

Mr. ANDERSON. That is correct, Mr. Chairman. 

Mr. CUMMINGS. Thank you very much. 

Mr. Anderson, how many management meetings, or let me go 

back and say this. 

Mr. Oberstar and I spoke about some of the concerns that we 

have, and this entire Congress, I think, have a few things we seem 

to all agree on, but one of them is that the taxpayers’ money must 

be spent effectively and efficiently. It is quite appropriate that I 

make that statement on this day. 

To that end, I want to ask you a few questions about how you 

all manage the agency and how you all earn the money that the 

taxpayers work so hard to put into our Federal coffers. 

How many management meetings have the four of you held since 

Chairman Blust left in June of 2006? In other words, how many 

times have the four of you gotten together to actually discuss management of the agency and policy issues? 

Mr. ANDERSON. Mr. Chairman, as you may know, the Sunshine 

Act governs our ability to meet as a group. So the four of us getting 

together to meet has not happened on regular basis. However, in 

groups of two, which we are allowed to do, have happened quite 

frequently since Chairman Blust has left. 

Mr. CUMMINGS. How many times, though, have you all met? 

Mr. ANDERSON. I would say dozens of times. 

Mr. CUMMINGS. No, no, no, no. Let me go back to my question. 

How many times since Chairman Blust left have the four of you 

met together? Like if you put a circle and all of you were sitting 

there together like you are now, how many times have you all done 

that? 

Mr. ANDERSON. Two or three times and as well in two closed 

hearings as well to discuss management issues. 

Mr. CUMMINGS. When was the last time that happened? 

Mr. ANDERSON. About six weeks ago. 

Mr. CUMMINGS. In the past year, how many eight-hour days have 

you spent at the FMC headquarters? 

8 

Mr. ANDERSON. I don’t recall exactly how many days but in the 

past year, hundreds, 150. I don’t have an exact number for you, 

Mr. Chairman. 

Mr. CUMMINGS. Were you there last week? 

Mr. ANDERSON. I was not there last week. 

Mr. CUMMINGS. Were you on vacation? 

Mr. ANDERSON. Yes. 

Mr. CUMMINGS. And the week before that? 

Mr. ANDERSON. Yes, I was. I was there. 

Mr. CUMMINGS. How many days were you there that week, do 

you know? 

Mr. ANDERSON. I believe I was there four days. Yes, four days. 

Mr. CUMMINGS. Let me ask you this, would you submit for me 

over the last year how many times you have been there? You can 

submit that for the record. Would you do that? 

Mr. ANDERSON. Yes, I will, Mr. Chairman. 

Mr. CUMMINGS. You said something that I just want to make 

sure I have some clarity on. You said the Sunshine Laws have certain effect on certain things. Can you explain that? 

Mr. ANDERSON. It is my understanding, Mr. Chairman, based on 

our counsel, that since I have been at the Commission we are limited to meeting with no more than two commissioners at any given 

time so that we don’t have a violation of the Sunshine Law which 

would require us to notice a meeting. 

Mr. CUMMINGS. So you understand you can meet, but you just 

have to have open meetings. You understand that, right? 

Mr. ANDERSON. Yes, I do. 

Mr. CUMMINGS. Help me with this. Is it that you didn’t want to 

have an open meeting? Is that what you are trying to say? 

That is the only reason of relevance I can see. Maybe I am missing something. 

Mr. OBERSTAR. Mr. Chairman? 

Mr. CUMMINGS. Yes. I yield to you. 

Mr. OBERSTAR. What is wrong with an open meeting? 

Mr. ANDERSON. Nothing is wrong with an open meeting. 

Mr. OBERSTAR. Well, why don’t you want to have them? 

Mr. ANDERSON. Well, we were. We were meeting on a regular 

basis with each other and in pairs of two, and then our counsels 

worked very closely together. We had day to day contact with each 

other on a regular basis. 

I can speak for myself. I speak to several of my colleagues on 

evenings, over the weekends, as I have been on vacation. We are 

in constant communication with each other since the time that we 

have been co-equally managing the Commission. 

Mr. CUMMINGS. Have you signed blank notational voting sheets 

in advance and then had your staff fill in the blanks when you 

were not present at the Commission to participate in a vote? Have 

you ever done that? 

Mr. ANDERSON. Mr. Chairman, I have. I have voted through the 

notation process which allows for us to vote by notation. It is the 

process where we can do, and I have done where I have indicated 

my vote via, after comprehensive discussions and reading the material, with my counsel, yes. 

9 

Mr. CUMMINGS. Then you instructed your staff to fill in your voting card or whatever you use? 

Mr. ANDERSON. Mr. Chairman, since I have been at the Commission, that has been an accepted procedural way to vote at the Commission. I have voted, indicated my vote either verbally or via email on occasion to my counsel. 

Mr. CUMMINGS. For how many votes did you instruct your staff 

to fill in the blanks on the voting sheets? 

Mr. ANDERSON. I don’t have a count for you. 

Mr. CUMMINGS. Will you get that information for me, please? 

Mr. ANDERSON. Yes, I will, Mr. Chairman. 

Mr. CUMMINGS. Who meets in the notational process? How does 

that work? 

Mr. ANDERSON. Generally—and I am happy to have my colleagues if they want to add any light to this—since I have been at 

the Commission and it is my understanding that for as long as the 

Commission has been under the current structure, it has voted 

through a notation process by which the purpose of these are for 

administrative or acknowledging. In many cases, you are not voting 

aye or nay. It is just noted that you received a piece of information 

or noting that we have received something from outside the agency, 

for the record that we have received that. 

So, in most cases, Mr. Chairman, the notation process, we are 

not actually voting, or in many of the cases. I could not give you 

a percentage. We are voting procedurally just to acknowledge some 

information that has been provided to our office by either staff or 

outside entities. So the notation process allows a very seamless 

functioning of the commissioners to vote. 

Generally, these are not on issues. So that I can be clear, these 

are not issues where we voted at hearings or we voted on issues 

where we took public testimony and things of that nature. These 

would be procedural notices to the Commission on items that are 

related to the Commission. 

Mr. CUMMINGS. Is there any time devoted to group deliberation 

with regard to these? 

Mr. ANDERSON. No, not since I have been at the Commission. We 

have never had a group deliberation on a notation item. That is not 

how the notation process is worked. 

It has been set up. I have been there four years. I do not know 

how that was originally established, but that is the procedural way 

when I came to the Commission, it was identified to me as the 

process of voting at the Commission. 

Mr. CUMMINGS. How much time is required before a vote is taken 

on a notational vote? 

Mr. ANDERSON. It depends on the item, sir. It could be that we 

have received an amendment to an agreement that just might be, 

for example, an agreement that we monitor. It might be adding one 

company to that liner agreement, and we are to note and vote that 

we have noted that the liner has been added to a long list of agreements. 

In other cases, it is again on informational notation that we have 

received a memorandum or something from an outside entity, and 

we are just voting noted that we received that information. 

10 

Mr. CUMMINGS. Do you think that notational voting should be reserved for emergencies perhaps or is it? 

Mr. ANDERSON. I believe that it has allowed the Commission, 

since I have been there, to operate in a way that we can respond 

very quickly. The process allows for, in most cases, Mr. Chairman, 

notations, and in some cases, a week before the vote is due. In 

some cases, it is a 24, 48 hours, depending on the urgency of the 

vote. 

Mr. CUMMINGS. Can you give me an idea, and then I will turn 

it over to Mr. LaTourette? Can you give me an idea, just give me 

a range, of what you all earn? 

Mr. ANDERSON. I believe it is currently $146,000. 

Mr. CUMMINGS. Very well. 

Mr. LaTourette. 

Mr. LATOURETTE. Thank you very much and thank you for coming here today. 

In my opening remarks, I talked a little bit about the situation 

with the Japanese Government. Mr. Anderson or any of the commissioners, if you could just talk to me a little bit about what some 

of us perceive to be unfair competition, and that is that terminal 

ownership and port service operations in our Country are generally 

free and open to foreign interests. In some foreign ports, however, 

U.S. individuals interested in owning port terminals—— 

Mr. CUMMINGS. Would the gentleman yield? 

Mr. LATOURETTE. Sure. 

Mr. CUMMINGS. It seems like Mr. Creel might be having difficulty hearing you. Can you hear, Mr. Creel, sir? 

Mr. CREEL. I can hear fine. 

Mr. CUMMINGS. All right, fine. 

Mr. LATOURETTE. Can you discuss with me just a little bit, first 

of all, the Japanese situation and, second of all, how the FMC 

works with foreign governments to increase assets and opportunities for United States’ interests abroad? 

Mr. ANDERSON. Thank you. 

On Japan, the staff of the general counsel has met with Department of State staff and a visiting delegation, and we are requested 

to remove the reporting requirements about the Japanese port 

practices. This predates my joining the Commission all the way 

back to 1996 when we first instituted the state-owned provisions 

with the Japanese Government. 

While the FMC is not prepared to do so at this time, I would 

think it would be fair also to hear from my colleagues on their 

points as well because it would be a joint consideration. 

Mr. LATOURETTE. Mr. Creel? 

Mr. CREEL. Thank you, Mr. LaTourette. 

I can speak to this. I actually was around in 1996 and was chairman at the time. Mr. Chairman, when we took the action against 

Japan, the problems there, as you know, were a matter of access 

by U.S.-flag vessels or vessels calling in the U.S. Non-Japanese 

vessels were denied entry if they didn’t comply with certain practices. In other words, there was discriminatory treatment for nonJapanese vessels. 

They were also subject to what was called a prior consultation 

process which was deemed by the vessel owners as being burdenVerDate Aug 31 2005 11:04 Apr 27, 2009 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\DOCS\41960 JASON
11 

some, and because that required prior consultation with the port 

authority before changing a port call which is not something that 

is normally done. That proceeding is actually still open. 

Just background, a little bit more on that particular issue, the 

Commission did take action and voted against all Japanese-flag 

vessels into the U.S. because of this unfair treatment being shown 

to vessels calling in the U.S. 

That issue, that immediate issue was resolved. There was 

$100,000 per vessel call levy that was posted on all Japanese vessel 

calls. That was addressed through negotiations between the State 

Department and the Japanese Government. Basically, as an independent agency, the FMC carries the big stick to be able to do this, 

yet the ultimate negotiations are up to the State Department to resolve this diplomatically, and that did happen. 

However, that proceeding is still open. It is my understanding 

that there are still some problems that have not been resolved 

under the agreement that was reached with the Japanese. I have 

just been hearing recently about that. 

As to the NYK terminal operator issue, I am aware of that problem or that issue in Florida. I don’t want to prejudge that, but I 

will certainly look into that per your suggestion. 

Mr. LATOURETTE. Well, on that issue, am I correct that NYK has 

made a demand upon or has approached the FMC and demanded 

the right to stevedore its own vessels? 

Mr. CREEL. I believe that is right, yes, sir. 

Mr. LATOURETTE. I would hope it would be the position of the 

Commission, until the Japanese Government lives up to its agreement of 10 years ago, that we not modify the agreement and give 

them more, right? 

Mr. CREEL. I would just say that back in 1996 when we carried 

out the action that we did, there were a lot of people surprised 

about the agency and how small we are and the independent authority we have to address unfavorable treatment of U.S. vessels. 

So we will certainly look into that and do what we can do, and we 

will follow up with you on that as well. 

Mr. LATOURETTE. I appreciate that. 

Mr. Anderson, in your testimony, you talked about the Ports of 

Los Angeles and Long Beach. I understand you to say that they 

have forward to the Commission an agreement or a proposal, is 

that right? 

Mr. ANDERSON. That is correct. 

Mr. LATOURETTE. Does that proposal require action on behalf of 

the Commission, on the part of the Commission? Do you have to 

do something about it? 

Mr. ANDERSON. We would, yes. It is a marine terminal agreement as proposed by the Ports of L.A. and Long Beach which includes rate discussions and other areas, and they have made this 

as one of the areas of change of the dynamics of, I think, our U.S. 

intermodal operations between ports, rail, trucks that has had a 

profound impact on the way business is being done in ports around 

the Country. 

In the Ports of L.A. and Long Beach case, they have a Clean Air 

Action Plan that has been proposed by local government that the 

ports must meet over a period of many years. In an attempt to 

12 

meet that, the ports have filed plans and changes in their agreements that would require trucking companies to be part of the 

agreement as employee-owned trucking companies. Some of these 

provisions will cause them to come under review by the Commission. 

Mr. LATOURETTE. Does the Commission have the authority to reject their proposal? 

Mr. ANDERSON. We would. Commissioner Creel, any help? 

I believe that they would have to go to Federal court if we did 

not allow the marine terminal agreement to go into effect. 

Mr. LATOURETTE. That is what I am asking. So they are asking 

for your approval of the agreement. 

My time is expired. Let me just say this. In looking at Los Angeles-Long Beach, the clean air goal is a laudable one, but in my observation they achieve it by limiting competition among who can 

use the terminal. 

So my question to whoever wants to answer it, one is—and I 

think you have answered it—that you actually have to approve it. 

If you don’t approve it, they have additional recourse. But I am 

wondering whether or not what they have submitted to the Commission and what the Commission will look at in determining 

whether or not to approve their plan is how the decrease in competition or availability will affect the costs associated with transporting cargo in and out of the ports. 

I guess yes or no. 

Mr. CREEL. Can I answer longer than yes or no? 

Mr. LATOURETTE. Sure, subject to what the Chairman allows. 

Mr. CREEL. We do not have the authority to disapprove the 

agreement, any agreement. We have the authority to go to Federal 

district court to get an injunction to prevent, a preliminary injunction to prevent the agreement from going into effect. It is a pretty 

big step. 

We do have the authority to review the agreement for anti-competitive effects, also to see if there is any prohibition, any of the 

Shipping Prohibitions Act that have been violated. We are doing 

that now. 

There are two agreements on file, one between the two ports, 

L.A. and Long Beach, the other between the two ports and the 

West Coast Marine Terminal Operators agreement. On the second 

agreement, we have asked for additional information. So, on that 

one, the parties have to come back to us with additional information. Then the agreement will go into effect within 45 days automatically after we receive that information. 

This is something I would like to talk to you about further in 

terms of potential legislative amendments to address that. 

Mr. LATOURETTE. I would appreciate that. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. No problem. 

Mr. Oberstar. 

Mr. OBERSTAR. Mr. Anderson, I want to understand, as you are 

in sort of an acting position, how you manage the day to day business. How do you do this? Do you communicate long distance with 

staff when you are not actually at the Commission? 

13 

Mr. ANDERSON. No, sir. Mr. Chairman, I am not acting. I am cochairing. 

Mr. OBERSTAR. But you are the lead person on the Commission. 

Mr. ANDERSON. Well, no, sir, not actually. I have not been confirmed by the Senate. I have been designated as chairman if I am 

confirmed. 

I have taken great care and been very reserved in my approach 

to stepping forward and taking the lead at the agency. I think my 

colleagues and anybody in this industry would agree. I felt and 

many counseled to me was that you are not chairman, and I have 

not acted in that capacity by either projecting myself in that manner or have done anything that would lead anybody with any reasonable, objective observation to think that I was chairman. 

Mr. OBERSTAR. In the findings of the Inspector General and in 

response to questions from Mr. Cummings, there are long periods 

of time when you are actually physically not present at the Commission. 

Mr. ANDERSON. There are times where I think that, I am sure 

during times of vacation and other personal matters, I have not 

been actually at the Commission. However, I think that, like anybody in today’s world, I am in constant touch with my staff, the 

staff of the Commission, my colleagues on the days that I am not 

physically sitting in the office. 

Mr. OBERSTAR. You have mentioned vacation a couple of times at 

least. How many days vacation are commissioners permitted? 

Mr. ANDERSON. Sir, I think. 

Mr. OBERSTAR. Who regulates that? 

Mr. ANDERSON. Presidential appointees are considered to be on 

all the time, and as such they do not have vacation. 

Mr. OBERSTAR. You don’t have any statutory limitation on time 

for leave? 

Mr. ANDERSON. Sir, my understanding is that when we get a 

time report, that it would show zero hours vacation constantly. 

Mr. OBERSTAR. So you can be absent physically from the Commission but participate in the vote by filling out a sheet of paper 

or a voting sheet and then direct staff to indicate the vote, is that 

correct? 

Mr. ANDERSON. Mr. Chairman, I have. 

Mr. OBERSTAR. You and the other commissioners? 

Mr. ANDERSON. And other commissioners through the notation 

process which allows for that to happen, and there are many reasons. 

Again, I want to be clear, getting back to an earlier question as 

to why we do not meet face to face, and there are many reasons 

not to meet in an open meeting that I did not clarify in the earlier 

statement: personnel issues, for example, or protected agreement 

issues or contract and internal budget issues where we don’t meet 

openly. Those are several reasons and there are others that would 

be the reason we use a notation process. That is my understanding 

of the Commission. 

Mr. OBERSTAR. On those kinds of issues, you meet two by two? 

Mr. ANDERSON. That is correct. 

Mr. OBERSTAR. Mr. Chairman and Mr. LaTourette, that is very 

much like proxy voting which we outlawed here during the very 

14 

first Republican year of majority in the House, took away the proxy 

voting. Maybe we ought to do the same here. 

If you were considering financial issues regarding cruise lines or 

the laws and practices of foreign governments, wouldn’t you consider that to be important enough to meet in Full Committee? 

I don’t mean to load all the questions on you, Mr. Anderson, 

since you are a bank of four. Someone else can step up and answer. 

I think we have lost the air in this room, but that is all right. 

Mr. CREEL. Yes, sir. 

Mr. OBERSTAR. You would meet as four. You would consider 

those in an open session. You would consider that to be appropriate. 

Mr. CREEL. Yes, sir. 

Mr. OBERSTAR. Has the Commission taken time to review the 

U.S.-China maritime bilateral and observe whether it is working as 

intended, whether the dwindling American-flag fleet is getting a 

fair shake? 

Speak up. You are all before us. You are certainly not on vacation right now. 

Mr. ANDERSON. I will speak, Mr. Chairman. We regularly talk to 

our Bureau of Trade Analysis. 

I can speak for myself. Every opportunity I have to meet with an 

American executive who is in the foreign trades, operating liner 

vessels and doing business in China, I personally ask them how 

their business access is in China. I seek out not only the opinions 

of our staff, but I seek out the opinion of people that are in the 

business of operating ships in those trades because I feel it is very 

important to get a balanced view on what is going on. 

But, yes, we do regularly also as well get briefings on the status 

of that trade. 

Mr. OBERSTAR. I spent a fair amount of time in 1999, at request 

of the State Department, in negotiation. Members of Congress can’t 

negotiate, but it was conversations with Minister Pung of the Maritime Administration of China in reopening the talks, formal negotiation talks between the U.S. and China. I am very happy that ultimately Secretary Mineta was able to sign an agreement. 

I think it is a very important matter for the Commission to follow up on, but if you are not meeting in open session and considering these issues, I wonder what kind of oversight you are actually conducting over the trade with this most important trade partner of ours. 

Ms. DYE. Mr. Oberstar? 

Mr. OBERSTAR. Yes. 

Ms. DYE. Before the agreement was signed, the Commission had 

a briefing from the Maritime Administration officials which, as you 

are aware, actually handled the talks. 

Mr. OBERSTAR. Yes, they actually did the negotiation, right? 

Ms. DYE. Yes, the FMC is very interested in providing ocean carriers access to the Chinese market. 

We were also concerned that American shipping intermediaries 

be able to do business in China, and I am very pleased that the 

Maritime Administration was able to negotiate some entryway for 

the shipping intermediaries and we were able to play a part in 

that. We continue to monitor that for which we are grateful. 

15 

Thank you. 

Mr. OBERSTAR. I think Mr. Cummings has indicated an interest 

in holding a hearing at a later time on a broader range of issues 

of this nature. 

Let me come back to this matter of the former general counsel 

of the Commission filed an EEO complaint. I understand that the 

Commission hired outside counsel. Did you vote on the attorney to 

retain to defend the Commission? 

Mr. CUMMINGS. Anybody want to answer? 

Mr. ANDERSON. Yes, Mr. Chairman. I believe we sought outside 

counsel. Under the sole contract provisions, we sought out through 

the Bureau of Public Debts Services. Since the Commission is a 

borderline small micro-agency, we sought their advice on seeking 

a sole-source contract on hiring outside counsel. 

At the time that we were informed of the informal filing of an 

EEO complaint by the general counsel, it was Wednesday of 

Thanksgiving. Prior to that, two days before, our only EEO employee, our director, since we are a small micro-agency had left to 

go to another agency to take another job at a larger agency. So we 

were without any counsel and advice to the Commission, Wednesday before Thanksgiving, and shortly thereafter I believe the Commission felt that we needed independent counsel to represent us. 

We sought counsel from the Bureau of Public Debts contracting 

process. They authorized us to hire an approved employment attorney to represent the Commission. 

Mr. OBERSTAR. Then the Commission hired an attorney based in 

Ohio. Were there no EEO case experienced attorneys in the Washington area? How did the Commission come to reach way out? 

That is not too far. Ohio is really not that far, but it is well beyond Washington. 

Mr. ANDERSON. Mr. Chairman, it was someone that had been referred to me, that I did not know at the time. 

Mr. OBERSTAR. You did not have a personal or professional relationship? 

Mr. ANDERSON. No. It was referred to me by somebody that knew 

this individual as an Ohio super lawyer, well respected and former 

deputy general counsel of the EEOC and referred to us. We contacted that person. 

Mr. OBERSTAR. That person made the reference to you of this attorney? 

Mr. ANDERSON. That is correct. 

Mr. OBERSTAR. It was not any personal relationship. Okay, that 

said, it is interesting to have that at variance with other information we have, but thank you for your response. 

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

We are very pleased to have with us the Ranking Member of the 

Full Committee, Mr. Mica. 

Mr. MICA. Thank you for yielding and I guess also for conducting 

this hearing. 

It is supposed, I guess, on the fiscal year 2009 budget of the Federal Maritime Commission. One of the things that concerns me in 

just listening to this is we find another agency without a chairman, 

the sort of situation we find ourselves in with other agencies. How 

long has the chairmanship been vacant, Ms. Dye? 

16 

Ms. DYE. It has been vacant since November, 2006. 

Mr. MICA. So I read under your charter that I guess the agency 

operates by all the remaining members directing the business of 

the Commission, is that how it is? 

Ms. DYE. Yes, sir, that is correct. By statute, the authority devolves to the entire Commission. 

Mr. MICA. All the terms are five years. When does yours expire? 

Ms. DYE. Mine expires in June of 2005. 

Mr. MICA. What? 

Ms. DYE. In June of 2005. 

Mr. MICA. That is when you started. So it would be 2010? 

Ms. DYE. Oh, 2010. Thank you. 

Mr. MICA. A 2010 expiration. 

Ms. DYE. Yes. 

Mr. MICA. Yours, Mr. Creel? 

Mr. CREEL. Mine is next June. 

Mr. MICA. Next June. 

Mr. BRENNAN. Mine is June 30, 2008. 

Mr. MICA. Okay. Mr. Anderson? 

Mr. ANDERSON. I am serving currently in an expired term after 

being renominated. 

Mr. MICA. So you still get to serve. The Commission positions 

have to be confirmed too by the Senate, don’t they? 

Mr. ANDERSON. That is correct. I was renominated for another 

five-year term. My term expired June 30th of 2007. I was renominated in August of 2007, and I have had a hearing before the Senate Commerce, Science and Transportation Committee in October. 

Mr. MICA. But they still allow you to serve? 

Mr. ANDERSON. But it still allows you to serve in an expired 

term. 

Mr. MICA. There must be one vacant or somebody didn’t want to 

show up today. One vacant? 

Mr. ANDERSON. There is one vacant. 

Mr. MICA. Well, it doesn’t seem the way to run an aviation agency or a maritime agency without somebody designated and specifically in charge and confirmed by the Senate. 

I see you asked for a 7.8 percent increase. What is the bulk of 

the increase, Mr. Creel? Do you know? 

Mr. CREEL. [Remarks off microphone.] 

Mr. MICA. This is a massive agency, 140 persons. What is it? An 

authorized FTE? 

Mr. CREEL. A hundred and twenty-one currently. 

Mr. MICA. How many? 

Mr. CREEL. We have about 121 currently onboard. 

Mr. MICA. You have more positions authorized. Then you have 

some vacancies? 

Mr. CREEL. That is right. We have a number of vacancies now 

that we are in the process of filling. 

Mr. MICA. But the biggest increase would be in personnel costs? 

Mr. CREEL. That is correct, the within grade promotions or within grade pay increases, the cost of living increases. 

Mr. MICA. You are authorized for 119 positions, and your budget 

asks for 131 and you don’t have positions that are filled. 

Mr. CREEL. That is right. 

17 

Mr. MICA. So what are the new positions you are requiring? 

Mr. CREEL. The 16 positions that we are recruiting for, they will 

be filled by the end of the fiscal year. But you asked for new positions, right? 

Mr. MICA. Yes. That is what this is about, I think, is trying to 

find out. 

Look at your budget request. It is a 7.8 percent increase. You 

have X number of positions, some not filled. You are authorized for 

119. You want to go to 131. We want to see what you are going 

to use the money for. 

Mr. CREEL. Right. 

Mr. MICA. Mr. Brennan, you are awfully quiet. Do you want to 

say something? We want to pick on everybody equally here. 

Mr. BRENNAN. If I could, I would like to comment on the issue 

of not having a chairman. I mean, it is like a four-headed monster. 

Mr. MICA. He said that. Where is the press? He said a four-headed monster. That was not Mica. 

Mr. BRENNAN. Well, to put it in perspective, it would be like the 

House of Representatives having four speakers with equal authority. 

Mr. MICA. Well, we have nobody in charge. 

Mr. BRENNAN. That is the position we are in. I mean, we need 

a chairman. I recognize the Chairman. I respect what you said on 

the basis—— 

Mr. MICA. I would like to run the Committee without a Chairman for a while. 

[Laughter.] 

Mr. OBERSTAR. Not a chance. 

Mr. MICA. That would be strong. 

Mr. BRENNAN. But my point is this is one of the problems this 

agency has. 

Mr. MICA. I don’t mean to make light of it. It is a serious situation. 

The other thing too I notice is it is a small operation. 

I have been very impressed with the Maritime Administration. 

What is his name? Connaughton, yes, he seems to be the only one 

with his act together from this Administration, with a vision for 

transportation. 

I asked the question. I guess at one time, before 1961, it was together, the Maritime Administration and your Commission, and 

separated off. Would you recommend any re-look at that and then 

is the Commission too big? Maybe we should go to three. It appears 

it is even difficult to operate with five. 

Any thoughts? 

We will start with Ms. Dye. All of you can respond: Ms. Dye, Mr. 

Creel, Mr. Brennan and Mr. Anderson. 

Ms. DYE. Mr. Mica, I would be delighted to talk with you about 

all those issues and several other policy issues as well when you 

are available. I do have my personal feelings on the best way to 

approach these issues. I am not sure they are shared by my colleagues. 

But, of course, there are all sorts of different administrative advantages to five-member or three-member boards. 

Mr. MICA. So you would keep the five-member board? 

18 

Ms. DYE. Five-member commissions and three-member boards. 

Mr. MICA. You just need somebody? 

Ms. DYE. The Surf Board operates very well over in the Department of Transportation with its three members. So there are several alternatives. 

Mr. MICA. The question was raised about you not meeting 

enough. How often do you formally meet or did you meet like in 

2007? I have no idea. 

Ms. DYE. We met twice in 2007. 

Mr. MICA. Twice? 

Ms. DYE. Yes sir. 

Mr. MICA. Do you do the rest of the business, as was described, 

through sort of a proxy vote with nobody in charge? 

Ms. DYE. Our notation process actually is authorized under a 

Commission order, so there is a formalized way to proceed when we 

vote on paper by notation. It is employed frequently and, of course, 

much more frequently now that we have all been required to participate in each vote on administrative matters due to the absence 

of a chairman. 

Mr. MICA. So keep it the same number and somebody in charge. 

Then what about the question of re-looking at any combination of 

the administration, would the Commission now keep it the way it 

is? 

Ms. DYE. Yes, sir. I believe that the Federal Maritime Commission can operate to the advantage of the American citizen with 

some changes. 

Mr. MICA. Mr. Creel? 

Mr. CREEL. Yes, sir. I agree, as well, with Commissioner Dye. 

Anyway, I believe that we should keep the Maritime Administration and the Federal Maritime Commission separate because they 

were separated for a reason and that still stands today. 

Mr. MICA. You are the regulators. 

Mr. CREEL. We are the regulators. They are the promoters of the 

industry. And so, it would seem that those two things together 

were inconsistent. I think those reasons are still valid. 

I think it is also critically important to retain the FMC as an 

independent agency. As we were talking about earlier with Mr. 

LaTourette, it gives us the ability to take independent action 

against the vessels of foreign countries if they are doing something 

that is offensive to vessels that call in the U.S. or U.S.-flag vessels. 

That is a very unique authority, and I think that retaining that 

authority is essential, and I think that the shipping public would 

agree with that. 

Mr. MICA. Most of the goods coming into the United States are 

foreign-flagged and almost all the cruise ships, foreign-flagged. 

Mr. CREEL. Absolutely. 

Mr. MICA. Also, somebody said 90 percent of the imported goods 

that enter the United States are on those vessels. 

Mr. CREEL. That is right. About everything you see around you, 

maybe not in here but that is in commerce today in the United 

States was brought on a ship, especially anything that is not extremely high value that would be on an airplane. 

Mr. MICA. You are the only agency then that is vested with the 

responsibility for regulation in that regime? 

19 

Mr. CREEL. That is correct from the trade aspect. 

Mr. MICA. Mr. Brennan, I don’t want to take too much time. 

Mr. BRENNAN. I share much of what he said. I mean, I think we 

are meeting our principal responsibility, and that is oversight over 

the carriers who have an exemption from antitrust, meaning they 

can get together and talk about rates. I think we have been effectively meeting that responsibility. 

Mr. MICA. Mr. Anderson? 

Mr. ANDERSON. I believe too, Mr. Mica, that the Commission is 

fulfilling a very necessary responsibility. 

Coming from the maritime industry, as you may recall, working 

for a United States Jones Act company for 10 years in the operation of vessels, I have seen it from both sides, and I believe that 

the Commission fulfills a very important role, also consumer protection with the cruise lines and some of the other areas as well 

as a very unique niche that we have in the maritime security 

where we contribute to Customs and Border Patrol and Homeland 

Security efforts. 

Mr. MICA. Thank you. 

Mr. CUMMINGS. Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman, and thank you very 

much for holding this hearing. 

I am struck by the juxtaposition of three things: one, a Federal 

Human Capital Survey that suggests very poor morale on the part 

of the workforce of the Commission; second, I guess an understanding buttressed by testimony this morning that the 8-hour 

work day and the 40-hour week are exceptions rather than the 

norm for commissioners; and then, finally, a 10 percent increase in 

staff which I know the raw numbers are small, but we have precious few departments across the span of the Federal Government 

that are increasing their staff by 10 percent in any 1 year outside 

of the Pentagon and perhaps the Department of Homeland Security. 

I think one of the basic precepts of management is if morale is 

poor, staff performance is less than optimal. I think another precept of management is that if the staff perceives that they are 

working harder than their leadership, that serves to be a disincentive for them to put out their maximum effort. 

And so, my question is: Is a 10 percent increase in staff absolutely essential or, with better leadership, with more commitment 

from the commissioners and better personnel management practices, would you have a more productive staff and thus not need 

to increase the staff by, as I say, what is a very generous percentage in this climate? 

I will put that to any one of the commissioners. 

Ms. DYE. Mr. Bishop, we are not actually asking for increases in 

staff levels. We have lost a lot of people, and so we are working 

hard right now to backfill and get those positions filled again. 

Mr. BISHOP. If I may, my understanding is that the enacted 

budget for fiscal year 2007 authorized 119 full-time equivalent positions and the proposed budget authorizes 131 full-time equivalent 

positions. So that is where I get the number of the 10 percent increase in staff. 

20 

Ms. DYE. Staff tells me that 119 was our actual level, not the authorized level. 

Mr. BISHOP. So the 131, you are saying, does not represent a 

growth, that that is the baseline and 119 represents attrition and 

vacancies that have not been filled? 

Ms. DYE. Yes, sir, I believe that is correct. 

Mr. BISHOP. But would you believe that the Commission is functioning appropriately at the level of 119? 

Ms. DYE. No, sir. 

Mr. BISHOP. I am sorry. 

Ms. DYE. No, sir. I believe that we do actually need to get back 

up to strength, to fill those positions. 

Mr. BISHOP. Let me ask this question. The management study 

that was conducted spells out some pretty compelling challenges: 

lack of trust, lack of leadership, lack of vision, opposition to change, 

poor information management and lack of interaction between the 

commissioners and the staff. Do you agree that those findings are 

accurate and, if so, what do each of you intend to do about a condition that I think any reasonable person would consider to be unfortunate, if not extremely difficult? 

Ms. DYE. Unfortunately, Mr. Bishop, I do agree that many of 

those things are true, and I am ready and willing and anxious to 

change the work environment at the Commission, and I appreciate 

your question. 

Mr. BISHOP. I thank you for that response, and I don’t mean to 

put you on the spot, but are there impediments that constrain your 

readiness or your eagerness to put in place the kinds of changes 

that would need to be made? 

Ms. DYE. No, sir, not on my part. There are no impediments on 

my part. 

Mr. BISHOP. So, may I ask then why it has not happened? 

Ms. DYE. I believe that the commissioners need to work together 

and make a conscious decision together with a focus to change that 

environment, and I believe that we can do that. 

Mr. BISHOP. Do you believe that the commissioners need to be 

more physically present than they currently are in order for that 

focus to be realized? 

Ms. DYE. I believe that we can. Yes, sir, I do. 

Mr. BISHOP. All right. How about the rest of your colleagues? 

Mr. CREEL. Yes, sir, if I could just go back for one second to clarify a little bit on the numbers, the employee numbers. 

Mr. BISHOP. Okay. 

Mr. CREEL. One thing that I forgot to mention earlier to Mr. 

Mica was we don’t have the chairman and the chairman’s staff. 

That makes up some of the numbers. Also, we are a commissioner 

and a commissioner’s counsel short too. So that also fits into the 

mix. 

Let me tell you. I have been at the Commission for 14 years. I 

was the longest serving chairman, under President Clinton. 

I have a personal affinity for the place and the people there. I 

know the people individually. I know their personal stories. They 

come to me and talk to me about work issues and even about personal issues sometimes. 

21 

The worst thing I have heard here today is the lack of confidence 

and the lack of happiness about the employees working there. 

When I first came on, I was really amazed at how dedicated the 

staff is there, and I mean that from the bottom of my heart. 

We have lost some people that were damn good employees and 

should not have gone and, yes, it is our fault. 

Granted, we have had an awkward situation. We don’t have a 

chairman. We kept thinking we were going to get a chairman. That 

issue bled over into a lot of different areas including management 

and the perceived role of employees of the agency. 

I think we have turned a corner. I know that we are making an 

effort to do that. As Commissioner Dye said, it starts with us. Poison goes downhill, and people pick it up. If we are having issues, 

they pick it up, and that is not fair. 

We need to act like grownups, address our issues and do what 

is in the best interest of the government, of our constituents and 

the people that work there. I mean you look at the number of people that have been in the agency for 20, 30 years. I mean it is phenomenal, and we have a responsibility to honor that and to make 

them enjoy where they work and to feel like what they do is worthwhile. 

And so, I am the first one to admit the problem starts here and 

it should stop here. Whatever we need to do to make it work, I am 

committed to doing that. I know the rest of us, of the commissioners are. 

We will report back to you on this. You are right in deserving 

an explanation on that capital survey. So anything we can do to address this, I will personally commit to. 

Mr. BISHOP. Thank you. 

Mr. Chairman, I know my time is expired. I just want to say that 

my understanding of this very depressing survey is that it was 

taken at around the time the prior chairman left. So let me just 

caution all of you that we ought not to view the absence of the 

chairman as the principal reason why morale is as low at least as 

it appears to be. Whatever the reasons are, they go far beyond the 

absence of a chairman. 

Thank you, Mr. Chairman. I appreciate your indulgence. 

Mr. CUMMINGS. Thank you, Mr. Bishop. 

Let me go back and just follow up on what Mr. Bishop said and 

was asking and go to you, Mr. Brennan and you, Mr. Anderson. 

Mr. Anderson, particularly you, since you are right in line to be 

the chairman, I am sure the findings of this survey must concern 

you. This survey has been out since 2006. When did you come on 

board? 

Mr. ANDERSON. In 2003, the end of 2003. 

Mr. CUMMINGS. What are your plans? 

Ms. Dye and Mr. Creel have committed to trying to improve on 

this situation, and I am so glad that they did not pooh-pooh the 

feelings of employees, and I really appreciate that. These are 

human beings with families, who work hard every day and give the 

government their blood, their sweat, their tears, and they deserve 

to be able to come into a working environment that they feel good 

about. 

22 

All of us know that no working environment is going to be perfect, but when you have pretty much half of your employees saying 

they don’t like where they work or they feel that the leadership is 

not at all motivational or what have you, it should concern all of 

us. 

And so, Mr. Anderson, since the President wants you to be the 

chairman, I am just wondering what you plan to do. First of all, 

what do you think of the survey? 

Mr. ANDERSON. Mr. Chairman, I think that the survey is disappointing, but again I am not that familiar with the numbers. It 

did take place in 2006 when it was reported. I think there is obviously room for improvement. 

I come from, as you know, the private sector, and I have been 

so impressed with the quality of the people that I have been able 

to work with while in government. It has been an honor to serve 

with people that are dedicated. We have 30 and 40-year employees 

at the agency. 

To clarify it, the reason a number of the vacancies that took 

place that we currently have are because of retirements which I 

think all government agencies are facing with the Baby Boomers 

starting to retire. We have lost some good people, but there is room 

for improvement. 

My philosophy in leading, Mr. Chairman, is very simple. First, 

any organization, whether it is private, public, your church or what 

have you is only as good as the people that work there. If they are 

not happy, it is hard to be a good, efficient, working operation in 

a government agency or a business. 

I also believe in continuous improvement. There is plenty of room 

for improvement to get where our people are happy. If you are 

happy where you work, it impacts every other area of your life, and 

that is my sincere belief. You are happy at home, and you are 

happy with your family. Work is very important. 

I would strive very hard to provide the necessary leadership by 

having management meetings on a regular basis, interacting with 

the employees. Something I learned from an old boss of mine, he 

was 78 and he used to call it management by walking around, talking to people, finding out. What is the clerk that you never see? 

What are they thinking? 

The other area that I would see is bringing in industry experts, 

which they are glad to do. I have recently spoken, of course with 

the permission of my colleagues, to the cruise industry president of 

CLIA to come up with his staff and have an all day meeting with 

the Commission to talk about industry trends. 

Also, I have talked to some other industry professionals from the 

World Shipping Council. Can we bring them in so that we are getting some of the best leading-edge people that are out there in the 

industry operating to help us better understand what is actually 

happening? It is very difficult to just read and understand what 

the industry is about. 

I also believe that I would foster people getting out and seeing 

the industry, where we could go out and visit ports, visit marine 

terminal operators and have industry professionals sort of share 

with us what they do on an ongoing basis in the all important area 

23 

of trade for this Country. Intermodal trade is critical to the future 

of this Country. 

Mr. CUMMINGS. Let me ask you this, can you all do some of those 

things now? 

See, what is happening is I don’t know when the Senate is going 

to do their thing. I don’t have a clue. In the meantime, we have 

people who have to come to work every day, and you mentioned 

some nice things. 

Let me tell you one of the things that concerns me and has always concerned me about hearings is that folks will come in here, 

they will make commitments, and then we may not hear from them 

for another two years. They know the players are going to change, 

and so the next thing you know it is the same old, same old over 

and over and over again. 

One of the things that the Chairman has emphasized to us and 

I have learned it from him is to try to stay on top of these issues. 

That is when the commitments are made, make sure commitments 

are kept. 

So I am going to ask you all since you all are acting jointly and 

you all do all this voting, however you may do it, that you do some 

the things that you just said. Will you do that, the four of you? 

Mr. ANDERSON. Mr. Chairman, I will give you my commitment. 

If your staff has the time, I will come back in, whether I am chairman or not, while I am at the Commission and meet with them and 

give them updates. 

Mr. CUMMINGS. Why don’t we do that? Why don’t we get an update, say, in two months? How about that? 

Mr. ANDERSON. That is great. 

Mr. CUMMINGS. From today. 

Mr. ANDERSON. That is great. 

Mr. CUMMINGS. Let me ask you this. Let me tell you what really 

concerns me, though, Mr. Anderson. Then I will ask Mr. Oberstar 

if he has anything else. 

Let me tell you what concerns me, something you just said a moment ago. I asked you about this survey, and you—correct me if I 

am wrong—indicated that you were not that familiar with it. Is 

that what you indicated? 

Mr. ANDERSON. I am familiar with the capital survey. At first, 

when another member, forgive me. 

Mr. CUMMINGS. Mr. Bishop. 

Mr. ANDERSON. Mr. Bishop mentioned a study, and I wasn’t 

aware of a study. 

I am familiar with the capital survey that was done. I believe 

that was done Government-wide two, two and a half years ago, and 

I think the results that you are quoting from are from that capital 

survey. That was widely distributed through the agency, and we 

had numerous reminders of people to participate in the survey. 

However, we did not get, during that time, and I am not trying 

to project this onto the former chairman there, but we didn’t get 

a lot of that kind of information back to us. That is one area where 

it would have been very helpful. 

A number of us and a big advantage to having co-managed here, 

Mr. Chairman, is that we have had the ability to learn a number 

24 

of things within the agency that ordinarily commissioners were not 

getting the benefit of knowing about. 

Mr. CUMMINGS. I want to yield to Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. 

Mr. Anderson, you just said something that causes great alarm 

for me, and I just want to make sure I understood you correctly. 

I referred to a management study conducted by Don Cole. If I 

heard you correctly, you just testified that you were unfamiliar 

with that study. Is that correct? 

Mr. ANDERSON. Yes, I am. 

Mr. BISHOP. Now it is my further understanding that Mr. Cole 

has a lawsuit pending against the Commission because he is alleging that he has not been fully paid over a three-year period. 

So, one, I am to understand that a management study was conducted of Commission staff about which commissioners or at least 

you, Mr. Anderson, are not aware and, secondly, that study has resulted in a lawsuit about which commissioners are also not aware. 

Am I correct in both of my understandings and, if I am correct, 

could you please tell me how this state of facts could come to be? 

Mr. ANDERSON. Mr. Chairman, I can answer for myself. I am not 

aware of the study you are referring to. It was in late 2006. It came 

to our attention that a management consultant who had previously 

worked solely for the previous chairman wanted to meet with the 

Commission to extend a contract, a contract to which we had never 

known about nor previous knowledge because he worked solely at 

the discretion of the previous chairman. 

It was my understanding, as it was explained to me, that he was 

the chairman’s personal consultant. Whatever that may mean, I 

was not privy to the management study that you are referring to. 

Mr. BISHOP. If I may, is your understanding shared by your three 

colleagues? Do any of you have any knowledge of this study and 

of the lawsuit that goes beyond what Mr. Anderson has just said? 

Mr. BRENNAN. Mr. Congressman, if you are referring to a Cole study for which the government spent $200,000, to the best of my 

knowledge, there was no formal written report and, secondly, there 

is no pending lawsuit. There was some dispute, and I think, along 

with what Mr. Anderson said, this was pretty much done by the 

prior chairman on his own determination. 

I do not think there was anything in writing whatsoever. That 

is correct. There is nothing in writing, nothing, zero. 

Mr. BISHOP. Mr. Creel? 

Mr. CREEL. I have not seen a Cole report. 

I can give you a little background, and, again, I think we have 

to be a little careful here because there is the potential for litigation here. A little bit of history, this contractor started back in, I 

think it was, 2003. It was under the auspices of the chairman who 

did the hiring and hands-on administration of the contract. 

There were a couple of problems with the way the FMC handled 

that. I am not trying to put the blame, but we Commissioners 

weren’t involved in this contracting, but the FMC did not handle 

that correctly according to our Inspector General who has done an 

audit of that contracting process or procedure. 

Again, to be a little careful here, so the agency did a couple of 

things wrong in the way it set up the contract. I think, first and 

25 

foremost, there were no deliverables. This agreement, I mean this 

report, I am not familiar with. 

Mr. BISHOP. I am going to interrupt you. I am told by staff that 

there is, in fact, a written report, that we in fact have a copy. 

Mr. CREEL. I would like to see it. 

Mr. BISHOP. I am sure the Chairman would be happy to share 

it. 

Mr. CUMMINGS. We would be happy to get it to you. 

Mr. CREEL. I am sorry. 

Mr. BISHOP. I am taking too much of the Chairman’s time, but 

let me just say that this, if nothing else, seems to me to underscore 

the necessity of the four of you meeting together, all four of you, 

much more frequently than is currently the case. If that requires 

compliance with Sunshine Laws, then so be it. 

I think the fact that there is so much going on that some of you 

seem to be hearing about for the first time today and some of you 

seem to have a level of knowledge that eclipses the level of knowledge that some of your colleagues have, and I find it just shocking, 

frankly, that the four of you don’t all have the same level of knowledge. I think an easy way to help remedy that is to simply meet 

more often and share what you each know with one another and 

then share it with your staff. 

Thank you, Mr. Chairman. I yield back. 

Mr. CUMMINGS. Thank you. 

Ms. Dye, have you seen the report, the Cole report? 

Ms. DYE. Mr. Chairman, I do remember a majority commission 

vote which actually suspended Mr. Cole’s contract before he was 

able to come to Washington to deliver his final report to us. 

Mr. CUMMINGS. Go ahead. 

Ms. DYE. If I remember correctly, that is why we didn’t receive 

his final report on that. 

Mr. CUMMINGS. Well, we do have the report. 

Ms. DYE. I would very much like to see it. 

Mr. CUMMINGS. We will get it to you, get you a copy. 

Before going to Mr. Oberstar, I just want to echo what Mr. 

Bishop just said, and he basically went down the path that I was 

traveling. 

I think that, Mr. Anderson, the reason why it concerns me about 

this lack of knowledge of the report and whatever, if there is anything that has the ability to take the foundation out or effect my 

agency that I am about to head or I am interested in heading, I 

make it my business to know about it. I mean I don’t think there 

is anybody in this room who would go into a situation where they 

did not have complete knowledge of what they were about to head. 

It doesn’t make sense, and that concerns me. It also concerns me. 

I am not going to repeat what Mr. Bishop said because he said 

it eloquently, but we have to do better. We really do. 

Mr. Creel, you said you have been around for 14 years. If people 

saw this on C-SPAN, knowing that we have folks making 140 some 

thousand dollars. I mean the people in my district, if you were 

making $80,000, they would think that was a lot of money. 

But to hear some of the testimony that we have heard today is 

quite concerning. It should concern all of us. It really should. I can 

26 

understand, as Mr. Bishop has said, if you are not meeting, I think 

it just leads to this dysfunctional type situation. 

Mr. Oberstar. 

Mr. OBERSTAR. Excuse me, Mr. Chairman. I am a little distracted about a rather disturbing development. One of the presidential candidates is proposing to suspend the gas tax for this summer, and the tens of thousands of jobs that we will lose as a result 

of that makes $36,000 alterations on the chairman’s office sound 

like peanuts. 

But that decision was made. Who made that decision if you commissioners didn’t come together and vote on it? Mr. Creel? 

Mr. CREEL. Yes, sir. That was made by or the decision was made 

by our Office of Administration, I think, as part of the normal replacement of furniture. 

Having sat in those chairs myself for a number of years, it was 

time to replace them. In fact, the conference table was former 

Chairman Helen Bentley’s dining room table and some of the upholstered furniture was former Chairman Elaine Chao’s. 

Mr. OBERSTAR. She wouldn’t mind donating. She would get a 

pretty good tax break from that. 

Mr. CREEL. We don’t have a cook anymore, though. 

But no, seriously, it was my own personal belief that it probably 

would have been better to replace that furniture before getting a 

new chairman as was part of normal replacement. I mean it was 

on the schedule to be replaced anyway. 

Mr. OBERSTAR. But it is not that the commissioners didn’t act on 

it. You knew about it. You just didn’t vote on it or you didn’t have 

a formal meeting to discuss this. 

You said this is normal procedure that the executive director, 

senior executive service person makes that decision without confirmation by the Commission? 

Mr. CREEL. Well, it is part of a plan to replace furniture throughout the agency. 

Mr. OBERSTAR. Well, where did the money come from to do that? 

Mr. CREEL. I believe that was from savings from attrition that 

we had over the course of the year and that there was no chairman. 

Mr. OBERSTAR. The loss of jobs and loss of personnel meant that 

the Commission wasn’t paying that out in salary to staff. Therefore, you took that money to commit it to furniture upgrade or replacement. 

Mr. CREEL. I believe so. 

Mr. OBERSTAR. I don’t have any problem with upgrading furniture and you ought to have a decent place in which to work, but 

it is the process by which this is done. 

Mr. CREEL. I agree with you, and this certainly brings it home 

that we have to start working together as a group and realizing 

that this is likely to be the scenario. I mean early on. 

Mr. OBERSTAR. That is a significant statement: working together 

as a group. You have four very intelligent people. I have known 

Ms. Dye since the time she served on the Merchant Marine and 

Fisheries Committee staff and then on the staff of this Committee. 

27 

I have known Mr. Brennan from the time he served in Congress, 

all too briefly. He should have stayed. He would be on this panel, 

asking questions. 

Mr. Creel, I remember your previous service. 

You are very capable people. You ought to be able to get together 

and figure these things out and work as a Commission without a 

chairman. You have a headless horseman here, but you can do this 

work. 

Mr. Brennan? 

Mr. BRENNAN. If I might comment, we expected from month to 

month that there would be a chairman. The chairman does the administrative work. 

As I said before, you folks couldn’t run the House of Representatives with four speakers. You know it is tough enough with one 

speaker. That is a problem, but it is no ongoing excuse. We have 

to address it. 

In regard to furniture, so the idea won’t be there that we are 

going crazy, I have been there eight years. We have acquired one 

map. That is it. 

Mr. OBERSTAR. Well, it is a pretty sad state of affairs the way 

the Commission has to be run. But, look, just take hold of it. Will 

you? Take charge of this Commission. It is an important function. 

We are going to have a subsequent hearing on the substantive 

matters with which the Commission is entrusted, and Mr. 

Cummings is preparing for that. Mr. LaTourette, I am sure, relishes the opportunity. I do, and I look forward to having that hearing. 

Be prepared. 

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

Mr. Creel, you look like you are getting ready to jump out of your 

seat. Did you want to say something? 

Mr. CREEL. I am sorry. I didn’t mean to look like that. 

Mr. CUMMINGS. That is all right. 

Mr. CREEL. Mr. Chairman, I just wanted to say, back to the personnel and their satisfaction, one thing that I have noticed over the 

course of the years there that is frustrating, both from this level 

and also from the level of those in the jobs, is that there is a lack 

of upward mobility. Some people that have been there for years 

and years and years, who are extremely capable and know the industry know their jobs, know the agency, but there are not necessarily positions for them to move into. 

That is something that I don’t know how we address it, but I 

would like to address it. I can think of a handful of people right 

now that are extremely qualified for other jobs that aren’t there. 

Mr. CUMMINGS. I think that perhaps, going back to something 

Mr. Anderson said, maybe when you all bring in some of these outside experts. The cruise industry, I think you mentioned, people 

that seem to be doing it right. Perhaps they can give you some information that might be helpful. 

I think there are a lot of agencies, private and public, that have 

that problem. There are people that have studied this thing and 

found ways to keep people motivated and so forth and so on. I just 

hope that you will do the things that you said, Mr. Anderson. 

28 

I was just telling Mr. LaTourette that I am sure it does create 

a problem when you are trying to operate with four people, but 

there is some kind of way that we still have to operate. And so, I 

hope you will take heed. 

Mr. LaTourette. 

Mr. LATOURETTE. Thank you, Mr. Chairman, and I want to 

thank you all for your testimony today. 

One of the reasons that I like working with Chairman Cummings 

is that he has taken Chairman Oberstar’s observation that we 

shouldn’t just have hearings and then everybody goes on their way 

and comes back a couple years later and we find ourselves in the 

same position. So I welcome his observation that we will get a report back within 60 days, and I look forward to the Commission 

embracing some of those changes. 

I am also cognizant of the fact and in my conversation with the 

Chairman that it is not unusual for a commission or a board or an 

agency in the Federal Government, at the wind-down of an administration, to be short some members. There aren’t a lot of people 

that are jumping at the opportunity to get a six-month assignment 

before the new administration comes in. 

But I do want to focus on this Cole report for just a second because this hearing, I think, has indicated that the Commission can 

do better in its oversight just as the Congress can do better in its 

oversight, but I am not a big fan of coming to hearings and finding 

out something for the very first time. 

So my question to each of you, and I think you have answered 

it, but before coming to this hearing today and either hearing Mr. 

Bishop’s questions or the Chairman’s questions, were you any of 

you aware that this Mr. Cole, whomever he happens to be, had 

submitted something in writing? 

Mr. Anderson, did you know that? 

Mr. ANDERSON. No, I was not aware there was any report in 

writing. 

Mr. LATOURETTE. Mr. Brennan, I think you said. 

Mr. BRENNAN. I was not. The general counsel, he is not aware 

of it. 

Mr. LATOURETTE. Mr. Creel? 

Mr. CREEL. No, I am not. I am not aware of that. 

If I could also make a point on the Cole contract, to make the 

other side of the point, I was saying the agency had some shortcomings in the way it handled the procurement. I feel very strongly 

about where the majority of the Commission is on this issue, and 

that is to seek $56,000 in reimbursement which is being very liberal and giving Mr. Cole a lot of leeway. 

There were no receipts for a number of things. There were invoices that said just professional fees and travel, no hotels or no 

airlines or some airlines, some hotel receipts. He would charge 

$2,000 a day when he did one thing as opposed to $250 an hour. 

It was always billed in increments of a half day at $1,000 or 

$2,000. 

Anyway, I feel very strongly that what we are doing is in the 

best interest of the government and the people to recover that 

money. So I want to make that clear. 

Mr. LATOURETTE. All right. Thank you. 

29 

Ms. Dye, just the same question, before coming here today, were 

you aware that this Mr. Cole person had put something in writing? 

Ms. DYE. I was not aware of a specific report in writing, but I 

was aware that he had a final report that he was prepared to give 

to the Commission. As I said before, I wanted to see the work that 

he had, that the government had paid for at that time, and I look 

forward to seeing it from the Committee. 

Mr. LATOURETTE. But, basically, that report wasn’t forwarded to 

the Commission because there was some dispute between the Commission and Mr. Cole as to whether he should be paid and how 

much he should be paid. 

Ms. DYE. Following an Inspector General audit of the contract, 

the contractual arrangements for his payment, the Commission 

voted to suspend the contract. Since his contract had already expired, the Commission’s vote cancelled his final visit at which time 

he would have delivered a report. Whether or not that report had 

been formalized in writing at that time, how he would have delivered that, I am not aware. 

But, as I said, I wanted to see it then; I would be delighted to 

see it now. 

Mr. LATOURETTE. I think we would all want to see it. 

Mr. Chairman, I would just say that apparently the staff has a 

copy of Mr. Cole’s report. You are going to give it to the Commission. I think we would all be anxious to take a look at it. 

I do have to say what I am hearing here is that you have a contractor who was hired by the former chairman outside of the normal way that somebody should have been hired. He has been paid 

a lot of money. Mr. Creel at least, the longest serving chairman in 

the history of the Commission, thinks that there is some discrepancies in the bill. Apparently, after his contract was not renewed 

and his report was not delivered, he is seeking payment and has 

delivered the report to the Committee and not the Commission. 

To me, that seems a little fishy, and I would just ask if we are 

going to have a follow-up hearing, perhaps we could ask Mr. Cole 

to join us and not only share his thoughts on the operation of the 

Commission but also his activities and how he chose to bill the government for the services that he has billed the government for. 

I thank you, and I yield back my time. 

Mr. CUMMINGS. Thank you. 

Let me just say this, Mr. LaTourette, and I am glad you raise 

the issues that you did. I was just checking with the staff to find 

out how we got the report, and they tell me we got the report from 

the Senate staff because they had it connection with the confirmation of Mr. Anderson. So we will make sure you get it and the commissioners get it. 

Mr. Mica. 

Mr. MICA. When did you get nominated, Mr. Anderson, for chairman? 

Mr. ANDERSON. It was in August. I believe it was 15th of 2007. 

Mr. MICA. In 2007, but there has been no chair since? 

Mr. ANDERSON. November of 2006. 

Mr. MICA. Unbelievable. I mean I can’t blame the Commission, 

but imagine trying to run a Subcommittee without a Chairman. 

Imagine trying to run a Committee, an administration. 

30 

It is a small operation that only has, what, 100 and whatever 

number of employees. People talk about having low morale and disgruntled employees when there is no one in charge. I just can’t 

imagine. It is not your fault. There is something wrong with this 

process of not being able to have someone in charge. 

I won’t get into that. I tried to find out a little bit about what 

you wanted to do with some of the additional money. 

One of the things that impresses me with your mission is you are 

responsible for an important role, and that is oversight and regulation primarily of the foreign shipping activity because, again, there 

are so many flagged vessels and cruise ships and others that are 

outside U.S. flagging. 

I would like to ask all four of you a question about how is there 

any possibility or any way or what could we do to increase U.S. employment, U.S. flagging, U.S. recapturing of some of this segment 

of the international maritime and shipping business. Are there any 

things that can be done or is this just something we have lost forever? 

I like to pick on Ms. Dye, and we will go south from there. 

Ms. DYE. Yes, Mr. Mica. One of the reasons that we reformed the 

Ocean Shipping Act in 1998 was to support and encourage greater 

U.S. exports. 

I have been talking recently to the staff and Commissioner Creel 

and I had a brief conversation about the fact that lately and ironically, because of the fall of the dollar, that U.S. exports have increased although imports still dwarf the percentage of exports, but 

that is very encouraging to us. I am interested to make sure that 

the Commission is doing everything it can to make sure that containers get where they need to be, so U.S. exporters can keep that 

sale and get their goods to their foreign markets as soon as possible. 

So, yes, I think that we are always on the lookout to make sure 

that our U.S. businesses get as great a share of the worldwide marketplace as possible. 

Mr. MICA. Mr. Creel, you have been around a while. Any hope 

of us getting back into the market and anything we can do? 

Mr. CREEL. Mr. Mica, it is all a matter of dollars, of course. 

There are tax incentives for U.S. owner-operators. There is a U.S. 

build requirement. Talking about the Jones Act, it is just domestic, 

U.S. build, U.S. crew requirements. I know that even some of the 

U.S. maritime unions have offered to be competitive on wages, and 

I think that would be helpful. 

It is hard to compete on the shipbuilding issue with foreign countries that subsidize their shipbuilding so heavily or their ship operations as well since we don’t subsidize that. 

Mr. MICA. One of the things I have tried to encourage—I will inject it since you didn’t get a chance—is transit by short sea shipping because we have so much potential on the coast and waterways to increase the volume and take it off the highways. It certainly has to be much more fuel efficient when a trucker now 

spends $1,000 to fill up his or her tank and also the damage that 

is done. 

31 

I am going to hold a little forum and try to get some more interest in short sea shipping which we might get a few more people involved. It might make sense, and it may be attractive. 

Mr. Brennan? 

Mr. BRENNAN. I would just say 20 years ago, when I was serving 

on the House Armed Services Committee, there was great discussion and concern about losing the capacity to have American ships, 

losing the skills. Twenty years later, I am not sure any progress 

has been made. 

What can you do about it? I don’t know. Maybe some variation 

of the Jones Act. I think that spells protectionism and things of 

that sort and all the ramifications that take place from that. 

Mr. MICA. Okay. Mr. Anderson? 

Mr. ANDERSON. Yes, Mr. Mica. Coming from maritime operations, it has been part of my background and a Jones Act industry. The Jones Act has served a very necessary purpose over the 

last century for many reasons, but as we have seen at the Commission, global dynamics change the way some things should be 

looked. 

I believe, as some of my colleagues have indicated, it is all about 

the dollar of operating U.S.-flag ships versus foreign-flag ships. I 

think the tax incentives that have been in the past have been helpful. 

But I think looking at one possibility is looking at the consideration of allowing foreign-built ships to be U.S.-flag and operated by 

U.S. crews. I think that is an area that we could. I know our maritime academies are full. They can’t handle any more capacity. That 

is something that I think is a good indication for the future for 

U.S.-flag. 

You mentioned short sea shipping on marine highways. Today, 

there is a conference for that in Norfolk, today and tomorrow, on 

short sea shipping. I know this Committee approved some funding. 

I think that is critical to the long-term infrastructure needs of the 

United States’ transportation system as well as promoting more 

U.S. seaborne jobs for our union workers and for United States citizens. 

Mr. MICA. Well, I don’t get to see a four-headed monster too 

often, Mr. Chairman. Actually, they don’t look bad. Personally and 

individually, they are of fairly attractive countenance. But operationally, it is a nightmare as we heard described. 

I don’t know what to do. We need to get somebody in charge and 

get the agency back on track. 

Thank you. I yield back. 

Mr. CUMMINGS. Thank you very much, Mr. Mica. 

Let me just say this as we close. I want you to understand that 

one of the people that I have just gained a phenomenal amount of 

respect for is Sean Connaughton. I think he is one of the best 

things you all have going, seriously. He has been extremely responsive. 

I have listened to him talk about educating folk, our kids, so that 

they can move into the maritime industry, and he seems to be very, 

very committed. 

And so, when you all talk about people working in the agency 

that are committed, if he is an example of the type of people you 

32 

are talking about, Mr. Creel, I got to tell you, you are talking about 

one of the finest people that I have met since I have been in the 

Congress, and I have been here now some 13 or 14 years. 

The other thing that I wanted to say is on the short sea shipping 

thing. I want to make sure. I agree with Mr. Mica. It is something 

that we definitely need. We have been pushing on this end, trying 

to do everything that we can, and I agree with Mr. Anderson that 

it would be a tremendous boost for all of us. 

I was just asking staff. We have some legislation in Ways and 

Means now on short sea shipping. We haven’t been able to get it 

moved, but we understand that maybe they are waiting for a bigger vehicle to include it. It is something that just makes sense to 

me, a lot of sense. 

Did you want to say something, Mr. Creel? 

Mr. CREEL. I like short sea shipping because I travel on I-95 a 

lot. 

Mr. CUMMINGS. Is that right? 

I made a mistake. Mr. Connaughton is the head of MARAD, and 

I just want you to know that he is a good man. 

This hearing is adjourned. 

[Whereupon, at 11:55 a.m., the Subcommittee was adjourned.] 

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Æ 


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