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

                                                       S. Hrg. 107- 585

                     NOMINATIONS OF: SHEILA C. BAIR
                  MARK B. McCLELLAN, MELODY H. FENNEL
                MICHAEL M.F. LIU, HENRIETTA HOLSMAN FORE
                LINDA MYSLIWY CONLIN & MICHAEL J. GARCIA

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

                                HEARINGS

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                            NOMINATIONS OF:

      SHEILA C. BAIR, OF KANSAS, TO BE ASSISTANT SECRETARY OF THE
                  TREASURY FOR FINANCIAL INSTITUTIONS

                               __________

        MARK B. MCCLELLAN, OF CALIFORNIA, TO BE A MEMBER OF THE
                      COUNCIL OF ECONOMIC ADVISERS

                               __________

        MELODY H. FENNEL, OF VIRGINIA, TO BE ASSISTANT SECRETARY
           FOR CONGRESSIONAL AND INTERGOVERNMENTAL RELATIONS
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                               __________

              MICHAEL MINORU FAWN LIU, OF ILLINOIS, TO BE
           ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                               __________

   HENRIETTA HOLSMAN FORE, OF NEVADA, TO BE DIRECTOR OF THE U.S. MINT

                               __________

          LINDA MYSLIWY CONLIN, OF NEW JERSEY, TO BE ASSISTANT
              SECRETARY OF COMMERCE FOR TRADE DEVELOPMENT

                               __________

      MICHAEL J. GARCIA, OF NEW YORK, TO BE ASSISTANT SECRETARY OF
                    COMMERCE FOR EXPORT ENFORCEMENT

                               __________

                          JULY 12 AND 26, 2001

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs

80-951              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002
____________________________________________________________________________
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  PAUL S. SARBANES, Maryland, Chairman

CHRISTOPHER J. DODD, Connecticut     PHIL GRAMM, Texas
JOHN F. KERRY, Massachusetts         RICHARD C. SHELBY, Alabama
TIM JOHNSON, South Dakota            ROBERT F. BENNETT, Utah
JACK REED, Rhode Island              WAYNE ALLARD, Colorado
CHARLES E. SCHUMER, New York         MICHAEL B. ENZI, Wyoming
EVAN BAYH, Indiana                   CHUCK HAGEL, Nebraska
JOHN EDWARDS, North Carolina         RICK SANTORUM, Pennsylvania
ZELL MILLER, Georgia                 JIM BUNNING, Kentucky
                                     MIKE CRAPO, Idaho
                                     DON NICKLES, Oklahoma

           Steven B. Harris, Staff Director and Chief Counsel
             Wayne A. Abernathy, Republican Staff Director
                  Martin J. Gruenberg, Senior Counsel
                  Jonathan Miller, Professional Staff
                   Erin Hansen, Legislative Assistant
                    Jennifer Fogel-Bublick, Counsel
      Brian J. Gross, Republican Deputy Staff Director and Counsel
   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
                       George E. Whittle, Editor

                                  (ii)
                            C O N T E N T S

                              ----------                              

                        THURSDAY, JULY 12, 2001

                                                                   Page

Opening statement of Chairman Sarbanes...........................     1

Opening statements, comments, or prepared statements of:
    Senator Dodd.................................................     4
    Senator Enzi.................................................     5
    Senator Stabenow.............................................     5
    Senator Gramm................................................    10
    Senator Miller...............................................    11
    Senator Carper...............................................    11
    Senator Ensign...............................................    14
    Senator Bennett..............................................    16

                                WITNESS

Pat Roberts, a U.S. Senator from the State of Kansas.............     2

                                NOMINEES

Sheila C. Bair, of Kansas, to be Assistant Secretary of the 
  Treasury for Financial Institutions............................     6
    Prepared statement...........................................    19
    Biographical sketch of nominee...............................    20

Mark B. McClellan, of California, to be a Member of the Council 
  of Economic Advisers...........................................     7
    Biographical sketch of nominee...............................    28

              Additional Material Supplied for the Record

Letter to Senator Paul S. Sarbanes from former Senator Bob Dole 
  in support of Sheila C. Bair, dated July 11, 2001..............    39

                              ----------                              

                        THURSDAY, JULY 26, 2001

Opening statement of Chairman Sarbanes...........................    41

Opening statements, comments, or prepared statements of:
    Senator Akaka................................................    43
    Senator Reed.................................................    44
    Senator Allard...............................................    48
    Senator Corzine..............................................    50
    Senator Ensign...............................................    63

                                WITNESS

Kay Bailey Hutchison, a U.S. Senator from the State of Texas.....    46

                                NOMINEES

Melody H. Fennel, of Virginia, to be Assistant Secretary for 
  Congressional and Intergovernmental Relations, U.S. Department 
  of Housing and Urban Development...............................    45
    Prepared statement...........................................    63
    Biographical sketch of nominee...............................    64

Michael Minoru Fawn Liu, of Illinois, to be Assistant Secretary 
  for Public and Indian Housing, U.S. Department of Housing and 
  Urban Development..............................................    46
    Prepared statement...........................................    69
    Biographical sketch of nominee...............................    70

Henrietta Holsman Fore, of Nevada, to be Director of the U.S. 
  Mint...........................................................    54
    Prepared statement...........................................    78
    Biographical sketch of nominee...............................    79

Linda Mysliwy Conlin, of New Jersey, to be Assistant Secretary of 
  Commerce for Trade Development.................................    55
    Prepared statement...........................................    87
    Biographical sketch of nominee...............................    89
    Response to written questions of Senator Reed................   105

Michael J. Garcia, of New York, to be Assistant Secretary of 
  Commerce for Export Enforcement................................    56
    Prepared statement...........................................    95
    Biographical sketch of nominee...............................    96

 
                           NOMINATIONS OF:
                       SHEILA C. BAIR, OF KANSAS
                    TO BE ASSISTANT SECRETARY OF THE
                  TREASURY FOR FINANCIAL INSTITUTIONS
                                  AND
                    MARK B. McCLELLAN, OF CALIFORNIA
                         TO BE A MEMBER OF THE
                      COUNCIL OF ECONOMIC ADVISERS

                              ----------                              

                        THURSDAY, JULY 12, 2001

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 10:05 a.m., in room SD-538 of the 
Dirksen Senate Office Building, Senator Paul S. Sarbanes 
(Chairman of the Committee) presiding.

         OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES

    Chairman Sarbanes. Let me call our hearing to order.
    The Committee has two items of business. First, we have 
five nominees that we want to report out to the floor of the 
Senate. And once we have a quorum here, we will proceed to do 
that. We are in the process of trying to gather a quorum and at 
the appropriate time, I will make a motion with respect to 
those nominees.
    Second, we are going to begin our hearing this morning on 
the additional nominations submitted by the President to the 
Senate. Sheila Bair, to be the Assistant Secretary for 
Financial Institutions in the Department of the Treasury; and 
Mark McClellan, to be a Member of the Council of Economic 
Advisers.
    Before turning to that, I just want to take a moment to 
welcome Senator Akaka to the Committee. We are very pleased 
that he has come aboard as a Member of this Committee. He has 
been a very distinguished Member of the Senate since 1990, and 
I know he has had an interest in this Committee for some time 
and we are very pleased, Dan, that you are joining us.
    Welcome to the Committee.
    I think before I make a statement, I would simply turn to 
our colleague, Senator Roberts, who is here. I know he has some 
other commitments and he wants to make an introduction.
    Pat, we would be happy to receive your introduction at this 
point.

                    STATEMENT OF PAT ROBERTS

            A U.S. SENATOR FROM THE STATE OF KANSAS

    Senator Roberts. Thank you, Mr. Chairman.
    There is no other more important commitment that I have 
than to be supportive and give testimony on behalf of my very 
good friend and our nominee from Kansas, Sheila Bair.
    Mr. Chairman, I am a poor but very proud substitute for 
Senator Bob Dole, who is recuperating from surgery and doing 
fine, thank you. I know that you will have some statements to 
read from Bob's statement of support for Sheila as well.
    Therefore, it is my very great pleasure to speak on behalf 
of the nomination as Assistant Secretary of the Treasury for 
Financial Institutions, Sheila Bair.
    Sheila is a native Kansan. She, along with her mentor, and 
mine, and I am speaking of Senator Dole, we think represent the 
values of our home State. And those values are a strong work 
ethic, which she certainly has, and a commitment to common 
sense. We think her nomination really continues the Kansas 
tradition of offering outstanding individuals to serve our 
Government.
    Many in Bob's office have certainly gone on to do that and 
they have served all the Federal agencies and our country well.
    Her career path is an ideal one for the position for which 
she is nominated. She has a strong background in Government 
service and an impressive resume in the financial services 
industry.
    After earning a law degree from the University of Kansas, 
home of the fighting and optimistic Jayhawks, Sheila began her 
civil service career as an attorney for the then-Department of 
Health, Education and Welfare, now H2S. She later served as 
Counsel to Senator Dole and as Commissioner for the Commodity 
Futures Trading Commission. She did that job very well.
    As Senior Vice President for Government Relations at the 
New York Stock Exchange, Ms. Bair gained valuable experience 
and understanding of our country's financial markets.
    As Assistant Secretary, we think that she will oversee 
policy development, as well as the coordination of the 
Treasury's legislative and regulatory issues for our country's 
financial institutions and the Federal agencies that certainly 
regulate them.
    We believe her wealth of experience in both Government and 
the financial services industry makes her an excellent choice.
    She has been a regulator. She has been a policymaker and a 
member of the financial services industry.
    Sheila has written extensively on financial, regulatory, 
and policy issues and she understands the complexities of our 
country's monetary system, as well as the challenges of 
Government service.
    So as we continue the implementation of what we call the 
Gramm-Leach-Bliley and examine the issues such as financial 
privacy and deposit insurance reform, it is critical, Mr. 
Chairman, to have individuals like Sheila who can help develop 
and implement the policies for our financial institutions and 
our regulatory agencies that reflect the intent of Congress.
    I am pleased to recommend her, a fellow Kansan, a friend, 
as the Assistant Secretary of the Treasury for Financial 
Institutions.
    Sheila, I wish you the best. I encourage a speedy 
confirmation, Mr. Chairman, of her nomination, and Bob and I 
stand in full support of the nomination. I appreciate so much 
the privilege and honor of being here.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Thank you very much, Senator Roberts. We 
appreciate your coming and your statement. You certainly may be 
excused because I know you have other commitments.
    Following up on Senator Roberts' statement, I have received 
a letter from Bob Dole indicating his regrets that he was not 
actually able to be with us, although he is doing fine, I 
understand. He submitted a statement which I will have included 
in the record.
    Without objection, it is so ordered.
    I will just quote a couple of paragraphs from it:

    In Sheila Bair, the President has chosen a talented and 
dedicated individual, someone well-suited to lead the operation 
and regulation of financial institutions, and the promotion of 
consumer access and protection in financial services. I am 
proud to offer my strong support for this nomination.

    And later on, our former colleague says:

    As I am sure many of you can recall, she was an 
irreplaceable member of my staff, someone who I had every 
confidence in, who I counted on for advice and analysis, and 
she never failed me in this role.

    For the sake of time, I will not go on and quote the 
balance of it, but it is, as one can assume, a very laudatory 
statement and we will include that in the record.
    Let me just say at the outset that we are very pleased to 
have these two nominees before us, one for a very important 
position in the Treasury and the other to help round out the 
membership of the Council of Economic Advisers.
    Pat Roberts has given a lot of the resume of Sheila Bair, 
but let me say that she has devoted a good deal of her 
professional career to Federal Government service and the other 
part of it, in a sense, working in the financial services 
industry.
    She was an attorney in the Department of Health, Education 
and Welfare, the Department of Education. She worked with Bob 
Dole on his Senate staff, as Counsel in the Senate Judiciary 
Committee, later as Deputy Counsel to the Majority Leader. 
Then, as one might anticipate, she worked on the Dole For 
President campaign.
    From 1991 to 1995, she served as a Commissioner on the 
Commodities Future Trading Commission, including a period as 
Acting Chairman.
    From 1995 on, she has worked at the New York Stock 
Exchange, first as Senior Vice President for Government 
Regulations and currently, as a Consultant to the Chairman of 
the Stock Exchange, Dick Grasso.
    She has been active in a number of professional groups--the 
American Bar Association, the Economic Club, Women in Housing 
and Finance, on the Board of the National Women's Law Center, 
and the Kansas University School of Law.
    She has written extensively on a number of matters in the 
financial field, including derivative products and their 
regulation.
    The position to which she has been nominated, of course, 
plays a vital role in making quality financial services 
available to all Americans and strengthening the financial 
service systems.
    She brings a very distinguished and varied background to 
this nomination. As Senator Roberts has indicated, she is well 
known and respected by Members, I think, on both sides of the 
aisle.
    Mr. McClellan has an exceptional background for nomination 
as a Member of the Council of Economic Advisers. He received an 
undergraduate degree from the University of Texas--a lot of 
Texas flavor to these nominees that are coming through here 
nowadays.
    [Laughter.]
    Senator Dodd. We have never seen that before.
    Chairman Sarbanes. No.
    [Laughter.]
    A Master's of Public Affairs from Harvard in 1992; a 
medical degree from Harvard in 1992; and, a Ph.D. in Economics 
from MIT in 1993. So, Mr. McClellan comes with both medical 
credentials and economic credentials.
    He was a Research Associate at Harvard Medical School's 
Department of Health Care Policy from 1991 to 1995. And since 
then, he has been at Stanford University as a Professor in the 
Department of Economics and in the Department of Medicine.
    Actually, he took a leave from Stanford in 1998 and 1999, 
to serve as Deputy Assistant Secretary for Economic Policy at 
the Treasury Department.
    As one would expect, he has written extensively on the 
economics of health care, which I gather will be a prime 
responsibility of his at the Council of Economic Advisers.
    So, I am pleased to welcome both of these nominees before 
us this morning. And before I turn to them, I will yield if 
there are any other Members of the Committee who would like to 
make a statement.
    Senator Dodd.

            COMMENTS OF SENATOR CHRISTOPHER J. DODD

    Senator Dodd. Mr. Chairman, very, very briefly. First of 
all, our congratulations to the nominees before us this 
morning. But I wanted to commend you, Mr. Chairman. I note that 
after we get a quorum here, we have five nominees who will be 
voted on later this morning. And the two nominees here, the 
pace at which we are moving, I know that Chairman Sarbanes 
subscribes to the notion that the Executive Branch ought to 
have its personnel in place.
    As a matter of fact, all of us do here.
    I know there has been some press recently about the pace of 
the confirmation process. Occasionally, there are nominations 
that cause some difficulties. That is not the case, obviously, 
with our two nominees here, nor the ones we will be voting on 
later this morning. We are going to move as quickly as we can.
    I just commend you, Mr. Chairman, for the pace and the time 
of all of this. I know that all of us on the Committee are 
anxious to be here and to support you in that effort to get 
these nominations through and to see to it that the 
Administration has the people that they need to have in place 
in order to get the job done. So, I wanted to make that point, 
if I could, to you.
    Chairman Sarbanes. Well, I appreciate that very much. I 
might ask the staff if they could sort of get in touch with 
their principals. We have seven. We need 11. If we can rustle 
up four more. I am not sure that rustle up is the right 
language.
    [Laughter.]
    Senator Dodd. We Democrats want to help this Republican 
Administration get on with it and get going here.
    [Laughter.]
    I count six of us over here.
    I want to commend our two nominees. Sheila Bair I knew 
during her years with Bob Dole.
    Let me just say, I thank both of you for doing this. We do 
not thank people enough, in my view, for a willingness to be a 
part of the public sector and go through a process such as this 
where backgrounds are explored and examined microscopically. It 
takes too long, in my view, it is too painful for people, in 
many cases. I just have the highest admiration for people who 
are willing to do this. Both of you have done it in the past. 
You have served in the past, and your willingness to step up 
again is to be commended.
    You both have wonderful backgrounds and credentials. I know 
that all of us up here will be looking forward to working with 
you as these matters come before us.
    I thank you both for your willingness to serve. It is 
appreciated very, very much.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Senator Enzi.

              COMMENTS OF SENATOR MICHAEL B. ENZI

    Senator Enzi. I just want to thank you for holding this 
hearing and for the way that you are conducting the 
Chairmanship. I very much appreciate it. I have always enjoyed 
working with you.
    Chairman Sarbanes. Thank you very much.
    Anybody else have any statements?
    Senator Dodd. Welcome, Dan.
    Chairman Sarbanes. I indicated that.
    Senator Dodd. It is hard to see you down there.
    [Laughter.]
    It is almost like being in Hawaii down there.
    [Laughter.]
    Chairman Sarbanes. Jon Corzine really feels elevated, 
though, by this development.
    [Laughter.]
    Senator Stabenow.

               COMMENT OF SENATOR DEBBIE STABENOW

    Senator Stabenow. Mr. Chairman, in fact, I was going to 
add, I feel so much more senior today than I did last week.
    [Laughter.]
    Chairman Sarbanes. Could I ask the two nominees to stand 
and take the oath?
    Do you swear or affirm that the testimony that you are 
about to give is the truth, the whole truth, and nothing but 
the truth, so help you God?
    Mr. McClellan. I do.
    Ms. Bair. I do.
    Chairman Sarbanes. Do you agree to appear and testify 
before any duly-constituted committee of the U.S. Senate?
    Mr. McClellan. I do.
    Ms. Bair. I do.
    Chairman Sarbanes. Thank you very much.
    Ms. Bair, why don't we begin with your opening statement?

             STATEMENT OF SHEILA C. BAIR, OF KANSAS
                TO BE ASSISTANT SECRETARY OF THE
              TREASURY FOR FINANCIAL INSTITUTIONS

    Ms. Bair. Thank you, Chairman Sarbanes, and Members of the 
Committee. I am very pleased to have this opportunity this 
morning to discuss my nomination to be the new Assistant 
Secretary for Financial Institutions at the Treasury 
Department.
    After hearing Senator Roberts' kind remarks and those 
quoted from Senator Bob Dole, as well as your kind remarks, 
Chairman Sarbanes, I am tempted to quit while I am ahead and 
just leave it at that. But I do have a brief statement I would 
like to make.
    Before I do anything, I would like to introduce the members 
of my family who are here with me--Scott Cooper, my husband, 
and my 8-year-old son, Preston. I also have a 17-month-old 
daughter, Colleen, who is roaming the halls with our au pair. I 
am afraid that she did not quite make it through the 
introductions, but I am very glad that they could all be here 
with me today for this very special occasion.
    Chairman Sarbanes. We are very pleased to have them here.
    Ms. Bair. Thank you, Senator.
    I would like to begin my statement by expressing my deep 
appreciation to President Bush for nominating me to this 
important position. I am honored by the confidence the White 
House has shown in me by naming me to this post and I will work 
hard to justify that confidence. I would also like to thank 
Secretary O'Neill, Deputy Secretary-Designate Ken Dam, and 
Under Secretary-Designate Peter Fisher for the support they 
have provided for my nomination. I look forward to having the 
privilege of working with them and the rest of the impressive 
team that the President has assembled, and the career staff at 
the Treasury Department.
    Next, I would like to thank Senator Dole for his support 
and help on this nomination, and all the support, advice, and 
mentoring he has provided me over the past two decades. I know 
he wanted to be here this morning and I wish him a full and 
speedy recovery from his recent surgery, as I know we all do.
    Working for Senator Dole early in my career, I was able to 
learn all the best things about being in public service. In the 
tradition of two other great Kansans, William Allen White and 
Dwight D. Eisenhower, Senator Dole's leadership in the Senate 
reflected the common sense values and pragmatic idealism so 
steeped in the politics of Middle America. From him, I learned 
that Government has a special obligation to use American 
taxpayers' dollars wisely and sparingly, wisdom that will serve 
me well at the Department of the Treasury, whose job I believe, 
first and foremost, is to protect taxpayers' funds from 
imprudent risk and wasteful expenditure. Senator Dole also 
taught me, however, that Government has a special obligation to 
help society's less fortunate and those programs to help the 
poor and the disadvantaged, if carefully targeted and 
efficiently managed, can constitute a wise and a noble use of 
taxpayer's funds.
    I come to you today with over a decade of experience 
working in public service, ranging from my first job as a civil 
rights attorney for the old Department of Health, Education and 
Welfare, to my 5 years of service to this august body on the 
staff of Senator Dole, to over 4 years as a Commissioner on the 
Commodity Futures Trading Commission, where I served as 
Chairman of the CFTC's Financial Products Advisory Committee, 
and for a while, as Chairman Sarbanes has indicated, as the 
Acting Chairman of the entire Commission.
    I have nearly 12 years of experience working with the 
financial markets, combining my years at the CFTC, with over 7 
years with the New York Stock Exchange, and 5 years as Senior 
Vice President of Government Relations. My blend of experiences 
with the NYSE and CFTC has given me valuable insights into the 
financial regulatory/policymaking process from the perspective 
of both the regulator and the regulated. It has also given me a 
broad-based understanding of the workings of financial markets 
and the financial institutions, which participate in them.
    I have a full statement I would like to submit for the 
record, but, again, just let me thank President Bush and than 
you, Chairman Sarbanes, for convening this hearing.
    These are very exciting times in the financial services 
industry and I very much look forward to working with this 
Committee and others once confirmed by the Senate.
    Thank you.
    Chairman Sarbanes. We will include the full statement in 
the record. Thank you very much for your opening statement.
    Mr. McClellan.

                 STATEMENT OF MARK B. McCLELLAN
              OF CALIFORNIA, TO BE A MEMBER OF THE
                  COUNCIL OF ECONOMIC ADVISERS

    Mr. McClellan. Mr. Chairman, and Members of the Committee, 
thank you very much for the opportunity and the honor of 
appearing here today and for taking the time for the prompt 
consideration of my nomination to the Council of Economic 
Advisers.
    I will start by introducing my wife, Stephanie McClellan. 
She is in the second row here.
    I am afraid to say that I was not quite as courageous as 
Ms. Bair. Our 2-year-old twins, Ellie and Alex, are at home 
instead of roaming the halls. But they have enjoyed the move to 
Washington.
    Chairman Sarbanes. I am sure you will tell them what they 
missed.
    [Laughter.]
    Mr. McClellan. That is right, all the excitement.
    [Laughter.]
    I also want to thank the President for the honor and trust 
he has put in me with this nomination and reaffirm my 
commitment to upholding the standards of the Council of 
Economic Advisers.
    Mr. Chairman, as you well know, careful economic analysis 
and the integration of the latest and best academic thinking 
into policymaking only can be to the good for all of the 
difficult issues that we confront in dealing with the economic 
challenges facing the country. In that respect, the Council of 
Economic Advisers has a critical role. It represents in the 
Administration the interface of academic research and real-
world policymaking. And as such, it is not a responsibility to 
be taken lightly.
    Too often in many difficult political issues, it is easy to 
take a political route rather than the often more thoughtful 
and difficult course to make sound, long-range policy 
decisions. But on the other side, too often, academics are 
removed from the realities of policymaking and all of the 
intricacies that must be considered in the difficult issues 
that we face.
    The Council of Economic Advisers has a long and storied 
history of overcoming these barriers and providing the kind of 
link between valuable policy insights from academia and the 
opportunities to actually implement them in real-world 
policymaking, as you well know, from your own background with 
the Council of Economic Advisers.
    It will be an honor and a pleasure if I have the 
opportunity to continue that tradition by working on the broad 
range of issues that come before the Council.
    Thank you very much for the opportunity to appear here 
today.
    Chairman Sarbanes. Thank you very much.
    Mr. McClellan, let me ask you. We are reading a tremendous 
amount in the press nowadays about the state of the economy. 
How do you see it? Where is it and where is it heading?
    Mr. McClellan. Obviously, Mr. Chairman, the rate of 
economic growth in the economy today is not as good as it 
should be. We think that the economy is not in recession. I 
think the consensus forecasts at this point are still for 
growth in 2001 of approximately 1.6 percent and perhaps more.
    We think that continued careful and sound monetary policy 
decisions, as well as fiscal policy decisions, can help bring 
the economic growth rate back up to a higher level that I know 
we would all like to see.
    To that end, the recent tax cut enacted by this Congress is 
expected to have an effect on boosting economic growth this 
year of about 1 percent of GDP and hopefully will have some 
long-lasting effects beyond that.
    The advice on helping to steward the economy is obviously 
one of the most important roles of the Council of Economic 
Advisers. Chairman Glenn Hubbard and all of the Members take 
that responsibility very seriously and we will continue to 
provide whatever advice we can to the President in making 
policy to improve our economic function.
    Chairman Sarbanes. Ms. Bair, Chairman Greenspan and former 
Treasury Secretary Summers each have expressed a concern 
regarding the issue of our Nation's financial literacy and 
education. It is a concern of mine and Senator Corzine has 
already undertaken a leadership role in attempting to promote 
financial literacy. And I understand that it is also a high 
priority of Senator Akaka, who has just joined our Committee 
and, indeed, of many Members of this Committee.
    Is this an area of interest to the Administration? And do 
you have any thoughts on how we can work together and what 
might be done to improve our Nation's financial literacy?
    Ms. Bair. Thank you, Mr. Chairman, because I also have a 
very strong commitment to financial education.
    My personal view is that with more and better financial 
education at much earlier ages, a lot of the regulatory 
problems and consumer abuses that we see, unfortunately, from 
time to time, could be eradicated. That is not to say that 
financial literacy is an end-all, but it is an important 
complement to any comprehensive regulatory policy to protect 
consumers in the delivery of financial services.
    Yes, my sense is, I have been a consultant for the past 4 
weeks at the Treasury Department and I am not in an official 
capacity to speak for the Administration, but sense certainly 
that this is a very high priority, at the highest levels of the 
Administration.
    I think we need a comprehensive approach and I think that 
those educational efforts must include, consistent with Senator 
Corzine's leadership, more and better financial education 
programs in the schools. Certainly at the high school level, 
perhaps sooner.
    As I think Chairman Alan Greenspan has suggested, even at 
the elementary level, certain basic economic concepts, children 
are capable of grasping and more aggressive efforts should be 
made to introduce them to those concepts at an earlier age.
    Chairman Sarbanes. A few weeks ago, The Washington Post ran 
an article that said: ``Identity theft is one of the Nation's 
fastest-growing white-collar crimes.'' What additional efforts 
should be taken to prevent this practice and, more broadly, how 
important an issue is the protection of an individual's 
financial privacy to the Administration?
    Ms. Bair. Well, again, I am not in a position to speak for 
the Administration.
    On the first question, on the question of identity theft, I 
would agree. I think it is a growing problem. Technology has 
brought wonderful innovations in the delivery of financial 
services and wonderful enhancements in the services and the 
products available to consumers. The downside is it has 
provided the means for fairly widespread dangers of identity 
theft to the detriment of the consumers that technology also 
serves. So, we need a very concentrated effort, a very focused 
effort. I think it should be a very high priority.
    On the broader question of financial privacy, it is 
interesting. To the extent that that debate involves the very 
important issue of consumers' rights to access financial data 
that is being held for them, I think we need to be careful to 
balance that since it involved on-line access with the first 
issue you raised, identity theft, and how we balance those two 
issues.
    On the broader issue of financial privacy, we have the 
important provisions for the Gramm-Leach-Bliley bill. We need 
to gather greater experience, I think, under those provisions.
    I, for one, was somewhat disappointed in the quality of the 
disclosures that some financial firms recently submitted 
pursuant to those sent out to their consumers consistent with 
the requirements of Gramm-Leach-Bliley. On the other hand, I 
think a number of financial services firms did a very good job.
    The statutory standard, however, is clear and conspicuous. 
And I think that gives the regulators adequate authority to 
deal with that discrete part of the problem.
    There are obviously broader remaining issues. People of 
goodwill still debate whether you should opt in or opt out in 
terms of information sharing, the ability of a firm to share 
information with unrelated third parties.
    I know that this is of interest to you and I look forward 
to continuing to work with you and Senator Gramm on those 
important policy questions.
    Chairman Sarbanes. Thank you very much. I see my time is 
up.
    Senator Gramm.

                STATEMENT OF SENATOR PHIL GRAMM

    Senator Gramm. Mr. Chairman, thank you. Let me apologize to 
everybody for being late. I was at the White House with the 
President when he announced his Medicare prescription drug 
initiative. Mark McClellan has been very instrumental in 
putting that together. Let me begin by congratulating him on 
that.
    Mr. Chairman, I know both of these nominees very well. I 
knew Sheila Bair when she was Commissioner of the Commodity 
Futures Trading Commission, from her work with the New York 
Stock Exchange, and when she worked for Senator Dole. It is 
hard to call up the name of anyone who has had as extensive 
experience in the public and private sector as Sheila Bair.
    I want to congratulate the President on nominating her, and 
I strongly support her and look forward to working with her.
    Ms. Bair. Thank you, Senator.
    Senator Gramm. Let me say with regard to Mark McClellan, 
that I think demonstratively he is one of the best-educated 
people on the planet.
    [Laughter.]
    How many people have both an M.D. degree from Harvard and a 
Ph.D. from MIT? My only sadness at his being here is that he 
was going to Texas A&M on a joint appointment with the 
Economics Department prior to President Bush convincing him to 
come to Washington.
    Chairman Sarbanes. He was leaving Stanford to go to Texas 
A&M?
    Senator Gramm. Yes. Of course.
    [Laughter.]
    I think I should, in all fairness, add that that is going 
home. Mark's mama is one of my closest political allies. She is 
the Comptroller in our State, and Mark is from one of our 
State's most distinguished and talented families. It is 
certainly encouraging, Mr. Chairman, when people with Mark 
McClellan's ability are willing to take time out of their 
career to come and serve the country in a position that gets 
very little attention and that, in most cases, gives you a 
marginal opportunity to have an input.
    And again, as I have said on many occasions and I know, Mr. 
Chairman, that you agree with me, it is a great testament to 
our country that we have so many good people who are willing to 
serve in so many different capacities. It is the greatest 
strength of our system that we are able to call forth the best 
and the brightest to serve the country--and they are willing to 
do it. It is kind of amazing to me, but it is true. That is 
certainly true with both of our nominees here today, and I want 
to thank them for their willingness to serve.
    Chairman Sarbanes. Senator Miller.

                 COMMENT OF SENATOR ZELL MILLER

    Senator Miller. Thank you, Mr. Chairman, but I have no 
questions at this time.
    Chairman Sarbanes. Senator Enzi.
    Senator Enzi. I also want to thank both of you for your 
willingness to serve. I am a little bit more familiar now with 
all of the paperwork that you have had to go through, including 
the process and meeting all of the people. I am pleased that I 
had an opportunity to look through some of the materials that 
you provided. I have some questions for later about the Basel 
capital standards rule and the know-your-customer regulation.
    As you all know, the Senate soundly defeated the know-your-
customer rule the last time it came up because it conflicted 
with personal rights that are guaranteed by the Constitution.
    We will be exploring that with you later. But, again, 
congratulations on your appointments and we look forward to 
working with both of you.
    Chairman Sarbanes. Thank you very much.
    Senator Carper.

              COMMENTS OF SENATOR THOMAS R. CARPER

    Senator Carper. Dr. McClellan, I had been prepared to 
support your nomination until I heard the disclosures about 
your mom and Senator Gramm.
    [Laughter.]
    I will have to look at this one more closely.
    [Laughter.]
    I just want to thank you both for going through this 
process and for your willingness to serve our country. Having 
gone through a Senate nomination process myself when I was 
Governor and nominated for the Amtrak Board of Directors, I 
have some idea of what you had to go through in terms of 
disclosures. It is just not much fun and I thank you for just 
getting to this point.
    Dr. McClellan, did you serve in the Clinton Administration?
    Mr. McClellan. Yes, sir, that is correct.
    Senator Carper. In what capacity?
    Mr. McClellan. I was a Deputy Assistant Secretary of the 
Treasury for Economic Policy. It is a position that is involved 
in providing advice and policy guidance to the Secretary of the 
Treasury on economic issues. My particular responsibilities 
focused on microeconomic issues, including health care and 
Social Security, issues like that.
    Senator Carper. Did I understand that you have had your 
hand in the development of the President's prescription drug 
proposal?
    Mr. McClellan. Yes. I have been advising the Administration 
on economic issues related to health care for some time.
    Senator Carper. All right. Well, that is good. You have had 
a foot in both camps, sort of like Norm Mineta.
    Mr. McClellan. Trying to get some bipartisanship enacted in 
policy.
    Senator Carper. That is what some of us are doing, too. 
Terrific. We look forward to supporting your nomination.
    Thank you both very much for being here. And maybe at 
another time, we will have an opportunity to talk about 
Medicare reform.
    Thank you. Good luck.
    Mr. McClellan. Thank you.
    Chairman Sarbanes. I have just a couple of questions I want 
to ask, and then I think we can probably draw the hearing to a 
close.
    Mr. McClellan, I had a talk with Secretary Evans, the 
Secretary of Commerce, the other day about Federal statistics 
and support for the various statistical agencies. It is an 
issue in which he is quite interested, I am very pleased to 
say.
    I just want to get this on the Council's radar screen. The 
Council of Economic Advisers on occasions in the past has 
played a leading role in trying to ensure adequate resources 
for the various Federal statistical agencies, recognizing, of 
course, that we make lots of decisions on the basis of those 
statistics and that, therefore, timely and relevant and 
accurate statistical information is an important part of good 
policy formulation.
    Michael Boskin, interestingly enough, when he was Chairman 
of the Council, had this as quite a high priority. He really 
made a major effort. We would like to see the Council involve 
itself in that and now that we have the Secretary of Commerce, 
who has jurisdiction over some of the statistical agencies, 
although, not all of them because the Bureau of Labor 
Statistics is outside that jurisdiction, as are some of the 
health and education statistics. Do you have any view on this 
issue of the statistical information?
    Mr. McClellan. Yes, sir. Good statistical information, 
prepared in a timely and accurate fashion, is of crucial 
importance to guiding policymaking on a whole host of economic 
issues.
    As you mentioned, getting better statistics is a high 
priority of the Secretary of Commerce. I have had a number of 
discussions with Kathleen Adams at the Commerce Department, who 
oversees many of the statistical collection activities related 
to productivity and industrial output.
    I have also had the opportunity to participate in some 
ongoing activities with the Bureau of Labor Statistics and the 
Department of Labor to try to improve employment and other 
statistics. And as a result of my background in health 
economics, I have been long involved in the analysis and the 
improvement of statistics in the health sector, everything from 
hospital market baskets to the analysis of trends in 
expenditures. One of the particular areas where I think we can 
and need to do better is in the measurement of economic output 
in the service sector.
    The health care industry is a good example of the problems 
there. It is fairly easy to measure how many visits people have 
to the doctor and how much those visits cost. It is much harder 
to measure the actual output of those kinds of services--what 
is the contribution of a visit to the doctor or hospital stay 
to the well-being of the population and to the productivity of 
the economy?
    These are areas where the CEA will be involved and I think 
we can do better in delivering more useful statistics for your 
use and those of the Congress in guiding policy analysis.
    Chairman Sarbanes. We would appreciate it if you made sure 
that this was fairly high up on the agenda of the CEA and let's 
see if we cannot work at trying to get adequate resources and 
review the statistical indices that are being kept to make sure 
that they are still relevant to the modern economy.
    And hopefully, working together, we take Federal 
statistical information to a new plateau, which I think is a 
win /win. I do not know anybody who is against it and there are 
significant benefits to be gained from it.
    I have one question to put again to you, Ms. Bair.
    The Treasury Department and the Department of Housing and 
Urban Development, in June 2000, just a year ago, issued a 
joint report curbing predatory home mortgage lending. It was a 
joint product of the two Departments. It had some very good 
analysis and some very good recommendations in it, in my 
opinion. That is an issue that this Committee intends to pursue 
and to focus on.
    I do not know whether you have had a chance to look at that 
report. But I would hope that this Treasury Department would 
carry along on the same path with respect to predatory lending 
that was first charted out here by Secretary Summers and his 
Department just over a year ago. Have you had a chance to look 
at that report, or do you have any view on the issue generally?
    Ms. Bair. I have had a chance to review it. I have not 
studied it in detail. I thought that it was an excellent report 
on my first reading. I would note that the Federal Reserve 
Board has two rule proposals out now, one amending HOPA, the 
other, the HMDA. And a number of those rule proposals were 
consistent with recommendations included in the Treasury HUD 
report. I know this is an area of deep concern to you. It is an 
area of deep concern to me as well. I look forward to working 
with you on it.
    I requested that I have some briefing materials on what was 
going on in Maryland, and Baltimore, specifically, with regard 
to the flipping practices. It made me very angry. I share your 
anger. I share your concern. And if there are additional things 
that we can do, we should.
    I think a distinction does need to be made between 
predatory lending and legitimate sub-prime lending. Obviously, 
we do not want to take measures that would have the unintended 
consequence of providing disincentives for legitimate financial 
service providers to serve economically distressed areas.
    But, again, I appreciate your concern and your work in this 
area and I look forward to working with you.
    Chairman Sarbanes. Well, good. We look forward to doing 
that.
    I am pleased with your reference to the Federal Reserve 
because they really have embarked, I think, on a very positive 
and constructive endeavor there. And I know that they are now 
in the process of formulating some regulations. We hope they 
will come to finality and make an important contribution toward 
dealing with this problem.
    We have been joined by Senator Ensign. John, did you have 
any comments?

                 COMMENT OF SENATOR JOHN ENSIGN

    Senator Ensign. No, thank you very much, Mr. Chairman.
    Chairman Sarbanes. Senator Carper.
    Senator Carper. Mr. Chairman, I just cannot let this 
opportunity pass without asking a question of Dr. McClellan.
    I leaned over and said to Governor Miller here----
    Chairman Sarbanes. It is just by chance that these two 
Governors are sitting next to each other.
    [Laughter.]
    Senator Carper. We are joined at the hip.
    [Laughter.]
    Given the work that you did in the Clinton Administration 
on Medicare, Medicare reform and, to some extent, prescription 
drugs, the role that I understand you have played in helping to 
shape the proposal of President Bush, I have been working with 
Senator Bob Graham of Florida and others.
    I have just become a cosponsor of not only his proposal, 
but also that of Senator John Breaux and Senator Bill Frist. 
One of the things that we have wrestled with in trying to 
figure out how to hold down cost to the taxpayers, is how to 
harness market forces in competition.
    In the Graham proposal, we have called for dividing the 
country into regions and inviting prescription drug benefit 
managers to come and to compete for the business in those 
various regions. And those who can negotiate the best prices 
with the drug companies, pharmaceutical companies, will 
presumably get more of the business in those respective 
regions.
    The President probably has a different proposal with 
respect to competition and how do you harness it to help 
contain our costs.
    Would you just share some quick thoughts with us on how do 
we not let this become just a runaway entitlement? How do we 
make sure that we meet the needs that are greatest out there, 
but in a way that is consistent with our budget resolution?
    We set aside $300 billion in our budget resolution to cover 
these costs. That is the forecast costs of the Graham proposal. 
I think the President is under that a little bit. But just some 
thoughts on competition, holding down our costs and providing 
the benefit.
    Mr. McClellan. Sure, I would be happy to make a few remarks 
on that. And I hope we have more opportunities to discuss these 
issues going forward.
    Senator Carper. I expect some of our centrist Democrats are 
going to try to get you to come and meet with us.
    Mr. McClellan. That would be a terrific opportunity for me.
    Senator Carper. Probably invite John Ensign, too.
    Mr. McClellan. As you mentioned, I had a chance to work on 
these issues as well in former President Clinton's 
Administration. And there, too, there were fundamental concerns 
about how we can best use competition to help seniors, to help 
keep costs down, to give them better options, but not to take 
away options that they depend on or disrupt services and 
benefits that have been their lifeblood in getting the medical 
care that they need.
    Fortunately, at this point, I think there are a lot of good 
ideas out there about how to do that. You mentioned that you 
had recently signed on to the ``Breaux-Frist II'' bill. And I 
think that is a good example of how we can start using 
competition more effectively in giving seniors reliable and 
good options for getting their guaranteed Medicare benefits.
    With respect to prescription drugs, obviously, the increase 
in costs of prescription drugs is an issue that is at the 
absolute top of the national agenda and I know is a top concern 
of the President, as well as many Democrats in this body.
    Your ideas with Senator Graham for using the best tools of 
the private sector--pharmacy benefit managers and similar 
approaches that allow people and insurance groups to pool 
together and use their buying power to negotiate competitive 
discounts from drug manufacturers--have been very successful in 
lowering costs in the private sector.
    I think actually the President feels that using private 
sector tools would be a very effective way to go. And if you 
look at all the proposals for prescription drug benefits out 
there, one of the things that they have in common is relying 
more on the kinds of tools that have proven effective in the 
private sector for getting lower cost drugs to people who have 
private insurance and improving the quality of their 
pharmaceutical use.
    I think one of the announcements that the President made 
today that Senator Gramm referenced was to try to take a step 
now to get that process going for seniors. Obviously, it is 
going to be a long and hard effort, despite all of the good 
bipartisan groundwork that has been laid, to help provide a 
prescription drug benefit in Medicare. It will take a lot of 
work and all of us rolling up our sleeves and working together 
to enact a prescription drug benefit as part of modernizing 
Medicare and bringing the program up-to-date.
    But the President believes, I think like you do, that 
seniors should have access to the kinds of tools that have 
proven so effective in private insurance plans for helping keep 
drug costs down. I think part of his announcement today was on 
that. And I know that he views that as hopefully a very useful 
basis for moving forward on the kinds of legislation that we 
need to help seniors.
    Senator Carper. Thank you.
    Yesterday, the House of Representatives passed, I think by 
a wide margin, a measure that would enable people from our 
country to buy their prescription drugs from other foreign 
countries. Any thoughts on that legislation?
    Mr. McClellan. That is an issue that I had an opportunity 
to think about in the last Administration as well because, as 
you know, similar bills passed Congress in the last 
Administration. The big concerns there are maintaining the 
safety of prescription drugs that people in this country are 
using.
    In the last Administration, Secretary Shalala and the FDA 
made a determination that importation of drugs would be 
virtually impossible to undertake in a substantial and 
systematic way, while assuring high quality drug use. It is an 
issue that bears on the Department of the Treasury as well.
    The Administration, I think, has been conducting an 
extensive review of all of the possibilities for drug 
importation and all of the obstacles that exist to making sure 
that the drugs coming back into the country are certified as 
high-quality, unadulterated, and nonexpired products.
    It is a real challenge. I think it just goes to the fact 
that we need to work as hard as we can to find effective ways 
to get lower-priced, safe, high-quality prescription drugs to 
the American public.
    Senator Carper. Mr. Chairman, it is unfortunate that 
Senator Dole is not here, with this line of questioning. I am 
sure that we can find something to talk about with him, too.
    Chairman Sarbanes. Well, yes. He has just had some surgery, 
but he is coming along fine. He did send a very laudatory 
statement which I read before you arrived.
    Senator Carper. I thank you for letting me pursue this line 
of questioning. We look forward very much to further 
discussions.
    If time permitted, Ms. Bair, I would ask you to share with 
me Treasury's thoughts on these matters, but I do not think it 
does.
    Thank you.
    Chairman Sarbanes. Senator Bennett, did you have anything?

             COMMENTS OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Mr. Chairman, I have been tied up down in 
the Appropriations Committee, so I apologize for being late.
    These two have my strong endorsement and I look forward to 
the opportunity of voting for them and then working with them 
after they take their positions.
    Chairman Sarbanes. Thank you very much.
    I want to commend the President. He sent us two nominees I 
think of high quality. We look forward to acting in a favorable 
way on your nominations.
    I had hoped that we could draw this to a close before 
Preston Bair's patience ran out.
    [Laughter.]
    But we did not accomplish that. Much to the relief of his 
father, he left the room and has gone out into the hallway.
    [Laughter.]
    Let me say to the Members of the Committee, we were not 
able to get a quorum to act on the five nominees that we wanted 
to report out today: Angela Antonelli, Chief Financial Officer 
of HUD; Jennifer Dorn, to be Federal Transit Administrator; 
Roger Ferguson, to be on the Board of Governors of the FED; 
Donald Powell, to be the Chairman of the FDIC; and Ron 
Rosenfeld, to be President of the Government National Mortgage 
Association.
    What I am going to do, I am not going to adjourn the 
Committee. I am just going to recess it. We will canvass then 
and see if there is an opportune time in which we may draw the 
Committee back together, have a quorum, and be able to report 
these people out.
    We have indicated that we want to try to cooperate with the 
Administration as best we can. We presumably will differ on 
occasions about some nominee, but to the extent we can, we will 
move these people forward and get them into place so they can 
start doing their jobs.
    So with that, I want to thank the nominees and we will 
recess. If we can work something out, we will let Members know. 
Maybe we will do it off the floor of the Senate or something of 
that sort.
    The Committee stands in recess and I thank the nominees 
very much for coming.
    [Whereupon, at 10:52 a.m., the Committee was recessed, to 
reconvene at 12:25 p.m. in room S-116 of the Capitol.]
    Chairman Sarbanes. A quorum is now present to markup the 
nominees that we had scheduled for this morning.
    Very quickly, the nominees are: Angela Antonelli, to be 
Chief Financial Officer of HUD; Jennifer Dorn, to be the 
Federal Transit Administrator; Roger Ferguson, to be a Member 
of the Board of Governors of the Federal Reserve; Donald 
Powell, to be a Member and Chairman of the Board of Directors 
of the Federal Deposit Insurance Corporation; and Ronald 
Rosenfeld, to be President of the Government National Mortgage 
Association, Ginnie Mae.
    There is no controversy. I ask unanimous consent that we 
consider all five nominations en bloc. Is that acceptable?
    Senator Bunning. Mr. Chairman, I would like to be recorded 
as voting no against one.
    Chairman Sarbanes. Okay. We will consider them en bloc, but 
register your negative vote with respect to one of the 
nominees. Is that acceptable to everybody else?
    Senator Dodd. Is there something we should know, Jim?
    Senator Bunning. Well, there is someone who is so much like 
Alan Greenspan that I cannot vote for him.
    Chairman Sarbanes. All right. The Clerk will call the roll.
    The Clerk. Chairman Sarbanes.
    Chairman Sarbanes. Aye.
    The Clerk. Mr. Dodd.
    Senator Dodd. Aye.
    The Clerk. Mr. Johnson.
    Senator Johnson. Aye.
    The Clerk. Mr. Reed.
    Senator Reed. Aye.
    The Clerk. Mr. Schumer.
    Senator Schumer. Aye.
    The Clerk. Mr. Bayh.
    Senator Bayh. Aye.
    The Clerk. Mr. Miller.
    Senator Miller. Aye.
    The Clerk. Mr. Carper.
    Senator Carper. Aye.
    The Clerk. Ms. Stabenow.
    Senator Stabenow. Aye.
    The Clerk. Mr. Corzine.
    Senator Corzine. Aye.
    The Clerk. Mr. Akaka.
    Senator Akaka. Aye.
    The Clerk. Mr. Gramm.
    Senator Gramm. Aye.
    The Clerk. Mr. Shelby.
    Senator Shelby. Aye.
    The Clerk. Mr. Bennett.
    Senator Bennett. Aye.
    The Clerk. Mr. Allard.
    Senator Allard. Aye.
    The Clerk. Mr. Enzi.
    Senator Enzi. Aye.
    The Clerk. Mr. Hagel.
    Senator Hagel. Aye.
    The Clerk. Mr. Santorum.
    Senator Santorum. Aye.
    The Clerk. Mr. Bunning.
    Senator Bunning. Aye, with the exception of Roger W. 
Ferguson, I vote no.
    The Clerk. So noted.
    Mr. Crapo.
    Senator Crapo. Aye.
    The Clerk. Mr. Ensign.
    Senator Ensign. Aye.
    The Clerk. The Ayes are 21, with the exception of Mr. Roger 
W. Ferguson, where the Ayes are 20 and 1 no.
    Chairman Sarbanes. Thank you all very much.
    Senator Gramm. Thank you, Mr. Chairman, for doing this, and 
Danny Akaka, welcome to our Committee.
    Chairman Sarbanes. This hearing is adjourned.
    [Whereupon, at 12:30 p.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of the 
nominees, and additional material supplied for the record 
follow:]

                  PREPARED STATEMENT OF SHEILA C. BAIR

                Assistant Secretary of the Treasury for
                    Financial Institutions-Designate

                             July 12, 2001
    Chairman Sarbanes, Ranking Member Gramm, and Members of the 
Committee, I am pleased to appear before you today to discuss my 
nomination to become the Assistant Secretary of the Treasury for 
Financial Institutions.
    Before I begin my statement, it might be prudent to introduce my 
family, since I think it unlikely our 17-month-old daughter, Colleen, 
is going to make it through the entire hearing. With me today are my 
husband, Scott Cooper, our 8-year-old son, Preston, Colleen, and our au 
pair, Urarat Sukahrom. I am very happy that they could all be with me 
this morning on this special occasion.
    I would like to begin my statement by expressing my deep 
appreciation to President Bush for nominating me for this important 
position. I am honored by the confidence the White House has shown in 
me by naming me to this post and I will work hard to justify that 
confidence. I would also like to thank Secretary O'Neill, Deputy 
Secretary-Designate Ken Dam, and Under Secretary-Designate Peter Fisher 
for the support they have provided for my nomination. I look forward to 
having the privilege of working with them, the rest of the impressive 
team that the President has assembled, and the well regarded career 
staff at the Treasury Department.
    Next, I would like to thank Senator Robert Dole for his support and 
help on this nomination, and all the support, advice, and mentoring he 
has provided me over the past two decades. I know he wanted to be here 
this morning and wish him a full and speedy recovery from his recent 
surgery. Working for Senator Dole early in my career, I was able to 
learn all the best things about being in public service. In the 
tradition of two other great Kansans, William Allen White and Dwight D. 
Eisenhower, Senator Dole's leadership in the Senate reflected the 
common sense values and pragmatic idealism so steeped in the politics 
of Middle America. From him, I learned that Government has a special 
obligation to use American taxpayers' dollars wisely and sparingly, 
wisdom that will serve me well at the Treasury Department whose job I 
believe, first and foremost, is to protect taxpayers' funds from 
imprudent risk and wasteful expenditure. Senator Dole also taught me, 
however, that Government has a special obligation to help society's 
less fortunate and those programs to help the poor and disadvantaged, 
if carefully targeted and efficiently managed, can constitute a wise 
and noble use of taxpayers' funds.
    I come to you today with over a decade of experience working in 
public service, ranging from my first job as a civil rights attorney 
for the old Department of Health, Education and Welfare, to my 5 years 
of service to this august body on the staff of Senator Robert Dole, to 
over 4 years as a Commissioner on the Commodity Futures Trading 
Commission, where I served as Chairman of the CFTC's Financial Products 
Advisory Committee. I have nearly 12 years experience working with the 
financial markets, combining my years at the CFTC, with over 7 years 
with the New York Stock Exchange, and 5 years as Senior Vice President 
for Government Relations. My blend of experiences with the NYSE and 
CFTC has given me valuable insights into the financial regulatory/
policymaking process from the perspective of both the regulator and the 
regulated. It has also given me a broad-based understanding of the 
workings of financial markets and the financial institutions, which 
participate in them.
    My previous experience with financial derivatives and equities will 
be helpful in dealing with the myriad public policy issues that are 
arising as traditional lines demarcating banking products from other 
types of financial products are blurring, and in some cases, 
disappearing. With financial institutions forging into new product 
lines and services in the wake of the Gramm-Leach-Bliley Act, the 
ability of financial regulators and policymakers to coordinate and work 
together cooperatively is being increasingly challenged, and I hope my 
background will help me to contribute to the development of comity and 
consistency in the regulation and oversight of our financial 
institutions. These are exciting times in the making of financial 
regulatory policy and once again, let me say how deeply grateful I am 
to President Bush for giving me this opportunity to return to public 
service. If confirmed by the Senate, I look forward to working closely 
with Members of this Committee, the House Financial Services Committee, 
and others as together we deal with the dynamic and momentous changes 
occurring in the delivery of financial services.
    Thank you very much. I would be very happy to respond to any 
questions that you might have.

                     STATEMENT OF SENATOR BOB DOLE
                             July 12, 2001

    Mr. Chairman, Members of the Committee, it is my honor and pleasure 
to have the opportunity to introduce to you today Ms. Sheila Bair--
President Bush's nominee to be Assistant Secretary of the Treasury for 
Financial Institutions.
    In Sheila Bair, the President has chosen a talented and a dedicated 
individual, someone well-suited to lead the operation and regulation of 
financial institutions, and the promotion of consumer access and the 
protection in financial services. I am proud to offer my strong support 
for this nomination.
    Sheila is a fellow Kansan, receiving her undergraduate and law 
degrees from the University of Kansas. She has many other attributes 
and I am confident you will agree with my assessment.
    I have known Sheila for the better part of the last two decades. 
Earlier in her career, she served as my Counsel on the Senate Judiciary 
Committee, handling issues including Civil and Constitutional Rights, 
Intellectual Property, and Judicial Reform. As I am sure many of you 
can recall, she was an irreplaceable member of my staff, someone who I 
had every confidence in, who I counted on for advice and analysis, and 
she never failed me in this role.
    After assisting my Presidential Campaign in 1988, she served as a 
Legislative Counsel to the New York Stock Exchange. In 1990, she waged 
a strong race as a Congressional candidate. She lost the Republican 
nomination by less than 1 percent--a total of 760 votes.
    In 1991, President Bush appointed her to the Commodities Futures 
Trading Commission. In 1993, she served as Acting Chairman, where she 
oversaw the completion of a major study on ``The Growth of Off-Exchange 
Derivatives Instruments.'' In 1994, she was reappointed to the 
Commission by President Clinton.
    In 1995, Sheila was named the Senior Vice President of the New York 
Stock Exchange, returning to Head the Government Relations Division, 
representing the Exchange on Federal, State, and local matters. During 
this time she had extensive relations with this Committee, as well as 
the House Commerce Committee and the Securities and Exchange Committee. 
Sheila remained a Consultant to the Exchange until early this year.
    I had the pleasure of traveling up to New York with her to ring the 
closing bell of the New York Stock Exchange in May of 1999. The Dow had 
just passed 10,000. I am sure many of you have been there but it was 
something I had never done before and it was a great experience.
    We need someone in this position who has knowledge of financial 
institutions and who has ``been there.'' Someone who can really add 
value to this Administration's effectiveness in promoting the interests 
of business, consumers, and ultimately the American people.
    Our financial institutions are the finest in the world. They are 
strong and dynamic and changing. Sheila's work history highlights her 
unique qualifications for serving successfully in this post at the 
Department of the Treasury. Her experience speaks for itself. Knowing 
her as a staff member, a colleague, and a friend, I can assure you the 
President has chosen a highly qualified candidate.
    Mr. Chairman, I want to thank you and the Members of this Committee 
again for affording me the opportunity to introduce Sheila and convey 
to you my strong support for her confirmation.

                            NOMINATIONS OF:

                     MELODY H. FENNEL, OF VIRGINIA
                     TO BE ASSISTANT SECRETARY FOR
                  CONGRESSIONAL AND INTERGOVERNMENTAL
                 RELATIONS, U.S. DEPARTMENT OF HOUSING
                         AND URBAN DEVELOPMENT

                  MICHAEL MINORU FAWN LIU, OF ILLINOIS
                  TO BE ASSISTANT SECRETARY FOR PUBLIC
                  AND INDIAN HOUSING, U.S. DEPARTMENT
                    OF HOUSING AND URBAN DEVELOPMENT

                   HENRIETTA HOLSMAN FORE, OF NEVADA
                    TO BE DIRECTOR OF THE U.S. MINT

                  LINDA MYSLIWY CONLIN, OF NEW JERSEY
                      TO BE ASSISTANT SECRETARY OF
                     COMMERCE FOR TRADE DEVELOPMENT

                     MICHAEL J. GARCIA, OF NEW YORK
                      TO BE ASSISTANT SECRETARY OF
                    COMMERCE FOR EXPORT ENFORCEMENT

                              ----------                              

                        THURSDAY, JULY 26, 2001

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 2:35 p.m., in room SD-538 of the 
Dirksen Senate Office Building, Senator Paul S. Sarbanes 
(Chairman of the Committee) presiding.

         OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES

    Chairman Sarbanes. The Committee will come to order.
    There is a vote on and we anticipate that other colleagues 
will be joining us, and I know there were some Senators who 
wished to introduce nominees that are before the Committee. We, 
of course, will accommodate them when they arrive.
    Today, the Senate Committee on Banking, Housing, and Urban 
Affairs will be holding nomination hearings on five nominees 
for positions in the Administration.
    Linda Conlin to be Assistant Secretary for Trade 
Development at the U.S. Department of Commerce; Melody Fennel 
to be Assistant Secretary for Congressional and 
Intergovernmental Relations at the U.S. Department of Housing 
and Urban Development; Henrietta Fore to be the Director of the 
U.S. Mint; Michael Garcia to be Assistant Secretary for Export 
Enforcement at the U.S. Department of Commerce; Michael Liu to 
be Assistant Secretary for Public and Indian Housing in the 
U.S. Department of Housing and Urban Development.
    I want to welcome all of the nominees before the Committee 
and thank them for appearing today. We appreciate the 
importance of the Administration being able to fill its top 
positions and therefore we hope to be able to act on these 
nominations in an expeditious manner. The Committee has been 
trying to do that throughout the course of the new 
Administration in an effort to help them get their people on 
the job.
    We are going to divide the five nominees into two panels. 
Our first panel will consist of the two nominees for positions 
at HUD. Afterwards, we will take the other three nominees on 
the second panel, the Director of the Mint and the two nominees 
for the Department of Commerce.
    Why don't the two HUD nominees come forward and take seats 
at the table.
    [Pause.]
    I, along with many Members of this Committee, have had the 
pleasure of working directly with our first nominee, Melody 
Fennel, who is well-known and well-respected by all Members of 
this Committee. She has worked on housing issues for the 
Committee for the past 5 years, both with Senator D'Amato and 
with Senator Gramm. Her knowledge of Congress and her 
impressive background in housing will, we believe, serve her 
well in her capacity as Assistant Secretary for Congressional 
and Intergovernmental Relations.
    Melody Fennel has worked on affordable housing issues for 
13 years in various capacities, because in addition to her time 
on the staff of this Committee, she has held positions at the 
National Council of State Housing Agencies and the National 
Association of Home Builders.
    Ms. Fennel has been a tremendous asset to this Committee 
and the work we do on housing issues. She gave us invaluable 
assistance a few years ago when we developed the Bipartisan 
Public Housing Reform legislation and she has always worked 
well with all Members of the Committee and their staffs in 
addressing the difficult issues that arise regarding housing 
and HUD.
    I think it is fair to say we will certainly miss her 
presence on the Committee, but we recognize the significant 
responsibility and indeed honor for her to serve in the 
Administration. I think we all wish her success in her new 
position. I think the view on this side of the table is that 
the Administration is very fortunate to get her.
    And if people have not yet drawn the obvious conclusion, I 
do not think this is going to be a difficult nomination.
    [Laughter.]
    Our other HUD nominee is Michael Liu, who has been 
nominated to be the Assistant Secretary for Public and Indian 
Housing. Mr. Liu also has an impressive background, having held 
office in both the Hawaii State Senate and Hawaii House of 
Representatives. He has held numerous positions in banking and 
is currently Senior Vice President for Community Investment for 
the Federal Home Loan Bank of Chicago. Prior to this position, 
he served as a Community Builder Fellow at HUD for a year. He 
previously has served in the first Bush Administration as a 
Deputy Under Secretary and a Deputy Assistant Secretary at the 
U.S. Department of Agriculture. He holds a B.A. from Stanford 
University, and a law degree from the University of Hawaii.
    Mr. Liu faces some serious challenges ahead. He will be 
responsible for overseeing the Nation's largest housing 
assistance programs, the very programs that address the needs 
of the poorest Americans. The Public Housing and Section 8 
programs are critical in meeting the needs of families who are 
otherwise unable to afford decent and safe housing.
    Both he and Ms. Fennel have their work cut out for them. I 
have expressed to both of them the need to ensure that HUD's 
programs are adequately funded. Regrettably, the 
Administration's budget request this year had serious cuts in 
the area of public housing, and I hope that with Mr. Liu's work 
as Assistant Secretary, next year's budget request will not 
underfund these necessary programs.
    I look forward to working with both of the nominees to make 
HUD's programs work more effectively, and to address the 
significant housing crisis in this country.
    Now, Senator Akaka, I know that you wanted to say a few 
words of introduction with respect to Mr. Liu, and I yield to 
you for that. Then Senator Reed, I do not know if you have any 
opening comment. We will follow along before we turn to the 
nominees.
    Senator Akaka.

              STATEMENT OF SENATOR DANIEL K. AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman.
    Senator Sarbanes, Senator Gramm, Members of the Banking 
Committee, it is a real pleasure for me to present to the 
Committee Michael M.F. Liu and to present him for confirmation 
as Assistant Secretary for Public and Indian Housing.
    I would also like to welcome Susan, Mr. Liu's wife, and 
their son, Nicholas. Hi, Nick.
    [Laughter.]
    They have traveled from their home in Illinois to attend 
this hearing today, and I want to say to Mike Liu and the 
family, aloha. Mike is well-qualified to be the Assistant 
Secretary for Public and Indian Housing, and I want you to know 
that I fully support his confirmation.
    The Office of Public and Indian Housing is vital to many 
families who benefit from housing programs. Based on Mike's 
impressive credentials in housing, banking, and public policy, 
I have every confidence in his ability to ensure that the 
Office of Public and Indian Housing achieves its mission which 
includes the implementation of public housing programs and 
coordination of departmental housing and community development 
programs for Native American Indians, Alaska Natives, and 
Native Hawaiians.
    In his current position as Senior Vice President and 
Community Investment Group Head for the Federal Home Loan Bank 
of Chicago, Mike is responsible for a number of housing 
initiatives to assist families to purchase their first home, 
build affordable housing, and help low- and moderate-income 
residents improve their communities. Mike's experience in both 
the public and in the private sectors has afforded him the 
opportunity to address many public housing issues.
    As a State legislator in Hawaii, Mike served as the Ranking 
Member of the Housing Committees in both the State House of 
Representatives and the State Senate. In addition, Mike has 
served on boards of nonprofit organizations that build 
affordable rental housing and serve tenants of public housing. 
He also was a Community Builder Fellow at the U.S. Department 
of Housing and Urban Development where he gained valuable 
insight into the operations of HUD, and firsthand knowledge of 
HUD's Section 8 voucher program.
    While I have only touched on a few areas of Mike's 
professional experience and capabilities, I believe that his 
management, financial, and housing background clearly 
illustrate his qualifications for this position. I believe he 
is an excellent choice to be Assistant Secretary for the Office 
of Public and Indian Housing. As such, I am pleased to give my 
full support to Michael Liu's confirmation as the Assistant 
Secretary, and urge the Committee to act favorably on his 
nomination.
    Thank you, Mr. Chairman and Members of the Committee.
    Chairman Sarbanes. Thank you very much, Senator Akaka.
    Senator Reed.

                 COMMENTS OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman.
    Let me welcome Mr. Liu and Ms. Fennel. You are going into a 
Department that is critical to the lives of so many Americans. 
One of the basic obligations I believe that we have is to 
provide safe, decent, affordable housing for all of our 
citizens. Frankly, we have fallen behind in that obligation. I 
know you are going to use your ingenuity and your creativity to 
try to make the programs more efficient and the reach more 
effective. But ultimately it will come down, as the Chairman 
suggested, to appropriate resources.
    I would hope, as you go forward, you would not be bashful 
about asking, indeed demanding, within the Department, with 
OMB, and the Congress for the resources that are necessary to 
keep people well-housed in this country. I thank you both.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. It is the standard procedure of the 
Committee with respect to its nomination hearings to place the 
nominees under oath, so I would ask you both now to please 
stand.
    [Witnesses sworn.]
    Chairman Sarbanes. We would be happy to hear your opening 
statement. If you have any members of your family here that you 
wish to present, we would be very pleased for you to do that. 
Why don't we start with Ms. Fennel.

           STATEMENT OF MELODY H. FENNEL, OF VIRGINIA

          TO BE ASSISTANT SECRETARY FOR CONGRESSIONAL

                AND INTERGOVERNMENTAL RELATIONS

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Ms. Fennel. Thank you, Chairman Sarbanes, Subcommittee 
Chairman Reed, and Senator Akaka. It is my pleasure to 
introduce my mother, Mary Lee Fennel, and my brother, Mark 
Fennel. I have been blessed with a family that has made many 
told, and even more untold, sacrifices for me.
    I am deeply grateful to President Bush and Secretary 
Martinez for according me the honor of this nomination. I 
anticipate the charge for which I have been nominated with 
great humility. Chairman Sarbanes, I thank you for your 
willingness to consider me for confirmation and for supporting 
the nominations process during such a busy time. Over the last 
6 years, I have staffed hearings in this very room with 
approximately 200 witnesses. This has taught me many important 
lessons. First and foremost, a witness should be brief.
    [Laughter.]
    Members of the Senate Banking Committee, I sit before you 
with true admiration, as a staff aide that has witnessed 
firsthand your steadfast dedication to your principles and the 
pursuit of what you believe is right for our fine Nation. I sit 
before my Staff Director and my colleagues on both sides of the 
aisle with great respect for their ethics, their commitment to 
public service, and their strength of spirit. I only hope that 
I will continue my service with the courage Senator Gramm, my 
wise leader, has entrusted in me.
    In 1780, Abigail Adams wrote to her son, who later became 
our sixth President, ``Justice, humanity, and benevolence are 
the duties you owe to society.'' If confirmed, it would be my 
duty to assist the President and the Secretary in providing 
this justice--a justice that proffers help to our citizens who 
are truly in need, and assures that the monies from those that 
give are used honestly and efficiently. To ensure this, a close 
relationship between the Executive and the Legislative Branches 
is essential--and while there is a necessary separation between 
the Administration and Congress, there also exists a symbiotic 
relationship that I would endeavor to strengthen. If confirmed, 
I personally pledge to you that the Administration's housing 
and economic development proposals will be presented to 
Congress in an open and forthright manner in order to ensure 
the full opportunity for a comprehensive dialogue.
    In closing, I offer my thanks to God, to His Name be the 
glory.
    Thank you.
    Chairman Sarbanes. Thank you very much.
    We have been joined by Senator Hutchison.
    Kay, are you under some time pressure?
    Senator Hutchison. Mr. Chairman, I am. I am sorry. I have a 
3 o'clock commitment.
    Chairman Sarbanes. Mr. Liu, I think that we will defer your 
statement for the moment and we will give Senator Hutchison an 
opportunity to introduce Ms. Fore.

               STATEMENT OF KAY BAILEY HUTCHISON

             A U.S. SENATOR FROM THE STATE OF TEXAS

    Senator Hutchison. Thank you so much, Mr. Chairman. I 
appreciate it very much because although I am not her Senator I 
wish she were my constituent because I have known Henrietta 
Holsman Fore quite a while.
    Chairman Sarbanes. If she would be able to become your 
constituent, we would all be in danger; we would be worried 
that we would be losing all of our constituents.
    [Laughter.]
    Senator Hutchison. This is true. We want good people in 
other States as well. As you know, she has been nominated to be 
Director of the U.S. Mint. She comes to this office very 
qualified. I have known her in an organization called ``The 
Committee of 200'' which is a businesswomen's organization of 
the leading businesswomen of our country of which Henrietta is 
one. She is President and Chairman of Stockman Products which 
manufactures and distributes steel products, cement additives, 
and wire building materials, as well as CEO of Holsman 
International, an investment and management firm.
    She has the qualifications to be the Director of the Mint, 
which I think is a management job and it is a manufacturing job 
and one that I think she will take very seriously. How we can 
be efficient and produce a quality product, and that is what we 
all want.
    She has served in several other Administration positions. 
She has been a Senior Associate at the Center for Strategic and 
International Studies, as well as being a leader in women's 
business circles in our country.
    I recommend her highly and I hope that you will look 
favorably on her nomination and expedite it at your will.
    Chairman Sarbanes. Thank you very much.
    Senator Hutchison. Thank you.
    Chairman Sarbanes. We certainly appreciate your coming and 
speaking on her behalf. I know you have to leave. We are happy 
to excuse you.
    Mr. Liu, why don't we hear your statement now?

       STATEMENT OF MICHAEL MINORU FAWN LIU, OF ILLINOIS
                 TO BE ASSISTANT SECRETARY FOR
                   PUBLIC AND INDIAN HOUSING
        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Liu. Thank you, Chairman Sarbanes, and Senator Reed. It 
is really a privilege to be able to appear before you today as 
part of the confirmation process.
    By way of reintroduction again, let me note that my wife, 
Susan Orlando Liu, and my son, Nick, are here with us.
    Chairman Sarbanes. Recording it for posterity.
    Mr. Liu. Yes, for posterity, perhaps a budding Stephen 
Spielberg in the making. But I would definitely not be here 
without their support, and enduring patience.
    My public and professional career has now spanned over 23 
years, first as a Delegate to my home State's Constitutional 
Convention, then as a State legislator, followed by work in 
community development banking and law. My upbringing includes 
living in public housing as a youngster; experiencing America's 
post-World War II transformation into a more diverse and 
tolerant society, much of that through the immigrant 
experiences of my mother; and being provided the opportunity to 
compete and to succeed in educational and career endeavors that 
have linked me to various communities on the local, State, and 
national levels.
    I am no stranger to issues affected by Public and Indian 
Housing policies as described so kindly by Senator Akaka. I 
have spent many years in the State legislature dealing with 
issues that relate to public housing. Many of my constituents 
in the districts that I represented had a tie or were tenants 
of public housing. It also included the well-established 
Department of Hawaiian Home Lands Papakolea Homestead, 
affording homeownership.
    Affordable housing, both homeownership and rental, has been 
a key area in which I have been involved for many years. While 
with the U.S. Department of Agriculture as Deputy Under 
Secretary for Small Community and Rural Development, I oversaw 
implementation of new guaranteed loan programs for both single-
family and multifamily housing in rural America. At Bank of 
America, I worked on a number of single-family mortgage and 
multifamily grant programs to help address Hawaii's high-
housing costs. In my current role as Senior Vice President and 
Community Investment Officer for the Federal Home Loan Bank of 
Chicago, I have managed an affordable housing grant program 
that allocates between $14 and $16 million annually, and a $600 
million portfolio of community investment credit projects, most 
of which are for housing. In all of these experiences, I have 
had extensive contact with housing authorities both large and 
small.
    With fundamental adjustments occurring in how the clients 
of public housing and communities at large are seeing issues 
regarding housing, a plethora of program and regulatory changes 
have been enacted. Most of these adjustments have been for the 
better, giving local, State, and Federal authorities more 
options in framing programs to match local conditions. I look 
forward to the challenge of managing these changes in 
collaboration with Public Housing's many partners. And in this 
context, I see management as including attention to the nuts 
and bolts of resource allocation for the support of Public and 
Indian Housing within HUD.
    The renewed interest in creative and efficient use of 
public housing assistance is an integral part of housing goals 
as described by Secretary Martinez before this Committee. For 
example: The use of Section 8 vouchers for down payment 
accumulation, and application of vouchers toward monthly 
mortgage expense.
    There have been great strides in addressing housing issues 
related to Indian Housing, including the ability to secure 
mortgages through an ever-growing variety of leases on tribal 
lands. I will support the coordination of efforts between and 
among the various Federal agencies with native peoples' 
programs. And more can be done, especially in the educating of 
private sector banking interests to the potential of markets 
available under programs administered by Indian Housing and the 
Office of Native American Programs.
    If fortunate enough to be honored by confirmation by the 
U.S. Senate, I will be a manager and an advocate for fair and 
common sense delivery of Public and Indian Housing program 
resources. I understand that it is important to recognize the 
past in order to effectively move into the future. I also 
understand that for the families affected by Public and Indian 
Housing, the future is often very much on the near, rather than 
on the far horizon, so that timely action must accompany 
efforts at prudent planning.
    Mr. Chairman and Members of the Committee, I appreciate 
your indulgence. This concludes my testimony. I stand ready to 
address any questions or comments you may have.
    Thank you.
    Chairman Sarbanes. Thank you very much.
    We have been joined by Senator Allard. Wayne, do you have 
an opening statement?

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I do have a brief statement. 
I would like to welcome our nominees here today and I look 
forward to their testimony. I would also like to thank you, Mr. 
Chairman, for moving the nominees so quickly through the 
Banking Committee. As Ranking Member of the Housing 
Subcommittee, I am particularly pleased to see us get nominees 
confirmed at HUD.
    I have met with most of the nominees here today. They all 
strike me as very qualified. However, I must single out Melody 
Fennel. Melody has been the Banking Committee's expert on 
housing at HUD throughout my tenure as Chairman and now Ranking 
Member of the Housing and Transportation Subcommittee. She has 
been very helpful to me and I am going to miss her a great 
deal.
    I will say, however, that it will be very nice to have an 
old hand in Congressional relations at HUD. While we will miss 
her on the Committee, we will not lose her expertise and 
talents. I look forward to continuing to work closely with her 
in the years ahead.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Very good. I have a few questions I want 
to put, first to Ms. Fennel.
    Given your experience up here, tell us what qualities or 
performances you think would be important in the Office of 
Congressional Intergovernmental Relations. What have you 
perceived from this vantage point that you can now put to work 
when you go downtown into the Department?
    Ms. Fennel. Thank you, Senator.
    My first objective for HUD's Congressional Affairs Office 
is to improve communications with the Hill. First and foremost, 
the Office should be responsive to every Member of Congress 
with accurate, complete, and timely information. That kind of 
healthy dialogue is what we need to achieve the ultimate goal 
for the Office--to work together with Congress and other 
Government entities, as well as public and private interest 
groups to improve housing and economic development situations 
in our country.
    Chairman Sarbanes. I was very much taken with the sentence 
in your statement about pledging that the Administration's 
Housing and Community Development proposals will be presented 
to Congress in an open and forthright manner in order to ensure 
the full opportunity for a comprehensive dialogue.
    I definitely concur with that, and I think that is a very 
important perception on your part, and we look forward to 
having such an open and forthright dialogue. I think it is very 
important. Obviously, anything you can do to encourage others 
in the Department to take the same attitude, we would 
appreciate.
    I have not yet heard from House Members, but conceivably 
they might get in touch with me with a concern that you might 
show favoritism toward the Senate in terms of carrying out your 
responsibilities.
    [Laughter.]
    Should they do that, what should I tell these concerned 
House Members?
    [Laughter.]
    Ms. Fennel. I do have a great appreciation for the Senate 
and it has been my home for 6 years. I am very sad in many ways 
to leave it, but I think you can assure them that all Members 
will be treated equally.
    [Laughter.]
    Chairman Sarbanes. What a good answer.
    [Laughter.]
    Mr. Liu, let me turn to you for just a couple of moments. 
You worked as a Community Builder Fellow at HUD for a year. Do 
you think that experience was beneficial and worthwhile?
    Mr. Liu. For me personally it was, sir. In fact, I was able 
to do some things specifically related to public housing. I was 
able to actually go out into the field and do some housing 
inspections under the Section 8 voucher program within the 
District, and it was very valuable. In actually seeing what 
inspectors do, I was also able to work with residents at the 
Capitol View Plaza Project in Southeast that was undergoing 
major changes because of safety issues and health issues at 
that project, and our need to relocate the residents there. So 
from that aspect, as well as from a larger sense in seeing some 
of the programs, and how they interrelated at HUD, it was a 
good experience.
    Chairman Sarbanes. Did you feel that your work as a 
Community Builder, and that of others who were there as 
Community Builders was beneficial to HUD? You have said it was 
beneficial to you. Do you feel it was of benefit to HUD?
    Mr. Liu. Mr. Chairman, I really did not get to see enough 
of the total panoply of how all of the builders were 
interrelating in other offices, so it is very difficult for me 
to say that, as a whole, it was good or bad.
    Chairman Sarbanes. Did you meet enough of the other 
Community Builders who had been appointed to form any opinion 
about how qualified or competent they were? What was your 
impression of your fellow Community Builders?
    Mr. Liu. Those I had the most interaction with were very 
committed and they were folks that had a lot of qualities and 
could make them of value to HUD. The key issue at that point in 
time was whether or not they would be provided the actual 
training in the substantive programs where they could actually 
add value, both in the field or back at headquarters.
    Chairman Sarbanes. The Administration's budget request 
proposes to reduce the Section 8 reserves from 2 months to 1 
month. That is a proposal that was made. But during the 
negotiated rulemaking on the Housing Certificate Fund, HUD 
officials said that reducing their reserves to 1 month would 
represent a serious threat to housing baseline families. Are 
you familiar with HUD's position at all in terms of doing the 
negotiated rulemaking?
    Mr. Liu. In a general fashion, sir, but I am not informed 
on the actual details of that.
    Chairman Sarbanes. I would appreciate it if, in view of 
that position, you take a very careful look at this when you go 
back to the Department. Again, it is an easy way to pick up 
some money, but it may run counter to the kind of standards we 
want to apply. If you shorten it from 2 months to 1 month, you 
are in a sense cutting the reserve you need in half. The 
rationale earlier was they needed 2 months in order to 
forestall any threat to this baseline housing, so if you would 
take a look at that, I would appreciate it.
    I see my time has expired. I yield to Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. I would just 
reemphasize again that during my tenure with Melody on the 
Housing and Transportation Subcommittee, my staff and I have 
had the pleasure of working with you on a number of occasions. 
I have always found you to be knowledgeable, dedicated, 
conscientious, and hardworking, and I hope that we will be able 
to continue to rely on you in your new capacity at HUD.
    We will have the record show that she shook her head in a 
positive manner.
    [Laughter.]
    Mr. Chairman, you so thoroughly grilled her unmercifully, I 
do not think I can add any more to your line of questioning.
    [Laughter.]
    I do have one brief question for Mr. Liu. There are a 
number of housing agencies, such as Puerto Rico, which have 
serious problems and have not been officially designated by HUD 
as troubled housing authorities. Does this concern you, and are 
you going to work with this Committee to help identify and 
clean up troubled housing authorities?
    Mr. Liu. Senator, I assure you that I will work with all 
Members of Congress, yourself, and others, and any who are 
interested in those issues. I understand there are actions 
going on right now to address some of the concerns there, and I 
hope, if I am fortunate enough to be confirmed, to be able to 
come back and report that we have made significant progress in 
those areas.
    Senator Allard. We look forward to hearing your report, and 
look forward to working with you.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Senator Corzine.

               COMMENTS OF SENATOR JON S. CORZINE

    Senator Corzine. First of all, I want to congratulate the 
nominees and look forward to working with you, if you are 
confirmed, and I expect there is a good chance of that. Let me 
actually pull in a lobbying word, something that is working its 
way back into the process that was left out of the HUD budget 
request. That is the Drug Elimination Program.
    Mr. Liu, have you had a chance to examine the program? I 
have heard from more public housing advocates and agencies in 
New Jersey with regard to this than almost any other issue with 
regard to housing. Have you had a chance to evaluate it? Do you 
have an opinion yourself ? Can I count on you to be an inside 
voice to support a program which I think, at least the 
community thinks, is very important?
    Mr. Liu. Senator, I am certainly aware that there is a lot 
of concern over that issue. I believe that based on my 
conversations with the folks over at HUD, as well as the 
Administration, that clearly there is no disagreement, I think, 
in the need to deal with the issue of drug elimination in 
relation to public housing. To the extent that we can work 
toward the common goal, certainly I will take a close look at 
the issue of resources I think HUD will do what needs to be 
done in order to address the issues of concern.
    Senator Corzine. I will just comment that we asked 
Secretary Martinez the same question at his confirmation 
hearing, and got positive remarks and then the budget had it 
eliminated, so I am somewhat insecure with regard to this 
issue. And it is something I know, at least for those in New 
Jersey, they feel very strongly about it being included as we 
go forward.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. That was a very good question. I want to 
point out that the Senate Appropriations Committee has reported 
out a bill that has virtually restored the cuts that were made 
in the public housing area in the Administration's budget, both 
on the Drug Elimination Program and on the Public Housing 
Capital Fund. And the Committee, having done that, I hope the 
Administration will now be supportive of that change.
    I think one of your biggest challenges is to ensure that 
you have sufficient resources for these programs. The Committee 
has tried to provide them and I hope the Department will pick 
up on that and carry it through.
    Let me just ask you a couple of questions about the Capital 
Fund. This money helps housing authorities repair and upgrade 
their public housing stock. And as you noted, you have had such 
stock in your districts when you were an elected member of the 
Hawaii legislature, and of course you served on the committees 
of the Hawaii legislature that dealt with housing in both the 
House and in the State Senate, as I understand it.
    The Administration, when they cut the $700 million in the 
Capital Fund, uses a justification that the public housing 
authority had unexpended capital funds. But are you familiar 
with the data? Actually, it was provided by HUD itself, which 
showed virtually all the public housing authorities are 
expending capital funds well within their statutory timeframe? 
In the Public Housing Reform Act, which I discussed earlier 
with Ms. Fennel, we put in Senator Mack, who took the lead on 
that, we worked out a provision to put the public housing 
authorities within a statutory framework in terms of obligating 
and then spending these funds so they do not spend them all at 
once. We have sort of a pipeline that we have to continue as a 
continuum. Are you familiar with the data that showed they 
really were working within that framework and not outside of 
it?
    Mr. Liu. Senator, I have had a chance to look at the 
information. I have not had a chance to digest all of the 
implications of that information. I can assure that upon 
confirmation, I will certainly be spending a significant 
portion of time ensuring that the resources that are needed to 
meet the capital requirements of public housing will be met, 
both short and long term.
    Chairman Sarbanes. Also on this very same point, the ABT 
study, A-B-T, has been cited for the proposition that public 
housing authorities are only capable of spending $2.3 billion 
annually. They do not have a more stepped-up capacity. 
Actually, the study did not say that they do not have the 
capacity to spend additional capital funds. What it said was 
that they accrue $2.3 billion in new capital needs each year. 
That is what is added onto their needs, and that they had a 
great need for additional capital funds, because they have a 
backlog of capital needs of some $22 billion.
    I hope when you go down there you will take a look. We have 
this existing housing stock. It is providing very important 
affordable housing. I think it is very important that we 
maintain it, that we not allow it to deteriorate. We have 
allowed too much of that to happen, the consequence of which 
is, we end up tearing it down. We then have the problem of 
replacing it, and the expense of replacing it. And I think it 
simply behooves us to make sure that to the extent we can, we 
keep this stock in usable condition in order to meet the 
affordable housing needs of our people.
    So the area that is within your jurisdiction is an area of 
keen interest to Members of this Committee, as you can 
appreciate yourself, having been a legislator confronting these 
affordable housing needs. We look forward to a very close 
interaction with you.
    Are there any further questions?
    [No response.]
    We thank this panel very much. We would now like to excuse 
you and ask the other three nominees to come forward.
    [Pause.]
    For our second panel this afternoon, I am pleased to 
welcome before the Committee Ms. Henrietta Fore, who has been 
nominated to be the Director of the U.S. Mint, and two nominees 
for the Commerce Department, Linda Conlin, who has been 
nominated to be Assistant Secretary for Trade Development, and 
Michael Garcia, who has been nominated to be Assistant 
Secretary of Commerce for Export Enforcement.
    Ms. Fore is a graduate of Wellesley College, received a 
master's degree in Public Administration from the University of 
Northern Colorado, has studied both at Oxford and Stanford. She 
is currently the Chairman and President of Stockton Products, a 
manufacturer of steel products, cement additives, and wire 
building materials in Las Vegas, Nevada, and is also Chairman 
and CEO of Holsman International, a DC-based investment and 
management company.
    In addition to this extensive private sector experience, 
Ms. Fore has held Presidential appointments at the U.S. Agency 
for International Development as Assistant Administrator for 
Asia and the Assistant Administrator for Private Enterprise and 
has been confirmed in both of these positions previously by the 
Senate. Actually, I sat on the Foreign Relations Committee when 
we considered those nominations.
    Since 1993, Ms. Fore has been a Senior Associate at the 
Center for Strategic and International Studies in Washington. 
She's a trustee of The Aspen Institute, The Asia Foundation, 
and the National Public Radio Foundation.
    She founded and served as first chair in the early 1990's 
of the United States-Asia Environmental Partnership, a 
coalition of business, Government, and community organizations 
from the United States and 31 Asian countries.
    Ms. Conlin received her undergraduate degree from the 
University of Massachusetts. She spent the first 10 years of 
her career serving as President of the Park-Main Travel Agency 
in Massachusetts, which I understand was a family business, 
then worked as Protocol Officer at the State Department, and as 
Corporate Liaison at the U.S. Information Agency.
    She previously served as an Assistant Secretary of Commerce 
for Tourism Marketing from 1989 to 1993 under the first 
President Bush, and then was the Executive Director for Travel 
and Tourism of the New Jersey Commerce and Economic Growth 
Commission for the balance of the 1990's. Recently, she has 
been running her own consulting company.
    Clearly, her prior service in the Commerce Department, as 
well as her service in State government should be very useful 
for overseeing the Office of Trade Development at the Commerce 
Department. The Office of Trade Development is responsible for 
conducting analysis of the different sectors of the U.S. 
economy. It has a staff of 400, including a large number of 
economists and experts on a range of U.S. industries.
    The Office of Trade Development performs the sectoral 
analysis that supports international trade negotiations carried 
on by the U.S. Trade Representative. It also oversees the 
Commerce Department's Advocacy Center, which assists U.S. 
companies in competing for contracts for major capital projects 
abroad. The Assistant Secretary for Trade Development is a very 
important part of the Commerce Department's export promotion 
efforts, something in which this Committee has taken a keen 
interest, and I am hopeful Ms. Conlin will provide the strong 
leadership which it requires.
    Finally, Mr. Garcia received his undergraduate degree from 
the State University of New York at Binghamton and his law 
degree from the Albany Law School. After law school, he worked 
for a year as an Associate Attorney in the law firm of Cahill 
Gordon & Reindel in New York, then as a Law Clerk to the 
Honorable Judith Kaye of the New York State Court of Appeals, 
one of our country's most distinguished State court judges.
    Since 1992, he served as Assistant United States Attorney 
for the Southern District of New York, which is a training 
ground--well, just let me say it seems to me to be a superb 
training ground for lots of people in Government service. In 
that capacity he has prosecuted a number of cases involving 
terrorist attacks, including the bombing of the World Trade 
Center in New York and the bombing of U.S. Embassies in Kenya 
and Tanzania. These cases have obviously given Mr. Garcia 
familiarity with the challenge of prosecuting cases in which 
foreign citizens and foreign countries are involved, as well as 
in dealing with the U.S. intelligence and national security 
communities.
    The nomination of a Federal prosecutor as Assistant 
Secretary for Export Enforcement sends a strong message that 
enforcement of our export control laws will be taken seriously 
by the Department of Commerce. We hope soon to reauthorize the 
Export Administration Act--we are working on that now in the 
Congress--to provide stronger penalties and enforcement tools 
for the very position to which Mr. Garcia has been nominated. I 
hope we will be able to move that legislation through so it 
won't be necessary for him to rely on the weaker penalties 
which are available under the International Emergency Economic 
Powers Act.
    I just want to enter into the record that I have been 
impressed thus far with the quality of people that Secretary 
Evans, the Secretary of Commerce, has attracted to the Commerce 
Department who have come before our Committee. I am very 
hopeful that these nominees will become a very strong and 
effective part of that team.
    Before we turn to your opening statements, if you could 
stand up, I will administer the oath.
    [Witnesses sworn.]
    Chairman Sarbanes. Thank you very much.
    If any of you have family here that you wish to introduce, 
we will be quite happy for you to do that.
    Mrs. Fore, why don't we start with you as Director of the 
Mint, then we will go to the Commerce Department.

              STATEMENT OF HENRIETTA HOLSMAN FORE

           OF NEVADA, TO BE DIRECTOR OF THE U.S. MINT

    Ms. Fore. Mr. Chairman, I do have family here. May I 
introduce my mother, Marta Holsman, directly behind me. She 
started me on my first coin collection. My sister, Marta 
Babson, daughter Rebecca Fore, and husband Richard Fore.
    Chairman Sarbanes. Very good. Thank you. We are very 
pleased to have you all with us.
    Ms. Fore. Senator, mindful of your time, I have submitted a 
written statement for the record, and I thought I would give 
you a shorter oral version.
    Chairman Sarbanes. That is just fine. We will include the 
full statement.
    Ms. Fore. It is a pleasure to be with you, Chairman 
Sarbanes, Senator Allard, Senator Corzine. I am honored that 
President Bush has nominated me to serve as Director of the 
Mint. The President has outlined an Administration that is 
business-like in its approach to Government. That is the 
approach that I intend to take.
    When the Senate and House assembled in 1792 in 
Philadelphia, they passed the Coin Act to set the standards for 
a mint to create the Nation's coinage and protect the Nation's 
treasure. Americans have come to expect a safe and reliable 
currency in our pockets and in our cash registers. Our currency 
must be smart, with an electromagnetic signature, and it must 
be durable, to last 30 years.
    Our coinage must tell the story of our Nation, passing 
along the chronicle of our rich heritage. I believe in the idea 
that every American should serve our country. I was pleased to 
see Senator Kay Bailey Hutchison, and I thank her for being 
here.
    I have served in business, Government, and nonprofit 
sectors. These experiences have exposed me to many different 
aspects of America's interests, and I believe they better 
prepare me for the challenge at hand.
    It would be an honor to again serve in Government, to work 
with this Committee, with your staffs, the Senate, and the 
House of Representatives.
    Thank you.
    Chairman Sarbanes. Thank you.
    Ms. Conlin.

        STATEMENT OF LINDA MYSLIWY CONLIN, OF NEW JERSEY

             TO BE ASSISTANT SECRETARY OF COMMERCE

                     FOR TRADE DEVELOPMENT

    Ms. Conlin. Thank you, Mr. Chairman.
    I would like to introduce my friends and family that are 
here with me today. My husband, Joe, in the second row, my 
father-in-law, also Joe, my Aunt Clare, and my dear friends, 
Louise Wheeler and Susan Rose.
    Chairman Sarbanes. We are pleased to have them with us.
    Ms. Conlin. Thank you, Mr. Chairman.
    Mr. Chairman, Senator Allard, Senator Corzine, it is indeed 
an honor and a privilege to appear before you today as 
President Bush's nominee to be Assistant Secretary of Commerce 
for Trade Development. I appreciate the confidence that 
President Bush has placed in me and the support of Secretary 
Don Evans and Under Secretary Grant Aldonas.
    I thank you for scheduling this hearing during a very busy 
time in the session. I appreciate your time and look forward, 
if confirmed, to working with Members and the staff of this 
Committee.
    I have welcomed the opportunity I have had these past weeks 
to visit with several of the Members who have shared their 
recommendations, as well as some of their concerns. And if 
confirmed, I would look forward to continuing the dialogue, 
meeting with you and your staff on a regular basis.
    The vision I would bring to this job, Mr. Chairman and 
Members, reflects the underlying philosophy for trade and trade 
development expressed by President Bush and Secretary Evans; 
namely, that promoting trade, encouraging the free flow of 
goods and services, capital and ideas, serves not only our 
economic interests, but also the broader interests of political 
freedom and a more stable and prosperous world.
    I do believe, Mr. Chairman, that my private sector business 
experience, as well as my 15 years in public service serving at 
both the Federal and the State level, has prepared me to take 
on this important challenge. I am, at heart, a businesswoman 
with a profound respect and enthusiasm for the creativity and 
courage it takes to own and operate your own business.
    I was blessed with a bright and gifted father who gave me 
my first job out of graduate school--the task of turning a 
marginal business into a successful and profitable $4 million 
business. In the process, I learned some very important 
business lessons and some very important life lessons which I 
hope will continue to serve me well as they have throughout my 
career. For me, creating an environment for businesses to 
succeed, as well as for the dedicated career professionals who 
serve them, will indeed be a privilege.
    If confirmed as Assistant Secretary for Trade Development, 
I will focus on three broad areas: Concentrating Trade 
Development's resources in ways that will best benefit American 
exporters; expanding the benefits of trade to small- and 
medium-sized businesses, minority-owned and women-owned 
businesses; and strengthening Trade Development's relationships 
with the business community and Government and nongovernment 
organizations involved in export promotion.
    If confirmed, therefore, I will focus the Trade Development 
team, on the things they do best: Providing critical data and 
economic analysis which represent the underpinnings of our 
trade negotiations; managing industry participation in export 
promotion events; advocating on behalf of U.S. companies 
seeking foreign government contracts, and also utilizing our 
wonderful and our marvelous Trade Information Center as the 
single point of contact within the Government to provide export 
information and counseling.
    In all of these actions, Mr. Chairman and Members, the 
Trade Development team is on the front-line of action to ensure 
that U.S. firms have the best tools and the maximum opportunity 
to compete effectively in world markets.
    I will also work to support Under Secretary Aldonas' 
commitment to extending the benefit of trade to all Americans, 
for the medium- and small-sized businesses, for minority- and 
women-owned firms. There is a tremendous opportunity here to 
reach out to new exporters, as well as encouraging existing 
exporters to enter new markets.
    Last, if confirmed, I will look forward to strengthening 
our outreach to U.S. industry, including our Industry Advisory 
Committees, the President's Export Council, as well as the many 
Federal and State departments and agencies involved in trade 
development and promotion. And in this regard, I commend the 
efforts of Chairman Sarbanes in working with Secretary Evans 
and with Under Secretary Aldonas in focusing on the important 
role of the Trade Promotion Coordinating Committee. If 
confirmed, I look forward to supporting you, Mr. Chairman, in 
maximizing the synergies of the TPCC. Helping businesses to 
succeed in the global market means helping them to navigate 
through and access the multitude of resources available.
    Finally, on a personal note, I would like to once again 
thank the important people in my life, my friends and my 
family, who have created for me an environment to succeed, and 
especially to my husband, Joe, for his love and his support 
during this time.
    I would like to once again thank President Bush, Secretary 
Evans, and Grant Aldonas for their confidence and support and 
take this opportunity to thank the Chairman and Members of the 
Committee for your time and for your consideration this 
afternoon.
    Chairman Sarbanes. Thank you very much for your thoughtful 
statement.
    Mr. Garcia.

          STATEMENT OF MICHAEL J. GARCIA, OF NEW YORK
             TO BE ASSISTANT SECRETARY OF COMMERCE
                     FOR EXPORT ENFORCEMENT

    Mr. Garcia. Thank you, Mr. Chairman.
    I would like to introduce my family. I think you may have 
heard from some of them already. This is my wife, Liana, and my 
daughter, Liana Sofia. I think my son had another meeting in 
the hallway and is no longer here, but maybe he will return.
    Chairman Sarbanes. I know that Liana Sofia has been giving 
us a running commentary.
    Mr. Garcia. All positive.
    Chairman Sarbanes. That is fine by us. Thank you.
    Mr. Garcia. Chairman Sarbanes, Senator Allard, it is a 
great honor for me to be here today as the President's nominee 
for the position of Assistant Secretary of Commerce for Export 
Enforcement. I thank both the President and Secretary Evans for 
their confidence and trust in me. If confirmed, I look forward 
to working closely with you and your staff.
    Mr. Chairman, the Bureau of Export Administration, the BXA, 
has a critical mission: Protecting, indeed, enhancing national 
security, while preserving the right of American businesses to 
export their products. I take this responsibility very, very 
seriously. If confirmed, it will be my privilege to work with 
the career law enforcement officials within BXA to fulfill our 
national security and law enforcement mission.
    As a former Federal prosecutor, I fully appreciate the 
critical importance of protecting this country's national 
security by ensuring that our sensitive technologies do not 
fall into the wrong hands. I recently successfully prosecuted 
individuals responsible for the bombings of our Embassies in 
East Africa. I know firsthand the real danger of our 
adversaries illegally obtaining U.S. products which can be used 
against our citizens worldwide.
    I look forward if confirmed to leading the enforcement arm 
of BXA and working alongside Under Secretary Ken Juster and 
Assistant Secretary Jim Jochum in advancing BXA's important 
trade control mission. I will work hard to ensure that any 
violations of U.S. dual-use exports are detected, investigated, 
and sanctioned. Together with the special agents, intelligence 
analysts, and other key enforcement staff at BXA, I will 
dedicate my tenure in Washington to the protection of national 
security through enforcement of the export laws and 
regulations.
    On a personal note, I want to again thank my wife, Liana, 
and my children for agreeing to come to Washington with me to 
serve in this Administration. I take my responsibilities 
seriously but cannot succeed, and would not be here without 
their support.
    Let me conclude by thanking the Committee for its prompt 
consideration of my nomination and by reiterating my commitment 
to work closely and cooperative with you all.
    Thank you.
    Chairman Sarbanes. Thank you very much, Mr. Garcia.
    I thank all of you for your statements.
    Ms. Fore, let me chat with you for just a few minutes here. 
Last September, Senator Gramm held a really, I thought, 
outstanding symposium in this room--I do not know whether you 
are familiar with it or not--on U.S. Coin Design. He mentioned 
at the symposium that he wanted, and I am now quoting him: ``To 
begin to look at American coinage and to begin the debate about 
whether or not we should have a new age of American coinage in 
which we seek to issue and mint coins that say something about 
America today, something about America's values, about its 
history.''
    He went on to say that he wanted our U.S. coinage to be 
representative of the greatest Nation in the history of the 
world. I agree with him in those sentiments, and I really 
applaud his efforts in trying to focus attention on the design 
of American coinage and to discuss how to improve those 
designs. In fact, I hope that you all noticed these coin 
plaques that are up on the wall. These are the State quarters. 
And as each quarter is added, a new one for a State, we add a 
plaque. We are going to have to start down the side of the 
Committee walls here. That was an idea of Senator Gramm's, and 
it turned out just by chance that the Maryland quarter ended up 
right here.
    [Laughter.]
    It was completely by chance. But that was another 
initiative of his as well. We heard at that symposium, and we 
should probably get--I presume there is still a transcript 
available of it--a copy of it to you. We heard from members of 
the numismatic community, the Smithsonian, the U.S. Mint, as 
well as coin collectors. Do you have any views on this issue 
and question of improving the design of our coins? You are in a 
strategic position as the Director of the Mint now.
    Ms. Fore. As are you, Senator. I read the 1792 Coin Act, 
and in it it mentions that on one side of the coin we should 
have an impression of an entity that is emblematic of liberty, 
as well as the word liberty. Its purpose was to do just what 
you are saying: To embody the values of this Nation. So, I like 
that idea.
    I have also noticed and have watched with interest how 
Europe is addressing the Euro and its designs. They are going 
to have bi-metallic coins, silver-and-gold, gold-and-red coins. 
I think how Americans have approached the new Sacajawea 
``Golden Dollar'' is very interesting. They are intrigued with 
the weight, the size, the color. I think it is an area that we 
should explore, and I would be very pleased to be a partner in 
exploring what coin designs could look like with you and with 
the American people.
    Chairman Sarbanes. We look forward to that. You mentioned 
the Sacajawea dollar coin that was released at the end of 
January a year ago I think it was. USA Today reported that 
fewer than half of Americans have encountered the coin, and 
most who have are saving it rather than spending it. In fact, 
they say that the Mint reported that over 800 million are in 
circulation, yet 66 percent of people save the coin and do not 
circulate it.
    Now this is kind of a disconnect.
    [Laughter.]
    Of course, one of the reasons for doing it was the vending 
machine business was quite interested in getting these dollar 
coins and getting them out and working. What, if anything, can 
be done about this? Or what is the future of this Sacajawea 
dollar coin? Do you have any thoughts on that?
    Ms. Fore. Well, I can only speculate, Senator. But I think 
the Sacajawea will have a place in our currency. I know that a 
lot of people have been collecting it. It is very shiny and 
pretty when you get ahold of one, and you are tempted to just 
put it aside, because it is different, it is unique, and the 
coin collecting hobby has really increased with interest due to 
the quarter program that you have just outlined, as well as to 
the Sacajawea golden dollar.
    So it is a good thing that people are tucking it away in 
their drawers and pockets, but we would like to get it into 
circulation. I think just as the American people, I find that I 
can use both at one time. I want to use a nice golden coin for 
a bus turnstile. It is simple, it is quick, but then at 
another, I like that nice, light, flexible dollar bill to go 
into my wallet. I suspect they can co-circulate, and we will 
have to study more what the circulation patterns and usage 
patterns are. But any suggestions by the Committee would be 
most welcome.
    Chairman Sarbanes. Thank you. I see my time is up.
    Senator Allard.
    Senator Allard. Mr. Chairman, once in a while a word is 
mentioned that makes you flashback in some history aspects. My 
State, for example, as soon as you mentioned bi-metallic, here 
in the Banking Committee, we used to have a Senator Teller from 
Colorado, known as the bi-metallic Senator, because he 
allocated not only the gold standard but also the silver 
standard, which was very important to the mineral industry in 
the State of Colorado at that particular point in time.
    I have a feeling that you may hear some industry concerns 
if you talk about a bi-metallic coin, because it does present 
some certain demands on certain minerals, and obviously it 
would have an impact on what they may cost and their value. So 
it is interesting how a term like that will make you flashback 
on some history that might be pertinent to your State.
    Another thing that is happening in Colorado right now that 
I hope you are aware of, is that we have had some recent 
problems with error coins leaving our Mint in Denver. While 
there are questions about how and why these coins are occurring 
as errors, the fact that they get out of the Mint I think 
raises some very serious security issues and concerns. My 
question is, what do you intend to do about security at our 
Nation's Mints?
    Ms. Fore. My goal for the U.S. Mint is that it is the best 
mint in the world. To be the best mint in the world, errors 
should be nonexistent. But given the enormous volume demands 
that the Mint has had in recent years, 20 to 30 billion coins a 
year, working 7 days, 24 hours, it has an enormous production 
load.
    So, I would like to address the prevention for error coins, 
how they are currently being handled, and then how they get 
into circulation both intentionally and unintentionally. I know 
that the Mint has had a senior management group that has looked 
at it. They have a study and they have an assessment. I would 
like to take a look at it and see what they have found out. It 
is an issue that I think is important, and I will certainly 
look into it.
    Senator Allard. Well, I would just reemphasize my feeling. 
I think attitudes about security starts at the top, whether we 
are talking about our military security or the State 
Department, Defense Department, the President's own staff or 
even here as head of the Mint, and I do think that you can play 
a key role in how serious Federal employees take the security 
measures. And so, I would hope that you would send a clear 
message that security is of real concern to me and I suspect to 
other Members on this Committee and hopefully yourself.
    Mr. Chairman, that is all I have. Thank you.
    Chairman Sarbanes. Thank you very much, Senator Allard.
    Ms. Conlin, one of the challenges facing the International 
Trade Administration, the ITA, is to make the bureaus 
responsible for trade promotion coordinate better. You would be 
the head of one of those bureaus, Trade Development. In 
addition, you have the U.S. Foreign and Commercial Service and 
the Market Access and Compliance people. Do you have any 
thoughts at the moment about how better coordination might be 
achieved? Not that you necessarily should. But it is a matter 
of some interest to us, because we want to see a highly 
effective, functioning Commerce Department, and I think this 
challenge that the ITA is facing is a very real one.
    Ms. Conlin. Yes, Mr. Chairman. Whether you are coordinating 
or have the challenge of coordinating the work in export 
development and promotion among Federal agencies and 
departments, or whether you are trying to coordinate it within 
a department itself, it is a challenge. And it is very 
important to make sure that we are making the best use of our 
resources.
    At our ITA family, as you have just said, Mr. Chairman, we 
have a number of units dedicated to trade development and to 
export promotion. I feel that each unit has their distinct 
strengths, as well as perhaps share some responsibilities.
    In, as you pointed out earlier, Mr. Chairman, in trade 
development, we have some very dedicated career professionals 
who provide the economic analysis and data that are the 
underpinnings for the strategies and priorities in our trade 
negotiations, as well as having people that advocate on behalf 
of businesses and help small- to medium- sized businesses.
    My sister units also are involved in working on behalf of 
American business, whether it is compliance in trade agreements 
with market access and compliance or working with small- to 
medium-sized businesses and helping them enter foreign markets 
through the U.S. and Foreign Commercial Service. So, we all 
work together. I think one of my goals in addressing Secretary 
Aldonas' priorities in the best use of those resources is to 
make sure that we as units are working very well together, 
working on our strengths but also on our shared areas of 
responsibility.
    Chairman Sarbanes. Very good.
    Mr. Garcia, have you had a chance to familiarize yourself 
with these efforts now underway in the Congress to reauthorize 
the Export Administration Act, which, of course, is very 
relevant to you and your work?
    Mr. Garcia. Yes, Senator, very briefly I have. I just 
finished a trial in New York and I came down to Washington, and 
I have been attempting to look into those things.
    Chairman Sarbanes. Well, the Administration is strongly 
supportive of the reauthorization of that Act that was reported 
out of this Committee. Now, we have run into a little heavy 
weather in the Senate, although we hope to be able to move 
ahead with respect to that. But I, obviously, encourage you to 
follow this very closely, because you will either get your 
authority to control under the Export Administration Act, or 
the Administration will have to put in a regime under the 
IEEPA, the International Economic Emergency Powers Act.
    The penalties under IEEPA are, in fact, less than the 
penalties we would be providing in the legislation that we have 
brought out of this Committee. And the regime is different. We 
think that it is an improvement in the regime. But I would 
think one of your first responsibilities once you get in down 
there is going to be to really get right up to speed on this 
legislation. Actually, we are operating under a 1 year 
extension of the Export Administration Act which expires in 
August.
    If it expires and we have not replaced it, the President 
will have to invoke IEEPA, put a regime into place, which 
presumably you will be involved in helping to develop. That is 
not as good a regime in my opinion, and I think in the opinion 
of most of my colleagues. And the authorities that are 
available to you under IEEPA would be less than what we are 
trying to provide in the statute.
    I think this is going to be an important item that is going 
to be on the forefront of your agenda, because it is going to 
establish the whole framework within which you operate so that 
whatever the specific case is you are trying to deal with in 
export control is going to relate back to this statutory 
framework. So, I think it really behooves you to take an 
interest to try to get it set right if you possibly can.
    The Administration has reviewed this very carefully, and 
they are supportive of our legislation. We have received 
letters from the National Security Adviser. The President has 
made public statements about it. The Secretary of Commerce is 
very strongly in favor of it, and Senator Daschle has indicated 
an intention to try to move it, so we will see how we can do up 
here on it.
    Mr. Garcia. Mr. Chairman.
    Chairman Sarbanes. Go ahead.
    Mr. Garcia. I have looked at those provisions on the 
penalties in the new legislation. I understand the increases. 
And it also would provide permanent law enforcement authority 
for the agents in export enforcement, which I think is very 
important, so that they do not go back to the position where 
they have to be re-deputized as U.S. Marshals.
    I think it is important for their law enforcement function 
and for the morale of the unit and the important work they do 
that they receive that permanent law enforcement certification.
    Senator Allard. Mr. Chairman, I would just like to add on 
to your comments a little bit. One thing that we consistently 
hear from exporters, particularly those issues where it might 
deal with dual-use items--they have a military purpose, as well 
as domestic purpose--is the length of time it takes to get 
approval. I know that from past studies, I think, for example, 
on the Armed Services list, there are some 9,000 items. Some of 
them, if you look that over, do not make a lot of sense. I am 
not sure whether that is under your jurisdiction. But the thing 
that I think that you ought to be aware of is that they are 
concerned about the considerable length of time. You will have 
to go through three separate agencies many times for approval--
Departments of State and Commerce, as well as the Department of 
Defense. Sometimes when you are in a highly competitive in an 
international market and you cannot give a specific indication 
the businessman that you are dealing with in the foreign 
country as to when you may be able to have a decision. Lots of 
times that is all they ask for is a timeline so they can make 
plans on the other end, it does make it very difficult to 
compete internationally.
    I do think I would agree with the Chairman it is an 
important piece of legislation. It was reported out of 
Committee here nearly unanimously. I know it had a lot of 
support here in the Banking Committee.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Thank you.
    Mr. Garcia, I would like to ask you, just for my own 
personal curiosity, a couple of questions about the work you 
have been doing. The bombings of the Embassy in Nairobi and in 
Dar es Salaam were part of an Osama bin Laden enterprise. Is 
that right?
    Mr. Garcia. That is correct, Mr. Chairman.
    Chairman Sarbanes. Now what about the World Trade Center in 
Manhattan?
    Mr. Garcia. Mr. Chairman, there is no public link between 
the bombing of the World Trade Center that took place in 1993 
and the 1998 bombings of our embassies in East Africa. What you 
do see is a similar training path. People travel into training 
camps, obtaining this type of training, of activity, bomb-
building, and using that in terrorist acts against the United 
States. So while there is no direct link to the group, there 
certainly is a link between the types of training that is 
obtained.
    Chairman Sarbanes. Okay. Well, as I said at the outset, 
that is terrific training at the U.S. Attorney's Office for the 
Southern District of New York. And we are pleased now you are 
coming into Washington to put that expertise to work for us.
    Mr. Garcia. Thank you, Mr. Chairman.
    Chairman Sarbanes. We appreciate all three nominees coming 
before the Committee. I am hopeful we can markup these nominees 
in the Committee the first part of next week, which would 
enable us to report them to the Senate floor in time, I would 
hope, for action to be taken by the Senate with respect to your 
nominations before the Senate goes out for the August recess, 
so that your nominations would not carry over into September 
and we could move ahead to get you on the job. I cannot 
guarantee that outcome, but that is what we will try to 
accomplish.
    Thank you all very much for coming today. We appreciate it.
    The hearing is adjourned.
    [Whereupon, at 3:55 p.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of the 
nominees, and response to written questions supplied for the 
record follow:]

               PREPARED STATEMENT OF SENATOR JOHN ENSIGN
              ON THE NOMINATION OF HENRIETTA HOLSMAN FORE
                  TO BE THE DIRECTOR OF THE U.S. MINT

    Thank you, Mr. Chairman, for allowing me the opportunity to speak 
before the Committee today. It is my pleasure to welcome Ms. Henrietta 
Holsman Fore this afternoon before the Senate Banking Committee and to 
offer my recommendation for her appointment to the position of Director 
of the U.S. Mint.
    Ms. Fore is a fellow Nevadan and a continual leader. Having held 
previous Presidential appointments, Ms. Fore knows and surpasses the 
requisite criteria. Her reputation and background as a leader are 
beyond reproach. She has served since 1993 as Chairman of the Board and 
President of an international corporation in Las Vegas, Nevada, and 
also serves as the Chairman and Chief Executive Officer of Holsman 
International in Washington, DC. From 1990 to 1993, she served as 
Assistant Administrator in the Bureau for Private Enterprises and the 
Assistant Administrator in the Bureau for Asia. Ms. Fore is a graduate 
of Wellesley College and received a Master's in Public Administration 
from the University of Northern Colorado. With her years of nationwide 
experience, both in Government service and the private sector, she has 
refined the ingenuity and expertise that will enable her to excel as 
Director of the U.S. Mint.
    I urge my colleagues on the Senate Banking Committee to support the 
nomination of Ms. Henrietta Holsman Fore for Director of the U.S. Mint. 
I am proud to introduce her today as both a leader of this community 
and as a fellow Nevadan. I thank you, Mr. Chairman, for allowing me to 
speak on her behalf today.

                               ----------

                 PREPARED STATEMENT OF MELODY H. FENNEL
           Assistant Secretary-Designate of Congressional and
                      Intergovernmental Relations
            U.S. Department of Housing and Urban Development
                             July 26, 2001

    Chairman Sarbanes, Senator Gramm, and Members of the Committee:
    It is my pleasure to introduce my mother, Mary Lee Fennel, and my 
brother Mark Fennel. I have been blessed with a family that has made 
many told, and even more untold, sacrifices for me.
    I am deeply grateful to President Bush and Secretary Martinez for 
according me the honor of this nomination. I anticipate the charge for 
which I have been nominated with great humility. Chairman Sarbanes, I 
thank you for your willingness to consider me for confirmation and for 
supporting the nominations process during such a busy time.
    Members of the Committee, I sit before you with true admiration, as 
a staff aide that has witnessed your steadfast dedication to your 
principles and the pursuit of what you believe is right for our fine 
Nation. I sit before my Staff Director and colleagues on both sides of 
the aisle with great respect for their ethics, their commitment to 
public service, and their strength of spirit. Senator Allard, it has 
been a privilege to serve you as you presided over complex housing 
issues with alacrity. Senator Gramm, my wise leader, I sit before you 
with great appreciation for the honor of having represented you. Thank 
you for allowing me the privilege of serving you and the American 
people. I only hope that I will continue my service with your badge of 
courage upon me.
    In 1780, Abigail Adams wrote to her son, who later became our sixth 
President, ``. . . Justice, humanity, and benevolence are the duties 
you owe to society. . . .'' If confirmed, it would be my duty to assist 
the President and the Secretary in the provision of this justice --a 
justice that proffers help to our citizens whom are truly in need, and 
assures that the monies from those that give are used honestly and 
efficiently. To ensure this, a close relationship between the Executive 
and Legislative Branches is essential--and while there is of course an 
important separation between the two, there also exists a natural 
concomitance. If confirmed, I personally pledge to you that the 
Administration's housing and community development proposals will be 
presented to Congress in an open and forthright manner--in order to 
ensure the full opportunity for a comprehensive dialogue.
    In closing, I offer my thanks to God, to his name be the glory.
    Thank you.

    
    
             PREPARED STATEMENT OF MICHAEL MINORU FAWN LIU
      Assistant Secretary-Designate for Public and Indian Housing
            U.S. Department of Housing and Urban Development
                             July 26, 2001

    Chairman Sarbanes, Ranking Member Gramm, Distinguished Senators. It 
is a privilege to be able to appear before you today as part of the 
confirmation process for the position that I have been nominated.
    By way of introduction, let me first note that my wife, Susan 
Orlando Liu, and my 9-year-old son, Nicholas, join us in this hearing. 
I would definitely not be here without their support, and enduring 
patience.
    My public and professional career has now spanned over 23 years, 
first as a Delegate to my home State's Constitutional Convention, then 
as a State legislator, followed by work in community development 
banking and law. My upbringing includes living in public housing as a 
youngster; experiencing America's post-World War II transformation into 
a more diverse and tolerant society through the immigrant experiences 
of my mother; and being provided the opportunity to compete and succeed 
in educational and career endeavors that have linked me to various 
communities on local, State, and national levels.
    I am no stranger to issues affected by Public and Indian Housing 
policies. As a State Representative in Hawaii, my district included one 
of the largest subsidized housing projects in Honolulu (Kukui Gardens), 
as well as one of the most distressed (Mayor WrightHousing). It 
included the well-established Department of Hawaiian Home Lands 
Papakolea Homestead. In recognition of constituent needs, I sought and 
have retained membership on the Housing and Health and Human Services 
Committee for 8 years, and another 2 years on the same committee in the 
Hawaii State Senate.
    Affordable housing, both homeownership and rental, has been a key 
area in which I have been involved for many years. While with the U.S. 
Department of Agriculture (USDA) as Deputy Under Secretary for Small 
Community and Rural Development (1991-1993), I oversaw implementation 
of new guaranteed loan programs for both single-family and multifamily 
housing in rural America. At Bank of America (1993-1997), I worked on a 
number of single-family mortgage and multifamily grant programs to help 
address Hawaii's high housing costs. In my current role as Senior Vice 
President and Community Investment Officer for the Federal Home Loan 
Bank of Chicago, I have managed an affordable housing grant program 
that allocates between $14 and $16 million annually, and a $600 million 
portfolio of community investment credit projects, most of which are 
for housing. In all of these experiences I have had extensive contact 
with housing authorities both large and small.
    With fundamental adjustments occurring in how the clients of public 
housing and communities at large are seeing issues regarding housing, a 
plethora of program and regulatory changes have been enacted. Most of 
these adjustments have been for the better, giving local, State, and 
Federal authorities more options in framing programs to match local 
conditions. I look forward to the challenge of managing these changes 
in collaboration with Public Housing's many partners. And in this 
context, I see management as including attention to the nuts and bolts 
of resource allocation for the support of Public and Indian Housing 
within HUD.
    The renewed interest in creative and efficient use of public 
housing assistance is an integral part of housing goals as described by 
Secretary Martinez before this Committee. For example: The use of 
Section 8 vouchers for down payment accumulation, and application of 
vouchers toward monthly mortgage expense.
    There have been great strides in addressing housing issues related 
to Indian Housing, including the ability to secure mortgages through an 
ever-growing variety of leases on tribal lands. I will support the 
coordination of efforts between and among the various Federal agencies 
with native peoples' programs. And more can be done, especially in the 
educating of private sector banking interests to the potential of 
markets available under programs administered by Indian Housing and the 
Office of Native American Programs.
    If fortunate enough to be confirmed by the U.S. Senate, I will be a 
manager and advocate for fair and common sense delivery of Public and 
Indian Housing program resources. I understand that it is important to 
recognize the past in order to effectively move into the future. I also 
understand that for the families affected by Public and Indian Housing, 
the future is often very much on the near, rather than on the far 
horizon, so that timely action must accompany efforts at prudent 
planning.
    Mr. Chairman and Members of the Committee, I appreciate your 
indulgence. I stand ready to address any questions or comments you may 
have.
    Thank you.

    
    
              PREPARED STATEMENT OF HENRIETTA HOLSMAN FORE
                  Director-Designate of the U.S. Mint
                             July 26, 2001

    Thank you, Chairman Sarbanes, Ranking Member Gramm, and Members of 
the Committee on Banking, Housing, and Urban Affairs. I am honored that 
President Bush has nominated me to serve as Director of the Mint and I 
thank you for the privilege of appearing here today. If confirmed, I 
will have the opportunity and the challenge to work with Treasury's 
Secretary Paul O'Neill and to meet his high standards for operating a 
world class production facility. I will work to deliver the benefits of 
quality, efficiency, and worker safety. President Bush has outlined an 
administration that is business-like in its approach to Government. 
That is the approach I intend to take.
    Americans have come to expect a safe and reliable currency in our 
pockets, in our cash registers, in the vending machines, and in the 
transit fare turnstiles across our Nation. Our currency must be smart, 
with an electromagnetic signature; it must be durable to last through 
30 years of trips to the beach, fast food counters, and through laundry 
machines. And our coinage must tell the story of our Nation, passing 
along the chronicle of our Nation's rich heritage. We have a 
responsibility to educate the public about their history, for it was an 
urgent, but not a simple matter when the Senate and the House assembled 
in 1792, and set the standards for a Mint to create the Nation's 
coinage. The Coin Act also required the Mint to protect and to account 
for the Nation's treasure, which it still does today. And I will have a 
challenge to encourage and to maintain the enthusiasm of the coin 
collecting community.
    If confirmed, I look forward to working closely with this 
Committee, the Senate, and with members of the House of 
Representatives. I have had the pleasure of working with you before and 
look forward to doing so again. I believe in the idea that every 
American should serve their Nation's interests and should bring with 
them the ideas of other arenas. For me, those arenas are business and 
nonprofit.
    I was born in Chicago, Illinois, grew up in California, and in 
1970, graduated from Wellesley College. I worked in General Services 
Administration and received a Masters in Public Administration from the 
University of Northern Colorado. For the past 24 years I have managed 
and owned a wire and metal products manufacturing company servicing the 
construction industry with factories in Nevada, Arizona, and 
California. From 1989 -1993, I served in the U.S. Agency for 
International Development and was confined twice by the Senate, once as 
Assistant Administrator for Private Enterprise and once as Assistant 
Administrator for Asia. Since that time, I have served on several 
nonprofit and public corporate boards, traveled, and run my business. 
These experiences have exposed me to different aspects of America's 
interests that, I believe, better prepare me for the challenge at hand. 
It would be an honor to again serve in Government.
    Thank you, Mr. Chairman. I would be pleased to answer any 
questions.

               PREPARED STATEMENT OF LINDA MYSLIWY CONLIN
          Assistant Secretary-Designate for Trade Development
                      U.S. Department of Commerce
                             July 26, 2001

    Mr. Chairman, Senator Gramm, and Members of the Committee, it is an 
honor and a privilege to appear before you today as President Bush's 
nominee to be Assistant Secretary for Trade Development. I appreciate 
the confidence President Bush has placed in me and the support of 
Secretary Don Evans and Under Secretary Grant Aldonas. Thank you for 
scheduling this hearing during a very busy time in the session. I 
appreciate your time and look forward, if confirmed, to working with 
the Members and staff of this Committee.
    It is an honor to appear before the Committee this afternoon. I 
have appreciated the opportunity I have had these past weeks to visit 
with several of the Members who have shared their recommendations, as 
well as some concerns. If confirmed, I would look forward to continuing 
the dialogue, meeting with you and your staff on a regular basis. We 
are all stakeholders who share common goals of a vibrant economy for 
the American people and business community. It is only through 
consistent communication, cooperation, and collaboration between all 
that these goals can be achieved.
    The vision I would bring to this job was best described by 
Secretary Evans when he spoke of President Bush's trade policy goals: 
``Free minds and free markets are essential to achieving a better and 
brighter tomorrow. . . . Our economic, social, and political freedoms 
are woven together into a single fabric that allows every human being 
to pursue the visions and dreams they have in their hearts. That 
understanding is the cornerstone for our trade policy.''
    Secretary Evans went on to say, ``What Government can do is create 
the environment for people to succeed.'' If reported favorably by this 
Committee and confirmed by the Senate, as Assistant Secretary for Trade 
Development, I will be committed to helping U.S. businesses succeed in 
expanding exports and the jobs they create. I will also work to provide 
an environment to succeed for the dedicated professionals of the Trade 
Development staff at Commerce who serve as this Nation's day-to-day 
link to U.S. industry for trade policy development and promotion.
    I believe that my business experience, as well as my years in 
public service, serving at both the Federal and State level, has 
prepared me to take on this important challenge. I am, at heart, a 
businesswoman with a profound respect and enthusiasm for the creativity 
and courage it takes to own and to operate a successful business. I was 
blessed with a bright and gifted father who gave me my first job out of 
graduate school--the task of turning a small company into a four 
million dollar business. In the process, I learned important business 
and life lessons, which I hope, will continue to serve me well as they 
have throughout my career.
    My career in public service spans some 15 years, including 9 years 
overseeing tourism trade development and promotion at the Department of 
Commerce, and later at New Jersey's Commerce Department. I am pleased 
to say that on both Federal and State levels, we created an innovative 
and effective program to assist small- and medium-sized tourism 
businesses in breaking new ground in key international markets.
    If confirmed as Assistant Secretary for Trade Development, I will 
focus on three specific areas: Concentrate Trade Development resources 
to best benefit American exporters, expand the benefits of trade to 
small- and medium-sized businesses, and strengthen Trade Development's 
outreach programs to the business industry.
    First, I will work with the Trade Development team to focus on 
priorities outlined by Under Secretary Aldonas when he met before this 
Committee, namely, ``to expand opportunities for American business (by) 
concentrating resources in ways that are likely to provide the greatest 
pay-off for American businesses trying to gain access to world markets. 
. . identifying promising targets for our exporters and providing the 
support to reach those markets.''
    In this regard, the Trade Development area shares the 
responsibility for export assistance and promotion with our sister 
units within the International Trade Administration--the domestic and 
foreign offices of the U.S. and Foreign Commercial Service, the Market 
Access and Compliance team, and the Import Administration. Trade 
Development's role in this family, however, is distinct. Trade 
Development's industry sector offices devise export assistance 
programs, export strategies and trade events tailored to the needs of 
individual industries. Trade Development also serves as the principal 
link for industry input, data, and economic analysis, which form the 
foundation for the development of our trade agreements and monitoring 
of their impact. The work of Trade Development's industry experts 
provides the foundation for the President's trade negotiators in 
multilateral or bilateral fora--both for trade liberalization and 
retaliation. Finally, we work closely with our sister-offices in ITA to 
ensure foreign countries' compliance with sector-specific international 
trade agreements.
    Whether it is providing critical data and economic analysis which 
represent the underpinnings of these trade negotiations, managing 
industry participation in trade missions, or advocating on behalf of 
U.S. companies seeking foreign government contracts, the trade 
development team is on the frontline of action to ensure that U.S. 
firms have the maximum opportunity to compete effectively in world 
markets. Trade Development's industry experts and trade specialists 
span the gamut of U.S. business sectors--from basic manufacturing to 
high-technology and service exports.
    Trade Development is also home to the Trade Information Center 
(TIC), which was established by the Trade Promotion Coordinating 
Committee. The TIC provides a wealth of export information and a single 
point of contact within Government for export assistance and 
counseling. We have tremendous resources and talent within the Trade 
Development program. If confirmed, I will work to marshall those 
resources for the greatest benefit, working in concert and 
collaboration with our ITA and USTR colleagues.
    Second, I will work to support Under Secretary Aldonas' commitment 
to ``expanding the benefits of trade to all Americans,'' for small- and 
medium-sized businesses, including minority-owned businesses. There is 
tremendous opportunity here when you consider that small- and medium-
sized businesses account for some 97 percent of all U.S. exporters, but 
only 30 percent of U.S. merchandise exports. Nearly two-thirds of these 
exporters, however, post sales to only one foreign market. Encouraging 
these exporters to expand to other markets represents an enormous 
growth opportunity.
    Third, if confirmed, I will work toward further strengthening our 
outreach to industry, including our industry advisory committees and 
the President's Export Council, as well as the many Federal and State 
departments and agencies involved in trade development and promotion. 
In this regard, I commend the efforts of Chairman Sarbanes in working 
with Secretary Evans and Under Secretary Aldonas in focusing on the 
important role of the Trade Promotion Coordinating Committee (TPCC). If 
confirmed, I look forward to supporting him in maximizing the synergies 
of the TPCC. Helping businesses to succeed in the global market means 
helping them navigate through and access the multitude of resources 
available.
    On a personal note, I would like to thank the important people in 
my life who have created an environment for me to succeed. I would like 
to take this opportunity to thank my family and friends, many of who 
are here today. Without their support I would not be able to take on 
this incredible responsibility. I would like to thank my mother, and my 
father, who sadly is no longer with us. I will be forever grateful for 
his trust and inspiration. I would like to thank my mother-in-law for 
her confidence and her prayers. She was a true friend and was always 
there for me. Two weeks ago, she lost her courageous battle with 
multiple myeloma. I will be forever grateful to my father-in-law and 
above all to my husband, Joe, for their love and support, especially 
during this difficult period.
    In closing, I would like to take this opportunity to thank the 
Chairman, Senator Gramm, and other Members of the Committee for your 
time and consideration this afternoon.

                PREPARED STATEMENT OF MICHAEL J. GARCIA
          Assistant Secretary-Designate for Export Enforcement
                      U.S. Department of Commerce
                             July 26, 2001

    Chairman Sarbanes, Senator Gramm, and Members of the Committee: It 
is a great honor for me to be here today as the President's nominee for 
the position of Assistant Secretary of Commerce for Export Enforcement. 
I thank the President and Secretary Evans for their confidence and 
trust in me. If confirmed, I will look forward to working closely with 
you and your staff.
    Mr. Chairman, the Bureau of Export Administration (BXA) has a 
critical mission: Protecting, and indeed enhancing, national security 
while preserving the right of American businesses to export their 
products. I take this responsibility very seriously. If confirmed, it 
will be my privilege to work with the career law enforcement officials 
within BXA to fulfill our national security and law enforcement 
mission.
    As a former Federal prosecutor, I fully appreciate the critical 
importance of protecting this country's national security by ensuring 
that our sensitive technologies do not fall into the wrong hands. 
Recently, I successfully prosecuted individuals responsible for the 
bombings of our Embassies in East Africa. I know firsthand the real 
danger of our adversaries illegally obtaining U.S. products which can 
be used against our citizens worldwide.
    I look forward to leading the enforcement arm of BXA and working 
alongside Under Secretary Ken Juster and Assistant Secretary Jim Jochum 
in advancing BXA's important trade control mission. I will work hard to 
ensure that any violations of U.S. dual-use exports are detected, 
investigated, and sanctioned. Together with the special agents, 
intelligence analysts, and other key enforcement staff in BXA, I will 
dedicate my tenure in Washington to the protection of national security 
through enforcement of the export laws and regulations.
    On a personal note, I want to thank my wife, Liana, and my 
children, Manuel Jose and Liana Sofia, who are in the audience today, 
for agreeing to come to Washington with me to serve in this 
Administration. I will take my responsibilities seriously but cannot 
succeed, and would not be here, without their love and support.
    Let me conclude by thanking the Committee for its prompt 
consideration of my nomination and by reiterating my commitment to work 
closely and cooperatively with you.

 RESPONSE TO WRITTEN QUESTIONS OF SENATOR JACK REED FROM LINDA 
                         MYSLIWY CONLIN

    As you may or may not know, the jewelry industry in the 
past was fairly large and competitive in the State of Rhode 
Island. Over the last couple of decades, competition from 
abroad, specifically Asia, has had a decimating effect on the 
industry as a whole.

Q.1. What do you think we can do to try to maintain the 
competitiveness of this industry in this country?

A.1. In March 1997, the Department of Commerce published ``The 
U.S. Jewelry Industry: Federal Interagency Report on U.S. 
Jewelry Competitiveness Issues.'' The study found that many 
competitive issues facing the U.S. jewelry industry stem from 
broad economic trends over which neither the industry nor the 
Federal Government has much control.
    While this conclusion remains valid today, this study also 
recommended a number of steps to improve the industry's 
competitiveness. One of these was to expand sales through 
increased exports, and Commerce has worked with the industry to 
do just that. The Commerce Department to date sponsored four 
U.S. Product Literature Centers to increase exports. In 
addition, the study recommended that industry members work 
through the Manufacturing Extension Partnership Centers to 
improve productivity. Since these Centers are linked to the 
Commerce Department's Technology Administration, I would be 
pleased to put interested industry representatives in touch 
with them. And if confirmed, I would also be pleased to work 
with the industry on a third recommendation by putting industry 
representatives in touch with the Small Business Administration 
to make sure they are aware of assistance programs run by that 
agency.
    In addition, the study recommended actively pursuing a 
policy of opening foreign markets. The President's trade agenda 
includes negotiations on a Free Trade Area of the Americas, a 
new negotiating round in the WTO, and Free Trade Agreement 
talks with Chile and Singapore. If confirmed, I will look for 
ways to enhance the competitive opportunities for the jewelry 
industry in these negotiations as well. U.S. companies' exports 
of jewelry increased more than 150 percent in the past decade, 
and the NAFTA and WTO negotiations helped in this effort by 
reducing or eliminating their tariffs on U.S. jewelry.
    Be assured that, if confirmed, I will work closely with the 
industry to help in implementing these and other 
recommendations of the 1997 study.

Q.2. What other ideas do you have to encourage these 
manufacturers to turn possibly to other industries that are 
perhaps more profitable at this point?

A.2. Some U.S. jewelry manufacturers have achieved success, 
despite intense foreign competition, by using their market 
knowledge to find specific niche markets, by adopting improved 
technologies, or by sourcing some especially labor-intensive 
products and components from lower-wage countries. An 
interagency study team visited a successful Rhode Island 
company that had used its manufacturing expertise to 
manufacture trophies and similar products. I believe our 
Manufacturing Extension Partnership Centers may also be able to 
help jewelry firms diversify into other, possibly more 
profitable markets, and I would be pleased to put the jewelry 
manufacturers in touch with them.

Q.3. I have for some time trumpeted potential regulations that 
would mandate indelible country of origin labeling on jewelry 
products and jewelry boxes from abroad. What are your thoughts 
on this idea?

A.3. Many consumers prefer American-made products. Currently, 
U.S. Customs allows country of origin to be labeled with a 
gummed label or a hang tag, under certain circumstances. Some 
jewelry manufacturers indicate that some importers and 
retailers remove these tags illegally, making origin difficult 
for consumers to identify. Customs has stated that it will 
prosecute importers and retailers that illegally remove country 
of origin labels or tags, but that it needs industry's help to 
identify violators.
    I recognize the concerns that the jewelry manufacturers 
have on this issue. However, as I understand it, indelible 
markings on jewelry products themselves frequently may be too 
small to be legible or impair the value of the products. Again, 
I understand your concerns on this issue and I will work with 
the jewelry industry to determine if there can be an effective 
solution to this problem.

Q.4. Do you think this is something we can do without it being 
cost prohibitive or being unfair to our foreign competitors?

A.4. As I have noted, indelible marking on some jewelry 
products can be difficult because of the small size and 
intrinsic value of the products. Cost can also be an important 
factor. Also, our trading partners may consider that such 
marking would represent an unfair trade restriction by 
potentially damaging the product, materially reducing its 
value, or unreasonably increasing the cost. Again, if 
confirmed, this is an area, which I will explore closely with 
the industry to see if there is an effective way to meet their 
concerns while addressing our international obligations.

    I am also quite concerned about the state of our textile 
manufacturing industry in Rhode Island, which has sustained 
some heavy hits over the past two decades, similar to many 
other parts of the country.

Q.5. What are your thoughts regarding the state of the textile 
industry in the Nation as a whole?

A.5. There is no question that the textile industry is going 
through one of its more difficult periods. The textile industry 
has suffered significant losses in employment in recent years 
and, although some of these losses may be explained by 
productivity improvements, clearly imports and other economic 
factors have played an important role. As you know, the 
slowdown in the U.S. economy has also aggravated the situation.
    A number of people in the industry have expressed their 
strong concerns about current conditions, and I take those 
concerns very seriously. I intend to examine carefully in what 
ways we can work with the industry to help improve the 
situation.

Q.6. Do you think that there are still ways that we can 
effectively protect this industry before it completely 
disappears, and without being overly protectionist?

A.6. Secretary Evans has indicated the strong priority he 
places on ensuring compliance with our trade agreements, and I 
intend to enforce these agreements with respect to textiles and 
apparel. Commerce chairs the interagency Committee for the 
Implementation of Textile Agreements (CITA), which enforces the 
provisions of the WTO Agreement on Textiles and Clothing (ATC), 
as well as our bilateral agreements with non-WTO countries. 
This enforcement includes the undertaking of safeguards actions 
in cases where there is a threat of serious damage to 
particular sectors of our industry, and strong action to curb 
illegal transshipment and attempts to circumvent U.S. quotas. 
In this regard, the United States has adopted a new 
transshipment policy which enables us to proscribe 
transshipping companies from exporting to the U.S. market and 
acts as an inducement to foreign governments to take stronger 
action against transshippers. The Administration is also 
working with U.S. industry to ensure that they achieve maximum 
benefit from the Trade and Development Act of 2000.
    If confirmed, I will work to ensure these agreements are 
fully implemented and will press our trading partners to open 
up their markets to our textile and apparel products.

Q.7. Do you have any other recommendations for States like my 
own to deal with the decimation that this industry has 
experienced at the hand of cheap competitors from abroad?

A.7. The Administration has strong concerns about current 
conditions in the industry. The Commerce Department, through 
Trade Development's Office of Textiles and Apparel, has a 
multifaceted program in place designed to help the textile and 
the apparel industries remain viable and competitive. The 
Office administers the U.S. textile quotas, implements the 
textile provisions of both the NAFTA and the Trade and 
Development Act of 2000, administers textile and apparel 
research grants for the National Textile Center and The 
Textile/Clothing Technology Corporation, and has a special 
export program in place specifically designed to assist this 
industry.
    The Department of Commerce is actively encouraging U.S. 
companies to take advantage of legislation, such as the Trade 
and Development Act of 2000, which encourages the use of U.S. 
textile components in apparel manufactured in beneficiary 
countries. This includes an active program of seminars and 
outreach to advise U.S. manufacturers on the provisions of the 
Act and how they can enter into effective commercial 
relationships with companies in the Caribbean Basin and in 
Africa.
    In addition, the Commerce Department's Economic Development 
Administration maintains a Trade Adjustment Assistance program 
designed to help companies impacted by imports to obtain 
financing on favorable terms, and the Labor Department 
maintains a similar Trade Adjustment Assistance program to help 
displaced workers find new jobs.
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