and the trustees and if things going to court in a contested we get kentucky logger per crew of time but if estimation as to where we are in the process and when you believe we will be able to look forward to an implementation agreement. >> on the process as mentioned we are in the restoration planning phase which includes assessment and quantifying the

injuries to the resources and services at the same time we are undertaking restoration planning so we are looking ahead to what can we do to restore the resources that have been impacted. specifically with respect to the injury assessment process, we have come a long way to identify exposure to the resources in the gulf whether they be on view salles on the map with her that turtle and marine mammal fish resources, shoreline habitats oyster reefs we have documented there has been exposure to these resources and in the process of not moving from okay yes there's been exposure but we give to go to the next step of what are the injuries, what has been caused by the oil spill that we can quantify that we then try to restore, so we you're in the middle of that injury causality process and again at the same time looking forward to what can we do for the restoration of the

resources. >> is there a guess as to how much longer that process will take? >> may i add one thing to what tony said as far as the assessment we're also looking for work at the longer-term impact and how we go forward, and as we go forward each year gives you information, and the overall trying to make sure we accurately count the injured species obviously the more information for more time we have the better it would be. the game plan now as to when you believe you complete the phase? >> from my perspective as we know the doj filed suit in this case that included natural resource in december last year, so we don't know what that will mean for the court schedule, but we have to be prepared when the judge comes around for looking at the nrda so we're looking at

completing field work this year and next year and perhaps having to be ready for a schedule so the next couple years we have to have good information on what we found and where we are. >> which leads me to the early restoration funding $1 billion there was certainly good news, and i applaud you and vp for releasing the funds of the restoration can begin but it seems to me a billion dollars is a relatively small amount considering the amount of frustration that will be required and that early restoration probably is important. can we look forward to additional sums being released before the settlement is reached so they have additional resources to move forward. >> whether or not we need to deal with a billion we have and go forward with of the early restoration project we can do if that billion dollars as we are going along with a parallel path of the assessment and quantifying the injury making

sure we identify uncertainty. if we work on a time when similar to what tony was talking about me to make sure we address the long-term and chronic that we are on shore as we go forward. >> i appreciate you keeping us informed. i'm sure we will hear more from the states today they are strapped on resources and the money being made available are being put to good use to read would be an encouraging sign if we can get additional commitment for restoration at this stage so if you will work on rothfuss i have one more question for senator sessions and that is this process -- and builds upon the cooperative relationship between bp and the trustees which could turn adversarial it's the nature of the process. we may not have an agreement. therefore it's very important we have an independent scientific base for what we are doing. during exxon valdez, the process set up their own counsel and

side group of independent experts. do you have such a process available to you in bp circumstance could you have an independent panel you rely upon? i know you said you seek independent verification is is there a panel that's been put together? similar to exxon valdez? >> this audit panel was put together this time we have the technical expertise and working groups we pull from academia and the states and agencies as needed and along with the responsible parties as part of the technical working groups we do have experts in the field as we design the studies and long-term restoration projects connected to consider putting a panel together on exxon valdez? >> we've heard that input from some of or ngo partners. i think in as if memory serves me right in exxon valdez that group was set up after there

were settlements to look at how many were being spent post settlement. as said in this case where the resettlement we do have a lot of technical expertise within these working groups and alone working with 75 some academics along with their support staff and we feel like we got a strong technical expertise within the working groups and we can speak candidly with some of the experts we are working with under confidentiality agreements >> thank you very much. tell us who's in charge of the process, in other words who invokes the meetings and set schedules and makes decisions under this statute as you understand? >> there's seven different individual trustees that are part of this and at this time

there's a new structure put in place for the executive committee that is helping to guide this process. the process was starting at the very beginning of this bill as we were pulled together and have met routinely and regularly across-the-board. as we go forward in the technical working groups and working together as a trusty council but within the council as we go forward on different things we have equal votes as we go forward. >> is the secretary of interior discharged with coordinating the group into session? >> as a part of the executive committee cooper shadegg is actually the chair of that committee and is of the lead for helping us put together the meetings. the trustee council what chollet has as i said routine meetings that are scheduled and in the early restoration at the last meeting we had been scheduled additional once a week ago for work and work on the restoration project proposal and process to get them approved

>> if you don't report on time it's their fault? >> as i said the trustee has to work together. >> i hear good things about the openness with which the ordering process but i did know he previously stated the noted process will have moved from the planning stage to the implementation stage by year's end that may be more likely by the end of 2012 is a system so we share the interest of senator vitter and the chairman we don't want this to take too long somebody needs to make sure the process moves forward. would you comment on that? >> yes, and i think the trustee council that's come in with cooper's leadership has been a shot in the arm to get the trustees organized and focus on some of the decisions at hand. >> i want to suggest we are just

sort of a slowly moving through the assessment process. one of the accomplishments is the billion dollars of the early restoration and the new council the it's been formed as focused on identifying projects and looking at how we get to the agreement to get the projects implemented and we will see the restoration long before we would in other damage assessment cases because of their leadership and the focus on getting things in the ground very soon. >> i may have been unfair when i said that some of this cleanup hasn't been done by the concerns of fish and wildlife that is the feedback i've gotten are you aware the fish and wildlife service directed the cleanup efforts to stop as a result of environmental concerns. >> i was at the core this month and there's cleanups' going on right now. there are times that the of the

asked the cleanup to stop it there is birds that are nesting, things like that, natural resources and things we would want to protect on the refuge but there's a current active cleanup operation going on right now. >> it is a danger of spreading and washing also in the high tide and storms and it's not healthy for the environment or either by hand or machinery i would suggest we might as well get on the work in accomplishing that. the other part is fabulously clean and getting a really good report so we are pleased about that. do you talk with local officials along the gulf coast concerning how progress is occurring? >> i haven't myself talked with the local folks, but we have managers on the ground station that the incident command that are talking with the local folks, and working with them on

their concerns on how we go forward with the cleanup on the refuge. >> when do you expect that noah will transition from the assistant planning phase to the restoration implementation phase? what's the early restoration? right now we have things going on concurrently during the assessment and restoration planning and the restoration implementation. we've done some emergency restoration action to prevent further injury to resources and with the early restoration we are looking to implement some of those types of projects here late 2011 into 2012. >> just briefly, there's some concern that has been expressed to me by people that i respect that live in the area that there may be some hesitation to proceed with the process while

the initial response process is ongoing in bp as a responsible party. have you heard is there any legal concern that there might say well, you need to certify that we finished our initial response effort before we go any further with the process? >> no sir, we move forward without or damage assessment of the same time the response start it. we are learning from the response and getting information in forming the damage assessment, but we are not be laid at all by the response action. >> good. thank you. >> senator whitehouse. >> thank you. first let me welcome ms. dohner. we just had over the weekend the 50th anniversary the university

rhode island graduate school of oceanography. the master's degree from shia so, we are pleased person in the following panel so i'm glad to see the university are undergraduate school oceanography well represented in this hearing. the natural resource damage assessment is as light understand stands on a considerable number of studies plans approved that identify various problems and explore them. as i understand, they're have been well over 100 approved already, and i understand the relationship is the trustees and pp negotiate to try to define the plants correctly. what is your sense of how that process has been going? have there ever been deadlocks?

what happens when there are deadlocks? ai understanding bp is paying for this as it goes, so they have slightly different interests at stake and an interested in how that works itself out through the process. >> i think the process is going fairly well. we have our disagreement on what we would like to see in the plans. there's a push in the pulpit and the trustees and pp. but ultimately, the decision is the trustees on what to implement and we feel we need to do to make a distensible damage assessment case. so, in the instances where we cannot reach agreement and we cannot get a signature on these plans and bp to agree to up-front cost of the studies, we would take the studies on our own if we felt they were necessary to meet our need of the case paying for it at that point since they are not agreed what source of funding do you have do you feel that is a

restriction on your ability to proceed with any of the studies? >> it doesn't feel that there is a restriction. we have been able to up front cost and impact when become its they are going to fund the studies they don't find those real time. we incur the cost and cover the costs leader. any study we do the trustees feels is reasonable assessment cost we will recover eventually a written signature of the agree of front and a legitimate cost we will recover leader. >> and the account allows you for the folks doing the work in the meantime so they are not carrying the cost of the government study? and you're comfortable with that work available -- that creates no hesitancy on the part of noah with proceeding to studies? >> that's correct. >> good to hear. >> thank you, sherman. >> senator vitter? >> thank you mr. chairman both for your work.

mrs. stoner, can you discuss efforts that have been undertaken to rehabilitate seafood and in particular the oyster habitat over the last few months? >> sir, i do know they are doing the work to the habitat but as far as the seafood i would have to get back to you on that. >> what brought lee is being done on the of oyster side? >> i know they look to what needs to be done for restoration and the early restoration projects that have been evaluated and also some of the work is done under the technical working groups on the impact of the big and i would get back to do with a better explanation. >> okay, great if you could do that followed that with the super. in your testimony, to state that the process allows the implementation of emergency restoration projects before assessment is complete what are the limits on this authority and what is the potential to expand

and expedite that authorities we are not back loading everything for eight years from now? >> the emergency projects are designed to go forward and minimize the injury so the long-term injury would be less than what is anticipated. some of the things we have done is short line digitation and going forward with the vegetation or improving habitat that would allow them to land areas that are not oil and things like that. the other process, the restoration would be the overall restoration some emergency projects are a little bit different in the early restoration projects as we go forward. >> okay. ms. stoner, if you could briefly discuss the federal and state programs and their significance for the fisheries habitat. >> i'm sorry i'm not familiar with the project so i would have to get back to you.

>> one of the frustrations i hear all the time from the fishing community is recreational and commercial or challenges with adequate stock assessment and science at noah. this predates a general frustration. given that there are clear shortcomings in noah's stock assessments, how is that complicating your efforts in this context? >> so we are looking at impacts to the resources from both a recreational use perspective as well as the ecological perspective. i'm not an expert in this area. i don't know to what extent we have relied on the stock assessment to do that work. i don't think it's come into play for the assessment on the ecological site certainly we need to know the resources out there and what might have been

impacted by the spill. we are working through some of those issues how do we determine baseline, what is potentially impacted. >> i guess that's my question, i don't mean to interrupt, but to get to the heart, you need some baseline. ordinarily a logical baseline to go to would be noah's stock assessments. i think it is universally recognized those are not current come up to date, precise, adequate in any way. so, how do you determine a baseline? >> that's a jury good question me and we could always use better baseline information across the resources the we are looking at. in this case what we are able to do is a number of things. we are doing some trials now to determine what's there. it's not ideal. we would like to have been out there before but we can also

then simulate what creatures would have been exposed to the oil let different concentrations and look at the potential impact for those species and then think about how that applies to the larger system that was impacted. >> is any of the work being done in this context helpful in terms of the broad stock assessment responsibility? because again, i think it's broadly recognized that noah is leedy heineman and we don't have good current stock assessment information. >> that's a good point and we are coordinating with other noah programs that don't do damage assessment work but have other monitoring requirements and responsibilities. we supplemented what they've done and then we have enhanced with a have done so that they can use some of that information going forward. the specifics for the stock assessment i would have to get back to you on what we are doing is feeding into that process.

>> thank you, mr. chairman. >> i want to underscore the point senator vitter made about the baseline assessments on the second panel there will be testimony of concerns about whether we have an accurate baseline i think some of the points senator vitter raised is very much important. i would urge you to this wide range of scientific opportunities that we have in order to try to have an accurate baseline to assess damages we could do a stronger job and then secondly, and i think you mentioned this specifically by having another season you will give it more information and you will have more confidence on the restoration plan. we are concerned about the long-term impact, what might be discovered when after the settlement is reached, after the court decisions are finished and the implementation plans have

already started to be implemented, and i believe i heard from your prior comments in the assessment and implementation plans coming you attempt to deal with those issues the best you can. would you spend a minute to giving a little bit more confidence that the unknown that may develop later that there will be adequate protection in the negotiations? >> as part of the assessment study as we go forward in trying to set the long-term impact will also have to have long-term monitoring incorporated and to the studies and an to the restoration planning and overall to make sure that we are able to with performance measures within the monitoring plans identify any impacts we might not see years from now. sea turtles we might not see impacts so we need to make sure that part of the overall process we go forward. >> we would be protected to make sure that even those discovered leader still would be part of the plan.

>> to respond briefly we have had reports concerning the situation and the plans indicated that the stocks are showing more legions when they've been caught them have been otherwise observed some have said it's not unusual. those are the kind of things we definitely need to get to the bottom left is that under your review and you have any comment on that. yes, sir we are looking at the red snapper and we've heard reports of the legions. i know there's the research that has indicated the findings of more legion's than might otherwise be expected. as we are looking into that. and developing the city plans the would look at that specifically estimate how long does it take to get that plan

developed and executed? >> we can develop plans in a matter of days or weeks. i don't know the status is of that particular plan. i know it's been under discussion and we've been looking at the data from some of the data that we've collected through but not necessarily tied to a particular study plan so we are actively working on that issue. >> we thank you for your attention on this matter and we do think it provides a historical opportunity to develop a new base line and look at some new research and to identify ways not only to recover from the damage that's been sustained but also perhaps to manage our stocks and wild life better and make it more healthy so think you very, very much. >> what me thank both of you again not just for your testimony but for your commitment to this issue. this is the second hearing this

committee has had on the subject. it will not be out duralast as we will follow-up on oversight as to how the process moves forward. thank you very much for your testimony. >> thank you. >> while the next panel was coming for what it is my pleasure to introduce a fellow member of the alabama bar mr. cooper shadegg. he currently serves as legal adviser to governor robert bentley of alabama. in that capacity he was elected to serve as chairman of the executive committee of the trustee council. so we get to hold him responsible for everything i suppose. but actually, i am a little concerned that i don't think any of our leaders have a lot of

executive power pages have collegial power in this process. prior to joining the bentley and a station, he was practicing attorney for the firm of rose and hallwood in tuscaloosa and served as adjunct professor of law at the university of alabama school flock, one of the top law schools in america. i'm proud to say. she is a bar commissioner for the sixth circuit selected by fellow board members and is currently the member of the alabama state bar foundation board of trustees, member of the tuscaloosa bar where he served as president previously, bachelor's degree in economics he has from georgia tech and a doctorate from alabama. he and his wife live in tuscaloosa and have four daughters. he's been an associate pastor at the united methodist church. thank you for coming.

i also note his mother is a good citizen my home town of camden alabama, little community in a great family, and i am proud of cooper to be serving on this important position with governor rent lee. >> mr. shattuck, welcome. >> mr. vetter? >> thank you. as i mentioned, garate graves as you today as a louisianan trustee, and he also serves as the chair of the coastal protection and restoration of 40 of louisiana. that is a state cabinet level position over all of the coastal restoration protection. before that, was honored to have him on my staff serving with me and he served many members of louisiana's delegation of for several years. he was involved in virtually every water resource coastal restoration related bill going

through the process while he was here, very able and i know louisianan's interests are in very good hands. >> thank you. >> senator whitehouse? >> i want to recognize dean leinen. as i said it's a better day for the graduate school of oceanography with both a graduate in the first panel and former dean on this panel. he was kind enough to return to the graduate school of oceanography for the 50th anniversary and my timing is right and she was actually the dena of the graduate school at the time my wife got her ph.d. in marine science from the graduate school. in any event a good friend during her years as the dean of ryland and i'm delighted to have her here. unfortunately we lost her to florida in the meantime, but there's always hope. [laughter]

>> dorcy boesch could have been introduced by senator vitter since the sidley native of louisiana but now i will take the introduction of introducing dr. boesch connecticut and maryland, part of the university of maryland center for environmental science. he's been a personal adviser to me on many of the environmental issues and he comes to us as a member of the president's obama oil spill commission. dr. boesch examined the causes of the deepwater horizon explosion and recommended improvements to the federal law, regulations and industry practices to prevent and mitigate the future spills. he has a strong background in biological issues and it's a pleasure to have you here once again before the committee. and we have another from maryland, dr. erik rifkin from

baltimore. dr. spiegel is the daughter of the national conservation center which partnered with the marine laboratories in florida in johns hopkins university to study new technologies for measuring all levels of oil spill contaminants. i think this is cutting edge information that helps us to better assess the amount of damage that's actually been done. he's been able to develop techniques that are more sophisticated in determining areas we thought were not affected which were in fact affected by the dp oil spill so it is also a pleasure to have you here and also another from maryland on the panel. let's start with dr. boesch and work our way down. >> senators, and very appreciative of the opportunity to testify today. i would ask that revised testimony just changed to include some more specific references. >> it will be in all of your

statements will be included in the record. you may proceed as you wish. >> i was actively engaged in their research on the long-term environmental issues in the gulf of mexico -- >> is your microphone on? >> [inaudible] okay i was actively engaged in the scientific issues in the gulf of mexico and impact on offshore development before leaving louisianan as senator cardin indicated to head the center for science devices but it was for this reason. my familiarity with the issues surrounding this bill the president appointed me to serve as one of seven members of the national commission on the deep delete could be the deep water offshore drilling. so my perspectives are those of the commission that i will present today. the natural resource damage assessment was not a central -- not central to our investigation and any case was in a very early stage as we completed the report in january. nonetheless, the commission's report does discuss and offers

some recommendations concerning the ongoing inertia. the goal of nrda is to make the public school for injuries, natural resources and service resulting from oil spill. these injuries are quantified by reference to conditions that would have existed had the incident not occurred. we've recognized on the commission that establishing such a baseline conditions is challenging not only because of the background data and the natural variability but because many gulf coast habitats have been substantially degraded over decades when pressure from the agriculture commercial residential development. to illustrate this launch of degradation i included in my written testimony a simple graph that shows the weight of the wet land lost in louisiana and how it spiked during the 70's when we had a very aggressive program of dredging the canals and but lansford the gas exploitations as well as transportation.

the commission recommended the trustees ensure the compensatory restoration under the process as transparent, appropriate, and to the degree possible apolitical by as senator cardin mentioned in the introduction appointed independent scientific auditor to ensure the projects are authorized on the basis of the ability to mitigate actual damages caused by this bill. second, a potential settlement agreement providing for long-term monitoring and assessment of the effected resources for the period with at least three years and for enhancement of the damages beyond the baseline. giving this closely as possible to the employees' current principles that underpinned the regulations to ensure the public resources are made whole to the fullest extent possible regardless of state or federal boundaries. the recent agreement to support the early restoration presents a promising opportunity to begin to restore the impacted

resources without reading for years for full compensation of the nrda when damage restoration may prove less effective. however, it also presents opportunities for this application and this misallocation of resources. from the beginning, the allocates early restoration equally among the states and federal trustees, disparities, despite the fact there's disparities among the natural resource damages. this potentially if this principle continues could compromise the in place and kind principal in a way that can serve the commission. the framework agreement also states that the early restoration projects must be consistent with the pollution act meeting the criteria for the public coal for injuries from the oil spill. to avoid politically expedient approach is that might miss the mark in terms of compensatory restoration for independent

scientific officer or a review board to insure projects are authorized on the basis to mitigate actual damages caused by the bill to the degree possible would be prudent to the scientific audit could also independently evaluate the degree to which the natural resource damage of sets to be credited against the damages due to the responsible party for the projects measured, calculated and documented using the best available science to the end of the prisons bill, as i mentioned on top of longer-term degradation of important habitats and resources in the northern gulf of mexico and putting off the coastal wetlands as senator vitter mentioned the recurrent so-called dead zone, the fish populations and endangered species. the commission identified that the restoration effort that is grounded in the responsive to the regional needs and public

input would be very consistent with the recommendations that the secretary of the navy made earlier last year. the commission recommended that congress dedicate to this purpose 80% of the clean water act penalties as senator vitter mentioned earlier, his discussion of the legislation the gulf ecosystem restoration task force chaired by the administrator should lisa jackson and mr. graves is developing the gulf of mexico ecosystem restoration strategy due in december, 2011. legislation to degette the fund and established the council to administer them seems to me at least to stall in congress in part because the lack of consensus among the gulf states over the scope and permissible use of the farms, and once again come allocation among the states. as senator vitter announced some r gup will take place as a sign we will see progress on that. the oil spill commission in looking at this issue concluded it was most compelling from the

natural perspectives the application of the fund is focus on the ecosystem restoration, and that we argued that the criteria should be national significance, contribution to the ecosystem resiliency and the extent to which the natural policies such as flood control the oil and distillate, agriculture, and navigation directly contributed to the environmental problems and require the restoration to thank you very much. >> thank you dr. leinen? >> thank you mr. chairman and members of the subcommittee. my name is margaret leinen, the vice chair of the gulf of mexico research initiative research board three by illsley provost for the environmental initiative for the atlantic university and executive director from graphic. my remarks today were prepared by dr. reva call well, chairman of the gulf of mexico research initiative and one of your

constituents, senator cardin. may 2010 bp committed $5 million over it in your period to create an independent research program to study the impact of the deepwater horizon oil still on the gulf of mexico. the program known as the gulf of mexico research initiative or gri is directed by an independent research board. the research board is responsible for identifying of the research priorities preparing a request for proposals, enabling an open and transparent process for review selecting proposals for funding based on that review and reviewing annual progress for the continuation of funding. although the gri was announced in 2010, it was not until march 14th, 2011 that the master research agreement was signed it. that agreement between bp and the gulf of mexico alliance provides the operational

structure or the gri. as stated in that research agreement, the gri is an independent research program and separate from the natural resource damage but of -- damage assessment process, and bp agrees that the participation of the alliance in this agreement shall not result in a credit against our defense any claims for natural resource damages or assessment costs. so we are independent of nrda. the objectives are to study the impact of the dispersed oil and the ecosystem of the gulf of mexico and affected the gulf states. in a very broad context the fundamental understanding of the dynamics of these events associated environmental stresses and public health implications the gri will support the development of improved oil spill litigation, oil and gas detection characterization and remediation

technologies. ultimately the goal is to improve the society's ability to understand and respond to even this like this and to understand the effect on the coastal ecosystem with an emphasis on the gulf of mexico. we have established and are implementing peery viewed competitive grant programs that will support research that advance this understanding in five areas. first, physical distribution, dispersion and delusion of petroleum of constituents and associated contaminants such as disbursements under the action of physical ocean a granite process and tropical storms. second, the chemical evolution and biological degradation of the petroleum disbursement systems and their subsequent interaction with coastal open ocean and deep water ecosystems. third, environmental effect of

the petroleum disbursement system on the seafloor water column coastal waters, beach sediments, wetlands, marshes and organisms that signs of ecosystem recovery. technology development for improved response mitigation detection, characterization and remediation associated with oil spills and gas releases and fiscal fundamental scientific research integrating results from the four other themes in the context of public health. the research board has released to requests for proposals, which we call rfp one and three. we anticipate issuing another request for proposals later this year. the first of these are announced april 25th of this year. through this program, a minimum of 37.5 million per year will fund approximately four to eight research consortium to study the

effect of the deepwater horizon incident. it is anticipated that each agreement will be for up to three years and will range between 1 million to 7.5 million per year. the research will be conducted through these consortiums and must address one or more of the five areas that we've described. the proposals are being accepted until the 11th of july, and we anticipate announcing the result of this competition august 30th. the second rfp would be for funding smaller research teams. it will focus on individual investigators with up to three co principal investigators. a maximum of 7.5 million per year would be available for those grants, and earlier this year the research board recognized the need to provide short term or emergency funding to sustain some data collection

that had already begun over the summer. on june 7 to be announced the availability of $1.5 million of emergency funding and are conducting an expedited review of proposals that we have received. we anticipate announcing the results of that competition at the end of this week. so, the gri supports research that contributes to our understanding of how the gulf of mexico was influenced by the deepwater horizon oil spill and how this rich and dynamic environment is recovering. this information will undoubtedly be useful and informative to the nrda program, and we expect it to provide valuable insight for the long-term analysis to the ecosystems since it lasts for ten years. thank you very much for the opportunity. >> thank you very much, doctor.

dr. rifkin? >> thank you, ranking member sessions and remaining members of the subcommittee, very much for inviting me to testify today. on july 27 def 2010 approximately one year ago, the national aquarium was invited to testify before the senate subcommittee on a hearing titled assessing natural resource damages resulting in the bp deepwater horizon disaster. at that time, i emphasized the importance of independent research to address concerns related to our ability to accurately quantify potential chronic damages to natural resources in the gulf. the rationale for this was and still is based on the concern that the current gri tecum nrda was using the approach which adequately measures small quantities of petroleum contaminants which could of chronic and tax on the a leota, and this is important because small amounts of contaminants in the water and in the sediment for water three process, by the

concentration whereby you magnification can increase exponentially. more specifically, in my testimony and the written testimony of the other researchers on the panel at that time, suggest device is called passive diffusers can be used to measure low levels of petroleum in order to accurately characterize the ecological risks and impacts. since the last hearing as senator cardin mentioned earlier the conservation center and collaboration with the laboratory and johns hopkins university, has deployed sophisticated petroleum contaminate samples deployed by the usgs a decade ago and these are called -- excuse become semi permanent devices is the acronym for which is spmd. these are virtual fish and provide unparalleled data on low levels of petroleum, contaminants in the water column and sediment pour water on the data necessary for assessing the chronic impacts. by using these we are able to measure low levels of individual

pah and in the water impacted by this bill. our preliminary finding supports the detention the data obtained by the devices would incorporated into the concentration models would provide a far more accurate assessment of the nature and the extent of the damages of the gulf and the standard approach of using grass samples for water and sediment. samples came from impacted areas off the coast of louisiana, mississippi, alabama and florida. a number of months ago we had an opportunity to meet with representatives from the environmental protection agency so that we could share our preliminary results with the agency and of teen advice and guidance from the research scientists. at our meeting and in subsequent conference calls, we support the view that there was value in using these diffusers to monitor levels of these so-called pah. incorporating the technical suggestions we resigned our

method and once again deployed these devices in louisiana as you all know. the result of this effort should provide value which can be used to model the concentration of the contaminants in the food chain, procrit empirical data that can be used to ss and quantify the chronic damages and reduce the level of uncertainty when assessing the chronic damages from exposure to oil from the peace bell. the ramifications of the findings should not be underestimated. the vast lardy of water and sediment samples obtained have resulted in the concentrations being reported as non-detected. that is below the analytical detection limit, it equates to zero. so the assumption is made that there are in significant damages to natural resources. however, the value below the detection and predetermine the benchmark value from the samples doesn't mean that spmd are

absent present levels which are not harmful. the pravachol supports the use of the benchmark values as a basic determinant for the concentrations are organic contaminants constitute an ecological risk. however the benchmarks are not meant to be used or are only meant to be used for screening purposes only. they are not regulatory standards or criteria. benchmarks' cannot be delegated for sites and situations. it can be defended only in terms of regulatory precedent and while the epa and other agencies provide broad guidelines for the assessment of the benchmark endpoints, specific plans are not identified. a meaningful nrda must be able to have economic models to accurately assess chronic damage and injury to natural resources in the gulf. this perspective should certainly apply here given the magnitude and the scope of this bill. in light of the preliminary findings, there are reasons to give serious consideration to

expanding these diffusers and impacted areas of the gulf as soon as possible. this will increase our ability to assess the causality between the release of oil and the resources and lost human use of the resources and services. thank you very much for your time. >> thank you, doctor. mr. graves? >> i appreciate the opportunity to be here. i serve as the chair of the council of protection restoration of 40 louisiana, the state agency created after hurricane katrina to be the single state entity charged with coastal sustainability. hurricane protection and other coastal resource issues in the state of louisiana. mr. chairman i think it's important to provide background for the conditions in coastal louisiana prior to this disaster occurring. going back about 80 years ago the federal levees put on the mississippi river was the primary cause of 1900 square miles of the coastal wetlands

and these are jurisdictional wetlands just like you or i would have to get a permit for impacting. there's been no mitigation done for the 1900 square miles lost today. in addition of the last six years we've been infected by hurricane katrina, rita, gustav and like that took an extraordinary toll on the state. i tell you that because it's different than the other 35 coastal states and territories in the country. it's a very fragmented coastal area with a lot of nooks and crannies. if you measure the shoreline from mississippi to texas, you get about 800 miles that you actually measure the actual title shoreline it's much closer, about 8,000 miles. so, very, very different coast line to protect the area from oil is an extraordinary challenge. at the same time, this ecosystem is very productive. u.s. fish called the most productive ecosystems on the continent.

90% of the marine species in the gulf of mexico are dependent upon that estuary in louisiana at some point in their life for survivability. 98% of the fisheries that are commercially harvested in the gulf of mexico, again, dependent upon coastal louisiana wetlands and unique estuary where 90% of the fresh water that flows to the gulf of mexico comes through our state. at the same time, it is home to 5 million -- 25 million songbirds and is the largest habitat for migratory songbirds waterfowl. so again, the reproductive area. home to 70 rare threatened and endangered species and the coastal wetlands we've lost play an important role of just in terms of ecosystem services but also in terms of keeping a buffer of it in the gulf of mexico and the populated communities. we saw the impact of that after hurricane katrina. on the economic side, mr. chairman, if you look at the five gulf states that the gdp of those areas if we are compared

to a nation that would comprise the seventh largest economy in the world, so much economic activity ongoing. coastal louisiana alone we have the top 515 person approximately 20% of the nation's water board commerce comes through the ports and river systems which is hundreds of billions of dollars annually, and at the same time, this area produces approximately -- produces or transfer approximately one-third of the oil and gas consumed in the united states. so from an economic aside, the gulf coast, coastal louisiana is very important. the we've had these challenges, historic challenges and we've been able to make progress in recent years, louisiana made unprecedented investment to restore the coastal wetlands and as a matter of fact the geological survey indicated that it appears we've created a price of the two square miles of land while the historical loss rate has been from 11 to 16 square miles on average of the last 80 years.

in the last three years we have created up to 200 square miles so we are making progress. this oil spill cannot the worst place because the productivity of this ecosystem and a can of the worst time because we were rebounding with that reverse, we reversed a loss of the trend. it had been ongoing for decades. to give you a few statistics, 92% of the moderately short lines rehnquist louisianan and even today, 100% of the -- over 99% of the moderately come 81% of blight and about 96% of the very light short lines in coastal louisiana today. over 60% of the marine species diverge, the mammals from the fish collected, there were injured, sick during this bill collected in coastal louisianan. succumb incredible impact in the state. i'm grateful to the response of the nrda side very quickly. bp is to be commended for coming to the table with their checkbook.

it's a very important thing to keep in mind. taken to the table with tourism fund some seafood safety marketing funds and we very much appreciate that. i want to paint the box we're in today. as you very well know better than i do come of this country is facing fiscal challenges to read our state is facing fiscal challenges. there's a $1 billion cap on the light of the trust fund to fund the oil spill response activities including $1 billion cap. we are over $900 million of expenses from this disaster so far, and so the only force of money for us in this case is bp. it's the only source of funding to a large degree to fund response, nrda operations. mr. chairman, i think the creation needs to be flipped over. i think the public should be in the driver's seat by being able to control check but you can control what is in the work plans, how the nrda assessments are conducted. the timeline of the assessment perhaps losing access to the data because of the negotiations

on going with fees' work plans. bp, at the same time, hired army attorneys of marketing firms, puerto rico campaigns, lobbyists, scientists, consultants and other experts and we have to compete with that. so the states to cut the federal government does come and as long as we are not providing access to the funds needed to truly put up a strong case for the public, perhaps it provides a situation where the public resource from the public trust is not properly represented and that equation needs to be entirely flipped over. three other quick points. i think it's important the question and i know senator sessions you have an extensive legal the crowd. one other situation do you have where the defense is allowed to govern or rein in the plant is in terms of the activities they carry out to exercise the funding, exercise the governance of the funding? i don't know of any other scenario.

the process does take too long as has been noted, senator better yet final legislation for the down payment. i think that's critical. our citizens have already been victimized, the economy victimized and allowing the ten or 15 your process for the recovery of the ecosystem and those natural resources is unacceptable, and for the statutory content to allow for that i think that that needs to be revisited. we need to have accurate science. mr. chairman and based recovery upon that, but at the same time, we can't allow these resources to sit in the state for decades. it's on excusable to the public. the last statement i know this committee has jurisdiction on the clean water act. i represent the states and singing we strongly support the recommendation of the natural commission. the victory and others have recommended the funds be returned to the gulf states for environmental uses. i don't think it's appropriate for the government to profit from the loss in the gulf coast. thank you. >> thank you very much for your

>> thank you, chairman carvin, ranking member sessions, members of the subcommittee, for the opportunity to speak today. thank you, senator sessions for the most gracious introduction. i won't bore you with the statistics for the significance and size of this bill which we all know too well suffice it to say it was unprecedented. it has impacted five states along the gulf coast and the gulf of mexico itself which is one of the united states greatest resources. impact to the gulf and put commercially important aquatic life and endangered or threatened species of turtles and marine mammals, habitat use, migration patterns and the erosion and most significantly the loss of use of the resources. the gulf is an essential habitat for countless species of fish and shellfish contains numerous species of marine mammals many of which are protected or endangered. turtles, marshes that provide

feeding and nesting habitat for offshore, near shore and marsh birds and the presence of oil in these habitats may lead to decreased habitat use in the area alter's migration patterns come altered food availability and disrupted lifecycles. they may also cause plants to die, routes to stabilize the soil and thus lead to erosion. and this is not to mention the loss of use of these resources which for alabama like many of the other states along the gulf coast is a significant factor. travel related expenditures and just one of the counties has been reduced by $500 million as a result of the impact of the oil spill. commercial c2 landings as senator sessions pointed out are down 50% from 2,009. the response to this bill from the natural resource perspective has also been unprecedented. the nrda trustees secured a billion dollars from bp for early restoration projects in the gulf. the fact that the trustees and

the responsible party has even attempted to address early restoration of the magnitude is extraordinary. the early restoration alone is larger than the entire restoration process for the exxon valdez spill. under the framework for the early restoration, each trusty, the five states and the department of interior will select and implement $100 million in projects with the remaining $300 million used for projects selected by noah and the departments of interior for the proposals submitted by the state trustees. this agreement would not have been possible without the combined and concerted efforts of all of the trustees working together. with so many resources and agencies involved in this daunting but incredibly important task it's essential to ensure continuing cooperation and coordination to guarantee that restoration of the natural resources is carried out the benefit of all both from an early restoration perspective and from the long term benefit

of the gulf as a whole. in order to manage the early restoration process these and continue the assessment that's been ongoing for some time, the trustee council has formed an executive committee. the committee is made up of representatives from each of the trustees. we've also created subcommittees dedicated to specific tasks as part of our charge. each of which is represented by -- each of which is chaired by the representative of the trustees. the executive committees and the committees themselves will work together to make sure that each trustee is represented in an equal and balanced manner to ensure the premiere goals are achieved. the resources and process and early restoration project selection present many challenges given the magnitude of this disaster, its widespread impact and the number of parties involved. each state was impacted differently and ought of unique priorities for the needed restoration as me each federal agency. even within a state or agency

there will be different approaches and ideas about how to meet these needs and achieve these goals. after all, restoration on this scale has never been done before. all of the different perspectives and ideas have the potential to lead to many disagreements over how best to assess the damages sustained and to spend the funds to restore the natural resources. ..

in fairness for the common good about what we will be challenged to eliminate disputes based on boundaries and maintain focus on the ultimate goal of restoring the gulf of mexico's natural resources and hope the possible hearty response of. but we have created an experienced a president to allow us to accomplish it that. from the beginning of this disaster is essential to federal government work together to respond the cleanup process if we could. we begin the monumental task of the fence teenagers to her need for cooperation became pronounced than we have done just that. obtaining a billion dollars for the rest duration projects that standards were ability to tackle obstacles and 6894. the cooperation between both sides take this unprecedented cooperation and support between the states and federal agents these is likewise an unprecedented in the meet continues. we simply must remain united against the response will party

to see that the damages caused by this or are indeed correct been restored. the communication and cooperation has been continuously collect for the restoration projects. the full extent of damages to the resources is not yet known all agree there must be a nexus between that was built in the projected in the project. cooperation is not only necessary for the selection of the hijacked, but implementation is slow. it might to report the processes going well. we challenged ourselves to family demanded timeline. our plan is selected in the national center the restoration project in july of this year. even assuming restoration project you select it, negotiated and implemented, decide to process will continue to determine the full extent of resources and our long-term restoration plan. as far as i said must

bastardization of this success. we have secured an historic sum of money with the mayor of the tragedy which created the ss and the monumental task continues as to what will undoubtedly result in the most widespread and thorough analysis of a significantly large doses to assess ever been attempted. although this is unprecedented. we rest assured the success was to continue such cooperation between the federal government and olives the luxury. everything that made this process will create a president by which cooperative efforts will be possible. >> thank you, mr. shattuck. since i'll be sharing a major blow therefore by definition be her till the end. modern not exist, but my

distinguished ranking member to make question and will allow you to to precede. >> thank you. mr. chairman, we done this before the judiciary subcommittee unit participated in its ranking on shared. mr. shattuck, thank you for your comment. i am pleased to see the emphasis on collaboration and cooperation and openness in the process. the only flipside of that claim is somebody in charge and can we make sure it happens on time? the party selected projects that would commence before the year's outcome is that correct quick >> were in the process of projects. we hope to have been selected by the end of july to be an demented before the end of the year. the mac in ed trustees, do they vote individually? affect how the decisions are made? >> yes, sir.

each trustee, one from each state, one for a noaa and the department of interior noaa and the department of interior noaa and the department of interior. we'll move forward with negotiating with assets for those projects. >> a fundamental question on the fed to process, to what extent do you can to do the trustees -- to what extent do you consider that the process to make the region entirely whole or is it just a part of a aquatic >> it is just a part unfortunately. it addresses only damages to our national grease versus and that's a fun. the damages of alabama houses income of her example, are much greater than that though many damages be sustained or tag to allow for national grease versus a loss of use of natural grease versus a visit to process this address economic losses for

individuals, businesses are the data itself. do not i know governor mavis was very clear on that in his report, which is really dealing, i suppose, more with the oil spill i cannot damages but eventually had to be paid under the oil spill act, the team noted this section outlines a proposal for congress to create any new off coast under the act and which would work to facilitate environmental restoration and economic recovery and attempt to the health issues the. is that what you understand? that will be the next project that can be going on in contemporaneously with this project. be my guest, sir. we hope congress will come later

giving the state says mr. graves pointed out some 80% of the funds in my soul ultimately be assessed to address all of the losses, whether environmental or economic. in fact there has been some language of the legislation i've seen proposed giving states a certain proportion might date. most of the money icing on the legislation will be based on overall process. is that what the legislation say . >> this accident should not have happened. i feel very strongly that the responsible party no matter where the subcontract to her were responsible for damages and

they are responsible to the last dollar of their corporate existence as far as i can turn. i think they've moved forward in this $1 billion they think were not legally required to produce this in. is that correct? >> i thought that was a positive step on their behalf. i sustained an unprecedented damage insides that this will end i would know that i am very unhappy that there is not the kind of capping mechanism already can start date, that you would not be welcome in the would have had to shut this thing off shortly to happen. mr. radley on the part of the commission, mr. rifkin, was that the commission usurp done with

mr. riley? will come me testify. month or so ago that there now has been designed a cat that can be put up over any blowout late day sun that would any matter be be able to capture that. is that your understanding? >> yes, that's correct. there are two industry groups that develop that capacity. and if you remember the controversies over the permit for reoffending the deepwater chilling, a large part of the demonstration to meet these requirements was to demonstrate that they have this deep water containment capability. selected those two groups develop that they have the capacity of side effect. take the assessment was at that

point granite but permitting. >> that had the capacity. we have 90 we have 90 a, almost 90 days the pouring the really thing most concerning. mr. chairman, i do think they've learned a tremendous amount from this process. the united states is benefited dramatically and production of oil gas from the polls. any the oil and gas for our economy, jobs and growth. i hope that we will be able to continue it. we have learned from how to remediate me think we've learned how to use top if it ever were to happen again and frankly should not have happened the

first time. but i do believe we have the capability now to shut it off. hopefully the gulf coast area is ready to go forward in the future. we want to fix their economic problems that have been severe and will want to look at this as a not virginity as they know you share nfs meant, a baseline and future projection for a more environmentally positive environment on our coast. thank you for participating in allowing me to participate in this hearing. >> thank you messenger sessions. >> really think learned a lot from this incident from the status of our baseline research along our coasts and oceans. senator victor was very eloquent

and violet on the subject of how far behind we are in the stock assessment and how dated most of those are in areas in which coastal flooding and weather event and increasing social novels and all of that arafat and what can happen along the shores and to develop -- development capacity when these to be taken we seem to be way behind on later such studies. her physical oceanography we seem to be -- have a far from robust baseline in terms of current and temperatures. if we are going to address the issues we face the longer it goes, how much do we need to improve our baseline and awareness of what is going on

out there and what are the best methods to do it? upper right across the table. this is a generic question. dr. boesch. >> i couldn't agree kumar. we need better information batter ocean to make good decisions about it. since the commission did focus on the goals, i make just a few comments. first of all, we were shocked to see that it industry moved into deepwater over the last 20 years, really quite spectacular new technology. it was not the investment where government and understanding that environment. so at a time this is taking place, the investment in studies of the gulf of mexico environment were actually declining. to redress that, we recommend not only for oil and gas development, but for all kinds of energy developments around our coast, whether it's oil and gas in the alaskan arctic or

wind power in the atlantic, we should have a capacitor capacity since we were just talking about energy issues to understand the environment. so our recommendation is that there should be a really modest fee if you will, recognizing the federal deficit problem to the industry, much like it would have a severance would pay for appropriate regulation in this daddies to support that going forward so you would have a project will support base to sustain those studies. one final a nasty note senator whitehouse, there is a great interesting move around our country to create a notion of serving as them where stemware became continuous use modern technologies, monitor the state of the ocean. if any part of our national ocean needs observing system, if the gulf of mexico with great economic engine in oil and gas

production, fishing, and again we have reached thursday with an industry in the infrastructure, all the platforms that exist to have a first rate, innovative observing system though office decisions going over. >> thank you,.jerry. with respect to the adequacy of our current research-based and much you'd recommend. >> well, i think dr. boozman has spoken eloquently. i'll branch out a little further from there. the lack of ability to understand not only conditions as they stand today, but also the processes that evolved over decades is a real hindrance to our ability to make decisions, whether it is the decline of the winter flounder in rhode island or the increase in diseases that humans get their pc in the wild

dolphins in florida we have very little ability to go back and understand what the causes of those features are. when you compare this to whether, we understand how much changing weather influences the economy, but i think we have it realized how much that lack of knowledge and lack of big ability about the oceans affects our competitiveness, ability to use resources wisely and our ability to prepare for the changes will see in the future. so, it is a need for baseline. if the need for understanding evolving processes as well. >> i will follow up on these questions with the remaining witnesses, but my questioning

time at this point has expired and our chairman has returned, so i will yield to the chairman and perhaps the chairman would give us another round afterwards so we can can tinea this line of inquiry. >> let me thank senator whitehouse. i apologize for having to leave. we have this gem: nomination on the floor of the judiciary committee. so i added to that debate a little bit on the floor. i want to continue on the baseline issue, but i would like to get a few from mr. graves and mr. shattuck s. two what are you believe there are adequate resources available to u.s. trustees to get the type of independent technical support to make the type of ss men that we have confidence that the best

they possibly can. the baseline at the very difficult challenge. no one denies that. but having resources available to get the independent type of verification review and technical assistance to me with the very important. deeply trustees have adequate resources here? >> well, there's never enough research is just to be honest, but i think that -- i don't think we've been impacted are the process has suffered in a dutch mental way at this point and part of that is the economic incentive bp has to see this process is funded, which sounds counterintuitive, but i think vp wisely has determined that this they do not fund it at this point, they are going to pay for it in one run in a cost even more. so as long as we have the

economic incentive, we both benefit in a way because studies are done. but who knows. we aren't finished yet and it could be at some point we are hampered by lack of resources if bp decides to cut them off. our state of alabama has strapped financially. are in dire financial straits and we don't have the capacity to sponsors studies at the gulf of mexico area and resources we have on there is simply not fair. >> mr. chairman, i would say i think our resource issues, and just the layout under the current statutory confines for how this work if we wanted to assess the impact on redfish in the gulf of mexico, we have to develop the work plan for how the assessment would be conduct it and go present at two p. p. and then there's the negotiation process. i'll embellish this to get in a

tearful 50 go through. during the negotiation we can say we don't like the area you've chosen. you ought to go to west texas. they say well, if you want the money, you need to do it unless texas. so you're in a very difficult situation because of the box i try to describe her they were mr. shattuck discarded there's a billion dollars cap on it will spill liability trust fund were close to hitting and so bp is the only funding source. if you want access to those dollars, you have had the negotiation and i have to agree to fund it. >> doctor trained doctor trained to come it seems your come it seems your recommendations for do with that by suggesting meanies to be this independent scientific auditor available to verify that in fact we are using independent judgment here. elaborate on that and whether you think we are implementing a

recommendation. >> i think having such independent assessment is valuable for a number of reasons. first of all for the public confidence that everything is being done all the way around. secondly, as we begin the restoration effort, there is going to be a requirement to make sure it's mr. shattuck indicated that this nexus between the damage restoration to the degree possible is there and that is -- having the independent evaluated and judged as importuning because a matching message indicated their feisty speech with her independent -- their unique problems and it purchased a restoration of sign. the end of the day they have to meet that standard. so that's.com it becomes a problem is we want to court the adjudication of this, not only

between trustee and responsible party, but by third parties who make hypothetically coming in a well, the money bp gave you was that used to redress this damage. it is used for some other way, so it should be counted again the amount bp is responsible. fraught this reason, the most important reason is to make sure what we do with restoration this affect you this week be. that independent evaluation is important. you asked the question to the agencies and they do have lots of technical experts. of course the technical experts work for people within the agencies. having someone independent, a group in the pen as real value and accountability to the process. >> are just absurd this is a similar issue that came up at our first hearing that the process of self has an inherent conflict because the funding

source and the desire quite frankly to have a cooperative relationship with her responsible party. he can save time and save uncertainty and get existing. on the other hand you need to have the independence to move in directions you think you need to. mr. graves can you raise a very important to us to the selection of this site is critical to the assessment. so i'm not sure we've quite cut me a. i think there is a real commit it on behalf of trustees to get independent scientific information that the funding sources and processes of his challenging and you don't have the adequate design of permission, it's hard to make an accurate assessment. i think dr. rifkin come you're provided with substantial upon technology new click to see ba is at least using the information you've made

available and i hope you will be successful will be able to get an accurate assessment of the current image. have you had any further indications from bpa? >> first of all, i'd like to see the methodology where he is and was developed by the usgs agreed to kick out and has been used by agencies for many years. but this is a uniquely scientists came up with recently. it is however not being used as part of this have to process. epa has acknowledged the value in using these devices. since everyone is talking about sending, it's difficult to obtain funding, either from bpa or noaa or other organizations that were in a position that would have limited data which will be much to kate at insignificant. what is current they been used in this have to process and very significant and attempting to quantify chronic damages in the

fault. but again, very limited on what we can do because of lack of funding. >> senator sessions. >> thank you, mr. chairman. i appreciate the opportunity and i don't think i have another round of questions. i believe it was an excellent panel. it is indeed an excellent panel. we are beginning to have a congressional response to the damage the gold at 15. we work our way through that, hopefully sooner rather than later in a thank you for the leadership. senator boxer, are chairman of the full committee has also given a good bit of her time and attention and her leadership can help us lead to a successful conclusion. >> i concur the. i think it is focused from the beginning and try to get the right and down into nevada's quickly and completely as we can. senator boxer has been encouraging to set committee

chair to move forward on the issues. another white house is >> i want to give remaining but stitching to answer my earlier question which had to do with what i perceive to be the inadequacy of the baseline research and if you agree that is a problem, what can we be doing nationally to improve it. it can, not just specific to the calls come up including the coast. >> first, the question if i'm not and it is a difficult, complicated issue. a sign for an attack such as sarasota bay is different than the baseline currently on parts of the coast of louisiana and alabama because the previous post. my point of view in order to gain adequate baseline, which is critical, the right information needs to be obtained periodically and monitor periodically so when is periodically so when is comment that baseline is there. it's, the baseline is there. it's too late after the one

today that's about where i was doing. really strange is kind of defense in place for this bill hasn't existed, which in fact is not scientifically useful because that is not the area were going to be looking at. so i think the agent he is responsible for collecting data shares speethree any to continually develop and monitor certain water bodies such as the gulf. if there is an utter disaster this would be available before concerns after this post though. >> thank you, senator. i often pretend to be experts in various fields of my job, but i certainly know the limits of my expertise. if i were asked a question i think one of the first things i would do is e-mail mr. boesch and ask his. if it's okay with you, i prefer to respond in writing.

>> sure. and i am a scientist either, but i think there is a finite. you know, disasters like this give us 2020 hindsight vision in the would've been great to have a better baseline, but we have to work with what we have. and what we learned there would be great to have the work since the baseline study throughout the country just in case something like this happens again. again, i know you will battle it limited research says they reenters assignment islands of how much can we afford to do verse addressing more immediate plans and that is a risky endeavor, one that economics might enforce upon us. >> and clearly a good deal of this research is done at the state level to write in rhode island to be the coastal resource management count votes for instant. and states find their budgets slaughtered. it's hard to imagine this will

improve and the environment in the connect cuts. we need to find new and lasting forces of sending so we are not as ill-informed about the actual status of the ocean and kos and in many respects were flying by and and i appreciate the testimony of other witnesses. the only other points i would like to raise briefly hasn't come up yet and i don't know if it is a problem. there is a concern when you get to a major incident like this and you have a response to the parity that is pretty evident and there's a lot of money at stake, one of the first things they do is go in and buy up all the science, put as many

scientists as they can under contract with whatever it takes to get them and then they can go out which ones they want and the other one they thought about their science more or less. have you seen that a problem then is that the to attend to? think it's a good and mr. graves for that. >> senator, that's the an issue. everything we were interviewing back in may to some of the consultants and other experts, many were conflict without, either by pre-bell contracts are certainly a big rush by the responsible parties to pick those folks up in it is absolutely been an issue. thankfully one of the major areas where it will to recount an agreement with the federal government. but i think it is an issue. >> again, let me thank all of you for your testimony and work in this area. this is a continuing interest to this committee and its oversight

responsibility. you see we've got to get this right. the stakes are very, very high for all of us. it affects our entire country, not just that directly impacted regions. so we've got to get this right. we need to learn from how we handled previous environmental damage areas and we need to make sure that we can justify the process at the end of the day has been in the best interests. one of the encouraging signs, let me just point out the point that you raise, dr. boesch doublet than the long-term issues looks like it is moving forward their sensitivity that the final assessments include monitoring to make sure that we carry a the intended restoration make the. looks like we've made progress since their first hearing on the issue raised immediately that

the ecma for a long time to come it may not be quite as well defined by the time agreements are reached. seems like a sensitivity among trustees to make sure kludged in the long-term solutions. let me again compliment all of you for your work and i look forward to continuing to work with you. but that, the sub committee will stand adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

>> the financial regulations, also known as the dodd-frank act. depew financial reform project in new york university's cohosted a daylong conference on monday, focusing on the limitation and the impact of the legislation. this part of the conference, we'll hear from former inspector general of the troubled asset relief programs, neil he discusses tarpon lessons learned from the recent financial crisis. this is 45 minutes. up next on c-span 2 -- >> have a conversation between myself and our cast this

afternoon, neil barofsky is a a professor at new york university school of thought.la for a special inspector of the c tire, which i think is prettyan unusual.n i think any otherh person who hs an acronym for the title i can think of was produced. he's the university of watsonnd alarm graduated from new york law school in 1995. i can't believe that.ha is that right?? during his time at heart, with one of 18 criminal conditions is about 90% of the criminal convictions fun out of this crisis in the stories we nowknow comment anyone i don't know otherwise is made. they are in company.

[inaudible] >> i'm good at improvising. a good place to start would be to ask you which her grief was and that top, were yout.a.r.p.. responsible for overseeing wher the dollars flowed or the policy are both quick >> with a broad mandate.aso when congress enacted thechav economic stabilization act which gave authority to spend taxpayee money or are 700 billion in taxpayers' money to bail out the financial institutions, it is a part of the legislative compromise a number of different oversight bodies were created. one of them the one placed on the executive branch was the office of the special inspector general for the troubled asset relief program, sigtarp to that unfortunate acronym i went by for about two and a half years, and the mandate congress gave was abroad. it created two different

missions. the first was all enforcement. we became the country's newest created law enforcement agency. and we had full law enforcement powers, guns, badgers come search warrants, jackets, we arrested people, like a mini fbi for t.a.r.p. and t.a.r.p. related crime we were given jurisdiction which is primarily the reason i think i was so ready for the job as someone had a background as being a federal prosecutor. the second part of the mandate was brought and was just a generalized oversight transparency reporting function, so specifically we were given the authority to audit all things that happened under t.a.r.p. and reaction taken by treasury, but also the responsibility is to be tell everything that was going on at t.a.r.p., everything going on at sigtarp, all the different programs, the alphabet soup of acronyms and the different sub programs as well as the requirements to go back and look

of the decisions we made and make recommendations say they were good, say they were bad and what we should do going forward, so it is almost a congressional race sanctioned monday morning quarterback role the was part of the agency, so that is how we operate on those fronts. we were a brand deutsch agency that didn't exist before i was one in on december 15th, 2008, and we build an agency around the functions to carry out their role. >> when you look back on the crisis and what is managed using the resources, are there anything that stands out as having been particularly good about the supply whether or not let's say lessons to be learned? >> it's sort of like anything. in washington there is this incredible political rush to put labels on whether something was successful or unsuccessful. you'll hear the officials tell you that was the single most

successful program in the history of america and to busheir opponents in congress talk about how it was the worst thing that under heaven and of course the truth, the accuracy lies in between, and i think to pierce the political malaise that is around t.a.r.p. and there is a tremendous amount of political malaise, you have to look a what was the progress appears to, what was the intent of congress and what was the original intent of treasury and the many programs? .. long-term consequences on the short-term goal of helping to pull us the financial armageddon there is some degree of success.

other part is more of a main street were after failures. for example, when the program fm shifted from what it was originally opposed to be to good and buy troubled assets into the capitalizing the bank came at the promises going to restore and increase funding. this may have been unrealistic,e but nonetheless does those data policy.d and coinues we continue to contract will have two largest banks were left out.ended wit >> why was it extended to bankst is that many physicians clinics are impressions sunday seeking to, but without bias quick >> it depends that the policy goal is. the stated policy goal was not toju prevent financialon. it w immigration. he was to get banks to take car.

of funds and restore than dean or increase in dean and the lac, ofg strings attached release sealed theea strength funds. so it would necessarily have to be a requirement. the t.a.r.p. finds. by the quake, x percent of small businesses and 8 percent of families. very -- not necessarily a helpful policy mechanism, but could have been done through incentives. so for example, the t.a.r.p. shares that treasury bond was a 5% dividend payment. there could have been 8-cent -- incentives built around those payments. by increasing lending over a baseline it would turn the bank a better dividend. that's just one example.

the second problem was the lack of transparency. again, this policy goal was set, but when i came to office, literally a week after i got there and made the recommendation that there be some mechanisms of the bank could report how they're using funds so we could measure and see whether this policy goal was being carried out with a lack of policy mechanism so that we could adjust it. it was utterly rejected. i was told that i was out of my mind, going to destroy the country, destroy the banking system. neither the first or last time i was told that. but there was this lack of accountability. there was a sense of we will measure it later. [inaudible] >> i think so. if your going to have a policy goal and state your credibility on that policy goal which is what treasury did, the treasury

came out and said, listen, the reason we are shifting gears and we won't be buying troubled assets, which was very important for the legislative compromise that got this bill passed, not to say that what they did wasn't fully authorized. it was. they had to have a justification, and it was to increase or restore lending. the policy mechanism, one, you have to have the mechanisms were, too, you need to be a little more careful about what your policy justification is for the change of behavior. >> t.a.r.p. was an incredibly important background fact. dot-franc was passing through the legislative machine. how do you think it influence things? >> well, i think ultimately not as much as it should have. and i hear the statements that we have heard a number of times dodd-frank had its heart in the right place, and i think he did.

count me among those that overall it made things in some ways less dangerous. ultimately this was sold, again, let me go back to the justification as to be the end of their era of bank bailouts. never again will we have to bail out a financial institution. because of the deep unpopularity with t.a.r.p. and in some ways a very justified and popularity, the core goal, it really hasn't had the legislative courage to accomplish that. in many ways it took in deferred the really hard and difficult decisions and pushed that out to the regulators. even if they have their hearts in the right place, something that was said earlier today, the regulatory but also the political will to do what would be necessary to truly rain in the implicit guarantee for the largest financial restitutions. i think that is extremely unlikely.

>> that is depressing. [inaudible conversations] >> we were talking earlier. there was a lot of resistance to the transparency of the treasury. what you just said about having a policy goal and try and measure it. that's the kind of transparency that they try to avoid if they can. why do you think in the treasury case transparency was such a big issue? >> well, and generally there is a reflexive antipathy towards transparency among the regulators. you know, you solve it not just the treasury, but at the federal rese

vice chair of the federal reserve for suggested that disclosing identities of the i.t. counterparties of course the facility were reserved or choose what the underlying cds on the credit default swaps, i'm the real ones, not embedded jag had written. this is so victories he opposed, months after the fact on the ground there with destroyed ahg in the economy and ultimately the information was disclosed and nothing happened. what happened is needed to create accountability. we could go back and look at decisions made in connection with the bailouts and at times it wasn't pleasant.

it is in some ways conveyors being some of the ways that is connected. but it didn't cause any long-term damage to the economy, nor did my eventual today -- they went in. that being and ask them how they used t.a.r.p. funds and the similarly told point link when i was going to destroy the t.a.r.p. program and perhaps as a result destroy the banking problem. of course that didn't happen. any financials dictation for free to give a qualitative and quantitative discipline variable to do and give the statistics on monday probably shouldn't be recipient to permit capital. so i hope the lesson that will be learned, whether it's forced down their throat to a certain extent from train to work by the

courts in the bloomberg case, the lesson will be there with the thing that all trains paint these bad. again, this is something i think we made headway over the years. the 13 on every word in the conversation by the time i left on what i would be able to include and disclose in the last on an elite group, tremendously less of a battle to get that information out in me think when pressed, there're times of course the disclosure can be problematic, particularly real-time disclosure in distress. but i think that cooling off period is shorter than anticipated and the general evolve in a supervisory role up et cetera you regulator and should be off-limits. hopefully with a fight counted it. >> i don't remember quite you

started. the bailouts started before u. of i only said after? >> it's actually funny. the day was sworn in, november 15, 2008 by secretary paulson and most of my professional crew is federal prosecutor. most of my interaction was investigating bank fraud in two derivatives are you. but not the other industry other than i happened to go into 95 chevy convertible, which was to. as i sat there is secretary paulson, were thinking about doing up the auto industry. what do you think? to think i mentioned my khmer with being a little out of balance. i was mean that they cannot do. in the decision-making processes on the way. >> did that worry you?

>> i think at the time, the first question from my perspective it's okay, i have this new job, a staff in a basement office in the treasury of person who can reach. patton is stationary, but i have a computer. so person a look at the statute and see if this is the go. first it seemed like how could t.a.r.p. be used to invest in a manufacturing company. what we saw, which was crazy to su me was that we t.a.r.p. was a 1n as he said before results to congress and many members ofblef buying troubledal financial asse mortgages and mortgage-backes d security. it wasas written in a way so remarkably broad the money coulo use to embarrass in many mpan regulated come to mean the need to essentially. so we really did the first check. we didn't think it is going to be illegal and then went to work unsorted roderick antifraud recommendation rather than anything else.

so that then now is the initial loan made by the treasury department to keep them afloat for the viability determination. >> when you're reviewing the statutory language, did that mak make you very, very broad,rtable comfortable with the kind ofnd bait and switch at the treasury is being accused of the toxic bailing out institutions? asn' asset really a bait and switch. i think that would be unfair if for no other reason than congress voted. i think a lot of members of congress didn't realize what they were voting for, but members of congress did. this was something that from the congressional leaders new and anticipated, even members of the caucus did not that there was going to be a shift in focus. so essentially, while i have some sympathy for those members of congress, more from a perspective not necessarily that

i voted for the huge bailout of the auto industry, but more from the perspective of where i think there really is a potential acquisition of a bait and switch was the process involving the foreclosure crisis accounting because those members of the caucus, particularly the democratic caucus and the cbc, their vote for tart was really conditioned on the idea of the purchase of toxic assets because the promise that was made that once treasury atoned $700 billion worth of mortgages and mortgage-backed security as the investor, as having the principal interest in those loans and mortgages, the promise was that treasury would then modify those mortgages. the concern from members of congress, and their constituents who were really feeling the ravages of the foreclosure crisis in may 2008, and that think that is where you have the biggest sense of the trail because once that switched from

buying mortgages that could be modified by the government to equity investments, investments in on companies, there was the feeling that poll, that policy goal, and going back to your first question, did t.a.r.p. work, that is one of the most significant fundamental main street failures of t.a.r.p. >> why don't we open it up? questions? do i see -- i'll ask one more before we -- to give people a chance to think of something provocative. you have been listening to a presentation here today. how comfortable are you given your experience with t.a.r.p. and thinking about dodd-frank that we are on the right road. i'm not sure it shadow banking has been a proper frame.

we have an idea of what we expect to happen that is robust. >> i think that when you look at the mechanisms of dodd-frank and see some of the people speaking here today, you are certainly start that they are remarkably thoughtful, intelligent. you know, in some ways deeply patriotic people. some of them have left a far higher paying jobs in the private sector in order to work on this project. it gives you a sense, a good feeling. but ultimately it is one of the failings of dodd-frank and one of the concerns i have. even the overall too big to fail, ultimately whatever work they do is going to depend on the political process. and i think dodd-frank, it politicizes the approach of weather dealing with capital and dealing with the local rule, all of these things that in certain

ways, this morning, more rule based approach, being left not just to the discretion of these regulators, but as their a prism of the political pressures and ultimately the decision maker for all of these decisions, the person who is invested with the most power over what happens is the secretary of the treasury. that is a political person. that political decision is going to be through the prism of whatever is going on in the political process with the administration with the next election. i just don't think we have seen that type of political commitment and the type of significant change. he posed a question earlier about should we be worried about the concentration of our financial system because it is in as bad as europe, he was quoting secretary gunnar.

i certainly agree with our speaker, that is an awful analogy, a terrible call. why should that be the standard for the united states of america. that is the person who is ultimately going to be responsible for making the really tough decision. >> coming your way. >> back to the original. back to the original decision to bridge the mechanism. and could it have been the original idea. it was going to be complicated

to figure out. and it was my impression at the time that the very reason, people understand how to do it. but with the first approach have been feasible? with the blessings of hindsight would it have been better to do that? the fallout from not doing it was, you know, enormous. >> look. certain aspects, it's my job to second-guess and use that hindsight. i have never been critical of the decision to use capital investments. it was authorized under the statute. buying toxic assets at that point in time at that depth of the crisis could not have worked. there wasn't time. it would have had unintended consequences for the financial institution. that was not -- at that point that was not a viable

alternative, and i think the capitol injections in the capital purchase program was instrumental in avoiding a collapse. i do think, where i think there was a material was that promise t.a.r.p. would be used not just of rescued of wall street banks. absolutely a benefit for main street. i don't mean to minimize that, but the second part of the legislative process with got the votes to pass was meaningfully addressing the foreclosure crisis through mortgage modification. that promise was shelled in october. understandably show. a ultimately it was abandoned until the administration in s bn,ary o09 anned andexecut .. in my view, an abject failure. could they have done a better mortgage modification program? i think they could have from the beginning. throughout the process, and take it today. i think if you want to up --

don't take my word for it, take the secretary's work for it. talking about the home affordable modification program that was announced in february and nine with the intent to help up to 4 million american families stay in their homes through sustainable permanent modifications with t.a.r.p. funds. the secretary recently testified that -- really acre the criticisms i have had for more than a year. it is an incentive base system, and the incentives were not powerful enough. being run by the mortgage servicers. unfortunately middleton nothing has been done to address those problems even though not just me, but the congressional oversight panel and many others identified this problem early on. [inaudible question]

>> if you key individuals. the foreign exchange are likely going to be exempted from the clearing requirements. it was a decision that was left in the power of the treasury secretary. that seemed fine. i was actually hopeful that there would be a report or study on the basis of which this exemption was provided, but i think nothing was done. i wanted to come back to your last point. even today it is possible potentially for significant mortgage modification. do you think something like this might happen? the household the leveraging cycle has really started. >> i think what we did is, i think that, you know, we took the worst path possible. you know, one suggestion is we

should have done nothing and let us find the bottom on housing as quickly as possible. i hope it wouldn't drag along they're too often recover. or we could really commit the resources and try and make a program that would have an impact. i mean what the president proposed and promised, sustainable modification program, not act kick the can down the road program where you are just sort of the stretching it out, and that is where we are. we are in the definition of kick the can down the road. a program that took 800,000 people, give them false up and put them in a program they never had any chance of succeeding in and flushed them out for 600,000 to have some benefit through modification, but that is the proverbial drop in the ocean. we essentially sanctioned this process and not recognizing the losses for these mortgages that are either in default are heading toward default, encouraging some sort of

industry practices that the stand. at one moment, and i think it was reported in the post. there was one moment of real honesty and clarity at some meeting. i think it was the secretary, various blockers on the internet. the idea was, the idea why this program was successful is extending the foreclosure crisis. the land that was floated. they trashed the idea. but that may be the only thing that this program has really done to any extent effectively, stretch this process out. >> three questions. >> dennis. i first want to say thank you because i don't think anybody will ever know the enormous pressure you were put under. very few individuals and government were put under the pressure you were under. i was on the hill at the time. very few individuals in our history would not have cracked

under that pressure. it's incredible time and time again, and each time you finally get to the next step. double the pressure. quite an amazing feat. the way to understand the accomplishment is to be reminded. i remember the day when the three page bill was sent up from treasury which was, of course, the first drafting of the bill which had complete blanket immunity from anybody for anything that they did in connection with the program that became t.a.r.p. and legally prohibited oversight and accountability. what happened in the legislative process and many parts of that process are dead. one of the good things that happened is in exchange for allowing tart with you and some other oversight mechanisms. one of the key things people understood is you had to have real independence. some three pages to significantly more than three pages. no accountability, complete

immunity. i don't know. it wasn't in there. so i think that the context, the whole program has to be understood in that context. and just very briefly for the historical record to be accurate, there are many members of the congress did not believe the purpose to the purchase of toxic assets would ever work, work fast enough. we forced it on the administration to allow capital injections. in the hearings on this bill the administration said no, never. the world will end. everything else. congress forced the provision in there and forced the executive to have the authority and ability to make capital injections. i only and a slight modification to your comment on why people felt they switched. it wasn't just for closure. there was an expectation that there would be some criteria and consequence and connection with the money going into the banks. the only time they got religion on putting terms on the money

was when they could-the auto companies. they didn't apply any of those strange and, really stringent, put your hands in the middle and capitalism requirements on the banks, not one. i think that was the other part. money for nothing and money under strict terms for everybody else. i agree completely with the foreclosure issue in the back and never had a hard to do it. >> thank you for coming. when you look at that the economy is born from two things. one is, they really were afraid that banks weren't going to participate. looking back on it that seems almost laughable. frankly, at the time i thought it was laughable, but that does not make their sincerity any less. they really did believe that putting on stronger conditions would drive it out. notwithstanding the remarkable response that they got. they were prepared. they were prepared to actually

direct them to do so. they didn't have to. the reaction was from all but one, capital in the middle of a crisis. of course were going to take it. part of it was almost a navy about banks and about what they had done. i think -- for me i came out of this probably from the exact opposite viewpoint. my entire interaction with banks were either i was the victim of the perpetrator, particularly perpetrator. it was really one of the reasons why was brought in. i view my role initially and particularly as being an antifraud guy. i cannot tell you how many times we would be having a discussion about this programmer that program and get the response, no, you don't understand these are banks. they would never risk their reputation by giving something like this. and this was a constant argument. i think it was around six or

seven months and when i finally said at a meeting, please, don't ever say that to me again because it's not going to work. you're talking about shaming the shameless, especially what just happened in the lead to the crisis, but i think that represents a couple of things. it's one of the reason there was this trust. i think sometimes when you see some of the anchor that comes out, it's almost like the treasury department and perhaps even the white house, a sense of pictorial -- the trail that the banks didn't put their policy goals in front of what you would want. >> yes. i had a question about your enforcement activities. presumably you dealt with banks and institutions. how they were using it. a lot of discussion about the show banking community. a lot of the story of this particular crisis traces back to underwriting standards which in

many ways were outsourced to nonbanking entities. potentially i assume there was fraud at those levels. stories that kind of bubble up around that. their efforts, did you ever get an opportunity to go beyond those institutions and the relationships they had and how far down that went in the whole web? did you feel that was -- in some sense we just didn't have the fed doing what they should have done. the oversight in that arena, did you have that mandate? did you follow the thread? did you learn anything interesting? >> unfortunately, this is the material for me, under a toxic asset purchase program, that would have given as criminal authority to investigate all the way down. we would be buying these mortgage-backed securities and therefore as a potential victim for underlying fraud related to

securities, but we didn't do that. as i said, one of the reasons why i was hired was not because of my auditing skills. it was because i spent eight years during mortgage fraud and securities fraud investigation and prosecution. so that would have been an opportunity. it pretty would have been an upsurge in the for the department of justice to have a specialized law enforcement entity or group that looks at financial crisis related crimes. for us the way t.a.r.p. was structured it fell outside of our jurisdiction. unless there was an attempt to capitalize on the t.a.r.p. program now, the need was outside of our criminal jurisdiction. so other than that we really didn't have an option. even for the nine largest financial institutions, although a lot of our investigations are based on misrepresentations made to treasury in order to try to get t.a.r.p. funds, for the

first nine banks it didn't matter if they were cooking the books on the balance sheets. treasury was giving them the money anyhow. if they had even larger holes in their balance sheet because of fraud that would have been only more reason for them to get money because that would have been a pure bailout. so we got rid now in many ways of financial crisis. >> to more questions. perry patient. >> just getting back. tart didn't really deliver for main street. you know, basically that summer treasury secretary paulson, t.a.r.p. became that position. shortly thereafter city and bankamerica needed extenuating support with fdic, deferred, investment. more tart.

fdic reinvesting of assets for a year or so. so just reflect on the terrain changing. so a week, month, it's hard to keep to it. and that is how the original intention to help of main street, come about because the big banks needed so much help. >> well, i think -- of first of all, i think the whole idea of using t.a.r.p. for foreclosure relief, that is not an idea that originated from the treasury department but was something that congress insisted and wrote a section into the statute that dealt with how to modify mortgages. the fact that the terrain changed while it certainly may be an explanation, it's not a justification. this was part of alleges that a

bargain. it's not as if they didn't have enough had run as far as the $700 billion cap. although citi and pfa involved $400 million, from an t.a.r.p. perspective they did it in a quite clever way. this nine or $10 billion of funds that actually would have been accounted against the 700 billion. there certainly was room for it. and, look, i know that during the time of transition the bush administration was working on foreclosure ideas. they knew very well that this was part of the product. ultimately after the election they were asked essentially to stand down by the obama administration same, look, we don't want to inherit your program. and then they did watch out a program and committed and nice chunk. and this was also part of the

alleges that a bargain. the second half of funds. i think it was a move led by barney frank. if you're going to release the other half you're going to need to make a commitment to foreclosure relief. that is where the $50 billion came from. unfortunately only a small fraction, but from a perspective of the original goal, unfortunately only a very small portion will be spent because it is poorly designed and executed. >> we have one last question. >> yes. what do you think if we had done , how do you think that would have turned out? do you think that would have worked better than trying the program? >> the cramdown was fortunately while outside, even more outside than the financial crisis of our jurisdiction. to be honest with you, it was not something that we really

study their work done because it really was outside the scope. i think the concept of principal reduction, not as afraid as many art, including the treasury department. i think not withstanding the potential moral hazard implication that a good principal reduction program could effectively help achieve that goal of affective sustainable mortgage modification. i think that given the moral hazard that t.a.r.p. is exacerbated. a little moral hazard would not be the end of the world. >> so we are where we are. if you had your druthers to you think we could do it just by enforcing dodd-frank well? if so, what are the two or three things we have to get right? >> i think that the two areas -- where we are with dodd-frank as we are not breaking up the largest banks. i think it's probably a lost

cause. you just your everyday as much as the weekend before, it seems like now in the process there is a full frontal assault. so the two areas where i think there is real potential. one, capital. not a perfect solution, but it will, you know, hopefully it is done effectively and there is a significant enough capital surcharge that it will at least hopefully provide more of the necessary cushion and even more importantly, i don't have a problem if it is penalized and somehow on drives them and incentivizes them to become smaller. but the most important area to have any hope whatsoever to deal with too big to fail and address the implicit guarantee. that is the one mechanism that dodd-frank has put a tremendous amount of power and authority. fdic, federal reserve and

treasury really have all white landscape a different things that they can do to make sure that these are resolvable. and that is ultimately the only way at the end of the data you can deal with the implicit guarantee, by convincing the market that the government really needs it, not just from the sense of well throughout the large financial position, but much more importantly, to demonstrate that to fail through one of these processes. and really strong effective use, simplify and if necessary shrink, break up, whenever you want to call it, contingent capital through the living will process. there are lots of food ideas that can be adopted. but -- and here is the big bite. it requires a sense of political will that i think is just not there. you don't need to look any further. sheila bear has been a strong

advocate and has said we will fail our role as advocate is if we don't use a living will provision to us simplify and make these institutions less complex. i have never heard anyone else in washington or any other member strongly echoed those concerns. as we all know, she is gone in a couple of

nominated to lead u.s. forces in afghanistan. at his senate confirmation hearing he discussed the president's plan to drill down 30,000 troops by next september. also at this hearing, vice admiral william has been nominated to head the special

operations command and general james thurmond as commander of u.s. forces in korea. this hearing of the senate armed services committee is two and a half hours. >> good morning of devotee. the committee meets to discuss the three military nominations n for command of some of the most critical and challenging missions facing our nation.ging our witnesses this morning ontnm what is truly a joint panel are general james thurmond, u.s. army nominated to be commander united nations command combined forces command and u.s. forces korea, vice admiral william mcraven, a u.s. navy for the the great of had a model and nominated to be thee

commander u.s. special operations command andcommand lieutenant-general john allen, u.s. marine corps for the c appointment to the greater general nominee to the commander of the nato international istance force and an u.s. forces afghanistan.. thank you all for your years ofu great service to this nation ant your willingness to serve once again.amilies. in what may extend thanks to youro family.andth as the tradition of the committee i will invite each of you to introduce any family members or friends who may be or here with you. general firmans nomination as the next forces in korea comes at a time a significant change and tension on the corrine peninsula

as ever. the strength of that alliance will be particularly important over the next few years as we are embarked on an ambitious realignment of our forces on the peninsula and need to deal with the unpredictable and aggressive behavior of the north korean regime that continues to follow the destructive path of an international pariah. general thurman experience and positions of leadership and with maintaining a well trained, equipped and ready soldiers provide the kind of foundation and professional skills the will be required on the u.s. commander in korea. vice admiral william craven is not need to be the ninth commander of u.s. special forces, u.s. special operations command. he's commanded at every level and special operations community. most recently as commander of

the joint special operations command and served in various staff and interagency positions including the time in the national security council. incoming secretary defense leon panetta has credited him as being the, quote, real commander of the extraordinary operation that killed osama bin laden. add broth mccraven has been nominated at a time of exceptionally high temple growth for special operations forces. as the current commander mccraven willson told the committee since it 9/11, our manpower has roughly doubled, our budget has roughly tripled, and i were overseas deployment has quadrupled. mccraven olson has also indicated the force beginning to show signs of, quote, but trading around the edges. admiral mccraven, the committee looks forward to hearing your thoughts of the stress on special operations, presinal can

be mitigated given the demand for their unique skills. the committee is also interested in your view on the future of special operations and the challenges of the special operations personnel likely to face. will the announced drawdown of forces in afghanistan impact special rations, force is given its special operations forces depend heavily on their counterparts in the general purpose forces for many of the enabling kit devotees that the need to be successful. in addition the committee will be interested in your thoughts on the employment on the range of special operations to devotee against al qaeda and associated groups outside of afghanistan, pakistan and iraq. director leon panetta expressed concerns on the shifting to other places most notably in yemen, somalia, north africa, and i hope he will address what you see as the appropriate role for the special operation forces in those areas.

in announcing lieutenant general allan's nomination, president obama called him, quote, the flight commander to take over the vital mission in afghanistan. if confirmed, the general will have big boots to fill and succeeding general petraeus commander of the 49 member international security assistance force coalition and u.s. forces afghanistan. like general petraeus, general allen brings an in-depth understanding of the complexities of the counterinsurgency effort based on his own experience as the commander in anbar province in iraq. working with the sunni awakening the marines and anbar succeeded in getting local sunni tribal leaders to reject the insurgency and instead support the iraqi government and its the deputy commander at u.s. central

command general ellen has developed a regional perspective on issues affecting the region in afghanistan. he will be the first marine to serve as the top commander in afghanistan. the number one priority will be implementing president obama's decision last week to accelerate the transition of security responsibility to afghan forces and start bringing the u.s. surged forces home. as all land by the president, 10,000 u.s. troops will be withdrawn by the end of this year and the remaining 23,000 u.s. surge forces will be torn down by september of next year. the president's decision to use the president on afghan leaders to assume more and more responsibility for their security. just as the establishment of the date to begin reductions have the effect of creating the sense of urgency on the part of the afghan government to take responsibility for afghanistan security. the assumption of the

responsibility but the afghans is a path to successful mission and a stable montelimar and controlled afghanistan. the president's transition decision was buttressed by the significant gains the coalition had afghan forces part together made in the last year and reclaiming the former taliban stronghold particularly in the south. another major change in the last year is the surge in afghan security forces. there are now 100,000 more afghan security forces than 18 months ago when president obama announced the surge and another 70,000 afghan soldiers and police will be trained and equipped by the end of next summer when all 33,000 u.s. search trips will have withdrawn. in the testimony to congress last week, the chairman of the joint chiefs of staff admiral mollen characterized the

president's decision as, quote, more aggressive and incurring more risk than mcraven had initially recommended. however, admiral mullen felt, could come only the president and the end can really determine the acceptable level of risk we must take because as he put it, quote, the truth is we would have run other kind of risks by keeping more forces in afghanistan longer. and among the other risks for the risks of perpetuating the greater afghan dependent on the forces and inhibiting the growth and keep the devotee and confidence on the part of the afghan forces. the committee will be interested in hearing from the general as to his views of the president's decision to be again, gentlemen, our great thanks and gratitude go to each of you and to your families. senator mccain? >> thank you. let me thank our very

distinguished witnesses who are each nominated for military command that is essential to the security of the nation and our allies, and i want to thank each of them for their years of dedicated service testing for again when called upon to serve when and where the nation needs the most. all of you will help lead a force that has been out war for ten years. we honor the service and sacrifice of our men and women in uniform and pray they will return safely and successful in their missions. general firman, you've been nominated to lead the forces on the korean peninsula at a tense time to read this long-running conflict in a critical time for the alliance in the republic of korea we speech read the general sharp for his leadership over the past few years. the u.s. republic of korea has never been stronger and better. but the situation on the peninsula has rarely been as dangerous as it is today. the transition of power in north

korea has contributed to a series of acts of aggression against our south korean allies. it's clear to me that if there's another such provocation clearly it will not turn the other cheek. this is serious implication for the united states as the treaty allies to the defense of south korea. we remain as committed as ever to our responsibility, and it's for this reason especially in light of the heightened state of alert the increased tensions we need to take a hard look at our current plan for the u.s. force realignment and to the normalization on the korean peninsula. this committee needs a better understanding of this major undertaking. the cost of which are significant and growing. but ultimately what must guide the u.s. defense policy, vis-a-vis the republic of korea is the obligation to insure the mutual security and success. admiral mcraven, what you

achieved in york career is all pretty extraordinary before may 2nd, 2011, but on that day by leading the mission that killed osama bin laden, you and your men won an enduring place in the american military history. so to say that i am confident in your ability to lead the u.s. special operations command is an understatement the admiral wilson has done an exceptional job and i'm confident you will build on this great work. if confirmed. the leader of al qaeda is dead but a new one is taken its place. your mission will be to help ensure that he meets the same end. at the same time, a series of deadly franchisees especially al qaeda and the arabian peninsula continues to threaten security of homeland common interests, friends and allies. we continue planning and synchronizing our global operations and to continue building up the capacity of our partners to defeat our enemies far away from our homeland.

finally, general allan, you have the biggest boots to fill of david petraeus but we know general petraeus personally recommended to and supported you as his successor to lead the mission in afghanistan could i can think of no higher compliment to pay a military officer. the challenge you will face in afghanistan is always going to be significant. but i fear the challenge has only been increased on necessarily by the drawdown of the u.s. forces the president announced last week. i agree we are making amazing progress in afghanistan. the progress is real and it's remarkable but as the commanders on the ground all point out, it's also a fragile and reversible. our commanders also say that next year's fighting season will be decisive. this would be the opportunity to consolidate the gains in southern afghanistan while increasing numbers of u.s. forces shift their main effort

to eastern afghanistan where they are counting the work al qaeda and other militant groups are still present and operating actively. however, under the president's plan which calls for having all of the units out of afghanistan by september but troops will begin flowing out of afghanistan right at the time that the taliban, al qaeda and terrorist allies began to step up operations next spring and summer. at the moment our troops could finish the main objective and begin ending our combat operations in a responsible way, the president now decided to deny them the forces that our commanders believe they need to accomplish their objectives. i hope i am wrong. i hope this decision will not in danger the dreams the troops have made were the decisive progress they still need to make next year, but i am very concerned that the president's

decision poses an unnecessary risk to the progress we have made thus far to the mission and to our men and women in uniform. after all we have given to this mission, the money that we have committed, the decade we have devoted and precious lives we have lost why would we do anything now that puts our mission at a greater risk of failure? by drawing down u.s. forces several months early so they miss the next fighting season, how much additional risks are be incurring and how could it affect the mission? those are just some of the questions we must answer this moment. it's a pleasure to have all of you before the committee today. you all make me proud of america's armed forces and confident about future. thank you. >> thank you, senator mccain. let me now colin our witnesses for their steegmans. general thurman?

>> chairman, senator mccain and other distinguished members of the senate armed service committee, i think you for the opportunity to appear today. i would like to thank the secretary defense and the president for nominating me to be the next commander united nations commander, commander united states republic of korea combined forces command, and commander united states forces korea. if confirmed, i look forward to working closely with this committee as well as our alliance partner of the republic of korea to address deutsch alleges and opportunities we face together on the strategically important corrine peninsula. recognizing that a strong kick united states republic of korea audiences of the most important factors maintaining peace and stability on the korean peninsula and in the region at large, i will come if confirmed, continue to work with my predecessors directed at sustaining strong ties with our

partner. i would also like to thank this committee for the support it has provided the soldiers, sailors, airmen and marines, our department of defense civilians and their families who selflessly serve the nation at home and abroad. is the commander of the army forces command, which is the army's largest organization, all too well aware of the support of this committee has provided and the difference the support has made to the men and women who serve the country in the armed forces. if confirmed i will make every effort to ensure those serving in the republic of korea will receive the best living and training environment there can possibly be provided. if confirmed, i look forward to working with the committee to achieve this. i would also like to thank my wife of over 47 years. she has been negative as increasing our daughters who are

now both married to army officers and bringing up our four grandchildren the also selflessly supported our soldiers and their families. like other military spouses, she is truly an unsung hero and i am blessed to have her love and commitment as i continue to serve the nation. with that i thank the committee for allowing me to appear before you today and i look forward to answering your questions. >> general, thank you so much. admiral mcraven? been a distinguished members of the committee, thank you for letting me the opportunity to be here today. i am deeply honored the president has nominated a team to serve as the next commander. and if confirmed, i promise you that i will work tirelessly to ensure our that it continues to provide the american people the finest special operations forces in the world. joining me today is my wife who has been a constant source of strength to me and said the men and women of the families with whom i have served. i have been extremely lucky to have her by my side of the past

33 years. i have three children as well my oldest son is a captain in the air force, my number to such as completing his ph.d. in california and my daughter is going into her junior year of college. i have been very fortunate to have spent the past 34 years in special operations, and i can tell you from my personal experience, that the decision by the congress to establish the special operations command was the best thing that ever happened. as a result of your efforts and your interest in the wellbeing of the u.s. special operations sailors, airmen, marines and civilians, we have the best trained, best equipped and the most experienced special operations force in the history of the u.s. and possibly the world. the special operations soldiers on parallel contributions to the security of the great nation in iraq, afghanistan and around the world are a direct reflection of the support we have received from the congress over the 24 year history. i want to personally thank you for their support. if confirmed, i will continue to

trade, organized and equipped, deploying and when directed by the secretary defense, employ the force across this conflict. we will tall times be prepared to answer the nation's call with experienced forces his intellect, maturity and kurdish allows them to operate politically and militarily complex environments. men and women who relish challenges and willingly go where the threat to america is at its greatest. however, as good as the force is, i know if confirmed, one of my primary responsibilities will be to ensure the members and their families are well taken care of both physically and emotionally. in his 2011 posture hearing, he noted that as a result of the ten years of the continuous combat, the forces freed the edges. admiral olson and his wife were exceptionally engaged in the welfare of the soldiers and their families particularly the wounded four years and if confirmed, doorjamb and i will follow the lead and put forth every effort to insure the wellbeing of the individuals in

my command and families that support them. it has been my privilege to serve my entire career in special operations and in all those years i've never ceased to be amazed by the courage and sacrifice of the men and women in the special operations. i am humbled to be considered a sign it is their commander. thank you very much, and i stand by for any questions. -- before the damage. general allan? >> senator mccain, distinguished members of the committee, thank you for this opportunity to appear before you today. i am truly honored to be nominated by the president to come and the international security assistance force and the united states forces in afghanistan. i'm grateful to the members of congress, the secretary defense, the chairman of the joint chiefs of staff for their confidence so support and assistance extended to me since my nomination. and of course, i am and have always been humbled by the incredible sacrifice of our service members and their families who've continued to serve the nation despite many

hardships. mr. chairman, at this point i must note the will of this committee and its leadership in providing crucial support to the men and women who have offered a plea served in afghanistan and iraq. thank you for the support. i would like to start by acknowledging and thinking general david petraeus whose surface is a commander of isf has been so essential to generating the progress that we've seen in afghanistan. if confirmed i will seek to emulate his principled resolute leadership and if he is confirmed to be the devotee of the central intelligence agency, i look forward to a very close working relationship with him and the rest of the intelligence community. i would also like to express my admiration for investor eikenberry and his team for their untiring dedication to the mission. if confirmed i look forward to working with my friends come ambassador ryan crocker with whom i served in iraq and the nato's senior representative ambassador simon, to ensure that

our military and civilian efforts are closely synchronized. i would also like to express my profound admiration for all of the partner nations and their forces in afghanistan with 49 nations from all over the globe currently serving in afghanistan and supporting that mission. the scale of the coalition is truly historic. as general petraeus has noted, afghan and i sat forces halted the insurgency momentum and much of the country and reversed it in key areas. based on the work of the deputy commander in the central command numerous visits to fever over the past nine years including last month an extensive discussion with senior military and civilian leaders a share in that assessment. afghan and coalition forces now largely controlled the battle space and strategically important areas such as kabul where one-fifth of the afghan population lives in and around kandahar the spiritual and historic sanctuary of the

taliban and in helmand a former taliban stronghold and many other key areas. meanwhile we continue to exert unprecedented pressure on the insurgency with a variety of efforts in putting degette in local police initiative which is mobilizing communities to defend themselves afghan led efforts to reintegrate former fighters nearly 1900 reintegrated in a variety of governance and develop initiatives focused on establishing the conditions to achieve long-term security. much of this progress has been unable to buy and increasingly led by the afghan national security forces conducting their own surge. they are currently on track to meet the 2011 goal of 305 troops , 3,500 trucks and substantially more and more capable afghan forces would be trained and field over the next year as well. although there are reasons to be cautiously optimistic there are

challenges remaining. insurgence still maintain the full capabilities and the fighting will continue to be intense and some of the areas as the enemy seeks to recover lost territory. the transnational terrorist groups like al qaeda will seek to establish new bases and safe havens in afghanistan and pakistan and corruption and other challenges to good governance will still need to be addressed. still, none of these challenges are insurmountable. as the president announced last week in the front of the west point commitments we will begin the drawdown of the surge forces next month. although i was not a participant in those discussions i support the president's decision and we can accomplish our objectives. comfortable offer my assistance to the chain of command on the current state of the conflict as well as provide options with respect to the president's goal and accomplishing the strategy. even once the security surge forces have been removed there will still be some 68,000 u.s.

troops and thousands of international forces in afghanistan, not to mention some 70,000 more afghan forces which will join the fight in the next 15 months. at the same time the u.s. and nato are both discussing long-term strategic partnerships with afghanistan. it sends an import a message of commitment to the afghan people as well as a sense of urgency afghans must take more responsibility for their security. i'd like to close by thanking my family but most important my wife, kathy who's with me here this morning for her years of dedicated and loyal service to our magnificent troops and their families. kathy reza or two daughters often alone during the career we've been married for 34 years and they've grown up those two young ladies to be wonderful and independent women and citizens. i'd also like to add kathy and i understand the sacrifices of the war with both our families

having experienced conflicts firsthand across the span of american history. if confirmed i assure you and all the military families i will do everything i can to provide the forces in the thinnest and with the resources they need to accomplish the mission and return home safely distinguished members of the committee it's been a great honor to appear before you this morning and i am prepared to answer your questions. thank you. >> thank you, admiral fallin now let me ask the three of you the standard questions we asked our witnesses. have you adhere to applicable laws and regulations governing conflict of interest? >> i have. >> do you agree when asked to give your personal views even if they differ from the administration and power? >> i do. >> u.s. and many duties you were taken would presume the of got the confirmation process? >> i have not to raise and i will you ensure your stuff complies with deadlines established for the request communications including questions for the record in hearings?

>> i will. >> will you cooperate in providing witnesses the response to congressional requests? >> i will. >> would this be protected from reprisals for their testimony or briefings? >> they will. >> do you agree if confirmed to testify upon request before this committee? >> i will. >> do you agree to provide documents including copies of electronic forms of communication in a timely manner when requested by the duly constituted committee or the consoles with the committee regarding the basis for any good faith, delay or denial in providing such documents? >> i will. >> okay. let's try seven minutes first round. we have three votes at noon, which may complicate this. we will see how it works out. general, let me start with you. you indicated in your questions before the hearing and in your testimony that you agree and support the president's decision

on u.s. troop reductions in afghanistan. can you tell us more why you do agree with this decision? >> the president in december the ninth enunciated the strategy as a result of the culbert process of the review of the situation in afghanistan which was to be resourceful well in a number of different ways but in particular would surge forces. at that time, he announced the forces would begin to be withdrawn in july 11. there were two points i think were made importantly in that speech. one was the nature of the resources of the strategy was a clear signal of u.s. support to afghanistan and our intent to provide afghanistan the opportunity and the time to begin to develop its afghan national security forces to provide security to the country but also the other aspect of his announcement was beginning to withdraw the surge forces in july of admiral mullen sends a

message of urgency to the afghans they must begin to take ownership of their security themselves. the president's announcement in west point set the schedule ultimately for the withdrawal of the forces. this was augmented in the meeting in lisbon, the conference and was in november november 10th where the schedule for transition was developed, where our security forces would provide ultimately to cover for the afghan forces as the transition of the terrain and afghanistan proceeded from 11 to 14. in essence of the end of 14 the security forces been in the lead across the country. that brings us to the president's announcement. we expected he would begin the process of the withdrawal. he has made that announcement as general petraeus and the chairman said last week, we are counting for that number. we will begin the

implementation. he has begun the implementation in afghanistan with his i sat staff to implement the president's decision and i support that because that decision was timely and it provides a full accounting for the president's commitment in december 09 and as we begin the implementation, we will continue to have 68,000 american forces on the ground and swing above 70,000 afghan national security forces, and we anticipate this decision by the president can be accounted for within the current strategy. >> how important is it for the success of the mission in afghanistan that afghan security forces take ownership of the responsibility? >> its essentials. in the end our strategy has envisioned the afghan security forces would take ownership all

along. and in the aftermath of the lisbon conference, the intent was as agreed to by the member nations of the coalition and by president karzai the transition would be completed by 2014 where the isf forces would support the development and the deployment of the afghan national security forces by the end of 2014 to be in the position to provide strategic overwatch so it is essential to the strategy. >> now let me ask you, admiral, d.c. the president's announced reductions as creating problems for special operating forces in afghanistan? >> i do not. as the general mentioned there will still be a sizable force and coalition forces for soft operate effectively in afghanistan we need to make sure that we continue to have the infrastructure which will remain in place and frankly and

confirmed i will work with general gallant the counterterrorism and soft requirements with conventional requirements said at the end of the day we are still able to put pressure on the enemy. so i do not think the drawdown will affect. islamic adderall, what is the role of the afghan special forces in the counterterrorism operation that have been carried out and how would you assess the capability of the afghan forces. >> there's a number of different afghan forces if you will. there's the afghan commandos which are trained by special forces personnel and they are clearly some of the elite afghan forces and a magnificent soldiers and afghan special forces which are the green beret counterpart and then with the forced by operated what we had what we referred to as the afghan partner units. these were afghans on target with the forces to ensure we had

an afghan that was if you will going through the door making first contact with the locals in order to make sure we protect the culturally sensitive issues and items on the target. so the afghans we worked with our top-notch to be honest with you. >> how important is it to our counterterrorism effort and counterinsurgency effort that they would be in the lead, the afghan special force would be in the lead. >> i think it's very important as general allan mentioned at the end of the day the afghans have to take ownership for the security of afghanistan and the same thing applies to special operations. at the end of the day we have to make sure the afghans take the lead in special operations recognizing that right now we still need to maintain a fair amount of overwatch, but at that time hopefully the overwatch will diminish and take a larger role. >> do you feel capable of doing so? >> i do.

>> let me ask admiral, general, the safe haven enjoyed by the haqqani network and pakistan continues to provide freedom for that group to launch attacks against the united states and coalition troops in afghanistan. you both i believe talked to the pakistani military leaders. why do they refuse, but uzbeckistan refused to take on the haqqani network and in your judgment is that going to change? let me start with you, general. >> i think it is a complex answer we would receive from them. it is a functioning of capacity, but it might also be a functioning of their hedging whether they have determined that the united states is going to remain in afghanistan, whether our strategy will be successful or not at some point as we have emphasized we have got to bring pressure to bear on

this safe haven. in the and what we would hope is that they would listen to our desire for them to do that and muster the capacity and the capability and ultimately put pressure on the haqqani network to deny that safe haven from which the element of the taliban can move across the border and conduct operations and the afghan national security forces as the takeover more of the security. >> is this likely to change in the near term? >> i don't think it is likely to change. i would agree it is a very complex situation obviously in pakistan and as a opportunity to talk to military leaders in pakistan, this is, again, it is with a capacity issue for the pakistanis, and i think potentially as a willingness recognizing the situation is difficult for them to deal with. >> something's got to give, something's got to change. it can't continue this way for them to expect we are going to

have a normal relationship which we hope for, but it can't continue this way with that expectation in place. senator mccain. >> thank you mr. chairman. general, do you know of any military leader that recommended in 2009 the the president make an announcement in 2011 and travon of troops? >> i do not, senator. >> deal with any military leader that recommended the drawdown plan the president announced last week? >> i do not, senator. >> does it surprise you that after the president's announcement that president sarkozy, the british, of their allies have now announced they will be withdrawing from afghanistan? >> it does not. >> did you see the picture in the paper over the weekend of

president karzai and the ayatollah khomeini sitting down at a meeting pledging friendship support for one another? savitt i didn't see the picture but i was aware of the meeting. >> is it true that the ied and in effect in iran are still coming across the border into afghanistan and killing americans? >> i believe they are, sir. >> did you hear of a statement of the leader, the taliban field commander told the daily beast of his reaction to mr. obama's speech, quote, my soul and the soul of the thousands of taliban have been blown apart happy. i had more than 50 encounters with u.s. forces and their technology the the biggest difference in data war leznoff technology, but the more

powerful islamic ideology and religion. are you aware of the statement by the taliban? >> i am, sir. is the president's announcement of this winstrol make your job -- if confirmed, i assure you will be -- harder, more difficult and challenging or easier? >> senator, that is a difficult question to answer. >> i'm sure it is. that's why i asked it. >> not been confirmed yet or being the commander, have no ability to access with great accuracy of this particular moment. as the chairman said, the announced decision was a bit more aggressive than we had anticipated that he supported the decision congenital petraeus supports the decision and is working now to begin the implementation of the decision and we anticipated the forces

would be coming out and there's a lot that has to happen between now and the end of this year and the end of the purpose of the drawdown. >> i appreciate that and i appreciate your answer. >> i talked to probably 20 retired and active-duty military leaders since the president's announcement made to the challenges are enormous the question is whether we will still be able to succeed or not and i appreciate your willingness and patriotism to take on what is obviously a dramatically increased risk. the economist states again this week. mr. obama would only have himself to blame if entirely domestic political reasons he undermines the conditions f