them do a pretty good job of exposing surplus properties. their others as well. one of the reasons why some nations to do a better job than others as we actually been devised and not to keep underutilizing unused property. we actually allow them to sell them and keep proceeds to fund their operations. ..

an important point and we have recommended a couple of different times and we also discussed in other testimony is the importance it is a key player here because they are kind of the orchestrator of the federal property environment and we've recommended that they really need to work within the federal property council to come up with a strategy to take a look at how the entire federal property portfolio is managed, and while they have agreed that that is a good idea and it needs to be done to kind of rationalize the process they have yet to implement such a strategy because as you know, the -- as you mentioned in your opening remarks in subsequent remarks, the issue having to deal with sophos scoring is a major issue for agencies to be able to come up with the needed capital in order to take a look

at a rational process. another really important point is the necessary analysis that needs to be done in order to make sure that you are making the right decision. as you mentioned earlier, generally building is a less expensive option in the long run and is leasing its always the case. but you need the analyses to do that and so it's important to do the 30 year net present fallujah analysis and see how things will play out over time and do the comparison so we can make the right decisions. you look at the commercial real-estate market and it may make sense to lease something where the real-estate market is say relatively soft compared to a boston or new york or chicago versus dallas or atlanta perhaps. so it's a pretty complex formula that goes into making these kind of decisions, but in order to come up with the right decision

you need to approach it in a multifaceted way so that at the end of the day you are making the best call for the taxpayer. >> let me ask you to cut through all that. i appreciate what you said. what do we need to do it? what needs to be done so the cbo in the future will not say almost routinely makes economic sense to purchase one we are not going to score that way. instead we are going to escorted in a way that almost mandates the agency's lease. how do we change that? >> it's a policy area that is not in our purview but as we have discussed or noted we have made recommendations to the omb the need to come up with a strategy to rationalize the process and so agencies can make the right kind of decision of whether to lease or build and we have really believed omb is the key player to address the

scorekeeping issue of the rest of reliance on leasing as we noted in the testimony is likely to persist. >> all right. let me turn to others on the panel. same question. but i would like you to do is get to senator brown and others in the committee will, colleagues in the senate. give us a to do list, something on our to do list we ought to be doing to change this culture, the culture does anybody have an idea? a good idea? >> the va position as a builder from another federal agencies. part of our portfolio about 11% is leasing. as of 165 million square feet will lease about 12 million square feet, three if it gsa does and the rest we do for ourselves. our problem is our existing

infrastructure. what do we do to consolidate, to get rid of the old infrastructure that can't be fixed easily and in some places we don't need it. right now we have an estimate to six the current portfolio based upon the needs projected for veterans in 2020 we will need 60 billion to invest in our infrastructure. clearly that is not going to be able to be provided for the direct appropriation. i think the key to unlock that problem is to be able to tap private sector financing and working with public private ventures or localities or other nonprofits to be able to find uses for the repurchasing of the federal property to get it off the federal rules to put it potentially back on the tax rules and relief agencies of the large cost. the biggest drag for the va and i imagine for some other agencies are the costs we have to maintain facilities that

could be made more efficient and or consolidate, so i think it is a little different and the big issue about third-party financing or private sector is the other side of the score. the cbo scoring treatment of the use of third-party funds even if it is for nonprofits or nongovernment entity is the score as if it was to get federal spending which basically turns off the third party spigot of trying to utilize them to the hon needed inventory. >> i yield back to the senator and one of the things i may ask in the next round of questions i spoke earlier of the need for a comprehensive bipartisan approach on deficit-reduction along the lines of the deficit commission alan simpson. my sense of listening to the testimony in earlier hearings we have had is that we also need a comprehensive approach with

respect to the property management. not just to deal with the issue but to deal with all this underutilized or underutilized federal property that we do have, and one of the things i want to do media this hearing is to get your input on what should be the components of a comprehensive third-party add to the extent we can harness market values and we change incentives which are misaligned to the opprobrium alignment and i appreciate. senator brown? >> thank you, mr. chairman. i remember as a result of your testimony talking about some of the challenges with some of the prime va properties that could be sold taking on a few rolls and put you back adding more money for the veterans that need our help instead of using it to keep buildings open and the like you testified as to how we there

was a welcome addition to the tool kit you would need in reducing the assets. can you just elaborate on that as to how that will complement your existing tools? and also what role does politics come to politicians have in a interfering with you doing your job? i mean, if you have some assets and want to solve them, how often does the state or local, state or federal government come up and kind of put a monkey wrench in the plan would? >> senator, i will try to answer that in a couple different ways. the first would be our toolkit right now is to use our enhanced use lease authority and in those cases where we can develop if you will a win-win strategy with the local community, the veterans, the veteran service organizations and the private interests in that area we can forge out leasing in a public-private venture under that authority. we've done that. it is in many places and it

works where you can reach consensus. where we can't reach consensus at local level with all the interested parties, especially local communities, the super process would be a welcome addition to be able to deal with those hard to do properties around the country. so i think using both of those places where we have something that works and can continue to flourish and shrink the footprint and deal with our underutilized properties we want to maintain that there are some places that would assist us in addressing those issues. there are a lot of stakeholders involved in the property and the va has other agencies and the g8 has experienced stakeholders have different interests and when we can align those interests that's when things stop so those are constant challenges in dealing with them that we face every day and as we move down this track their needs to be a way to deal with those interests. >> sir, getting back to my final

question i think you kind of answered without really wanting to say it, but house -- what role does the state or federal politicians and politics affected, to the specifically call, and or stop the effort when you try to do things for the benefit of the va? >> in some cases when we can't get alignment of the interest of local interest that may not have the same interest the va has and in cases that happens and comes to a grinding halt. >> very smooth. that is a good answer. that is unfortunate because the senator and chairman carper asked for recommendations. i would think one of the recommendations is to let, you know, leave the politics out of it and let us do our jobs on the fact and based on the necessity to deal with these issues without any type of outside influences coming and i would hope if you make that recommendation you would include that very frankly so to not be around the notion that regard.

generally in the larger perspective the local projects over 2.7 million lasting over ten years in net present value analysis indicates it is more advantageous to purchase rather than lease. so, i was wondering in the super legislation that i am finally requires a net present value analysis of the constantly compared to the cost of constructing the space, however important is it to provide this information to the congress and do you think the? >> i think it's very important, senator, because through using the analysis like the net present value and scoring you can then be comparing apples to apples because this is something the gsa had done previously and then enables you, enables the agency or the decision makers to be able to come up with a decision based on where the dollar value was today versus what will be 30 years on word including any potential

inflation returns and other factors that get put into the mix. so, we believe the net present value analysis is certainly the key aspect of the entire economic analysis and to order to make these decisions. >> thank you. what steps does the gsa take to ensure the contract and on behalf of the federal clients achieve the best value for the tax payer and supporting the mission critical requirements? >> sure. we do a couple things and performing at present analysis, compare the cost of building the new federal facility, benefitting and existing facility and the cost of leasing, as we do that present value analysis to evaluate the financial aspects. again, as i mentioned earlier, one of the key things is making sure we have a firm understanding of the requirements and we work with the agencies to understand how they may be able to adjust their requirement to get a better deal

for the tax payer. so, for instance, instead of having to be in one building that over a particular size might drive construction of a new building or limit competition to one or two buildings that have a certain amount of space available, if they can be in to proximate buildings within a block of each other or right next work or perhaps on the same campus that opens up the competition and drives down the cost of leasing. so there are a lot of simple things we can to working with agencies so we can find a way to meet the mission requirement but leverage our expertise in the state market to make sure we get the best market for the taxpayer. estimate in previous testimony i need to set you are continuing assessing your performance against other rental rates or some other markets through the cost relative to the market measure. so, how is the gse doing in comparison to the commercial market in the various sectors? >> we continue to lease at cost below the market. i believe the end of last year it was somewhere around 10% below the private sector

benchmarks' we were using. >> and is that geographically scharfen overall? >> yes we do it based on the geographic market and sub market so we look where we are leasing and then we find the comparable rental rate from the private sector in that particular market. >> i will defer to you, mr. chairman. >> we will have a third round, so feel free. i want to -- jotting down some questions as you all testified to the questions from senator brown and myself and just want to kind of walk through this list briefly if i could to win one of the areas of jurisdiction that we also have is postal, the u.s. postal service. the postal service could literally run out of money, run out of cash later this year. maybe next year and meet payroll and create a huge mess, and as

in the country. i think about 8 million jobs could depend on the mailing industry. so we're looking hard for ways to help the postal service right itself and in the facebook age to be able to meet our needs to do so in a way they cut their costs. there's been some discussion about consultation, consolidating property and consolidating activities in ways that make sense. we do that through the base closure commission's and about every half dozen years think out loud for us about how the u.s. postal service might play a role here that would enable us to kill two birds with one stone. one is to meet the property of the federal agencies that have nothing to do with the postal service and yet help the postal service with its revenue

obligations in order to support the federal taxpayers. whoever wants to take the first shot at that. go ahead. >> we worked with the postal service a number of years. they are a tenant in many of or federal buildings and will also lease space from the postal service, so we have many federal agencies that are located in the postal service buildings. we worked with them closely as they've been disposing properties to identify where it makes sense to require those and where we have existing federal needs. as well as we have worked with them to figure out what we are disposing of properties or where we have available underutilized properties where they might be able to utilize that. and several years ago going back as far as 1985, we set up an eco you in the postal service that allowed for an exchange of properties and basically the net of the fair market value of that. and it's been very effective i think for both agencies. another area where we have been

able to partner with them, mr. sullivan mention the the sort of enhanced use leasing authorities. they have some authority is we don't at the gsa so we have been able to lease from them and develop properties to specifics for the irs for the service in philadelphia and kansas city where we have been able to use a former postal service facility, renovate and use their authority to create an honor efficient space for the irs and help find a good value for the taxpayer. >> that's very encouraging. anyone else? good stuff. thank you. anyone else? >> i'm sure if the post office had sites that become available due to the downsizing and they were available, and for us it would be the key, with a be located in the place where we need space that would be the critical point of how close they would be to where the veterans' needs are and if they could be easily adapted to deliver health care plan sure we would look at those and see if there was a match and to get into japan

accompanies the were there. >> okay. thanks. >> i would ask our staff to please note that and there's a scenario we can help the postal service called themselves and of federal agencies get better value for the space. anyone else have a comment? okay. some instances have done well, some instances, most certainly the sec was not done well. you used to work at capital one, correct? >> that's correct. >> if you had employees at capital one who were guilty of the kind of gross bad judgment in terms of preparing the sec for the space needs going

forward how would those employees to be dealt with? what kind of accountability would be brought to them? >> obviously there are not the same level of resolve regulations the government has as it relates to its employment practices the there are definitely rules and procedures that pride and an exaggeration like that would be some availability of the due process and would be an arbitrary dismissal if you will but there would be an ongoing investigation and as a result of that the action would be taken. >> i would hope that the end of the appropriate disciplinary action i think i speak for both of us the appropriate disciplinary action would be taken. the citizens of this country and those of us who are privileged to represent them is when we have bad behavior, grossly bad behavior on the part of the

federal law employees or others and they're some just little accountability and that's not right. i would ask you to keep that in mind. we want to be fair but also tough love. i think it needs to be tough and we need to provide an example. at the beginning i think it's your testimony you said you may have asked there were three questions the va asks. would you say those questions again? i look through the testimony to see if i could. >> when we make capital decisions to keep something to renovate it to do what ever, our primary priority is how will that impact the decision affect veterans and veterans' families? number one. and we won't do anything that will negatively impact them. the second priority is to make sure that that decision improve the operational efficiency and cost effectiveness of the va operations whether it is

consolidating our building the new building or whether it is buying a piece of property. the third one is we want to be a good neighbor. we are located in 165 communities around the country. with major presence and sometimes we are the presence in that community. and we do to the extent possible want to be a good neighbor to the community and reach a decision that helps us that helps the local community. we do take them and that pretty first for veterans and families efficiency and then to try to be a good neighbor. islamic let me ask the other panelists are there questions we could use not just in the va but with a little bit of modification used outside of the va? >> it's similar to the process the gsa uses and we have a broad range but first we consider is there what is the requirement, is there a federal need for the asset and so if it is in the va that is looking at how does it serve the va and their customers and how does it serve the iras and other customers or social security, and so that is the

first consideration is the operational peace. the second piece we look at is again the efficiency and cost effectiveness as minister sold singh said and then the third, we look of being a good neighbor in the community. when you're in over 200 communities in all 50 states and six u.s. territories with a government owned or replaced facilities and so we have a critical role across the country that we play and particularly its focus on the transit oriented development and sustainability as well. >> okay. any other thoughts? >> i want to go back to the issue of the delegation in some instances done well and some instances it is done badly. as understand it, correct me if i'm wrong but in the testimony have you asserted that we actually lease more space more than we own is that correct? and that's correct. >> has that always been the case or is that happening in the recent years? >> it is relatively recent.

2008 is the first we crossed over having more space than government owned. >> why do you think that changed? >> i think a couple of things. some of it is just purely shifting demographics and where we have federal buildings, populations have shifted to the agency missions and needs to serve the public have moved, and for a lot of the smaller locations leasing has become a default mechanism to meet those requirements because you wouldn't build a 5,000 square foot building in a small community with federal construction dollars. we put our focus towards building a plant points of entry, courthouses, the major headquarters agencies and consolidations like the food and drug administration and the st. elizabeths for the department of homeland security here in washington, d.c.. and so, it is about prioritizing with limited dollars and then for the more generic requirements that are basic the on the canal office space the in that in this case instead of federal buildings. >> thanks very much.

senator brown. >> thank you, mr. chairman. just a couple more. can you explain -- i still having trouble wrapping my arms around the pool concept of having the sec in kind of a -- here the sec is being used to regulate wall street and in fact it looks like wall street with a leftish surroundings and the fact it would even take up in an area like this i would think they would want to betray an area in the washington and bring some economic different, get a good value for the tax payers and it is a win-win situation all the way around. so i guess -- i know you were not there per say but you are still there now, right? >> i am. >> how do you explain those kind of lavish surroundings when we are in a period of austerity?

>> it's my understanding the situation i don't believe the lavish surroundings was as much a motivator as the full process to develop the space estimate and then the process to get the decision made to take the building. you have to remember a time the dodd-frank act just passed and was given a significant amount of responsibilities. derivatives oversight of the registration of hedge funds as i mentioned in my testimony and a number of new responsibilities. was going to drive the hiring of a significant number of employees. in those new employees needed space to be host. there is a housing versus hiring mismatch we typically can read employees on about 90 days. as you know it takes significantly longer to house them and so i think it's my understanding the people of the time felt very much under the gun to try to obtain space sufficient for the resources we were bringing in because they

used the floor space estimate we were originally looking at the four properties in the d.c. area by the way against the german's guidance she wanted them to look in the region for housing for enforcement -- >> chairman -- >> shapiro. she wanted them to look good with enforcement and examination staff because that's where a lot of the activity occurs for whatever reason and is broken process the staff in the facilities disregarded the directive and then tried to look for space and when they went through the estimate process described it as grossly inflated they arrived at a number of 900,000 square feet. once the that number and land on the outcome of the other three properties being considered were suddenly out of the equation and so they believed they were left with one and only one property. it was an emergency situation and they felt at the time i think they were getting a good deal because the rate received was below the market rate at the time and so that is the way that it was presented.

>> okay. i'm just wondering if that type of office space is appropriate for a federal agency. its top-of-the-line and i guess i'm wondering i think mr. foley then what is the square footage for the clients and i guess now subletting, are we subletting with clients now or how was that working? they are in the but other federal agencies in that space, right? >> we are working with the sec to take gone, but we have not come to an agreement on the lease to determine with them. we are still trying to figure out which agency is we might align. and as cynthia of subleased some space directly with other agencies that we were not a party to that. chemical are you getting for rent on those? >> i don't know. i do know that it's high year than we had originally been on the hook for.

>> saw another federal agency is paying higher rent? >> it's not a sub lease. as i understanding eight. >> so you are paying basically half a million dollars and then subletting at -- >> we are not subletting it. we have been released from two-thirds of the space. >> that entity is now paying the landlord the higher rent. nothing to do with you, so another federal agency hiring and you were ultimately paying is the right? >> that is my understanding. >> how does that happen? have you been working with other agencies as it is a higher rent? >> as i mentioned for large releases we have a number of controls in place and particularly for the district of columbia and the national capital region we actually have a perspective rent capper we put in place for all of our actions to ensure that we get a good deal and stay at or below the market. >> let me make sure i in the

sand. you entered into a lease. i understand all the background. you have been released from two-thirds of that and now that two-thirds is being rented out to one of your federal agency, now a higher amount than the half a billion dollars that you ultimately were paying. so, just are we repeating what we just went through with other agencies? do we need to realize those are? this is groundhog's day, really. thank you for laughing because i don't even know how to respond. i didn't even realize that in my line of questioning but i guess if you keep digging we find more and more and more. i would like to find out, mr. chairman, and i don't know who to ask here who is the new entity. did they go through the process we have been talking about here? are we doing the same thing that the sec did? i would love to have those answers because this is not passing the smell test today may be because we aren't the only

hearing here today that we are on top of because i think that is so critical if you are developing and you have in place appropriately sing guidelines based on all the formulas and everything and injured and 2 a.m. mou covered? >> d'aspin linus for all actions going forward. >> and other things they want to lease are basically i'm understand that, but how about the entities that are now taking over. you don't even know who they are. as bennett was done on their own independent authorities. >> if i might, the fha, the low funded agencies are in that property now. >> so we are working with them to take i believe it is 350,000 square feet and we are working through the typical process to find a tenant and make sure the rent is appropriate. >> listened, thank you mr. chairman for holding this. it's another area every time you

hold the hearing i learn more and more where we are wasting money and i'm hopeful that the president and both houses listening to what we are doing because we are giving a great things to go and fix. the executive order number one, fixed at. estimate as i sit here before the gao leaves us a2 do list and it's not as high risk for the committee or the senate or the house it is for all of us including the president and federal agencies and certainly of us. i want to follow-up on the senator brown's line of questioning and ask for the space that is now occupied in the constitution center it sounds like they will be occupying one-third as originally thought. is that correct? >> senator, we are on the hook for one-third of the spaight but we have no intent to occupy that

space. >> at all? >> at all. >> rent will be due in january 2013. and we firmly believe and are optimistic in terms of our partnership we will be able to find a tenant between now and january. >> let's -- that's good. give us an idea what the cost per square foot of space would be if it were occupying the space in january of one what would we be talking about? >> at the time we were talking about cost per square foot of $44 which would have jumped to $47 per square foot six years later. >> okay. somebody here at the table has got better -- i know what $44 what $47 would be regarded and going into delaware it would be pretty steep. maybe not so much here, but give an idea how does that number -- jul if with the rest of the

industry and particularly in this area. estimate of real estate is local and there's a number of markets in the washington, d.c. area and so rent is very -- fairly extremely but the cap for the district of columbia is $49 a square foot, so 44 square dollars is below the prevailing market rate. that said, there are some markets and locations in the district you can't do the coke can get went below that. >> the other agency, what was the other one? >> the fhfb. >> that are going to come in and lease space the constitution center. if they come at the same rate $44 or $47 with the be under the overall rate for this kind of office space in d.c.? >> for the government wide perspective, yes. now we have seen deals below that as i said in some locations

north of massachusetts avenue and other developing areas we have gotten better rates for that part of town. >> all right. a different question and one that deals with the activities as you outlined the corrective activities that have taken place at the sec in light of this i would say scandalous behavior on the part of some employees. but what if any is the applicability of the corrective action, how does that apply potentially to other federal agencies? mr. foley? will >> i think it is an external how important it is to get the checks and balances correct. one of the examples we have the gse as we work with office of management budget and so i think one of the big issues the sec has and during their testimony working with them was in developing that up front requirement figuring out how

many people they had, what the right utilization rate for the space should be and would they be fully funded for all of that. so for all of our leasing actions, we not only work with the agency to make sure we understand that, but we also work with our budget examiner and their budget examiner as i mentioned in my opening testimony to make sure that the staffing levels are supported and the rental payment would be supported in the president's budget so we know that the a people are going to materialize and the funding will be there to pay for it before we proceed on an acquisition like this. >> thank you. the sec was granted i believe independent leasing authority in 1990. however, as the pointed out we took 90 years to establish the office to handle the activity is that correct? >> that's my understanding, yes to respect the sec established a branch within the office of

administrative services and in i believe april to thousand nine. and do not put in place the procedures until august of 2010. let me ask if i could, sir, how many leases do you think might have been awarded over that 19 year period of time? and why -- you can do this with 2020 hindsight why did it take the sec so long to put a system in place to allow the organization to effectively manage its activity now? >> to the first question it's my understanding we've entered into 32 total leases the last 20 years. i really can't speculate as to why they wouldn't put one in place. i suppose for a 32 leases went to some full-time staff but again, i can't speculate. what i can say is it is apparent

to us that this is not a competency they need to be engaged in and that is exactly why we are moving into a partnership and i would say -- >> you are the master of understatement. estimate the gsa by the way his been terrific in partnering to help us decide the situation so i would like to thank them for that. >> any idea how many leases there currently manage? >> 15 in the portfolio and 11 regional offices, the constitution center space as we know we are still on the hook for a and a station facility which is where the headquarters is at an operations center in northern virginia and then we share space with other federal agencies in the very small site. i worked capital one for approximately 12 years. >> keeping the private center

putting aside the side by side with your a year or so now with the sec? >> about 14 months. ischemic it probably seems longer. >> but what kind of lessons learned would you like to in part to the rest of the federal government given what you have seen at the sec and in the property management? >> in terms of the party management i would say the lesson learned a thing for the small agency especially like ours and we are a small agency on any given day 700 contractors and a very limited real-estate footprint it's about determining what core competencies are and what they are not and investing yourself and those that are not. i was hired to be a change agent similar remarks earlier today by a taxpayer at heart and i was brought in to try to create change and move to a marble managed environment and things i've tried to lead as moving us out of those areas that are not

the core competency and giving those to agencies that can do them better. we are doing the same with our financial management reporting system in the part of transportation service provider and the directions like that for small agencies at least i think is good advice. >> thanks for those comments. >> be given the size of the constitution both in terms of the square footage and funding why didn't the sec seek assistance for entering into the lease? you mentioned a pretty good partnership now, why did they seek the consultation with the resistance in the first place? >> i wish i could answer that. i really can't quarter back them. >> in your testimony i think you indicated the roughly 36 agencies that are independent of policing authority generally do some of these other agencies with independent leasing devotee have adequate expertise and

controls to ensure they are not -- the bigger getting the best possible terms for themselves and their clients and the taxpayers. >> senator, we don't have a large body of work looking at exactly that question, but we did have a look at where the ntsb, national transportation safety board, had issues with the lease for the training facility duelles minute should have been a capital lease that resulted in the efficiency issue and caused some real issues with the agency in terms of its accounting and getting its fiscal house in order. that leads to the larger point talked about and as well as you mentioned in your opening remarks that for smaller agencies that are not engaged in real estate activities as i -- as you know better than anyone it's a very complicated environment to deal with leases

and construction and it if it's not a core mission or even a significant one for a small agency, i think it is logical they need to tread carefully in this area because it is easy to fall into problems when you have capacity issues or a challenge for the administrative side of the agency to deal with these things. >> all right. you know, on the one hand agencies can purchase space and on the other hand they can get this designation and then they can lease or they can go through the gsa and lease. how many, how heavily is the notion of the lease purchase? and is that something of the agencies do from time to time? is it rare or more common? is it is smarter approach?

anyone? >> i will jump in with that. the lease purchase is something the gsa has done in the past prior to the budget enforcement act. it's one of those things that triggers the capitol treatment if you have a bargain purchase option so innocence leasing to own is prohibited because of the funds get scored up front. some of the leases don't inquire the 1990 like the columbia plaza example i mentioned we were able to acquire we have a purchase option lease for $100 million as it turned out at the time we exercised at the dillinger was worth about $102 million in saving rent in the ballpark of 45 to $50 a square foot we are no longer going to have to pay when we take ownership of the building. so there are a lot of that vintage is to be able to do something like that, but it is an area similar to what mr. sullivan said, the budget enforcement act and the budget scorekeeping rules limit the

flexibility that we have had in the past. >> that's good to know. >> mr. heslop i don't want to beat a dead horse but when you say we are on the hook for the space but we are not using it united physically in the space you mean the taxpayers are on the hook. some cover to get our appropriation from congress and basically there is a next tradeoffs of it isn't direct taxpayer dollars but someone is paying there's an obligation that will come due in january of 2013 if we are unable to find a tenant. however, i think our conversation with the gsa is optimistic and we will -- >> so you are not in that space but you are already in another space you are paying for right

now you indicated throughout the region; is the right? >> right. we have 11 regional offices. >> i want to make sure i a understand that. thank you. >> mr. kotz come in your may, 2011 report you indicated to the sec that they grossly underestimated the office space that it needed violated federal law by $556.000000 lease and last year the constitution center. based on your findings the totals the sec have in place to insure that there was leasing at the appropriate amount of space and the most advantageous location at the best rate. >> i don't think they had any significant controls i think that was a part of the problem i know they are making efforts to put controls in. >> what were they thinking? >> i don't know when exactly what they were thinking.

>> do you ever ask him? >> we did and what it came down to was a misunderstanding of whether they needed the space. i think some folks did fall in love with a space and decided that is where they wanted to be to make sure they could be in one building and they wanted to have as much of the building as possible and it was a process that moved forward in a relatively quick time without a lot of the thorough review and analysis and in that up with a flawed process. >> let me follow-up to that effect as a part of the authorization process for the leasing proposals they are required to receive the congressional approval for the leases value about $2.8 million or more. how is the sec able to enter into the constitution without the congress being aware of the potential problems associated in this magnitude and did the sec independently seek authority precluding them from having the

approval prior to executing the lease? >> one as the independent leasing authority and the other that you mentioned several times, the so-called scoring issue so when you have a lease it can sort of allocate a certain amount for each year if you allocate a certain amount of first year you don't get over a particular threshold while a few purchase you replicate the whole thing in one year and get over the threshold so by using the least common you cannot be subject to certain notifications and i think in this case there was a big factor because had there been notifications to the omb, congress, had there been communications with of the gsa somebody would have looked at this more carefully and come to a different conclusion. >> to more questions if i could. would be the consequence to go through the gsa for all of the future lease acquisitions? >> i think there would be someone looking at the least

that is competent and ensure the taxpayer got the most value it would be a good thing. >> and was the constitution center leasing or does the sec lacked to ensure they are getting the best possible space i think i know the answer to that question you don't have to answer. mr. foley, with the gsa acquire the space for the federal agencies as provided has delegated the authority to others how many agencies do you think of delegated authority to the agreements, any idea? >> from the gsa? >> i have that list here. just a second. >> it looks like the largest users the usda, and the have probably two-thirds of the delegation from the gsa.

many of the of the errors are much smaller in terms of one or to specific transactions. >> what criteria does the gsa use to determine whether the agency should have delegated authority? >> and number of criteria. the first as we look at the size of the requirement and for the most part we do not delegate anything over 20,000 square feet. that comes into our agency. for the smaller requirements we look at their management plan, we make sure they have a warrant a contracting officer who can execute the lease in the procurement. we make sure they have a plan to follow the appropriate procurement rules and regulations would be under the gsa and provide oversight to make sure they are following through with that. >> what type of oversight as the gsa perform on the delegated authority to the contracts?

how do the e-verify and agency did not lose more space than was needed? >> that is an issue for us and we work with the agency's and the lease contract to make sure that it is in line with what we devotee did. >> one of the things i like to do when we come to the end of a hearing, sometimes, we are not going to do it today, is just ask have you had the opportunity to prepare for to become had the opportunity to present your testimony to respond to the testimony with your fellow panelists, and we just ask you to take a minute of peace and gift in the concluding remarks. sometimes i find the most valuable is actually the sort of retrospect concluding remarks and we will see if you don't mind doing this if you would start with mr. wise, please.

>> senator, thank you. >> how we develop a consensus with an executive legislative branch bipartisan, how we do that in order to get the better results for money, and interested in getting things done and i think you are as well. let's keep that in mind on the consensus how we get things done and in a way that gets better results, please. >> senator, i would conclude with two points. one, when you talk about building consensus and by partisanship, i think it's a promising start in the direction that will hopefully lead to some efficiencies and some cost savings for the taxpayer so i think it is a good start moving thought process to be developing as this moves towards the legislative moves forward and the differences are reconciled between them in three different versions. the second point is we think it's very important that in terms of looking at the whole

issue of leasing purchasing and scorekeeping that the wendi continued to work towards developing and implementing the strategy to help rationalize the process. >> thank you. >> thank you come center for the opportunity. i would say two things. one as a taxpayer i would certainly be supportive of the approach as well as the previous former army officer to see the benefits added. i also would come back to the comments i had earlier for the small agencies determining what the core competency is and what it's not and of finding a home for those things on saving tax dollars. >> what to do in the army? >> i had a variety of assignments. neglected career as an army officer that ranged from a troop leader through in operations research analyst working as the chief of staff to the chief of staff of the army in a wide

variety to the estimate how long did you serve? >> 22 years. >> thanks for that service as well. mr. kotz? >> the one thing that struck me is what the chairman was saying about the disincentives in the beginning of the hearing. there shouldn't be an incentive in place to lease versus purchasing. the incentive should be with respect to maximizing value for the taxpayer and that is where it needs to be whether it is purchasing or leasing and perhaps we have gone away from that by focusing on one particular type of effort if something was done to put the appropriate incentives in place i think we would all be in better shape. >> there might be an exception when the leasing does make more sense with a lot of space every ten years to reduce bank of the incentive is to maximize value, the incentive would be leasing and other cases would be defined to expect things to read mr. sullivan, please.

>> number 1i think we heard today the critical nature having good internal controls and professionally groome if you will contract in project management staff. the va has spent a significant amount of time and resources to make sure that the leasing staff is fully trained and meets all of the requirements and also has a strict internal control of every lease of more than 10,000 square feet is offices in the general counsel including our secretary personally assigns them all if anything the va and most of the folks race to much review. i don't agree with that but that is the groundswell we have strict internal controls. the other is in terms of leasing for providing medical service is very different from providing office space. the leases work well because, number one, the population shift of who we provide services to and one thing that has become more apparent over time as the technology of providing the

medical service changes. so if we do it in your lease, the way that we've provided the mri ten years ago, radiology, flem ecology treatment, all those things have changed, the building needs to be updated for the latest medical technology and radiology and other telemedicine radiology as well the leasing works well for that. and the third thing i think is the key to this in the end is to find some way to incentivize the scoring process to be more rational and help invest where we need to invest. >> okay. thanks. you get the last word or next to last. >> i appreciate your comments about consensus and like the va the gsa has a professional staff folks across the country. the area where everyone seems to be in agreement there are varying approaches on how to deal with this it's clear their needs to be reform in terms of property and agencies with the tools to manage their property

effectively, the administration's proposal we estimate as much as $15 billion in potential savings that could be achieved by giving agencies an incentive to get rid of property they don't need it by finding a way to help them find those upfront costs to utilize existing space or dispose of property they don't need, and by creating an independent panel that sort of offsets the competing stakeholder interests that you yourself mentioned that we spoke about here in the hearing today. there are ways to streamline the process and make it much more effective for the taxpayers and save those billions of dollars. >> thanks. i ask a question of our staff over here. how long it deutsch of members have to submit questions? two weeks. all right and what time is there for submitting additional statements on materials for the record?

all right. maybe two weeks. we will double check that. let me say to the staff, anything else you want for the witnesses? how did they do? pretty good? they agreed on a curve, so do we. anything else, sir whacks all right. welcome on behalf of senator brown and myself and those who have fled the nation's capital and it didn't join today were were not able to, we appreciate your testimony. you know, i was talking with our staff yesterday about this hearing. talking tuesday about whether we afford the hearings and the house members and senators left on monday and some of the senators are still are not put a lot of them, the question is this is not the sexiest topic to be holding the hearing on. we are delighted to have kind of media coverage that is

demonstrated here today and appreciate that. we are talking about a lot of money here. we are talking about a lot of money that is not being spent wisely coming and going forward we are going to have to and almost everything we do in this government of ours we have to find ways to get better results for less money and in this case the leases are paid for bye user fees or appropriation, appropriated dollars and we have to find ways to do almost everything with the defense and nondefense discretionary and all that stuff and find ways to get better results for less money. this is an area that is to be addressed for years. for one reason or another we have risen to the occasion. may we talk about being on watch i'm on jobwatch until the end of next year. as the chair of this committee a

number of my colleagues serve on put on my watch we need to fix this problem and put in place a comprehensive solution to fix this problem, and we appreciate your help today in getting us headed in the right direction, and we appreciate the willingness to help us going forward to make sure we get to the destination that taxpayers would have us arrive at. with that having been said, thank you all for joining us to become for your testimony, preparation and responses and for your willingness to help make sure we get the ship headed in the right port, and that's what we want to do. thanks so much. [inaudible conversations]

.. >> with the debt ceiling bill now signed into law, watch the debate from the house and senate floors and see what your elected official said and how they finally voted with c-span's congressional chronicle, a comprehensive resource on congress. there's video of every session

and complete voting records. when members return in september, follow more of the appropriations process, including daily floor action and committee hearings on c-span.org/congress. >> next a look at the public understanding of miranda rights with university of north texas psychology professor, richard rogers. his lexture getting it wrong about miranda rights is based on a more detailed paper accepted for the awards issue of the american psychologist. the 50 minute event was hosted by the american psychological association. >> good afternoon. my name is ron rush. i'm from simon university. it's my honor to introduce the

2011 awards for distinguished contributions to research in public policy, richard rogers. dick, as he's known to his friends, has a distinguished resumé in psychology. somewhere along the way, he become enarmorred with psychology, and found his way into graduate school at utah state. there he worked with professor e wayne wright where he conducted his dissertation on self-disclosure. following his phd, dick initially pursued a clinical path as a clinical psychology, first at the maximum security center, chester mental health center in illinois, followed by a position of the department of psychiatry, where he's one the small groups who formed training and research facility, known to

many of you as the isaac ray center. this was a very productive period for dick as he conducted the research that led to the publication of the rogers criminal responsibility and assessment scales. also along with the colleague, created the journal behavioral sciences and the law. it was my good fortunate that in 1984, he came to canada to toronto, which this is where i first met him. he joined there the institute of psychiatry at the uniform of toronto and began to pursue the lingers and response styles. in 1988, clinical assessment of melingering was produced, which honored him with the guttmacher award. he also developed the structured

interview of reported symptoms, s.i.r.s.. in 1991, he decided to leave canada and return to the united states to take up a faculty position in the department of psychology at the university of north texas. there he helped build an exceptional clinical psychology doctoral program. and he's remained there where he now is recently named the regions professor. and i want to say that i know many of dick's students, he's been an exceptional mentor to his students. and, in fact, it's worth noting that three of his students were recognized by national awards for their early career contributions to research in the area. and dick, of course, himself, is well known for his many contributions to the field, including the assessment of mill i thinkering, insanity, and

competition to stand trial. was work he's down is recognized by another award he received from apa for distinguished professional contributions to applied research. he's focused on miranda rights and published numerous, and i was privileged to publish it, you'll find it in the may issue. there's three copies of the may issue available in the book area. he expects to publish a book, the book will be called "the standardized assessment of miranda abilities." it's expected to come out. today he's going to focus the talk. i'm very honored to introduce to

you, richard rogers. [applause] >> congratulations. >> thank you for coming. i truly appreciate this. it's nice to see friends, colleagues, students, so i very much appreciate that. i need to -- i'm -- let's see if that doesn't work. all right. here we go. i'd like to begin on a bit of a solemn note. that is that one of my closest colleagues in terms of miranda research, dan shuman, as many of you know, passed away several months ago. he was a close clocklator both with myself and with others, he was a co-principal investigator on my nsr grants. probably one the best in terms of law and mental health. i had the privilege of working with him on two separate books. but just -- i think just a power

in this area and there's a picture of dan. so it's to him that i would like to attribute this talk. and increase increasingly pretes psychology, the grants from the national science foundation, if you like what they say, they are greatly appreciative. if not, i'm asked to say any opinions, findings, conclusions, or recommendations expressed by the material of authors do not necessarily reflect the views of the national science center. [applause] [applause] >> i recognize that today is a bit of a divided audience. i recognize completely some distinguished researchers in terms of miranda and skulls in that particular area. however, there are perhaps more folks who a psychologist in professionals for whom are just

interested in the topic or just came here for moral support from me. so try to take both of those populations, both of those groups into mine as i'm making this presentation. i'd like to focus more selectively, given the time constraints that we have on the important issues, challenges, and dilemmas which are faced in the work on miranda evaluations. i'd also like to pay attention on a few occasions to i consider some unsettling issues. those of problems or issues that i think we need to grapple and struggle with. and my hope here is to motivate more research and public debates on the topics. most of you have not even a picture of ernesto. i highlighted the o, because he was required to use anglosizeed

version of his time. they described him as a hispanic in the early 20 with observable tattoos and dark rim classes. several days later, she was unable to recognize him in a four person lineup. we'll see how well you guys do. i think it becomes somewhat clear that, in fact, and as my wife pointed out, it's very interesting that the only person can the short sleeve short happens to be, i don't know if we can -- my -- do you notice the tattoo on the side. giving, i believe, the witness every benefit of the doubt, in fact, the exposed tattoo, the dark rimmed classes, he does seem distinguishable to me. perhaps i'm bias. we are all fortunate, in fact as the case went on, so that we could have the landmark decision

that occurred. in temples of after the lineup, the interrogation, the officers version was miranda asked how did i do? that's never a good comment, by the way. in case you are never in a lineup, did i pass or not is probably not a successful way of approaching this. in which case the officer did completely entitled to said you flunked. clearly that's -- miranda's version was they promised me everything, they promised me help if i could talk to them beliefly about the case. for those of you who have been seen it, this is the whole confession. i find it interesting one the most landmark cases that we have is essentially included on one page. in which case he admitted to the sexual assault in this brief account. he also, by the way, say he signed his name with the full

legal understanding of what the rights were. although they were not explained to him. just a moment or two on the miranda decision itself, as you can see it was a closely held decision, a 5-4 decision. chief justice warren is the first that wrote the majority opinion. no one can ever criticize the supreme court for being brief in their comments. i will quickly go through this, i have the essential concepts on the next slide. you must be one prior to any questioning that he has a right to remain silent. and that anything he says can be used against him in the court of law. you can hear these words, can't you now. in terms. that he has a right to the presence of an attorney if we cannot afford an attorney, one will be appointed to him, prior to any questioning if he so desired. opportunity to exercise these rights must be afforded to him

throughout the interrogation. really for that, there are five basic component. right to silence, this is a point we'll come back to later. to a constitutional protection against self-incrimination. the pearls or -- perils or danger of waiving the right to silence, and free services to indigent suspects in the ongoing occasions of miranda rights. just a quick commentary on the couple of major points. the miranda decision did not require that you gave the miranda warning. it said that you need to give miranda warning or any other fully effective means. so, in fact, as they were envisioning by the way, the legislate to consider other options. one option, for example, in canada, i believe, as you have a duty, council, who can be called up on an 800 or toll free

number. we have that as a possibility. the supreme court also was clear to affirm that you needed the right to silence. otherwise, silence in the face of an accusation is itself damning. perhaps of the greatest interest to us here was a later decision of the supreme court in 1981, in which they said there are no special words that are needed in giving a miranda warning. because the courts allowed more poetry, they concluded that by saying there are no incantations that was required to satisfy it's strictures. i've been trying to figure out how to use that phrase when i publish my research. i think it could be helpful. the unintended consequences, if there's no words that are necessary, then all words are

possible. we'll see that in just a moment. i think miranda can be looked at from five distinct areas which over lap. the most basic is vocabulary. if you confuse, as we'll see, if you confuse the word indigent, clearly it shows a problem in terms of -- in terms of understanding the warning. the second is comprehension. this is simply tested by looking at does a person have the ability to recall? retention, by the way, retention has become more important with recent decisions where a person could, in fact, be given the warning hours, potentially days before and then be considered warned at the time in which they make an incriminating statement. ones which we'll focus more on today are higher levels of cognitive, including

misconceptions, the idea that silence could be incriminating, and reasoning. they can deduce the best action for them based upon what their goals are. things will get more interested here. we'll spend just a few minutes here on the lower levels, and turn to really the primary focus on todays talk, which is looking at impairment in terms of misconceptions and impaired reasoning, and ignorance. miranda vocabulary, it's been well researched with limited coverage. some of the work is done by tom groisso in terms of comprehension, the follow up, some of the work out of our research shop on the miranda vocabulary scale. it's a fundamental issue here. if you don't know the words,

it's pretty difficult to grasp the meaning of them. if you don't know the words as they apply to miranda or legal situations, it's pretty difficult. so a common mistake is a word terminate. we have run into almost no criminal defendants that don't know the word terminate. when they think of it as killing. understanding terminate is ending or completing a task. it's entirely different issue. so that really forms if you will the foundation for miranda understanding. when it comes to miranda comprehension, and when i talk about the public view, these are just informal observations of mine, in fact, from talking and giving workshop to a variety of different audiences, of how people often times do view issues of miranda. i think, and remember, i

referenced just a few minuted ago, i think people believe i've been exposed to that so many thousands of times, everybody knows the miranda rights. and everyone knows it because they know it's the same thing. they know it's the same thing because when they hear it, it sounds like it's the same thing. trouble is, it isn't. so one -- the first issue here is the myth of uniformity. it's whenever you go, the miranda warning will be just about the thing. indeed, nothing could be further, i think, from the truth. we've looked at and did two large national surveys of miranda warnings, covering about 1/3 of the counties in the united states. and found 888 unique warnings. you know that's not the answer. don't you? because then the other 2/3, i am confident they didn't let us down. i'm confident there are hundreds we did not discover. in terms of juvenile warnings,

these are warnings written specifically for juvenile offenders across two surveys. we have collected 371 unique warnings. now if you are like many people, you kind of thinking to yourself isn't this really kind of much to do about nothing. come on, these are these different warnings. it must be a word here, a phrase here, it can't be really that all fire. different disguise, you know, making this thing out to be more than what it is. i think one benchmark is to look at word length. look at word length and general warnings of those written for persons at any age. the warning itself varies in length from 21 words to 231 words. the total material, this is a total material presented, cooling the waiver ancillary information, it's about double that. 49 to 500.

juvenile warnings are written longer on purpose. they are typically a 75 to 100 words longer than those who are adults. and the reason for that, we try to explain things to them in more detail. we actually make them more complex and try to provide them with more detail. it's not surprising that the warnings themselves range from 23 to 526. and the total material from 58 to 1130. i thought that deserved to the highlighted. somehow that seems like a contract lawyer. three to four pages of solid material that person is supposed to understand. i think the public view, because we tend to think of these things as being simple and straightforward. i think the public view is they are easy to read. they are so simple, they are easy also to read. the standard this benchmark for looking at this is a reading estimates which were interesting

the level not for 100% comprehension, but for at least 75% comprehension. that might not be enough if i'm putting together a gas grill, if you think about it. not getting it all might not be a good thing. if we look at that, for that benchmark, the general warnings range from grade 2 to post college, requiring further advanced in college education. the juvenile warnings are actually a slightly higher level. remember, we wanted to give them more detail and more explanation, requiring between grade 2.2 and post college. here i think is a bit of an unsettling problem. when you look at juvenile offenders, they typically read -- these are 16-year-old on

average, between 5.8 and 6. these are medians over five years. following up. one thing is critically important, we cannot, the fact is, look at the level of grades which they quote completed and many times this is more of a social promotion than anything else. any way, you consider that to have any relationship to what is their reading level? that happens frequently in some legal circles. roughly speaking, they read about four years below the grade level. look at and focus on one set of the population in terms of magnitude. the best and most recent complete data that we have is from 2009 at this point. both 91 preteens arrested in 2009, 13 and 14-year-old. these are under estimated. not all jurisdictioned report and some crimes are not included

in the list. if you look at, before i showed you the as. the fact is over half of the warnings for juveniles are written at 8th grade or above. five% of them require some college preparation. so you have a kid who is 12 years old receiving a warning that requires some college education. i think this is an unsettling issue. whatever your beliefs about should people have legal protection, constitution fallacy guards, well, the sense of fairness, if you are giving them the warning, it should be something you should understand. let's not do this. roughly speaking, perhaps 200,000 receive a warning, which is far beyond the grade level in far, far beyond the reading level. okay. you made a big deal out of that,

right? what about oral comprehension. everyone can understand things which are being presented. here i give it you to a accumulative percentage. almost all of the miranda material are 75 words. 85%, 125 or more. 2/3 of them are written have 175 words or more that the person when given in oral advisement is supposed to take in and understand. average warning is 213. conservative is 26 concepts. how does that compare to what we would expect? hear what i did, come of you are familiar with the memory scale. we'll see immediately. what i looked at is what is the best that you can expect from well educated adults. so these are those adults who

are considered to have superior, not above average, but superior memory abilities. when given the concept, when given comprehension, oral recall of 75 words with 25 concepts. in fact, as that group gets only 72% of them correct 37 i think that is rather, again, unsettling issue. if the brightest and the best of adults really achieve even at 75% comprehension, there's something here that needs to be finished. what about spanish in there are hundreds of thousands of spanish detainees who are -- who have been arrested annually. what about that? we looked at 120 jurisdictions and just it give you a summary. in terms of usage along the 12% in here. just an example instead of

saying can you afford an attorney. i economically permitted yourself a lawyer, maybe a bit awkward for many of us. i think something that is troubling, roughly 3% of the cases, part of the components were missing. when i say they were missing, i want to be clear about this, these are jurisdictions where we have both the english and the spanish. these are comparisons. you might say that's difficult to do. those of us who do this research know you take the card and flip it over. it's pretty straightforward. when it was on the english, it would be missing in some cases the 5th prong on the spanish. it cries out in terms of fairness and equal protection. although rare, the mistranslations are also tragic. i don't try to pronounce the

spanish. that would give you a light moment if i tried that. but it's the spanish translation is you have the right to remain whitewashed. something about that does not seem like it captured the constitutional protections that we all desire. now my focus is going to shift over to the higher components of cognitive thinking in terms of misconceptions and those based upon the false premises and miranda reasoning. just a moment in terms of a historical perspective. i think tom is best known for his work in terms of comprehension and reasoning. but he also did some seminole research, which really examined for the first time in a systemic way some of the important misconceptions. i knew tom wouldn't be here today. he is in australia.

i parentally, i think, giving talk. so i thought it was safe to put up a picture. that was a rather nice picture of tom. he looked at with juvenile offenders. he does have data on adult offenders. most of his work has been on juvenile offenders. in terms of right to silence, 60% believed you can exercise the right, but you will be punished if you do it. you will be punished if you go against adults. the issue of revocability, i'm a parent, now a grandparent, we know what's that like. when you change your mind, but you are bigger, stronger, or perhaps verbally more skilled than your four kids, you revoke. i change my mind, i take that back. it's not surprising that, in fact, a number of juvenile offenders believe, yes, give me that right to silence. but you can take it back whenever you want to.

particularly with the judge. that doesn't take it a judge if i can take it back. if i can take back your toy and constitutional safeguard. also addressed the issue of the right to council. why is it that counsel wants information? is it because they want to help me? or is this information they will begin to share with others? i think it slides a little bit busy. 28% believe that they information could then be used subsequently against them. so you have to ask the question, why would i want counsel? if they are going to become a weapon that will lead to my being found guilty and sentenced. finally, just a few more. we developed, i discovered this for the first time, a waiver expectancy interview, where we looked at people's reasoning for why they would make the decisions that they would make.

it's interesting, the narrow which involved well, the police don't know. they suspect it's one of several folks that was involved. should you talk to the -- should you talk to them and tell your version of the events? only 26 stand collectly reason that volunteering this information would be incriminating and could lead to their conviction. the others had less articulated. final point, minor charge to felony murder about the most serious. only 38% considered asking or exercising a right a good reason to do that so you can get your legal expertise in terms of a defense counsel. and 24% still believed i'm going to get punished somehow. there will be a negative effect. the judge or the court will deal with me in a harsher way, if in fact i ask for this. this is some of the early seminole research which i think

is something that we have preps have lost attention to but is still of central issues today. pitcher there by the way. i had a pitcher of tom. i thought i'd put up a pitcher of me. i see him recognizing immediately that is myself. to a resilient law magazine. we're so gracious to repay me by publishing both the interview as well as this rendition of myself in it. go show what we do sometimes. this in all of the work which i'm talking about, the et al should not go unnoticed or unappreciated. there are individuals who have worked very, very hard on this. particularly my doctoral students, but also a number of colleagues around the country. and on particularly this project which involved using legal experts like eric from harvard, and chuck from berkeley, dan

shuman was involved in this. we had a number of legal experts. what i'm about to tell you about miranda quizzes wasn't based upon my own knowledge, or misknowledge. simple little miranda quiz, 25 items. looking at the common misconceptions. attended for the detainees. you'll be getting a quiz before you are allowed out. i found a number of people have misbeliefs. for those who like -- it appears to be reasonably reliable and have content. we want to look at miranda disconceptions really taking into account both reality and what i have labeled here as fiction. reality was 149 detainees awaiting trial. fiction which you might consider the best chase. they call it the upper bound. this is as good as it gets, as far as we know. i think that just revised an

interesting comparison. the college students who are reasonably intelligent, certainly they will hear more than reasonably intelligent and under no stress at the time it occurred. right to silence. is this a protection or choice? i can eat my broccoli or not. is it something more? in fact, in getting it wrong, the defendants and college students both in the 30% range. this practice, make it perfect, 20% of those who had gone to the rest stage at least ten times. i think it was like 25 was the average. didn't seem like it got any better with practice. if i waiver, once i give it up, is it gone for good? you'll see the defendant higher. believing once it's gone, it's gone.

how about false premises? if i don't sign the waiver, if i don't sign the contract, can they hold me liable? only when it signed is it good? that got about half of the defendants. assume, 300% got that. if i asked something to be off of the record, that's where over half of the defendants get that wrong. i can ask for it to be off of the record. anything you can say and will be used. i think it's clear in terms of most wordings of wanting anything that you say, anything, and it doesn't matter what you think about that. and, in fact, it is once a frequent decision held that your actions can be held against you, as well as your actions, nodding would be a confirmative response. so you have the right to counsel, right to silence until counsel is available. some are explicit. about 1/3 of individuals believe they can keep on interrogating

me until counsel arrives. they have jurisdictions whereas more than days. let's be conservatives. for days they could continue to interrogate you if they believe this, before, in fact, so the idea, if you ask the counsel, they stop. this belief could lead you to the wrong conclusions based upon what your needs are. does indigent mean fumbling? no. here it shows the college education or maybe it has had some lapses. we are doing something right. half of the defendants thought that was the case. if which case, if you are not indicted, you can get legal counsel. only 17%, that's embarrassing. 17% of college students fell into that group.

however, withdrawal or waiver. by the way, the waiver is often times not labeled a waiver. tell me your side of the story. that was the waiver. your waiver was when you said i agreed to that. did you know you were waiving your right? if you don't know that was a waiver, then how can you possibly withdraw we do not know what it was that you did in the first place? i think it raises a conundrum. the college student is worse than defendants do. how about false premises? the police can't high about stuff. how about lying to you about an eyewitness. notice in the miranda case, that happened. the police will lie to them about this. in terms of getting that wrong, again, we have substantial percentages.

can they make up extra charges, fictitious charges. i'm going to cut my losses, they are only getted me on the one armed robbery, there was six, looks like i can go for one. that seems like a great deal. until the others are fictitious and there's not even a robbery that took place. adding it all up. how many people are winners? those of you in the room, i imagine most of you are college graduates will be thrilled to know that the college students, one out of 20 aced the test. not so good for your prechild defendants. in terms of the percentage of these two, in fact, has failed only one of two of miranda, they might consider that much. you'll see the percentages. the college students did better. who were the complete failures? who failed every single piece of

it. 10% of the defendants and 4% of the college students. let's move on now to miranda minutes. maybe it's just because they are not intelligent is why people have such great difficulties in terms of miranda misconceptions. really not true. the numbers are tiny. and it doesn't matter how you divide it up. if it went above or below. i thought they were convenient numbers to provide you with. maybe it's the lack of education. coyote, 1967 supreme court said we should take into account the persons abilities, past experiences, and things of that nature. our look at that, i did no provide you with data suggestions, no, not the case. but what about the miranda warnings. you see, it doesn't really matter how many misconceptions you have, if the miranda warnings themselves are able to get you out of the problems,

right? so that you are now relieved of your misconceptions. well, i probably should stop here. you have read this line. yes, they moved. they went from 70-72. this is not significantly different. slight improvements in terms of silence, free legal services in terms of misconceptions. they didn't do so well in terms of evidence against your attorney. after hearing the warning, they had further misconceptions about police deceptions. there were more faithful that the police couldn't lie to them having heard the warning than before. i'm not sure that's exactly what we are trying to achieve. maybe psychological impairment. for the sake, i just put up one. we've looked at this in a variety of ways. it has nothing to do in the relatively small numbers of

individuals. in a small group, this is significant in the great realm of things, that is not explained what's going on. critical issue, a critical issue is when a defendant says, i understand. what does that mean? the united states -- i'm sorry, in the sixth circuit base, united states v. banks, the affirmative, do you understand can be strong evidence of accurate miranda understanding. we will tackle this in a slightly different way in a couple of slides under the issue of meta knowledge and meta ignorance. i think what it does, it overlooks a huge area, particularly among mentally challenged defendants. it overlooks acquiescence, the people who have learned i don't

know what's going on, i just nod and say yes and the world will take care of me. over looks that component completely. let's talk about meta -- you know i have to get to meta-ignorance. do you know what you think you know? it's done with mostly medical. people are not exact as they think they are. meta-ignorance, i found in studies looking at the particular concept, do you know what you don't know? i think that's different than knowing what you do. sometimes you can be darn certain, those you'll get right. others are less certain. how will you thing us don't know? do you know you don't know them? somebody pondering this will need an alcoholic beverage to short it out. that is a critical issue.

again we get back to the mantra of i've heard it 1,000 times and the confusion between the familiarity and data. have a little bit of humility. these are the people who either said i'm very knowledgeable about this, not so knowledgeable. and this is do they make any areas after autowithin terms of those groups. i do have one slide that shows you averages. well -- it seems like, in fact is in terms of making errors or evidence, attorney, and continuing rights, those i've conveniently highlighted in gold or yellow, in fact, as you see, there is a modest difference. unfortunately for free legal services, the trend is in the opposite direction. i think if i'm more important, it's notice if you think you do or not, 60% is the threshold, in other words, large majority of people are getting each part of

this component wrong where they say they understand or they don't say they understand. i'm going to let that one slide. so let's look at the conclusions about meta-ignorance. i think the good news is -- i guess it's good news, it's about 10% difference when you say you know versus not know. the big news is meta-ignorance is alive and well. most defendants don't know what they don't know, in over half of the cases. this has profound implications where miranda cases says i understand, and the courts automatically accept that as being accurate. one little comparison that i thought could be of some interest. we tried to look at by the way the things without miranda, this is defendants versus those with substantial numbers. unfortunately as you can see,

there were not. this is looking at a large number, at least ten of 25 versus the remaining groups. which still is a substantial number. going through a bunch of data, aisle going to give -- i'm going to give you the key issues in terms of verbal intelligence. we broke that down by impaired, below 85, versus average which would be 90 or above. look at temporal discounting. we don't have time to get into temporal discounting. it's where the person weighing heavily the immediate consequences over the long term results. so a person who is willing for coffee or a smoke to in fact is given incriminating statement that might put them decades into prison is very prevalent among offender populations. i mean these guys are pretty persons of impulsive. you can see how, in fact, that might happen. do they ever stop to consider

what the alternatives were? not sure that's small for you in the back. this is not a test for visual acuity. visual intelligence carries. if you have significant problems, the likelihood to fall into the substantial in terms of substantial level of miranda is substantially high. for those above, in fact, if you do not gauge in temporal discounting and you do consider alternatives, only 5% fall into the group. some of you are clever about this, i know i don't have all of the different groups and possibilities here. we are limited to those who had at least samples of 20. if you have very, very few people in a particular group, it becomes unstable at that time. all right. less substantive i'm going to

address is what you might consider to be on the side. i'm going to put forward the concept of professional neglect. they will illustrate painlessly with a few numbers. we had 9.2 million adults arrested in 2009. which is just some place between 8 and 15% of these are severely disordered. probably have questionable competency. some extenseive work that my colleagues and i did also have issues of terms of likely miranda impairment. they are also two or three percent detainees have mental retardation and half of them are likely toy have miranda impairment. too late, but consider. take the conservative and lower

estimate. which is about half of the higher and let's leave out those who are mentally challenged from this. i've got about 360,000 adult detainees with probably miranda impairment. look at the juveniles but 1.5 million work done by bill with ron. and in fact it has looked at this, it varies by age. using conservative estimates, i had them um there. i realize but 311,000 would be conservative at that time. based upon the exstraplations, i think the optimistic number would be 5,000 waivers annually. there is the disconcept. something which i can be to be an unhotelling issue. we think in terms, i'm not

saying there are. but probably miranda impaired, based upon conservative estimate. probably about 600 ere -- 600,000. we are wonders why this happens. i think this is one potential explanation is, in fact, this is an error that we have over looked for the reasons that we've outlined today. everybody snows that you'd have to be dumb as a post to use a texas phrase, not to get it. only a few people have disconceptions. they have led to the general and professional neglect. which is ending up saving a few middle of questions. this is the framework, i slipped in one of two slides about public policy. i think we desperately need more empirical research.

there has been stoods. that's not necessarily, but peer reviewed studies. that's -- we've had 1400 in the same time period. we clearly need to say people who have been recently arrested, or people that suggest they are in the tank, still smelling from the last night are a whole different group of individuals in those who are stabilized and have been held in jail for periods of weeks. for those of you in the social psychology, i would recommend to myself too, mark prime research. we've done interesting little bits of studies, asking people to steal by the way you get great subject participation, steal of watch of a plexy glass case. then you get caught and mirandaize you. even the mild, mild stressors

causes significant deckments by individuals that are prone to be someone anxious and major in the ability to comprehend. that lasted less than two minutes. nothing at all because some of you recognize the ethical constraints of doing the research that would have more meaning to you. when we look at hypothesis, the only viable approach would be further training in forensic psychologist. some psychologist use assess measures. i'd like to note that we have several potential advances in the area, particularly including the work of naomi. we need training for attorney, both defense and prosecution, as well as judges. prosecution views this as just a

subsidy final. there's much in it for profession in making better ways to do this in more airtight cases. it would be a defense maneuver as a issue. an example is we could experiment, for example, video taping reading aloud the miranda rights. that would accomplish two things. one they wouldn't look down the paper and sign it which are required reading 500 word per minute rate in some instances. but secondly, we would actually test and have some knowledge, could we even know what the words are. i'd like to in closing this is compliments of a sheriff in travis county in terms of her prosecution, this is not what she gave to the offenders, but what she suggested was a real miranda warning.

you have the right to remain silent and you will be really stupid to just talk to us, no matter how nice we seem. and no matter how much we want to here your side of the story. if you do talk to us, we will take everything we say and hang you with it. you have a right to an attorney, and the first thing that he or she is going to tell you is to shut up. thank you very much. we might have time for one or two questions. maybe time for one question? thank you very, very much. i really appreciate it. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> six, eight, nine. >> 10, 9, 8, 7, 6, 5, 4, 3, 2, 1, zero. >> these are the stakes. to make a world in which all of gods children can live are to go into the dark. we must either love each other, or we must die. >> vote for president johnson on november 3. >> this weekend, we'll look at the history of political campaign ads with lsu professor, robert mann, and former homicide

detective, james labelle on the day they killed lee harvey oswalt. get the history. >> this month, they feature more of the lbj. hear conversations between the president, secretary of state, and senate armed services committee chair, richard russell >> i'm trying as hard as i know how to get piece in vietnam as quickly as i can. for that reason, i am not running. >> get more in walt more/washington 90.1, xm

satellite and web site. >> this panel is an hour and a half. >> hello. thank you all so much for joining us this afternoon. my name is michael gutkowski, i'm going to moderate a discussion about the evolution of digital and digital media. and this is a pretty esteemed, yet lose group here. so we want lots of questions and lots of participation and we are really excited to chat with you about some of the things that we see from a consumer perspective, what's happening in the marketplace, and how things are evolving. quick introductions at the very end. please meet christine cook.

she is the advertising for "the daily" which was developed around -- >> february 2nd. >> christine has market roles with "financial times" "martha stewart living." and we are delighted to have you. [applause] >> next to her is anthony riscicato. he has been a digital marketer since they began. i've known anthony for some time. he'd held many different roles in the number of great companies, including double click, which is one the pioneer companies and delighted to have you as well today. >> thank you very much, michael. >> next to anthony is michael kelley, and michael coll --

kelley is a chief advertising marketer of adgenesis. i'll let you tell more. really just a transformative advertising focusing on how it is delivered to consumers. michael has had a great career with pwc. he was the officer and worked with some of the biggest brands in the world. including att on their digital strategy, and he was very instrumental in launching hulu, which is the video service that is joint owned by a number of media companies. welcome, michael. [applause] >> last but certainly not least is david steward, and david, gosh, i have known david for a very long time. we were colleagues with marsha stewart living on the media, many, many years ago.

he has built many consumer facing brands, working on things like people magazine, tv guide, and now a really interesting art business. i thought it would be great for you to actually tell us about your business to sort of get started. christine, maybe you can -- christine is going to be our av person, as well as one of the panelist. hopefully you guys can see that. >> great, you know i'm going to stand up actually. great to see you all here today. thank for being inside on what's probably one the most beautiful days of the summer. nice to have you all here. so i hail from an interesting intersection, the intersection of art and the internet. and there are two words that have been pretty separate for a long time. and the company is 20 x 200.

we have a pretty basic premise. that art doesn't have to be expensive to be good. it doesn't mean that there's not expensive art that is good, because we all know there is. but they are not mutually exclusive. and we think that there are a rot of people out there that love art and aren't able to find work that they really like. part of the problem is the wonderful, warm reception that most of us get when we go to a gallery. if you've been to many, this is what you've seen. and the woman not only starts in that position, she stays in that position. and the gallery world, in many ways, it's designed to intimidate, i would argue, more than it is to really bring people to an understanding and an appreciation of art.

and our founder set out to try to fix that, jen bekman. this is the baggage. a lot of us have a lot of baggage around art because of the way we've been treated in the past. and we often think of art as sort of, you know, the high holies, you know? there's something that goes on back there. we don't understand it. we're told it's important, but we're never supposed to really get it ourselves. so jen started -- she opened the gallery in 2003 and the gallery business is an interesting business. we work really hard at making people welcome at the gallery. and educating them about the work that we sell. : do is really move from

the world of the gallery, which works for a few, to bringing together the world of artist and the world of consumers through the internet. that's what you see on the right side here. and really using the power of the internet to amass large audiences of consumers and connect them to large numbers of artists. this is a great photo, i think it's a great photo. but one of the things in -- that happens when you have a lot of context, or a rot of choices is it becomes overwhelming. it's hard to pick what you want. finding art that you like is generally, it's very difficult. either because you are seeing a lot of bad things, or finding a lot of what you don't like. if you look at a lot, a lot of it, after a while, it all sort of looks the same.

so some people default to the familiar. i would guess that there probably -- oh know. there have problem been a million of the copies of the dog playing poster -- playing poker poster sold. and it's a sad comment on -- i don't think that everybody that bought this really wanted this. i think if they had found or been able to find better examples, they would have bought them. but you've got to kind of find your match. what do we do to help turn customers into connoisseurs? how do you get started? if your entry point is, you know, an amazing oil painting, there are only a few people are going to be able to participate. and that's a hard part.

so we really start with what we call the gateway drug to the art world. for those of you who don't recognize it, that's a marijuana leaf. [laughter] >> and we work with an amazing range of artists from emerging artist to various established conceptual artist like lawrence weiner. we start with each edition that we do at a 20 or $50 price point. that's why we call it the gateway drug of the art world. that's okay. and we offer them an abroad array of sizes. and unlike a lot of -- a lot of sites that deal in art. we give people entry points that they are familiar with. how do people get in, how do they get excited?

and -- thank you. you weren't in navy club in high school, were you? >> those shoes. no way. >> but, you know, we break a lot of art world traditions at the same time that we try to bring the audiences of artist and collectors together. and one of the examples of that is being able to browse by color. you know, a lot of people that like art buy art based on decor. i'm sorry. and that's hearsay for a lot of people. we do give them the ability to buy by color. next. did that go -- okay. the other piece of the puzzle is -- there's different kinds of shopping. right? sometimes you know exactly what you want. like i have run out of

toothpaste. i want to get another six ounce tube of crest ultra whitening. right? you can go into a place like amazon, type in crest ultra whitening and find it. or google, whenever. most people don't know exactly what they want in the category like art. what is it that you want? what is it that you need? it's a hard thing to search for. we find it important to build a relationship, and really create an experience, rather than just the transaction. and one the ways we do that is by having a newsletter. and so we have over 50,000 newletter subscribers. each news letter helps people understand a bit more about the artist. a bit more about the work. so that people are getting educated. so they develop an appreciation for the work as well as the person who's creating the work.

and this is a provocative, we sell actually a fair amount of text start. this is artist name mike montero and, you know, it comes with a certificate of authenticity, as well as an artist statement. this is a great -- a great designer and artist, paula shaare. some of you may have seen a lithograph of this at union square cafe. there's a really gorgeous, large, large piece of work. and we worked with paula and we were able to offer the really starting at $50. so that people could experience the art in her own home, even though she would be otherwise beyond their reach. of course, this we all know, happy customers are great

marketing. when we get wonder comments from our customers and here's one that we got -- you guys i'm so excited right now. i could see in my pants. that makes us feel really good. it does. it does. i don't know how it makes them feel. but for us it's really wonderful. we all know that one the great ways to build a business is by having really happy customers. so this is basically how we feel. live with art, it's good for you. thanks. >> great. thank you, david. [applause] >> i want to develop around the horn fast. what is the digital trend, consumer trend that's really getting your attention. who wants to kick it off? >> i think with the launch of

spotify and the bending launch of apple cloud base music store with the cloud-base and not having a device, media through the photography or individual, but now media that you have bought through amazon, itunes, spotify. >> does everyone know what the cloud is is? icloud just launched and store everything to access it from many of your apple devices, rather than having to be tethered to a computer. >> here's two examples. one is idisk, any of you have who apple computer, there's an option to store your pictures, data files, your videos so that they are not stored on your computer, if you went to the web

cafe or friends house and log in through a url and have access through your own passwords to your specific information. other example is google, gmail, yahoo! mail that is cloud based, where you are logging into a web site that's particular to you. to underscore that point, google and gmail, which started as more of a personal usage functionality increasingly, i hear, so many businesses that are using google dox. which is business' ability to store very large files, allow people in multiple locations geographically to access them, without having them stored, storage fees from an operations perspective, or reduced for the company. because google is paying to run all of the computers that are storing all of that information. with that baseline, now you over lay the entertainment services,

and any of you that use kindle, if you have an kindle and iphone, you can put a kindle app on your iphone. it'll sink. it knows where you are in your book, whether it's on the kindle itself, or the kindle app. that's using that same type of underlying functionality for you to have an entertainment. i think the presence of entertainment through the cloud is really interesting. >> david, -- i know, david, you have a big music collection. are you storing your stuff on the cloud? are you buying a lot of music? >> it's funny. in my basement, i live up in springs, i have about 4,000 vinyl disks and probably 2,000cds. ii haven't bought anything physical in probably the past five years. >> what are you doing? >> i buy a few things from time to time via itunes. generally, i have a subscription service, $10 a month, to

rhapsody, they have an amazing catalog, i access it via my phone, ipad, i have it hooked up. if i'm on the road traveling, open it up, turn it on, and i got all of my music with me. >> it's great. >> it's fantastic. >> it's great. >> i was going to say it's interesting. i think our virtual lives are a mess. i have 4,000 photos from the last year on my iphone. >> move closer. >> sorry. is that better? >> yup. >> i have 4,000 photos on my iphone, music on six devices, you talk about consumers trends. i see two, one is education centers. literally will start popping up for people. like me who have no idea what they are talking about. you know, i have no time to go to rhapsody, i think i have no time.

actually, i probably could get more time if i had it organized and i was driving here from hampton bays. i saw the cooking schools. we need technology. we need the growth of brands that will help people learn. and speaking of which, i think the most horrible interfaces in the world right now are created by the very brands. i just don't think -- i think there's one person, steve jobs, who is a unique blend of chromosomes, who can get unique touch with a person like martha, to get in touch. we hear 3d movies aren't doing well. four out of five households make less than $55,000 a year in this country. if you don't think that's an interesting way to live, try doing it for some of you that don't. they can't afford 3d.

hollywood is starting to flounder. it would be interesting to bring it back if sony teamed up with google to really improve their user experience, or teamed up with disney, or teamed up with a content company that knows how to entertain. and use navigation. because i can't find half of the things that i hear about. i'm in the business. i think those are the two trends that we're going to start to see. better user experience and actually going out and teaching people how to do it. >> great. something about -- we all touched on this a little bit. i do work in the video space. it might be self-serving. the whole concept of how we are consuming. i'm a consumer of media, news, journalism, movies, television shows, i probably don't want to mention here that i watch religiously. how we are all watching and consuming those things almost

incommerce blue has changed without it noticing how quickly it has happened. i haven't bought a newspaper in probably three years. i read probably five newspapers a day. i haven't watched a television ad, a live television ad in probably three or three years. but i know every marketing campaign that's happening. because i'm consuming that content in different places. when you ask about what the future is, it's how we are consuming this content, and how we are being affected by the messaging and the marketing and whether i'm watching television and my ipad on the side of a coffee cup, you know, on a billboard somewhere. that's the fascinating piece, the social fabric of how we consume media, we are not huddled around the tvs. we are consuming this in very individual ways. that to me is a fascinating social tie between media, marketing, and people.

i hoping it's a positive thing and we can work to make it positive. that to me is really kind of the next ten years. that's a c change that i have no way of predicting what it's going to look like. >> it's not even just content. it's accessing information, social graph. i did a fair amount of research at hearst when we launched a product, a mobile product that allows you to track the things that matter with high quality content sources. it was like an addiction. we're never unplugged. you know, whether we're on a bus , between meetings, whatever, at the gym in the locker room where we are checking all of these things. i want to ask the audience, i'm just curious, audience participation. what's the first thing that you do in the morning when you wake up. do you brush your teeth and get

freshened up? show of hands. check your e-mail? before brushing your feet; right? facebook profile. post to facebook. no? okay. how about saying good morning to the one you love next to you? nobody. one, one -- two. [laughter] >> how many of you have a mobile phone and a land line? okay. of how about you guys? you do. okay. >> i really wanted to have both. but the land line that we had was battery operated. my whole rational for having that one. if the power went out, i wanted that thing that would be working and when that wasn't available, i just have a cell phone now. >> great segue to the next question. how many battery operated devices do you have on you right

now? one? two? three? i saw somebody with three. four? two. okay. very good. how many of you subscribe to newspapers? local or national? both. okay. and my last question: has anyone -- okay, we talked about facebook. how many of you have facebook profiles? okay. so how many of you go on to facebook once a week? once a day. twice a day? okay. all right. good. and the last question, how many of you have not bought something online? everybody has bought something online. okay. good. next thing i want to talk about is base -- facebook.

and social media in general. i think if i was thinking about preparing for this. i personally feel like social media gets a bad wrap. in that it's not just about sending pictures and tweets. it's also about, you know, connecting with business professionals through linkedinand things like that. i wanted to talk to you about things. how are brands and consumers using social media that strikes you as interesting? >> well, i love that question. because i was originally cynical about social media, especially if facebook became the suppository for people to tell you the things that you didn't want to talk to them about the phone about. i think there are a lot of tools that come into play. i have some of them up here calling social media a form of business and research perspective and making it a lot more sensible.

pulse news, flip board, and tweet deck are tools that i use a lot. pulse news and flipboard, pulling in from social media to make sense of what journalist and or voices and curators that i respect are saying. and putting it together in one place that's easy. so hollywood reporter, "vanity fair daily" any kind of news "huffington post" all of these feeds coming in basically from twitter, but it's presenting it in an interesting way. i like that. flipboard takes a little bit of a another approach by presenting it to look like a magazine. you know, so these are things that ted talks or my own twitter feed, whatever i'm interested in. but presenting it in, you know, kind of an interesting way. so i feel like this is social

media. this is a whole nother aspect of social media that actually, you know, is the twitter feed that you are accustom to but is an easier way to look at it in ways that i was accustom to in a magazine. i think the immediacy of journalism now with better cure ration and what an certain extent newspapers have provided for us is fantastic. these tools allow us to filter out the crap of, you know, blogs that don't really make sense or people that aren't consistent and contributing, as well as bring the best of all of the journalism and the respected sources for entertainment as it maybe that's available. >> a couple of -- i'm sorry, just a couple of stats that i think are pretty wild. if facebook has 150 million users, if it was the

considerate, it would be the third largest country in the world. which is amazing. 50% of those users go on to facebook every day. there are over 700 billion minutes spent on facebook per month. 700 billion minutes. it just kind of boggles by mind. >> it'll be a very, very noisy country. [laughter] >> wait, aid owe is -- audio is coming to facebook. >> any other thoughts about facebook? >> i've been in the digital side of business says michael say '95. although i'm youthful looking, i'm older than i look. i had a company and one the developers came up to me. i had been running the company. he was nervous and came up to me. he was like i don't understand. don't understand what? he said how could you not be on facebook? i was like what are you talking about?

of course, i was on facebook. i can't find you. i had made my facebook profile private to the people that i wanted to deal with on a regular basis. that concept was so bizarre and alien to this person who was 20 years younger than me. he just couldn't understand. i tried to make the analogy, i don't want everyone calling me. i don't want everyone that i meet to have my phone number. and that's how i used facebook, as a way to interact with the people that i wanted to interact with, but i'm the last of that. i mean that doesn't exist for the people coming up. >> i do the same thing. i used linkedin which is like a professional social network. which is a great tool for recruiting people and connecting on a network perspective. that's my business and social. facebook i try to restrict from, you know, colleagues and business associates. so i totally agree with you.

>> we really like using facebook at 20 x 200 as a way to get response from our customers. so we do, you know, different sorts of quizzes or contexts from time to time. it's a really easy way to get sort of interactive, if you will with your customers. and that's one the real strengths that we find about it. >> so i have to be honest, my -- i've noticed, you know, the broad spectrum of behavior on facebook, at least in my life. i have a large group of friends and family members who use it sort of on a regular basis. then i have some that are really afraid to share information. then i have any nephew who is sharing everything about his life to me every hour of the day. every whim, every thought that passes through his mind. it scares me a little bit. and as i know, as i've hired many people over the years, i know that employs look at your

facebook, linkedin, they look at what you are tweeting and share as part of the process. how do we deal with this and how do we, you know, start to educate people on what to do with social media? >> well, you know, first of all, i became a prolific social networker in my 40s. like a lot of us, we were well into adulthood. we learned from appropriate behavior was. we learned what's appropriate, what libel, definition, bullying, abuses. i love social networks. i've been thinking about several things. one is we face a dire fiscal situation in the country that's being debated as we sit here. number one. number two we have a new way of technology, when you started and most of us did in digital, it provided surpluses to our country. how do we leverage what's happening in order to -- and the

most fundamental things and i have a lot of teens, including a gaggle of kids. i watch what they post. and i am friends with them, i follow them, they follow me, we have conversations about what they've posted across the line. we have conversations about what's appropriate behavior, we have conversation about apologizing to people that we've offended. this is all happened in my household. the thing that we've been talking about, at least the teen son and i wrote this about the family. to think about the family protection networking act where we literally like they had to do at the same age as the automobile where we licensed social network. educate, certify, and license social networking to teach people like we do right now in the state of network, a three tiered program to teach them how to become an independent driver. my son is 16. he started six months ago, he got a driver's license where he

could only drive with his parent. when you are 12-14, you can go only if they approve. parents have to get more involved. they have to help him understand what is appropriate behavior as we do have a family to driving to shopping to spending to communicating. we have to think about what can this mean to help protect our people as well so that free speech can proliferate. people aren't atrade to post. but laws are being broken on new ways. how do we allow freedom of speech and constitutional right to proliferate while we protect our people. but also create frankly a new revenue stream. just like the department of motor vehicles became a very big revenue. we have a new platform that we could also leverage to start ensuring that we are teaching our people, we are certifying them, we are penalizing them,

and taking away if they break certain laws like harming children or anyone else. this is something that i think is starting to gain steam in many corridors. of course, the popular, the one that tend to control the beltway and don't like to see this kind of proliferation. but personally, i think we have a great vehicle. 750 million people are now on facebook alone. we have the opportunity to think about where is this going to take our great democracy? we've seen democracies being tested and ones that are not by turning on and off switches and things. that's an interesting thing to observe and bring back. >> you know, i think -- i often think a lot of consumers don't even realize how often facebook changes it's policies. and -- which has been a big issue and, you know, many of you may not know this, if you don't

watch the privacy policy on facebook, rights to do things like use your pictures that you post in advertising across facebook to friends and other people who sort of demographically look like you. i think data is -- yeah, exactly. other bald people. yes. >> that's targeted marketing up here. >> twitter owns 100% of your image. from a financial perspective, 100% of your image. that means they could sell it, photofoes -- photos if you take a picture of dwayne wade at a bar. sell it and make $300. but there's also the consumers. >> exactly. any other thoughts on facebook? no. are you sure? >> well, only that facebook has a big new competitor under the marketplace with google's

approach, they are leading forward with the ability to do what you seem to have found easy to segment out your profile and associate with people that you only want to associate that seems to be the big thrust behind it. but google may start running the numbers and touches a significant number of people. while it might not have the eloquence of an apple product yet. they seem to be really well with technology. it'll be interesting to see what happens in a year from now where facebook stands, if google's attempt takes off. >> you need more artist in science. >> right. right. yeah. >> it's interesting. i think what the new offering from google really does is reflect much more the way we live. which is there are certain things we talk about with people in the office. there are other things we talk about with our families. there are other things we talk about with our friends.

the -- one the tricks with facebook is that we are talking to everybody the same way. and that just doesn't really mirror the way we behave as people. so i think that's really a point of exposure for facebook. and one that's, you know, led certainly to your point, michael, people are posting, you know, whoa i had an amazing night last night. up go all of the pictures from the party. then, you know, two days later they are interviewing for a job and somebody goes and checks out the facebook. it's like whoa. i don't think so. >> one of my favorites is some college kid who posted that he had met a girl at a bar last night and had a good time. and his mom liked it. and, you know, she wrote -- and he was like mom, what are you doing? she was like how do i unlike this? she was tracking her college-aged son. i thought it was interesting.

>> i don't mean to be misregulation, it happens to be approval. if somebody takes a picture of all of us, there's technology where it has to go to all of us on e-mail and we have all to click approve to have it posted. >> it's interesting. all of the stuff that we're talking about, facebook didn't exist or a lot of these things we're all learning and tripping and stubbing our toes, the companies that are creating it, and all of us participating along the way. it's all happening quickly. all of the ways is the version of did the operator used to listen at the switchboard when she put your call through? right. we've gone from that to the eighty to have three way calling when i was in high school and somebody listening. you always called somebody and somebody was like secreting listening. you move into the speed of which something can go up and or out through e-mail. as our technology and ability to

connect, there's all of the beautiful attributing of it. which are great. unfortunately, there are all of these stumbling blocks for the companies and being upfront which i don't think enough are being forward about the privacy information, all of the devices that provide gps. that's great if you are trying to figure out where the hall is, it stinks when someone is tracking you and you didn't give them that per submission. -- permission. if you tell a retailer any time you drive within five miles to send you 50% off, that's great. if they decide to do it on their own, that's not so great. that's the same technology that you love, but this is an interesting time with things moving so quickly. to like you said, there are some room for regulation. and there's some social responsibility that we as the citizens using these tools need to take a part in.

>> there's a really -- you know, there's this very interesting thing with advertising, which is, you know, when you are in the market for something, or when you are interested in something and you get a marketing message, it's really service. you know? it's like, wow, you know what, i was going to -- i am in the market for a sweater. now i can get one from 1/3 less that i was going to pay for it. fantastic. on the other hand, when you get those messages at the wrong time, or when you are not interested, they are totally obnoxious. and so one the tricks with technology is figuring out how we do get those messages to our customers when they want them. and when they are excited to get them because then they love it. >> yup. >> and every time that you get one when you don't, it moves you away from that company. >> agreed. agreed. >> it's interesting.

adgenesis is a company that's i'm adjusting and operating with. we work with publishers, just like an airline gives you point, or american express gives you membership reward points for using their card, we are going to help publishers especially give rewards. how we do that is we allow the partners that we work with from parade magazine to others to create video award. this is making advertising not allow, but rewarding. so that you pay attention. we start with a real good trick, which is asking the consumer. what is your life? what do you want to buy? not what you bought. amazon does a lot of what you bought. you like romantic novels. that's one aspect. if you are in a market for a phone, car, company, or whatever it is, you want to take as many seven passenger vehicle ads, as you can get to compare. what we do is you join, give us

information about your life, that we never share, sell, tag, haunt, hunt, market, any of that. we only use it to match you to brands that would be of most relevance to you. right now the little banner ads that you see on your web screens when you are all checking your e-mail, which you do, only generates about .5 click through. that means 99.5% of the ads aren't getting clicked on. what you are asking, what do you like? what genere, when you deliver, we ask for the point. for the marketers, it's valuable. for the publishers, we have to save. we have to save "new york times" and "financial times." we need to evolve and fund the

forms of communication that are vital to our country. >> and to say "the daily" too. >> to relocate. >> let's go down. >> we have to evolve our advertising so that we are able to -- because we really haven't evolved it. if you think about it, video has the biggest. how do we start to match it and cut out the fake crap. >> i want to riff on something that you just said. i want to talk about cure ration. they use a combination of age, and i think it's an interesting area of growth opportunity and

it's interesting to narrow it down. any thoughts on it? >> yeah, the -- we live in the incredibly exploding world of access and options and choices. listen, i live in this world. i find it completely bewildering it is nonstop from the moment that i wake up in the morning, monday to friday, to the minute that i put my head down on the pillow, it is an information fire house coming at me. work, friends, twitter, facebook, news, everywhere. and it's unmanageable. and it's hugely important to be able to find the outlets whether it's "the daily" or news and widdle down the topics that i'm interested learning about and pushed to me in a reasonable fashion. i'm 100% not on twitter.

period. 140 characters is not even enough to say good morning. i just don't think it's enough information to have a meaningful interaction with a piece of content. importantly, around the piece, it's important to not be digital. i have a beautiful house in month -- montauk, and i big -- dig a hole in the ground. i return to the digital life monday. i have a wide group of friends that will sit down at dinner. everyone's phone is out. we are all reading, tweeting, blogging, whatever it is that we are doing. we have to continue to find the balance of absorb information in

an efficient way. we are humans as well. >> i wanted to challenge. >> good. >> i would only challenge. i think that you are right. the touch points in working lives now, you wake up, you have a blackberry, you have an iphone, you are expected to read the e-mail on the way to the office before you sit in front of the computer all day and are expected to call through billions of e-mails, et cetera, but the thing i was going to get at is on the weekend. the digital transformation of information, versus the masses of information are two different things. you are saying you don't want to be digital on the weekend. i think the reason for existence of the daily is to be the future of newspaper publishers, magazine publishing for the future. no trees, no trucks to drive and have to distribute what were the old forms of delivery mechanisms. i think that there are delivery mechanisms that can transport to

us and deliver to us the kinds of journalism and or entertainment that we are accustom to when we want to consume them. and so the tablets are fascinating for that as a beginning of a delivery mechanism for that right now. what does delivery mechanisms look like that? does the tablet become the remote report for the television? we've talked about cloud base storage of information. so i think that we are going to have an increasingly digit tap world and reduce the need for paper and trucks to deliver and the delivery mechanism. >> fair point. and for the record, i did fix my tractor this morning with my ipad with an exploded parts diagram on the ground next to it. fair point. >> my wife takes the ipad into the kitchen and is, you know, dumping cake batter all over it. i'm trying to get her to realize

it's $1,000 piece of computer. >> there's a cover, put it on the refrigerator. >> you are a great knowledge. >> from martha stewart to "the daily" i can do a lot of technology. >> can you fix a tractor? >> i cannot fix a tractor. >> just quickly on twitter, i'm not a huge twitter. i use it for tracking people that matter to me. you know, to stay on top of different people in our business or things like that. but the numbers are just astounding. it took three years, two months, and one day for twitter to reach it's one billionth tweet. today there's a billion tweets being sent out each week. it's unbelievable when you start to think about the scale of

these things. when you look at how twitter was used in egypt, during the political uprising. that was like a main form of communication to the outside world. i think there's real value that it provides. but it's just astounding to me. >> you don't have to tweet to like twitter. i think that's the trap. people think you may have to log in to start to look. i love to watch broadcast news. i'm not a broadcast news correspondence. it's kind of that way. if you want to tweet and put stuff out there, great. i think that twitter actually like we were showing before provides a lot of functionality and perspective without you having to do it. >> i love things like flipboard that help take that twitter experience and put it, at least for me, into a format that feels a lot more familiar and engaging. and the way that i often use -- that's the way i typically use

twitter is very much like there are a number of different people that i follow, many -- many obviously in the digital arena. other in the art arena, or marketing, or design. and it really allows me to sort of like customize my news source. and i have to say i have found that a really good experience, i don't tweet much. >> i was going to say, i think twitter to, go back to the original question, i came across a great company for all of you called blurts, which is akin to no longer typing but doing an audio blurt. so you bring humanity back to the web. i think tweets, i don't tweet a lot. i don't really follow it. it's like a to do list that i'll never get to. it's like a constant -- my son will say i tweeted that on

tuesday. you got to be kidding me. i have to go back through all of the tweets to find your? but i think it's also about bringing people together live. i think you touched on that, anthony. all renaissance are defined by bridging geography and thinking people of common thoughts, ideas, experiences from knitting if we can crack this code from knitting to losing weight to dealing with a loss of a spouse what have you. how do you help people? the greatest information comes from the circles that google has touched on. >> i think what we are finding, you know, i was talking earlier, you know, when the gay marriage vote was going on in the new york senate. i was watching twitter feed live. i was watching it streaming on the web. at the same time, i was having conversations with people, both via twitter and facebook, my friends, about what was going on. and so it was pay -- it was

allowing us to share the experience, even though we weren't in the same physical place, we were still having a shared experience. when you talk about sort of the humanity, we were using technology to bring us together and to have a group experience even though we were physically in very, very different locations. >> then once it passed, what was on the news? everybody was brought -- they wanted to be with people to celebration. >> i think that's attributed to our evolution of being a part of the new way of communication. on the kindle app that we have up here, is david carrs. what the internet is doing to your brain, digesting the quick bits of information. the backlash against that, people seek that old -- some of the things from the old world to add to and bring along into the world that we have right now. we are talking about marshall earlier. the medium is the message. and the big freak out then was oh my god, tv is going to

displace books. books seem to be doing fairly well. i don't know that any of us would have imagined the portability of what digit tap -- digital looks look like now on your nook, kindle, whatever it is. we are.cc fun with reading a lot of books. you can read more now than you could have before. you take one and you have ten books with you. and the audio is interesting too, for "the daily" we produce 100 to 120 pages of journalism. we tell them from taking the best of all media. we have broadcast journalism, full screen photography, and long form written content. you can either type or leave an audio comment. it's fascinating to listen to someone who's articulating verbally a comment that they normally would have typed.

you can hear the tv in the background, or the dog, or the kids running by. the intimacy all of the sudden with the community that's a national community in a way that you wouldn't have before. it's the community because we both read "the daily" not because you are my friend on facebook. >> have you seen any real -- and i realize it's early on. have you seen any dramatic differences in behavior or colleagues from traditional, have they seen traumatic otherwise what you've just described in user behavior? >> we see that our readers are primarily news consumers. they are aggressive news consumers. they are reading at about five days a week, coming in regularly, the difference that you have from this than a regular newspaper, you can see when people are coming back. they are reading it throughout the day. which i think is very common do what you would do it you had a real newspaper. read some in the morning, stuff

it in your bag, pull it back out. we are seeing the same behaviors. you know, outside of that, the ability to share more easily, i think, i mean it just gives you all of the sense of kind of what their experience looks like. >> don't make my dizzy. >> i'm teasing. >> that was a great one to end on. born in debt. but, you know whereby i think that the only other thing that's different here is it is big mixture of news and entertainment. people are coming in from all different things. did you know that j-lo broke up? >> she and marc anthony? >> she is getting a divorce. right. so now that we know where you were when you found out about

this, where were you when you find out about osama bin laden? >> i said a unique story before. >> oh, i was on a plane from san francisco. we had saw something on cnn on the plane. then the woman next to me was on her -- she was on a iphone -- you know, laptop on twitter. that's how we had learned he had been killed. you know, we are in an airplane, 30,000 feet above the ground, following a story, realtime in twitter as it's evolving from rumor to con fir -- confirmation, all in fact stream of 140 character bursts of information. it was amazing. something like -- like a crazy thing i would have never imagined. never imagined. and -- >> when you landed, you

came in and out to the east end and dug a hole in the ground. >> right, right, right. >> you know the other thing that i have to say is pretty amazing is also just watching christine work with the ipad is -- you remember seeing minority report with tom cruise and him moving his hands and the screen of information. he said that's so cool. that's never going to happen. that's really cool. here we are like swish, swish, information. up down. >> beautiful segue. >> i think it's a great segue. i want to make sure we have enough time for questions. and just like this lady here in the middle, please don't be bashful. just yell them out. let's talk about mobile and tablets and platforms. mobile is exploding; right? there's 50 million smartphones

in the united states. iphone and android. >> and blackberry. they are still around. >> sort of. you know, 37% of the market is now made up of the android platform, and apple is 27 and blackberry is 22. if you, you know, went backwards 24 months, blackberry is the king. it's losing share. there's 400,000 apps in the iphone store. >> you are about to get in addition to the ipad, a whole slew of devices, the samsung, motorola zoom. >> and amazon, they are launching a tablet product in october, i believe. >> my prediction there is that we're going to see a lot of crappy tablet that is are, you know, apple based. and in about a year or so, we're going to start seeing $49

android or amazon based platform tablets. that is when we are going to see real critical adoption. >> there's interesting between those two. tablets and mobile, i just did it, tablets and mobile get clustered together. mobile is smartphones. we have also learned at "the daily" the way that people are using tablets is fundamentally different than the way they are using the smartphones. while it's true a lot of them are in urban areas are toting it around, the primary usage tends to be at home, on the couch, the television, or in bed. >> it's an additive. >> right. the mental state of the person is really different than the smartphone. and therefore, the kind of content that we present is really different. and creates great opportunities, i think. >> so mobile internet access from your phone. i think this is actually from the ipad as well. i think it's come together.

it has tripled the past three years. the next three it's going to increase 26fold. you think about people like cisco and you think about at&t, and you think about the network challenges they are going to have. we are not going to go down the path. >> didn't we have the same challenges with dial up? in the beginning with our computers and the -- i don't know how many -- i'm going to ask y'all this. how many years did it take us to get where we are than the speeds we are compared to. the 54 gig. >> it doubles every 18 months. the processing power doubles. it's increasing now. our bandwidth has been increasing, doubling every two years from a network architecture stand point, you get the crazy statistics where i don't know. how many people use netflix? streaming? yeah. yeah. that's fantastic.

that didn't exist two years ago. we were ordering dvds. of all of the internet usage across the entire united states, half of it in prime time is netflix being streamed. it's just incredible sort of -- i mean data that's being used. >> the other thing that's amazing about that, think about the economics of that. right, netflix has build a business where the primary cost of delivering that product, that bandwidth, netflix is paying nothing for. >> it's a great business; right? >> think about that. as you said earlier, think of ford selling a car where they didn't have to pay to build the car; right? netflix is paying to license the content. that's only a part of the delivery of that product. somebody has to have bought the device to watch it on, and somebody has to have paid for fr

the bandwidth. >> bandwidth is the new oil. they are going to start taking down the all you can use bandwidth. : outlet so we have to edolphus and industry how we are making money to supplement this. how tv role dhaka, tv was very expensive in the thirties. no one could afford it and what they did that's when we got mutual of omaha and -- there you go. i actually watched lawrence. >> he used to hide in a helicopter will jim wrestled with the alligator. estimate those are the kind of things you're seeing that come back. brands are going to start to supplement on the pay for the

band but because that is the new form of paying with your attention to this chemical is happening, especially sort oft's out here, there's a lot of p people when content relatederele businesses of one form or another. and we've seen this incredible transfer of revenue from conten creators to them but providersn and technology providers. provi. a really began to gather steam with apple and the ipod where of a sudden i'm paying for bandwidth, i am paying for and ipod, and a lot less is going to the record companies and the artist. now you're seeing it happen again with things like magazines and newspapers, people are paying less directly for content, and instead of paying with bandwidth and for devices,

and it's a really fundamental change. >> it's a laskier and troubling but exciting at the same time as someone just mentioned books. someone in my family who works at a very large publisher. i talk about this a lot on the digital side of marketing and she's been working with print and books forever. three years ago i remember the lunch we had and she's like i think we are done. this was just starting to come out. the kindle, the ipad. more books were sold last year than any other book. three years from now they believe more books will be sold in a year than the previous ten years combined. that is because of the access. now the financial , our book publishers making more money? no. >> but i think that's the challenge to them. one of the things i had up here, -- >> it's not the deily again.

[laughter] >> no, the waste land. if you envision with the delivery mechanism is. if you think -- if you continue to try to do things with a pre-existing framework but everything in the rest of the world is telling you that it's going differently, then you're not going to win. but if you look and say how we do this completely differently because this is an experience that people are having, by eating more tablets, connecting on wi-fi what are the new ways that you can bring things to the table? the only reason i brought this up is i was a literature major. i studied a lot of tsl yet and thought this was fascinating. you can hear him reading the poem. you know, you pick what your diman to hear he read it and this is in the framework of this one poem and it lends itself nicely, but the point is this was a complete free envisioning of the way this is put forward. so i think touch press is the

manufacturer -- i paid 14 for this apps of that's the other thing. if it's done right, here it is and it's it's on their. it's called tsl leah, the waste land. i bought it through the itunes store. this isn't the most expensive application i've bought, but life of others - have this place i would say is the going rate. i am happy to pay for this. this is robust but think about this season from a learning perspective. you bring to the surface -- people talk about how their children flocked to tablets and you increasingly hear the tablets are making their place in the schoolroom. if you can tell stories in this way and allow children to look at different paces and navigate we had before. and while i'm on this point, if we don't do that you won't get anywhere. the last ten or 15 years we have had police stations and x boxes,

cable-tv with 700 to 800 channels, animation brought to life. the whole lens through which the current generation of children the last 15 years has come into being has been through high fidelity, high-quality image recrimination and things they control and or plate. socially with games over the web with their friends. so, if we don't adjust the rest of everything else we want them to consume through those lenses it's going to be boring. would be the equivalent saying for us who are accustomed to high speed access on the internet to go and the only thing for all of your entertainment you can have high-speed but when you go to school and one you to go dial-up through aol. [laughter] of course they're going to be sitting their waiting for the page to come down distracted carving into the desk. you have to give them the equivalent of what they consumed, have been brought to consume from their entertainment into the education. i't