.. it has significant experience. solar also use this tab stops in seven months ago general electric announced it would use casella's technology of choice for any solar factory had

colorado. >> if it doesn't bother anyone else, cited over and and turn your assignment be if it helps. >> used mr. kats microphone. >> ge just announce it would use its technology of choice for a new solar factor in colorado. all three of these companies are american firms. crystalline silicon a much older technology used by chinese countries is what they used to dominate our markets. actually silicon was invented in america by bell labs in 1954. many believe america can still win in the long run with varitek elegies like tactile. within recent weeks have gone along with solar solar and ge solicited to collaborate with the u.s. pv manufacturing consortium, sematech and ml to

help accelerate u.s. advance event at this critical tech elegy for the future. this is not unlike the initiative started in 1887 which help recapture the u.s. lead and semiconductor manufacturing. more than 300 million private investment. in 2000 dainippon also played for additional funding to expand and upgrade capacity of the 17 of idea we program. it lasted nearly two years and above several technical and financial dirt party consultants and and a lot was finalized in december 2010. today about how strong and 70 million out of potential for a long spirit fonts are used to complete a set of two production lines in colorado. with the suns companies made significant progress, nearly doubling the efficiency of our panels from 45 watts per plf to 85 was three panel today. i've found has not drawn down any funds under the program since august of 2011 and does

not plan to draw down any more funds. abounds' progress has made since last year when module prices fell 50% as a result of unprecedented discounted by chinese solar panel companies. abound believes that scale our modules can compete with any other global company with reported dirty $4 billion in subsidies behind cheney's module makers it's very hard when the competition of the country and not just company. extreme price actions by chinese companies believed to sell solar panels below cost assert many manufacturing companies, including abound and set of matching price levels would cost us to sell panels at a loss, abound made it very difficult decision and that was to shut down our current generation module production in order to accelerate development of the next jan 85-watt module. by this action resulted in a

temporary elimination of 180 full-time and 180 temporary jobs, we believe this very competitive next-generation module can create more jobs for america in the future. abound's technology progress has been made possible by 300 million private investments and 70 million drawn down from the d.o.e. blog. today china dominates the global solar module market is a low cost labor and government backing and u.s. invented crystal silicon technology. while this america's invention is turned into chinese industry, we believe the u.s. can still win in the future by developing newer technologies like tactile. her solar panels can be built by american workers with good paying jobs at lower cost per watt and competing crystalline chinese panels made with low-cost labor in china. today comest technology startup companies come with significant risks. we know that. the reason aggressive price actions to chinese companies threaten to prevent innovative

companies like abound from achieving scale to win. it was on terms appear a technology that dynamic is made solar markets very difficult for other module suppliers. technology advances we've made can be critical elements to the u.s. retaining a competitive position in the global market. as a virtue launch the next generation with use of private financing, we are determined to continue to advance the u.s. to knowledge he to help turn american inventions into american industry. thank you. >> okay, mr. witsoe. mr. fairbank. >> morning, mr. chairman and members of the subcommittee. it is my pleasure to appear today is representative of nevada geothermal power and blue mountain facility in to speak with you about the many good things occurring at the mountain, both in terms of what occurs at the powerplant and also and in the nevada region and beyond.

these positive things are result of the hard work of nevada power and a blue mountain employees as a supportive civic leaders and ordinary nevadans, the dedication of trusted manders and of course the assistance of the department of energy section 1905 loan guarantee program. that way of introduction, i am the president and ceo of nevada geothermal power inc., which is the ultimate corporate owner of the blue mountain geothermal power facility. i am a geological engineer by training with over 30 years of geothermal engineering exploration and assessment experience. i am the president of the canadian geothermal energy association and currently serve on the port of the geothermal resources council based in california. my geothermal experience has taken me around the world and included by way of example participation in discovery of geothermal area in the late

70s and the geothermal resource exploration and evaluations throughout north america and central and south america. participation in development of national power plant for a king and consultation on the power plant on extensive geothermal experience throughout the basement range and geologic project, province of image data. before delving into the specifics of the blue mountain facility, think it's worthwhile to briefly describe the nature of geothermal power and why they are so optimistic about its future as they clean reliable source of energy in the united states. geothermal power is a unique source of renewable natural energy that is the product of heat generated by distorting the earth. your score is continually producing an enormous amount of heat, primarily by means of decay of the materials and secondarily by energy left over from the formation.

heat generated in your score is connected upward in the christ under certain geological conditions such as being placed in a shallow chambers about young volcanoes or thinning of the christ in risk, such as occurs in nevada. rock and water and air shallow crust is sometimes heated to a high temperature. surface manifestations of the underlying the geothermal energy range from shallow clock to wander up hot springs. we are all familiar with some of the famous examples of geothermal energy in action such as volcanoes, not st. helens comes to mind. the old faithful guy in yellowstone national park, their hot springs areas. advances in technology harness the heat stirring rock and modern converts electrical power can be used to power cities and industries without any pollution or negative side effects caused by other sources of energy.

this is not a simple task, but one way or committed to. geothermal power plants are based on operating nonstop 365 days a year at around 95% availability. other sources of natural energy such as when, power, solar power and hydroelectric power all operate at lower capacity. because geothermal plants require no skill to operate their unaffected by fluctuations in prices, produce minimal harmful emissions and have a very small surface of print. they are the natural claim an efficient source of power of which we've only begun to tap. mgp scene consists of standing dedicated individuals who are experts in the respect that field technical eaters have a century of combined experience in energy and geothermal energies and are universally for the commitment.

relating to this one is project focusing d.o.e. fund guarantee blue mountain wind, llc is the registered owners of those covered in eight sections of land and additional leases carry nine sections of land for 17 square miles. the geothermal rights in service rights necessary for the power plant and will field a dvds, the leases are situated at outcompeting geothermal leases in the area and no known environmental and pediments to current or future drilling in plant operations. the blue mountain resource represents the discovery that was not an was have rather long guarantee program which backed the lawn by john hancock.

the facilities operating capacity is sufficient to service the hancock laundress remaining term. no taxpayer dollars have gone toward servicing the hancock loan. our strategic plans for blue map are more ambitious than producing power to meet about commitment and we continue to work with engineers to utilize the geothermal resources that blue mountain. we remain bullish on the future of geothermal resource and are working on a plan to construct new northern injection to achieve a target of 52 megawatts on a gross basis or 41-megawatt net to create. these plans are possible only because of the solar foundation put in place by the hard work of nevada geothermal power employees and the loan guarantee in d.o.e. the opportunity to speak with you about the non-prospects. i am enormously proud and look

forward to many years of clean energy production at this facility. i would be happy to answer any questions to the members of that committee might have. >> great, thank you, mr. fairbank. >> my name is mike ahearn, chairman of the opportunity to appear to work on my perspective of the department of energy loan guarantee program. first solar is the lowest cost manufacturing industry and one of the largest solar module manufacturers in the world and the global leader in developing and constructing utilities that will take power plants. we produce six gigawatts of solar modules representing an estimated $15 billion or more solar powell installations. we are headquartered in arizona and the manufacturing standards are located in ohio. in addition to 1800 associates in the u.s., our manufacturing and development support more

than 7000 additional u.s. supply chain and construction jobs. last year alone we spent more than $1 billion at the u.s. suppliers and 35 states for everything from glass to steel components. we trade on the nasdaq and are currently the only renewable energy company listed in the s&p 500. first solar success reflects over two decades of entrepreneurial struggle, innovation and effective public-private partnership. our core semiconductor process technology was developed in the early 1990s in partnership with the national renewable energy laboratory. in 1999 reaffirmed venture capital funding to commercialize technology. the project we thought would require two years and $40 million ended up requiring six years and over $100 million of venture capital has encountered and eventually filed a number of problems typical to start up technology companies. after solving the core commercial problems come weaker exponentially.

between 2005 in 2009, aided by generous companies in europe and technical assistance with unwelcome at sandia national laboratory brookhaven national laboratory can we field or in a production by 50 fold from 22 over 1100 megawatts and exceed workforce tenfold from 200 to over 2000 associates producer manufacturing costs by nearly 70% and established ourselves as the global industry leader. in 2000 eight we decided to expand young manufacturing and selling solar modules to become the first come me to engineer and construct large pv power plants for the utility market. photovoltaics to that point had been largely relegated to generation systems and are considered too costly to compete with wind and geo-power. to meet the cost and performance required utilities to vertically integrated and the design, engineering and solar power plants and in parallel we

implemented a number of r&d programs and initiatives to reduce cost and improve plant reliability and effectively integrate large solar plants onto the grid. with now over two gigawatts of power plants completed during construction we demonstrated our ability to meet the exact standards of the utility industry. our defense technology and innovative systems and designed the commenters had cost reductions and accelerated construction cycle. but that moderate and control capabilities have validated reliability and great compatibility of new power plants. by consistently delivering on promises we learned the business of some of the most respected companies in the electric utility industry, including aps, excellent, ge next era, energy, pg&e, sandra, southern california, southern co. and an american. accomplishments have enabled us to launch an initiative to expand to new markets across the globe without the need for expensive solar subsidies.

our success story came close to ending in failure. the economic downturn in 2000 jeopardize the market for renewable energy come including first solar is experts to enter the utility market. the timely and effective innovation by congress to the american recovery and reinvestment act by the treasury department through section 1603 programming by the d.o.e. to the long guarantee program helps you are sure jewish or near-term liquidity in the project finance market and foster development of more robust private project finance markets. these initiatives act as both an interim lifeline and a bridge to the future and for that we are sincerely grateful. in recent months the european solar subsidies has historically supported the industry declined sharply in solar and the rest of the industry. however largely because of our successful expansion into the utility market, we remain

financially strong opposition to execute the current market environment. i'm aware questions have arisen regarding the d.o.e. loan guarantee program including questions about first application. first solar will work diligently and transparently to assure these projects and i would like to thank the committee for the opportunity today. i welcome the chance to answer the question. >> thank you on mr. ahearn. mr. woolard, last one, go ahead. >> thank you, mr. chairman. i name is john willard, president of bracer synergy. at two decades of experience in the energy and environment sectors as executive a notch premier investor. great source designs, develops and deploys large-scale concentrating thermal technology to produce high-value for elective power and industrial process markets worldwide. our technology is different from solar photovoltaic word energy

on rooftops. our projects thousands of meters continuously track the sun through the day and we focus light onto a solar receiver which sits on top of the tower. we are similar to traditional power plant site coal or natural gas. they couldn't high temperatures turn a turbine to generate electricity. that's been tested and proven in the field to dissatisfaction of several firms into smaller skill facilities. our partners and investors include some of the world's best-known companies to investors include private equity firms, strategic investors such as chevron, bp and google in energy as private investors. we now play more than 400 people in the outcome worldwide offices what one of the largest portfolios in the united states has utility scale of agreements. first, i'm pleased to report with construction management that is on schedule and within budget and they expect to deliver power to the grid by

early next year. under three of third team power purchase agreements we signed with those two large utilities. in total the item project will cost about $2.2 billion to build in 392 megabytes will produce enough power for 140,000 homes each year. we procured from a supply chain that stretches across 17 states. the majority of materials used to build a project of mistake and we estimate approximately 70% of the project site will be captured in the united states. the project is creating 1400 construction jobs. the project will generate $250 million in earnings for construction workers and overt dirty with 650 million earnings for workers on the site, including 90 permanent jobs require to operate. in addition to the supply chain can invest in the labor wages

created the project will generate $300 million in state and local tax revenues over his lifetime. large energy infrastructure projects typically is project finance to provide funds they need for construction, consistent with the motto of the project company is jointly earned by energy, google embrace stories. these equity investors have collectively committed $590 million to the project company. under the d.o.e. guaranty fund the company is the parlor and contracted the two largest investors in california to help all the projects powered a fixed price for 20 or 25 years. these future cash payments to ask the repayment. praise the risk we prequalified for a loan guarantee in december 2006 proposing to use the project finance structure. in april 2011, 4.5 years after he first applied, are loan guarantee guarantee transaction closed. during the period, bracer is funded over $2 million in

independent review by world-class engineering and legal firms operating at the d.o.e. the loan guarantee program served an important role in the market allowing technology to achieve meaningful scale to drive down costs, validate technology and enable new industry to succeed. in short created necessary conditions to allow commercial financing. going forward we expect to finance future projects commercially. advisories are part of our company and proud of our projects i appreciate the opportunity to address the subcommittee welcome any questions you may have. thank you. >> i think all of you for your testimony today. mr. woolard, do you agree that the program is working on is worthwhile? yes or no. >> i believe the project works very well for project financing. >> t. think it works well in your case? i think and i'm quoting the

d.o.e. review process was extremely thorough and marked by thoughtful analysis. he thought it works well in your situation and their agreement? how much money did you get in on guaranteed quick >> i fully agree. we got 1.6 billion. >> thorough and thoughtful analysis is your statement here. do you believe any of the -- do you believe you received a loan guarantee with any political influence at all involved that decision was based on the merits of the project and your particular company of bracer is quick >> i believe is completely on merits of the project. we started the application in 2006 and went three for year. >> this is where i'm confused because you guys give us 30,000 documents on friday at the month of the first e-mail as i code with an e-mail because today you tell us it was thorough and thoughtful analysis and there is no political influence and yet we have this e-mail corresponding between you and

matt rogers senior advisor to the secretary of energy to the recovery act and this is the guy who decides things. i think it's interesting the first thing you say is please don't distribute this. we wouldn't want the taxpayers to know what's going on with their money. done in this e-mail, the ascendancy saves the department of energy credibility is then i try to cut off communications of people in the hill. so which is it? today you say is thorough and thoughtful and is a good program with great analysis, but in this e-mail when you try and get the money come you see the credibility as thin. which is? >> i never said they were fast. >> this is not about timing. it's about credibility. >> is very much about timing. if you've not made to explain, we have actually invested quite a bit of money and moving the project forward and we have a conditional commitment and the transaction had been contemplated to close in september -- january 4, 2010.

>> he said was based on the merits of the project. the kidneys to the big enough there for us is also the last paragraph starts -- january the first sentence for me? >> also derby at pg&e talk directly to obama to programs challenges in a bad situation. >> now who is the darby and not? >> peter darby was the ceo of pg&e. >> they had a vested interest in getting this occurred because he provided them the required commitment for green power, right? >> pgn he was very dependent. >> is the obama and the sentence sent to the guy who's making decisions, the obama i think it is, the president of the united

states? >> a minute ago you tell me there is no political influence and yet in an e-mail you sent to the guy making the decision you reference the president reference the president of the united states who had a draft conversation with the guy who cares pretty deeply about this thing getting approved. so again, which is at? was it based on the merits and were they as thorough as possible or was there no credibility based on politics? >> it was based on the merit system up to the process. >> why did you think was necessary to tell the guy who makes a decision that a guy you know pretty well who communicated to you directly talk directly with the president of the united states? >> mr. chairman, with all due respect, what i believe -- >> i'd like to help. what i believe that peter darby was saying, i don't know with the many projects under this loan guarantee program was significant portion of many of his projects is dependent on this. >> the keys you thought it was important enough to cite in an e-mail to a guy who was in

charge of making the decision. you got the conditional approval. when they got the next e-mail if i could. this is just amazing. another e-mail from you to jonathan silver, executive director of the loan guarantee program. please see below a draft of the e-mail our chairman, john bryson who is the commerce secretary, chairman of your board preparing to send to the white house chief of staff told daily. so u.s. the guy who's in charge of making the decision. this is the final guarantee. you are asking the guy to proofread an e-mail that your chairman is going to send to the white house chief of staff. you say there's no political involvement? this is amazing. the person makes a decision -- this is not some kid ask an imam to proofread homework. this is taxpayer dollars he says can you proofread this even though you make the decision because we want our chairman who's going to be the next

commerce secretary to send a letter to the white house chief of staff andy said two minutes ago there was no political involvement to give your company 1.6 million of taxpayer money. >> i believe everything we did in our project was fully on its merit and is a very solid project. >> i think it's customary for a comp me to be able to say to someone who would decide whether they have a loan guarantee or not, proofread this letter that our chairman will send to the white house chief of staff that we will send a bill daley. that is unbelievable. >> i believe that the letter that was contemplated was solid on the program itself and making sure the program -- >> would need guidance and support from the white house. that's amazing. dear bill, we need a commander for the white house to quarterback between the wii by march 18. mr. whitehouse chief of staff, can you prove this by assert date? we need this. unbelievable. let me put up one last thing because i know a matter of time and want to get to the ranking

member. we have the full chairman here. chairman of the full committee. we had mr. daschle may put up with the secretary said to us two months ago when questions that i asked. mr. secretary, how about john bryson, former chairman, now secretary of commerce, did that in any way influence your decision to give a loan guarantee to break source? secretary said no. did the white house ever call you were taught to about any of these prospective companies? to someone from the white house chief of staff, someone from the white house call you in the secretary said no. >> mr. chairman, i think we have to have the secretary back in here because this is certainly his response and doesn't square with e-mails we got in it 30,000 documents on friday from break source. >> with the gentleman yield? >> i will commend to you that we will invite the secretary back to clarify the record alone when

it letters to the administration asking him to waive the normal presidential exclusion of conversation since it is clear there was direct conversation leading to a form of favoritism for bright source to ask the president to give us pgn others. >> mr. chairman, i guess this, too. this is the first time that i direct link to the white house and the 1705 program. is this correct? >> this discovery is the first. >> i've won over time and i'll be generous at the time to the ranking member. gentleman from ohio. >> mr. chairman, just to place my opening statement in the record and to include verification as to the ranking members slide used in his opening statement, i would like to, if you will does gentleman from ohio is my longtime friend,

but i think we can shed light on the fact that those ratios, it stated a fact to billy, including the fact the oil industry only was he is a 6% credit under 199, or any other manufacturer receives a 9% if you get 3% less than the same amount of every other manufacturer. you can provide additional charts that will fairly reflect other reviews. >> reserving the right to object, i would be happy to have you submit that and we will again engage in aquatic weed through the records where we will respond to what you are submitting. any objections and be delighted. >> if i could just do one last question for mr. woolard for the

gentleman. i want to be clear for the record. .. that supports brightsource

energy's project application. >> if the gentleman would yield? i would join with you in encouraging that. as you know, my former governor was the author of those mandates that created the very opportunity for these businesses to have a 20-year guaranty with coerced forcing of public utilities, whether pencils out or not, to have renewables. >> reclaiming my time, i just want to say, let me ask the chair. would the chair then invite our friend, governor schwarzenegger to this committee to explain why he supported the same brightsource energy project that the obama administration supported? so we either have here a case of bipartisan influence or bipartisan agreement and result could be good. we may actually have here one of those extraordinary moments where we have leaders on both sides of the aisle that agree and support a project that should have been supported.

so -- >> i gentleman would yield. i will personally call my dear friend, governor schwarzenegger, former governor and invite him. i suspect if he can get away from his busy schedule of new movies that he will honor us with his presence but i will personally call him. >> that would be great. thanks, mr. chairman. i would like to, you got the letter there. i would like to now go to my questions and i think that based on the clock i probably have five minutes. okay. >> i would ask unanimous consent the clock be reset to at least six minutes. >> thanks very much, mr. chairman. see how democrats and republicans get along not only on this panel but with our energy policy. now the majority published a report in which they concluded, quote, the committee identified many cases where the d.o.e. disregarded their own taxpayer protections, ignored lending standards and eligibility reermts and as a result, amassed an

excessively risky loan portfolio. bloomberg government came to a different conclusion. bloomberg recently studied d.o.e.'s 1705 loan guaranty program. the title of that report is, beyond solyndra, analysis of d.o.e.'s loan guaranty program. i asked unanimous concept be placed in the record. >> without objection. >> bloomberg concluded that the 1705 d.o.e. loan portfolio is composed quote, predominantly lower risk projects. question to mr. kats is majority report correct or is bloomberg government? did d.o.e. amass a excessively risky portfolio or is the portfolio composed of predominantly lower risk projects? by the way i want to ask the slide showing distribution of projects within the entire portfolio, cap we put it up on the monitors. mr. kats, i need brief answers. i have a whole bunch of questions i need to go through in the next five minutes. could you give me an answer.

>> i think bloomberg is pretty right, default right by the same you assume defaults come in is one quarter of what is budgeted. that is the bottom line. >> slide shows, the vast majority of projects funded through 1705 were power generation projects. what is the difference between risks associated with power generation projects compared to manufacturing projects. mr. kats. >> power generation projects are typically based on long-term contracts with the utility or some other entity whereas manufactured, it is higher risk because it goes into the company. in some cases the companies have long-term contracts. sometimes they don't. again the power generation contracts are very low risk because you've got long term agreements to buy the power generated from the funded assets. >> so as i understand it, one reason why the portfolio could be considered low risk because most of projects that received 1705 loan guaranties are for power generation and d.o.e. required these companies to have long-term agreements in

place with nearby utilities to purchase power once built? this mes the projects have a guaranteed income stream which greatly limits any risk of default. is that true? >> exactly. >> mr. woolard, do you already have agreements in place to sell power to major utilities once the projects are completed? brief answer. >> yes, sir. all power sold for 20 years. >> you did that because doerr required that you have those agreements before you receive any federal loan guaranty is that correct. >> i believe the loan guaranty depended on those long term power purchases. >> some may ask why should the federal government do anything cause loss of taxpayer dollars as any lon long-term program can. mr. kats why did the congress designed the program with some risks associated with them? >> these are projects otherwise unable to get funding. >> would it have been possible for d.o.e. to accomplish the goal of the law to spur technological advances to renewable energy technology without incurring

any losses? >> no. con gone with risk-free projects would have gotten private sector funding. >> congress appropriating $2.47 billion as insurance fund to cover project losses that is 15% of the amount of loan guaranties. detractors of the program like to point to the bankruptcy of solyndra to discredit the entire program but the actual amount of losses is much lower. i will ask staff to put up a slide projected losses to smaller actual losses. mr. kats, if congress set aside money to cover project losses and one or several companies ended up causes losses would entire program is failure or that it is working as kind? >> no. as a venture capitalist and pe investor it is clear when you make a portfolio of investments you hope many will succeed. you expect a few to fail. what is goode about the d.o.e. program how many.

by the time you anticipate all the defaults come you through only one quarter of defaults budgeted or projected will occur. by any reasonable measure this has been a very successful program should be extended a expanded. >> do you expect the default rate of 170589 guaranty portfolio program exceed 15% portfolio that congress anticipated. >> it will be much less than. >> you expect it to be about a quarter?. >> correct. >> 1/4 of? >> a quarter of the 15%. in other words -- >> program, as i have said in my testimony, you said in yours the program is performing better than expected and in financial terms but how is the program performing in materials of policy? are the 1750 program financings spurring technological advances or not? >> absolutely. these are breakthrough technologies as we heard from the ceo's here. u.s. military this is one of their most important strategic objectives. >> mr. o'hern, what do you say? >> the projects that we're building currently would not

have been financed and would not be under construction if it were not for the loan guaranty program. >> is the program performing in terms of policy, yes or no? >> as relates to the types of projects that mr. woolard and i and mr. fairbanks are discussing yes it is performing. >> whole point of this hear, thank you. seems to me my colleagues, my friends, on the other side of the aisle seem to believe the federal government should not invest in green energy technologies. one expects my friend to be pro-business but on this committee we seem to have some confusion about that. mr. katz, ahern, woolard, one second that remains what is the risk of doing nothing? what would it mean for your industry and economy in the long run if my colleagues got their wish and there was never 1705 loan guaranty. >> make chinese very happy and u.s. miliatry very unhappy. >> mr. ahern. >> maybe i difr slightly on some of these points.

>> the bridge allowed us to access the private markets. >> mr. woolard? >> i believe that we would lose u.s. competitiveness worldwide because building things up in our backyard is important. >> thank you, mr. chairman. thank you. appreciate it. >> i think thank the gentleman i'm confused again. which is it. is the loan guaranty program so great and these companies are so wonderful, this is apple pie and yet, mr. kats says they couldn't get funding in the private sector. can't be both. can't be like this is so wonderful but we need the taxpayers to -- and we need political make sure taxpayer money gets put at risk or, mr. nelson didn't have any of that. again i'm confused. so wonderful, and is the standard only a couple of companies? only 2%, whatever the number is are going to fail? is that really standard we want. >> would the gentleman yield? >> happy be to yield. >> i think you have a witness who has presented help and we have other witnesses who say without this we wouldn't be able to

be competitive. so maybe both things are true. >> now to the gentleman from tennessee, mr. dejlaet. >> thank you, mr. chairman. and thank the witnesses today. i think maybe openly in congress can we come out and testify that the results are better than we thought they would be or in other words, we are not failing as bad as we expected. and you know, we look at, we look at this questioning today and i look at it from the standpoint of a taxpayers we all should. mr. ahern, when you started your testimony it sounds like first solar is a pretty good, solid company? >> yes, sir, it is. >> doing well? >> yes. >> okay. and without the government help or the taxpayers help you don't think the company would be doing this well? >> i think we would be doing very well without the help. we would not have been able to enter the u.s. utility market with these projects.

>> okay. now you said that the company has traded on nasdaq? >> yes. >> how did it rank last year in terms of other companies on the s&p? >> not sure i understand what the ranking criteria would be but if you're referring to the stock price, the stock price declined last year in line with the industry. >> okay. in '08 it traded over 300 shares, is that right? >> yes. >> currently trades about $17? >> yes. >> if, i told you it was the worst performing s&p stock in 2011, would that surprise you? >> it would be out of line with the strong fundamentals of our company but i don't know the statistics on the stock price. >> you're chairman. board and former ceo? >> yes. >> okay. do the executives at first solar have a lot of confidence in the company's performance? >> yes, they do.

we all do. we feel like we built a fundamentally extremely strong company that's got a great platform to expand our markets and our business. >> do you know in 2008 or starting in 2008 about how much money that first solar executives pulled out of the company? in other words, selling their own stock? >> no, don't. >> 2.1 billion. i think yourself pulled out roughly 400 million? okay. is that right? >> i don't know the dates but i did sell stock over an extended period of time, that's correct. >> okay. well this program that we're trying to decide whether it is good or bad, 22 of the 26 prospects on these loan guaranties were rated basically as junk and so when you say the company's doing well, your executives clearly didn't have the confidence. they were pulling their own money yet but you think it is okay for the taxpayers to invest in this? >> with all due respect i disagree with the statement

that the executives didn't have confidence. we have a deeply committed team. there is lot of money still invested on the part of that team and we are focused and growing and we are fundamentally strong. so i disagree. >> so, $300 a share to the 17 for the executives i guess you got out it was good timing? >> look, i sold my shares over a multiyear period under traps actions that were fully and properly disclosed. >> okay. that is your business. let's move on. did first solar pressure the department of energy to approve its three loan guaranty projects by promising that the loan guaranties would enable first solar to build a new manufacturing plant in arizona that would create new jobs? >> no we did not. >> can we put up slide three. does that look familiar? >> i've seen this e-mail, yes. >> would that insinuate maybe they were pressuring

them to move forward on this project to -- >> no, it would not. not at all. these projects were all evaluated independently on their own merits. the manufacturing facility, which we hope to build at some point in mesa was no, no way connected with the applications or the projects. >> it was the status of the plant in arizona? >> it's on hold. >> okay. so you're saying that wasn't used to entice the to package these loan guaranties to push them to approve isn't you didn't promise it would create new jobs? >> we did not promise. the loans were not packaged. it was not part of the process. the loans were evaluated specifically on each project's fundamental. >> okay. the, so the plant is not producing solar panels for the department of energy loan guaranty projects? they're not producing those that first solar promised.

you're saying you did not promise that? >> no, did not promise that. >> that's all i have for now. i yield back. >> [inaudible]. i thank the chairman. doctor, i think your questioning is right on line. one of the things comes into play when we have these hearings is respect for people that come in and testify. i had want you to understand we have the utmost respect for you. but i want you to understand the most basic responsibility i have in serving in congress is respect of the hard-working american taxpayers that fund all these, all these projects you're talking about. and i get confused sometime where is it we're really looking to protect and who is it we're looking out for. and i, i got to tell you coming from the private sector i never had the luxury of having the government underwrite loans for me. i have always had to provide my own capital. had to provide my own character. everything from the private

sector comes from yourself. that sort of concerns me, mr. ahern, i got to tell you. your sec filings, maybe we can put up a slide. can we put up a slide that shows, i think slide 17 maybe. president because he asked but the performance of your company. you have great sved confidence in your company and how well the company is doing. goes from the $303 a share i believe. you know what it traded at yesterday? $15 a share. i don't know, i'm not questioning your investments. i'm just questioning when you say you think it is doing quite well and you have great confidence in the company. why would you sell so much of your own stock in it? why would you cash in on it? >> well, let me if i have you the reasons reason why i think it is so fundamentally strong. >> don't give me that. i really look at the chart. i don't think you're fundamentally strong at all. your shareholders tell you in the marketplace you're doing a terrible job. but whenever you sell your

own shares of stock, and people on your executive board sell your shares of stock, you know, in august, august 9th, 8, 7th, 8th and 9th, you sold almost 700,000 shares of stock in a three-day period. now you're voting with your feet. you're getting the heck out of a situation, say i got to get out of this but what i would really like to do i would like the hard-working american taxpayers to put money into my company. i'm ceo. i know what is going on. i've been there from it birth. i'm watching the thing grow. i have so much confidence in the company that i'm going to cash out. i'm going to take my money and run and i'm going to ask these hard-working american taxpayers just keep funneling money in, some day, somewhere out there, this dream's going to come true. the hopes and dreams of a company that some day, this is the hockey stick. it is flat and some day it will go off the chart. we don't know when that day is coming but some day it

will be there. i got to tell you i'm not going to be there to watch it. i'm going to cash out now. i'm taking my money and running. i want you folks that go to work every day, get up, go to work, pay your taxes clothe your kids, put food on the table i want you to continue to fund this project because you know what? some day this is going to be great. i can't believe we sit here and we listen to this and the question comes up, who in the world is funding these projects? it is not d.o.e.. this is not the d.o.e.'s money. this is hard-working american taxpayers money. i'm so sick and tired of hearing about this respect. we don't have respect for green energy. we don't have respect for folks that put everything on the line. when you're getting out of something as quick as you can and asking taxpayers to go in deeper and deeper and deeper, what message does that send? >> i started this company in 1999 and spent over 10 years of blood, sweat and tears.

>> and we -- 1953. >> and investment. i understand. but i didn't have taxpayers bail me out. you tell me it okay to sell 150 million, $450 million you pulled out, is that right? >> if i may, -- >> would my friend yield? >> no, not right now, mr. dennis kucinich. >> i don't have the numbers but i don't right now. you're sec filing i do have the numbers about. i do have the numbers. and to sit here and listen to this week after week, month after month. go back out and listen when, i go back home, when i see people paying as much as gallon of gas as they pay for gallon of mill. i see people working two jobs to put food on the table and clothes on their kids back. i see people worried whether they will have job next year. we're telling them, don't worry about it, we're looking out for now, respect, respect comes to the american taxpayer. that is respect comes from. i have no respect for situation where chief executives take their money and run and ask american

taxpayers to continue to fund a project,00 a share to $15 a share and you guys are doing well? i don't know where the heck you define well or what dictionary you look it up in. this is absolutely abysmal and why the american people have a great deal of wonderment in lack of trust in people they send to represent them. the d.o.e. maid a horrible, horrible decision and continues to do that. so mr. kucinich, i apologize for nod yielding back to you. hard to yield back when i have to go back home and walk in western pennsylvania watch people who can't make house payments can't make car payments can't put food on table and can't educate their kids and we're pouring money down an open hole and chief executive officer bailed out and ask american taxpayers to put money in? >> i would ask the gentleman to yield and briefly to me. >> my time is up. >> unanimous consent you can have three more minutes. i share your passion for

what happens with taxpayers dollars that are involved in investments i think what would be helpful is we could have the witness respond for a couple of minutes and explain your position on this and address the concerns that congressman kelly has raised. >> thank you. thank you very much. >> gentleman may respond. >> the first point i would make is that the d.o.e. loans that we're talking about in this case were not made to first solar. this was not first solar's private capital, corporate capital funding. these loans were made to three projects that first solar is supplying product to, that are owned by sophisticated utility investors with utility off-takes. these are projects, not funding first solar. this is not the same kind of situation that solyndra or, or, abound or these manufacturing loans. first solar's corporate funding provided by equity

funding, which initially came through our venture capital company, starting back in 1999. we took the risk that you're talking about should be taken by very much ture capital and not taxpayers. we took that risk. we were successful and able to bring the company public as a public company, there is typically a replacement of venture capital money for institutional money. it is a very normal thing for venture capitalists once they take a company public to sell stock over time, get the proceeds so they can go recycle that back into early stage companies. that's what happened here. this, the sales by me and other people on the team have absolutely no reflex on our conviction and belief in the company and its fundamentals. if i could just on the fundamentals of the company, look, we have guided through 3 1/2 billion of revenue this year. net income on gaap basis of

around $350 million. operating cash flow of around a billion dollars this year. we've pointed out that we have multi-year visibility into demand that will continue to drive strong profits and cash flow and we're now expanding into emerging markets without the need for subsidies taking what we've demonstrated with the benefit of the d.o.e. loan guaranty program and deploying that through exports into other markets. what happens, the stock price day-to-day is subject to all kind of things beyond our control. not the least of which are short interest investors. so i can't control that. i can't speak to it. i can control the fundamentals and i'm telling you they're very sound. >> gentleman from pennsylvania, wish to respond? >> yeah. and i understand everything you say. i'm talking about personal money. when you're pulling money out, selling 700,000 shares. i get it. i get it, believe me. i get it. venture capitalists will always take a risk that is underwritten. lower the risk more money they put in.

higher risk more money they want. this is loan have no pay back. this is loan from d.o.e. it is a gift. it is free money. it is free money. it really is. free money. you don't have to qaufl the same way i have to do. believe me every day of my life. go out borrow my own money, put up my collateral. i dame came from disney world. there is fantasy land down here. not like this one you have to pay your own way. you don't get it for nothing. when you tell me as a ceo, if steve jobs had done that, if bill gates had done that, what would people think of that? jobs is getting out of it must be good up investment i would like to get back in. gates is getting out of it. these guys aren't pulling out. i wonder what was the reason for you selling 700,000 shares in three-day period? why? other thing is, why don't you buy it back now at $15 a share. it has got to be a real bargain. think what you could buy

with 450 million you got. >> i will go to, if ranking member, full committee i will go to him. if he wants to wait and go to mr. mulvaney. and go back to mr. cummings. >> i'm ready. >> go right ahead. >> first question this is for our loan guaranty recipients on the panel. each of our companies received loan guaranties proper for projects you're currently advancing and i believe it is legitimate and appropriate for members of congress and taxpayers to ask what you're doing with the money. i'm sure you would agree with me. can each of you articulate or a few of you, for this committee were you believe the loan guarranty provided by the government to your projects is a good bet? in other words what are the taxpayers getting in return for their investment? because i don't want people to look at this on c-span and think they're not getting something out of it. that is the taxpayers. one of you or two of you try

to answer that the best you can? >> i would be happy to, yes. in the case of first solar there are three loans made to projects, large power plant projects in california that are owned by sophisticated energy companies. these loans have been investment grade rated so the taxpayers, first of all will receive a return of all of that money, 3 dal billion. they will make a profit in addition to that that totals roughly a billion dollars. the funding is allowing for roughly 1200 construction jobs over the life of the projects. it is further enabling the industry, renewable energy industry in the u.s. to continue to grow and become profitable and export oriented which will in turn create more jobs. this will prove to be a very prudent and timely -- >> so it really does have a multiplier effect, does it not?

>> yes it does. >> mr. fairbank, could you answer that same question? >> yes, sir. we received $98.5 million loan from john hancock backed by the d.o.e. hope guaranty. -- loan guaranty. in the 1705 criteria. there was a job criteria. we did create a significant amount of new jobs and another part of the criteria was to allow companies to obtain senior debt financing. we had borrowed money to construct the plenty on a mezzanine level and we used a good part of the money to put in place senior debt financing and replace some of the mezzanine debt. >> let me just ask this. voe, filed a manned date from congress when it created the loan guaranty program and each of the products under your

stewardship has some risks associated with it. mr. woolard, can you explain why it is so difficult to find financing in the private sector when bringing innovative to technology to scale. >> sure. we received our early backing as a company from venture capital who financed the company. we then brought corporate investors in including chevron, british petroleum and others and as we looked at scaling up first thing we did was derisk everything with a demonstration facility and grew that from a six megawatt facility we did in israel to a 30 megawatt facility for chevron. to go to the large-scale power plant that had been proven there was not technology risk but to do it at the size and scale was needed the loan guaranty enabled that transition. i like to answer your first question as well. >> please do. >> what the project is doing well for the taxpayer. we have a $1.6 billion loan guaranty that enable ad $2 billion project, there 1700 jobs on site today but more

importantly behind this there are 10 more projects that we have contractual commitments or power purchase agreements to build that will be $10 billion that will be commercially financed this enables the transition from a loan guaranty program to commercial financing and i think that is very important. >> would you have been able to do all of what you just said without the guaranty? >> no. we would have likely done a smaller, we wouldn't have been able to do it at the scale that allowed us to commercialize. >> the reason i'm asking these questions because i think it is very easy to demonize programs and a lot of times we don't hear the other side of it and that is the benefits that the taxpayer gets, the benefits that you know, it's a situation where government is working with private industry, always talk about creating jobs and all three of you all have talked about jobs being created. but you also talking about innovation am i right?

>> the gentleman from south >> thank you, mr. chairman. thank you for the opportunity to be here today. thank you also to the ranking member, mr. kucinich, for allowing me to persist the. i'll be honest with you. on several levels, this thing has been very difficult for me to sit and watch. somebody who comes from the private sector, it's not easy for me to sit here and watch you have to defend things that ordinarily wouldn't be any of

our business. mr. hearn, what you do, you built the last 13 years and which might want to do to take care of her family and reward yourself for the work you put in. should be none of our business. i guess we want it to be none of our business. but recognized the fact that you are not here today because of what you do. you're not here today because of stock that you sold or any of your here because of what industry you participate in peculiar because you have asked as to be here. you brought this on yourselves. i hate to tell you that but it we would be silly, we'd be foolish to think that even if not yourselves as individuals, have spent time walking up and down the halls of these buildings in washington for the last decade asking us to make people buy what you sell. we have requirements, mr. chairman, that we have to purchase a certain amount of our energy from renewable sources

but a federal mandate. you asked us to do that. i wish you hadn't. wouldn't have supported it but you asked us to come in and say look, the american people, you have to buy what these people are selling. i'm completely sympathetic. when i was building houses i didn't get that. when i was rolling for readers and arrest out there was nothing to say people have to come to my restaurant and buy my products. beyond that the loan program is simply on top of that. not only the 17 '03 program a government guarantee program, remember, lost a lot of people because they are watching this, the 1705 program is different and ordinary under the old program y'all would have to pay for credit subsidy cost. but under this team is program, you didn't have to pay that. that taxpayers have to pay that. so with little skin in the game that y'all would have in the

1703 program isn't even there under the 1705 program. it is effectively a free program to you folks and that's why we're here. we are not here because we don't want you to be successful. to the contrary i want you gentlemen to be successful. i want you to grow, i want the stock to go back up to $300 because i know it not only benefit you but everyone of employers who probably has a retirement program that buys that stock. but you have to be here today we ask is to get involved in your business but you have to be here today when you ask us to make people buy what you sell. i encourage you to consider that, the next time you come walking up and down the hallways and say i think would be great if we took that renewable component from 10 or 15, to 20 or 25 or 35%. wouldn't it be great if we had to have more vehicles? we make some of that stuff, too. i'm tired of people coming to the government as part of their business plan. look, if we can forget way to make the government of course not, that will really help us. conversely, if we make the

government make what our competitors sell illegal, that would be even better. we see that every single day. quite frankly, gentlemen, someone who came from the private sector, i'm sick of it. i wish you would compete on your merits, and we would compete on our merits in my business. i hear what you're saying. you're down to 73 cents of kilowatt hours tremendous success for your company. please stop asking us to help you do that. as bad as i feel for what you do go through here today, explaining their stock purchases, you brought every single bit of it on yourself. we know it. we have to do. mr. kucinich does, everyone up your nose. we just fill out our financial disclosures but we have to kill everybody in the country, every single investment that we make that is worth more than $1000. we have to do that every single year. we choose to do that to ourselves when we run for these offices. what you gentlemen have into it

today and will endure because it's not going to get easier, it's going to get worse, what you brought up on yourselves today, you have brought upon yourself i come here and ask us to help you. mr. chairman, i know that was not going to be my life raising but it took by five opportunities and i appreciate the opportunity. >> i thank the gentleman. into the gentleman's point, we have a witness, who did exactly as the gentleman implied. will now turn to the gentlemen from california. >> thank you, mr. chairman. on september 2, 2010, your name appears as the ceo of brightsource along with teater derby as the chairman of pg&e. holding it at brightsource energy in oakland, california, a fundraiser for friends for harry reid. do you remember that? >> yes, sir, i do. >> the senate majority leader

was pretty important to you, and important to hold it in your corporate offices? >> with the gmu we've been asked to do this, and we also have some projects in nevada as well. >> yes, i know. let me ask the question. did you speak, when was the last time you spoke to secretary of commerce, bryson? >> it would've been before he was appointed secretary of commerce. i haven't spoken to him since. >> it was the time he was chairman? >> he was chairman of our company until he was nominated to congress, which would've been -- >> okay. my understanding is, it takes a while to get that and it takes a while to get nominated. it doesn't happen overnight. so my question is when he was the chairman, you were the president, and he wrote his e-mail to mr. daly. that was two months before he got the job.

weren't they already in discussions? wasn't he essentially lobbying for your organization as the heir apparent, the person they were looking at to be secretary of commerce, and at the same time lobbying for you? >> no, sir, i don't believe he actually sent that e-mail. we basically decided that was not appropriate to send and ultimately did not. >> whether other e-mails that were sent during that period of time to the white house or others at the white house? >> no, sir. it was nothing to my knowledge. >> so this is just a draft that was hanging around? >> exactly. we decided then that it was not appropriate and did not send. >> now, -- >> in addition, we were very careful with every organization that john worked with. he was very, very careful. >> it is interesting, you know, council, right? and that group, while he was

having a public utility, that group actually produces and participates in lawsuits that drive up the cost of energy, don't they? >> they are and intervener and a lot of exciting issues with renewables. >> so it's sort of amazing they track of the cost of energy, particularly conventional energy through a series of lawsuits, and income it does get paid a markup on whatever their costs are, even if those costs are driven up by an organization that is handed over to the base with people who are insiders. so i do find it interesting that he now is, in charge of making america competitive, but, in fact, has driven up costs. mr. woolard, and for that matter, each of you on the panel, your company would not exist today if not for the loans and the mandates, is that correct? at least as we know it. >> no, sir. i think it would be fair to say that we would not be doing as

much business in the united states pic will be working in other countries, other jurisdictions more heavily without the loans or mandate. >> mr. ahearn, would you say the same thing that you're malaysian factory would still be selling in europe and used to be in business and you would still be an s&p 500 listed company, if not more domestic mandate and guarantees? >> we would still be a successful company but we would not be in the financial condition, sound financial condition we're in, and we would not have successfully entered the u.s. utility market. we would be a smaller company without this. >> isn't it true that if not for a waiver as to the carcinogens that are in your pv is that, in fact, he wouldn't even be in the european union at all, you would need a waiver for your technology? >> no, that's not true. the product -- there's an

elemental material that is in it, stable compound. >> but it needed a waiver in the european union to field it, didn't you? >> it didn't, no. >> and to did well on a single study that you paid for in order to convince people that? >> no, we didn't. >> you didn't pay for it or it wasn't heavily relied on? >> i don't member paying for one, nor a single study would've been relied on. but i think what that is referring to is the european commission, undertaking analysis about how to regulate all of the various sub technologies, and this question did come into play about what do you do with cadmium telluride because there's cadmium and so forth. national laboratory and in several comparable groups in europe have done studies. we also funded studies, and i think -- >> studies or a steady? >> multiple. >> multiple studies.

if you give our committee copies of the study because we were unable to find the quantity that you are referring to. >> be happy to. >> mr. chairman, thank you. i hope there will be a second round. >> yes, there will. thank you, mr. chairman to the gentleman from new hampshire if he is ready to go, we can go to him. >> thank you very much, mr. chairman. i thank you all for being here today. i want to talk to mr. fairbank about your loan guarantee. my understanding is your loan guarantee was about 98 and a half million, is that accurate? >> that's correct. >> okay. can you tell me what it means when a generation facility is placed in service and online? >> that means the power plant is up and running and operating at at least 20% of its capacity. >> okay. can you tell me when the blue mountain project was placed in

service of? >> was placed in service in october 2009. >> and when did nevada geothermal receive its loan guarantee to? >> we received our loan guarantee on september 3, 2010. >> so a full year after you were online and operational? >> that's correct. and i guess the process from when we submitted our application into we got the guarantee, that was 10 or 11 month process. >> okay. what was the reason that you want a loan guarantee when you for start the process? >> we were wanting to have a permanent financing. we actually had worked with john hancock to work on a phone from john hancock, and they made the application to the d.o.e. >> so you had an existing either line of credit or loan from john

hancock? >> no, sir. >> did you have some -- what money did you use to get this online? >> , we actually had a facility on commercial terms with a senior investment bank in new york to construct the project. they withdrew that commitment through the summer of 2008, and we needed to scramble to obtain a debt loan from tcw, which was 180 million-dollar facility. at the time we thought about a bridge loan and we would be borrowing, we thought, $70 million. and then we thought we'd go back to the bank for the remainder of the money that we needed to build the plant. as it happened, several months after that, as you know, the

banking crises was, none of these banks were operating. so we ended up borrowing $180 million from tcw to build the plant. that's how we build the plant. and then that wasn't in any way any permanent financing. it was originally thought of as a bridge loan. it was very expensive interest rate, and we used it for construction. so we used john hancock loan that was backed by the d.o.e. loan guarantee to pay back a portion of that loan. we also hadn't finished our work but we have built the plant, as i think you are pointing out, and that's only a portion of the project. we had not finished our work on ththe wealth you. sort portion of the funds were also to be used to finish the well-heeled. >> okay. so you had completed a financing, albeit not permanent at a high interest-rate? >> that's correct. >> you then could not get through normal channels, a bank

loan? >> we may or may not have been able to get through normal channels. >> well, you mentioned that surround the time of the banking crisis so i'm inferring from that that your position would be that you couldn't get access -- >> oh, when we're wanting to build the plant's? >> yes. >> we were forced into that long because they started with our contract, and they were giving a limited notice to proceed. if we hadn't declared the rest of the money that we needed to finish the plant, we wouldn't have been able to hold schedule relative to the ppa. and we wouldn't have been able to hold the cause so the contractor guaranteed a delivery time, and they cost. >> okay, but you did have that financing in place and you did get the plant up and run it because the plant was operational back in october of '09. so i guess my point is, why would you then get a loan in september 2010, a year later, because to me it sounds not like

you though, it's sounds like a bailout of your business plant? >> it wasn't a bailout of the business plan to go's putting in place a senior debt financing with just one of primary goals of the 1705 program. >> could you get a financing anywhere else? >> we utilize the program that was there. >> could you get the financing from the private-sector? >> it's possible we might have been able to. it's speculative whether we would have or not. i'm sure would have -- >> did you try? >> we -- >> or did you just choose to go solely to the 1705 program? >> well, we went to the market, and we had, my recollection, was for commercial bankers, investment houses make proposal. john hancock mid of this proposal so we basically went with john hancock to see if we couldn't best put together a commercial loan.

and john hancock made the application to d.o.e. because that program was available. it was a great assistance for them to do the. i don't know if hancock would've done it it without a loan guarantee. they said they might. but obviously the d.o.e. loan guarantee help them make their decision. >> well, -- >> we weren't involved in the. we wanted the applicant for the d.o.e. loan guarantee. that was john hancock. we would involve -- >> but you were the recipient of the money. >> we were the recipient of the jen hudak -- the john hancock money. >> and you knew they were going for a 1705? >> yes, sir. >> so we have a plan in place, he filed the application, you say that you've had an opportunity in the private sector but for whatever reason, you opted not to utilize those loans, probably because this one was a better rates.

you then rebate existing dollars. so the point of this is that the stimulus, whether you agree or disagree with it, the point of it was to create jobs. what job did is create? this was retain an existing loan for an existing plant that was already in operation. >> it was operating at 22 megawatts at the time that we received alone. so we had wasted in service but it was not operating at full capacity so we're to finish the well-heeled. and i think it's very, it's been very transparent in our hard-won application for the loan exactly where the money was to be spent. a portion was to pay down the tcw facility or a portion was to finish the wealth of. >> i don't see a lot of business practice for the department energy -- [talking over each other] >> reclaiming my time. i don't see a good practice for

the department of energy to use taxpayer subsidized loans to provide to an entity that our has an existing facility. that's my personal point of view but i don't think taxpayers in this country want the we providing taxpayer loans to a company to pay back a loan under an existing facility. my time has expired. the chairman has been very gracious and i appreciate it, and i yield back. >> i didn't hear a question or so i would just not address it. >> the gentleman from california is recognized. >> thank you, mr. chairman. and just following up on the gentleman's statement, i share his situation, which is if the you x. amount of additional money but you can't pay back company, you would still have a loan repayment to yourself effectively as part of something

that is, as i understand them is prohibited by d.o.e. but i'm not and other things that were wrong guarantees. when for senator reid and, obviously, a direct political influence wrong in these contributions. i mean, ultimately most of the california have historically supported me. money. i just want to make it clear that senator reid was very important to you him as he obviously was to others but i want to go back to mr. ahearn. i want to make sure i get your statement correct is why i asked to go first this round. you said that should multiple studies, but isn't it true that

by your own powerpoint which we have, when it says risk we're almost completely reliant on his team. that's what that is is multiple studies done by one person, isn't that true? basically your support for your risk, which is our research ultimately proves, if it proves unpersuasive, essentially this carcinogen and corporate end user not a risk, you have to convince the commission, and his multiple studies were big part of how you convince them. a risk was you wouldn't be selling in europe if his studies case. now, isn't that a more accurate statement rather than you're saying that there were multiple studies and you didn't remember if you paid for it? you did pay this organization. you relied heavily on and your own powerpoint statement, isn't that you? >> i respectfully add, i need to break that down i think. i don't think that is true, no. >> did they receive money from your comp and?

>> for any or all of these studies. >> not to my knowledge. >> okay. were you almost completely would say no. >> okay, you say no so the fact that your own powerpoint shows that as a risk? >> i don't know the context, you know, this slide or whatever was made. >> it was made by you folks and delivered under our discovery. >> at still another period of time. >> i apologize. we got from whistleblower. you didn't give it to us. but are you saying that you don't believe it is yours? >> no-no. not a. not a topic i'm guessing i can't, that particular quote without the context i'm not sure what it means. get this from a whistleblower. basically says look, you are relying completely on this individual, the whistleblower informs us that you get paid so we look forward to getting that,

right? and what we are seeing is you needed the money to be where you are today. to ask one question this for a long time. ever since they berated general motors, ford, chrysler when they came in. what kind of jet did you fly in on today? >> i flew in yesterday. >> yesterday. >> on a challenge of. >> 604, 605? >> 300. >> oh, one of the new super minis. it's pretty efficient. that was a nonstop flight from ice in tempe? >> yes. >> okay. i just think that if you're so concerned about, and i know it's more efficient than the big birds, but is that really environmentally sensitive? >> let me point out that it has, for sort did not pay for the. verso had nothing to do with it. it's something i get a my own. >> we're not going to ask if use

the money -- i wouldn't ask that. let me just ask one more question. your production facilities, do the usual solar panels for the energy that they produce in order to manufacture? >> not -- >> is the tree looked at california and made decision not to coming to california because of two major factors, the regulatory in farm and the cost of energy? >> i don't know that that's the case but i think we look at a number of places. >> you ruled out california, the very place that has the mandate that helped many of your companies succeed because we mandate that we buy your much higher, much subsidize costs. it drives up the repair costs dramatically and makes manufacturing in california and desirable. so you decided not to manufacture in a high-cost area. basically i see you're in ohio which is a low-cost energy very. you are in tempe, arizona, a low-cost energy very. they even use coal for some of

their electricity. so is it fair to say that energy costs determined somewhat where in addition to the cost where you manufacture? >> i would say it would be one of a number of factors. >> what put you in malaysia and? >> we wanted to have the base of manufacturing in asia as well as europe and north america because we are building out the company. at the time when we assessed the risk return to the various asian locations, having never done business in asia we thought malaysia was a moderate risk, double plays spent i'm going to close, but just noting that these figures are still correct, germany, 560 jobs, ohio, 280, malaysia, 1680. it sounds like you're not an american company particularly. you something of a small presence in ohio and another in arizona that yvette cooper and awful lot of money into putting you into manufacturing in other countries outside of america. and, in fact, alone program

dramatically made it possible for your overseas jobs, not the american jobs. is that reasonably correct that the majority of the jobs that you provide are not in america and that the phone program facilitated that that as much as anything? >> i would disagree respectfully with the overall characterization spent that the characterization, just the numbers. >> in sheer numbers, sheer numbers, most of our full timers are outside the u.s. >> so jobs created with loan guarantees, stimulus and that is, basically american? >> no, no, no. all those jobs are american. all the jobs created directly with the loan guarantee. so those jobs wouldn't be there except for these loans but those other jobs would be is your assertion? >> the manufacturing offshore would be, the r&d, engineering, the hub of our business is here. you. >> the gentleman from ohio is recognized. california and for his

defense of american manufacturing, and also it seems that the majority is racing a new point of view with respect to the use of corporate jets, which i find interesting. >> you have one be done over the years. >> i know, it's finally happening. i also want to ask unanimous consent, i'm glad my friend from cleveland, pointed out that wrong here. unanimous consent the record of contribution from pg&e some of the most outstanding members of congress, some of the absolutely best equipped to analyze business, members of congress, were included in this list, and i just would ask that that be submitted. i don't also ask any member of the committee who wants to join me on 100, which would end all

corporate contributions basically, turn federal elections in two financing. you say corporate you mean pac money. you don't incorporate because >> thank you spent now to the question. in january, and enough to the d.o.e. official. a large group at nyc, and d.o.e. ability to execute. this e-mail continues call, things are not good and there's a sizable group of private equity investment banks writing a letter to chew about the status of the program and inability get loans through. uncle. i need quick answers. mr. woolard, did this investment group have their own money invested in the project's? >> they did not. suspected to have the own money

invested? >> in multiple projects. >> why were they frustrated? >> it was private sector money was coming in as the highest at risk let of money, the equity tranche, but the process at the dod was slow. >> so the d.o.e. review process was drawn outcome is that which her think? >> it took a lot longer than anybody than it ever and expected or reference. why did these investors in a letter to the secretary? and if so, what did his face because i believe what the results of this group did is they came down and talk directly to everybody, anybody would listen to them. it was a large group, and they said that the program was not executing. net private capital in the riskiest tranche but they needed -- >> so private investors, would the private investors, utility company purchaser and you all have reason to be critical of d.o.e. is being too thorough of review of your applications the? that was basically. theme was it taken a very long

time. >> the e-mail also says this. talk directly to obama about the programs challenge. but that situation. i'm currently trying to put off talks on the hill. mr. woolard, i assume that darby refers to peter garvey, former ceo of pg&e, kurt? >> yes. >> didn't california passed a law requiring chose to begin repurchasing renewable energy in 2014, and that as much as 33% of any utilities energy needed to be renewable by 2020? >> yes, sir. the relevant law at the time was 20% and is being increased. >> isn't the case that securing a purchaser of the energy to be produced at your project was imperative to d.o.e.'s evaluation of brightsource's loan guarantee application? >> brightsource and other loan guarantee recipients were critical to gene could not meet the standard. >> what happened if the d.o.e. continue to drag it out, try got

the due diligence? >> pg&e was at significant risk with the regulars because they wouldn't have been able -- >> would they have faced sanctions from the state if they didn't meet the renewable energy standards of? >> i believe so. >> ultimately brightsource, one of the commitments in figure 2010, and a loan guarantee more than a year later april 2011, correct? >> correct. >> after all that d.o.e. due diligence do you believe your d.o.e. loan was awarded on its merits, or because of a conversation, pg&e wco had with the president? >> i believe it was all done on its merits, a very thorough process and a server backend 2006 action. >> mr. ahearn, -- in march 2011, however, arizona governor brewer praise first solar's project stating the company's quote

present in there so has been a great engine and driving out when nobody energy sector forward. senator mccain praised first energy or first solar's decision to build in arizona. do you believe first solar's political connections had any bearing on the application process? >> absolute not. >> you believe your d.o.e. loan guarantee application was awarded on its merits of? >> yes, but each of them were, underwent a very rigorous detailed process. >> members of congress including members of this committee have sent nearly $500 to secretary chu in support of green technology projects, both democrats and republicans. supported abound solar's loan guarantee application. members of congress also supported nevada's geothermal loan guarantee projects. mr. witt so, mr. ahearn, delete these numbers of congress were requesting special treatment of

your companies? mr. ahearn? >> no, i think they were doing what -- >> mr. witsoe? >> no, not to my knowledge. >> mr. chairman, i don't really think that -- so you think they were awarded on merit, mr. witsoe? >> i know we use the loan to build our new technology and doubled efficiency. >> on the merits of? >> yes. >> on the merits of? >> yes. >> so, mr. chairman, this broad scale we're talking about, i don't, i don't know. i don't see it. i think we i should have a system that is trying to work. we should start beating each other up on it. but we should invite -- yeah, i think would be good of the private equity people in here, too. thanks very much. >> we could put back at the e-mail that the ranking member just cited, the january 4, 2010 enough from mr. woolard to mr. rogers. mr. witsoe, you have any giving

occasions with the department of energy where you reference conversations with the president of the united states? >> no, not that i am aware of. >> mr. witsoe, get any commute haitian concerning your loan guarantee where you reference the president of the essays of? >> not to my knowledge. >> mr. nelson, do you have any? >> no. >> imagine that, you don't have any. you read this paragraph, also darby at pg&e talk directly to obama, not the president, not the president of the next is, obama, about the programs challenges and the bad situation it puts him in, that president himself i guess that is referring to your credibility is then and i am currently trying to put off to medications with the hill until we talk. now, if that's not political influence, i don't know what is. think about it. there's a 15 billion-dollar program. you're all committed for some of that money to mr. nelson is not. mr. nelson, how did you do it? we just had now two hours of the

shenanigans that went on. how the heck did you make it? how are you doing in speakers we have a group of committed private citizens who love the renewable energy, see the future, and have committed funds to our management team on our technology. >> but you guys are -- mr. nelson is doing it with private investment. you guys decided to compete to this available dollars to do you think it's an unfair advantage for brightsource to be able to talk directly to the white house? put up the other e-mail. this one. put up the one right here where, now, mr. ward has said under oath today that they do not come is that correct? >> that is correct. >> let me ask you, mr. witsoe. did you ask the people at the department of energy if they would proofread a letter that your chairman of the board was thinking about sending to the white house chief of staff? did you guys do that?

>> no, we did not. >> mr. fairbank, did you have a letter -- did you have a letter that you asked them to proofread before your chairman senate to the white house chief of staff? >> no, we didn't do anything like that. >> okay. mr. ahearn, did you guys as the department of energy to proofread any correspond to think of us into the white house chief of staff, a pretty important i? >> not to my knowledge. >> did you think that could potentially put you at a competitive disadvantage when you're trying to secure a loan guarantee program? >> my view going to the process we did, it wouldn't have mattered, honestly. any, this was a rigorous, very -- >> but at least it raises the concern, if the potential competitor for a scarce amount of dollars is citing conversations with the president of the united states in correspond with people making the decision, that at least raises some whistles, some alarm bells, rights because i can understand the appearance. >> do you think that raises some concerns be?

we received bipartisan support with -- >> that's not my question. do you think correspond from potential competitors are finite amount of money when they cite conversation with the president of the united states where they send a letter and asked them to proofread and make edits to, do you think that maybe raises some concerns be? i don't want to get involved with the. >> mr. witsoe? might potentially competing the taxpayer would say that my put mr. witsoe's company at a little bit of a disadvantage to mr. woolard company? do you think so? >> i can only comment about a fair process spent mr. nelson, d. think it puts you at a competitive disadvantage of? >> no, i don't. i think ultimately i don't blame any -- >> that's an even better answer. we are back to mr. mulvaney score. we shouldn't have had this goofy program going on in first place to if you don't think it, you can make, i didn't expect the answer, i'll be honest with you. but that's even better.

>> i don't blame any of these gentlemen who i have a lot of respect for for working within the rules to get every competitive advantage they can, including getting government money. the problem is not in their approach but the problem is in the rules spent exactly right. mr. ward, -- mr. woolard, here's what i want to know, so you didn't send the correspondence to the white house. what happened in the course of applying and going to this process, what took place that led you and your company to be it was okay to ask the people who are deciding hey, can you edit this, because we want to send this from our chairman he'll be the next congress secretary to to the white house chief of staff? >> mr. chairman, i don't frankly, as i go back to the last several years, i don't remember what exactly transpired and would've made something okay or not. we decide it was not smart is in

and was not approved to sin, and did not. we wanted to make sure everything was klöden on its marriage, which i believe it was. that was ultimately the goal and we want to make sure it -- >> but, and i want to be quicker because i'm overtime. i just want to be clear. when an e-mail to the senior advisor to the secretary of energy uses this kind of language, also, darby, at pg&e, not mr. darby, not the ceo. darby talk directly to obama. when you use that kind of linkage, this is not mr. secretary, or mr. basham i know use mesh that i know you used to work for -- pg&e has a belly to dr. eby to the president. this is casual hey, we talked to obama. this sounds like this was pretty common. you have some kind of relationship with folks at the white house where you can use this kind of leverage and corresponds to the people who are making decisions about

$1.6 trillion of taxpayer money. >> it's important to read the language but i think it's important that mr. darby was talking about the program. at that point on the d.o.e. program was not getting loans out. it was not functioning. the program itself, nothing to do with brightsource is loan guarantee but the program was not getting loans done. it was, not just us but many of these projects. >> let me ask you this. to the other e-mail, the draft, whose decision was it not to send that correspondence to mr. daly? >> at the end it was john bryson and i who said that's not appropriate, and did not do it. >> i'm just curious for our panel, do you see any concern, confusion, misstatements possibly when you look at how the secretary of education, mr. chu, respond to my questions two months ago weren't asked him directly, to the fact that john

bryson at brightsource now the commerce secretary have any influence on your decisions to grant brightsource a load -- a loan guarantee were asked to get any corresponds with the white house, did any of the and fletcher. i mention the chief of staff. do you guys think there's any concern or confusion there? mr. nelson speakers i think is that although i have no basis to believe it actually happened. if there is some malfeasance in that regard either looking to. >> mr. witsoe? >> i don't have any knowledge of it spent i figured. does anyone else want to comment? i didn't think so. we will turn next to the gentleman from aaron, the ranking member of the full committee. >> a yield a minute to mr. kucinich spent i thank the gentleman. a couple things here very quickly. going back to the memo from mr. woolard to matt rogers, the paragraph that reads also darby at pg&e talk to record to obama

about the program challenges, a bad situation. it puts them in. now, this memo talk about the bad situation darby has put in or the bad situation president obama was put in? >> pg&e was in a bad situation specs of the president was in a bad situation. this is about pg&e and darby, right? >> right. does a public report out starting to discuss their bad situation relative to the loan guarantee program. >> this comes up with a new aphorism that familiarity for this investigation. i also want to thank my friends from this side of the aisle for exploring the mythologies of free market capitalism. mr. cummings, thank you. >> mr. chairman, you have announced your intention to hold a follow-up hearing, and you're committed to inviting governor

schwarzenegger. i would invite you to consider asking both wall street investors who wrote secretary chu and former ceo of pg&e and ask them why they believe this project was so important. >> i'll take that up with the chairman of the full committee. i will take that up with chairman. >> gentlemen, i have been listening to very carefully the i want to go do something that mr. nelson said. i believe that all of you all are honorable people. simply trying to carry out a business in a very competitive world. as i sit here and listen to you, i'm convinced him that if i were you i would feel like i was being beaten up on for simply trying to do what was best for your business. and while we're sitting here going through this, there are

people all over these united states that both parties claim they want to see become employed. millions upon millions of them, hoping and praying that the can get a job. and part of the stimulus bill was to try to get folks employed. i, for one, believe that it was quite effective in doing the. i don't give a damn what anybody says. i wish we had more jobs. but one of the things that also was due, and i quote, was to provide investments needed to increase economic efficiency by steering technological advantage in science and health, and to invest in transportation and firemen to protection and other infrastructure that will provide long-term economic benefits. the reason why i'm getting into this is one of the things we wanted to do was be innovative. i've said for many of podium

that while we may go through our economic problems, we have, and the president said this, we have to be innovative, create jobs and the innovative. that's what the united states is all about. that's why we are the country that we are. mr. nelson, i applaud you for saying what you said. you said, you know, you believe these guys. these are great guys, basically is what you were saying. maybe there's something wrong with the rules but these are great guys being competitive. i want to ask you, mr. ahearn, talk about innovation with regard to the stimulus, and jobs. can you talk about that with regard to your company? >> well, one way to think about it, these three projects we're talking about are the power equivalent of the average size nuclear power plant. we have built something if it's never been done anywhere around the world.

in order to build solar plant that size and magnitude have to solve a lot of problems that have never been solved before. we now have, even though they're not completely constructed with people coming from all over the world to see what we have done. and we have begun negotiation, discussions with potential customers in markets all over the world. as those markets take shape, the innovation and job creation in the u.s. for our business and for our value chain will accelerate because the creation of goods and services that are exported into these countries to meet their power needs will begin to open up and grow massively. really key by giving solar off the rooftop into big utility-scale power plants. that did require and still does a solution of a lot of pressing problems. and it could only be done, some of this can be done in a laboratory. some of it can only be done in the marketplace at the project,

in countering and solving the problem. so that's the big peace. it directly created an average of 1200 construction jobs, which is not trivial. they kept our factory and our supply chain here in the u.s. running in a stable fashion, and will for several years. in the future i think is four, is the export and the innovation that allows us to break into new markets. this has been instrumental. >> mr. ahearn, i often say our children are our living messages that were sent to a future we will never see. and listen to what you just said, and mr. chairman, i just ask that i get just two additional amendments if i could. you know, the things you're talking about are the things that i take it will have spinoff into a time where we are probably dead. and, in other words, what you are doing now, is that a fair

statement? >> absolutely. there's lots of follow-up effects to this. one thing with our success, we put down a marker in the marketplace where mr. nelson and others are now competing to try to beat us. so you have a whole new wave of r&d opening. this silicon valley is full of startup solar companies that were funded to try to beat first solar. that's literally the motto that some of them have. and that's really what i think our country has been all about is competition and innovation spurred by success. and by market opportunities. it's a global marketplace, and the hub of the activity, innovation, will always be in the united states. >> mr. woolard? >> in terms of innovation -- >> and the valley of innovation.

we were talking all the stuff for today, but the big picture is innovation and jobs. at how does the united states stay competitive? we hear a lot of talk, but we don't always walk the walk. what i'm thinking, you are the guys who are, like on the front line, you know? in the trenches. like having to make decisions, difficult decisions, putting your butts on the line every day. and i'm trying to dash giunta so glad you are here, and that you are the innovators. i just wanted to get an idea. why are we talking all this stuff? chinese are running, i mean, just moving rapidly. and i just want to make sure we stay focused on what we need to stay focused on. that is the united states be number one. i don't want to be number two. i don't want to be number three. we are better than that. sometimes i think we get mired in stuff that distracts us, and then get mired in a culture of

mediocrity and failure. and i think we need to be very careful with that. i think my time is up, unfortunately spent mr. nelson, the want to be number one? do you want to have the best company? >> yes, sir. >> mr. woolard, real quick. the e-mail, the proofread e-mail you sent and you asked them to take a look at and you said that you did not send that to the white house chief of staff, mr. daly? >> yes, sir. >> you know for certain you clearly remember you did not send e-mail? >> i would not have sent. i believe it would have been from john can and i don't believe -- >> which is a? >> to the best of my know she did not send. >> so, you know, you didn't send even though you're the asked -- and when you asked him to proofread. and you think he didn't send a? >> yes, sir. >> did you communicate with the white house and some other fashion? did you send them another letter? did you call them? did you go to the white house

and meet with them about this issue? >> i have never met with mr. obama spent do you know if mr. brighton did? do you know, did he meet with, did he discuss this on a phone call, did he argue discuss this on a focal with the white house chief of staff? >> i certainly never have. >> you did not? >> i did not. >> and mr. brighton and? >> to the best of my knowledge did not. >> thank you, mr. chairman. and i apologize. quite ironically i have been chairing a subcommittee hearing for veterans affairs making sure that the heroes of this country who served our country and service and sacrifice, are getting what they need. are hearing today was unprecedented fisa. so i apologize for not being here for most of this morning's hearing. i want to talk for just a few minutes here. a few weeks back in march, secretary chu was year. he talk to us about the loan guarantee program, and he praised the work that was being done by the department of energy it in three days after his

appearance, right in this very room the secretary put out a memo and the memo had to do with scientific integrity. antistate in the memo, he let out a very commendable framework for the department of energy, and specifically he stated, the department's mission relies on objective, reliable, accurate, and accessible scientific and technical information. the department of energy is committed to ensuring a culture of scientific integrity. and i think we can all agree that that's a very laudable goal. in november 2011, the department of energy respond to a letter from chairman issa, and i believe he referenced that earlier while he was here. with an exclamation of the department of energy's awareness of the risks associate with cadmium telluride. and that letter, their source, they presided -- decided the professor. now, my understanding, and i miners and i spent most of my

professional career in health care, both with hospitals and as a nurse, my understanding is that cadmium is a highly toxic carcinogen and could pose a serious public health risk if not handled properly. so, therefore, my question is for you, at least this first question is, did you or first solar, or anyone on first solar's behalf, after pay the professor or any organization with him, or that he was affiliated with the research related to cadmium telluride? and that's just a yes or no. >> as you phrase the question i think the answer would be yes. >> thank you. now, on the screen you're going to see a slide from a first solar powerpoint presentation related to the company's use of cadmium telluride. the highlighted portion of the slide states, and i think, is this the right slide?

okay. a high slider portion of the slide states that a risk for first solar is its reliance solely on the research of the professor. and so my again to you, mr. ahearn, is did you or anyone on first solar's behalf influence or recommend specific lines of research by the professor in any fashion? and again that is a yes or no? >> the answer is no, but i think it's incomplete without further explanation if you would allow picture. go ahead. spent the professor was employed by brookhaven national laboratory which is charged by department injury with assessing department of health and safety aspects of all photovoltaic technologies. before we invested and even faster in first solar, brookhaven and the national noble and gillett conducted their own independent assessment of the cadmium, use of cadmium. and at some point after that,

they associate with columbia university and form a lifecycle study center. and we contributed money. i'm just ushered into the. that was done to the columbia university center. but not with influence on any other specific programs or research. >> thank you. perhaps you could comment then on the risk here on this first slide. we are almost completely reliant on vasilis, and his team. so, go ahead. >> i think this might relate to the european activities. so in the u.s., the independent assessment and validation work i ran cadmium have been done with brookhaven. in europe, at one point had not been any comparable independent government agencies, or work done to excess cadmium telluride

because it had been introduced to the market. and so we wanted to broaden the scope of research and interest the relative agencies in europe in conducting these kinds of assessments on cadmium telluride. so i believe that's what this is referring to. >> did you or anyone on first solar's behalf at any time request that this research undertaken by the professor be kept confidential, or otherwise not disclose? >> not to my knowledge. >> on the screen you're going to see another slide, and i see i'm running out of time so i'll make this quick. on the screen you see another slide from the first solar presentation, again related to a list matrix stating successful study future studies, establish cadmium telluride, photovoltaic desired outcomes. it sounds to me like you are trying to state goals for your

company and you're trying to compromise the objectivity of scientific reports. and that, of course, is of great concern to us. given this evidence, this slide, mr. ahearn, the department of energy's dedication to rely on credible objective information seems to have been compromised by your campaign. and i just would ask whether you agree or disagree with that. >> no, i disagree. they collected their data back in 2006. if you would permit the to explain, i think i can explain this. >> quickly. >> okay. the issue we face in europe was what will competitors likely due relative to first solar, because with the lowest cost technology, and our very of the vulnerability would've been around the use of cadmium. and so i think these slides are going, how do you anticipate a competitor of attack and had to get the scientific community engaged properly to get cadmium telluride recognize as the

proper technology in your. so it was back in that earlier timeframe. >> thank you. and i yield back my time. >> i want to thank the gentleman economy and i know she is to run. i had to run, two but i promise you guys would be out by 12, and we're actually, it's hard to believe we're going to be close but we have to left. mr. kelley has agreed to chair or the file to questions from our members. mr. desjarlais will go first. i want to thank all the witnesses for being here. and for making the trip and sacrifice it takes to come and testify. i think it's been a very good hearing. as the chairman indicated we plan to follow up with mr. chu to get some clarifications to his statements under oath back in march but i want to thank our witnesses. without i will turn the chair over. mr. desjarlais is recognized. >> thank you, mr. chairman but instead of trying to stay on time, i listen to mr. cummings, the ranking member's comments, about the integrity of the panel

sitting here. and really what we're here for today is to look into whether or not the taxpayer money was spent wisely in this area. in these investments. .. for not doing our homework better, loaning money in areas where clearly the risk was very

high and i cast, i would wonder for all you sitting there, if you had to invest all that money out of your own pockets with the would've taken the same path and that's the only question you can answer. but this is the frustration we face here in the federal government and looking after the tax payer money, trying to reduce the deficit and spending probably have. but we just now and a lot of people in washington are taking what the taxpayers money and i will challenge whether anybody watching this hearing today would agree that the federal government sees another time of taxpayer money until it can learn to manage it better than what preceded this hearing today. that is just one opinion, but i thank you all for joining us today and i yield back. >> thank you, dr. >> mr. woolard, some of the question has and what is the

political influence. let me go to site number nine. the sister natalie schafer or her from doug shows that the d.o.e. loan program. it says the team is at the white house and the vice presidents office at 10:00 tomorrow. so why at the white house and wife to bp meeting and if it's not politically influenced? why is it the d.o.e.? i believe i'm trying to make sure it's got the dates accurate. >> its march 8th 2011. whenever wit correspondents on the hill we talk see how members of senate about policy. we talked to carol browner sometimes in the administration in the white house about rotter policy issues. >> so you can see these are your own e-mails. there is no political influence shown. when i tried to go that way, but were going to meet with the vice president. but this is really just a briefing to keep them abreast of

what is going on. >> we met with lindsey graham and others as well. >> as people come to my office every day. very nice people and their concern was respect shown to you folks. i know this is lake retained. i understand not. it comes down to, this is taxpayer money. general motors has gone to more scrutiny than anybody and i get told on the sales all the time i never buy a car because you guys took the bailout. they went to the corporation the corporation is the ricoh corporation. but she go through all that stuff. mr. ahearn, and the teacher resume and background are astute when it comes to investing. what happened at the end of the summer and august of 2011 that all of a sudden america started

to drop? the shares started to go to class? >> the core issue is the subsidy programs that were created the market for solar, for the most part in europe, began to shrink pretty drastically as a function of the fiscal problems in europe and the variety of dynamics. that was coupled with massive oversupply of chinese panels come in on market. basically the market space started to dry up, really impacted all the industries straps across the board. >> we look at europe today and really subsidies are driving. these don't have enough money to continue what they've been finding. >> the same he really is pretty much going to happen here. we are running out of money to the things we think we should be doing so you are not a capital under snow infusion. >> that's right. i agree with your overall point

that we have to be in markets that are not subsidy dependent. we're fortunate we had some time and abilities to lower cost, but we need to move strongly into markets that do not require these types of subsidies, which is what we are doing now. >> so the energy market, and i'm from western pennsylvania. i know what's going on and around the rest of the country, look at all the fossils that are very much abundant and affordable and accessible. so we're watching that go away. i probably would've got rid of my stock, too even though you have no guarantees coming in, usually it's like okay we got the money and won't be okay, but if you see the market, kind of tanking, you say you know what it's time for me to get the heck out of here. i'm going to take my marbles and run. the top justification for the 17 to 51 program wasn't enough private capital. so what do you guys know that

nobody else knows for exporting to go after the low-hanging fruit with the government money >> the bottom line is i believe in the long run if economics, not government policy that is going to drive widespread adoption of green energy and th point of view is to reduce the cost of green energy through s affordable for people and that' their approach. ultimately we change the economics that don't align government funding. right now we have plenty of private funding to do what we need to do and we anticipate we come up with a product that would be competitive so it will be widely demanded an people that we want to do business with alexa associate partner. >> your background, you folks are venture capitalists, so you understand a little bit about investing and turning companies around. >> my wife would say just a little bit.

>> i'm interested in not because really there's an old saying out there. if it's not market friday, no amount of subsidy will affect i and if it is it doesn't be subsidized at all. >> will talk a lot about innovation. mr. cummings talked particularly the innovation. sending innovation is an art part of the government's function and miss but that is different than what guarantee. that sounds commercialization and commercialization should be a private function and should happen with the projects. when you have a project that isn't economically viable or which cost substantially more than economic alternatives, no amount of government subsidy will ever bring that into widespread adoption. >> publicly not a good investment. >> that's my feeling. >> i was wondering because i look at jpmorgan chase and they will do an investigation because they did $2 loss. $20 billion profit in the people

who really come down harder for people who had 16 trying dollars in the rat that make investments every day. that the shareholders and the company, the american taxpayer should be demanding also a look into what in the world are we doing that this money and where we are investing at an at the end of the day, what did we come? so i think we are done for the day. is there anything else quiets i want to thank you so seriously. i know how difficult it is. you can't follow and then beñ upset because people hold you responsible. i.t. perspective or what you do. my own life has been very much through hard work and sweat equity and

mr. nelson. i know exactly what works and what doesn't work and i to agree. this assigns the sometimes way ahead of the market. there will be a time sometime in the future, it may be right now is not the good time. so with that, this hearing is now adjourned. [inaudible conversations] [inaudible conversations]

>> or is this meant that the established price for peace that it tilts over his invention of dynamite. and i think i stay in a book

that it's hard to know exactly what's in a man's head and heart, but this seems not to be true. it seems he was quite proud of his achievements in the area of explosives. they build what we call infrastructure. the mouse, tunnels, railroads. >> when immigrants start to show up in numbers, which is somewhat the case in the 1820s and 1830s, but really very much the case in the 1840s and afterwards, they show up in a political environment in which they're already qualified to vote as soon as they become citizens. just to give you a sense of the politics, this is an image from harper's weekly in 1858 around election time or just after election time it shows a cell in any polling place. if you want to vote come easy to durably also in the back yard to go in there to vote.

>> on thursday, homeland security act inspector charles edward said corruption and misconduct in the department as a threat to national security. on capitol hill the inspector general representatives from the tsa, customs and order protection and immigration testified before a house homeland security subcommittee to talk about increasing instances of criminal activity and misconduct by employees. this hearing is just over an hour. >> this meeting will come to order. the purpose of the hearings to examine the ethical policies, conduct an alleged criminal activities within the department of homeland security. i now recognize myself for an opening statement.

may 6 through the 12th was public recognition week. we set aside time each year to honor our public servants to keep us safe, care for veterans, control our borders and find cures for rare diseases. and make our country stronger and make a difference in the world. most of our employees understand the public service is a public trust. each one has a responsibility to the united states government and the citizens they all stared to place loyalty to the constitution, laws and ethical principles above private gain and most public servants adhere to this stress. however, the pew research center interviewed more than 3000 adult about their views of our government. 54% said the federal government is mostly correct while 31% said mostly honest. 11% said they don't know either. the survey also showed just one third of americans has a favorable opinion of the federal

government. the lowest positive rating and 15 years. a measure of dissatisfaction these days is to be expected. the countries in economic trouble and leaders promise things they cannot deliver. what compounds to satisfaction is our government scandals. there have been many reports of federal employees wasting taxpayer dollars and in some cases committing crimes, which erodes the trust of the american people put in our government. the general services administration employs seven over $800,000 on a conference in las vegas. the department of homeland security spent nearly $1 billion on the secure border initiative network with little return on this investment. we have also some criminal activity within our bureaucracies. custom and border protection personnel collaborating with drug smugglers, cartels, immigration and customs enforcement personnel filing fraudulent travel claims and tsa personnel stealing personal

belongings of passengers. since 2004, over 130 agents of the united states customs and border protection has been arrested, charged or otherwise prosecuted on corruption charges. allegations and convictions include alien and drug smuggling, money laundering and spears see. the dhs acting inspector general mr. charles edward states to mexican drug cartel attempt to correct dhs employees and this impacts our national security. the inspector general also reports that since 2004 there's been a 38% increase in the number of complaints against cbp employees. as recently as february 2012 and i.c.e. agent pled guilty to 21 counts of obstruction and corruption violations. these charges include illegally obtaining and disseminating government documents to individuals with ties to drug

trafficking organizations. there have also been allegations of convictions of pace asians accepting houses of dollars in bribes for immigrants seeking u.s. documentation. a former intelligence chief for u.s. immigration and customs enforcement is accused of embezzling more than $180,000 stemming from a travel voucher fraud in kickback scheme that defrauded the government of more than $500,000. for other i.c.e. employees pled guilty to involvement in a scheme to defraud the government. in the past year alone, there've been numerous and dense of alleged misconduct on the part of tsa officers and employees. thousands of dollars in cash and items have been reported stolen. dozens of tsa officers were fired over improper luggage screening because they had allowed thousands of pieces of luggage onto flights without proper screening.

tsa officers have allegedly taking taken bribes allowing passengers expedited security checks. a number of allegations range from racially charged statements and actions to an appropriate sexual harassment. employees to him is to provide drug unfettered access through los angeles international airport so that drugs could be smuggled into the united states. executive branch employees are subject to executive orders issued by the president and ethics regulations issued by the u.s. office of government ethics. some agencies also have issued supplemental ethics regulations that apply to their employees and even though there are stacks of government manuals, training materials and early briefings about ethics, these lapses continue and they not only waste taxpayer dollars that they are a threat to security of our

nation. while the majority of bureaucratic personnel are law abiding come at this hearing will examine the ethical policies and procedures of select the components of the department of homeland security and attempt to understand what ethical lapses can tenia and what is to be done to prevent them from happening in the future. one final note it is unfortunate the department of homeland security faces serious ethical mishaps, refuses to provide witnesses from leadership to discuss these matters in an open before the american people. we request the leadership to cbp, i.c.e. and tsa. however, only cbp recognize the importance of these issues. with that, i now recognize the ranking member of the subcommittee. >> thank you, mr. chairman. i want to thank you for holding today's hearing and examining the ethical standards that the department of homeland security. in the beginning, i would like to point out there's over

220,000 department of homeland security employees who work everyday to secure our homeland from major threat to national disasters. so before i begin, i would like it done for their surveys. unfortunately, there are some among them use their position of public trust for their own personal gain. in doing so, they put a very nation was more to protect in harms way. since october 2004, 100 or dirty seven u.s. customs and border protection cbp employees have been indicted or convicted of corruption related charges, many in recent years at the border patrol doubled and size. during fiscal year 2010 and 2011, there were at least 33 incidents of corruption or mission compromising corruption at cbp. furthermore the u.s. immigration and customs enforcement, i.c.e.

office of professional responsibility investigation and have had investigation allegations of misconduct occurring at the cbp and i.c.e. the number of allegations by that office is staggering. in 201211, this is only may, there have been a total 101 corruption allegations involving i.c.e. employees and 362 from cbp. at the transportation security administration in 2011, there were three allegations involving corruption, or deter involving security and intelligence violations and 210 alleged general misconducts. although these allegations have not been proven, they are a testament to the fact that eliminating public corruption at the department of homeland security is in dire need of improvement and therefore am pleased that representatives from the tsa come to cbp and

i.c.e. are here this morning i look forward to hearing them regarding steps they are taking to remedy the situation. of course their other incidents of corruption we can point to assess the situation to ask him a cbp and apart is the risk to national security and that is inherent in the public trust violations on the border and are nation's airports. i am troubled by allegations within the department and disagreement on who should be in charge. recent efforts have been implemented to improve working relations among dhs, oig, cbp, internal affairs in addition to bp internal affairs than i thought this a national responsibility. i hope that new memorandums of understanding will truly cause each agency to understand that a delayed investigation as a result of internal disputes will not only undermined after its, though also perpetuate this kind of misconduct.

again, i look forward to hearing from the witnesses and thank them for participation in the important hearing. i yield back. >> i think the ranking member. opening statements may be submitted for the record paper please have this image panel of witnesses before us here today on this very important topic. first, mr. charles edward is acting inspector general for the department of homeland security. he's a frequent guest here before the subcommittee. he has assumed this position in february 2011, served as deputy inspector general of the department of homeland security, has over 20 years of experience in the federal government. next we have mr. thomas winkowski, acting deputy commissioner of u.s. customs and border protection. in this capacity, mr. winkowski serves as chief operating officer overseeing daily operations of cbp 60,000 employees and manages operation -- operating budget of

$11.5 billion. he began work at the u.s. customs service in 1975 as a student. we thank you for your service, mr. winkowski. next, mr. james duncan appointed as assistant administrator of tsa's office of professional responsibility and 2011. mr. duncan is more than 16 years of experience, supervise and handling employee misconduct cases that go pr and the department of justice, my alma mater as well. next, mr. tim moynihan can assistant director at the office of professional responsibility of the u.s. immigration and customs enforcement. he is more than 23 years of experience working for the u.s. government has been in his current position since 2009 where he focuses on workforce integrity personnel screening comments sections and security management. i management. i want to thank you all for being here today. with that, the chair now recognizes -- what was i about to say?

stroud was for his testimony. >> good morning, chairman mccaul, ranking member keating and distinguished members of the subcommittee. thank you for inviting me to testify today about ethical standards within the department of homeland security. the vast majority of employees with and dhs are dedicated civil servants focused on protecting the nation. while a small percentage of employees have committed criminal acts and other gross misconduct, those few should not be used to draw conclusions about the character, integrity or work ethic of the many. over the past year, dhs employees continue to demonstrate this ethic of service from responding to 99 federally declared disasters to unprecedented efforts to secure america's borders into advances in protecting the nation's transportation networks and critical infrastructure. while those who violate sworn

duties of view, even when corrupt asians are officer who allows harmful goods of people to enter the country and put the nation at risk. corruption within the severe consequences. a corrupt dhs employee makes it a bribe for allawi would appear to be undocumented aliens into the u.s. while unwillingly helping terrorists into the country. likewise, taking a bribe to allow the entry of what appears to be drug contraband could expose the nation to weapons of mass destruction such as chemical or biological bonds oig has made investigating corruption take top priority. both personnel and organizational independence of oig investigators are free to carry out their work without interference by agency officials. it is essential to maintaining the public trust and not only the oig, but also the dhs

workforce as a whole. the oig investigate all allegations of corruption involving for example, oig received information about the cbp officer using his position at a large urban airport to support an international drug trafficking organization. oig joined a multiagency investigation led by i.c.e. go pr, which led to the dismantling of the entire drug trafficking organization and the rest of multiple offenders including cbp officer. on at least 19 separate occasions, the cbp officer had bypassed airport security, using his own badge to smuggle money and weapons for the drug traffickers. in december 2010, he was convicted and sentenced to eight years in prison.

in another case, oig conducted an investigation into allegation of theft involving a transportation security officer at the orlando international airport. the tso had stolen more than kitty laptop computers, cell phones and ipods, estimated at $80,000 from passenger luggage in 2,822,011. tsa terminated his employment and march 2011. an august 2011, the tso pled guilty to federal charges of embezzlement and in january 2012 sentenced to 24 months of probation. on may 12012 eyes played guilty to defrauding the government of more than $180,000 in a three-year scam involving fraudulent travel vouchers in time and attention claims.

sentencing for july 2012. he faces a likely prison sentence of 18 to 27 months. they previously pled guilty because i is more than $600,000. each represents a threat to the nation's security in the public perception of dhs and mission. dhs employees are held to the highest standards of professional conduct and oig is committed to aggressively pursuing those who violate dhs standards. this concludes my prepared remarks. i would be happy to answer any questions you are the members may have. >> thank you obstreperous. the chair now recognizes mr. winkowski for his statement. >> distinguish them is that the subcommittee, is a privilege to

appear before you today to discuss u.s. customs and border protection and the efforts of combat. i would like to be dead they put their life on line to protect our nation with the largest one-person agency. the cbp employs over 60,000 agents, officers and mission support personnel in support of our critical mission of securing america's borders against threats while facilitating legitimate trade and travel. as they continue to see success cbp employees will continue to be targeted by organizations and individuals in their attempts to smuggle people and illegal contraband i am here to discuss the vulnerability of the practice after taking to mitigate the threat.

as you mentioned, mr. chairman, we recognize public services they public dress and that the core values they are guarded to the highest ethical and moral principles. i am served with honor and integrity they've engaged in illegal or unethical behavior since the perception of cbp. any such behavior disgraces the agency and behaves the trust of the american public had one instance of corruption in the workforce is one too many. our commitment will continue for employment continues throughout a cbp employees career. an improved applicants against exhaustive background

investigations to ensure thorough vetting of men and seeking employment with cbp. since 2008, cbp has connected preemployment polygraph examinations on a month was law-enforcement applications. important tool to screen applicants before placing on the frontline. cbp is building the capacity to polygraph 100% of all law-enforcement applications and from clients with the mandates of the anti-border act of 2010 and is on track to achieve on advances at january 2013 deadline. in addition to preemployment prevention efforts, cbp is also strengthen its the capacities and detect and investigate corruption within their existing workforce of approximately 200 experienced investigators nationwide. cbp internal affairs uses behavioral science, analytical research methods to flag indicators of potential workforce corruption and providing intelligence driven

response. in conjunction with the we have developed an analytical management systems control officer -- office called and spoke him which analyzes data in the ports of entry environment to identify anomalies that may indicate misconduct. cbp's office of field operations and office of border patrol have also established integrity and ethics committee which provides strategic recommendations and they can come back corruption and integrity in the agent the these efforts began cbp's and coordination on the eyepiece ec. the ip cc includes representatives and seeks to coordinate integrity related initiatives within the agency. cbp recognizes collaboration and information sharing is a

critical factor in maintaining order integrity and addressing allegations of corruption lodged against cbp employees. we've established and the years but the oig and authorizing the code location of agents in order to assist in investigation of cbp employees are also active participants in the 22 fbi let order corruption taskforces nationwide. mr. chairman, members of the subcommittee, integrity center to cbp's identity and effectiveness is guiding the nation's borders. i thank you and members of the subcommittee for the opportunity to appear for the core values and strategic approach. i'll answer any questions you have. >> thank you, mr. winkowski. the chair now recognizes mr. duncan. >> thank you, ranking member keating if it were servers of the subcommittee. it's a privilege and honor to appear before you today. every day nearly 57,000

full-time tsa employees work to ensure the security of our nation's vast transportation networks. tsa employees risk-based intelligence driven operation to prevent terrorist attacks and reduce the vulnerability of our transportation network to terrorism. our goal is to maximize security while protecting privacy and facilitating the flow of legitimate travel and commerce are a multilayered system of transportation security. tsa's workforce at how bush's security mission by screening passengers and baggage of more than 450 airports in the united states. every week we have 14 million passenger reservation and 13 million transportation workers against the terrorist watch lists. our efforts facilitate the secure air travel for 1.8 million persons each day. the success of our mission depends on the dedication and integrity of our workforce. therefore, everything we do at

tsa, from hiring, promotion and training to inspections, investigations and adjudication is driven by our commitment to the highest ethical standards he had administered pistol has made clear that integrity professionals and hard work are the bedrock principles for the entire tsa workforce. in a tsa employee fails to do that to standards, here she violates the trust, tarnishes the excellent work to the rest of our workforce and damage is tsa's representation of the american people. for that reason we hold all employees to the same high professional and ethical standards and has zero tolerance for any kind of criminal activity and the work place. tsa's office of human capital publishes the policy of the current employee conduct. all employees are required to know our standards and we review them on an annual basis. to further assist, tsa's online training center provides training for all new first-time tsa supervisors to give them

tools to identify, report and prevents misconduct. when allegations are instances of misconduct arise, they're investigated by tsa's office of inspections and independent investigative arm of the agency that reports directly to the tsa administrator and deputy administrator. the office of inspection reviews and reports that the dhs office of inspector general conducts investigations of oig elects not to handle them themselves. the office of inspection also proactively conducts independent oversight inspections of operational programs, procedures and policies both in the field and tsa had orders. inspections check on compliance and equally important they provide employees an opportunity to raise allegations of misconduct in a confidential setting. to promote consistency, timeliness and accountability in the disciplinary process, tsa has created an office of professional responsibility at

lpr. opie or adjudicate allegations of misconduct involving senior-level officials and law enforcement personnel. opie or officials also reviewed each investigation involving a tsa employee with the investigations conducted by the office of inspector general. working with tsa's team and capital, over pr as a unified database that will allow us to track all disciplinary matters throughout the agency and this will help us promote consistency and accountability. opr has created greater translucency and conspiracy in the entire disciplinary system by creating a table of the offenses and penalties. the table is available to all tsa employees progress ranges of penalties for each type of offense and guides the decisions about that opr been in the field. as we strive to continue strengthening transportation security and improving the overall travel experience for all americans, we always bear in

mind the success of our mission depends on the integrity of our workforce, freedom to travel is fundamental to our american way of life in tsa is fully committed to ensuring everyone can do so securely. thank you for the opportunity should appear today if you please address any questions you may have. >> thank you, mr. duncan. all we certainly appreciate your presence here today to testify, we did request a witness at the higher policy level, either administrator pistol or his deputy. i think it's important that someone to discuss these issues and yet, tsa failed to produce the witness. next to china recognizes mr. moynihan for his testimony. >> good morning. chairman mccaul, they have the secretary napolitano, thank you for the opportunity to discuss the ways in which i suppose

integrity and professionalism. the overwhelming majority of employees demonstrate the highest levels of integrity and perform duties with honor every day. however as in any large organization isolated acts of employee misconduct to occur from time to time. i testimony today focuses on mechanisms in place to ensure robust process for investigating allegations of employee misconduct and ensure integrity of the i.c.e. mission. since creation of dhs, the office of professional responsibility has been delegated the authority to investigate allegations of administered misconduct committed by employees. although we work for allegations of misconduct in the dhs office of inspector general for review, and many refer back to i.c.e. for investigative factions. i.c.e. has a comprehensive integrity strategy that integrates training, prevention, detection investigation capabilities to determine response and misconduct in the force. strategy involves collaboration with other law one-person entities of vigorous comprehensive screen projects

and education and training of existing employees. opr is the operational divisions to play a major role in the highest level of ethical standards. investigations and divisions connects criminal and administrative's conduct investigations to personal maintain a 26 field offices nationwide in puerto rico. opr offices are responsible for allegations of criminal and serious administrative misconduct and report investigative results are the principal offices and conduct to i.c.e. employees and integrity guidance to offices in the areas of responsibility. the inspections division refused offices, programs and detention authorities with agency regulations, policies and applicable detention standards in order to provide executive management with an independent review of the agency's organizational help them assess the effectiveness and efficiency of the overall i.c.e. mission. finally, security division of responsible for implementation of agency by security programs

could personnel, physical information, operational and counterintelligence. screen in place in the front i this important step we take towards ensuring integrity of the nation. i set his screen prices includes preemployment security checks by fullback or investigations in. it akram investigations every five or 10 years. in addition, once employees on board with hyperactive trading measures in oversight and management of employees at every level to ensure it integrity of the workforce. in addition to training provided by i.c.e. opr the guidance of all employees with respect to standards of misconduct in the federal conflict of interest statutes. collaboration with federal agencies is critical for the mission of enhancing employee integrity. in 2010, i.c.e. and cbp entered into a memorandum of understanding whereby cbp internal affairs are assigned to field offices to participate in all investigations of cbp employee criminal misconduct.

thus enabling management to make informed decisions been considering alternative administrative remedies. this collaboration has solidified the commitment to complete and timely awareness of involvement in criminal investigations of employees. recently dhs, oig transferred approximate 370 cases regarding criminal and administrative allegations of employees. the cases regarding cbp employees work in conjunction with internal affairs and no pr will provide status at ways to dhs oig. information was taken proactive steps to its ensuring misconduct within the agency are swiftly address. if we do everything we can to uphold the agency's values. i speak for director mark when i say the leadership and professionalism of our workforce. thank you for the opportunity to appear before you today and for your continued support of the one-person admission. >> thank you, mr. moynihan.

we certainly appreciate you being here and your testimony. we request it either director morten or someone for his deputy for policy level to appear before this committee and unfortunately your agency failed to produce that witness. but that the recognizes himself for five minutes for questioning. you know, i worked in the public integrity section and the department of justice. i served on the ethics committee and so i've always believed the public service as a public trust. while the vast majority of your employees are honest and hard-working, unfortunately the actions of a few bad apples taint the entire organization. the purpose of the hearing is not to taint the overall organization at all. but rather to look at specific abuses and determine how can we fix the problem? i'll start with you,

mr. winkowski. the cbp -- you know, allegations of border patrol agents, cbp officers working this drug traffickers to facilitate business is just unconscionable. and you know this thread from a national security standpoint and you know they're trying to infiltrate. i want to ask your butcher polygraphs that you conduct with employees prior to employment. if you can elaborate on what some findings have been in terms of degree in climate screenings. >> yes. thank you, mr. chairman for the question. as i mentioned in my interview, we begin doing polygraphs in to fascinate and we've done about 10,000 polygraphs, for that sentiment. come january 23rd team under

the anti-border corruption act be mandated to do although enforcement officers and will meet the mandated 2013. as a matter of fact, we'll meet that sometime this summer. so this summer will have 100% of our lines were some officers undergoing a polygraph prior to coming on board as a law enforcement officer. so all those 10,000 polygraphs we've done, we have discovered a whole host of individuals that applied to be the border patrol agents or customs and border protection officers. and the polygraph was able to identify individuals that had a very, very questionable past. many just give you several examples, mr. chairman. we had a case between 2002 and 2009 applicant smuggled several bundles and was paid on at least

300 occasions the applicant personally unloaded duffel bags of drugs from vehicles and store them as residents and the applicant also accepted $1000 in exchange for allowing vehicles loaded with marijuana restored at his home. so the polygraph was able to identify that and obviously the employee was not hired for law enforcement position. and another will in march of 2009, applicant and a friend became involved in transportation of and marijuana. the applicants ran profited an unknown amount of the transportation of marijuana and a profited with transportation of the. so we have these individuals in some cases, i believe the sole purpose of wanting to become a customs and border protection officer is to infiltrate us. and the way in which we have --

but we have robust background process, what we have an screwtape systems that attempt to better but we pride and data mining i'm looking for anomalies, we really believe that the polygraph is going to be a real game changer for us. so we are ready for that. we have been doing polygraphs, but come the summer everyone will undergo one. one of the things also take you and the ranking member have talked about is the national security position. i view the cbp and border patrol agents as national security -- as national security positions. as such, i think we need to take a different view of that position. for example, while starting the polygraph prior to their employment and we do not as individuals that are deceptive, our data indicates that really an officer close on the other

side about 8.8 years in the service. so the questions while we have data mining and we are doing and goes on looking for anomalies and we have a periodic reinvestigation five years, i think we need to be looking at polygraphs throughout the employee's career. i think that is very important and will work with the office of personnel management towards that end. i couldn't agree more with what you said and mr. keating said about national security positions. >> i agree with the ability of the national security issue in the cases you discussed in terms of preemployment screening with polygraphs demonstrates they are trying to infiltrate law enforcement. there are law-enforcement agencies that require a whole host of employment polygraphs

and you and i talk about this yesterday. can you tell me some of the hurdles. as a former public corruption prosecutor, usually corruption occurs after an appointment, after they've been down for points of entry were there then corrupted by organizations with high dollar amounts to infiltrate the united states with drugs and human trafficking. so, can you elaborate on what would be the challenges and hurdles to require postemployment polygraphs? >> one of the challenges that we have days working through the hiring policies that we have in the office of personnel management. i will make it very clear. we have not approached the office of personnel management on this particular issue. but we will do that.

i have asked my staff to begin the process of identifying with those hurdles are. so you know, the anti-border corruption clearly gives us the authority on the preemployment. we need to work through internally with our personnel office as well as the office of personnel management to look at what it will take two to polygraphs from the standpoint of at the time of aperiodic reinvestigation and in between those periods of time, whether it is looking for a reasonable suspicion or looking out more like a truck screening typos process, where randomly we do polygraphs. i think we have a lot to learn from other agencies that employ polygraphs on a more routine basis and were going to undertake that endeavor. >> let me just say it like to

work with you in cbp if you'd like to join me in terms of changing a policy. and certainly it's been a legislation is required to look at they cannot change. i think this is vitally important and i'll try to keep my time limited. mr. duncan, according to tsa, allegations and indictments of tsa employees stealing personal belongings of passengers, improper luck is screening, which after we saw the attempt out of yemen to potentially smuggle an explosive device, onto an airplane, again national security issue. we can't afford to upgrade tsa officers. so what is tsa doing to address that? >> fair, there are three aspects of tsa's efforts to prevent and detect the kind of corruption that the committee is justly concerned about.

the first echoes what mr. winkowski has discussed in terms of background checks to make sure we are not hiring people into tsa who are going to be problems. in the last three years, our background checks have actually disqualified more than 5600 applications who are subject to criminal history checks, financial checks and other mechanisms to make sure we're not bringing people into a vulnerabilities. the second aspect has to do with prevention and we have undertaken various prevention initiatives in the wake of scenarios such as honolulu, we redid determined there was a large number backs not been screened are subject to security. some of the working groups that we have created in the wake of honolulu have focused on identifying school's political leadership can use to prevent and detect violations of our security protocols. and i know there's some

recommendations they have, with working in conjunction with our investigative office and those recommendations are focusing on metrics and other kinds of reports that can be used by the leadership so that we can identify difficulty before they blossom into full-blown corruption. >> my time is limited. the 22 count indictment has payments to have unfettered access to the los angeles and to national airport said drugs can be smuggled into the united states. that is outrageous. and really unacceptable. i understand what you're trying to do prescreening. as i understand you mention a system tracking system that you're implementing to basically a systematic tracking system to look at this misconduct. do a 400 different offices out there that it's not integrated into one system. i understand you're trying to

develop that. when you anticipate that will be completed? >> i don't have a specific timeframe, but i know his result of the ig audit recently released that the tsa is working not just on coming up with a workable single definition of security breaches, but overall it's reporting system so security breaches are reported consistently, that they are validated and that headquarters get the information from all 450 airports so they can study them, but more comprehensive -- >> what is the timeframe of this will be completed? >> all have to get back to you, sir. >> moving onto i.c.e., accepting thousands of dollars in bribes to provide documentation, you know, tracking organizations, this is exactly the types of things terras will exploit getting documentation to get into the united states and

attack the american people. again, this is just really unacceptable. what are you doing with an i.c.e. to remedy this? >> mr. chairman, we have a vigorous preemployment screening process and a thorough background investigation to weed out individuals beyond the front and prior to employment. subsequent to that, on new employees go through ethics and integrity training. the event and a requirement of awareness program, which is a policy of all employees to condos we furnish responsibilities and rules of conduct. the all-new supervisors did extensive integrity training at the eighth academy as well as follow-on force than offering its work sent to integrity training. we put a constant guidance of recording a employee conduct of

intense information received from a coworker were colleagues to see something doesn't seem right or they have actual information. so we are constantly going back and educating the work force are making sure that they know what the standards of integrity, what the agency expects from them in the proper ways to report that. and then i discussed briefly we have offices located nationwide. we are required to refer to the dhs oig and these are work and investigations collaboratively with them but take sides do not retain them for investigation of refer back to iraq this. we would address it as quickly as possible. >> in conclusion, we need to move on. i did look at some of your manuals. there really doesn't seem to be any overarching policy within iceland there's no specific ethics policy for i.c.e. employees. it's very generic. i would ask you maybe go back and look at that in terms of specific ethics policies -- you

could direct towards your employees. as long as it's common sense of. as i said, services or public trust in when you see that violated and these egregious examples is just unacceptable. again over all the majority of employees are honest and hard-working and do a great job every day. with that i now recognize the ranking member. >> thank you, mr. chairman. a couple comments i want to make first. first of all, taxpayers are spending an enormous m of money to try and make sure the safety is ensured and american citizens are going through and aramis intrusions themselves, going through the gate, getting screened, getting scanned, having their belongings gone through. this is a very serious matter and i would think given the fact

that our security and that the public within two days come of it at year and would at least get the people we requested from tsa and from i.c.e. to show up. that to me says that pain about how seriously they are taking this issue or are not seriously take the issue. but let's be clear about that in the beginning. secondly, this is just an old saw. before my time here as well. the 9/11 commission has made it clear that one of the primary problems that has to be addressed is the issue of jurisdiction. and this patchwork quilt of jurisdictions conflict with each other still is with us and in every here and we the habits and underlined theme and i think it's here again today. it prompts a couple questions that i have. mr. edwards and mr. winkowski. last year before the senate

committee on homeland security and government affairs, commissioner burson stated, and i quote, there is more than tension and friction between cbp iaa and dhs iannucci. so between customs and border and department as security there's outright confrontation in an unacceptable situation. that is the end of the quote. both part of the department of homeland security had to enter into a memorandum of understanding in the first place for oig to perform a function that statutorily belonged to that office and raises creates concerns. as the inclusion i cbp iaa employees as required by batman marion diamond proof that cooperation at all even though we had to do that to get there, has been improved the situation? ..

that was i believe has done a good job of laying out of the past four word as mr. moynihan and and kidded cases are being transferred from the ig over to i.c.e. and cbp is part of the

process so has come a long way since the commissioner's testimony. >> a couple of questions came to mind. it's possible at the general position, the bulk of the people that have been involved in the corruption and conduct, what is the salary range? i just want to get a generalization how much are people getting paid most of them? >> i would say in the average or the base salary when you look at a border patrol agent or the cbp officer at the level which i think is about $75,000 a year and then there is over time associated with that. especially when you look at the southwest border they are some of the highest paying individuals and some of those communities.

>> question for mr. edwards. your office primary authority over the investigation instances of public corruption and in 20 misconduct within the department of homeland security, however, the right of first refusal as well. recently there is that right has been heavily exercised in your office has transferred hundreds of cases to see dp and i.c.e. to handle. what contributed to that as a result of a backlog, but contributed to the backlog if that is what led to this? >> thank you. we had 2360 open cases and 219 agents. clearly each agent is more than. i've been working actively to have the agencies held the office to work the case is strictly. there's a 38% increase in the

border patrol allegation corruption in the last several years. border patrol agents have doubled in size. they haven't had the resources that have been requested. and in short, i cannot keep piling up these cases. i need to act on it. this is a problem we have to address, so under my supervision i've transferred 374 cases of the main subjects to cbp. they are detailed over there. i'm not transferring any cases in the program fraud and miscellaneous cases. 301 of the cases are cbp cases and 73 of the cases are i.c.e.. still because the have an average right now about four and a half cases per agent, so clearly i am taking their resources and, you know, and some of my cases an agent is coming 22 to 25 cases, so

clearly we need to -- we need to address them quickly and bring a resolution quickly. so on this one time on the main subjects we took that effort on the three injured 60 cases, 40% of them are on named subjects. we have an analysis group for those cases but cdp also has the resources, so does i.c.e.. so the intention to work jointly on the main subjects and try to see if we can come up with a lead on that. as a wedding, you know, talking to john and david ag ellerbe this is a joint effort and one problem i am fairly confident because the systems we have put in place with this initiative addresses the problem effectively and as soon as possible. islamic it's partially resulted in the budget situation. >> absolutely so. >> i want to be clear on that. with that mr. chairman i will

yield back. thank you very much mr. chairman i think all of our panelists for coming in to hear their insight with us this morning. i want to follow up on the question and ask that both mr. edwards and mr. moynihan respond from fiscal year 2010 to the president, they've received a total of 26,983 occasions of employee misconduct. some involved corruption while others do not. in any event, this number is extremely high. these matters i want to know does i.c.e. opr work but large, and cbp to incorporate lessons learned from these investigations into new standards and procedures and given what you've just stated,

mr. edwards, having to deal with the budgetary constraint, how does this actually work out when i.c.e. seems to have a whole host of their investigation to conduct because if you add up all of the allegations together, i don't even know how the personnel is able to manage, but that is for you to answer. >> yes, ma'am, thank you for your question. the complaints that we have achieved so far has been 10,438. nonetheless, i think even before these investigations, they're needs to be, and all the components are doing is the practice effort in the prescreening, the and women screaming, the background investigation come integrity briefing and ethics briefing we do a number of those as well and

also that the employees know to look for when there is a potential fraud happening. and then when the allegations come, we go through the process just like i.c.e. and when a criminal case then we were to jointly with the fbi, any number of partners because the aggressively try to do this is going to get to the revolution sooner. looking at our caseload i feel there's an effort to get on to address these problems quickly. the joint center took the clearing house for reporting allegations of misconduct as well as other reportable inflation and that is a collaborative effort that sits in the office space with i.c.e.

and cbp personnel which is a great working relationship and collaboration since the creation of the dhs. the number of delegations are naturally items that were reported, the involved lesser degrees of misconduct or items such as lost, missing, stolen property that are not necessarily allocation based so the numbers seem larger and we want to document and ensure there is a proper record but not the 26,000 allegations are true allegations of misconduct in the investigation and i can get back to the specific number. in our perspective, we have about 600 cases in our inventory right now, and then in addition to the 374 mr. edwards would be transferring here shortly. but we will be working with the internal affairs full participation during the

transfer obviously it is a big lift. it's a large number of cases at one time. we set up teams together to tree ghosh and look at the cases that have bible leaves and most egregious obligations that are showing us the greatest form of devotees and we will do that as a laboratory in an effort to address them as quickly as possible and most serious. >> my question is what happens with those employees who have alleged to do something, do they remain in their post? how was that handled? because certainly, you know, we are concerned about the public and their interaction with these individuals who have alleged to have some sort of misconduct whenever that may be, and also their colleagues. one bad apple can spoil a bunch.

how was that managed? >> before answering your question about the cases i just want to make it clear we have open cases in close cases. in fact, as you may know, there's a lot of cases we have done the investigations then we are waiting for some judicial action so there's some other category that isn't classified. we have within us, our system working without partners here we are going to cause of dalia mother. many law enforcement agencies have the cases. while we are carrying on with this criminal investigation, we also get the administration pushing as well because the last time there is the accepted as a criminal case we want to make sure that they've done enough work on the administrative and so the components can take

action so it is that we work with the components. >> do you want to add anything to that mr. moynihan? >> i was just going to say that every case stands on its own merits and adjust the receipt of an allegation depending on the rise of evidence developed we work closely with other it is i.c.e. management or cbp to make a decision whether that vulnerability is leaving that person in that particular position and vulnerabilities great we may need to put them on the administrative duty while the investigation continues and a reassign them or depending on the level of evidence and seriousness or the level of the position of that individual they may be put on administrative leave or things that each case would stand on its own in the facts and circumstances of that would help us face that decision. >> could you just indulge me for a moment mr. sherman?

i think that you look as though you may have had something -- >> i just have a couple of issues here. a couple fox. it's very important in that these allegations be worked quickly so we have a responsibility to exonerate people as well, and i think the panelists would agree we have the responsibility to do that but we also have the responsibility if we have an individual that is under some kind of suspicion that we've really need for that investigation to move quickly because that individual was still on the line. still processing people and processing cargo. once we are notified by the investigation by the investigators the there's an issue on the line and put them in at the ministry of duty as mr. moynihan.

>> than the doubt was to the court systems we have about 11 people that are indefinite suspension. to the other point of your question a good point here what we do after that? we have the investigation there's an indictment and what do we do next? what we do is through our office of internal affairs we have dissect that and we are looking at where the honorable these are, what do need to do from the standpoint of changing policies and changing the process used so our management controls and internal controls so it doesn't happen again. so it is a constantly year that we have implemented in the cbp which i think is very, very important from the standpoint of making inroads in this very importance subject.

>> let me just in closing associate myself with the ranking member's remarks in the seriousness of these charges and indictments and convictions taken to properly screen the luggage. the tsa officials are stealing personal property, but beyond that is the national security implications the tsa officer would take a bribe to allow thousands of pieces of luggage to go through or to allow drug trafficking organizations to stand unfettered access this is precisely what the shares are looking for. i.c.e. providing fraudulent a

contingent. all these cases are trying to get things through airports, improper screening, in part documentation is exactly what they are trying to exploit and then of course cbp, taking bribes from drug cartel organizations and given the seriousness of this i do first want to say thank you to cbp from one to express my disappointment that tsa and i.c.e. are given these allegations and proven facts didn't bring forth a policy level witnesses that we requested so it sends a signal to the congress that either they are not taking it very seriously or these officials are just trying to hide from the american people so i'm not very happy with that. again i associate myself with the ranking member with his

remarks and with that the committee stands adjourned. [inaudible conversations] [inaudible conversations]

even though job opportunities are scarce in this economy and it's not for nothing that you spend this time preparing jerry falwell saying your long ago service and you don't determine the men's greatness by his talent or wealth as the world does, but rather by what it takes to discourage him. america these your talent and skill. >> accept some deals as construction of the ratings ought to be. it's up to you to right wrongs it's up to you to point out injustice and hold the system accountable. but sometimes abandoned entirely. it's up to you to stand up and to be heard to write and lobby and march and organize, to vote. don't be content to just sit back and watch.

>> secretary of state hillary clinton speaks at 4 p.m. eastern to get us there your phone calls from today's washington journal. let's start by shutting the various headlines about the debt limit that appears this week to be here for civil is huffingtonpost.com nancy pelosi john boehner changes jobs as another debt limit republicans new standoff on debt limits. above that, he warns of the debt ceiling battle. over on this side this is reuters the debt limit need not be a crisis. "washington post" obama warns republicans about the debt ceiling and ezra client will the 2013 debt ceiling be moved? on the phone with us is a staff writer for the congressional quarterly. set the stage for the question what message you want to send to washington about the debt

ceiling. >> why are we talking a lot right now? what are the estimates when the ceiling will be hit? >> thanks for having me. the debt ceiling isn't likely to be reached until the end of the year coming and possibly not until early next year because every one starts for the debate over the so-called fiscal when the bush tax cuts expire, when the budget sequestration goes into effect everyone is trying to gain a little bit. >> what are the politics of this for speaker boehner? >> so, speaker boehner come as you recall last year, he said i won't raise the debt ceiling unless we cut spending or make reforms dollar for dollar. if he had gone back on that i think we all know there would be a huge tree falls on the conservative side. tea party republicans come a lot of freshmen would say we are

giving up this easily. so i think even though last august was not kind to anyone, you know, had he gone in a different direction there would have been problems for him. >> what about the senate if we had heard from the leaders in the senate, are the senate leadership with a key member is talking to the the debt ceiling right now as well? >> they are definitely talking abut it. republicans on both side in the house and the senate see the ceiling as an opportunity to try to reshape the government's priorities with fiscal spending on social security, medicare they see this as one of their prime opportunities. senate majority leader harry reid and the democrat who controls the senate had said this is nonsense. we still haven't even finished the last debt ceiling. she said i have no intention of bringing this up any time soon.

>> is this a skirmish or will it have any kind of conclusion? >> everyone thinks that of the election is going to send a direction, he's going to shape the way this turns out. depending on who wins the presidency and controls the senate and the house we will of a lot of leverage going into the debate on how to spend the tax cuts that no one wants to see, how to deal with the kutz moving on the defense spending and domestic that both sides are afraid of and how to raise the debt ceiling. if there is a debt ceiling romney and republicans said that they will be less likely to want to negotiate with president obama during the lame-duck session. >> we will see what they say about the question and whether or not this primary on the line right now with or not other things are showing people's focus on washington.

thanks so much for setting the stage for the conversation with the audience. >> ben writes about congress for congressional quarterly. let's show this chart which is from "the washington post" and it looks like the debt ceiling over the course of time from 1980 with president carter until 2011 was president obama and you can see how the debt ceiling has risen over that time "the washington post" put the chart together tells us that since 1980 the debt ceiling has been raised for 39 times on a lot, for under bill clinton, seven times under george w. bush and his shoes the way for you to see with the debate has been like the last several decades in this town. sabena posted this on facebook. we already have comments coming you can tweak about the debt limit and also called. let's start with a couple of comments and then go to the phones. lockett down, slash spending to keep it under the limit. if they can't do it, shut the door, throw away the key and

fire the whole lot of them. below that, next year's budget to the 2008 levels of spending which then speaker pelosi voted for. let's begin with somerville south carolina. you are on. good morning. >> caller: good morning, susan. i think this is a very good time to have a civil discussion about our debt to degette >> host: because it's not at a deadline. for senator reid and speaker boehner, they have to raise the debt ceiling. we can't risk the possibility of another downgrade of our financial rating, and i just wish they would be if like grown-ups and come to compromise for anything to get done. >> host: over all you think it's a good idea to talk about it now because it is in the intense pressure with the deadline moving? >> caller: yes.

>> host: thank you from some of also carolina. norma is a republican. good morning. you are on. >> good morning. i don't think we should raise the debt ceiling. we have a problem paying what we already know, and everybody is talking about cutting taxes all the time. how much money do we have left in the treasury? and i have an idea. anybody that has a few million or billion, it would be nice if they would donate some of that money to help the debt. people should get real. don't spend any more than you have. i've never done that. i'm almost 68. live within your means. >> host: you are saying that to the nation as well? >> yes, ma'am and i agree with that lady. our congress should grow up. they were not put there for themselves or their country, i mean, their company.

republican, democrat, what ever. they were put there to help make this country great like it was. the higher the debt ceiling of the lower we go, stop the spending. next is a call from ohio. good morning to carroll. >> caller: good morning. we've always raise our debt ceiling because if we don't raise our debt ceiling, we are going to have a terrible time like it was before they ought to raise more taxes. we shouldn't need taxes to pay for anything. if families needing more and come usually the wife goes to

work or the husband gets a second job to bring in more money. >> host: thanks for your comment. next is john, a democrat in atlanta georgia. good morning to you. >> caller: good morning. how're you doing this morning? >> host: migrate. thank you. >> caller: my comment basically is congress, get it together. the need to come together and come to some sort of a consensus in my opinion this has gone on for too long. also maybe the members of congress should abort this business of getting those cutbacks which was from the left administration and would be

given to the debt ceiling. but may be getting a little bit i know that's not what they want to hear the percentage of their salary to go towards lowering the ceiling. >> host: next up republican in columbia station know how you. you are on. >> caller: this is ridiculous it is going on. it's like the great depression. it's getting worse than the great depression i don't think people realize in this country the debt is going to crumble the economy. to hear that they don't get along, the democrats -- i am a republican and democrats to control both seats of the white house and the presidency when he came into office, president obama. he was my president when he ran. i didn't vote for him first -- >> host: are you there? let's move next to twitter.

the right to as the short-term alternative to not raising the debt ceiling would be freed of this leading to the of the devastated disadvantaged. let's look at some video from the speaker and also from nancy pelosi. >> the fact that they would say tax cuts for the wealthy don't have to be offset, but investments in the education of our children, medicare for our seniors come any other subject that has to be offset is a statement of their values. julca to give them credit they stick with the guide of the special-interest of the wealthiest people in our country and if you're willing to deepen the deficit, make us further in debt to china and other countries to give a tax break to the wealthiest people in the country, and it's not creating

jobs. so it's not even a question of sincerity, it's a question of what is the value statement. >> we can use a debt limit to force washington to act to cut spending and enact the reforms of the help of american prosperity. this is all about jobs. our debt and deficit is causing employers and investors to wonder how is washington going to act. the sooner we did honestly with our long-term debt and budget deficits the sooner this crime against nuclear and certainty comes so employers can do what they do best, put americans to work. >> host: talking with you about the debates beginning a month ahead of the dead line about freezing the debt ceiling let's listen to a republican in alexandria. >> caller: good morning. i just want to say the deficit spending is not that in the end

of the self most people don't realize that the revolutionary war of 1812 and the mexican war of 1848 or fault on credit. even eisenhower who is an icon of the republican party said the government can run deficits through the recession but should run a surplus in in the recovery time. deficit spending is a tool that must be used carefully, judiciously and properly. >> host: are we doing that right now as a nation? >> guest: >> caller: we can do this if we don't lose our heads and if we work together properly and solid bipartisan way we can use deficit spending properly and judiciously to talk about every child is born today so many thousands of dollars in debt.

that's true that every child is born also owns the aircraft carriers, the national parks and the state in the operation of this government. deficit spending has got to be used carefully, judiciously and properly. one thing we can't do we can't tax our way on of this deficit. historic place since the end of world war ii every dollar of increased taxes has resulted in $1.17 of spending. we are overspent, not undertaxed. thank you. >> host: donilon twitter has a different point of view. she writes you cannot cut your way to a balanced budget people need jobs. with of the g8 summit coming this weekend actually more precisely to camp david and the maryland suburbs of washington about an a hour roanoke tourists focus on the contest again by

europe, financial crisis in the united states. that is the of lead in this morning's "washington post" and ocean apart solving the crisis. the summit likely to focus on spending verses german cuts. he is a little of what he writes from berlin to read as we know it's taken a loved of solving the recession struggle and the countries to the public spending even as their economy slumps the u.s.

springfield virginia. good morning. >> caller: my biggest problem as a democrat, democrats are scared to invoke how we got here and george w. bush. you can look at history and take the stock market, too. democrats that's her it's a good. obama wish to she had to in this country without the war and the policy is basically for the recovery. he doesn't have that money to put into the system he asks what we should pay. we start paying for the same

thing. but the history. the republican politics are messed. they've gone through so much leadership. don't put something from anybody that's designing the website in their basement and look at how we can relate to debt on the republican government and no and admit and look at the 50 states and the most part first states in the country, love education and the poor pay even vote republican, but these people try to make sure they are against their own well. >> mike freeman, 44 hunter and

rhetoric writes to us this is infantile and ignorant it is a long-term issue there's time to enhance the revenue stream and slowly redoubt wasteful practices as you know last summer's slowdown of the limit lead to compromise agreement which put in place automatic spending cuts if the congress doesn't reach certain targets that is called sequestration in washington and in the "the washington times" there is a lead story today talking of the defense industry a lot of it headquartered in the washington suburbs eerie looking ahead to the possibility of sequestration let me read what they say. sequestration upon $600 billion cuts to the jobs and plants. john writes the defense contractors already are preparing for the layoffs and closures that will occur if congress fails on the federal deutsch as it this year triggering 600 billion in automatic spending cuts.

we are running to the dhaka running towards calling next call is from los angeles and morning republican. >> once again come out of control spending one direction i hate to say it it's just mind-boggling that we are discussing quarter after quarter how deeper in debt we are getting their lead our nation is overpopulated. we have too many social services. we are selling out our country too many imports. let's get this nation back to work. let's get the american people back to work.

let's start becoming an industrial power. let's lock down this country and start exporting and start of importing. kentucky next and james is an independent. >> caller: i don't believe raising the debt ceiling is going to be any good to spend your way back to prosperity. i believe what we need to do is to go ahead and raise the taxes across the board. that's what it's going to lead to. two or three years down the road in this debt now, they were the low end and come, 22%, 15%, just go ahead and raise taxes and bring some revenue and get things moving again.

that's what it's going to take to get this country moving and prosperity again. >> host: thank you. next is phoenix from kentucky. michaud is walking up there and is a democrat. you are on. >> caller: it just amazes me that we are even talking about not raising the debt ceiling. it is vital that needs to happen, our country being in the state it is, we need to spend. i don't see any reason to cut spending. every time we spend we create jobs we need deficit spending and to cannibalize the budget like the infrastructure we need to start talking to people like the 1%, they are already sitting on billions and billions of dollars but we are giving them tax cuts i don't really understand that. >> let's check with our facebook community and her some of the comments posted recently. let's follow the example.

how about we don't raise it the government doesn't deserve to be bailed out, or did deserves to be nonexistent. heather, stop the insane spending freeze, she posts. dave likes ron paul. how about lowering the wasteful spending and here's one more, in some instances the strategy to raise the debt ceiling may work to do this the public must of confidence in the, chris. recent public opinions show the american public is set up with congressional do bouck commodores raised the ceiling for too long and stopped the and this is responding, take care of the citizens, military personnel, disabled senior citizens come start spending money on infrastructure and stop the wasteful spending. next is carl from greene county north carolina. good morning to a republican there. you are on. hello. you are on. we can hear you, go ahead, please. >> caller: the senate hasn't

passed and why they are not passing a balanced budget deal just spending too much money. >> host: thanks for your comments. the treasury secretary tim geithner has been speaking out this week. here's one from this morning's paper visit to maryland. geithner addresses reform and you can see here he is visiting the wire factory and he tells us in the paper he sharply criticized the federal spending that romney supports. a strategy for economic growth requires a willingness to do things not just cut things. opinions of the government is adding to the deficit are overblown. he says the on the expanding areas are medicare, medicaid and social security because of the growing number of retirees. he said you can't repeal the

aging population that quick. next is a call from new york. good morning to frank an independent. good morning to c-span and the american people if we can remind we cannot -- the need to get the game out come the need to stop playing games because ronald reagan raised the debt ceiling 17 times. president george w. bush raised the ceiling seven times. let's just do the right thing. let's get the country moving again and let's get the public game out of the politics. thank you. >> next up, dallas. good morning. >> yes, good morning. how are you. >> joost great. >> caller: i'm just kind of glad to hear in there because of a goody was so hateful and

against president obama. he's not doing anything any person hasn't done or tried to do. so the lady from california was saying too much spending. since they want to cut everything let them cut it and i'm going to -- i have a lady yesterday that was republican almost in tears. she said her husband had went to an agency and had been there for four hours, but that's what they ask for. the republicans are talking about people's bodies and that money is just sitting for those rich people for all this time and no one has created one job. you are going to have on certainty if you don't open up your money and how your people for services and no one can have a job so all i can say to the republicans is i am so grout and just keep on voting them in and

loading them in. did you know what seniors get on food stamps? $16 a month and they act like they're giving somebody something. but have it their way and i am loving it. have a great day. >> lots of talk around the country about the day and it's on the front page of many of the newspapers we look at your triet here's the "los angeles times" facebook is a tough habit to kick and investors like that. some senators are not happy with the fact that the cofounder has moved singapore, and they say not paying his fair share of taxes as a result. yesterday chuck schumer introduced a measure that would address like him here is a story about it in this morning's wall street journal. facebook cofounder denied allegations by the two senate democrats he gave up with american citizenship to avoid

taxes saying his decision to live in singapore was purely personal and he would go to the u.s. hundreds of millions of dollars in taxes despite the move, and on capitol hill yesterday mr. schumer told reporters that he would turn his back on the country and had welcomed him and kept in safe, educated and helped him to become a billionaire. he reiterated his decision. it wasn't about taxes and i would invest in u.s. businesses and start-ups and believe and hope that those investments would create many new jobs in the u.s. and globally. he's already subject to an exit tax that requires certain expatriate's to give citizenship to pay tax on gains of assets exceeding 600,000. flat tax were set to be 16% of the for a lot of value on the day before he gave up his u.s. citizenship. next is a call from phoenix for independent.

>> caller: >> host: we are listening to the volume on the tv. we are going to let you go. sorry. up next is ohio, greg is the republican. go ahead. >> caller: thank you for c-span and for taking my call. it would be dhaka -- >> host: is it still? >> caller: is it what? >> host: is it a river of many fishes? i'm wondering if the river is still full. >> guest: it's doing very well. our local people love it. i want to say something very briefly, an african-american, a leadoff person - lead off for quite awhile. >> host: what is your business? >> caller: manufacturing. >> host: and what was it that you were making? >> caller: rubber, steel, plastic, whatever i could.

i just want to say particularly to my african-american people that watch the show and so on and so forth, i am a conservative but i want you to understand something. as much as i would like to have a free health care and unemployment and food stamps, all that, it cannot continue forever. there comes the point where as a family and household and business or whatever, you cannot spend money without bringing something back. i also want to bring something of heat about last night they started a business and i'm an

african-american we can from the means and did the best we could and we need to do. we were trying to do the best we could and that's what the american dream is all about we try to do the best we can. at least we have a chance but i want my african-american viewers and partisans to understand that we need to pursue. at least we have the chance. >> thank you. from the river of many fishes. "the chicago tribune" has a headline this morning about the nato summit arriving ready, set, nato. they will put the city to test. let's listen to the national security adviser sean donovan who yesterday talked to the

press about some of the issues in the national issues, security issues that are facing the leaders as they gather for the summit. >> the focus will be the security issues on friday. the next morning, the focus will turn to the economy coming and of course the global economy especially the economic situation in the euro are going to be of the top of the agenda. this is the first opportunity for the leader to differ about the economy to meet face-to-face send the president's election in france and the political events. this of course also will be the first meeting. this comes at a very delicate time this respect to the economy >> laura gallagher on facebook about the discussion we're having this morning about the

debt ceiling. let the bush tax cuts expire. during wartime? the time under bush the war funding was never in the budget. emergency funding had to be barred for the war again and again. this put their mind i guess year after year. next up, lost a guess. good morning. >> caller: and a bleeding heart democrat and i would like to vote john boehner get permission for grover norquist to go into the discussions and grover norquist took restrictions on what he could and couldn't do. >> thanks. don't know the answer to that question. man to get california. go ahead. >> caller: i have about four comments i will make. from facebook to move to a singapore i don't know what the democratic senators think they

are so he can leave any time he wants. number two, you've got all these people calling talking about the debt ceiling and seems to me as long as it is other people's money and they don't have a problem spending it or whatever, the of the thing is don't worry. republicans are going to take the senate back and president romney will take care of business and everything will it be okay. >> host: tom coburn and the senate has an idea of symbolism and recognizes that but here's what he's suggesting. he urges parties to return the to the funds to demonstrate fiscal discipline. senator tom coburn urges both national parties to voluntarily return millions of taxpayer dollars they received at the nominating convention saying democrats in the gop should show leadership reducing the federal deficit. the republican national committee's each pocketed $18.2 million from the treasury to help defray the cost of the

gathering in charlotte and the convention in tampa to officially nominate candidates. mr. colburn said getting back taxpayers' money would show voters both parties are serious about fixing the country's financial woes. next is a newborn carolina. how're you doing? >> guest: good. thank you. i was wondering, we keep hearing all the time about how the lobbyists are putting money into the government and the politicians. why can't some of the money from the lobbyists be diverted and used to pay the debt ceiling cracks >> host: that is an idea. thanks. another is in the news and that is warren buffett. he made a major investment in the newspapers. here's the headline on the times dispatch one of 63 media general newspapers warren buffett called

yesterday and he's the $144 million ushers in a new era for the change. next is a call from philadelphia you are on. >> caller: i just want to bring up the theme with taxing the rest verses not taxing. some of the people like mitch mcconnell say we can't tax the job creators. if that were true, the upper class is increased 01% we like to call them has increased the percentage but trouble to immelt since the 80's. if there were true we would be swimming in jobs right now. we need a government spending and middle class spending as a result of the jobs and the rich will get richer and the benefit

of devotee so if we don't straighten up the class is we're going to continue. >> host: thanks so much from philadelphia. joseph on twitter republican conservatives not want to not pay our bills and improve the economy and a novel theory. usa today is a profile of hillary clinton this morning. she's winding down her tenure at the state department. you can see that headline and the picture. this is a full page inside of the newspaper and here is a little of what they say. americans are supportive of the three clinton. 16% view her favorably in the gallup poll taken may 10th to 13th, the second highest mark on the washington career. she's been rated the most admired woman in the world in the gallup polls for 16 of the past 19 years but stands between clinton and the diplomats of the past.

a landmark accomplishment and a free hand from the white house for replacing history. perhaps the biggest is advancing middle east peace, quote, she hasn't picked up the volume leader has president obama of the former legal adviser to the palestinian mahmoud boss they just don't have a policy. back to the phone calls we are asking you what your message to washington would be about the diplomat. >> caller: good morning, susan. countries with trade surpluses would have that problem. i think what we need to do is produce for ourselves again and we take people off the unemployment and they become taxpayers. the trade deficit problem and i think what we need to do is

start producing four hours of saddam. post covers a true story trade war fears of the solar imports and the trust with the industry, the u.s. commerce department is duties on imports of chinese oversells with the trade dispute and the solar industry over the decision. the proposed tasks for dumping and selling at less than fair value or 31% to 91 chinese suppliers and about 250% with other imports from china. the decision as the collapse in prices for the solar components caused by global mengin autrey overcapacity after aggressive expansion particularly in china. next up is lake charles louisiana. francis, a democrat. >> caller: yes, good morning. the debt ceiling should be raised simply because it is a matter of us owning our debt.

there's no reason our debt ceiling should be raised but i would like to say something to the man from ohio, the black conservative. it's nice of them to say that black people don't need what we should get and that it's our right because we should earn whatever we are supposed to. i think we already got that message. i don't think we need this conservative to tell this to us. maybe he ought to check and find out just who is using food stamps and is living on the

texas and government handouts so he starts throwing in about them being a black conservative, that is not helping the situation and this certainly isn't helping him because he doesn't look like he's intelligent responsible. >> host: lake charles louisiana. a couple of items here as we round out our conversation with you. justice breyer, this is the second time this year justice stephen breyer has been a victim last was a vacation home in the caribbean this time in the washington home broken into and a housekeeper discovered the burglary on may 4th. also the house to consider proposals to the indefinite detention after the arrests on the u.s. soil. lawmakers are considering amendments of national defense authorization act that's what

they're doing right now and we will begin at nine this morning. one of them by a adamle democrat and just enough michigan the republican with a scale back a highly contested provision about indefinite detention created in last year's version of law by saying it does not apply to the domestic arrest to the couple more minutes left me also show you this from the journal for the new mission in the job and this is on private leads to scientific worries. now the officials are debating whether the plans may be faster in the jobs to stimulate the economy tension between boosting science or the economy erupted during a meeting this year the agency's headquarters in washington addressing a group of high level of sight and emphasize the game of outsourcing causes the transportation to the industries to thousands of high-tech jobs.

all right, back to the debt ceiling. vivian tweets boehner once another sequestration i guess the one we have isn't enough. next is york pennsylvania. leroy come independent. good morning, sir. ..

everything doesn't have to be top-of-the-line because you just happen to be senator this year. you know, do something for the people. hey, take a cab every now and then. take your bodyguards with you. use a limousine as a cab. take your bodyguards with you, but don't always have to overspend. >> host: all right. thank you for your call. this week on the presidential campaign trail there were reports about a planned attack at beit a pac that can hit it romney was forced to respond to the gentleman behind this was identified. this is his picture. and he is described as a billionaire philanthropist with particular interest in opposing earmarks. previously played a big part of the political scene that took an unflattering turn in the spotlight with the new york times article that said a report he commissioned detail how a super pac ending spending but in

million toward an ad for obama and that reverend jeremiah right. the chicago clubs and includes the high profile obama fund-raiser, moved on thursday to disavow the racially charged idea. not only was the plan merely a proposal, one of several committed to the ending spending action fund, it recessed an approach to politics and was never a plan to be accepted, only a suggestion for a direction to take but said brian baker, president of the fund. and the founder of omaha based td ameritrade. biographical information about him, a former democrat who became a republican, leader renounced of party affiliation to become an independent. his daughter is a lesbian activist and prominent bumbler for obama. she raised at the million dollars for the president. a little bit from the campaign trail this morning. we have one call left, and it is from annapolis.

dagen republican. you will be the last on this debt ceiling conversation. go ahead. >> caller: hi, good morning. i thought the comments that were made by the last caller, the independent color were pretty good. i liked a lot of what he said. i find it really incredulous that we would even consider raising the debt ceiling further. what that means is, we are going to spend, spend, spend. we are now borrowing over 40 percent of everything we spend. that is just going to keep going up. totally irresponsible. i stand back a little bit and listen to what your callers saying. most of the callers calling in seem to be saying they want the government to go out and take money from everybody else and give it to them. that is a terrible thing for this country to go in that direction. it sounds like to me the country wants to become a socialist nation. my reaction would be, you know, i have a lot of money. what i'm going to do is sit on it.

i'm not going to invest in anyone, certainly not this economy until i see the nation turning around and be more responsible for what it is spending. when it starts to do that i will invest in this country again and in this economy. >> host: thank you. our discussion about the debt limit, from annapolis maryland. >> ladies and gentlemen -- >> on now to chicago where secretary of state hillary clinton will be here shortly. she'll be talking about global food security, and the remarks are part of the daylong summit here in chicago hosted by the chicago council on global affairs. earlier president obama announced a $3 billion in private sector pledges for africa as he kicks off the international summit at camp david and the g8 meeting in chicago this weekend. again, just waiting for people to arrive here at the chicago council on global affairs meeting. we will be hearing soon from secretary of state hillary clinton about global food security. [inaudible conversations]

[inaudible conversations] >> ladies and gentlemen, please keep your seats. please take your seats. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> and c-span2 is live here in chicago waiting for the chicago council on global affairs to begin its next panel. we will be hearing from

secretary of state hillary clinton talking about global food security. it's running a few minutes behind, so in the meantime a look at some of this morning's washington journal. we heard from freshman representative john duffy of wisconsin who talked a little bit about what he has learned since his first days in congress. we will come back to the chicago council as soon as things get underway here. >> host: and congressman john duffy, is very first visit to the washington journal. he's ready for you callers. he represents wisconsin's seventh district. he is a freshman member of the house. came as part of that tea party class. we will talk to him about how his accomplishments have shared. wisconsin state journal this morning, headline, 5900 jobs lost in april. this is the government's jobs report. this is for your state. what is the key?

create jobs back. >> most people understand that we have some things going on in wisconsin right now. the governors recalls, the elections will be held june 5th. we just had a report cannot earlier this week as well readjusting the estimates from two dozen 11. they have estimated that we lost jobs. we now find out the actual numbers came in, we gained 25,000 jobs over the year of 2011. we are in a situation where you need to open up. you need to have a pro-growth policy in place. and that the governor walker has set up those policies where he is restructuring the tax cuts, trying to make it easier for businesses to set up shop. wisconsin is open for business. frankly i think it is. as been a tough economic environment, like everywhere in the country, but we have seen a lot of job growth in our district. businesses that are choosing to come to wisconsin instead of many other states around the country. so i have not seen the details behind the number yet, but i

know that things are tough, but they're looking at. >> host: job growth in your district, we put some numbers. tell us if we have this right. bureau of labor statistics numbers national unemployment rate 8%, wisconsin just under seven. lower than the nation. york county is higher, at over 10%. >> guest: right. a part of the economy. such a look at wisconsin's seventh congressional district, the northwest border of the state. and we have some counties that fare better than others. we have a lot of manufacturing, farming, forest products in our area. but up in ashland, that is where i was living, the d.a. there for ten years. there are some troubled economic times. one of our frustrations is that we have -- >> we are going to head back out to chicago for the chicago council where lindsey gramm, senator nancy grant is just taking the stage. you can find the rest of our

conversation with congressman duffy in its entirety on line. >> the year in washington. this is a worthy cause. the lady i am about to introduce, a little pressure on me here because i don't want to run a promising political career [laughter] 2016 will be here before you know it. [laughter] she is going like this. yes. [laughter] anyway, at the risk of running a career i'm going to say nice things about her. people out there listening, don't hold that against me either. [laughter] the reason i'm here, africa will bite you, once you go and you see things up close and personal , from of role model perspective as a republican i do appreciate the kind introduction

. the former secretary of agriculture. george w. bush is a good role model for any republican that was to be involved in africa. president bush, his legacy when it comes to africa is a good one, something republicans and democrats should try to follow, and i just want to publicly recognize that president bush started some great programs. president clinton and president obama have tried to make this bipartisan, but there are a lot of young children alive today because of the work of the bush administration, the obama administration, and the clinton and ministrations. when you go to africa it jumps out at you that we abandon the continent and our own economic and national-security peril. when you go to africa you see their is a little bit of money well spent that goes a long way. washington, a lot of money doesn't go anywhere. [laughter] goes down the whole it seems

like. but the director is, i think, a good example of a public servant who is taking a business approach to a very difficult job, trying to incorporate the private sector. the purpose of this exercise today is for the people like me in the government, secretary clinton and director shock, to let you know the private sector, the face based community, the gates foundation, the private sector, an entrepreneur real businesses in america, that we can do this that you. the public dollars being spent, i think, are being well spent. director shaw has really been very good at reorganizing usaid. secretary clinton, if we paid for by the mile we would be more bankrupt. [laughter] i have never known someone so passionate about her job. she along with director shaw have looked at all of the programs, particularly the food

security programs to make sure the american taxpayer is getting their value when it comes to helping africa. and to my republican colleagues to have been supportive of the foreign operations account, i know when you lie this deep in debt republican and democratic members of the congress have a hard time going back home and explain to their constituents the money that we are investing in africa we are so broken home. the foreign assistance account is less than 1 percent of our budget. and i embrace the idea that america is one of the leading voices, if not the leading voice in the world for good. i accept that as our destiny. when it comes to africa there are three bills that i have for our nation, one, to create jobs in america. 85 percent of the continent has no power. one day they will. let it be american power companies and american entrepreneurs. the ability to feed africa is very much of the tipping point. to our european allies, please be more open-minded about modern

food and agricultural practices. [applause] please. [applause] and secretary clinton has been a champion of trying to open the door to africa so that we can increase our food yield back by embracing farming practices that are in the 20th century. forget about the 21st. in africa is ready to move forward. a lot of energetic people were turning the corner on malaria, aids. the ability to feed and sustain the nations in africa is going to be a good business opportunity for this country, our european allies and france. please open your mind and hearts to better farming practices. the other issue is, i don't want to give the whole continent over to the communist chinese. [laughter] i want to be able to compete for

the hearts and minds in africa and create jobs for americans that our chinese friends are all over africa taking more out than they give back. and quite frankly, i would like to have a policy where we can engage the continent and have an alternative to some of the chinese business practices that are being offered to the african -- the continent of africa. and the last thing that i would remind people, if you abandon places in africa, other people will fill in the vacuum. radical islam is rearing its ugly head throughout africa. and if we can engage the continental and countries within the consonants in a more businesslike fashion, in a when-when fashion where you allow young girls to go to school and people can't feed been cells, sustain themselves,

create an economy, the worst nightmare for these radical islamic movements is a good education and a good job. that is worth 100 brigades. we are involved in two very long wars in a rock in afghanistan. the money that we have set aside in our national budget for africa we are getting a good return on investment. and if you believe, as i do, that there has to be more answers to finding radical islam been killing and capturing terrorists in using military force to my would argue the account that we are talking about here, the food security program, feed the future will do more to combat radical islamic terrorists then any military engagement strategy we could come up with. [applause] so we cannot afford to be -- not to be involved in africa.

it would be a very short-sighted policy for the united states not to be involved with the private sector. now, as to the private sector, the amount of money we have at the federal level for africa is about $8 billion. the amount of money to be made helping the african people is hundreds of billions of dollars. the number of jobs created in america helping the african continent is millions of jobs. and we need you. we need you more than ever. this partnership that we are talking about today is the future. no more money to dictators. money goes to people. through the private sector it is going to get its best rate of return. now, my job was to and is to introduce secretary clinton. all i can say is that if you had to pick a person to tell the american story in africa or

anywhere else and god knows we have our political differences. i have to say that. for her own sake and mine. [laughter] we have a lot of commonality. she is dedicated to her job. she loves her country. she understands the issues. there are a lot of them in her job to understand. more importantly i think she is a good role model for young people, not just wed who want to help -- [applause] we look to america for and help. on behalf of all of us in the united states it is my great pleasure to introduce one of the most effective secretaries of state, greatest ambassadors for the american people that i have

known in my lifetime, secretary hillary clinton. [applause] >> thank you all. thank you. thank you. well, that was really a wonderful introduction from someone who i have had a great pleasure of working with on a number of important issues and am delighted to be working so closely with senator lindsay gramm again as he is the ranking member on the foreign operations subcommittee of the senate appropriations committee. and i am so appreciative of his strong support of america's developments and diplomatic

efforts around the world. we promised him that we would seize and erase all tapes of what he has just said. [laughter] don't take it personally, any of you in the press, but this is to protect them going for it. well, this has been an amazing day. i am all that stands between you and getting out into this absolutely beautiful afternoon and enjoying some of the sites that washington has offered. but i wanted to come to close out the formal part of the program, to express great appreciation first and foremost to the chicago council and particular catherine and dan for bringing us all together today to our very special guest, the heads of state and government from tanzania, ethiopia and, and

to tell you how exciting it is that we have this partnership at the highest levels with the countries that you represent here at this conference and for the months and years ahead. i also want to thank ron shaw and his great colleagues at usaid. he has led a tireless efforts on behalf of advancing food security worldwide along with wonderful help of people not only here in washington, but in our post missions across the globe. thanks to our g8 partners. i see representatives from the g8 countries here. thank you for your commitment to food security for the great work that started and has continued forward to here in washington.

and thanks to all of you in the private sector, the not-for-profit sector, the academic world and the faith community, the agricultural productivity and research world. thank you all. and this has been a real diverse conference. not only heads of state and government and foreign ministers and aid workers and help -- health experts and business men and women, but we had at least one rock star. i have it on very good authority . and although we hail from different regions and hold different points of view as senator gramm said about his and my perspectives. on this we all agree, the need to drastically decrease hunger and poverty worldwide and strengthening global agriculture

is a powerful way to do that. no, it was not long ago that a symposium on food security would have drawn a very different crowd. for years passionate and persistent advocate -- advocates made the case that this issue needed to be on the development agenda of every nation. well, the united states listen to. the g8 countries listen to. now is a signature issue. billions of dollars have been pledged by the world's largest economies and those pledges are being met. they g20 has embraced this mission. so the world bank and the african union. thirty african nations are creating national agricultural investment plans and revising their budgets to make agriculture a leading priority. now, in the united states we have created our own global food security initiative, and as you were able to hear directly from

president obama earlier today, feed the future is at the forefront of our global development agenda. now, we took on food security right out of the box in this administration because the facts were so compelling. yes, it is a complex far reaching issue, but it comes down to a couple of very key facts. nearly a billion people worldwide suffering from chronic hundred. by the year 2015 the global population will climb to 9 billion. the world will need to produce 70 percent more food than we do today just to feed everyone. 75 percent of those world's poor live in rural settings and depend on agriculture for their livelihood. there are many other facts, but i think these three are sufficient, not only to make the case, but to add up to a tremendous opportunity. if we can help the world's poor

produce more food and sell it in the thriving local and regional markets as well as on the global market we can decrease chronic hundred today. we can build an ample food supply for tomorrow. we can drive economic growth and places where poverty is persistent, and we can have better futures for men, women, and children. now, i think what we are seeking to do through our investments in global agricultural is not just to solve the problem of hunger. we also want to solve the problem of extreme poverty. agriculture in our opinion may be the best intervention point to do that. development dollars spent on agriculture have the greatest impact on poverty reduction, more than money spent in any other sector. so if we want to make big gains in the fight against poverty,

agriculture is the best way to do that. there is no place that that is more true than in africa where there is such great potential for gains in agricultural productivity. so together african governments, donors, international organizations, the private sector, and civil society can close the productivity gap and feed many more people. having said that, agriculture development can deliver strong results. i have to admit, the goals we have set for ourselves are very ambitious. they need to be. the countries that we are supporting are trying to transform how people farm, what people eat, how crops are stored and sold. that is not easy. some of the changes they seek will take years, perhaps even generations to lock into place. so we need to have the foresight

and to stay committed to to this mission. many were the ideas have been shared here today about what should come next in the global fight for food security. i want to emphasize three issues that i believe deserve our particular attention. all three are areas in which progress is both urgently needed and well within our reach. all our priorities of the new alliance for food security and nutrition that president obama announced this morning. the first is the centerpiece of this symposium. partnering with the private sector. president obama's said earlier, the new alliance includes a major push to mobilize more private sector investment and involvement. now, part of the reason for that is simple math. consider the 30 african countries that have created or are now creating a comprehensive

national agriculture investment plans. when we look at their own spending, even in those countries that have met the goal of allocating 10 percent of their national budget to agriculture and then when we add to that the pledge support from development partners like the members of the ga to, the significant gap still remains. because governments alone cannot supply all the investment needed to transform agriculture. we need the private sector. now, that is not only true of agriculture. private investment has become invaluable to development across the board. the 1960's, official development assistance from governments and multilateral organizations accounted for 70% of capital flows going into developing

countries. today that number has fallen to just 13%. that is not because public assistance has gone down. it is because private investment has skyrocketed. now we need to drive more of that investment toward agricultural growth. and beyond investment, the private sector has a great deal to offer in terms of skills and expertise. whether it is improving the supply chain, fewer crops are spoiled on their way to market as premium food is doing in gonna or training growers in certified seed production might tanzanian or expanding their production and processing of highly nutritional foods like chickpeas and soybeans as ethiopia. businesses often know how to do

important things better and more cost effectively than anyone else. african countries are taking the lead on cultivating private sector involvement. they are reforming their policies to make their economies and agricultural sectors more attractive for both domestic and international investment and private sector activity. their partners can support this by launching our own innovative collaborations with businesses, both local and international. now, i do realize that not everyone welcomes wholeheartedly the notion of more private sector involvement. let me be clear. while global corporations play and irreplaceable role, we want them to prosper alongside local business, not at their expense. private sector activity must start with the small holder

farmers whose future prosperity is the focal point of all our effort and then expand outward from there. furthermore, i know that some worry that by asking the private sector to step up governments are hoping that gives us the excuse to scale back. well, i want to say as clearly as i can that the united states is in this low long run. we asked others to hold us accountable as we will do the same in turn. we believe accountability must apply to our private sector partners as well. but private sector activity is the only lasting basis for self sustaining economic growth. and ultimately, after all, isn't that our goal? the second topic of want to

emphasize is nutrition. in recent years we have learned that improving access to food does not automatically lead to improved nutrition, and neither does raising incomes, and are creating new markets. but leads to improved nutrition, focusing on nutrition itself and integrating it into all our food security initiatives. nutrition is too important to be treated as an afterthought. childrens entire lives are shaped by whether they receive enough of the right nutrients during those crucial 1,000 days from pregnancy to second birthdays. and this, in turn, heavily influences whether a country will have a healthy and educated work force. so when we overlook nutrition we set ourselves up for a less healthy, less productive, less prosperous future.

two years ago during the annual meeting of the un general assembly i joined international leaders, including secretary general bond key moon, foreign minister of ireland and others in announcing the 1,000 a partnership in support of this scaling a petition movement known as sun. that was the first time foreign ministers had gathered to focus squarely on nutrition as a critical development priority. since then a growing number of countries have committed to improving nutrition. twenty-seven countries have committed to taking action through the some movement, and i urge more countries to join because we have proven solutions to the problem of under and malnutrition. and let me also say that undernutrition is not just a problem facing all the developing countries. we are struggling with it in the united states, and we have

plenty of food. many people, including far too many children are not eating nutritious food. they are eating -- they're not eating in a way that improves and sustains their health, and they are increasingly facing serious health problems. in chicago on monday while the nato summit is under way there will be a 1,000 days summit to focus on the problem of child undernutrition, not only abroad but here at home in cities like chicago. the mayor of chicago is taking on the so-called food desert as a public health priority because this problem of undernutrition cuts across all borders and all in comes. the united states has set an ambitious nutrition target within feed the future. we aim to reach 7 million children within five years to

prevent stunting and to increase child survival. i think we have the capacity to reach even more, and if we all work together we can set a global target. the third issue, i want to emphasize is gender equality. i'm sure it is no surprise to anyone that i am convinced women are critical to our success in every field of endeavor. this is not a matter of sentiment or personal interest on my part. this is also actually a fact based evidence based statements. it has been said that -- [applause] it has been said that the modern face of hunger is often a woman's face because in many parts of the world women still last and the least.

the face of a farmer is often a woman's face as well. according to u.n. food and agriculture organization's women comprise nearly half of the agricultural work force across africa. so if we want to support farmers we also have to support women. that is not something that happens automatically. it has to be part of a deliberate determined strategy that takes in gender equality into account across everything we're doing. and the results speak for themselves. the fal estimates that if women farmers have the same access to productive resources as men, seeds, credit, insurance, land title and so on, they could increase yield on their farms by 20 to 30%. that, in turn, could raise total agricultural output so much it

could reduce the number of hungry people worldwide by up to 150 million. now, the obstacles that stand in the way of women's equal access to resources and agriculture or anything else are unfortunately formidable. they include loss, deeply held tradition, lack of the permission, plain old inertia. and we have to overcome each and every one of them. we cannot just hope that women get the support that they need as a side effect of our work. we have to push for it. and it is not optional. it is not marginal. it is not a luxury. it is not expendable. it happens to be essential or we will never reach our goals. the united states has integrated gender equality throughout see the future, and we will do the same with the new alliance for food security in nutrition. we have created new tools like

the women's empowerment in agriculture index to measure our impact, and we look to our partners to help us in this broad effort. when we liberate the economic potential of women, we elevate the economic performance of communities, nations, and the world. so the work we are talking about today will require all of us to change how we do business. that is not always easy. i have seen that firsthand at the state department in usaid. to give you just one example, i instructed our ambassadors and many parts of the world to take on agricultural issues, not something that are typical ambassadors know a great deal about. they have educated themselves about land reform and export bans and fertilizer subsidies. they have gone out and worked closely with our partners to help them achieve their goals.

no institution is easy to change some of you know that all too well. but the state department and u.s. aid have changed for this issue because we are so convinced of its overall importance. and we will all have to change and change again to keep moving forward. but if we continued to align our investments and resources, find opportunities for partnership, shares of our progress and share the lessons from our mistakes and hold each other accountable i absolutely believe we will succeed in significantly decrease in hunger and poverty worldwide. in the past three and a half years that i have been privileged to serve as secretary of state i have travelled to nearly 100 countries. in many i have met with farmers and agricultural scientists, policymakers, nutrition experts and of all i have seen and all

the people i have met my hope and commitment has only been deepened to. there is a sense of anticipation that we can move ahead. not since the green revolution has there been this level of focus by the world on this problem. and we also are heartened by the real progress that we see already in the wake. when i was in tanzania last year i visited a women's farm cooperative with the prime minister. and the farmer receives funding from usaid. the women there are raising vegetables, peppers and leafy greens mostly. but they did not have a market nearby where they could sell their excess crop. they started one. then they built cooling hats and even though their vegetables are high-value the women don't sell

all of them. a save them for themselves and their children because they have been made aware of how rich they are in nutrients, especially for growing children. they were so eager to show me their crops, their drip irrigation system, their greenhouse. they know they are contributing to something of great importance , not only better lives for their own children, but a better future for their country. so to anyone who wonders whether progress is possible, go visit women like the ones i met in tanzanian. go visit the scientists in india who are carrying on the tradition of the green revolution by developing drought tolerant and disease resistant seeds. go visit their counterparts in kenya who are working in their laps and greenhouses to create a green revolution in africa.

look at the school lunch program in brazil which provides nutritious food every day to every brazilian child all grown by small holder farmers. let's get the policy makers in indonesia who have the foresight to make a substantial investment in nutrition as a strategy for economic growth. let the farmers, the entrepreneurs, the activists, the political leaders, the teachers, the parents who are devoting themselves to making their communities healthier, more just, and more prosperous. these are the people who are the front lines of progress. our place is standing right behind them, giving them the support that they need to succeed. and i am very proud to be part of this movement because, indeed, that is what it is. and to work with each and every one of you and countless others like you who sign on to this

movement mission, i am absolutely convinced that we can not only keep the progress going , we can show results that will just surprised people everywhere. give hope to those who will never know our names, will never understand what we were doing here in washington, but whose lives will be so much better because we made this commitment together. thank you all very much. [applause] [applause]

>> and one of the last speaker's wrapping up the chicago council meeting here in washington, secretary of state hillary clinton. you can hear more about food security monday morning on washington journal with a focus on the role of the u.s. agency for international development. more live coverage tomorrow from the road to the white house when florida senator mark arubia speaks at a fund-raiser in south carolina. he has been mentioned as a possible vice presidential running mate for presidential candidate mitt romney. speaking to mar night at 8:00 eastern, and we will have that live on our companion network, c-span. >> when people are saying to him , don't take the vice presidency. right now you why the most -- you are a powerful majority leader. don't take the vice presidency. you won't have any power. johnson says power is where power goes, meaning i can make

power in any situation. his whole life, but nothing in his life previously makes the same exactly like it's right. >> and then at the conclusion of our conversation with robert caro of the passage of power. his multivolume biography of the 36 presidents sunday night on c-span joining. >> even though job opportunities are scarce in this economy, it's not for nothing the u.s. but this time preparing. jerry falwell senior wanted to observe that you don't determine a man's greatest by his talent or well off as the world does but rather by what it takes to discourage. america needs your talent and skill. >> don't except somebody else's destruction of the way things ought to be. it's up to you to right wrongs. it's up to you to point out

injustice. it's up to you to hold the system accountable. sometimes up ended entirely. it's up to you to stand up, to be heard, to write and to lobby, to march, to organize, to vote. don't be content to sit back and watch. >> president obama and mitt romney delivered commencement addresses over the past few days you can watch them on line any time at the c-span video library and over the next few weeks before other commencement addresses on the c-span network which you can clip and share at c-span.org / video library. >> you're watching c-span2 with politics and public affairs weekdays featuring live coverage of the u.s. senate. on weeknights what's key public policy events and every weekend the latest nonfiction authors and books on book tv. you can see past programs and get our schedules at our website, and you can join in the conversation and social media sites.

>> today the pentagon said that china's military has begun to undertake new historic missions outside of east asia, marking a shift in chinese military strategy. the defense department released its annual report on chinese military capabilities and strategy and the acting deputy assistant secretary for east asia and asia-pacific affairs spoke with journalists about the report for half an hour. >> thank you. thank you very much. i appreciate the opportunity to come this morning to brief you today on the 2012 edition of our report to congress on military and security developments involving the people's republic of china. the national defense authorization act for fiscal year 2000 as amended in fiscal year 2010 mandates that we publish this report in both unclassified unclassified form. the report is a product produced in partnership between the

office of the secretary of defense for policy in the defense intelligence agency and transmitted to congress by the secretary of defense. a very extensive mission process which includes the department of state, homeland security, energy, commerce, treasury, intelligence community, national security staff. it reflects the views that are broadly held across the u.s. government. we intend to report to be factual. we try to maintain an objective town and let the facts speak for themselves. the report is available on line as of this morning. you may have noticed that as a new look and format, we have streamlined and consolidated in keeping with the dod guidance for how we're handling the reports to congress. however, we continually address the same range of questions and issues that is requested by the congress and the legislation. president barack obama and

president who gentile committed to work together to build a cooperative partnership based on mutual respect and mutual benefit and the common interest to both countries and to address 21st century challenges and opportunities. this report highlights where we see the military in china heading today, but its strengths and weaknesses to the opportunities and potential challenges we see going forward. with that would like to summarize the trends and developments we see. first, china is pursuing a long-term comprehensive military modernization designed to improve the capacity of the people's liberation army to fight and win what they call local wars under conditions of in formalization or high-intensity information center regional military operations of short duration. china's leaders to see this matter as a central component of their strategy to advance china's national development goals during the first two decades of the 21st century.

with this development china's presence in regions is expanding and creating new economic and diplomatic interest. as these interests of groan and china has assumed new roles and responsibilities in the international community, china's military modernization is also to an increasing extent focusing on investments to conduct a wide range of missions including those that are far from china. even though the pla today is contending with this array of missions preparing for contingencies in the taiwan strait appears to be the principal focus and driver for much of china's military investment. over the past year relations have improved and may continue to improve aid by the reelection of taiwan's president in january january 2012, china's military shows no sign of slowing its efforts to prepare for the contingencies. in addition to taiwan's china places a high priority on

territorial claims. in recent years china has begun to demonstrate a more routine and capable presence in both the south china sea and east tennessee. notable as well, pla operations as part of what china's president refers to as the new historic missions. in 2011 the pla demonstrated the capability to conduct limited peacetime deployments in military operations and a great distances from china including in the areas of non-combat and evacuation, counter piracy, and peacekeeping. there is an opportunity here, for china to partner with us and other countries to address the type of challenges that we all face in the 21st century. at the same time china's leaders in 2011 sustained investments, short and medium-range convention of ballistic missiles , advanced aircraft and innovative the fences in counter space and cyber warfare capabilities which appeared

designed to enable will recall anti access in the areas emissions. pla strategist refer to it as counter intervention operations. the january 2011 flight test next-generation fighter aircraft highlighted china's ambition to produce advanced fighter aircraft. we expect the j22 achieve an effective operational capability the senate in 2018. in august 2011 china commenced its first aircraft carrier which it purchased from ukraine in 1998. this aircraft to become operational available to the chinese navy by the end of this year and we expect it will take several additional years for an air group to achieve and minimal operational capability aboard the aircraft carrier. this comprehensive military modernization supported by a robust increases in defense resources, on march 4th of this year beijing announced an 11% increase in its military budget raising its publicized budget to 106 billion u.s.

dollars, continuing more than two decades of sustainable budget growth. however, estimating china's actual defense expenditure is difficult due to lack of accounting transparency, is incomplete transition from a command economy to a market economy, china's public defense expenditure also does not include large categories of expenditure areas. for example, last year's public defense budget was $91 billion. when all is said and done actual military expenditure for last year was as high as $180 billion. we don't have the calculations for the current year. while we welcome actions china has taken to improve openness in the amount of information made available by its military, many uncertainties remain which only underscores the importance of building a sustained and sensitive military dialogue. in this report we describe our efforts to work toward a healthy and reliable and continue as long term military relationship with china which we view as an

essential component of positive cooperative and comprehensive u.s.-china relationship. highlights of the key engagements of last year include the participation by china's deputy chief in the third annual strategic and economic dialogue in may for 2011 which also included the participation in the strategic security dialogue which was sold for the first time on the sidelines of last year's strategic and economic dialogue. we also held the annual defense policy coordination talks on disaster management exchange beating under the auspices of the military maritime agreement. now, the prc postponed several events that were scheduled for the end of the year citing the september 2011 taiwan arms. however, working on the context of high-level dialogue continued. in december of 2011 the undersecretary of defense for policy travel to beijing to participate in the annual u.s.-china defense stocks.

more recently following the successful visit to the united states by china's vice-president the united states and china constructed a military engagement plan for the remainder of this year. the robust plan includes a mix of high-level visits, operational engagements, and academic exchanges. just a few weeks ago the united states and china had the fourth strategic and economic dialogue in the second round of strategic security dialogue in beijing. as you know, china's defense minister travel to the united states in the second week of may. during this trip he affirmed the need for continued strategic communication enhancing strategic mutual trust through dialogue. in the future we are looking toward the u.s. pacific commander to travel to china as well, secretary panetta has been invited to visit china during the second half of 2012. we will continue to use military engagement with china as well as

means to demonstrate u.s. commitment to the security of the asia-pacific region and will continue to it reenforce china. in conclusion the report has a lot of interesting information. we hope it will contribute an irresponsible way to the debates that are going today with respect to china's military modernization. with that brief summary of would like to take a number of questions. >> on the topic of as bin-, d.c. the capability and particular. >> well, we continue to highlight in this report some of the concerns that we have about china's investments in cyber capabilities. we know that china is investing in that on the capabilities to better defend their networks, but also they're looking at ways to use cyber for offensive operations. we also highlight a number of

various areas where we seek to engage in insider activity focused on computer network exploitation. that continues to be a concern of ours, and we have raised it and talk to the chinese about it, most recently during this strategic security dialogue in beijing as well, secretary panetta reached out. so this is something that we continued to pay very careful attention to and be very mindful of. >> seem to be accelerating the development. >> specific data on accelerating, something that seems to be sustained. i think there are continued efforts in this area that reflect the importance they're placing on developing cavities for cyber warfare, but i can't say whether or not it's accelerating. >> hi. thank you. could you elaborate on the chinese capabilities outside the action and how u.s. and chinese,

[inaudible] >> well, we -- you know, as we talk about in the report, we see that china is investing in a range of capabilities prior to the comprehensive military modernization program. some of the areas that we pay careful attention to our capabilities that we would consider supportive of anti access an area denial types of operations. it is not one particular weapon system. we see china investing in a range of late capabilities that start with undersea warfare. investments in submarines and advance surface combatants, advances in the capabilities for integrated air defense, conduct precision conventional strikes. we have concerns because these types of capabilities could, if

employed affect the ability of our forces or other forces in the region to be able to operate in the western pacific. and so we highlight that as something that we are paying very, very careful attention to as something that was raised in the context of a broader, you know, a global concern that we have about anti access area denial capabilities, the january defense strategic guidance. >> reuters news agency. he didn't mention in the opening remarks that the report contains considerable efforts devoted to it china's interest in dual use technology and active leveraging of its commercial economy, you know, for defined military technologies. are there trade policies coming in?