relatively high risk further this project? >> i'm sorry, could you restate that. i want to make sure in understanding the question. >> product sales have dropped 62% and 20 cents in february. the satire is further risk? >> at the price of their product installing, and assuming that the cost of the come to me are not commensurately falling, that whatever is to it. >> would've the same company's business model is dramatic fundamental changes in the market, people were not find the product like everyone thought they would, without further increase or reduce the financial risk of the come in a quiet >> again, let me ask you to repeat that so i understand assumptions. >> it was predicated for his product increasing but instead industry key scene, and then increase or decrease the financial risk? >> if a creditor was making an

assumption or acknowledge that demand would increase that would tend to reduce the risk. >> what if the turnout there they're a better finance creditors but the very large government guarantee and what if that company's technology at problems that the technical experts at department of energy assign to loan guarantee application actually has become me to withdraw about 1.8 as they didn't think it could be commercially viable. but that increase or decrease the risk of our hypothetical increasing on islam. >> as i understand, some think it would increase the risk. >> thank you. so i'm not talking about the lender. i am talking about the united states enrichment corporation, which assess d.o.e. for a $2 billion flowed guarantee to make fuel for nuclear reactors, almost four times as much as solyndra. members of congress have continued to insist that d.o.e.

approve it even if the price for uranium has dropped 22% since fukushima melted down. even as utility has abandoned their plans to build new nuclear areas. even after d.o.e. awarded another loan guarantee to another comp any to do the exact same thing. and two years ago, and d.o.e. did in fact ask uec to withdraw its application because of the grave concerns that tuv had put the tape elegy. based on the circumstances that i've described, a shrinking customer base, declining prices, intense competition and problematic type elegy, do you agree that d.o.e. should exercise particular caution before we risk aliens in taxpayer dollars?

>> i can certainly say department of the treasury in a few would-be extreme care should be taken in putting taxpayer risk are offering exposure to taxpayer. >> 13 house republicans including one on the committee wrote the energy secretary in february, urging him to quickly prove this uranium enrichment project. last week, speaker boehner stated that a denial of this loan guarantee was paramount to the obama administration be trained southern ohio. not giving in loan guarantees to the company that has these kinds of obvious financial problems it seems to me as not a betrayal of the taxpayers. do you agree with that clerics >> i prefer not to offer an opinion on that commissary. >> in my opinion, what betrayal is is in the republican budget

site cut clean energy by 70% next year 90% over the next three years. as solar and wind. that's what they're targeting. not cool, not nuclear. wind and solar, competitors to those incumbent industries. that's what this is all about. kill the competition at the nuclear industry has feared for years is finally arriving and wind and solar. keep the loan guarantees for those old industries. and that's what's happening on the hustler right now. that's what continues to happen in this committee. attacks on the clean air act, a tax on wind and solar. a tax on the future. and this is really a debate of the past versus the future and we can see that in the insistence the republicans have that loan guarantees be given to a corporation which obviously has a business model which is

failing. through thank you, mr. chairman. >> thank you, mr. markey. now the gentleman from texas, dr. burgess is recognized. >> thank you, mr. chairman. have some entries to what mr. markey was saying it certainly might be willing to work on the concept if he would be willing. and i think that's an important point of our discussion and certainly is something that the members of this committee should look at. let me also just say that i favor renewables. i've got a solar manufacturing company in my district. i'm not aware that got many loan guarantees. and i've got a big wind turbine to know they haven't gotten to celica product a very strong competitor in the market. they do compete against foreign importers for imports of foreign manufacture blade. but just remind people that

cheap brazilian plates will not stand up against the harsh texas wins like good old texas played that are made in gainesville, texas. i would encourage people to buy locally when they are buying long wind turbine blade. mr. burner can you answer dr. murphy's question. he asked if there were any other loan guarantee deals out there that work thing in your answer was you were not aware of any deals or work a situation. did i hear that correctly? >> that's correct. >> did so under come to your attention when it was in a work of situation? was there any point when you were concerned about what was happening with solyndra before it got to the point where it was in a work situation? >> only through the news, sir. >> funny faces in a different way. a lot of the stark turn as

solyndra seemed to create some of its own problems by accelerating for actually the budget department of energy created problems because solyndra was pushing because they had a photo op coming up in september 2009 i believe that the secretary and vice president biden was going to be brought in on telecommunications device. so you worry when there are time pressures on this loan if everything is done correctly. and just last week or two weeks ago ended the fiscal year, there is a big push to get a think of is almost a third of the total renewable energy budget in the stimulus bill. there is a push to get that out the door relatively quickly. i for one word about that. i wanted this committee to scrutinize that. but apparently there wasn't time to do so. are there any of those deals that are now made and the monies come out out the door, but they

went through rapidly. are there any update they give you heartburn, not necessarily a work of situation that because the business model itself remains he was sent to that might not work? >> i'm not exactly sure how to answer that question, sir. i didn't review every single project i came true. >> are there any projects to keep you up at night now? >> no commissary, not this minute because we don't make credit decisions on these programs. when you view those, we repeat the term sheets and things of that nature. so i don't have the kind of knowledge. >> but the review of the term sheet you're absolutely at peace with all of the ones that have gone through your off this? >> let me offer an answer. we did review all of the conditional commitment suffered in 19 loan guarantees issued.

we tipped off very -- we have time to end it off for a comment the department of energy on all of them. if i could just take a step back and say this, and all of these deals, the treasury is looking to do two things. and we did do some of the deals over the last six weeks last month. we are looking to make sure that the subsidy that is offered is needed to get the project done. in other words, could this occur through the commercial market that a government subsidy? the subsidy is needed, if it minimized so the taxpayer isn't exposed to more risk than it needs to be? >> i'm going to interrupt you because if there's a change in the environment as mr. markey was talking about come is that something that crosses the threshold that gets your attention? if there's something in the market the changes, the price of silicon, competitors and enter the market, defending that entering your decision?

>> we focus on terms and conditions that the actual loan guarantee, but we certainly would look at general market conditions and if we see some being weed out for advice. >> something that concerns me and it's not part of his investigation of discussion, but the waxman-markey bill was passed to this committee entered before the house in june of 2009 contained in it provisions for providing credit payments to sell carbon offset to other companies that weren't as green or claim. that never materialized. i worry some of these projects were developed in an environment where the secretary thought for someone thought that these credits with ebay or, the cells to be fair to other companies do not did not materialize because legislation never got to the senate, never got signed into law. he shall take that any at any level? >> if we are aware, we definitely take that into account. if we could analyze the right input on it.

>> can ask you one follow up being quite you have an inspector general? has that individual been involved in looking into this activity? >> the instructor generalist looking at our activities. >> mr. chairman, can i ask that report be made available to this committee when it is completed? >> ask him you cannot add that. >> thank you. you've been most generous with your time tonight or she lightness of the gavel ukiah today. >> at this time, we recognize this but are in for five minutes. >> thank you, mr. chairman. and i want to thank both of you for your time and attention and patience today. this is an issue that the taxpayers can you need to come to us with their concern about a tip place with the solyndra

process americans turned that this is being repeated for lack of attention to detail for the loan guarantees are being repeated in other programs. i do have a couple of questions that i want to ask. and i know we want to finish with the lobby or we had for the weekend. mr. burner, you have bandwidth treasury for 20 years, is that correct? >> that's correct. >> okay. how often does a lone work a situation come before you? in reading the documents for the hearing today in looking at your e-mail chain that you had with d.o.e. and with your staffers, you know, the workout language with repeated regularly and a couple of those e-mails. so how often does this come before you? >> we don't see workouts very often because he handled usually by the guarantee nature is.

we may not even know that a workout taken place because under the guarantee the agency may pay us directly and leave the original documents in place. >> okay, so basically you're part of the due diligence is to provide the guidance that is given in the february 10 e-mail that you had to frame suzanne. i guess that would be correct, stating that if there are to be adjustments that may include subordination of solyndra islam, and this would need to be a referral to gog a for the authority? >> in this case, i was attempting to offer some experience and advice to a couple colleagues in something that may not have been aware of. >> already. then let me take you on through. let's see, there is another e-mail that i have. on august 12, 2011, e-mail at

11:51 a.m. where you are asking for in this comic can to get an update on the status of solyndra today? if so, please call perl. would you like to comment on that? why was solyndra still on your plate? looking at solyndra, if you are there to offer the guidance i meant to help them with how to go, how would you have reentered that process in august? >> in this case, the request for getting an update came from a supervisor and making people were starting to hear that there were problems with trained three. >> and the supervisor? >> it was mary miller. >> in the shia treasury employee? >> she's the assistant secretary. and she had expressed to you?

>> i heard it in directly, but there is a request that we'll see if we get a briefing on solyndra. >> okay. that is great. and i have an l.a. times article that i have looked at a september 26, 2011 article that references the white house meeting and may not tober, director of the national economic council intimidate or a treasury secretary expressed concern he does the selection process for federal loan guarantee wasn't rigorous enough in race to race that funds could be going to the wrong companies, including ones that didn't need the help. is it fair to say that the problems with this process with loan guarantees such as solyndra had risen to the level of the assistant secretary, mary miller and to the secretary himself? >> yeah, why didn't i answer

that. there were principles and deputies that these agencies. the department of energy, treasury department, office of management and budget going up the line to the deputy secretary who would periodically review the status of this program. nsa is batman though you've quoted aleuts, one of the issues that was discussed was the amount of subsidy that may be needed in order to carry a limited projects, which is what i was talking about a little earlier. >> webcast events. would be like every payment to the american taxpayers, will assess the be repaid or was treasury restructure the repaid, has there been a discussion on that issue? >> in the case of solyndra are you asking? >> yes. >> now, that would be an issue for the department of energy and

they would not be the treasury. >> you would not be involved at all. thank you good idea back. >> the generally peels back. gentlelady from colorado. >> thank you, mr. chairman i want to clarify the unanimous consent we have in these documents. we have unanimous tent at the february 15, 2011 legal memo and the draft january 9th team, 2011 legal menus and subordination would be entered into the record with married actions. in terms that financial information that is the addendum, our staffs have agreed that they would work together to make sure that there is no confidential information from criteria or other sensitive information that work together to redact whatever they can and then they'll put that in the record. >> that is my recollection, but i will refer to counsel to agree that i agree.

>> mr. chairman. >> said the council and i agree with your verbiage. >> i think the ranking member meant that they would redact what was necessary, not what they can. >> yes, correct. >> on they would be too whidbey teacher meant in a bipartisan way to be prepared cherry or sensitive business information. so we're clear? already. mr. bilbray, you're recognized for five minutes. >> thank you, mr. chairman. see there is a lot of statements about agendas here, i want to make it quite clear that this number does not have an ax to grind with the secretary of energy. i just want on the record that i finally we have a secretary of energy who is a scientist -- if this is, not political

operative. and so, this member's intention is to get to the facts and find out how this could have happened, especially when you have somebody like secretary chu running a department in seeing what appears to have happened in a case to me that the biggest problem was it appears that politics and prejudice and bad policy created a situation that could have very possibly cross the line leader into a legal item that we will clarify obviously in the coming weeks. just for the record, i don't want anyone to think this member has an ax to grind against the secretary. i hope to god that this does not cause him to have to do with the listed. and that is basically step aside and stepped out because this problem. so everybody understands what

this number comes from. in fact, the secretary has the possibility of finally fulfilling the goals of the energy department by creating energy opportunity rather than continuing to allow allow it to dwindle. mr. grippo, questions about the d.o.e. loan guarantees that were just given out under the stimulus deadline on the 30th. in fact, on the day of the deadline, it's closing $4.7 billion of love are given. right on the last day. was the treasury consulted about each of these deals before the close? >> yes, we were. in some cases well before the close. >> do you believe the treasury had adequate time to consult tunnel beside him? >> yes. >> your review -- and very few coming to believe the financial model for these deals were

right? do you think every sound? >> let me be very clear about how i answer that because we do not do off the due diligence for department of energy data spirit we we're not privy to the back of information. >> obviously the taxpayers -- go ahead, i'm sorry. >> that we are not making a credit decision. we are not determining whether this is a group are your risk and whether a loan should go forward. we are commenting on the terms and conditions of the loan. t. what should the interest repeat? what should the duration of the loan be? so we did not have insight for my comment on the details of the actual financial model. >> okay, let's look at it from a holistic point of view. what do you think about the overall health of the d.o.e.'s loan guarantee portfolio at this

time? >> it's difficult for us to judge without all the information, but the best answer i can give is that it is too early to tell how the overall portfolio will perform. there are dirty semi-transactions. we've been talking about one of 30. we are not aware of others are having problems. and so, it will take time to watch the portfolio performed. >> well. if you're my start broker and telling me and gave me that, i would not be really enthusiastic about putting more investment into it until i see how this thing shakes out. is that a fair perception from an investor's point of view? >> it would not be. i am not implying that we perceive there are problems -- other problems. >> you still stated --

>> as you indicated, many of these deals closed a few weeks ago and obviously we have to wait to see them perform. >> okay. and then i ran them about the conditions in 2009, the treasury expressed concerns about there wasn't enough equity in the deal, basically that there are concerns that there was an afghan in the game for some of these guys. under the 1705 portfolio, do you think that there was enough skin in the game in this instance with solyndra? >> i do not actually recall the details myself of that analysis, but it would not be uncommon for us to comment on the amount of skin in the game and to argue for other equity investors to

have more skin in the game to protect taxpayers. >> thank you very much. everything done last week, we don't know how much of a risk it is. we've got to wait to see how it evolves. >> i think that's fair. >> i yield back. >> dr. jean grey, you're recognized. >> mr. chairman, thank you. mr. grippo, thank you for testifying from the department of treasury in thank you for your patience. some of these questions that i'm going to ask me about it and asked. i had to miss some of this to go do an interview. first of all, mr. burner can be your experience as chief financial officer this federal financing income which actually made the loan, provided the funds, have you been involved in restructuring of loan guarantees before it either in and out of government? >> only peripherally. >> let me ask you then come in maybe it's a bit hypothetical,

but in cases where the terms of a loan guarantee were changed or restructured by other agencies, have those agencies that the approval of the department of justice to your knowledge? >> if they don't have their own authority, then they would seek approval of department of justice that they have their own authority they would not. >> then, met me ask mr. grippo because what you just said is the crux of this matter. is that the reason, mr. grippo, that the department of treasury said to the department of energy, what, there's tale here. there's a red flag and it is our strong advice that you consult the department of justice before going ahead with this restructuring? >> we did not know what all of the department of energy is a 30 square. we did not even know details of the restructuring. we had heard that there would

restructuring and it seemed like good advice in our consulted a girl to tell them to seek -- to go to the department of justice, which is customary. >> i commend you for that. your absolute correct in doing that. either one of you, why do you think the d.o.e. was so hesitant to seek doj approval to get a little bit more security, you know, why do you think they didn't do that? >> i don't have an answer for you. >> mr. burner can any opinion on that? >> i'm sure they have their reasons. i'm not really sure they had a legal theory on the spirit >> yeah, yeah, well it d.o.e., department of energy was so confident in a legal analysis that the subordination was prevented, why not go to the doj, department of justice, just heavier bass? just to get a little backup.

cya rather than cyp. other agencies typically seek loan guarantee in restructuring. i answer that question. you said you are not really sure if that. if that your answer that you don't know? mr. grippo collided nasty that specifically. two other agencies typically seek to department of justice approval of loan guaranty restructuring? >> well come i don't have specific knowledge, but in generally familiar with what the statute says. unless an agency has its own authorities, the procedure is to talk to the department of justice spirit and matter are doing. we were making a procedural college say we can't make a judgment on what's going on here. we are not making a legal opinion. >> i'm not putting words in your mouth good i do want to do that,

but it sounds to me you were strongly suggesting to them since they did not have the statutory authority. i mean, i'll refer back to the energy policy act of 2005 under title 17 incentives for innovative type ologies section 1702, terms and conditions. paragraph d., sub paragraph 3. subordination. you've heard this several times for members on our side of the aisle. the obligation, that is the loan shall be subject to the condition that the obligation, the loan is not subordinate to other financing. so that was your concern, was it not? >> we were not interpreting the statute. we were recognizing it and offered the advice. >> well, i think my first great-grandson could pretty much read and interpret that. it doesn't take a rocket scientist. that's as plain as the nose on your face.

and they literally ignored -- ignored the warnings and a hat with this. and the result courses the taxpayer, is that a subordinate position to $75 million for additional about it. and when mr. silver with here, we have it on video and audio. i mean, it's clear but he said to us. look, we were thinking in our mind that the taxpayer would come out under if we found a way to circumvent and break the law. and that is what it's all about. mr. chairman, i go back. >> thank you, mr. gingrey. gentleman from louisiana, mr. scully. >> thank you, mr. chairman. i appreciate the witnesses being here to answer questions as it relates to the department of treasury's role in the solyndra

scandal. as i look to the e-mails, starting with this february 10th e-mail of 2011, mr. burner, that was when you sent an e-mail over to the department of energy expressing your concern about the restructuring. he later sent an e-mail back. i think the original e-mail us on february 10. later that day, you've got e-mail that bad could you give me a call to discuss? this is enough in department of energy's legal counsel, where they ask you to discuss this. there's no e-mail chain here. who are other people involved in discussions that you had about this concern that you are raising? was it just a legal counsel staff over at department of energy? is now the e-mails were on phone calls or conversations offline.

.. at the office of general counsel at treasury. >> okay. when you get outside of treasury, clearly as you were e-mailing with the department of energy about the concerns that you expressed on february 10 and

you actually cited a number about of statutes that, you know, i'm sure your legal counsel had given you the statutes statutes to cite and you specifically cited some statutes and went further to discuss your concerns that a sub bored nation, putting the -- subordination, putting taxpayers at the back of the line, didn't meet muster and you said consult with the department of justice. >> we didn't make a judgment on what they were doing because we didn't really know what they were doing. >> you were hearing this from omb. you were hearing they may have been subordinating the taxpayer. you cited some statute that said you can't do it, basically. you don't have legal authority. that's why you need to consult the department of justice because i think in your e-mail, reading from your febuary 10th e-mail, unless other authorities exist the statute rests with doj and the authority to accept compromise of the claim of the u.s. government in those instances where the principal balance after debt exceeds $100,000. you specifically said you

can't subordinate the taxpayer unless you have some approval from the department of justice. >> we were specific on the fact that they should go to the department of justice. >> and right, going --, going to the actual question, the next e-mail you got back was, could you call me, could you give me a call to discuss, thanks. and that is from the department of energy's legal counsel. so again, now we're going off the e-mails. who all were involved in those discussions, not e-mails but actual discussions? was it just the department energy? was anyone from the white house involved in those discussions? >> i have no calls from the white house. >> who else at the department of energy was, just their legal counsel? >> there were four of us on the phone call that had the discussion. >> you and who were the other three? >> a member of my staff. the director of portfolio management and, susan richardson from the from the department. >> there was gap between the february 11th e-mail and the next e-mail we have here is

august 12th. there is a pretty substantive gap and then in those e-mails, we've got the folks over at doe and some other people at the department of treasury getting involved in this and in fact we've got, i guess your superior at department of treasury, mary miller. you said she is the assistant secretary? >> actually mr. grippo here is my superior and reports to -- >> because mary miller is involved in a e-mail i may be on a call tomorrow morning about the solyndra restructuring. what does the statute say the government put in subordinate decision. we said doe needs to consult with the department of justice. this is mary miller above you expressing concerns. at any point, she even refers to in later e-mail a july 2010 concern that the department of treasury raised with the department of energy. at any step of the way was there, was there a feeling that they're not going to comply with the law? y'all say in your e-mails.

they're not following about what we say about getting justice involved. why didn't y'all get justice involved? we're talking 535 million here. another $4.7 billion went out the door a fuse weeks ago. >> congressman i will answer that because this refers to variety of e-mails here and that is important question and important question for the committee. it is not our role to interpret the department of new york's statutes and authorities and in no case were we ever doing that we were never rendering a legal judgment as to whether they were complying with the law or -- >> you were telling them they should consult with the department of justice. >> we were identifying a issue and asking a question. we weren't answering it or drawing any legal conclusions and, in fact that's what -- >> you're citing specific statutes. >> we are, we are citing statutes but -- >> if you're concerned that somebody is, please don't, please go comply with the law and you don't hear back from them. at some point you keep hearing they will not comply with the law don't you feel

compelled to alert the department of justice who you're telling them to alert but they're ignoring you? >> it is not really the role of the department of treasury is manage -- >> y'all are cutting the check. you're cutting taxpayer checks. >> these are all department of energy authorities. would be highly unusual for us to insert ourselves in that way in management of another agency's program. >> thank you. >> thank you, steve. >> mr. chairman i do have a point of information because i did ask the and i got a i got an answer from the head of the loan program at our last hearing under oath. he said he would get this whole committee the names of all the people involved in the chain to subordinate the taxpayer from the white house on down. i asked him under oath and he said he would get me that information under oath. i know he resigned now but i have a question to legal counsel or somebody on staff, are we still, are we still going to be able to get that information? >> yes. >> that is critical information. >> it will be added to the questions. >> thank you. >> for the record. >> yield back.

>> gentleman from colorado, mr. guard inner is recognized. >> thank you, mr. chairman and thank you as well for the witnesses for spending time with us today. a couple of questions and to follow up with what mr. scalise had said. you identified that your roles at the treasury department are twofold, both as lender and as consultant. as a lender don't you have the responsibility to refer this to doj? >> we actually do not. if you look at the statutes, what is governed in the federal financing -- >> you consider yourself a lender? >> it is processing a loan but the department of energy is making the credit decision. on the loan. >> why as a lender, you're the federal finance bank, don't you have an obligation, fiduciary as a obligation as a lender to the people of this country? >> we certainly in our consultative role have a responsibility to raise these issues and questions which is what we were trying

to do. >> in you're consultative role includes going to the department of justice saying hey we are afraid, i think at one point you made the statement you had said on things that raise issues of compromising a claim of the federal government? >> well, in that instance our advice was to, to refer the matter to the department of justice. >> and so why wouldn't you go to the department of justice? >> the treasury department? >> yes. >> because it's not our statute. we don't have, we did not have all the facts. we did not have details? >> why didn't you have the facts? >> because it is not our program. we, to be clear about our role in the restructuring -- >> but you're the lender. you call yourself a lender. >> federal financing bank did issue the loan but to be very clear about the responsibilities it is the guarantor agency, in this case the department of energy which is assuming 100% guarantee of the loan, is deciding whether to make

it. they're responsible for monitoring it. they're responsible for all of the financial aspects of that credit risk. it is not the treasury's responsibilities to monitor that indeed we would not have information to do so. >> when you call yourself a lender as the federal finance bank, and in this particular instance because you gave 100% of the money. there was no bank as an intermediary. i would like a list of all other loan guaranties that you're actually not just guaranteeing the loan, you're actually paying 100% of the money, cutting out the bank itself. if i could get information on other instances where you've given the money just directly i would appreciate that for the record if we could. but, if you're the lender i don't understand why you wouldn't ask these questions. i do have some other questions i do want to get to. mr. grippo, i refer to tab 3 in your binder there is an e-mail dated july 26th2010, between treasury omb and doe staff. the e-mail reference as conversation between the

agencies on solyndra and doe's monitoring plan. did this, why did this conversation happen in the first place? >> i am, i was not a party to this e-mail. this took place in july of 2010 and the most complete answer i can give you is that the various agencies, predominantly omb and the department of energy, were having weekly discussions on the status of the loan program and the efforts to monitor the portfolio. >> were you concerned about doe's monitor of solyndra? >> we did not have any specific information from the department of energy and certainly didn't have any direct contact with solyndra that would -- >> so -- >> inform our judgements. >> you were not concerned about doe's monitoring of solyndra? >> as a general matter we felt that the portfolio should be properly monitored but we did not have any specific information about solyndra. >> now this e-mail exchange

actually took place shortly after solyndra had pulled back their ipo, is that correct? >> yes, i believe that's correct. >> three months after its auditors and about three months after its auditors doubted solyndra's ability to act as going concern is that correct? >> that's correct. >> in this e-mail appears omb and treasury both on this e-mail are asking for a number about of pieces of information from solyndra that would indicate its financial health is that correct? >> yes. >> financial state us, financial model, current cost data. why were you asking about this? >> our role is, as the consultant to the department of energy under the statute is to be helpful wherever we can. we felt we had experience with federal credit policy and with corporate finance that could be of use. this is an e-mail from the office of management and budget to the department of energy. we contributed to this because we felt we had

something to add and can help. >> so were you concerned then with this loan, or the monitoring? >> we -- you asked for a lost information here. current financial statements financial model. tear sheet summary, actual performance numbers. number variance reports. market price, monthly production, credit committee papers. it goes on and on. were you concerned about the loan? >> this e-mail from the office of management and budget and department of treasury. >> treasury is on the e-mail. >> we did contribute to it but we were not responsible for send of this or monitoring of portfolio. >> are you concerned there are others out there like solyndra? >> no, i'm not at this time. i don't have any information that would lead me to have additional concerns. >> mr. chairman. i ask if i additional questions could submit those for the record? >> yes. you may submit those for the record. gentleman from virginia, mr. griffeth is now recognized.

>> thank you, mr. chairman. mr. burner, you sent an e-mail to frances and susan and i believe that is susan richardson and friends ses, i apologize, can't pronounce her last name. is that correct? >> that's correct, sir. >> can you pronounce her last name for me so i can get it right. if you can't, okay, i understand. >> i could try but -- >> apologize to frances formally. nowachko. >> all right. and you wrote that to both of them on febuary 10th. you got a message back from frances on that same day that says there has been a gross misunderstanding. is that correct? >> that's correct, sir. >> then on february 11th you got an omb circular from frances, susan, does not appear to be on this, is that correct? which says, and i don't know where we are, somewhere, i don't know where. i can't keep track. i don't have tabs so i have

to try to figure out by counting. something -- >> there is excerpt from an omb circular that susan sent. >> and that says work -- do you have a copy of that in front of you? >> yes, sir. >> that says, does it not, workouts mean plans that offer options short of default? that is the first phrase, is it not? >> yes, sir. >> and then it goes on to explain that is not modifications? that is not a modification at the very end, is that correct? >> that's correct, sir. >> at the time you received that you were not away of the -- aware of the legal memorandum that doe had that susan richardson was in draft form and later on february 15th became a formal form, at least according to what we have today? you were not aware of that legal memorandum, isn't that correct? >> that's correct, sir. >> and notwithstanding the fact that you were getting data or copy of an omb circular from frances, that

said that, let me quote that again. that said, workouts are mean plans that offer options short of default, and that, and what she was basically saying to you, we don't think that we're modifying this loan or we're doing something that would create the necessity to consult with you all, isn't that correct? that was the purpose of these e-mails and conversations? we don't believe that we're making a change that puts, that compromises the taxpayers position, isn't that correct? >> as i recall, that's what they were, that's what they were saying. >> that was the general demeanor. they're sending this to you on february 11th but the memos we're having a big fight are dated january the 19th. as i point out my comments earlier, first line of third paragraph i know you don't know anything about this but

just pointing out ought to you, a default has occurred under loan guarantee agreement in relationship to solyndra. is there any way in your mind that frances wouldn't have known that the legal opinion was already rendered that said there had been in fact a default but now we're going to try to fix it when she is trying to tell you that workout means plans that offer options short of default? >> i can't comment on what -- >> can't comment on that. and further, it is, in fact, you know, peter biger. >> mr. biegre. >> and he is attorney is he not. >> he is staff attorney at treasury department. >> sew works with you all? >> yes, sir. >> and subsequent to that, are you aware that he, he stated in a memo that claimed compromises include loan workouts? are you aware of that? can't tell you what tabitha

is. can you tell you. back out here on mr. bieger's august 17th2011, mem up did. title, authority to compromise claims owed to the government. >> that's the first time i've seen this memo sir, but it does say that. >> it does say that, does it not? >> yes, sir. >> yes it does. and so i would have to say to you, based on the evidence that you now know that there was a subordination of $75 million that it appears in the restructuring they may have agreed to forebear payments totaling $30 million for three years, wouldn't you agree that those terms sunday like a substantial change under the regulations regarding this loan guarantee program? >> substantial change? it was certainly a change, sir. whether it was substantial is a -- >> but it would be your opinion, would it not, i'm asking for your opinion -- >> that is really something the department of energy would have to answer it being their statute and

indeed their program. and treasury would not have offered even in these e-mails is not offering any legal interpretation. it is, it is citing the statutes only. >> so if they had agreed to completely forebear the entire loan wouldn't matter if they discussed it with you if they decided it wasn't substantial change is that what you're saying. >> i'm not a lawyer and not treasury's role to render that judgement for doe. >> what is purpose having you in the loop if you have no authority? i yield back. >> thank you, i ask unanimous consent to offer mr. president.. ompeo to ask questions since he is not a member of this subcommittee. hearing none you are recognized. >> thanks, mr. chairman and granting me consent to ask a couple questions. i will try to be brief. i appreciate you are gentlemen being here today. this is third time we've had folks to come. we can't have folks take responsibility.

doe former official. two senior solyndra executives took the fifth and today we hear a lot of that's not my job, that's not my role. i hope you can appreciate the frustration that we're having as we try to get folks to answer questions about these very important matters. mr. grippo, let me start with you, i want to go back to almost the very beginning. there was e-mail to tab 1, march 19th. and, the treasury review board at this point approved a conditional commitment on march 19th. excuse me on march 17th. and you all expressed concerns on march 19th. that seems backwards to me. so you talk about your role consultatively. are you with me? looking at tab 1? there is e-mail expressing 15 or 16 concerns the treasury department had? >> i'm looking at that tab, yes. >> the conditional commitment by the credit review board happened two days earlier on march 17th. >> i have to be honest i'm not aware when the conditional commitment was -- >> if was on march 17th,

would you find that odd your consultationing your comments were still being worked after the date that the conditional review had been made? >> really can't say. i'm not sure. >> do you think it would be okay, assume the fact that march 17th was the date that the conditional review had been approved. would you find it odd that you were still making comments after that? >> again, i don't know when the conditional commitment was offered. >> that's not what i asked. >> i understand. >> okay. >> i don't know when the conditional commitment was offered. >> all right. >> we had the opportunity to provide this input my understanding. >> gotcha. very good. mr. burner let me turn to you turn sort of more toward the end. tell me what your role is today now that this business is bankruptcy as lender trying to collect this money on behalf of the taxpayer? >> we have no role in collection of taxpayer. we have the guarantee so doe is paying us when and as due, and it is my understanding that they are in bankruptcy court at this point. >> so has doe paid you?

>> doe has paid us, has and will pay us when it has according to guarantee. >> so when would that be? >> we receive regular payments and then at some point i assume the loan will be extinguished by full payment. >> so when's the next payment due from doe? >> i don't have that on the top of my head, sir. it is a semiannual loan. >> but they have not miss, doe has not missed a single payment to the ffb to date? >> no, sir. >> they have made all those payments. thank you, mr. chairman. i yield back the balance of my time. >> gentleman yields back. and, there's no other members wishing to ask questions. so, i want to thank --. >> [inaudible]. >> so, mr. chair, or i ask unanimous consent that the contents of the document binder be introduced into the record and to authorize the staff to make appropriate redactions. >> no objections. >> no objection.

so without objection the document will be entered into the record with any redactions that the staff deem appropriate. so at this time we thank you, ranking member and i thank you for your patience, for your dedication and your testimony here today. the committee rules provide that members have 10 days to submit additional questions for the record to the witnesses, and there already has been one member that has suggested there will be additional questions submitted to you. so we do appreciate your time, and we are adjourned.

[inaudible conversations] >> a quick reminder if you missed any of this hearing you can see it in its entirety on our website at c-span.org. go to the c-span video library. we will have more live coverage coming up for you today here on c-span2. at 1:50 eastern about an hour from now remarks from president obama and south korean president lee. think will be in detroit and touring employees at a gm car plant there. the remarks begin 1:50 eastern on c-span2. >> of course i am delighted

but not surprised by the final repeal of the 1 eighth amendment. i felt all along that when this matter was properly submitted to the rank-and-file of our people, they would readily see that it had no place in our constitution. >> he served as governor of new york four times. though he never attended high school or college, and in 1928, al smith became the first catholic nominated by a major party to run for president. although he lost the election, he still is remembered to this day by the alfred e. smith memorial dinner a fund-raiser for various catholic charities and stop for main presidential candidates every year. al smith is one of the 14 men featured in c-span's new weekly series the contenders. live from the state assembly chamber in albany friday at 8:00 p.m. eastern

>> transpourtation secretary ray lahood yesterday described partisan rancor in washington the worst it has ever been. he made his remarks at the national press club and said congress must compromise on the american's jobs act and get the country back to work on the nation's transportation infrastructure. this is about an hour.

>> good afternoon and welcome to the national press club. my name is angela keane, reporter for bloomberg government and membership secretary of the national press club. "we are the world"'s leading professional organization for journalists committed to our profession as future with programing events such as this while fossering a free press worldwide. for more information about the national press club, visit our website at press.org. donate to programs offered through the public through the eric freidheim, national library, visit press.orl press.orlg/library. i would like to recognize your speaker. our head table includes guests of our speaker as well as working journalist who is are club members. if you happen to hear applause in the audience we note that members of the general public are also attending so it is not necessarily evidence of a

lack of journalistic objectivity. i also like to welcome our c-span and public radio audiences. our luncheons are also featured or member-produced weekly podcast from the national press club available on itunes. you can follow the action on twitter, using hashtag, nbc lunch. after our guest speaker concludes well have question and answer session and i will ask as many questions as time permits. time to introduce our head table. note that journalists present at the head table does not imply or signify endorsement of the speaker. i asked each of you ad the head table to stand you have briefly as your named announced. jennifer michaels, editor of aviation daily. chuck lewis, senior he had as hearst newspapers washington bureau. honorable roy kinets undersecretary for policy at department of transportation and get of your speaker. silvia smith, features editor for state news at the aarp bulletin and speakers committee member who organized today's lunch.

thank you. ed wiktins transportation trades department of afl-cio and guest of the speaker. skipping over podium. marilyn gewacs. speaking over our speaker. washington bureau chief of "the buffalo news.". jill sukman assistant to the secretary and public affairs and guest of our speaker. patrick host, freelance reporter and vice-chair of the press club's young members committee. cath lynn skiva reporter for "chicago tribune" washington bureau. matt malarcik president of the advocate us group. [applause] we last invited secretary ray lahood to speak at the national press club luncheon when he was newly minted secretary of transportation. he was one of two republicans in the new democratic president's cabinet. to say it has been a rocky road since that may 2009 appearance would overstate

history and torture a metaphor but lahood's tenure as secretary of transportation has not been without some bumps. in the past three years transportation issues and industry segments made headlines frequently. faa partially shut down during the debt ceiling standoff. republican governors sending back stimulus money instead tended for high-speed rail projects the toyota cars recalled worldwide over safety issues fighting successfully with new jersey governor chris christie over the money department gave new jersey over a tunnel that christie decided not to build. there was showdown over the highway bill though at the last minute the congress passed a last minute extension. it did not address the nation's infrastructure needs without addressing the underlying funding issues. he helped spend the stimulus money that was the first big transportation infusion in many years. and mr. lahood has put one of his personal passions, distracted driving on the radar across the u.s. but perhaps one of the biggest

expectations of mr. lahood as transportation secretary had nothing to do with planes, trains, trucks, highway, fuel economy standards or seatbelts and buses. as long-time and well-liked republican congressman who planned to retire at end of 2008, lahood's presence in president obama's cabinet was expected to give a democratic white house vehicle to work with republicans in congress. the kind of description with that relationship right now is it is a work in progress. transportation whether it is to work for personal pleasure for shipping what america makes and buys and or jobs for it provides touches all our lives. please welcome me in welcoming transportation secretary ray lahood. [applause] . .

>> we are grateful for her service. i also want to say a special word of welcome to these georgetown students who are here. i hope you're here because you're interested in transportation, but i probably know better than that. maybe you're just you because your professor told you, you have to be here. but in any event, we are delighted that you are here. wish you well in your studies. i want to say, to begin with,

that what i'd like to do is talk for a few minutes about some issues that i feel very, very strongly about, and then obviously i'll be happy to answer any and all questions that angela decides she wants me to answer. i want to talk about what i believe is on the minds of americans today, which is getting family, friends and neighbors back to work. since labor day i've been to 10 states around the country. and what i found is that every family know somebody that's unemployed in america today. and every family has somebody that's unemployed in america today. i don't know if that condition has ever existed during the time that i've been in public service for 35 years, but it exists today. and we have millions of people

who want their job back, and countless construction jobs waiting to get started. so if you'll indulge me for a moment, i'd like to start by reading the words of a newsmaker from another time. and i'll begin with this quote. one of america's great material blessings is the outstanding network of roads and highways that spreads across this vast continent. he continued, freedom of travel and the romance of the road are vital parts of our heritage. they also form a vital commercial artery unequaled anywhere else in the world. and the passage goes on, but let's face it, time and where have taken their toll so i am asking the congress to approve a new highway program. it will stimulate 170,000 jobs,

not a make work projects, but in real worthwhile work in the hard hit construction industries, and an additional 150,000 jobs in related industries. as a result, the speaker concluded, we will be preserving for future generations highways, a highway system that has long been the envy of the world. end quote. nobody in this room will be able to guess who said that so i'm going to tell you. president ronald reagan gave that speech. the date was november 27, 1982, just 40 days before president reagan's made the surface transportation assistance act law by signing it into law in a five week period, which included christmas and new year's,

reagan's transportation jobs bill passed a congress controlled by the opposition party, which only weeks before had picked up 27 seats in the 1982 midterm elections. and by the way, that particular piece of legislation also extended unemployment benefits, which president reagan himself called, i quote, badly needed assistance. talk about a bipartisan jobs package. that was it. wouldn't it be great if we could re-create that kind of history today in washington? and i remember this very clearly because i was about to start a new job as a staffer for republican leader, bob michael. the man they called the greatest speaker the house never had. leader michael thought

tenaciously for president reagan's transportation bill, but only because he was the president ally in congress. but also because he knew that investments in roads, bridges, transit systems were an essential way to put our illinois constituents and americans back to work. so, here we are today, three decades later, and the same and american roads and bridges and transit systems are in greater need of repair than ever before. today is the 35th day since president obama took to the house ross room and asked congress to pass the american jobs act. and unless there's some kind of miracle between now and the next tuesday, the 45th day, will come and go with no relief for friends and neighbors looking for work. the fact is we have a crisis in our country.

our citizens, our friends and neighbors, family members are struggling amidst the worst economic conditions of a lifetime. our transportation systems are overburdened and fast becoming obsolete. our politics are so broken that we can't connect to people who need work with the work that needs to be done. our institutions of government have become so paralyzed that we can't impact tried and true policy prescriptions. bipartisan remedies that have a track record of improving our economy's well being. think about the reality i deal with every single day as your transportation secretary. american roads are so choked with congestion that the average commuter, all of you know this, spends 242% more time stuck in traffic and when president

reagan signed that surface transportation bill in 1982. this drains $100 billion in wasted fuel and lost productivity from our economy annually. that's as much as the united states spent on r&d for the entire apollo space program adjusted for inflation. the same time, bridges are crumbling beneath our wheels. more than one in four of america's bridges are substandard. one in four, including an astonishing 12% that are structurally deficient. that's 68,858 bridges that, while safe to drive on, are nearing the end of their life span. just look at the sherman that and bridge were i was at recently, which links louisville, kentucky, with southern indiana. three weeks ago officials discovered significant cracks in the steel support beams of the 49 year old bridge. as a result they were forced to

shut the whole bridge down, all six lanes of i-64 and u.s. 50. the local traffic was so bad that residents -- our aviation system is reaching its capacity, too. the united states is now home to the world's worst air traffic congestion. a quarter of our flights arrived more than 15 minutes late. and our national average for delayed flights is twice that of europe. meanwhile, compare this to transportation systems around the globe. the chinese just opened the world's largest bridge, long enough to cross the english channel with six miles to spare. they are also paving tens of thousands of miles of expressways. by the end of the decade they will surpass the united states in total highway distance. the port of shanghai now moves

more container traffic every year than the seven top u.s. ports combined. or think of this, in the 14 countries with true high-speed rao, passengers can ride a total of more than 15,000 miles at speeds faster than 220 miles per hour. in the united states, they can ride exactly zero. this about sums it up. as recently as 2005, the world economic forum ranks america's infrastructure as the best in the world. today, we are not even in the top 10. what's more, while it may feel like we're saving a few bucks by doing nothing, the long-term costs of inaction are staggering. one recent report estimates are infrastructure shades 22% off of our gdp every year. former homeland security

secretary tom ridge, and others, conducted a study that said our deferred maintenance at 175 billion to our national deficit annually. by 2035, our bill for the first transportation maintenance will be someplace in the neighborhood of $5 trillion. just for comparison sake, that's roughly the size of japan's entire economy. of course, this is all taking place at a time when millions of americans are looking to get their jobs back. many more are struggling to make ends meet as they work fewer hours for less pay. this is more than economic problem. this is an opportunity that we are wasting. every success today that congress finds a reason not to act is another day that an unemployed mom or dad decides between the groceries and rent. it's another data for some of the american dream of buying a

home or putting a child through college slips further from their reach. a lot has changed in this town since i arrived more than 35 years ago, but nothing changed more than evolution of the culture in in which elected officials are reported for intransigence. for too many, compromise has become a dirty word. and for many, compromise is not even in their dictionary. and cooperation is an unforgivable sin to some. i'm not one of those who opine for yesterday when we remember as far better than it actually was. there was a time when members of congress got into fist fights on the house floor. i witnessed a few. the sitting vice president was shot and killed the former treasury secretary. politics has never been for the faint of heart, but even so, partisan rancor somehow feels a

lot worse today than it ever has. you know the pattern. one side reaches out, the other gigs in their heels. nothing gets done. the commentators obsess on the cable news channels about who's up and who's down, like government is some kind of an endless football game. and the voters tune out. after 14 years in congress myself, i'm all to the mother with this dynamic, and when president obama invited me and asked for me to serve as a republican in his democratic administration, i accepted it not just a fight on our differences on a small handful of issues, but because of them. president obama didn't ask me to switch from one side to the other. he asked for my ideas. he asked for my perspective. he asked me to help solve the american people's problems, to

stand up for compromise and cooperation in those areas where democrats and republicans have almost always agreed. and there's no better example of a traditionally bipartisan issue and transportation. there is no such thing as a democratic or republican bridge, or democratic or republican road, a democratic or republican job, repairing bridges or roads that are in danger of falling down. our infrastructure belongs to america. american infrastructure has been built by american workers. it's more than the way we get from one place to another. it's the way we lead our lives to pursue our dreams. and furthermore, in this economy, job creation should be everyone's number one priority. that's why when i was in

congress the house passed america's last to transportation bills with 417 votes eric that's about as bipartisan as you can get. that's the definition of bipartisanship. that was in 2005. in 1998, right after he came to the congress it was 337 votes. again, that's the definition of bipartisanship. and, frankly, that's why president obama propose the american jobs act. a package of historically bipartisan policies. that's why i'm barring storm of the country and knocked on every door of congressmen that will see me. my message is, congress needs to pass the bill. here's what president obama put forward. first the american jobs act includes 50 billion in the invest and construction jobs rebuilding america's roadways, railways, transit systems and

airports. it will hire american workers upgrade 150,000 miles of road to lay on maintain 4000 miles of track, to restore one or 50 miles of runways, and to put in place and next generation air traffic control system that will reduce travel time and delays. anything partisan about that? i can't think of anything. second, the merrick and jones act includes a national infrastructure bank with 10 billion in up front funding. the bank will operate independently and issue loans, emphasizing two criteria, have had a project is needed and how much good it would do for the economy. no boondoggles, no bridges to nowhere, no unnecessary red tape. third, through a recently issued memorandum, president obama has directed our department and agency to identify high impact

job creating infrastructure projects so we can fast track them through the review and permitting process. at the department of transportation we pick six to start with, including replacing the bridge in new york, a massachusetts come extending transit systems in l.a. and baltimore, and installing next-generation technology to keep houston airports. it seems to me that democrats and republicans can both agree that we should speed up project delivery time. and, finally, all of this is funded without putting it on the debtor deficit. the president propose that we pay for the american jobs act through his long-term plan to pay down our debt. a plan that cuts spending, and asked the wealthiest citizens and biggest corporations to take in their fair share of taxes. this is about priorities. it's about choices, should we

prepare those 69,001 out bridges, or keep tax loopholes for oil companies? should would hire construction workers to build a national high-speed rail network that connects 80% of americans, or let billionaires pay lower tax rates than their secretaries? we've heard economists and analysts of every political persuasion tell us that the presidents jobs bill will boost the economy and spur hiring. more importantly, we've heard the uproar of enthusiasm from the american people. i've traveled to more than 200 cities and 47 states during the last three years. everywhere i go people come up to me and say the same thing, but my neighbors back to work rebuilding our country. just in the months since president obama's and the american jobs act to congress i've met with construction workers building st. paul's new

light rail, charlottes new streetcar system, oakland's new traffic control tower. i visited with leaders of the american labor movement. i have thank my friend for being here today. we met with some of his folks in las vegas at a convention with business leaders in kansas city come with economic government officials in anchorage, alaska. their response to president obama's call to action has been overwhelming. at every stop workers are shouting, pass the bill. pass the bill now. businessmen and women tell us we are job creators, and not, and our future the safest, fastest most efficient ways to move people and products. moreover, this is no partisan sentiment. in one poll conducted earlier this year, two out of three voters, and 59% of tea party supporters said making improvements in transportation is extremely important.

unlikely allies like a chamber of commerce, donohue and afl-cio president richard trumka are putting their full throated advocacy behind transportation investment. bipartisan. talked with both of them about it at great length. many governors also are rejecting the premise that jobs on transportation projects should be proxies in congress is political warfare. at the sherman commit and bridge, kentucky governor steve bashir, a democrat, any and governor h. daniels, a republican work together and are working together to repair and reopen that bridge. i mention i served with a public and later bob michael there he knew how to play partisan, and he could be very tough when he wanted to be. but he also knew how went to sit down across from the other person to hammer out a deal because it was the best thing for the american people. this is one of those moments

when the american people are counting on their representatives in washington to set aside their differences and achieve the possible, not the perfect. they should expect nothing less. we've had a rich history in this country of bipartisanship, particularly when it comes to transportation, particularly when it comes to putting friends and neighbors to work. no one can or will get everything they want, and i personally delivered that message to some of my former colleagues on the republican side of the aisle. so all those years ago when president reagan signed his transportation bill into law, he said that america could, once again, and i quote, ensure for our children a special part of the heritage, a network of highways and mass transit that hasn't able to our commerce to thrive, our country to grow, and our people to roam freely and easily to every corner of our

land, end of quote. our transportation system is a special part of our rich 235 year heritage. the canals that first made interstate commerce possible, the transcontinental railroad that connected our coasts, the interstate highway system that enabled a half a century of unrivaled opportunity and prosperity, american workers drained these things, and were able to accomplish them. american workers wielded shovels, forged the iron, laid the tracks and poured the concrete that brought these things to life in america. american workers past these things onto us, their children and grandchildren. we all went to them. congress owes it to them to continue to pass it on to their children and grandchildren. american workers paid the taxes that were necessary to finance these investments for tomorrow.

they sacrificed so their neighbors would have jobs, so their businesses would flourish, so all of us would reap the benefit of living in the best country in the world. this was america's recipe for success. this was the way we took responsibility for the future. the tran aid isn't a nation that just talks about building big things on the to get mired in the smallest of politics. we don't skirt issues and kick challenges down the road. that's beneath us. we are better than that. in america, we do big things. we always have. we solve problems. we always have. we put our friends and neighbors to work. we always have. and if congress passes president obama's jobs bill, we can once again put people back to work making our nation's transportation system the envy of the world, just to borrow a

phrase from president reagan. with that i'll be happy to take your questions. [applause] >> thank you, mr. secretary. we do have a lot of questions. i think they cover every mode and every element of politics. we will get started. the next highway bill and complete faa authorization, would have been a huge job created. why doesn't the president include those measures in his jobs bill? >> i mean, if you look at the jobs bill its $440 billion, 50 billion is for roads and bridges, transit, high-speed rail, every mode of transportation, 10 billion for the infrastructure bank. i think the president was trying to give an infusion so that

people could go to work quickly, certainly during the next construction season while the congress worked on a five your security transportation bill. i think the president notion as a part of the jobs act is, let's get some money out there quickly, $50 billion, we received $48 billion in the stimulus bill. two years ago. we've obligated it all. most of it has been spent. we created 65,000 jobs and 15,000 projects. we believe $50 billion we can spend quickly and put people to work quickly. while the congress passes the transportation bill. i think that's the reason the president proposed what he did. with the hope that congress would then pass, you know, we've got to in a half years beyond the last transportation bill. i think the president believes

that direct infusion, the way we did with stimulus, and you haven't seen any bad stories written about our $48 billion. there were no boondoggles, no earmarks, no sweetheart deals. we spent the money. 65,000 jobs, 15,000 projects. we are ready to go. >> the bowles-simpson commission and the gang of six both recommended infrastructure spending as a way to get the economy going again. is the administration urging this opportunity? >> what we're doing is working 24/7 to get congress to pass the jobs bill your i don't know what a super committee is going to do. but congress should take action now. they just simply should. this is a no-brainer. everybody knows what needs to be done. everybody knows what road needs to be bill. everybody knows what bridge needs to be either replaced or repaired. everybody knows that nextgen is important. you've got states are the

country that want to get into high-speed rail. all of these things create jobs. our mission is to persuade congress to pass a jobs bill. spent the administration announced it was expediting 14 infrastructure projects that you talk about. given that president obama visited the bridge in cincinnati as a symbol of the jobs bill, why wasn't that bridge project in the ohio river bridge projects in the louisville on that list of expedited projects? >> frankly we try to look at projects that we really could expedite and we work with our partners out in the states. as all of you know, we can do what we do in terms of implementing programs without partners in the states. so we look to our partners and they gave us some good suggestions. and the ones that we suggested our wines that can get started immediately.

>> last time around was a mistake to build the obama stimulus bill of around funding for states for long-term projects like high-speed rail and green energy? with a nation have been better off today had the stimulus bill had a higher concentration of truly she already projects? >> well, look, we at $48 billion. the money has been spent. we put 65,000 people to work. 15,000 projects. you haven't seen any bad stories about what we did, and we didn't write the bill. the bill was written by congress. the president sign it within 30 days of being sworn in. and we implemented it. we took our cues from what congress said, and i think the money was well spent. a lot of americans went to work and that's why we're encouraging congress now to look at what the president has proposed in the american jobs act and pass it.

>> you comment at length about the partisan gridlock that ultimately affects employment and safety and transportation. as a longtime politician what you think will happen that you have to have to return to more pragmatic approach to governing? >> another election. [laughter] >> carrying along on that line, is it possible to get a bipartisan agreement on transportation issues without earmarks to reward lawmakers on the hill? >> i think there is. i really do. some people believe that because earmarks are banned now that it's going to be more difficult to engage members of congress. every member of congress has a road or a bridge or a transit system, or some infrastructure that they know need to either repair or building or repaid. and under transportation to what

will happen is we will work with our friends in the states, the governors, the commissioners of transportation, the secretaries of transportation, on what their needs are. that will filter down to congressional districts. so it can be done. look, congress passed transportation programs before there were earmarks. and our idea is everybody knows what needs to be done, everybody knows that what we do with our money puts people to work. and it's not that complicated. so i do think that they need -- the needs are there. people know what they are. i think we can get a bipartisan bill. >> this questioner asked, do you still shoot the ball with chairman mica? if you do, why doesn't he listen to you? >> well, i have conversations

with chairman micah on a regular basis, and he listens to me. [laughter] >> well he does listen. >> are we going to see some of your recommendations enacted by the house republicans? >> given what chairman micah said about the infrastructure bank yesterday, probably, that's not going very far, but i think that, again, i think chairman micah, i think chairwoman boxer who is writing the bill in the senate, both get it. they know that we need to get a transportation program. we need to put people to work. and i believe we are going to get infrastructure program, and i believe it will happen before the end of the calendar year,

because i think there's an enormous amount of pressure on congress when they go back home and they go to their churches and they go to their barbecues, and they go to their political events. the one thing they're hearing is, what are you going to do about jobs and what are you going to do about the economy? we know how to fix that. they know how to fix it. reaching that kind of consensus i think is, is possible. >> despite recent news about certain transportation bills being quote dead on arrival and the california high-speed rail opposition, transportation is a hot issue. what is the obama administration doing to get some wins on the board in transportation? >> as i said we're working 24/7, all hands on deck. as i said since labor day i've been to 10 states. i'm traveling i think every day except one day next week. i will be traveling four days next week. i'm going to be in detroit.

we're going to be in florida. i'm going around the country, and everywhere i go i'm going to be talk about infrastructure and transportation and jobs. and just keeping the momentum going. a lot of other of our cabinet colleagues are doing the same thing, traveling the country and really trying to engage people in the fact that they just have to persuade their representatives and senators that we need a bill. can we meet the surface transportation infrastructure needs of our nation without increase in revenue for the highway trust fund? >> the president's budget originally called for $550 billion. we felt that what was really needed over the next five years to really begin to meet the needs. there are a lot of unmet needs, and, obviously, there's not $550 billion in the highway trust fund.

and that's the reason that the president, when he put forth his jobs, american jobs act, put forth the pay-fors, and congress is going to have to find the pay-fors. there's probably not enough money -- well, there isn't enough money in the highway trust fund to meet all infrastructure needs in america. and the president has made it very clear he doesn't want to raise the gas tax, and we have more than 9% unemployment, bu >> there are other ways to do it. you know what the president has said, those ways are. and we are willing to work with congress on finding the pay-fors. >> what do you support as means of increasing that revenue? you just ruled out the gas tax. indexing the gas tax, would that count as raising it? tolls on interstates? do you have an idea that no one has thought of yet? >> i support what the president

talks about in american jobs act to pay for it. >> what will happen in the transportation university if the super committee doesn't come up with a plan by its deadline and the automatic across the board cuts are triggered including in transportation? >> our hope is congress will address the jobs issue, will really address away to put people back to work quickly the the way to do that is to pass either a transportation bill or the american, a portion of the american jobs act that really will put people back to work. 50 billion plus 10 billion for the infrastructure. >> in a blog post you wrote the administration is well on his way to realizing president obama's goal of getting 80% of americans access to high-speed rail service within 25 years. how can the administration achieve the president to go if funding and support for the program is drawing up in congress? will d.o.t. have a chance to

change the way it runs its program if it gets significantly less money in the future? >> we've invested, in the last two and half years, over $10 billion in high speed inner-city rail. the largest over 3 billion in california, significant amount of money between detroit, chicago, st. louis. and then along the northeast corridor. we think these are good investments. we think this really begins to carry out the vision that the president has to implement more passenger rail in america. there isn't enough, if you look at our plan, it's to connect 80% of the country over the next 25 years. it costs about $500 billion to do that. there obviously is not enough money in washington. that's the reason that when we have traveled around the world and visited just about every country that has high-speed rail, we've talked to the manufacturers in those countries about coming to america,

partnering with states, hiring american workers to build the trains and the infrastructure in america. we believe this is the next generation of transportation. training the next generation of transportation workers to build the infrastructure for high-speed rail. we have a lot of workers. some of them are prepared to get into the business of helping to build this rail infrastructure. the train cars and the other infrastructures. we know that there are as many as 10 foreign companies in america trying to partner with states that have received the high-speed rail money. that's what we need. public-private partnerships. so you leverage some federal dollars, some private dollars, some state dollars, and we begin

to reach our goal to get passenger rail moving in the united states. and i think we've made a lot of progress. there are a lot of companies that are very interested in partnering in america, to hire american workers, to build the next generation of transportation. >> as you know it's been a rocky road between passenger rail service and freight rails on which tracks that service runs. what have freight rails told you regarding using their tracks? >> we have reached agreements with our friends in the freight rail business. it hasn't been easy but we've done it. it's been hard work and it's been tough negotiations, but we've also made investments in the freight rail, over a half a billion dollars. we've invested, begin to fix up tracks so trains can go faster on those rails. and we know that we can't

implement more passenger rail in america without our friends in the freight rail system. and they've been cooperative and they've worked with us, and they signed agreements and we've made investments in their infrastructure so that trains can go faster. and so i'm optimistic that that kind of cooperation will continue. we need our friends from the class one in order to make passenger rail the kind of rail system that we really want in america. >> what about build america bonds for transportation funding? they were extremely popular but this congress hasn't committed to reviving them. how hard will you push for inclusion of that probe ramp in any transportation bill? >> we like that program very much. it's been very effective. i've told the sponsors of that legislation that we support that legislation. we think it's another way to find the revenue that we need to continue our efforts on infrastructure.

>> you mentioned a hearing that was held yesterday in the house transportation committee that was bashing the infrastructure bank idea as part of president obama's platform. is there any chance of getting congressional support for the proposal? how exactly would you reach that? >> we know that in the senate, senator hutchison from texas, and senator kerry, senator john kerry have introduced legislation on the infrastructure bank. that's really when the president introduced his plan, he modeled the infrastructure bank after their legislation. i believe that debate in the senate, part of the debate in the senate will be about infrastructure bank, about that legislation, about how to implement it. it is a way to leverage billions of dollars to do infrastructure.

>> another republican hill opposition recently speaker john boehner speaker john boehner amateur eric cantor wrote to present obama urging him to withdraw your proposed changes to the trucking hours and service requirements. trucking companies and truck drivers also oppose the proposal. are you beginning to rethink the need for the proposed hours of service change is? >> that is a role that is pending, and so i can't really comment much more than to say that it is thinking. in the administration, in the department. and we'll just ask you to stay tuned and we will see where it takes us. >> also in trucking, the mexican trucking program is getting off to a bit of a slow start after you face a lot of pressure to get that program written and out the door. are you doing anything to try to get more participants in that program? >> our people are working very hard to get companies from mexico certified.

when we rewrote the program, the mexican trucking, we rewrote about what members members of congress told us was their number one priority, which is safety. making sure that the trucks were safe mechanically and that they would be inspected, making sure that drivers were well licensed and well-trained, that they could, we could also put onboard recorders into vehicles to make sure that truck drivers were not exceeding their hours that they were driving. we put all of that in the proposal, and we signed an agreement with mexico. 50% of the tariffs have been removed on the day that we signed the agreement, and the other 50% will come off when we certify the first trucking company. >> also yesterday on the hill there was a hearing criticizing the new fuel economy standards

that your agency and epa put out a couple months ago. opponents are saying the standards may jeopardize vehicle safety and they are framing it as a debate about how the book was written, the process in which it was written. how do you respond to those criticisms that are getting an increasing amount of attention? the way i respond is that they are without merit. we spent a good deal of time, one of the first executive orders the president signed was to raise gasoline standards in 2012 and in 2016. within a year we work with our friends at the epa and the automobile manufacturers who stood with the president a year after that executive order was signed in the rose garden, and agreed to 2012 and 2016 standards. every car company, every car manufacturer was there, both foreign and domestic. and now they are about meeting those standards. 25, 26 miles per gallon in 2012, 35, 36 miles a gallon in 2016. then we got about the business

of writing the standard from 2017, the 2025, and we're going to finalize that very soon here. and again, when the president made the announcement about getting 54 miles per gallon, then again, every car manufacturer, representative, almost every with the exception of maybe two or and manufactures, where again at the washington, d.c. civic center for the announcement. this is a significant a competent. this is something the president felt very strongly about. he talked about it when he was running. but to be able to get that car manufacturers to agree to these, because they believe in it, not because they were forced, is

quite an achievement. for all of us being able to drive more fuel-efficient vehicles, for saving a lot of gasoline and for cleaning up the air, taking the carbon monoxide out of the air. this is a big deal. and it was done in a very collaborative, cooperative effort. the last thing that our safety agency, nhtsa, would ever do, is to put out a standard that would make cars less safe. the last thing that a car manufacturer would do was to agree to a standard that would allow their cars not to be safe? that just simply belies belief that anybody would even suggest that. this was done with total collaboration and cooperation with the car manufacturers, both foreign and domestic. it's a good thing for america. >> moving over to aviation.

how will the delta u.s. airways slot swap getting u.s. airways comments at national and delta dominance at lakota, how would appreciate the d.c. aviation market? why did d.o.t. allow that deal to proceed? >> this was an agreement that was really reached between the two airlines, that we felt it was good for both the airlines, for the airline business or for the hubs that these airlines will be operating on. but more importantly, good for the flying public. that's the reason, but it was an agreement that was forged really between the airlines. but one of our metrics is an one of the things we care about is how does it affect the flying public, and is it good for the flying public. and the answer is that it is, and it's good for the aviation industry. it's good for these companies. but most important, it's good for the flying public.

>> the justice department closed its investigation of the delta look orgy peace but it is still investing the u.s. airways national side of that you. can you tell us about the significance of that? >> i really can't. >> you have to get eric holder. >> will invite him next. in early 2009, 50 people died in the crash of the cut now connection flight 3407 their buffalo. neither pilot got a full night of rest before that flight, but now the new rules that are aimed at controlling pilot fatigue appeared to be stalled at omb. why are they stalled and can you comment or can you commit to us today that a final flight and duty time rule for pilots will be completed during your tenure as transportation secretary? >> we have worked very hard, with particularly the families who lost loved ones in the air crash. they really have been the ones that have been the loudest

voices in terms of telling us that changes need to be made. right after the colgan air crash, our administrator randy babbitt, the faa administrator, traveled the country on listening sessions. he met with the airlines. he met with the pilots. he met with flight attendants. he met with everybody in the industry. randy and i have met with the families on a number of occasions. we really tried to figure out what was necessary to make regional jets and flying on regional jets the safest that it could possibly be. if you look at what the ntsb said, there was fatigue but there was also poor training for these pilots. they did exactly the wrong thing when their plane started icing up and they were descending into buffalo. so, what we have tried to do is to put together a rule that addresses pilot training,

fatigue, safety, training, and shortly we will be announcing what that is. >> under your leadership, d.o.t. is focused on airline passenger protections more than any of your predecessors. there's one last rulemaking and around the d.o.t. has promised the with airline price transparency. do you think the public can expect that to come out before the next election? >> one of the things that we are very proud of is that we have looked out for safety in all of our modes of transportation. we get up everyday and that's what we think about, safety. planes, trains, automobiles, coaches, pipelines, a lot of jurisdiction over a lot of different things. safety is number one. so when we think about, and one of the things that i ordinarily say is that all of us, everybody in this room either got in your

car, on a metro train, and you know, when you get on an airplane, we never think about the safety. we think the pilot will be well-trained, the plane is going to be mechanically okay, the metro train is going to be okay, the train driver knows what he's doing, the automobile is going to be fine. but that's what we think about, because we know that when american transportation, whether it is their car, a train, plane, a motorcoach, they don't think about safety. well, we do. and so the other thing we think about are the people that have to use these modes of transportation, and what we have done i think for passengers that are flying is try and really look after them in terms of their ability to be treated well by airlines.

so when the next rule comes out, which i believe hopefully it will come out next year, there will be plenty of transparency so that when you show up at the airport, you will know which are being charged, while european charge that, how much is, and you'll know that well before you make your decision about buying a ticket. and we think transparency is the one way that people have assurances that they are being treated fairly. >> we are going to wrap up with distracted driver. can't let you out of here without talking about that. are we making any progress on distracted driving? if you say yes, how exactly do we measure that progress? >> when we started this campaign, i don't know if it was

11 or eight states have distracted driving laws. now there is around 36. we started this two and half years ago. there's no line item in our budget for distracted driving. we just did it by using the bully pulpit, by talking to people, by traveling the country, by persuading people that if you have one of these up to your ear while you're driving, that it's dangerous. is there anybody in this room that doesn't have one of these devices, either a cell phone or a blackberry? i'm not going to ask the question how many of you have used these while driving. because i know the answer. everybody has. you all know that when you do it, it's dangerous. you can't drive safely when you have one of these up to your ear. you just can't. so we have met with all the automobile manufacturers. we have asked them to address this issue and to look at the technology they're putting in cars, to really examine, are they making cars safer with all of this technology?

and we've engage with insurance covers have taken up the cause of distracted driving. and we're going to continue our efforts. we want congress to pass a law. we want every state to have a law. we want good enforcement, but the one way that we know that we can really correct this very dangerous behavior is if people take personal responsibility. when you get in a car, put this in the glove compartment. can you think of a call that you've ever taken that was so important that caused you to be distracted? how many of you have been in an accident or got rear-ended or rear ended somebody else because you were on your cell phone? you know people that have. this is as dangerous as drunk driving, and driving without your seat belt.

when nhtsa started the seatbelt program, almost nobody was wearing a seatbelt because it was uncomfortable, it rankled our close, blah, blah, blah. you heard all the excuses. today because of what nhtsa has done and what others have done, 85% of the people buckle up. that's the first thing people do when they get in their cars. the second thing that i want people to do is put these in the glove compartment. there is no call that's so important that can't wait into you get to your destination. i know you want me to get off the podium, but i'm not done yet. [laughter] all right? you know i'm right on this. we've made progress. we have a long way to go. we need your help. personal responsibility. the best add that i've seen is this subaru ad where the guys looking in the passenger side of the automobile, and a little girl who is about 10 years old, and he handed the keys and she

morphs into a teenage girl. and he says don't call me and don't text me while you're driving. that's what you would to everyone if your children or your grandchildren. well, that's what you should be telling yourself. if you put this in the glove compartment when you're driving, you will save injuries and lives, and you'll be taking personal responsibility. that's what we all one another as we're driving around. thank you, angela. [applause] >> we're almost out of time. we have one more question for you, but before ask, just a couple of housekeeping matters to take your. first of all our upcoming luncheon speakers. on october 19 with natalie cole who will talk about the american liver foundation's national public health initiative here on october 24 we have harvey levin. he will talk about the change in landscape and entertainment news

coverage. october 31 with herman cain, candidate for the republican presidential nomination. who will talk about gop presidential issues. november 3 way of tom brokaw, journalist and author. i would like to present our guest with the traditional national press club mug. >> thank you. >> and one last question. mr. secretary, if i get one of those new cars made by google that drives itself, will i be able to start texting on my way to work again? [laughter] >> no. [laughter] [applause] >> thank you, secretary lahood, for being our guest today. i would also like to thank national press club staff including its library and staff center for organizing today's event. here's a reminder that you can find more information about the national press club on our website.

if you'd like to get a copy of today's program, please check that out at www.press.org. thank you, and we are adjourned. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> south korean president lee's five day visit to the u.s. continues today, both he and president obama are about to speak here in michigan. the two leaders earlier today to with a general motors assembly plant just outside of detroit. they are about to speak to company factory workers. again, here in michigan.

they're expected to talk about the free trade agreement that was approved by congress earlier this week. along with a number of other issues. they are expected in a couple of minutes. we will have a live for you when it gets under way. ♪ ♪ ♪ ♪ ♪ ♪

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♪. .. >> we are live in michigan that gm assembly plant with remarks by president obama and south korean president myung-bak. president lee myung-bak is

expected to make remarks on u.s. and south korean relations. they are expected to talk about south korean free-trade agreement approved by congress earlier this week. right now president obama posted a state dinner at the white house for the south korean president. here is a look at that dinner. we will bring live coverage of their remarks when they get underway. [inaudible] [speaking in native tongue] >> i also want to acknowledge two guests in particular. another son of korea dedicated peace and security, secretary general noon is here.

[applause] >> and our first korean american ambassador to the republic of korea confirmed by the senate today, ambassador son kim. [applause] [speaking in native tongue] >> i am going to be very brief because president lee has had a very full day and a very wet day. as well as extended meetings and press conferences and state department banquet and an address to congress which went extraordinarily well. there is the reason people call

him the bulldozer. he is unstoppable. [speaking in native tongue] >> mr. president, today you have spoken with great eloquence about what america and our alliance has meant in your life and the life of your country. this evening i want you to know what korea and its people have meant to america. [speaking in native tongue]

>> the essence of our alliance is embodied in a concept that is uniquely korean. it doesn't translate that easily but it reflects the deep affection, bonds of the heart that cannot be broken and grow spawner -- stronger with time. are korean friends know it well. chu chung. [speaking in native tongue] >> in our country we feel this in our korean-american community including in hawaii where i grew up. a melting pot of cultures that made me who i am and taught me we can all live together with mutual trust and respect. [speaking in native tongue]

>> i felt this during my visit to korea on veterans day, 60th anniversary of the korean war where our pride veterans of that war both korean and american came together to celebrate shared legacy of free democratic and prosperous republic of korea. [speaking in native tongue]

>> i felt this in my friendship with president lee. mr. president, your life story from poverty to the presidency as an inspiration. your success, korea's success speaks to the truth that with education and hard work anything is possible. a spirit our country's share. you describe it in korea. in english it translates as yes we can. [laughter] [applause] [speaking in native tongue]

[speaking in native tongue] >> sounds good in korean too. [laughter] finally i would note that in our lives president lee and i have both been blessed to find our better have, leaders in their own rights, advocates for women and young people we are proud to call our first lady's. mr. president, as you say we both married up. [speaking in native tongue]

>> and so i want to propose a toast. to our friends, president lee and first lady kim and to their delegation and to the enduring alliance between our our nation's. a partnership of the heart that will never be broken. [speaking in native tongue] >> cheers. >> coast from the state dinner held for south korean president lee myung-bak at the white house. we are going live to michigan

where president obama and president lee are about to speak at the gm assembly plant. live coverage on c-span2. [cheers and applause] >> hello, detroit! hello! have a seat. it is great to be back in the motor city. [cheers and applause] the mood is a little brighter on this particular visit. i would like to think it is because everyone is excited about the korea free trade agreement but i suspect it might just have a little bit to do with your alliance beating up on my fares.

all right, right. don't get carried away. not to mention your tigers hanging in last night. [cheers and applause] as you can see, president lee is a pretty good politician. he knows how to get on your good side. [cheers and applause] today i brought a good friend and one of our closest allies, president lee of south korea. you may know he has a remarkable story. he grew up a little ways from detroit but he embodies that same spirit that detroit is all about. through sheer grit and determination he worked his way

from the humblest beginnings in south korea, of his childhood was an extraordinarily poor country. but he worked his way up and went to school while cleaning streets. eventually went on to run a un die machinery plant. he knows a little bit about cars. then the whole company and ultimately was elected president of the republic of korea. this is a country that stage one of the world's greatest economic come backs that we have ever seen. president lee knows what it is like to go through tough times. he knows what it is like when folks have counted you out and he knows what it is like to make a big come back. with that i want to welcome president lee to they troy and

have hit -- detroit and have him say a few words. [applause] >> thank you. [speaking in native tongue] >> translator: i am a little shorter than president obama so i will adjust the microphone so you will understand. [speaking in native tongue] >> translator: first of all, it is a great pleasure visiting your factory in detroit along with president obama, one of my

closest friends. [speaking in native tongue] >> translator: as you know, the global economy is going through tough times. there's one thing on the minds of president obama and i and that is jobs. it is about creating decent jobs and it is about keeping those jobs and this is what keeps us awake. [applause] [speaking in native tongue]

[speaking in native tongue] >> translator: before i came here i had a brief tour given to me by members of this factory and i heard about latest 3 and the danger of how this factory was on the brink of being closed but now as you see we have so many people here working here and earning a good living and more than anyone else in this factory it is president obama who is the happiest man to see this factory. so energetic. [applause] [speaking in native tongue]

[speaking in native tongue] >> translator: ladies and gentlemen it was three years ago i first met with president obama and i remember we talked about a lot of things and one of the things on president obama's mind was how to revive the u.s. automotive industry. we all know the u.s. automotive industry was and is the leader in the world and president obama was concerned about what he could do to revive motors city and the automotive industry. we talked a lot about that. i know a few things about automobiles. when i was in the private sector are used to build cars myself.

i know a thing of to about automobiles and this is what president obama raise the subject. we know how to revive the automotive industry. [speaking in native tongue] [speaking in native tongue] >> translator: president obama briefly talked about my past and our work hard throughout my life. i was once just like you. i worked in factories and i was in the board room as well as ceo of one of the largest companies in korea but when the 9 learned in my life is during times of

challenges when faced with physical difficulties and you want to create good jobs and maintain good jobs there's only one way to do that and that is for the workers and the managers to work together. it is about cooperating together and that is the surest way to assure good jobs and for you to keep your job. [applause] [speaking in native tongue] [speaking in native tongue]

>> translator: we are here with president obama because when i was a worker i knew more than anything for all of us to enjoy a good life for all of us to have a good decent job. i know how important it is for anyone to have a good decent job. the factory here as i was looking around, i felt once again how important it is for all of us to work together because i know three years ago gm, corey and you guys worked together to set up this factory and today you are manufacturing cars that three years ago gm korea and your company were working together. i came to see with my own eyes the good work all of you are doing here. [applause]

south korea eight [speaking in native tongue] south korea eight [speaking in native tongue] south korea eight [speaking in native tongue] at a [speaking in native tongue] >> translator: when i was president and when i became president of korea i visited gm korea's factory not once but twice which is unusual. i came here today and as i watched the factory and took on a 4 i was deeply impressed by the way you are operating this factory and impressed by the fact this factories pro environment and you take care of the environment and adopted the latest i.t. technology.

the have the highest standard in your building and excellent cars and i am confident this factory will continue and make good cars and your lives will be good and i am sure and confident in the future. [applause] [speaking in native tongue] >> translator: lastly i want to say one thing before i go. [speaking in native tongue] >> translator: the core s ca will soon be implemented. [speaking in native tongue]

>> translator: i know some of you may think with implementation of that that somehow your jobs maybe -- go somewhere else but let me tell you one thing. that is not true. i am here with president obama. [applause] >> translator: i am here with president obama today because i want to give this promise to you. this will not take away any of your jobs. rather it will create more jobs for you and your family and it is going to protect your jobs. this is the pledge i give you today. [applause] [speaking in native tongue]

>> translator: soo and motor city will come back again and revive its past glory and i have all the confidence in the world that you are going to do that. >> thank you. [applause] >> give president lee a big round of applause. [applause] >> thank you, president lee. thank you to everybody who joined us here today. a couple people want to mention. the ceo of general motors, dan anderson is here. there is.

[applause] >> the uaw president, one of the key people who made this agreement possible, my dear friend bob kids --kiggs. and my u.s. trade representative who spent a lot of long nights with his korean counterpart, ron kirk. [applause] i just want to follow-up president lee's remarks with a few words about what the korean free trade agreement will mean for american jobs and the american economy. in the last decade we became a country that was known for what we bought and what we consumed and a whole bunch of goods for in from all around world. we spent a lot of money and took

on a lot of debt and a lot of cases to buy those goods. it didn't necessarily produce a lot of jobs in the united states. when i took office i was determined to rebuild this economy based on what this country has always done best. not just buying and consuming but building, making things, selling those goods all-around world with three proud words, made in america. [applause] and that is why one of the first decisions i made as president was to save the u.s. auto industry from collapse. [applause]

there are a lot of politicians who said it wasn't worth the time or the money. there are some politicians who still say that. they should come and tell that to the workers here. two years ago it looked like this plant was going to have to shut its doors. all these jobs would have been lost. the entire community would have been devastated and the same for communities across the midwest. i refused to let that happen. [applause] so we made a deal with the auto companies. we said if you are willing to retool and restructure and get more efficient and better and smarter we are going to invest in your future because we believe in america and we

believe in american workers. and today -- [applause] -- i can stand here and say the investment paid off. [cheers and applause] the hundreds of thousands of jobs that have been saved made it worth it. the american auto industry is more profitable and competitive than it has been in years. that made it worth it. the taxpayers are being repaid. plants like this are churning out groundbreaking fuel-efficient cars like the chevy, the only one of its kind made absolutely in the united states of america. [cheers and applause]

4 folks that haven't tried it yet, sit in that car. there's a lot of room in there. even for a tall guy like me. that felt pretty good. they took away the keys. the secret service wouldn't let me in. here is the thing. we live in a global economy. that means most of the potential customers for american companies like gm won't be just in the united states but all around world. and the more goods and services we sell abroad the more jobs we create here at home. in fact -- [applause] -- every $1 billion in exports means thousands of american jobs. that is why i set a goal of doubling our exports and that is a goal we are on track to meet and what we worked with panama

and colombia and south korea to evolve outstanding issues with these trade agreements and why i pushed congress to pass them as soon as possible. korea is critically important because korea has fifty million people. it is one of the fastest-growing countries in the world. it is one of our closest allies and closest friends. and president lee and i talked about this the other night. our trade is basically balance between the united states and korea. they buy as much stuff from us as they sell to us. that is how fair and free trade is supposed to be. it is not one side profits. [applause] that is how trade is supposed to be and president lee doesn't mind me saying this even though he is a hyundai guy.

americans could buy kias and hyundai blacks from korea and korea should by ford and chrysler and chevy made in the united states of america. [cheers and applause] the other thing took along your than some people expected because i wasn't going to sign just any trade deal. president lee wasn't either. we had to work hard to reach an understanding. it was like the theme from a gm dealership where folks are negotiating about the heated seats and extended warranty and going back and forth to figure out how it works for everybody. but when all was said and done president lee and i walked away with the trade agreement that is a win/win for both countries. [applause]

in the united states this trade agreement will support at least 70,000 american jobs. it will increase exports and boost our economy by more than the last nine trade agreements combined. as i said the good thing is we have a balanced situation not just folks sending stuff here but koreans are buying american products. that makes a win/win. [applause] i also held out on sending this agreement to congress until they promised to renew a lot called the trade adjustment assistance that help american workers affected by global competition so that they are able to help transition. it is because of these benefits that this trade agreement won the support of business and

labor from automakers and auto workers. from democrats and republicans. that doesn't happen very often. it was good to finally see both parties in congress come together and pass legislation that is good for the american people. and agreement that will not only build on our strong economic relationship that has existed years to come the promises as we have seen at this plant the capacity to exchange ideas and technology and systems which will improve productivity on both sides. nearly a decade ago when a korean business named dilute motors went bankrupt it was general motors that stepped in and saved that company which is now known as gee and korea. years later it was the engineers

from gm korea who helped make the chevy sonic possible. the collaboration with that company helped save this plant and the 17,050 jobs. so on a larger scale the economic ties between the united states and korea will lead to more jobs, more opportunity for both nations. already korean investments and by the way, not just in the auto industry. korean investment is creating jobs in michigan to make lithium and ion batteries and hyundai manufacturing suspension models in detour it and opening a new research and development center for brakes and steering. in korea american businesses are

pursuing those same investments and opportunities. truly a win/win for everybody involved. i just want to say thanks to president lee for his cooperation and for his leadership. i want to thank the members of congress who fought so hard to get this done especially the delegation from the state's. i want to thank the people here for proving that despite all the work that lies ahead this is a city where a great american industry is coming back to life. the industries of tomorrow are taking root in a city where people are dreaming up ways to prove all the skeptics wrong and right the next chapter in motor city history. [applause] that is why i came here today. for every city saying it can't be done there are a bunch of folks that are saying yes we

can. [cheers and applause] yes, times are tough but they are tougher in the detroit than anyplace else. we made it through tough times before. we do not quit. we rolled up our sleeve. we remember our history and we said to ourselves there is nothing we cannot do when we are willing to do it together. you are all a testimony to the american spirit. these cars are a testimony to the american spirit. if we can take the same spirit and apply it across the board to the challenges we face there is nothing we cannot do. god bless you and god bless the united states of america. thank you. [cheers and applause] ♪

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♪ >> of course i am delighted but not surprised by the final repeal of the eighteenth amendment. i felt all along that when this matter was submitted to the rank and file of our people they would readily see that it had no place in our constitution. >> he served as governor of new york four times vote he never attended high school or college and in 1928 he became the first catholic nominated by major party to read a -- run for president. although he lost the election he is remembered by the alfred e. smith memorial dinner. an annual fund-raiser for various catholic charities and a stop for the two main

presidential candidates every election year. smith is one of the 14 men featured in the new weekly series the contenders live from the state assembly chamber in albany tonight at 8:00 p.m. eastern. >> find the latest releases of your fall reading list on booktv on c-span2. jacqueline kennedy's taped conversation with arthur/injured catch -- presented by a panel discussion with michael and richard donohue. september 19th, hazel brian and elizabeth heck for linked together by one vote from little rock central high school. a tenuous friendship later in life. afterwards pulitzer prize winner daniel juergen on the impact of the oil industry has on international politics and the environment. find the booktv schedule this and every weekend online at booktv.org.

>> almost 30 years since a small group proposed building a memorial to honor dr. king. this sunday watch the official dedication of the martin luther king jr. national memorial in washington d.c.. live coverage begins at 9:00 a.m. eastern on c-span. >> the house natural resources committee held a hearing on a joint report released from the april of 2010 gulf of mexico oil spill. the report concluded multiple human errors and technical failures lead to the deadly explosion. the findings were released in september and conducted by the u.s. coast guard and the bureau of ocean energy management. this is just over three hours. >> the chairman note the presence of a quorum which is two. if we exceeded that. the committee on natural

resources is meeting to hear testimony on an oversight hearing on u.s. coast guard joint investigative team report. under rule 4 f both statements are limited to the chairman and ranking member but i ask unanimous consent that any member who wishes to have a statement in the record have it to the committee by the end of business today. without objection so ordered. i will recognize myself for five minutes. i want to thank all the witnesses for being here today. although i was frustrated by the events that led to the delay and repeated scheduling of this hearing i am pleased we will hear testimony from the investigative cochairs who oversaw our extensive interviews and document review. this committee will also hear from the three companies named in the report. the primary purpose of this was

to hear from the actual front line investigators about their official workings and signings. as the committee responsible for overseeing the agency's and laws responsible for offshore energy production is our duty to get the full facts regarding the deepwater horizon explosion and oil spill and findings of the report. at our first hearing this year's is committee heard testimony from the cochairs of the president's own commission that he selected and appointed ended is logical to give the same attention to this official report. i said from day 1 that we need all the facts and information regarding this bill before rushing to judge or legislate. this is an important piece of the puzzle that gives deeper insight and greater clarity in what caused the explosion that tragically took 11 lives and lead to an oil spill and caused widespread impact throughout the gulf. the investigation is unique and

important in many ways. there have been several investigations and reports issued but this is the only investigation team with subpoena power. this is the only investigative team comprised of technical engineers and experts and the only investigative team that actually examined the blowout preventer. members of this team were on the ground from day one and had the tools to complete a thorough and comprehensive investigation. they had access to information that others didn't and it is important for this committee to hear from them on their report and conclusions. in short this report finds the disaster was the direct result of multiple human errors and technical failures. the report makes a number of recommendations is interesting to know it includes no specific recommendation for congressional action. i repeatedly stated the top priority of this committee is to make offshore drilling the

safest in the world. over the past 18 months there have been changes and reforms to improve offshore drilling and response. is important that congress, the administration and the industry respond appropriately. i stressed reforms must be done thoroughly and done right. we have no other choice when the stakes are this high. offshore drilling must be done safely but we cannot afford to make it impossible through overregulation. yesterday we heard from people in the gulf to continue to suffer one year after the obama administration lifted the official moratorium in the gulf of mexico. their livelihoods are linked to u.s. energy production. for that matter so is the nation's. our national economy, american jobs and national security are dependent on safe and reliable u.s. energy production. we must move forward with offshore energy production that is safe, timely and efficient.

i look forward to hearing from our witnesses and learning more about the months of on the ground work from the j. i. t investigators. america holds both of you and your teams our appreciation for your service to our nation. with that i recognize the ranking member. >> thank you, mr. chairman. more than one year has passed since bp's blown out well finally stopped spewing oil into the gulf of mexico but congress has not enacted a single legislative reform in response to the worst environmental disaster in american history. what has been the reason for this delay? the republican majority has blocked all legislative action because they said they wanted to wait until all the facts were in before taking action to respond to this bill. we have now heard from the

independent bp spill commission and see in the forensic examination of the blowout preventer and the government's joint investigation team has issued its findings and recommendations. the fact are in and it is past time for this committee and this congress to enact comprehensive legislation to ensure that we prevent a similar disaster in the future. the government's investigation reached many of the same conclusions as the independent bp still commission. the report says this disaster was preventable, not inevitable. it says corners were cut. bad decisions were made. stronger safety standards and more emphasis on worker training could have helped prevent this disaster. today we have before us government investigators who looked long and hard into this disaster. we will hear from representatives of the oil companies responsible for the spill.

it is good that this committee is hearing from some of the companies involved in this disaster. i feel compelled to note that the minority was not notified these additional witnesses would testify until very late on tuesday less than two days before this hearing. the testimony of the oil company representatives was not made available until yesterday afternoon. i am worried that this process could be to shield these companies from proper scrutiny or hamper the ability of members and staff to fully review and analyze the company's testimony. as also prevented democrats from being able to exercise our right to call minority witnesses. a majority of the democratic members of the committee have signed a letter to you exercising our rights pursuant to rule 11 of the house to call witnesses to testify a second day of hearings on this subject.

regardless of how we arrived here today there will be many questions and we should be able to move forward with comprehensive reform. it is time to hold these companies accountable for this spill. late yesterday the interior department officially issued seven violations of federal regulations against bp and four a piece against halliburton and transocean. even in a worst-case scenario for bp these violations that resulted in the nearly five million barrels of oil spilling into the gulf would cost the company a total of $21 million. not billion, million. considering what we know about what caused this disaster bp should stand for bigger penalties. bp is on pace to make $25 billion this year. $21 million represents a little

over 7 hours of profits for this oil giant. that does not even begin to approach the amount needed to be a deterrent against a repeat of this tragedy. there is nothing more than a slap on the wrist. the transocean company has announced it plans to appeal the finds and transocean is trying to transfer blame. we need to ensure there are sufficient financial incentives in place to deter oil companies from cutting corners. we need to enact legislation to increase civil penalties for oil companies who violate federal regulations and increase liability cap for companies responsible for a still. as the democratic still responds bill would do we need to hold these companies responsible for their actions and we need to ensure the agencies are working to implement the safety reforms recommended by the joint investigation team.

after this hearing i hope the republican majority will push to referred to the same speed over safety mentality that led to this disaster and join democrats pushing for real reform to protect the economy and the environment of the gulf. i yield back. >> i thank the gentleman. before recognize the panel let me respond. the minority has every right to exercise whatever authority they have to have hearings. i respect that. but i want to say i am very frustrated with how this all came about. but nevertheless it is here. we are going to have this hearing and hopefully it will shed some light on what we are looking at. let me make an observation when the gentleman referred to minority witnesses. in this hearing today there are

no majority or minority witnesses. the first panel is made of coach fares of the investigative team and representatives from the department of the interior and the coast guard. the second panel is made of those that are referenced in the report. so this case, we don't have a situation of minority or majority and minority witnesses. it doesn't exist with this panel. nevertheless the ranking member and minority have every right to ask for additional hearing and we will take that into consideration. our first panel -- >> will the gentleman yield briefly? it is to say that there was no consultative process on the

second panel whatsoever. >> a privately mentioned to the gentleman it was always my intention to have representatives from the companies here. i know the gentleman has requested ceos. if i had my way every time we have a hearing here and have a member of the administration here i would like to have the secretary of the interior here. that obviously doesn't work. even better if you have president obama. they have chosen the one that can best respond to what we need to learn through this hearing. i do want to say this goes back to my original observation. i was frustrated we had to postpone this for three weeks and by the time we got confirmation of having the panel

here we made that announcement. nothing more complicated than that. this is and ideally -- i would have wanted it. but this is the hand we were dealt. >> will the gentleman -- i thank the gentleman very much. i am trying here to divide the question. yes, we do want representatives from the company's to testified. the point that we are making here is that we were not notified until 4:00 on tuesday afternoon that a 10:00 meeting thursday morning that there would be a second panel. we have no idea there was going to be a second panel much less who was going to be testifying. the issue we are really raising here is one of the consultative process.

we are going to disagree obviously on issues but in terms of the notice the minority gets to prepare for a hearing in order to make in a timely fashion or have a discussion as to whether or not a minority witness is necessary was not provided. that is the point we are making. >> we are trying to construct something that makes it easier for the minority to raise their concerns in a timely fashion. >> reclaiming my time i appreciate the gentleman's responds. i want to serve private conversation is my intent. if we didn't get confirmation that the representative would be here i thought this was precisely the right venue in order to have if you will the investigative report followed by representatives of the companies. i appreciate the gentleman's points and understand that.

i was in his place before. i was disappointed that he said we don't agree on everything. i thought we did agree on everything. but i thank the gentleman for his remarks. our first panel today, and i am very pleased. we had frustrations put together that all of you are here. we have the co-chair of the joint investigative team for the u.s. coast guard, david dikes, co-chair -- former bolar staffer, brian salerno of the u.s. coast guard and the hon. michael browner, director of the bureau of environmental enforcement. for those of you who haven't been here, the director knows the rules and will not exceed his five minute because he knows how touchy i am on that regard. the way the lights work, your

full statement will appear in the record. that will be part of the record. i would like you to confine yourself to 5 minutes. when the yellow light comes on you have one minute left and when the red light comes on it means five minutes are over. try to confine your remarks to that because your full statement will be on the record. capt. wind, you are recognized for five minutes. >> good morning distinguished members of the committee. i am honored to appear before you to discuss the joint investigation. immediately following the loss of thewater horizon the department of homeland security and department of the interior convened a former joint investigation for the purpose of examining circumstances surrounding this incident and to make recommendations to prevent recurrence. on april 26, 2010, rear admiral

kevin cook, director of policy informed me i would chair the investigation. and a member formerly assigned to the joint investigation team including captain mark higgins, judge advocate. and capt. retired gerard whitley and commander robert byrd's and commander jeff gray, headquarters staff judge advocate who served as attorney for j. i. key. the order identified david dykes of the bureau of ocean energy management and enforcement. i thank mr. dykes and the members for their cooperation and support. the deepwater horizon demands transparency and needs to be

systematically investigated. consequently in may of 2010 we developed an initial investigation road map posted on our web site in june of 2010. and we had parties that were interested. we've closely followed the road map. as the hearings progressed the number increased significantly. it was determined members with legal background would assist the co chair handling objections and enable the investigator to focus on technical matters at subsequent public hearing sessions and retired judge anderson added to the j. i. key. the cochairs over the hearing the addition of judge anderson and captain higgins moved the

investigation forward. the coastguard investigation focused on factors on the deepwater horizon that might have contributed to the explosion subsequent to the sinking of the vessel. we examined the evacuation and search and rescue efforts. by the beginning of january of 2011 members began to conduct cause analysis. ..

>> our investigators get to exercise a judgment. once the reporter investigation is complete it is transmitted to headquarters for the final agency action. jit members participate in the government of the commandants final agency memorandum. again, thank you for the opportunity to testify before you today, i am pleased to answer your questions. >> thank you very much, captain nguyen, for your testimony. i will recognize mr. david dykes who is co-chairman of the jit. the gentleman is recognized for five minutes. >> thank you, mr. chairman. members of the committee, and for the record my name is james david dykes. for the last 17 months i served as co-chair for the joint marine board investigations. my written testimony presented am i oral statement given you this morning is from my very best recollection of the facts as i know them.

in preparing the written testimony i had limited access to evidence due to my resignation back in september. it came from web information, and it came from my own recollection of the information. my written testimony attempt to address the investigation as it conducted. what was discovered during the investigation and what the investigation findings show. on the morning of april 21, 2010, investigator kirk malmstrom, the home district manager brian and i were in houston when we learned of the deepwater horizon incident. upon hearing of the news, we began both the investigation face and the response phase in bp's office in houston. while other personnel and mms office in new orleans were ramping up their operations there. the coast guard was preparing to dispatch investigators to the offshore location to start interviewing surviving crew

members. we mms investigators to home of louisiana to rendezvous with the coast guard investigation and to travel to the offshore locations. the investigators intercepted the mode festered damon bankston and began collecting statements. within the first few days, mms was courtney with the coast guard on areas that needed to be explored. i met with coast guard personnel from them city office and representatives from the republic of marshall islands to determine what information was in hand and what information it needed to be collected. at this time preservation orders were issued to both bp and to transition. the joint investigation issued more than 90 subpoenas and collected over 4000 pages of evidence over the course of this investigation. these documents encompassed everything from company safe work practices and drilling program procedures and permits to employee performance reviews

and master service agreement. the jit held seven public hearings and called over 80 witnesses. some witnesses refuse to testify. however, perhaps due in part to the announcement of the criminal investigation by u.s. attorney general eric holder on june 1, 2010. in closing the finest in the investigation revealed that additional barriers are needed to reduce the probability of similar events of this magnitude from happening again. recommendations for additional research and regulatory provisions as well as rig design revisions, along with changes to well control and emergency response will add these barriers. however, they cannot guarantee that the human element in the equation will perform as intended. this specific issue is one issue that will haunt the oil and gas industry, and every other industry or personnel are required to make decisions based

on raw data. this concludes my opening statement. i be happy to answer any questions. thank you. >> thank you very much, mr. dykes. now i would like to recognize vice admiral brian salerno. you are recognized for five minutes. >> good morning. i'm very pleased to have this opportunity to answer any questions you may have on the comment -- commandants action on the loss of the mobile offshore drilling unit, or modu, deepwater horizon. specifically i'm prepared to discuss the steps to coast guard has taken to improve safety in the offshore oil industry. i would first like to express on behalf of secretary napolitano and the commandant of the coast guard our deepest sympathies to families of the 11 men who lost their lives in this tragic accident. the coast guard has kept those families informed of the investigation progress, and most recently provide them with a summit of the actions we're taking to improve modu safety.

although the sinking of deepwater horizon followed a well blowout, the investigation revealed numerous system deficiencies and acts of omission on the modu itself that had an adverse impact on the ability to prevent or limit the magnitude of the disaster. these deficiencies included for maintenance of electrical equipment, that may have ignited the explosion earlier than might otherwise have been the case, the bypassing of hydrocarbon gas alarms and automatic shutdown systems, and a lack of training on when and how to shut down engines and disconnect the modu from the well. the coast guard members of the joint investigation team made 65 recommendations, safety recommendations and administrative recommendations to improve safety on board modus operate on the outer continental shelf. these recommendations can be characterized in three broad areas. recommendations related to the effectiveness of both domestic

and international standards, recommendations related to enforcement of the standards, and administrative recommendations. the commandant concurs in whole or in part with the vast majority of proposed safety actions. overall, volume one reveals that regulate safety systems aboard the modu in april 115 of the 126 persons on board to survive explosions and subsequent fire. for example, all survivors were able to evacuate the modu using the installed life-saving equipment. with the exception of approximately six to on their own initiative jumped from the rate into the water. also, even though significantly damaged by the explosion and the ensuing fire, the deepwater horizon had enough structural resiliency to stay afloat for more than 48 hours, despite being engulfed in a major fire that was being fed from an uncontrolled dual-source. nevertheless, it is clear from

this tragedy that the coast guard must refine its procedures and improve oversight to better fulfill its responsibility to ensure safety, security and stewardship on the u.s. outer continental shelf. to accomplish this the coast guard will work both domestically and internationally to improve standards and oversight for u.s. and foreign-flagged modus. we've already taken action based on the lessons learned from this casualty. for example, we've initiated a new policy on risk-based targeting of the foreign-flagged modus operate on the outer continental shelf. our goal is to prioritize our extermination activity according to risk, taking into account numerous factors including the past performance of the managing company, the owner, the flag state and the recognize organizations that are delegated a three to act on behalf of the flag state. the intention is to enhance safety for all vessels, operating on the u.s. outer continental shelf. we are updating our domestic

regulations which govern vessels operating on the outer continental shelf to reflect the lessons learned from the deepwater horizon, and the current state of technology. we are harmonizing coast guard area contingency planning efforts with the offshore spill response plan to prove by the peer of safety and environmental enforcement to ensure consistency and improve overall preparedness. and, finally, the coast guard can just work to the international maritime organization where, among other initiatives, we are leading u.s. efforts in support of mandatory code for recognize organizations here the code will improve accountability of recognize organizations, acting on behalf of flag state and will better ensure that all vessels including modus comply with international standards. thank you, and i look forward to answering your question. >> thank you very much, after a. and last but certainly not least i would like to welcome back director bromwich. you're recognized for five minutes. >> thank you much, mr. chairman,

and members of the committee. i appreciate the opportunity to be here today to testify about the findings of the boemre joint investigation into the explosions and fire onboard the deepwater horizon and the devastating oil spill that followed. i want to know that this report validates many of the important reforms to offshore regulation oversight to we've already implemented but it further underscores the need for government and industry to continue to identify and implement practices that will assure that domestic oil and gas production proceeds safely and responsibly. the panel identified the causes of the plot as was various failures that occurred prior to the blood. it concluded a central cause of the blot was failure of a cement barrier into production casing string, a high-strength steel pipes that any will to ensure well integrity and to allow future production. the failure of the cement barrier allowed hydrocarbons to flow of the well bore through the rise and onto the rig.

the panel finds conclusions and recommendations also address a wide range of other technical issues. the panel found the loss of life at the macondo well on april 20, and the subsequent pollution of the gulf of mexico were in part a result of poor risk management, last minute changes to plans, failure to observe and respond to critical indicators, inadequate well control response, and insufficient emergency response training by companies and individuals. the failure of the b.o.p. stack allow the will to continue to flow after the blowout. the jit found clear and compelling evidence that bp as was its contractors, transocean and halliburton, violated boemre's regulations and the consequences were undeniably dire. we believe that issuing site patience for such regulatory violations uphold the principles of accountability, specific deterrence, and general deterrence and indicating boemre's regulations. a panel conclude that stronger and more comprehensive federal regulation might have reduce the

likelihood of the macondo well blowout, in particular the panel recommended regulations could be enhanced with respect to cementing procedures and testing, b.o.p. configuration and testing, well integrity testing and other drilling operations. in addition the panel concludes the agency's program could be improved. i can report the regulatory and process changes implicated by this report have been formulated and implemented over the past 15 months. the report concludes with the panel's recommendation which seek to improve the safety of offshore drilling operations in a variety of different ways that are spelled out in the report. those recommendations will be carefully considered as the basis for future rulemaking. the jit findings reinforce and build on many of the safety and oversight gaps that had already been identified in significantly improved upon since the tragedy. these include our safety drilling wells which i describe to you here on previous occasions. our reform since the deepwater

horizon tragic have been brought in swift end of the deepwater drilling significantly safer. but the jit report is a sobering reminder that the remains more to be done. we must continue to analyze information that becomes available and implement reforms necessary to make offshore oil and gas production safer, smarter, and with stronger protections for workers and the environment. the process of making offshore energy develop both safe and sufficient will never be complete. it must be a continuing ongoing dynamic enterprise that remains responsive to new learning. as we a guy with the lessons learned from the jit report i believe the industry is uniquely poised to assess find and test creative solutions. to that and i hope the companies will take a hard look at this report as was other recent investigations to understand what went wrong and to think about what they can do to go above and beyond existing requirements, enhance safety and ultimately help us to identify best practices that could be

adopted across the industry. thank you very much under look forward to your questions. >> thank you very much. and i want to thank all of you for your statements. i'll start the questions. my first question, probably is more of a reaffirmation to the co-chairs, but i just want to ask both of you, captain nguyen and mr. dykes, do you believe that after 17 months and the number of interviews that you have had and the resources, do you think that this investigation has, does in your view reflect the most accurate account of what happened on the deepwater horizon? captain nguyen. >> mr. chairman, yes, i do. i think the coast guard investigation is probably the most comprehensive parts and investigations reports out there. especially on the marine related site, sir. >> mr. dykes?

>> mr. chairman, i agree with captain nguyen. based on what we had it is the most accurate accounting of what took place. now unfortunately, we lost 11 individuals in that event. those 11 individuals are key witnesses to what was going on on the rig floor at the time of the blowout. we have to put the pieces of the puzzle together without those 11 testimonies. but from everything that i've seen, we did not leave any stone unturned. >> good. you alluded to in your testimony. i just want to read from that, so thank you. director bromwich, in view of the citations that were issued, you have repeatedly asserted that the department has now found new authority under law to not only just regulate the leaseholders, but also the contractors to the leaseholders as well. so i'm not going to comment

whether that's appropriate or not. my question though is very specific. what statutory authority does the department had to regulate those subcontractors to the leaseholders? >> thank you very much for the question, mr. chairman, we talked about this issue on a number of occasions here. it's oxo and other related statutes that gave him authority to regulate offshore operations. i would revise what you said. we didn't find new authority. that authority has always been there. it's simply been history practice and custom within the agency to only go against the operators. and when i came on board at the review a variety of issues, one of the issues i reviewed was whether it made sense in the face of the egregious violations by non-operators. that is, contract -- >> i understand that part, but my question is specifically, broadly said. i just want to know specifically. the reason i say that is pretty

basic. i am at a disadvantage but you're a lawyer. i'm not a lawyer. but we write the law that is here and then that is carried out by the executive branch. i am simply asking every specifically, what specific part of the law do you have, since you haven't regulate, what specific part do you have is there no? >> i can provide you in writing, mr. chairman, want to specific sections and subsections are. clearly in our regulations, which are based on oxo we specifically say we have the authority to hold jointly and separately liable all entities, not just operators -- >> that is specific in the loss because that specific in our regulations which are based on -- >> no, that's my point. you're saying a regulation that i'm talking about the law that gives you, is a distinction

without a difference. i think it's very, very important. the reason i say that is because we had a discussion in another area of entry on wildland designation, has nothing to do with you. i asked director abbey what statutory authority had come and he said we don't have statutory authority. i'm just for asking this question because i don't know if this is a pattern of this administration but i'm asking specifically, you refer to regulations. i'm talking about statutory law. >> it would be invalid if they were not based on statutory authority. spent statutory authority and -- >> i can give you a specific citation picture so, you know, mr. chairman, we specifically, because the agency has not historically exercised its regulatory authority over contractors, i specifically asked the solicitor's office, lawyers for the department to make sure that, in fact, we had the authority. so they research the issue just to be double sure and they came back in and told me we did indeed have that authority. >> if you would, you offer to

give us a written explanation of specifically which parts of that statute gives you that authority, i would like you, if you would, to give it to the committee as soon as possible. how soon do you suppose the days i can do it today because we provided that to send her there in his popular that he that he wrote many, many months ago. >> we have reviewed it and it will simply say that when we reviewed that response to senator vitter we didn't think that covered all of it. so if you could be more specific than what you did to senator vitter that would be very helpful to us. >> that's fine, we will do that. >> timeframe would be the same as today than? >> well, i was offering a letter that had already been written. it would be helpful if i cannot from your staff which aspects you do not are sufficiently detailed because i think they are. >> if the statutory authority, again, i'm not an attorney. i met a big disadvantage when talking to his lawyer on this but i would think that being a

lawyer you would say i know, you'd after people what statutory authority -- >> and that's in the letter. cite the specific statutory in that letter. >> my time has expired. in fact, i've gone over. i would recognize the distinguished i guess you're pinching for mr. markey, the gentleman from new jersey. >> thank you, mr. chairman. i thank the witnesses. i thank you for your work in this investigation. let me begin with you, admiral. the jit completed work volume one in the case of coast guard part of the investigation in april. there were 50 specific recommendations, 40 of which the coast guard, that has recently concurred with. is that correct? >> that's correct, sir.

>> has the coast guard commenced rule-making on any of the recommendations? >> yes, sir, we have. this ongoing project to improve what we call subchapter in in title 33, cfr, which governs offshore activities, and we are incorporating the recommendations from this report into that ongoing rulemaking process. >> of these 40 accepted recommendations, how many will be enforced, say, by the end of the year? i mean, what is the timing on this? we keep hearing really a drumbeat from this room, drove fast, permit fast, move fast, let's do more. i guess i would like to see this sense of urgency that our colleagues are consequently hitting us with, applied to your

regulatory process. >> if i could characterize it this way. not all of the recommendations will require regulatory action. some can be executed as a matter of policy. in fact, we have already moved out on that. the risk-based targeting is a prime example. but we will do in our coastal state authority is we will mr. nicolai already do for ships. in other words, take a look at the performance histories of the owners, the operating -- >> have you at least determine how many of the 40 required rules that have to go through rulemaking process, can you getting another? >> i can give an exact number right now but i can get that for you. certain things -- >> if you could get back to the committee, kind of a breakdown of those 40, you know, here's a dozen that will be done this month and your two dozen that will have to go through the formal rulemaking, whatever that is, and lay those out for us

that would help. >> we can lay that out for you, sir. >> no, on the matter of the country, the country a flag, you talked about a risk-based targeting. that i think might be a suitable approach. right now there are, but see, well, about a third of the vessels operating our u.s. flag, about two-thirds are from other countries. five from panama, for example, which the coast guard has identified as the most at risk country. are there limitations that can be placed on some of these most

egregious violators of the weakest enforcers pending development of the more complete rules and regulations? >> yes, sir. but that risk-based methodology will do is stimulate -- >> while you're putting that in place, should there be limitations placed on some of the clear, clearly more risky flags right away? >> these are risk indicators. so what does is trigger more frequent coast guard examinations, more in depth examinations when we are on board. that is currently in place. that risk-based methodology is operating now and we're building additional information that will further refine the risk model. you are correct, panama has been identified as a flag state that

indicates greater risk than some others, and we're playing -- paying close attention to ships with panama and flex. >> would the gentleman yield? >> i only have a few seconds but i would be happy to yield. >> i would love to work with a gentleman to make sure that all our u.s. flag vessels african simply start to roll back some of the onerous regulations in our fabrication yards and get to a point where we can increase productivity in those fabrication yards. we would not have to worry about having foreign flag vessels in the gulf of mexico and use all u.s. flag vessels. >> i think my time has expired. i look forward to pursuing that. >> i thank the gentleman. we have a grant agreement here. well, we have a grant agreement to start. recognize the jump from louisiana, doctor fleming. >> thank you, mr. chairman. do we have the slide to throw

up? we had a hearing yesterday, and i will preface this statement question, being from louisiana we have taken three hits on this disaster. the first one was th the death f course of 11 good people, the tragedy for the families. the second has been the perception that our beaches and beaches of florida and alabama, mississippi, have been harmed to the point that tourists stopped coming. these were things that turned out not to be the case. and then thirdly, and more importantly at this point in time is that the permit slow down that mr. bromwich and i and mr. landry have had many discussions on. and i'll just give an example. what came out of the drink, because for us it's been what is in the process that seems to create this. and i've got one grabbing front

of you. i'm not throwing it out but talk about permitting activity in the gulf of mexico that, prior to the macondo disaster, it was taking, the permits were being approved at about the rate of, it looks like 110 per month. it dropped to 60, about half and it is remained there. and then if you look at the oil production, it's dropped from where was before, as i is 1.8 million barrels per day, and it looks like it's dropping off now to below 1.4 million barrels a day. so we are seeing the permit activity still well below par, production well below par, and this graph your shows you, if you look at the red bars, what you see is a difference between the reports from the obama administration as to how long it takes permits to be reviewed and

how long it takes for them to be approved. and what you see is the one submitted is the problem. so what the companies are telling us is people are submitting the forms, the paperwork, which by the way we heard from a witness yesterday going from an average of 30-35 pages, the 100 times that, well over 3000 pages that the forms are not uniform. that is, for one time it may be one way and another time another. again, the eyes are not dotted, teaser not crossed, they end up on someone's desk someplace. so we are looking at in many cases more than 100 days delay just in getting the permit application process up and going. we also heard that we understand that the final report came out just last month, but yet all of

this bureaucracy, the reforming of mms into boemre so forth, all this occurred prior to that report. so i would ask mr. dykes, since you're kind of really out of the system now, and maybe if you're a little bit of an objective voice, do you feel that this delay in permitting, do you feel that all these regulations -- >> would the gentleman yield? >> yes spent i just want to say that there responsibly was to investigate -- you're asking him unfortunate to make a judgment call. and i don't think that's quite fair to people that were co-chairmen that investigated. i understand what your asking but i think in this particular case it wouldn't quite be appropriate to ask. >> i thank the gentleman. i'll ask the question then to mr. bromwich. do you think that all this delay, and do you think all these new regulations, and the confusion that is going on in

that process, do you feel that is justified any period of most of which we didn't even have the results of the report? >> first of all, the data that you have is badly flawed. first of all -- >> i will interrupt you. every time we give you dating you always say that. we would love to have your data. >> i will give it to you right now. a time that it takes to review plans, and again, this chart conflates plans and permits, two separate processes, but the plans which you list is sometimes taking hundred days, 200 days, so on, it's just not true. we had outside consultants to take a look at our plan review process for three different breed of time. free macondo, macondo, and about a year after that. and the most recent period. and the facts are that currently it takes an average of 34 days

from the time of plan is originally submitted until it is teamed submitted and complete. 34 days. pre-macondo, the average was 37 days. in between when there was undeniably disruption in the process, the average time was 83. this is based on outside experts looking at the raw data in our files, and all 103 plans that were submitted during those periods of time. >> yeah, well we don't have that. why is it, you know, we have been calling your department, your office to try to get that data. we can't get it. of course, we have the incident with mr. landry who couldn't even get in contact with one of your officials, couldn't even get a phone number. we give this any meetings, intense, we can't advocate this information directly from your

department. and i can tell you that that certainly doesn't explain why production is continuing to go down. we can disagree with your facts, even though we don't have your facts to compare hours with. we publish ours, you don't. but the production is clearly going down. nobody seems to dispute that at all. >> we do publish ours. i understand from hearing from you and many others that it may be confusing. we are happy to meet with you and members of your staff, and further explained what the data means and how -- >> where is it published today? >> it's on our website spent on your website? >> right. >> i'll ask my staff, natural resources staff, all tell us that there is very little information, inserting nothing that clarifies on your website. >> well, they may find it confusing but no one can honestly say there's little information. there's a ton -- >> the gentleman's time has expired. i've been a bit lean on your.

i understand what the gentleman is going, and we would like that information. information. recognize the gentleman from oklahoma, mr. boren. >> thank you, mr. chairman. i want to thank the panelists were being here, and for the co-chairs for all they have done. all the work that you put in, and i particularly want to point out, director bromwich, we don't always agree, we don't always have the same philosophy that you have worked well with our staff and been attended, and your staff has as well. we do want to thank you. i've got a question, and this goes to captain nguyen. this is really troubling to me. as you know, the task of the marine board was to determine whether there was any incompetence, negligence or misconduct on the part of government persons in the deepwater oil spill, rising oil spill. and i've got an e-mail and this is an e-mail from, i guess his title is lieutenant commander

michael odom. and let me just read his e-mail. this is to randall, i hope i don't budget is up -- anyway, his e-mail basically says i made it to nola last night, new orleans, and we are starting the prep work now for my testimony. just as an fyi, if you're interested, the questions they will be asking are attached. call me if you need anything. everything is pretty informal and i can't be in hearing them until it is my turn in the barrel, so there will be a fair amount of standing around time. that right there is extremely troubling. the fact that a government person has already been prepped beforehand with what the questions are going to be. and so my question to you is,

whether it was mr. odom or other government witnesses, is it true that you will provide government witnesses with information, questions that were going to be asked, in a sense coaching what the responses are going to be? is that true? and if it is, wouldn't you agree that it would be hard to make objective determinations if these government, from these government witnesses? and also, another question for the nongovernment, people from energy industry, were they provided with questions ahead of time as the government witnesses were? and how do you think that impacts the validity of your report? i would be happy to share any of those e-mails with the committee and with the shear. >> we would like to have those been. >> thank you. >> mr. boren, they so my understanding is that in terms of witness prepping, government

witness prepping, our policy is that we sit down with our witnesses and explain to them that these are the areas we are going to be explored. and it could be some question we will be asking. but my understanding is that we did not provide answers to this question and i understand that practice is acceptable. if my understanding is incorrect i'm sure the coast guard would provide -- >> but if the government witnesses were provided with the questions beforehand, why weren't the non-government witnesses provided with the questions beforehand? the folks from the industry. >> right. my understanding is coastal policy that we could prep our witnesses by explain to them the areas that we going to go into and the type question we might ask them. we not provide answers for them. >> let me interrupt real quick. the questions that we were going to be asking, you said the areas. if i come up with this attachment that shows these are the exact questions, would that

be against coast guard policy? >> what attachment comments are? >> if there's an attachment to his e-mail from mr. odom who was the last person inspected, if it was an attachment that had the specific questions, not the areas to be discussed, would that be against ghost our policy? >> my understanding is that providing questions that we potential ask in a hearing is according to coastal policy. we do not provide answer to the witness, or we do not coach them how to answer the question. our witnesses will be under oath and he speak to the truth. so i do not believe that compromise integrity of the investigations. >> okay. i want to thank the captain. mr. chairman, i just think this is kind of a troubling development. i wanted to share with you. >> perhaps we can work together to dig into this a little more, and maybe from a doctorate standpoint, but certainly to get more clarification but i think the last point you made as to

specific questions rather than general areas is something that needs to be pursued and the committee would be more than happy to work with you on that. >> thank you, mr. chairman. i yield back. >> recognize the gentleman from florida. >> thank you, mr. chairman. i no earlier in the year we were presented with the presidents commission and their findings. and then today we have obviously the gat report. in learning everything that i have learned, stuff that i've gathered, icy recommendations. there were none, i'm sure you've read it, nine recommendations that the president's commission made. i'm looking at the report that was given to us today, company practices and regulatory agency recommendations. i guess my question to you, mr. bromwich, is, is in none of this do i see any, and it's kind

along the lines of mr. boren, none of this delay see any recommendations for any pointing out that where the government or any responsibility -- bore any responsibility and not preventing this accident. and so, therefore, i would like you to tell me where did the government fail? okay? because the one thing that i see in all of the industry that i'm looking at is governments presents. so i ask you, where did the government fail and what are the recommendations that follow that recommendation of how your department and your agency is going to do their best to prevent this from ever occurring again? >> we do do our best at all times to make sure that nothing like this happens. and mr. dykes has worked for a number of years in connection with helping us do that.

the fact is you can never guarantee that an accident like this can't happen. but what you can do is to take regulatory action and enforcement actions -- >> but -- >> let me finish, please. >> no, sir. [talking over each other] >> we've already put in place new rules, new safeguards that address the technical issues that were addressed both in the presence commission report and in the gat report in terms of strengthening the requirement. >> this is simple. where did the government fail? you had written -- >> we didn't have sufficiently strong regulations that were both on the prescriptive area and also that set some of the performance-based standards that the agency historically has not had, but now does have -- >> budget issued citations to this particular organization, this particular well. i understand there were

infractions, there were areas where they had already been cited, correct? >> well, they are cited as a result of this report. are you saying they had previously -- >> that's what i'm asking you. >> no, they had not been. >> for your belief is that the government did everything, everything was my understanding, that there were instances where basically the government has not done its part in getting rid of problems that may exist. spinning this was not a governmental failure. this was the failure by the companies who drilled the well. now, there are things the government can do through strengthening its regulations and to increasing its inspections that will help to reduce the chances that anything like this will happen again. you can never eliminate it. that's what it needs to be a partnership where we asked the government to our best to improved, simplified, modify,

adopt regulations. and industry on its own needs to continue to be committed to increasing the safety offshore. >> what part of the partnership is recognizing what both parties can do to improve the system going forward. and i'm just saying that in all of these reports that we've been getting and all the thousands of hours, there is no recognition, in the partnership, that you claim you want, there's no recognition of what, and you're a big part of this industry. obviously, your regulatory presence, that there's no recognition, in other words, all the fault. i have found fault squarely on operas in the gulf and i just find it, it's amazing that none of the changes that an administrator would see necessary to prevent us from going, from happening again, are ever-present in any other papers that we get. >> they are in the presence commission report and the art to some extent in our report and we've already acted on those

spent we don't know that. i mean, none of the nine recommendations in the present report deal with your agency or changes that are necessary in your agency. i mean, so i challenge the statement you just made. i see i am running out of time. so mr. chairman, i yield back. >> the gentleman from maryland, mr. sarbanes is recognized. >> thank you, mr. chairman. appreciate it. thank you all for your testimo testimony. this report will be, is an important piece of the puzzle, and we ought to pay great mind to it. i wanted to ask you, director bromwich, to speak to the importance of resources for your agency, particularly as a response to the line of questioning you just got. in other words, you alluded to

the fact that where government might have fallen down on the job was you not being able to do as much inspecting as you would need. and i remember us having hearings in the early days of this, this disaster where we got statistics about, you know, the number of production facilities and platforms and others that individual inspectors were responsible for, very small number of inspectors to cover, a tremendous number of these facilities. and so i wanted to give you the opportunity to speak out important it is that the resources be there, the capacity of your agency and the oversight function that performs. and any proposals that relate to have industry can help to fund that kind of inspection and oversight.

>> thank you very much for the question. obviously, resources are critical, and i spoken here and elsewhere many times about over the 20 years of its existence, this agency has been starved for resources, have had a patently inadequate level of resources. so for example, a number of inspectors. shortly after deepwater horizon we had approximately 58 inspectors gathering, just in the gulf of mexico, more than 3000 facilities and rigs. and when you compare it to the resources, inspectors compared to facilities, and some of the other countries, substantial offshore activity like the u.k., like norway, it's laughable how inadequate our resources, it would be laughable if it were not so serious. so we very much appreciate the

presidents request for additional resources. the congress' efforts to find at least some of those. but we are nowhere near where we need to be in terms of the resources we need. we need to hire scores of additional inspectors. we need to bolster our regulatory program so we can address the sort of issues that the congressman was talking about. but do it in a way that is collaborative with industry, that puts in place regulations that make sense and that are more performance-based that are historically prescriptive regulations. so we are trying to get the agency with congress' health and the presidents help off the starvation diet that it's been on for 28 years, and it has dramatically impeded its ability to do the job to all of us want it to do. >> well, i appreciate that. i hope that the majority of appreciate it as well because in their appropriations bill where

they take the budget for boemre was admittedly under where it needed to be. i think to the tune of about $35 million is against the original request. so i hope this resources will be there. i also wanted to ask you to just restate what i thought were very impressive statistics from a moment ago about how you handle the turnaround time for the issuance of these permits. and i think you even noted that you've got the time down to a lesser number of days now and even existed before the deepwater horizon tragedy, which is a real tribute to the agency. it's not something i think the average person necessarily appreciates. i wanted to give you a chance to review that, that one more time. >> i appreciate that. and it's very troubling and disappointing to me what i think are really urban legends about

the length of time it takes to review plans and review permits. get circulated and research led and recirculated again. we have made a huge number of efforts to work together with industry and the gulf, to clarify what's required in plan submissions come to clarify which required, we've had workshops both on plans and permits, which have been extraordinarily well attended by industry where we have taken every effort possible to answer the question that operators in the gulf have. they thanked us for that, the clarification we have provided. and i think that's part of the reason that processing times for plans and permits have been reduced. i heard mr. clements say that some of the plan packages are 3600 pages long. i gather that was something said in an that, and as i said we looked back along the submission we could find.

we've only candidate. so i don't know where these stories come from, but they are not true. spent appreciate it, and i yield back. >> the gentleman's time has expired. the chair recognizes the gentleman from mr. texas. >> thank you, mr. chairman. i would like to thank the panel for a parent to date him and director bromwich i'm not going to ask you about planning are permitted today but i hope that you back many more times to do so. >> thank you, sir. >> as i understand, this will be directed primarily to captain nguyen and mr. dykes. as i step back and jump up to the 50,000-foot level, it looks to me that this action occurred because of three principal reasons. when he shredded planning, series of planning and design errors. u.s. safety systems that didn't function as designed, or they were, they were not operating correctly. then lastly you had human error and response problems. this is a philosophical question

for you. i think most of us believe we can address safety and design through regulations. we can address the safety system design and operations through regulations. widget each concur with that? >> yes, sir. i would concur with that. but the critical aspect is what you talked about last is the human error aspect. >> i'm going to get that to him it. captain nguyen, do you agree? you can address the first two problems i think with regular toward oversight, is that correct? >> yes, sir. in the coast guard in our regulation we have equipment standards and have operation standards. however, we also on human elements we also have licensing with mariners so that we taking care of some of that, comes with training and licensing spent through training and capabilities we help. >> yes, sir spent that takes us to the philosophical question. and this is not to be a gotcha

question because i'm going to ask the next panel the same thing. how do you a rest to human error problem that we have? i mean, you should when a pilot makes a series of pairs, and we crash an airplane, how do you address the human error problem? can you do that only through regulations? what else does it take to get there? >> philosophically, from the standpoint to reduce the number of human errors you have to reduce the number of interactions where you need the individual to make a decision. if you can reduce the probability by reducing that number, that's the first a. that's where you come into administrative controls or engineering. and remove that aspect of the job. the second half of that is where you actually cannot engineer out or put administrative controls in place to remove the individual from the equation,

and you have to factor him in. key to that is awareness, knowledge, training, education, and getting the individual, all of the information that he needs in a format that he can understand it, digest it, and make a decision based on what he knows. >> my question would be, do you think industry got the message? because if we don't fix this part of the equation, and we will have, not this accident begin but we will have another accident of some sort. because it's impossible to legislate away or regulate away human error. so do you think industry has gotten the message? has the industry learned from joss perspective? do you think they got the message? >> i would hope so. i can't say that, i can't speak for industry from that standpoint. from our report standpoint i hope they got the message. >> let me rephrase the question.

do you have any evidence that they haven't gotten it, that they haven't tried to respond affirmatively to take care of that? >> no, sir. i have no information that would indicate they have not gotten that. >> captain nguyen, do you? >> yes, sir. in our report with safety culture, not only do we saw discrepancy on one vessel, but we saw discrepancy on multiple vessel in multiple location in corporate office. so another thing government regulation can, you know, regulate safety culture, and i think that when i went out to visit -- >> i think you answered it i'm going to reclaim my time because i have two more questions if i can. admiral salerno, coast guard has jurisdiction on foreign flag vessel in u.s. water, is that correct? >> that's right, sir. >> i forgot what my last question was, sorry about that. oh, there was an allegation,

this is for director bromwich, that you don't have sufficient legislative authority to issue the regulations, to address the causes of this accident, to keep it from occurring again. is that allegation correct? we heard the minority sites it from the outside of this conversation. >> we talked on a number of other occasions that certain legislative, including raising our civil fine authority would be extraordinary helpful. this incident certainly underlies that. i've spoken to the chairman about the importance and desirability of having organic legislation to support the new agency with which we have enforced to a specific safety related issues, those don't flow legislative recommendations enough for specifically from this report. that's correct. >> that's what i thought. so you have the authority, i mean the regulations you have come i guess what i'm trying to say, the allegation that is not sufficient, and that we need

more legislation to fix this, it seems to be in correct? >> the specific issues are agency deals with in terms of being able to regular the industry, we do think we have the power that we need. >> okay, thank you. >> the gentleman's time has expired. i recognize the gentleman from arizona. >> thank you, mr. chairman. vice admiral salerno, in the report u.s. coast guard identify transocean and deepwater horizon, their crew as partly complicit in the blowout that led to the disaster of the oil spill. what regulatory changes do you think we prevent this sort of negligence going back on human error issue from happening in the future? and how did the u.s. coast guard assure that the study was conducted in an objective manner? >> sir, there are a number of things at work you. summer design related, systems

in place as was just discussed. and some are human element. i think one of the most significant aspects of this case is the dual command structure that was on the rig and the confusion that that created nasty who had authority in an emergency. and as far as the actual conduct of the investigation, i think mr. dykes or captain nguyen can focus on that more directly. i was not part of that investigation. >> thank you. director bromwich, the same question, how did you agency issuer the study was conducted in an objective manner? and then if you would, because we went through this already, just sometimes you have to put a historical context into the conversation. is the agency that you had, gone through significant reform and restructuring, and has asked for

received initial support, to put together to do its job, in response to what was government lack of oversight at the beginning of this process, and also to deal with the ethical issues of the kind of cozy industry regulatory relationship that existed. and i think i should be part of the context that we talk about. so if you could talk about where the agency was, where it is now, i think that's important. and the objective manner. >> let me talk about where the industry, where the agency is now compared to where it used to be. obviously and not only has a different name, we split it into different component parts to eliminate some of the mission conflicts that existed in the old mms. and we worked extraordinarily hard over the last 15 months to get debt reorganization right, and that when final, i think you know, on october 1.

so we now have a revenue entity that is in a different line of reporting within the department of the interior. the most recent split is the split resource manager and the safety and regulatory agency into two parts. not only did we do the re- organization and splitting of the agency, but we have based on the many reviews, studies, investigations of the agency taken a hard look at ourselves and some of the weaknesses that have been identified, including the alleged coziness with industry over time. and we are in an ongoing way looking to reform many of the ways that we do business. that is in midstream. that's a process that needs to continue and it needs to continue for a significant period of time. it relates to enforcement. it relates to investigations. it relates to investigation. it relates to a whole raft of things. and you have my commitment that

that will continue. in terms of the investigation, mr. dykes concert we speak to that, but the investigation, the designation of witnesses, the questioning of witnesses and so forth was handled by the investigative team and by the investigative team alone. you heard mr. dykes say that with the exception of the 11 witnesses, because of the tragic death, they were not able to interview, in his words, they left no stone unturned and gathered all the information that was relevant. i know of no reason that that is not accurate. >> thank you. i had to question, preface to mr. dykes, co-chaired and the team for the report and the study. very much appreciate it. i do think it's objective, without question. and the last closing question for you, mr. director, interesting process going on where government itself offer what happened. we can't ask industry because

half will plead the fifth in the next panel. but we can ask you. government had a role and there was corrective steps being taken to ensure that that role is not a passive role anymore. that's how i see it come and know just ask for your response. >> i agree with it. i think largely because of the shortage of resources we have been too passive in the past and we're looking to change that. >> thank you. >> the gentleman's time has expired. the chair recognizes the gentleman from maryland, mr. harris. >> thank you, mr. chairman. i will yield my time to the gentleman from louisiana. >> the gentleman is recognized spent i thank the gentleman from maryland, and the people from louisiana to as well. mr. bromwich, i just want to clear up a couple things, which i have some concern on the authority that you all believe you have to reach into, conduct oversight over contract and subcontractors. spent i do have a statutory

citation for you. .. >> i won't stipulate that that's in the code. i know you are a prolific lawyer and litigator, however, i entitled 36250 as who is

responsible for fulfilling legal obligations, and i'll tell you when you are not the sole leaser you are responsible, ect. within that >> and that's exactly the regulatory work. >> okay. but there's nothing in here defining contractors and subcontractors. when you go back, like i did in my review this morning, they define leasees -- >> i didn't know this was a definitional issue. >> normally, the code is specific in defining who those people are. i think you would agree to that. i'm sure you used that several time in litigating cases, and also in the request made, he asked for the internal legal analysis by the interior department that justified the expansion of your current

regulatory authority, and i don't see that you provided us with that. you cite the code. i certainly will go back and look at that particular part, but that particular part brings me back to the part i looked in, and i don't think it gives you that authority, and, of course, that's under y'all's regulations that you prom mull gait. what the chairman asked for is where you get the authority -- >> section 24-b, the united states code, title 23, the united states code, section 150b. >> b or d? >> b, b as in boy. >> okay. thank you.

>> okay. mr. chairman, i yield the balance. >> okay. go ahead. >> thank you to the gentleman from louisiana. this question is for mr. dykes. do you feel that the -- what was the impact of the attorney general's announcement that he was going to pursue a criminal investigation in terms of getting to the bottom of this investigation? >> i believe it may have forced some of the key witnesses not to testify, and, for example, mr. mark hafley, one of the bp engineers testified before the jit during the seconds hearing, that was the week of march the 23th -- i'm sorry, may 24th, and the criminal investigation came out june 1st. two hearings, we wanted to call him back for further interviews, and he refused to testify. >> okay. do you think that the report or the follow-up recommendations or

the regulation, regulatory changes followed the recommendations? is there any loss of fidelity in those because of the fact that attorney general holder issued this criminal investigation announcement? >> no, sir, i do not. >> okay. thank you. i yield back. >> time's expired. the next gentleman recognized is mr. landry. >> real quickly, i want to state -- mr. bromwich, we continue to hear resources needed, but the see the budget in 2009, you had $116 million. it's hard to count all the zeros. 2009, you went from $114 to $181 in 2010, and from 2010 to 2011, you went to $225 million, and so

i'm just real quickly, have you utilized all of those resources in being able to hire everyone that you could possibly hire today? yes or no? >> well, we utilized the resources to hire people. if we had more resources, we could hire more people. >> you hired everyone you can possibly hire today? >> we put out announcements, and we didn't know until april how much money we'd get, we immediately put a full court press on people we needed hiring like directors and drilling engineers. yes, we made every effort to bring as many people on board as we possibly could given the resources provided us. >> so you've hired everyone. >> no, we've hired everyone that we had the money to hire. we have not hired everyone that we need, not even close. >> okay. mr. dykes, and of course, mr. chairman, let me know, please,

if i'm out of balance here. under mms's, under the guidelines and regulations that mms had in place at the time of the accident, okay, do you believe that they were sufficient in order to prevent the accident? in other words, and this goes to what was said, did boma have the ability under the regulations that were currently in place to help prevent this type of accident? >> that's more of a philosophical question from that stand point. when we looked at the regulations on the books and compared them to the event, we found nothing that directly would have prevented it, and it's hard to forecast, as you put regulations on the book, to

forecast what you're trying to prevent. >> okay. real quickly, because here's the problem i have. i want you to know today i got a call from a gentleman, a family, a father who went to work in 1973 with a second grade education, a son who didn't complete -- didn't go to 11th grade, and another with a ged, and they got laid off last week. they were in the marine offshore business. that flies in the face of what we have here that the process is up and rolling, and gulf of mexico is back. the man has never looked for a job since 1973, but he got laid off last week. that family, combined, those three members brought home over half a million dollars combined. good jobs, okay? good jobs. what i'm trying to understand, as i read through the investigative report that the three of y'all had is that this was human error.

was there a systemic problem in the industry based upon y'all's findings? >> the investigation was not pointed to look at industry as a whole. >> do you believe there's a systemic problem? i mean, you did a lot of investigation. captain? >> sir, we only up vest gaited -- investigated diesel. we -- >> you're making a judgment call there. i understand what you're -- >> i guess, mr. chairman, i'm trying to understand, they've done a lot of work. they looked over a lot of evidence. >> they have. >> and, of course, mr. dykes has been working for mms for 17-plus years i guess? >> 12 years. >> 12 year, and so he would have seen a lot. you know, i just can't tell you how much i appreciate this witness, and i'm trying to understand because we have a political report that the president wanted us to take legislative action on, and yet we have a scientific and

fact-finding report that is contrary to the political report, and i've got people up employed in my district. i got an industry suffering, a director saying we're increasing permitting, and everything is pointing to the fact that the problem we have is politics, and that's what i'm trying to get the bottom line to. that's the only reason for the question. >> now, if the gentleman would yield? listen, i think that's probably something that this committee will have to weigh and come to our own conclusions. you asked me to kind of say if your question was out of line or not, and perhaps it may have been to the co-chairs, but if they have an opinion, obviously, we welcome that, but i think i have some concerns, too, and drk drk -- okay. >> fair enough. i yield. >> [inaudible]

>> yesterday, the department issued violations to bp, transocean, and haliburton for violating regulations. in place at the time of the spill, bp was cited for seven violations. unfortunately, the monetary penalties associated with the violations, leading to the worst environmental disaster in american history, would amount to only $21 million for bp and $12 million for haliburton and transocean. do you think that's a significant financial deterrent to oil companies so we don't have a repeat of the disaster, or should congress pass legislation to increase the civil penalties for oil companies that violate the law? that's a proposal which i have made along with mr. holt so that

the penalties match the actual events that spoiled our environment. mr. bromwich? >> no, i don't think the current civil personalty is a deterrent. i don't even think it's close. in a market where it costs between $500,000 to $1 million a day for a rig, the kinds of figures that you are talking about is trivial to these companies, and so i think there needs to be a very significant increase. i've resisted in the past putting a dollar figure on it, but it needs to be clearly well into the six figures to be a significant deterrent for individual oil companies and to provide a general deterrence for the industry as a whole. >> so you're saying that you start with $100,000 per incident

per day at a minimum, but you think that congress should consider raising them much higher in order to ensure -- >> oil companies pay a price when people die, when businesses are crushed, when the environment is spoiled. is that what you're saying? >> yes. >> the federal government has the authority to suspend or debar companies that commit fraud or violate federal law from receiving contracts or entering into agreements with the federal government. the department of interior has the ability to debar companies from nonprocurement programs including lease sales. suspension and deparment has a different -- debarment has a different purpose than penalties. it's not intended to punish, but to protect the government and the american people from unlawful and unethical

companies. companies can be suspended or debarred for violations of statutory or regulatory requirements. fraud, criminal, or civil judgments against them, and a lack of business integrity or business honesty. the budget guidance describes the purpose of suspension and debarment for nonprocurement program. specifically, it states to protect the public interest. the federal government ensures the integrity of federal programs by conducting business only with responsible persons. the first gulf lease sale since the bp is skell yuled in -- scheduled in december. should they consider debarment to give time to assess whether or not bp made the necessary changes? >> we are not going to suspend or debar bp from the lease sale. we considered and thought about this issue quite a lot, and we don't think it's appropriate in the circumstances.

i do want to remind mr. marky that bp has taken on itself the obligation to abide by additional voluntary requirements over and above what our regulations requirement i think that has been their approach in dealing with my agency since i've been there, and also given the historical record out of shore, we don't think suspending or debarring them is appropriate. >> again, the reason i propose -- the reason i am raising these issues is that it's not just the gulf of mexico; it's everywhere. i mean, you know, when you pass a statute, you know, against some crime, it's not just to protect the people from where it occurred originally, but to protect people everywhere else from the same people committing the same kinds of things. okay? we're not limiting this. we're looking at this in terms of anyone anywhere that might

have the same people out there thinking that they got away with it, so i think we should take another look at it whether or not bp should be allowed to participate. i think, in my mind, it's still an open question that should be dealt with as part of this entire process, and mr. chairman, i thank you. >> time of the gentleman has expired. gentleman from pennsylvania, mr. thompson. >> thank you, mr. chairman. my question is for the co-chairs, and just a clarification regarding a specific piece of equipment, the riser disconnect. it seems to have played a key role in the incident. on the day of the disaster, and on that specific day, which

agency was responsible for the inspection of the riser disk connect with the deepwater horizon? >> that would fall under the department of interior, the minerals management service. >> okay. very good. was that disconnect properly inspected? >> all the information we have, all the inspection documents indicate that it had been inspected. >> so what happened? >> well, as report indicates, we believe that the second explosion that occurred on the rig near the floor took out all the control lines to the b.o.p. stack, and by this time, we believe the pipe got into compression such that as it goes through the sequencing, that disconnect will not function until you have completed the sequencing of the b.o.p. stack closure. >> okay. thanks for the clarification. i yield back, chairman. >> gentleman yields back.

we have had requests for several members, at least on my side, would request for a second round, and i'm going to honor that. we'll begin the second round starting with dr. fleming. >> yeah, thank you, mr. chairman. if you would throw that slide back up again that i talked with director bromwich a moment ago. mr. chairman, this is a hearing devoted to the accident investigation report. i'm happy to come back at any time as i have in the past to talk plans and permits. it's not fair, frankly, to the witnesses to have to go through issues that are exclusively mine. >> mr. chairman, i just want a clarification. that's all i'm asking for. >> because we had the line of questioning earlier and the hearing before, and i know sometimes we overlap, but there is an overriding issue. certainly, i've heard it, i know

you have director bromwich of people on the gulf coast in response. i think it's appropriate this time because it does all tie together. i recognize the gentleman from louisiana. >> throw that up, and we may come to an agreement here after all. is it coming up? you're not able to bring it up? okay. it's the bar graph that i showed before. now, you indicated, and i forget the words you use, but it was fairly true that was dishonest, not true, a lie, what's your characterization? >> badly flawed and misleading. >> all right. it comes from the gulf economic survival team. where did they get the data? >> yes, we talked about that last time. it's from the report issued over the summer, and as i told you last time --

>> let me correct you before you go further. no, sir, it comes from your website. we got -- they extracted this there your website, now. s reason why there's confusion, and i think you used that word, is because it's hard to find. we actually had to go through and search. i've got three different screen shots, and if i had this graph, i would show you that in bar graph 1, i believe that's shell, and we actually, and, again, it was extracted from your data. >> let me be clear. are you saying that specific bar graph is on our website? >> no, sir, the data. >> okay. >> it's created from your data. from this, you see the besi logo on the first page here. the second bar graph, it says from your website, it says "receive date 9-20-2010", and

then it says "deemed submitted march 31st over six months," and then the green part of the bar graph, we have to go to staff instructs me to go to another part of your website. the point is that what they did is simply take your data and put it together in a graph. >> well, that's not what they did, and i'm happy to go through this privately with you in detail. that's not what they did. >> okay. until proven otherwise, i have to assume that's true. i have another question for you. this outside independent agency, now, that's the first we heard of that. who are these? >> mckenzie and company. >> mcmckenzie and company. you can get that to us in a few days? >> what are they suggesting? >> it's an independent analysis. >> i just got it last week. this addresses your concern too,

mr. chairman. we have been focused on making clear our permitting process. we are very aware of now concerned and upset mr. fleming is, mr. landry is, we understand that. mckenzie helped us with a wide range of issues primarily the reorganization, and specifically looking at specific issues that are of importance to me, and including among the things they looked at recently were permitting process, which we've improved by making it transparent, and the plans process, and so the review that i got that i mentioned earlier in response to mr. fleam -- fleming's question, i just got last week as a result in the review they completed in the last ten days. we're not holding out on you. this is what you requested of me previously. i'm happy to provide it to you.

>> sure. i'm just asking how quickly can we get it in >> it's a one pager. i can probably give it to you this afternoon. >> okay. great. we'll look forward to that, but anyway, again, to reemphasize, that's where these people say they got the data. again, we can go back and sit in front of a computer screen, but, again, there's -- that's where they say they get the information. the one example we were able to find correlates with what they say is on this graph. now, you talk about -- i mean, it is our opinion, and certainly, and i asked you this question before. i'll ask it again mew -- humorously. you feel they are good with their data? i asked you that question before, and you answered, no, you did not think -- >> no, i have not changed my answer on that.

>> okay. good. they say the production levels continue to go down, going down to something around 1.3 million barrels a day, so something is holding up production, and, again, all the data that we see says it goes back to the permits or the pre-permitting process. you say that that could probably be improved by better funding. can you -- because see, again, the permit has been increased by a factor of 100. >> the permit has? >> the permit size. remember -- >> no, no. first of all, you said it was plans. that's not true. i think somebody testified yesterday -- >> applications -- >> there's a plan application and permit applications. you were talking plan applications, and a witness said yesterday they run as long as 3600 pages. have somebody look through the file of all plan applications, and they couldn't find anything remotely close to that long, so i would ask you to ask your

constituents to produce it. i'd love to see it. >> sure. i guess my question is what is it -- let me ask you a two-part question quickly because i'm running out of time. would you say -- would it be fair to say that the perceived slowness of performing could be improved by more resources? is that the cation you're trying to -- case you're trying to make? >> yes. >> and if so, do you think there are also other parts of the permitting process that could also be streamlined even short of increased resources? that is to say better applications, better training for people who fill them out, do you feel there's improvement there that could be had? >> all of the above, and we've done a lot of that already, and i think industry has seen and will continue to see the results of those changes we've implemented. we fully shared them with industry, and we're clear we're

receptive to their suggestions to streamline and make the process more figure. they can check the status of their applications online. that's brand new. that's a welcomed development for them. >> this is the last question. >> the gentleman is really over time. if -- i really think we need to respect everybody has the time. i understand the gentlemanments to pursue, but we have these five minute rules which sometimes are erroneous. i recognize that. somebody who finishes earlier can yield time to you. >> thank you, sir. a couple of questions from dr. dykes, earlier, i think in a response to a question regarding the announcement of the criminal investigation by the ag, that that may have impacted the decision of oil company employees, not to testify before

the joint committee team, but from what i understand, the criminal investigation was announced on junejdt >> and one, just to follow-up if

it's -- do you think that the government, at this point, the u.s. attorney, should not look into whether there was criminal violations in this whole episode that we're talking about here? >> sir, that's outside the scope of my knowledge. >> i want to go back to a point that i think you had in your -- you have 27 years experience in oil and gas, both in the industry side and the regulatory side, and all the experience that you have in terms of accident investigation, the git concluded that the negligence of the part of bp, poor risk management, and adequate oversight was ultimately responsible for the blowout. what regulatory changes do you

think are needed to prevent and mitigate this kind of mismanagement in the future? >> well, key things in the recommendations, and once again as i stated earlier is if you can remove those decision points from the operator's control and put it into the regulatory side of the equation, then you're adding additional barriers in the regulatory process. for example, is the requirement for the negative test procedures, one of our recommendations is for industry and the agency to work together to establish standardized negative tests so that you have expected results and you can know what you need to do once you have those results. >> but if i may just to follow-up, mr. director, on another question. talking about the resources and the lack of adequate resources for the agency as it moves forward with not only these recommendations, but other recommendations that have been

generated in terms of how to prevent and mitigate these kinds of situations in the future. part of the staffing issue is over, not just -- we've seen the concentration of the question is on the permitting aspect, how to expedite that, how to cut the time. i'm sure the resources are needed, as the co-chair just indicated, on the oversight, coordination, technical side, that in the long term deals with the prevention questions we're talking about. >> that's absolutely true. ..

i think there's, there has to be an understanding that if that is to be expedited even more than the 34 day. back then there has to be corresponding resource allocation to assure that the oversight with the agency is responsible and we as a congress are responsible to the american people. this also is part of the package. it's a package deal. it's not a one-sided deal and with that i yield back. >> would the gentleman yield? just to follow-up with mr. dykes to a response he gave to mr. grijalva. >> no sir, no government witnesses took the fifth amendment. >> the chair recognizes to gentleman from florida. >> thank you mr. chair. mr. bromwich i just had a question just on the budget

issues. just a simple question. i am looking at some numbers provided for me on the budget, and i'm looking at 2000, 2008, 118 million, 209,116, 2010, 181 million, 2011, 225 and the president's budget request of 358. i mean, are those ballpark figures close? the it sounds about right. >> i know you don't and i don't want to be unfair to you, but i mean when we are looking at 2008, the 118 million to 2011, 225 and we are talking their certainly been accused by the other side the agency is being starved. that is almost in a three year

period almost a 100% increase in funding, so i mean, if 100% increase in funding is not enough, what is enough? >> the starvation comment was mine. >> it is also been. >> historical funding, and so if you start from nothing or close to nothing, a percentage increases can look quite huge on paper, and still not get to where you need to be. >> well, i think -- but i do think in the current economic environment, i think to make the claim to the american people that are 100% increase in your funding is nothing. i think it kind of falls on deaf ears especially in my state. >> i didn't say the increase was nothing. >> you said we started with nothing so the 120 million-dollar budget that you had in 2008 was nothing.

>> compared to what we needed, it was nothing. spiel right. i would like to yield the balance of my time to the gentleman from louisiana. >> quickly to follow up with that, thank you. mr. sutherland, did all of that increase go into boma into oil and gas inspectors? i mean, how much of those resources actually went to helping get you where you needed to get so that we could get the permit process? >> well, so, are you talking about the part of the increase that went just to add manpower? >> rightwrite, write. >> i don't have a percentage for you. >> would you say this five, 10, 20, 30? >> more than that. >> five, 10, 15, 20? >> it is a significant number. >> significant is not 10%.

50% would be significant because again what but we all have is a concern about where the money is going. i do don't want to give you more money just to add on top. i would let that you could scrub your agency and see where that money has gone. that is not quite as important as making sure that the men and women in the gulf of mexico do so safely and i think you can allocate some resources. >> where we begin this process congressman landry i think the shared sense of the majority and the minority was where we were at the most efficient was in the number of inspectors to review facilities. and so, that was our initial hiring priority. that has been replaced over time with a more balanced set of priorities which includes continuing to hire additional inspectors inspectors as well as hiring people who are directly involved in the permitting process. >> again i would just like to see where the resources are going within that increase but anyhow real quickly also, i want to let you know i read the

citation you gave us. i don't agree with you, but that's okay. i could be wrong. i have been wrong before. so, since we have a disagreement, just to clarify, are we going to be able to get the legal analysis from the civil is absurd because i think you said it came from the solicitor's office? >> the department of the interior, like every executive branch agency, has policies against turning over returning client communications within those agencies. >> but, but how does an attorney-client conflict -- i mean? on the part of government as well. i mean we are as much the client as you all are. >> no, you are not. >> i'm not? >> not? >> i'm the client agency in the solicitor in the department of interior are our attorney's.

>> is your attorney? and i guess congress just doesn't have the ability to conduct that kind of oversight for privilege? are you saying it is a privileged issue? so we don't have the privilege of being able to extract from you how you interpret the laws repassed? >> i have given you the statutory basis chairman landry so i don't see what there is to gain other than intruding on internal agency communications. >> we are trying to see if you are your sibling -- usurping your power. >> are a lawyer. we can talk about a. >> the time of the gentleman has expired. i find it interesting for nonlawyers to hear to lawyers. not that interesting. the chair recognizes the gentleman from texas, mr. flores. >> thank you mr. chairman. i didn't say this to my earlier rounds of questioning but i think we all mourn the loss of

the 11th -- 11 families that lost their loved ones and as a person who lost a brother to an oilfield accident i can fully identify with their pain. and so i come at this from a little different angle and that is because i want the industry to operate a safe is a can and they came from that industry. we always try to do that as much as we could. that said, takes me to the next question and this has to do with sort of an allegation that was lofted out there by the ranking member about fraud. are any of you aware of any frauds that were committed by any of bp or halliburton or transocean or anybody else in this accident? >> no, sir. i'm not aware of any information. we did not uncover anything that indicated fraud on bp's part halliburton's parred transocean's parred. >> we definitely have identified

many many errors and problems, but i have not heard anything about fraud or criminal acts. have any of you picked up anything to indicate there is a broader criminal act? >> in the course of our investigation we did not uncover anything that would indicate fraud or criminal activity from that standpoint. >> i did neither and i just want to make sure we didn't leave that out there in the air to cloud the issue. there were mistakes made. i think everybody has admitted that, and so the issue we are trying to address is how best to keep this from happening in the future. so that takes us to the next point, and that is more director bromwich, if we raise the fines materially, that is what happens in a vacuum. how does that influence what happens on the front and when these mistakes are made? we could raise the fines to a billion dollars a day but does that have an impact? i mean, does that change the way this would have come out? >> we have made efforts across

the board congressman as i think you know, so the civil fine authority that i'm requesting be raised is only a part of the puzzle that you are quite right. you need to focus on the front end. primarily you need to focus on prevention. our main focus since this happened, and that is what explains many of the new rules that have been developed, which frankly industry has found hard to comply with. we are in a better place now than we were a number of months ago but it was precisely because we were focusing on the front and and the importance of prevention that those rules were put in place very quickly. just a footnote, you about whether any crimes were committed. there of people looking at that in the justice department and elsewhere and i'm a criminal lawyer and i know what may not appear to be crime to a nonlawyers may indeed be a crime to somebody else. >> but you haven't seen anything? >> i deferred to what mr. dyke saw in the course of his work. >> but i mean you read the

report as i have and i haven't seen anything to investigate crime or fraudulent behavior, criminal or fraudulent behavior. i agree with you. the fine is part of the package but the other side of the aisle in this hearing is only focused on, let's go punish bp and beat the out of them and really to me we need to look at the holistic approach to make sure that nobody ever has to pay a fine again because they do it right in the beginning and you don't have the accidents to start with. that way you would have 11 more lives today and you wouldn't have had the pollution. bp wouldn't have spent 20 plus billion dollars to clean the mess up that they made. that is the direction i'm trying to go, is to come up with a preemptive response and not the sort of punishment response. that is the direction i would like to go. i would like to yield the rest of my time to the gentleman from louisiana. >> thank you mr. flores. mr. dykes, are you familiar with sam's safety and environmental management? >> yes sir. i am.

>> did bp have a simpson plays? >> data safety management system and placed. >> they have a complete functional safety environmental management in place? >> they had it in place. >> was that something that came within the scope of your review? >> yes, it did. >> was there any part of that bid failed which caused the accident? >> from the aspect of the program, no. the program did not fail. there were certain aspects that we pointed to, for example the risk register that bp had implemented to determine the risk dealt with the drilling of the well. their crewmembers or the engineers anyway, not the crewmembers but the engineers did not properly use the risk register. the management of change program that bp had in place, they were in transition from a paperwork management of change process to

an electronic management of change process. there were still some gaps in that management of change, but for the most part everything was intact. >> , so there is nothing that would say -- every company out there had a functioning sims and that would again prevent the accident? >> having a functioning sims adds to those additional barriers that i mentioned in my opening statement. but there is no guarantee that it will prevent it. you are trying to reduce the probability as much as possible. >> the time of the gentleman has expired and the chair recognizes the gentleman from arizona. >> mr. chair i yield my time to the gentleman from louisiana. >> that is why broken up. i thought we would have a continuity. [laughter] >> i want to go a little further. on this sims issue i'm concerned and i will probably have to go

back to director bromwich. you and i have spoken about this fairly often. i want you to know that yesterday we had testimony from a gentleman he said it took him five years to implement his sims program, to get one fully functional. now he is a small contractor -- >> so he did it voluntarily? >> he did it voluntarily. he actually is -- well, right now he is not under your oversight but i guess that is part of our argument earlier. he is actually in the coast guard in the coast guard pointed this out to him in 2004 or so so he determined because the industry he was going to implement the came five years. and so, he goes back to my biggest concern is that it seems to me that the measures have sims in place because they have

the resources necessary to implement these things. and you know i will say he graciously gave the industry 12 months to implement their sims programs when we know that they'll have there's so this really affects our small operators out there. so i would again ask you to comment as to the type of burden you believe we are going to place on our small operators at the expense that they are going to occur. again, let me at go that none of them said they don't want to implement sims, but we also heard from a witness who said that it is industrywide going to be a problem in november. and so really what i'm really trying to do is doing you a favor because the costs are going -- going to start coming in november and then you are

going to come back here and we will have to go through this all over again. so i'm trying to pass onto you with the industry is telling me. i know they are not telling you that directly, but you issued a permit, not me, so i think there's a fear factor there on that. so i wanted to pass that on and maybe you could tell the committee again, because we have heard from the investigators that this is not a crucial piece, but -- >> that is not what i heard him say. he couldn't guarantee that an accident when happen but he did say it would reduce the likelihood and that is the key. >> well, but okay mr. dykes, on a scale of one to 10, at 10 being the most crucial thing that we can do in order to prevent the accident, where would a sims fall? >> well, you can't look at sims is being a single component. sims is a management tool for

managing the operations. by conducting them in a safe and orderly fashion, it identifies multiple aspects that a company should look at and putting their operations programs together. hazards analysis, operating procedures, safe work actresses as an operating company large or small, that company needs to make sure that he is covering those bases. >> and, you know, you brought up a good point because the operators that i'm talking about that are in fear of what is coming, because there are 13 elements to the sims plan, have a majority of those elements, but their biggest concern is on the documentation standpoint. and so, maybe i will rephrase my question. if an operator, if an operator has a majority of the elements completed, again, on that scale

of one to 10, i mean where does it fall in being a crucial -- is that something you know, is it as important as fixing the problem of the b.o.p.'s the cementing of wells? is it that crucial? >> are operating sims programs should operate the repair of your b.o.p.'s in your cement design. critical to a sims program, and let me back up and rephrase that. critical to a safety management system, there are multiple models out there that you can use. you can use an isa model. iso- model. you can use the rp 75 which is just the safety environmental management program. you can go back to the original predecessor, that being api, rp 750 which is managing operating hazards. critical to that are four basic elements that, to me are the

cornerstone of those documents. that is hazards analysis, operating procedures, that is mechanical integrity, and managing the change within that group. those are four key cornerstones to any safety management brogue ran. >> thank you. the time of the gentleman has expired. the gentleman from pennsylvania, mr. johnson. >> thank you chairman. mr. dykes according to the joint investigation team, bp's will control manual states that the mud gas separator should be lined up at all times when displacing a kid but given it is only meant to handle small amounts, the diverter line is recommended to divert the kick overboard rather than on deck when you are working with high flow rates. i think we have all seen video of this bill and can surmise that this was a high flow rate. can you explain to this committee white crew on board the deepwater horizon would

direct a heavy kick to a device that couldn't handle the flow and in doing so, flammable hydrocarbons on board that eventually ignited the explosion. >> sir that is a critical question that we can only conclude that the crew on the rig floor at the time did not realize the magnitude of the volume of hydrocarbons coming on the wellbore. this well and i'm going to get a little technical here, this had a gig as oil ratio -- maggot as a breakout at roughly about 1500 feet in the water column. such that one barrel of influx coming up the riser and went against to the hydrostatic depth of 1500 feet, it releases roughly 3000 cubic feet of gas so a small influx from the reservoir of 10 barrels immediately gives you a large plume of gas on the rig floor as it breaks out in that riser. i believe that the crew, by the

time the gas brogue out the crew did not realize that they had substantial flow and a substantial release until it was too late. >> you think that the punishment of a thimble full of oil from a side under the clean water act created contributing to the disaster? >> a culture? could you define what you mean by culture? >> cultures influence decision-making. we have certainly seen in this body, and so the facts that are looming punishment under the clean water act is just a thimble full of oil being diverted over the side verses to the separator, as a decision point. did that contribute to that? >> i did not find any information that would indicate that. the issue with the well control

manual is to divert that flow once you have realized you cannot handle it. the indications from the data is bad they attempted to do that at some point in time, however by the time that decision was made the plume was already on the rig floor. >> is a it possible that knowing what all the punishments are, from the regulators coming in would influence that timing of making that decision? >> we can speculate. we could speculate and say yeah it is possible. >> i would yield the balance of my time to mr. landry. >> thank you. i have a quick question for you, admiral. what do you think the ability of the damon banks to beat the responsive quickly? how crucial was that in

lifesaving? >> well sir, they were right there and they saved the vast majority of the people who evacuated from their rigs. they were very crucial part of that and we recognize that crew for their actions. >> so, if they had not been there, that could have taken away -- save some lives if they were not as close as they were? >> it would have been certainly taken longer to retrieve the survivors from the water and to get them to a place of safety. >> okay, 15 seconds mr. florida's. >> thank you mr. landry. i wanted to ask, do any of you all have any criticisms of bp or halliburton or transocean's's corporative nisoor response to the investigation? starting with captain nguyen. >> no sir, don't. there were a lot of objections to my questions, but i believe

the attorneys were just doing their jobs. >> mr. dykes? >> i agree with captain nguyen. i did not see any resistance other than the normal objections to the lines of some of the questions. be admiral salerno? >> i was not actually part of the investigative process so i'm not aware of anything. >> i've lost my time. >> i can say that i'm not aware of any issues relating to dpr halliburton but i'm aware of the issue related to transocean where i think they relied on important witnesses and i responded to their ceo which was not satisfactorily responded to. >> the time of the gentleman has expired and remarkably in the second round, mr. landry has not had an opportunity to control his own time in his second round so he is recognized for five minutes. >> thank you mr. chairman. i just want to go back, --

i am concerned because i have fished out of the gulf of mexico and we are continually going further and further offshore. the distance it takes to respond to particular accidents is a concern of mine. of course this particular accident, we all were lucky. the seas were calm. it was at a time when water temperatures were warming up. do you feel that again, the ability of the damon banks to respond, because i think the next vehicle closest to them was the monica ann. is that correct? >> i don't have the distance to the the next closest vessel. as you know there are a number of vessels operating out there but i can get that for you. >> but the closer a vessel is to a platform when we are having drilling operations, don't you

agree that having those vessels there is a blanket of safety for those workers? >> sir, is basically a time distance problem. the closer a vessel is the quicker he can respond. >> mr. dykes? mr. dykes? >> no, i agree. the closer the vessel is when you have vessels in near proximity to these facilities, it gives some comfort to those individuals on that rigor on that platform that should they have to evacuate, they have a safe harbor to go to from that standpoint. moving forward i believe the next vessel was roughly an hour and a half to two hours away. to the deepwater horizon. >> yes, sir. that is one of our recommendations is for the coast guard to look at requirements for a standby vessel and i believe the commandant memorandum agreed with the tandem recommendations are.

>> thank you and before i yield to mr. flores, real quickly, i have always said that the greatest natural resource that we have in this country is not what lies beneath the waters or the soil but the men and women along the gulf coast and elsewhere who have such a dangerous trade. would you agree that is a fair statement? at the end of the day this is all about making sure that we give them not only as much protection, but also provide opportunities that if there is an accident, because we have heard from like mr. dykes is if we can't guarantee anything 100%, that we have a way to get those people safely home and because it had been a great day if we could have just discussed the m. bar metal tragedy of this bill rather than having to add the 11 lives that were lost there.

would you all agree with that? >> you can look at the life preserver. we can't guarantee that nothing is going to happen but we can give people a second chance, sir. >> go ahead, mr. dykes. >> the data indicates that, talking about resources, yeah the personnel that work in the offshore industry are the greatest asset and greatest resource. from the voluntary submittal of operators to the agency, indicates that you you have roughly anywhere between 30 and 35,000 people physically offshore. that does not include the service companies, the dockside facilities and so forth that support that industry. >> congressman flores has a couple of follow-ups so i yield the balance to mr. florida's. >> thank you mr. landry. this question is going to sound a little bit odd, but bear with me for a minute. back to the human element parts

of the equation that were part of this accident. one of the ways that -- i am a pilot and one of the ways i have avoided having any problem in my real aircraft is by flying a simulator. in that simulator, you can create all sorts of unusual situations, so that you learn how to inherently respond to those situations. do we do anything like that in the deepwater drilling business in terms of well control accidents? are their simulators? is there any sort of simulator training that is available to the industry today? >> my understanding is that there is, congressman. in fact on a visit i took to some of the facilities and some of the major operators actually saw a well-controlled simulator that is used in training i believe by exxon but i think a number of the other companies have it as well. i think they have adjusted modified and improved those kinds of simulator since the accident. i think that is the sort of