the government can push people along, provide funding, and say let's put 24 into the type of government programs that make sense for our future. >> host: brenan sasso. >> guest: the letter mentions i'll proving the government's i.t., information technology, and so it claims that the federal government can reduce spending by more than a trillion dollars over the next ten years by upgrading i.t.. how is that possible? >> guest: well, certainly technology, itself, the benefit of technology is that it does save money in the long run. companies of their own freedom invest in technology so they can perform better, be efficient, provide better customer service, and get more customers. the government has to do like wise. various states have done this. the experience i have at virginia department of motor vehicles is exceptional. virginia as a state invested in technology, be a pro-business state, it's bipartisan, every governor did it for 20 years,

the legislature does it, and it works. the federal government, i think, can do the same thing saying we have tremendous amounts of information, we provide the service whether it's to the veterans or medicare, or medicate, let's invest in the i.t. infrastructure to provide better service. that is what we should expect as a country. ..

and hundred 40,000 people from i ron of the world in the super bowl will innovation we are going to have a lot we had last year, lots of people and more things introduced and great things with it in cars or applications or tablets or you name it, and it gives you hope and excitement about the innovation which is occurring which is making the difference in our lives. it will be spectacular. >> garrey shapiro's group is the electronics association. several other groups signed on to this letter to the deficit reduction committee. we are going to put that on the web site you can read it at c-span.org/communicators. garrey speed is the ceo and branton sasso as a technology reporter with the hill newspaper for the hilboldt com. thank you, gentlemen.

>> we take you live now where the national democratic institute is hosting former secretary of state madeleine albright, and she is introducing the keynote speaker for two nights democracy award. the current secretary of state, hillary clinton. you are watching live coverage on c-span2. >> the state department team made creative use of every available foreign policy tool, earned the abiding respect of the armed forces and generated enthusiasm wherever she has traveled. those of us who have seen her a broad know that she is an incomparable representative for the country. she doesn't just make appearances, she makes connections by exploiting the goals that guide our actions and the interest we share with people on every continent. what you may not know is that our secretary of state has also been a stalwart defender of ndi

in an number of countries where our work has been placed in jeopardy. given her position, it would have been easy for her to point to the press of other business and priorities, but instead she has made clear that defending the truth about what we do is a priority and that on her watch supporting space institutions and values is at the very heart of american foreign policy. the arab democracy movement is only one area among many aware our secretary of state has acted in a timely and effective way to keep our alliances together, maintain our nation's commitment, defend our security and uphold our ideals. it gives me great pleasure to introduce one friend to many others. please welcome secretary of state, hillary rodham clinton. [applause]

>> i might say everybody in this room supports you and offers our sympathy for the death of your really remarkable mother. >> thank you. [applause] >> thank you. it's a great pleasure for me to be here this evening, and i thank my friend and my predecessor, madeleine albright, for not only that kind introduction but her extraordinary leadership, and in particular of ndi. thanks also to sherry bronson and ken will look for inviting me here today, and i want to begin by wishing mubarak to the

muslims are not the world. i think it's important to recognize that backed when the streets of arab cities were quite, the national democratic institute was already on the ground, building relationships, supporting the voices but would turn a long era of winter into a new era of the spring. now we may not know where and when the great people will claim their rights next, but it is a safe bet that ndi is there now, because freedom knows no better champion. more than a quarter-century old, ndi and its siblings in the national endowment for democracy family have become vital elements of america's engagement with the world, and tonight i want particularly to congratulate the winners of

ndi's madeleine albright a word, the women of appropriate communication techniques for development. women risk everything to demand their rights for the egyptian people come and they deserve those rights extended to them. and so we are grateful for their work, and we hope to see the rights that they fought for and advocated for and enshrined in egypt's new constitution, and we are proud to support efforts like these through our middle east partnership initiative. [applause] tonight is also a cingular special honor for me to join with even remembering three friends of the ndi, three people i was lucky enough to call my friends as well, geraldine

ferraro, a trail blazing a pioneer who live to the full list, her conviction that women belong at the heart of democracy. chalk, a passionate chairman of the democratic national committee who understood that some things are too important to belong to any one party and with his counterpart at the rnc, friend fahrenkopf put together a bipartisan coalition to sound the national endowment for democracy, and of course the unforgivable richard holbrooke. richard has many reasons why those of us here tonight applaud and remember him. he died just four days before the desperate act of a tunisian

fruit vendor set the uprisings in motion and i often wonder what he would have made of all that has happened since. i'm sure he would have had a lot to say and even more that he wanted to do to promote the principles that we cherish. so these three individuals are very worthy of the words that you have granted them this evening. and what a year 2011 has been for freedom in the middle east and in north africa. we have seen what may have well been the first arab revolution for democracy, then the second, then third, and in yemen people are demanding a transition into democracy that they deserve to see delivered and syrians are refusing to relent until they can decide their own future. throughout the arab world this year, people have given each other courage.

old fear has melted away and men and women have begun to make their demand in broad daylight. they've given many of our diplomats courage, too, and i want to single out someone who is here with us tonight. when our ambassador to syria was mobbed, insulted and threatened just for meeting with peaceful protesters, he put his personal safety on the line to let the syrian people know that america stands with them and he said he was inspired by their bravery. and as he drove into a city under assault by the regime, the people of that city covered his car with flowers. please join me in giving our own warm welcome to the ambassador robert ford, his wife and fellow foreign service officer. [applause]

[applause] >> thanks to you, robert and que, allyson for your dedicated service to the country. million tunis, cairo and the newly freed tripoli, i've met people lifted by the sense that their future actually does belong to them, and in my travels across the region i have heard chollet, purpose and newfound pride. but i have also heard questions. i have heard skepticism about american motives and commitments , people wondering if after decades of working with the government of the region america doesn't in our heart of

hearts actually long for the old days. i've heard from activists who think we are not pushing hard enough for space change and we've heard from government officials who think we are pushing too hard. i've heard from people asking why our policies vary from country to country and would happen if elections would bring to power parties we don't agree with or people who just don't like us very much. i've heard people asking america to solve all of their problems and others wondering whether we have a role to play at all. beneath our excitement for the millions who are claiming their rights and freedom that we cherished, many americans are asking the same question. tonight i want to ask and answer a few of these questions. it is a fitting tribute to

people like geraldine ferraro and richard holbrooke. they like to pose difficult questions and then pushed us to answer them. and in richard's case, that meant even following me into the ladies' room in pakistan one time. [laughter] as we live this history day-by-day, we approach these questions with a large dose of humility because many of the choices are honestly not our estimate. still, it's worth stepping back to speak directly to what is on people's mind. let me start with one question that i hear often. do we really believe that space change in the middle east and north africa is an america's interest? that is a totally fair question. after all, transitions are filled with uncertainty. they can be chaotic, and stable,

even violent. and even if they succeed, they are rarely linear, quick or easy. as we saw in the balkans and again in iraq, the rivalries between the members of different religions, sects and tribes can resurface and explode. the toppling tyrants does not guarantee that democracy will follow or the will last. just ask the iranians who overthrew dictator 32 years ago only to have their revolution hijacked by the extremists who have oppressed them ever since. and even where democracy does take hold, it is a safe bet that some of those selected will not embrace us or agree with our policy. and yet, as president obama said at the state department in may,

it will become the policy of the united states to promote reform across the region and to support transition to democracy. we believe that real space change in the middle east and in north africa is in the national interest of the united states and here's why. we begin by rejecting the false choice between progress and stability. for years dictators' told their people they had to accept the autocrats they knew to avoid the extremists they feared and too often, we accepted that narrative ourself. america did push for reform but often not hard enough for publicly enough. today we recognize that the choice is between reform and unrest. last january i told the arab

leaders that the region's foundations sinking into the sand even if we didn't know exactly how or when the breaking point would come it was clear that the status quo was unsustainable because of changes in demography and technology, high unemployment, endemic corruption and a lack of human rights and fundamental freedom. after a year of revolution broadcast on al jazeera into homes to riyadh, going back to the way things were in december, 2010, isn't just undesirable, it is impossible. the truth is that the greatest single source of instability in today's middle east is not the demand for change, it is the refusal to change. it's certainly true in syria

where the crack down on small peaceful protests drove thousands into the streets and thousands more over the borders. it is true in yemen were the president has reneged repeatedly on his promises to transition to democracy and suppress his people's rights and freedoms in this true in egypt if over time the most powerful political force in egypt remains a roomful on elected officials the will of planted the seeds for future unrest, and the egyptians will have missed a historical opportunity coming and so what we because democracies need for stronger and stable partners. they treat more, innovate more and fight less. they helped by the society's to air and hopefully resolve their

differences. they told leaders accountable at the polls and channel people's energies away from extremism and towards political and civic engagement. now, democracies do not always agree with us and in the middle east and north africa to may disagree strongly with our policies. but at the end of the day it is no consultants that our closest allies from britain to south korea are democracies. now we do work with many different governments to pursue our interests and to keep americans safe and certainly not all of them are democracies. but as the fall of hosni mubarak in egypt made clear, the enduring cooperation that we see will be difficult to sustain without space legitimacy and public consent. we cannot have one set of policies to advance security in the here and the now and another

to promote democracy in a long run that never quite arrives. so for all these reasons as i said back in march, opening political systems, societies and economies is not simply a matter of idealism. it is a strategic necessity. but we are not simply acting in our self-interest. americans believe that the desire for dignity and self-determination is universal, and we do try to act on that believer of the world. americans have fought and died for these ideals. when freedom gains ground anywhere, americans are inspired. so the risks posed by transitions will not keep us from pursuing positive change, but they do raise the stakes for getting it right. free, fair and meaningful elections are essentials but

they are not enough if they bring new autocrats to power or disenfranchise minorities. any democracy that does not include the population is a contradiction in terms. durable democracies depend on strong civil societies, respect for the rule of law, independent institutions, free expressions and a free press. legitimate political party is cannot have a militia wing and a political wing. parties have to accept the results of free and fair elections and this is not just in the middle east. in liberia the leading opposition party is making unsubstantiated charges of fraud and refusing to accept first round of voting in which it came in second, and this is already having harmful consequences on the ground. we urge all of the parties to accept the will of the people in

the next round of voting tomorrow. that is what dhaka see anywhere requires coming and that brings me to my second question. why does america pro-democracy one way in some countries and another way and others? the answer starts at a very practical point. situations vary dramatically from country to country. it would be foolish to take a one-size-fits-all approach and beryl forward regardless of circumstances on the ground. sometimes as in libya we can bring the dozens of countries together to protect civilians and help people liberate their country without a single american life lost. in other cases, to achieve the same goal we would have to act alone and a greater cost with far greater risks and perhaps even with troops on the ground. but that is just part of the answer. our choices also reflect other interests in the region with a

real impact on americans' lives including our fight against al qaeda, defensive allies and a secure supply of energy. over time a more space middle east and north africa can provide a more sustainable basis for addressing all three of those challenges. but there will be times when not all of your interests aligned. we work to align them but that is just reality. as a country with many complex interests, we will always have to walk and chew gum at the same time. that is our challenge in a country like bahrain which has been america's flow close friend and partner for decades and yes, president obama and all i have been frank in public and in private mass arrests and approve force are at odds with the universal rights of bob efrain's citizens and will not make

legitimate calls for reform go away. meaningful reform and equal treatment for all of bahrainis interests while the and less unrest benefits iran and extremists. the government has recognized the need for dialogue, reconciliation and concrete reforms and the of committed to provide access to human rights groups, to allow peaceful protest and to ensure those who crossed lines in responding to civil unrest or held accountable. he calls for an independent commission of inquiry, which will issue its report soon, and we do intend to hold the bahrain government to these commitments and encourage the opposition to respond constructively to secure a lasting reform. we also have the candid conversations with others in the neighborhood like saudi arabia,

a country that is key to stability and peace about our view that space advancement is not just possible, but a necessary part of preparing for the future. fundamentally, there is a right side of history, and we want to be honest. and without exception, we want our partners in the region to reform so that they are honest as well. we don't expect countries to do this overnight. but without reform, we are convinced the challenges would only grow so it is in their interest to begin now these questions about our interests and consistencies merge in a difficult question how will america respond if and when democracy brings to power people and parties we disagree with? we hear these questions most often when it comes to the islamist religious parties.

now of course i would hasten to add that not all islamists are alike. turkey and iran are governed by parties with religious roots of the models and behavior or radically different. there are plenty of political parties with religious affiliation, hindu, christian, jewish, muslim that respect the rules of space politics. the suggestion that faithful muslims cannot strive in a democracy is insulting, dangerous and wrong. the debate in this country every day. now reasonable people can disagree on a lot but there are people that all parties religious and secular must get right not just for us to trust them but most importantly for the people of the region and of the countries themselves to trust them to protect their

rights. party is committed to democracy must reject violence. they must abide by will fall and respect the freedom of speech coreligionists a sedation and assembly. they must respect the rights of women and minorities. they must let go of power is defeated at the polls and in a region with a deep division within and between religion they cannot be the spark that starts. in other words, with the party's call themselves is less important to us than what they actually do. we applaud the work to arrive at a model code of conduct for political parties across the political spectrum and around the globe. we need to reinforce these norms and hold people accountable for following them.

indonesia and islamist party has just one part novelty of the votes in an open competitive election. its leaders promised to embrace freedom of religion and full rights for women to write a constitution and govern, they would have to persuade secular parties to work with them and as they do, america will work with them, too because we share the desire to see the tunisian democracy emerged that delivers for its citizens and because america respects the right of the people to choose their own leaders and so we move forward with clear convictions parties and candidates must respect the rules of democracy to take part in elections and hold elected office, and no one has the right to use the trappings of democracy to denying the rights and security of others. people throughout the region worry about this prospect and so

do we. nobody wants another iran. nobody wants to see political parties with military wings and militant foreign policies gained influence. when members of any group seek to oprah's their fellow citizens or undermine space principles, we will stand on the side of the people that pushback to defend their democracy and that brings me to my next question, what is america's role in the arab spurring? these revolutions are not ours, they are not bios come for us or against us but we do have a role. we have the resources, keep the these and expertise to support those who seek peaceful become meaningful space reform and with so much that can go wrong and so much that can go right, support for the emerging area democracy

is an investment we cannot afford not to make. now of course we have to be smart how we go about it, for a sample, tens of millions of young people enter the job market each year we've recognized that the political awakening must also deliver an economic weakening and we are working to help the societies create jobs to ensure that it does. we are promoting trade and investment, regional integration and economic reforms. we are helping societies fight corruption and replaced the old politics of patronage with a new focus on economic empowerment in opportunity and we are working with congress on debt relief for egypt and loan guarantees for to nisha so that these countries can invest in their own futures. we also have real expertise to offer as a democracy including

the wisdom that ndi has claimed from decades of working around the globe to support space transitions. democracies after all are born knowing how to run themselves. in a country like libya, gadhaffi spent years holding out every part of his government not connected to leal or keeping him in power. under the libyan code, simply joining an ngo could be punishable by death. when i traveled last month to libya, the students i met at tripoli university had all sorts of practical and even technical questions. how do you form a political party? how do you ensure women's participation in government institutions? what recommendations do you have for citizens in a democracy? these are questions nbra and its organizations many of whom are represented here tonight are

uniquely qualified to help new democracies answer. ndi has earned a lot of praise for this work but also a lot of pushback. it stretches far beyond the arab world. in part, this resistance comes from the misconception about what our support for democracy does and does not include. the united states does not fund political candidates or political parties. we do offer training to parties and candidates committed to democracy. we do not try to shift outcome or impose an american model. we do support the election commission's as well as non-governmental the election on terse to ensure free and fair balloting. we help watchdog groups learned their trade and health groups find the tools to exercise their rights to free expression and

assembly on the line and off and of course we support civil society, the lifeblood of space politics. but in part the pushback comes from autocrats around the world wondering if the next square will be their capitol square and some are cracking down when they should be opening up. groups like ndi are no strangers to pressure and a deliberate local groups to partner with. and i want you to know that as the pressure on you increases, our support will not waver, and i want to offer a special word of thanks for ndi's effort to empower women across the middle east and beyond. just last week the world economic forum released a report on the remarkable benefits the country's see when the bridge the social, economic and political gap separating women from men, and helping them get their is a priority for this department and for me

personally. graduates of nti training programs designed to help women run for office now sit in local councils and parliaments from morocco to kuwait. but we'll know a great deal of work lies ahead to help all people, women and men find justice and opportunity as full participants in the new democratic societies. along with our economic and technical help, america will also use our presence, influence and global leadership to support change. and later this week i am issuing new policy guidance to our embassies across the region to structure our efforts. indonesia, egypt and libya we are helping to safeguard the principles of democracy. that means supporting the forces of reconciliation rather than retribution. it means defending expression when the blockers are arrested or for criticizing public officials. it means standing up for

tolerance when states run television tensions and it means when the on elected authorities say they want to be all of the business of governing we will look to them to leave a clear road map and urge them to abide by it. where countries are making their gradual reforms we have the frank conversations and urged them to move faster. it's good to hold multi-party elections and allow women to take part. it's better when they are meaningful and parliaments have the power to improve people's lives. change needs to be tangible and real. when autocrats tell us the transition to democracy will take time, we answer then let's get started, and those leaders trying to hold back the future of the point of a gun should know their days are numbered. as syrians gather to celebrate a sacred holiday, the government continues to shoot people in the

streets in the weeks he said he accepted the terms of the arab peace plan to protect syrian civilians he had systematically violated each of its basic requirements. if not release all detainees he has not allowed free and unfettered access to journalists or arab league monitors. he has not withdrawn all armed forces from populated areas, and he has certainly not stopped all acts of violence. in fact, the regime has increased violence against civilians in places like the city. now a sod may be able to really change but he cannot deny his people's legitimate demand indefinitely. until america and the international community will continue to increase pressure on him and his brutal regime and for all of iran's bolster there is no country in the middle east where the gulf between the

rulers and the rule is greater. when iran claims to support democracy abroad then kills peaceful protesters in the streets of tehran it's hypocrisy is breathtaking and plain to the people of the region and there's one last question i asked in one form or another all the time, what about the rights and aspirations of the palestinians? the israelis and palestinians are not immune to the profound changes sweeping the region. and make no mistake, president obama and i believe that the palestinian people, just like their arab neighbors, just like the israelis, just like us to deserve dignity, liberty and the right to decide their own future. the desert space palestinian state of their own, alongside a secure jewish democracy next

door. and we know from decades in the diplomatic trenches that the only way to get there is through a negotiated peace a piece we work every day to achieve despite all of the setbacks. of course we understand that israel faces risks in a changing region, just as it did before the arab spring began. and will remain in american priority to ensure all parties honor the peace treaty that they have signed and commitments they have made, and we will always help israel defend itself. we will address stress to regional peace whether they come from dictatorship for democracy but it will simply put peacemaking on hold until the current upheaval this done. the truth is the stalemate in the arab-israeli conflict is one

more status quo in the middle east that cannot be sustained. this brings me to my last and perhaps most important point of all for all the hard questions i have asked and tried to answer on behalf of the united states, the most consequential of all are those, the people and the leaders of the region will have to answer for themselves, because ultimately it is up to them. it is up to them to resist the call of demagogues, to build coalitions to keep safe in the system, even when they lose at the polls and to protect the principles and institutions that ultimately will protect them. every democracy has to guard against those who would hijack its freedom or its noble in the. our founders and every generation since have fought to prevent that from happening

here. the founding fathers and mothers of the arab coalition must do the same. the wonders a greater responsibility for what happens next. when deputy secretary bill burns addressed the national endowment for democracy over the summer, he recounted the story of an egyptian teenager who told her father a few years back she wanted to spend her life bringing democracy to egypt. good, her father said, because then you will always have a job. we should never fall prey to the belief that human beings anywhere are not ready for freedom. in the 1970's, people said latin america and east asia were not ready. well, the 1980's began proving them wrong. in the 1980's it was african soil where democracy sudden to

grow and the 1990's started proving them wrong and until this year some people said arabs don't really want democracy. starting in 2011 that is being proved wrong. and it proved that the egyptian father right because we've all still have a job to do sweet to keep asking the tough questions and be honest with ourselves and each other about the answers we offer and we cannot weaver in our commitment to help the people of the middle east and north africa realize their own god-given potential and the dream they risk so much to make real. and on this journey that they have begun, the united states will be their partner. and of the many tools at our disposal the national endowment

and ndi and all of the family of organizations that were created three decades ago to help people make this journey successfully will be right there. i heard madeleine say when she introduced me that i defend ndi. well, i do and i also defend i our audience those organizations that we have created that the american taxpayers paid for who try to do what needs to be done to translate rhetoric and the call for democracy in to the reality, step by step, and we have to be reminded from time to time that it truly is ordered least it can seem to be a foreign language. like some of you i've met with

the young people who started these revolutions, and they are still passionate, but perhaps not clear about what it takes to translate that passion into reality within a political system. so there are going to be a lot of bumps along the road but far better that we travel this path, that we do what we can to make sure that our ideals and values, our belief and experience with democracy are shared widely and well. it is an exciting time. it is an uncertain time, but it is a good time for the united states of america to be standing for freedom and democracy. and i thank you all for making the journey possible. thank you very much. [applause]

[applause]

up next a house hearing on government spending and the obama administration green energy jobs program. we will hear from government officials of the department of energy and labor. the house oversight subcommittee hearing is chaired by ohio congressman jim jordan. >> the subcommittee will come to order. we want to welcome our guests and a panel today. mr. kats is on his way to be he will be here in 15 minutes so we will start with opening statements and then get right to

our testimony. today's hearing continues the examination of this administration's efforts to use taxpayer dollars to fund a massive drain the energy experiment. in 2000 by a stimulus director around $90 billion towards green initiatives including loan guarantees for the firms, money to the rhizomes, training grants and many other products. the president told the american people that green jobs would be a major force not just for environmental conservation but economic recovery. the president said that we will harness the sun and the wind and the soil for our cars and to run factories and he promised the country would create millions of green jobs to help us compete in the global economy. however refer to and have years to this experiment the available evidence demonstrates these efforts have wasted taxpayers' dollars and possibly cause economic harm. even though the "washington post" editorial board recently noted that green jobs offer a dubious rationale for federal

support of clean energy technology to the extent that government creates jobs by subsidizing for the company's it does so by shipping resources that might have created jobs elsewhere. this committee welcomes and increases new businesses and technologies with the aim of increasing environmental conservation but is important that we be brought about by market forces, not political winds. today we have a panel of witnesses who can speak to how the administration's efforts have panned out and where we should go from here. the inspector general's from what purpose of labor and energy have done a thorough work easily winning the challenges we face as the economy has undergone these initiatives. in a release in september that a part of labor inspector general found that a 500 million-dollar program many people with so-called green skills have so far produced only 1336 jobs that have lasted over six months with 163 million already spent. this amounts to $121,856 per

successful green trainee. weigel these numbers are abysmal full truth of the matter is even worse. many of these people went through this to obtain green skills are likely worse off because of it instead of spending time looking for sustainable board or acquiring marketable skills they acquire skills that are not valued in the marketplace today. this is yet again another well-intentioned government program that appears to harm many people live was designed to help. in the inauguration speech the president stated with government initiatives fail, quote, programs will end and those of us to manage the public dollars will be held to account to spend wisely, to perform bad habits. the available evidence seems to indicate perkins put forth by this administration aimed at promoting green energy and green jobs that failed and frankly should end. with the unemployment rate still remind% and nearly 15 trillion accumulated in debt the american people deserve more to see their government going further into the red with programs that simply are not doing the job.

with that i would yield to my good friend from cleveland for his opening statement. >> thank you very much, mr. chairman. i think it's right to critically analyze the performance of the specific programs and that's the purpose of this committee and i appreciate your role in doing that. the attention that has been focused on the solyndra this case in point. these are legitimate things that have to be asked but the concern that i have is the run-up to this meeting of the generally the critical analysis of the ed demonstration's inability to be able to bring forward a massive green works program. should not in any way detour us

from moving forward with an effort on the part of the federal government to create a transition in our economy towards a more sustainability in our energy and manufacturing for a sample of long been an advocate of paul sing at the nasa budget for the purposes of looking at areas of developing green microtechnology where you could -- now it is theoretical, create millions of new jobs involved in the design and the concept design engineering, manufacturing, installation and maintenance of the wind and mica technologies boe would reduce or carbon footprint lower our energy cost and it will overall

economic stimulus through jobs of low energy costs. america cannot rely on the unsustainable form of energy, one that is damaging to our environment for a long-term energy needs we cannot rely on oil for our long-term energy needs if we add the cost of a gallon of oil we would have to factor in the use of our military which has been increasingly used to be able to secure access to oil around the world, and we can't rely on nuclear, a very shaky form of energy with its disposition of the securing of nuclear waste.

so we have to challenge the administration to come forward with new possibilities, and today hopefully we hear from the department of defense about some of the directions they are going that might lead to some possibilities for the larger economy. america inevitably is going to have to go in a direction of our economy must go in that direction. there is money to be made in those directions. the fact we have seen a failure at the beginning which is important enough because if we need to know what not to do should not cause us to conclude that there is little or no hope of being able to not just restore public confidence but be able to restore our economy because in the end of that is what we are all concerned about, getting americans back to work and finding ways to -- where america can seize the opportunity to catch the way

that is inevitably building of corrine technologies and particularly with respect to energies so i want to again thank the chair for holding this hearing and i look forward to hearing the witnesses testimony. >> i think he makes a good point. i would point out we are all four members on this side of the ogle for the new technology that can help the energy needs. we just think the market is a better and more efficient way of getting the kind of program we are going to hear about today. >> one of the things i remember a few years ago is that the investors edify still was being given for people interested in the energy facts which i have been six years ago before being told not to invest in clean energy or wind and solar energy because they were seen as quote on quote fads but to put the dollar into oil, coal and

nuclear, the market sometimes will go for the short term gain using whatever resources to max them out immediately for the perfect without any necessary concern about the society at large and about the future potential, so i understand you and i have had an agreement the government not interfering with respect to the bailout. we both food the same way on that play also say that market forces are not always according to adam smith's invisible hand. >> the gentleman from tennessee, or excuse me we have a vice chairman walking, the gentlelady wish to make an opening statement? >> recognized for five minutes.

>> thank you, mr. chairman spigot the time when people across the united states are struggling to rebuild their economy and create jobs i would like to thank our term for calling this hearing to evaluate the substance of the regulation. sorry about that. ron hearing. thank you mr. chairman for calling this hearing and i yield back my time. >> the command from maryland of the full committee is recognized. >> thank you mr. chairman. i want to associate myself with the comments of mr. kucinich and say that i think we have to be very careful and not throw the baby out with the bath water and we have a government to play a

very important role. recovery provided some point about a variety of energy projects that the funding has been developed for the crucial new technologies training workers for the 21st century jobs to improve the national security the problems of energy defense and labor and general services administration have been instrumental in this effort, however only the inspectors general from the department of labor and energy are here today. the type of today's hearing is where have all the tax payers money gone on of the largest recipients of federal dollars for the green energy program is the department of defense. in the 2010 memorandum of understanding with the department of energy department said and i quote energy efficiency conserve rounds de

force multiplier increasing the range and endurance of the forces in the field while reducing the number of the combat forces averted to protect energy supplies by reducing long-term energy costs. in addition we are developing the green jobs here at home. the institution estimates that in my home state for example the green jobs and place some 43,000 to wondered seven residents an average of 44 bills and $790 per year which is higher than the median salary in my state. at a time when the middle class state is shrinking, these figures are the news. finally, we are going to remain competitive in the global economy we must be willing to make investments going forward. according to the report by the

charitable trust in march, china and the leading green energy investments and other countries like italy, mexico and argentina are rapidly increasing their investment. the united states and the river indus falling behind. if we are not willing to make long-term investments, we risk limiting our competitiveness in the years to come, something we simply cannot afford to do. so i want to thank the witnesses for being here today. and i look forward to the testimony, and i want to -- as we look at this particular problem, i want to know how it is that, you know, we are looking at one situation or are we doing a blanket indictment of all of our efforts in this regard because if we are going to paint with one brush i think

the would be a major mistake and with that, i yield back. >> i thank the gentleman. anyone else wish to make an opening statement? with that we will introduce the panel. we've gregory friedman at the department of energy and mr. ali and louis the general with the u.s. department of labor and we also have dr. david montgomery of the economic research association the director of the cbo as well as the deputy at the u.s. department of energy has indicated earlier mr. kats is on his way and we also have the president of miller long and we appreciate the panel being here. we are going to swear you in when mr. kats gets here we will do that please just stand up, raise your right hand to some lonely us where the train delete the testimony or about to give us the truth, the whole truth?

let the record reflect that everyone answered in the affirmative. you know the rule, five minutes. stick to that as best you can and we will start on the road mr. friedman you are recognized for your five minutes. >> thank you mr. chairman. .. >> with the passing of the recovery act, the inspector

general launched efforts to assist the department. we issued 68 reports mentioning initiatives and activities initiated over 100 recovery act related criminal investigation, enand conducted 300 fraud awareness briefings around the country for nearly 16,000 federal contractors, state, local, and other officials. based in the work, we found the efforts by the department to use the found stimulate the economy was more challenging than originally envisioned. we identified a fairly consistent pattern of delays in the pace of which funds were expended by granted and other financial assistance recipients. as of october 22, 20 # 11, -- 2011, according to the records, recipient organizations spent only 55% of available recovery act funds. in terms of the department's ability to reach the goal, we found work was often an example

of questionable quality. in one level report, nine of the 17 homes visited failed inspections because of the substandard workmanship. the success of the program was affected by other management issues as well. for example, one major subrecipient gave preferred treatment to its own employees and relatives for services over other eligible residents who were elderly or had special needs. the loan guarantee program could not always readily demonstrate through documentation how it resolved risks prior to granting loan guarantee, and one of the department's environmental management sites recovering on recovery acts adopted an approach to react to processing that could have cost $25 million more than necessary. they are investigating recovery act schemes incoming false information, mischarges, and misrepresenting test results. today's investigations, the result is over $2.3 million in

monetary recoveries as well as the number of criminal prosecutions. this includes a series of cases involving fictitious claims for travel per diem resulting in the recovery of $1 million alone in recovery act fund. it established extremely challenging goals for the department. notwithstanding the department's fierce effort to meet the goals, there's overarching acts of implementation. this included first the demanding nature of the acts placing strain on the department's then existing infrastructure. second, dealing with a diverse and complex set of departmental stake holders, complicated recovery acts, start up add mrks, and -- administration, and third, although shovel ready projects were symbol call to the recovery act, in most cases, the execution was more challenging than intis pated. fourth, infrastructure at the state and local levels was

overwhelmed. those charged with implementing the provisions were furloughed. fifth, the pace of actual expendtures was slowed because of the time needed to understand and to address specific requirements of the recovery act, and finally, recipients of recovery act funding expressed frustration of what they described as overly complex burdensome requirements. massive funding, high expectations, and inadequate infrastructure resulted in less than optimal performance. we'll further review expenditures in a number of high risk areas, and our investigative efforts continue. additionally, we are evaluating how the department plans to deal with the loss of over 4,000 environmental management jobs by the i end of this year, a significant downsizing of the work force that was dedicated to recovery act funded work. further, we are refining our

observations on the recovery act and drafting are -- a report to highlight other lessons learned from the experience. mr. chairman, this ends my statements, and i'm happy to answer any questions you may have. >> i thank the gentleman, and mr. louis, you are now recognized. >> thank you for inviting me to testify today on the recent report regarding the green jobs program. as part of the oversight responsibilities and in response to a congressional request, we conducted this audit to determine how the employment and training administration defined green jobs, how they used the $500 million in funds provided by the recovery act, and what they reported achieving with respect to training and placement of workers including employment retention. the findings are based on the latest data reported as of june 30th, 2011. we found that eta defined green

jobs as jobs associated with products and services that use renewable energy sources, reduce pollution and conserve resources. they derived this from the policy act and data base of occupational requirements and worker attributes. thingthe account mandated they prepare workers for career in energy efficiency and renewable energy described in the work force investment act and determined the green jobs used by eta to award grants was not in compliance with the recovery act. the second objective of the audit was to determine how the funds had been used and found that of the $500 million provided, eta awarded the funding or $435 million for training programs to help workers and overcome barriers to employment, help participants obtain credentials, and place them into green job.

at though eta obligated over the $490 in grants as of june 30th, 2011, grantees had expenditures of 33% of the amount awarded while 73% of the training and non-training grant periods had already elapsed. our audit evaluated what grantees reported achieving with respect to training and placement of workers including employment retention. we found that with 61% of training grant periods elapsed, trainees had limited performance targets for serving and placing work herbs. they reported that 53,000 individuals were served, 42% of the targeted 125,000. 47,000 participants rolled in training, about 40% of the targeted 115,000. 26,000 participants completed training, 27% of the tart of 97,000, and 8,000 participants were placed into employment, 10%

of the program's goal of 80,000, and finally, 1300 participants retains employment for more than six months, about 2% of the planned 70,000. it is important to everyone size these training programs are still underway, and we expect to see changes in the report by the times programs are completed. in response to our audit, eta officials stated they expected performance to significantly increase over time due to an initial lag during the start up phase of the grants. however, they cannot demonstrate they're on target to meet planned outcomes nor is there a plan to ensure they could. in addition according to interviewed conducted with eta regional officials early this year, grantees expressed concerns about the overall poor economic conditions and the green jobs had not materialized, and therefore, job placements were much less than expected. as a result, we're concerned whether or not they'll effectively use the funds and deliver targeted employment outcomes by the end of the

grants. we recommend evaluating the programs and give them the current amount they spend in demand of green related skills. this helps the department identify and correct any performance issues before the grants expire, and assess whether the grant funds remain unspent and could therefore be recooped and returned to the u.s. treasury to be available for other purposes. in response to our recommendations, eta stated it's put in place appropriate measures to ensure ultimate grant success for those grantees at risk for not delivering all of their outcomes. eta further stated they obligated all funds and expects all funds expended by 2013 as required by the office of management and budget. we believe the department has an opportunity to evaluate the performance of the green jobs program while it is underway in order to correct any performance issues and maximize outcomes.

mr. chairman, thank you for the opportunity to testify on our work, and i'll be pleased to answer any questions you or members of the subcommittee may have. >> thank you. mr. montgomery, you are now recognized. >> thank you, mr. chairman. i think i can summarize my testimony in five points. first is that the project failures and wasted money that we're discussing today are not isolated examples of improper execution of an otherwise worthwhile and potentially successful program. the entire con cement of using stimulus funds to create a green economy through energy spending is misguided. second point i would make to develop that is the green energy has none of the characteristics needed to make effective use of stimulus funding. 234 counter a recession, the objective is to expend funds as quickly as possible, and

mr. friedman pointed out that was not happening, and also phase out that spending as the economy improves. this kind of stimulus objective is inconsistent with the didn't of energy's mission. applying this public works approach to energy repeats the cycle of boom and bust that contributed to the failure of our past efforts to deploy and to develop and deploy new energy technology. my third point would be that the recovery act funds have been applied at the wrong end of the research development and employment spectrum with the least government involvement with the highly -- even before the stimulus funds compared to other research organizations in terms of how much money goes into basic research and how much goes into funding for large scale dmon straitionz process. the stimulus made that far, far worse.

the reason for the research and development is the ability to appropriate the full value of research. this is a serious problem across the board in basic and some applied research, but it's only a problem in the deployment and commercialization stage if there's no market for their product. it's possible for research organizations to do a good job allocating funds, but government proved over and over again cannot consistently pick winners in the application of known technology. finally, there's a reason why so much money goes into the deployment and defined green demonstration and why it fails. they have significance attracting lobbying, represent seeking, and pork barrel politics, and therefore, they are chosen independent of the economic or technical merit. my fourth point would be the kind of upfront funding provided by the recovery act create hot

house plans, and i think this has a lot to do with solyndra and other firms today. some of the hot house plans will survive, but it's the exception. again, there's a reason for the failures. up front funding is not a universal substitute for the lack of the market. green is not enough. green technology that produces energy that costs more than its current substitutes is not going to be purchased, and consumers are not willing to pay enough to cover the cost of ongoing business for many of the projects that are being funded under the recovery act. the recovery act, therefore, turned into a back door in ineffective substitute for what congress decided it does not want, a price on carbon. if there's no price on carbon, there's not much of a market for green technology, and these projects fail. in other words, if it's not a good idea to put o price on

carbon, it's even worse idea to loan money and fund projects that need it in order to survive. so that, i think, would be my final point that in my opinion it is very likely that most of the recovery projects will fail in one of three senses. some fail to survive even with the subsidy provided in up front funding and loans if the value of their product in the market is not enough to cover the ongoing cost of producing it, and i think, to be fair, many of the projects were originally conceived with the hope that there would be a price on carbon as was pointed out. second, the recovery act funding fails to jump start technologies or industries. every new venture has to have up front subsidy in order to overcome the barrier that exists because we don't put a price on carbon and don't have a market demand for green technology; then things will end with the recovery act projects.

finally, it seems that, to me, that these projects fail through provider return to the taxpayer ever if the recovery act fails to -- if the recovery act is supporting projects that can't pass the cost benefit tests on their own. thank you, mr. chairman. >> thank you. >> we need to swear you in, you walked in just after we swore everybody else in. do you swear to affirm the testimony you're about to give will be the truth, the whole truth? answered in the atirmtive. you're recognized for five minutes. >> thank you. my background is in finance. i have an mba from stanford, director of energy efficiency and renewable energy in the department of energy for ten years, been involved in private equity financing for clean energy, involved in funding billions of dollars of clean energy projects, both at a

project development and venture capital perspective. the way i look at this is from a finance perspective, and i can say that our international competitors, japan, germany, and china, are not sitting still. they are heavily subsidizing this race to clean energy future which is a transition that pretty much all companies, certainly the u.s. military and the large majority of governments now recognize we're involved in, so the support for ar funding and clean energy, although it's had a steep ramp up with teething problems, on balance was well timed and important in supporting the u.s. ability to compete in this critical area. a brookings study recently found that between 2003 and 2010 in this clean energy area, there's been an 8.3% job growth, and it's been one of the most important areas of job growth domestically, and it's an area that our competitors are investing in, so in terms of

economic opportunity and job growth, it's been an important driver for the economy. the u.s. military is committed to clean energy because in its view and based on its actual experience, clean energy allows them to deliver their military purpose and security more cost effectively than reliance on fossil fuels, so the security dimension of clean energy has become much more important. the u.s. military's been very clear on this particular issue. there was a several independent non-partisan reviews about the impact of arra funding on clean energy. the counsel of economic advisers in november of 2010 found that as of the third quarter of 2010 between 2.7 and 3.7 million new jobs had been created from this funding, and that it had a positive impact on gdp of 2.7%,

and may 2011, u.s. congressional budget office found that in first quarter 2011, the impact of this funding had been an increase between 1.1 and 3.1% gdp growth, and increase in full-time employment of 1.6 million and 4.6 million people. these success stories are built on, as discussed, this steep ramp up in funding was hard to deliver because the personnel were not there. as that funding gets deployed in the field, we expect to see increase in economic productivity and an increase in employment. the last point i would make is that the omb in its 1705 loan guarantee program assumed and budgeted for a 12.85 default rate in almost 14% default rate. more recently beacon, which went

bankrupt represented about 1.6% of that total funding, and we expect to receive back a portion that is a recovered portion of that funding so the total default rate to date based on these companies is about 1%. that is less than one-tenth of the projected default rate expected for and planned for by omb. about 90% of ar funding goes to large clean energy generation projects. the large u.s. companies like general and electric who are competing in international markets found this funding critical to their ability to compete and expand on jobs. funding for johnson controls, for example, in building a 3,000-person clean battery production facility in michigan will create 3,000 direct jobs and many more indirect jobs at a cost of under $100,000 per job, so it's not a perfect story, but

given the rate of ramp up expected from the funding, the success story, i think, has been pretty clear. at least a million to 3 million jobs created. a lot of strengthening of u.s. competitiveness on this critical international issue, and for investors in clean technology, it's really a commitment to the future. it's really a vote for those who are optimistic about america's capacity to compete successfully in this critical market. thank you. >> thank you, mr. kats. >> thank you very much, ranking jordan and other members of the subcommittee. i'm president of the recently founded dc inc, a washington, d.c. based sub contractor. my previous employer was founded in dc in 1947. it's one of the nations oldest and largest contractors. the company regularly employed 1500 people as farm building,

carpetters, rodman, engineers, everything under the sun for our particular trade. we provided employment for over 75,000 dc area residents in the last 64 years. during my years in construction, i personally have overseen over 50 high-rise concrete structures and proud to provide employment for over several thousand construction workers here in dc and the carolinas and active in a number of organizations here locally including the dc construction trades academy in the senior high school providing the only vocational training available for construction workers in the district of columbia. i first heard the term "green collar jobs" about four years ago. like many, i didn't know what the term meant, and since so much of the focus was in my industry, i thought it was wise to learn more about it. i learned the term was more political than actual.

it was clear that it was a new label on jobs that existed for years. the public relations effort are trying to claim this is something now here, and unfortunately, that's not the case. considering this, consider the following example. it's the clearest i've seen. this is by a gentleman from the texas work force development commission in a report labeled "green collar workers and other mythical creatures." in it, the testimony in front of you, there's a picture of two different toilets. one is a low flow, and one is the old fashioned one. the question begs from this is what are the skill differences for installing these two things. what is the possible difference between installing this one and that one? the question -- the problem is there isn't one; however, the claim is that somehow they are trying to say that there's a new job created because you can install the low-flow toilet instead of the old one.

for non-construction example, i hope we can agree the skills necessary to drive an lek try car are the same skills needed to drive a large suv. you can operate either vehicle like a plumber can install either toilet. the problem is in the product, not the on the on the operator. a great deal of tax dollars are going into convince the taxpayers that it's a now job. we wonder where people come up with that idea. there's something important about the new label i did not understand at first. if the new label is more than just a political talking point, but it's actually a formal, new capitol labor, a new problem is created. a new occupation is designated for the construction industry, a new set of standards is developed. in addition to the apt kuwaited determination of a wage, a new training standard is established even though, in this case the

only difference is in no man clayture and not skill set. on october 4, 2007, i attended a meeting in the dc employment services to discuss the roll out of the green collar jobs initiatives. the meeting was handled by the staff from the center of american progress. the handout we received is attached to the document. i kept it because it laid out the goals of their program very clearly. even included for the first time i had ever received one from a dc-based meeting, a bar chart schedule detailing new mandatory apprenticeships required to work on any project covered by the then brand new, at that time, dc green building act. this proposal was a great concern to me because it took my company 26 years to get our apprenticeship program passed by the dc apprenticeship counsel. the only reason we were accepted was because the counsel at that

point had its first and only non-union member. union control of boards is a common roadblock for the 87% of construction workers. when they get a new training standards, the participating employers must apply to have their program accepted. having spent three decades getting our current program accepted, we were not locking forward to going through the whole process again. in the district, there's local hiring ordnance known as first source demanding apprenticeship participation. it applies to the projects that receive a certain level of assistance from the district government. what's shown in the handout is the advocates were taking the first source program to a new level. the inset here from the project schedule is taken from that handout. they were planning to make new green collar mandates employee to every product covered by the green building act. unfortunately, the dc green

building act covers every brick and stick, public or private inside the city limits of washington, d.c., and we were basically looking at being barred from working inside the district. thank you. >> thank you. we appreciate everyone's testimony. mr. friedman and mr. louis, based on your testimony, it looks like both this weatherization program and the green jobs training program are -- i guess anyone's conclusion, just a complete failure, and i want to start with you, mr. louis, and walk through this based on your testimony -- i think i got the numbers right -- 490 million is out the door, but only 163 million has been spent? is that accurate? >> correct, as of june 30th. >> okay, and how many -- the 163 million spent, how many people have been trained? >> completed training -- 26,000

people. >> and how many now have a job -- how many have been successful, trained and are actually working in this area and have a job for any length of time, say six months? >> of the 26,000, about 8,000 people were placed into a job. >> do you know the maps on that? we spent 163 million, trained 26,000, and only 8,000 received a job. do you know how much we spend per person? >> i didn't -- i had not calculated that. >> several thousand dollars probably; right? maybe close to -- may be closing -- not $100,000, but lots of money spent per job. did you see any way -- in fact, what were the targets that the department of energy had laid out? >> department of labor. >> department of labor, i'm sorry. >> the total grants added up to a plan to train about 97,000

people. we're at 26,000 trained at this point. >> okay. >> i do believe the end of june there were around 20,000 people that were in the program. >> right. and do we know anything about the folks in this program? have they been laid off, unemployment, what do we know about the people in the program? do we know? >> some of the people in the program were unemployed, although there were some of the grants also designed to target incumbent workers, those who were employed, but wanted to upgrade their skills to maintain or job. >> there's two perspectives. several thousand people trained, some receiving some benefit from the taxpayer, and now they are helping getting trained, and there's additional dollars spent, and most of them are not getting a job, so we got the taxpayer, but we have the harm to the individual who went through the training and has maybe not a whole lot to show for it. >> if we trained them in

something that there's not a job for, then, yes, we're not doing them the best. >> do you think there's any way to recover 490 million out the door, only 163 million spent, is there any way to recover that? >> the numbers were as of june. this quarter, which we don't have the reports in yet, there would be more funding spent. i don't know how much. >> when you say this program's not working, this reminds me of another program, the hamp program, helping homeowners city in their homes so is there any way we can get the money back? not do more harm to people, put them in training that's not going to benefit, and get the money back for the taxpayer? >> yeah, and that's what we asked the department to do, to look at, you know, how much at this point has not been spent, and if it's not going to be -- >> is it -- is it your recommendation that we stop the program?

>> i want more informing from the department. >> how much more do you need? when you look at the numbers and how bad they are, how much more do you need to say this is not working? >> well, i don't know -- i know there's 20,000 people in the mill at the end of june and i can't say. >> i mean, how much longer do we give -- >> the placement numbers are far behind. >> yeah. ever a chance to catch up to the targets they said they'd hit? >> they could catch up their targets and have to make a significant impact. >> the weatherization program, you mentioned, i think in your testimony if it's right, nine of 17 homes you visited, homes or commercial? >> homes. >> okay. homes you visited did not pass inspection? >> that's correct. >> how were the 17? did you select them, the department of energy -- how were

they selected? >> they were not selected by the department of energy. we don't work that way, mr. chairman. >> okay, you randomly picked them in >> picked with inconjunction with the states in some cases. this is one example. there are other examples and other jurisdictions of rejection rates because of inadequate and poor quality work. >> over half the homes didn't meet the requirements. >> in that jurisdiction, that's correct. >> is this weatherization program, based on what you see out there, over half the homes not meeting the criteria outlined and meeting the standard, is this a program we should end? >> mr. chairman, that is a long -- requires an extensive answer, so give me a minute or two if you don't mind. this program has been in effect since the mid-1970s. the funding over the last several years is -- >> it doesn't matter how long it's in existence, if it's bad,

it's bad and should have ended a long time ago. maybe that's the reason, but that shouldn't prohibit us from doing the right thing. >> absolutely, and i'm not suggesting that's the case. what i am suggesting is the fact that the program has a long history, it is a mixed bag. i wouldn't say it's a total failure. there's successes. the number of successes, the department reports that over 500,000 homes have been weatherized around the nation, so there have been some successes. there's been failures. i think the -- i would suggest that we fix it, not necessarily end it. >> uh-huh. okay. not a total failure, just a failure in a lot of ways. with that, i'll yield to my friend from ohio. >> you're not recommending though that the united states government suspend all weatherization programs; is that correct? >> that's correct. >> and this recent audit was nine of 17 weatherized homes visited that were visited failed

inspections because of substandard workmanship. you're not concluding based on that that all weatherization programs don't work; is that right? >> that's correct. i'll put this? perspective. we visited 10 or 20 states around the nation, and this was reflective of one particular jurisdiction in one particular community action, the work of one particular organization. there were problems 234 a number of jurisdictions that need to be corrected if the program's going to be continued. the purpose of what we were trying to achieve is sort of a lessons learned. here's what is wrong, what needs to be corrected, if the objective is to keep this program going forward. >> who uses weatherization programs? primarily, lower income people. are we, you know, we don't want to be in the position as a subcommittee in recommending that lower income people don't get the help they need.

we want to do everything we can to lower their energy costs, so i think this subcommittee has to be very, very careful about dreying sweeping conclusions about failures that may exist in some areas, and i'll yield. >> i think the gentleman makes a good point, but we certainly don't want to whether it's a green jobs program or weatherization program, have a program -- there's false hope and doesn't give them the entitlements they are required to get if we have the program. >> we're in 100% agreement saying federal dollars are spent, we expect the workmanship to be good. it's one of the reasons i support bigger requirements. it's a workmanship issue, and so i think that we're on the threshold of another winter.

it snowed here last weekend. temperatures are dropping. there's poor people slivering in their homes. we don't want to tell them they don't have access to weatherization programs. i want to be careful about that. on the issue of workmanship though, 100% agreement with you, and with mr. friedman's help on how to tighten it up. there's an assertion made here that somehow this green energy and the potential for profit in it is some kind of a myth. you're an investor in this; right? isn't this your background? >> yes, that's correct. >> can enviesers make -- investors make money investing in green energy or not? >> yes, they can. >> do they in >> yes, they do. there's an increasing number of ipos in sales to large

corporates from firms that we've invested in. on the smart grid company that's benefited from ar funding, 100,000 homes, and this year it's 4.2 million homes and expect a 10x return on that. >> what do you mean? explain that for the uninitiated, a 10x return. >> so investments are made in hopes that we're going to make money. that doesn't always happen. part of the portfolio will not perform well, and others will. we're seeing more and more companies that are performing well over time, and as they get purchased or as they go public, the investors return money, and it exceeds the money they put in. >> the department of defense is spending a lot of money on green energy research, is it not? >> yes. >> why? >> they believe it reduces the cost for delivering support

services in the field. they believe it reduces adverse security concerns. they believe it strengthens the military. they believe that clean energy is a more cost effective way of delivering their obligation. >> and have you worked with people in the department of defense on any of these energy issues? >> yes, i have. they are very excited about it. they think it strengthens security in a lot of different ways. the cost effectiveness basis is a smart investment strategy. >> and i think it would be interesting for us to have a hearing just with the department of defense on this issue because what we're seeing is that those people who are inevitably charged to intervene on energy related issues at the geopolitics being what they are are themselves cognizant of the imperative of moving towards green energy, and if the largest part of our -- if the institution that drives one of the largest parts of the federal government is showing an

interest in green energy, i think that not only should this committee pay attention to that, but i also think that wall street ought to be paying attention to that as well. thank you, mr. kats, thank you, mr. chairman. >> i thank the gentleman. one follow-up question with mr. friedman if i could. half the homes that you looked at that did not meet the standard, do you know who did the work? was it union contract r or non-union contract? do you know? >> i don't know in those particular instances. they were introduced to the weatherization program as a result of the operation of the recovery act. >> it's likely that we were talking about union contractors doing this work? >> i don't know. i can't answer that question. >> but what you say is this is applied now; right? with the stimulus. >> i'm saying -- >> it's a requirement now. it's required? >> correct.

>> you were to look at stimulus dollars out the door. >> correct. >> your testimony was half the work done was not to standard nine out of 17. >> correct. >> is it likely to conclude who did the work? >> i can't make that conclusion because it could have been people who were non-union paid bacon wages. >> okay. >> would my friend yield? >> happy to yield. >> since we're both from ohio, i bet you a bag of buckeyes they were not union contractors. [laughter] >> thank you. the gentleman from tennessee. >> thank you, mr. chairman. i guess this brings things back into focus. i'm here today as a subcommittee of oversight and reform to take a look at stimulus oversight in this case, and the hearing, of course, is entitled "the green energy debacle: where has all the taxpayer money gone?

that's why we are here, to make sure all the good taxpayers are getting the best for their tax dollars, and i think clearly the stimulus program has not lived up to its expectations, so, mr. friedman, just to put a cap on the weatherization issue, we've been beating that horse here for awhile, i think about $5 billion of the money was set aside for weatherization projects and non-profit groups to make the homes of low income americans' homes more efficient. being from tennessee, i think the program revealed countless instances of waste, fraud, and abuse, and the general inspector found only a third were shown to meet department directed minimum energy savings to investment ratios, so your office has done investigations of stimulus fund

weatherization projects in many different states. tennessee may be one, but what's some of the most egregious examples of waste your office uncovered? >> well, first mischarging, that is charging for work never accomplished. >> uh-huh. >> these are some of the schemes that we are currently investigating and have investigated. secondly, paying premiums for products that could be purchased at lower costs. third, is charging for work that was never done in general. fourth is abusing the priority sequence of those who could our should be receiving the weatherization work, and those are the parts, and the question of quality of work issue, in some cases it was life threatening. >> is it true funds can be used to purchase brand new

refrigerators or air conditioners? >> certainly the furnaces are appropriate, but i don't know -- did you say refrigerators? >> refrigerators, air-conditioning. >> there's programs that give premiums other than weatherization for purchasing new appliances that are energy first time, but i don't believe it's under the weatherization program. >> i'm not sure that's all right, but rumor has it that's the case. how much money can we recover at this point of the 5 billion? >> i would suspect there's very little that's recoverable at this point. >> okay. changing gears just a little bit. i think there's an article maybe in the "washington post" this morning, but were the state and local governments ready to receive the massive amounts of money allocated to them from the

department of energy as a result of the stimulus? >> unfortunately, they were not, and there's an issue that was predictable, and we, in fact, did anticipate that would be a problem. >> okay. you don't think it was wise to send millions of dollars to local governments in process of laying off workers because of the recession, they couldn't handle the inflogs of money, were not ready, and that contributed to the waste? >> it's not meaning to make a joke out of a very serious subject, but it's been equated to attaching a lawn hose to a fire hydrant. the infrastructure -- both the federal, state, and local levels was not there to accept the burden. >> okay. so you think that was a great contributor to the inefficiencies and wastes the offices have seen? >> certainly. >> okay. thank you. mr. month come ri, you stated in your testimony the mission of the department of energy and the purpose of the recovery act were not consistent. could you please expand upon this point for us? >> yes, thank you. >> [inaudible]

>> i'm sorry. yes. the requirements of an effective energy technology development program are essentially stable long term funding, and it also requires a careful selection process especially if the money is put in in the research and development stages involving peer review and the formation of the program in which the research and development stages fit. none of that fits with the classic prescription for stimulus which is get the money in fast and turn it off quickically when it's no longer needed. that's exactly the opposite of what the department of energy needs, and it's the way we have killed any number of useful programs in the past. for example, the solar energy initiatives. i remember back in the 1970s and early 1980s was cut off just as it was beginning to get going somewhere, and in terms of, you know, production in bringing costs down. >> based on your decades of

experience in energy policy, does the entire concept of promoting green jobs make economic sense? >> not through programs like the recovery act. i would say that green jobs are a solution in search of a problem. it's not a way of dealing with climate change. it's not a way of dealing with the government's responsibilities for research and development. it's not a way of dealing with the other environmental issues that we face, and it is certainly not a necessity for getting the u.s. economy to grow. it's something that may or may not happen if we put policies in place for those other objectives, but it is not a program that has policies significant to itself. >> okay. i'm out of time. thank you, gentlemen. >> i thank the gentleman from tennessee. now recognizes the vice chairman followed by mr. kelly and mr. labrador. excuse me, mr. kelly is up first. >> thank you, mr. chairman. doctor, let's stay with you.

i know in the opening statements we talked about one of the problems with our dependency on oil was that there's also a military investment made. if we were to do it 2k34*esicly, -- domestically, had an aggressive energy policy where we actually used our own resources, you know, with a third of the world's coal underneath the surface, and in western pennsylvania, it's the saudi arabia of natural gas. we have oil on shore, offshore, a lot to hinder that development, and certainly i listen to john hawk early in the spring, and he said there's 2 million jobs waiting right now in the energy sector if we were to have an energy policy, a strategy that was aggressive, and i'm listening to what you say, and so the cost of military, that's true, we spend a lot of money in the military, but we don't have to do it if it's produced in our own country and not spending dollars in country's whose ultimate goal is to annihilate us, and we are

funding that process. i have a difficult time when i hear that, you know, we want jobs, we want jobs right now, but we keep games ourselves, and this investment that we've made, and only in government, by the way,. i come from the private sector, and love the idea of green jobs and going after them. when you don't have to worry about a positive return on investment, you can waste a lot of tax taxpayer money. there's an element of risk. i understand that, but when you take hard earned american tax dollars throwing it at an agenda rather than a strategy, and you see the waste, i mean, it must rangel somebody like you who watched this happen. only in this town can you squander money and not have to worry about it because there's an endless smie of it. if you don't have enough, don't worry, we'll raise taxes and throw money 59 that. i think that's really where we're at today when we ask about

this money has been wasted. there's nobody in the private sector that would continue to squander the capital that we're squandering right now on a reelection agenda and not on an energy policy that makes sense for america, and in all of your work, would it be possible without government subsidies for the green jobs to go forward? 234 my district, one of the local business owners has a marquee and says green jobs e quale red ink. i think that guy has a better feel for what's going on with our policies right now than a lot of folks inside this beltway. really, without the subsidies, we talk, oh, yeah, general motors is investing in the volt. no kidding. they have a safety net. market driven means you can drive it off the lot, not that you're throwing federal money

into it and i know this, this great idea we're going to produce 16,000 of the volts this year. well, we're selling about 500 a month. you do the math. there's 10,000 volts with no home to go to. being a dealer, i know who is driveway they end up in or whose lot they end up in. without the government subsidies, who would venture into this wound -- wonderland, wondering if it could work, if it was their own money? >> thank you, mr. chairman kelly. i think i heard three questions. the first one -- >> more frustration than questions, i got to tell you. >> thank you. no, i think there were three topics i would like to talk about. the first one is energy security. most of what the green jobs that we are hearing about now are either in the weatherization area, which we've heard talked about, classifying construction, you know, certain construction

jobs as green, or they have to deal with generating electricity because in the short term the technologies that we are deploying are largely electricity related technologies. they are sported by the state -- supported by technology standards and requirements of the various accounts, and california's requirements for renewable energy, and 245*s making a market -- that's making a market. it's created by government, but by regulation. the opportunity in the near term for actually changing our imports on the green technology side because biofuels will be a long time to develop, require serious breakthroughs in order to accomplish something. electric vehicles you described accurately that the market just does not exist for electric vehicles with the current price

of electricity and the current price of those vehicles except for people to whom their a very expensive toy or people who will be given them for free, so what are we going to do about energy security in green jobs program is not affecting energy security because if you define energy security as either reducing the amount of the world's oil supply produced by our enemyings or reducing u.s. oil imports, there, production is probably the most rapid way we can do something about it. the transportation sector is going to be hard to get off oil, and electricity does not consume oil, so putting money into electric technologies doesn't affect our oil barrel at all. as far as government subsidies go, yes, i think that if -- once congress makes the decision that there's not going to be a price of carbon in the market, that there was not a cap-and-trade

program or a carbon tax, that means that any technology that was depending on that, any technology that's going to produce renewable energy at a cost that's 5% higher than -- 25% higher than burning coal is not going to have a market beyond what's created by the portfolio standards that get to a third important issue, and maybe this provokes or we can debate among the panelists, but it's that mr. kats mentioned investors can make money on clean energy. well, certainly they can if they are selling into, you know, wind turbines into a market where the renewable portfolio standard says ewe utilities must buy wind. well, they make money selling wind. it's another trade issue about where the wind turbines are purchased, but my question is if a venture that was funded largely by private equity and made it ten times return for its private equity investors when it

was sold to a big company, why did it need recovery act funding it? it seems to me we're in a situation where if you can make a profit on doing something through private equity, you don't need the recovery act funding, and if there's not a product, the recovery act funding will not be enough to create a sustained industry. >> thank you, doctor. >> thank you, mr. chairman. thank you, panelists for being here this morning. we came to congress in the 2010 elections because of the economy, because of jobs, because of the state of what was going on in our country, and this notion that the government can spend money to create jobs, and the stimulus, which was touted of, never getting the unemployment above 8%, but now there's unemployment, and it's been there for 24-plus months at

9% or hovering around 9%, so the economics didn't work. now we're pushed another stimulus. well, we need this additional stimulus because the first stimulus was not enough, and now we're going to have a second stimulus and spend money, and when i'm out in the district, and i hear from some of my supporters of this notion, they say, well, it creates jobs, and we want to create jobs. we all want to create jobs, get the economy back on track, but the government can't do that. that's private sector's job. private sector can do it, so we look at this stimulus and my question is for mr. friedman. all of these jobs that were created, these green jobs, what happens when the money is spent? what happens to those jobs? >> well, the department's $35 billion plus the loan guarantee

authority that came with the recovery act, there's a lot of different ways in which it was spent. let me give you one example. as i reported in my testimony, the department used a substantial amount of money to advance its environmental remediation program, remanents of the manhattan project and sites around the country, and the money's dried up, it's come to an end. between 4,000 and 5,000 people will be losing their jobs between now anded end of the diecious of this year. you have to -- between now and the end of december of this year, so you have to look in the case of the money spent for the creation of these jobs, they come to an end, and which is unfortunate for those individuals. >> and so the arguments that we hear, well, you know, spend the money to create jobs, these are short term jobs, and we're far better served to get a good solid transportation bill in place which would have shovel ready jobs eventually, and those

jobs and the funding is available rather than this temporary spending. mr. freed -- friedman, i just want to talk about 1705 loan program, and my question is, and i realize you are going to be looking into this or are looking into it, and you may not be able to comment on certain portions of it, but when this kind of goes to what mr. county was talking about, this notion when the government is funding something, it's an endless pit, you know, more money to throw at it, and if it doesn't work, we'll pour more money into it. when a program like solyndra, you identify a significant loss, is anything done midway to change the program and saying this is not working, and we need to restructure the program so it works so we're not throwing bad

money after bad and not wasting taxpayers' money? >> i can talk about the loan guarantee program. the most recent report was issued in march of this year identifying problems in the way the department documented the -- the way it addressed risks and the mitigated those risks, i can certainly talk about that, but in terms of the specific case you're referring to, we have acknowledged that as has the fbi and the department of justice. there's an ongoing criminal investigation, and i can't comment beyond that. >> lastly, i have a few seconds left here. aside from solyndra, is your office concerned there's other losses with programs where we've given money to them and the government, aka, the american taxpayers will also sustain losses? >> well, i, at this point, i'm not in a position to -- i have not evaluated every loan guarantee in the portfolio, so i'm not in a position to project

or to anticipate what may occur or may not occur. i can't give you a really thorough answer. >> thank you very much. mr. chairman, i yield back. >> i thank you. i recognize the gentleman from baltimore, ranking member of the full committee, mr. cummings, and then mr. labrador. >> one of the things you said, mr. freed mapp, that was -- friedman, that was interesting was part of the problem was when the funds went to the states, that in some instances the employees who were responsible for dealing with these had fellow -- furloughs were an issue, sir? >> yes. >> okay. and was that -- did you find that the case in many instances? >> there were several jurisdictions, states in which that was the case, mr. cummings. there's an irony there which is

unfortunate that here we come to the states with a program that is designed in part to stimulate the any and to create jobs, and yet the very people who would add -- administer the program and apply the mechanics to the program to make it work were furloughed because of the state of the condition of the economy. it's an unfortunate irony if there's a right word for it. >> to get these -- i mean, it sounds like, and i think mr. lewis said something to this effect also -- it seems as if there was an effort to get the programs up and running in a certain amount of time, and in an effort to do that, a lot of times all the mechanisms were not in place to effectively accomplish that. would that be a fair statement, mr. lewis? >> certainly one of the premises of the recovery act was to get money out there quickly.

>> and -- >> we had a lot of new grantees who had not been in these programs before. >> and the $535 million loan guarantee to solyndra in the subsidies qenlt bankruptcy -- subsequent bankruptcy on monday, we learned beacon power corporation that received $43 million in stimulus funds through the loan guarantee program filed for bankruptcy on october 30th. is it true that the loan programs offers were specifically designed to provide funding to companies that because of the type of company, find it difficult to obtain funding from the private sector. is that an accurate statement? >> earlier, before you returned to the room, i indicated i can't, because of the criminal

investigation, discuss particulars. .. when they be inspected in the high-risk nature of what they do? >> i'm able reluctant to get

into the question of risk and out comes, but obviously there is a risk otherwise the firms would not need government loan guarantees. >> when you look back on when you found, what were your recommendations? >> we recommend it with regard to the march, the third of the reports which was march of 2011 we were recommended the department developed a much more robust system for documenting how it evaluates the risk with each individual level can't and how those risks are mitigated. >> did this come under, did this money come under mr. beauvis's watch? >> i am a member of the accountability transparency board, so i guess arguably all of the recovery act money was within the purview of the board

a lesser god is yes. >> i got you. >> one of the things said is the mechanism by which you would prevent these things from happening and i was just wondering where their prevention efforts and if so why do we have so many problems with it? >> certainly there was a system of due diligence that was exercised by the department. it was eight adequate? that remains to be seen and the due diligence effort would have been to identify the risks to determine what mitigating circumstances, what mitigating factors and controls can be put in place, were the risks tolerable and how you proceed from there so yes, there was a due diligence process in place.

the adequacy i'm not sure i can comment on. >> thank you, mr. chairman. i would now recognize mr. peery >> i will yield my time to you. >> mr. mcmahon, these hearings are a great value to the american people because it is the only time they get to see how their money is being spent. i looked at this as more of the stewardship than anything else. really we are stewards of the american tax payer money and we have to be responsible for the way this money speaks. i come from the private sector as you do. can you discuss able but these jobs we found out in the prior hearing a bus driver driving a diesel bus when he switches over to an alternative energy now becomes we've created a green job, so the fact the american public has gamed so many times with an marketing networks to

take whatever it is we are trying to achieve at a struggle sometimes to tell people in northwest pennsylvania we are spending your money the right way they say really? tell me again some of the dream jobs you see in your construction business. the jobs that exist the goal is to create a new label. it's just a misnomer to think that somebody that works and cuts would from a sustainable force has any skill the difference from somebody that cuts would that doesn't so if you're to ask the department of labor the department of labor that is a new skill set somehow, it literally is we get carpenters for a long time. we had sheet metal workers and forcing people that maybe they turn to a wind turbine, but it's

no different than building a coal-fired furnace a couple of years ago. literally you will have people -- we've done standards we started in the early 1990's here in d.c. actually i worked for a guy that helped write them are originally back in the early 90's, and we've done probably north of a hundred leave certified buildings, several hundred million square feet as a company ourselves but there is no skill set difference between the two people. the idea here what they are trying to do in the district is quite nefarious and it's nice that they leave it all out. they are trying to take a zoning law, the d.c. building act and claim that somehow there was a new skill set required to actually work on things covered that were considered a green, therefore create this place they

create the new apprenticeship standards. i know that we as a company and every other contractor in the district area we would all have had literally decades of apprenticeship standards trying to get them passed we would have been tossed and we would be barred. this wasn't the only jurisdiction that was attempted. texas, northern virginia, some of the places it is a zoning bill claiming somehow the skill set required the apprentice should standard and then people would have to recertified their program. if i can answer one quick question i heard the ranking member back in the title ten of the energy act that passed at the end of 2007 there was something called the clinton sanders amendment that altered the work force investment act the first time you are required to actually have a union as a partner in order to qualify for

the training grant funds. furthermore, the union and its particular jurisdiction covered by the trade would have effectively veto power over any grant money that was expended, so it is in all the altar the work force investment which up to this point never considered union or the non-union affiliation as far as grant funding. this actually requires union as a partner to qualify for the grant funding the green jobs at the inspector general is telling us about. >> thank you. i do think again this is the forum for people that come out of the private sector get the chance to speak to the american people. the part of labor, tell me some of these jobs that we were training people for, the skills that we were training them in. >> some of them are very technical. they are very technical skills related to the green energy industry, but some are as you

heard this morning jobs that can be just as easily applied to other industries. so we could be teaching people to weld for green manufacturing entity, but they could use the skill set elsewhere. >> our concern and the results are still interim whether you call it a green job or not, we simply don't see the people getting any jobs. the rate of placement with a had intended in our other program is significantly lower. >> i don't doubt for one second the intention, and the government does this a lot. the intentions are always great. it's just i've seen much better results coming out of the private sector when it's your own skin in the game and you have to measure twice and you know that dollar to spend twice and that's your dollar and there

is no backup or safety net so once it is gone it's gone and i think that is the whole purpose of the hearing today. every penny that we are talking about comes out of the american taxpayers' pockets and they deserve a positive return on that they should expect that from us and when we get to the point we can no longer object of we describe where the money went and if we have to regain it to make a failure look like it worked i would say mr. mcmahon you and i have made many decisions in our life and we go before the people we represent and say look i made a mistake. i have to tell you this isn't working. but we also don't have the benefit of the unlimited sources of revenue, capital that we don't have to collateralize and that is the danger of these programs, well intentioned or not. we end up in a situation that we continue to grow good money

after bad because we can't stand and tell people you know what, it was bad policy, it was a bad program we need to backtrack. we of money that's been appropriated. it's a way to pull that money back and put it somewhere is going to have a positive effect. i really appreciate all of you being here today. i know that it's tough to take time out of your personal life to come here but it's important for the american people to understand what we do have accountability we must face with them and if it is only going to be about the reelection that we shouldn't run again. it has to be about actually reforming what is we are doing and if we are not doing it the right we stand up and say we made a mistake and we are going to change it. thank you for being here and at that point the hearing is adjourned. thank you.

>> amol conversations >> extremism in the defense of liberty is no life.

and me remind you also that moderation in the pursuit of justice is no virtue. a house subcommittee investigates fraud at the department of housing and urban development's affordable housing program. we will hear from two witnesses convicted of defrauding the, investment partnership program. the house financial-services subcommittee is about three hours.

the subcommittee on insurance housing and community opportunity in the financial services committee is now in order. i would like to let the members know all the members of opening statements each side is agreed to limit themselves to ten minutes per side. we had a hearing on the home a program in the past back in the summer i think the conversation i had with a number of members left more questions than answers it still appears it does appear there is not a sufficient amount of oversight going on on this particular program and hopefully

this is not indicative of what is going on with other programs. let me be clear because i think there's been some confusion about the purpose of the hearings are. these hearings are not about the worthiness of the home program. these hearings are about oversight, accountability when we take american taxpayers' money the expect us to spend it an inappropriate way and more importantly they expect us to guard and make sure the funds are expended in the appropriate way and more importantly that none of that money is lost to fraud. what we are going to hear today, we have two witnesses that actually have been convicted of fraud in these programs and unfortunately that's a crime and they are going to pay the price for that. with the other issue is they are going to detail how easy it was

for these particular programs to be defrosted and they are also going to detail that very little oversight was made for these programs. for me personally and i think for members of this committee we find that troubling so our purpose today for this hearing is to ascertain what happened and hopefully stop it from happening in the future but also we think more importantly, sending a message to the administration that if we are spending and american taxpayers' money that there is accountability that goes with that and that if the procedures are not in place that they need to be put in place to prevent that kind of behavior in the future that very little due diligence has been performed when these moneys are granted to certain entities we are going to hear that people they're going

to be as surprised as anybody that there grant was awarded because the event of the background or the experience to in many cases execute these programs. so i look forward to hearing today and to our witnesses, and with that i would yield to the distinguished ranking member of the committee mr. capuano. >> thank you mr. chairman. i would like to start by saying that i've not been happy with the way this hearing has been led up to. up until now the democratic side on this subcommittee has been incredibly cooperative on every hearing this far. i share your general goals and approach to various issues including this one. i totally agree oversight is an important thing and we want to make sure that every tax dollar is well accounted for to the best of our ability. nonetheless i believe that our site has been treated unfairly and i think especially until this point to my knowledge we haven't done anything to deserve it, and i kind of hope that this is the last time that this

happens. as far as the witnesses go my hope is we would be swearing the witnesses in even though there is a wall on the books that says you cannot lie to congress i think it is appropriately of people convicted of serious crimes that they understand very quickly and unequivocally that they can't lie in court, they know that they can't fly here either. the other aspect of it i would like to make sure that the witnesses know that if they intend to use this as some sort of attempt or forum to say i didn't do it, the dog ate my lunch or was forced to do it or whatever the reason was that's not the place or that's not why we were here. second of all we're stuck with the wrong people. the need to understand very clearly they are here for the purpose the chairman of mind which i agree with and that is eight, they intend to use any other name our own rules call for those names to be subjected in public and the need to be done in executive session so i'm hoping we can avoid all that to be as far as the substance of

the hearing goes everyone here we wouldn't find anybody that thinks oversight is not an important thing and we don't need to protect our tax dollars, we all want that. particularly those of us that actually think these programs are important. the worst possible thing that can happen to people like me is to have these programs abused by anyone, for any reason because it then in power as people who don't like the programs in the first place to say let's shut down the program or dramatically reduce the program. so, in fact, i have always been the person who wants more accountability, and i welcome this hearing and think the chairman. >> thank the gentleman and now would like to yield to the chairman of the committee on insurance housing and opportunity, the gentleman from illinois. >> thank you, mr. chairman, and good afternoon. i would like to welcome today's witnesses, and today's hearing is a continuation of the committee's work to examine oversight of the home program. home is the government's largest

affordable housing construction program. hud is in charge of the perham and ultimately accountable to the contras and taxpayers for the programs outcome. in june, the full committee held the first hearing on hud's comb oversight. during the hearing, what we learned was extremely troubling. inaccurate and incomplete information in the database as well as insufficient monitoring of participating jurisdictions projects and individuals in charge of home fund, which allow waste, fraud and abuse. millions and possibly billions of taxpayer dollars intended to find affordable housing for people in need me of the loosely a expended or worse dwindled by criminals. in some cases individuals and organizations readily took taxpayer funded home dollars but never actually built a unit of housing were only build a few units where many had been pledged to be flexible my staff recently took pictures of a

chicago property funded with home dollars. the database report 65 units of housing were built with the funds of the project. this clearly indicates there are not even close to 65 units of housing at this location. in fact looks more like four units. so that begs the question where is the money and where are the units the promised as today demand repayment and has it been sanctioned for not completing the job. today we will examine what steps they must take to close the door on any further abuse of taxpayers' dollars. the current trust don't verify approach is unacceptable. taxpayers who are paying for this program to serve better. and families in need of housing the program was intended to help deserve better, too. i look forward to hearing from today's witnesses and holding future hearings on this and other programs as we do the

oversight and i yield back. >> thank the gentlewoman. ms. gutierez is recognized. >> thank you, chairman and chairwoman biggert and remember capuano for working to organize this joint hearing today. this is indeed a very unusual hearing because in my 20 years in congress i've never had the primary first witnesses to come before the committee be convicted felons. i certainly never heard testimony from a felon who donated more than five dozen well-dressed the national republican congressional campaign committee during the height of the embezzlement and fraud that she committed for the federal program. i'm going to ask the witness about the donation. i'm going to ask her if embezzling from the home program helps to free of extra cash to help republicans in congress. and i'm going to ask whether my republican colleagues have looked into this and returned to make sure the funds have been

returned to its proper source. i think that the absurdity speaks to the difficulty the majority is having to make the point they seem determined to make about the hud's home program whether the facts support the point or not. the embezzlement we are going to get from the felons began under george bush's administration while he was president of the united states and while my colleagues were in the majority. it is highly regular to need convicted felons to explain how the program is susceptible. we have law enforcement comes before us i have seen whistle-blowers' testify, honest americans, who are concerned about potential abuse who risk their well-being to help the program. i've listened to the community organizers and advocates, consumers, academics. these are credible witnesses that helped improve the program. i have 11 letters in support of

the home program and i ask unanimous consent to submit them for the record mr. chairman. >> without objection so ordered. >> one of the letter signed by the 23 different organizations including habitat for humanity, national association of realtors, the u.s. conference of mayors, even the ymca, the experienced implementing home honestly. why didn't we ask any of them to come and testify before us? i'm really not here today to blame the witnesses. that is up to the legal system and why all i am sure that both these individuals are very knowledgeable regarding the crimes they've committed i can't help but wonder what the majority hopes we will learn from them. it seems to me that a local explanation of the presence is that witnesses are here as examples of how our system works. people broke the law, violated the rules of the program for personal gain and they got caught. they were prosecuted, one sent to jail and the other will certainly soon go to jail.

it seems to me the system works. we can and should make sure every federal program is one well and everybody that it uses the system or breaks lock is caught and punished however we can't stop people from attending to break the law we can strengthen and improve to catch people who break the law. if there were the purpose of today's hearing i would happily and willingly participate. any weaknesses or four double bogeys in the program should be addressed. but let's not be fooled. when we to judge the strength of the accusation against the program is to judge the quality of the witnesses. i believe the way this is being conducted makes clear the purpose is to score political points and generate exciting headlines. i hope in the future think you

for reconvening on this congressional oversight. in pennsylvania they've been used to complete projects, local department community have leverage the funds with the private resources to provide needed affordable housing. this is how the system is supposed to work and is probably the rule, not the exception however in this environment with a deficit crisis and the kind of the restraints that we are under no program can be immune from examination especially where there are reports of we stand examples of fraud in this day and age with the technological capabilities becoming more user-friendly and more adapted there's no excuse for lack of monitoring and reporting the home projects. we saw examples during the last hearing of other departments that have managed to develop a

tracking project so i think it is a reasonable expectation hud can figure it out as well. we should be able to track the actual progress of the home projects and not simply the money that is being spent. part of the job is to ensure every dollar that is sent down here the constituents are receiving value. we are not here today to debate the merits of the program but to make sure the necessary internal controls are in place. >> a thank the gentleman. thank you mr. chairman for all in today's hearing and continued commitment to conducting rigorous oversight of the program and the committee's jurisdiction this committee's effort to improve the management of the program as we learned in our last hearing on the subject in june, hud isn't taking the steps necessary to the guarantee sufficiently accountable for the

funds they receive. we discover that hud doesn't utilize in the management practices and that the agency lacks the internal controls to stop fraud and abuse in the program. today we will hear from witnesses who understand household per demands at the expense of the american taxpayer. the nation of $14 trillion of debt in my district virginia is fifth district of accept mismanagement of taxpayers' resources. my constituents expect congress to closely scrutinize federal programs to identify and eliminate waste, fraud and abuse. i want to thank chairman biggert for holding this today and i look forward to the testimony from the witnesses and a yield back the balance of my time. >> i thank the gentleman. mr. westmoreland is recognized for one minute. >> thank you mr. sherman i want to thank you and ms. bigger for having the hearing and i want to compliment you on the witnesses because i don't think that there is any better way to find out

the holes in a program than to have people that have found them and know how the system works and give us a better idea of what we can do to prevent this type of fraud. there are instances where hud doesn't even have the complete address for some of the project. you know, even if its new construction projects and haven't even been assigned an address, completed projects should have an address. we should know where these projects are at so we can at least have the ability to ride by and the progress of it rather than having the supervisor give us all the files. i hope the committee will continue this tough oversight into this and all the programs and continue to bring about the best witness is possible that can testify as to where these holes are at and i would yield back. >> thank the gentleman and the gentleman mr. dole was recognized for one minute. >> thank you. this h