<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:27870.wais]
S. Hrg. 109-414
NOMINATIONS OF: KEITH E. GOTTFRIED,
KIM KENDRICK, KEITH A. NELSON,
DARLENE F. WILLIAMS, FRANKLIN L. LAVIN,
ISRAEL HERNANDEZ, DARRYL W. JACKSON, AND
DAVID H. McCORMICK
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
ON
nominations of:
keith e. gottfried, of california, to be general counsel,
u.s. department of housing and urban development
__________
kim kendrick, of the district of columbia,
to be assistant secretary for fair housing and equal opportunity,
u.s. department of housing and urban development
__________
keith a. nelson, of texas, to be assistant secretary for
administration, u.s. department of housing and urban development
__________
darlene f. williams, of texas,
to be assistant secretary for policy development and research
u.s. department of housing and urban development
__________
franklin l. lavin, of ohio, to be under secretary for
international trade, u.s. department of commerce
__________
israel hernandez, of texas, to be assistant secretary for
trade promotion and director general of the u.s. and
foreign commercial service, u.s. department of commerce
__________
darryl w. jackson, of the district of columbia, to be assistant
secretary of export enforcement, u.s. department of commerce
__________
david h. mccormick, of pennsylvania, to be under secretary for
export administration, u.s. department of commerce
__________
SEPTEMBER 15, 2005
__________
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
RICHARD C. SHELBY, Alabama, Chairman
ROBERT F. BENNETT, Utah PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky EVAN BAYH, Indiana
MIKE CRAPO, Idaho THOMAS R. CARPER, Delaware
JOHN E. SUNUNU, New Hampshire DEBBIE STABENOW, Michigan
ELIZABETH DOLE, North Carolina ROBERT MENENDEZ, New Jersey
MEL MARTINEZ, Florida
Kathleen L. Casey, Staff Director and Counsel
Steven B. Harris, Democratic Staff Director and Chief Counsel
Mark A. Calabria, Senior Professional Staff Member
Skip Fischer, Senior Staff Professional
John O'Hara, Senior Investigative Counsel
Tewana Wilkerson, Republican Staff Director, Housing and Transportation
Subcommittee
Jonathan Miller, Democratic Professional Staff
Jennifer Fogel-Bublick, Democratic Counsel
Sarah L. Garrett, Democratic Legislative Assistant
Stephen R. Kroll, Special Counsel
Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
George E. Whittle, Editor
(ii)
C O N T E N T S
----------
THURSDAY, SEPTEMBER 15, 2005
Page
Opening statement of Senator Enzi................................ 2
Opening statements, comments, or prepared statements of:
Senator Santorum............................................. 3
Senator Dewine............................................... 4
Senator Reed................................................. 5
Senator Sarbanes............................................. 8
NOMINEES
Keith E. Gottfried, of California, to be General Counsel, U.S.
Department of Housing and Urban Development.................... 5
Prepared statement........................................... 26
Biographical sketch of nominee............................... 33
Kim Kendrick, of the District of Columbia, to be Assistant
Secretary for Fair Housing and Equal Opportunity, U.S.
Department of Housing and Urban Development.................... 9
Prepared statement........................................... 28
Biographical sketch of nominee............................... 46
Response to written questions of:
Senator Santorum......................................... 102
Senator Reed............................................. 104
Senator Crapo............................................ 107
Keith A. Nelson, of Texas, to be Assistant Secretary for
Administration, U.S. Department of Housing and Urban
Development.................................................... 11
Biographical sketch of nominee............................... 61
Darlene F. Williams, of Texas, to be Assistant Secretary for
Policy and Development and Research, U.S. Department of Housing
and Urban Development.......................................... 12
Biographical sketch of nominee............................... 70
Response to written questions of Senator Reed................ 108
Franklin L. Lavin, of Ohio, to be Under Secretary for
International Trade, U.S. Department of Commerce............... 18
Prepared statement........................................... 30
Biographical sketch of nominee............................... 77
Response to written questions of:
Senator Sarbanes......................................... 111
Senator Shelby........................................... 113
Senator Dole............................................. 115
Israel Hernandez, of Texas, to be Assistant Secretary for Trade
Promotion and Director General of the U.S. and Foreign
Commercial Service, U.S. Department of Commerce................ 19
Prepared statement........................................... 31
Biographical sketch of nominee............................... 85
Darryl W. Jackson, of the District of Columbia, to be Assistant
Secretary for Export Enforcement, U.S. Department of Commerce.. 20
Biographical sketch of nominee............................... 89
Response to written questions of Senator Shelby.............. 118
David H. McCormick, of Pennsylvania, to be Under Secretary for
Industry and Security, U.S. Department of Commerce............. 21
Biographical sketch of nominee............................... 96
Response to written questions of Senator Shelby.............. 119
NOMINATIONS OF:
KEITH E. GOTTFRIED, OF CALIFORNIA,
TO BE GENERAL COUNSEL,
KIM KENDRICK, OF THE DISTRICT OF COLUMBIA,
TO BE ASSISTANT SECRETARY FOR
FAIR HOUSING AND EQUAL OPPORTUNITY,
KEITH A. NELSON, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR ADMINISTRATION,
DARLENE F. WILLIAMS, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR
POLICY DEVELOPMENT AND RESEARCH,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
FRANKLIN L. LAVIN, OF OHIO,
TO BE UNDER SECRETARY FOR
INTERNATIONAL TRADE,
ISRAEL HERNANDEZ, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR TRADE PROMOTION
AND DIRECTOR GENERAL OF
THE U.S. AND FOREIGN COMMERCIAL SERVICE,
DARRYL W. JACKSON, OF THE DISTRICT OF COLUMBIA,
TO BE ASSISTANT SECRETARY FOR
EXPORT ENFORCEMENT, AND
DAVID H. McCORMICK, OF PENNSYLVANIA,
TO BE UNDER SECRETARY FOR
INDUSTRY AND SECURITY,
U.S. DEPARTMENT OF COMMERCE
----------
THURSDAY, SEPTEMBER 15, 2005
U.S. Senate,
Committee on Banking, Housing and Urban Affairs,
Washington, DC.
The committee met at 10:03 a.m., in room SD-538, Dirksen
Senate Office Building, Senator Michael B. Enzi presiding.
OPENING STATEMENT OF SENATOR MICHAEL B. ENZI
Senator Enzi. This hearing will come to order.
Today, the Committee will hold hearings on the first panel,
nominations of Keith Gottfried, to be the General Counsel at
the U.S. Department of Housing and Urban Development, Kim
Kendrick to be Assistant Secretary of Housing and Urban
Development for Fair Housing and Equal Opportunity, Keith
Nelson to be Assistant Secretary for Administration, Department
of Housing and Urban Development, and Darlene Williams to be
Assistant Secretary for Policy Development and Research, also
at the Department of Housing and Urban Development.
The second panel will be comprised of nominees for the
Department of Commerce. Before we begin, I would like the
witnesses to rise, raise their hands so that I may administer
the oath.
[Witnesses sworn.]
Senator Enzi. I would like to thank all the nominees who
are going to come before the Committee today. Over the course
of the last few months, my staff and I have had the pleasure of
meeting with many of you. I am impressed with your credentials
and I am confident that you have earned the honor of these
nominations. As we move forward with your nomination process, I
will be particularly interested in those nominees who will be
dealing with export administration and enforcement with the
Department of Commerce.
As many of you know, I have been working to reauthorize the
Export Administration Act for over 7 years now. During that
time, my staff and I have worked diligently with all parties to
craft legislation that would correct some of the shortcomings
in the current temporary regulation. In some ways, we have been
successful. I believe that we have educated some Members about
the importance of creating a strong export control system. We
have built consensus around some areas of reform.
Unfortunately, we have not been successful in passing
meaningful reform in the form of reauthorization of the Export
Administration Act. The Department of Commerce plays a critical
role in all of this. So far, the Department has streamlined
some of the licensing process and relieved some of the burden
of the technology companies by doing business overseas. I
applaud them on their efforts.
However, they need statutory authority to make substantive
improvements to law enforcement and control mechanisms.
Congress should be committed to granting that authority. The
Federal Government has limited resources to deal with control
of dual-use exports developed within the United States. Molding
export controls that focus our priorities on those products and
nations that may threaten our national security is good policy.
Not only will it make controls more effective, but it also will
strengthen our ability to craft multilateral controls that
truly keep our dual use technology out of the wrong hands.
It is very difficult for the United States to tell our
international partners to stop selling goods and technology to
bad actors, but we do not have a statute in place to control
our own sales. I will continue to emphasize the importance of
reauthorizing the Export Administration Act to my colleagues,
this Committee, and elsewhere.
I look forward to the Department of Commerce's continued
role in this debate and trust they will continue to make
progress to get that done. I look forward to the testimony of
all the witnesses, and Senator Santorum.
OPENING STATEMENT OF SENATOR RICK SANTORUM
Senator Santorum. Thank you, Mr. Chairman. I appreciate it.
I am pleased to introduce to the Committee three of the
eight witnesses that are scheduled to testify here this
morning. One in the first panel, Kim Kendrick, is a
Pittsburgher, and two on the other panel. So if you will allow
me to introducing all three of them, Mr. Chairman, even though
only one of them is actually before you. Ms. Kendrick is
someone who I have not had the opportunity to meet however, my
staff, having talked to her recently, is very impressed with
her personally and the tremendous wealth of experience that she
will bring to the position of Assistant Secretary of Housing
and Urban Development for Fair Housing and Equal Opportunity.
She has tremendous experience in both her educational
background as well as the work that she has done in the area of
housing. She has a law degree from the University of
Pittsburgh, as does my wife, and so, I will put in a good plug
for that. She went on to work for Neighborhood Legal Services
in Pittsburgh. She later served with the Department of Housing
and Urban Development in several positions, in the Office of
the General Counsel.
She left HUD to go to the D.C. Housing Authority, where she
served 7 years as General Counsel and in other positions at a
time when the DC Housing Authority was placed in receivership
and needed some strong leadership, and she was there to provide
that. And after that, she spent 2 years working at Covenant
House in Washington, DC, which as you know, Mr. Chairman, is
one of the real outstanding philanthropic agencies not just in
Washington but in many other cities, including Philadelphia,
where they provide for housing services to troubled youth.
And she returned to HUD early in 2004, and she serves as
Senior Counsel to the Secretary. So she has a wealth of
experience both inside of Government and outside of Government
and will do, I believe, an outstanding job for the Department
in this regard. I know she is joined here today with her
parents and her sisters, and I want to welcome her and her
family to the Senate.
Two other individuals will be on your next panel, Mr.
Chairman. One is David McCormick, whom I have gotten to know in
his role as a community and business leader in Pittsburgh. He
is a graduate of West Point, served as an Army Ranger and in
the 82nd Airborne. And he earned his doctorate from Princeton
University. He is Chief Executive Officer of Arriva, which is a
successor company to a company started in Pittsburgh called
Free Markets, and they are a major and important employer in
our city and a high technology company, and he has a tremendous
amount of skills in the area of technology. And for him to be
nominated as Under Secretary of Commerce for Export
Administration, you mentioned the concerns that you have there;
he is a top flight business person, a top flight technologist,
and someone who I think will be just a tremendous addition to
this Administration. So, I want to introduce him to you, and I
know his family is here also. And I want to thank you, Dave,
for offering your services. As you can see, he is a young man
and has a lot of enthusiasm to bring to the position.
And finally, Darryl Jackson, who is from Philadelphia; he
is to be nominated as Assistant Secretary of Commerce for
Export Enforcement; another person, like so many in
Pennsylvania with great experience and background to lend to
our country. He is experienced in the practice of law. He got
his law degree from Harvard University, and--Howard University,
excuse me; I would have said do not hold that against him, but
Howard, it is a great university, in 1977.
[Laughter.]
I did not mean to contrast that.
He began his legal career in the Legal Defender Association
of Philadelphia, where he worked for 3 years. He worked as a
prosecutor in the Office of the U.S. Attorney here in the
District of Columbia for 12 years. He became the Executive
Assistant to the U.S. Attorney for Operations, where he was
responsible for overseeing legal operations and implementing
prosecutorial policy.
Since 1992, he has been a partner at Arnold and Porter,
where he worked as a civil litigator and a white collar
criminal defense attorney. He has taught and lectured at George
Washington National Law Center and Catholic University of
America's Columbus School of Law. He is someone, again, who
brings a wealth of experience to this position, and I know that
he will serve his country well.
Senator Enzi. Thank you very much. And I should mention
that the reason that Senator Shelby is not chairing this
meeting at the moment is that he is chairing the debate on
Commerce, Justice, State appropriations over on the floor of
the Senate, and that is not optional, either. So, I am filling
in for him. And we have Senator DeWine with us, who is going to
make an introduction from the second panel so that he can
return to the Judiciary Committee, where we are trying to get
the Chief Justice of the Supreme Court finished on
confirmation.
Senator DeWine.
STATEMENT OF MIKE DeWINE
A U.S. SENATOR FROM THE STATE OF OHIO
Senator DeWine. Mr. Chairman, thank you for taking me out
of order, and thank you for this opportunity to introduce my
fellow Ohioan, Ambassador Frank Lavin of Canton, Ohio, an
Ambassador whom President Bush has nominated to be the Under
Secretary of Commerce for International Trade.
Frank's background is quite impressive, including several
advanced degrees related to international relations and
economics from Georgetown, Johns Hopkins, and Wharton.
Professionally, Frank has distinguished himself through over
two decades of work in Asian affairs in both government and the
private sector. I have known Frank for over two decades, dating
back to when I was in the House of Representatives, and he was
in the Reagan Administration. He worked in the Reagan
Administration at the National Security Council as Deputy
Executive Secretary. He went on to serve the White House in the
Office of Political Affairs.
Frank was previously nominated and served as the Deputy
Assistant Secretary of Commerce for Asia and the Pacific, where
he was responsible for commercial policy, assisting companies
with market access, and trade negotiations for the region. He
continued his connection with the region during the late 1990's
as a banker and venture capitalist in Hong Kong and Singapore.
It was therefore no surprise when President Bush nominated
Frank to be Ambassador to Singapore, given his professional
experience within the region. And as Ambassador, Frank Lavin
helped oversee the successful negotiation and enactment of the
United States-Singapore Free Trade Agreement. I believe, Mr.
Chairman, Members of the Committee, it is important that we
have someone in this position who knows business, knows our
trade rights and responsibilities, knows our trade partners,
and knows how to open markets to U.S. goods.
It is particularly important to have someone like
Ambassador Lavin, who has a thorough understanding of the
countries in the Far East, which seems to be at the center of
so many of our trade discussions today here in the Congress.
Frank has a ground floor view of the region, both from his
days in the private sector and from his years spent in
Government service. Adding to his professional accomplishments,
I would like to mention that the Ambassador is also a
lieutenant commander in the U.S. Naval Reserves and is raising
three wonderful children with his wife Ann. I wish them all the
best during this confirmation process.
Mr. Chairman, I thank you again for taking me out of order
and allowing me to move ahead here. Thank you.
Senator Enzi. Thank you very much. Mr. Lavin, thank you.
Senator Reed, did you want to make any comments?
COMMENTS OF SENATOR JACK REED
Senator Reed. Mr. Chairman, I think we can proceed to the
witness statements and questions. It would be fine. I just want
to welcome today's nominees.
Senator Enzi. Thank you. We will begin with the statements,
then.
Mr. Gottfried.
STATEMENT OF KEITH E. GOTTFRIED, OF CALIFORNIA,
TO BE GENERAL COUNSEL,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Gottfried. Thank you, Mr. Chairman and good morning.
I would like to thank Senator Shelby, Senator Sarbanes, and
distinguished Members of the Committee for giving me the great
privilege and honor to appear before this Committee today as it
considers my nomination to be General Counsel of the U.S.
Department of Housing and Urban Development. I know this is a
particularly busy time for the Committee, for the Senate, and
accordingly, I am especially grateful to this Committee for
expediting the confirmation process for myself and for the
other nominees present today.
I would also like to express my deep gratitude to President
Bush and Secretary Jackson for the trust and confidence they
have placed in me in putting forward my nomination for this
very important position. I am honored by their willingness to
entrust me with a leadership position on issues that are of
great importance to our Nation and that are of great interest
to me personally. As Secretary Jackson continues to lead HUD in
strengthening our Nation's communities, promoting affordable
housing, expanding homeownership opportunities for all
Americans, particularly low- and moderate-income families,
vigorously enforcing the fair housing laws, and of course,
providing housing and other desperately needed relief to the
victims of Hurricane Katrina, if confirmed, it would be for me
the honor of a lifetime to serve as his General Counsel.
Mr. Chairman, with your indulgence, I would like to
introduce some family members. I would like to introduce my
wife, Cindy. It is due to her love and support and with the
grace of God that I am before you today, and it will be with
her love and support and with the grace of God that I will be
able to carry out, if confirmed, the important responsibilities
that are before me. I thank her for being my closest adviser
and my best friend.
I would also like to introduce my mother Rosalie Gottfried,
from whom I have learned many things, including the benefits
that attach to homeownership and being a vested member of a
community and who has sacrificed so much so that I could have
the opportunity to pursue my personalized version of the
American Dream.
Mr. Chairman, I have been very blessed in my life. The most
recent example of that being that my wife and I are expecting
the birth of our first child in March. And as we anxiously
anticipate the day that we become parents, my wife and I find
ourselves very attentive, becoming more attentive to how to
ensure that our children have access to the same opportunities
that we had, including, of course, access to affordable
housing.
I cannot begin to articulate how honored and humbled I am
to appear before this Committee. I come from a very modest
upbringing. I could never imagine growing up in Queens, New
York, in my neighborhood, that one day, I would be nominated by
the President of the United States of America to serve the
American people in this very important leadership position. I
feel very strongly that to those who much is given, much is
expected, and that as a member of a compassionate society, I
have a duty to give something back to the Nation that has given
me so much.
The opportunity to serve as General Counsel of HUD would be
a particularly fitting opportunity for me to give something
back to this great Nation that has given me so much, not only
because of my background as a lawyer, as a seasoned legal
executive in the private sector, but also because of a deep
personal connection I share with HUD's mission.
In 1967, one year after the cornerstone was laid for the
building that would become HUD's headquarters, the building now
known as the Robert C. Weaver Federal Building, named after the
first Secretary of the Department of Housing and Urban
Development, my parents purchased their first home in Queens,
New York, using a modest downpayment and a 30-year, fixed-rate
mortgage.
When their marriage dissolved some years later, my mother
was extremely determined that we were not going to leave that
home. She was not going to part with that home. We were not
going to move to a much smaller rental apartment. My mother,
the daughter of immigrants, had grown up in the Brighton Beach
section of Brooklyn, New York, and she had shared with her
parents and her three siblings a one-bedroom apartment. She
knew all too well that that was not the environment that she
wanted for her children.
As a school teacher employed by the New York City Board of
Education, she just retired, almost 40 years, my mother
struggled for many years to be able to continue to make the
monthly mortgage payments and to remain a member of the
ownership society. Like President Bush and Secretary Jackson
today, my mother recognized the value and benefits of
homeownership. She believed, and I know continues to believe,
the contribution that homeownership makes to a family's stable
living environment.
I learned from my mother many things, and I learned from
her the benefits of being a part of a closely knit community
where your neighbors feel like family and where homeownership
translates into greater concern for your neighbors. Almost 40
years after purchasing her home, my mother remains deeply
active and deeply committed to her community.
Mr. Chairman, if confirmed, I would embrace the
responsibilities and the duties of the Office of General
Counsel with an abundance of enthusiasm, vigor, and dedication.
Over the past few weeks, I have had the opportunity to get to
know some of the staff members of the Office of General
Counsel, and to date, I have been extremely impressed with the
caliber and dedication of all the people that I have had the
privilege of meeting, in particular, because HUD has been
without a General Counsel since May 2004. I would like to
recognize, acknowledge, and thank Kathleen Koch, who has served
as acting General Counsel since that time.
If confirmed, I will commit myself to assisting Secretary
Jackson in his ongoing efforts to make HUD a more effective,
efficient, and responsive institution, one that will operate in
accordance with the highest ethical and professional standards
both for its employees and for its program participants. I am
also committed to assisting Secretary Jackson in his ongoing
efforts to create a culture that inspires confidence in HUD's
programs on Capitol Hill and with all our program participants
and beneficiaries.
Mr. Chairman, Members of the Committee, the Office of
General Counsel at HUD is a great honor, a great
responsibility, and a tremendous challenge. If confirmed, I
look forward to working in a bipartisan manner with the
Committee, other Members of Congress, as we together work to
meet the challenges before us. As has been noted before this
Committee in a number of hearings, the mission at HUD, the
mission to provide affordable housing to all Americans, is not
a Democratic mission; it is not a Republican mission; it is an
American mission for all Americans.
At this time, Mr. Chairman, I stand ready to answer any
questions or address any comments that you or any other Members
of the Committee may have. I thank the Members of the Committee
for the honor and the opportunity to appear before you today.
Senator Enzi. Thank you for your testimony.
We have been joined by the Ranking Member of the Committee.
Senator Sarbanes, do you have a statement that you would like
to make?
STATEMENT OF SENATOR PAUL S. SARBANES
Senator Sarbanes. Thank you very much, Mr. Chairman, I
appreciate that, because regrettably, I am not going to be able
to stay this morning because of a number of conflicting
engagements, but I do have an opening statement.
First of all, I want to thank you very much for presiding
over the hearing. I think we need to get people in these jobs.
These are important positions, both at HUD and at Commerce, and
I am going to comment in a moment about how long some of them
have been vacant. I want to congratulate all the nominees both
at HUD and the Department of Commerce.
I hold public service in high esteem, and I appreciate the
willingness of the nominees to serve the Nation. We have four
important HUD positions; of course, HUD plays a crucial role in
many communities across our country. Millions of people live in
HUD-assisted housing. Millions more receive HUD-subsidized
mortgages through the FHA program. About 220,000 people lived
in FHA-insured single family homes that have been affected by
Hurricane Katrina. Another 90,000 lived in FHA-insured
apartments, and nearly 150,000 receive Section 8 vouchers or
were living in public housing in those areas, so obviously, the
reach of HUD into these communities is quite extensive. The
Senate actually adopted, yesterday, an amendment I proposed to
give authority to HUD to issue temporary Section 8 vouchers to
get people housed.
HUD contributes to the vitality of communities through the
Community Development Block Grant program. It increases
homeownership through FHA but also through the HOME program.
The American Dream Down Payment Assistance Initiative helps
low-income families afford decent housing. It also seeks to
ensure that all Americans have equal access to affordable
housing opportunities. I want to underscore that, without
regard to race or gender, and it does all this in close
partnership with State and local governments.
Obviously, to meet these responsibilities, it needs top
quality staff and top quality leadership, and have been
concerned about these vacancies in key positions. There has not
been a confirmed General Counsel at HUD since May 2004, almost
18 months. The position of Assistant Secretary for
Administration has been open since February of this year. So, I
look forward to reviewing the witnesses' statements and their
papers and looking over the hearing records in the hopes that
we can expedite the process of getting these important
positions filled.
Let me say a word about the second panel which the Chairman
will bring before us involving the Department of Commerce. I
have had the opportunity to meet with a number of these
nominees. They have critical responsibilities for promoting
American exports, assuring our businesses compete on a level
playing field, increasing American competitiveness while
protecting our defense industrial base.
These are particularly challenging times. We have a trade
deficit with China which may exceed $200 billion. The total
current deficit is more than $700 billion, so we face a very
difficult situation. We are seeing some effort to undermine the
impact of U.S. antidumping and countervailing duty rules. These
are all issues the nominees will have to confront.
This Committee has had a good working relationship with the
predecessors of the people going into these Commerce jobs.
Senator Enzi has taken a strong leadership role with respect to
the issue of export controls and promotions. I have been
pleased to work with him in that effort.
The former Under Secretary, Grant Aldonas, took a lead in
the Trade Promotion Coordinating Committee Initiative. I hope
that it will not lose its momentum. The one stop shops
authorized in the 1992 Export Enhancement Act must continue to
be used effectively. Mr. Chairman, I want to underscore the
importance of the hearing, and I hope that we get these people
in position.
Let me, as I close, I want to pay a note of tribute to
Timothy Hauser, who had a tragic death this summer. Mr. Hauser
was a career civil servant who had served as Deputy Under
Secretary for International Trade since 1991. He was a mainstay
of our trade programs and of the Department of Commerce. I
think his career was a model one. It exemplified the
commitment, the knowledge, the expertise, and the dedication of
literally thousands and thousands of career civil servants, and
I want to take this opportunity to acknowledge his
extraordinary contributions over the course of his career.
Thank you very much.
Senator Enzi. Thank you very much, and yes, we did have
some interesting times together on the Export Administration
Act Reauthorization and got it through the Senate 84 to 14, and
then, September 11 happened, and everybody's focus changed, and
we were not able to finish it.
Senator Sarbanes. Right.
Senator Enzi. So we will continue on that.
Ms. Kendrick.
STATEMENT OF KIM KENDRICK
OF THE DISTRICT OF COLUMBIA,
TO BE ASSISTANT SECRETARY FOR FAIR
HOUSING AND EQUAL OPPORTUNITY,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Ms. Kendrick. Good morning, Senator.
I want to thank Chairman Shelby, Ranking Member Sarbanes,
and distinguished Members of this Committee. I appreciate your
consideration today, especially in light of the important
issues that face this Nation that require your valuable time.
I would first like to thank President Bush for nominating
me to serve as HUD's Assistant Secretary for Fair Housing and
Equal Opportunity. I am also profoundly grateful to Secretary
Alphonso Jackson for his strong support of my nomination and
his encouragement during this nomination process.
Before I go any further, I want to recognize some people
who have been an important part of my life and who are with me
today. First, I must acknowledge the most important sources of
encouragement and support in my life, my parents, Louis and
Gloria Kendrick.
Senator Enzi. Welcome.
Ms. Kendrick. After I was notified that President Bush
nominated me for this position, I immediately called my parents
to relay the good news. My father's first response was are you
not glad that you have great parents?
[Laughter.]
As a matter of fact, I am. I can honestly say without their
guidance, sacrifice, and love, I would not be sitting here
before you today, and I want to publicly thank them for all
that they have done for me.
Also with me today are my two sisters, Toni and Jerri
Kendrick, my nephew of 15 years, Louis Washington, who got to
get out of school today.
[Laughter.]
My cousin, Sabrina Cobb, and my godchild, whom I think you
have heard, Olivia Albury, who celebrated her first birthday
just 2 weeks ago.
I am blessed to have a number of great friends who came to
lend support and encouragement today. I have colleagues with me
today from HUD and former colleagues from both the District of
Columbia Housing Authority and Covenant House Washington. Here
also are friends that I have known and met through Leadership
Washington, friends from the Greater Washington Area Chapter of
the Women Lawyers Division of the National Bar Association,
members of my sorority, Alpha Kappa Alpha, and a friend from
college. I want to thank each of them for taking time out of
their schedules to support me.
I will not spend a lot of time telling you about my
professional journey. You have heard Senator Santorum talk
about that. As you already know, I have worked for over 20
years as a lawyer and that most of my legal career has been
involved with matters associated with housing, starting as an
attorney with Neighborhood Legal Services in Pittsburgh,
Pennsylvania, and currently serving as legal counsel to a
member of the President's Cabinet who is responsible for
housing for the entire Nation.
I do, however, want to share with you a bit about my
personal background. I grew up in the Hill District, a number
in Pittsburgh, Pennsylvania. At that time, it was the most
economically depressed part of the city. However, our home life
was rich, so rich that I had no idea other people considered us
low income.
One of the reasons I never felt deprived was because my
family always had a house that we could call our own. My
parents created a home atmosphere where my sisters and I were
safe and free, free to become the successful women that we are
today. I am particularly proud of my sisters. My sister Toni is
a principal in an inner city school in Pittsburgh. Jerri is a
graduate of Carnegie Mellon University, and she is one of a few
African-American female program managers for Lockheed Martin.
While the successes in our lives may not solely be related to
the fact that our parents were and are homeowners, it did not
hurt.
The one thing that my career in housing has made very clear
to me is that having a home is a critical step to achieving
economic equality in this country. The Rev. Dr. Martin Luther
King was assassinated on April 4, 1968, and the Fair Housing
Act was enacted on April 11 of that same year.
The significance of the two events cannot be ignored. His
death brought to the forefront of this country the severe
inequities in its social fabric. Dr. King often spoke about the
inequities in the housing opportunities between whites and the
minorities in this country. Unfortunately, Dr. King did not
live to see the Fair Housing Act signed into law or see how
fair housing in this country has led to a record number of
minority homeowners.
However, I do know that there is more to be done. As
reported in the media yesterday, minorities are twice as likely
as whites to get higher priced mortgages, and we must
understand these disparities and work to eliminate them. Also,
I am quite aware of the number of Americans who were displaced
from their homes by Hurricane Katrina, and I know there is work
to be done to get those families back into their homes.
As the President's nominee for Assistant Secretary for Fair
Housing and Equal Opportunity, I have been given an opportunity
few people before me have been given; that is, to ensure equal
access to housing for all Americans. If I am confirmed, I
promise to diligently and enthusiastically carry out the duties
for which I have been nominated, because I cannot think of a
greater honor than to serve this Administration as the chief
enforcer of the Nation's fair housing laws.
As a little girl growing up in Pittsburgh, I could never
imagine I would one day be sitting in a confirmation hearing
before the U.S. Senate. This kind of personal journey is only
possible in the United States, and it makes me immensely proud
to be an American.
Again, I thank you for your time, and I welcome any
questions that you may have of me.
Senator Enzi. Thank you very much.
Mr. Nelson.
STATEMENT OF KEITH A. NELSON, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR ADMINISTRATION
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Nelson. Thank you very much.
I would like to thank Chairman Shelby, Ranking Member
Sarbanes, and distinguished Members of the Committee for
holding this hearing today. It is a privilege to appear before
you as the President's nominee to serve as Assistant Secretary
for Administration at the U.S. Department of Housing and Urban
Development. I am honored that President Bush has nominated me
to serve in this position, and that this Committee is taking
the time to consider my nomination.
I also want to take a moment to introduce some of my
family. Especially, I am very proud to introduce my wife, Julia
Gomez Nelson, and also my mother, who came from Texas. Her name
is Pamela Hudson Nelson, and she is missing part of her meeting
today as Vice Chairman of the U.S. Commission of Fine Arts, and
also my in-laws who traveled from Florida, Guillermo and Olema
Gomez, who are here with us today, and I am very excited and
thankful that they are here.
Commitment to public service is a proud tradition in my
family, and I have been honored to continue that tradition over
the last 3-plus years at the U.S. Department of Labor. Since
2001, I have worked in management and administration at the
Labor Department, most recently serving as Associate Deputy
Secretary for Management. In this capacity, I have been
involved in human resource matters, information technology,
budget formulation, financial management, and general
operations. One of our proudest accomplishments at the
Department of Labor came recently, when the Office of
Management and Budget recognized the Labor Department as the
best-managed in the Executive Branch.
Among Labor's most significant achievements was the
collective bargaining agreement we reached earlier this year
with Local 12 of the American Federation of Government
Employees, which represents most of the Department's employees
in the Washington, DC area. This agreement, the first since
1992, was the culmination of more than 3 years of mediation and
negotiation.
The Department of Labor also successfully migrated its
payroll system to the National Finance Center. This is part of
a governmentwide effort to shift certain services that are not
mission-specific to certain designated government service
providers. This was a significant endeavor, one that required
our office to coordinate the efforts of our Chief Financial
Officer, the human resources staff, and regional employees in
order to prepare the Department's 17,000 employees for a new
payroll system.
In a more broad sense, my service at the Labor Department
has allowed me to gain a clear understanding of the urgency of
succession planning in the Federal Government. And through the
extensive briefings and interviews that have characterized the
confirmation process, I have come to appreciate how acute and
serious this issue is for the Department of Housing and Urban
Development.
In addition to succession planning, HUD has also performed
an assessment revealing various ``skill gaps'' between current
personnel and those required to execute the mission most
effectively. If confirmed, I hope to have the opportunity to
provide the Department with the training and recruitment
necessary to bridge those gaps. Through these and other areas
of focus, I will keep lines of communication open with
stakeholders to ensure that all interested parties receive a
fair hearing.
In conclusion, I am committed to the responsibilities and
challenges that come with this position. Under the leadership
of Secretary Jackson and Deputy Secretary Bernardi, I am
confident that HUD will continue its progress to becoming a
more efficient and effective operation in fulfilling its vital
public mission.
I want to thank you again for scheduling this hearing
during what I know is a very busy time for the Senate. I am
ready for any questions you may have.
Senator Enzi. Thank you very much.
Ms. Williams.
STATEMENT OF DARLENE F. WILLIAMS, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR
POLICY DEVELOPMENT AND RESEARCH
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Ms. Williams. Thank you.
I want to thank Chairman Shelby, Ranking Member Sarbanes,
and Members of the Committee for convening this hearing during
what I know is a busy legislative session. It is a privilege to
be here with you today. I would like to express my appreciation
to President Bush for the honor of being nominated as Assistant
Secretary for the Office of Policy Development and Research. I
am also grateful for your consideration today, so that I may
continue my services to HUD and to Secretary Alphonso Jackson.
Before I say a few words about my nomination, I would like
to acknowledge and thank a very special person in my life, my
mother, Ms. Julie Bernice Walker. Without her, this would not
have been possible. Through her sacrifices, she paved this road
and provided me with a bridge that has allowed me to experience
incredible educational and career opportunities. I would also
like to acknowledge in their absence, a sincere sacrifice on
their part, my father, Mr. Francis Harold Williams, Sr.; my
stepfather, Mr. Nathan Walker; my dear friend, Mr. Herbert
Moore, Jr.; and of course, my two brothers, Harold, Jr., and
Rodger, along with the many men and women throughout my
corporate and Federal careers who are shining examples of
excellence.
The Office of Policy Development and Research, or PD&R, is
a principal adviser to the Secretary providing support in
policy development, applied social science and economic
research on housing policy and issues, including, for example,
advances in housing technology and evaluation and monitoring of
the Department's programs. In fact, one of the very important
responsibilities of PD&R is to conduct evaluations of
Departmental programs to make sure they are operating
effectively as Congress intended. If confirmed, I will work to
ensure that this mission continues with professionalism and
integrity.
As for my personal background, on June 2, 2003, I joined
HUD as the General Deputy Assistant Secretary for PD&R. As
such, I have served as the general manager for the office
during interim periods when the office was without an Assistant
Secretary.
One example of a critical initiative we undertook at PD&R
was the establishment of HUD's research plan for each fiscal
year. The role of the Assistant Secretary for PD&R is to
establish an approved HUD research plan through the
collaborative input of PD&R staff and HUD leadership. Under my
leadership, PD&R developed a plan addressing research and
survey activities early in the fiscal year, which ensured that
staff could begin implementing the research plan once the
appropriations were known. The research plan was important to
PD&R because it established the work assignments for the fiscal
year for staff and permitted implementation of an often lengthy
and rigorous process.
Prior to entering Federal service, I gained expertise in
operations, marketing research, and corporate policy at the
following corporations: Pacific Bell, now known as SBC; Eastman
Kodak; Ryder Systems, Incorporated; and TXU, formerly known as
Texas Utilities. I believe that my earlier experiences in PD&R
along with these professional experiences in corporate America
helped me to be an effective leader. I would be personally
honored to have the opportunity to join the men and women of
PD&R, who are among the best and brightest of the HUD
workforce.
Let me conclude by saying that I have a deep appreciation
for Congress as an institution. I look forward to working with
this Committee in an open and collaborative spirit to advance
the goals of affordable housing, homeownership, and strong
communities.
Thank you for your kind attention, and I will be happy to
answer any questions you may have. Senator, I respectfully
request that my testimony be added to the record.
Senator Enzi. Thank you very much. The complete testimony
of everyone will be a part of the record, and there will be
statements entered by people who have not been able to be here
this morning. There will probably be some written questions
that will be addressed from those who were not here and even
some of those who are here, because time does place some
constraints on us, and we will encourage you all to give as
prompt an answer as possible, because I want to congratulate
you on your nomination, and we want to make that a
confirmation. So we will work with all speed to get that done.
I want to welcome all the families and friends of the
nominees. It is nice that there is that kind of support there,
and I know that that is where each of you got some direction
for your life, as was often mentioned.
I used to be the Mayor of a boom town. It tripled in size
while I was the Mayor. And the one thing that I noticed was
that when a person got homeownership, their perspective
changed. They suddenly become considerably more interested in
the community, because they felt they had ownership not just in
their house but in their community, and it is the American
Dream. And you all are in charge of getting that dream to as
many people as possible in the best way possible, and so, I
challenge you with that.
I do have a few questions that I want to ask, and I will
begin in the same order that we spoke. Mr. Gottfried, I believe
your experience as corporate counsel does provide a useful
background for serving as HUD's General Counsel. However, I
believe there are some substantial differences. Could you offer
for the Committee what you see as some of those differences in
responsibilities and duties of an agency general counsel in
contrast to that of serving as a corporate general counsel?
Mr. Gottfried. Thank you, Senator. There are many
differences between serving as a general counsel of a publicly
traded company and serving as general counsel of a Federal
Cabinet Department. There are also many similarities. One of my
goals as General Counsel of Borland Software Corporation was to
have a zero tolerance policy with respect to ethics compliance.
It was extremely important, particularly in light of the
Sarbanes-Oxley Act of 2002, that we comply over and above what
was required of us under that statute. Similarly, at an agency
like HUD, an agency that grants significant amounts of money
and has numerous program participants and beneficiaries, it is
incredibly important that at HUD that we be an example of
ethics and of compliance at the highest levels and that there
be zero tolerance.
At Borland Software, I managed tremendous amounts of
litigation, and I can say with a lot of pride that
substantially all the litigation that I inherited, and it was
well into the tens of millions of dollars in paid liability if
not higher when I became general counsel in 2000, by the time I
left, all that litigation was resolved.
HUD also has significant litigation where it is a
defendant. Currently, there are approximately 510 cases where
HUD is a defendant. That will be one of my priorities. One of
my priorities will be helping to resolve that litigation. For
every dollar that we have to pay out in litigation costs, that
is a dollar that is not going to go to help people gain access
to affordable housing or in increasing access to homeownership.
Now, a great difference, of course, is that when I was at
Borland Software in the private sector, and I wanted to settle
a case, I would go talk to my CEO and my board, and it was
fairly easy to do that. Obviously, in a Federal Cabinet
Department, as General Counsel, it is not just the Secretary
and I and possibly the Deputy Secretary making that decision. I
have a very important co-counsel or lead counsel in the
Department of Justice, and I will have to consult and work
collaboratively with them.
In my corporate law background, when I was a lawyer at
Skadden Arps, I had to work with lawyers all the time and lots
and lots of lawyers on the other side of the table or three
different sides of the table, so that is nothing new for me.
And I look forward to building a collaborative relationship
with the people at the Department of Justice and other agencies
and obviously the Solicitor General from time to time.
Senator Enzi. Thank you.
Ms. Kendrick, I understand that you have been Secretary
Jackson's primary advisor on RESPA. As you know, the Committee
has a variety of concerns regarding the RESPA rule as
previously proposed. If confirmed, is the Secretary's intention
for you to remain as his primary counsel on RESPA, and could
you share with the Committee what is the current status of
HUD's RESPA efforts?
Ms. Kendrick. The Secretary has not made a decision,
Senator, on whether I should remain as his chief advisor on
RESPA. I will leave that to him after the confirmation process.
But what we are doing on RESPA today is, as you may know, we
held seven roundtables to discuss the RESPA issue this summer.
We had four in Washington, DC, one in Chicago, one in Los
Angeles, and one in Fort Worth.
We wanted to get a sense around the country of what the
industry and consumers were thinking about RESPA, what they are
interested in, what they do not want, what they do want, and is
RESPA viable? Is it viable to do a RESPA rule this year? And
so, this year, we are still in that thought process. There is
no rule in a drawer. We have not made a decision about whether
there will be a RESPA rule, and before we even think about
whether we are going to do a rule, we will come back and see
the Senate; we will talk to the House Members, we will talk to
everyone, sir.
Senator Enzi. Thank you, and I hope he does rely on you. I
am sure you have a great deal of expertise on that and can
continue that.
Mr. Nelson, the GAO has testified before this Committee
that HUD's financial management systems cannot currently
provide the day-to-day information needed by its managers to
effectively manage and monitor the Department's programs. I
believe it is critical that HUD have reliable financial and
accounting systems. Do you share this concern with respect to
the critical importance of reliable financial and accounting
systems, and do you have any thoughts for addressing those
deficiencies?
Mr. Nelson. Thank you for your question, Senator.
That GAO report is certainly one that we are very
interested in trying to close those recommendations one-by-one.
In fact, there is a very useful report that I have seen that we
keep track of on a monthly basis of all the GAO reports and
Inspector General reports that we are needing to deal with and
close down these recommendations.
Certainly, financial management is an important point of
any department and agency, and if you do not get the data
right, and you do not have the numbers right, it is very
difficult to operate efficiently and effectively. So that is a
key concern, and if confirmed, I will work very hard along with
the CFO to establish better measures for that.
Senator Enzi. Thank you.
Ms. Williams, HUD over the last decade or so has been
increasingly reliant on outside contractors to perform many of
its responsibilities. I know that is not an issue solely in the
research area, but it does seem that most of the research
produced by HUD is conducted by outside parties. I am concerned
about HUD's ability to effectively monitor those contractors.
Could you detail for the Committee your relevant experience in
monitoring and evaluating contract performance?
Ms. Williams. Thank you, Senator.
The Office of Policy Development and Research is comprised
of professionals with backgrounds in social science along with
engineering, architecture, and many of the skills that are
necessary not only programmatically for the Office to determine
the types of research that need to be conducted but also for
further monitoring and evaluation. Additionally, many of the
members, the 156 individuals have been involved in other
program offices prior to joining the Office of Policy
Development and Research, so we are going to continue to use
the talent that we have.
We are also putting into place a succession plan to ensure
that we continue to have great HUD content. As you have
indicated, we have relied significantly on outside contractors,
but that does not mean that the individuals within the program
areas as well as within the Office of Policy Development and
Research are not quite often extensively involved in the
contracting arena.
Senator Enzi. Thank you.
Mr. Gottfried, you mentioned in your testimony your
experience practicing before the SEC and your understanding of
how regulatory agencies work. I believe it is vital for an
agency general counsel to have a strong knowledge and
appreciation of administrative procedures, particularly
rulemaking. Could you offer the Committee a little more detail
about your interaction with Federal agencies and your knowledge
of administrative procedures?
Mr. Gottfried. Yes, as a lawyer in New York, most of my
career has been as a mergers and acquisitions and public
company lawyer with substantial expertise in securities laws
and in negotiating with the Securities and Exchange Commission
to get large, billion dollar transactions completed. I have not
done a lot of work with administrative procedures, like the
Administrative Procedure Act. Most of my compliance work was in
complying with securities laws and the numerous regulations of
the Securities and Exchange Commission.
Senator Enzi. Thank you.
Ms. Kendrick, I believe your past experience working at a
public housing authority will prove invaluable to HUD. I also
find it interesting that part of your responsibilities were
defending the D.C. Housing Authority against fair housing
complaints. Could you share with the Committee any reflections
you gained from, as you state in your testimony, being on both
sides of the issue, and do you believe a greater focus on
public housing authorities should be a greater priority for
HUD?
Ms. Kendrick. Thank you, sir.
The appreciation I received from my experience is that
everyone is entitled to a decent, safe, sanitary unit that can
be accommodated for a disability. I think it is very important
that persons with disabilities have decent housing, they have
available housing, and that public housing authorities and
private landlords should make that effort to make sure that
those accommodations are met, especially in the public arena,
where public housing authorities and other people who receive
public dollars, they should be required to make their units
adaptable for persons with disabilities.
And I gained a strong appreciation, because if you have
ever seen people who are in wheelchairs who cannot find
housing, people who have children who are in multiple
wheelchairs who do not have housing, it is very sobering, and
it must be incumbent upon public housing authorities to make
sure those units are available, because they are receiving
public dollars for housing people.
Senator Enzi. Thank you.
Mr. Nelson, earlier, I asked Ms. Williams about contractors
performing their responsibilities and the ability to
effectively monitor those contractors. Could you comment on
that issue as well?
Mr. Nelson. Certainly. Thank you, Senator.
Contracting is more important than ever now in the Federal
Government with more and more contractors doing work that is
really not mission specific to Federal agencies, and so,
writing and executing good contracts is paramount. Where we
can, if confirmed, I will try to really build on performance-
based contracting, where if vendors do jobs faster and better,
they will get rewarded, and if they do it slower, they will be
penalized. And those types of contracts are going to move the
Government forward in this arena.
Senator Enzi. Thank you.
And Ms. Williams, you get kind of the key question of the
issue of the day, which is Katrina. One of the things I have
noticed in areas hit by hurricanes and flooding is that some
homes stand up better than others. Generally, it is the newer,
better ones that survive, and one of the programs administered
under PD&R is the Partnership for Advancing Technologies in
Housing Initiative, known as PATH. Now, this program is
intended to encourage the development of innovative buildings
and technologies.
Could you share with the Committee any thoughts you have on
whether increasing research into this area may result in the
development of technologies which advance the capabilities of
homes to withstand wind and flood damage?
Ms. Williams. Yes, sir; thank you, Senator.
The Partnership for Advancing Technologies in Housing, as
you have indicated, has been very involved with Katrina and
even last season, when we had the terrible devastation in
Florida and the other areas in the United States.
And although this has been a terrible devastation, I am
pleased to share with you that PATH and the Office of Policy
Development and Research have already contributed somewhat by
noting where there are sites available for temporary housing in
the region and also by already focusing, as you have indicated,
on available resources and information, alternative housing,
building technologies such as modular, and flood-proof housing.
Yes, I do believe that more research in this area would be
a very positive element for HUD, and we are already doing great
work in that area, so we will continue.
Senator Enzi. Thank you very much.
I want to thank this panel for their testimony and their
answers to the questions but most of all for your enthusiasm
for what you are about to undertake. That goes a long way in
making sure that the jobs get done more than adequately, and I
am convinced that we will have an outstanding team at HUD with
this group of people. So do your best, do what is right. Thank
you very much.
And a vote is imminent, so rather than interrupt the next
panel, I will recess so I can run over and come right back so
we can do the next panel, hopefully without interruption. That
is usually not the way things work out around here, however, so
we will recess.
[Recess.]
Senator Enzi. We will go ahead and reconvene the hearing. I
appreciate all of your patience. We will begin with the second
panel. It is Mr. Franklin Lavin, the Under Secretary of
Commerce for International Trade designee, U.S. Department of
Commerce; Mr. Israel Hernandez, the Assistant Secretary of
Commerce and Director General of the U.S. Foreign and
Commercial Service designate, U.S. Department of Commerce; Mr.
Darryl W. Jackson, the Assistant Secretary of Commerce
designate for the U.S. Department of Commerce; and Mr. David H.
McCormick, the Under Secretary of Commerce for Export
Administration of the U.S. Department of Commerce.
I thank all of you for being here today. I will ask if you
can condense your remarks so that we can hopefully finish this
before the next set of votes.
Senator Enzi. So without further ado, Mr. Lavin.
STATEMENT OF FRANKLIN L. LAVIN, OF OHIO,
TO BE UNDER SECRETARY FOR INTERNATIONAL TRADE
U.S. DEPARTMENT OF COMMERCE
Mr. Lavin. Thank you, Mr. Chairman and to the other Members
of the Committee. I am very grateful for the opportunity to----
Senator Enzi. Excuse me; I am sorry. Could you please rise
so I can swear you in?
[Witnesses sworn.]
Thank you. Be seated, and I apologize for interrupting.
Mr. Lavin. I am grateful to appear here today, and I also
want to thank Senator DeWine for his very gracious
introduction, and I am proud that he represents my home State.
My wife and three children cannot be here today, separated
as we are by the oceans and the miles, but they are certainly
here in spirit, and I am honored that my in-laws are here
today, retired Congressman George Whartley and his wife,
Barbara are able to join us. Thank you for your presence.
Senator Enzi. Welcome.
Mr. Lavin. I would also like to recognize my fellow
Commerce nominees here on the panel, and if confirmed, I look
forward to working with them. Taking your guidance, Mr.
Chairman, I would like to submit written testimony for the
record, but maybe I can offer just a brief comment in summary.
It has been a privilege for me to serve the President and
the American people, Mr. Chairman, as the U.S. Ambassador to
Singapore. I am very honored that the President and Secretary
Gutierrez have asked me to serve as Under Secretary of Commerce
for International Trade.
If confirmed, I will be guided by three principles: First,
I firmly believe that there are tremendous export opportunities
for U.S. companies, large and small. We produce world class
goods and services, and we can win in the global marketplace.
The second principle is that we must use all the tools at our
disposal to ensure that American businesses face fair
competition. We must enforce the rules; we must hold our
trading partners accountable to the agreements that they have
signed. Third, cooperation between the Legislative Branch and
ITA is essential for a constructive international trade policy.
I look forward to working with the Senate on the vital issues
that we face.
The men and women of the International Trade Administration
are a talented and dedicated group. Their mission is vital to
the economic security of the Nation, and if confirmed, I would
be honored to join them. Thank you for your time.
I would be happy to answer any questions the Committee may
have.
Senator Enzi. Thank you, and thank you for your brevity.
Mr. Hernandez.
STATEMENT OF ISRAEL HERNANDEZ, OF TEXAS,
TO BE ASSISTANT SECRETARY FOR TRADE PROMOTION
AND DIRECTOR GENERAL OF
THE U.S. AND FOREIGN COMMERCIAL SERVICE,
U.S. DEPARTMENT OF COMMERCE
Mr. Hernandez. Mr. Chairman, good morning. Thank you for
granting me this hearing today. I will also condense my
remarks, and I will submit one for the public record.
Senator Enzi. Yes, your full statements, for all of you,
will be in the record.
Mr. Hernandez. Great.
I am also privileged to be here alongside with Ambassador
Frank Lavin and others who will be within the Department of
Commerce, if confirmed. If confirmed, I pledge to define and
lead the U.S. Foreign and Commercial Service based on a clear
and strategic mission to ensure that small and medium-sized
companies gain greater access to international markets.
I will ensure that the team of specialists within the
service have the tools necessary to anticipate commercial
interests of our American exporters and rapidly adapt to the
ground to meet their needs. Organizations are only as good as
their people, and I will work to foster a diverse environment
where women and men of the Commercial Service continue to grow
in discipline and expertise.
I will also be a disciplined and accountable steward of the
people's money, and I will commit to a thorough assessment of
our resources to ensure that the Service not only meets but
also exceeds the highest expectations, and I will work to build
on the essential relationships with the Federal and State
level.
Thank you for your time, and I will be happy to take any
questions following our comments.
Senator Enzi. Thank you. Excellent job.
Mr. Jackson.
STATEMENT OF DARRYL W. JACKSON
OF THE DISTRICT OF COLUMBIA,
TO BE ASSISTANT SECRETARY OF EXPORT ENFORCEMENT,
U.S. DEPARTMENT OF COMMERCE
Mr. Jackson. Mr. Chairman, thank you, and my thanks to
Senator Santorum for his wonderful introduction this morning.
I am honored to be here today as the President's nominee
for the position of Assistant Secretary of Commerce for Export
Enforcement. The President has my deepest gratitude for the
trust and confidence he has reposed in me, and I would also
like to thank Secretary Gutierrez, with whom I look forward to
serving.
Several days ago, as you know, we marked the fourth year
since the tragic events of September 11, 2001, occurred. In his
Patriot Day 2005 proclamation, President Bush stated that,
``The mission that began on September 11 continues.'' The
President went on to discuss the military's continuing role in
keeping us safe at home, and also noted that, ``Thousands of
other Americans, from intelligence analysts to border guards to
countless others, are doing vital work to help defend America
and prevent future attacks.''
Those who work at the Bureau of Industry and Security's
Export Enforcement Division play an important role in that
critical task. They vigorously enforce the export regulations
concerning dual-use goods and technology, as well as the
antiboycott laws. Their goal is to keep the most sensitive
dual-use goods out of the most dangerous hands. As a top
priority, they pursue violations that involve weapons of mass
destruction proliferation, terrorists and terrorist support,
and unauthorized military use. That approach is consistent with
views that the President expressed in his 2003 remarks
concerning Libya's pledge to dismantle its weapons of mass
destruction programs. Therein, the President said that,
``Opposing proliferation is one of the highest priorities of
the war on terror'' because the danger is, ``dramatically
increase when regimes build or acquire weapons of mass
destruction and maintain ties to terrorist groups.''
In carrying out their mission, those who work in Export
Enforcement protect our national security, while also advancing
the foreign policy and economic interests of the United States.
If confirmed, I look forward to joining them in their mission.
Meeting these challenges is of the utmost importance for our
generation. That we do so is also of great importance to
younger generations, which look to us for their protection. I
will bring to the position the full range of my experience,
which includes more than a decade as a Federal prosecutor and
more than a decade as a litigation partner in a private
corporate law firm.
As I close, I would like to remember my departed parents,
Woodrow and Elizabeth Jackson, who would be very pleased today,
and without whose unwavering devotion and support I would not
be here. I would also like to thank my wife, Amy, who is here
today, as well as our two sons, David and Matthew, for their
continuing support.
I would like to conclude by thanking the Committee for its
prompt consideration of my nomination. If confirmed, I look
forward to working with you and your staff. I would be happy to
answer any questions that you have.
Thank you.
Senator Enzi. Thank you very much. Mr. McCormick.
STATEMENT OF DAVID H. McCORMICK, OF PENNSYLVANIA,
TO BE UNDER SECRETARY FOR EXPORT ADMINISTRATION
U.S. DEPARTMENT OF COMMERCE
Mr. McCormick. Thank you, Mr. Chairman.
It is a great honor for me to be here today as the
President's nominee for the position of Under Secretary of
Commerce for Export Administration. I thank the President and
Secretary Gutierrez for their confidence and trust. I would
also like to thank my wife, Amy Richardson, and our three young
children for their ongoing support and dedication and good
behavior up until this point.
As its name suggests, the Commerce Department's Bureau of
Industry and Security, which I would lead as Under Secretary,
operates at the intersection of issues involving industry and
national security. The Bureau's primary mission is
administering and enforcing U.S. dual-use export controls, but
its responsibilities go far beyond that. Across a wide range of
activities from ensuring U.S. industry compliance with
international arms control treaties to monitoring the health
for our own defense industrial base, from implementing the
Defense Priorities Allocation System to spearheading ongoing
high technology cooperation talks with India, the Bureau's
central objective remains the same: Establishing a strong
foundation of security upon which U.S. exports can grow and
U.S. industry prosper.
As the former CEO of a global technology company, I
understand very personally the challenges U.S. companies face
in maintaining competitiveness and negotiating their way
through an ever-changing regulatory environment. I recognize,
too, that both U.S. prosperity and security in the longer-run
depend on Government's ability to minimize the burdens it
places on industry, creating an economic climate where
businesses can prosper.
At the same time, as a former soldier and concerned
American, I also fully appreciate the critical importance of
protecting the country's security by ensuring that our
sensitive technologies do not fall into the wrong hands. Our
national nightmare on September 11 made all too clear that
these sensitive technologies in the hands of our adversaries,
or even potential adversaries, abroad pose a devastating and
unacceptable threat to us at home.
If confirmed, I am committed to pursuing policies that
advance these complementary objectives, enhanced security and
expanded trade. Indeed, in today's rapidly changing,
technology-driven environment, one cannot be achieved without
the other. I am devoted also to bringing focused leadership and
management to the Bureau of Industry and Security and acting as
a conscientious steward of the valuable taxpayer resources that
would be entrusted to this office.
I would like to conclude my remarks by thanking the
Committee for its prompt consideration of my nomination and
reiterating my commitment to work closely with you. I am happy
to answer any questions you may have at this time.
Thank you.
Senator Enzi. Thank you very much, and I do want to express
my deep appreciation for the brevity of your statements. Your
full statement will be a part of the record, and that gives us
a chance to hopefully ask a few questions before we get
interrupted by a vote again. Sometimes, those votes seem like a
huge nuisance, but apparently, it is our most important job, so
we have to leave for those.
I will begin with Mr. Lavin. One important Commerce
Department function involves joint export trade, whereby U.S.
exporters can cooperatively access foreign markets that might
be out of reach to them individually, and joint export trade is
facilitated by antitrust safe harbors, including the Webb-
Pomerine Act and the Export Trading Company Act, which is
administered by Commerce. Export associations using these
provisions account for many billions of dollars worth of export
trade annually, supporting good jobs across a wide range of
manufacturing and foreign service sectors in the national
economy.
So amazingly, at a time when the U.S. trade deficit is a
subject of huge public concern, and we need all the export
successes we can possibly muster, a blue ribbon panel of
antitrust scholars, the Antitrust Modernization Commission, has
decided to study whether these successful export trade measures
should be repealed.
I am aware that the Under Secretary for International
Trade, Grant Aldonas, wrote to the Antitrust Modernization
Commission in March affirming Commerce's support for joint
export trade and for the current statutory work. I would like
for you to share your views on that to see how similar or
dissimilar they might be.
Mr. Lavin. Thank you very much, Mr. Chairman.
I very much support the position held by my predecessor
that the establishment of the Joint Export Trade Mechanism
gives our exports flexibility to work together in the
international arena that allows them to compete more
effectively. To the extent that the antitrust concerns are
valid, I think that we should remind ourselves that it is an
issue which would apply in the domestic U.S. market, but when
we are looking at a more competitive international market, the
ability of particularly the small and medium-sized enterprises
to work together is something we should find ways to facilitate
and not impede.
Senator Enzi. Thank you.
Mr. Hernandez, if confirmed, you will be the lead office
for trade promotion for the Federal Government, a mission near
and dear to the heart of this Committee, of course. Do you
believe that the current structure of the Federal Government
for trade promotion is appropriate? Are there areas for
improvement? To the extent there are areas where the structure
and the process could be improved, could you provide the
Committee with some sense of how you would go about that?
Mr. Hernandez. Yes, sir.
Mr. Chairman, I think that there are mechanisms in place at
this point to make sure that those agencies that work on trade
are united, and that is through the Trade Promotion
Coordinating Committee, which is led by the Department of
Commerce and in many ways affords us the opportunity to
leverage our resources so that we have seamless assistance to
companies that need assistance overseas.
There are units within SBA, within Ex-Im Bank, within the
Departments of Agriculture, Commerce, and State, and we work
together to help, in many ways, companies do better business
abroad. So, I think there is a mechanism for us to help
companies, for those who do trade, as far as finding better
ways. I think I will be actively engaged in working with these
agencies to figure out how we can find better opportunities for
businesses to do commerce overseas.
Senator Enzi. Thank you.
Mr. Jackson, a Department of Commerce Inspector General
report stated the Bureau of Industry and Security's level of
cooperation with other Federal agencies, including the U.S.
Attorney's office, the Department of Homeland Security, the
FBI, and other agencies was deficient. It has also noted that
cooperation with the intelligence community is similarly
lacking. Can you assure the Committee that you are prepared to
work closely with other agencies of the Federal Government,
including law enforcement agencies, in the best interests of
the national security of the United States? And any suggestions
you have for ways that it can be done?
Mr. Jackson. Thank you, Senator, for that question. It is a
very important one, and I am certainly fully prepared to work
broadly with other law enforcement agencies as well as the
intelligence community in my current role.
I had the experience of doing so both as a line prosecutor
in the U.S. Attorney's office here, where I worked cases that
involved task forces from various agencies, Federal and local,
and also had that responsibility at a higher level when I was
the Executive Assistant U.S. Attorney for Operations, the
number three position, and coordinated our law enforcement
efforts at a higher policy level. So I know the importance of
coordination and the impact that it can bring to a law
enforcement position, and I certainly look forward to that
aspect of the job.
Senator Enzi. Thank you.
Mr. McCormick, the Department of Commerce has made
significant progress on regulations that help streamline the
licensing process for technology and other goods, but there is
still work to do, and I know the Department needs the statutory
authority to improve law enforcement procedures and collect
increased penalties.
This year, at a meeting of the President's Export Council,
Commerce Secretary Gutierrez and Acting Under Secretary Peter
Lichtenbaum both shared my interest in getting an EAA bill
done. I am committed to getting the job done. Could you please
explain the current efforts of the Department in streamlining
the licensing process for technology and what you need from the
Congress in the near future to help you get the job done?
Mr. McCormick. Thank you, Senator, and thank you for your
leadership on this issue, and thank you to Senator Shelby and
others for their leadership on this issue as well.
I would say first that you are right: There has been real
progress made in terms of streamlining the licensing process.
If you look at the 2004 data, which I suspect you are familiar
with, the amount of licenses that have been processed with
roughly the same resources have increased by about 25 percent,
while the cycle time has gone down by about 20 percent.
So there has definitely been a focus on productivity. With
that said, there is much more to be done, and one critical
component of that would be a renewal of an EAA that has broad
support and broad consensus. And that would put, clearly, the
Bureau of Industry and Security in a position to more
forcefully and effectively execute its mission of managing,
overseeing, and enforcing the export of dual-use items.
Senator Enzi. Thank you.
The Department of Commerce is working by the interagency
process on a number of proposed rules in relation to the export
controls, and because this is the Committee of jurisdiction for
those rules, we hope to continue to be consulted on the
Agency's process and look forward to working with you on that.
Mr. Lavin, you authored a very insightful article in
Foreign Affairs in 1994 that described the Chinese approach to
international negotiations and how that approach differs from
that of the United States. You have since served as U.S.
Ambassador to Singapore, from which vantage point you have been
able to observe United States-China negotiations for the past
several years. Can you offer the Committee some insight on
whether the disparities in negotiating strategies have been
adequately addressed by the United States? What recommendations
would you make to improve the United States posture in
bilateral negotiations with China?
Mr. Lavin. Thank you, Mr. Chairman.
As you know, we were able to successfully conclude a United
States-Singapore Free Trade Agreement about 18 months ago, and
that provided a very interesting contrast to some of my work
both in government and in banking in China. Singapore is a much
more advanced society economically, comes from a British
colonial tradition and uses British corporate law. It is a much
more rules-based society and has a firm philosophical
commitment to open trade.
China, again, all those criteria I think suffers from the
fact that they did not have a strong inherited legal tradition.
It is a much less advanced country economically, although they
have seen rapid economic progress. Even though they have moved
away from a Marxist economic orientation, there can still be a
bureaucratic hangover in that regard in many sectors, which is
to say there is lack of a broad consensus on trade
liberalization, although it does tend to dominate.
So, I found trade negotiation with China far more
incremental, far more adversarial, and far more protracted. It
took an enormous amount of time to gain consensus on a
particular point, and it took an enormous amount of time, then,
to get to implementation and enforcement with a point, and I
think some of what we see in dealing with China is this is what
we have when we are dealing with a less advanced economy that
does not come from an open market tradition.
I think my first word of advice would be we have to apply
resources accordingly. We are simply not going to make the kind
of progress in China that we might make with other, more
advanced economies, and we have to devote significantly greater
resources to try to move ahead. And I think we have to realize
the time horizon in building a consensus and trying to move
toward an agreement is just going to be longer than it is in
market-oriented economies.
Senator Enzi. Thank you. I have been reading The World is
Flat by Friedman.
Mr. Lavin. Yes, sir.
Senator Enzi. Hoping kids across the Nation will read that
book. It scares the heck out of me.
Mr. Lavin. It is very well done. It is a new era.
Senator Enzi. It should increase a lot of interest in
science, technology, and commerce and the way it is going to be
in the global economy.
So, I appreciate the answers from all of you, and I look
forward to your confirmation and working with you. The record,
of course, will remain open subject to call of the Chair with
the approval of the Ranking Member so that additional questions
can be submitted for your answers in writing if anyone from the
Committee desires it. So, I thank everyone for their
participation today. This hearing is adjourned.
[Whereupon, at 11:43 a.m., the hearing was adjourned.]
[Prepared statements, biographical sketches of nominees,
response to written questions, and additional material supplied
for the record follow:]
PREPARED STATEMENT OF KEITH E. GOTTFRIED
General Counsel-Designate,
U.S. Department of Housing and Urban Development
September 15, 2005
Chairman Shelby, Senator Sarbanes and distinguished Members
of the Committee, my name is Keith Gottfried, and I thank you
for giving me the great privilege and honor to appear before
this Committee today as it considers my nomination to serve as
General Counsel of the U.S. Department of Housing and Urban
Development. I know that this is a particularly busy time for
the Senate and, accordingly, I am especially grateful to this
Committee for expediting the confirmation process for myself
and the other nominees present today.
I would like to express my deep gratitude to President Bush
and Secretary Jackson for the trust and confidence they have
placed in me in putting forward my nomination for this very
important position. I am honored by their willingness to
entrust me with a leadership position on issues that are of
great importance to our Nation and which are of deep interest
to me personally. As Secretary Jackson continues to lead HUD in
strengthening our Nation's communities, promoting affordable
housing, expanding homeownership opportunities for all
Americans, particularly low- and moderate-income families,
meeting President Bush's goal of at least 5.5 million new
minority homeowners before the end of the decade, ending
chronic homelessness, vigorously enforcing fair housing, civil
rights, and antidiscrimination laws, and, of course, providing
housing and other desperately needed relief to the victims of
Hurricane Katrina, it will be the honor of a lifetime to serve
as his General Counsel.
With your indulgence, I would like to introduce my wife
Cindy. It is due to her love and support, and with the grace of
God, that I am before you today and it will be with her love
and support, and with the grace of God, that, should I be
confirmed, I will be able to carry out the important
responsibilities that will be before me. I thank her for being
my closest adviser and my best friend.
I would also like to introduce my mother Rosalie from whom
I first learned the benefits that attach to homeownership and
being a vested member of a community, and who has sacrificed so
much so that I would have the opportunity to pursue my
personalized version of the American Dream.
Mr. Chairman, I have been very blessed in my life, the most
recent example of that being that my wife and I are expecting
the birth of our first child in March. As we anxiously
anticipate the day we become parents, my wife and I find
ourselves becoming more attentive to how to ensure that our
children will have access to the same opportunities that we
had.
Over the past two decades, I have had wonderful and
enriching career opportunities to work for a number of
prestigious organizations, first as an accountant and auditor
with the Philadelphia office of Arthur Young & Company, one of
the predecessor firms to Ernst and Young LLP, and then later as
a lawyer focused on corporate transactions and securities law
compliance for two excellent law firms, first, following law
school, at Blank Rome LLP in Philadelphia and then, for most of
the 1990's, at Skadden, Arps, Slate, Meagher & Flom LLP in New
York. During my tenure at Skadden Arps, I counseled clients in
a variety of industries on mergers, acquisitions and other
corporate transactions aggregating tens of billions of dollars.
I also counseled clients with respect to corporate governance
issues, securities law compliance, SEC reporting issues, and
New York Stock Exchange and Nasdaq compliance. As a function of
my securities law compliance work, I practiced extensively
before the Securities and Exchange Commission and developed an
understanding of, and deep respect for, how regulatory agencies
work.
In June 2000, I relocated to Silicon Valley to join Borland
Software Corporation as its General Counsel and Chief Legal
Officer. Borland is a publicly traded, Nasdaq-listed software
development company headquartered in Scotts Valley, California.
During my tenure as General Counsel of Borland, I significantly
overhauled almost every aspect of the company's worldwide legal
function to make it more efficient and responsive to the needs
of the company and more in tune with the
company's business objectives as well as to have the company
serve as a model of state-of-the-art corporate governance and
disclosure practices. I also was responsible for overseeing the
company's implementation of the necessary systems and processes
to comply with the requirements of the Sarbanes-Oxley Act of
2002, which had recently been enacted. As General Counsel of
Borland, I strived for the highest levels of transparency and
accuracy in all of our public disclosures and communications,
whether they were press releases, analyst conference calls, or
periodic filings with the SEC. I also strived to create a
culture that accorded respect for, and adherence to, the
highest standards of ethical conduct. In addition, as General
Counsel, though I am not a litigator by training, I achieved an
impressive track record in managing and resolving complex,
potentially high-exposure litigation.
I cannot begin to articulate how honored and humbled I am
to appear today before this Committee. I come from a very
modest upbringing and never did I imagine growing up in Queens,
New York that one day I would be nominated by the President of
the United States to serve the American people in this
position.
I feel very strongly that to those to whom much is given
much is expected and that, as a member of a compassionate
society, I have a duty to give something back to the Nation
that has given me so much. The opportunity to serve as General
Counsel of HUD would be a particularly fitting opportunity for
me to give something back to our Nation, not only because of my
background and experience as a lawyer and as a seasoned legal
executive in the private sector, but also because of a deep
personal connection that I share with HUD's mission.
In 1967, one year after the birth of HUD and one year after
the cornerstone was laid for HUD's current headquarters, the
building now known as the Robert C. Weaver Federal Building, my
parents purchased their first home in Queens, New York using a
modest downpayment and a 30-year, fixed-rate mortgage. When
their marriage dissolved some years later, my mother was
extremely determined to keep our home--notwithstanding much
advice to the contrary that she should sell it and move the
family to a much smaller rental apartment. My mother, the
daughter of immigrants, had grown up in the Brighton Beach
section of Brooklyn, where she shared a one-bedroom apartment
with her parents and three siblings, so she knew all too well
that this was not the environment she wanted for her family. As
a schoolteacher employed by the New York City Board of
Education, my mother struggled for many years to keep our home
and to remain a member of the ``ownership society,'' often
taking on extra class coverage assignments at her school as
well as additional work in after-school, weekend, and summer
school programs, to be able to continue to make the monthly
mortgage payments.
Like President Bush and Secretary Jackson today, my mother
recognized the value and benefits of homeownership. She
believed, and continues to believe, that homeownership plays an
immeasurable contribution to a family's stable living
environment. From the time I was an infant until I left home to
attend college, I lived in the same home and maintained the
same group of friends. I also had numerous surrogate parents
among our neighbors and the parents of my friends, something of
obvious comfort to a working single parent. Because of my
mother's strong determination to remain a homeowner, neither my
sister nor I ever had to switch elementary, middle, or high
schools. While our home was modest in size, we each had our own
bedroom. Not sharing a bedroom meant that I had a place to
retreat to each evening after clearing the dinner table, a
place where I could focus on my schoolwork in an atmosphere of
relative quiet and take advantage of the opportunities afforded
to me by the New York City public school system.
I learned from my mother first-hand the benefits of being
part of a closely knit community where your neighbors feel like
family and where homeownership translates into greater concern
for your community and the welfare of your neighbors. In
addition to working as a schoolteacher and her numerous
ancillary jobs, my mother was an active and concerned member of
the community, leading a Girl Scouts troop, tutoring
neighborhood children for little or no compensation, and
serving as an executive officer of the local chapter of
CancerCare, a national, nonprofit organization that provides
free, professional support services to anyone affected by
cancer.
My mother's home and community continue to be sources of
great pride to her. Almost 40 years after purchasing her home,
my mother remains deeply active in, and committed to, her
community. Just a few weeks ago, she convinced all the
neighbors on her block to organize a neighborhood block party
so that the ``old-timers'' and those who more recently had
moved onto her block or into the community could get to know
each other.
Mr. Chairman, if confirmed, I would embrace the
responsibilities and duties of the Office of the General
Counsel with an abundance of enthusiasm, vigor, and dedication.
Over the past few weeks, through a variety of briefings, I have
had the opportunity to familiarize myself with some of the
responsibilities of the Office of General Counsel, the myriad
of statutes and regulations that apply to the programs that HUD
administers or has enforcement authority over, and how the
Office of General Counsel ensures that HUD achieves its mission
consistent with applicable law and Congressional intent. To
date, I have been extremely impressed with the caliber and
dedication of all the staff members in the Office of General
Counsel that I have had the privilege of meeting. In
particular, because HUD has been without a General Counsel
since May 2004, I want to acknowledge and thank Kathleen Koch
who has served as the Acting General Counsel since that time.
I am also extremely committed to assisting Secretary
Jackson in his ongoing efforts to make HUD a more effective,
efficient, and responsive institution, one that will operate in
accordance with the highest ethical and professional standards,
both for its employees and for its program participants.
Additionally, I am committed to assisting Secretary Jackson in
his ongoing efforts to create a culture that inspires
confidence in the integrity of HUD's programs on Capitol Hill
and with all of our program participants and beneficiaries. I
am very respectful of the independence of the Government
Accountability Office and the HUD Inspector General. I also
appreciate the valuable oversight functions that they perform.
If confirmed, I will dedicate myself to building on the
constructive working relationships that have developed during
the course of the current Administration between the Office of
the General Counsel and both the GAO and the HUD IG. I would
also seek to be a catalyst for the development of constructive
working relationships between the Office of the General Counsel
and the Members of this Committee, as well as other Members of
Congress.
Mr. Chairman and Members of the Committee, the Office of
General Counsel at HUD is a great honor, a great
responsibility, and a tremendous challenge. If confirmed, I
look forward to working in a bipartisan manner with this
Committee and other Members of Congress as we meet the
challenges before us. As has been noted a number of times in
prior hearings of this Committee, the mission at HUD is neither
a Democratic nor a Republican mission, but rather a mission on
behalf of all Americans.
At this time, Mr. Chairman, I stand ready to answer any
questions or comments that you or the other Members of the
Committee may have. I thank the Members of the Committee for
both the honor and the opportunity to appear before them today.
----------
PREPARED STATEMENT OF KIM KENDRICK
Assistant Secretary-Designate,
U.S. Department of Housing and Urban Development
September 15, 2005
Chairman Shelby, Ranking Member Sarbanes, and distinguished
Members of the Committee, I appreciate your consideration
today, and welcome this opportunity to share my vision for the
future of the Office of Fair Housing and Equal Opportunity at
the Department of Housing and Urban Development.
I would first like to thank President Bush for nominating
me to serve as an Assistant Secretary at HUD. I also appreciate
Secretary Jackson's strong support of my nomination and his
encouragement during this process. This is truly an immense
honor.
Before I go any further, I want to recognize some of the
people who have been important in my life and are here with me
today.
First, I must acknowledge the most important sources of
encouragement and support in my life: My parents Louis and
Gloria Kendrick and my two sisters, Toni and Jerri, my nephew
Louis, and one of my three godchildren, Olivia.
After I heard that the President had nominated me, I
immediately called my parents to relay the good news. My
father's first response was, ``Aren't you glad you had great
parents?'' As a matter of fact, I am. I can honestly say that
without their guidance, sacrifice, and love, I would not be
sitting before you today, and I want to publicly thank them for
all they have done for me.
I feel blessed to have a number of friends, former
colleagues, fellow church members, associates from the Greater
Washington Area Chapter, Women Lawyers Division, National Bar
Association (GWAC) and members of my sorority, Alpha Kappa
Alpha, all here supporting me today.
I grew up in the Hill district of Pittsburgh. And although
it was the most economically depressed part of the city, my
home-life was rich--so rich that I had no idea other people
considered us low income.
One of the reasons I never felt poor was because my family
always had a house we could call our own--not an apartment or a
rented house, but a home with a mortgage in our name. My
parents created a home atmosphere where my sisters and I felt
safe and free--free to become the women we are today. My older
sister, Toni, is an educator. She is a principal in an inner-
city middle school, where every day she has to deal with more
than just educating her students. Jerri, my younger sister, is
an engineer. When Jerri graduated from Carnegie Mellon
University, there were few African-American women in her class
and in her field of study. Today, she is one of a few African-
American women program managers who work for Lockheed Martin.
While our successes may not be solely related to the fact
that our parents were homeowners, it did not hurt. President
Bush understands the power of homeownership and has worked to
expand it to new segments of the population. I am proud that
this Administration has created 2.3 million new minority
homeowners since June 2002, and will create in excess of 2.2
million more by 2010.
I want to tell you a little about my professional history.
I first began working with HUD in the winter of 1987, when I
took a job as a trial attorney for the Department. For 8 years,
I made certain that HUD program offices not only followed the
Nation's housing laws, but also helped reinforce the housing
laws through litigation, including the fair housing laws.
In 1995, I became the General Counsel for the District of
Columbia Housing Authority. In that position I was responsible
for defending the Housing Authority against complaints from
public housing residents and from complaints from HUD. I
defended the Housing Authority against fair housing complaints
and accusations. I am grateful to have had the opportunity to
examine the fair housing question from both sides, and I fully
understand the responsibilities and challenges associated with
enforcing the Fair Housing Act.
I also have experience managing a staff and running a large
organization. For almost 4 years, I was responsible for
managing and operating 3,000 units at the Columbia Housing
Authority. My time at the DC Housing Authority allowed me to
move beyond the legal field to an area where I could address
the challenges facing low-income persons searching for housing.
This experience made very clear to me that having a home is a
critical step to achieving economic equality.
The Rev. Dr. Martin Luther King was assassinated on April
4, 1968, and the Fair Housing Act was enacted on April 11,
1968. The significance of the two events
cannot be ignored. His death brought to the forefront of this
country the severe inequities in its social fabric. Dr. King
spoke often about the inequities in housing opportunities
between whites and other minorities.
Unfortunately, Dr. King did not live to see the enactment
of the Fair Housing Act or to see how fair housing in this
country has led to a record number of minority homeowners. As
the President's nominee for Assistant Secretary for Fair
Housing and Equal Opportunity, I have been given an opportunity
few people before me enjoyed: To ensure equal access to housing
for all Americans.
HUD's Office of Fair Housing and Equal Opportunity has
initiated a number of actions in the last several years. For
example, HUD, under the leadership of Secretary Jackson,
recently published a study that took a look at how persons with
disabilities are treated in the housing rental market. The
results of the study show that people with disabilities
experience more discrimination when seeking rental housing than
do racial minorities. This is a problem that demands immediate
attention and, if I am confirmed, I can promise it will be one
of my highest priorities.
I would also take a look at the manner in which HUD's fair
housing complaint process works. As it stands right now, HUD
may be unintentionally discouraging some people from filing
complaints because of overly confusing paperwork and
procedures. We need a system that is complainant-friendly and
quick to process violation claims: A system that can work
without the involvement of lawyers and the
inevitable delays that can bring. When we accomplish this, we
will be able to return to the business of improving people's
lives.
Last, it is becoming clear that predatory lending is on the
rise. In order to affect widespread change, we need to move
beyond prosecution and do a better job educating borrowers and
lenders about this kind of lending and its consequences. If we
are successful, we will be able to stop predatory lending
before it starts.
If confirmed, I promise to diligently and enthusiastically
carry out the duties for which I have been nominated, because I
cannot think of a greater honor than to continue serving this
Nation.
As a poor girl growing up in Pittsburgh, I never imagined I
would one day be sitting in a confirmation hearing before the
U.S. Senate. This kind of personal journey is only possible in
the United States, and it makes me immensely proud to be an
American.
Again, thank you very much for your time, and I welcome any
questions you might have.
PREPARED STATEMENT OF FRANKLIN L. LAVIN
Under Secretary-Designate, U.S. Department of Commerce
September 15, 2005
Mr. Chairman, Senator Sarbanes, and distinguished Members
of the Committee, thank you for the opportunity to appear here
today.
I want to thank Senator DeWine for his gracious
introduction. I admire his service, and I am proud that he
represents my home State.
I would also like to recognize my fellow Commerce nominees
here on the panel, and if confirmed, I look forward to working
with David McCormick, Israel Hernandez, and Darryl Jackson.
Mr. Chairman, it has been a privilege to serve the
President and the American people as the U.S. Ambassador to the
Republic of Singapore. I am honored that President Bush and
Secretary Gutierrez have asked me to serve as Under Secretary
of Commerce for International Trade.
If confirmed, I will be guided by three principles. First,
U.S. companies can compete internationally. I firmly believe
that there are tremendous export opportunities for U.S.
companies, large and small. We produce world-class goods and
services, and we can win in the global marketplace. The second
principle is that we must use all of the tools at our disposal
to ensure that American businesses face fair competition. We
must enforce the rules. And we must hold our trading partners
accountable to the agreements they have signed. Third,
cooperation between the legislative branch and ITA is essential
for a constructive international trade policy. I look forward
to working with the Senate on the vital issues we face. Let me
elaborate on these principles.
U.S. businesses are capable of competing and winning in the
global market. Americans are resourceful, innovative, and quite
nimble at adapting to change. We are living in an era of
economic transition, but I have no doubt that American
companies can successfully grapple with this challenge.
Advances in technology allow even the smallest U.S. firms the
opportunity to do business outside our borders.
I have spent a number of years in the public and private
sectors helping U.S. companies navigate the international
marketplace. I firmly believe that there are tremendous export
opportunities for all U.S. companies, large and small. We must
use all of the tools at our disposal to ensure that American
businesses face fair competition. We must enforce the rules.
And we must hold our trading partners accountable to the
agreements they have signed.
Government must be a cooperating partner, opening markets
and enforcing the rules that govern free trade. The Office of
the U.S. Trade Representative negotiates trade agreements on
behalf of all Americans. ITA then oversees compliance with, and
enforcement of, all trade agreements. ITA is involved in every
step of the implementation process.
The Senate is uniquely positioned to know first-hand about
trade problems encountered by constituent companies. You have
my commitment that ITA will work closely with Congress and
remain attuned to any concerns about ITA-related matters. If
confirmed, I will maintain an on-going dialogue with the Senate
about trade and attendant commercial issues.
As an example of these principles, I would like to cite the
Singapore FTA. It committed Singapore to maximum liberalization
for bilateral trade in goods and services. It included state-
of-the-art commitments in e-commerce, customs cooperation,
transparency, and the protection of intellectual property
rights, and it incorporated a constructive model for workforce
and environmental matters. Since this FTA went into effect in
2004, U.S. exports have grown at a run-rate of almost 30
percent.
In closing, I would like to express my enthusiasm about
ITA's critical mission. The men and women of ITA are
professional and dedicated. The mission of ITA is to create
economic opportunity for American workers and businesses by
promoting international trade, opening foreign markets,
ensuring compliance with trade laws and agreements, and
supporting U.S. commercial interests at home and abroad. The
men and women of ITA work around the world to support that
mission. I firmly believe that their work has never been more
critical to both our economic well-being and our national
security. If confirmed, I would be honored to lead them in this
endeavor.
Thank you for your time. I would be happy to answer any
questions that the Committee may have.
PREPARED STATEMENT OF ISRAEL HERNANDEZ
Assistant Secretary and Director General-Designate
U.S. Department of Commerce
September 15, 2005
Mr. Chairman, Ranking Member Sarbanes, and distinguished
Members of the Committee, thank you for granting me this
hearing today. I am humbled and honored to be here as President
Bush's nominee for the position of Assistant Secretary for
Trade Promotion and Director General of the United States and
Foreign Commercial Service. I am also privileged to be here
alongside Ambassador Frank Lavin with his nomination to be
Under Secretary of the International Trade Administration, Mr.
Darryl Jackson to be Assistant Secretary of Commerce, and Mr.
David McCormick to be Under Secretary of Commerce for Export
Administration.
I would also like to thank President Bush and Secretary
Gutierrez for supporting my nomination and note how proud I
will be to work under their leadership.
If confirmed, I look forward to working with each of you to
ensure America builds on its status as the world's largest
exporter.
Although my family was able to attend my hearing before the
Commerce, Science, and Transportation Committee, they are
unable to attend today's hearing. Instead, they are supporting
my sister Veronica who is recovering well from a recent
surgery. Even so, many friends and loved ones are here today
and I thank them for their support.
Before I expand on the importance of trade and market-
oriented economies, I would like to call attention to the
Department of Commerce's Hurricane Katrina relief efforts.
Although we are involved in many aspects of this effort,
Commerce Secretary Gutierrez recently established a nationwide
Hurricane Relief Call Center (888-4USADOC or 888-487-2362) to
shepherd all private sector in-kind donations. The Department
of Commerce will serve as the repository for these
contributions and help steer each contribution to families and
businesses in need of our help. Phone lines at the Department
of Commerce will be staffed by caseworkers from 8 a.m. to 8
p.m. EDT, 7 days a week. By establishing the Call Center, the
Department of Commerce has teamed with the White House,
Department of Homeland Security, and other agencies involved in
the relief and rebuilding effort.
In the 21st century, opening our doors to trade is the
surest way to create opportunity for all Americans. Trade is
not mere economics. Free and open trade is economic diplomacy,
which promotes the spread of ideas, friendships, and the habits
of liberty--and ultimately encourages the spread of democracy,
economic stability, and stronger partnerships.
I come before this Committee during a unique and
transformational moment in history. A time when democracy is
taking hold around the world and we are experiencing a great
shift in economies around the world.
The pursuit of liberty and new opportunities was a
motivating force in bringing our Founding Fathers to this great
land, and it is this freedom that has become the foundation for
the entrepreneurial spirit embedded in the hearts and minds of
the American people.
From the first electric light--to the first flight--to
nanotechnology, the entrepreneurial spirit that exists today
has created a dynamic and vibrant community of enterprises
second to none. Government must create an environment where
entrepreneurs and risktakers can realize their dreams.
Giants like Ford and Microsoft were not so long ago small
businesses striving to realize the dreams of Henry Ford and
Bill Gates. Today, small businesses create 70 percent of new
American jobs, employ the majority of American workers, and are
responsible for the majority of our Nation's economic output.
Small business owners are economic patriots taking risks and
pursuing dreams. A vibrant small business sector is necessary
for the economic health of our country.
If confirmed, I pledge to define and lead the U.S. and
Foreign Commercial Service based on a clear and strategic
mission to ensure that small- and medium-sized businesses gain
greater access to international markets. I will ensure that the
team of specialists within the Service has the tools necessary
to anticipate the commercial interests of our American
exporters and rapidly adapt on the ground to meet their needs.
The U.S. and Foreign Commercial Service, created by
Congress a quarter century ago, does what no other entity in
the United States can do--provide a global infrastructure in
more than 80 countries and a domestic platform in 109 cities
with the exclusive purpose of promoting American goods and
services. We ensuring a level export playing field abroad, and
in 2004, the volume of those export sales exceeded $26 billion.
The Commercial Service offers end-to-end export solutions
helping smaller firms increase profits and lower risks in
accessing markets otherwise difficult to enter. The worldwide
network of trade specialists provides export counseling,
customized market research, trade leads, and advocacy to help
companies compete in global markets. This worldwide network is
essential to today's market economy in which 95 percent of the
world's consumers live outside of the United States.
U.S. exports support millions of American jobs.
Approximately 1 of every 5 factory jobs--or 20 percent of all
jobs in America's manufacturing sector--depends on exports.
Moreover, research shows that workers in jobs supported by
exports typically earn wages higher than the national average.
If confirmed, I will serve as a disciplined and accountable
steward of the people's money.
I will commit to a thorough assessment of our resources to
ensure that the Commercial Service not only meets but also
exceeds the highest expectations. I will work to build on the
essential relationships with partners at the Federal, State,
and local level--such as the Trade Promotion Coordinating
Committee (TPCC). The TPCC is a critical interagency task force
that leverages scarce resources and provides a ``one-stop''
shop for American companies wanting to expand and sell the
goods and services in foreign markets.
Theodore Roosevelt was right when he said, ``[t]he best
executive is the one who has sense enough to pick good men to
do what he wants done and self-restraint enough to keep from
meddling with them while they do it.'' Organizations are only
as good their people, and I will work to foster a diverse
environment where the women and men of the Commercial Service
continue to grow in discipline and expertise--an environment
where our people have the tools and capability to provide the
highest quality of service to our constituents--American
businesses and their employees, owners, and communities. I will
hold myself and the entire organization to a standard of
accountability that demands integrity, efficiency, and
effectiveness.
I hail from the Southwest Texas border, an area often
considered one of the final U.S. frontiers. I am privileged to
be here with you today, and my presence is a testament to
America's place as a haven for dreamers and doers. My loved
ones--my family and my friends--along with our diverse
community, represent America's potential, and I wish to thank
them for all they have done (and will do) to support me in this
important post.
Still today people from around the world see America as a
land of freedom and opportunity. The President once said,
``[w]e in the United States live in liberty, trade in freedom,
and grow in prosperity.'' We certainly face challenges, but we
also face a world of great opportunities, and a choice on how
to proceed. If confirmed, I look forward to the challenge of
helping ensure that our Nation--and its economy--remains a
beacon for the world.
Thank for your time. I will be happy to answer any
questions you might have and welcome your comments.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SANTORUM
FROM KIM KENDRICK
Q.1. On April 5 of this year, I sent a letter to Secretary
Jackson urging him ``to consider refraining from issuing the
final LEP guidance until concerns about its unfunded costs, its
potential for unintended consequences at the local level and
its legal liabilities for
affordable housing providers are sufficiently addressed.'' I am
told that HUD officials have advised affordable housing
operators that the final guidance will call for translating
``vital documents'' and providing oral interpretation services
to persons with limited English proficiency free of charge to
that person and at the project's expense. Has HUD performed any
cost studies to determine how much these services will cost the
industry?
A.1. Executive Order (EO) 13166, signed on August 11, 2000,
requires all Federal agencies to ensure that programs receiving
Federal financial assistance provide meaningful access to LEP
persons. The Order charges the Department of Justice (DOJ) with
responsibility for providing LEP Guidance to other Federal
agencies and for ensuring consistency among each agency-
specific guidance. On June 12, 2002, DOJ issued LEP guidance
that directed all Federal agencies to use the DOJ guidance as
the model. Based on DOJ's instruction, HUD published proposed
guidance for its recipients on December 19, 2003. HUD made
extensive changes based on the comments it received and will
soon publish the final guidance.
HUD is sensitive to the cost concerns of affordable housing
providers. Following DOJ's guidance, our guidance requires that
HUD recipients conduct a four-factor analysis to determine
whether there is a need to provide language services to
beneficiaries relative to costs and recipients' resources.
After applying the four-factor analysis, a recipient may
determine that an effective LEP plan for its particular program
or activity includes the translation of vital written materials
into the needed language to ensure equal treatment and equal
access of LEP persons to the recipient's programs and
activities.
Q.2. Again, referring to my letter to Secretary Jackson, I
urged HUD to consider as one possible solution, ``The
Department itself should provide translation and oral
interpretation services directly to the LEP population in order
to achieve cost effectiveness, uniformity in the quality and
delivery of service, and to minimize the burden on affordable
housing providers.'' I am aware that the Office of Multifamily
Housing intends to provide translations of the four HUD model
leases and the Resident Rights and Responsibilities brochure in
a limited number of languages.
Q.2.a. Could you specify which documents should be considered
``vital''? Has HUD considered translating these important
documents at the Department's expense?
A.2.a. DOJ guidance explained,
Whether or not a document (or the information it solicits)
is ``vital'' may depend upon the importance of the program,
information, encounter, or service involved, and the
consequence to the LEP person if the information in question is
not provided accurately or in a timely manner.
HUD's guidance applies this same principle. HUD does not
determine which of the recipients' documents are ``vital.'' The
recipients make this determination.
Q.2.b. Do you believe having HUD specify and translate ``vital
documents'' is a more cost-effective solution that would
achieve uniformity in the quality and delivery of service?
A.2.b. It is not practical for HUD to translate recipients'
vital documents because vital ``may depend upon the importance
of the
program, information, encounter, or service involved, and the
consequence to the LEP person if the information in question is
not provided accurately or in a timely manner.'' Only the
recipient can determine this.
Q.3. As you know, in HUD's multifamily housing programs, all
members of the household who are 18 years of age and older must
sign the lease. Another recommendation I urged Secretary
Jackson to consider is revising the definition of who is LEP so
that it does not include any member of a household where at
least one of the signatories to the lease in that household is
proficient in English. Is this a revision that HUD could
accept? Please explain.
A.3. Your concern has been raised by the multifamily housing
industry groups. HUD is giving consideration to this issue. It
will be an issue I will deal with before the issuance of the
final guidance.
Q.4. There is a document on the HUD FHEO website to which I
would like to call your attention. ``Know Your Rights Are You
Limited English Proficient'' (http://www.hud.gov/offices/fheo/
promotingfh/leprights.pdf), lists the following among the
examples of what may be discrimination based on national
origin, ``You call the landlord to report an emergency, but
they cannot help you because they only speak English and they
cannot understand your language.'' Please explain the rationale
behind HUD using this example as advice for tenants.
A.4. This concern has also been brought to HUD's attention. The
subject document will be revised to be consistent with HUD's
final guidance when it is issued.
Q.5. Last, I have been told that FHEO is already proceeding
with investigations of LEP-related complaints, even though the
final guidance to HUD's funding recipients has not been
released.
Q.5.a. How are affordable housing operators supposed to know
what their LEP obligations are before the final guidance is
issued?
A.5.a. EO 13166 sets forth the compliance standards that
federally assisted program and activities must follow. It
states that,
. . . the compliance standards that recipients must follow
to ensure that the programs and activities they normally
provide in English are accessible to LEP persons and thus do
not discriminate on the basis of national origin in violation
of Title VI of the Civil Rights Act of 1964, as amended, . . .
HUD uses the Title VI compliance standards for national
origin when conducting reviews for LEP. HUD's guidance is
consistent with DOJ Policy Guidance entitled, ``Enforcement of
Title VI of the Civil Rights Act of 1964--National Origin
Discrimination Against Persons with Limited English
Proficiency,'' dated August 16, 2000.
Q.5.b. Under your tenure as Assistant Secretary of FHEO, will
fair housing policies be finalized and publicly distributed (in
the Federal Register for instance) before your office
investigates and takes actions against affordable housing
operators and/or public housing agencies?
A.5.b. No additional fair housing policies are necessary. HUD
uses the Title VI compliance standards for national origin as
the basis for its compliance reviews of its federally assisted
recipients.
REPONSE TO WRITTEN QUESTIONS OF SENATOR REED
FROM KIM KENDRICK
Q.1. There has been a significant drop in the number of fair
housing complaints where a reasonable cause determination has
been issued in the past few years. What will you do to increase
the effectiveness of enforcement? What will you do to increase
the number of systemic investigations of violations of the Fair
Housing Act by your staff ?
A.1. I, too, am concerned about the drop in charges in recent
years. I am pleased to report that the numbers are trending up
again, but I am still not satisfied. HUD is the Federal agency
with the primary responsibility for enforcing the Fair Housing
Act. People who file complaints with us expect prompt and just
resolutions of their cases. HUD has made great strides in
reducing the time it takes to investigate cases. The Department
is currently analyzing its operations to ensure that we
maintain quality in the process. Moreover, the Office of Fair
Housing and Equal Opportunity and the
Office of General Counsel are exploring ways they can work
closer in the planning and conduct of investigations so we can
complete cases faster, with more effective outcomes. I will
work to increase training opportunities for HUD investigators,
drawing on significant expertise at HUD and other
organizations. The training we will provide at the National
Fair Housing Training Academy will make a significant
contribution to that effort.
HUD is completing revisions to HUD's Title VIII (Fair
Housing Act) handbook, which provides improved instruction and
updated information on the conduct of a fair housing
investigation. The handbook provides guidance on every stage of
a fair housing complaint from intake through investigation all
the way to adjudication. This will increase the effectiveness
of HUD's investigative activities.
While HUD's fair housing enforcement function provides
critical redress for individuals who face discrimination, we
will not eliminate discriminatory barriers in the housing
market through the enforcement of individual cases alone. This
past year, HUD created the Office of Systemic Investigations to
initiate large-scale cases on behalf of the public interest.
The consolidation of this responsibility in one unit will allow
HUD to better address novel and complex cases in lending and
against large developers. I will ensure HUD also continues to
work closely with the Department of Justice on joint
investigations and in the referral of pattern-and-practice
cases.
Q.2. In your opinion does the Office of Fair Housing and Equal
Opportunity currently have enough funding to support fair
housing enforcement? Does it have enough staff ? What programs
or projects to support fair housing enforcement would you like
to see initiated in FHEO if you are confirmed? Will you ensure
that FHEO will have enough travel funds to provide for on-site
investigations in every case?
A.2. With the funds available, HUD and its State and local
partners currently investigate more than 9,000 housing
discrimination complaints each year, while also conducting
compliance reviews and investigations of HUD-funded recipients.
Of course, this does not represent the full extent of housing
discrimination in America. HUD's national housing
discrimination studies, conducted in 2000, show that racial
minorities experience some form of different treatment on
average, in over 20 percent of the time they seek housing.
HUD's disability study, issued this year, showed that hearing-
impaired persons using a TTY face some form of different
treatment than half of the time they make a call to inquire
about housing. People in wheelchairs, visiting apartment
buildings in person, are treated differently one-third of the
time.
It is true that HUD does not have the resources to pursue
every entity that engages in discrimination. Still, HUD can
educate both consumers and housing providers about their rights
and obligations under the law through our high-profile cases.
In particular, I would like to bring more Secretary-initiated
cases, more cases on behalf of people with disabilities, and
more cases that combat predatory lending. The newly created
Office of Systemic Investigations provides a mechanism for us
to do so.
I believe on-site investigations are critical to the
successful and appropriate resolution of a case. As Assistant
Secretary, I will work to make sufficient travel funds
available for fair housing investigations.
Q.3. FHEO established a fair housing training academy and it is
mandatory that substantially equivalent State and local
agencies attend, often to the exclusion of other available fair
housing education. However, many FHAP agencies report that the
courses lack substance and the teachers are not the best in the
field. Evaluations have been completed by all attendees. Will
you review these evaluations personally to determine if the
Fair Housing Academy is meeting its goals and expectations?
A.3. The National Fair Housing Training Academy just completed
its first year of operation successfully providing training to
over 600 attendees. In the coming year, the Academy will
include some advanced courses that will meet the training needs
of our more experienced investigators. Like any new project, I
am sure the Training Academy will have to make adjustments and
improvements as it moves forward. It will need to modify and
expand the curriculum to best meet the needs of fair housing
investigators. To that end, the feedback that we receive from
attendees is invaluable. We look forward to receiving their
suggestions and using them to guide this project.
Q.4. The current Office of Fair Housing and Equal Opportunity
has very few written resources that provide education and
outreach about the Fair Housing Act and other civil rights laws
that the Office enforces. What are your plans to provide
written educational materials for industry, advocates, and
enforcers? In particular, given that Secretary Jackson
announced in early August, in conjunction with the issuance of
HUD's Disability Discrimination Study, that HUD intends to
``educate both consumers and landlords about the rights of
disabled individuals,'' what are your plans to develop
materials and programs to conduct this education?
A.4. HUD has produced some excellent resource material,
available in multiple languages, to inform people of their fair
housing rights and what they can do if they believe they have
experienced housing discrimination. At conferences,
conventions, and fairs, the Department regularly distributes
brochures, posters, and forms people can use to report
discrimination.
Moreover, the Department provides thousands of pages of
resource material on fair housing at http://www.hud.gov/
fairhousing. Persons searching on Google need only type in
``HUD'' and ``fair housing,'' and HUD's fair housing home page
is the first site retrieved. HUD has made numerous improvements
to that page to make it more user-friendly. From any public
library, you can visit that site and learn how to file a
complaint with HUD; read the charges HUD has recently issued;
and learn about your rights as a person with a disability under
the Fair Housing Act and other civil rights laws. There is also
information on the responsibilities of a housing provider and
the additionally responsibilities of providers of federally
assisted housing.
HUD also funded the creation of the written and web-based
resource materials produced by Fair Housing Accessibility FIRST
at http://www.fairhousingfirst.org/. This program promotes
greater compliance with the Fair Housing Act's accessibility
compliance among private developers. You can also find and read
every fair housing research publication.
When HUD published its most recent study, ``Discrimination
Against Persons with Disabilities: Barriers at Every Step,'' in
August, the Department made that report available at http://
www.hud.gov/offices/fheo/library/dss-download.pdf, along with a
Guidebook for Practitioners at http://www.hud.gov/offices/fheo/
library/dss-guidebook.pdf. The Department produced the
guidebook as a resource for disability and fair housing
advocates so they can address discrimination in their
communities. The National Fair Housing Training Academy will
also use the guidebook as training for fair housing
practitioners. The findings also underscore the importance of
continued funding of the much-praised FIRST program.
In addition, HUD and the Department of Justice have issued
a joint statement on reasonable accommodations under the Fair
Housing Act, which answers some of the most frequently asked
questions regarding reasonable accommodations.
Beyond this, HUD provides education and outreach grants to
fair housing organizations, often placing an emphasis on a
particular education need (that is, outreach to people with
disabilities or to Hispanics and Latinos). The National Fair
Housing Training Academy will begin cataloging these materials
to make them available to all fair housing groups.
Q.5. We have heard complaints that different fair housing HUB
and program offices take different positions on interpretations
of the Fair Housing Act, Section 504 of the 1973 Rehabilitation
Act and Title VI of the 1964 Civil Rights Act. What will your
office do to address possible inconsistencies among your
offices?
A.5. It is important that HUD offices have a consistent
interpretation of the Fair Housing Act. The training underway
on the new Title VIII handbook should go a long way to address
this. Under my leadership, HUB directors will continue to have
weekly phone calls to discuss problems and concerns with cases.
I will also have quarterly meetings with HUB directors to
address policy and interpretation of the Fair Housing Act and
our requirements. Furthermore, I will provide regular guidance
on precedent setting issues to ensure uniform interpretation on
novel issues.
Q.6. How is HUD planning to make sure in the wake of Katrina
that those dislocated voucher holders of Section 8 housing
choice/ tenant-based vouchers or 811 mainstream vouchers are
matched with and placed in accessible housing that meets their
needs? And if they are in communities without such rental
stock, what contingencies can HUD take to ensure they do not
wind up homeless?
A.6. After the tragedy suffered by so many in the Gulf region,
it is important that we not only provide people with a place to
call home, but also ensure that they can access that home. To
achieve this, many groups, including State and local housing
providers and the housing industry must work together. As an
initial step, I propose that HUD require all its recipients to
survey the availability of their accessible units and give
priority for those units to evacuees who require those
accessibility features. HUD should also issue guidance to all
HUD recipients reminding them of their duty to comply with the
requirements of Section 504.
HUD will coordinate with FEMA to ensure that there is
access into its manufactured housing, as needed, to identify
the location of mobile home parks with accessible manufactured
housing or other accessible units, and to issue letters with
appropriate design standards. I understand that the
Manufactured Housing Consensus Committee, a Federal Advisory
Committee, is exploring providing guidance to all trailer home
manufacturers encouraging them to produce manufactured housing
units that are accessible.
On a longer-term basis, HUD should remind local governments
that are housing evacuees with disabilities in nursing homes
that consistent with Olmstead, this should not be considered
permanent housing for those persons.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR CRAPO
FROM KIM KENDRICK
Q.1. I am pleased that HUD has decided to hold public forums to
discuss proposed reforms to RESPA. This is a welcomed change
from previous attempts to reform RESPA that appeared to have
taken place without any regard to stakeholder opinions.
However, it is my understanding that these meetings have not
been recorded and no public record of what transpired in the
meetings exists. Can you explain HUD's reasoning for not
recording these meetings and if officials plan to record future
meetings?
A.1. The RESPA Reform Roundtables that HUD held this summer
with representatives of industry, including small business
entities, and consumers, although publicly announced for
purposes of information and transparency of HUD processes, were
established as informal meetings. One of HUD's objectives in
conducting the Roundtables was to initiate a meaningful and
productive discussion of issues surrounding the home settlement
process and how these issues might be addressed through
possible changes to HUD's RESPA regulations or other means, and
HUD's view was that this objective could be best achieved
through an informal meeting setting. HUD's concern was that the
recording of these meetings would lend a formality to the
meetings, which HUD thought would be counterproductive. HUD was
also concerned that the recording of the meetings would have
presented a chilling effect on the participants and their
willingness to voice proposals or comments about possible RESPA
reform, or how they voiced these proposals, which would
definitely be counterproductive to the objective of the
Roundtables. To ensure, however, transparency on this process,
HUD allowed members of the media to view the Roundtables and
report to the public on the views, proposals, and comments
expressed, and who said them but not with every statement being
recorded. By all accounts, HUD believes its RESPA Reform
Roundtables were well-received and a success.
HUD learned much from the discussion at the roundtables and
we are in the process of considering the information, views,
and proposals presented. No actions have yet been decided, and
we have not ruled out the possibility of additional meetings,
perhaps issue-specific meetings.
Q.2. Also, since you attended the series of roundtables on
RESPA reform, do you think there is consensus among the
industry on RESPA reform efforts, particularly on packaging and
the GFE?
A.2. I believe there is consensus on areas of RESPA for which
change would be welcomed by the industry, and the GFE is one
such area. Consensus on specific changes, however, whether
changes to the GFE or packaging, would depend, upon the
specific proposal for change presented by HUD. With respect to
both packaging and the GFE, HUD received several suggestions at
the Roundtables. Another positive outcome of the Roundtables,
in addition to the information received by participants from
HUD, was the willingness of the participants to be open to
suggestions for changes and the commitment to consider
proposals for change, whether offered by HUD, the industry,
consumers, or other interested parties.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED
FROM DARLENE WILLIAMS
Q.1. In recent years, HUD has had difficulty in releasing
reports in a timely way. For example, the HUD publication, ``A
Picture of Subsidized Households,'' has not been updated with
data past 1998. The current ``Worst Case Housing Needs
Report,'' based on 2003 data, is apparently completed but has
yet to appear, and the last ``Worst Case Housing Needs
Report,'' based on 1999 data, with ``an update for 2001,'' did
not appear until January 2004. How, as Assistant Secretary for
Policy Development and Research, would you work to improve this
record?
A.1. PD&R releases over 60 publications per year. Also, 800
publications are available on PD&R's website, www.huduser.org,
and more than 4.5 million documents are downloaded every year
from the site. The two specific publications you refer to are
among PD&R's in-house publications. I recognize that they are
very important to Congress and other PD&R users.
Work on the next ``Picture of Subsidized Households''
publication is almost complete. If confirmed as Assistant
Secretary, I would make it a priority to make this publication
available as soon as possible.
The Worst Case Needs for Housing Assistance Reports were
first issued at the direction of the Senate Appropriations
Committee in 1991 and are based on national data from the
American Housing Survey (AHS), which is funded by PD&R's
Research and Technology account. A Worst Case Needs for Housing
Assistance--A Report to Congress, based on the 2003 AHS data,
which first became available in June 2004 for analysis, is
ready for Department-wide clearance but Hurricane Katrina has
delayed the review process. The Departmental clearance process
typically takes 3 months. If confirmed, I will work to ensure
that Congress receives this Worst Case Needs for Housing
Assistance Report before the end of the 2005 calendar year.
The Office of Policy Development and Research has a strong
record of issuing objective, methodologically sound research
publications that are relied upon by policymakers, academic
institutions, housing advocates, and the construction, real
estate, and finance industries. If confirmed as Assistant
Secretary, I will work to build on this record of achievement
and ensure that PD&R remains a nationally recognized source of
sound and objective housing and economic information.
Finally, Congressional assistance and support for PD&R,
including funding for its Research and Technology account, is
critical for the successful completion of its duties. Sound and
objective data is the foundation for informed policy
decisionmaking. If confirmed as Assistant Secretary, I will do
my utmost to bring about the timely issuance of sound and
objective research.
Q.2. HUD possesses a significant quantity of data on the
housing and housing needs of low-income people in the path of
Katrina. Much of the most up-to-date data has not been made
available publicly, such as on the ``Picture of Subsidized
Households'' website. Will you make it a priority to make those
data available to the public so that they can understand the
impact the storm has had in their area and can use these data
in aiding the recovery of the Gulf region?
A.2. As you mention, PD&R maintains a great deal of information
on assisted housing and low-income housing needs. PD&R
regularly updates its files on assisted housing programs, and
already has contributed to HUD's Katrina-related effort: (1) by
providing maps on locations of HUD properties and participants
to the Secretary; and (2) by making available, on very short
notice, information on participants in multifamily assisted
programs in the areas impacted by the hurricane, so that PHAs
across the country could confirm that families applying for
assistance were, in fact, impacted by Katrina.
PD&R staff are beginning to work now on a geographic
information system (GIS) application that will provide more
extensive tabulations, maps, and modeling of housing outcomes
in the States
impacted by Katrina. As Assistant Secretary, I would lend my
best efforts to ensure that data that would be useful to the
public in responding to this disaster would be available to the
public.
Q.3. In a recent GAO report, HUD was found to lack transparency
in presenting the Fair Market Rent data. It was very difficult
to replicate the results or determine how individual FMRs were
determined. Since that report, HUD has made considerable
progress in showing where the fiscal year 2006 Fair Market
Rents released June 2, 2005, came from. Twelve weeks later (and
6 weeks late), HUD released 70 FR 50138 that proposed changes
to the 50th Percentile Fair Market Rents but did not provide
sufficient information to replicate or understand how an
individual community scored on the various criteria. The notice
was released on August 25, 2005, with only a month of comment
time. Are you committed to making the work of PD&R where it
relates to the administrative work of HUD transparent and
useful to the end users, the tenants, and PHAs that must live
with these results?
A.3. Senator Reed, I can assure you that, if confirmed, I am
committed to continuing PD&R's efforts to make data related to
PD&R's administrative work as transparent and useful as
possible to those affected by the decisions made based on the
data. PD&R's Fair Market Rent (FMR) documentation websites are
a primary example of how, when staff and resources are
available, the public can be made better informed about how
data are used to make decisions affecting their lives. PD&R has
made available sufficiently extensive data that allows
localities to replicate virtually all FMR determinations.
There are times, however, when statutory constraints
related to the privacy of the American people, and the accuracy
of the data used for HUD's administrative decisions, may come
into conflict with the goals of transparency of methods and
usefulness of data. For example, the FMR Documentation websites
cannot, under the Privacy Act of 1974, 5 U.S.C. Sec. 552a, use
the same special tabulations of the 2000 Census used by PD&R to
benchmark the FMRs. The FMR Documentation websites demonstrate
how the 2000 Census base rents are calculated, but that
demonstration does not always exactly match PD&R's results due
to rounding in the data on the website.
The 50th percentile FMR determination presents another such
case. Two of the data elements used to make the 50th percentile
FMR determinations cannot be released to the public because of
Privacy Act considerations. Like the data used to benchmark
FMRs to the 2000 Census, the underlying data on the
concentration of affordable housing units from the 2000 Census
is a special tabulation of rental housing units available for
use only to Sworn Census Officials (PD&R has several on staff).
A rounded version of this special tabulation is provided that
does not allow the public to produce the same results as PD&R
because the rounding of data at small geography levels (tracts)
introduces differences that are compounded when many rounded
data elements are summed. The data on concentration of voucher
tenants is derived from individual tenant records in HUD's
administrative data systems. While HUD and PD&R can report the
results of analysis of these data, HUD and PD&R are prohibited
by law from releasing the source data to the public.
The August 25, 2005 Notice clearly stated that HUD could
not release the data used to make the 50th percentile FMR
determinations. The Privacy Act barrier to disclosure was part
of the justification for applying stricter scrutiny of the data
under HUD's
Information Quality Guidelines.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES
FROM FRANKLIN LAVIN
Q.1. What specific issues would you place at the top of the
agenda of the Trade Promotion Coordinating Committee?
A.1. The TPCC is a critical tool for making export
opportunities more available to U.S. businesses. My priorities,
if confirmed, will be to implement the 2005 National Export
Strategy, coordinate an interagency component to the
President's Asia Pacific Partnership for Clean Development, and
use the TPCC to broaden the base of U.S. companies that export.
<bullet> The 2005 Strategy focused on making sure that U.S.
small businesses are aware of and possess the tools they
need to take advantage of recent market openings such as
CAFTA. In addition, the TPCC is focusing on seven other key
markets (Japan, South Korea, China, India, Russia, EU, and
Brazil) where United States Government trade promotion
resources can have the biggest impact.
<bullet> The Department is helping to coordinate an interagency
component to the President's Asia Pacific Partnership for
Clean Development. This partnership focuses on practical
measures that can be taken by countries in the Asia-Pacific
region to create new investment opportunities, build local
capacity, and remove barriers to the introduction of clean,
more efficient technologies. U.S. companies are leaders in
many of these technologies, and the TPCC agencies will
engage these companies to help them participate in projects
that are part of this partnership.
<bullet> I would like the TPCC agencies to develop private
sector partnerships that encourage more U.S. companies to
export. The latest Census figures show that of the 1.5
million U.S. manufacturing and wholesales firms only
225,000 of them export. One study showed that as many as a
third of nonexporting firms would export if they had the
right information and assistance. The Department is
currently piloting a number of innovative partnerships with
the private sector (for example, Fed Ex and PNC Bank). One
of my goals will be to develop these and other partnerships
into a larger strategy to get more U.S. companies
exporting.
Q.2. The U.S. trade deficit with China is rapidly increasing
and will likely exceed $200 billion by year-end. What specific
steps do you propose to help United States exporters penetrate
Chinese markets and deal with the imbalance?
A.2. If confirmed, I intend to pursue a three-pronged approach
to helping United States business export to China.
First, we need to take every step we can to improve market
access for United States companies in China. We will continue
to press China to adhere to its WTO commitments. We will use
the annual JCCT process, the Trade Review Mechanism of the WTO,
and bilateral senior-level meetings in this effort.
Second, we need to reach out to companies in the United
States to make sure they understand the opportunities of the
China market. We will step up our trade promotion efforts to
assist United States companies in locating qualified buyers in
China. This will include a series of focused trade events
during 2006, continued improvements to our China Business
Information Center (CBIC), and full implementation of the
American Trading Centers (ATC) initiative which will
particularly help small and medium United States companies
enter the market in a broader range of Chinese cities.
Third, we need to vigorously enforce our laws against
unfair trade practices. If confirmed, I can assure you that we
will use every tool at our disposal to rigorously enforce the
rights of U.S. business under our trade laws. Indeed, the Bush
Administration has put in place more antidumping duty orders on
products from China (29) than were put in place during the
prior 8 years (25). In addition, the Commerce Department is
currently enforcing 57 antidumping duty orders on goods from
China, more than twice the number of orders being enforced with
respect to the next largest country (Japan, 26).
I have spent 15 years helping United States businesses
compete in Asia and while China is a challenging market for
United States business, it can also be very rewarding. Despite
these challenges, U.S. businesses have had some success. United
States goods exports to China have more than tripled during the
past 10 years, increasing from $9.3 billion in 1994 to $34.7
billion in 2004. Much of this growth has taken place following
China's accession to the WTO in 2001. The average annual growth
rate between 2002 and 2004 was 28.5 percent; almost double the
average increase from 1994 to 2001 (15.2 percent).
Q.3. The currency imbalance between the United States and China
encourages U.S. companies to move manufacturing to China and
ship finished goods back to the United States for sale. Almost
60 percent of China's exports are now produced by companies
funded by foreign capital.
In a 1994 Foreign Affairs article, you seemed to advocate
ameliorating Chinese trade barriers through inbound United
States investment--which could lead Chinese companies to
purchase American technology and American goods such as machine
tools--rather than through an export-based strategy aimed at
the Chinese consumer market. Is that still your view?
A.3. I believe there are three important elements to our China
strategy: First, we must continue to push for improved market
access for U.S. companies, using bilateral negotiations and the
WTO process to continually improve our companies' ability to
compete. Second, we must expand export promotion for United
States products and companies, helping match suppliers with
buyers, and familiarize new-to-market companies with the
challenges of China. Third, we need to ensure the rigorous
enforcement of our trade laws so that no Chinese exporter can
use unfair means to compete in the United States. This
multiprong approach, if consistently pursued, should yield
positive results for American exporters.
As to the question of United States-China investment, I
believe that as bilateral economic engagement continues to
grow, so will prospects for bilateral investment. It should be
noted that Chinese investment in the United States can bring
benefits for United States companies and workers, for example,
job creation. Of course, such transactions should be subject to
CFIUS review where appropriate.
Q.4. Would you favor the United States taking actions such as
initiating a WTO case or the imposition of tariffs to encourage
the Chinese to allow the value of the remnimbi to reach a
realistic level?
A.4. The Administration has been clear in its position that
China should move toward a market-based flexible exchange rate
and there has been some progress on that front. The Treasury
Department has the lead for the Administration on that issue
and I would refer you to that agency for further details.
Q.5. If confirmed, you will be involved in the current round of
WTO negotiations. What importance would you assign to U.S.
antidumping and countervailing duty laws in the overall
strategy of the Office of International Trade Administration?
A.5. Preserving the effectiveness of the antidumping and
countervailing duty laws is crucial to the overall strategy of
the International Trade Administration in the current round of
WTO negotiations. I believe that strong antidumping and
countervailing duty laws are critical for maintaining support
for trade liberalization. We must ensure that our workers and
businesses are protected against unfair trade, while gaining
the great benefits of larger global markets.
Working with the USTR, the International Trade
Administration has been very active in the negotiations on the
issues of antidumping and countervailing duty trade remedy
measures--tabling many papers to promote our objectives in
these negotiations. I will continue to work hard to ensure that
the United States' concerns, including those identified by
Congress in the Trade Promotion Authority, are addressed as
part of the WTO Rules negotiations and that antidumping and
countervailing duties remain effective remedies against unfair
trade.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM FRANKLIN LAVIN
Q.1. Mr. Lavin, unlike its predecessors, the National Export
Strategy for 2005 is silent on the matter of tied aid.
Obviously, you cannot be expected to comment on reports
with which you have not been involved. For the record, though,
could you provide the Committee your view on the extent to
which foreign tied aid practices remain a problem.
A.1. While tied aid remains an issue, it has become less of a
problem. Tied aid now averages between $3 and $4 billion, down
from an average of $10 billion in the early 1990's. We will
continue to match any violation of OECD rules.
Because of the success in negotiating disciplines on tied
aid in the OECD, most tied aid now occurs in social sectors
like education, basic medical care, rail, water, and waste
water. While tied aid is less injurious when used to fund
projects in noncommercial sectors, it is not the most effective
use of development dollars.
Q.2. The issue of intellectual property rights, particularly
involving China, has been a significant problem for decades,
costing American manufacturers billions of dollars in lost
revenue, and there is little indication the problem will go
away anytime soon. The National Export Strategy report for 2005
devotes considerable space to this recurring problem.
Apart from continuing to raise the issue in bilateral
discussions with Chinese counterparts, can you provide the
Committee some indication of what measures you are considering
to help affect significant change in this nefarious practice by
Chinese industry?
A.2. The International Trade Administration (ITA) currently has
four initiatives underway on the IPR problem:
<bullet> Policy Efforts: Through the commitments secured at the
Joint Commission on Commerce and Trade (JCCT), and in other
fora, we are working to ensure that China has in place and
enforces the policies needed to ensure adequate protection
of intellectual property. This includes seeing a
substantial increase in the number of criminal prosecutions
of violators of foreign IP rights in China, ensuring that
Chinese Government agencies and enterprises use only legal
software; strengthening efforts to rid trade fairs of fake
goods; ensuring timely accession by China to the WIPO
global Internet treaties; and enhancing bilateral
cooperation between United States and Chinese law
enforcement agencies on combating IP infringing activities.
<bullet> Capacity Building: In cooperation with other United
States agencies and the United States business community,
ITA has conducted numerous training programs for Chinese
officials and business executives over the past several
years. For example, we have conducted IPR enforcement
seminars and training focused on criminal and customs
enforcement. These efforts are aimed at ensuring that China
has the trained personnel necessary to ensure protection
for IPR. We will continue to expand these efforts.
<bullet> Outreach to U.S. Industry: We are working on a variety
of programs to ensure United States companies are aware of
the need to protect their IP in China and to give them the
information on how to accomplish this goal. For example, in
2004, ITA's China Office organized over a dozen seminars
across the United States addressing how small and medium
enterprises can protect their IP. We are working with
interagency colleagues to implement an even more ambitious
IP outreach program for 2005.
<bullet> Metrics: We are working with other United States
Government agencies and United States industry to ensure
that we have the metrics necessary to track future trends
in China's IP situation. The ability to benchmark China's
performance in IP protection and enforcement will continue
to be a priority for us.
All of these activities are undertaken in coordination with
the Department of Commerce's broader IP initiatives, which
include the creation of a new position at DOC--a Coordinator of
International Intellectual Property Enforcement, the stationing
of additional United States Government IP experts in China and
the launching of the Patent and Trademark Office's IP Academy
to train foreign officials, including Chinese, in IP law and
regulations.
If confirmed as Under Secretary for the International Trade
Administration, I would like to explore the following:
<bullet> Initiate a United States Government-Industry ``Best
Practices Initiative'' for manufacturers looking to protect
their intellectual property in China throughout its
distribution chain. Help U.S. business make it as difficult
as possible for IP crimes to occur.
<bullet> Reinvigorate policy discussion in China to increase
market access for United States products in China, with a
focus on expanding legal distribution channels for United
States products currently unavailable in China's market.
The easier the legal distribution channels become, the less
attractive the illegal channels.
<bullet> Cooperate with Chinese indigenous industry coalitions
to raise awareness of the importance of protection of
Chinese intellectual property. As the Chinese increasingly
develop their own intellectual property, this should foster
an indigenous constituency sympathetic to our message.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR DOLE
FROM FRANKLIN LAVIN
Q.1. Mr. Lavin, if confirmed by the Senate, in your role
overseeing the Committee on the Implementation of Textile
Agreements (CITA) what is your view of the future of the
Chinese textile safeguards?
A.1. The Administration is committed to finding a solution to
the problems we are confronting in the textile sector,
particularly with respect to imports from China. There is broad
support in our textile and apparel industries for a
comprehensive approach to textile trade with China that would
provide greater certainty in the marketplace. We are currently
engaged in negotiations with China aimed at reaching a broad
textile agreement. United States negotiators met with Chinese
officials again on this issue on September 26-28. Assuming we
have successful negotiations with the Chinese, it is our intent
to have an agreement that extends through 2008. I can assure
you that we will continue to exercise our rights, as
circumstances warrant, to invoke the textile provision of
China's Accession Agreement to the World Trade Organization.
Q.2. Mr. Lavin, in your time as United States Ambassador to
Singapore, that country was identified as a major center for
the transshipment of textiles. What actions did you and your
staff take to reduce this illegal trade?
A.2. Singapore is the world's largest transshipment center. For
a ship to get from anywhere in the Indian Ocean or South Asia
to anywhere in the Pacific, including the United States west
coast, it typically has to go through the port of Singapore.
Singapore's role as a major transshipment center raises the
possibility of illegal transshipments through that port. The
U.S. Government has spent much time, effort, and money over the
last
several years establishing stricter controls over
transshipments through Singapore and working with the
Singaporean Government to increase their knowledge and
prosecution of such illegal shipments.
The United States-Singapore FTA requires an unprecedented
level of cooperation between the United States and Singaporean
Customs services, with a particular emphasis on preventing
illegal textile transshipments and rules-of-origin fraud. One
textile fraud expert at DHS ICE headquarters told us that the
United States-Singapore FTA is the strongest of any FTA for
Customs cooperation and antitransshipment procedures for
textiles.
The FTA provides for criminal, civil, and administrative
penalties to deter circumvention and imposes additional
obligations related to information sharing and investigations.
For instance, the FTA requires textile producers to retain
production and shipping documents for 5 years (the same as in
the United States) rather than only 2 years, as under previous
regulations. This makes it easier for United States and
Singapore Customs to carry out investigations of alleged
transshipment and other illegal activities.
As a result of the FTA, all Singapore textile
manufacturers, subcontractors, and exporters must register with
Singapore Customs and reregister every 2 years, the first part
of a process of enhanced transparency and enforcement.
Singapore also now provides to United States Customs and Border
Protection (CBP) monthly reports of survey results, including
factory profiles, capacity, types of goods produced, and any
anomalies they spot. The goal is to ensure that Singapore-based
firms are actually capable of producing what they claim to be
producing. Singapore Customs has increased its number of
personnel to handle this new enforcement workload.
The Administration takes seriously its responsibilities to
prevent fraudulent textile shipments. When we have approached
Singapore with actual cases of textile fraud, they have
responded effectively. While it predates the FTA (and my tenure
as Ambassador), in one case in 1999, we found a Singapore-based
company engaged in several million United States dollars worth
of fraudulent labeling and approached the Singapore Government
for assistance. They closed the company down.
In early 2004, my Embassy hosted a CBP textile production
verification team, known as a ``Jump Team.'' Its job was to
verify production capabilities of more than a dozen Singapore
companies of interest. The Jump Team's final report did not
reveal illegal export activity per se, but did report that
several companies had not implemented document retention
required for exports to the United States. The team identified
these companies to Singapore Customs as entities to be
scrutinized to ensure compliance.
As the world's largest transshipment port, we can be sure
Singapore will remain a potential venue for illegal
transshipment activities, and it will remain a challenge for
Singapore authorities to know for certain what is inside the 21
million containers that pass through each year. But in my 4
years as Ambassador, we have pressed hard for Singapore to
tighten its trade controls and enforcement and we have seen an
impressive growth in Singapore's cooperation with us across a
wide range of trade control activities, including preventing
illegal textiles transshipments. If confirmed, illegal
transshipment of textiles will continue to be a priority.
Q.3. According to the National Council of Textile
Organizations, NCTO, ``China is a textbook case of how a
foreign government has used a network of illegal subsidies and
government interventions in order to destroy foreign
competition, both in the United States as well in many other
countries.'' Mr. Lavin, in your extensive dealings with China,
have you been aware of China using subsidies or government
intervention to damage a foreign competitor? If so could you
provide the Committee examples and proposed remedies?
A.3. China is very aggressive in the marketplace and its
practices can be detrimental to United States companies. The
U.S. Government needs to be at least as equally aggressive in
market access and remedies as well as in export promotion.
Using the Joint Commission on Commerce and Trade (JCCT) gives
us a multiprong approach and will improve market-operating
conditions. Improving the operating environment in China for
United States business is a long-term effort and, if confirmed,
I am committed to using every tool in our toolbox, including
strict enforcement of antidumping laws.
Q.4. The United States has put forward a proposal in the Doha
Round negotiations to clarify that member countries are
permitted to distribute antidumping and countervailing duties,
as the United States currently does under the Continued Dumping
and Subsidy Offset Act. Specifically, this proposal states that
members may distribute the duties collected when respondent
companies continue to dump or receive subsidies any way that
WTO member countries see fit.
Do you support efforts to allow countries to distribute
antidumping and countervailing duties to the harmed industries
in the Doha negotiations? Please explain the reasoning behind
your answer.
A.4. As you know, the United States' enactment of the Continued
Dumping and Subsidy Offset Act (commonly known as the Byrd
Amendment) was challenged before the World Trade Organization
(WTO) by 14 countries that claimed the law violated the
antidumping and countervailing duty agreements. Although the
United States staunchly defended its right to distribute
collected antidumping and countervailing duties, arguing that
the relevant WTO agreements were silent on this issue, the WTO
Appellate Body found that the law was WTO inconsistent in that
the disbursements were a ``specific action'' against dumping
and subsidies that are not permitted under the WTO antidumping
and countervailing duty agreements. Because our laws were not
brought into compliance by the deadline of December 27, 2003,
several of the complaining WTO Member countries, including
Canada, the EU, Japan, and Mexico, have been authorized to
impose sanctions against goods from the United States. All 4 of
those countries are now imposing duties on selected U.S.
products in retaliation for our failure to come into compliance
with the WTO decision.
Congress has instructed Commerce to engage on this issue in
the context of the WTO Rules negotiations and I understand that
Commerce have raised the issue. If confirmed, I will ensure
that the Department continues our engagement on this issue as
the Doha Round progresses. We need to find a resolution to this
issue that respects Congressional direction and satisfies WTO
rules or U.S. companies and U.S. consumers will continue to be
exposed to retaliation.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM DARRYL JACKSON
Q.1. Mr. Jackson, some of us in Congress are concerned about
the transfer of militarily sensitive technology to foreign
nationals residing in the United States whose countries of
origin have active programs in these areas, for example, Iran
and China.
A 2004 report by the Department of Commerce Inspector
General was highly critical of the Bureau of Industry and
Security's handling of the deemed export issue, including in
the issuance of licenses and in the monitoring of compliance
with those licenses.
Can you comment for the Committee on whether the issue of
deemed exports is receiving the attention it deserves by BIS?
Is there room for improvement there?
A.1. I consider the deemed export regulations to be a necessary
part of the U.S. Government's efforts to prevent the harmful
diversion of controlled dual-use technology to foreign
nationals. If confirmed, I will work to ensure that enforcement
of these regulations is robust.
I am also sensitive to the important role that foreign
scientists and other non-Americans play in America's companies,
universities, and research institutes. Accordingly, if
confirmed I will work with industry, the academic community,
and other Government agencies to increase awareness and
understanding of the deemed export requirements to prevent and
deter violations of the deemed export rule.
The Office of Inspector General report that you refer to
recommended that BIS implement programs to verify compliance
with special conditions in deemed export licenses. I understand
that BIS is finalizing development of protocols for conducting
such compliance reviews of selected deemed export licenses,
similar to the procedures currently in place to conduct foreign
end-use verifications. President Bush's fiscal year 2006 budget
request, as passed by the Senate and the House, provides BIS
with resources to implement this new compliance verification
program, and would enable selected deemed export compliance
reviews in sensitive sectors beginning in fiscal year 2006.
Q.2. Mr. Jackson, the United States proposal to provide India
with nuclear technology under the Next Steps in Strategic
Partnership program could have serious implications for this
country's nonproliferation policy. Providing even commercial
nuclear technology to a country that is not a signatory of the
Nonproliferation Treaty and that has tested nuclear weapons
could be seen as undermining the credibility of U.S. policy in
a very crucial area. And, I should remind the Committee that
the Administration imposed sanctions on two Indian scientists
for selling nuclear technology to Iran.
What specific Red Flag Guidance will be provided to
exporters of items that formerly required licenses for exports
of goods to India under the new Export Administration
Regulation amendments of August 30? Can you state that no
personnel employed at any Indian Space Research Organization
facility or site that has been
removed from the Entities List as a result of the Strategic
Partnership policy has any relationship with any Indian Defense
Research and Development Organization office, facility, or site
responsible for India's ballistic missile program?
Have there been any denials to India since last September
when Commerce first amended the EAR under the NSSP? If so, what
kinds of exports have been denied?
A.2. I support the policy of President Bush in working toward a
strategic and economic partnership with India, in recognition
of the steps India has taken to meet its obligations as a
nation with advanced nuclear technology.
Our relationship with India has progressed via a series of
reciprocal steps, in which Indian actions have made possible
United States steps. As a result, I understand that India has
strengthened its internal and external controls on sensitive
technologies, thereby allowing the United States to ease
certain dual-use export controls with regard to India. One of
the key steps India took was passing legislation to enhance its
export control system and strengthen its enforcement
capabilities.
Additionally, under Phase I of the NSSP, the United States
and India reached an agreement on procedures for conducting
end-use checks on sensitive United States-origin dual-use items
exported to India. It is my understanding that BIS's Export
Control Officer has been actively and successfully conducting
such checks.
If confirmed, I will make enforcement of the U.S. export
control laws with respect to India a top priority, and I will
work to prevent the diversion of sensitive items to proscribed
nuclear weapons and missile activities. I look forward to
working closely with you, your staff, and the Committee on this
very important issue.
RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
FROM DAVID McCORMICK
Q.1. Mr. McCormick, some of us in Congress are concerned about
the transfer of militarily sensitive technology to foreign
nationals residing in the United States whose countries of
origin have active programs in these areas, for example, Iran
and China.
A 2004 report by the Department of Commerce Inspector
General was highly critical of the Bureau of Industry and
Security's handling of the deemed export issue, including in
the issuance of licenses and in the monitoring of compliance
with those licenses.
Can you comment for the Committee on whether the issue of
deemed exports is receiving the attention it deserves by BIS?
Is there room for improvement there?
A.1. Deemed export controls are an important part of the
overall mission of the Bureau of Industry and Security (BIS)
and, if confirmed, I will make this area one of my top
priorities.
I understand that BIS has undertaken a major deemed export
outreach program over the past year to ensure that those
covered by deemed export controls, particularly in the academic
and research communities, are aware of the current
requirements. I also have learned that BIS is currently
reviewing extensive public comments on changes that the
Department of Commerce Inspector General recommended be made to
the deemed export controls. If confirmed, I will be closely
involved in making decisions on any potential changes to the
deemed export controls and otherwise working to make this
important program continues to meet our national and economic
security needs.
Q.2. Mr. McCormick, the United States proposal to provide India
with nuclear technology under the Next Steps in Strategic
Partnership program could have serious implications for this
country's nonproliferation policy. Providing even commercial
nuclear technology to a country that is not a signatory of the
Nonproliferation Treaty and that has tested nuclear weapons
could be seen as undermining the credibility of U.S. policy in
a very crucial area. And, I should remind the Committee that
the Administration imposed sanctions on two Indian scientists
for selling nuclear technology to Iran.
What specific Red Flag Guidance will be provided to
exporters of items that formerly required licenses for exports
of goods to India under the new Export Administration
Regulation amendments of August 30? Can you state that no
personnel employed at any Indian Space Research Organization
facility or site that has been
removed from the Entities List as a result of the Strategic
Partnership policy has any relationship with any Indian Defense
Research and Development Organization office, facility, or site
responsible for India's ballistic missile program?
Have there been any denials to India since last September
when Commerce first amended the EAR under the NSSP? If so, what
kinds of exports have been denied?
A.2. I fully support President Bush's policy toward India and,
if confirmed as Under Secretary, look forward to implementing
it fully, with full attention to its national security aspects.
Concerning the Red Flag Guidance you mentioned, it is my
understanding that U.S. exporters are advised of their
obligation to know their customers when exporting to an end-
user formerly listed on the Department of Commerce Entity List.
BIS strongly urges exporters to use Supplement No. 3 to Part
732 of the Export Administration Regulation (EAR), ``BIS's
`Know Your Customer' Guidance and Red Flags,'' when exporting
or reexporting to any entity in India. BIS officials have told
me that exporters are specifically advised that exporting to an
entity formerly listed on the Entity List constitutes a ``Red
Flag'' to be resolved prior to export.
Concerning your question regarding Indian Space Research
Organization facility personnel, the answer to this question
requires access to classified information and, as a nominee, I
am not authorized to review classified information. It is my
understanding, however, that the Indian Space Research
Organization facilities, which were recently removed from the
Entity List, are involved in India's civilian satellite program
and not with its space launch vehicle program. If confirmed, I
would be happy to follow up on this question in greater detail.
Finally, with respect to denied export license
applications, BIS officials inform me there have been denials
to India since the October 2004 revisions to the EAR made in
conjunction with the United States-India Next Steps in
Strategic Partnership (NSSP). As a nominee, I do not have
access to information on what kinds of exports have been
denied. I have asked BIS officials to provide this information
to you in a separate transmittal.
Q.3. Mr. McCormick, a recent article in The Wall Street Journal
stated that the FBI has estimated that there are as many as
3,000 Chinese ``front companies'' in the United States actively
seeking to illegally acquire militarily sensitive dual-use
technologies. Those efforts are in addition to the large number
of licenses legitimately provided to United States companies
exporting dual-use items to China.
Similarly, a June article in the Washington Times reported
that a Chinese front company won a contract from a system
manufacturer involved with the Navy's Aegis battle management
radar system and proceeded to steal details of that highly
sensitive technology, which may have contributed to China's
development of its own Aegis-type radar system.
There are very serious national security considerations
involved in the position for which you have been nominated. Can
you assure the Committee of your commitment to ensure that
national security will not be jeopardized in deference to
commercial interests and that the gravity of the issue of dual-
use export controls will receive the attention it deserves?
A.3. I am committed to vigorously pursuing BIS's national
security mission. Having proudly served in the U.S. Army, I am
keenly aware of the importance of a dual-use export control
system that keeps sensitive goods and technologies out of the
hands of our adversaries and potential adversaries. If
confirmed, I will work to ensure that the dual-use licensing
process, from regulation to enforcement to outreach, prevents
exports that would undermine U.S. security. By paying close
attention to the security requirements of dual-use trade, we
can also support legitimate trade in dual-use items.
I would note that, with respect to China, BIS has
aggressively pursued enforcement cases involving unauthorized
exports, particularly those which involve goods which could
support Weapons of Mass Destruction programs or are intended
for unauthorized military use. If confirmed, I will accord the
highest priority to the effort to prevent illegal diversions of
dual-use goods and technologies to China. I look forward to
working closely with you, your staff, and the Committee, to
fulfill our common commitment to protecting our Nation's
security.
Q.4. Have there been any denials to India since last September
when Commerce first amended the EAR under the NSSP? Is so, what
kinds of exports have been denied?
A.4. The Bureau of Industry and Security (BIS) denied 64
license applications for exports to India during the period of
September 2004 to September 2005. The United States does not
approve license applications for exports intended for use in
programs of concern, such as India's ballistic missile, space
launch vehicle, nuclear weapons, and unsafeguarded nuclear
power program. The majority of the items that were denied for
export to India were low-level items not elsewhere specified on
the Commerce Control List (CCL) intended for these programs of
concern or items that posed a risk of diversion to such
programs.
In addition, BIS denied other items that were controlled on
the CCL, including: Oscilloscopes, vibration test equipment,
general electronic testing equipment, telecommunications
equipment, information security hardware and software,
dosimeters, isostatic presses, ceramic materials, and
technology for steam generators.