U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

" ! SENATE 107th Congress

1st Session

S. RPT.

2001

107–1

ACTIVITIES OF THE COMMITTEE ON

GOVERNMENTAL AFFAIRS

REPORT

OF THE

COMMITTEE ON GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

AND ITS

SUBCOMMITTEES

FOR THE

ONE HUNDRED FIFTH CONGRESS

JANUARY 29, 2001.—Ordered to be printed


congress.#13
(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

HANNAH S. SISTARE, Staff Director and Counsel

ELLEN B. BROWN, Senior Counsel

JOYCE A. RECHTSCHAFFEN, Democratic Staff Director and Counsel

DARLA D. CASSELL, Chief Clerk

III

105TH CONGRESS

FRED THOMPSON, TENNESSEE, Chairman

WILLIAM V. ROTH, JR., DELAWARE 1

TED STEVENS, Alaska 1

SUSAN M. COLLINS, Maine

SAM BROWNBACK, Kansas

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

DON NICKLES, Oklahoma

ARLEN SPECTER, Pennsylvania

BOB SMITH, New Hampshire 2

ROBERT F. BENNETT, Utah 2

JOHN GLENN, Ohio

CARL LEVIN, Michigan

JOSEPH I. LIEBERMAN, Connecticut

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

HANNAH S. SISTARE, Staff Director and Counsel

LEONARD WEISS, Minority Staff Director

LYNN L. BAKER, Chief Clerk

1Did not serve on the Committee during the Special Investigation Hearings from May

21, 1997 to March 10, 1998.

2 Joined the Committee during the Special Investigation Hearings from May 21, 1997 to

March 10, 1998.

SUBCOMMITTEES OF THE 105TH CONGRESS

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

Ms. COLLINS, of Maine, Chair

Mr. ROTH, JR. of Delaware 1

Mr. STEVENS, of Alaska 1

Mr. BROWNBACK, of Kansas

Mr. DOMENICI, of New Mexico

Mr. COCHRAN, of Mississippi

Mr. NICKLES, of Oklahoma

Mr. SPECTER, of Pennsylvania

Mr. SMITH, of New Hampshire 2

Mr. BENNETT, of Utah 2

Mr. GLENN, of Ohio

Mr. LEVIN, of Michigan

Mr. LIEBERMAN, of Connecticut

Mr. AKAKA, of Hawaii

Mr. DURBIN, of Illinois

Mr. TORRICELLI, of New Jersey

Mr. CLELAND, of Georgia

OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND

THE DISTRICT OF COLUMBIA

Mr. BROWNBACK, of Kansas, Chairman

Mr. ROTH, JR., of Delaware 1

Mr. SPECTER, of Pennsylvania

Mr. BENNETT, of Utah 2

Mr. LIEBERMAN, of Connecticut

Mr. CLELAND, of Georgia

INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES

Mr. COCHRAN, of Mississippi Chairman

Mr. STEVENS, of Alaska 1

Ms. COLLINS, of Maine

Mr. DOMENICI, of New Mexico

Mr. NICKLES, of Oklahoma

Mr. SPECTER, of Pennsylvania

Mr. SMITH, of New Hampshire 2

Mr. LEVIN, of Michigan

Mr. AKAKA, of Hawaii

Mr. DURBIN, of Illinois

Mr. TORRICELLI, of New Jersey

Mr. CLELAND, of Georgia

1Did not serve on the Subcommittee during the Special Investigation Hearings from May

21, 1997 to March 10, 1998.

2 Joined the Subcommittee during the Special Investigation Hearings from May 21, 1997

to March 10, 1998.

IV

CONTENTS

Page

I. Highlights of Activities .................................................................................. 1

High Risk Agencies ................................................................................... 2

Information Security/Vulnerability ......................................................... 2

Results Act ................................................................................................ 2

Government Procurement Reform ........................................................... 2

Regulatory Issues ...................................................................................... 3

Vacancies Act ............................................................................................ 3

Financial Mismanagement ....................................................................... 3

Year 2000 Computer Problem .................................................................. 3

Decennial Census ...................................................................................... 4

Federalism ................................................................................................. 4

Export Controls ......................................................................................... 4

Budget Reforms ......................................................................................... 5

Inspectors General .................................................................................... 5

District of Columbia .................................................................................. 5

Federal Personnel Issues .......................................................................... 6

Special Investigation ................................................................................ 6

II. Committee Jurisdiction ................................................................................. 8

III. Bills and Resolutions Referred and Considered ......................................... 8

IV. Hearings ......................................................................................................... 8

V. Reports and GAO Reports ............................................................................ 16

VI. Official Communications ............................................................................... 19

VII. Legislative Action .......................................................................................... 20

Measures Enacted Into Law .................................................................... 20

Measure Favorably Reported by Committee and Passed by the Senate ............................................................................................................... 28

Selected Measures Considered by Committee ........................................ 29

VIII. Presidential Nominations ............................................................................ 31

IX. Activities of the Subcommittees .................................................................. 35

INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES SUBCOMMITTEE

I. Hearings ........................................................................................................... 35

II. Legislation ........................................................................................................ 39

III. Report, Committee Print, and GAO Reports ................................................. 42

OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND THE DISTRICT OF

COLUMBIA SUBCOMMITTEE

I. Hearings ........................................................................................................... 43

II. GAO Reports .................................................................................................... 53

III. Legislation ........................................................................................................ 54

IV. Other Activities ................................................................................................ 56

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

I. Historical Background—50th Anniversary of the Subcommittee ................ 58

II. Subcommittee Hearings During the 105th Congress ................................... 62

III. Legislative Activities During the 105th Congress ........................................ 73

IV. GAO Reports and Committee Print ................................................................ 75

107th Congress

1st Session " SENATE !

S. RPT.

107–1

ACTIVITIES OF THE COMMITTEE ON GOVERNMENTAL

AFFAIRS DURING THE 105TH CONGRESS

JANUARY 29, 2001.—Ordered to be printed

Mr. THOMPSON, from the Committee on Governmental Affairs,

submitted the following

REPORT

This report reviews the legislative and oversight activities of the

Committee on Governmental Affairs during the 105th Congress.

These activities parallel the broad scope of responsibilities vested

in the Committee by the Legislative Reorganization Act of 1946, as

amended, rule XXV(k) of the Standing Rules of the Senate, and additional authorizing resolutions.

I. HIGHLIGHTS OF ACTIVITIES

In the 105th Congress, the Senate Governmental Affairs Committee continued its pursuit of a smaller, more efficient and accountable government. The Committee’s jurisdiction is extensive.

This writ covers not only whether taxpayers are getting their money’s worth on over $1.9 trillion in annual Federal expenditures, but

also includes the $700 billion in annual regulatory expenditures,

the $850 billion government loan portfolio, Federal insurance programs and the impact of Federal mandates on State and local governments. The Committee is committed to effective oversight of all

of these instruments used by the government.

Over the years, the Committee has consistently worked to create

a leaner, more efficient government. Legislation originating from

the Committee established a new framework for government accountability. This statutory framework includes the Government

Performance and Results Act of 1993 (P.L. 103–62); financial management statutes, such as the Chief Financial Officers Act of 1990

(P.L. 103–356), the Federal Managers’ Financial Integrity Act of

1996 (P.L. 104–208), and the Federal Financial Management

Improvement Act of 1982 (P.L. 97–255); and acquisition and

information technology management reforms, such as the Federal

Acquisition Streamlining Act of 1994 (P.L. 103–355) and the

Clinger-Cohen Act of 1996 (Divisions D and E of P.L. 104–106).

These statutes will be driving Federal agencies to modernize and

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improve both performance and accountability. Chairman Thompson

said ‘‘it is for us—the Congress and the Administration—now to

work together to ensure that these management reforms now in

place are implemented and accomplish their goals to improve government performance and results.’’ The Committee believes that

considerable progress was made, particularly in light of the extensive period of time devoted to the Committee’s special Investigation

of Illegal or Improper Activities in Connection with 1996 Federal

Election Campaigns.

HIGH RISK AGENCIES

The Committee spotlighted the most egregious examples of government waste and mismanagement. The Committee held hearings

on those agencies the General Accounting Office (GAO) identified

as most susceptible to waste, fraud, abuse and mismanagement:

The IRS, the Department of Defense (DOD), the Department of

Housing and Urban Development (HUD) and the Census Bureau.

Subsequently, Chairman Thompson and Senators Cochran,

Brownback, Durbin and Cleland were appointed from the Committee to the Conference Committee which finalized the historic

IRS reform act.

INFORMATION SECURITY/ VULNERABILITY

The Committee uncovered and identified failures of information

security affecting our international security and vulnerability to

domestic and international terrorism. Chairman Thompson highlighted our Nation’s vulnerability to computer attacks—from international and domestic terrorists to crime rings to everyday hackers.

The Committee conducted studies on the computer security vulnerabilities of the State Department, the FAA, the Social Security

Administration, and the Veterans’ Administration.

RESULTS ACT

Meaningful implementation of the Government Performance and

Results Act (GPRA) was a major Committee priority. GPRA requires agencies to set multiyear strategic goals and corresponding

annual goals, measure performance toward the achievement of

those goals, and report on their progress. At a first-ever joint hearing of their two committees, Chairman Thompson and Appropriations Committee Chairman Ted Stevens called on Federal agencies

to actively work for a leaner, results-oriented government by complying with GPRA.

To spur agency implementation of GPRA, the Committee engaged in correspondence with the Office of Management and Budget (OMB) and individual agencies regarding their statutory obligations under GPRA. In addition, the Committee sponsored audit and

investigative work at GAO with respect to strategic plans, performance planning, performance budgeting, and program evaluation.

GOVERNMENT PROCUREMENT REFORM

Given that the Federal Government spends about $200 billion

annually on buying everything from weapons systems to computer

systems to everyday commodities, the Committee’s role is to ensure

that, within that system, industry sellers and government buyers

offer and acquire, respectively, maximum value for the taxpayer.

3

Chairman Thompson developed consensus legislation, the FAIR

Act, to require Federal agencies to identify those activities currently performed by Federal employees that could be performed by

the private sector. The Committee added language to other legislation to further streamline and simplify the procurement system.

The Committee also opposed legislation and regulations which

would have added unnecessary government-unique requirements to

Federal contracts and increased costs to the taxpayer.

REGULATORY ISSUES

The Chairman initiated a series of GAO investigations of the Administration’s management of the regulatory process and its compliance with ‘‘transparency requirements’’ and cost-benefit analyses. Chairman Thompson and Senator Levin drafted and moved

the Regulatory Improvement Act through the Committee, after

working successfully to develop broad bipartisan support for this

measure. Chairman Thompson also drafted and passed regulatory

accounting legislation, now law, which requires that Federal agencies report on the costs of Federal regulatory programs for fiscal

year 1999.

VACANCIES ACT

Chairman Thompson, working with Senator Robert Byrd (D–

WV), Senator Strom Thurmond (R–SC), and Committee Democrats,

developed and managed to enactment bipartisan legislation to preserve our Constitutional system of checks and balances and assure

that officials serving in key government jobs have been nominated

and confirmed as required by law. At the time of enactment of the

Vacancies Act (Public Law 105–277), 20 percent of the 340 Executive Branch positions which require Senate confirmation were held

by acting officials.

FINANCIAL MISMANAGEMENT

As part of its efforts to improve financial management in the

Federal Government, the Committee highlighted financial mismanagement at DOD, where waste, fraud, and abuse totalled billions of dollars. Of the GAO audit opinion of the Federal Government’s first ever consolidated financial statements, Chairman

Thompson said: ‘‘The government failed miserably. The government’s deteriorating accounting systems put Congress at a severe

disadvantage because we lack reliable information to assess program performance, control costs and stop widespread waste, fraud

and abuse.’’

In that audit, Secretary of the Treasury Robert Rubin described

the work in the Executive Branch to improve financial management. But, he agreed that more needed to be done. Secretary Rubin

wrote, ‘‘Despite the substantial progress that has been made, however, further improvements are clearly necessary.’’

YEAR 2000 COMPUTER PROBLEM

Through hearings and other actions, the Committee kept pressure on the Executive agencies to treat the anticiapted year 2000

computer failure with the seriousness it demands.

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DECENNIAL CENSUS

The Committee identified, examined and worked toward the resolution of the Census Bureau’s problems and progress in preparing

for the 2000 decennial census. The 2000 census was the subject of

two oversight hearings and a Committee-requested GAO investigation. The Committee challenged the new Census director, during

his confirmation process, to rise to his critical management tasks.

FEDERALISM

Rule XXV of the Standing Rules of the Senate vests responsibility for intergovernmental relations with the Committee. Federalism, the Federal Government’s relationship with the States, is

the constitutional principle that the Federal Government has limited powers and that government closest to the people—States and

localities—plays a critical role in our governmental system.

Shortly after becoming Chairman, Senator Thompson initiated a

GAO review of agency compliance with Title II of the Unfunded

Mandates Reform Act. Among other things, Title II requires agencies to consider the extent to which regulations impose significant

unfunded mandates on State, local, and tribal governments. It also

calls for agencies to consider regulatory alternatives and to select

the alternative that is the least costly, most cost-effective, or least

burdensome. GAO found that, in many instances, Title II had little

effect on agency rulemaking. Senator Thompson also worked closely with the National Governors’ Association, the National Conference of State Legislatures, and other State and local government

organizations to reform the regulatory process and to make agencies more sensitive to State and local government concerns.

Chairman Thompson also sponsored a resolution to stop repeal

of the Reagan Executive Order on Federalism (E.O. 12612) and an

attempt to replace it with a new Executive Order that was opposed

by State and local officials. That resolution passed the Senate

unanimously as an amendment to the appropriations bill for the

Departments of Commerce, Justice, and State, the Judiciary, and

related agencies for Fiscal Year 1999. Chairman Thompson subsequently introduced legislation requiring Federal agencies to respect

Federalism when formulating policies and implementing the laws

passed by Congress.

EXPORT CONTROLS

In 1998, the Administration’s export control policy became a

focus of national attention following allegations that American companies undermined national security by illegally transferring sensitive technology to China. Through its Subcommittee on International Security, Proliferation, and Federal Services, chaired by

Senator Cochran, the Committee exercised consistent oversight on

the issue of technology transfer and its facilitation of dangerous

weapons proliferation. Because of this experience and expertise,

Chairman Thompson and Senator Cochran were included on a Special Task Force created by the Majority Leader to examine the

issue of technology transfers to China.

The Subcommittee on International Security, Proliferation, and

Federal Services and the full Committee held a series of hearings

examining America’s export control process. At these hearings, a

number of witnesses raised questions about the effectiveness and

5

efficiency of the U.S. export control system, and about the extent

to which they believed lax export control policies helped the People’s Republic of China improve the reliability of its ballistic missile

program. The attention given this issue and the findings of the

Committee contributed to legislative action. As part of the National

Defense Authorization Act for Fiscal Year 1999, Congress returned

communications satellite exports to the U.S. Munitions List run by

the State Department, removing them from the more loosely-controlled Commerce Control List administered by the Department of

Commerce. In addition, recognizing the need to further examine

our export control policy, Chairman Thompson requested the Inspectors General at six agencies—the Departments of Commerce,

Defense, State, Treasury, Energy, and the Central Intelligence

Agency—to conduct an interagency investigation of the licensing

process for dual-use items and munitions.

BUDGET REFORMS

Budgetary reform is another priority of the Committee. Senate

rules grant joint jurisdiction on budget process reform legislation to

the Committee and the Committee on the Budget. Chairman

Thompson teamed up with Budget Committee Chairman Domenici

to push for budget reform. A bill was reported out of the Committee to provide for a biennial budget and appropriations process

which would reduce the amount of time spent on the budget process and provide more time for program oversight and reviewing

government performance.

INSPECTORS GENERAL

Nineteen hundred and ninety eight marked the 20th anniversary

of the Inspector General Act. To commemorate the occasion, the

Committee approved a joint resolution which was enacted congratulating the Inspectors General on their efforts to fight waste,

fraud and abuse in the Federal Government. On September 9,

1998, the Committee conducted a hearing to address various

threats to the effectiveness and independence of the Inspectors

General. As a result of the hearing, the Committee began an investigation into alleged attempts to intimidate the Inspector General

for the Department of Housing and Urban Development. The Committee also considered legislative proposals to amend the Inspector

General Act.

DISTRICT OF COLUMBIA

Because the Committee has jurisdiction over the matters of the

District of Columbia, the Committee devoted substantial time to

D.C. reforms. The major piece of reform legislation in the 105th

Congress was the National Capital Revitalization and Self-Government Improvement Act of 1997 which was enacted as part of the

Balanced Budget Act of 1997 (Public Law 105–33). The Committee

was involved extensively in the development of the Act which was

designed to address serious financial and management problems

the District of Columbia was experiencing. The law, among other

things, temporarily altered the home rule status of D.C. by reducing the power of the Mayor and D.C. Council and transferring authority over various items to the previously-established financial

control board and the Federal Government. Some of the major reVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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sponsibilities transferred to the Federal Government include financial responsibility for D.C. prisons and court system and $4.8 billion for D.C. pension liability for police, firefighters, teachers, and

judges. The Act also increased the Federal contribution to Medicaid

from 50 percent to 70 percent. The financial control board assumed

authority over nine major agencies. The authority transferred to

the control board included the ability to appoint and dismiss agency heads and direct the implementation of management reforms.

FEDERAL PERSONNEL ISSUES

In the 105th Congress, the Committee continued to exercise active oversight over a major part of its jurisdiction: Issues affecting

Federal employees. The Committee reviewed and approved legislation which was enacted to improve the Federal Employees’ Health

Benefits Program and the Federal Employees Group Life Insurance

program.

The Committee also addressed issues affecting the Federal Employees’ Compensation Act—the comprehensive workers’ compensation law for Federal employees. The Committee reported legislation

which was enacted to ensure that persons who commit fraud in the

receipt of FECA benefits would lose their entitlement to such benefits.

Finally, the Committee addressed budget issues affecting Federal

and postal employees and retirees. While achieving targeted savings, the Committee approved budget reconciliation legislation

which ended the delay in cost-of-living adjustments for Federal and

postal retiree annuities, thereby treating the date on which cost-ofliving adjustments are paid to Federal annuitants in the same

manner as Social Security recipients and military retirees. These

reforms were incorporated into the Balanced Budget Act of 1997

(Public Law 105–33).

SPECIAL INVESTIGATION

In the wake of numerous revelations in the news media of unusual, and possibly illegal, campaign contributions during the 1996

presidential campaign, the Senate Majority Leader announced in

early December 1996 that the Committee on Governmental Affairs

would conduct an investigation on behalf of the Senate into these

fundraising practices following the convocation of the 105th Congress in January 1997. The Majority Leader chose to entrust the

Committee, which has the broadest oversight jurisdiction and most

extensive subpoena authority of any committee of the Senate, with

this responsibility.

Subsequently, on March 11, 1997, the Senate voted unanimously

to authorize the Committee to conduct ‘‘an investigation of illegal

or improper activities in connection with 1996 Federal election

campaigns’’ (S. Res. 39). Significantly, however, a deadline of December 31, 1997, was imposed on the investigation. The Committee’s work was further impeded by the many witnesses who fled

the country or asserted their Fifth Amendment right against selfincrimination, and the many public and private entities that either

delayed their responses to Committee subpoenas or inquiries, or

simply refused to cooperate at all. Despite these obstacles, however,

in the brief time available to it, the Committee conducted a worldwide investigation: It issued 427 subpoenas, received over 1.5 milVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00010 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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1See U.S. Department of Justice, ‘‘Future Tech International and its CFO Agree to Plead

Guilty to Tax and Campaign Finance Charges’’ (press release of December 17, 1998) (listing

Task Force pleas and convictions).

lion pages of documents, took 200 depositions, conducted over 200

witness interviews, and held 32 days of hearings at which 72 witnesses testified. In early 1998, the Committee published a final report of 9,600 pages—S. Rept. 105–167 on March 10, 1998—and still

returned $850,000 to the U.S. Treasury.

Unfortunately, the Justice Department’s efforts to investigate the

1996 fundraising scandals lagged behind those of the Committee’s

Special Investigation. An internal FBI memorandum sent to Director Louis Freeh in August 1997, for example, expressed concerns

that the Committee investigators were often ahead of the Department’s Campaign Financing Task Force (CFTF).

By the end of the 105th Congress, the Task Force investigating

the campaign finance scandals had achieved eight guilty pleas or

convictions by individuals or corporations for activities related to

their campaign fundraising:1 Juan Ortiz (in connection with donations to the Democratic National Committee [DNC]); Johnny

Chung (relating to straw donor contributions to the DNC); Howard

Glicken (relating to contributions to the Democratic Senatorial

Campaign Committee); Future Tech International (relating to

straw donor contributions to the DNC); Gene Lum, Nora Lum,

Trisha Lum, and Michael Brown (relating to straw donor contributions to the campaign of Senator Edward Kennedy). Numerous additional persons also stood accused of crimes in cases that had not

yet concluded—including DNC fundraisers Maria Hsia, Yah Lin

(‘‘Charlie’’) Trie, and Pauline Kanchanalak—and numerous other

individuals or organizations were the subjects of ongoing investigations.

By the end of the 105th Congress, a separate inquiry by the U.S.

Attorney’s office in New York had also produced five convictions or

guilty pleas in connection with another subject examined during

the Committee’s Special Investigation—the unlawful ‘‘swapping’’ of

campaign contributions between the DNC and the International

Brotherhood of Teamsters. As a result of the Committee’s inquiry,

moreover, an Independent Counsel was also appointed to investigate Secretary of the Interior Bruce Babbitt, and preliminary inquiries under the Independent Counsel Act had been opened concerning the President, the Vice-President, and three other Administration officials. (In 1999, the Independent Counsel declared there

to be insufficient evidence to warrant an indictment in the Babbitt

case. Attorney General Janet Reno declined to request an Independent Counsel for any of the other preliminary inquiries.)

All in all, the Committee’s Special Investigation demonstrated

that the U.S. campaign finance system had become subject to wide

abuse and had essentially lost its ability to restrain and regulate

the conduct of political fundraising in this country. Even before the

end of the 105th Congress, the Committee’s public airing of the

1996 abuses was being widely cited by advocates of campaign finance reform—including both those who support a more strict regulatory framework and those who favor substituting full and complete disclosure rules for our current system of regulations.

8

II. COMMITTEE JURISDICTION

In the 95th Congress, the jurisdiction and functions of the Committee on Governmental Affairs were substantially enlarged with

the Senate approval of the Committee System Reorganization

Amendments of 1977 (S. Res. 4, 95–1, February 4, 1977). S. Res.

4 also changed the Committee’s name from the Committee on Government Operations to the Committee on Governmental Affairs.

Rule XXV(1)(k) of the Standing Rules of the Senate requires reference to this Committee of all proposed legislation, and other matters, dealing with (1) archives of the United States; (2) budget and

accounting measures, other than appropriations, except as provided

in the Congressional Act of 1974; (3) census and collection of statistics, including social and economic statistics; (4) congressional organization, except for matters which amend the rules or orders of the

Senate; (5) Federal civil service; (6) government information; (7)

intergovernmental relations; (8) municipal affairs of the District of

Columbia; (9) organization and management of U.S. nuclear export

policy; (10) organization and reorganization of the Executive

Branch of the Government; (11) Postal Service; and (12) status of

officers and employees of the United States including their classification, compensation and benefits.

The Committee is further authorized and directed to (1) receive

and examine reports of the Controller General of the United States

and to submit to the Senate such recommendations as the Committee deems advisable; (2) study the efficiency, economy and effectiveness of all agencies and departments of the government; (3)

evaluate the effects of laws enacted to reorganize the Legislative

and Executive Branches of Government; and (4) study the intergovernmental relations between the United States and international

organizations of which the United States is a member.

In addition, the Committee has primary oversight and legislative

jurisdiction over the GAO, the Office of Personnel Management,

OMB, the Postal Service, and the General Services Administration,

and processes all legislation relating to the disposal and the negotiated sales of Federal surplus property.

III. BILLS AND RESOLUTIONS REFERRED AND CONSIDERED

During the 105th Congress, 146 Senate bills and 43 House bills

were referred to the Committee for consideration. Also, 12 Concurrent Senate Resolutions, 7 Senate Resolutions and 2 House Concurrent Resolutions were referred to the Committee. Of the legislation

received and considered, 50 bills were reported and 25 were enacted into law. In addition, 16 measures were enacted as part of

other legislation.

IV. HEARINGS

During the 105th Congress, the Committee and its three Subcommittees held a total of 133 hearings during 120 days on legislation, a wide variety of oversight issues, and nominations. At the

full Committee level, a number of important topics were examined,

including:

9

BIENNIAL BUDGETING

On April 23, 1997, the Committee held a hearing on S. 261, the

Biennial Budgeting and Appropriations Act. The hearing focused

on the legislative proposal to convert the current annual budget

and appropriations process to a 2-year, or biennial, cycle. The Committee heard from Franklin D. Raines, Director, OMB; Hon. Robert

F. Bennett, U.S. Senator from the State of Utah; Charles J.

Whalen, Senior Economist at the Institute for Industry Studies at

Cornell University; Louis Fisher, Senior Specialist in Separation of

Powers with the Congressional Research Service; and Susan J. Irving, Associate Director for Budget Issues, GAO. The bill was reported by the Committee to the Senate for consideration, but it was

never acted upon.

CORPORATE SUBSIDY REFORM

On February 13, 1997, the Committee held a hearing on S. 207,

the Corporate Subsidy Reform Commission Act of 1997. The purpose of the hearing was to review S. 207, as introduced by Senator

John McCain. The bill would create a Commission intended to fairly and independently review corporate subsidies and make recommendations to the President and the Congress for the retention,

reform or termination of such subsidies. The Committee heard from

Hon. John McCain, U.S. Senator from the State of Arizona; Hon.

John F. Kerry, U.S. Senator from the State of Massachusetts; Hon.

Russell D. Feingold, U.S. Senator from the State of Wisconsin;

Thomas Schatz, President, Citizens Against Government Waste;

Grover Nordquist, President, Americans for Tax Reform; Courtney

Cuff, Green Scissors Campaign Director, Friends of the Earth; and

Dean Stencil, Fiscal Policy Analyst with the Cato Institute. The bill

was reported by the Committee to the Senate for consideration, but

it was never acted upon.

HIGH RISK AREAS

The Committee held several hearings during the 105th Congress

on high risk areas at IRS, the Department of Defense (DOD), the

Department of Housing and Urban Development (HUD) and the

Bureau of the Census.

On March 5, 1997 the Committee held a hearing on Lasting Solutions to High Risk Programs. Witnesses included John Koskinen,

Deputy Director for Management, OMB; Gene Dodaro, Assistant

Comptroller, General Accounting and Information Management Division, GAO; Dwight Robinson, Deputy Secretary, HUD; and Susan

Gaffney, Inspector General, HUD.

On April 10, 1997 the Committee held a hearing on IRS and the

Taxpayer at Risk. Testifying at the hearing were Lawrence Summers, Deputy Secretary of Treasury, Department of Treasury; Michael Dolan, Deputy Commissioner, IRS; Dr. Rona Stillman, Chief

Scientist, Office of Computers and Telecommunications Accounting

and Information Management Division, GAO; and Donald C. Alexander, Akin, Gump, Strauss, Hauer and Feld.

A third high risk hearing was held on May 1, 1997 on the Department of Defense at Risk. Witnesses included Henry Hinton, Assistant Comptroller General for National Security and International Affairs, GAO; R. Noel Longuemare, Principal Deputy

Under Secretary for Acquisition and Technology, DOD; John F.

10

Phillips, Deputy Under Secretary for Logistics, DOD; Emmett

Paige, Assistant Secretary for Command, Control, Communications,

and Intelligence, DOD; and John J. Hamre, Under Secretary and

Comptroller, DOD.

INTERNAL REVENUE SERVICE RESTRUCTURING

On March 12, 1998, the Committee held a hearing to discuss the

challenges of restructuring the Internal Revenue Service (IRS). The

hearing focused specifically on the personnel and management

flexibilities contained in legislation aimed at restructuring the IRS.

Testifying at this hearing were Charles O. Rossotti, Commissioner

of the Internal Revenue Service; G. Edward DeSeve, Deputy Director for Management, OMB; Carol J. Okin, Associate Director, Office

of Merit Systems Oversight and Effectiveness, Office of Personnel

Management; and Michael Brostek, Associate Director, Federal

Workforce and Management Issues, GAO.

GOVERNMENT PERFORMANCE AND RESULTS ACT

The Government Performance and Results Act (GPRA) is the

foundation of better government management, and oversight of the

implementation of this law is critical to improving government performance. In June 1997, at a historic first-ever joint hearing of the

two committees, Chairman Fred Thompson and Appropriations

Committee Chairman Ted Stevens called on Federal agencies to actively work for a smaller, leaner government by complying with

GPRA. Witnesses at this hearing were the Hon. Franklin D.

Raines, Director, Office of Management and Budget; and James

Hinchman, Acting Comptroller General of the United States,

United States General Accounting Office. Oversight continued

throughout the 105th Congress as the government implemented its

first budget cycle under GPRA.

INFORMATION SECURITY

On May 19, 1998, the Committee continued to exercise its oversight over a major part of its jurisdiction: Information management. In particular, the Committee held a hearing on how Federal

agencies are providing computer security. The hearing, ‘‘Weak

Computer Security in the Government: Is the Public at Risk?’’ provided many new insights into how the government has not kept

pace with the advances in technology and its multiple applications.

In fact, the hearing revealed that, not only has technology advanced, it has become less complex for users and its availability is

not limited but instead is widely distributed around the world.

Specifically, this hearing addressed systemic problems, which

make government computer and communication systems vulnerable to both deliberate and inadvertent attacks. Dr. Peter

Neumann, Principal Scientist, Computer Science Laboratory, SRI

International, testified that our Nation’s underlying information infrastructure (for example, power generation, transmission and distribution; air traffic control; and telecommunication) remain at

risk. Even though the risk is widely known, Dr. Neumann stated

that until high-visibility disasters occur, few people are willing to

admit that something drastic needs to be done. He said that may

take a Chernobyl-scale event to raise awareness levels adequately.

Also, seven members of L0pht, a ‘‘hacker’’ think tank, provided tesVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00014 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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timony to the Committee. L0pht said that, in a matter of 30 minutes, they could unlock the security systems within the Internet

and make the entire system unusable for a couple of days. While

they have shared this finding with appropriate authorities, they asserted that nothing has been done to remedy the problem.

On June 24, 1998, another hearing was conducted, ‘‘Cyber Attack: Is the Nation at Risk?’’ This hearing addressed threats and

vulnerabilities to the U.S. national security due to weak computer

security.

The Director of Central Intelligence, George Tenet, testified that

information warfare has the potential to deal a crippling blow to

our national security if strong measures are not taken to counter

it. Director Tenet noted that the United States is highly dependent

on information systems and therefore is the most likely target for

an information attack. Potential threats range from national intelligence and military organizations, terrorists, criminals, industrial

competitors, hackers, and disgruntled or disloyal insiders. Director

Tenet stated that several countries, including Russia and China,

have government-sponsored information warfare programs with

both offensive and defensive applications. These countries see information warfare as a way of leveling the playing field against a

stronger military power, such as the United States. The more difficult threat to assess is that from non-State actors, such as terrorists and criminals. Cyber attacks offer these groups greater security and operational flexibility. They can launch an assault from almost anywhere in the world without directly exposing themselves

to physical harm.

The Director of the National Security Agency (NSA), Lieutenant

General Ken Minihan, testified on the findings from the DOD’s exercise ‘‘Eligible Receiver.’’ This exercise demonstrated that our Nation’s information infrastructure is riddled with vulnerabilities and

that there exist severe deficiencies in our ability to respond to a coordinated attack on our national infrastructure and information

systems. During the exercise, a team of hackers from NSA, using

easily available tools obtained from the Internet, proved that they

could deny our military the ability to deploy forces and conduct operations.

In the third hearing on computer security in Federal Government

agencies, the Committee examined whether private information

held by the Federal Government—information relating to one’s

identification, finances and health—is susceptible to unauthorized

access and manipulation by computer hackers. The hearing on September 23, 1998, ‘‘Information Security,’’ focused on the results of

penetration testing performed at two Federal agencies—the Department of Veterans Affairs (VA) and the Social Security Administration (SSA) .

Regarding SSA, the Committee heard testimony from agents of

the SSA Office of Inspector General, who described a variety of

computer crimes committed by SSA employees. The agents discussed in detail a series of prosecutions known as ‘‘Operation

Pinch,’’ in which 14 SSA employees were convicted for their part

in a widespread credit card fraud ring centered in New York. The

agents had determined that SSA employees sold identity information on 20,000 people whose credit cards were fraudulently activated by a West African crime ring, resulting in bank losses of at

12

least $70 million. The cases demonstrate the danger of the ‘‘inside

threat’’ to agencies that do not adequately monitor and limit computer access of their own employees.

Witnesses from GAO described the results of penetration testing

at the VA and SSA. GAO was able, during its VA testing, to alter,

disclose or delete sensitive information, such as financial data and

personal information on veterans’ medical records and benefit payments. GAO’s penetration went undetected because the VA does

not have a monitoring system. GAO’s penetration testing of the

SSA exposed vulnerabilities in the SSA computer system to both

external and internal intrusions. These types of weaknesses place

at risk private information held by SSA, including Social Security

numbers, earnings, disabilities, and benefits.

YEAR 2000

On April 1, 1998, a hearing was held on the Year 2000 problem,

‘‘Crashing into the Millennium.’’ This hearing addressed the Administration’s management of the problem to ensure that critical

government systems are Year 2000 compliant and interpret the

digits ‘‘00’’ as the year 1900 instead of the year 2000. The ability

of Federal agencies to fix this problem was deemed insufficient.

The Assistant to the President for Year 2000, John Koskinen,

along with the Deputy Secretaries from the Departments of Health

and Human Services (HHS) and Transportation discussed their efforts to: Increase public awareness; enhance information or data

exchange between and among Federal, State and local governments, as well as between public and private sectors; and ensure

contingency plans are in place to avoid disruption of critical governmental operations and prevent harm to the health and safety of

the public.

EXPORT CONTROLS

The Committee held a hearing on June 25, 1998, to examine the

Defense Technology Security Agency and its role in approving critical technology exports.

Witnesses included Dr. Peter Leitner, Senior Strategic Trade Advisor, Defense Technology Security Administration, and Franklin

Miller, Principal Deputy Assistant Secretary for Strategy and

Threat Reduction, DOD. This hearing discussed serious allegations

about the adequacy and fairness of the process by which dual-use

export licensing decisions are evaluated within the Department of

Defense and in the interagency dispute-resolution process.

INSPECTOR GENERAL ACT: 20TH ANNIVERSARY

Nineteen hundred ninety eight marked the 20th anniversary of

the Inspector General (IG) Act, and the Committee, as the Senate’s

primary IG oversight authority, held a hearing on September 9,

1998, to reflect on the health of the IGs and to consider various

proposals to amend the IG Act. The Committee heard testimony

from two prominent IGs—Susan Gaffney of HUD and June Gibbs

Brown of HHS—and a witness from OMB.

First, Ms. Brown described her generally positive working relationship with HHS Secretary Donna Shalala, noting that an inspector general can be a valued internal advisor on issues relating to

fraud and abuse, without compromising the IG’s independence. In

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contrast, Ms. Gaffney discussed her troubled relationship with senior management at HUD, including difficulties over HUD’s handling of an equal employment opportunity complaint against the

IG, and pressure placed upon Ms. Gaffney to forego criticizing a

high profile HUD reorganization initiative. The witnesses offered

recommendations on how the IG Act might be amended and how

IG/agency relationships should be structured to ensure IG productivity and independence.

CENSUS

The Committee’s first census oversight hearing on March 11,

1997, gave Members an overview of the Bureau’s plans for Census

2000. The focus of the testimony was two-fold: (1) to hear from the

Secretary of Commerce and the Director of the Census Bureau regarding the Bureau’s preparation and plans for Census 2000 and

(2) to discuss how census data is used by States, local governments

and the private sector. A subsequent hearing April 16, 1997, focused exclusively on the legal and scientific aspects of sampling

and adjustment in the decennial census. It was clear from the testimony that opinions on the legal and statistical propriety of sampling in Census 2000 are as diverse as the methods used to conduct

the census itself. For instance, a GAO report on the 2000 Census,

‘‘Preparations for Dress Rehearsal Leave Many Unanswered Questions,’’ focused on a number of major operational design activities

still in the development stage including address list development,

outreach and promotion, staffing, and other major management

issues. GAO auditors concluded that the longer these key decisions

remain unresolved, the greater the risk of a failed 2000 census.

The Committee also held a hearing on September 17, 1998, on

the nomination of Dr. J. Kenneth Prewitt, to be director of the Census Bureau. The Committee focused on Dr. Prewitt’s qualifications

to manage Census 2000 in light of the numerous immediate challenges facing the incoming director. The Senate confirmed Dr.

Prewitt as Director of the Census Bureau on October 21, 1998.

VACANCIES ACT

On March 18, 1998, the Committee held a hearing, ‘‘Oversight of

the Implementation of the Vacancies Act,’’ then in effect. Appearing

before the Committee as witnesses were: Hon. Robert C. Byrd, U.S.

Senator from the State of West Virginia; Hon. Strom Thurmond,

U.S. Senator from the State of South Carolina; Joseph N. Onek,

Principal Deputy Associate Attorney General, accompanied by Daniel Koffsky, Special Counsel, Office of Legal Counsel; Joan M.

Hollenbeck, Associate General Counsel, GAO; Michael J. Gerhardt,

Professor of Law, Case Western Reserve University; Morton Rosenberg, Specialist in American Public Law, Congressional Research

Service; and Paul C. Light, Director, Public Policy Program, The

Pew Charitable Trusts.

All of the witnesses except those from the Justice Department

supported legislation that would overturn the Justice Department’s

arguments of exemption from the Vacancies Act, and that would

create an enforcement mechanism. Senators Byrd and Thurmond

stressed the need for air-tight legislation so that the Justice Department could no longer argue that it is exempt from the Act.

GAO testified that the Justice Department’s interpretation of the

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Vacancies Act was contrary to the language and legislative history

of both the Act and its organic statute and also offered GAO’s recommendation that legislation be passed to explicitly provide that

the Act can be superseded only by a statute providing an alternative means for filling a particular vacancy. Prof. Michael Gephardt of Case Western University testified to the need to change

some of the terms of art used in the Vacancies Act, and suggested

lengthening the 120-day time period. Morton Rosenberg of the Congressional Research Service, spoke of the problem of transferring

assistant secretaries from one position to another without undergoing Senate confirmation. Paul Light, of the Pew Charitable

Trusts, testified that one of the problems with noncompliance of

the Vacancies Act is the unnecessary proliferation of political appointees in the government at a time when total Federal employment was declining.

REFORM OF NATIONAL SECURITY INFORMATION CLASSIFICATION AND

DECLASSIFICATION SYSTEM

On May 7, 1997, the Committee held a hearing to review the consensus final report and recommendations of the Commission on

Protecting and Reducing Government Secrecy. The Committee

heard testimony from the four congressional members of the Commission—Senator Daniel Patrick Moynihan, the Commission’s

Chairman; Senator Jesse Helms; Representative Larry Combest,

the Commission’s Vice Chairman; and Representative Lee Hamilton. The Committee also heard testimony from former Secretary

of State Lawrence Eagleburger; journalist David Wise; and Alden

V. Munson, Jr., senior vice president of the Information Systems

Group of Litton Industries, Inc., a government contractor involved

in classified programs.

On March 25, 1998, the Committee held a second hearing on the

national security information system to consider S. 712, legislation

which reflected the recommendations of the Commission on Protecting and Reducing Government Secrecy. The Committee heard

testimony from Edmund Cohen, Director of Information Management, Central Intelligence Agency; William Leonard, Director of

Security Programs, Department of Defense; A. Bryan Seibert, Director of the Office of Declassification, Department of Energy; Steven Garfinkel, Director of the Information Security Oversight Office, National Archives and Records Administration; T. Jeremy

Gunn, Executive Director, John F. Kennedy Assassination Records

Review Board; and Steven Aftergood, Director of the Project on

Government Secrecy, Federation of American Scientists. The Committee received specific suggestions from these witnesses on provisions of the legislation and proposals for amendments to improve

the legislation.

THE REGULATORY IMPROVEMENT ACT OF 1998

On September 12, 1997, the Committee held its first hearing on

S. 981, the Regulatory Improvement Act of 1998. This hearing built

on the Committee’s extensive hearing record and legislative history

on regulatory reform from the 104th Congress. Testifying at this

hearing were Sally Katzen, Administrator, OMB’s Office of Information and Regulatory Affairs; L. Nye Stevens, Director, Federal

Management and Workforce Issues, General Government Division,

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GAO; Thomas F. Walton, Director, Economic Policy, General Motors Corporation, on behalf of the Alliance for Understandable, Sensible and Accountable Regulation; Sal Risalvato, a small business

owner, on behalf of the National Federation of Independent Business; James L. Martin, Director, Office of State-Federal Affairs,

National Governors’ Association; Ernest Gellhorn, Professor of

Law, George Mason University School of Law; John D. Graham,

Director, Harvard Center for Risk Analysis; C. Boyden Gray, Partner, Wilmer, Cutler and Pickering, former Counsel to the President

and former Counsel to the Presidential Task Force on Regulatory

Relief; David G. Hawkins, Senior Attorney, Natural Resources Defense Council; Paul R. Portney, President, Resources for the Future; and David Vladek, Director, Public Citizen Litigation Group.

The Committee held its second regulatory reform hearing on February 24, 1998. The first two witnesses were Hon. George

Voinovich, Governor of Ohio and President of the National Governors’ Association, and Hon. Ben Nelson, Governor of Nebraska

and Chairman of the Committee on Natural Resources, National

Governors’ Association. Also testifying were Dr. Milton Russell,

Senior Fellow of the Joint Institute for Energy and the Environment and Professor Emeritus at the University of Tennessee;

Nancy Donley, President, Safe Tables Our Priority; Sue Doneth,

Member, Safe Tables Our Priority; Dr. Lester Crawford, Georgetown Center for Food and Nutrition Policy; Michael Resnick, National School Boards Association; Dr. Bruce Alberts, President, National Academy of Sciences; Warren Belmar, Chair, ABA Administrative Law Committee; Frank Mirer, Director of Health and Safety, United Auto Workers; Karen Florini, Senior Attorney, Environmental Defense Fund; Robert Litan, Director of Economic Studies

and Cabot Family Chairholder of Economics, Brookings Institution;

and Robert Hahn, Resident Scholar, American Enterprise Institute.

THE MANDATES INFORMATION ACT

On June 3, 1998, the Committee held a hearing on S. 389, the

Mandates Information Act. This bill would amend the Congressional Budget Act of 1974 to require the Director of the Congressional Budget Office (CBO), in preparing estimates of the direct

costs of all Federal private sector mandates, to estimate also the

indirect impact of such mandates on consumers, workers, and

small businesses, including any disproportionate impact in particular regions or industries. It also would subject to a point of

order any legislation for which the CBO Director is unable to determine the economic impact of a Federal mandate.

Witnesses at the hearing were Senator Spencer Abraham (R–

MI), the sponsor of S. 389; Representative Rob Portman (R–OH),

the House sponsor of H.R. 3534, the House companion bill; James

L. Blum, Deputy Director, Congressional Budget Office; R. Bruce

Josten, Executive Vice President of Government Affairs, U.S.

Chamber of Commerce; Mary Ann Cricchio, owner of Da Mimmo

Italian Restaurant in Baltimore, Maryland on behalf of the National Restaurant Association; and, Sharon Buccino, Legislative

Counsel, Natural Resources Defense Council. The bill was reported

by the Committee to the Senate for consideration, placed on the

Senate calendar, but never acted upon.

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V. REPORTS AND GAO REPORTS

During the 105th Congress, the Committee and its Subcommittees prepared and issued 20 reports, special prints and studies on

these topics:

(1) Biennial Budgeting and Appropriations (S. Rept. 105–72);

(2) Corporate Subsidy Reform Commission Act of 1997 (S. Rept.

105–107);

(3) Census of Agriculture Act of 1997 (S. Rept. 105–141);

(4) The National Drought Policy Act of 1997 (S. Rept. 105–144);

(5) Lobbying Disclosure Technical Amendments Act of 1997 (S.

Rept. 105–147);

(6) Federal Reports Elimination Act of 1997 (S. Rept. 105–187);

(7) Regulatory Improvement Act of 1998 (S. Rept. 105–188);

(8) Federal Financial Assistance Management Improvement Act

of 1998 (S. Rept. 105–194);

(9) Extension of a Quarterly Financial Report Program Administered by the Secretary of Commerce (S. Rept. 105–241);

(10) Vacancies Act (S. Rept. 105–250);

(11) To Improve Administration of Sanctions Against Unfit

Health Care Providers under the Federal Employees Health Benefits Program (S. Rept. 105–257);

(12) To provide for a system to classify information in the interests of national security and a system to declassify such information (S. Rept. 105–258);

(13) To provide a process for identifying the functions of the Federal Government that are not inherently governmental functions,

and for other purposes (S. Rept. 105–269);

(14) To Establish a Commission to Assist in Commemoration of

the Centennial of Powered Flight and the Achievements of the

Wright Brothers (S. Rept. 105–294);

(15) To Require Federal Employees to use Federal Charge Cards

(S. Rept. 105–295);

(16) To Correct a Provision Relating to Termination of Benefits

for Convicted Persons (S. Rept. 105–296);

(17) To Improve Congressional Deliberation on Proposed Federal

Private Sector Mandates (S. Rept. 105–299);

(18) To Amend the Federal Advisory Committee Act (S. Rept.

105–309);

(19) To require that the Office of Personnel Management Submit

Proposed Legislation under which Group Universal Life Insurance

and Group Variable Universal Life Insurance would be Available

under Chapter 87 of title 5 (S. Rept. 105–337);

(20) To Establish a Federal Commission on Statistical Policy to

Study the Reorganization of the Federal Statistical System (S.

Rept. 105–367).

GAO REPORTS

Also during the 105th Congress, 64 reports were issued by the

General Accounting Office at the request of the Committee:

(1) Nuclear Waste: DOE’s Estimates of Potential Savings From

Privatizing Cleanup Projects, RCED–97–49R (January 31, 1997);

(2) Land Management Agencies: Information on Selected Administrative Policies and Practices, RCED–97–40 (February 11, 1997);

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(3) High-Risk Areas: Actions Needed to Solve Pressing Management Problems, T–AIMD—GGD–97–60 (March 5, 1997);

(4) Department of Energy: Management and Oversight of Cleanup Activities at Fernald, RCED–97–63 (March 14, 1997);

(5) IRS Systems Security: Tax Processing Operations and Data

Still at Risk Due to Serious Weaknesses, AIMD–97–49 (April 8,

1997);

(6) IRS Systems Security: Tax Processing Operations and Data

Still at Risk Due to Serious Weaknesses, T–AIMD–97–76 (April 10,

1997);

(7) Budget Process: Comments on S. 261—Biennial Budgeting

and Appropriations Act, T–AIMD–97–84 (April 23, 1997);

(8) DOD High-Risk Areas: Eliminating Underlying Causes Will

Avoid Billions of Dollars in Waste, T–NSIAD—AIMD–97–143 (May

1, 1997);

(9) Financial Management: The Prompt Payment Act and DOD

Problem Disbursements, AIMD–97–71 (May 23, 1997);

(10) Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness, T–GGD—AIMD–97–

144 (June 24, 1997);

(11) Relocation Travel: Numbers and Costs Reported by Federal

Organizations for Fiscal Years 1991 Through 1995, GGD–97–119

(June 30, 1997);

(12) 2000 Census: Progress Made on Design, but Risks Remain,

GGD–97–142 (July 14, 1997);

(13) Combating Terrorism: Status of DOD Efforts to Protect Its

Force Overseas, NSIAD–97–207 (July 21, 1997);

(14) Defense Computers: DFAS Faces Challenges in Solving the

Year 2000 Problem, AIMD–97–117 (August 11, 1997);

(15) Defense Computers: Issues Confronting DLA in Addressing

Year 2000 Problems, AIMD–97–106 (August 12, 1997);

(16) Defense Computers: Improvements to DOD Systems Inventory Needed for Year 2000 Effort, AIMD–97–112 (August 13, 1997);

(17) Defense Computers: SSG Needs to Sustain Year 2000

Progress, AIMD–97–120R (August 19, 1997);

(18) Tax Administration: Assessment of IRS’ Report on Its Fiscal

Year 1995 Compliance Initiatives, GGD–97–158 (August 27, 1997);

(19) Regulatory Reform: Comments on S. 981—The Regulatory

Improvement Act of 1997, T–GGD—RCED–97–250 (September 12,

1997);

(20) Inventory Management: Vulnerability of Sensitive Defense

Material to Theft, NSIAD–97–175 (September 18, 1997);

(21) Combating Terrorism: Federal Agencies’ Efforts to Implement National Policy and Strategy, NSIAD–97–254 (September 26,

1997);

(22) Defense Computers: LSSC Needs to Confront Significant

Year 2000 Issues, AIMD–97–149 (September 26, 1997);

(23) Regulatory Reform: Agencies’ Efforts to Eliminate and Revise Rules Yield Mixed Results, GGD–98–3 (October 2, 1997);

(24) Federal Ships: Policy Changes in the Disposal of Surplus

Ships, NSIAD–98–17R (October 17, 1997);

(25) Financial Management: Outsourcing of Finance and Accounting Functions, AIMD—NSIAD–98–43 (October 17, 1997);

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(26) Defense IRM: Poor Implementation of Management Controls

Has Put Migration Strategy at Risk, AIMD–98–5 (October 20,

1997);

(27) Defense Computers: Technical Support Is Key to Naval Supply Year 2000 Success, AIMD–98–7R (October 21, 1997);

(28) Executive Guide: Information Security Management: Learning From Leading Organizations (Exposure Draft), AIMD–98–21

(November 1, 1997);

(29) Federal Advisory Committee Act: Overview of Advisory Committees Since 1993, T–GGD–98–24 (November 5, 1997);

(30) Combating Terrorism: Spending on Governmentwide Programs Requires Better Management and Coordination, NSIAD–98– 39 (December 1, 1997);

(31) Financial Management: Profile of Financial Personnel in

Large Private Sector Corporations and State Governments, AIMD– 98–34 (January 2, 1998);

(32) Regulatory Reform: Changes Made to Agencies’ Rules Are

Not Always Clearly Documented, GGD–98–31 (January 8, 1998);

(33) Defense Computers: Air Force Needs to Strengthen Year

2000 Oversight, AIMD–98–35 (January 16, 1998);

(34) Unfunded Mandates: Reform Act Has Had Little Effect on

Agencies’ Rulemaking Actions, GGD–98–30 (February 4, 1998);

(35) Regulatory Reform: Comments on S. 981—The Regulatory

Improvement Act of 1998, T–GGD—RCED–98–95 (February 24,

1998);

(36) IRS Personnel Flexibilities: An Opportunity to Test New Approaches, T–GGD–98–78 (March 12, 1998);

(37) Nuclear Waste: Understanding of Waste Migration at Hanford is Inadequate for Key Decisions, RCED–98–80 (March 13,

1998);

(38) 2000 Census: Preparations for Dress Rehearsal Leave Many

Unanswered Questions, GGD–98–74 (March 26, 1998);

(39) Social Security Financing: Implications of Stock Investing

for the Trust Fund, the Federal Budget, and the Economy, T–

AIMD—HEHS–98–152 (April 22, 1998);

(40) Defense Computers: Year 2000 Computer Problems Threaten DOD Operations, AIMD–98–72 (April 30, 1998);

(41) Year 2000 Computing Crisis: Potential for Widespread Disruption Calls for Strong Leadership and Partnerships, AIMD–98–

85 (April 30, 1998);

(42) Decennial Census: Overview of Historical Census Issues,

GGD–98–103 (May 1, 1998);

(43) Executive Guide: Information Security Management—Learning From Leading Organizations, AIMD–98–68 (May 1, 1998);

(44) Air Traffic Control: Weak Computer Security Practices Jeopardize Flight Safety, AIMD–98–155 (May 18, 1998);

(45) Computer Security: Pervasive, Serious Weaknesses Jeopardize State Department Operations, AIMD–98–145 (May 18,

1998);

(46) Information Security: Serious Weaknesses Put State Department and FAA Operations at Risk, T–AIMD–98–170 (May 19,

1998);

(47) Regulatory Reform: Agencies Could Improve Development,

Documentation, and Clarity of Regulatory Economic Analyses,

RCED–98–142 (May 26, 1998);

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(48) Defense Computers: Army Needs to Greatly Strengthen Its

Year 2000 Program, AIMD–98–53 (May 29, 1998);

(49) Federal Advisory Committee Act: General Services Administration’s Oversight of Advisory Committees, GGD–98–124 (June 15,

1998);

(50) Grant Programs: Design Features Shape Flexibility, Accountability, and Performance Information, GGD–98–137 (June 22,

1998);

(51) Defense Computers: Year 2000 Computer Problems Put

Navy Operations at Risk, AIMD–98–150 (June 30, 1998);

(52) Federal Advisory Committee Act: Views of Committee Members and Agencies on Federal Advisory Committee Issues, GGD– 98–147 (July 9, 1998);

(53) Results Act: Observations on the Office of Personnel Management’s Annual Performance Plan, GGD–98–130 (July 28, 1998);

(54) Decennial Census: Preliminary Observations on the Results

to Date of the Dress Rehearsal and the Census Bureau’s Readiness

for 2000, T–GGD–98–178 (July 30, 1998);

(55) Defense Networks: Management Information Shortfalls

Hinder Defense Efforts to Meet DISN Goals, AIMD–98–202 (July

30, 1998);

(56) Federal Rulemaking: Agencies Often Published Final Actions

Without Proposed Rules, GGD–98–126 (August 31, 1998);

(57) The Results Act: Assessment of the Governmentwide Performance Plan for Fiscal Year 1999, AIMD—GGD–98–159 (September 8, 1998);

(58) Information Security: Strengthened Management Needed to

Protect Critical Federal Operations and Assets, T–AIMD–98–312

(September 23, 1998);

(59) Chemical Weapons: DOD Does Not Have a Strategy to Address Low-Level Exposures, NSIAD–98–228 (September 23, 1998);

(60) Information Security: Serious Weaknesses Place Critical

Federal Operations and Assets at Risk, AIMD–98–92 (September

23, 1998);

(61) Acquisition Reform: Multiple-award Contracting at Six Federal Organizations, NSIAD–98–215 (September 30, 1998);

(62) Federal Surplus Ships: Government Efforts to Address the

Growing Backlog of Ships Awaiting Disposal, NSIAD–99–18 (October 22, 1998);

(63) Decennial Census: Additional Information for Hearing

Record on the Initial Results of the Census Dress Rehearsal, GGD–

99–5R (November 20, 1998);

(64) IRS Systems Security: Although Significant Improvements

Made, Tax Processing Operations and Data Still at Serious Risk,

AIMD–99–38 (December 14, 1998).

VI. OFFICIAL COMMUNICATIONS

During the 105th Congress, a total of 2,295 official communications were submitted to the Committee. Of these, 1,127 were from

the Comptroller General of the United States and 1,168 were from

the President of the United States and other executive departments. The communications included reports to advise and inform

the Congress, required annual or semi-annual agency budget and

activity summaries, and requests for legislative action. The Committee also received 26 petitions and memorials.

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VII. LEGISLATIVE ACTION

The Committee was highly productive in the 105th Congress. Important legislation was reported by the Committee, approved by

Congress and signed by the President in a variety of areas within

the Committee’s jurisdiction. The following are brief legislative histories of measures referred to the Committee or within the jurisdiction of the Committee, and in some cases, drafted by the Committee, which (1) became public law; (2) were favorably reported

from the Committee and passed by the Senate; and (3) were favorably reported from the Committee but were not subject to further

action. For information not included in this section please refer to

the Committee’s Legislative Calendar.

MEASURES ENACTED INTO LAW

S. 314—Federal Activities Inventory Reform (FAIR) Act (Public Law

105–270)

This law requires Federal agencies to prepare a list of activities

that are not inherently governmental functions that are being performed by Federal employees, submit that list to OMB for review,

and make the list publicly available. It also establishes an ‘‘appeals’’ process within each agency to challenge what is on the list

or what is not included on the list. S. 314 creates a statutory definition—identical to current regulation—for what is an ‘‘inherently

governmental function’’ that must be performed by the government

and not the private sector.

S. 314 was originally introduced by Senator Craig Thomas in

February 1997 as the Freedom from Government Competition Act.

It attempted to put into statute a policy embodied in OMB Circular

A–76 that the Federal Government will rely on the private sector

for goods and services that are not inherently governmental. The

bill was referred to the Subcommittee on the Oversight of Government Management, Restructuring and the District of Columbia on

March 5, 1997. The Subcommittee held hearings on June 18, 1997

and March 24, 1998. In order to favorably report the legislation,

significant revisions were necessary. Chairman Thompson worked

with the bill’s sponsors, other Members of the Committee, industry,

Federal employee unions, and the Administration to craft a compromise which represented a consensus of all interested participants.

The Chairman’s substitute amendment emanated from current

administrative policy. OMB Circular A–76 establishes the policy regarding government employees’ performance of activities that are

not inherently governmental functions and sets forth procedures for

determining whether such activities should be performed under

contract with private companies or using government facilities and

personnel. The policy embodied in OMB Circular A–76, that the

Federal Government will rely on the private sector for goods and

services that are not inherently governmental, is more than 40-

years old. However, there continue to be activities which are not

inherently governmental that the government performs for itself.

Therefore, the Chairman’s substitute was intended to establish a

process to evaluate those activities that continue to be performed

by government employees. On July 15, 1998, the Committee ordered the bill to be favorably reported with Chairman Thompson’s

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amendment in the nature of a substitute. The Committee filed a

report on July 28, 1998 (S. Rept. 105–269). The Chairman’s substitute amendment was passed by the Senate by unanimous consent on July 30, 1998. On October 5, 1998, the House passed S. 314

by voice vote under suspension of the rules. The President signed

the bill on October 8, 1998.

S. 1364—Federal Reports Elimination Act of 1998 (Public Law 105–

362)

S. 1364 eliminates or modifies congressionally mandated Federal

agency reports that are redundant, obsolete, or otherwise unnecessary on the recommendation of the Administration.

The bill was introduced on November 4, 1997 by Senators

McCain and Levin. In 1995, Congress enacted the Federal Reports

Elimination and Sunset Act of 1995 (P.L. 104–66), also sponsored

by Senators McCain and Levin. That act contained three major

provisions: One provision eliminated or modified approximately 200

reporting requirements imposed on Federal agencies in law by Congress; the second required the President to identify in the next

available budget message additional congressionally mandated reporting requirements that could and should be eliminated; and the

third provision terminates all annual or routine congressionally

mandated reporting requirements 4 years after enactment of the

1995 Act, or December 21, 1999. As a result of this legislation, the

President, in the FY 1997 Budget, provided Congress with a list of

400 reports recommended for elimination or modification. That list

of reports was used as the basis for S. 1364.

S. 1364 eliminates or modifies approximately 187 congressionally

mandated reports. The reports contained in the bill were distilled

from the list of 400 recommended reports included on the Administration’s list pursuant to the requirements of the 1995 Act. The

Committee circulated the Administration’s list to the chairmen and

ranking minority members of the relevant authorizing committees

for comment. As a result of the responses, which were incorporated

into the bill for introduction, the list of 400 reports was ultimately

reduced to 187 reports. The Committee also worked closely with

the Office of Information and Regulatory Affairs of the Office of

Management and Budget to clarify citations and any discrepancies

between the bill and the recommendations of the Administration.

On March 10, 1998, the Committee ordered the bill favorably reported with amendments. A written report was filed on May 11,

1998 (S. Rept. 105–187). The bill passed the Senate with amendments by unanimous consent on June 10, 1998, and passed the

House with amendment under suspension of the rules on October

13, 1998. On October 21, 1998, the Senate concurred in the House

amendment with an amendment by unanimous consent, and the

House agreed to the Senate amendment. The President signed the

bill on November 10, 1998.

S. 1397—Centennial of Flight Commemoration Act (Public Law

105–389)

This bill establishes a commission to assist in the commemoration of the centennial of powered flight and the achievement of the

Wright brothers.

22

S. 1397 was introduced in the Senate by Senator Helms on November 7, 1997, for himself and Senators Glenn, Dewine, and Faircloth. Rep. Hall introduced a similar bill, H.R. 2305, in the House

of Representatives on July 30, 1997, and it was referred to the

House Government Reform and Oversight Subcommittee on Civil

Service. The provisions of H.R. 2305 also were offered as an

amendment to H.R. 4057, the Airport Improvement Program Reauthorization Act of 1998, which was ordered to be reported to the

House from the House Committee on Transportation and Infrastructure on July 20, 1998. The Senate passed its own version of

H.R. 4057, but the conferees never reached agreement.

The Committee considered S. 1397 on July 15, 1998. The Committee unanimously adopted, by voice vote, Senator Glenn’s amendment in the nature of a substitute. The Committee voted by voice

vote to order the bill reported as amended. Chairman Thompson

and Senators Domenici and Nickles stated that they opposed the

motion to report S. 1397. Nonetheless, the Committee filed its report on August 25, 1998 (S. Rept. 105–294). On September 22,

1998, the Committee substitute was amended on the Senate floor

and passed, as amended, by the Senate by unanimous consent. The

House passed the bill by voice vote under suspension of the rules

on October 14, 1998, and the bill was signed by the President on

November 13, 1998.

S. 2161—Regulatory Right-to-Know (Public Law 105–277)

This bill provides government-wide accounting of regulatory costs

and benefits by requiring the President to submit to Congress an

accounting statement that estimates the costs and corresponding

benefits of Federal regulatory programs and program elements.

On June 11, 1998, Chairman Thompson introduced S. 2161, the

Regulatory Right-to-Know Act of 1998, with Senator Breaux. On

July 29, 1998, Chairman Thompson offered on the Senate floor

many of the provisions of S. 2161 as an amendment to S. 2312, the

Treasury and General Government Appropriations bill for Fiscal

Year 1999. On October 19, 1998, the Thompson regulatory accounting amendment was adopted in modified form as part of H.R. 4328,

the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999, which was signed into law on

October 21, 1998.

S. 2176—Federal Vacancies Reform Act of 1998 (Public Law 105–

277)

The purpose of this legislation is to restore the Senate’s advice

and consent prerogative, to make the Vacancies Act uniform in its

application, and to provide for its effective enforcement. The legislation comprehensively addresses the eligibility and length of service of acting officials to serve in Executive Branch positions for a

period of time without their appointments having received the advice and consent of the Senate and provides an enforcement mechanism to ensure compliance with acting officer qualifications and

time limits.

On June 16, 1998, S. 2176, the Federal Vacancies Reform Act of

1998, was introduced in the Senate by Chairman Thompson and

Senators Byrd, Thurmond, Lott, Roth, Cochran, and Hatch. On

June 17, 1998, the Committee ordered the bill favorably reported

23

with amendments, by a vote of 9–1. The Committee filed a report

on July 15, 1998 (S. Rept. 105–250). With further modifications,

the legislation was included as part of H.R. 4328, the Omnibus

Consolidated and Emergency Supplemental Appropriations Act for

Fiscal Year 1999 (Public Law 105–277), which was signed into law

on October 21, 1998.

International Postal Issues (Public Law 105–277)

With the support of Chairman Thompson and International Security, Proliferation, and Federal Services Subcommittee Chairman

Cochran, provisions affecting international postal services were included in the Omnibus Consolidated and Emergency Supplemental

Appropriations Act for Fiscal Year 1999 (Public Law 105–277).

The first provision transfers representational authority for U.S.

interests before international postal forums, such as the Universal

Postal Union, from the U.S. Postal Service to the U.S. State Department. International postal services are not covered by the current U.S. mail monopoly and many private sector carriers compete

with the Postal Service in providing international mail and parcel

services. Private sector carriers had charged that the representation at international forums, such as the Universal Postal Union,

should be accorded a neutral U.S. governmental entity, such as the

State Department, to ensure that private carrier interests, as well

as those of the U.S. Postal Service, were represented.

The second provision also addresses international postal services.

In order to prevent monopoly revenues from cross-subsidizing competitive international postal services, the legislation grants independent postal rate commissions the authority to review the costs,

revenues and volume for each international mail product or service

provided by the Postal Service in order to ensure that monopoly

revenues are not cross-subsidizing international mail services.

Federal Procurement Issues

Small Business Reauthorization Act of 1997 (Public Law 105–

135)

With the support of Chairman Thompson and Senator Glenn

and Senators Thurmond and Levin of the Committee on Armed

Services, language was enacted as part of the Small Business Reauthorization Act of 1997 to foster the participation of small

businesses in Federal contracting by facilitating competition by

and among small businesses and prohibiting the unnecessary

and unjustified bundling of Federal contracts which could preclude small business participation as contractors.

National Defense Authorization Act for Fiscal Years 1998 and

1999 (Public Law 105–85) and National Defense Authorization Act for Fiscal Year 1999 (Public Law 105–261)

As part of both these laws, language offered by Chairman

Thompson and Senator Glenn was enacted to further streamline

and simplify the government-wide procurement system, including

provisions relating to permitting electronic purchasing, limiting

executive compensation, and clarifying spare parts pricing.

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Government Paperwork Elimination Act (Public Law 105–277)

The Committee worked with the Committee on Commerce,

Science and Transportation to develop consensus language affecting government information policy which was enacted as part of

the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999 (Public Law 105–277). The Government Paperwork Elimination Act takes advantage of the advances in modern technology to lessen the paperwork burdens on

those who deal with the Federal Government. This is accomplished

by requiring OMB, through its existing responsibilities under current law, to develop policies to promote the use of alternative information technologies so that individuals who deal with the Federal

Government can reduce their cumulative burden of meeting the

Federal Government’s information demands.

Year 2000 Information and Readiness Disclosure Act (Public Law

105–271)

This law encourages the disclosure and exchange of information

about computer processing problems, solutions, and tests in connection with the transition to the year 2000 and provides for the establishment of working groups as a part of the President’s Year

2000 Council. Chairman Thompson developed language which was

enacted as part of this law to mitigate against false and inaccurate

year 2000 solicitations while promoting the open sharing of information.

H.R. 930—Travel and Transportation Reform Act (Public Law 105– 264)

This law requires Federal employees to use Federal travel charge

cards for payments of expenses of official government travel, establishes requirements for prepayment audits of Federal agency transportation expenses, authorizes reimbursement of Federal agency

employees for taxes incurred on travel transportation reimbursements, and authorizes test programs for the payment of Federal

employee travel expenses and relocation expenses.

H.R. 930 was introduced in the House of Representatives by Rep.

Horn on March 5, 1997. It passed the House of Representatives on

April 16, 1997, by voice vote and was received by the Senate and

referred to the Committee. The Committee considered H.R. 930 on

June 17, 1998, and ordered it favorably reported, with amendments

offered by Chairman Thompson, by voice vote. The Committee filed

its report on August 25, 1998 (S. Rept. 105–295). On September 1,

1998, the Senate passed H.R. 930 with amendments by unanimous

consent. The House agreed to the Senate amendments on October

5, 1998, and it was signed by the President on October 18, 1998.

H.R. 1316—To amend chapter 87 of Title 5, United States Code,

with respect to the order of precedence to be applied in the payment of life insurance benefits (Public Law 105–205)

H.R. 1316 amends chapter 87 of title 5, United States Code, and

directs the Office of Personnel Management to obey certain domestic relations orders when paying the proceeds of life insurance policies under the Federal Employees Group Life Insurance program.

It also permits courts to direct the assignment of such policies to

individuals specified in domestic relations orders.

25

H.R. 1316 was introduced in the House by Rep. Collins on April

14, 1997. The House Committee on Government Reform and Oversight approved the legislation, as amended, on June 11, 1997. It

was passed by the House on June 24, 1997, on the Corrections Calendar. The legislation was received in the Senate on June 25, 1997

and referred to the Committee on Governmental Affairs. On July

8, 1997, the legislation was referred to the Subcommittee on International Security, Proliferation, and Federal Services. No hearings

were held. On November 5, 1997, the legislation was approved by

the Committee without amendment. On June 18, 1998, the legislation passed the Senate under unanimous consent. On July 22,

1998, the President signed the bill into law.

H.R. 1836—The Federal Employees Health Care Protection Act of

1998 (Public Law 105–266)

This legislation amends chapter 89 of title 5, United States Code,

to improve the administration of the Federal Employees Health

Benefits Program. Specifically, the bill allows the government to

impose sanctions on health care providers or bars them from selling coverage to any government agency; encourages full disclosure

in discounted rate agreements; and establishes standards for readmitting discontinued plans and for crediting of associated contingency reserves.

H.R. 1836 was introduced by Rep. Burton on June 10, 1997. The

House Committee on Government Reform and Oversight approved

the legislation on October 31, 1997, and the House passed H.R.

1836 by voice vote, under suspension of the rules, on November 4,

1997.

The legislation was received in the Senate and referred to the

Committee on November 5, 1997. On November 11, the bill was referred to the Subcommittee on International Security, Proliferation,

and Federal Services. On March 31, 1998, a majority (eight members) of the Subcommittee approved reporting favorably H.R. 1836

to the full Committee. No hearings were held. On April 1, 1998, the

Committee favorably considered the legislation and ordered it to be

reported with an amendment. The report (S. Rept. 105–257) was

filed in the Senate by Chairman Thompson with amendments on

July 21, 1998. H.R. 1836, as amended, passed the Senate by unanimous consent on September 30, 1998. On October 5, the House suspended the rules and agreed to the Senate amendment by voice

vote. The bill was signed into law by the President on October 19,

1998.

H.R. 2015—Balanced Budget Act of 1997: Budget Reconciliation

(Public Law 105–33)

On June 17, 1997, the Committee approved a Fiscal Year 1998

budget reconciliation measure covering spending and saving proposals. The FY 1998 Budget Resolution instructed the Committee

to develop recommendations for deficit reduction in the amount of

$5.5 billion. These proposals reflected assumptions included in the

FY 1998 congressional budget resolution and included deficit reduction provisions pertaining to the Federal civil service retirement

and health insurance programs.

Included in this deficit reduction package were provisions to: (a)

increase postal and nonpostal employee contributions to the FedVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00029 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
26

eral retirement systems by 0.5 percent of pay, to be phased in beginning in 1999 through Fiscal Year 2002; (b) increase nonpostal

agency payments to the Federal retirement trust fund on behalf of

workers in the Civil Service Retirement System; (c) establish a new

formula governing health insurance premiums for Federal employees and annuitants under the Federal Employees’ Health Benefits

Program. (The new formula is based on the average total premium

cost of all insurance plans in FEHPB, weighted by the number of

participants in each plan, and is expected to reduce the government’s share of FEHBP costs by approximately $28 million over 5

years. This revision shielded participants from an expected increase in premiums due to the expiration of the previous formula);

and (d) shift workers’ compensation costs of the former Post Office

Department from the Federal Government to the Postal Service.

The provisions approved by the Committee were similar to provisions included in a House bill concerning the FY 1998 Budget Reconciliation.

Not included in this agreement was the proposal to continue the

3-month cost-of-living adjustments (COLA) delay for Federal retirees, as proposed in President Clinton’s FY 1998 budget.

These measures were included in the conference report to H.R.

2015 (H. Rept. 105–217) for the Balanced Budget Act of 1997 which

was signed into law by the President on August 5, 1997.

H.R. 2675—The Federal Employees Life Insurance Improvement Act

(Public Law 105–311)

H.R. 2675 is designed to improve the structure and administration of the Federal Employees Group Life Insurance Program—the

life insurance program the Federal Government provides for its civilian employees and retirees under chapter 87 of title 5, United

States Code. Rep. Mica introduced H.R. 2675 in the House on October 21, 1997. The bill was referred to the Committee on Government Reform and Oversight, which ordered the bill reported on October 31, 1997. H.R. 2675 was approved by the full House under

suspension of the rules by voice vote on November 4, 1997.

H.R. 2675 was received in the Senate and referred to the Committee on Governmental Affairs on November 5, 1997. On June 17,

1998, the Committee ordered the bill reported favorably with an

amendment in the nature of a substitute (S. Rept. 105–337). No

hearings were held. On September 21, 1998, Chairman Thompson

reported the bill to the Senate with an amendment in the nature

of a substitute. The bill, as amended, was passed by the Senate by

unanimous consent. The House suspended the rules and agreed to

the Senate amendments by voice vote on October 8, 1998. The legislation was signed by the President on October 30, 1998.

H.R. 3096—A bill to correct a provision relating to termination of

benefits for convicted persons (Public Law 105–247)

H.R. 3096 makes a technical correction in the Federal Employees’ Compensation Act, the workers’ compensation statute covering

Federal employees. The bill ensures that persons convicted of fraud

in the application or receipt of workers’ compensation benefits lose

their entitlement to receive such benefits.

The legislation was introduced by Rep. Greenwood on January

27, 1998. On March 11, 1998, the Committee on Education and the

27

Workforce approved H.R. 3096 by voice vote and ordered the bill

favorably reported. On March 24, 1998, the bill was passed by the

House by a roll call vote of 408–0.

On March 25, 1998 the bill was received in the Senate and referred to the Committee on Governmental Affairs. On April 20,

1998, the bill was referred to the Subcommittee on International

Security, Proliferation, and Federal Services. On March 8, 1998, a

majority (nine members) of the Subcommittee Members approved

reporting favorably H.R. 3096 to the full Committee. No hearings

were held. On June 17, 1998, the Committee ordered to be reported

H.R. 3096 without amendment, and Chairman Thompson favorably

reported the bill to the Senate on August 25, 1998 (S. Rept. 105– 296). H.R. 3096 passed the Senate by unanimous consent on September 28, 1998, and was signed into law by the President on October 9, 1998.

Postal Naming Bills

S. 916, a bill designating a U.S. Post Office building in Taylorsville, Mississippi as the ‘‘Blaine H. Eaton Post Office Building’’ (Public Law 105–161).

S. 985, a bill designating a U.S. Post Office in Paterson, New

Jersey as the ‘‘Larry Doby Post Office’’ (Public Law 105–162).

H.R. 282, a bill designating a U.S. Post Office building in New

York, New York, as the ‘‘Oscar Garcia Rivera Post Office Building’’ (Public Law 105–87).

H.R. 499, a bill designating the facility of the U.S. Post Office in

San Antonio, Texas as the ‘‘Frank M. Tejeda Post Office Building’’ (Public Law 105–4).

H.R. 681, a bill designating a U.S. Post Office building in Glendale, California as the ‘‘Carlos J. Moorhead Post Office Building’’ (Public Law 105–88).

H.R. 1057, a bill designating a U.S. Post Office building in Indianapolis, Indiana as the ‘‘Andrew Jacobs, Jr. Post Office Building’’ (Public Law 105–90).

H.R. 1058, a bill designating the facility of the U.S. Postal Service in Terre Haute, Indiana as the ‘‘John T. Myers Post Office

Building’’ (Public Law 105–91).

H.R. 1254, (see also S. 595) a bill designating a U.S. Post Office

building in Springfield, Missouri as the ‘‘John N. Griesemer Post

Office Building’’ (Public Law 105–131).

H.R. 2013, a bill designating the facility of the U.S. Postal Service in South Kingstown, Rhode Island, as the ‘‘David B. Champagne Post Office Building.’’

H.R. 2129, a bill designating a U.S. Post Office in Steubenville,

Ohio as the ‘‘Douglas Applegate Post Office’’ (Public Law 105–97).

H.R. 2564, a bill designating a U.S. Post Office in Pottsville,

Pennsylvania as the ‘‘Peter J. McCloskey Postal Facility’’ (Public

Law 105–99).

The following postal naming bills were enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations

Act for Fiscal Year 1999 (Public Law 105–277):

S. 2310, a bill designating a U.S. Post Office in East Northport,

New York as the ‘‘Jerome Anthony Ambro, Jr. Post Office Building.’’

28

S. 2370, a bill designating the facility of the U.S. Postal Service

in Thomasville, Georgia as the ‘‘Lieutenant Henry O. Flipper Station.’’

S. 2404, a bill establishing designations for five U.S. Postal Service buildings in Coconut Grove, Opa Locka, Carol City, and Miami,

Florida.

H.R. 2623, a bill designating a U.S. Post Office in Kiln, Mississippi as the ‘‘Ray J. Favre Post Office Building.’’

H.R. 2766, a bill designating the facility of the U.S. Post Office

in Painesville, Ohio as the ‘‘Karl Bernal Post Office Building.’’

H.R. 2773, a bill designating the facility of the U.S. Postal Service in Chicago, Illinois as the ‘‘Daniel J. Doffyn Post Office Building.’’

H.R. 2798, a bill redesignating the building of the U.S. Postal

Service in Chicago, Illinois as the ‘‘Nancy B. Jefferson Post Office

Building.’’

H.R. 2799, a bill redesignating the building of the U.S. Postal

Service in Chicago, Illinois as the ‘‘Reverend Milton R. Brunson

Post Office Building.’’

H.R. 2836, (see also S. 1640) a bill designating the building of the

U.S. Postal Service in St. Paul, Minnesota as the ‘‘Eugene J.

McCarthy Post Office Building.’’ H.R. 3120, a bill designating the U.S. Post Office in Provo, Utah

as the ‘‘Howard C. Nielson Post Office Building.’’

H.R. 3630, a bill redesignating the facility of the U.S. Postal

Service in Albuquerque, New Mexico as the ‘‘Steven Schiff Post Office.’’

H.R. 3808, a bill designating a U.S. Post Office in Plymouth,

Michigan as the ‘‘Carl D. Pursell Post Office.’’

H.R. 3810, a bill designating a U.S. Post Office in Garwood, New

Jersey as the ‘‘James T. Leonard, Sr. Post Office.’’

H.R. 3939, a bill designating a U.S. Postal Service building in

Philadelphia, Pennsylvania as the ‘‘Edgar C. Campbell, Sr. Post Office Building.’’

H.R. 3999, a bill designating a U.S. Postal Service building in

Philadelphia, Pennsylvania as the David P. Richardson, Jr., Post

Office Building.’’

H.R. 4516, a bill designating a U.S. Postal building in Oxon Hill,

Maryland as the ‘‘Jacob Joseph Chestnut Post Office Building.’’

MEASURE FAVORABLY REPORTED BY COMMITTEE AND PASSED BY

THE SENATE

S. 1642—Federal Financial Assistance Management Improvement

Act of 1998

This bill improves the effectiveness and performance of Federal

financial assistance programs, simplifies Federal financial assistance application and reporting requirements, and improves the delivery of services to the public.

On February 12, 1998, S. 1642 was introduced by Senator Glenn

along with Chairman Thompson and Senators Levin, Lieberman,

and Akaka. While still in draft form, the legislation was endorsed

by the National Governors’ Association, the National Association of

Counties, the National Conference of State Legislatures, the National League of Cities, and the Council of State Governments.

29

Governor George Voinovich (R–OH) and Governor Ben Nelson (D–

NE), representing the National Governors’ Association, testified in

favor of the legislation during the Committee’s hearing on regulatory reform on February 24, 1998. (S. Hrg. 105–486) The Committee ordered S. 1642 reported favorably without amendment on

April 1, 1998. A written report was filed on May 22, 1998 (S. Rept.

105–194). On October 12, 1998, the bill passed the Senate with an

amendment by unanimous consent.

SELECTED MEASURES CONSIDERED BY COMMITTEE

S. 207—Corporate Subsidy Reform Commission Act of 1997

The purpose of S. 207 is to review, reform, and terminate unnecessary and inequitable Federal subsidies. The bill creates a commission intended to fairly and independently review corporate subsidies and make recommendations to the President and the Congress for the retention, reform or termination of such subsidies.

On January 28, 1997, S. 207 was introduced in the Senate by

Senator McCain for himself, Chairman Thompson, and Senators

Kerry, Feingold, Kennedy, Coats, Glenn, Lieberman, and Brownback. On February 13, 1997, the Committee held a hearing on S.

207. (S. Hrg. 105–209) On May 22, 1997, the Committee reported

the bill favorably with amendments. The bill was then reported favorably to the Senate by Chairman Thompson with amendments

and an amendment to the title (S. Rept. 105–107).

S. 261—Biennial Budgeting and Appropriations Act

S. 261 provides for a biennial budget and appropriations process

and to enhance oversight and the performance of the Federal Government.

S. 261 was introduced in the Senate on February 4, 1997, by

Senator Domenici and 24 other Senators, including Chairman

Thompson and Senators Ford, Snowe, Thomas, Roth, Moynihan,

Nickles, McCain, and Collins. On April 23, 1997, the Committee

held a hearing on the bill. (S. Hrg. 105–138) On May 22, 1997, the

Committee ordered S. 261 to be reported favorably with an amendment in the nature of a substitute. On September 4, 1997, Chairman Thompson reported to the Senate S. 261 with an amendment

in the nature of a substitute (S. Rept. 105–72).

S. 389—Mandates Information Act of 1997

S. 389 amends the Congressional Budget Act of 1974 to require

the Director of the Congressional Budget Office (CBO), in preparing estimates of the direct costs of all Federal private sector

mandates, to estimate also the indirect impact of such mandates on

consumers, workers, and small businesses, including any disproportionate impact in particular regions or industries. It also subjects

to a point of order any legislation for which the CBO Director is

unable to determine the economic impact of a Federal mandate.

Senator Abraham introduced S. 389 on March 3, 1997. The Committee held hearings on June 3, 1998 (S. Hrg. 105–664) and, on

July 15, 1998, ordered the bill to be reported favorably with

amendments. On September 2, 1998, a written report, with minority views, was filed (S. Rept. 105–299).

30

S. 712—Government Secrecy Act of 1997

In addition to providing for the first time a statutory basis for

the national security information classification and declassification

system, S. 712 requires agencies to balance the national security

interests of the United States with the public interest in disclosure

of information prior to classifying or declassifying information.

Senator Moynihan and Senator Helms introduced S. 712 on May

7, 1997, the same day the Committee held a hearing on the recommendations of the Commission on Protecting and Reducing Government Secrecy, on which the legislation was based. (S. Hrg. 105– 84) The Committee held a hearing on S. 712 on March 25, 1998 (S.

Hrg. 105–525). On June 17, 1998, the Committee considered the

legislation at a business meeting, approving by unanimous consent

an amendment in the nature of a substitute and favorably reporting the bill, as amended, by unanimous consent. The Committee’s

report was filed on July 22, 1998 (S. Rept. 105–258). Thereafter,

negotiations between the bill’s sponsors, the Committee, and the

Administration continued.

S. 981—Regulatory Improvement Act of 1998

The bill requires agencies to conduct a regulatory analysis before

issuing a major rule. The regulatory analysis includes: (1) a costbenefit analysis comparing the costs and benefits of regulatory

alternatives; (2) a risk assessment, if the rule addressed an environmental, health or safety risk; and (3) an analysis of any substitution risks resulting from the rule. The regulatory analysis is

subject to independent peer review. S. 981 also requires a study

using comparative risk analysis to compare various environmental,

health and safety risks and to inform agency planning. Finally, the

bill establishes a statutory requirement for the Office of Information and Regulatory Affairs in OMB to systematically review agencies’ regulatory proposals and to implement the legislation.

S. 981 was introduced on June 27, 1997 by Senator Levin for

himself, Chairman Thompson and Senators Glenn, Abraham, Robb,

Roth, Rockefeller, and Stevens. The Committee held hearings on

the bill on September 12, 1997, (S. Hrg. 105–335) and February 24,

1998 (S. Hrg. 105–486). On March 10, 1998, the Committee ordered

S. 981 reported favorably with an amendment in the nature of a

substitute by a vote of 8–4. A written report, including Minority

views, was filed by the Committee on May 11, 1998 (S. Rept. 105– 188).

S. 2228—Advisory Committee Termination and Streamlining Act of

1998

S. 2228 enhances the efficient use of government resources supporting Federal advisory committees and promotes congressional

oversight by requiring periodic congressional reauthorization of

statutorily mandated advisory committees. In fiscal year 1997,

there were 963 advisory committees assisting agencies of the Executive Branch. Of these, 422 were mandated by law. In fiscal year

1997, it cost the government over $178 million to operate the 963

advisory committees.

The bill was introduced on June 25, 1998, by six Members of the

Committee, Chairman Thompson, Senators Glenn, Cochran, Levin,

Brownback, and Lieberman. On July 15, 1998, the legislation was

31

ordered reported favorably without amendment. On September 8,

1998, a written report was filed by the Committee (S. Rept. 105–

309).

VIII. PRESIDENTIAL NOMINATIONS

During the 105th Congress, the Committee received a total of 45

Presidential nominations. The following 29 were favorably reported

by the Committee and confirmed by the Senate:

David J. Barram, of California, to be Administrator of General Services. (Hearing held February 25, 1997)

Patricia Broderick, of the District of Columbia, to be an Associate Judge of the Superior Court of the District of Columbia.

(Hearing held September 3, 1998)

Mary Ann Gooden Terrell, of the District of Columbia, to be

an Associate Judge of the Superior Court of the District of Columbia. (Hearing held October 3, 1996)

James H. Atkins, of Arkansas, to be a Member of the Federal Retirement Thrift Investment Board.

Janice R. Lachance, of Virginia, to be Deputy Director of the

Office of Personnel Management. (Hearing held July 28, 1997)

George A. Omas, of Mississippi, to be a Commissioner of the

Postal Rate Commission. (Hearing held July 28, 1997)

Virginia Dale Cabaniss, of Virginia, to be a Member of the

Federal Labor Relations Authority. (Hearing held November 4,

1997)

John MacLaughlin Campbell, of the District of Columbia, to

be Associate Judge of the Superior Court of the District of Columbia. (Hearing held October 30, 1997)

Anita Marie Josey, of the District of Columbia, to be Associate Judge of the Superior Court of the District of Columbia.

(Hearing held October 30, 1997)

Ernesta Ballard, of Alaska, to be a Governor of the U.S.

Postal Service. (Hearing held November 4, 1997)

Susanne T. Marshall, of Virginia, to be a Member of the

Merit Systems Protection Board. (Hearing held November 4,

1997)

Elaine D. Kaplan, of the District of Columbia, to be Special

Counsel in the Office of Special Counsel. (Hearing held March

30, 1998)

Melvin Randolph Wright, of the District of Columbia, to be

Associate Judge of the Superior Court of the District of Columbia. (Hearing held April 1, 1998)

Ruth Y. Goldway, of California, to be a Commissioner of the

Postal Rate Commission. (Hearing held March 30, 1998)

Deidre A. Lee, of Oklahoma, to be Administrator of the Office of Federal Procurement Policy for the Office of Management and Budget. (Hearing held April 22, 1998)

32

Neal E. Kravitz, of the District of Columbia, to be an Associate Judge of the Superior Court of the District of Columbia.

(Hearing held September 3, 1998)

Natalia Combs Greene, of the District of Columbia, to be an

Associate Judge of the Superior Court of the District of Columbia. (Hearing held September 3, 1998)

Jacob J. Lew, of New York, to be Director of the Office of

Management and Budget. (Hearing held June 22, 1998)

Kenneth Prewitt, of New York, to be Director, Bureau of the

Census. (Hearing held September 17, 1998)

Sylvia Mathews, of West Virginia, to be Deputy Director of

the Office of Management and Budget. (Hearing held October

6, 1998)

Robert M. (Mike) Walker, of Tennessee, to be Deputy Director of the Federal Emergency Management Agency. (Hearing

held September 17, 1998)

Gregory H. Friedman, of Maryland, to be Inspector General

of the Department of Energy. Hearing held by Energy and Natural Resources Committee September 18, 1998.

David C. Williams, of Maryland, to be Inspector General, Department of Treasury. (Hearing held July 30, 1998)

John U. Sepulveda, of New York, to be Deputy Director of

the Office of Personnel Management. (Hearing held October 2,

1998)

Joseph Swerdzewski, of Colorado, to be General Counsel of

the Federal Labor Relations Authority. (Hearing held October

2, 1998)

Eljay Bowron, of Michigan, to be Inspector General, Department of the Interior. Hearing held by Energy and Natural Resources Committee October 1, 1998.

Dana Bruce Covington, Sr., of Mississippi, to be a Commissioner of the Postal Rate Commission. (Hearing held October

7, 1998)

Edward Jay Gleiman, of Maryland, to be a Commissioner of

the Postal Rate Commission. (Hearing held October 7, 1998)

David M. Walker, of Georgia, to be Comptroller General of

the United States. (Hearing held October 7, 1998)

There were two nominations in which the Committee was discharged with the concurrence of the Committee and the nominations confirmed by the Senate. They are as follows:

Janice R. Lachance, of Virginia, to be Director of the Office

of Personnel Management. (Hearing held July 28, 1997)

Nikki Tinsley, of Maryland, to be Inspector General for the

Environmental Protection Agency. Hearing held by Environment and Public Works Committee July 15, 1998.

Eight nominations were not acted upon by the Committee because the Board for which they were nominated was slated for termination. The White House, subsequent to the adjournment of the

33

first session of Congress, decided to move forward nevertheless on

the nominations and made recess appointments. They are as follows:

Leo K. Goto, of Colorado, to be a Member of the Board of Directors of the Civil Liberties Public Education Fund.

Don T. Nakanishi, of California, to be a Member of the

Board of Directors of the Civil Liberties Public Education

Fund.

Peggy A. Nagae, of Oregon, to be a Member of the Board of

Directors of the Civil Liberties Public Education Fund.

Dale Minami, of California, to be a Member of the Board of

Directors of the Civil Liberties Public Education Fund.

Yeiichi Kuwayama, of the District of Columbia, to be a Member of the Board of Directors of the Civil Liberties Public Education Fund.

Elsa H. Kudo, of Hawaii, to be a Member of the Board of Directors of the Civil Liberties Public Education Fund.

Robert F. Drinan, of Massachusetts, to be a Member of the

Board of Directors of the Civil Liberties Public Education

Fund.

Susan Hayase, of California, to be a Member of the Board of

Directors of the Civil Liberties Public Education Fund.

Another nomination was not acted upon by the Senate and was

recessed appointed, as follows:

James B. King, of Massachusetts, to be Director of the Office

of Personnel Management (Mr. King was nominated for a second term as Director of OPM on March 6, 1997, two weeks before the Senate’s spring recess. His original term of 4 years

was to expire on April 2, 1997. Senator Cochran scheduled a

hearing on this nomination for April 7, 1997, the Tuesday immediately following the recess. Despite the scheduling of this

nomination hearing and the Committee’s request to the White

House that it follow the regular confirmation process, the

President gave Mr. King a recess appointment on April 6,

1997. At the hearing the next day (April 7, 1997), Senator

Cochran expressed Chairman Thompson’s view that the Committee would take no further action on the nomination for the

foreseeable future).

One nomination was favorably reported by the Committee, not

confirmed by the Senate and recess appointed with the concurrence

of the Committee. It is as follows:

G. Edward DeSeve, of Pennsylvania, to be Deputy Director

for Management of the Office of Management and Budget.

(Hearing held April 22, 1998).

Three nominations failed confirmation under paragraph 6 of rule

XXXI of the Standing Rules of the Senate, as follows:

Denis J. Hauptly, of Minnesota, to be Chairman of the Special Panel on Appeals.

34

Emilio W. Cividanes, of the District of Columbia, to be an

Associate Judge of the District of Columbia Court of Appeals.

John F. Walsh, of Connecticut, to be Governor of the U.S.

Postal Service.

One nomination was withdrawn by the White House, as follows:

James Hudson Bailey, of Wisconsin, to be Deputy Director of

the Federal Emergency Management Agency.

35

IX. ACTIVITIES OF THE SUBCOMMITTEES

INTERNATIONAL SECURITY, PROLIFERATION, AND

FEDERAL SERVICES SUBCOMMITTEE

CHAIRMAN: THAD COCHRAN

RANKING MINORITY MEMBER: CARL LEVIN

I. HEARINGS

The Subcommittee on International Security, Proliferation, and

Federal Services held the following hearings during the 105th Congress:

The Future of Nuclear Deterrence (February 12, 1997)

The Subcommittee explored the future role of nuclear weapons in

America’s national security strategy.

Witnesses: Hon. Walter B. Slocombe, Under Secretary of Defense

for Policy, DOD; Gen. Andrew J. Goodpaster, USA (Ret.), Co-Chair,

The Atlantic Council of the United States; and Hon. Richard Perle,

Resident Fellow, American Enterprise Institute.

National Missile Defense and Prospects for U.S.-Russian ABM

Treaty Accommodation (March 13, 1997)

The Subcommittee reviewed a new study by the National Institute for Public Policy regarding the potential for U.S.-Russian cooperation on missile defense and the ABM treaty.

Witnesses: Ambassador Max Kampelman, Vice-Chairman, United

States Institute of Peace; Dr. Keith Payne, President, National Institute for Public Policy; and Dr. Andrei Kortunov, President, Moscow Public Science Foundation.

Proliferation: Chinese Case Studies (April 10, 1997)

The Subcommittee examined cases of Chinese weapons proliferation, including weapons of mass destruction components and technologies, missile delivery systems, advanced conventional munitions, and related technologies.

Witnesses: Robert Einhorn, Deputy Assistant Secretary for Nonproliferation, Bureau of Political-Military Affairs, Department of

State; Ambassador James Lilley, Director, Institute for Global Chinese Affairs of the University of Maryland; and Gary Milhollin, Director, Wisconsin Project on Nuclear Arms Control.

Proliferation: Chinese Case Studies, Part II (April 17, 1997)

The Subcommittee held a closed hearing as a follow-up to its

April 10, 1997 hearing on Chinese proliferation.

Witness: Dr. Gordon Oehler, Special Assistant to the Director of

Central Intelligence for Nonproliferation, and Director, DCI’s Nonproliferation Center.

National Missile Defense and the ABM Treaty (May 1, 1997)

The Subcommittee examined the relationship between the Administration’s proposed ‘‘3+3’’ National Missile Defense plan and

the ABM Treaty.

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Witness: John D. Holum, Director, Arms Control and Disarmament Agency.

Proliferation: Russian Case Studies (June 5, 1997)

The Subcommittee explored cases of Russian weapons proliferation, focusing on Russia’s exports of weapons of mass destruction

components and technologies and missile delivery systems to various countries, including Iran, Iraq, and India.

Witnesses: Robert Einhorn, Deputy Assistant Secretary for Nonproliferation, Bureau of Political-Military Affairs, Department of

State; Dr. William C. Potter, Director, Center for Nonproliferation

Studies, Monterey Institute for International Studies; and Dr.

Richard H. Speier, Independent Consultant.

Proliferation and U.S. Export Controls (June 11, 1997)

The Subcommittee examined the role of the United States in assisting such countries as Russia and China to develop weapons of

mass destruction and their delivery systems through the transfer

of dual-use items, focusing particularly on the administration’s policy of loosening export control restrictions on supercomputers.

Witnesses: William Reinsch, Under Secretary for Export Administration, Department of Commerce; Dr. Mitchell Wallerstein, Deputy Assistant Secretary for Counterproliferation, Department of

Defense; Dr. Stephen Bryen, President, Delta Tech; and Dr. William Schneider, Fellow, Hudson Institute.

The Compliance Review Process and Missile Defense (July 21, 1997)

The Subcommittee examined the process by which the United

States determines whether its missile defense systems comply with

the obligations of international treaties.

Witness: Dr. Kent Stansberry, Deputy Director, Arms Control Implementation and Compliance, Office of the Secretary of Defense

(Acquisition and Technology).

Missile Proliferation in the Information Age (September 22, 1997)

The Subcommittee examined the widespread availability and increasing accessibility of information and materials that support the

development of ballistic missile systems in foreign countries.

Witnesses: Dr. William R. Graham, former Science Advisor to

President Reagan and former Deputy Administrator of NASA; and

Dr. W. Seth Carus, Visiting Fellow, National Defense University.

Written Testimony: General Bernard A. Schriever, U.S. Air Force

(retired), former Commander of Air Force Systems Command.

North Korean Missile Proliferation (October 21, 1997)

The Subcommittee examined the role of North Korea as an international supplier of ballistic missiles and related technologies.

Witnesses: Colonel Joo-hwal Choi, former official of the Ministry

of the People’s Army, North Korea; and Young-hwan Ko, former official of the Ministry of Foreign Affairs, North Korea. Information

provided for the record by Robert Einhorn, Deputy Assistant Secretary for Nonproliferation, Bureau of Political-Military Affairs, Department of State.

37

The Safety and Reliability of the U.S. Nuclear Deterrent (October

27, 1997)

The Subcommittee examined how the administration plans to

maintain the safety and reliability of the nuclear stockpile in the

absence of nuclear testing.

Witnesses: Dr. James R. Schlesinger, former Secretary of Defense, former Secretary of Energy, and former Director of Central

Intelligence; Dr. Vic Reis, Assistant Secretary of Energy for Defense Programs; and Dr. Robert B. Barker, Assistant to the Director, Lawrence Livermore National Laboratory.

The Annual Report of the Postmaster General (November 3, 1997)

The Subcommittee examined the Postal Service’s financial status, proposed postage rate increases, levels of productivity and

quality of customer service.

Witness: Hon. Marvin Runyon, Postmaster General and Chief

Executive Officer of the U.S. Postal Service.

Merit System Protection Act of 1997 (February 26, 1998)

The Subcommittee examined S. 1495.

Witnesses: Lorraine Lewis, General Counsel, OPM; David M.

Cohen, Director Commercial Litigation Branch, Civil Division, Department of Justice; Robert Tobias, National President, National

Treasury Employees Union; and Mark Roth, General Counsel,

American Federation of Government Employees, AFL–CIO.

The Comprehensive Test Ban Treaty and Nuclear Nonproliferation

(March 18, 1998)

The Subcommittee explored the relationship between the Comprehensive Test Ban Treaty and the spread of nuclear weapons.

Witnesses: John Holum, Acting Under Secretary of State and Director, Arms Control and Disarmament Agency; Spurgeon Keeny,

Director, Arms Control Association; and Dr. Kathleen Bailey, Senior Fellow, Lawrence Livermore National Laboratory.

Retirement Coverage Error Correction Act of 1998 (May 13, 1998)

The Subcommittee examined S. 1710.

Witnesses: William E. Flynn, Associate Director for Retirement

and Insurance, U.S. Office of Personnel Management; Hon. Roger

W. Mehle, Executive Director, Federal Retirement Thrift Investment Board; Dallas Salisbury, President, Employee Benefit Research Institute; and Daniel F. Geisler, President, American Foreign Service Association.

The Benefits of Commercial Space Launch for Foreign ICBM and

Satellite Programs (May 21, 1998)

The Subcommittee examined how a foreign country’s satellite

and ICBM programs could benefit from launching U.S. commercial

satellites, and whether the administration’s export control policy is

adequate to prevent technology transfers that endanger America.

Witnesses: Dr. William R. Graham, President, National Security

Research, Inc.; John Pike, Federation of American Scientists; and

Dr. William Schneider, Fellow, Hudson Institute.

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International Postal Services Act of 1998 (June 2, 1998)

The Subcommittee examined S. 2082.

Witnesses: William J. Henderson, Postmaster General, U.S. Postal Service; Einar V. Dyhrkopp, Vice Chairman of the Board, U.S.

Postal Service Board of Governors; Christopher McCormick, Senior

Vice President of Advertising and Direct Marketing, L.L. Bean,

Inc.; Fred Smith, Chairman, FDX Corporation; and James P. Kelly,

Chairman and CEO, United Parcel Service.

The Adequacy of Commerce Department Satellite Export Controls,

Part 1 (June 18, 1998)

The Subcommittee held a hearing to determine whether the current Commerce Department-administered export control system for

commercial satellites is sufficient to prevent technology transfer

harmful to U.S. National Security.

Witnesses: William Reinsch, Under Secretary for Export Administration, Department of Commerce; Jan M. Lodal, Principal Deputy

Under Secretary for Policy, Department of Defense; and John D.

Holum, Acting Under Secretary of State for Arms Control and

International Security Affairs.

The Adequacy of Commerce Department Satellite Export Controls,

Part 2 (July 8, 1998)

The Subcommittee continued its previous hearing to determine

whether the current Commerce Department-administered export

control system for commercial satellites is sufficient to prevent

technology transfer harmful to U.S. National Security.

Witnesses: William Reinsch, Under Secretary for Export Administration, Department of Commerce; John D. Holum, Acting Under

Secretary of State for Arms Control and International Security Affairs; and Frank W. Miller, Principal Deputy Assistant Secretary,

Department of Defense.

An Industry View of the Satellite Export Licensing Process (July 29,

1998)

The Subcommittee examined the aerospace industry’s perspective

on the Commerce Department-administered export control system

for commercial satellites.

Witnesses: C. Michael Armstrong, Chairman and CEO, AT&T

and Chairman, President’s Export Council; and Steven D. Dorfman, Vice Chairman, Hughes Electronics Corporation.

Use of Mass Mail to Defraud Consumers (September 1, 1998)

The Subcommittee examined the use of mass mail to defraud

consumers, to include sweepstakes and government look-a-like

mail.

Witnesses: Hon. Ben Nighthorse Campbell, U.S. Senator; Ken

Hunter, Chief Inspector, U.S. Postal Inspection Service; Hon. Robert A. Butterworth, Attorney General, State of Florida; Stanley

Pruss, Assistant Attorney General, State of Michigan; Richard A.

Barton, Senior Vice President, Direct Marketing Association Inc.;

and William E. Arnold, Ph.D., Director of Gerontology, Arizona

State University.

39

GAO Report on High Performance Computers (September 16, 1998)

The Subcommittee examined a report prepared by the General

Accounting Office on the administration’s rationale for liberalizing

export controls on high performance computers.

Witnesses: Harold J. Johnson, Associate Director, International

Relations and Trade Issues, General Accounting Office; and William Reinsch, Under Secretary for Export Administration, Department of Commerce.

Annual Report of the Postmaster General (October 1, 1998)

The Subcommittee held its annual postal oversight hearing to

give Hon. William J. Henderson, the Postmaster General, the opportunity to report publicly on the state of the U.S. Postal Service.

Witness: Hon. William J. Henderson, Postmaster General, U.S.

Postal Service.

II. LEGISLATION

1. The following is a list of selected measures which were considered by the Subcommittee on International Security, Proliferation,

and Federal Services and became public laws:

S. 916, a bill designating a U.S. Post Office building in Taylorsville, Mississippi as the ‘‘Blaine H. Eaton Post Office Building’’

(Public Law 105–161).

S. 985, a bill designating a U.S. Post Office in Paterson, New

Jersey as the ‘‘Larry Doby Post Office’’ (Public Law 105–162).

H.R. 282, a bill designating a U.S. Post Office building in New

York, New York, as the ‘‘Oscar Garcia Rivera Post Office Building’’

(Public Law 105–87).

H.R. 499, a bill designating the facility of the U.S. Post Office in

San Antonio, Texas as the ‘‘Frank M. Tejeda Post Office Building’’

(Public Law 105–4).

H.R. 681, a bill designating a U.S. Post Office building in Glendale, California as the ‘‘Carlos J. Moorhead Post Office Building’’

(Public Law 105–88).

H.R. 1057, a bill designating a U.S. Post Office building in Indianapolis, Indiana as the ‘‘Andrew Jacobs, Jr. Post Office Building’’

(Public Law 105–90).

H.R. 1058, a bill designating the facility of the U.S. Postal Service in Terre Haute, Indiana as the ‘‘John T. Myers Post Office

Building’’ (Public Law 105–91).

H.R. 1254, (see also S. 595) a bill designating a U.S. Post Office

building in Springfield, Missouri as the ‘‘John N. Griesemer Post

Office Building’’ (Public Law 105–131).

H.R. 1316, to amend chapter 87 of Title 5, United States Code,

with respect to the order of precedence to be applied in the payment of life insurance benefits (Public Law 105–205).

H.R. 1836, the Federal Employees Health Care Protection Act of

1998, to amend chapter 89 of title 5, United States Code, to improve the administration of the Federal Employees Health Benefits

Program (Public Law 105–266).

H.R. 2013, a bill designating the facility of the U.S. Postal Service in South Kingstown, Rhode Island, as the ‘‘David B. Champagne Post Office Building’’ (Public Law 105–70).

40

H.R. 2129, a bill designating a U.S. Post Office in Steubenville,

Ohio as the ‘‘Douglas Applegate Post Office’’ (Public Law 105–97).

H.R. 2564, a bill designating a U.S. Post Office in Pottsville,

Pennsylvania as the ‘‘Peter J. McCloskey Postal Facility’’ (Public

Law 105–99).

H.R. 2675, the Federal Employees Life Insurance Improvement

Act, a bill to improve the structure and administration of the Federal Employees Group Life Insurance Program (Public Law 105–

311).

H.R. 3096, a bill to correct a provision relating to termination of

benefits for convicted persons under the Federal Employees’ Compensation Act, the workers’ compensation statute covering Federal

employees (Public Law 105–247).

The following bills were enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal

Year 1999 (Public Law 105–277):

S. 2310, a bill designating a U.S. Post Office in East Northport,

New York as the ‘‘Jerome Anthony Ambro, Jr. Post Office Building.’’

S. 2370, a bill designating the facility of the U.S. Postal Service

in Thomasville, Georgia as the ‘‘Lieutenant Henry O. Flipper Station.’’ S. 2404, a bill establishing designations for five U.S. Postal Service buildings in Coconut Grove, Opa Locka, Carol City, and Miami,

Florida.

H.R. 2623, a bill designating a U.S. Post Office in Kiln, Mississippi as the ‘‘Ray J. Favre Post Office Building.’’

H.R. 2766, a bill designating the facility of the U.S. Postal Service in Chicago, Illinois as the ‘‘Karl Bernal Post Office Building.’’ H.R. 2773, a bill designating the facility of the U.S. Postal Service in Chicago, Illinois as the ‘‘Daniel J. Doffyn Post Office Building.’’

H.R. 2798, a bill redesignating a U.S. Postal Service building in

Chicago, Illinois as the ‘‘Nancy B. Jefferson Post Office Building.’’

H.R. 2799, a bill redesignating a U.S. Postal Service building as

the ‘‘Reverend Milton R. Brunson Post Office Building.’’

H.R. 2836, (see also S. 1640) a bill designating a U.S. Postal

Service building in St. Paul, Minnesota as the ‘‘Eugene J. McCarthy Post Office Building.’’

H.R. 3120, a bill designating a U.S. Post Office in Provo, Utah

as the ‘‘Howard C. Nielson Post Office Building.’’

H.R. 3630, a bill redesignating a facility of the U.S. Postal Service in Albuquerque, New Mexico as the ‘‘Steven Schiff Post Office

Building.’’

H.R. 3808, a bill designating a U.S. Post Office in Plymouth,

Michigan as the ‘‘Carl D. Pursell Post Office Building.’’

H.R. 3810, a bill designating a U.S. Post Office in Garwood, New

Jersey as the ‘‘James T. Leonard, Sr. Post Office Building.’’

H.R. 3939, a bill designating a U.S. Postal Service building in

Philadelphia, Pennsylvania as the ‘‘Edgar C. Campbell, Sr. Post Office Building.’’

H.R. 3999, a bill designating a U.S. Postal Service building in

Philadelphia, Pennsylvania as the ‘‘David P. Richardson, Jr., Post

Office Building.’’

41

H.R. 4516, a bill designating a U.S. Postal Facility in Oxon Hill,

Maryland as the ‘‘Jacob Joseph Chestnut Post Office Building.’’

2. The following bill was reported favorably by polling letter from

the Subcommittee on International Security, Proliferation, and

Federal Services but did not pass the Senate:

S. 336, a bill to convert certain excepted service positions in the

U.S. Fire Administration to competitive service positions. On November 5, 1997, the full Committee ordered the bill reported favorably without amendment, and on November 6, 1997, the bill was

reported without written report.

3. The investigation and oversight hearings of the Subcommittee

on International Security, Proliferation, and Federal Services regarding international security and proliferation issues contributed

greatly to the development of the following legislative initiatives:

Amendment relating to high performance computer export regulations to the Fiscal Years 1998 and 1999 National Defense Authorization Act (Public Law 105–85)

This amendment was offered on June 19, 1997, by Senator Cochran for himself and Senators Durbin, Abraham, Hutchinson, Thurmond, Lugar, Smith (Bob), Kyl, Coverdell, Sessions, Inhofe, and

Collins. It strengthened high performance computer export regulations by requiring exporters to notify the Department of Commerce

of any planned sales of computers with performance levels greater

than 2,000 MTOPS to tier three countries and requiring the Department of Commerce to perform post-shipment verification on all

high performance computer exports with performance levels greater than 2,000 MTOPS to tier three countries. The amendment was

agreed to by the Senate by voice vote and included in the final conference report on the bill.

S. 1873—The American Missile Protection Act of 1998

This bill, introduced by Senator Cochran and 38 other Senators,

including Chairman Thompson and Senators Inouye, Hollings,

Lott, Thurmond, Stevens, Helms, Warner, Nickles, Domenici,

Craig, Inhofe, Murkowski, Shelby, Bond, Frist, Abraham, McCain,

and Snowe, on March 27, 1998, would make it ‘‘the policy of the

United States to deploy as soon as technologically possible an effective National Missile Defense system capable of defending the territory of the United States against limited ballistic missile attack

(whether accidental, unauthorized, or deliberate).’’ It was referred

to the Senate Committee on Armed Services and favorably reported

to the Senate on April 24, 1998. A motion to proceed to consideration of the measure was made on May 11, 1998, and this motion

was filibustered. On May 13, 1998, by a Yea-Nay Vote of 59–41,

cloture on the motion to proceed was not invoked in the Senate. A

second motion to proceed to consideration of the bill was made on

September 3, 1998, and again, by a Yea-Nay Vote of 59–41, cloture

on the motion to proceed was not invoked in the Senate.

Legislation relating to satellite export regulations

As part of the Fiscal Year 1999 National Defense Authorization

Act, export licensing for commercial communications satellites was

42

moved from the Commerce Department to the State Department,

thus reversing the Clinton Administration’s 1996 decision.

III. REPORT, COMMITTEE PRINT, AND GAO REPORTS

1. The Proliferation Primer. In January 1998, the Majority Members of the Subcommittee issued a paper which described an investigation of the actions of the principal suppliers of technology and

components for weapons of mass destruction, missile delivery systems, and key enabling technologies such as supercomputers. The

paper also examined the increasing availability of ballistic missile

technology and expertise in the information age, as well as the

Clinton Administration’s response to the proliferation threat. The

Primer was based on 11 hearings held by the Subcommittee in

1997.

2. Compilation of Hearings on National Security Issues. (S. Prt.

105–50)

3. The following reports were issued by the General Accounting

Office (GAO) at the request of the Chairman and/or Ranking Member of the Subcommittee on International Security, Proliferation,

and Federal Services:

Export Controls: Information on the Decision to Revise High Performance Computer Controls, GAO—NSIAD–98–196 (September

1998)

Export Controls: Changes in Controls Applied to the Export of

High Performance Computers, GAO—T–NSIAD–98–250 (September 1998)

Proposed Legislation: Issues Related to Honesty in Sweepstakes

Act of 1998 (S. 2141), GAO—T–GGD–98–198 (September 1998)

Comparison of Foreign Lobbying Registrations, GAO—GGD–98–

129R (May 1998)

Comparison of Lobbyists’ Registrations, GAO—GGD–98–105R

(April 1998)

Information on States’ Lobbying Disclosure Requirements,

GAO—GGD–97–95R (May 1997)

43

OVERSIGHT OF GOVERNMENT MANAGEMENT,

RESTRUCTURING, AND THE DISTRICT OF COLUMBIA

SUBCOMMITTEE

CHAIRMAN: SAM BROWNBACK

RANKING MINORITY MEMBER: JOSEPH I. LIEBERMAN

I. HEARINGS

The Subcommittee on Oversight of Government Management,

Restructuring, and the District of Columbia held the following

hearings during the 105th Congress:

1. Federal Tax Policy for the District of Columbia (March 6, 1997)

This hearing marked the first of many that the Subcommittee

held to examine a comprehensive package of incentive-based policies such as enterprise zones, tax policy, improved public safety,

education and welfare reform. This particular hearing focused on

changing Federal tax policies to provide incentives for certain economic activities in the District. The goal of the hearing was to

highlight different Federal tax policy ideas that would empower the

District of Columbia Government and revive the local economy.

Witnesses: Hon. Eleanor Holmes Norton, U.S. Representative

from the District of Columbia; Marion Barry, Mayor of the District

of Columbia; Jack Kemp, Co-Director, Empower America; Daniel J.

Mitchell, McKenna Senior Fellow in Political Economy, The Heritage Foundation; and William A. Niskanen, Chairman, Cato Institute.

2. Overview of Management Issues for the Department of Commerce

(March 10, 1997)

This hearing was the first in a series regarding management

issues in the Department of Commerce. The hearing focussed on

concerns raised by the Inspector General’s Office, Congress, the

General Accounting Office, and the National Performance Review

with regard to the management of the Department of Commerce.

Of particular concern were questions raised in regard to the National Oceanic and Atmospheric Administration (NOAA) corps and

the NOAA fleet. Even after the Department of Commerce had received directives regarding the fleet from a number of different entities, little or no progress had been demonstrated in solving the

areas of concern.

Witnesses: Frank DeGeorge, Inspector General, U.S. Department

of Commerce; and Raymond G. Kammer, Jr., Acting Chief Financial Officer and Assistant Secretary for Administration, U.S. Department of Commerce.

3. Successes in Urban Problem-Solving, Mayoral Perspectives

(March 11, 1997)

This was a joint hearing held by the Subcommittee in conjunction with the House Subcommittee on the District of Columbia of

the Committee on Government Reform and Oversight, the House

Subcommittee on the District of Columbia of the Committee on Appropriations, and the Senate Subcommittee on the District of CoVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
44

lumbia of the Committee on Appropriations. The purpose of the

hearing was to explore how other cities have successfully dealt

with a variety of problems similar to those faced by the District of

Columbia. Mayors from around the country testified as to how

their cities addressed the challenges of economic development, educational quality, infrastructure improvement, public safety and

general governmental efficiency.

Witnesses: Patrick McCrory, Mayor, Charlotte, NC; Susan

Golding, Mayor, San Diego, CA; Stephen Goldsmith, Mayor, Indianapolis, IN; Knox H. White, Mayor, Greenville, SC; and Edward

G. Rendell, Mayor, Philadelphia, PA.

4. White House Proposal for the District of Columbia (March 13,

1997)

This was a joint informational hearing held with the House Subcommittee on the District of Columbia of the Committee on Government Reform and Oversight. The hearing reviewed the President’s

National Capital Revitalization and Self-Government Improvement

Plan which outlined the terms for the transfer of many city functions to the Federal Government. The Subcommittees heard the

testimony of the Mayor, financial control board members, D.C.

Council members and city administrators as to how the plan would

affect the District of Columbia. On August 5, 1997, the National

Capital Revitalization and Self-Government Improvement Act of

1997 was enacted as part of the Balanced Budget Act of 1997 (Public Law 105–33).

Witnesses: Marion Barry, Jr., Mayor, Washington, D.C.; Charlene

Drew Jarvis, Chairwoman, Pro Tempore, Washington, D.C. City

Council; Andrew Brimmer, Chairman, District of Columbia Financial Responsibility Management and Assistance Authority; and Anthony Williams, Chief Financial Officer, Washington, D.C.

5. The Role of the Department of Commerce in the U.S. Trade Policy, Promotion and Regulation, and Opportunities for Reform

and Consolidation (March 20, 1997)

This hearing was the second in a series on the Department of

Commerce. The first hearing focused on management issues and

problems that existed at the Department of Commerce; this hearing focused on the role of the Department of Commerce in international trade policy and promotion. The hearing was comprised of

three panels, the first of which discussed a proposed plan for consolidating the trade promotion and the trade policy making within

the Federal Government. The second panel addressed the overall

trade policy and promotion structure within the Federal Government and the third panel represented the Department of Commerce with respect to international trade.

Witnesses: Hon. John L. Mica, Representative in Congress from

the State of Florida; Hon. Rick White, Representative in Congress

from the State of Washington; Professor William H. Lash III, Director of the Law and Economics Center, and Associate Dean,

George Mason University School of Law; Edward L. Hudgins, Director of Regulatory Studies, Cato Institute; Edward J. Black,

President, Computer and Communications Industry Association;

and Timothy J. Hauser, Deputy Under Secretary, International

Trade Administration, Department of Commerce.

45

6. Role of the Department of Commerce in Federal Statistical Gathering, Analysis and Dissemination, and Opportunities for Reform and Consolidation (April 9, 1997)

This hearing was the third in a series on the Department of

Commerce. The focus of this hearing was the statistical gathering

functions of the Federal Government and legislation to create a

commission to study the consolidation of these agencies (S. 1404,

‘‘The Federal Statistical Systems Act of 1998’’). The Subcommittee

looked at the lack of efficiency of statistical gathering in the United

States where 89 different government organizations are involved in

the collection of information at a cost of $3 billion annually. The

goal of the hearing was to address possibilities for reform and consolidation in the Federal Government’s gathering, analysis, and

dissemination of statistical information.

Witnesses: Hon. Daniel Patrick Moynihan, U.S. Senator from the

State of New York; Hon. Stephen Horn, Representative in Congress

from the State of California; Vincent P. Barabba, General Motors

Corporate Strategy and Knowledge Department; Janet Norwood,

Senior Fellow, The Urban Institute; Maurine A. Haver, Chair, Statistics Committee, National Association of Business Economists;

Leonard Nakamura, Economic Adviser, Federal Reserve Bank of

Philadelphia; and L. Nye Stevens, Director, Federal Management

and Workforce Issues, General Government Division, U.S. General

Accounting Office.

7. Government and Television: Improving Programming Without

Censorship (April 16 and May 8, 1997)

This hearing addressed the issue of television violence and the

role of the Federal Government. The Subcommittee examined what

the Federal Government could do about the negative impact that

violent television has on children, without engaging in censorship

or imposing government standards on the broadcast industry. The

goal of the hearing was to discuss ways that the Federal Government could have a positive influence on the television debate, for

example, by removing perceived barriers, either real or artificial, to

the creation of voluntary programming guidelines by the industry.

Witnesses: (April 16, 1997) Hon. Mike DeWine, U.S. Senator from

the State of Ohio; Dale Kunkel, Ph.D., Associate Professor, Department of Communications, University of California-Santa Barbara;

Jeffery I. Cole, Director, UCLA Center for Communication Policy;

Helen K. Liebowitz, Member, National PTA Board of Directors;

Witney G. Vanderwerff, Ph.D., Executive Director, National Alliance for Non-Violent Programming; Michael Brody, M.D., American

Academy of Child and Adolescent Psychiatry Media Committee;

and David Walsh, Ph.D., Executive Director, National Institute on

Media and the Family.

Witnesses: (May 8, 1997) L. Brent Bozell, III, Chairman, Media

Research Center; David Murray, Director of Research, Statistical

Assessment Service; Jane Brown, Professor, University of North

Carolina-Chapel Hill School of Journalism and Mass Communication; Laurie Lee Humphries, M.D., Professor, Child and Adolescent

Psychiatry Department, University of Kentucky College of Medicine; Mary Anne Layden, Director of Education, University of

Pennsylvania, Center for Cognitive Therapy; Sarah S. Brown, Director, National Campaign to Prevent Teen Pregnancy; and Elayne

46

Bennett, President and Founder, Best Friends Foundation, accompanied by Sue Lei, School Without Walls, Whitney Brown, and

Nefertina Frances, from Amidon.

8. Improvement Opportunities for the Public Schools in the District

of Columbia (April 17, 1997)

This hearing focussed on public education in the District of Columbia—solutions for poor performance, how to increase school

safety and student well being, stopping material shortages in the

schools, and alleviating the school district’s crumbling infrastructure. The hearing also focused on ways to help students improve

their below-average test scores on the Comprehensive Basic Skill

Test.

Witnesses: General Julius W. Becton, Jr., Chief Executive Officer,

District of Columbia Public Schools; Dr. Bruce MacLaury, Chairman, Emergency Transition Education Board of Trustees; Hon.

Lamar Alexander, Former U.S. Secretary of Education; Hon. Ed

Koch, Former Mayor of New York City; Dr. Jay P. Greene, University of Houston, Author of ‘‘The Effectiveness of School Choice in

Milwaukee: A Secondary Analysis of Data from the Program’s

Evaluation’’; Jeanne Allen, President, The Center for Education Reform; Kathleen Sylvester, Vice President of Domestic Policy, Progressive Policy Institute; Kevin Chavous, D.C. Councilmember,

Chairman, Committee on Education, Libraries and Recreation; and

Mark Roberts, Parent of Students in District of Columbia Public

Schools.

9. Opportunities for Management Reforms at the National Oceanic

and Atmospheric Administration (April 24, 1997)

This hearing was the fourth in a series on the Department of

Commerce. The purpose for the hearing was to look at the National

Oceanic and Atmospheric Administration, NOAA. More specifically

the hearing addressed issues concerning the Federal surveying and

mapping, the NOAA fleet, and the National Weather Service. The

goal of the hearing was to determine whether or not NOAA performs functions that could be more efficiently handled by the private sector or consolidated elsewhere within the government. Other

issues that were raised pertained to the competition between more

than 100 private companies and the National Weather Service, as

well as issues regarding the aging NOAA fleet.

Witnesses: Diana Josephson, Deputy Under Secretary for Oceans

and Atmosphere, National Oceanic and Atmospheric Administration, U.S. Department of Commerce, accompanied by Admiral William Stubblefield, Director, NOAA Corps, and John Carey, Associate Deputy Under Secretary for Oceans and Atmosphere; Brian

Logan, President, Photo Science, Inc., accompanied by John

Palatiello, Executive Director, Management Association for Private

Photogrammetric Surveyors; Kenneth S. Johnson, Chairman, University-National Oceanographic Laboratory System; and Joel

Myers, President, AccuWeather, Inc.; Joel Willemssen, Director, Information Resources Management, Accounting and Information

Management Division, U.S. General Accounting Office, accompanied by Keith Rhodes, Technical Director, Office of Chief Scientist, U.S. General Accounting Office.

47

10. Fighting Crime and Violence in the District of Columbia: Capital Punishment as a Deterrent (April 30, 1997)

This oversight hearing examined legislation introduced by Senator Kay Bailey Hutchison, S. 294, entitled ‘‘Officer Brian Gibson

District of Columbia Police Protection Act.’’ The proposed bill would

protect District of Columbia police officers with the same death

penalty laws that apply to Federal law enforcement officers. The

Subcommittee also looked at other new mechanisms to reduce the

District’s crime rate—particularly crime towards police officers—including an increase in the penalties for committing crime. The bill

was reported out of Committee favorably and without amendments

on November 5, 1997.

Witnesses: Hon. Kay Bailey Hutchison, U.S. Senator from the

State of Texas; Tracie Gibson, widow of District of Columbia Officer

Brian Gibson; Stephen D. Harlan, Vice Chairman, District of Columbia Financial Responsibility and Management Assistance Authority; Gary Mather, Senior Vice President, Booz-Allen and Hamilton, Inc., accompanied by James Stewart, Principal, Booz-Allen

and Hamilton, Inc.; Larry Soulsby, Chief of Police, District of Columbia Police Department; Hon. Eugene N. Hamilton, Chief Judge,

Superior Court of the District of Columbia; Robert Moffit, Deputy

Director for Domestic Policy Studies, The Heritage Foundation; C.

Stephen Wallis, Washington, D.C. Area School Administrator;

Carol Schwartz, District of Columbia City Council Member; and

Rev. H. Beecher Hicks, Jr., Senior Minister, Metropolitan Baptist

Church.

11. The President’s Proposal and Alternative Approaches for the

District of Columbia (May 13, 1997)

The hearing focused on President Clinton’s National Capital Revitalization and Self-Government Improvement Plan, as well as the

city’s reaction to it. The administration’s plan recommended reordering the relationship between the District of Columbia and the

Federal Government with a goal of putting the city on firmer financial ground and returning home rule. The plan provided for the

Federal Government’s assumption of over $4 billion of the District

of Columbia’s operating costs over 5 years, saving the city nearly $700 million over the same period. The plan also offered over $1

billion for economic development.

Witnesses: Hon. G. Edward DeSeve, Controller, Office of Financial Management, U.S. Office of Management and Budget; Marion

Barry, Mayor, District of Columbia; and Linda W. Cropp, Acting

Chair, District of Columbia City Council.

12. Department of Commerce’s Technology Grant Programs (June 3,

1997)

This hearing was the fifth in a series on the Department of Commerce, it looked at technology grants administered by the Department, primarily the Advanced Technology Program (ATP). This

program provides hundreds of millions of taxpayer dollars each

year to industrial giants such as GE and IBM. While some people

viewed these subsidies as critical to American competitiveness in

the global marketplace, others saw them as wasteful corporate subsidies. The cost of the ATP program was $10 million in 1990 and

had grown to $225 million by 1997.

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Witnesses: Mary Lowe Good, Under Secretary for Technology,

Technology Administration, U.S. Department of Commerce; Robert

M. White, University Professor, Carnegie Mellon University; Tim

Draper, Managing Director, Draper Fisher Associates; T.J. Rodgers, President and Chief Executive Officer, Cypress Semiconductor

Corporation; Stephen Moore, Director of Fiscal Policy Studied, Cato

Institute; and Dwight D. Carlson, Vice Chairman, Perceptron, Incorporated.

13. S. 314—Freedom from Government Competition Act (June 18,

1997)

This hearing was the first in a series to investigate the opportunities for greater competitive contracting within the Federal Government as well as other privatization projects at the national

level. While most prominent privatization initiatives have focused

on the divestiture of assets and commercial-like enterprises, such

as the Naval Petroleum Reserve and the Uranium Enrichment Corporation, this hearing focused on opportunities at the Federal level

to involve competition contracting in the thousands of routine commercial-type services that the government provides to itself and the

public. Senator Craig Thomas and Representative John Duncan

testified on their bicameral companion legislation that addresses

the issue of Federal Government competition with the private sector for commercial activities.

Witnesses: Hon. Craig Thomas, U.S. Senator from the State of

Wyoming; Hon. John J. Duncan, Jr., Representative in Congress

from the State of Tennessee; John A. Koskinen, Deputy Director,

Office of Management and Budget; Samuel D. Kleinman, Director,

Center for Naval Analysis; Captain Burton Streicher, CEC, U.S.

Navy, Director, Navy Outsourcing Support Office; Charles S. Davis

III, Chamberlain, Davis, Rutan and Valk, formerly the Associate

Administrator for Operations, General Services Administration; L.

Nye Stevens, Director, Federal Management and Workforce Issues,

General Government Division, U.S. General Accounting Office; and

John N. Sturdivant, National President, American Federation of

Government Employees, AFL–CIO.

14. National Drought Policy Act of 1997—S. 222 (September 8,

1997) (unofficial)

In the wake of the past year’s devastating floods the Subcommittee held this hearing to examine S. 222, ‘‘The National

Drought Policy Act of 1997,’’ which calls for the creation of an independent commission to study and make recommendations on the

Federal Government’s response to drought emergencies. Introduced

by Senator Pete Domenici, S. 222’s national advisory commission

would report to the President, the Senate, and the House, and be

chaired by the Secretary of Agriculture or his designee. S. 222 was

reported out of Committee on November 7, 1997 and passed the

Senate on November 10, 1997. On November 12, 1997, the bill was

introduced in the House as H.R. 3035, passed by the House on

June 16, 1998, and passed by the Senate on June 24, 1998. It was

signed into law on July 16, 1998 (Public Law 105–199).

Witnesses: Hon. Richard Rominger, Deputy Secretary, U.S. Department of Agriculture; Hon. Edward T. Schafer, Governor, North

Dakota; Hon. Jennifer Salisbury, Secretary, Department of Energy,

49

Minerals and Natural Resources, New Mexico; John Baker, Commissioner, Texas Natural Resources Conservation Commission;

John Van Sweden, President, New Mexico Farm and Livestock Bureau, American Farm Bureau Federation; and Robert C. Brown,

Executive Vice President, Credit Division, Farm Credit Bank of

Texas.

15. A Progress Report on the Reforms in the D.C. Public Schools

(September 8, 1997)

This hearing was the second which focused on the District of Columbia public schools. Held right before the opening of the 1997–

98 school year, the purpose of the hearing was to discuss the

progress of educational reform in the school system and examine

DCPS management. Representative Richard Armey testified on

H.R. 1797, school choice legislation for the District of Columbia.

Rep. Armey’s bill would provide Opportunity Scholarships for approximately 2,000 low-income children who attend the District’s

public schools. The same legislation also was introduced in the Senate by Senators Coats, Lieberman, and Brownback.

Witnesses: Hon. Richard K. Armey, Majority Leader, U.S. House

of Representatives; Jeanne Allen, President, The Center for Education Reform; Nina Shokraii, Education Policy Analyst, Domestic

Policy Studies, The Heritage Foundation; Kent B. Amos, President,

Urban Family Institute; Bruce K. MacLaury, Chairman, Emergency Transition Education Board of Trustees, District of Columbia

Public Schools; and General Julius W. Becton, Jr., (Retired), Chief

Executive Officer and Superintendent, District of Columbia Public

Schools, accompanied by Major General Charles Williams, (Retired), Chief Operating Officer.

16. Music Violence: How Does it Affect Our Children? An Examination of the Impact of Violent Music Lyrics on Youth Behavior

and Well-Being in the District of Columbia and Across the Nation (November 6, 1997)

This oversight hearing looked at the impact that violent music

has on the youth of America. Over the last 30 years, violent juvenile crime had jumped by more than 500 percent, teen suicide had

tripled, and unwed teen pregnancy had skyrocketed. In the last 4

years alone, casual drug use among teens had jumped nearly 50

percent. The same statistics were especially alarming among the

children in the District of Columbia.

Witnesses: Hon. Kent Conrad, U.S. Senator from the State of

North Dakota; Raymond Kuntz, Parent, Burlington, North Dakota;

Dr. Frank Palumbo, on behalf of the American Academy of Pediatrics, Washington, D.C.; Hilary Rosen, President and Chief Executive Officer, Recording Industry Association of America, Washington, D.C.; C. DeLores Tucker, Chair, National Political Congress

of Black Women, Inc., Silver Spring, Maryland, accompanied by

Chad Sisk, Philadelphia, Pennsylvania; and Donald F. Roberts,

Thomas Moore Stork Professor of Communications, Stanford University.

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17. Reforming the Adoption and Foster Care System in the District

of Columbia (February 12, 1998)

This hearing focused on the deteriorating condition of the District of Columbia adoption and foster care system. In the District,

two-thirds of the children who come under the District’s custody

grow up and age out of the foster care system at 18 years of age

rather than growing up in a permanent adoptive home. As a result,

the D.C. Child and Family Services, which handles foster care and

adoption, is currently operating under a Federal court receivership.

The purpose of the hearing was to hear about the innovative adoption reforms in Kansas and how they may apply to the District. In

addition, the hearing provided an opportunity for the newly-appointed Federal Court receiver to announce her plans for improvement within the D.C. Child and Family Services.

Witnesses: Hon. Mike DeWine, U.S. Senator from the State of

Ohio; Hon. Charles E. Grassley, U.S. Senator from the State of

Iowa; Hon. Dave Camp, U.S. Representative in Congress from the

State of Michigan; Hon. Rochelle Chronister, Secretary, Department of Social and Rehabilitative Services, State of Kansas; Hon.

Larry E. Craig, U.S. Senator from the State of Idaho; Debora

Caruth, D.C. Foster Care Parent; Gordon Henry Gosselink, D.C.

Pre-Adopted Child; Ernestine F. Jones, LaShawn General Receiver,

District of Columbia Child and Family Services; Judith Meltzer,

Senior Associate, Center for the Study of Social Policy; and Thomas

Wells, Executive Director, Consortium for Child Welfare.

18. Lessons Learned in the D.C. Public Schools (March 9, 1998)

This hearing served as a progress report on the D.C. public

school system for the previous academic year. The District school

system had performed poorly under the leadership of a new Superintendent and the D.C. Emergency Education Board of Trustees.

The city’s public schools suffered from low academic achievement

scores throughout the system and a delayed opening due to roof repairs. The hearing addressed a GAO study that highlighted flaws

in the school system’s roof repair process as well as safeguards to

help avoid more set-backs in following school years.

Witnesses: Gloria L. Jarmon, Director, Health, Education and

Human Services, Accounting and Financial Management, Accounting and Information Management Division, General Services Office;

David L. Cotton, Managing Partner, Cotton and Company, accompanied by Ed Fritts, Senior Manager, Cotton and Company, and

Marvin Allmond, Managing Partner, Allmond and Company; General Julius W. Becton, Jr., Superintendent, District of Columbia

Public Schools, accompanied by Arlene Ackerman, Chief Academic

Officer; and Tallib-Din Uqdah, parent of D.C. Public School students.

19. A Free Market Approach to Federal Contracting: Fair Competition Act of 1998 and the Competition in Commercial Activities

Act of 1998 (S. 314) (March 24, 1998)

This was a joint hearing held in conjunction with the House Subcommittee on Government Management, Information, and Technology of the House Committee on Government Reform and Oversight. The hearing focused on the Senate and House re-draft of the

original version of S. 314, the Freedom From Government CompetiVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00054 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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tion Act of 1997. Rather than prohibiting the Federal Government

from competing with the private sector, the new draft establishes

a level playing field in which the private sector and the Federal

agencies compete for commercial activities performed by the Federal Government. The purpose of the hearing was to gain input

from various representatives from OMB, the private sector, former

government officials, and Federal employee unions.

Witnesses: Hon. Craig Thomas, U.S. Senator from the State of

Wyoming; G. Edward DeSeve, Acting Deputy Director for Management, U.S. Office of Management and Budget; Skip Stitt, former

Deputy Mayor, City of Indianapolis, testifying on behalf of Hon.

Steven Goldsmith, Mayor of Indianapolis; Steve Kelman, Ph.D.,

Weatherhead Professor of Public Management, Harvard University;

Bryan Logan, Chief Executive Officer, Earth Data International;

Larry Trammell, Corporate Vice President and General Manager,

Science Applications International Corp; Douglas K. Stevens, Jr.,

Partner of Information Technology Services Group, under Grant

Thornton, LLP, representing the U.S. Chamber of Commerce; Robert M. Tobias, National President, The National Treasury Employees Union; Bobby L. Harnage, President, American Federation of

Government Employees; and Michael B. Styles, National President,

Federal Managers Association.

20. Giving Children a Chance to Learn: The D.C. Student Opportunity Scholarship Act (May 5, 1998)

This hearing solicited the views of the parents and children who

were going to be directly impacted by President Clinton’s decision

to veto the ‘‘District of Columbia Student Opportunities Scholarship Act of 1997.’’ The Act, which was to provide approximately $7

million to be apportioned into 1,800 scholarships for low income

families, was vetoed 15 days after the hearing on May 20, 1998.

Two District of Columbia residents testified as to how the proposed

legislation would positively impact their lives and the lives of their

children. They discussed the condition of the District’s public

schools and how the system was failing to educate their children.

Witnesses: Virginia Walden, District of Columbia resident; and

Wesley Walker-Bey, District of Columbia resident.

21. The Role of Faith-Based Charities in the District of Columbia

(May 18, 1998)

The purpose of this hearing was to examine how faith-based nonprofit organizations serve a positive role in helping residents of the

District of Columbia. The Subcommittee was interested in uncovering government barriers hindering the work of these charities and

finding ways to help them overcome these barriers. The executive

directors from several local charities testified, as well as former

‘‘clients’’ of several charities. One former drug addict is now gainfully employed on Capitol Hill; a disruptive high school student is

now focused on education and is finishing her undergraduate degree at George Washington University. The charities represented

had encountered excessive government paperwork and zoning impediments in the District of Columbia. Senator Coats and other

policy analysts testified to the positive impact of Members of Congress through their personal involvement in charitable work.

52

Witnesses: Hon. Dan Coats, U.S. Senator from the State of Indiana; Dr. Edward J. Eyring, President and Executive Director, Gospel Rescue Ministries; Hannah M. Hawkins, Founder and Director,

Children of Mine Center; Jim Till, Executive Director, Strategies to

Elevate People; Amy Hunt Johnson, Director, Neighborhood Learning Center; April Lassiter, President, The Initiative for Children

Foundation; and Joe Loconte, Deputy Editor, Policy Review Magazine, The Heritage Foundation.

22. Competition for Commercial Activities in the Federal Government (June 4, 1998)

In an effort to keep commercial functions in-house, many Federal

agencies ignore OMB’s policy, known as OMB Circular A–76, for

identifying and competing non-inherently governmental activities.

This hearing focused on why agencies ignore OMB A–76 and how

legislation, like the Fair Competition Act (S. 314) could solve this

problem. Senator Craig Thomas, sponsor of the original version of

S. 314, gave a statement and discussed why the Federal Government should use the tools available to them to bring the benefits

of competition to the government.

Witnesses: Hon. Craig Thomas, U.S. Senator from the State of

Wyoming; J. Christopher Mihm, Acting Associate Director, Federal

Management Workforce Issues, U.S. General Accounting Office, accompanied by Bill Reinsberg and Marilyn Wasleski; G. Edward

DeSeve, Acting Deputy Director, U.S. Office of Management and

Budget; John Berry, Assistant Secretary for Policy, Management

and Budget, U.S. Department of the Interior; and W. Scott Gould,

Chief Financial Officer and Assistant Secretary for Administration,

U.S. Department of Commerce.

23. ‘‘Keeping the Nation’s Capital Safe’’ (July 27, 1998)

The crime situation in the Nation’s capital city has been improving statistically but remains far too violent. This hearing examined

a D.C. Inspector General’s report documenting the problems with

the city’s emergency 911 system and discussed grass roots efforts

being implemented to fight crime at the neighborhood level in the

District of Columbia. Chief of Police, Charles Ramsey, testified on

behalf of the Metropolitan Police Department. Two local residents

testified about their local anti-crime efforts and the positive impact

they have had on their communities. Chairman Brownback also

honored Capitol Hill Police officers Jacob Chestnut and John Gibson who gave their lives in the line of duty just 3 days prior to the

hearing.

Witnesses: Charles H. Ramsey, Chief of Police, Metropolitan Police Department, District of Columbia, accompanied by Terrence

Gainer, Executive Assistant Chief of Police, and Mike Fitzgerald,

Assistant Chief, Technical Services; James F. Foreman, Coordinator, Metro Orange Coalition; and Kirsten Oldenburg, Editor,

Crimemail, D.C. Police Service Area 109.

24. Agency Management of Implementation of the Coal Act (October

6, 1998)

In June of 1998, the U.S. Supreme Court ruled in Eastern Enterprises v. Apfel that the 1992 Coal Act created an unconstitutional

‘‘taking.’’ Senator Sam Brownback focused this oversight hearing

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on the impact of the Supreme Court’s decision for other reachback

companies and the decision’s long-term financial implications for

the solvency of the Combined Fund.

Witnesses: Hon. John D. Rockefeller, IV, U.S. Senator from the

State of West Virginia; Hon. Kent Conrad, U.S. Senator from the

State of North Dakota; Hon. Kathy Karpan, Director, Office of Surface Mining Reclamation and Enforcement, Department of the Interior; Bill Fant, Special Assistant, Office of Tax Policy, Department

of the Treasury; and Marilyn O’Connell, Associate Commissioner,

Office of Program Benefits Policy, Social Security Administration.

25. Are Military Adultery Standards Changing: What Are the Implications? (October 7, 1998)

On August 14, 1998, the Federal Register contained proposed

changes to the Department of Defense Manual for Courts Martial

relating to adultery. This oversight hearing focused on the process

of developing these new proposed guidelines and whether these

changes would ‘‘clarify’’ the standards or make it easier for a commander to overlook unacceptable behavior because the effects of

the offense were not ‘‘immediate, obvious, and measurably divisive.’’ Elaine Donnelly, President of the Center for Military Readiness, testified that she had discovered through a FOIA request that

DOD had solicited outside advice on the proposed change in the

adultery standard from the ACLU and the Servicemembers Legal

Defense Network. Furthermore, she stated that DOD did not consult with any of the major veterans’ organizations or military professional societies such as the American Legion, the Veterans of

Foreign Wars, and the Naval Institute. She believes that the proposed changes may serve to muddy the waters on prosecuting adultery and give the perception that adultery is not taken seriously by

the military. Others testifying stated that the changes would serve

to ‘‘civilianize’’ the military culture, interfering with the focus of

troops and damaging combat readiness, morale, and unit cohesion.

Witnesses: Elaine Donnelly, President, Center for Military Readiness; Dr. Daniel R. Heimbach, Former Deputy Assistant Secretary

of the Navy for Manpower; and Lieutenant Colonel Robert L.

Maginnis, USA Ret., Director, Military Readiness Project, Family

Research Council.

II. GAO REPORTS

During the 105th Congress, the Subcommittee worked in conjunction with the General Accounting Office on 13 reports and

studies:

Transportation Infrastructure: Managing the Costs of LargeDollar Highway Projects, RCED–97–47 (February 28, 1997)

Weather Service Modernization: Risks Remain that Full System Potential Will Not Be Achieved, T–AIMD–97–85 (April 24,

1997)

Courthouse Construction: Better Courtroom Use Data Could

Enhance Facility Planning and Decisionmaking, GGD–97–39

(May 19, 1997)

54

Privatization and Competition: Comments on S. 314, the

Freedom From Government Competition Act, T–GGD–97–134

(June 18, 1997)

District of Columbia: Revenue Compared With Those of Selected Cities, GGD–97–135R (June 26, 1997)

Best Practices: Elements Critical to Successfully Reducing

Unneeded RDT&E Infrastructure, NSIAD—RCED–98–23 (January 8, 1998)

Convention Centers’ Economic Benefits, GGD—AIMD—

OCE–98–71R (February 27, 1998)

Federal Research: Challenges to Implementing the Advanced

Technology Program, RCED—OCE–98–83R (March 2, 1998)

District of Columbia Public Schools: Availability of Funds

and the Cost of FY 1997 Roof Projects, T–AIMD–98–95 (March

9, 1998)

OMB Circular A–76: Oversight and Implementation Issues,

T–GGD–98–146 (June 4, 1998)

Regulatory Management: Implementation of Selected OMB

Responsibilities Under the Paperwork Reduction Act, GGD–

98–120 (July 9, 1998)

Employee Benefits: Status of UMWA Combined Benefit

Fund, HEHS–99–7R (October 2, 1998)

Paperwork Reduction Act: Implementation at IRS, GGD–99–

4 (November 16, 1998)

III. LEGISLATION

The following bills were considered by the Subcommittee on

Oversight of Government Management, Restructuring, and the District of Columbia during the 105th Congress:

S. 199—Federal Research Financing Improvement Act of 1997

The bill prohibits the construction of new Federal research facilities to carry out a covered research activity unless the head of the

Federal agency with jurisdiction over the new facility enters into

a cooperative agreement for such construction and the conduct of

such research with appropriate representatives of each beneficiary

industry to be served by the activity. It requires the beneficiary industry to pay at least half the cost of construction and requires the

agreement to provide for both: (1) sharing among beneficiary industries of intellectual property obtained from covered research activities; and (2) protection of certain intellectual property used by the

Federal Government in carrying out the activities.

S. 222—National Drought Policy Act of 1997 (Public Law 105–199)

This bill establishes the National Drought Policy Commission to

conduct a thorough study and submit a specified report on national

drought policy to the President and the Committee on Government

Affairs of the Senate and the Committee on Government Reform

and Oversight of the House together with its recommendations for

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priate. The bill terminates the Commission 90 days after the submission of report.

On November 5, 1997, the Committee ordered the bill reported

favorably with an amendment in the nature of a substitute. A written report was filed on November 7, 1997 (S. Rept. 105–144). It

passed the Senate on November 10, 1997 with an amendment by

unanimous consent. On November 12, 1997, the bill was introduced

in the House as H.R. 3035, passed by the House on June 16, 1998,

and passed by the Senate on June 24, 1998. It was signed into law

on July 16, 1998 (Public Law 105–199).

S. 294—Officer Brian Gibson District of Columbia Police Protection

Act

This bill amends the Federal criminal code to establish penalties,

including the death penalty, for the killing or attempted killing of

a law enforcement officer of the District of Columbia.

The Committee ordered the bill reported favorably without

amendment on November 5, 1997.

S. 314—Freedom From Government Competition Act of 1997 (Public

Law 105–270) (Title amended to ‘‘Federal Activities Inventory

Reform Act of 1998.’’)

This bill directs the head of each executive agency to submit to

the Director of the Office of Management and Budget, not later

than the end of the third quarter of each fiscal year, a list of activities performed by Federal Government sources for the agency that,

in the judgment of the head of the executive agency, are not inherently governmental functions.

On July 15, 1998, the Committee ordered the bill to be favorably

reported with Chairman Thompson’s amendment in the nature of

a substitute. The Committee filed a report on July 28, 1998 (S.

Rept. 105–269). The Chairman’s substitute amendment was passed

by the Senate by unanimous consent on July 30, 1998. On October

5, 1998, the House passed S. 314 by voice vote under suspension

of the rules. The President signed the bill on October 8, 1998. (Public Law 105–270)

S. 847—District of Columbia Student Opportunity Scholarship Act

of 1997

The bill authorizes the establishment of a private, nonprofit corporation the District of Columbia Scholarship Corporation to administer, publicize, and evaluate the District of Columbia scholarship program and to determine student and school eligibility for

program participation. It establishes the District of Columbia

Scholarship Fund, to be administered by the Secretary of the

Treasury, through which annual funds shall be provided to the District and used by the Corporation for the program. It also authorizes appropriations to the fund for FY 1998 through 2002.

This bill was introduced on June 5, 1997, by Senators Coats,

Lieberman, Brownback, Ashcroft, Coverdell, and Gregg. It was reintroduced as S. 1502 on September 9, 1997, and passed by the

Senate without amendment by unanimous consent. S. 1502 passed

the House on April 30, 1998, and was vetoed by the President on

May 20, 1998.

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S. 1404—Federal Statistical System Act of 1998

This bill expresses the sense of the Congress that: (1) a more centralized statistical system is integral to efficiency; (2) the Chief

Statistician must have the authority, personnel, and other resources necessary to carry out the duties of that office effectively,

including duties relating to statistical forms clearance; and (3) statistical forms clearance at the Office of Management and Budget

(OMB) should be better distinguished from regulatory forms clearance.

The bill was introduced on November 7, 1997 by Senator

Brownback for himself, Chairman Thompson, and Senators Moynihan and Kerrey. On September 25, 1998, the Committee ordered

the bill reported favorably with an amendment in the nature of a

substitute. The Committee filed a written report on October 6, 1998

(S. Rept. 105–367).

H.R. 497—A bill to repeal the Federal charter of Group Hospitalization and Medical Services, Inc., and for other purposes (Public

Law 105–149)

This bill amends the Federal charter of Group Hospitalization

and Medical Services, Inc., to: (1) permit the corporation to have

one class of members consisting of at least one member and not

more than 30; and (2) prohibit dissolution of the corporation without congressional approval.

H.R. 497 was passed by the House on February 26, 1997. On November 5, 1997, the Committee ordered the bill reported favorably

with an amendment in the nature of a substitute. On November 6,

1997, the Committee reported the bill without a written report. The

bill passed the Senate with an amendment by unanimous consent

on November 8, 1997. On November 12, 1997, the Senate-passed

bill was introduced as H.R. 3025 which was passed by the House

under suspension of the rules by voice vote. The Senate passed

H.R. 3025 by unanimous consent on November 13, 1997, and it was

signed into law on December 16, 1997. (Public Law 105–149)

H.R. 513—District of Columbia Council Contract Review Reform

Act of 1997

The bill amends the District Self-Government and Governmental

Reorganization Act to exempt from review and approval by the District of Columbia Council: (1) contracts entered into by the Washington Convention Center Authority for preconstruction activities,

project management, design, or construction; (2) contracts entered

into by the District of Columbia Water and Sewer Authority other

than contracts for the sale or lease of the Blue Plains Wastewater

Treatment Plant; and (3) at its option, contracts for Federal-aid

highway improvement projects.

IV. OTHER ACTIVITIES

The Subcommittee worked extensively with the District of Columbia to create a better and more livable city for its residents. On

June 24, 1998 the Subcommittee held an Adoption Fair for District

children who were under the custody of the city’s foster care system and were in need of permanent homes and families. The effort

to match foster care children with permanent families was a sucVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00060 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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cess with a total of eight children being joined with eight loving

families.

On June 25, 1997 the Subcommittee announced the inclusion of

its D.C. tax proposal in the Senate Finance Committee’s reconciliation package. The Finance Committee included a zero capital

gains tax and a first-time home buyer tax credit for the people of

the District of Columbia which were intended to jump start the

District’s economy and empower its citizens. Joining the Subcommittee for the announcement were Senators Mack and Lieberman and Delegate Norton, whose work on behalf of the legislation

dated back to the previous Congress. The Subcommittee also was

joined by economists from the Heritage Foundation and Wharton

Forecasting Associates, who presented their findings from a detailed analysis of the tax plan and its effects on the city.

In conjunction with the LaShawn General Receiver, the D.C. Inspector General and the Chief Management Officer of the District

of Columbia, the Subcommittee was involved with the rectification

of abuse problems relating to the District Government’s telecommunications policies. The problem has since been remedied.

The Subcommittee also worked with the Executive Branch to ensure that all agencies were run with fiscal prudence and sound

management practices. Among these efforts the Subcommittee, in

conjunction with the General Accounting Office, closely monitored

the Paperwork Reduction Act of 1995 and more specifically, its implementation by the Office of Information and Regulatory Affairs

(OIRA). The Subcommittee worked in association with the House

of Representatives and the Senate Appropriations Subcommittee on

Treasury, Postal Service and General Government to withhold a

portion of OIRA’s proposed budget until the agency was able to adhere to the mandates placed upon it by the aforementioned Paperwork Reduction Act.

Lastly, the Subcommittee monitored the process under which the

Department of Defense attempted to change the long standing military adultery standards. As noted above, the Subcommittee held a

hearing regarding this issue and subsequently tracked the progress, including a submission for public comment, on the Notice of

Proposed Amendments to the Manual for Courts Martial published

in the Federal Register on August 14, 1998. The Subcommittee also

monitored what DOD actually took into consideration during the

public comment period and what pertinent information may have

been omitted.

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

CHAIRMAN: SUSAN M. COLLINS

RANKING MINORITY MEMBER: JOHN GLENN

The following is the annual Activities Report of the Permanent

Subcommittee on Investigations during the 105th Congress:

58

1 In 1952, the parent committee’s name was changed to the Committee on Government Operations. It was changed again in early 1977, to the Committee on Governmental Affairs, its

present title.

I. HISTORICAL BACKGROUND—50TH ANNIVERSARY OF THE

SUBCOMMITTEE

A. Expansion of Jurisdiction

Although its records and jurisdiction actually predate its authorization, the Permanent Subcommittee on Investigations (Subcommittee) was originally authorized by Senate Resolution 189 on

January 28, 1948. At its creation in 1948, the Subcommittee was

part of the Committee on Expenditures in the Executive Departments. The Subcommittee’s records and broad investigative jurisdiction over government operations and national security issues,

however, actually antedate its creation, since it was given custody

of the jurisdiction of the former Special Committee to Investigate

the National Defense Program (the so-called ‘‘War Investigating

Committee’’ or ‘‘Truman Committee’’), chaired by Senator Harry S.

Truman during the Second World War. Today, the Subcommittee

is part of the Committee on Governmental Affairs.1

The Subcommittee has had eight chairmen: Senators Homer Ferguson of Michigan (1948), Clyde R. Hoey of North Carolina (1949–

1952), Joseph R. McCarthy of Wisconsin (1953–1954), John L.

McClellan of Arkansas (1955–1972), Henry M. Jackson of Washington (1973–1978), Sam Nunn of Georgia (1979–1980 and 1987–

1994), William V. Roth of Delaware (1981–1986 and 1995–1996),

and Susan M. Collins of Maine (1997 to present). With Senator Collins’ chairmanship, the Subcommittee in some sense came full circle: Its predecessor body, the Truman Committee, had also been

chaired by a Republican Senator from Maine, Ralph Owen Brewster.

Until 1957, the Subcommittee’s jurisdiction focused principally

on waste, inefficiency, impropriety, and alleged illegality in government operations. Its jurisdiction has been expanded considerably

since then, however, today encompassing investigations within the

broad ambit of the Committee on Governmental Affairs’ responsibility for matters relating to the efficiency and economy of operations of all branches of the Government.

The Subcommittee’s responsibilities increased in several successive stages. In 1957—based on information developed by the Subcommittee—the Senate passed a resolution establishing a Select

Committee on Improper Activities in the Labor or Management

Field. Chaired by Senator McClellan, who also chaired the Subcommittee at that time, the Select Committee was composed of

eight Senators—four of whom were drawn from the Subcommittee

on Investigations and four from the Committee on Labor and Public Welfare. The Select Committee existed for 3 years sharing office

space, personnel, and other facilities with the Permanent Subcommittee. Upon its expiration in early 1960, the Select Committee’s jurisdiction and files were transferred to the Subcommittee on

Investigations, greatly enlarging the latter body’s investigative authority in the labor-management area.

The Subcommittee’s investigatory jurisdiction expanded further

throughout the 1960’s. In 1961, for example, it received authority

59

2 It exercised this jurisdiction in 1963, for example, in organizing the famous Valachi hearings

described below, in which the Subcommittee examined the inner workings of the Italian Mafia. 3This anniversary also marks the first date upon which internal Subcommittee records generally began to become available to the public. Unlike most standing committees of the Senate

whose previously unpublished records open after a period of 20 years has elapsed, the Permanent Subcommittee on Investigations, as an investigatory body, may close its records for 50

years to protect personal privacy and the integrity of the investigatory process. With this 50th

anniversary, the Subcommittee’s earliest records, housed in the Center for Legislative Archives

at the National Archives and Records Administration, began to open seriatim. The records of

the predecessor committee—the Truman Committee—were opened by Senator Nunn in 1980.

to make inquiries into matters pertaining to syndicated or organized crime.2 In the wake of the riots and other civil disturbances

that marked the summer of 1967, the Senate approved a resolution

directing the Subcommittee to investigate the causes of this disorder and to recommend corrective action. The Subcommittee acquired its national security mandate in January 1973, when it

merged with the National Security Subcommittee. With this merger, the Subcommittee’s jurisdiction was broadened to include inquiries concerning the adequacy of national security staffing and

procedures, relations with international organizations, technology

transfer issues, and related matters. Finally, in 1974—in reaction

to the global oil shock and energy shortage precipitated by the

Arab-Israeli War of October 1973—the Subcommittee also acquired

jurisdiction to investigate government operations involving the control and management of energy resources and supplies.

B. Past Investigations

Armed with this broad investigatory mandate, the Subcommittee

has in recent years conducted investigations into a wide variety of

topics of public concern, ranging from child pornography to espionage, including reviews of organized crime activities such as labor

racketeering, fraudulent insurance plans, and newly emerging

criminal groups. The Subcommittee has also conducted investigations into numerous aspects of the narcotics trade, including money

laundering, issues in Federal drug enforcement, and drug abuse.

The Subcommittee has also devoted itself particularly to investigating allegations of waste, fraud, and abuse in government programs. Most recently, under Senator Collins’ chairmanship, the

Subcommittee has focused particularly upon consumer protection

issues, addressing problems ranging from the safety of imported

foods to issues of Medicare fraud.

The second session of the 105th Congress was a significant one

for the Permanent Subcommittee on Investigations, since January

28, 1998 marked the 50th anniversary of the Truman Committee’s

conversion into a permanent subcommittee of the U.S. Senate.3 In

the half-century of its existence, the Subcommittee’s many successes have made clear to the Senate the importance of retaining

a standing investigatory organ devoted to keeping government not

only efficient and effective, but also honest and accountable.

The Subcommittee’s investigatory record as a permanent Senate

body began under the chairmanship of Republican Senator Homer

Ferguson and his Chief Counsel (and future Secretary of State)

William P. Rogers, as the Subcommittee inherited the Truman

Committee’s role in investigating fraud and waste in U.S. Government operations. This investigative work became particularly colorful under the chairmanship of Senator Clyde Hoey—a North CaroVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00063 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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lina Democrat who took the chair from Senator Ferguson after the

1948 elections. The last U.S. Senator to wear a long frock coat and

wing-tipped collar, Mr. Hoey was a distinguished southern gentleman of the old school. Under his leadership, the Subcommittee

won national attention for its investigation of the so-called ‘‘five

percenters,’’ notorious Washington lobbyists who charged their clients five percent of the profits from any Federal contracts they obtained on the client’s behalf. Given the Subcommittee’s jurisdictional inheritance from the Truman Committee, it is perhaps ironic

that the ‘‘five percenters’’ investigation raised allegations of bribery

and influence-peddling that reached right into the White House

and implicated members of President Harry Truman’s staff. In any

event, the fledgling Subcommittee was off to a rapid start.

What began as colorful soon became contentious. When Republicans returned to the majority in the Senate in 1953, Wisconsin’s

junior Senator, Joseph R. McCarthy, became the Subcommittee’s

chairman. Two years earlier, as Ranking Minority Member, McCarthy had arranged for another Republican Senator, Margaret Chase

Smith of Maine, to be removed from the Subcommittee. Senator

Smith’s offense, in McCarthy’s eyes, was her issuance of a ‘‘Declaration of Conscience’’ repudiating those who made unfounded

charges and used character assassination against their political opponents. Although Senator Smith had carefully declined to name

any specific offender, her remarks were universally recognized as

criticism of McCarthy’s accusations that communists had infiltrated the State Department and other government agencies.

McCarthy retaliated by engineering Senator Smith’s removal from

the Subcommittee, replacing her with the newly-elected Senator

from California, Richard M. Nixon.

Upon becoming Subcommittee Chairman, McCarthy staged a series of highly publicized anti-communist investigations, culminating in an inquiry into communism within the U.S. Army, which

became known as the Army-McCarthy hearings. During the latter

portion of these hearings, in which the parent Committee examined

the Wisconsin Senator’s attacks on the army, Senator McCarthy

recused himself, leaving South Dakota Senator Karl Mundt to

serve as Acting Chairman of the Subcommittee. Gavel-to-gavel television coverage of the hearings helped turn the tide against McCarthy by raising public concern about his treatment of witnesses and

cavalier use of evidence. In December 1954, in fact, the Senate censured Senator McCarthy for unbecoming conduct; in the following

year, the Subcommittee adopted new rules of procedure that better

protected the rights of witnesses. It had taken some years, but

these developments finally vindicated the courageous stand of Senator Margaret Chase Smith.

In 1955, Senator John McClellan of Arkansas began 18 years of

service as Chairman of the Permanent Subcommittee on Investigations. Senator McClellan appointed the young Robert F. Kennedy

as the Subcommittee’s Chief Counsel. That same year, Members of

the Subcommittee were joined by members of the Senate Labor and

Public Welfare Committee on a special committee to investigate

labor racketeering. Chaired by Senator McClellan and staffed by

Kennedy and other Subcommittee staff members, this special committee directed much of its attention to criminal influence over the

Teamsters Union, most famously calling Teamsters’ leaders Dave

61

Beck and Jimmy Hoffa to testify. The televised hearings of the special committee also introduced Senators Barry Goldwater and John

F. Kennedy to the Nation, as well as leading to passage of the

Landrum-Griffin Labor Act. After each day’s hearings, moreover,

Robert Kennedy and other staff members, including Pierre Salinger

and Kenneth O’Donnell, would meet in the Committee’s back room

to plan strategies for Senator John Kennedy’s upcoming 1960 presidential campaign. As Ruth Watt, the Subcommittee’s Chief Clerk,

observed: ‘‘They were running for President in our office after 5

o’clock in the evening.’’ Several of the Subcommittee’s staff members would subsequently join the Kennedy Administration.

After the special committee completed its work, the Permanent

Subcommittee on Investigations continued to investigate organized

crime. In 1962, the Subcommittee held hearings during which Joseph Valachi outlined the activities of La Cosa Nostra, or the

Mafia. Former Subcommittee staffer Robert Kennedy—who had by

now become Attorney General in his brother’s administration— used this information to prosecute prominent mob leaders and their

accomplices. The Subcommittee’s investigations also led to passage

of major legislation against organized crime, most notably the

Racketeer Influenced and Corrupt Organizations (RICO) provision

of the Crime Control Act of 1970. Under Chairman McClellan, the

Subcommittee also investigated fraud in the purchase of military

uniforms, corruption in the Department of Agriculture’s grain storage program, securities fraud, and civil disorders and acts of terrorism. From 1962 to 1970, the Permanent Subcommittee on Investigations conducted an extensive probe of political interference in

the awarding of government contracts for the Pentagon’s ill-fated

TFX (‘‘tactical fighter, experimental’’). In 1968, the Subcommittee

also examined charges of corruption in U.S. servicemen’s clubs in

Vietnam and elsewhere around the world.

In 1973, Senator Henry ‘‘Scoop’’ Jackson, a Democrat from Washington, replaced McClellan as the Subcommittee’s chairman. During these years, recalled Chief Clerk Ruth Young Watt—who

served in this position from the Subcommittee’s founding until her

retirement in 1979—Ranking Minority Member Charles Percy, an

Illinois Republican, initiated and led many Subcommittee activities, often working closely in this regard with Georgia Democrat

Sam Nunn, who subsequently succeeded Senator Jackson as chairman in 1979. As Chairman, Nunn continued the Subcommittee’s

investigations into the role of organized crime in labor-management relations and also investigated pension frauds.

The regular reversals of political fortunes in the Senate of the

1980’s and 1990’s saw Senator Nunn trade chairmanship three

times with Delaware Republican Senator William Roth. Nunn

served from 1979 to 1980 and again from 1987 to 1995, while Senator Roth served from 1981 to 1986, and again from 1995 to 1996.

For his part, Senator Roth led a wide range of investigations into

commodity investment fraud, off-shore banking schemes, money

laundering, and child pornography. Senator Nunn inquired into

Federal drug policy, the global spread of chemical and biological

weapons, abuses in Federal student aid programs, computer security, airline safety, and health care fraud. Senator Nunn also appointed the Subcommittee’s first female counsel, Eleanore Hill, who

served as Chief Counsel to the Minority from 1982 to 1986 and

62

then as Chief Counsel from 1987 to 1995. Ms. Hill subsequently

served as Inspector General at the Department of Defense under

Defense Secretary—and former Republican Senator from Maine—

William Cohen.

In January 1997, Cohen’s successor, Republican Senator Susan

Collins of Maine, became the first woman to chair the Permanent

Subcommittee on Investigations. Senator John Glenn of Ohio became Ranking Minority Member. Senator Collins pledged to continue the Subcommittee’s mission of vigilantly exposing government malfeasance, social and economic wrongdoing, and serious

violations of the public trust. Her aim was to focus upon problems

that affected the American people in their daily lives so that the

Subcommittee’s work would help and protect the people of Maine

and Americans across the Nation. The following pages describe the

Subcommittee’s work in this regard during the 105th Congress.

II. SUBCOMMITTEE HEARINGS DURING THE 105TH CONGRESS

1. Medicare at Risk: Emerging Fraud in Medicare Programs (June

26, 1997)

In keeping with Senator Collins’ emphasis upon protecting ordinary citizens from fraud, the Subcommittee began the 105th Congress with a hearing in June 1997 pertaining to emerging fraud in

the Medicare program. This hearing focused upon the problems of

preventing fraud in the enormous—and hugely important—health

care industry.

It is, of course, no overstatement to say that America’s vital

health care industry is an economic behemoth; by some estimates,

combined private and public expenditures on health care constitute

13.6 percent of America’s gross domestic product in 1995 dollars,

and this figure is growing. These spiraling costs are unlikely to

abate because the average age in this country continues to rise.

The Nation’s largest health care payor is a public entity, the Medicare program. Unfortunately, however, the Medicare program has

borne the dubious distinction of appearing on the U.S. General Accounting Office (GAO) list of government programs ‘‘highly vulnerable to waste, fraud, abuse and mismanagement’’ every year since

1992.

As a result of these program vulnerabilities—and the great sums

of money spent under the Medicare program—the Subcommittee

commenced an investigation into Medicare waste, fraud, and abuse

in May 1997. The aim of this inquiry was both to help protect the

taxpayer from those unscrupulous individuals who steal billions of

dollars from Medicare and to protect the elderly and disabled

Americans who rely on this important program for their health

care needs.

On June 26, the Subcommittee conducted its first public hearing

on this topic. Among the witnesses testifying were Leslie Aronvitz,

Associate Director of Health Financing and Systems Issues at the

GAO, a recognized expert in health care fraud issues; Bruce C.

Vladeck, HCFA’s Administrator; Professor Pamela H. Bucy, Bainbridge Professor of Law at the University of Alabama Law School,

a well-known expert in the area and a former Assistant U.S. Attorney; Michael F. Mangano, Principal Deputy Inspector General of

the Department of Health and Human Services; and Charles L.

63

Owens, Chief of the FBI’s Financial Crimes Section. These witnesses testified that waste, fraud, and abuse occur throughout the

health care industry, including the areas of home health care, medical equipment and supplies, nursing homes, laboratory services,

hospitals, and managed care. The Subcommittee also heard testimony from Senators Charles E. Grassley and Tom Harkin of Iowa.

The Subcommittee also heard testimony about some of the fraudulent schemes that have been used to take advantage of the Medicare program. Perpetrators of such schemes included the owner of

a Florida home health care agency who billed Medicare $84,000 for

gourmet popcorn, $140,000 for an airplane, $14,000 in companylogo emery boards, and $5,000 to lease a BMW for the owner’s son.

Another example involved the chief financial officer of ABC Home

Health Services, Inc.—one of the country’s largest home health care

chains—who was convicted of billing Medicare for more than $14

million in false expenses, including jewelry and a luxury beach

house.

2. Fraud in Micro-Capital Markets Including Penny Stock Fraud

(September 22, 1997)

The Subcommittee’s investigations continued in 1997 by building

upon the Subcommittee’s long tradition of investigating securities

frauds directed at small investors. After published reports suggested that investors may lose as much as $6 billion each year due

to fraud in so-called ‘‘penny stocks,’’ the Subcommittee launched an

investigation of securities fraud into the micro-capital (‘‘micro-cap’’)

markets. This new investigation focused upon small companies

with relatively low market values, including (but not limited to)

penny stocks.

The Subcommittee staff found that the explosion in the U.S.

stock market that occurred during the mid-1990’s brought with it

a sharp increase in securities sales fraud and stock price manipulation schemes. Rogue brokers, they found, played upon investors’ impressions about the successes of legitimate market offerings in

misrepresenting the potential of their wares in high-pressured

‘‘cold-call’’ presentations built around false or exaggerated information. In addition to coercive cold-calling and spreading false

information, rogue broker ‘‘boiler rooms’’ also used numerous other

tactics to manipulate stock prices. These tactics included making

unauthorized purchases in consumers’ accounts, refusing to execute

sell orders in order to maintain a stock’s upward momentum, using

unlicensed cold-callers who were paid ‘‘under the table’’ for making

sales, and actually bribing brokers to recommend particular stocks

to unsuspecting consumers.

In its hearing on this subject on September 22, 1997, the Subcommittee heard from a panel of three victims—Helen Sprecher,

Louis Poggi, and Emile Murnan—who had been coerced into disastrous purchases by high-pressure ‘‘boiler room’’ cold-callers. After

aggressively pursuing and convincing the victims to purchase

stocks from them, these rogue brokers swindled the victims out of

thousands of dollars by lying to them and performing unauthorized

trades in their accounts.

Several witnesses from the industry’s regulatory agencies also

provided testimony for the Subcommittee. These included Arthur

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sion; Joseph P. Borg, Director of the Alabama Securities Commission; and Barry R. Goldsmith, Executive Vice President of NASD

Regulation, Inc. These witnesses described the extent of micro-cap

stock fraud problems currently affecting the industry, and suggested how such schemes might be brought under control. In their

view, prevention strategies, tougher civil and criminal enforcement

efforts, and a series of new regulatory initiatives should be examined to control the micro-cap stock fraud problem. The aim of such

a regulatory program would be to strike the necessary balance— controlling fraud without damaging the legitimate securities market that sustains many small businesses in this country.

3. Oversight Review of the Treasury Department’s Inspector General

(October 31 and November 3, 1997)

In May 1997, the Subcommittee began an investigation of published allegations against the Department of the Treasury’s Office

of Inspector General (OIG). These allegations concerned the OIG’s

contracting practices with respect to two consulting contracts. The

GAO’s Office of Special Investigations (OSI) assisted the Subcommittee in conducting its review of the Treasury OIG’s contracting practices. The Subcommittee’s inquiry also examined

events surrounding the OIG’s investigation of testimony provided

by two career Secret Service special agents at a July 1996 hearing

before the House Government Reform and Oversight Committee regarding the FBI ‘‘Filegate’’ matter.

After a 5-month investigation, the Subcommittee held hearings

on October 31 and November 3, 1997. At the first hearing, the Subcommittee heard testimony from three GAO representatives—Robert P. Murphy, General Counsel; Donald J. Wheeler, OSI’s Deputy

Director; and Theodore Barreaux, Associate Director of the Accounting and Information Management Division—as well as from

Valerie Lau, the Treasury Department’s Inspector General. At the

second hearing, the Subcommittee heard testimony from Richard J.

Gallo, President of the Federal Law Enforcement Officers Association, and from three representatives from the Treasury’s OIG:

James M. Cottos, Senior Technical Advisor to the Inspector General; Emily P. Coleman, Special Agent-in-Charge of the Eastern Region; and Inspector General Lau.

The Subcommittee was gravely concerned about the problems it

found at the Treasury OIG. As Senator Collins put it, the Subcommittee’s findings of misconduct were ‘‘troubling, not only because they involve the waste of government resources and mismanagement of a Federal office, but also because they involve an

Inspector General, the very person charged with protecting the

public from waste, fraud and abuse.’’

Inspector General Lau announced her resignation on January 16,

1998.

4. Medicare Fraud Prevention: Improving the Medicare Enrollment

Process (January 29, 1998)

The Subcommittee’s investigation into Medicare fraud continued

in the wake of its June 26, 1997 hearing, focusing upon several

weaknesses this inquiry revealed in the procedures and processes

used to enroll Medicare providers. These weaknesses have allowed

numerous individuals or entities, with little or no experience as

65

4 Concealing his identity by testifying from behind a screen, this convicted felon told the Subcommittee that ‘‘this is a dangerous world and I sincerely fear for my safety.’’

health care providers, to enter the Medicare program and thereby

to steal millions of dollars from the Nation’s taxpayers. The Subcommittee’s hearing on this subject, on January 29, 1998, revealed

that there existed essentially no screening process for those applying to become Medicare providers. Indeed, despite the high financial and public health stakes involved, it was much easier to obtain

a Medicare provider number than to obtain a liquor license.

Witnesses at the Subcommittee’s January 1998 hearing included

one such Medicare criminal, who wished to have his identity concealed. Mr. Smith—a pseudonym—had stolen approximately $32

million from the Medicare program until being caught and convicted.4 He testified that it had been very easy for him to obtain

his Medicare provider number: He simply filled out an application,

mailed it to the appropriate office, and was thereafter simply given

a provider number over the telephone. No one ever scrutinized his

application or performed a site visit to verify that his business actually existed. After receiving the provider number, Smith paid recruiters to acquire Medicare beneficiary numbers, with which he

billed Medicare month after month, ostensibly for supplying nutritional supplements to the elderly—supplements which he never actually provided. Through such fraud, he received between $180,000

to $200,000 in Medicare payments every month. Smith told the

Subcommittee that he and his criminal colleagues considered Medicare to be a gold mine, adding that the government had made it

easy for him to rob the taxpayer by not bothering to require that

he produce any documents in support of the false bills he submitted to Medicare.

In addition to Smith, the Subcommittee also heard from several

expert investigators with experience in Medicare fraud issues.

These included John M. Frazzini, a former Subcommittee investigator; John E. Hartwig, Deputy Inspector General for Investigations at HHS’s Office of Investigations (OI); Cathy E. Colton, Supervisory Special Agent of OI’s Miami Sub-Office; H. Donna

Dymon, Ph.D., former California Team Leader of HCFA’s antifraud initiative, Operation Restore Trust (ORT); Dewey Price,

ORT’s South Florida Team Leader; and Susan A. Frisco, a Special

Agent from the New York Field Office of the HHS Office of Inspector General.

5. Fraud on the Internet: Scams Affecting Consumers (February 10,

1998)

With a large and growing number of American households with

access to the Internet through personal computers, the use of the

Internet for consumer purchases, banking, and other electronic

commerce is increasing rapidly. With this growth in commerce,

however, comes the risk of new kinds of fraud. Credit card fraud

has already been identified by law enforcement agencies as a major

problem in Internet commerce, and new types of Internet-related

crime have been proliferating. Financial institutions and other

businesses with on-line financial services, for example, have been

affected by unauthorized criminal intrusions into their systems. According to published reports, ‘‘electronic bank robberies’’ net on avVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00069 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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erage approximately $250,000, and only 2 percent of those ‘‘cybercrimes’’ are ever detected and investigated, let alone solved. Such

statistics compare alarmingly to conventional bank robberies,

which net on average approximately $7,500—and with 80 percent

of the robbers eventually being apprehended.

Concerned about Americans’ vulnerability to Internet-related

fraud, the Subcommittee began an investigation into the extent to

which such criminal activities affect commerce on the Internet. The

Subcommittee’s first hearing on this subject occurred on February

10, 1998, and focused upon traditional types of fraud perpetrated

over the Internet. At this hearing, the Subcommittee heard testimony from Susan Grant, Director of the National Fraud Information Center and Vice President for Public Policy at the National

Consumers’ League; Tatiana Gau, Vice President for Integrity Assurance at America Online, the world’s largest Internet provider;

Barry Wise, C.P.A., a victim of Internet fraud; and Hon. Robert

Pitofsky, Chairman of the Federal Trade Commission.

The outcome of the hearing determined that more consumer education was required so that consumers could distinguish more easily between fraudulent and genuine offers on the Internet without

stifling legitimate commerce. The hearing also determined that

consumer complaints regarding Internet fraud need to be vigorously pursued by the appropriate authorities and that these agencies have the resources that are required to do the job.

6. Unauthorized Long Distance Switching ‘‘Slamming’’ (February

18, 1998—Field Hearing in Portland, Maine)

In 1996, the Federal Communications Commission (FCC) received over 16,000 complaints from consumers about telephone

‘‘slamming’’—the unauthorized switching, by a long distance carrier, of a consumer’s long distance service—making this the number one consumer complaint to the FCC. The FCC, which is responsible for investigating complaints of telephone slamming, has

adopted regulations against slamming and taken numerous actions

against companies that engage in this practice. Nevertheless, despite current regulations prohibiting slamming, it continues to be

used by long distance carriers against unwitting consumers. Concerned at the scope of this continuing problem, the Subcommittee

began an investigation into the prevalence of telephone slamming,

the adequacy of current regulations, and FCC enforcement to prevent this insidious practice.

The Subcommittee held a field hearing concerning telephone

slamming on February 18, 1998 in Portland, Maine. During this

hearing, Maine consumers victimized by slamming practices explained how some long distance companies used fraudulent or deceptive practices to change their telephone service without their

knowledge or approval. Witnesses at this hearing included the

Hon. Susan Ness, FCC Commissioner; Daniel Breton, Director of

Governmental Affairs for Bell Atlantic; Susan Grant, Vice President for Public Policy of the National Consumers’ League; and

three victims of telephone slamming practices—Susan Deblois of

Wintrhop, Maine; Pamela Corrigan of West Farmington, Maine;

and Steve Klein of Portland, Maine.

This hearing showed how some long distance companies used

fraudulent practices to change their telephone service. Witnesses

67

used words such as ‘‘stealing,’’ ‘‘criminal,’’ and ‘‘break-in’’ to describe practices employed by unscrupulous telephone companies to

pick up customers and boost profits.

Pamela Corrigan testified that she was sent an unsolicited ‘‘welcome package’’ in the mail, which looked like the stacks of junk

mail that consumers receive every day. However, this ‘‘junk mail’’ was not what it appeared to be. This ‘‘welcome package’’ automatically signed her up for a new long distance service unless she returned a card rejecting the change. She was amazed and appalled

that it was possible for a company to change her long distance

service simply because she did not respond that she did not want

their service. Susan Deblois testified that, when she was slammed,

her children were unable to use the 800 number she had for them

to call home in case of an emergency.

The hearing also illustrated how slamming not only affects families but also small businesses and communities. For example, Steve

Klein, the owner of Mermaid Transportation Company in Portland,

Maine, testified that his business phone lines, which are critical to

his livelihood, were tied up for 4 days when he was slammed by

a long-distance telephone reseller which falsely represented itself

as AT&T. Similarly, Ms. Corrigan, who is the town manager of

Farmington, Maine, reported that the town’s phone lines were also

slammed. It became clear from the hearing that no one is immune

from this illegal activity.

Also, at this hearing, FCC Commissioner Susan Ness testified

about the FCC’s efforts to control slamming. The Commissioner acknowledged that the FCC really does not know how many of the

50 million carrier selection changes each year result in slamming,

since many slammed consumers resolve the problem without bringing it to the FCC. However, the Commissioner did offer the conservative estimate that, if just one percent of the carrier changes

made each year are the result of unauthorized changes in service,

over 500,000 households are slammed each year.

The hearing also made it clear that the FCC must step up its enforcement efforts against slammers. Senator Collins pointed out to

the FCC that the States are much more aggressive than the FCC

in taking enforcement actions against slammers. The FCC Commissioner agreed that the relatively small fines imposed on slammers

by the FCC might be considered by the company as just the cost

of doing business, rather than a real deterrent to slamming. In addition, the Commissioner agreed that the FCC could increase its

enforcement against slammers and that establishing criminal penalties for slamming would help to reduce the problem.

7. The Exploding Problem of Telephone Slamming in America

(April 23, 1998)

Building upon the record established in its Portland field hearing

in February, the Subcommittee held a second hearing on telephone

slamming on April 23, 1998. At this hearing, GAO investigators

presented the results of a case study they had undertaken at the

Subcommittee’s request, and Members discussed its findings with

the head of the FCC. The GAO study focused upon one particular

long distance telephone company and revealed that this company

apparently slammed over 500,000 consumers at one time, billed

consumers over $20 million, and left unpaid bills to long distance

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carriers of nearly $4 million—all while successfully eluding Federal

officials. The Subcommittee heard testimony at this hearing from

the Hon. William E. Kennard, Chairman of the FCC, and from

Eljay B. Bowron, Assistant Comptroller General for Special Investigations at GAO.

Mr. Bowron testified that long distance companies engage in

slamming because there is a financial incentive to do so and that

it is easy for fraudulent individuals to enter the long distance market because there are no controls in place at the FCC to screen potential providers. As part of its investigation, GAO investigators

filed fictitious information with the FCC without any difficulty that

gave the investigators authority to ‘‘resell’’ long distance services.

This authority gives the applicant the ability to enter the long distance market and slam consumers with little chance of being

caught. In addition, to illustrate how an entity engages in slamming, Mr. Bowron presented a case study of Daniel Fletcher, an individual who operated as a long distance reseller under at least

eight different company names, slamming thousands of consumers.

According to the findings in the GAO report, Mr. Fletcher slammed

or attempted to slam over 500,000 consumers, billed consumers for

at least $20 million in long distance charges, and left at least $3.8

million in unpaid bills to telecommunications industry firms. Furthermore, Mr. Bowron testified that the FCC took over 2 years to

take final action against the Fletcher companies and has been unable to locate Mr. Fletcher.

Chairman Kennard testified that current FCC rules do not do

enough to protect consumers against slamming and that tougher

rules are needed take the profit out of slamming. The Chairman

explained that the FCC has proposed new rules to improve its ability to protect consumers from this fraudulent practice. However,

the new rules had not yet been adopted by the FCC. The Chairman

also testified that the FCC took the unprecedented action of revoking the operating authority of the Fletcher companies on April 21,

1998, and fined these companies $5.7 million.

The Subcommittee learned that billing practices in the telecommunications industry allow long distance companies to use misleading company names that are difficult for consumers to identify

on their phone bills, and that the States have been much more aggressive than the FCC in taking enforcement action against companies that repeatedly slam consumers.

8. The Safety of Food Imports—An Overview (Part I) (May 14, 1998)

In June 1997, the Subcommittee began an in-depth investigation

into the safety of food imported into the United States. According

to the GAO, there are an estimated 81 million cases of food borne

illnesses and as many as 9,100 related deaths each year. The two

Federal agencies that are primarily responsible for monitoring food

imports are the Agriculture Department’s Food Safety and Inspection Service (FSIS) and the HHS’s Food and Drug Administration

(FDA). The FSIS inspects domestic and imported meat, poultry,

and eggs to ensure safety, wholesomeness, and accurate labeling

while the FDA inspects all other domestic and imported food products. Food imports to the United States have increased dramatically in recent years, and the FSIS and FDA have not kept up.

Today, they inspect a smaller proportion of food products than ever.

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Concerned at the possibility that this dynamic might be putting

American consumers increasingly at risk, the Subcommittee’s inquiry aimed to determine: (i) the extent to which some imported

food poses health risks to U.S. consumers; (ii) whether Federal

agencies effectively and efficiently use their existing resources; and

(iii) whether the Nation’s food safety system is adequate to prevent

unsafe food from entering the United States. Chairman Collins requested that GAO assist the Subcommittee in its investigation by

conducting a review of the adequacy of the procedures used to ensure the safety of food imports, specifically focusing on the processes used by Federal agencies to monitor fruit and vegetable imports—the fastest growing sector of imported food products.

The Subcommittee held the first of its four public hearings on

the safety of food imports on May 14, 1998. The Subcommittee

heard testimony from Dr. Mary Ellen Camire, Department of Food

Science and Human Nutrition at the University of Maine; Robert

E. Robertson, Associate Director for Food and Agricultural Issues

at the GAO; and Reggie Jang, a former Consumer Safety Inspector

for the Food and Drug Administration. Dr. Camire testified that

preventative measures at the (foreign) farm level are very important because border inspection procedures involve testing relatively

few shipments of imported food and extensive microbiological and

chemical testing of all imports is not feasible. Mr. Robertson, Associate Director, Food and Agriculture Issues for the GAO discussed

the key findings of the year-long GAO review requested by Chairman Collins: (1) limitations in FDA’s authority make it unnecessarily difficult to ensure food safety; (2) FDA’s and FSIS’ procedures for selecting shipments to review result in the ineffective targeting of inspection resources; and (3) weaknesses in FDA and Customs controls allow unscrupulous importers to market unsafe products. Finally, Mr. Jang described techniques used by unscrupulous

importers to circumvent current import procedures.

9. The Safety of Food Imports: From Farm to the Table—A Case

Study of Tainted Imported Fruit (Part II) (July 9, 1998)

The Subcommittee held its second hearing on the safety of food

imports in July 1998. During this hearing, the witnesses laid out

a case study of tainted imported fresh fruit ‘‘from the farm to the

table,’’ focusing on contamination problems with such imports and

how the Centers for Disease Control (CDC) and other public health

agencies investigate outbreaks of foodborne illness. The first witness was Dr. Stephanie A. Smith, a food scientist and Subcommittee investigator who traveled to Guatemala to observe firsthand the production and export of fresh raspberries. The Subcommittee also heard from Dr. Jeffery Foran, an environmental scientist and a consumer who contracted a Cyclospora infection after

eating contaminated raspberries. The final witness, Dr. Stephen

Ostroff, the Associate Director for Epidemiologic Science of the

CDC’s National Center for Infectious Diseases, provided an overview of CDC’s foodborne disease surveillance systems and described the process of outbreak investigation and ‘‘traceback’’ to the

source of contamination.

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10. ‘‘Cramming’’—An Emerging Telephone Billing Fraud (July 23,

1998)

Like telephone ‘‘slamming,’’ another emerging consumer fraud

examined by the Subcommittee during the 105th Congress is the

practice of telephone ‘‘cramming’’—the billing of unauthorized

charges on a consumer’s telephone bill. At the Subcommittee’s

cramming hearing on July 23, 1998, Members heard testimony

from: Susan Grant, Vice President for Public Policy at the National

Consumers’ League; Lawrence E. Strickling, Deputy Chief of the

FCC’s Common Carrier Bureau; Eileen Harrington, Assistant Director for Marketing Practices at the Federal Trade Commission’s

Bureau of Consumer Protection; and Roy M. Neel, President and

Chief Executive Officer of the U.S. Telephone Association.

This hearing was designed to raise consumer awareness and determine what was being done to control the emerging problem of

telephone ‘‘cramming’’. The hearing highlighted the scope and nature of cramming, educated consumers about cramming, determined what was being done to control the practice, and explored

further regulatory and legislative remedies that could be implemented to stop cramming.

Susan Grant, from the National Consumer’s League, discussed

consumer complaints about cramming, what consumers can do to

protect themselves from unauthorized charges, and what changes

need to be made in telephone billing practices to control cramming.

Roy Neel, from USTA, discussed the telephone billing industry’s efforts to control cramming, focusing on the anti-cramming guidelines that were developed by key representatives of the industry.

Larry Strickling, Deputy Chief of the FCC’s Common Carrier Bureau (the Bureau responsible for telephone regulations and enforcement), discussed FCC’s anti-cramming efforts, including consumer

awareness programs, pending enforcement actions, and efforts to

encourage industry guidelines to prevent cramming. Eileen Harrington, Associate Director for Marketing Practices, discussed

FTC’s efforts to stop cramming, including consumer awareness and

enforcement actions. She also discussed additional legislative

changes that may be required to enable FTC to take enforcement

actions against all companies, including telecommunications carriers.

11. The Safety of Food Imports—Fraud and Deception in the Food

Import Process (Part III) (September 10, 1998) (Combined with

Part IV, September 24 and 25, 1998)

In September 1998, the Subcommittee held its third hearing on

the safety of imported food. This hearing examined the specific

ways in which unscrupulous importers exploit weaknesses in the

U.S. food safety system. The witnesses at this hearing were Lawrence J. Dyckman, Director for Food and Agriculture Issues at the

GAO; Keith Oleson, GAO’s Assistant Director for Food and Agriculture Issues; Dennis Richards, a GAO investigator; Richard J.

Hoglund, Deputy Assistant Commissioner for the U.S. Customs

Service’s Office of Investigations; Philip Metzger, Director of the

Customs Service’s Trade Compliance Team; and ‘‘Mr. Broker’’ (a

pseudonym), a former customer broker now serving as a confidential informant.

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The GAO witnesses testified that importers’ ability to retain custody over food products even during the inspection process made it

much easier for unscrupulous operators to bring unsafe goods into

the United States, that shipments rejected by inspectors are not

marked to show such rejection (thereby making it easier to bring

them in through another port of entry), that Customs and FDA seldom coordinated their efforts to prevent unsafe imports, and that

current penalties were not effective deterrents. The GAO officials

also detailed seven recent Customs Service investigations into the

devices used by unscrupulous importers to bring tainted food products into the country, after which ‘‘Mr. Broker’’ described his experiences with such schemes.

12. National Cancer Institute’s Management of Radiation Studies

(September 16, 1998)

The Subcommittee’s next hearing focused upon the handling of

an important study of radiation risks by the National Cancer Institute (NCI). In 1983, Congress required HHS to conduct a study to

determine exposures and doses resulting from the release of radioactive iodine (I–131) from U.S. atmospheric nuclear weapons testing at the Nevada Test site between the mid-1940’s and the early

1960’s, and assess the risk of thyroid cancer associated with doses

of I–131. NCI did not issue this study until fully 14 years later, on

October 1, 1997—even though the report had essentially been completed as early as 1992. Furthermore, even when it was finally

issued, the report did not fully comply with the requirements set

forth by Congress in that it neglected to discuss any increased public risk of thyroid cancer from I–131.

Led by investigators from the Minority Staff, the Subcommittee

conducted an inquiry into NCI’s management of this study. Witnesses at the NCI hearing included: Senator Tom Harkin of Iowa;

Dr. Owen Hoffman, President of Senes Oak Ridge, Inc.; Dr. Barry

L. Johnson, Assistant Administrator of the Agency for Toxic Substances and Disease Registry at HHS; Dr. Bruce Wachholz, Chief

of the Radiation Effects Branch of NCI; Dr. William F. Raub, Deputy Assistant Secretary for Science Policy at HHS; and Dr. Richard

Klausner, NCI’s director.

The Subcommittee’s hearing focused on accusations of mismanagement in NCI’s handling of this important study, and the resulting delay in informing the American public about how it may

have been affected by nuclear fallout. NCI witnesses acknowledged

that the I–131 report should indeed have been released earlier, attributing some of NCI’s inattention to the mistaken belief that the

public did not have a strong interest in the results of the study.

In light of these problems, the hearing also addressed alleged NCI

mismanagement of two similar ongoing studies, including one addressing the health effects of the nuclear accident at Chernobyl in

the former Soviet Union in 1986. Of particular concern was HHS’

lack of department-wide policies or guidelines to govern the conduct of radiation health effects research, even though its agencies

perform many of those studies for the government. Witness testimony also explored the differing approaches to health effects research taken by various agencies within HHS. HHS officials, in

turn, pledged to review the practices and procedures for such dose

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5 After the Subcommittee hearing, Congress gave CDC an additional $1.85 million to conduct

a broader study of the health consequences of nuclear weapons tests. See H.R. 4328 (Omnibus

Consolidated and Emergency Supplemental Appropriations Bill for Fiscal Year 1999). This bill

also required HHS to conduct a review of NCI’s Chernobyl study and to inform Congress of its

plans and recommendations for the development and implementation of guidelines and policies

to govern radiation health studies in the future.

reconstruction studies at NCI and CDC and to arrange an independent review of ongoing projects.5

13. Improving the Safety of Food Imports (Part IV) (September 24– 25, 1998) (Combined with Part III, September 10 1998)

The Subcommittee held 2 more days of hearings on the safety of

imported food in September 1998. These hearings focused upon

possible legislative, administrative, and regulatory remedies for the

weaknesses in the U.S. food safety system identified during the

course of the Subcommittee’s investigation. Witnesses at the hearing were: Senators Paul Coverdell of Georgia, Edward Kennedy of

Massachusetts, Barbara Mikulski of Maryland, and Tom Harkin of

Iowa; William Schultz, Deputy Commissioner for Policy at the

FDA; Thomas J. Billy, Administrator of the Department of Agriculture’s Food Safety and Inspection Service (FSIS); Raymond W.

Kelly, Commissioner of the U.S. Customs Service; and Dr. Sanford

A. Miller of the National Academy of Sciences’ Committee to Ensure Safe Food. The Subcommittee also heard from Timothy M.

Hammonds, President and Chief Executive Officer of the Food Marketing Institute; Dr. Stacey A. Zawel, Director for Scientific and

Regulatory Affairs at the Grocery Manufacturers of America; Dane

T. Bernard, Vice President for Food Safety Programs at the National Food Processors Association; Dr. Nancy Nagle, Senior Advisor for Food Safety at the United Fresh Fruit and Vegetable Association; Dr. Richard Levinson, Associate Executive Director for Programs and Policy at the American Public Health Association; Carol

Tucker Foreman, Coordinator of the Safe Food Coalition; Dr. Ruth

Kava, Director of Nutrition at the American Council on Science and

Health; and Robert Hahn, Director for Legal Affairs and Research

at Public Voice for Food and Health Policy.

While there was no overriding consensus among the 16 witnesses, some of the recommendations provided were shared across

witness categories. For example, both the industry and consumer

organizations want increased funding for research and consumer

education. Both the industry groups and the agencies recognize the

need for enhanced coordination between the FDA and the U.S. Customs Service. Both the consumer groups and the FDA want Congress to grant FDA equivalency authority. Two additional statements of interest were provided. First, both the United Fresh Fruit

and Vegetable Association and the Grocery Manufacturers Association want the United States to more aggressively participate in

international standard-setting activities, specifically Codex Alimentarius. Second, the Food Marketing Institute suggested creation of

a revenue-neutral cross-utilization plan to permit FSIS and FDA to

share both financial and human resources.

14. Medicare Fraud Prevention and Enforcement Efforts (December

9, 1998—Field Hearing in Chicago, Illinois)

Building upon its previous investigation and hearings into Medicare fraud, the Subcommittee held a field hearing on this subject

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in Chicago, Illinois in December 1998. This hearing examined some

recent successful Medicare fraud prevention and enforcement efforts, particularly Operation Restore Trust (ORT) and a local senior

citizen outreach and education program in Illinois. ORT was a

major 2-year effort launched by HHS’ Office of Inspector General

(HHS–OIG) in May 1995, which focused on five States—California,

Florida, New York, Texas, and Illinois—that contain 40 percent of

Medicare beneficiaries. The project targeted three areas the HHS– OIG had identified with systemic health care fraud: Home health

agencies, nursing homes, and durable medical equipment suppliers.

The hearing also examined the congressionally-authorized Health

Care Anti-Fraud, Waste and Abuse Community Volunteer Demonstration Program, which recruited and trained retired professionals to serve as local, volunteer resources, and educators—also

enlisting them in identifying and reporting health care fraud and

abuse.

At this Chicago field hearing, the Subcommittee heard testimony

from: Dorothy Collins, Regional Administrator of HCFA; James A.

Kopf, Director of HHS–OIG’s Criminal Investigations Division Office; Barbara Coyle, a volunteer with the Suburban Area Agency on

Aging in Oak Park, Illinois; and Jonathan Lavin, Executive Director of the Suburban Area Agency on Aging. Testimony revealed

that Federal taxpayers were often billed for home health services

that were either overused, not medically necessary, or not actually

covered by Medicare. The Subcommittee found that ORT, however,

had great success in combating such fraud, and that the retired

volunteers recruited by the demonstration program were proving to

be an important bulwark in the fight to identify and stop such

schemes and to educate health care consumers about such issues.

III. LEGISLATIVE ACTIVITIES DURING THE 105TH CONGRESS

The Permanent Subcommittee on Investigations does not have

legislative authority, but because its investigations play an important role in bringing issues to the attention of Congress and the

public, the Subcommittee’s work frequently contributes to the development of significant legislative initiatives. The Subcommittee’s

activities during the 105th Congress were no exception, with Subcommittee hearings and Members playing prominent roles in the

development of a number of legislative initiatives.

S. 1740—Slamming Protection Act of 1998

Sparked by the findings of the Subcommittee’s investigation into

American consumers’ growing problems with telephone ‘‘slamming’’—the unauthorized switching of telephone service subscribers

from one telecommunications carrier to another—Senators Collins

and Durbin introduced a bill to amend the Communications Act of

1934 to improve Federal safeguards against such practices. Portions of this legislation were included in legislation introduced by

Senator McCain, chairman of the Commerce Committee, which

passed the Senate by a vote of 99 to 0 on May 12, 1998. This bill

did not become law by the close of the 105th Congress, however,

because agreement could not be reached in conference after the

House passed a less encompassing slamming bill.

The Collins/Durbin provisions would have established new criminal penalties for intentional slamming, the same as those for any

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other Federal crime: A maximum of $100,000 and 1 year imprisonment for a misdemeanor, and $250,000 and 5 years imprisonment

for a felony. In addition, anyone convicted of intentional slamming

would be disqualified from being a telecommunications service provider. This would provide an additional enforcement tool against

those individuals that engage in the most egregious of slamming

violations, and would not prevent the Federal Government from

using any other civil or criminal remedy to stop those who intentionally defraud consumers by slamming.

Second, the provisions would increase consumer protection and

give control back to consumers by taking the financial incentive

away from companies that engage in slamming. Rather than paying the slamming company, consumers could pay their original carrier at their previous rate. This is a more reasonable approach to

removing the financial incentive for slamming than absolving subscribers of any liability for telephone charges when they are

slammed, as was proposed by the FCC Chairman, William

Kennard.

Finally, the Collins/Durbin provisions encouraged better FCC enforcement against slamming by requiring all telecommunications

carriers to report slamming violations, on a quarterly basis, to the

FCC in a summary report. Currently, there is no central repository

for slamming complaints, and the FCC must rely on consumers to

write or call the FCC to report a slamming incident. A universal

reporting requirement would increase the FCC’s ability to learn

which carriers are engaging in widespread slamming and take immediate enforcement action against them.

S. 2167—Inspector General Act Amendments of 1998

As an outgrowth of the Subcommittee’s hearings on problems in

the office of the Treasury Department’s Inspector General, Senators Collins and Grassley introduced a bill to improve the accountability and efficiency of Offices of Inspector General (OIGs)

throughout the Federal system. This bill proposed amendments to

the Inspector General Act that would: (i) establish a 9-year renewable term of office for presidentially-appointed Inspectors General;

(ii) require that all OIGs undergo an external review, not less than

every 3 years, to evaluate their management and controls of contracts, appropriated funds, and personnel actions; (iii) require OIGs

to submit annual (rather than semiannual) reports to Congress; (iv)

increase an Inspectors General’s annual salary from $118,400 (Executive Level 4) to $125,900 (Executive Level 3); and (v) consolidate

selected smaller OIGs into larger, more efficient, department-wide

offices. The bill did not become law by the close of the 105th Congress, but Chairman Collins intended to reintroduce a second

version of the bill in the 106th Congress.

S. Amdt. 934—Oversight of Treasury Department Inspector General

In legislative action also growing out of the Subcommittee’s investigation into abuses by the Treasury OIG, Senators Collins,

Shelby and Grassley introduced an amendment to prohibit the

Treasury Department’s Inspector General from spending any funds

on consulting contracts and to make a corresponding reduction in

the Inspector General’s budget by $1 million. This amendment was

necessary because the Subcommittee’s investigation revealed clear

75

and credible evidence that the Inspector General had abused her

contracting authority by spending taxpayer dollars on management

studies of doubtful value and excessive cost. The amendment was

later adopted as part of the Treasury, Postal Service, and General

Government Appropriations Act (Public Law 105–61).

IV. GAO REPORTS AND COMMITTEE PRINT

In connection with its investigations into the above topics, the

Subcommittee made extensive use of the resources and expertise of

the General Accounting Office, the various U.S. Government Inspectors General, and other entities. In the process, the Subcommittee requested a number of reports and studies on issues of

great importance to Congress and to U.S. consumers. Among these

reports were the following:

Inspectors General: Contracting Actions By Treasury Office of Inspector General (General Accounting Office, October 1997)

In May 1997, after allegations had been raised of misconduct

against the Treasury Department’s Inspector General, Chairman

Collins requested that GAO’s Office of Special Investigations assist

the Subcommittee in determining the facts and circumstances surrounding the events at issue. Specifically, Chairman Collins requested that GAO examine the Department of Treasury’s award,

without full and open competition, (a) of a sole-source contract to

Sato and Associates for a management study of the Treasury Department’s OIG and (b) of a consulting services contract to Kathie

M. Libby.

GAO reported that, shortly after Inspector General Valerie Lau’s

confirmation, she notified the Treasury’s Procurement Services Division that she wanted Frank Sato—an old personal friend—to perform a management review. The Procurement Division subsequently awarded a sole-source management study to Sato and Associates on the basis of ‘‘unusual and compelling urgency.’’ Although Inspector General Lau stated that the need to limit competition was urgent because of the need to make reassignments in

the senior executive ranks and to marshal the resources needed to

conduct audits, GAO found that there was insufficient urgency to

justify limiting competition in this fashion. GAO also reported that

the price of the Sato and Associates contract for the Treasury OIG

effort appeared to be artificially high, especially in light of the fact

that the same firm had performed a similar review of the Department of Interior OIG for approximately $62,000 less.

In September 1995, the Procurement Division also awarded a

time-and-materials consulting services contract to Kathie M.

Libby—doing business as KLS—to review and analyze an Office of

Personnel Management (OPM) report on morale and diversity problems in the OIG office and assist OIG managers and staff concerning goals identified in the OPM study. The contract was also

awarded with only very limited competition on the basis of ‘‘unusual and compelling urgency.’’ GAO reported that the justification

for limiting competition was unreasonable in this case as well,

since delay would not have prevented Inspector General Lau from

addressing the problems in question. In addition, GAO identified a

pattern of careless management in the procurement process and in

oversight of performance under the KLS contract; this careless

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management resulted in a four-fold increase in the contract’s total

price and required a 1-year extension to the contract’s performance

period. Finally, GAO found that KLS received payments for work

that had not been authorized.

Oversight Review of the Office of Inspector General, U.S. Department of The Treasury (S. Prt. 105–42, January 30, 1998)

After a 5-month investigation and 2 days of hearings examining

management problems at the Treasury OIG, the Subcommittee

concluded that substantial evidence suggested that the office had

violated Federal laws in the sole-source procurement of its consulting contracts with Sato and Associates and KLS. Specifically,

the Subcommittee concluded that there was insufficient urgency for

the OIG to award the Sato and Associates contract on a sole-source

basis, making this award a violation of applicable procurement

statutes and regulations. The OIG, the Subcommittee found, also

violated applicable statutes and regulations by failing to request offers from as many potential sources as practicable under the circumstances. Inspector General Lau was aware, for example, of at

least three other contractors who could have done the work she

gave to her friend Frank Sato.

Regarding the KLS contract, the Subcommittee also concluded

that Inspector General Lau’s justification for limiting competition

was also unreasonable, and that two modifications to that contract

clearly fell outside its scope. The Subcommittee’s investigation, in

fact, identified a pattern of careless management in the procurement process and in the OIG’s oversight of performance under the

KLS contract. The OIG engaged in poor procurement planning

which resulted in five contract modifications, a four-fold increase in

the contract’s total price, and a 1 year’s extension to the period of

performance. In addition, the OIG paid for work that was not authorized by the contract or modifications, and payments were made

to KLS without verification that work had been accomplished and

without receipts for travel costs incurred by the contractor.

The Subcommittee found additional problems with the Treasury

OIG’s handling of issues relating to the controversy popularly

known as ‘‘Filegate’’—which began when the sensitive FBI background files of former Bush Administration officials and other

prominent Republicans were acquired by Clinton Administration

officials at the White House. Testimony given by White House officials to the House Committee on Government Reform and Oversight apparently conflicted with that given by two career Secret

Service agents about the procedures used by the Secret Service to

generate lists of White House passholders. This conflict led the

Treasury OIG to begin an investigation into the Secret Service

agents for perjury and/or false statements.

In looking into the OIG’s handling of this investigation, the Subcommittee found the OIG’s work to have been marked by inconsistencies and confusion from the start. The Subcommittee received

conflicting reports about (a) who directed the opening of the investigation, (b) the nature and scope of the case, (c) who authorized

or knew of changes in its scope, and (d) why accurate and complete

information about the existence and nature of the investigation

was concealed from Congress despite repeated inquiries by the Senate and the House. Indeed, the Subcommittee found that the TreasVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00080 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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ury OIG had badly mishandled the inquiry—destroying documents,

unfairly and inappropriately harassing and humiliating the two Secret Service agents, and misleading Congress about the nature of

this investigation.

Telecommunications: Telephone Slamming and Its Harmful Effects

(General Accounting Office, April 1998)

The General Accounting Office’s Office of Special Investigations

conducted a 4-month investigation of the types of entities that engage in slamming and the process by which such entities are able

to defraud consumers.

This report provided evidence that shows telephone resellers are

responsible for a disproportionate number of slamming complaints.

While all telecommunications carriers have had slamming complaints against them, resellers are more often involved in many of

the more fraudulent slamming practices.

The report showed that, because the FCC operates in a deregulation mode, there are no mechanisms in place to screen out fraudulent telecommunications providers and prevent them from entering

the market. Even the minimum requirements that the FCC has in

place to issue licenses are not enforced by the FCC until complaints

are lodged against a particular carrier. To determine how easy it

is to get an FCC license and get into the telecommunications business, GAO investigators filed a tariff with the FCC for a fictitious

telecommunications company named ‘‘PSI Communications.’’ Even

though the GAO investigators did not provide all of the information

required, within a day or so, PSI Communications received an FCC

license and was officially authorized to be a telecommunications

provider. Armed with the FCC license, GAO investigators contacted

various facilities-based carriers, such as Sprint, MCI and AT&T, to

see what requirements they would have to meet to become resellers

for those carriers. Although the GAO investigators did not pursue

this any further, they learned that as long as they signed an agreement to deliver a certain level of business, they could operate as

resellers without meeting any additional requirements.

The GAO report also provided information on the enforcement

actions against slamming taken by the States as compared to those

actions taken by the FCC. The evidence shows that the States have

been much more aggressive in their pursuit of slammers than the

FCC has been.

As a case study of slamming, GAO presented the case of Daniel

Fletcher, an individual who operated as a telecommunications reseller under at least eight different company names, repeatedly

slamming thousands of consumers. By working with larger telephone resellers and billing agents, Mr. Fletcher was able to receive

at least several million dollars in advance of billing his so-called

customers, most of whom turned out to have been slammed by the

Fletcher companies. When those resellers or billing agents became

aware of the slamming complaints against one particular Fletcher

company, Mr. Fletcher disappeared and continued to do business

using another of his many fictitious companies.

Only after the FCC received numerous slamming complaints

against the Fletcher companies did the Commission realize that

Mr. Fletcher did not provide the information required by FCC regulations. Mr. Fletcher filed tariffs, required as a condition of obtainVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00081 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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ing an FCC license, for only two of his companies. The FCC’s efforts to locate him were futile, since his business addresses were

all mail box drops and the contact phone numbers provided in the

FCC applications all led to answering services. As a result, the

FCC has not been able to collect the $80,000 fine it assessed

against one of the Fletcher companies. In June 1997, the FCC

issued a proposed order to revoke the operating authority of the

Fletcher companies, but has yet to finalize that order. Technically,

under the law, Mr. Fletcher is still allowed to offer telecommunications services.

Food Safety: Federal Efforts to Ensure the Safety of Imported Foods

Are Inconsistent and Unreliable (General Accounting Office,

April 1998)

In May 1998, Chairman Collins released a report prepared by

GAO in response to her request that it evaluate the Federal Government’s efforts to ensure the safety of imported foods. This report

contained recommendations—to Congress and to the Secretaries of

Agriculture and of Health and Human Services—designed to enhance the Federal Government’s authority to review the safety of

food imports, improve the effectiveness and efficiency of systems

and staff to screen imports, and strengthen internal controls.

The GAO report reached three principal conclusions. First, it concluded that weaknesses in import controls allow entry of unsafe

food products. Without sufficient controls, unscrupulous importers

can falsify laboratory test results on suspect foods in order to obtain an FDA release, sell potentially unsafe imported food before

FDA can inspect it, and/or still sell imported foods that FDA has

actually barred from entry. Second, the report found that Federal

agencies could more effectively target resources on unsafe foods.

Accordingly, GAO recommended that both FDA and FSIS modify

their import information systems; among other things, such modifications should allow inspectors to access laboratory test results.

Third, the report found that the lack of ‘‘equivalency authority’—

the authority of U.S. regulators’’ to require countries to demonstrate that they have safety inspection systems equivalent to

those of the United States before granting them authority to export

to the U.S.-diminishes FDA’s ability to protect American consumers

from unsafe imported foods.

Year-End Spending: Reforms Underway But Better Reporting and

Oversight Needed (General Accounting Office, July 1998)

During 1979 and 1980, the Governmental Affairs Committee’s

Subcommittee on Oversight of Government Management conducted

an investigation and held hearings on the subject of ‘‘hurry-up

spending’’—unplanned, binge spending upon low-priority projects

and items at the end of a fiscal year in order to use up available

budgets. The Subcommittee concluded that inadequate management practices responsible for hurry-up spending cost the taxpayer,

at a minimum, $2 billion each fiscal year. In June 1997, Chairman

Collins requested GAO to assist the Permanent Subcommittee on

Investigations in determining if these management weaknesses

had in fact been corrected.

GAO reported that changes in the budget environment and procurement reforms have made hurry-up spending a much less severe

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problem than in 1980. Agencies spend far less today in the direct

provision of goods and services, while payments to individual beneficiaries and grants to State and local governments have increased.

This trend, combined with limits on discretionary spending, has

significantly changed the budget environment for most agencies. At

the same time, Congress has made funds available for longer periods for many agencies, which reduces the pressure to spend funds

at the end of each year. In addition, systemic procurement reforms

have addressed most of the issues raised in the Subcommittee on

Oversight of Government Management’s report—although problems

persist in certain agencies and with some procurements.

Despite these changes, GAO reported that it is difficult to assess

the patterns of spending during the year because reported quarterly budget execution data is not reliable. According to GAO, without complete and timely information for oversight, the Office of

Management and Budget (OMB) and other decisionmakers do not

have an accurate assessment of the financial status of Federal programs during the year. Even at year-end, there are significant differences in three comparable sets of data that agencies report to

OMB and the Department of the Treasury. Although OMB officials

stated that a new system they have developed—in conjunction with

the Treasury Department—to collect year-end data starting in fiscal year 1999 should resolve or greatly alleviate the differences in

year-end budget data, more work is needed to assure compliance

with the requirement for quarterly data.

‘‘Slamming’’—The Unauthorized Switching of Long-Distance Telephone Service (S. Rept. 105–259, July 23, 1998)

Based on the findings and conclusions of the slamming investigation, the Subcommittee made the following recommendations:

1. Congress should enact legislation to remove the financial incentive to slam. Currently, companies engaging in slamming reap

financial benefits from the theft of telephone service from unsuspecting consumers. Congress should make sure that crime does

not pay.

2. Congress should enact legislation to eliminate deceptive methods of changing a consumer’s long distance service provider, such

as the so-called ‘‘welcome package.’’ A welcome package is material

received by a consumer in the mail that requires the consumer to

affirmatively reject the change in carrier; otherwise, the change

goes into effect after 2 weeks. The problem is that these welcome

packages look like junk mail, and many consumers simply discard

them without reading the material.

3. Congress should enact legislation to establish tougher fines to

deter slamming. Civil penalties must be tough enough so that they

are not considered just the cost of doing business.

4. Congress should enact legislation that establishes criminal

penalties for intentional and deliberate slamming. In addition to

civil penalties, criminal penalties are needed to deter intentional

slamming. Slamming is essentially stealing someone’s long distance

service, and it should be treated as such.

5. The FCC must be more consistent and aggressive in its enforcement efforts against companies that engage in slamming. The

FCC currently has the authority to impose fines on those who engage in repeated and intentional slamming and to revoke the operVerDate 11-MAY-2000 23:23 Jan 29, 2001 Jkt 089010 PO 00000 Frm 00083 Fmt 6659 Sfmt 6601 E:\HR\OC\SR001.XXX pfrm02 PsN: SR001
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ating authority of carriers in the most severe cases. However, the

use of this authority has been inconsistent, slow, and inadequate.

The FCC must be as aggressive as many of the States have been

in the enforcement of anti-slamming laws and regulations.

6. Congress should enact legislation that requires all carriers to

report slamming complaints. The FCC must have accurate and upto-date information to effectively investigate slamming complaints.

7. The FCC should review its licensing system for long distance

providers, particularly with respect to switchless resellers, to determine how to screen out fraudulent providers. While the FCC is following Congress’ direction to eliminate unnecessary requirements

that would limit competition in the long distance market, the FCC

must be able to enforce its orders and prevent fraudulent telephone

service providers from remaining in the telecommunication business.

Medicare HMO Institutional Payments: Improved HCFA Oversight,

More Recent Cost Data Could Reduce Overpayments (General

Accounting Office, September 1998)

Medicare spending for home health agencies as a proportion of

total Medicare outlays has been increasing steadily in recent years.

By 1996, in fact, this ratio had risen to $1 in every $11 from only

$1 in every $40 in 1989. To control this rapid cost growth, Congress

in 1997 required HCFA to implement a prospective payment

system that sets fixed, predetermined payments for home health

services. Since its implementation on October 1, 1997, however,

concerns have been raised about Medicare’s home health interim

payment system. Specifically, industry representatives have

claimed that the system’s new cost limits have caused some health

agencies to close or made it difficult for some beneficiaries—particularly those with high-cost needs—to obtain care. In response to

those concerns, Chairman Collins asked GAO to (1) identify the potential impact of the interim payment system on home health agencies; (2) determine the number, distribution, and effect of recent

home health agency closures; and (3) assess whether the interim

payment system could be affecting beneficiaries’ access to services,

particularly for beneficiaries who are expensive to serve.

The GAO report concluded that, during the time period studied,

the new system had no significant affect either upon the Medicare

beneficiaries’ receipt of services or upon the home health industry’s

ability to provide services—although beneficiaries requiring more

health care visits may find it more difficult to obtain care over an

extended period of time. GAO noted, however, that the new system’s affect upon any particular agency depends on several factors,

including that agency’s base-year costs, changes in the provision of

services since the base year, how recently it entered the market,

and its regional location.

SEC Enforcement: Responses to GAO and SEC Recommendations

Related to Microcap Fraud (General Accounting Office, September 1998)

In December 1997 and February 1998, Chairman Collins and

Ranking Minority Member John Glenn joined Representative John

D. Dingell, Ranking Minority Member of the House Committee on

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ported increases in microcap stock fraud. GAO’s subsequent report

detailed a number of actions taken by the Securities Exchange

Commission (SEC) and the various State regulatory organizations

(SROs) to enhance regulatory oversight of microcap stock firms and

help provide investors with additional protection against abusive

practices by such firms. GAO also detailed a number of steps that

had not yet been taken in this regard, including: (a) steps to prevent the migration of unscrupulous brokers from the securities industry to other financial services industries; (b) modernization of

the central registration database to improve oversight of problem

brokers and public access to broker disciplinary histories; (c) improving the SEC’s ability to identify trends in securities violations

revealed during its broker-dealer examinations; and (d) provision of

information on broker disciplinary histories before activity occurs

in an account. GAO concluded that these reforms would further enhance regulatory oversight and investor protection.

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