there cannot be a market economy if it does not function in an ethical matter. there cannot be likewise rules or markets if there are not a minimum set of rules. that is the line that we're going to tread, the part that we're going to tread. [speaking in native tongue] >> translator: mr. president, you first spoke of the reform of the monetary system and peter sam who is the put on the charter bank will have a question. peter, it's your floor. [speaking in native tongue] >> translator: mr. president, i'm on the other side of the hall. [laughter] >> >> you've just discussed with my counterpart some of the issues surrounding the regulation of banks. and i actually think much has been achieved. and much-needed to be changed in the regulation of banks to make them more resilient, better

governed, better able to withstand shocks. but you have quite rightly, i think, put the focus for the french presidency not only on completing that task but on addressing some of the wider stability issues within the financial system. so the issues around global imbalances, commodity prices as we talked about are much broader set of issues. and i do think this is an essential part of the equation. we have to make individual financial institutions stronger but we also have to make the system stronger. and as yet, that second task we probably haven't made enough progress on. my question to you, mr. president is, how best can the financial community, financial institutions, engage with the policy community on this second task? i believe we have a role to play

in helping not to make ourselves stronger but making the system stronger. and i very much welcome your advice on how best we can engage? thank you, mr. president. >> okay. [speaking in native tongue] >> translator: i'd like to give you two examples in responding. rather than engaging in an ideological battle, on the subject of who is earning too much and who is spending too much, it seems like we have a very specific set of objectives which is to start to agree on what constitutes an indicator in order to gauge or measure imbalance. i don't like talking about imbalances in too general term 'cause that brings us straight back to the ideology and i think we have to be pragmatic and not

ideological. now, what are the relevant indicators that enable us to define world imbalances? is it balance of payments, budget, budget deficits? what is it? there are different criteria. of course, it's difficult objective that we've set ourselves but this is what we're going to try to do. as of february we're going to try and bring about a convergence on g20 countries on a whole host of indicators, indicators that are relevant to define and measure imbalances. i was not entirely in agreement so where -- and so where there was so much talk about -- well, about the 4% level of surpluses you must be sanctioned. i didn't agree with that. the first thing we need to do is a very difficult one is to have a list of indicators in order to define and engage balances and then having done that, what we next need to do is this or answer the following question.

who is going to make sure, a, that they're calculated and, b, that they are implemented? now, from the point of the french president, maybe i'm sticking my neck out here. there is only one international organization that is relevant, that is the one where this criteria should be applied. now, this may be a coincidence. the g20 is 20 members and five guests, spain has a permanency and the other are not always the same. the imf have 24 members and they're not always the same ones but anyway, within this as governing body. so i think it would be really useful to rethink the imf's remit and statutes in order to perceive it and see it as the

world forum in charge of coordinating macroeconomic policies, financial and monetary policies. it seems to me that the imf would be better playing its role in doing that job than by looking at the wage bills of one of the world's most poorest countries in africa, which in any case, even if the wage build would be too high would not in any way contribute worsening world imbalances. whatever we do, i think we have to extend and broaden the role of the imf in combating these imbalances so we have two objectives. we define these criteria and we then apply them by changing the remit and the terms of reference at the imf. [speaking in native tongue] >> translator: mr. president, you have been extremely generous with your time and i think we have to close very shortly. we, unfortunately, have not give the floor to everyone.

but perhaps we could have with your permission to have a last statement before claus schwab would put one question as well. [speaking in native tongue] >> translator: good afternoon, rather, mr. president. a few months ago you presided over a wonderful african farms summit and you made sure that the link with africa and aid given to africa be at the center of the concerns of the g8 and g20 that you're the president of. now, africa is very povertied. you said yourself that in africa you have one -- you will have one billion more inhabitants in about 30 years' time. and you've also linked your statement about aid to africa with a tax to be imposed on

financial transactions. we can see that there might be incredible development thanks to the public/private partnerships that may become more numerous. but this is also linked to governance and problems and issues of corruption now. do you think, mr. president, that these public/private partnerships, these ppp's could be an addition to your vision of this tax on financial transactions or could it take their place if such a tax could not be introduced? you thank you, mr. president. >> thank you, madam. well, this is probably one of the most topics where there's the least agreement within the g20. and yet, which in my view is so obvious that we should be able to reach consensus. let me spell this out. in copenhagen, the world's major

countries a decision which was to pay to the world's poorest countries $120 million per annum as of 2020. now, as we are all running budgetary deficits, there is no one who in their wildest dreams could imagine that this could come out of state coffers. therefore, we have no choice. if we do -- if we want to keep our word, if we want to go back on our word -- and i will be next sunday as a guest of the african union summit in order to defend this idea, we need financing mechanisms. it isn't a matter of choice. it's a matter of obligation or, or let us sleep well at night. and the day that half of the world's population that has no access to energy, electricity,

development, infrastructure or food actually goes down into the streets and starts marching, it will be too late. so it's as simple as that. i think as a european -- i mean, europe is 12 kilometers away from the straits of gibraltar. i will say that for all developed countries that will not be able to handle migratory flows that will impossible to handle if we do not keep our promises. now, there are difficulties forms of this this financing could take. i personally remain attached to the idea of a tiny levy on financial tax systems. it's something i would put at the table at the g20. i know a certain number of friends and colleagues are against and they are entitled to be against. but what i will suggest then is that we set up a small group of

leading countries, lead countries in order to implement these financing systems and stand by our word and i have no doubt that a few years later other countries will tow our line because, you know, africa has its eyes firmly trained on us. and africa sees the promises of golden promises and those who actually put their money where their mouths are. so yes, the financing of private/public partnerships are an important contribution. can be an important cooperation but we cannot circumvent the issue of financing. i talk about 1 billion inhabitants in africa, 500 million who are under the age of 17. no social protection, no social infrastructure, no access to energy. do you really believe that we can imagine a stable world if things go on like this? of course i'm not saying normative financing is the solution to everything. it's not the panacea.

how do we do things? how do we handle them? we'll think about that. but it's a step in the right direction. i mean, is it reasonable to leave these ideas up to unreasonable people? have we not been witnessing the rise in terrorism that feeds on poverty, fanaticism that feeds on injustice. do we really think that we're going to be able to forge ahead with half of humanity that is very well thank you very much. and the other that isn't even able to say to survive and i say this to davos because i believe i'm talking to intelligent, smart people who think and who know these things can't go on like that. this vision that i called for is not simply to look at what's going on tomorrow morning or the next lead poll in the stock market. i'm thinking about 20, 30 years ahead. about a world which will not look in any way like the world

in which we live in, a world where information circulates at the speed of light. and which will simply not allow such injustice. when it took three months for news to reach europe from india, perhaps one could imagine they had some time to play with. that's no longer the chase it takes a nanoshe could and i still want to think about this. injustice, light is shined on injustice because information usda our fingertips immediately which makes it all the more urgent for us to make decisions and it makes it all the more impossible to stomach when one sees the appearance of poverty of others. and the future of your children, your grandchildren, your countries rest on our abilities to redress these imbalances and we can't even come up with another financing mechanism

which would represent a minute, a minute levee on financial transactions which could then be channeled to those economies that could then be in a position to buy the products that you manufacture 'cause that's what -- that will be the fallout for you. if we don't have the wisdom to anticipate that, then you will see that those -- the most reasonable governments that govern these poor countries will be swept away and the world will look like a very different place than what it looks like now. and it's my duty as the president of the g20 to raise this issue. i know as soon as when i talk about financing, everyone who dislikes taxes -- everyone dislike taxes. i dislike taxes. this will never work. you know, we live on the same planet. you and i live in the same world and this huge gap, these huge gaps will jeopardize not simply grow but the very future of your

companies and our societies. it's not a question of ideology. it has got to do with the way we think the world is going and what we think it should look like in 20 or 30 years. we're talking about imbalancing that are not only monetary, yes, we need to think about them. we need to think all about these financing mechanisms that will entitle people to pull themselves out of poverty in the same way as we years back, centuries back, were given the opportunity to pull out of poverty as a result of the industrial revolution. it's knot -- not simply a matter of ethics and have new ideas and not stick with the old threadbare ideas of past centuries. these are some of the issues that we're going to discuss at the g8, g20 and i could have

raised others. the commonsense, it's not to brile internet, it's not to restrict internet which is a fantastic tool but how can we civilize internet? how do we deal with the issue of taxation of the digital -- of the digital society? how do we protect ourselves from terrorism by internet? not because we are in favor of freedom of information that any terrorist group should be entitled to put on an internet or block an instruction how to build a bomb. it's not an offense to internet or to the development of personal private freedoms to say that. internet is one of the greatest revolutions that mankind has ever seen. and at the g8 we're going to invite the major protagonists on the digital scene to give their views on the subject.

and if i've come here, it's to talk about 2011. it's because i have a responsibility as i have state which is to imagine the future which is as you and bankers and heads of corporations have to think of the future of the companies, 20, 30, 40 years down the line insofar as possible. when you make decisions to invest, you do so not for the past but for the future. and for me it's the same thing. so just to say well, the order of financing is levied and taxed. we have to look at the future. thank you. [speaking in native tongue] >> translator: mr. president, thank you so much. i must say that this is caution here, reflect and indicate very clearly that we need this

partnership, the major issues do not concern politics and policymakers but it's the economy as well, the simple citizen, the man on the street, the unemployed that are concerned by this. so we promise to give you all the support we can in your endeavors. your presentation has so truly reflected the topic of this year's forum finding new values in common for this new reality. that is exactly it. and i think this year, 2011, is the tipping point is the turning point. if we as mankind are able to meet these challenges of the new reality and to build together the future and not just fight

the crisis, then we will have made steps forward. so i would wish you all the best of luck in your very important tasks and endeavors. thank you very much. [applause] >> c-span2, one of c-span's public affairs offerings weekdays live coverage of the u.s. senate and weekends booktv, 48 hours of the latest nonfiction authors and books. connect with us on twitter, facebook, and youtube and sign up for schedule alert emails at c-span.org. >> now the annual state of the indian nation address. we'll hear from jefferson keel, president of the national congress of american indians. there's remarks from alaskan

senator lisa murkowski. >> thank you. good morning. [speaking in native tongue] >> my name is jacqueline john and i'm the executive director of the national congress of american indians. the nation's oldest and largest american indian and alaskan native organization representing the interests of tribal governments across the country. it's my pleasure to welcome our distinguished guests here today in washington, d.c., and those of you from the across the country for the 2011 state of twenty-one nations. i would like to acknowledge at this time some of our honored guests in the audience. first of all we have some of our

board members. we have irene, we have david, larry, tara, mary ann mills, derek, and marge anderson. we also have joined here today by governor nelson, who is a pueblo and brian patterson who is the president of the united south and eastern tribes. chairman ernie stevens, jr. who traveled all night long to get here and to not miss his -- one of the state of indian nations who's the chair of the national indian gaming association. richard, the senior indian affairs advisor of the u.s. senate committee on indian finance. we have miss indian nations in the audience today. we have nathan of the indian affairs director for senator murkowski's office, wendy, from indian affairs advisors to senator reed. we have wade henderson from the leadership council of civil

rights, the president of the leadership council of civil rights also has joined us here today. so as we get started, i also -- before i do that, i also want to introduce. we have tammy daycare worth who is the assistant secretary and she has given us some special news here this morning which she is joined by stephanie birdwell who has been announced as being the new director of the office of indian affairs at the department of veterans affairs and we would like to congratulate her on that new opportunity. i want to thank across the country native voice 1 and the many tribal and public radio stations who have picked up our broadcast this morning. to air this address. and at this time it's my pleasure to be able to introduce the president of the national congress of american indians, jefferson keel. jefferson currently serves as the lieutenant governor of the chickasaw nation and he has been ncia's vice president for two terms. he is firmly committed to the

service and advancement of self-sufficiency and self-reliance for our indian people and he believes in the policy of helping our people through honorable public service. president keel has exemplified that by his own distinguished service being an army officer for 20 years and in active duty. ladies and gentlemen, please help me welcome the president of the national congress of american indians, jefferson keel. [applause] [speaking in native tongue] >> i want to thank you for that warm welcome. thank you, jackie, for the introduction. my fellow tribal leaders, tribal citizens, american citizens, national members of the national congress for american indians, members of the administration of the 112th congress of the united

states, and those listening or watching today from around the country and from around the world, i stand here today honored to deliver to you the state of indian nations address. after an exceptional year of bipartisan achievements to strengthen indian country, i'm pleased to report that the state of indian nations is strong and driven by a new momentum. once again, let me say that again. the state of indian nations is strong. we stand at the beginning of a new era for indian country. and for tribal relations with the united states. previous eras were defined by what the federal government chose to do. the indian removal period, when tribes were forcibly removed from their homelands to reservation. reorganization and termination era. the allotment era.

even the more recent promise of the self-determination era. but this new era is defined by what we as indian nations choose to do for ourselves. i'm honored to be joined this morning by many tribal leaders who worked hard to prepare our nations for this moment. i thank you for being here. we're poised to be full partners in the american economy and in america itself. we expect that in years to come, in seven generations, our children's children will look back and say, that was the moment when the future of indian country was changed forever. call it the era of recognition. call it the era of responsibilities met or of promises kept. whatever it's called, it brings

us closer and closer than ever to the true constitutional relationship between the united states of america and the indian nation. it brings us closer to what the constitution calls a more perfect union. [applause] >> today, i issue an invitation to tribal leaders, to indian people who are partners in congress and the administration and to all americans joined together, join us in helping us to build this new era. why is this new era possible only now? instead of before? recent years have brought a new foundation, the self-determination era has brought a promising partnership between tribes and the federal government. we've demonstrated our capacity as self-determined governments

that contribute to a stronger america. we worked hard to reach this point but that alone is not realize the promise of this new era. barriers remain and we're eager to work with our federal partners to remove those barriers. through the economic potential of our nation. there's another reason why we're just now seeing this opportunity for a new era. the state of the economy has played a significant role. these difficult times have made self-reliance into a necessity. today, the country is entering more than a time of difficult budget choices. as the federal government contemplates fundamental changes in the priorities of government. excuse me. as the federal government contemplates these changes, indian country offers a bold

opportunity. investing in self-reliant indian nations is not only the constitutional and morally right thing to do. indian nations offer a great untapped source of economic opportunity for all americans. it's the smart thing to do. earlier this month when the u.s. house of representatives read a loud the u.s. constitution. america's founders recognized the inherent sovereignty of indian tribes and the special relationship between tribes and the federal government. and they affirmed it. they affirmed it by if you got into words in our constitution. like all american people we are afforded basic constitutional rights. moreover, we carry a special recognition that tribes are

inherently sovereign nations within a nation. that tribes as stated in article 1 section 8 hold the same status as foreign nations and the states. these basic rights, these inherent rights are what we seek together to bring to all american people. justice, domestic tranquility, general welfare and the blessings of liberty to ourselves and our process taxpayerity -- prosperity. the preamble of the constitution talks of a more perfect nation and the indian nations is a profound step to words that more perfect union. i stated earlier if there's been much progress to make, to make this new era possible. i'd like to briefly review some of those successes from 2010. the passage and enactment of the tribal law and order act and the

indian health care improvement act were monumental. we thank those on both sides of the aisle in congress who crafted legislation that holds a promise of safer, healthier and more economically productive native communities. but this work is not complete. words are one thing but actions are another. we call for these initiatives to be fully funded and fully implemented. we're encouraged by the recent settlements of the cobell litigation over the mismanagement of indian lands and the settlement for discrimination against indian farmers. tribal leaders and tribes have supported these settlements because they have helped us turn the page of the wrongs of the past and direct our energies towards securing a better future. finally, we welcome the united

states' adoption of the united nations declaration on the rights of indigenous people. this formally affirms our fundamental human rights. it's a great step forward none of respect and recognition of indigenous peoples throughout the world. this very morning, the u.n. special group on violence of women is investigating the challenges facing tribal justice system. together, these achievements set the stage for a new era in indian country. this is a moment of opportunity that we must look to the future to realize its promise. the resilience and spirit that carried our people to this day is what will carry us forward towards our next great moment. our cultures are resolute and diverse. we see every challenge is an opportunity. indian nations face great challenges and always have.

but we hold great unrealized potential. high unemployment rates, new to most americans but native people have felt it for decades. often, those unemployment rates are 4 to 5 times unemployment rate of the rest of the country as a whole. but at long last this new era represents a way forward. ..

that deter energy development on indian lands or stop the three affiliated charges, in north dakota. access to the considerable oil reserves where oil rigs form a rain outside tribal boundaries. they streamlined this process and allowed three affiliated tribes to axles the resources. we call congress to assert this asserted effort for indian energy resources across the nation. realizing potential of energy resources has immense travis -- travel communities and the united states as a whole. for energy independence and economic growth the focus must

turn from the indian country. last week secretary of energy offered a promising jump-start. promised $10 million in support for energy efficiency and renewable energy. to the element will mean long-term economic growth and in turn the united states will become stronger. that is an investment worth making. this is a good development and part of the solution to realizing our potential. it is not the entire answer. this and other issues continue to stand in the way of progress. sometimes it is bureaucracy and lack of access to financing in federal programs. we call for tribes to receive the same treatment under the law as state and local governments on tax and financial matters.

time for these barriers to be lifted. the situation is similar for electronic communication which is the background of the new information economy. across the nation, broadband communication is 60%. broadband is progress and we need investment. we need an end to barriers that stand in a way of that investment and with energy the result would be growth, jobs and opportunity. power potential is already there. you see what investment can do. the confederated tribes of the warm springs reservation in oregon. using federal funds with grant and loan packages to expand

broadband. they reached one thousand square miles of reservation and connecting 2,000 people, 18 businesses and a tribal government plus schools, health-care facilities and police and fire department. it is one part of infrastructure needs. [applause] there has never been sufficient private investment to spur growth or fund adequate services. there is investment in our youth. we seek investments in after-school programs, quality education and job-training programs. we have many bright students but many of our indian schools lack

the curriculum or proper schools better enable them to compete for scholarships and other opportunities. a republican and democratic partners in congress and the administration share a vision for a more effective education system in america. we encourage them to start in indian country. our children have been waiting for generations and today is always a good day to start. [applause] thank you. thank you. these are some of the things congress can do to pursue self-reliance. there are other things to do that won't cost a penny. our largest assets, tribal lands remain fragmented, caught in a web of bureau of indian affairs regulations and bureaucracy. current trust policy is neither effective or appropriate. congress must modernize trust to

reflect the role of tribes and decisionmakers in management of our own way and. the supreme court's decision is threatening the ability of many tribes to restore their land and build economic development and jobs. this must be fixed. and that land consolidation fund, federal government has an opportunity to make foundation changes to the trust that would improve administration and further self-determination. we thank the administration and in particular secretary salazar for their leadership on these issues but work is not done. we share the passion for self-reliance and more efficient government brought by many members of congress. many instances, that is exactly what made communities and people. a government that respects our

constitutional sovereignty, a government whose leaders want to cut the red tape that blocks investment and prevents us from participating fully in economic life. this era must be characterized by equal treatment of our tribal nation with other governments. the same rules, the same opportunities for economic growth. the federal trust responsibility does not have a political affiliation. at this moment, this juncture, when a new era is rising it is critical for congress and the administration to honor the special status of tribal nations and our people and honor the solemn promises made in treaties, executive orders and congress. we urge congress to sustain investments in tribal nations by holding indian programs harmless and providing much-needed funding for infrastructure, law

enforcement, healthcare, job creation and education. for the strength of our nations and to achieve a more perfect union now is not the time to step back from investments in tribal communities that hold promise for the entire nation. the foundation is in place but much work lies ahead. tribal nations are united with our federal partners by the great ideals of democracy, e equality and freedom. there's something else that unites us too. this address would not be complete without acknowledging the service of 24,000 american indians who are s currently serving in the u.s. armed forces today. [applause] they proudly serve. in that alone the state of indian nations can be summed up in one word--proud.

as a veteran i am aware of this great commitment. just as hundreds of thousands of other indian people have stood for america as a citizen, have stood for america as a brother, i stand now as a warrior to defend the honor of our historic trust. [applause] since 2001, when our homeland was attacked, 77 of our people have died in iraq and afghanistan and over 400 of our people have been wounded. the bond between america and the indian nations is not in doubt. we remain united and in a new era we will build a more perfect union together. toss a stone into the water and it ripples.

the ripples can be felt far away. in the same way the decisions before us today will be felt in tribal life for seven generations and beyond. tribal governments understand that washington is entering more than a time of difficult budget choices. congress and the administration are complementing fundamental changes in the priorities of government. this is a challenge but indian people and indian nations have faced challenges for ever. our nation to nation relationship presents a unique responsibility and great opportunity. that is the gateway to a new era of opportunity and self-reliance. today we call on our federal partners to clear the way for us to expand economic opportunity through entrepreneur is them so that we might compete, clear the way to develop energy on our own

lands, build commerce and create jobs so we might contribute more to the economy of america. we can create more opportunity for energy independence in a larger recovery. clear the way for us to build public infrastructure for our communities so that our children might thrive and our culture and rich all of those around us. clear the way to build up our own communities. when you invest in america, when american interests in indian country will be astounded at the economic strength of america. time to harness that power and realize tremendous return on that investment. for the indian nations, partners and neighbors bound by the constitution. we are bound by the constitution and our shared commitment to liberty that includes economic

liberty. the nation's can do the work, clear the way to exercise our liberty and make a new era and more perfect union. as i said earlier, the state of indian nations is strong. god bless america and the indian nations as we prepare for this new era and make this promising journey together. [applause] thank you.

it is my honor to introduce the senior senator from alaska, senator lisa burke county. she will deliver the congressional response and i want to say that she is a long travel community and the 2009 recipient of the congressional leadership award. she was critical to the passage of the indian health care improvement act and strong partner in the tribal law and order act. welcome a true champion and friend, sedna lisa murkowski. [applause] >> thank you and good morning.

i am humbled and honored to provide congressional response to your comments on the state of the indian nation address. jefferson keel introduced me but i stand before you this morning with special recognition. it was less than a week ago that i was adopted into the tribe. i remember the klan given a new name that i am honored to present to you, lady of the land. and as one who has been blessed to have been born and raised in my state to be welcomed into the tribe to be given the name of this honor is something for me

so i thought i would share with you this morning as you introduced me and my bio. it has been eight years since i have been here in the senate. i am exceptionally proud to represent my state. alaska has the greatest population of native people of any state in the union and i served on the indian affairs committee since my first day in the united states senate and hope to continue on that committee for many years to come. you certainly got it right in reflecting on the success of indian country in advancing the agenda, in the 2009/2010 session. it is important to note the seeds of these victories were planted many years before they harvested the success of our labors. it took a decade of hard work by

the national indian health board and the national steering committee to get the act to the president's desk. it took along time we were successful with that. it was introduced in 2008. and worked with him to advance that deal. that was signed last year. for a number of years the members of staff had been working very aggressively to explore various options for the lawsuit. that settlement was approved last year. we were successful in reauthorize thing and came together to honor the legacy as we reauthorize the native american language act.

even in the most partisan of senate environments that we see today it is fair to characterized the senate committee on indian affairs as one of the most productive committees in the entire senate and the secret to our success is that we work together. we work together. [applause] we work across those party lines all the time for the benefit of native people. this is not only a testament to the strong leaders who have guided the committee, people like ben nighthorse, john mccain, also a testament to the expertise and dedication, and teamwork of the individuals who have served on the staff of the indian affairs committee. it is gratifying to learn that the new leadership in the house

of representatives is paying attention to the needs of american indians and alaska natives. you have heard the house resources committee has reconstituted its subcommittee on american indian and alaskan native affairs and i am pleased that that subcommittee will be chaired by my friend and colleague don young of alaska. [applause] he has been an ardent supporter of the indian health care proven act and supporter of the hawaiian recognition bill. he is an individual who understands the economic development opportunities created by indian gaming, the important government contract in purposes afforded to american indian, native hawaiians under the program. congressman young will be a strong partner in years to come and i wish him great success in his new leadership role. while we have accomplished a great deal in these last several

years, there is so much work to be done. in spite of all of our successes native people continue to die from diabetes nearly two times more than other americans. deaths from vehicle crashes are two times higher. a native person is twice as likely as another american to be the victim of aggravated assault. our native people have led the nation in rates of unemployment and lagging behind in measures of family income. 15% live in overcrowded homes. 14% have no access to electricity. 12% live in homes without plumbing. even as the president promiseds to bring broadband internet to every corner of the nation in the next five years it is noteworthy to recognize that nearly one 1/3 of native homes have no access to telephone service available today.

if you don't have telephone service how will we connect you? we have so much work to do and we will work hard to get it done. we will be undertaking this work in a period of great financial stress for our nation. on tuesday at the state of the union address the president spoke of freezing total federal spending for the next five years. my colleagues are talking about even more stringent caps, no more than we did in 2008 court 2006. a key question then is how will this affect funding levels for federal indian programs? understand this is a cause of great anxiety throughout indian country. indian programs remain among the most underfunded programs in the entire federal government. in spite of the administration's efforts to improve funding for indian health service the funding gaps we recognize are

quite significant. the same can be set for nearly every other federal indian program. in an era where the federal spending highest-ranking competition for a slice of the pie will be fierce but our resolve to fight for funding levels must remain high. we cannot be deterred in our fight to achieve the funding levels that our native people deserve. funding levels that are proportionate to the challenges that we face in indian country. funding levels that are not classified as inflation. relatively speaking, funding for federal indian programs is small in the overall scheme of the federal budget but in times of deficit as we are seeing now extraordinarily high deficit, congress fights the hardest over which of these items -- and you need to fight hard to keep what you have and harder to get what you need.

so here is a thought on how we might get there. jefferson keel touched on this. i ask you to think back to the spring and summer of 2009. there was a common theme among many of the campaigns of those who challenged incumbent members of the house and senate and that theme was the federal government should only spend where the constitution provides with clear authority to do so and only on those things that the framers intended to the federal responsibilities. several of the new senators in many of the new republican members of the house of representatives ran on this specific platform. every student of federal indian policy knows the well-being of america's native people is a uniquely federal responsibility. a federal responsibility and only a federal responsibility. not a state responsibility. the federal indian programs that

we fight hardest to fund were created to fulfil their responsibility between it nation and first people. authority to fund these programs should rise from three distinct provisions of the constitution. the indian commerce clause, treaty clause and her property clause. this is not nice to have spending. this is must have spending, to fulfill the trust responsibility founded within the constitution. [applause] so my suggestion to you as you visit the offices of my colleagues i invite you, keep your copy of the constitution with you. bookmark the provisions i have discussed. that would be helpful as you point out that obligation.

i want to mention some personal priorities for the 112th congress. as we came together to fight the high rates of diabetes that play our native communities we must come together now to attack the high rate of suicide that plagues american indians and alaska natives. indian youths have the highest rate of suicide among all and citigroup set in the united states. overall in alaska we have the second-highest rated suicide in the united states, twice the national average. on the north slope and western alaska the suicide rate is five times the national average. we are not alone. the alaska indian health service region has suffered higher rates than other indian health services region, the aberdeen and tucson region are not far

behind. each lost native life is a tragedy and we must do all we can to prevent every incident of suicide. we will not be alone in our quest to bring these unacceptable rates of suicide under control. on february 28th and the aspen institute will announce the launch of its new center for native american youth under the leadership of our friend senator byron dorgan. this program is the centerpiece of his legacy to the well-being of our native people. the center is committed to improving the overall health and safety and well-being of native youths and notably the prevention of youth suicide. i look forward to working with senator dorgan identifying those strategies that made a difference in preventing suicide and formulating new strategies towards this end.

[applause] he also mentioned significance of energy and as we watched with growing concern the energy prices rising again it is important to focus on the relationship between energy cost and the economic sustainability of our native communities. indian land contains an estimated 10% of energy resources in the united states and yet energy resources on native lands are vastly undeveloped. i am one who believes america needs and all of the above energy approach. oil, gas, renewables and all of the above means that we must include indian country in our national energy policy. we must support our native people in their efforts to develop energy resources on native land. whether for use in native

communities or to generate income to support our tribal governments and tribal enterprises and i hope we will all work together to make this a reality. finally we need to continue our efforts to ensure american indians, alaska natives and hawaiians continue to have access to the government contract program. [applause] this recognizes the significance of this program. it has been a significant economic engine for alaska native corporations, late of hawaiian entities and a growing number of tribes that are taking advantage of it. it will be an increasingly important economic opportunity for tribes in years to come providing congress doesn't pull the ladder up. we will need to be working together again to ensure the effectiveness of this. i would like to draw my comments

to a close by expressing my appreciation for all that it does every day for the betterment of our native people. in c a i is a powerful voice on capitol hill for the interests of our native people. it is involved in so many different ways. you don't want to start down the list of all the things you do because then you leave something out but i want to take just a quick moment to highlight one of the programs that i have come to learn all little more about in these recent months and that is native to vote. is a non-partisan effort to encourage native people to take control of their destiny by registering to vote and turning out each november. native vote does not endorse particular candidates but does provide a strong incentive for candidates at every level to

take the concerns of their native constituents seriously. if you ever wonder about the success of a program, ever wonder whether it works, look no further than alaska and the lisa murkowski wright in campaign. [applause] i will tell each of you that my success in running this right in campaign would not have been possible. would not have been possible if alaska's native people did not turn out at the polls, did not energized, did not come together as they did and i appreciate the trust they put in me. i appreciate the support and love i have received from all native people as i have

advocated on your behalf. i pledge to keep the interests of native people in the forefront of my mind as i continue my work in the senate over the next six years. i look forward to working with each and every one of you in the coming years to improve the condition of america's people. thank you. good morning. [applause] ..

>> i hope will be announcing that he will be the new chair of the senate indian affairs. and you for joining us this morning. i appreciate that. at this time we are now open for questions from the press, if there's any questions. yes? wait for the mic a phone and state who you are with. >> for president, in regard to each branch of government, judicial legislative and executive, is there a very simple but necessary list for each one that you would like to have in terms of cooperation? something that you would like to be looking for in the next coming year?

>> well, i think in terms of the u.s. congress, indian issues are not partisan issues. we look forward to working with the new incoming congressional leaders, those who have been recently elected that are just now joining congress. we look visiting with you in sitting down and getting you not necessarily an education package, but talking to you about the importance of indian country, what our issues and concerns are, what our priorities are, and how we can work together to make sure that we can continue to advance the interests of indian country. you know, as far as having a list of those items, everything in indian country is a priority. all of our programs from health care, housing, education, all of those things, economic growth and opportunity, those provide for the betterment and elevating the overall quality of life of

our citizens. >> in addition to that i would say our board met yesterday, and they did put together some the things we know this country will be contemplating and we want to be able to be part of that agenda. so when we talk about competition, of course we're doing with education and those kinds of programs that will help our workforce develop. you heard over and over this morning about the opportunity that we can bring into the energy arena, energy environment. but on top of that we also need the basic economic development tools, the ability to deal with tax incentives, tax expense, bonds, thinks that will be able to help our communities. we are looking forward to the education reauthorization. we believe we have a lot to offer to that arena also. of the questions from the press?

>> thank you for broadcasting on our station. my question is to president keel. the obama administration is relying more on the bipartisan fiscal commission. has ncai reached out to the commission and can you tell us all a bit about that relationship, if you do have one? >> we've not reached out directly to the commission yet. we intend to. as jackie mentioned, our board has met and we have developed some priorities and a list of action items that we want to present to them. and we want to explore ways that we can be involved. we expect to be at the table in these future negotiations. one of the things that we have asked for, even in the presidential summit in december, the president agreed with the

tribal leaders that the office of management and budget would develop a consultation arrangement with tribal leaders and tribal governments across the country. that's something that has been missing and been needing for a long time. tribal governments, as you've heard, offer tremendous potential in terms of advancing the economic growth of this country. and we want to be part of that. and we look forward to working with them, members of the commission at times as soon as we can get with them and sit and discuss what we feel is the best way for tribal leaders to be involved in that discussion. thank you. >> she's already got the mic. >> good morning and thank you for the time. i'm with the alaska public radio network.

as native tribes and corporations approach congress and approach the white house, do they need to take different tactics? should there be a division between what corporations are looking for versus tribes to make sure that the tribal voice is heard? in alaska the voice is often very expressive and heard very loudly. >> thank you for the question. the tribal organizations around the country are represented by tribal leaders. what we have worked very hard in the past several years is to refine our message into one united message to congress. as we walk the halls of congress and we visit with different congressmen, we wonder make sure that our voice is not only united but consistent. we want to make sure that our voice is strong in that our communities are represented by different interests in many ways. and the bipartisan support that we get in terms of indian

programs and services, they can't be fragmented so we have to be consistent and strong. corporations, the alaska native corporations, i know that jackie and many others can talk about that much better than i am, that i can because i'm not part of that. but they do represent tribal interests, because they represent indian people in native people. so we worked together with him to make sure that our voice is strong but our message is united and refined, to the point where we have a consistent united message to congress on how we can develop our resources and manage our own affairs. >> thank you all very much. the opportunities for the energy department has identified hundreds of billions of dollars

of energy could be generated on sovereign indian lands. one of those requirements is going to have clean, green, smart grid. if we had that out there it's like they're proposing long transportation, that that will open up hundreds of billions of dollars towards the opportunity of casinos and add to our ability to rise as indian nations. what are we doing in that arena to be able to make sure that the federal government, in which case we commit a whole whole lot of energy needs. 57 tribes have all been doing traditional, and we add to that the new green, we will have hundreds of new tribes with david lester and counsel energy resource tribes. >> let me just, i will speak to that very briefly and may ask jackie to step in because she has been working on a policy, energy policy for any country. but we just mentioned was

exactly our problem in developing the grid. the grid is out there. but tribes have been, have not been able to access. can't get on the grid. so the help that we need is to allow congress to allow us to get access to the grid. we have tribal nations around the country come across the country that have tribal utility authorities. they've already developed those. the chickasaw tribal utility authority is one example of that. doing great work. managing and contributing greatly to our own economy, but without access to the great it's very difficult for us to compete, particularly with larger corporations. so i'm going to ask jackie to maybe say something on our policy on that. >> thank you. yes, in addition to access to the grid to build the capacity, which also is an important

component, we have been working for the last several years with many folks across the country and put together what was the proposed bill that senator gordon was leading. of course, that bill got introduced but didn't receive a market. but within that bill we had a variety of options, those that deal with tax and says and economic tools. those do with capacity building, with energy resources and alternative energy resources. glad to share that and, of course, we're looking forward to sharing it with congress this session and try to get some of those pieces enacted. >> hi. jefferson. president keel, speaking of challenging budgetary times, the house study committee has put out a list of programs and projects that they would like to eliminate or cut back in order to help the indian deficit. one of the ideas that is elimination of the bia incident

money druker to the tribes. what you think of that idea? [laughter] >> well, assistant secretary tackle hockey or? [laughter] >> let me just say this, tribes have four years, for decades, we've had difficult relationships with the bureau of indian affairs, not that the bureau of indian affairs is bad, inherently bad, but the regulations and bureaucratic challenges that tribes have faced. there are tribes across the country that are self-governing tribes. they have proven that they can govern their own affairs. they can manage their own affairs. so for them we ask that their self-governance policy be expanded to allow tribes to

govern themselves, to develop not only contracts with the federal government, but to be able to develop their own programs and services, to provide assistance. tribes have proven that they can do more with less money than the federal government. primarily because of the type of organizations that we have. we are not talking about a lot of federal bureaucratic employees, not that that's bad. but if we're talking about shrinking the size of governme government, then, you know, we are talking about allowing the tribes to truly govern their own affairs. and so we think that's a good. now, doing away with the bureau of indian affairs, i won't even go there. thank you. anyone else?

>> mr. president, we have -- just want to get welcome all of our web watchers right now. we have over 500 people watching on the web, and we are two questions that come from there, president, that i would like to ask you. one is, how is in cai helping to implement the tribal law? >> that's a great question. the tribal law modernizes and improves our jurisdictional authorities within indian country. one of the first things that we did once that law was enacted and signed into law by the president was to coordinate a meeting between the folks from the justice department and the bureau of indian affairs and the interior department, to talk about what the challenges are and how do we bring those, bring those programs together.

it's very difficult. it's going to be very expensive for tribal governments because many of the tribal courts didn't have access to the type of jurisdictional things that they needed. so we are working to bring those people together to talk about how we can improve, not only coordination, but collaboration and partnering to get these things implemented. it's going to take some time and tremendous work, but we are working towards that. the other question was? >> the other question was, what's the most important outcome that came out of the last presidents tribal nations summit? >> i think the most significant thing that i can recall is that the president agreed that with the tribal leaders, when the tribal leaders asked him to include consultation with the office of management and budget,

that he agreed that he would make that happen, that the office of management and budget is, in fact, the federal department. they are subject to the president, and they do have significant impact on tribal programs and services, and that they would be included in the consultation arrangements. let me say something about consultation while i'm on that subject. consultation, consultation is supposed to happen before a decision is made. historically, decisions have been made, announcements are made and then hits the fan, announce and defend. tribal leaders have never been at the table prior to an important decision being made or announced by the federal government. so the true -- in the true

spirit of consultation, tribal leaders need to be at the table when these important programs and decisions are being formulated. before they are made. they need to be part of the process. and so i think that was a significant point that was made by the president at the last tribal nations. thank you. >> is there any other questions from the press? up there, yes. >> native american political leadership program. the question i have is, a professor bracelet wrote an article suggesting that the new congress, or congress, is moving away towards self rules for tribes due to, you know, the fact that tribes in a sense are advancing and they are kind of reining in. why is that?

>> i'm going to punt. [laughter] spirit i'm going to ask for some help. >> we do see that and i say not only in congress but also in the courts. which is very significant to us. i think several years suggests -- justice breyer candor executive council winter session, and at that time we were losing in the supreme court, cases right and left. the country was concerned about how do we protect our sovereignty. what he said to us was that there is a lot of gray matter, because there's so many unique tribes as only differences between alaska and oklahoma and california, that we have to have all these very fluid kind of regulations and fluid kind of program development. and actually, a little fluidity in our laws. and so he told us at that point, tribal leaders, and said it will be a challenge. there'll be a day that you need to start working with congress

to clean up the gray matter. i remember him using the word gray matter as important i see that and that's what's happening with congress right now. there are tribes who really have up our capacity capacity and our self-determination, and have taken on the role that the federal government has and then doing it in our own communities. and that's the time when i think that congress wants to try to define what that is. we have become a competitor in our own communities, a competitor sometimes with other governmental services but it really is about self empowerment. and sometimes, you know, sometimes there's a control issue. so thank you. >> i really appreciate that question because we did, you know, something i said earlier. we have some bright students here. thank you for exhibiting that and reinforcing what i said earlier about our students. thank you. we have one last -- okay.

>> at this time we're cutting off from our web service i just want to thank those who are across the nation listening by radio. bank data one, thank those who are on the web line. we will continue to take questions after this is over. thank you once again for joining us for the 2011 state of indian nations. [applause] >> but no question 9/11 redefined the presidency because it made it abundantly clear that my most important job was to protect the country. and i took, i made a lot of controversial decisions to do that, many of which i describe in the book. the truth of the matter is if i had to do over get i would've done them again. >> former president george w. bush talks about his best selling memoir, decision points, with students from southern methodist university sunday at eight on c-span q&a.

>> you don't mention scott mcclellan. he was your longest serving press secretary. i don't know if that is true. he went out and wrote a book that was somewhat critical. >> he was not a part of the major decision. this is a book about decisions. this isn't a book about personalities or gossip or settling scores. and i didn't think it was relevant. >> see the entire interview sunday night at eight eastern and pacific on c-span q&a.

>> the senate armed services committee held a hearing today investigating how boeing and another contractor received sensitive information about each other from air force clerical error. both companies are competing for a $50 billion contract t >> we place the air force's aging refueling tankers. a contract announcement could come as early as next month. this lasts about an hour and 40 minutes. >> good morning, everybody. the committee meets today to address the inadvertent release of proprietary data in the process of kc-x tanker

procurement. we recognize that the air force is currently conducting a source selection in this procurement, and we need to avoid any action or comment or question or answer that might compromise the source selection. for that reason, this hearing will focus on first the nature of the information released by the air force. second, the steps that the air force took to determine what happened, and to determine if there was any damage to the fairness and integrity of the source selection process. and third, any remedial actions taken by the air force. i would ask both senators and witnesses to avoid any lines of inquiry that could compromise the source selection process. the issue that needs to be addressed is whether what was apparently a clerical mistake where the air force released proprietary or source selection

sensitive data to the competitors during the ongoing third tanker procurement process has damaged that process. my understanding of the current situation is as follows. boeing and the european aeronautics defense and space company, known as deeds, are competing for the contract of first the next generation strategically refueling contract, called the kc-x, for the air force. as part of this competition, the air force is evaluating the capability of the competitors aircraft in a model referred to as the integrated fleet aerial refueling assessment, or ifara. in this analysis, the air force is evaluating potential kc-x

aircraft using several postulated real-world scenarios. in deriving a ifara score, the air force uses the model to compare candidate aircraft with the current tanker, the kc 135-r. as part of the official discussions within the current competition, the air force intended to share with each contractor the air force ifara assessment. on that contractors aircraft to ensure that there were no substantive disagreements on the calculations on the score. in november of 2010, personnel working for the air force program office inadvertently sent a ifara datafiles for the boeing offer and the eads offer to both contractors.

after the error was identified, the department of defense and the air force investigated the incident and determined that some ifara data had been viewed by one of the two contractors. the air force been determined that comparable data should be released to the other contractor in an effort to ensure that the competition could continue on a level playing field, and it was released. now joining us today are major general masiello, program executive officer for combat and mission support, office of the assistant secretary of the air force for acquisition. and mr. stephen shirley, executive director for the department of defense, cybercrime center. these witnesses have been selected because they have a

detailed knowledge of issues regarding the specific subject matter of this hearing. i want to extend a welcome to our witnesses. thank you both for appearing before this committee this morning. and i know it took some doing to get here, given us no circumstances. over the last month, a staff has met on two occasions with the department of defense officials, familiar with the release of information and the air force investigation. also, i made an offer to the chief executive office -- officer of each of the companies to accept written statements to the committee addressing these issues, should they choose to do so. and we have received a submission from each of the companies, and without objection, we will make those two submissions part of the record at this time. we appreciate both companies

positive approach to this committee inquiry, and both of the companies cooperation with us. senator mccain. >> thank you, mr. chairman. i thank the witnesses for their attendance and being here this morning. one of the primary duties of this committee is to engage in oversight of department of defense spending and programs. and while i am unfailing in my support for aggressive oversight by this committee over major defense acquisition programs, and i acknowledge that it is the right and responsibility of the chairman to schedule hearings as he deems fit and appropriate to ensure that the committee exercise its oversight responsibilities effectively. i approach today's hearing with a fair bit of concern, and even a greater amount of skepticism that this hearing will be beneficial to our job of oversight. unfortunately, this hearing appears to be designed to produce little new information about the pending a ward of the air force's kc-x tanker

competition. as we all know the competition for the air force's new aerial refueling tanker has been beset by problems and acquisition irregularities four years. after considerable effort to ensure the current competition process is as error free and as clean as possible in november, the air force inadvertently and incredibly sent data related to the competition, to each of the respective bidders that they should not have had. a natural outcome of this mistake is to ask, quote, what difference, if any, did this mistake make to the competition? while i think the urge to dive into that question is understandable, it's a long drawnout process is nearing its end and the final announcement of the air force's decision will be made soon. to the extent that november's mistake could be argued to have an impact on the outcome, that seems to be -- needs to be an

issue more appropriately addressed after the competition has run its course and a winner has been announced, not just weeks before the process draws to a conclusion. while this committee should continue to exercise aggressive oversight in the tanker award processes, the witnesses here today have little ability to shed real light on the facts that eventually need to be examined on this matter. indeed, take a probe and has been delayed for more than a decade and is expected to be worth approximately $30 billion. with that much at stake, hearings on this topic should be designed to allow the air force to speed the delivery of the tanker that it so badly needs in the most efficient, cost effective manner possible. everyone wants to ensure that this competition is fair and above board, and that no party games and unwarranted advantage. we know corrective actions were taken, an effort was made to a set -- assess damage and set things right, opinions were formed about what the impact was and whether it could become

overcome. with these fundamental questions in mind, and in an attempt to exercise restraint as we involve ourselves in this issue, i look forward to the testimony of the witnesses. i also note that the chairman intends to release today documents that we received for this hearing, that they be publicly released. i think this is a bad idea. i think we could wait until just a few weeks from now when the final decision is made, and then make all of these documents public. and i understand the department of defense quote, doesn't object to the committee's release of these documents. given all of the controversy, all of the legal challenges, all of the delays that are over a decade, why would we want to just wait a few weeks before we would release that information which could cause further disruption to the competition? so, mr. chairman, it is your

right as chairman to release those documents. i don't think that it does any good at this time, and could be disrupted. and i say that as a person who has been very much an advocate of total transparency and knowledge of, not only shared by members of congress, but by the american people. so i thank the witnesses for being here today. i hope that in february we can finally have a final resolution and selection of a tanker that is badly needed by the united states air force, after nearly a decade of stories of corruption, abuse, mismanagement, and now this latest fiasco of releasing the documents -- relevant documents to the contractors. still, an incredible happenstance in this long odyssey and saget of mismanagement, and in some cases corruption surrounding the

awarding of the contract of this tanker. i thank you, mr. chairman. >> thank you very much, senator mccain. general masiello. >> mr. chairman, senator mccain and members of the committee, thank you for the opportunity to discuss the events surrounding an inadvertent disclosure of information related to the kc-x program. i should make it clear at the outset that neither i nor my fellow witness, mr. shirley, are affiliated with the kc-x source selection and thus we cannot address nor speculate on matters beyond the scope of today's hearing. as the senior air force military officer with contracting experience, as well as experience in numerous source selection's i been asked to review the redacted record of the incident and the extent of the air force's response so that i could appear today to address the process that was followed and have the air force's actions maintain the integrity of the source selection process. i know that committee members are aware that the air force is in the midst of the source

selection, and will appreciate that my testimony today will be limited to the specifics of this event and my analysis of the actions taken. the air force has been and remains committed to a fair, open and transparent kc-x source selection. i understand the department has provided all committee requested document, properly redacted a proprietary source selection and sensitive information. these are the summary statement by the procuring contracting officer and ahead of air force contract activity regarding the procurement integrity act. the osd independent review team report statements from both companies, including signed ceo certification letters, and the summary statement of the classified defense computer forensic report. before responding to your questions, let me provide this summary of where the air force believes the record stands today. first, the air force determine that the error was unintentional and that the actions of the individuals of the government

and the offerors did not constitute a violation of the procurement integrity act. second, through the statements offered by the employees who handled the disc from both companies certified in writing by both company ceos and other things which i will address in a moment, the air force believes the information exposed to one offers employee was limited to one screen, summary data related to the governments integrated fleet aerial refueling assessment known as ifara day that none of the information on that page was proprietary, and has been previously stated publicly, there was no pricing data anywhere on the disc. the summary page and excel spreadsheet was open on the screen for a matter of seconds before it was closed when the company employee realizes the mistake. both companies upon realizing the error immediately secured the disc and contact the program office. a program office immediately

directed and received all of the disks the next day. the company employee who do the single screen shot was reassigned to an administrative position and did not rejoin the company's proposal preparation team until after the leveling of the playing field, which i will address momentarily. third, at the direction of the source selection authority ever drink contracting officer, and anything a review was conducted by personnel from the osd independent review team as to the facts and circumstances regarding the incident. the review team also made recommendations to help prevent future occurrences. forth, as a further level of verification, the air force requested and both companies cooperated by providing the computers that their competitors disks were inserted into. using the defense computer forensics laboratory, the air force was able to verify that the record of the disks and files accessed was consistent with the statements provided by both companies and certified by their ceos.

fifth, following the investigation, in order to ensure a level playing field both offerors were presented with the same screenshot of each other's information. further, since the air force was still at a stage where authors could continue to update their proposals, the procuring contracting officer made it clear that such updates could continue. consistent with the air force's efforts to maintain transparency, bob offerors received opportunity to review the forensic analysis of their respective computers. sixth, i informed the program office -- by the program office the ifara scores shared with both offerors for entrance court and were not the final scores that would be used in the evaluation. further, old offerors will have the opportunity to provide a final proposal revision as is standard. no offer was impaired from continuing to improve his proposal.

seventh, that the two individuals directly responsible for the packaging and mailing of the information to the companies were not only removed from the program, but no longer perform any duties on programs associated. two other individuals involved were counseled. eighth, all recommendations from the independent review team, to prevent returns, had been redacted. transmittal of any classified return to a contract with the accompanied by a letter, not just an air force form 310 signed by an appropriate official. descriptions of the material being transferred must match both the transmittal let and the form three tended to transmit live and the air force form three didn't must both be reviewed by the signatory of the transmittal letter and an appropriate security official. classified material to be transmitted must be delivered to the security office in a

separate clearly marked package to identify the recipient of the material for each package. incher individuals with knowledge of both the content of the material and the purpose of the transfer be involved with the preparation and packaging of the information and personally execute the transfer. additional measures were taken to include supervising supervision oversight, and two-person rules that involve senior program and contracting officer position to personally verify and validate contents of packages against transmittal letters. and, finally, while the department regrets that the incident occurred, department leadership is satisfied that both companies responded to the incident directly and professionally. after reviewing the same documents presented to the committee, it is my opinion that the actions taken by the program office have ensured a level playing field. i'd like to thank the committee for your continued support of our men and women in uniform as we await the outcome of the source selection. >> general, thank you so much.

mr. shirley. >> good morning, senator. i have no opening statement, but i am present as a technical representative to answer questions about the forensic process if required. >> thank you. thank you both very much for being here, and again for your service. let's try an eight minute first round. general, let me ask you this question first. can you tell us specifically what data from each contractor has been shared with the other contractor as a result of the incident? you talked about a screenshot, for instance. be much more precise as to what has -- what was seen at what was then shared. >> senator, from my observation, my reading the documents that are presented here, it was a screenshot of ifara data which was about a spreadsheet that appeared to have 10 lines of

information, and that screenshot of -- and it was the ifara data analysis, the air force's analysis of their individual data, and that's all i know about whether condit or the details are. >> it was one page? >> one page. >> what is a screenshot? is that a page? >> yes, sir. when it pops up on your computer and it has a spreadsheet of the information, it's that instant page on the computer screen, and it's a picture of that taken. so there's nothing that deals, drills down below that screenshot. >> one image? >> one image. >> on the screen for you -- you determine how long? >> however long it presented, but the fact is a copy of that for each offerors was swapped. >> that one page, that one page alone? >> correct. >> have you determined how long that screen was open?

>> sir, based on the forensic of the meeting provided by the company, we think it was on the order of -- that was viewed on the order of several minutes. now, that's based on statements from the company. but the computer was powered for a longer period. >> where was the 152nd figure, where did that come from? >> sir, that was the person's estimate of how much time they viewed it, that they then prepared and signed a statement certifying to that, which was subsequently certified by the ceo of their company, validating that. >> you submitted those documents that you outlined to us. and we have received assurance from the department that there is no objection to the committee's decision to do so, if we determined that it is

appropriate to do so. >> that's my understanding. >> is there objection to those documents being made part of the record and being released? >> not that i'm aware of. >> hearing none, that is the action of the committee will take. now, you indicated that that information was nonproprietary information, is that correct? >> yes, sir,. >> would've the availability of that information to one of the competitors, but not the other, be advantageous? and if so, is that the reason why you decided to attempt to level the playing field by swapping the information so that both companies would have that same spreadsheet of the other company? or excuse me, of the assessment of the other company.

>> yes, sir, i can't tell you what it was that important or not, because i don't know. i'm not privy to the kc-x specifics. but whether it was or it wasn't, there was a minimum, a perception. so the government chose to provide copies to both companies. >> and it was -- how long did it take after the sheet was seen by, i presume, it's the eads employee that we are talking about. how long was it after that mistake was noticed by that employee that eads, did they close it out and get it back to the government? >> what i read was that he -- date immediately stopped looking at it, and because they were not in a secure environment need to

go to find someone to partner with them to close at alltel. it was immediately they wasted no time shutting it down and securing the documentation and the disks i in the file that was signed by security reviewers as well. >> and the other company, boeing, also caught the mistake. and how long did it take them to close up that, was it a disk? >> it was instantaneous as what i read about an anti-eads testimony as well. >> and those documents that you refer to do that contain that chronology and that certification, and there were four of them that you made reference to in your opening statement that are now part of the record, and people can look at that chronology and determine how many minutes and how many seconds it was after the mistake was noticed that each company locked up the cds, or the disks, excuse me, and then got

them back to the government, is that correct? >> yes. >> that information is in those documents now made available to the public? >> yes, it is. >> do a forensic expert, mr. shirley, -- you're a forensic expert, mr. shirley, and you have told his -- well, how confident are you, let me ask you this question, that your conclusion or the department's conclusion as to what data was viewed and for how long? is that a high level of confidence? >> yes, sir, senator. if i might describe a little bit about the process. dod cyber crime center has as part of its defense computer forensics lab, it's manned with about 110 people today.

and operates as an accredited lab, certified by external entity, in this case the american society for crime -- for crime lab directors and lab accreditation board. so what that process does is validate that we have a reliable, valid repeatable process that we have people who are certified and professionally qualified to perform their duties in question. and they are subject to periodic review and testing in that regard as a condition of the lab retaining its accreditation. when we received this data we essentially treated in the same manner as we would treat an inadvertent disclosure of classified information in a sensitive program. so we assigned as a forensic examiner one of our most capable subject matter experts, and he is really a forensic expert that

processes data. he has been qualified in court about 13 times. and so we have a very high level of confidence that the representations asserted by each company -- well, let me say this way. the forensic findings validated the representations by each company. >> and very specifically, the reputations, in the case of boeing, they saw the mistake and did not open the page or read a page. and in the case of the eads, the representation was, the same page was inadvertently opened. the person who saw it, saw that one page, you indicated this morning apparently because of personal conversations with that person, that it may have been a matter of minutes. that according to the documents which are now part of the record, that was for 15 seconds. in either event you have concluded it was a matter of

some minute. >> yes, sir, very short period of time. >> and then that person immediately closed that page and got that material back to the air force, is that correct? >> that's correct, sir. >> and you're confident that the facts are that that was the only page which was opened up by that person? >> yes, sir,. >> based on your forensic capabilities? >> that's correct. >> thanthank you very much. senator inhofe. >> thank you, mr. chairman. i will not need my full eight minister kahn chance to talk to both witnesses beforehand. on the ifr, how significant is it, and i think maybe for the record if we could determine, in your position are you able to say what percentage of the did or the weight of the bid with

this represent? >> sir, i have no insight to what percentage the ifara data represents for the whole kc-x decision process. >> now, the final did i think is in the next few weeks, coming up. in your opinion, from what you do know, would this impact the final bid? >> sir, i don't have a sense for how much it does, or if it does affect the final bid. all i know is that the contractors have the opportunity to adjust their proposals anyway they see fit -- they see fit over the next remaining pig, whatever that might be before the final proposal revisions. >> it however important or unimportant it is, i don't know and you're not in a position to know, as any thought been given to eliminate this ifr element in

the final bid process? >> sir, i couldn't confirm whether or not that would be the case. that would probably be something that a pc i would probably consider when they made the decision, whether or not, or how to address the inadvertent release. >> well, i think as a member of this committee i would like to get from the person who would be in a position, if it's appropriate, as to whether or not this should -- it bothers me that when something is disclose like this, and i don't know how significant it is relative to the whole bid, i feel that we should know. and so i would like to ask you just for the record is, if you determine after talking to the appropriate people as to how significant it is, maybe try to get an answer to the question i just asked. would that be all right? >> yes, sir. >> thank you. i don't have anything else, mr. chairman. >> thank you very much, senator inhofe. senator mccaskill. >> let me just a first for the record that this is a case study

of incompetence at contract competition, this whole debacle from beginning to this very moment. and contract competition for something like this has to be a core competency. and so i want to know in this instance what punitive actions have been taken. we can call it an accident, but it's incompetent. so what punitive actions have been taken against the person who made the mistake? >> ma'am, from what i read in the documents, the two people who were involved in making the mistake are no longer employed at aeronautical systems in our office. >> so they were fired? >> well, from the program and they have been moved to another -- >> where have they been moved? >> i don't know. >> i would like to know that. i would like to know where they are. i would like to know if there still making the same amount of money and i would like to know if they're going to resurface

later in another position of responsibility. there is -- sometimes, i mean, i have complemented secretary gates because he has provided accountability at the top level in many instances where we have had problems. but i just think this is beyond the pale. there are so may things about this that are unusual. let me start with this. if you can state for the record, and if you can't i would like this answer from someone else within the military. it is very, isn't it correct that it is very unusual for going to file a protest after a competition? >> ma'am, i couldn't answer that. i've had different experiences. well, i would like -- that's a question i would like for the record, that i would like to know from the defense department's perspective whether or not it is unusual for boeing to file a complaint. and whether or not it is unusual that all nine bases on which they filed a complaint were also stained at the gao.

and i'm confused about the screen. eads said originally that they didn't look at the data, isn't that correct? >> no, ma'am. they did not say that. >> they said they looked at for a very brief period of time? >> a look at a screenshot of the spreadsheet. they admitted to that. that's what made them nervous. they realized they shouldn't be looking at that. >> i'm confused though. it appears to me from looking at the information that they originally said they looked at it for a very sharp at a time and effort in six indicated that that may not be true. is that correct, mr. sharon? >> senator, what we were able to determine is that the file was opened for a very shortly -- a fairly short period of time. the computer was powered a bit longer, and so in essence a statement by the employed we thought was consistent with what we saw in the digital media.

>> why is it relevant the computer is on longer? can you pan down with a forensics how long -- why do you even mention the computer was powered longer? >> it goes towards just a -- when we perform an exam, and we look the media, at a number of different levels. one of the things that is associated with the computer being in a powered state is there's a feature called clock time that tells you how long the computer is in operation and what files may be in a belated while it is in operation. so it was part of the context of trying to validate the employees statement against what we saw on the computer. >> so you are testifying today that you believe that the screen is only viewed for the same amount of time that eads represented it had been viewed?

>> roughly, yes, ma'am. >> i'm curious if you believe, and my sense is that these are not maybe direct witnesses to answer this question, to follow up on what senator inhofe said. given this controversy, should ifara be used and retain in a final evaluation process now? >> it's not for me to judge. the head of contracting activity determined that it was still appropriate to leave, and competition. >> we will compose another question for the record to get to those individuals, to get their rationale for that. and, finally, i know that once again these are probably not the right witnesses, but it's my understanding that he promised taken the position that the wto ruling are not relevant to their decision, and i would like to know where in ifara that is prohibited. if it's not a level playing

field to do subsidies by other countries, you know, common sense tells me from the midwest that if someone has their finger on the scale in terms of subsidies they get from their government, that it's not a level playing field. and i'm trying to get my arms around the notion that that is not relevant. and either of you can speak to that, that would be terrific. if not, we'll try to track down the right person to get the answer from because i don't believe there's anything in ifara that prohibits them from being considered. >> i will defer to the department on that, ma'am. >> i understand that limitations we have, mr. chairman, in terms of what we can ask since this is an ongoing process but some of these are writ large policies that i think the senate has to come to grips with. we've got a farm field in alabama and a company that is receiving tens upon billions of dollars in subsidies from foreign governments. and i'm not saying, you know,

this process began with bad acting on the part of the company that i think, you know, where i sit, is better equipped to handle this. but having said that, the notion that we're not going going to take into account in light of everything that is going on in this country, that we have got foreign nations are subsidizing companies, and that's not relevant to our competition. just doesn't make sense to me. and i would like us to get to that policy question in these hearings, if at all possible. thank you, mr. chairman. >> senator mccaskill, i think as you know the purpose of this hearing as set forth which is to see what happened here, specifically, and what was done to attempt to remedy it. the broader questions which you raise are appropriate in different forms for that could be argued, or at a different time. but these witnesses in all fairness to them are not called for that purpose.

>> and i certainly understand, and i don't mean to be critical of these witnesses because they are not prepared to handle these questions, but they are on my mind and i needed to express them step which is your right. thank you very much. senator sessions. >> thank you, mr. chairman. i would just like to say first that the air force did start off with this process in a very, very unfortunate way. people from both the boeing company and air force went to jail. senator mccain smelled a rat early on. this committee was the one committee that wasn't really consulted in hell that original contract was awarded. and senator mccain, supported by senator levin and senator john warner, challenged the situation and what we decided to do was have a competition.

it was the right decision to do. and it saved $7 billion. i remember declaring senator mccain to be the $7 billion man to save taxpayers $7 billion as a result of having a competition in this process, and fair objective competition is what we need and what we have committed to as a committee, as a congress. now on the eve of this final decision, we have got people with political interests and local interest trying to destabilize the process. now, i am just not happy about that. i wish it had not happened. i understand how important it is, because it would mean a lot for my state just like it would mean a lot for other states if it would go another way. but we have to be sure that we are not doing anything that says

that we expect the air force to do anything other than what we have directed them to do. .. storage chairman, thank you for your leadership. i really believe all in all, i know you have members on your side and others who want you to

do all this. i think you have conducted it in a fair way. i just would like to say producing these documents is a bad idea. just because they have been redacted to exclude intensive and proprietary information doesn't mean releasing them might not cause destruction to competition which is taking place right now and coming to its conclusion. so disrupting in any way politically the competition would reflect on our committee. understand the department of defense doesn't object to the least of the documents, that is relevant but still doesn't mean in exercising its discretion that they should release them before the contract is awarded. i do object to that. >> make that part of the record.

>> mr. chairman. general masiello, i asked general schwartz last fall, last year, about the document, and he responded that they reacted in a responsible manner and returned disks that were mistakenly forwarded to them to the airport and we have confirmed that by forensic evidence. so i would like to ask you to -- if you have any information that would indicate that either competitor has acted inappropriately when they received data that should not have been sent. >> by reading statements from both companies i was quite impressed by the responses on both companies's part when they realized they had a net they shouldn't have had.

i think they all acted appropriately and have certified that. >> you have examined for and thickly the disk and the information. have you been able to conclude that they respond appropriately? >> it is consistent with what they said in each case. >> general masiello, what action did you take once you realize this error had occurred? >> what she told, to get the disks to the airport, then they instituted the independent review team. and what went on, there for distribution process that they

could correct that immediately. they pulled in the defense service to examine computers and got the ceos to certify the details that came from each incident, it was very sorrow. >> do you think the process, result of this disclosure was injured in any way was fairness in the process damaged in any way? >> it was validated for contract inactivity, fairness and sharing the snapshot with the company, i would come to the conclusion it would not affect the selection process. >> they were told about this.

if either one of the companies felt they had been unfairly affected by what action they could impact? >> a company can protest at any point either pre award or post award. they have the opportunity, and appropriately manage. >> they lodge a formal complaint as a result of this event? >> it could be a part of a post award process should they choose to do that. >> have either one protested? >> not at this time. >> throughout this process and opportunity to protest and neither company has. >> that is correct. >> no formal complaint has been lost. >> that is correct. as far as i am aware. >> i suppose we have to conclude

that both companies at this inadvertent disclosure did not affect them to the degree they should have asked for. >> at this point i would. >> on november 30th a new york times article indicated, one of the firm's mistakenly opened a computer file containing information about its rival airplane where the other did not. the forensic report presented to

the committee yesterday's search that both companies expected their own and their competitors and opened them. tell me which statement is correct. the new york times reported the matter on the airport's spokesman forensic report by the cyber center. >> both disks, both companies put the other companies's disk in their computer. one of the companies realized what they saw on the disk right away was something they shouldn't look at. it opened one of the files on the disk, they describe the spreadsheet snapshots that would swap between the companies. both companies did put the disks in their computer based on what they did. one opened a single file. the data was in question. >> you agree with that?

you have explained the fact, we heard from the fact that nothing can disclose, it did not affect the competition and neither company -- a lot more we could talk about, is very important. it is important for every area in the country that has an impact for the contract but it is really important on this committee not to politicize every one of these issues. we made the decisions to go forward and the need of this competition to take any action, and to try to select the best

aircraft for the -- i think both of you for the efforts to get to the bottom of the era and establish conclusively there was no on fairness are rising from this. >> senator graham? >> a complete different take. this is something we should be talking about and quite frankly this is as senator mccaskill said, not the finest moment for the air force and i happen to be a member of it. bottom line the sheet of information we are talking about, the price proposal companies are making. >> the information that was presented was not for proprietary and included nothing. >> why do we care about this?

>> it is an element of the decision process as i understand it. information that was -- >> was it an important event in the whole process, the information that was disclosed and defeated by one company and not the other does it matter at all? >> it matters from a fairness perspective. the important thing -- >> do you know if it was important? he said he didn't know. >> i don't know. >> what is this whole hearing about? you can't tell us whether it was important or not and will hold process has a conclusion to it. we are about to spend $30 billion of taxpayer money here and quite frankly it was important and it is not your job to answer this question as to whether or not we want to award a contract to a company -- we

are setting precedent here. the committee should be looking at this. hard enough for american companies to compete already. the chinese line is 40% undervalued. if we ward public contract where one side gets it and the other doesn't, from a foreign government. that is not the purpose of this hearing but we need to have some discussion about that. the person that said they looked at it for 15 seconds -- how long was the computer on? >> roughly 20 minutes. >> how can use a a 15 seconds statement and 20 minute gap in the computer is roughly consistent? what i will do is let the senate recess for 20 minutes for versus 15 seconds and you will see

clearly there is a long gap in time between 15 seconds and 20 minutes. >> we judge that based on the statement. >> the computer was on for 20 minutes. the and a what was on screen for 20 minutes? >> i believe we do and you are right. we can't assert what that employee did or didn't do. >> i am no forensic expert but the difference between 15 seconds, and 20 minutes is lot. [talking over each other] >> how long a file is opened. >> if the witness could finish his answer. >> do you know what they looked at for 20 minutes? i am asking anybody who can answer the question. >> can i finish this? let me say it this way. our lab found no evidence in

conflict with either offer, written statement. the only files open -- >> i know your findings. i am asking a factual question. the computer was on for 20 minutes. the person said they looked at it for 15 seconds. the point i am trying to conclude is this whole idea that it doesn't matter, we can't really get to because you don't know. i am not complaining about the fact that you don't know. that is not your problem. that is my problem. >> if i could clarify the files were open. very matter concluded the files were open only for the time suggested by either offer. >> i just wonder how you got to that conclusion. >> judge from examination whether a file was open, when it was open and when it was closed. >> it was only open for 15 seconds? >> yes, sir. it was open a brief time.

>> can you say that this file was open for 15 seconds? >> i take that for the record and we will send you the precise times. >> if i could add something to this. while the individual look at this data that individual was moved off of the program team into the administrative holding tank and was not allowed to participate in the program until the pc o released -- >> i will submit a question for the record about why boeing could use landing sites. this is not -- you don't know anything about this but there are a bunch of problems how this contract has been changed. some people went to jail. they should have gone to jail. before we award the contract i want to make sure what we are doing doesn't set a precedent for the future. if this is the way we do contracts, where one company gets subsidies from a foreign

government and the others don't, we need to think about it. and the process of what information was shared and what outcome it had is president for the future. i am glad you had this hearing and i hope we will think more about what we are about to do, not less. >> just to clarify one point because we had three different statements it seems to me, mr shirley, from you. one, we know from the record that the person who opened up that file looked at it for about 15 seconds. when i talked earlier today, when i asked you the question you said you determine foreign the plea that it was open for a few minutes. a few minutes. now you are saying the computer was open. not necessarily the file but the

computer was open for about 20 minutes. do i have it straight? if not straighten that out right now. >> the computer was innate power state for 20 minutes. >> how long was the file open? >> the -- >> how long was that page visible? >> my recollection from the briefing from my examiner was roughly three minutes. >> i think it is important that we get our terms straight. >> that i add something to this as well? from what i read in the documentation the person who was responsible for opening the file and seeing it realized they should be looking at it and the procedures are when they see something they shouldn't, from what i am seeing is the two person rule comes into play. they saw it and couldn't use their phone to get the other person to help close it and follow the procedures so they went outside their classified area to use the phone to get

hold of this person to let him know that they had discovered something they were all going to get in trouble for and didn't want to get in trouble for so the screen might have been opened but he was the only person in the room. he locked the room and got to follow the procedures to close the data. >> that is the statement of the person who opened the file but in terms of how long the file was open, frantically three minutes. and >> the air force obviously is trying to make sure this is not a big deal. >> i am not trying to be big or small. obviously it raises some significant questions or we wouldn't be here. times i am not trying to attack, just straightened out facts. we had a statement here that seems to me we have to be very

clear on. the computer was powered for 20 minutes. the file was open for three minutes. the person who opened the file said they looked at it 15 seconds which is the statement the person gives. those are the times we are talking about. the significance, whether or not it is significant that eads had that information for some period of time or that the person -- what ever that information was that was seen by that person existed for some period of time before the two files were exchanged. significance or lack thereof seems to me an important issue which we will get to a little bit later. but for the time being that is the time. thank you, senator gramm.

>> i wanted to straighten that out. >> i thank you for straightening that out. it was very helpful and i appreciate the chair giving mr. surely an opportunity to answer the question. this is not a jury trial. we are able to leave the record open to get a full explanation. i see what is going on here. there are some people in this town who believe that the company that they favor may be about to lose a bid again as they did in 2008 and a foundation is being laid for protest. i have no idea who is going to

win the award. i regret the department of defense didn't go forward with that contract. we would be very close to having a tanker we could rely on. i see what is happening with this hearing and of course it is no wonder general masiello and mr. shirley can't answer these questions because they are not involved in the actual award. i thought this was going to be a hearing about how the information was inadvertently released and how that has been corrected. let me see if i can get to that procedure with regard to the computer being on for 20 minutes, the file being open for three minutes and the statement of the individual that viewed it for 15 seconds.

do i understand that the eads procedure is once an individual realizes he has opened a file that he must go and get a second person to come in and verify that before it can be closed. is that your statement? >> i am not sure what the procedures are. what i read is they have to have another person -- they instituted a two person ruled that together they closed the data, they sealed the data and took the disk and put it in a safe separate from any working documents, isolating it completely from the rest of the specific bid information. >> mr. shirley, is that consistent with the file being opened three minutes? >> part of what general masiello talked about, we were given to a understand at the lab that when

the employee opened the question they were very nervous about what had occurred, realized they should be looking at that particular piece of data and went through some sort of internal process to say how should we walk back from this and essentially find another witness or a second party to instruct them. what do we do next? we are into something that is awkward and so low that was why the computer we were given to understand was left on while they figured out that internal process and as they did they shut the computer down and went through the process that general masiello just described. >> the air force after looking at this and after understand and what happened decided to level the playing field. once again, tell the committee, what information has been shared

to both of these competitors to each of these competitors to level playing field? >> as i understand it it was a snapshot screen of a spreadsheet, contractor, they took a picture of the screen from the computer that had that information and took that same picture of the screen from the other competitor and swapped that information. it is a single piece of paper that had the spreadsheet and -- >> it really wouldn't matter if the person from eads had looked at that file for 20 minutes. both competitors can look at each other's snapshots of that spread sheet for an infinitely long time. is that correct?

>> that is correct. >> i really don't think there's anything more to ask about. did either competitor change their proposals after this information -- >> i have no way of knowing that but they have the opportunity to change it. >> my friend from missouri mentioned they protest with regard to this release of information. is it a fact that neither boeing nor eads protested this and that the matter of fact i would observe the statements from both of the company's that are before us, both relatively straightforward and relatively relaxed about this and neither

company having had an opportunity to file the protest has done so. can either of you answer this question? i expect you can't because you are not involved in the contract. the testimony is this is not proprietary information but in previous competitions, has this exact data been provided in 2008 and is it part of the public record? >> i can't answer that. >> i expected that was the answer. you had no choice but to call the hearing.

until i see a protest from either company i am going to conclude that the air force saw an example of human error and they responded correctly, professionally and properly and have a level playing field and we should go forward and hopefully not see a further delay in this important program. >> thank you, mr. chairman. fanged goodness it wasn't highly classified information. being in the military, i understand the scenario, following up checks and balances to identify problems be aware they were and move forward to make sure it doesn't happen again. i appreciate that. are you able to guarantee the unauthorized release of this

information did not give one contract and unfair advantage? >> i can't guarantee anything like that. i don't know enough whether to judge or not. we provided the same information to both contractors. from what i can see, based on the air force having taken that action it appears they have leveled the playing field. >> you can't answer that. i am not sure why we are here. and other things are forcing us but i don't think -- we appreciate your statement could have been given to me off line as to what you have done. sometimes we need to kind of politicize things a little bit more. one thing i am surprised about is it takes ten years for the government to issue a contract. only in the federal government

does it take ten years to issue a contract. is amazing to me. be not as new as i once was i am amazed when i learned about these breakdowns. not only is it not cost-effective and wasting taxpayer money, we are losing the confidence of people that we deal with. not only the average citizen but individual businesses we deal with to the point of why bother? it will take ten years and we will file a bunch of protests. will go on and on and on. it makes no sense to me but i thank you for braving the elements. and taking the time in preparation. thank you, senator. >> the question was raised, what was available during the last

protest, the previous contract award where the protest i think succeeded. do you know whether or not this data was made accessible? let me start over. ..

>> assuming that this data was known to the person or understood by the person, or remembered by the person who saw it for somewhere between 15 seconds, minimum, and a few minutes maximum, according to the experts here, whether that data gave an advantage because it was available to the one contractor for the month or whatever it took before us which took place. i'll ask you to question whether or not that would give any advantage to have that data, assuming it was remembered, to have that in one's possession for that great of time before, between november 1 and a time

that the data was exchanged. do you know what the date of that exchange? >> it's in here, and i don't recall exactly what the date is. help me find that date. if i could add another -- >> before -- >> november 22. >> so whether or not that gives an advantage or not, to have the data, assuming it was remembered, et cetera, for that 21-degree or not is not, as i understand it, for you to say, is that correct? >> that's correct. but if are just looking at a snapshot of the information and only did was have a snapshot of the information so they wouldn't have known what was going on behind the date to get to the point, and the person who did have that information, who had seen that screenshot was removed from the program so they were not allowed to talk to anybody associated with the program. and they have not according to the certification was also certified by the ceo, talked or

told anyone in the company what they saw on that day. but now that it's been exchanged -- >> well, you say its level. i think you frank we should be a little more cautious. i think it's an attempt to level the playing field, and it may be a successful attempt. >> fair enough. fair enough. >> unless there is some advantage to having that data for 21 days in the position of somebody who has said they don't share that data with anybody else, then that is an attempt to level the playing field, which may have succeeded. okay? >> correct, there. >> general, let me -- just a couple more questions. the remedy here come the attempt to level the playing field, which again may or may not have succeeded. some people may want to argue that, but what other options

were considered by the air force to remedy this mistake? >> again, senator, i don't know. >> if you don't know that's fine. you have been called or in for a specific purpose and you have given us the information to the best of their ability, the same thing with you, tranninety i think we have to be fair to you as to why you were called. it's important we get this information on the record. although it may be, i emphasize may be of limited type it isn't is part of an overall picture on his contract which took 10 years, by the way because there was fraud and corruption involved at one point during this process where someone landed in jail but there are a number of reasons why it's extended, and the last thing i want to do is inappropriate extend the period. and this hearing is not doing that. we are simply getting information. whether this information is usable, whatever the value of it, in advance or afterwards,

you can debate that. i think it's useful to get this out in advance for a number of reasons. i think to clear the air is going into that decision, the better off we are. this is intended to give factual information, to whichever of way one wants to argue it, to get that on the record prior to a decision. i should say it clears the air. we don't know if it clears the air. some say it gives one side to the other. i'm not arguing that. but it is important come it seems to me all the appropriate facts can be made public, are made public before the decision. there may be a lot of argument after the decision, but at least before the decision seems to me you ought to get as much out there on the record as we can. so you don't know what other options were considered by the air force.

can you -- i will ask for the record the question about whether the previous protest, thus information, was made available to the competitors. will you take that for the record, previous protest process? >> senator sessions? >> let me just say in defense of the air force, thousands of decisions and interactions and communications i'm sure have been undertaken in this effort. after the last incident in which fraud was discovered and boeing officials went to jail, the effort redoubled in the most

fair way possible to the extent to which the greater capability of the airplane to be built in alabama were really not considered and that it is basically a low bid contract. nature to african, comes in with a lower price and gets the contract, no matter if one plane is more capable than every single area of evaluation. they get their little credit for that. so i'm just saying i know the air force has been over backwards to be fair about this. and human error occurs, and i just don't think it should be smirked the reputation of the air force. and i do believe that you took appropriate action, general masiello. and the secretary of defense send an independent review team from secretary of defense team to come and evaluate the accident come independently of

the people who were supervising the contract? >> yes, sir. >> the air force tried to do what they could be notified everybody. they did everything they could do it and fortunately it appears that nothing serious happened to jeopardize the fairness of this contract. i think that's pretty plain. mr. shirley, the examination report from the defense cyber crime center, defense computer forensics laboratory, that's a unit that takes pride in its independent and integrity, does it not? >> yes, sir, it does. >> and you were brought in to independently evaluate what happened? >> that's correct spee-2 concluded there were no signs of network connections, no signs of network connections were disclosed and no signs of attached storage devices were

found. that was one of the findings. >> that's correct, senator. >> no signs of any documents being printed were found, is that correct? >> yes, sir. >> no trace of data other than file names was found on the server hard drive. >> that's correct. >> that would indicate nobody downloaded, copied or stored this information? >> no information. >> that's pretty conclusive, your ability to determine that. so i think that's important. and i think, general masiello, senator wicker asked you an important question that document -- that was revealed, when it was open in that file, did that include dramatic important evidence? or fortunately, was a something

-- was it something that did not impact the fairness of the competition see? i don't know the relative importance, whether it didn't affect or establish or create at minimum an appearance of unfairness. i swapping the same snapshot between the companies, the same type of information between the companies, that established from the air force perspective reestablish fairness in the competition. >> and with regard to the parties who are aggressively competing for this, and i hope submitting the lowest possible bid for the benefit of america and the taxpayers, they can possibly submit because that's what it's going to take to win this contract. i understand it was a 10 day

formal complaint period. maybe i'm wrong about that. but at any rate, neither competitor has filed any kind of formal complaint about this matter? >> that's correct. >> and individual as you noted that was, saw that, was removed from the process. mr. chairman, i think it's fine that we have a hearing. we were briefed on it by the air force immediately. general schwartz has testified to it. i guess in december last year, and i believe they responded well. i think both parties understand what happened and are prepared to accept the air force's decision or else they would have protested it. this critically important contract until final decision, and i just hope and pray and

expect that the air force will do so fairly and objectively and award the contract to the competitor that deserved to win. and i would repeat one more time, when we directed explicitly as part of the defense bill that this award of the tanker contract would be competed, we knew there were only two competitors in the whole world that can provide this. and at that time people raised some of these issues. arguments on both sides. we made that decision. we're moving forward to the final decision going forward with a two competitors in the world, aggressively submitting bids to produce an aircraft, hopefully they'll meet the standards of the air force at the lowest possible price. and our committee certainly has not been shot about it, mr. chairman. we have done i think our duty

without politicizing the process today, and i hope that we will continue at that rate. >> thank you very much, senator sessions. senator mccaskill. >> mr. chairman, i want to take a moment here to come after my friend from mississippi said that he could see what's going on a. i want to explain barry gordy on the record what's going on here from my perspective as a senator. am i unhappy about the notion that he subsidized the company from another country is going to compete on a level playing field with a company that is not subsidized? yeah, i'm very unhappy about that. i've heard a lot of lectures over the last year about socialization and the notion that government should not be subsidizing private companies. and the idea, the idea that all of a sudden we can ignore that, completely ignore that, and beside socialization is okay if

it's being done in another nation, and any company that is being subsidized by the government of another nation is going to compete on a level playing field with a company that is a free market company, i think is absolutely wrong. especially in the department of defense. what if this company was owned by china? would we take that into consideration? okay, so they are our allies and their are only subsidized to the tune of 10 or 20 million. we don't take that into consideration? i do want to anymore lectures about american companies because if this is not relevant, then we shouldn't be complaining about it. if it's not relevant. that's what's going on. these jobs are not going to missouri. this tanker wouldn't be built in missouri. this tanker will be built in another state. what happened here, there was fraud, there were criminals and

in the process was not fair, with all due respect, senator sessions. they didn't bend over backwards to make the process. after the fraud was found. because in a very unusual move, one of our major defense contractors filed a protest, and independent auditing agency said to you know what? it was very unfair. that's what happened in 2008. they stacked the deck, and i will pay for my stamp of what i think happened is they were embarrassed. the air force was embarrassed that they have allowed fraud to go on in this kind of competition, and they the overcompensated and said okay, owing, we're going to make sure you don't get it. and they put out a proposal that the gao said every single basis was unfair. so that's how we got here. it wasn't that the air force bent over backwards to make it fair after the fraud program and independent evaluation of that.

i just want to make sure the record is clear about that because i would be this way, i don't care where the jobs were going to be. i don't think the department of defense should treat companies equally if one is subsidized by a foreign government. i think it's a bad precedent. i don't think we should be doing it. i think most americans don't think we should be doing it. and i know jobs will be had here in various states and we all do this around here. we are competing for jobs just like american companies are competing for jobs. i think at the end of the day we should be doing everything we can to at least take that into consideration because the lowest and best surprise is relevant to whether or not they are subsidized. it's relevant. and so i want to make sure after it was said i see what's going on here, i want to buy what's going on here from my perspective because these are not missouri jobs. and so i think this is a process that has been terribly flawed. a lot of what you testified today i think is there, and this

gadget if this was a trial questions would highlight what i think is the case. a lot of what you testified is that you couldn't prove that eads didn't do what they said they did. in other words, the computer was on. you can't prove whether they looked at it. there's no proof other than the man's testimony, when he looked at for 15 seconds or three minutes, correct? you just can't disprove what they said, correct? >> ma'am, i think it would be wise for us to send you the specific technical findings and a question for the record to clarify that. what we believe that we saw -- now, i did not read that employees david. i did not see that material. the aspects that he looked at it fairly briefly, 15 seconds come is something that i understand

from the conversations that relating to preparing for this. but we did see -- we had the median question -- let me phrase it this way. we had each company's computer that was forwarded to us based on the agreement of the companies, and the program office. and it was delivered to our lab. and we subjected each of those companies computers to detailed forensic examination and it's outlined in a very exhaustive technical report. i did not review the specific details of the entirety of that report because it had source selection. i can't say this specifically, but out of concern it had source selection or other proprietary material. i wanted to understand that in directing the assets of our lab and our process that we received

those computers in the right fashion, that we looked at those with the right subject matter experts that could deliver a technical report consistent with our processes and procedures. and then under the specific direction of our lab director, that process was conducted and we generated are rendered, as i mentioned, the technical report process as a result of that process. as i believe i mentioned earlier, that the only files from the technical report, the only files opened with the files that were identified in each of the respective written statement, that the files are only opened for the time suggested by each of the respective companies. >> wait just a minute. i understand that they were open for that period of time, but the only knowledge we have about how long the screen was looked at is

with the individual said. we have no way of knowing whether they looked at that screen for 15 seconds or whether they looked at for three minutes. >> you are precisely correct. >> that's what it wanted to establish. and could have eads adjusted their final and best offers -- this is my question, could eads have adjusted their final and best offer based on the trend by data? general. >> man, they have. both have the opportunity to adjust their proposal. >> i understand now but let's assume after someone looked at the screen, could they have adjusted their data? could they have adjusted their final and best offer? >> i don't know because i don't know how much information is revealed in a quick amount of time that they looked at the information. >> and do you believe that based on the data, the ifara data that was on the page, that three minutes would be enough time to memorize that data?

>> i can't speak for the individual. >> i don't want to -- have no far as motive to discover. i am just frustrated because i am embarrassed at how this process has happened from the beginning to this moment. and i am very exercised about the notion that we are not going to have a policy in this country that doesn't take into account when we are having a competiti competition, that it is a company that is subsidized to a very large extent. i mean come if we were subsidizing mr. chairman, in to this extent, they would be press conferences going on around here about how this is a subsidization bailout, government shouldn't be in private company businesses. but somehow it's okay now, and i just don't get that inconsistency and that's what i am as exercised as i am.

thank you very much mr. terrific and thank you. i understand you're here, and my passion about this has very little to do with the find work you've done preparing for the string and effort you made after this unfortunate incident. but nontheless, it's very important that i spent what's going on with this. thank you very much, senator levin. >> mr. chairman, could i offer for the record the gl report on the protest previously, it found eight violations out of 111 complaints, so very close questions in my view whether that should have protest should have been upheld. and i don't think the air force deserves as much criticism as my colleague suggests. and also, when i was referring, senator mccaskill, to bending over backwards i really meant that protest as competition. >> i would agree with you on that. >> senator wicker. >> well, i appreciate senator sessions making that a part of the record, our offering to make

that part of the record for the committee accepting it without objection. i have information, and someone should correct me if i'm mistaken, but the information provided to me by my staff is that it's september -- in september the wto ruled that, in fact, boeing received a legal aid from the united states government, and that it is a matter of fact that the gl -- wto has made findings against both of these competitors with regard to improper aid from their governments are i stand to be corrected, but that's the information i have, the information i also have from the secretary of defense has determined that these wto rulings give both competitors will not be a factor in the

competition. a determination was made in 2008 by the independent analyst at the acquisition office that, in fact, eads and their partner at the time had a bid for the best aircraft. and i thought the criteria should be what's best for the united states air force, what's best for the fighting men and women who are going to depend on this, what's best for national security. and in my judgment that decision was made independently and correctly.

i think by kicking the can down the road to 2011, there is a real, there's a real risk, mr. chairman, that the acquisition for major projects such as this will always be called into question. and i fear we have done great damage to the future of independent examination. let me make a final point about the three minutes versus the 20 minutes versus the 15 seconds. that information has now been shared with both companies, is that correct, general? >> yes, senator, that is correct. >> so it wouldn't matter if the eads employee had looked at the data for three hours, or for

three days. each company now has that one little bit of information, from the other company, and they have had and they can analyze it till the wee hours of the morning, is that correct? >> that's correct, sir. >> well, i appreciate what the air force is doing. clearly human error -- unfortunately is going to happen. anytime an organization is shot through with people, going to have human error occur. and i appreciate what the air force has done. they are my branch, too. i love them all, but as senator graham, i'm an air force veteran and an air force reservist veterans. and i think that the air force acted very professionally.

>> just for the record put in a chronology because this committee has been following the tanker modernization program closely for a number of years. in 2002, 2003 we directed a series of reviews. we held hearings that identified serious problems with the sole source by the air force. this led to the cancellation of the contract that was a time when the corruption was discovered. and that was described earlier today to this committee played an important role in covering that. senator mccain particularly took the lead on that, but a number of us very much supported that effort. 2007 and 2008 being closely followed the air force's unsuccessful second attempt to award a tanker contract. it was unsuccessful because the

general accountinaccounting office upheld the protest to that award. so now we are trying to do what we can to get on the record for consideration the facts that surrounded this release of information, that obviously never should have taken place that was significant and competence that led to this release of information. everybody acknowledges it shouldn't have been. whether or not the effort of the air force to level the playing field, in fact, succeed or not is not a matter for this deliberation. we are not looking at that aspect of it. that may or may not be debated by one or of the parties later on, but that would be the issue is seems to me as to whether or not that playing field in fact has been level. there clearly is an attempt to