S. Hrg. 107–71

NOMINATIONS OF ANGELA B. STYLES, STEPHEN

A. PERRY, AND JOHN D. GRAHAM

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON THE

NOMINATIONS OF ANGELA B. STYLES TO BE ADMINISTRATOR OF THE

OFFICE OF FEDERAL PROCUREMENT POLICY AT THE OFFICE OF

MANAGEMENT AND BUDGET, STEPHEN A. PERRY TO BE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION, AND JOHN D.

GRAHAM TO BE ADMINISTRATOR OF THE OFFICE OF INFORMATION

AND REGULATORY AFFAIRS AT THE OFFICE OF MANAGEMENT AND

BUDGET

MAY 17, 2001

Printed for the use of the Committee on Governmental Affairs

(

NOMINATIONS OF ANGELA B. STYLES, STEPHEN A. PERRY, AND JOHN D. GRAHAM

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

73–393 PDF 2002

S. Hrg. 107–71

NOMINATIONS OF ANGELA B. STYLES, STEPHEN

A. PERRY, AND JOHN D. GRAHAM

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON THE

NOMINATIONS OF ANGELA B. STYLES TO BE ADMINISTRATOR OF THE

OFFICE OF FEDERAL PROCUREMENT POLICY AT THE OFFICE OF

MANAGEMENT AND BUDGET, STEPHEN A. PERRY TO BE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION, AND JOHN D.

GRAHAM TO BE ADMINISTRATOR OF THE OFFICE OF INFORMATION

AND REGULATORY AFFAIRS AT THE OFFICE OF MANAGEMENT AND

BUDGET

MAY 17, 2001

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

JOSEPH I. LIEBERMAN, Connecticut, Ranking Democrat

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

HANNAH S. SISTARE, Staff Director and Counsel

ELLEN B. BROWN, Senior Counsel

PAUL R. NOE, Senior Counsel

JOHANNA L. HARDY, Counsel

SUSAN G. MARSHALL, Professional Staff Member

JOYCE A. RECHTSCHAFFEN, Democratic Staff Director and Counsel

LAWRENCE B. NOVEY, Democratic Counsel

JASON M. YANUSSI, Democratic Professional Staff Member

MICHAEL L. ALEXANDER, Democratic Professional Staff Member

DARLA D. CASSELL, Chief Clerk

(III)

C O N T E N T S

Page

Opening statements:

Senator Thompson ............................................................................................ 1

Senator Voinovich ............................................................................................. 3

Senator Collins ................................................................................................. 21

Senator Durbin ................................................................................................. 24

Senator Bennett ................................................................................................ 28

Senator Lieberman ........................................................................................... 29

Senator Carper ................................................................................................. 30

Senator Akaka .................................................................................................. 31

Senator Levin .................................................................................................... 46

WITNESSES

THURSDAY, MAY 17, 2001

Hon. Joe Barton, a Representative in Congress from the State of Texas ........... 1

Hon. Ralph Regula, a Representative in Congress from the State of Ohio ........ 2

Angela B. Styles to be Administrator of the Office of Federal Procurement

Policy at the Office of Management and Budget ............................................... 6

Stephen A. Perry to be Administrator of the General Services Administration 11

John D. Graham to be Administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget .................................. 20

ALPHABETICAL LIST OF WITNESSES

Barton, Hon. Joe:

Testimony .......................................................................................................... 1

Graham, John D.:

Testimony .......................................................................................................... 20

Prepared statement .......................................................................................... 150

Biographical and financial information .......................................................... 153

Pre-hearing questions and responses .............................................................. 175

Additional pre-hearing questions and responses submitted by:

Senator Lieberman ....................................................................................... 191

Senator Durbin with copies of correspondence from Philip Morris Management Corp. and Kraft General Foods, Inc. supplied by Mr. Graham . 248

Post-hearing questions and responses submitted by:

Senator Akaka ............................................................................................... 303

Senator Durbin .............................................................................................. 308

Senator Levin with attachments ................................................................. 310

Perry, Stephen A.:

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

Prepared statement .......................................................................................... 93

Biographical and financial information .......................................................... 104

Pre-hearing questions and responses .............................................................. 122

Regula, Hon. Ralph:

Testimony .......................................................................................................... 2

Styles, Angela B.:

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 67

Biographical and financial information .......................................................... 69

Pre-hearing questions and responses .............................................................. 77

Post-hearing questions and responses submitted by:

Senator Lieberman ....................................................................................... 91

Page

IV

APPENDIX

Letter from Dr. Graham to Philip Morris Management Corp., dated October

25, 1993 ................................................................................................................. 266

Article dated May 7, 2001 from Plastic News entitled ‘‘Bush’s OIRA appointee

Graham could lend clout to plastics’’ (submitted for the record by Senator

Durbin) .................................................................................................................. 349

Examples of Graham and Harvard Center Findings Contrary to Interests

of Industries that Donated Restricted Funds for a Specific Project ................ 351

Chart of Graham quotes (submitted for the record by Senator Durbin) ............. 352

Letter from Dr. Graham to Senator Lieberman dated May 21, 2001 ................. 353

Letter from Mayada Logue, Scientist, Corporate Scientific Affairs, Philip Morris Management Corp., to Dr. Graham, dated January 22, 1991 with an

attachment (submitted for the record by Senator Durbin) ............................... 354

Letter from Dr. Graham to Philip Morris Management Corp., dated January

31, 1992 (submitted for the record by Senator Durbin) .................................... 356

Public Citizen May 22, 2001 letter (response to the Finkelstein letter dated

April 13, 2001) ...................................................................................................... 357

Public Citizen May 22, 2001 letter (response to an April 25, 2001 ‘‘Scholarly

Response to Public Citizen’’) ............................................................................... 360

Public Citizen May 22, 2001 letter (response to remarks made by Senator

Bennett) ................................................................................................................ 364

Joan Claybrook, President, Public Citizen, prepared statement with an attachment ............................................................................................................... 366

Lisa Heinzerling, Professor of Law, Georgetown University Law Center, prepared statement ................................................................................................... 403

‘‘Safeguards at Risk: John Graham and Corporate America’s Back Door

to the Bush White House,’’ Public Citizen, March 2001 ............................ 422

‘‘Civilizing the Sport Utility Vehicle,’’ by John D. Graham, Issues in

Science and Technology, Winter 2000–01 ................................................... 543

Letters of Support and Opposition of the Graham Nomination:

Ande Abbott, Director of Legislation, International Brotherhood of Boilermakers ........................................................................................................... 549

John Adams, President, Natural Resources Defense Council ....................... 550

Gary D. Bass, Chairman, Citizens for Sensible Safeguards ......................... 551

Gary D. Bass, Executive Director, OMB Watch ............................................. 553

Randy Block, Co-Convener, Gray Panthers of Metro Detroit ....................... 555

Merrick Carey, CEO, Lexington Institute ...................................................... 556

Philip F. Clapp, President, National Environmental Trust .......................... 557

Benjamin Cohen, Senior Staff Attorney, Center for Science in the Public

Interest, with attached letter sent to President Bush ............................... 558

Frank B. Cross, Professor of Business Law, University of Texas School

of Law ............................................................................................................ 561

David M. Cutler, Professor, Department of Economics, Harvard University .................................................................................................................. 564

Douglas H. Dority, International President, United Food and Commercial

Workers International Union (UFCW) ........................................................ 565

Hon. E. Donald Elliott, Professor (adj) of Environmental Law, Yale Law

School, formerly General Counsel, U.S. EPA, with an attachment .......... 567

Harvey V. Fineberg, Office of the Provost, Harvard University ................... 581

Michael Finkelstein, Independent Consultant on Automobile Safety .......... 583

Former Federal Regulators .............................................................................. 585

Harvard Center for Risk Analysis (response to Public Citizen report) ........ 588

Pamela Williams, S.M., Sc.D., Environmental Health and Health Policy

and Management Program in Environmental Science and Risk Management with an attachment ............................................................................. 592

Harvard School of Public Health Supporters, ‘‘Who is Professor John

D. Graham? A Scholarly Response to Public Citizen’’ ............................... 596

Harvard University Faculty ............................................................................ 611

David Hemenway, Ph.D., Professor of Health Policy, Director, Harvard

Injury Control Research Center ................................................................... 614

David Holtgrave, Ph.D., Professor, Department of Behavioral Sciences

and Health Education and Department of Health Policy and Management, Emory University ............................................................................... 615

J. Bennett Johnston, Partner, Johnston and Associates ............................... 616

Faculty members at Schools of Medicine and Public Health across the

United States ................................................................................................ 617

Page

V

Letters of Support and Opposition of the Graham Nomination—Continued

National Organizations requesting inquiry .................................................... 622

Charles M. Loveless, Director of Legislation, American Federation of

State, County and Municipal Employees, AFL–CIO ................................. 639

Melissa A. McDiarmid, M.D., M.P.H. ............................................................. 640

J. Donald Millar, M.D., Don Millar and Associates, Inc., Consultant in

Occupational and Environmental Health ................................................... 641

National Environmental Organizations .......................................................... 642

National Organizations .................................................................................... 644

Maria I. New, M.D., Professor/Chairman, Department of Pediatrics, Weill

Medical College, Cornell University ............................................................ 645

Joseph P. Newhouse, Ph.D., Director, Division of Health Policy Research

and Education, Harvard University ............................................................ 646

Margaret S. O’Donnell, Stop Dioxin Exposure Campaign ............................ 647

Office of Information and Regulatory Affairs (OIRA), former Administrators ................................................................................................................. 648

Brian O’Neill, President, Insurance Institute for Highway Safety .............. 651

Public Citizen article ‘‘Bush Nominee for Key Position Would Thwart

Protective National Health, Safety and Environmental Safeguards’’ ...... 652

Willie L. Pelote, Sr., Political and Legislative Director, California American Federation of State, County and Municipal Employees, AFL–CIO .. 655

William ‘‘Bill’’ K. Reilly, former EPA Administrator ..................................... 656

Mark L. Rosenberg, M.D., M.P.P., Executive Director, The Task Force

for Child Survival and Development ........................................................... 657

Alan Reuther, Legislative Director, International Union, United Automobile, Aerospace and Agricultural Implement Workers of AmericaUAW ............................................................................................................... 659

William Samuel, Director, Department of Legislation, American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) ....... 661

Scholars of law, medicine, economics, business, public health, political

science, psychology, ethics and the environmental sciences ..................... 663

Bob Stallman, President, Farm Bureau ......................................................... 670

Louis W. Sullivan, M.D., Chairman, Board of Trustees, Public Health

Policy Advisory Board ................................................................................... 671

Cass R. Sunstein, Professor of Jurisprudence, University of Chicago, The

Law School ..................................................................................................... 672

Katherine Swartz, Associate Professor, Harvard School of Public Health .. 674

Tammy Tengs, Sc.D., Assistant Professor, Department of Urban and Regional Planning and Director, Health Priorities Research Group, School

of Social Ecology, University of California, Irvine with an attachment ... 675

Harry Teter, Executive Director, American Trauma Society ........................ 683

James H. Ware, with an attachment .............................................................. 685

Elizabeth M. Whelan, Sc.D., M.P.H., President, American Council on

Science and Health ....................................................................................... 688

(1)

NOMINATIONS OF ANGELA B. STYLES,

STEPHEN A. PERRY, AND JOHN D. GRAHAM

THURSDAY, MAY 17, 2001

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC.

The Committee met, pursuant to notice, at 10:02 a.m., in room

SD–342, Dirksen Senate Office Building, Hon. Fred Thompson,

Chairman of the Committee, presiding.

Present: Senators Thompson, Collins, Voinovich, Bennett, Lieberman, Levin, Durbin, Carper, and Akaka.

OPENING STATEMENT OF CHAIRMAN THOMPSON

Chairman THOMPSON. The Committee will come to order, please.

I think we will go ahead and get started.

This morning we are holding a hearing to consider the nominations of Angela Styles to be Administrator of the Office of Federal

Procurement Policy; Stephen Perry to be Administrator of the General Services Administration; and Dr. John Graham to be the Administrator of the Office of Information and Regulatory Affairs at

the Office of Management and Budget.

I understand that we have some Members of Congress and Senators here today to introduce these nominees. I will begin with

Congressman Joe Barton. Glad to have you with us, Congressman.

TESTIMONY OF HON. JOE BARTON, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

Mr. BARTON. Mr. Chairman, I appreciate the opportunity to be

here before you, and Senator Voinovich, and the other Members of

your Committee. It is my pleasure to introduce to this Committee

Angela Barbee Styles. She is a young woman who I have known

for over 10 years. Her father was one of my three chairmen in my

first campaign for political office for U.S. Congress back in 1984.

Angela helped some in that campaign in a volunteer capacity. She

was attending college at the time. She later decided to take a break

from her college duties and worked for me for over a year in my

legislative shop here in Washington. She handled some fairly major

issues. She was very bright, very personable, and very dedicated.

She then decided to go back to college, went back to the University of Virginia. She graduated with distinction, went on to graduate school later on at the University of Texas at Austin, where

she graduated with honors.

She has been in Washington for a number of years now, most recently with a private law firm where her expertise was in conVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 73393.TXT SAFFAIRS PsN: SAFFAIRS
2

tracting with the Federal Government. She is now married, has

one child, I think a second child on the way. In fact, I think she

is 9 months’ pregnant, so this had better be a short hearing, Mr.

Chairman. [Laughter.]

Mr. BARTON. I am trained as an emergency—— Chairman THOMPSON. You notice we have her first.

Mr. BARTON. I noticed that. I would hate to have to show my

skills as a volunteer ambulance driver and try to help deliver a

new U.S. citizen in this hearing. But she is very well qualified. She

would have the highest recommendation from any individual that

she had worked with, and I would hope that this Committee would

give her a positive recommendation and an expeditious review to

the full Senate.

Chairman THOMPSON. Thank you very much.

Senator Voinovich, I believe you have an introduction.

Senator VOINOVICH. Thank you, Mr. Chairman. At this time, I

know it is not according to our protocol, but I would like to yield

to the dean of the Ohio delegation, Congressman Ralph Regula, to

begin the introduction of Steve Perry.

Chairman THOMPSON. Congressman Regula.

TESTIMONY OF HON. RALPH REGULA, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF OHIO

Mr. REGULA. Well, thank you, and thank you for your time and

courtesy. I am here to speak on behalf of Stephen Perry, a senior

vice president for human resources for the Timken Company. It is

approximately a $3 billion company, operating in approximately 22

countries. So it gives you a measure of the responsibilities he carries as the vice president of this company.

In 1991, he was appointed by our then-Governor Voinovich to be

a member of his cabinet and Director of the Department of Administrative Services for the State of Ohio. So I know, Senator, you

know very well of his excellent service to the State of Ohio.

He has a master of science degree from Akron University and an

MBA from Stanford University Graduate School, attended the University of Michigan, executive development. I could give you a

whole list of all the things in which he has been involved. Just let

me say that he is a great citizen of our community, highly respected, involved in a great number of community activities—the

Stark Foundation and as a trustee of the Professional Football Hall

of Fame.

I am pleased, in fact, proud to introduce Steve Perry and recommend him for the job of the head of General Services Administration because I know the kind of service he has given to our community. His professional service on behalf of the Timken Company

has been outstanding, and, of course, as Senator Voinovich knows,

he did a great job on behalf of the State of Ohio. And his experience in Ohio fits very well with the responsibility of heading up

GSA.

Chairman THOMPSON. Mr. Congressman, thank you very much.

I know you gentlemen have a very busy schedule, and you are welcome to stay as long as you can. But I know that you probably need

to leave, so thank you very much for being with us.

Mr. BARTON. Thank you, Senator.

3

Mr. REGULA. Thank you.

Chairman THOMPSON. Senator Voinovich.

OPENING STATEMENT OF SENATOR VOINOVICH

Senator VOINOVICH. Mr. Chairman, it is a pleasure to join with

Congressman Regula in introducing to the Committee, President

Bush’s nominee for the position of the Administrator of the General

Services Administration, my good friend Stephen Perry, of Canton,

Ohio.

Steve, I would like to extend a warm welcome to you and your

lovely wife, Sondra, and thank you for your willingness to serve

your country in a demanding position. I am delighted that you

have once again accepted the call to public service. I would also

like to thank you, Sondra, for the sacrifices you and your family

made when Steve served in Ohio State Government and will likely

make during his tenure at GSA.

Mr. Chairman, as you know, the position of GSA Administrator

is probably best described as being the Federal Government’s landlord and purchasing agent all rolled into one. The GSA Administrator is responsible for an annual business volume of $16 billion.

Although filling the role of Administrator can be a daunting task,

I believe, without question, that Mr. Perry is the right individual

for this important position.

Mr. Chairman, I have personally worked closely with Steve Perry

for a number of years. In February 1991, during my first term as

Governor, I was pleased to appoint Mr. Perry to my cabinet as Director of the Ohio Department of Administrative Services, a position he filled until March 1993. He successfully managed this large

department which is responsible for providing enabling services to

State agencies in a manner similar to that of the GSA at the Federal level, including construction and maintenance services for

Ohio’s public buildings and leased facilities, procurement of supplies and services, and telecommunications services.

As the director of the department, Mr. Perry played a key role

with the Governor’s Operations Improvement task force—essentially, a Statewide top-to-bottom audit of State programs designed

to improve the efficiency and effectiveness of each department and

agency in State Government.

Further, he served as my designee on the Managing for the Future task force, conducting a 12-month study to develop recommendations for the most efficient and effective operation of

Ohio’s higher education system. In 1993, I appointed Mr. Perry to

a 9-year term on the Ohio Board of Regents, where he has had a

leadership role in implementing these recommendations and other

improvements statewide.

Mr. Perry also helped me initiate Ohio’s Total Quality Management program, which included working closely with unionized

State employees. In my view, if Federal agencies are ever going to

improve their operations, not only do they need to adopt modern

business practices, but they need to make sure that unionized employees are involved in the process as well. I am glad that GSA will

have an Administrator with experience in these areas.

In addition to his extensive government service, Mr. Perry has

had significant general management experience during his 37-year

4

career with the Timken Company. After serving with distinction in

my cabinet, he rejoined the company in 1993 as vice president, and

in 1998 he was named senior vice president for human resources,

purchasing, and communications.

His experience in both the public and private sector is going to

be a tremendous asset to GSA. I have seen many skilled private

sector managers stumble when given high-level government positions because they are not familiar with how government works.

This is not going to be a problem for Mr. Perry.

In light of the Federal Government’s pressing need for effective

managers, especially in the critical areas of human capital and procurement, I can think of few individuals more experienced and

more qualified to assume the leadership of GSA than Mr. Perry.

Steve, I look forward to working with you, and I thank you, Mr.

Chairman, for holding this confirmation hearing this morning.

[The prepared opening statement of Senator Voinovich follows:]

PREPARED OPENING STATEMENT OF SENATOR VOINOVICH

Thank you, Mr. Chairman, it is my great pleasure to join Congressman Regula

in introducing to this Committee, President Bush’s nominee for the position of Administrator of the General Services Administration, my good friend, Mr. Stephen A.

Perry of Canton, Ohio.

Stephen, I would like to extend a warm welcome to you and your lovely wife,

Sondra, and thank you for your willingness to serve your country in a demanding

position. I am delighted that you have once again accepted the call to public service.

I would also like to thank you, Sondra, for the sacrifices you and your family made

when Steve served in Ohio State Government, and will likely make during his tenure at GSA.

Mr. Chairman, as you know, the position of GSA Administrator is probably best

described as being the Federal Government’s landlord and purchasing agent all

rolled into one. The GSA Administrator is responsible for an annual business volume of $16 billion. Although filling the role of Administrator can be a daunting

task, I believe, without question, that Mr. Perry is the right individual for this important position.

Mr. Chairman, I have personally worked closely with Stephen Perry for a number

of years. In February of 1991, during my first term as Governor of Ohio, I was

pleased to appoint Stephen to my Cabinet as Director of the Ohio Department of

Administrative Services, a position he filled until March of 1993. He successfully

managed this large department which is responsible for providing enabling services

to State agencies in a manner similar to that of GSA at the Federal level, including

construction and maintenance services for Ohio’s public buildings and leased facilities, procurement of supplies and services, and telecommunications services.

As Director of the Department of Administrative Services, Mr. Perry played a key

role with the ‘‘Governor’s Operations Improvement’’ task force; essentially, a statewide top-to-bottom audit of State programs designed to improve the efficiency and

effectiveness of each department and agency of State Government.

Further, he served as my designee on the ‘‘Managing for the Future’’ task force,

conducting a 12-month study to develop recommendations for the most efficient and

effective operation of Ohio’s higher education system. In 1993, I appointed Mr. Perry

to a 9-year term on the Ohio Board of Regents, where he has had a leadership role

in implementing these recommendations and other improvements statewide.

Mr. Perry also helped me initiate Ohio’s total quality management program,

which included working closely with unionized State employees. In my view, if Federal agencies are ever going to improve their operations, not only do they need to

adopt modern business practices, but they need to make sure that unionized employees are involved in the process as well. I am glad that GSA will have an Administrator with experience in these areas.

In addition to his extensive government service, Mr. Perry has had significant

general management experience during his 37-year career with The Timken Company. After serving with distinction in my Cabinet, he rejoined the company in 1993

as vice president, and in 1998 he was named senior vice president for human resources, purchasing, and communications.

5

His experience in both the public and private sector is going to be a tremendous

asset to GSA. I have seen many skilled private sector managers stumble when given

high-level government positions, because they are unfamiliar with how government

works. This is not going to be a problem for Mr. Perry.

In light of the Federal Government’s pressing need for effective managers—especially in the critical areas of human capital and procurement—I can think of few

individuals more experienced or qualified to assume the leadership of GSA than Mr.

Perry.

Stephen, I look forward to working with you, and I thank you, Mr. Chairman, for

holding this confirmation hearing this morning.

Chairman THOMPSON. Thank you very much.

Before we turn to the nominees, Senator Durbin, did you have

any opening comments?

Senator DURBIN. No.

Chairman THOMPSON. All right. Let’s turn to the nominees, and

we will begin with Angela Styles, to be Administrator of the Office

of Federal Procurement Policy at OMB.

The mission of the Office of Federal Procurement Policy is to provide overall direction of government-wide procurement policies, regulations, procedures, and forms for executive agencies to promote

economy, efficiency, and effectiveness in the procurement of property and services by the executive branch. This Committee has a

longstanding interest in and jurisdiction over the Federal procurement system and has been primarily responsible for statutory improvements like the Federal Acquisitions Streamlining Act and the

Clinger-Cohen Act and continuous oversight of the procurement

process.

Unfortunately, improvement in the procurement system has been

slow in coming. One of our primary allies in the effort to ensure

that within the procurement system industry sellers and government buyers offer and acquire, respectively, maximum value for the

taxpayer is the Office of Federal Procurement Policy.

I was pleased to see several initiatives already announced by the

new administration. Forcing more competition in the many activities performed by the government, requiring more performancebased contracting, and insisting that we utilize the power of the

Internet to streamline our procurement are just some of the things

that are already underway. These initiatives, when implemented,

will reap millions in savings and bring greater efficiency to government operations.

Angela Styles has the experience and background to take on

these challenges. In addition to substantive experience in government, both on the Hill and on behalf of the State of Texas, Ms.

Styles has hands-on experience representing clients with real government procurement problems, with increasing focus in recent

years on disputes involving cost accounting standards, compliance,

and allowability of costs under Federal contracts.

The Committee welcomes you, Ms. Styles.

Ms. Styles has filed responses to a biographical and financial

questionnaire, answered pre-hearing questions submitted by the

Committee, and had her financial statements reviewed by the Office of Government Ethics. Without objection, this information will

be made a part of the hearing record, with the exception of the financial data, which is on file and available for public inspection in

the Committee’s office.

6

1The prepared statement of Ms. Styles appears in the Appendix on page 67.

The biographical and financial information of Ms. Styles appear in the Appendix on page 69.

Pre-hearing questions and responses appear in the Appendix on page 77.

Post-hearing questions and responses appear in the Appendix on page 91.

Our Committee rules require that all witnesses at nomination

hearings give their testimony under oath. Ms. Styles, would you

please stand and raise your right hand? Do you solemnly swear to

tell the truth, the whole truth, and nothing but the truth, so help

you, God?

Ms. STYLES. I do.

Chairman THOMPSON. Thank you very much. Please be seated.

At this point I would like to give Ms. Styles an opportunity to

introduce anyone who is with her here this morning.

Ms. STYLES. I would like to introduce my husband, Scott Styles.

Chairman THOMPSON. Thank you. Welcome. Glad to have you

with us this morning.

Any further opening remarks by anyone? If not, we will turn to

Ms. Styles and receive any statement that she might have for us.

TESTIMONY OF ANGELA B. STYLES 1 TO BE ADMINISTRATOR

OF THE OFFICE OF FEDERAL PROCUREMENT POLICY AT

THE OFFICE OF MANAGEMENT AND BUDGET

Ms. STYLES. Thank you, Mr. Chairman and Members of the Committee. It is an honor to be here. I owe a special thanks to Congressman Joe Barton for his thoughtful introduction and a debt of

gratitude for his continued support throughout my professional life.

I am honored and grateful for his support today.

Second, but, I must confess, most importantly, I want to thank

my husband, Scott, for his steadfast support throughout my career.

Today is a particularly special occasion because it is also our wedding anniversary. I cannot imagine a better husband and father or

one person that could possibly have been more tolerant and understanding of my legal career and now my commitment to public

service.

Mr. Chairman, I also want to express my gratitude to the Committee for the expeditious consideration of my nomination. Your

staff has shown me extraordinary courtesy by moving through the

process quickly. I appreciate their time and preparation as well as

the opportunity to further develop the working and personal relationships that I have had with several members of your staff over

the past few years.

I am deeply honored and privileged by the President’s nomination to be Administrator of the Office of Federal Procurement Policy and am looking forward with great anticipation to providing

leadership and fostering an atmosphere of professional and excellence in acquisition policy.

Over the past decade, the Federal acquisition system has undergone significant and continual reform. This reform movement has

achieved many laudable goals, most important of which government customers now receive the goods they need in a fraction of

the time it took a decade ago. However, as with any reform movement, confusion has often dominated the process. I have been and

continue to be concerned that the efficient procurement model, coupled with significant implementation confusion, has compromised

7

concepts fundamental to our system of government and our system

of procurement. We must never forget that we are procuring $200 billion a year

in goods and services for the Federal Government with taxpayer

dollars. Because we are spending the public’s money, there are

some goals that cannot be compromised in the name of efficiency.

The real challenge for OFPP in this administration will be to balance the obvious benefits of increased efficiencies with the maintenance of fundamental concepts of competition, due process, integrity, and transparency. Indeed, OMB has already started working

towards these goals with management initiatives relating to competitive sourcing and performance-based service contracts.

The next 4 years will be important years for our procurement

system. I look forward to the prospect of working with you and

other Members of Congress on these difficult acquisition issues.

Thank you, Mr. Chairman and Members of the Committee, for

the opportunity to appear before you and for the time you have

given me. I am happy to answer any questions you might have.

Chairman THOMPSON. Thank you very much. As I indicated earlier, the Committee submitted some substantive pre-hearing questions to the nominee, and the nominee has also met with Committee staff, as you have indicated, to discuss a variety of issues

of Congressional interest regarding this office.

Your written responses to the written questions will be placed in

the record.

I will start with questions that we ask all nominees. Is there

anything that you are aware of in your background which might

present a conflict of interest with the duties of the office to which

you have been nominated?

Ms. STYLES. No.

Chairman THOMPSON. Do you know of anything, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities as Administrator of OFPP?

Ms. STYLES. No, sir.

Chairman THOMPSON. Do you agree without reservation to respond to any reasonable summons to appear and testify before any

duly constituted Member of Congress if you are confirmed?

Ms. STYLES. Yes.

Chairman THOMPSON. All right. Ms. Styles, in a March 9, 2001,

memorandum to agency heads, OMB Deputy Director Sean O’Keefe

stated that agencies should set goals to make greater use of performance-based contracts. As you know, part of our governmentwide procurement amendment to the DOD Authorization Act last

year included language to provide for performance-based contracts,

but there is apparently disagreement among the agencies regarding

the requirements to qualify as a performance-based contract.

Do you think agencies will be able to meet this goal set out in

Mr. O’Keefe’s memo? And what benefits do you think might be derived from such contracts?

Ms. STYLES. I certainly hope that the agencies can meet these

goals. Part of the problem right now, I think, as I identified in my

responses to the written questions, is that there is no agreement

among the agencies on what qualifies as a performance-based contract. NASA, for instance, thinks cost reimbursement type conVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
8

tracts are performance-based contracts. Other agencies don’t agree

with that.

Chairman THOMPSON. How would you define a performancebased contract?

Ms. STYLES. I think there may need to be more than one definition for performance-based contracts. You have contracts on the

low-risk end of the spectrum, which would be fixed-price contracts

for something like janitorial services. I think we could define a performance-based contract, as it has been defined in the past, to include incentives to be stating what you want performed as opposed

to the specific steps to get there.

On the high-risk end of the spectrum, I think we should—we

need to work a little bit harder to maybe take out some of the incentives. Obviously it’s not going to be fixed-price contracts when

you’re talking about a cost reimbursement contract.

I think we need to work on definitions that can fit the specific

situations. There may be an overriding definition that can fit lowrisk and high-risk contracts, but I think we also need to make sure

that we don’t forget high-risk contracts or cost reimbursement type

contracts when we’re making that definition.

Chairman THOMPSON. In the interest of economy and efficiency,

Federal Government buyers are placing increased emphasis on the

use of multi-agency contracts. When properly developed and used,

these contracts may enable Federal agencies to further leverage the

government’s buying power and satisfy agencies’ contractual requirements. Agencies have been successful in marketing their

many government-wide contracts to other Federal agencies.

There has been some concern that agencies are using these vehicles to short-cut competition. What are your views on the use of

these government-wide contracts? And how will you ensure that

they are used for the benefit of the government’s leveraged buying

power and at the same time maintain competition?

Ms. STYLES. I am very concerned about the proliferation of these

types of contracts. The best analogy that I can make is for me to

go out and buy a car. The most efficient and easiest way for me

to do that is to go to the Ford dealership down the street and tell

them I want the new 2002 Ford Explorer with the third-row seat.

But that doesn’t mean I’m getting the best price for that car. There

are other dealerships in town. There are dealerships in Texas.

There are dealerships in California.

From a procurement—and the most cost-effective way for me to

actually buy that car would be to go to one inexpensive service that

scours the country for the cheapest 2002 Ford Explorer, and I may

be getting that car from New Mexico. It may take me 2 or 3 weeks,

but I got the best price for the exact same car that I would have

paid more for at the Ford dealership down the street.

Contracting officers face a similar situation, but they don’t have

the mechanism, they don’t have the centralized mechanism or

somebody that’s going to scour the agencies’ acquisition contracts

or the types of contracts to find out what the best deal they can

get or to find out the best vehicle for contracting for what they

want.

A contracting officer looks at the situation. He will go to essentially the Ford dealership down the street, the easiest place to buy

9

the goods or service that he needs. There is no centralization of

these government-wide acquisition contracts. There’s no one place

he can go to to find all of the contracts for whatever particular

goods or service he’s looking for. So there’s no assurance—in fact,

there’s no assurance whatsoever that we’re getting the best deal,

that there’s any competition, and I think in the end the taxpayers

are probably paying a great deal more money for the convenience

of going to the Ford dealership down the street.

Chairman THOMPSON. Do you have any ideas for improving that

situation?

Ms. STYLES. I think we need to centralize the contracts that

we’re looking at, at least some centralization of where to go to look

for the contracts. In the long term, I think we also need to be taking a look at the user fees on these contracts also.

Chairman THOMPSON. Thank you very much. Senator Voinovich.

Senator VOINOVICH. I am interested to hear you talk about centralization. If you are going to go in that direction, you better make

sure that you have some really efficient people, because from my

experience in government, it takes forever and a day to get anything done when you have had centralized purchasing. I think that

is something that needs to be guarded against.

The other thing that I would like to share with you is that so

often there is an attitude that programs to provide incentives to

minority business and small business are more socially oriented

rather than bottom-line. I recall while I was mayor of the city of

Cleveland that we participated in a Federal program that was

aimed at attracting more people to compete for work with the Defense Department. When that program was announced, there were

accusations that it was going to be a rip-off and it wasn’t the right

thing to do. It happened to specifically deal with torpedoes. We

really promoted the program while I was mayor, and we got a lot

of people to be interested in providing parts of torpedoes that had

previously been purchased through the ‘‘good-old-boy’’ network.

I will never forget it as long as I live. This major torpedo com- pany, after it was all said and done, saved $14 million as a result

of going to the northeastern Ohio area and giving some folks an opportunity to compete for those Federal contracts.

There was also in place something called a Maybank amendment, but I don’t know if that is still around in terms of purchasing. You had to give the contract to the lowest and the best

bidder. I lobbied very hard, and this was at a time in the early

1980’s when unemployment was large in urban areas, 20 percent

in my city. We lobbied through a provision that said that if you

were in a labor surplus area where they had high unemployment,

that if the person applying for the work was within 5 percent of

the low bid, that they would get the work. So once we got it

through, I said now we have to take advantage of it.

The interesting thing is this: By opening it up to a lot more people—we created an office called the ‘‘Make it in Cleveland’’ program

with the Greater Cleveland Growth Association. It is something

you should look into. They went out and looked at people that could

compete for these contracts, particularly in the Defense Department. Long story short, we got a lot of contracts, and in no case

did we ever have to take advantage of the 5 percent provision. The

10

contracts from Ohio were the lowest bid. But there was kind of a

closed set-up, that only the people that were wired got the business. And I am just bringing that to your attention because so

often there is an attitude that some of these ‘‘social welfare’’ programs are going to cost us more money and we’ve got to worry

about the bottom line. Well, I am saying that the ones I have had

experience with have been terrific, and I would hope that you

would look into those.

The last thing I would like to discuss with you—and I would like

your comments—is how familiar are you with the quality of the individuals that you are going to be dealing with in some of the departments in terms of procurement?

Ms. STYLES. I am relatively familiar with people that I have

worked with at the Department of Defense. I have had clients and

we have negotiated a number of agreements with the Department

of Defense, many of them being contracting officers, defense corporate executives and the like.

Senator VOINOVICH. What about the quality of their work?

Ms. STYLES. The ones I have dealt with have been very high

quality, although I will qualify that with saying that most of the

clients I worked with are the larger defense contractors. So I think

you would expect their contracting officers or their defense corporate executives to be probably the best.

Senator VOINOVICH. I have held hearings on the human capital

crisis, and we had a hearing on the Commission on U.S. Security

in the 21st Century. I would suggest that you read the testimony

from Dr. Schlessinger, and from Admiral Trane, and familiarize

yourself with it, because they have basically concluded that we are

in a serious situation, particularly in the Defense Department, in

terms of the quality of individuals that are there. I think one of the

major problems that you are going to be confronted with is the

quality of people who are in those departments and the prospect

that many of them are going to be retiring before the year 2004 or

will be eligible for retirement.

Ms. STYLES. I agree, and I think as we move to more competitive

sourcing under A–76, the procurement people, the contracting officers are going to become increasingly more important. And I think

we need to focus more training and recruitment in that area.

Senator VOINOVICH. I would urge you, anybody in OMB—and my

observation is we haven’t had any ‘‘M’’ in OMB—that there be a

specific line item for training in the Federal Government. There is

no training line item, even today in the budgets that are being submitted. I have asked the same question, and they don’t have it in

their budgets. You should have training in those budgets. Without

it, those departments can’t be competitive. Many of the individuals

are going to leave if they don’t have an opportunity to improve

their skills.

Ms. STYLES. I agree.

Chairman THOMPSON. Thank you very much. I always learn

more about State and local government by listening to Senator

Voinovich. Someday I am going to learn why the city of Cleveland

needs torpedoes. [Laughter.]

We will get into that later. Senator Durbin.

11

1The prepared statement of Mr. Perry appears in the Appendix on page 93.

The biographical and financial information of Mr. Perry appear in the Appendix on page 104.

Senator DURBIN. I have no questions, but the Chairman will also

know, when he visits Cleveland, he can visit Voinovich Park, which

I have seen in Cleveland.

Thank you very much, Mr. Chairman.

Chairman THOMPSON. Thank you very much.

I might point out Senator Lieberman and I have sent a letter to

OMB on the human resources problem, that we are very concerned

about that Senator Voinovich mentioned. So I am sure that you

will be talking to each other about that with your folks in OMB.

That is all the questions I have. We expect to act on your nomination promptly. We thank you for being here. We thank you for

offering yourself to public service, and you are obviously a very

qualified, knowledgeable person, and we appreciate your being here

today.

Ms. STYLES. Thank you for having me.

Chairman THOMPSON. Thank you very much.

We will now proceed to the nomination of Stephen A. Perry, to

be Administrator, General Services Administration. The GSA Administrator is responsible for managing the agency that supports

the work of the Federal Government. It provides work space, equipment, supplies, procurement services, and other assistance to other

Federal employees. Therefore, it is extremely important for the Administrator to be well versed in government operations.

Mr. Perry brings that experience to this position through his

work as part of Senator Voinovich’s—then-Governor Voinovich—

cabinet as Director of the Ohio Department of Administrative Services, and his role as senior vice president, human resources, purchasing, and communications at the Timken Company.

In light of the Federal Government’s need for effective managers,

Mr. Perry seems to be very qualified to assume the leadership of

GSA. Mr. Perry has filed responses to a biographical and financial

questionnaire, answered pre-hearing questions submitted by the

Committee, and had his financial statements reviewed by the Office of Government Ethics. Without objection, this information will

be made a part of the hearing record, with the exception of the financial data, which is on file and available for public inspection in

the Committee’s office.

Committee rules require that all witnesses at nomination hearings give their testimony under oath. Mr. Perry, would you please

stand and raise your right hand? Do you solemnly swear to tell the

truth, the whole truth, and nothing but the truth, so help you,

God?

Mr. PERRY. I do.

Chairman THOMPSON. Thank you very much. Be seated, please.

At this point I would like to give Mr. Perry an opportunity to introduce anyone here today with him he might want to introduce.

TESTIMONY OF STEPHEN A. PERRY 1 TO BE ADMINISTRATOR

OF THE GENERAL SERVICES ADMINISTRATION

Mr. PERRY. Thank you, Senator Thompson. Mr. Chairman and

Members of the Committee, it certainly is an honor for me to be

12

have been nominated by President Bush to serve as Administrator

of General Services, and it is also an honor for me to have this opportunity to talk about that subject with this Committee today.

With your permission, Mr. Chairman, I would first like to take a

moment, though, to say thank you to Senator Voinovich and to

Congressman Regula, not only for the kind words that they said

this morning, but more particularly for their friendship over the

years and for the kindness that they have extended to Sondra and

me and many other constituents, I am sure, back in our home

State of Ohio. I also want to take this opportunity to thank Senator

DeWine, who could not be here this morning because of his work

on the Judiciary Committee, but he has certainly been very helpful

and supportive of me in this instance and throughout my experience working in public service.

I sincerely appreciate the support and counsel that these gentlemen have given me over the years, and other members of the Ohio

delegation have done the same. I understand that by supporting

my nomination to lead GSA, each of them is saying something

about the trust that they would place in me, and I want each of

them to know, particularly you, Senator Voinovich, and I would

like each of the Members of this Committee to know, that if I am

confirmed, I pledge to continually strive to be worthy of your trust.

Mr. Chairman, I certainly agree with you and other Members of

the Committee regarding the very important role and responsibility

that General Services Administration has in achieving effective and

efficient government services on behalf of the American people. It

certainly is very clear to me that the quality and timeliness of the

work done by GSA in providing services to the other Federal agencies has a direct and significant impact on the ability of those other

agencies to achieve their respective missions. The challenge for

GSA is to achieve and sustain itself as a high-performance organization, committed to continuous improvement of the services that

it provides to meet the needs of its customer agencies, and thereby

improve government services rendered directly to the public.

Mr. Chairman, I am very excited about the possibility of joining

the team at GSA in this very important work. I am excited because

I believe strongly in President Bush’s aspiration to apply solid general management practices as the means to significantly improve

government services for all Americans. I am excited because of the

very interesting managerial challenge that will be involved with

such a large and complex organization, and I am also excited to

have this opportunity to be so involved in public service. I know

that achieving and sustaining high-performance and a continuous

improvement culture at GSA will be a very big job. I know it will

have its hardships and frustrations. I know it will require long

hours and some sacrifice by me, and certainly by Sondra and by

others at GSA. I know that the administration and this Committee

have high performance expectations for GSA.

From what I have learned, I believe that the people at GSA will

accept the challenge for high-performance, and I am confident that

I can help the GSA team make it happen. Mr. Chairman, as I

thought about this hearing this morning and what I might say in

this brief opening statement, I felt it might be useful to the Committee if I said a few words about my views on achieving and susVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
13

taining high performance in such an organization. Obviously, accomplishing this will require a number of things on behalf of people

both outside and inside the agency, and I wanted to take a moment

to mention just a few of these items.

First, I know that it is going to require very effective communication in all that we do. Constructive dialogue is critically important

to get everyone involved on the same page and pulling in the same

direction. Pardon me. I will have to ad lib. One example of a particular item of effective communication that perhaps we should

spend some time on in the next few months, I believe, is in the

area of the communication that GSA has with members of Congress and particularly with their staffs, and the same thing is

going to be true with respect to communication that GSA has with

the administration, and, there again, particularly with a staff of

OMB.

In fact, communication can be improved. I have had the opportunity to meet with some of the Congressional staff already, and

talk about ideas that they have for making that improvement. I

look forward to working together with them to make that happen.

Second, in addition to improving communication, as I just mentioned, achieving and sustaining high-performance at GSA will require developing an intimate working relationship with each of our

customer agencies, so that we can work well together with them to

develop the most effective and efficient approach to satisfy their

needs.

The third item I would mention, that is necessary for achieving

high-performance at GSA, will be to develop a very close working

relationship with our suppliers. That is the way in which we can

develop win-win approaches to developing the best value proposition for our customer agencies.

Fourth, it will require organizational capability building. We

need to do this in order to have the people in place that are capable

to achieve the mission that we have set out to achieve, and this

brings us to the discussion that Senator Voinovich raised with respect to managing our human capital.

We must have a strong human capital management process

throughout government. I am speaking particularly as it would relate to GSA. In this case, we must first determine the skills and

competencies needed to achieve our specific goals for the coming

years. We need to document that, understand what it will take to

get us where we want to go. After having done that, then we need

to identify the gap that exists between what is needed for success

and what we have in place today. As we have identified that gap,

then we need to execute the staffing plan that will bridge that gap

by developing talent, by providing training, by recruiting people

with the specific skills that GSA will need to achieve its goals.

Mr. Chairman, the last item I will mention in this area of achieving and sustaining performance at GSA is a very, very critical one,

and it is the need to have what I call a strong performance management process throughout the agency. I think the guidelines in

the Government Performance and Results Act, or GPRA, will serve

as the framework for this work. Our performance management

process will be built on the foundation of shared GSA values and

missions, along with clearly-articulated goals and performance exVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
14

1

Pre-hearing questions and responses of Mr. Perry appear in the Appendix on page 122.

pectations. You can be sure that among the fundamental values

will be integrity, customer service and accountability for results.

We will work very hard to see that each individual on the GSA

team understands his or her role and responsibility, and just as importantly as understanding, we will work to see that they are

strongly committed and aligned with each other to achieve the

powerful force necessary for high-performance and to successfully

achieve the GSA mission. We will have clear performance expectations. We will work with our oversight committees and the OMB

staff to make sure that is the case.

We will have performance measures, so that we can be held accountable for our results. We will be proactive in taking corrective

action as necessary to stay on course; and finally, the performance

management process will provide for rewards and recognition to

the people of GSA for their achievements. Mr. Chairman and Members of the Committee, as I said earlier, I know that achieving and

sustaining high performance and continuous improvement at GSA

will be a very big job. I believe that I do have the relevant experiences in business and in State Government which will enable me

to be a strong contributor to the success of the GSA team in achieving the things that we have discussed here today.

It would be an honor and a privilege for me to serve our country

in this capacity as Administrator of GSA, and so I respectively ask

for your support of my nomination. Thank you very much, and I

would be happy to answer any questions.

Chairman THOMPSON. Thank you very much. As I indicated

earlier, the Committee submitted some substantive pre-hearing

questions to the nominee,1 and the nominee has also met with the

Committee staff to discuss a variety of issues of Congressional interest. Your written responses to the questions will be placed in the

record, and I will start my questioning with questions we ask of all

nominees.

Is there anything that you are aware of in your background

which might present a conflict of interest with the duties of the office to which you have been nominated?

Mr. PERRY. No, sir, there is not.

Chairman THOMPSON. Do you know of anything, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the Administrator of GSA?

Mr. PERRY. No.

Chairman THOMPSON. Do you agree with reservation to respond

to any reasonable summons to appear and testify before any duly

constituted committee of Congress, if you are confirmed?

Mr. PERRY. Yes, I do.

Chairman THOMPSON. Mr. Perry, as you know, the GSA’s Inspector General and the GAO have identified a number of management

challenges that inhibit GSA’s ability to achieve its mission, and

this Committee has asked all agencies continually to set goals for

solving many of these problems. As GSA’s authorizing committee,

we have a particular interest that you use the Results Act. You referred to GPRA, the Results Act, a few moments ago, but we really

15

need you to use that to report to us on the extent to which you are

solving them.

I am informed that the GSA, with some reluctance, has begun to

report on its major management challenges in its performance report—as you know, the Results Act requires annual performance

reports—as to whether or not we are actually achieving the goals

we set out to achieve. We are trying to get to a performance-based

government here, instead of looking at inputs, how many hours we

spent or how many pieces of paper we shuffle. We are looking for

results. Are we getting the job done that we were set up to do?

These reports help us do that.

However, rather than setting concrete goals for addressing the

problems, some of these GSA reports simply report on activities

that they are undertaking to solve the problems. For example, regarding what the Inspector General calls GSA’s information technology problem, GSA simply reports that they are working hard to

improve. So I am going to ask you to really focus on that. We just

had the Mercatus Center give us a report on the latest round of

reports submitted, and they are all over the lot. Some agencies are

doing a lot better job than others, and I think it depends more than

anything else on what kind of leadership they are getting from the

top, and whether or not the heads of these agencies prioritize that

and think it is important.

We think it is important, and we are going to be coming back to

you time and time again, to make improvements, not only in your

department or in your agency, but in the way you report your improvements. You sound, from your opening statement, like you

fully appreciate that, without my even having to ask the question.

Mr. PERRY. Yes, Senator, I absolutely do, and that is why I did

allude to that in my remarks, because I think the guidelines provided in the Government Performance and Results Act really do

represent some elements of best management practices in that regard. It does talk about setting challenging, but achievable, goals;

goals that are important to your customers, not necessarily goals

that mean something only to people inside the organization. It also

talks about doing that in a collaborative way, by that, I mean having dialogue so that people inside the organization understand the

importance of the goal, and hopefully, in the course of that dialogue, really develop some personal commitment to achieve the

goal; and as that happens, you do need to have, of course, in place

a process to measure progress, the willingness to take corrective action if it is necessary to make sure you stay on track, and then,

at the end of the day, you do have the data that measures whether

or not you have moved the needle in the right direction, and that’s

what leads to accountability and continuous improvement.

Another point, which I also alluded to, is that in the course of

developing this initial plan and in the course of developing the initial performance measures by which we shall hold ourselves accountable, that is the point in time when GSA and the oversight

committees, and people involved both on the Congressional side

and the administrative side, need to be clear and on the same page.

It should not be that GSA develops goals in a vacuum and then

works on them. It should be that GSA develops goals that there is

some consensus about, that these are the right things, so that we

16

make sure we are doing what is viewed by everyone as the right

thing. So I subscribe to that wholeheartedly. That will be the place

where we will begin to work, day one.

Chairman THOMPSON. Well, it looks like the agency is getting,

maybe slowly, on the right track. I mentioned the Mercatus Center

at George Mason University that does this annual assessment

every year, and pointing out the importance of the job that you are

about to take, it says the following: It says, ‘‘Because of the nature

of GSA’s role in the government, which is to serve other agencies’ business needs, improving its own processes often automatically

benefits its customers in the Federal Government and presumably

citizen taxpayers. The connection between what GSA does and the

expected result is obvious. This report gives tangible evidence of

savings to its customers. The story is not told at the highest level,

but at the performance goal level, the impact is clear.’’ So they

have been able to document, through this reporting, and this last

one anyway, some savings to its customers. So it looks like you

have some good people over there working on this already.

Mr. PERRY. I would agree with that, Senator. In fact, there are

a couple areas where the goals are really well-measured. I will

mention public building service. There are certainly some other

challenges in that area, but they had a specific goal as to how

many days it would require to place an agency in leased space,

once they had made the request, and there was dramatic improvement, even though the IG’s report shows that they did not achieve

the goal they set, the improvement was dramatic, and I think that

is what engenders inside the people in the organization that winning, and you win a little bit and then you win a little bit more

and then you win a little bit more, and before you know it, you become a high-performance organization dedicated to that kind of

performance.

Chairman THOMPSON. That is right. The direction is what is important, and agencies should not be afraid to set high goals for fear

of missing their goal and somebody is going to criticize them. I

think it is much more impressive to set high goals, and, whether

you meet them or not, you are making progress toward achieving

them. It sounds like that is what you are doing. GSA’s government

property auction site allows agencies to conduct online sales of everything from computer equipment to government vehicles. The

commercial market provides the same service on the Internet sites,

such as eBay and others. While having multiple sources for this

type of activity is not uncommon, what is uncommon is the recent

statement by a GSA official, who said GSA will go after the private

sector government auction Federal business. Are you prepared to

work with GSA’s managers to better understand what capabilities

should be developed in-house, and what should be contracted out?

I think some in the government contracting community may think

that GSA is duplicating the efforts of the private sector by developing technology within the agency, rather than taking advantage

of commercially-developed solutions at a lower cost. Are you familiar with this issue, and what do you think about it?

Mr. PERRY. I am not intimately familiar. I know a little bit about

it, and I can talk about it in general terms. On the one hand, I

would certainly say at the outset that there are many things that

17

GSA does which may be available to be done commercially, on the

outside, and I think we ought to carefully consider those opportunities every time they exist. Where it is in the best interest of our

customer agency to work with outside commercial organizations,

we should do that, and I think a lot of that is already done. Specifically, with something like the property disposal web site, part of

what I have heard anecdotally is that the private-sector companies

would be interested in the more lucrative parts of that, and not in

the whole batch of it.

So what you would have remaining is GSA having to dispose of

the things which are much more difficult to dispose of, and still

having to develop the same web site to do it. So that would argue

in favor of keeping the package together, so that you get the economies of scale. On the other hand, if there were a private-sector supplier out there who, in fact, would say, ‘‘No, I will step up and I

will take the whole package, I will take the plums and I will take

the prunes together, and we will provide something that is better

than what could be done by Federal agencies,’’ then I say clearly

we ought to go in that direction. That is one of the things I will

have to—— Chairman THOMPSON. You are obviously up on the issue, and it

just requires good management judgment, which I am sure you will

provide.

Senator Voinovich.

Senator VOINOVICH. Mr. Chairman, I just want to say that I hope

that all of the President’s nominees are as qualified and experienced and capable, and have the potential that Mr. Perry has. I

think that your statement was very well put together, and I would

like to say to you, Mr. Chairman, and to Senator Durbin, that in

2 years, this agency that Mr. Perry will head up will be a model,

and one we can look to in terms of benchmarking some other agencies in the Federal Government.

Chairman THOMPSON. He is not doing you any favors, is he, Mr.

Perry?

Mr. PERRY. He is setting those high challenges, like you advised.

Senator VOINOVICH. I would not be saying this if I did not think

he was capable of doing it. I would just mention to you, as I said

to Ms. Styles, that we do have a human capital challenge, and I

was very pleased in your remarks that you talked about really

looking at the skills and needs, and the shaping of your agency, to

make sure that you can respond to the challenges currently and in

the future. I would suggest to you that you look at your budget,

find out whether or not some of the incentives that you need are

currently in that budget, to retain people that you have and to attract other people into the agency. Also, one other important ingredient is the whole issue of training, which you are very, very familiar with.

I will say to you that, from what I have picked up, there are

some concerns between the management of that agency and their

labor unions, and I would be interested to see how you handle that

situation. One other area that came before this Committee was the

whole controversy over the qualifications of the people who provide

the security in our buildings throughout the country. It appeared

to me that there was a feeling among many people, that part of

18

your operation was not getting the same kind of attention that

some other parts of the agency were getting. So those are two areas

I think you need to look at pretty quickly, to see if there is something that can be done to deal with it.

Mr. PERRY. Thank you, Senator. I certainly will do that. I would

like to just comment quickly, in the case of security, providing safe

workplaces for Federal employees is of paramount importance. Part

of what we have to understand is what is the duty and responsibility that we will place on those individuals? In other words, to

some extent, that duty is to provide secure access to the building,

and safety in that sense. There is another aspect that some talk

about, which would be more in the line of police work, even investigative work. We have to define, first of all, what it is that we are

responsible to do in that regard. Both of those things would have

great implications with respect to the capability of our existing

staff, or only the former portion of that, and that has to be worked

out.

I know that one change has already been made with respect to

the management oversight of that activity. It is now in the public

buildings services, and the responsibility is there for that individual to work with the people in all the regions, to make sure that

we are applying consistent practices, and that was not the case before. So it is an item of great concern, given the nature of the world

in which we live and the possibility for bad acts within Federal

buildings. So it is something we will pay attention to very early on.

Senator VOINOVICH. Thank you.

Chairman THOMPSON. Thank you very much. Senator Durbin.

Senator DURBIN. Mr. Chairman, I will only note that in his biography, it says that Mr. Perry was a stockroom clerk at Timken in

1964, and now he is a Senior Vice President. So I do not think that

Senator Voinovich’s projected success of your service is exaggerated. I wish you the best.

Mr. PERRY. Thank you, Senator. Thank you very much.

Chairman THOMPSON. We will act promptly on your nomination,

Mr. Perry. Thank you very much for your service to your State and

to your country, and we appreciate your being here and your willingness to serve. We look forward to acting on your nomination.

Thank you very much.

We will now turn to the nomination of John Graham to be Administrator of the Office of Information and Regulatory Affairs at

OMB. OIRA, as we refer to it, is the statutory office within OMB.

The administrator is the head of this office. OIRA was established in 1980 by legislation developed by this Committee, to address policy issues Congress was concerned were being neglected by

the Executive Branch. Specifically, OIRA is charged with being a

leader on regulatory reform, including implementing statutory requirements, reducing unnecessary paperwork and red tape, reviewing information policy and guiding statistical policy proposals. The

decisions and actions of the OIRA Administrator are extremely important to the public, and these decisions should be made by an extremely capable and dedicated individual. Dr. Graham fits this profile.

He has been a professor of Policy and Decision Sciences at the

Harvard School of Public Health since 1991, and director for the

19

Harvard Center for Risk Analysis. Like many other universes, such

as Johns Hopkins, University of Pennsylvania, Washington University at St. Louis, Carnegie Mellon, George Mason and others,

Harvard, through the Center for Risk Analysis, has researched analytical methods by which policy makers can make more reasoned

regulatory decisions. Like these other research centers, the Harvard Center strives to continue its work through a diversity of supporters, including the university, government, and the private sector. As the government’s share of research and development has

decreased, universities have relied more and more on private support for crucial research. A survey by Committee staff indicates

that research universities receive a substantial portion of their research dollars from industry, beyond monies from private foundations and non-profits. It is not uncommon for centers doing similar

work as the Harvard Center to receive about 40 percent to 60 percent of their funding from the private sector.

It can be argued that much of the Harvard Center’s work and

the work of many other programs would not be possible without

support from the private sector. A review by my staff and letters

to the Committee indicate that the Harvard Center stands above

many other centers because it has developed specific rules governing the researchers at the Center on conflicts of interest and financial disclosure, to ensure the integrity of the work. Many other

centers surveyed relied solely on university-wide, or department

policies, to address ethics concerns.

Dr. Graham’s background highly qualifies him for this position.

While as an academic and researcher, he was able, as all researchers do, to explore new ideas and methods related to his field. He

could argue about what theories worked or did not work. That is

what academia and research is all about. The Committee has received many letters pertaining to this nomination from leaders in

environmental, health and regulatory policy. There are many outstanding letters of support for Dr. Graham, including letters from

William Riley, former EPA administrator and head of an environmental group, as well as a letter signed by all five of the former

administrators of OIRA, from both Democratic and Republican administrations. I am confident that Dr. Graham will effectively be

able to make the transition from academia to government service,

and that he will be able to use his background to bring more insight to the issues that confront OIRA every day.

Dr. Graham has filed responses to a biographical and financial

questionnaire, answered pre-hearing questions submitted by the

Committee, and had his financial statements reviewed by the Office of Government Ethics. Without objection, this information will

be made a part of the record, with the exception of the financial

data, which is on file and available for inspection in the Committee’s office.

Our Committee rules require that all witnesses at nomination

hearings give their testimony under oath. Dr. Graham, would you

please stand and raise your right hand? Do you solemnly swear to

tell the truth, the whole truth, and nothing but the truth, so help

you, God?

Mr. GRAHAM. I do.

20

1The prepared statement of Mr. Graham appears in the Appendix on page 150.

The biographical information of Mr. Graham appears in the Appendix on page 153.

Pre-hearing questions and responses appear in the Appendix on page 175.

Additional pre-hearing questions and responses appear in the Appendix on page 191.

Post-hearing questions and responses appear in the Appendix on page 303.

Chairman THOMPSON. Please be seated. Dr. Graham, do you

have anyone with you today that you would like to introduce?

TESTIMONY OF JOHN D. GRAHAM 1 TO BE ADMINISTRATOR OF

THE OFFICE OF INFORMATION AND REGULATORY AFFAIRS

AT THE OFFICE OF MANAGEMENT AND BUDGET

Mr. GRAHAM. I do, indeed, sir. My wife, Susan, and daughter,

Katy; my parents, Tom and Eileen Graham; and my sister and her

husband, Sue and John Shefsley and their daughter, Sarah

Shefsley; and my wife’s parents, Leo and Gloria Warner.

Chairman THOMPSON. All right. Thank you very much. You are

all very welcome here this morning.

Senator Voinovich, did you have any opening comments?

Senator VOINOVICH. Yes, I do. Thank you, Mr. Chairman. I am

pleased that the Committee on Governmental Affairs is considering

the nomination of Dr. Graham to be the Administrator of the Office

of Information and Regulatory Affairs within the Office of Management and Budget. Mr. Chairman, I view OIRA as a very important

office in the Federal Government. Fortunately, President Bush has

nominated an individual who has the experience, the knowledge,

and the integrity to be a first-rate administrator. Dr. Graham, as

you mentioned, is a tenured professor at Harvard University. He

has published widely, managed the Harvard Center for Risk Analysis at the Harvard School of Public Health, and is considered to

be a world-renowned expert in the field of risk analysis.

When I was active in the National Governors Association, I had

the pleasure of meeting Dr. Graham and hearing his testimony

about risk assessment and cost-benefit analysis. He is, hands down,

one of the most qualified people ever to be nominated for this position. Mr. Chairman, as you know, I served as Governor of Ohio for

8 years, and I know what it is like to operate in an environment

of scarce resources, where tough choices have to be made on resource allocation among a State’s various programs. In many instances, new Federal regulations have a habit of costing State and

local governments tremendous sums of money to implement. That

is why, many years ago, I was one of the four or five governors that

pushed the passage of unfunded mandate relief legislation here on

the Federal level; and, as Members of this Committee know, there

was a provision in unfunded mandates relief legislation, that any

regulation that was over $100 million had to be looked at in terms

of risk assessment, cost-benefit, to determine whether or not it met

the test.

That is why it is important that we have an OIRA Administrator

who understands the significance of sound regulations and usefulness of cost-benefit analysis when determining how the Federal

regulations will be applied to our State and local governments. As

one who was very involved in development, as I mentioned, in unfunded mandates, it is important that the Administrator work to

encourage agencies to consult with State and local governments

21

while developing new Federal rules. It is also important that OIRA

administrator produce accurate cost-benefit analysis for major Federal regulations. I am confident Dr. Graham will bring a reasoned

approach to the Federal regulatory process. Dr. Graham is widely

respected and his nomination has received support, and I am not

going to go into them, Mr. Chairman, because you have already

mentioned that.

I would mention, though, that he is so well-qualified that the last

five OIRA Administrators, Democrats and Republicans alike, wrote

to our Committee that, ‘‘We are confident that John Graham is not

an opponent to all regulations, but rather is deeply committed to

seeing that regulations serve broad public purposes as effectively

as possible.’’ These five individuals know what it takes to be an effective Administrator, because they have done the job themselves.

Dr. Graham does have the skills and the qualifications to be a responsible steward of the public interest, and I agree with their assessment.

Before I conclude, Mr. Chairman, I would like to raise another

point about Dr. Graham’s nomination. While there has been strong

support for his nomination from a variety of sources, I am familiar

with the criticisms of Dr. Graham and the Harvard Center for Risk

Analysis regarding their corporate funding. I see this criticism,

frankly, as unfounded. The Harvard Center for Risk Analysis has

a comprehensive disclosure policy, with the Center’s funding

sources disclosed and the Center’s annual report on their web site.

If reporters, activists or legislators want to know how the Harvard

Center is funded, the information is publicly available.

It is well-known that the Harvard Center has substantial support from both the public and private sectors. The Harvard Center

also has an explicit public conflict of interest policy. As for Dr.

Graham, he has a personal policy against accepting personal consulting income from companies, trade associations and other advocacy groups.

Dr. Graham, I want to thank you for your willingness to serve

your Nation. Your background and your experience have prepared

you well to become the next Administrator of OIRA.

Thank you, Mr. Chairman.

Chairman THOMPSON. Senator Collins.

OPENING STATEMENT OF SENATOR COLLINS

Senator COLLINS. Thank you, Mr. Chairman, and good morning,

Dr. Graham. I look forward to this hearing on Dr. John Graham’s

nomination to be the Administrator of the Office of Information

and Regulatory Affairs. Along with most Members of this Committee, I have been able to work with Dr. Graham on such issues

as the regulatory reform legislation that drew bipartisan cosponsorship from a diverse group of Senators. Dr. Graham’s credentials for

this position are stellar, and it would be hard to imagine anyone

better qualified than he for this important position.

OIRA is responsible for reducing government paperwork and ensuring that regulations are drafted in a manner that will achieve

their goals, but without unnecessary costs and increased risk. Dr.

Graham has been a leader in the application of sophisticated research tools, such as risk analysis, that let us accomplish such regVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
22

ulatory rationalization in a far more effective manner. The risk

analysis tools used by Dr. Graham and his colleagues help avoid

regulatory paralysis and enhance public safety and welfare. It

would be difficult to find a person better qualified to use these tools

for the public’s good than Dr. Graham, a professor at the Harvard

School of Public Health and the founder of the Harvard Center for

Risk Analysis.

In the years since its establishment, the Center has provided invaluable research on regulatory health and safety issues. As the

Chairman has noted, Dr. Graham’s nomination has been endorsed

by a wide range of organizations, scholars and former OIRA Administrators. Mr. Chairman, I think it is unfortunate that a few

groups have decided to oppose Dr. Graham’s nomination, not by engaging in debate about his beliefs and positions, but rather by attacking his personal character and that of his academic colleagues

at Harvard. Rather than discussing the merits of his analysis, his

critics have somehow called into question his character and his

judgment, because, like most academic institutions, the Harvard

Center accepts private donations from industry groups.

Those who make such criticisms clearly know little about the

Center. The Harvard Center, after all, receives considerable public

funding, too, and has tougher conflict of interest policies than that

of Harvard University as a whole. The Center is funded by both

private industry and by the government’s own regulatory and research agencies, including such organizations as the Environmental

Protection Agency, the National Science Foundation, and the National Cancer Institute. Measurement of the effectiveness and efficiency of government regulations simply makes good sense, and it

is ludicrous to suggest that rigorous analysis of government laws

and regulations is somehow against the public interest, but to undertake such a study is all that Dr. Graham has done.

After all, Dr. Graham is hardly an opponent of well-crafted, commonsense regulation. He sounded the alarm, for example, of the deteriorating quality of indoor air quality in this country, a subject

that had been virtually forgotten in our debates over clean air

standards. Dr. Graham has also been an advocate of such conservation measures as the higher gasoline tax and tax credits for those

who purchase vehicles utilizing a variety of energy-saving devices.

I agree with him on one of those proposals and not on the other.

I do not think we ought to have a higher gasoline tax, but my point

is that he has been a supporter of efforts that would increase regulations in some areas. He has also been a supporter of efforts to

regulate particulate matter.

In closing, Mr. Chairman, let me just make a few brief observations. Were Dr. Graham not strongly in favor of effective safety

regulations, the American Trauma Society and the Task Force for

Child Survival and Development would not have sent strong letters

in support of his nomination, but they did. Were Dr. Graham not

strongly in favor of effective regulations to protect Americans’

health, the President of the American Council on Science and

Health would not have informed me that Dr. Graham would be an

outstanding OIRA Administrator, but she did. Were Dr. Graham

not superbly qualified for this position, he would not have drawn

the praise of every former administrator legally permitted to give

23

it, and he would not have won endorsements from scholars of all

political persuasions and from many different disciplines, but he

has.

Mr. Chairman, I am confident that, at the end of the day, the

American people will be impressed, not only without Dr. Graham’s

qualifications and experience, but also with his willingness to leave

academia for public service.

Thank you, Mr. Chairman.

[The prepared opening statement of Senator Collins follows:]

OPENING STATEMENT OF SENATOR SUSAN M. COLLINS

I look forward to this hearing on Dr. John Graham’s nomination to be administrator of the Office of Information and Regulatory Affairs. Along with others on this

committee, I have been able to work with Dr. Graham on such issues as the Thompson-Levin regulatory reform bill—legislation that drew the cosponsorship of a diverse group of Senators in both parties.

Dr. Graham’s credentials for this position are stellar, and it would be hard to

imagine anyone better qualified for the job. OIRA is responsible for reducing government paperwork and ensuring that regulations are drafted in a manner that will

achieve their goals, without unnecessary costs and increased risk. Dr. Graham has

been a leader in the application of sophisticated tools, such as risk analysis, that

let us accomplish such regulatory rationalization in a far more effective manner. Far

from being ‘‘paralysis through analysis,’’ the risk-analysis tools used by Dr. Graham

and his colleagues help avoid regulatory paralysis and enhance public safety and

welfare. And it would be difficult to find a person better qualified to use these tools

for the public good than Dr. Graham, a professor at the Harvard School of Public

Health and the founder of the Harvard Center for Risk Analysis. In the years since

its establishment, the Center has provided invaluable research on regulatory health

and safety issues.

I am pleased to note that every single person, whether Republican or Democrat,

ever to hold the position of OIRA administrator—every person, that is, except for

two who are now federal judges and are quite properly prohibited from making such

endorsements—have signed a letter to you, Mr. Chairman, and the Ranking Member, on Dr. Graham’s behalf. In this letter, they urge us to act expeditiously, and

with an open mind because, in their words, ‘‘we are confident that [Dr. Graham]

is not an ‘opponent’ of all regulation but rather is deeply committed to seeing that

regulation serves broad public purposes as effectively as possible.’’ This statement

from the people who know the job best is clearly a powerful indication of Dr. Graham’s capability. It also highlights the non-ideological, nonpartisan, scholarly approach he will bring to OIRA.

Mr. Chairman, it is unfortunate that a few groups have decided to oppose Dr.

Graham’s nomination not by engaging in debate about his beliefs and positions but

by attacking his personal character, and that of his academic colleagues at Harvard.

Rather than discussing the merits of his analysis, his critics have tried to insinuate

that he is somehow ‘‘corrupt’’ because, like most academic institutions, the Harvard

Center accepts private donations from industry groups.

Those who make such criticisms clearly know little about the Center. The Harvard Center, after all, receives considerable public funding too, and has tougher conflict-of-interest policies than that of Harvard University as a whole. The Center is

funded both by private industry and by the government’s own regulatory and research agencies, including such organizations as the Environmental Protection

Agency, the National Science Foundation, and the National Cancer Institute.

Measurement of the effectiveness and efficiency of government regulations makes

good sense. And it is ludicrous to suggest that rigorous analysis of government laws

and regulations is somehow against the public interest. But to undertake such study

is all that Dr. Graham has done.

After all, Dr. Graham is hardly an opponent of well-crafted, common-sense regulation. He has sounded the alarm, for example, over the deteriorating quality of indoor air quality in this country—a subject that has been virtually forgotten in our

debates over clean air standards. Dr. Graham has also been an advocate of such

conservation measures as the higher gasoline tax and tax credits for those who purchase vehicles utilizing a variety of energy saving devices. He was also a supporter

of efforts to regulate particulate matter. Are all of these the positions of a man

whose scholarly views have been ‘‘captured’’ by private industry? Clearly not.

24

1 Article from Plastic News dated May 7, 2001, appears in the Appendix on page 349.

In closing, Mr. Chairman, allow me to make a few observations:

• Were Dr. Graham not strongly in favor of effective safety regulations, the American Trauma Society and the Task Force for Child Survival and Development

would not have sent strong letters in support of his nomination—but they did.

• Were Dr. Graham not strongly in favor of effective regulations to protect Americans’ health, the President of the American Council on Science and Health

would not have informed me that Dr. Graham would be an outstanding OIRA

administrator—but she did.

• Were Dr. Graham not superbly qualified for this position, he would not have

drawn the praise of every former OIRA administrator legally permitted to give

it, and he would not have won a rousing chorus of endorsements from scholars

of all political persuasions and from many different disciplines—but he has.

Mr. Chairman, I am confident that, at the end of the day, the American people

will be impressed not only with Dr. Graham’s qualifications and experience but also

with his willingness to leave academia for the public service.

Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much. I don’t know

whether to call on the Ranking Member or the gentlemen that has

been here longer.

Senator LIEBERMAN. I yield.

Chairman THOMPSON. All right. Senator Durbin.

OPENING STATEMENT OF SENATOR DURBIN

Senator DURBIN. Thank you, Mr. Chairman.

Dr. Graham, thank you for joining us today. I am happy that you

came by my office and we had an opportunity to meet. I have not

made any secret of the fact that I am going to oppose your nomination, and I hope, during the course of asking questions here, you

will understand the misgivings I have about your appointment to

this position. I do not think many people understand the importance of this position, but there are some who do. This position has

been characterized as really the gatekeeper for rules and regulations related to public health and safety in our Nation.

In the testimony of Joan Claybrook, that was before this Committee, she has stated, ‘‘In theory, the OIRA director should serve

as an honest broker, reviewing regulatory proposals from Federal

agencies and deferring to agency expertise on the most technical

and scientific matters. Federal safeguards on industrial chemicals,

fuel economy standards, air and water pollution, tobacco regulation, implementation of a Patient’s Bill of Rights, and virtually

every other issue that is critical to human and environmental

health fall under the office’s purview.’’

She goes on to say, ‘‘Under the Paperwork Reduction Act, no government agency can gather information from 10 or more entities,

a request which is often essential for research that justifies regulation, without the approval of this office. Through these mechanisms, OIRA can slow, stall, weaken or stop regulatory proposals

and final rules that the regulated industry opposes.’’

How does industry view this appointment? Well, an article 1 in

Plastic News, May 7, 2001, is headlined: ‘‘Bush’s OIRA appointee,

Graham, could lend clout to plastics,’’ and they go on to say, ‘‘The

job sounds boring and inside the Beltway, but the office can wield

tremendous behind-the-scenes power, because it acts as a gateVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
25

keeper of Federal regulations ranging from air quality to

ergonomics. It has the power to review them and block those that

it chooses to.’’ They go on to say in this article, ‘‘The Harvard Center for Risk

Analysis, which Graham founded and directed until Bush nominated him, gets a significant part of its $3 million annual budget

from plastics and chemical companies.’’ This is all from the Plastic

News article: ‘‘The Center’s donor list reads like a Who’s Who of

the chemical industry,’’ and they go on to list some of the sponsors

of Dr. Graham’s institute. Graham is well-thought of by the plastics industry. Persons from that industry said, ‘‘The Bush Administration intends to make OIRA more important than it was in the

Clinton Administration, elevating it to its intended status.’’ This

gentleman, Mr. Freeman, says, ‘‘They have a big stick if the President in office allows them to use it, and if they have someone in

the office who knows how to use it.’’ I ask this article be made part

of the record, Mr. Chairman.

Chairman THOMPSON. It will be made part of the record, without

objection.

Senator DURBIN. Mr. Chairman, I am troubled by a number of

the things that Dr. Graham has done in his professional career. I

think he has, in many aspects of his job, trivialized environmental

problems that face our Nation. I hear from my constituents every

day about their environmental concerns. The number one web site

in the Federal Government at the EPA is the web site that parents

visit every day to see if there is an ozone or smog warning, because

they have children who are asthmatic. I know about these families.

I think virtually all of us know someone who is suffering from asthma. When you talk about regulations relative to air pollution, regulations which Dr. Graham will ultimately review and stop if he disapproves, we can understand it is literately a matter of life or

death.

When a rural couple wonders about their tap water and whether

our national drinking water standards for arsenic and other chemicals will give them adequate protection, the final word may rest

with Dr. Graham, if he wins this appointment. From a shopper in

Chicago, writing to me about pesticides on food, to families all

across America, they may not know what OIRA stands for, but decisions made in that agency will affect their lives. I have detected

an attitude in Dr. Graham’s work and writings that troubles me

greatly. He has made the case that a little bit of dioxin might be

good for you; that pesticide residues on food should not be taken

all that seriously, that reducing smog might be a mistake because

it would let in more damaging rays from sunlight; that banning

DDT might have been a mistake; that environmental regulations

can actually cause deaths, rather than prevent them.

I know you are going to find some of the things I have just said

incredible. I will present some of Dr. Graham’s actual quotes and

will give him a chance to respond to them during the course of this

hearing. I would like to ask that the entire statement be made part

of the record, and save my remaining time for questions, Mr.

Chairman.

Chairman THOMPSON. It will be made part of the record, without

objection.

26

[The prepared statement of Senator Durbin follows:]

PREPARED STATEMENT OF SENATOR DURBIN

The word most often used to describe the office to which Professor Graham has

been nominated—the Office of Information and Regulatory Affairs—is ‘‘obscure’’. Few are aware of OIRA, or of just how powerful the position of ‘‘regulatory czar’’ really is. But this office—this senior White House staff position—exercises enormous

authority over every major federal regulation that the government has under consideration. Because of this, the OIRA Administrator must have a commitment to evenhandedness, objectivity, and fair-play in analyzing and presenting information about

regulatory options.

John Graham came by my office a few weeks ago for a courtesy visit, which I appreciated. Before that meeting I reviewed his extensive public record, his many articles, speeches and the numerous times he has testified before this and other Congressional committees.

It is Professor Graham’s public record that troubles me—these many statements

over the years that have minimized and trivialized environmental problems and

have been dismissive of public concerns. His research work was worrisome—research that seemed to stretch the available information out of shape, in order to repeatedly reach the conclusion that we don’t need regulations for air pollution or

water pollution or pesticides. I’m troubled, as well, by the number of times Professor

Graham worked too closely with industrial funders of his work, in order to advance

a specific agenda at the expense of objective scholarship and the public interest.

I’d like to lay out in more detail a few of the areas that are of particular concern

to me.

TRIVIALIZING ENVIRONMENTAL PROBLEMS

I hear from my constituents every day about their environmental concerns. From

the young mother whose son has asthma, and can’t go out to play on smoggy days.

From a rural couple wondering about their tap water, and whether our national

drinking water standards for arsenic will give them adequate protection. From a

shopper in Chicago writing to me about pesticides on foods. I take every letter,

every call, every concern very seriously.

I detect a very different attitude at work in Professor Graham’s writings and

statements. He has made the case that a little bit of dioxin might be good for you

. . . that pesticide residues on foods are not a serious health threat . . . that reducing smog might be a mistake because it would let in more damaging rays from sunlight . . . that banning DDT might have been a mistake. That environmental regulations can actually cause deaths, rather than prevent them.

I’m not sure how someone holding those views could look at a regulatory proposal

to reduce the levels of arsenic in drinking water and decide that it would be a good

thing for society to do. Following Professor Graham’s logic, a little bit of arsenic may

be good for us as well.

It’s not just environmental issues either. Professor Graham’s work has been broad

ranging, to say the least. In one study he concluded that safe housing regulations

can lead to excess deaths. In another, he found that the use of cell phones while

driving—which, by his own estimates cause 1,000 deaths per year—shouldn’t be regulated since the benefits of cell phones outweigh the costs.

And I’m also troubled by what strikes me as a very dismissive attitude towards

the American people. According to John Graham, we are ‘‘paranoid’’, ‘‘neglectful’’,

‘‘dysfunctional’’, and generally ill-informed and over-emotional. In one article, Professor Graham talked about America’s ‘‘emotional gush’’ in the aftermath of the high

school shootings in Littleton, Colorado, arguing that it might divert us from the real

dangers that our children face.

Violence in schools is one of the real dangers that our children face, every day.

PUBLISHING MISLEADING, ANTI-REGULATORY RESEARCH

I also have concerns about the nature of many of Professor Graham’s research

projects. They all seem to support—sometimes directly, sometimes indirectly—the

message that government regulations are a bad idea. And many of his results simply strain credibility. Regulations are killing 60,000 people a year through a process

he calls ‘‘statistical murder’’! Environmental regulations are forcing our country to

spend million, billions . . . even trillions of dollars to save a single life! Saving five

lives would cost us our entire Gross Domestic Product. I just don’t see how any legitimate scientific analysis can reach these exaggerated conclusions.

27

And others have the same problem. Lisa Heinzerling is a well-respected Law Professor at Georgetown University who submitted testimony to today’s hearing. I commend her testimony to all my colleagues, and wish that Professor Heinzerling were

here to deliver it in person. She writes that the claims Professor Graham has made

regarding the cost of regulations, in terms of both dollars and human life, are ‘‘exceedingly problematic, for three basic reasons....’’

—‘‘they misrepresent the output of the current regulatory system;’’

—‘‘ignore many of the benefits of Federal regulation;’’

—‘‘and rest on controversial moral judgments about whose life is worth saving.’’

This last point is particularly troubling, because it involves the practice of ‘‘discounting’’ human life in exactly the same way economists discount money—a life

saved or a dollar earned today is much more valuable than a life saved or a dollar

earned in the future. Discounting makes sense for dollars. But it only trivializes the

value of the lives of our next generation, and creates a built-in bias against environmental regulations meant to provide protections over the long term.

Dr. Heinzerling points out a fact in her testimony that startled me. Of the most

expensive environmental programs that Professor Graham identified in his research, none of them were ever implemented! Where he says we spend hundreds

of billions of dollars, we actually spend zero dollars, because these are programs

that do not exist.

I asked the Congressional Research Service to look into the most expensive program that Professor Graham identified—chloroform standards that cost $99 billion

for each year of life saved. Their response—this was a ‘‘hypothetical’’ case study

never proposed, nor even considered for proposal.

There are organizations that absolutely love research results that show billions

of dollars being wasted by unnecessary environmental regulations—groups like the

Cato Institute, the Heritage Foundation, and the American Enterprise Institute, all

of whom have made use of Professor Graham’s results to strengthen their anti-regulatory arguments.

And perhaps this may be the result of how they’ve used the information, rather

than his research itself, but the end result has been to inject a great deal of misinformation into the regulatory reform debate about what the true costs and benefits

of Federal regulations actually are.

CONFLICTS OF INTEREST

Which leads me to the last area of concern: How the work Professor Graham does

so neatly supports the very agendas of the organizations that support his work.

There have been troubling charges of conflict of interest. Many of Graham’s own colleagues from Harvard University have written this Committee alleging:

‘‘. . . a persistent pattern of conflict of interest, of obscuring and minimizing dangers to human health with questionable cost-benefit analysis,

and of hostility to governmental regulation in general....’’

Some of the specific instances cited include soliciting funds from Philip Morris at

the same time Professor Graham was writing a chapter on tobacco risks he invited

Philip Morris to review in draft form. He returned funds received from Philip Morris

as a violation of University ethics policy, yet solicited and received funds from Kraft

Foods, a subsidiary of Philip Morris. His research on cell phone use while driving,

critics charge, is patently designed to please the corporate sponsors of the study.

These concerns are broadly shared, which is why this nomination—to what would

ordinarily be an obscure and non-controversial position—has generated so much opposition. Groups opposing this nomination include advocacy groups such as NRDC

and OMB Watch, as well as labor unions, academics, health professionals, and public health organizations like the Center for Children’s Health and the Environment

at the Mount Sinai School of Medicine in New York.

We need to hear more about these possible conflicts in the course of this hearing.

Professor Graham, I look forward to the opportunity to engage you on these issues.

Chairman THOMPSON. Senator Bennett.

Senator BENNETT. Thank you, Mr. Chairman.

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1The prepared statement of Joan Claybrook appears in the Appendix on page 366.

OPENING STATEMENT OF SENATOR BENNETT

Dr. Graham, we welcome you here. I have read Joan Claybrook’s

presentation.1 I have also read the refutation of that presentation

submitted by David Hemingway, Ph.D., Professor of Health Policy,

and Director of the Harvard Injury Control Research Center. If I

may quote from Dr. Hemingway’s cover letter of that refutation,

not that this should be dispositive, but unfortunately, in this arena,

this has to be said, ‘‘I am a public health professional and a Democrat. I agree with John’s conclusion on many issues and disagree

on some, but I have always respected his science and his integrity.

I think the current administration in Washington has made some

terrible decisions. However, I believe the appointment of John

Graham is one of its best ones. John will serve the Nation well. I

do not know of a more appropriate person to be appointed to oversee regulatory issues at OMB.’’ Joan Claybrook spends most of her time quoting newspaper articles. There is no indication that her special-interest group, Public

Citizen, has ever examined, to the degree that David Hemingway,

a colleague at Harvard, has examined the actual work of this nominee. She spends a great deal of her time complaining about those

who have contributed money to Harvard University, on the

grounds that by contributing money, they have somehow poisoned

the well at Harvard and every professor who teaches there. I would

be more impressed if, in her special-interest group, Joan Claybrook

would disclose her sources of funds. We have no idea who paid for

the statement she compiled and put together, what other specialinterest groups have combined behind the cloak of her special-interest group to launch this assault on the integrity of this nominee.

She and her colleagues have every right to attack the integrity

of the nominee, but we as Senators must pay attention to those

who know him best and to those who know the job best. Those who

know the job best have unanimously endorsed this nominee, including those who held the job under President Clinton. Those who

know the nominee best, his colleagues at Harvard, have unanimously endorsed this nominee. I was unaware that Harvard was

part of the vast right-wing conspiracy, but apparently it is, in some

circles here.

Finally, Mr. Chairman, I remember when Joan Claybrook and

Public Citizen told us of the tremendous number of deaths that

would occur on the highway if the Congress were to raise the speed

limit. Congress allowed the speed limit to be raised and the deaths

did not materialized. As a matter of fact, the number of deaths per

mile driven went down after the speed limit was raised. So I feel

that we are seeing an attempt here to attack a public citizen in the

name of public citizens, who, if he is confirmed, will render superb

service.

Will he be right every time? Of course not. None of us is, including, if I may be so bold, even me. But given the track record that

he has accomplished in his academic life, given the endorsement

that has been given him by his colleagues at a university that some

suggest is our leading university in the United States, given the

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formed this job under different Presidents and in different political

atmospheres, I think it is incumbent upon this Committee to give

a strong vote for this nominee, and send him to the floor with our

endorsement.

Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much. Senator Lieberman.

Senator LIEBERMAN. Thanks, Mr. Chairman. First, I want to object to Senator Bennett’s conclusion that Harvard is our leading

university.

Chairman THOMPSON. I am glad you are sticking up for Vanderbilt. I appreciate that. [Laughter.]

Senator BENNETT. I will be happy to recant that statement.

Senator LIEBERMAN. We think of Vanderbilt as the Yale of the

South.

OPENING STATEMENT OF SENATOR LIEBERMAN

Senator LIEBERMAN. Thanks, Mr. Chairman. Well, we could use

a little levity today.

Thank you, Dr. Graham. This, as my colleagues have said, is a

very important nomination because of the importance that OIRA

holds in our governmental system. It is, as Senator Durbin said,

very little-known, but casts a very large shadow and footprint

across the workings of our government, particularly in what I

would call the protective aspect of our government. I mean, after

all, we, in the Legislative Branch, adopt laws which presumably

are an attempt to express our values, to draw lines between what

is right and wrong, what is acceptable and unacceptable, what is

desirable and undesirable in our society, and we leave many of the

details, because it is impossible to cover every situation through

law, through legislation, that may be effective, and we leave the details to the regulatory process.

Particularly in the protective aspect of government, which is one

of our most important roles, that regulatory part of the process is

critically important. And what do I mean by protective? The obvious, which is that there are dangers that face people in our society,

in our country, every day, that are so large or in other ways so difficult for individuals to respond to, that the government has a responsibility to do so. And this is not big government, this is protective government, and I think, in many ways, though I cannot cite

a particular public opinion survey on this, the most desired, accepted, and supported aspect of our government.

Let me be specific. We have talked about environmental protection as a broad, bipartisan ethic in our society. I think about the

importance of protecting the environment, the critical role that

government plays in that. The other aspect of what we call environmental protection, but is really people protection, which is protecting people from the adverse consequences of environmental pollution, whether it is, as Senator Durbin said, the impact on an

asthmatic child or an older person with respiratory problems of air

pollution, whether it is the dangers associated with polluted water,

or, in another sense, the natural resource sense, the role that regulation plays in protecting some of the great natural treasures that

the good Lord has given us here in the United States.

30

So this is a very important part of government, and OIRA is the

gatekeeper. It is at the center of this process. In recent years,

OIRA has reviewed regulations to ensure that the agency has adequately defined the problem, considered non-regulatory alternatives, assessed available information on risks, costs and benefits,

and consulted affected parties before those regulations can go forward to publication and full effectiveness. So this is an important

position.

Because of what you have written and said, and, in some sense,

done, so far as you have been an activist or involved in preparation

of legislation, or testimony, your nomination has, I think, quite predictably become controversial, and based on your writings, because

they do raise questions, it is a provocative nomination. It is, I

think, all the more controversial at this particular moment because

of the anxiety that is felt in different parts of our population in our

country, about early first steps that the Bush Administration has

taken with regard to protective regulations, beginning with a memo

issued by the Chief of Staff to the President, Andy Card, the socalled Card memo, holding up a number of regulations that were

issued by the Clinton Administration. And then some of the actual

acts, the most controversial ones, such as the regulation with regard to the tolerable amount of arsenic in drinking water, and, of

course, this is of wide concern, because the reason there is a limit

placed is because at least some science and medicine says that arsenic in drinking water can cause cancer. So, in that context, based

on your body of work and opinion, I think this nomination, your

nomination, has actually raised more anxiety than it might have

had those actions not preceded it.

But I think we have an obligation to try to be fair to you, and,

I suppose, not to punish you because you have written or thought

or spoken in ways that are different or provocative. I have always

felt, as I presume most of my colleagues do, that our role in the

advice and consent power in the Senate that the Constitution gives

us is not to decide whether we would appoint a nominee, but

whether the nominee is the appropriate choice for the position to

which he or she has been nominated, and it is that standard that

I am going to hold myself to as I consider your testimony today and

the cumulative evidence that is presented to us about your nomination.

So I look forward to your testimony and to the question period,

and I thank you very much for responding to the pre-hearing questions, voluminous as they were, that I and others submitted to you.

Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much. Senator Carper, I

believe you are next.

OPENING STATEMENT OF SENATOR CARPER

Senator CARPER. Thanks, Mr. Chairman, and to our nominee,

welcome today. I don’t know you, and I don’t believe we have ever

met, and I don’t know a great deal about you. I have heard today

from colleagues here whom I respect enormously who seem to feel

that you are an excellent nominee. And I have heard from a colleague who I also respect enormously who has raised serious questions about your nomination.

31

I will be very brief. I just want to say that I think we all agree— I am sure you do as well—character is terribly important. There

are few qualifications that are more important, maybe none, with

respect to those who come before us for our consideration. Integrity, which is closely related to character, is just vitally important.

I hope in your comments today and in the opportunities we have

with questions that you will just address very directly the concerns

that have been raised about you, your character, and some of the

work that you have been involved in in ways that will dispel some

of the concerns that have been raised.

Again, we welcome you today and your family. We thank you for

your willingness to serve, and we look forward to this hearing.

Chairman THOMPSON. Senator Akaka.

OPENING STATEMENT OF SENATOR AKAKA

Senator AKAKA. Thank you very much, Mr. Chairman. I wish to

add my welcome to Dr. Graham and his family.

In 1986, Congress voted to make the Administrator of the Office

of Information and Regulatory Review a presidentially appointed

position. The action was taken because of the lack of transparency

in the office’s operations and an erosion of trust between OMB and

Congress.

Given OIRA’s wide-ranging authority over Federal regulation

and information, there is a tremendous potential for abuse and a

disregard for the technical expertise in decisions made by Federal

agencies. The possibility of abuse remains, and the questions continue. How much weight should be given to cost/benefit assessment? And how should it be applied? Should all costs and benefits

be lumped together in calculating cost/benefit ratios? Should distinctions be made between costs borne by industry versus private

citizens or benefits gained by children as opposed to senior citizens?

It is in this light that I will view the nomination of Dr. John

Graham. I want to know if he supports open and transparent reviews of rules and regulations and regular communications with

Congress. I want to know if he would return OIRA to the 1980’s

when regulations went into a black hole and never came out again.

The regulations that OIRA reviews affect everyone in Hawaii and

throughout the Nation. OMB and OIRA must be able to assure all

stakeholders that their voices will be heard during the consideration of regulations. I want to be assured that transparency and accountability of the regulatory review process within OIRA, as supported by OMB Director Daniels during his confirmation hearing

before this Committee, will be maintained. Openness and public

participation must be the cornerstones of Federal rulemaking.

This is my statement, Mr. Chairman, and thank you very much.

Chairman THOMPSON. Thank you very much.

Senator Bennett, you made your comments earlier, didn’t you?

Senator BENNETT. Yes. I have some questions at the appropriate

time.

Chairman THOMPSON. All right.

Dr. Graham, let me start off by thanking you for offering yourself

to public service and to the ordeal to which you are about to be introduced.

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Certain questions, of course, have been raised concerning potential conflicts of interest that the Harvard Center might have, although the Harvard Center is almost unique in having specific conflict of interest rules for its Center. Questions have been raised

about the fact that private money is taken for research, although

all similar institutions, the most reputable institutions in the country, do so. Questions have been raised about the source of your

funding, although you have a more extensive disclosure policy than

any other institution that I know, at least as extensive or more

than most, and certainly more than most of your critics have. So

we will have a chance to address all of those.

I must say, in sitting here just thinking about it, it is kind of

ironic for Congress to be criticizing someone for taking money from

somebody and then passing judgment on interests that have to do

with their business. We do that on a daily basis, and we have the

benefit of reading in the newspaper every time we pass some policy

decision who gave who the most money.

Now, even with campaign finance reform, that will still be the

case because large amounts of money are involved. At the same

time, we are making policy decisions with regard to those who just

gave us the money. So I don’t think we ought to get too high up

on our high horse with regard to that.

Obviously, one of the things we have to do with regard to addressing that institutional situation that apparently these research

centers find themselves in is to have rigorous disclosure. And it

seems to me that the Harvard Center has that.

I was impressed, particularly among all of the favorable comments that you received, by one of Robert Litan, who is vice president and director of economic studies at The Brookings Institution,

and a regulatory expert, who said, referring to you, ‘‘He’s one of the

most qualified people ever to be nominated for the job. He’s drawing opposition from people who oppose cost/benefit analysis itself

since he’s the leading practitioner.’’ I want to talk a bit about this cost/benefit analysis. As you proceed, it is true that you, anyone in your position, would have somewhat of a burden to overcome because of recent events and the

press treatment and so forth. After 8 years, the Clinton Administration on the way out the door put in certain regulatory requirements that even local Democratic officials in some cases would say

would break their municipality if they were implemented, so it was

obvious to me that they knew that a new administration would

have to look at those things.

So you are having to look at them now, and you are getting the

flack that comes from not just rubber-stamping whatever was done

as they went out the door. I like to think that we all have the same

interests in this country. We all have kids, and many of us have

grandchildren, and all of us are concerned about the air that they

breathe and the water that they drink. But we also realize that we

make cost/benefit judgments every day. If we wanted to pay the

price to save more lives, we wouldn’t have automobiles on the

streets. I don’t think it is anti-safety but, rather, pro-safety to point

out that seat belts or air bags are good things, but they can also

kill children. And you might want to look at ways of doing that better.

33

We have had that experience. It is not anti-environment to say

let’s quit spending so much money on a water requirement that

saves X number of lives and let’s spend more money on a water requirement that saves more lives. Those are trade-offs, it seems to

me, that are common sense and that we make every day. And you

have had the audacity to put it up front and acknowledge that we

do make those trade-offs and that they should be a part of the policy discussion. You have never been emperor or had the ability to

put these things into effect, but you have candidly given the benefit

of your research along with your colleagues. And most of these— I might point out, most of these reports that the Center has written, especially those with restricted funds, have been written with

one or two more of your colleagues, the ones that you have been

on, so very few of these things with restricted money have been

things that you have done alone.

But, clearly, this cost/benefit analysis has stirred passionate disagreement, even though there seems to be a consensus on the use

of regulatory analysis. Since the Carter administration, each President has required agencies to use regulatory analysis for important

regulatory decisions. President Clinton’s Executive Order on regulatory review looks a lot like President Reagan’s.

Why the passionate disagreement, do you think, over these regulatory issues? And explain to us and to the public your view of the

tools of risk assessment and cost/benefit analysis and why you

think it is important for responsible regulatory policy?

Mr. GRAHAM. Senator, I had a short opening statement, and I

wondered whether I should just pass it up and go to questions, or

how do you want to do that?

Chairman THOMPSON. You should go ahead and give it. In fact,

I am remiss in not calling on you to give it. So do that at this time,

if you would.

Mr. GRAHAM. The good news is I am going to cut it in half given

what has been said already.

Let me thank you, Chairman Thompson, Senator Lieberman, and

Members of the Committee, for the opportunity to provide a brief

opening statement. I am honored to be President Bush’s nominee

as Administrator of the Office of Information and Regulatory Affairs and look forward to the opportunity to work with each Member of this Committee. Some say that I am not practicing risk analysis in my own life since the risks of this job may end up exceeding

the benefits. Yet I take a more optimistic view and aspire to working on behalf of the public to improve the regulatory system.

If I am confirmed as OIRA Administrator, I will be making a

major change in my professional role and my responsibilities will

be different. I will no longer be an academic, advancing provocative

ideas, and will instead be responsible for enforcing the laws of the

land as Congress wrote them. I will advise the OMB Director and

the President on future legislation. I will implement the President’s

policies and advocate the President’s priorities. I will also lead a

team of fine analysts at OMB and work with Congress and the

public on issues regarding regulation and information.

I see my chief role as to stimulate more analytical thinking about

major regulatory decisions in the Federal Government—decisions

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nesses, and the public at large. My responsibilities will also include

paperwork reduction, information policy, and statistical policy.

Mr. Chairman, the subject of openness in regulatory review at

OMB has been a concern of this Committee for more than 15 years.

Progress has been made in recent years, and I pledge to continue

that progress while protecting the ability of OMB staff to do their

jobs efficiently. If confirmed, I will work to achieve regulatory reviews that are timely, transparent, and rigorous. I understand that

openness does not necessarily create agreement. Yet I also hope

that we will find issues where the spirit of openness permits dialogue and a narrowing of policy disagreements.

Since my nomination in March, some have charged that I and

the Harvard Center for Risk Analysis have a pro-business bias. I

respectfully disagree. Sometimes the findings of our studies have

supported the interests of sponsors, who happen to be business organizations. Sometimes the findings of our studies have supported

strict regulation of business. And sometimes our studies offer public health insight but do not really affect business interests one

way or another. Our Center has simply followed the scientific data

and analysis, wherever they have happened to lead us.

Thank you for the opportunity to make this opening statement,

and I hope we can proceed to questions.

Chairman THOMPSON. Thank you very much. Well, I will go back

to my question, and that has to do with your explanation of the

tools of risk analysis and cost/benefit analysis, why you think they

are important, and why the passionate disagreement with regard

to those issues that I described earlier.

Mr. GRAHAM. Senator, I see the purpose of these analytic tools,

like risk analysis and cost/benefit analysis, not necessarily to create fewer regulations or more regulations, but to create a smarter

regulatory system, one that can save more lives and protect the environment more effectively but at lower cost than we are currently

doing now.

For 20 or 30 years there has been concern in the public interest

community about these analytic tools, but I think what we have

shown in our prior scholarship in this area, not just myself but

other people in this field, is that these analytical tools can be a

force for more protection at less cost than we’re achieving today.

Chairman THOMPSON. You have written a lot about the need to

make more efficient regulatory decisions. That sounds rather hardhearted. Why do you think that is important when you are dealing

with lives and safety of people?

Mr. GRAHAM. Right. Well, one way to think about this is that if

we, as a society, don’t invest our resources in life saving or in environmental protection in the areas where they can do the most good,

then we have foregone the opportunity to spend those same resources to save more lives or do more for the environment.

Chairman THOMPSON. Is this based on the assumption that we

as a Nation, regardless of what we say, are not willing to make unlimited resource commitments to every danger, every threat to

safety in this country?

Mr. GRAHAM. Yes, sir. I am fond of telling my students that, if

we have unlimited resources in these areas, there isn’t any need

35

for risk analysis, there isn’t any need for cost/benefit analysis, because we can simply tackle all these problems.

Chairman THOMPSON. Are equitable issues often important to

the consideration of making regulatory decisions?

Mr. GRAHAM. Yes.

Chairman THOMPSON. Is considering efficiency inconsistent with

considering fairness, for example?

Mr. GRAHAM. Well, I think that there are different dimensions of

equity and fairness, and often times one needs to consult the underlying laws or statutes passed by Congress to understand what

is the nature of the equity or fairness claim that Congress has insisted be honored. And once that is done, then one can look at what

is an efficient way to accomplish the protection of fairness. So, yes,

I think fairness and equity are important.

Chairman THOMPSON. All right. We have several Members here

today, so we are going to proceed with Senator Lieberman.

Senator LIEBERMAN. Thanks, Mr. Chairman.

Dr. Graham, as you know, some who oppose your nomination

have argued that your methodology essentially stacks the deck

against many pollution control, employee protection, and other environmental measures. So to help me understand and evaluate

their concern, I want to quote from an article that you wrote that

was published in 1995 and then ask some questions off of it. And

this is an article published by the National Center for Policy Analysis called ‘‘Comparing Opportunities to Reduce Health Risks:

Toxin Control, Medicine and Injury Prevention.’’

In this article, you compare the cost effectiveness of a number of

different kinds of public health programs, and as I read it, you

reached two basic conclusions. First, you reported that the average

toxin control program costs much more than the average medical

or injury prevention program, and you gave as an example that we

spend $115.6 million per year on benzene emission control during

waste operations to save what you call 5 life-years—we can get into

life-years a bit if you want—while the same spending, the same

amount of money spent on collapsible steering columns in cars

saves 1,684 life-years. Then the second conclusion that I see in the

article is your recommendation that the private sector should not

be required to spend so much money on these cost-ineffective requirements to control toxic pollution.

So I have a few questions that I want to ask off of that, and the

first is that it seems to me that in comparing costs and benefits,

your study doesn’t seem to consider the question of whose costs and

whose benefits.

I am going to go now to, I believe, advocacy that you made in

an article, that OIRA should use its regulatory review authority to

promote what you have called more rational priority setting. I

think it is consistent with the article that I just quoted. As an example of this, you suggested that OIRA should promote arrangements where an oil refinery might be allowed to release more of a

toxic pollutant in return for its commitment to fund AIDS prevention or violence prevention programs. Now, those are—I used the

word earlier—very thought-provoking ideas, but the question I

wanted to ask you to respond to is: How would such an approach

help protect the health of, for instance, a family who lives next to

36

the oil refinery? In other words, in making what is—well, in one

sense is an apples-and-oranges comparison, but a comparison of

different kinds of threats, even if your analysis leads you to think

that one is more cost efficient than the other, or there is a tradeoff, for instance, between the health of someone living next to an

oil refinery affected by air pollution and the health of someone suffering from AIDS or injured by violence, what answer does society

give to the victims who, as a result of your cost/benefit analysis,

we would not help?

Mr. GRAHAM. That is a very complicated and well-framed question, and I will try to give a short answer, which is, I do think you

can make a fairness or equity objection to the idea of allowing some

of the additional emissions at the plant in exchange for the violence

prevention and AIDS prevention.

The only qualification I might make is that, if you could save a

sufficiently large number of lives from violence prevention and

from AIDS prevention, even in the neighborhoods near that facility,

you might be able to persuade people that it is worthwhile. But I

think basically your argument is correct that you can make an

equity objection against that kind of trade.

Senator LIEBERMAN. Yes, that is my concern, and that in some

senses the rational priority setting that you have advocated is, dare

I say, too rational or so rational that it becomes to those who don’t

make it past the cost/benefit analysis cruel or uncaring or inhumane.

The study that I referred to earlier seems to suggest that our

willingness to forego increased protection in the safety and medical

areas is a reason not to protect ourselves against toxins. So let me

ask you specifically, as we consider your nomination: Would you,

if you became the Admistrator at OIRA, reject a rule, for example,

submitted by the Environmental Protection Agency because you

concluded that there were more cost-effective ways to save lives in

other areas unrelated to the particular rule that was submitted to

you for review?

Mr. GRAHAM. Well, Senator, I think it would possibly depend

upon the underlying statutory and legal framework that the agency

is operating under when they make that proposal. It may be that

it is not even relevant, that they could, in fact, save lives through

doing something very different or another part of the Federal Government could save more lives. If they’re operating from a statutory framework that says they’re going to address this particular

drinking water problem or clean air problem, then I think it’s

OIRA’s responsibility to review the proposal in the context of that

legal or statutory framework.

Senator LIEBERMAN. So that you would not apply the kind of

cost/benefit analysis that you have advocated in your writings and

statements in that case?

Mr. GRAHAM. I think that the kind of priority setting—and I

refer to it as risk-based priority setting—that I have advocated, I

see it as more appropriate in the front end of both the legislative

and the regulatory process. I don’t see it as appropriate after an

agency has already made a determination that an area is a priority, a rule is being developed. I think it’s a little late in the game

37

to try to be constructive at that point by saying, well, you should

be writing some other regulation.

Now, there are ways under the Executive Order, the existing Executive Order, to stimulate the front-end priority setting I’m talking about.

Senator LIEBERMAN. Tell me what you mean by the front end of

the regulatory process. I understand what you meant about the legislative process in considering these kinds of trade-offs, but what

do you mean by the—— Mr. GRAHAM. Well, under the Executive Order, there are requirements that agencies lay out their plans for regulation over the next

year, for example, and there can be dialogue at that stage. There

can also be decisions in the budgeting process as OMB works with

agencies on how they’re going to spend their resources. So those I

think are areas where there is room for some discussion about

these issues.

Senator LIEBERMAN. Let me approach the question of comparative risks or comparing risks, and if one risk seems to be susceptible to more cost-effective response, then you might pull away

from responding to the other risk even though there are people

whose health is being adversely affected by those risks.

You have said in some of your work that EPA often addresses

the wrong priorities, such as one example you have given as outdoor air pollution where you believe that the worst risks involve indoor air pollution, for instance, from wood stove smoke.

However, I am obviously not the only one who would be troubled

if you at OIRA were to encourage or even require EPA to weaken

its regulatory initiatives for outdoor air pollution because you believe that the resources would be better spent on more efficient programs.

So let me ask you now whether you can provide assurances that

you would not do this without express statutory authorization if

you are confirmed as OIRA Administrator.

Mr. GRAHAM. Well, at the end of your comment and question, you

asked about the need for express statutory authorization, and I

guess I shouldn’t suggest that I really know the legal necessities

in that regard. I do want to respond to your basic point, though,

with an example of a case where two agencies could be interested

in clean air, say EPA interested in outdoor air and OSHA interested in indoor air. And there have been cases where a proposal by

EPA to reduce outdoor air pollution caused some of the pollution

to be captured and concentrated indoors and created a concern for

the Occupational Safety and Health Administration.

I do think it’s appropriate for the Administrator of the Office of

Information and Regulatory Affairs to try to identify these potential conflicts between agencies and seek some kind of resolution.

Senator LIEBERMAN. I hear you, but barring that kind of direct

conflict, can you assure us that, for instance, you would not question EPA regulations on outdoor air pollution because you conclude

on your own cost/benefit analysis or risk analysis that it would be

a better use of their resources to focus on indoor air pollution?

Mr. GRAHAM. I think this runs back to your previous question,

which is where is the appropriate place in the process, the appropriate forum for risk-based priority-setting analysis. And I would

38

like to see it more at the front end, both legislative process and

budgeting process and regulatory calendar at the beginning of the

year. I don’t think—once an agency has identified an area as a priority under its existing statutory framework, has proposed a regulation to OIRA, has invested that energy, I’m not sure at that stage

it’s appropriate to be engaging in the kind of dialogue you’re talking about.

Senator LIEBERMAN. My time is up on this round. I guess I would

say very briefly, before I get another chance to question you, that

one of the concerns that has been raised is whether—almost as a

result of both your orientation, your skeptical orientation about

some regulations, and your intellectual acuity—that you would be

asking so many questions, including at the front end, that there

would be—and this is not my phrase, but others—that in the regulatory process of the Federal Government there would be what others have called paralysis by analysis. And I do think that it is a

fair question, and on my second round, I am going to ask you that.

Thank you.

Chairman THOMPSON. Something we have some familiarity with,

don’t we?

Senator LIEBERMAN. Yes.

Chairman THOMPSON. Senator Voinovich.

Senator VOINOVICH. How familiar are you with the regulatory aspects of the unfunded mandates relief legislation and what do you

think about them? Are you familiar with the current President’s

Executive Order, and what do you think of it? And then the last

question is: Do you think that the former administration followed

the provisions of both the unfunded mandates relief legislation, the

regulatory portion of it, and the President’s Executive Order?

Mr. GRAHAM. Well, let me just briefly comment on the Unfunded

Mandates Act, which I understand to be a requirement that when

the Federal Government imposes significant regulatory requirements on State and local governments, and it may cover private

businesses as well, that there needs to be some analysis of what

the costs and benefits are. And I have not studied in detail the actual implementation of the Unfunded Mandates Act. If I’m confirmed, it’s definitely an area where I would like to spend some

time actually looking at how well these analyses are done and determine their impact on actual decision making. I would elicit some

feedback, for example, from State and local governments on how

they feel the implementation of those provisions have been.

On the Executive Order, I have not engaged in any detailed

study of how the existing Executive Order that was adopted at the

beginning of the Clinton Administration, how, in fact, it’s actually

been implemented. So I can’t really comment on that, and I don’t

have any plan to recommend any specific change to the Executive

Order at this time.

Senator VOINOVICH. So you are not familiar with how they honored either the regulatory aspect of the unfunded mandates relief

legislation or the Executive Order?

Mr. GRAHAM. I’m sorry. The first part of your question, how they

did what?

Senator VOINOVICH. In terms of whether or not they honored

the——

39

Mr. GRAHAM. The previous administration?

Senator VOINOVICH. The previous administration honored—— Mr. GRAHAM. I haven’t done a careful study of how much they’ve

honored it, no.

Senator VOINOVICH. Well, we have, and we have lots of testimony—— Mr. GRAHAM. I suspect you’ll inform me.

Senator VOINOVICH. And if you get the job, I am going to at least

share with you some of the concerns that we have had in terms of

the provision that said any regulation over $100 million ought to

be looked at from a cost/benefit point of view before it is implemented, and also the area of both President Clinton’s and President Reagan’s Executive Order in terms of cost/benefit analysis.

I just want to mention this: You are being attacked to a degree

because some of the stuff that you have written and said was allegedly colored by contributions to your Center.

You have expressed concern, for example, that many chemicals

in widespread use have not been tested for their cancer-causing potential. You objected to this practice and advocated a new approach

of assigning default cancer potency numbers to chemicals until

they are tested. And yet you have received money at the Harvard

Center from chemical producers.

Particulate air pollution, another example is something that I am

very interested in. You supported the work of the Harvard Center

team making the case for increased regulation to find particles in

outdoor air. You authored a commentary in the Harvard Center’s

newsletter highlighting the health risks of particulate exposure.

And in spite of the fact that you received support from a wide

range of industries, including energy, chemical producers, and

manufacturers, global climate change—something we just had a

major hearing on in another committee that I am a member of— you backed the hiring of a faculty member who is a specialist on

the economics of global climate change and have written papers

supporting the need for the United States and the world to take

long-term actions to slow the rate of global climate change. And

you said the United States should indeed take cost-effective steps

to demonstrate our seriousness about the global climate issue and

spur global policies. And you have received money from the wide

range of industries, including manufacturers, energy producers and

so forth. The same way with sports utility vehicles, you have indicated that there ought to be stricter safety measures and consumer

tax credits for environmentally friendly vehicles, and you received

money from the auto makers and the petroleum industry.

The point I am trying to make here is if you look at the record,

you do the job that you are supposed to do in the most objective

way that you possibly can. Do you want to comment on that?

Mr. GRAHAM. We tried. We try as hard as we can to maintain

objectivity, regardless of whether the funding source is an industrial source or a governmental agency source. And I do want to add

that our Center does get substantial funding from government

agencies like the Environmental Protection Agency, the National

Highway Traffic Safety Administration, the Department of Energy,

the National Science Foundation, the Centers for Disease Control,

and the U.S. Department of Agriculture. As the Center director, I

40

have aggressively sought to provide analytic support and advice to

Federal agencies as well as to the private sector.

Chairman THOMPSON. Thank you very much. Senator Levin, did

you want to make some opening comments?

Senator LEVIN. I will with my questions.

Chairman THOMPSON. OK. Senator Durbin.

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

Dr. Graham, when I look at your resume, I am curious. Do you

have any degrees or advanced training in the fields of chemistry,

for example?

Mr. GRAHAM. No, sir.

Senator DURBIN. Biology?

Mr. GRAHAM. No, sir.

Senator DURBIN. Toxicology?

Mr. GRAHAM. No.

Senator DURBIN. What would you consider to be your expertise?

Mr. GRAHAM. Well, I have a Ph.D. in public affairs from Carnegie-Mellon University with an emphasis in a field of management science called decision science. And at the School of Public

Health I teach analytic tools and decision science, like risk assessment, cost-effectiveness analysis and cost/benefit analysis.

Senator DURBIN. No background in medical training?

Mr. GRAHAM. No. I do have a post-doctoral fellowship funded by

the Environmental Protection Agency where I studied human

health risk assessment and had research experience in doing

human health risk assessment of chemical exposures.

Senator DURBIN. Does your lack of background in any of these

fields that I have mentioned give you any hesitation to make statements relative to the danger of chemicals to the human body?

Mr. GRAHAM. I think I have tried to participate in collaborative

arrangements where I have the benefit of people who have expertise in some of the fields that you’ve mentioned.

Senator DURBIN. But going back to the old television commercial,

‘‘I may not be a doctor, but I play one on TV,’’ you wouldn’t want

to assume the role of a doctor or public health expert when it

comes to deciding the safety or danger of exposure to certain

chemicals, would you?

Mr. GRAHAM. Well, I think our Center and I personally have

done significant research in the area of risk assessment of chemicals, and often times my role is to provide some analytical support

to a team, and then other people on the team provide expertise in

whether it be toxicology medicine or whatever.

Senator DURBIN. Based on that experience, have you come to a

conclusion as to whether exposure to dioxin can increase a person’s

likelihood of cancer?

Mr. GRAHAM. My involvement in the dioxin issue comes primarily from serving on two committees of the Science Advisory

Board of the Environmental Protection Agency, where I was asked

to be a member of roughly a 20-member team of scientists, where

we looked at the full body of data on human exposure to dioxin and

the toxicity of dioxin, and the beliefs that I formed were as a consequence of those experiences.

41

1The chart appears in the Appendix on page 352.

Senator DURBIN. Let me return to the question. Based on that

experience, do you believe that exposure to dioxin can increase your

likelihood of cancer?

Mr. GRAHAM. Thank you for reminding me of the first part of the

question. I think that at high dose in laboratory animals there’s

clear evidence that dioxin causes cancer.

Senator DURBIN. So do you—sorry. Go ahead.

Mr. GRAHAM. I was going to say, in humans I think that the

database is more mixed and difficult to interpret.

Senator DURBIN. So do you believe there is a safe level of exposure or accumulation of dioxin?

Mr. GRAHAM. I don’t know the answer to that question.

Senator DURBIN. I would like to bring up a quote which you have

made on this subject. If you would put that up, please?1 I show side

by side here two quotes from you and quotes from other sources on

the subject of dioxin. And I remind you that you have really told

this panel that you don’t have any special personal expertise when

it comes to the impact of chemicals on the human body. Your statement to the EPA Science Advisory Board, November 1, 2000, you

said, ‘‘It’s possible that measures to reduce current average body

burdens of dioxin further could actually do more harm for public

health than good.’’ And then you went on to say—and this is at the

same time—‘‘I think there would also be merit in stating not only

that TCDD’’—which is dioxin—‘‘is a carcinogen, but also I would

put it in the category of a likely anti-carcinogen.’’

Now, that is compared to what others have said on the right. The

National Institutes of Health: ‘‘Dioxin is a known human carcinogen.’’ And from EPA: ‘‘Exposure to low levels of dioxin over long

periods (or high-level exposure at sensitive times) might result in

reproductive or developmental effects. Those could include weakened immune responses and behavior changes in offspring.’’

Can you explain to me, are you suggesting in your second statement there that dioxin can either cure cancer or stop cancer when

you call it an anti-carcinogen?

Mr. GRAHAM. There are several studies available that show that

as dioxin exposures are lessened in both human populations and in

animals, that actually the carcinogenic effect that you see at high

doses disappears, and there does appear to be evidence of an actual

decline in cancer incidence. So there are some studies that suggest

that.

Senator DURBIN. And this would—I am going to ask you, does

this lead you to conclude, then, that we should not be aggressively

trying to stop the release of dioxin in the environment and the exposure of American citizens to dioxin?

Mr. GRAHAM. No, sir. In fact, in my service on these committees,

I have been aggressive at pointing out that there is actually more

compelling scientific information around a variety of non-cancer adverse health effects. Some of the reproductive and developmental

effects that you have, I think appropriately, quoted on that chart,

which would provide a sufficient rationale to continue reducing exposures to dioxin, even if the cancer risk issue were not settled.

42

Senator DURBIN. But isn’t it true, Dr. Graham, that at the Harvard Center where you work, you have testified rather consistently

to reduce the levels and standards when it comes to dioxin, for example, in the State of Maine, when you represented Georgia Pacific

and they talked about release of dioxin from paper and pulp mills?

Mr. GRAHAM. I believe, Senator, in the early 1990’s I served as

an expert witness for several law firms representing pulp and

paper companies. And I did not serve as an expert on the biology

or the toxicology or the risk of dioxin. I served as an expert on the

question of what are the different ways that the term ‘‘acceptable

risk’’ is dealt with in public policy, what is the notion of a significant risk or acceptable risk, for example, in EPA decision making.

Senator DURBIN. I will, of course, defer to the record, and I will

look at it again. But I recall your testimony in the State of Maine

was relative to the State standard for dioxin.

Mr. GRAHAM. It was in the context of the dioxin deliberation, yes.

Senator DURBIN. You were representing George Pacific, where we

know that the pulp and paper industry is a source of dioxin in the

environment. Is it not?

Mr. GRAHAM. I think so.

Senator DURBIN. You think so?

Mr. GRAHAM. Yes. You are talking about the effluent into the

water.

Senator DURBIN. Right.

Mr. GRAHAM. Yes.

Senator DURBIN. Do you think so or do you know?

Mr. GRAHAM. Now that you remind me, I know so.

Senator DURBIN. Thank you.

Who supports your position that lowering the level of dioxin actually decreases the incidence of cancer?

Mr. GRAHAM. I can give you a copy of the studies that I referred

to in the Science Advisory Board deliberations, and I would be

happy to share those with you. And this issue was discussed collectively within the Committee, and there was spirited dialogue, I can

assure you, after I introduced those particular studies. Some of the

scientists criticized them. Other ones said that they’re valid.

Senator DURBIN. You were on the EPA Science Advisory Board,

if I am not mistaken.

Mr. GRAHAM. Correct.

Senator DURBIN. And they deliberated for some 10 years on questions related to dioxin. Is that true?

Mr. GRAHAM. Yes, I think they have been studying dioxin in one

way or another for probably longer than that.

Senator DURBIN. And are you still participating in that process?

Mr. GRAHAM. No. I resigned from the committee at the point of

my nomination.

Senator DURBIN. And after your resignation, there was finally,

after more than 10 years, a unanimous agreement from that board

to release its report to the EPA. Are you familiar with it?

Mr. GRAHAM. I have not seen the report, no.

Senator DURBIN. So you can’t tell us whether you would have

signed on to that report or not?

Mr. GRAHAM. I can’t.

43

Senator DURBIN. The report contains significant findings, among

them, and I quote, ‘‘It is important that EPA continue to try to

limit emissions and human exposure to the class of chemicals in

view of their very long biological and environmental persistence,’’ and they were referring to dioxin. So if you are at this new position

at OIRA and this suggested policy comes before you, and you are

to look at the issue of dioxin, are you going to hold to your belief

that reducing levels of dioxin could actually reduce the incidence of

cancer—or increase the incidence of cancer?

Mr. GRAHAM. I think that in the context of the deliberations I

talked about, I was introducing two specific studies into a Science

Advisory Board deliberation of a collaborative body. My assumption

would be that at OIRA a lot of these issues would have already

been ventilated at the agency and by the Science Advisory Board,

and then that package would be coming to OIRA.

So I don’t see myself in the process of interjecting my personal

opinions about dioxin into the deliberation.

Senator DURBIN. Frankly, Dr. Graham, that is your job, to decide

whether or not, for example, research will continue in given areas,

whether regulations will be issued, and that is why it has given me

great pause to consider you in this position, because when I look

at some of your views—and I can tell you, quite frankly, I have

never heard of anybody suggesting that dioxin somehow reduces

cancer risk. It is just the opposite. It seems to be the vast body of

knowledge that has been gathered on this chemical is exactly the

opposite. And if you have said that publicly, as you have in the

course of this consideration, you can understand why those of us

who are concerned about issues like arsenic in drinking water may

be concerned about having you at the helm to decide whether or

not arsenic causes cancer or reduces the likelihood of cancer.

Do you have an opinion on that?

Mr. GRAHAM. No, sir.

Senator DURBIN. You have no opinion on whether arsenic is a

dangerous chemical?

Mr. GRAHAM. I haven’t had any experience in dealing with the

arsenic issue, either at the scientific level or at the cost-effectiveness of control.

Senator DURBIN. Thank you, Mr. Chairman. I will wait for the

next round.

Chairman THOMPSON. Thank you very much. Senator Bennett.

Senator BENNETT. Thank you. Dr. Graham, you have admitted

you have no training and background in biology or medicine. Have

you ever been to law school?

Mr. GRAHAM. No, sir.

Senator BENNETT. Have you ever studied languages?

Mr. GRAHAM. A little bit of German, but not much.

Senator BENNETT. The reason I raise that is because John

Spotila, your predecessor, appointed by President Clinton and confirmed unanimously by the Senate, which means that all of the

Members of the Committee here voted for him, is a lawyer who

studied languages at Georgetown University before he went to the

Yale Law School, and his government experience was a general

counsel for the Small Business Administration.

Have you ever done any work on wage and price stability?

44

Mr. GRAHAM. No, sir.

Senator BENNETT. The reason I raise that is that Mr. Spotila’s

predecessor, appointed by President Clinton, Sally Katzen, is also

a lawyer, whose government service included work on the Council

on Wage and Price Stability. Do you consider that Mr. Spotila and

Ms. Katzen were improperly confirmed by the Senate for this assignment, or do you think they were qualified?

Mr. GRAHAM. I think I’ll let this Committee make that judgment.

Senator BENNETT. All right. Well, the Senate unanimously felt

that in spite of the fact that they did not have any medical background or studies in toxicology, that their entire experience was in

the legal field, that they somehow were qualified for this, and

President Clinton appointed them and they were unanimously confirmed.

I want to move to an area that I have a particular interest in

which deals with the future. In the year 2000, there were 586 computer security incidents reported by civilian agencies. Of these, 155

were root compromises. A root compromise, for those that don’t understand the phrase, means that whoever got into the computer got

all the way in and ultimately could take control of the system. You

got down to the roots. And a root compromise means the intruder

owns the system and controls it. That happened 155 times in the

year 2000 in 32 different agency systems.

Now, I should stress that these are only the reported incidents.

We do not know how often somebody got into one of those computers and got to root compromise level and then got out without

being detected.

You are going to work for the Office of Management and Budget.

We on this Committee have heard former Directors of OMB tell us

they spent all their time on budget and they never got around to

dealing with management.

And I think the ability of someone to break into the computers,

compromise the database, and, if they wish, change, therefore, the

results that come out is something that the Office of Management

and Budget needs to deal with.

I understand you have some understanding of this kind of capacity, and I would like you to describe that for us to see if my understanding is correct. If my understanding is correct, that would be

a further reason to want you in OMB as opposed to somebody who

doesn’t have any understanding of this particular challenge. Could

you comment on this area?

Mr. GRAHAM. Well, I’m not sure I do know as much as you might

think I know, sir. The particular area you’re talking about hasn’t

been an area of my scholarship and my writing, so I don’t want to

overstate my competence in the area. So if you could focus the

question a little bit more specifically, I’ll do my best to respond to

it.

Senator BENNETT. Well, have you ever looked at the question of

computer security and preservation of the reliability of databases

on which you depend?

Mr. GRAHAM. I do understand that the issue of computer security

is extremely important in the Federal Government, both on the civilian side and on the national security side. And I understand that

45

OMB historically has had a particularly important role on computer security in the civilian side.

But I haven’t had the opportunity—I’ve had maybe just one briefing or so from OMB staff on computer security issues, so I’m in a

learning mode.

Senator BENNETT. All right. Well, I appreciate your paying attention to this because in the borderless world which we now live, the

borderless economy, where people from countries or places unknown can get into government databases and at the moment we

think, as they go after those databases, they are trying to take

something out, the concern that I have is that at some point they

are going to try to leave something behind. They are going to try

to make changes in the database to affect, for whatever nefarious

purposes, the decision making in the Federal Government.

To put in a military context, it would be the same thing as if our

military had been able to get into Saddam Hussein’s command and

control system and change his orders to his troops without his

knowing that they were doing that.

So that someone who had an interest in what was going on

might want to break into American computers so that the data you

receive as you make your decision as to cost/benefit analysis has

been compromised, if not contaminated. And I would just suggest

to you, looking ahead to the future, that you do a little bit of cost/

benefit analysis on how the government is dealing with that issue,

because it seems to me it is a whole lot cheaper to prevent it than

it is to clean up after it if somebody has done that. And if I were

someone who wished this country ill, I could think of no better way

to terrify our population than to deal with our database that would

cause improper decisions to be made about health and safety, because the database has been triggered with by some terrorist group

or hostile nation state that wants to use this as a way to cause difficulty.

So I realize this has nothing to do with the clamor that has been

raised about your nomination. I vented my spleen on what I

thought was the character assassination attempt in my opening

statement, and I want to focus now on some of the duties that you

will have if you are confirmed. I expect you will be confirmed and

trust you will be confirmed, and that is why I raise the issue.

Let me go to the issue that Senator Lieberman raised, which I

find kind of interesting, that suggested that given your intelligence

and your capacity, you might somehow break out of just reviewing

the regulations when they get to you in your normal pattern as the

watchdog there at OMB, but you would go to the front end, as you

put it, and participate there in ways that Senator Lieberman felt

might be inappropriate for you to do that. I think you are going to

have enough to do at OIRA that you won’t have to be called upon

to do that.

But it strikes me that this is a complaint that may say you are

overqualified for this job, you know too much, and we shouldn’t

have somebody who understands all of these things in that kind of

a position.

Could you comment on your own sense of what the workload

would be and whether, in fact, you would be tempted to do the

things Senator Lieberman suggested and inject yourself into the

46

regulatory process prior to the time when a regulation comes to you

for review?

Mr. GRAHAM. Well, I think that the experience that I’ve been told

from the OMB OIRA staff, the career staff at the agency, is that

once an agency has already formulated a position and has proposed

a regulation and key officials have signed off on that and it goes

to OMB, there is opportunity for OMB to have a review at that

stage, but it is often more effective to have at least some dialogue

with the agencies early on in the process, so that they can be sensitive to the kinds of concerns that are going to arise when it’s ultimately reviewed at OIRA. And, in fact, sometimes you would save

time and resources of both OMB OIRA and the agency if there was

some initial dialogue on these issues.

Senator BENNETT. So that is the pattern that goes on now. Is

that what you are telling us?

Mr. GRAHAM. I think that was the sentiment that was expressed

by some of the career staff, but I haven’t studied it enough in detail

to know how often that happens now.

Senator BENNETT. But isn’t the primary responsibility in the

agency and not in OMB? Isn’t your role a review role rather than

an initiating role?

Mr. GRAHAM. Well, the Executive Order does have a review role,

but it also has mechanisms provided in the Executive Order

through the calendar and through the dialogue with agencies on

the intent for their regulations and through the budgetary process

for OMB to play a greater role in participating with the agencies.

Senator BENNETT. Thank you very much.

Chairman THOMPSON. Thank you very much. Senator Levin.

OPENING STATEMENT OF SENATOR LEVIN

Senator LEVIN. Thank you, Mr. Chairman. Let me add my welcome to you, Dr. Graham. My one experience with you was working

on the regulatory reform bill with our Chairman, with Senator

Voinovich, and with others, and I found you, during that experience, to be moderate and thoughtful. The positions that you took

on cost/benefit analysis, on risk assessment were, I thought, positions which were constructive positions. You, for instance, did not

argue that benefits had to justify costs in order that the regulations

proceed, but that you ought to know whether benefits justify costs,

and if they don’t, then explain why one is regulating.

You took the position that benefits needn’t be quantifiable, that

if there is, for instance, a quality-of-life benefit, whether or not the

air quality coming up over Lake Michigan interferes with a view

of Lake Michigan, or whether or not an IQ could be affected by

some particular substance in the air or water, that even though

those benefits may not be quantifiable, that nonetheless they are

worthy of being considered.

So I have found in my experience with you that you were a

thoughtful and a moderate person who is willing to look at the importance of weighing costs and benefits, but not let that tail totally

wag the dog.

Others obviously have raised concerns about your nomination

based on their experience or their belief that they have knowledge

of your background. And I want to explore a few of those concerns

47

1Letter from Frank Cross appears in the Appendix on page 561.

2The letters of support and in opposition appear in the Appendix beginning on page 549.

with you today. I think it is important that you address a number

of the concerns, and a number of them have been raised here already.

Senator Durbin asked you about some reports or about a statement you made relative to the anti-carcinogenic effects of a particular substance, and you made reference to a report or two on

which you had based that conclusion. And I think it would be useful if you would submit those reports for the record so that we

could see what the basis of your statement was.

We received a letter from some people who object to your nomination—the letter says, ‘‘Time and time again, Professor Graham

has accepted money from industries while conducting research and

policy studies on public health regulations in which those same industries had substantial vested interest.’’ And my question to you

is whether or not your policy relative to the receipt of funding for

your studies has been approved by Harvard University. In other

words, do they know of your policies and have they either approved, disapproved, or are they silent on them?

Mr. GRAHAM. The Center’s procedures for dealing with both government and industry funding are regulated within the university—both at a university level and they are also reviewed at the

dean’s level in the School of Public Health, where my faculty appointment is. So, yes, they are aware of those practices.

Senator LEVIN. All right. We have received a letter, Mr. Chairman, from a professor of business law at the University of Texas

whose name is Frank Cross,1 and I am just wondering whether or

not the various letters 2 both in support of the nomination and opposed to the nomination have been made part of the record. Have

they already been?

Chairman THOMPSON. They are. Right.

Senator LEVIN. All right. Thank you.

If it has already been made part of the record, I will simply quote

from one part of it, that ‘‘the Harvard Center has taken numerous

steps to preserve its integrity and credibility, steps that surpass

those taken by comparable research institutions, and documentation of these policies is publicly available on the Internet.’’

It also says the following, on page 2, that ‘‘the question of conflicts of interest provides an even more stark contrast’’ after the

statement that the Harvard Center clearly provides more systematic financial disclosure to the public than the other institutions.

And then the professor says this: ‘‘While many of the similar research centers have mission statements regarding their operations,

none appears to have a separate and independent conflicts of interest policy.’’

Another statement which is made in the letter that I referred to

by those who oppose your nomination is the following, that you

have ‘‘consistently produced reports, submitted testimony to the

Congress, and made statements to the media that have supported

industry positions, frequently without disclosing the sources of his

funding.’’

48

I would like to ask you about disclosure of the sources of your

funding and whether or not you indeed have consistently produced

reports, submitted testimony to Congress, and made statements to

the media that have supported industry positions without disclosing the sources. Has that happened with frequency? And if it

has happened, should it happen? And what is your policy about

that?

Mr. GRAHAM. Yes, Senator. For those reports or articles that the

Center produces that were funded with a sponsored grant or a restricted grant for that purpose, the funder of that work should be

disclosed on the publication itself.

If, however, the publication or report was produced under unrestricted funding, whether that unrestricted funding be from companies, from the university, from a trade association, or private individuals, then we rely on the general disclosure on our website and

on our annual report to allow people to understand how our work

is funded.

That is the basic approach that we have at the Center to disclosure.

Senator LEVIN. All right. So that if a report is a result of restricted funding, that source is supposed to appear on the report.

Mr. GRAHAM. That should be on the report, yes, sir.

Senator LEVIN. Has it ever happened that it did not appear on

the report, do you know?

Mr. GRAHAM. I don’t recall an example of where we failed to do

that.

Senator LEVIN. All right. If you do find such an instance, would

you let us know? There are an awful lot of reports, obviously. I

have looked through the list of your reports. But perhaps somebody

could do that and tell us whether or not there has been a report

that has been produced by your Center which is the product of restricted funding where that source has not been reflected in the report.

In response to the written questions from Senator Lieberman,

you said the following: ‘‘When publishing newsletters, the restricted

grants are supposed to be noted on the publication. But when it’s

unrestricted, the Center relies on disclosure found on the Web and

in our annual reports.’’ But then you said the following, which is

confusing to me, that ‘‘the Center discloses restricted sources of

support for specific studies to the media and otherwise only discloses funding sources if asked to do so by the reporter.’’

Mr. GRAHAM. If we had a press release on one of our studies that

was financed through restricted support, we would disclose on the

press release that it was funded by a particular agency or company

or trade association. If a reporter calls us, we don’t have a general

policy of affirmatively disclosing: Here are all the places where we

get our money from. We rely on the journalist to ask us, and often

they do.

Senator LEVIN. All right. There has been a question raised by

one of the letters in opposition as to, again, the corporate sponsorship of your research. And one of the examples—the first example

given related to air bags, and I would like to just ask you about

that example.

49

Apparently you are a proponent of air bags. Your Center did a

study in 1997 on the cost effectiveness of air bags, and the results

of the study prior to peer review showed a cost of about $400,000

for each life saved for passenger-side air bags. And then after there

was criticism of the study, the study was peer-reviewed. The results were significantly different, and the cost of each life-year

saved after peer review then dropped to $61,000, and your conclusion was that that was within the acceptable range.

Now, the suggestion in that letter was that your preliminary

finding of $400,000 per life saved was somehow skewed because of

the funding that you received from industry. On the other hand,

your report said that the research was supported in part by a grant

from Centers for Disease Control and the Harvard Injury Control

Center and the Harvard School of Public Health.

So I am trying to find out—it said ‘‘partly supported.’’ Was the

other part a general support or——

Mr. GRAHAM. That’s correct.

Senator LEVIN. So the only restricted grants that went into that

were from the ones that you identified?

Mr. GRAHAM. The air bag study would have been in the CDC,

Centers for Disease Control in Atlanta, Georgia. That’s my recollection.

Senator LEVIN. All right. And would they have any interest in

skewing this to a $400,000 cost instead of a $61,000 cost?

Mr. GRAHAM. Not that I can think of, sir.

Senator LEVIN. All right. My time is up. Thank you.

Chairman THOMPSON. Thank you very much. Senator Collins.

Senator COLLINS. Thank you, Mr. Chairman.

Dr. Graham, I want to ask what, I think, is the fundamental

question here, and that is: Do you let the source of your funding,

whether it is from an industry group or a private individual or the

university or government agencies, influence the findings and conclusions of your studies?

Mr. GRAHAM. No, Senator. I, as the Center director and my faculty colleagues, strongly believe that we need to pursue the design

and analysis of our data and publish our results in the most objective manner possible, regardless of whether that would happen to

serve the interests of a particular funder or not.

Senator COLLINS. Thank you. And, in fact, you have supported

new regulation of the automobile industry that called for a redesign

of air bags in order to protect children from injury or death when

deployment suddenly occurs. Is that correct?

Mr. GRAHAM. Yes, that’s correct.

Senator COLLINS. Could you tell us a little bit more about your

work in that area?

Mr. GRAHAM. Yes. The National Transportation Safety Board

meeting in 1997 that Senator Levin was referring to in his questions exposed a number of the issues around children and air bags.

It stimulated our Center to form a working group of engineers,

physicians, and decision analysts to look into the problem and suggest possible solutions. And we published those solutions in the

journal Pediatrics. And one idea is the recommendation that vehicle manufacturers be expected to develop technology to sense

50

1 Article referred to appears in the Appendix on page 543.

whether a child is in the front seat and not deploy the air bag if

a crash occurs.

Senator COLLINS. Did the Automobile Manufacturers Association

welcome those findings, and were they just delighted that you were

calling for a redesign in the air bags?

Mr. GRAHAM. I do not recall specific reactions from particular

companies.

Senator COLLINS. It is my understanding that the automobile

manufacturers were not real happy about the findings of your survey because it was going to mean redesign work and additional expenses, which I think speaks to the fact that you do the research,

and wherever it leads you, you publish those conclusions.

I would also like to ask, have you supported the development of

new safety regulations for sports utility vehicles to prevent rollovers or to reduce the rate of their involvement in rollover crashes?

Mr. GRAHAM. Yes. In an article published in Issues in Science

and Technology,maybe a year or 18 months ago, I argued that we

ought to, as a country, develop a multi-year research and regulation program to reduce the rate at which sport utility vehicles roll

over. And that program is consistent, but perhaps a little bit more

aggressive than some of the legislation that has been passed by the

Congress at the present time.

Senator COLLINS. Mr. Chairman, I have a copy of that article

which Dr. Graham authored, entitled ‘‘Civilizing the Sport Utility

Vehicle,’’ and I would ask unanimous consent that it be made part

of the record.1

Chairman THOMPSON. Without objection.

Senator COLLINS. Dr. Graham, have you also done work in the

area of the EPA’s low sulphur diesel rules as a strategy to allow

for more fuel-efficient and cleaner diesel engines as well?

Mr. GRAHAM. Yes. In fact, I have a doctoral student, Edmond

Toy, writing a thesis on that subject right now.

Senator COLLINS. And, again, this is another area where you believe that there could be improvements in the regulations that

would produce environmental benefits?

Mr. GRAHAM. Yes, if we can bring the sulphur levels down in diesel fuel, it would increase the chances that diesel engine technology

could meet the particulate and nitrogen dioxide standards that

EPA applies. And if we could do that, diesel engines offer a lot of

fuel efficiency and carbon dioxide benefits compared to conventional engine technology.

Senator COLLINS. Thank you, Dr. Graham.

Chairman THOMPSON. Is the Senator finished?

Senator BENNETT. Thank you, Mr. Chairman.

Senator Levin’s citation of some letters——

Chairman THOMPSON. Excuse me. I am sorry. I asked if the Senator was finished. I take it you were.

Senator COLLINS. I was, yes.

Chairman THOMPSON. We are ready for another round now, I believe.

Senator BENNETT. Yes, and I was a little surprised. I am not

next. [Laughter.]

51

Chairman THOMPSON. I am sorry. I hate to interrupt you

midsentence here, but I guess we better go in order, which, coincidentally, starts with me. [Laughter.]

Senator LEVIN. Mr. Chairman, may I ask a question?

Chairman THOMPSON. Yes, sir.

Senator LEVIN. Can the record be kept open for questions for a

reasonable period of time?

Chairman THOMPSON. Yes. Would 24 hours be sufficient?

Senator LEVIN. That would be fine. Thank you.

Chairman THOMPSON. Some of the issues that have been raised,

first of all, concern the issue of your qualifications. One of the letters that was sent in criticized you for your lack of degree in hard

sciences and giving your opinion on some of these areas that have

been raised. And attached to that letter or signing on to that letter

were several pages of academics, and I noticed most of them were

lawyers. One of them is a professor of philosophy, another professor

of philosophy, a professor of psychiatry, a professor of psychology,

a professor of romance languages, and three professors of psychology. You are not doing well among the psychologists, Mr.

Graham. [Laughter.]

Another professor of psychology, a chair of philosophy, associate

professor of linguistic sciences, and another professor of psychology.

So they are entitled to their opinion, and their opinion is a part

of the record, but I just say I believe that your qualifications in

these areas probably are superior to some of the qualifications of

your detractors.

I might point out that, on the other hand, we had a letter signed

onto by at least twice as many academics, who are scholars working in environmental policy, health policy, and related fields. So I

think that our record reflects pretty well, not only in terms of the

background of the people who have sent in expressing their views,

but also in terms of your comparison with your predecessor, as

Senator Bennett pointed out. Your predecessors were lawyers who

were appointed because they were good administrators. I think you

bring some special skills to the position that we have not had in

some time.

On the issue of your benefactors, there are several—let me get

the list here. Several of the Senators here have referred to areas

where your opinion, and those of your colleagues with whom you

submitted these reports, went counter to those who had funded you

with restricted funds, funds that went for a particular subject matter.

I am going to make a part of the record something that the staff

compiled, and I emphasize this is a majority staff compilation, but

I think it is quite impressive, and I think it will bear scrutiny.

In these following areas, we found where you and the Harvard

Center reached opinions that were contrary to the interests of the

industries that donated restricted funds for a particular project:

Cancer risk from formaldehyde is one; cancer risk for chloroform;

panel review of National Cancer Institute’s Agricultural Health

Study; study of using diesel versus compressed natural gas in transit buses; indoor air pollution; exposure to chemicals; untested

chemicals; concern for highly exposed people; energy conservation;

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52

cles have been mentioned; health risks; and air bags have been

mentioned.

I will not go into what you found, and I will not even mention

all of the sponsors—a wide range of industries, energy, chemical,

automobile manufacturers, chemical producers, tobacco company,

and the petroleum industry. In each of these instances, you apparently, from our analysis, went against what would certainly seem

to be the wishes and desires of the people involved.

So, if we get past the issue of, shall we say, skewing your reports

to favor one side or another, then we have to get down to the merits of what you are actually dealing with in terms of these sometimes controversial subjects. I hope we are not getting to the point

where we discourage scientists and academics from giving opinions,

based upon research and based upon analysis of other research

that has been done, even if it is sometimes controversial.

If you have a study that shows an increased risk of something,

you will be embraced with open arms by everyone, including the

Congress and the news media, and it allows us to emphasize our

concern to citizens. But if you have a study that indicates that perhaps a particular risk has been overemphasized and resources

would be better spent in another area, where the risk has been

underemphasized, you are treading upon dangerous ground, and

you will get very little comment, certainly, from any member of

Congress about that because it is politically dangerous.

And I hope that we do not do anything to discourage our scientists and our people in academia from venturing into those

grounds, and just have a good, open, honest debate about it, even

if sometimes it goes contrary to commonly accepted or assumed notions.

Let me see if my understanding is correct concerning the dioxin

issue. You were selected to serve on EPA’s Science Advisory Board

on Dioxin for both the 1995 and the 2000 reviews; is that right?

Mr. GRAHAM. Yes, sir.

Chairman THOMPSON. And you withdrew from the 2000 review

when your nomination occurred.

Mr. GRAHAM. That is right.

Chairman THOMPSON. According to my information, in both reviews, you raised concerns that EPA may be exaggerating the cancer risk of low levels of dioxin exposure, but that you also said that

the noncancer risks of dioxin exposure—damage to reproduction,

development, immune system, and the endocrine system—merited

greater attention by the EPA; is that correct?

Mr. GRAHAM. That is correct.

Chairman THOMPSON. And your writings show how risk analysis

played an important part in reducing dioxin pollution from the

pulp and paper industry in a cost-effective manner.

Mr. GRAHAM. Yes, that is true.

Chairman THOMPSON. We have made passing reference to peer

review, which I think is one of the most important aspects of what

we are dealing with here and that people need to understand.

These reports are not something that you sketch out on the back

of an envelope and get typed up the next day based upon your own

notion solely, but that they are peer reviewed.

53

Will you discuss, in some detail, what that is, what it involves,

and what part it plays in your work and especially with regard to

the reports that have been referred to here today, the controversial

ones. Perhaps they are the same as the noncontroversial ones, but

what is the process?

Mr. GRAHAM. The commitment to peer review from the Center is

to make sure that intellectual products that come out of the Center

have been subject to peer review by qualified scientists. The level

and intensity of peer review varies a lot, depending on the nature

of the product itself.

For each issue of our newsletter, we try to make sure that at

least two people within the Center review it before it goes out, and

their names are actually put on the newsletter issue itself, as well

as the authors of the newsletter issue. So I would say that is internal peer review, and it is the most modest level for the newsletter

itself.

If we have a Center report that is not being published in a journal, we would typically apply at least internal review by our faculty

colleagues, and in more complex or controversial cases, we would

also get outside external peer review added to that.

Journal peer review practices, where a majority of our work is

published, are variable, but they typically involve anonymous external peer review.

Chairman THOMPSON. How does that work?

Mr. GRAHAM. Well, in a journal setting, we would submit a paper

to a journal, and then the editor of the journal would make a selection of appropriate reviewers, and their names and identities would

not be disclosed to the authors of the papers.

Chairman THOMPSON. So you would have nothing to do with who

is reviewing your work.

Mr. GRAHAM. For a journal peer review, but for the Center peer

review, we in the Center would select those reviewers. So it is a

different style.

Chairman THOMPSON. All right. I understand, since 1990, you

have been on 97 studies at the Harvard Center.

Mr. GRAHAM. I guess if you counted our publications list since

1990, that sounds in the ballpark.

Chairman THOMPSON. My information is that virtually every

study done with restricted funds, that is, for a particular subject,

had three or more authors. Is that right?

Mr. GRAHAM. That sounds right.

Chairman THOMPSON. All right. My information is 45 of the studies have three or more authors, 27 had two, 25 of the studies had

one author. Does that sound about right?

Mr. GRAHAM. I would be happy to check it for you, but it sounds

in the ballpark.

Chairman THOMPSON. I am not holding you to the numbers. This

is my information. But I think the point, the obvious point, is that

we are dealing with a situation that is peer reviewed. The serious

articles that go out, most of the ones we are dealing with that we

see in the reports and so forth are peer reviewed by people other

than anyone that you have any control over, that these articles

that you are putting out for the most part, have others of your colleagues there at Harvard joining in, and it is all done pursuant to

54

a process in terms of conflicts of interest and disclosure and so

forth is established by Harvard. This seems to be more extensive

than other similar situations. Thank you very much.

Mr. GRAHAM. Just a brief clarification, Senator. The peer review

process that we apply to our own publications is an internal process or external, where we pick the peer reviewer, whereas a journal, the editor would pick the reviewer. So there is a little bit extra

assurance to some extent in a journal peer review process.

Chairman THOMPSON. Thank you very much. Senator Lieberman.

Senator LIEBERMAN. Thanks, Mr. Chairman.

Dr. Graham, at a Congressional hearing, you were asked how we

should evaluate whether risks we hear about are real or exaggerated, and part of your answer—I think it may have been the beginning of your answer—is as follows: ‘‘Yes, the first thing I think we

should keep in mind is if you are a risk assessor or a scientist in

one of these Federal regulatory agencies, you don’t usually have an

incentive to find that an alleged hazard does not exist, because if

you highlight the fact that a hazard exists, you may attract the attention of Congress and the media, and thereby garner public support and resources for your agency.’’ Do you stand by that statement?

Mr. GRAHAM. Did I say it as an incentive, do they have an incentive to do that?

Senator LIEBERMAN. Yes, ‘‘you don’t usually have an incentive to

find that an alleged hazard does not exist, because if you highlight

the fact that a hazard exists, you may attract the attention of Congress and the media, and thereby garner public support and resources for your agency.’’ Mr. GRAHAM. I think that is plausible speculation.

Senator LIEBERMAN. Here is my concern, and it is this. In light

of that statement and that attitude, can we assume that you would

be able to give fair and unbiased review of rules developed by those

same government scientists and analysts whose motivations, I

think it is fair to say, perhaps even their professionalism, you question in that comment that you made to the hearing.

Mr. GRAHAM. Well, I think this actually comes from one of the

written questions you submitted to me. And I do think that when

I transition from a college professor to OIRA Administrator, I’m

going to have to be a little bit more respectful of the public spiritedness and intentions of agency risk assessors. So I do hope to be

sensitive to that.

Senator LIEBERMAN. Let me go on. In one of my written questions I raised—this goes back to environmental protection—I raised

concerns that you have so consistently been critical of our national

environmental laws, that it leads to a broader concern about how

you would handle environmental protection and people protection

from environmental pollution regulations. And your response said

that I should look at your book, ‘‘The Greening of Industry.’’

And I did. And it does seem to me that the book ultimately reinforces the impression, my original impression, in this sense, that

many environmental laws are based on certain rights, for example,

that every American is entitled to breathe clean air and drink safe

water. But your book seems to be an advocacy piece, supporting

very fundamental revisions in those basic principles of our environVerDate 11-MAY-2000 10:51 May 03, 2002 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6601 73393.TXT SAFFAIRS PsN: SAFFAIRS
55

mental laws, and that is because of the heavy emphasis you give

on the assessments and the cost-benefits that we have referred to

earlier. And at one point I think you have indicated, you have said

that these environmental laws should no longer be grounded in

what you referred to as the people’s ‘‘rights to environmental protection.’’

So I want to ask whether you would respond to a fear that I have

heard from your critics, because of your writings and your statements, that there would be a danger that you would effectively

eviscerate this principle that I think does underlie our environmental laws, that every American has a right to a clean environment, certainly insofar as it deals with their own health and safety,

clean air and clean water—and I suppose, in fairness, I should say,

regardless of whether there is a more cost-effective way to do something else, as we compared risks to people before.

I wonder if you would respond to that fear of your critics.

Mr. GRAHAM. I think it is an excellent question. There has been

an intellectual dialogue and debate under way, certainly for 30

years in this country, over whether our environmental laws should

be predominantly ‘‘rights-based’’ in their underlying structure, or

whether they should be predominantly economics based in trying

to achieve efficient solutions to environmental problems. And I

think it’s fair to say that in that intellectual debate, I have been

in the camp of people who would like to see the environmental laws

move in the direction of more sensitivity to economics and efficiency.

Having said that, if I become OIRA Administrator, I’m perfectly

comfortable enforcing the environmental laws of the land as they

are currently written, and a number of them are currently written

much more in the rights orientation than in the economics orientation. But I think even in those areas where they are written with

a rights orientation, there are pieces of those laws, for example, the

implementation phases of the Clean Air Act, that allow for economics and efficiency considerations to have some role.

So I will try to be sensitive as OIRA Administrator to the exact

statutory framework we’re talking about when a rule is proposed

to OIRA and that would influence the kind of review we would give

it.

Senator LIEBERMAN. So what you are saying though, as you said

correctly, is that your work has put you in the sort of economics/

efficiency side of the debate with the environmental rights advocates, that—we do have a tendency here to pass laws based on the

environmental rights theories and values—and you are saying that

in reviewing regulations implementing such laws, such environmental-rights based laws, that you do not believe that your past

tendency towards the economic efficiency side of the debate would

inhibit you from approving regulations, carrying out the environmental-rights based laws?

Mr. GRAHAM. Right. In my role as a college professor and in my

role as an advocate, I try to make a case for changing environmental laws in a direction that I feel is appropriate and reasonable.

But in the context of being OIRA Administrator, I have a responsibility to enforce the laws as they are written. And a number of

56

them are written that way, in no small measure, because of your

work, Senator Lieberman.

Senator LIEBERMAN. Well, I suppose I should say thank you.

[Laughter.]

Dr. Graham, let me ask you about a very different aspect of your

work if you go to OIRA, and that is the question we talked about

briefly when you were in my office yesterday, and that is, the

whole area of openness of OIRA, timeliness and accountability.

This actually embraces the earlier reference I made to paralysis by

analysis, whether either for reasons of ideology or just intellectual

curiosity, your leadership there would have the effect of so delaying

the movement of regulations through OIRA, that the rights of people who would be protected by those regulations would be compromised.

I want to go back to the first decade of OIRA’s existence, when

there was a history about OIRA reviewing regulations in secret,

without disclosure of meetings or contacts. Rules would often languish, literally for years, as you probably know from your studies,

with no explanation, and then be returned to the agencies with

many required changes, which effectively not only compromised the

rights of the presumed beneficiaries of those laws, but also frustrated the will of Congress in adopting the laws.

The last administration put provisions into effect through Executive Order 12866, which aimed at overcoming those problems. Public disclosure requirements, a 90-day period for OMB review, provisions to keep the regulatory agency informed and included, and

provisions to prevent some entity outside of OMB from becoming

a conduit for outside groups to try to influence the regulation off

the record. Those assurances were quite hard won, and I believe it

is essential that they be retained to avoid recurrences of the abuses

that we saw earlier.

So I want to ask you for your commitment to retain those existing provisions, and to in fact, reflect them in your own administration of OIRA should you be there, on openness, timeliness and accountability. I just want to very briefly say these provisions include

those for public disclosure, timely review, written explanation for

any regulation returned to the agency, keeping agencies informed

and involved in any OIRA context with outside parties, and the

provision directing that only the OIRA Administrator may receive

oral communications from those outside government regarding regulatory reviews. Can you give us such an assurance that you would

continue such policies?

Mr. GRAHAM. That is another big, complicated question. And I

guess the easiest thing to start with is to say that I think OMB

Director Daniels and myself are both committed to the principle of

openness and transparency in regulatory review. I don’t think that

we have reached a determination that any of the specific transparency requirements that are in the current Executive Order are

necessarily inappropriate.

I happen to be aware of one particular GAO report that looks

into one of the transparency requirements that you mentioned,

where there was a dispute between OIRA and GAO about whether

that particular transparency requirement was workable, but I don’t

feel that I know the details of that well enough to have a strong

57

1 Responsive letter to Sen. Lieberman from Dr. Graham, dated May 21, 2001, regarding Executive Order 12866 appears in the Appendix on page 353.

opinion about that. But in general, I don’t see any desire on the

part of the administration to be going backward in the area of

transparency and openness.

Senator LIEBERMAN. OK. My time is up. I do want to ask you to

consider that Executive Order 12866, and just for myself, I would

like very much to hear if you have any specific concerns about it

prior to the time that we vote on the nomination, because I do

think apart from the concerns that have been expressed about substance, the process here that goes on is critically important, and

that is not a matter, obviously, of ideology or politics. So to the extent that you are able, I would personally be benefited by hearing

whether you have any concerns, or in fact, whether after your review of that Executive Order, you are comfortable with it.1

Mr. GRAHAM. OK. I’ll look into that.

Senator LIEBERMAN. Thank you. Thanks, Mr. Chairman.

Chairman THOMPSON. Thank you very much. Senator Voinovich.

Senator VOINOVICH. It is my understanding that in terms of disclosure, that because of your personal involvement, you have gone

beyond the policy of Harvard University in regard to disclosure of

people who contribute to your Center. Is that correct?

Mr. GRAHAM. We’ve gone beyond what are standard disclosure

policies at a lot of institutions, at a lot of units both within Harvard and outside of Harvard.

Senator VOINOVICH. Senator Lieberman made reference to Executive Order 12866, and I referenced that earlier, but I did not have

the statistics, and I now have them. There was a GAO review of

what OIRA did in terms of some 110 rules that were economically

significant under the Clinton Administration, under E.O. 12866,

and they found that 78 out of 110 times, there was no cost benefit

analysis produced by the administration. Because of that, I think

there was some feeling in the community, the country, that perhaps the reason why they were not done was because if they were,

the regulation coming from the agency might have not met the test.

And I think that one of the problems we have today is that there

is a lot of suspicion about the transparency in the decision making.

I support Senator Lieberman in terms of a transparency and openness so people know why you are doing the things that you are

doing. But hopefully, you will get the job. If you do, there is going

to be a lot of people out there saying, ‘‘Well, he is on the other side.

He is for the polluters or the business or the industrial people.’’ I

think there was a strong feeling today in the country that the Clinton Administration was in the pocket of the extreme environmental

groups, and they had sway over that administration.

I would like to know how you are going to assure all of us that

we are not going to see, 3 years from now, a GAO study of your

agency, that says out of so many economically significant issues,

you have not done the job on many of them. How are you going to

take care of that problem?

And I just want to mention one other thing that is so important.

I have to believe that many lawsuits are filed in this country by

one group or another because they think the people that are doing

58

the job are biased or in somebody’s pocket or being influenced by

them. The sooner that we can get away from that, I believe that

we are going to move forward in terms of the environment, with

a cleaner environment. I believe that instead of people settling

their situations in lawsuits, that if they have trust in agencies, we

can move forward and make some real progress.

Mr. GRAHAM. Well, let me just start by saying that if GAO reports like that are written under my tenure as OMB OIRA Administrator, I don’t think Mr. Daniels is going to be very happy. So I’m

definitely going to be looking very carefully at how we achieve the

types of review that we need of each of those major regulations.

That may involve a need to look into whether the organization

itself is adequately staffed and has the adequate resources to provide the types of reviews, and I haven’t had a chance to look at

that in detail yet. But certainly that has to be looked into if we’re

serious about providing that level of review to that many regulations.

Senator VOINOVICH. How about the issue that Senator Lieberman made in terms of transparency? What are you going to do

about that, so that people know that the fix is not on?

Mr. GRAHAM. Well, regarding the GAO report, I haven’t made a

firm conclusion yet, because I don’t really feel I fully understand

the dimensions of the issue, but I am concerned that you have a

previous OIRA Administrator who tried to enforce the Executive

Order saying that a transparency requirement in that Executive

Order is not workable and feasible. I think that is something that

needs to be looked at carefully.

And as I recall the basic requirement is showing how the rule

was changed due to OIRA’s activities, and the Administrator was

arguing that it’s often difficult to tell, after a dialogue with an

agency, whether a change was due to OIRA’s suggestion or the

agency’s suggestion and so forth.

Senator VOINOVICH. Well, again, I want to emphasize how important that is. I would hope that after your being there a couple of

years, people would say that the guy really knows what he is

doing, he is objective in what he is doing. You can argue maybe

about what the result is, but it is being done objectively, and we

understand that it is because information that you used or the reasons for your decision making have been made public, therefore

will command the respect of objective reviewers including members

of the U.S. Senate and the House of Representatives.

Mr. GRAHAM. Yes, Senator.

Chairman THOMPSON. Thank you, Senator Voinovich. Senator

Durbin.

Senator DURBIN. Thank you, Mr. Chairman.

There have been a lot of questions asked of you, Dr. Graham,

concerning conflicts of interest at the Harvard Center, and I would

like to ask you, have you ever been asked by Harvard University

to return any of the corporate funds that were given to the Center?

Mr. GRAHAM. Yes, sir.

Senator DURBIN. How many occasions?

Mr. GRAHAM. One that I recall.

Senator DURBIN. Can you tell me what that occasion was?

59

1The letter dated January 22, 1992, from Philip Morris to Harvard Center appears in the Appendix on page 354. 1The letter dated January 31, 1992, from Harvard Center to Philip Morris appears in the Appendix on page 356.

Mr. GRAHAM. That was an occasion where our Center solicited an

unrestricted contribution from Philip Morris, and the Dean of the

Harvard School of Public Health instructed me to return it.

Senator DURBIN. Was your Center involved in any kind of studies

relative to tobacco at that time?

Mr. GRAHAM. Not that I recall, sir.

Senator DURBIN. Has your Center been, at any point in time, engaged in a study relative to the safety of tobacco?

Mr. GRAHAM. I think we have had a variety of pieces of work,

either on tobacco explicitly or possibly comparing tobacco to other

types of risks.

Senator DURBIN. Did you at any point review any Surgeon General reports on the warnings and safety of tobacco?

Mr. GRAHAM. I believe a colleague of mine, Evridiki Hatziandreu,

M.D. and I jointly were involved in a project where we did review

some Surgeon General’s reports, yes.

Senator DURBIN. Why did Harvard University ask you to return

the $25,000 from Philip Morris?

Mr. GRAHAM. My recollection is that the Dean of the Harvard

School of Public Health felt that it was inappropriate for a school

of public health to accept a gift, an unrestricted gift from a tobacco

company.

Senator DURBIN. Why?

Mr. GRAHAM. I think that Dean Fineberg’s, basic view—and this

was a good while ago—was that tobacco is such a serious public

health problem, that it’s not appropriate for a school of public

health to be accepting money from that type of organization.

Senator DURBIN. Do you agree with that?

Mr. GRAHAM. I argued against it at the time, and even today, I

still have some reservations with that judgment.

Senator DURBIN. You made the original solicitation to Philip

Morris, did you not?

Mr. GRAHAM. Correct.

Senator DURBIN. For the $25,000, which they sent you on January 22, 1992.1 The records indicate on January 31, after the deans

contacted you, you returned the Philip Morris check. Is that correct?

Mr. GRAHAM. Yes, sir.

Senator DURBIN. What was interesting about this—and I would

like to make this letter part of the record 2—was, you wrote them

a very short letter and said, ‘‘I’m sending back the $25,000. Have

Kraft Foods send it back to me.’’

Senator DURBIN. Kraft Foods is a subsidiary of Philip Morris,

right?

Mr. GRAHAM. Kraft Foods is definitely a subsidiary.

Senator DURBIN. Did you see any ethical problem there, where

you were told by the dean to get out of the pocket of Philip Morris,

we do not want to be associated with it, and then you came back

and said, ‘‘But have one of your subsidiaries send the $25,000 right

back to me?’’

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1The letter dated October 25, 1993, appears in the Appendix on page 266.

Mr. GRAHAM. My recollection is that the dean and I discussed the

issue of whether the subsidiaries of Philip Morris were inappropriate for unrestricted contributions. And the determination was

that a contribution from—I think Kraft Foods in particular we discussed—would be acceptable according to the guidelines that he

was developing.

Senator DURBIN. October 25, 1993,1 you sent a thank you letter

to Philip Morris for their donation to the research center of a desktop computer. Is that correct?

Mr. GRAHAM. I believe it was to Mayada Logue for a personal donation, yes.

Senator DURBIN. And so you were told by the university not to

be affiliated or take money from the tobacco company. You said, ‘‘I

will take it from a subsidiary.’’ And the university, according to

your testimony, has gone along with it. And then within a year,

you are receiving a personal computer from the Philip Morris Company. Is that correct?

Mr. GRAHAM. I don’t think that’s correct. I think the donation of

the personal computer was a personal donation, and not a donation

of Philip Morris. And I don’t recall my dean putting any restrictions on my ability as a professor to affiliate with people from Philip Morris.

Senator DURBIN. They gave a computer to you personally instead

of money to the Center?

Mr. GRAHAM. No. The donation was a personal donation of

Mayada Logue to the Harvard Center for Risk Analysis.

Senator DURBIN. What is Philip Morris’s connection then?

Mr. GRAHAM. I don’t know that there was. She was employed at

the time by Philip Morris, and the thank you note, went back to

her at her Philip Morris address, but the actual donation was a

personal donation of Mayada Logue.

Senator DURBIN. I would like to go back to a point that was

raised earlier about the fact that you do not have any qualifications

or degrees in hard sciences, and I would like to make two points

about that. First, I do not believe that is a prerequisite for this job,

and I think predecessors certainly have not had that background.

But you have held yourself out on a number of issues related to

public health and science, and that is why you are being asked

many of these questions today.

In terms of the letters in opposition to your nomination, they

may include letters from psychologists and people in language

sciences. They also include letters from 21 medical doctors, including one Nobel prizewinner, and a variety of Ph.D.s in public health

and cell biology.

Now, the reason that is important is the next issue I would like

to go to which relates to pesticides in food. Can I ask my staff to

bring up some of the things that have been said about that particular issue.

I think it is fair to say that you have been dismissive of many

of the public concerns about pesticides, and many of your funders,

of course, are on your side on that. Your quote on the left says,

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‘‘The evidence on pesticide residues on food as a health problem is

virtually nonexistent. It’s speculation.’’ Here is what others have said. ‘‘Changes are needed to protect

children from pesticides in diet.’’ National Academy of Sciences.

Then we have Consumer’s Union, which is not viewed as an advocate on either side really. ‘‘There is a 77 percent chance that a

serving of winter squash delivers too much of a banned pesticide

to be safe for a young child.’’ And then from the EPA. ‘‘EPA’s risk assessment showed that

methyl parathion could not meet the FQPA Safety Standard. The

acute dietary risk to children age 1 to 6 exceeded the reference

dose for the amount that could be consumed safely over a 70-year

lifetime by 880 percent.’’ I am trying to reconcile, Dr. Graham, your conclusion that pesticide residue on food is virtually nonexistent as a health problem

and is speculation, with the sources on the right, which come to the

exact opposite conclusion. The obvious reason is that if you are appointed to this position, you will have food safety questions coming

before you that may relate to pesticide residues. You have suggested to us that you are going to change your position when it

comes to your views of people working in government developing

these regulations, and when it comes to being rights-oriented rather than money-oriented when it comes to regulation. Are you going

to change your views on the danger of pesticides on food, particularly for children?

Mr. GRAHAM. No, Senator.

Senator DURBIN. You do not believe there is a danger; it is pure

speculation.

Mr. GRAHAM. I think there is actually a pretty heated debate

within the scientific community on whether the pesticide residues

on foods at their current levels represent a health risk.

Senator DURBIN. Let us go to methyl parathion. How much do

you know about it?

Mr. GRAHAM. Not much, sir.

Senator DURBIN. Well, that is unfortunate, because that really

makes the case. The decision was made because methyl parathion

was being used as a pesticide on foods that kids were consuming.

It was a danger to these children. And the Federal Government decided to change the uses of that pesticide, and ban it from certain

foods where it might accumulate in children, causing health problems.

But from your point of view, they should not have done that, that

was pure speculation; the health problem there was virtually nonexistent; is that correct?

Mr. GRAHAM. I haven’t studied that particular example, sir.

Senator DURBIN. But you see, Dr. Graham, that is what troubles

us. Arsenic in drinking water is a new issue for you. Methyl

parathion is a new issue for you. You’re not trained as a biologist

or toxicologist. Yet, you make broad statements about the lack of

health effects of pesticides, or dioxin being an anti-cancer chemical.

I mean to think that we are going to entrust you with a position

where you will be the gatekeeper on food safety, on pesticide levels

on fruit and vegetables, when this government really tries to protect children, vulnerable children from what is a serious health

62

risk. That is why your lack of training in sciences related to this

field, the fact that you have made some rather, I think, outrageous

statements about science during the course of your professional career, and now seek to be the last word at OMB as to health and

safety regulations, I hope you can understand that gives many of

us some pause when we consider your candidacy.

Mr. GRAHAM. Senator, if EPA, for example, submits a proposal

to OIRA that presents a strong case that children are going to be

at risk if we don’t lower exposures from pesticide residues, I think

that is something I would certainly look at very carefully and very

seriously in the context of the underlying statute and the terms of

the executive order.

Senator DURBIN. But which John Graham are we dealing with

here, the John Graham that says pesticide residues on food as a

health problem is virtually nonexistent, or the John Graham that

says he is going to be measured and objective and consider these

things?

I think we have a lot of confirmation conversions here on Capitol

Hill. And when we look at your background and the people who

have supported you, and some of the statements you have made

about dioxin actually eliminating cancer, and pesticide residue

health threats to be virtually nonexistent, I hope you can see where

many of us feel that putting you in this position is really a risk.

Mr. GRAHAM. [No response.]

Senator DURBIN. Thank you, Mr. Chairman.

Chairman THOMPSON. Senator Bennett.

Senator BENNETT. Thank you, Mr. Chairman.

Dr. Graham, you may take a place in history, alongside with

Robert Bork. I have not seen such a concentrated effort to destroy

the reputation of a man, who is considered by his peers to be of

the highest integrity, highest objectiveness, willingness to take a

risk and state positions outside the norm on the basis of your own

research. I have not seen such an assassination since the time of

Robert Bork.

Let me go to another letter. I began by quoting a letter from a

fellow who had analyzed all of the statements in Joan Claybrook’s

statement. I will conclude by a fellow who has something also to

comment on this effort. This is a letter addressed to the Chairman

from Michael Finkelstein.

He identifies himself, ‘‘I am an independent consultant working

on automotive safety, and have know Dr. Graham for more than

15 years. I first met him in the mid 1980’s when he was doing research on air bags. Since then I have followed his work at the Harvard Center for Injury Control, and most recently at the Harvard

Center for Risk Analysis. His academic credentials are outstanding,

and there is little I could say that would add to his scientific accomplishments.’’

So far that is a garden variety endorsement of you, of which

there are, as the Chairman has pointed out, literally hundreds. It

is the next paragraph that caught my eye.

‘‘Rather, the reason for this letter is to discuss Dr. Graham’s integrity, both as a scientist and as a public health professional. The

reason I feel compelled to write is that I discovered that a 1997 letter that I wrote was used by Public Citizen in their recent report

63

criticizing Dr. Graham’s nomination as head of OIRA. Frankly, I

was very surprised to see Public Citizen use my letter to criticize

Dr. Graham. In fact, when a representative of Public Citizen contacted me to learn my views of Dr. Graham, I told them that I was

strongly in favor of his possible appointment to any number of positions in the new administration.’’ So here is a man who is being quoted as an opponent of yours,

who feels it absolutely essential to set the record straight by pointing out that he is a supporter. The interesting thing as to your credentials, in the conversations we have had here, comes in his explanation of his experience with you. He describes a presentation

which you made, with which he had very strong disagreement. In

other words, somewhat in the attitude of the Committee in some

of the statements that have been made.

He says, ‘‘I felt that his analysis was flawed’’—‘‘his analysis’’ being your analysis—‘‘and given the publicity surrounding Dr. Graham’s preliminary conclusions, I wrote him a very strong letter,

raising a number of technical problems that I had with his research, and in fact, during the peer review that his research received prior to his publication, apparently a number of reviewers

raised many of the same questions. As a result, when the paper

was published in the Journal of the American Medical Association,

it had been substantially revised. Had Dr. Graham not presented

his preliminary findings at the NTSB meeting, there would have

been much less feedback from the safety community and the quality of the final published paper may have been diminished. Given

the importance of the subject, Dr. Graham’s presentation of his

preliminary findings at the NTSB was reasonable. And while I disagreed with his conclusions, I certainly never questioned his motives for presenting that data. Further, when his research was subjected to the peer review process, he made a number of substantive

changes which did in fact change his conclusions, and it is the

paper published in JAMA that is used today to characterize air bag

cost effectiveness.’’

In other words, what we have here from a man who was one of

your critics, is a real-life example of your willingness to listen to

other points of view, your willingness to accept peer review, and

your willingness to change your conclusions when confronted with

peer review that suggests that such a change is necessary. What

we have here is a real-life example of a man who is open to criticism, open to review, and willing to make changes if he feels scientifically that those changes are required. In my view, that is the

kind of a man we want as the head of OIRA.

Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much. I think that is extremely important, Senator, because I think that what we are dealing with here in this job is very much process oriented. Your job

is going to be to insure that the agency does a careful analysis of

what it is dealing with. You are not being put in there to create

new scientific findings, are you?

Mr. GRAHAM. No, sir.

Chairman THOMPSON. And you are an expert in regulatory analysis, that it is not uncommon for us to confirm people who have

views. Anyone who has accomplished anything in life and lived a

64

few years, has views. And we confirmed an Attorney General, time

before last, who was opposed to the death penalty. And I think

every member of the Judiciary Committee and every member of the

U.S. Senate, who supports the death penalty, voted for her confirmation, because she stated that she would apply the law that

was on the books.

And I think a letter like this is testament to the fact that you

are a person who is intellectually honest, and that you will apply

the law and the regulations as you find them, but not be afraid to

have an intellectual discussion about issues that are of importance

to the public.

On the tobacco issue, my record reflects that you cited smoking

as the No. 1 killer in America in over 100 species. Does that sound

right to you?

Mr. GRAHAM. That’s right, sir.

Chairman THOMPSON. Your Center finds smoking prevention programs to be cost effective; is that correct?

Mr. GRAHAM. Yes, sir.

Chairman THOMPSON. In one book, for example, you recommended that, ‘‘Physicians should be encouraged and trained to

counsel all patients to stop smoking, an intervention with varied

favorable cost effectiveness for all types of smokers.’’ Your writings

and Congressional testimony point to indoor air pollution generally,

and secondhand smoke specifically as a significant health hazard;

is that correct?

Mr. GRAHAM. Yes, sir.

Chairman THOMPSON. And that study was at least in part financed by tobacco companies, was it not?

Mr. GRAHAM. Well, if we’re going to characterize Kraft Foods in

that fashion, I guess that’s true, but that’s probably not fair.

Chairman THOMPSON. Well, I guess this is reflected in your tobacco sources, because my file indicates that tobacco-related companies constitute less than 1 percent of the funding for your Center.

Would that comport with your recollection generally?

Mr. GRAHAM. Yes. I think Kraft Foods is the only company at

issue.

Chairman THOMPSON. Tobacco related?

Mr. GRAHAM. Right.

Chairman THOMPSON. Thank you very much. Senator Lieberman.

Senator LIEBERMAN. I do not have any more questions, Mr.

Chairman. If I have any, I will submit them for the record.

I mean, it is interesting, as I think about the hearing and several

of the questions that I have asked this morning, and others have,

Dr. Graham, you have referred to the transition you are making,

if you are confirmed for this position, from academic to public administrator, and that would require—sensitivity was one word you

used—and I do not mean to take it out of context, but a different

kind of orientation than you had up until this time. And I think

the question that remains, for me anyway, is whether you can

make that transition. And that is exactly what I, myself, want to

consider as I consider your testimony and the answers that you

have given in the context of your background.

I must say again what I said at the outset, that if the Bush Administration had not taken actions early on, which raise questions

65

about this administration’s attitude toward a whole range of protective regulations, then there would be much less anxiety and

unease about your past statements and work in this area. If one

can imagine such a prospect, if you had been nominated by President Clinton, for instance, I think there would be less anxiety, less

concern, because of what seemed to be the clear orientation of that

administration toward these protective regulations.

Anyway, I thank you for your testimony, and I promise you that

I will give the fullest consideration to what you have said today

and the answers you have submitted for the record previous to the

hearing, and I would welcome any additional input you would care

to give to me or other Members of the Committee, either in writing

or in person, before the Committee votes. Thank you.

Chairman THOMPSON. Thank you very much. Senator Durbin.

Senator DURBIN. Thank you, Mr. Chairman.

Dr. Graham, you have used cost analysis on regulations and

rules in your professional career, and it involves something called

‘‘discounting lives.’’ Is that something, a statistical model that you

have used to evaluate the cost of rules and regulations?

Mr. GRAHAM. Yes. Discounting is commonly used in cost effectiveness and cost benefit analysis, for both health benefits and economic benefits.

Senator DURBIN. Could you, in laymen’s terms, explain what

‘‘discounting lives’’ means?

Mr. GRAHAM. Discounting lives involves applying a preference to

saving lives now as opposed to saving lives in the future.

Senator DURBIN. And so that might lead you to conclude, as you

have, that fire extinguishers in airplanes, or air bags or seat belts,

because they would prevent accidents on a more immediate basis,

would be of more value to society than some other rules and regulations that do not cost benefit out as well?

Mr. GRAHAM. I am not sure about the specific examples, but I

think your general point is right, which is that the discounting factor will end up favoring regulations that have immediate benefit.

Senator DURBIN. And here—I guess this is where I get down to

the problem, and Dr. Heinzerling, over at Georgetown Law School,

has written about this as well. I do not subscribe to that point of

view, and I voted against it when it has been proposed in this Committee. And the difficulty I have is this. Many of the things we are

talking about—dioxin, arsenic, pesticide residue and the like—may

not have an immediate impact on public health and mortality statistics, but it certainly will in the long term if you accept the

premise that exposure to some of these chemicals does ultimately

result in cancer. And so if it saves lives 10, 20 or 30 years from

now, the statistical approach of discounting lives would place less

value on it; it is not as important as dealing with today’s problems

and today’s mortality tables. And I think that is why many of us,

who think that there is an important responsibility to this government when it comes to environmental protection and public health,

worry about putting someone in with such a strong bent toward

discounting lives and the impact it will have on public health and

safety.

Would you comment on that?

66

Mr. GRAHAM. Senator, I don’t think that my convictions behind

discounting future lives are any greater or less than is typical

among decision scientists and economists who practice these analytic tools. I do think you’re raising a very good point, that you may

want to, on certain occasions, allow consideration of factors that

are outside of the economic discounting framework to influence the

regulatory choice, and I think that’s a fair comment.

Senator DURBIN. Well, your critics have said, of course, that discounting lives really does work against environmental and longterm public health goals, because the savings are not immediate.

We make a lot of decisions today that may have some benefit to

our children or to their children, and I think we consider that a

valuable part of our legacy. But if we are just measuring it by today’s benefit, how much we can benefit immediately, I think the

discounting lives approach diminishes that value.

I am going to close by just asking you for a general comment on

a statement that you made in a book that you wrote, entitled

‘‘Making Sense of Risk, an Agenda for Congress’’, 1996. And you

said in that book, ‘‘The public’s general reaction to health, safety

and environmental dangers may best be described as a syndrome

of paranoia and neglect.’’ What did you mean by that, Dr. Graham?

Mr. GRAHAM. We overreact to some risks, and we neglect others.

Senator DURBIN. And do you feel that you have taken a balanced

approach on questions like dioxin and pesticides on foods?

Mr. GRAHAM. Yes, sir.

Senator DURBIN. Thank you. Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you very much.

Does anyone else have anything further? If not, I am going to

thank you, Dr. Graham, for being here with us today, and for volunteering for this important public service. We will act expeditiously on your nomination. Thank you very much.

We are adjourned.

[Whereupon, at 1:34 p.m., the Committee was adjourned.]

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Æ