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S. HRG. 109–488

NOMINATIONS OF CHARLES R. CHRISTOPHERSON

AND JAMES M. ANDREW

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 10, 2005

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

SAXBY CHAMBLISS, Georgia, Chairman 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

JAMES M. TALENT, Missouri 

CRAIG THOMAS, Wyoming 

RICK SANTORUM, Pennsylvania 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

CHARLES E. GRASSLEY, Iowa 

TOM HARKIN, Iowa 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

MARK DAYTON, Minnesota 

KEN SALAZAR, Colorado

MARTHA SCOTT POINDEXTER, Majority Staff Director 

DAVID L. JOHNSON, Majority Chief Counsel 

STEVEN MEEKS, Majority Legislative Director 

ROBERT E. STURM, Chief Clerk 

MARK HALVERSON, Minority Staff Director 

(II) 

(III)

C O N T E N T S 

Page

HEARING(S):

Nominations of Charles R. Christopherson and James M. Andrew .................... 01

Wednesday, November 10, 2005

STATEMENTS PRESENTED BY SENATORS 

Chambliss, Hon. Saxby, a U.S. Senator from Georgia, Chairman, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 01

Crapo, Hon. Mike, A U.S. Senator from Idaho ...................................................... 02

WITNESSES 

Christopherson, Charles R. Jr., of Texas, to be Chief Financial Officer, U.S. 

Department of Agriculture .................................................................................. 04

Andrew, James McRae, of Georgia, to be Administrator of the Rural Utilities 

Service, U.S. Department of Agriculture ........................................................... 06

APPENDIX 

PREPARED STATEMENTS: 

Christopherson, Charles R ............................................................................... 16

Andrew, James Andrew ................................................................................... 19

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Christopherson, Charles R. (Biographical Information) ................................ 22

Andrew, James Andrew (Biographical Information) ..................................... 46

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD: 

Harkin, Hon. Tom ............................................................................................ 77

Salazar, Hon. Ken ............................................................................................ 79 

(1)

NOMINATIONS OF CHARLES R. 

CHRISTOPHERSON AND JAMES M. ANDREW 

WEDNESDAY, NOVEMBER 10, 2005

UNITED STATES SENATE, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, Washington, DC 

The committee met, pursuant to notice, at 9:02 a.m., in Room 

328A, Russell Senate Office Building, Hon. Saxby Chambliss, chairman of the committee, presiding. 

Present or submitting a statement: Senators Chambliss, Thomas, 

Crapo, Harkin and Salazar. 

STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR 

FROM GEORGIA, CHAIRMAN, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

The CHAIRMAN. This hearing will come to order, and good morning. 

We are here today to hear testimony from two nominees for important posts at the U.S. Department of Agriculture: James Andrew, nominee for the position of Administrator of Rural Utilities 

Service; and Charles Christopherson, nominee for the position of 

Chief Financial Office. 

It is with great pleasure that I welcome Jim Andrew to the committee. Jim has been a businessman, a community leader in Georgia for many years. I am pleased that he is willing to come to 

Washington and engage in public services at the Federal level. 

The Rural Utilities Service provides important services in rural 

America, including electrification, telecommunications, drinking 

water and waste disposal systems, broadband access, telemedicine 

and distance learning. Millions of rural Americans have better lives 

because of these programs, and we are fortunate that people like 

Jim Andrew are willing to give of themselves in service to our 

country to improve the lives of our fellow citizens. 

I appreciate that Jim shares my love for golf, and more importantly, that he shares my commitment to continue to make our 

country a better place for all Americans, especially for those in our 

rural areas. 

And on a personal note I would say that I have known Jim for, 

gee whiz, longer than either one of us want to remember at this 

point in time, but we have been friends through the years. Jim is 

from Jenkins County, Georgia, near a little town called Millen, and 

Jim grew up in the rural electrification industry in our State, and 

the fact that he is from Millen, Georgia, and the fact that he was 

employed by the George Electric Membership Corporation early, is 

2

a sign of how significant a contribution he has made to the rural 

utility industry in Georgia, particularly the Georgia Electric Membership Corporation, because I was involved in that industry for 25 

years representing a co-op in my hometown, and because Jim is 

from Millen, he was selected by the godfather of the Electric Membership movement in Georgia, Mr. Walter Harrison. 

That says an awful lot about you, Jim, because knowing Mr. 

Walter like I did for so many years, knowing his love for rural 

America and for the electric utility system, the fact that he chose 

you to go to work at GEMC says an awful lot about your commitment to rural America, and your commitment to the electric utility 

industry, so needless to say, I am very pleased that you have decided to, at this stage in your life, to move to a different level and 

come to Washington to serve your country in a different capacity. 

And as a Georgian and as a personal friend, I am very, very proud 

to have you here this morning. 

I also welcome Chuck Christopherson, and am pleased that he is 

willing to take on the task of being Chief Financial Officer of 

USDA. If the Department of Agriculture were a private enterprise, 

it would be the sixth largest company in the United States. USDA 

has over 100,000 employees, 14,000 offices and field locations, $128 

billion in assets, and provides approximately $100 billion in loan 

guarantees and insurance. Obviously, it is a major job to oversee 

the finances of such a large organization, and I am grateful that 

Chuck Christopherson is willing to take on this important responsibility to ensure that USDA performs its duties commensurate with 

the standards that American taxpayers deserve and expect. 

My colleague Senator Harkin is here. Tom, I will be happy to recognize you for any opening comments you wish to make. 

The CHAIRMAN. All right. 

The CHAIRMAN. I would like to turn to Senator Mike Crapo for 

any opening comments you wish to make, Senator. 

STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM 

IDAHO 

Senator CRAPO. Thank you very much, Mr. Chairman. I appreciate your holding this hearing, and I especially appreciate the opportunity to make a personal introduction of Mr. Charles 

Christopherson. Those that submit themselves to the confirmation 

process deserve our respect, and we owe it to them and the public 

to consider their nominations in a timely fashion, and I appreciate 

the fact that we are doing that today. 

Today we consider two important positions at the Department of 

Agriculture. The Chief Financial Officer plays an important role in 

instituting the processes that promote the sound stewardship of 

taxpayer dollars. The Rural Utilities Service Administrator manages many of the programs that are so vital to our rural communities. Both positions require strong managers, and in both cases 

the President and Secretary Johanns have made good choices. 

Clearly Mr. Andrew is well qualified. His background shows a 

devotion to rural America and the experience to succeed at RUS. 

He will be administering programs of great importance to the communities in my State, and I look forward to supporting his confirmation and working with him when he is confirmed. I should 

3

warn you, however, Mr. Andrew, that I have a keen interest in 

many of the RUS programs and will probably be in touch frequently. 

I want to take a moment now to introduce Charles 

Christopherson, who has been nominated to serve as the Department of Agriculture’s Chief Financial Officer. As CFO he will have 

responsibility over USDA’s financial management functions. Although he now lives in Texas, Mr. Christopherson has deep roots 

in Idaho. Mr. Christopherson’s family is from Twin Falls, Idaho. 

Twin Falls sits on the Snake River in the center of Southern Idaho 

in an area known as Magic Valley. 

By the way, my mother was born in Kimberly, which is just a 

little town a couple of miles outside of Twin Falls, and I spent a 

lot of my years there visiting my grandparents. So even though I 

live in Idaho Falls, Twin Falls is a very special place to me and 

the Magic Valley is a special part of my childhood. 

The Magic Valley has long been home to strong agricultural industry. Mr. Christopherson’s connections to this important part of 

Idaho will serve as a good reminder of the impact that USDA’s 

policies have in our own communities. 

I am also confident that his education and business experience 

will be a great asset to the Department. I do want to point out that 

Mr. Christopherson is a graduate of Brigham Young University’s 

Marriott School of Management. While I have a little bias in his 

college selection, because I too am a graduate of BYU, the accounting program is nationally recognized. 

Mr. Christopherson’s business experience demonstrates his ability to thrive at every level and to apply his experiences effectively 

to each succeeding endeavor. He has had success in financial management, integrating controls in operations and finance, and working to turn around companies that are in difficult financial situations. But one thing that has impressed me is the fact that as a 

consultant he went into well-established, well-performing companies and made a difference. 

Mr. Christopherson has demonstrated the tools to be an effective 

CFO for the Department of Agriculture, and I support the President’s nomination of him, and look forward to working with him, 

and recommending him to my colleagues. 

Thank you. 

The CHAIRMAN. Thank you, Senator Crapo. 

Senator Thomas, do you have any opening comments you wish 

to make? 

Senator THOMAS. Not really, Mr. Chairman. I just want to thank 

you for having this. I think it is important that we move these offices to fill them, and certainly I am impressed with the nominees 

we have. I guess I have to admit some particular interest in the 

rural electric aspect of it, having spent a good deal of my career 

in that area, but I think they are very important, both of them, for 

the future of agriculture, and as rural electric responsibilities and 

service areas change, we are going to see a lot of changes there. 

So I certainly am supporting them. 

Thank you for having this hearing. 

The CHAIRMAN. Senator Salazar, any comment you wish to 

make? 

4

Senator SALAZAR. I would only say, Mr. Chairman, thank you for 

holding this hearing. Thank you as well for holding the hearing 

yesterday on fuel costs and agriculture, and Senator Harkin, thank 

you as well. 

And to Mr. Christopherson and Mr. Andrew, I look forward to 

working with you on issues relating to agriculture, and matters relating to utilities and making sure that the parts of America that 

are sometimes forgotten are not forgotten in your minds or in the 

minds of this committee or this country. I look forward to supporting your nominations. 

The CHAIRMAN. Gentlemen, before I ask you to present any opening statements, would you both raise your right hand? Do you solemnly swear the testimony you’re about to give before this hearing 

today will be the truth, the whole truth and nothing but the truth, 

so help you God? 

Mr. ANDREW. I do. 

Mr. CHRISTOPHERSON. I do. 

The CHAIRMAN. To each of you, do you agree that if confirmed 

you will appear before any duly constituted committee of Congress 

if asked? 

Mr. ANDREW. Yes. 

Mr. CHRISTOPHERSON. Yes. 

The CHAIRMAN. Mr. Christopherson, we will turn to you first for 

any opening statement you wish to make 

STATEMENT OF CHARLES R. CHRISTOPHERSON, JR., OF 

TEXAS, TO BE CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF AGRICULTURE 

Mr. CHRISTOPHERSON. Thank you, sir. 

Mr. Chairman, Senator Harkin, and distinguished members of 

the committee, I am grateful and honored to be here today as the 

President’s nominee for the Chief Financial Officer of the U.S. Department of Agriculture. 

With me today are my wife, Colleen, and my eldest daughter, 

Chelsey. We have three other children at home in Texas. We have 

Alexa, age 8, Chase, age 4, and Caleigh, age 2. I apologize that 

they cannot join us today. However, if Caleigh and Chase were 

here, I believe that they would be much more entertaining than my 

opening statement. 

I am humbled to be considered for a position with the Department of Agriculture. The myriad programs of the USDA affect the 

lives of all Americans, and they have affected mine. I was born in 

the farming community of Twin Falls, Idaho. The majority of my 

family, including grandparents, father, brother, uncles, aunts and 

cousins, still live in the greater Twin Falls region. When I was 

young, my grandfather managed the largest tractor repair facility 

in the area. At certain times of the year, which was planting and 

harvesting, we would get calls in the evenings or on weekends, and 

we would climb into the pickup truck and head out to the farm to 

repair a tractor. So you can say fairly young in my career I was 

already serving the farmer. 

I have been exposed to the broad scope of the USDA programs. 

Growing up, my parents were in the forest products industry, and 

so therefore, they worked with the U.S. Department of AgriVerDate 0ct 09 2002 13:22 Aug 03, 2006 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\28422.TXT TOSHD PsN: LAVERN
5

culture’s Forest Service. In my career I became familiar with the 

USDA’s Rural Development Agency while I was employed with one 

of the largest rural telecommunications carriers in the United 

States. 

This telecommunications company provided a strong foundation 

for my executive career. At this company the executive management team mentored the managers and the managers mentored 

their teams. The teams worked hard and the culture accepted no 

less than the best performance. In this environment, our small financial team implemented new technology and reorganized processes to exceed current best practice standards for a financial close. 

These adjustments automated key processes that increased integrity of the information. Reporting timelines were reduced from approximately 20 days to 4 business days. We used cutting edge technology to report information to the desktop computers of our executives. The improvements also provided other benefits, including a 

reduction in audit fees, quicker audit opinions and fewer audit 

notes. Almost 15 years ago this was a remarkable accomplishment 

for a public corporation and it was an honor to manage this team. 

Since that time I have had the opportunity to consult and lead 

teams in the structuring of business processes, information reporting, budgeting and management systems. Our clients were several 

of the largest corporations in retail, equipment manufacturing, 

mining, oil and gas, electric, construction, telecommunications and 

government. I have held executive management positions in corporate operations and finance. I have served as an officer and director with the titles of Chief Operating and Chief Financial Officer. Some of these positions were in companies with added complexities due to the blending of cultures of a new industry consolidation or the resource management of a turnaround. 

I fully understand that the USDA is one of the largest entities 

in the United States with a financial structure and support systems that have been perpetually modified since the days of President Lincoln. This is a large and highly complex organization. It 

has its challenges, but has a tremendous workforce with experienced professionals. 

It is my understanding that since 2002 we have received unqualified clean opinions, and for the last year, for 2004, we did so while 

meeting the accelerated November 15th due date. This is a great 

testament to the financial team at the Department of Agriculture. 

Also, I would be remiss if I did not take the opportunity to publicly 

commend the employees of the National Finance Center for their 

performance. Despite the devastation of Hurricane Katrina and the 

deployment of employees to backup sites, employees were able to 

process a payroll for more than 560,000 Federal employees, and 

they did this on time. 

That said, there are challenges ahead and opportunities for improvement. If confirmed by the Senate I will use my experience to 

help the more than 1,700 members of the financial team to find the 

processes that will increase the accuracy and timeliness of information. My philosophy is that with better information faster, we can 

address problems sooner and at a lower cost. I believe that for any 

weakness in the systems and controls we can find short-term solutions to minimize the financial risk and find long-term economical 

6

solutions to fix a problem permanently. In addition, not only should 

we measure the performance of this financial organization against 

other Government entities, but we should also measure it against 

the business practices in the private sector. 

This is a great opportunity to serve the United States. I fully understand that the financial management of this organization is no 

small task, and if confirmed, the responsibility will not be taken 

lightly. 

Thank you for your consideration, and I welcome your questions. 

[The prepared statement of Mr. Christopherson can be found in 

the appendix on page 4.] 

[The biographical information of Mr. Christopherson can be 

found in the appendix on page 22.] 

The CHAIRMAN. Thank you. 

Mr. Andrew? 

STATEMENT OF JAMES McRAE ANDREW, OF GEORGIA, TO BE 

ADMINISTRATOR OF THE RURAL UTILITIES SERVICE, U.S. 

DEPARTMENT OF AGRICULTURE 

Mr. ANDREW. Mr. Chairman, Senator Harkin, and distinguished 

members of the committee, it is an honor to have been nominated 

by President Bush to serve as Administrator of the RUS in the 

rural development mission area of the United States Department 

of Agriculture. I am further humbled by the experience of appearing before this committee. Like you, agriculture has been vitally 

important to my family, my livelihood and my community for many 

years. And, Mr. Chairman, if I might say so, Mr. Harrison and my 

mama would both be proud. 

With me today is my wife, Mary. Next month we will celebrate 

our 41st anniversary. Mary and I have two adult children, a son 

living in Baltimore, a daughter living in Atlanta. Mary and I live 

in rural Jenkins County, Georgia, near the town of Millen. We 

moved there 37 years ago to help preserve Mary’s family farm after 

her father became seriously ill. 

I was born in Alabama and raised in a small southeastern town 

called Geneva. After high school I left home and attended the University of Alabama, where I earned a degree in business administration. I also served in the Alabama Army National Guard for 

over 8 years, six months of which I was on active duty. 

The value of hard work was instilled in me at an early age. As 

early as age 10, I began helping my father in his small farm equipment business, where I worked assembling implements and as a 

mechanic’s helper, back then called a ‘‘grease monkey.’’ Since that 

time I have had very few periods in my life when I did not earn 

a paycheck. 

Over the course of my career I gained experience in the corporate 

world as well as small business owner. My corporate experience includes work in sales and management for a large electrical distribution equipment manufacturer, and financial consultant in a 

brokerage division of a large insurance company. Then after a period as marketing director for the Georgia Electric Membership 

Corporation, I decided to start my own business in the nearby town 

of Waynesboro, Georgia. 

7

Over 28 years ago I established an agricultural irrigation company that specialized in the design, sale, installation and service of 

center pivot irrigation. Over time my business expanded to include 

construction of agricultural and commercial steel buildings. While 

growing my business, I was asked to serve on the dealer councils 

of a steel buildings manufacturer and a center pivot irrigation 

equipment manufacturer. After more than 20 years I sold the business, and the new owners asked me to remain as a consultant. I 

continued to consult for that company and several other companies 

until my nomination by the President. 

In addition to my endeavors as a small business owner, I was 

also involved in the various community development activities in 

my county and beyond. I was a founding member of the board of 

directors of a community bank, and I was also serving as chairman 

of that board when we sold to a larger bank that is dedicated to 

serving rural communities. I remained on the board of the merged 

holding company until my nomination. 

In 1976 I was elected to serve on the board of my local electric 

cooperative, and I remained on that board for 25 years. During that 

time, I served two terms as an officer and two terms as president. 

The board of my local co-op elected me to represent the co-op on 

the board of Georgia Electric Membership Corporation. I served as 

an officer and president of that association until the board elected 

me to represent Georgia on the board of the National Rural Electric Cooperative Association, NRECA. I served 16 years on that 

board. Six of those years I served as an officer, including two as 

president. As president of NRECA, I served on the board of the National Rural Electric Cooperative Finance Corporation, CFC, a supplemental finance cooperative owned by the members. 

If confirmed as Administrator of RUS, it will be the culmination 

of my life experiences and my service to rural America. 

The Rural Utilities Service and its predecessor agencies have 

earned a unique place in American history. By combining Federal 

resources with the ingenuity of the American people, RUS has 

brought reliable electricity, clear telecommunications and safe 

drinking water to rural America. 

Today our Nation is facing new challenges, and there is still 

much more work to be done. Under the leadership of Secretary 

Johanns and Under Secretary Dorr, I believe USDA Rural Development has a unique opportunity to make major contributions to the 

immediate and long-term future of rural America. If confirmed as 

Administrator of RUS, I will use my experience as a small business 

owner and industry leader to ensure that RUS delivers its programs as efficiently as possible so we can have the maximum impact on the lives of rural Americans and communities throughout 

the country. 

Mr. Chairman, and members of the committee, if I am confirmed 

to this position, I will work with each of you to earn your respect 

and your support as we work together to strengthen America. 

Thank you, and I will be happy to answer any questions. 

[The prepared statement of Mr. Andrews can be found in the appendix on page 6.] 

[The biographical information of Mr. Andrew can be found in the 

appendix on page 46.] 

8

The CHAIRMAN. I thank both of you gentlemen. 

Just a quick anecdote that my colleagues will appreciate. In my 

conversation with Jim yesterday he was telling me, as happens in 

all rural towns that each of you come from just like I do, word 

spreads pretty quick when somebody is being considered for something like this. They already think Jim is the Secretary of Agriculture back in Jenkins County. He ran into one of his farmer 

friends the other day in the post office. The first thing he said to 

him was, ‘‘You got to save my FAS office.’’

[Laughter.] 

The CHAIRMAN. All of us have had that experience. 

Mr. Andrew, the USDA Office of Inspector General published a 

report on September 30, 2005 regarding the lending practices of the 

RUS Broadband Grant and Loan Programs. The report outlined 

areas of concern that suggest the emphasis of the program had 

shifted away from the rural communities that would not, without 

Government assistance, have access to broadband technologies. Are 

you aware of this issue, and can you comment on this matter? 

Mr. ANDREW. Yes, Mr. Chairman, I’m aware of it. I read the report. I also read the response to it, and because I have not been 

in a position to have any input to it, at this point I don’t think I’m 

qualified to speculate on a response to it. But I can assure you that 

it is on the front burner of everything I’ll be looking at, and I’ll be 

glad to work with you when I get over—if I get over to the position. 

The CHAIRMAN. What particular skills or work experiences do 

you feel would make you uniquely qualified for this position? 

Mr. ANDREW. Mr. Chairman, as I said, beginning early on in life, 

everything I’ve ever done in my life I think has worked towards 

this particular job, both in the rural electrification efforts and rural 

development and things I’m interested in in rural development and 

rural communities. Living in a rural community all my life I think 

prepares me for this. 

The CHAIRMAN. Mr. Christopherson, I would imagine that your 

experience in the management and operation of several companies, 

some of them distressed companies, has impressed upon you an appreciation for effective financial management. Most of the businesses you have been associated with in the past are of a much 

smaller scale than Department of Agriculture. Can you comment 

on how you will provide effective management and oversight for 

such a large institution, and how your previous experience qualifies 

you for the position of Chief Financial Officer? 

Mr. CHRISTOPHERSON. Well, Mr. Chairman, there’s no doubt that 

this is a very complex organization with over 300 different programs and to account for those different programs is going to be 

a difficult task. In addition, I don’t have a lot of exposure to the 

systems or what’s happened necessarily in the past, but it will be 

a very large task. 

First of all, you know, I recognize out the door very complex organizations. I’ve consulted for very large, very complex organizations in my past, and gratefully, we were able to add a great benefit to many of those companies. The nice thing with this position 

is I’ll actually have the chance to focus only on the finance side. 

In my past I’ve had additional responsibilities with these compaVerDate 0ct 09 2002 13:22 Aug 03, 2006 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\28422.TXT TOSHD PsN: LAVERN
9

nies in both operations and finance as we’re moving through a 

turnaround or through an industry consolidation. 

The CHAIRMAN. As part of the Improper Payments Information 

Act of 2002 all Federal agencies are required to annually identify 

programs susceptible to improper payments, and to implement statistical projections or mitigation plans. The Office of Inspector General recently found that the Office of Chief Financial Officer did not 

provide USDA agencies with prescriptive and detailed guidance to 

assess programs and activities acceptable to significant improper 

payments, thus, likely limiting OCFO’s ability to monitor and limit 

improper payments. 

Could you please comment on the importance of limiting improper payments and expenditures and how you would address providing agencies with the USDA the necessary guidance to assess 

programs susceptible to improper payments? 

Mr. CHRISTOPHERSON. Well, any time there’s improper payments, 

for a financial person—and I’m sure for taxpayers—a light goes off 

on our head and we’re all worried about leaks in the system or 

what that could affect. In the battery of the information I’ve actually received over the last couple of days, there was a report that 

came out that was, you know, a FSA report that actually talked 

about this subject, and it appeared that the issue was addressing 

clarity in instruction and to be concise. I would expect that with 

multiple programs that you’re going to have some issues in that 

area. 

Upon confirmation, I am happy to look into this area, am happy 

to make sure that the instructions that we give, as stewards of the 

taxpayers’ monies, are very concise and that we put out report 

cards and check forms and have the right information delivered to 

our programs so that they can function properly. 

The CHAIRMAN. As I mentioned to you yesterday in our conversation, you have a wealth of experience in the area of financial management, but I think what you are going to find at USDA, we operate a lot differently from the way the private sector operates, and 

there is going to be a real challenge in a number of areas. This is 

one area, improper payments and overpayments, that I think is 

going to merit a lot of your attention, because while we want to do 

what the farm bill requires us to do relative to the payments to our 

farmers, it is always an area that can be abused, so I will hope that 

you will give this primary importance. 

Senator Harkin? 

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

I want to congratulate both of you on your nominations and welcome you here today. You are here on a very special day here in 

Washington, D.C. Today is a special day. It is a day noted on calendars all across the country. Today is a day celebrated in song 

and verse all over America. Today is a day when the people of 

Georgia and the people of the United States pause to give thanks 

for a very dedicated public servant, for today is the birthday of our 

chairman, Saxby Chambliss. 

[Applause.] 

The CHAIRMAN. I think there is some collusion among our staffs. 

Senator HARKIN. I think so. 

[Laughter.] 

10

Senator HARKIN. I have been told this is the 10th anniversary of 

your 39th birthday. Well, happy birthday, Mr. Chairman, and 

many, many, many more. 

Well, again, welcome. I am sure that you will both get through 

fine. I do not know Mr. Christopherson; I have met before maybe 

in passing, I do not know particularly. I know that Mr. Andrew and 

I have met in the past when you were on the NRECA Board for 

all those years and on the Agricultural Committee, so I congratulate you both. 

I just have one thing that I just wanted to cover, Mr. Andrew, 

with you, and that has to do with broadband. In the 2002 Farm 

Bill, there is a Section 6103 that we put in, both the Senate and 

the House, we worked together on it. It is in the final version of 

the farm bill. It is law now. It set up a loan program for broadband 

technology in rural areas. We put in $2 billion in sort of a revolving 

loan fund, $2 billion. Our goal was to get broadband into rural 

America as fast and as rapidly as possible. Well, not much happened. Things sort of dragged along, not much happened. 

In April of 2004 President Bush spoke to a rural development 

conference in Des Moines, Iowa. Senator Grassley and I were both 

there, Congressman Latham, a few others. And in his speech the 

President said that his goal was to have broadband to all of rural 

America by 2007. Well, I applauded very loudly for that, as others 

did. After the speeches and the President shook hands with people, 

then he came behind the curtain. And his people came out and 

asked if I wanted to say goodbye to the President. I said, ‘‘Sure.’’

So we went behind the stage, and it was Senator Grassley and 

I were both back there. The President came by and just chit-chatted a little bit. I said to the President, I said, ‘‘Well, Mr. President, 

I really appreciate what you said about getting broadband out by 

2007.’’ I said, ‘‘But, you know, you might run into a little problem.’’ 

And I sort of smiled at him. He said, ‘‘Well, what’s that?’’ I said, 

‘‘Well, there’s a provision in the farm bill; we put in $2 billion to 

do that, and quite frankly, the Department of Agriculture has been 

dragging its feet.’’ At that time—this was April of 2004—we had 

about $1.6 billion, 1.7, that had been unexpended. They only expended just a few hundred million at that point. And so I told him 

that. And I said, ‘‘I have been hearing from people around Iowa, 

who want to get these loans, that want to expand broadband, and 

the red tape is just endless.’’ Senator Grassley chimed in and said, 

yes, he has been hearing the same thing. 

The President, of course, is very interested. He called over his 

staff and said, ‘‘Get this down and let us look into that.’’ And so 

we gave it to some staff person that came over and we told him 

what it was about. That was in 2004, April. 

Now we are in November of 2005. There is now still about 1.4, 

1.5 billion dollars still left in that fund. I have been tracking this 

because I just cannot understand why we cannot move a little bit 

better. 

And so I began asking questions about how we implement and 

how RUS—this is under your jurisdiction, under RUS—how we implement it. This is not in the law. These are the rules that RUS 

came up with. One, that the equity and cash requirements are too 

high and unreasonable. RUS requires that companies have at least 

11

one year’s cash balance in the bank to cover the entire operations 

of the company. Even if the company has non-broadband stuff, they 

have to cover that too, so not even the broadband, all operations 

of the company. So it has resulted in kind of a situation where a 

company seeking a $5 million loan, a small company seeking a $5 

million loan has to have $5 million in the bank. If they have $5 

million in the bank, why do they need a loan? 

Further, in determining the cash requirement, RUS does not 

take into account actual revenues of a company. For example, you 

could have a small company that already has 10,000 customers. 

They want to extend broadband out, but they cannot put down the 

revenue base from the 10,000 customers as a monthly revenue 

stream. I know it sounds bizarre, but this is what is happening. 

Requirements in the application process in terms of how the public notice goes out. The public notice goes out, and then what happens is it takes 12 months. In fact, I have it here. The review applications have been between 6 to 9, even 12 month, before even hearing back from the Agency on their application. In the meantime 

what happens is a competitor out there sees that, knows that they 

are going to apply for this loan, and they sneak in there in front 

of them. 

I can go on and on. There is a whole bunch of things happening 

on this. A September USDA Inspector General report had a number of complaints about the administration of this program. Nothing seems to happen. I have been on this thing for a year and a 

half or two now on this, and nothing ever seems to happen. I hope 

I do not sound too cynical, Mr. Andrew, but it almost sounds to me 

like the big cable companies and the big telephone companies that 

are not servicing rural America, but like to go downtown, they like 

to go into our towns of 15,000 and 10,000, they like to service a 

downtown area. They like that. They get that. But like the old 

rural electrics, they do not want to go out to that farmstead out 

there. They do not want to come to my hometown of 150 people. 

They do not want to do that. But they will go downtown and pick 

those off like that. 

Again, I do not want to sound too cynical, but it almost sounds 

like the cable companies and the big phone companies have gotten 

to somebody, and said, ‘‘We do not want this program to work.’’

So, Mr. Andrew, I am hopeful. I know you are down the pecking 

order on this thing, but you are still the head of RUS. You have 

a long history in knowing what rural electric did for America. 

We were not risk adverse when we put telephone lines out to our 

farmsteads and our small towns in America. We knew there was 

risk in doing that, but we managed it. RUS manages rusk. It is not 

risk adverse. And that is what I am asking in broadband, manage 

the risk. Do not be so risk adverse that you say, ‘‘We cannot give 

a loan out there because we want to make absolutely 100 percent 

certain that the company we give it to will not default and will not 

fail.’’ Some of them will. Some of them will. Some of them will go 

under and probably sell off to somebody else. 

I just wanted to get that off my chest because I have been so 

frustrated. Now you are going to take over that position there, and 

to the extent that you are in that position, and when you come 

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tions Committee on Ag Approps, on which is also sit, I am going 

to be asking the same questions. I will not be asking it just of you. 

I brought this up with everyone. Mr. Dorr sat here. I will not go 

into all that history, but he sat there and he talked about 

broadband and getting broadband out. Secretary Johanns, I have 

known Secretary Johanns for a long time. He says the same thing. 

When the President of the United States is interested in it, I say, 

well, something is going on, and I do not know what it is. 

So I hope that you can take that message back, and I hope you 

can take the wonderful experience you have had, and the leadership you have had in NRECA and rural electrics, and say, ‘‘This 

is what we need to do with broadband.’’ Broadband to rural America today is what rural electric was to rural America 50, 60, 70 

years ago, and we have to get it out to our small towns and communities and our farmers. 

Mr. Chairman, thank you for your indulgence. I do not really 

have a question, I guess. Just I hope you will—oh, yes. 

Will you personally work to modify the regulations and application process—

Mr. ANDREW. Almost dodged it. 

Senator HARKIN. —to get this thing going? 

Mr. ANDREW. Almost dodged it. Senator Harkin, let me say this. 

There is a lady sitting behind me that shares your concern. There 

is a gentleman sitting behind me also that once introduced me saying that I lived so far in the country you had to go towards town 

to go hunting. And that’s the size of it. 

When she tries to get on the Internet, and she can go and start 

the dishwasher to running before it ever gets up and running 

again, then I hear about it. 

Senator HARKIN. Yes. 

Mr. ANDREW. So it is not only you who will be asking these questions, but so will she. 

[Laughter.] 

Senator HARKIN. Good. 

Mr. ANDREW. And it’s on the front burner, and I guarantee you 

that I will look after it, and I would like to come discuss it with 

you. I would like to discuss ideas that we might come before it. 

Now right now I’m not qualified to have any. 

Senator HARKIN. I understand that. 

Mr. ANDREW. But I’d like to come forward with some, and I know 

it’s an issue with you, and I’d like very much to discuss it with you. 

Senator HARKIN. You listen to her every day. 

[Laughter.] 

Mr. ANDREW. Don’t you? 

[Laughter.] 

Senator HARKIN. Thank you. 

Mr. ANDREW. Thank you, sir. 

The CHAIRMAN. Senator Crapo? 

Senator CRAPO. Thank you very much, Mr. Chairman. I do not 

really have a question either. I have a comment on another part 

of the farm bill in 2002 that we have not been able to get implemented well that is very important and dear to me, and I just want 

to make it something that both of you are aware of because I think 

that both of you may have the ability to help us make it a reality. 

13

It is program that we authorized in the 2002 Farm Bill called 

Project SEARCH. What it is, is a project that focuses on helping 

small communities, communities of less than 2,500 people, to meet 

the environmental mandates that they have to meet under other 

laws such as the Clean Water Act, the Safe Drinking Water Act 

and so forth. What we find is that many of our rural communities 

face these mandates under Federal law, but the cost of the systems 

that they are required by Federal law to implement are not achievable because they do not have the economies of scale that larger 

population centers have that can finance them. 

So these small communities then get fined because they cannot 

come up with the money to meet the mandates of Federal law, and 

it is a never-ending downward spiral for these small communities. 

So a number of years ago, about 5 or 6 years ago, I got a project 

for Idaho started, and we called it Project SEARCH. The acronym 

is Special Environmental Assistance for Regulations of Communities and Habitat Grants Programs. I do not know how we came 

up with that, except that I guess we liked the acronym and we 

found some words to meet it. 

What it means is we were trying to find some simplified ways 

to get grant monies to small communities so that they could get 

past all the red tape and get down to getting the resources to be 

able to meet some of these Federal mandates, and particularly in 

the infrastructure that they need for clean water and safe drinking 

water. It is similar to broadband. The infrastructure that is so critical in our rural communities is what will help them participate in 

the economy of our Nation and of our world, and we have to be able 

to assist them. 

Anyway, we got this in the farm bill, and then we did not fund 

it. It is authorized but not funded. So it is really not USDA’s fault 

right now that they are not implementing it because Congress has 

not give the USDA the dollars to do it with. However, getting those 

dollars is not just our task. I was also talking to my chairman and 

our ranking member here to help on this program because at some 

point, and especially as we work on the next farm bill and as we 

work with our appropriators, I am going to be asking for your help 

to try to get the funding for this program so that the USDA can 

implement it. It also helps if the USDA is interested in this program and helping request in its budget requests for this to be funded so that they can implement it. 

I just wanted to raise this to your attention and let you know—

I will conclude by non-question comment here with this—we did 

get this for the State of Idaho. We got a millon dollars about 4 or 

5 years ago as a pilot project to see how it would work, and it was 

a phenomenal success. There are communities, 2,500 and less communities all over Idaho who were literally saved. We put together 

a team that evaluated the requests for participation in this grant 

program. They had way more applications for this million dollars 

in Idaho than there were dollars to go out. But the small number 

of communities that we were able to give a little money to, were 

literally saved, sometimes from litigation and from fines, and 

frankly, they were able to implement in their communities the 

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prove the quality of life and to meet the Federal mandates and to 

get themselves back on course. 

I just wanted to raise your attention to Project SEARCH, and I 

want you to know that I hope to see it coming forward in next 

year’s budget requests from the Department, and I will commit to 

help from my end to try and see if we cannot get the money in the 

budget for it. 

Thank you. 

The CHAIRMAN. Thank you. 

Well, gentleman, as I said earlier, you have got a real challenge 

ahead of each one of you in these respective positions, and I am 

very confident that based on the qualifications of each of you, that 

you are going to be able to meet those challenges, and we as a committee are here to help you. I hope you will never hesitate to call 

on us to work with you on any particular issues that you have 

within your respective offices, and we look forward to dialogues 

with you. 

At this time I would ask unanimous consent that we report these 

two gentlemen out of the committee, these nominations in a favorable way, with the understanding that any member of the committee who wishes to submit questions can do so by the end of 

today, and that you will respond to them immediately. Is there objection? 

[No response.] 

The CHAIRMAN. If not, they will be reported out. 

This hearing is concluded. Thank you very much. 

[Whereupon, at 9:44 a.m., the committee was adjourned.] 

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A P P E N D I X

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