U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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

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

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

54–417 PDF 2010

S. HRG. 111–234 

NOMINATIONS OF: PETER M. ROGOFF, FRANCISCO 

J. SANCHEZ, RAPHAEL W. BOSTIC, SANDRA 

HENRIQUEZ, MERCEDES MA ́RQUEZ, AND 

MICHAEL S. BARR 

HEARING 

BEFORE THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

ON 

NOMINATIONS OF: 

PETER M. ROGOFF, OF VIRGINIA, TO BE FEDERAL TRANSIT ADMINISTRATOR, 

DEPARTMENT OF TRANSPORTATION

FRANCISCO J. SANCHEZ, OF FLORIDA, TO BE UNDER SECRETARY FOR

INTERNATIONAL TRADE, DEPARTMENT OF COMMERCE

RAPHAEL W. BOSTIC, OF CALIFORNIA, TO BE ASSISTANT SECRETARY FOR

POLICY DEVELOPMENT AND RESEARCH, DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

SANDRA HENRIQUEZ, OF MASSACHUSETTS, TO BE ASSISTANT SECRETARY FOR

PUBLIC AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT

MERCEDES MA ́ RQUEZ, OF CALIFORNIA, TO BE ASSISTANT SECRETARY FOR

COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

MICHAEL S. BARR, OF MICHIGAN, TO BE ASSISTANT SECRETARY FOR FINANCIAL

INSTITUTIONS, DEPARTMENT OF THE TREASURY

WEDNESDAY, MAY 13, 2009 

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

( 

Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html 
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

CHRISTOPHER J. DODD, Connecticut, Chairman 

TIM JOHNSON, South Dakota 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

EVAN BAYH, Indiana 

ROBERT MENENDEZ, New Jersey 

DANIEL K. AKAKA, Hawaii 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

HERB KOHL, Wisconsin 

MARK R. WARNER, Virginia 

JEFF MERKLEY, Oregon 

MICHAEL F. BENNET, Colorado 

RICHARD C. SHELBY, Alabama 

ROBERT F. BENNETT, Utah 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

MEL MARTINEZ, Florida 

BOB CORKER, Tennessee 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

MIKE JOHANNS, Nebraska 

KAY BAILEY HUTCHISON, Texas 

EDWARD SILVERMAN, Staff Director 

WILLIAM D. DUHNKE, Republican Staff Director 

MITCH WARREN, Senior Policy Advisor 

JONATHAN MILLER, Professional Staff Member 

JOE HEPP, Professional Staff Member 

NEAL ORRINGER, Professional Staff Member 

BETH COOPER, Professional Staff Member 

BONNIE GRAVES, FTA Fellow 

AMY WIDESTROM, APSA Fellow 

MARK OESTERLE, Republican Chief Counsel 

HESTER PEIRCE, Republican Counsel 

SHANNON HINES, Republican Professional Staff Member 

DAWN RATLIFF, Chief Clerk 

DEVIN HARTLEY, Hearing Clerk 

SHELVIN SIMMONS, IT Director 

JIM CROWELL, Editor 

(II)
(III) 

C O N T E N T S 

WEDNESDAY, MAY 13, 2009 

Page 

Opening statement of Senator Reed ...................................................................... 1 

Opening statements, comments, or prepared statements of: 

Senator Shelby .................................................................................................. 7 

Senator Bennett ................................................................................................ 8 

Senator Akaka .................................................................................................. 9 

Senator Martinez .............................................................................................. 11 

WITNESSES 

Bill Nelson, U.S. Senator from the State of Florida ............................................. 2 

Barney Frank, U.S. Representative from the State of Massachusetts ................ 2 

Adam B. Schiff, U.S. Representative fom the State of California ....................... 3 

Patty Murray, U.S. Senator from the State of Washington ................................. 4 

NOMINEES 

Peter M. Rogoff, of Virginia, to be Federal Transit Administrator, Department 

of Transportation ................................................................................................. 9 

Prepared statement .......................................................................................... 31 

Biographical sketch of nominee ....................................................................... 33 

Response to written questions of: 

Senator Dodd ............................................................................................. 96 

Senator Shelby ........................................................................................... 96 

Senator Bayh ............................................................................................. 99 

Senator Warner ......................................................................................... 100 

Francisco J. Sanchez, of Florida, to be Under Secretary for International 

Trade, Department of Commerce ........................................................................ 12 

Prepared statement .......................................................................................... 40 

Biographical sketch of nominee ....................................................................... 41 

Response to written questions of: 

Senator Dodd ............................................................................................. 101 

Senator Shelby ........................................................................................... 101 

Senator Brown ........................................................................................... 103 

Senator Crapo ............................................................................................ 104 

Raphael W. Bostic, of California, to be Assistant Secretary for Policy Development and Research, Department of Housing and Urban Development .......... 13 

Prepared statement .......................................................................................... 49 

Biographical sketch of nominee ....................................................................... 51 

Response to written questions of: 

Senator Shelby ........................................................................................... 105 

Sandra Henriquez, of Massachusetts, to be Assistant Secretary for Public 

and Indian Housing, Department of Housing and Urban Development ......... 15 

Prepared statement .......................................................................................... 62 

Biographical sketch of nominee ....................................................................... 63 

Response to written questions of: 

Senator Dodd ............................................................................................. 106 

Senator Shelby ........................................................................................... 107 
Page

IV 

Mercedes Ma ́ rquez, of California, to be Assistant Secretary for Community 

Planning and Development, Department of Housing and Urban Development ...................................................................................................................... 16 

Prepared statement .......................................................................................... 71 

Biographical sketch of nominee ....................................................................... 73 

Response to written questions of: 

Senator Dodd ............................................................................................. 108 

Senator Shelby ........................................................................................... 109 

Michael S. Barr, of Michigan, to be Assistant Secretary for Financial Institutions, Department of the Treasury ..................................................................... 18 

Prepared statement .......................................................................................... 83 

Biographical sketch of nominee ....................................................................... 85 

Response to written questions of: 

Senator Shelby ........................................................................................... 112 

Senator Kohl .............................................................................................. 114 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Letter submitted by the Congressional Hispanic Caucus .................................... 116 

Letter submitted by the Local Initiaives Support Corporation ........................... 117 

Letter submitted by the Watt Companies ............................................................. 118 

Letter submitted by the Enterprise Community Partners, Inc. .......................... 119 

Letter submitted by the Los Angeles Business Council ....................................... 120 

Letter submitted by MacFarlane Partners ............................................................ 122 

Letter submitted by the U.S. Conference of Mayors ............................................ 124 

Letter submitted by the California Community Foundaion ................................. 126 

Letter submitted by McCormack Baron Salazar ................................................... 128 
(1) 

NOMINATIONS OF: 

PETER M. ROGOFF, OF VIRGINIA, 

TO BE FEDERAL TRANSIT ADMINISTRATOR, 

DEPARTMENT OF TRANSPORTATION; 

FRANCISCO J. SANCHEZ, OF FLORIDA, 

TO BE UNDER SECRETARY FOR INTERNATIONAL 

TRADE, 

DEPARTMENT OF COMMERCE; 

RAPHAEL W. BOSTIC, OF CALIFORNIA, 

TO BE ASSISTANT SECRETARY FOR POLICY 

DEVELOPMENT AND RESEARCH, 

DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT; 

SANDRA HENRIQUEZ, OF MASSACHUSETTS, 

TO BE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN 

HOUSING, 

DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT; 

MERCEDES MA ́ RQUEZ, OF CALIFORNIA, 

TO BE ASSISTANT SECRETARY FOR COMMUNITY 

PLANNING AND DEVELOPMENT, 

DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT; 

MICHAEL S. BARR, OF MICHIGAN, 

TO BE ASSISTANT SECRETARY FOR FINANCIAL 

INSTITUTIONS, 

DEPARTMENT OF THE TREASURY 

WEDNESDAY, MAY 13, 2009 

U.S. SENATE, 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, 

Washington, DC. 

The Committee met at 2:06 p.m., in room SD–538, Dirksen Senate Office Building, Senator Jack Reed, presiding. 

OPENING STATEMENT OF SENATOR JACK REED 

Senator REED. The Committee will come to order. 
2 

We are meeting today in open session to consider the nomination 

of six key nominees for the Obama administration. On behalf of the 

Chairman, who is currently engaged on the Senate floor working 

on the credit card legislation, I would like to welcome my colleagues, distinguished guests, our nominees, and their families and 

friends to this important hearing. 

At this time I would like to recognize my colleague Senator Bill 

Nelson, who wants to introduce Mr. Francisco Sanchez. Senator 

Nelson. 

STATEMENT OF BILL NELSON, U.S. SENATOR FROM THE 

STATE OF FLORIDA 

Senator NELSON. Thank you, Mr. Chairman. 

Frank Sanchez has been a personal friend of mine for a number 

of years, and he is up for something that he is uniquely qualified, 

which is the Under Secretary of Commerce for International Trade. 

He has had all kinds of experience in the International Trade Administration as well as the Tourism Policy Council, the National 

Intellectual Property Council. He has been the Chief of Staff in the 

White House to the Special Envoy to Latin America. He is a Florida native. He is an accomplished negotiator. He has authored a 

book. He served our former colleague Senator Bob Graham, when 

he was Governor, in his administration as the first Director of the 

State’s Caribbean Basin Initiative, and he has been involved in 

consulting companies on projects involving complex transactions, 

labor-management negotiations, litigation settlement, and negotiation strategy. And so this brings a unique set of qualifications. He 

has even split the difference in Florida. He attended the University 

of Florida, but he graduated from Florida State. He does—for us 

Yale guys, we will not hold it against him. He has a Master’s degree from Harvard from the Kennedy School, and he has worked 

with the National Security Council, the State Department, the U.S. 

Trade Representative. 

You could not have a better candidate for this very important job 

of Under Secretary of Commerce, and on top of that, he is a good 

guy, and he is a personal friend of mine. Thank you for letting me 

make these comments about him. 

Senator REED. Thank you, Senator Nelson. 

Now let me recognize Congressman Barney Frank to introduce 

Sandra Henriquez. And, by the way, Senator Kerry has a something for the record, Ms. Henriquez. 

STATEMENT OF BARNEY FRANK, U.S. REPRESENTATIVE FROM 

THE STATE OF MASSACHUSETTS 

Mr. FRANK. Thank you, Mr. Chairman. I am very pleased to be 

able to introduce Sandra Henriquez on her behalf, but more on behalf of some of the most, I think, unfairly treated people in this 

country, and those are the residents of public housing. This country 

created public housing. You know, sometimes the residents are 

criticized because of decisions that were made not with their participation about what kind of housing they should live in. And we 

know now, better than we used to, how to build decent, livable, affordable housing, but we are still in some cases, frankly, stuck with 

stuff that was not built well in terms of social concerns. 
3 

Sandra Henriquez has run one of the largest housing authorities 

in the country in the city of Boston. It is a housing authority population that is diverse in terms of age, in terms of ethnicity, and in 

terms of race. It has been a very significant part of Boston for some 

time. It has been historically a troubled institution. She has done 

an excellent job, and I am very pleased that the President has selected someone to run the Department of Public and Indian Housing who has a demonstrated record of dealing with sensibly, compassionately, and efficiently with the residents of public housing. 

I should note that part of her title is ‘‘Indian Housing,’’ and there 

were probably no people in America as a whole with greater housing problems than the Native American population. People who 

have been out, for instance, to the Navajo reservation have seen a 

very serious problem. 

I am very proud that in recent years on the Committee on Financial Services, which is the corresponding Committee for this Committee, we have worked hard and you, Mr. Chairman, Senator 

Reed, have been a leader in this. We have been paying attention 

to the needs of the Native American population in housing, which 

has long been neglected. 

So Sandra Henriquez is very well qualified. She is a thoughtful, 

intelligent, compassionate, and successful administrator. And I am 

very hopeful that she will be promptly confirmed. 

Now, I do understand there are different rules in the House and 

the Senate, and I am prepared to learn that she was confirmed on 

the proviso that she carry a concealed weapon. I understand that 

the Senate might decide to add that, as they have from time to 

time. That is not my decision to make. I can only urge that this 

very, very able woman who has done such a good job in administering public housing of Boston be confirmed. 

Senator REED. Thank you, Chairman Frank. 

Now I would like to recognize Congressman Schiff to make an introduction of Raphael Bostic. Congressman. 

STATEMENT OF ADAM B. SCHIFF, U.S. REPRESENTATIVE 

FROM THE STATE OF CALIFORNIA 

Mr. SCHIFF. Thank you, Mr. Chairman, Senator Reed, and Ranking Member Shelby. I very much appreciate the opportunity to appear before your Committee again, and thank you for allowing me 

to introduce the President’s nominee for Assistant Secretary of the 

Office of Policy Development and Research of the Department of 

Housing and Urban Development, Raphael Bostic. 

Dr. Bostic is a proud resident of Pasadena, and we share a common bond as graduates of the same alma maters, Stanford and 

Harvard, although Dr. Bostic unfortunately did it in the wrong 

order, but he can be forgiven for that. He has dedicated his career 

to understanding housing markets and the issue of homeowner. He 

has extensively studied the sectors that will be critical to our economic recovery, credit markets, and home financing, and understands well how they affect the American household. 

His expertise in these most pressing and complex issues of our 

time make Dr. Bostic an ideal candidate for this position. As Assistant Secretary, he will be the principal adviser to the Secretary 

on overall departmental policy and will be responsible for main-
4 

taining current information on housing needs, market conditions, 

and existing programs. 

Dr. Bostic is currently a professor in USC’s School of Policy, 

Planning, and Development, and teaches courses in affordable 

housing development, urban economics, real estate finance, policy 

and planning analysis, and public finance. He led a distinguished 

career prior to his years at USC, spending 6 years on the staff at 

the Federal Reserve Board of Governors where he was awarded a 

Special Achievement Award for his work. He also served as a Special Assistant to the Assistant Secretary of Policy Development and 

Research at HUD, providing him with crucial experience in the executive branch which will no doubt serve him well in his new post. 

His most recent research examines how mortgage finance institutions such as Fannie Mae and Freddie Mac have influenced the 

flow of mortgage credit through lenders that originate high-cost or 

subprime loans through the Federal Housing Administration Insurance Program. He has also studied the role of the private label secondary market in facilitating the flow of capital to subprime and 

possibly predatory loans. 

His work has been published in a number of top peer-reviewed 

journals, including Real Estate Economics, Housing Policy Debate, 

and the Journal of Banking and Finance. Dr. Bostic is an active 

contributor to numerous professional and industry organizations 

and holds leadership positions in the American Real Estate and 

Urban Economics Association, the Association of Public Policy and 

Management, and recently served on a National Academies Committee charged with evaluating the research plan of the Department of Housing and Urban Development. 

Given his background, he was an ideal panelist for an economic 

roundtable that I held in Pasadena nearly a year ago after the collapse of IndyMac, which was headquartered in my district. With a 

tightening credit market and increasing foreclosures, residents in 

my district, as well as around the country, were looking for answers and advice about how they could stay afloat, and Dr. Bostic 

was and has been a clear and well-informed voice during these difficult times. 

Many Americans are still struggling with these questions today, 

and I am confident that with Dr. Bostic advising the Secretary on 

housing policy, the Department will make the right policy decisions 

to help families around the country. 

I urge the Committee to approve his nomination, and I thank 

you again, Senator, for allowing me to appear today. 

Senator REED. Thank you very much, Congressman. 

And now let me recognize Senator Patty Murray of Washington 

State. Senator Murray. 

STATEMENT OF PATTY MURRAY, U.S. SENATOR FROM THE 

STATE OF WASHINGTON 

Senator MURRAY. Well, thank you very much, Mr. Chairman and 

Senator Shelby. I am very pleased to be here today to have the opportunity to introduce Peter Rogoff as the President’s nominee to 

be the next Administrator of the Federal Transit Administration. 

I do want to welcome Peter’s wife, Dena Morris, who is here with 
5 

us, as well as their two children, Lucy and Niles, who are behaving 

very well behind you, Peter. Don’t worry. 

Peter and his wife are no strangers to public service, and I really 

want to thank them personally for both of their commitment and 

congratulate them on all they have accomplished. And I would just 

tell Lucy and Niles that I understand that confirmation hearings 

actually get you extra credit in school, so thank you for being here. 

For members of the Senate Appropriations Committee, Peter is 

a very familiar face. He has served on the Appropriations Committee staff now for the last 22 years, and he has been the Committee’s senior transportation adviser for the majority of those 

years. For the past 9 years, as I have served as either Chairman 

or Ranking Member of the Transportation Appropriations Subcommittee, I have had the opportunity to work very closely with 

Peter. He has been a trust adviser to me and a dedicated public 

servant to the constituents of both my home State of Washington 

and those of every member of the Subcommittee. I know that Peter’s drive and knowledge and experience will be an outstanding 

asset to President Obama and Secretary LaHood’s team. 

Peter and I have worked together through many challenges over 

the years, none greater than the events of September 11th and the 

transportation security issues that we were confronted with after 

that. As members of this Committee know well, those efforts were 

not just limited to aviation security, but they also included initiatives to strengthen security in passenger rail transit systems and 

our ports and all the systems that connect them. 

During those very difficult times, Peter’s understanding of our 

transportation safety systems was fully evident. It is a knowledge 

that comes with experience, and not just the kind of experience you 

get from studying policy at your desk, although Peter does do a lot 

of that, but it is the kind of experience you get from traveling out 

to accident sites, talking with inspectors, meeting with families, 

and working hands-on to ensure that we are taking steps to ensure 

that accidents are not repeated. 

In the time that I have worked with Peter, he has regularly traveled across the country to participate in aviation, rail, and ship inspections, and he has voluntarily gone to many accident sites. The 

expertise gained from those experiences has served this Congress 

and this country well in some very critical situations. In fact, I still 

remember—and I know Peter does as well—an evening just about 

2 years ago when we all watched in horror as the I–35 bridge collapsed in Minneapolis. Immediately after that tragedy, I dispatched 

Peter to accompany Senator Klobuchar to the scene because I knew 

that he could help her identify the core issues and how the Federal 

Government could help. 

Now, I know that as FTA Administrator, people would face a set 

of wide-ranging challenges, but I also know that he has the transit 

know-how to hit the ground running. From my work with Peter, I 

know that he believes in the larger agenda to expand transit ridership and reduce greenhouse gas emissions. I know that he understands how important it is to move projects forward rapidly in a 

manner that is efficient and productive. And I know that he has 

the experience to address our biggest challenge—transportation finance. 
6 

As all of you know, the outlook for the Highway Trust Fund and 

its mass transit account is truly dismal. These financing challenges 

threaten to undermine all that Congress and the President hope to 

accomplish for our State and our communities. To this central 

problem, Peter Rogoff will bring over two decades of working 

knowledge on financing transit and transportation projects of all 

kinds. 

So, Mr. Chairman, while his nomination represents a very big 

loss for our Appropriations Committee and my Appropriations Subcommittee, I respect and I commend President Obama’s decision to 

put Peter’s expertise to work on addressing our country’s transit 

future. It is without any reservation that I commend to you the 

nomination of Peter Rogoff to be our next Federal Transit Administrator. 

All of us that care about public transportation, a clean environment, and the mobility needs of our neediest citizens are going to 

be very proud to have Peter Rogoff in this position. 

Thank you very much, Mr. Chairman. 

Senator REED. Thank you very much, Senator Murray. 

Let me make brief comments about the nominee before I recognize Senator Shelby for his opening comments, and there may be 

other colleagues that will join us for introductions, and I will try 

to work them in as rapidly as possible. 

First, beginning with Peter Rogoff, the President’s nominee to 

lead the Federal Transit Administration, we all recognize that 

strong Federal leadership in transportation is one of the keys to 

getting our economy back on track. Now, a bold, new commitment 

to public transportation is needed to reduce congestion on our 

roads, to address climate change, and to reduce our dependence on 

foreign oil. And let me say I second with enthusiasm all of the commendations that Senator Murray made, and thank you, as a member of the Appropriations Committee, for your assistance and help, 

Peter, and we look forward to your service on the Federal Transit 

Administration. 

Our next nominee is Mr. Francisco ‘‘Frank’’ Sanchez. Senator 

Nelson described your stellar career, Mr. Sanchez. You have been 

nominated for Under Secretary of Commerce for International 

Trade. As Under Secretary, the role will play a particularly critical 

aspect in reviving America’s struggling economy. One out of every 

10 American jobs depends on exports, which in 2008 generated $1.8 

trillion in U.S. business revenue. So this is an extremely important 

job to match your public service and your talents. 

We also have three nominees for the Department of Housing and 

Urban Development who are before us today. Like never before, we 

need an engaged, aggressive, and well-run Department of Housing 

and Urban Development with leadership that is confident in its 

mission and unafraid to act. As President Obama has himself said, 

‘‘HUD’s role has never been more important.’’ 

Our first HUD nominee is Mr. Raphael Bostic, who was introduced by Congressman Schiff. He has been nominated to be the Assistant Secretary for the Office of Policy Development and Research. Mr. Bostic in such a role would be responsible for maintaining current information on housing needs, market conditions, and 
7 

existing programs, as well as conducting research on priority housing and community development issues. 

Our next nominee is Ms. Sandra Henriquez, who was introduced 

by Congressman Frank. She has been nominated to be the Assistant Secretary for Public and Indian Housing. In fiscal year 2009, 

this office will be expected to administer nearly $24 billion in targeted housing assistance programs serving low, very low, and extremely low income families and individuals. These include public 

housing and Section 8 tenant-based rental assistance programs, 

which serve over 3 million families, seniors, and persons with disabilities. These housing programs are carried out by approximately 

1,600 staff in headquarters and field positions throughout the country. This is an extraordinarily important and influential post. 

Our final HUD nominee is Ms. Mercedes Ma ́ rquez, who has been 

nominated to be Assistant Secretary for Community Planning and 

Development. This division administers nearly $8 billion in community, economic, and affordable housing development programs in 

the fiscal year 2009 budget. In addition, it currently administers $6 

billion in neighborhood stabilization program funding, helping communities buy and rehabilitate abandoned and foreclosed properties. 

These programs are carried out by approximately 800 staff in headquarters and field positions. 

Our final nominee today will be Michael Barr, who has been 

nominated to be the Assistant Secretary for financial Institutions 

at the Department of Treasury. In this position, Mr. Barr will be 

responsible for working on administration policy regarding the regulation of banks, credit unions, Government-sponsored enterprises, 

consumer protection, community reinvestment, Federal deposit insurance, and terrorism risk insurance. Quite a portfolio. He will be 

uniquely situated to work with this Committee to achieve its goals 

of modernizing the United States financial institutions, a task that 

I know the Chairman and Senator Shelby are undertaking at this 

moment. 

Mr. Barr is highly qualified for this position. He currently is 

teaching at the University of Michigan. Previously he served as 

Treasury Secretary Robert Rubin’s Special Assistant as well as 

Special Adviser to President Clinton. Mr. Barr also served as a law 

clerk to U.S. Supreme Court Justice David H. Souter and then-District Court Judge Pierre N. Leval of the Southern District of New 

York. Mr. Barr received his J.D. from Yale Law School; a Master 

of Philosophy in International Relations from Magdalen College, 

Oxford University; as a Rhodes Scholar; and his B.A. summa curriculum laude with honors in history from Yale University. 

Again, let me welcome all the nominees, and you will have an 

opportunity when you are recognized to also introduce your families. 

Now let me turn to the Ranking Member, Senator Shelby, for his 

statement. Senator Shelby. 

STATEMENT OF SENATOR RICHARD C. SHELBY 

Senator SHELBY. Thank you, Mr. Chairman. 

First of all, I want to welcome all of the nominees. I am sure you 

have been well vetted and are eminently qualified and ready to go 
8 

to work. And I hope that Senator Dodd, our Chairman, will move 

these nominees as soon as possible. 

I want to say a special word here about Peter Rogoff. A lot has 

been said about him, but I had the opportunity to work with him 

for a long time on the Appropriations Committee. As we used to 

say, we worked for Peter. 

[Laughter.] 

Senator SHELBY. And we did not mind that because he had great 

work skills, great leadership skills, and, Peter, we are happy that 

the President has seen fit to nominate you to this very important 

position at the Department of Transportation. 

We look forward to this year working on the Banking Committee. 

As you well know, we have a piece of the surface transportation, 

transit, and other things, and you will bring a lot of knowledge to 

this position, and I believe you will bring a lot of integrity, too. So 

I look forward to supporting you especially and supporting all of 

you as soon as we can. 

If you will forgive me, Senator Dodd and I are holding—we are 

trying to move a credit card bill on the floor, and so I will leave 

it up to you, but I will support your nomination. 

Senator REED. Thank you very much. 

We have been informed that Senator Martinez would very much 

like to be here, Mr. Sanchez, and when he arrives, we will recognize him to say a few words. I think also Congressman Becerra 

would like to say a few words, Ms. Ma ́ rquez, and when he arrives, 

we will also recognize him. 

But, first, I have an obligation to perform. If you would please 

stand, and I will administer and oath, and simply respond, ‘‘I do,’’ 

after each phrase. Please raise your right hands. Do you swear or 

affirm that the testimony you are about to give is the truth, the 

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

Mr. ROGOFF. I do. 

Mr. SANCHEZ. I do. 

Mr. BOSTIC. I do. 

Ms. HENRIQUEZ. I do. 

Ms. MA ́ RQUEZ. I do. 

Mr. BARR. I do. 

Senator REED. Do you agree to appear and testify before any 

duly constituted Committee of the Senate? 

Mr. ROGOFF. I do. 

Mr. SANCHEZ. I do. 

Mr. BOSTIC. I do. 

Ms. HENRIQUEZ. I do. 

Ms. MA ́ RQUEZ. I do. 

Mr. BARR. I do. 

Senator REED. Thank you very much. Please be seated. 

Now let me recognize—do you have any comments? Yes, let me 

recognize Senator Bennett. Please. 

STATEMENT OF SENATOR ROBERT F. BENNETT 

Senator BENNETT. Thank you, Mr. Chairman. I do not want to 

prolong this, and I would love to say something good about all the 

rest of you, but I do not know any of you yet. 

[Laughter.] 
9 

Senator BENNETT. That does not usually stop Senators, but I 

think under these circumstances it will. But I want to again add 

to the chorus of comment and praise for Peter Rogoff and the work 

that he has done as a member of the Appropriations Committee. 

Peter, I know you have been to Utah. You understand the transit 

issues in Utah, and we look forward to working with you. But I did 

not want to let this occasion go by without adding my voice to those 

that are saying we are sorry to lose you, but good luck and all the 

best in your new assignment. 

Thank you. 

Senator REED. Thank you, Senator Bennett. 

Senator Akaka, would you like to say something at this time? 

STATEMENT OF SENATOR DANIEL K. AKAKA 

Senator AKAKA. Mr. Chairman, thank you for having this hearing. As you said, we are trying to move as quickly as we can to confirm people so that we can all get back to work and begin to do 

some things for our country. And so I look forward to this hearing, 

Mr. Chairman, and I am glad to participate with you. 

Thank you. 

Senator REED. Thank you very much, Senator Akaka. 

Let me now review Mr. Rogoff. Again, Mr. Rogoff, if you would 

like to introduce your family or friends that are here, please take 

this opportunity, and then your statement. Could you please turn 

on your microphone, Peter? 

Mr. ROGOFF. I would like to introduce them, and thank you, Senator Bennett and Senator Reed, for your kind comments. 

I would like to introduce my wife, Dena Morris; my son, Niles 

Rogoff; and my daughter, Lucille Rogoff. And I especially want to 

recognize the person who really makes everything that the four of 

us do possible—our outstanding nanny and great friend, Murlene 

Dowling. 

STATEMENT OF PETER M. ROGOFF, OF VIRGINIA, TO BE FEDERAL TRANSIT ADMINISTRATOR, DEPARTMENT OF TRANSPORTATION 

Mr. ROGOFF. Senator Reed, Ranking Member Shelby, Senator 

Bennett, and members of the Committee, I want to thank you for 

allowing me this opportunity to present myself as President 

Obama’s nominee to head the Federal Transit Administration. 

Having served on the staff of a Senate Committee for 22 years, I 

know that the confirmation process is one of the most critically important constitutional responsibilities of the Senate, so I come to 

this hearing with humility and a great respect for the process. 

As I appear before you today, I believe public transportation 

faces both remarkable opportunities and serious challenges. The 

opportunities begin with the fact that we have a President who recognizes the central importance of our transit systems to our quality 

of life and to the quality of our environment. He has spoken of the 

need to invest adequately and invest efficiently, and he has 

stressed repeatedly the role that public transportation must play in 

reducing pollution, including greenhouse gas emissions, and moving toward energy independence by diminishing our reliance on foreign oil. 
10 

In addition, the American people are creating opportunities by 

utilizing transit services in record numbers and by demanding 

more. Transit ridership rose to a modern record in 2008, more than 

10 billion trips. What may be more remarkable is that ridership 

has remained high even as record gas prices have dropped back 

down. 

Many families have sold their second car, or their only car, either 

as a matter of convenience or to cope with the economic downturn. 

Many other Americans, weary of sitting in traffic jams, have just 

boarded the train or boarded buses using designated bus lanes. 

Finally, there are great opportunities because the administration 

and Congress are about to rewrite all our surface transportation 

programs, as Senator Shelby pointed out. In fact, the upcoming authorization process presents an opportunity like no other to retool 

our public transportation programs and refocus them on our most 

critical national goals. 

But as this Committee is well aware, we also face extraordinary 

challenges. First and foremost is the task of financing our efforts 

to achieve these goals. The mass transit account of the Federal 

Highway Trust Fund is on a path to insolvency. While the transit 

account is in less immediate danger than the larger highway account, the balances in both are falling at a rate that will undermine their ability to support current obligations. 

The financing challenge calls for tough choices, so it is all the 

more important that we fulfill President Obama’s commitment to 

spend every transit dollar efficiently and on the worthiest projects. 

Against this backdrop of both challenges and opportunities, I am 

especially honored that President Obama has nominated me to 

serve as his Federal Transit Administrator. I very much look forward to working with this Committee, with Secretary LaHood and 

his outstanding team, to both tackle the pressing challenges and 

capitalize on the extraordinary opportunities. 

As I mentioned, the financing dilemma is difficult, but with more 

than two decades of experience on the Appropriations Committee 

staff specializing in transportation finance, I feel confident that I 

could help the Secretary and this Committee identify a more stable 

and sustainable funding regime. 

Secretary LaHood has made clear his intention to eliminate the 

stovepipes within DOT. I think that is something that people have 

been trying to do since Senator Bennett served in the DOT. He will 

be asking his agency leaders to work toward a seamless system 

that moves people and freight efficiently between modes of transportation, and I believe I can help. 

My experience in infrastructure investment programs goes well 

beyond mass transit. It includes highway, aviation, inner-city rail, 

and maritime programs. If we are going to succeed in developing 

truly seamless networks, then expanded cooperation and joint investments are going to be key. 

Secretary LaHood and HUD Secretary Donovan are committed to 

fostering livable and sustainable communities through the coordinated efforts of their Departments, and let me just point out how 

apt I think it is that I am testifying with a number of HUD nominees, because there really is quite a lot of overlap in the challenges 

we are trying to address. 
11 

For the last 4 years, I have had the joint responsibility overseeing both the Transportation and HUD budgets for the Appropriations Committee. Knowing the HUD budget as I do, and witnessing Secretary Donovan’s impressive efforts to transform HUD, 

I am particularly enthusiastic about working with him and Secretary LaHood to promote sustainability. 

Finally, I want to welcome the opportunity to be this administration’s advocate for mass transit. I plan to be a very public advocate 

in my visits with policymakers in communities across the Nation. 

But just as importantly, I plan to be a forceful advocate in the less 

public debates that go on within the administration. We must create new and better transit options in both urban and rural America, but especially during a period of economic uncertainty and recovery, a pro-transit agenda must include protecting and improving 

transit services for those for whom mass transit is the only option. 

If confirmed, this Committee can count on me to be a strong and 

vocal partner in advancing this agenda. I thank you again for this 

opportunity and the kind words of the members of the Committee. 

I look forward to answering any questions you may have. 

Senator REED. Thank you, Mr. Rogoff. 

Senator Martinez has arrived, with perfect timing, to say a few 

introductory words about Mr. Sanchez. Senator Martinez. 

STATEMENT OF SENATOR MEL MARTINEZ 

Senator MARTINEZ. Thank you, Senator Reed. I appreciate that 

very, very much. 

I want to take a moment—and I know Senator Nelson was here 

earlier—to introduce to the Committee Frank Sanchez, a wonderful 

Floridian, a man who has exercised a great deal of leadership in 

the area of trade, not only nationally but also in the State of Florida, and also a proud alumni of Florida State University, for which 

I am very proud to share that with him. 

But in addition to his fine academic record, which I know Senator Nelson probably described, I find Mr. Sanchez to be someone 

who is going to make an excellent trade person for our country because of his past work not only in the private sector but also in 

Government. He had a great deal to do with negotiated the Open 

Skies Agreement, which was approved during the Clinton administration, which is so important to our Nation’s airlines and to others 

around the world. And it is about trading with others. At the end 

of the day, that can create so much prosperity for our country. 

So I have had the opportunity to talk with Frank about his commitment and his understanding of the importance of trade as we 

go forward in so many of these areas that are today pending—Colombia, Panama, and other issues that you know so well. 

So, Mr. Chairman, I just wanted to add my endorsement and my 

introduction, and I look forward to a swift confirmation of Mr. 

Sanchez, a great Floridian. 

Senator REED. Thank you very much, Senator Martinez—another 

great Floridian, truly. Thank you. 

Mr. Sanchez, if you would like to introduce family and friends, 

please do so, and then we would be eager to hear your statement. 
12 

Mr. SANCHEZ. Thank you, Senator Reed. I wish to introduce my 

cousin, Kim Sanchez, who has the awesome responsibility of representing the entire Sanchez clan today. 

[Laughter.] 

STATEMENT OF FRANCISCO J. SANCHEZ, OF FLORIDA, TO BE 

UNDER SECRETARY FOR INTERNATIONAL TRADE, DEPARTMENT OF COMMERCE 

Mr. SANCHEZ. It truly is an honor to be before you today with 

this distinguished panel, and I should say I hope that some of the 

good feelings that Mr. Rogoff has engendered with this Committee 

will be able to rub off on me. 

I want to thank Senator Martinez and Senator Nelson both for 

making a special effort to be here and to introduce me. Thank you 

very, very much. 

I would respectfully ask the Committee that my full statement 

be submitted for the record. 

There is no greater call than that of service to one’s country, and 

I am truly honored by President Obama’s nomination of me to 

serve as Under Secretary of Commerce for International Trade. I 

am humbled by the trust that President Obama and Secretary 

Locke are placing in me, and I am cognizant of the serious responsibilities that accompany this confidence. 

If confirmed, I look forward to working for them and with you 

in advancing our Nation’s economic well-being and ensuring that 

all Americans benefit from fair and free trade. 

I would like to take just one moment to take someone who is not 

here—actually, two—my mother and my late father for their support and encouragement. I would not be here if it were not for their 

consistent and constant love and commitment to my success, so I 

want to thank them. 

As Secretary Locke has said, the role of the Department of Commerce is to be the engine of innovation, of job growth, and of economic renewal. The International Trade Administration supports 

these efforts by strengthening the competitiveness of U.S. industry, 

promoting trade and investment, and ensuring fair trade in compliance with our trade laws and agreements. This mission is critical 

to enhancing America’s global competitiveness and expanding commercial opportunities for American manufacturers and service 

workers throughout the world. 

When U.S. business seeks to promote their goods and services in 

overseas markets, it is the International Trade Administration’s 

programs that lead the way. In short, the agency helps America’s 

firms and workers navigate through the often complicated and unpredictable waters of foreign trade. 

If confirmed, I look forward to working closely with this Committee to support American innovation and entrepreneurship and 

open global markets for American-made goods and services. In so 

doing, we can play a vital role in creating new jobs and economic 

growth here at home. 

I thank you for your consideration. 

Senator REED. Thank you very much, Mr. Sanchez. 

Mr. Bostic, again, if you have family or friends, feel free to introduce them, and then your statement. 
13 

Mr. BOSTIC. Sure. I would like to introduce my parents, my 

mother and father, Viola and Raphael, who are here; as well as my 

sister, Ebony, who is making her own sacrifice as she is letting me 

use one of her rooms as my base as I am here in Washington. So 

thank you, Ebony. 

I would also like to acknowledge two people who were unable to 

be here: my partner, Jeff Taylor, who is back in California; and my 

aunt, Patricia Williams, who is in New York. 

STATEMENT OF RAPHAEL W. BOSTIC, OF CALIFORNIA, TO BE 

ASSISTANT SECRETARY FOR POLICY DEVELOPMENT AND 

RESEARCH, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Mr. BOSTIC. Chairman Reed and members of the Committee, I 

am honored and humbled to appear before you today as you consider my nomination to serve as the Assistant Secretary for Policy 

Development and Research at the U.S. Department of Housing and 

Urban Development. Before going further, in addition to my family, 

I would like to acknowledge a few others who have been instrumental in my life, particularly mentors Glenn Canner, John 

Shoven, Roger Noll, Susan Wachter, and Stuart Gabriel. 

The time we find ourselves in is remarkable, both because of its 

gravity and its origins. By many measures the economy has not 

performed so poorly since the Great Depression of the 1930s, and 

for perhaps the first time in the Nation’s history, housing has been 

at the root of this macroeconomic trouble. This reality means that 

a deep understanding of housing markets is critical, and evidence 

on what does and does not work in these markets will be essential 

for creating a new market structure that endures and correct the 

weaknesses that help to create the current troubles. 

Secretary Donovan recognizes this and, in his public and private 

statements, has already placed a considerable emphasis on the importance of collecting and using data to make informed decisions. 

If confirmed to my position, I will work hard to see the Secretary’s 

vision is pursued and achieved. In this way, I hope to contribute 

to a transformation of the Department into an efficient, informed 

leader of policy on issues associated with housing and urban development. 

My background, including significant work in academics, Government, and community development, provides me with assets that 

will allow me to help the Office of Policy Development and Research increase its efficacy and effectiveness. A key goal is for 

PD&R efforts to contribute to a deeper and more meaningful understanding of the issues facing our housing and urban markets 

and communities. 

From an academic perspective, my research has given me knowledge and insights about both housing and urban development, and 

this, coupled with my continued and intensive interaction with 

other academics scholars will allow me to promote the implementation of evidence-based policy with the Secretary and the Department’s program offices. In addition, my training and perspectives 

gained as an academic researcher have given me skills that will 

help ensure that research and program evaluations produced or 

funded by PD&R are relevant, timely, and of the highest quality. 
14 

Through my career to date, I have interacted extensively with all 

the key HUD constituencies, and so I am able to add value and 

perspective to HUD’s research efforts, as well as its policymaking 

and oversight. I understand housing and housing finance through 

my research and my work at the Federal Reserve Board. I know 

the nuts and bolts of affordable housing development as well as the 

difficulties and opportunities it affords for lower-income and minority households through my teaching them at USC, service as a 

board member of a local nonprofit housing developer, and my research. 

My work with a local community development organization in 

East Palo Alto and other research I have done have provided insights as to the challenges of broad-based urban and community 

development. My role as Director of a real estate development program required my engagement of all aspects of the development 

process and forced me to engage and understand how design, law, 

economics, finance and construction all interact. Of particular significance, the exposure to construction highlighted the key role that 

engineering that technology can play in helping to make housing 

affordable and high quality. 

One of Secretary Donovan’s top priorities is to improve the culture of the Department as an institution, and I pledge to further 

this goal for PD&R. This transformation will require significant organizational management, and my experiences at USC over the 

past several years have prepared me for this challenge. I aim to 

provide an environment that allows PD&R to perform and produce 

at high levels as I believe the office has tremendous potential that 

has lagged in terms of its productivity and prominence. 

Finally, I come to you today with a clear understanding of the 

opportunities and obstacles that this position presents. Through my 

work at the Federal Reserve Board and HUD, I have seen how policy is created at the Federal level and am familiar with the dynamics associated with operating at PD&R. This knowledge base will 

facilitate my navigation of the policymaking milieu and should lead 

to effective decisionmaking and promotion of ideas that will benefit 

the American people. 

In conclusion, I am very excited to serve the country at this pivotal moment in its history. I am eager to support the Secretary’s 

efforts and work with the members of the Committee to help heal 

the Nation’s housing markets and promote the flourishing of its 

urban areas. 

Thank you for giving me the opportunity to speak with you 

today, and I welcome any questions you might have. 

Senator REED. Thank you, Mr. Bostic. 

And now Ms. Henriquez. 

Ms. HENRIQUEZ. Thank you, Senator Reed. I would like to introduce—with me today are my father, Howard Brooks; my brother, 

Bruce; my daughter, Sandra Elena; my son, Carlos; and a colleague 

from the Housing Authority, DaVonne Bolton. My other son remains in Boston, but I am certain that he is watching this proceeding, as are my colleagues at the Housing Authority. 
15 

STATEMENT OF SANDRA HENRIQUEZ, OF MASSACHUSETTS, 

TO BE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN 

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Ms. HENRIQUEZ. Thank you, Mr. Chairman and Senator Shelby 

and distinguished members of the Committee, for considering my 

nomination and the opportunity to appear before you this afternoon. I am truly honored and humbled to have had Secretary 

Donovan recommend that President Obama nominate me as the 

Assistant Secretary for Public and Indian Housing. I want to thank 

Congressman Frank for introducing me here today and for Senator 

Kerry’s written statement for the record. 

The most significant portion of my more than 30-year career has 

been in real estate property management of affordable housing, 

both the private and the public sectors of the industry. I quickly 

turned to residential real estate because I was more interested in 

the people who lived there than the commercial side. I believe that 

housing is a right and that the provision of safe, decent, well-caredfor housing for low and very low income families and individuals 

lays the foundation to change lives. If a family’s shelter is secure, 

then that household can begin to work on other aspects of their 

lives that many of us take for granted, such as child care, getting 

a job, finding a better one, education for themselves or for their 

children. 

For the past 13 years, I have been the Administrator and the 

Chief Executive Officer of the Boston Housing Authority. As the 

largest single landlord in the city of Boston and one of the largest 

public housing authorities in the Nation, the BHA provides 11,500 

public housing units and 13,000 rental assistance subsidies together housing 10 percent of the city’s population. With an 850-person workforce and program budgets exceeding $280 million annually, I have led an outstanding team to reform the housing authority from mere troubled status to that of high performer in its public 

housing and in its Section 8 portfolio. 

Following real estate industry practices and policies, the BHA 

moved to asset management models before Congress and HUD required it. We embraced the basics, and vacancy rates dropped from 

15 percent to 2 to 3 percent across the portfolio. Non-emergency 

work order completion times dropped from 120 days to 15, and they 

continue to fall, and rent collections are up. 

At the same time, we moved from being labeled by HUD as ‘‘systemically discriminatory’’ to a national model of fair housing. We 

partnered with sister city agencies, local community development 

corporations, and other nonprofit housing providers. To increase 

the production of affordable rental housing, we created housing 

strategies and programs to house the homeless, and we introduced 

green principles into our business practices and into our building 

maintenance and construction operations. 

The Boston Housing Authority has used the HOPE VI program 

to redevelop three properties, with a fourth just beginning. In addition, we created 62 new first-time homebuyers, none of whom are 

in default or foreclosure. We have used mixed financing to develop 

two other properties, and when redevelopment is taken all to-
16 

gether, they total almost $1 billion. For every Federal or State dollar, we leveraged $8 more. 

We have used Energy Performance Contracting to retrofit many 

of our outdated heating plants, making them state-of-the-art, more 

efficient, less costly to operate, and creating better living environments for our residents. In addition, we have used available HUD 

programs to use a portion of our ongoing capital allocation to leverage bond financing, to expand ongoing improvements to the physical plant. Coupled with the recent American Recovery and Reinvestment Act funding, this totals more than $110 million. 

My housing experience has taught me that, regardless of the 

price point, maintaining and improving properties is essential to 

those who live there. Preservation and improvement of the 1.2 million units of public housing stock, the creation of more affordable 

rental housing, as well as the continued ability to support families 

and individuals through rental assistance is essential to realizing 

the dream of millions of our citizens. 

Secretary Shaun Donovan’s commitment to accountability and 

transparency and his leadership at HUD provides us with the opportunity to do our best work on behalf of those who benefit from 

HUD’s programs. If I am confirmed, I will be focused on and committed to learning more about Native American housing as well as 

public housing. I am grateful that President Obama has nominated 

me, and I want to thank each of you this afternoon for your consideration of my nomination. If confirmed, I look forward to serving 

the Nation, especially those who live and work in public and Native 

American housing. 

Thank you. 

Senator REED. Thank you very much. 

Ms. MA ́ RQUEZ. Good afternoon. There are many friends here 

today, and I thank them for traveling so very far, including from 

as far away as Hawaii today. But I also want to take the opportunity to introduce my partner of 21 years, Mirta Ocana. 

Senator REED. Hello. 

STATEMENT OF MERCEDES MA ́ RQUEZ, OF CALIFORNIA, TO BE 

ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 

DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Ms. MA ́ RQUEZ. It is my pleasure to be here before you today, Mr. 

Chairman, members of the Committee. I am honored to have been 

nominated by President Obama to be the Assistant Secretary for 

Community Planning and Development. I also want to thank Secretary Donovan for giving me the opportunity to join an excellent 

team of professionals dedicated to ensure quality housing for every 

American. 

I started my career as a civil rights litigator. I have represented 

folks in matters involving substandard housing conditions, classic 

fair housing cases, and Federal class actions relating to community 

gentrification and discrimination in public housing. Through this 

work, I learned the value of decent, safe, and affordable housing 

within the context of a healthy neighborhood. 

After a dozen years of litigation, I was appointed by President 

Clinton to the U.S. Department of Housing and Urban Develop-
17 

ment, first as the Deputy General Counsel for Civil Rights and 

Fair Housing, and later as Senior Counsel to Secretary Andrew 

Cuomo. 

At HUD, I helped craft what the Secretary referred to as HUD’s 

‘‘justice agenda.’’ This required us to reach across divisions, to assemble and lead cross-departmental teams. For example, to examine the possible discriminatory use of CDBG dollars, we put together a team from Community Planning and Development, Fair 

Housing, and the Office of General Counsel. Through this work, I 

learned the intricacies of the funding programs which fall within 

the purview of Community Planning and Development. While most 

of my work centered on urban communities, I also was privileged 

to work in rural areas. My work included the design of HUD’s first 

Rural Housing and Economic Development NOFAs, work in the 

‘‘colonias,’’ and the launch of the Self-Help Housing Program on the 

Pine Ridge Reservation in South Dakota. 

This work touched me personally. I am the granddaughter of 

farm workers, and I have spent a considerable amount of my time 

visiting family in the San Joaquin Valley of California. It was my 

honor to give something back. 

After my experience at HUD, I went back home to Los Angeles 

to practice housing and community development. As Vice President 

of McCormack Baron Salazar, one of the country’s most successful 

private affordable housing developers, I spent 3 years taking affordable housing deals from concept to the final securing of financing. I have spent the last 5 years as the general manager of the 

Los Angeles Housing Development. The agent had a longstanding 

reputation for antiquated thinking, inadequate infrastructure, and 

the lack of transparency. Within my first year, we achieved a topto-bottom assessment and called in all of the stakeholders, always 

seeking to become public sector entrepreneurs, building momentum 

while working with the market instead of lagging behind it. 

We also initiated Project Clean House, an effort that identified 

the 50 most underperforming deals and brought the developers in 

to meet with us. We were able to get the majority of the deals back 

on track and completed. As for the rest, over a 2-year period we 

recaptured or de-obligated, either voluntarily or through judicial 

proceedings, over $50 million and put every penny back into the financing of affordable housing. And we were able through that effort to launch the city’s Permanent Supportive Housing Program. 

In partnership with lenders, philanthropy, and the Enterprise 

Community Partners, we successfully implemented the New Generation Fund, a $100 million acquisition capital fund. This fund 

works to provide acquisition pre-development and get financing to 

affordable housing developers in a transparent and competitive system. 

Now our biggest challenge is the current economic and housing 

crisis. Los Angeles has experienced over 24,000 foreclosures in the 

last nine quarters. We addressed the foreclosure crisis in thoughtful and innovative ways. Early on, we invested in data. Los Angeles 

is 469 square miles in size, and our investment in and development 

of GIS maps gave us the information we needed to understand the 

true nature of our problem and where to expend the $32.8 million 

Los Angeles received from NSP 1. We identified distinct neighbor-
18 

hoods where we could also achieve other goals, like transit-oriented 

development and the preservation of affordable housing in multifamily units. Restore Neighborhoods LA, a nonprofit we set up to 

acquire and dispose of vacant properties, is already up and running 

and making purchases. 

As a practitioner, I have learned and worked with HUD’s rules, 

and I know that they do not often take into account that one size 

does not fit all. If confirmed, I commit to bring a disciplined focus 

to CPD and will work to ensure accountability, transparency, expertise, and flexibility that support the efforts of local government 

to achieve meaningful community development. 

It would be an honor to serve. 

Thank you for your attention, and I look forward to any questions you may have. 

Senator REED. Thank you very much. 

Mr. Barr, please. 

STATEMENT OF MICHAEL S. BARR, OF MICHIGAN, TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS, DEPARTMENT OF THE TREASURY 

Mr. BARR. Thank you very much, Senator Reed and distinguished members of the Committee. It is my honor to appear before 

you today as the nominee for the position of Assistant Secretary of 

the Treasury for Financial Institutions. With me today are my wife, 

Hannah Smotrich; behind me, my children Avital, Dani, and Etai; 

my Mom, Deborah Barr; my sisters, Karen and Lisa; my uncle 

Gabe and my cousin Jake. 

[Laughter.] 

Mr. BARR. My wife’s parents, David and Bunny Smotrich; and 

family and friends who have known me my whole life. I am 

just—— 

Senator MARTINEZ. Are you Cuban, by any chance? 

[Laughter.] 

Mr. BARR. They are all representing the rest of the Sanchez family. 

Mr. BARR. I am sure my Dad, David Barr, is here with us in spirit as well, and I would not be here today before you without their 

love and their support. I am enormously indebted to them for the 

sacrifices they are making on behalf of me, and I hope the country. 

My parents taught me the centrality of public service. My Mom 

is still a high school English teacher here in Washington, DC, gives 

her all to her students every day. My Dad was a labor lawyer who 

represented hard-working Americans for his whole life. And I am 

humbled by their experiences and by the faith that President 

Obama and Secretary Geithner have placed in me during these extraordinary times. 

The President and the Secretary have moved aggressively to stabilize our economy and our financial markets, to provide relief to 

struggling homeowners and strength to our mortgage finance system. The administration has put in place initiatives to help small 

business, consumers, and students and to restore the healthy functioning of financial markets. 

While we address the current crisis, the President and the Secretary are committed to fundamental reform to reduce the likeli-
19 

hood of crises in the future and to contain such crises if they occur. 

The current financial crisis has revealed significant weaknesses 

and glaring inconsistencies in our system of financial regulation. 

If confirmed, I look forward to working closely with you to take 

the necessary steps to reform our financial system and to restore 

honesty and integrity to our financial system. We need a comprehensive and effective system of prudential supervision and effective measures to reduce systemic risk. We need clear accountability 

and full transparency. We must ensure that we put in place robust 

protections for consumers and investors with strong and uniform 

enforcement. We must ensure that our financial system is inclusive, and fair. And we must have a system that evolves over time 

to keep up with the pace of financial innovation domestically and 

globally. With the right changes in place, we can expect our financial system once again to be vibrant and strong. 

I come before you having had the privilege of working on financial issues for a long number of years. Currently, as a professor of 

law at the University of Michigan Law School, where I teach financial institution Republican and international financial regulation, 

my research involved research on financial policy and financial regulation, and most recently involves extensive empirical research on 

the needs and behaviors of consumers in our financial services system. My work focuses on ways in which a deeper understanding of 

how people think and behave based on real-world research can better inform public policy rather than relying solely on abstract models of interaction. 

Prior to joining academics, I served in senior positions in the 

Government—at the Treasury Department for 6 years, at OMB, at 

the State Department, and as a judicial clerk. And I would say that 

these positions gave me the opportunity to work with many of you 

and your staffs, to contribute to the work involving changing our 

financial system, and to gain the experience to know that an open 

mind and honest dialog lead to better policy judgments. 

I am hopeful that my experiences to date will serve the Department well if I am confirmed, and I am even more hopeful about the 

future of our Nation. If confirmed, I look forward to working together with you to lay the foundation for a sound recovery and a 

strong economic future. 

Thank you very much. 

Senator REED. Well, thank you very much, Mr. Barr. 

What I would like to do is take 7-minute rounds and make allowances for a second round if there are additional questions, and I 

presume there will be. 

Let me begin by asking Mr. Rogoff, the New Starts process, there 

has been criticism about it, the fact that it takes a very long time 

to get the process off the ground. There are many desirable projects 

that just do not seem to be able to make it into the mix. That is 

one dimension. And the other dimension I would like you to comment on is the tension between funding New Starts projects and 

continued improvement and expansion of existing projects. And if 

you could just generally comment, I would appreciate it. 

Mr. ROGOFF. Well, I would certainly agree with some of the criticism that has been leveled against the extraordinary time delays 

that have encumbered a number of the new New Start projects. It 
20 

is a situation that I do not really know anyone either in industry 

or who works around this process that is at all content with it. 

I have strong views that I think there are ways to streamline it. 

I think it is one of the first and most important exercises that I 

would like to go through, if confirmed, and if I do not launch such 

an initiative myself, I am kind of hoping that Secretary LaHood 

will order me to do it just to bring it the high-level visibility that 

I think it needs. 

The reality is the longer these approval processes take, the more 

expensive these projects get. And inevitably that means within a 

fixed-dollar amount of limited funds that we are going to be able 

to put into these projects over the next several years, that means 

we are buying fewer projects. We are buying fewer, more expensive 

projects, having taken a year, 2 years, 3 years longer than we perhaps should have to approve them. Now, no one wants to bypass 

any of the laws and regulations that apply to these approvals, but 

there has got to be a faster way to get them through the process. 

As it relates to funding, New Start projects, as compared to—I 

think what you are asking is sort of keeping up the maintenance 

on existing infrastructure. 

Senator REED. And expanding. 

Mr. ROGOFF. Yes. It is difficult in that we have just had, as a 

result of a report actually that Senator Durbin ordered through the 

appropriations process, really quite a wake-up call in a report that 

showed that we are looking at something along the lines of a $50 

billion backlog in deferred maintenance, really necessary maintenance on a number of our major rail systems across the country, 

including the MBTA up in your region of the country. And some 

of these deferred maintenance issues really quickly become safety 

issues if you do not attend to them. And I think this Committee 

as well as the FTA and the administration really need to carefully 

balance how much they want to commit to building new projects 

versus seeing to it that the existing systems are actually adequately attaining—you know, adequately attending to their core 

maintenance needs. 

It is hard when you think about the local political situation. It 

is a lot easier to kind of generation enthusiasm, perhaps generate 

an incremental tax, generate money out of the legislature when you 

have got a lot of people excited about a new service. It is a lot harder to cobble together the money to actually do adequate maintenance, so I think that is a careful balance we need to look at. 

Senator REED. Thank you, Mr. Rogoff. I have a question of everybody, but let me move to Mr. Bostic. 

Mr. Bostic, I note that in your resume you were an independent 

director for IndyMac MBS, Inc., and IndyMac ABS, Inc. And as we 

all well know, the failure of an affiliated company, IndyMac Bank, 

caused severe repercussions; in fact, it was alluded to by Congressman Schiff. 

If you could explain exactly what your role was with these entities, whether you were engaged in any of the activities of the bank, 

with their underwriting or their marketing, et cetera. What precisely were you doing as an independent director for these affiliated 

entities? 
21 

Mr. BOSTIC. To answer that question, I should start by just describing the relationship between IndyMac, the Bank, and its affiliates that I was on the board of. 

IndyMac Bank was a bank, they took deposits, they made loans. 

And one of their strategies was to fund those loans by accessing the 

liquidity from the secondary market. As you may be aware, there 

are a bunch of processes that you have to go through to get to actually get a pool to the secondary market and the affiliates, MBS and 

ABS, were charged with working through that process to get those 

pools to be made available on the secondary market. 

My role as an independent contractor was to oversee the activities of those affiliates and make sure that the processes were done 

appropriately, in conformity with SEC rules and regulations and 

those sorts of aspects of the infrastructure. 

At no time was I charged or did I have the authority or the responsibility to do underwriting, to review the decisions of how to 

pool these securities, the deal structure. I was largely a board 

member just overseeing this process. So it was relatively detached 

from the actual underwriting decisionmaking. 

Senator REED. Thank you very much. 

Mr. Sanchez, let me ask you a question. Basically, you will be the 

chief officer in our Government that is policing the anti-dumping 

and the dumping issues that face us, and I wonder if you could give 

us sort of a sense of how you might approach that, a very important challenge. 

Mr. SANCHEZ. Thank you, Senator Reed. 

In my role as Under Secretary of Commerce, I have two important responsibilities, promoting exports and, second, ensuring that 

we have created a level playing field for American business as it 

seeks to do business around the world. 

I consider it one of the most important tools that we have, to vigorously enforce our trade laws as well as our trade agreements. 

And it will be my intention to do that, to enforce them to our utmost ability, to work with USTR to make sure that we are doing 

everything to make sure that American business can remain competitive. 

If confirmed, I look forward to working with you and this Committee to make sure we are doing just that. 

Senator REED. Well, thank you very much. I will reserve my 

questions for the second round and recognize Senator Martinez. 

Senator MARTINEZ. Thank you, Senator Reed. 

I wanted just to make a general comment. All of you are coming 

to do things for this Nation that you love, and I want to just commend all of you for doing so. And I want to also express a word 

of families and friends and supporters and partners and others 

that are behind you and support you in your efforts. I think it is 

terribly important. 

I can just think back 8 years ago when I was sitting at the same 

table where you sit today, before I had the honor to be Secretary 

of HUD. So I want to just make that general comment. 

I have a couple of questions to each of you and I will try to go 

quickly about that. 

Mr. Rogoff, I wanted to ask you about the transit issue in terms 

of financing and funding. I come from a State where we have little 
22 

to none and are having a very difficult time getting projects off the 

ground. We just had a tremendous failure in Central Florida you 

may be aware of. 

What do you think are the answers? And how do you feel about 

private financing of major projects that might use a different model 

than what we traditionally have used? You know, I have been involved in a project for a light rail program in Orange County, Florida. It failed because we could not really come up with a local 

match. This one failed because the State of Florida could not do its 

part. 

This model is broken. How do you think we can get it done? Because mass transit is something that has to be part of the future 

of Florida. 

Mr. ROGOFF. Well, that is correct, and especially in growing 

States like Florida that continue to grow and continue to have a 

density of elderly. It becomes all the more important with the aging 

of the population. 

As I said in my opening statement, our core mechanism for financing these programs, the Transit Account of the Highway Trust 

Fund, is on its way toward bankruptcy. There are some measures 

taken in the President’s budget for 2010 to try to forestall that, but 

the bottom line is we need to develop some new financing mechanisms. 

We have had two commissions that have looked at this, both authorized in the SAFETEA–LU bill. I think what is most notable 

about them is that both commissions, while coming up with different recommendations, all agreed that we need a mix of solutions, that we are not going to have a single silver bullet mechanism, if you will, to revolutionize transportation finance. 

And private-public partnerships needs to be part of that. The 

challenge in doing private financing for certain transit projects is 

we need to get—what often interests the private sector in being a 

participant is being able to capture some kind of revenue stream 

for payback. Transit projects generally need an operating subsidy 

to continue to operate and therefore there is not sort of a natural 

mechanism, a natural funding stream to capture. 

But there have been some innovative mechanisms used out 

there. I think the one thing that really all of the committees that 

are going to participate in the authorization process—this committee, the Public Works Committee, the Commerce Committee— 

need to focus on is some of the most innovative ideas are coming 

from the States and localities themselves. That we need to open 

our ears to some of the things that are being successful out there, 

and try to give State and local decisionmakers maximum options. 

My only concern about the private-public partnership model is 

when you get into some pure privatizations where transit assets, 

if you will, are sold. And some of the funding from those assets do 

not necessarily redound to transportation benefits. And I think that 

is a point where we need to draw a line. 

But clearly, we have had some successful projects out there and 

we need to foster them. 

Senator MARTINEZ. Well, keep an open mind on Florida. We desperately need transit and I hope we can find a way to make it happen. 
23 

Mr. ROGOFF. Absolutely. The recent activities in Tallahassee 

were unfortunate, I agree, and Orlando. 

Senator MARTINEZ. It was, very unfortunate. 

Mr. Sanchez, I just wanted to make sure that I get on the record 

I know what your thoughts are on trade. I am very keen on the 

Colombia Free Trade Agreement. I think it is terribly important for 

our exports. This is a market where we will gain jobs by trading 

with Colombia on a free trade basis, and I wanted to know your 

thoughts on that agreement and the Panamanian one, as well. 

Mr. SANCHEZ. Well, I know that President Obama recently said 

that we have to be very careful that we do not send signals of protectionism, particularly during these economic times. 

I know that the U.S. Trade Representative, Ron Kirk, is working 

with our good partner and ally, Colombia, as well as Panama to 

work out any concerns or issues that may still exist. 

As you know, I am not yet working for the Administration, so I 

have not been involved in those discussions. But I am confident 

that the U.S. Trade Representative, with support from the Department of Commerce, will be able to work through issues with Colombia and Panama. And I am hopeful that some time in the future 

we will be bringing those agreements to Congress. 

Senator MARTINEZ. Well, Secretary Gutierrez, who I happen to 

have seen today and whom I know you know, was a huge advocate 

for the trade agenda. I hope you will pick up that mantle, along 

with Representative Kirk, who is I know going to do a great job as 

USTR. But I hope you will join with him. 

I know the Secretary is also a very committed pro-trade person, 

has a great record in his State when he was Governor, along those 

lines. I think it is terribly important that we move the agenda forward. I think it is very important for our political relationship with 

Latin America, as you well know, that we address that issue as 

soon as possible. 

Mr. SANCHEZ. I agree, Senator. As Senator Reed said, one in 10 

jobs in the United States come from our exports. And in Secretary 

Locke’s home State, by some estimates, it is one in three. So you 

are absolutely right, that it is an important engine of job creation 

in our country. 

Senator MARTINEZ. I want to just congratulate all of you HUD 

people, and welcome you to the HUD family, if I may be so presumptuous. I know, Ms. Henriquez, I think our paths crossed when 

you were in Boston and I was in HUD, and I know what a great 

job you are doing there. 

I also have to tell you that the whole public housing arena is 

challenged. Not all of them work as smoothly as yours. There are 

some terrific examples around the country of well run—Atlanta 

comes to mind, many others. But then there are also some really, 

really disastrous situations. And I hope that you will use your firm 

but gentle hand to make sure that we move that situation to a better place. 

As you said, every American ought to have a decent place to live, 

and not every American in public housing does. So I really hope 

you will take seriously that challenge. 

Ms. HENRIQUEZ. I will, and I do. Thank you. 
24 

Senator MARTINEZ. Ms. Ma ́ rquez, I also commend you for your 

passion about housing for all and equality. I did a lot in the 

‘‘colonias.’’ Maybe not enough, because I do not know how much 

would ever be done to be enough. But I promise you, it was an area 

that I took a great deal of interest in. 

There is so much of the agenda that I could discuss with each 

of you, but I just—in the interest of time—I hope that you will look 

at some of the things we did in the ‘‘colonias.’’ I hope that they are 

still there to be followed up on and pursued and advanced. 

There is no constituency, I used to say, for the ‘‘colonias.’’ You 

do not get any votes. You do not win any medals. Nobody really 

knows or cares what you are doing. But you have to only visit it 

once to realize that no Americans should live in the conditions that 

some of the people in the ‘‘colonias’’ are living. And so I hope you 

will continue to see if there is a way, through CPD dollars, that 

you can address some of those issues. 

You know, they do not qualify exactly as such. We were creative 

in ways of finding ways to help. And I hope you will be equally creative with them. 

That is not a question really, but if you have a comment I would 

love to hear from you. 

Ms. MA ́ RQUEZ. It is difficult when you approach the ‘‘colonias’’ 

and you find that HUD has one standard for a sewer hookup and 

USDA’s Rural Housing has another, and they are about six feet 

apart from another. 

Senator MARTINEZ. And there is not enough money for either 

one. 

[Laughter.] 

Ms. MA ́ RQUEZ. That is right. I promise you I will do my very 

best. 

Senator MARTINEZ. Thank you. There is so much—CPD, you 

know, it is the lifeblood of so many cities. And today, in these difficult times that we are facing, municipalities all over the country 

are looking to you for the leadership that has to come out of HUD 

for so many community projects that are vital, particularly now 

that we are trying to put people to work and everything else. 

Mr. Bostic, I am not sure I ever understood fully what all of you 

people do over there in the research area. 

[Laughter.] 

Senator MARTINEZ. So I will just wish you well and do good 

things. 

[Laughter.] 

Senator MARTINEZ. I mean no disrespect there. 

Thank you, gentleman. Mr. Barr, also, congratulations to you. I 

wish you well in your job. You have a huge challenge ahead of you 

and I look forward to working with you through the work of this 

Committee. 

Thank you. 

Senator REED. Thank you, Senator. Now we know and can see 

why you were such a successful secretary. 

[Laughter.] 

Senator REED. Your insight and 

Senator MARTINEZ. Good people. 

Senator REED. ——good people, and inspiring leadership. 
25 

Senator MARTINEZ. That is right. 

Senator REED. Thank you. 

Senator Akaka. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

Mr. Rogoff, due to your work on the Senate Transportation Appropriations Committee, you are probably aware of many things 

throughout the country, including Hawaii. 

Mr. ROGOFF. Yes, sir. 

Senator AKAKA. And in particular, the city and county of Honolulu and its efforts to construct a rail transit system. It was good 

for us to hear that you will be the man in transit for this Administration. We certainly look to you for improving the system and 

looking forward to working with you. 

The local contributions toward the project in Honolulu will likely 

be 70 percent of the project costs. But it will still need significant 

Federal support. This project is coming to a very critical phase of 

development in Hawaii, in Honolulu, and will require the regular 

attention of the FTA. Can you offer some assurance that the FTA 

will devote the appropriate time and attention to the rail transit 

project in Honolulu? 

Mr. ROGOFF. I certainly could, Senator. I have toured the corridor of this project. I have met with Mayor Hannemann on more 

than two occasions to discuss it. And I agree with you that we are 

now reaching a make or break point on the Honolulu project. 

I, unfortunately, along with a former colleague of mine, Pat 

McCann, were serving at the Subcommittee when the city council 

reversed itself and undid the project in the 1990’s and we went 

through the very unfortunately exercise of reallocating funds already appropriated to Honolulu to other cities. 

We must not let that happen again. And you have my assurance, 

both in working with the people in Region 9 as well as within 

headquarters to make sure that everyone is talking to each other 

clearly in terms of what needs to be done to move this project forward. 

Senator AKAKA. Thank you very much for your response. 

Mr. Barr, among those families who make up the bottom 20 percent of earners, one in four does not have a transaction account, 

according to the Federal Reserve’s survey of consumer finances. 

These families are those who can least afford to pay the high cost 

of fringe financial services and I know we share an interest in helping to increase access to mainstream financial institutions. I have 

valued your scholarship on the unbanked and look forward to 

working with you to help increase access to mainstream financial 

institutions. 

My simple question to you is what must be done to bank the 

unbanked? 

Mr. BARR. Thank you very much, Senator Akaka, for your kind 

words. As you know, I have been working on issues facing low-income households in the financial system for a long time. It is an 

area of deep concern for me in my scholarship, in my policy work. 

And it is an area that I would look forward to continuing to work 

with you on if confirmed for this position. 

I think there are a large number of efforts we can make to help 

bring more people into the financial services system if we focus on 
26 

their actual needs and start with what people need from their 

banks, what they need from their financial institutions, rather 

than determining from the top down, the current structure of the 

financial system. 

So I would very much look forward to working with you on this 

important issue. 

Senator AKAKA. I look forward to that, too. 

Ms. Henriquez, as you know, in Native American communities, 

affordable housing development on Trust lands requires unique 

and innovative approaches. Programs authorized by the Native 

American Housing Assistance and Self Determination Act, what we 

call NAHASDA, have been vital to increasing access to affordable 

housing. 

Hawaii’s Department of Hawaiian Home Lands is the largest affordable housing developer in our State and has effectively utilized 

and leveraged Federal resources. Hawaii’s housing costs are the 

highest, as you know, in the country and homelessness is too prevalent. 

I encourage you to come to Hawaii and see the work being done 

by DHHL and meet with DHHL’s leadership and homestead residents, who would welcome you. 

My question to you is will you work with me in an attempt to 

meet the specific housing needs of Native Hawaiians? 

Ms. HENRIQUEZ. First of all, thank you very much for your kind 

offer and I would look forward to visiting you in Hawaii. 

[Laughter.] 

Ms. HENRIQUEZ. Let the record show. 

But quite seriously, I would look forward to working with you, 

Senator. I think that we have got to figure out what is working and 

what is not working and then how to leverage as much as possible 

the tools that we have got in front of us. 

I understand that there are high costs of living in Hawaii. I just 

recently met with the Director of the Hawaii Housing Authority 

and learned a lot from him and understand the disparity between 

what is seen by the tourists and the actual living conditions for a 

number of people who live on the Island. 

So I look forward to working with you and members of your staff 

to try and figure out ways to leverage as many dollars as possible. 

Senator AKAKA. Thank you very much for your response. 

Ms. Ma ́ rquez, in addition to serving on this Committee, I am 

Chairman of the Veterans’ Affairs Committee and we have been 

working to improve VA services for homeless veterans. Since veterans are approximately one-third of the homeless population, 

what must be done to ensure that veterans are provided access to 

assistance and support services to help them find and retain housing? 

Ms. MA ́ RQUEZ. Thank you for the question, Senator. It is, indeed, 

a tragedy, the statistics that you cite. 

My sense of that, in Los Angeles we have begun to work on that 

through our permanent supportive housing program. We actually 

give an incentive for developers to come and build for veterans, for 

homeless veterans. 

I think what we have to do is put together a leverage, a matrix 

so to speak, between our CDBG dollars, the new dollars from 
27 

Homeless Prevention and Rapid Re-Housing, and even layer them 

on top of NSP dollars. It is very expensive to build permanent supportive housing for anyone that has a great need and ultimately we 

have to leverage both the capital and the operating dollars. 

And so I actually look forward to working with my colleague, 

Sandy, here because it is going to be together that we work out the 

final financing to allow permanent supportive housing to go forward. It has always been a problem. The two systems do not speak 

together well about capital and operating. And that is what I would 

intend to do. 

Senator AKAKA. Thank you very much. My time has expired but 

I want to wish all of you well and the team that you will be part 

of will certainly help our country, without question. So I wish you 

well and welcome to your families and friends, and also your supporters out there. 

Thank you. 

Senator REED. Thank you very much, Senator Akaka. 

Let me direct the same question really to Ms. Henriquez and Ms. 

Ma ́ rquez. I am just pleased you have emphasized already teamwork, but you have unique perspectives. You have worked within 

the Agency and you have worked outside of it. As you go in, what 

do you think your most significant challenges are, the top three 

let’s say, from your perspective looking at what HUD has done and 

can do better and having been there, in some cases, and tried your 

best. 

Ms. Henriquez. 

Ms. HENRIQUEZ. Thank you, Senator. 

From my perspective, I think the top three challenges would be 

one, to make sure that we are communicating, the issue about accountability, transparency, top down, bottom up, so that we can 

make sure that our programs are effective, we are communicating 

effectively both to folks who we regulate, housing authorities and 

our other partners, but also make sure that we hear from those 

partners about how to be as effective as possible. 

I think getting real-time data and using that data to drive decisions is really important so that we are not always wondering what 

should be included, what is not in the number, how the number 

works, and how indeed those resources are applied across the Nation. 

I do think, as well, getting our arms around the capital needs 

study to inform decisions, particularly around the public housing 

portfolio, is essential. I know that that work is going on now and 

I look forward to learning more about how we can use tried and 

true programs that make some sense and that have been productive and helpful and how we can either replicate those or expand 

upon those to be more efficient and to produce greater affordable 

housing across the country. 

Senator REED. Thank you. 

Ms. Ma ́ rquez. 

Ms. MA ́ RQUEZ. Thank you, sir. 

I think going in the top three things to look at within CPD are 

clearly the distribution of stimulus dollars, how they are being 

spent, making sure that that is effective, efficient, and creating 

jobs. 
28 

Second, it would be the distribution of NSP 2, the competition, 

which now will focus on need in a different way. And having the 

technical assistance competition done so that we have the expertise 

around the country to ensure that communities of all sizes and of 

all types of economies are using these dollars and leveraging as 

much as possible. 

I would say, third, those are immediate. But the things that absolutely have to be looked at now are some integration of disaster 

relief work and funding. I am looking forward to digging in. 

In Los Angeles we have disasters. They are called earthquakes. 

In my city, when we had the Northridge earthquake, it was my 

agency that was responsible for the long-term financing of over 

20,000 houses and bringing them back on line. So I have spent a 

lot of time thinking about it, worried that the big one is coming, 

and planning for that. 

So those would be the top three things that I would worry about. 

And then the difficulty always is we are going to have to work 

across lines. There can be no division. The problems are too deep. 

Senator REED. I noticed Dr. Bostic was making lots of notes, 

which is a good sign because you are already working across divisions. 

[Laughter.] 

Senator REED. But if you have a comment, Dr. Bostic, about how 

you can help them. 

[Laughter.] 

Mr. BOSTIC. It is very unusual to hear program people talk about 

doing studies and taking data and all that stuff. I get excited so 

I start writing things down. 

[Laughter.] 

Mr. BOSTIC. I guess one of my real objectives of PD&R is to improve the data interface and the availability of data from the Department to serve our external constituency. So there are a lot of 

local community groups who do not really have the capacity to do 

their own data collection, data analysis. And I am hopeful that, in 

working with my two colleagues, we can really change and transform their ability to understand what is going on in their own communities so that we collectively can build programs that really do 

improve people’s quality of life. 

The Secretary, I should say, has lifted up data as one of his priorities. So this is really a good opportunity. I think we are all very 

much aligned and it is really an opportunity to get some really 

good collaboration and hopefully good output. 

Senator REED. Thank you very much. 

Mr. Barr, you are going to a position of great responsibility at 

a critical moment. We are working to prepare major reform legislation for financial supervision. 

Just to get a sense of what do you feel the key issues are from 

your perspective? 

Mr. BARR. Thank you very much, Senator Reed. 

Again, if confirmed, I would look forward to working closely with 

you and the Committee on this issue. 

I think President Obama and Secretary Geithner have made 

clear the importance of fundamental reform to our system of financial regulation. It is a reform that needs to be based on several key 
29 

principles. We need to be sure that the system does not permit the 

growth of systemic risk, that we have appropriate systems in place 

to address systemic risk and prudential supervision. 

Second, we need a system that is protective of consumers and investors, a strong and uniform protection across our financial sector. 

Third, we need to take the steps necessary to reform our regulatory structure so that it is gap-free and comprehensive and so 

that we do not permit the kind of regulatory competition and arbitrage that has occurred in the past. 

And fourth, we need a system that enables us to compete internationally and to level the playing field and regulation for both 

U.S. and foreign firms. 

Senator REED. Thank you. I have had the privilege of working 

with you and I have been terribly impressed with your scholarship 

and your commitment to dealing very aggressively and appropriately with some of these very difficult issues. 

One area that we have spoken about is the whole issue of foreclosure and foreclosure mitigation. We have attempted several 

times, going back to the previous administration, on a voluntary 

basis. We had a first iteration of foreclosure mitigation legislation. 

Just last week we passed another version. Included in that, by the 

way, is a reform of McKinney-Vento Homeless Assistance Act, 

which we look forward to getting passed. I checked with Chairman 

Frank and he is all for it, too. So we think the signs are looking 

good. 

But one of the issues we dealt with was just the securitization 

issues, and in particular the tax issues of REMICs, et cetera. Any 

thoughts about whether the time has come to be more forceful in 

that area? Or any other thoughts you might have on this sort of 

securitization problem? 

Mr. BARR. Thank you, Senator Reed. 

As you know, when we have talked before, I have long been an 

advocate of forceful measures to ensure that we have strong methods for accelerating loan modifications and reducing foreclosures. 

When President Obama came into office, he made that a top priority, and soon after coming into office in February, announced a 

loan modification and stabilization plan with three key elements. 

First, additional funding to ensure the capital structure of 

Fannie Mae and Freddie Mac are strong so those institutions could 

continue to play an important role in stabilizing prices in the market. 

Second, a refinance program authorized by the Federal Housing 

Finance Agency to permit more households to refinance, even 

though they are under water. 

And third, a clear commitment to an aggressive loan modification 

plan with a commitment of $75 billion in resources and strong 

Treasury guidelines for servicers. And so those two key elements, 

real dollars on the table to change behavior and clear legal guidance to perform loan modifications, I believe are starting to show 

significant promise. 

There have been now thousands of trial modifications that have 

begun. There are 14 servicers who have signed contracts to implement the loan modification protocols that have been specified. 
30 

Those contracting firms cover a little bit more than 75 percent of 

all mortgage loans in the United States. 

So I think we are off to a strong start. I think it is early to tell 

whether it is strong enough. I think we are going to see over time 

whether the program ramps up in the appropriate way. And the 

Administration is committed to ensuring that the program is successful. 

As part of that initiative, the Department of Treasury released 

some guidance on the issue that you and I had spoken about before, the Real Estate Mortgage Investment Conduit statute, making clear that participation in the Obama modification plan would 

not disturb that status for existing trusts, which is one of the 

measures that you and I have talked about in the past. 

Again, we are committed to continuing to make sure the program 

works and to examining it going forward in the ways that you have 

indicated. 

Senator REED. Well, it is an arrow that is still in the quiver, a 

much more explicit response to REMICs. But you are going to be— 

I presume and I am confident you are going to be carefully monitoring the progress of the existing measures. And if they are doing 

the job, then the arrow stays in the quiver. And if not, we have it. 

Mr. BARR. Thank you, Senator. 

Senator REED. Thank you. 

I want to thank all of you, not only for your testimony today but 

for your commitment to public service. 

I would ask if my colleagues, some who have not been present, 

may have questions, those questions will be forwarded to you within 7 days from the Committee. There may be some, there may be 

none. But you might get them and your expeditious answer is in 

your own self-interest, so I can stop right there. 

I wish you all very, very well in serving the people of this country. 

The hearing is adjourned. 

[Whereupon, at 3:34 p.m., the hearing was adjourned.] 

[Prepared statements, biographical sketches of nominees, responses to written questions, and additional material supplied for 

the record follow:] 
31 

PREPARED STATEMENT OF PETER M. ROGOFF 

TO BE FEDERAL TRANSIT ADMINISTRATOR, 

DEPARTMENT OF TRANSPORTATION

MAY 13, 2009 

Mr. Chairman, Ranking Member Shelby, and Members of the Committee, I want 

to thank you for allowing me this opportunity to present myself as President 

Obama’s nominee to head the Federal Transit Administration. 

Before delivering my formal remarks, I want to acknowledge the presence of my 

many friends that are here and, most especially, my family. My wife, Dena Morris. 

Our children, Niles and Lucy Rogoff. I also want to recognize the individual that 

makes it possible for the four of us to do all that we do—our phenomenal nanny 

and friend, Ms. Murlene Dowling. 

Mr. Chairman, having served on the staff of a Senate Committee for 22 years, 

I know that the confirmation process is one of the most critically important constitutional responsibilities of the Senate. So I come to this hearing with humility and 

great respect for the process. 

As I appear before you today, I believe public transportation faces both remarkable opportunities and serious challenges. 

The opportunities begin with the fact that we have a President who recognizes 

the central importance of our transit systems to our quality of life and the quality 

of our environment. He has spoken of the need to invest adequately and to invest 

efficiently. And he has stressed repeatedly the role that public transportation must 

play in reducing pollution, including greenhouse gas emissions, and moving towards 

energy independence by diminishing our reliance on foreign oil. 

In addition, the American people are creating opportunities by utilizing transit 

services in record numbers—and by demanding more. Transit ridership rose to a 

modern record in 2008—10.3 billion trips. What may be more remarkable is that 

ridership has remained high even as record gas prices have dropped back down. 

Many families have sold their second car—or their only car—either as a matter of 

convenience or to cope with the economic downturn. Many other Americans, weary 

of sitting in traffic jams, have boarded the train or boarded buses utilizing designated bus lanes. 

Finally, there are great opportunities because the Administration and Congress 

are about to rewrite all our surface transportation programs. In fact, the upcoming 

authorization process presents an opportunity like no other to retool our public 

transportation programs and refocus them on our most critical national goals. 

But as this Committee is well aware, we also face extraordinary challenges. First 

and foremost, is the task of financing our efforts to achieve these goals. The mass 

transit account of our Federal Highway Trust Fund is on a path to insolvency. 

While the transit account is in less immediate danger than the larger highway account, the balances in both are falling at a rate that will undermine their ability 

to support current obligation levels. 

The financing challenge calls for tough choices. So it’s all the more important that 

we fulfill President Obama’s commitment to spend every transit dollar efficiently 

and on the worthiest projects. 

Against this backdrop, I am especially honored that President Obama has nominated me to serve as his Federal Transit Administrator. I very much look forward 

to working with this Committee, with Secretary LaHood and with his outstanding 

team to both tackle the pressing challenges and capitalize on the extraordinary opportunities. 

As I mentioned, the financing dilemma is difficult. But with more than two decades of experience on the Appropriations Committee staff specializing in transportation finance, I feel confident that I can help the Secretary and this Committee 

identify a more stable and sustainable funding regime. 

Secretary LaHood has made clear his intention to eliminate the stovepipes within 

the DOT. He will be asking his agency leaders to work toward a seamless system 

that moves people and freight efficiently between modes of transportation. I believe 

I can help. My experience in infrastructure investment programs goes well beyond 

mass transit. It includes highway, aviation, intercity rail, and maritime programs. 

If we are going to succeed in developing truly seamless networks, then expanded 

cooperation and joint investments are going to be the key. 

Secretary LaHood and HUD Secretary Donovan are committed to fostering livable 

and sustainable communities through the coordinated efforts of their departments. 

For the last 4 years, I have had the joint responsibility of overseeing both the Transportation and HUD budgets for the Appropriations Committee. Knowing the HUD 

budget as I do, and witnessing Secretary Donovan’s impressive efforts to transform 
32 

HUD, I am particularly enthusiastic about working with him and Secretary LaHood 

to promote sustainability. 

Finally, I welcome the opportunity to be this Administration’s advocate for mass 

transit. I plan to be a very public advocate in my visits with policy makers in communities across the Nation. But just as importantly, I plan to be a forceful advocate 

in the less public debates that go on within the Administration. 

We must create new and better transit options in both urban and rural America. 

But especially during a period of economic uncertainty and recovery, a pro-transit 

agenda must include protecting and improving transit services for those for whom 

mass transit is the only option. If confirmed, this Committee can count on me to 

be a strong and vocal partner in advancing that agenda. 

Thank you again for this opportunity. I look forward answering any questions you 

may have. 
33 
34 
35 
36 
37 
38 
39 
40 

PREPARED STATEMENT OF FRANCISCO J. SANCHEZ 

TO BE UNDER SECRETARY FOR INTERNATIONAL TRADE, 

DEPARTMENT OF COMMERCE

MAY 13, 2009 

Thank you Chairman Dodd, Senator Shelby, and Members of the Committee. 

There is no greater call than that of service to one’s country and I am truly honored by President Obama’s nomination to serve as Under Secretary of Commerce 

for International Trade. I am humbled by the trust that President Obama and Secretary Locke are placing in me, and I am cognizant of the serious responsibilities 

that accompany this confidence. If confirmed, I look forward to working for them, 

and with you, in advancing our Nation’s economic well-being and ensuring that all 

Americans benefit from free and fair trade. 

I want to thank my Mother and my late father for their support and encouragement. I would not be here if it weren’t for their constant love and commitment to 

my success. 

As Secretary Locke has said, the role of the Department of Commerce is to be an 

engine of innovation, job growth, and economic renewal. The International Trade 

Administration supports these efforts by strengthening the competitiveness of U.S. 

industry, promoting trade and investment, and ensuring fair trade and compliance 

with trade laws and agreements. This mission is critical to enhancing America’s 

global competitiveness and expanding commercial opportunities for American manufacturers and service workers throughout the world. 

When U.S. businesses seek to promote their goods and services in overseas markets, the International Trade Administration’s programs lead the way. In short, the 

agency helps America’s firms and workers navigate through the often complicated 

and unpredictable waters of foreign trade—so that U.S. firms’ sales abroad help to 

ensure their growth in the United States. In particular, ITA focuses on assisting 

small and medium-sized businesses to succeed in the international economy. Small 

and medium-sized businesses are critical to America’s long-term prosperity and 

global competitiveness, and ITA programs are designed to help these companies export to the millions of consumers that live beyond our borders. 

Early in my career, I had the honor of serving former Senator Bob Graham, while 

he was governor of Florida, as the first director of my State’s Caribbean Basin Initiative program. I then served in the Clinton administration in the Office of the Special Envoy for the Americas, a role that required carefully balancing foreign policy 

goals with advancing U.S. economic interests. Subsequently I served as Assistant 

Secretary of Transportation, where I oversaw the Department’s international negotiations. 

In my current position with Cambridge Negotiation Strategies, I have had the opportunity to work with American companies, other multinational companies and 

international organizations in more than 30 countries around the world. I have also 

consulted with heads of government and community leaders in Latin America to 

help resolve a range of complex issues. In Medellı ́n, Colombia I lead a team as part 

of a ‘‘Teaching Tolerance’’ program, an initiative to break the cycle of violence plaguing the country. My work has included projects with the World Bank and the Inter 

American Development Bank. I also advised the president of Ecuador in negotiations to settle the 56-year-old border dispute with Peru. 

If confirmed, I look forward to working closely with this committee to support 

American innovation and entrepreneurship and open global markets for Americanmade goods and services, while creating new jobs and economic growth at home. 
41 
42 
43 
44 
45 
46 
47 
48 
49 

PREPARED STATEMENT OF RAPHAEL W. BOSTIC 

TO BE ASSISTANT SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH, 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

MAY 13, 2009 

Chairman Dodd, Ranking Member Shelby, and Members of the Committee, I am 

honored and humbled to appear before you today as you consider my nomination 

to serve as the Assistant Secretary for Policy Development and Research at the U.S. 

Department of Housing and Urban Development. Before going further, I must acknowledge those who have given unconditional love and support through my life, 

most significantly my partner Jeffrey Taylor, my parents Viola and Raphael T. 

Bostic, my sister Ebony, my aunt Patricia Williams, and mentors Glenn Canner, 

John Shoven, Roger Noll, Susan Wachter, and Stuart Gabriel. 

The time we find ourselves in is remarkable, both because of its gravity and its 

origins. By many measures, the economy has not performed so poorly since the 

Great Depression of the 1930s. And for perhaps the first time in this Nation’s history, housing has been at the root of the macroeconomic troubles. This reality means 

that a deep understanding of housing markets is critical, and evidence on what does 

and does not work in these markets will be essential for creating a new market 

structure that endures and corrects the weaknesses that helped to create the current troubles. 

Secretary Donovan recognizes this, and in his public and private statements has 

already placed a considerable emphasis on the importance of collecting and using 

data to make informed decisions. If confirmed to my position, I will work hard to 

see that the Secretary’s vision is pursued and achieved. In this way, I hope to contribute to a transformation of the Department into an efficient, informed leader of 

policy on issues associated with housing and urban development. 

My background, including significant work in academics, government and community development, provides me with assets that will allow me to help the Office of 

Policy Development and Research (PD&R) increase its efficacy and effectiveness. A 

key goal is for PD&R efforts to contribute to a deeper and more meaningful understanding of the issues facing our housing and urban markets and communities. 

From an academic perspective, my research has given me knowledge and insights 

about both housing and urban development, and this, combined with my continual 

and intensive interaction with other academic scholars, will allow me to promote the 

implementation of evidence-based policy with the Secretary and the Department’s 

program offices. In addition, my training and perspectives gained as an academic 

researcher have given me skills that will help ensure that research and program 

evaluations produced or funded by PD&R are relevant, timely, and of the highest 

quality. 

Through my career to date, I have interacted extensively with all the key HUD 

constituencies and so am able to add value and perspective to HUD’s research efforts, as well as its policy-making and oversight. I understand housing and housing 

finance through my research and my work at the Federal Reserve Board. I know 

the nuts and bolts of affordable housing development, as well as the difficulties and 

opportunities it affords for lower-income and minority households, through my 

teaching them at USC, service as a Board member of a local nonprofit housing developer, and research. My work with a local community development organization 

in East Palo Alto and other research I have done have provided insights as to the 

challenges of broad-based urban and community development. My role as director 

of a real estate development program required my engagement of all aspects of the 

development process, and forced me to engage and understand how design, law, economics, finance, and construction all interact. Of particular significance, the exposure to construction highlighted the key role that engineering and technology can 

play in helping to make housing affordable and high quality. 

One of Secretary Donovan’s top priorities is to improve the culture of the Department as an institution, and I pledge to further this goal for PD&R. This transformation will require significant organizational management, and my experiences 

at USC over the past several years have prepared me for this challenge. I aim to 

provide an environment that allows PD&R to perform and produce at high levels, 

as I believe the Office has tremendous potential that has lagged in terms of its productivity, prominence and influence. 

Finally, I come to you today with a clear understanding of the opportunities and 

obstacles that this position presents. Through my work at the Federal Reserve 

Board and HUD, I have seen how policy is created at the Federal level, and am familiar with the dynamics associated with operating at PD&R. This knowledge base 
50 

will facilitate my navigation of the policy-making milieu and should lead to effective 

decision-making and promotion of ideas that will benefit the American people. 

In conclusion, I am very excited to serve the country at this pivotal moment in 

its history. I am eager to support the Secretary’s efforts and work with the members 

of this committee to help heal the Nation’s housing markets and promote the flourishing of its urban areas. 

Thank you for giving me the opportunity to speak with you today and I welcome 

any questions you might have. 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 

PREPARED STATEMENT OF SANDRA HENRIQUEZ 

TO BE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

MAY 13, 2009 

Thank you Mr. Chairman, Senator Shelby and distinguished Members of the 

Committee, for considering my nomination and the opportunity to appear before you 

this morning. I am truly honored and humbled to have had Secretary Donovan recommend that President Obama nominate me as Assistant Secretary for Public and 

Indian Housing. 

Thank you, Congressman Frank for introducing me today. With me are my father, 

Howard Brooks, my brother, Bruce Brooks, my son, Carlos and colleague, DaVonne 

Bolton. My son and daughter remain in Boston, but I am certain they are watching 

this proceeding. 

The most significant portion of my career has been in real estate property management of affordable housing, both the private and public sectors of the industry. 

I quickly turned to residential real estate because I was more interested in the people who lived there than the commercial side. I believe that housing is a right and 

that the provision of safe, decent, well-cared for units for low and very low income 

families and individuals lays the foundation to change lives. If a family’s shelter is 

secure, then that household can begin to work on other aspects of their lives that 

many of us take for granted, such as child care, getting a job, finding a better one, 

education for themselves and their children. 

For the past 13 years, I have been the Administrator and Chief Executive Officer 

of the Boston Housing Authority. As the largest single landlord in the City of Boston, and one of the largest public authorities in the Nation, the BHA provides 

11,500 public housing units and 13,000 rental assistance subsidies, together housing 

10 percent of the city’s population. With an 850 person workforce, and program 

budgets exceeding $280 million annually, I have led an outstanding team to reform 

the housing authority from near troubled status to that of high performer in its public housing and Section 8 portfolio. Following real estate industry policies and practices, the BHA moved to asset management models before Congress and HUD required it. We embraced the basics and the vacancy rate dropped from 15 percent 

to 2–3 percent across the portfolio, nonemergency work order completion times 

dropped from 120 days to 15, and they continue to fall, and rent collections are up. 

At the same time, we moved from being labeled by HUD as ‘‘systemically discriminatory’’ to ‘‘a national fair housing model,’’ partnered with sister city agencies, local 

community development corporations and other nonprofit housing providers to increase the production of affordable rental housing, created housing strategies and 

programs to house the homeless, and introduced ‘‘green principles’’ into our business 

practices and into our building maintenance and construction. 

The Boston Housing Authority has used the HOPE VI program to redevelop three 

properties, with a fourth just beginning. In addition, we created 62 new first-time 

homebuyers, none of whom are in default or foreclosure. We have used mixed financing to redevelop two other properties, and when all redevelopment is taken together, they total almost $1 billion over all. For every Federal or State dollar, we 

leveraged eight. 

We have used Energy Performance Contracting to retrofit many of our outdated 

heating plants, making them state-of-the-art, more efficient, less costly to operate 

and creating better living environments for residents. 

In addition, we have used available HUD programs to use a portion of our ongoing capital allocation to leverage bond financing to expand ongoing improvements 

to the physical plant. Coupled with recent ARRA funding, this totals more than 

$110 million. 

My housing experience has taught me that regardless of the price point, maintaining and improving properties is essential to those who live there. Preservation and 

improvement of the 1.2 million units of public housing stock, the creation of more 

affordable rental housing, as well as the continued ability to support families and 

individuals through rental assistance, is essential to realizing the dream of millions 

of our citizens. 

Secretary Shaun Donovan’s commitment to accountability and transparency and 

his leadership of HUD provides us with the opportunity to do our best work on behalf of those who benefit from HUD’s programs. If I am confirmed, I will be focused 

on and committed to learning more about Native American housing, as well as public housing. I am grateful that President Obama has nominated me and I want to 

thank each of you for your consideration of my nomination. If confirmed, I look forward to serving the Nation, especially those who live and work in public and Native 

American housing. Thank you. 
63 
64 
65 
66 
67 
68 
69 
70 
71 

PREPARED STATEMENT OF MERCEDES MA ́ RQUEZ 

TO BE ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

MAY 13, 2009 

Mr. Chairman, Ranking Member Shelby, and distinguished Members of the Committee, thank you for the opportunity to appear before you today. I would also like 

to thank Congressman Becerra for his kind introduction. Over the years, many 

friends have encouraged and supported me in my work. Some of them are here 

today. However, no one has been more steadfast or selfless than my partner of 21 

years, Mirta Ocana. It is my pleasure to introduce her today. 

I am honored to have been nominated by President Obama to be Assistant Secretary for Community Planning & Development. I also want to thank Secretary 

Donovan for asking me to come and work with him—giving me the opportunity to 

join an excellent team of professionals dedicated to insuring quality housing for 

every American. 

I have spent my career working on the full spectrum of housing and community 

development issues. I have grappled with these issues as a civil rights litigator, an 

affordable housing developer, a Federal Government official and for the last 5 years 

as the Director of Housing for Los Angeles, the department that crafted the city’s 

response to the foreclosure crisis. 

I started my career as a civil rights litigator. I have represented folks in matters 

involving substandard housing conditions, classic fair housing discrimination cases, 

and Federal class actions relating to community gentrification and wide spread discrimination in public housing. Through this work I learned the value of decent, safe 

and affordable housing within the context of a healthy neighborhood. 

After a dozen years of litigation, I was appointed by President Clinton to the U.S. 

Department of Housing and Urban Development (HUD), first as Deputy General 

Counsel for Civil Rights and Fair Housing and later, as Senior Counsel to Secretary 

Andrew Cuomo. At HUD, I helped craft what the Secretary referred to as HUD’s 

‘‘Justice Agenda.’’ This required us to reach across departmental divisions to assemble and lead cross-departmental teams. For example, to examine the possible discriminatory use of CDBG dollars we put together a team from Community Planning 

& Development (CPD), Fair Housing and the Office of General Counsel (OGC). By 

working in a coordinated fashion meaningful results were achieved. Through this 

work I learned the intricacies of the funding programs which fall within the purview 

of the Assistant Secretary for Community Planning and Development. 

While most of my work centered on urban communities, I was also privileged to 

work in rural areas, including Native American reservations and ‘‘Colonias’’ along 

the U.S./ Mexico border. My work included the design of HUD’s first Rural Housing 

and Economic Development NOFA’s, and in partnership with HUD’s Office of Native American Programs, the launch the Self Help Housing Program on the Pine 

Ridge Reservation in South Dakota. This work also brought the opportunity to collaborate with Rural Housing at USDA to make sense of conflicting policies affecting 

the development of rural housing. This work touched me personally. I am the granddaughter of farm workers—and while I grew up in San Francisco, California, I have 

spent a considerable amount of time visiting family in California’s San Joaquin valley. 

After my experience at HUD, I went back home to Los Angeles to practice housing 

and community development. As Vice-President of McCormack Baron Salazar, one 

of the country’s most successful private affordable housing developers, I spent 3 

years working on classic ‘‘tax credit’’ affordable housing development as well as 

HOPE VI deals. In essence, I took deals from concept to the final securing of financing. 

I have spent the last 5 years as General Manager of the Los Angeles Housing Department (LAHD). The agency had a long-standing reputation for antiquated thinking, inadequate infrastructure and a lack of transparency. 

Within my first year we achieved a top to bottom assessment and called in all 

of the stakeholders—lenders, lawyers, developers, landlords, tenant advocates, and 

government partners—always seeking to become public sector entrepreneurs—building momentum working with the market instead of lagging behind it. We also 

launched ‘‘Project Clean House’’—an effort that identified the 50 most underperforming deals and brought the developers—for profit and nonprofit—in to meet with 

us. We were able to get the majority of the deals back on track and completed. As 

for the rest—over a 2 year period—we recaptured or de-obligated, either voluntarily 

or through judicial proceedings—over $50 million and put every penny back into the 
72 

financing of affordable housing—and in 2006 launched the city’s Permanent Supportive Housing Program. 

In partnership with national lenders, the philanthropic community and Enterprise 

Community Partners we successfully implemented the New Generation Fund—a 

$100 million Acquisition Capital fund. This fund works with the Affordable Housing 

Trust Fund to provide acquisition, predevelopment and gap financing to private and 

nonprofit affordable housing developers in a transparent and competitive system. 

Now, our biggest challenge is the current economic and housing crisis. Los Angeles has experienced over 24,000 foreclosures in the last nine quarters. We address 

the foreclosure crisis in thoughtful and innovative ways. Early on we invested in 

data. Los Angeles is 469 square miles in size and our investment in and development of GIS maps gave us the information we needed to understand the true nature 

of our problem and where to expend the $32.8 million Los Angeles received from 

NSP 1. We identified distinctly impacted neighborhoods of the city, focusing on 10 

by 10 block areas where we can also achieve other goals like transit oriented development, preservation of affordable multifamily housing, and green building standards. Restore Neighborhoods LA, the community based nonprofit we created to acquire and dispose of both multifamily and single family properties is up and running. We also designed a mapping function accessible through our Web site where 

any member of the public can log on and determine whether a foreclosed property 

they are interested in falls within our ‘‘impacted’’ areas and, as such, is eligible for 

an acquisition/rehabilitation loan. 

As a practitioner, I have experienced the constraints of HUD’s regulatory structure, which often creates regulations that often do not take into account that one 

size does not fit all. If confirmed, I commit to bring a disciplined focus to CPD and 

will work to insure accountability, transparency, expertise and flexibility that support the efforts of local government to achieve meaningful community development. 

It would be an honor to serve as Assistant Secretary for Community Planning and 

Development. Mr. Chairman, Senator Shelby, I want to thank you and the others 

Members of the Committee for the opportunity to appear before you today and I am 

prepared to answer any questions you may have. 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 

PREPARED STATEMENT OF MICHAEL S. BARR 

TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS, 

DEPARTMENT OF THE TREASURY

MAY 13, 2009 

Chairman Dodd, Ranking Member Shelby, and distinguished Members of the 

Committee, it is my honor to appear before you today as the nominee for the position of Assistant Secretary of the Treasury for Financial Institutions. 

With me today are my wife, Hannah Smotrich; my children, Avital, Dani, and 

Etai; my mom, Deborah Barr; my sisters Karen and Lisa; my uncle Gabe Stern; and 

my wife’s parents, David and Bunny Smotrich. I’m sure my dad, David Barr, is here 

with us in spirit. I would not be here before you today without their love and support and I am enormously indebted to them. 

My parents taught me the centrality of public service. My mom is a high school 

English teacher here in Washington, DC, and gives her all to her students. My dad 

was a labor lawyer who represented hard-working Americans. My grandmother, 

Phyllis Stern, who turned 98 earlier this year, only recently had to give up her volunteer activities, and her son, Gabe Stern, here today, is a local hero in Gales Ferry, 

Connecticut for his work helping to preserve jobs at the local submarine base. 

I am humbled by the faith that President Obama and Secretary Geithner have 

placed in me during these extraordinary times. The President and the Secretary 

have moved aggressively to stabilize our economy and our financial markets, and 

to provide relief to struggling homeowners and strength to our mortgage finance 

system. The Administration has put in place initiatives to help small businesses, 

consumers, and students and to restore the healthy functioning of our financial markets. 

While we address the current crisis, the President and the Secretary are committed to fundamental reform to reduce the likelihood of crises in the future and 

to contain such crises if they occur. The current financial crisis has revealed significant weaknesses and glaring inconsistencies in our system of financial regulation. 

If confirmed, I look forward to working closely with you to take the necessary 

steps to reform our financial regulation and to restore honesty and integrity to our 

financial system. We need a comprehensive and effective system of prudential supervision and effective measures to reduce systemic risk. We need clear accountability and full transparency. We must ensure that we put in place robust protections for consumers and investors with strong and uniform enforcement. We must 

ensure that our financial system is inclusive, and fair. And we must have a system 

that evolves over time to keep up with the pace of financial innovation domestically 

and globally. 

Innovation is a hallmark of America’s financial system, and with the right 

changes in place, we can expect our financial system once again to be vibrant and 

strong. 

I come before you having had the privilege of working on financial issues for a 

number of years. As a professor of law at the University of Michigan Law School, 

where I have taught for the last 8 years, I teach courses on financial institutions 

policy and international financial regulation. I have published widely on financial 

policy and regulation and have conducted extensive empirical research on the needs 

and behaviors of consumers in the financial services system. My recent work has 

focused on ways in which a deeper understanding of how people think and behave 

based on real-world research can better inform public policy, rather than relying 

solely on abstract models. 

While a professor, I have served as the Chair of the Financial Institutions and 

Consumer Financial Services Section of the Association of American Law Schools; 

as a Research Affiliate at the National Poverty Center; and as a senior fellow at 

the Brookings Institution and at the Center for American Progress. In these capacities, I have often spoken out about the need for reform of our financial system, and 

in particular, about the ways in which our financial system has ill-served many 

Americans. 

Prior to entering academics, I served in senior positions in the U.S. government. 

From 1995 to 2001, I served in the Treasury Department, as Deputy Assistant Secretary for Community Development Policy (from 1997 to 2001), and prior to that, 

as Special Assistant to the Secretary (1995 to 1997). I also concurrently served from 

1999 to 2001 as Special Adviser to the President and Executive Director of the Federal District of Columbia Task Force at the Office of Management and Budget, 

where our work was largely focused on putting the District of Columbia’s fiscal 

house in order. These positions gave me the opportunity to work with many of you 

and your staffs, to contribute to the work of the Administration in a wide range of 
84 

areas, and to gain the experience to know that an open mind and honest dialogue 

lead to better policy judgments. 

Before joining Treasury, I served in the State Department, from 1994 to 1995, as 

Special Adviser and Counselor to the Director of the Policy Planning Staff. Before 

entering the Executive Branch, I was a law clerk to Justice David Souter of the U.S. 

Supreme Court and to then District Judge Pierre Leval of the Southern District of 

New York. 

I am hopeful that my experience will serve the Department well if I am confirmed, and I am even more hopeful about the future of our great Nation. Working 

together, we can help to lay the foundation for a sound recovery and a bright economic future. 

Thank you. 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 

RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD 

FROM PETER M. ROGOFF 

Q.1. As you know, I have spoken frequently about the need to better coordinate transportation policies with housing, energy, and environmental policies. If we are going to really reduce traffic congestion and address some of the biggest problems of the 21st Century, 

we need to end the current policy stove-piping and think through 

these issues in a more comprehensive fashion. That is why I wrote 

President Obama earlier this year to urge him to establish a White 

House Office of Sustainable Development. 

Mr. Rogoff, what actions can you take as the leader of the Federal Transit Administration to encourage this kind of integrated 

approach to policy and to bring various agencies together to ensure 

that transportation policy is better coordinated with housing, community development, energy, environment, and climate change 

policies to promote sustainable growth and development? 

A.1. For the last 4 years, I have had the joint responsibility of overseeing both the Transportation and HUD budgets for the Appropriations Committee. Knowing the HUD budget as I do, and witnessing Secretary Donovan’s impressive efforts to transform HUD, 

I believe that Federal agencies can play a role in encouraging 

State, regional, and local agencies to make better decisions that 

promote sustainable development while supporting a variety of 

other public interest goals. 

To that end, if confirmed, I will support Secretary LaHood and 

Secretary Donovan’s efforts to implement the President’s national 

priorities for transportation, including his focus on transparency 

and accountability, community needs, and reduced oil consumption 

and GHG emissions. The Infrastructure Bank in the President’s 

budget signals a new direction in transportation policy that evaluates projects based on national criteria like community development, congestion reduction, and environmental impact. I will work 

with the Secretaries in pursuing the President’s commitment to 

work closely with Congress, other Federal departments and agencies, the Nation’s Governors, and local elected officials to develop 

an integrated regional planning and development approach for all 

of our transit investment decision making. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM PETER M. ROGOFF 

Q.1. Reforming the New Starts Process—In the last authorization 

bill we attempted to streamline the New Starts process and add additional categories for consideration during project evaluation. Nevertheless, the process continues to take an inordinate amount of 

time and many of the factors Congress added, including economic 

development, still have not been implemented. 

I am interested in your thoughts on the overall process and what 

changes can be made to ensure that it can move forward more expeditiously while still conducting a thorough evaluation? 

A.1. As I mentioned in my testimony, I share your concerns and, 

if confirmed, I intend to focus on streamlining the project evaluation process as one of my first and highest priorities. Certainly, as 

stewards of Federal taxpayer dollars, and in a fiscal environment 
97 

where resource demands far exceed available funding, it is important that FTA—and local project stakeholders—have good information of project costs and benefits on which to base resource allocation decisions. If confirmed I must also consider that unnecessary 

delays in the evaluation process can cause increases in project 

costs. Working as we are within a tight funding environment, costly delays will inevitably cause us to build fewer projects—an unacceptable result in my view given our need to expand transit options. 

I am aware that in 2006, FTA hired Deloitte Consulting to analyze the New Starts program to identify opportunities for streamlining. If confirmed, I will plan to review those recommendations 

and determine which ones should be implemented, if not already 

implemented by the agency. In addition, I will conduct my own 

‘‘bottom up’’ streamlining review of the entire process in consultation with industry experts, project sponsors, and FTA staff. 

Q.2. State of Good Repair—I remain concerned about continuing to 

make investments in infrastructure without any requirement for 

maintaining a state of good repair long-term. The recently released 

Rail Modernization Study points to a significant backlog in unmet 

recapitalization needs at the Nation’s seven largest rail transit operators. However, these properties have received billions in Federal 

funding for new projects. 

What, in your view, can we do to make certain that we adequately monitor and ensure the long-term maintenance of these assets while ensuring appropriate growth to meet capacity demands? 

A.2. As part of the new starts project evaluation process, FTA is 

currently required to evaluate data to confirm that a project sponsor will have the financial ability to operate the proposed new service as well as sustain current and planned service levels throughout the system. The Rail Modernization Study should serve as a 

‘‘wake up call’’ for all concerned with the quality and safety of our 

major rail transit systems. It provides a stark picture that should 

inform the resource decisions of transit agencies as well as the resource decisions of policy makers who will craft the upcoming authorization bill. If confirmed, I will review the study to determine 

whether greater commitments to maintaining existing capital infrastructure should be considered as a condition for assistance under 

the new start program. 

A balance must be found that encourages the expansion of transit options while ensuring that transit agencies are not digging 

themselves into a ‘‘deferred maintenance hole’’ that could endanger 

the long-term viability of the transit agency and the safety of it 

passengers. I look forward to working with the Committee on this 

important issue. 

Q.3. Highway Trust Fund—The Administration’s budget proposes 

a greater reliance on the General Fund to finance Highway and 

Transit projects rather than the Highway Trust Fund. While we all 

recognize the fiscal difficulties the Highway Trust Fund is encountering, this Committee has heard testimony from various stakeholders, as well as the Secretary, that such a shift would create a 

significant amount of uncertainty in the program. 
98 

Given your experience on the Appropriations Committee, how do 

you view the shift to general fund monies to finance Highway and 

Transit projects, how would it impact the goals of the programs 

and do you believe that it could result in difficulties conducting 

long-range planning and raising capital? If so, are there other 

ways, in your view, that Congress could address this uncertainty? 

A.3. I am also concerned about the status of the mass transit account. If I am confirmed, I would welcome the opportunity to be the 

Administration’s advocate for public transportation by exploring innovative ways to generate a steady revenue source for transit. As 

I testified, I believe State and local jurisdictions have had some 

success in innovative financing and we at the Federal level can 

learn from that experience. In addition, having participated in 

budget battles as a Senate staff person for the last 22 years, I still 

think that it is easier to advocate for necessary resources when you 

can point to available balances in a designated trust fund—resources that were collected for the purpose of being spent on a designated activity—like highways, transit systems, or the upkeep and 

modernization of the national aviation system. I hope to play a 

vital role in crafting these solutions under the leadership of Secretary LaHood. 

Q.4. Innovative Financing—It is no secret that I am a proponent 

of pursuing innovative methods of financing to advance our infrastructure projects. However, I am disappointed that we have not 

made more progress, particularly as it relates to public transportation. The Secretary has stated that we must look to bold new approaches. 

I am interested in your views about how we can encourage greater utilization of innovative financing methods to advance public 

transportation projects. 

A.4. I believe there are great opportunities for innovative financing 

methods for transit projects. Moreover, the financing challenges we 

face moving forward are going to require us to utilize them to a 

greater degree while ensuring that program integrity is maintained. 

I am aware that FTA has piloted public–private partnerships in 

transit using the new authority provided in SAFETEA. This new 

authority allows for up to three public–private partnerships and 

FTA has been working with three transit agencies to pilot-test how 

private sector innovation and know-how can advance public transportation. I understand FTA has also conducted five workshops 

around the country to provide information about the benefits of 

public–private partnerships in transit. Public–private partnerships 

have shown promise as long as the interests of taxpayers and users 

are protected. 

Perhaps the greatest promise to expand innovative financing of 

transit projects is to be found in President Obama’s 2010 budget 

proposal to commit $5 billion to capitalize a National Infrastructure Bank. The bank would commit Federal funds to large capital 

projects through a wide variety of mechanisms including mechanisms that attract State, local, and private co-investment. If confirmed, I would seek to work within the Administration to ensure 

that transit projects participate fully in the Bank’s investment 
99 

plans and that the Bank structures its assistance in a manner that 

will be workable for major transit projects. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR BAYH 

FROM PETER M. ROGOFF 

Q.1. On April 30, 2008, the Federal Transit Administration (FTA) 

made final a new Charter Service Rule–604. In the final rule Section 604.11—Petitions to the Administrator—contains a process by 

which a recipient of Federal funding may petition for an exception 

from the private charter prohibitions for certain events. 

As FTA Administrator will you implement Section 604.11 to restrict the frequency with which a recipient may seek a petition? 

A.1. While I am not familiar with this particular provision of the 

charter service regulation, I believe that fairness and flexibility are 

important to ensure access to transportation services. If I am confirmed as FTA Administrator, I would review the charter service 

regulation to determine whether a restriction on a recipient’s ability to apply for an exception is helpful or acts as a hindrance in 

the provision of transportation to widely attended public events. 

Q.2. As FTA Administrator will you implement Section 604.11 

(b)(4)(i) to require a recipients petition to provide for a plan to integrate registered charter operators into the service where no third 

party contract exists? If not, please explain how you will balance 

recipients of Federal-aid with registered providers where no third 

party contract exists for events of national or regional significance? 

A.2. I believe that it is of critical importance to strike the right balance between access to transportation services and for-profit charter services. If I am confirmed as FTA Administrator, I pledge to 

examine the impact of FTA’s charter service regulation on events 

of regional or national significance where there is no third party 

contract. 

Q.3. As FTA Administrator will you implement Section 604.11 

(b)(4)(i) to include consideration of the national or regional events’ 

number of registered service providers’ buses engaged in private 

charter at the event compared to the number of recipient’s buses 

for which the petition is sought? 

A.3. As I testified, I plan to be a vocal advocate for public transportation. To that end, if I am confirmed, I would advocate for fairness 

in the application of the charter service regulation. If impediments 

exist to providing fair and efficient transportation to widely attended public events, I will analyze those challenges and work with 

interested parties to resolve them. 

Q.4. As FTA Administrator will you establish minimum characteristics for events of regional or national significance under Section 

604.11 (a)(1)? 

A.4. If there are not minimum characteristics for events of regional 

or national significance in the charter service regulation, then if I 

am confirmed as FTA Administrator, I would be willing to consider 

the establishment of such characteristics if that would better enable FTA to determine whether an exception to the regulation for 

an event of regional or national significance is appropriate. 
100 

Q.5. As FTA Administrator would an event with attendance of 

more than 200,000 participants qualify as an event of regional or 

national significance under Section 604.11 (a)(1)? Does an event of 

that size provoke safety or homeland security issues worthy of inclusion in the 604 analysis? 

A.5. If I am confirmed, I will look closely at the exception for 

events of regional or national significance to determine whether it 

is working as intended and whether minimum characteristics 

should be established such as the number of participants attending 

the event. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR WARNER 

FROM PETER M. ROGOFF 

Q.1. As you are probably aware, the Washington Metropolitan Area 

Transit Authority was created primarily to serve the Federal Government. However, not only is WMATA the only major U.S. transit 

agency without a significant source of dedicated funding (such as 

a sales tax), the local jurisdictions in which it operates do not receive property taxes from much of the property adjacent to Metrorail stations and Metrobus stops because it is owned by the Federal 

Government. WMATA continues to be essential to the operation of 

the Federal Government (e.g., Federal employees comprise nearly 

40 percent of WMATA’s peak period ridership), as well as a component for ensuring continuity of Federal Government operations during an emergency. Do you believe that WMATA has a unique relationship with the Federal Government and that there is a need for 

the Federal Government to ensure that the system remains in a 

state of good repair? 

A.1. I do believe that WMATA has a unique relationship with the 

Federal Government. As you note, WMATA provides many Federal 

workers, safe, reliable transportation to and from their jobs. Also, 

the general public relies heavily on WMATA to access government 

services and the Capital Region. 

As a recent report commissioned by the Appropriations Committee reveals, maintaining the Nation’s bus and rail systems in a 

State of Good Repair is essential if public transportation systems 

are to provide safe and reliable service to millions of daily riders. 

That report studied the conditions and needs of the seven largest 

rail transit agencies, including WMATA. If I am confirmed as FTA 

Administrator, I will take an active interest in WMATA’s new 

multiyear capital improvement program, which becomes effective in 

July 2010, and is designed to address upkeep and maintenance of 

the system. I also support FTA’s decision to tie the Dulles Corridor 

Metrorail project’s funding eligibility to the state of good repair for 

WMATA. As part of that effort, the Commonwealth of Virginia, the 

State of Maryland, and the District of Columbia agreed to commit 

to fund the significant capital rehabilitation necessary for the overall system to enter into and maintain a state of good repair. That 

arrangement may serve as the model for future Federal funding 

agreements so that the Federal Government can ensure that transit agencies seeking to expand their infrastructure are also taking 

adequate care of their existing infrastructure. Since WMATA service to the Capital region is so essential, I believe every effort needs 
101 

to be made to keep the system up and running safely and efficiently. 

RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD 

FROM FRANCISCO J. SANCHEZ 

Q.1. What was the extent of your involvement in the business of 

the Florida-based company Renaissance Steel and its receipt of a 

grant from the Corporation to Develop Communities of Tampa Incorporated? 

A.1. In the summer of 2003 I joined the Board of the Community 

Development Corporation of Tampa (‘‘CDC of Tampa’’). CDC of 

Tampa is a nonprofit 501(c)3 organization dedicated to alleviating 

poverty and physical deterioration in the East Tampa area. 

In the summer of 2005, CDC of Tampa staff engaged in discussions with Renaissance Steel, a start-up light-gauge steel manufacturing company located in East Tampa, about applying for a Department of Health and Human Services (‘‘HHS’’) grant to support 

Renaissance Steel’s efforts to create manufacturing jobs in East 

Tampa. I did not participate in these discussions, and had no relationship with Renaissance Steel at the time. Following these discussions, the CDC of Tampa staff informed the Board of Directors 

that it had applied for a $700,000 grant from HHS, and planned 

to loan $500,000 in start-up capital to Renaissance Steel. 

In September 2005, HHS informed CDC of Tampa that its grant 

application was approved for funding. 

In April 2006, I was hired by Renaissance Steel as its Chief Executive Officer. At this time, Renaissance Steel was struggling to 

penetrate the market and make sales. In July 2006, CDC of Tampa 

loaned Renaissance Steel $500,000 from its HHS grant for job 

training, hiring workers, equipment and working capital. The CDC 

of Tampa Board of Directors approved the loan to Renaissance 

Steel, but I recused myself from this process because of my new relationship with Renaissance Steel. 

In May 2007, I resigned from the CDC of Tampa Board of Directors. In July 2007, although Renaissance Steel’s sales figures improved, the company experienced cash flow difficulties, and it did 

not have enough money to meet its payroll. I made an unsecured 

personal loan of $160,000 to Renaissance Steel, so it could pay its 

employees. 

In November 2007, Renaissance Steel ceased operations, and I 

resigned my position as CEO. Debts to some creditors, including 

CDC of Tampa, remained outstanding. I did not recoup $350,000 

in personal loans and guarantees that I made to Renaissance Steel 

during my tenure. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM FRANCISCO J. SANCHEZ 

Q.1. Please share with the Committee how you would use your office to promote U.S. exports? 

A.1. ITA plays an important role in creating and sustaining highpaying jobs by helping U.S. businesses export, working for continued and greater access to foreign markets, and advocating for a fair 
102 

trade environment. The Commerce Department, as the chair of the 

interagency Trade Promotion Coordinating Committee (TPCC), has 

the lead role in ensuring that all U.S. export promotion programs 

and resources are deployed in a strategic and effective manner. If 

confirmed, I will work to ensure that the Department’s export promotion programs, and those of the TPCC member agencies, maximize the competitiveness of U.S. businesses in the global marketplace. I will look forward to supporting the Secretary in his consultations with other TPCC agencies to develop a strong set of national priorities for boosting U.S. exports. 

Q.2. If confirmed, do you plan to focus on opening markets for any 

specific industries in any specific countries? 

A.2. In spite of the global scope of the economic downturn, willing 

buyers still exist abroad and many markets continue to grow. 

Economies in developing countries in Asia, led by China and India, 

are expected to grow by almost 5 percent this year, and regional 

economies in the Middle East and Africa are expected to grow more 

than 2 percent this year. If confirmed, I will work to maintain and 

improve access to these and other important markets. 

Our trade promotion priorities should be closely aligned with the 

President’s economic recovery and reinvestment goals. In the short 

term, if confirmed, I will look to create jobs by helping U.S. companies that currently export to continue doing so, and by encouraging 

more U.S. companies to export. Also, if confirmed, I would strive 

to ensure that, in the long term, new U.S. technologies in sectors 

like clean energy, smart grids, and healthcare lead to increased export opportunities around the world. 

ITA will play an important role in supporting Administration efforts to build on existing trade agreements and in negotiating new 

ones in consultation with Congress and key stakeholders. If confirmed, I will ensure that ITA’s resources are used to their maximum in achieving trade agreements that create opportunities for 

all Americans. 

Q.3. I would like you to discuss how, if confirmed, you would work 

to ensure that American firms are not victims of unfair trading 

practices and what you believe can be done to ensure countries live 

up to their WTO obligations? 

A.3. I am committed to vigorous enforcement of our trade laws, and 

to ensuring that domestic industries obtain effective relief from unfair trade practices. The Department of Commerce offers a wide variety of assistance to U.S. producers in connection with U.S. laws 

regarding unfair trade and, if confirmed, I will see to the effective 

administration of those laws. 

It is important that the laws, practices and policies of other governments be consistent with their WTO obligations. If confirmed, 

I will make sure that vigilant monitoring of our trading partners 

is maintained, and that timely and effective advocacy on behalf of 

U.S. companies facing foreign market barriers and unfair trade 

practices continues. 

Furthermore, with respect to the Doha negotiations, I will, if confirmed, firmly press for an outcome that maintains the integrity of 

our trade remedy laws. 
103 

Q.4. Please discuss your past role as CEO of Renaissance Steel and 

the grant awarded to Renaissance Steel by the Corporation to Develop Communities of Tampa, Inc. (CDC). 

A.4. In the summer of 2003 I joined the Board of the Community 

Development Corporation of Tampa (‘‘CDC of Tampa’’). CDC of 

Tampa is a nonprofit 501(c)3 organization dedicated to alleviating 

poverty and physical deterioration in the East Tampa area. 

In the summer of 2005, CDC of Tampa staff engaged in discussions with Renaissance Steel, a start-up light-gauge steel manufacturing company located in East Tampa, about applying for a Department of Health and Human Services (‘‘HHS’’) grant to support 

Renaissance Steel’s efforts to create manufacturing jobs in East 

Tampa. I did not participate in these discussions, and had no relationship with Renaissance Steel at the time. Following these discussions, the CDC of Tampa staff informed the Board of Directors 

that it had applied for a $700,000 grant from HHS, and planned 

to loan $500,000 in start-up capital to Renaissance Steel. 

In September 2005, HHS informed CDC of Tampa that its grant 

application was approved for funding. 

In April 2006, I was hired by Renaissance Steel as its Chief Executive Officer. At this time, Renaissance Steel was struggling to 

penetrate the market and make sales. In July 2006, CDC of Tampa 

loaned Renaissance Steel $500,000 from its HHS grant for job 

training, hiring workers, equipment and working capital. The CDC 

of Tampa Board of Directors approved the loan to Renaissance 

Steel, but I recused myself from this process because of my new relationship with Renaissance Steel. 

In May 2007, I resigned from the CDC of Tampa Board of Directors. In July 2007, although Renaissance Steel’s sales figures improved, the company experienced cash flow difficulties, and it did 

not have enough money to meet its payroll. I made an unsecured 

personal loan of $160,000 to Renaissance Steel, so it could pay its 

employees. 

In November 2007, Renaissance Steel ceased operations, and I 

resigned my position as CEO. Debts to some creditors, including 

CDC of Tampa, remained outstanding. I did not recoup $350,000 

in personal loans and guarantees that I made to Renaissance Steel 

during my tenure. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM FRANCISCO J. SANCHEZ 

Q.1. We have heard much concern from the district export councils 

in Ohio that the US Commercial Service is underfunded and has 

several officer positions overseas that are unfilled. What are your 

plans for the U.S. Commercial Service moving forward in order to 

assist American companies in beginning and expanding their export business? 

A.1. The U.S. & Foreign Commercial Service (CS) is a critical part 

of the International Trade Administration. Under my leadership, if 

confirmed, CS will continue to ensure that U.S. companies, particularly small and medium-sized businesses, benefit from global trade. 

Through CS’s global network of trade professionals in 109 U.S. cities, and in U.S. Embassies and Consulates in 77 countries, CS staff 
104 

will continue to work with U.S. companies by providing counseling, 

advocacy and market research, hosting and participating in trade 

events, and identifying potential international buyers or partners. 

CS will maintain its program focus on three priorities: increasing 

the number of U.S. companies that export; helping smaller companies expand into new export markets; and assisting exporters overcome hurdles in foreign markets. In addition, if confirmed, I will 

undertake a full review of CS’ budget with a view to ensuring that 

there is adequate funding for this critical activity. 

Q.2. What are your thoughts on the Government of China’s challenge at the WTO of eight U.S. antidumping and countervailing 

duty determinations? How would you, if confirmed, ensure adequate defense of these determinations and would you enlist the assistance of other like-minded Nations? 

A.2. I am committed to strong enforcement of our trade laws, and 

to ensuring that domestic industries obtain effective relief from unfair trade practices. Therefore, if confirmed as Under Secretary, I 

will make sure that Commerce continues to defend our rights to 

address unfairly traded imports to the fullest extent, including 

with respect to these eight determinations. 

Q.3. I believe it is difficult to address our manufacturing crisis 

without addressing our trade imbalance. In what ways do you 

think the International Trade Administration can address our 

trade deficit? What role do you envision for the position of Assistant Secretary for Manufacturing and Services? 

A.3. Manufactured products account for some 80 percent of U.S. 

goods exports. It is critical that we expand export markets for our 

manufacturers as a means to enhance economic recovery and restore jobs. ITA brings a critical set of tools to this effort including 

programs that help U.S. manufacturers become more competitive, 

contribute to reduction of foreign barriers to U.S. exports, increase 

the number of export-ready firms and expand U.S. exports in key 

emerging market and sectors. If confirmed, I will rely on the Assistant Secretary for Manufacturing and Services to be the ‘‘eyes 

and ears’’ for ITA in identifying key competitiveness challenges facing U.S. manufacturing and to advise me on high impact programs 

and policies that can enhance competitiveness. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR CRAPO 

FROM FRANCISCO J. SANCHEZ 

Q.1. Please explain your views on the Industry Trade Advisory 

Committees (ITACs) that currently assist the USTR and Department of Commerce in developing our Nation’s Trade policy. 

A.1. The ITACs provide the Department of Commerce and Office 

of the United States Trade Representative (USTR) critical information and perspectives, which are used to develop U.S. trade policy. 

Having an effective mechanism in place that allows for a candid exchange between the private sector and government is vital to formulating and implementing an effective trade policy. If confirmed, 

I look forward to working with Ambassador Kirk and the industry 

representatives who serve as advisors on these committees. 
105 

Q.2. I understand that these Committees have proved to be a valuable resource in securing trade agreements and policies that benefit our Nation’s industries. With this in mind, do you have concern 

that opening these committees to additional and varied interest 

groups might dilute their importance or impede the free exchange 

of ideas within the committees? 

A.2. The issue of where nongovernmental organizations (NGOs) 

and other nonindustry stakeholders belong in the trade advisory 

committee system needs to be resolved. However, I do not have any 

preconceptions on this issue. If confirmed, I will use the upcoming 

ITAC rechartering process as an opportunity to work closely with 

USTR in finding the appropriate mechanisms with which to reach 

out to and consult with NGOs and other nonindustry stakeholders, 

and to determine if there are opportunities to expand their participation in the trade advisory committee system. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM RAPHAEL W. BOSTIC 

Q.1. Involvement with IndyMac—Mr. Bostic, you were an independent director of two subsidiaries of IndyMac bank from 2005 to 

2008. When IndyMac failed last year, it was at the time the 3rd 

largest bank failure in U.S. history. You have been named in a lawsuit against IndyMac, which alleges that the bank committed fraud 

in its underwriting of mortgage loans. 

Would you please explain what type of businesses the IndyMac 

subsidiaries on whose boards you served were engaged in and what 

role you had in overseeing those subsidiaries as a director? 

A.1. I was an independent director of IndyMac ABS and IndyMac 

MBS, which were limited purpose finance subsidiaries that executed securitizations of loans made by IndyMac Bank FSB. The 

Bank originated loans based on its established guidelines, determined which loans to aggregate into pools, and designed the content of the specific securitizations. I never saw loan pools or individual loans and did not discuss underwriting standards, practices, 

or business strategies of the Bank. The MBS and ABS subsidiaries 

purchased the loan pools and followed SEC regulations to transform them into saleable securities offered for sale to the secondary 

market through investment banks. The chief responsibility of the 

ABS/MBS organizations was to ensure that the registration documents and prospectuses (certified by independent auditors) conformed to SEC rules, indentures, statutes, and regulations. ABS 

and MBS did not originate or underwrite loans, nor were they 

linked to IndyMac Bank’s decisions regarding underwriting standards, practices, or business strategies. As an independent director, 

my job was focused on seeing that the securitization process as a 

whole conformed to SEC regulations. I relied on information provided to me by management and employee board members and 

similarly relied on management to oversee specific securitizations. 

The ABS/MBS boards met only a few times a year, often virtually, 

to deal with basic organizational issues. 

Q.2. Federal Reserve’s Regulation of Mortgage Lending—Mr. 

Bostic, the Federal Reserve has been widely criticizing for not exer-
106 

cising its authority under the Home Ownership and Equity Act, or 

HOEPA (‘‘HOPE–AH’’) to issue rules to address well-known abusive mortgage lending and advertising techniques prevailing in the 

market place during the past decade. The Fed did not issue rules 

until last year, well after the housing bubble had burst. 

Since you studied housing issues while you were an economist 

with the Fed, could you give your view on why the Fed was so slow 

to issue HOEPA rules? 

A.2. There was not consensus among Board governors as to the 

need to update HOEPA rules. As the late Governor Gramlich noted 

in his book, there were serious discussions on these and related 

issues, but he did not prevail in most instances. When Gramlich resigned from the Board, no voice with his strength or clarity 

emerged to carry that torch. 

Q.3. Do you think the Fed’s failure to issue new HOEPA rules in 

a timely manner contributed to the ongoing problems in our housing market? 

A.3. Additional restrictions and limitations on the mortgage market would have helped mitigate the negative outcomes to some degree. However, the market has proven to be extremely nimble in 

responding to restrictions. Research that I and co-authors have recently [in the last few weeks] considered has shown that the market adapts to legal strictures and finds alternative products that 

achieve similar goals in terms of reducing monthly mortgage payments and generating transactions. That said, the research considers the entire market, and does not account for the fact that not 

every broker or lender would adapt. Thus, for some, there would 

have been benefits from more proactive Fed issuance of new 

HOEPA rules. 

RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD 

FROM SANDRA HENRIQUEZ 

Q.1. Replacement of Public Housing—An ongoing policy debate is 

the question of replacement of public housing units lost through 

demolition, disposition or other revitalization actions. When deciding how to replace these units, local agencies are often called upon 

to balance the needs of residents, unassisted eligible families, others in the community, housing market composition, and available 

funding. As Executive Director of the Boston Housing Authority, 

you have likely encountered this question in the administration of 

HOPE VI and other revitalization efforts. 

What insights into this important issue have your experiences at 

the BHA given you? 

What principles or objectives do you think should guide Federal 

and local policy in this arena? 

A.1. Your question raises several important but competing policy 

concerns in affordable and public housing. In Boston, we have used 

successfully the HOPE VI funding to do mixed finance redevelopment of some of our most distressed public housing properties. Because we have no available additional land upon which to build, 

the BHA has redeveloped units within the existing footprint of the 

distressed property. Our policy has been to diversify incomes in the 
107 

new property, creating some market rate units, while returning a 

significant portion of all units as public housing or otherwise deeply affordable. We do this to re-house as many residents of the distressed property as possible (generally 75 percent to 80 percent). 

With community support services, we work to grow the incomes of 

returning public housing residents, rebuilding the former community. In recent redevelopment efforts, whether with Federal or 

State funds, the BHA tries to create as many or more units than 

in the original development. 

In order to balance further the needs of Boston’s unassisted eligible families, the BHA has partnered with its sister agencies to increase affordable rental production, we have converted tenantbased vouchers to project-based, to provide deeper affordability for 

families and individuals. When we do this, we require that for 

those project-based voucher units, the developer/owner use the 

housing authority’s waiting lists to occupy them. 

Based on my experience in Boston, I think that redevelopment 

of public housing cannot be entirely prescriptive. Housing Authorities should be leading redevelopment efforts in their communities 

guided by (1) returning to the marketplace, as many public housing 

units as possible, in order to serve the same number of economically eligible families; (2) providing other affordable housing opportunities for those not returning to the redeveloped property; (3) 

conducting an intense and ongoing participatory process with residents, beginning with the decision to redevelop, its implications for 

residents and the surrounding neighborhood, design, relocation, 

supportive services delivery and management policies and practices; and, (4) ensuring the implementation of healthy homes and 

green building principles in the construction of the property. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM SANDRA HENRIQUEZ 

Q.1. Public Housing Authorities—Ms. Henriquez, the Boston Housing Authority, where you have been for the past 13 years, is the 

largest public housing authority in New England. You also served 

as President of the Council of Large Public Housing Authorities. 

How will you ensure that your decisions at HUD take into account the effects on small housing authorities, which may be different than the effects on large housing authorities? 

A.1. As a public housing executive director, my specific advocacy focused on HUD decisions as they affected large housing authorities. 

At the same time, I have participated in many forums that deal 

with all housing authorities—large, medium, and small, advocating 

on issues that affected every housing authority, regardless of size. 

If confirmed as HUD Assistant Secretary I will look forward to engaging in vigorous dialogue about the issues faced by our small 

housing authorities and the potential solutions. Such communication is essential since small housing authorities comprise a significant number of our PHA clients. I intend to work with them to ensure HUD’s decisions take into account the differences among our 

various-sized housing authorities. 

Q.2. Funding of Public Housing Authority Programs—Ms. 

Henriquez, in 2004 you co-authored an article criticizing HUD’s 
108 

funding decisions for Section 8 programs and in 2007, in testimony 

before this Committee’s Housing Subcommittee, you criticized 

HUD’s decision to cut Hope VI programs. 

Once you join HUD, how will you balance your concerns that 

public housing authorities get the money that they need with the 

reality that HUD’s funds are limited? 

A.2. If confirmed as a member of the Administration, I will advocate for a stable, transparent, and predictable funding environment 

for the Housing Choice Program. I intend fully to represent the administration in its budget deliberations and am prepared to make 

critical recommendations recognizing the myriad of priorities managed by HUD and other agencies covered by our Appropriations 

committee. 

With regard to HOPE VI, the President’s 2010 budget requests $250 million for a new initiative called Choice Neighborhoods that 

builds on the successes of the HOPE VI program to transform 

neighborhoods of concentrated poverty into functioning, sustainable 

neighborhoods. Housing authorities will be eligible to apply for 

these grants, in the range of $25–$35 million, to address the same 

types of developments that were funded under the HOPE VI program. These funds will help supplement the money housing authorities have already received under the Recovery Act and the 

capital funding housing authorities will receive as part of the FY09 

Capital Fund appropriation. 

If confirmed, I intend to represent well the Administration, and 

to work with Congress and HUD’s various stakeholders to ensure 

a full participatory process. 

RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD 

FROM MERCEDES MA ́ RQUEZ 

Q.1. Findings: 2007 Audit of the Los Angeles Housing Department’s (LAHD) Loan Portfolio Management—A 2007 City of Los 

Angeles audit of the Department you began managing in 2004 

found that the LAHD needed ‘‘to significantly improve its management controls to better manage its loan portfolio.’’ Issues cited included concentrated risk among a relatively few borrowers, lack of 

adequate information systems to track loan performance, and inability to pursue maximum revenues through collection procedures 

and timely review of certain borrowers’ financial statements. 

The auditor also noted that LAHD’s management concurred with 

the findings, recognized the need for improvement, had begun addressing some of the concerns, and had committed to addressing 

the recommendations. A contemporaneous press report quoted you 

as saying that ‘‘The direction that the controller goes in, I would 

agree with because it’s the same direction I’ve been going in for 3 

years.’’ 

Please respond to these audit findings for the record, including: 

your view of these findings; what actions you took, if any, to address these concerns; and whether these actions provide you with 

experiences that will inform your work at HUD, if confirmed? 

A.1. I welcomed the audit as an opportunity to continue to improve 

the department’s performance and generally agreed with the findings. In fact, my own department-wide assessment in 2004 found 
109 

many of the same issues, and I initiated measures to address the 

problems independently and before the audit recommendations 

that were issued in the fall of 2007. 

For example, my assessment showed revenue collection through 

the timely review of borrower’s financial statements could not be 

completed with the existing staffing levels. 

Therefore, in the fall of 2005 for the fiscal year beginning July 

2006, I fought for additional staffing for this purpose. This staff has 

been on board since late 2006, but the benefits of their work did 

not begin within the timeframe audited. Moreover, one of the only 

audit recommendations I chose not to implement was to conduct 

the review of borrower statements biannually. Rather, we conduct 

them every year, and this has led to a 514 percent increase in revenue generation from this type of loan. 

Since the tax credit scoring system requires experience for an 

award, I addressed the issue of risk concentration from the front 

end by expanding the pool of developers who applied to the Department for funding. I worked to ensure that for-profit developers, 

who previously hesitated to partner with the Department, had confidence that an entrepreneurial approach now existed at the Department. 

Finally, with the exception of two items related to loan write offs 

that the City Attorney’s Office advised the Department not to implement because that would have had the effect of reducing the 

revenue collected by the Department, all the audit recommendations have been implemented or in the case of long-term information technology solutions are in the process of being implemented. 

I believe strongly that had I not initiated a department-wide assessment immediately upon my arrival, additional and significant 

findings would have been made. For example, Project Clean House 

restored over $50 million in Federal funds to the Department’s loan 

accounts that had been sitting idle in inactive or poorly designed 

projects. Like many of the other issues at the Housing Department, 

this problem was rooted in an unwillingness to look at programs 

and processes with fresh eyes, and to then jettison moribund policies when necessary. I hope to bring the same vision to CPD. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM MERCEDES MA ́ RQUEZ 

Q.1. A 2007 audit report from the Los Angeles Controller identified 

a number of problems in the way that the Department of Housing 

manages its $735 million loan portfolio, such as making new loans 

to borrowers who are in default on other loans, failing to take action on delinquent loans, failing to monitor compliance with loan 

covenants, failing to review financial statements from residual receipt borrowers, and failing to maintain an adequate loan tracking 

system. Although some of these problems began prior to your tenure as General Manager of the Department, the report included a 

number of recommendations that it deemed to be in urgent need 

of management attention. How did you address the Controller’s recommendations? If there were any recommendations that you did 

not address, why did you decide not to address them? What steps 
110 

do you plan to take to prevent similar problems in the Office of 

Community Planning and Development? 

A.1. I welcomed the audit as an opportunity to continue to improve 

the department’s performance and generally agreed with the findings. In fact, my own department-wide assessment in 2004 found 

many of the same issues, and I initiated measures to address the 

problems independently and before the audit recommendations 

that were issued in the fall of 2007. 

For example, my assessment showed revenue collection through 

the timely review of borrower’s financial statements could not be 

completed with the existing staffing levels. Therefore, in the fall of 

2005 for the fiscal year beginning July 2006, I fought for additional 

staffing for this purpose. This staff has been on board since late 

2006, but the benefits of their work did not begin within the timeframe audited. Moreover, one of the only audit recommendations I 

chose not to implement was to conduct the review of borrower 

statements biannually. Rather, we conduct them every year, and 

this has led to a 514 percent increase in revenue generation from 

this type of loan. 

Finally, with the exception of two items related to loan write offs 

that the City Attorney’s Office advised the Department not to implement because that would have had the effect of reducing the 

revenue collected by the Department, all the audit recommendations have been implemented or in the case of long-term information technology solutions are in the process of being implemented. 

I believe strongly that had I not initiated a department-wide assessment immediately upon my arrival, additional and significant 

findings would have been made. For example, Project Clean House 

restored over $50 million in Federal funds to the Department’s loan 

accounts that had been sitting idle in inactive or poorly designed 

projects. Like many of the other issues at the Housing Department, 

this problem was rooted in an unwillingness to look at programs 

and processes with fresh eyes, and to then jettison moribund policies when necessary. I hope to bring the same vision to CPD. 

Q.2. In 2007, the Department of Housing allowed employees to volunteer for Habitat for Humanity during work time. You reportedly 

explained that the volunteer project was ‘‘well within [the Department’s] mission.’’ Do you consider participation in similar volunteer 

programs to be within the mission and job descriptions of HUD’s 

Office of Community Planning and Development? If so, what types 

of volunteer programs are within the Office’s mission and consistent with its responsibilities? If you plan to encourage employees 

to participate in similar volunteer programs at HUD during work 

hours, will it be your practice to require them to make up those 

work hours to fulfill the job responsibilities that they were unable 

to complete while volunteering? 

A.2. The Habitat for Humanity project represented a unique opportunity for the department that is unlikely to be duplicated at HUD. 

First, the Department was the project sponsor and provided funding directly to the project, whereas HUD typically does its work 

through State and municipal bodies. This difference in mission and 

operational relationship to projects gives the Housing Department, 

I believe, a closer nexus to staff participation of this kind. In addi-
111 

tion, approximately one-third of the Housing Department is composed of Code Enforcement staff, most of whom have a background 

in construction. This uniquely qualified staff expressed a strong interest in participating in the project and their work contributed in 

a significant way to its success. 

Q.3. In May 2007, the Los Angeles Times reported that the Los An- geles Housing Department paid nearly $20,000 to bring in a trainer 

to help Department managers ‘‘center’’ themselves through breathing exercises and stick play. Did you find these management seminars useful and do you plan to use similar techniques at HUD? If 

so, please describe the types of seminars that you anticipate using 

and estimate how much you expect to include in your office’s budget for programs of this nature. 

A.3. Over a 2-year period LAHD managers participated in training 

sessions focused on change-management/strategic thinking. These 

sessions touched on strategic thinking, handling conflict and 

change, strategic positioning, moving and sustaining change within 

organizations, identifying opportunities and leveraging strengths, 

and strategic planning. The training focused in on the mission and 

actual work of LAHD to teach these concepts. For example, the 

team produced the first working outline of what would significantly 

contribute to LAHD’s proposal for the Mayor’s 5-year Housing 

Plan. 

The training also incorporated physical exercises that have come 

to typify a significant percentage of Team Development workshops 

(i.e., Outward Bound concepts) that use outdoor and physical activity to help people work as a team building trust, relationship, and 

learning to deal calmly with conflict without avoidance. 

This training was successful. However, I believe that it was successful because it was tailored to the specific issues faced by the 

Los Angeles Housing Department. 1 have no current plan for any 

leadership training at HUD. 

Q.4. Enhanced Reliance on Data—Ms. Ma ́ rquez, in your written 

statement, you described the initiative that Los Angeles undertook 

to map the city to identify areas of greatest need. 

Have you thought of similar ways in which HUD’s Office of Community Planning and Development might use enhanced data analysis to determine where HUD assistance is needed most? 

A.4. If confirmed, I will work in partnership with HUD’s Office of 

Policy Development and Research and the Chief Information Officer to improve substantially the quality of HUD’s mapping capabilities. I understand that the Department is already moving in 

this direction. HUD has made information available to grantees on 

what neighborhoods are most at risk of foreclosures and problems 

with vacancy in order to help jurisdictions plan the most effective 

use of their first round of Neighborhood Stabilization Program 

funds and to serve as a tool for selecting target neighborhoods in 

the application process for the second Neighborhood Stabilization 

Program funded under the American Recovery and Reinvestment 

Act of 2009. That mapping system can be linked from 

www.hud.gov/nsp. In addition, HUD is moving forward with getting special tabulation data from the U.S. Census Bureau showing 

housing needs with American Community Survey data. HUD’s plan 
112 

is to begin updating these data annually starting in 2010. If confirmed I will work to make as much data as possible available in 

easy-to-use formats so that grantees and the general public can 

quickly identify both problems and opportunities for addressing 

needs for both housing and community development. 

Q.5. Avoiding Undue Interference with the Market—Ms. Ma ́ rquez, 

an article in The Nation last year noted your concern that communities not be forced to rush into putting Federal aid dollars to work 

buying up foreclosed properties. You were quoted as saying, ‘‘You 

don’t want to get in the way of the market.’’ 

At HUD, what steps will you take to ensure that the local governments in the communities with which you are working are not 

displacing a functioning marketplace? 

A.5. For Neighborhood Stabilization Program funds to have a positive impact, they need to be spent in neighborhoods where the 

housing market is not functioning. In those neighborhoods hardest 

hit, the market is not able to absorb the number of foreclosures and 

neighborhood stabilization activities have the potential to stem, 

halt, and hopefully reverse the downward spiral of foreclosure and 

abandonment that leads to crime, blight, continued decline in property values, leading to additional foreclosure and abandonment. In 

these neighborhoods, targeted intervention can make a difference. 

The competitive round of the Neighborhood Stabilization Program will target neighborhoods in need of intervention, by geographic targeting using HUD data a threshold requirement. HUD 

requires applicants to analyze market conditions and demand factors in the targeted neighborhoods that will consider the potential 

for market absorption of foreclosed and abandoned properties. As 

such, the competition is designed to ensure that selected recipients 

will run programs that do not displace a functioning marketplace. 

If confirmed, I will take steps to make sure that recipients of both 

the formula and competitive programs have the sufficient data 

tools, technical assistance, and oversight to ensure that Federal 

dollars have a positive impact. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY 

FROM MICHAEL S. BARR 

Q.1. Federal Reserve’s Regulatory Role—Mr. Barr, one of the key 

questions this Committee and the Administration will have to answer as we consider regulatory reform this year is what should be 

the role of the Federal Reserve. Some have suggested that the Fed 

become a super-regulator, with broad authority to regulate systemic risk. Others, however, have expressed concerns that the 

Fed’s ability to be an effective regulator is undermined by its already large portfolio of responsibilities. 

Do you have any concerns that the Federal Reserve presently has 

too many responsibilities? 

Do you think that it is appropriate to give the Federal Reserve 

such a key role in our economy without restructuring the Fed? For 

example, should the presidents of the Fed’s regional banks continue 

to be selected by the same banks the Fed is supposed to regulate? 
113 

A.1. As the Secretary of the Treasury has laid out in his outlines 

for comprehensive regulatory reform, he has made it clear that one 

of the fundamental lessons of the current financial crisis is that an 

independent government agency needs to have responsibility to 

identify and reduce threats to the stability of the financial system 

and must have all the authority, focus, and discipline necessary 

and appropriate to fulfill that responsibility. My understanding is 

the Department of the Treasury will propose that this regulator 

needs to have authority to regulate and supervise all systemically 

important financial firms and payment and settlement systems and 

that this regulator also needs to have authority to collect information to detect emerging threats from systemically important financial markets. As the Treasury weighs competing proposals on how 

to structure comprehensive regulatory reform, my understanding is 

that substantial attention will be given to determining the right 

portfolio of responsibilities to accord the Federal Reserve. Preserving the independence of the Federal Reserve and ensuring the 

robustness of its supervisory function will be a critical priority. 

Problems of regulatory arbitrage, lax supervision, and gaps in 

the system for prudential supervision have contributed greatly to 

the current financial crisis. My understanding is that the Treasury 

is undergoing an examination of the broad regulatory architecture 

with a view to eliminating gaps and opportunities for arbitrage, to 

better align the structure so that accountability accompanies responsibility, and to promote better governance. 

Q.2. TARP—Mr. Barr, in Congressional testimony you gave last 

year, you reflected on the nature of the Federal Government’s recent bailout efforts by noting that ‘‘Ad hoc intervention is no substitute for a system of financial regulation.’’ The ad hoc bailouts 

Treasury and the Fed have engineered during the past year have 

not served our economy well. 

If we are to avoid ad hoc interventions in the future, however, 

we will need to address our ‘‘Too Big To Fail’’ Problem. 

How serious is our ‘‘Too Big To Fail’’ problem and what do you 

think is the best way to minimize it? 

Do you think that banks that are considered ‘‘Too Big To Fail’’ 

should be broken up? 

A.2. As the Treasury Secretary has outlined in his proposals on 

systemic risk, this crisis has made clear that certain large, interconnected firms and markets need to be under a more consistent, 

and more conservative regulatory regime. The new regulatory regime cannot simply address the soundness of individual institutions, but must also ensure the stability of the system itself. We 

need to strengthen our system of prudential supervision across the 

financial sector. We must improve the quality of capital, ensure 

that we have better measures of risk, and require that all firms 

build up more capital during good economic times so that they have 

a more robust protection against losses in down times, and can continue to lend to America’s households and businesses, big and 

small, throughout the economic cycle. 

In addition to imposing a more conservative regulatory regime on 

the largest, most interconnected firms, it is also important to have 

in place a resolution regime that permits the government to resolve 
114 

in an orderly fashion any financial firm—no matter how large— 

whose disorderly failure threatens financial stability. 

While asset size is one characteristic of firms that could pose a 

risk to our financial system, other characteristics include the financial system’s interdependence with the firm and its relative role in 

the provision of credit and liquidity to the economy. Strong steps 

must be taken to limit the risk posed by these firms. For example, 

requiring a systemically important firm to hold much higher levels 

of regulatory capital helps to level the playing field and at the 

same time bolsters the resources of the firm to support those risks. 

Q.3. Fannie and Freddie have been held in government conservatorship since September 2008 and billions of taxpayer dollars 

have been needed to keep them in operation. The details of the 

President’s budget were released this week, including a discussion 

on the future of GSEs, with options ranging from a gradual wind 

down of their operations and liquidation of their assets to returning 

Fannie and Freddie to their previous status as GSEs that are 

shareholder owned organizations with a public purpose. What are 

your views as to the future of Fannie and Freddie? How will you 

advise the Treasury Secretary to proceed as the December 31, 

2009, deadline for Treasury’s GSE MBS Purchase Program and 

GSE Lending Facility looms closer? 

A.3. The future of Fannie Mae and Freddie Mac will require careful consideration of the appropriate role of the Federal Government 

in the mortgage market. There are a number of options to consider, 

and if confirmed I look forward to working with Congress on evaluating those options. 

The Treasury’s GSE MBS Purchase Program was designed to 

provide added confidence to the mortgage market, and Treasury’s 

GSE Lending Facility was designed to provide an ultimate liquidity 

backstop. Since these programs were established, the Federal Reserve has also established programs much larger in size and scope 

to purchase GSE (and Ginnie Mae), MBS, and GSE debt. As we 

move closer to the December 31,2009, expiration of the Treasury 

programs, I look forward to evaluating the continued need for the 

Treasury’s program in light of current market conditions, the program announced by the Federal Reserve, and other ongoing or potential efforts in this area. 

RESPONSE TO WRITTEN QUESTIONS OF SENATOR KOHL 

FROM MICHAEL S. BARR 

Q.1. The illegal Freezing and garnishment of federally exempt 

funds from the bank accounts of recipients of Social Security, SSI, 

and Veterans Benefits is a serious problem across America—leaving many of our elderly and disabled citizens temporarily destitute 

for weeks at a time. Treasury has been working with the payor 

agencies, including the SSA and the VA, Federal banking regulators, and representatives of recipients, to develop a proposed Federal regulation that would resolve the problem. However, despite 

our repeated requests, this development process has not been completed. Can you commit to getting this process completed in your 

first month as Assistant Secretary for Financial Institutions? 
115 

A.1. I am fully committed to ensuring that Federal 

antigarnishment statutes are given full force and effect, and as one 

of my first priorities will work with colleagues in the Fiscal Service 

at the Treasury, as well as with Federal benefit agencies across the 

government, to complete the issuance of a joint regulation to solve 

the problem of account freezes and garnishment of protected funds. 

In addition, working with both consumer advocates and Federal 

bank regulators, I am confident that such a regulation will embody 

strong protections for Federal beneficiaries without imposing burdens or shifting liabilities to financial/institutions, which need better Federal guidance on how to respond to garnishment and attachment orders from State courts. Federal regulations and consumer 

protections must evolve in response to new debt collection tactics 

to protect the lifeline benefits of our most vulnerable citizens. 

Q.2. In addition to the illegal garnishment of exempt funds, there 

are numerous other ways that both banks and other financial service providers are depleting the benefits of our workers and our veterans. High cost loans, payday loans, and high bank fees, such as 

overdraft fees, are all currently permitted to be taken directly from 

Social Security and other benefit payments, which should be protected by law. We understand that this has been a problem since 

Treasury first wrote regulations under EFT 99 (the law passed in 

1996 requiring Federal funds to be electronically deposited). Although the Treasury initiated an inquiry about these issues in 

1998, nothing was done to ensure that these problems were resolved. Can you commit to addressing this serious problem in your 

first 6 months as Assistant Secretary for Financial Institutions? 

A.2. I believe that, as with account freezes and garnishment of protected benefits, this problem can be addressed through the joint efforts of the Treasury, Federal benefit agencies, and Federal bank 

regulators. The Treasury can enhance its regulations governing the 

routing of electronic Federal payments to help ensure that benefits 

are not deposited with third parties that deduct fees or loan repayments prior to allowing beneficiaries access to their funds. The 

Federal benefit agencies, in turn, must improve their policies and 

practices designed to prevent the assignment of Federal benefits to 

third party creditors and debt collectors. 
116 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 
129