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83–481 PDF 2003

S. Hrg. 107–832

NOMINATIONS OF HON. RUTH Y. GOLDWAY AND

TONY HAMMOND

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON THE

NOMINATIONS OF HON. RUTH Y. GOLDWAY AND TONY HAMMOND TO

BE COMMISSIONERS OF THE POSTAL RATE COMMISSION

OCTOBER 8, 2002

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

MARK DAYTON, Minnesota

FRED THOMPSON, Tennessee

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

THAD COCHRAN, Mississippi

ROBERT F. BENNETT, Utah

JIM BUNNING, Kentucky

PETER G. FITZGERALD, Illinois

JOYCE A. RECHTSCHAFFEN, Staff Director and Counsel

JENNIFER E. HAMILTON, Research Assistant

NANCI E. LANGLEY, Deputy Staff Director,

Subcommittee on International Security, Proliferation, and Federal Services

RICHARD A. HERTLING, Minority Staff Director

JOHANNA L. HARDY, Minority Senior Counsel

ANN C. FISHER, Minority Professional Staff Member,

Subcommittee on International Security, Proliferation, and Federal Services

DARLA D. CASSELL, Chief Clerk

(III)

C O N T E N T S

Opening statement: Page

Senator Akaka .................................................................................................. 1

Prepared statement:

Senator Bunning ............................................................................................... 9

WITNESSES

TUESDAY, OCTOBER 8, 2002

Hon. Christopher S. Bond, a U.S. Senator from the State of Missouri ............... 1

Hon. Ruth Y. Goldway, to be a Commissioner on the Postal Rate Commission 3

Tony Hammond, to be a Commissioner on the Postal Rate Commission ........... 4

Hon. Hillary Rodham Clinton, a U.S. Senator from the State of New York ...... 5

ALPHABETICAL LIST OF WITNESSES

Bond, Hon. Christopher S.:

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

Clinton, Hon. Hillary Rodham:

Testimony .......................................................................................................... 5

Goldway, Hon. Ruth Y.:

Testimony .......................................................................................................... 3

Biographical and professional information ..................................................... 10

Responses to pre-hearing questions ................................................................ 18

Hammond, Tony:

Testimony .......................................................................................................... 4

Biographical and professional information ..................................................... 29

Responses to pre-hearing questions ................................................................ 36

APPENDIX

Hon. Dianne Feinstein, a U.S. Senator from the State of California, prepared

statement .............................................................................................................. 9

(1)

NOMINATIONS OF HON. RUTH Y. GOLDWAY

AND TONY HAMMOND

TUESDAY, OCTOBER 8, 2002

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

The Committee met, pursuant to notice, at 9:05 a.m., in room

SD–342, Dirksen Senate Office Building, Hon. Daniel K. Akaka,

presiding.

Present: Senator Akaka.

OPENING STATEMENT OF SENATOR AKAKA

Senator AKAKA. The Committee will please come to order. I want

to thank our colleagues and our guests for being with us today.

This morning, we are considering the nominations of Hon. Ruth

Goldway and Tony Hammond, who are nominated to serve six-year

terms as Commissioners of the Postal Rate Commission. We are

pleased to have this morning my friend, Senator Bond, who will introduce Mr. Hammond. I understand that Senator Clinton will arrive shortly to introduce Ms. Goldway, however, we will continue

until she arrives.

Senator Bond, we really appreciate your coming and taking time

before this hearing to introduce Mr. Hammond. I know you have

lots to tell about him, so you may proceed.

TESTIMONY OF HON. CHRISTOPHER S. BOND, A U.S. SENATOR

FROM THE STATE OF MISSOURI

Senator BOND. Thank you very much, Mr. Chairman. I really appreciate the honor of being able to join you today to present my

good friend and fellow Missourian, Tony Hammond, for consideration for appointment as Commissioner of the Postal Rate Commission. As I was saying to Tony, the Postal Rate Commission is the

creature that we love to hate. As we are bombarded with letters

and e-mails complaining about the post office and the rate increases, at least there are now friendly faces that we can put on

that when we respond indignantly about the high cost of postal

service.

Nevertheless, the Congress did establish the Postal Rate Commission and gave them very important powers. This is a significant

responsibility, one that is very necessary for the commerce of the

United States, and I think Tony Hammond, who was nominated by

the President this past April, is well qualified to handle those responsibilities.

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Tony was born in Hickory County, Missouri, where he still owns

his family farm. He graduated from Southwest Missouri State University in Springfield.

I first became acquainted with Tony when he served on Capitol

Hill for 10 years between 1979 and 1989. During that time, he

worked as Legislative Director for our good mutual friend, the late

Missouri Congressman Gene Taylor. During Gene Taylor’s tenure

as ranking member of the Post Office and Civil Service Committee,

Tony Hammond dealt with the many diverse issues and interests

concerning the U.S. Postal Service rates and operation. He had real

on-the-job training for the issues dealt with by the Postal Rate

Commission. He practiced writing up the letters that now he is

going to have to respond to as a member of the Postal Rate Commission.

Mr. Chairman, I know that you served with and remember the

late Congressman Taylor during the time he was in the House.

When I first came to Washington, I roomed with him for a couple

of months while I was waiting for a house. But if we really wanted

to spice up the record of this hearing, we could go into executive

session and I expect the three of us could spend the better part of

the morning exchanging Gene Taylor stories, all with good intent,

but I would prefer they be in executive session.

Missouri has produced some very colorful people in its history,

but Gene Taylor was considered by many to be our 20th century

Mark Twain and a gentleman who will certainly be missed. But I

can assure you that his guidance and leadership helped train Tony

Hammond and prepare him for this important post.

Before being nominated to the Rate Commission, Tony owned

and was a managing member of T. Hammond Company, a private

consulting firm based in Arlington, Virginia. He has also served as

the Senior Vice President of the direct marketing firm Feather,

Larson and Synhorst and senior consultant to Forbes 2000, Inc.

He has a wealth of experience. He has been a great contributor

to his community and to our State. He has been a friend and loyal

servant for a great many. It is a real honor today to introduce to

you and to give high recommendation to Tony Hammond for appointment to be Commissioner of the Postal Rate Commission.

Senator AKAKA. Thank you very much, Senator Bond, for your

personal notes, as well. We really appreciate your statement.

Senator BOND. Thank you, Mr. Chairman.

Senator AKAKA. Before we proceed further, I would like to welcome Commissioner Omas, Chairman of the Postal Rate Commission, and Commissioner Covington, the PRC’s Vice Chairman-elect.

I want to welcome you to the hearing this morning.

The Committee rules require that an inquiry be conducted into

the experience, qualifications, suitability, and integrity of a nominee to serve in the position to which he or she has been named.

The Committee has received all the required information on our

two nominees. Ms. Goldway and Mr. Hammond have provided written responses to pre-hearing questions submitted by the Committee

concerning issues relevant to the position on the Postal Rate Commission. Our Committee staff have reviewed all of the information,

including the financial disclosure reports submitted by the Office of

Government Ethics.

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1 Biographical information and responses to prehearing questions from Ms. Goldway appear

in the Appendix on pages 10 and 18 respectively.

Copies of the nominees’ biographical information and prehearing

responses will be included in the record as part of this hearing and

will be available upon request. Our witnesses’ financial statements

are available for inspection by the public in the Committee office,

and Senator Cochran and I have personally reviewed their FBI

background investigation reports.

The Committee rules require that all nominees be under oath

while testifying on matters relating to their suitability for office, including the policies and programs which the nominees will pursue,

if confirmed.

Ms. Goldway and Mr. Hammond, would you please stand and

raise your right hand. Do you solemnly swear to tell the truth, the

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

Ms. GOLDWAY. I do.

Mr. HAMMOND. I do.

Senator AKAKA. Thank you. Please be seated.

Ms. Goldway and Mr. Hammond, I want to thank you for being

with us and to congratulate you on your nominations. If either of

you have anyone you would wish to recognize at this hearing,

please do so at this time. Ms. Goldway?

Ms. GOLDWAY. Thank you, Senator Akaka. At this time, I would

simply like to introduce my husband, Ambassador Derek Shearer,

who is with me today who has been my partner and best friend in

all of my life’s endeavors, and particularly in my public service career.

Senator AKAKA. Thank you very much for being here. Mr. Hammond, do you have anyone here?

Mr. HAMMOND. Just my nephew, Tracy Hammond of Washington, DC is with us here today.

Senator AKAKA. Thank you. Now, we will welcome your opening

statement or comments that you may have. Ms. Goldway, will you

please proceed with your statement.

TESTIMONY OF HON. RUTH Y. GOLDWAY,1 TO BE A

COMMISSIONER ON THE POSTAL RATE COMMISSION

Ms. GOLDWAY. My statement includes a thank you to Senator

Clinton, so we will—when she arrives shortly. Thank you, Senator

Akaka and Members of the Committee. Thank you for inviting me

to appear this morning. I respect and appreciate the careful consideration you have given to Postal issues during the 41⁄2 years that

I have served on the Postal Rate Commission.

And I want to thank Senator Clinton for coming today to introduce me. She has provided many kindnesses to me and my family

over the years and was instrumental in my first appointment. For

the record, I wanted to note that Senator Clinton was instrumental

in establishing the first semi-Postal stamp, the breast cancer research stamp, which I supported as a Commissioner, and she has

now been involved in your efforts to establish the semi-Postal

stamp honoring the September 11 heroes.

At my first appearance before this Committee as a Postal Rate

Commission neophyte, Senator Levin kindly granted me the benefit

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1 Biographical information and responses to prehearing questions from Mr. Hammond appear

in the Appendix on pages 29 and 36 respectively.

of the doubt regarding my competence, because I had the good

sense to go to the University of Michigan. [Laughter.]

Now I am here again, and I come before the Committee today

with what I believe is a record of accomplishments and attention

to issues that demonstrate my competence and my commitment to

the work of the Postal Rate Commission.

Consistent with my longtime interests in consumer issues, I have

focused attention on how household consumers are affected by the

Postal Service with regard to the rates they pay and the service

that they receive, such as the reliability and value of Priority Mail.

I have also worked hard to ensure that rates for all users reflect

an accurate assessment of the attributable costs and a fair share

of institutional costs.

Through written opinions, op-ed pieces, supplemental testimony,

meetings with Congressional and Senate staff, and public appearances, I have sought to bring these issues to the public and to the

Postal Service’s attention.

I am grateful for the opportunity the Senate has provided me to

serve our country. If you honor me with a second term on the PRC,

I pledge to work diligently and creatively with each of you, your

Committee staff, the Postal Service, the mailing community, and

with Chairman George Omas and my colleagues on the Commission to assure the health, vitality, and future of the Postal Service.

Together, we must plan for its transformation into a communications network for the 21st Century, while continuing to uphold its

unique responsibility to bind the Nation, delivering the mail as

uniformly as possible to every American household.

Thank you, and I am pleased to answer any questions that you

might have.

Senator AKAKA. Thank you very much. I want to ask Mr. Hammond for your statement. Will you please proceed?

TESTIMONY OF TONY HAMMOND,1 TO BE A COMMISSIONER ON

THE POSTAL RATE COMMISSION

Mr. HAMMOND. Thank you, Mr. Chairman. I greatly appreciate

you and the Committee taking time during this very busy session

towards the end of Congress for scheduling this hearing, and a special thanks to Senator Bond for taking time out of his schedule,

also, to come and be here today.

In the interest of time, because of your schedule, I prepared no

special opening statement. I am pleased to be here with my fellow

Commissioner, Ruth Goldway, and I look forward to being able to

work with you and the Committee staff on the betterment of the

Postal Service. Thank you very much for taking the time.

Senator AKAKA. Thank you very much for your statement. Ms.

Goldway and Mr. Hammond, the Committee has three questions

we ask of all nominees. I ask that you respond to them together.

Is there anything you are aware of in your backgrounds that

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

which you have been nominated?

Ms. GOLDWAY. I don’t believe there is anything.

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Mr. HAMMOND. No.

Senator AKAKA. Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably

discharging the responsibilities of the office for which you have

been nominated?

Ms. GOLDWAY. No.

Mr. HAMMOND. No.

Senator AKAKA. Do you agree, without reservation, to respond to

any reasonable summons to appear and testify before any duly constituted Committee of Congress if you are confirmed?

Ms. GOLDWAY. I do.

Mr. HAMMOND. Yes, most certainly.

Senator AKAKA. Thank you so much for your responses. I have

a few questions of my own, but before I proceed with the question,

I want to welcome Senator Clinton. While she is catching her

breath, I want to introduce her to Tony Hammond. We are delighted to have you here, Senator Clinton. We know you have a

personal relationship with Ms. Goldway and would look forward to

a statement from you and any introductions you may have this

morning.

TESTIMONY OF HON. HILLARY RODHAM CLINTON, A U.S.

SENATOR FROM THE STATE OF NEW YORK

Senator CLINTON. Thank you so much, Mr. Chairman. I am delighted and honored to be here and have this opportunity to speak

on behalf of Commissioner Goldway. She has been nominated for

a full term to the Commission on which she has served honorably

and well since 1998. She has been a friend of mine for many, many

years and she has deep ties in New York, having grown up in the

city and attended public schools all the way through City College.

She has, as I am sure the record reflects, a remarkable array of

accomplishments, working at the highest levels as a public affairs

professional with expertise in consumer issues, urban planning,

education, and the arts. She has also helped protect the consumer

as an Assistant to the Director of California’s Department of Consumer Affairs during the 1970s, and served the public as a city

council member and Mayor of the City of Santa Monica from 1979

to 1983.

During her tenure on the Postal Rate Commission, she has

shown a true commitment to improving our mail service for household consumers, as well as a commitment to the overall effectiveness of the U.S. Postal Service. I express the strongest possible

support, both as a longtime friend, but equally important in this

context, as a user of the mail, for the Commissioner’s nomination,

and I thank you, Mr. Chairman, for letting me come and make my

statement. I apologize for being a little tardy today and I look forward to our continuing work together. Thank you.

Senator AKAKA. Thank you very much, Senator Clinton, for your

personal remarks. We certainly appreciate your appearance here

this morning.

Senator CLINTON. Thank you, Mr. Chairman.

Senator AKAKA. Thank you. I would like to continue with my

question to Ms. Goldway.

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You are being nominated to a second term as a Postal Rate Commissioner. The Postal Reorganization Act of 1970 gives the Postal

Service a clear mandate to develop innovative, effective, and efficient services for the Nation’s mail users. In this era of expanding

Internet use, the Postal Service is having to adjust to this cultural

shift in order to maintain competitive rates and to break even. As

a member of the PRC, what role do you see the Commission taking

in the future to ensure the vitality of the Postal Service?

Ms. GOLDWAY. I think our primary role is to consider the innovations in rates and classifications that the Postal Service would

present to us and to both facilitate those innovations and to consider them in the light of the entire mailing community so that

those innovations work effectively for everyone.

Our responsibility is to look at the entire network of communications and how the Postal Service fits into that. So when we review

these suggested innovations, I think we want to make sure that the

public’s overall concerns are met, not just the Postal Service.

I think we also are very much involved in the discussions about

the future of the Postal Service, and we have, both in the context

of written opinions in hearings and in meetings such as the summit that occurred in June, provided new ideas for the Postal Service to consider with regard to phased rates or a non-denominational

stamp or ways to provide additional information on mailing material that the public might find beneficial.

We are not responsible for the day-to-day operations of the Postal

Service, but I think in the regulatory role that we provide, we can

offer suggestions and occasionally leadership in how to assist the

Postal Service in adjusting to these changing markets.

Senator AKAKA. Thank you for your response.

Mr. Hammond, I am not sure if you have had an opportunity to

review the transcripts of the two Postal Rate Summits convened

this summer by the Postal Service and the PRC, but I know there

was a lively discussion of the use of phased rates. What are your

thoughts on the use of phased rates?

Mr. HAMMOND. Well, I have had an opportunity to look at the

phased rate issue with regard to the two summits which were held,

but not in great detail because I was not on the Commission yet

when those two summits sponsored by the PRC and the Postal

Service were held. But I know there have been a great deal of comments lately, especially from the mailing industry, about predictability and stability in the rates.

I would not want to comment before I actually saw what was before us, but indeed, I think that there needs to be further discussion of the phased rates. I think it is beneficial for dialogue to continue. And while I would not want to say that I would automatically go for phased rate increases before we had a case before us,

I think it is very beneficial to continue the discussion on that right

now.

Senator AKAKA. Thank you. Ms. Goldway, the Postal Service has

filed a request for a negotiated service agreement with the Postal

Rate Commission. What is the time frame for the consideration of

the NSA and will the PRC handle this case differently than other

rate cases?

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Ms. GOLDWAY. We are hoping to proceed with this case within 6

months. I think 180 days is our framework. We believe that we can

review cases that are discrete in this manner in a shorter time

frame than we do the comprehensive rate cases, and we believe

that, at least initially, the outlook is for a cooperative discussion

and as speedy as possible decision.

While I do not want to commit to a specific time frame because

we have obligations with regard to due process and we are not yet

certain how many parties will intervene in the case, it does look

like we can review this perhaps in even a shorter time frame than

the guidelines that we have established for ourselves.

Senator AKAKA. Thanks for your response. The Postal Service

has been criticized for providing inadequate financial data in rate

cases. Ms. Goldway, you have had an opportunity to decide rate

cases. What do you believe would assist the Commission in its rate

case deliberations?

Ms. GOLDWAY. The crux of our decision making process at the

Postal Rate Commission is determining what the costs are that the

Postal Service is incurring so that we can decide on the fair rates

that are needed. We regularly have disputes about the information

that is put before us with regard to whether it is adequate or sufficient, and there is a great deal of motions practice and time involved in requesting more information from the Postal Service so

that we feel comfortable making decisions about costs, and some

disputes with some of the parties about what is the accurate information that the Postal Service is providing.

I feel certain that if the Postal Rate Commission had subpoena

power, we could request information from the Postal Service, not

that we would necessarily use that subpoena power, but the indication that we had that power would provide us with an opportunity

to get the cost information we need more quickly with fewer disputes among the parties, and that, in fact, it might facilitate decisions that we make and speed the process along. So I have been

an advocate for a change in the legislation that would give us that

power to get more information.

Senator AKAKA. Thank you. Mr. Hammond, as the Postal Service’s transformation plan is implemented, there may be plant consolidations and post office closings. Would you explain the role

played by the PRC in decisions relating to locating, relocating, or

closing facilities?

Mr. HAMMOND. There is a specific appeals process to the Postal

Rate Commission that is in the regulations. There has been since

the Reorganization Act. One of the things that we are responsible

for assuring is that all the rules are followed in any closings or consolidations. I think because of the monopoly situation that the

Postal Service has, I think it is a very big responsibility for the

Postal Rate Commission to especially scrutinize that process.

While we do not have any closing cases before us right now, yes,

indeed, the transformation plan anticipates possibly that being

done. It appears to me that the regulations in place do adequately

cover the potential for a citizen or individuals, to ask for the review

process by the Rate Commission. But if the Postal Service was unresponsive, and I have no indication that they would be, but if they

were unresponsive, that any further regulatory power that the

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Rate Commission might need could be necessary in case that did

occur.

Senator AKAKA. I would also ask that question to Ms. Goldway,

in commenting on the role played by the PRC in decisions relating

to locating, relocating, or closing facilities. We have chatted with

the Postmaster General about this. As you know, anywhere in the

United States, whenever folks from the community hear there

might be a closing, Congress hears from them. So it is a very sensitive matter and I thought I would ask you, also, for comments on

this.

Ms. GOLDWAY. Thank you, Senator Akaka. As a former mayor,

I am particularly interested in this and have thought about it in

the context of urban planning issues and how important post offices can be to the social fabric of the communities that they are

in.

I do not believe that the issues about post office closings or locations are adequately addressed in the current legislation. I am not

necessarily seeking power for the Postal Rate Commission with regard to more review, but I feel that there is not yet an adequate

way in which we can both assure that post offices of a historical

significance or of a particularly important social significance to

small communities are preserved and still give the Postal Service

the flexibility it needs to consolidate, because I believe it does need

more flexibility to consolidate and close Postal facilities and to

place Postal facilities in other institutions that people go to more

readily.

So I think this is an issue that needs to be discussed and worked

on further. I feel that the current legislation, while it does provide

individual citizens with an opportunity to appeal to us if the Postal

Service acts improperly within their own regulations, we are not

given any power to tell the Postal Service to change their actions

if we determine that they have not been appropriate. We simply

provide a public forum for people’s concerns without any avenue for

address.

So I am not sure it is an adequate regulation and legislation at

the moment, and I would like to work further with the Postal Service and with the Congress in considering ways that we might address those concerns because I know you experience them, as well,

in your home State. I think this is an issue that the Postal Service

is going to have to address very quickly in the coming years to save

costs.

Senator AKAKA. I want to thank Ms. Goldway and Mr. Hammond. Thank you again for your cooperation with this process and

for being with us today. It has been, I would say, if anything, a personal hearing with friends in the Senate and we look forward to

the confirmation process being completed as soon as we can.

If there are any further questions, we will certainly send them

to you for any response.

I have no further questions for you. I want to thank you again

for coming and wish you well in all that you do.

If there is no further business to come before the Committee, the

hearing is adjourned.

[Whereupon, at 9:37 a.m., the Committee was adjourned.]

(9)

A P P E N D I X

PREPARED STATEMENT OF SENATOR BUNNING

Thank you, Mr. Chairman.

This country’s mail system is one of the most basic and important functions of

government. Six days a week, Americans across the country rely on their mail carriers to deliver their letters and packages.

Last year’s anthrax attacks showed us how important reliable mail delivery is.

However, the Postal Service is facing some serious financial problems that must

be addressed in the coming months and the Postal Rate Commissioners will play

a large part in the Postal Service’s success as they consider Postal Rate increases.

Postal Rate Commissioners also have other important duties, including investigating complaints by postal customers about Postal rates and fees and hearing appeals from Postal customers about the closing of their retail post office.

I hope that you will always keep in mind the affect that closing a post office can

have on a community—particularly a small, rural community, and that this is a decision that should not be made lightly.

I appreciate the time our two witnesses have taken to be here today, and look

forward to hearing from them.

PREPARED STATEMENT OF DIANNE FEINSTEIN, A U.S. SENATOR FROM

THE STATE OF CALIFORNIA

I am pleased to introduce Ruth Goldway to the Committee. Ms. Goldway has been

nominated by President Bush to be a Commissioner of the U.S. Postal Rate Commission and has been serving as a Commissioner since 1998.

Ms. Goldway is married to Professor Derek Shearer and they have three children:

Julie, Anthony, and Casey.

Before serving on the Commission, Ms. Goldway traveled with her husband to

Finland where he served as U.S. Ambassador from 1994 through 1997.

I am proud to say that Ms. Goldway has also served the people of my State, California:

• Ms. Goldway served as Director of Public Affairs at California State University, Los Angeles;

• She was Assistant to the Director of California’s Department of Consumer Affairs where she was a successful advocate on behalf of consumers, women, and urban issues; and

• Ms. Goldway was elected council member and Mayor of the City of Santa

Monica and served as Founder and Chairperson of the Santa Monica Pier

Restoration Corporation.

Serving as a Commissioner these last four years, Ms. Goldway has become well

respected not only by her colleagues but by those whose businesses are tied to the

operations of the U.S. Postal Service.

Her experience in public and private life has brought an invaluable perspective

to the complex issues facing the U.S. Postal Service during a time of increasing uncertainty. I am confident that Ms. Goldway will continue to make significant contributions to the Commission with her reasoned judgments on postal rates and service standards.

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