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[Senate Hearing 107-634]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 107-634
 
  CONFIRMATION OF TIM S. McCLAIN AS GENERAL COUNSEL FOR DEPARTMENT OF 
                            VETERANS AFFAIRS
=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 4, 2001

                               __________

       Printed for the use of the Committee on Veterans' Affairs
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___________________________________________________________________________
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                     COMMITTEE ON VETERANS' AFFAIRS

                 ARLEN SPECTER, Pennsylvania, Chairman

STROM THURMOND, South Carolina       JOHN D. ROCKEFELLER IV, West 
FRANK H. MURKOWSKI, Alaska           Virginia
JAMES M. JEFFORDS, Vermont           BOB GRAHAM, Florida
BEN NIGHTHORSE CAMPBELL, Colorado    DANIEL K. AKAKA, Hawaii
LARRY E. CRAIG, Idaho                PAUL WELLSTONE, Minnesota
TIM HUTCHINSON, Arkansas             PATTY MURRAY, Washington
                                     ZELL MILLER, Georgia
                                     E. BENJAMIN NELSON, Nebraska

           William F. Tuerk, Chief Counsel and Staff Director

                William E. Brew, Minority Chief Counsel

                                  (ii)

  

                            C O N T E N T S

                               __________

                             April 4, 2001

                                                                   Page

                                SENATORS

Craig, Hon. Larry E., prepared statement of......................    15

                               WITNESSES

McClain, Tim S., designee for nomination as General Counsel, 
  Department of Veterans Affairs.................................     2
    Prepared statement of........................................     3
    Questionnaire for Presidential nominees......................     4
    Response to written questions submitted by Hon. Larry E. 
      Craig......................................................     6
Principi, Anthony J., Secretary, Department of Veterans Affairs..     1

                                 (iii)

  CONFIRMATION OF TIM S. McCLAIN AS GENERAL COUNSEL FOR DEPARTMENT OF 
                            VETERANS AFFAIRS

                              ----------                              

                        WEDNESDAY, APRIL 4, 2001

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
SR-418, Russell Senate Office Building, Hon. Arlen Specter 
(chairman of the committee) presiding.
    Present: Senators Specter and Craig.
    Chairman Specter. The Veterans' Affairs Committee of the 
U.S. Senate will now proceed with the confirmation hearing of 
Mr. Tim S. McClain to be the Veterans Administration General 
Counsel.
    We are joined here by the distinguished Secretary of the 
Veterans Affairs Department, the Honorable Anthony Principi. I 
would like to introduce at the start Tim's mother and sister, 
but first his wife, Lynn McClain. Lynn, would you stand. And 
his mother, Mrs. Mary Jo McClain, and Tim's sister, Ms. Connie 
McClain. It is sometimes difficult to determine order of 
seniority. [Laughter.]
    We have scheduled this hearing early to try to accommodate 
the Secretary. It is a little out of sequence, but I am going 
to try to get Mr. McClain confirmed before we adjourn because 
there is a real need for people to be put into place in the 
Administration. We really ought to be expediting the 
confirmations everywhere we can because the executive branch 
which is very, very short-handed. Of course, I do not know that 
this appointment really requires rapid confirmation because 
Tony Principi really does not need a lawyer. He would not do 
anything wrong--even without a lawyer.
    But we welcome you here, Mr. McClain. I know that the 
Secretary has other commitments, so I will call on Secretary 
Principi first.

STATEMENT OF HON. ANTHONY J. PRINCIPI, SECRETARY, DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Principi. Thank you, Mr. Chairman. Thank you so very, 
very much for scheduling this hearing so quickly. I am deeply 
indebted to you.
    Chairman Specter. You told me to when I saw you in 
Pittsburgh. [Laughter.]
    Mr. Principi. I will continue to come back to Pittsburgh in 
Pennsylvania, wherever you want me, sir, over the next several 
months, and certainly to West Virginia as well.
    Chairman Specter. Excuse me. Several years. [Laughter.]
    Mr. Principi. Tim has strong Pennsylvania roots in 
Johnstown, so he will be there as well. But I do appreciate 
your doing this for us.
    When I became Secretary of Veterans Affairs I knew that I 
would need a strong management team to work with me if I wanted 
to get anything accomplished. Mr. Chairman, today I am proud to 
introduce to you a man who, if confirmed, will be a key part of 
VA's team, and a man who will help me and help America to keep 
our Nation's promises to those who have served.
    Tim McClain is a veteran himself. Like me, he is a graduate 
of the United States Naval Academy, and I know I will hear more 
about that as time goes on. And like me, he served in combat in 
Vietnam, and, like me, has spent much of his adult life in 
service to his country and is dedicated to ensuring that 
America's veterans are treated with the respect and honor that 
they have earned through their service.
    I have known Tim personally for many, many years. I am 
very, very proud that the President allowed me to select him 
and that he nominated Tim to be General Counsel. I knew him as 
a fine officer when he was in the Navy, and as a fine lawyer in 
the 10-years since his retirement from service. I know he will 
tell me like it is.
    Tim will be a strong addition to our Department. His 
considerable leadership and legal skills will be of great 
importance as we work to improve the service we provide. He 
will be a valued counsellor to me, to our Department, to this 
committee, and, above all, to our Nation's veterans.
    I am extremely pleased that the President has nominated Tim 
for this important position. I am grateful to the committee for 
scheduling this hearing so promptly, and I hope you will see 
fit to act on his nomination as quickly as possible.
    Mr. Chairman, and members of the committee who are not 
here, it is my pleasure and my privilege to introduce to you 
President Bush's nominee for the position of General Counsel of 
the Department of Veterans Affairs, my good friend, Mr. Tim 
McClain. Thank you, Mr. Chairman. I am going to testify over in 
                        U.S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON : 2002
_____________________________________________________________________________
the House this morning on information technology. So if you 
will excuse me, sir, I will go there.
    Chairman Specter. Mr. Secretary, you may consider yourself 
not under subpoena. [Laughter.]
    Mr. Principi. Thank you, sir.
    Chairman Specter. Thank you for coming.
    Welcome, Mr. McClain. Do you care to make an opening 
statement?
    Mr. McClain. Yes, Mr. Chairman, I would.

STATEMENT OF TIM S. McCLAIN, DESIGNEE FOR NOMINATION AS GENERAL 
            COUNSEL, DEPARTMENT OF VETERANS AFFAIRS

    Mr. McClain. Mr. Chairman and other members of the 
committee, thank you for the invitation to appear before you 
today. I am humbled and honored by this nomination and the 
opportunity to testify at this hearing.
    I believe that I possess a degree of experience that can, 
and will, be valuable to veterans if I am blessed with 
confirmation. Following graduation from high school, I entered 
the Naval Academy as a plebe in the Class of 1970. A little 
over 24 years later, I retired from active duty and became one 
of the millions of veterans who have proudly served this 
country. During my time on active duty I saw action in Vietnam 
as a Surface Warfare Office, attended law school, and joined 
the Navy JAG Corps, defended military members at courts-
martial, adjudicated claims, advised senior officers on a 
myriad of legal issues, taught at the Naval Justice School, the 
Navy's Law School, and for 4 years presided as a Military Judge 
at courts-martial.
    Upon retirement from active duty, I entered the private 
practice of law, specializing in defending medical 
professionals in malpractice cases. Several years ago I was 
employed as a management consultant, directing and supervising 
consulting projects in major U.S. companies at offices here and 
abroad.
    Most recently, I have been a partner in a small private law 
firm specializing in health care, administrative, and military 
law.
    I believe this breadth of experience allows me to bring 
certain skills to the General Counsel's Office. However, I 
realize that I have much to learn about the Department, its 
responsibilities, and the issues that concern the veterans we 
serve. I can assure you that I am fully committed to addressing 
those issues promptly and responsibly.
    As General Counsel, my focus will be to act as counsellor 
and advisor-at-law to Secretary Principi and his new team, as 
he implements his vision for the future of the Department. I 
believe I already have a good working relationship with the 
Secretary. From our discussions, I know that many challenges 
lay ahead in the areas of veterans health care and adjudication 
of claims for veterans benefits. If I am confirmed, I intend to 
become fully conversant on these pressing issues and I will 
take a proactive, pro-veteran role in advising the Secretary, 
Deputy Secretary, and the Under Secretaries on the current law 
as it applies to these challenges.
    If confirmed, I look forward to working closely with the 
members and staff of this committee in addressing the various 
issues so important to veterans. I also look forward to working 
with the various veteran service organizations. Their comments 
and concerns have spurred useful debate on many of the most 
difficult issues. I am certain that through a spirit of 
cooperation, we can discuss the issues and the proposed 
solutions in a manner that will ultimately benefit all 
veterans.
    Mr. Chairman, this concludes my statement. I would be 
pleased to answer any questions that you might have.
    [The prepared statement and biographical information of Mr. 
McClain follow:]
   Prepared Statement of Tim S. McClain, Designee for Nomination as 
            General Counsel, Department of Veterans Affairs
    Mr. Chairman, Senator Rockefeller and Members of the Committee:
    Thank you for the invitation to appear before you today. I am 
humbled and honored by this nomination and the opportunity to testify 
at this hearing.
    I believe that I possess a degree of experience that can, and will, 
be valuable to veterans if I am blessed with confirmation. Following 
graduation from high school, I entered the Naval Academy as a plebe 
with the Class of 1970. A little over twenty-four years later, I 
retired from active duty and became one of the millions of veterans who 
have proudly served this country. During my time on active duty I saw 
action in Vietnam as a Surface Warfare Officer, attended law school and 
joined the Navy JAG Corps, defended military members at courts-martial, 
adjudicated claims, advised senior officers on a myriad of legal 
issues, taught at the Naval Justice School (the Navy's Law School), and 
for four years presided as a Military Judge at courts-martial.
    Upon retirement from active duty I entered the private practice of 
law, specializing in defending medical professionals in malpractice 
cases. Several years ago I was employed as a management consultant, 
directing and supervising consulting projects in major U.S. companies 
at offices here and abroad.
    Most recently I have been a partner in a small private law firm 
specializing in health care, administrative and military law.
    I believe this breadth of experience allows me to bring certain 
skills to the General Counsel's Office. However, I realize that I have 
much to learn about the Department, its responsibilities and the issues 
that concern the veterans we serve. I can assure you that I am fully 
committed to addressing those issues promptly and responsibly.
    As General Counsel my focus will be to act as counselor and 
advisor-at-law to Secretary Principi, and his new team, as he 
implements his vision for the future of the Department. I believe I 
already have a good working relationship with the Secretary. From our 
discussions I know that many challenges lay ahead in the areas of 
veterans health care and adjudication of claims for veterans benefits. 
If I am confirmed, I intend to become fully conversant on these 
pressing issues and I will take a proactive/pro-veteran role in 
advising the Secretary, Deputy Secretary and Under Secretaries on the 
current law as it applies to these challenges.
    If confirmed, I look forward to working closely with the members 
and staff of this Committee in addressing the various issues so 
important to veterans. I also look forward to working with the Veterans 
Service Organizations. Their comments and concerns have spurred useful 
debate on many of the most difficult issues. I am certain that through 
a spirit of cooperation, we can discuss the issues and the proposed 
solutions in a manner that will ultimately benefit all veterans.
    Mr. Chairman, this concludes my opening statement. I would be 
pleased to answer any questions from the Committee.
                                 ______
                                 
                Questionnaire for Presidential Nominees
      part i: all the information in this part will be made public
    1. Name: Tim S. McClain.
    2. Address: 11745 Lake Grove Ct., San Diego, California 92131.
    3. Position: General Counsel, Department of Veterans Affairs.
    4. Date of Nomination: March 22, 2001.
    5. Birth date: June 10, 1948.
    6. Birth place: Johnstown, PA.
    7. Marital status: Married.
    8. Children, age: Scott E. McClain, 27; Brendan C. McClain, 24.
    9. Education: Institution (city, state), dates attended, degrees 
received, dates of degrees.
    California Western School of Law, San Diego, California; 8/75-5/78; 
Juris Doctor; May 1978.
    U. S. Naval Academy, Annapolis, Maryland; 6/66-6/70; BS; June 1970.
    10. Honors: List all scholarships, fellowships, honorary degrees, 
military medals, honorary society memberships, and any other special 
recognitions for outstanding service or achievement.
    U.S. Navy: Meritorious Service Medal (2 awards); Navy Commendation 
Medal (2 awards; 1st award with Combat ``V''); Combat Action Ribbon; 
Navy Unit Commendation; Meritorious Unit Commendation; National Defense 
Medal; Vietnam Honor Medal (First Class); Vietnam Campaign Medal; 
Vietnam Service Medal.
    11. Memberships: List all memberships and offices held in 
professional, fraternal, business, scholarly, civic, charitable, and 
other organizations for the last 5 years and other prior memberships or 
offices you consider relevant.
    California State Bar--Active Member 1978-Present
    San Diego County Bar Association--Member, 1999-Present
    Scripps Ranch Old Pros--Member--Community Athletic Organization, 
1986-2000
    12. Employment Record: List all employment (except military 
service) since your twenty-first birthday, including the title or 
description of job, name of employer, location of work and inclusive 
dates of employment.
    7/90-8/96 Attorney Neil, Dymott, Perkins, Brown & Frank San Diego, 
CA
    8/96-3/99 Management Consultant IMC, LTD Great Falls, VA
    7/99-Present Partner PRINCIPI & McCLAIN, LLP La Jolla, CA
    United States Senate Page
    13. Military Service: List all military service (including reserve 
components and National Guard or Air National Guard), with inclusive 
dates of service, rank, permanent duty stations and units of 
assignment, titles, descriptions of assignments, and type of discharge.
    3 June 1970--Commissioned Ensign, U.S. Navy
    Aug-Dec 1970--Student, Communications Officer School, Newport RI
    Dec 70-Jan 72--Communications Officer, USS Bausell (DD-845), 
Yokosuka, Japan
    Jan 72-Apr 74--Communications Officer, Destroyer Squadron 15, 
Yokosuka, Japan
    Apr 74-Aug 75--Instructor, Surface Warfare Officer School, 
Coronado, CA
    Aug 75-July 78--Law Education Program (California Western School of 
Law), San Diego, CA
    Aug 78-Nov 78--Student, Naval Justice School, Newport, RI
    Dec 78-July 81--Attorney, Naval Legal Service Office, San Diego, CA
    July 81-July 83--Staff Judge Advocate, NAS Miramar, San Diego, CA
    July 83-July 86--Instructor, Naval Justice School, Newport, RI
    Aug 86-July 90--Military Judge, Navy Marine Corps Trial Judiciary, 
San Diego, CA
    Honorable Discharge on July 31, 1990. Retired with rank of 
Commander, JAG Corps, U.S. Navy
    14. Government experience: List any advisory, consultative, 
honorary, or other part-time service or positions with Federal, State, 
or local governments other than listed above: None.
    15. Published writings: List titles, publishers, and dates of 
books, articles, reports or other published materials you have written. 
None.
    16. Political affiliations and activities: (a) List all memberships 
and offices held in and financial contributions and services rendered 
to any political party or election committee during the last 10 years:
    State Vice Chairman, California Veterans for Bush-Cheney 2000
    $100 donation to Bush/Cheney Presidential Transition Foundation
    $100 donation to Bush/Cheney Recount Fund II
    (b) List all elective public offices for which you have been a 
candidate and the month and year of each election involved: None.
    17. Future employment relationships: (a) State whether you will 
sever all connections with your present employer, business firm, 
association, or organization if you are confirmed by the Senate:
    I intend to sever all connections with PRINCIPI & McCLAIN LLP if I 
am confirmed by the Senate. That law partnership will be dissolved if I 
am confirmed for the position.
    (b) State whether you have any plans after completing Government 
service to resume employment, affiliation, or practice with your 
previous employer, business firm, association or organization:
    Following completion of Government service, I have no plans to 
resume employment with PRINCIPI & McCLAIN, LLP.
    (c) What commitments, if any, have been made to you for employment 
after you leave Federal service? None.
    (d) (If appointed for a term of specified duration) Do you intend 
to serve the full term for which you have been appointed? Not 
applicable.
    (e) (If appointed for indefinite period) Do you intend to serve 
until the next Presidential election? Yes.
    18. Potential Conflicts of Interest: (a) Describe any financial 
arrangements, deferred compensation agreements, or other continuing 
financial, business, or professional dealings which you have with 
business associates, clients, or customers who will be affected by 
policies which you will influence in the position to which you have 
been nominated: None.
    (b) List any investments, obligations, liabilities, or other 
financial relationships which constitute potential conflicts of 
interest with the position to which you have been nominated: None.
    (c) Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that 
constitutes a potential conflict of interest with the position to which 
you have been nominated: None.
    (d) Describe any lobbying activity during the past 10 years in 
which you have engaged for the purpose of directly or indirectly 
influencing the passage, defeat, or modification of any Federal 
legislation or for the purpose of affecting the administration and 
execution of Federal law or policy. None.
    (e) Explain how you will resolve any potential conflicts of 
interest that may be disclosed by your responses to the above items. 
(Please provide a copy of any trust or other agreements involved.) No 
applicable.
    19. Testifying before the Congress: (a) Do you agree to appear and 
testify before any duly constituted committee of the Congress upon the 
request of such committee? Yes.
    (b) Do you agree to provide such information as is requested by 
such a committee? Yes.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Larry E. Craig to Tim 
                               S. McClain
    Question 1. How are you planning on developing the Memorandum of 
Understanding between the Veterans Administration and the Department of 
Defense in order to provide medical services to TRICARE-dependent 
military retirees in the Veterans Medical Centers?
    Answer. I am familiar with the Veterans Millennium Health Care and 
Benefits Act, at section 113, which requires the Secretary of Defense 
(DOD) and Secretary of Veterans Affairs (VA) to enter into such a 
Memorandum of Understanding. I understand that officials from VA and 
DOD have met several times regarding this requirement, but have been 
unable to reach an agreement to date. My office will continue to 
provide legal advice to those VA officials working directly with DOD to 
resolve these differences.
    Question 2. How are you planning to reach out and ensure that all 
disabled veterans are adequately compensated for related service-
connected disabilities, and receive high quality medical care?
    Answer. I consider the role of the Office of General Counsel (OGC) 
to be that of an enabler of the Veterans Health Administration and 
Veterans Benefits Administration, the program elements that are 
directly responsible for the provision of health care and other 
benefits. The OGC can greatly facilitate the timely and accurate 
delivery of veterans benefits and services in a number of ways.
    For example, as new benefit laws are enacted, it is OGC who must 
interpret them in order to ensure they are implemented as Congress 
intended. Implementation may also entail the development of new 
regulations, a process in which OGC is intimately involved. Need for 
further legal interpretation frequently arises during the course of 
program administration, as unique, and perhaps unforeseen, fact-
patterns are encountered by claims reviewers. Some of these legal 
opinions are designated as precedents to be followed throughout the 
Department, contributing to the uniform application of the law by the 
fifty-eight VA Regional Offices and sixty-four members of the Board of 
Veterans Appeals.
    Moreover, the advocacy of OGC attorneys before the Court of Appeals 
for Veterans Claims can greatly influence the developing case law that 
increasingly drives the claims process. This case law often requires 
OGC interpretation for the benefit of program officials. In addition, 
my office also plays a leading role in advocating the Secretary's 
legislative agenda for improving veterans' benefit programs.
    All of the above are very important responsibilities that I intend 
to closely oversee throughout my tenure as General Counsel.
    Question 3. How are you planning on implementing the Millennium 
Health Care Act?
    Answer. The Office of General Counsel (OGC) has been involved in 
the Act's implementation in a number of ways, but none more important 
than in the development of new and amended VA regulations.
    For example, the Act provides new authority for VA to reimburse for 
the costs of emergency medical care provided to veterans in non-VA 
facilities. My office has played a major role in devising proposed 
rules for implementing this authority. The regulations are currently 
undergoing OMB review as provided by Executive Order 12866.
    The Act also:
     authorized the provision of expanded non-institutional and 
extended-care health services,
     authorized VA to amend the schedules of co-payments 
charged certain veterans for pharmaceuticals, long-term care and 
outpatient treatment: and,
     required VA to develop a new methodology for ranking 
applications for VA grants for state nursing-home construction.
    The necessary rules and regulations for implementing the Act are in 
various stages of development or concurrence. My office will continue 
to monitor the progress of the implementation of these rules.

    Chairman Specter. Before we proceed to questions and 
answers, I would like to administer the oath to you. If you 
would please rise and raise your hand. Do you solemnly swear 
that the responses to questions and your further testimony and 
the testimony already given is, and will be, the truth, the 
whole truth, and nothing but the truth, so help you God.
    Mr. McClain. I do.
    Chairman Specter. Thank you. Mr. McClain, you have a very 
close personal relationship with Mr. Principi, and that is, for 
the most part, good. But there is the potential that sometimes 
a relationship may be a little too close. What assurances can 
you give the committee that your advice will be objective and, 
notwithstanding your close personal relationship and 
friendship, if you have to give him bad news or if you have to 
give him advice that he does not like, that you will be tough 
about it?
    Mr. McClain. Senator, thank you for that question. I know 
that it may look like a concern, but it should not be a concern 
to the committee.
    Chairman Specter. You are not a good friend of his? 
[Laughter.]
    Mr. McClain. Sir, I am a very good friend of Mr. Principi. 
But my position as counsellor will dictate exactly how I will 
act and advise the Secretary. As General Counsel of the 
Veterans Affairs Department, my responsibility is to lay out 
the good and the bad for the Secretary, to give him all of the 
options and to give my best advice on the interpretation of the 
law as it applies.
    Chairman Specter. And your duties run to the Government and 
the Veterans Administration and not personally to the 
Secretary?
    Mr. McClain. Well, certainly they run to the 
Administration, to the veterans, to the Government, and to the 
Secretary.
    Chairman Specter. You are not his personal counsel?
    Mr. McClain. No, I do not believe I am.
    Chairman Specter. The adjudication backlog is of enormous 
proportion. Secretary Principi has made the reduction of that a 
top priority. Would you submit in writing to this committee--I 
do not want an off-the-cuff answer; we want a plan, something 
in writing--your plan for tackling that issue, because it is a 
mammoth issue. Is 30 days too long a period to give you to 
answer that?
    Mr. McClain. No, Mr. Chairman, it is not.
    Chairman Specter. Is 2 weeks too short a period to give you 
to answer that?
    Mr. McClain. I could have an answer to you in 2 weeks, Mr. 
Chairman.
    Chairman Specter. OK. We will take it in 2 weeks, then.
    [The information referred to follows:]

    In my short tenure at this department, I have discovered 
that this is a multi-faceted problem that will take an 
integrated solution. No one division or department within VA 
can tackle this problem alone.
    I have met briefly with VBA Under Secretary Joseph Thompson 
and BVA Chairman E. Dane Clark to discuss the claims backlog 
problem in general. All departments are working deligently to 
find a solution. A very significant initiative is Secretary 
Principi's charter for a VA Claims Processing Advisory Task 
Force. The Task Force formed a Claims Processing Advisory 
Committee, which had its first meeting on April 16-17, 2001, 
with direction to submit its initial findings within 120 days. 
Lawyers from the Office of General Counsel are providing legal 
advice to members of the Committee. My office anticipates that 
the Committee will make certain recommendations that, if 
approved and implemented by the Department, will require new 
and/or revised claims processing regulations. All parties will 
want the regulations to be drafted and implemented within a 
very short time frame. Therefore, I am studying the best way to 
restructure and the progress we are making in regulations 
division to meet this demand.

    Chairman Specter. The Veterans Administration has over 400 
attorneys on staff, and approximately one-half of these 
attorneys are situated at VA regional offices. How do you 
propose to administer this enormous legal staff since you do 
not have 400 attorneys to oversee in your current law firm? How 
many less than 400 do you have in your current law firm?
    Mr. McClain. 399. [Laughter.]
    There are two of us in the law firm.
    Chairman Specter. So how are you going to do that, Mr. 
McClain?
    Mr. McClain. Fortunately, Mr. Chairman, there is a very 
good and effective organization of career attorneys with the VA 
that is currently in place that they have a very good 
management structure at this point.
    Chairman Specter. They do not need you to manage them?
    Mr. McClain. No, they do. They need leadership at the top.
    Chairman Specter. So how are you going to handle it?
    Mr. McClain. Through close personal relations with--I plan 
to meet every one of the attorneys within a fairly short period 
of time.
    Chairman Specter. How short a period of time?
    Mr. McClain. As a matter of fact, we have got a training, a 
regional counsel training currently set up for August.
    Chairman Specter. Is it possible to reduce the number of 
attorneys through attrition? You will head one of the biggest 
law firms in the country, Mr. McClain.
    Mr. McClain. And I think that the size of the law firm is 
driven by the work that we are asked to do. One of the things 
that I will----
    Chairman Specter. You cannot at this point have a handle on 
the work; it is too soon.
    Mr. McClain. I do not.
    Chairman Specter. Would you make an analysis for the 
committee as to management savings? I am not suggesting that 
you go in and fire people or wreck the crew. But when I became 
District Attorney of Philadelphia I found a lot of ways to 
economize and to better utilize my personnel. We have a very 
tight budget and, to the extent that we can allocate VA funds 
for health care, that is what this committee would like to do. 
So after you finish your report on the backlog, will you take 
another 2 weeks to 4 weeks to give me a report on this topic? 
Let me ask you, what do you think is a reasonable timeframe on 
the 400 attorneys issue?
    Mr. McClain. Through my experience having done some of this 
in management consulting, this sort of analysis would take an 
intensive 3 months.
    Chairman Specter. OK. You have got it.
    Mr. McClain. Thank you very much.
    Chairman Specter. So in 90 days we would like to know your 
evaluation on whether you can effect economies or reorganize 
your legal staff.
    [The information referred to follows:]
                                                          July 2001
                              White Paper
 efficiencies achieved by the office of general counsel (ogc), in the 
   area of personnel management, department of veterans affairs (va)
    In 1995, OGC implemented VA's mandate to streamline its management 
and reduce the number of full time employees (FTE) by reducing the 
number of supervisors from 128 to 75, and by reducing the number of 
total employees from 730 to 663, over a 5-year period. OGC accomplished 
these goals by reducing the layers of management in its field locations 
throughout the country, reducing the number of managers in 
headquarters, and trimming the number of employees through attrition, 
buy-outs and early retirement.
    OGC reduced the number of managers primarily through the 
restructuring of its field component. Prior to 1995, there was at least 
one District Counsel office in each of the 50 states and Puerto Rico. 
The new organization merged the District Counsel offices into 23 
regions. The new Regional Counsels supervised more employees spread 
over a much greater geographic area than their predecessor District 
Counsels, resulting in the phased departure of 46 managers. This, 
combined with aggressive attrition efforts ultimately reduced the 
number of OGC's employees to 638 at the end of Fiscal Year (FY) 2000.
    Primarily due to the increased numbers of appeals to the Court of 
Appeals for Veterans Claims, personnel law cases, loan guaranty and 
medical care cost recovery actions, OGC was left with no choice but to 
hire more staff during FY 2000, such that OGC's current staffing level 
is 687. That number includes 78 managers, 74 of whom are attorneys; 323 
non-supervisory attorneys, 36 paralegals; 120 legal assistants; and 130 
administrative personnel.
    OGC represents the Secretary of Veterans Affairs in every appeal 
filed with the Court of Appeals for Veterans Claims (CAVC) Since 1988, 
when the Veterans Judicial Review Act established this Court, the 
number of appeals filed with the court rose from a low of 1303 in 1992, 
to a high of 3260 in FY 1999. OGC projects that veterans will file 3750 
appeals in the current fiscal year, In 1992, Congress extended the 
Equal Access to Justice Act (EAJA) to CAVC appeals, thereby increasing 
the scope of OGC's litigation responsibilities. Every appeal filed by a 
represented veteran after November 1992 included the potential for EAJA 
litigation as well. Accordingly, this 35 percent increase in appeals 
required additional staff to provide representation for the Secretary. 
The appellate staff rose from 51 in 1992 to its current level of 92. 
Each of the 42 staff attorneys is currently responsible for 
approximately 38 appeals.
    OGC attorneys in headquarters and in the field represent VA in an 
ever-increasing number of personnel law matters, including equal 
employment opportunity complaints, appeals to the Merit Systems 
Protection Board, unfair labor practice claims, arbitrations, and in 
grievance actions. Although OGC attorneys represent the Secretary 
primarily in administrative litigation, the nature of this litigation 
is now so complex and demanding that the preparation of these cases is 
comparable to judicial litigation. In FY 2000, OGC attorneys defended 
4,627 cases, primarily in VA's field locations.
    Despite the stable economy during the past several years, the 
number of foreclosures of VA-guaranteed loans has increased, resulting 
in approximately 15,000 such actions in FY 2000. VA attorneys and 
paralegals participate in the foreclosure processes, assist in the sale 
of foreclosed properties in VA's inventory, address a myriad of title 
issues that arise on these properties, evict reluctant tenants and 
craft mortgage releases and related documents. These actions are labor-
intensive and, while OGC managers assign much of this work to 
paralegals, attorneys must provide active representation in local 
courts. The increased activity has required OGC to hire additional 
attorneys and paralegals.
    OGC attorneys, paralegals and legal assistants have contributed 
significantly to the recovery of funds from insurers, worker's 
compensation funds and tortfeasors responsible for the cost of 
veterans' care through contract or injury. In FY 2000, OGC personnel 
collected almost $16 million in over 425,000 separate actions; during 
the first 7 months of FY 2001, OGC's efforts have resulted in 
collections of $9 million. These funds are provided to the Veterans 
Health Administration to provide for medical care for veterans.
    OGC attorneys represent the Secretary in numerous other areas as 
well. With the expansion of enhanced use programs and sharing 
agreements, OGC attorneys routinely review contracts and provide advice 
to VA officials concerning the structuring of novel business 
arrangements that allow for more robust use of VA facilities and 
provide additional dollars for veterans benefits and health care. The 
687 OGC employees represented over 800 VA facilities in over 510,000 
actions during FY 2001. These actions have the cumulative effect of 
increasing the number of dollars available to care for veterans, 
decreasing the Secretary's exposure to personnel and tort claim 
judgments, and otherwise facilitating the operation of the Department. 
The dedication and hard work of OGC's employees allow for this 
efficiency.

    Chairman Specter. There is a question here on statutory 
interpretation. If I ask you the question, will you tell me 
that you are going to follow the intent of Congress and not 
make new law?
    Mr. McClain. Absolutely.
    Chairman Specter. I thought you would, so I thought I would 
abbreviate. [Laughter.]
    I understand that you are experienced as a malpractice 
defense counsel. Has your experience as a malpractice defense 
counsel given you occasion to advise medical clients on the 
avoidance of malpractice claims?
    Mr. McClain. Yes, Mr. Chairman, they have.
    Chairman Specter. That is a unique talent, Mr. McClain. 
What I would like you to do is to give some thought to how you 
might counsel the doctors to avoid malpractice claims, because, 
in doing that, you will really be giving them advice on how to 
give better medical service.
    Mr. McClain. The law firm that I was connected with was 
connected with the insurance companies that insure the medical 
professionals and we participated in their risk-management 
programs, including advising the doctors and giving them 
seminars on how best to avoid incidents of malpractice and how 
to chart the particular procedures.
    Chairman Specter. Mr. McClain, down the road, say in 4 
months, give us a written response as to what you found there.
    Mr. McClain. I will.
    [The information referred to follows:]
                              White Paper
    plan to assist department of veterans affairs (va) health care 
 providers in avoiding malpractice claims by improving the quality of 
                              health care
    The Office of General Counsel (OGC) works in close cooperation with 
the Veterans Health Administration (VHA) in various ways to assist in 
the quest for improving the quality of health care in VA medical 
facilities and thereby reduce and avoid patient injuries that may lead 
to medical malpractice claims.
    Currently, OGC shares access to its computerized Tort Claim 
Information System (TCIS) with VHA for patient safety and quality 
assurance purposes. We also share with VHA our annual report setting 
out the number of claims filed, settled, and denied, and amounts paid.
    When a medical malpractice claim is paid under the Federal Tort 
Claims Act, 28 U.S.C. Sec. Sec. 1346(b), 2671-2680, whether as an 
administrative claim, settlement by the United States Attorney, or 
court judgment, information is presented to the VHA Director of Medical 
Legal Affairs for consideration by an outside panel of medical 
reviewers to determine whether the health care providers involved 
should be reported to the National Practitioner Data Bank. VHA is 
updating its procedures for data bank reports, and recently published 
proposed regulations for that purpose.
    OGC also participates in other ways with VHA to address the legal 
problems associated with providing health care to veterans. OGC 
personnel in Regional Counsels' offices work closely with VA medical 
center officials in advising patients when errors that result in injury 
or harm to a patient are discovered. Patients are informed of the error 
and of their legal and administrative remedies.
    Additionally, OGC collaborates with VHA by providing 
representatives to present topics for training programs such as the 
recent National Conference for Patient Safety and by participating in 
the American Association of Anesthesiologists closed claims study, 
sharing information on VA claims and litigation involving anesthesia.
    Payment of every medical malpractice claim results in scrutiny of 
the appropriateness of medical care and treatment by one or more health 
care providers, through peer review at the local facility and through 
the outside panel of medical reviewers. These retrospective reviews 
provide useful information, but have a significant lag time from the 
date of the incident until resolution of the claim or litigation. OGC 
has worked very closely with Dr. Jim Bagian in the creation of the 
National Center for Patient Safety; an innovative program designed to 
improve the quality of care in VA. The Center is responsible for 
implementing a nationwide internal and external reporting system to 
supplement the existing accountability systems. The new system's sole 
purpose is to foster organizational learning to improve patient safety. 
It is designed to encourage reporting of medical errors--even close 
calls and potential problems--without assigning blame to the health 
care providers. The Center looks at problems and potential problems 
immediately after their occurrence. They examine the data received to 
discern common systemic problems, and methods to correct them, as well 
as to reduce the opportunity for human error. VA believes the Center 
will play a major role in improving patient safety and, in turn, 
reducing malpractice claims.
    In addition to continuing these and similar activities, for 
reducing VA medical malpractice claims includes developing a 
presentation that will be available to health care providers to inform 
them of lessons learned from review of the medical malpractice claims 
over the last decade. Our presentation will include topics on creation 
and completeness of appropriate entries in the patient's medical 
records, necessity of ensuring that tests ordered are reviewed in a 
timely manner, requirement for correct and legible orders and 
prescriptions, appropriate supervision of residents and other trainees, 
and how to obtain and document informed consent. In short, the 
program's focus will be on reducing malpractice claims by improving the 
quality of VA health care. This program will be provided live, or over 
VA's satellite broadcast network. Details will be worked out in the 
next several months.
    In summary, OGC has worked with VHA in its desire to improve 
patient safety and quality of care. We will provide additional programs 
to not only continue to improve care but to avoid malpractice claims in 
the future.

    Chairman Specter. One of our jobs is oversight and the 
reality is we do not have the time--with all of our busy 
schedules--to do oversight as well as we should. But on these 
particular items, I think it would be very useful for the 
committee to have your insight. And then I would like you--on 
the three subjects which we have talked about today--to give us 
updates every 6 months as to how you are proceeding on the 
backlog, on the management of your attorneys, and on proactive 
work your attorneys can do to assist doctors in avoiding 
malpractice claims.
    Mr. McClain, do you swear that all the answers you have 
given in the written questions are accurate?
    Mr. McClain. Yes, I do.
    Chairman Specter. Do you have any conflicts of interest 
which were not fully disclosed to the committee?
    Mr. McClain. No, there are none.
    Chairman Specter. Do you know of any other matter which if 
known to the committee might affect the committee's 
recommendation to the Senate with respect to your nomination?
    Mr. McClain. No, sir, I do not.
    Chairman Specter. Have you fully and accurately provided 
financial and other information requested by the committee?
    Mr. McClain. Yes, I have.
    Chairman Specter. And do you now affirm that information is 
complete, accurate, and provided in a form not designed to 
evade?
    Mr. McClain. Yes.
    Chairman Specter. Do you think that last question, prepared 
by Mr. Tuerk, the committee's counsel, was a good question? 
[Laughter.]
    Could you improve upon it? I do not hear an answer to that. 
[Laughter.]
    Now that you are caught, Mr. McClain, we will see whether 
your skills are sufficient to give an affirmative answer that 
you can improve on it, or whether you do not want to say 
something which would offend Mr. Tuerk?
    Mr. McClain. That is probably it.
    Chairman Specter. Or you don't want to say something which 
would offend the chairman. [Laughter.]
    You do not have to comment further.
    Do you agree to supply the committee such nonprivileged 
information, materials, and documents as may be requested by 
the committee in its oversight and legislative capacities for 
so long as you serve as General Counsel?
    Mr. McClain. Yes, sir, I do.
    Chairman Specter. Do you agree to appear before the 
committee at such times and on such matters as the committee 
shall request for as long as you serve as General Counsel?
    Mr. McClain. Yes, sir.
    Chairman Specter. Mr. McClain, I think you have got a very 
good background. I like your relationship with the Secretary. I 
like your background. I like the fact that you are from 
Johnstown. I like your wife, your mother, your sister. Your 
sister just gave you a thumbs up. Are you serious about that, 
Connie? Mr. McClain, do you think I should swear Connie before 
adjourning? [Laughter.]
    I wanted to get this done fast. We could take a lot more 
time but I am due at a Judiciary Committee hearing at 10 
o'clock. Our schedules are jammed. But I want to get you 
confirmed if I can and I am going to instruct the committee's 
counsel to see if we can convene the full committee in the 
President's Room after a vote today so we can act and try to 
get you confirmed before we adjourn on Friday.
    Mr. McClain. Thank you, Mr. Chairman.
    Chairman Specter. I would like you to stay because Senator 
Craig is on his way and he will be acting chairman to ask you 
additional questions.
    Mr. McClain. Certainly.
    Chairman Specter. Thank you very much, Mr. McClain. I think 
you will be confirmed and I wish you the very best in your 
service as General Counsel. And I will not ask you for a 
commitment that when your tour ends you will return to 
Johnstown as opposed to San Diego. [Laughter.]
    Mr. McClain. Thank you.
    Chairman Specter. Thank you all.
    Senator Craig [presiding]. Tim, as this may be a first for 
you, it is also a first for me. This gentleman just referred to 
me as ``Mr. Chairman.'' [Laughter.]
    So to chair the Veterans' Affairs Committee is a brief but 
most important honor of mine. I have served on the committee a 
good number of years now. So, thank you.
    Mr. McClain. It is my pleasure, sir.
    Senator Craig. All right. I met the chairman in the hall 
and he said he had held the committee open so that I could 
visit with you for a few moments. I have looked at your resume, 
obviously. And what is most important is that the Secretary is 
the person who recommends you and feels comfortable that he can 
work with you to manage the Department and to deal with many of 
the problems it will face over the course of time that are part 
of the natural course of doing business. But, at the same time, 
you know and I know there are some very real challenges out 
there. So for the next few moments, why don't you give me an 
idea of what your thoughts are and your plans are coming into 
this capacity as General Counsel.
    Mr. McClain. Senator, I would be glad to. I have been 
fortunate to be at the VA for the past 2 weeks getting briefs, 
and so I just have an orientation sort of knowledge on many of 
the issues. But I do understand that those major issues are 
adequate delivery of health care and another pressing issue is 
the claims backlog.
    From the health care aspect, I know that Dr. Garthwaite is 
working very hard on it and we will give him whatever support 
from the General Counsel's Office he needs.
    Probably the thing that the General Counsel can impact more 
than the current health care delivery is the claims 
adjudication status. There is a tremendous backlog from recent 
court decisions. The Secretary has announced that there will be 
a task force of industry leaders and CEO's from the insurance 
industry and other industries to review our process and then, 
hopefully, make a recommendation which would be a structure for 
us to begin implementing change in our process to bring 
efficiencies to the process.
    Where the General Counsel can get involved is, No. 1, I 
think by advising that task force to the greatest extent 
possible on what the laws currently are so that we need to work 
within the framework that we have. But also then, after the 
Veterans Benefits Administration decides exactly how we are 
going to implement those recommendations, I am sure there will 
be regulations that need to be written, and the General 
Counsel's Office can assist directly in getting them written 
and getting them through in an expeditious manner. We would not 
be the bottleneck in this. We would be somewhat of an expediter 
to assist in getting these regulations through and getting the 
process fixed so that we can get the backlog down.
    Senator Craig. How are you planning on developing the 
Memorandum of Understanding between the Veterans Administration 
and the Department of Defense in order to provide medical 
services to TRICARE-dependent military retirees in the Veterans 
Medical Centers?
    Mr. McClain. Senator, I have not been fully briefed on that 
particular issue. I will take it upon myself to become 
knowledgeable and be fully briefed on it. I would be glad to 
get back to you with an answer to that either on the record or 
personally.
    Senator Craig. That is important out in my State. TRICARE, 
in some States where there has been a resistance to an HMO 
style health care delivery system, has left some of our 
military people and our military retirees wanting. So we are 
trying to resolve that. We have, obviously, a very capable and 
well-respected Veterans health care delivery system in Boise 
with the hospital there. It seems to be a right approach toward 
resolving that.
    How are you planning to reach out and ensure that all 
disabled veterans are adequately compensated for related 
service-connected disabilities and receive the high quality 
medical care that they deserve and expect?
    Mr. McClain. From the perspective of the General Counsel 
once again, we work closely with the Veterans Benefits 
Administration and we will continue to do so. We will assist 
them in interpreting the law, assist them in getting the 
regulations written, and assist them in evaluating from a legal 
aspect any of the particular issues that come up in this 
challenge of getting the benefit backlog taken care of.
    But also there is another component to that of the people 
who currently would be applying for benefits; in other words, 
new claims. We want to ensure that the new claimants are not in 
the same situation as some of the old claimants, that they had 
to wait so long to find out if they were entitled to benefits. 
And one of our most pressing issues is going to be to bring the 
time for adjudication down to something reasonable and more in 
line with an industry standard.
    Senator Craig. One of the concerns I have had in Idaho, and 
we are starting to resolve that by clinics and outreach 
approaches, in the ruralness of our State and the need to cover 
veterans, sometimes the drive from Salmon, ID, to Salt Lake 
City of 350 miles one way is not an easy route to go in the 
middle of the winter to get health care. We have a clinic now 
in Pocatello, about midway, and we now have a clinic in Twin 
Falls.
    I guess what I am suggesting is that any time we can 
provide a more localized care opposed to a regional approach of 
service that we can reduce overall costs and we can provide 
more immediate service. I have talked with the Secretary about 
that. We are going to continue to work on that. We are making 
headway in those areas, Tim, and I think that is an important 
part of what we do. I now chair the Aging Committee here in the 
Senate and we are looking very closely at rural health care 
delivery and oftentimes the decline of rural infrastructures as 
the character and the economy of those regions change, and 
veterans are a part of that and we need to be sensitive to it.
    How are you planning on implementing, or have you been 
briefed and do you understand the issue of the Millennium 
Health Care Act?
    Mr. McClain. I have had an orientation on the Millennium 
Health Care Act, Senator. I certainly do not profess to have 
in-depth knowledge about it but I understand its main points.
    Senator Craig. Well, that is one thing that we will be 
working very closely with you and the Administration on as we 
move into the implementation of that Act.
    [The prepared statement of Senator Craig follows:]

   Prepared Statement of Hon. Larry E. Craig, U.S. Senator From Idaho

    Mr. Chairman, it is indeed a pleasure to be here at the 
confirmation hearing of Tim S. McClain for General Counsel, 
Department of Veterans Affairs (VA). The VA represents millions 
of men and women who have served our great nation, often at 
extreme sacrifice. Therefore, in gratitude it is important that 
we select a General Counsel who will ensure the just and 
faithful execution of the laws, regulations, and policies of 
the VA, and by so doing enable the Department to accomplish its 
mission of service to our Nation's veterans.
    I am very impressed with Mr. McClain's qualifications for 
the post of General Counsel of the VA. A decorated Vietnam 
veteran, he has extensive experience working both as a military 
Staff Judge Advocate and in the private sector on adjudications 
and appeals. It is also important to me that he has worked with 
VA Secretary Principi before and has his trust. I am confident 
that Mr McClain will provide Secretary Principi with honest 
counsel on matters he is responsible for administering. I look 
forward to working with Mr. McClain on future benefit matters 
and assisting veterans' benefit claimants to a quick and fair 
determination. The claims benefit process is in dire need of 
reform and must be our top priority. In addition, we must 
continue to improve access to services which recent legislation 
has provided. As a fiscal conservative, I understand how 
difficult it is to insure optimum commitment to our nations's 
heroes while balancing the budget. I believe that Mr. McClain's 
breadth of knowledge will enable him to ensure our government 
honors its commitments to our veterans and implements the most 
beneficial and cost effective programs.
    I look forward to working with Mr. McClain when addressing, 
expanding, and improving the delivery of services and benefits 
so that all veterans have equal access to, and quality of, 
medical care. In many areas of the country as in Idaho, the 
waiting lists are long and only getting longer. I would 
encourage the VA to continue exploring under serviced areas. 
Any time we can provide local--as opposed to regional--service, 
the veterans will be grateful and overall cost reduced. Of 
course, one of my major concerns is ensuring the necessary 
funding for primary care, but we must not forget to provide all 
the services and specialty care that many of our veterans 
require. The Millennium Health Care Act has had some major 
impacts; however, the VA has not yet developed the policies 
necessary to deal with issues such as emergency care, Hepatitis 
``C'', and Diabetes. Mr. McClain's opinions in these matters 
will be critical to insuring we meet the needs of our Nation's 
veterans and their families today and tomorrow.
    Veterans who are also military retirees are suffering 
greatly in Idaho as well as other rural areas. TRICARE, which 
was set up to provide medical services to active duty and 
retirees, is bad and getting worse in Idaho. I implore Mr. 
McClain to work with the Department of Defense (DOD) in 
developing procedures for providing medical services to 
TRICARE-dependent military retirees in VA facilities.
    I believe that Mr. McClain is an excellent choice to help 
define our commitment to our nation's veterans, while 
recognizing the tough fiscal decisions that must be made. Let 
us never forget the important role that our veterans have made 
insuring our national security--the United States is a super 
power and enjoys such success because of the service and 
sacrifice of our veterans for whom we should be forever 
grateful.

    Senator Craig. Well thank you very much for your time and 
your patience. Good luck. We know you will be successful 
through the process. We all have a sense of urgency here to 
supply the new Administration with the people they need to get 
on with the business of governing our country. So I am glad 
that the chairman could move this hearing along. I am quite 
sure that we will move you along as quickly as we can.
    Mr. McClain. Thank you very much.
    Senator Craig. Thank you.
    The committee will stand adjourned.
    [Whereupon, at 10:08 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]

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